Progress Report on Ongoing Corporate Governance Rectification

Pursuant to notices from the China Securities Regulatory Commission (CSRC) and the CSRC, Shaanxi bureau, the company has conducted a series of rectification activities to strengthen its corporate governance.

Following self-inspections, the company identified certain problems and has taken the following rectification measures:

1. The Remuneration and Appraisal Committee discussed and confirmed the salaries of senior managers of the company; the Strategy Committee participated in major biddings and has devised a development plan for the company.
2. Training pertaining to the information disclosure rules was provided for directors, supervisors, senior managers and other related individuals responsible for information disclosure.
The Management Measures for Financial Information Disclosure were formulated, which has defined formulation procedures, assessments and disclosures of periodic reports.
3. Training related to the rules of stock listing, raised funds and related-party transactions was carried out with directors, supervisors, senior managers and other individuals holding such responsibilities.
4. The Management Measures for Raised Funds were revised.

As for problems identified by the CSRC, Shaanxi bureau, the company has taken the following rectification measures:

1. strengthening the training and all procedures of information disclosure
2. unify letters of authorization
3. include an additional column for the signature of the chairman of the board of directors in the company's interim announcements

Following the CSRC, Shaanxi bureau's on-site inspection, the company has devised rectification plans and formulated relevant resolutions at the board meetings and general meetings of shareholders as well as issued announcements in the company's designated media.

Based on current conditions, the company will further regulate its governance, strengthen its operations and improve the company's overall quality.

Board of Directors
10 Sept 2008


Source: Securities Times

Date: 10 Sept 2008

CN01/SC/LZ/BT/KM