Page 31 -

Environmental, Social and Governance Report

OPERATING PRACTICES

Supply Chain Management

The Group had approximately 300 suppliers during the Reporting Period, who mainly supplied us with
TFT Displays, ICs, mechanical components,etc. We did not witness any significant change in geographical
locations of suppliers. Our suppliers are mainly from the People’s Republic of China, Hong Kong and Taiwan.

The Group endeavours to maintain an appropriate and legitimate supply chain management to promote
sound practices in our supply chain. We have a set of supplier management procedures and supplier
evaluation standards which are from time to time perform site inspection at suppliers’ premises in order to
evaluate and maintain the quality of the suppliers.

We maintain a long-term business relationship with our suppliers. China-based suppliers are preferred due to
cost advantage in transportation. However, we make strict assessment of our suppliers on cost, quality, and
delivery performance as required to fulfill their responsibilities under the procurement contracts. Our goal is to
maintain a healthy balance of suppliers on a comparable platform so that they can compete each other and
ultimately providing benefits to our company.

We also maintain close communications with our suppliers through telephone conference, site visits,
and email, to align them with the Group’s standards on legal compliance, social responsibilities, labour
standards, work safety and health, environmental protection and other aspects. We will evaluate internally any
suppliers who do not meet our requirements or fail to fulfill contract liability. These suppliers will be replaced
immediately and compensate any losses arising from their failure to fulfill contract liability.

Product Responsibility

Through strict implementation of the guidelines and policies, we undertake to provide quality products to
consumers. While we make products that satisfy consumer needs, we also carry out quality and safety
assurance works during manufacturing processes to ensure the products are able to pass the safety and
environmental standards of respective sale regions. We will promptly handle and investigate customer
complaints to facilitate improvement of our service and product quality.

1. Customer Satisfaction

To improve customer satisfaction, it is our policy to respond and handle quickly to customer complaints.
Customers’ feedback on our products is valuable as a drive force to keep us working better.

ALCO HOLDINGS LIMITED ANNUAL REPORT 2018 29