2018E — Page 46

ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORT (CONTINUED)

1. ABOUT THIS ESG REPORT (Continued)

C.

Materiality Assessment

While the ESG Reporting Guide specifies a wide range of aspects, they may not all be relevant to the operations of Hong Kong Ferry Group. A three-step materiality assessment was conducted by the independent consultant to determine material ESG issues for disclosure in the ESG Report.

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The preliminary step was to identify and review the ESG disclosures of Hong Kong Ferry Group's local peers which gave an indication of the most relevant ESG issues for Hong Kong Ferry Group.

External and internal stakeholders were also invited to complete an online survey to rank the importance of ESG topics to themselves and to Hong Kong Ferry Group, respectively.

Results from the peer benchmarking exercise and online survey were consolidated to develop a prioritised list of potential material ESG issues for Hong Kong Ferry Group.

alidation of Safarial 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

Medium Materiality

High Materiality

B3.1 Percentage of employees

trained

B6.1 Percentage of recalled

products

B2.1 Work-related fatalities B2.2 Lost days due to injury 82.3 Occupational health and

safety measures B3.2 Average training hours B6.5 Consumer data privacy B7.1 Concluded legal cases B7.2 Anti-corruption measures

A1.1 Air emissions

B6.2 Complaints received

and handling

A1.3 Hazardous waste produced

A1.6 Waste reduction measures

86.4 Quality assurance process

A1.2 Greenhouse gas emissions A1.4 Non-hazardous waste

produced

A1.5 Greenhouse gas reduction

measurees

A2.1 Energy consumption A2.3 Energy efficiency measures A3.1 Significant impacts on the environment B1.1 Total workforce B1.2 Employee turnover rate B8.1 Community focus areas B8.2 Resources contributed to the

community

A2.5 Packaging materials

B4.1 Measures to prevent child

and forced labour

B4.2 Elimination of child and

forced labour

B6.3 Intellectual property rights

practices

A2.2 Water consumption

A2.4 Water saving measures

B5.1 Number of suppliers by

geographical region

B5.2 Supplier management

practices

Low Materiality

LOW

Hong Kong Ferry (Holdings) Company Limited Annual Report 2018

HIGH

Importance to Hong Kong Ferry Group