2023 Environmental, Social and Governance（ESG）Report
Zhejiang Xinao Textiles Inc.Address：Guanzhuang Bridge, Chongfu Town, Tongxiang City, Zhejiang ProvincePhone：0573-88455801
XINAO
CONTENTS
Common prosperity: Paint a rosy picture?Employee rights & bene?ts?Employee training & development?Occupational health & safety?Industry and People’s values
Key quantitative performance?Corporate Governance & Economic Performance?Environmental Performance?Social Performance
Glossary of proper nouns and acronymsIndex against the
Direction of the ReportLetter from the ChairmanAbout XINAO
ANNEX
?ESG philosophy & governance?Management of material topics
01 02
Robust: Consolidate Management
?Organization structure & functions?Invester protection?Internal controls & risk management?Compliance & business ethics
Ingenuity: Build excellence
?Product quality & safety?Scienti?c and technological innovation & intellectual property protection? Customer rights & interests?Information security & privacy?Responsible supply chains
03 04
?Environment management system?Low-carbon products & climate change adaptation?Recycling of resources?Pollutant reduction?Animal welfare & biodiversity
ESG Management
Green: Boost low-carton transition
Guidelines No. 1 of the Shanghai Stock Exchange for Self-Regulationof Listed Companies ? Standardized Operation (Revised in August 2023)
Inclusiveness of StakeholdersThis report identi?es the company'sstakeholders and their concerned topics,and explains the way in which it respondsto stakeholders.
MaterialityThis report identi?es and responds tomaterial topics of concern to stakeholdersand of importance to the company, andreports on these topics in a focusedmanner.
CompletenessThe full range of topics covered in this reportre?ects the company's signi?cant environ-mental and social impacts, describes thescope of the impacts of the material topicsand how the company manages them.AccuracyThe information disclosed in this report isaccurate and detailed for stakeholders toassess the performance of the Company.
BalanceTaking into account the characteristics of theindustry in which it operates, the report disclosesthe Company's active implementation of ESGwork, possible problems and plans forimprovement, avoiding selective disclosure.
ClarityThis report is disclosed in a manner that iseasily understood by stakeholders andmade clear how the report can beaccessed.ComparabilityThe report explains the meaning of thedisclosed key quantitative performanceindicators and describes the basis for theircalculation and assumptions. The indicatorsare as consistent as possible across reportingperiods to re?ect trends in performance.
ReliabilityThe manner in which the information andprocesses were collected, documented,compiled and analyzed during thepreparation of this report.
TimelinessThe Company publishes ESG reports ona regular basis to keep stakeholdersinformed.
The data in this report is derived from the Company's annual ?nancial reports, o?cial documents, and ESG practices of its subsidiaries,which have been counted, summarized and audited by the Company. Part of the data has imperfections due to statistical and caliberreasons, the Company is continuously improving the statistical system of data indicators to provide more comprehensive information.
XINAO ESG Management CommitteeAddress: Guanzhuang Bridge, Chongfu Town, Tongxiang City, ZhejiangProvince, ChinaPhone: +86 573 88455801E-mail: xinao@xinaotex.com
This is the second of Zhejiang Xinao Textiles Inc. which discloses tostakeholders the concepts, management approaches, e?orts and achievements on ESG topics in its operations.
This report covers Zhejiang Xinao Textiles Inc. and its subsidiaries (hereinafter referred to as the "Company" or “XINAO”), which is consis-tent with the scope of the consolidated ?nancial statements in the annual report of XINAO (stock code: 603889), unless otherwise stated.Scope of the Report
Principles of ReportingThis report is guided by the following reporting principles:
The scope of entities in the Company's consolidated statements is as follows:
ZHEJIANG XINAO TEXTILES INC.ZHEJIANG NEW CHUWA WOOL CO., LTDZHEJIANG HOUYUAN TEXTILES INC.NINGXIA XINAO CASHERE CO., LTDJIAXING FEIXUN SPECIAL FIBER TECHNOLOGY CO., LTDZHEJIANG HONGDE CASHMERE PRODUCTS CO., LTDZHEJIANG TAIYUAN TEXTILES CO., LTDSHANGHAI JINGHENG TEXTILE TECHNOLOGY CO., LTDNINGXIA MODERN TEXTILE INDUSTRY RESEACH INSTITUTE CO., LTDTODD&DUNCAN LIMITEDTAIYUAN INTERNATIONAL(AUSTRALIA)PTY LIMITEDXINAO (HONGKONG) LIMITEDXINAO TEXTILES（EUROPE）S.R.L.XINAO TEXTILES (VIETNAM) COMPANY LIMITEDXINAO TEXTILES UK LIMITED
XINAO TEXNEW CHUWAHOUYUAN TEXXINAO CASHMERE
JX FEIXUNHONGDE CASHMERE
TAIYUAN TEX
JH TECHTEXTILE INSTITUTE
T&D UKTAIYUAN INTL
XINAO HKXINAO EUXINAO VNXINAO UK
YYYYYYYYYYYYYYY
Full NameShort NameIncluded in the Report (Y/N)
Description of Data
Reliability Assurance
Contact
The Company undertakes that there are no false records, misleading statements or material omissions in the contents of this report, andthe Board of Directors of the Company is responsible for the authenticity, accuracy and completeness of its contents.
Principles for De?ning the Content of the Report
Principles for the Quality of the Report
This is an annual report covering the period from 1 January 2023 to 31 December 2023. Some information that goes beyond thisscope is indicated where involved.Time Frame
This report is prepared in accordance with the compilation guideline forthe
and the
published by the Shanghai Stock Exchange, and with reference to the CSRC's while taking the United Nations Sustainable Development Goals (SDGs) as a guiding reference for the report.
Basis of the Report
Access to the ReportThis report is available as an E-documents in both simpli?ed Chinese and English versions. In the event of any ambiguity in theunderstanding of the two texts, the simpli?ed Chinese version shall prevail. Both version of the report can be downloaded from theCompany's WeChat O?cial Account (XINAO) and the website of Shanghai Stock Exchange (http://www.sse.com.cn/).
DIRECTION OF THE REPORT
Environmental, Social and Governance (ESG) Report
“Reports on Ful?llment of Social Responsibilities”(2008 edition) Guidelines No. 1 of the Shanghai Stock Exchange for Self-Regulation of Listed Companies ? StandardizedOperation (2023 edition) Rules No. 2 on Content andFormat of Information Disclosure by Companies Publicly Issuing Securities - Content and Format of Annual Reports (2021Revision),
ESG Report2023
Direction of the
Report
Letter from the
ChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Build
excellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
LETTER FROM THE CHAIRMAN
ESG Report2023
A blueprint for sustainabledevelopment throughunremitting e?orts
I am pleased to share with you once again our annual Environ-mental, Social and Corporate Governance Report. Last year, wereleased the ?rst full ESG report, disclosing our achievementsand challenges in environmental, social and corporategovernance to many stakeholders in the community, whichreceived widespread attention and recognition from all sectorsof the community, making us more con?dent and motivated tokeep going.Despite the continued volatility and complexity of the worldsituation, a still challenging macro environment, and intensify-ing global risks such as climate change in 2023, it is gratifying tosee the deepening of our ESG strategy and signi?cant progressin ESG actions.We honour our commitment to environmental protection in aproactive manner. Over the past year, we have achieved a
reduction of 0.04 tonnes of greenhouse gas emissions pertonne of product at our own operational level by e?ectiveinitiatives such as promoting process innovation, equipmentupgrading, and energy transition; we have reduced the burdenon nature in digesting emissions through actions such as theselection of green raw materia, resource conservation, andrecycling; at the same time, we have made considerableprogress in promoting green-oriented transition through e?ortsin management system, product design and supply chainsynergy. It is encouraging that in 2023, we were invited tobecome a member of the Green and Low Carbon Alliance ofwool textile industry to jointly study the countermeasures forthe sustainable development of the industry, though which werealized resource sharing of the carbon footprint data through-out the industrial chain. Through the active participation in theresearch of the industry's carbon emissions, enterprise carbonaccounting and product carbon footprint, we promoted theR&D and application of the green and low-carbon technologies,processes and equipment. While striving to become apractitioner and leader of green manufacturing, we are contrib-uting more to enhancing the industry’s green and low-carbonmanufacturing in all respects and building a new pattern ofgreen, low-carbon and sustainable development.
We persue our social responsibility with practical actions. Webelieve that a workplace environment that is equal, diversi-?ed, inclusive and enjoyable not only helps to attract andretain outstanding talents, but also helps to build moredynamic teams. Therefore, over the past year, we have, asalways, attached great importance to our employee welfareand protection system, supported their all-round abilityenhancement and personalized development, and o?eredthem open, fair and just promotion and growth channels. Bythe end of 2023, there were 86 employees who have grown upwith XINAO for more than 30 years, which is the greatestrecognition of our culture and values, and I am warmlyhonoured by this sense of belonging. I would also like tomention that our 50,000 spindle spinning project in Vietnam,which has started construction in 2023 and is in full swing asplanned, expected to bring more than 1,000 jobs to the localcommunity when it reaches design capacity. Through jointconstruction, sharing and progress with suppliers, customersand industries in terms of healthy development of industryand scienti?c and technological innovation, as well as contin-uous investment in many ?elds such as student assistanceand poverty relief, beautiful villiage and cultural constructionthrough charitable funds and targeted donations, we giveactively back to the community and pass on our warmth andcare.We continue to improve our corporate governance mecha-nism in a down-to-earth manner. We have set up an ESGCommittee at the management level, with the generalmanager of the Company as the chairman of the ESGCommittee, to fully implement the ESG concept and pursuesustainable development. Over the past year, we furtherimproved the ESG disclosure indicator system, built an ESGdata collection and entry platform, and continued topromote the systematisation and scientisation of ESG disclo-sure. At the same time, we put forward a linear governancestructure this year, that is, giving full play to the centralplatform functions of the parent company, such as systemstandards, support services, supervision and inspection, and
training and empowerment, while having departments withthe same function manage collaboratively top down alongthe lines. Such a governance structure enables more e?cientactions and propels XINAO toward the objectives of integrityand innovation, standardized governance, risk prevention,compliance and honesty in operation.At present, the realization of sustainable development isan important global consensus. As Chinese enterprisescontinue to move towards high-quality development, theintegration of ESG into corporate strategy control andbusiness decision-making has become a "proposition ofthe times" for corporate development. After years ofexploration, China has gradually established a policysystem for ESG disclosure by listed companies, and thewillingness of listed companies to disclose ESG informa-tion is constrantly strengthened. XINAO, as one of theleading companies in the wool textile industry, is lookingforward to sharing the business philosophy and valuesbehind our performance through the release of the ESGreport, and exploring the path of sustainable developmentwith more fellow travellers together to build a "quality life"and draw a blueprint for sustainable development.The year 2024 will mark the tenth year since the listing ofXINAO, which will be a new depature. We will remain trueto our original intention and take solid actions one step ata time. While enhancing continuously the ?nancial perfor-mance, we will pursue our ESG strategy through constantpracticing, summarizing, reviewing and improving, with acommitment to create lasting and far-reaching value forour customers, employees, investors and all stakeholders.Yours sincerely,Chairman of XINAO
Direction of theReport
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
3,979
?Specialized in the R&D, production and sales of wool and cashmere yarns, a leading enterprise inthe worsted spinning industry, and awarded as a model enterprise of single champion ofworsted wool yarns in the manufacturing industry by the Ministry of Industry and InformationTechnology (MIIT).?The Company owns a complete wool spinning industry chain from raw wool selection toscouring, stop making, chemical treatment, dyeing and spinning, with the world's leadingproduction capacity. It provides commission top making, various knitting yarns (circularknitting, ?at knitting) and weaving yarns.?With its products marketed globally and widely recognized, the Company has been listed as thedesignated yarn supplier of many internationally renowned brands and luxury brands.
MainBusiness
Company NameZhejiang Xinao Textiles Inc.
Stock abbreviationXINAOListed onShanghai Stock Exchange
Stock code603889.SH
?National High-tech Enterprise, National Green Factory, Green Design Model Enterprise of MIIT,National Development Base of Woolen Yarns Product, China Wool Textile Industry R&D Center ofWorsted Woolen Yarns Technology, Provincial Enterprise Technology Center, ProvincialEnterprise Institute and Provincial Post-doctoral Workstation, and the ?rst Knitwear Develop-ment Center (KDC) jointly founded with International Wool Secretariat (IWS).?Focusing on sustainable development, the Company has been committed to the development
of functional products and green products in recent years, with a number of products beingcultivated as functional products and recommended for application by China Knitting IndustryAssociation (CKIA).
Quali?cationRecognition
CompanySize
ABOUT XINAO
Headquarter AddressTongxiang City, Zhejiang Province
StockFacts
Organization Structure
employees worldwide
Countries and regions covered byglobal marketing channels
20+
clients worldwide5,000+
yuan revenue
4.438 billion
ZHEJIANG XINAO TEXTILES INC.
Board of shareholders
Board of supervisors
Strategy committeeAudit committeeNomination committee
Remuneration andappraisal committee
Trade OrientedProduction Oriented
JIAXING FEIXUN SPECIAL FIBER TECHNOLOGY CO., LTD
XINAO TEXTILES (VIETNAM) COMPANY LIMITEDXINAO TEXTILES（EUROPE）S.R.L.XINAO TEXTILES UK LIMITED
Board of directors
Management
NINGXIA XINAO CASHERE CO., LTD
NINGXIA MODERN TEXTILE INDUSTRY RESEACH INSTITUTE CO., LTD
ZHEJIANG NEW CHUWA WOOL CO., LTDZHEJIANG HOUYUAN TEXTILES INC.TODD&DUNCAN LIMITEDTAIYUAN INTERNATIONAL(AUSTRALIA)PTY LIMITEDZHEJIANG HONGDE CASHMERE PRODUCTS CO., LTDZHEJIANG TAIYUAN TEXTILES CO., LTDSHANGHAI JINGHENG TEXTILE TECHNOLOGY CO., LTDXINAO (HONGKONG) LIMITED
ESG Report2023
Direction of the
Report
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
ESG Philosophy & Governance
ESG Governance System
A sound ESG governance structure is a prerequisite to guard an organic integration of the strategy of sustainable development and thestrategy for business development. Through its improving sustainable development practices, the Company is moving towards a betterfuture together with its stakeholders, including shareholders and investors, customers, employees, government and regulatoryagencies, partners, communities and the public.XINAO keeps optimizing the top-level design of ESG governance. The Company's Board of Directors, the highest management bodyof ESG, authorizes the management to advance the implementation of ESG practices and the management of material topics. TheCompany has established an ESG Committee at the management level, with the General Manager of the Company serving as theChairman of the ESG Committee.
Boardof DirectorsESG CommitteeESG Working Group（Relevant functions of the company）
Identify ESG risks and opportunitiesDevelop ESG philosophy and objectives
Management
ExecutiveImplement the ESG work
OversightOversee ESG matters comprehensively
Structure of ESG Governance
ESG MANAGEMENT
The Company updated and improved the ESG disclosure indicatorsystem by increasing the number of quantitative indicators to176 inthe context of disclosure frameworks both at home and abroad,regulatory systems and ESG rating systems.Improve the ESGInformationDisclosureIndicator SystemBuild the ESGInformationDisclosure ITSystem
The Company has initially built an ESG data collection and entryplatform and con?gured ESG data collection services, which havebeen applied across functions and subsidiaries.
Continuous improvement of ESG information disclosure in 2023
?On 13 July 2023, the Company heldthe ESG Committee Semi-AnnualMeeting 2023 to review the “Proposalon improving the 2022 Environmen-tal, Social and Governance Report ofXINAO”. Training on "De?nition andValue of ESG", "ESG Rating and ESGInformation Disclosure" and "Waysand Suggestions to integrate ESGinto Corporate Management" werealso conducted for members of theESG Committee, relevant functionsof the ESG Working Group and headsof subsidiaries.
?On 18 September 2023, the ESGCommittee convened the WorkingGroup to hold a seminar on ESG dataindicators, where it discussed anddetermined the internal standardsfor ESG data indicators based on theprinciples of scienti?city, authentici-ty, reliability and accuracy.
?On 25 October 2023, the Compa-ny convened the ESG CommitteePlanning Meeting 2024 to reviewthe proposal of "Analysis of materi-al topics in the 2023 ESG Report ofXINAO" and conducted researchand interviews with the relevantfunctions of the ESG Working Groupand subsidiaries.
Meetings of the ESG committee in 2023
ESG information disclosure boosts the phased retrospections of the ESG work, the publicity and communications, and theresponses to regulations, which is an extension of ESG governance as well as a key part of ongoing enhancement of ESGgovernance. By improving the ESG information disclosure indicator system and building an ESG information disclosure IT system,the Company continued to promote the systematic and scienti?c disclosure of ESG information in 2023.
ESG Concepts & StrategyAdhering to the vision of "becoming a leader in the global wool spinning industry", XINAO actively assumes responsibilities forshareholders, customers, employees, communities and the environment, pursues the mission of "Enjoy better life with wool",strives to build the values of "Learning, Innovation, Integrity and Sharing", and endeavors to realize "First-class mechanism,?rst-class talents, ?rst-class service and ?rst-class brand".
The Company integrates sustainable development into its development strategy, and actively pursues the United Nations Sustain-able Development Goals (SDGs) and ESG concepts at a strategic level by promoting the ESG governance system in an all-roundway, implementing the material topics of ESG and improving the Company's ESG performance, progressively incorporating ESGmaterial topics into the Company's performance appraisal system, and actively bringing ESG factors into the Company'sdecision-making and business development, so as to provide customers with ESG-compliant products and services.
Enjoy better lifewith wool
Learning, Innovation,Integrity and SharingBecoming a leader in theglobal wool spinning industry
VisionMissionValues
ESG Report2023
Direction of theReport
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitative
performanceAnnex
Meet the UN Sustainable Development Goals (SDGs)2023 is the second year for the Company to fully implement the ESG concept. The Company has continued to pursue sustain-able development in line with the United Nations Sustainable Development Goals (SDGs) and the trend of domestic econom-ic transformation. With the management of ESG material topics as the core, the Company has comprehensively launchedESG practices in three aspects, namely ESG governance, ESG risk management and ESG information disclosure, and hasmade better progress in sustainable development, supporting the UN SDGs with concrete actions.
UN SDGsConcrete Actions of the Company
?Help the disadvantaged?Continue to boost rural revitalization?Certi?ed by ISO45001 Occupational Health and Safety Management System?Assist suppliers in securing production
?Financially aid students in need
?Ensure gender equality in recruitment and employment?Adopt water-saving sanitary equipment?Cultivate water-saving habits among employees through water-saving publicity and education
Environ-mental
SocialGovernance?
C
o
nsolid
ate
Ma
nagement
Boost
Low-ca
r
t
o
n
T
ransition
Paint
a
Rosy
Picture
Build
excellence
UN SDGsConcrete Actions of the Company
?Generate photovoltaic power?Buy green power?Protect employee remuneration and bene?ts?Examine the performance of the labor in the supply chains?Strengthen technological innovation?Advance the construction of smart factories?Promote equal opportunities?Oppose any form of discrimination?Assist groups in need?Provide community volunteer services?Purchase preferentially the certi?ed raw materials?Work with suppliers to improve environmental performance?Calculate carbon emissions?Carry out extensive actions to conserve energy and reduce emissions?Promote green-oriented transition of the industry?Protect animal welfare?Certi?ed by Responsible Wool Standard (RWS) and The Good CashmereStandard (GCS)?Transparency of information?Prohibit all forms of corruption?Communicate with stakeholders?Release the annual ESG report
ESG Report2023
Direction of theReport
Letter from the
ChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
Highlights of the Year’s ESG Performance
SocialEnvironmental
?Xinao Tex was selected as a typical case of product, application and service of new information technology in 2023 byMIIT (Batch 1).?Xinao Tex was awarded the 2023 Textile Industry Informatization Achievement by China National Textile and ApparelCouncil (CNTAC).?Xinao Tex was awarded the Smart Workshop of Worsted Woolen Yarns by China Wool Textile Association.?Xinao Tex was shortlisted as a "Cloud-enabled Enterprise" in the manufacturing industry of Zhejiang Province (Batch 2).?Xinao Tex was selected as one of the Top 500 high-tech enterprises in Zhejiang Province in terms of innovation ability in
2023.?Xinao Tex R&D Center of Textile Technology was rated as China Wool Textile Industry R&D Center of Worsted WoolenYarns Technology by China Wool Textile Association.?Xinao Tex was awarded the Advanced Enterprise of Standardization by National Technical Committee for TextileStandardization Woolen Textiles Sub-Committee.?7 high-quality yarns from Xinao Tex won the Best Green Ecology Award, the Best Technological Innovation Award, theCraftsman Quality Award, the Artistic Design Award and Green Ecology Award in the “Jindian” Selection of ExcellentProducts of the 8
thNational Wool Spinning Yarns by China Wool Textile Association.?The brand image of Xinao Tex was newly upgraded.?New Chuwa was recognized as an innovative small and medium-sized enterprise (SME) in Zhejiang Province in 2023
(Batch 3).?Houyuan Textiles was recognized as a Specialized, Re?nement, Di?erential and Innovation (SRDI) enterprise in textile
industry of CNTAC (Batch 4).?Houyuan Textile was recognized as a SME of SRDI in Zhejiang Province in 2023 (Batch 2).?Xinao Cashmere was awarded the Best Artistic Design Award and Technology Innovation Award in the “Jindian”
Selection of Excellent Products of the "Yongjin Cup" of 8
th National Wool Spinning Yarns by China Wool Textile Associa-
tion.?Xinao Cashmere was recognized as a SME of SRDI in Ningxia Hui Autonomous Region.?Xinao Cashmere was identi?ed as the "chain leader" enterprise in Yinchuan textile industry.?Xinao Cashmere won the award of Lingwu Municipal Regional Home of Sta? and outstanding organization of Vocational
Skills Competition for Employees of Modern Textile Industry in Lingwu City.?Xinao Vietnam was registered in T?nh T?y Ninh, Vietnam and o?cially commenced building. Governance?Rated B in the 2022-2023 Information Disclosure for Listed Companies on the Main Board of Shanghai Stock Exchange.
Environmental
Social Governance
?Xinao Tex was selected as a Model Enterprise of Green Design for Industrial Products (Batch 5) by the Ministry ofIndustry and Information Technology (MIIT).?Xinao Tex was awarded the First Prize of Product Development of ECO Materials in 2023 China Eco-Friendly FabricDesign Competition.?Xinao Tex’s " Integrated technologies for energy optimization and e?cient utilization” was selected for the 2023catalogue of green and low-carbon technology promotion in the wool textile industry.?New Chuwa’s “Level 1 Energy E?ciency Air-compress Station Technology" was selected for the 2023 catalogue of
green and low-carbon technology promotion in the wool textile industry.?Houyuan Textiles’ " Key Technology and Industrialization of Digital Manufacturing of Colored Wool Knitting Yarns"
was selected for the 2023 catalogue of green and low-carbon technology promotion in the wool textile industry.?Houyuan Textiles entered into a purchase agreement of green power.?Houyuan Textiles’ "Bio-enzymatic treated environmentally-friendly mercerized colored wool tops" obtained China
Green Product Certi?cation.
Small and medium-sized Enterprise (SME) of Specialized,Re?nement, Di?erential and Innovation (SRDI)Advanced Enterprise of StandardizationSmart workshop of worsted wool yarnR&D center of worsted woolen yarns technologyGroundbreaking ceremony for Vietnam project
ESG Report2023
Direction of the
Report
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-carton
transition
Key quantitativeperformanceAnnex
ESG RaterResult of ESG Rating
ESG Rating
ESG Rating from QuantData
ESG Rating from CCXGF
ESG Rating from Sino-Securities Index
ESG Performance Assessment from ChineseTextile and Apparel Enterprises, 2022-2023
ESG Rating from Wind
ESG Rating from SynTao Green Finance
AAA
405 R&D sta?, or 10.18%111.2066 million yuan
R&D investment, or 2.51%
Cumulative total of
156 valid patents
2,402 female employees,528 domestic minorityemployees, 913 employeesover 50 years old
352 incentives weregranted to employeeswith stock equity
88.32 scores of customer
satisfaction
79,275 participations in
employee training, with a totaltraining time of 122,592
hours
22 safety drills were held,
and 19,373 participa-tions in safety education
and training
12.7978 million yuan
invested in environmental
protection
13,513 participationsin environmental training
1,097,983.78 m? of recycled waterconsumption, i.e. 41.24% of waterrecycling rate
27.09 m?/t of water withdrawal
per unit product
1.82 tCO
e of greenhouse gasemissions per unit product, down
0.04 tCO
e from the previous year
800 MWh of green
electricity purchased
0.49 tce/t of comprehensive energy
consumption per unit product, down
0.01 tce/t from the previous year
14,540 sets of wovenbags (pcs) were recycled
4 periodic reports were
disclosed and 64 adhoc announcements
were issued
More than120 investorexchanges were held
224 Vendor Commitments ofAnti-Bribery/Anti-Corruption
were signed2,975 employees coveredby anti-corruption training
Environmental
Governance
Social
ESG Report2023
Direction of the
Report
Letter from theChairmanAbout XINAO
ESGManagement
Robust: Consolidate
Management
Ingenuity: Build
excellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-carton
transition
Key quantitativeperformanceAnnex
Communications of Stakeholders
Flow of Communication
Topics of Concern & Communication Responses of Key Stakeholders
Management of Material Topics
Feedback from stakeholders can provide reference for the Company’s major business decisions and promote the uni?cation of theCompany’s economic and social values. The Company attaches great importance to communication with stakeholders by activelybuilding internal and external communication platforms, and conveys its concept of sustainable development and the dynamics of itsful?llment of responsibilities to stakeholders through open and transparent communications such as releasing ESG reports and partici-pating in industry conferences, etc. At the same time, the Company establishes a variety communication channels for di?erent stakeholdersand proactively collects issues of concern to them, which serves as an important reference for the management of material ESG topics.
In 2023, the Company maintained constant communication with key stakeholders to understand their concerns and respond totheir demands through di?erent communication channels.
De?ne the Company's key stakeholders
Communicate with stakeholders and
gather feedback
Support the Company's identi?cation andmanagement of material ESG topics byincorporating the results of stakeholder
communications.
Respond to stakeholders through e?ective
communication channels
Disclose the results of stakeholder
communication
?Responsible supply chains?Compliance & business ethics?Industry & people’s values
?Pollutant reduction?Recycling of resources?Industry & people's values
?Supplier management?Transparent & fair procurement?Strategic cooperation?Industry exchanges and visits
?Chapter 3?Chapter 5
?Chapter 2?Chapter 4?Chapter 5
?Chapter 2
?Chapter 4
?Chapter 5
?Chapter 2?Chapter 3
Shareholders& Investors
Customers
Employees
Government& RegulatoryAgencies
Business Partners
Community& the Public
Key StakeholdersTopics of ConcernChapters DisclosedCommunication & Response
?Employee rights & bene?ts?Occupational health & safety?Employee training & develop-
ment
?Product quality & safety?Scienti?c and technological
innovation & intellectualproperty protection?Customer rights & bene?ts?Information security &privacy
?Improve quality control?Increase investment in R&Dand innovation?Customer satisfaction survey?Measures for customer privacy?Expand channels for employeedevelopment?Employee appraisal & promotion?Improve compensation & bene?tsystem?Enrich activities for employees?mprove management of safety
production?Protect occupational health
?Organization structure &
functions?Investor protection?Internal controls & risk
management?Compliance & business ethics
?Low carbon products &
climate change adaptation?Environmental management
system?Pollutant reduction?Recycling of resources?Animal welfare & biodiversity
?Shareholders meeting &investor exchange?Complaint reporting &monitoring mechanism?Regular and irregularinformation disclosure?Implementing the new visionfor development
?Improve business process ofcompliance?Identify risks of climate change?Improve environmentalmanagement systems?Implement the measures ofemission management?Implement energy saving andconsumption reduction
?Strengthen environmentalmanagement?Launch social welfareprojects?Participate in communityvolunteer activities
ESG Report2023
Direction of the
Report
Letter from the
ChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Build
excellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
Taking the domestic and international industry experience and excellent practices as the benchmark, the Company analyzes thematerial topics in accordance with the international and domestic policies and standards, taking into account the major concernsof internal and external stakeholders, benchmarking with industry peers in industry characteristics and strategic directions. In2023, The Company identi?ed and screened 18 ESG material topics in accordance with the process of identi?cation, evaluationand review, categorizing them into environmental, social and governance and prioritizing them according to consultation frominternal and external experts and feedback from the management. This report will focus on disclosing the management andperformance of ESG topics of high materiality in 2023.
List of Material Topics for the ESG Report 2023CategoryName of the Material Topic
Priority Rating / Extent of ImpactEnvironmental management system
Low-carbon products and climate change adaptation
Recycling of resourcesPollutant reductionAnimal welfare and biodiversity
Product quality & safetyScienti?c and technological innovation
& intellectual property protection
Customer rights & bene?tsInformation security & privacy
Responsible supply chains
Employee rights & bene?tsOccupational health & safetyEmployee training & development
Industry & people’s valuesOrganization structure & functions
Investor protectionInternal controls & risk management
Compliance & business ethics
Medium to highHighMedium to highMedium to highMediumMedium to highHighMedium to highMediumMediumMedium to highMedium to highMedium to highMediumMedium to high
HighMedium to highMedium to highNote: Topics highlighted in pink are new/changed material topics from 2022.
Environmental
Social
Governance
Identi?cation & Analysis of Material Topics
Analysis Process of Material Topics
?Further optimize the expression, so that the names of the topics are better in line with common language expressions."Green low-carbon products" and "Response to climate change" are combined into "Low-carbon products &climate change adaptation"; "Resource conservation" is upgraded to "Recycling of Resources"; "Quality manage-ment" is upgraded to "Product quality & safety", adding the disclosure of responsible use of chemicals; "Scienti?cand technological innovation" is upgraded to " Scienti?c and technological innovation & intellectual propertyrights protection", further highlighting the protection of intellectual property rights.
?Respond to national policies actively and reply to the requirements of the industry developments in a more direct manner.“Animal welfare and biodiversity" is included in response to the call of the national strategy of "Biodiversity Protection",re?ecting the Company's commitment to animal and environmental protection; The new "Information security & privacy"fully understands the importance of a sustainable and reliable system of information security and privacy protection.
Interpret national macro policies and industry focuses, and identify key topics ofconcern in the industry through peer benchmarking.Identi?cation
Continuously communicate with stakeholders in daily business activities, anddetermine and prioritize the topics to be reported in terms of their importance tothe economy, society and environment and their importance to the Company's?nances in light of the Company's development strategy and actual operation.Evaluation
The Company reviews and approves the list of material topics and their priorities,and focuses on disclosing the topics of high materiality in the ESG report.Review
The following table sets out the material topics of the 2023 ESG report of XINAO. Compared with the previous year, the majorchanges in the material topics are as follows:
ESG Report2023
Direction of the
Report
Letter from the
ChairmanAbout XINAO
ESGManagement
Robust: Consolidate
Management
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-carton
transition
Key quantitative
performanceAnnex
ROBUST
Organization structure & functions
Investor protectionInternal controls & risk management
Compliance & business ethics
CONSOLIDATE MANAGEMENT
The SDGs to which this chapter is dedicated:
ESG Report2023
Organization Structure & FunctionsIn strict compliance with the laws and regulations and relevant provisions such as the
the Companydevelops a set of rules such as “Articles of Association of Zhejiang Xinao Textiles Inc.”, “Rules of Procedure for ShareholdersMeetings”, “Rules of Procedure for the Board of Directors”, “Rules of Procedure for the Board of Supervisors”, and “Rules of Workfor the General Manager”, forming a relatively comprehensive system of corporate governance.Combined with the actual situation, the Company forms a corporate governance mechanism with transparent powers and respon-sibilities and e?ective checks and balances among the board of shareholders, board of directors, board of supervisors and themanagement. The board of directors consists of four professional committees, respectively strategy committee, audit committee,nomination committee and remuneration and appraisal committee.
Board of supervisors
Strategy committee
Audit sectorAudit committeeNomination committeeRemuneration and appraisal committee
Board of shareholders
Board of directors
Management
?As the highest decision-making body of the Company, the board of shareholders decides onthe Company's business policies and investment plans.?To elect and replace directors and supervisors who are not employee representatives, and todecide on the remuneration of directors and supervisors.?To review and approve the reports of the board of directors and the board of supervisors.?To safeguard the legitimate rights and interests of all shareholders and ensure that all
shareholders enjoy equal status.?4 meetings were held in 2023.?The board of directors is the decision-making center of the Company and is accountable
to the board of shareholders. It consists of9 members (2 women), including 3 indepen-
dent external directors.?The board members come from diverse backgrounds, with professional backgrounds in
industries such as law and ?nance and management experience in large corporations.
?8 meetings were held in 2023.
?The board of supervisors exercises its supervisory powers to protect the rights and
interests of shareholders and investors, the interests of the Company and the
legitimate rights and interests of employees from infringement.?The board of supervisors consists of3 supervisors, including 1 employee supervisor.?8 meetings were held in 2023.
?The management of the Company performs its duties in accordance with laws and regula-
tions and internal rules of the Company, strictly implements the resolutions of the board
of shareholders and the board of directors, and promotes the sustainable and stable
operation of the Company.?The Company has a total of6 senior executives (3 women).
For more information on corporate governance, please refer to theBoard of shareholders
Board of Shareholders
Board of Directors
Board of Supervisors
Management
Governance Structure of Xinao Tex
Members & Meetings of the Three Boards and One Layer
Company Law of the People's Republic ofChina, the Securities Law of the People's Republic of China, the Code of Corporate Governance for Listed Companies, and theGuidelines No. 1 of the Shanghai Stock Exchange for Self-Regulation of Listed Companies ? Standardized Operation,
Annual Report 2023 of Zhejiang Xinao Textiles Inc.
ESG Report2023
Direction of the
Report
Letter from theChairmanAbout XINAO
ESGManagement
Robust: Consolidate
Management
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-carton
transition
Key quantitativeperformanceAnnex
The Company carries out information disclosure in a true, accurate, complete and timely manner in strict accordance with relevantlaws and regulations, and keeps optimizing the content and presentation of information disclosure. The Company has developedsystems such as the "Information Disclosure Management System" and "Registration Management System for Informants ofInsider Information" to ensure that the Company properly ful?ls its information disclosure obligations. As an e?ective supplementto mandatory information disclosure, the Company takes the initiative to maintain good communication with the capital marketand investors through voluntary disclosure, and continues to enhance the transparency of the Company, which in turn conveysthe Company's investment value and market image. In 2023, there were no incidents where the Company was penalized by theregulatory authorities for information disclosure violations.The Company releases information to investors through various meetings and online platforms, including annual generalmeetings, extraordinary general meetings, regular annual and quarterly reports, as well as announcements, brie?ngs and pressreleases. Information about the Company is available on platforms such as and the website of the
(www.sse.com.cn).
In 2023, the Company's information disclosure was legitimate and compliant, and free from false record, misleading statement ormaterial omission or any other violation of the relevant regulations on information disclosure, so as to ensure that the informationdisclosure was true, accurate, complete, timely and fair. The Company continued to improve the quality of information disclosureand was rated B in the "Evaluation Results of Information Disclosure Work of Listed Companies on the Main Board of the ShanghaiStock Exchange 2022-2023" released by the Shanghai Stock Exchange.
online performance brie?ngs forannual and quarterly reports
investor on-site researches,telephone exchanges, strategymeetings and reverse roadshows
Q&A on the SSE e-Interactive
Investor Protection
Information Disclosure
Investor Communication
Standardizing Related Party Transactions
An overview of disclosure in 2023
Investor Relations Management 2023
The Company has formulated the "Management System of Related Party Transactions", which speci?ed the related persons,related transactions, decision-making authorities and procedures for related party transactions to ensure that the related partytransactions between the Company and its related parties are in line with the principles of fairness, impartiality and openness, andthat the related party transactions of the Company do not jeopardize the legitimate rights and interests of the Company and itsnon-related shareholders. The decision-making and approval procedures for the related party transactions incurred by theCompany are in compliance with the relevant laws and regulations and the relevant provisions of the aforementioned system, andthe independent directors have given prior approval and independent opinions on the related party transactions involving disclo-sure, and there has been no use of related party transactions to the detriment of the interests of the Company and the minorityshareholders.In 2023, the Company ful?lled its information disclosure obligations in a timely manner by disclosing announcements such as"Announcement on the Capital Increase in the Same Proportion to the Holding Subsidiary and Related Party Transaction","Announcement on the Expected Daily Related Party Transactions of Subsidiaries for the Year 2023", "Announcement on thePurchase of Assets by the Holding Subsidiary and Related Party Transaction", and "Announcement on the Progress of Purchase ofAssets by the Holding Subsidiary and Related Party Transaction".
Shareholder Returns
The Company formulated a reasonable pro?t distribution policy and dividend program to protect the rights and interests ofshareholders in accordance with the the the
theand the relevant provisions of on cash dividends set out in theIn 2023, by resolution of the Board of Directors, the Company proposed to distribute a cash dividend of 3.00 yuan (inclusive of tax)for every 10 shares on the basis of a total of 730,655,943 shares as of December 31, 2023, resulting in a total proposed cashdividend of 219,196,782.90 yuan (inclusive of tax), which accounted for 54.23% of the net pro?t attributable to sharehold-ers of the listed company in the consolidated statement for the year 2023.
Organizing performance brie?ngsResponding to investor inquiriesFeedback on investor demands
31006
Periodic reports
Interim announcements
The Company communicates with investors, answers questions and listens to relevant opinions and suggestions through multiplechannels such as the o?cial website, the website of Shanghai Stock Exchange, the "SSE e-Interactive" platform, the Company'so?cial website, new media platforms, telephone, fax and e-mail, and by various approaches such as the shareholders' meetings,investor brie?ngs, roadshows, analysts' meetings and investor surveys. In 2023, the Company held more than 120 exchanges withinvestors and was selected as one of the "Excellent Practices of Annual Results Presentation of Listed Companies" by China Associa-tion for Public Companies.
The Company attaches great importance to investor relations management, and actively establishes a smooth two-way communi-cation channel with investors, so as to convey the Company's strategic planning, business performance and investment highlightsto investors in a timely manner. At the same time, the Company provides timely feedback to the board of directors and manage-ment on the views and expectations of the capital market, e?ectively enhancing the communication and interaction with thecapital market.The board o?ce of the Company is the functional department for investor relations management, and the board secretary isresponsible for investor relations management. In 2023, the Company further revised the “Investor Relations ManagementSystem” to form a management echelon within the Company with directors, supervisors, senior executives and the board o?ceas the axis through the construction of institutional norms and work system, so as to ensure that the investor relations manage-ment is carried out in an e?ective and orderly manner.
Shanghai Securities News Shanghai Stock Exchange
Company Law, Securities Law, Notice on Further Implementation of Matters Relatedto the Distribution of Cash Dividends for Listed Companies, Regulatory Guideline for Listed Companies No. 3 ? Distribution of Cash Dividends of Listed Companies, Articles of Association.
ESG Report2023
Direction of the
Report
Letter from the
ChairmanAbout XINAO
ESGManagement
Robust: Consolidate
Management
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitative
performanceAnnex
Follow up and supervisethe implementation ofrecti?cation measures bythe audited entity.
Covering the whole process of"risk identi?cation - riskassessment - risk response -risk tracking".
Risk identi?cationEstablish “the Risk and OpportunityManagement Plan”; in 2023, 34 high risks,179 medium risks and 373 low risks wereidenti?ed.
Process of internal audit
The Company establishes an internal control system and a corresponding institutional system and management mechanism inaccordance with the requirements of the and relevant guidance documents of theStock Exchange and carries out internal control management and evaluation accordingly to e?ectively address potential risks.
The Audit Section of the Company is responsible for risk monitoring and internal auditing. It is independent and reports directly tothe Audit Committee. In 2023, the Audit Section completed 20 audit projects as planned, focusing on special audits of internalcontrol audits, business performance management and major investment projects management of the companies, paying closeattention to the completeness and rationality of internal controls and e?ectiveness of their implementation, and supervising andinspecting key areas and crucial segments of the Company. No major internal control de?ciencies or violations of laws and regula-tions were found, while other audit ?ndings were ordered to be recti?ed by the audited units within a time limit. The internal auditdepartment would follow up and evaluate the recti?cation state and e?ect.
The Company builds and improves the risk management framework in line with its own business reality and operation mode,including formulating relevant systems to clarify the responsibility and operation mechanisms of the management, and carryingout speci?c work such as risk identi?cation, assessment, response and tracking based on the management mechanism of thewhole process, so as to enhance the risk control and management in an all-round way.
Internal ControlsRisk ManagementInternal Controls & Risk Management
?“Internal Control Management
Manual”?“Internal Control Evaluation System”?“Measures on the Administration ofInternal Audit”
?Build an internal control systemaround internal environment, riskassessment, control activities,information and communication,and internal supervision.?Embed tools and methods such asseparation of incompatible duties,authorization and approval control,accounting system control, propertyprotection control, budget control,performance evaluation control, andoperation analysis control into eachbusiness process.
Rules and regulationsof internal control
Risk management regulationRisk management mechanismRisk management process
Compile the “Risk and Opportunity Assess-ment and Analysis Form” for the identi?edmajor risks.
Risk assessment
Clarify the division of responsibilities formajor risks, con?rm the management strate-gy for major risks and that the responseplans are in place.
Risk response
Track the e?ectiveness of major risk controlson a regular basis, and issue reports onmajor risk management.
Risk tracking
“Procedures for Risk and Opportunity Control”
Resolution of objectionsto audit ?ndings andreview of con?rmationsof audit results.
Formulate audit schemeand audit solution of theproject.
Deliver the audit noticeto the audited entity.
Carry out audits and drawaudit conclusions andsuggestions, which arereviewed by the person incharge.At the end of the recti?cation period, the audited entity isrequired to submit a recti?cation report on the recti?cationmeasures and the time of completion.
The Audit Section developsan audit plan and submits itto the Audit Committee forapproval before implemen-tation.
Internal control system
Risk Management Framework
?Conduct self-assessments of the
company and its subsidiaries’internal controls.?Evaluate the e?ectiveness of thecompany's internal controls andissue evaluation reports
Evaluation ofinternal controlMechanism ofinternal control
Basic Norms for Internal Control in Enterprises
ESG Report2023
Direction of theReport
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
Compliance Management System
Procedures for handling complaints and reports
The Company adheres to the bottom line of compliance operation, aims to create a working atmosphere of compliance, integrityand honesty, establishes and improves compliance management system and mechanism, integrates compliance requirementsinto the whole process of production and operation steadily, and forms a compliance system that covers the behaviors of theCompany and its management.On this basis, the Company sticks to the working philosophy of "Combining investigation and prevention with a focus on preven-tion and control", and formulates the "Measures for Evaluation Management of Laws, Regulations and Compliance", whichde?nes, guides and restricts its own and its sta?'s behaviors in a systematic way. In 2023, there were no instances where theCompany was penalized or warned by the regulatory authorities for violating laws and regulations related to product quality,customer service, intellectual property protection, environmental protection and employment.
Compliance managementCompliance & Business Ethics
The Company abides by business ethics and promotes responsible governance by building an anti-corruption system andfostering a culture of integrity. The board o?ce of the Company is responsible for supervising and managing the Company'santi-corruption and anti-bribery, and ensuring the e?ective implementation of the Company's anti-corruption and anti-briberye?orts. The Company insists on "zero tolerance" for corruption, resolutely investigates and punishes all kinds of violations ofintegrity regulations, and reports all cases of seriousness to the public security organs for investigation and punishment inaccordance with the law. In 2023, there were no incidents in which the Company was penalized by the competent authorities forviolating the laws and regulations related to corruption, bribery, extortion, fraud and anti-money laundering.The Company delivers the Company's anti-corruption requirements and promotes the corporate culture of integrity and self-disci-pline through various forms of publicity, education and training activities. In 2023, 3 times of anti-corruption related training wasprovided to employees, covering 2,975 people. In order to better maintain the partnership, strengthen the discipline on businessactivities and regulate the behavior of practitioners, the Company entered into the “Vendor Commitment of Anti-Bribery/Anti-Cor-ruption” with 224 suppliers as of the end of 2023.Meanwhile, the Company establishes a sound reporting system and acceptance process, sets up a reporting hotline(0573-88226059) and a reporting e-mail (xinao@xinaotex.com) to give feedback on complaints and encourage and accept supervi-sion from all sectors of the society. In addition, the company strictly protects the personal information of whistleblowers, prohibitsany form of unlawful discrimination or retaliation, or hostile acts against those involved in the investigation, and deals severelywith those involved in illegal disclosure of information about whistleblowers and retaliation against whistleblowers.
Business Ethics
Receive a report, ?le an investigationHold responsible persons and
departments accountable
Rectify issues related to businessethics violations by responsible
department
?Establish standard contract templates and promote their use in all businessprocesses across the company to ensure compliance of all types ofcommercial trade behaviors.?Verify the authenticity and legitimacy of transactions through supplierauthentication, contract con?rmation, invoice review, and sporadicreceipts veri?cation to strengthen the supervision of all types of economicbehavior.Compliance trade
Compliance culture
O?cial Reporting Channels
Reporting hotline 0573-88226059Reporting e-mail xinao@xinaotex.com
?Carry out daily and special compliance trainings to enhance employees'awareness of compliance.In 2023, the Company conducted 30 compliancetrainings on codes, regulations, plant rules and management systems.
ESG Report2023
Direction of the
Report
Letter from the
ChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Build
excellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-carton
transition
Key quantitativeperformanceAnnex
ROBUST
ESG Report2023
GREEN
BOOST LOW-CARTON
TRANSITIONEnvironment management systemLow-carton products & climate change adaptation
Recycling of resources
Pollutant reductionAnimal welfare & biodiversity
The SDGs to which this chapter is dedicated:
Environment Management System
The Company strictly abides by the environmental protection laws and regulations applicable to the places where it operates, and paysenvironmental protection taxes and fees in full in accordance with the law. Following the environmental management policy of "energysaving and high e?ciency, pollution prevention and sustainable development", the Company has formulated management documentscovering various environmental impact factors, such as "Procedures for Identi?cation and Evaluation of Environmental Factors" and"Procedures for Control of Environmental Operations", etc. which have been implemented through production and operation to ensuree?ective control of environment-related risks.Based on ISO14001:2015 environmental management system, the Company carries out environmental factor identi?cation, compliancereview, internal audit and management review. At the same time, the Company requires subsidiaries at all levels to fully allocate full-timeand part-time personnel for environmental management, and normalizes the working mechanism of potential risks identi?cation andnoti?cation in order to strengthen systemic support in a sustainable manner. By the end of 2023, Xinao Tex and its subsidiaries NewChuwa, Houyuan Tex and Xinao Cashmere have all passed ISO 14001 environmental management system certi?cation.The Company integrates the concept of environmental protection and low carbon into the whole process of raw material procurement,production and pollutant management. By setting environmental management targets, the Company regularly uploads PollutantRelease and Transfer Register (PRTR), DETOX and carbon data through the Institute of Public and Environmental A?airs (IPE), and acceptssocial supervision proactively. The Company passed the third round of Cleaner Production Audit in 2020 (valid until 2025). In 2023, theCompany invested 12.7978 million yuan in environmental protection such as three wastes treatment and environmental protectionequipment, and carried out 28 times of environmental protection-related trainings throughout the year, with a total of 13，513participations.
In order to cope with environmental emergencies, the Company, in accordance with the relevant requirements of the
and thereleased by the Ministry of Ecology and Environment, prepares the "Environmental Emergency ResponsePlan" according to the production process, pollution chain and environmental risks, and reports to the competent authorities of environ-mental protection of the area for record in accordance with the regulations. In 2023, the Company managed the risk of enterpriseaccident in accordance with the requirements of the environmental impact assessment (EIA) and its comment, and regularly conducted6 times of environmental emergency response drills to train the sta?'s emergency response ability, improve their skills in preventing anddisposing of environmental emergencies, so as to reduce the possible harm to the environment caused by environmental emergencies.The Company and its subsidiaries actively apply for pollutant discharge permit, carry out self-monitoring, establish a ledger system forenvironmental management, and submit annual report on implementation of emission permits and disclose pollutant dischargeinformation in a timely manner. In 2023, its subsidiaries New Chuwa and Houyuan Tex were listed as key units for environmental supervi-sion by the local ecological and environmental management authorities. The Company disclosed information on emissions and admin-istrative licenses for ecological environment of the subsidiaries that were included in the key units of environmental supervision inaccordance with the relevant regulations of the CSRC, the Stock Exchange and the Ministry of Ecology and Environment. For detailedinformation on emissions from key units under environmental supervision, please refer to theThe Company carries out internal environmental control to an extent that is more stringent than national standards to minimize theimpact of production and operation on the environment. In 2023, the Company experienced no major environmental accidents oremergencies, no major environmental or other social security issues; nor did it involved in any major litigation or had its prime assetsseized, impounded, frozen, mortgaged or pledged due to environmental issues.
The Company identi?es the key links in its environmental management from product design to production, and the analysis of environ-mental impact in each link of its production and operation activities is shown in the following table "Summary of Resource Types andEmission Types".
Summary of Resource Types and Emission Types
Resource inputEmission output
Water resources：municipal water
supply, surface water, rainwater,steam condensate, production reusewater, etc.
Wastewater：Chemical oxygen demand (COD
cr), ?ve-day biochemi-cal oxygen demand (BOD
), ammonia nitrogen (NH
-H), totalphosphorus (TP), total nitrogen (TN), suspended substances (SS),total zinc (TZn), dissolved chromium (DCr),etc.
Raw materials and packagingmaterials：wool, wool tops, specialanimal ?bers, cotton/silk/chemical?bers, etc. and packagingcartons/drums, tubes, plastic ?lmbags, etc.
General waste：waste yarn, waste ?ber, combed wool noil, wastepackaging drums/boxes, sludge, beverage bottles, food warppers,napkins, toilet waste, kitchen waste, etc.Hazardous waste：inner ?lm bags of dyes, packaging of wastechemical, waste oil drums, waste resin, used oil, etc.
Energy sources：electricity, steam,
gasoline, diesel, natural gas andlique?ed petroleum gas, etc.
Waste gas：suspended particulates, malodors (ammonia andhydrogen sul?de), acetic acid, sulfuric acid mist, sulfur dioxide,nitrogen oxides, volatile organic compounds, canteen fumes, etc.
100% classi?cation of wastes100% collection and disposal
100% biosafety disposalof hazardous waste
Environmental management objectives
Zero environmental pollutionaccidents
ESG Report2023
Direction of theReport
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
Notice on theIssuance of Interim Measures for the Management of Environmental Emergency Response Plan National EnvironmentalEmergency Response Plan
Annual Report 2023 of Zhejiang XinaoTextiles Inc.
Green and low-carbon products system
Climate Change Management System
The Company recognizes the importance of climate change mitigation for itself and the world. In response to China's "30·60" goal ofemission peak and carbon neutrality, the Company has joined the "Climate Innovation 2030 Action", the "Life Cycle Assessment WorkingGroup" of China's textile and apparel industry, and the Green and Low Carbon Alliance of China Wool Textile Association to promote greeninnovation in terms of products, technology, supply chain, concepts and management, etc., striving to become a practitioner and leaderin low-carbon manufacturing.
By the end of 2023, the Company has passed multiple certi?cations such as BLUE SIGN, GlobalOrganic Textile Standard (GOTS), Responsible Wool Standard (RWS), the Good Cashmere Stand(GCS), Global Recycle Standard (GRS), SustainaWOOL, Forest Stewardship Council (FSC), andNATIVA?, etc. In 2023, Houyuan Textiles’ "Bio-enzymatic treated environmentally-friendlymercerized colored wool tops" obtained the China Green Product certi?cation, Xinao Tex wonthe First Prize of Product Development of ECO Materials in the China Eco-Friendly Fabric DesignCompetition, Xinao Tex’s "Integrated technologies for energy optimization and e?cientutilization", Houyuan Textiles’ "Key technology and industrialization of digital manufacturing ofcolored wool knitting yarns", and New Chuwa’s "Level 1 energy e?ciency air-compress stationtechnology " were all selected for the catalogue of green and low-carbon technology promo-tion in the wool textile industry, and Xinao Tex was selected as a model enterprise of greendesign for industrial products by the Ministry of Industry and Information Technology (MIIT).Adhering to the concept of sustainable development, health and environmental protection, the Company provides customers with greenand low-carbon products focusing on the three dimensions of green raw materials, green accessories and green packaging.
Low-carbon Products &Climate Change Adaptation
Low-carbon products
In order to better manage and adapt to the risks and potential opportunities brought by climate change on business development, theCompany actively pays attention to the trend of global climate change and the introduction of domestic climate-related policies,identi?es the impacts on the climate and the environment caused by its own operations, and builds a climate change managementsystem at four levels, namely, governance structure, strategy formulation, risk management, performance and objectives, so as toidenti?es climate change-related risks and opportunities, and integrates climate change mitigation and adaptation into its dailymanagement.
Climate Change Adaptation
Green raw materials?The company's main raw materials include raw wool, wool tops, loose cashmere and cashmere tops, all of which are100% biodegradable and renewable natural active ?bers, which is well managed from the source.?Collaborate with suppliers on sustainable projects, the procurement of the Company’s traceable raw materials certi?edby RWS, NATIVA, GRS, and GOTS reached 16.89% of the total raw materials for Xinao Tex, 16.87% for XinaoCashmere, and 31.48% for D&T UK in 2023.?Develop zero-carbon Tencel products with partners.?Develop recycled products with partners, for example the yarn REMAKE is a blend of 40% recycled nylon and 60%super?ne merino wool, which has received great attention and favor from brands, with its sales increasing year by year.In 2023, the recycled polyester tops purchases amounted to approx. 33.59% of the annual polyester tops purchases,and the recycled nylon tops purchases amounted to approx. 25.74% of the annual nylon tops purchases.
?The packaging materials include
cardboard boxes, paper tubes,poly bags and woven bags, etc.?Actively explore green packagingsolutions, promote green,reduced and recyclable packag-ing, and use recyclable boxes andlow-carbon cardboard boxes.?Continuously improve theapplication of woven bags,promote the recycling of wovenbags, and promote the coordinat-ed development of resourceutilization and environmentalprotection.
Green packagingGreen accessories
?Rigorous selection of dyes,additives and other chemi-cals.?Chlorine-free treatment ofwool with bio-enzymes, 3E,etc.?Ongoing introduction ofvegetable coloring products.
G
r
e
e
n
packagingGreen
accessories
Gr
een
r
aw
mate
r
ia
l
s
Governance structureStrategy formulationRisk management
Performance andobjectives?Include the topic ofaddressing climatechange into thematerial topics of thecompany's ESGmanagement, andhave the company'ssenior executivessupervise andmanage the topic ofclimate change.?Relevant departments
and subsidiariesincorporate themanagement ofclimate change intotheir daily workpriorities.
?Identify the risks that
climate change posesto the company'soperations and plan toincorporate climatechange risks andopportunities as part ofoverall operation andrisk management.
?Actively identifymajor sources ofgreenhouse gasemissions.?Relevant depart-
ments and subsidiar-ies take correspond-ing actions toaddress climatechange issues.?Encourage employ-
ees to work green toreduce greenhousegas emissions.
?Collect greenhouse
gas emissions relateddata on a regularbasis, assess theperformance level ofthe company'smanagement toaddress climatechange and disclose itin the ESG report.?Carry out measure-
ments based ongreenhouse gasemissions data to laythe foundation forsetting quantitativeclimate targets.
Green product certi?cation
ESG Report2023
Direction of theReport
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
Feeding
SpinningKnitting
Wool &cashmere ?bers
Assessment Results of Product Carbon Footprint
The Company pays close attention to the risks and opportunities that climate change may bring to itself and its partners, andminimizes its carbon footprint in its daily operations wherever possible. The Company has taken the lead to carry out carbonfootprint projects in the wool spinning industry, and actively promotes the Life Cycle Assessment (LCA) program for representativeproducts, among which Xinao Cashmere has released the assessment data of carbon footprint from pasture to yarn for two typesof cashmere yarn, namely CASHQUEEN and PRESTIGE.
Water resources managementRecycling of Resources
The Company is committed to identifying, managing and monitoring water risks facing its operations. Its water consumption ismainly for production and domestic use, with municipal water supply for domestic use and sources for production purposevarying according to the location of the project, including municipal water supply, surface water, rainwater, steam condensate,production reuse water, etc. There is no risk in seeking suitable water sources.The Company implants targeted water conservation measures in the course of production and operation to enhance the e?ciencyof comprehensive water resources management. The Company incorporates water resources utilization-related indicators intoperformance assessment to further stimulate management initiative. It has continued to improve measures of water resourcesmanagement in 2023, given priority to the adoption of water-saving equipment and devices, and maximized water e?ciency in theplant through measures such as reuse of condensate, retro?tting of water circulation of the grease machine in the laboratory,upgrading of condensate recycling rates in the workshop, and water-saving transformation of cooling water for the oil pump inworkshop. The Company consumed 1,097,983.78 tons of recycled water in 2023, with a water recycling rate of 41.24%.
?A steam condensate recovery unit was installed at Xinao Cashmere forreuse of the condensate in the boiler to reduce its soft water consumption,which saved21,440 tons of water in 2023;?A condensate recovery system for drying equipment was installed at XinaoCashmere in 2023, which was expected to recover 1,785 tons of conden-sate water/year;?Through reasonable layout of the new plant, all condensate from theshrink-proof workshop of New Chua was collected and transferred to thegrease room of the wool scouring workshop, achieving a condensaterecovery rate of 100%, and was expected to save 9,420 tons of water/year.
Types of Products
Assessment Results of Product Carbon Footprint
（Unit：kgCO
eq./kg）Xinao Cashmere CASHQUEEN carded cashmere yarns
(light color)
Upgrade condensate reuse
64.16
Xinao Cashmere CASHQUEEN carded cashmere yarns
(medium color)
63.17
Xinao Cashmere CASHQUEEN carded cashmere yarns
(dark color)
64.01
Xinao Cashmere PRESTIGE carded cashmere yarns
(light color)
53.35
Xinao Cashmere PRESTIGE carded cashmere yarns
(medium color)
52.41
Xinao Cashmere PRESTIGE carded cashmere yarns
(dark color)
53.15
Key water conservation projects and bene?ts in 2023Water conservation projectsWater conservation bene?ts
?A small water pump was added to the grease machine system in the lab tocirculate the water supply of the grease machine in New Chuwa, saving4,991 tons of water in 2023.Retro?t water circulationof the grease machinein the laboratory
?A water ?owmeter was installed on the cooling water pipe of the oil pump
in 2023 to accurately control the amount of cooling water used for oilpump, which was expected to save 17,550 tons of water/year for NewChuwa.
Water-saving transformationof cooling waterfor the oil pump
?Automated water intake was adopted in bundle dyeing for precisioncontrol of water level at Houyuan Textile, saving 4.55% of annual waterconsumption.Retro?t automatedwater intake
ESG Report2023
Finishing
Garment
Sales
Direction of the
Report
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
The Company has been focusing on energy saving and consumption reduction in the process of operation, and has built a soundenergy management system with reference to standard such as ISO 50001. As of the end of 2023, the energy management systemsof Xinao Tex and Xinao Cashmere have been audited to meet the requirements of ISO 50001 and have obtained the correspondingcerti?cates.Taken "energy saving, consumption reduction, e?cient utilization and sustainable development" as its energy policy, the Compa-ny establishes a leading group of energy saving, with the general manager as the person in charge of energy management to forman energy management network. The Company carries out energy review work, compiles Energy Review Report, inventoriesenergy ?ow and consumption paths for better e?orts of energy conservation. In addition, the Company focuses on human-cen-tered low-carbon operations, and lays the foundation for sustainable low-carbon production through the enhancement ofenergy-saving and low-carbon awareness and skills of all employees. In 2023, the Company controlled the consumption ofequipment such as air-conditioning, elevators, and lighting in o?ce areas, and encouraged employees to save energy in their dailyo?ce processes.The Company reduces energy use and carbon emissions in its operations by reducing operational emissions and replacingenergy structure. In the Reduce and Replace, the Company enhances the energy e?ciency in the production process mainlythrough optimizing process ?ow, replacing energy-intensive and ine?cient equipment, and upgrading energy systems. Inaddition, the Company maintains its equipment and facilities on a regular basis to ensure their availability and avoidwastage of energy such as leakage.
Energy ManagementEnergy management is one of the core aspects of green manufacturing and low carbon, as well as the main channel for theCompany to realize low carbon development. In terms of energy use, the types of energy consumed during the Company's produc-tion and operation include electricity, steam, gasoline, diesel, natural gas and lique?ed petroleum gas.
Major energy types and their usage scenarios
Measures for energy conservation and annual progressMeasuresAnnual progressConcrete actions
Optimizeprocess
?ow
Replaceenergy-in-tensive andine?cientequipment
Upgrade
energy
system
Gasoline：running of own automobilesDiesel：running of own trucksNatural Gas：boilersLique?ed petroleum gas：canteen
Xinao Cashmere retro?tted steamcondensate recovery
Completed, saving86,977 Nm?/year ofnatural gas in 2023Xinao Cashmere installed condensaterecovery system for drying equipment
Completed, with an estimated heat recoveryof83 MWh/year, equivalent to 9,488Nm3/yearof natural gas savingsXinao Tex modi?ed the cooling tower
Completed, with projected electricity savingsof10%Xinao Cashmere obsoleted 4 old hot?ue dryers
Completed, with an expected reduction of
0.13 tons (tce) of comprehensive energy
consumption per ton of productXinao Tex upgraded the compressedair station
Completed, with estimated power savings
of734 MWh/yearHouyuan modi?ed an air compressorsystem
Completed, with estimated power savings
of
64.8 MWh/year
New Chuwa built the ?rst “PrimaryEnergy E?ciency Air-compress Station"in the wool textile industry (Jiaxing)
Completed, with estimated power savings
of
187.2 MWh/year
Xinao Cashmere added solar waterheating system
Completed, with an expected reduction of
0.62 tons (tce) of comprehensive energy
consumption per ton of productThe water heating system of the newdormitory adopted heating by solar+ air energies
Completed, with estimated power savings
of
30.78 MWh/year
Built photovoltaic power stations onthe roofs of existing production plantsand dormitories
Completed, utilizing nearly10,509.91 MWh
of photovoltaic electricity in 2023
Directenergy
Indirect
energy
Municipal grid and photovoltaic power generation：
for the production facilitiesSteam：for processes of dyeing, washing, drying, etc.
ESG Report2023
Direction of the
Report
Letter from the
ChairmanAbout XINAO
ESGManagement
Robust: Consolidate
Management
Ingenuity: Build
excellence
Common prosperity:
Paint a rosy picture
Green: Boost low-carton
transition
Key quantitativeperformanceAnnex
GREEN
Wastewater ManagementPollutant Reduction
The wastewater pollutants generated from the Company's production and operation are mainly chemical oxygen demand (COD
Cr
)?ve-day biochemical oxygen demand (BOD
), ammonia nitrogen (NH
-N), total phosphorus (TP), total nitrogen (TN), total zinc(TZn), dissolved chromium (DCr), suspended substances (SS), etc. The Company has formulated the "Measures for the Manage-ment of Three Wastes and Noise", applied for the national pollant discharge permit in accordance with the requirements of thestate and local governments, implemented strictly the sewage declaration and registration, established an online monitoring andearly warning mechanism for water treatment, formulated a self-monitoring scheme for polluant discharge permit and set up awastewater treatment system to make sure all discharges through outfalls are in accordance with standards.
Waste Gas ManagementThe air pollutants generated from the Company's production and operation are mainly suspended particulates, malodors (ammo-nia and hydrogen sul?de), acetic acid, sulfuric acid mist, sulfur dioxide, nitrogen oxides, volatile organic compound, and canteenfumes. The Company e?ectively supervises exhaust emissions and ensures that all emission indicators comply with local andindustry emission standards through strict treatment and monitoring measures.
Combine self-moni-toring with regulartesting by a third-par-ty monitoring agency
Combine self-monitor-ing with regular testingby a third-party moni-toring agency
Integrated wastewaterdischarge standard (GB
8978 ? 1996)
Integrated emission standard of airpollutants (GB 16297 ? 1996)Emission standard of cookingfume (GB 18483 ? 2001)Combine self-monitor-ing with monthlysampling monitoring bya third-party environ-mental testing agency
Discharge standards of waterpollutants for woolen textileindustry (GB 28937 ? 2012)Discharge standards of waterpollutants for dyeing and?nishing of textile industry (GB4287 ? 2012)
Combine self-monitor-ing with monitoring bya quali?ed company
Discharge standards of waterpollutants for dyeing and?nishing of textile industry (GB4287 ? 2012)
Combine uni?edself-monitoring by thelessor, Houyuan Textilewith monthly samplingmonitoring by athird-party environ-mental testing agency
Integrated wastewaterdischarge standard (GB8978 ? 1996)
Types of wastewater discharges and discharge standardsCompaniesMonitoring measuresTypesPollutantsExecutive standardsXinao Tex
Xinao Tex
SuspendedparticulatesCanteen fumesDomesticsewage
CODCCr
,BOD
New Chuwa
Industrialwastewater,domestic sewage
CODCr
,NH
-N
Youhuan Tex
COD
Cr
,NH
-N , TN
Xinao Cashmere
COD
Cr
,NH
-N
Combine self-monitoringwith random inspectionby SEPA
Water environment and waterservices (Scotland) Act 2023T&D UK
BOD
,NH
-N ,TP , TZn ,DCr , SS
JX Feixun
COD
Cr
,NH
-N
Types of waste gas emissions and emission standardsCompaniesExecutive standardsMonitoring measuresPollutants
Combine self-monitor-ing with monthly sam-pling monitoring by athird-party environ-mental testing agency
Integrated emission standard of air
pollutants (GB 16297 ? 1996)Emission standards for odorpollutants (GB 14554 ? 93)New Chuwa
Suspendedparticulates,acetic acid,sulfuric acid mistmalodors(ammonia andhydrogen sul?de)
Emission standard of cookingfume (GB 18483 ? 2001)Canteen fumes
Combine self-monitor-ing with monthly sam-pling monitoring by athird-party environ-mental testing agency
Integrated emission standard of air
pollutants (GB 16297 ? 1996)
Emission standards for odorpollutants (GB 14554 ? 93)
Houyuan Tex
Volatile organic
compound
Emission standard of cookingfume (GB 18483 ? 2001)
Combine self-monitor-ing with monitoring bya quali?ed company
Emission standard of air pollutants
for boiler (GB 13271 ? 2014)Xinao Cashmere
Sulfur dioxide,nitrogen oxides
ESG Report2023
Industrialwastewater,domestic sewageIndustrialwastewater,domestic sewage
Industrialwastewater,domestic sewage
Domesticsewage
Combine self-monitor-ing with monthlysampling monitoring bya third-party environ-mental testing agency
malodors(ammonia andhydrogen sul?de)Canteen fumes
Direction of the
Report
Letter from the
ChairmanAbout XINAO
ESGManagement
Robust: Consolidate
Management
Ingenuity: Build
excellence
Common prosperity:
Paint a rosy picture
Green: Boost low-carton
transition
Key quantitative
performanceAnnex
Water environment (con-trolled activities (Scotland)
Regulations 2005
Waste Management
The Company attaches importance to waste management, and regularly bids for the sale of industrial waste generated in theproduction process or commissions quali?ed disposal units for resource utilization or harmless disposal; the rest of the generalwaste, such as domestic garbage, is collected by the sanitation department for uni?ed clearance. For hazardous waste, the Compa-ny identi?es them in strict accordance with the National Catalogue of Hazardous Waste, sets up temporary storerooms, establishesmanagement ledgers, strengthens comprehensive management in the whole process of collection, storage, transportation anddisposal, implements inspection, assessment and supervision, and entrusts competent disposal units for standardized disposal,so as to avoid environmental pollution. In 2023, there were no violations of laws or regulations related to waste disposal in thecompany.Following the principle of reduction and reuse, the Company manages the waste from the source of waste generation, temporarystorage, transportation and disposal in strict accordance with the requirements of relevant laws and regulations as well as thecompany's procedural documents.
The Company identi?es waste generation from a life-cycle perspective and extends environmental impact assessments through-out the value chain. Based on the possible uses of the waste and the knowledge of its environmental impacts and risks, theCompany manages the collection, separation, storage, transportation and disposal of waste in accordance with the priorities ofprevention and reduction, reuse and recycling, energy recovery, and land?ll waste. In 2023, New Chuwa recycled14,540 sets(pieces) of woven bags.
Animal welfareAnimal Welfare & Biodiversity
The Company's Responsible Sourcing focuses on its main raw materials, wool and cashmere, with the aim of reducing any form ofanimal cruelty and providing consumers with safe and reliable products by increasing responsible sourcing.Protecting animal welfare is an important part of responsible sourcing of raw materials. The Company continues to strengthen itsfocus and e?orts on animal welfare issues, prioritizes suppliers that have been certi?ed to the Responsible Wool Standard (RWS),the Good Cashmere Standard (GCS) and Sustainable Fiber Alliance (SFA) in order to enhance the sustainability and ethicality of itsproducts. In 2023, 17.80% of the Company's wool tops was Responsible Wool Standard (RWS) certi?ed, and 14.50% of theCompany's cashmere was the Good Cashmere Standard (GCS) or Sustainable Fiber Alliance (SFA) certi?ed.
The loss of biodiversity is one of the biggest risks the world is facing in the next 10 years, according to thereleased by theWorld Economic Forum. The Company pays constant attention to the impact of its own activities on biodiversity, and carries out risk factor identi?-cation and hidden danger investigation in compliance with the relevant laws, regulations and policies such as
and the released by the General O?ce ofthe State Council, and the released by the State Council.The Company attaches importance to the impact of its own production and operation and related environmental factors on the environment. Ithas identi?ed environmental risk factors including industrial wastewater, chemical raw materials and hazardous wastes, etc., and there is no directdischarge of production wastewater and domestic sewage.In 2023, the Company did not have any production bases or operations located in or near nature reserves or in biodiversity-rich areas outsidenature reserves; none of the production and operation activities, products and services were found to have a signi?cant impact on biodiversity.
Biodiversity
Inner ?lm bags of dyes, waste chemicalpackaging, waste oil drums, etc.
Entrust quali?ed units forstandardized disposalWaste resinUsed oilHazardous waste
TypesContentsDisposal measures
Waste yarn, waste ?ber, combed wool noil
Sell to waste recycling units forcomprehensive utilizationRetrieve by suppliers regularlyHand over to quali?ed units forincinerationWaste packaging drum, box, etc.
SludgeIndustrialwaste
Domesticwaste
Generalwaste
Beverage bottles, food wrappers,napkins, toilet trash, etc.
Entrust the sanitation departmentfor disposalEntrust quali?ed units for harmlessdisposal and reuse of resourcesKitchen waste
Types of waste and disposal measures
“Five Principles” of RWS and GCS Certi?cationFreedom from hunger and thirst?ready access to fresh water and a diet that maintainsfull health and vigor.
Freedom from discomfort?provide an appropriate environment, including shelterand a comfortable resting area.Freedom from pain, injury and disease
?through disease prevention or rapid diagnosis andtreatment.
Freedom to express normal behavior
?provide su?cient space, proper facilities and companyof the animal’s own kind.Freedom from fear and distress?through conditions and treatment which avoid mentalsu?ering.
ESG Report2023
Entrust quali?ed units forstandardized disposalEntrust quali?ed units forstandardized disposal
Direction of theReport
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
Global Risks Report 2023Opinions on Further StrengtheningBiodiversity Conservation Soil Pollution Prevention and Control Law of the People’s Republic of China
Regulation on Groundwater Management
ESG Report2023
INGENUITY
The SDGs to which this chapter is dedicated:
BUILDEXCELLENCEProduct quality & safetyScienti?c and technological innovation &
intellectual property protection
Customer rights & interestsInformation security & privacyResponsible supply chains
QCC achievement presentation contest
ESG Report2023
Chemical Management Committee
Product Quality & SafetyTotal Quality Management SystemExcellent products and services are the foundation of the Company. The Company has established a life-cycle quality manage-ment system covering product R&D, procurement, production, after-sales services, and achieved a lean upgrade of product qualitythrough end-to-end life-cycle management and continuous improvement. There were no incidents in 2023 in which the Companywas penalized by the competent authorities for violations of laws and regulations related to the quality and safety of its productsand services. As of the end of 2023, XINAO and its subsidiaries, New Chuwa, Houyuan Textile and Xinao Cashmere have passed thecerti?cation of ISO 9001 quality management system, and continued to maintain its e?ective operation.
Product Testing and Nonconformity ManagementThe Company has a quality control section and an in-house central laboratory. The quality control section is responsible forcontrolling the quality of the Company's products, while the central laboratory carries out relevant performance tests from rawmaterials to ?nished products, including incoming inspection of raw materials (wool tops, chemical ?bers, ?laments, etc.), spinninginspection, and overall quality control of the product at a later stage of the production process. The main testing items of the centrallaboratory include the length and ?neness of the raw material, coarse ?ber and foreign colored ?ber, yarn strength, yarn twist, yarnevenness, yarn hairiness, fabric pilling, fabric shrinkage, etc.Being capable of comprehensive product inspection, the Company conducts preventive testing for quality problems that may arisein each process to ensure the quality of the product. For emerging or potential quality issues, preventive testing is prioritized withschemes such as error and fool proo?ng, and equipment automation. The Company continuously improves the reliability of testingequipment and the competence of testing personnel's quality skills through inspector's visual check, calibration of testingequipment, benchmark testing with third parties, as well as newcomer training and internal training, including QC training, qualityanalysis and improved tools training, etc.The Company standardizes the procedures of nonconformity management through two dimensions, namely business process and?eld process, forming a closed-loop of identi?cation, marking, segregation, evaluation, disposal and improvement, and clarifyingthe responsible departments for each process, so as to strictly control the quality. Besides, the Company formulates systems suchas "Procedures for the Control of Marking, Traceability and Recall" and carries out recall drills on a regular basis in strict accordancewith the relevant laws and regulations of the country or exporting country. In 2023, there were no product recalls in the Company.Responsible Use of ChemicalsThe Company is involved in the use of di?erent kinds of chemicals in the course of production and operation, which is related toproduct quality and safety, employee health and safety, and environmental safety. The Company strictly complies with laws andregulations on chemical registration, use, disclosure and management as well as customer requirements, and expects to minimizethe use of chemicals in order to reduce the impact of chemicals on human health and the environment.
Life cycle management for product quality of XINAO
ProductR&D
?Conduct tests according to various standards during the research and development process to ensurethat the product meets the certi?cation standards.?Review at each stage of R&D to ensure the success and e?ciency of product design and development.
MaterialProcurement
?Carry out supplier introduction and quality management by categorizing and rating.?Inspect incoming materials for di?erent suppliers
Manufacturing
?Control comprehensively of the elements in the manufacturing process, such as operators, machinery
and equipment, materials, methods, and environment, etc.?Conduct routing and sampling inspection, incoming and outgoing inspection to the quali?ed materi-als, continuously improve the quality problems in the production process.
After-sales
Service
?Set access to professional after-sales customer service and quality complaint to provide customers
with professional and timely technical service support.?Quality-related departments analyze quality problems and follow up until they are solved.
Director of the ChemicalManagement CommitteeHead of functions andsubsidiariesSpecialist of chemicalmanagement
Monitor the progress towardchemical management objectivesResponsible for the overallimplementation according to thechemical management manual
Provide guidance on the overallapproach to chemical management
Direction of the
Report
Letter from the
ChairmanAbout XINAO
ESGManagement
Robust: Consolidate
Management
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-carton
transition
Key quantitative
performanceAnnex
ESG Report2023
Scienti?c and Technological Innovation
Scienti?c and Technological Innovation& Intellectual Property ProtectionTechnological innovation is the ?rst driving force of the Company's development, as well as the key support for the Company tocreate industry-leading, high-quality and e?cient products and solutions. Following the principle of "combining innovation andstandardization, economic practicality and aesthetics, design, production and sales", the Company forms a unique R&D system byvirtue of its in-depth understanding of the industry, and through innovations in terms of product R&D, quality testing, technologyand production process, skill training for talents, and reform of system.
Based on the its own policy and organization for chemical management, the Company carries out life cycle management of chemi-cals covering links of procurement, access, evaluation and use, etc. to ensure the safety use of chemical in an all-round way.
R&D Innovation Layout
Life Cycle Management of Chemicals
InnovationDimensions
Main contentsAnnual progress
?Houyuan Textile carried out R&D on the applica-
tion of vegetable dyes in the dyeing of wool.
?Completed the R&D and launched to the market,
?lled the market gap.?New Chuwa launched the Backwash program of
combed wool tops to improve the whiteness,luster and cleanliness of wool tops.
?The program is being implemented and the
acceptance check is expected to be completed by
mid-2024.
?Xinao Tex engaged in R&D on products of green,sustainable, functional and special process.
?Completed the R&D of blending wool with
environmentally friendly raw materials such as
diacetic acid and biodegradable polyester.?Completed the R&D on products blending wool
with functional raw materials such as functional
polyester and high-strength nylon.?Completed the R&D of worsted and woolen fancy
yarns.?9 products entered the provincial program for trial
production of new products, and 3 products
completed the appraisal.Product
?Houyuan Textiles carried out projects of key
technology and industrialization of digitalmanufacturing of colorful wool knitting yarn.
?Houyuan Textile opened up data ?ow by automa-tion upgrading and information system integrat-ing.
?Xinao Tex conducted trials of new spinningtechnology.
?Studied and tested three new spinning technolo-
gies, namely siro-compact spinning, self-twist
spinning and low-twist spinning.?Established the independent R&D and integrated
application of key equipment and technology for
digitalized green production in the life cycle of
wool spinning, and formed a demonstration line
for intelligent design and production of wool
spinning.
Technology
?Xinao Tex phased out part of the outdated
spinning facilities and upgraded the automationof its equipment.?D&T UK phased out part of the outdated spinningframes, winders, doubling frames and upgraded tomodern equipment.
?Upgrade completed, with a substantial increase
in output and quality and reduction in labor
intensity.?Completed with substantial e?ciency gains.Automation
Chemical Procurement
Chemical Access
When admitting chemicals, formulate internal control standards and manage-ment processes for chemical substances that are in line with its own operationsand in accordance with international, national and industrial standards such asRoHS and REACH, and implement and regularly update chemical control lists andcatalogues.
When purchasing chemicals, require suppliers to provide documentations suchas quali?cations and certi?cations, material safety data sheet (MSDS) and chemi-cal safety labels, and identify the content of hazardous substances in theproducts or components they provide.
Chemical Evaluation
When evaluating new chemical, analyze and manage the risks that they may poseto operational safety, human health, and the environment, and con?rm theacceptance and e?ectiveness of the risk control measures.
Chemical Use
When using the chemicals, register the detailed information of chemicalsinvolved in all products, services and activities to identify the hazardous charac-teristics of chemicals, and clearly stipulate that the receipt of chemicals must beregistered and documented by specialized personnel.
Direction of theReport
Letter from the
ChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitative
performanceAnnex
ESG Report2023
The Company has 405 R&D personnel, including 4 with senior professional titles and 54 with intermediate titles; 5 with master'sdegree and 66 with bachelor's degree, the overall size of R&D team and strength is leading in the industry. Relying on the experi-enced R&D team and extensive and in-depth external cooperation, the Company has established innovative R&D centers in Jiaxing(Zhejiang Province), Yinchuan (Ningxia Province), and Italy around the world, forming a R&D system which is standardized,e?cient, and sustainable.The Company maintains a high level of R&D investment, continues to promote the construction of scienti?c research platform, andenhances the R&D capability. In 2023, the Company invested a total of 111.2066 million yuan in R&D, accounting for 2.51%of its operating income. By the end of 2023, the Company has built a number of national and provincial scienti?c researchplatforms.
The ?rst postdoctoral fellow from XINAO postdoctoral workstation successfully completed the project in 2023. Through the screen-ing of natural additives and optimizing of process, the Company improved the color depth and colorfastness of dyed wool, layinga theoretical foundation for the construction of two systems, namely, suspension dyeing and polyphenol dyeing of wool ?bers.
In addition, the Company continues to make e?orts in the ?elds of information technology, such asintelligent process, intelligent manufacturing, intelligent logistics, intelligent decision-making andsupply chain collaboration, etc. In 2023, the Company promoted the weaver ECology9 system,manufacturing execution system for spinning(MES), and the intelligent warehousing managementsystem (WMS), which have continuously invigorated the management of production and operationand energized the enhancement of quality, reduction of costs and increase of e?ciency. As of theend of 2023, the Company has passed the certi?cation of Integration of Informationization andIndustrialization Management System, and the project of "Digital Intelligence Industrial InternetPlatform of XINAO" has won the second prize of Textile Industry Informatization AchievementAward.
As of the end of 2023, the Company has accumulated156 e?ective patents, including 22 patents for invention, respectively 14for Xinao Tex, 3 for New Chuwa and 5 for Xinao Cashmere. In 2023, 17 patents were applied for, including 5 patents for invention,respectively 2 for Xinao Tex, 1 for Houyuan Textile and 2 for New Chuwa.
XINAO Scienti?c Research Platforms
Measures for Intellectual Property Protection
Intellectual Property ProtectionAdhering to the principle of "respecting the intellectual property rights of others and protecting of its own", the Company protectsits own competitive advantages and brand reputation with sound intellectual property management, while avoiding infringementof others. In 2023, the Company did not have any incident related to the infringement of intellectual property rights of others, nordid it involve in any intellectual property related litigation.
Enterprise Technology Centerof Zhejiang ProvinceEnterprise Research Instituteof Zhejiang ProvincePostdoctoral Workstationof Zhejiang ProvinceNingxia Research Center ofCashmere Engineering Technology
National development baseof woolen yarns product
Provincial
platformNationalplatform
Training
?Organize trainings on intellectual property rights for relevant depart-
ments to enhance employee’s awareness of intellectual propertyrights.?Respect the intellectual property rights of others and prohibitemployees from improperly obtaining, improperly disclosing,improperly using and improperly disposing of the intellectual proper-ty rights of others.
Layout
?Patenting core technologies in new product development to form a
layout of patent protection.?Identify the blind area for the protection of core technology throughanalysis of existing and industry patents, and guide e?ectively thedirections of R&D and operation.
Noveltycheck
?Relevant department conducts novelty checks to determine whether
intellectual property rights infringement will occur before carrying out
activities involving intellectual property rights, such as scienti?c and
technological innovation, new product sales, and external exhibitions.?Make full use of intellectual property literature to formulate the right
research direction and technological routes before the R&D and
technological transformation of new technologies, new processes,
and new products to raise the threshold of R&D, and avoid duplicate
development or IP infringement disputes.
Direction of theReport
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Build
excellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
Management systemSpeci?c management progress
?Construction of showrooms：
Xinao Tex and Xinao Cashmereconstruct product showrooms.
?Regular visits：pay regular visits
to customers, collect theircomments on the company.
?Customer Satisfaction Survey：
Send "Customer Satisfactionquestionnaire" to customers athome and abroad every year.
?Xinao Tex has constructed three spatial showrooms, namelyshowroom for outstanding works of designer competition,showroom for sample clothing of trend catwalks and showroom for ACTIVEWOOL functional yarn to give customers andvisitors a more intuitive feeling.?Taking "cashmere", "inclusive", "integration" as the curatorialtheme, Xinao Ningxia divided its display area into multimediaarea, sample selection and approach area, color wall, andwindow display area, to give customers a deeper understandingof the company’s products, development history and compre-hensive strength.?In 2023, the Company took the initiative to pay interactive visitsto key customers and collected their requirements on service,quality, products and speci?c requirements for overseasbusiness from customers, and fed back the correspondingrequirements to the responsible departments for resolution andaction.
?Investigated the user experience and product experience inwhole process of pre-sales, in-sales, and post-sales. Xinao Texcarried out satisfaction survey on 87 customers in 2023, with asatisfaction score of 88.32.
Participation in the international fashion week trend launch showCommunication over exhibitions
ESG Report2023
Customer Management System and Management ProgressManagement systemSpeci?c management progress
?Well-developed service network：
build an independent popular color
system and respond to customer
needs in time.
?Professional service team：deploy
su?cient salespersons, provide
one-on-one exclusive service to
quality customers.
?Every year, Italian color experts are invited to predict the domes-tic and international trends of woolen knitwear in the next 1-2years, and the theme colors of the seasons spring/summer andautumn/winter are released in January and July every year.Through the leading of fashion trends and digital analysis ofcustomer demands, precise stocking service is launched toprovide rapid response to customer demands.?By the end of 2023, the Company has set up o?ces and market-ing teams in the US, UK, France, Germany, Japan, South Korea,and Northern Europe, etc., with marketing channels coveringmost provinces in China and more than 20 countries and regionsoverseas. The head o?ce works together with local marketingand sales sta? to localize customer communications.
Customer Service ManagementCustomer Rights & Interests
Adhering to the service concept of "customer demand-centered", the Company continuously strengthens customer service before,during and after sales, establishes a customer service system covering before and after-sales service, customer communicationand satisfaction management, and formulates system documents such as "Management Measures for Measurement of CustomerSatisfaction" to constantly improve management e?ciency and standardization.
?Diversi?ed communication
approaches and channels：display
the company's cutting-edge innova-tive achievements by participatingin exhibitions and exchangemeetings, build new mediaplatforms to publicize variousactivities of the company.?Upgrade of brand image：build acomplete brand image system,strengthen the output of brandimage, and deepen the connotationof corporate culture.
?In 2023, the Company participated in exhibitions such asSPINEXPO for international fashion yarns and knitwear,PERFORMANCE DAYS Munich for functional fabrics and accesso-ries and ISPO Munich for international Sporting Goods.?The Company promoted all types yarns to the corporatecustomers and end consumers through ?ve major new mediaplatforms, namely O?cial Account, Tik Tok, Xiaohongshu (littlered book), WeChat Video Channel and instagram. By the end of2023, the number of O?cial Account followers has exceeded10,000, and the number of Tik Tok followers has exceeded 5,000.?In 2023, the Company newly upgraded its brand image anddebuted its launch in Italy, Hong Kong and Shanghai successive-ly, showcasing XINAO’s brand story, brand image and a newseason of product color cards and collections.
Pre-sales
andafter-sales
service
Managementof customercommunica-tion andsatisfaction
Managementof customercommunica-tion andsatisfaction
Customer Management System and Management Progress
Direction of theReport
Letter from the
ChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitative
performanceAnnex
Process for Handling Customer Complaints
Responsible MarketingThe Company carries out management of responsible marketing in strict accordance with national laws and regulations as well asrelevant rules in the industry, and conveys true, accurate, e?ective and easy-to-understand information to customers and consum-ers on product characteristics, service e?ciency, potential risks, safety instructions, operation and maintenance methods throughthe Company's o?cial website, exhibitions, product launches, and new media, etc.The Company reviews all new product detail sheets and brochures released to ensure that there is no content or description thatinfringes on or violates the requirements of the advertising laws. In 2023, there were no incidents in which the Company waspenalized by the competent authorities for violating laws, regulations or other voluntary rules relating to the marketing, informa-tion and labeling of its products and services.
The Company establishes a timely and e?ective mechanism for handling customer complaints, formulates managementdocumentations such as the "Procedures for the Control of Handling Customer Complaint", speci?es that a specially-assignedperson is in charge of customer complaints, and standardizes the e?ciency of responding to customer claims and demands. TheCompany also establishes a customer complaint management system in the OA system to enhance the e?ciency of recording andhandling of customer issues. The Company receives customer complaints in a timely manner through channels such as customerfeedback phone (0573-88455805) and the company's o?cial website, and categorizes all complaints and ensures that "everycomplaint will be closed". In 2023, the closure rate of the Company's complaint remained at 100%.
CollectCollect customer feedback,receive and anticipate complaints.
Investigate
Respond
Investigate by relevant departments,formulate solutions, and rectify
preventive measures.
Respond to customer the handling state,track the implementation of corrective andpreventive measures, and close complaints.
Color cards and collections
New brand launch event
ESG Report2023
Direction of the
Report
Letter from the
ChairmanAbout XINAO
ESGManagement
Robust: Consolidate
Management
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
INGENUITY
Perform routine login oflog analysis on criticalinformation systems toidentify potential cyberattacks and maliciousaccess.
Set dynamic veri?cationcode for systems such ascollaborative platformsthat are universal, mobile,and highly applicable todi?erent places toincrease the cost anddi?culty of maliciousaccess and attacks.
Introduce o?-site ando?-computer backups onthe basis of front-endhardware ?rewalls andnetwork antivirus softwareto improve cyber securityand disaster tolerance.
Participate in the cyberattack and defense drillcoordinated by thecyber security supervi-sion brigade of thepublic security bureau,and make response,recti?cation and securi-ty improvement accord-ing to the report of thecyber security attackand defense drill.
Measures to Protect Information Security
Information Security & PrivacyThe Company attaches great importance to its own information security and the protection of customer privacy, and strictlycomplies with the requirements of the the
thethe
theetc. The systems and policies related to the protection of information cover allbusiness lines and data management.The Company has established a three-tier management system of information security, namely, "Information Security LeadingGroup, Information Security Prevention and Control Group and Information Security Emergency Response Group". The Informa-tion Security Leading Group is chaired by the general manager of the Company, who is the ?rst person responsible for the Compa-ny's information security and the overall supervision and management, overall planning, decision-making and disposal of theCompany's information security; the Information Security Prevention and Control Group is led by the information center, with theparticipation of various business functions to carry out the construction of information security and day-to-day governance workon a regular basis; and the Information Security Emergency Response Team, led by the company's management representative,with the participation of the vice presidents in charge of each function and the leaders of core business departments, is responsiblefor dealing with all kinds of information security incidents and accidents, and carrying out emergency drills from time to time tocope with potential risks and enhance its data disaster tolerance and security capabilities against risks.The Company stores all customer information and data in the information system, which can only be e?ectively accessed andextracted through speci?c authorization to prevent malicious disclosure. Meanwhile, the Company sets access rights for salespersonnel at all levels through the ERP system to protect customers' information such products and colors, and prohibits salespersonnel from using customized products and colors for other customers' orders. In 2023, there were no data breaches orcybersecurity incidents in the Company that negatively impacted customers and employees.
Responsible Supply ChainsAccording to the degree of in?uence of purchased materials on ?nished products, the Company classi?es purchased materials intofour categories: Ⅰ (raw materials), Ⅱ (outsourced processing), Ⅲ (accessories) and Ⅳ (other). The company formulates "SupplierManagement Procedures" and "Procedures for the Control of Purchasing and Outsourcing Process" to clarify the requirementsrelated to the categorization, inclusion, evaluation and daily management of suppliers, and apply di?erent control levels todi?erent categories of suppliers.
Supplier management system
Management processSpeci?c actions
Inclusion
of newsuppliers
Dailymanage-
ment ofquali?edsuppliers
Disquali?cation ofeligible suppliers
?Request for new supplier inclusion when existing quali?ed suppliers cannot meetrequirements of cost, delivery or quality.?Suppliers are required to have a certain production scale, as well as competitiveness
in terms of capacity, quality, price, transportation, service and brand. Providerelevant certi?cates such as their product quality certi?cates, quality and environ-mental system certi?cates, as well as environmental protection commitment letters.?Fill out the “Supplier Information Registration Form”.
ApplicationQuali?cation
survey ofpotentialsuppliers
?Verify the quali?cation of suppliers, review the implementation and operation of
their quality management (raw materials, process, outgoing quality control, etc.) andenvironmental system.?Fill in the "Supplier On-site Survey Form" and "Supplier Social Responsibility Assess-ment Form", and those not reaching 80 scores won’t be included in the quali?edsuppliers until their recti?cations are completed.
?Make statistical analysis monthly for Class I and Class II suppliers on their qualityindicators, cost indicators for delivery, and environmental information. The assess-ment cycle is half a year for Class I suppliers, and one year for Class II suppliers.?Include supply quality, contract ful?llment, service provision and support capability,
price competitiveness, self-improvement ability, quality system, environmentalprotection, safety, etc., in supplier evaluation, evaluate suppliers regularly and ?ll in“Supplier Assessment Form” to reduce supply chain risks.?If a Class I supplier is rated C in the assessment cycle, relevant departments shallorganize on-site review, propose recti?cation items, and track the recti?cationresults.?If a Class I supplier is rated A in the assessment cycle, it will be rewarded with anincrease in the procurement ratio and a reduction in the payment cycle.?Any supplier whose materials or services have major quality accidents or whosesupplies have been continuously unquali?ed shall be disquali?ed.?Any supplier that fails to supply the goods for one consecutive year shall be disquali-?ed. When it is required to supply again, it will be re-evaluated as a new supplier.
On-site
assessment
?Sign documents such as the “Supplier Commitment on Social Responsibility” andthe “Supplier Commitment on Anti-Bribery/Anti-Corruption” with new suppliers toprevent social responsibility risks for suppliers.
Inclusion ofnewly quali?ed
suppliers
Assessment
management
Review
?The potential suppliers will be included as new suppliers after their submitted
samples being approved.Approval of sample
from suppliers
Login log analysis
Dynamicveri?cation code
O?-site and o?-computer backups
Cyber attackand defense drill
ESG Report2023
Direction of the
Report
Letter from theChairmanAbout XINAO
ESGManagement
Robust: Consolidate
Management
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
Republic of China, Personal Information Protection Law of the People's Republic of China, Regulations for the Protection of
Data Security Law of the People's Republic of China, Cybersecurity Law of the People'sPersonal Information of Telecommunications and Internet Users, Regulations of the Peoples Republic of China for SafetyProtection of Computer Information Systems,
2023年度环境、社会及公司治理（ESG）报告
COMMON PROSPERITY
PAINT A ROSY
PICTUREEmployee rights & bene?tsEmployee training & development
Occupational health & safety
Industry & people’s values
The SDGs to which this chapter is dedicated:
Employee Rights & Bene?ts
Employment and basic rights and interests of employeesThe Company attaches importance to and protects the basic rights and interests of employees, and establishes a comprehensiverecruitment and employment management system focusing on the dimensions of recruitment and termination, working hoursand holidays. On the basis of the Company's standardized system, some subsidiaries formulate speci?c management systemsaccording to their own operating conditions to carry out recruitment and employment management in a targeted manner. In 2023,the Company's labor contract coverage rate was 100%, and there were no incidents of penalties imposed by the relevant authori-ties due to violation of laws and regulations related to labor standards on hiring and termination of employees, working hours andholidays.
Employee Equality and Diversity
The Company adheres to the cultural values of equality and diversity, and creates an equal and inclusive workplace environment for itsemployees. The Company sticks to the principles of "fairness, equity and openness" in the recruitment, employment and workplace,and is committed to providing equal opportunities in hiring, compensation, training, promotion and dismissal, without discriminationor disparity in treatment of employees on the basis of race, gender, social class, nationality, religion, disability or political a?liation, etc.The Company advocates workplace inclusion and provides equal development opportunities and corresponding welfare guarantee forwomen, ethnic minorities and middle and senior age groups under the premise of meeting business operations. In 2023, the Companyhad a total of 2,402 female employees, 913 employees over the age of 50, and 528domestic minority employees.The Company establishes labor union in accordance with the law, pays continuous attention to the needs of employees, and protectsthe legitimate rights and interests of employees through means of sta? congresses. In order to further regulate the rights and obligationsof the Company and its employees, establish harmonious and stable labor relations and safeguard the labor rights and interests of theemployees, the Company's labor union, as the representative of the employees, entered into a Collective Contract with the Company,agreeing that both parties shall, according to the actual condition of the Company, and on the basis of mutual respect and friendlycooperation, conduct equal consultation on matters of vital interests of the employees, such as labor contracts, negotiation on wageadjustment, insurance and bene?ts, labor safety and hygiene, and special protection for female workers, etc. After the signing of theCollective Contract, it will be used as the basis for the company to formulate labor rules and regulations, and employees are informed ofrules and regulations and major decisions involving their immediate interests through forms of public announcements. In addition, theCompany attaches importance to the right of democratic communication of employees, and has set up diversi?ed democratic commu-nication platforms for employees, such as the care hotline, WeChat o?cial account, employee representative forum, employee opinionsurvey, mailbox, bulletin board, and talk room (dispute mediation committee).The Company sets up a female sta? committee, which focuses on the needs of female employees with an emphasis on negotiation anddeliberation, and solves the practical problems of women workers through the building the "Tongxin" council room and carrying out"mutual help among sisters" activity. Meanwhile, the Company opposes workplace harassment, adopts the principle of "zero tolerance"for any form of workplace harassment, actively creates an equal and safe working environment for employees, and establishes a mecha-nism to preventing and controlling sexual harassment in the workplace to protect the physical and mental health, as well as the safety oflife and property of employees. In 2023, there were no substantiated incidents of harassment or discrimination at the Company.
The Company insists on the legal employment of labor and establishes a system that eliminates child labor and forced labor. Thecompany is committed to eliminating any employment or support of child labor or forced labor. At the same time, the Companyprohibits employees from paying deposits or storing ID cards when employed, and eliminates prison labor, indentured labor,bonded labor, slave labor, or any punitive, forced, or involuntary labor. In 2023, there were no instances of child or forced labor atthe Company.The Company formulates recruitment plans for di?erent positions, and provides equal employment opportunities and competi-tive salaries by means of online recruitment, live communication and o?ine interviews, etc. In 2023, the Company enrolled in atotal of60 o?ine job fairs, 3 live recruitments and 863 interviews. At the same time, the Company continues to increase theintroduction of overseas talents. In 2023, the Company focused on the recruitment of talents for overseas projects in Vietnam,reserving 5 overseas professionals (non-production workers).
?Recruitment： Implement the " Measures for the Management of Recruitment
and Employment of Production Line Employees" and the "Measures for theManagement of Recruitment and Employment of Non-Production Line Employ-ees", adhere to legal compliance, and uphold the principles of equality, fairness,and non-discrimination in the recruitment process.
?Separation：Implement the "Measures for the Management of Employee
Separation", handle separation procedures according to the type of separation,and comprehensively protect the legitimate rights and interests of employees inthe process of separation.?Retirement：Implement the "Measures for the Management of RetirementRetention", which stipulates matters such as retirement, rehiring policies afterretirement and management requirements, etc.
Employee Recruitment and Employment Management System
Recruitment and separation
?Working hours：Implement the " Attendance Management Measures" and
carry out the standard working system.?Holidays： Implement the "Attendance Management Measures", and enjoynational statutory leave, as well as personal leave, sick leave, work-related injuryleave, marriage leave, maternity leave, bene?t leave (birthday), funeral leaveand other leave in accordance with the law.Working hours and holidays
ESG Report2023
Direction of the
Report
Letter from theChairmanAbout XINAO
ESGManagement
Robust: Consolidate
Management
Ingenuity: Build
excellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
Employee Care Platform
?Medical aid fund：on the basis of socialsecurity reimbursement, theout-of-pocket expenses can bereimbursed by the company for another70%, and the accumulated subsidies asof the end of 2023 amounted to nearly299,910 yuan.?Participation in the Employee MedicalMutual Aid Program of TongxiangFederation of Trade Unions：the fundsrequired for medical mutual aid are paidin full by the Company's trade unionfund, and as of the end of 2023, theexpenditure of premiums totaled143,800 yuan.?Assistance for needy families：In 2023,16,600 yuan of assistance was granted toemployees in need, and 190,000 yuan ofsubsidies was applied for employees.
?42 km trailwalk titled “Embrace newchallenges for a better future”?The ?rst women's talent and skill
show & Women's Day garden party?The ?rst summer camp for young
migratory birds?Rice dumpling competition on the
Dragon Boat Festival?University student forum on the
Mid-Autumn Festival?Knowledge contest of Party history?Knowledge contest of little wool
master?The third quality expansion for
university students
?Free accommodation：free dormito-ry for non-local employees, coupleroom for non-local working couple,enjoy free utilities within thespeci?ed limits.?Family service center：equippedwith dance room, gym, leisure bar,talk room, reading room, etc.
?Children's schooling：assist non-lo-cal sta? to solve their children'sschooling problems.
Recreational and
sports activities
Living and working inpeace and contentment
Mutual aid
Employee Bene?ts and CareThe Company establishes a comprehensive welfare security system to e?ectively meet the multi-level and individualized welfareprotection needs of employees in addition to safeguarding their basic rights and interests. The Company carries out general salaryadjustment and salary adjustment upon performance appraisals every year, and at the same time sets up a variety of internalawards for employees, such as selection and commendation of outstanding employees and outstanding managers to motivateemployees from both material and spiritual dimensions and promote their long-term retention and development. In 2023, the parcapita income of the Company’s employees improved by 6.72% over last year.
?Provides daily bene?ts such as shuttle bus for some routes, rental subsidies, ?ve social
insurance and one housing fund, commercial insurance, annual physical examination, giftpackages, condolences and team building activities.
Employee Bene?t System
Daily bene?ts
?Cash bene?t allowances：distance allowance, meal allowance, birthday bene?t, holiday
bene?t, referral fee bene?t, retirement bene?t, family planning allowance?Job subsidies：professional title subsidy, seniority allowance, full-attendance bonus, shiftallowance, holiday allowance for company reasons?Special rewards for excellence： Advanced and civilized sta? awards, operation competitionawards, excellent team awards, various sales awards, QC group performance appraisal awards
Cash allowance
Trailwalk titled “Embrace new challenges
for a better future”
ESG Report2023
Women's Day activity Summer camp for young migratory birdsKnowledge contest of little wool master The third quality expansion for university studentsBasketball game in Chongfu Town
Direction of the
Report
Letter from theChairmanAbout XINAO
ESGManagement
Robust: Consolidate
Management
Ingenuity: Build
excellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
Employee Promotion and Development
The Company implements the principle of open, fair and just promotion, and establishes a scienti?c promotion managementprocess through continuous optimization to ensure that outstanding talents can be identi?ed in the Company and achieve theirpersonal career growth.The Company is oriented to the ability and value creation of employees and provides employees with four major career promotionchannels: skill, technology, function and management. At the same time, the Company carries out the competitive recruitment ofmanagement cadres, and the independent evaluation of technical and skilled talents, guiding the career development of employ-ees and realizing the matching of people and posts. From 2021 to 2023, the Company carried out the independent evaluation oftextile ?bre combers/spinners/dyers for a cumulative total of more than 1,300 participations, with 844 certi?ed; launched anumber of skill competitions, with a cumulative total of more than 1,380 participations and 236 award winners; organized 78independent quali?cation appraisals of primary and secondary technical specialty, with 65 passing the appraisal; held 8management cadre competitions, with a cumulative total of 93 participations, and 35 appointments to various managementpositions through competitive recruitment by far.
In addition, the Company further improves the medium- and long-term incentive mechanism to create a bene?t-sharing mecha-nism between employees and owners, attracting and retaining outstanding management talents and business backbones. Sinceits listing, the Company has continued to carry out equity incentives, granting an accumulative total of352 incentives. As of the
end of 2023, the Company has granted over 17 million restricted shares in aggregate.
Skill
PrimaryWorker
TechnologyFunctionManagement
Intermediate
WorkerSenior Worker
SeniorTechnician
AssistantEngineerEngineer
Intermediate
Engineer
SeniorEngineer
Technical
Expert
ClerkJuniorSpecialist
Intermediate
Specialist
SeniorSpecialistSenior Expert
ClerkSupervisor
Manager
SeniorManagerTop Manager
Vertical Promotion
Horizontal Expansion
Technician
Employee Promotion Channel
The Company actively creates a development platform that emphasizes "people", supports the personalized development andall-round ability enhancement of employees, and empowers the development of talents in the whole industrial ecosystem. TheCompany adheres to the principle of making the best use of one’s talents and situating the talents in the best suited position, andbuilds a vigorous team with a singleness of purpose and unity of e?ort while extensively integrating talents.
In 2023, the Company further deepened its talent cultivation and echelon building e?orts, comprehensively sorted out trainingcourses and deeply integrated training resources. Making use of the existing internal trainer team, together with the online trainingplatform, the Company set up a "training college" in a new mode of specialization, customization and projectization, and carriedout1,062 training sessions throughout the year, with a total of 79,275 participations, an investment of 372,800 yuan, and atotal training time of 122,592 hours. At the same time, the Company continued to challenge and innovate in talent cultivation byorganizing the ?rst training camp for emerging shift leaders, the second training camp for sales newcomers, the "dual-teacher"training for textile college students and reports of position competition. It also pioneered the "2+1" progressive training model tocomprehensively establish a compound talent system through cognitive learning, rotational learning and mentor training, provid-ing strong talent support for the Company's strategy of sustainable and broadband development.
Type of Employee Training and Annual Achievements
Employee Training & DevelopmentEmployee Training System
TypeContentAchievement
General skills
828 participations
in training in 2023
Professional skills
372 participations
in training in 2023
Leadership skills
502 participations
in training in 2023
ESG Report2023
?Newcomer training: training newcomers from
social and on-campus recruitments?Basic literacy: company open class, online class?Engineer training?Technician training: "Dual Teacher" training for
textile students?Induction training: training camps for sales
recruits?Leadership training for top management?Leadership Training for middle management?Leadership training for grassroots managers:
training camps for emerging shift leaders
Direction of the
Report
Letter from the
ChairmanAbout XINAO
ESGManagement
Robust: Consolidate
Management
Ingenuity: Build
excellence
Common prosperity:
Paint a rosy picture
Green: Boost low-carton
transition
Key quantitative
performanceAnnex
The Company promotes its subsidiaries to carry out regular testing of occupational disease hazard factors and investigation ofoccupational health-related hidden dangers, monitor and rectify occupational disease risks, and strengthen the management ofemployees' occupational health. The Company provides employees with occupational health checkups and establishes occupa-tional health ?les for employees involved in occupational disease hazards.The Company has identi?ed the types of occupational disease hazards involved in its business, which mainly include noise, furdust, formic acid, acetic acid, sulfur dioxide, hydrogen peroxide, sodium hydroxide, sodium carbonate and other dusts. Accordingto the identi?ed hazards, the Company provides employees with Personal Protective Equipment (PPE) to protect the health andsafety of employees in the course of their work. In 2023, 100% of the Company's employees received occupational health-relat-ed physical examinations, and no new cases of occupational diseases was reported; nor were there incidents in which the Com-pany was penalized by the competent authorities for violating laws and regulations related to occupational health and safety.
The Company builds a comprehensive occupational health and safety management system based on the dimensions of systemguarantee, risk management and daily protection, and undertakes the corresponding accreditation process. As at the end of 2023,Xinao Tex, New Chuwa and Houyuan Textile have passed the ISO45001 occupational health and safety system certi?cation.Occupational Health
occupational health
and safety systemD
ai
ly
Protectio
n
System
guarantee
Risk
management
Safety drillFire drill
The Company continues to promote the standardization of productionsafety and requires that the safety facilities of construction projects mustbe designed, constructed, put into production and used in tandem with themain project to ensure safety from the source. Meanwhile, the Companycontinued to improve its safety monitoring measures, covering monitoringof major sources of danger, ?re alarm and ?re control, etc., in order toprevent and minimize production safety accidents, and safeguard the livesand properties of the Company and its employees. In 2023, the Companyinvested 3.5988 million yuan in production safety, carried out 22safety drills, with 19,373 participations in safety education and training,and there were no deaths due to work-related injuries throughout the year.
?A leading group on production safety isestablished, with the general manager asthe head of the group and the person withthe highest responsibility.?The leading group is responsible for theoverall management of the Company'sproduction safety, the formulation ofemergency plans, technical measures andoccupational health and safety programs,as well as the inspection and supervisionof production safety.?A full-time safety administrator is set upunder the leading group, who is responsi-ble for the implementation of the Compa-ny's speci?c safety management.
The Company takes "safety ?rst, prevention foremost, comprehensive control" as its safety management policy, production safetyresponsibility as the core, risk evaluation and control as the means to vigorously build a safety culture. Upon identi?cation, therisks involved in the Company’s production safety include safety risks in the construction phase of construction projects, safetyrisks in workplaces during the commissioning and operation phases, and risks in chemical management.
Occupational Health & SafetySafety Production
Safe Production Management System of Xinao TexManagement systemManagement structureManagement objectives
Safety training
ESG Report2023
?Management System for Produc-
tion Safety Objectives?Management System for Appraisalof Production Safety Responsibility?Management System for SafetyEducation and Training?Management System for LaborProtective Articles and HealthProducts?Emergency Management System?Management System for SafetyPerformance Evaluation
?0 ?re or explosionaccidents?0 major or seriousinjury accidents?0 fatal accidents
Direction of theReport
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
While grasping the new opportunities of rapid growth and low-carbon transition of the industry and realizing its own develop-ment, the Company strengthens all-round exchanges and collaboration with the industrial ecosystem, and enables the innovativechange of the whole industry on the basis of respecting the intellectual property rights of all parties, so as to open up a broadermarket and development space.In 2023, the Company carried out extensive and close exchanges with suppliers, customers, universities and research institutes,and industry associations through strategic cooperation, industry-university-research integration, industry exchanges andstandard co-construction, etc., and took the initiative in transferring and sharing the essence of its own operation, managementexperience and industrial advantages to the ecological chain, boosting the share of the role as a promoter of the industry's scientif-ic and technological development, and an explorer of the change of management mode.
Industry & People’s Values
Boost Industry Development
?The subsidiary Xinao Cashmere utilized the industry chain to revitalize local cashmere resources, drivethe development of cashmere carding and knitting factories, promote the development of the textileindustry in the direction of high technology, high e?ciency, high value-added, low pollution and lowemission. It designed and developed new products/services with green attributes, and advocated thetextile industry to become a front-runner in the simplicity and moderation of a green and low-carbonlifestyle. It was recognized as a "chain master" enterprise of the textile industry in Yinchuan City in 2023.Driving theindustry chain
?Carried out strategic cooperation with partners in the development of pure wool bedding, high-strengthSPECTRA long ?bers and microbial dyeing technology applications, Naton multi-functional ?ber, anddegradable polyester product, etc.?Carried out strategic cooperation with Textile School of Donghua University on discipline construction,talent training, promotion activities, and academic exchanges, etc.?Cooperated with Wuhan Textile University to develop self-twist spinning products.?Cooperated with Donghua University on the R&D of heat shrinkage detection method and device forultra-?ne wool ?bers, and the spinning technology and device for low-torque wool yarn.?Cooperated with partners to hold the Spring/Summer 2024 Merino Wool Trend and Innovation SharingSession to discuss the future and development of wool?Participated in the international conference on textile frontier science and technology and the annualmeeting of the World Alliance of Textile Universities, and exchanged ideas with peers from di?erentdisciplines and ?elds.?Organized the 14th National Collegiate Yarn Design Competition, and at the same time conductedo?ine exchanges and study sessions with a number of design colleges to build a platform for studentsto learn and communicate and show themselves.?Hosted the forum themed "Nurturing New Power for the Knitwear and Creating New Future for theIndustry Together" and the knitwear competition of 2023 KNIT FOR NEXT for emerging designers toexplore outstanding design talents for the knitting industry.
StrategiccooperationIndustry-university
-researchCo-construction
?Participated in the revision of national standard .?Presided over the drafting of group standard
and released for implementation.?Participated in the review of 3 items of Made in Zhejiang Province, 1 industry standard of the WorstedSpinning Standard Committee, 4 industry standards of the Cashmere Standardization Committee, and7 national and industry standards of National Wool Textile Standardization Committee.?Drafted the standards of "Indicators for Criteria for the Incoming Inspection of Woven Yarn Wool Tops"and "Requirements for Woven Yarns in Process" (color combination recombing, spinning).
Standardco-construction
Industry
exchanges
Works of designer competitionWorks of designer competition
Students and faculty from Shanghai Institute of Visual Arts (SIVA) fashion knitwear design major visited us for exchange
Student visitsThematic forums
ESG Report2023
T/CNTAC 136-2023 Smart Factory of Worsted Spinning -General Requirements,
GB/T26382 Worsted Fabric.
Direction of theReport
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
COMMON PROSPERITY
Public Welfare and Volunteer ServiceThe Company insists on common prosperity and wealth to the good, makes contributions in the ?eld of public charity, and activelyexplores the in-depth integration of public charity and business operation, forming a new pattern of "bringing employees to docharity and integrating business into charity". Sine 2023, the Company has pledged 60 million yuan to Tongxiang Charity Associa-tion for its fund titled "XINAO Charity Common Prosperity Fund of Tongxiang Charity Association". Each year, 3 million yuan ofannual value-added proceeds from the Chrity Common Prosperity Fund are used for social charity programs such as studentassistance and poverty relief, beautiful village, and cultural construction, etc.
The Company adheres to the work of Party building as the overall leadership, focuses on Party building with group construction,and continuously enhances the cohesion, combat power and in?uence of the Party organization. By the end of 2023, the Companyand its subsidiary Xinao Cashmere had a total of 8 party branches, with 170 party members, 3 probationary party members and 5active applicants. The Company encourages its employees to participate in social welfare undertakings in the form of volunteers,and collaborates with Party organizations at all levels of the Company to provide support for employee volunteer activities in termsof funding, resources, and platforms, etc.
The Company actively responds to the call of the government and relevant departments of the operation location, and carries outregular and speci?c volunteer activities with a focuse on the construction of urban civilization, environmental protection, andpublic health. In 2023, the Company continued to improve the construction of voluntary service system, and organized volunteersto o?er condolences and care to needy families in their villages from time to time and carry out civilized persuasion, environmentalhygiene inspection and recti?cation, etc. Meanwhile, on the World Oceans Day, XINAO volunteers participated in the activity of "My12 Hours with the Ocean" initiated by Narwhal Ocean Research Center (N.O.C.) and launched onshore beach-clearing action,which enabled them to e?ectively experience the action of restoring the ocean and gain an in-depth understanding of the ecologi-cal restoration of the ocean and its close connection with its healthy growth.
In addition, the Company continues to extend its public welfare tentacles with its connotation increasingly abundant, andactively carries out public welfare activities, and responses to social needs on a timely manner.
Student assistance
and poverty relief
Overview of the targeted use of Common Prosperity Fund in 2023
Overview of social welfare activities in 2023
?200,000 yuan was used for "Warmth Fund for Workers in Di?culties" by Tongx-iang Federation of Trade Unions.?300,000 yuan was used as charitable assistance for families in di?culty in Chong-fu town.?200,000 yuan was used as relief fund for enterprise employees.?300,000 yuan was used for various kinds of aid by Tongxiang Charity Association.?500,000 yuan was used as XINAO education fund for assisting students in need inChongfu Town, including 100,000 yuan assistantship for Tongxiang Senior HighSchool, and 100,000 yuan assistantship for Tongxiang No. 2 Middle School.
Beautiful village
?1 million yuan was used for construction of beautiful village and charitableassistance in Chongfu Town.
Cultural construction
?300,000 yuan was used for development of Buddhist culture of Tongxiang City.
Educationalsponsorship
?Provided yarns for textile students’ guaduation design, with a total sponsorship of wool and
cashmere yarns amounting to approx. 80,000 yuan.?Donated teaching aids to Lingwu No. 5 Kindergarten by purchasing more than 10,000 yuan of
teaching aids to support the development of the kindergarten’s physical ?tness program.Directional
donation
?Donated 200,000yuan to the Education Development Foundation of Shanghai Donghua
University to support the teaching and research activities of the Textile College.?Donated 40,000 yuan to the Hope Project titled“XINAO helps set sail, Broadnet guards its
growth” , caring and assisting students in need by pairing-o? assistance.Increasein ruralincomes
?Took the initiative to buy farmers' long jujube and watermelons, totaling 28,400 yuan.?Purchased daily necessities such as rice and cooking oil for the people in di?culty, totaling
16,000 yuan.
Party branches
Party members
ProbationaryParty members
Activeapplicants
Guardians of blue seaVolunteer activities of party members
ESG Report2023
Direction of the
Report
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy picture
Green: Boost low-cartontransition
Key quantitativeperformanceAnnex
Key Quantitative Performance
Corporate Governance & Economic Performance
Environmental Performance
In accordance with the principle of "comparability", the Company discloses the data performance re?ecting the e?ectiveness ofthe Company's ESG management and, to the possible extent, retrospectively adjusts the corresponding data for historical years. In2023, the Company retrospectively adjusted part of the data for the years 2021 and 2022 in accordance with the same statisticalrules.The scope of data statistics for the reporting period is consistent with the scope of the Company's consolidated ?nancialstatements, unless otherwise stated.
Note 1: [Calculation method] Value of social contribution per share = (net pro?t of the company + Taxes generated for the State during the year + Wages paidto employees + Interest on loans paid to creditors such as banks + Value created for other stakeholders such as external donations - Other socialcosts caused by environmental pollution, etc.) / Total number of shares of the company.Note 2: [Calculation method] Coverage rate of anti-corruption training for employees = Number of employees participating in anti-corruption relatedtraining / Total number of employees (end of period) 100%.Note 3: [Calculation method] Per capita hours of anti-corruption training for employees = Total hours of anti-corruption training for employees / Totalnumber of employees (end of period) 100%.RevenueRevenue growth rateNet pro?t attributable to shareholdersof listed companiesGrowth rate of net pro?t attributable toshareholders of listed companiesTotal assetsBasic earnings per shareValue of social contribution per share
10,000 CNY%10,000 CNY%10,000 CNYCNY/shareCNY
IndicatorsUnit202120222023
344,549.50
51.57
29,827.46
96.93
397,275.76
0.42
1.16
443，831.74
12.37
40，422.06
3.70
564，528.02
0.56
1.56
394,987.59
14.64
38,972.52
30.66
464,604.36
0.54
1.43
Economic
Total natural gasconsumptionNatural gas consumptionper unit of productGasoline
DieselLique?ed petroleum gas
Total power consumption
Conventional powerconsumptionConsumption ofpurchased green powerConsumption ofphotovoltaic powerPower consumptionper unit of productTotal steam consumptionSteam consumptionper unit of productComprehensive energyconsumptionComprehensive energyconsumption per unit of product
m?m?/ttttMWhMWhMWhMWhMWh/ttt/ttcetce/t
Unit202120222023
1,854,930.64
36.90
71.77
86.33
51.53
102,088.7494,384.02
0.00
7,704.72
2.03
120,417.60
2.40
25,778.66
0.51
1,768,867.88
30.12
95.98
87.32
21.93
112,843.00101,533.09
800.00
10,509.91
1.95
139,196.71
2.41
28,304.73
0.49
1,971,819.84
36.55
66.40
91.32
47.08
107,636.78
99,390.43
0.00
8,246.35
2.00
127,179.50
2.36
27,180.65
0.50
Comprehensiveenergy consumption
Indirect energyconsumption
Direct energyconsumption
Energy Consumption
反贪污数据绩效
Number of board of directorsNumber of female directors on the boardPercentage of female directors on the boardNumber of independent directors on theboardPercentage of independent directors onthe boardNumber of employee supervisors on thesupervisory boardNumber of general meetings ofshareholders heldNumber of board meetings heldNumber of supervisory board meetingsheld
PeoplePeople
%People%PeopleTime(s)Time(s)Time(s)
IndicatorsUnit202120222023
22.22
33.33
22.22
33.33
22.22
33.33
Coperate Governance
Indicators
Number of anti-corruption trainingsfor employeesNumber of employees involved inanti-corruption trainingCoverage rate of anti-corruption trainingfor employees
Total hours of anti-corruption trainingfor employeesPer capita hours of anti-corruptiontraining for employees
Number of corruption cases proposedand concluded against the issuer or itsemployees during the reporting period
Time(s)People%Hour(s)Hour(s)Case(s)
IndicatorsUnit202120222023
2,695
71.83
2,806
0.75
32,975
74.77
3,503
0.88
32,835
74.49
3,027
0.80
ESG Report2023
Direction of the
Report
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
Total greenhouse gas emissions
Scope I total greenhouse gas emissions
Scope II total greenhouse gas emissions
Greenhouse gas emissions per unit of product
tCO
etCO
etCO
etCO
e/t
Unit20212022Indicators2023
95,219.01
4,647.7290,571.29
1.89
104,822.534,443.73100,378.80
1.82
100,376.154,886.4195,489.74
1.86
Greenhouse Gas Emission
Water withdrawal
Municipal water supplySurface waterGround waterRain waterWater withdrawal per unit of productRecycled water consumptionWater recycling rate
m?m?m?m?m?m?/tm?%
IndicatorsUnit202120222023
1,399,795.40
788,962.40475,684.0065,174.0069,975.00
27.84
1,216,071.00
46.49
1,564,721.00918,277.00501,587.0083,953.0060,904.00
27.09
1,097,983.78
41.24
1,461,102.30
869,390.00454,790.00
78,344.3058,578.00
27.08
1,058,423.00
42.01
Water Resource Consumption
Annual environmental expenditure
Number of trainings on environmentalprotection for employees
Number of penalties for violations ofenvironmental protection laws and regulationsTotal ?nes for violations of environmentalprotection laws and regulationsNumber of penalties for excessive or illegaldischarge of pollutantsTotal ?nes for excessive or illegal dischargeof pollutants
10,000 CNYTime(s)Case(s)10,000 CNYCase(s)10,000 CNY
IndicatorsUnit202120222023
1,375.20
1,279.78
1,717.68
Environmental Management
Total wastewater discharges Industrial wastewater Domestic wastewaterWastewater discharge per unit of productWastewater discharge rate
Total hazardous waste
Hazardous waste emissions per unit of productHarmless disposal rate of hazardous wasteTotal general waste
8Total general production waste
Total general domestic waste
tttt/t%tkg/t%ttt
IndicatorsUnit202120222023
1,200,829.001,085,429.00115,400.00
23.89
85.79
15.91
0.32
7,221.936,614.11
607.82
1,276,412.221,148,951.22127,461.00
22.10
81.57
15.88
0.27
9,997.269,352.66
644.60
1,221,588.001,093,017.00128,571.00
22.64
83.61
10.80
0.20
8,168.917,553.34
616.57
By category
By category
Emission Management
IncinerationEntrust specialised units for standardised disposalGeneral waste emissions per unit of productWaste collection and disposal rate
ttt/t%
IndicatorsUnit202120222023
5,892.301,329.63
0.13
6,842.103,155.16
0.17
5,592.922,576.99
0.13
Note 1: [Explanation of change] In 2023, the Company increased interactive customer visits and supplier on-site audits, etc., therefore the consumption of
petrol for o?cial vehicles increased compared with the previous year.Note 2: [Explanation of change] In 2023, the subsidiary New Chuwa switched to natural gas for the canteen, therefore the consumption of LPG decreased
compared to the previous year.Note 3: [Calculation method] Total greenhouse gas emissions = Scope I total greenhouse gas emissions + Scope II total greenhouse gas emissions.Note 4: [Calculation method] Scope I greenhouse gas emissions are generated from the consumption of natural gas, petrol, diesel and lique?ed natural gas
of the Company, and the calculation method refers to the national standardNote 5: [Calculation method] Scope II greenhouse gas emissions are generated from the Company's outsourcing of conventional power and steam, and
deducting photovoltaic power and green power. The calculation method refers to the national standard
in which the thermal emission factor takes the
recommended value of 0.11tCO
/GJ, and the electricity emission factor is quoted from the document published by the Ministry of Ecology and
Environment of the People's Republic of China, which were 0.5810, 0.5703 and 0.5703tCO
/MWh respectively from 2021 to 2023.Note 6: [Calculation method] Water recycling rate = Recycled water consumption / (recycled water consumption + water withdrawal) × 100%.Note 7: [Calculation method] Wastewater discharge rate = Wastewater discharges / Water withdrawal × 100%.Note 8: [Explanation of change] The output of the subsidiary New Chuwa increased in 2023 compared to the previous year after the new production line
went into operation, resulting the increase of the total amount of hazardous waste, total amount of general waste, and total amount of generalproduction waste compared to the previous year.Note 9: [Explanation of change] The expenditure for environmental protection includes items such as environmental protection equipment and facilitiesand three wastes treatment, etc. In 2022, investment in environmental protection facilities was involved in the construction of the new project of thesubsidiary New Chuwa, hence the increase of the environmental protection expenditure for that year.Note 10: [Explanation of change] In 2023, the subsidiaries New Chuwa and Houyuan Textile increased their number of environmental protection trainings,therefore the total number of environmental protection trainings increased compared to the previous year.
Emission ManagementBy modeof disposal
ESG Report2023
Direction of theReport
Letter from theChairmanAbout XINAO
ESGManagement
Robust: Consolidate
Management
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
Requirements of the greenhouse gas emissions accounting andreporting ? Part 12: Textile and garment enterprise (GB/T 32151.12-2018).
Requirements of the greenhouse gasemissions accounting and reporting ? Part 12: Textile and garment enterprise (GB/T 32151.12-2018),
Social Performance
Total number of employees (end of period) Male Female Full-time labour contracting Other forms of employment Aged below 30 Aged between 30 to 50 Aged above 50 Working in Chinese MainlandWorking in Hong Kong, Macau, Taiwan and oversea regions Primary levelPrimary management Middle management Senior management Master's degree or above Bachelor's degree Junior college degree or belowNumber of employee turnover Male Female Aged below 30 Aged between 30 to 50 Aged above 50Employee turnover rate
1 Male Female Aged below 30 Aged between 30 to 50 Aged above 50
PeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeoplePeople%%%%%%
IndicatorsUnit202120222023
3,7521,4742,2783,375
2,394
3,549
3,401
3,517
15.87
18.25
14.26
32.58
12.53
7.82
3,9791,5772,4023,502
2,478
3,757
3,648
3,685
17.10
17.69
16.71
29.16
15.40
12.28
3,8061,4952,3113,381
2,406
3,583
3,511
3,532
14.36
14.42
14.31
25.56
12.51
9.91
By gender
By region
By position level
By educationalquali?cation
By genderBy age
By ageBy gender
By form of employmentBy age
Sta? Recruitment and Employment
Labour/service contract signing rateSocial insurance coverage rate
Medical examination coverage rate for employees
Medical examination expenses for employeesNumber of employees included in collectivenegotiation agreement (end of period)
Proportion of employees subject to periodic performanceor career development appraisals in all employees
Average annual income of employees
Growth rate of average annual income of employees
%%%10,000 CNY
People
%CNY/People
%
IndicatorsUnit202120222023
87.21
63.81
3,363
21.99
84,237.08
14.13
86.11
53.79
3,474
25.21
95,881.37
6.72
88.33
47.78
3,379
25.88
89,844.89
6.66
Employee Rights & Bene?ts
Number of employees in occupational disease risk positionsNumber of employees su?ering from occupational diseasesMorbidity rate of occupational diseasesPosition tansfer rate due to occupational contraindicationsNumber of general work-related accidents of employeesNumber of major work-related accidents of employeesNumber of employees who died due to work-related injuriesProportion of employees who died due to work-related injuriesNumber of working days lost due to work-related injuriesNumber of participations of employees in safety educationImplementation rate of safety training for transfers(including secondments of more than 3 days)Number of security drills
PeoplePeople%%PeoplePeoplePeople%Day(s)Person-time(s)%Day(s)
IndicatorsUnit202120222023
2,083
2,27713,395
1,958
1,80819,373
1,986
2,03714,335
Occupational Health & Safety
ESG Report2023
Direction of theReport
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
Total number of employees trained (end of period)
Male
Female
Primary level Primary managementMiddle management
Senior managementEmployee training coverage rate
Male Female Primary level Primary managementMiddle management Senior managementTotal hours of training for employees
Male Female Primary level Primary managementMiddle management Senior managementAverage hours of training for employees
Male
Female Primary level Primary managementMiddle management Senior management
Total investment in employee training
Per capita investment in employee training
PeoplePeoplePeoplePeoplePeoplePeoplePeople%%%%%%%Hour(s)Hour(s)Hour(s)Hour(s)Hour(s)Hour(s)Hour(s)Hour(s)Hour(s)Hour(s)Hour(s)Hour(s)Hour(s)Hour(s)10,000 CNYCNY / People
IndicatorsUnit202120222023
3,7431,4712,2723,396
99.76
39.21
60.55
90.51
5.49
2.96
0.80
102,50346,04556,45892,5475,8893,437
27.32
31.24
24.78
27.21
28.59
29.89
21.00
31.06
82.77
3,9661,5712,3953,637
99.67
39.48
60.19
91.40
4.80
2.81
0.65
122,59247,44175,151110,405
8,4013,039
30.81
30.08
31.29
30.26
43.98
26.90
27.67
37.28
93.70
3,7971,4912,3063,505
99.76
39.17
60.59
92.09
4.15
2.76
0.76
107,600
47,11360,48798,922
4,4573,430
28.27
31.51
26.17
28.17
28.21
31.76
18.59
92.76
243.72
Employee Training & Development
Product & Service
Investment in R&DProportion of R&D investment in revenueNumber of R&D employees (end of period)Proportion of R&D employeesNumber of trademarks registered during the reporting periodNumber of trademarks applied during the reporting periodAccumulated number of valid trademarksNumber of patents authorized during the reporting periodNumber of patents applied during the reporting periodAccumulated number of valid patentsNumber of violations in the protection of commercial secrets(including intellectual property)
10,000 CNY
%People
%Trademark(s)Trademark(s)Trademark(s)
Patent(s)Patent(s)Patent(s)Case(s)
IndicatorsUnit202120222023
9,579.45
3.01
9.97
11,120.66
2.51
10.18
10,736.44
2.72
9.54
R&D Innovation & Intellectual Property Protection
Total number of suppliers In Chinese MainlandIn Hong Kong, Macau, Taiwan, and oversea regionsNumber of suppliers evaluated for environmental, labor, ethical, etcNumber of quali?ed suppliers evaluated for environmental, labor,ethical, etcProportion of quali?ed suppliers evalued for environmental,labour and ethical, etc.
Number of suppliers with anti-corruption agreements
Supplier(s)Supplier(s)Supplier(s)Supplier(s)Supplier(s)
%Supplier(s)
IndicatorsUnit202120222023
Supplier Management
Total number of complaints received about products and servicesHandling rate of complaints about products and servicesProportion of products sold that had to be recalled due to safety and health concernsTotal number of violations of laws and regulations related to products and services
Case(s)%%
Case(s)
IndicatorsUnit202120222023
By gender
By position level
By gender
By position level
By gender
By position level
By regionBy gender
By position level
ESG Report2023
Direction of theReport
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Build
excellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
Proper nouns / acronymsDe?nitions
Annex
Glossary of Proper Nouns and Acronyms
BLUESIGNESGFSCGCSGOTSGRSIPEISPOITLCAMESNATIVATMOEKO-TEX100PPEPRTRRWSSDGsMSDSSPINEXPOSustainaWOOLWMS
Bluesign StandardEnvironmental, Social and GovernanceForest Stewardship CouncilThe Good Cashmere StandardGlobal Organic Textile StandardGlobal Recycle StandardInstitute of Public and Environmental A?airsISPO Munich, ISPO Beijing, ISPO ShanghaiInternet TechnologyLife Cycle AssessmentManufacturing Execution System100% traceable wool ?bers from Chargeurs Luxury Materials,a French supplier of premium wool ?bersOEKO-TEX ? Standard 100Personal Protective EquipmentPollutant Release and Transfer RegisterResponsible Wool StandardSustainable Development GoalsMaterial Safety Data SheetImportant yarn and knitwear exhibition, held twice a year in Shanghai, China,and a series of exhibitions in Paris, New York and Hong Kong.Sustainable wool certi?cationWarehouse Management System
Note 1: [Calculation method] Employee turnover rate = Number of departed employees (in this category) / [Number of employees (in this category)at the end of the reporting period + Number of employees (in this category) departing during the reporting period] x 100%.Note 2: [Description of scope] The Company purchases social insurance for full-time labour contract employees and accident insurance for employ-ees in forms of employment other than full-time labour contract.[Calculation method] Social insurance coverage rate = Number of employees covered by social insurance (end of period) / Number offull-time labour contract employees (end of the period) × 100%.Note 3: [Description of scope] 100% coverage of the Company's entry medical examination and occupational diseases examination, and routinehealth check-ups are conducted at di?erent frequencies for di?erent age groups.[Calculation method] Medical examination coverage rate for employees = Number of employees participating in medical checkups in thecurrent year (end of period) / Total number of employees (end of period) × 100%.Note 4: [Description of scope] 100% coverage of collective negotiation agreements in companies and subsidiaries that are unionized.Note 5: [Calculation method] Proportion of employee subject to periodic performance or career development appraisals in all employees = Numberof employee subject to periodic performance or career development appraisals (end of period) / Total number of employees (end of period)× 100%.Note 6:[Description of scope] The statistical caliber is for employees from production-oriented enterprises.Note 7: [Calculation method] Employee (in a certain category) training coverage rate = Number of employees (in this category) trained / Total numberof employees (end of period) ×100%.Note 8: [Calculation method] Average hours of training for employees (in a certain category) = Total hours of training for employees (in this category)/ Number of employees (in this category) (end of period).Note 9: [Explanation of change] In 2022, the Company purchased a training platform, hence the increase of the training investment.Note 10: [Calculation method] Per capita investment in employee training = Total investment in employee training / Number of employees (end of
period).Note 11: [Calculation method] Proportion of quali?ed suppliers evaluated for environment, labour, ethics, etc. = Number of quali?ed suppliersevaluated for environment, labour, ethics, etc. / Number of suppliers evaluated for environment, labour, ethics, etc. ×100%.Note 12: [Explanation of change] Since 2023, the Company has been donating 3 million yuan annually from the proceeds of the self-titled charitycommon prosperity fund, hence the cash expenditure for projects of poverty alleviation and rural revitalization and projects of externaldonations and public bene?ts have increased as compared to the previous year.
Cash expenditures for projects of povertyalleviation and rural revitalization
Value of expenditure on goods for projectsof poverty alleviation and rural revitalizationCash expenditure for projects of externaldonations and public bene?ts
Value of expenditure on goods for projectsof external donations and public bene?tsNumber of participations of employeesin volunteer activitiesTotal hours of volunteer service of employees
10,000 CNY10,000 CNY10,000 CNY10,000 CNYPerson-time(s)Hour(s)
IndicatorsUnit202120222023
----
202.84
1.60
326.84
10.60
5.26
7.70
Community Bene?ts & Employee Volunteering
ESG Report2023
Direction of theReport
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex
Index against the
Overview
Business principlesSocial responsibility planning and working mechanismValue of social contribution per shareDisclosure of social responsibility report
(1) Construction of social responsibility system
(2) De?ciencies and problems in the ful?llment of social responsibility
(3) Improvement measures and speci?c schedule
Low-carbon products &climate change adaptation
Recycling of resources
Pollution reduction
Product quality & safetyScienti?c and technological innovation
& intellectual property protectionCustomer rights & interestsResponsible supply chainsEmpolyee rights & beni?tsCompliance & business ethicsCustomer rights & interests
Product quality & safety
Organization structure & functions
Employee rights & bene?tsOccupational health & safety
(1) Compliance with environmental protection laws and regulations and industry standards
(2) Environmental protection plan
(3) Use of natural resources
(4) Disposal of pollutants
(5) Pollution prevention and control facilities
(6) Payment of taxes and fees related to environmental protection
(7) Supply chain environmental security
(8) Other environmental protection responsibilities
(1) Policies, objectives and results of environmental protection
(2) Total annual consumption of resources
(3) Enviromental investment and environmental technology development
Employee rights & bene?ts
Low-carbon products &
climate change adaptationRecycling of resourcesPollutant reduction
Responsible supply chains
Recycling of resourcesPollutant reduction
Report ChaptersDisclosure Requirements
(4) Type, quantity, concentration and destination of pollutants discharged
(5) Construction and operation of environmental protection facilities
(6) Waste treatment, disposal, recycling and comprehensive use of discarded products
(7) Voluntary agreements signed with environmental authorities
(8) Incentives from environmental authorities
(9) Other voluntary disclosures
(1) New, renovated or expanded construction projects or major investments
(2) Violation of environmental laws and regulations and penalties
(3) Signi?cant litigation on environmental issues or assets seized, frozen,
impounded, pledged or mortgaged
(4) Key discharge units
(5) The impact of newly promulgated laws and regulations on the company
(6) Major environmental protection events
Implementation of environmental policies and corrective measures
(1) Pollutant discharge
(2) Construction and operation of environmental protection facilities
(3) Emergency response plan for pollution incidents
(4) Pollutant reduction measures
(1) Laws, regulations and industry standards of product safety
(2) Production environment and production process
(3) Safety gurantee mechanism for product quality and emergency response
plan for accidents
(4) Other responsibilities realted to production and product safety
(1) Employee management system and measures for dealing non-compliance
(2) Prevention of occupational hazards and supporting safety measures
(3) Employee training
(4) Other responsibilities for protecting employee rights and bene?ts
Scienti?c ethnics
Employee rights & bene?tsEmployee training & developmentOccupational health & safety
Report ChaptersDisclosure Requirements
Scienti?c and technological innovation& intellectual property protection
Product quality & safety
Pollutant reductionProduct quality & safetyEmployee rights & bene?tsOccupational health & safety
ESG philosophy & governanceKey quantitative performanceDirection of the Report
Recycling of resourcesPollutant reduction
Low-carbon products &climate change adaptationPollutant reduction
Low-carbon products &climate change adaptationPollutant reduction
Low-carbon products &climate change adaptationPollutant reduction
8.1
8.9
8.10
8.11
8.12
8.13
8.14
8.15
8.2
8.3
8.4
8.5
8.6
8.8
8.9
8.7
ESG Report2023
Guidelines No. 1 of the Shanghai Stock Exchange for Self-Reg ulation of Listed Companies ? Standardized Operation (Revised in August 2023)
Direction of theReport
Letter from theChairmanAbout XINAO
ESGManagement
Robust: ConsolidateManagement
Ingenuity: Buildexcellence
Common prosperity:
Paint a rosy pictureGreen: Boost low-cartontransition
Key quantitativeperformanceAnnex