Annual Report 2021

47 2021 Annual Report Transport International Holdings Limited Supply Chain Management We believe an integrated upstream supply chain management is key to quality and logistics control. We work closely with our business partners to develop new buses and services that are adapted to the local climate and operational environment, with energy efficiency and the latest emission standards as our top priorities. We encourage fair and open competition with the aim of developing long-term relationships with suppliers based on mutual trust. Our supply chain policies and procedures are in place to ensure ethical procurement of supplies and services, which allow us to deliver high-quality end products that our customers can trust. In 2021, KMB and LWB worked with 400 local and 38 non-local suppliers, of which 254 suppliers were newly added. The proportion of spending on local suppliers was 60%. Our Green and Sustainable Procurement Policy spells out the environmental and social risk considerations that should be taken into account in every purchasing decision. To ensure our suppliers comply with our social and environmental requirements, we require all of them to declare compliance with our guidelines upon supplier registrations: Environmental care; Health and safety; The prohibition of forced and child labour; and Anti-corruption. Procurement and Tendering Procedures Our criteria for procurement and tendering of services and goods are based on price, quality, requirements, green and sustainable procurement and other relevant factors. The principles of our procurement and tendering procedures are as follows: Impartial selection of capable and responsible suppliers; Fair competition; Selection of appropriate contract types according to requirement; Compliance with laws, relevant regulations and contractual obligations; Consideration on environmental and social factors; and Adoption of an effective monitoring system, management controls and practices: to prevent bribery, fraud or other malpractices; and to ensure the declaration of conflicts of interests by staff involved in the selection.