The Report is printed on environmental friendly recycled paper Hanjiang Guotou Group Co., Ltd.

2019 Corporate Social Responsibility Report Corporate Social Responsibility Report 2019

Scan to see Add: No. 176 Shengli Street, Xiangcheng , , 扫码查看 corporate rating files Province, 官网手机版

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Web: www.hjgtjt.com/index.html Mission Serving Urban Development, Bearing the Responsibilities of SOEs

Vision To Build an Excellent State-Owned Capital Operation Group That Serves Urban Development

Values Loyalty, Responsibility, Expansion, Sustainability About the Report Contents

Reporting Scope Report References About the Report 01 Development Strategy 07

Hanjiang Guotou Group Co., Ltd. is the main reporter, and all of its 38 GB/T 36001-2015 Guidance on Social Responsibility Reporting Message from the Chairman 03 Corporate Governance 08 subsidiaries also included. Guidelines to the State-owned Enterprises on Better Fulfilling Corporate Social Responsibilities released by the State-owned About Us 05 CSR Management 09 Reporting Period Assets Supervision and Administration Commission of the State Business Segments 05 Feature Council (SASAC) HJGT Remains True to the Original Aspiration 13 This report covers the period between January 1, 2019 to December 31, to Serve High-Quality Urban Development 2019, with some dating back to previous years or referring to later years Guidelines on Corporate Social Responsibility Reporting for Corporate Culture 07 due to the continuity of business or project progress. Chinese Enterprises (CASS-CSR 4.0) issued by the Chinese Academy of Social Sciences

References Environmental, Social and Governance Reporting Guide (HK-ESG) issued by Hong Kong Exchanges and Clearing Limited In the Report, "HJGT" "the Group" "we" "our/us" refer to HanJiang Creating Values for Long-term Development by Committing to Our Mission to Serve Urban Guotou Group Co., Ltd. GRI Sustainability Reporting Standards (GRI Standards) issued by Stable Operations Developmen the Global Reporting Initiative (GRI) Abbreviations of some subsidiaries in the report: Sticking to Party leadership 17 Coordinating Urban Operation 23 Hubei Xiangtou Real Estate Co.,Ltd. Guidance on Social Responsibility (ISO 26000:2010) issued by International Organization for Standardization (ISO) Deepening the SOE reform 18 Providing Public Products and Services 29 Hubei Hanjiang Environmental Resources Co., Ltd. Prudent and sound operations 19 Investment and Operation of State-owned 34 Sustainable Development Goals (SDGs) Hanjiang Wise Conduct Technology Co., Ltd. Assets Xiangyang Xiangtou Energy Investment and Development Company Limited Information Source Datang Xiangyang Hydropower Co.,Ltd. Protecting Eco-environment Through Clean Pursing Stable and Long-term Progress by All information cited in this Report is from documents, statistical and Low-carbon Production Mutually Beneficial Cooperation Xiangyang Hengtai Health Industry Investment Co., Ltd. reports, and financial reports provided by employees and partners Xiangyang Zhitou Education Development Co., Ltd. of the Group. It is for the information disclosure of the Social Adopting Green Operations 39 Deepening Cooperation and Communication 51 Responsibility Report of the Group only, and not be used for Xiangyang Forestry Development Investment Co., Ltd. Engaging in Environmental Protection 43 Building a Responsible Supply Chain 54 commercial purposes. IndustriesPromoting Green Finance Xiangyang Water Resource Development & Investment Co., Ltd. Promoting Work Safety 54 Promoting Green Finance 47 XiangYang Housing Investment Co., Ltd. Customer Relations Management 55 Language Xiangyang Transportation Construction Investment Co., Ltd. is referred as XYTCIC This Report is available in both Chinese and English. If there is any inconsistency or ambiguity, the Chinese version shall prevail. XiangYang Municipal Construction Group Co., Ltd. Putting People First to Create a Wonderful Life Contributing to the Society to Build a Happy XiangYang Road ＆ Bridge Construction Group Co., Ltd. for Employees Homeland Release Form Xiangyang Energy Group Co., Ltd. is referred as Energy Group Guaranteeing Employees’ Rights and Interests 59 Supporting Poverty Alleviation 67 Xiangyang Security Service Controlling Corporation This annual social responsibility report is released in both print and online versions. The online version is available on the Group's Supporting Employee Development 61 Deepening Partner Assistance 69 Xiangyang Yuanye Landscape Architecture Group Co., Ltd. is referred as website at http:// www.hjgtjt.com/. Caring for Employees Physical and Mental 62 Providing Volunteer Services 70 Xiangyang Yuanye Group Co., Ltd Health Xiangyang Academy of Urban Planning and Design Xiangyang Communications Planning and Design Institute Co., Ltd. Xiangyang Small and Medium Enterprises Guarantee Company Ltd. Xiangyang Agricultural Industrialization Investment Guarantee Co., Ltd. CSR Honors 71 Expert Opinion 75

Xiangyang International Land Port Investment Holding Co., Ltd. Outlook 2020 72 Report Rating 77 Xiangyang Innovation Investment Co., Ltd. Content Index 73 Feedback 78

1 2 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

Message from the Chairman

The year 2019 marks the 70th anniversary of the founding of the People’s Republic of China and a crucial year for China to build a In 2019, we promoted ecological progress while improving people’s livelihood. Adhering to green and low-carbon operations, moderately prosperous society in all respects, and it is also a milestone in HJGT’s reform and transformation. Over the past year, we improved the environmental management systems of the headquarters and our subsidiaries and mobilized abundant funds and HJGT, under the strong leadership of Xiangyang Municipal Governmenand Municipal Party Committee, has promoted high-quality technologies to promote the development of the environmental protection sector. Throughout the year, the Group handled 160,000 tons development through deepened reform, built up development vitality with innovation, and devoted great efforts to social responsibility. of construction waste and planned for building a project library on the ecological protection and green development of the Xiangyang The outstanding performance of the Group received wide recognition and praise and wrote down a marvelous chapter of transformation section of the Basin with a total investment of RMB 35 billion. We insist on social contribution to build a harmonious and and development in the history of HJGT. happy homeland through joint efforts. In 2019, we invested RMB 190,000 in poverty alleviation, through which we helped 110 people In 2019, we raised the comprehensive strength of the Group to a new level. Our total assets exceeded RMB 150 billion, and net and achieved the goal of targeted poverty alleviation. Five villages in partner assistance relationship with the Group were lifted out of assets reached RMB 59.4 billion. Besides, we generated a revenue of RMB 11 billion and a total profit of RMB 5.4 billion, and created poverty after passing third-party national inspections. We also promoted the establishment of Group-level and subsidiary-level youth RMB 10.7 billion of comprehensive social value. Based on our outstanding performance, HJGT was rated AAA in the domestic entity volunteer service teams and organized employees to participate in volunteer services to help the elderly, the disabled, and left-behind credit rating, BBB by Fitch, and Baa3 by Moody’s. By then, HJGT became the only municipal-level SOE in Hubei Province to get AAA children, etc. Throughout the year, our volunteers provided 6,520 hours of services in total. in the domestic entity credit rating and be rated by international credit investment rating agencies, and HJGT’s ranking among urban In 2019, we further promoted strict governance over the Party through an excellent style of work. Through the campaign on the development and investment enterprises in municipalities, provincial capitals, and prefecture-level cities rose from 32 to 26. theme of “staying true to our founding mission”, we organized 60 members of the Group’s Party committee and heads of subsidiaries In 2019, we accelerated the construction of major projects in the city under the guidance our mission. Throughout the year, we to get trained in Yaozhihe Village, and the results of the education campaign were fully affirmed by the inspection team of the Municipal completed 99 investment projects with a total amount of RMB 24.4 billion, and worked to construct smart parking, central heating, Party Committee. Deeds of Yuan Wenbin, a role model of HJGT, were reported by authoritative media, such as the People’s Daily. We sewage treatment, and indemnificatory housing projects. We built and renovated 5,419 public parking spaces, exceeding the target set also improved the disciplinary inspection and supervision system and released the Interim Regulations on Disciplinary Measures for by the municipal government, launched the trial run of the township-level sewage collection and treatment project, and promoted related Employees to ensure the full coverage of top-down supervision of all employees. Based on the result of our re-examination of work, experience in the province. Anneng Thermal Power Group Co., Ltd. (Anneng Thermal Power) put its coal-to-gas project into production we reminded 69 employees not to break the rules and held 90 employees accountable for violations of rules, and we also enhanced ahead of schedule which won the recognition of the municipal government, completed and put into use the first phase of the central supervision of recruitment and selection of employees. heating project in Xiangcheng District which guaranteed heat supply for 20,000 households, kicked off the first phase of the project in When the tide is calm and the banks are broad, it is the right moment to set sail in the wind. In 2020, HJGT will follow the guide of Xi , and started the construction of 16,258 indemnificatory apartments among which 9,716 were completed. Jinping Thought on Socialism with Chinese Characteristics for a New Era. Under the leadership of Xiangyang Municipal Government and In 2019, we made significant progress in standardized management through great efforts.We further improved our systems and Municipal Party Committee, we will forge ahead along with the tide, and we will seize the day and live it to the fullest. We will compose organizational structure and established three business divisions of engineering construction, real estate, and transportation. To make a chapter of high-quality corporate development with great courage and firm determination, and make greater contributions to building financial management more standardized, we set up a settlement center to integrate capital management systems of 35 first-tier the “Growth Pole with Two Centers” of Xiangyang. subsidiaries. Besides, we optimized project management by introducing a full-lifecycle project management model and strengthened legal affairs and audit management by building up a database of legal service agencies and engineering settlement review agencies. Wu Jun We pressed ahead with property rights management and launched pilot projects of mixed-ownership reform in some subsidiaries. As Party Secretary, Chairman, HJGT information-based management of HJGT kept improving, we released a three-year action plan for digitalization. The People’s Armed Force Department was set up to become a benchmark for other business and non-business organizations within the province.

Xu Yong Deputy Party Secretary, Deputy Chairman, General Manager, HJGT

3 4 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

Hanjiang Guotou Group Co. Ltd., formerly named as Xiangyang City Construction Investment Operation Co. Ltd. (hereinafter referred as "CCI"), was founded in 2003. In 2017, according to Business composition Subsidiaries About Us the arrangements of Municipal Party Committee and Xiangyang Municipal Government, CCI Engineering merged more than 20 enterprises, public institutions, and commercial real estate, and formed Construction Engineering agent, engineering XiangYang Road Bridge Construction Group Co., ＆ Hanjiang Guotou Group Co. Ltd., the largest wholly state-owned enterprise in Xiangyang. At construction, design consulting Ltd., XiangYang Municipal Construction Group Co., Ltd., present, HJGT is taking urban comprehensive operator, public product and service provider and testing Xiangyang Xinyuexing Construction Project Management and state-owned capital investment operator as its orientation, and is making every effort Co., Ltd., Xiangyang Yuanye Landscape Architecture AAA to become an excellent state-owned capital investment and operation group with standard Group Co., Ltd., Xiangyang City Municipal Engineering corporate governance structure, reasonable asset structure, good industrial operation, Design Institute Co.,Ltd., Xiangyang Hanjiang Test Co., diversified financing channels and controllable debt risks, facilitating the "Growth Pole with Two Ltd. (HJT) Domestic entity credit rating Centers" construction of Xiangyang.

In 2019, the total assets of the Group exceeded RMB 150 billion, the net assets was RMB 59.4 billion, the operating income was RMB 11 billion, the total profit was RMB 5.4 billion, Environment and Business composition Subsidiaries BBB and the comprehensive social contribution was RMB 10.7 billion. Our ranking among urban development and investment enterprises in municipalities, provincial capitals, and prefecture- Energy Urban energy investment, Xiangyang Xiangtou Energy Investment and Development level cities rose from 32 to 26. We have won the honors of advanced unit in comprehensive energy development, electric Company Limited, Xiangyang Energy Group Co., Ltd., Fitch evaluation, excellent in deepening reform, and advanced enterprise in targeted poverty power development, water Xiangyang Forestry Development Investment Co., Ltd., alleviation in Xiangyang, etc. supply, heating, environmental Hubei Hanjiang Environmental Resources Co., Ltd., comprehensive management in Datang Xiangyang Hydropower Co., Ltd., Xiangyang Xiangyang. Water Resource Development & Investment Co., Ltd., Baa3 Hubei Hanjiang Environmental Resources Co., Ltd., Operating income Billion Net profit Billion Xiangyang Water Conservancy Planning and Design Institute Co., Ltd. Moody’s 2018 8.6 2018 3.5

2019 11 2019 5.4 Health and Business composition Subsidiaries Cultural Tourism Investment, construction and Xiangyang Zhitou Education Development Co., Ltd., operation of businesses such as Xiangyang Hanjiang Guotou Education Investment Co., Comprehensive social education, media, grain storage Ltd., Hubei Chengguang Culture Media Co., Ltd., Hubei Return on equity Return on total asset contribution % % % and elderly care. Hanjiang Grain and Oil Reserve Co., Ltd., Xiangyang Hengtai Health Industry Investment Co., Ltd. 2018 7.59 2018 3.03 2018 84

2019 10.50 2019 3.89 2019 107

Transportation Business composition Subsidiaries Investment and construction Hanjiang Wise Conduct Technology Co., Ltd., Xiangyang of urban traffic infrastructure in Transportation Construction Investment Co., Ltd., Xiangyang. Xiangyang Communications Planning and Design Institute Co., Ltd., Xiangyang Han River Port and Business Segments Shipping investment Co.,Ltd., Xiangyang Rail Transit Co., Ltd.

Housing Business composition Subsidiaries Finance and Business composition Subsidiaries Indemnificatory housing, XiangYang Housing Investment Co., Ltd., Hubei International Business Foreign equity investment, Xiangyang International Land Port Investment Holding reconstruction of shanty Xiangtou Real Estate Co., Ltd., Xiangyang Academy fund management operation, Co., Ltd., Xiangyang Innovation Investment Co., Ltd., town, commercial housing of Urban Planning and Design, Xiangyang Hanjiang financing guarantee, financial Xiangyang Small and Medium Enterprises Guarantee and leasing Engineering Design Institute Co., Ltd., Xiangyang leasing, investment operation Company Ltd., Xiangyang Agricultural Industrialization in Free Trade Zone, banking, Jiantou State-owned Asset Management Company Investment Guarantee Co., Ltd. Xiangyang Security commercial factoring, non- ， Limited. Service Controlling Corporation performing asset disposal, security escort, etc.

5 6 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

In compliance with the requirements of laws and regulations such as the Law of the People’s Republic of China on State-owned Assets in Enterprises and the Company Law of the People's Corporate Culture Corporate Republic of China, HJGT improves the corporate governance structure and standardizes its operation. The Group has established the Board of Directors and the Board of Supervisors, and Governance specifies the legal status of the Party Committee in the corporate governance structure, and treats the discussion of the Party committee as the main consideration for the decision-making of the Board of Directors and the management.

Vision Mission Values Hanjiang Guotou Group Co. Ltd. Serving Urban Development, Bearing To Build an Excellent State- Loyalty, Responsibility, the Responsibilities of SOEs Owned Capital Operation Group Expansion, Sustainability That Serves Urban Development

Strategy and Investment Party Committee Decision Committee

Nomination and Remuneration Committee Discipline Inspection Board of Directors Board of Supervisors Commission Budget Committee

Audit and Risk The Management Team Development Strategy Management Committee

Urban comprehensive operator Discipline Inspection Department Research Department Strategy Development and Investment Department Property Management Department Party and Mass Work Department Audit Department Administration Department Human Resources Department Finance Department Information Center Legal and Contract Department Land Development Department Project Department People's Armed Force Department Settlement Center Public product and services provider State-owned capital investment operator Three Roles

Activating and stabilizing the primary land market Forming industrial chain for public products and services Three Responsibilities Expanding financial business and seeking all financial licenses

International rating at investment grade Domestic credit rating AAA Note: In 2019, the headquarters of HJGT newly established the People's Armed Force Department and Settlement Center. Three Credits DFI (Debt Financing Instruments) Class-A Enterprise by the National Association of Financial Market Institutional Investors

To integrate hundreds of billions of yuan of assets To achieve hundreds of billions of yuan of investments Three Goals To form an industry worth hundreds of billions of yuan

7 8 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

As the largest municipal-level SOE, HJGT undertakes the unshirkable obligation to fulfill social CSR Management Strategy responsibility. The Group proactively identifies development opportunities and challenges and CSR continues to improve social responsibility management by formulating and promoting CSR Based on the internal and external development situation of the Group, we have identified the opportunities and challenges faced by the Group in management strategies. We have established a CSR organization system and carried out the the development, and actively formulated countermeasures to promote the Group to achieve sustainable development. Management identification and management of material topics, striving to create value for the government, customers, suppliers, employees, communities, and other stakeholders and promote the high- quality, sustainable development of the Group. Protecting ecological Creating long term value Serving urban development environment Opportunities and Challenges SOE reform Construction of livelihood projects Green operation Based on internal and external development, HJGT identifies opportunities for and challenges to the Group’s development and develops Risk prevention and control Quality and service management Green investment countermeasures to drive the Group’s sustainable development. Anti-corruption and clean Environmental charity governance The external environment Opportunities and challenges Actions of HJGT Party building management and industry trends

Reforming the authorized • It will promote SOEs to truly become • HJGT oriented upgrading towards high-quality development operation system for state- independent market players, enhance and accelerated the progress of pilot projects of state- owned assets and driving the overall function and efficiency of owned capital reform by strengthening the guiding role rational flow and optimized the state-owned sector, as well as of strategies, further optimizing the distribution of state- distribution of state-owned the preservation and appreciation of owned assets, building up core competitiveness, improving assets by focusing on capital state-owned assets systems, etc. management are the trend and it will promote state-owned assets in becoming stronger, better, and larger.

Promoting environmental • The implementation of the • HJGT promoted the construction of the Xiangyang National conservation in the Yangtze River Economic Belt strategy creates Reserve Forest Project. River Economic Belt a new platform for high-quality • HJGT launched township-level sewage collection and development. treatment projects and other environmental protection Supporting community Achieving mutual benefit Caring for employee growth projects. development

The development of the Han • The construction of the Han River • Closely focusing on the overall development of Xiangyang, Quality and service management Protection of rights and interests Poverty alleviation River Ecological Economic Belt Ecological Economic Belt creates new HJGT worked hard to concentrate more state-owned Product knowledge popularization Career growth Volunteer service momentum for green development, assets on the construction of urban infrastructure Responsible procurement Compensation and benefits and new trends in industrial projects as well as other industries and areas that are Work safety development create new dividends for key to the national economy, people’s livelihood, and the transformational and development. enhancement of Xiangyang’s competitiveness. Strategic cooperation

• Huge amounts of investments • HJGT developed the plan for building the project library are needed by conservation and on ecological protection and green development of the construction projects. Xiangyang section of the Han River Basin.

• Increasingly stringent environmental • HJGT issued the bond for ecological protection and green protection requirements put forward development of the Xiangyang section of the Han River higher standards for the selection of Basin. projects. • HJGT invested responsibly and took economic and social • Homogenized Competition with benefits into consideration while making investments. neighboring cities becomes more • HJGT adopted various methods to attract talented people intense. and provided a good growth platform for them.

Pushing the Belt and Road • It provides opportunities for HJGT to • HJGT launched businesses in the international finance Initiative forward explore in new sectors and build up sector. capabilities for further growth • HJGT participated in the construction of the China (Hubei) Pilot Free Trade Zone Xiangyang Area (Xiangyang Free Trade Zone).

9 10 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

Organizational Structure of CSR Management Social responsibility training

HJGT continuously improves CSR management and carries out standardized social responsibility activities on a regular basis. Besides, we We provide social responsibility training for heads of all departments and subsidiaries. The latest trends in social responsibility and the CSR have established the Social Responsibility Leading Group with a clear division of labor to promote CSR-related work in an orderly manner. The practice of first-class enterprises are shared on the training, with the aim to enhance employees’ CSR awareness and ability. organizational structure for social responsibility management comprises:

Social Responsibility Leading Group Social Responsibility Office Social Responsibility Working Group Stakeholder Communication The deputy general manager of HJGT serves as the It is set under the Group’s Strategy Composed of heads of departments and leader of the Social Responsibility Leading Group Development and Research Department, subsidiaries of the Group, it collects annual The Group strengthens the management of stakeholder communication, and responds to the expectations and demands of the government, while the director of the Strategy Development and and mainly coordinates the collection data required by the social responsibility suppliers, employees, local communities and other stakeholders. Research Department serves as the deputy head. of social responsibility materials and index system and supports the compilation They lead the establishment of social responsibility prepares annual social responsibility of annual social responsibility reports. indicators and the review and examination of the reports. Stakeholders Expectations to HJGT Our Response social responsibility report.

Social Responsibility Leading Group • Maintenance and appreciation of state- • Prudent management owned assets • Deepening SOE reforms Pushing ahead social responsibility work Work report • Anti-corruption and clean governance • Strengthening the prevention and control Social Responsibility Office • Compliance operation of clean governance • Advice and suggestions • Adhering to law-based governance Pushing ahead social responsibility work Work report The Government • Actively participating in the proposal of Members of the Social Responsibility Working Group Xiangyang Municipal People's Congress Department Discipline Inspection Department Property Management Project Department Labor Union Department Administration Department Party and Mass Work Department Human Resources Department Legal and Contract Audit Department Finance Department Department Investment Department Land Development Settlement Center Committee Communist Youth Information Center Teams Based in Villages Poverty Alleviation Work Subsidiaries

• Quality safety • Work safety • Technological innovation • Innovative products and services Customers

• Fair and open procurement • Open tender procurement • Honest operation • Timely performance • Common development • Supplier training Partners Materiality Management Topic identification and formation of topic database In accordance with the guidelines and standards related to Based on the business characteristics and operating conditions, we have social responsibility, such as the GB/T 36001-2015 Guidance identified and managed the material topics concerned by stakeholders, and made on Social Responsibility Reporting, Guidelines on Corporate • Energy conservation and emission • Energy conservation key disclosure and response in the report. Social Responsibility Reporting for Chinese Enterprises (CASS- reduction • Investment in environmental protection CSR 4.0) and Sustainable Development Goals SDGs and （ ） • Supporting green industry industry based on the daily operation of the Group, the key CSR topics • Green office • Development of green finance are preliminarily identified, and the CSR topic database of HJGT The Environment very high • Product knowledge • SOE reform • Construction of is formed. popularization • Work safety livelihood projects • Occupational health and safety • Occupational health and safety • Green operation • Targeted • Green investment Prioritization • Guarantee of wages and benefits management system • Public welfare activities poverty • Quality and service Through one-to-one interviews with relevant persons in charge

importance to the stakeholder • Employment and employee benefits alleviation management of departments and subsidiaries of the Group, we learn the • Career growth actual operation of the Group and systematically sort out the • Work-life balance • Staff training policy and promotion channel expectations and demands of stakeholders on the Group. From Employees • Democratic management • Staff activity the two dimensions of "importance to corporate development" • Labor Union management • Environmental charity • Party building • Strategic and "importance to stakeholders", the topics are prioritized. • Compensation and benefits management cooperation • Risk prevention • Protection • Voluntary services Review and confirmation of important topics • Participating in community and control of rights and • Targeted poverty alleviation After the above selection and evaluation process, a total of 18 development interests • Charitable donation • Responsible material topics are identified, which have been reviewed and • Supporting public welfare cause procurement • Career growth confirmed by the Group's Board of Directors and the Social • Volunteer activity Responsibility Leading Group. Related management practices Communities high importance to the sustainable development of enterprises very high are highlighted in the Report.

11 12 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

Feature HJGT Remains True to the Original Aspiration to Serve High-Quality Urban Development

The year 2019 marks the 70th anniversary of the founding of the PRC as well as the 16th year for HJGT to serve the development of Xiangyang Expanding financing channels for urban development City. Starting from the founding of Xiangyang City Construction Investment Operation Co. Ltd. (“CCI”), HJGT has continued lifted service through deepened reform capabilities with a focus on meeting the people’s demand for a better life. Dedicated to serving the high-quality, sustainable development of Xiangyang City, we proactively mobilize urban resources, provide high-quality public products and services for citizens, guarantee long-term, Xiangyang City is in a critical period of development now, which entails strong cooperation between operators of state-owned assets and the capital market low-cost financing support for the construction of Xiangyang City, and actively channel investors to invest in high-tech fields, projects critical to From 2003 to 2019 people’s livelihood, and environmental protection sectors. for an expanded scale of long-term, low-cost financing, thus providing financial support for the high-quality development of Xiangyang City. In 2017, with the support of the Xiangyang Municipal Government, HJGT was set up. Following the restructuring, total assets of the Group has exceeded RMB 100 billion along Promoting efficient and optimized allocation of urban resources with enhanced operations from RMB 393 million to 151.5 billion with a much higher credit score. Through market-oriented approaches, such Based on years of service experience, the Group has expanded the business scope to cover the development and operation of primary and as industrial guidance, property operation, and capital operation, the Group total assets secondary land markets. Our services reach to the whole industrial chain, including consulting, survey, design, investment, construction, provides strong support for the construction of major economic, livelihood- operation, and testing related to public products and public services. We also carry out financial businesses related to banking, guarantee, related, and environmental protection projects in Xiangyang, and helps to build financial leasing, asset management, and so on. In order to promote the high-quality development of Xiangyang City, we strive for franchise rights Xiangyang into “the provincial sub-center, the heartland of the Han River Basin, from zero to RMB 11billion and an important growth pole for the green development of the Yangtze River earnestly and allocate and operate urban resources efficiently. Based on market-oriented measures, we gather, mobilize, and operate urban operating revenue infrastructure assets, resource assets, and urban intangible assets accumulated during the process of urbanization. Economic Belt”.

As of December 2019 from zero to RMB 1.1 billion tax payment 12,341 26,308 households 78 106 parking spaces built and provided central townships covered by township- township-level sewage renovated in total heating services level sewage collection and collection and treatment treatment projects plants built

Milestones

The registered capital and total assets of CCI were 353 million and RMB 680 million when it Improving public products and services for a better life of the people 2003 was established in September 2003. Firmly undertaking the mission of meeting people’s ever-growing needs for a better life, the Group has continued to enhance the capability to provide better products and services for the government and the public in the fields of high-quality urban infrastructure, indemnificatory housing, health and elderly care, education, culture, and so on. As of 2019, the Group completed a large batch of major infrastructure projects The first-phase of corporate bonds of RMB 1 billion was issued successfully. and projects related to the people’s livelihood, including the Inner Ring Road, Industrial Park, Yueliangwan Wetland Park, Xijia Pool 2010 renovation project, shantytown renovation projects, the 3rd Han River Bridge, Tangbaihe Bridge, Shengli Street Overpass, Dongjin New District, Xiangyang Aerospace Industrial Park, and Yujia Lake Industrial Park. The Xiangyang Municipal Government and Municipal Party Committee merged a total of 18 2017 enterprises and five public institutions in batches to form HJGT.

As of December 2019 The Peoples Armed Force Department was set up to become a benchmark for other business and non-business organizations within the province.

HJGT was rated AAA in the domestic entity credit rating, BBB by Fitch, and Baa3 by Moody’s, RMB 125 billion 5,748 3.34 million square meters RMB 800 million becoming the only municipal-level SOE in Hubei Province to get AAA in the domestic entity invested in infrastructure indemnificatory housing projects total area of indemnificatory invested in cultural and credit rating and be rated by international credit investment rating agencies. projects completed the construction of housing projects undertaken by education projects 2019 main parts HJGT

13 14 Hanjiang Guotou Group Co., Ltd.

Creating Values Policy guidance Decisions and policies of the CPC Central Committee, the State Council, the Hubei Provincial Party Committee and the for Long-term Hubei Provincial Government on the reform of state-owned assets and enterprises, the management of local government debts, and the reform of public institutions require enterprises Development by Stable to continuously deepen the SOE reform and effectively enhance the vitality, control, influence and resilience of state- Operations owned assets.

CSR Topics

Party building management, Risk management and control, Anti-corruption and clean governance

Our actions

over RMB 150 billion RMB 59.4 billion total assets net assets

RMB 11 billion RMB 10.7 billion operating income comprehensive social value

15 16 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

Insistence on the Party leadership and strengthened Party building are the foundation of Reforming SOEs is a strategic step for the central government to implement the policy of Sticking to and the soul of SOEs, and are the glorious tradition and unique advantage of SOEs. HJGT Deepening the growing SOEs larger and stronger. In the process of advancing the SOE reform, it is necessary continuously strengthens the construction of Party organizations, which provides a strong to enhance the preservation and appreciation of state-owned assets and endow state- Party leadership guarantee for building an outstanding investment operation group of China. In 2019, HJGT won SOE reform owned assets with more functions. HJGT, with a modern enterprise system that features clear the title of the Advanced Unit of Municipal Government Units of Party Building in 2018. property rights, well-defined rights and responsibilities, separation of government functions from enterprise management, and scientific management, focuses on optimizing the use of capital, standardizing capital operation, improving operational efficiency, guaranteeing supplies, improving the quality and effectiveness of resource allocation, thereby promoting the Group’s transformation to high-quality development. In 2019, HJGT was nominated for the 2nd Hubei Reform Award and won the first place in the online voting.

Strengthening theories • Through intensive learning and training as well as self-study, we organize Party members to study Xi Jinping Thought Improving the 1 Promoting the integration 2 Establishing scientific 3 on Socialism with Chinese Characteristics for a New Era. In 2019, the Central Group of the Party Committee modern enterprise of state-owned management organized 12 intensive learning activities, and all Party members of HJGT, 963 in total, registered on the Xuexi system enterprises and assets mechanisms Qiangguo APP.

• The Group organized Party members to visit the “Remain True to Our Original Aspiration and Keep Our Mission Firmly • Adhering to the “Four Threes” • Based on our survey of the equity • Based on the market-oriented in Mind” exhibition of the Party’s archives and participate in the lecture on ethics rules. Besides, we organized Party development strategy, HJGT played of SOEs, state-owned assets, and employment and compensation members and employees to watch the documentary We Are Who We Are about the deeds of the outstanding Party the “three roles” earnestly and state-owned for-profit institutions systems, HJGT recruits senior member of Zhang Fuqing, as well as TV programs, such as Model 4 and Han River Makers Meeting. improved the corporate governance controlled by the Municipal Party managers for subsidiaries and forms structure; Committee and the Municipal a reasonable employee mobility Government that will be transformed mechanism with better choices of • We strengthened the top-level Consolidating organizations into enterprises, we have integrated promotion, opt-out option and salary. design of the modern enterprise 23 enterprises in the fields of • HJGT organized four special overhaul campaigns across the Group, and implemented the Regulation on the Work of system and promoted the • Relying on a market-oriented platform, design, construction, Party Branches. By organizing full-time and part-time secretaries of Party branches to participate in the due diligence standardized implementation of financing system, we open up finance, social service, etc. into training organized by the municipal government, the “Remain True to Our Original Aspiration and Keep Our Mission various systems; financing channels and build up an HJGT based on their functions and Firmly in Mind” rotational classes, and Party affair training, we strive to enhance Party building at all levels of Party all-around financial system covering • We set up the Settlement Center positioning. organizations. bank loans, corporate bonds of the to realize integrated management • We integrated commercial real National Development and Reform • Insisting on driving team building with Party building and focusing on the celebration of the 70th anniversary of the and allocation of funds for more estate and water groups, Aneng Commission (NDRC), inter-bank founding of the PRC, we organized employees of various departments to participate in a series of activities, such than 30 subsidiaries, initially Thermal Power, Hubei Culture & debt financing instruments, bond as the “the National Flag and Me” photo taking campaign and the singing competition. In order to enhance publicity forming a modern corporate capital Tourism Investment Group Co., guarantee plans of China Banking among young people, we opened the official WeChat account of the Youth League Committee of the Group to create management system. Ltd., and Xiangyang Jiantou Regulatory Commission (CBRC), a new front for young employees to communicate and display their talents. State-owned Asset Management as well as debt financing plans, Company Limited controlled by the asset management, and financial municipal government into HJGT. leasing of Financial Assets Improving conduct Exchange. We continue to promote

• The Group issued the Negative List for the Implementation of the Eight-point Frugality Code of the Central the implementation of the Han River Government, carried out self-correction and self-examination of violations, and criticized and educated officials who Eco-economic Belt project financing violated regulations in a timely manner; plan, and have developed the plan for building a project library on the • We organized panel discussions to analyze existing formalism and bureaucratism-related issues, and developed ecological protection and green measures to effectively reduce the burden on grassroots departments. development of the Xiangyang section of the Han River Basin.

• Focusing on national strategies and industrial policies, we have formulated different investment strategies for public welfare and business projects, aiming to achieve the integration of social and economic benefits.

17 18 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

HJGT insists on operating in compliance with laws and regulations and sticks to clean Political supervision Prudent and governance. By accelerating information-based development and improving the audit and supervision system, we strive to guarantee the stable and sound development of the Group. In order to realize the unification of thoughts, further clarify goals, and steadily promote the discipline inspection and supervision work, HJGT held the 2019 special meeting on improving Party conduct and clean governance, and compiled the 2019 Roadmap of HJGT for the Work sound operations of the Discipline Inspection Commission and the Measures of HJGT for Evaluating Discipline Inspection Work in 2019. We carried out special inspections on the implementation of the “Two Maintenances” (resolutely maintaining the core status of General Secretary Xi Jinping in the CPC Central Committee and the Party, and resolutely maintaining the authority and unified leadership of the CPC Central Committee), examined employees’ compliance with political discipline and rules, conducted special investigations and re-examinations of the selection and recruitment By strengthening the rule of law and the supervision by audits, enhancing the control of of employees, and strictly supervised the rectification of problems in 2019. Legal subsidiaries’ compliance with laws and regulations, and promoting legal compliance with compliance greater efforts, we hope to create an atmosphere within the Group where everyone pays Daily supervision attention to legal compliance. We have compiled and issued the Interim Provisions on Disciplinary Measures for Employees (Trial), which contains a negative list for all employees, so as to realize full coverage of the supervision, management and punishment of employees. To prevent corruption risks, we promote the establishment of a settlement review database through public bidding and improve bidding supervision and management methods. We Strengthening the rule of law supervise the project construction of our subsidiaries, the management and use of poverty alleviation funds, the payment of utility fees, and the HJGT has compiled and issued the Measures for Appraising Legal Compliance of Subsidiaries use of government vehicles, and tighten the accountability system. to guide subsidiaries to enhance law-based governance. In addition, we have formulated the 2019 Work Plan for Raising Public Awareness of the Rule of Law, organized five law Anti-corruption education popularization activities at the central group of the Party committee and on construction sites, Leading by example, secretaries of the Party Committee and the Disciplinary Committee of the Group had four collective talks with 140 middle- set up the “law popularization column” with information updated in real time, and promoted level officials, 58 newly promoted officials, and 183 new employees in 2019. The 20th publicity and education month for Party conduct and paperless study and examination around the city. The participation rate of the Group’s Party integrity was launched, where more than 690 employees including all personnel from the Group’s headquarters and middle-level officials from committee reached 100%, and that of departments and divisions was over 90%. subsidiaries paid visits to the Xiangyang and Xiangnan Prisons where they were warned against the consequences of violations of law and discipline. Moreover, 3,807 Party members watched educational films, and more than 100 middle and top officials received books such as Cases Warning Collection. The Group has also set up a column dedicated to “Discipline Inspection and Supervision” on the official website of HJGT to Strengthening audit supervision share the experience of improving Party conduct, upholding integrity and combating corruption.

Through the establishment of a five-in-one supervision system covering “supervision, discipline Overseeing discipline compliance inspection, audit, legal work, and inspection”, we have strengthened the supervision and management of departments and positions with centralized power, intensive capital, rich By scientifically applying the “four forms” while dealing with clues, we effectively guarantee the enthusiasm of employees to perform their tasks. We actively respond to issues concerned by the masses, and see to it that all violations against laws and disciplinary regulations in key areas resources, and assets, and strengthened internal audits, off-office audits, and audits of are thoroughly investigated and handled, such as corruption, bribery, and negligence of duty. In addition, we have deepened the integration of construction projects. punishment and education, and given full play to the educational value of each case to raise all employees’ awareness of discipline compliance.

Promoting compliance inspection We review contracts, decisions on major events, and legal advisory systems of our subsidiaries Promoting IT-based We give full play to new information technologies, such as cloud computing, big data, Internet for their compliance with laws and regulations, and guide each subsidiary to rectify problems, of Things, and mobile internet to improve corporate governance, pursue development and aiming to ensure that all procedures are developed according to law and risks are controllable. management transformation, and ensure scientific decision-making. Through concerted efforts in promoting As of December 2019, the Group conducted compliance inspections on ten subsidiaries. the application of information technologies, we strive to build a “smart HJGT” to realize the coordinated and healthy development of the Group and all business sectors.

In order to enhance the Group’s IT-based management, we have We have newly launched information systems, such as the In strict compliance with laws and regulations, such as Trademark Law of the People’s Republic formulated the HJGT IT-based Project Management Measures human resources management system, and optimized the (Trial), the HJGT Digital Development Three-year Action Plan, and financial system, the OA system, etc., to enable online data Respecting and of China, Copyright Law of the People’s Republic of China, Patent Law of the People’s the HJGT IT Expert Database Management Measures (Interim). collection and analysis, strengthen the coordination among Republic of China, and Anti-Unfair Competition Law of the People’s Republic of China, we have protecting intellectual various departments within the Group, and improve work strengthened the administration of intellectual property rights, such as patents, copyrights, and efficiency. property rights trademarks, and taken legal actions to protect intellectual property rights. At the same time, the Group fully respects the intellectual property rights of others, encourages and protects fair Improving IT-based management Enhancing in-house IT application competition, prohibits unfair competition, and makes every effort to protect the legitimate rights and interests of others from infringement. Building smart platforms for business sector Strengthening external cooperation

We steadily promote political oversight, daily supervision, internal inspections, and conduct To promote the smart development of various businesses, we We have signed a strategic cooperation agreement with have developed the smart parking management platform and the Huawei Technologies, and established channels and platforms Preventing corrupt improvement. Focusing on the prevention and control of risks in key areas, we strictly smart water management platform of Xiangyang City, the ERP for communication with leading IT companies, such as Inspur investigate violations against disciplinary regulations and laws in the fields of financial behaviors system for Xiangyang Jiantou State-owned Asset Management Group and China Comservice, thus cooperating with external guarantees, asset leasing, and project construction, striving to promote high-quality Company Limited, as well as the asset management system for experts to promote IT-based management within the Group. development of discipline inspection and supervision work in HJGT and create a clean political land reserves of the Land Development Department environment.

19 20 Hanjiang Guotou Group Co., Ltd.

Committing to Our Policy guidance The 19th CPC National Congress points out that China’s economy has already begun shifting from a stage of rapid Mission to Serve growth to one of high-quality growth, and requires state- owned enterprises to take the lead in China’s high-quality development through reform and innovation. As the Han River Urban Development Eco-economic Belt Development Plan has been elevated to the status of a national strategy, HJGT is striving to play a key role in the construction and operation of urban infrastructure projects, thereby serving the high-quality development of Xiangyang City.

CSR Topics

Construction of livelihood projects, Quality and service management

Our actions

5,419 9,257 public parking spaces pieces of data of parking built and renovated in 2019 spaces in the urban area

5,748 RMB 70.7 billion indemnificatory housing invested in the projects completed the reconstruction of construction of main parts shanty towns

21 22 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

HJGT is committed to serving the city as well as local industries and citizens through efficient Deepening the application of the smart Coordinating allocation and intensive operation of various urban resources. By drawing on the experience parking management platform of other regions in the construction of smart cities, we actively promote the establishment of Urban Operation management platforms, such as smart car parking and smart water services to facilitate the Drawing on innovative technologies, such as the construction of a smart Xiangyang City. Internet, Internet of Things, cloud computing, big data, etc., smart parking lots break information The 2019 Roadmap for Improving People’s Livelihood of Xiangyang Municipal barriers of traditional parking lots, and maximize Government puts forward the clear target of “building and renovating 5,000 the use of parking resources in tackling the parking public parking spaces in the central urban area”. problem by establishing a systematic and people- Smart Smart parking oriented intelligent parking management platform. In 2019, In 2019, transportation In 2019, Hanjiang Wise Conduct Technology Co., Ltd., focusing on “Internet Plus Car Parking”, made Promoting intelligent transformation of parking lots every effort to promote the construction of the smart 5,419 9,257 parking spaces car parking management platform. The platform public parking spaces connected to the database of public parking In 2019, Hanjiang Wise Conduct Technology Co., Ltd. vigorously promoted the construction of accesses and manages the data of on-street built and renovated spaces in the central city the car parking lot project of the Moon Bay (Yue Liang Wan) Park, the underground parking lot parking spaces, off-street parking lots, parking lots project for the Xiangyang No.4 Middle School Relocation Project, and the intelligent multi-storey in tourist areas, multi-storey car parks, and charging including 11 enclosed parking lots car park in the People’s Park. Specifically, the parking lot project in the Moon Bay Park consists piles (stations) in urban Xiangyang areas, and 419 with a total of 2,228 parking spaces of a ground parking lot and an underground one, which provide a total of 681 parking spaces. shares information with government departments, more than the target and 7,029 on-street parking spaces The underground parking lot project for the Xiangyang No.4 Middle School Relocation Project such as traffic police, the urban management, the covers an area of 6,648 m2, with 190 parking spaces planned. The intelligent multi-storey car smart office, etc. park in the People’s Park will enable car drivers to park and leave within 90 seconds by using their smart devices. The Group will continue to accelerate the construction of multi-storey car parks and ecological parking lots to further satisfy the transportation and parking needs of citizens in Xiangyang.

The smart car parking management platform

Providing intelligent value-added services Interior of the multi-storey car park in the Exterior of the multi-storey car park in the People’s Park The “Xiangyang Parking” mobile phone application provides basic features such as searching People’s Park for parking spaces, paying the parking fees, etc. Xiangyang citizens can access features of the smart parking management platform through the APP, the Official WeChat Account of Xiangyang Smart Parking, as well as its service window and mini program on Alipay. In 2019, new versions of the “Xiangyang Parking” APP were launched on Apple’s App Store and mainstream Android app stores.

As of the end of 2019,

P 10,576 users over 30,000 users downloaded and registered on the followed its Official WeChat Account QR code of the Official “Xiangyang Parking” APP WeChat Account of Xiangyang Smart Parking

23 24 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

Featured Operations Smart lampposts Smart charging Building a smart water management platform to serve the delicacy management of urban sewage. The year 2019 is the epoch-making year for the commercialization of Speeding up the construction of new infrastructure is an The township-level sewage collection and treatment project in Xiangyang, centering on Xiangyang 5G technology. Driven by the construction of new smart cities and 5G important means to expand effective investments and promote City, includes106 new township-level sewage treatment plants spread across nine counties, cities, commercialization, smart lampposts are set to integrate information and the development of the new economy. Hanjiang Wise Conduct and districts. Integrating production supervision, equipment monitoring, scientific inspections, big communications technology with traditional urban infrastructure. Therefore, Technology Co., Ltd. plans to build about 239 charging piles 106 data analyses, and smart decision-making, and under the three-level management model of “center- Hanjiang Wise Conduct Technology Co., Ltd. planned ahead, and after and supporting facilities in urban Xiangyang in 2020, and Newly built township-level sub-centers–plants”, the platform realizes intensive monitoring, scientific scheduling, and delicacy sewage treatment plants carrying out in-depth research into demonstration projects of urban smart has already completed the basic project planning, feasibility management of the comprehensive township-level sewage treatment system in the city. By now, the lampposts, the company selected the Road and the Beijie Street report, and site selection. With the rapid development of the township-level smart water management platform of Xiangyang City has been completed, the 106 to pilot smart lampposts in Xiangyang City. In the future, the company will new energy vehicle industry, the company is actively exploring sewage treatment plants administered by the municipal government have entered the commissioning add more functional modules, such as sensors, video surveillance, intelligent the development of smart charging piles, aiming to provide 9 and trial operation stage, the municipal center and seven county-level sub-centers of the system have interaction, and charging facilities to municipal lighting facilities to make vehicle charging stations that are more convenient, safer, and Counties, cities, and districts been completed and put into use which can get access to over 95% of data of all plants. street lampposts an important part of the urban area network, thereby saving more reliable to meet the rapidly growing need and promote served urban land resources while meeting the need for 5G signal coverage. smart travel and green development.

The township-level sewage collection and treatment project in Xiangyang is one of the “Four The smart water management platform Smart Threes Major Ecological Projects” of Xiangyang City. The project effectively solves problems Water Services faced by Xiangyang in township-level sewage treatment and creates a new path for sewage Value Creation treatment that is replicable and sustainable, creating a “Xiangyang Model” that takes into account both economic and social benefits. The township-level sewage collection and treatment project, as a vital project in Xiangyang City, plays a significant role in improving the water ecology of Han River and local living conditions. After completion, the project will guarantee centralized collection and treatment of sewage Project Scale Fancheng District (6) in neighboring towns and villages, which will effectively improve the ecological and living environments of local areas, boost the quality of life 1 town 5 residential areas and enhance the sense of happiness of residents, and create a sound investment atmosphere for local areas. Furthermore, it will optimize the City (11) The project has 140 construction sites economic structure and promote the economic development of related towns and villages, thus providing strong guarantees for rural revitalization. 6 counties spreading across 11 counties (cities, districts) 5 residential areas Xiangcheng District (5) At the same time, the project will make positive contributions to local urbanization in terms of poverty alleviation-based resettlement, relocation of 3 towns and 78 towns in Xiangyang City. Hubei 2 residential areas villages for land acquisition, and incorporation of villages, as well as to the “toilet revolution”. Laohekou Hanjiang Environmental Resources Co., Ltd. City takes charge of the investment, construction, Gucheng County (12) and operation of 119 construction sites 9 towns 3 residential areas Gucheng City under the administration of the municipal Fancheng County District government, which, with RMB 5 billion of Xiangcheng investment in total, have a sewage treatment Baokang District County capacity of 88,500 tons per day and serve Nanzhang 1.23 million people. After completion, the County Yicheng project will guarantee a comprehensive City Zaoyang City (9) 5 counties township-level sewage treatment system 4 residential areas featuring sound facilities, supporting pipeline networks, online monitoring, and Yicheng City (18) stable operation. By the end of 2019, the 8 towns 10 residential areas construction of the main pipeline network and (16) 10 towns (12 construction sites) major facilities of plants in all towns involved (19) 4 residential areas 9 towns in the project and the project has been fully 10 residential areas put into commissioning. Locations of 119 construction sites under the administration of the municipal government

25 26 汉江国有资本投资集团有限公司Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

Xiangyang Hengtai Health Industry Investment Co., Ltd., based on an information platform, Committed to making great contributions to building the “Growth Pole with Two Centers” of Smart creates a smart elderly care system for senior citizens living along at home as well as those in International Xiangyang, HJGT continues to increase investments in key fields and vigorously promotes the Elderly Care communities and elderly care centers. It is committed to providing real-time, fast, efficient, and Trade implementation of major projects. smart elderly care services for the elderly.

The nursing home of Hengtai Yueju community comprehensively promotes smart elderly care

The nursing home of Hengtai Yueju community is the first community-based elderly care institution project of Xiangyang Hengtai Health Industry Investment Co., Ltd. With a gross floor area of approximately 3,100 m2, the project will be built into a model of community- based elderly care projects that provide high-quality and diversified services for the elderly and surrounding residents. Supported by world-leading providers of smart elderly care services and a smart elderly care system, the project forms a visual interface based on comprehensive analyses of collected data of the elderly, thereby providing a complete set of solutions for elderly care institutions. Taking into account the living habits and environment of the elderly, the project sets up multiple monitoring and alarm devices, such as smart gateways, activity detectors, emergency pagers, etc., and provides smart wearable devices, such as badges, bracelets, and smart mattresses, to realize real-time monitoring of the living conditions of the elderly and give early warnings in emergent situations. Nursing staff of the institution wear bracelets and are supported by physical examination devices, display devices, and so on, which record daily care and physical changes of the elderly in real time, and generate tailor-made care plans for each of the elderly. Besides, family members of the elderly can check the daily care plan and service status directly through WeChat. The project guarantees customized services and a comfortable and safe living environment for each elderly person through the smart elderly care system and hardware facilities, while improving the overall service efficiency.

Xiangyang Bonded Logistics Center is a vital carrier and core platform of Xiangyang Free Trade Zone. With functions of a port, the center mainly engages in bonded warehousing, international logistics and distribution, simple processing and value-added services, inspection and quarantine, import and export, and entrepot trade. At the forefront of the reform of Xiangyang Free Trade Zone, Xiangyang Bonded Logistics Center further contributes to an increased degree of foreign trade dependence (FTD) of Xiangyang City and enhances the competitiveness of Xiangyang in the region.

Actively responding to the Belt and Road Initiative and the Yangtze River Economic Belt development strategy, and to accelerate the development of the export-oriented economy of Xiangyang City, Xiangyang Municipal Government has made great efforts to build an international logistics corridor in accordance with the principle of “government guidance, enterprise operation”, with the aim to provide a comprehensive service platform for international logistics. As a major move of Xiangyang City to reduce logistics costs, lighten the burden on enterprises, and boost the development of an export- oriented economy, the corridor, taking full advantage of Xiangyang’s role as a unique railway hub, will link seamlessly with freight trains of In the future, Xiangyang Hengtai Health Industry Investment Co., Ltd. will fully embed the smart elderly care system into the project design China Railway Express, including -Xinjiang-Europe (Han Xin Ou) process. Based on different elderly care models and scenarios of home-based, community-based, and institution-based elderly care, the freight train, -Xinjiang-Europe (Yu Xin Ou) freight train, and company will resort to different smart hardware facilities and solutions to aggregate related data onto the smart elderly care platform. Based on Chang’an freight train, strengthen cooperation between Xiangyang with the collection and analysis of data of the health of the elderly, service processes, and institutions’ operations, the company provides support for Yangluo, , Yantian, etc., and promote railway-sea, highway- the selection of types and locations of elderly care service providers. water, and railway-railway multimodal transportation, thus contributing to the efficient operation of export-oriented logistics corridors of Xiangyang, mutual promotion between logistics and local industries, and economic development of Xiangyang and even Hubei Province.

27 28 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

The Group strives to increase the supply of public products and services to meet the growing Reconstruction of shanty towns Providing Public needs of Xiangyang people for a better life, and makes comprehensive arrangements and implements targeted measures in the fields of housing, urban infrastructure, education, and elderly care. The reconstruction of shanty towns is a project launched by the Xiangyang Municipal Products and Government for the purpose of renovating dilapidated and old houses and improving the housing conditions of the poor. In 2019, Xiangyang Housing Investment Co., Ltd., through Services collaboration with the government of each district, promoted 18 shanty town renovation projects in Chengnan, the second phase of Shanshui Tanxi project, Laiyue, Dongjin Railway Station, Guanjiaxiang, and Binjiang East Road, which have a total area of 11.66 million m2, Public products Indemnificatory housing projects involve the resettlement of 95,195 households, and a total investment of RMB 70.7 billion.

Xiangyang Housing Investment Co., Ltd. undertakes municipal-level indemnificatory housing projects in Xiangyang. In line with the concept of “putting people’s livelihood first, prioritizing housing guarantees” and with the objective of “creating high-quality products to benefit the people’s livelihood”, The company delivers high-quality housing projects to improve urban functions and provide residential guarantees for the people.

In 2019, Xiangyang Housing Investment Co., Ltd. promoted By the end of 2019

13 24,211 3.34 million m2 5,748 indemnificatory housing apartments included total area indemnificatory housing projects projects completed the construction of main parts

The real scene of the Xiangcheng Shanty Town Resettlement Housing Project (Riverside of Hanjiang River)

Urban infrastructure is the material basis for the normal operation and healthy development Infrastructure construction of a city, and it plays an important role in improving the living environment, enhancing the comprehensive carrying capacity of cities, increasing the efficiency of urban operation, steadily advancing new-type urbanization, and contributing to the construction of a moderately prosperous society in all respects. The Group has continued to promote the construction of highways and bridges in Xiangyang City, and promoted the rapid development of the regional economy by creating a better urban environment, improving the current status of traffic between urban areas, and alleviating regional traffic pressure.

Longqi Road project

The 9-km Longqi Road project connects Scenic Area in Xiangcheng District with Qili Mountain Scenic Area in Nanzhang County. After completion, the straight line that links Longzhong Scenic Area, Shimen Main Canal, and Qili Mountain Scenic Area Hengzhuang Indemnificatory Housing Project (Zhu Meng, Heng Zhuang Yuan) will shorten the travel time to less than two hours, Project in Fancheng District and it will play a significant role in improving the regional road network, promoting the rural economy, With a total investment of about RMB 3.6 billion, the project has a gross floor area of 1.087 million 2m . After completion, it will provide contributing to the collaborative development of 6,577 public rental apartments and 1,795 houses, and will become the largest affordable housing project with the most complete Xiangyang, , and Nanzhang, and boosting supporting facilities in Xiangyang City. the leapfrog development of the tourism industry in Xiangyang.

29 30 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

Central heating supply in urban areas

In 2019, to allow more citizens, enterprises, and institutions to enjoy a high-quality life supported by central heating, Xiangyang Xiangtou Energy Investment and Development Company Limited (Xiangtou Energy) continued to accelerate the implementation of urban central heating projects, and actively promoted the construction of the second phase of the central heating project in Xiangcheng District, Xiangyang which includes 24.7 kilometers of double- circuit pipelines. By then, the number of residential users covered by the newly-built central heating project exceeded 20,000. Since the takeover of Anneng Thermal Power, central heating services of Xiangyang City Central Heating Steam Water Heat Exchange Station Xiangyang Xiangtou Energy Investment and Development Company Limited have covered 64 communities, 46 industrial users, 12 publicly owned construction organizations, and 25 commercial 2 The reconstruction project of Fanxi New District Section of Dengcheng Avenue project users, with a total area of 3.65 million m . (Xiangyang – Expressway to Zhutiao) The Group continues to improve the supply of public services. We actively develop healthcare With a total length of 1.9 kilometers, the project is a key urban construction project in Xiangyang City. The project covers road, Public services businesses, including medical care, elderly care, and health complexes, as well as cultural drainage, strong and weak electricity, traffic, and lighting works, as well as other supporting facilities, and will contribute to the tourism businesses, such as education, culture, and sports, advertising and media, etc., striving improvement of the urban environment, enhancement of the influence of Xiangyang City, and better traffic between urban areas. to meet the growing needs of Xiangyang people for a better life.

The east-west axis project The New Citizen Service Center project

The east-west axis project is connected to the The New Citizen Service Center project, Xiangyang-Jingzhou Expressway in the west and covering 2.8 hectares of land and with a gross the East Outer Ring Expressway in the east. It floor area of 72,133 m2, was put into use at is a transportation project that runs through the the end of December 2019. The shape of the city from east to west and connects Fancheng building resembles the hat of , a District, Yuliangzhou and Dongjin New District, Chinese politician and military strategist who making it more convenient to reach the eastern used to live in Xiangyang in ancient times. Inside part of the city. The project is reputed as a “golden the building, there are citizen reception desks, belt” project that effectively promotes the rapid a base for innovation and starting businesses development of the regional economy and ease open to the public, nursing rooms, accessible regional traffic pressure. toilets, and other convenient facilities, providing citizens with a convenient and comfortable environment within the center.

The Panggong Bridge project

The 2.6-km Panggong Bridge starts at the intersection of Changzheng Road and Daqing The Xiangyang Public Fitness Center Road in Fancheng District and ends at the project intersection of Panggong Road and Xingguang The Xiangyang Public Fitness Center project Avenue in Xiangcheng District. The main part of involves a total investment of RMB 300 million. the bridge has a three-tower cable-suspended Covering 7.6 hectares of land and with a structure formed by steel plates with a span 2 gross floor area of over 50,000 m , the center of 378 meters. It intersects with Daqing Road is qualified to host international tennis events and Panggong Road, and spans Jiefang Road, and serve as the sub-station of international Hanjiang Avenue, Binjiang Road, and Jianjin competitions. Road, which effectively eases traffic pressure within the city and enables residents to travel more conveniently.

31 32 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

Through market-oriented approaches, such as industrial guidance, property operation, Investment and and capital operation, HJGT makes great efforts to increase the scale of state-owned assets for greater profits and create synergies between different resources. In addition to Operation of prioritizing social benefits, the Group also takes into account economic benefits to ensure the preservation and appreciation of state-owned assets. State-owned Assets

Based on annual work strategies and targets, the Group actively builds a credit system Strengthening comprising international ratings, domestic ratings, and bank ratings, and continuously credit rating deepens the awareness of active credit management.

International rating Domestic rating Bank rating The sports-oriented kindergarten co-established by HJGT and Dangdai Youth HJGT proactively connects with international HJGT conducts in-depth research on By comprehensively studying ratings credit rating agencies, such as Moody’s, domestic credit rating methodology and rating methods of the China The sports-oriented kindergarten co-established by HJGT and Dangdai Youth, with a gross floor area of over 2,000 m2, can Fitch, and China Chengxin (Asia Pacific). In and tracks ratings of domestic entities, Development Bank and local banks, accommodate 180 children for 8 classes in total. It provides children with comprehensive, high-quality, and characteristic education 2019, HJGT was rated BBB by Fitch and such as China Chengxin, on related the Group intensifies communication services, as well as a green, healthy, safe, and free space for growth. Baa3 by Moody’s, and became the only debts. The Group became the first with banks and improves relevant municipal-level SOE in Hubei Province to municipal-level enterprise in Hubei indicators with clear focuses, striving to get AAA in the domestic credit rating and be Province to be rated AAA by Golden strengthen the bank rating system. rated by international credit investment rating Credit Rating, effectively enhancing the agencies, further strengthening the Group’s Group’s influence and recognition in the bargaining power in the capital market and domestic market. influence in the overseas market.

The Municipal Culture and Art Center of The Municipal Science and Technology Museum

Xiangyang project of Xiangyang project In 2019, HJGT actively explored innovative financing methods, further strengthening The Municipal Culture and Art Center of Xiangyang, located The Municipal Science and Technology Museum of Xiangyang, Improving the the Group’s financing capability. By unblocking financing channels and building a multi- in Dongjin New District, is one of the top ten public service located in Dongjin New District, has a gross floor area of financing system dimensional and all-round direct financing system, we broke through barriers between facilities within the district. With a gross floor area of 52,000 35,268 m2 and involves a total investment of RMB 500 million. special bonds, direct financing through financial products, and bond guarantee programs, m2, the project is divided into four major functional areas and The project is planned to be divided into four functional areas, and successfully issued RMB 4.5 billion inter-bank debt financing instruments. involves an investment of RMB 200 million. The construction namely the exhibition and education area, the public service is planned to start in September 2020, and the center will be area, the business research area, and the management completed and opened in September 2021. guarantee area. The construction started in July 2019, and the Improving guarantee management and project will be opened in July 2021. Research on comprehensive credit lines increasing financing varieties By sorting out comprehensive credit lines of China Based on innovative financing mechanisms and by Development Bank and local banks, HJGT seeks stronger unblocking inter-bank financing channels as well as links with support from banks. Beijing Financial Assets Exchange and CBRC, HJGT aims to Xiangyang Security Service Controlling 1 2 build a multi-channel and all-round direct financing system. Corporation (Xiangyang Security) sets 3 4 117 routes for armed escort of cash Improving guarantee management Optimizing the disposal of non-performing assets and is equipped with 135 special By sorting out various banks’ methods for calculating By drawing up a plan for disposing of non-performing cash transit vehicles. The company is guarantee capacities as well as the actual guarantees of the assets with over-allocation as the core and approved by the building a regional cash handling center Group and the subsidiaries, we have established a guarantee executive meeting of the Xiangyang Municipal Government, and a multi-functional financial service account to track guarantees in real time, improve the we strive to reduce non-performing loans of financial center. guarantee management system, strictly control debt risks, institutions in Xiangyang City and optimize the business and and regulate guarantee behaviors. financial environment.

33 34 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

To promote the rational distribution of investments and optimize investment strategies, HJGT Through periodic dynamic inspections and comparative analyses, the Group conducts Whole-process management Promoting has compiled the Interim Measures for Investment Management and Interim Measures for comprehensive and multi-level management and control of investment projects in the of investments responsible Financing Management to guarantee standardized, institutionalized, and scientific decision- research of investment policies and backgrounds, the formulation of investment plans, making and management of investment and financing issues, and improve investment and the supervision of investment processes, and post-investment evaluations. investments financing efficiency.

Standardizing investment Focusing on equity investment, fixed asset investment, and financial investment, the Group strictly abides by requirements and principles stipulated in the Interim Measures for Investment principles Management during the regulation of investment work. Management of Standardized Post-investment investment plans and management of management of decisions investment processes subsidiaries Optimizing the business layout with a focus on main businesses In accordance with national, provincial, municipal, and industrial policies as well as The Group studies government HJGT has compiled the Interim HJGT has formulated the Post-investment corporate development strategies, HJGT vigorously cultivates and develops businesses investment and financing Measures for Investment Management Measures to standardize post- in the strategic emerging industries. systems, transformation plans for Management and Interim investment management of the Group and the first- urban investments, government Measures for Financing tier subsidiaries, put forth detailed requirements for budget and debt management Management to guarantee the daily management, exit management, and post- mechanisms, special bonds, standardized, institutionalized, evaluation management of investment projects, and Standardizing operations in line with the principle of equal power for etc., as well as relevant policy and scientific decision- analyze and evaluate the operation of post-investment equal responsibility documents to guide scientific making and management projects and the overall investment efficiency. We HJGT regulates decision-making and approval procedures of investments in accordance investments. Besides, at the of investment and financing have also formulated the Administrative Measures for with relevant laws and regulations, and adheres to the principle of simultaneous capital beginning of each year, the Group issues, and improve investment the Articles of Association of the HJGT and created contribution and equal shares and equal rights. and all subsidiaries develop and financing efficiency. The a template to guide our subsidiaries to compile annual investment plans based Investment Department strictly and revise their articles of association. In 2019, we on the annual strategic plan, supervises subsidiaries’ reviewed and voted on decisions made by the board Classified investments to realize balanced profits and incorporate the plans into cooperation with partners and of shareholders and directors of ten subsidiaries, For operating investment projects, we prioritize benefits, and for public welfare-oriented the comprehensive budget the progress of projects, as well including Hubei Culture & Tourism Investment Group investment projects, we prioritize social benefits and functions while taking account of management system. In addition, as their prominent problems, Co., Ltd., Hubei Communications Investment Hanshi economic benefits. we require project departments rectification measures, and Expressway Operations Management Co., Ltd. and to submit their due diligence suggestions. Hubei Bank, completed the formulation of the articles reports, feasibility study reports, of association of five public institutions transformed and approval documents to into enterprises, three enterprises that have Acting within the Group capabilities and controlling risks strictly the Investment Department for introduced the corporate system, and the revision of The scale of investment should be commensurate with the capital strength, financing approval and filing. the articles of association of Xiangyang International ability, liabilities, management level, industry experience, and resilience of the investing Land Port Investment Holding Co., Ltd., Xiangyang entity. Investment risks should be strictly controlled. Road & Bridge Construction Group Co., Ltd., Xiangyang Transportation Construction Investment Co., Ltd. (XYTCIC), and so on.

Launching the Zhongzhen Hanjiang Equipment Manufacturing Project to boost the development of the intelligent equipment industry

The Zhongzhen Hanjiang Equipment Manufacturing Project jointly launched by Yicheng Municipal Government and CRRC is one of the city’s eight key projects. Relying on CRRC’s strong technologies and rich experiences in the manufacturing of rail transit equipment, the Project will be built into an urban rapid transit equipment base with ART/SRT as the main models. On April 26, 2019, Xiangyang Innovation Investment Co., Ltd. signed the Capital Increase Agreement with Yicheng Chuye Development Holding (“Yicheng Chuye”) and Yicheng Construction Investment Management Co., Ltd. to increase investment in Yicheng Chuye by RMB 700 million in different batches. In April 2019, Xiangyang Innovation Investment Co., Ltd. completed the increased investment of RMB 200 million in the first phase of the Yicheng Chuye project in accordance with the Agreement to facilitate the smooth implementation of the project. After completed, the project will promote intelligent transportation equipment, core components, and upstream and downstream supporting sectors of Xiangyang City, contribute to a smart equipment manufacturing industry with a total investment of tens of billions of yuan, and pool resources for the development of the smart equipment sector.

35 36 Hanjiang Guotou Group Co., Ltd.

Policy guidance Protecting As the ecological environment protection is included in national strategies, the government clearly proposes to “implement the strictest possible systems for environmental protection”. It Eco-environment is the key path for HJGT to achieve sustainable development and enhance competitiveness by promoting the integration of environmental protection in the Han River Basin with energy revolution, green production and lifestyle, and economic Through Clean and transformation and development. Low-carbon Production CSR Topics

Green operations, Green investments, Environmental charity

Our actions

160,000 tons 969,600 kWh of construction waste photovoltaic power generation handled capacity

tons of RMB 14.54 million 255.5 standard coal worth of recycled building approximately saved compared materials with traditional thermal power generation

RMB 11.8 million 631.45 tons cumulative sales generated carbon dioxide emissions reduced

The Group supported the restoration project of the entire ecosystem and scenic belt along the Xiangshui River, with

2.61 million m2 area covered

37 38 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

HJGT emphasizes green and low-carbon operations and continuously improves the efficiency The Group holds various environmental protection publicity and training activities to promote Raising environmental Adopting Green of resource utilization, so as to reduce energy consumption and environmental impacts caused green operations, lift environmental awareness of employees and the public, and convey the by operations, and make further progress in green development. awareness concept of building and sharing a beautiful ecology. Operations Environmental protection publicity Organizing environmental protection training The Group integrates the environmental protection concept into the operation practices to On such occasions as the World Environment Day and the The Group regularly carries out special training, public courses, Green constantly improve the green management system and mechanism, and strengthen the National Energy Efficiency Promotion Week, and surrounding internal experience sharing, and other activities covering standardization and institutionalization of green management in the Group in view of the management the theme of “Build a Beautiful Xiangyang, We are Ready to environmental management, energy conservation, emission incomplete indicators and the inconsistent management standards of green management. Act”, and so on, HJGT promotes the concept of environmental reduction, and environmental protection policies, aiming to protection based on LED displays, QQ groups, WeChat groups, enhance employees’ environmental management capabilities and

Through the deep implementation of the Environmental Protection Law of the People’s Republic and other media, striving to create an atmosphere where environmental awareness. In June 2019, Xiangtou Energy launched Improving the environmental of China, the Atmospheric Pollution Prevention Act of the People’s Republic of China, the Law energy-saving, low-carbon, and environmentally friendly lifestyles a special training program on pollution prevention and control management system of the People’s Republic of China on Prevention and Control of Water Pollution, and the Notice are encouraged. In 2019, Municipal Construction launched three work, namely, the control of nitrogen oxides in Anneng Thermal, a of the General Office of the State Council on Issuing the Implementation Plan for the Permit green public welfare activities with 48 participants. company under its control, involving seven participants. System for Controlling Pollutants Emission, we aim to improve the environmental management system, enhance environmental supervision, fulfill our environmental responsibilities, and enhance environmental management. On-site training on the treatment of domestic sewage in townships

HJGT earnestly encourages the subsidiaries to establish environmental management systems From June 13 to 14, 2019, the Department of Housing and Urban-rural Development of Hubei Province organized an on-site and emergency management mechanisms that are consistent with their own business training program targeting the Township Domestic Sewage Treatment Project of Hubei Province, involving over 400 participants, practices. As of the end of 2019, Xiangtou Energy, Xiangyang Municipal Construction Group including officials of the Department of Housing and Urban-rural Development of Hubei Province, professional sewage treatment Co., Ltd. (Municipal Construction) and other subsidiaries established relatively comprehensive staff of the People’s Government of Hubei, leaders and professional sewage treatment staff of municipal, prefecture-level, county- environmental management guarantee systems, and actively implemented various level, and township-level sewage treatment departments, heads of county-level, municipal, and district-level departments in charge environmental protection responsibilities and emergency guarantee mechanisms. At the same of the operation of social capital, and heads of project consulting firms. The training activity was divided into two sessions: visits to time, Municipal Construction established an environmental protection early warning mechanism, Xiangyang Township Sewage Smart Operation Platform, the service pipeline network and sewage treatment plant of Huopai Town, through which the company carried out environmental protection emergency drills covering 56 and the service pipeline network of Guyi Town, and exchanges of experience on township-level sewage treatment. Representatives people. of participants visited the sewage treatment pipeline networks and the sewage treatment plants in Guyi Town and Huopai Town. They firmly believed that on-site visits were of practical meaning and provided a significant reference for similar projects. The training and exchange activity focused on the construction as well as quality and safety control of pipeline networks, basic information on pipeline Improving the environmental protection organizational system network checks and inspection technologies, supervision of pipeline operations, application and management of information systems, interpretation of long-term operation mechanisms and policies, and requirements for future sewage treatment works. The content of Xiangtou Energy has established a leading group headed by main leaders of the company the training was closely related to the actual construction and operation of township-level sewage projects, and was highly instructive, to strengthen the supervision of environmental protection work; Municipal Construction has pertinent, and operable. It effectively promoted typical cases of township-level sewage treatment plants of Xiangyang on a larger scale established an environmental protection committee with the chairman of the company as the and contributed to the protection of the ecology along the Han River Basin. director, the deputy general manager as the deputy director, and key members of the labor union, engineering department, security department, equipment and materials department as the core members to supervise the company’s compliance with relevant environmental Build a Beautiful Xiangyang, We are Ready to Act protection policies, laws, and regulations. Xiangyang Small and Medium Enterprises Guarantee Company Ltd. (SME Guarantee) and Xiangyang Agricultural Industrialization Investment Guarantee Co., Ltd. (Agricultural Guarantee) organized the “Build a Beautiful Xiangyang, We are Ready to Act” volunteer Improving the environmental protection systems service campaign on the World Environmental Day, involving ten participants. Participants cleaned up greenways and corners in a park Municipal Construction has compiled and published the Environmental and Occupational to practice environmental protection with actions. Meanwhile, volunteers communicated with visitors on basic environmental protection Health and Safety Target Decomposition and Evaluation Measures, the Environmental knowledge and the significance of environmental protection. and Occupational Health and Safety Performance Monitoring and Measurement Control Procedures, and other regulations to clarify various environmental protection systems, promote the implementation of daily environmental protection work, ensure regular operations of The Group continues to standardize and improve the energy-saving system, carry out water- Promoting green office environmental protection facilities, and guarantee up-to-standard emissions. saving, power-saving, and fuel-saving actions, promote paperless office, advocate green travel, and create an energy-saving and low-carbon environment-friendly atmosphere. Strengthening the management of early warning on and emergency response to environmental emergencies Total number of electronic documents copy Xiangtou Energy has established a sound emergency management system for environmental emergencies, and set up a working group to compile emergency rescue plans and clarify the 2018 3,574 division of responsibilities and tasks. The company organized two environmental emergency drills in 2019, involving 82 participants. 2019 3,394

39 40 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

The Group integrates the concepts of green development and environmental protection into Prefabricated buildings adopt integrated design, construction, and decoration, and features Promoting prefabricated Green design the project design. Valuing green planning and design, we continue to strengthen green design high construction efficiency, less construction waste, energy saving, and environmental management, promote the R&D and application of green technologies and products, aiming buildings protection. By actively exploring the application of prefabricated building techniques in our to reduce the impacts of our projects on the surrounding ecological environment. In 2019, projects, we strive to reduce waste and create green buildings. Xiangyang Academy of Urban Planning and Design compiled the Plan for the Protection and Utilization of Ancient Xiangyang City, which takes the surrounding environment and buildings into full consideration to minimize the impacts caused by the project implementation.

Promoting the prefabricated buildings to reduce construction waste

The Group actively practices green and sustainable production methods, and integrates the Responding to the national call for building eco-cities, the Group actively promotes the rapid development of the industrialization Green production concepts of green development, low carbon, and environmental protection into product design, of construction and residential projects in Xiangyang. By vigorously promoting green prefabricated buildings with steel structures, production, and daily operation and management. We have upgraded high energy-consuming we strive to reduce waste caused during corporate growth and contribute to the sustainable and stable economic development of equipment to reduce the impacts on the environment. Xiangyang City. Municipal Construction has actively promoted the construction of Xiangyang Green Prefabricated Building Industrial Park, endeavoring to build it into a national-level prefabricated building industrial base. The industrial park, officially put into operation in May 2019, is capable of constructing three million square meters of steel-structured prefabricated buildings per year, and can serve As coal-fired boilers of Anneng Thermal had no desulfurization facilities, they caused serious construction markets within 500 kilometers from the park, effectively contributing to the construction of an eco-city. Deepening energy-saving pollution to the surrounding environment. Xiangtou Energy has continued to eliminate high technologies energy-consuming and highly polluting equipment and materials to reduce environmental pollution caused by production from the source. By optimizing production and manufacturing processes and techniques, we strive to reduce energy consumption and emissions caused by production effectively. In 2019, the Group shut down six coal-fired boilers of thermal power plants, and realized desulfurization and denitrification in an all-around way by purchasing more low-sulfur coal and increasing the input of denitrification reducing agent urea, significantly reducing emissions of exhaust gases.

SO2 Carbon emissions ton SO2 emissions ton NOx emissions ton Smoke and dust emissions ton

2017 331,042 2017 498.85 2017 479.15 2017 29.27

2018 319,768 2018 282.99 2018 387.08 2018 18.90

2019 238,498 2019 156.84 2019 320.77 2019 16.12

41 42 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

Attaching great importance to environmental protection projects, we have given full play to our Maotanhe Sancengyan Hydropower Project of Engaging in experiences and advantages in project engineering, design and contracting, and been devoted to a series of projects that are closely related to environmental protection, such as clean energy In 2019, Maotanhe Sancengyan Hydropower Project generated 45 Xiangyang Energy Group Co., Ltd. Environmental development, resource recycling, and landscaping projects. Through such efforts, we aim to GWh of electricity in total, which helped reduce the consumption (Energy Group) improve the living environment and living conditions. of standard coal by 13,842 tons, CO2 emissions by 37,845 tons, Located in Longkou Village, Wendou Township, Lichuan City, SO emissions by 9 tons, and NOx by 8.55 tons.1 Protection 2 Maotanhe Sancengyan Hydropower Project has a designed installed 1 According to the China Power Industry Annual Development Report 2019, capacity of 12 MW and an annual electricity generation capacity in 2018, the standard coal consumption of thermal power plants was 307.6 of 38.54 GWh. After completion, the project will contribute greatly Industries g/kWh, and the emissions of CO , SO , and NOx emissions per unit of 2 2 to the optimization of the power supply structure and the power thermal power generated were 841 g/kWh, 0.20 g/kWh, and 0.19 g/kWh system of Enshi Prefecture and the improvement of the quality of To optimize the energy mix, the Group has increased investments in and enhanced the respectively, which means that 30,760 tons of standard coal was replaced and 84,100 tons of CO , 20 tons of SO , and 19 tons of NOx were reduced power supply. Clean Energy development of clean energy sectors, such as hydropower, wind power, photovoltaic, and 2 2 for every 100 GGWh of hydropower generated. Development biomass energy, and created strong momentum for the transformation towards a green and low-carbon energy mix. Laohekou Lida Industrial Park Distributed Photovoltaic Power Generation Project of Energy Group

Datang Xinji Hydropower Plant The main part of the project is a distributed photovoltaic power plant that makes full use of the rich solar energy resources of Located in Xiangyang City, Hubei Province and along the middle reach of the Han River, Datang In 2019, Laohekou Lida Industrial Park Distributed Photovoltaic Laohekou City to provide eco-friendly new energy for the local area. Xinji Hydropower Plant is the last hydro-junction in the cascade development of the Han River Power Generation Project generated a total of 969.6 MWh of After completed, the project will have a total installed capacity of and one of the major projects of the Han River Eco-economic Belt Development Plan approved electricity, which saved about 255.5 tons of standard coal and 0.974 MW. Under the mode of self-consumption of self-generated reduced CO emissions by 631.45 tons compared with traditional by the National Development and Reform Commission. With a total investment of RMB 5.6 2 electricity and sending surplus electricity to the grid, the project will billion, the project, after completion, will improve 38 kilometers of navigation channels, unblock thermal power plants. meet the sustained and high-speed growth in electricity demand of the transportation along the whole Han River, increase the irrigation area by 10,000 hectares, the power grid of Hubei Province and Laohekou City. and provide 500 GWh of green energy each year. During the construction of the dam, the Group has adjusted ecological red lines involved in the Xinji Hydropower Plant to minimize impacts on scenic spots, such as Changshou Island and Gucheng Wetland Park.

Hydropower Photovoltaic

Power generation 10,000 kWh Power generation 10,000 kWh

2017 6,025 2017 0

2018 4,942 2018 69

2019 4,789 2019 96.96

Installed capacity kW Installed capacity kW

2017 18,960 2017 0

2018 18,960 2018 0.974

2019 18,960 2019 0.974

Proportion % Proportion %

2017 100.00 2017 0.00

2018 98.62 2018 1.38

2019 98.02 2019 1.98

43 44 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

To promote the development of the circular economy, HJGT actively improves the urban Focusing on ecological conservation and under the premise of ensuring safe water drainage Circular economy function of waste disposal and minimizes the negative impacts of economic activities on the Sponge cities and flood prevention, the Group maximizes the storage, penetration, and purification of natural environment. rainwater in urban areas and promotes the use of rainwater resources and ecological environmental protection to the full extent.

Carrying out farmland improvement and transformation based With accelerated construction of the “two centers and four Xiangyang” and “two renovations Comprehensively promoting on high standards to contribute to a better environment and two constructions”, the amount of construction waste of Xiangyang City has increased the recycling and reuse of sharply in the past two years. Faced with such a dilemma, Municipal Construction has adhered Xiangyang Water Resource Development & Investment Co., Ltd. (Water Development construction waste to the concept of “green development and environmental protection” in production, and & Investment) actively undertakes the “farmland to waterland” transformation project invested RMB 116 million into promoting the recycling and reuse of construction waste. The along the site of the water resources allocation project in northern Hubei. Relying on company is committed to transforming construction waste into wall building bricks, trail bricks, the water resources allocation project, Water Development & Investment integrates the and other environmentally friendly building materials, thus creating environmental and economic farmland improvement project with farmland irrigation projects, beautiful countryside values, improving the utilization of construction waste in Xiangyang City, and promoting the construction projects, shelterbelt construction projects in northern Hubei, industrial construction of a resource-saving and environmentally friendly society. integration projects, and so on, aiming to improve the grade of arable land, optimize The comprehensive water system agricultural production, and build high-quality farmland. As paddy fields can help improvement project of Haoran River regulate the climate, conserve water and soil, improve soil properties, and increase effectively solves the problems of insufficient soil fertility, the implementation of the project will not only create significant economic flood control and drainage capacity, poor and social benefits, but contribute to a better ecological environment in the local area connectivity of water systems, low carrying as well as the realization of the general goal of “lush mountains, lucid waters, dense capacity of the water environment, and lack forests, fertile farmland, clear lakes, and beautiful countryside”. of cultural and landscape functions of the water system of Dongjin New District.

To facilitate the construction of green belts in Xiangyang, HJGT has completed 17 greening Landscaping projects, including the Smart Port Enterprise Service Center and the Xianshan Bus Parking and Maintenance Plant, as well as the design of 30 garden projects, including the project for adding landscapes to urban areas and the greening project involved in the first phase of township-level sewage treatment project of Xiangyang. In 2019, the EPC project of Coloring the Urban Area (Phase I) of Xiangyang City constructed by Xiangyang Yuanye Landscape Architecture Group Co., Ltd. won the 2019 Hubei Province Quality Landscaping Project. 90 % 160,000 tons RMB 14.54 million recycling rate of construction waste construction waste recycled as of the the value of recycled building end of 2019 materials was The 4,600-meter Lvzhou Avenue, Yuliangzhou has a green area of 154,519 m2. Once completed, the project will significantly increase 9,404 m3 57,776 m3 the green space ratio of Xiangyang of building bricks produced from the trail bricks produced through recycled City. building bricks production line construction waste

45 46 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

HJGT actively implements the Guiding Opinions on Building a Green Financial System and The National Reserve Forest Project in Xiangyang City (Phase I) Promoting Green integrates the concept of green credit into corporate strategies, the organizational structure, management systems, and business processes. Leveraging the advantages of credit products The National Reserve Forest Project in Xiangyang City is a key project for the city to realize the strategic goal of “building the Han Finance and services, the Group actively develops innovative green financial products and services, River Eco-economic Belt and creating an important green growth pole for the Yangtze River Economic Belt”. As a significant move and continues to enhance the support for the development of new energy and new technology for practicing the concept of “lucid waters and lush mountains are invaluable assets”, the project, based on a “prevention + storage” industries. The first phase of ecological conservation and green development project in the model, aims to improve forest quality accurately and build a healthy, stable, high-quality, and efficient forest ecosystem. The project Xiangyang section of the Han River Basin get a line of credit of RMB 9 billion from the China is planned to include a 46,000-hectare national reserve forest with a total investment of RMB 7 billion. In 2019, Xiangyang Forestry Development Bank, becoming the first project in Hubei Province to support the protection of Development Investment Co., Ltd. (Forest Investment) completed the planting of 98 hectares of forest with 170,000 seedlings in total, the Yangtze River with a market-oriented model. Besides, we launched the construction of paved 6,500 meters of forest paths, dug two deep wells, and constructed three reservoirs and 1,333 meters of fire belts. As one of the the Han River Botanical Garden to support the protection of endangered plant resources and first batch of reserve forest projects planned in the province, the Xiangyang National Reserve Forest Project was the first to be included promoted the “Building a Green Xiangyang” campaign to build an ecological corridor in northern in the projects library of the government, pass the approval, and commence the construction, providing valuable experience for the Xiangyang and consolidate Xiangyang City’s achievements in building the “National Forest City”. planning and operation of other reserve forest projects in the province.

170,000 seedlings Planted 1,333 meters 98 hectares forest fire belt Forest Investment completed the forestry 6,500 meters paved of forest paths

47 48 Hanjiang Guotou Group Co., Ltd.

Policy guidance Pursing Stable and Policies related to SOE reform have pointed out that China will “support enterprises, institutions of higher learning, and research institutes in their cooperation in establishing research Long-term Progress centers”, and “increase financial services for private, small, and micro businesses”. Meanwhile, enterprises are encouraged to cooperate with governments, financial institutions, and research institutes. The systems and mechanisms will be by Mutually Beneficial improved for the market-oriented allocation of factors of Cooperation production.

CSR Topics

Strategic cooperation, Responsible procurement, Quality and service management, Product knowledge popularization

Our actions

• We signed agreements with the People’s Government of Laohekou to pursue development in new urbanization, smart city development, cooperatively-run schools, integrated elderly care and medical services, etc.

• We signed agreements with Huawei to carry out cooperation in areas such as enterprise digital transformation, new smart city and cloud data center.

49 50 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

Adhering to the principle of honest operation, we oppose unfair competition and commercial Cooperation with The Group cooperates with financial institutions such as banks, securities firms, leasing Deepening fraud in the industry. We uphold the concept of “win-win cooperation”, and cooperate with the companies in the innovation of models for attracting investment, market coordination, capital government, financial institutions, enterprises, research institutes, and the media by vigorously financial institutions operation, etc. Meanwhile, we leverage each other’s strengths in funds and channels while Cooperation and leveraging the Group’s advantages in platforms and resources. With efficient communication expanding investment and financial projects. mechanisms in place, we work together and draw on each other’s strengths to usher in a better era for mutually beneficial cooperation. Communication Included in the new system for “4321” cooperation to create a high-quality guarantee platform

Economic contract performance rate In September 2019, Xiangyang Small and Medium Enterprises Guarantee Company Ltd. was included in the new system for “4321” % cooperation among governments, banks and guarantee companies in Hubei Province. In October, the company held the signing 2018 99.7 ceremony of new cooperation among the government, banks and guarantee companies in Xiangyang. The “4321” guaranty model has seen innovation in re-guarantee, the compensation system for fiscal risks and risk sharing mechanism, and established a new 2019 99.6 type of government-bank-surety company cooperative relationship featuring “resource sharing, joint risk management, complementary advantages, and mutual benefits” between the province and cities, as well as the three-level financial and guarantee system for the province, cities and counties. Through the new model, a high-quality platform for providing guarantee services is built to contribute to the city’s economic and social development. The Group has established comprehensive and close cooperation with the various departments Cooperation with of the Xiangyang Municipal Government in information sharing, project development, the government cooperative management, talent exchange, etc. by drawing on each other advantages.

Cooperating with Laohekou People’s Government to achieve high-quality development

On May 9, 2019, HJGT signed a strategic cooperation framework agreement with the People’s Government of Laohekou City. The Group’s business planning and transformation are in line with the efforts of the Laohekou Municipal Government to develop smart cities, as well as move forward the project that integrates various types of urban plans into a single urban plan, the pilot reform of forestry rights, and the reform of state-owned investment and financial companies. The two parties will, in accordance with the principle of “mutual trust and win-win development”, explore in areas such as new urbanization, smart city development, cooperatively-run schools, integrated elderly care, and medical services, to jointly promote the high-quality development of Laohekou.

The Group has devoted greater efforts in the overall planning and coordination for the strategic Cooperation with cooperation among all business segments, and set up resource integration platforms with enterprises Huawei, Inspur, and other partners, thus striving to achieve win-win cooperation and create a new situation of high-quality development featuring “Growth Pole with Two Centers” in Xiangyang.

Cooperating with Huawei to promote the digital construction

In response to the Group’s Three-Year Action Plan on Digitalization, HJGT and Huawei signed a cooperation agreement on October 24, 2019, under which both parties will integrate superior resources, develop comprehensive cooperation on the digital transformation of enterprises, new smart cities, and cloud data centers, and work together to build a number of high-quality and intelligent benchmarking projects. Through the cooperation, the two sides aim to explore a digital development way with HJGT characteristics and better prospects, and realize the innovative development of the Group.

51 52 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

Cooperation with The Group has cooperated with colleges and universities such as Huazhong University of HJGT values common growth with all partners. While cooperating with the upstream and Science and Technology, of Technology and Hubei University of Arts and Building a downstream of the supply chain, we have promoted responsible vendor management, advocated scientific research Science on project cooperation, so as to build a platform for industry-university-research transparent procurement, and improved the supervision and inspection of procurement. We have cooperation, speed up the transformation of scientific research achievements, and promote Responsible shortlisted the vendors through competitive negotiations, established vendor evaluation systems, institutions technological innovation. and introduced the responsible management philosophy and requirements, thus improving the Supply Chain fulfillment capability in the aspects of economy, society, and environment. In 2019, Xiangyang Road & Bridge Construction Group Co., Ltd. formulated and improved the Measures for Procurement Establishing a university-enterprise research center to jointly cultivate scientific and Management and Measures for Asset Management, according to which the cooperation with technological talents two vendors was terminated, two evaluations on construction teams were carried out, and ten unqualified teams were eliminated. In July 2019, Xiangyang Communications Planning and Design Institute Co., Ltd. and Wuhan University of Technology signed an agreement on jointly establishing the Road and Bridge Engineering Technology University-Enterprise Research Center, with an aim to accelerate the transformation of scientific and technological achievements. The cooperation will push forward the implementation of Jointly conducting the Electric Safety and Emergency Rescue Drills to improve the safety the Technology Transformation Center, provide the Institute with strong and all-round technology and talent support, and accelerate the emergency capacity of construction companies promotion of scientific research, project consultation and achievements transformation in transportation, municipal engineering, and other sectors, thus promoting industry upgrading of Xiangyang City. In order to further consolidate the foundation of safety management, Xiangyang Hengtai Health Industry Investment Co., Ltd. joined hands with Xiangyang Forestry Development Investment Co., Ltd. and constructors of Hengtai Yueju project to conduct the electric safety and emergency rescue drills in December 2019 on the project site. The drill popularized the electric safety knowledge and electric shock emergency rescue skills, enhanced the safety awareness of all sides during the daily use of electricity, and improved the competence and level of construction undertakers to deal with the electric shock accidents.

HJGT has attached great importance to work safety, strictly implemented work safety-related national laws and regulations, and established a sound work safety management and assessment Promoting system. We have organized educational training on work safety, work safety and emergency rescue drills, and potential risk identification, prevention and rectification in work safety, through which we Work Safety have created a safe and harmonious atmosphere and guaranteed the safety of employees. In 2019, there were no major safety accidents or work-related deaths in the companies at all levels.

Safety production investment RMB million

2018 8.24

20191 5.08

1 The materials for work safety purchased in 2018 were still in use in 2019, resulting in reduced work safety inputs in 2019 compared with that in 2018.

Organizing the “Work Safety Month” campaign to improve the safety monitoring and controlling capacities Communication The Group strengthens the communication with the media to keep friendly relations with media outlets. Paying close attention to the news and public sentiments, the Group invites media In June 2019, taking the “Work Safety Month” as an opportunity, HJGT set up a “Work Safety Month” campaign leading group to be with media outlets reporters to participate in corporate activities, striving to build a transparent and open corporate responsible for organizing warning education and emergency drills, and participating in the provincial work safety online knowledge image. In 2019, the Group actively partnered with Hubei Daily, Xiangyang Daily, Xiangyang contest under the theme of “preventing risks, eliminating hazards, containing accidents”, as well as strengthening the staff’s awareness Evening News and other media outlets to publish more than 130 articles. of work safety, and enhancing the risk monitoring and controlling level and the emergency response capacity of production units. A total of 72 work safety and emergency rescue drills were organized with 2,370 participants involved. Launching intensive media interviews to realize efficient and transparent operations

In June 2019, Xiangyang International Land Port Investment Holding Co., Ltd. invited mainstream media outlets, including Hubei Television, Xiangyang Television, and Xiangyang Daily, to attend the intensive media interviews. During the interviews, the company introduced operation situations, investment activities, preferential policies, and typical services on the occasion of the 2nd anniversary of the official operation of Xiangyang Bonded Logistics Center, and made responses to press questions. It promoted the interaction and exchange between the company and the public, made the public better understand the development of its service sectors, and supervised and helped it realize a sound development.

53 54 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

HJGT always attaches importance to customer management and takes the initiative to establish Popularizing the knowledge of gas safety and raising the awareness of gas safety Customer good relations with customers and partners. We keep improving the supply capacity of quality products, optimizing and upgrading services, and respond positively to customer complaints, In April 2019, Siji Meihao Gas Co., Ltd., a subsidiary of Xiangyang Energy Group Co., Ltd., collaborated with Chenjiaying Neighborhood thus creating values for the government and the public with quality products and services. Relations Committee and Xiangyang Municipal Urban Construction Law Enforcement Detachment to launch the “Gas Safety in Communities” publicity and education activity in the Chenjiaying Community. By distributing gas safety publicity leaflets, expounding the basic Management knowledge of gas safety, and giving instructions on emergency measures in case of gas leakage, the general knowledge of gas safety was popularized among the residents in the community, which helped the residents use gas safely and prevent safety accidents.

In strict compliance with relevant laws and regulations, the Group has continued to promote Quality improvement quality management in project production and construction, while focusing on innovative through innovations technologies in the design and construction processes, so as to create quality demonstration projects.

Rigid Quality Control Innovative Technologies

Municipal Construction has issued the Engineering Projects Xiangyang Road & Bridge Construction Group Co., Ltd. In-process Quality Control System of Xiangyang Municipal has established a technology R&D center, drafted the Construction Group Co., Ltd. (Provisional) and Key Points Technology Center Management System, the Measures for of Municipal Works Standardized Construction and Quality the Management of Science and Technology Projects, and the Control, and four achievements therein have been awarded Incentive Measures for Scientific and Technological Innovations. the Quality Control (QC) Achievement Award of Hubei The company has invested a total of RMB 20.29 million in Province. R&D, with 20 patents applied and accepted, including 17 utility model patents and three invention patents.

Valuing project quality and improving project competitiveness

Municipal Construction attaches importance to the engineering project quality and the open and transparent information disclosure. In November 2019, the company convened a project quality and safety on-site meeting to invite Xiangyang Housing and Urban-Rural Customer complaint The Group has established diversified complaint channels, including the Group’s complaint Development Bureau, Quality Inspection Office, and even the public to conduct a field department, Xiangyang Sunshine Complaint Platform, and 12345 Mayor’s Hotline, through inspection. In doing so, the project quality management information became more open management which the citizens can report relevant issues. In 2019, we received 24 batches of letter writers and transparent, contributing to the establishment of a responsible corporate image. and visitors on work days, including two batches of repeated letter-writers and visitors totaling more than 100 people, with reported issues mostly resolved. The Sunshine Complaint Platform received a total of 16 letters, all of which were accepted and settled. The letter-writers and visitors submitted more than 1,000 requests through the 12345 Mayor’s Hotline which were mainly related to parking, heating, sewage treatment, housing, and so on, and all of the The Group boasts an extensive scope of businesses, covering real estate, finance, health, complained issues were properly handled within the reporting year. Product knowledge cultural tourism, and energy investment. In order to better serve different customer groups, popularization each subsidiary has carried out knowledge popularization and provided customer training in the community for different business lines, so as to improve service quality, enhance customer Complaint Resolution rate in 2018 % experience, and build customer trust. 2018 100 Popularizing community-based elderly care services to promote the development of the health industry 2019 100 In order to understand citizens’ demand for elderly care and provide better services for the community, in July 2019, Xiangyang Hengtai Health Industry Investment Co., Ltd. worked with Qilihe Sub-district to carry out a community campaign, introducing the knowledge of community-based elderly care to the residents. The company conducted a survey on Standardizing the complaint process and strengthening customer management the service needs of community residents, introduced the day care center, combination of medical care and elderly care, and construction of cultural and recreational centers In order to strengthen the customer management of elderly care institutions under the brand of Xiangyang Hengtai Health Industry in the community, so as to give residents a preliminary understanding of the concept of Investment Co., Ltd. and serve customers in a better way, Hengtai Health has formulated Service Complaint Management System community-based elderly care. In the future, Hengtai Health will continue to carry out of Elderly Care Institutions (Provisional) to regulate complaint channels, complaint handling procedures, complaint deadline, handling social activities on elderly care to promote the development of the health industry in rules, and penalties and punishments for complaints, and provided customers with a variety of channels for making complaints Xiangyang City. through telephones, complaint boxes, online channels, and democratic management committee of elderly care institutions.

55 56 Hanjiang Guotou Group Co., Ltd.

Putting People Policy guidance The CPC Central Committee proposes to “further strengthen the building of the leadership and talent teams of state-owned enterprises”, clarify the criteria and procedures for talent First to Create a selection and employment, and put forth innovative talent selection and employment approaches. It requires enterprises to vigorously implement the strategy of strengthening Wonderful Life for enterprises through talents and accelerate the establishment of sound systems and mechanisms for SOEs to gather talents. Employees

CSR Topics

Guaranteeing employee rights and interests; Supporting employee development; Caring for employees’ physical and mental health

Our actions

RMB 550,000 invested in employee training in 2019

220 hours over 4,000 of employee training participants

57 58 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

HJGT promotes equal and non-discriminatory employment and treats employees equally. Guaranteeing We provide employees with comprehensive compensation and benefits, attaché importance to employees’ occupational health, and create a safe, fair, and decent working environment Employees’ Rights for employees. 3,805 26 % 7 % and Interests total employees of HJGT proportion of female employee in 2019 employees among the turnover rate management staff In strict compliance with the Labor Law of the People’s Republic of China and the Contract Equal employment Law of the People’s Republic of China, we are against all forms of forced labor, harassment, and abuse and provide equal employment and career development opportunities for employees of different genders, races, and beliefs, striving to make the best use of every talent.

In line with high standards in the talents introduction, the Group has released the Opinions on Tightening Access Conditions for Employees and Building High-quality Talent Teams. In Compensation Based on the market-oriented compensation system, HJGT forms a reasonable employee 2019, the Group recruited 197 new employees, among whom 93 had master’s degrees, mobility mechanism with better choices of promotion, opt-out option and salary. We provide 94 were graduates from Double First-class or overseas universities, and 51 had certified and benefits employees with better competitive salaries than our industry peers, guarantee mandatory qualifications, accounting for 47.2%, 47.7%, and 25.9% of the total respectively. benefits for employees, including the five mandatory insurance plans and the housing provident fund, paid annual leave, paid family leave, as well as health examinations, trips in spring and autumn, team building activities, and other benefits during holidays required by the All-China Educational Background of Employees % Age breakdown of employees % Federation of Trade Unions. In 2019, HJGT’s labor contract signing rate was 100% and the average paid annual leave for employees was 7.2 days.

8 4 19 The Group respects employees’ right to participate and express, and actively broadens Democratic communication channels for employees and protect employees’ privacy. We have established 35 management the Trade Union Committee, Women Employee Committee, and Fund Review Committee and hold regular Workers Congress, so as to support employees in participating in democratic management and supervision of the Group and earnestly protect employees’ rights and 37 Technical secondary 52 Above 51 years of age interests. school and below 25 Junior college 46 – 54 years of age

Bachelor’s degree 36 – 45 years of age 20 Master’s degree and Below 35 years of age above

Skill level of employees % Gender group of employees %

14 27 33

Entry-level talents 73

53 Intermediate talents Male

Top talents Female A meeting of the Workers Congress

59 60 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

Upholding that “everyone is able to excel themselves” and with the purpose to “create The Group holds the Second Management Official Ability Enhancement Workshop to Supporting talents, improve skills, and serve the society”, HJGT provides employees with diversified improve employees’ comprehensive abilities development channels and training opportunities to help employees realize further growth. Employee To create a high-quality and professional official team for the Group, HJGT held Development the second Management Official Ability Enhancement Workshop at Fudan University in September 2019. The Talent training The Group has established varied training systems for employees at different stages of workshop, adopted approaches such as development. Based on such systems, we aim to enhance employees’ comprehensive theoretical guidance, lecturing, and field system capabilities in all aspects, stimulate their enthusiasm and creativity, and strengthen team visits, to focus on Xi Jinping Thought on cohesion within the Group. In 2019, HJGT organized more than 220 hours of employee Socialism with Chinese Characteristics training in total. for a New Era as well as international and domestic political and economic situations, with a total of 53 trainees. It enhanced the comprehensive abilities of New employee training Official training Training on businesses of HJGT leading officials of the Group through in- The Group held two new The Group held the second Management We launched a number of business depth explanation of micro and macro employee training sessions, Official Ability Enhancement Workshop for training programs, among which 60 properties of social situations. involving 183 trainees. the management which was participated trainees participated in the continuing by 53 managerial employees. education on accounting.

The Group selected and sent 42 The Group held 24 “Xiang Tou Xiang The Group explores talent selection and incentive mechanisms, and builds a talent team middle-level officials to take part in the Zhi” training events, with a total of Unblocked in a fair, just, and open manner. Through this, HJGT strives to improve the full-lifecycle training for managerial staff held by the over 4,000 participants. The content development channels incentive system and offer employees a larger space to show their talents. State-owned Assets Supervision and of the training covered finance, brand Administration Commission of Hubei strategies, the corporate culture, the Provincial People’s Government and the internal control system, engineering Xiangyang Municipal Party School. technologies, artificial intelligence, big Building a market-oriented employment system Strengthening talent training data, blockchain, etc. We have formulated the Administrative Measures for the Selection We have formulated the 2019 Job Rotation and Appointment of Officials to open up channels for internal Program, through which we optimize the promotion and external communication so that “everyone is able growth path for talents and realize multi- to excel themselves”. By conducting seminar surveys of reserve position training based on the construction officials, we learn about the situation of middle-level officials in of the talent team. In 2019, the Group subsidiaries and then adjust their positions according to job selected eight officials to undertake different requirements and corporate development. In 2019, the Group positions in rotation in subsidiaries. adjusted the positions of 55 officials and promoted 32 officials.

In addition to the development of employees, HJGT attaches great importance to the Caring for occupational health of employees and operates strictly in line with safety requirements. We adopt varied measures to show our care for different groups of employees, so as to Employees Physical provide employees with a safe, reliable, and harmonious working environment. and Mental Health

Always putting the health and safety of employees first, HJGT promotes scientific Occupational health and daily management of occupational safety and health, and establishes a multi- level insurance and health guarantee system for employees by organizing health examinations and psychological consultation lectures, and establishing supplementary medical programs, striving to create a safe and stable working environment. In 2019, the coverage of HJGT’s employee medical examinations reached 100%.

61 62 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

“Emotional Management Makes Your Life Easier” psychological health course to Relying on platforms provided by the Group’s labor unions, subsidiaries, and so on, we Work-life balance organize various cultural and sports activities to enrich employees’ spare time, promote work- make employees happier life balance, and enhance employees’ sense of happiness and belonging.

In August 2019, “Xiang Tou Xiang Zhi” organized the “Emotional Management Makes Your Life Easier” psychological health training course, involving over 180participants from the Group’s headquarters and subsidiaries. The training program introduced sources of emotions and stress, as well as measures to control emotions and alleviate stress through vivid cases, interesting tests, and on- site interaction. It helped employees learn to better control their emotions, handle wife-husband and parent-child relationships, and make their life happier.

The Group shows care for female employees, retired employees, front-line employees, and Targeted Care needy employees in different manners, striving to make employees happier.

Female employees Retired employees

• Setting up well-equipped nursing • Formulating and implementing the annuity plan for the headquarters of HJGT rooms to provide rest places for and improving the pension schemes for retired employees female employees and infants, and organizing at least two female Needy employees employees’ sharing and exchange

meetings per month • Visiting and sending gifts to needy employees and offer them solatium

• Organizing legal knowledge contests • Providing subsidies for families who suffer from major diseases or accidents and among female employees providing students from needy families with student aid

• Giving a lecture on mental health • Providing “one-to-one” partner assistance for needy employees among female employees, with a total of more than 120 female Front-line employees employees

• Organizing the “Rules and Stories • Visiting front-line employees

of My Family” campaign to collect • Organizing over 300 young volunteers from 22 Youth League and select representative stories of organizations to join the “Bringing Coolness to Employees” female employees campaign

1 The 2019 Spring Festival Gala of HJGT Organizing the “Action Month for Protecting the Rights of Female Employees” campaign to 1 、 2 The 11th Hubei Dragon Boat Race guarantee the legitimate rights and interests of female workers 2 3 、 3 HJGT Cup semi-finals 、 To strengthen the protection of female employees and better protect the legitimate rights and interests of female employees, in March 4 5 4 A friendly badminton competition 2019, Xiangyang Security Service Controlling Corporation (Security Corporation) organized all female employees to participate in the 、between HJGT and China Construction contest on gender equality, protection of female employees’ rights and interests, and legal knowledge during the Action Month for Third Engineering Bureau Co., Ltd. Protecting the Rights of Female Employees. It stimulated female employees’ enthusiasm to acquire and apply basic legal knowledge, 5 The 5th men’s basketball league games 、 and safeguard their own legal rights and interests. of Xiangyang City

63 64 Hanjiang Guotou Group Co., Ltd.

Policy guidance Contributing to the The 19th CPC National Congress designated eliminating poverty in a targeted manner as one of the three critical battles for building a moderately prosperous society in all respects and Society to Build a reiterated the target of lifting all rural poor and impoverished counties out of poverty and eliminating absolute poverty by 2020 to build a moderately prosperous society. State-owned enterprises are required to undertake the responsibility for Happy Homeland poverty alleviation and help poor households get rid of poverty through industrial development, market cooperation, and job placement.

CSR Topics

Supporting poverty alleviation, Deepening partner assistance, Carrying out voluntary services

Our actions

Total donations RMB million

2018 1.36

2019 1.99

RMB 190,000 110 poor people invested in poverty alleviation in helped in total 2019

6,520 hours volunteer activities provided

65 66 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

While developing businesses, HJGT never changes the original aspiration to give back to • The Group helped the village plant 16 hectares of tobacco in total, of which 11.33 hectares were planted by impoverished society. We contribute to targeted poverty alleviation through concrete actions, earnestly Supporting households with each hectare generating about RMB 30,000 of output value. Besides, the village planted about 4,000 pits of assume social responsibility, and help poor households get out of poverty, aiming to create a gastrodia elata, among which 2,000 pits were planted by poor households of the village with each pit generating a net profit Poverty harmonious and stable social environment. of RMB 50 to RMB 100. Jiajiaojian • For the collective economy, Jiajiaojian Village planted about 3.33 hectares of traditional Chinese medicinal materials with each Village hectare generating RMB 6,000 of output value. Moreover, a total of 2,000 pits of gastrodia elata were planted with an output Alleviation value of about RMB 100,000. • Photovoltaic projects of the village generated over RMB 40,000 of output value, and the total income of the collective economy was estimated to be RMB 160,000. The Group has established poverty alleviation teams. With the team leader responsibility • The Group invested RMB 150,000 into the development of industries in the village. Organizational system, the teams are composed of departmental heads, executive deputy team leaders, and System team members. The team members stationed in villages work in accordance with the “Five • The village had 230 registered poor households with 842 poor people in total, among which 10 households and 29 people days four nights” requirement strictly and promote poverty alleviation policies and requirements were assisted by poverty alleviation teams of the Group. In 2018, the whole village was lifted out of poverty and passed the third-party national inspection in 2019. actively. They study causes of poverty and assist the village committee and village Party branch Jiancao Village • The village planted 122 hectares of tobacco and 45.33 hectares of chiles in total. committee in conducting targeted poverty alleviation. • The Group invested RMB 100,000 in the development of industries and appropriated RMB 400,000 for the drinking water project in the village.

Visiting Jiajiaojian Village • The village had 200 registered poor households with 661 poor people in total, among which 158 people from 42 households Shengshiping were assisted by poverty alleviation teams of the Group. In 2018, the whole village was lifted out of poverty and passed the third-party national inspection in 2019. In December 2019, HGJT’s poverty alleviation team went to Jiajiaojian Village, Village • The Group invested RMB 100,000 in the development of industries and issued RMB 489,000 in rewards and subsidies in 2019. Huangpu Town, Baokang County to bring rice, noodles, oil, and other daily necessities to 44 targeted poor households and impoverished Party members. The • The village had 119 registered poor households with 312 poor people in total, among which 192 people from 73 households teams learned about the living conditions of poor households in time and brought were assisted by poverty alleviation teams of the Group. In 2018, the whole village was lifted out of poverty. Shuidou warmth and care to local farmers. • The Group invested RMB 100,000 in the development of industries. Village • The Group helped the village plant 4 hectares of tea plants, 13.33 hectares of traditional Chinese medicinal materials, 26.67 of tobacco, 6.67 hectares of potatoes, and 10 hectares of vegetables.

• The village had 138 registered poor households with 240 poor people in total. In 2018, the whole village was lifted out of Lujiayoufang poverty and passed the third-party national inspection in 2019. Village • The Group invested RMB 100,000 in the development of industries. • The group renovated 4 hectares of tea gardens.

Supporting HJGT plays a leading and exploratory role in undertaking long-term projects in the local area. The improvement of infrastructure and the living environment is the basic condition for poverty- We apply our successful experience in promoting the development of local industries and Improving stricken areas to get rid of poverty, as well as an important guarantee for preventing areas industrial boosting local economic development. infrastructure exiting poverty from returning to poverty. The Group repairs bridges and roads for the local development In 2018, Jiajiaojian Village and poor villages that have partner assistance relationship with four area, fixes weak links of infrastructure in poor areas, and helps local economic development. our subsidiaries were all lifted out of poverty. In order to consolidate the results of poverty

alleviation, the Group will make greater efforts to stabilize farmers’ income and ensure that Jiajiaojian • The Group invested RMB 36,600 in constructing or rebuilding 49 public toilets in the village households exiting poverty do not fall into poverty again. Village

• The Group paved 2.1 km of cement road and 10 km of gravel road for the village. • The Group invested RMB 100,000 in helping the village construct roads. Building an online trading platform to promote the development of local industries • The Group helped renovate 50 dilapidated houses in the village, benefiting 177 people. Jiancao • A total of 44 households with 140 villagers in total benefited from the resettlement policy, of which 23 people from 13 Village households were resettled by centralized resettlement, 17 people from 4 households were resettled in Xiema Town, and 100 To accelerate the pace of lifting villagers of Changping Town, Nanzhang County out of poverty, the village committee established people from 27 households were allowed to build houses elsewhere. the Zuyong Edible Fungi Planting Professional Cooperative. However, as the cooperative lacked a professional technical team and • The Group completed the construction of a 100 m3 reservoir to make it easier for local residents to get access to clean operating funds, it had relatively narrow sales channels that supported only small-scale and small-batch transactions, seriously affecting water. local economic development. For this reason, Xiangyang International Land Port Investment Holding Co., Ltd., relying on rich resources of the Xiangyang Free Trade Zone, introduced the “industrial e-commerce + supply chain finance” model and established an online • The Group built four large water towers and four small water towers to tackle seasonal water scarcity. trading platform to serve cooperatives and manufacturing enterprises from the upstream and downstream of the edible fungus industry, Shengshiping • The Group constructed the Bianmin Bridge in Shengshiping Village. contribute to the large-scale sales of edible fungi, and improve the overall industrial operation efficiency through big data. In the future, Village • The Group promoted the construction of river embankments and dams in Shengshiping Village and the 2-km road that leads Xiangyang International Land Port Investment Holding Co., Ltd. will continue to integrate industrial resources and provide more financial to the village. services to local cooperatives and poor households, thus promoting the development of local industries and helping local residents get rid of poverty. Lujiayoufang • The Group fixed a drawbridge. Village • The Group hardened 1 km of road.

67 68 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

Promoting the “toilet revolution” to optimize the living environment HJGT vigorously promotes the volunteer spirit of “dedication, friendship, mutual assistance, and Providing progress”, and promotes the establishment of youth volunteer teams at the headquarters and subsidiaries of the Group in accordance with the Implementation Plan for the Youth Volunteer Team The “toilet revolution” is significant to the improvement of the living environment in the countryside, which creates health, social, and of HJGT. We organize employees to enter neighborhoods and universities to provide voluntary ecological benefits. The Three-Year Action Plan for the Rehabilitation of Rural Human Settlements passed at the first session of the 19th Volunteer services, such as maintaining stability, guiding citizens to behave responsibly, helping the elderly and meeting of the Central Commission for Comprehensively Deepening Reform adopted “toilet revolution” as a national strategy. Services the disabled, caring for left-behind children, launching health-related activities, visiting and sending Since the implementation of the Three-year Action Plan for the “Toilet Revolution” in Baokang County (2018-2020), HJGT has fully gifts to needy families, and assisting victims of natural disasters, which demonstrated the Group responded to policy requirements. We have promoted the “toilet revolution” in Jiajiaojian Village, strengthened the construction, use, high degree of responsibility. In 2019, HJGT provided 6,520 hours of volunteer services in total. management, and maintenance of harmless sanitary toilets in rural areas, and guided the public to develop good hygiene habits,

striving to control the spread of diseases from the source and bring fundamental changes to the sanitation situation in rural areas. With Public safety •  Guiding citizens to travel responsibly such efforts, we hope to contribute to the construction of beautiful rural areas, revitalize and develop rural areas, and improve the living conditions of rural households. In 2019, we invested RMB 36,600 in rebuilding or building 49 public toilets. •  Initiating a blood drive, through which more than 150 employees donated 35,800 ml of blood in total Public welfare •  Organizing publicity campaigns on legal and financial knowledge

Environmental •  Carrying out voluntary tree planting, protection of the Han River, and plastic waste collection activities protection To implement the guiding principles of the 19th CPC National Congress, accelerate the building of a moderately prosperous society in all respects, wrap up the 13th Five-year Plan successfully, • Cooperating with the China Development Bank to launch the “Colorful Classrooms” teaching support project at Deepening Education and benefit needy people in urban and rural areas with the achievements of reform and Shuangbai Central Primary School, Nanzhang County Partner opening up, HJGT has deepened partner assistance based on door-to-door surveys and industrial assistance, striving to drive the development of backward areas with the support of Assistance relatively developed areas and help poor households to get rid of poverty. To further consolidate the results of poverty alleviation, the Group’s poverty alleviation teams established partner Carrying out the Learn from Lei Feng Day campaign continuously to promote Lei Feng spirit assistance relationships with 41 people from 16 poor households.

The Group actively fulfills social responsibility as a state-owned enterprise and has insisted on carrying out the Learn from Lei Feng Day campaign in March Door-to-door publicity each year. Through regular voluntary service activities, we earnestly enhance We disseminated the Party’s new policies on targeted poverty alleviation among poor households to guarantee that all poor people enjoy the young employees’ sense of social responsibility and deepen employees’ benefits. Besides, we asked villagers to fill in the poverty alleviation manual door to door to collect information for efficient poverty alleviation understanding of the volunteer spirit, thus providing strong moral support for and helped poor households solve problems they encountered during production and daily life in a timely manner. the reform and development of the Group.

Boosting the development of local industries The Group assisted Jiajiaojian Village to develop tobacco, gastrodia elata, and other sectors to consolidate the results of poverty alleviation efforts.

Representatives of HJGT visit poor households in partner assistance relationship with the Group Caring for left-behind children Voluntary blood donation

69 70 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

CSR Honors Outlook 2020

The year 2020 is the last year for securing a decisive victory in building a moderately prosperous society in all respects and for wrapping up the 13th Five-year Plan successfully and launching the 14th Five-year Plan. We will continue to follow the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implement the requirements put forward by Party meetings, and earnestly fulfill tasks required by Evaluation Agency Honorary Title the government. Upholding the positioning as an urban comprehensive operator, a public product and service provider, and a state-owned capital investment operator, we will focus on improving the modern enterprise system and deepening delicacy management, and driven by reform and innovation, we will solidly promote high-quality corporate development and build an excellent state-owned capital operation group that serves The Communist Youth League of CPC Hubei Provincial  “Achieve Ambitious Goals in Building HJGT With Youth Power” - urban development. Committee ★ Outstanding Youth Teams of Hanjiang Guotou Group Strengthening Party building. Excellent Unit for Comprehensive Management of Public Security The Municipal Party Committee of Xiangyang Firmly upholding the leading role of high-quality Party building in boosting high-quality development, we will vigorously promote the in-depth ★ (Safe Unit) integration of Party building and business development, continue to carry out campaign on the theme of “staying true to our founding mission”, strengthen the building of the team of Party members, optimize the setting of Party organizations, and strengthen all levels of Party organizations’ Municipal Party Committee of Xiangyang，Xiangyang An advanced unit in comprehensive evaluation in 2018 and 2019 ability to innovate, power to unite, and energy to fight. Municipal Peoples Government ★ Promoting IT-based management. Xiangyang Comprehensive Deepening Reform Leading The Excellent Grade of Deepening the All-Round Reform in 2018 To promote a “digital and smart HJGT”, we will, based on the needs of the Group’s strategic transformation and the innovation of business and Group ★ and 2019 management model, build a digital management platform and a data sharing platform to promote the interconnection and interoperability of data resources and efficient business collaboration, thus empowering high-quality development of the Group with digital technologies. The Outstanding Enterprise in Conducting Targeted Poverty Leading Group for Poverty Alleviation of Xiangyang ★ Alleviation in 2018 Serving urban development. Resolutely undertaking the mission of serving urban development and integrating the Group’s development direction with the long-term Leading Group for Style Construction of Xiangyang Outstanding Collective of “Year of Implementation” development plan of Xiangyang City, we will comprehensively promote the development of the six major business sectors, namely housing, ★ engineering construction, transportation, environment and energy, health and cultural tourism, financial and international businesses. We will make

Civil Affairs Bureau of Xiangyang, Education Bureau of great efforts to promote health, education, smart city, and other projects that can help improve the people’s livelihood, form a business model Xiangyang, Charity Federation of Xiangyang, Poverty The Most Loving Unit in the “Childhood Dreams, Read For You” integrating “production, investment, and financing” with industrial operations as the core, enhance Xiangyang’s comprehensive competitiveness, Alleviation and Development Office of Xiangyang, Cares for ★ Donation Campaign to Left-behind Children in 2019 and contribute to building Xiangyang into “the provincial sub-center, the heartland of the Han River Basin, and an important growth pole for the the Next Generation Working Committee of Xiangyang green development of the Yangtze River Economic Belt”.

Protecting the environment. Trade Union of Xiangyang Xiangyang May 1st Labor Award ★ We will continue to control and fight pollution, and speed up the environmental protection to facilitate the building of a moderately prosperous society in all respects. We will attach importance to environmental governance and improvement in the production and operation process while Trade Union of Xiangyang Xiangyang “Workers Vanguard” continuing to reduce the emission of pollutants, saving energy and increasing efficiency. We will keep improving the living environment of towns ★ and villages, enhancing the image of the city, and protecting the ecology of the Han River basin.

Deepening win-win cooperation. Trade Union of Xiangyang City-Level Model Workers’ Home ★ We will continue to leverage the Group’s strengths in management, personnel and capital, and uphold the principle of “mutual trust and win-win development” while deepening cooperation with the government, universities, media, and financial institutions in areas such as new urbanization, Building Up Successful Career Model for Female Workers in Trade Union of Xiangyang smart city development, cooperatively-run schools as well as integrated elderly care and medical services. We will establish effective cooperation ★ Xiangyang mechanisms with our partners, and share with them fruits of development.

Helping employees grow. Trade Union of Xiangyang Xiangyang Advanced Female Workers Organization ★ Adhering to the principle of introducing talents according to strict standards, training talents in an all-round way, and using talents scientifically, we will protect the rights and interests of employees, improve the compensation and benefits system, improve the inclusive and multi-level talent The Municipal Party Committee of Xiangyang Excellent Unit for Communist Youth League Work training system, and make the training brand “Xiangtou Xiangzhi” better. We will continue to cooperate with domestically well-known colleges and ★ universities to co-organize official training programs to promote the high-quality building of the official team, and at the same time, we will organize cultural and sports activities, such as the Spring Festival Gala, sports meets, basketball games, and youth exchanges, to provide employees with Hubei Association of Municipal Engineering The Silver Award for Municipal Demonstration Project in 2019 a safe, warm and reliable growth environment. ★ Engaging in public welfare. Landscape Architecture Society of Hubei province The 2019 Hubei Province Quality Landscaping Project Firmly grasping the precious opportunity provided by the last year for securing a decisive victory in building a moderately prosperous society ★ in all respects, we will earnestly promote targeted poverty alleviation, strengthen our support for people in need, and further consolidate our poverty alleviation results. We will continue to play the leading role of the volunteer service team while reaching to remote mountainous areas, The 2019 Xiangyang City Excellent Apartment Design and Garden Real Estate Industry Association of Xiangyang ★ Design such as Nanzhang and Baokang, to carry out voluntary education and charitable donations and support the construction of basic facilities, thus contributing to the development of remote areas and assume the responsibility as a state-owned enterprise.

71 72 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

Expert Opinion

Cheng Duosheng Yin Gefei Director of Enterprise Innovation Department, China Enterprises Confederation Joint Secretary-General of the ISO 26000 Stakeholder Global Network (SGN)

HJGT Social Responsibility Report 2019 is the second sustainability report issued by HJGT. The report fully demonstrates the practice HJGT Social Responsibility Report 2019 is the social responsibility report issued by HJGT. Through the report, I see HJGT’s attempts in and performance of HJGT as a state-owned enterprise on actively carrying out its mission of “Serving Urban Development, Bearing the deepening stakeholder communication and social responsibility management, as well as its determination and positive actions of “Building Responsibilities of SOEs” and creating comprehensive economic, social and environmental values together with stakeholders. an Excellent State-owned Capital Operation Group that Serves Urban Development”. The report, in light of the positioning of HJGT, focuses on the main thread of “HJGT Remains True to the Original Aspiration to Serve High-quality Urban Development” and shows the Group’s CSR The report indicates HJGT’s great sense of responsibility of serving urban development. As “an urban comprehensive operator, a public achievements by making continuous improvements of service capabilities, tapping the full potential of urban resources, and providing the people product and services provider, and a state-owned capital investment operator” HJGT has delivered high-quality public products and services to with high-quality products and services. At the same time, each chapter, through detailed actions and data, illustrates HJGT’s typical CSR the people through efficient allocation and intensive operation of various urban resources, provided long-term, low-cost investments and financing practices and latest developments in a vivid and all-round way. support for Xiangyang’s urban development, and facilitated the “Growth Pole with Two Centers” construction of Xiangyang, fully reflecting the mission of serving urban development. Deepening CSR management and promoting CSR integration. HJGT is committed to the mission of “Serving Urban Development, Bearing the Responsibilities of SOEs” and upholds the values of “Loyalty, Responsibility, Expansion, Sustainability”. Starting with the top-level design The report implies HJGT’s aspiration of serving the people’s livelihood. HJGT integrates corporate development with ecological progress, and taking the Group’s development strategy into consideration, the report analyzes the opportunities and challenges in CSR management, targeted poverty alleviation, and public welfare, and gives back to society with concrete actions. HJGT promotes the R&D and application of puts forwards the CSR management strategy, and establishes the organizational system of CSR management. This provides mechanism, green products, and carries out projects in such fields as clean energy development, resources recycling, and urban landscaping, reflecting organizational, and resource guarantees for the social responsibility work of the Group, enhances HJGT’s ability to serve urban development and HJGT’s determination of protecting lucid waters and lush mountains. Moreover, HJGT earnestly carries out targeted poverty alleviation. It carry out comprehensive urban operation, and make new contributions to realizing the goal of building the “Growth Pole with Two Centers” of promoted in-depth poverty alleviation through developing industries and building infrastructure projects in Jiajiaojian Village to lead the villagers Xiangyang. to lift themselves out of poverty. At the same time, a youth volunteer service team was set up to carry out voluntary service activities, such as maintaining stability, guiding citizens to behave responsibly, helping the elderly and the disabled, and caring for left-behind children, demonstrating Gathering advantageous resources and demonstrating a great sense of responsibility. Centering on the positioning of “a urban comprehensive HJGT’s sense of responsibility by contributing to the development of people’s livelihood. operator, public product and service provider and state-owned capital investment operator”, the report demonstrates the Group’s key role in urban infrastructure construction and operation as well as its practices and performance of serving the high-quality development of Xiangyang The report also manifests that HJGT values and actively responds to the requests of stakeholders. HJGT establishes close ties between its City from three aspects, namely “Coordinating Urban Operation” “Providing Public Products and Services” and “Investment and Operation of businesses with the needs and expectations of stakeholders, including shareholders, the government, partners, and employees, and shows an State-owned Assets”. As for the first aspect, HJGT continuously develops “smart transportation” “smart water services” “smart elderly care” and excellent corporate image in all aspects of social responsibility fulfillment. For its shareholders, HJGT optimizes capital use, standardizes capital “international trade” and serves the city as well as local industries and citizens through efficient allocation and intensive operation of various urban operation, pays attention to compliant, trustworthy, stable, and efficient management, thus creating long-term values. For its partners, HJGT resources, to improve the quality of urban development. In terms of “Providing Public Products and Services”, HJGT develops comprehensive conducts multi-dimensional cooperation and exchanges to seek win-win results. For its employees, HJGT protects the rights and interests plans and implements effective measures in such key fields as housing, urban infrastructure, education, and elderly care, to serve the supply and of employees and attaches importance to employee development as well as to the enhancement of employees’ sense of achievement and demand of public products and public services. For the “Investment and Operation of State-owned Assets”, HJGT makes full use of the scale belonging. effect of state-owned capital and the synergies of different resources through market-oriented approaches, such as industrial guidance, assets I look forward to HJGT’s persistent improvements in the future, and I also hope that HJGT will uphold its mission of serving urban development to operation, and capital operation. All of the above measures fully reflect HJGT’s effective actions in improving people’s livelihood in Xiangyang, as make another brilliant achievement. well as the concept of win-win cooperation and value sharing with stakeholders, including employees, partners, and communities.

Deepening information disclosure according to industry features. The report gives a detailed introduction of the Group’s entire process of studying, identification, and prioritization of material topics, and fully demonstrates the objectivity and scientific nature of the disclosure of core topics therein. Through efficient identification of key topics related to CSR management during the reporting period, featured CSR topics, such as “Green Investment” “Construction of Livelihood Projects” “Strategic Cooperation” and “Risk Prevention and Control” are screened out to make the information disclosure of the report more industry-specific and targeted. At the same time, the stakeholders may have a more profound and comprehensive understanding of the mission and responsibility of HJGT in serving urban development, which enhances stakeholders’ recognition of HJGT and improves the brand image of the Group.

A new journey is launched in the new era. I look forward to HJGT’s persistence in its mission and responsibility. I also hope that HJGT will continuously innovate in its communication methods, enhance its core competitiveness, and create shared values for stakeholders, thus making great contributions to Xiangyang’s high-quality development.

73 74 Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

Report Rating

Rating Report of HJGT Corporate Social Responsibility Report 2019 Balance （★★★★☆） The Report discloses negative data such as “employee turnover rate” “number of major safety accidents” “work-related deaths” and “number of employees accountable for violations of rules”, showing outstanding balance. Entrusted by Hanjiang Guotou Group Co., Ltd., the Chinese Expert Committee on CSR Report Rating selected experts to form a rating group to evaluate the HJGT Corporate Social Responsibility Report 2019 (hereinafter referred to “the Report"). Comparability （★★★★） The Report discloses the comparative data of 20 key indicators such as “revenue” “net profit” “carbon emissions” “sulfur dioxide emissions” “hydropower Rating Basis generation” “number of installed PV units” for more than two consecutive years. “It also compared the Group’s rank in the domestic entity credit rating Guidelines on Corporate Social Responsibility Reporting for Chinese Enterprises (CASS-CSR 4.0) issued by Research Center for Corporate Social (26th)”. The Report also indicates excellent comparability. Responsibility of the Chinese Academy of Social Sciences, and Rating Criteria of CSR Reporting in China (2020) issued by Chinese Expert Committee Readability on CSR Report Rating. （★★★★☆） The Report systematically shows the CSR philosophy, practice and achievement on key issues from six dimensions. The framework is clear and the key issues are highlighted. It responds to the expectations and demands of stakeholders, and interprets the profound understanding of the Group for Rating Process corporate social responsibility. The cross-page chapters use panoramic pictures to vividly present the main business elements, and briefly disclose The rating group examined and confirmed the Confirmation Letter of Procedural Materials of the CSR Report submitted by the reporting preparation the Group’s policy response, CSR topics and actions, which is concise and comprehensive, and enhances the readability of the Report. In the report, group and the relevant supporting materials; QR code is embedded in many parts to extend the report content, which strengthens the communication value of the Report. Thus, it shows leading The rating group evaluated the preparation process and content of the Report and drew up the rating report; performance in terms of readability. The Vice-Chairman of the Rating Expert Committee, the head of the rating group and the expert of the rating group jointly signed and reviewed the Rating Report. Innovativeness （★★★★☆） At the beginning of the Report, the “CSR Feature: HJGT Remains True to the Original Aspiration to Serve High-Quality Urban Development” focuses on Rating Conclusion the highlights of HJGT’ implementation of macro policies, embodying the responsibility of a state-owned enterprise. The Report also responds to the Process United Nations Sustainable Development Goals (SDGs), and thus shows the industry leading role of HJGT and makes the Report echoes with the times. （★★★★☆） The introduction of third-party report rating for the first time not only enhances the standardization of report content, but also promotes the improvement The Group established the Social Responsibility Leading Group, the Strategy Development and Research Department took the lead in establishing a of report management, indicating the leading position in innovativeness. social responsibility report preparation group, and the deputy general manager is responsible for controlling the key links and the final review of the report. The Report is positioned as an important tool to disclose the CSR practice and achievement and strengthen the communication among stakeholders, Overall rating showing clear functional value orientation. The material topics are identified according to national macro policies, international and domestic social （★★★★☆） According to the evaluation of rating group, HJGT Corporate Social Responsibility Report 2019 is a four and a half star report, a leading CSR report. responsibility standards, industry benchmarking analysis, major corporate events, stakeholder surveys, etc. The Group is planned to release the report through its official website and present the report in the form of electronic and printed version in Chinese and English, H5 version, etc., showing leading process performance. Suggestions for improvement HJGT is suggested to enhance the disclosure of core indicators about the industry and improve the completeness of the Report. Materiality （★★★★☆） HJGT is suggested to increase the detailed disclosure of the inadequacies of CSR performance to further improve the balance of the Report. The Report systematically discloses the key issues in the industry, such as project quality management, technical innovation, occupational health management, work safety guarantee, research and application of environmental protection technology and equipment, energy conservation, reduction of “three wastes" and environmental treatment around the plant area, etc. It indicates a leading role in materiality.

Completeness （★★★★） The main content of the Report systematically discloses 76.54% of the core indicators in the industry from the perspectives of “Creating Values for Long- term Development by Stable Operations" “Committing to Our Mission to Serve Urban Development" “Protecting Eco-environment Through Clean and Low-carbon Production" “Pursing Stable and Long-term Progress by Mutually Beneficial Cooperation" “Putting People First to Create a Wonderful Life for Employees" and “Contributing to the Society to Build a Happy Homeland". The Report is excellent in terms of completeness. Vice chairman of the rating Leader of the rating team Expert of the rating team Scan to see corporate expert committee rating files

Process Evaluator: Ren Jiaojiao Issuing date: August 5, 2020

75 1 Hanjiang Guotou Group Co., Ltd. was founded in November 2017. Therefore, the performance appraisal could be based on two consecutive years of 76 longitudinal comparable performance. Hanjiang Guotou Group Co., Ltd. Corporate Social Responsibility Report 2019

Content Index Feedback

Dear readers: Report section CASS4.0 Thank you very much for reading the HJGT Social Responsibility Report 2019. We look forward to receiving your feedback on the CSR About the Report P1.1-1.3, G5.2 management, practice and report of HJGT. Your opinions and suggestions are the important basis for us to continuously improve our CSR Message from the Chairman P2.2 management and practice. About Us P4.1, P4.4

Business Segments P4.2

Corporate Culture P4.1, G1.1-1.2 Selective questions: (Please tick "√" in the corresponding boxes) Development Strategy G2.3

Corporate Governance M1.1-1.2 This report can reflect the significant impact of HJGT on economy, society and environment:

CSR Management G6.1-G6.2, G2.1, G3.1-3.3 Feature: HJGT Remains True to the Original Aspiration to Serve High- Yes Average No P3.1, P4.3, M1.1, S1.4 □ □ □ Quality Urban Development The analysis of stakeholders identified in this report and their relationship with HJGT is accurate and comprehensive: Creating Values Sticking to Party leadership M1.1, M1.3 for Long-term Deepening the SOE reform M1.1, S1.4 Development by Yes Average No Stable Operations Prudent and sound operations S1.1-1.2, M1.3-1.4 □ □ □

Committing to Coordinating Urban Operation P3.1-P3.2, M2.1, S4.5 The information provided in this report is comprehensive: Our Mission to Providing Public Products and Services P4.3 Serve Urban Development Investment and Operation of State-owned Assets G2.3 Yes Average No □ □ □ Protecting Eco- Adopting Green Operations E1.1-1.5, E2.1-2.3 environment The information provided in this report is readable: Engaging in Environmental Protection Through Clean E1.7-1.9, E2.6-2.8, E2.11-2.18, E2.23-2.25 IndustriesPromoting Green Finance and Low-carbon Production Promoting Green Finance E3.3, E3.4 Yes Average No □ □ □ Deepening Cooperation and Communication M1.1, M1.3 Pursing Stable and Long-term Building a Responsible Supply Chain M3.1, M3.3, M3.7-3.8, M3.10, M3.13-3.15 Progress by Open questions Mutually Beneficial Promoting Work Safety S3.1-3.4, S3.6-3.7 Cooperation Customer Relations Management M2.1-2.1, M2.4-2.6, M2.9, M2.13-2.15 If you have other suggestions and opinions on our social responsibility work and the report, please send your feedback to us. Guaranteeing Employees’ Rights and P3.1-3.2, S2.1-2.10 Putting People Interests First to Create a Wonderful Life for Supporting Employee Development S2.14-2.16, S2.20 Employees Caring for Employees Physical and Mental Health S2.17-2.18

Supporting Poverty Alleviation S4.6, S4.12-4.14 Contributing to the Society to Build a Deepening Partner Assistance S4.12 Happy Homeland Contact information Providing Volunteer Services S4.10-4.11

CSR Honors A3 Add No. 176 Shengli Street, Xiangcheng District, Xiangyang, Hubei Province, China ： Outlook 2020 A1 Tel 0710-3531998 ： Content Index A5 E-mail: [email protected] Expert Opinion A4

Report Rating A4

Feedback A6

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