About This Report

Reporting entity

The Reporting entity is “Lu Thai Textile Co. Ltd.” which can be referred to as “We” “the Company” “Lu Thai” “LuThai Company” “Lu Thai Textile” “Lu Thai Group” “Group” or “the Group” unless otherwise specified in the

main text.Scope of the report

The time span of this Report is mainly from January 1 to December 31 2025. In order to maintain the continuity and

comparability of information some content is beyond the aforesaid time span. The information involved is from

the internal data of the Company information submitted by subsidiaries and public information. Unless otherwise

specified all amounts in this Report are expressed in RMB.References

This report has been prepared in accordance with the China Social Compliance for Textile & Apparel Industry

(CSC9000T) and the Self-Regulatory Guidance No. 3 for Companies Listed on Shenzhen Stock Exchange—Preparation

of Sustainability Report and the Self-Regulatory Guidance No. 17 for Companies Listed on Shenzhen Stock Exchange—

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).Disclaimer

This 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 or

development 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 significantly differ from these

forward-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 17 2026 unless otherwise required by regulatory

authorities.Access

This report is available for viewing and download on the following websites: http://www.szse.cn (Shenzhen Stock

Exchange); 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 fax at

(+86) 533-5418805. We are committed to protecting your privacy and will not disclose your information to any third party

without prior consent.

1Contents

Energy Conservation and

Environmental Protection/ Community Engagement/Striving

Advancing Green and Low-Carbon to Be an Outstanding Corporate

Chairman's Statement 04 Development Citizen

About the Company Products and Services Environmental management indicators 62 Supporting education initiatives 102achievement

Building First-Class Products and 63 Welfare and charity actions 102Addressing climate change

Group profile 06 Services 68Resources management

Our culture 07 71

R&D and innovation Atmospheric pollutant managementDevelopment history 08 32 72

Performance review Quality control

Waste management Key Performance Indicators

103773

104

List of honors Customer services and maintenance 38

Biodiversity protection

12 Reader Feedback 108

Industry role 13

Employee's Rights and Benefits/

Production Operations Building a Harmonious

ESG Governance Responsible Production Operations Workplace Together

ESG governance structure 16

Production safety management 44 Respect and equality 76

ESG strategy 20

Fire safety management 47 Human rights and labor 81

Stakeholder engagement 22

Materiality assessment Chemical management 52

Talent management 84

23

Risk management Supply chain management 55 Benefits and care 9024

Responsible business conduct 25

3ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Dear 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 my

Chairman's Statement heartfelt gratitude for your long-term support for the Company!

The year 2025 full of struggle and achievements has drawn to a close. As a participant and driver of industry development

Lu Thai has consistently focused on high-quality development fully implementing the new development philosophy proactively

integrating into the new development pattern and adhering to the “customer first” principle. The Company promotes a spirit of

dedication deeply cultivates the domestic market expands overseas markets adjusts structures builds capacity and pushes forward

“cost reduction and efficiency enhancement” as well as “overall internationalization”. The Company has significantly advanced

“one improvement” “three guarantees” and “five breakthroughs” maintaining a healthy stable and continuous development

trajectory. All departments have made fruitful progress through concerted efforts.Throughout the year guided by our “Customer First” philosophy and anchored to our two core strategies we took proactive

action in a complex and ever-changing market environment. We deepened collaboration with strategic customers steadfastly

advanced our key account strategy accelerated the cultivation of potential strategic customers and the development of new customer

relationships and worked to increase the proportion of integrated fabric-and-apparel sales. We optimized our marketing structure

and built a globalized marketing footprint achieving efficient domestic and international coordination through a multi-channel sales

L i u Z i b i n network. We enhanced our strategic customer service framework by constructing an efficient service loop across three dimensions – strategic alignment demand fulfillment and service excellence – resulting in a multidimensional cross-regional global development

model and continuously strengthened market competitiveness.Luthai Textile Co.Ltd Throughout the year we remained committed to innovation-driven growth and technology enablement solidifying our core

Chairman President competitiveness through breakthrough achievements. Guided by market demand we deepened the transformation of our R&D

model and established a collaborative innovation ecosystem spanning the full value chain with a strong emphasis on the integration

of industry academia research and application. Focusing on the development of casual and green low-carbon products we drove

iterative product upgrades and built differentiated competitive advantages. By benchmarking against industry leaders integrating

premium resources and refining our R&D organizational framework and process mechanisms we established a modern R&D system

designed to lead future development support business operations and create value.Throughout the year we remained dedicated to lean management and the pursuit of quality and efficiency unlocking new

potential for development through meticulous execution. Across all product lines process optimization equipment upgrades

and system improvements drove simultaneous gains in production efficiency and product quality consolidating a green low-carbon

intelligent and efficient manufacturing foundation. Our leadership position in yarn-dyed fabrics was further strengthened while

the quality and delivery capabilities of yarn products knitted fabrics functional fabrics printed and dyed fabrics and new apparel

categories saw continued improvement.Throughout the year we remained focused on brand empowerment and value leadership elevating the Lu Thai brand through

integrated enterprise-wide collaboration. Anchored to our core objective of “consolidating the foundation for development”

we deepened product innovation by refining details around consumers’ scenario-specific needs to enhance market fit. We optimized

our omni-channel distribution model and improved online-offline coordination mechanisms — positioning shelf e-commerce as a

brand benchmark achieving sales breakthroughs on the Douyin channel upgrading in-store consumer experiences expanding service

boundaries through mini-programs and systematically rolling out our membership system. We strengthened our team managementframework clarified core responsibilities established standardized processes and built a three-dimensional growth model of“ productinnovation + omni-channel coordination + standardized operations” driving continuous appreciation in brand value.Throughout the year we maintained a focus on coordination efficiency and service enablement reinforcing our development

foundation through unity of purpose. Functional departments across the organization embraced the management philosophy of

“supporting operations enabling efficient coordination ensuring scientific and practical management and mitigating risks”. They

proactively aligned with business development priorities product innovation initiatives and customer needs with a strong culture of

initiative and role coverage taking root. The resulting high-efficiency organizational synergy provided a solid foundation for navigating

challenges. We upheld strict safety development standards deepened risk prevention awareness strengthened source-level controls

refined our end-to-end risk identification and mitigation framework and enhanced emergency response capabilities — all to safeguard

the Company’s stable and sound operations.Throughout the year we remained committed to culture-building and corporate responsibility channeling the spirit of

perseverance and innovation to generate momentum for progress. We continued to deepen the communication of our updated

corporate culture framework embedding core values across the full chain of business management. We established grassroots

cultural engagement platforms and introduced innovative communication channels and formats making cultural dissemination a

regular and all-encompassing endeavor. Through recognition programs technical skills competitions cultural and sports activities

and other initiatives the spirit of hard work was truly instilled across the organization. In pursuing stable operations we fulfilled our

social responsibilities; in embracing our responsibilities we demonstrated our corporate values — achieving a profound integration of

corporate culture and business development.As we step into 2026 let us carry our unwavering conviction into every step forward channel our energetic drive into everychallenge we take on and embed our practical commitment into every task we undertake. With the understanding that“ successneed not be of my own making” and the conviction that “success must have my contribution” let us move forward with

determination and steadfastness — writing our story through hard work forging brilliance through dedication and together

painting an ever more magnificent future for Lu Thai Group.April 17 2026

4 5ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

About the Company Our culture

Group profile Mission: Global Elegance Weaving Excellence Green Manufacturing Better Living

Focusing on the textile industry with fabric and apparel as our core business we provide healthy comfortable and reliable products

through international operations and green intelligent manufacturing serving customers worldwide and fulfilling people’s

Lu Thai Textile Co. Ltd. founded in 1987 is a global apparel solutions provider with premium fabrics as its core. The Company is one aspirations for a better life.of the world’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 finishing garment manufacturing and brand marketing. The Company has established 19 subsidiaries three offices and

over 40 production factories across countries including the United States Italy and Japan making it an integrated innovative and Vision: A Global Green Fashion Textile and Apparel Industry Group with Leading Fabric

international textile and apparel enterprise encompassing R&D design manufacturing and marketing services. Excellence

Currently the Company operates 700000 spindles and 102000 thread spindles with an annual production capacity of 220 million

meters of yarn-dyed fabric 90 million meters of dyed fabric 20 million meters of functional fabric 14000 tons of knitted fabric and We aim to be a world-class textile and apparel industry group with leading fabric development and manufacturing capabilities a

30 million garments. More than 60% of its products are exported to over 60 countries and regions including the United States the globally structured presence in marketing R&D design and production and renowned expertise in integrated fabric and apparel

European Union and Japan. The Company holds strategic partnerships with renowned domestic and international brands with its services. With outstanding product quality green fashion leading market share and strong brand influence we strive to set the

high- and mid-end yarn-dyed fabric exports accounting for more than 18% of the global market share. industry benchmark.Over the years Lu Thai has remained steadfast in its commitment to sustainable development guided by the principles of “green low-carbon and environmentally responsible” practices delivering healthy and eco-friendly textile products to the world. The Company

holds ISO 14001 Environmental Management System certification and OEKO-TEX Standard 100 certification. We established an Energy Values: Customer First Driven by Hard Work Pursuit of Excellence Integrity andManagement Center and leverage automation and information technology for scientific energy management conducting ongoing“ dualincrease and dual conservation” initiatives in line with our energy management policy of “energy saving consumption reduction Win-Win Cooperationemission reduction and efficiency enhancement”. We closely track industry advances in low-carbon and environmentally friendly

technologies prioritizing the use of natural and renewable textile raw materials; adhering to safe and healthy auxiliaries dyes and Customer First: Customers are the foundation of the Company’s survival. Meeting customer needs and ensuring customer

chemicals; and implementing low-carbon energy-saving programs across all production and business processes through the adoption satisfaction are our unwavering pursuits and the ultimate standards for evaluating our work. We stay attuned to changes in customerof new technologies processes equipment and energy sources. The Company’s research on “high-flux membrane treatment needs respond quickly innovate operations and provide high-quality products and services to meet customers’ personalized andand reuse technology for printing and dyeing wastewater and its industrialization” was awarded the Second Prize of the National diverse needs enhance their experience and achieve customer satisfaction.Science and Technology Progress Award. Multiple technological achievements — including half-bath dyeing and reclaimed water

reuse — have represented major breakthroughs in energy conservation emission reduction and green low-carbon practices within the Driven by Hard Work: To adapt to new circumstances the Company emphasizes the role of hardworking individuals while upholding

textile industry. The Company has been recognized as an “Advanced Enterprise in Energy Conservation” and an “Enterprise with a "people-oriented" approach providing a platform for them to realize their value and achieve rapid growth. Resources are directedOutstanding Contribution to Energy Conservation” and has been included on the national pilot list for the creation of “resource- toward those who strive ensuring their efforts are recognized so as to achieve common development of the strivers and enterprises.conserving and environmentally friendly” enterprises.Employees are encouraged to set ambitious goals challenge themselves persevere through difficulties prioritize dedication over

In addition to generating business value fostering employee growth creating employment and contributing to government tax personal comfort take on responsibilities where they are most needed and proactively address challenges to create value for the

revenues Lu Thai has embraced its social responsibilities and actively supported philanthropic causes. Over the years the Company

has donated more than RMB86 million and invested over RMB100 million in social welfare initiatives encompassing poverty alleviation Company and its customers.education support disaster relief elderly care and community development. The Company has been recognized with honors including Pursuit of Excellence: Only through continuous pursuit of excellence can we adapt to new circumstances overcome challenges

the “Outstanding Contribution to China’s Charitable Cause Award” and the “Outstanding Contribution to Fulfilling Social maintain competitiveness and drive personal and corporate development. There is no "best" only "better." In both conduct and workResponsibility Award” among others. we are never satisfied 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 and

to pursue excellence in every field and every task.Integrity and Win-Win Cooperation: Integrity is the foundation of survival and win-win cooperation is the path to development. In

partnerships we adhere to business ethics remain honest and trustworthy fulfill stakeholder needs and create value for all parties.By fostering stable trusting and mutually beneficial relationships we unite strengths to achieve greater success and share the fruits of

development.

6 7ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Development history

The Company was recognized as a "Five-starred Chinese Industrial

Enterprise in the Performance of Corporate Social Responsibilities".The "set of technologies and equipment for automatic digital

cheese dyeing" jointly developed based on the "industry-university-

research-application" cooperation was granted the First Prize of the

State Scientific and Technological Progress Award.Zibo No. 7 Cotton

Mill Lu Thai's The Company started The strategic cooperation project of

predecessor was The Lu Thai Textile

Lu Thai became A-share listed. its new 30-year voyage.Lu Thai Textile and Xiniu Intelligent

established. Fabric Museum A high-level forum on Manufacturing was initiated.Beijing Sichuang Apparels Co. and the Lu Thai the theme "Gather the

Lu Thai Textile Company was Ltd. was opened. Development Top Wisdom of the

opened formally. The Company was recognized as a Museum were Industry Plan Lu Thai's

National Yarn-dyed Fabric Product opened. The Lu Thai

The Company Future Development" The inauguration The Zichuan Urban Sewage R&D Base. Industrial Design was held to plan the ceremony for new

It passed the passed the Treatment Plant invested by the Summit was held.The Company

ISO14001 development vision for projects at Lu Thai successfully obtained ISO9001 Quality Company was put into operation.Environmental the next three decades. The construction of Group's overseas approval as a 2025 Management Management The Lu Thai Sports Square was the Functional Fabric production base was Lu Thai Milan Office The Company was Qilu Skilled Masters’ System System put into use. Intelligent Ecological held.Certification. was opened. recognized as a

Featured Workstation.Certification. Lu Thai Group was Park Project began."National Industrial Lu Thai Textile was

incorporated. Lu Thai School The Company was

Ranguang Textile Design Center" making The construction of listed on the 2023 of Textile and granted the "China

Co. Ltd. was The Company Apparel Shandong Quality Award". it the first enterprise to the Lu Thai knitting

Yicai Corporate Social

acquired. passed the win this honor in Zibo project began and Responsibility Ranking University of

SA8000 Social Technology was City. Phase I was put into

in China and won the

Responsibility production. "ESG Innovation Practice 1987 1998 founded. The water reuse project 1990 1995 Management

Award".was completed.System

Certification.

2021

20042017

20192023

1999

19932013

20152020

20002025

1988199720102024

20052006200820162018202220122014

2007 2009 A grand ceremony Lu Thai issued RMB1.4

Lu Thai Textile was held because Lu Thai (America) The unveiling billion of convertible

Company was Lu Thai became 2003 the Phase II project Textile Co. Ltd. was ceremony of bonds.restricted into a joint- B-share listed. opened. the Company's Lu Thai Textile released LuFeng Company of LuFeng Company

stock enterprise with "LUTHAI 1987" and " Yunjinchuan Limited was Limited was put into The Company academician

The Phase I project of

foreign investment Luthai Lite Collection" Clothing Co. Ltd. established. production.the Functional Fabric

and renamed Lu Thai Lu Thai was won the "Global

workstation was

was acquired. held in the West

Intelligent Ecological online brand.Textile Co. Ltd. recognized as a The Company Performance Park was put into

"Stated-accredited won the title Excellence Award".District Industrial

Park. production.Beijing Lu Thai Enterprise "China Advanced The Company passed The Company The project of colored Lu Thai Textile Company a Shirt Co. Ltd. was Technology Center" Enterprise with was granted

The Company

spun yarns was put

China-Thailand joint venture the OHSAS18001 established. by five departments an Excellent Occupational Health the third "China

successfully

including Performance Model passed the on- into production.The unveiling ceremony of the

was incorporated. and Safety Management Grand Awards for "Zichuan District Aesthetic the National (2012)". Industry". site accreditation System Certification. Education Practice Base" at Lu Thai Development and of demonstration

Reform Commission enterprises in the Lu Thai's operating

Vocational Training School was

Zibo Luqun Textile Co. held.Ltd. was established. and the Ministry The Lu Thai Textile and Apparel Engineering Research textile industry

revenue exceeded

of Science and Institute was founded. for energy-saving RMB10 billion a new Lu Thai Textile was included on

Technology. start of the new 30- the list of the First China Industry The Company was granted the Second Prize of the State and emission reduction year voyage. Carbon Peaking "Leaders" Scientific and Technological Progress Award for its key (enterprises).processing technology of ultra-high count pure cotton technology

fabrics and its industrialization high-flux films for printing application.and dyeing wastewater and recycling technology.

8 9ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Performance review

Net profit attributable to shareholders of Total payments to employees including salaries bonuses allowances benefits housing

the Company provident fund and social insurance

Economic 594 Million RMB 1590 Million RMB

performance

Taxes contributed to the state Social contribution value per share Cash dividends distributed over the past three years

450 Million RMB 3.46 RMB/share 515 Million RMB

Proportion of R&D personnel to Donations to society and

total employees government

12.7 % 5727000 RMB

Social

performance

R&D investment and its percentage of Investment in education support

revenue

3.26 % 1117600 RMB

Own brands sales

Own brands: LT·GRFF Lu Thai Lu Thai 1987 Luthai Lite Collection NARCISU and so on.

8268200 RMB

10 11ESG Report 2025

About the Company Lu Thai Textile Co. Ltd

List of honors

One of the first enterprises

2023-2024 “China’s Great nationwide to be certified asTextile Craftsman” and“ Most CQC Partner in Progress — a “5A Enterprise in CorporateBeautiful Textile Worker” Zhiyuan AwardCulture Development andManagement”

China National Textile & Apparel Council China Quality Certification Center (CQC) CQC Partner in Progress — Zhiyuan Award Outstanding Contribution to High-

China Finance Trade Light Industry China Corporate Culture Institute Quality Development of Shandong’s Textile and Tobacco Trade Union and the Private Economy

Women’s Workers Department of the All-

China Federation of Trade Unions

2024 China Textile and Apparel “Continuous Innovation Unit”

Brand Competitiveness “AAA Credit Enterprise” in the Top Ten Categories of

Advantage Enterprise Textile Innovation Products

China Textile Information Center

China National Textile and Apparel Council China Enterprise Confederation China

Entrepreneurs Association

Key Technologies and

Industrialization of Structural Design Key Technologies and

and Preparation for Thermal and Industrialization of Efficient Green

Shandong Province May

Moisture Comfort Functional Textiles and Fashionable Online Dyeing – First

Fourth Red Flag Youth League

– Second Prize for Scientific and Prize for Scientific and Technological Committee

Technological Progress Progress “AAA Credit Enterprise” Brand value: 12.826 billion yuanShandong Provincial Committee of the

China National Textile and Apparel Council China National Textile and Apparel Council Youth League

2023 “Digital Transformation 2023 “Top 100 Most Attractiveand Innovation Unit” in Private Enterprises for Silver Award in the Fashion ProductUniversity Graduates” in Category at the 5th “Governor’s Shandong Province’s textile Cup” Industrial Design Competition Industry role

and apparel industry Shandong Province

Shandong Textile and Apparel Association Human Resources and Social Security Department of Industry and Information

Department of Shandong Province Technology of Shandong Province

Industry Organizations Role of the Company

China National Textile and Apparel Council The 5th Vice Chairman Organization Specially Invited by the CouncilOutstanding Contribution to 2024 “Outstanding Advanced Collective in theHigh-Quality Development of Contribution Enterprise for “Five Zibo” Development China Chamber of Commerce for Import and Export of Textiles The 7th Vice Chairman Organization Specially Invited by the CouncilShandong’s Private Economy Stable Economic Growth” Initiative

Shandong Development and Reform Zibo Municipal People’s Government Zibo Municipal People’s Government China Dyeing and Printing Association The 7th Vice Chairman Organization Specially Invited by the Council

Commission Department of Industry and

Information Technology of Shandong

Province China National Garment Association The 8th Vice Chairman Organization of the Council

China Textile Engineering Society The 27th Standing Director Organization of the Council

China Cotton Textile Association The 6th Vice Chairman Organization of the Council

China Textile Enterprise Association The 11th Standing Director Organization of the Council

12 13ESG Governance

Lu Thai Textile continues to enhance its ESG governance mechanism optimizing its

governance structure to ensure scientific and effective decision-making. The Company

actively implements environmental social and governance initiatives integrating

ESG systematically into daily operations to comprehensively support high-quality

corporate operations and achieve sustainable and healthy development.ESG Report 2025

ESG Governance Lu Thai Textile Co. Ltd

Organizational Chart

ESG governance structure

The he Board of Directors is responsible for reviewing the Group’s

Decision- Board of overall ESG strategy and reports as well as assuming ultimate. Board of

making Level Directors responsibility for the Group’s overall direction strategy objectives shareholders

and performance in sustainable development.Formulating the Group’s ESG objectives strategy and work

plans and submitting them to the Board of Directors for approval. Board of Directors

Identifying monitoring and reviewing potential ESG issues

risks and opportunities that may impact the Group’s business

ESG Steering operations and submitting them to the Board of Directors for

Management Group approval.Level President Prioritizing relevant ESG issues risks and opportunities analyzing

Special Committees of

Department their potential impact on business operations and identifying key the Board of Directors

heads ESG 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 Steering

Group. President

Senior

Management

Collecting and organizing materials for ESG reports.Providing ESG feedback and recommendations within their

Execution All respective departments.Level departments Implementing sustainable development policies and initiatives

assigned to them.Integrating and evaluating ESG risks or opportunities identified

within their operations.Governance structure

Wholly-owned Majority-owned Branch companies Functional

subsidiaries subsidiaries and offices Production l ines departments

The Company continuously improves the basic governance structure composed of the General Meeting of Shareholders the Board of Directors

and the Senior Management whose rights and responsibilities are defined in accordance with the Company Law the Securities Law the Code

of Corporate Governance for Listed Companies in China the Listing Rules of Shenzhen Stock Exchange and other relevant laws regulations and

regulatory documents in order to ensure efficient 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 Board

of Directors. The Board of Directors has established the Strategy Committee the Audit Committee the Nomination Committee and the

Remuneration and Appraisal Committee. These special committees make full use of their expertise to make scientific decisions on the

Company’s development issues.

16 17ESG Report 2025

ESG Governance Lu Thai Textile Co. Ltd

Committee Name Main Responsibilities Functioning of Committee

The Board of Directors comprises 12 directors (including four independent directors) of whom three are female directors and three are foreign

nationals. In 2025 the Board convened 12 meetings with a director attendance rate of 100%. During the reporting period a total of 51 agenda

items were reviewed and approved covering matters such as related-party transactions Board renewal policy revisions periodic reports profit

distribution and the ESG report.Chairman: Liu Zibin

Conduct feasible study on the Company's

long-term strategic development plans and Members: Xu Zhinan Liu Deming Xu

major investment decisions determine the Jianlv Zheng Huisheng Zhang Zhanqi

Strategy Company's development plans improve Zhang Keming Du Lixin Zhu Beina Yu

Committee investment decision-making process enhance Mingtao Quan Yuhua Wei Jian

scientific decision-making and improve the

quality and effectiveness of major investment In 2025 the Committee held one

decision. meeting with a full attendance rate of the 25% 25%

members.Male directors Chinese directors

75% Female directors 75% Foreign directors

Chairman: Zhu Beina

Study and formulate the criteria and

procedures for selection of the Company's Members: Liu Zibin Yu Mingtao Quan

Nomination directors and senior management optimize Yuhua Wei Jian

Committee the structures of the Board of Directors and

the management and improve corporate In 2025 the Committee held three

governance structure. meetings with a full attendance rate of

the members. Name of Director Gender Age Position(s) Date of Service Commencement

Liu Zibin Male 61 Chairman and President June 6 2007

Xu Zhinan Male 96 Vice Chairman May 6 2004

Liu Deming Male 36 Director May 12 2017

Formulate and review remuneration policies Chairman: Zhu Beina

and plans formulate and implement Xu Jianlv Female 51 Director June 9 2022

Compensation assessment and evaluation criteria improve

Members: Liu Zibin Yu Mingtao Quan

Yuhua Wei Jian

Committee the assessment and evaluation system

for the Company's directors and senior In 2025 the Committee held one Zheng Huisheng Male 38 Director June 9 2022

management and formulate scientific meeting with a full attendance rate of the

effective remuneration management policies. members. Zhang Zhanqi Male 54 Director and Vice President June 9 2022

Zhang Keming Male 58 Director and Chief Accountant June 9 2022

Du Lixin Male 51 Director and Chief Engineer June 9 2022

Zhu Beina Female 68 Independent Director June 9 2025

Responsible for the communication Chairman: Yu Mingtao

supervision and review of the Company's Members: Liu Deming Wei Jian Yu Mingtao Male 47 Independent Director May 7 2025internal and external audits strengthen the

Audit Committee Board's effective oversight of the management In 2025 the Committee held six meetings Quan Yuhua Female 70 Independent Director June 9 2022

enhance internal control capabilities and with a full attendance rate of the

improve internal control policies. members. Wei Jian Male 57 Independent Director June 9 2025

Board development

Lu Thai Textile places great importance on board development continuously optimizing its structure and functions. The Company ensures the

effective operation of board committees emphasizes the independence and diversity of board composition and actively conducts training for

board members and management. The Company also assigns responsibilities to directors based on their professional backgrounds and work

experience ensuring efficient operations and sound decision-making by the Board—thereby effectively enhancing the Company’s overall

governance standards and operational efficiency.

18 19ESG Report 2025

ESG Governance Lu Thai Textile Co. Ltd

A company’s sustainable development

ESG strategy management shows the responsibility and respect of the company for its customers Decent Work

and Economic Promote sustained inclusive and sustainable economic growth employees products and future. For

Growth full and productive employment and decent work for all. many years Lu Thai has kept pace with

By performing the digital and intelligent transformation of international and domestic development

production lines Luthai has reduced labour intensity and raised trends for years. By vigorously responding to

resource utilisation efficiency. national and industry policies Continental

Group has demonstrated its sustainable

development through actions.Build resilient infrastructure promote inclusive and sustainable

No Poverty End poverty in all its forms everywhere. Industry Innovation and industrialisation and foster innovation. 2022-2026 ESG Strategic Goal: Achieve an

The Company has actively paid taxes to the governments Infrastructure industry-leading level of green low-carbon

of countries where it operates to promote the economic In 2025 Lu Thai invested RMB 192 million in research funds in total. environmentally friendly and sustainable

development of the surrounding communities. Additionally it has been granted 578 patents in total including eight software copyrights. Lu Thai has organized or participated in the development.formulation of 84 national and industry standards.Zero Hunger End hunger achieve food security and improved

nutrition and promote sustainable agriculture. Reduced Inequality Reduce inequality within and among countries. Peace and

The Company has implemented the policy of local Justice Strong

employment and provided regionally competitive The Company has established plants in overseas developing Institutions

remuneration and benefits. countries and actively created job opportunities to develop local economies.Ensure healthy lives and promote

well-being for all at all ages. Sustainable

Good Health Provide a comfortable and safe working environment ensuring Cities and Make cities and human settlements inclusive

Promote peaceful and inclusive societies for

safe resilient and sustainable. sustainable development provide access to justice and Well-being employee safety and health. During the pandemic no cluster Communities for all and build effective accountable and inclusive

infections occurred among Company employees. Diverse assistance activities have been conducted in institutions at all levels.The Company properly prevented and treated occupational diseases. economically backward villages. Luthai Textile has purchased Explicitly incorporated health safety and environmental

Besides the Company has established and improved employees’ agricultural products from local farmers and donated daily management requirements for suppliers into tendering

profiles of occupational health and organized annual check-ups to necessities to residents to improve their living conditions. conditions indirectly encouraging suppliers and contractors

protect the physical and mental health of employees. to continuously strengthen their safety production and

environmental protection practices.Ensure inclusive and equitable quality education and Ensure sustainable consumption and

promote lifelong opportunities for all. production patterns.Quality Responsible Sustainable development reports have been released regularly

Education The Company has improved its employee education and Consumption and ESG-related information is actively disclosed to enhance Partnerships training mechanism. In 2025 23593 employees participated and Production transparency. for the Goals

in vocational training achieving a 100% vocational training

coverage rate. Meanwhile the Company has updated the requirements

for suppliers and implemented stricter standards of duty

The Company organizes activities to support students every performance for suppliers. It has worked with suppliers and

fall by providing employees’ children with scholarships. It contractors to actively perform duties to improve the industrial

also donates educational funds to society to cultivate textile chain environment and drive social responsibility practice.talent.Achieve gender equality and empower all

Gender women and girls. Climate Strengthen the means of implementation and

Equality Action Take urgent action to combat revitalise the Global Partnership for Sustainable

The principle of gender equality has been observed. The Labor climate change and its impacts. Development.Union has earnestly protected female employee rights and interestsand improved their competence. Lu Thai Textile has responded to the 2030 “carbon The Company has actively participated in industryAn equal remuneration system has been developed to ensure equal peak” and 2060 “carbon neutrality” goals by actively organizations and initiatives joined multiple industry

pay for equal work between male and female employees. carrying out climate action plans. associations earnestly conducted industry exchanges and promoted industry development.Clean Water Life below

and Sanitation Ensure availability and sustainable management of Water Conserve and sustainably use the oceans seas and

water and sanitation for all. marine resources for sustainable development.Production departments have been encouraged to propose

new measures to save water. The Company has increased The Company has proposed new processes reduced the COD value

investment in reclaimed water reuse projects further of printing and dyeing wastewater and protected water resources

promoting recycled use of water resources and providing a and aquatic animals.long-term guarantee for social development.Affordable and

Clean Energy Ensure access to affordable reliable Life on Protect restore and promote sustainable use of terrestrial ecosystems sustainably

sustainable and modern energy for all. Land manage forests combat desertification and halt and reverse land degradation and

halt biodiversity loss.The Company has conducted the project of rooftop photovoltaic power

generation to contribute to the energy transformation of enterprises and society. Prior to the launch of a new project Continental Group has entrusted environmental assessment agencies to conduct

environmental assessment including the assessment of the influence on local biodiversity.In the meantime it earnestly performs greening governance holds activities on Arbor Day and enhances employees’

awareness of environmental protection.

20 21ESG Report 2025

ESG Governance Lu Thai Textile Co. Ltd

Stakeholder engagement We place great importance on maintaining effective communication with internal and external stakeholders. By establishing a regular

communication mechanism we promptly understand stakeholders’ concerns and continuously optimize communication channels to actively

Means of respond to their interests. This approach ensures the orderly progress of the Company’s sustainable development initiatives.Stakeholders Issues of Concern Communication Actions of Lu Thai Textile

Operation in Strictly complying with laws and Materiality assessment

Compliance Supervision and regulations

Safe and Green inspection Actively responding to environmental

Production Visits calls and formulating action plans As part of our stakeholder engagement policy we conduct periodic ESG materiality assessments. This year with the assistance of external

Fulfillment of Social Material providing Helping the poor and improving experts we carried out a materiality analysis in accordance with the guidance provided by the Self-Regulatory Guidance No. 3 for Companies

Government Responsibilities people’s livelihoods Listed on Shenzhen Stock Exchange—Preparation of Sustainability Report issued by the Shenzhen Stock Exchange. Through this process we identified material issues that significantly impact both the Company and stakeholders determining the most critical issues for our business

and stakeholders while providing insights for the Group’s ESG reporting and strategy.Customer visits Improving the product quality management

Product Quality Customer service system

Responsible Marketing hotline Improving the customer relationship

Integrity Opening business management system

Respecting Customers' operations Conducting the customer satisfaction survey

Opinions

Customers Satisfaction survey Visiting customers regularly Materiality Assessment Process

Corporate Governance 1.ESG Issue Library Creation

and Profitability Board of shareholders Compliant operations openness and

Honest and Compliant On-site survey transparency

Operations Telephone consulting Safeguarding the legitimate rights and

Referring to the materiality issue distribution guidance from the Self-Regulatory Guidance No. 3 for Companies Listed on Shenzhen

Interaction Easy of the interests of shareholders by laws Stock Exchange—Preparation of Sustainability Report and Self-Regulatory Guidance No. 17 for Companies Listed on Shenzhen Stock Competitive Edge

Shareholders and Shenzhen Stock Exchange Exchange—Sustainability Report (Trial) we established the 2025 ESG issue library after a comprehensive evaluation considering the Company’s overall business development in 2025 and best ESG management practices within the industry.investors

Require suppliers to sign a quality

Product Quality statement

Product Safety and Supplier auditsOn-site Require chemical product suppliers

2.Formulation and Implementation of Stakeholder Engagement Plan

Environmental

Compliance communication

to provide relevant qualification

By closely focusing on trends in the textile industry and broader socio-economic developments we engaged with key stakeholders during

Corporate Compliance Telephone and email

certificates and sign an environmental

communication compliance statement the Reporting Period through communication and surveys to gather their opinions and suggestions.Suppliers Operations Conduct regular on-site supplier audits and communications

Improving the remuneration 3.Quantitative Assessment of ESG Material Issues

Respecting Human Rights management system

Remuneration and

Benefits The Labor Union and the

Improving employee cultivation and Internal and external stakeholders were invited to evaluate the materiality of various ESG issues and a materiality matrix was developed.employee representative promotion mechanismsCareer Development The Company invited stakeholders across all categories to complete a questionnaire survey rating the importance of each of Lu Thai’s assembly Diverse communication channelsChannels Helping for employees in need 2025 ESG topics on a scale of 1 to 5 with higher scores indicating greater importance. After the survey the Company analyzed the

Employees Health and Safe

Employee complaint

Establish a comprehensive complaint feedback and assessed each issue’s materiality based on two dimensions: “materiality to corporate development” and “materialityProduction Satisfaction survey mechanism and channels to stakeholders”. This analysis 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.Exchange visits among Continuously improving supplier

senior management management procedures and strengthening

Green and Low-carbon personnel the control of operational risks

Development Exchange and cooperation Strengthening contract management and

Honest and Compliant standardizing credible procurement 4.Review and Approval of the Materiality Assessment Reportin experience and

Operations technology Sharing experience and technology and

Value chain partners Daily communication exchanging needed goods The materiality assessment report was submitted to the management for review and approval before the results were published.Exchange through industry Building industry-university-research

conferences platforms

A Harmonious

Community Supervision by the Helping the poor and joining public

Relationship masses welfare activities

Contributing to the Visiting communities Community donation and landscaping

Communities and the Community Economy Promoting employment and developing local suppliers

public

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ESG Governance Lu Thai Textile Co. Ltd

Lu Thai Textile 2025 ESG Materiality Matrix

Board Level

Audit Committee

Third Line of Defense

Audit Department

Responsible for supervisory functions conducting audits and investigations to implement a closed-loop risk

management system. It analyzes and independently assesses whether the Company’s risk management measures

are adequate and effective.Second Line of Defense

16

Risk Management Departments (e.g. Finance Management Department Corporate Management

Department)

Design implement and oversee risk management practices based on the nature of risks and the Company's

risk tolerance to ensure the Company establishes a suitable and effective risk management system.First Line of Defense

Through this assessment we identified 22 material issues of stakeholder concern in 2025.Environment (E) Corresponding Society (S) Corresponding Factories and functional departments are responsible for executing fundamental risk management processes

Chapter Chapter and control measures promptly identifying managing and controlling related risk control systems.

01 Climate Change Response Chapter 5 09 Information Security and Privacy Protection Chapter 2

02 Pollutant Emissions Chapter 5 10 Technology Ethics Chapter 2

03 Waste Management Chapter 5 11 Innovation-Driven Development Chapter 3

04 Ecosystem and Biodiversity Protection Chapter 5 12 Product and Services Chapter 3

05 Environmental Compliance Management Chapter 5 13 Supply Chain Security Chapter 4 Responsible business conduct

06 Energy Utilization Chapter 5 14 Workplace Safety Chapter 4

07 Water Resource Utilization Chapter 5 15 Chemical Safety Chapter 4 Compliance management

08 Circular Economy Chapter 5 16 Fair Treatment of SMEs Chapter 4

17 Employees Chapter 6

Adhering to operations with integrity law-abiding principles and compliance Lu Thai Textile has always emphasized that integrity and

18 Social Contribution Chapter 7 law-abiding principles are the foundation of the Company and always abode by the values of “integrity and win-win situation”. Under

the philosophy of operations with integrity the Company has continued to strengthen the compliance management system improve

Governance (G) compliance management policies optimize auditing procedures and implement internal control in order to safeguard healthy and sustainable Corresponding Chapter development.

19 Anti-Bribery and Anti-Corruption Chapter 2

20 Anti-Unfair Competition Chapter 2 Compliance management system

21 Stakeholder Engagement Chapter 2、3、4

Following the philosophy of operations with integrity the Company has continued to improve the compliance management system

22 Due Diligence Chapter 4 strengthened the effect of internal auditing and established the Self-assessment Control Matrix based on the procedure documents in order to

determine the assessment scope and priorities. With all procedures assessed the on-site testing has identified deficiencies made suggestions

for improvement and timely produced the Internal Control Self-assessment Report to ensure effective internal control assessment.Risk management To promote normative and institutionalized business operations the Company considering its realities has formulated the Regulations on

Internal Auditing in accordance with the Internal Auditing Standards and the Basic Norms for Corporate Internal Control promulgated by the

Risk management empowers the stable operation of enterprises.In accordance with the Code of Corporate Governance for Listed Companies Ministry of Finance and the relevant laws and regulations. By doing so it has effectively improved the overall management and risk prevention

and other applicable regulations as well as the Company’s Articles of Association the Company systematically identifies internal and external capabilities.risks and formulates corresponding response measures. 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 management framework to enhance the rationality standardization and effectiveness of its risk management

practices.

24 25ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Internal audit Business ethics

The Company attaches great importance to business ethics and strictly complies with laws and regulations of countries where it operates as well

The Company values the implementation of internal control. as the industry recognized code of conduct. It has established a Code of Ethics Control Procedure and it advocates honesty and trustworthiness

Indicator (Unit) 2023 2024 2025 Following its 18 guidelines for internal control the Company fair competition anti-corruption openness and transparency and reinforces the oversight and guidance of partners’ business conduct

comprehensively tested and assessed the system development committed to creating an honest fair clean and harmonious operating environment.Internal control and implementation of the internal control of the Head Office

audit coverage (%) 82.15 80.45 85.86 and holding subsidiaries identified design and operational

deficiencies and formulated and implemented targeted Anti-corruption and bribery

remediation measures for each type of deficiency. In 2025 the

Note: Internal control assessment coverage is the ratio of the total Company assessed the internal control of eight subsidiaries

assets of the assessed entities to the Company’s total assets and issued the internal control assessment matrices.The Company strictly complies with applicable anti-corruption and anti-bribery laws

and regulations in all jurisdictions in which it operates and continuously strengthens

its anti-corruption supervision and oversight mechanisms to ensure compliant and

clean operations. In 2025 the Company signed a total of 1000 Anti-Commercial Bribery

Commitment agreements with key suppliers. As of December 31 2025 no business

relationships had been terminated due to supplier violations of these commitments.Targets Indicators 2023 2024 2025

The Company conducts audits by relevant policies every year. In the first half of

Senior leaders Quantity of non-conformance events 0 0 0 2025 special audits were conducted covering the sales operations of the Global

Marketing Department the Apparel Marketing Department and the Brand Promotion

Middle-level leaders Quantity of non-conformance events 0 0 0 Department as well as product line procurement and outsourced processing activities and related functions and ongoing compliance with AEO (Authorized Economic Operator) certification

Employees Quantity of non-conformance events 0 0 0 standards. Audit areas included credit insurance management handling of excess

inventory sales expense management procurement vendor selection price inquiry

External audit results Standard unqualified audit Standard unqualified audit Standard unqualified audit Shareholders and comparison contract performance management and AEO compliance. In the opinions opinions opinions second half of 2025 internal control evaluations were conducted across Lu Thai Textile

Suppliers Quantity of non-conformance events

and its subsidiaries covering the Company’s major business activities and high-risk

0 0 0 areas. No instances of corruption or fraud were identified in any of the above audits.

Code of conduct for employees

Information disclosure

The Company continues to strengthen employee behavior management by strictly requiring employees to act in accordance with laws guiding

and supervising employees to abide by rules and regulations and operating in compliance. Through the promotion of corporate culture

The Company has established and improved the information disclosure mechanism which publicity and education of laws inspection and supervision of employee behaviors and other measures the Company urges employees to raise

received positive feedback from investors: awareness of ethical standards and improve their professional standards to ensure the implementation of integrity values and ethical behavior

and thereby promote the healthy development of various business.As at the end of 2025 the Company had been rated A for eight consecutive years in the information disclosure assessment on the

listed companies on the Mainboard by the Shenzhen Stock Exchange. Complaint reporting mechanism

The Company releases its performance results as well as major and temporary announcements to investors of A- and B- shares The Company continuously improves its complaint and whistleblowing mechanism by providing multiple reporting channels including mail

via Internet media (cninfo.com) designated by the China Securities Regulatory Commission as well as Securities Times Shanghai telephone email and in-person reports. Customers employees suppliers business partners and all individuals with business dealings with the

Securities News China Securities Journal and Ta Kung Pao. Group 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 third

The Company responds in real time to investors’ messages and questions via the “Interaction Easy” of the Shenzhen Stock party. Retaliation against whistleblowers is strictly prohibited.Exchange. In 2025 a total of 166 questions were replied with a response rate of 100%. We will complete the investigation and issue a written investigation report within 30 business days and continue to track the implementation of

subsequent follow-up actions. For acts in violation of regulations that disclose information about whistleblowers the Company will depending

on the severity of the circumstances impose disciplinary actions such as transfer from the position salary reduction and demotion; If the act is

suspected of constituting a violation of laws or a crime it will be transferred to the judicial authorities for handling in accordance with the law.

26 27ESG Report 2025

ESG Governance Lu Thai Textile Co. Ltd

Information security and privacy protection

Information security protection measures

Information security

Server security

We configured security policies for system firewalls and installed server-side security protection

The Company proactively implements a comprehensive range of measures to continuously maintain and improve information security across systems.five dimensions: computer security network security data security hardware device security and operational environment security. Through

the deployment of firewalls intrusion prevention systems vulnerability scanning systems bastion hosts and other protective measures the Computer safety

Company strives to minimize the probability of information security incidents such as data breaches.We deployed antivirus software and endpoint security protection systems in a unified manner. By extracting

information from firewall intrusion prevention systems we identified malicious attacks trojans and other

threats and carried out detection and removal of malicious network addresses.The Company has established the Information System Operation Management Cybersecurity

Process the Information Security Management Regulations and the IT

Infrastructure Operation Management Process to further enhance data security We were equipped with security devices and measures such as firewalls intrusion prevention

emergency response mechanisms and procedures. In the event of a suspected systems and internet behavior management.data breach the operations and maintenance team will immediately verify the

incident determine the scope of the breach and the affected systems promptly Hardware equipment

report to the leadership taskforce suspend relevant data access permissions

and simultaneously notify affected users— fulfilling its information notification

obligations in strict accordance with applicable laws and regulations. We conducted daily inspections promptly reported and followed up on identified issues. An environmental monitoring system was in place to

monitor in real time the status of UPS power supply indoor temperature and humidity lighting fire protection equipment fresh air systems and

other physical environmental conditions. We developed emergency response plans and drill schedules proactively organized emergency drills

The operations and maintenance team will conduct security assessments of all and promptly improved issues identified during the process.affected systems data and devices performing root cause analysis through log

investigation and properly preserving relevant evidence. Timely feedback on the

outcome of remediation actions will be provided to affected users and restoration Data security

of affected systems and devices will be completed. Security reinforcement and

optimization upgrades will be implemented to address identified vulnerabilities Business data in the data center was backed up across different machines and locations. The

and prevent recurrence of similar security incidents. operating system adopted virtual machine disaster recovery backup and equipment adopted

geo-redundant active-active deployment and other security measures. Regular recovery

verification tests were conducted to ensure data availability reliability and recoverability.During the reporting period the Group did not experience any data breach incidents nor were there any legal proceedings related to information

or data security involving the Group or its employees.Deploy a bastion host management system to enforce access control

and code approval for backend administrators of information

systems while logging and recording the operational behavior of

information management personnel in the backend.The Company regularly provided employees with special information security training and continuously promoted and popularized information

security knowledge across the Group thereby continuously enhancing employees’ awareness of information security and privacy protection.Privacy protection

The Company and its affiliates are required to strictly comply with the Data Security Law of the People’s Republic of China and the Personal

Information Protection Law of the People’s Republic of China. Confidentiality agreements must be signed with stakeholders regarding sensitive

information. Unless required by laws and regulations or approved by the customer such information will not be disclosed to any third party in

any form.

28 29ESG Report 2025

ESG Governance Lu Thai Textile Co. Ltd

Products and Services /

Building First-Class Products and Services

In the face of a complex and rapidly evolving market environment the Company gives full play

to its marketing leadership role mobilizing all departments to collaborate efficiently and work

in close coordination. Proactively engaging with the market monitoring market dynamics and

gaining insight into customer needs the Company conducts targeted R&D and design activities.Guided by its new industrial positioning of “technology fashion and green” and with the

goal of becoming “a globalized apparel solutions provider with leading fabrics at its core” the

Company continuously enhances the quality of its products and services.UN Sustainable Development Goals

30 31Energy Conservation and ESG Report 2025 Chairman's Statement About the Company ESG Governance Products and Services Production Operations Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

R&D and innovation Industry-university-research cooperation

Adhering to the “Four-in-One” innovation philosophy which “lets the enterprise play the major role adopts the customer-oriented approachis underpinned by research institutes and universities and emphasizes the alliance with strategic customers and major suppliers” the The Company has established deep collaboration with multiple universities and research institutes spanning foundational talent training to core

Company has formed a three-level R&D innovation team led by Lu Thai Engineering Technological Institute focusing on breaking through the technology R&D progressively building a well-rounded collaborative innovation mechanism encompassing industry academia and research. As

professional expertise for production lines and mainly comprising the quality control teams of the workshops and groups of the plants. By at the end of 2025 the Company established a long-term stable partnership with universities such as Donghua University Hong Kong Polytechnic

doing so it has continuously enhanced the internal innovation mechanism developed the scientific and technological innovation platforms University Jiangnan University Qingdao University and Wuhan Textile University. Through R&D cooperation with leading institutes in new

deepened the industry-university-research cooperation and laid a solid foundation for the Company’s innovation cause. technologies materials and products the Company has improved its R&D capability.Investment in technological innovation The situation of school-enterprise cooperation

By the end of 2025 the Company had undertaken

eight national-level scientific research and Technology awards Technology plan Donghua University

innovation platforms and five provincial-level 60 national and provincial-level Undertook 20 science andplatforms. It had received a total of 60 national Science and Technology Progress technology projects at the Lu Thai and Donghua University jointly established the “Shandong Provincial Key Laboratory for High-End Intelligentand provincial-level Science and Technology Awards provincial level or above Manufacturing of Fibers and Products”. Driven by technology development and innovation and closely aligned with industry

Progress Awards including 13 national and

One First Prize of the National needs and application-oriented goals the laboratory is dedicated to building a high-level R&D platform with regional radiating provincial-level first prizes one national first Science and Technology Progress influence.prize for science and technology progress Award Technology plan

and three national second prizes for science

Three Second Prizes of the 578 patents granteda n d te c h n o l o g y p ro g re s s . T h e C o m pa n y

National Science and Technology Wuhan Textile Universityundertook 20 science and technology projects Led or participated in theat the provincial level or above and obtained Progress Award formulation of 84 national and In 2025 the joint research project between Lu Thai and Wuhan Textile University on “Basalt Fiber Core-Spun Yarn Spinning

578 authorized patents and eight software 13 First Prizes of Provincial and industry standards Technology and Its Universal Applications” was awarded the First Prize of the Science and Technology Progress Award by the

copyrights. Additionally it led or participated Ministerial Science and Technology China National Textile and Apparel Council.in the formulation of 84 national and industry Progress Awards

standards.Qingdao University

Developing scientific and technological R&D platforms The Company signed a strategic collaboration agreement with Qingdao University in 2016 to carry out in-depth cooperation with

the university in scientific research talent cultivation and social services thereby contributing to socioeconomic and technological

development.The Company highlights the building and development of scientific and technological innovation platforms establishing core technologyplatforms in the major phrases of research design and test to improve core technologies in the whole process. In terms of scientific research Qingdao University and the Company have jointly established the “Lu Thai Group--QingdaoUniversity Research Center” and the “National Collaborative Innovation Center of Key Technologies for Textile Industry” to be

dedicated to the research of industrial textile and marine biomass fiber.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 In terms of talent cultivation the Company has set up the “Lu Thai Scholarship” in the university and the “Lu Thai InternationalEngineering Technology Research Center and Shandong Big Data Industry Innovation Center Lu Thai Talent Reserve Class”. As a result a number of brilliant students from textile universities have been attracted to Lu Thai and

Engineering Technological Institute has worked with production lines for yarn-dyed fabric knitted fabric become the backbone of the Company.Textile garment apparel printing and dyeing and functional fabric to conduct explorations. It has been dedicated to

research platform researching cutting-edge technologies. As a result they have paved a path based on fabric but transcending

traditional fabric in scientific and technological innovation quality improvement brand promotion low-

carbon energy conservation and corporate culture development. Shandong University of Technology

Lu Thai Engineering Technological Institute has capitalized on the design resources of the national industrial The Company has cooperated with the Shandong University of Technology in establishing the Lu Thai School of Textile and

design center the Shandong Provincial industrial design center an Italian designer’s workshop for fabric Apparel thereby promoting organic industry-education integration collaborative innovation and integrated industrial-educational

design and the enterprise brand design center to build a textile and apparel design platform. The platform development.Textile garment has integrated textile and garment trendy design textile new material design popular fabrics design and

design platform garment brand design which represents the major backbone of the enterprise’s independent brand The Company has also worked together with the university to establish laboratories and share research apparatus and platforms

building and promotes the Company to take leap from creation to creativity. achieving research integration in terms of the scientific program development and project application.A team of part-time teachers including Taishan Scholars senior experts of the Company and excellent technological talent has

Lu Thai owns a complete set of testing devices and equipment for textile materials fabrics and garments as been built to achieve the integration of teaching resources of the university and the Company.well as dyeing and finishing auxiliaries. It is equipped with laboratories that meet international standards

Textile garment including the constant temperature and humidity laboratory textile material testing laboratory fabric and The Company has utilized the comprehensive strengths of both sides to introduce more practice and internship channels fortesting and garment laboratory and chemical analysis and synthesis laboratory. Also it has an experienced professional students. It donates RMB1 million to the university for collaborative talent cultivation every year. Meanwhile the “Lu Thai testing team that is familiar with domestic and overseas standards. As a result Lu Thai has made every effortexperimental Scholarship” has been set up to encourage students to work hard achieving “joint talent cultivation” between the university to establish an integrated testing and inspection platform in the textile and apparel industry at home and

platforms abroad. and the Company.

32 33ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Shandong Vocational College of Science and Technology Technological research and development

In 2022 the Company engaged in strategic discussions with Shandong Vocational College of Science and Technology and signed

a strategic cooperation agreement to jointly establish an overseas “Luban Workshop” for the joint cultivation of international Lu Thai Textile adhered to an open concept for technology R&D and continued to deepen industry-academia-research collaboration. Through

talents. parallel efforts in independent R&D and joint research vigorous development of green and low-carbon technologies and continuous

optimization of clean production models we comprehensively enhanced our level of green and sustainable development. Over the years the

Company has obtained more than 500 patents including 27 projects that have received national and provincial-level awards for scientific and

Dezhou University technological progress in energy conservation.In 2025 the joint project between Lu Thai and Dezhou University on “Key Technologies and Industrialization of High-Loft PlushYarn Production Using Silk and Cashmere Color-Spun Blends” received the Second Prize of the 2025 China National Textile and

Apparel Council Science and Technology Progress Award.Key R&D projects“Development and Application of Green Low-carbon Dyeing andFinishing Processing Technologies” project

In collaboration with textile universities and strategic dyeing and finishing auxiliary partners the Company has conducted

coordinated research and development supported by core technologies including ecological scouring and bleaching high-efficiency

soaping low-carbon sizing ecological wet crosslinking ecological softening and ecological moisture-wicking finishing. By utilizing In 2025 the Company launched 24 company-level technological research projects and 112 department-level research topics. Company-level

natural and regenerated materials alongside new eco-friendly dyes and auxiliaries the Company has pioneered innovative green technology research projects are primarily focused on addressing bottleneck technologies and building forward-looking technology reserves.low-carbon dyeing and finishing processing technologies reducing energy consumption and pollutant emissions across the entire Notably research into casual apparel style design and sewing and processing technologies — established in response to market demand

dyeing and finishing process and significantly lowering the environmental carbon footprint of manufacturing operations. Through for casualwear products — has achieved significant progress providing robust technical support for the development and promotion of the

full-chain low-carbon enablement the project drives the transformation of the textile industry from “scale-driven growth” to Company’s casualwear product lines.“green quality-led development” contributing to the establishment of a modern industrial system that is resource-conserving

and environmentally friendly – and advancing the Company’s contributions to national ecological progress.Technological discussions with suppliers“Research and Industrialization of Differentiated Casual Fabric In April a delegation from Transfar Chemicals’ Textile Chemicals Division visitedProcessing Technologies” project us to conduct technical exchanges. Chief Engineer Jin Ze provided a detailed introduction to the classic cases of Transfar’s technical solutions while Dr. Li

In collaboration with textile universities and equipment manufacturers the Company has conducted joint research precisely Lei from Transfar Chemicals delivered a report titled Mechanisms of Fluorine-

aligned with contemporary consumers’ demand for natural comfort environmental sustainability and conscious fashion. Free Water Repellency and New Technology Developments.Breaking through the limitations of conventional casual fabric processing the project delivers end-to-end technical upgrades

through natural washing enzyme impact treatment and physical shaping processes – producing differentiated casual fabrics that In May we conducted technical exchanges with the China region of Archroma.combine natural aesthetic texture long-lasting comfort and low-carbon eco-friendly attributes. This initiative injects distinctive Technical experts from Archroma delivered presentations on topics includingstyle and sustainable value into casual apparel drives the casual fabric industry toward a “low-pollution high-value-added highly Advances in Synthetic Fiber Dyeing Key Aspects of Fiber Dyeing and Functionalcompetitive” model and provides a practical example of style innovation combined with ecological responsibility for the high- Finishing Technologies and engaged in discussions with our technical personnel.quality development of the textile industry – demonstrating the Company’s commitment to diversified fabric development and

sustainable growth.Intellectual property rights protection

In 2025 the Group completed 1278

The Company places great importance on intellectual property (IP) protection continuously t e c h n i c a l t ra n s f o r m a t i o n p r o j e c t s

improving its IP protection framework building a dedicated IP and patent protection team and continuously enhancing the capabilities

establishing trademark management regulations and patent application management procedures. of production equipment and process

The Company resolutely opposes infringement of trademark rights patent rights copyrights and technologies to provide a solid foundation

other forms of intellectual property and continuously enhances the effectiveness of its IP protection for the Company’s diversified production

management. In 2025 the Company applied for three government projects at the national provincial activities.and ministerial levels developed 96 new products and new processes conducted 24 technological

improvement projects obtained 30 authorized patents and led or participated in the formulation of

one national standard and eight industry standards.

34 35ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Product innovation 【Case】Stacked-Mirror Functional Products

Over its 38 years of development the Company has consistently relied on its outstanding capabilities in product development and

commercialization to secure market position. Customers are currently placing increasing emphasis on product attributes such as environmental ? Refined on the outside engineered within

friendliness casualization differentiation and high performance. In line with development trends in the textile industry we focused on ·Dual-material construction: warp-direction cotton combined with a precision-blended weft of cotton and linen nylon

customer needs to advance technological innovation and technological upgrading continuously carried out product R&D and upgrades and Coolmaxor other fibers in varying yarn counts;

iterations and provided customers with high-quality products with a high cost-performance ratio that meet market demand.·Dual-weave structure: a fine high-thread-count plain weave outer layer paired with a weft-double and specialty float inner layer

Raw material innovation: Sustainable exploration development and cooperation in terms of raw materials; the renewable degradable complemented by a unique garment-wash finishing process;

recyclable and sustainable product series that are featured by the natural fiber and regenerated cellulose fiber series and the bio-based Outer layer of fabric·The “dual system” together creates a fabric that is smooth and polished on the

series.outside with structural resilience built in. Inner layer of fabric

Technological Innovation: In-depth research into processing and manufacturing technologies to progressively achieve green full-process

production with reduced water consumption energy use and emissions; pursuing excellence and reinforcing the effective support of green ? Both “courtesy” and “presence” Human skin

and eco-friendly technologies for product quality. ·The smooth refined outer layer gives the wearer a poised elegant and effortlessly stylish appearance;

Product innovation: Continuous exploration of innovative full-life-cycle application solutions for textile products and continuous ·The inner layer features raised floats exceptional softness subtle texture and superior comfort — keeping the wearer feeling

introduction of new and environmentally-friendly product series that are skin-friendly and comfortable elastic easy-to-manage and good refreshed and at ease.for health to the market by continuous updating multicomponent products such as natural fiber regenerated cellulose fiber and ultra soft

texture fiber.【Case】Carbon Capture Fiber Fabric Quality control

The Company adheres to the principle of “quality is the most important element of enterprise survival and development” and continuously

Through the capture of CO2 from industrial waste gases followed by liquefaction and purification green methanol is produced strengthens quality control with the purpose of “meeting the needs of customers and the market”. In accordance with GB/T 19001-2016

via reaction with H2. This is subsequently converted into green ethylene glycol (EG) which is then polymerized with PTA to form Quality Management Systems the Company’s Quality Management Department formulates quality indicators translating customer feedback

green PET. Using Lu Thai’s proprietary specialized processes a carbon capture fiber fabric has been developed. into quality requirements to precisely control both process quality and result conformity. The quality management assessment mechanism has

+H

One ton of carbon capture EG captures 1 ton of CO 22 CO2 capture CO2 liquefaction CO2 purification Green methanol been improved to incentivize continuous improvements in product quality across workshops.One ton of carbon capture DTY captures 364 kg of CO2 +PTA

Carbon capture PET Green EG Quality Assurance Standards system

4 Standard system for

【Case】Recycled Fiber Fabrics Raw Material physical and chemical

Programming and Process Control Room

indicators

Alignment among GB 1

JIS AATCC/ASTM ISO

Control Office standards Lutai’s internal

control standards and

Using recycled pulp derived from partially or fully post-consumer textile waste together with FSC-certified wood-sourced materials actual data

as raw inputs regenerated fibers are produced through an improved viscose process. Standard system for

The resulting fibers carry dual RCS and GRS certifications. process inspectionDesizing rate elasticity heat- Standard system for

setting process yarn color appearance inspection

Treated with Lu Thai’s liquid ammonia and other specialized finishing processes the color fastness and strength Grey fabric and finished products: batch color variation

resulting fabric offers excellent moisture absorption and breathability a soft hand feel classification grading evaluation and responsibility

good luster and shape retention and is biodegradable — placing minimal burden on Product Pre-control determination Central Laboratory

the natural environment. It is an ideal choice for premium shirting fabrics. Team Standard system for

raw yarn inspection

3 Correlation between color difference hand feel

elasticity twist strength

and fabric performance

【Case】Rain-Dew Linen Fabric indicators 2

The traditional method of “using the sky as a factory and dew and rain as craft” endows dew-

retted linen with an irreplaceable and distinctive character. Its signature grey-green tones — naturally The Company holds production meetings every day to address any problems encountered during production.formed in color and texture — evoke a sense of refined antiquity cool restraint and quiet elegance. The Company strengthens the process compliance inspection on each process and supervises and manages it through sampling and

The vivid “dew spots” reminiscent of ink-wash brushwork or the imprint of passing time preserve tracking methods.linen’s original rugged and natural grain in its most unaltered form. The Company actively communicates with customers and absorbs their valuable feedback on product quality.With exceptional moisture absorption and breathability the fabric rapidly wicks perspiration and The Company organizes professional training for quality management personnel to continuously improve the quality awareness and ability

disperses moisture upon contact with the skin delivering outstanding ventilation and dryness. The natural fermentation process of all staff.facilitated by dew and rain yields purer fibers with inherent antibacterial and hypoallergenic properties. This fabric brings a The Company has a CNAS laboratory certified by the state achieving independent testing of some indicators.distinctively understated aesthetic to garments and home textiles making it ideally suited to consumers who embrace individuality The Company sends 100% of textiles to professional organizations (e.g. ITS SGS BV Keken) for a safety inspection to make certain that these

and a natural lifestyle — fulfilling their appreciation for unique aesthetics and refined taste. textiles are in line with market laws and regulations standards and customers’ RSL requirements.

36 37ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd服装类展会

The Company invites customers to visit or participate in new product releases or important events to enhance customer relationships. In

2025 the Company hosted 392 customer visits.

Customer Communication and Exchange Laboratory

Production lines Qualification rate

Yarn 99.99%

In 2025 Lu Thai Textile achieved a 99.99% Grade A storage

rate for spun yarn a 99.22% acceptance rate for yarn-dyed Yarn-dyed fabric 99.30%

products a 97.16% first-grade storage rate for knitted

Knitted fabric 97.47%

products a 98.07% delivery rate for piece-dyed finished

products a 96.85% delivery rate for functional fabric Piece-dyed fabric 97.95%

finished products and a 99.98% delivery rate for garments.Functional fabric 95.90%

The Company regularly organizes exhibitions and product promotion events to help customers gain a better understanding of its high-quality

Garments 99.99% products and services.Customer service and maintenance

The Company adheres to a customer-centric approach and comprehensively enhances its customer service capabilities.Constant care

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 and interests 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 2025 a total of 446 customer visits were conducted covering

countries including Japan the United States and Bangladesh.

38 39Energy Conservation and ESG Report 2025 Chairman's Statement About the Company ESG Governance Products and Services Production Operations Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

No. Zone Item name Location Customer satisfaction survey and improvements

1 Mexico International Fashion and Fabric Trade Show INTERMODA Guadalajara Mexico Lu Thai Textile continuously improves and optimizes its customer satisfaction survey every year including survey methods questionnaire

design and enhancing the authenticity rigor and objectivity of the survey. Based on the survey results a satisfaction report is generated to

2 MAGIC SHOW Las Vegas Apparel and Textile Exhibition United States Las Vegas the United States analyze the Company’s strengths and weaknesses allowing for targeted improvements to better meet customer expectations.

Americas

Customer satisfaction survey for this year:

3 Argentina International Textile Fabrics Exhibition EMITEX Buenos Aires Argentina

· Analyze changes in the customer procurement proportion and interpret customer procurement behavior based on order data.

4 Functional Fabric Fair Portland USA Portland the United States · Integrate customer feedback with actual business operations focusing on resolving and implementing solutions to practical issues of concern

to key customers.MUNICH FABRIC START Munich International Trade Fair for Apparel Fabrics and

5 Accessories Germany Munich Germany Pre-sales Consultation and Information Access

Lu Thai Satisfaction Model—Basic Model

6 Europe Première Vision Paris France Paris France

Qx Delivery process

7 New additions: Milano Unica (self-organized exhibition) in Milan Italy Milan Italy Qi

Qm Product performance

8 AFF Osaka Japan Osaka Japan

Qc

9 Japan

Price

Tokyo Fashion Fair FASHION WORLD Spring Japan Tokyo Japan Qz Satisfaction Loyalty

10 New: Texfuture Tokyo Japan Tokyo Japan R&D and design

11 Bangladesh International Exhibition on Textile Fabrics and Accessories Yarns and Textile Machinery DIFS Dhaka Bangladesh After-sales service

Vietnam International Trade Fair for Apparel Textiles and Textile Technologies

12 (VIATT) Ho Chi Minh City Vietnam

Asia Customer relations

Indonesia International Textile and Garment Machinery Exhibition (INDO

13 INTERTEX) Jakarta Indonesia The total number of customers surveyed for fabric products this year was 253. A total of 220 questionnaires were collected with a response

rate of 87%. The final score was 84.08; The total number of customers surveyed for apparel products was 109. A total of 90 questionnaires were

14 Preview in Seoul Korea International Textile Exhibition Seoul South Korea

collected with a response rate of 83% which was significantly higher than last year. The final score was 78.6.

15 VTG Vietnam International Textile and Garment Fabrics and Accessories Exhibition Ho Chi Minh City Vietnam Annual average customer satisfaction scores for each Annual customer satisfaction scores for apparel

16 China Import and Export Fair (Canton Fair) Guangzhou business segment customers across each business process stage

Domestic

17 Functional Textiles Shanghai by Performance Days PDcomprehensive Shanghai Corporate brand image 88.43 Customer relations 86.9

18 Intertextile Shanghai Apparel Fabrics Shanghai Design 82.32 Products 81.7

R&D 82.28 Corporate brand image 80.7

Development Status Department 2024 2025 Products 86.64 Services 80.4

Price Design

Global Marketing Department 45 64 70.23 77.7

Number of potential Delivery 83.82 R&D 76.2Apparel Marketing Department 24 35

customers

Services 87.42 Delivery 75.7

Lulian Marketing Department / 13

Customer relations 91.50 Price 69.9

Global Marketing Department 680000 meters 1.09 million meters

Overall satisfaction levels are relatively high across the Overall satisfaction levels are relatively high across the

Order volume Apparel Marketing Department 20600 pieces 36100 pieces dimensions of customer relationship management corporate dimensions of customer relationship management

brand image service and products. Products and corporate brand image.Lulian Marketing Department / 111200 meters

40 41Production Operations/

Responsible Production

Operations

In line with the principles of being responsible to customers employees and society Lu Thai

implements the philosophy of “responsible production and operations” improves safety

production mechanisms enhances chemical safety management and regulates supplier behaviors

with high standards. The Company is committed to providing customers with reliable products and

employees with a safe workplace minimizing societal impact while maintaining sound operations

comprehensively safeguarding the rights and interests of all stakeholders and achieving long-term

sustainable development.UN Sustainable Development GoalsESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Production safety management

Production safety involving employees’ life safety is the key to the survival and development of the enterprise. Its responsibilities are

weightier than Mount Tai. Lu Thai insists on the principle of “safety first prevention first and comprehensive management” and implements

national local and industrial policies laws and regulations and standard requirements. The Company consciously carries out all rules and

regulations of production safety and invites relevant stakeholders to supervise their implementation.Safety management system and institutional development Various types of safety training

The Company continuously improves its standardized production safety system conducts internal safety standardization reviews

and carries out supervision and inspection of implementation across all facilities.The Company has set up a Safety Production Committee and an Accident Emergency Rescue Leading Group around the Safety

Inspection Office with a total number of 68 safety management personnel.The Company has established the safety production targets management responsibility system and signed the Responsibility

Letter for Safety Production Targets Management at all levels. Besides the Company has broken down the accident control targets

by levels and implemented strict assessments of personnel at all levels to ensure the fulfillment of the safety production control

targets.The Company’s Safety Control Targets in 2025 First lesson on resumption of work

? Eradicate fire risks and personal casualties Diversified “Safety Production Month” activities

? Prevent the accidents of major environments and occupational health and safety

? Eliminate grand electromechanical equipment accidents During the “Safety Production Month” campaign in June 2025 the Company conducted a variety of activities such as publicity board design

? Avoid traffic accident special training on safety production inspections on potential safety hazards award-winning essay contests and emergency response drills. All

employees actively participated in these activities and their safety awareness was effectively improved.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 organized various departments to carry out publicity board design activities with the theme of “everyone valuessafety and knows how to handle emergencies - identifying safety hazards around us” and created a total of 21 boards.The Company continues to improve the dual prevention system for hierarchical control of production safety risk and investigation and

governance of hazards and persists in risk prevention and early identification. In terms of hierarchical risk control the Company identifies the

risk hazards in operating activities and equipment and facilities in each sector every year classifies the types and consequences of possible

incidents and determines the hierarchy of control and the corresponding accountable person according to the category. In 2025 the Company

identified a total of 291 risk hazards in various production and operating activities. For each risk hazard the Company has formulated specific

risk control measures to prevent and control risks by ways such as standard specification safety training distribution of supplies for labor

conservation 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 Office carried out various inspections in 2025 including special

inspections for dust explosion-proof diagnosis by invited safety experts intrinsic safety of equipment confined space hazardous chemicals

special inspections of warehouses general inspections during the holidays and departmental self-inspections and self-corrections which

identified more than 22000 safety hazards. During the Reporting Period all risk hazards were eliminated.A total of 280 teams from various departments and subsidiaries participated in the “Inspection Prevention and Promotion” safety

hazard investigation activity with 6000 participants. A total of 3250 hazards were identified and 22 outstanding teams were selected.The Company is conducting an on-site safety hazard inspection

In terms of safety training the Company carried out the training of the first lesson after the Spring Festival Qingming Festival Mid-Autumn

Festival and National Day and organized a series of special training in 2025 such as 15 training sessions for new employees 90 safety training

sessions for all employees six training sessions for special operators two training sessions from invited external experts special equipment andsafety management personnel training. Moreover the Company has implemented the government’s special action requirements on “deeplearning deep training wide examination” for safety production and achieved the normalization of safety training and learning. In addition

the Company has conducted “Safety Production Month” activities with the theme of “everyone values safety and knows how to handleemergencies and ensures smooth life channels” aiming to prevent and defuse major risks eliminate potential safety hazards in a timely

manner and effectively curb production safety incidents and finally create a sound environment for safety production. In the whole year of 2025

the Company conducted more than 100 various safety training sessions with over 12000 trainees.

44 45ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

We carried out the “Everyone Values Safety” presentation campaign. Each factory recommended 52 outstanding presenters

who delivered video presentations on site. Fire safety managementAs a key unit of fire safety the Company implements the working policy of “prevention first with a combination of fire prevention andfirefighting” standardizes fire safety management procedures strictly implements fire safety management regulations to effectively prevent

fire accidents and guarantee the implementation of emergency rescue. In addition these measures minimize property damage and personnel

injury caused by fire occurrence and fire rescuing.The Company’s Security Department conducts targeted annual training sessions on fire safety knowledge fire extinguishing and evacuation

drills training for key and critical areas and hands-on training for volunteer firefighters on firefighting equipment. These initiatives aim to raise

overall fire safety awareness and enhance emergency response capabilities. Each department strictly adheres to the Hot Work Management

System the Fire Inspection System and the Electrical Safety Management System to establish a solid fire safety firewall.Luthai in collaboration with China Mobile has developed a 5G Smart Shared Management Platform integrating security and firefighting

functions. Through various intelligent features such as AI Engine Security Monitoring Park Access Control Smart Firefighting and Wireless

The Company organized the “Emergency Drill Competition” with 13 teams participating. After evaluation by experts from Intercom the platform creates an information-sharing and intelligent management system for security and fire protection. This enhances

the Zichuan District Emergency Management Bureau and safety inspection personnel two first prizes three second prizes three-dimensional safety management intelligent emergency support and coordinated emergency response improving the efficiency of the

five third prizes and three participation prizes were awarded. Company’s fire safety and security management. This year we added 66 sets of gas alarm systems and installed a total of 268 detectors in areas

such as factories and canteens further optimizing our pre-control of fire safety.Safety production emergency management

The Company has established a sound production safety emergency management system and actively carried out emergency response drills to

comprehensively improve its capacity for emergency response and accident rescue. For example it has formulated several response plans such

as the Regulations on Emergency Preparedness and Response Management the Emergency Preparedness and Response for Fire Accidents the

Emergency Preparedness and Response for Hazardous Chemicals Leakage Accidents and the Emergency Preparedness and Response for Natural

Gas Leakage Accidents. In 2025 the Company organized each plant to conduct emergency response drills including 43 special response drills

and 306 on-site disposal drills and carried out a total of 15 “Emergency Rehearsal Training” in the “Safety Production Month” activities. Video Monitoring

Through various emergency drills the Company has enhanced the emergency response capabilities of all department employees improving

self-rescue and mutual aid abilities to safeguard lives and property.Wireless Intercom

The Company is conducting an emergency drill

46 47ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Smart Firefighting

Fire safety training

AI Engine

Volunteer firefighter training

Indicators Completed

Visible fire monitoring 13589.96 (hours)

Fire safety hazard inspection 3305 (items)

Employee training on critical parts protection 2091 trainees

Fire extinguishing and evacuation drills 269 sessions

Test on automatic sprinklers system 14142 (points)

Major fire safety incident Zero (times)

Firefighting and evacuation drill

48 49Energy Conservation and ESG Report 2025 Chairman's Statement About the Company ESG Governance Products and Services Production Operations Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Fire Safety Bulletin Board

Firefighting and evacuation drill

Fire Safety Knowledge Outreach Activities in Work Teams

Fire Safety Cartoon

The Company organizes “119 Fire Safety Publicity Month” activities

50 51ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Chemical management

Procurement storage and usage management

The Company controls the whole process of procurement transportation storage use and disposal of chemicals especially for the purchase

and use of hazardous chemicals. Moreover the Company has formulated management systems and regulations such as the Safety Management Chemical Testing

System for Hazardous Chemicals the Regulations on the Supervision and Inspection of Hazardous Chemicals the Safety Management System

for the Storage Handling and Use of Liquid Ammonia and the Regulations on the Supervision and Inspection of Major Hazard Installations of

Liquid Ammonia prompting each operation management to be standardized detailed and normalized.? For precursor chemicals and explosive chemicals the Company strictly complies

with national regulations and reports to the public security authorities in a timely

manner. The Company establishes a chemical flow ledger and strictly controls the

use to prevent the outflow and illegal use of such chemicals.Chemical suppliers must hold valid business licenses production permits and Production process control:?

hazardous chemical registration certificates and must sign an Environmental Training programs are organized across all facilities to ensure employees are fully informed about the chemicals in use. Where customers have

Compliance Declaration before being approved as qualified suppliers. specific requirements relevant products are strictly used in accordance with those requirements — for example using dyes and auxiliaries that

? When each chemical is first purchased in the year a complete MSDS list should be meet ZDHC Conformity Level 1 or above.requested from the supplier and pasted at the chemical usage and storage site. Each batch of finished products shall be sent to a professional third-party testing institution for restricted substances safety testing. Only after

passing the test and receiving a certificate of compliance from the Quality Management Department can the products be packed and shipped.? All user departments strictly regulate storage quantities in accordance

with the specific properties of each chemical. Comprehensive

hazardous chemical safety management systems and emergency

response plans are established with designated personnel assigned

responsibility for management.Product Safety Testing

? Each factory using chemical products must conduct at least one

chemical safety training per year informing employees of the

properties and hazards of chemicals in use as well as emergency

response and self-rescue procedures in the event of spillage or

contact with eyes or skin and supervising employees to ensure

compliant storage and handling. Terminal management:

The Company tests the discharged wastewater and sludge for toxic and harmful chemicals according to the wastewater guidelines of Zero

? Chemical administrators must obtain professional certifications Discharge of Hazardous Chemicals (“ZDHC”) twice a year to ensure zero discharge of toxic and harmful chemicals.through regular external training.Restricted substances control

As global attention to environmental protection and product safety continues to grow green production and eco-friendly products have become

an industry-wide development trend. As an internationally oriented manufacturing enterprise Lu Thai proactively adapts to these evolving

requirements by establishing a full-process chemical management and control mechanism.Source control:

In accordance with the requirements of laws and regulations standards instructions and customers’ restricted substances list (“MRSL”) of

each nation and region the Company has established a chemical approval system and the Manufacturing Restricted Substances List (“MRSL”)

which is stricter than market regulations/standards. When chemicals for production pass the experiment test the Company will entrust the

third-party testing organization to conduct the test on toxic and harmful chemicals. Only suppliers with test results in conformity with the MRSL

are included in the list of qualified suppliers and can then be used for bulk purchase. Meanwhile the Company strengthens the application of

efficient and environment-friendly dyeing auxiliary to eliminate the production of toxic and harmful chemicals from the source. Wastewater and Sludge Testing Report

52 53ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

The Company places great importance on the transparency of chemical information and data. It annually discloses Pollutant Release and

Transfer Register (PRTR) data on the ZDHC Gateway and the Institute of Public & Environmental Affairs (IPE). Additionally twice a year the Supply chain management

Company publishes wastewater DETOX emission data. The Company also maintains active communication and collaboration with suppliers

customers third-party testing organizations and non-governmental organizations to continuously improve chemical management standards. Through a new generation of integrated and collaborative platform (ERP system) based on Internet services and technical architecture

the Company has realized the information flow in the whole process from supplier access to purchase warehousing. This has ensured the

Data Releasing Platform information flow in all processes of the supply chain improved the efficiency of raw material supply and made the purchase process more

standardized and transparent.Supplier management

Supplier onboarding

When selecting suppliers the candidates are required to possess relevant product qualification certification and have manufactured same

or similar products for at least one year with a certain production scale. Priority will be given to suppliers who have obtained authoritative

certifications such as the ISO9001 Quality Management System Certification the ISO14001 Environmental Management System Certification the

ISO45001 Occupational Health and Safety Management System Certification the SA8000 Social Responsibility Management System Certification

and the Green Factory Certification.Luthai Textile Chemical Management Before approval on-site audits are conducted for suppliers to assess whether their production quality control processes and social

Input management responsibility performance comply with relevant certification standards. Only after product use and testing meet requirements can they be listed

as approved suppliers. Prior to procurement and usage suppliers are required to sign documents such as the Quality Agreement the Supplier

Selection of new suppliers Code of Conduct and the Environmental Compliance Declaration to protect the Company’s legal rights and interests.Daily evaluation of suppliers Compliance screening of

On-site audit of suppliers Material Safety Data Sheet

Approval/removal of qualified Government Chemicals (“MSDS”)

suppliers Non-governmental organizations Textiles Initial identification of harmful

· Supplier Quality and Safety

Customers and brands Wastewater chemicals according to the type Assurance Agreement Sludge

· Declaration of Environmental of auxiliaries

Conformity of Chemicals Third-party testing

· Declaration of Environmental Analysis and tracking of testing

Conformity for Raw Materials data

and Auxiliaries

Management of chemical 本Understand relevant laws and Create a list of concerns on Ways to identify harmful 印章样式仅供参考复印

suppliers 无效regulations and documents harmful substance chemicals

Production process

Safety Management Process of Textile

Chemicals 本印章样式仅供参考复印无效

Provisions for the Management of Tap water Substitution of dyeing auxiliary

Departmental Chemicals Dyeing drainage

Provisions for the Management of Reduction of dyeing auxiliary

Procurement of Sizing Agents Dyestuffs Warp sizing drainage Emission reduction Quality Agreement Environmental Compliance Declaration

and Auxiliaries Organization of drainage Short process...Provisions for the Management of Safety Our current suppliers of raw materials auxiliary materials ingredients and other items include large medium and small enterprises. We treat

Control for Warehouse Management all suppliers impartially and equally achieving mutual benefit and win-win outcomes and pursuing common development.Department

Management of procurement storage Process testing and validation Green technology Routine supplier management

use and other aspects of chemicals

In daily management the Company conducts annual surveys on supplier profiles and performs periodic supervision and

Output-end management

audits to maintain real-time oversight of their quality and CSR management.Personnel Material management

Brand customers

Chemicals

Water quality Participation in green activities Information disclosure through IPE

Human rights and labor Production management

Sludge

Products Supplier audits

Insurance and benefits Quality control

Creation of a testing data list Participation in green activities Information disclosure through IPE

Luthai reduces the level of pollutants through efficient chemicals management and good process control. Meanwhile the Company works Equipment and facilities EHS management

together with relevant parties such as major brands in the supply chain suppliers chemical industry and non-governmental organizations to

reduce the impacts on the environment.

54 55ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

In 2025 a total of 55 suppliers were audited of which 54 passed and one failed. The annual supplier audit plan was fully completed.For issues identified during the audits we supervise suppliers to carry out corrective actions following the process below with continuous

follow-up to ensure implementation.Audit Deficiency Analysis Suppliers conduct a comprehensive analysis of deficiencies identified during the audit to determine

the root causes and develop targeted corrective actions.Formulating a Corrective Based on the audit deficiency analysis suppliers develop a detailed corrective action plan including

Action Plan corrective measures responsible departments and personnel and a deadline for completion.Implementing Corrective

Suppliers implement corrective actions step by step according to the audit plan. Categorized Evaluation

Measures

Reviewing and Evaluating Suppliers conduct regular reviews to ensure corrective measures are continuously and effectively

Corrective Results s implemented and that audit deficiencies are fully resolved.Supply Chain Quality Improvement

Summarizing and

Sharing Corrective Action Suppliers summarize the lessons learned during the corrective process and voluntarily share them.Experiences 1 Develop and implement a supplier audit plan to emphasize our specific requirements for suppliers in

various aspects through audits.Require suppliers to promptly rectify issues identified during audits. Audit results serve as key factors in the

supplier’s annual comprehensive assessment and directly impact the allocation of procurement shares for

the following year.

2

Share the latest management concepts and best practices with suppliers gather their feedback and

suggestions and collaborate on addressing quality issues.Supplier Audit Report

3 Communicate Lu Thai’s quality philosophy and requirements provide technical guidance and training

to help suppliers enhance their quality management and encourage them to obtain relevant system

certifications.

4

Collaborate with suppliers on innovative product development to achieve mutual benefits.Case

The Company also conducts semi-annual and annual supplier assessments according to different raw material suppliers and classifies suppliers

based on the assessment results.Tier I Supplier (90 points and Appropriately increase purchase volume

above)

At the beginning of the year the Company provided

Tier II Suppliers (75–90 points) Normal cooperation systematic training on in-factory transportation

Result Application and operational safety for its partnered logistics

Tier III Supplier (65–75 points) Send Information Notice rectify within deadline

companies.Tier IV Supplier (below 65 Suspend supply send Information Notice rectify within

points) deadline and disqualify if requirements are not met

56 57ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Procurement management Internal control

In terms of procurement whether to invite bids is determined based on different materials and the annual procurement amount. If bidding is The internal control evaluation is carried out by the Audit Department of the Company every year so as to timely identify the loopholes and

required the Bidding Office will conduct publication and assessment to select winning bidders. The Procurement Department drafts contracts risks in the supplier management procedure which lays a solid foundation for the building of a responsible supply chain.based on the bidding documents and the bid documents of the winning bidder and conducts subsequent procurement after being reviewed

by the Legal Affairs Department and approved by the President. For those that do not require bidding the Procurement Department selects

suppliers from the List of Qualified Suppliers conducts price inquiries and comparisons confirms purchasers and proceeds with subsequent

procurement work.For dyeing aids raw cotton and yarn we priorities products certified by Bluesign GOTS/OCS and GRS. We continue to promote the use of The main contents of internal control evaluation include:

recycled polyester recycled nylon and recycled cotton to improve resource utilization.Procured materials are subject to full inspection or random sampling inspection based on category ensuring that non-conforming inputs are Whether a reasonable supplier Whether the suppliers are selected Whether the supplier management

controlled at the source. evaluation and access system according to the principle of fair system and supplier elimination

is established to examine the and just competition and the s y s t e m a r e s e t u p s o a s t o

authenticity and legitimacy of quality assurance agreement is conduct real-time management

the suppliers’ qualification and signed with the suppliers on the assessment and evaluation on the

reputation. basis of effectively preventing the quality price delivery timeliness

risk of fraud. supply conditions qualification

and reputation operating status of

materials or services provided by

suppliers and to make reasonable

selection and adjustments to

suppliers based on the assessment

results.Raw Material Inspection Report

Warehouse management

The Company maintains dedicated warehouses for raw cotton yarn chemicals and other materials implementing classified storage

management for all categories of materials and strictly adhering to relevant regulations as well as the appropriate environmental conditions

and temperature requirements for each raw material.Each batch of incoming materials undergoes an appearance inspection and internal quality sampling test before being accepted into storage.A material inventory ledger is maintained and material requisition follows a “receipt-based requisition” system. The material flow and

stock levels can be monitored in real-time through the inventory management system.

58 59ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Energy Conservation and Environmental

Protection/Advancing Green and Low-

Carbon Development

With the development of the economy and the advancement of technology global issues such as

resource scarcity and climate change have become increasingly urgent. Promoting green and low-

carbon development has become a consensus and joint action for countries around the world to

address resource and environmental issues and promote sustainable development. As a green

pioneer 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 upgrades of equipment in

terms of energy conservation and environmentally friendly and achieved the research and application

of green processes assisting in building a globally beneficial supply chain ecosystem that supports the

sustainable development of human society.UN Sustainable Development Goals

60 61ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Environmental management indicators achievement

Lu Thai Environmental Management Achievements in 2025

Data related to wastewater and sewage

Indicator (Unit) 2020 2025 Reduction Compared to the Baseline Year

COD (Chemical Oxygen Demand) in 349 243 30.37%

discharged wastewater (ton)

Ammonia nitrogen content in 9 2 77.78%

discharged wastewater (ton)

Industrial wastewater discharge (10000

cubic meters) 305 261 14.43%

Air pollutant emissions

Indicator (Unit) 2020 2025 Reduction Compared to the Baseline Year

Sulfur dioxide in emitted exhaust gas 0.5 0 100%

(ton)

Nitrogen oxides in emitted exhaust gas Addressing climate change4.5 1.65 63.33%

(ton)

Climate change is not only an environmental issue but also a development issue. As a global textile enterprise Lu Thai actively regards

addressing climate change as an important action for sustainable development vigorously promoting energy conservation and carbon

Waste discharge reduction in production and operation and contributing to global climate governance.Indicator (Unit) 2020 2025 Reduction Compared to the Baseline Year Risk analysis and response measures

Hazardous waste generation (ton) 51 41 19.61% The Shared Socioeconomic Pathways (SSPs) are a powerful tool introduced by the Intergovernmental Panel on Climate Change (IPCC) in 2010 to

describe global socioeconomic development scenarios. SSPs were developed based on Representative Concentration Pathways (RCPs) and are

Non-hazardous waste generation 14552 12115 16.75% used to quantitatively describe the relationship between climate change and socioeconomic development pathways reflecting the adaptation

(sludge) (ton) and 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 climate

Energy consumption density change scenario where warming remains below 2oC—SSP 1-2.6 (with a projected 1.8oC increase by 2100 compared to pre-industrial levels) as

well as a pessimistic climate change scenario where warming exceeds 4oC—SSP 5-8.5 (with a projected 4.5oC increase by 2100 compared to pre-

industrial levels).Indicator (Unit) 2020 2025 Reduction Compared to the Baseline Year

Impact analysis of risks and response measures

Greenhouse gas emissions intensity 53.50%

(tCO2e/million revenue)

105.849.2

Based on our preliminary assessment of risk factors and consideration of the impacts of a low-emission scenario (1.8oC) on carbon pricing

Total energy emission density (tons of 17.5 12.84 26.63% renewable energy generation and other transitional climate effects as well as the impacts of a high-emission scenario (4.5oC) on physical risk

standard coal per million revenue) factors we have selected the following climate-related risk factors for further analysis and have outlined the corresponding response measures.Note: The baseline year for the above data is 2020.

62 63ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Risk Type Risk Name Risk Description Risk Impact Responses

The Group’s production bases ·Formulate Emergency Response Plan for Work Safety Incidents to establish an emergency command system set up an emergency office and clarify

are located in the East China Natural disasters such as heavy rainfall emergency personnel and responsibilities to achieve a rapid response to extreme weather. The Emergency Command Team is responsible for command

region where extreme weather f l o o d s a n d s e v e r e t y p h o o n s m a y operations and works with the production department to organize personnel for safety inspections of key facilities and equipment while the logistics

events caused by climate change have last ing ef fects on the Group. department ensures material support.i n c l u d e b u t a r e n o t l i m i t e d During extreme weather events the ·Before extreme weather: Monitor weather changes closely conduct safety inspections and rectify hazards promptly. Prepare protective devices and

t o t y p h o o n s h e a v y ra i n fa l l transportation of raw materials and emergency equipment in advance ensure readiness of emergency teams and power supply plan employee commuting arrangements material and

droughts and floods. Under a products may be disrupted employee product transportation and schedule production and shipments in advance.global 1.5 ° C warming scenario commuting may become difficult and

Extreme the frequency of once-in-20-years risks such as power outages water ·During extreme weather: Reduce production on typhoon/heavy rainfall days halt outdoor operations suspend work as needed assign personnel to

weather heavy precipitation events is supply interruptions and steam supply monitor weather conditions in real-time prioritize employee safety and ensure emergency supplies are adequate.(typhoons expected to increase by 10% while disruptions may arise. For example ·After extreme weather: Conduct damage assessments immediately draw lessons from the event minimize losses and accelerate production recovery.floods heavy the frequency of once-in-100- typhoons may lead to production halts

rain) years heavy precipitation events and property damage. Additionally ·Strengthen fixed asset management: Conduct regular inspections and maintenance of production equipment and facilities purchase property insurance

is expected to increase by 20%. during the rainy season red rainstorm for assets in high-risk areas and implement additional protective measures to reduce losses from uncontrollable risks.Under a 2 ° C warming scenario warnings may result in obstructed ·Regularly analyze supplier risks develop stocking strategies for key raw materials optimize transportation methods and routes for critical raw materials

the f requenc y of once - in-20- material transportation difficulties and enhance supplier relationships to ensure supply chain stability.years heavy precipitation events in employee commuting damage to

is projected to increase by 22% company buildings and equipment ·Utilize a purified water system to ensure the safety of production water and conduct regular quality testing for domestic and drinking water.and the frequency of once-in-100- affecting production schedules and

years heavy precipitation events is increasing facility maintenance costs.expected to rise by more than 45%.A cold wave occurs when cold

Immediate risks air causes a local temperature

drop of more than 8 ° C within 24 Under extreme heat conditions the Group

hours with the daily minimum may need to enhance ventilation and

temperature falling below 4 ° C. A cooling in production plants and offices

heatwave is defined as a period leading to increased energy consumption

of three or more consecutive days and operational costs. Additionally ·Prepare peak-load shifting electricity usage plans and work arrangements in advance during peak electricity demand periods.with maximum daily temperatures electricity demand surges may cause

power transmission disruptions affecting ·Develop backup energy solutions and pre-establish energy emergency response plans. reaching or exceeding 35 ° C.Due to human act iv i t ies the normal production. Under extreme ·Schedule hazardous materials shipments in summer for early morning or late afternoon to avoid high-temperature periods and reduce fire risks.probability of cold waves has cold conditions the Group may need to

increase heating in production facilities ·Regularly assess supplier risks develop stocking strategies for key raw materials and strengthen supplier relationships. decreased to some extent but

their intensity has shown an and offices resulting in higher energy ·Implement preventive measures provide comprehensive protective equipment and strengthen warning and reminder signage; conduct

increasing trend. Cold waves may consumption and operational costs. specialized inspections of boilers steam systems and other equipment on a regular basis; carry out regular inspections of slipping-prone areas in

（Heatwavescause sharp temperature drops Frozen roads due to cold weather may facilities such as stairways ramps and passageways.cold waves)

strong winds rain snow and disrupt material transportation leading to ·Develop emergency response plans to prevent fires explosions leaks and poisoning incidents.freezing conditions affecting the insufficient raw material supply and direct

Group’s raw material production production delays or shutdowns. Dry ·Ensure factory buildings and fire protection facilities are insulated to prevent equipment damage from freezing.logistics and power operations. weather conditions may increase the risk ·Enhance winter safety training to ensure operational safety; strengthen safety inspections of employee dormitories.At the same time heatwaves and of fires explosions leaks and poisoning

compound extreme events (such incidents. Extremely low temperatures ·Prepare heatstroke prevention and cooling supplies in summer and minimize outdoor work.as heavy precipitation followed by may cause equipment failures leading · Include high-temperature emergency response training in employee programs and conduct drills for heatstroke and other heat-related illnesses.heatwaves) are becoming more to property damage and higher facility

frequent and intense under global maintenance costs. Furthermore cold ·Continuously monitor employee health and conduct regular medical check-ups.warming. The increased electricity waves and heatwaves may increase the

demand for residential cooling prevalence and severity of cardiovascular

during heatwaves may result in diseases malaria and heatstroke posing

industrial electricity restrictions for health risks to employees.businesses during certain periods.

64 65ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Risk Type Risk Name Risk Description Risk Impact Responses

The Group’s production process

requires large amounts of water The Group’s water sources are

w h i c h i s u s e d i n d y e i n g a n d municipal tap water. Water shortages may

finishing printing and equipment force reductions in production capacity ·Set reasonable water conservation targets and implement improvement measures.cleaning. As global water scarcity temporary shutdowns or the adoption of

·Establish water conservation goals reduce freshwater consumption and increase wastewater reuse.worsens particularly in drought- additional water management measures

Water scarcity

prone and water-stressed regions such as water recycling and water-saving ·Develop a comprehensive water resource management system and assessment framework.water shortages pose an increasing technologies. This may lead to higher

r isk to the stabil ity of texti le production costs or lower operating

production and cost management. revenue.A c c o r d i n g t o t h e C h i n a

Long-term risks Meteorological Administration’s

G l o ba l S u r fa ce Te m p e rat u r e

Dataset Analysis global warming Temperature variations may affect the

has continued since 2015 with stability of certain chemical reagents

records for the hottest year on requiring adjustments to production

record being repeatedly broken. ·Implement energy-saving renovations for air conditioning and ventilation systems in production facilities and offices to improve energy efficiency. parameters or additional temperature

The rise in average temperature control measures thereby increasing ·Provide adequate heat protection materials for employees in summer and conduct annual health check-ups.due to global cl imate change

Rising average production costs. Rising temperatures may bring multiple challenges ·Include high-temperature response training in employee programs and conduct emergency drills for heatstroke and other heat-related illnesses. necessitate enhanced ventilation and

temperature to textile enterprises including cooling in production plants and offices ·Avoid outdoor work during midday high-temperature periods to ensure safe production.production activities raw material leading to higher energy consumption and

supply product quality control ·Plan peak-load shifting electricity usage in advance.operational costs. Additionally increased

and employee health and safety. temperatures may raise the likelihood of

Temperature changes may impact heat-related illnesses such as heatstroke

fabric and apparel production reducing workforce productivity.processes storage conditions and

supply chains.Carbon emission rights refer to

the legal right of enterprises to ·Establish a greenhouse gas emission management framework set energy-saving and carbon reduction targets and gradually reduce carbon

emit greenhouse gases with emissions intensity and total emissions. Establish an energy conservation and emissions reduction taskforce to conduct multi-dimensional self-

each company being allocated a assessments and continuously optimize emissions reduction efforts. Additionally require department and workshop managers to identify high-

certain quota by the government. power equipment and major pollution sources document findings for further analysis and improvement to ensure that beyond meeting the

Although the Group is not currently Group’s emission reduction targets emissions are further minimized.covered under China’s national As carbon emission pricing rises the ·Strengthen energy conservation and emissions reduction management across all production and operations: including reviewing energy-

carbon emissions trading system Group’s carbon trading expenditures consuming equipment and energy use replacing high-energy-consuming equipment with energy-efficient alternatives upgrading high-energy

in a low-emission scenario if the may continue to increase impacting equipment and optimizing production equipment to improve energy efficiency and reduce greenhouse gas emissions.country continues to implement its financial performance. Moreover

Policy & Increase in carbon stricter emission reduction policies higher carbon pricing significantly affects ·Promote resource recycling by installing recovery systems (e.g. reclaimed water reuse ammonia recovery alkali recycling).regulatory risks emission pricing and introduces carbon trading the power and chemical industries ·Improve energy structure by increasing the use of clean and renewable energy (e.g. expanding photovoltaic power generation projects) and

policies for the textile industry potentially leading to rising energy prices reducing reliance on traditional fossil fuels.the Group may be included in the or raw material shortages which would

carbon quota trading market. As indirectly increase the Group’s operating ·Enhance training and awareness programs to improve employee energy-saving awareness and operational efficiency preventing unnecessary

a result the Group’s production costs. energy waste.facilities may need to adopt more ·Strengthen energy management and control and strengthen assessments of energy use in production workshops.aggressive emission reduction

measures or participate in carbon ·Improve production technology to enhance first-pass product acceptance rate thereby reducing raw material and energy consumption per unit

trading to ensure compliance product.with greenhouse gas emission ·Adopt green operations by promoting paperless offices to reduce greenhouse gas emissions from business activities.regulations.

66 67ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Low-carbon practices Energy management

Photovoltaic power generation projects

Optimization and renovation of the power system and steam pipeline network

Guided by the dual-carbon strategy the Company has advanced load balancing in its

As of 2025 the Company’s installed solar photovoltaic power power systems optimization and upgrading of steam pipeline networks and integrated

generation facilities have supplied a total of 72.59 MW grid- optimization of energy systems—achieving significant results in energy conservation

connected electricity accounting for 16% of the annual and carbon reduction. In 2025 total carbon emissions decreased by 2.47% year-on-year.electricity consumption within the total installation scope The Company’s overall energy management is driven by technological innovation and

reducing carbon dioxide emissions by approximately 100000 management upgrades; on the foundation of ensuring a secure and stable energy supply

tons. this work establishes a solid basis for the Company’s green and low-carbon transition.In response to changes in the energy structure across product lines the Company has

optimized its energy supply systems consolidated equipment and facilities and achieved

Photovoltaic power generation across all industrial parks

precise alignment between existing production capacity and energy demand — ensuring efficient energy utilization. The ongoing

Resources management optimization and upgrading of steam pipeline networks has effectively advanced waste heat recovery enabling annual steam savings of approximately 3000 tons.Lu Thai integrates sustainable development principles into the entire production and operational process continuously strengthening resource

management and adhering to green development concepts. We strictly comply with the Energy Conservation Law of the People’s Republic of

China 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 Regulations Development of an intelligent energy operations and maintenance platform

as the Group-wide guidelines for resource utilization management which all entities within the Group must strictly follow. Additionally

each company has developed and implemented its own Resource Management System and Energy Conservation and Emission Reduction

Management System in accordance with its specific operational conditions. These systems facilitate standardized and systematic resource The platform is an intelligent energy management system and data center built to the ISO/IEC/IEEE 18880 standard. It provides

utilization management significantly enhancing resource efficiency. services including data storage real-time monitoring visualization management data analytics risk control and energy efficiency

analysis. By enabling real-time monitoring of equipment operating status the platform fully replaces manual inspection rounds

The Company also sets annual water conservation and energy use targets. By improving management practices and upgrading technologies we provides accurate operations and maintenance recommendations reduces repetitive routine maintenance workloads can deliver

continuously optimize resource utilization methods conduct regular audits of resource consumption and enhance overall resource efficiency to maintenance cost savings of up to 15% and delivers significant safety benefits.ensure the achievement of sustainability goals.Risk analysis and response measures

Risk Description Risk Level Responses Assessment of Risks

and Opportunities Oil furnace flue gas heat exchange project

Overhaul the park’s power distribution

facilities annually. The Company’s Safety and Environmental Equipment Division conducted a

Conduct preventive tests on transformers water-heat balance analysis and leveraging existing flue gas waste heat resources

Impact of power supply on lightning arresters and circuit breakers Effective installed heat exchangers to recover high-temperature flue gas heat using medium-Low risk

production and operations every three years. temperature return water—generating high-temperature hot water for direct

Carry out routine temperature monitoring reuse in dyeing and finishing high-temperature processing equipment. Since

of power cable knife switches to ensure a commissioning in May 2025 the heat exchanger inlet water temperature has

stable power supply. been 40 ° C with an average outlet temperature of 73 ° C and a daily average heat

exchange water volume of 195 m3. Based on an 80% thermal efficiency conversion

Strengthen patrol inspections of water rate the recovered heat value represents annual cost savings of approximately

Impact of water supply on pipelines. Effective RMB550000 — with the capital investment fully recovered within three months of

production and operations Low risk Test water quality daily. operation.Promptly repair pipeline leak points.Strengthen routine inspections and patrol

Impact of steam supply on checks of steam pipelines.Low risk Effective

production and operations Promptly repair any leaks seepage

dripping or spillage identified in the

pipelines.

68 69Energy Conservation and ESG Report 2025 Chairman's Statement About the Company ESG Governance Products and Services Production Operations Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Atmospheric pollutant management

Resource management

In 2025 the Company’s water resource management efforts centered on intensive utilization and sustainable development. Through scientific

assessment of production water requirements and optimization of water intake and recirculating water systems the Company achieved more Risk analysis and response measures

efficient water allocation and improved utilization rates. Internal management systems were strengthened water conservation compliance

oversight was enhanced and water-saving processes and equipment upgrades were promoted — yielding meaningful results in water

resource management over the course of the year. These efforts have effectively supported the Company’s green transition and long-term

competitiveness while ensuring continuity of production operations. Risk Description Risk Level Responses

Assessment of Risks

and Opportunities

Each year we engage a qualified third party to monitor

Water conservation and measure exhaust gas emissions at the plant

boundary to ensure compliant discharge of exhaust gas

emissions.Excessive exhaust gas

Water conservation is a critical initiative for ecological balance and sustainable development aimed at reducing water waste and emissions causing air Low risk The Energy and Environmental Protection Department Effective

improving utilization efficiency through sound management technological innovation and broad participation. Leveraging the pollution coordinates with all emission-generating departments

Group’s proprietary wastewater treatment facilities the Company has established the capacity to recover and reuse approximately to establish pollutant discharge quotas and conducts

13000 tons of water per day — equivalent to 61% of total water consumption — significantly reducing municipal water consumption unannounced monitoring of wastewater air emissions

effectively alleviating regional water supply pressures and serving as a clear industry benchmark. and noise pollution sources. For abnormal emissions the

Department supervises the responsible departments and

Water consumption at each operating unit is measured by flow meters and total water consumption is the sum of municipally facilities to complete corrective actions as promptly as

supplied water and reclaimed water. possible.Qtotal = ∑ q tap water + q reclaimed water

Current governance status

The Company proactively carried out air pollutant control efforts to minimize the environmental burden caused by our production and

Sewage treatment operations to the greatest extent possible. All air emission sources are recorded using measured concentration values. Applicable standards include: Emission Standards for Odor Pollutants (GB 14554-1993)—ammonia 1.5 mg/m3 hydrogen sulfide 0.06 mg/m3; Volatile Organic

C o m p o u n d s E m i s s i o n Sta n d a rd s Pa r t V I I : O t h e r

Industries (DB37/2801.7-2019)—odor concentration 16

(dimensionless) non-methane total hydrocarbons (NMHC)

The Company’s sewage treatment operations are closely aligned with its green development philosophy. By strengthening operational 2.0 mg /m3; and Integrated Emission Standard of Air

controls optimizing process technologies and raising employee environmental awareness the Company ensures that the full Pollutants (GB 16297-1996) — particulate matter 1.0 mg/m3.wastewater treatment process operates efficiently and stably—achieving compliant discharge resource recycling and compliant

hazardous waste disposal to safeguard environmental safety and further advance the Company’s transition toward a low-carbon During the reporting period unorganized air emission

sustainable model. concentrations at the plant boundary were as follows:

hydrogen sulfide 0.006 mg/m3 ammonia 0.06 mg/m3

The Company operates an on-site wastewater treatment station particulate matter 0.29 mg/m3 NMHC 1.3 mg/m3 and odor

and a municipal wastewater treatment plant. The on-site station concentration 13 (dimensionless)—all within and below

employs an Anoxic-Oxic (AO) wastewater treatment process with the applicable emission limit values of hydrogen sulfide

effluent quality meeting the indirect discharge concentration 0.06 mg/m3 ammonia 1.5 mg/m3 particulate matter 1.0

limits set out in the Discharge Standards of Water Pollutants mg /m3 NMHC 2.0 mg /m3 and odor concentration 16

for Dyeing and Finishing of Textile Industry (GB4287-2012). The (dimensionless).municipal wastewater treatment plant uses a “hydrolysis +Orbal oxidation ditch” process with a treatment capacity of

approximately 120000 m3/day and produces effluent quality

exceeding the discharge limits of the Shandong Provincial

local standard Water Pollutant Discharge Standards for Urban

Wastewater Treatment Plants (DB37 4809-2025).

70 71ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Waste management

Management status

Risk analysis and response measures

The Company temporarily stores and disposes hazardous waste that it generates in strict compliance with the Directory of National Hazardous

Wastes and the Standard for Pollution Control on Hazardous Waste Storage. A dedicated hazardous waste storage facility has been established

Risk Description Risk Level Responses Assessment of Risks with appropriate infrastructure and hazardous waste is managed through classification. The transfer of hazardous waste is entrusted exclusively

and Opportunities to licensed hazardous waste treatment companies and unauthorized disposal of hazardous waste is strictly prohibited. The main hazardous

The Environmental Operations Management Regulations waste generated in the production and operation of the Company includes waste oil waste oil barrels waste paint buckets waste detergent

have been established requiring waste-generating barrels liners contaminated by chemical dyes waste lead-acid batteries laboratory waste liquid etc.; the main non-hazardous wastes brought

departments to strictly place waste at designated by the production and operation is the sludge. Waste generation volumes are calculated using direct measurement methods.Improper disposal of locations in accordance with regulations and prohibiting

hazardous waste through unauthorized disposal.non-standard channels Low risk Effective

causing environmental Through the establishment of the Emergency 2025

pollution Preparedness and Response Management Regulations

the Company is able to respond to incidents in a timely hazardous waste treated totaled 41 tons

and effective manner controlling their escalation and non-hazardous waste treated totaled 12115 tons

minimizing harm.A dedicated hazardous waste storage facility has been

established with classified collection of hazardous

Improper stockpiling waste and regular engagement of qualified third-party

and disposal of general organizations for disposal.Low risk Effective

solid waste causing Through the establishment of the Emergency

environmental pollution Preparedness and Response Management Regulations

the Company is able to respond to incidents in a timely

and effective manner controlling their escalation and

minimizing harm.Biodiversity protection

Lu Thai Textile is committed to biodiversity conservation and strictly complies with the Forest Law of the People’s Republic of China the

Regulations on the Implementation of the Forest Law of the People’s Republic of China the Forest Logging and Regeneration Management

Measures the Regulations on the Protection of Wild Plants of the People’s Republic of China the Wildlife Protection Law of the People’s

Republic of China as well as the United Nations Convention on Biological Diversity and other biodiversity-related laws regulations and

international conventions.To protect biodiversity we assess the dependence and impact of our business operations on natural resources organize tree-planting activities

for employees promote paperless offices and continuously work to reduce the negative impact of our operations on biodiversity. We actively

promote sustainable use of natural resources and contribute to ecological balance maintenance.?

72 73Employee’s Rights and Benefits/

Building a Harmonious Workplace

Together

Employees are the backbone and source of innovation for an enterprise. Unlocking employees’

potential and cultivating a sense of ownership are key to an enterprise’s sustainable

development. Lu Thai Textile implements a humanistic culture centered on caring employees

meeting their needs to the greatest extent possible while ensuring that employees have a

healthy and safe workplace. We provide employees with a platform to show themselves

and improve their abilities consolidate their knowledge and skills enrich their leisure

life and assist employees in solving difficulties. We truly care for and love our employees.UN Sustainable Development GoalsESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Respect and equality Indicator (Unit) 2023 2024 2025

Lu Thai Textile has always adhered to the principle of equal and friendly employment. It strictly complies with the laws regulations and Employee age

requirements of regulatory authorities of the countries where it operates and actively supports the international conventions including

the International Covenant on Economic Social and Cultural Rights and the Elimination of Discrimination in respect of Employment and Total number of employees aged under 30 (person) 9671 9814 9363

Occupation 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 and Proportion of employees aged under 30 (%) 42 41 40

retention of talents the Company adheres to the “all-inclusive” concept accepts all talents and promises not to determine employees’

salary and rank based on their gender age nationality ethnicity religion color language domicile place and other personal characteristics 13179 14174 14230

unrelated to work. The Company respects the legitimate rights of every employee and provides equal and free development space for every Total number of employees aged above 30 (person)

employee.Proportion of employees aged above 31 (%) 58 59 60

Education background of employees

Bachelor or above (person) 1319 1555 1571

Junior college (person) 3726 4517 3982

High school or below (person) 17805 17916 18040

Nationality

China (%) 51 46 44

Foreign employees (%) 49 54 56

010203

During recruitment we do not deliberately The Company is committed to ensuring A fair competition mechanism is adopted

differentiate based on gender race that gender beliefs ethnicity and other for promotion. The performance abilities

nationality etc. and we adhere to equal non-work-related factors do not influence a n d p ote n t i a l o f e m p l o y e e s w i l l b e Caring for female employees

opportunities. employees’ salaries or promotions. considered to select the best ones.The Company always pays attention to the rights and development of female employees and always puts special protection

for female employees into practice. Therefore the Company has formulated the Management Procedure for Protecting Female

Employees carried out various 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

Employee diversity them to maintain a good state in professional competition.Measures taken:

The Company adhered to gender equality eliminated gender discrimination and implemented merit-based hiring

under equal conditions.Indicator (Unit) 2023 2023 2025 The Company has ensured career development of female employees and provided broader development space for

female employees.Employee diversity The Company has established a female employees’ committee to assist female employees in solving their difficulties

of life and work and safeguarding their legitimate rights and interests.Total number of incumbent employees (person) 22850 23988 23593 In 2025 the psychological counseling office organized and received 32 sessions of exchanges and symposiums for

women workers.Total number of male employees (person) 9317 10432 9972

In 2025 16 training sessions were conducted for female employees with approximately 1600 participants. The training

mainly combined offline sessions with online courses focusing on women’s health care and mental health knowledge.Proportion of male employees (%) 41 43 42

A range of activities were organized—including reading sessions team-building outings recreational competitions

Total number of female employees (person) 13533 13556 13621 floral arrangement workshops and pastry-making classes — to promote the overall development of female employees with prizes awarded to outstanding participants.Proportion of female Employees (%) 59 57 58 Facilities and the environment of the designated maternity rest rooms have been continuously improved to provide

expectant mothers with a more comfortable and convenient resting environment.In 2025 a total of 2677 married female employees underwent health check-ups with total examination costs exceeding

RMB80000.

76 77ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Outreach activities

Female employee symposium

Mom’s cabin

Series of Activities on the International Women’s Day on March 8

78 79ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Human rights and labor

Compensation and benefits

The Company has established a comprehensive compensation and benefits system for employees. In accordance with the

law the Company makes contributions for employees to basic pension insurance medical insurance work-related injury

insurance and unemployment insurance. The Company strictly provides employees with paid annual leave home leave

marriage leave maternity leave work-related injury leave and other benefits in line with national standards. The Company

actively enhances employee communication channels by establishing and improving mechanisms such as labor unions

employee representative meetings and grievance procedures. The Company promptly accepts handles and provides

feedback on employees’ comments suggestions complaints and appeals regarding compensation and benefits effectively

safeguarding employees’ legitimate rights and interests.Indicator (Unit) 2023 2024 2025

Employment contract signing rate (%) 100 100 100

Social insurance coverage (%) 100 100 100

Signing rate of collective bargaining agreement (%) 100 100 100

Lu Thai Textile’s compensation system consists of hourly wage and piece-rate wage structures with salaries balanced

Cultural and recreational activities according to job roles. Based on this the Company continuously optimizes the salary structure and improves performance

appraisal standards to maximizes employees’ salary and benefits.Human rights protection

In interview process the Company actively examines identity cards diplomas etc. to prevent child laborers or underage

workers who have not finished legal compulsory education from being recruited by mistakes.The Company is committed to putting an end to any form of forced or compulsory labor. Employees are free to leave the

workplace after completing the work needed to be done within standard working time. The declaration system must be

implemented for overtime work to ensure that overtime 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 carries out due diligence on human rights protection.To fully incorporate employees’ insights and promote employees’ participation in Company management our labor

union collected employees’ opinions and suggestions through various channels.Health check-ups and free medical consultations for female employees

80 81ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Complaint and Suggestion Channels

The Company posts warning signs and occupational hazard notification cards in prominent positions in the workshop.The Company regularly maintains and repairs occupational hazard protection facilities to ensure their integrity and effectiveness.The Company organizes new employee symposiums and establishes an “on-site response + closed-loopfollow-up” mechanism: employees’ questions are addressed directly and communicated in detail during Each year the Company organizes one to two emergency rescue drills involving relevant departments and workshops to enhance

the sessions while all issues are systematically fed back to HR administrators of relevant departments. employees’ emergency response capabilities for sudden occupational hazard incidents.Clear requirements are set to formulate rectification plans advance coordinated resolution and track the Provide employees exposed to occupational hazards with standardized and effective personal protective equipment (PPE)

implementation progress throughout the process. In 2025 we conducted in-depth engagement with a total ensuring regular procurement distribution and supervision of PPE usage to prevent occupational diseases. The Company installs

of 500 new employees and addressed their concerns and needs in line with our actual conditions. rinsing facilities in places with corrosive substances such as acids and alkalis or risks of chemical burns. Besides the Company

Every year employee representatives are elected through employee elections and the Labor Union maintains services and upgrades occupational disease protection facilities.regularly holds employee representative assemblies to promote activities of the Labor Union and Organize first aid and heatstroke prevention training to enhance employees’ emergency response skills. In 2025 the Company

communicate with employees. conducted 16 first aid training sessions and 22 heatstroke prevention training sessions.Suggestion boxes are set up in various plants and departments of the Company to collect employees’ The Company popularizes health care knowledge each month and provides first-aid medical kits for employees with first-aid

opinions on the Company’s policies management processes and salary benefits. The Labor Union medicine supplemented for 271 times on average per month in 2025.organizes them once a month and provides feedback to the Company’s senior leadership to discuss

improvement plans. The Company distributes heatstroke prevention drugs in summer for convenient use by employees.Hotlines and email addresses are set up to encourage employees to actively voice their opinions on the In 2025 no any major public health events occurred in the Company.Company’s development.Tel.: (86) 533-5261634

SMS: 18560301315

Email: gonghui@lttc.com.cn Employee Physical

Chairman Reception Day on the 25th of each month—direct face-to-face communication with employees. Examinations

Occupational health and safety

First Aid Training

The Company pays high attention to its employees’ occupational health and safety so it has established and improved

the management system of occupational health and safety implemented risk control measures and actively inspected and

responded to occupational disease hazards effectively safeguarding the occupational health and life safety of every Lu Thaier.Prioritize safety before production; no

production without safety. Strictly adhere Source management and green

to operating procedures to prevent safety manufacturing. Emphasize

accidents. Lu Thai EHS prevention and a combination of prevention and control measures.Comply with environmental laws Philosophy

and standards and fulfill corporate

social responsibility in environmental

protection. Ensure management practices Safety first prevention-oriented and

align with compliance requirements for a comprehensive management.safe working environment.Measures taken:

Before taking up their posts all new employees undergo pre-employment physical examinations to prevent personnel with

occupational contraindications from engaging in related positions. During employment the Company conducts occupational

health examinations in compliance with regulations and reasonably adjusts job assignments based on the examination results.Upon leaving their posts employees undergo post-employment occupational health examinations to ensure they leave in good

health.The Company has conducted regular occupational health education and training for employees and established occupational

health surveillance archives for employees realizing the standardized management featuring “one archive for one person”. Personal Protective Equipment Occupational Hazardous Factor Detection

Conduct annual occupational hazard assessments in key areas with immediate rectification for any testing points that fail to

meet standards.

82 83ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Occupational

Hazardous Countermeasures

Factors

· Take airtight ventilating and dedusting measures for cotton blending

machines and scutchers in pre-spun process

· Adopt the approach of wet sweeping for the workshop to take away the dust

Dust accumulated on the surface as much as possible

· Regularly clean the air duct

· Distribute sufficient dust masks that conform to international standards

· Distribute items for heatstroke prevention for high-temperature posts in

the workshop

High temperature and · Add Auricularia auricula and pig blood curd to workshop meals to

high humidity enhance employees’ ability to defend against occupational diseases

· Adjust the air supply and exhaust volume in the workshop

· Equip employees with disposable noise-reducing earplugs and replace

Noise and vibration them regularly

Summer camp program

Talent management Development of reserve talent pool

The Company has formulated and implemented the 2022-2026 Key Position Recruitment Plan establishing the Three-Year Career Development

Plan for Undergraduate and Above Employees of Lu Thai Group for newly recruited key position personnel and organized various departments

to formulate the Measures for the Management of the Tier-Two Talent Pool achieving “position-based recruitment and targeted development”

for personnel in key positions. In 2025 totally 86 key post personnel were recruited and totally 118 second-level talents were reserved for all

Talent acquisition departments.Career Planning for Employees

Lu Thai scientifically forecasts talent demand by taking into account 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 attracts professionals from various fields ensuring a strategic talent reserve to maintain

long-term competitiveness and foster a corporate environment where employees can fully utilize their skills and potential. At Excellence Plan

the same time the Company steadily advances international talent recruitment in the United States Italy Japan Vietnam

Cambodia Myanmar and other countries to support its overseas business expansion. Elite Plan

Additionally to promote internal talent mobility and encourage employees to achieve diversified career development Senior managerial

employees can apply for internal job postings. Those who meet job requirements and pass interviews can transfer positions personnelResearch and study

following the Company’s recruitment procedures. Employees and departments can also submit internal transfer applications Flight Plan Middle-level engineering

based on operational needs. managerial personnel

Grass-roots

This year the summer camp program organized by the Human Resources Department brought together outstanding Set-sail Plan Re-building managerial personnel System management

students from 14 universities including Qingdao University Inner Mongolia University of Technology Qiqihar University engineeringIncubation Managing operations

Dalian Polytechnic University Beijing Institute of Fashion Technology Tiangong University Hebei University of Science and Onboarding Performance-orientedengineering Department manager

Technology Zhongyuan University of Technology Xi’an Polytechnic University Jiangnan University Soochow University personnel Cross-department

Donghua University Wuhan Textile University and Zhejiang Sci-Tech University. Through a multidimensional experience Cultivation

Managing the department coordination

Professional backbone Maximizing the Company’s

model of “see listen do and feel” the program enabled students to gain a comprehensive and in-depth understanding of engineering Managing others benefits

our business development and culture while also effectively enhancing our employer brand influence across universities. This year’s new employee Considering both individual Giving strategic support

Self-management and team

Basic skills training Individual’s success and

team’s success

Zero to one One to two Three to five Over five years

year years years

84 85ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Employee training and development External personnel training

To help local unemployed individuals broaden employment channels and enhance their employment competitiveness Lu

Lu Thai Vocational Training School is dedicated to serving regional economic and social development aligning with market Thai Vocational Training School provides specialized vocational skills training and job-specific skills enhancement training.demand and focusing on employment promotion and industry development needs. The school is committed to cultivating After training participants take certification exams and those who pass receive relevant certificates. In 2025 a total of 122

skilled professionals and provides training in employment skills skill enhancement and competency development for unemployed individuals received training among whom 106 obtained Specialized Vocational Ability Certificates and 16 obtained

unemployed individuals rural migrant workers and university students. Skill Level Certificates.Internal employee training

The Company focuses on establishing and improving a standardized training system for all positions clearly defining the

development cycle core training content and regularization assessment standards for different roles. Through a diversified

training model of “theoretical instruction + hands-on practice + mentor coaching” the Company helps new employees rapidly

enhance their professional skills and achieve independent job placement as soon as possible.At the same time the Company continues to improve our full-cycle vocational training system covering multiple dimensions Unemployed

such as onboarding training for new employees on-the-job skills enhancement training and advanced management capability worker training

training. Based on the development needs of employees in different positions and at different levels the Company precisely

matches training resources builds a clear career advancement pathway for employees and helps employees achieve the shared

enhancement of personal value and corporate value.A total of 23593 employees took part in the vocational training in 2025 with a coverage rate of 100%.Multi-dimensional promotion mechanism

Indicator (Unit) 2023 2023 2025

Training participants (person) 22850 23988 23593 The Company implements horizontal and vertical dual channel development ( job promotion and cross-job promotion) with

promotion in the directions of management line and professional lines (the former is achieved through job changes while the

Average training hour (hour) 56 56 56 latter is achieved through internal professional title appraisal). Targeted training is carried out based on personnel characteristics

and personal preferences achieving multi-dimensional development space for employees.Training coverage rate (%) 100 100 100

Production Line Position Functional Department Position

Promotion Planning Chart Promotion Planning Chart

Functional

Factory management department

personnel managemen

personnel

Team Leader

Reserve talents

Reserve talents

Team Leader

Onboarding training Training for frontline managers Excellent employee

Excellent employee

Multi-skilled worker

Regular employee

Skilled worker

Worker at the production line

Employee skills training Promotion and development

86 87ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

In 2025 the Company appointed two employees as Chief Technicians 33 employees as Senior Technicians and 103 employees

as Technicians. A total of 476 employees were Senior Technicians 505 employees were Intermediate Technicians 509 employees

were Level 2 Junior Technicians and 690 employees were Level 1 Junior Technicians. During the term of appointment they

were provided with monthly skills allowances of RMB2500 RMB1500 RMB1000 RMB500 RMB300 RMB200 and RMB100

respectively.We appointed seven employees as Level 1 Engineers 45 employees as Engineers 411 employees as Assistant Engineers and 146

employees as Technicians. During the term of appointment we provided engineering and technical allowances of RMB1000

RMB800 RMB400 and RMB200 per month respectively.We appointed one employee as a Level 1 Designer five employees as Designers 17 employees as Assistant Designers and two

employees as Design Technicians. During the term of appointment we provided professional design allowances of RMB1000

RMB800 RMB400 and RMB200 per month respectively.Since 2003 the Company has established an internal professional title evaluation appointment and allowance system actively Technical competition

promoting the values of honoring labor valuing skills and fostering creativity. This has created a sound corporate culture

that emphasizes and respects skill development encouraging employees to learn practice and hone professional skills. The

Company has taken a leading position in the industry in cultivating and evaluating skilled talent. The internal professional titleevaluation and appointment system has become a key platform for implementing the Company’s philosophy of “valuing [Case] The Company’s Activity of Evaluating the Excellentnurturing and utilizing talent”. This professional title evaluation and appointment activity based on summarizing experienceand in light of the new situation and changes we currently face adhered to the principle of “being grounded in standardsstrengthening guidance and emphasizing practical effectiveness” effectively driving the comprehensive improvement of our The Company launched the activity of evaluating the excellent in order to further promote the excellent corporate culture of

employees’ knowledge and skills as well as their professional competence. the Company commend outstanding collectives and employees who performed outstandingly in the past year and motivate

everyone to innovate their performance achieve new breakthroughs and make new contributions in the next year. A total

of 10696 participants took part in the evaluation process. Through a graded assessment the final selections included 2631

Qualification support “Advanced Production (Work) Individuals” 114 “Company Model Employees” 10 “Labor Models” and 41 “AdvancedCollectives”. The total bonus awarded amounted to RMB3 million.Case

This year nine employees were encouraged to take the Certified Safety Engineer Examination with one

employee passing and obtaining certification.Promoting skills development

Lu Thai Textile actively carries out various skill competitions and encourages its employees to enhance their learning and

capabilities through these events to refine their professional skills and define their vocational objectives and orientations.The Company also encourages its employees to take vocational qualification examinations so as to transfer what they

have learned into practical output. These initiatives continuously promote employees’ development toward high-level

specialization and support the Company’s aspiration to become a world-class enterprise characterized by learning skills

and innovation.[Case] The Company’s Thirty-fifth Session of Technical Demonstration and Competition

From April to July 2025 the Company held the thirty-fifth session of activity of

technical demonstration and competition. A total of 46 companies and 7810

personnel covering 605 types of work in total took part in the competition.Through the processes of publicity and mobilization training and learning post

drills and preliminary and final competitions finally there were 29 champions

of single skills of departments 3058 winners of technical demonstrations

and competitions 659 “excellent versatile workers” and 93 “excellentteams” 10 single-skill champions of the Company and 125 “technicalmodel employees” 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 skill

competition hence achieving the objectives of promoting production safety

management benefits and development through competitions.

88 89ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Benefits and care Emphasis on employees’ living and dining conditions

Lu Thai currently has more than 20000 employees. The Company attaches great importance to the quality and services of employees’

We have always upheld the philosophy that “employees are an enterprise’s most valuable resource” firmly believing that stable board and lodging and regularly carries out satisfaction surveys of employees’ board and lodging each year to constantly improve logistics

employment for employees is an important foundation for our high-quality development. Therefore we continuously enhance employee management and services to strive to provide employees with nutritionally balanced dining conditions and a convenient and comfortable living

satisfaction and sense of belonging striving to meet various employee needs to the greatest extent possible. environment.We provide our Group’s employees with a wide range of non-salary benefits such as occupational health examinations employee welfare

physical examinations commuter shuttle buses travel allowances and welfare dormitories etc. At the same time we establish dedicatedbenefits for employees with special needs such as lactation rooms dedicated health examinations for female employees and condolence Continuously enhance employees’ job skills by adhering to the principles of “standardization andpayments for employees in hardship etc. regulation” in food preparation. Advocate for quality awareness among all employees starting with basic

dishes optimizing cooking methods mastering heat control ensuring precise seasoning and maintaining

stable food quality.Non-statutory benefits available to eligible

Develop on-duty meal menus through a combination of intelligent planning and employee surveys ensuring

the accumulation 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 and

Travel allowance Employee health Employee activity suggestions and continuously improving food quality.Communication Staff dormitoriescheck-ups Government talent Staff canteen center allowance Free working meals Promote the upgrade of smart dining facilities enabling diversified intelligent management methods such as Free heatstroke Library

Shift allowance apartments Convenient pastries card QR code and facial recognition payments self-service card replenishment intelligent food sampling prevention supplies Orchestra

Overseas assignment Housing purchase and fruits morning health checks and AI monitoring improving restaurant attendance rates and convenience.Cooling fruits

allowance subsidy

Team-building

On-site medical room activities Adjust menus according to seasonal changes ensuring a cool taste in summer and hot soups and hot dishes in

Shuttle service winter. In summer meals amid shift are added with seasonal fruits and mung bean soup to prevent employees

from heatstroke and reduce heat from employees.Establish a provincial-level healthy enterprise to ensure food safety create a healthy dining environment and

continuously promote health awareness by advocating “low salt low sugar and low fat” prioritizing health.Work support Health Living Catering Leisure activities

To reflect the Company’s humanistic care make birthday cakes for employees free of charge. Meanwhile

launch a cake ordering service and undertake the production of large and specialty cakes to better serve

employees.Mother and baby room Financial assistance Academic In 2025 employee dining satisfaction reached 83.95%.Traditional festival Women-specific health qualification subsidies for employees’

gifts check-ups for talent recruitment children attending

Annual meeting raffle Specialized training for Talent skills university

Anniversary enhancement award female employees Consolation Postdoctoral research

celebration prize Psychological payments for workstation

activities counseling room for Equity incentive for employees in need

female employees key employees Major illness assistance fund

Holidays Protection for female Talent support Assistance

employees

In terms of statutory benefits we provide employees with statutory holidays rest days sick leave work injury leave marriage and bereavement

leave 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 and work injury

insurance) and housing provident fund.Holiday Gift Distribution Bonus and Benefits Distribution Diverse Dishes Pastry Category

90 91ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Air conditioners and free Wi-Fi are uniformly equipped in all dormitories in the Company. Relief of Employees in Difficulties

Each floor in the apartment is equipped with chess and card room television hall and smoking room.Each building in the apartment areas is equipped with a fully automatic coin-operated washing machine. Implementing the people-foremost policy and caring for employees have always been an important part of the Company’s corporate

24-hour unmanned supermarkets are set up in the apartment areas to provide employees with conditions of culture. The grassroots branches of the Company visit and comfort employees every year go deep into the front line of production

convenient and fast shopping. and understand the living condition of employees through multiple channels. They also take the responsibility of “the first insider”

actively find out the state of mind of employees and take the initiative in solving their problems. The Company has established a bailout

The apartments provide the services of cleaning working clothes and articles of bedding free of charge and set foundation and distributes assistance funds to employees with family difficulties every year hence helping employees to go through

up locations for replacing articles of bedding to achieve that such articles can be replaced whenever they are their difficult pass. In 2025 a total of 88 employees received assistance with relief grants totaling RMB194000.dirty.Free drying and storage of bedding are also provided for employees during seasonal changes.Each park area is equipped with bathing facilities so that employees can have baths conveniently.

84 disinfectant is sprayed on dormitories and bathrooms every day to ensure a healthy living environment.

Independent shower rooms in university student apartments.Distribution of Relief Funds

Summer-vacation daycare program

In the scorching summer care fills Lu Thai. To effectivelyaddress employees’ “diff icult ies in arrangingsummer childcare for their children” and to enhance

employees’ sense of belonging and well-being Lu ThaiEmployee Apartments Supermarket Group carefully organized the “Employees’ Aid for theFuture” summer vacation care class for employees’

children which officially opened on July 10. Liu Zibin the

Company’s Chairman and President made a special

Employee care and support visit to the care class site to warmly visit and express

his regards to the children in care and the hardworking

teaching and administrative staff and to learn first-hand

about the operation of the program.Golden Autumn Scholarship This summer care class ran from July 10 to August 26

lasting 40 days. It was held in two sessions with five

In the crisp air of golden autumn fruits hang heavy on the branches. With our classes in each session accommodating a total of 300

original aspiration we build dreams and the future is promising. This year Lu employees’ children. Centered on four key themesThai Group again ushered in a bumper season for the National College Entrance of “ingenuity traditional Chinese culture the spirit ofExamination. More than 330 employees’ children achieved outstanding results labor and safety protection” the care class offered

and were admitted to universities setting a record high for admissions across all a wide range of activities such as recitation writing

years. This is both a glory for families and a source of pride for Lu Thai reflecting drawing handicrafts singing and gesture dance creating

the fine family tradition among our employees of respecting culture and valuing a safe beneficial and joyful summer environment

education and further demonstrating the deep commitment of the enterprise to for employees’ children. It enabled children to grow

grow together with employees. through learning and gain through interaction spending

a fulfilling and unforgettable summer vacation.On August 18 Lu Thai Group held the 2025 “Golden Autumn Scholarship”

award ceremony. Leaders including a member of the Party Leadership Group Daily Activities and Performance of the Summer

and Deputy Director of the Zichuan District Bureau of Education and Sports and Daycare Program

Liu Zibin the Company’s Chairman and President attended the ceremony

and presented scholarships to employees’ children who were admitted to

universities for further study this year. Students admitted to undergraduate

programs received RMB5000 each and students admitted to junior college Scholarship Awarding Ceremony of the

programs received RMB3000 each. Golden Autumn Scholarship Program

92 93Energy Conservation and ESG Report 2025 Chairman's Statement About the Company ESG Governance Products and Services Production Operations Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

[Case] The 11th Employee

Sports Meeting

Mid-autumn family banquet

Colorful flags flutter against the clear sky and waves of cheers shake the

green field.On October 6 Lu Thai Group’s 2025 mid-autumn family banquet themed

“Full Moon at Mid-autumn Love Fills Lu Thai” was held. Company On May 24 Lu Thai Stadium was filled with blooming flowers fluttering

leaders including Liu Zibin Chairman and President gathered with flags and a roaring crowd as the Lu Thai Group 11th Employee Sports

representatives of young employees while employee representatives Meeting kicked off in a vibrant youthful atmosphere.from overseas production bases joined via video connection to celebrate The opening ceremony of this Employee Sports Meeting featured 14

the Mid-Autumn Festival together. representative team formations with nearly 3000 participants taking

Chairman Liu Zibin stated that the Group will not forget every member part in the formation display. A newly added performance formation

of the Lu Thai family striving away from home. With the commitment of strengthened the promotion of corporate culture highlighting our

sacrificing the small family for the greater good everyone has enabled cohesion and centripetal force. This Sports Meeting included a total of

the Lu Thai spirit to be carried forward overseas making our corporate 28 teams and more than 2000 participations across 31 events including

culture more open and inclusive. Through professionalism and hard track and field and fun events. On the field speed and strength collided

work everyone has built a bridge for our global development. Every unity and perseverance intertwined. With high spirits Lu Thaiers

moment of perseverance in a foreign land has made our globalization interpreted the sportsmanship of “Faster Higher Stronger Together”

blueprint clearer. The Company and our families will always be the and further demonstrated Lu Thai’s never-stopping spirit of striving.warmest harbor and strongest support. At the same time the Chairman In the end the Representative Team of LuFeng Dyeing and Finishing

encouraged young employees to have ideals take responsibility endure Plant II the Representative Team of LuFeng Weaving Plant and the

hardship and work hard demonstrating the vigor and sharpness of Representative Team of the Sample Plant won first second and third

youth earning a broader stage for career development and becoming a place respectively in the overall team score. Lu Thai Vocational School

vibrant force supporting the Company’s growth. won the Spiritual Civilization Award and the Yarn Product Line Knitted Sports Meeting Competition Scene

Fabric Product Line LuQun Textile and LuRui Unikorn won the Excellent

Organization Award.Enriching employees’ cultural and recreational life

[Case] The 38th Anniversary Celebration–

The Company regularly organizes various cultural sporting and recreational activities to enrich employees’ spare-time life boost Gala Performance

employees’ mental outlook and lead employees to achieving the balance between work and life hence promoting employees’ sense of

belonging to the enterprise and enhancing the Company’s cohesion. On June 6 2025 United in Purpose to Embark on a New Journey Striving

to Compose a Glorious Chapter: A series of activities celebrating the 38th

anniversary of the establishment of Lu Thai Group were held.[Case] “Tribute to Strivers A Song of Striving” – 2025 New At 17:00 on June 6 a reception celebrating the 38th anniversary of the

Year Concert establishment of Lu Thai Group was held. Liu Zibin the Company’s

Chairman and President and other Company leaders as wel l

On February 7 2025 the “Tribute to Strivers A Song of Striving” Lu Thai Group 2025 New Year Concert was grandly held at Lu Thai Academy. as representatives of model workers and exemplar y individuals representatives of employees assigned to overseas production

The concert featured a full performance and accompaniment by the Lu Thai Textile Orchestra. bases representatives of both new and long-serving employees and

representatives from the Party Labor Union and Youth League totalingThe concert was divided into three chapters. In the first chapter—”Hard Work and Striving Create Great Achievements” the songs The Story of more than one hundred people attended. Reception Scene

Spring Labor Lifts the Chinese Dream Crossing Love and the orchestral ensemble Dance of the Golden Snake showcased that over the thirty-

eight-year journey of struggle Lu Thaiers weathered storms together and stood together through thick and thin advancing hand in hand toward Subsequently the gala performance was grandly held at Lu Thai

a common goal. Academy. The Dean of the Lu Thai Textile and Apparel College of

Shandong University of Technology the Principal of Zibo Polytechnic

School and Liu Zibin the Company’s Chairman and President and

heads of various departments and more than one thousand employee

representatives watched the performance. The gala opened with the

dance A Riot of Color conveying the best wishes of all employees for

the 38th anniversary of the Company’s establishment. The program

was performed and expressed in three chapters: Achieving Great

Undertakings Through Hard Work Creating First-class Excellence

Through Unity and Hard Work and Continuing the Struggle Toward

the Future showcasing in a focused manner the positive and uplifting

spirit of textile workers and the aspirations of Lu Thaiers for a better

life.Gala Scene

During the gala Chairman Liu Zibin solemnly presented awards to

employees who had completed 10 years of overseas service conferred

honorary medals and paid high tribute to the strivers who are embarking

on the Company’s overall internationalization journey.Concert Performance Scene

Award Presentation Ceremony

94 95ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

[Case] Swimming Competition [Case] The 27th Session of Employee Basketball League

[Case] Swimming Competition In October 2025 Lu Thai Group held the 27th Employee Basketball League. A total of 12 teams participated in this league which lasted three

On August 16 2025 Lu Thai Group’s “Swim” Beyond Strive to Lead: 2025 days and featured 38 fiercely contested games. The teams worked together in unity and fought tenaciously delivering one thrilling and

Swimming Competition kicked off with great enthusiasm. This event featured gripping game after another for the audience. On the court there were not only smooth flowing teamwork and coordination but also long-

a wide range of programs including competitive events such as the men’s range three-point shots with pinpoint accuracy. We also saw “striving” in the midst of hard-fought competition “collaboration” through

and women’s 50-meter races the men’s 100-meter race and the men’s unity and teamwork and “innovation” in the pursuit of excellence.

4×50-meter relay as well as fun and heartwarming segments such as the parent- In the end the LuFeng Company team relying on seamless coordination precise passing and solid offense and defense claimed the

child 50-meter race “landlubber” swimming and parent-child interactive championship trophy. Team 1 of the yarn-dyed fabric product line won the runner-up while Office Team 2 and Office Team 1 placed third and

games. It balanced competitiveness with participation and provided employees fourth respectively.of different age groups and varying swimming abilities with a platform for

showcasing their skills and engaging with one another.The venue was filled with excitement with cheers and splashes blending into

an energetic symphony. At the referee’s crisp whistle competitors in each

event leapt into the pool in succession. Everyone focused intently and paddled

with all their strength engaging in fierce competition in the pool. Every sprint

demonstrated the resilience and refusal to give in that define Lu Thaiers and every Swimming Competition Venue

pursuit embodied the fighting spirit of “Faster Stronger”.[Case] Lu Thai

Electroacoustic Band TourFrom August 18 to 21 the Lu Thai electroacoustic band toured various Company’s campuses under the theme “Hand in Hand Strive for theFuture”. Basketball Match Scene

The stage was brilliantly lit and the band showcased a versatile musical style. The lively melody of Our Times kicked off the event. When Blue

Lotus began employees in the audience spontaneously sang along creating a lively atmosphere. The impassioned rendition of Serve the [Case] The 25th Session of

Country with Utmost Loyalty resonated with the entire audience drawing thunderous applause. The cast and crew also performed Truly Love Employee Soccer League

You Legend The Moon Represents My Heart Love Song of the Western Sea Gallop Forward Your Answer and other songs. Classics and pop

selections intertwined to create a rich audio-visual experience.In September 2025 the Company organized the 25th Employee

Football League. A total of 11 teams participated in seven days and 29

matches of intense competition.The atmosphere at the venue was vibrant and players from both

sides were full of energy and high morale. Under tight marking and

pressure from opponents they changed direction nimbly to break

through the defense. In aerial challenges they leapt into the air

showcasing strength and athletic beauty. Every attack and defense

embodied the team’s tacit understanding and passion. In the end

Team 1 of the yarn-dyed fabric product line won the championship of

Tour Performance Scene this league with steady tactical execution and teamwork. The Security

Department representative team fought tenaciously to win the

[Case] “Autumn Rhythm” Lawn Concert and Lu Thai runner-up and the LuFeng Company representative team defeated

Group College Student Networking Event Team 2 of the yarn-dyed fabric product line in a penalty shootout to

take third place.On August 26 the “Autumn Rhythm” lawn concert and Lu Thai Group college student networking event was held at Panyang Villa Hotel.Along with the upbeat melody of Our Time this youth music feast kicked off.Under dazzling lights multiple performers took turns on stage presenting

songs in a variety of styles. The melodious tunes lingered over the lawn and

the atmosphere on site continued to heat up. Young employees could not

help swaying to the music and the glow sticks in their hands converged into a

twinkling “galaxy” with youthful energy and passion everywhere. During the Football Match Scene

interactive segment “listening and guessing the song” tested musical sense and

memory while “answering the wrong question” was full of fun and surprises.The two games drew continuous laughter and further brought young employees [Case] Welcoming 2026: Corporate

closer together. Culture Theme Gala Evening

This “Autumn Rhythm” lawn concert and college student networking event

innovatively adopted an “outdoor music + fun interaction” format. It not only On December 30 2025 the Lu Thai Group Corporate Culture Theme Gala Evening themed “Culture Leads the Way to a New Journey Unitingallowed young employees to relax in pure and beautiful melodies but also built a Hearts and Strength to Compose a Glorious Chapter” was held at the Lu Thai Academy. The gala featured a total of 13 programs presented in

platform for communication and interaction. four chapters. The performers were radiant and high-spirited fully reflecting the significance and spirit of our corporate culture philosophy.Event Scene

96 97ESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Comparison of overall satisfaction from 2012 to 2024

The overall satisfaction rate in the 2024 employee satisfaction survey was 88.4 with a year-on-year growth rate of 0.23%. The

specific analysis is as follows:

Year 2012 2013 2014 2015 2016 2017 2018 2019 2022 2024

Satisfaction 82.1 83.2 83.4 84.2 86.2 87.3 87.8 87.9 88.2 88.4

Year-on-

year / 1.30% 0.20% 1.00% 2.40% 1.30% 0.60% 0.10% 0.30% 0.23%

Gala Scene

Employee satisfaction survey

Satisfaction Linear (overall satisfaction)

To scientifically assess employees’ satisfaction with corporate management working environment compensation and benefits

and other aspects and to accurately identify management shortcomings the Company conducted employee satisfaction surveysand implemented issue rectification across the Group. This survey focused on the core objectives of “analyzing the reasons for lowsatisfaction assessing the impact of policy changes improving shortcomings in a targeted manner and enhancing team cohesion”.It covered six core dimensions: overall identification working environment direct supervisor teamwork learning and development

and compensation and benefits. The survey respondents covered all Company’s employees (excluding management personnel). It

was conducted in the form of an online questionnaire via the Lu Thai OA system and standardized analysis was performed using the

Likert Five-Point Scale method to ensure the objectivity and scientific rigor of the survey results.This survey received extensive employee participation. A total of 9255

questionnaires were collected accounting for 89% of the total number of

employees surveyed. After screening 8900 valid questionnaires were obtained

96% with the valid questionnaire rate reaching 96% fully reflecting employees’ attention to corporate management and their enthusiasm for participation. The

valid questionnaire survey results showed that the average overall employee satisfaction score was

rate 88.4 points (out of 100) an increase of 0.2 points from 88.2 points over the same

period last year.

98 99Community Engagement/

Striving to Be an Outstanding

Corporate Citizen

In the face of a complex and severe external environment Lu Thai assesses the situation makes

unified decisions and overcomes difficulties. The Company assists the national education

and community public welfare undertakings and provides strong impetus for local economic

development.UN Sustainable Development GoalsESG Report 2025

Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

[Case] Beijing Institute of Fashion Technology Visited the Company to

Supporting education initiatives Conduct a University-enterprise Cooperation Exchange Event

On January 16 2025 a delegation led by the Beijing Institute of Fashion Technology visited the Company to conduct an enterprise

visit and research survey and to carry out exchanges on school-enterprise cooperation. At the symposium attendees conducted in-

Education is a long-term endeavor that benefits future generations. Over the years Lu Thai has actively contributed to education support depth exchanges and discussions on school-enterprise cooperation talent development mechanisms textile technology industry

programs investing a total of over RMB45 million in educational assistance. The Company has established cooperative education programs development trends and other topics.with more than 20 vocational and higher education institutions demonstrating its strong commitment to social responsibility through concrete

actions. 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.[Case] A Delegation Led by Zhu Yongmin Vice President of Xi’an Polytechnic

University Visited the Company for Research Tour

On July 26 2025 a delegation led by the Vice President of Xi’an Polytechnic University visited the company for enterprise research

and career opportunity exploration.At the exchange meeting Zhang Shougang introduced our production and operations strategic planning and school-enterprise

cooperation. He stated that he hoped both parties would build on the existing cooperation outcomes to further deepen synergy

integrate their strengths in areas such as scientific research innovation and talent development and jointly explore diversified

innovative talent development models. Welfare and charity actions

The Vice President of Xi’an Polytechnic University provided a detailed introduction to the School’s achievements in running the

institution talent cultivation and employment-related work. He expressed the hope that the two parties could establish a regular The Company has always adhered to its original mission actively participated in public welfare and charity activities and continuously

communication mechanism to promote precise alignment between talent cultivation and industry needs achieve resource sharing donated to public welfare and charity projects to share the achievements of enterprise development with society through practical

and complementary advantages and support the enterprise’s high-quality development. actions.[Case] Chairman Liu Zibin’s Visit to Centenarians

On October 28 on the eve of the Double Ninth Festival Chairman Liu Zibin

also President of the Company visited centenarians across the district

extending his holiday greetings and best wishes.At each stop the Chairman had a cordial conversation with their family

members learned in detail about their health conditions and presented

condolence payments. He also urged the elderly’s children and relatives

to take good care of the elderly’s daily living and personal needs. Seeing

that the elderly were in good health and their families were harmonious

the Chairman was genuinely pleased for them. The elderly and their family

[Case] Fan Guijun From Shandong Vocational College for Light Industry Visited the Company for Research Tour members also expressed their heartfelt gratitude for this weighty care and

concern.Previously a ceremony was held in which Chairman Liu Zibin donated

On April 2 2025 a delegation led by Shandong Vocational College for Light Industry visited our Company for a research tour. RMB2 million to centenarians across the entire district and district leaders

Chairman Liu Zibin hoped that on the basis of research and exploration both the school and the enterprise would promptly attended the donation ceremony.summarize their experience and develop their cooperation into a replicable and scalable branded model for running schools. The

Chairman stated that Lu Thai will continue to support the development of education as always and are willing to work hand in hand

with the College to deepen cooperation continuously explore new models of school-enterprise collaboration take talent-related

work as an important pillar and achieve a win-win-win outcome for the school the enterprise and the students.On-site Visit Scene

The College leadership stated that the College will focus on corporate needs promote small-class high-quality and precision

education take root in the regional economy and better serve corporate development. The College will actively explore areas

including the curriculum system talent development and school-enterprise cooperation and look forward to working with Lu Thai [Case] Donation of Shirts to the Textile Vision

to develop more areas of cooperation. Science & Education Foundation

To build a socialist harmonious society carry forward the spirit

of humanitarianism and promote the development of public

welfare undertakings Lu Thai donated 10000 shirts to the

Textile Vision Science & Education Foundation.[Case] Poverty Alleviation and Assistance for Those in Need

Luthai Group supported the national rural revitalization strategy by assisting people living in poverty and donating to

rural development projects. In 2025 the Company distributed Spring Festival gifts—over 7000 buckets of cooking oil—to

residents in 16 surrounding villages and communities.

102 103Chairman's Statement About the Company ESG Governance Products and Services Production Operations Energy Conservation and

ESG Report 2025

Environmental Protection Employee's Rights and Benefits Community Engagement Key Performance Indicators Lu Thai Textile Co. Ltd

Key Performance Indicators

Economic performance

Waste discharge

Indicator (Unit) 2023 2024 2025

Indicator (Unit) 2023 2024 2025

Operating revenue (RMB’00000000) 51.96 60.91 59.04

Hazardous waste generation (ton) 41 36 41

Payments to contractors and service providers

2.613.34

(RMB’00000000) 4.72 Non-hazardous waste generation (sludge) (ton) 12462 11420 12115

Total employee remuneration (including compensation and

benefits) (RMB’00000000) 15.49 16.07 15.9

Payments to capital providers (RMB’00000000) 1.85 3.32 2.6 Greenhouse gas emissions

Payments to the government (RMB’00000000) 3.72 3.55 4.5 Indicator (Unit) 2023 2024 2025

Retained economic value (RMB’00000000) Mobile sources emissions (tons of carbon dioxide 3.10 1.97 4.41 equivalent) 2116 1922 1871

Stationary source emissions (tons of carbon dioxide

equivalent) 10520 10859 12330

Category 1 emissions (tons of carbon dioxide equivalent) 12636 12781 14201

Environmental performance

Consumption of purchased power (tons of carbon dioxide

Data related to wastewater and sewage equivalent) 169964 163301 152068

Indicator (Unit) 2023 2024 2025 Consumption of purchased heat (tons of carbon dioxide 121992 127643 124225

equivalent)

COD (Chemical Oxygen Demand) in discharged wastewater

283248243

(ton) Category 2 emissions (tons of carbon dioxide equivalent) 291956 290944 276293

Ammonia nitrogen content in discharged wastewater (ton) 3 3 2 Total (tons of carbon dioxide equivalent) 304592 303725 290494

Industrial wastewater discharge (10000 cubic meters) 311 291 261

*D=ρ*Q*10-6 (D—the emissions of a certain pollutant during the accounting period t; ρ—the mass concentration of a certain pollutant Energy consumption density

in wastewater mg/L; Q—the wastewater discharge volume during the accounting period m3)

Indicator (Unit) 2023 2024 2025

Greenhouse gas emission intensity (tCO2e per million

Air pollutant emissions revenue) 51.1 49.9 49.2

Indicator (Unit) 2023 2024 2025 Total energy emission density (tons of standard coal per million revenue) 13.1 12.9 12.84

Sulfur dioxide in emitted exhaust gas (ton) 1 0.2 0

Nitrogen oxides in emitted exhaust gas (ton) 3 1.03 1.65

*D=ρ*M10-9 (D—the emissions of a certain pollutant during the accounting period t; ρ—the mass concentration of a certain pollutant

in exhaust gas mg/m3; M—the exhaust gas flow rate during the accounting period m3)

104 105ESG Report 2025

Products and Services Production Operations Employee's Rights and Benefits Key Performance Indicators Lu Thai Textile Co. Ltd

Human resources Junior college (person) 3726 4517 3982

Protection of employee rights and interests High school or below (person) 17805 17916 18040

Indicator (Unit) 2023 2024 2025 Nationality

Employment contract signing rate (%) 100 100 100 China (%) 51 46 44

Social insurance coverage (%) 100 100 100 Foreign employees (%) 49 54 56

Signing rate of collective bargaining agreement (%) 100 100 100

Number of female employees with parental leave during the Employee turnover

672796742

year (person)

Number of male employees with parental leave during the Indicator (Unit) 2023 2024 2025

year (person) 287 182 147

Total number of new employees (person) 3338 6648 7017

Employee diversity

Employee turnover rate(%) 13 20 20

Indicator (Unit) 2023 2024 2025

Employee diversity

Employee training

Total number of incumbent employees (person) 22850 23988 23593

Indicator (Unit) 2023 2024 2025

Total number of male employees (person) 9317 10432 9972

Training participants (person) 22850 23988 23593

Proportion of male employees (%) 41 43 42

Average training hour (hour) 56 56 56

Total number of female employees (person) 13533 13556 13621

Training coverage rate (%) 100% 100% 100%

Proportion of female Employees (%) 59 57 58

Employee age

Total number of employees aged under 30 (person) 9671 9814 9363

Proportion of employees aged under 30 (%) 42 41 40

Total number of employees aged above 30 (person) 13179 14174 14230

Proportion of employees aged above 31 (%) 58 59 60

Education background of employees

Bachelor or above (person) 1319 1555 1571

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