Quality Integrity Report

Preface

Compilation Notes for the Quality Integrity Report of Yuhuan Putian Unidirectional Valve Co., Ltd.:

1.This Quality Integrity Report of Yuhuan Putian One-Way Clutch Co., Ltd. is compiled with objectivity and impartiality. The content is authentic, valid, and reflects the company's actual circumstances. It covers enhancing employees' quality awareness, the quality organizational management system, and quality philosophy.

2. The reporting period spans January 2014 to January 2015. All data within the report is genuine and accurate.

Table of Contents

Company Profile

I. Enhancing Quality Awareness Among Employees

II. Quality Organizational Management System

III. Quality Philosophy

IV. Internal Quality Management

V. Corporate Mission, Quality/Environmental/Occupational Health and Safety Policy, Objectives, and Quality Commitment

VI. Regulatory Compliance System

VII. Equipment Assurance System

VIII. Proactive Adoption of International and Advanced Foreign Standards

IX. Product Certification and Accreditation System

X. Quality Control System

XI. Performance Evaluation Management System

XII. Corporate Culture: Emphasis on Quality Philosophy

XIII. Team Stability: Selecting Excellence to Unite Hearts

XIV. After-Sales Service Commitment

XV. Establishing Multiple Communication Channels with Stakeholders

XVI. Ethical Conduct

XVII. Establishing a Comprehensive Customer Satisfaction Measurement System

XVIII. Employee Performance Management System

XIX. Creating a Harmonious Employee Environment

XX. Employee Satisfaction Assessment

XXI. Establishing High-Standard Work Environment Infrastructure

XXII. Establishing Sound Safety Infrastructure Management to Foster a Secure Environment for Corporate Development

XXIII. Closing Remarks

Company Profile

Yuhuan Putian One-Way Clutch Co., Ltd., located in Yuhuan County, Zhejiang Province, was founded in 1983. As a specialized automotive parts manufacturer, the company primarily produces automotive starter motor one-way clutch series. Annual production capacity: 12 million one-way clutches and 7 million drive shafts. Over the years, the company has established long-term stable partnerships with renowned domestic and international starter manufacturers, consistently maintaining its leading position in the Asian industry and becoming the preferred brand for international procurement of automotive starter one-way clutches. Major clients include Tianjin Denso & Huachuan Denso, Changsha Hitachi, American Remi, Jinzhou Hana, Beijing Petrel, among others. The company has also become a global procurement supplier for Bosch Germany and the designated heavy-duty automotive supplier for Iskra worldwide. Products are utilized in vehicles including Mercedes-Benz, BMW, Ford, Audi, Chevrolet, Toyota, Honda, Suzuki, Nissan, Hyundai, and Kia. According to industry association statistics, Yuhuan Putian One-Way Clutch Co., Ltd. has ranked first domestically and second globally in sales volume since 2005. Sales revenue reached 288 million yuan in 2015.

After over three decades of development, the company has consistently upheld the philosophy of “Puti's cause is our shared cause.” Through relentless effort and integrity in business operations, it has established an excellent market reputation with high-quality products and superior service. For multiple consecutive years, it has been honored as a “Top 100 Industrial Enterprise” and “Dragon Enterprise” by the Yuhuan County Party Committee and People's Government. The company has also received numerous accolades including “Taizhou Famous Trademark,” “Taizhou Brand Product,” “County Advanced Collective for Quality Work,” “Zhejiang Famous Brand Product,” “Zhejiang High-Tech Product,” “High-Tech Enterprise,” “County Mayor's Quality Award,” “Provincial Advanced Unit for Caring for Migrant Workers,” “Taizhou Technological Innovation Demonstration Workshop,” “Outstanding Enterprise Trade Union for Establishing Harmonious Labor Relations,” and “Taizhou Labor Harmony Enterprise.” The company has also been recognized for multiple consecutive years as an “Outstanding Supplier” and “Outstanding Cooperative Supplier” by renowned domestic host manufacturers including Tianjin Denso, Jinzhou Hana, Beijing Petrel, and Changsha Bosch.

I. Enhancing Quality Awareness Among Employees

Product quality is the lifeblood of an enterprise; it serves as the company's banner and a testament to its strength. For a company to thrive in fierce competition, defeat formidable rivals, and establish a firm foothold, the most crucial weapon is product quality. For enterprises, quality is fundamentally a systematic endeavor. It not only involves all functional departments and spans every stage—from R&D and production to sales and procurement—but also encompasses personnel awareness, quality systems, operational practices, and even hardware such as machinery and equipment.

To ensure the efficient operation of an enterprise's quality system, optimize resource allocation, and ultimately produce high-quality products, it is imperative that all employees firmly establish a mindset focused on high quality and excellence. Neglecting this principle renders even the most advanced equipment and robust mechanisms incapable of achieving their intended effectiveness. This mindset inherently holds value, as it motivates employees to consciously adhere to operational procedures during production and business activities. They will not abandon their responsibilities due to external factors like “no one is supervising,” “no one is watching,” or “everyone else is doing it.” This goes beyond mere objective requirements and constraints; it represents a pursuit that transcends professional ethics.

Quality consciousness represents the understanding and recognition of quality and quality-related work held by everyone in an enterprise, from leadership decision-makers down to each employee. It exerts an extremely important influence and restraint on quality-related behaviors. This consciousness manifests in the work of every employee at their respective posts and is also concentrated in the work of the enterprise's highest decision-making level. It is a willpower that consciously ensures the enterprise delivers products that meet customer demands—hardware, software, process material quality, work quality, and service quality. Quality consciousness is established and reinforced through corporate quality management, quality education, and quality accountability. It gradually and steadily develops through self-regulation facilitated by quality incentive mechanisms.

Companies should conduct targeted quality consciousness education among all employees, enhancing their awareness through the following approaches:

1. Today's quality determines tomorrow's market share.

2. Quality must be prioritized now, starting with each individual.

3. To outperform competitors, superior product quality is paramount. 4. Quality is measured by standards but reflects corporate credibility and integrity. 5. Prioritizing quality demonstrates responsibility to the enterprise, society, and employees themselves. 6. Quality transcends technical issues; it ultimately reflects the caliber of employees and the enterprise. With brand creation as its goal, the enterprise strengthens brand awareness education. By promoting the concept of brand leadership and future-oriented impact, it fosters a positive atmosphere where everyone cares about quality and shares responsibility for brand building. The company also accelerates the transformation of outdated quality concepts among all employees through extensive, dynamic quality awareness activities. These initiatives enhance employees' competitive spirit and sense of responsibility, firmly instilling a dedication to their roles and a pursuit of 100% customer satisfaction.

Only through quality awareness education and activities that cultivate team spirit among employees can a company truly implement Total Quality Management (TQM) and ensure that quality consciousness permeates and elevates throughout the organization.

II. Quality Organizational Management System

Our company's quality management structure is led by the Vice President of Quality, overseeing the Quality Management Department and Quality Assurance Department. Under the unified direction of the General Manager, the Quality Assurance Department implements comprehensive quality management throughout the entire process, ensuring unified planning and coordination. This integrated management model facilitates the enhancement of technical proficiency and personnel competence across all employees, promotes scientific management practices, and ultimately achieves the goal of improving product quality.

The organizational structure comprises dedicated quality engineers, process quality inspectors, and technicians with intermediate or higher skill levels, each possessing defined responsibilities and authority. Within this system, the ideological and technical competence of personnel at every level (laboratory, patrol inspection, finished product inspection) is critical. To elevate inspector quality, we adopt a dual-track approach: simultaneously enhancing ideological awareness and technical skills, while providing training for personnel at all levels—senior, intermediate, and junior. Since 2013, the company has trained over 150 personnel, including dedicated inspectors, internal auditors, and junior, intermediate, and senior technicians. Additionally, we have provided vocational quality inspection education to all employees, conducted part-time training sessions led by external quality inspection engineers totaling 100 sessions and over 500 training hours, and organized various technical assessments and competitions. By directly linking job competition and technical evaluations to individual economic benefits, we have significantly spurred enthusiasm for skill acquisition. During this period, the company has cultivated a large number of outstanding quality management professionals, resulting in substantial improvements in the overall quality management capabilities and technical proficiency of the entire workforce.

III. Quality Philosophy

Putian Company's policy prioritizes brand development as a critical aspect of its production and operations. It has established the guiding principle that “Technology is the core of a brand, quality is the lifeblood of a brand, talent is the guarantee of a brand, culture is the soul of a brand, and innovation is the driving force of a brand.”

IV. Internal Quality Management

1. Establishment of Quality Management System

The company obtained ISO 9002 quality management system certification as early as 1997. In 2006, it further achieved TS16949 quality management system certification. The company has established a comprehensive, complete, detailed, and rigorous set of regulations and quality assurance documentation. These documents cover all aspects including market research, product development, production management, equipment management, personnel management, material management, quality management, production process management, quality standard management, quality inspection, sales management, sales service management, and market feedback. This achieves “comprehensive, all-staff, and full-process” quality management, ensuring that everything is backed by data. and all operations follow established procedures. This approach truly embodies scientific, systematic, and standardized quality management, leading to a qualitative improvement in both product quality and management standards at Putian Company.

To monitor and measure the effective operation of the quality system, the Human Resources Department conducts annual internal audits and management reviews as scheduled. Additionally, it employs a rolling approach to conduct monthly supervisory inspections across all departments. Issues identified during audits are promptly addressed through corrective actions and improvements. Concurrently, penalties and evaluations are administered according to the company's Performance Appraisal Management System. No serious non-conformities have been identified in any external audits to date. While monitoring the quality system's effectiveness, the enterprise management department intensified supervision and spot checks on physical product quality. Beyond quarterly random inspections of all departments, monthly spot checks on each production process were added. Any issues discovered were promptly ordered to be rectified within a specified timeframe and prioritized for the next inspection. Statistical techniques were applied in procurement, production processes, quality inspection, and customer feedback. Quarterly, any emerging or latent quality issues were addressed through corrective or preventive actions.

Quality consciousness and business philosophy determine the direction and development of corporate culture. In intense market competition, product quality is the key to winning market share. Superior products earn a company strong market credibility, thereby winning customer favor. Therefore, in shaping corporate culture, top management has proposed the business philosophy of “ensuring credibility through quality and safety.” Ideologically, all employees are instilled with the concept that “quality is the market, quality is the lifeblood of the enterprise” and the quality consciousness that “products leaving the factory are like leaving the country.” Employees are required to constantly remind themselves at every stage of production that each step directly impacts product quality and market credibility. Consequently, strict quality control and the principle of “each preceding process is responsible for the subsequent one” have become ingrained in employees' production practices. This heightened quality awareness has fueled enthusiastic participation in quality management across the entire workforce.

2. Strengthening Quality Management and Maximizing the Role of Quality Inspection

To ensure the continuous and effective operation of the quality management system and steady improvement in product quality, the company established the quality management theme: “Strengthen scientific management, correct bad habits, enhance process control, and improve work quality and efficiency.” To consolidate quality management achievements, the company further defined its quality-efficiency theme as: “Efficiency is the lifeblood of the enterprise. We must pursue efficiency through product quality by strictly controlling production costs; through procurement quality by significantly reducing procurement expenses; through manufacturing quality by enhancing efficiency and minimizing losses; and through work quality by comprehensively elevating management standards.” Under these dual themes, the company revised and refined its management regulations, standardized production procedures, and effectively controlled product quality. It successively introduced over ten management standards, including the “Quality Reward/Penalty and Incident Handling Regulations,” “Quality Indicator Statistics Regulations,” “Performance Evaluation Management System,” and “New Supplier Selection and Evaluation Management Regulations.” This established a comprehensive internal quality control management system, elevating all quality management activities to a new level.

3. Metrology Management

Metrology management was strengthened. Since 2000, to enhance metrology oversight, the company implemented verification, calibration, usage supervision, and circulation management across raw material procurement, process control, production equipment, inspection equipment, process inspection, and finished product inspection. A comprehensive set of management documents and control methods was established. The acquisition of precision metrology testing equipment, including coordinate measuring machines and profilometers, significantly enhanced product inspection capabilities. This highly effective metrology management provides a robust guarantee for the steady improvement of product quality.

4. Quality Inspection Management

The laboratory has established a testing equipment archive, organized and categorized, with key management focused on important precision instruments and testing equipment for critical projects and key parameters. Key management tasks include: performing calibration or inspection to ensure effective traceability of test data, and maintaining the equipment's optimal performance and accuracy. For different types and models of testing instruments and equipment, laboratory managers should also develop corresponding maintenance plans and assign responsibilities to ensure the equipment remains in proper technical condition. This includes: lubrication, cleaning, tightening, wiring, leveling adjustments, calibration data, etc. Maintenance status is regularly supervised and inspected. Operational records are maintained for critical equipment to enable periodic comprehensive performance evaluations. Personnel operating testing equipment must undergo professional training and pass assessments before being authorized to work. The laboratory has also established a comprehensive sample retention system. After each test, the first and last items are clearly marked and stored in the sample repository under the custody of designated personnel. These samples are retained for at least one year to facilitate timely retesting and root cause analysis should issues arise. Laboratory personnel regularly exchange insights on issues encountered during testing to promptly develop corrective actions, enhance management standards and work quality, and achieve the company's zero-defect quality objective. All systems, job responsibilities, instrument operating procedures, safety guidelines, and precautions are posted for easy reference and implementation.

Strengthen quality inspection and acceptance of supplier deliveries, urging suppliers to fulfill their legal quality responsibilities. Strictly control incoming raw material quality, enforce process discipline, and rigorously manage quality throughout production. Enhance the quality supervision team by improving training and education for supervisors, refining oversight methods, and boosting quality improvement capabilities to increase their authority and effectiveness.

5. Regularly convene quality meetings to accelerate issue resolution

The company holds periodic quality meetings to deepen quality enhancement initiatives. When quality issues arise, they must be promptly addressed with expedited resolution timelines. Establish a quality audit system where the finance department includes both direct and indirect quality costs incurred during manufacturing and sales in statistical reporting. Regular meetings incorporate both penalties and rewards—neither should be exclusive. A quality incentive mechanism is established, clarifying quality standards and responsibilities for each position. A “quality veto power” is implemented with rigorous assessment, where evaluation results serve as key criteria for employee transfers, promotions, advancements, rewards, or penalties, encouraging active participation in quality management activities.

In summary, the enterprise firmly upholds the principle of “quality first,” treating quality as the lifeblood of both the company and its products. This quality-driven development strategy permeates all aspects of workshop production and operations. The company encourages technological innovation, strengthens technical upgrades, and continuously enhances product quality and grade, ensuring its competitive edge in the market.

V. Corporate Mission, Quality/Environmental/Occupational Health and Safety Policy and Objectives, Quality Commitment

1. Quality Policy: Pursue excellence through quality, achieve success through quality, and prosper together.

Environmental Policy:

Innovate processes; conserve energy and reduce consumption while prioritizing environmental protection.

Pursue continuous improvement; comply with laws and regulations while advocating pollution prevention.

Occupational Health and Safety Policy:

Comply with laws and regulations; prioritize prevention in production safety;

Pursue continuous improvement; prioritize employee health and well-being.

2. Quality/Environmental/Occupational Health and Safety Commitment:

Building upon the foundation of Total Quality Management, we firmly establish the guiding principle of “Quality First, Reputation First, Customer Supremacy” in production and operations. We rigorously enforce quality control at critical production stages to ensure products meet national standards and consumer expectations.

Maintain management systems and implement effective measures for continuous improvement. Correct and prevent any deviations from quality/environmental/occupational health and safety policies and objectives.

All employees must adhere to the company's quality/environmental/occupational health and safety policies, objectives, and commitments. Through first-class management, superior products, and satisfactory service, we continuously provide high-tech products to serve the market.

VI. Regulatory Assurance System

The company's quality management regulatory assurance system primarily includes:

(1) National, ministerial, and provincial regulations, standards (GB), and provisions. Examples: Labor Law, Standardization Law, Measurement Law, etc.

(2) ISO international standards.

(3) Over 20 internal control standards, inspection procedures, technical regulations, and responsibility frameworks established by the Quality Assurance Department. These serve as the regulatory basis for controlling product quality across the entire factory and ensuring inspection quality.

VII. Equipment Assurance System

Equipment serves as the essential tool for manufacturing products. Maintaining optimal equipment condition is a prerequisite for ensuring product quality, with its operational integrity and precision being critical factors. The company implements the following measures:

1. Conduct technical upgrades on key equipment impacting product quality;

2. Establish a maintenance system with designated personnel, responsibilities, and schedules for upkeep;

3. Establish a testing center, introduce advanced inspection equipment, and enhance testing capabilities;

4. Conduct regular calibration of testing instruments and gauges to ensure their operational integrity.

VIII. Proactive Adoption of International and Foreign Standards

Facing intense competition in domestic and international markets, our company actively adopts international standards and foreign standards—specifically those established by the International Organization for Standardization (ISO) and other international organizations recognized and published by ISO. Implementing internal control standards that exceed these requirements to regulate product parameter production has significantly enhanced product quality and propelled the company's growth in both domestic and international markets.

IX. Product Certification and Accreditation System

The company has obtained Quality Management System Certification, Environmental Management System Certification, and Occupational Health and Safety Management System Certification. With over 20 years of delivering safe, stable, and efficient products, Putian has earned the trust of a broad customer base and evolved into one of China's most influential and competitive manufacturers of one-way clutches. It plays a leading role in guiding the domestic internal combustion engine market, driving industrial development, and advancing technological innovation. After over three decades of growth, the company has consistently upheld the philosophy of “Putiantian's Endeavor, Our Shared Endeavor.” Through relentless effort and integrity in business operations, it has established an excellent market reputation with high-quality products and superior service. For consecutive years, it has been honored as a “Top 100 Industrial Enterprise” and “Dragon Enterprise” by the Yuhuan County Party Committee and Yuhuan County People's Government. The company has also received numerous accolades including “Taizhou Famous Trademark,” “Taizhou Brand Product,” “County Advanced Collective for Quality Work,” “Zhejiang Famous Brand Product,” “Zhejiang High-Tech Product,” “High-Tech Enterprise,” “County Mayor's Quality Award,” “Provincial Advanced Unit for Caring for Migrant Workers,” “Taizhou Technological Innovation Demonstration Workshop,” “Outstanding Enterprise Trade Union for Establishing Harmonious Labor Relations,” and “Taizhou Labor Harmony Enterprise.” The company has also been recognized for multiple consecutive years as an “Outstanding Supplier” and “Outstanding Cooperative Supplier” by renowned domestic host manufacturers including Tianjin Denso, Jinzhou Hana, Beijing Petrel, and Changsha Bosch.

X. Quality Control System

1. Regular quality meetings shall be convened, led by the General Manager, with the Deputy General Manager for Quality, relevant departments, and management representatives responsible for collecting recent quality information and implementing timely corrective actions to ensure the effective operation of the quality system.

2. Conduct 100% inspection of incoming raw and auxiliary materials from the point of entry to ensure compliance with raw material inspection specifications and procurement management systems;

3. Establish quality control points at all special processes throughout the factory to promptly monitor product quality information at each stage, eliminating nonconforming products at the earliest stage;

4. Maintain comprehensive product quality performance records for statistical analysis. Promptly address factors affecting quality and adjust production processes as needed.

XI. Performance Evaluation Management System

As the saying goes: “Without rules, nothing can be accomplished.” This principle equally applies to enterprise management. The company has established a Performance Evaluation Management System for each position, setting quantifiable standards for workload, accuracy, timeliness, equipment maintenance, attendance, and innovative work methods. All evaluations are based on comprehensive data analysis to avoid favoritism. Performance-based bonuses are distributed on top of base salaries, not only reflecting the principle of “more work, more pay” but more importantly encouraging employees to think creatively, strive for innovation, and boost overall motivation. Otherwise, repeating the same tasks year after year will stifle work enthusiasm, and the company's workforce will quickly become obsolete.

XII. Corporate Culture: Emphasis on Quality Philosophy

Corporate culture is the fundamental expression of an enterprise's individuality—the very soul of its survival, competitiveness, and development. Without a positive spirit and a robust cultural atmosphere, an enterprise pursuing profitability cannot achieve healthy growth, let alone become a world-class organization.

Company leadership recognizes that while systems and income adjustments are primary management tools, relying solely on such hard management is insufficient. “Employees are the company's greatest asset.” Their motivation and creativity determine the enterprise's future. As individual contributors, the quality and ethical values they cultivate directly shape their daily work attitude. Therefore, fostering a robust cultural foundation requires prioritizing the development of employees' spiritual and ethical dimensions.

The company has consistently emphasized maintaining a pristine factory environment, investing annually in significant improvements to workplace sanitation. A dedicated 5S leadership team oversees and manages these efforts. Initially, many employees questioned this focus, believing that prioritizing quality and output was sufficient. However, witnessing the factory grounds become increasingly spacious and tidy, with noticeable improvements each year, they observed how a better environment lifted morale and correspondingly boosted work efficiency.

The company develops detailed annual employee training plans, and accommodates additional training requests from departments as needed. Management strongly encourages employees to pursue external professional development, offering support to balance work and learning commitments. This ensures every employee with aspirations gains opportunities for self-improvement. Training methods are diverse: systematic lectures by senior engineers (both internal and external), outsourced training programs, instructional videos, and educational recreational activities. Content spans quality control, production techniques, safety protocols, and more. Regular bulletin boards, posters, and banners within the factory emphasize quality regulations and knowledge. This comprehensive, sustained educational approach subtly enhances employees' quality awareness and sense of responsibility. As awareness deepens, the mindset shifts from “I have to do it well” to “I want to do it well.” This discards attitudes like “good enough” or “close enough” that conflict with the pursuit of high quality, ultimately generating quality benefits and improving product standards.

XIII. Team Stability: Selecting Excellence to Unite Hearts

Corporate cohesion, team spirit, and quality assurance capabilities are closely intertwined. Stronger cohesion fosters harmonious relationships among departments and members, making it easier to achieve overall corporate and quality objectives. To enhance cohesion, emphasis must be placed on mutual communication among members. Communication facilitates information flow, deepens mutual understanding, promotes acceptance, and elevates teamwork spirit.

Quality management is not the responsibility of a single department; it requires the concerted effort of all involved units. The feedback and transmission of quality information are particularly crucial. The company has implemented internal management across the entire process, from raw material intake to finished product shipment. Through methods such as feedback forms, internal phone calls, regular meetings, and special topic sessions, all relevant departments gain access to quality information at every stage of the product lifecycle, ensuring effective communication between departments. Additionally, senior leadership has established the practice of regularly visiting production areas, making at least one or two rounds of the entire production line daily. This allows them to stay informed about daily production status and enables employees to directly convey questions or suggestions, enhancing efficiency and fostering a sense of approachability.

Employee compensation is crucial for team stability. The company gradually widens the wage gap among on-duty personnel based on position importance and individual performance. This approach sustains motivation for key roles and high performers while encouraging lower-income employees to strive for parity, fostering an upwardly mobile environment.

Beyond hiring foreign experts or recruiting senior talent, the company prioritizes internal talent discovery and development. It actively identifies and promotes technical and managerial talent from frontline employees. The company now boasts a cohort of blue-collar technicians who possess both formal qualifications and practical skills. These individuals combine technical expertise with a solid cultural foundation. The company emphasizes blending experience with youth, with veterans mentoring newcomers to maintain team vitality and continuity. It has established “Employee Innovation Studios” within the enterprise. Led by Comrade Huang Changchun—recipient of Yuhuan County's “Outstanding Employee for Overcoming Difficulties,” Taizhou City's “Outstanding Employee for Overcoming Difficulties Nomination Award,” Taizhou City's “Top Ten Gold Medal Workers,” Taizhou City's Vocational Skills Leader, and Zhejiang Province's May 1st Labor Medal—the studio brings together the technical innovation team, senior R&D engineers, key personnel, and union cadres to form the company's Employee Innovation Studio Leadership Group. Through years of cultivation and refinement, the company has established a clear distinction between management and technical personnel, forming robust succession pipelines for critical positions. This has laid a solid personnel foundation for the sustainable development of quality management. The company has nurtured two recipients of the Zhejiang Province May 1st Labor Medal, significantly enhancing employees' sense of professional pride.

XIV. After-Sales Service Commitment

To ensure customer confidence in using our products, we hereby provide a reliable and effective commitment regarding product quality and after-sales service:

1. The company guarantees that all supplied products have passed national batch-by-batch inspection and been released for shipment.

2. We guarantee production, packaging, and delivery in accordance with contract requirements, providing product quality certificates. Should customers have new product requirements, our robust design and R&D capabilities enable us to offer comprehensive services.

3. Upon contract signing, we will deliver goods promptly as stipulated (while submitting corresponding certification documents per user requirements).

4. We offer technical consultation regarding our products.

5. Quality Assurance Department Contact: 0576-87509801

XV. Establish Multiple Channels for Stakeholder Communication

a) Employee Communication: Utilize labor unions, staff assemblies, forums, surveys, corporate WeChat groups, bulletin boards, suggestion boxes, and regular meetings to ensure employees understand corporate culture, policies, objectives, initiatives, and developments.

b) Supplier and Customer Communication: Maintain engagement through supplier conferences, trade shows, industry conference visits, site tours, promotional materials, and on-site guidance.

c) Government Communication: Regularly submit statistical reports and data, participate in government meetings and forums, and engage in interactive sessions or training activities with relevant departments.

d) Public Communication. Extensive publicity through signage, corporate WeChat platforms, newspapers, magazines, and other media. Foster societal awareness through employee attire, participation in relevant social activities, and similar initiatives.

XVI. Ethical Conduct

a) The company upholds the common cause of Putian and integrity in compliance with laws as fundamental corporate principles, which every employee must adhere to.

b) For years, the company has upheld the values of “integrity, dedication, and innovation,” adhering to business ethics. It has established trustworthy, mutually beneficial partnerships with customers and suppliers, achieving win-win outcomes.

c) The company pursues a simplified and scientific compensation system. In its formulation and management, it consistently follows five principles: fairness and impartiality, competitiveness, motivation, alignment with corporate economic performance, and legality.

d) The company annually recognizes employees through various commendations, such as outstanding worker awards and employee excellence honors. This ensures employees gain not only compensation but also recognition, confidence, dignity, and a sense of self-worth from their work.

e) The company motivates employees by establishing role models, utilizing the “Big Ant” WeChat group and bulletin boards for commendations, issuing commendation notices, and awarding certificates of honor. These measures enhance employee cohesion and commitment, driving higher performance.

f) The company has established a comprehensive, independent oversight mechanism to monitor corporate and senior leadership operations. A labor union has been formed to safeguard the interests of employees at all levels. Through coordinated efforts of the Party, labor union, youth league, and mass organizations, the company fosters harmonious labor relations.

XVII. Establishing a Comprehensive Customer Satisfaction Measurement System

The company implements customer satisfaction surveys through multiple channels and methods, including customer satisfaction questionnaires, surveys, online polls, telephone interviews, and thematic investigations. Customer insights are gathered across multiple dimensions, including loyalty levels, perceived value, satisfaction levels, expected product quality standards, and competitor comparisons.

a) Questionnaire Surveys. Random surveys are conducted on company products, using graded scoring to gauge customer satisfaction. Feedback is relayed to the company and relevant departments. Departments are notified to address and improve items where customer dissatisfaction is identified. Improvements are verified within one week until customer satisfaction is achieved.

b) Telephone Surveys. Conduct research by contacting customers via phone.

c) Regular Visits. The company conducts periodic on-site visits to track product usage and promptly gather user feedback.

Obtaining Competitor Comparison Data

a) Sales representatives conduct unscheduled visits to local customers to gather information on comparable companies during bidding processes, understand product usage scenarios, listen to customer experiences with competitors' products, and promptly obtain customer demands regarding products, services, and local market intelligence.

b) Leverage online resources to research competitors' basic information. Collect the latest competitor developments through seminars and press conferences they host. Gain insights via industry associations, trade shows, and other channels.

XVIII. Employee Performance Management System

To ensure the achievement of strategic objectives, the company has established a scientific performance appraisal system. Through performance evaluations, it provides accurate assessments and measurements of each employee's work performance and capabilities, unlocks their performance potential, and offers objective basis for rewards and penalties, capability development, training, rational allocation, and cultivation and utilization. Performance appraisal flowchart:

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Establish evaluation objectives

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Formulate written commitments

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Periodic planning and summarization

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Daily coaching and motivation

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Employee evaluations and performance reviews

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Performance data collection

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Communication of assessment results

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Capability development plans

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Performance improvement plans

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Salary and Bonuses

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Professional Recognition

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Rating, Promotion, and Job Transfer

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Last-Place Elimination

Step 1

Performance Planning

Step 4

Application of Results

Step 2

Coaching and Review

Step 3

Evaluation Feedback

XIX. Fostering a Harmonious Employee-Centric Culture

People are the company's only true resource. Employees are the lifeblood of the enterprise. A people-oriented approach is one of our core business philosophies. We strive to utilize talent effectively, fully unlock each employee's potential, and provide opportunities for growth and development. We promote team spirit, strengthen corporate cohesion and centripetal force, laying a solid foundation for the company's sustainable development.

a) The company places great emphasis on training. Based on the needs of employees in various positions, we formulate and implement an Annual Training Plan to continuously update knowledge and skills, enabling employees to keep pace with the ever-evolving society and market. We also evaluate the effectiveness of training.

b) The company employs a rational and scientific approach to talent utilization, implementing incentive mechanisms, personnel selection systems, and distribution frameworks. A fair competition system ensures that capable individuals advance, average performers step aside, and underperformers are removed. This fosters a mindset of preparedness and ambition among employees, enabling outstanding talent to emerge. Clear rewards and penalties maintain healthy and standardized talent mobility.

c) Provide employees with a healthy, safe, and comfortable office and production environment. Establish occupational health and safety policies and objectives, strictly adhering to relevant occupational health and safety management regulations.

d) Conduct pre-employment safety training for all new employees. Organize annual safety training for special operations personnel. Conduct periodic re-examinations for special occupations as required by national regulations and perform regular equipment inspections. Additionally, provide free, unscheduled occupational health examinations for all employees and conduct environmental monitoring in production areas to ensure their physical and mental well-being.

e) The company maintains constant vigilance on safety matters. It develops emergency response plans for accidents and other incidents, invites experts and safety supervision departments to provide on-site guidance, and annually conducts fire safety knowledge training and drills. A dedicated safety team conducts daily inspections at production sites, promptly reporting identified hazards to functional departments for immediate rectification.

f)

XX. Employee Satisfaction Assessment

a) Market questionnaires are distributed to gather employee feedback on management systems, compensation and benefits, work environment, and other aspects. This feedback is comprehensively analyzed, summarized, and synthesized to identify key factors influencing employee satisfaction.

b) Employee satisfaction levels are scientifically surveyed.

c) Based on the satisfaction survey, the company can directly and authentically assess employees' satisfaction with the organization, understand their concerns, and identify their most pressing needs. Targeted improvements and enhancements are implemented, along with corrective measures, to foster stronger teamwork, cohesion, and productivity across departments while elevating employee satisfaction. For instance, regarding compensation, the company comprehensively reviewed industry standards and actual work conditions to adjust overtime allowances. For paid leave, adjustments were made in accordance with national regulations and employee feedback, increasing annual leave entitlements.

XXI. Established High-Standard Work Environment Infrastructure

Amid increasingly stringent environmental regulations and heightened focus on pollution control and health safety, the company has constructed a modern enterprise integrating office, R&D, production, and warehousing facilities. Activity spaces, learning areas, training rooms, offices, R&D labs, production facilities, process flows, manufacturing equipment, and testing apparatus were all designed and built to industry standards. This lays the foundation for the company's leadership position within the domestic industry.

XXII. Establishing Robust Safety Infrastructure Management to Foster a Secure Business Environment

a) Company leadership maintains a high level of safety awareness, strictly adhering to the provisions of the Work Safety Law to ensure adequate investment in safety facilities and equipment.

b) To enhance the safety knowledge and skills of all employees, strengthen safety awareness and responsibility, and create favorable infrastructure conditions for the Work Safety Month campaign, annual safety and fire drills are conducted. Firefighting equipment is inspected regularly.

c) Maintain detailed ledgers for all safety facilities and equipment, categorizing, numbering, recording, and conducting regular physical counts to ensure ledger-physical inventory consistency.

d) Conduct regular inspections of firefighting equipment, particularly monitoring fire extinguisher pressure levels. Address any identified issues promptly and effectively.

XXIII. Concluding Remarks

In the fierce domestic and international market competition, China Post's ability to remain invincible largely depends on product quality, core technological capabilities, independent innovation capacity, and brand cultivation and development. Further advancing quality revitalization efforts holds significant importance for promoting industrial structure optimization and transformation, accelerating economic growth, and ensuring we persistently pursue the path of quality enhancement.