# Quality control on raw materials

Our quality control team inspects our incoming raw materials at our warehouse. For hot rolled steel coils, we inspect the raw materials by checking the quality certificate provided by the suppliers which sets out the respective specifications of the hot rolled steel coils. Other raw materials are inspected by our quality control personnel on a sampling basis to ensure their quality meets their respective specifications and parameters. Laboratory tests are being carried out by our quality assurance staff to assess zinc and other raw materials.

# Quality control throughout the production process

Our production process control consists of a multi-point checking system from the beginning to the end of our production process. Our quality control team conducts random check on the major steps of our production process. At the end of the production process, we conduct physical check on our Cold Rolled Steel Products on a sampling basis to verify that their mechanical and dimensional properties meet our customers’ requirements.

# Selection of subcontractors and quality control on products processed by subcontractors

Our procurement team selects our subcontractors by carrying out evaluation and assessment and we maintain a list of approved subcontractors. Our quality control team inspects and keeps track with our products before sending to our subcontractors for their further process.

During the Track Record Period and up to the Latest Practicable Date, we did not receive any material claims or complaints by our customers in respect of the quality of our products and there was no incident of failure of our quality control systems which had a material and adverse impact on our business operations.

# PRODUCT DEVELOPMENT

Our product development activities are carried out by six members from our technical department as at the Latest Practicable Date, and is led by Mr. Guo Zhongyi, who has over 22 years of experience in the manufacturing industry in the PRC. For further information about the qualification and experience of Mr. Guo, please refer to the section headed “Directors And Senior Management — Senior management” in the prospectus.

We had two invention patents and 16 utility model patents in the PRC as at the Latest Practicable Date. The following table sets out further information of our two invention patents and three material utility model patents:

<table><tr><td>Material patents we owned</td><td>How the processing techniques of the patents
improve our production process</td></tr><tr><td>Invention patents</td><td></td></tr><tr><td>Zinc pot and its machining
process (鋅鍋及其加工工藝)</td><td>A process that solves the technical problem of the
dross stain on the steel coil due to oxidization
of the traditional zinc pot surface, which
enhances the surface quality of the steel
product</td></tr><tr><td>A kind of continuous
galvanizing, polishing and
embossing process (一種連
續鍍鋅平整壓花工藝)</td><td>A process that prevents the occurance of the id
yellfpatorm (屈服平台), improves the flatness and
rouhbgness of the oard surface and controls the
depth of the pattern, which reduces the
thickness and increases the length of the steel
product</td></tr><tr><td>Utility model patents</td><td></td></tr><tr><td>A kind of reciprocating
liquid zinc pumipng and
deslaid往ggng evice (一種
復式抽鋅液除渣裝置)</td><td>A reciprocating pump that eliminates the scum
defects of unpainted galvanized steel products
causedb y dross and zinc dust in the zinc pot,
which enhances the surface quality of the
unpainted galvanized steel product</td></tr><tr><td>The zinc dust treatment
deviceb ased on the
humidification treatment
in the nose of the
galvanization furnace (基於
加濕處理的鍍鋅爐爐鼻內鋅
灰處理裝置)</td><td>A device that imhproves the atmospere in the
nose of the galvanization furnace and cleans the
zinc dust content inside the galvanization
furnace, such that the overall processing
accuracy of the galvanization furnace and the
quality of the lpating of the metal sheet canb e
improved</td></tr><tr><td>Hihg pressure cleaning
device for polishing
machine (平整機用高壓清潔
裝置)</td><td>A cleaning device that removes the residual oily
substances and impurities of the polishing
rollers from the surface of the unpainted
galvanized steel products, and eliminates the
surface defects causedb y the crumbs of zinc on
the polishing rollers during the polishing
process, which enhances the surface quality of
the unpainted galvanized steel product</td></tr></table>