Wanjia : Environmental, Social and Governance Report 2019/20

WANJIA GROUP

萬嘉集團

(Incorporated in the Cayman Islands with Limited Liability) (於開曼群島註冊成立的有限公司)

Stock Code 股份代號 : 401

Environmental, Social & Governance Report

Contents
Introduction ...........................................................................................................................	2
Reporting Scope ...................................................................................................................	2
Valuable Feedback................................................................................................................	2
Stakeholder Communication .................................................................................................	3
Materiality Assessment .........................................................................................................	4
Environment Protection .........................................................................................................	5
Greenhouse Gas Emissions .......................................................................................	5
Air Emissions ............................................................................................................	7
Waste Management...................................................................................................	7
Water Consumption ...................................................................................................	8
Packaging Materials...................................................................................................	8
Summary ..................................................................................................................	9
Caring for Employees..........................................................................................................	10
Remuneration .........................................................................................................	10
Distribution Ratio of Employees ................................................................................	11
Occupational Health and Safety ................................................................................	12
Development and Training ..................................................................................................	13
Retirement Benefits .........................................................................................................	14
Labour Standards ............................................................................................................	14
Operating Practices.............................................................................................................	15
Supplier Management......................................................................................................	15
Product Responsibility .....................................................................................................	16
Product Quality ................................................................................................................	16
After-Sale Service and Complaint Management...............................................................	17
Customer Privacy ............................................................................................................	17
Anti-Corruption.................................................................................................................	18
Community Participation .....................................................................................................	19

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Introduction

Wanjia Group Holdings Limited (the "Company") and its subsidiaries (collectively referred as the "Group") focus on the operation of pharmaceutical wholesale and distribution business, and hemodialysis treatment and consultancy service business in the People's Republic of China (the "PRC"). The Group has been upholding the operation philosophy of "honesty and morality go first", adhering to the operation objective of "benefiting the society and the people" and pursuing the mission of providing healthy products and services.

The Group understands the importance of delivering sustainable growth in our operations. Delivery of medical service, which is one of the key business areas of the Group, has a significant impact on the wellbeing of citizens in areas which we operate in. The Group is continuing its strategies on environment, social and corporate governance (the "ESG") and is committed to integrate the ESG into the management. The Group is pleased to publish its Environmental, Social and Governance Report 2019/2020 (the "Report") to allow stakeholders to understand the corporate social responsibilities performed by the Group.

Reporting Scope

The Report is prepared in accordance with the "comply or explain" provisions of the Environment, Social and Governance Reporting Guide set out in Appendix 27 by The Hong Kong Stock Exchange. The Report covers the ESG measures of the pharmaceutical wholesale and distribution and hemodialysis treatment businesses of the Company from 1 April 2019 to 31 March 2020 (the "Reporting Period").

Valuable Feedback

Stakeholders' valuable feedback can help the Group make ongoing improvements regarding our performance in environmental, social and governance aspects. We welcome any suggestion to the contents of the report, as well as our sustainability strategies.

Address: Suite 1801, 18/F, Tower 1, The Gateway, Harbour City, 25 Canton Road, Hong Kong

Email: [e-mail] Website: www.wanjia-gp.com2

Stakeholder Communication

The Group understands individual stakeholders may have different expectations and requirements towards the Group. Our goal is to maintain a good balance between our business development and meeting requirements of stakeholders where feasible.

The Group maintains regular engagements with stakeholders through various channels. We communicate with internal and external stakeholders in effort to maintain two-way communication with respect to environment, social and governance topics. Stakeholder communications is achieved through various engagement activities, as summarized below:

Stakeholders

Expectations and Concerns

Engagement Channels

Customers



Quality and safety of



After sales services



products and services



Customer feedback forms,

Customer rights

hotline and email

protection

Employees



Staff salary and benefits



Training



Health and safety of



Performance Review and

working environment

Interviews



Training and career



Internal announcements and

development

publications



Suggestion Box

Suppliers



Fair procurement



Site visit



process

Timely payment for

supplied goods /

services

Shareholders



Corporate governance



Annual General Meeting



Business compliance



Annual and Interim Reports



Return on investment



Press Releases and

Announcements



Company website

Government and



Compliance with laws



Supervision on compliance

Regulatory



and regulations



with local laws and regulations

Sustainable

Routine reports

Authorities

development

Community



Community involvement



Community activities



Environmental protection



Subsidies and Charitable

awareness

donations

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Materiality Assessment

A materiality assessment was performed to identify and evaluate the concerns and interests of the Group's internal and external stakeholders, including customers, investors, employees, suppliers and the government. The findings of the assessment are presented in a materiality matrix, as shown below:

Legend

E1

Air Emission Management

O1

Anti-competitive

S1

Anti-discrimination

behaviour management

E2

Energy Management

O2

Company profitability

S2

Community Relations

E3

Environmental Compliance

O3

Customer Satisfaction

S3

Diversity and Equal

Opportunity

Expenses on

Data Security and

Employee

E4

O4

Customer Privacy

S4

Environmental Protection

communication

Management

Greenhouse Gases

Innovation and

Occupational Safety and

E5

O5

Intellectual Property

S5

Management

Health

Rights

E6

Waste Management

O6

Product Health and

S6

Social and Economic

Safety

Compliance

O7

Product Quality

S7

Talent Management

Management

E7

Wastewater Management

O8

Supplier Management

S8

Training and

Development

4

Environment Protection

The Group actively drives towards our goal of achieving corporate sustainability, taking into consideration both business development as well as the possible impacts on the environment. Although pharmaceutical wholesale and distribution business, and hemodialysis treatment businesses of the Group have lower impact on the environment compared to those from manufacturing industries, nevertheless we put in great efforts to minimize environmental impacts arising from our operations. We understand that environmental protection cannot be achieved with the effort of the Group alone and requires cooperation and participation from all our staff and other parties such as our business partners. Environmental protection is one of the key aspects covered in the induction training provided to new employees to facilitate the implementation of environmental protection measures.

Greenhouse Gas Emissions

The Group recognizes that greenhouse gas emissions is an important metric for environmental performance, hence it is one of our long-term goals to reduce the amount of greenhouse gas emissions associated with our operations. Our greenhouse gas emissions are mainly associated with electricity consumption from our storage warehouse for pharmaceutical products and hemodialysis centres. All of our warehouse and hemodialysis treatment centers are equipped with environmental control measures, where temperature and humidity are regulated according to seasonal changes to ensure the quality of the medicine held within our premises. To limit the use of air conditioning during summer months, air conditioning at our facilities are set at 26 degrees Celsius. At our offices, our employee handbook promotes energy saving practices to our staff, including the adoption of green-commuting practices such as carpooling, as well as instructing our staff to turn off electric devices when they leave their seat in effort to reduce electricity consumption associated with idle appliances.

The Group's logistics department is responsible for the delivery of goods, during which the consumption of fossil fuels results in the emission of greenhouse gases into the atmosphere. Taking into consideration the potential environmental impacts of our logistics activity, the

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delivery routes taken by our delivery vehicles have been optimized to minimize fuel consumption and associated emissions. During the reporting period, the Group has consumed 35,864 litres of petrol in its operations. The Group estimated its greenhouse gas emissions for the Reporting Period primarily through the use of data associated with electricity and fossil fuel consumption. To convert energy consumption figures into equivalent greenhouse gas emissions, emission factors obtained from utility invoices, along with references to third-party documents (including electricity & gas consumption data and associated carbon intensity factors), were used during the calculation. In addition to the quantity of carbon dioxide (CO2) emissions, it is to be noted that the greenhouse gas emission calculations also consider the global warming contribution associated with other emitted substances, including methane (CH4) and nitrous oxide (N2O), whose impacts are expressed in equivalent quantities of carbon dioxide (CO2e) to determine the cumulative environmental impact of Group's operations with respect to global warming.

During the reporting period, no violations were recorded with respect to relevant environmental laws and regulations. The total greenhouse gas emissions associated with the Group's operations during the reporting period was estimated to be 1,129 tCO2e (2019: 1,554 tCO2e). The reduction in greenhouse gas emissions is due to the reduction in scale for our pharmaceutical wholesale and distribution businesses during the year.

Greenhouse Gas Emissions

	9%		Scope 1 - Direct Emissions
20%
			Scope 2 - Energy Indirect
			Emissions
			Scope 3 - Other Indirect
	71%		Emissions

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Air Emissions

In addition to the emission of greenhouse gases, combustion of fossil fuels is also associated with the emission of a number of air pollutants, namely nitrogen oxides (NOx), sulphur oxides (SOx) and particulate matter (PM). Similar to the estimation of greenhouse gas emissions, air emissions are evaluated based on statistics associated with fossil fuel consumption and vehicle usage. The amount of air emissions produced by the Group during the reporting period included 67.7 kg of NOx, 0.53 kg of SOx, and 6.3 kg of particulate matter.

Waste Management

Proper waste disposal is essential for reducing the impact to the environment and ecology. The Group has established waste management procedures for classification and disposal of wastes generated during our daily operations.

Medicine requiring disposal will be returned to the supplier or handled by medical waste contractors designated by the government, to be written off in accordance with our Destruction Management System (《報損與銷毀管理制度》). During the reporting year, the Group did not encounter any material cases where goods required return to the supplier due to defects nor generated any hazardous waste. In total, the Group has disposed about 100kg of expired pharmaceuticals during the reporting period.

For general waste, the Group encourages recycling by providing waste classification facilities at various locations within our premises. Recycling of wastes generated at our facilities makes use of local recycling facilities. The Group actively upgrades its electronic office system to enhance communication among employees and also reduce the use of paper for information dissemination. To further reduce waste at our offices, disposable paper cups are not used at our facilities. During the reporting year, the Group generated a total of about 24 tons of non- hazardous waste.

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Water Consumption

The Group's water consumption from our pharmaceutical wholesale and distribution, and hemodialysis treatment businesses is not considered to have material environmental impact. We recognize that the main source of water usage arises from employees' daily water consumption and have promoted water saving practices in our operations, including internal rules for water consumption as set forth in the employee handbook, and posting of reminders in washrooms to instil water-conscious practices. Since our water supply facilities are shared between tenants in the office, precise data associated with water consumption were not available. However, we have monitored the quantity of wastewater discharges from our hemodialysis treatment business, which amounted to a total of about 432 m3 during the reporting period.

Although our water consumption is not significant, we regularly remind our staff to conserve water.

Packaging Materials

The Group consumes some material quantities of packaging materials for the delivery of pharmaceutical goods and services to its customers. Where possible, we avoid providing plastic bags to our customers to limit the use of plastic bags. The total mass of packaging materials consumed by the Group during the reporting period is about 61 tonnes, primarily consisting of cardboard boxes.

A breakdown of the use of packaging materials is presented in the table below:

	Packaging Material		Mass Consumed (tonnes)
	Paper		45.6
	Glass	13.0
	Plastics		2.2
	Metal		0.5

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Summary

The consolidated data with respect to key performance indicators (KPIs) regarding emissions and resource consumption associated with the Group during the reporting period is summarized below:

Environmental KPIs

Category	Unit	2018-2019	2019-2020
Energy Consumption
Total Energy Consumption	GJ	6,501	4,826
Petrol Consumption	GJ (L)	834 (24,104)	1,240 (35,864)
Electricity Consumption	GJ (kWh)	5,667	3,586
(1,574,294)	(996,115)
	GJ / 1000
Total Consumption Intensity	HKD	0.067	0.050
	revenue
Greenhouse Gas Emissions
Total Greenhouse Gas (GHG) Emissions	t CO2e	1,554	1,129
Scope 1 - Direct Emissions	t CO2e	65	97
Carbon Dioxide (CO2) Emissions	t	57	85
Methane (CH4) Emissions	kg	5	8
Nitrous Oxide (N2O) Emissions	kg	27	40
Scope 2 - Energy Indirect Emissions	t CO2e	1,267	801
Scope 3 - Other Indirect Emissions	t CO2e	221.8	230.3
Paper Waste Disposed At Landfills	t CO2e	219.6	227.9
Employee Business Travel	t CO2e	2.2	2.4
Total Greenhouse Gas (GHG) Emissions	t CO2e /
1000 HKD	0.016	0.012
Intensity
revenue
Air Emissions
Nitrogen Oxides (NOx) Emissions	kg	51.3	67.7
Sulphur Oxides (SOx) Emissions	kg	0.35	0.53
Particulate Matter Emissions	kg	4.9	6.3
Waste Management
Total Hazardous Waste Produced	t	0.1	0.1
Total Non-Hazardous Waste Produced	t	19.8	24.1
	kg / 1000
Total Hazardous Waste Intensity	HKD	0.0010	0.0010
	revenue
	kg / 1000
Total Non-Hazardous Waste Intensity	HKD	0.21	0.25
	revenue
Total Sewage Generation	m3	108	432
Use of Resources
Total Packaging Material	t	55.2	61.3
Paper	t	45.6	45.6
Glass	t	7.3	13.0

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Environmental KPIs

Category	Unit	2018-2019	2019-2020
Plastics	t	1.8	2.2
Metal	t	0.5	0.5
Total Packaging Consumption Intensity	t / 1000 HKD	0.47	0.47
revenue

Caring for Employees

The Group's present achievements are attributed to the joint efforts from our staff. The Group is committed to create a suitable working environment for its employees. In line with the long- term growth of the Group, our human resources policy was established in accordance with the national and provincial regulations of to ensure our staff can receive appropriate support and training.

As an equal-opportunity employer, the Group ensures all staff members are treated equally. Discrimination due to any reason, including but not limited to, gender, race, physical disability, marital status, religion, political opinion or sexual orientation, is not tolerated. Recruitment and promotion of our staff are only based on work performance and capabilities. The Group's human resources department arranges annual performance evaluation for our staff to provide them with performance feedback, as well as to understand the needs of our staff members. Employee renumeration within the Group is determined according to respective staff responsibilities, as well as the overall market trend. The performance evaluation also provides valuable information to management, helping the Group identify talents for taking leading roles for the Group's future development. There was no complaint received in relation to any unfair treatment during the reporting year.

Remuneration

The Group has established a Remuneration Committee in 2013, which adopted the approach under code provision B.1.2(c)(ii) of the Corporate Governance Code (CG Code) and made recommendations to the Board on the Group's overall policy and structure for the remuneration of Directors, senior management, and employees.

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The members of the Remuneration Committee for the year and up to the date of this report are Mr.WONG Hon Kit (Chairman), Dr.LIU YongPing, Mr.HO Man and Mr.WANG Jia Jun.

The primary duties of the Remuneration Committee include, but not limited to:

• Making recommendations to the Board on the policy and structure for all remuneration of the Directors and senior management and on the establishment of a formal and transparent procedure and developing policies on such remuneration;
• Determining the remuneration packages of all individual executive Directors and the senior management and making recommendations to the Board of the remuneration of non-executive Directors; and
• Reviewing and approving compensation payable to the executive Directors and the senior management for any loss of termination of office or appointment to ensure that it is consistent with the relevant contractual terms and is otherwise fair and not excessive.

The role and function of the Remuneration Committee include the determination of specific remuneration package for all executive Directors and making recommendations to the Board of the remuneration of non-executive Directors. The remuneration of Directors are based on the Group's operating results, individual performance and comparable market statistics.

The Remuneration Committee is also responsible for setting up the overall remuneration policy for the company. Remuneration for employees is strictly based on merit, qualification and competence of employees.

The Remuneration Committee held 2 meetings during the year ended 31 March 2020.

Distribution Ratio of Employees

As of 31 March 2020, the Group employs a total of 124 employees, with all of them being full- time employees.

Cultivation of a sense of belonging within employees can help maintain team morale and reduce employee turnover. To enhance communication and trust between our staff, the Group exchanges opinions with its employees through various channels. A wide range of group events 11

and activities are organized every year to promote friendship and teamwork. During the reporting period, the annual staff turnover rate within the Group was determined to be about 23%.

The distribution of our staff with respect to gender and age are presented in the following table:

		Employee Demographic Data
	Total # of Employees	124
	Location
	Hong Kong	12
	Mainland China	112
	Gender
	Male	37
	Female	87
	Age Group
	18-23 years old	12
	24-29 years old	33
	30-40 years old	41
	41-50 years old	26
	51-60 years old	9
	>60 years old	3

Occupational Health and Safety

The Group takes the responsibility to ensure its staff members work in a safe environment. Employees are required to comply with guidance on safe work and pay attention to personal hygiene at all times. To ensure that the health conditions of our staff remains above satisfactory levels, physical examinations are arranged annually by the Group. In case any abnormal health conditions are identified, follow-up actions will be taken and internal transfers may be performed where applicable to limit further exposure to incompatible work environments.

In case staff members are involved with tasks which may be potentially hazardous, the Group provides appropriate instruments and suitable equipment for its employees to protect their well- being. In addition, the Group's offices are also designed with the consideration of ergonomics limit the likelihood of occupational injuries. For example, our offices are maintained at an adequate brightness level to minimize eye strain, and hallways are regularly cleaned to reduce the risk of staff injury due to slips, trips and falls. During summer periods, refreshments are

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provided to our employees to prevent heat stroke. As for staff members who participate in outdoor work, suitable weather protection such as sunscreen and rain gear are provided.

In light of the COVID-19 pandemic which occurred during the reporting period, we have arranged a series of safety measures for purposes of protecting the safety of our employees as well as our customers. This includes the mandatory usage of surgical face masks and monitoring of body temperature for our staff, regular disinfection of common areas, and providing training sessions for our employees to inform them about COVID-19. Due to the vulnerability of patients visiting our hemodialysis treatment business, we have established a standard operation procedure to reduce our employees' exposure to external parties to lower the chances of contracting the virus. We offered flexible working hours for our staff in Hong Kong and provided them with masks for daily wear.

The Group strictly complies with laws and regulations regarding employee rights and protection. During the reporting period, there was no record of any work-related injuries for our staff.

Development and Training

The Group recognizes that the constant acquisition of up-to-date knowledge and skills is essential to the continuing growth of the organization, enabling the enhancement of our competitiveness and driving the Group to become a learning-oriented enterprise. The Group provides its employees with various forms of training to improve their personal abilities and professional knowledge. An annual training plan is developed to ensure training resources are utilized efficiently. During the reporting year, in-house training organized for the Group's employees included continuing education for accounting and pharmacists, occupational health, as well as training course covering taxation and Directors' training. The total attendance for the training sessions provided for our employees during the year is 81. The total number of training hours received by our staff is 223 hours.

Furthermore, since government policies with regards to medications and other associated regulations are frequently revised, the Group also provides subsidies for employees to enrol in courses to consistently acquire latest knowledge to support the development of their expertise.

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Upon completion of the training courses, reviews are performed in effort to further optimize future in-house training programs.

To facilitate the understanding of the Group, an induction training program is provided to all our new recruits. The training program covers the Group's history, operating philosophy, business process and corporate culture. Since the specifics of tasks and situations encountered during daily work cannot be taught comprehensively in a classroom environment, experienced staff members are arranged to guide new employees and provide them with guidance on a daily basis to smoothen their adaptation to their job position. Furthermore, the Group encourages innovation from its employees and welcomes contribution of new ideas towards the Group's operations.

Retirement Benefits

The Group's employees in the PRC participate in defined contribution schemes associated with relevant provincial and municipal governments, under which the Group and the employees in the PRC are required to make monthly contributions to these schemes in accordance with relevant requirements. The Group's subsidiaries in the PRC contribute funds to the pension in accordance with the requirements of the relevant local and municipal governments.

The Group has arranged the Hong Kong employees to join the Mandatory Provident Fund Scheme, a defined contribution scheme managed by an independent trustee whereby each of the Group (the employer) and the Hong Kong employees make monthly contributions to the scheme in accordance with relevant legislations.

Details of the Group's contributions to the retirement benefit schemes are presented in Note 35 to the consolidated financial statements included in the Annual Report.

Labour Standards

The Group is against the use of child and forced labour. The Group would not employ any children for any jobs and has enforced a number of prevention measures in effort to eliminate any possibility of underaged employees from being present in its workforce. Identity cards are 14

checked during recruitment to ensure applicants meet the legal age requirement for work. In addition, confirmation of employment requires approval and review by multiple departments to ensure compliance.

The Group is deeply aware of the importance of work-life balance towards the health and morale of employees. Studies have shown that long working hours leads to a reduction in productivity and increases the risk of accidents, hence, the Group does not encourage overtime work. In case overtime work situations are unavoidable, work flow are regularly monitored to ensure safe operation.

The Group's human resources department clearly explains to employees their rights and responsibilities to safeguard the interests of all parties and reduce labour disputes. The human resources management policy is revised regularly by the human resources department according to updates of the labour law issued by the government. During the reporting period, no violation of laws and regulations relating to labour standards was identified.

Operating Practices

Supplier Management

The Group pursues the mission of providing pharmaceutical products to the community and distribute medicine for healthcare institutions. In contrast to household goods, it is essential to ensure a steady supply of medication for patients in accordance with their treatment schedules. The Group has established a long-term relationship with a variety of large and medium-sized pharmaceutical suppliers from various provinces across the nation as means to diversify our supply chain and maintain stability of supply. The Group maintains contact with its suppliers through various channels to learn about their needs and to identify opportunities for collaboration with each other.

Quality and safety are particularly key characteristics for pharmaceutical products. The Group takes proactive measures to ensure the quality of suppliers, through the implementation of quality management system. Prior to inclusion as a supplier for the Group, a strict and thorough

15

investigation of the potential supplier is performed to evaluate their suitability. Approved suppliers are reassessed annually to ensure compliance with Group's requirements is maintained. In addition to price and quality of goods, the Group also has specific requirements regarding the environmental policies of its suppliers. Suppliers are required to submit document proof indicating their compliance with relevant environmental laws and regulations.

Product Responsibility

The Group upholds the operation philosophy of "honest and morality go first", and adheres to the operation objective of "benefiting both the society and people". The Group pursues the mission of providing quality healthcare products and services. Drug safety and effectiveness are of particular importance. As a responsible drug distributor, the Group adopts effective quality control measures during procurement, storage, sales, and transportation to ensure the quality of medicine. The Group is committed to providing professional services at our customers' convenience. The Group's pharmaceutical wholesales and distribution business was in strict compliance with laws and regulations stipulated by the China Food and Drug Administration. To facilitate employees' effective execution of their responsibilities in accordance with relevant requirements outlined by laws and regulations, the Group has established an effective quality management system, which plays a key role in protecting our customers' personal information from unauthorized access, as well as ensuring the quality of our after-sale services.

Product Quality

The Group has established a quality management department, responsible for setting quality targets, as well as enforcing and monitoring the execution of the code of conduct by respective departments, to maintain consistent quality across the entire supply chain. The quality management department visits each department regularly to carry out internal review, risk assessment, and analyse of the results, along with proposing suggestions for improvement. The results generated from the assessment are submitted to the management for review and follow- up.

16

Storage conditions of medications are crucial for maintaining their quality and effectiveness. Depending on their individual characteristics, medications require different storage methods. The Group's storage and transportation facilities are all designed in compliance with national requirements. The temperature and humidity of the storage locations are monitored closely to ensure that medications are not affected by changes in the ambient environment. For goods received from suppliers, the quality department must inspect each batch of products to prevent substandard goods from reaching customers. During inspection, information such as the packaging and a lot number of the products must be recorded in detail for tracking purposes. To further ensure the quality and safety of our distributed products, goods are provided with quality assurance agreements from our suppliers.

After-Sale Service and Complaint Management

The Group highly values customer feedback and strives to continuously improve its services. Customer service representatives from the Group contact customers on a regular basis to learn about their satisfaction with the products and services. All customer feedback and complaints are handled by the customer service department, which respond to all feedback and complaints and records in detail for future reference. For complaints involving major incidents, an investigation team will be setup by the Group to follow up and review potential issues. The Group often works with its suppliers to provide feedback on product quality and together formulate plans for continuous improvement, thereby achieving win-win results.

The Group has formulated a drug recall system to facilitate systematic recalls where necessitated. In case any recalls are performed, the Food and Drug Administration must be notified by the management. No recall cases were recorded during the reporting year.

Customer Privacy

During operations, the Group's employees are often required to access customers' information. However, in no circumstance employees disclose customers' information to any person. An authorization system has been set to limit access to personal information in the Group's computer system, which prevents unauthorized personnel from accessing restricted information.

17

The Group's computer system is updated on a regularly basis to prevent information leakage due to cyber attacks.

Anti-Corruption

The Group believes that conducting business with integrity and good corporate governance is an important part of enhancing our competitive advantage. Since its establishment, the Group has maintained highest standards of corporate governance. Any bribery, extortion, fraud and money-laundering are not tolerated. The Group has established a clear governance structure to regularly review and monitor policies and practices of corporate management. We strictly comply with relevant laws and regulations, optimize our management system, safeguard the interests of our stakeholders, and enhance corporate value and accountability.

The Group has implemented a whistle-blowing policy for employees to report on suspected non- compliance and unethical behaviours. In case severe non-compliance incidents are identified by the management, handing over of such incidents to judicial authorities will be considered to ensure that the Group operates with the highest standard of moral and professional ethics.

The board of directors regularly reviews the adequacy and efficacy of the Group's risk management and internal control system. The employee code of conduct is set out in employment contracts and staff handbook, providing measures for handling non-compliance or unethical behaviours.

A strict anti-corruption policy is employed within the Group. Our staff are instructed not to accept any benefits from suppliers or other partner companies in any circumstance. Employees are required to declare their relations with any other personnel of the Group and other partner companies prior to their employment and shall abstain from such business activities that may cause conflict of interests. The Corporate Governance Report is presented on pages 17-33 in the Company's 2019/2020 Annual Report. During the reporting period, the Group did not identify any involvement in bribery, extortion, fraud and money-laundering.

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Community Participation

The Group's hemodialysis treatment business has organized and participated in a number of community contribution events at Wuhua county and Wuchuan City during the reporting period, including promotion for renal health, in addition to health talks as part of festive celebrations during Tuen Ng Festival and Mid-Autumn Festival.

During the reporting the period, our staff contributed 240 hours of volunteer hours in total, and our monetary donations amounted to a total of 76,000 RMB. The Group looks forward to participate in more community activities and make more contribution to the community in the future with it resources to provide support to those in need and promote healthy living.

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