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HENGYANGPETROCHEMICALLOGISTICSLIMITED
2018SustainabilityReport
REACHINGFOR
SUCCESS
1|HENGYANG PETROCHEMICAL LOGISTICS LIMITED
CORPORATEPROFILE Established in2002,HengyangPetrochemicalLogisticsLimited (the“Company”)and its subsidiaries(collectively,the“Group”)isaleadinglogisticsserviceproviderinthepetrochemicalindustryinChina.The Group provides storage and land transportation services for different types of bulk liquidpetrochemical and gases and oils such as acetic acid, phenol, acetone, styrene, methanol, monoethyleneglycol,propane,butane,butadiene,fueloilandbaseoil.TheGroup’spetrochemicalstoragebusinessofferswhole-tankleasingservicesforafixedperiodoftime(typicallyforoneyear)andspotleasingservicesforaperiodrangingfromonemonthtothreemonths. ABOUTTHISREPORTSustainabilityhasbecomeacriticalsuccessfactorforcompaniestoensurelong-termvaluecreation.Asaresponsiblecorporatecitizen,weconsidersustainabilityissuesinconjunctionwithourcorporatestrategy. We are pleased to present the Group’s inaugural annual Sustainability Report, for ourfinancial year ended 31 December 2018. This report is set out on a “comply or explain” basis inaccordancewithRule711BandPracticeNote7Fon“SustainabilityReportingGuide”oftheSingaporeExchangeSecuritiesTadingLimited(“SGX-ST”)ListingManualSectionB:RulesofCatalist.BOARDSTATEMENTThe key material environmental, social and governance (“ESG”) factors for the Group have beenidentifiedandreviewedbythemanagementoftheGroupandtheboardofdirectorsoftheCompany(the “Board”) supervises the management and monitoring of these factors and takes them intoconsiderationwhendeterminingtheGroup’sstrategicdirectionandpolicies.SustainabilityisapartoftheGroup’swiderstrategytocreatelong-termvalueforallitsstakeholders.REPORTINGFRAMEWORKWe prepared our report with reference to the Global Reporting Initiatives (“GRI”) Core ReportingOptions,aswellastheSGXGuidetoSustainabilityReportingforListedCompanies.Thisreportcoversthe2018financialyearfrom1Januaryto31December(“FY2018”).WehavenotsoughtexternalassuranceforFY2018.REPORTINGSCOPEThisreportwillparticularlyfocusonthematerialsustainabilityaspectsoftheGroup.FEEDBACKWe are committed to listening to our stakeholders and we welcome your feedback on oursustainability efforts, as this enables us to improve our sustainability policies, systems and results.Please send your feedback to [email protected]. More information can be obtained from ourwebsiteatwww.hyplc.com.
2|HENGYANG PETROCHEMICAL LOGISTICS LIMITED
SUSTAINABILITYGOVERNANCESTRUCTURESustainability is integral inourorganisation’scultureandisavitalpartofourcorporatestrategyforachieving long-termgrowth. TheGroup’s governance structure supports anddrives the sustainabledevelopment journey. We are guided by our code of conduct and ethics established to promotehealthycorporateculture,ethicalbusinesspracticesandsustainability.ThesustainabilitygovernanceisledbytheBoardofDirectorsandsupportedbyalllevelsoftheGroup.
STAKEHOLDERENGAGEMENTThe Group’s key stakeholders include, but are not limited to, suppliers, customers, employees,shareholders, regulators and community. We adopt both formal and informal channels ofcommunication to understand the needs of key stakeholders and incorporate these into ourcorporatestrategiestoachievemutuallybeneficialrelationships.Anoverviewofourapproachissummarisedinthetablebelow:
BoardofDirectors• Directsandsupervisesthesustainabilitydirection,strategiesandpolicies
Management• AdvisesandsupportstheBoardonsustainabilitymatters,strategiesandpolicies• Managesandmonitorssustainabilityperformanceandtargets
Staff• Implementsustainabilityinitiativesandprovidefeedbackonimprovements
Stakeholder TopicsofConcern Modeofengagement
Suppliers • Regularbusiness
• Compliancewithtermsand
conditionsofpurchasing
policiesandprocedures
• Maintenanceofethical
standards
• Requestforproposaland
quotation
• Suppliersagreements
• Suppliersevaluation
• Email/phonecall
communication
Customers • Productquality
• Codeofconduct
• Meetings
• Email/phonecall
communication
3|HENGYANG PETROCHEMICAL LOGISTICS LIMITED
MATERIALITYASSESSMENTAtHengyang,wedonotonlyfocusonprofitability,butalsoonconductingourbusinessinasociallyresponsible manner. At the heart of everything we do is our commitment to our people, ourenvironment,andourcommunity.After assessing ESG related business risks and opportunities and ESG related issues, we haveidentified the following ESG factors to be the most material to us this year: our people, ourenvironment,ourcommunity,economicperformanceandcorporategovernance.OurPeopleWebelieve in investing in recruiting, training and retaining good employees.Wehavemade everyefforttocreateaworkingcultureandenvironmentthatinspiresourpeopletostaywithus.Wehaveadopted sound human resource policies and practices in ourworkplace by providing safeworkingconditions, rewarding and recognising performance, encouraging teamwork and work-life balance,andofferingcareergrowthopportunitiesandaconduciveworkplace.Hengyangisalsocommittedtoensuringthesafetyandsecurity,aswellasthehealthandwell-beingof our people. We have in place a training programme for our people on safety standards andprocedures,aswellasonhealthandhygienestandardsattheworkplace.BothJiangyinForeversunandJiangsuDeqiaoholdtheOccupationalHealthandSafetyManagementSystemCertificateissuedbytheChinaQualityCertificationCentre.
Employees • Staffrightsandwelfare
• Personaldevelopment
• Safetyandsecurity
• Goodworkingenvironment
• Trainingprogrammeon
safetystandardsand
procedures,aswellason
healthandhygienestandards
• Opencommunication
throughmultiplechannels
• Externaltraining
• Staffappraisal
Shareholders • Corporategovernance
• Timelyinformation
• Economicperformance
• Annualreport
• Annualgeneralmeeting
• SGXannouncements
• Companywebsite
Regulators • Compliancewithapplicable
rulesandregulations
• RegulatorsPublication/
writtencommunication
Community • Responsiblebusiness
operations
• Supportforsocialcauses
• Societalconcerns
• Sustainabilityreport
• CSRinitiatives
4|HENGYANG PETROCHEMICAL LOGISTICS LIMITED
Wetreatallemployeesfairly,withrespectanddignity,regardlessofnationality,gender,age,raceorreligion.Thehiringproceduresarefairandnon-discriminative.Staffarehiredonthebasisofmerit,skills,experienceorcompetencytoperformthejob.The Group ensures compliance with labour and employment laws, including working hours andbelievesingoodwork-lifebalanceforouremployees.CodeofWorkEthicsAll employees are expected to uphold and ensure that they do not engage in any interest thatconflictswithanyoftheCompany’sbusinesses.OurEnvironmentBeinginthepetrochemicalindustry,Health,Safety,andEnvironment(“HSE”)standardsareofutmostimportance tous.Hengyanghas a long-standingHSE commitment to thehighest standards for thehealthandsafetyofourpeopleandcustomers,aswellasfortheprotectionoftheenvironmentinthecommunitieswhichweliveandwork.Wehaveobtainedall theenvironmentalpermitsandapprovalsnecessary to conductourbusiness,such as the pollutant discharge permit and the operating permit for loading and unloading of thedangerouschemicals.Wealsocomplywithallapplicableenvironmentallawsandhavenotbreachedanyapplicable lawsorregulationssinceour incorporation. Inordertoensurecontinuedcompliancewith the relevant environmental laws and regulations,wehave appointed specialisedpersonnel tooverseeenvironmentalprotectionrelatedmatterswithinourGroup.Apartfromcomplyingwithalltherelevantenvironmentallawsandregulations,wehavegoneastepfurther in order tominimise our impact on the environment by undertaking awide range of self-initiatedmeasurestobuildagreenerfuture.For instance,we install fireproofingwallsbetweenthemaintenance roomand thesewage treatmentplant;webuild thestorageshed for solidwasteandtemporaryshedforbarrels;wehavealsoinstalledgasrecoverysystemattheloadingstations.Inaddition,ourcompanieshavebeenawardedthefollowingaccreditationsandcommendations:! In2018,JiangyinForeversunwasrecognisedforitsexcellentHSEmanagementbytheCNOOCand
ShellPetrochemicalsCompanyLimited.
! InJanuary2018,YueyangHengyangwasappraisedasthe“FourBestEnterprise”bytheLogisticsIndustryofYueyangCity.
! In March 2018, Wuhan Hengyang was awarded the Excellent Enterprise by the ChemicalIndustrialDistrictofWuhanCity.
! In May 2018, Chongqing Hengyang was awarded the Integrity Prize by the Port Authority ofChongqingCity.
! In September 2018, the Company was awarded the first prize of the Science and Technology
AwardbyChinaFederationofLogisticsandPurchasing.! In September 2018, the Company was awarded the “Top 100 Enterprise of Petrochemical
LogisticsIndustry”byChinaFederationofLogisticsandPurchasing.
! In November 2018, the Company was awarded the Prize for Social Responsibility andCommitmentbyChinaFederationofLogisticsandPurchasing.
5|HENGYANG PETROCHEMICAL LOGISTICS LIMITED
! InDecember2015,JiangyinForeversunhasbeenaccreditedbyChinaQualityCertificationCentrefortheCompliancewiththeFoodSafetyManagementSystemstandards– ISO22000:2005andGB/T22000-2006.
! Both Jiangyin Foreversun and Jiangsu Deqiao hold the Environmental Management SystemCertificate issued by the China Quality Certification Centre for compliance with the standardsISO14001:2004 and GB/T 24001-2004, and have both successfully passed the annual audit forabovestandardsduringthepastfinancialyear.
! JiangsuDeqiaoandJiangyinForeversunhavealsoobtainedtheChemicalDistributionInstitute—
Terminals (“CDI-T”) attestation accredited by the Chemical Distribution Institute (London) inMarch2015andDecember2015respectively.
OurCommunityHengyang and its people embrace thephilosophyof givingback to the community by encouragingproactive involvement in theGroup’scorporatesocial responsibility (“CSR”) initiatives.Westrive tobearesponsiblecorporateneighbourandactivecontributorinourcommunity.In particular, we are a strong believer in quality education for all children. Accordingly, we havepartneredwithJiangyinCharityandJingjiangCharity,twonon-profitvoluntarywelfareorganisations,tosupportstudents fromlow incomefamiliesandempoweryoung learnerstobesuccessful,activecitizens. In 2018, Hengyang also made a donation of RMB50,000 and RMB55,000 to the JiangyinCharityandJingjiangCharityrespectively.TheGroupChairman,MrGuwasalsoawardedas“CharityStar”bytheJingjiangCityPeople’sGovernmentin2018.EconomicPerformanceEconomic performance is very important to a company’s stakeholders particularly its investors orowners,becausethisperformanceeventuallyprovidesthemwithareturnontheirinvestment.As a company listedonCatalist of SGX-ST,wepublish adetailed annual report comprisingour riskmanagement, corporate governance, and financial performance. For detailed information, pleaserefertothefinancialstatementsinour2018AnnualReport.CorporateGovernanceTheGroupstrivestocomplywiththebestpracticesofgoodgovernance,guidedbytheSingapore’sCode of Corporate Governance 2012 (the “Code”), throughout its operations to safeguard theinterests of all stakeholders. The Group recognises that good corporate governance processes areessentialforenhancingcorporatesustainability.PleaserefertotheAnnualReportpages17to37onthedetailsoftheSGXCodeofCorporateGovernance.RiskManagementAs of the date of the 2018 Annual Report, the Company does not have a Risk ManagementCommittee. However, the Management regularly reviews the Group’s business and operationalactivitiestoidentifyareasofsignificantbusinessrisksaswellasappropriatemeasurestocontrolandmitigate these risks. Themanagement of the Company (the “Management”) reviews all significantcontrol policies and procedures and highlights all significant matters to the Board and the AuditCommittee(the“AC”).
6|HENGYANG PETROCHEMICAL LOGISTICS LIMITED
WhistleBlowingPolicyTheCompanyhasputinplaceawhistle-blowingframeworkendorsedbytheAC,whereemployeesoftheCompanymay,inconfidence,raiseconcernsaboutpossibleimproprietiesinmattersoffinancialreporting or other matters and to ensure that arrangements are in place for the independentinvestigationsofsuchmattersandforappropriatefollowupactions.DealingsinSecuritiesIncompliancewiththerelevantrulesoftheCatalistRules,theCompanyhasdeviseditsowninternalcompliancecodetoprovideguidancetoitsofficerswithregardstodealingsinlistedsecuritiesoftheCompany by the officer. Directors and employees of the Company are advised not to deal in theCompany’s shareson short-termconsiderationsorwhen theyare in thepossessionofunpublishedprice-sensitiveinformation.The Company prohibits dealings in its shares by its officers and employees during the periodcommencingtwo(2)weeksbeforetheannouncementoftheCompany’sfinancialstatementsforeachofthefirstthree(3)quartersofitsfinancialyear,orone(1)monthbeforetheannouncementoftheCompany’sfullfinancialyearresults,asthecasemaybe,andendingonthedayoftheannouncementoftherelevantresults.SUSTAINABILITYTARGETSTheGroup has andwill continue to conduct our business in a sustainable and socially responsiblemanner.! Maintainaveragetraininghoursperemployeeperyearat2workingday.! Organiseatleastonehealthandwellnesslunchtalkorworkshopeveryquarter.! NameeveryJuneoftheyearastheSafetyMonthoftheGroup,andholdtherelevanteventsin
the Group, rolling out safety culture campaigns to advocate and educate employees andcontractorsonsafetybestpractices.
! Developagroup-wideoccupationalhealthandsafetypolicy.! Providetrainingtoallemployeesonpoliciesandpracticesrelatingtoethicsandanticorruption.! Developmorestrategiccommunityinvestmentsprogrammes.Goingforward,theGroupwillcontinuetoupdatetargetstoensurealignmentwithourstrategy.
ThisannouncementhasbeenpreparedbytheCompanyanditscontentshavebeenreviewedbytheCompany’ssponsor, CIMB Bank Berhad, Singapore Branch (“Sponsor”), for compliance with the relevant rules of theSingaporeExchangeSecuritiesTradingLimited(“SGX-ST”),thisbeingtheSGX-STListingManualSectionB:RulesofCatalist.TheSponsorhasnotindependentlyverifiedthecontentsofthisannouncement.ThisannouncementhasnotbeenexaminedorapprovedbytheSGX-ST.TheSponsorandtheSGX-STassumenoresponsibility for the contents of this announcement, including the correctness of any of the statements oropinionsmadeorreportscontainedinthisannouncement.ThecontactpersonfortheSponsorisMrYeeChiaHsing,Head,CatalistInvestmentBanking.Thecontactparticularsare50RafflesPlace,#09-01SingaporeLandTower,Singapore048623,Telephone:+6563375115.
HengyangPetrochemicalLogisticsLimited
Principalplaceofbusiness:1HengyangRoad,ShizhuangIndustrialPark,
NewHarborCity,Jiangyin,JiangsuProvince,PRC214446
Tel:(86)510-87880919Fax:(86)510-86880919-804
www.hyplc.com