The Group Company Holds Its Ninth Shareholders’ Meeting

Election of the New Board of Directors and Supervisory Board

　　On the morning of June 30, the Group’s Ninth Shareholders’ Meeting was held in the Haohe Hall of the Nantong Grand Hotel, with a total of 30 duly registered shareholders in attendance. The meeting was chaired by Chairman Zhang Xiangyang.

　　Chairman Zhang Xiangyang delivered the 2012 Board of Directors’ Report to the Ninth Shareholders’ Meeting, stating that 2012 was an exceptionally remarkable year in the company’s development. Despite the adverse impacts of a complex economic environment, we effectively countered these challenges and achieved new record highs: contract value signed, operating revenue, and settled revenue all exceeded RMB 10 billion, thereby sustaining a steady and rapid growth trajectory. The Board of Directors remained firmly focused on the overarching theme of scientific development and the central task of accelerating the transformation of the development model, emphasizing the need to strike a balance between stability and progress. We conscientiously fulfilled the duties prescribed by the Company Law and the Articles of Association, rigorously implemented all resolutions passed at the Shareholders’ Meeting, and proactively carried out all work in alignment with the company’s strategic development goals and annual business plan. In doing so, we concentrated on driving the enterprise’s transformation and upgrading, enhancing innovation in project management, improving the economic and social benefits of engineering projects, and elevating the intellectual capital and overall quality of all employees, thus maintaining sustained, stable growth and high-quality development. All directors performed their duties with dedication and diligence, while all employees worked in unity and with relentless effort, yielding impressive results and setting new historical records across all key performance indicators.

　　Zhang Xiangyang reported to the conference on the company’s operating performance during the period:

　　 (1) Effectively address adverse factors and maintain steady growth in operating performance. We have steadfastly adhered to the strategy of focusing on “large markets, major clients, and major projects,” continuing to consolidate our leading position in the domestic market and increase our market share; actively expanding into overseas markets to enhance our market penetration; and steadily developing emerging markets to broaden our market coverage. Centered on key regions, we have continuously integrated resources, further optimized our market structure, strengthened our outreach capabilities, and driven the development of related industries and specialized fields within the Group, thereby ensuring that the company’s operating performance continues to maintain a steady growth trajectory. In 2012, the company was consecutively recognized as a National Advanced Enterprise in the Construction Industry, a National Outstanding Construction Enterprise, one of China’s Top 100 Most Competitive Construction Enterprises, one of China’s Top 500 Private Enterprises, one of China’s Top 60 Contractors, one of Jiangsu Province’s Top 100 Most Competitive Construction Enterprises, one of Jiangsu Province’s Advanced Enterprises in the Open Economy, among ENR’s Global Top 225 International Contractors, among the Global Top 225 Contractors, an Outstanding Private Enterprise of Nantong City, one of Nantong City’s Top 30 Most Competitive Construction Enterprises, and one of Nantong City’s Top Ten Enterprises for Foreign Economic Cooperation.

　　 (2) Accelerate structural adjustment and enhance the quality and efficiency of enterprise development. The total value of construction contracts for mechanical and electrical installation, fire protection, interior decoration, steel structures, foundation works, intelligent systems, and municipal engineering has exceeded RMB 1 billion; meanwhile, overseas markets continue to demonstrate strong growth momentum. Effective integration of corporate resources has led to a rational division of labor and close collaboration among civil engineering and specialized subcontracting firms, yielding significant results. Vigorous implementation of project management strategies focusing on technical quality, safety, cost-effectiveness, and financial control has further expanded the scale of general contracting operations.

　　 (3) Meticulous organization and thorough implementation ensured the successful completion of the acceptance inspection for the Class-A qualification. Following on-site inspections by the Provincial Department of Housing and Urban–Rural Development of the company’s comprehensive documentation for its Special-Class Qualification and its informationization efforts, as well as a subsequent review by the Ministry of Housing and Urban–Rural Development of the People’s Republic of China, the company was once again approved by the Ministry on March 28, 2012, to hold the Special-Class General Contracting Qualification for Building Engineering Construction, thereby laying a solid foundation for the enterprise’s long-term development.

　　 (4) Taking quality excellence as the driving force, we have once again achieved remarkable results in delivering high-quality, premium projects. In 2012, the company secured two provincial-level high-quality projects, eight municipal-level high-quality projects, and 17 high-quality structural projects at or above the municipal level. It also participated in the construction of two provincial-level high-quality projects and one provincial-level specialized high-quality project, and was awarded 17 provincial-level civilized construction sites and 25 municipal-level civilized construction sites.

　　 (5) Adhere to the strategy of revitalizing the enterprise through science and technology, and strengthen the core supporting capabilities for enterprise development. We will continue to vigorously implement the strategy of invigorating the enterprise through science and technology, accelerate the cultivation and establishment of new competitive advantages in product quality excellence, construction technology innovation, and information management, and actively promote the application of new construction technologies, processes, and materials. We will comprehensively advance the overall integration of scientific and technological development with informatization by refining operational mechanisms, prioritizing team building, increasing resource allocation, and strengthening exchange and training, thereby achieving remarkable results. Throughout the year, we were recognized with four provincial-level demonstration projects for the application of new technologies, three provincial-level outstanding QC achievements, and 25 municipal-level outstanding QC achievements; in addition, we obtained two national utility model patents.

　　 (6) Strengthen the implementation of the work safety responsibility system, ensuring that the work safety situation remains under control. We have strengthened the implementation of accountability, rigorously conducted performance assessments under the responsibility system and pursued accountability for accidents, enhanced team building, consolidated basic management for work safety, increased investment in safety, ensured safe working conditions at construction sites, comprehensively advanced all work related to work safety, effectively prevented and resolutely curbed fatal accidents, and achieved zero major or above-level safety incidents throughout the year. The incidence rate of minor injury accidents was 0.24 per thousand, indicating that the enterprise’s work-safety situation remains generally stable and under control.

　　 (7) Strengthen talent development and optimize the human resource structure and overall quality. Throughout the year, 90 college graduates were recruited; internally, the Group organized various training programs for a total of 730 person-times, and more than 400 employees participated in external continuing education and training programs; in 2012, 25 individuals obtained Level-1 Construction Engineer certification, and 24 obtained Level-2 Construction Engineer certification; additionally, one researcher-level senior engineer, 10 senior-title professionals, and 23 mid-level-title professionals were certified.

　　Zhang Xiangyang also reported on the financial and investment performance during the period, as well as the Board’s day-to-day operations and the implementation of resolutions passed at the Shareholders’ Meeting.

　　In his report, Zhang Xiangyang outlined the 2013 work summary and objectives: to thoroughly study and comprehensively implement the spirit of the 18th National Congress of the Communist Party of China; to hold high the great banner of socialism with Chinese characteristics; to take Deng Xiaoping Theory, the Important Thought of Three Represents, and the Scientific Outlook on Development as our guiding principles; to focus tightly on the central theme and main line of work; to center on enhancing the quality and efficiency of enterprise economic growth; to assess the situation accurately and act accordingly; to unite as one and pool our strengths; to seek progress while maintaining stability; to pioneer and innovate; and to strive to achieve the overarching goals of steadily expanding scale, promoting transformation and upgrading, strengthening management, producing high-quality products, improving profitability, and ensuring stability and harmony.

　　Zhang Xiangyang outlined six tasks for 2013:

　　 (1) Steadily expand the scale of operations. Adjust our business strategy, promote operational innovation, closely align with national macroeconomic investment priorities, leverage our core strengths, and continue to consolidate, strengthen, and optimize our traditional core markets. Guided by the principle of “expanding regional markets to maintain scale and refining existing projects to safeguard profitability,” we will concentrate our resources and capabilities on integrating and optimizing regional markets, thereby reducing management overhead and costs, enhancing managerial efficiency, and creating greater growth potential for these markets. We will steadfastly enhance and fortify our traditional overseas markets, conduct thorough research into our overseas business deployment, and ensure the sustained development of our international operations. To this end, we will effectively strengthen the commercial management and project execution control capabilities of our overseas subsidiaries, improve our ability to fulfill contractual obligations abroad, and boost our overseas profitability. We will further increase support for our overseas markets, ensuring that overseas operations are given priority in terms of human, material, and financial resources. In addition, we will enhance the political status, compensation, and benefits of our overseas personnel, establish clear career advancement pathways for overseas talent, and actively encourage our top performers to take on overseas assignments.

　　 (2) Accelerate the pace of transformation and upgrading. Firmly seize the critical strategic period of opportunity for development, respect the laws governing development, innovate our development philosophy, resolve persistent development challenges, and accelerate the transformation of the economic development model. Pursue development through transformation and promote transformation through development, striving to achieve the sustained and healthy growth of the enterprise. While maintaining our core business strengths, we will innovate our business models, leverage capital as a strategic tool, and expand opportunities for market growth.

　　Expand into the large-scale construction sector. Based on the company’s core business, extend the value chain upstream and downstream to achieve diversified operations within a unified value chain. Strengthen investment analysis and research, increase investment, enhance economic returns, and improve the profit structure.

　　 (3) Continuously enhance management standards. Further optimize and standardize the enterprise’s various management systems, standards, policies, and processes, and refine the group’s governance and control approach. Focus on establishing an operations and management mechanism that aligns with the company’s development strategy, increase the intensity and weighting of performance assessments based on economic operating quality indicators, rigorously conduct oversight and inspection of project management, strengthen the foundational infrastructure for project management, ensure stable and orderly construction and production activities, achieve comprehensive control over safety and quality, and enhance timely monitoring and reporting of progress against all key performance targets. Accurately gauge the pulse of economic activity, promptly implement effective measures, and drive a comprehensive upgrade in the enterprise’s management capabilities.

　　 (4) Enhancing the capacity for developing high-quality products. We must carry forward the national excellence ethos of “pursuing excellence and creating timeless classics,” regard quality and branding as key corporate business strategies, intensify efforts to win prestigious engineering awards, and earnestly treat the creation of high-quality projects as a critical task that is thoroughly planned and rigorously executed. By implementing a scientific quality management system and stringent management standards, we will deliver more outstanding projects. This year, our excellence targets have been broken down and assigned to each subsidiary, requiring all units to clearly define their quality management objectives, further decompose and assign responsibilities, and adopt effective measures to ensure that these targets are met. Projects must strictly enforce accountability for construction quality, rigorously control quality throughout the entire process and ensure smooth handovers between work stages, foster coordinated collaboration across the board, and pool collective efforts to drive excellence, thereby enhancing our capacity to deliver premium projects and elevating the overall value and prestige of our engineering undertakings. We will strive to achieve new breakthroughs in our pursuit of excellence.

　　 (5) Unite hearts and minds, pool strengths, and advance in harmony. We will continue to put people first and strive to build a harmonious corporate culture. Looking ahead, our decision-making will focus on what best supports the enterprise’s survival and development, fosters employees’ growth and well-being, and contributes to social harmony and progress. The company will adopt a more open and inclusive approach to attract top talent, create platforms that enable employees to take initiative and deliver results, and provide opportunities for their personal and professional growth—thus opening pathways for ambitious young professionals to thrive. We will keep our focus squarely on the core of the company’s production and operations, with the goal of becoming a nationally leading construction enterprise, uniting our efforts and advancing in harmony. At the same time, we will carefully study and properly address any new conflicts or challenges that arise during the course of the company’s reform and development. By mobilizing all stakeholders, coordinating diverse relationships, and harnessing courage and wisdom to generate positive energy, while demonstrating a pragmatic, hands-on work ethic characterized by steady, tangible progress, we will jointly forge a bright future for the enterprise!

　　By a show of hands, the General Meeting reviewed and approved the “2012 Board of Directors Report,” the “2012 Supervisory Board Report,” the “Report on the Proposed Profit Distribution for 2012,” the “2013 Equity Valuation Proposal,” the “2013 Business Plan,” the “Amendments to the Articles of Association,” the “Election Procedures for the Fourth Term of Directors and Shareholder Supervisors of Nantong Construction Engineering Group Co., Ltd.,” and the “Draft Implementation Measures for Housing Subsidies for ‘Veteran Employees’ of Nantong Construction Engineering Group Co., Ltd.”

　　The General Meeting elected, by secret ballot, Zhang Xiangyang, Li Weidong, Chen Jianqing, Xing Guangzhong, Zhang Zhongda, Chen Guoli, Zhong Yiming, Huang Jing, Shao Jinman, and others as directors of the Group’s Ninth Board of Directors. It also elected Shan Rong, Guo Qiyun, and Cai Shijie as shareholder supervisors of the Group’s Fourth Board of Directors.