Central Development : ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2018/19

CONTENTS

4 ABOUT

3 ABOUTTHE GROUPTHE REPORT

5 MESSAGE FROM THE DIRECTORS

GOVERNANCE

6 STRUCTURE AND RISK

MANAGEMENT

COMMUNICATION

7 WITH THE STAKEHOLDERS

8 CREATING A GREEN ENVIRONMENT

CENTRAL DEVELOPMENT HOLDINGS LIMITED

ENVIRONMENTAL, SOCIAL AND

GOVERNANCE REPORT

2018/19

CREATING

12 VALUES FOR STAFF

16 BUSINESSINTEGRITY

18 COMMUNITYCREATION

SUMMARY OF

19 KEY PERFORMANCE

INDICATORS

ENVIRONMENTAL, SOCIAL

21 AND GOVERNANCE (ESG)

REPORTING GUIDE

SOLAR ENERGY

BUSINESS

ABOUT THE GROUP

Central Development Holdings Limited (formerly known as "Zhong Fa Zhan Holdings Limited") (the "Company") and its subsidiaries (collectively "Central Development" or the "Group") are mainly engaged in the solar energy business and jewelry business.

The Group has been actively developing the solar energy business since 2015, and always insists on using intelligent technology to enhance our competitiveness and influence in the market. Our business customers are mainly from Hong Kong and Mainland China, which accounted for 9% and 91% of the overall segment sales during the Reporting Period, respectively. Apart from the patent use right of solar cooling intelligent technology used in CoolStore thermal cooling-stored pipes, the Group further obtained 10 15-year patent use rights during the Year and successfully

expanded its market share and customer base. Central Development will continue to leverage on the patent use rights as well as self-developed intelligent technology to develop the solar energy business and expand its market share.

During the Reporting Period, the Group has acquired Yuyao Land and Factory. The new factory, with a gross floor area of 27,250 square meters, enables us to handle orders more flexibly along with sub-contracting arrangement with contractors. Our offices are located in Yuyao, Hangzhou, Beijing, Taizhou, Nanjing, Hong Kong and the US.

The Group resumed the jewelry business in Hong Kong in 2018 and continued to engage in providing products to jewelry distributors and retailing customers in the PRC, which accounted for 41% and 59% of the overall segment sales during the Reporting Period, respectively. The Group has increased the headcount and quality of the sales force enabling the Group to develop more flexible and effective sales strategies. The Group is also considering to explore further business opportunities and open new sales channels for our products.

jewelry business

3 Central Development Holdings Limited

ABOUT THE REPORT

This report is the third "Environmental, Social and Governance (ESG) Report" published by the Group, which enables every stakeholder to better understand the Group's progress and development in terms of sustainable development by covering the policies, measures and performance of the Group in environmental p r o t e c t i o n , s o c i a l c a r e a n d c o r p o r a t e governance aspects. This report is prepared in both Chinese and English and available at the websites of the Stock Exchange of Hong Kong Limited (the"Stock Exchange") and the Company (http://www.475hk.com).

SCOPE OF THE REPORT

This report presents the ESG performance of the Group for the financial year from 1 April 2018 to 31 March 2019 (the "Reporting Period" or "2018/19"). Same as the report last year, this report focuses on the operation of the solar energy business in the factory located at Yuyao City, Zhejiang Province ("Yuyao Factory") 1 and its office ("Yuyao Office"). This report neither covered the Group's other operation points and operations in other districts nor operations of other businesses other than the solar energy business (i.e. jewelry business). The Group has nevertheless been continuously improving its

internal data collection procedures in a bid to expand the scope of disclosure.

REPORTING STANDARDS

This report is prepared in accordance with the "Environmental, Social and Governance (ESG) Reporting Guide" (the "Guide") set out in the Appendix 27 to the "Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited", and adopts four reporting principles of Materiality, Quantitative, Balance and Consistency as the basis of preparation. In order to make stakeholders fully understand our ESG performance, this report discloses environmental key performance indicators (KPI) in compliance with the "comply or explain" requirements, and also includes certain social KPIs in the "Recommended Disclosures" section of the Guide. A complete index is appended in the last chapter hereof for easy reference.

CONFIRMATION AND APPROVAL

The Group has established procedures for internal control and formal review to make sure all information included in this report is accurate and reliable. This report has been reviewed and approved by the board of directors on October 2019.

FEEDBACK

The Group values the opinions of its stakeholders. If you have any question or recommendation about this report, you are welcome to contact the Group through the following methods: Address: Room 2202, 22/F., Chinachem Century Tower, 178 Gloucester Road, Wanchai, Hong

Kong
Email: [e-mail]
Tel: [phone]	Fax: [phone]

1 Yuyao Factory includes the temporary factory in Yuyao and the factory newly built in Yuyao. The operation of the factory is conducted by Ningbo Shenggu Energy Reservation Technology Co., Ltd.* (寧波升谷節能科技有限公司) ("Ningbo Shenggu") and Yuyao Yiheng Solar Technology Company Limited* (余姚市億恒太陽能科技有限公司), the wholly-owned subsidiaries of the Group.

Environmental, Social and Governance Report 2018/19

4

MESSAGE FROM THE DIRECTORS

The Group is dedicated to striking a balance b e t w e e n s o c i e t y a n d e n v i r o n m e n t i n advancing on the journey of sustainability. For environment, we aims to provide green energy solutions with intelligent technology for the society and create harmonious and livable green cities; for society, we focuses on optimizing the Group's condition of employment and improving staff benefit as well as enhancing their work satisfaction.

The members of board of directors and senior management are responsible for providing strategic guideline for the Group's ESG structure, developing policy and objective on sustainability, supervising matters on corporate governance as well as monitoring its progress, in a bid to ensure the effectiveness of such structure. To address the risks and opportunities in relation to sustainability, the board of directors of the Group is also responsible for maintaining and ensuring the effective implementation of the Group's risk management and internal control system. F u r t h e r m o r e , t h e r e l e v a n t m a n a g e m e n t personnel of the Group are assigned to supervise the implementation of strategies and activities in environmental and social aspects and the scoring of its KPIs. Opinions from stakeholders provide guidance to formulate policies and development directions, which could actively promote our performance on sustainability. The Group engaged an independent consultant firm to conduct management interviews for the purpose of discussing planning strategies and directions on sustainability, and identified emission,

e n v i r o n m e n t a n d u s e o f r e s o u r c e s a n d employment are the key aspects concerned during the Reporting Period.

We proactively manage and monitor the emissions generated from our operation in an attempt to minimize the impact on the environment. For environment and use of resources, the efficiency of use of resources throughout our business operation has been enhanced by developing environmental policy. We value our employees and strive to provide them with an excellent employment environment and listen and respond to their needs. We take corporate social responsibility at these levels and maintain communication with internal and external stakeholders so as to improve our performance.

We wish to collect opinions from different sectors through this report in the early stage of our journey of sustainability and thereby adjusting our strategies and maintaining interactive communication with stakeholders. Readers are encouraged to comment on the report to keep us moving forward.

Wu Hao

Chairman and Executive Director

Hong Kong, October 2019

5 Central Development Holdings Limited

GOVERNANCE STRUCTURE AND RISK MANAGEMENT

T h e b o a r d o f d i r e c t o r s o f t h e G r o u p i s committed to upholding a high standard of corporate governance and believes that sound corporate governance practice can effectively lead the Group to build and achieve its long-term strategies and goals. The board of directors bears the corporate social responsibility of the Group, including guiding the Company to seize the opportunities and respond to the risks brought by sustainability.

The Group has established a risk management and internal control system to identify, assess and manage relevant risks from our business and operation . The board of directors is responsible for assessing and determining the nature and extent of business risks; while the audit committee is responsible for the risk management and internal control system and offering advice and support to the board of directors.

Risk Management Framework

Risk Identication

Risk Analysis

Risk Monitoring

Risk Reporting

Identifying risks

Assessing the

Testing identied

Reporting to

and existing

level of risks

risks regularly

management,

audit committee

controlling

and the board

measures

of directors

During the Reporting Period, the Group has identified the following significant risks:

	Significant Risk		Corresponding Chapter in this Report
Technological Risk
•	Leakage of technical expertise	•	Product responsibility
Human Resources Risk

• Loss of talents with appropriate skills and experience

• Employment management system
• Staff training and appraisal

The Group is aware that the existing risk management and internal control system has not fully covered all aspects of sustainability issues. Looking forward, the Group will consider to establish an ESG committee to incorporate

potential environmental and social issues into its risk system in order to timely identify risks and formulate corresponding contingency proposals.

Environmental, Social and Governance Report 2018/19

6

COMMUNICATION WITH THE STAKEHOLDERS

Opinions from stakeholders are essential to the		Group comprise staffs, shareholders, business
Group's sustainability. The Group places emphasis		partners of supply-chain (i.e. suppliers), customers
on the communication with stakeholders2 to review		and NGOs and local communities. During
potential risks and business opportunities and		the Reporting Period, the Group kept close
identify and assess the materiality of sustainability		communication with the stakeholders through daily
issues and thereby developing corresponding		operation and various channels.
policy and initiative. The key stakeholders of the
	Key Stakeholders Engagement Activities
Staff		Shareholder
•	Organizing staff activities regularly	•	Reporting the Group's operation to
•	Carrying out performance appraisal and		shareholders by general meeting, annual
	making recommendation on work for staffs		report and financial statement

• Establishing whistleblowing procedure and encouraging staffs to report any internal misbehaviour

Business Partner of Supply-chain (i.e. suppliers)	Customer
•	S e t t i n g u p " P r o c u r e m e n t P o l i c y o f	•	Formulating procedure for customer
	Sustainable Development" to encourage		communication
	suppliers to improve its performance on
	environmental and social responsibility

NGO and Local Community

• Communicating with stakeholders in community and serving and giving back the community

SUBSTANTIVE ENVIRONMENTAL AND SOCIAL ISSUES

During the Reporting Period, the Group continued to engaged independent consultant in assisting the preparation of the "ESG Report", during which, the consultant assisted the Group's management to review the ESG issues to the Guide of the Stock Exchange, and identify substantive issues based on the materiality to

stakeholders and the Group's impact on the society and environment. According to the review result, the management considers the substantive issues of the Group during the Reporting Period are maintained as follows:

Use of	Employment
resources

Emissions

2 "Stakeholders", also known as "interested parties" or "privileged parties", refer to groups and individuals who have significant impacts or are affected by the business of an enterprise, including the internal board of the directors, management, executives and general staff, as well as external shareholders, business partners, customers, government and regulatory authorities, banks, investors and community organisations, etc..

7 Central Development Holdings Limited

CREATING A GREEN ENVIRONMENT

Environmental sustainability is one of the Group's key concerns in its fulfilment of corporate social responsibility. The Group's "Environmental Policy" summarized the requirements on emission management, use of resources and protection of environment and natural resources. The Group intends to minimize the negative impact on environment from its business operation and production p r o c e s s b y a d v o c a t i n g e n v i r o n m e n t a l l y responsible business practices.

EXHAUST GAS EMISSIONS

Exhaust gas generated from our Yuyao Factory and Yuyao Office comprise nitrogen oxides, sulphur oxides and respirable suspended

particulates from emission from fossil fuel combustion by vehicles and kitchen equipment of our canteen . Nitrogen oxides, sulphur oxides and respirable suspended particulates from emission from fossil fuel combustion by our canteen accounted for 85%, 66% and 77% of total air pollutant emissions. Due to the larger size of Yuyao Factory used in 2018/19 as compared to that of the temporary factory used in 2017/18 and the significant increase in production and sales, coupled with the incorporation of consumption of fossil fuel by canteen in the emission calculation in 2018/19, the air pollutant emissions during the Reporting Period increased in a larger extent as compared with 2017/18.

Exhaust Gas Emissions

Air Pollutant	Emission in 2018/19	Emission in 2017/183	Unit
Nitrogen oxides	8.6	1.0	Kg
Sulphur oxides	1.2	0.3	Kg
Respirable suspended	0.5	0.1	Kg
particulates

GREENHOUSE GAS EMISSIONS

The Group pays close attention to its own carbon footprint, and dedicated to minimising the impact of its operation on the environment. The Group has commissioned an external p r o f e s s i o n a l c o n s u l t a n t t o a s s e s s o u r greenhouse gas emissions. The quantification process of greenhouse gas was conducted by reference to the guidelines issued by the National Development and Reform Commission of the PRC4, as well as international standards such as ISO14064-1 and the Greenhouse Gas Protocol.

During the Reporting Period, carbon emission generated by our Yuyao Factory and Yuyao Office was approximately 39 tonnes CO2e in total, representing an increase of 7% as compared to that of 2017/18, in which greenhouse gas emission from use of electricity and fuel used by vehicles contributed 50% and 32% of total emission, respectively. During the Reporting Period, the fossil fuel consumed by kitchen equipment of our canteen was changed from liquefied natural gas to liquefied petroleum gas (LPG) and the consumption of

3

4

The emission calculation in 2017/18 only includes emission from fossil fuel used by vehicles.

Guidelines for Calculation Methods and Reporting of Greenhouse Gas Emissions from Industrial and other Industries Enterprises (Trial) 《( 工業其他行業企業溫室氣體排放核算方法與報告指南（試行）》)

Environmental, Social and Governance Report 2018/19

8

CREATING A GREEN ENVIRONMENT

LPG grew, together with the slight increase in fuel consumption by vehicles and electricity consumption as compared to that of 2017/18, the greenhouse gas emission was therefore i n c r e a s e d . T h e G r o u p w i l l c o n t i n u e t o explore ways for saving energy and reducing greenhouse gas emission.

Although the emission of greenhouse gases of the Group in 2018/19 increased slightly as compared with 2017/18, the Group's turnover was significantly improved as compared to that of 2017/18 since a majority of products produced in 2017/18 were sold in 2018/19, thus the greenhouse gas intensity (calculated by turnover) was dramatically reduced as compared to that of last reporting period.

Greenhouse Gas Emissions

Scope	2018/19	2017/185	Unit
Scope 1: Direct greenhouse gas	19.4	14.7	Tonnes of CO2e
emissions
Scope 2: Indirect greenhouse gas	19.6	21.8	Tonnes of CO2e
emission from energy
Greenhouse gas emissions in total	39.0	36.5	Tonnes of CO2e
Greenhouse gas intensity (calculated	0.004	91.185	Tonnes of CO2e/
by turnover)			turnover (RMB million)

Scope 1 Direct greenhouse gas emissions include greenhouse gas emissions from fossil fuel used by kitchen equipment of Yuyao Factory and vehicles.

Scope 2 Indirect greenhouse gas emission from energy include greenhouse gas emissions from electricity consumed in Yuyao Factory and Yuyao Office.

To reduce air pollutant and greenhouse gas emissions, the Group streamlined its workflows and cut down business trip as well as purchased vehicles that meet emission standards. The Group will make ongoing assessment and record, and disclose its data on greenhouse gas emissions on an annual basis. Based on the strategic adjustment of business, the Group will also take the data for this reporting year as a benchmark to provide a comparison for that of the subsequent years. Such comparison will become the basis for developing carbon reduction objectives, initiatives and priority in the future.

DISCHARGE OF HAZARDOUS AND NON-HAZARDOUS WASTES

During the Reporting Period, the Group did not generate any hazardous wastes. As to non- hazardous wastes, a total of 8.72 tons wastes have been generated, of which 8.2 tons were discarded scraps, which were delivered to the recycling station set up by qualified companies for recycling, and the remaining 0.52 tons were domestic wastes, which were collected and disposed by cleansing companies.

DISCHARGE OF SEWAGE

Used water and polluted water discharged by the Group are mainly from the production of solar energy products and domestic sewage. All of the production and domestic sewage are processed by the Sewage Treatment Plants via local pipe network.

5 The intensity unit used in the calculation in the 2017/18 ESG Report was turnover in thousands of Renminbi.

9 Central Development Holdings Limited

CREATING A GREEN ENVIRONMENT

USE OF RESOURCES

The "Environmental Policy" formulated by the Group underlines energy conservation and consumption reduction are the basic policy of the Group . All employees must follow the established measures, including the procurement of energy efficient products and services, and are responsible for the overall energy efficiency of the Group. The Group mainly involves in energy consumption (i . e . LPG, gasoline, electricity etc . ) and

resource consumption (i.e. water resources and packaging materials etc.). The packaging materials used by the product from Yuyao Factory (such as solar energy collector, thermal solar cooling and heating collector) are mainly transformed from wooden boxes for packaging raw materials, where a total of 0.51 tons of wooden boxes are consumed. All of the water consumption of the Group in Yuyao Factory and Yuyao Office is from municipal water.

Use of Resources

Use of Energy	Energy Consumption	Unit
2018/19	2017/18 5,6
Direct Energy
LPG	49.1	32.5	MWh equivalent
Gasoline	32.8	38.0	MWh equivalent
Indirect Energy
Purchased Electricity	32.1	31.0	MWh
Total Energy Consumption	114.0	101.5	MWh equivalent
Energy Intensity	0.011	253.782	MWh equivalent/RMB million
(calculated by turnover)
Use of Water	Water Consumption	Unit
2018/19	2017/18
Total Water Consumption	210	111	m3
Intensity of Water Consumption	0.021	0.278	m3/RMB million
(calculated by turnover)
Use of Material	Consumption	Unit
2018/19	2017/18
Packaging Materials	0.51	No data	Tonnes
obtained

The Group adopted the principles of reduction the usage, re-usage and recycle to improve the efficiency of the use of resources in the

operation, and continue to urge employees to follow conservative measures in energy, water and paper.

6 The data unit was changed from GJ to MWh in 2017/18.

Environmental, Social and Governance Report 2018/19

10

CREATING A GREEN ENVIRONMENT

Category

Measures in relation to use of energy (extract)

EnergyComputer

• Adjusting the settings of computers and enabling the Standby or
  Sleep mode. The monitors will switch off automatically or enter power saving mode when idle for a long period of time
• Adjusting monitors to appropriate lightness
• Turning off computers during non-working hours

Air-conditioning

• Turning off air-conditioners during lunch time and non-working hours
• Setting the temperature of air-conditioners between 24°C to 26°C
• Repairing timely to ensure efficient operation of air-conditioners

Lighting

• Zoning into different areas to control separate lighting systems flexibly
• Installing motion detectors or light sensors in office rooms, conference rooms, pantries and washrooms, etc., to control the turning on and off of lighting

Use of water	•	Regular inspection of water leakages from water pipes and faucets
		and repair timely
	•	Using faucets with grade 1 water efficiency label
Paper	•	Using recycled paper or paper produced from sustainable
		resources
	•	Pre-set the printers and photocopiers to two-sided printing mode
	•	Using electronic communication and electronic archival

E N V I R O N M E N T A N D N A T U R A L RESOURCES

In addition to the emission of greenhouse g a s e s , w a s t e s a n d u s e o f r e s o u r c e s a s discussed above, the Group has included the consideration of environmental protection in its commercial decisions, so as to further r e d u c e t h e e f f e c t s t o t h e e n v i r o n m e n t and natural resources. During the design, development and construction of the Yuyao Factory, the Group has considered to enhance the protection of ecological systems, wild animals and natural habitats, as well as adopting measures in relation to soil and water conservation and vegetation restoration.

With regards to internal staff education, the Group promotes environmental information to employees through producing internal environmental protection guidelines and internal communications, so as to encourage our employees to protect the environment.

The Group adheres to the laws and regulations applicable to the management of emissions and environmental pollution, such as the Environmental Protection Law of the People's Republic of China. During the current reporting period, there are no non-compliance cases in relation to emissions or environment discovered in the Group's Yuyao Factory and Yuyao Office.

11 Central Development Holdings Limited

CREATING VALUES FOR STAFF

The employees are the foundations for the Group to provide quality products and services and the key of our business success. The Group is committed to building a good working environment, thus our employees can receive fair treatment and respect. The Group has set up a number of policies and measures at the same time, so as to protect the rights, health and safety of the employees. Also, diversified trainings and promotion opportunities will be provided to support the development of our employees.

E M P L O Y M E N T M A N A G E M E N T SYSTEM

N i n g b o S h e n g g u s e t s o u t e m p l o y m e n t terms such as wage, dismissal, recruitment, promotion, working hours and holidays in the Staff Handbook and Procedures of Leave and Attendance, so as to enable our employees to clearly understand their own rights and responsibilities.

Recruitment Process		Principal employment policies and measures
Recruitment	•	Recruit based on the principles of equality between men and
		women as well as ethnicity. Discrimination is prohibited during the
		process
	•	Placing job advertisements with identical selection criteria and
		neutral language
	•	The employment of child labour and forced labour is forbidden. To
		prevent employment by mistake, the human resource department
		should verify the biographical details and certified documents of
		candidates, and collect copies for record
	•	Build up a diversified employee talent pool to provide fair
		opportunity for employees of different backgrounds
Working hours and	•	Specify the requirements and arrangements of working hours and
holidays		holidays, so as to ensure every employees can have enough rest
	•	Negotiate with the employees about overtime issues
	•	Compensatory time off will be arranged or overtime pay will be
		arranged for employees who work overtime on rest days, so as to
		ensure the labour freedom of our employees
	•	Other than statutory holidays stipulated by the national law,
		employees are entitled to have marriage leave, maternity leave
		and bereavement leave

Environmental, Social and Governance Report 2018/19

12

CREATING VALUES FOR STAFF

Recruitment Process		Principal employment policies and measures
Remuneration and	•	The wages of employees will be adjusted according to the
benefits		Group's operational status, the individual working performance of
		employees and the change in social price index
	•	Implemented a reward and penalty system to reward employees
		with good performance by one-off reward, promotion or salary
		increment
Termination	•	The Group respects the rights of employees and confirms
		the employment relationship with employees as well as the
		employment terms in relation to termination and dismissal by
		signing labour contracts

COMMUNICATION WITH EMPLOYEES

T h e G r o u p h i g h l y v a l u e s t h e o p i n i o n s from employees and devotes to providing effective communication channels for our employees. Ningbo Shenggu has formulated the procedures for employee complaints. E m p l o y e e s c a n m a k e c o m p l a i n t s a b o u t any penalty results to the human resources department in writing. The human resources department will investigate the case and organise meetings to discuss the issue, while the senior management will decide the final results.

The Group adheres to applicable laws and regulations such as the Labour Law of the People's Republic of China, the Labour Contract Law of the People's Republic of China, the Social Insurance Law of the People's Republic

of China, the Interim Measures Concerning the Administration of the Registration of Social Insurance and the Special Protection Regulations for Juvenile Employees. During the current reporting period, no non-compliance cases in relation to employment, child labour and forced labour were discovered in the Group's Yuyao Factory and Yuyao Office.

HEALTH AND SAFETY

The Group highly values the physical and mental well - being of our employees and commits to establishing a safe and healthy working environment for all employees. Ningbo Shenggu has established the General Rules for Safety Production to regulate various safety measures. Our employees shall comply with the security responsibility system and regulations, so as to avoid dangerous works.

13 Central Development Holdings Limited

CREATING VALUES FOR STAFF

Major safety measures

• Employees are required to attend the Three‐tier Safety Education and technical training before performing their duties
• Provide labour protection articles such as hardhat, overalls and working shoes to our employees
• Employees working high above the ground should wear safety belt. Operating with gloves and approaching mechanical rotating parts in operation are forbidden
• Operators of other positions are forbidden to switch on machineries and electronic devices without authorization. Unrelated persons should not enter working areas
• Workers engaged with the operation of special devices (such as electricians and employees who engage in forklift trucks, lifts or hosts, metal welding, vehicle driving or working in heights) must obtain relevant licenses
• All relevant works involving fires should obtain prior approval before carrying out. A ten meters distance between any inflammable item and fire is also required

The Company has complied with laws and regulations that are applicable to working h e a l t h a n d s a f e t y i n c l u d i n g P r o d u c t i o n Safety Law, Production Safety Regulation of Zhejiang Province, Prevention and Control of Occupational Diseases Law and Work-Related Injury Insurance Regulation. During the current reporting period, no non-compliance of the relevant laws or regulations concerning work- related injury or death, nor cases of safety and health has been identified at the Yuyao Factory and Yuyao Office.

STAFF TRAINING AND ASSESSMENT

T h e g r o w t h o f a n e n t e r p r i s e a n d t h e development of its employees complements one another. Ningbo Shenggu has formulated and implemented a Training Management R e g u l a t i o n t o s p e c i f y t h e m a n a g e m e n t of trainings . Ningbo Shenggu formulates training policies and principles based on business development and the improvement of organsational effectiveness and after consideration of prospective and systematic factors. The human resources department is responsible for formulating the annual training programs, assessing the implementation of trainings as well as tracking the results of assessments and trainings.

Environmental, Social and Governance Report 2018/19

14

CREATING VALUES FOR STAFF

Training systems

				External trainings
	Internal trainings
		Practical trainings	Trainings for senior	Trainings for self-
			management	learning
•	Various aspects	•	Expertise and	• Corporate	• Trainings in
	from office skills		knowledge	strategies	relation to MBA
	and management	•	Sales techniques		and professional
•	Other knowledge	•	Management		certification
	and information		methods
	that are of interest	•	Leadership skills
	to employees	•	Operating
			philosophy

Ningbo Shenggu will analyse the needs for trainings regularly, so as to understand the needs for trainings of employees. By analysing the demands of employees, the requirements of market competition, annual operating targets and the assessment of employees' performances, it is conducive for the Group to have a clear direction for improvement in designing the contents and formats of future trainings.

15 Central Development Holdings Limited

BUSINESS INTEGRITY

The Group devotes to operate in a responsible and honest manner. The Group has set policies in relation to product responsibilities and supply chain to improve the performances of the supply chain and value chain while ensuring the compliance and safety of our products and services, so as to fulfil our customers' expectations on the sustainable development of the Group.

SUPPLY CHAIN MANAGEMENT

The Group pays attention to the environmental and social performances of our suppliers and minimises the effects to society through continuous and close cooperation with suppliers. When choosing suppliers, the Group endeavours to treat environmental and social performance as one of the assessment standards.

Environmental

protection

Safety of		Responsible
product
	purchases
components
	Assessment
	standards of
	suppliers	Labour
Anti-corruption		welfares,
and		rights and equal
anti-bribery		opportunities
	Protection
	of third-party
	intellectual
	rights

The Group has set up sustainable procurement policies in its Environment Policy, so as to ensure each part of the supply chain can achieve sustainable purchases. The Group selects corporation partners, suppliers and subcontractors based on the environmental standards and principles. Relevant standards and principles will be adjusted regularly based on best market practices, thereby providing clear guidelines and introductions for suppliers to provide suitable environmental-friendly products.

QUALITY MANAGEMENT

The Group highly values the quality of products. If our products fail to meet the requirements of safety, quality and laws, the Group will take corresponding remedial measures, including product returns, recall or recovery. The Group highly values the opinions from our customers, so as to perfect our products and meet the demands of customers, and improve the quality of our products and services continuously.

Environmental, Social and Governance Report 2018/19

16

BUSINESS INTEGRITY

RESPONSIBLE MARKETING

The Group understands the responsibilities in relation to advertisements and product labels. No false statements related to product labels and descriptions are allowed. The Group will make sure that fair, accurate, honest, justified and appropriate information is provided to customers on various marketing channels. During the current reporting period, the Group did not have any non-compliance cases regarding advertisements and labels, and no complaints in connection with advertisements and product labels were received.

CUSTOMERS' INFORMATION

The Group is committed to protecting the safety of customers' information. The Group requires that the personal information collected by the Group at any format or via any platforms will only be used for purposes acknowledged

and agreed by customers. The Company has taken precautionary measures to prevent any unauthorised or accidental access, handling, deletion, loss or usage.

ANTI-CORRUPTION

The Group is committed to promoting a corporate culture with honesty and integrity and specifies in detail the anti-corruption policies and procedures in the Staff Handbook. The Anti-corruption Policies are also implemented to maintain and promote compliance culture and professional ethics. Employees shall not exploit his/her position and powers to conduct misbehaviours like corruption, bribe extortion and bribe acceptance. In order to encourage our employees to monitor the integrity works of the Group, the Group has implemented the Employee Complaints and Whistleblowing Management System.

Step	Actions
Receiving Cases	• Employees may report an offence to his/her direct supervisor in the
	department or the chief executive

• Customers and suppliers may report an offence to the chief

	executive or the chairman of the audit committee
	• The personal information of whistleblowers will be kept confidential
Investigation	• Engage investigators according to the nature of complaints and severity
	• The committee comprising senior executives such as the Company
	Secretary, Chief Internal Auditor or Human Resources Director is
	responsible for reviewing the investigation report
Final Report	• After the completion of investigation, the employees raising the cases
	will receive a written report on the outcome of the investigation
	• Appropriate action against the wrongdoer will be implemented
	• Remedial measures will be taken to avoid reoccurrence of problems

The Group has complied with applicable laws and regulations such as PRC Regulation Punishment the Corruption. During the current reporting period, no case of complaints has

been received and no non- compliance in relation to the bribery, extortion, frauds, money laundering has been identified by the Group at Yuyao Factory and Yuyao office.

17 Central Development Holdings Limited

COMMUNITY CREATION

Being a responsible enterprise, the Group deeply understands the close connection b e t w e e n i t s o p e r a t i o n s a n d c o m m u n i t y development and commits to contributing to the community where our business locates actively, which includes making investments, engaging with local people and promoting community development.

The Group has implemented the Community Investment, Sponsorship and Donation Policies, so as to establish the structures and standards of community investments. The management is responsible for reviewing the targets and directions of policies and investments, as well as looking closely at the social performances of the Group . The Group treats "climate change and environment", "youth education and development", "community health" and "cultural arts" as the core sectors of our community investments. The Group has set up guiding principles and support projects and plans that meet community needs and expectations, and those which are consistent with local culture, traditions and values.

Environmental, Social and Governance Report 2018/19

18

SUMMARY OF KEY PERFORMANCE INDICATORS

ENVIRONMENTAL PERFORMANCE

Environmental	Year 2018/19	Year 2017/187,8	Unit
Key Performance Indicator
Types of Emissions and Relevant Emission Data
Nitrogen Oxides	8.6	1.0	Kg
Sulphur Oxides	1.2	0.3	Kg
Respirable Suspended Particulates	0.5	0.1	Kg
Greenhouse Gas Emissions in Total and Intensity
Scope 1	19.4	14.7	tCO2-e
Scope 2	19.6	21.8	tCO2-e
Total greenhouse gas emissions	39.0	36.5	tCO2-e
Intensity of greenhouse gas	0.004	91.185	tCO2-e/RMB Million
(calculated by turnover)
Total Hazardous Wastes Produced
Total generation of hazardous	Not applicable	Not applicable
waste produced
Total Non-hazardous Wastes Produced and Intensity (if Applicable)
Total non-hazardous wastes produced	8.72	4.07	Tonnes
Intensity of non-hazardous wastes	0.001	0.010	Tonnes/RMB Million
(calculated by turnover)
Total Energy Consumption
Direct energy	81.9	70.5	MWh-e
Indirect energy	32.1	31.0	MWh
Total consumption of energy	114.0	101.5	MWh-e
Energy density (calculated by turnover)	0.011	253.782	MWh-e/RMB Million
Total Water Consumption
Total water consumption	210	111	Cubic metres
Water consumption intensity (calculated	0.021	0.278	Cubic metres/
by turnover)	RMB Million
Total Packaging Material Used for Finished Products and Intensity
Total packaging material used	0.51	No data available	Tonnes
Intensity of packaging material used	0.0001	Not applicable	Tonnes/RMB Million
(calculated by turnover)

7

8

The unit of intensity used for calculation in the 2017/18 Environmental, Social and Governance Report was per thousand RMB turnover.

The calculation of emission data for 2017/18 only included the emission of fossil fuel from vehicles.

19 Central Development Holdings Limited

SUMMARY OF KEY PERFORMANCE INDICATORS

SOCIAL PERFORMANCE

Total number

Proportion

Employee composition

of male and

of staff

female staff

Gender

Male

11

Female

2

Number

Senior management

1

Function

Middle management

4

of staff

General staff

8

13

6:1

Below 30

3

Age

30 to 40

5

41 to 50

4

Over 50

1

Percentage of

Gender

Below 30

30 to 40

41 to 50

Over 50

Total

rate of new hires

number of

Male

0%

0%

25%

0%

new hires

8%

Female

0%

0%

Not applicable

Not applicable

Percentage of

Gender

Below 30

30 to 40

41 to 50

Over 50

Total turnover rate

number of

Male

0%

0%

50%

100%

employee

23%

Female

0%

0%

Not applicable

Not applicable

turnover

Lost working

Rate of

Number of

Number of

work-related

days due to

Health and

Gender

work-related

work-related

injuries

work-related

fatalities

injuries

(per thousand

safety of

injuries

employees)

employees

Male

0

0

0

0%

Female

0

0

0

Percentage

Grading

Male

Female

Percentage of total staff

attending trainings

of staff

Senior management

0%

Not applicable

attending

Middle management

100%

Not applicable

92%

trainings

General staff

100%

100%

Grading

Male (hour)

Female (hour)

Overall average training

Average

hours (hour)

Senior management

0

Not applicable

training

hours

Middle management

4

Not applicable

3.7

General staff

4

4

Environmental, Social and Governance Report 2018/19

20

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORTING GUIDE

Material

Aspect

ContentPage number

1. Environmental A1 Emissions

General	Information on:
Disclosure	(a) the policies; and
	(b) compliance with relevant laws and regulations that have a significant	8-9, 11
	impact on the issuer
	relating to air and greenhouse gas emissions, discharges into water and
	land, and generation of hazardous and non-hazardous waste.
A1.1	The types of emissions and respective emissions data.	8, 19
A1.2	Greenhouse gas emissions in total (in tonnes) and (if applicable)	9, 19
	intensity (e.g. per unit of production volume, per facility).
A1.3	Total hazardous waste produced (in tonnes) and (if applicable) intensity	9, 19
	(e.g. per unit of production volume, per facility).
A1.4	Total non-hazardous waste produced (in tonnes) and (if applicable)	9, 19
	intensity (e.g. per unit of production volume, per facility).
A1.5	Description of measures to mitigate emissions and results achieved.	8-9
A1.6	Description of how hazardous and non-hazardous wastes are handled,	9, 11
	reduction initiatives and results achieved
A2 Use of Resources
General	Policies on the efficient use of resources (including energy, water and	8-11
Disclosure	other raw materials).
A2.1	Total consumption (in kWh in '000s) of direct and/or indirect energy
	(e.g. electricity, air or oil) consumption by type and intensity (e.g. per	10, 19
	unit of production volume, per facility).
A2.2	Water consumption in total and intensity (e.g. per unit of production	10,19
	volume, per facility).
A2.3	Description of energy use efficiency initiatives and results Achieved.	10, 11
A2.4	Description of whether there is any issue in sourcing water that is fit for	11; no issue
	purpose, water efficiency initiatives and results achieved	in sourcing
		appropriate
		water in the
		course of the
		operation of
		Yuyao Factory
		and Yuyao
		Office
A2.5	Total packaging material used for finished products (in tonnes) and (if	10, 19
	applicable), with reference to per unit produced

21 Central Development Holdings Limited

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORTING GUIDE

Material

Aspect

ContentPage number

A3 Environment and Natural Resources

General	Policies on minimising the issuer's significant impact on the	11
Disclosure	environment and natural resources.
A3.1	Descriptions of activities which have significant impacts on the
	environment and natural resources and the actions taken to manage	11
	them.

B. Social

B1 Employment

General	Information on:
Disclosure	(a) the policies; and
	(b) compliance with relevant laws and regulations that have a significant
	impact on the issuer	12-13
	relating to compensation and dismissal, recruitment and promotion,
	working hours, rest periods, equal opportunity, diversity, anti-
	discrimination, and other benefits and welfare.
B1.1	Total workforce by gender, employment type, age group and	20
	geographical region.
B1.2	Employee turnover rate by gender, age group and geographical	20
	region.

B2 Health and Safety

General	Information on:
Disclosure	(a) the policies; and
	(b) compliance with relevant laws and regulations that have a significant	13-14
	impact on the issuer
	relating to providing a safe working environment and protecting
	employees from occupational hazards.
B2.1	Number and rate of work-related fatalities.	20
B2.2	Lost days due to work injury.	20
B2.3	Description of occupational health and safety measures adopted, how	13-14
	they are implemented and monitored
B3 Development and Training
General	Policies on improving employees' knowledge and skills for discharging	14-15
Disclosure	duties at work. Description of training activities.
B3.1	The percentage of employees trained by gender and employee	20
	category
B3.2	The average training hours completed per employee by gender and	20
	employee category

Environmental, Social and Governance Report 2018/19

22

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORTING GUIDE

Material

Aspect

ContentPage number

B4 Labour Standards

General	Information on:
Disclosure	(a) the policies; and
	(b) compliance with relevant laws and regulations that have a significant	12-13
	impact on the issuer
	relating to preventing child and forced labour.
B4.1	Description of measures to review employment practices to avoid child	12-13
	and forced labour.
B5 Supply Chain Management
General	Policies on managing environmental and social risks of the supply chain.	16
Disclosure
B6 Product Responsibility
General	Information on:
Disclosure	(a) the policies; and
	(b) compliance with relevant laws and regulations that have a significant
	impact on the issuer	16-17
	relating to health and safety, advertising, labelling and privacy
	matters relating to products and services provided and methods of
	redress.
B6.2	Number of products and service related complaints received and how	17
	they are dealt with.
B7 Anti-corruption
General	Information on:
Disclosure	(a) the policies; and
	(b) compliance with relevant laws and regulations that have a significant	17
	impact on the issuer
	relating to anti-bribery, extortion, fraud and money laundering.
B7.1	Number of concluded legal cases regarding corrupt practices brought
	against the issuer or its employees during the reporting period and the	17
	outcomes of the cases.
B7.2	Description of preventive measures and whistle-blowing procedures,	17
	and how they are implemented and monitored.
B8 Community Investment
General	Policies on community engagement to understand the needs of the
Disclosure	communities where the issuer operates and to ensure its activities take	18
	into consideration the communities' interests.

23 Central Development Holdings Limited