DJ HK Bourse: Results Announcement From Hung Fook Tong Group Holdings Ltd.
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https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0723/2020072300841.pdf HUNG FOOK TONG GOOD FOR HEALTH 2019 ENVIRONMENTAL,SOCIAL
AND GOVERNANCE REPORT
CONTENTS 2 2019 Highlights 4 About Hung Fook Tong 5 Message from the Chairman 6 Awards and Recognition 8 About the Report 10 ESG Governance 11 Stakeholder Engagement 14 Operation Practices 19 Caring for Employees 23 Environmental Stewardship 28 Investing in the Community 31 Compliance Management 32 Summary of Key Performance Indicators 35 ESG Reporting Guide Content Index Environmental, Social and Governance Report 2019 1 2019 Highlights For the financial year ended 31 December 2019 / as of 31 December 2019, Hung Fook Tong Group Holdings Limited had: 15,109 tonnes of CO -e 2 of Greenhouse Gas Emissions 325,853 m 3 of water consumed 914 employees 384.4 tonnes 742 in Hong Kong of food waste recycled 172 in Mainland China 91.0 tonnes reduced of CO2-e of Greenhouse Gas Emissions 232 key suppliers 152 training courses involving 804 employees HUNG FOOK TONG 115 self-operated shops in Hong Kong GOOD FOR HEALTH
2 Hung Fook Tong Group Holdings Limited Over HK$2.5 million of cash and in-kind products sponsored Contributed 349 service hours
Supported over
220 community projects to the community
and 188 NGOs Received Hong Kong Awards for Environmental Excellence 2019: Shops and Retailers - Certificate of Merit Awarded the Green Office Label and Eco-Healthy Workplace Label 2019 and CarbonCare® ESG Label (Level 3) Environmental, Social and Governance Report 2019 3 ABOUT HUNG FOOK TONG The Group's products are marketed through two sales Established in 1986 and listed on the Main Board of The Stock Exchange of Hong Kong Limited (" SEHK ") since channels: retail and wholesale. As the largest revenue 2014, Hung Fook Tong Group Holdings Limited ("HFT" contributor of the Group, the Hong Kong retail business or the " Company ") and its subsidiaries (collectively as continues to grow during the year. The Group opened nine the "Group") are principally engaged in the production new shops in 2019, totalling 115 self-operated shops as at and sales of a variety of herbal and non-herbal products 31 December 2019, which enabled the Group to retain its with the Hung Fook Tong brand. During its 33 years of position as the largest herbal retailer in Hong Kong based development, the Group continues to develop diversified on retail network size. products and has transformed itself from traditional Chinese herbal tea shop into a modern wellness concept For the 17th consecutive year, HFT has been recognised as food and beverage enterprise. the top market leader in the Hong Kong Wellness Drink Category, with 37.8% market share by sales volume (litre)1. The Group manufactures its products at its own production The Group has also developed its wholesale business in facilities located in Hong Kong and Mainland China. Its Tai Mainland China and other markets such as Vietnam and Po plant mainly produces fresh food products and drinks to Malaysia during the reporting year. be sold at Hung Fook Tong retail shops in Hong Kong. In the second quarter of 2019, the Group's new production facility in Kaiping City, Guangdong Province, has become fully operational. The new production facility is equipped with a high level of automation to provide additional capacities and to facilitate cost-effective production with an enhanced quality control mechanism. It is capable of supporting the demand for fresh and long-shelf life drinks in Mainland China and other markets. Validated by Nielsen. 1
4 Hung Fook Tong Group Holdings Limited
MESSAGE FROM THE CHAIRMAN Mr. Tse Po Tat Chairman and Executive Director
To our stakeholders, opinions. Based on their inputs, we have identified 13
As a leading food and beverage manufacturer, the Group material issues, covering operating practices, labour
upholds the principle of enhancing the wellbeing of its practices, environmental stewardship and community
stakeholders, in order to create a sustainable community investment, as the Group's focuses in this Report. The
at the locations where we operate. Despite the challenges Group endeavours to provide a fair, harmonious and safe
HFT has faced during the past year due to the global occupational environment for employees, while creating
economic downturn and social instability, the Group sees positive impacts on the community. HFT also concerns
the challenges as an opportunity to better connect with about the environment, not only does the Group strive
stakeholders in providing affordable products with high to minimise the impacts of its production and operation
quality standards. on the environment, but HFT also hopes to create an environmentally friendly working environment for our
The Group relies on responsible corporate governance employees.
to manage its sustainability strategies. Through effective
coordination between committees including Executive Looking into the future, the Group seeks to continuously
Committee and Audit Committee, the Board of Directors
(" the Board ") is liable for the overall responsibility to improve its performance through an effective approach, including to install solar panels at Hong Kong factory 's
oversee HFT 's sustainable development progress. HFT rooftop in the next reporting year for reduction in the use
recognises the significance of a sound and well established of non-renewable energy resources, to drive a reduction
sustainability governance structure, it is on our agenda to in the use of plastic packaging and seek for alternative
establish a formal structure to manage matters in relation
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DJ HK Bourse: Results Announcement From Hung Fook Tong Group Holdings Ltd. -2-
packaging materials in the long run, as well as to develop
to sustainability strategies. innovative shopping experience for our customers as the retail landscape evolves in the digital era.
In the reporting year, HFT has engaged stakeholders
from different sectors to collect their thoughts and Tse Po Tat Chairman and Executive Director Hong Kong, 23 July 2020 Environmental, Social and Governance Report 2019 5 AWARDS AND RECOGNITION 25 HFT has been awarded in recognition of the Group's effort on environment, labour practice, customer experience enhancement and community investment. The awards AWARDS HFT has received during the reporting year are listed below: In Recognition of Labour Practice Happiness-at-Work 5 years + The Hong Kong Productivity Council ERB Manpower Developer Award Scheme: Manpower Developer (2011-2020) Employees Retaining Board Joyful@Healthy Workplace Occupational Safety and Health Council Hong Kong Smoke-free Leading Company Awards 2019 - Certificate of Merit Hong Kong Council on Smoking and Health In Recognition of Customer Service and Operation Excellence The Hong Kong Q-Mark Service Scheme & Q-Mark Elite Brand Awards 2019 The Federation of Hong Kong Industries Hong Kong Service Awards 2019 East Week 2019 Hong Kong Top Brand Hong Kong Brand Development Council & The Chinese Manufacturers' Association of Hong Kong GS1 Consumer Caring 5 years+ GS1 Hong Kong 2019 Quality E-Shop Hong Kong Retail Management Association PARKnSHOP Super Brands Award 2018 - Healthy Drinks PARKnSHOP Trusted Brands 2019 - Platinum Award (Chinese Soup/Herbal Tea Shop) Reader's Digest Hong Kong's Most Outstanding Service Awards 2019 CorpHub Food Safety Enterprise 2019-2020 International Food Safety Association orporat The 4th Hong Kong Creativity Industries Award 2019 de C eL Tra Asia Pacific Creativity Industries Association ab r Fai el Fair Trade Corporate Label 2019-2020 (Bronze) Fair Trade Hong Kong 2019/20 Bronze
6 Hung Fook Tong Group Holdings Limited In Recognition of Environmental Efforts CarbonCare® ESG Label (Level 3) CarbonCare InnoLab Hong Kong ESG Reporting Awards 2019: Best Small Cap ESG Report Grand Award Alaya Consulting Limited BOCHK Corporate Environmental Leadership Awards 2018 - Services Sector Bronze Award & EcoChallenger The Federation of Hong Kong Industries Hong Kong Awards for Environmental Excellence 2019: Shops and Retailers - Certificate of Merit Environmental Campaign Committee Green Office Label and Eco-Healthy Workplace Label 2019 World Green Organisation Charter on External Lighting Award (Gold Award) The Environment Bureau
In Recognition of Community Investment
10 Years plus Caring Company 2006-2019
The Hong Kong Council of Social Service
Social Capital Builder 2018-2020
Labour and Welfare Bureau
- Community Investment and Inclusion Fund
2017/18 Y-Care CSR Scheme (Silver Partner)
Chinese YMCA of Hong Kong
2018/2019 Award of Excellence
The Community Chest of Hong Kong Environmental, Social and Governance Report 2019 7 ABOUT THE REPORT retail shops"), office and factory in Hong Kong ("Hong Kong office" and "Hong Kong factory" respectively), as This is the fourth Environmental, Social and Governance well as the operation of the newly implemented office and ("ESG") report ("Report") published by HFT. By reporting factory in Kaiping City, Guangdong Province ("Kaiping the ESG policies, measures and performances of the office" and "Kaiping factory" respectively). Group, the Report allows stakeholders to learn more about its progress and development direction in sustainability While this Report does not cover all operations of the issues. Group, it is on its agenda to gradually improve the Group's data collection system and expand the reporting scope in Available in both Chinese and English, the Report has the future. been uploaded to the websites of SEHK and the Company (www.hungfooktongholdings.com). REPORTING STANDARD This Report is prepared in accordance with the REPORTING SCOPE Environmental, Social and Governance Reporting Guide The Report focuses on the operation of the core businesses (the "ESG Reporting Guide") as contained in Appendix 27 of HFT, i.e. retail and wholesale during the financial year of the Rules Governing the Listing of Securities on SEHK. from 1 January 2019 to 31 December 2019 (the "reporting The four reporting principles, namely the principles of year"). The reporting scope covers the ESG performances materiality, quantitative, balance and consistency, form the of the operation of retail shops in Hong Kong ("Hong Kong backbone of this Report. Reporting Principle Definition HFT's Response The Group has identified issues that Materiality Issues that the Group has posed are considered as important to the significant impacts on the economy, stakeholders via management interview, environment and society, shall be stakeholder questionnaire and focus reported. group. The material issues identified were verified by the Board. Please refer
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DJ HK Bourse: Results Announcement From Hung Fook Tong Group Holdings Ltd. -3-
to p.13 for further details. The Group has assigned responsible Quantitative The Group shall ensure the Key personnel in collecting and managing Performance Indicators (KPIs) are environmental and social KPIs. The measurable and accompanied Group has also commissioned an by a narrative explaining its independent consultant in assessing purposes, impacts and calculation emissions and other environmental methodologies. KPIs in accordance with local and international guidelines. The Group is committed to upholding an Balance The Report should provide an unbiased picture of the Group's performance. unbiased reporting principle. The Group does not only report the achievements it Presentation formats that may has made but also the challenges it has inappropriately influence a decision faced. or judgement by the report readers should be avoided. The Group adopts consistent data Consistency Consistent methodologies should collection and calculation methodologies be adopted to allow meaningful comparison on the Group's ESG and provides historical data where appropriate. performance.
8 Hung Fook Tong Group Holdings Limited
To ensure the accuracy of environmental KPIs, the Group's FEEDBACK MECHANISM
greenhouse gas ("GHG") emissions from its operations Comments and suggestions of stakeholders can help the
were quantified through carbon assessment conducted Group to establish a more detailed and sound sustainability
by an independent professional consultancy, Carbon Care strategy. If you have any questions or suggestions
Asia. A complete index is inserted in the last section of this regarding the content or format of the Report, please
Report for reference. contact the Company via the following channels:
CONFIRMATION AND APPROVAL Address: 11 Dai King Street, Tai Po Industrial Estate,
The Group has established internal controls and a formal Tai Po, New Territories, Hong Kong
review process to ensure that any information presented Email: enquiry@hungfooktong.com.hk
in this Report is as accurate and reliable as possible. The Telephone: (852) 3651 2000
Board of the Company has overall responsibility for the Fax: (852) 3651 2265
establishment and disclosure of relevant measures and
KPIs. To ensure that the Report covers environmental and
social issues material to the Group, this Report has been
reviewed and approved by the Board on 23 July 2020. Environmental, Social and Governance Report 2019 9 ESG GOVERNANCE ESG RISK MANAGEMENT The Group believes that risk management is essential HFT upholds the principle of good corporate governance, to maintain the smooth operation of HFT. The Board which facilitates the development of the Group's ESG has appointed the Audit Committee to assist the Board strategies. The Board is fully committed to supporting in identifying, evaluating, managing and reviewing the the realisation of HFT 's corporate responsibility and potential risks that could cause impacts to the Group's is responsible for setting goals and objectives of operation. The identified risks are managed within the sustainability directions for the Group. In order to ensure risk management and internal control systems and are the effectiveness of the policies and measures in relation evaluated regularly to ensure the effectiveness of the to ESG matters, the Group conducts review regularly for control and preventive measures. continuous improvement on its performance. The Group requires all operating departments to be The Executive Committee is responsible for the involved in the process of identifying and assessing risks, as implementation of goals and objectives and monitoring well as the formulation of mitigation measures, while the the Group's performance in relation to ESG matters. The Internal Audit Department is responsible for coordinating committee meets regularly regarding the progress of the and advising on the matters in relation to the identified set goals and objectives and reports to the Board. risks. As part of the risk mitigation strategies, the Group has established a whistleblowing mechanism to enable Looking into the future, HFT understands that the stakeholders to communicate their concerns regarding any stakeholders now have a higher standard upon the incurring risks. Group's sustainability performance, the Group is actively considering on the establishment of an ESG working group HFT understands that the current risk management and to manage and monitor the progress in HFT's sustainable internal control systems have not considered environmental development. and social risks in a comprehensive manner. The Group is planning to include such risks in its risk assessment process gradually and formulate corresponding action plans to better manage the environmental and social risks imposed by or on the Group's operation.
10 Hung Fook Tong Group Holdings Limited
STAKEHOLDER ENGAGEMENT
Stakeholders are key to HFT's continuous improvement of its sustainability performance. Throughout the years, the Group
has been collecting feedback and opinions from its stakeholders via questionnaires, focus groups and interviews etc.
During the reporting year, key stakeholders have been engaged through various channels. Key Stakeholders Engagement Activities Highlights
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