Preface

 

I. Compilation Standards

(1) Statement of Content Objectivity:

This report provides an overview of the enterprise’s efforts to establish a quality and integrity management system during the reporting period, with content that is truthful, objective, and impartial. It is intended solely for public oversight and as a reference for business decision-making.

(2) Scope of the reporting organization:

Panjin Liaohe Oilfield Tianyi Petroleum Equipment Co., Ltd.

(3) Reporting Time Frame:

From January 1, 2017, to December 31, 2017, certain data and content fell outside the scope mentioned above.

(4) Explanation of Report Data:

In the event of any discrepancies between the financial data disclosed in this report and the financial statements, the financial statements shall prevail. All other data are derived from the company’s internal statistics. Unless otherwise specified, all monetary amounts in this report are expressed in RMB.

(5) Reporting Release Cycle:

The Quality Credit Report of Panjin Liaohe Oilfield Tianyi Petroleum Equipment Co., Ltd. is an annual report.

 

II. Chairman’s Address

Quality first and honest business practices are fundamental requirements of the market economy for all modern enterprises, serving as the cornerstone of their survival. Without integrity, individuals cannot stand; without it, businesses cannot thrive; and without it, nations cannot grow strong. Honesty and trustworthiness have long been cherished virtues of the Chinese nation. For the state, they embody national dignity; for enterprises, they reflect brand identity and reputation; and for individuals, they signify character and moral integrity.

At Tianyi Company, from leadership to every employee, the quality‑and‑integrity philosophy of “Quality First, Integrity Above All” is firmly embedded in every aspect of production and operations, thereby realizing the company’s value and enhancing its brand image.

Quality and integrity are not matters of a moment, but commitments for a lifetime. Moving forward, we will continue to uphold the principle of “quality first, honest conduct,” with unwavering sincerity, and make even greater contributions to elevating the quality and credibility standards across the entire equipment‑manufacturing industry.

 

III. Company Profile

Panjin Liaohe Oilfield Tianyi Petroleum Equipment Co., Ltd. is located in the Petroleum High-Tech Industrial Park of the Panjin Economic Development Zone. Established in 2006, the company has a registered capital of RMB 50 million and total assets of RMB 437 million. Its revenue reached RMB 164 million, with a total profit of RMB 6.92 million. The company’s core product is the top drive drilling system for oil rigs (hereinafter referred to as “top drive”), which boasts internationally advanced technology, proven maturity, and a comprehensive service network. Its market spans major oilfields across China as well as overseas markets, where it holds the leading domestic market share and ranks first in service quality.

The company has been awarded numerous honors, including “Provincial Unit for Contract Compliance and Creditworthiness,” “Liaoning Province High-Tech Enterprise,” “Provincial Private Sector Star Enterprise,” “Liaoning Province Technology Innovation Demonstration Unit,” “Provincial Enterprise Technology Center,” and “Provincial Intellectual Property Pilot Unit.” Its top drive system has obtained ISO 9001 quality management system certification, API certification from the American Petroleum Institute, and CCS certification from the China Classification Society.

 

Part One: Corporate Culture of Quality and Integrity

 

(1) Quality and Integrity Objectives

The quality policy of this enterprise is:

Industry-leading; Quality-driven; Continuous improvement; Customer satisfaction

Meaning of the Quality Policy:

“Industry leadership” requires enterprises to build on their existing strengths, continuously strive for progress, first consolidate their position, and then pursue a leading role in the industry.

“Quality First” is our company’s guiding principle and commitment to product quality, ensuring the superior quality of our products and services.

“Continuous improvement” goes beyond customer expectations. We must constantly elevate our management standards, address shortcomings through ongoing refinement, and deliver even better service to our customers.

“Customer Satisfaction” embodies all of the company’s business activities, with every effort consistently centered on meeting and exceeding customer expectations.

Quality Objectives:

1. The first‑time pass rate for product inspection exceeds 90%.

2. The factory’s product pass rate reaches 100%;

3. Customer satisfaction rate exceeds 90%.

4. Customer satisfaction resolution rate: 100%.

(II) Corporate Quality and Integrity Commitment

1. Strictly comply with and enforce the relevant laws and regulations of the People’s Republic of China, including the Consumer Rights Protection Law, the Product Quality Law, and the Measurement Law. Ensure that all business operations—production and processing, sales, brand promotion, and after-sales service—are conducted in good faith and in full compliance with the law, without any falsification or deception, and maintain comprehensive quality records.

2. Strictly establish product quality standards in accordance with the relevant national and industry standards, and rigorously implement them to ensure that products comply with both quality requirements and applicable laws and regulations.

3. In compliance with the requirements of API Q1 and GB/T 19001-2016 (ISO 9001:2015) for quality management systems, the company has established and refined a robust quality management system, implemented comprehensive product‑related management activities, pursued continuous improvement, and enhanced documentation and record‑keeping for product quality. Critical processes are subject to stringent control, and rigorous quality and metrological inspections are conducted. Through internal self‑inspections and management reviews, the company continuously elevates its quality management standards, thereby ensuring product quality.

4. Ensure that all measuring instruments and testing equipment used for product inspection are calibrated by a qualified calibration body and remain in valid working condition, thereby ensuring the rigor and effectiveness of all quality‑inspection activities and maintaining traceability through documented records of these activities.

5. The company leverages its ERP management system to implement product serial-number management, ensuring traceability.

6. The company is committed to placing customers at the center of its operations, continuously improving its after-sales service management system, and delivering high-quality after-sales support. Customer satisfaction serves as the guiding principle for all our business practices.

(3) Corporate Quality and Integrity Spirit

“Heritage, Innovation, Responsibility, Integrity”

Heritage: Heritage lies at the heart of “Tianyi Culture” and constitutes the enterprise’s most profound and distinctive hallmark. It entails not only revitalizing Tianyi Culture by carrying forward the spirit of the petroleum industry, but also leveraging the resources of the Liaohe Oilfield to develop cutting-edge petroleum equipment that supports oilfield development.

Innovation: Innovation is the soul of “Tianyi Culture.” For a company to thrive, it must break with convention, reinvent itself, and forge the very essence of progress and the source of vitality. By committing to building its own brands, driving independent innovation, and striving to become a century‑old enterprise, the company embodies a spirit of proactive advancement and relentless pursuit of excellence.

Responsibility: Responsibility is the cornerstone of “Tianyi Culture,” embodying an enterprise’s unwavering commitment and trust in its mission. At its core, Tianyi Culture seeks to create opportunities for its employees, generate value for society, and shoulder the duties and responsibilities entrusted by both society and history.

Integrity: Integrity is a defining characteristic of “Tianyi Culture,” reflected in the company’s values and its commitments to society. Whether in personal conduct, professional work, or corporate management, we place honesty at the core and steadfastly uphold trust and righteousness. Only through integrity can an enterprise prevail in an increasingly competitive market.

 

Part II: Fundamentals of Quality and Integrity Management

 

(1) Quality and Integrity Management Organization

To ensure the smooth operation of the Quality and Integrity Management System, the company has implemented a well‑structured organizational framework and optimized its staffing. The Deputy General Manager serves as the Head of Quality and Integrity Management, assuming overall responsibility for all day-to-day administrative functions. Each department has clearly defined roles and responsibilities, working collaboratively to carry out quality and integrity management tasks, thereby ensuring the effective operation and continuous improvement of the system and achieving the organization’s quality and integrity objectives.

The company has established a quality policy and quality integrity objectives, and its personnel, facilities, premises, and equipment are capable of meeting the conditions necessary to achieve these policies and objectives. An independent quality‑integrity management system and related procedures have been put in place, with dedicated management functions such as the Quality Management Department and the Production Management Department, and clear delineation of responsibilities for each department and its respective managers.

(II) Building the Foundations of Quality and Integrity

1. Quality Management System Development

To comprehensively enhance productivity and competitiveness, the company has adopted internationally advanced management practices—Excellence in Performance Management, 6S Management, and QMS—and ensures its quality system complies with relevant regulations and standards. In accordance with these requirements, the company has developed a comprehensive set of quality management system documents, established standardized document‑management procedures, and maintained timely, accurate, and complete records that are securely stored and readily accessible, resulting in the overall effective operation of the system.

At the senior management meeting, company leadership reinforced the importance of ensuring product quality meets customer requirements and legal and regulatory standards by communicating the company’s quality policy and objectives. They championed a customer‑centric approach, cascaded quality targets down to each department, and clearly defined the responsibilities and authorities of personnel at all levels. Furthermore, they ensured the timely availability of personnel, equipment, and materials, thereby maintaining continuous production and guaranteeing that quality consistently complies with applicable standards.

To meet customer needs, the company organizes production efficiently, expands its market reach, and continuously recruits talent and invests in new equipment, ensuring that all resources are aligned with production requirements. Regular training is provided to employees to equip them with the skills necessary to perform their assigned tasks. Furthermore, the company implements rigorous, standardized management of its facilities, infrastructure, equipment, and testing instruments to maintain optimal operational performance and safeguard product quality.

The company has established standards for quality control, quality inspection, and production operations to rigorously manage all factors—process parameters, personnel, equipment, and the environment—that influence product quality, thereby ensuring compliance with applicable standards.

The company has established a user access management procedure and employs methods such as distributing questionnaires, conducting telephone surveys, and making customer visits to assess satisfaction with product quality and services, as well as customers’ overall impressions of the enterprise. During production, the company has strengthened controls over nonconforming products, thereby effectively ensuring product quality. All departments are expected to make effective use of appropriate statistical techniques and data analysis methods to conduct statistical analyses of customer satisfaction, product conformity, process characteristics and trends, and product‑related services, and to develop targeted corrective measures to ensure the smooth operation of the quality management system. The company has also formulated a Management Procedure for Corrective and Preventive Actions to eliminate the causes of nonconformities and potential nonconformities, thereby preventing their recurrence or occurrence. With respect to nonconformities identified within the system, relevant departments are required to conduct thorough analyses, formulate practical and effective corrective and preventive measures, and implement them diligently, so as to continuously enhance the effectiveness of the quality management system.

2. Standard System Development

The company’s quality standards are based on national standards, industry standards, various regulations, and internal company requirements. The standards are comprehensive, covering provisions such as standard references, sampling procedures, and inspection protocols. In addition, a series of enterprise-specific standards has been developed to support oilfield operations.

All enterprise standards, whether newly formulated or revised, are drafted by technical experts in the relevant fields. They are then subjected to on-site review by a panel of specialists convened by the Standardization Committee of the Liaohe Oilfield Branch. Following continuous refinement and improvement, these standards are filed with the Liaoning Provincial and Panjin Municipal authorities before being put into effect. As for the inspection operating procedures developed by the enterprise, they are prepared by seasoned inspectors, reviewed by the deputy manager responsible for quality, submitted for managerial approval, and implemented after training has been provided to the inspection personnel. In addition to regular, scheduled group training sessions, supplementary training is promptly conducted on updated and refined quality standards and inspection procedures, employing diverse formats to ensure that every employee achieves proficient mastery.

 

Part III: Quality and Integrity Management

 

(1) Quality and integrity management throughout the product design, raw material or component procurement, production, and after-sales processes.

1. Integrity training for employees

To firmly instill a culture of integrity among all employees, the company formulates an annual Quality and Integrity Training and Education Plan at the beginning of each year. A three-tiered quality and integrity training system is implemented: the company conducts first-level education, while heads of each unit, in accordance with company guidelines, develop their own training plans and content and diligently organize training for their subordinates. Branch managers and workshop supervisors are responsible for conducting integrity awareness campaigns targeted at team leaders and frontline workers. The company delivers quality and integrity education through a variety of channels, including specialized workshops, written notices posted or distributed, exchanges of best practices among high-performing employees, morning or pre‑shift meetings, and visual displays. Employees who achieve outstanding results in these training programs receive appropriate recognition; those who demonstrate exemplary leadership or exceptional performance on the job following training are also rewarded and encouraged to share their experiences with peers. Conversely, employees who fail to attend scheduled training sessions on time or do not pass the associated assessments will be subject to disciplinary measures.

2. Integrity Management in the Procurement of Raw Materials and Components

Enterprises classify materials into three categories—A, B, and C—based on the level of risk they pose to product quality. For Category A suppliers, in addition to meeting statutory qualification requirements, regular on-site audits are conducted. For Category B suppliers, the enterprise first performs a risk assessment for the specific material and determines whether an on-site audit is necessary based on the supplier’s track record of material quality. For Category C suppliers, only their qualifications are typically reviewed. Following qualification and on-site assessments, suppliers whose materials meet the required standards shall have a dedicated quality file established. Purchased raw materials must undergo inspection in accordance with applicable regulations; any materials that fail to meet the specified standards shall be strictly prohibited from entering inventory or being used.

In the procurement of equipment and components, we conduct rigorous reviews of suppliers’ qualifications. When purchasing equipment and components, we prioritize standard parts wherever possible; for items requiring custom fabrication, we perform thorough performance validation to ensure they meet our company’s specifications. Prior to deployment, all equipment must undergo verification to confirm compliance with product‑process requirements.

3. Integrity Management in the Production Process

The company has established and progressively refined a comprehensive set of production management systems, work standards, job‑specific operating procedures, as well as various process specifications, administrative regulations, and standard operating procedures. It conducts centralized training sessions in workshops and provides thorough on‑the‑job skill development through pre‑shift and post‑shift briefings for all operators, ensuring that personnel are certified before taking up their duties. Furthermore, the company employs multiple inspection and assessment methods to strengthen employees’ quality awareness and enhance operational proficiency. Throughout the production process, managers at all levels rigorously fulfill their supervisory responsibilities, conducting timely inspections and promptly correcting any deviations to maintain stable production operations.

Prior to dispatch, verify raw materials, auxiliary materials, and packaging materials required for production; rigorously control the quality of in-process and finished products; strictly adhere to the “Three No’s” principle—“no production of nonconforming products, no acceptance of nonconforming products, and no release of nonconforming products”; establish quality control points at critical process steps; ensure that employees perform self‑inspections and mutual inspections; implement monitoring and verification procedures; enforce stringent batch record‑keeping protocols; and maintain consistency among material requisition, issuance, and reconciliation. Conduct material balance calculations for each production step to ensure that input quantities and output yields align with process specifications, thereby confirming the absence of potential quality risks and compliance with regulatory requirements.

Production records shall be reviewed, printed, and maintained by the relevant quality management department. Employees must complete production records promptly in accordance with requirements, ensuring legible handwriting, truthful content, and complete data; both the operator and the reviewer must sign to confirm, and the records shall be filed and managed by designated personnel.

4. Risk Monitoring and Emergency Management

Enterprise Quality Risk Management Process

 

The company has developed a comprehensive safety emergency response plan and established an emergency response leading group, chaired by the deputy general manager. The responsibilities of the emergency response leading group and all relevant departments have been clearly defined. Under the emergency response leading group, an Emergency Command Office has been set up, headed by the Director of the Production Coordination Department. Contact number: 0427-3219727.

5. Post-Sales Quality and Integrity Management

The company has established a comprehensive marketing and service management system, with the Sales Department assigning dedicated after-sales service personnel.

The company’s sales department assigns dedicated personnel to manage after-sales service records, ensuring timely, regular filing organized by detailed categories. Furthermore, the top-drive drilling system is supported by on-site service technicians who are stationed at the production site, guaranteeing that any issues arising during manufacturing are addressed promptly.

(II) Fulfillment of Corporate Social Responsibility for Quality

1. Production Safety Management

To establish a safety management system grounded in institutionalized management, standardized measures, and standardized operations, our company has set up a dedicated safety management body, established a Safety Production Committee, appointed full-time safety management personnel, and holds regular safety‑focused meetings.

The company has established a management system for the use of special equipment tailored to its specific characteristics, encompassing the following systems: training and education for operating personnel; maintenance and upkeep; routine inspections; identification and remediation of potential hazards; safety meetings; records management; periodic inspection reporting; energy conservation and emission reduction for special equipment; safety target management; and compliance with safety supervision and inspection.

The company has established safety production management objectives, cascaded them to all departments, and implemented rigorous performance evaluations. It has also formulated a hierarchical Safety Production Responsibility System, covering everyone from the general manager to frontline employees. By organizing Safety Production Month activities, the company has enhanced employees’ safety awareness and competencies.

2. Environmental Protection Management

The enterprise has consistently prioritized environmental protection and wastewater treatment, holding Class B qualifications issued by the Liaoning Provincial Department of Environmental Protection for industrial wastewater treatment and industrial solid waste treatment.

3. Product Quality Assurance Commitment

The content of the company’s product advertisements, instruction manuals, and labels is consistent with the actual product, truthful, and free from false or misleading claims.

Our company participated in the “Quality and Integrity Pledge Campaign for 100 Renowned Liaoning Brand‑Producing Enterprises,” organized by the Liaoning Provincial Bureau of Quality and Technical Supervision. We are committed to ensuring product and service quality, safeguarding consumers’ legitimate rights and interests, and delivering superior products and services to society.

4. Occupational Safety and Health Management

To strengthen occupational safety and health protection for employees, promote safe production, maintain orderly operations, and safeguard both employee well-being and company assets, the company has established a comprehensive occupational safety and health system; it issues personal protective equipment and has implemented personnel health management procedures, conducting regular medical examinations for all staff.

 

Part Four: Performance of Quality and Integrity Building

 

(1) Social Influence of Major Product Brands

The “Tianyi” trademark has been recognized as a Well-Known Trademark of Liaoning Province, and the “Tianyi” brand top drive drilling rigs are exported to more than ten countries and regions. In China’s top-drive drilling industry, our company ranks among the leaders in both technological prowess and corporate scale, and enjoys considerable recognition in the global oilfield equipment manufacturing sector. Over the years, we have actively expanded into international markets, competing on equal footing with major global players, and have earned consistent praise from our customers.

(II) Enterprise and Major Product Quality Awards

The company has been awarded numerous honors, including “Provincial Unit for Contract Compliance and Creditworthiness,” “Liaoning Province High-Tech Enterprise,” “Provincial Private Sector Star Enterprise,” “Liaoning Province Technology Innovation Demonstration Unit,” “Provincial Enterprise Technology Center,” and “Provincial Intellectual Property Pilot Unit.” Its top drive system has obtained ISO 9001 quality management system certification, API certification from the American Petroleum Institute, and CCS certification from the China Classification Society.

(3) Social Reputation of Main Products (Customer Satisfaction)

Our company has established a comprehensive customer satisfaction survey system. Each year, designated service personnel conduct surveys with all customers to gather their feedback and suggestions. In 2017, our customer satisfaction level met the target requirements.

(4) Market share of the main products (market penetration rate)

The company’s flagship product, the Tianyi‑brand top drive drilling system, was awarded the 2017 Liaoning Province Famous Brand designation, and it maintains a leading position in both market share and customer satisfaction within the industry.

 

Conclusion

 

Building quality and integrity is a shared responsibility of the entire society, requiring the concerted efforts of all. Only when every equipment‑manufacturing enterprise aligns its thinking, raises its awareness, conducts business with integrity, and assumes full accountability for product quality and safety can the industry’s overall reputation be safeguarded. Let us join hands to ensure the quality and safety of petroleum‑specific equipment; to accelerate the development of corporate integrity and continuously elevate its standards; and to foster a business environment characterized by honesty and trustworthiness, as well as a sound market‑economy order—thereby making our due contribution to the healthy, orderly, and rapid development of China’s equipment‑manufacturing sector.