2022 Annual Social Responsibility Report of Fujian Xuyuan Textile Co., Ltd.

Time frame of this report: January 1, 2022 – December 31, 2022
Reporting Entity: The reporting entity for this report is "Fujian Xuyuan Textile Co., Ltd." Unless otherwise specified in the text, "Xuyuan," "the Company," and "Xuyuan Textile" will be used as its abbreviations.
How to obtain the report: Company’s official website
Scope of the Report: The report primarily discloses the company’s performance and practices in social responsibility for the year 2022.
Reference standards: China Social Responsibility Management System for Textile and Apparel Enterprises (CSC9000T), Social Accountability Management System (SA8000).

Chapter 1: Overview
1. Company Profile
Fujian Xuyuan Textile Co., Ltd. was founded in April 2018 with a registered capital of 100 million yuan. It is a large-scale “5G-intelligent spinning” enterprise integrating the production and sales of high-performance, multifunctional blended yarns made from various fibers. This project is a key initiative under the county’s 10-billion-yuan textile industry chain, serving as a leading enterprise worth 10 billion yuan. The total investment for the project amounts to 1.6 billion yuan, with a planned site area of over 360 mu and a total construction area exceeding 150,000 square meters. The project will build a high-intelligence, high-quality blended yarn production line with an annual capacity of 400,000 spindles. Upon reaching full production capacity, the project is expected to generate an annual output value of 1.8 billion yuan. Currently, the first-phase construction has been completed. The first phase has an annual production capacity of 170,000 spindles of high-intelligence, high-quality blended yarns, with a total investment of 690 million yuan and a land area of 178 mu, achieving an annual output value of 800 million yuan.
The company has adopted an automated, digitized, and intelligent production line powered by “5G + Digital Intelligent Cloud.” Equipped with first-class domestic and international machinery, the plant features integrated machines for combing and cleaning, coarse-to-fine spinning integration, fine-spinning and winding integration, and automatic packaging machines. It is also outfitted with a climate control system that maintains constant temperature and humidity, as well as an air circulation system, enabling fully unmanned operations—from raw yarn to fine yarn, then to winding, and finally to finished yarn. The production line achieves online and offline data collection, monitoring, operation, and predictive analytics across the entire process. Moreover, it realizes automatic, intelligent adjustment of temperature and humidity throughout every workshop and every stage of the production process. A dedicated wireless network covering the entire workshop has been established, creating a unified, integrated data platform that connects equipment terminals, remote computer terminals, and mobile devices. This platform enables real-time monitoring of equipment status, remote adjustment of process parameters, dynamic prediction of production progress, automatic generation of analytical reports, and real-time tracking of customer orders—thus achieving smart spinning and intelligent IoT connectivity. By then, the entire Xuyuan Textile will become a true “dark factory”—a facility led by intelligent manufacturing and supported by information technology, where staffing for 10,000 spindles is reduced to single-digit numbers and production runs continuously around the clock.
The company currently has more than 200 employees and has recruited across the country a group of highly skilled, R&D-capable product development leaders. It has also assembled an experienced and proactive management team. Currently, there are three senior engineers, and the total number of staff at the company’s technology center stands at 86, including 68 professionals with college diplomas or higher specializing in textiles. Xuyuan Company adheres to a people-oriented corporate culture and has established a comprehensive set of scientific management systems. These include an assessment mechanism based on performance evaluations, full-piece-rate compensation, and comprehensive evaluations of individual work achievements; an incentive and selection mechanism that integrates assessments of work attitude, job performance, and managerial capabilities; a competitive mechanism organized by workshops and work teams, which evaluates output, quality, consumption, and safety in a holistic manner; and a work-life model led by the trade union organization, emphasizing joyful work and a fulfilling life for employees. As a result, the company has achieved efficient management and workforce stability.
2 Corporate Culture
The company upholds a corporate culture that puts people first and builds a harmonious enterprise. It adheres to the product quality philosophy of “Today’s quality, tomorrow’s market,” and follows the service philosophy of “Customer needs, corporate responsibility.” United in collaboration and keeping pace with the times, we are committed to building our company into an outstanding textile enterprise, creating value for society, and achieving win-win cooperation with our customers.
2.1 Corporate Spirit
Responsibility, pragmatism, and innovation.
2.2 Corporate Vision
Value realization, protect the environment!
2.3 Business Philosophy
Dedicated service, continuous improvement!
2.4 Market Strategy
Build value bridges and lead the market!
2.5 Code of Conduct
(1) Raise awareness ideologically and fully appreciate the importance of the work.
(2) Improve work style through concrete actions and truly ensure that tasks are implemented effectively.
(3) Coordinate to align efforts and ensure the smooth execution of tasks.
(4) In practice, take a comprehensive and balanced approach, achieving “eight organic integrations.”

Chapter 2: Social Responsibility Strategy
2.1 Social Responsibility Strategy
Since its establishment and commissioning, Fujian Xuyuan Textile Co., Ltd. has not only contributed to the revitalization of China's traditional textile industry but has also actively fulfilled its corporate social responsibility. The company consistently adheres to the development philosophy of green, environmentally friendly, and sustainable practices, dedicating itself to creating healthy and eco-friendly textiles for the world and promoting the sustainable development of the economy, society, and the ecological environment.
To strengthen corporate social responsibility management, Xuyuan Textile has developed a corporate social responsibility and sustainability strategy, building on its previous CSR practices and achievements and taking into account the new trends in economic development and social progress. This strategy identifies environmental protection, sustainable development, and social care as key areas for corporate social responsibility and sustainable development.
2.2 Establishment of a Social Responsibility System
To ensure the effective implementation of our corporate social responsibility strategy, the company has established and perfected systems related to social responsibility in accordance with applicable laws and regulations as well as relevant international standards. This ensures that our business operations have a positive and beneficial impact on the ecological environment, society, and other stakeholders, thereby promoting the sustainable development of enterprises, society, and the environment.

Chapter 3: Actively Promote the Establishment of a Long-Term Mechanism for Safe Production
Safety work is the lifeblood of enterprise development and the guarantee for its healthy, stable, and sustainable growth. In 2022, the company actively promoted the establishment of a long-term mechanism for safe production, building and improving a rigorous and scientific system of safety production responsibilities and oversight mechanisms. We continuously refined safety production regulations and rules, promoted the standardization and normalization of safety production management, and comprehensively enhanced the level of safety production management. As a result, the situation in safety production has remained steadily positive.
3.1 Establishment of the Safety Production Management System
The company consistently adheres to the guiding principle of “safety first, prevention-oriented, and comprehensive management,” promotes standardization of safe production, and continuously advances the development of its safety production management system. In 2022, the company revised and improved a series of safety production regulations, including the “Regulations on Safety Production Management,” the “Regulations on Fire Safety Management,” and the “Regulations on Occupational Health Management,” clearly defining the safety responsibilities of all levels of personnel—from the general manager down to frontline employees. The company has also refined its safety and fire management network, strengthened the culture of safe production through training, education, and public awareness campaigns, and enhanced employees’ awareness of safe production, knowledge of relevant laws and regulations, and professional competence.
3.2 Management of Safety Risks and Hazards
The company actively responds to the government’s call and continues to improve its dual-prevention system for safety production risk grading and control as well as hazard identification and remediation, firmly adhering to the principles of risk prevention and moving control measures upstream. Based on risk identification, with risk grading and control as the key focus, and hazard identification as the primary approach, the company leverages information technology as a platform to establish a dual-prevention mechanism for risk control and hazard identification in enterprise safety production, thereby standardizing and goal-oriented enterprise safety management.
The company comprehensively identifies environmental factors and hazard sources, implements effective controls, and establishes a corporate database of production safety risk information, gathering all necessary data related to enterprise production safety. The company employs both qualitative and quantitative statistical analysis methods to determine the severity of risks, thereby prioritizing risk control measures and selecting appropriate risk control strategies. Through daily safety management conducted by departments and oversight and control by safety management authorities at all levels, the company carries out process management and achieves effective control, aiming to improve the production safety environment and reduce or eliminate production safety accidents.

Chapter 4: Protection of Stakeholder Rights and Interests
Assuming social responsibility is an important value orientation for economic and social development. Paying close attention to and effectively implementing corporate social responsibility has gradually become an inevitable trend in contemporary business development, as well as an effective way to enhance corporate competitiveness and build a positive corporate image. In 2022, facing new market opportunities, while striving to achieve sustainable corporate development and create value for shareholders, the company actively safeguarded the legitimate rights and interests of all relevant stakeholders, ensured the health and safety of workers, and treated suppliers and customers with integrity.
4.1 Public Relations Management
The company proactively accepts and actively cooperates with the supervision and inspections conducted by government departments and regulatory authorities. It also strengthens its communication and establishes positive, open relationships with government agencies, takes their feedback seriously, promptly adjusts its communication mechanisms and methods based on actual circumstances, and continuously improves its corporate management system.
4.2 Customer Relationship Management
The company is deeply committed, with a strong sense of responsibility, to building long-term, stable, and mutually beneficial industrial chains and cooperative relationships with its suppliers and customers. By continuously improving organizational development, institutional management, financial oversight, process control, and comprehensive auditing of budgets and final accounts, the company not only delivers high-quality products and services to its customers and creates greater value for society and its clients, but also steadily enhances its own value. Working hand-in-hand with suppliers and customers, we engage in mutual supervision, joint promotion, and continuous improvement—driving overall benefits and enhancement across the entire industrial chain and generating even greater social value.
The company adheres to integrity and reputation as the cornerstone of its business, continuously soliciting feedback from users, striving to enhance product quality and standards, and aiming for mutually beneficial cooperation. In its operational practice, the company has developed a business model characterized by low risk and high operability. Moreover, within its management system, it has established practical and effective risk-control procedures and built a standardized, efficient operational mechanism—thus safeguarding customers’ financial security while creating value for them.
4.3 Employee Relationship Management
The company regards its employees as the most valuable resource for its survival and development, and consistently adheres to a “people-oriented” management philosophy. Through various channels and approaches, we strive to enhance employees’ comprehensive social competencies, continuously improve their working environment and conditions, and thereby inspire each employee’s enthusiasm and creativity. We are committed to creating and providing employees with broad platforms for development and opportunities to showcase their individual talents, while earnestly safeguarding their legitimate rights and interests.
Creating employment opportunities for society is an important aspect of demonstrating a company’s commitment to social responsibility. The company adheres to principles of fairness and equity in its hiring practices, recruiting and employing staff based on job requirements without discriminating against applicants or employees on the basis of age, gender, marital status, race, nationality, or any other such factors, and strictly prohibits the employment of child labor. The company believes that the fundamental key to fulfilling its social responsibilities lies in building a workforce that achieves well-rounded development, thereby establishing a virtuous cycle. To this end, the company has implemented a series of measures to promote the comprehensive development of its employees:
① Regarding the protection of employee interests
Employees are the company’s most valuable resource and asset. The company advocates respecting and protecting employees’ legitimate rights and interests, cherishing their lives, health, and safety; and honoring labor, valuing knowledge, and respecting value creation. The company strictly complies with relevant laws and regulations, including the Labor Law of the People’s Republic of China, the Labor Contract Law of the People’s Republic of China, the Implementation Regulations of the Labor Contract Law of the People’s Republic of China, and the Social Insurance Law of the People’s Republic of China, and safeguards employees’ legitimate rights and interests in accordance with the law. The company continues to establish and improve its human resource management system, including salary systems and incentive mechanisms; revises and refines management systems related to labor employment and welfare benefits; signs labor contracts with all employees, thereby implementing a comprehensive labor contract system and establishing standardized, new-type labor relations that clearly define employees’ rights and obligations. The company rigorously enforces national regulations on social insurance, makes contributions to the housing provident fund, and handles various social insurance programs such as pension insurance, medical insurance, unemployment insurance, work injury insurance, and maternity insurance. It pays all insurance premiums fully and on time each month, and promptly completes the necessary procedures—such as signing labor contracts and handling social insurance—for newly hired and departing employees in accordance with regulations issued by the labor authorities. This ensures that employees enjoy full social insurance benefits, enabling them to receive timely assistance and compensation in cases of retirement, illness, work injury, unemployment, or maternity. Additionally, the company provides paid annual leave and other benefits, allowing employees to work with peace of mind and pursue career development in an environment characterized by fairness and equity.
② Employee benefits
The company strictly adheres to the requirements of the Labor Law, the Labor Contract Law, and other relevant laws and regulations by signing labor contracts with all current employees. We implement a system of distribution based on work performed and equal pay for equal work. We also make full contributions to all statutory social insurance and benefits for all employees who have established a labor relationship with the company. In addition, in accordance with national laws and regulations, the company fully safeguards employees’ freedom of belief as well as the legitimate rights and interests of female employees. The company pays close attention to the physical health of its employees and organizes regular annual medical checkups for them.
③ Employee education and training aspect
The company has long-term implemented a “talent-driven enterprise” strategy, vigorously promoting the cultivation of innovative talent, establishing and improving a comprehensive talent training system, building innovation platforms, strengthening the foundation for talent development, and advancing the construction of information-based platforms. As a result, the company has developed a diversified talent cultivation and industrial promotion model that leverages internet platforms and specialized training institutions, thereby enhancing its multi-dimensional talent development system tailored to different levels and categories of employees. The company has also established and refined an open, equitable, competitive, and merit-based mechanism for selecting and employing personnel, encouraging employees to firmly embrace the philosophy of continuous and lifelong learning, igniting their enthusiasm, improving their professional qualities, and fostering their personal growth.
Chapter 5: Actively Participating in Social Public Welfare Initiatives
Corporate development originates from society, and giving back to society is a responsibility that businesses must fulfill. The company has always attached great importance to demonstrating its social value and leveraging its own development to boost local economic revitalization.
5.1 Tax Contributions
Since going into operation, the company has conducted its business in strict compliance with the law and paid taxes in good faith. The company actively contributes to the nation’s fiscal revenue and taxation efforts, thereby strongly promoting the development of the region where it is located. Operating with integrity and paying taxes in accordance with the law have always been the principles that the company adheres to.
5.2 Poverty Alleviation and Assistance: Spreading Positive Energy to Society
To enable the public to share in the fruits of economic and social development, the company actively responds to the national call for poverty alleviation and assistance, and implements targeted poverty alleviation efforts. Upholding the traditional Chinese virtues of respecting the elderly and caring for the young, the company actively engages in public welfare and charitable activities, pays close attention to vulnerable groups, and proactively takes on the responsibility of fostering a harmonious social environment.
5.3 Open development to boost regional economies
The company is steadily advancing its corporate development, driving growth in surrounding regions and promoting both its own sustainable development and the harmonious progress of the local community. Currently, the company employs over 500 people. In its development journey, the company adheres to the value of “people-oriented,” creating a favorable work and learning environment for employees in multiple dimensions, providing them with platforms for career development, and contributing to the improvement of living conditions and the enhancement of livelihoods for local residents.

Chapter 6: Environmental Protection and Sustainable Development
The company consistently adheres to a path of sustainable development characterized by “green, low-carbon, and environmentally friendly” practices. It actively engages in the research, development, and widespread application of advanced technologies and equipment, implements low-carbon and energy-saving projects, and promotes the integration of economic, social, and environmental benefits.
In 2022, the company continued to pursue management innovation. In building its energy management system, it placed particular emphasis on strengthening top-level design and overall coordination, continuously enhancing the system’s systematic nature, standardization, and implementation capabilities. It also deepened reforms of its rules and regulations and consistently standardized management requirements.
6.1 Establish an environmental management system
The company has established an Energy Management Center and is leveraging automation and information technology to implement scientific energy management. Guided by the energy management principle of “energy conservation, consumption reduction, emission reduction, and efficiency enhancement,” the company continuously carries out the “Double Increase, Double Conservation” initiative.
6.2 Adopt advanced international technologies to achieve energy conservation and emission reduction.
Closely following the development of low-carbon and environmentally friendly technologies in the industry, we adopt new technologies, new processes, new equipment, and new energy sources to implement low-carbon and energy-saving initiatives throughout the entire production and operational process.
The company systematically reduces resource consumption and waste generation from the source, achieving comprehensive utilization of various resources. It continuously promotes cleaner production by improving production processes, optimizing manufacturing techniques, and researching new environmentally friendly and energy-efficient technologies, thereby reducing material and energy consumption and minimizing waste generation.
6.3 Develop an annual energy consumption plan and set annual energy-saving targets.
Develop specific measures for energy conservation and emission reduction, and incorporate energy-saving targets into the performance evaluation system for managers in all departments. Establish a training mechanism for energy management personnel, formulate an annual training plan, and fully leverage the role of energy management specialists. Actively organize and carry out activities such as energy efficiency benchmarking. Take advantage of the national “Energy Conservation Promotion Week” to conduct energy-saving publicity in various forms through multiple channels, fostering a positive atmosphere in which everyone participates in energy conservation and consumption reduction.
6.4 Emphasize environmental management and fulfill social responsibilities.
In terms of environmental management, the company has stepped up its investment in technology and is utilizing cotton dust and cotton waste as raw materials for low-grade yarns as well as promoting their comprehensive agricultural utilization. This ensures that various types of waste are effectively and comprehensively utilized, with a 100% rate of integrated treatment and utilization.
To improve the air quality around the company’s premises, the company has continuously been planting green belts and green plazas around the factory area, transforming the facility into a garden-style plant and significantly purifying the surrounding air quality. At the same time, the company has stepped up efforts to enhance environmental quality in the production workshops by introducing advanced, highly efficient dust removal equipment from both domestic and international sources and installing micro-air-circulation systems in the production areas, thereby achieving noticeable improvements in both the production environment and the surrounding environment.
6.5 Identify hidden concerns and proactively implement preventive controls.
Through visits and surveys, the company gains insight into and anticipates public concerns and worries regarding the environmental friendliness, safety, and hygiene of textile products. The company promptly discloses, via online channels and public newspapers, information on compliance with environmental and hygiene standards, thereby subjecting all relevant data to public scrutiny and enhancing management transparency within the factory.

Chapter 7: Prospects for the Development of Social Responsibility
Currently, the global economy is undergoing profound adjustments, with growing pressures on resources and the environment and an increasingly complex international trade landscape. Economic globalization has facilitated the rapid flow of industries, capital, talent, and information across borders, significantly reducing the costs of international trade and investment and accelerating and reshaping economic development through major breakthroughs in technological innovation. At the same time, the textile industry has become increasingly closely linked to the global economy, with deepening interdependence. Faced with this new situation, in 2022, our company will uphold a strong sense of social responsibility, create value for society, and rigorously fulfill and further strengthen our commitment to protecting the rights and interests of shareholders, customers, partners, and employees. Guided by the development directions of high-endization, chain integration, intelligentization, and green practices in traditional industries, we will drive transformations in quality, efficiency, and growth drivers, continuously enhancing the quality and effectiveness of our development. We will focus on improving product quality and market influence, strive to build a new model of intelligent manufacturing and a green manufacturing industrial ecosystem, steadily enhance our capacity for sustainable development, actively integrate into the historic tide of the new era, and make positive contributions to the global textile industry’s development.

June 12, 2023
Fujian Xuyuan Textile Co., Ltd.