Work Summery Meeting for the First Half of the Year Meeting Minute July 8th

  In the meeting, President recalled the construction and operation of Tonghe projects, and gave positive reply to achievements that gained in the period since the construction, especially after the company put into production. President said construction and development speed of Amsted-Tonghe is rare in the railway industry, and Amsted-Tonghe has demonstrated its irresistible vigor in just 9 months after putting into production.

  President also analyzed changes of market situation from the very beginning of the project till now, pointed out the competition situation in wheel market, and challenges facing Tonghe in aspects of markets and internal management. President expressed that wheel market was very broad, and Amsted-Tonghe should seize this opportunity. At the same time, he emphasized that, although equipped with certain scale, Amsted-Tonghe was still in the exploratory stage. Comparing with other companies, Amsted-Tonghe doesn’t hold enough advantages. There is still a long way to go for Amsted-Tonghe people.

  Work target of the next half of the year:
  ---In Oct., the company shall reach its designed capacity---20,000 wheels per month.
  ---The average scrap rate for the last 6 month of 2008 shall be controlled within 15%, and in Dec., the company pass the AAR qualification.
  ---Before the end of Sep. the trial production of Indian wheels shall be completed. In Oct. shape production capacity and open foreign market.
  ---With a view to actual situation, stipulate and perfect relevant raw material quota system and appraisal system to establish a complete management mechanism.

  The President required that focusing on above preceding objectives, the following work shall be addressed:
  1. Strengthen Quality Management
  Strengthen quality management awareness of the whole company, further perfect quality system to ensure the AAR quality certificate could be achieved as scheduled in Dec. and to make preparations for wheels entering into international market.
  Lose no time in the wheel research and development, build up the R &D team, and technology reservation to ensure the company could form production capacity in Oct.
  Reinforce process control, carry out various trainings, take all measures to realize scrap rate target.
  Carry out various inspection processes, take a strict guard on product quality to meet customers’ need and maintain the reputation and image of the company.

  2. Establish and Perfect Sales &Marketing Management System
  Perfect after-sales service system, establish the mechanism of a special person visiting customers, understand customers’ need and timely deal with customer complaint to exceed customers’ expectations.
  Establish and carry out appraisal and incentive policy for account receivables, shorten money-returning period, increase cash-return rate to ensure effective running of capital.
  Institute domestic &foreign market strategy, establish management system of direct sales, and agent. For international market, analyze market situation, determine breakthrough points, and develop agents to make preparations for wheel export.
  Establish customer network and develop non standard wheel clients.

  3. Establish and Perfect Material Management Procedure
  Perfect the review &approval procedure of material requisition and storehouse management procedure to control material circulation cost.
  Introduce supplier competitive mechanism, establish and perfect supplier management and appraisal system to ensure material quality, and successful &effective production.
  Strengthen inventory management, establish proper inventory to control the rate of capital employed.

  4. Establish and Perfect Financial Management System
  Stipulate relevant measures to control financial cost and to increase capital turnover rate. Presently, the line of loan is large, and financial cost is high. So we shall try to get money back in cash, try to defer payment or use bill of exchange to ensure the liquid capital. At the same time, cooperate with several banks to control the line of loan and to decrease financial cost.
  Smoothen data transmission channel, set up cost center, institute and perfect relevant cost management and appraisal methods. Monitor and control material cost, spare part cost and utility cost, etc. Be able to predict before incident, control in the process of incident, and analyze after incident.

  5. The Development and Reservation of Human Resources
  Broaden sources of HR and reduce talent drain. Develop various channels to attract and recruit talents from outer sources, select and promote talents within the company.  Keep talent through good payment terms, strong feelings toward the company, positive career prospects. Detail and fulfill the work of human resources.

  6. Strengthen Safety and Civilized production. Inspect and supervise the safety training, civilized work, and civilized production to ensure the safety of workers and company properties and to establish civilized firm image.

  7. Strengthen Construction of Firm Culture, and Enhance Firm Cohesiveness. Take various ways to simulate worker’s initiatives, and cultivate workers’ sense of company identity and belonging; through various group activities, foster workers’ team awareness and sense of group honor. Further improve workers’ production and life condition, strengthen workers’ centripetal force towards the company; establish communication platform for various levels, and various departments, build a harmonious and win-win staff relation.

  At the same time, the President expressed that the company was considering to make a proposal in the board meeting in proper time that the company purchases some land and build houses to provide house-purchasing benefits to core member of technology and management personnel. The company will also consider, in light of actual production situation, whether to celebrate one year anniversary or not.
In the end, President required all employee shall continue to promote the spirit of “ work together for the harmonious development”, further broaden thinking, and work harder to create another glory.