China Agri continues to strengthen our food safety management. We aim to solve the food safety issue with the application of full value chain food safety management. We deal with food safety challenges along the value chain by strengthening source management, standardizing risk management during production and the processing stages, and improving sales management.

1. Strengthening Sourcing Management
Sourcing management includes the management of plantation bases, suppliers, the expansion of certain projects and oversight of our R&D process. In order to strengthen our sourcing, we continuously monitor the environment of our farms. We also control all aspects of our supply chain through various means, such as “self-owned production base”, “contract farming and “reverse contracting with lease-back”. As for supplier management, we have established a standardized supplier management system to regulate the selection and evaluation of suppliers, routine procurement, materials inspection, and supplier’s guidance. Our goal is to foster a win-win partnership with our suppliers and provide appropriate guidance. In regards to project management, we developed a food safety risk evaluation mechanism to provide technical support for our decision making concerning new construction, transformation and expansion projects. When developing new products, we strove to ensure fundamental food safety by avoiding risks at the product development stage by optimizing our processing procedures and using quality ingredients.

2. Standardizing Production Process Management
Regarding the hardware of production, we obtained advanced oil and grain production lines, laying a solid foundation for safety and quality in terms of equipment, processes and technologies. Regarding the software guarantee for food safety, we encouraged our subsidiaries to adopt a number of standardized protocols, such as Good Agricultural Practices (GAP), Good Manufacturing Practices (GMP), Good Healthy Practices (GHP), and Sanitary Standard Operating Procedure (SSOP). We also encouraged our subsidiaries to implement advanced quality control techniques, such as HACCP (Hazard Analysis and Critical Control Point), TQM (Total Quality Management), ISO9001 System, and other advanced quality and safety management techniques.

3. Strengthening Monitoring and Inspection at the Output End
We attach great importance to developing our inspection and testing capacity. Among our subsidiaries, all of those categorized as key food safety enterprises have set up inspection laboratories that were able to analyze regular indicators and some of the food safety indicators. Laboratories at some of these subsidiaries, such as COFCO East Ocean Oils & Grains Industries (Zhangjiagang) Co., Ltd. and COFCO Bio-Energy (Zhaodong) Co., Ltd. have passed qualification for state laboratories and were able to conduct third party inspection. All of our inspection personnel are certified, and all of our quality and safety standards are derived from state standards.

4. Strictly Managed Market Distribution
We signed contracts with distributors, making sure that they guarantee food safety and provide consumers with accurate labeling and product information to ensure their proper and safe usage.

5. Well Established Tracking System
We also continued to improve the full value chain food safety traceability system. Using external carriers such as documentation, electronic control code, and purchase and sales ledgers, we aimed to enable seamless connection of the procurement, production, transportation, and distribution and sales of the food value chain.