SITC International : 2020 Environmental, Social and Governance Report

(Incorporated in the Cayman Islands with limited liability) Stock Code: 1308

2020

Environmental, Social and Governance Report

2020 ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT OF SITC INTERNATIONAL

	About This Report	1
Contents	About SITC	2
	Corporate Governance	5
	Responsible Operation	10
	Energy Conservation and
	Environmental Protection	18
	Harmonious Development	26
	Feature Topics on Anti-pandemic	38
	Outlook	41

About This Report

This report discloses the environmental, social and governance ("ESG") information of SITC under the principles of objectivity, standardization, transparency and comprehensiveness. It is intended to communicate with stakeholders about corporate sustainable development concepts, actions and performance in a full and frank manner, and make a systematic response to sustainable development issues concerned by stakeholders.

Scope of Report

This report covers the period from January 1, 2020 to December 31, 2020. To be more systematic, this report is partially retrospective to previous years, and the reporting boundary has no significant change as compared to that for the financial year ended 31 December 2019.

Unless otherwise specified, all cases and data in this report are derived from the wholly-owned branch companies, subsidiaries and joint ventures under de facto control of SITC.

Basis for Preparation

This report is prepared in compliance with the principles of materiality, quantitative, balance and consistency as set out in the Environmental, Social and Governance Reporting Guide (the "ESG Reporting Guide") contained in Appendix 27 of the Rules Governing the Listing of Securities on Hong Kong Stock Exchange. This report has complied with all mandatory disclosures requirements and "comply or explain" provisions.

All financial data in this report is extracted from the financial reports of SITC. Unless otherwise specified, all amounts stated in this report are denominated in USD.

Commitment of This Report

The board of directors of the Company (the "Board") warrants that the report approved by the Board is free from any false records and misleading statements.

Explanations on Abbreviated Names

For the sake of convenience in expression and reading, "SITC International Holdings Company Limited" is referred to as "SITC" or the "Company" or "we" or "our" in this report.

Access to This Report

This report is released in both Chinese and English versions, which are available on the website of SITC (www.sitc.com) and the website of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange") (www.hkexnews.hk).

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 1

About SITC

SITC is an Asia's leading shipping logistics company that provides integrated transportation and logistics solutions. As at 31 December 2020, we ranked the 18th among international container shipping companies in terms of shipping capacity. We focus exclusively on servicing the Asia trade market, which is the largest in the world and one of the fastest growing market in terms of shipping volume, according to Drewry Maritime Services (Asia) Pte Ltd, an independent industry consultant.

The following map illustrates the Asia container shipping routes (including trade lanes operated through joint services and container slot exchange arrangements) and shipping logistics service network of the Group as of 31 December 2020:

				Qinhuangdao
				Tianjin	Dalian					JAPAN
						Incheon
					Yantai			Sendai
						Seoul
			Weifang	Weihai		Ulsan			Tokyo
				Pyeongtaek
				Qingdao	ShidaoDaesan	SOUTH KOREA		Kawasaki
						Busan	OsakaNagoya
				Rizhao				Kobe		Yokohama
			Lianyungang	KwangyangMoji		Shimizu
						Toyohashi
			Zhangjiagang					Yokkaichi
			Nantong		TokuyamaSakaisenboku
	Chongqing	Nanjing		Hakata	Matsuyama
		Suzhou	Taicang
		Wuhan
	PEOPLE'S REPUBLIC	Kunshan	Shanghai
		Hangzhou Zhapu
	OF CHINA	Nanchang	Jiaxing Ningbo
			Yiwu	Shaoxing
				Wenzhou
	Nanning GuangzhouQuanzhou	Keelung
			Xiamen
			Taipei
		Nansha	Dongguan
		Taichung
	Zhongshan
Chittagong	Qinzhou	Shekou Shenzhen	Kaohsiung
Fangcheng	HONG KONG	TAIWAN
	Hanoi
	Haiphong

THAILAND Danang			THE PHILIPPINES
Chulai	Subic
	Quy Nhon	Manila
Bangkok CAMBODIA	Batangas
Laem Chabang	VIETNAM
Phnom Penh
Sihanoukville				Shipping logistics
Ho Chi Minh		Cebu
	service network
			Cagayan De Oro	Port
			Davao
Penang		Kota Kinabalu	General Santos
Port Kelang Kuantan		Muara
Pasir Gudang	Bintulu
Singapore	Kuching
		Balikpapan
	Semarang	Makassar
Jakarta	Indonesia	Surabaya

Our business can be segregated into two main business segments: container shipping and logistics segment and dry bulk and others segment. Our container shipping and logistics segment principally covers integrated logistics services such as the provision of container transportation, freight forwarding, shipping agency, depot and warehousing, etc. Our dry bulk and others segment principally covers the provision of dry bulk vessel leasing, land leasing and air-freight forwarding services.

2 SITC International Holdings Company Limited

About SITC

		2020	2019	Change
Results
Turnover	US$'000	1,685,167	1,553,718	8.5%
Profit attributable to shareholders of the Company	US$'000	351,624	219,977	59.8%
Basic earnings per share	US cents	13.22	8.29	59.5%
Profit margin	%	21.0	14.3	6.7 pt.
Net cash flows from operating activities	US$'000	501,386	329,673	52.1%
Financial Position
Equity attributable to shareholders of the Company	US$'000	1,184,487	1,010,243	17.2%
Net current assets	US$'000	305,245	122,230	149.7%
Interest bearing bank borrowings	US$'000	428,893	282,012	52.1%
Financial Ratio
Return on equity (note 1)	%	31.9	21.5	10.4 pt.
Return on assets (note 2)	%	18.7	13.4	5.3 pt.
Assets turnover ratio (note 3)	times	0.89	0.94	(0.05)
Gearing ratio (note 4)	%	21	18	3 pt.
Operating Statistics
Number of container vessels operated as at year end	vessels	90	82	8
Container shipping volume - Container shipping and
supporting logistics	TEU	2,614,203	2,483,278	130,925

Note 1

Return on equity is calculated by using the profit for the year and the average balance of total equity as at beginning of year and end of year.

Note 2

Return on assets is calculated by using the profit of the year and the average balance of total assets as at beginning of year and end of year.

Note 3

Assets turnover ratio is calculated by using the turnover and the average balance of total assets as at beginning of year and end of year.

Note 4

Gearing ratio is calculated by using net debt divided by the adjusted capital plus net debt. Net debt includes bank borrowings, lease liabilities, trade and other payables and accruals, less cash and cash equivalents. Adjusted capital includes equity attributable to owners of the parent less the hedging reserve.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT 2020 3