2017E — Page 45

ENVIRONME!!

1. ABOUT THIS ESG REPORT (Continers

C.

Materiality Assessment

:

AND CO

While the ESG Reporting Guide articulates a wide spectrum of aspects, they are not all relevant to the operations of Hong Kong Ferry Group. The following three-step materiality assessment was conducted by the independent consultant to determine the material sustainability issues for disclosure.

Step 1: Identification

The preliminary step was to identify and review the sustainability disclosures of Hong Kong Ferry Group's local peers. This peer benchmarking exercise gave an indication of the most appropriate ESG issues for Hong Kong Ferry Group.

External and internal stakeholders were also invited to complete surveys to rank the importance of ESG topics to themselves and to the Company, respectively.

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Step 2: Prioritisation

Results from the peer benchmarking exercise, stakeholder survey and engagement sessions were consolidated to identify a list of material ESG issues for Hong Kong Ferry Group.

Step 3: Validation of the Material Issues

The Company's senior management convened a meeting with the independent consultant to confirm a finalised list of material Key Performance Indicators ("KPIs") for disclosure.

The chart below shows the 32 HKEX KPIs mapped according to their importance to Hong Kong Ferry Group and our stakeholders. The 28 HKEX KPIs which were determined to be of "high" and "medium" materiality are included in this ESG Report.

Importance to stakeholders

HIGH

LOW

Medium Materiality

High Materiality

B3.1 Percentage of

employees trained

A1.1 Air emissions

B6.1 Percentage of recalled

products

B6.3 Intellectual property rights practices

B6.4 Quality assurance

process

A1.4 Non-hazardous waste

produced

A1.6 Waste reduction

measures

B6.2 Complaints received and

handling

B6.5 Consumer data privacy

B2.1 Work-related fatalities

B2.2 Lost days due to injury

82.3 Occupational health and

safety measures

B3.2 Average training hours

B7.1 Concluded legal cases

B7.2 Anti-corruption measures

A1.2 Greenhouse gas emissions A1.3 Hazardous waste produced

A1.5 Greenhouse gas reduction

measures

A2.1 Energy consumption A2.3 Energy efficiency measures A3.1 Significant impacts on the

environment

B1.1 Total workforce 81.2 Employee turnover rate

A2.5 Packaging materials

B4.1 Measures to prevent

child and forced labour

B4.2 Elimination of child and

forced labour

B5.2 Supplier management

practices

A2.2 Water consumption

A2.4 Water saving measures

B8.1 Community focus areas

B5.1 Number of suppliers by

geographical region

B8.2 Resources contributed to

the community

Importance to Hong Kong Ferry Group

HIGH

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Hong Kong Ferry (Holdings) Company Limited

Annual Report 2017

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