About This ReportReporting entity
The Reporting entity is "Lu Thai Textile Co., Ltd.", which can be referred to as "We", "the Company", "Lu Thai", "Lu ThaiCompany" , "Lu Thai Textile", "The Group" and "Group" unless otherwise speci?ed in the main text.Scope of the report
The time span of this Report is mainly from January 1 to December 31, 2024. In order to maintain the continuity andcomparability of information, some content is beyond the aforesaid time span. The information involved is fromthe internal data of the Company, information submitted by subsidiaries, and public information. Unless otherwisespeci?ed, all amounts in this Report are expressed in RMB.References
This report has been prepared in accordance with the China Social Compliance 9000 for Textile & Apparel Industry(CSC9000T) , the Self-Regulatory Guidance No. 3 for Companies Listed on Shenzhen Stock Exchange—Preparation ofSustainability Report and the Self-Regulatory Guidance No. 17 for Companies Listed on Shenzhen Stock Exchange—Preparation of Sustainability Report(Trial). Additionally, it refers to the core plan of the Global Reporting Initiative (GRI)Sustainability Reporting Standards and the United Nations 2030 Agenda for Sustainable Development (A/RES/70/1).DisclaimerThis Report is released in both Chinese and English. In case of any discrepancies, the Chinese version shall prevail.Forward-looking statements included in this Report refer to the statements of the business activities, events, ordevelopment trends that may happen in the future or will happen soon as predicted or expected by the Company,except for the statements of historical facts. The actual results or development trend may signi?cantly di?er from theseforward-looking statements, due to variable factors. The Company is not obliged or responsible to update the forward-looking statements made by the Company in this Report before April 10, 2025, unless otherwise required by regulatoryauthorities.Access
This report is available for viewing and download on the following websites: http://www.szse.cn (Shenzhen StockExchange); www.lttc.com.cn (Lu Thai Textile); www.cninfo.com.cn (CNINFO).For any inquiries or feedback, please contact us via telephone at (+86) 533-5270088, email at sunyi@lttc.com.cn, or faxat (+86) 533-5418805.
Contents
Chairman's Statement
Key Performance IndicatorsReader Feedback
About the Company
Group pro?leOur cultureDevelopment historyPerformance reviewList of honorsIndustry roleESG GovernanceESG governance structureESG strategyStakeholder engagementMateriality assessmentRisk managementResponsible business conduct
Employee's Rights and Bene?ts/Building aHarmonious Workplace Together
Energy Conservation and EnvironmentalProtection/Advancing Green and Low-CarbonDevelopment
Production OperationsResponsible Production Operations
Products and ServicesBuilding First-Class Products and Services
Community Engagement/Striving to Be anOutstanding Corporate Citizen
Respect and equalityHuman rights and laborTalent managementBene?ts and care
Environmental management indicatorsachievementAddressing climate changeResources managementAtmospheric pollutant managementWaste managementBiodiversity protection
Production safety managementFire safety managementChemical managementSupply chain management
R&D and innovationQuality controlCustomer services and maintenance
Supporting education initiativesWelfare and charity actions
Energy Conservation andEnvironmental Protection Products and Services
| About the Company | Products and Services |
Chairman's Statement
| ESG Governance | Production Operations | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||||
Chairman's StatementDear friends, thank you for your interest in this Report. On behalf of the Board of Directors of Lu Thai Textile, I would like to express myheartfelt gratitude for your long-term support for the Company!The year 2024 marks our unwavering commitment to the principle of "customer ?rst and pioneering progress." We have focused onthe market, customers, and products, with business objectives as our guiding principle. Taking "customer ?rst" as both the startingand ?nishing point of our work, we have continuously advanced our key account strategy. While ensuring the stability of traditionalmarkets, we have strengthened our e?orts in developing emerging markets. Leveraging the advantages of our integrated industrialchain and well-structured domestic and international production bases, we actively provide customers with integrated fabric andapparel solutions. We have further optimized our domestic marketing network, vigorously expanded the domestic market, deepenedour presence in the professional wear sector, and proactively explored the women's wear market. Additionally, we have continued toexpand our overseas o?ces and marketing teams to better understand customer needs, develop markets, sell products, and enhancecustomer service.The year 2024 captures our innovative practices in "cost reduction, efficiency enhancement, and coordinated development."We have continued to advance the Lu Thai Production System, improving product delivery and service capabilities while furtherstrengthening our research and innovation capabilities. Each product line has focused on strategic business goals, reinforcing leanmanagement across the entire product realization process under the "pro?t center" model. Internally, we have optimized resourcesby re?ning organizational structures, sharing resources, reducing procurement costs, and minimizing quality losses, all to enhanceoverall operational efficiency. In yarn production, we have precisely managed material usage, optimized cotton consumption, anddynamically controlled conventional product inventories while continuously improving raw cotton procurement standards. In yarn-dyed fabric production, we have expanded product categories to match market demand, ensuring continuous product iteration andcompetitiveness. Meanwhile, knitted fabrics, functional fabrics, printed and dyed fabrics, and new apparel categories have taken onthe critical role of product portfolio adjustment, market expansion, and future growth support. By focusing on key challenges andsystematically overcoming them, we have unlocked new performance growth drivers for the Company.The year 2024 resonates with our steadfast pursuit of "building independent brands and enhancing brand value." In responseto evolving market dynamics and customer needs, we have upheld the "customer first" philosophy, continuously enriching ourproduct portfolio, improving quality, and cultivating our brand. We have established a globalized system encompassing research anddevelopment, design, production, and marketing in the textile and apparel industry, driving our brand internationalization strategyforward. We have continued to promote independent brand development, hosting the 2024 Lu Thai Textile Brand Launch Event andintroducing the "Lu Thai 1987" and online brand "Lu Thai Jianxing." In 2024, Lu Thai ranked among the top in the textile and apparelindustry with a brand strength score of 915 and a brand value of RMB12,748 million, achieving continuous brand value growth.The year 2024 highlights our strong sense of "focusing on business operations and providing solid support services." With firmcon?dence and unwavering determination, we have e?ectively coordinated various aspects of our work. Functional departments haveactively benchmarked best practices to enhance their capabilities and provide strong support for key projects and business operations.We have strengthened the management and operation of our major R&D platform, improving the commercial success rate of productdevelopment tasks. We have integrated upstream and downstream supply chain resources to build an e?cient, globally integratedsupply chain system, enhancing supply e?ciency. By fostering a people-oriented culture, we have accelerated the development of aninternational talent team and improved the training and management mechanisms for key positions. Additionally, we have reinforcedrisk awareness and the concept of safe development, improving risk identi?cation and prevention systems to ensure safe operationsand sustainable development.The year 2024 tells a compelling story of "nurturing cultural heritage and fostering collective spirit." On June 8, 2024, as we celebratedthe 37th anniversary of our founding, we unveiled a new version of our corporate culture philosophy—a blend of tradition andinnovation that aligns with both our current development landscape and future aspirations. A clearly defined mission, vision, andset of values have further uni?ed our thinking, strengthened our cohesion, and ignited our teams’ motivation and passion, laying asolid ideological and cultural foundation for Lu Thai’s next 30 years of growth. We remain deeply committed to our corporate socialresponsibility, translating our responsibilities and mission into action, thereby shaping a corporate image that is both responsibleand compassionate. From organizing vibrant cultural and sports activities such as choir performances, football tournaments, andbasketball leagues to holding recognition events such as the "Outstanding Employee Awards" and the "Lu Thai Craftsmanship Awards,"we continue to move in harmony with national development and resonate with our employees' growth.With endless mountains and rivers ahead, we forge ahead without pause. As we embark on a new journey in 2025, we will continue toprioritize ESG practices, enhance ESG performance, and collaborate with our partners to build a sustainable supply chain, contributingLu Thai’s strength to global sustainable development.
April 10, 2025
ESG Report 2024 Lu Thai Textile Co., Ltd
Energy Conservation andEnvironmental Protection Products and Services
| About the Company | Products and Services |
Chairman's Statement
| ESG Governance | Production Operations | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||||
Liu Zibin
Luthai Textile Co.,LtdChairman President
Energy Conservation andEnvironmental Protection Products and Services
About the Company
| Chairman's Statement | ESG Governance | Products and Services | Production Operations | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||||||||
About the Company
Group pro?le
Our culture
Lu Thai Textile Co., Ltd., founded in 1987, is a global apparel solutions provider with premium fabrics as its core. The Company is one of theworld's leading manufacturers of high-end yarn-dyed fabrics and a key producer of shirts for top international brands. As a dual-listed company(A-share and B-share), Lu Thai Textile possesses a fully integrated industrial chain that spans textile production, dyeing and ?nishing, garmentmanufacturing, and brand marketing. The Company has established 19 subsidiaries, three o?ces, and over 40 production factories acrosscountries including the United States, Italy, and Japan, making it an integrated, innovative, and international textile and apparel enterpriseencompassing R&D, design, manufacturing, and marketing services.Currently, the Company operates 700,000 spindles and 102,000 thread spindles, with an annual production capacity of 220 million meters ofyarn-dyed fabric, 90 million meters of dyed fabric, 20 million meters of functional fabric, 14,000 tons of knitted fabric, and 30 million garments.More than 60% of its products are exported to over 60 countries and regions, including the United States, the European Union, and Japan. TheCompany holds strategic partnerships with renowned domestic and international brands, with its high- and mid-end yarn-dyed fabric exportsaccounting for more than 18% of the global market share.Lu Thai Textile is committed to sustainable and environmentally friendly development, dedicated to creating eco-friendly textile products for theworld. The Company has consistently maintained a leading position in China's textile industry and has received numerous accolades, includingthe "National May Day Labor Award," the "China Quality Award," the third "China Grand Awards for Industry", the title of "Manufacturing Single-item Champion Demonstration Enterprise," recognition as one of the "Top 30 Chinese Printing and Dyeing Enterprises," and the "OutstandingContribution Brand Unit" award. In 2023, the Company was listed in the Yicai Corporate Social Responsibility Ranking in China and received the"ESG Innovation Practice Award."Since 1995, the Company has obtained certi?cations for ISO9001 Quality Management System, ISO14001 Environmental Management System,ISO45001 Occupational Health and Safety Management System, and SA8000 Social Responsibility Management System. Additionally, it has fullyimplemented the Excellence Performance Management Model, with a strong focus on developing the Lu Thai Production System (LTPS). To date,the Company has invested over RMB500 million in social welfare initiatives, including poverty alleviation, education support, student aid, elderlycare, community assistance, and environmental protection.
Focusing on the textile industry with fabric and apparel as our core business, we provide healthy, comfortable, and reliableproducts through international operations and green, intelligent manufacturing, serving customers worldwide and ful?lling people’saspirations for a better life.
Customer First: Customers are the foundation of the Company’s survival. Meeting customer needs and ensuring customersatisfaction are our unwavering pursuits and the ultimate standards for evaluating our work. We stay attuned to changes in customerneeds, respond quickly, innovate operations, and provide high-quality products and services to meet customers’ personalized anddiverse needs, enhance their experience, and achieve customer satisfaction.Driven by Hard Work: To adapt to new circumstances, the Company emphasizes the role of hardworking individuals while upholdinga "people-oriented" approach, providing a platform for them to realize their value and achieve rapid growth. Resources are directedtoward those who strive, ensuring their e?orts are recognized, so as to achieve common development of the strivers and enterprises.Employees are encouraged to set ambitious goals, challenge themselves, persevere through di?culties, prioritize dedication overpersonal comfort, take on responsibilities where they are most needed, and proactively address challenges to create value for theCompany and its customers.Pursuit of Excellence: Only through continuous pursuit of excellence can we adapt to new circumstances, overcome challenges,maintain competitiveness, and drive personal and corporate development. There is no "best," only "better." In both conduct and work,we are never satis?ed with present success, always aiming for world-class standards. We remain open and inclusive, embrace change,pursue continuous improvement, and foster innovation, striving to surpass ourselves, our competitors, and industry benchmarks, andto pursue excellence in every ?eld and every task.Integrity and Win-Win Cooperation: Integrity is the foundation of survival, and win-win cooperation is the path to development. Inpartnerships, we adhere to business ethics, remain honest and trustworthy, ful?ll stakeholder needs, and create value for all parties.By fostering stable, trusting, and mutually bene?cial relationships, we unite strengths to achieve greater success and share the fruits ofdevelopment.
We aim to be a world-class textile and apparel industry group with leading fabric development and manufacturing capabilities, a globallystructured presence in marketing, R&D, design, and production, and renowned expertise in integrated fabric and apparel services. Withoutstanding product quality, green fashion, leading market share, and strong brand in?uence, we strive to set the industry benchmark.
Mission: Global Elegance, Weaving Excellence, Green Manufacturing, Better Living
Values: Customer First, Driven by Hard Work, Pursuit of Excellence, Integrity andWin-Win Cooperation
Vision: A Global Green Fashion Textile and Apparel Industry Group with Leading FabricExcellence
ESG Report 2024 Lu Thai Textile Co., Ltd
Energy Conservation andEnvironmental Protection Products and Services
About the Company
| Chairman's Statement | ESG Governance | Products and Services | Production Operations | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||||||||
Energy Conservation andEnvironmental Protection Products and Services
About the Company
| Chairman's Statement | ESG Governance | Products and Services | Production Operations | |||||
Development history
1987
19901995
1998
2008
2010
2017
2019
2021
20232013
20152004
200620001988
1993
1997
1999
2003
2005
2007
2009
2012
2014
20162018
2020
2022
2024
Zibo No. 7 CottonMill, Lu Thai'spredecessor, wasestablished.
Lu Thai Textile Company wasopened formally.
It passed theISO9001 QualityManagementSystemCerti?cation.
The Companypassed theISO14001EnvironmentalManagementSystemCerti?cation.Ranguang TextileCo., Ltd. wasacquired.
The Company was recognized as aNational Yarn-dyed Fabric ProductR&D Base.
The Company startedits new 30-year voyage.A high-level forum onthe theme "Gather theTop Wisdom of theIndustry, Plan Lu Thai'sFuture Development"was held to plan thedevelopment vision forthe next three decades.The Company wasrecognized as a"National IndustrialDesign Center", makingit the ?rst enterprise towin this honor in ZiboCity.The water reuse projectwas completed.
The Lu Thai TextileFabric Museumand the Lu ThaiDevelopmentMuseum wereopened. The Lu ThaiIndustrial DesignSummit was held.The construction ofthe Functional FabricIntelligent EcologicalPark Project began.The construction ofthe Lu Thai knittingproject began andPhase I was put intoproduction.
The strategic cooperation project ofLu Thai Textile and Xiniu IntelligentManufacturing was initiated.
The inauguration ceremony fornew projects at Lu Thai Group'soverseas production base washeld.Lu Thai Textile was listed onthe 2023 Yicai Corporate SocialResponsibility Ranking in Chinaand won the "ESG InnovationPractice Award"
Lu Thai Textile released"LUTHAI 1987" and "Luthai Lite Collection"online brand
Lu Thai Milan O?cewas opened.The Company wasgranted the "ChinaQuality Award".
The Company was recognized as a "Five-starred Chinese IndustrialEnterprise in the Performance of Corporate Social Responsibilities".The "set of technologies and equipment for automatic digitalcheese dyeing", jointly developed based on the "industry-university-research-application" cooperation, was granted the First Prize of theState Scienti?c and Technological Progress Award.
The Zichuan Urban SewageTreatment Plant invested by theCompany was put into operation.The Lu Thai Sports Square wasput into use.
Lu Thai Group wasincorporated.The Companypassed theSA8000 SocialResponsibilityManagementSystemCerti?cation.
Lu Thai became A-share listed.Beijing Sichuang Apparels Co.,Ltd. was opened.
Lu Thai Textile Company, aChina-Thailand joint venture,was incorporated.
Lu Thai TextileCompany wasrestricted into a joint-stock enterprise withforeign investmentand renamed Lu ThaiTextile Co., Ltd.
Lu Thai becameB-share listed.YunjinchuanClothing Co., Ltd.was acquired.
Beijing Lu ThaiShirt Co., Ltd. wasestablished.
The Company passedthe OHSAS18001Occupational Healthand Safety ManagementSystem Certi?cation.Zibo Luqun Textile Co.,Ltd. was established.
LuFeng CompanyLimited wasestablished.
Lu Thai wasrecognized as a"Stated-accreditedEnterpriseTechnology Center"by ?ve departments,includingthe NationalDevelopment andReform Commissionand the Ministryof Science andTechnology.
The Lu Thai Textile and Apparel Engineering ResearchInstitute was founded.The Company was granted the Second Prize of the StateScienti?c and Technological Progress Award for its keyprocessing technology of ultra-high count pure cottonfabrics and its industrialization, high-?ux ?lms for printingand dyeing wastewater and recycling technology.
A grand ceremonywas held becausethe Phase II projectof LuFeng CompanyLimited was put intoproduction.The Companywon the title,"China AdvancedEnterprise withan ExcellentPerformance Model(2012)".
Lu Thai (America)Textile Co., Ltd. wasopened.The Companywon the "GlobalPerformanceExcellence Award".The Companywas grantedthe third "ChinaGrand Awards forIndustry".
The unveilingceremony ofthe Company'sacademicianworkstation washeld in the WestDistrict IndustrialParkThe Companysuccessfullypassed the on-site accreditationof demonstrationenterprises in thetextile industryfor energy-savingand emissionreductiontechnologyapplication
Lu Thai's operatingrevenue exceededRMB10 billion, a newstart of the new 30-year voyage.
Lu Thai issued RMB1.4billion of convertiblebonds.The Phase I project ofthe Functional FabricIntelligent EcologicalPark was put intoproduction.The project of coloredspun yarns was putinto production.
The unveiling ceremony of the"Zichuan District AestheticEducation Practice Base" at Lu ThaiVocational Training School washeld.Lu Thai Textile was included onthe list of the First China IndustryCarbon Peaking "Leaders"(enterprises).
ESG Report 2024 Lu Thai Textile Co., Ltd
Energy Conservation andEnvironmental Protection Products and Services
About the Company
| Chairman's Statement | ESG Governance | Products and Services | Production Operations | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||||||||
Lu Thai Schoolof Textile andApparel, ShandongUniversity ofTechnology, wasfounded.
Energy Conservation andEnvironmental Protection Products and Services
About the Company
| Chairman's Statement | ESG Governance | Products and Services | Production Operations | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||||||||
Performance review
Net pro?t attributable to shareholders ofthe Company
Taxes contributed to the state
Economicperformance
Socialperformance
Total payments to employees, including salaries, bonuses, allowances, bene?ts, housingprovident fund, and social insurance
Social contribution value per share
Cash dividends distributed overthe past three years
3553.1
1,607
Million
MillionRMB/share
Million
Million
Proportion of R&D personnel tototal employees
R&D investment and its percentage ofrevenue
Own brands: LT·GRFF, Lu Thai, Lu Thai 1987, Luthai Lite Collection, NARCISU and so on.
Donations to society andgovernment
Investment in education support
12.8
2,970,400
1,594,600
6,235,100
%
Own brands sales
RMB
RMB
RMB
ESG Report 2024 Lu Thai Textile Co., Ltd
Energy Conservation andEnvironmental Protection Products and Services
About the Company
| Chairman's Statement | ESG Governance | Products and Services | Production Operations | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||||||||
3.39
%
Energy Conservation andEnvironmental Protection Products and Services
About the Company
| Chairman's Statement | ESG Governance | Products and Services | Production Operations | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||||||||
List of honors
Industry role
2023-2024 " China’sGreat Textile Craftsman"
and "Most BeautifulTextile Worker"
"2024 China Textileand Apparel BrandCompetitivenessAdvantage Enterprise"
Key Technologies andIndustrialization of Structural
Design and Preparationfor Thermal and MoistureComfort Functional Textiles –Second Prize for Scienti?c and
Technological Progress
Silver Award in theFashion Product Categoryat the 5th "Governor’sCup" Industrial Design
Competition
2023 "DigitalTransformation andInnovation Unit" inShandong Province's textileand apparel industry
"Shandong Province MayFourth Red Flag YouthLeague Committee"
honorary title
Key Technologies and
Industrialization ofE?cient, Green, andFashionable Online Dyeing
Advanced Collective
in the "Five Zibo"Development Initiative
2023 "Top 100 Most
Attractive PrivateEnterprises for UniversityGraduates" in Shandong
Province
"Continuous InnovationUnit" in the Top TenCategories of TextileInnovation Products
One of the ?rst enterprisesnationwide to be certi?ed
as a "5A Enterprisein Corporate Culture
Development andManagement"
2024 "OutstandingContribution Enterprisefor Stable EconomicGrowth"
China National Textile & Apparel Council,China Finance, Trade, Light Industry,Textile, and Tobacco Trade Union, and theWomen's Workers Department of the All-
China Federation of Trade Unions
China National Textile and Apparel Council
China National Textile and Apparel Council
Department of Industry and InformationTechnology of Shandong Province
Shandong Textile and Apparel Association
Shandong Provincial Committee of theCommunist Youth League
China National Textile and Apparel Council
Zibo Municipal People's Government
Human Resources and Social SecurityDepartment of Shandong Province
China Textile Information Center
China Corporate Culture Institute
Zibo Municipal People's Government
Key Technologies and Industrializationof Structural Design and Preparation forThermal and Moisture Comfort FunctionalTextiles – Second Prize for Scienti?c and
Technological Progress
Key Technologies and Industrialization ofE?cient, Green, and Fashionable OnlineDyeing – First Prize for Scienti?c andTechnological Progress
"2024 China Textile and Apparel BrandCompetitiveness Advantage Enterprise"
Industry OrganizationsChina Chamber of Commerce for Import and Export of Textiles
China Dyeing and Printing AssociationChina National Garment Association
China Textile Engineering SocietyChina National Textile and Apparel Council
China Textile Enterprise AssociationChinese Association for Textile Enterprises Culture Construction
China Corporate Culture InstituteChina Cotton Textile AssociationChina Council for Brand DevelopmentChina Association for QualityShandong Textile and Apparel AssociationShandong Council for Brand Development
The 7th Vice Chairman OrganizationThe 7th Vice Chairman Organization Specially Invited
The 8th Vice Chairman OrganizationThe 26th Standing Director OrganizationThe 5th Vice Chairman Organization Specially Invited
The 10th Vice Chairman OrganizationThe 5th Vice Chairman Organization Specially Invited
The Vice Chairman Organization
The 6th Vice Chairman Organization
Standing Director Organization
MemberRotating Chairman OrganizationStanding Director Organization
Role of the Company
ESG Governance
Lu Thai Textile continues to enhance its ESG governance mechanism, optimizing its governancestructure to ensure scienti?c and e?ective decision-making. The Company actively implementsenvironmental, social, and governance initiatives, integrating ESG systematically into dailyoperations to comprehensively support high-quality corporate operations and achievesustainable and healthy development.
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | Products and Services | Production Operations | |||||
ESG Governance
| Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||
ESG governance structure
ESG SteeringGroupPresidentDepartmentheads
?Formulating the Group’s ESG objectives, strategy, and workplans, and submitting them to the Board of Directors for approval.?Identifying, monitoring, and reviewing potential ESG issues,risks, and opportunities that may impact the Group’s businessoperations, and submitting them to the Board of Directors forapproval?Prioritizing relevant ESG issues, risks, and opportunities, analyzingtheir potential impact on business operations, and identifying keyESG issues, risks, and opportunities.?Preparing and reviewing the annual ESG report and other ESG-related disclosures.?Handling other ESG matters deemed necessary by the ESG SteeringGrou
?Collecting and organizing materials for ESG reports.?Providing ESG feedback and recommendations within theirrespective departments.?Implementing sustainable development policies and initiativesassigned to them.?Integrating and evaluating ESG risks or opportunities identi?edwithin their operations.
Decision-making Level
Supervisory
Level
Management
Level
ExecutionLevel
Board ofDirectors
The Board of Directors is responsible for reviewing the Group'soverall ESG strategy and reports, as well as assuming ultimateresponsibility for the Group's overall direction, strategy, objectives,and performance in sustainable development.
Board ofSupervisors
The Board of Supervisors monitors the Group’s ESG policies,framework, management approach, and implementation status,providing recommendations for improvement to the Board ofDirectors.
All departments
Governance structure
Organizational Chart
The Company continuously improves the basic governance structure composed of the General Meeting of Shareholders, the Board of Directors,the Board of Supervisors, and the Senior Management, whose rights and responsibilities are de?ned in accordance with the Company Law, theSecurities Law, the Code of Corporate Governance for Listed Companies in China, the Guidelines No.1 of the Shenzhen Stock Exchange on theSelf-regulation of Listed Companies - Standardized Operation of the Companies Listed on the Mainboard, and other relevant laws, regulations,and regulatory documents in order to ensure e?cient and standardized operations.The Board of Directors performs its duties in strict accordance with the Articles of Association and the Rules of Procedure of the Boardof Directors. The Board of Directors has established the Strategy Committee, the Audit Committee, the Nomination Committee, and theRemuneration Committee. These special committees make full use of their expertise to make scienti?c decisions on the Company'sdevelopment issues.
Shareholders
Meeting
Board of Directors
President
SeniorManagement
Board of Supervisors
Board of Directors'Special Committee
Wholly-owned
subsidiaries
Majority-owned
subsidiaries
Branch companiesand offices
Production lines
Functionaldepartments
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | Products and Services | Production Operations | |||||
ESG Governance
| Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||
Committee Name
Name of Director
Liu ZibinXu ZhinanLiu DemingXu JianlvZheng Huisheng
Zhang ZhanqiZhang Keming
Du LixinZhou ZhijiQu DongmeiPeng YanliQuan Yuhua
MaleMaleMaleFemale
MaleMaleMaleMaleMaleFemaleFemaleFemale
Chairman and PresidentVice ChairmanDirectorDirectorDirectorDirector and Vice PresidentDirector and Chief AccountantDirector and Chief Engineer
Independent DirectorIndependent DirectorIndependent DirectorIndependent Director
June 6, 2007May 6, 2004May 12, 2017June 10, 2022June 10, 2022June 10, 2022June 10, 2022June 10, 2022March 10, 2019June 10, 2019June 10, 2022June 10, 2022
StrategyCommittee
NominationCommittee
CompensationCommittee
Audit Committee
Main Responsibilities
GenderAgePosition(s)
Date of ServiceCommencement
Functioning of CommitteeConduct feasible study on the Company'slong-term strategic development plans andmajor investment decisions, determine theCompany's development plans, improveinvestment decision-making process, enhancescienti?c decision-making, and improve thequality and e?ectiveness of major investmentdecision.
Study and formulate the criteria andprocedures for selection of the Company'sdirectors and senior management, optimizethe structures of the Board of Directors andthe management, and improve corporategovernance structure.
Formulate and review remuneration policiesand plans, formulate and implementassessment and evaluation criteria, improvethe assessment and evaluation systemfor the Company's directors and seniormanagement, and formulate scienti?c,e?ective remuneration management policies.
Responsible for the communication,supervision, and review of the Company'sinternal and external audits, strengthen theBoard's e?ective oversight of the management,enhance internal control capabilities, andimprove internal control policies.
Lu Thai Textile places great importance on board development, continuously improving its structure and functions. The Company ensures thee?ective operation of board committees, emphasizes the independence and diversity of board composition, and actively conducts trainingfor board members and management. The responsibilities of board members are assigned based on their professional experience to ensuree?cient board operations and scienti?c decision-making, thereby enhancing the overall management level and operational e?ciency of theCompany.
The Company's Board of Directors consists of 12 directors, including four independent directors, four female directors, and three foreigndirectors. In 2024, the Company held ten board meetings, achieving a 100% attendance rate. During the Reporting Period, 43 resolutions werereviewed and approved, covering topics such as related-party transactions, equity incentive unlocking, policy revisions, periodic reports, pro?tdistribution, share repurchases, and ESG materiality issues.Chairman: Liu ZibinMembers: Xu Zhinan, Liu Deming, XuJianlv, Zheng Huisheng, Zhang Zhanqi,Zhang Keming, Du Lixin, Zhou Zhiji, QuDongmei, Peng Yanli and Quan Yuhua.In 2024, the Committee held onemeeting, with a full attendance rate of themembers.Chairman: Qu DongmeiMembers: Liu Zibin, Xu Zhinan, Zhou Zhijiand Peng YanliIn 2024, the Committee held twomeetings, with a full attendance rate ofthe members.
Chairman: Peng YanliMembers: Liu Zibin, Zhou Zhiji and QuDongmeiIn 2024, the Committee held twomeetings, with a full attendance rate ofthe members.
Chairman: Zhou ZhijiMembers: Liu Deming and Qu DongmeiIn 2024, the Committee held six meetings,with a full attendance rate of themembers.
33%
Male directors
Chinese directorsFemale directors
Foreign directors
67%
75%
25%
Board development
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | Products and Services | Production Operations | |||||
ESG Governance
| Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||
ESG strategy
A company's sustainable development management shows the responsibility and respect of the company for its customers, employees,products, and future. For many years, Lu Thai has kept pace with international and domestic development trends for years. By vigorouslyresponding to national and industry policies, Continental Group has demonstrated its sustainable development through actions.2022-2026 ESG Strategic Goal: Achieve an industry-leading level of green, low-carbon, environmentally friendly, and sustainable development.Aligned with the United Nations' 17 Sustainable Development Goals (SDGs):
无贫穷
零饥饿
良好健康与福祉
优质教育性别平等清洁饮水和卫生设施经济适用的清洁能源体面的工作和经济增长产业、创新和基础建设
减少不平等
可持续城市和社区
负责任消费和生产
气候行动
水下生物
陆地生物和平、正义与
强大机构
促进目标实现的伙伴关系
End poverty in all its formseverywhere.Take urgent action to combatclimate change and its impacts.
Conserve and sustainably use the oceans,seas and marine resources for sustainabledevelopment.
Protect, restore and promote sustainable use of terrestrialecosystems, sustainably manage forests, combatdeserti?cation, and halt and reverse land degradationand halt biodiversity loss.
Promote peaceful and inclusive societies for sustainabledevelopment, provide access to justice for all and build e?ective,accountable and inclusive institutions at all levels.
Strengthen the means of implementation and revitalize
the Global Partnership for Sustainable Development.
End hunger, achieve foodsecurity, improved nutritionand promote sustainableagriculture.Ensure sustainableconsumption andproduction patterns.
Ensure healthy lives andpromote well-being forall at all ages.
Make cities and humansettlements inclusive, safe,resilient and sustainable.
Ensure inclusive and equitablequality education and promotelifelong opportunities for all.Reduce inequality within andamong countries.
Achieve gender equality and empower allwomen and girls.Build resilient infrastructure, promote inclusiveand sustainable industrialization and fosterinnovation.
Ensure availability and sustainable management ofwater and sanitation for all.Promote sustained, inclusive and sustainableeconomic growth, full and productiveemployment and decent work for all.
Ensure access to a?ordable, reliable,sustainable and modern energy for all.The Company has conducted the project of rooftopphotovoltaic power generation to contribute to theenergy transformation of enterprises and society.
The Company has actively paid taxes to the governmentsof countries where it operates to promote the economicdevelopment of the surrounding communities.
The Company includes health, safety, and environmentalrequirements in the bidding invitation requirements forsuppliers, thus indirectly urging suppliers and contractorsto enhance safety and environmental protection.The Company has actively participated in industryorganizations and initiatives, joined multiple industryassociations, earnestly conducted industry exchanges,and promoted industry development.
The Company has implemented the policy of localemployment and provided regionally competitiveremuneration and bene?ts.Provide a comfortable and safe working environment, ensuringemployee safety and health. During the pandemic, no clusterinfections occurred among Company employees.The Company properly prevented and treated occupationaldiseases. Besides, the Company has established and improvedemployees' pro?les of occupational health and organizedannual check-ups to protect the physical and mental health ofemployees.
The Company has improved its employee educationand training mechanism. In 2024, 23,988 employeesparticipated in vocational training, achieving a 100%vocational training coverage rate.The Company organizes activities to support studentsevery fall by providing employees' children withscholarships. It also donates educational funds to societyto cultivate textile talent.The principle of gender equality has been observed. TheLabor Union has earnestly protected female employeesand improved their competence.An equal remuneration system has been developed toensure equal pay for equal work between male and femaleemployees.
Production departments have been encouraged topropose new measures to save water. The Company hasincreased investment in reclaimed water reuse projects,further promoting recycled use of water resources andproviding a long-term guarantee for social development.By performing the digital and intelligent transformation ofproduction lines, Lu Thai has reduced labor intensity andraised resource utilization e?ciency.
In 2024, Lu Thai invested RMB207Millonin research fundsin total. Additionally, it has been granted 548 patents intotal, including eight software copyrights. Lu Thai hasorganized or participated in the formulation of 75 nationaland industry standards.
The Company has established plants in overseasdeveloping countries, and actively created jobopportunities to develop local economies.
Diverse assistance activities have been conducted ineconomically backward villages. Lu Thai Textile haspurchased agricultural products from local farmers anddonated daily necessities to residents to improve theirliving conditions.
Reports have been released regularly, and ESG-relatedinformation is actively disclosed to enhance transparency.Meanwhile, the Company has updated the requirementsfor suppliers and implemented stricter standards of dutyperformance for suppliers. It has worked with suppliersand contractors to actively perform duties to improvethe industrial chain environment and drive socialresponsibility practice.
Conserve and sustainably use the oceans, seas and marineresources for sustainable development.
Prior to the launch of a new project, Continental Group hasentrusted environmental assessment agencies to conductenvironmental assessment, including the assessment ofthe in?uence on local biodiversity.In the meantime, it earnestly performs greeninggovernance, holds activities on Arbor Day, and enhancesemployees' awareness of environmental protection.
Lu Thai Textile has responded to the 2030 "carbonpeak" and 2060 "carbon neutrality" goals by activelycarrying out climate action plans.
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | Products and Services | Production Operations | |||||
ESG Governance
| Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||
Government
Customers
Shareholders andinvestors
Suppliers
Communities and the
public
Employees
Value chain partners
StakeholdersIssues of ConcernMeans of CommunicationActions of Lu Thai TextileOperation inComplianceSafe and GreenProductionFul?llment of SocialResponsibilities
Supervision and
inspection
VisitsMaterial providing
Strictly complying with laws and
regulationsActively responding to environmental
calls and formulating action plansHelping the poor and improving people's
livelihoodsSupporting the public welfareImproving the product quality management
systemImproving the customer relationshipmanagement systemConducting the customer satisfaction survey
Visiting customers regularlyCompliant operations, openness, and
transparencySafeguarding the legitimate rights andinterests of shareholders by lawsRequire suppliers to sign a quality
statementRequire chemical product suppliersto provide relevant quali?cationcerti?cates and sign an environmentalcompliance statementConduct regular on-site supplier audits
and communications
Helping the poor and joining public
welfare activitiesCommunity donation and landscapingPromoting employment anddeveloping local suppliers
Improving the remunerationmanagement systemImproving employee cultivation andpromotion mechanismsDiverse communication channelsHelping for employees in needEstablish a comprehensive complaintmechanism and channels
Continuously improving suppliermanagement procedures and strengtheningthe control of operational risksStrengthening contract management andstandardizing credible procurementSharing experience and technology andexchanging needed goodsBuilding industry-university-research
platforms
Product QualityResponsible MarketingIntegrityRespecting Customers'Opinions
Customer visitsCustomer servicehotlineOpening businessoperationsSatisfaction surveyCorporate Governance
and Pro?tabilityHonest and CompliantOperationsCompetitive Edge
Shareholders MeetingOn-site surveyTelephone consultingInteraction Easy of theShenzhen Stock Exchange
Product QualityProduct Safety and
EnvironmentalComplianceCorporate ComplianceOperations
A HarmoniousCommunityRelationshipContributing to theCommunity Economy
Supplier auditsOn-sitecommunicationTelephone and emailcommunication
Supervision by themassesVisiting communities
Respecting Human RightsRemuneration andBene?tsCareer DevelopmentChannels
Health and SafeProduction
The Labor Union and theemployee representativeassemblyEmployee complaintSatisfaction survey
Green and Low-carbonDevelopmentHonest and CompliantOperations
Exchange visits among seniormanagement personnelExchange and cooperation inexperience and technologyDaily communicationExchange through industryconferences
Stakeholder engagement
Materiality assessmentAs part of our stakeholder engagement policy, we conduct periodic ESG materiality assessments. This year, with the assistance of externalexperts, we carried out a materiality analysis in accordance with the guidance provided by the Self-Regulatory Guidance No. 3 for CompaniesListed on Shenzhen Stock Exchange—Preparation of Sustainability Report and the Self-Regulatory Guidance No. 17 for Companies Listed onShenzhen Stock Exchange—Preparation of Sustainability Report(Trial) issued by the Shenzhen Stock Exchange. Through this process, weidenti?ed material issues that signi?cantly impact both the Company and stakeholders, determining the most critical issues for our businessand stakeholders while providing insights for the Group’s ESG reporting and strategy.
We place great importance on maintaining e?ective communication with internal and external stakeholders. By establishing a regularcommunication mechanism, we promptly understand stakeholders’ concerns and continuously optimize communication channels to activelyrespond to their interests. This approach ensures the orderly progress of the Company's sustainable development initiatives.
Materiality Assessment Process
Referring to the materiality issue distribution guidance from the Self-Regulatory Guidance No. 3 for Companies Listed on ShenzhenStock Exchange—Preparation of Sustainability Report and the Self-Regulatory Guidance No. 17 for Companies Listed on Shenzhen StockExchange—Preparation of Sustainability Report(Trial), we established the 2024 ESG issue library after a comprehensive evaluation,considering the Company’s overall business development in 2024 and best ESG management practices within the industry.ESG Issue Library Creation:
By focusing on trends in the textile industry and broader socio-economic developments, we engaged with key stakeholders during theReporting Period through communication and surveys to gather their opinions and suggestions.
Formulation and Implementation of Stakeholder Engagement Plan：
Internal and external stakeholders were invited to evaluate the materiality of various ESG issues, and a materiality matrix was developed.The Company conducted a survey, inviting stakeholders from di?erent categories to rate the materiality of Lu Thai’s 2024 ESG issues ona scale of one to ?ve, with higher scores indicating greater materiality. After the survey, the Company analyzed the feedback and assessedeach issue’s materiality based on two dimensions: "materiality to corporate development" and "materiality to stakeholders." Thisanalysis resulted in the ESG materiality matrix for the year. The survey covered a wide range of stakeholders, including board members,senior and mid-level management, employees, customers, investors, suppliers, and government regulators.
Quantitative Assessment of ESG Material Issues：
The materiality assessment report was submitted to the management for review and approval before the results were published.Review and Approval of the Materiality Assessment Report：
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | Products and Services | Production Operations | |||||
ESG Governance
| Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||
Lu Thai Textile 2024 ESG Materiality Analysis Matrix
Risk management
Compliance management
Compliance management system
Through this assessment, we identi?ed 22 material issues of stakeholder concern in 2024.
01 Climate Change Response02 Pollutant Emissions03 Waste Management04 Ecosystem and Biodiversity Protection05 Environmental Compliance Management06 Energy Utilization07 Water Resource Utilization08 Circular Economy
19 Anti-Bribery and Anti-Corruption20 Anti-Unfair Competition21 Stakeholder Engagement22 Due Diligence
09 Information Security and Privacy Protection10 Technology Ethics11 Innovation-Driven Development12 Product and Services13 Supply Chain Security14 Workplace Safety15 Chemical Safety16 Fair Treatment of SMEs17 Employees18 Social Contribution
Chapter 5Chapter 5Chapter 5Chapter 5Chapter 5Chapter 5Chapter 5Chapter 5
Chapter 2Chapter 2Chapter 2、3、4Chapter 4
Chapter 2Chapter 2Chapter 3Chapter 3Chapter 4Chapter 4Chapter 4Chapter 4Chapter 6Chapter 7
Environment (E)
Governance (G)
Society (S)CorrespondingChapter
Corresponding Chapter
CorrespondingChapter
E?ective risk management strengthens corporate operations. The Company, in accordance with the Code of Corporate Governance for ListedCompanies in China and other national laws, as well as its Articles of Association, identi?es internal and external risks and formulates responsemeasures. Risks are managed through a structured process, including information collection, risk assessment and analysis, strategy formulation,risk response, and monitoring and improvement. Additionally, the Company has established a "Three Lines of Defense" risk managementframework to enhance the rationality, standardization, and e?ectiveness of its risk management practices.
Adhering to operations with integrity, law-abiding principles, and compliance, Lu Thai Textile has always emphasized that integrity andlaw-abiding principles are the foundation of the Company, and always abode by the values of "integrity and win-win situation". Under thephilosophy of operations with integrity, the Company has continued to strengthen the compliance management system, improve compliancemanagement policies, optimize auditing procedures, and implement internal control in order to safeguard healthy and sustainabledevelopment.
Following the philosophy of operations with integrity, the Company has continued to improve the compliance management system,strengthened the e?ect of internal auditing, and established the Self-assessment Control Matrix based on the procedure documents in order todetermine the assessment scope and priorities. With all procedures assessed, the on-site testing has identi?ed de?ciencies, made suggestionsfor improvement, and timely produced the Internal Control Self-assessment Report to ensure e?ective internal control assessment.To promote normative and institutionalized business operations, the Company, considering its realities, has formulated the Regulations onInternal Auditing in accordance with the Internal Auditing Standards and the Basic Norms for Corporate Internal Control promulgated by theMinistry of Finance and the relevant laws and regulations. By doing so, it has e?ectively improved the overall management and risk preventioncapabilities.
Board Level
Third Line of Defense
Second Line of Defense
First Line of Defense
Audit Committee
Audit Department
Responsible for supervisory functions, conducting audits and investigations to implement a closed-looprisk management system. It analyzes and independently assesses whether the Company's risk managementmeasures are adequate and e?ective.
Risk Management Departments (e.g., Finance Management Department, Corporate ManagementDepartment)Design, implement, and oversee risk management practices based on the nature of risks and the Company'srisk tolerance to ensure the Company establishes a suitable and e?ective risk management system.
All departmentsFactories and functional departments are responsible for executing fundamental risk management processesand control measures, promptly identifying, managing, and controlling related risk control systems.
Responsible business conduct
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | Products and Services | Production Operations | |||||
ESG Governance
| Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||
Internal audit
Information disclosure
Anti-corruption and bribery
Code of conduct for employees
Complaint reporting mechanism
The Company values the implementation of internal control. Following its 18 guidelines for internal control, the Company tested and assessedthe system development and implementation of the internal control of the Head O?ce and holding subsidiaries. As a result, de?ciencies indesign and implementation were identi?ed and improved e?ectively. In 2024, the Company assessed the internal control of seven subsidiariesand issued the internal control assessment matrices, with internal control audit coverage of 80.45%.
The Company attaches great importance to business ethics and strictly complies with laws and regulations of countries where it operates, as wellas the industry recognized code of conduct. It has established a Code of Ethics Control Procedure, and it advocates honesty and trustworthiness,fair competition, anti-corruption, openness and transparency, and supervises the business behavior of partners, committed to creating anhonest, fair, clean, and harmonious operating environment.
The Company continues to strengthen employee behavior management by strictly requiring employees to act in accordance with laws, guidingand supervising employees to abide by rules and regulations, and operating in compliance. Through the promotion of corporate culture,publicity and education training of laws, inspection and supervision of employee behaviors and other measures, the Company urges employeesto raise awareness of ethical standards, and improve their own moral accomplishment, to ensure the implementation of integrity values andethical behavior, and thereby promote the healthy development of various business.
The Company actively improves its complaint and whistleblowing mechanism by providing multiple reporting channels, including mail,telephone, email, and in-person reports. Customers, employees, suppliers, business partners, and all individuals with business dealings with theGroup are encouraged to report corruption, fraud, violations of company policies, or any suspected illegal activities.We are committed to strictly protecting whistleblower privacy and prohibit the disclosure of personal information or report details to any thirdparty. Retaliation against whistleblowers is strictly prohibited.Reports will be investigated within 30 working days, and a written investigation report will be issued. Follow-up actions will continue to bemonitored. Employees found to have violated con?dentiality policies will face disciplinary action based on severity, including reassignment,
The Company strictly complies with anti-corruption and anti-bribery laws andregulations in its operating regions and has signed the Anti-Bribery CommitmentLetter. It continuously improves its anti-corruption supervision mechanism toensure compliant corporate operations.
Indicator (Unit)Internal control auditcoverage (%)
Targets
Senior leadersMiddle-level leadersand related functionsEmployeesShareholdersSuppliers
IndicatorsQuantity of non-conformance eventsQuantity of non-conformance eventsQuantity of non-conformance eventsExternal audit resultsQuantity of non-conformance events
2022
89.03%
2022
Standard unquali?ed audit
opinions
2023
Standard unquali?ed audit
opinions
2024
Standard unquali?ed audit
opinions
As at the end of 2024, the Company had been rated A for seven consecutive years in the information disclosureassessment on the listed companies on the Mainboard by the Shenzhen Stock Exchange.The Company releases its performance results as well as major and temporary announcements to investors of A- and B-shares via Internet media (cninfo.com) designated by the China Securities Regulatory Commission as well as SecuritiesTimes, Shanghai Securities News, China Securities Journal, and Ta Kung Pao.The Company responds in real time to investors' messages and questions via the "Interaction Easy" of the ShenzhenStock Exchange. In 2024, a total of 75 questions were replied, with a response rate of 100%.
2023
82.15%
2024
80.45%
The relevant department Oversees Internal Audit Activities
The Company has established and improved the information disclosure mechanism, whichreceived positive feedback from investors:
Business ethics
The Company conducts audits by relevant policies every year. In the ?rst halfof 2024, the Company conducted a special audit on the procurement of dyeingauxiliaries and the sales activities of the Global Marketing Department, GarmentMarketing Department, and Brand Promotion Department. The audit coveredsupplier selection, price inquiries and comparisons, bidding management, long-term inventory handling, sales processes, sales pricing, and accounts receivablecollection. In the second half of 2024, internal control evaluations of subsidiarieswere conducted, and no corruption or fraudulent activities were identi?ed.
Note: Internal control assessment coverage is the ratio of the total assetsof the assessed entities to the Company's consolidated total assets
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | Products and Services | Production Operations | |||||
ESG Governance
| Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||
Information security and privacy protectionInformation security
Privacy protection
We actively implement measures to enhance information security across ?ve dimensions: computer security, network security, data security,hardware security, and operational environment security. To minimize the risk of data breaches, we have deployed ?rewalls, intrusionprevention systems, vulnerability scanning systems, and bastion hosts as protective measures.
Computer SecurityThe Company deploys uni?ed antivirussoftware and endpoint security protectionsystems. By extracting data from the ?rewallintrusion prevention system, the Companydetects and eliminates threats such asmalicious attacks and Trojan viruses.
Network SecurityThe Company has been equippedwith security devices and measures,including ?rewalls, intrusionprevention systems, and internetbehavior management tools.
Data SecurityO?site and cross-location backups forbusiness data in the data center have beenimplemented. The operating system usesvirtual machine disaster recovery backups,and devices adopt active-active disasterrecovery across di?erent locations. Regularrecovery testing is conducted to ensure dataavailability, reliability, and recoverability.
Information Security Protection Measures
During the Reporting Period, the Group did not experience any data breaches or legal disputes related to information and data security involvingthe Group or its employees.
Conduct daily inspections, promptly report and follow up on identi?ed issues.An environmental monitoring system is in place to track the status of UPS powersupplies, indoor temperature and humidity, lighting, ?re safety equipment, andfresh air systems in real time. Develop and implement emergency response drillplans, proactively conduct drills, and promptly address issues identi?ed duringthe process.
The Company has established the Information System Operation Management Process,the Information Security Management Regulations, and the IT Infrastructure OperationManagement Process to enhance data security emergency response mechanismsand procedures. In the event of a suspected data breach, our IT operations team willimmediately verify the incident, assess the extent of the data breach and a?ectedsystems, report the situation to the leadership team, suspend relevant data access,notify a?ected users, and issue an announcement following legal and regulatoryrequirements.The IT operations team will assess a?ected systems, data, and devices, conduct logtracing for forensic analysis, and preserve relevant evidence. A?ected users will beinformed of the resolution, and the a?ected systems and devices will be restored.Security vulnerabilities identi?ed during the investigation will be addressed throughsystem upgrades and reinforcements to prevent future attacks.
The Company regularly provides employees with information security trainingand promotes cybersecurity awareness across the Group to continuouslyenhance employees' awareness of information security and privacy protection.
The Company and its a?liates are required to strictly comply with the Data Security Law of the People's Republic of China and the PersonalInformation Protection Law of the People's Republic of China. Con?dentiality agreements must be signed with stakeholders regarding sensitiveinformation. Unless required by laws and regulations or approved by the customer, such information will not be disclosed to any third party inany form.
Deploy a bastion host management systemto manage access permissions and codeapprovals for IT system administrators,while recording backend operations of ITpersonnel.
Server Security
The Company con?gures ?rewall security policies and installs server-sidesecurity protection systems.
Hardware Equipment
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | Products and Services | Production Operations | |||||
ESG Governance
| Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||
Products and ServicesBuilding First-Class Products and ServicesIn the face of the complex and ever-changing market situation, the Company leveraged thedriving force of marketing, and called on various departments to collaborate e?ciently with eachother, actively go global, deeply understand market changes, and get an insight into customerneeds. It focused on targeted research and development design, with "technology, fashion, andgreen" as the new industry positioning, and the goal of "becoming a global apparel solutionprovider with cutting-edge fabrics as the core", the Company continued to do a good job inproducts and services.
UN Sustainable Development Goals
Products and Services
Energy Conservation andEnvironmental ProtectionAbout the Company
| Chairman's Statement | About the Company | ESG Governance | Production Operations | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||||||||
R&D and innovation
Investment in technological innovation
Industry-university-research cooperation
Developing scienti?c and technological R&D platforms
Industry-Academia Collaboration
Donghua University
Wuhan Textile University
QingdaoUniversity
Adhering to the "Four-in-One" innovation philosophy which "lets the enterprise play the major role, adopts the customer-oriented approach, isunderpinned by research institutes and universities, and emphasizes the alliance with strategic customers and major suppliers", the Companyhas formed a three-level R&D innovation team led by Lu Thai Engineering Technological Institute, focusing on breaking through the professionalexpertise for production lines, and mainly comprising the quality control teams of the workshops and groups of the plants. By doing so, it hascontinuously enhanced the internal innovation mechanism, developed the scienti?c and technological innovation platforms, deepened theindustry-university-research cooperation, and laid a solid foundation for the Company's innovation cause.
The Company collaborates with many universities and scienti?c institutes, ranging from the training of basic talents and core technology R&D.Lu Thai has explored and established an all-round industry-university-research collaboration mechanism with many institutes. As at the endof 2024, the Company established a long-term partnership with universities such as Donghua University, Hong Kong Polytechnic University,Jiangnan University, Qingdao University, and Wuhan Textile University. Through R&D cooperation with leading institutes in new technologies,materials, and products, the Company has improved its R&D capability.
The Company has established the "National Collaborative Innovation Center ofKey Technologies for Textile Industry" with Donghua University for research ofnew ?ber material technologies and key technologies for eco-friendly dyeing and?nishing. In 2024, the project "Key Technologies and Industrialization of StructuralDesign and Preparation of Thermal and Moisture Comfort Functional Textiles,"jointly researched with Donghua University, was awarded the Second Prize of theScience and Technology Progress Award by the China National Textile and ApparelCouncil
In 2024, Lu Thai collaborated with Wuhan Textile University to apply forthe "High-E?ciency CNC Online Dyeing System Technology" project,which was awarded the First Prize of the Science and TechnologyProgress Award by the China National Textile and Apparel Council.In 2024, a "Framework Agreement on Technical R&D Cooperation forDomestic Lyocell Fiber Fabrics" was signed to conduct research on thedevelopment of domestic Lyocell.
The Company highlights the building and development of scienti?c and technological innovation platforms, establishing core technologyplatforms in the major phrases of research, design, and test to improve core technologies in the whole process.
With the help of technological platforms such as the national enterprise technical center,national demonstration base for talent introduction, national yarn-dyed fabric R&D base,Shandong Provincial Engineering Technology Research Center, and Shandong Big DataIndustry Innovation Center, Lu Thai Engineering Technological Institute has worked withproduction lines, for yarn-dyed fabric, knitted fabric, apparel, printing and dyeing, andfunctional fabric to conduct explorations. It has been dedicated to researching cutting-edgetechnologies. As a result, they have paved a path based on fabric but transcending traditionalfabric in scienti?c and technological innovation, quality improvement, brand promotion, low-carbon energy conservation, and corporate culture development.Lu Thai Engineering Technological Institute has capitalized on the design resources of thenational industrial design center, the Shandong Provincial industrial design center, an Italiandesigner's workshop for fabric design, and the enterprise brand design center to build atextile and apparel design platform. The platform has integrated textile and garment trendydesign, textile new material design, popular fabrics design and garment brand design, whichrepresents the major backbone of the enterprise's independent brand building and promotesthe Company to take leap from creation to creativity.
The Company signed a strategic collaboration agreement with Qingdao University in 2016 to carry out in-depthcooperation with the university in scienti?c research, talent cultivation, and social services, thereby contributing tosocioeconomic and technological development.In terms of scienti?c research, Qingdao University and the Company have jointly established the "Lu Thai Group--Qingdao University Research Center" and the "National Collaborative Innovation Center of Key Technologies forTextile Industry" to be dedicated to the research of industrial textile and marine biomass ?ber.In terms of talent cultivation, the Company has set up the "Lu Thai Scholarship" in the university and the "Lu ThaiInternational Talent Reserve Class". As a result, a number of brilliant students from textile universities have beenattracted to Lu Thai and become the backbone of the Company.Lu Thai owns a complete set of testing devices and equipment for textile materials, fabrics, andgarments, as well as dyeing and ?nishing auxiliaries. It is equipped with laboratories that meetinternational standards, including the constant temperature and humidity laboratory, textilematerial testing laboratory, fabric and garment laboratory, and chemical analysis and synthesislaboratory. Also, it has an experienced professional testing team that is familiar with domesticand overseas standards. As a result, Lu Thai has made every e?ort to establish an integratedtesting and inspection platform in the textile and apparel industry at home and abroad.
In 2024, the Company's total investment inscienti?c and technological research anddevelopment reached RMB207Millon. By theend of 2024, the Company had undertaken eightnational-level scienti?c research and innovationplatforms and ?ve provincial-level platforms. Ithad received a total of 60 national and provincial-level Science and Technology Progress Awards,including one national ?rst prize for scienceand technology progress, and three nationalsecond prizes for science and technologyprogress. The Company undertook 20 scienceand technology projects at the provincial level orabove and obtained 548 authorized patents andeight software copyrights. Additionally, it led orparticipated in the formulation of 75 nationaland industry standards.
Science andTechnology Awards
Provincial-level and aboveawards: 60 itemsOne National First Prize forScience and Technology ProgressThree National Second Prizes forScience and Technology Progress9 Provincial and Ministerial FirstPrizes for Science and TechnologyProgress
Science and Technology Programs
Undertaken provincial-level andabove science and technologyprograms: 20 itemsPatents and StandardsAuthorized patents held:
itemsled or participated in the formulation:
items
Textile garmentresearch platform
Textile garmentdesign platform
Textile garment testing andexperimental platforms
Exchange on Industry-Academia-ResearchCollaboration Project between WuhanTextile University and Lu Thai Textile Co.,Ltd.
Exchange on Industry-Academia-ResearchCollaboration Project between the College ofTextiles and Clothing, Donghua University, andLu Thai Textile Co., Ltd.
Products and Services
Energy Conservation andEnvironmental ProtectionAbout the Company
| Chairman's Statement | About the Company | ESG Governance | Production Operations | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||||||||
ShandongUniversity ofTechnology
Tiangong
UniversityShandong
VocationalCollege of
Science and
Technology
The Company has cooperated with the Shandong University of Technology in establishing the Lu Thai School ofTextile and Apparel, thereby promoting organic industry-education integration, collaborative innovation, andintegrated industrial-educational development.The Company has also worked together with the university to establish laboratories and share research apparatusand platforms, achieving research integration in terms of the scienti?c program development and projectapplication.A team of part-time teachers, including Taishan Scholars, senior experts of the Company, and excellenttechnological talent, has been built to achieve the integration of teaching resources of the university and theCompany.The Company has utilized the comprehensive strengths of both sides to introduce more practice and internshipopportunities for students. It donates RMB1 million to the university for collaborative talent cultivation every year.Meanwhile, the "Lu Thai Scholarship" has been set up to encourage students to work hard, achieving "joint talentcultivation" between the university and the Company.In 2022, Lu Thai collaborated with Tiangong University to apply for the "Virtual Human Body Modeling System forClothing," which won the Excellence Award in the First Intelligent Manufacturing Innovation Competition.In 2022, the Company engaged in strategic discussions with Shandong Vocational College of Science andTechnology and signed a strategic cooperation agreement to jointly establish an overseas "Luban Workshop" forthe joint cultivation of international talents.
The Company, in collaboration with Wuhan TextileUniversity and other relevant institutions, has conductedjoint research on this technology, which utilizes a CNC-integrated system for textile dyeing control. It is widelyapplied in the dyeing of yarn-dyed fabrics, printing anddyeing, and knitted textiles. This technology eliminatesthe traditional reliance on temperature and salt indyeing processes, addressing the industry's challengeof high-salinity wastewater generated by conventionalreactive dyeing. It actively promotes and serves as amodel for the green and high-quality development of thetextile industry, advancing textile products toward themid-to-high end of the global value chain. Furthermore,it signi?cantly contributes to achieving China's goals ofbecoming a manufacturing and quality powerhouse.
Lu Thai Textile has maintained an open attitude toward technological R&D and kept strengthening the industry-university-research cooperation.It has developed green and low-carbon technologies both independently and through cooperation and has continuously optimized theCompany's clean production mode. As a result, the Company's green and sustainable development has been constantly boosted. Over the years,the Company has obtained more than 500 patents, including 27 projects that have received national and provincial-level awards for scienti?cand technological progress in energy conservation.
The development of the Company for 37 years has always relied on good product development and realization capabilities, and in the future,it still needs to rely on products to win the market. Currently, customers are increasingly interested in the green and environmentally-friendlyproducts with di?erentiated attributes and high performance. The Company adapts to the development trend of the textile industry, focus oncustomer needs, and do a good job in technological innovation and upgrades. It continuously carries out product research and developmentand product upgrades to provide customers with products that meet their needs and are cost-e?ective.Raw material innovation: Sustainable exploration, development and cooperation in terms of raw materials; the renewable, degradable,recyclable, and sustainable product series that are featured by the natural ?ber and regenerated cellulose ?ber series and the bio-based series.Technological innovation: In-depth research into crafts and technologies, and the full-process processing for green production that is water-saving, energy-saving, and low-emission; active e?orts to keep improving green and environmentally-friendly technology to e?ectively supportand continuously upgrade products.Product innovation: Continuous exploration of innovative full-life-cycle application solutions for textile products, and continuous introductionof new and environmentally-friendly product series that are skin-friendly and comfortable, elastic, easy-to-manage, and good for health to themarket by continuous updating multicomponent products, such as natural ?ber, regenerated cellulose ?ber, and ultra soft texture ?ber.
In 2024, the Company launched 25 company-level technological research projects and 137 department-level research topics. The company-level projects primarily focused on overcoming technical bottlenecks and conducting research on forward-looking technology reserves. Amongthem, the research project on knitted fabric dyeing technology achieved a production order volume of 5,488,000 million meters, with a ?rst-class delivery rate of 97.2%, showing a signi?cant increase compared to the previous year.
The Company, in collaboration with Donghua University and other relevant institutions, has jointly conducted research on thisproject, which explores the multi-layered structure, morphological design, and functional regulation of thermal and moisturecomfort ?bers, as well as the mechanisms and evaluation systems for assessing textile products' thermal and moisture comfortproperties. The research focuses on ?ber composition design and preparation technologies, functional textile design, and keytechnologies such as multi-component composite spinning, composite structural weaving, one-bath dyeing for multi-?ber blends,and moisture absorption and wicking functional ?nishing. This project provides valuable references and demonstrations for thepreparation and application of high-quality thermal and moisture comfort functional ?bers.
The Company attaches great importance to the protection of intellectual property rights,constantly improves the protection system of intellectual property rights, sets up teams forthe protection of intellectual property rights and patents. Moreover, it formulates trademarkmanagement standards, patent application management procedures, stands against theinfringement of trademark rights, patent rights, and copyrights, and continues to improve theholistic operation e?ciency in protecting intellectual property rights. In 2024, the Companyapplied for three government projects at the national, provincial, and ministerial levels,developed 137 new products and new processes, conducted 25 technological improvementprojects, obtained 17 authorized patents and one software copyright, and led or participated inthe formulation of four industry standards.
Key R&D projects
Product innovation
"High-E?ciency CNC Online DyeingSystem Technology" Project
Intellectual propertyrights protection
"Key Technologies and Industrialization of Structural Design and Preparation of Thermal andMoisture Comfort Functional Textiles" Project
Technological research and development
Products and Services
Energy Conservation andEnvironmental ProtectionAbout the Company
| Chairman's Statement | About the Company | ESG Governance | Production Operations | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||||||||
Lu Thai Xurou – Ultimate Softness, Soft but Structured, Smooth but Not Slippery
Case
Case
Case
Case
Ocean Yarn Fabric
Bio-Based Nylon 56 Fabric
Recycled Cotton Fabric
By selecting premium raw materials and integrating Lu Thai’s innovative patentedspinning technology with high-precision weaving craftsmanship and proprietarydyeing and ?nishing techniques, the Lu Thai Xurou product was developed.It features a soft and smooth texture, skin-friendly breathability, and a weightless,pressure-free wearing experience. The combination of natural materials and cold-resistant, thermal insulation functions provides an unrestricted and comfortable ?t.
This regenerated polyester ?ber product is made from 100% recycled materials,sourced from plastic bottles collected within 50 kilometers of coastlines or washedashore by ocean waves. Globally, its production has repurposed 900 million discardedplastic bottles, making it one of the most certi?ed and traceable regenerated ?bers inthe world.Comfortable Cotton Feel: The interwoven structure of ?ne cotton and OceanYarn imparts a soft cotton-like touch with an elegant sheen. It also boasts highelasticity, excellent shape recovery, wrinkle resistance, easy care, quick drying, andbreathability.
Nylon 56 is a novel nylon material synthesized from bio-basedpentamethylenediamine and adipic acid. Compared to traditional petroleum-basednylon, it o?ers a lower carbon footprint and superior environmental friendliness.As the concept of sustainable development continues to gain traction, Nylon 56, asa bio-based and biodegradable material, is expected to play a key role in green andeco-friendly products.
The Company adheres to the principle of "quality is the most important element of enterprise survival and development", and continuouslystrengthens quality control with the purpose of "meeting the needs of customers and the market". In accordance with GB/T 19001-2016 QualityManagement Systems, the Company’s Quality Management Department formulates quality indicators, translating customer feedback intoquality requirements to precisely control both process quality and result conformity. The quality management assessment mechanism has beenre?ned to incentivize improvements in product quality across workshops.
□Re-dyeing rate, elasticity, styling process, yarn color, linear density, strength
□The Company holds production meetings every day to address any problems encountered during production.
□The Company strengthens the process compliance inspection on each process, and supervises and manages it through sampling and tracking
methods.
□The Company actively communicates with customers and absorbs their valuable feedback on product quality.
□The Company organizes professional training for quality management personnel to continuously improve the quality awareness and ability
of all sta?.
□The Company has a CNAS laboratory certi?ed by the state, achieving independent testing of some indicators.
□The Company sends 100% of textiles to professional organizations (e.g. ITS, SGS, BV, Keken) for a safety inspection to make certain that these
textiles are in line with market laws and regulations, standards and customers' RSL requirements.
Laboratory
Personnel Training
Recycled cotton fabric is designed to reduce environmental pollution by reclaimingand repurposing discarded textiles. Lu Thai has been actively promoting resourcecircularity and is committed to sustainable development. Through technologicalinnovation, we strive to create a brighter future for sustainable fashion. With over30 years of expertise, Lu Thai has leveraged its full-industry-chain technologicalinnovations to develop recycled cotton fabric, paying sincere tribute to sustainabilityand the future.
Quality control
Qualityassurance
StandardSystem
Process controlroom
Central laboratory
Product pre-control room
Raw materialpreparation and
control room
Standard System forPhysical IndicatorsGB, JIS, AATCC/ASTM,ISO, Alignment betweenLu Thai’s internalcontrol and actual data
Standard System forAppearance InspectionDefective fabric, batchcolor variation of ?nishedproducts, gradingevaluation, responsibility
determinationStandard System forProcess InspectionRe-dyeing rate, elasticity,styling process, yarn color,linear density, strength
Standard System for RawYarn InspectionColor di?erence, handfeel, elasticity, uniformity,strength, alignment withfabric indicators
ESG Report 2024 Lu Thai Textile Co., Ltd
Products and Services
Energy Conservation andEnvironmental ProtectionAbout the Company
| Chairman's Statement | About the Company | ESG Governance | Production Operations | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||||||||
Products and Services
Energy Conservation andEnvironmental ProtectionAbout the Company
| Chairman's Statement | About the Company | ESG Governance | Production Operations | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||||||||
In 2024, Lu Thai Textile achieved a 99.99% Grade A storagerate for spun yarn, a 99.30% acceptance rate for yarn-dyedproducts, a 97.47% ?rst-grade storage rate for knittedproducts, a 97.95% delivery rate for piece-dyed ?nishedproducts, a 95.90% delivery rate for functional fabric?nished products, and a 99.99% delivery rate for garments.
Participated in eightfabric exhibitions:
seven overseas and onedomestic exhibitions.Jointly exhibited withapparel business in 4 ofthem.Tracking of potential fabric customers from exhibitions:
Participated in sevenapparel exhibitions: fouroverseas and three domesticexhibitions.
The Company adheres to a customer-centric approach and comprehensively enhances its customer service capabilities.
The Company communicates with customers through multiple media, such as email, WeChat, and phone, to learn customers'demands and suggestions.The Company formulates the standard procedure for handling customer complaints in time, so as to protect the legal rights andinterests of customers.The Company convenes video conferences with customers to discuss technical issues and problems of quality.The Company regularly visits customers to maintain a good relationship. In 2024, the Company conducted 435 customer visits.The Company invites customers to visit or participate in new product releases or important events to enhance customerrelationships. In 2024, the Company hosted 478 customer visits.The Company regularly organizes exhibitions and product promotion events to help customers gain a better understanding ofits high-quality products and services.
No.
Exhibition NameLondon Textile fairMAGIC SHOWTEXWORLD/APPEXPO ProducciónChina Shandong Export Commodities Fair (Osaka, Japan)Functional Textiles Shanghai by Performance Days
SaigonTex2024 Canton Fair (Spring)
ITFInternational Sourcing Expo Australia
Premiere VisionIntertextile Shanghai Apparel Fabrics (Hotel)
ATSCPreview In SEOULTextile salonLondon Textile fairFunctional Textiles Shanghai by Performance Days
FASHION WORLD TOKYO2024 Canton Fair (Autumn)
Number of PotentialCustomers
Production Lines
YarnYarn-dyed fabrics
Knitted fabricsPiece-dyed fabricsFunctional fabricsReady-to-wear clothing
Pass Rate
99.99%
99.30%
97.47%
97.95%
95.90%
99.99%
Customer services and maintenance
Constant care
Fabric ExhibitionsApparel Exhibitions
ESG Report 2024 Lu Thai Textile Co., Ltd
Products and Services
Energy Conservation andEnvironmental ProtectionAbout the Company
| Chairman's Statement | About the Company | ESG Governance | Production Operations | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||||||||
DateJanuary 9-10, 2024February 13-15, 2024
February 5-7, 2024March 20-22, 2024March 6-8, 2024
April 2-3, 2024April 10-13, 2024
May 1-4, 2024May 20-22, 2024June 12-14, 2024
July 2-4, 2024August 27-29, 2024August 26-28, 2024August 21-23, 2024
February 2024September 3-4, 2024October 9-10, 2024October 15-17, 2024
October 31, 2024Total
Products and Services
Energy Conservation andEnvironmental ProtectionAbout the Company
| Chairman's Statement | About the Company | ESG Governance | Production Operations | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||||||||
Tracking of potential fabric customers from exhibitions:
No
Exhibition NameMAGIC SHOWTEXWORLD/APP
SaigonTex2024 Canton Fair (Spring)LINK-TCE Clothing Customization Expo – Shanghai
ITFPremiere VisionATSCPreview In SEOULFASHION WORLD TOKYO
DateFebruary 13-15, 2024February 5-7, 2024
April 10-13, 2024May 1-4, 2024May 8-10, 2024May 20-22, 2024July 2-4, 2024August 26-28, 2024August 21-23, 2024October 15-17, 2024
Total
Lu Thai Textile continuously improves and optimizes its customer satisfaction survey every year, including survey methods, questionnairedesign, and enhancing the authenticity, rigor, and objectivity of the survey. Based on the survey results, a satisfaction report is generated toanalyze the Company's strengths and weaknesses, allowing for targeted improvements to better meet customer expectations.This year, the Company received guidance from satisfaction experts and further re?ned and upgraded the questionnaire. It now covers eightdimensions: corporate brand image, product quality, R&D, design, price, delivery, service capability, and customer relationships, with a total of25 rating items. A ten-point scale is used for scoring.
This year, a total of 241 customers were surveyed for fabric products, with 215 valid responses, achieving a response rate of 89% and a ?nal scoreof 82.79. For apparel products, 108 customers were surveyed, with 77 valid responses, achieving a response rate of 71% and a ?nal score of 80.1.
Customer satisfaction in customer relationship management and corporate brand image was relatively high.
Customer satisfaction in customer relationship management, corporate brand image, and service was relatively high.
Pre-sales consultation and information acquisition
Delivery processProduct performance
Price
R&D and designAfter-sales serviceCustomer relationships
Qx
QiQm
Qc
Qz
Lu Thai Satisfaction Model –
Basic Model
Fabric business
Apparel business
Average Customer Satisfaction Scores for Each Business Segment
Average Customer Satisfaction Scores for Each Business SegmentSatisfactionLoyalty
Corporate brand imageProductsR&DDesignPriceDeliveryServiceCustomer relationships
Customer relationsCorporate brand imageServiceProduct qualityDeliveryDesignR&DPricing
86.84
90.3
86.36
82.6
82.42
82.5
81.02
81.8
65.77
81.6
83.64
77.2
85.31
76.4
90.95
69.4
Customer satisfaction survey and improvements
ESG Report 2024 Lu Thai Textile Co., Ltd
Products and Services
Energy Conservation andEnvironmental ProtectionAbout the Company
| Chairman's Statement | About the Company | ESG Governance | Production Operations | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||||||||
Number of PotentialCustomers
Production Operations/Responsible ProductionOperations
In line with the principles of being responsible to customers, employees, and society, Lu Thaiimplements the philosophy of "responsible production and operations", improves safety productionmechanisms, enhances chemical safety management, and regulates supplier behaviors with highstandards. The Company is committed to providing customers with reliable products and employeeswith a safe workplace, minimizing social impact during sound operations, safeguarding the rights andinterests of stakeholders in multiple aspects, and achieving the long-term stable development of theCompany.UN Sustainable Development Goals
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | Products and Services | |||
Production Operations
| ESG Governance | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | |||||
Production safety, involving employees' life safety, is the key to the survival and development of the enterprise. Its responsibilities are weightierthan Mount Tai. Luthai insists on the principle of "safety ?rst, prevention ?rst and comprehensive management", and implements national, localand industrial policies, laws and regulations and standards on safety work. The Company consciously carries out all rules and regulations ofproduction safety and supervises the implementation.
The Company has implemented that the safety facilities in construction must be designed, constructed, approved and put into production anduse at the same time as the main project to control and prevent safety accidents from the source.The Company continues to improve the dual prevention system for hierarchical control of production safety risk and investigation andgovernance of hazards, and persists in risk prevention and early identi?cation. In terms of hierarchical risk control, the Company identi?es therisk hazards in operating activities and equipment and facilities in each sector every year, classi?es the types and consequences of possibleincidents, and determines the hierarchy of control and the corresponding accountable person according to the category. In 2024, the Companyidenti?ed a total of 291 risk hazards in various production and operating activities. For each risk hazard, the Company has formulated speci?crisk control measures to prevent and control risks by ways such as standard specification, safety training, distribution of supplies for laborconservation and protection, on-site supervision and inspection, emergency response drills, and timely handling of incidents.In terms of risk hazard inspections, the Company's Safety Inspection O?ce carried out various inspections in 2024, including special inspectionsfor dust explosion-proof, diagnosis by invited safety experts, intrinsic safety of equipment, confined space, hazardous chemicals, specialinspections of warehouses, general inspections during the holidays, and departmental self-inspections and self-corrections, which identi?edmore than 23,000 safety hazards. During the Reporting Period, all risk hazards were eliminated.
Production safety management
Safety management system and institutional development
The Company has continuously
improved safety productionstandardization templates,conducted internal safetystandardization reviews for variousdepartments, and supervised andinspected the implementation ofsafety standards in various plants.
The Company has set up a Safety
Production Committee and anAccident Emergency Rescue LeadingGroup around the Safety InspectionO?ce, with a total number of 68 safetymanagement personnel.
The Company has established thesafety production targets management
responsibility system and signed
the Responsibility Letter for Safety
Production Targets Management atall levels. Besides, the Company has
broken down the accident controltargets by levels and implemented strictassessments of personnel at all levelsto ensure the ful?llment of the safety
production control targets.Eradicate ?re risks and personal casualties
Prevent the accidents of major environmentsand occupational health and safetyEliminate grand electromechanical
equipment accidents
Avoid tra?c accident
The Company'sSafety ControlTargets in 2024
In terms of safety training, the Company carried out the training of the ?rst lesson after the Spring Festival, Qingming Festival, Mid-AutumnFestival and National Day, and organized a series of special training in 2024, such as 27 training sessions for new employees, 77 safety trainingsessions for all employees, 14 training sessions for special operators, two training sessions from invited external experts, special equipmenttraining, and certified safety engineer training. Moreover, the Company has implemented the government's special action requirements on"deep learning, deep training, wide examination" for safety production, and achieved the normalization of safety training and learning. Inaddition, the Company has conducted "Safety Production Month" activities with the theme of "everyone values safety and knows how tohandle emergencies, and ensures smooth life channels", aiming to prevent and defuse major risks, eliminate potential safety hazards in a timelymanner and e?ectively curb production safety incidents, and ?nally create a sound environment for safety production. In the whole year of 2024,the Company conducted more than 100 various safety training sessions with over 13,000 trainees.
The Company is conducting an on-site safety hazard inspection
Various types of training
First lesson on resumption of work
Company-wide safety training, safety morning meetings
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | Products and Services | |||
Production Operations
| ESG Governance | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | |||||
Diversi?ed “Safety Production Month” activities
Safety production emergency management
During the "Safety Production Month" campaign in June 2024, the Company conducted a variety of activities such as publicity board design,special training on safety production, inspections on potential safety hazards, award-winning essay contests, safety promotion short videos, andemergency response drills. All employees actively participated in these activities, and their safety awareness was e?ectively improved.The Company organized various departments to carry out publicity board design activities with the theme of "everyone values safety andknows how to handle emergencies", and created a total of 58 boards.
A total of 320 teams from various departments and subsidiaries participated in the "Inspection, Prevention, and Promotion" safety hazardinvestigation activity, with 7,260 participants. A total of 4,185 hazards were identi?ed, and 68 outstanding teams were selected.
The Company conducted the "Safety Production Douyin Contest", collecting 70 entries and awarding two ?rst prizes, three second prizes,and ?ve third prizes. Two of these entries were selected for the "Taizhan Cup" Douyin Contest organized by the Zichuan District EmergencyManagement Bureau.The Company organized the "Emergency Drill Competition", with 15 teams participating. After evaluation by experts from the ZichuanDistrict Emergency Management Bureau and safety inspection personnel, two ?rst prizes, three second prizes, and ?ve third prizes wereawarded.
The Company has established a sound production safety emergency management system and actively carried out emergency response drills tocomprehensively improve its capacity for emergency response and accident rescue. For example, it has formulated several response plans suchas the Regulations on Emergency Preparedness and Response Management, the Emergency Preparedness and Response for Fire Accidents, theEmergency Preparedness and Response for Hazardous Chemicals Leakage Accidents and the Emergency Preparedness and Response for NaturalGas Leakage Accidents. In 2024, the Company organized each plant to conduct emergency response drills, including 30 special response drillsand 266 on-site disposal drills, and carried out a total of 15 "Emergency Rehearsal Training" in the "Safety Production Month" activities. Throughvarious emergency drills, the Company has enhanced the emergency response capabilities of all departments, improving self-rescue and mutualaid abilities to safeguard lives and property.
The Company is conducting an emergency drill
Video Monitoring
Smart Fire?ghting
Wireless Intercom
AI Engine
Fire safety managementAs a key unit of fire safety, the Company implements the working policy of "prevention first with a combination of fire prevention and?re?ghting", standardizes ?re safety management procedures, strictly implements ?re safety management regulations to e?ectively prevent ?reaccidents and guarantee the implementation of emergency rescue. In addition, these measures minimize property damage and personnel injurycaused by ?re occurrence and ?re rescuing.The Company's Security Department conducts targeted annual training sessions on ?re safety knowledge, ?re extinguishing and evacuationdrills, training for key and critical areas, and hands-on training for volunteer ?re?ghters on ?re?ghting equipment. These initiatives aim to raiseoverall ?re safety awareness and enhance emergency response capabilities. Each department strictly adheres to the Hot Work ManagementSystem, the Fire Inspection System, and the Electrical Safety Management System to establish a solid ?re safety ?rewall.Luthai, in collaboration with China Mobile, has developed a 5G Smart Shared Management Platform integrating security and firefightingfunctions. Through various intelligent features such as AI Engine, Security Monitoring, Park Access Control, Smart Fire?ghting, and WirelessIntercom, the platform creates an information-sharing and intelligent management system for security and fire protection. This enhancesthree-dimensional safety management, intelligent emergency support, and coordinated emergency response, improving the e?ciency of theCompany's ?re safety and security management.
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | Products and Services | |||
Production Operations
| ESG Governance | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | |||||
For precursor chemicals and explosive chemicals, the Company strictly complies with national regulations andreports to the public security authorities in a timely manner. The Company establishes a chemical ?ow ledger andstrictly controls the use to prevent the out?ow and illegal use of such chemicals.Chemical suppliers must possess a business license, production permit, hazardous chemicals registrationcerti?cate, and other necessary quali?cations before approval, and must sign the Environmental ComplianceDeclaration.When each chemical is ?rst purchased in the year, a complete MSDS list should be requested from the supplier andhung at the chemical usage and storage site.
Each user department must store chemicals in appropriate quantities according to their properties, establish andimprove hazardous chemicals safety management systems and emergency response plans, and assign dedicatedpersonnel for hazardous chemical management with clearly de?ned responsibilities.
Factories using chemical products must conduct at least one chemical training session per year to educateemployees on the properties and hazards of the chemicals used, as well as emergency handling and self-rescueprocedures in case of spills or contact with eyes or skin. Employees are also trained on proper storage and usage.
Chemical administrators must obtain professional certi?cations through regular external training.
Visible ?re monitoring
Fire extinguishing and evacuation drills
Fire safety hazard inspection
Test on automatic sprinklers system
Employee training on critical partsprotection
Major ?re safety incident
13332.19hours
sessions
2708items11951 points
2388 trainees
times
Fire safety training
Volunteer ?re?ghter training
The Company organizes "119 Fire Safety Publicity Month" activities
Fire?ghting and evacuation drill
Chemical management
Procurement, storage, and usage management
Restricted substances control
The Company controls the whole process of procurement, transportation, storage, use and disposal of chemicals, especially for the purchaseand use of hazardous chemicals. Moreover, the Company has formulated management systems and regulations such as the Safety ManagementSystem for Hazardous Chemicals, the Regulations on the Supervision and Inspection of Hazardous Chemicals, the Safety Management Systemfor the Storage, Handling and Use of Liquid Ammonia, and the Regulations on the Supervision and Inspection of Major Hazard Installations ofLiquid Ammonia, prompting each operation to be standardized, detailed and normalized.
As the international awareness of environmental protection and product safety grows, the demand for green production and environment-friendly products has become a major trend. Luthai, an international manufacturing enterprise, naturally does not hesitate to keep up with thetimes and has established a whole process chemical control mechanism.
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | Products and Services | |||
Production Operations
| ESG Governance | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | |||||
Source control:
Production process control:
Terminal management:
In accordance with the requirements of laws and regulations, standards,instructions, and customers' restricted substances list ("RSL") of eachnation and region, the Company has established a chemical approvalsystem and the Manufacturing Restricted Substances List ("MRSL") which isstricter than market regulations/standards. When chemicals for productionpass the experiment test, the Company will entrust the third-party testingorganization to conduct the test on toxic and harmful chemicals. Onlysuppliers with test results in conformity with the MRSL are included inthe list of qualified suppliers and can then be used for bulk purchase.Meanwhile, the Company strengthens the application of efficient andenvironment-friendly dyeing auxiliary to eliminate the production of toxicand harmful chemicals from the source.
The Company places great importance on the transparency of chemical information and data. It annually discloses Pollutant Release andTransfer Register (PRTR) data on the ZDHC Gateway and the Institute of Public & Environmental Affairs (IPE). Additionally, twice a year, theCompany publishes wastewater DETOX emission data. At the same time, the Company communicates and interacts with suppliers, customers,third-party testing organizations, non-governmental organizations and other relevant parties to achieve sustainable improvement of chemicalsmanagement.
Training is provided to all factories to ensure familiarity with the chemicalsin use. For orders with specific customer requirements, only compliantproducts are used in strict accordance with customer speci?cations, suchas ZDHC Conformity Level 1 or higher dyeing auxiliaries.Each batch of finished products shall be sent to a professional third-party testing institution for restricted substances safety testing. Only afterpassing the test and receiving a certi?cate of compliance from the QualityManagement Department can the products be packed and shipped.
Besides, the Company tests the discharged wastewater and sludge for toxicand harmful chemicals according to the wastewater guidelines of ZeroDischarge of Hazardous Chemicals ("ZDHC") twice a year to ensure zerodischarge of toxic and harmful chemicals.
Chemical Testing
Product Safety Testing
Wastewater and Sludge Testing Report
Data Releasing Platform
Inputmanagement
Productionprocess
Output-endmanagement
Through a new generation of integrated and collaborative platform (ERP system) based on Internet services and technical architecture, theCompany has realized the information flow in the whole process from supplier access to purchase warehousing. This has ensured theinformation ?ow in all processes of the supply chain, improved the e?ciency of raw material supply, and made the purchase processmore standardized and transparent.
When selecting suppliers, the candidates are required to possess relevant product qualification certification and have manufactured sameor similar products for at least one year with a certain production scale. Priority will be given to suppliers who have obtained authoritativecerti?cations such as the ISO 9001 Quality Management System Certi?cation, the ISO14001 Environmental Management System Certi?cation,the ISO45001 Occupational Health and Safety Management System Certification, the SA8000 Social Responsibility Management SystemCerti?cation, and the Green Factory Certi?cation.Before approval, on-site audits are conducted for suppliers to assess whether their production, quality control processes, and socialresponsibility performance comply with relevant certi?cation standards. Only after product use and testing meet requirements can they be listedas approved suppliers. Prior to procurement and usage, suppliers are required to sign documents such as the Quality Agreement, the SupplierCode of Conduct, and the Environmental Compliance Declaration to protect the Company’s legal rights and interests.
Management of chemical suppliers
Management of procurement, storage,use and other aspects of chemicals
Creation of a testing data list
Understand relevant laws andregulations and documents
Process testing andvalidation
Ways to identify harmfulchemicals
Participation in greenactivities
Create a list of concerns onharmful substance
Green technology
Ways to identify harmfulchemicals
Selection of new suppliersDaily evaluation of suppliersOn-site audit of suppliersApproval/removal of quali?ed suppliers· Supplier Quality and Safety AssuranceAgreement· Declaration of EnvironmentalConformity of Chemicals· Declaration of EnvironmentalConformity for Raw Materials andAuxiliariesSafety Management Process of TextileChemicalsProvisions for the Management ofDepartmental ChemicalsProvisions for the Management ofProcurement of Sizing Agents, Dyestu?sand AuxiliariesProvisions for the Managementof Safety Control for WarehouseManagement DepartmentBrand customersChemicalsWater qualitySludgeProducts
GovernmentNon-governmentalorganizationsCustomers and brands
Tap waterDyeing drainageWarp sizing drainageOrganization of drainage
Information disclosurethrough IPE
Luthai reduces the level of pollutants throughe?cient chemicals management and goodprocess control. Meanwhile, the Companyworks together with relevant parties such asmajor brands in the supply chain, suppliers,chemical industry and non-governmentalorganizations to reduce the impacts on theenvironment.
ChemicalsTextilesWastewaterSludge
Substitution of dyeingauxiliaryReduction of dyeing auxiliaryEmission reductionShort process...
Compliance screening of MaterialSafety Data Sheet ("MSDS")Initial identi?cation of harmfulchemicals according to the type ofauxiliariesThird-party testingAnalysis and tracking of testing data
Compliance screening of MaterialSafety Data Sheet ("MSDS")Initial identi?cation of harmfulchemicals according to the type ofauxiliariesThird-party testingAnalysis and tracking of testingdata
Supply chain management
Supplier management
Supplier onboarding
Luthai Textile Chemical Management
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | Products and Services | |||
Production Operations
| ESG Governance | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | |||||
Quality AgreementEnvironmental Compliance DeclarationThe Company collaborates with suppliers of raw materials, auxiliary materials, and food ingredients of varying scales—from large tosmall—on the basis of equality and mutual bene?t.
In daily management, the Company conducts annual surveys on supplier profiles and performs periodic supervision and audits tomaintain real-time oversight of their quality and CSR management.
In 2024, a total of 58 suppliers were audited, of which 57 passed and one failed. The annual supplier audit plan was fully completed.For issues identi?ed during the audits, we supervise suppliers to carry out corrective actions following the process below and continue tomonitor progress.
Routine supplier management
Supplier Audit Dimensions
HumanPersonnEquipment
ProductionQuality
EHSMaterial
Insurance
Supplier Audit ReportThe Company also conducts semi-annual and annual supplier assessments according to di?erent raw material suppliers, and classi?essuppliers based on the assessment results.
Audit De?ciency Analysis
Formulating a Corrective
Action Plan
Reviewing and Evaluating
Corrective Results s
Implementing CorrectiveMeasures
Summarizing and SharingCorrective Action Experiences
Suppliers conduct a comprehensive analysis of de?ciencies identi?ed during the audit to determinethe root causes and develop targeted corrective actions.Based on the audit de?ciency analysis, suppliers develop a detailed corrective action plan, includingcorrective measures, responsible departments and personnel, and a deadline for completion.
Suppliers conduct regular reviews to ensure corrective measures are continuously and e?ectivelyimplemented, and that audit de?ciencies are fully resolved.
Suppliers implement corrective actions step by step according to the audit plan.
Suppliers summarize the lessons learned during the corrective process and voluntarily share them.
ResultApplication
Tier I Supplier (90 points and
above)
Appropriately increase purchase volumeNormal cooperationSend Information Notice, rectify within
deadlineSuspend supply, send Information Notice, rectifywithin deadline, and disqualify if requirements
are not met
Tier II Supplier (75–90 points)Tier III Supplier (65–75 points)Tier IV Supplier (below 65 points)
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | Products and Services | |||
Production Operations
| ESG Governance | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | |||||
Categorized Evaluation
Supply Chain Quality Improvement
Develop and implement a supplier audit plan to emphasize our speci?c requirements for suppliersin various aspects through audits. Require suppliers to promptly rectify issues identified duringaudits. Audit results serve as key factors in the supplier’s annual comprehensive assessment anddirectly impact the allocation of procurement shares for the following year.
Share the latest management concepts and best practices with suppliers, gather their feedback andsuggestions, and collaborate on addressing quality issues.
Communicate Luthai’s quality philosophy and requirements, provide technical guidance andtraining to help suppliers enhance their quality management, and encourage them to obtainrelevant system certi?cations.
Collaborate with suppliers on innovative product development to achieve mutual bene?ts.
At the beginning of the year, the Company providedsystematic training on in-factory transportationand operational safety for its partnered logisticscompanies.
Case
Raw Material Inspection Report
Procurement management
Warehouse management
In terms of procurement, whether to invite bids is determined based ondifferent materials and the annual procurement amount. If bidding isrequired, the Bidding Office will conduct publication and assessment toselect winning bidders. The Procurement Department drafts contracts basedon the bidding documents and the bid documents of the winning bidder,and conducts subsequent procurement after being reviewed by the LegalA?airs and approved by the President. For those that do not require bidding,the Procurement Department selects suppliers from the List of QualifiedSuppliers, conducts price inquiries and comparisons, confirms purchasers,and proceeds with subsequent procurement work.For dyeing aids, raw cotton, and yarn, we priorities products certified byBluesign, GOTS/OCS, and GRS. We continue to promote the use of recycledpolyester, recycled nylon and recycled cotton to improve resource utilization.Procured materials are subject to full inspection or random samplinginspection based on category, ensuring that non-conforming inputs arecontrolled at the source.
The Company has designated warehouses for storing raw cotton, yarn, chemicals, and other materials, strictly following relevant regulations andmaintaining appropriate environmental conditions and temperatures for di?erent raw materials.
The main contents of internal control evaluation include
Internal control
Each batch of incoming materials undergoes an appearance inspection and internal quality sampling test before being accepted into storage. Amaterial inventory ledger is maintained, and material requisition follows a "receipt-based requisition" system. The material ?ow and stock levelscan be monitored in real-time through the inventory management system.
The internal control evaluation is carried out by the Audit Department of the Company every year, so as to timely identify the loopholes and risksin the supplier management procedure, which lays a solid foundation for the building of a responsible supply chain.
Whether a reasonablesupplier evaluation andaccess system is establishedto examine the authenticityand legitimacy of thesuppliers' qualification andreputation.
Whether the suppliers areselected according to theprinciple of fair and justcompetition, and the qualityassurance agreement is signedwith the suppliers on the basisof e?ectively preventing the riskof fraud.
Whether the supplier managementsystem and supplier elimination systemare set up, so as to conduct real-timemanagement, assessment and evaluationon the quality, price, delivery timeliness,supply conditions, qualification andreputation, operating status of materialsor services provided by suppliers, andto make reasonable selection andadjustments to suppliers based on theassessment results.
Products and Services
Energy Conservation andEnvironmental ProtectionAbout the Company
| Chairman's Statement | About the Company | ESG Governance | Production Operations | Employee's Rights and Bene?ts | Community Engagement | Key Performance Indicators | ||||||||||
Energy Conservation and EnvironmentalProtection/Advancing Green and Low-Carbon Development
With the development of the economy and the advancement of technology, global issues suchas resource scarcity and climate change have become increasingly urgent. Promoting green andlow-carbon development has become a consensus and action for countries around the world toaddress resource and environmental issues and promote sustainable development. As a greenpioneer and initiator of the Green Manufacturing Alliance in the global textile industry, Lu Thai hasalways adhered to the sustainable development path of "green, low-carbon, and environmentallyfriendly", followed the economic growth model of "resources - products - renewable resources",and insisted on the operating principles of "reduction, reuse, and recycling". Based on low-carbon and environmentally-friendly raw materials, the Company has promoted the upgradesof equipment in terms of energy conservation and environmentally friendly, and achieved theresearch and application of green processes, assisting the world in achieving a win-win supplychain ecosystem and sustainable human development.UN Sustainable Development Goals
ESG Report 2024 Lu Thai Textile Co., LtdEnergy Conservation andEnvironmental Protection
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Environmental management indicators achievementLuthai Environmental Management Achievements in 2024Data related to wastewater and sewage
Indicator (Unit)COD (Chemical Oxygen Demand) in
discharged wastewater (ton)Ammonia nitrogen content indischarged wastewater (ton)Industrial wastewater discharge(10,000 cubic meters)
2020
2024
Reduction Comparedto the Baseline Year
28.94%
66.67%
4.59%
Air pollutant emissions
Waste discharge
Energy consumption density
Note: The baseline year for the above data is 2020.
Indicator (Unit)
Sulfur dioxide in emitted exhaust
gas (ton)Nitrogen oxides in emitted
exhaust gas (ton)
Indicator (Unit)Hazardous waste generation (ton)Non-hazardous waste generation
(sludge) (ton)
Indicator (Unit)Greenhouse gas emission intensity(tCO
e per million revenue)Total energy emission density (tons ofstandard coal per million revenue)
2020
0.5
4.5
2020
14,552
2024
0.2
0.5
2024
11,420
Reduction Comparedto the Baseline Year
60%
88.89%
Reduction Comparedto the Baseline Year
29.41%
21.52%
Reduction Comparedto the Baseline Year
Risk analysis and response measures
mpact analysis of risks and response measures
Addressing climate changeClimate change is not only an environmental issue, but also a development issue. As a global textile enterprise, Lu Thai actively regardsaddressing climate change as an important action for sustainable development, vigorously promoting energy conservation and carbonreduction in production and operation, and contributing to global climate governance.
The Shared Socioeconomic Pathways (SSPs) are a powerful tool introduced by the Intergovernmental Panel on Climate Change (IPCC) in 2010 todescribe global socioeconomic development scenarios. SSPs were developed based on Representative Concentration Pathways (RCPs) and areused to quantitatively describe the relationship between climate change and socioeconomic development pathways, re?ecting the adaptationand mitigation challenges that future societies may face in response to climate change.The SSP2 pathway is the most aligned with China's current development status. The Group's scenario analysis includes an optimistic climatechange scenario, where warming remains below 2?C—SSP 1-2.6 (with a projected 1.8?C increase by 2100 compared to pre-industrial levels), aswell as a pessimistic climate change scenario, where warming exceeds 4?C—SSP 5-8.5 (with a projected 4.5?C increase by 2100 compared to pre-industrial levels).
Based on our preliminary assessment of risk factors and consideration of the impacts of a low-emission scenario (1.8?C) on carbon pricing,renewable energy generation, and other transitional climate e?ects, as well as the impacts of a high-emission scenario (4.5?C) on physical riskfactors, we have selected the following climate-related risk factors for further analysis and have outlined the corresponding response measures.
2020
105.8
17.5
2024
49.9
12.9
52.8%
26.3%
Energy Conservation andEnvironmental Protection
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The Group’s production bases arelocated in the East China region,where extreme weather eventscaused by climate change include butare not limited to typhoons, heavyrainfall, droughts, and ?oods. Undera global 1.5°C warming scenario, thefrequency of once-in-20-years heavyprecipitation events is expected toincrease by 10%, while the frequencyof once-in-100-years heavyprecipitation events is expectedto increase by 20%. Under a 2°Cwarming scenario, the frequency ofonce-in-20-years heavy precipitationevents is projected to increase by22%, and the frequency of once-in-100-years heavy precipitation eventsis expected to rise by more than 45%.
A cold wave occurs when cold aircauses a local temperature drop ofmore than 8°C within 24 hours, withthe daily minimum temperaturefalling below 4°C. A heatwave isde?ned as a period of three or moreconsecutive days with maximum dailytemperatures reaching or exceeding35°C. Due to human activities,the probability of cold waves hasdecreased to some extent, but theirintensity has shown an increasingtrend. Cold waves may cause sharptemperature drops, strong winds,rain, snow, and freezing conditions,a?ecting the Group’s raw materialproduction, logistics, and poweroperations. At the same time,heatwaves and compound extremeevents (such as heavy precipitationfollowed by heatwaves) are becomingmore frequent and intense underglobal warming. The increasedelectricity demand for residentialcooling during heatwaves may resultin industrial electricity restrictions forbusinesses during certain periods.
Extreme weather(Typhoons,?oods, heavyrain)
(Heatwaves,cold waves)
Immediaterisks
Natural disasters such as heavy rainfall,?oods, and severe typhoons mayhave lasting e?ects on the Group.During extreme weather events, thetransportation of raw materials andproducts may be disrupted, employeecommuting may become di?cult, andrisks such as power outages, watersupply interruptions, and steam supplydisruptions may arise. For example,typhoons may lead to production haltsand property damage. Additionally,during the rainy season, red rainstormwarnings may result in obstructedmaterial transportation, di?cultiesin employee commuting, damage tocompany buildings and equipment,a?ecting production schedules andincreasing facility maintenance costs.Under extreme heat conditions, the Groupmay need to enhance ventilation andcooling in production plants and o?ces,leading to increased energy consumptionand operational costs. Additionally,electricity demand surges may causepower transmission disruptions, a?ectingnormal production.Under extreme cold conditions, theGroup may need to increase heatingin production facilities and o?ces,resulting in higher energy consumptionand operational costs. Frozen roads dueto cold weather may disrupt materialtransportation, leading to insu?cient rawmaterial supply and direct productiondelays or shutdowns. Dry weatherconditions may increase the risk of?res, explosions, leaks, and poisoningincidents. Extremely low temperaturesmay cause equipment failures, leadingto property damage and higher facilitymaintenance costs. Furthermore, coldwaves and heatwaves may increase theprevalence and severity of cardiovasculardiseases, malaria, and heatstroke, posinghealth risks to employees.
Formulate "Production Safety Accident Emergency Plan," to establish an emergency command system, set up an emergency o?ce, and clarify emergencypersonnel and responsibilities to achieve a rapid response to extreme weather. The Emergency Command Team is responsible for command operations and workswith the production department to organize personnel for safety inspections of key facilities and equipment, while the logistics department ensures materialsupport.Before extreme weather: Monitor weather changes closely, conduct safety inspections, and rectify hazards promptly. Prepare protective devices and emergencyequipment in advance, ensure readiness of emergency teams and power supply, plan employee commuting arrangements, material and product transportation,and schedule production and shipments in advance.During extreme weather: Reduce production on typhoon/heavy rainfall days, halt outdoor operations, suspend work as needed, assign personnel to monitorweather conditions in real-time, prioritize employee safety, and ensure emergency supplies are adequate.After extreme weather: Conduct damage assessments immediately, draw lessons from the event, minimize losses, and accelerate production recovery.Strengthen ?xed asset management: Conduct regular inspections and maintenance of production equipment and facilities, purchase property insurance for assetsin high-risk areas, and implement additional protective measures to reduce losses from uncontrollable risks.Regularly analyze supplier risks, develop stocking strategies for key raw materials, optimize transportation methods and routes for critical raw materials, andenhance supplier relationships to ensure supply chain stability.Utilize a puri?ed water system to ensure the safety of production water and conduct regular quality testing for domestic and drinking water.
Prepare peak-load shifting electricity usage plans and work arrangements in advance during peak electricity demand periods.Develop backup energy solutions and pre-establish energy emergency response plans.Schedule hazardous materials shipments in summer for early morning or late afternoon to avoid high-temperature periods and reduce ?re risks.Regularly assess supplier risks, develop stocking strategies for key raw materials, and strengthen supplier relationships.Implement protective measures, provide appropriate personal protective equipment, enhance warning signage, conduct specialized inspectionsof boilers, steam systems, and other equipment, and check slippery areas such as staircases, ramps, and crossings.Develop emergency response plans to prevent ?res, explosions, leaks, and poisoning incidents.Ensure factory buildings and ?re protection facilities are insulated to prevent equipment damage from freezing.Enhance winter safety training to ensure operational safety and conduct safety inspections of employee dormitories.Prepare heatstroke prevention and cooling supplies in summer and minimize outdoor work.Include high-temperature emergency response training in employee programs and conduct drills for heatstroke and other heat-related illnesses. Continuously monitor employee health and conduct regular medical check-ups.
ResponsesRisk ImpactRisk DescriptionRisk NameRisk Type
Energy Conservation andEnvironmental Protection
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The Group’s production processrequires large amounts of water,which is used in dyeing and?nishing, printing, and equipmentcleaning. As global water scarcityworsens, particularly in drought-prone and water-stressed regions,water shortages pose an increasingrisk to the stability of textileproduction and cost management.According to the ChinaMeteorological Administration’sGlobal Surface Temperature DatasetAnalysis, global warming hascontinued since 2015, with recordsfor the hottest year on record beingrepeatedly broken. The rise inaverage temperature due to globalclimate change may bring multiplechallenges to textile enterprises,including production activities, rawmaterial supply, product qualitycontrol, and employee health andsafety. Temperature changes mayimpact fabric and apparel productionprocesses, storage conditions, andsupply chains.Carbon emission rights refer to thelegal right of enterprises to emitgreenhouse gases, with each companybeing allocated a certain quota by thegovernment. Although the Group isnot currently covered under China’snational carbon emissions tradingsystem, in a low-emission scenario, ifthe country continues to implementstricter emission reduction policies andintroduces carbon trading policies forthe textile industry, the Group may beincluded in the carbon quota tradingmarket. As a result, the Group’sproduction facilities may need to adoptmore aggressive emission reductionmeasures or participate in carbontrading to ensure compliance withgreenhouse gas emission regulations.
Water scarcity
Rising averagetemperature
Increase incarbon emissionpricing
Long-term risks
Policy ®ulatory risks
The Group's water sources includemunicipal tap water. Water shortages mayforce reductions in production capacity,temporary shutdowns, or the adoption ofadditional water management measuressuch as water recycling and water-savingtechnologies. This may lead to higherproduction costs or lower operatingrevenue.
Temperature variations may a?ect thestability of certain chemical reagents,requiring adjustments to productionparameters or additional temperaturecontrol measures, thereby increasingproduction costs. Rising temperaturesnecessitate enhanced ventilation andcooling in production plants and o?ces,leading to higher energy consumption andoperational costs. Additionally, increasedtemperatures may raise the likelihood ofheat-related illnesses such as heatstroke,reducing workforce productivity.
As carbon emission pricing rises, theGroup's carbon trading expendituresmay continue to increase, impactingits ?nancial performance. Moreover,higher carbon pricing signi?cantly a?ectsthe power and chemical industries,potentially leading to rising energy pricesor raw material shortages, which wouldindirectly increase the Group's operatingcosts.
Set reasonable water conservation targets and implement improvement measures.Establish water conservation goals, reduce freshwater consumption, and increase wastewater reuse.Develop a comprehensive water resource management system and assessment framework.
Implement energy-saving renovations for air conditioning and ventilation systems in production facilities and o?ces to improve energy e?ciency.Provide adequate heat protection materials for employees in summer and conduct annual health check-ups.Include high-temperature response training in employee programs and conduct emergency drills for heatstroke and other heat-related illnesses.Avoid outdoor work during midday high-temperature periods to ensure safe production.Plan peak-load shifting electricity usage in advance.
Establish a greenhouse gas emission management framework, set energy-saving and carbon reduction targets, and gradually reduce carbonemissions intensity and total emissions. Form an Energy Saving and Emission Reduction Task Force to conduct self-assessments and optimizereduction measures. Additionally, require department and workshop managers to identify high-power equipment and major pollution sources,document ?ndings, and further analysis and improvement to ensure that, beyond meeting the Group’s emission reduction targets, emissions arefurther minimized.Strengthen energy e?ciency management across production operations, including reviewing energy-consuming equipment and energy use,replacing high-energy-consuming equipment with energy-e?cient alternatives, upgrading high-energy equipment, and optimizing productionequipment to improve energy e?ciency and reduce greenhouse gas emissions.Promote resource recycling by installing recovery systems (e.g., reclaimed water reuse, ammonia recovery, alkali recycling).Improve energy structure by increasing the use of clean and renewable energy (e.g., expanding photovoltaic power generation projects) andreducing reliance on traditional fossil fuels.Enhance training and awareness programs to improve employee energy-saving awareness and operational e?ciency, preventing unnecessaryenergy waste.Strengthen energy management and assess energy consumption in production workshops.Improve production technology to enhance improve the ?rst pass rate of products, thereby reducing raw material and energy consumption perunit product.Adopt green operations by promoting paperless o?ces to reduce greenhouse gas emissions from business activities.
ResponsesRisk ImpactRisk DescriptionRisk NameRisk Type
Energy Conservation andEnvironmental Protection
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More than99%of liquid ammonia is recycled throughthe separation of oil and ammonia and that of oil andwater during product processing.
Following the alkali recovery project, the Company launched the alkali balance reuse project this year to promote waste resource utilizationand green, low-carbon practices. This initiative eliminates the high-energy consumption multi-e?ect evaporation recovery model by balancingalkali production and usage. In Phase I, the alkali recovery diluted alkali storage tanks were connected to the wastewater treatment facilityto substitute diluted alkali for concentrated alkali, ensuring alkali availability at the wastewater treatment station. In Phase II, the Companyinstalled in-workshop alkali blending and reuse devices, where diluted alkali is ?ltered and puri?ed, then blended with concentrated alkalito produce standard alkali, which is then reused in desizing and scouring alkali-consuming machines. Both project phases have achievedautomated control, gradually replacing multi-e?ect evaporation alkali recovery equipment to reduce energy consumption. The project savesRMB1,579,000 annually.
Alkali balance reuse
We have implemented optimization and upgrades for the steam pipelinenetwork, enhancing steam condensate recovery and utilization. Additionally,we have carried out a softened water preheating modi?cation project tofurther advance waste heat recovery, enabling an annual steam savings ofnearly20,000 tons.
Waste heat recycling
Low-carbon practicesPhotovoltaic power generation projectsAs of 2024, the Company's installed solar photovoltaic power generation facilities have supplied a total of 70.26 MW grid-connected electricity,accounting for13%of the annual electricity consumption within the total installation scope, reducing carbon dioxide emissions byapproximately 78,000 tons.
Photovoltaic power generation across all industrial parks
Application of low-carbon technologies
The Company's magnetic levitation fan integratedenergy-saving technology has achieved a promotionrate of over80%.
Maglev centrifugal blowers
Luthai integrates sustainable development principles into the entire production and operational process, continuously strengthening resourcemanagement and adhering to green development concepts. We strictly comply with the Energy Conservation Law of the People's Republic ofChina, the Water Law of the People's Republic of China, and the Law of the People's Republic of China on the Promotion of Clean Production,among other relevant laws and regulations, and have established an energy management system.The Company has formulated the General Resource Utilization Management Process and the Environmental Operation Management Regulationsas the Group-wide guidelines for resource utilization management, which all entities within the Group must strictly follow. Additionally, eachproduction plant has developed and implemented its own Resource Management System and Energy Conservation and Emission ReductionManagement System in accordance with its speci?c operational conditions. These systems facilitate standardized and systematic resourceutilization management, signi?cantly enhancing resource e?ciency.Furthermore, the Company has set annual water conservation and energy consumption targets. By improving management practices andupgrading technologies, we continuously optimize resource utilization methods, conduct regular audits of resource consumption, and enhanceoverall resource e?ciency to ensure the achievement of sustainability goals.
Resources management
We are conducting energy-savingupgrades for electromechanicalequipment, researching andpromoting upgrades for fans andpumps, implementing systematicelectricity-saving projects, andaccelerating equipment renewaland replacement, and prioritizingthe adoption of energy-e?cientequipment.Energy system optimization and upgrades
Energy management
Liquid ammonia recycling
Energy Conservation andEnvironmental Protection
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Resource managementLu Thai Textile actively conducts water resources management and makes more e?orts in the recycling of water resources. Through watertreatment and recycling, water conservation planning, and other measures, the Company minimizes tap water consumption, alleviating regionalwater supply pressures and serving as a benchmark example in the industry.
spinningBleaching and dyeingweavingFabric inspectionFinishingInspection and packingGarment production
8374
2979
The Company has established a long-termmechanism for water conservation, formulatedplans for unit water consumption and annual waterconservation targets, assigned and implementedwater conservation goals to each section andworking team and clari?ed responsibilities for alllevels.In 2024, with the Company's own wastewatertreatment plant, the Group's reclaimed watermanufacturing equipment had a design capacityof 20,000 tons/day, and the use rate of reclaimedwater in the Group's major water-consuming plantswas as high as more than 52%.
The Company has established four plant wastewater treatmentstations and one municipal wastewater treatment plants. Theplant wastewater treatment stations adopt the A2O methods, andthe quality of the discharged water is below the concentrationlimit for indirectly discharged water specified in the DischargeStandards of Water Pollutants for Dyeing and Finishing of TextileIndustry (GB4287-2012) and compliant with the requirements inthe Announcement on Adjusting the Implementation Requirementsfor Some Indicators of GB4287-2012. The municipal wastewatertreatment plant adopts a technique that integrates "hydrolysisand Orbal oxidation ditches" and has a capacity of treatingapproximately 120,000 cubic meters of wastewater every day intowater with a quality that is better than the A standard of Level 1specified in the Discharge Standard of Pollutants for MunicipalWastewater treatment Plant (GB18918-2002).
Water conservationThe company's energy and water saving targets
andbreakdown table for 2024Energy saving target(tons ofstandard coal)
Water saving target (m
)Department
Sewage treatment
The Company adheres to water footprint tracking, monitoring water consumption in both production and daily operations to control waterusage and minimize waste.
Water footprint tracking
ESG Report 2024 Lu Thai Textile Co., LtdEnergy Conservation andEnvironmental Protection
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Atmospheric pollutant management
Waste management
The Company actively conducts atmospheric pollutant management to lessen the environmentalburden brought by its production and operation to the society as much as possible. During thisReporting Period, in the factory-bound fugitive exhaust gas, the concentration of hydrogen sulphidewas 0.005 mg/m
, that of ammonia was 0.08 mg/m
, that of particulate matter was 0.28 mg/m
,that of non-methane hydrocarbon was 1.3 mg/m
, and that of odor was 13 (dimensionless). Thisis better than the discharge standard, which speci?es that the concentration limit for hydrogensulphide is 0.06 mg/m
, that for ammonia is 1.5 mg/m
, that for particulate matter is 1.0 mg/m
,that for non-methane hydrocarbon is 2.0 mg/m
and that for odor is 16 (dimensionless).
The Company temporarily stores and disposes hazardous waste that it generates in strict compliance with the Directory of National HazardousWastes and the Standard for Pollution Control on Hazardous Waste Storage. It manages hazardous waste in di?erent categories separately byestablishing hazardous waste storehouses and corresponding supporting facilities, while it hires quali?ed hazardous waste disposal agenciesto transfer hazardous waste and prohibits the appropriation of hazardous waste. The main hazardous waste generated in the production andoperation of the Company includes waste oil, waste oil barrels, waste paint buckets, waste detergent barrels, liners contaminated by chemicaldyes, waste lead-acid batteries, laboratory waste liquid, etc.; the main non-hazardous wastes brought by the production and operation is thesludge.
In 2024,Company processed36 tonsof hazardous wasteand11,420 tons of non-hazardous waste.
Biodiversity protection
Luthai Textile is committed to biodiversity conservation and strictly complies with the Forest Law of the People's Republic of China, theRegulations on the Implementation of the Forest Law of the People's Republic of China, the Forest Logging and Regeneration ManagementMeasures, the Regulations on the Protection of Wild Plants of the People's Republic of China, the Wildlife Protection Law of the People's Republicof China, as well as the United Nations Convention on Biological Diversity, and other biodiversity-related laws, regulations, and internationalconventions.To protect biodiversity, we assess the dependence and impact of our business operations on natural resources, organize tree-planting activitiesfor employees, promote paperless o?ces, and continuously work to reduce the negative impact of our operations on biodiversity. We activelypromote sustainable use of natural resources and contribute to ecological balance maintenance.
March 12 marked the 46th National Tree Planting Day in China. The Company's Youth League Committee organized Youth Leaguerepresentatives and young volunteers from various departments to participate in a tree-planting event hosted by the Zichuan DistrictCommunist Youth League Committee. Employees personally planted saplings, not only adding vibrant greenery to the bright Marchlandscape but also embodying the concept of ecological protection and harmonious coexistence through their actions.The Company's Information Department launched the Centralized Printing and Paperless Project. In 2024, this initiative helpeddepartments save a total of 76,500 sheets of printing paper.
Employee's Rights and Bene?ts/Building a Harmonious WorkplaceTogether
Employees are the driving force and innovation source of companies. Discovering thepotential and stimulating the ownership spirit of employees is the key to the success ofenterprises. Lu Thai Textile implements a humanistic culture centered on caring employees,meeting their needs to the greatest extent possible while ensuring that employees have ahealthy and safe workplace. We provide employees with a platform to show themselvesand improve their abilities, consolidate their knowledge and skills, enrich their leisurelife, and assist employees in solving difficulties. We truly care for and love our employees.
UN Sustainable Development Goals
Energy Conservation andEnvironmental Protection Products and Services
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Employee's Rights and Bene?ts
| Community Engagement | Key Performance Indicators |
00110022
0033
Respect and equalityLuthai Textile has always adhered to the principle of equal and friendly employment. It strictly complies with the laws, regulations, andrequirements of regulatory authorities of the countries where it operates, and actively supports the international conventions, includingthe International Covenant on Economic, Social and Cultural Rights and the Elimination of Discrimination in respect of Employment andOccupation, so as to build an equal, friendly occupational platform for employees.The Company believes that talents are the basis for the operation and sustainable development of companies. As to the recruitment andretention of talents, the Company adheres to the "all-inclusive" concept, accepts all talents, and promises not to determine employees' salaryand rank based on their gender, age, nationality, ethnicity, religion, color, language, domicile place and other personal characteristics unrelatedto work. The Company respects the rights of every employee, and provides equal and free development space for every employee.
Recruitment is conducted withoutdiscrimination based on gender,race, nationality, or other factors.
A fair competition mechanism is adopted forpromotion. The performance, abilities, andpotential of employees will be considered toselect the best ones.
The Company is committed to ensuringthat gender, beliefs, ethnicity, and othernon-work-related factors do not in?uenceemployees' salaries or promotions.
Employee diversity
Employee diversityTotal number of incumbent employees(person)Total number of male employees(person)Proportion of male employees (%)Total number of female employees(person)Proportion of female Employees (%)
23,0289,736
13,292
22,8509,317
13,533
23,98810,432
13,556
Indicator (Unit)202220232024
The Company always pays attention to the rights and development of female employees and always puts special protection for femaleemployees into practice. Therefore, the Company has formulated the Management Procedure for Protecting Female Employees, carried outvarious publicity, education, and entertainment activities to promote the physical and mental health development of female employees,enhance their confidence in overcoming the dual pressures of work and life, and enable them to maintain a good state in professionalcompetition.
The Company has refused gender discrimination, and recruited females under equal conditions.The Company has ensured career development of female employees, and provided broader development space forfemale employees.The Company has established a female employees' committee to assist female employees in solving their di?culties oflife and work, and safeguarding their rights and interestsA psychological counseling room has been established, and in 2024, a total of 27 exchange and discussion sessions wereorganized for female employees.In 2024, 16 training sessions were conducted for female employees, with approximately 1,000 participants. The trainingprimarily consisted of o?ine classroom sessions covering women’s health, maternal and child care, and mental healthawareness, along with specialized training for female-oriented activities. The content was designed to meet the practicalneeds of women, making it well-received among female employees.Various activities such as reading, writing, painting, paper-cutting, and pastry-making were organized to enhance theoverall skills of female employees, with prizes awarded to outstanding participants.Maternity rest rooms were set up to provide comfortable and convenient resting spaces for expectant mothers, with fourof these facilities recognized at the district level.In 2024, a total of 2,611 married female employees underwent health check-ups, with total examination costs exceedingRMB70,000.
Caring for female employees
Measures taken:
Employee ageTotal number of employees agedunder 30 (person)Proportion of employees aged under30 (%)Total number of employees agedabove 30 (person)Proportion of employees aged above31 (%)Education background ofemployeesBachelor or above (person)Junior college (person)High school or below (person)NationalityChina (%)Foreign employees (%)
9,866
13,162
1,4004,52317,105
9,671
13,179
1,3193,72617,805
9,814
14,174
1,5554,51717,916
Indicator (Unit)202220232024
Energy Conservation andEnvironmental Protection Products and Services
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Employee's Rights and Bene?ts
| Community Engagement | Key Performance Indicators |
Mental consultation room
Series of Activities on the International Women's Day on March 8
Awareness campaigns and knowledge training
Mom's cabin
Cultural and recreational activities
Physical examination for female employees
Energy Conservation andEnvironmental Protection Products and Services
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Employee's Rights and Bene?ts
| Community Engagement | Key Performance Indicators |
Human rights and labor
Compensation and bene?ts
Occupational health and safety
Human rights protection
Equity incentive program
Measures taken
The Company has established a comprehensive compensation and benefits system, providing employees with basic pension insurance,medical insurance, work-related injury insurance, and unemployment insurance in accordance with the law. Employees are also entitled to paidannual leave, home leave, marriage leave, maternity leave, work-related injury leave, and other bene?ts in line with national standards. TheCompany actively enhances employee communication channels by establishing and improving mechanisms such as labor unions, employeerepresentative meetings, and grievance procedures, allowing employees to voice their concerns and suggestions regarding compensation andbene?ts, ensuring the e?ective protection of their rights.
The Company pays high attention to its employees' occupational health and safety, so it has established and improved the management systemof occupational health and safety, implemented risk control measures, and actively inspected and responded to occupational disease hazards,so as to ensure that each Luthaier's health and safety are free from impairments.
Luthai Textile’s compensation system consists of hourly wage and piece-rate wage structures, with salaries balanced according to job roles.Based on this, the Company continuously improves salary structures and re?nes performance standards to maximize employee earnings.To further establish and enhance the Company’s operational mechanisms, improve the incentive and restraint system, fully mobilizeemployees' enthusiasm, and inspire the motivation and creativity of the Company’s and subsidiaries’ management teams and coretechnical (business) personnel, Luthai Textile has implemented two phases of equity incentive plans for directors, senior management, middlemanagement, and core technical (business) personnel.
Safety ?rst, prevention-oriented, andcomprehensive management.
Source management and green manufacturing.Emphasize prevention and a combination ofprevention and control measures.
In interview process, the Company actively examines identity cards, diplomas, etc., to prevent child laborers or underage workers whohave not ?nished legal compulsory education from being recruited by mistakes.The Company is committed to putting an end to all forced or compulsory labor. Employees are free to leave the workplace after completingthe work needed to be done within standard working time. The declaration system must be implemented for overtime work to ensure thatovertime work is a voluntary act of employees.In the course of production and operation, cooperating with the local government or third-party institutions, the Company actively carriesout due diligence on human rights protection.To ensure that the opinions of employees on the Company's management are fully conveyed and to encourage their participation, theCompany's Labor Union collects employee opinions and suggestions through various channels.
Before going to their posts, new employees have all undergone pre-job physical examinations to avoid personnel with occupationalcontraindications from working in the relevant posts; employees have undergone on-the-job physical examinations, and their work will beallocated according to the results; and when leaving their posts, employees have undergone post-job occupational physical examinationsto ensure that employees leave their posts in healthy condition.The Company has conducted regular occupational health education and training for employees, and established occupational healthsurveillance archives for employees, realizing the standardized management featuring "one archive for one person".Conduct annual occupational hazard assessments in key areas, with immediate recti?cation for any non-compliance.The Company posts warning signs and occupational hazard noti?cation cards in prominent positions in the workshop.The Company regularly maintains and repairs occupational hazard protection facilities to ensure their integrity and e?ectiveness.The Company conducts emergency rescue drills once or twice a year for relevant departments and workshops to ensure timely handlingof hazards.
□ Every year, employee representatives are elected through employee elections, and the Labor
Union regularly holds employee representative assemblies to promote activities of the LaborUnion and communicate with employees
□ Suggestion boxes are set up in various plants and departments of the Company to collect
employees' opinions on the Company's policies, management processes, and salary benefits.The Labor Union organizes them once a month and provides feedback to the Company's seniorleadership to discuss improvement plans
□ Tel.: (86) 533-5261634
SMS: 18560301315Email: gonghui@lttc.com.cn
□ Chairman Reception Day on the 25th of each month—direct face-to-face communication with
employees.Employment contract signing rate (%)Social insurance coverage (%)Signing rate of collective bargainingagreement (%)
Indicator (Unit)202220232024
The 2011 Restricted Stock Incentive Plan granted restricted stock to 344 participants, totaling 14.09 million shares. Thisincluded 16 directors and senior executives (1.6 million shares), 161 core management personnel (9.64 million shares),and 167 technical and business backbone employees (2.85 million shares). This plan was fully implemented in 2014.The 2021 Restricted Stock Incentive Plan initially granted restricted stock to 750 participants, including 11 directors(excluding independent directors) and senior executives, and 739 middle management and core personnel. Anadditional reserved grant was issued to 343 participants, including seven senior executives and 336 middle managementand core personnel. The initial and reserved grants under this plan amounted to 24,285,000 shares and 5,838,000 shares,respectively. This plan was fully implemented in 2024.
Complaint and Suggestion Channels
Luthai EHSPhilosophy
Prioritize safety before production; no productionwithout safety. Strictly adhere to operatingprocedures to prevent safety accidents.Comply with environmental laws and standards andful?ll corporate social responsibility in environmentalprotection. Ensure management practices alignwith compliance requirements for a safe workingenvironment.
Energy Conservation andEnvironmental Protection Products and Services
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Employee's Rights and Bene?ts
| Community Engagement | Key Performance Indicators |
Provide employees exposed to occupational hazards with standardized and effective personal protective equipment (PPE), ensuringregular procurement, distribution, and supervision of PPE usage to prevent occupational diseases. Install washing stations in areashandling corrosive substances such as acids and alkalis, and upgrade occupational disease prevention facilities through maintenance andimprovements.Organize ?rst aid and heatstroke prevention training to enhance employees' emergency response skills. In 2024, the Company conducted22 ?rst aid training sessions and 21 heatstroke prevention training sessions.The Company popularizes health care knowledge each month, and provides ?rst-aid medical kits for employees, with ?rst-aid medicinesupplemented for 271 times on average per month in 2024.The Company distributes heatstroke prevention drugs in summer for convenient use by employees.
First Aid Training
Facility Setup
Personal Protective Equipment
Summer camp program
OccupationalHazardous Factors
Dust
High temperatureand high humidityNoise and vibration
? Distribute items for heatstroke prevention for high-temperature posts in theworkshop? Add Auricularia auricula and pig blood curd to workshop meals to enhanceemployees' ability to defend against occupational diseases? Adjust the air supply and exhaust volume in the workshop? Equip employees with disposable noise-reducing earplugs andreplace them regularly
Talent management
Talent acquisition
Luthai scienti?cally forecasts talent demand based on the Company’s strategic positioning, business development, and current talent pool,enhancing talent selection methods and expanding recruitment efforts. By utilizing multiple recruitment channels, the Company attractsprofessionals from various ?elds, ensuring a strategic talent reserve to maintain long-term competitiveness and foster a corporate environmentwhere employees can fully utilize their skills and potential. At the same time, the Company actively engages in international talent recruitmentin the United States, Italy, Japan, Vietnam, Cambodia, and Myanmar to support its overseas business expansion.Additionally, to promote internal talent mobility and encourage diverse career development, employees can apply for internal job postings.Those who meet job requirements and pass interviews can transfer positions following the Company's recruitment procedures. Employees anddepartments can also submit internal transfer applications based on operational needs.This year, to attract outstanding graduates, the Human Resources Department organized a Summer Camp Program for university students.Students from Jiangnan University, Dalian Polytechnic University, Qingdao University, and other institutions were invited for internships,providing them with an in-depth understanding of the Company. For newly hired university graduates, the Company conducted onboarding anddevelopment training and regularly organized welcome banquets and discussion forums to enhance their sense of belonging and improve talentretention rates.
Countermeasures
? Take airtight, ventilating, and dedusting measures for cotton blending machines andscutchers in pre-spun process.? Adopt the approach of wet sweeping for the workshop to take away the dustaccumulated on the surface as much as possible? Regularly clean the air duct? Distribute dust masks that conform to international speci?cations
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | ESG Governance | Products and Services | Production Operations | ||||||||
Employee's Rights and Bene?ts
| Community Engagement | Key Performance Indicators |
Development of reserve talent pool
Internal employee training
The Company has formulated and implemented the 2022-2026 Key Position Recruitment Plan, establishing the Three-Year Career DevelopmentPlan for Undergraduate and Above Employees of Luthai Group for newly recruited key position personnel. Additionally, each department hasbeen tasked with developing the Secondary Talent Pool Management Measures to achieve position-speci?c recruitment and targeted trainingfor key roles. In 2024, totally 275 key post personnel were recruited, and totally 148 second-level talents were reserved for all departments.
Luthai Vocational Training School is dedicated to serving regional economic and social development, aligning with market demand, andfocusing on employment promotion and industry development needs. The school is committed to cultivating skilled professionals and providestraining in employment skills, skill enhancement, and competency development for corporate employees, unemployed individuals, ruralmigrant workers, and university students.
The Company o?ers professional training courses in both vocational skills and management skills. A total of 23,988 employees took part in thevocational training in 2024 with a coverage rate of 100%.
This year's new employeeSelf-management
Professional backboneManaging others
Department managerManaging the department
System managementManaging operations
·Basic skills training
·Considering both individual andteam·Individual's success and team'ssuccess
·Maximizing the Company'sbene?ts·Giving strategic support
·Performance-oriented·Cross-department coordination
Within a year
One to two years
Three to ?ve years
Over ?ve years
Set-sail Plan
Flight Plan
Elite Plan
Excellence Plan
Onboarding personnelCultivation engineering
Grass-roots managerial personnelIncubation engineering
Middle-level managerial personnelRe-building engineering
Senior managerial personnelResearch and study engineering
Employee training and development
Training participants (person)Average training hour (hour)Training coverage rate (%)
23,028
100%
22,850
100%
23,988
100%
Indicator (Unit)202220232024
Onboarding training
External personnel training
Unemployed worker training
In 2024, the Company organized two enterprise internship programs for teachers, held during winter and summer breaks. A total of ninevocational teachers from seven regions across the country participated, including eight teachers in a ten-day skills training program and oneteacher in a 30-day on-the-job training program. The participating teachers specialized in textile design, fashion design and technology, textileengineering, and modern textile technology.
To help local unemployed individuals secure better job opportunities, Luthai Vocational Training School provides dual-assurance trainingprograms, including specialized vocational skills training and job-specific skills enhancement training. After training, participants takecerti?cation exams, and those who pass receive certi?cates. In 2024, a total of 178 unemployed individuals received training, with 45 earningSpecialized Vocational Ability Certi?cates and 58 obtaining Skill Level Certi?cates.
Training for section chiefs and group leaders
Tea Art TrainingElectrician TrainingPastry Training
Teacher enterprise internship
Customer-led SST project training for theCompany's management personnel
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | ESG Governance | Products and Services | Production Operations | ||||||||
Employee's Rights and Bene?ts
| Community Engagement | Key Performance Indicators |
Training needs and satisfaction survey
Multi-dimensional promotion mechanism
This year, the Company has placed great emphasis on talent training. At the beginning of the year, a survey questionnaire was distributed toaccurately identify employee training needs, covering management skills, professional techniques, and logistical services. The training sessionsattracted over 20,000 participants. Additionally, by implementing a self-evaluation mechanism, the Company e?ectively integrated internal andexternal training, enhancing employee knowledge and skills. The training satisfaction rate exceeded 95%, signi?cantly improving employeecapabilities and empowering high-quality corporate development, thereby contributing to the establishment of a high-quality human resourcestrategic system.
The Company implements horizontal and vertical dual channel development (job promotion and cross-job promotion), with promotion in thedirections of management line and professional lines (the former is achieved through job changes, while the latter is achieved through internalprofessional title appraisal). Targeted training is carried out based on personnel characteristics and personal preferences, achieving multi-dimensional development space for employees.
In 2024, the Company appointed two Chief Technicians, 13 Senior Technicians, and 82Technicians; 399 Senior Skilled Workers, 520 Intermediate Skilled Workers, 596 Junior Level2 Skilled Workers, and 769 Junior Level 1 Skilled Workers. During their tenure, they receivea monthly allowance of RMB2,500, RMB1,500, RMB1,000, RMB500, RMB300, RMB200, andRMB100, respectively.The Company appointed four Senior Engineers, five First-Class Engineers, 29 Engineers,365 Assistant Engineers, and 193 Technicians. During their tenure, they receive a monthlyallowance of RMB1,500, RMB1,000, RMB800, RMB400, and RMB200, respectively.The Company appointed three First-Class Designers, three Designers, 21 Assistant Designers,and three Design Assistants. During their tenure, they receive a monthly allowance ofRMB1,000, RMB800, RMB400, and RMB200, respectively.
Promotion Plan for ProductionFrontline Positions
Promotion Plan for Department
PositionsPlant management personnel
Group leaderReserve talentsExcellent employeeVersatile employeeSkilled workerFrontline employees
Appraisal and appointment
of professional titles
Department management personnel
Reserve personnelSub-group leaderExcellent employeeDepartment employee
Since 2003, the Company has established an internal professional title evaluation, appointment, and allowance system, actively promotingthe values of honoring labor, valuing skills, and fostering creativity. This has created a corporate culture that emphasizes skill development,encouraging employees to learn and master professional skills. The Company has taken a leading position in the industry in cultivating andevaluating skilled talent. The internal professional title evaluation and appointment system has become a key platform for implementing theCompany's philosophy of valuing, nurturing, and utilizing talent.
Luthai Textile actively carries out various skill competitions, and encourages its employees to promote their professional and technicallevels through competitions, and to de?ne their vocational objectives and orientations; the Company also encourages its employees to takevocational quali?cation examinations, to transfer what their have learned into actual output. Luthai also constantly facilitates the developmentof its employees toward high-grade, precision, advanced, and professional direction, and drives the Company to stride toward a learning-oriented, skill-oriented, and innovation-oriented world-class enterprise.
From April to July 2024, the Company held the thirty-fourth session of activity of technical demonstration and competition. A total of 47companies and 8,150 personnel covering 597 types of work in total took part in the competition. Through the processes of publicity andmobilization, training and learning, post drills, and preliminary and final competitions, finally there were 30 champions of single skills ofdepartments, 3,230 winners of technical demonstrations and competitions, 636 "excellent versatile workers", and 97 "excellent teams",and they have all obtained honor certificates, bonus, and presents. Technical demonstrations and competitions have aroused employees'enthusiasm to learn technologies, dig into professions, practice skills, and work as artisans through training and learning, post drills, and skillcompetition, hence achieving the objectives of promoting production, safety, management, bene?ts, and development through competitions.
The Company’s Thirty-fourth Sessionof Technical Demonstration andCompetition
Training
This year, 16 employees were encouraged to take the Certi?ed Safety Engineer Examination, with two
employees passing and obtaining certi?cation.
Quali?cation support
Promoting skills development
Award Ceremony
Competition
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | ESG Governance | Products and Services | Production Operations | ||||||||
Employee's Rights and Bene?ts
| Community Engagement | Key Performance Indicators |
[Case] The Company’s Activity of Evaluating the ExcellentThe Company launched the activity ofevaluating the excellent, in order to furtherpromote the excellent corporate cultureof the Company, commend outstandingcollectives and employees who performedoutstandingly in the past year, and motivateeveryone to innovate their performance,achieve new breakthroughs, and makenew contributions in the next year. Atotal of 11,313 participants took partin the evaluation process. Through agraded assessment, the ?nal selectionsincluded 2,781 "Advanced Production(Work) Individuals," 112 "Company ModelEmployees," nine "Labor Models," and 41"Advanced Collectives." The total bonusawarded amounted to RMB2.97 million.
We have always believed that "employees are the most valuable resource of an enterprise," and only with a stable workforce can a companyachieve better performance. Therefore, we continuously enhance employee satisfaction and sense of belonging, striving to meet variousemployee needs to the greatest extent possible.We provide our employees with a wide range of non-monetary bene?ts, such as occupational health check-ups, employee wellness check-ups,shuttle services, travel allowances, and company dormitories. Additionally, we have established special bene?ts to accommodate employeeswith specific needs, such as nursing rooms, specialized health check-ups for female employees, and hardship assistance funds. Details areprovided in the table below:
In terms of statutory bene?ts, we provide employees with statutory holidays, rest days, sick leave, work injury leave, marriage and bereavementleave, maternity leave, paternity leave, breastfeeding leave, and annual leave in accordance with national or local regulations. Additionally,we contribute to employees' social insurance (including basic pension insurance, medical insurance, unemployment insurance, work injuryinsurance) and housing provident fund.
Bene?ts and care
Work Support
Holidays
Health
Talent Support
Housing
Protection for FemaleEmployees
Dining
Assistance
Leisure Activities·Travel allowance·Communicationallowance·Shift allowance·Overseas allowance·Shuttle service
·Traditional festivalgifts·Annual party lottery·Large-scale prize-winning activities
·Employee wellnesscheck-up·Free heat preventionmedicine·Cooling fruits·Convenient medicalrooms
·Academic subsidy forintroduced talents·Talent skillimprovement award·Postdoctoralworkstations·Equity incentives forkey employees
·Company dormitories·Government talentapartments·Housing subsidy
·Nursing room·Specialized healthcheck-ups for women·Special training forfemale employees·Psychologicalcounseling room forfemale employees
·Employee cafeteria·Free on-duty meals·Convenient pastries andfruits
·College assistance foremployees' children·Consolation gifts foremployees in hardship·Serious illnessassistance fund
·Employee activity center·Library·Band·Team-building activities·Social events
Luthai has more than 20,000 employees. The Company attaches great importance to the quality and services of employees' board and lodging,and regularly carries out satisfaction surveys of employees' board and lodging each year, to constantly improve logistics management andservices to strive to provide employees with nutritious diets and convenient living conditions.
Continuously enhance employees' job skills by adhering to the principles of "standardization and regulation" infood preparation. Advocate for quality awareness among all employees, starting with basic dishes, optimizingcooking methods, mastering heat control, ensuring precise seasoning, and maintaining stable food quality.Develop on-duty meal menus through a combination of intelligent planning and employee surveys, ensuring theaccumulation of raw data to guarantee menu diversity, balance, and seasonality.Display QR codes on dining tables for feedback collection, utilizing multiple channels to gather opinions andsuggestions, and continuously improving food quality.Promote the upgrade of smart dining facilities, enabling diversi?ed intelligent management methods such as card,QR code, and facial recognition payments, self-service card replenishment, intelligent food sampling, morninghealth checks, and AI monitoring, improving restaurant attendance rates and convenience.In 2024, the meals amid shift were upgraded by including one fried product per meal to enrich the diets offrontline employees.The Company compiles a menu according to seasonal changes to ensure a cool taste in summer and hot soupand dishes in winter. In summer, meals amid shift are added with seasonal fruits and mung bean soup, to preventemployees from heatstroke and reduce heat from employees.Establish a provincial-level healthy enterprise to ensure food safety, create a healthy dining environment, andcontinuously promote health awareness by advocating "low salt, low sugar, and low fat," prioritizing health.To demonstrate the Company's humanistic care, a birthday cake is made and provided for employees free ofcharge. Launch a cake ordering and sales service to better serve employees, including large-scale and customizedcake production.In 2024, employee dining satisfaction reached 82.69%.
Emphasis on employees' living and dining conditions
Diverse Dishes
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | ESG Governance | Products and Services | Production Operations | ||||||||
Employee's Rights and Bene?ts
| Community Engagement | Key Performance Indicators |
Pastries
Employee apartments
Scholarship Awarding Ceremony of the Golden Autumn Scholarship Program
Distribution of Relief Funds
Supermarket
Distribution of Cakes to Employees
Air conditioners and free Wi-Fi are available in all dormitories in the CompanyEach ?oor in the apartment is equipped with chess and card room, television hall and smoking roomEach building in the apartment areas is equipped with a fully automatic coin-operated washing machine24-hour unmanned supermarkets are set up in the apartment areas to provide employees with conditions ofconvenient and fast shoppingThe apartments provide the services of cleaning working clothes and articles of bedding free of charge, and setup locations for replacing articles of bedding to achieve that such articles can be replaced whenever they aredirtyFree drying and storage of bedding are also provided for employees during seasonal changesEach park area is equipped with bathing facilities, so that employees can have baths conveniently84 disinfectant is sprayed on dormitories and bathrooms every day to ensure a healthy living environmentIndependent shower rooms in university student apartments
Employee assistance and support
The "Golden Autumn Scholarship" program is an initiative that upholds traditional virtues, fosters a spirit of generosity, and strengthens familybonds. It is a demonstration of our care and support for employees, as well as a program that contributes to the Company's developmentwhile reflecting employees' aspirations. This initiative has become an important platform for Luthai Group to carry out meaningful actionsfor employees by addressing their needs, solving di?culties, and delivering warmth. This year, 234 employees' children achieved outstandingacademic results and were admitted to universities across the country. Their success is not only a source of pride for their families but also
Implementing the people-foremost policy and caring for employees have always been an important part of the Company's corporate culture.The grass-roots branches of the Company visit and comfort employees every year, go deep into the front line of production, and understand theliving condition of employees through multiple channels. They also take the responsibility of "the ?rst insider" actively, ?nd out the state of mindof employees and take the initiative in solving their problems. The Company has established a bailout foundation, and distributes assistancefunds to employees with family di?culties every year, hence helping employees to go through their di?cult pass. In 2024, the Company’s laborunion provided ?nancial assistance to 86 employees in need, distributing a total of RMB214,000 in relief funds.
Golden Autumn Scholarship
Relief of Employees in Di?culties
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | ESG Governance | Products and Services | Production Operations | ||||||||
Employee's Rights and Bene?ts
| Community Engagement | Key Performance Indicators |
To address the challenge of childcare during the summer break, enhance employees' sense of well-being, and ensure a safe, enjoyable, andmeaningful summer for their children, the Company organized a summer daycare program from July 12 to August 24, 2024. A total of over 260employees' children participated. The daycare program was conducted in two sessions, each lasting 20 days, and featured four themed weeks:
"Creativity & Craftsmanship," "Traditional Chinese Culture," "Labor & Work Ethics," and "Safety & Protection." With a diverse and engagingcurriculum, the program incorporated activities such as recitation, painting, calligraphy, handicrafts, ?lm appreciation, and singing, helpingchildren enhance their imagination, creativity, and social skills through an edutainment approach.
On February 23, 2024, the "Tribute to Strivers, A New Symphony" Luthai Group 2024 New Year Concert was grandly held at Luthai Academy.The concert featured a full performance and accompaniment by the Luthai Textile Orchestra.The event was divided into three chapters, with the ?rst chapter, "Song of Struggle," featuring performances such as Chinese Dragon, EverythingGoes Well, Three Hundred and Sixty-Five Miles, and the orchestral ensemble Festive Dance. These performances conveyed the dedication andperseverance behind every achievement amid a complex and ever-changing external environment, highlighting the extraordinary Luthai spiritand strength.
The Company regularly organizes various cultural, sporting, and recreational activities, to enrich employees' spare-time life, boost employees'mental outlook, and lead employees to achieving the balance between work and life, hence promoting employees' sense of belonging to theenterprise, and enhancing the Company's cohesion.
Summer-vacation daycare program
[Case] "Tribute to Strivers, A New Symphony" – 2024 New Year Concert
Enriching employees' cultural and recreational lifeDaily Activities and Performance of the Summer Daycare Program
On June 1, 2024, the "Forging Ahead on a New Journey, Uniting Strength for a New Chapter" Luthai Group 37th Anniversary Celebration Seriesof Cultural and Sports Activities was held at Luthai Cultural Park. The Chairman of the Company's labor union attended the event and presentedawards to the winning teams.The event featured activities such as group rope skipping, tug-of-war, and mixed basketball shooting. Each team carefully prepared, workedclosely together, maintained uniform coordination, and encouraged one another, demonstrating the positive, united, and collaborative spirit ofLuthai employees in the new era. The event was ?lled with enthusiasm and joy, celebrating the 37th anniversary of Luthai Group.
[Case] The 37th Anniversary Celebration – Series of Cultural and Sports ActivitiesConcert Performance Scene
Anniversary Celebration Activities
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | ESG Governance | Products and Services | Production Operations | ||||||||
Employee's Rights and Bene?ts
| Community Engagement | Key Performance Indicators |
In May 2024, the 26th Luthai Group Employee Basketball League was held. Along with over 100 referees, athletes, and employee representatives.The competition was divided into three stages: group elimination, round-robin, and finals. On the court, teams from various departmentscompeted fiercely under the principle of "friendship first, competition second." Players ran, collided, and jumped with full concentration,their movements ?ashing under the sunlight, earning rounds of applause from the audience. After three days and 38 intense matches among12 teams, the championship game took place. In the end, the Lufeng Weaving & Dyeing Team won the championship, while the SecurityDepartment Team secured second place.
In April 2024, the Company organized the 24th Employee Football League, with over 150 participants including referees, athletes, and employeerepresentatives. A total of 11 teams competed in the tournament, which lasted seven days and included 29 matches, progressing through groupelimination rounds, semi?nals, and the ?nal.On the ?eld, players worked together, ?ercely contested the ball, and displayed boundless energy. They ran with determination, passed skillfully,and executed precise shots, their agile movements weaving across the green turf. Their outstanding techniques and indomitable ?ghting spiritwere on full display. In the end, the Administration Team won the championship, the Weaving Production Department Team secured secondplace, and Liu Mingming from the Weaving Production Department was awarded the tournament’s top scorer.
On August 24, 2024, Luthai Group hosted the "Swim Beyond Limits, Strive for Excellence" 2024 Swimming Competition. The event featuredvarious categories, including Men's 50 m, Men's 100 m, Men's 4 × 50 m Relay, Women's 50 m, Parent-Child 50 m, "Non-Swimmer" Swimming,and Parent-Child Interaction. Participants showcased their skills with di?erent swimming styles, competing ?ercely in the pool, demonstratingthe indomitable spirit and determined pursuit of excellence that de?ne Luthai employees.
[Case] The 26th Session of Employee Basketball League
[Case] The 24th Session of Employee Soccer League
[Case] Swimming Competition
Basketball Match Scene
Football Match Scene
On the evening of September 25, 2024, the Luthai Group’s 11th Employee Choir Competition with the theme of "United in Strength, Advancingwith Determination", celebrating the 75th anniversary of the founding of the People's Republic of China, was held at Luthai Cultural Park.The event was attended by distinguished guests, including a member of the Party Committee and Vice President of Inner Mongolia Universityof Technology, the Dean of the School of Light Industry and Textiles, the Party Secretary and Dean of the Luthai Textile & Apparel College atShandong University of Technology, the Secretary and Director of the Standing Committee of the People's Congress of Zichuan District, theSecretary and Chairman of the Zichuan District CPPCC, the Principal of Zibo School of Technology, as well as Company leaders such as the PartySecretary, Chairman, and President. Nearly a thousand employees were present to watch the competition.This year's choir competition featured 13 teams and over 2,000 employees, who sang with passion, expressing their patriotism and celebratingthe national spirit through music. With their voices, dedication, and perseverance, Luthai employees paid tribute to their motherland.
To create a broader platform for socializing and communication while enhancing the sense of happiness and belonging among youngemployees, the Company organized a youth employee social event at Banyang Villa on May 18. More than 80 young employees from variousdepartments participated in the event.The event featured a series of fun and engaging interactive games, including "Sweet Surprise," "Hearts Aligned," "Cross?re Challenge," "Trueor False," and "Unconventional Thinking." Led by the hosts, participants worked closely together, supported one another, and confidentlyshowcased themselves. Amid laughter and joy, they formed closer bonds, deepened mutual understanding, and shared an enjoyable andunforgettable experience, ?lled with happiness and cherished friendships.
[Case] The 11th Employee Choir Competition in Celebration of the 75thAnniversary of the Founding of the People's Republic of China
[Case] Youth Employee Social EventChoir Performance Scene
Swimming Competition Scene
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | ESG Governance | Products and Services | Production Operations | ||||||||
Employee's Rights and Bene?ts
| Community Engagement | Key Performance Indicators |
The survey analysis determined that the overall satisfaction rate of the Group was 88.4%, re?ecting a 0.2% increase compared to the previousyear. Feedback on employee satisfaction levels was provided to each department, and 69 departmental employee satisfaction improvementreports were compiled and distributed to address and rectify identi?ed satisfaction issues.
Overall SatisfactionLinear trend(overall satisfaction)
Accommodation and dining
The Company organized overseas employees to visit domestic factories for learning and training. To accommodate their living habits, bidetsprayers were installed in restrooms, and the cafeteria provided specially prepared light dishes suited to their tastes. To ensure overseasemployees felt the warmth and hospitality of Luthai and China, leisure activities were arranged during their rest periods, including sightseeingtrips and invitations to participate in anniversary celebrations and performances.
Overseas employees' learning in China
Youth Employee Social Event Scene
Indoor Activity Scene
On December 27, 2024, Luthai Group launched the 2025 New Year Sports and Cultural Activities with the theme of "Fitness for the New Year,Striving for the Future". The event lasted three days and attracted over 300 participants. Competitions included table tennis, badminton,billiards, card games such as Guandan, Shengji, and Gouji, as well as Chinese chess. Through these activities, employees strengthened theirbodies, relaxed their minds, and brought new energy to the Company's development.
To enhance employee satisfaction and strengthen corporate cohesion, the Company conducted an employee satisfaction survey in 2024. Thesurvey focused on six key dimensions: overall recognition, work environment, direct supervisors, team collaboration, learning and development,and compensation and bene?ts. A total of 8,900 valid responses were collected, accounting for 86% of all surveyed employees.
A total of 9,255 questionnaires were collected in thissatisfaction survey, After excluding invalid questionnaires,8,900 valid responses were ?nalized, representing 96% of thetotal collected questionnaires.
Survey Analysis
[Case] Series of Cultural and Sports Activities to Celebrate the New Year
Employee satisfaction survey
Valid questionnaires
Invalid questionnaires
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | ESG Governance | Products and Services | Production Operations | ||||||||
Employee's Rights and Bene?ts
| Community Engagement | Key Performance Indicators |
Anniversary celebration activities
Mid-Autumn family banquetSubsidies and prize distribution
Gathering & dining
Holiday excursions
ESG Report 2024 Lu Thai Textile Co., Ltd
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | ESG Governance | Products and Services | Production Operations | ||||||||
Employee's Rights and Bene?ts
| Community Engagement | Key Performance Indicators |
Community Engagement/Striving to Be an OutstandingCorporate CitizenIn the face of a complex and severe external environment, Lu Thai assesses the situation, makesunified decisions, and overcomes difficulties. The Company assists the national educationand community public welfare undertakings, and provides strong impetus for local economicdevelopment.UN Sustainable Development Goals
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | ESG Governance | Products and Services | Production Operations | Employee's Rights and Bene?ts | |||||||||
Community Engagement
Supporting education initiativesEducation is a long-term endeavor that bene?ts future generations. Over the years, Lu Thai has actively contributed to education supportprograms, investing a total of over RMB45 million in educational assistance. The Company has established cooperative education programswith more than 20 vocational and higher education institutions, demonstrating its strong commitment to social responsibility through concreteactions. Looking ahead, Lu Thai will continue to stay connected to its hometown, support the development of education, strengthen school-enterprise cooperation, and drive new achievements in educational collaboration.
On January 9, 2024, the unveiling ceremony for the "Peking University Ideological and Political Practice Course Education Base," jointlyestablished by the School of International Studies at Peking University and Lu Thai Textile Co., Ltd., was held at the Company.During the ceremony, Chairman Liu Zibin stated that the collaboration between Lu Thai and Peking University's School of InternationalStudies would foster mutual promotion and integration between ideological and political practice courses and corporate culture,generating new insights and opportunities. Lu Thai will take this initiative as an opportunity to further strengthen its partnership withPeking University, jointly explore new models and pathways for school-enterprise cooperation, and strive to provide high-qualityeducational resources and practical opportunities for outstanding students, achieving a win-win situation for the university, theenterprise, and the students.
crucial step forward in their school-enterprise collaboration and the beginning of a newchapter.According to the agreement, Lu Thai and Shandong Vocational Institute of Fashion Technologywill co-establish the "Lu Thai Textile & Apparel Industry Academy" to further develop textileand apparel programs, innovate talent cultivation models, and promote the integration ofeducation and industry. This initiative will lay a solid foundation for international developmentwhile providing strong support for the transformation, upgrading, and globalization of thetextile and apparel industry.
On June 20, 2024, the donation ceremony for the "Lu Thai Textile" Education Fund and the distribution of the 2024 "Lu Thai Textile"Scholarship were held at Shandong University of Technology. Chairman Liu Zibin represented the Company in donating the educationfund and personally awarded scholarships to the honored students.
On December 10, Lu Thai Group and Shandong Vocational Institute of Fashion Technology held a strategic cooperation agreementsigning ceremony and the unveiling ceremony for the jointly established "Lu Thai Textile & Apparel Industry Academy." During theceremony, Chairman Liu Zibin delivered a speech, emphasizing that this signing marks a milestone event for both parties, signifying acrucial step forward in their school-enterprise collaboration and the beginning of a new chapter.
【Case】Inauguration of the "Peking University Ideological and Political Practice Course Education Base"
【Case】Donation to the "Lu Thai Textile" Education Fund and 2024 "Lu Thai Textile" Scholarship Awards atShandong University of Technology
【Case】Strategic Cooperation Agreement Signing and Unveiling Ceremony of the "Lu Thai Textile & ApparelIndustry Academy" with Shandong Vocational College of Clothing Technology
Ceremony Scene
Unveiling Ceremony Scene
Welfare and charity actionsThe Company has always adhered to its original mission, actively participated in public welfare and charity activities, and continuouslydonated to public welfare and charity projects, to share the achievements of enterprise development with society through practical actions.
In the popular internet-famous city of Zibo, there is a well-known attraction—Lu Thai Cultural Park, located less than two kilometers from theformer residence of Pu Songling, the world-renowned master of short stories. Within the park lies a zoo, a public welfare facility operated by aprivate enterprise and open to the public free of charge all year round. Visitors can enjoy the zoo daily, much like visiting a familiar home.This private enterprise is Lu Thai Group, which invests over RMB3 million annually in maintaining the zoo. Today, Lu Thai Cultural Park hasbecome a popular ?tness and leisure destination for local residents, receiving widespread positive feedback from the community.
Chairman Liu Zibin Visiting and Honoring Elderly Residents
On July 6, 2024, Lu Thai Group held a donation ceremonyat Hongshan Primary School, contributing RMB100,000,bringing its cumulative donations to the school to RMB2.2million. At the ceremony, Chairman Liu Zibin expressed theCompany's hope that this donation would help improvethe school's teaching conditions, enhance educationquality, and create a better learning environment forstudents.
The Double Ninth Festival is set to show respect to the elderly.On the occasion of this festival, Chairman Liu Zibin, also the PartySecretary and President of the Company, visited centenariansacross the district, extending his holiday greetings and bestwishes.Since 2006, Chairman Liu Zibin and his family have been donatingto centenarians in the district for 19 consecutive years. Startingin 2022, the donation amount was increased from RMB1 millionto RMB 2million annually, bringing the total donation to RMB22million. This philanthropic e?ort has received widespreadrecognition and praise from various sectors of society.
【Case】RMB100,000 Donation to Hongshan Primary School, Accumulating a Total of RMB2.2 Million
【Case】Chairman Liu Zibin' s Visit to Centenarians on the Eve of the Double Ninth Festival
【Case】Lu Thai Cultural Park’s Free Public Zoo
Donation Ceremony Scene
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | ESG Governance | Products and Services | Production Operations | Employee's Rights and Bene?ts | Community Engagement | |||||||||||
Key Performance Indicators
Key Performance IndicatorsEconomic performance
Environmental performance
Air pollutant emissions
Waste discharge
68.0147.5152.38
16.90 14.2714.41
6.53.693.27
Indicator (Unit)
69.38
3.18
16.49
1.66
5.07
9.12
59.61
4.72
15.49
1.85
3.72
3.10
Operating revenue (RMB’00,000,000)Payments to contractors and serviceproviders(RMB’00,000,000)Total employee remuneration (including compensationand bene?ts) (RMB’00,000,000)Payments to capital providers (RMB’00,000,000)Payments to the government (RMB’00,000,000)Retained economic value (RMB’00,000,000)
202220232024
Indicator (Unit)202220232024
Data related to wastewater and sewage
Indicator (Unit)
Indicator (Unit)
COD (Chemical Oxygen Demand) in discharged wastewater(ton)Ammonia nitrogen content in discharged wastewater (ton)Industrial wastewater discharge (10,000 cubic meters)
Sulfur dioxide in emitted exhaust gas (ton)Nitrogen oxides in emitted exhaust gas (ton)
0.2
0.5
Hazardous waste generation (ton)Non-hazardous waste generation (sludge) (ton)
14,320
12,462
11,420
2022
2022
2023
2023
2024
2024
Human resources
Protection of employee rights and interestsIndicator (Unit)202220232024
Employment contract signing rate (%)Social insurance coverage (%)Signing rate of collective bargaining agreement (%)Number of female employees with parental leave duringthe year (person)Number of male employees with parental leave duringthe year (person)
Energy consumption density
Greenhouse gas emissionsIndicator (Unit)202220232024
Indicator (Unit)
79.7
13.5
Greenhouse Gas Emission Intensity (tCO
e/MillionRevenue)Total energy emission density (tons of standard coal permillion revenue)
51.1
13.1
Mobile sources emissions (tons of carbon dioxideequivalent)Stationary source emissions (tons of carbon dioxideequivalent)Category 1 emissions (tons of carbon dioxideequivalent)Consumption of purchased power (tons of carbondioxide equivalent)Consumption of purchased heat (tons of carbondioxide equivalent)Category 2 emissions (tons of carbon dioxideequivalent)Total (tons of carbon dioxide equivalent)
12,77113,579375,819145,314521,133534,712
10,52011,298331,445121,992453,437464,735
10,85911,630163,301127,643290,944302,574
202220232024
Indicator (Unit)202220232024Employee diversity
23,0289,736
13,292
Total number of incumbent employees (person)Total number of male employees (person)Proportion of male employees (%)Total number of female employees (person)Proportion of female Employees (%)
22,8509,317
13,533
23,98810,432
13,556
Employee diversity
60.91
2.61
16.07
3.32
3.55
1.97
49.9
12.9
Energy Conservation andEnvironmental Protection Products and Services
| Chairman's Statement | About the Company | ESG Governance | Products and Services | Production Operations | Employee's Rights and Bene?ts | Community Engagement | |||||||||||
Key Performance Indicators
Indicator (Unit)202220232024
9,866
13,162
1,4004,52317,105
9,671
13,179
1,3193,72617,805
9,814
14,174
1,5554,51717,916
Employee age
Total number of employees aged under 30 (person)Proportion of employees aged under 30 (%)Total number of employees aged above 30 (person)Proportion of employees aged above 31 (%)Education background of employees
Bachelor or above (person)Junior college (person)High school or below (person)NationalityChina (%)Foreign employees (%)
Employee training
Employee turnoverIndicator (Unit)202220232024
Indicator (Unit)202220232024
Total number of new employees (person)Employee turnover rate
Training participants (person)Average training hour (hour)Training coverage rate (%)
7,31321%
23,028
100%
3,33813%
22,850
100%
6,64820%
23,988
100%
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