Hengbao’s Project State Development and Reform Commission the smooth completion of the project acceptance
	State Development and Reform Commission " development and industrialization of smart IC card operating system " projects charged with Hengbao Co., Ltd (stock code: 002104) passed the final acceptance in Zhenjiang Danyang City, on June 6th , 2008. Acceptance work is processed strictly according with the request of "national high-tech industry development project management Interim Procedures” made by National Development and Reform Commission of and “check methods of completion of projects invested by Jiangsu provincial government ". Meanwhile the final acceptance of the project is set up, consisted of key members like Professor Zhao Jinxi from Nanjing University, Professor Sun Zhihui from Southeast University, Posts and Telecommunications Professor Xie Jidong from Nanjing University , Tang Xuewen, Director of Development and Reform Commission of Jiangsu Province, Zhang Juan, Chief of Jiangsu Provincial Development and Reform Commission，leadership of Zhenjiang Development and Reform Commission and the leadership of Danyang City Development and Reform Commission. Final acceptance Commission heard Hengbao’s comprehensive final report, final technical and financial accounts of the audit report, review the information, and view the scene. The Commission adopts consensus views of complete acceptance after deliberation. The planning total investment of the project is RMB 40.7121 million, the actual total expenditure being 46.2232 million, with the support from the special funds of state software project 4 million, remaining funds all raised by Hengbao itself. In due course, Hengbao developed smart card IC COS operating system software applications in many fields, mainly aiming at different business needs and the requirements of each application norms in the area of financial, communications and tax control. Through the technology of the "Outline of" l and COS layered modular, it can meet the requirements as financial payments, communications and tax control. Meanwhile Hengbao built a smart IC card production line, formed a new 20 million smart card production capacity. The project products are mainly applied in the SIM card for China Unicom, PHS SIM card for China Telecom, tax control card and financial IC cards, etc. we achieve bulk sales to the Unicom Industrial Electronics Co., Ltd., Jiangsu Province, telecommunications company, Shanghai Telecom, Qilu wave of software companies, Hunan Great Wall Company, and other companies. According to statistics of tender from China Unicom, Hengbao occupies about 17 percent of SIM card market share in China Unicom in the year of 2007, becoming the No. 1; over 50 percent in Fiscal card market share of ranking first in this market. The project of “development and industrialization of smart IC card operating system " of Hengbao Co., Ltd. is in accordance with the approval requirements, successfully complete its construction tasks, and gain acceptance of completion. After acceptance, experts and leaders of the State Development and Reform Commission has made us some valuable suggestions. They hope us further strengthening of market development and new product development, while strengthen cost control to seize the opportunity of developing market and to obtain good results. Hengbao will continue to do our solid work with high morale and good style, to promote domestic development of the smart card industry and to improve the company's capacity in research, development, production and marketing, making more contributions to bring Hengbao to a new stage, to develop the construction of Chinese Information technology and information security and to the build socio-economic development.