I. Overall Framework for Ethical Operations
1.Declaration
○ Objective: To establish proper ethical awareness and promote company-wide practice.
○ Direction: To build a transparent, healthy corporate culture that combats bribery and corruption.
2.Management Structure
○ Ethics & Compliance Committee
○ Chair: Head of Management & Procurement
○ Leading Department: Strategic Planning Team
○ Participating Departments: Business Management Team, HR & General Affairs Team
○ Note: The Ethics & Compliance Committee operates under the leadership of the Board of Directors (or top management), maintaining communication and coordination with governance bodies such as the Party organization (where applicable) and the Supervisory Board.
3.Context and Significance
○ Context: Ethical operations form the foundation for building trust with stakeholders.
○ Risk & Opportunity: Ethical risks are increasingly prominent. A robust ethical culture significantly enhances core corporate competitiveness and commercial reputation.
II. Purpose of Ethical Operations
1.Respect for Customers: To maintain a customer-centric approach, winning enduring trust through honest service.
2.Respect for Employees: To uphold a people-first philosophy, prohibit any form of personal disrespect, and safeguard employees' legitimate rights and interests.
3.Respect for Shareholders: To adhere to transparent and sound management, effectively protecting shareholders' long-term interests.
4.Partners: To abide by principles of honesty and good faith, pursue mutual development, and prohibit any improper demands or benefit transfers.
5.Societal Role: To strictly comply with national laws and regulations, actively protect the environment, and earnestly fulfill corporate social responsibilities.
6.Ethical Business Activities:
○ Signing "Business Ethics Agreements" with partners.
○ Conducting regular ethics education and training covering all employees.
III. Code of Ethics and Conduct
Chapter 1: General Provisions
● (Purpose, Scope of Application, Definition of Terms, Management Structure, Authority for Interpretation)
● Compliance Statement: The interpretation and enforcement of all provisions in this Code shall be premised on compliance with all current laws and regulations of the People's Republic of China, including but not limited to the Company Law, Labor Law, Anti-Unfair Competition Law, and Criminal Law. Should any provision of this Code conflict with mandatory legal or regulatory requirements, the laws and regulations shall prevail.
Chapter 2: Fundamental Employee Ethics
● Strict compliance with all national laws and regulations.
● Prohibition of discrimination based on race, gender, religion, ethnicity, disability, or any other factor.
● Prohibition of any form of sexual harassment.
● Information Management: Strictly prohibit the falsification, leakage, or misuse of confidential company or client information, in full compliance with the Cybersecurity Law, Data Security Law, and Personal Information Protection Law.
● Company Assets: All assets are to be used solely for work purposes. Private use, misappropriation, or disclosure is prohibited.
● Business Partners: Adhere to fair and impartial dealings. Prohibit making any unreasonable demands by leveraging a position of advantage.
Chapter 3: Responsibilities to Clients, Shareholders, and Employees
● Clients: Prioritize client satisfaction at all times. Strictly protect client information and trade secrets.
● Shareholders: Legally safeguard shareholders' right to information. Establish a standardized, transparent financial management system.
● Employees: Respect employees' personal dignity. Implement fair performance evaluations. Provide a safe and healthy working environment.
Chapter 4: Corporate Culture of Ethical Operations
● Uphold the principle of prioritizing overall company interests.
● Strictly prohibit embezzlement, misappropriation of funds, asset appropriation, and profiting from insider information.
● Advocate for a positive, open communication atmosphere and a diligent, frugal work ethic.
● Prohibit organizing internal political activities unrelated to work within the company. All donations by the company or its employees must strictly comply with national laws and regulations such as the Charity Donation Law and must not involve illegal political contributions.
Chapter 5: Environment, Safety, and Health
● Strictly comply with national and local environmental protection regulations. Actively promote resource conservation and recycling.
● Strictly comply with workplace safety laws and regulations. Continuously foster a safe and healthy office and operational environment.
Chapter 6: Global Corporate Social Responsibility
● Strictly comply with the laws and regulations of all countries and regions where we operate, both domestically and internationally. Actively contribute to local communities.
● Respect the cultural customs and legal frameworks of host countries. Strictly adhere to international anti-bribery conventions and norms, such as the UN Convention against Corruption, to which China is a signatory.
Chapter 7: Adherence to the Code of Ethics
● All employees are obligated to comply with this Code and have a responsibility to report any known or suspected violations.
● The company commits to strictly protecting whistleblower confidentiality, prohibits any form of retaliation, and will conduct investigations and handle violations in accordance with regulations.
IV. Guidelines for Handling Improper Benefits
1.General Principles
○ Prohibit soliciting or accepting money, gifts, entertainment, favors, or any other benefit that may compromise impartial judgment in the performance of duties.
○ Such actions by an employee's family members are regarded as actions by the employee.
○ Voluntary, timely declaration and surrender of improper benefits may be considered as mitigating factors in subsequent handling.
2.Receiving Gifts and Money
○ Prohibited Parties: (See Appendix Table 1 for details)
○ Exceptions: Customary gifts consistent with social etiquette (e.g., holiday cards), condolences (e.g., for weddings/funerals of immediate family), tokens of minimal value presented publicly.
○ Handling: Should be refused and returned in principle. If return is impossible, they must be surrendered to the company for registration and may be used for charitable donation or disposed of per regulations.
| Content | Examples | Behavior Categories |
| Accepting money or property | Cash, checks, gift certificates, admission tickets, and articles/goods | Prohibited (Any returned portion exceeding the limit must be declared) |
| Accepting movable, real property, or joint investments | Movable property, real property, business rights, membership cards, and property shares | Prohibited |
| Having debts repaid on one's behalf | Credit card payments, debt payments, and loans | |
| Borrowing money | Borrowing money | |
| Purchasing goods at below-market prices | Purchasing movable or immovable property at a price below the normal market value to obtain an actual benefit. The act of buying property (movable or immovable) at below fair market value and thereby gaining a material advantage. | |
| Sending an excessive number of invitations when organizing weddings or funerals | An individual, either personally or through colleagues/subordinates (by request or order, excessively sending wedding or funeral invitations to business partners, such as cooperating companies or agencies, or notifying them of such events via phone, fax, etc. |
3.Entertainment and Hospitality
○ Prohibited Parties: (See Appendix Table 2 for details)
○ Declaration and Management: To strengthen internal integrity management, entertainment and hospitality with a per-person cost of RMB 600 or above require prior approval and subsequent declaration. This is an internal management standard. All business entertainment must have a legitimate purpose, follow compliant procedures, involve reasonable amounts, and strictly prohibit any acts constituting commercial bribery.
○ Procedure: Follow the principle of "prior approval, subsequent declaration."
| Types | Prohibited Establishments (Luxury and extravagant entertainment venues) |
| Alcohol Consumption | Nightclubs, KTVs, Discos, etc. |
| Entertainment | Casinos, etc. |
| Illegal or non-compliant entertainment venues | Foot massage or hair salons providing sexual services |
4.Accepting Favors and Event Sponsorship
○ Accepting economic favors (e.g., interest-free loans, covered expenses) or event sponsorship that may influence business judgment is prohibited in principle.
○ If acceptance is necessary for work purposes, prior written approval is required, followed by declaration and disclosure as per regulations.
| Content | Example |
| Business Trip Support | When visiting stakeholders' premises or traveling for business with partners, if the other party provides train, plane, or bus tickets or accommodation facilities. |
| Vacation Support | When an employee takes personal leave, if the other party provides train, plane, or bus tickets, private car services, or accommodation facilities. |
| Securing the Future | Securing employment for the other party, referring job opportunities, or prohibiting them from signing business contracts with others. |
| Providing Guarantees | Providing loan guarantees. |
| Borrowing Movable or Real Property | Borrowing assets or providing guarantees. |
V. Social Media Usage Guidelines
● Strictly prohibit disclosing any client information, company trade secrets, or material non-public information.
● Prohibit posting or disseminating false information or engaging in any behavior that may harm the company's reputation and image.
● Posted content must respect third-party intellectual property rights. Unauthorized use is prohibited.
● When using the company name, trademarks, or logos (CI), the Corporate Visual Identity System guidelines must be strictly followed.
● Employees must clearly indicate on personal social media that their expressed views are personal and do not represent the company's position.
● Upon discovery of significant false or negative information concerning the company, relevant internal departments must be reported to promptly; unauthorized external responses are prohibited.
VI. Ethics Reporting Mechanism
1.Reporting System: "Network Supervisor"
○ Who Can Report: All employees, partners, clients, and other stakeholders.
○ Scope: Graft, bribery, abuse of authority, improper benefit transfers, violations of business ethics or this Code, etc.
○ Core Principles: Encourage实名举报 (real-name reporting). Strictly protect whistleblower information. Firmly prohibit any form of retaliation.
2.Reporting Channels
○ Dedicated Website: Network Supervisor System (internal link)
○ Email: audit@xhxcg.com
○ Mailing Address: Ethics & Compliance Committee, Building 30. No. 99 Huajia Road, Songjiang District, Shanghai
3.Whistleblower Protection
○ Strict confidentiality of the whistleblower's identity and report content.
○ Prohibit any attempts to identify the whistleblower.
○ Strictly prohibit any form of retaliation against the whistleblower.
○ For employees who voluntarily report violations in which they are involved and cooperate fully with investigations, the company will consider the nature, circumstances, level of cooperation, and value of the report, within legal and regulatory limits, for potential leniency in disciplinary actions. If criminal activity is suspected, the case will be transferred to judicial authorities, where the reporting act may be considered as a relevant factor in legal proceedings.
