china national machinery industry corporation csr report 2012

China National Machinery Industry Corporation

Social Responsibility Report So

cial Resp

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Notes on the Report

Period Scope of the ReportThis report is the third social responsibility report released by the China National Machinery Industry Corporation (SINOMACH), covering the period from January 1, 2012 to December 31, 2012. Some contents surpass the above scope.

Organizational Scope of the ReportThis report covers the headquarters and affiliated enterprises of the SINOMACH (see “About Us” for organizational structure).

Data Explanation of the ReportAll the data in this report come from the official documents and internal statistics of the SINOMACH, and have been audited by relevant departments.

Compilation Basis of the ReportThis report has been prepared according to the “Guiding Opinions on Performance of Social Responsibilities by State-Owned Enterprises directly under the Central Government” issued by the State-Owned Assets Supervision and Administration Commission (SASAC) of the State Council, the “Sustainability Reporting Guidelines, Version 3.1” released by the Global Reporting Initiative (GRI), and the “ISO 26000:2010 -- Guidance on Social Responsibility” released by the International Organization for Standardization (ISO).

Derivative ReadingTo access to the SINOMACH Social Responsibility Report 2012 (online edition), please Log on to its website: http://www.sinomach.com.cn

Orientation of Future ImprovementTo improve the SINOMACH’s social responsibility management system and upgrade the SINOMACH’s social responsibility management performance.

32

32

46

Scientific operation, constant creation and value-sharing

Developing whole industry chain to boost real economy

Improving management to strengthen development foundation

22

22

27

Strengthening social responsibility concept

Enhancing social responsibility management

Promoting stakeholder engagement

02

04

06

08

16

18

Table of Contents

Message from the Chairman

Key Figures

Responsibility Milestones in 2012

About Us

Corporate values

Corporate strategies

88

90

93

94

95

Outlook

Comparative Table with the Global Reporting Initiative (GRI) G3.1 Standards

Comparative Table with the UN Global Compact’s Ten Principles

Third Party Evaluation

Feedback Form

Responsibility-Focused SINOMACH --Enhancing Responsibility Management

Value-Focused SINOMACH -- Developing Real Economy

52

54

59

64

66

68

70

72

76

80

84

85

Innovation-Focused SINOMACH -- Driving S&T Progress

Strengthening innovation system construction

Boosting independent innovation capability

Leading industrial S&T progress

Green-Focused SINOMACH -- Practicing environmental protection and low-carbon concept

Happiness-Focused SINOMACH -- Building Corporate Citizenship

Perfecting green management system

Implementing green design concept

Promoting green production practices

Boosting green application promotion

Practicing requirements of green office

Fostering employee development

Strengthening safety production

Conducting partner cooperation

Committing to community participation

中国机械工业集团有限公司　2012社会责任报告2

Message from the Chairman

The year of 2012 was the key to the development of the “12th Five-

Year Plan.” Facing with the severe and complicated business situations

both at home and abroad, the SINOMACH has always taken the

scientific development as the theme and the transformation of economic

development mode as the mainline, actively promoted the quality-

oriented growth, and set about to build the SINOMACH with five

objectives, achieving steady and healthy development in various aspects.

Adhering to scientific development to create a value-focused

SINOMACH. The SINOMACH has always insisted on the Scientific

Outlook on Development, and actively promoted the transformation of

management mode. Based on the two major sectors of the equipment

manufacturing industry and the modern manufacturing service industry,

the Group Corporation has strived to become strong and achieve

excellence in the three main businesses of the R&D and manufacturing

of machinery equipment, the project contracting, and the trade and

services, focused on the whole industry chain development, and

endeavored for quality and efficiency. In 2012, the SINOMACH realized

213.9 billion yuan of operating revenue, 8.6 billion yuan of total profits,

ranking 367th among the Fortune Global 500.

Driving scientific and technological innovation to build an innovation-

focused SINOMACH. The SINOMACH has firmly established the

concept of innovation, strengthened the innovation system construction,

attached importance to scientific and technological talent cultivation,

enhanced intellectual property rights protection, constantly improved

independent innovation capability, promoted the industrial technological

upgrade, participated in the formulation of industrial standards, and

intensified the efforts of leading scientific and technological progress.

Practicing concepts of environment protection and low-carbon to

develop a green-focused SINOMACH. Strictly abiding by national rules

and regulations as well as requirements on the development of green

and environmental protection industry, the SINOMACH has completed

green management system, implemented green design concept,

promoted green production, built green fruit-sharing mechanism,

practiced requirements of green office, and strived to build a large-scale

state-owned enterprise with “resource-saving and environmentally-

friendly” characteristics.

Strengthening responsibility management to forge a responsibility-

focused SINOMACH. Adhering to the corporate core values of “Work

together, win together,” the SINOMACH has constantly completed the

corporate governance, improved the social responsibility management

system, established stakeholder engagement mechanism, enhanced the

enterprise’s internal and external communications, and strived to build

the responsibility image of the Group Corporation.

Being corporate citizen to foster a happiness-focused SINOMACH.

The SINOMACH has conscientiously practiced the concept of “Put

people first and safe development,” safeguarded the rights and interests

of employees, promoted the growth of employees, enhanced safety

production management, actively carried out partnering cooperation,

and participated in jointly community construction, so as to realize the

harmonious development among enterprise, employees and society.

Based on the 2010 Report, SINOMACH released its second social

responsibility report in 2011, further disclosing the conduct and

performance of the Group Corporation in terms of social responsibility

fulfillment. In 2012, the Group carried out special improvement

activities on social responsibility management, and the gradual process

from theoretical phrase to practical phrase showed its determination and

confidence in strengthening social responsibility management. In the

future, the SINOMAC will, in accordance with the requirements of the

SASAC of the State Council, fully fulfill social responsibility, strengthen

responsibility management improvement, enhance communications and

exchanges with stakeholders, and make great efforts to achieve the goal

of becoming a leading state-owned enterprise directly under the Central

Government.

China National Machinery Industry Corporation　2012 Social Responsibility Report 3


1,313

1,665

2010 2011 2012

1,522

1,910

2,139

1,952

120.0

2010 2012

115.9

20122010 2011

66.7 78.0

164.1

218.4

86.3

183.2235.0

295.7352.6

Operating revenue

Equities attributable to equity holders of the parent companyTotal pre-tax profi ts

Total profi ts

Total assetsRatio of value preservation and increment of state-owned assets

0.0080 0.0077

0.0072

Comprehensive energy consumption for 10,000 yuan of operating revenue

0.08290.0901

0.0783

Comprehensive energy consumption for 10,000 yuan of output value

SO2 emission

1,257.9

981.21,344.2

COD emission

459.8 340.9554.9

Key Figures

Indicator unit : 100 million yuan Indicator unit : %

Indicator unit : 100 million yuan

Indicator unit : TCE/10,000 yuan

Indicator unit : ton

Indicator unit : TCE/10,000 yuan

Indicator unit : ton

2010 2011 2012 2010 2011 2012

2012 20122010 20102011 2011


1,922.1

936.4

2010 2012

20,892.2

15,223.0

2010 2011 2012

30,456.0

4350 47

20102010 20112011 20122012

00.0236

0.0118

Total number of employees

Total safety accidents

Total donations

Accident death rate per thousand employees

Labor contract signing rate100%

Safety production input

79,109

83,940

93,660

Indicator unit : case

Indicator unit : (10,000 yuan)

Indicator unit : %

Indicator unit : person

Indicator unit : (10,000 yuan)

2010 2011 2012


Responsibility Milestones in 2012

Improving social responsibility management system levelReviewed 379 items of qualifications in various fields, including 30 newly-added enterprise qualifications engaged in engineering design, consulting, environmental assessment, and environmental management, and so on.

Strengthening social responsibility capability construction

Formally joined the United Nations Global Compact, committing to abiding by the Ten Principles of the UN Global Compact.

Promoting economic development and livelihood improvement of oversea areas

Carried out a batch of influential engineering projects in Southeast Asia, Central Asia, Africa, South America, and East Europe, and so on, including power stations, power transmission and transformation stations, traffic projects and agricultural projects. The amount of the newly signed contracts reached 49.4 billion U.S. dollars.

Boosting capital operation

A total of 8 companies of the Group have been listed, taking 55 percent of the Group’s net assets.


Enhancing independent innovation capability

The number of authorized patents reached 879 items, and that of prizes at provincial/ministerial level or above amounted to 308 items.

Enhancing independent innovation capability Leading industrial scientifi c and technological progress

The Group contributed funds to 25 affi liated enterprises to participate in the formulation or revision of 306 national and industrial standards. Among these standards, the proportion of standards mainly formulated or revised by the affi liated enterprises of the Group and the national standards formulated or revised by the affi liated enterprises of the Group both reached more than 70 percent.

Practicing the concept of environmentally-friendly design

The amount of the SO2 emissions reached 981.2242 tons, down 22 percent from a year earlier. And the reduction amount of COD emissions was 340.8658 tons, which was lower than that of the same period last year.

Sharing fruits with society

The total donations for public welfare activities reached 9.3642 million yuan.


About Us

Corporate profile

Established in January 1997, the China National Machinery Industry Corporation (SINOMACH) is a large state-owned enterprise (SOE) approved by the State Council and directly administered by the State-Owned Assets Supervision and Administration Commission (SASAC) of the State Council. It is one of the Fortune Global 500 companies.

The SINOMACH has resolutely implemented the decisions and deployment of the SASAC of the State Council. Adhering to the core values of “Work together, win together,” and centering on the two major sectors of equipment manufacturing industry and modern manufacturing service industry, the SINOMACH has made special efforts to development the three businesses of the R&D and manufacturing of machinery equipment, the project contracting, and the trade and services, taken the development path of quality-oriented growth, and gradually explored, clarified and promoted the building of the SINOMACH with five core connotations of value, innovation, “green,” responsibility and happiness. By the end of 2012, the Group has owned nearly 50 subsidiaries, eight listed companies, and more than 140 overseas service institutions, and the number of employees reached nearly 100,000 people. The SINOMACH has kept a high-speed growth of over 30 percent for many successive years. In 2012, the operating revenue of the SINOMACH amounted to 213.9 billion yuan, ranking the 367th among Fortune Global 500 companies, which moved up by 68 places in the ranking. For many successive years, the SINOMACH has been ranking in first place on the list of China’s Top 100 Enterprises in machinery industry and assessed by the SASAC as Grade “A” in performance among central SOEs.

In 2012, the operating revenue of the SINOMACH amounted to 213.9 billion yuan

213.9

ranking the 367th among Fortune Global 500 companies

367

moved up by 68 places in the ranking

68


Corporate governance

As a solely State-owned company registered in accordance with the “Company Law of the People's Republic of China,” the SINOMACH has no board of shareholders and the State-Owned Assets Supervision and Administration Commission (SASAC) of the State Council performs the contributor’s functions according to law upon the authorization of the State Council.

The SINOMACH has a board of directors, which is the company’s decision-making body and decides on all the major matters of the company within the scope of its functions and powers as stipulated in the Articles of Association. The board of directors is responsible to the company and the contributor. The board of directors shall exercise its decision-making power by holding the board of directors meetings and adopting resolutions thereof.

The board of directors of the SINOMACH has set up a prudent and scientific authorization mechanism that takes into consideration both balance and efficiency. On the precondition of ensuring compliance with laws and regulations, it has granted appropriate authorization to its standing committee, chairman and general manager. The Articles of Association of the SINOMACH and the governance documents of the board of directors including the Working Rules of the Board of Directors have specifically stipulated the division of functions and powers of the board of directors and the managers and specified their rights and obligations.

Taking advantage of the opportunity for experimentation with the board of directors, the SINOMACH will constantly optimize the setup of the board, actively complete its institutional construction, strengthen its day-to-day operation and management, enhance risk management, make the decisions of the board more scientifically rational and continuously upgrade the governance effect of the board.

Board of DirectorsRen Hongbin -- Chairman and Deputy Secretary of the Party CommitteeXu Niansha -- Vice Chairman and Secretary of the Party CommitteeXu Jian -- Director and General ManagerChen Zhi -- Vice ChairmanHan Xizheng -- Outside DirectorLiu Gaozhuo -- Outside DirectorAn Dewu -- Outside DirectorLian Weizeng -- Outside DirectorZhang Lailiang -- Outside DirectorWu Xiaogen -- Outside DirectorWei Feng -- Employee Director

Management TeamRen Hongbin – Chairman and Deputy Secretary of the Party CommitteeXu Niansha – Vice Chairman and Secretary of the Party CommitteeXu Jian – Director and General ManagerChen Zhi – Vice ChairmanLuo Jiamang -- Chief AccountantXie Biao – Deputy General ManagerLiu Dagong -- Deputy General ManagerDing Hongxiang -- Deputy General ManagerWan Jun -- Deputy Secretary of the Party Committee and Secretary of the Discipline Inspection CommissionLiu Jingzhen -- Deputy General ManagerLiu Bing -- Secretary of the Board of DirectorsWang Shuqing -- Assistant to General ManagerZhao Bing -- Assistant to General ManagerWang Qiang -- Chief Legal AdviserSu Weike -- Assistant to General ManagerLiu Zuqing -- Assistant to General Manager


Deputy General Manager

Secretary of the Board of Directors

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Chief Accountant

Deputy Secretary of the Party Committee

Secretary of the Party Comiittee

Organizational structure

State-Owned Assets Supervision and Administration Commission (SASAC) of

the State Council

Board of Supervisors

General Manager

Deputy Secretary of the Party Committee

Secretary of the Discipline Inspection Commission

Wholly-Owned and Holding Enterprises

Board of Directors


No. Name of organization Chinese aAbbreviation English Abbreviation

1 China Machinery Engineering Corporation ZSJT CMEC

2 China CAMC Engineering Co., Ltd. ZGGJ CAMCE

3 China Foma (Group) Co., Ltd. ZGFM CFMC

4 China Ocean Aviation Group Inc. ZGHH COAGI

5 China Geo-Equipment Corporation ZZZGS CGE

6 China Machinery Industry Construction Group Inc. ZJJS SINOCONST

7 China National Machine Tool Corp. JCZGS CNMTC

8 China National Heavy Machinery Corporation ZGZJ CHMC

9 China National Electric Engineering Co., Ltd. ZGDG CNEEC

10 China National General Machinery Engineering Co., Ltd. ZTGS GME

11 China National Automation Control System Corp. ZGZK CACS

12 China National Complete Engineering Co., Ltd. ZGCT CMCEC

13 China SINOMACH Heavy Industry Corporation GJZG SINOMACH HEAVY INDUSTRY

14 SINOMACH Finance Co., Ltd. GJCW SINOMF

15 SINOMACH Automobile Co., Ltd. GJQC SINOMACH Auto

16 China National Automotive Industry Import & Export Corp. ZQJCK CAIEC

17 China National Automotive Industry International Corporation ZQGJ wCNAICO

18 SINOMACH Capital Management Corporation GJZC SINOMACH Capital

19 Chinese Academy of Agricultural Mechanization Sciences ZGNJY CAAMS

20 China IPPR International Engineering Corporation ZGZY IPPR

21 Beijing Materials Handling Research Institute BQY BMHRI

22 YTO Group Corporation ZGYT YTO

Wholly-owned and holding enterprisesBy the end of 2012, the

SINOMACH has owned 43 wholly-owned and holding subsidiaries.


23 SUMEC Group Corporation SMDJT SUMEC

24 China Perfect Machinery Industry Corp., Ltd. ZGPF CPMIC

25 China Abrasives Import & Export Corporation ZMGS CAEC

26 China United Engineering Corporation ZGLH CUC

27 China Automobi le Industry Engineering Corporation ZQGC AE

28 SIPPR Engineering Group Co., Ltd. ZJLY SIPPR

29 Changchun Research Institute for Mechanical Sciences Co., Ltd. CCJXY CRITM

30 Shenyang Academy of Instrumentation Science Co., Ltd. SYYBY SAIS

31 Hefei General Machinery Research Institute HFTYY HGMRI

32 Lanpec Technologies Limited LKGX LANPEC

33 Luoyang Bearing Science and Technology Co., Ltd. ZYKJ ZYS

34 Zhengzhou Research Institute for Abrasives & Grinding SMS ZRIAG

35 Tianjin Design & Research Institute of Electric Drive Co., Ltd. TCS TRIED

36 China National Electric Apparatus Research Institute Co., Ltd. ZGDQY CEI

37 Guangzhou Mechanical Engineering Research Institute Co., Ltd. GZJXY GMERI

38 Jinan Foundry and Metalforming Machinery Research Institute Co., Ltd. JNZDS JFMI

39 Chongqing Materials Research Institute Co., Ltd. CCY CIMRI

40 Chengdu Tool Research Institute Co., Ltd. GJS CTRI

41 China National Heavy Machinery Research Institute Co., Ltd. ZGZXY CNHMRI

42 Suzhou Electromachining Machine Tool Research Institute Co., Ltd. SZDJG SEMTI

43 Guilin Electrical Equipment Scientific Research Institute Co., Ltd. GLDKY GLESI

No. Name of organization Chinese aAbbreviation English Abbreviation


The Group currently has 8 listed companies.

CAMCE Stock Code: SZ002051

ZYS Stock Code: SZ002046

SINOMACH AUTO Stock Code: SH600335

CHANGLIN Stock Code: SH600710

LINHAI POWER Stock Code: SH600099

LANPEC Stock Code: SH601798

CMEC Stock Code: HK01829

FIRST TRACTOR Stock Code: HK00038


Social recognitionIn 2012, the SINOMACH, as always, has achieved steady development and enjoyed wide recognition from all walks of life.

Major rankings of the SINOMACH in 2012

Social responsibility honors and prizes

Tips: ENRThe Engineering News-Record (widely known as ENR) is the most authoritative academic journal in global engineering construction fi eld. It is owned by the McGraw-Hill Companies and provides the news, analysis, commentary, and data that construction industry professionals need to do their jobs more effectively.

The SINOMACH ranked 367 th among the Fortune Global 500 companies in 2012,

moving up by 68 places in the ranking from a year earlier.

The SINOMACH ranked the 24th among the ENR’s Top 225 International Contractors,

moving up by two places in the ranking from a year earlier.

The SINOMACH ranked the 77th among the ENR’s Top 200 International Design Firms

The SINOMACH ranked the 52nd among China’s Top 500 Enterprises,

moving up by three places in the ranking from a year earlier.

The SINOMACH ranked the 24th among China’s Top 500 Service Enterprises.

The SINOMACH ranked the 13th among China's Top 500 Foreign Trade Enterprises.

The SINOMACH achieved Grade “A” in performance among central SOEs in four successive years.

The SINOMACH ranked again in fi rst place among China’s Top 100 Enterprises in machinery industry.

Honors and prizes Awarded byThe Role Model in Performance of Corporate Social Responsibility among China’s

Equipment Manufacturing Enterprises in 2012“Machinery & Electronics Business”

The General Prize for Corporate Innovation among Independent Innovations of China’s

Enterprises in the Top 100 Series Evaluations in 2012China Enterprise Evaluation Association

The Social Responsibility Prize for China’s International Contractor China International Contractors Association

Scientifi c and Technological Progress Prize for Environmentally Conscious

ManufacturingChinese Mechanical Engineering Society


Corporate values

Core values Work together, win together

The core values of “Work together, win together” are the collective value orientation that we shared in the practices of cultural integration, refl ecting the strong group consciousness and steadfast ideal pursuit of all the SINOMACH people.

Corporate missionGuiding the development orientation of the machinery industry and promoting the progress of the human society

“Guiding the development orientation of the machinery industry and promoting the progress of the human society” is our indispensable responsibility. With high sense of political responsibility and social responsibility, the SINOMACH spares no efforts to explore the development path of China’s machinery industry, tries the best to be the leader of the industry by carrying out scientifi c and technological innovations, management innovations and other works, strives to meet the needs of employees, customers, shareholders and the society, and puts into practice the important responsibilities entrusted by history to it.

“Guiding the development orientation of the machinery industry and promoting the progress of the human society” is our forward-looking vision. Standing at the forefront of economic development and strategic height of international competition, the SINOMACH aims at the most excellent international enterprises and constantly makes improvements to continuously win trust and recognition from customers in its fi elds of activity.

“Guiding the development orientation of the machinery industry and promoting the progress of the human society” is our steadfast confi dence. Based on the two major sectors of equipment manufacturing industry and modern manufacturing service industry, the SINOMACH focuses on the long-term development and works in a down-to-earth way to press forward various works and tasks.

Cooperation: Pool centripetal force;

Enhance executive force;

Increase competitiveness.

Innovation: Rely on key points of

development;

Expand development

orientation;

Lead the development.

Win-win results: Pursue complementation and

win-win results;

Accomplish benefi t sharing;

Maintain sound development.

Partnership: Take responsibility;

Build up trust;

Common development.


Corporate vision Building a value-focused, innovation-focused, green-focused, responsibility-focused, and happiness-focused SINOMACH, and being the world’s leading integrated enterprise in equipment industry

With deep insight into the development trend of the times, the SINOMACH established the objectives of building a value-focused, innovation-focused, green-focused, responsibility-focused and happiness-focused world’s leading integrated enterprise in equipment industry that specialized in two major sectors of the equipment manufacturing industry and the modern manufacturing service industry and three main businesses of the R&D and manufacturing of machinery equipment, the project contracting, and the trade and services.

Corporate spirit Integrity, Inclusiveness, Excellence

Integrity: Honesty and keeping faith is our lifeline.Abiding by laws and regulations, rules and institutions, and professional ethics, keeping business secrets, safeguarding corporate interests, using concrete actions to win respect and trust from customers and colleagues; being loyal to the enterprise and the cause, cherishing posts and devoting wholeheartedly to work, willing to dedicate, and being ready to shoulder responsibilities in face of problems and challenges.

Inclusiveness: Openness and inclusiveness is our virtue. The openness and inclusiveness is the intrinsic requirement of the “harmony” culture, and the precondition for innovation and progress. For individuals, they should be far-sighted, be with broaden horizon, and act as calm and humility; for the enterprise, it should respect diversity, adopt inclusive approaches, and embrace everything that is useful.

Excellence: Pursuing excellence is our long-lasting motivation.Understanding and recognizing the overall development strategy of the Group; setting more challenging objectives in accordance with the development orientation of the Group, aiming at building world-class enterprise; keeping confi dence and daring to transcend yourself, breaking the limitations of old thinking and continuously seeking new development and breakthrough.


Corporate strategies

Strategic map of SINOMACH

Strategy for brand upgradeWe will scientifi cally complete the brand management organization, improve brand management system, build up the brand management platform, and gradually shape the brand framework featuring the “Group’s brand -- business brands -- subsidiaries’ brands – products’ brands,” so as to rationalize the allocation of brand resources and maximize the accumulative brand assets.

To rank fi rst among China’s Top 100 machinery industry

enterprises constantly, step into the mid-ranking tier among

world’s Top 500 companies by 2020, and achieve a higher

than average industry level of return on assets.

Strategic goal

Happiness-focused SINOMACHWe will put people fi rst, create harmonious culture atmosphere, promote corporate democratic management, protect various rights and interests, and secure a decent job and a happy life for each employee.

Strategy breakdown

Strategic path

Guiding the development orientation of the machinery industry and promoting the

progress of the human society

Being the world’s leading integrated enterprise in

equipment industry

Corporate mission

Corporate vision

Strategy for capital operation

We will blaze a new leap-forward development path by positive interaction

between the industry and the capital.

Strategy for sustainable innovation

Adhering to the innovation-driven development path, we will promote

scientifi c and technological progress, enhance management innovation, and

build an innovation-focused SINOMACH.

Strategy for strengthening enterprise through people

With the objective of fostering and bringing up numerous talent contingents with optimized

structure, rational layout and excellent qualities, we will establish the comparative advantages in talent competition and lay the talent foundation for the

Group’s long-term stable development.

Strategy for transformation and upgradeWe will push forward the transformation of growth modes from a primary dependence on element input and scale expansion to a primary dependence on technological progress, improvement of workers’ abilities and innovation in operation modes and management.

Value-focused SINOMACH

We will adhere to the development concept of “quality-oriented growth,”

and constantly enhance the capabilities of value creation and sustainable

development.

Innovation-focused SINOMACH

We will develop innovation culture, complete scientifi c and technological

innovation system, enhance managerial innovation, and perfect the incentive and cultivation modes for innovation talents.

Green-focused SINOMACHWe will strengthen the green awareness, exert the

Group’s industrial advantages, increase the input into technological innovation and resources, and improve

the Group’s green competitiveness.

Responsibility-focused SINOMACHWe will boost the consciousness of “corporate citizen of the world,” actively fulfi ll corporate social responsibility, promote the unifi cation among economic performance, environmental performance and social performance, and realize harmonious development.

China National Machinery Industry Corporation　2012 Social Responsibility Report 19China National Machinery Industry Corporation　2012 Social Responsibility Report 19

Taking the equipment manufacturing industry and the modern manufacturing service industry as the core of the Group’s business development, and adhering to the combination of extensive growth and connotative development, the SINOMACH will constantly enhance the mutual support and coordinated development between the equipment manufacturing industry and the modern manufacturing service industry, so as to form international competitive advantages in various key fi elds of machinery industry in terms of manufacturing and services, and become a leading enterprise in its industry.


Enhancing social responsibility management is the requirement of becoming strong, achieving excellence and cultivating world-class central SOEs, as well as the intrinsic requirement for enterprises to fulfill corporate strategies and practice corporate values. The SINOMACH attached great importance to social responsibility management, actively implemented the planning requirements of the Group’s “Social Responsibility Development Strategy,” perfect responsibility governance, and enhance responsibility communications, so as to achieve sustainable development of the Group.

Responsibility-Focused SINOMACH-- Enhancing Responsibility Management

In 2012, the Group totally reviewed 379 items of qualifi cations in various fi elds

379

including 30 newly-added qualifi cations engaged in engineering design, consulting, and environmental assessment, and so on

30


1. Strengthening social responsibility conceptAdhering to the concept of “Put people first,” persisting in the core values of “Work together, win

together,” and sticking to the corporate mission of “Guiding the development of the machinery industry

and promoting the progress of the human society,” the SINOMACH fully implemented the Scientific

Outlook on Development, actively fulfilled responsibilities, rewarded the society, and strived to promote

the long-term and maximized interests of employees, enterprises, the country and society through

ceaseless pursuit.

For employees: Development is for employees, carried out by employees and shared by employees

For customers: Constant innovation and value creation

For environment: green technology, green product, green design, and green engineering

For society: Committing to charity & public welfare cause and serving the building of harmonious society

2. Enhancing social responsibility managementClosely centering on the implementation of social responsibility strategic planning, the SINOMACH

strived to promote the social responsibility management of the Group in 2012. Through enhancing

responsibility concept, completing management system, strengthening capability construction, and

carrying out special activities, the SINOMACH constantly improved the social responsibility management

level of the Group, realizing sustainable development among economy, environment and society.

Implementing social responsibility strategic planning

In 2012, closely centering on the promotion

of implementing key tasks of the social

responsibility strategic planning, the SINOMACH

orderly carried out the social responsibility

management work, continuously enhanced the

core concept of social responsibility, established

the two mechanisms of social responsibility

management and stakeholder engagement,

Social responsibility model of SINOMACH

Widely respected leader for sustainable

development in machinery industry

Responsibility-focused

SINOMACH

Innovation-focused

SINOMACH

Happiness-focused

SINOMACH

Green-focused

SINOMACH

fulfilled the development vision of “Value-

focused, innovation-focused, green-focused,

responsibility-focused, and happiness-focused

SINOMACH” with the guidance of the four basic

principles of “Work together, win together,

put people first, and environmental protection

and conservation,” and made special efforts to

conduct the social responsibility practice project.

Value-focused

SINOMACH


Responsibility-Focused SINO

MACH

--Enhancing Responsibility M

anagement

Value-Focused SINO

MACH

-- D

eveloping Real Economy

Innovation-Focused SINO

MACH

-- D

riving S&T Progress

Green-Focused SIN

OM

ACH -- Practicing

environmental protection and low

-carbon conceptH

appiness-Focused SINO

MACH

-- Building Corporate Citizenship

Director (Chairman of the

Board of Directors)

Deputy Director (Corporate Management)

Social Responsibility Work Office

Members (Chief of Each Department)

Secretary-General

Chiefs for Social Responsibility Work

of Subsidiaries

Completing social responsibility management systemThe SINOMACH constantly promotes managerial

innovation. Since 2002, the Headquarters

of the Group has gradually established the

management system with four standards of

quality, environment, occupational health and

safety, and social responsibility by conducting

such activities as standard implementation

training, system document compilation, internal

auditor training, internal auditing guidance,

and formal evaluation, successively passing the

relevant certifications and acquiring certificates

on quality, environment, occupational health

The Group acquired the social responsibility system certificate

and safety, and social responsibility systems.

In 2012, the Group totally reviewed 379 items

of qualifications in various fields, including

30 newly-added qualifications engaged

in engineering design, consulting, and

environmental assessment, and so on.In 2012,

with close combination of management system

operation and “management improvements”

activities, the Headquarters of the Group

organized the internal auditor trainings and

carried out the system internal auditing and

management review in a deep-going way.

The SINOMACH established a social responsibility

management committee with the chairman of

the board of directors as the leader, and set up

social responsibility work office to direct the

social responsibility management work of the

subsidiaries, providing strong organizational

support for the Group to comprehensively fulfill

social responsibility.

In 2012, the Group totally reviewed 379 items of qualifications in various fields

379including 30 newly-added qualifications engaged in engineering design, consulting, and environmental assessment, and so on

30


Capability construction items Specific developments

Promoting total employee trainings on social responsibility

In September 24-26, 2012, the SINOMACH held the Group’s 2012 training work meeting on corporate culture, brand and social responsibility & the spot meeting on corporate culture of the SIPPR Engineering Group Co., Ltd.

Participating in research projects on social responsibility

Participant of the research project of the “Research on Social Responsibility Guidelines for Central SOEs” of the SASAC of the State CouncilParticipated in the “Strategic Program on Harmonious Development for Central SOEs”Participated in the “Guidelines for the Preparation of Corporate Social Responsibility Report in China”Organized and participated in the international standard comparison research

Strengthening communications on social responsibility both at home and abroad

Compiled the 2011 social responsibility report and released the report in both Chinese and English versions for the first timeAwarded the title of the “Role model of equipment manufacturing industry in fulfilling corporate social responsibility in 2012,” and selected as excellent case of the “Social Responsibility Practices Reports of China’s Equipment Manufacturing Industry”

Strengthening construction on social responsibility capability

The Group actively enhanced corporate social responsibility management

The SINOMACH constantly completed the

social responsibility management system, and

gradually established the dynamic development

mechanism on the Group’s social responsibility

capability featuring self-learning and continuous

improvements by adopting such measures as

vigorously promoting the total employee trainings

on social responsibility, participating in research

projects on social responsibility and strengthening

internal and external communications on social

responsibility both at home and abroad, as well as

through effective institutional arrangement and

resources support.

Actively responding the call put forward

by the State-Owned Assets Supervision and

Administration Commission (SASAC) of the

State Council for Central SOEs to comprehensive

enhance management in March, 2012, the

SINOMACH conducted special management

enhancement activity on social responsibility in

a deep-going way, established and completed

mechanism for social responsibility strategy,

governance, integration, performance and

communication, promoted mutual development

with stakeholders, strengthened theoretical

research on social responsibility, actively carried

out benchmarking analysis, and formulated work

plans, and so on. Up to now, the SINOMACH

has released social responsibility report for two

successive years, enriched the core values of

corporate culture, and established the concept

of constructing a value-focused, innovation-

focused, green-focused, responsibility-focused,

and happiness-focused SINOMACH.

Latest developments of social responsibility capability construction of SINOMACH



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Joining the UN Global Compact

The SINOMACH formally joined the United

Nations Global Compact in 2012, committing

itself to strictly adhering to the Ten Principles

of the Global Compact, actively fulfi lling

corporate social responsibility, constantly

improving corporate social responsibility

SINOMACH participated in the UNDP’s South-South Cooperation workshop

YTO Group Corporation

The YTO Group Corporation Co.,Ltd., a

subsidiary of the SINOMACH, established

the leading group for social responsibility

improvement with the chairman of the

board as director and the secretary of the

Party committee and general manager as

deputy director, actively fulfi lling social

responsibility and strengthening sustainable

development capability. During the second

phrase of conducting social responsibility

improvement activities, with the project

management as carrier and the enhancement

management level, submitting corporate

social responsibility report to the United

Nations Global Compact Offi ce annually, and

enhancing exchange and cooperation in the

fi eld of international social responsibility.

of lean production management, effi ciency

and results improvement, total waste

elimination, value creation and continuous

improvement as guidance, the YTO

established a system featuring accountability,

two-way commitment, project incentive,

and responsibility announcement, which

strengthened the incentive and constraint

mechanism of the social responsibility

improvement activities, winning the honorable

title of the “Governor Quality Award” of

Henan Province in 2012.

“We are very appreciated your company’s leadership on this decision, sincerely welcoming your company to join the United Nations Global Compact. We support, in every way possible, the eff orts your company made in embracing the Ten Principles and shaping a more sustainable global economy.”

---- Georg Kell, Executive Director of the United Nations Global Compact Offi ce


Carrying out social responsibility practicesThe SINOMACH actively carried out social

responsibility activities, and strived to

promote the integration of the Group’s social

responsibility concept into corporate strategic

SINOMACH releases social responsibility report

On April 25, 2012, the SINOMACH released

its second social responsibility report – the

“2011 China National Machinery Industry

Corporation Social Responsibility Report.”

The report comprehensively combed and

summarized the social responsibility work of

the SINOMACH in 2011, explicitly recording

the efforts the SINOMCAN has made and

the results it has achieved in such aspects as

economic performance, social performance

and environmental performance, which

SINOMACH strengthens social responsibility communications

Taking the use of media, offi cial website,

publications and other channels, the

SINOMACH released the Group’s social

responsibility information in a timely manner.

It also conducted special meetings on social

responsibility management to enhance day-

to-day social responsibility communications.

SINOMACH’s on-the-spot work meeting for corporate social responsibility training, 2012

management and day-to-day operation by

releasing social responsibility reports and

conducting day-to-day communication on social

responsibility and other activities.

received positive recognition from regulatory

agency and other stakeholders.

“Th is is the second social responsibility report of the SINOMACH……refl ecting the great changes of the SINOMACH, and the solid steps it has took in the road of sustainable development. As the backbone and major force of machinery industry, the SINOMACH adhered to the guidance of Scientifi c Outlook on Development, insisted on the core values of ‘Work together, win together,’ promoted reform and development, and actively fulfi lled social responsibility, upgrading various works to a new level.SINOMACH achieved outstanding results in the fi eld of social responsibility.”

---- Peng Huagang, Director General of the Research Bureau under the SASAC of the State Council

Peng Huagang, director general of the Research Bureau under the SASAC of the State Council, addressed at the release conference for the SINOMACH’s 2001 social responsibility report



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3. Promoting stakeholder engagementThe SINOMACH attached great importance to stakeholder engagement, constantly improved the total

stakeholder engagement mechanism, and actively responded the expectations and pursuits of various

stakeholders by the four links of identifi cation, analysis, implementation, and assessment.

Identifi cation To identify the stakeholders and their expectations for the SINOMACH;

AnalysisTo analyze the relations and eff ects between the stakeholders and business operation management, and formulate stakeholder engagement plan;

Implementation To implement stakeholder engagement plan;

Assessment To assess stakeholder engagement performance and improve stakeholder engagement mechanism.

Stakeholder engagement mechanism


Stakeholders Expectations for the Group Methods of communications and response

Government

Implement macro regulation policies of the State, carry on

industrial integration in accordance with the overall State plan

for the machinery industry, strengthen work safety management,

promote employment and bring forward industrial development of

the value chain

Participate in the formulation of laws and

regulations, and policy documents, attend

meetings, report on special subjects, submit

statistical statements and visits

SASAC

Realize the retention and increase of the value of State-

owned assets, particularly the overseas assets, perfect corporate

governance structure, strengthen and optimize main business, fully

enhance risk management and boost corporate comprehensive

competitiveness

Work out rules and institutions, propose work

goals, strengthen EVA assessment, report on

work and report statistical statements

Employees

Safeguard employees’ legal rights and interests, provide stable

employment opportunities, work out a reasonable remuneration

guarantee mechanism, and expand employees’ career development

channels, provide safe and healthy working environment,

implement the policy for localizing overseas employees

Set up trade unions at all levels, regularly

hold employees’ representative meetings,

and build up smooth channels for internal

communications

Competitors Bear industrial and trade responsibilities, set industrial and trade

paradigm, and make more contributions to the industry and trade

Actively join industrial and trade associations,

take the initiative to build up industrial and

trade exchange platform, organize industrial

and trade activities

CustomersOperate in good faith, provide premium and cheap products,

upgrade customer service quality and build up the good reputation

of enterprises in the machinery industry

Closely communicate with customers, strictly

perform contracts and provide extensive

information on products and services

EnvironmentImplement the state policies on energy efficiency and emissions

reduction, realize green operation, manufacture green machinery

products, protect the ecological environment, and carry out green

office work

Work out relevant environmental protection

systems, accelerate green scientific innovation

and actively participate in environmental

protection activities

PartnersAbide by business ethics and relevant laws and regulations,

establish long-term cooperation relationships, safeguard the

interests of upstream and downstream enterprises, and accomplish

mutual benefits and win-win development

Strategic cooperation negotiations, meeting

of high-level leaders, invitation to bid and

bidding, day-to-day business exchanges, and

regular visits

Community and the public

Promote sustainable development of community economy, support

social welfare cause, and forge public welfare projects with the

SINOMACH characteristics

Sign joint construction agreements,

participate in construction of community

projects, regularly communicate and carry out

friendship-building events

Social groups or organizations

Support the development of social groups and organizations,

implement organizational charters, strengthen the disclosure of

operation information, and participate in public welfare cause

Actively attend relevant meetings and

willingly offer suggestions

Stakeholders



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No. Name of association or society Position

1 China Machinery Industry Federation (CMIF)

Vice

Chairman

Unit

2

China Enterprise Confederation (CEC)

China Enterprise Directors Association

(CEDA)

Vice

Chairman

Unit

3China International Contractors Association

(CICA)

Vice

Chairman

Unit

4

China Chamber of Commerce for Import and

Export of Machinery and

Electronic Products (CCCME)

Vice

Chairman

Unit

5 Chinese Mechanical Engineering Society (CMES)

Deputy

Director-

General Unit

6China Association of Agricultural Machinery

Manufacturers (CAAMM)

Chairman

Unit

7China Chamber of International Commerce

(CCOIC)

Vice

Chairman

Unit

8China Association of International Engineering

Consultants (CAIEC)

Vice

Chairman

Unit

9China National Association of Engineering

Consultants (CNAEC)

Vice

Chairman

Unit

10 China Exploration & Design Association (CEDA)

Deputy

Director-

General Units

11China Association for Engineering Construction

Standardization (CECS)

Deputy

Director-

General Unit

12Society of Automotive Engineers of China (SAE-

China)

Deputy

Director-

General Unit

13China Association of Automotive Manufacturers

(CAAM)

Vice

Chairman

Unit

14China Association of Plant Engineering

Consultants (CAPEC)

Deputy

Director-

General Unit

15Machiner Polipic (China Association of Machinery

Industry Culture, CAMIC)

Vice

Chairman

Unit

16China Machinery Enterprise Management

Association (CMMA)

Deputy

Director-

General Unit

17China-Europe Association for Economic &

Technical Cooperation (CEATEC)

Deputy

Director-

General Unit

18China Machinery Industry Education Society

(CMIES)

Deputy

Director-

General Unit

19China Machinery Industry Auditing Society

(CASMI)

Vice

Chairman

Unit

20 China Auto Talents Society (CATS)

Deputy

Director-

General Unit

21Machinery Branch of the China Supervision

Society

Vice

Chairman

Unit

22Machinery Industry Branch of the Accounting

Society of China (ASC)

Chairman

Unit

23

Electric Power Equipment Branch of the China

Chamber of Commerce for Import and Export of

Machinery and Electronic Products

Vice

Chairman

Unit

24 China Electrotechnical Society (CES)Executive

Director Unit

25 China Association of Work Safety (CAWS)Executive

Director Unit

26 China Labor SocietyExecutive

Director Unit

27Shanghai Cooperation Organization (SCO) China

Business Council

Executive

Director Unit

28Accounting Society for Foreign Economic

Relations & Trade of China

Executive

Director Unit

No. Name of association or society Position

Memberships in associations


As a large central SOE with the largest industrial scale, the broadest business scope, the most outstanding predominance in industrial chains and the strongest R&D capabilities in the Chinese machinery industry, the SINOMACH has constantly adjusted the product structure, promoted the whole industry chain layout, accelerated the development mode transformation, improved the management level, built “value-focused SINOMACH” with quality-oriented growth, and constructed strong real economy to help boost the constant development and transformation & upgrade of national economy.

Value-Focused SINOMACH -- Developing Real Economy

In 2012, the total amount of the newly-signed contracts signed by the Group reached 49.4 billion U.S. dollars

49.4

In 2012, the SINOMF accumulatively off ered 7.5 billion yuan of loans

7.5

In 2012, the SINOMACH Finance transacted 1.5 billion yuan of acceptance bill discount

1.5


2008 2009 2010 2011 2012

Operating revenue 974.2 980.2 1,522.2 1,910.0 2,139.2

Total profi ts 38.7 48.4 66.7 78.0 86.3

Total assets 805.1 1,035.0 1,314.6 1,665.0 1,952.1

1. Scientifi c operation, constant creation and value-sharingAdhering to the theme of scientifi c development and the mainline of mode transformation, the

SINOMACH achieved quality-oriented development in 2012 by structural adjustment and management

improvement. In face of outside environment of increasingly serious international economic situation

and domestic economy with increasing downward pressure in 2012, the SINOMACH promoted

management improvement, stabilized business growth, and enhanced value creation capability,

achieving operating revenue of 213.9 billion yuan, total profi ts of 8.6 billion yuan and economic value

added of 4.4 billion yuan, up 11 percent, 11 percent, and 0.8 percent respectively from a year earlier.

SINOMACH’s operating performance in 2008-2012 (Unit: 100 million yuan)

2. Developing whole industry chain to boost real economyFocusing on whole industry chain development and centering on the two major sectors of equipment

manufacturing and modern manufacturing service, the SINOMACH enhanced the whole industry chain

development in such aspects as design, R&D, manufacturing, system integration, project contracting,

trade and services. Using internal coordination to integrate strength and capital operation to complete

layout, the SINOMACH adjusted product structure and innovated business mode, making contributions

to the objective of a large and strong real economy.

Using equipment manufacturing to help industry upgrade

As one of the most important engineering

machinery manufacturing enterprises in

China, the SINOMACH possessed strong R&D

and system integration capabilities in the

fi elds of engineering agricultural machinery

equipment, power equipment, petrochemical

general machinery, machine tool, automotive

engineering and environmental protection

equipment, and so on, providing strong

equipment and technology support for various

sectors of the national economy. In 2012, the

SINOMACH fostered independent equipment

industry growth, built competitive advantages,

and boosted other industries to improve

production effi ciency by integrated innovations,

promoting the transformation and upgrade of

real economy.

In 2012,total profi ts of 8.6 billion yuan

8.6economic value added of 4.4 billion yuan

4.4



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Products Applications

Agricultural machinery and forestry machinery To improve the modernization level of the primary industry

Heavy-duty machinery, engineering machinery, and hoisting and conveying machinery

To improve the effi ciency of engineering construction

Machinery tool, and instrument and apparatus To improve production effi ciency of manufacturing industry

Petrochemical general machinery and environmental protection equipment

To promoted energy-saving and emission reduction as well as clean production

Electric power engineering and power station To help promote the power industry development

Geological engineering equipment To apply to geological prospecting

Mechanical components and automobile parts To serve the machinery production

Motorcycle and power machinery To facilitate production and life

SINOMACH’s products and applicationsTips:The so-called “power gear shifting”

is similar with the sedan car’s automatic

gear shifting, i.e., the gear shifting can

be conducted under load conditions. The

“Dongfanghong” tractor with power

gear shifting comprehensively applied

the electric-hydraulic control process,

providing strong power, improving fuel-

effi ciency, benefi ting environmental

protection, and offering easy operation,

comfort driving experience and

convenient maintenance, which not only

can reduce the labor intensity of drivers,

but also improve the operation effi ciency

of agricultural machinery.

“Dongfanghong” tractor leads agricultural equipment upgrade

The “Dongfanghong” tractor with power

gear shifting researched and manufactured by

the SINOMACH’s YTO Group Corporation was

honored as “China’s most advanced tractor.”

With the successful production in 2010,

the tractor was formally put into market in

volume in October, 2012, leading the upgrade

of China’s agricultural equipment again.

“Th e power gear shift ing technology is really good. With this technology, the operation effi ciency would be greatly improved. I hope more types of tractors to apply this technology as soon as possible.”

---- Shi Ming, a major client of agricultural machinery with test driving experience of this tractor


China’s largest intelligent roller put into trial production

Photo of the intelligent controlled LDD316H hydraulic double drum vibrating road roller

In December, 2012, the intelligent controlled

LDD316H hydraulic double drum vibrating

road roller independently designed by the

SINOMACH’s China SINOMACH Heavy Industry

Corporation was successfully entered into

trial production. With complete independent

intellectual property rights by the company,

the equipment currently is the hydraulic

double drum vibrating road roller featuring

the largest tonnage and the highest level

of intelligent control in China. With the

characteristics of high effi ciency and good

construction quality, it is the ideal compacting

equipment for constructing high-end road,

railway, airport, port, dam, municipal

engineering projects, and industrial site.

Spherical tank resolves oil storage problem

The SINOMACH’S Hefei General Machinery

Research Institute is a leading institute in the

fi elds of theoretical research on basic design

of large storage tank and the development

and application of high performance

materials in China. With good performance,

high quality, rational price, and excellent

after service, the institute won the trust from

customers. In 2012, it accumulatively signed

contracts of delivering and installing 132

spherical tanks, and the total contract amount

reached 668 million yuan. It has constructed

a batch of key projects of spherical tank,

making great contributions for China’s

petroleum industry, especially the strategic

petroleum reserve.

Photo of the EPC project site of spherical tank at storage and transportation zone, the Utilization Project of Propane and C4 Mixture of the Ningbo Haiyue New Materials Co., Ltd. The project currently is the largest spherical tank project in terms of the number of spherical tanks as well as the total storage volume.

Large electric vehicle project launched

In March, 2012, the SINOMACH’s China Foma

(Group) Co., Ltd. held the foundation stone

laying ceremony of the one million electric

vehicle project at the Taizhou New Energy

and Industrial Park, Jiangsu Province. The

project will produce Yamaha electric vehicles

introduced from Japan. Upon completion

of the fi rst phase of the project, the

production capability would reach 500,000

units of electric vehicles and 300,000 units

of motorcycles annually. At the same time,

the major parts and components production

base and R&D center would be constructed.

Upon completion of the second phase of the

project, the production capability would be

lifted to one million units of electric vehicles

and 500,000 units of motorcycles, meeting

the people’s demand for electric vehicles.



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Power engineering

Agricultural engineering

Traffic transportation

engineering

New energy engineering

Metallurgical/mining engineering

Light industrial textile engineering

Port and ship engineering

Culture, health and housing engineering

Construction supervision

Automobile engineering

Building materials

engineering

Environmental engineering

Engineering construction

Engineering exploration

Factory construction

Logistics engineering

Communication engineering

Civilian building design

Project contracting highlights “Made in China”The SINOMACH constantly completed the

business chain of project contracting and

improved the level of technological content,

offering all-round and multi-level package

solution for customers. Responding to the

national strategy of “Going out”, the Group

constructed a batch of influential projects

such as power station, power transmission

and transformation, traffic and agricultural

The SINOMACH’s contracting projects by type

engineering in Southeast Asia, Central Asia

and Africa, and so on, strongly boosting the

local infrastructure construction and economic

development, improving livelihood, and

highlighting the strength and branch of “Made

in China.” In 2012, the total amount of the

newly-signed contracts signed by the Group

reached 49.4 billion U.S. dollars.

In 2012, the total amount of the newly-signed contracts signed by the Group reached 49.4 billion U.S. dollars.

49.4


“Introduction of 3G and Expansion of 2.5 G Network” project helps Bangladesh enter into 3G era

Equatorial Guinea’s Kat Blau power transmission and transformation project

Botswana’s coal-fi red power station project

Sudan’s Dali water supply engineering project

Southeast Asia

South Asia

East Europe

Africa

Central AsiaWest Asia

Turkey’s EREN2X600MW supercritical coal-fi red power station project

Belarus’s pulp mill project

The Strength and Brand of “ Made in China” Being Displayed Globally



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Uzbekistan’s second phase project of potash fertilizer

IPPR won fi ve projects in Uzbekistan, covering agricultural water conservancy, municipal water supply, and power supply and distribution for residents

Iraq’s Hillah sewage treatment project

Iran’s Lamred 484MW gas combined cycle power plant project

Venezuela’s El Vigia power plant project

Bolivia’s sugar mill project

South America

Supporting facility construction project for ASEM

Vietnam’s Mai Son Cement Engineering Project

Cambodia’s Taty Hydropower Station BOT Project


Southeast Asia

Supporting facility construction project for ASEM

Residence Villa

Vientiane Wattay International Airport

Don Chan Palace Hotel

In November, 2012, the ninth Asia–Europe

Meeting (ASEM) was held in Vientiane, Laos.

The SINOMACH’s China CAMC Engineering

Co., Ltd. participated in the construction

of supporting facility projects such as the

construction of residence villa for the ASEM,

the reconstruction and upgrade of Don Chan

Palace Hotel, the expanding construction of

Vientiane Wattay International Airport, and

the construction of fl ood discharge channels

and pumping stations, and so on.

The fl oor space of the residence villa project,

which included one club and 50 units of

detached villa for Asian and European leaders,

was about 50,000 square meters. During the

ASEM summit, these villas accommodated

a total of 46 heads of state or government

attending the meeting, winning unanimously

high praise from them for the beautiful

environment and considerate service.

The reconstruction and upgrade project

for Don Chan Palace Hotel was completed

in September, 2012. The conference hall,

decoration standard, and equipment and

facility of the reconstructed hotel are second

to none in Laos, becoming the fi rst choice

for holding large high-level conference and

banquet. On November 5, the state banquet

of the ASEM summit was held at this hotel.

The expanding construction project for

Vientiane Wattay International Airport was

completed in October, 2012. The project

enhanced the air transportation capability

of the Vientiane Wattay International

Airport, which is of great importance for the

promotion of foreign investment and the

development of business and tourism.

The supporting project undertaken by the

China CAMC Engineering Co.,Ltd. is another

full support of China for Laos to hold high-

level and large international activity after

the project of national stadium construction

assisted by China in 2009 for Laos to hold

the Southeast Asian Games. The smooth

implementation of the project won the

SINOMACH a good image in Laos and the

Eurasia region at large, showing the strength

and level of Chinese engineering construction

enterprises.



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Tips: 3G, short for third Generation, is the third generation of mobile telecommunications technology. The main

difference of the 3G and the fi rst and second generations lies in the improvements of voice transmission and

data rate. The 3G technology can access mobile Internet, deal with images, music, video stream, and provide

various information services including web surfi ng, teleconference, and e-business.

Vietnam’s Mai Son Cement Engineering Project

“Introduction of 3G and Expansion of 2.5 G Network” project helps Bangladesh enter into 3G era

Cambodia’s Taty Hydropower Station BOT Project

Photo of Vietnam’s Mai Son Cement Plant

Photo of the project launching ceremony.

Photo of the Cambodia’s Taty Hydropower Station BOT Project

In June, 2012, the 2500T/D cement plant

project, a supporting project of the

Vietnamese government for the construction

of the SONLA Hydropower Plant, undertaken

by the SINOMACH’s China National Heavy

Machinery Corporation (CHMC) passed the

acceptance inspection. The CHMC successfully

completed the contracted contents of design,

manufacturing, installation instructions,

commissioning, technical training, and

operational instructions, and so on, winning

highly praise from the owner. The acceptance

of the Mai Son Cement Plant indicated the

In November, 2012, the launching ceremony

of the commercial 3G network -- the

“Introduction of 3G and Expansion of 2.5

G Network” project -- undertaken by the

SINOMACH’s China Machinery Engineering

Corporation (CMEC) was held at the

Bangabandhu International Conference

Center in Dhaka, Bangladesh, marking the

Bangladesh entered into the 3G era, and

The Cambodia’s Taty Hydropower Station,

a project invested and constructed by the

SINOMACH’s China National Heavy Machinery

Corporation (CHMC) under build-operate-

transfer (BOT), has been implemented

smoothly. The investment of the project was

540 million U.S. dollars. Currently, the main

dam and the subsidiary dam all reached the

dam crest design height, realizing the goal

of making the subsidiary dam to meet the

challenge of fl ood season and the spillway

to possess basic fl ood carrying capacity

before the 2012 major fl ood period. At the

same time, fully using the clean engery

successful completion of all four cement

plant projects undertaken by the CHMC in

Vietnam and has earned the company a good

reputation in Vietnam’s cement industry.

development mechanism, and taking the Taty

hydropower station project as carrier, the

CHMC explored a new road of utilizing clean

energy and environmental protection projects

to drive the energy-saving and emission

reduction.

South Asia

laying a foundation for the local development

of mobile communication.


Venezuela’s El Vigia power plant project

EPC contracting project for constructing sugar mill in Bolivia

The contract signing ceremony of EPC contracting project for constructing sugar mill in Bolivia

Photo of the Venezuela’s El Vigia power plant project

The Venezuela’s El Vigia power plant project

undertaken by the SINOMACH’s China CAMC

Engineering Co., Ltd. (CAMCE) has been

implemented smoothly in 2012, and no safety

incidents happened during the period. The

project, with a total contracting amount of

956 million U.S. dollars, is located in about 15

kilometers southwest of the El Vigia, Merida

of Venezuela. The contents of the project

include a thermal power station with a total

installed capacity of 500MW, two supporting

power transformation stations, and 56-

kilometer-long power transmission line. It is a

turnkey project covering the design, supply of

equipment, installation, commissioning, and

civil engineering. The implementation of the

project is of great importance for the stability

and development of power supply in Andes

region, for the development of southwest

Venezuela’s economy, industry, agriculture and

tourism, and for the improvement of living

standard of the people there. The project will

benefi t more than 150,000 households.

In March, 2012, the EPC contract of the San

Buenaventura sugar mill project was signed

by the SINOMACH’s China CAMC Engineering

Co., Ltd. (CAMCE) with Bolivia’s San

Buenaventura Co., Ltd. The total contracting

amount of the project reached 168 million U.S.

dollars. According to the contract, the CAMCE

is responsible to construct a sugar mill with

a daily processing capability of 7,000 tons in

El Porvenir, San Buenaventura of La Paz in

a period of 30 days. The implementation of

the project will help promote the agricultural

industrialization there.

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Turkey’s EREN2X600MW supercritical coal-fi red power station project

Belarus’s pulp mill project

Photo of the full view of the Turkey’s EREN2X600MW supercritical coal-fi red power plant

Photo of the construction site of the Belarus’s pulp mill project

On December 19, 2012, the Turkey’s

EREN2X600MW supercritical coal-fi red power

station undertaken by the SINOMACH’s China

Machinery Engineering Corporation (CMEC)

won China’s top award for engineering

project -- the Luban Award for Oversea

Project. This was the fi rst time for a coal-fi red

power station project to win this award since

its establishment.

This was the fi rst export of the domestically-

made supercritical power generation units

from China to other countries that was

accomplished by the CMEC and it was also the

fi rst time that Turkey imported supercritical

units with single unit capability of 600MW.

The contract signing and the completion as

well as the operation of the project opened

the door for the large supercritical coal-fi red

power generation units that independently

designed, manufactured, tested, and

The SINOMACH’s China CAMC Engineering

Co., Ltd. (CAMCE) formally implemented

the Belarus’s pulp mill project in May, 2012.

The project is located in Svetlogorsk of

Gomel, about 230 kilometers southeast

of Minsk, capital of Belarus. The working

range includes the project design, supply of

equipment and civil engineering, and so on.

The project fully utilizing the local rich forest

resource, and is of great importance for the

improvements of overall technological level

and production capability of the Belarus’s

pulp industry, benefi ting the local pulp

industry development, meeting the market

demand both at home and abroad, and

increasing value-added of the forest products,

foreign currency earnings and employment

opportunities.

East Europe

operated by China to the international

market, bringing along great economic and

social benefi ts for the people there. At the

selection for outstanding design of overseas

power generation project in power industry

organized by China Electric Power Planning

& Engineering Association, the project

was award the fi rst prize of outstanding

engineering project design.


Equatorial Guinea’s Kat Blau power transmission and transformation project

Botswana’s coal-fi red power station project

Sudan’s Dali water supply engineering project

Photo of the completion ceremony of Equatorial Guinea’s Kat Blau power transmission and transformation project

Photo of the project design sketch

Group Photo of Chinese personnel and the locals

On October 10, 2012, the completion

ceremony of the Equatorial Guinea’s Kat Blau

power transmission and transformation project

fully contracted by the SINOMACH’s China

Machinery Engineering Corporation Co.,Ltd.

(CMEC) was held grandly at the project

site. Teodoro Obiang Nguema Mbasogo,

President of Equatorial Guinea, attended the

ceremony for celebrating the establishment

of the Equatorial Guinea national power

dispatching center, awarding the leaders of

the SINOMACH and the CMEC with medals.

President Obiang spoke highly of the support

the Chinese government and the CMEC given

Three electric power units of the Morupule

B 4X150MW coal-fi red power station project

undertaken by the SINOMACH’s China

National Electric Engineering Co., Ltd. (CNEEC)

were successfully integrated into the country’s

national power grid, beginning to supply

power for the national development and

people’s life of Botswana.

In June, 2012, Sudan’s Dali water supply

engineering project undertaken by the

SINOMACH’s China National General

Machinery Engineering Corporation Co.,Ltd.

(GME) passed the acceptance inspection.

The GME undertook the works of survey,

design, implementation, supply of materials,

installation, commissioning and quality

guarantee of the project, and the project

scale reached 20,000 tons per day. The project

is located in Dali Town, one of the regions

with most serious water shortage in eastern

Sudan. Dali Town is situated between the

Blue Nile and the White Nile, the domestic

water of the people there basically depends

on rainwater collection. The completion

of the project bettered the local living and

production conditions, resolved the drinking

Africa

to the Kat Blau power transmission and

transformation project in his speech, saying

the project effectively improved the power

supply situation of Equatorial Guinea’s inland

region ad the country at large.

problem of nearly one million people,

boosted the local economic development, and

improved the life quality of the people there,

winning highly praise from the Sudanese

government and the people of Sudan.



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Iran’s Lamred 484MW gas combined cycle power plant project

Iraq’s Hillah sewage treatment project

Photo of THE contract signing ceremony of Iran’s Lamred 484MW gas combined cycle power plant project

Photo of the contract signing ceremony of the Iraq’s Hillah sewage treatment project

Iran is a country with rich oil reserves, but it

lacks of electric power. With the large electric

power demand of domestic market and

the demand of exporting electric power to

neighboring countries, lots of power energy

projects need to be constructed in Iran. On

June 30, 2012, the EPC contract of Iran’s

Lamred 484MW gas combined cycle power

plant project was signed at the SINOMACH’s

China National Electric Engineering Co., Ltd.

(CNEEC). The project is located in the north

of Lamred airport, Fars Province in southern

Iran, and the total installed capacity reached

On May 20, 2012, the EPC contract of Hillah

sewage treatment project was signed in

Baghdad, capital of Iraq. The project is

located in Hillah of central Iraq. As the fi rst

EPC contract signed by the SINOMACH’s China

National Electric Engineering Co., Ltd. with

the Iraqi government, it could process waste

water of 100,000 tons per day.

Central Asia

West Asia

Uzbekistan’s second phase project of potash fertilizer

IPPR won fi ve projects in Uzbekistan, covering agricultural water conservancy, municipal water supply, and power supply and distribution for residents

In May, 2012, the SINOMACH’s China

Machinery Industry Construction Group

Inc. (SINOCONST) won the bidding of

Uzbekistan’s potash fertilizer project. It is

the second phrase construction project of

the 400,000 tons of potash fertilizer plant

in Dehkanabad, about 600 kilometers from

Tashkent, capital of Uzbekistan. The working

range covers the project site survey, the

investigation, the loading and unloading,

transportation, customs declaration and

In 2012, the SINOMACH’s China IPPR

International Engineering Corporation (IPPR)

continuously enlarged and consolidated

the Uzbek market. It won the bidding of

fi ve projects in three provinces of Bukhara,

Samarqand and Fergana, covering three

fi elds of agricultural water conservancy,

municipal water supply, and power supply

and distribution for residents, and the

total contracting amount of the projects

reached more than 200 million yuan. The

clearance of construction equipment and

materials, the building of temporary facilities

for construction, the installation of tooling

equipment and other preparation works,

as well as the construction engineering,

decoration engineering, the installation

engineering, and the maintenance and

repair during the completion period. The

implementation of the project will help

promote the local agricultural development.

484MW. This was the second general contract

project of gas turbine power plant after

the Zanjan gas turbine project. The signing

of the contract marked that the CNEEC has

achieved progressive development in Iranian

market, constantly serving the electric power

infrastructure construction of Iran.

reconstruction project of Karakul pumping

station, which started in 2010, was smoothly

transferred to the Uzbek party in 2012,

winning trust and laying a solid foundation

for further development.


Trade and services optimize resource allocationAs the largest import and export trade enterprise

in Chinese machinery industry, the SINOMACH

is an important window for exporting China-

made high-quality mechanical and electrical

products and introducing advanced technologies

and products from other countries. The Group

actively promoted trade business to the

Mechanical and electrical products trade

Shipping products; electric power tools and garden instruments; engineering machinery; agricultural machinery;

technological equipment; motive power machinery; electronic products; new energy; light textile and clothing;

means of production; international bidding; technology introduction.

Automobile tradeWholesale and retail of imported automobile; sales of domestically-made passenger vehicles; export business of

automobile and auto parts.

Exhibition businessAuto exhibition; engineering machinery exhibition; machine tool and tools exhibition; photographic apparatus

exhibition; China Import and Export Fair.

Trade and Services of SINOMACH

2012 China Engineering & Technology Expo

2nd China (Macao) International Automobile Exposition held

In October 17-20, 2012, the 2012 China

Engineering & Technology Expo (Rumania)

organized by the SINOMACH’s China

Machinery Engineering Corporation (CMEC)

was held successfully at the Bucharest

International Exhibition Center in Rumania.

This was the third time for the CMEC to hold

this exhibition in three years in a row after

the 2010 exhibition in Russia and the 2011

exhibition in Venezuela.

The second China (Macao) International

Automobile Exposition organized by

the SINOMACH and co-organized by the

SINOMACH’s China National Automotive

Industry International Corporation (CNAICO)

was successfully held in Macao, October 26-28,

2012. With the theme of “Brand, Bridge and

Opportunity,” the exposition attracted 360 plus

auto manufacturers and auto parts enterprises

from 12 countries and regions, strongly

promoting the development of Chinese auto

industry and the internationalization of

Chinese auto brands.Chairman of the SINOMACH Ren Hongbin addressed at the opening ceremony of the exposition

Tips: The “China Engineering & Technology Expo” is a non-commercial and overseas exhibition sponsored by

the Ministry of Commerce of China by using the government fund. This is a touring exhibition held once a

year. As the large-scale specialized exhibition in the fi elds of engineering machinery and technology, it has

become a bridge and important platform for China and its neighboring countries even the world at large to

conduct cooperation, realizing the positive interaction of “Going out” and “Coming in,” which is of great

importance for the promotion of China’s economic and technological cooperation with foreign countries.

development orientation of a new business

mode of “Resource supply, business consultation,

fi nancial support, and logistics service,” boosted

business transformation and upgrade, optimized

resource allocation by providing more and better

trade services globally, and achieved mutual

benefi ts.



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Eff ective development of M&A

Formally signed agreement on strategic reorganization of the White Dove (Group) Company Limited with Zhengzhou City;Completed the reorganization of Fuyang Bearing Co., Ltd. and Changtuo Agricultural Machinery Equipment Group, increasing 170 million yuan of equity capital to the Group;Integrated the industry chain of the auto after-sale service market by means of merger and acquisition.

Order promotion of internal resource integration and corporate restructuring

Basically completed the integration of the business sector of engineering machinery;Achieved phased results in agricultural machinery business resource integration;Carried out earlier stage demonstration of auto business resource integration plan;Fully launched the restructuring work of the third batch of 12 enterprises and most enterprises have completed the basic works such as due diligence investigation and assets inspection.

Constant promotion of enterprise listing

China Machinery Engineering Corporation (CMEC) was listed on Stock Exchange in Hong Kong;The First Tractor Company Limited was listed on Shanghai Stock Exchange, constructing a favorable capital operation platform with the “A+H” shares;Hefei General Machinery Research Institute become the largest shareholder of Guotong Pipes by means of gratuitous transfer;The stock system reform and listing of China National Heavy Machinery Research Institute and China National Electric Apparatus Research Institute were in steady progress;China CAMC Engineering Co., Ltd. and Luoyang Bearing Science and Technology Co., Ltd. raised 1.3 billion yuan and 390 million yuan respectively by refi nancing in capital market;A total of eight companies of the Group have been listed, taking 55 percent of the Group’s net assets. The capitalization, marketization and public orientation of the state-owned capital has made great progress.

Eff ective enhancement of capital management

Among the 132 enterprises with operating loss in 2011, 46 have reversed losses and seven have completed rectifi cation, reducing 40.15 percent of enterprises with operating loss.

Continuous enhancement of investment management and control

Audited 117 investment projects, totaling 12.4 billion yuan; projects valuing 7.2 billion yuan have passed the auditing;Investments focused on the industrialization of large intelligent self-propelled combine harvester of the Chinese Academy of Agricultural Mechanization Sciences (CAAMS), the National Superhard Materials & Products Engineering Research Center of the Zhengzhou Research Institute for Abrasives & Grinding, the high-end auto coating equipment base of the China Automobile Industry Engineering Corporation and other industrialization projects, strongly promoting the industrialization of scientifi c and technological enterprises;Accelerated the implementation of acquiring stake in Canada-based Procon Holdings (Alberta) Inc. by China CAMC Engineering Co., Ltd. and other projects, promoting the transformation and upgrade of industrial and trade enterprises;Actively carried out special improvements on investment decision-making management, and improved investment quality and effi ciency by enhancing investment management system construction, optimizing and perfecting investment decision-making procedure, building informationization management and control platform, and strengthening process supervision.

Capital operation perfects industry layoutIn accordance with the national industrial

structure adjustment and the demand of the

corporate strategic development, the SINOMACH

constantly enhanced capital operation. By

means of merger and acquisition, the Group

Major developments of SINOMACH’s capital operation in 2012

promoted enterprises to go public, strengthened

capital management, enhanced investment

management and control, completed industry

layout, and improved the industry service

capability and the overall competitiveness.


3. Improving management to strengthen development foundationManagement is the foundation stone of corporate development, and management enhancement is

the key to improve corporate competitiveness. Adhering to the general objective of specialized, lean

and systematic management, coordination and integration capabilities enhancement, and realization

of maximized value, the SINOMACH constantly strengthened strategic management, enhanced internal

management and control, fostered corporate culture and brand, and promoted informationization

construction. By management improvements, the Group further enhanced management and control,

optimized organizational structure, compressed management levels, strengthened internal market-

oriented operation mechanism, exerted coordinated effect, and improved development quality, laying a

foundation for the Group to achieve sustainable and intensive development.

Strengthening strategic managementStarting from the profound changes of economic

situations both at home and abroad as well

as the internal environment, the SINOMACH

enhanced the compiling work of strategic

planning, promoted the standardized and

scientific compilation of functional strategy and

strategies for subsidiaries, conducted research

and formulated international operation strategic

planning and other strategies for the Group.

As one of the ten key contact enterprises, the

Group was listed on the “Implementing Program

of International Operation Strategy for Central

State-Owned Enterprises during the 12th Five-

Year Plan Period.” The Group strengthened

the publicity and implementation of strategic

planning, and effectively exerted the role of

strategic planning in unifying thought and

action. The subsidiaries of the Group actively

implemented the strategic planning and exerted

the role of strategic management in leading and

promoting corporate scientific development.

Development strategic planning handbooks

of SINOMACH and its subsidiaries

Enhancing financial management and controlWith the mainline of “Accelerating financial

management mode transformation, and

constructing value-oriented financial

management capability,” the SINOMACH

has done a lot of work in such aspects as

“Strengthening foundation, strictly controlling

risks, supporting development and improving

value.” By improving enhancing financial

management and control capability, the

Group fully utilized the financial resource to

support business development, reduced cost

and increased efficiency, improving the value

creation capability. In 2012, the SINOMACH

Finance Co., Ltd. accumulatively offered 7.5

billion yuan of loans, transacted 1.5 billion yuan

of acceptance bill discount, and 400 million yuan

of financing lease, saving interest expenses of

270 million yuan.

In 2012, the SINOMACH Finance Co., Ltd. accumulatively offered 7.5 billion yuan of loans

7.5 transacted 1.5 billion yuan of acceptance bill discount

1.5and 400 million yuan of financing lease

400saving interest expenses of 270 million yuan

270



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The SINOMACH constantly deepened the

comprehensive risk management, and

continuously improved the capability and level of

risk prevention and response by promoting risk

management system construction, completing

institution, improving process and strengthening

supervision. The Group made special efforts to

prevent and control legal risks, enhanced auditing

and effi ciency supervision, promoted corruption

combating and integrity upholding, and regulated

and normalized the risk management, so as to

provide support for stable development of the

business and healthy operation of the Group.

Deepening comprehensive risk management

Desk calendar with theme of integrity culture

SINOMACH’s main measures for enhancing fi nancial management and control in 2012

Carrying out comprehensive special improvements on budget management

Promoting internal control system construction

Strengthening funds management

Formulating evaluation standards for fi nancial maturity

Constructing property right management information system

Comprehensive risk management

Enhancing auditing inspection

Preventing legal risks

Controlling investment risks

Promoting effi ciency

supervision


Conducted research and formulated development planning for corporate culture, clarifying the orientation and objective of corporate culture construction;

Further enhanced VI integration work and promoted total brand construction;

Carried out investigation activities on current situation of corporate culture and prize solicitation activity on LOGO interpretation, deepening the understanding of employees to the Group’s corporate culture and brand positioning;

Held meetings for publicity and implementation, exchange and training on corporate culture, improving the Group’s culture construction.

Fostering culture and brand

With the “Harmony” culture as core and the

“Work together, win together” as core values,

the SINOMACH promoted corporate culture

system construction. The Group strived to reach

consensus inside the enterprise and shape image

outside of the enterprise, effectively advanced

management improvement, boosted brand

Latest development of SINOMACH’s culture and brand construction in 2012

Brand publicity activitiesParticipated in Russian International Construction

Machinery & Engineering Machinery ExhibitionParticipated in the fi rst China Beijing International

Fair for Trade in Services

Organized and participated the 11th China International Machine Tool & Tools Exhibition

SINOMACH was awarded the “National Outstanding Unit for Corporate Culture Construction in 2012” by the China Corporate Culture Institute

awareness, recognition, and infl uence, and

enhanced the soft power of the SINOMACH

by organizing cultural activities, distributing

corporate publications, carrying out corporate

culture investigation, and integrating brand VI,

and so on.



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Established information integration management platform covering scientifi c and technological business, operating business, legal business, capital operation business and other businesses, as well as the third-level affi liated enterprises;

Established property right management information system, realizing the infomationization and networking of property right registration and eff ective, real time, dynamic and whole process regulation on property right situations of affi liated enterprises;

Established the integrated fi nancial management system and statement management system, covering all the fi nancial units of the Group;

Completed the video conference system and fully established the new mode of “one city with one site”.

Promoting informationization constructionIn accordance with the informationization

development planning of the 12th Five-Year

Plan, the SINOMACH constantly deepened the

management informationization construction.

As for the management and control at the

Group level, the Group organically integrated

the management informationization into

other special-topic activities, established a

reporting system covering the headquarters and

Latest developments of SINOMACH’s management informationization

On September 4, 2012, SINOMACH participated in the training on management informationization organized by the SASAC of the State Council

all its subsidiaries on data relating to project

management, operation statistics and other

activities by effective informationizatin means,

and improved the timeliness and accuracy of

the data, which provided scientifi c basis for

decision-making, effectively supported other

management works and business development,

boosted management effi ciency and level, and

promoted connotative development.


Enterprise is the main body of technological innovation, and independent innovation is the powerful driving force for corporate development as well as important path for enterprise to improve development quality, become strong and achieve excellence. As a multinational group of integrated equipment industry, the SINOMACH always adhered to innovation concept, focused on scientific and technological innovation, made breakthroughs, took the innovation-driven development road, led scientifi c and technological progress, and promoted the construction of an innovation-oriented country, winning the title of “New hi-tech enterprise.”

Innovation-Focused SINOMACH -- Driving S&T Progress

In 2012,The number of authorized patents 879 items

879

In 2012,the number of prizes at provincial/ministerial level or above amounted to 308 items

308

During the period of the 12th Five-Year Plan, the Group has accumulatively obtained more than 2,600 authorized patents

2,600


1. Strengthening innovation system constructionAs one of the Fortune Global 500 enterprises, the SINOMACH enhanced scientifi c and technological and

R&D input, and promoted corporate development by relying on scientifi c and technological progress.

Centering on the development idea of “Constructing a systematic platform, implementing technological

and institutional innovation, focusing on talent project, result industrialization project and intellectual

property rights project, and improving the Group’s international competitiveness,” the SINOMACH

optimized internal and external resource allocation, built and completed the market-oriented and

industry-university-research-trade-fi nance integrated technological innovation system with the

SINOMACH characteristics, and exerted the role of scientifi c and technological innovation in promoting

social and economic development.

Promoting innovation platform construction

The Group was formally recognized as the national innovation pilot enterprise; China Geo-Equipment Corporation and Lanpec Technologies Limited was recognized as national technological innovation demonstration units;

Four industrialization technological innovation strategic alliances led by four affi liated enterprises of the Group were recognized as national industrialization technological innovation strategic alliances;

Guangzhou Mechanical Engineering Research Institute Co., Ltd. was approved to establish national engineering technological research center for rubber & plastics sealing materials;

Hefei General Machinery Research Institute was approved to establish national center for international joint research and national public service demonstration platform for small- and medium-sized enterprises.

Promoting innovation system construction

Centering on the reconstruction of the three-level technological innovation system, the Group accelerated the building of the Central Research Institute and prudently carried forward the establishment of overseas R&D centers.

Promoting market entry construction

In 2012, the newly-added qualifi cations of the Group reached 30 items, among which the SIPPR Engineering Group Co., Ltd. was approved and recognized as the third comprehensive class-A design institute of the Group.

Latest development of SINOMACH’s scientifi c and technological innovation system



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Technical Committee

Scientifi c and Technological Development Department

Leadership of the Group

Central Research Institute

Scientifi c and Technological M

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Subsidiary


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Subsidiary


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Subsidiary

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Scientifi c and technological management system structure of the Group

National Key Laboratory of Metal Material Extrusion and Forging

Relying on China National Heavy Machinery

Research Institute Co., Ltd., the innovation

system construction with the National Key

Laboratory of Metal Material Extrusion

and Forging that strongly supported by the

scientifi c and technological foundation of the

Group as the core was awarded the second

prize of national scientifi c and technological

progress (knowledge innovation

engineering); a total of 26 scientifi c research

results won scientifi c and technological

progress prize at provincial/ministerial level

or above; accumulatively achieved 175

patents, among which 36 items were patents

for invention and 139 were utility model

patents; formulated 75 industrial standards

and regulations; achieved three New Product

titles at national or provincial/ministerial

level; cultivated six doctors and post-doctoral

fellows; and, issued 36 research papers.


2. Boosting independent innovation capability

By improving corporate innovation system, boosting scientific and technological independent

innovation, cultivating scientific and technological talent team, promoting formulation of industrial

standards, enhancing intellectual property rights protection, and blazing new path for machinery

industry development, the SINOMACH constantly accelerated the scientific and technological innovation,

so as to lead the development orientation of Chinese machinery industry.

Guiding by the scientific and technological development goal of the 12th Five-Year Plan for Chinese

engineering machinery industry, the Group opened up an independent innovation road with SINOMACH

characteristics. In 2012, the technological innovation system and the scientific and technological

incentive system with SINOMACH characteristics have been basically established, and the scientific and

technological innovation vitality has been constantly enhanced, forming technological and market

competitive advantages of high-end products. The number of authorized patents 879 items, and that

of prizes at provincial/ministerial level or above amounted to 308 items. The application and protection

of intellectual property rights have been greatly enhanced. The number of projects of industrialization

base construction and technological innovation approved and conducted by the Group’s research centers

and institutes reached 60 plus items, and the total investment amounted to more than 5.5 billion yuan.

The scale and strength of the Group’s scientific and technological industrialization have been constantly

strengthened.

In 2012,the number of authorized patents 879 items

879and that of prizes at provincial/ministerial level or above amounted to 308 items

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Indicators Indicator unit 2012

Technological development input 10,000 yuan 380,017.9

Proportion of technological development input in sales revenue % 1.77

Number of scientific research platform platform 198

Among which: National key laboratory lab 5

National engineering technological research center center 7

National innovation pilot enterprise enterprise 9

National enterprise technological center center 5

post-doctoral workstation workstation 14

Nat ional technologica l committee for standardization committee 40

National productivity promotion center center 6

Number of patent applications patent 1,385

Among which: patent for invention patent 455

Number of authorized patent patent 879

Among which: patent for invention patent 155

Number of standard the Group organized or participated in standard 586

Among which: national standard standard 176

Number of prize at provincial/ministerial level or above prize 308

A m o u n t o f t h e G ro u p’s s c i e n t i f i c a n d technological foundation 10,000 yuan 3,270

Number of project the Group’s scientific and technological foundation supported project 24

Key indicators of SINOMACH’s scientific and technological development, 2012


Focusing on S&T talent cultivationThe talent cultivation plays a decisive role in

scientifi c and technological innovation. The

SINOMACH fi rmly established scientifi c talent

concept, selected, cultivated, utilized and

recruited talents with orientation of strategic

goal, fully mobilized and motivated the

talents’ enthusiasm, boosted the improvement

and growth of talents, enhanced innovation

concept and competitive awareness of talents,

and constantly improved the technological

innovation capability and core competitiveness.

In 2012, the Group has had 962 experts enjoying

special allowance, 17 candidates of the New

Century National Hundred, Thousand and Ten

Thousand Talent Project, 24 national young-

and middle-aged experts with outstanding

contributions, and two academicians.

Composition of SINOMACH’s professional technicians, 2012

SINOMACH awarded national scientifi c and technological prize

The project of “Key Technologies and

Application of Industrial Construction

Concrete Structural Diagnostics” completed

by the SINOMACH (organizer), the

Central Research Institute of Building and

Construction, MCC Group, and other units

was awarded the second prize of the 2012

national scientifi c and technological progress.

Through independent research and

development and engineering practices,

the project made major breakthroughs in

durability and safety diagnostics of industrial

construction concrete structure, established

grading standard-based safety and durability

evaluation indicator system on industrial

construction concrete structure by applying

reliability theory, constructed evaluation

theory and methodological system on safety

and durability of industrial construction

concrete structure, put forward bearing

capacity calculation and durability evaluation

methods of repaired concrete member, and

set up and competed the regulatory system

of technological standard on diagnostics

of existing industrial construction concrete

structure. The results of the project laid a

technological foundation for diagnostics of Xu Jian was awarded the national scientifi c and technological progress prize

industrial construction concrete structure in

civil engineering, advancing the technological

level of China’s modern civil engineering.

With enormous economic and social benefi ts

and broad application prospects, the project

results will promote technological progress

in related fi elds such as the civil engineering,

and improve the technological level of

concrete structure diagnostics.

The SINOMACH committed itself to the

compilation of national standards. The

number of national and industrial standards

edited or drafted by Xu Jian, president of the

SINOMACH, amounted to 19 items, and Mr.

Xu himself was awarded as national advanced

individual of engineering construction

standards.

In 2012, the Group has had 962 experts enjoying special allowance

962

Indicator unit:person

8,660

11,70813,442

6,338

1,318

Junior Professional Technicians

Senior professional technicians

Among whom: professor rank technicians

Intermediate professional technicians

Others



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Overseas education and training program

The SINOMACH actively implemented the

education and training program for cadres.

In accordance with the actual situation, the

Group enhanced the efforts of selecting

outstanding youth talents in scientifi c and

technological and management fi elds to

study overseas. These talents were dispatched

to the U.S., Belgium, Netherlands and

other countries to study modern corporate

Set up scientifi c and technological award for machinery manufacturing industry

Huang Xiqiu Won the “Liang Sicheng Architecture Award”

The SINOMACH set up a scientifi c and

technological award for machinery

manufacturing industry in 2004. Since the

inception, it has awarded a total of 263

projects, among which 31 were fi rst prizes,

The awarding ceremony of the 6th Liang

Sicheng Architecture Award, which received

much attention from academic circles,

was held grandly at the Great Hall of the

People in Beijing on December 12, 2012. The

Liang Sicheng Architecture Award, which

positioned as a lifetime achievement award

operating management, international

trade laws, fi nancial management and

other courses. Taking the Center for Power

Electronics Systems (CPES) as platform, the

SINOMACH dispatched exchange scholars

to study at the Virginia Polytechnic Institute

and State University, learning the latest

developments of world’s power electronics

industry.

77 second prizes and 155 third prizes. It also

awarded individuals for more than 1,860

persons/times. In 2012, 36 projects were

awarded, among which four were fi rst prizes,

ten second prizes and 22 third prizes.

for Chinese architects, has been regarded

as the highest honor for Chinese architects.

As an outstanding architect with major

achievements in and contributions to the

design and creation of medical architecture,

Huang Xiqiu truly deserves this award.


As the core element of strategic resources and

international competitiveness of a country or an

enterprise, the intellectual property rights has

become one of the key elements to accelerate

the transformation of economic growth mode .

The SINOMACH has integrated intellectual

property rights into the overall planning of the

Group’s scientifi c and technological strategy.

In the 12th fi ve-year plans for scientifi c and

technological development strategy and

intellectual property rights development, the

Group explicitly stipulated to take intellectual

property rights as key strategic measure,

revitalizing the technological level and overall

strength of China’s equipment manufacturing

Photo of the 165MN

free forging hydraulic press

Protecting intellectual property rights

The SINOMACH conducted practical actions

to protect the lawful rights and interest of

other party’s intellectual property rights and

actively respond the “Initiative for Enterprises

to Protect Intellectual Property Rights” and

“Initiative for Enterprises to Use Copyrighted

Software,” allocating tens of millions of yuan

to buy copyrighted software, organizing and

calling for affi liated enterprises to support

the two initiatives and use copyrighted

software.

Strengthening intellectual property rights protection

2010 20122011

104133

155625

658

879

Authorized patents Among which: patents for invention

Authorized patents of SINOMACH, 2010-2012

Indicator unit : item

industry by optimize resource allocation and

inspiring creative enthusiasm.



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3. Leading industrial S&T progressScience and technology are the primary productive forces, and the primary driving force for economic

and social development. Science and technology competition is becoming increasingly important in

comprehensive national strength competition. The scientifi c and technological level and technological

innovation capability of central SOEs are important symbols of national strength, as well as the decisive

elements of guaranteeing competitive advantages in market competition and constructing national

core competitiveness.The SINOMACH implemented scientifi c and technological support plan, achieving a

batch of outstanding results of major technologies, key technologies, and generic technologies. Since the

beginning of the 12th Five-Year Plan, the Group has accumulatively obtained more than 2,600 authorized

patents, among which 500 plus were patents for invention; accumulatively won more than 1,000 scientifi c

and technological achievements at provincial/ministerial level or above; accumulatively formulated and

revised more than 2,000 national or industrial standards; accumulatively issued 10,000 research papers.

The SINOMACH always adhered to technological innovation as vanguard, constantly boosted its role in

promoting the development of Chinese machinery manufacturing industry, sought mutual development

and led scientifi c and technological progress of the industry.

Boosting industrial technology upgrade

In 2012, the SINOMACH ranked the third

place in 2012 list of Top 100 Independent

Innovation of Chinese Enterprises organized by

the Development Research Center of the State

Council by meticulous organization and active

reporting, awarding the comprehensive prize of

Successfully developed 165MN free forging hydraulic press

The 165MN free forging hydraulic press is

the largest one of its kind in term of tonnage

at present, lifting China’s large free forging

technology to reach the international

advanced level, which effectively eased the

tensions of industries in urgent need of large

large forging machine such as the national

defense industry, communication and

transportation industry, shipping industry,

Lanpec’s fi rst ZJ50LDB drilling rig developed successfully

The ZJ50LDB drilling rig is the fi rst oil drilling

rig manufactured, set-completed and tested

by the Lanpec Technologies Limited, which is

of extraordinary meaning for the company,

showing the Lanpec’s rich experience in

optimized design as well as the strong

capability and high level in manufacturing, set

completing and testing of oil drilling rig. As the

fi rst compete large oil drilling rig independently

researched and development by the Lanpec,

the ZJ50LDB drilling rig fi lled the blank of the

drill rig manufacturing fi eld and was a major

breakthrough achieved by the company in oil

equipment manufacturing fi eld.

the activity. It also successfully organized related

enterprises to participate in the 2012 China

High-Tech Fair, and the Group and its affi liated

enterprises as well as individuals won several

awards.

Since the beginning of the 12th Five-Year Plan, the Group has accumulatively obtained more than 2,600 authorized patents

2,600among which 500 plus were patents for invention

500

power industry and machinery manufacturing

industry, and was of great importance to

improve the overall level of China’s large

equipment manufacturing industry.

Photo of Lanpec’s fi rst ZJ50LDB drilling rig


Name of standard Formulation or revision

Organizer or participant Level of standard Completion time

Safety requirements for bonded abrasive Revision Organizer National 2012

Rotation test of grinding wheel strength Revision Organizer National 2012

Superhard abrasive materials and nano-diamond Formulation Participant Industrial 2012

Symbol and designation for superhard abrasive and electroplated products

Revision Participant Industrial 2012

Superhard abrasive products and diamond flexible polishing pads

Formulation Organizer Industrial 2012

Standards revised or formulated by Zhengzhou Research Institute for Abrasives & Grinding, 2012

Participating in industrial standard formulation

The SINOMACH vigorously supported its

affiliated enterprises to participate in national

and industrial standardization work, and

conducted research and formulated the

“Implementing Measures of SINOMACH for

Financial Support to Participate in Formulation/

Revision of Standards (Pilot).” In 2012, the Group

provided financial support for 25 affiliated

enterprises to participate in 306 national

and industrial standards, among which the

proportion of standards mainly formulated or

revised by affiliated enterprises of the Group and

the national standards formulated or revised by

affiliated enterprises of the Group both reached

more than 70 percent.

The SINOMACH undertakes more than 300

scientific and technological projects of the

Central Government and local governments such

as the National “863” Project and the National

Key Technology R&D Program, organizes and

participates in the formulation and revision of

500 plus national and industrial standards, wins

more than 200 awards at provincial/ministerial

level or above for various achievements, and

issues 1,000 plus research paper annually. For

many years in a row, the yearly increase of

authorized patents has reached 100 items. The

Group also made great contributions for China’s

industrial and national standardization by

actively participating in standardization activities

organized by trade associations and releasing

information of industrial standards in a timely

manner.



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Design, manufacturing and maintenance of large pressure equipment under extreme conditions

The “Design, manufacturing and maintenance

of large pressure equipment under extreme

conditions”, a key project of the National

High-tech R&D Program (863 Program) in the

11th Five-Year Plan period, undertaken by

the SINOMACH’s Hefei General Machinery

Research Institute was successfully passed

the acceptance check of the Ministry of

Science and Technology (MOST), and was

recommended by the MOST as one of

the highlight achievements in advanced

manufacturing fi eld during the 11th Five-

Year Plan period. Catering to national major

project construction such as ten-million-ton

oil refi ning, million-ton ethylene, and LNG

gathering and transportation projects, and

centering on China’s current situations of

low domestic manufacturing level of large

and key pressure equipment, disconnection

between the design & manufacturing and

utilization & management, and inadequate

maintenance level, the project, with the

achievement of domestic manufacturing

level and safe operation as overall objective,

conducted research on the risk identifi cation,

the life prediction, as well as the risk- and

life-based design, manufacturing and

maintenance technologies under extreme

conditions such as high/low temperature,

complicated corrosion and super large

volume. This key project established nine risk

assessment or life prediction technological

methods, realized domestic manufacturing

of seven key equipment, constructed online

monitoring, diagnosis and early warning

platform for the safety performance of

equipment under extreme conditions,

applied to nearly 100 installations of more

than 50 engineering companies in such

fi elds as million-ton ethylene, LNG gathering

and transportation, large coal chemical

and large acetic acid, provided long-life

and high-reliability technological products,

resolved many major technological problems

in terms of domestic manufacturing and

safety guarantee of key equipment, and

achieved good economic and social benefi ts.

The research result has adopted by several

national and industrial standards, marking

China’s pressure vessel has taken the lead to

enter into the new era of risk- and life-based

design and manufacturing, and playing an

important role in guiding and driving the

industrial progress.

The Acceptance Meeting of “Design, manufacturing and maintenance of large pressure equipment under extreme conditions”

Panarama of Million-ton Ethylene Tank Field, Hefei General Machinery Research Institute


According to the report to the 18th CPC National Congress, China will vigorously promoted ecological progress, constructing a “beautiful China” featuring harmonious development between man and nature. The SINOMACH attached great importance to environmental protection and low-carbon development, actively promoted the overall construction of green industry chain, completed green management system, effectively implemented green manufacturing, insisted on green development, and practiced green offi ce concept, making contributions to build “green-focused SINOMACH,” boost environmental protection and low-carbon development of machinery manufacturing industry, and promote the construction of an environmentally-friendly society.

Green-Focused SINOMACH -- Practicing environmental protection and low-carbon concept

In 2012, the total energy consumption decreased 5.3 percent from a year earlier

5.3

In 2012, the SO2 emissions were down 22 percent

22

In 2012, the comprehensive energy consumption for 10,000 yuan of output value (current price) was down 5.55 percent

5.55


SINOMACH’s green management system

R&D and manufacturing of machinery equipment, project contracting, and

trade and services

Three major systems of energy-saving and emission

reduction of SASACISO 14000

Green design

Green manufacturing

Green application

Three major systems of organizational

management, statistics & monitoring, and

evaluation of energy-saving and emission

reduction

Energy-saving and environmental

protection in the whole process of product design,

manufacturing, use, scrap and recycling

1. Perfecting green management systemThe SINOMACH strictly implemented the three major systems of energy-saving and emission reduction

of the SASAC, abided by various requirements of ISO 14000, focused on green and environmental

protection work in the whole process of product design, manufacturing, use, scrap and recycling, formed

green management system with SINOMACH characteristics, and provided support and guarantee for in-

depth promotion of the “green-focused SINOMACH.”

The SINOMACH completed the construction of organizational, statistics and monitoring, and evaluation

systems of energy-saving and emission reduction, enhanced the management foundation of energy-

saving and emission reduction, established working group for energy-saving and emission reduction,

formulated “Implementing Plan for Energy-Saving and Emission Reduction,” signed responsibility

contracts with units at various levels, set up incentive system for energy-saving and emission reduction,

promoted overall construction of green industry chain, and fostered the brand image of “green-focused

SINOMACH.” In 2012, the total energy consumption decreased 5.3 percent from a year earlier.

SINOMACH’s green management system of whole industry chain

In 2012, the total energy consumption decreased 5.3 percent from a year earlier.

5.3



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Green management organization

Adjusted the personnel of the SINOMACH’s leading group for energy-saving and emission reduction, increased staff of the energy-saving and emission reduction offi ce, and future clarifying the respective responsibility;

Held the SINOMACH’s wok conference on energy-saving and emission reduction, analyzed and studied the situation of energy-saving and emission reduction, deployed key work on energy-saving and emission reduction, organized experience exchange and results sharing workshop on energy-saving and emission reduction.

Green management institutions

Revised “Interim Measures for Supervision and Management of Energy-Saving and Emission Reduction of the SINOMACH,” and issued “Interim Regulations for Statistics and Monitoring of Energy-Saving and Emission Reduction of the SINOMACH” and other institutional documents, realizing managerial closed-loop and promoting the Group’s energy-saving and emission reduction management work.

Green management measures

Completed the statistics and monitoring system of energy-saving and emission reduction, enhanced the statistics and monitoring of energy consumption and pollutants in the production and operation processes, strengthened the basic work of measurement and machine account, and focused on process management and dynamic monitoring;

Disassembled the SINOMACH’s objectives and tasks on energy-saving and emission reduction, and signed responsibility contracts on energy-saving and emission reduction with 43 secondary affi liated enterprises.

Green management eff ect

The SO2 emissions were 981.2242 tons, down 22 percent from a year earlier; the reduction amount of COD emissions was 340.8658 tons, which was lower than that of the same period last year.

Constructing comprehensive management information system on energy-saving and emission reduction

SINOMACH's green management system

In March, 2012, the SINOMACH launched

the project of constructing “Comprehensive

management information system on

energy-saving and emission reduction.”

The system used the internal WAN platform

of the SINOMACH to build information

system platform covering data reporting,

comprehensive management, statistics and

analysis of energy-saving and emission

reduction of the affi liated enterprises

of the Group at all levels. Based on the

statistics, monitoring and analysis of energy

consumption and pollutant emissions of

affi liated enterprises of the Group in their

operating activities, the system further

improved the management level of energy-

saving and emission reduction of the

SINOMACH and its affi liated enterprises.

Interface of comprehensive management information system on energy-saving and emission reduction


2. Implementing green design concept

The SINOMACH attached great importance to

the construction of “green-focused SINOMACH,”

strictly abided by the green design concept

of ISO 14000 in product design process, and

integrated energy-saving and environmental

protection concept into every link of product

design. The Group chose clean production

materials where possible, utilized natural

lighting and wind to reduce energy wastage,

improved comprehensive utilization rate of raw

material and energy, worked hard to do the

work of waste recycling and reusing, reduced

the comprehensive energy consumption per

10,000 yuan of output value, per 10,000 yuan

of operating revenue, and per 10,000 yuan of

value-added, and cut down the emissions of

SO2 and COD. In 2012, the SO2 emissions were

981.2242 tons, down 22 percent from a year

earlier; the reduction amount of COD emissions

was 340.8658 tons, which was lower than that of

the same period last year.

In 2012, the comprehensive energy consumption

for 10,000 yuan of output value (current price)

was 0.0783 TCE/10,000 yuan, down 5.55 percent

from a year earlier; the comprehensive energy

consumption for 10,000 yuan of operating

revenue (current price) was 0.0072 TCE/10,000

yuan, down 6.49 percent year-on-year; the

comprehensive energy consumption for 10,000

yuan of value-added (current price) was 0.1257

TCE/10,000 yuan, down 7.84 percent compared

the same period last year.Tips: Green Design

Green design is also known as

ecological design, design for

environment, or environmentally

conscious design. In the whole

lifecycle of products, green design

focused on their environmental

properties (disassemblability,

recyclability, maintainability and

reusability, and so on) and took

these properties as design objective,

guaranteeing the functions, service

life, quality and other requirements

of products while meeting the

demand of environmental objective.

The principle of green design is

the “3R” principle (i.e., reduce,

reuse and recycle), reducing

environmental pollution, decreasing

energy consumption and reusing or

recycling of products and its parts

and components.

In 2012, the SO2 emissions were down 22 percent from a year earlier

22the comprehensiveenergy consumption for10,000 yuan of output value(current price) was down 5.55 percent from a year earlier

5.55

Comprehensive energy consumption for 10,000 yuan of value-added

Comprehensive energy consumption for 10,000 yuan of output value

20102010 20122012 20112011

0.13640.0829

0.12570.0783

0.16370.0986

Unit: TCE/10,000 yuan

Comprehensive energy consumption for 10,000 yuan of operating revenue

2010 20122011

0.0077 0.0072

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IPPR constructs green hospital

In 2012, the design project of the flagship

of medical field – the Hainan Branch of the

Chinese PLA General Hospital was completed.

The effective, comfort, safe, green and energy-

saving hospital environment contributed

a lot for the off-site construction of the

Chinese PLA General Hospital, maintaining

and boosting the brand image of China IPPR

International Engineering Corporation (IPRR)

in medical facility construction.

The SIPPR Engineering Group Co., Ltd.

(SIPPR) undertook the relocation project

of the Sinosteel Xi’an Machinery Co., Ltd.,

systematically designing the secondary

recovery system for flue gas waste heat

of industrial furnaces. The system utilized

discharged waste heat to make hot water

at 70-120 Celsius degree, and then make

hot water for daily use or heating return

water for heating installation in winter,

improving the temperature of heated water

and reducing operating cost, meanwhile, the

temperature of gas discharged was decreased

to no more than 150 Celsius degree, achieving

the objective of energy-saving and emission

reduction as well as cost cutting. The SIPPR

was the only machinery manufacturing

enterprise to be selected to the second batch

of national circular economy experimental

units.

The large-scale public buildings of Jincheng

Times Square undertaken by the SIPPR

Engineering Group Co., Ltd. (SIPPR) adopted

abundant energy-saving designs: using

external wall insulation practice – the

thermal performance indicators of building

envelope all met the criteria of national

and local regulations on energy-saving

standards of public buildings, adopting

independent and subentry measurement for

energy consumption of cold and heat source,

transmission and distribution system and lights

of each building; the stair lighting of high-

rise buildings adopted LED light source, and

utilized photovoltaic power system to supply

power; the residential inground swimming

pools adopted air source heat pump unit

to achieve heating cycle, reduce equipment

power consumption and save energy; adopted

reclaimed water recovery process and built

rainwater tank at basement, using these

water for greening purpose after filtration

treatment.

Relocation project of Sinosteel Xi’an Machinery

Large-scale public buildings of Jincheng Times Square


3. Promoting green production practicesThe SINOMACH made special efforts to construct the operation and production concepts of “energy-

saving and emission reduction” and “low-carbon development.” Relying on the strong scientific research

capability, the Group worked hard to conduct the green-oriented renovation of production processes

and research of energy-saving and environmental protection technology in strict accordance with the

three major systems of organizational management, statistics and monitoring, and evaluation of energy-

saving and emission reduction, and developed environmental protection processes and technologies,

making positive contributions for the construction of “beautiful China.”

Green process

The SINOMACH adopted environmental

protection process plan, actively conducted

energy-saving renovation and upgrade of

production line, promoted the utilization of

energy-saving equipment and lamps, enhanced

clean production assessment, and strengthened

the pollutant disposal such as waste water and

waste gas, effectively implementing green

production practices.

YTO Group Corporation Co., Ltd. conducts upgrade and renovation project

In 2012, the SINOMACH’s YTO Group Corporation Co., Ltd. completed the appraisal of the construction project of evaporative pattern casting production line and the casting pollution treatment project, planning to invest ten million yuan to treat 17 items of casting pollution. The implementation of

the projects will produce a great saving of resources, and reduce the pollutants of waste sand and smoke dust. At the same time, it focused on the project of replacing cupola furnace with teeming furnace, eliminating six backward cupola furnaces, which reduced the emissions of sulfur dioxide at the source.



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Research and development of clean and efficient complete equipment of sand conditioning

With independent intellectual property rights, the clean and efficient complete equipment of sand conditioning featuring high efficiency, energy-saving, and environmental protection was Implemented and developed by the SINOMACH’s Jinan Foundry and Metalforming Machinery Research Institute Co., Ltd.

Research and Application of green building core technology

Implemented by the SINOMACH’s China IPPR International Engineering Corporation; led by green building core technology featuring energy conservation, water saving and indoor and outdoor environmental protection, the project achieved 65 percent of energy efficiency for old buildings and, for new buildings, on the basis of 65 percent of old buildings, accomplished another 21.5 percent of energy efficiency; for public buildings, saved 20kg/m2.a of standard coal and, for residence, saved 1.4kg/m2.a of standard coal.

Research on key technology of ground-coupled heat pump system in loess areas

Implemented by the SINOMACH’s China United Engineering Corporation, the project carried out research on design parameters of ground heat exchanger system, backfill materials, backfill detection method and the optimization of ground-coupled heat pump system in loess areas, providing references and application technological support for ground-coupled heat pump system engineering in similar geological conditions.

Research and development of key technology and equipment for corn harvest and red pepper planting

Implemented by the SINOMACH’s Chinese Academy of Agricultural Mechanization Sciences, the project improved the mechanization level of corn harvest and red pepper planting, and resolved the problem of white pollution caused by membrane transplanting.

R e s e a r c h o n k e y t e c h n o l o g y o f complementar y energy rec ycl ing of once -through seawater and its demonstration applications

Implemented by the SINOMACH’s Tianjin Design & Research Institute of Electric Drive Co., Ltd., the project utilized seawater for cooling of thermal power station and took full advantage of energy of cooling seawater before discharging into the sea; this is a truly green and environmental protection project, achieving the goal of low-carbon, environmental protection, no pollution and zero-emission.

Technology and equipment of coupling adsorption mercury removal by flue gas circulating fluidized bed

Implemented by Harbin Power System Engineering & Research Institute Co., Ltd. of China National Electric Engineering Co., Ltd. under the SINOMACH, the project achieved systematic demercuration efficiency of above 90 percent, and when the molar ratio of Ca/S is below 2.5, the desulphurization efficiency would reach more than 95 percent.

Environmental protection S&T innovationThe SINOMACH firmly established the concepts

of “energy-saving and emission reduction” and

“low-carbon development,” actively promoted

the construction process of “green-focused

SINOMACH,” accelerated the building of energy-

saving technological innovation platform, set up

“Alliance for ice storage technology application

of the SINOMACH,” built industrialization

demonstration projects of new energy-saving

and emission reduction technologies, and

supported the R&D, application and promotion

of science and technology of environmental

protection. In 2012, the Group provided financial

support for six scientific and technological

foundations to carry out research on scientific

and technological innovation of environmental

protection, devoting a total of 9.3 million yuan,

which brought along 44.85 million yuan of

project investment and achieved nice effect of

environmental protection.

In 2012, the Group provided financial support for six scientific and technological foundations to carry out research on scientific and technological innovation of environmental protection, devoting a total of 9.3 million yuan

9.3 which brought along 44.85 million yuan of project investment

44.85


4. Boosting green application promotionThe SINOMACH attached great importance to

the construction of “green-focused SINOMACH,”

integrating green and environmental protection

concept into such fields as product development

and engineering project construction. The

energy-saving and environmentally-friendly

products the Group researched and produced

such as the continuous press demonstration

production line and the engineering projects

it built in accordance with the international

and domestic requirements of environmental

protection such as the water resource utilization,

sewage treatment and waste disposal, making

Environmentally-friendly product development

The SINOMACH focused on the transformation

of scientific and technological achievements,

actively promoted the application of

environmental protection technologies in

various fields, issued related policies, formulated

relevant regulations, set up leading group to

supervise and evaluate the transformation rate

of science and technology of environmental

protection, and boosted the development and

application of environmentally-friendly products.

Environmental protection engineering projects

The SINOMACH attached importance to energy-

saving and environmental protection and

actively promoted and delivered the energy-

saving and environmental protection concept

to its clients. The Group vigorously took the use

of sophisticated energy-saving technologies,

processes and materials, tried the best to

construct environmentally-friendly engineering

projects for its clients such as green buildings,

integrated gasification combined cycle power

generation and garbage burning power stations.

great contributions to the energy-

saving and environmental

protection cause, and devoting itself

to the construction of “beautiful

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Energy-saving product recognized

In 2012, the 100Kw-500kW three phase large

power photovoltaic inverter developed by

the SINOMACH’s Tianjin Design & Research

Institute of Electric Drive Co.,Ltd. realized zero

voltage ride through (ZVRT), obtaining the

“Golden Sun Certificate.”The energy-saving

and environmentally-friendly industrialization

Large capacity, high performance special industrial power source installation and its key technology

The performance of the “Large capacity and

high performance special industrial power

source installation and its key technology”

developed by the SINOMACH’s China National

Electric Apparatus Research Institute Co., Ltd.

increased by one to three times compared to

Energy-saving products boost industrial energy conservation

The high efficiency resistance-free pulse

power source, micro hole processing machine

tool (for processing nozzle hole to meet

the Euro III emission standard), numerical

control tyre molding machine (for processing

electrospark of precision radial tyre

mold), high efficiency electrospark milling

equipment, and anode-mechanical cutting

equipment developed by the SINOMACH’s

Suzhou Electromachining Machine Tool

SIPPR achieved China’s first green industrial building with three-star design label

The engineering project on consulting

and design of the newly-built factory

of the BlueScope Buildings undertaken

by the SINOMACH’s SIPPR Engineering

Group Co., Ltd. (SIPPR) was successfully

passed the experts’ appraisal on August

15, 2012, becoming China’s first green

industrial building with three-star design

label. The project could save operating

cost of 960,000 yuan per year, realizing the

“zero breakthrough” in terms of green

industrial building appraisal, which is of

great importance for accelerating the

construction of consulting system for green

industrial building, speeding up the research

on appraisal system for green industrial

CNEEC constructs garbage burning power station

As an engineering contractor, the SINOMACH’s

China National Electric Engineering Co., Ltd.

(CNEEC), who attached importance to the

development of low-carbon economy and

the exploitation of environmental protection

and energy conservation field, has signed

contracts including the Thailand’s TPI PP

60MW garbage burning and 30MW cement

kiln waste heat power station project,

consisting of sorting garbage burning power

generation and cement kiln waste heat

power generation. The project reduced

the local landfill occupation, achieved the

comprehensive utilization of garbage burning

residues in cement production, and fully

recycled the waste heat in cement production

process, producing profound significance

to the local energy conservation and

environmental protection.

product adopting IGBT device and air-cooling

technique developed by the project of “High-

efficient and energy-saving PWM eliminator

supply engineering research” improved the

product manufacturing quality and could

substitute imported product completely,

winning recognition of customers.

like products in terms of comprehensive result

of energy-saving and power grid efficiency.

The hi-tech equipment is ideal for enterprises

in China’s high energy-consuming electrolytic

industry to realize the goal of energy-saving

and emission reduction.

Research Institute Co., Ltd. effectively

improved the utilization rate of power

energy, making contributions for energy-

saving and emission reduction of related

industries. These kinds of equipment also

increased the processing efficiency of precious

metals featuring high-temperature thermal

endurance property, reducing the processing

cost as well as the loss and consumption of

precious metal materials.

building, conducting research on advanced

technologies for green industrial building,

and promoting the transformation from

engineering design to green design.


Water-saving Enhancing routine maintenance and management of water-using equipment; regularly inspecting and changing the aged water supply line; changing and using water-saving equipment.

Power-savingChanging and using LED energy saving lamp; setting appropriate air-conditioning temperature; rationally using illumination tools; reducing the use of elevator.

Oil-savingConducting centralized and unified management of service vehicles; advocating green commuting; establishing machine account for service vehicles; setting up statistical system for monthly oil consumption.

Office supplies-saving

Promoting OA system; conducting duplex printing; recycling and disposing used newspaper, books and periodicals; implementing garbage classification.

5. Practicing requirements of green officeThe SINOMACH integrated green and

environmental protection concept into the

Group’s day-to-day operation, advocated green

and low-carbon office practices, organized green

and environmental protection publicity and

training activities, and conducted green public

Adhering to green and low-carbon office practicesThe SINOMACH fostered the green office

concept, creating conservation-minded

environmental atmosphere.

Strengthening training and publicity of environmental protectionThe SINOMACH fully promoted the “National

Implementing Measures for Energy-Saving and

Emission Reduction during the 12th Five-Year

Plan Period,” carried out publicity week activities

themed with “Energy-saving & low-carbon, and

green development,” held the “2012 energy-

saving publicity week knowledge popularization

contest,” conducted the “World Earth Day”

energy-saving activity, made presentation boards

to publicize energy-saving and environmental

protection knowledge, and conducted seminars

for green and low-carbon publicity, improving the

energy-saving and emission reduction awareness

of all the employees.

welfare activities, instilling the low-carbon

and environmental protection concept

into the minds of employees.



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2012 knowledge contest on energy conservation

In July, 2012, the “2012 Energy-Saving

Publicity Week Knowledge Popularization

Contest” organized by the SINOMACH’s

Business Development Department successfully

concluded. Based on the well organization

of the Group’s affiliated enterprises, nearly

20,000 employees participated in this activity,

collecting 18,175 contest answer sheets.

Through this contest, the employees of the

Group learned energy-saving and emission

reduction knowledge, and improved their

own awareness of energy-saving and emission

reduction, playing a positive role in promoting

enterprises to effectively implement energy-

saving and emission reduction work.

CAMCE conducts environmental protection by various means

Taking full use of the corporate publications,

website, presentation board, and closed circuit

television (CCTV), the SINOMACH’s China CAMC

Engineering Co., Ltd. (CAMCE) organized and

carried out content-rich publicity activities on

power-saving, oil-saving, water-saving, and

environmental protection in various forms,

popularizing energy-saving and emission

reduction knowledge.

Small actions promote environmental protection

In 2012, SINOMACH Capital Management

Corporation conducted identification

of environmental factors for its newly-

decorated office in accordance with ISO 14001

Environmental Management System (EMS),

established a mechanism covering product

procurement, use and recycling to reduce

pollution resulted from waste toner cartridges

and batteries, and adopted the so-called “old

for new scheme” to strictly control the use

of toner cartridge and battery, realizing 100

percent of recycling and disposal. Recycling collection box for waste batteries


Happiness-Focused SINOMACH -- Building Corporate Citizenship

Adhering to “Put people fi rst” is the core value of constructing “happiness-focused SINOMACH.” Th e SINOMACH stressed the sharing of corporate development achievements with the society, constantly fostered the employee development, strengthened safety production, carried out mutual benefi cial cooperation with stakeholders, strived to realize the constant win-win development between the enterprise and the community, and committed to build a good image of corporate citizenship.

In 2012, the number of accidents resulted in minor injuries decreased by 58.3 percent

58.3

By the end of 2012, the SINOMACH has owned a total of 109,402 employees

109,402

In 2012, the labor contract signing rate of the Group and its affi liated enterprises for regular staff reached 100 percent

100


人

人

1. Fostering employee developmentThe SINOMACH effectively implemented the

concept of “Development is not only carried

out by employees, but for employees,” focused

on humanistic care, fairness and justice,

safeguarding rights and interests of employees,

promoted democratic management, and

achieved the mutual development between

the enterprise and employees. The Group

also paid attention to learning and training

activities for employees, paved the way of career

development, enhanced constant capability

improvement of employees, conducted

diversified recreational and sports activities,

cared for employees with difficulties and

retirees, and improved the happiness index of

employees.

Overview of employeesBy the end of 2012, the SINOMACH has owned a

total of 109,402 employees. Of those employees,

93,660 people were in-service employees, and

of the in-service employees, 30,375 people

were female employees, and 8,461 were newly-

recruited employees.

Safeguarding rights and interests of employees

The SINOMACH abided by the “Company Law of

the People's Republic of China,” the “Labor Law

of the People's Republic of China” and other

laws and regulations, safeguarding the lawful

rights and interests of employees in such aspects

as employment, compensation, vocation and

social security. In 2012, the labor contract signing

rate of the Group and its affiliated enterprises

for regular staff reached 100 percent.

The SINOMACH constantly completed the

enterprise’s democratic management, and

actively construct harmonious labor relations. In

2012, 100 percent of the affiliated enterprises

at various levels of the Group have set up trade

unions.

By the end of 2012, the SINOMACH has owned a total of 109,402 employees

109,402Of those employees, 93,660 people were in-service employees

93,660In 2012, the labor contract signing rate of the Group and its affiliated enterprises for regular staff reached 100 percent

100

The SINOMACH's China National Heavy Machinery Research Institute Co., Ltd.

held the fourth session of the sixth employee

representative congress



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Rights and interest of employees Responsibility performed by SINOMACH in 2012

Right of equal employment

The SINOMACH offered equal employment right and employment opportunities for workers, focusing on the employment right of socially disadvantaged groups. In 2012, the SINOMACH’s Hefei General Machinery Research Institute was selected as Anhui advanced collective for promoting employment of the disabled.

Right to take rest and leisure

In accordance with national regulations and combining with the enterprise’s actual situations, the SINOMACH explicitly stipulated the casual leave, sick leave, annual leave, home leave, marital leave, maternity leave and funeral leave, fully protecting the employees’ right to take rest and leisure.

Right to obtain compensation from work

Adhering to the distribution principle characterized by the combination of protective and incentive measures, the SINOMACH established regulatory corporate compensation system. By the end of 2012, there were no wage arrears happened to employees by the Group and its affiliated enterprises.

Right to enjoy social security and other benefits

In 2012, the SINOMACH’s coverage of the so-called “five insurances and one fund” (i.e., the endowment insurance, medical insurance, unemployment insurance, employment injury insurance, maternity insurance and housing provident fund) reached 100 percent. Also, the Group actively promoted the enterprise annuity work, and more than 60 percent of the secondary affiliated enterprises participated in enterprise annuity program, and the proportion of employees participating in this program reached 40 percent.


The SINOMACH’s China National Electric Apparatus Research Institute Co., Ltd. (CEI) successfully obtained the expert project of high-level overseas talent introduction program implemented by the Organization Department of the CPC Central Committee, introducing Mr. Derek Johns, world-class electric appliances standard expert and chair of IEC Technical Committee (TC) 61, to the CEI, improving the industrial test standard authorization and lifting the independent innovation technologies to international advanced level.

Fostering employee developmentThe SINOMACH actively broaden the talent

introduction channel, paved the way for career

development of employees, advocated equal

employment opportunities, continuously

perfected evaluation system. At the beginning

of 2012, the SINOMACH conducted the fi rst

evaluation to its senior executives. At the end

of 2012, the Group successfully completed the

regular election and the open recruitment work

in accordance with the requirements of the talent

selection mechanism of “changing the term of

offi ce every three years and conducting evaluation

once a year.” The SINOMACH promoted the

management team construction by diversifi ed

talent cultivation plans and multi-level and multi-

channel rotation training mode, and actively built

the “four fi rst-rate” staff team.

Photo of Derek Johns,a world-class electeic applinces standard expert

China Machinery Engineering Corporation

conducted expanding training

for the newly-joined employees in 2012

In 2012, the SINOMACH revised and perfected the “Management Measures for Senior Executive Evaluation of the China National Machinery Industry Corporation” and “Management Measures for Senior Executive Compensation of the China National Machinery Industry Corporation” in accordance with the requirements of the SASAC of the State Council.



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SINOMACH’s talent cultivation plan

SINOMACH’s employee training system

Conducted cadre communication between the Group and its superior organization, between the headquarters and affi liated enterprises of the Group, and between the affi liated enterprises.

In 2012, the SINOMACH conducted one training for successor talents, one training for talents born in the 1970s, one training for leaders of affi liated enterprises, two trainings for marketing personnel, one training for department heads and employees of various departments of the headquarters and the heads of human resources of some affi liated enterprises, and one training for directors and supervisors of the Group.

Conducted trainings for newly-recruited employees; carried out exchange and cooperation with leading universities both at home and abroad such as Stanford University and Peking University.

Cultivating reserve candidates for leading cadres at various levels

Cultivating marketing personnel, high-level scientifi c and technological talents, youth backbone personnel

Cultivating specialized backbone personnel

Focusing on employee care

The SINOMACH carried out extensive recreational

and sports activities for employees, organized

employees to conduct physical examination

regularly, provided diversifi ed activities for female

employees, visited and extended regards to old-

aged party members, employees with special

diffi culties, united front work people and model

workers, and offered earnest service for retired

cadres. In 2012, the Group clearly put forward

the establishment of the “Warm workers’ home,”

winning several honors with the joint efforts

made by the Group’s affi liated enterprises such as

the national role model of workers’ home.

Caring for employees working abroad

In view of the actual situations, the

SINOMACH paid attention to the physical and

psychological health as well as the quality of

life of employees working abroad, striving to

improve their well-being. China Machinery

Engineering Corporation invited a director

of the medical department under the Beijing

Friendship Hospital and a psychological

consultant of the Rennengda Career Research

Center to come to the construction sites

in Belarus, conducting medical services for

employees, such as medial examination,

medical consulting, diesase diagnosis and

treatment, psychological assessment, and

psychological counseling.

SINOMACH’s China Machinery Industry Construction Group Inc. (SINOCONST) held wedding ceremony held for employees at the project site in Indonesia

Communication of and post rotation for leading cadres

Talent special training program

Employee integration training program

Ten-hundred-thousand talent program

Elite development program for people born in the 1970s and 1980s

Professional backbone personnel cultivation plan


2. Strengthening safety productionThe SINOMACH always adhered to the concept of “Put people first and safe development,” focused on

prevention first, regulatory enhancement and responsibility fulfillment, fully promoted the construction

of safety production system, practically performed entity responsibility of corporate safety production,

completed emergency plan for accidents and incidents, and strengthened safety production awareness,

so as to provide a safe and reliable working environment for employees and achieve the objective of

constructing a happiness-focused SINOMACH.

Perfecting safety production systemSafety production system is the important basis

for guaranteeing the orderly implementation of

safety production. The SINOMACH established

organization and governing body for safety

production, supervision and management body

for safety production, and emergency and

command body for safety production from top to

bottom, and arranged full-time (part-time) duty

personnel to conduct safety production work

under the leadership of department directors.

By the end of 2012, there was no accident

happened at the level of serious accident or above,

and no accident resulted in fatality or serious

injuries; the number of accidents resulted in minor

injuries and the direct economic loss decreased by

58.3 percent and 79.5 percent respectively year-

on-year; there was no unexpected labor disputes

with significant influence happened aboard.

2010 20122011 2010 20122011

4543

48

0.0118

0

0.0236

By the end of 2012, there was no accident happened at the level of serious accident or above, and no accident resulted in fatality or serious injuries

0there was no unexpected labor disputes with significant influence happened aboard

0the number of accidents resulted in minor injuries and the direct economic loss decreased by 58.3 percent

58.3and 79.5 percent respectively year-on-year

79.5Accident fatality rate per 1,000 employees Number of persons suffering minor injury

Unit: ‰ Unit: person



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Accidents by type Unit 2007 2008 2009 2010 2011 2012

Number of major safety accidents case 0 0 0 0 0 0

Accident fatality rate per 1,000 employees ‰ 0.0175 0 0.0114 0.0236 0.0118 0

Death toll person 1 0 1 2 1 0

Number of persons suff ering serious injury person 4 2 2 0 2 0

Number of persons suff ering minor injury person 81 72 45 48 45 43

Supervision and management

body for safety production

Organization and governing body for safety production

Emergency and command body for safety production

SINOMACH’s safety production management system

SINOCONST’s Certifi cate of Conformity of Occupational Health and Safety Management System Certifi cation

GMERI’s Certifi cate of BS OHSAS 18001 : 2007 Occupational Health & Safety

Standardization of safety production

The SINOMACH actively promoted the

general engineering contractors to establish

occupational health and safety management

system and the manufacturers to initiate

safety production standardization. Relying

on the establishment, operation and

improvement of management system,

the Group integrated safety production

into corporate day-to-day production and

operation activities, regulating and enhancing

the safety management of production and

operation processes. By the end of 2012,

a total of 14 general contractors of the

Group have established occupational health

and safety management system and 12

manufacturers of the Group have passed

the certifi cation for safety production

standardization.

GMERI’s Certificate of Work Safety Standardization


Safety production

All staff participation

(horizontal)

Implem

entation at all levels (vertical)

Safety production responsibility system

SINOMACH’s 2012 annual examination and evaluation

meeting on responsibility objective of safety production

for affiliated enterprises

Enhancing safety production managementAdhering to the guidelines of “Safety paramount,

prevention first and integrated management”

and insisting on the principle of “Who takes

charge, who takes responsibility,” the SINOMACH

strengthened responsibility entity and enhanced

safety foundation. The Group broke down the

targets and responsibilities of safety production

to various departments, each position and every

employee by signing responsibility contracts with

affiliated units at various levels, truly realizing

the all-around coverage of safety production

responsibility system from side to side and from

top to bottom, which guaranteed the effective

implementation of safety production and

promoted the enterprises to practically perform

safety production responsibility.

By the end of 2012, the Group has deployed,

organized and carried out a total of 37 self-

inspection, cross-inspection and on-site

supervision and inspection activities, among

which the Safety Production Department of the

Group organized and carried out nine inspection

activities, conducting safety inspection to 15

production sites and general contracting projects

of 23 enterprises. The affiliated enterprises carried

out 2,507 special inspection activities on safety

production, investigating 17,070 hidden dangers

of safety production, and the rectification rate

reached over 99 percent. By the end of 2012, the

SINOMACH has invested a total of 304.56 million

yuan for safety production.

The SINOMACH comprehensively enhanced

safety production management, especially

the safety production of general contracting

projects, focusing on the safety management

of construction sites of engineering contracting

projects, constructing contracting projects and

international engineering contracting projects.

In 2012,the affiliated enterprises carried out 2,507 special inspection activities on safety production

2,507on safety production, investigating 17,070 hidden dangers of safety production

17,070By the end of 2012, the SINOMACH has invested a total of 304.56 million yuan for safety production

304.56



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SINOMACH’s Beijing Materials Handling Research Institute (BMHRI) carried out first aid training

Completing safety emergency mechanismIn 2012, the SINOMACH revised and released

comprehensive emergency plan for safety

production and overseas unexpected accidents.

The affiliated enterprises completed emergency

system, and organized and carried out category-

based emergency exercises in various forms and

at various levels in accordance with their own

work priorities of safety production emergency

management, further enhancing the emergency

disposal capabilities. By the end of 2012, the

Group has conducted a total of 1,028 emergency

rescue exercises.

Building safety production cultureIn 2012, the SINOMACH carried out “Safety

Production Month” activity themed with

“Scientific development and safe development.”

In accordance with the national, regional and the

industrial requirements of the “Safety Production

Month,” the Group and its affiliated enterprises

conducted a series of publicity and educational

activities at the headquarters, manufacturing

shops and project sites in a down-to-earth

way. These activities included popularization

and education of safety production laws and

regulations, warning education of safety

production accidents, publicity and consulting

day, grassroots team safety building, safety

forum, “Ankang Cup” competition, and youth

demonstration post of safety production, and so

on, creating a good atmosphere of safety culture.

In 2012, the Group held a total of 1,497 trainings

for safety production. The employees of the

Group participating in safety production related

trainings held by other organizations reached

8,153 persons/times, and those participating in

safety production related trainings held by the

Group amounted to 185,729 persons/times.

China Sinogy Electric Engineering Co., Ltd., a subsidiary of China Perfect Machinery Industry Corp., Ltd. carried out knowledge contest on safety

By the end of 2012, the Group has conducted a total of 1,028 emergency rescue exercises.

1,028In 2012, the Group held a total of 1,497 trainings for safety production.

1,497safety production related trainings held by the Group amounted to 185,729 persons/times.

185,729


3. Conducting partner cooperationThe SINOMACH actively strengthened the external cooperation, promoted the industry-university-

research cooperation by establishing strategic cooperation relations with governments and enterprises

both at home and abroad, and deepened the cooperation with financial institutions. Based on the

integrated development of equipment manufacturing, project contracting, and domestic and foreign

trade, the Group boosted the complementary advantages among different parties, achieving resource-

sharing, coordinated development, and mutual benefits.

Jointly building strategic cooperative partnershipIn 2012, the SINOMACH enhanced the regional

cooperation, signed strategic cooperative

agreements with Yunnan, Jiangxi and other

provinces and municipalities, and strengthened

business communications and exchange. Also, the

Group continuously expanded the cooperation

with enterprises in the same industry at home

and abroad, and gave full play to the respective

complementary advantages in such aspects as

technology, human resources, capital, market

and policy, so as to boost the regional economic

development and the prosperity of the industry.

Ren Hongbin, SINOMACH’s chairman of the board of directors met with Li Jiheng, deputy secretary of the CPC Yunnan Provincial Committee, and Governor of Yunnan Province

Opening ceremony of the Joint Cultivation Base for Outstanding

Engineers jointly built by SINOMACH’s SUMEC Group Corporation and Southeast

University

Industry-university-research cooperation & resource-sharingThe SINOMACH attached importance to scientific

and technological exchange and cooperation,

actively carrying out joint research with scientific

research institutes and institutions of higher

learning. Relying on the Group’s resource and

management advantages, it fully exerted the

scientific and technological and talent advantages

to promoted technological innovation and talent

cultivation. By the end of 2012, the Group and its

affiliated enterprises have established strategic

alliances for industrial technological innovation

featuring industry-university-research cooperation

with Tsinghua University, Beihang University, Hefei

University of Technology, and other institutions of

higher learning.

Bank-enterprise cooperation & mutual benefitsThe SINOMACH has established cooperative

partnership with Export-Import Bank of China,

Industrial and Commercial Bank of China,

Bank of China, China Construction Bank, Bank

of Communications, China Export & Credit

Insurance Corporation, and other financial

institutions, and maintained vigorous, sound,

timely and effective communication with

financial institutions, guaranteeing the smooth

operation of the enterprise. In 2012, the Group

expanded the scale of bank credit as well as the

varieties.



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4. Committing to community participationSeeing the building of good external environment as important pillar for an enterprise’s constant

development, the SINOMACH actively constructed globalization- and localization-based harmonious

communities by its own business and technological advantages, and participated in public welfare cause

by various means, sending care and love, benefi ting society, and making the SINOMACH’s happiness to

cover every corner.

Boosting community harmonious developmentBy undertaking projects both at home and

abroad, the SINOMACH earnestly fulfi lled social

responsibility, strived to offer high-quality

products and services for local communities, and

actively promoted the social prosperity of host

countries and regions by means of conducting

infrastructure construction and regional

assistance, solving problems of local communities

and benefi ting the people there.

SINOMACH assists Department of Housing and Urban-Rural of Tibet Autonomous Region

The SINOMACH has been attached great

importance to Tibet assistance work, In 2012,

the SINOMACH’s YTO Group Corporation

donated 30 units of “Dongfanghong”

tractors, which worth about 500,000 yuan.

The Group promoted the development of

economy of this autonomous region.Photo of the scene of the donation ceremony

CAMCE donates for orphanage in Venezuela

Worker representatives from China and

Venezuela of the SINOMACH’s China CAMC

Engineering Co., Ltd. (CAMCE) went to

a local orphanage to donate bed sheets,

slippers, stationery, food and other products.

They also held a small party with children

there, receiving warm welcome and high

appreciation from the orphanage.

CAMCE off ers medical support to sick child of Belarus

In the morning of May 22, 2012,

representatives from the SINOMACH’s China

CAMC Engineering Co., Ltd. (CAMCE) offered

medical assistance to a sick child of Belarus.

Minister Counselor Mr. Senyuta Vadim and

Counselor Mr. Rudy Kiryl of the Embassy of

the Republic of Belarus to China accepted

the money and extended appreciation for

the generosity of the CAMCE on behalf of

the parents of the sick child, hoping that the

CAMCE would make greater contributions

to the friendship and non-governmental

exchanges between the peoples of China and

Belarus.


Earnestly participating in public welfare causeThe SINOMACH actively devoted itself to the public welfare cause, strived to exert its own advantages,

carried out such activities as offering assistance to students and schools, helping and supporting the

poor, conducting emergency rescue and disaster relief, and earnestly performed social responsibility.

Caring for and supporting educationThe SINOMACH always vigorously supported educational cause, and carried out education-supporting

activities by means of donations and directed cultivation.

SINOMACH’s Guilin Electrical Equipment Scientifi c Research Institute Co., Ltd. carried out donation activity for Yinqiao Hope Primary School at Xiyao Village, Longsheng County

SINOMACH’s China Perfect Machinery Industry Corp., Ltd. carried out June 1st donation activity for Children with the theme of “Developing dream and sowing hope”

Helping and supporting the poorThe SINOMACH responded positively to the national poverty alleviation policy, supporting poverty-

stricken areas to overcome poverty, achieve prosperity and improve life quality by mobilizing the Group’s

forces and using its technological and fi nancial advantages.

In September, 2012, the CMEC Comtrans International Co., Ltd. organized donation activity for Xuyong County of Luzhou City in Sichuan Province and Gongshan Dulong and Nu Autonomous County of Nujiang Lisu Autonomous Prefecture in Yunnan Province, donating 953 pieces of clothes and 492 pieces of school supplies.“We have received the donated materials for Qunying Primary School of Qunying Village in Jiancao Miao

Conducting emergency rescue an disaster reliefBy carrying out disaster relief and donation activities, the SINOMACH supported the disaster-affected

areas to overcome diffi culties, actively fulfi lling social responsibility by combining the disaster situation

with the enterprise’s technologies.

Materials transportation of the SINOMACH’s China Machinery Engineering Corporation for disater relief of the “7/21” Beijing rainstorm

Emergency repairing for pipeline in Shiyan Base of the China Mechanical Industrial Second Construction Engineering Company

Autonomous Town, and distributed all of them to students. They are very happy. Many thanks for your help and we hereby extend our appreciation for you on behalf of the students. ”Letter of thanks sent by Bingzhongluo Town Government of Gongshan Dulong and Nu Autonomous County in Yunnan Province, being accompanied by a good wish of “May kind people be blessed with life-long peace”



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Carrying out employee volunteering activitiesThe SINOMACH and its employees vigorously

promoted the volunteer spirit of “Dedication,

fraternal love, mutual aid and progress,” and

improved the sense of responsibility of employees

appreciate and reward the society by actively

organizing volunteering activities such as

“Learning from Comrade Lei Feng,” respecting

the old and caring for the young, and education-

supporting.

Youth volunteer of the SINOMACH were playing together with Children of the “Shepherd's Field Children's Village”

SINOMACH’s China Machinery Industry Construction Group Inc. (SINOCONST) carried out voluntary blood donation activity


Outlook

The year of 2013 is the beginning for the SINOMACT to effectively carry out the spirit of the 18th CPC National Congress, and the key to continuously implement the 12th Five-Year Plan, as well as an important year to thoroughly conduct the building of SINOMACH with five objectives. With the guidance of Scientific Outlook on Development, we will promote the quality-oriented growth in a deep-going way, deepen corporate reform, transform development mode, boost resources integration, enhance innovative promotion, carry out international operation, improve management level, build new competitive advantages, strengthen long-term development momentum, and truly achieve quality-oriented, efficient and sustainable development.

We will spare no efforts to build “responsibility-focused SINOMACH.” In 2013, we will continuously strengthen the responsibility concept, adhere to the core values of “Work together, win together,” enhance social responsibility management, and promote stakeholder engagement, achieving the Group’s economic, environmental and social sustainability.

We will spare no efforts to build “value-focused SINOMACH.” In 2013, we will continuously deepen the product structure adjustment, promote the whole industry chain layout, transform development mode, improve management level, boost resources integration, and bring along the transition and upgrade of machinery industry, supporting the sustainable and rapid development of national economy.

We will spare no efforts to build “Innovation-focused SINOMACH.” In 2013, we will vigorously enhance talent cultivation, increase scientific and technological innovation input, formulate scientific and technological innovation standard, accelerate transformation of scientific and technological products, and complete scientific and technological innovation management system, making the due contributions to China’s intellectual property rights protection and scientific and technological upgrade of mechanical products.

We will spare no efforts to build “green-focused SINOMACH.” In 2003, we will constantly pay attention to the construction of green industry chain, continuously adopt green design concept, employ green process, boost production and accelerate green innovation, striving to promote green achievements sharing and the construction of beautiful China and wonderful world.


We will spare no efforts to build “happiness-focused SINOMACH.” In 2012, we will continuously implement the concept of “Put people first,” focus on production and life of employees, improve safety production level, enhance partner care project building, and support public welfare cause, making contributions to the construction of harmonious enterprise, harmonious community and harmonious society.

Thousands of ships set sail and hundreds of boats compete. Closely centering on the social responsibility strategic positioning of being a widely respected leader for sustainable development in machinery industry, the SINOMACH will join hands with stakeholders to create new brilliant achievements!


Comparative Table with the Global Reporting Initiative (GRI) G3.1 Standards

1. Strategy and Analysis

1.1 Statement from the most senior decision-maker of the organization about the relevance of sustainability to the organization and its strategy

P2

1.2 Description of key impacts, risks, and opportunities P41

2. Organizational Profi le

2.1 Name of the organization P9

2.2 Primary brands, products, and/or services P9

2.3 Operational structure of the organization P9

2.4 Location of organization’s headquarters Title page

2.5 Number of countries where the organization operates, and names of countries with either major operations or that are specifi cally relevant to the sustainability issues covered in the report

P9

2.6 Nature of ownership and legal form P9

2.7 Markets served P32

2.8 Scale of the reporting organization P4-5

2.9 Signifi cant changes during the reporting period regarding size, structure, or ownership Not Applicable

2.10 Awards received in the reporting period P15

3. Report Parameters 3.1 Reporting period (e.g., fi scal/calendar year) for information provided. Title page

3.2 Date of most recent previous report. Title page

3.3 Reporting cycle. Title page

3.4 Contact person for questions regarding the report or its contents. Title page

3.5 Process for defi ning report content. Title page

3.6 Boundary of the report. Title page

3.7 State any specifi c limitations on the scope or boundary of the report. Title page

3.8 Basis for disclosing information on partners, subsidiaries, leased facilities, outsourced operations, and other entities with remarkable infl uence.

Not Applicable

3.9 Data measurement techniques and the bases of calculations. Title page

3.10 Explanation of the effect of any re-statements of informat ion provided in earlier reports, and the reasons for such re-statement.

Title page

3.11 Signifi cant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report.

Title page

3.12 Table identifying the location of the Standard Disclosures in the report. P90-92

3.13 Policy and current practice with regard to seeking external assurance for the report. P93

4. Governance, Commitments, and Engagement

4.1 Governance structure of the organization. P11

4.2 Indicate whether the Chair of the highest governance body is also an executive offi cer. P10

4.3 For organizations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members.

P10

4.4 Mechanisms for shareholders and employees to provide r ecommendations or direction to the highest governance body.

P76

4.5 Linkage between compensation for members of the highest governance body, senior managers, and executives. P78

4.6 Processes in place for the highest governance body to ensure confl icts of interest are avoided. P78

4.7 Process for determining the qualifi cations and expertise of the members of the highest governance body. P78

4.8 Internally de veloped statements of mission or values, codes of conduct, and principles. P16-17

4.9 Procedures of the highest governance body for overseeing the organization’s identifi cation and management of economic, environmental, and social performance.

P23

4.10 Processes for evaluating the highest governance body’s own performance. Not Applicable

4.11 Explanation of whether and how the precautionary approach or principle is addressed by the organization. P2

4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives which the organization subscribes to or endorses.

P85

4.13 Memberships in associations and/or national/international advocacy organizations which the organization holds. P29

4.14 List of stakeholder groups engaged by the organization. P28

4.15 Basis for identifi cation and selection of stakeholders with whom to engage. P2

4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group. P28

4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns.

P28

GRI G3 Standards Index


5. Economic Performance Indicators

EC1 Direct economic value generated and distributed. P4-5

EC2 Financial implications and other risks and opportunities for the organization’s activities due to changes in the macroeconomic environment.

P32

EC3 Coverage of the organization’s defi ned benefi t plan obligations. P78-79

EC4 Signifi cant fi nancial assistance received from government. P52

EC5 Range of ratios of standard entry level wage compared to local minimum wage at signifi cant locations of operation.

Not Applicable

EC6 Policy, practices, and proportion of spending on locally-based suppliers at signifi cant locations of operation. Not Applicable

EC7 Procedures for local hiring and proportion of senior management hired from the local community at locations of signifi cant operation.

P56

EC8 Development and impact of i nfrastructure investments and services provided primarily for public benefi t through commercial, in-kind, or pro bono engagement.

P36-43/p85

EC9 Understanding and describing signifi cant indirect economic impacts, including the extent of impacts (e.g. driving local economic development).

P32/p35/p59

6. Environmental Performance Indicators

EN1 Materials used by weight or volume. P66

EN2 Percentage of materials used that are recycled input materials. Not Applicable

EN3 Direct energy consumption by primary energy source. P66

EN4 Indirect energy consumption by primary source. P66

EN5 Energy saved due to conservation and effi ciency improvements. P69

EN6 Initiatives to provide energy-effi cient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives.

P69

EN7 Initiatives to reduce indirect energy consumption and reductions achieved. P64-66

EN8 Total water drawn by source. Not Applicable

EN9 Water sources signifi cantly affected by draw of water. Not Applicable

EN10 Percentage and total volume of water recycled and reused. Not Applicable

EN11 Location and size of land owned, leased, or managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas.

Not Applicable

EN12 Description of signifi cant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas.

Not Applicable

EN13 Habitats protected or restored. Not Applicable

EN14 Strategies, current actions, and future plans for managing impacts on biodiversity. Not Applicable

EN15 Number of Internation al Union for Conservation of Nature (IUCN) Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk.

Not Applicable

EN16 Total direct and indirect greenhouse gas emissions by weight. P64-66

EN17 Other relevant indirect greenhouse gas emissions by weight. P64-66

EN18 Initiatives to reduce greenhouse gas emissions and reductions achie ved. P64-66

EN19 Emissions of ozone-depleting substances by weight. Not Applicable

EN20 Nitric oxide (NO), sulfur oxide (SO), and other signifi cant air emissions by type and weight. P64-66

EN21 Total water discharge by quality and destination. Not Applicable

EN22 Total weight of waste by type and disposal method. Not Applicable

EN23 Total number and volume of signifi cant spills. Not Applicable

EN24 Weight of transp orted, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annexes I, II, III, and VIII, and percentage of transported waste shipped internationally.

Not Applicable

EN25 Identity, size, protected status, and biodiversity value of water bodies and related habitats signifi cantly affected by the reporting organization’s discharges of water and runoff.

Not Applicable

EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation. P69

EN27 Percentage of products sold and their packaging materials that are reclaimed by category. Not Applicable

EN28 Monetary value of signifi cant fi nes and total number of non-monetary sanctions for noncompliance with environmental laws and regulations.

Not Applicable

EN29 Signifi cant environm ental impacts of transporting products and other goods and materials used for the organization’s operations, and transporting members of the workforce.

Not Applicable

EN30 Total environmental protection expenditures and investments by type. P69



7. Labor Practices and Decent Work Performance Indicators

LA1 Total workforce by employment type, employment contract, and region. P5

LA2 Total number and rate of employee turnover by age group, gender, and region. Not Applicable

LA3 Benefi ts provided to full-time employees P76-79

LA4 Percentage of employees covered by collective bargaining agreements. P76

LA5 Minimum notice period(s) regarding operational changes. P76

LA6 Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs.

Not Applicable

LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and number of work related fatalities by region. P80-81

LA8 Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases.

P83

LA9 Health and safety topics covered in formal agreements with trade unions. P76

LA10 Average hours of training per year per employee by employee category. P78-79

LA11 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managin g career outcomes.

P78-79

LA12 Percentage of employees receiving regular performance and career development reviews. Not Applicable

LA13 Composition of governance bodies and breakdown of employees by category according to gender, age group and other indicators of diversity.

P78

LA14 Ratio of basic salary of men to women by job category. Not Applicable

8. Human Rights Performance Indicators

HR1 Percentage and total number of signifi cant investment agreements that include human rights clauses or that have undergone human rights screening.

Not Applicable

HR2 Percentage of signifi cant suppliers and contractors that have undergone screening on human rights and actions taken. Not Applicable

HR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained.

Not Applicable

HR4 Total number of incidents of discrimination and actions taken. Not Applicable

HR5 Operations identifi ed in which the right to exercise freedom of association and collective bargaining may be at signifi cant risk, and actions taken to support these rights.

P76

HR6 Operations identifi ed as having signifi cant risk for incidents of child l abor, and (core) measures taken to contribute to the elimination of child labor.

P76

HR7 Operations identifi ed as having signifi cant risk for incidents of forced or compulsory labor, and (core) measures to contribute to the elimination of forced or compulsory labor.

P76

HR8 Percentage of security personnel trained in the organization’s policies or procedures concerning aspects of human rights that are relevant to operations.

Not Applicable

HR9 Total number of incidents of violations involving rights of indigenous people and actions taken. Not Applicable

9. Society Performance Indicators

SO1 Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including their entry, operation and exit.

P85

SO2 Percentage and total number of business units analyzed for risks related to corruption. P47

SO3 Percentage of employees trained in organization’s anti-corruption policies and procedures. P47

SO4 Actions taken in response to incidents of corruption. P47

SO5 Public policy positions and participation in public policy development and lobbying. Not Applicable

SO6 Total value of fi nancial and in-kind contributions to political parties, politicians, and related institutions by country. Not Applicable

SO7 Total number of legal actions for anticompetitive behavior, anti-trust, and monopoly practices and their outcomes. Not Applicable

SO8 Monetary value of signifi cant fi nes and total number of non-monetary sanctions for noncompliance with laws and regulations.

Not Applicable

10. Product /Service Responsibility Performance Indicators

PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of signifi cant products and services categories subject to such procedures.

Not Applicable

PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes.

Not Applicable

PR3 Ty pe of product and service information required by procedures, and percentage of signifi cant products and services subject to such information requirements.

Not Applicable

PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes.

Not Applicable

PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction. Not Applicable

PR6 Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship.

Not Applicable

PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsors hip by type of outcomes.

Not Applicable

PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data. Not Applicable

PR9 Monetary value of signifi cant fi nes for noncompliance with laws and regulations concerning the provision and use of products and services.

Not Applicable



Comparative Table with the UN Global Compact’s Ten Principles

The UN Global Compact's ten principles 2012 Performance

Human Rights

Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and

The SINOMACH put people first, protected rights and interests of employees, constructed career growth channel, provided harmonious and safe working environmental for employees, and shared corporate development results with employees.

Principle 2: make sure that they are not complicit in human rights abuses.

The SINOMACH safeguarded lawful rights and interests of employees, offered stable employment opportunities, formulated rational compensation system, broadened career development channel for employees, provided safe and healthy working environment, and actively implemented the localization policy for recruiting overseas employees.

Labor Standard

Principle3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;

The SINOMACH established trade unions at various levels, held regular employee representative congress, and built smooth channel for internal communications.

Principle4: the elimination of all forms of forced and compulsory labor;

The SINOMACH strictly abided by the “Labor Law of the People’s Republic of China,” “Labor Contract Law of the People’s Republic of China,” “Provisions on Collective Contracts” and other laws and regulations. In 2012, the labor contract signing rate for regular staff reached 100 percent. The Group adhered to the equality principle for every employee, guaranteed the laborers shall not be discriminated against in employment for such factors as race, age and gender, prohibited the use of child labor and opposed all forms of forced and compulsory labor.

Principle 5: the effective abolition of child labor; and

Principle 6: the elimination of discrimination in respect of employment and occupation.

Focusing on the promotion of employee representative congress construction and openness in corporate affairs, the SINOMACH actively implemented various rights of employees involving in democratic participation, democratic management, democratic supervision and democratic decision-making, constantly completed equal consultation and collective contract systems, and established and perfected benefit coordination mechanism. As for the transnational operation, the Group always adhered to the equal and non-discrimination employment policies, formulated labor protection rules and measures, carried out local purchasing and community investment, participated in public welfare activities in local communities, and served the local communities and residents by various means and in various forms.

Environment

Principle 7: Businesses should support a precautionary approach to environmental challenges;

Environmental protection relies on the support of a perfect institutional mechanism. The SINOMACH made special efforts to build the “three systems” of energy-saving and emission reduction, enhancing the green management of the Group.

Principle8: undertake initiatives to promote greater environmental responsibility; and

During the 12th Five-Year Plan period, the SINOMACH revised the “Interim Measures for Management of Energy-Saving and Emission Reduction of the SINOMACH,” strengthening the energy-saving and emission reduction system construction. In 2012, the Group offered financial support for six scientific and technological fund projects, and carried out research on environmentally scientific and technological innovation. By the end of 2012, the Group has invested 9.3 million yuan totally.

Principle9: encourage the development and diffusion of environmentally friendly technologies.

The SINOMACH integrated the sophisticated environmentally technologies and processes into the production. With the energy-saving and consumption reduction as goal and the management and technology as approach, the Group realized the control of pollutants and waste in the whole production process, which reduced the pollutants discharge and materials consumption.

Anti-Corruption

Principle10: Businesses should work against all forms of corruption, including extortion and bribery.

Closely centering on the production, scientific research, and operation centers and the stable situation of reform and development and taking the construction of punishment and prevention system as mainline, the SINOMACH promoted the implementation of responsibility system for combating corruption and upholding integrity, deepened efficiency supervision, carried out special supervision and inspection, and enhanced the publicity and education of corruption combating and integrity upholding, playing an positive role in achieving the leap-forward development of the enterprise.


Peng HuagangVice president of the Rating CommitteeVice executive president of the Center

Zhong HongwuLeader of the Rating TeamDirector of the Center

Vice president of the Rating Committee

Rating Report

Rating Report on SINOMACH CSR Report 2012Upon the request of the China National Machinery Industry Corporation (SINOMACH), the Research Center for Corporate Social Responsibility (CSR) under the Institute of Economics of the Chinese Academy of Social Sciences invited experts from Chinese Expert Committee on CSR Report Rating to form rating team to rate the SINOMACH CSR Report 2012 (hereinafter referred to as “Report”).

1. Rating CriteriaThe Guidelines on Corporate Social Responsibility Reporting for Chinese Enterprises (CASS-CSR 2.0) published jointly by the aforesaid Center, the China Enterprise Confederation, the China Petroleum and Chemical Industry Association, the China Light Industry Federation, the Sino-German Corporate Social Responsibility Project, the China WTO Tribune and the China Committee of Corporate Citizenship, and the Standards of China Corporate Social Responsibility Report Rating (2013).

2. Rating ResultsCompleteness (★★★☆)From such perspectives as “Enhancing responsibility management,” “Developing real economy,” “Promoting scientifi c and technological progress,” “Practicing environmental protection and low-carbon concepts,” and “Building corporate citizenship,” the Report disclosed 66.14 percent of core indicators of the machinery equipment manufacturing industry, having certain completeness.

Materiality (★★★★)The Report disclosed “Product innovation,” “Occupational health management,” “Safety production,” “Energy-saving and water conservation,” “Reducing discharge of ‘three wastes’” and other key issues of the industry, having a good materiality.

Balance (★★★)The Report disclosed the number of accidents resulted in minor injuries, the people suffered minor injuries and other negative information, having certain balance.

Comparability (★★★★)The Report disclosed data of 22 key performance indicators for three years in a row, the horizontal comparison data on professional service capabilities of the world’s Top 225 international engineering contractors, and other comparative data, having a relative good comparability.

Readability (★★★★☆)The clear framework, appropriate length and logical expression, the wide use of pictures, data sheets, and fl ow chats, the diversifi ed design style and the expression of terminology in popular and easy-to-understand language made the Report very readable.

Creativity (★★★☆)With brief introduction and key data as opening paragraph of each section, the Report summarized the main contents from a macro view, making it easy for stakeholders to understand the responsibility practices of the enterprise and having certain creativity.

Overall Rating (★★★★)Through evaluation and deliberations, the rating team agreed to rate the SINOMACH CSR Report 2012 as an excellent one with a four-star rating.

3. Suggested Improvements1) To add contents with disclosure of industrial core indicators and substantive issues, improving the completeness and materiality of the Report.

2) To add contents with disclosure of the enterprise’s historical key performance data, improving the comparability of the Report.

Rating Team:Team Leader: Zhong Hongwu, director of the Research Center for Corporate Social Responsibility (CSR) under the Institute of Economics of the Chinese Academy of Social SciencesTeam Members: Yin Gefei, vice president of the China WTO TribuneWei Xiuli, associate professor of the School of Economics and Management under the North China University of Technology


Feedback Form

Respectable Reader,

Thank you very much for taking the time in your busy schedule to read the “2012 SINOMACH Social Responsibility Report.” In

the preparation of the Report, It is hard to avoid flaws and omissions. We earnestly request that you can propose your valuable

opinions and feed them back to us so that we can make continuous improvements on it.

Thank you!

China National Machinery Industry Corporation

December 2012

1. How do you generally evaluate the CSR Report of the SINOMACH?

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2. How has the SINOMACH done in performing market responsibility?

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3. How has the SINOMACH done in performing environmental responsibility?

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4. How has the SINOMACH done in performing social responsibility?

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5. Do you think whether this Report can reflect the significant impacts of the SINOMACH on market, environment and society?

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6. How objective and complete do you think are the information, data and indicators disclosed in this Report?

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7. How logically do you think this Report has been prepared?

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8. How readable do you think is this Report?

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9. If you have other opinions and suggestions on social responsibility work of the SINOMACH and this Report, you’re

welcomed to put them forward here:

Note: Please mark “√” in the appropriate “□.”

Contact Us:

Address: Block A, CEC Plaza, No. 3, Danling Street, Haidian District, Beijing 100080, P. R. ChinaDept.: Strategic Planning Department (Corporate Culture Department)Contact: Li GuangTel.: 86-10-82688892

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Add：No.3 Danling Street, Haidian District, Beijing100080, P.R.China

Http://www.sinomach.com.cnE-mail：[email protected]

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china national machinery industry corporation csr report 2012

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