Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social

Environmental Achievements

• Strengthened desulfurization, denitrification, and dust removal capabilities at coking and power plants to achieve cleaner emissions.
• Improved efficiency in extracting refined coal from raw coal, reducing coal gangue generation.
• Maximized recycling of by-products and added value to waste products (e.g., coal gas supplied to local community, residual materials sold to building material plants).

Social Achievements

• Provided district heating for 32% of the industrial area in Xiaoyi District for four consecutive years.
• Active employee participation in the Wutongzhen Cultural and Art Festival.
• Implemented occupational health and safety policy with medical checkups, emergency drills, and an award and penalty system.
• Provided an average of 20 training hours per employee (29,920 hours total).

Governance Achievements

• Complied with the Code on Corporate Governance Practices (CG Code) contained in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

Climate Goals & Targets

Environmental Challenges

• Material uncertainty related to going concern due to total current liabilities exceeding total current assets.
• Weak coke market in previous years leading to operating losses.

Mitigation Strategies

• Completed a share subscription raising HK$210,000,000, using part of the proceeds to repay a deposit and the rest as working capital.
• Issued convertible bonds to settle penalty charges and accrued interests, with the bondholder waiving interest accrued from 1 January 2016 onwards.
• Negotiated with lenders and creditors to restructure indebtedness, including waivers of debt and interest.
• Improved operating performance leading to a gross profit of HK$134,415,000 and a net profit of HK$60,381,000 in 2016.

Supply Chain Management

Responsible Procurement

• Procurement Policy and standardized purchasing procedure

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ESG Reporting Guide (Appendix 27 of the Listing Rules and Guidance set out by The Stock Exchange of Hong Kong Limited)

Environmental Metrics

ESG Focus Areas

• Air Emissions
• Wastewater
• Energy and Water Consumption
• Occupational Health and Safety
• Employment
• Training and Development

Environmental Achievements

• Provided 31% of heating demand for local residents, indirectly reducing air emissions from burning crude coal by local farmers.
• Strictly complied with applicable regulations, laws, and standards related to environmental and social aspects.
• Continued investment in state-of-the-art facilities and implemented emission control schemes to further reduce on-site emissions.
• Recycled all wastewater and reused by-products to the maximum extent.

Social Achievements

• Maintained a 100% training rate for employees.
• Average training hours allocated to each employee was 20 hours.
• Provided free facilities such as basketball court, table tennis court, gym, and movie theatre to employees.
• Canteen used self-grown vegetables and meat products from licensed farms to ensure food safety.

Governance Achievements

• Complied with relevant laws and regulations that have significant impact on the operations.
• Maintained a high standard of corporate governance practices.

Climate Goals & Targets

Environmental Challenges

• Fluctuating prices of coke and coal.
• Domestic environmental regulations applicable to the coke industry.
• Credit exposure with counterparties.
• Safety management.

Mitigation Strategies

• Closely monitoring the economic environment and adopting corresponding business strategies (adjusting production plans and strengthening cost control).
• Timely investing and upgrading existing equipment and facilities to meet domestic environmental standards.
• Holding enough collaterals over trade receivables, adopting credit policies to strictly control outstanding receivables, and expanding the customer base to diversify credit risk.
• Adopting safety management policies and control systems, reinforcing safety warnings and education, providing safety skills training, and improving employee safety awareness.

Supply Chain Management

Supplier Audits: 10 major raw materials suppliers audited annually

Responsible Procurement

• Risk assessment of major suppliers
• Suppliers’ pre-survey, selection, renewal, and risk assessment checklist

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced greenhouse gas emission by 27% compared to the previous reporting period.
• Completed rainwater collection pond installation to minimize industrial pollutants.

Social Achievements

• Maintained a relatively low staff turnover rate (7%).
• Raised employees' salaries by around 53%.

Governance Achievements

• Established three Board committees: Audit Committee, Nomination Committee, and Remuneration Committee.
• All Directors confirmed compliance with the Model Code.

Climate Goals & Targets

Environmental Challenges

• Fluctuating prices of coke and coal.
• Changes in Chinese government policies and regulations (environmental control and reduction of production capacity).
• Safety management risks in hazardous operations.
• Impact of the COVID-19 pandemic.

Mitigation Strategies

• Close monitoring of economic environment and adjustment of production plans.
• Prioritizing environmental protection and upgrading production facilities.
• Stringent safety management policies and control systems.
• Monitoring the latest situation of the Epidemic and adjusting plans accordingly.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Requires suppliers to provide proofs of basic qualifications relating to environmental aspects.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental Protection
• Occupational Health and Safety
• Climate Change

Environmental Achievements

• Reduced greenhouse gas emissions by 52.68% compared to the previous reporting period due to the cease in heating plant and power plant operations.
• Completed rainwater collection pond installation in 2021 to minimize pollution to the sewage system or river.
• Planted 489 trees to offset approximately 11 tonnes of CO2.

Social Achievements

• Provided a safe and accident-free working environment for employees with no work-related injuries or fatalities during the reporting period.
• Provided comprehensive career training to employees, with an average of 20 training hours per employee.
• Offered generous employee welfare benefits including free accommodation, heating, and gym access.

Governance Achievements

• Regularly reviews corporate governance practices in accordance with the Corporate Governance Code.
• Established an ESG task force team to assess and manage ESG-related and climate change issues.
• Maintained an ongoing dialogue with shareholders through general meetings.

Climate Goals & Targets

Environmental Challenges

• Meeting more stringent environmental standards set by the local government.
• Fluctuating prices of coke and coal.
• Liquidity pressure and net current liabilities of approximately HK$226,939,000 as at 31 March 2023.

Mitigation Strategies

• Investment in upgrading environmental protection facilities and ceasing operations of facilities that do not meet government regulations.
• Closely monitoring the market price of coke and coking coal and adopting corresponding measures such as adjustment of production plans and enhancement of cost monitoring.
• Implementing measures to mitigate liquidity pressure and improve cash flow, including negotiations with lenders, full operation of new assets, receivable recovery, fundraising, and seeking other financing channels.

Supply Chain Management

Supplier Audits: 2 suppliers audited

Responsible Procurement

• Requires suppliers to provide proofs of environmental qualifications, prioritizes suppliers with environmental impact reduction measures.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (cyclones, hurricanes, floods) causing supply chain interruption.
• Longer-term climate shifts increasing capital and operating costs.

Transition Risks

• Tightened environmental laws increasing operating costs.
• Higher environmental requirements from clients potentially decreasing revenue.

Opportunities

• Transition to a low-carbon enterprise through the use of cleaner hydrogen energy and efficient technology.

Reporting Standards

Frameworks Used: Appendix 27 of the Listing Rules

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed