Shandong Santao Food Co., Ltd.

Quality Credit Report

Shandong Santao Food Co., Ltd.

May 5, 2017

Table of Contents

Part 1: Preface

Compilation Instructions…………………………………………………………………………….…………………3

Objectivity Statement of the Report Content……………………………………………………………..……………..4

Message from the General Manager………………………………………………………………………….………………..5

Company Overview…………………………………………………………………………….………………….6

Part 2: Main Report

Company Quality Philosophy………………………………………………………………….……………………..7

Internal Quality Management………………………………………………………………………………………..7

Quality Management Organizational Structure…………………………………………………………………………….....7

Quality and Food Safety Management System…….……………………………………………………………..10

Corporate Quality Integrity………………………………………………………………………………………..11

Quality Integrity Management………………………………………………………………………………………..11

Quality Culture Construction………………………………………………………………………………………..12

Company Quality Foundation………………………………………………………………………………………..13

Company Product Standards………………………………………………………………………………………..13

Company Measurement Standards………………………………………………………………………………………..14

Company Recognition………………………………………………………………………………………..14

Special Equipment Safety Management…………………………………………………………………………14

Product Quality Responsibility…………………………………………………………………………………………15

Product Quality Commitment…………………………………………………………………………………………15

Product Recall Management………………………………………………………………………………….15

Quality Risk Management………………………………………………………………….……………………..16

Quality Complaint Handling…………………………………………………………………….…………………..16

Quality Risk Monitoring………………………………………………………………………………………….16

Emergency Management………………………………………………………………………………………………….17.

Part 3: Conclusion

Outlook…………………………………………………………………………………………………………18

Reader Feedback………………………………………………………………………………………….18

Compilation Instructions

This report is the first Quality Credit Report published by Shandong Santao Food Co., Ltd.

Report Scope: Shandong Santao Food Co., Ltd.

Report Time Frame: May 5, 2017 to May 4, 2018

Report Publication Period: Annual Report

Report Data Statement: The data in this report is sourced from Shandong Santao Food Co., Ltd.

Report Access: This report is published electronically on the company’s website: www.santaos.com

Contact Information:

Address: Linghe Town, Anqiu City, Shandong Province, China

Phone: 0536-4561755

Website: www.santaos.com

Email: info@santaofood.com

Objectivity Statement of the Report Content

We solemnly declare:
The "Quality Credit Report" issued by our company consolidates and organizes the quality credit-related data and work since the company’s establishment. It represents the achievements of the company’s strict adherence to national laws and regulations, industry standards, and its efforts to fulfill product quality responsibilities and establish quality integrity mechanisms. All data and information in this report are authentic and reliable, in accordance with GB/T22120 "Enterprise Credit Data Items Specification" and GB/T22118 "Enterprise Credit Information Collection, Processing, and Provision Specification." Our company takes responsibility for the objectivity of the report content and willingly accepts social supervision.

Sincerely,

Shandong Santao Food Co., Ltd.
May 15, 2017

Message from the General Manager

- Integrity · Hard Work · Innovation

The production and processing of food are closely related to consumer health and are the foundation of a company’s survival. To ensure product safety, our company strictly follows food safety management system requirements and continuously improves to develop and perfect the food safety management system.

Food is the essence of life, and safety is the priority! Safe and healthy food is the inevitable direction for industrial development. Our company owns over 9,800 acres of its own and cooperative agricultural bases, including more than 3,500 acres of organic farms. The food we provide comes from our own production bases, with 100% full-process control from start to finish. We implement a unified management model, from production materials supply, technical guidance, cultivation, quality inspection, to harvesting and processing.

In the field of food planting and processing, Shandong Santao continues to undertake the sacred mission of ensuring healthy food for consumers and bravely explores ways to contribute to the globalization of food safety. Moving forward, Shandong Santao Food Co., Ltd. will continue to adhere to the business philosophy of "Food Safety First, Integrity in Business," leveraging advantages in the entire industrial chain, professional marketing, and health concepts to strengthen the national brand and provide the public with “green, nutritious, safe, and healthy” food products.

Company Overview

Shandong Santao Food Co., Ltd. is a large agricultural product processing enterprise, founded in 2003, with a total area of 435,000 square meters and a building area of 352,000 square meters. The company employs 2,800 people and is a key agricultural industrialization leading enterprise in Shandong Province. The company includes a preservation plant, frozen vegetable plant, prepared food plant, and poultry processing plant. It produces more than 20 product series, including frozen vegetables, frozen fruits, fresh vegetables, poultry products, and prepared raw and cooked products, with an annual processing capacity of over 400,000 tons. Among them, the frozen vegetable plant has an annual production capacity of 30,000 tons, expandable to 40,000 tons, with frozen ginger and garlic accounting for 6,000 tons and 4,000 tons, respectively.

The company's frozen vegetable plant covers an area of 35,000 square meters and obtained the SC production license for frozen fruit and vegetable products in 2016. The company has received KOSHER certification, passed HACCP and BRC certifications, and established a well-developed quality management team, with quality inspection personnel and laboratory staff in place. Shandong Santao Food Co., Ltd. always operates under the philosophy of "Food Safety First, Integrity in Business," representing the highest quality level in the industry, and has won wide recognition and praise from domestic and international customers.

With the continuous expansion of the company, the standardization and internationalization of management have become increasingly important. In the new situation, food safety standards and requirements have also become higher. Santao Food always adheres to the business philosophy of "Food Safety First, Integrity in Business," following the business strategy of "One Standard, Two Markets." From the source base, raw material control, production process, self-inspection and control, product traceability, and other aspects, the company uses international kitchen technology to form a complete process of quality, safety, and hygiene control system, continuously providing safe and healthy products to domestic and foreign consumers.

Corporate Quality Philosophy

Integrity – We continuously create a brand with integrity, integrating corporate culture and integrity building organically, implementing brand promotion comprehensively and multilaterally, and voluntarily accepting audits from financial, tax, and regulatory departments.

Hard Work – Every member of Santao understands that a person should have their own career or value, and strive every day to achieve their career and life goals. This is a complete life.

Innovation – Santao is committed to building higher platforms for every employee to realize their life value, with diligence, professionalism, caution, and integrity ingrained in every aspect of daily work, thus collectively realizing the company’s social value.

1. Internal Quality Management

1.1 Quality Management Organization

Responsibilities and Authority of Each Level:

General Manager:

a) Responsible for planning the food safety management system and approving its implementation company-wide.

b) Formulating food safety policies and objectives, making management commitments, and ensuring planning and ultimate responsibility for food safety.

c) Providing sufficient resources to ensure the effective operation of the food safety management system.

d) Implementing the organization structure and ensuring all personnel understand and adhere to food safety measures.

e) Organizing management reviews and internal audits, continuously improving the effectiveness of the food safety management system.

f) Establishing, implementing, and maintaining emergency procedures for potential emergencies and accidents that affect food safety.

Manager Representative / HACCP Group Leader:

a) Ensuring effective and timely communication of food safety-related information across departments.

b) Implementing and operating the prerequisite programs, operational prerequisite programs, and HACCP plans, ensuring their effectiveness.

c) Leading the verification of the food safety management system, including evaluating verification results and analyzing them.

d) Responsible for the improvement and continuous updating of the food safety management system.

Production Department:

a) Responsible for hazard analysis and establishing HACCP plans and operational prerequisite programs.

b) Organizing production according to plans and process requirements, ensuring hygiene management and preventing cross-contamination.

c) Monitoring, correcting, and verifying CCPs; supervising record-keeping during production.

d) Resolving issues within the system and implementing product recalls.

e) Supervising non-conformance handling, corrective and preventive measures, and cooperating with emergency handling.

Logistics Department:

a) Maintaining cleanliness and hygiene of the plant and the maintenance of infrastructure and equipment.

b) Responsible for internal and external communication and collecting and analyzing product information.

c) Overseeing comprehensive pest control within the company.

d) Establishing employee recruitment and personnel files, conducting regular health checkups.

e) Responsible for the procurement of packaging materials and effective communication with suppliers.

f) Organizing emergency response drills for the company.

Quality Control Department:

a) Responsible for establishing, implementing, and updating the food safety management system’s documents, procedures, and records.

b) Conducting hazard analysis, defining CCPs, critical limits, and OPRPs, and monitoring, managing, and verifying them.

c) Facilitating communication within and outside the department.

d) Establishing product identification methods, ensuring product traceability, and verifying compliance with traceability systems.

e) Managing non-conforming and potentially unsafe product control procedures.

f) Responsible for confirming control measures, verifying HACCP plans, and monitoring and measuring controls.

g) Participating in the validation and continuous update of system documents.

Procurement Department:

a) Procuring materials at the lowest cost while meeting material usage requirements.

b) Minimizing capital occupation while ensuring supply to all units.

c) Managing exchanges, returns, and claims for non-compliant materials.

d) Responsible for bidding and purchasing large quantities of materials.

e) Participating in large equipment procurement and handling business activities post-bidding.

f) Managing key supplier files.

2. Quality and Food Safety Management System

Our company has formulated the food safety management system in accordance with ISO 22000:2005 "Food Safety Management System Requirements for Organizations in the Food Chain." The effective implementation and application of this system, including continuous improvement processes, ensure compliance with customer and legal requirements, thus enhancing customer satisfaction.

Company Food Safety Policy:

"Self-reliance, professionalism, and safety."

Company Food Safety Objectives:

0 food safety incidents;

Customer complaints < 15, customer satisfaction > 96%;

On-time delivery rate 98%, product quality compliance rate 98%.

Departmental Food Safety Objectives:

Quality Control Department: Timely and effective document management, record monitoring, and 100% product traceability.

Production Department: 95% first-pass product verification rate, 100% production task completion rate.

Testing Center: 100% correct test results, 100% control of non-conforming products.

Sales Department: 100% contract fulfillment rate, 100% complaint resolution rate, immediate response to customer complaints.

Logistics Department: 100% equipment maintenance rate, 100% pest control rate.

Finance Department: 100% warehouse integrity, ensuring consistency between accounts, materials, and cards.

2.1 Quality Integrity Management

1. Quality Integrity Management

To shape the company’s trustworthy image, we consciously abide by laws and regulations, act with honesty and integrity, strictly follow product quality laws, and adhere to the principle of "quality first, integrity in business." We have been repeatedly recognized as a key agricultural industrialization leading enterprise in Shandong Province and as an exemplary unit for "11315 Integrity Model."

Raw Materials: All raw materials are sourced from the company’s owned or contracted bases, and a raw material inspection system is in place to ensure quality.

Quality Control Processes: We thoroughly identify processes that impact product quality, establish strict operating procedures, set critical control points, and ensure strict control. We insist on self-inspection, mutual inspection, and customer quality awareness at every stage to ensure stable process quality.

Quality Integrity Inspection System: In accordance with relevant regulations, we employ qualified or capable inspection personnel to rigorously inspect and verify raw materials, maintain records of inspections, and ensure that necessary inspection equipment is in place. Final product quality is tested according to standards, ensuring that non-conforming products do not leave the factory, and factory inspection reports are properly maintained. We also maintain a register of testing equipment and calibrate it regularly to ensure compliance with requirements.

After-Sales Service System: We have established a customer service system, keeping customer records, publishing complaint contact numbers, addressing complaints, and striving to achieve customer satisfaction. Regular customer surveys are conducted, and quality is continuously improved.

Product Traceability: For products related to human health, safety, or property, we have set up an effective product traceability system. We can promptly recall defective products and appropriately handle product quality incidents, holding responsible individuals accountable.

2. Quality Culture Construction

Enhancing Quality Awareness: We aim to establish a shared quality awareness among all employees.

Promoting Comprehensive Quality Management: We actively implement BRC, GAP, and HACCP food safety management systems, establishing a strict quality responsibility system. Clear quality standards, requirements, and job responsibilities are set, and quality assessment indicators are assigned to individuals, with strict evaluation.

Integrating Quality Management and Company Philosophy: Shandong Santao has developed a unique business model by dividing the company into multiple business units and operating independently with direct market engagement. This model encourages leadership with management awareness and involves all employees in business management, thus realizing the "all-participation" business philosophy.

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3. Corporate Quality Foundation

1. Corporate Product Standards

Our company’s ginger, garlic, and related products follow the Q/ST 0001S enterprise standard.

Main Performance Indicators for Ginger and Garlic Products:

Sensory Requirements
These should meet the specifications in Table 1.

Table 1: Sensory Requirements

Physical and Chemical Indicators
These should meet the specifications in Table 2.

Table 2: Physical and Chemical Indicators

Microbiological Indicators
These should meet the specifications in Table 3.

Table 3: Microbiological Indicators

Note: The sampling and handling of samples follow GB 4789.1. This applies only to cooked products.

2. Corporate Measurement Level

The company strictly complies with the "Measurement Law of the People's Republic of China" and has established procedures for the management of inspection and measuring equipment, ensuring that the relevant standards are followed. We equip our production with necessary testing devices such as biochemical incubators, drying ovens, electron microscopes, analytical balances, thermometers, pH meters, acid meters, and other measuring equipment.

To further improve the accuracy of testing data, we require measurement and testing personnel to regularly study related laws and regulations, while also performing periodic comparison tests to ensure high accuracy of test data.

3. Certification and Recognition

Since 2003, the company, through the continuous efforts of all employees, has achieved 6 third-party recognized product certifications: HACCP, BRC, GAP, KOSHER, FDA, and SC. These certifications have helped to establish and improve the company’s quality management system.

4. Special Equipment Safety Management

To raise the safety production awareness of all employees and ensure the safety of the company’s property and personnel, as well as to promote the safe and stable development of the company’s production operations, the company’s General Manager is the first person responsible for safety production. The company has revised and improved its safety production management systems.

In accordance with the "Production Safety Law" and "Special Equipment Safety Supervision Regulations," the company registers its special equipment and designates a dedicated safety manager, ensuring 100% certification rate for staff handling special equipment. The company organizes regular safety checks for special equipment, promptly eliminating potential risks. The safety measures are recorded and regularly reviewed.

5. Product Quality Responsibility

1) Product Quality Commitment

To meet customer demands and ensure customer satisfaction, our company makes the following commitments to product quality:

a) We will comply with national laws and regulations such as the "Food Safety Law," "Product Quality Law," and "Production License Management Regulations."

b) The ginger, garlic, and related products manufactured by our company are licensed for food production, with the production license number: SC11137078400661.

c) We ensure that 100% of our products are qualified before shipment, with clearly stated shelf life, and the product quality meets the relevant standards.

d) We will compensate consumers for losses caused by product quality issues in accordance with relevant national laws and regulations.

The company is willing to accept supervision from all sectors of society and actively take responsibility for product quality.

Supervision Phone: 0536-4561755

2) Product Recall Management

To strengthen product safety management, standardize the market withdrawal of non-conforming products, enhance the company’s image of integrity in business, and ensure the health and safety of consumers, the company has developed a comprehensive procedure for managing potential unsafe and non-conforming products, as well as product recalls and traceability control. This system ensures that all products leaving the factory are 100% compliant, from raw material entry to product sales. The company has implemented a strict quality standard and monitoring system across the entire process, and has enhanced quality and safety awareness among all employees through various training, thereby preventing recall events from occurring.

6. Quality Risk Management

1. Quality Complaint Handling

To expand sales and adapt to market consumption trends while providing excellent after-sales service, the company has developed a quality complaint handling procedure. The procedure is as follows:

(1) The company has a dedicated customer service hotline in the sales department to handle quality complaints. If other departments receive customer complaints, they should direct the customer to call "Sorry, please dial 0536-4561755."

(2) If a complaint is received outside working hours, the on-duty staff should explain to the customer: "We are currently closed. Please call 0536-4561755 tomorrow." The explanation should be sincere, and a duty record must be made. The sales department should be notified the next day to follow up with the customer. If the customer reports a significant quality issue, their contact information should be taken, and the general manager should be informed immediately.

(3) The sales department, upon receiving a customer complaint, will record the product batch, specifications, and complaint details on the "Customer Complaint Form," asking the customer to fax detailed information to 0536-4571168. The form will be transferred to the quality control department in the form of an information liaison slip.

(4) Any department receiving customer quality complaint emails or letters should promptly forward them to the quality control department, confirming the transfer with an information liaison slip.

All customer complaints should be transferred within one working day.

2. Quality Risk Monitoring

Possible Emergencies and Response Measures

Outlook

Quality management remains a long-term responsibility. In the future, Shandong Santao Food Co., Ltd. will continue to adhere to the corporate quality philosophy of "Integrity, Hard Work, Innovation," with customer satisfaction at the center. The company will keep improving internal management systems.

In the new era, Shandong Santao will continue its mission to provide healthy food to consumers, exploring its contributions to global food safety. Looking ahead, the employees of Santao remain passionate and determined, striving to create a path for "green, nutritious, safe, and healthy" food. We are on our way!

Reader Feedback

Dear Reader,

Thank you for taking the time to read this report. This is our first Quality Credit Report. To further improve the quality of our work in implementing corporate quality responsibility, we would appreciate your valuable feedback and suggestions for continual improvement.

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