Texhong International (Group) Co., Ltd.

TEXHONG INTERNATIONAL GROUP

Anti-bribery and Anti-corruption Management Regulations

(2021 revised version)

1. Purpose

In order to firmly adhere to the anti-corruption principles of the Group and its subsidiaries, purify the

business environment and social atmosphere, solidly facilitate the governance of corruption and

bribery in business activities, strengthen the internal control mechanism of Texhong International Group,

and uphold the attributes of honesty and trustworthiness, the Group hereby formulates the Management

Regulations (hereinafter referred to as the “Regulations”) to strengthen the supervision of the system

and implement the anti-corruption system, enhance the supervision and management of key processes

and key positions that are prone to frequent corruption, ensure the governance of commercial bribery

commitment system, strictly follow the fair competition rules, guide the management of the Company

to act according the law and be honesty and trustworthy, consciously resists the acts of corruption,

such as sacrificing principles for profit, injuring the public interest to benefit one's private interest,

acting in bad faith etc., and establish a good corporate image based on its actual situation.

2. Scope of Application

All companies under Texhong International Group Limited are applicable, including the wholly-owned

subsidiaries and joint ventures.

3. Professional Ethics Standards for Employees

The Company is committed to maintaining the highest ethical standards in business conduct. Honesty,

integrity and fairness are the core values for all the directors and employees of “Texhong International Group”

(hereinafter referred to as the “Group”) to safeguard at all times. The “Code of Conduct for Employees”

of Texhong International Group shall be implemented in respect of the basic standards of conduct that the

directors and employees must adhere to and the policies on acceptance of benefits and declaration of

conflicts of interest when dealing with the affairs of the Group.

4. Classification of Corrupt Practices

4.1 Corrupt practices involved in the Regulation in violation of national laws mainly include

bribery, acceptance of bribes by non-state employees, embezzlement, misappropriation of

funds and other illegal activities, as defined below:

4.1.1 Bribery: it refers to the act of giving property and improper commercial interests to others

or related institutions for the purpose of seeking improper personal interests.

4.1.2 Acceptance of bribes by non-state employees: it refers to the act of the employees of the

Company, in the course of economic dealings, to take advantage of their positions to ask for

property of others or illegally accept property of others, and to include all kinds of rebates

and handling fees in their own names and seek benefits for others.

4.1.3 Embezzlement: it refers to the act of embezzling, stealing or using other means to illegally

occupy the property of the unit for their own possession by taking advantage of their

positions

4.1.4 Misappropriation of funds: The employees of the Company take advantage of their positions

to misappropriate the funds of the unit for personal use or lending to others (organizations)

for profit.

4.1.5 Other illegal acts: it refers to theft, damage to production and operation, fraud, etc.

4.1.6 The Company does not accept any form of corrupt practices of individuals or government

officials, nor does it participate in any form of unethical incentives or payments.

4.1.7 The Company, its employees and agents shall not act as an intermediary for public or private

bribery, i.e. directly delivering bribes in accordance with the instructions of the bribe-giver

or the bribe-taker, or otherwise assisting in the completion or execution of agreements

between the bribe-giver and the bribe-taker, so as to take a bribe and offer a bribe.

4.1.8 The directors and employees are not allowed to abuse their position to obtain personal

benefits. Personal benefits include the financial and personal interests of the directors and

employees and their family members, relatives or personal friends, including travel,

education, medical care, insurance, etc.

4.2 Other acts in violation of corporate rules and regulations, including:

4.2.1 Related party transactions.

4.2.2 Texhong prohibits money-laundering and insider trading/dealing.

4.2.3 “Three kinds of relationships” (relatives, friends, students).

4.2.4 Malfeasance of duty.

4.2.5 Gambling.

4.2.6 Improper treats.

4.2.7 Improper giving or receiving of gifts.

4.2.8 Theft.

4.2.9 Front and back office irregularities.

4.2.10 Others.

4.3 Non-compliance with the “Code of Conduct for Employees” regarding prevention of bribery

and provision of advantages

5. Principles of Corruption Handling

5.1 Any directors or employees who contravene the “Regulations” will be subject to disciplinary

action, including termination of employment. The Company has “zero tolerance” to corruption,

therefore, any personnel involved in corruption will be disclosed with their real names and will be

reported together for investigation and punishment.

5.2 A vote against corruption: the Group must recover losses for relevant acts in violation of the

provisions; in serious cases, dismissal actions shall be taken; for those who violate the law shall

be handed over to judicial agencies for accountability.

5.3 Joint and several responsibilities of the leaders: for the corrupt practices of subordinates,

depending on the severity of the cases, they shall be held responsible for the management failure;

in particularly serious cases, they shall be handed over to judicial agencies.

5.4 Principle of loss recovery: direct losses caused by all kinds of corrupt practices must be recovered

and indirect loss claims must be made.

5.5 Where the amount involved in a corruption case is less than RMB 1000, the claim shall be 2 to 10

times of the amount of the corruption.

5.6 For those who violate the "Criminal Law” of the People’s Republic of China and the relevant

regulations of the country of residence due to corrupt practices may be subject to criminal

liabilities according to law.

6. Organizational Structure

The board of directors is the highest governance body for the Group’s business ethics management:



Audit Committee

It is responsible for monitoring compliance with the Company’s code of conduct, standards and

policies.

 Office of the Director-General

It is the centralized management body for anti-corruption of the Group, it is responsible for:

 Sorting out the work flow of each field of the Group, identifying corruption and formulating

specific measures to prevent corrupt practices;

 Investigating all suspected corrupt practices and reporting the investigation results to the

board of directors in a timely manner;

 Submitting the cases to the judicial agencies according to the law for any corrupt practices

that violate the law;

 Urging all departments and subsidiaries to conduct self-inspection on corruption and

carrying out anti-corruption training.

 Subsidiaries

It is responsible for formulating specific measures to prevent corrupt practices according to

the actual situation; it is also responsible for investigating or unconditionally cooperating with

the Office of the Director-General of the Group to investigate the Company’s internal corrupt

practices, and handling them in a timely manner according to the Company’s system.

7. Corruption Handling Process

Responsible person: Investigator of the Office of the Director-

General

Responsibilities: To check all possible corrupt behavior, and

pay attention to the confidentiality of information to prevent

the suspects from leaving or fleeing

Identifying

suspects

Responsible person: Investigator of the Office of the Director-

General

Responsibilities: Collect evidence of corrupt behavior of the

suspects, and requiring the collection of sufficient and legal

evidence

Evidence

collection

Responsible person: Investigator of the Office of the Director-

General

Report preparation

Responsibilities: Prepare the behavioral statements and

handling suggestions of the party involved in the corruption,

based on the corrupt behavior of the party and the relevant

Report to the Chairman or

President of the board of

directors

Cooperate with the

Human Resources

Department for

appropriate personnel

No

Loss recovery

over $10,000

Responsible person:

Investigator of the

Office of the

Director-General

Responsibilities:

Recovery of losses

based on the acts of

the corrupt parties and

the specific losses

Responsible Department: Human

Resources Department

Yes

Responsibilities: To deal with the

responsible persons according to the

corrupt parties and specific actions

reported by the Office of the

Director-General in accordance with

national laws and relevant

Loss recovery

management regulations.

Handover to judicial

authorities

The Office of the Director-

General prepares cases

study and provides training

for employees to avoid the

occurrence

corruption

of

similar

8. Internal Audit

The internal audit department of the Group shall cooperate with the Office of the Director-General to

carry out the audit tasks once every three years in the form of special audit. The business departments

of the Group shall be audited together with all relevant departments and companies, or subsidiaries

can be audited independently. Detailed plans are formulated by the Internal Audit Department.

9. Staff Training

The “Regulations” and “Whistleblower Protection and Reward System of Texhong International Group”,

“Incentive Scheme for Integrity and Self-discipline of Texhong International Group” and “Employee

Commitment to Integrity of Texhong International Group” will be issued to every director, officer and

employee of the Company. All updated versions will be circulated internally and made available on

the Company’s website.

The Human Resources Department of the Group is responsible for staff training, formulating training

plans for employees’ anti-corruption management regulations and relevant regulations, developing

training scheme and maintaining the up-to-date training materials.

10. Protection of whistleblowers

The Group implements “Whistleblower Protection and Reward System of Texhong International Group”

and “Whistleblower Protection and Reward System of Texhong International Group” - Reporting guidelines

and requirements for suppliers and customers. Employees, suppliers and customers should understand

the confidentiality, protection and reward system of the Company for whistleblowers.

11. Relevant Requirements

Integrity commitment is implemented in key areas, and employees in key positions are required to sign

“Employee Commitment to Integrity of Texhong International Group”, and business units or individuals

that have business relationships with the companies of the Group or its subsidiaries are required to sign

" Anti-Commercial Bribery Agreement of Texhong International Group".

12. SUPPLEMENTARY PROVISIONS

12.1 The “Regulations” apply to any law and regulation of a company against bribery (whether

public or private), including the anti-corruption laws and regulations of the Mainland China

and Hong Kong, Macau and Taiwan, Vietnam, Cambodia, Turkey, Nicaragua, Mexico and the

United States.

12.2 “Regulations on the Administration for Anti-Bribery and Anti-Corruption of Texhong International

Group” shall be effective and implemented from the date of issuance, and the final

interpretation right shall be vested in the Office of the Director-General of the Group.

12.3 “Employee Commitment to Integrity”, “Anti-Commercial Bribery Agreement”, “Report on

Gifts/Advantages Received” and “Declaration of Conflict of Interest” are attached.

12.4 The Office of the Director-General of the Group is responsible for drafting, modification,

interpretation, and abolition of the provisions.

12.5 The provisions shall be implemented from 1 August 2021.

Texhong Textile Group Limited

1 August 2021