Zhongtian International : Environmental, Social and Governance Report For the year ended 31 December 2019

TABLE OF CONTENTS

1. Employment and Labor Practices

1. "Environmental, Social and Governance Reporting Guide" by The Stock Exchange of

1. ABOUT THIS REPORT

The board of directors (the "Board") of Zhongtian International Limited (the "Company") is pleased to present this Environmental, Social and Governance (hereinafter called "ESG") Report (the "Report") of the Company and its subsidiaries (collectively as the "Group" or "we"). This ESG Report summarizes the policies, sustainability strategies, management approach, initiatives and performance made by the Group in the environmental and social aspects of its business.

The ESG Report covers the environmental and sustainable development strategies and policies of Group's business in the property investment, property sale, mortgage financing and renovation services for the year ended 31 December 2019. The Report discloses the required information under the "comply or explain" provisions of the ESG Reporting Guide set out in Appendix 27 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited ("HKEX"). The relevant provisions and details are listed out at the end of the Report.

The Board is responsible for the Group's ESG strategy formulation and reporting, evaluating and determining the Group's ESG-related risks, and ensuring that appropriate and effective ESG risk management measures and internal control systems are in place. In order to determine the ESG reporting scopes, the key management personnel have discussed internally and identified the environmental, social and operating items; and assessed their importance to the stakeholders and the Group. The summary of material ESG items are listed out in Section III of this report.

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1. STAKEHOLDERS' ENGAGEMENT

The Group is committed to maintaining the sustainable development of its business and the environmental protection of the communities in which it operates. We maintain a close tie with its stakeholders, including government/regulatory organizations, shareholders/investors, employees, customers, suppliers, community, etc. and strives to balance their opinions and interests through constructive communications in order to determine the directions of its sustainable development. We assess and determine its environmental, social and governance risks, and ensures that the relevant risk management measures and internal control systems are operating effectively. The following table shows the means of communication with the stakeholders and the management response to the stakeholders' expectations and concerns:

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III. MATERIALITY MATRIX

During the reporting period, the Group has evaluated a number of environmental, social and operating items, and assessed their importance to stakeholders and the Group through various channels. This assessment helps to ensure that the Group's business objectives and development direction are in line with the stakeholders' expectations and requirements. The Group's and stakeholders' matters of concern are presented in the following materiality matrix:

MATERIALITY MATRIX

IV. ENVIRONMENTAL PROTECTION

The Group strictly follows the environmental policy in "Energy saving and carbon reduction, and compliance with laws and regulations" in response to the global environmental protection trends and to fulfill its social responsibilities. The Group promotes energy conservation, reduce emission of pollutants and mitigate environmental risks through various measures and actions (Please refer to the "Management of Emissions" and "Management of Resources Utilization" sections below for details), including compliance of the applicable laws and regulations, ensuring efficient use of energy, water and other resources during operations, adopting various measures to raise staff awareness in environmental protection, and management monitoring of the implementation of environmental policies. We are working in a way to enable all levels of our employees to realize their impact on the environment, and to strike a balance between simultaneous development of stable business growth and implementation of environmental protection measures, so as to reduce the adverse effects on the environment brought by the enterprise's business activities and the employees' personal life.

1. Management of Emissions

The Group engages in property investment, property sale, mortgage financing and renovation services, and did not involve in any production activities. Therefore, no packaging materials is used nor any hazardous wastes is produced. Discharge of chemical and wastewater containing hazardous substances into water pipelines are prohibited. Our impact on the environment mainly comes from the use of energy, generation of office and domestic wastes, and discharge of domestic wastewater. We also understand that energy consumption and greenhouse gas emission are closely related and thus we undertake various energy saving measures to reduce energy consumption and to enhance energy efficiency. Waste management mainly involves domestic garbage and collection of waste paper for recycling. Please refer to the "Management of Resources Utilization" section below for details.

Compliance

During the reporting period, the Group did not involve in any confirmed violations or suspected violations that are related to emissions that have a significant impact on the Group.

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2. Management of Resources Utilization

In order to comply with the "Law of the People's Republic of China on Energy Conservation" and other local laws and regulations, the Group carefully manages the use of resources and is committed to ensuring that all resources are used in an efficient and prudent manner. We continually seek to identify and reduce environmental impacts attributable to our operational activities, demand our employees to focus on energy conservation and to follow our environmental policies and measures so that resources can be utilized to the fullest extent and to avoid any wastage.

Management of Energy Utilization

Conservation of Gasoline

Gasoline are mainly used in vehicles. The Administrative Department uses fuel card to control and monitor fuel purchases. Drivers have to plan their routes in advance before departure; for example, when passengers are going to the same or nearby locations, the same vehicle should be used so as to shorten the driving distance and to reduce the consumption of gasoline. We carry out regular repairs and maintenance on vehicles for better energy use efficiency, and to reduce fuel consumption and waste gas emissions due to part failure. We also encourage employees to use public transport to reduce the use of vehicles. During the reporting period, the Group consumed approximately 12,399.35 liters of gasoline, representing a decrease of approximately 10,876.67 liters or 46.73% as compared with the previous year. Due to the increased business travel in 2019, the vehicle use frequency has dropped accordingly, and led to a significant drop in gasoline consumption.

Conservation of Electricity

The Group consumes electricity mainly in offices. We set up a series of measures to save electricity and to improve the energy use efficiency for electrical appliances, and to educate employees on the relationship between energy use and sustainability of the planet, and to raise their awareness of conservation so that they can build good habit in use of electricity; for example, use of intelligent power system, and promote the use of energy-efficient lighting. Electrical equipment, including lighting, air-conditioners, computers, personal electronic devices and common office equipment, etc. are turned on according to actual need during office hours, and staff are encouraged to switch off the equipment when it is not in use and also after work. The temperature and duration of use of air-conditioners are strictly controlled. We use central heating system to reduce the use of air-conditioners. We pay attention to the maintenance of electrical equipment to keep them in good condition and to use electricity effectively. During the reporting period, the Group consumed 21.92 megawatt hours ("MWh"). Although we have held a number of internal meetings during the year, with our employees active support to the electricity saving measures, the overall electricity consumption has decreased approximately by 2.23MWh or 9.23% as compared to last year.

Water Conservation

The Group used water mainly in restrooms and water is supplied and managed by the property management company. Although we do not encounter any water supply problem during the reporting period, we have taken various measures to raise the water resources use efficiency, to reduce the impact on the environment and to educate our employees to save water in daily life. For example, we check the water pipes for leaks and faucet for rebound, etc. after work, and keep maintenance records. During the reporting period, the Group consumed approximately 325.00 tonnes of water. Due to leakage at water pipes, and a number of internal meetings were held during the year, water consumption has been increased by approximately 52.00 tonnes or 19.05% as compared with the previous year.

Paper Conservation

The Group promotes the "green office" policy, encourages staff to save paper and avoid wastage. We distribute information and documents in electronic format to minimize photocopying and printing. We also fully utilize paper by reusing one-sided used papers, collect double-sided waste papers in recycling collection boxes and pend for collection by recycler. During the reporting period, the Group consumed approximately 0.16 tonnes of paper. As we are in the early stage of the land development project, a lot of printing relating to design drawings is needed to facilitate discussion in design meetings, and therefore, the paper consumption has increased by about 0.13 tonnes or 433.33% as compared with the previous year.

3. The Environment and Natural Resources

The Group has always been focusing on protecting the environment and hope that everyone can contribute and work together to build a livable society. In order to let everyone of the Group have better understanding of the negative impact of our business activities on the environment, we continue to adopt various policies, measures, and actions in reducing carbon footprint. (Please refer to "Management of Emissions" and "Management of Resources Utilization" above for details).

The Group will continue to revisit and identify the sources of wastes produced in operations, to evaluate the impacts on the environment for use of resources, so as to establish and implement effective measures including promotion of energy conservation and emission reduction, extensive use of energy-saving products, and the best use of office resources to minimize our carbon footprint. We constantly enhance our employees' awareness in environmental protection and resource conservation, and to fulfill our social responsibilities and obligations in the process of conducting and developing our business, so as to achieve coordinated development of the Group, the society and also the environment together.

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Development and Training

The Group has always paying attention to talent cultivation and committed to staff training and development, and encourage self-enhancement. We provide on-the-job training and mentorship for new hires to help them adapting to the new work environment quickly, and enhance team communication. Various trainings are provided to new hires, including organizational structure, corporate culture, business, policies and procedures, business ethics and conduct, industry knowledge, job responsibilities, etc.. During the reporting period, other training topics include fire prevention, anti-corruption and so on.

Health and Safety

The Group pays attention to its employees' health and provides a safe work environment, we formulated "Office Environmental Safety Management Standard"; strictly implement office environment sanitation and fire safety management to prevent occupational hazards which might lead to staff injury. All employees have to seriously follow the established safety and fire prevention measures, including unauthorized installation of power sockets are not permitted; electrical appliances in the offices should be disconnected when not in use; users have to switch off the air-conditioners, water heaters, etc. in conference rooms and offices after work or meeting; smoking in the office and carrying flammable, explosive, highly toxic, radioactive and other dangerous substances to offices are absolutely prohibited; fire extinguishers must not be moved without permission; all doors (main entrance and fire exit door) are all automatic and should not be disabled or interrupted. We also have clear evacuation procedures in case of fire outbreak in offices to ensure our employees are able to take sensible and immediate action. Each employee should be familiar with the location of fire extinguishers and participate in fire drills organized by the property management company to familiarize themselves in using fire extinguisher.

Compliance

During the reporting period, the Group did not involve in any non-compliance incidents relating to employment, health and safety, and labor standards that have significant impact on the Group.

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VI. OPERATING PRACTICES

Supply Chain Management

The Group conveys its concerns on environmental issues to its suppliers and business partners, and expects them to implement similar practices. The Group also serves to maintain long-term, stable and strategic cooperative relationships with leading suppliers, and co-develop with its suppliers on the basis of equality to achieve a win-win situation. In order to establish an efficient and green supply chain system, we select suppliers and service providers with good credit history, reputable, high product and service quality, proven track records of environmental compliance and sound commitment to social responsibility. We conduct regular performance review of our suppliers and service providers with an aim to effectively control our products and service quality.

Service Responsibility

The Group clearly understands that customer satisfaction is vital to its sustainable business growth, therefore, the Group has prepared a customer service handbook so as to monitor the customer service processes, maintain communication with customers, understand and meet the customer needs and expectation, and to make continuous improvements.

We deal with tenants' recommendations and complaints proactively. Tenants can submit their complaints in person, in writing, by phone and email, etc.. We have to understand the issues of the complaints in detail (like whether it is about the equipment in the leased properties, staff attitude problem, service quality issue, unexpected incidents, etc.). Customers' complaints relating to the equipment in the leased properties mainly include air-conditioning, illumination, water supply, electricity supply, elevator and so on. We inspect, repair and maintain the equipment regularly to reduce the chance of incidents. When we receive the tenants' complaints involving equipment, we carry out inspection on-site, take appropriate actions, assign designated staff to follow up the issue and keep the tenants informed about the progress. This is to ensure that our tenants are satisfied with our services. Unexpected incidents include water leakage into the leased properties due to rain, car scratch in the parking area and so on. We try our best to resolve the complaints. In case that the issues could not be resolved, we will inform the tenants sincerely and patiently and hope that they can understand and accept.

Confidentiality is one of the Group's core values. Therefore, we handle customers' personal information with integrity and caution. Customer data are kept and maintained by designated personnel assigned staff and they have to comply with our internal requirements in confidentiality. Duplication of customer data is not allowed unless with prior approval from General manager or Deputy General manager. In case of unauthorized disclosure of customer information, staff will be warned and penalized with performance pay deducted. If significant economic loss is caused by the incident, the staff involved will be dismissed and required to compensate the company partially for the loss resulted.

During the reporting period, the Group's services did not involve in any significant issue relating to violations nor did the Group receive any complaints concerning breaches of customer privacy and loss of data.

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Anti-corruption

Maintaining an ethical working environment is one of the Group's core values. We have adopted a zero-tolerance approach for all kinds of corruption, bribery and extortion situation. Therefore, we set up internal control system and sign the anti-corruption agreement with employees to regulate their conduct. Offenders who request and accept bribes, obtain other illegal interests are heavily penalized. We demand all employees to build a habit of strict compliance with policies and procedures, and to prevent all bribery. The employees who violate our Code will be severely penalized. We will terminate them or send them to the responsible department to initiate legal proceedings as punishment. We bring the disciplinary monitoring work in business process, ensure that there are channels for reporting suspected cases of obtaining personal interests in carrying out one's job duties, briberies, extortion, fraud, money laundering in breach of policies, regulations, and laws in strict confidence. The Group held an anti-corruption seminar during the year to provide their employees with information about various corruption crimes, related laws and punishment, and the company's preventive measures in anti-corruptions so as to illustrate to the employees about the company's determination in combating corruptions; we also hope that our employees can conduct business with loyalty, unity and integrity; to protect the company's image and to demonstrate good personal values. During the reporting period, the Group and our employees did not involve in any litigation cases of corruptions.

VII. COMMUNITY INVESTMENT

Ever since our establishment, the Group is a responsible taxpayer and offers job opportunities to local people to release the pressure from unemployment. We prepare and plan for our employees' retirement and paid "five insurances and housing provident fund". We run our business following good practices, actively promote green and environmental friendly concepts, and achieve a good development order; and to some certain extent, we have contributed to social stability and building a harmonious community.

VIII.VISION OUTLOOK

As a good corporate citizen, the Group strives to strike a balance between achieving the corporate economic goals and business objectives, and to fulfill their social responsibility. We will continue to evaluate our performance in environmental protection, employee care, service quality and community investment and to build edge for the sustainable development of the Group.

The Group will endeavor to comply with the stringent laws and regulations of environmental protection. We will also put employee satisfaction and occupational safety as our top priority. We aim at attracting more talents through providing a health and safe workplace, and competitive remuneration scheme. As for service quality, we will continue to invest resources to provide customers with high quality services. At the same time, we committed to fulfilling our social responsibility by actively participating in charitable activities and promoting the community's sustainable development.

The Group aspires to become a respectable enterprise. Going forward, the Group serves to enhance its business performance through implementation of sustainable development strategies and to generate more meaningful long-term value for the enterprise and its stakeholders.

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IX. ENVIRONMENTAL PERFORMANCE DATA SUMMARY

Note:

1. Scope 1 refers to the Group's business direct GHG emissions, including combustion of gasoline.
2. Scope 2 refers to the Group's business indirect GHG emissions, including consumption of purchased electricity.
3. Intensity is based on the number of employees.
4. Last year's comparative figures are restated to conform with the current year's presentation.

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1. "ENVIRONMENTAL, SOCIAL AND GOVERNANCE REPORTING GUIDE" BY THE STOCK EXCHANGE OF HONG KONG LIMITED

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Notes:

1. The Group's main business is property investment, property sale, mortgage financing and renovation services. We did not generate any hazardous wastes and use any packaging materials.
2. The Group's main business is property investment, property sale, mortgage financing and renovation services. The non- hazardous wastes are mainly domestic garbage and waste paper. As the Group does not have many employees, the employees generate little domestic garbage and waste paper, so there is no statistics for the amount of non-hazardous wastes generated.
3. Pursuant to Appendix 27 of the "Main Board Listing Rules", the KPIs under Area B "Social" are recommended disclosures only. Therefore, the Group chose not to disclose those KPIs in this report.

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