On August 03, 2018, the Enlarged Interim Operation and Management Meeting 2018 of China Security Co., Ltd. ("China Security") was held in Shanghai successfully. Mr. Wang Zhenghua, the chairman, Ms. Wang Lie, the vice chairwoman, Mr. Li Baiqing, the president, Ms. Cao Mengxiao, the vice president and CFO, Mr. Zhang Jiajie, an executive vice president, Mr. Zha Lei, an executive vice president, Mr. Hu Gang, an executive vice president, Mr. Ye Yongjia, a director, Mr. Li Zhendong, a secretary of the Board, and seniors managers from the head office and its member companies attended this meeting, which provided crucial guidance for future development of China Security.

（Group photo of attendees）

Initiate a strategic transformation and reshape the corporate culture

At the beginning of the meeting, Mr. Wang Zhenghua delivered a keynote speech of "joint efforts to make remedies and corrections". In the speech, he pointed that China Security is at a crucial moment when a strategic transformation is urgently required; the company should shift from "external acquisition and merger to internal development" by focusing resources on good projects, by giving play to innovation, enlarging its investments into core technologies, in order to make China Security the supporting force of its member companies. What is more, when developing its business, the company should also pay attention to reshaping its corporate culture since a fair culture environment, a stable core management and a long-term incentive mechanism must be maintained if the company desires to develop continuously and healthfully.

Increase company efficiency and motivate real talents

A high company efficiency, which needs to be optimized from three dimensions, i.e., people, system and organizational structure, is the key to a virtuous business development. Mr. Li Baiqing gave a detailed explanation of this point from the perspective of company operation and government. First, an optimized structure can maximize the use of resources. Second, China Security should act as a platform on which resources of member companies are integrated and with which an internal collaboration and profit distribution system must be set for the purpose of a sustainable operation in 2019. Third, powers, duties and benefits of all key positions must be clearly defined and processes further optimized and streamlined if the company wants to increase its efficiency and effectiveness. Fourth, the company must prioritize people by establishing an effective incentive program, specifying targets and evaluation criteria and applying fair incentive actions.

Implement proper internal controls around "three net figures"  

Ms. Cao Mengxiao stressed that the company must concentrate on three net figures (net profit, net assets and net cash flow) while doing a proper job in internal control, supervision and management. A lot of actions, such as increasing revenue and decreasing expenditure to ensure the company's operation, improving management systems, strengthening budget and strictly restricting actual expenses, and optimizing talent team.

Define targets and make a business plan 

Mr. Zhang Jiajie, Mr. Zha Lei and Mr. Hu Gang, the heads of three new divisions, respectively explained their business development plans for the next half year and acknowledged that they will respond actively to the company's new strategic planning by increasing R&D investment, strengthening business management and striving to explore market, thereby providing supports for strategic transformation of China Security.

The world is ever changing to bring more challenges for the future. Only by griping strategic transformation opportunity, focusing on quality-based development, reshaping the corporate culture and establishing an efficient talent management system, can the company rapidly get out of the current predicament. China Security believes in the power of "believing" and therefore will unite all its people to strive for the common target and for creating a glorious future.