Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced energy consumption and carbon emissions through office electricity control and office supplies consumption management.
• Improved vehicle efficiency and reduced emissions through clear guidelines, continuous recording and monitoring of fuel consumption, and regular review of compliance with automotive emission standards.

Social Achievements

• Implemented a comprehensive performance appraisal plan to reward and recognize outstanding employees.
• Provided opportunities for employee career development and promotion through appropriate training.
• Established a zero-tolerance policy for sexual harassment in the workplace.
• Organized company activities such as sports competitions and expansion activities to enhance employee morale and team building.

Governance Achievements

• Established a remuneration committee, a nomination committee, and an audit committee with specific written responsibilities.
• Provided various continuing education reading materials and professional development training to directors.

Climate Goals & Targets

Environmental Challenges

• The supply contract for "Zhongfu Online/VLT" terminals expired in June 2015, leading to a significant decrease in revenue.
• Impairment loss on lottery terminals due to uncertainty regarding future compensation for providing VLTs after the contract expiration.
• The impact of the nationwide ban on online lottery sales on the new media lottery business.

Mitigation Strategies

• Continued to maintain the provided "Zhongfu Online/VLT" terminals in good operating condition to ensure the normal issuance of the "Zhongfu Online/VLT" lottery type.
• Actively sought to secure continued provision of terminals and services for "Zhongfu Online/VLT", aiming to support its stable, continuous, and rapid development.
• Continued to develop new generation lottery information management systems for Guangdong and Shanghai lotteries, expected to go online in 2017.
• Expanded into the national lottery terminal market, winning bids for lottery terminal procurement projects in several provinces.

Supply Chain Management

Responsible Procurement

• One of the supplier selection criteria is compliance with relevant industry standards and business ethics.

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Implemented measures to reduce energy consumption and improve energy efficiency in offices (e.g., setting appropriate air conditioning temperatures, turning off lights and air conditioning in unoccupied spaces, and promoting the use of energy-efficient appliances).
• Reduced greenhouse gas emissions from 439.37 tCO2e in 2017 to 404.15 tCO2e in 2018.

Social Achievements

• Implemented a comprehensive performance appraisal plan to reward and recognize outstanding employees.
• Provided opportunities for employee career development and promotion through appropriate training and development programs.
• Established a zero-tolerance policy against sexual harassment in the workplace.
• Implemented employee attendance management regulations to ensure fair treatment, promotion, benefits, and retirement for employees.
• Organized company activities such as sports competitions and expansion activities to improve employee morale and team building.

Governance Achievements

• Established a remuneration committee, audit committee, and nomination committee with specific written terms of reference.
• Complied with the Corporate Governance Code (except for certain deviations noted in the report).

Climate Goals & Targets

Environmental Challenges

• Legal disputes with Beijing Zhongcai Online Technology Co., Ltd. regarding unpaid lease payments for VLT terminals.
• Managing the risks associated with controlling contracts for OPCO, a subsidiary involved in new media business activities.

Mitigation Strategies

• Filed a civil lawsuit with the Beijing Higher People's Court to recover unpaid lease payments.
• Implemented a series of measures to mitigate risks associated with controlling contracts, including close monitoring of OPCO's operations and regular reporting to management.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Compliance with industry standards and business ethics by suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Independent third-party verification of greenhouse gas emission data by a testing and inspection center

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced greenhouse gas emissions from 404.15 tCO2e to 343.43 tCO2e
• Reduced general waste from 1.46 tons to 1.25 tons
• Reduced paper waste from 0.63 tons to 0.87 tons
• Implemented energy-saving measures (reducing energy consumption from 360.96 MWh to 270.52 MWh)
• Implemented water-saving measures (reducing water consumption from 492.00 m3 to 741.62 m3)

Social Achievements

• Maintained a collaborative workplace culture free from discrimination
• Implemented performance appraisal management methods and employee code of conduct
• Provided safety training to enhance employee safety awareness
• Implemented training management policy to enhance employee capabilities and skills
• Organized various activities to improve employee morale (e.g., sports competitions and employee outreach activities)

Governance Achievements

• Established ESG working group
• Established clear internal guidelines to prohibit bribery, extortion, fraud, money laundering, and other acts
• Implemented guidelines allowing employees to report suspicious business irregularities

Climate Goals & Targets

Environmental Challenges

• Overall decrease in China's lottery market sales (17.5% decrease)
• Decreased sales of lottery terminal equipment due to policy adjustments
• Financial asset impairment losses (HKD 406.5 million)
• Liquidity challenges (current liabilities exceeding current assets)

Mitigation Strategies

• Negotiated with banks to extend loan facilities
• Negotiated with investors to extend convertible bonds
• Implemented cost control measures for general and administrative expenses
• Awaiting court judgment on payment for continued use of lottery terminals
• Exploring new business opportunities in natural health foods and trading

Supply Chain Management

Responsible Procurement

• Strict procurement system to supervise procurement procedures and control costs
• Fair, open and just procurement practices
• Prohibition of bribery and corruption
• Strict supplier selection system based on business ethics and compliance

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: HKEX ESG Reporting Guide