This is an English translation of the Chinese version of Insigma’s sustainability report for 2011. The original Chinese version is available at

http://www.sse.com.cn/sseportal/cs/zhs/scfw/gg/ssgs/2012-04-25/600797_20120425_7.pdf

Insigma Technology Co., Ltd.

Report on Corporate Social Responsibility 2011

The board of directors and its members of Insigma guarantee that the contents herein are free of false records, misleading statement or significant omissions, and promise to bear joint and several liabilities for the authenticity, veracity and integrity of the contents herein.

Preface

Insigma has witnessed 10 years’ development from 2001 to 2011. During the past decade, Insigma has expanded in a spirit of passion, daring and innovation, and under the long-range vision of “establishing a flagship of software and the Internet” proposed by Pan Yunhe, a member of Chinese Academy of Engineering, integrated the resources with the politics–university– industry–institute-driven Insigma model, with the aim of becoming an innovative and influential world-leading high-tech enterprise.

From an emerging star to diverse exploration, from the successful conduction of split share structure reform to returning to the IT services; from establishment of strategy of “Computer+X” to the two-pronged business layout of intelligent city and service outsourcing, Insigma, under the banner of “originating from education, commitment to the science and technology, and reciprocation for the society”, is committed to providing services for urban development, and involving itself in the tidal wave of industrialization and urbanization on the strength of the information application development in China. We assist clients in spurring innovation application, enhancing system operations and serving the industry-specific operations system regarding the national economy and the people’s livelihood; furthermore, we aim to make true the urban development in a harmonious, healthy and sustainable way by dint of its rich resources and prowess. Meanwhile, its continual self-improvement will become a major part of the overall social values system; this is a prerequisite on the part of the enterprise, and is also a fundamental part of social responsibility in its capacity of being a corporate citizen.

In the past year—a time presenting complex market environment both at home and abroad, Insigma has made continual improvement in its overall capabilities in the face of the world competition through sustained innovation in business model and services. In 2011, Insigma has made strides on all fronts, with its solutions being extensively applied to such basic industries as public utilities, finance, telecommunications, electricity and transport; all these have assisted clients in pulling off service innovation, and delivering business value, thus spurring the sustainable and rapid development in information society.

On the front of overseas market, Insigma has proactively propelled innovation in business model, and set up onshore marketing teams for direct contact with clients. It has reinforced its ability for tapping the international service market, with favorable momentum of growth.

As for the domestic market, we have continually enhanced our leadership, made optimal arrangement of human resources, and set up an excellent operations system, with a view to further optimizing the strategy landscape of Insigma’s core business in key markets, and actively exploring and developing sought-after business.

Insigma has established tens of thousands of clients in a number of countries, and set up a global network for R&D, marketing and services, with the purpose of becoming a high-tech enterprise recognized by domestic and overseas clients, partners, investors and the government. In the course of its continual development, Insigma’s staff and investors have held even higher expectations for the company; as a result, only through the stable and robust operations can we seek the exceptional development and provide excellent values for the society!

I. About Insigma

1. 1. Company Overview

Founded in September 2001, on the basis of Zhejiang University’s leading comprehensive applied disciplines, Insigma (Shanghai Stock Exchange ticker symbol: 600797) is an information technology consultancy and services group, and one of the leading IT services providers and service outsourcing enterprises in China. Insigma ranks 40^th among the Global Outsourcing 100 IAOP, and 8^th in China’s Top 100 Software Enterprises; Insigma also ranks among the 2011 Top 10 Software Outsourcing Enterprises in China, and among the 2011 Most Appreciated Knowledge  Enterprises, and among the 2011 Top 10 Most Innovative Enterprises in China.

Insigma boasts top-drawer software delivery bases in Beijing, Shanghai, Hangzhou, Shenyang, Dalian, Wuxi etc. with its branches in the North America and Japan and its subsidiaries scattered in China; it has registered operating revenues of 5.913 billion RMB in 2011.

While putting “industry – university – institute – politics” centre stage, Insigma has gradually explored the business layout of “intelligent city” for the Chinese market, and “intelligent service” for the overseas service outsourcing market through its combination of software and services and integration of technology and industry management capabilities. It has given full play to the integration of resources and technology superiority, and continually spurred the sustainable and healthy development of its business, with its tentacles spreading to such countries and regions as the U.S., Japan and Laos.

Insigma is one of the key software outsourcing providers oriented directly to the U.S, and Japan. Over the past decade, Insigma has consecutively undertaken hundreds of outsourcing projects for core systems in the finance, securities and medical industries in the world, and amassed world-leading software reengineering technology. Insigma is a long-term information technology provider for the world’s largest fund trust group—State Street, and is Microsoft’s largest outsourcing partner in China; it has also undertaken a batch of system development projects with significant social influence in Japan, and has attracted the strategic investment from State Street, Fuji Electric Holdings, and Hitachi, and established a long-term multi-win relationship with clients.

As one of the largest IT services providers in China, Insigma, with its powerful information system development and application capabilities (Computer) as its core, and by virtue of its international perspective and integration of high technology, is committed to providing concurrent consultancy services for the innovative development of many an industry (X), such as intelligent city, finance, electricity, telecommunications etc. and has been at the forefront of the intelligent city-oriented services, including social security, citizen’s One-card, digital urban management, digital railways. All these are geared towards offering safe, convenient, efficient and green overall planning and systematic solutions for the intelligent city to realize the sustainable development of cities.

2. Outlook on social responsibility

In accordance with the corporate philosophy of “innovation, health and sagacity”, Insigma takes the needs of the society and the country as its starting point for its strategic development, and the healthy business ecosystem and robust industry value chain as the “livable environment” for its survival; Insigma is committed to bringing off the sustainable development and the harmonious coexistence between enterprises, society and the environment, while continually perfecting its governance structure and upholding good faith in business operations.

3. Social responsibility system

Insigma has consistently carried out the sustainable development strategy, actively honored its social responsibility, taken care of the interests of stakeholders, and established a social responsibility system involving the management, various departments and all personnel. Insigma’s board of directors and its affiliated professional committees take into consideration the “responsibility of being as a social citizen” its decision-making and management process, and incorporates them in a series of internal rules and regulations in terms of corporate governance, information disclosure, investor’s relationship etc.

4. Stakeholders

Insigma has always attached importance to the interaction between the corporate development and various stakeholders and its impact by continually improving communications mechanisms, in order to seek the common development with various stakeholders. In 2011, Insigma has earnestly honored its due social responsibility as a corporate citizen, and maintained the common interests of stakeholders such as its clients, shareholders, personnel and community environment; no major events occurred which may impair negatively on the society, the environment etc.

1. Client: Insigma puts the client’s needs centre stage, and provides products and services on demand through innovation integration to achieve common prosperity.
2. Shareholders: And the company’s healthy development and handsome return on investment will act as a reward for the shareholders.
3. Employee rights: Insigma has made genuine efforts in respecting and protecting the rights and interests of the staff, spurring the staff development; Insigma strives to create sound conditions for the improvement of competitiveness and a happy working environment for the staff as the reward for their contribution.
4. Environment: Insigma is committed to providing clients and the society with high value-added, low-energy products and services through its state-of-the-art information technology and management philosophy and making its due contribution to building a resource-conserving and environmentally friendly society.

II. Economical value

Since 2010, Insigma has returned to the professional IT services through strategic transformation to formulate its intelligent city-orientated business and established the two-pronged business layout of intelligent city and service outsourcing.

In 2011, the intelligent city business has witnessed stable growth, with the operating performance going from strength to strength. While making its due contribution to the socio-economical development, Insigma has meanwhile shouldered its social responsibility.

1.      Overall Revenues
In 2011, Insigma has posted sales revenues of 5.913 billion RMB, a year-on-year increase of 6.58%, with a total profit of 161 million RMB, up by 82.17% on the previous year.

2.      Remuneration for personnel

In 2011, Insigma has paid to the staff salaries totaling 457,806,863.55 RMB.

Items	Amount
Salaries, bonus, allowance and subsidies	368,102,346.11
Employee welfare expenses	19,706,756.98
Social insurance premium	48,496,254.57
of which, Medical insurance premium	18,055,850.17
Basic endowment insurance premium	26,390,352.40
Unemployment insurance premium	2,595,516.51
Work-related injury insurance premium	656,358.15
Maternity insurance premium	798,177.34
Housing fund	17,938,951.23
Labor union dues	1,257,932.24
Personnel education fund	2,274,618.42
Termination benefits	30,004.00
Total	457,806,863.55

3. Payment for shareholders

In 2011, Insigma has distributed to all shareholders ￥0.1 worth’s (including tax) dividends per ten shares, totaling 8,130,434.95 RMB. Insigma has distributed dividends in cash for three consecutive years, totaling 24,391,304.85 RMB, which is 42.02% for the annual attributable profit of 58,049,188.70 RMB for the past three years. Insigma continues to provide sound return on investment for shareholders; while ensuring the maintenance and appreciation of values of its assets, Insigma also creates wealth for the society and makes its due contribution to the sustainable development.

4. Payment for the government

As a corporate citizen, Insigma has earnestly honored its duty to pay taxes; in 2011, Insigma has paid a total of 119.0201 million RMB in taxes.

III. Good faith, Honesty and Self-discipline

Insigma, with its emphasis on “lawful operations”, has perfected the standard internal operation system, and acted in accordance with the Chinese and local laws and regulations while in the process of business dealings, cooperation and acquisitions with its partners. With the lawful and standard operations as the basic tenets, Insigma has incorporated the internal control and risk management system into the corporate operating management system, and continuously improved the rewards and punishment system to make it more focused, efficient and scientific. The management team makes every effort in self-discipline, respects the culture of honesty and builds a defense line of morality.

For personnel in the major areas and key links wielding significant clout, personal integrity education will be carried out for personnel at all levels and with different responsibilities, to make it more focused and efficient and to raise the awareness for honesty. Consciousness of fair dealing will be further enhanced for operating management staff and personnel with right of business transaction, so as to ensure standard management and protect the rights and interests of the shareholders.

In terms of organization structure, Insigma, through the general meeting of stockholders, board of directors and board of supervisors, and active consultation with professional organizations of lawyers, accountants etc., makes further efforts in improving the decision-making ability to solicit professional assistance in terms of investment, acquisition, technology R&D, information security and operating management, so as to control the operating risks and to maintain the rights and interests of the company.

IV. Creation of values for shareholders

1. Improving corporate governance and operating capabilities

Bearing in mind that to be a multinational company, the corporate governance is a prerequisite for standard operations of listed companies, Insigma has always attached great importance to improving the corporate governance. To this end, Insigma has always been committed to the establishment and improvement of corporate governance structure, and has formulated a number of standard documents such as rules of procedure for various levels of management, clearly specifying review procedures for major issues and delineation of power.

Insigma has made continuous revisions and improvement to the internal corporate system in accordance with the requirements of the China Securities Regulatory Commission (CSRC) and Shanghai Stock Exchange (SSE). In 2010, Insigma has drawn up Management System on Corporate Insiders, Management System on External Information Users, Accountability System on Grave Errors for Information Disclosure in Annual Report etc. System for the Working of Board Secretary drawn up in 2011 guarantees the juridical status of the board secretary, as well as setting a limit on and enhancing the supervisory role of the board secretary, thus further perfecting the corporate governance structure. The establishment of expert board of directors is an effective drive for improving the corporate governance structure and spurring the innovations in the management mode and business mode, providing valuable experience and robust support for the business development and safe, efficient implementation of acquisition strategies. Insigma’s management standards and operation competency have gradually gained recognition and is a constituent stock of the “corporate governance index” drawn up by the Shanghai Stock Exchange.

In 2011, for the sake of further solidifying and enhancing the board members’ recognition and understanding of the standard operations and good faith, and setting up the philosophy of standard corporate operations, Insigma has actively engaged the board members, supervisors, senior management and related personnel in attending various laws and regulations teaching classes organized by the securities supervision authority; meanwhile, Insigma has reinforced the need for learning information disclosure and internal control system in order for the philosophy of standard corporate operations to take root in the staff’s minds, and for improving the corporate governance level.

2. Enhancing information disclosure service, and maintaining the rights and interests of shareholders

Insigma has always paid attention to the information disclosure, as evidenced by the formulation and implementation of the management system on Information Disclosure, which has expressly stipulated the responsibility of various departments in information disclosure, and established detailed working regulation for information disclosure; its stress on the role of the board of directors, various professional committees and independent board members for prior review and comprehensive supervision and the standards implemented in accordance with related regulations under the supervision of the board of supervisors will ensure that the information disclosure is carried out accurately, timely, faithfully and fully. Insigma strives to improve the quality and level of information disclosure, and makes continual improvements to the disclosure system in accordance with the requirements of the China Securities Regulatory Commission and Shanghai Stock Exchange. Insigma actively engages personnel related to information disclosure in attending corresponding training services organized by the securities supervision authority to raise awareness for standards and skills of the staff, in order to ensure the timely and accurately disclosure of information and protect the rights and interests of the investors. In 2011, Insigma has disclosed periodic report 4 times through designated media, and published provisional notices 30 times with no complements or further changes.

3. Maintaining contact with shareholders, and ensuring transparency of operations

Insigma has always attached importance to the position and role of investors in the corporate development, and has launched an online column for investor relationship and dedicated e-mail address for investors on the Website to forge sound communication channels with medium and small shareholders. Insigma has formulated and implemented the Management System on Relationship with Investors, and has kept in contact with inventors through multiple methods such as investor column, consulting hotline for investors and e-mail address on the homepage and on-site reception at the company, so as to maintain a sound corporate image in the market. Insigma has made every effort to provide convenience for investors to understand Insigma, to build confidence in the corporate development and in the share holding.

Meticulous preparations have been made for every general meeting of stockholders, during which detailed development strategy and business strategy about Insigma will be provided to investors and investors’ questions will be answered in earnest and comments and suggestions will be appreciated. In 2011, three general meetings of stockholders were held, with 20 visits by potential investors on site.

4. Following sustainable development policies and delivering reasonable payments for shareholders

Through the execution of the strategies of open innovation, excellent operations management, human resources development etc., Insigma has added a core competitive edge, and created values for clients and the society, thereby increasing values for shareholders. Since its inception, Insigma has grown in size; at the close of 2011, Insigma’s total assets reaches 4.533 billion RMB, net assets 2.01 billion RMB, operating revenues 5.913 billion RMB, net profit 146 million RMB, respectively, thus becoming the leading IT solutions and services provider in China. In accordance with its own development history and future strategies, Insigma pays the development fruits to the best of its ability to shareholders. As from 2001, Insigma has distributed profits to investors for eight times, with cash dividends totaling 254 million RMB.

V. Business Development

In 2011, Insigma has pulled off the strategic transformation, and under the operating principle of “high-end orientation, service guide and intentional roadmap”, has followed closely the government vision and society needs by investing consecutively in the emerging industries and city informatization industry, in order to provide clients with efficient, healthy and reasonable services for intelligent city development. Centered around the sustainable urban development, city-countryside integration, the people’s livelihood etc, and relying upon Zhejiang University’s discipline superiority, its own IT integrated technology, and its rich experience in establishing intelligent urban IT infrastructure, Insigma provides the authorities with efficient, flexible decision-making support and methods related to urban management and operations, and offers personal and convenient innovation applications and service model concerning the public utilities, with the aim of enabling the city to develop in a safe, efficient, convenient and green way.

Concerning the industry clients, Insigma offers safe, reliable, quality and scalable industry-specific solutions and helps clients optimize the information management system, satisfying the needs of the rapid development of the client’s business. Its solutions cover such areas as telecommunications, electricity, finance, government (social security, public finance, taxation, industry and commerce, urban management, IP protection etc.), as well as education, transport, manufacturing etc.

In the outsourcing industry, Insigma provides clients with comprehensive integrated outsourcing service, ranging from provision of business consultancy to design and establishment of business process, from day-to-day operations and management of IT system to outsourcing of business process in parts; while expanding to low-end and high-end areas, Insigma provides clients with comprehensive outsourcing services covering ITO, BPO and KPO, as well as IT consultancy services, application development and maintenance, consultancy and implementation, professional test and performance engineering services, localization services, IT infrastructure, IT training etc. It has also conducted cooperation with the world giants such as State Street, Microsoft etc. and implemented a number of major projects with momentous social impact in service outsourcing markets in the U.S. and Japan, thereby creating a famous brand in the world financial and IT services industries; Insigma has also actively embarked on the advanced information technology exploration and development such as the Internet and cloud computing.

As a modern information services and consultancy enterprise, Insigma has established corporate values based upon the customer satisfaction during its long-term services for the clients, and has formed a rapid two-way transmission system for clients’ information concerning the organizational structure and operation management; the performance assessment system for the internal structure is also based upon the customer satisfaction, and the policy of execution has been implemented consistently without fail.

Various Insigma-affiliated subsidiaries have successively obtained the CMMI 4 and CMMI3 for its software. Insigma has carried out vigorous control for its product quality, and have endeavored to improve the system and establish the efficient process management mode, with a view to providing top-rate products and services for clients. Insigma aims to seek for perfection in business on the basis of the ISO9001 quality management system.

3. Continual R&D investment for technological innovation

In 2011, on the basis of the core values of “innovation, health and sagacity” and the principles of “innovation leading to the future”, Insigma made improvements in management and technology through perfecting the innovation system so as to drive its main business development and achieve the stable and sustainable development of the company.

Insigma has always placed great emphasis on the R&D investment by investing a certain ratio of operating revenues in new services/products, new technology and new methods annually.

In accordance with the policies of “shifting economic development mode and adjusting economic structure” and new market opportunities presented by upgrading and transformation, Insigma has ratcheted up its investment into future-oriented projects in 2011, in order to promote the economic transformation and upgrading through technology innovation. In 2011, Insigma has proactively readjusted the corporate resources in the form of business innovation and team innovation to realize rapid development in the mobile Internet and the technology of related areas, and conduct forward-looking research and application innovation activities for business values and general technology in such fields as cloud computing, the Internet, embedded software for smart phones, Linux-compatible core.

4. IP protection for technological innovation achievements

On the front of the intellectual property protection, Insigma has conscientiously protected the intellectual property rights and achievements of technological innovation. With the software technology innovation in the leading position, Insigma has established an efficient technological innovation system of “market demand-oriented and combination of costs and efficiency” by dint of the technical advantage of Insigma and its partners through independent innovation and cooperative innovation. In the continual development of house software product and platform, Insigma has developed a series of application software, basic software platforms and industry-specific core business platforms (such as E-Government, enterprise-level security certificate, social insurance, medical treatment, telecommunications and power) with proprietary intellectual property rights in the fields of finance, security certificate, security management, technology platform, industry and commerce, taxation etc. thus laying a foundation for offering industry solutions rapidly and reliably.

Insigma has actively turned to good advantage the achievements in innovation to IP protection. Up to the end of 2011, Insigma has applied for a total of 40 patents with 16 patents being granted, and obtained 110 registered software products—a great improvement in protecting the core technology of Insigma; it also played a major role in maintaining its market leadership in China, tapping the world market and establishing its own core competiveness. Meanwhile, Insigma has strictly carried out the Intellectual Property Agreements concluded with the clientele, and attached great importance to establishing communications mechanism with the clientele in terms of IP protection for improving the capability in this area; conducted communications and consultation with clients concerning the third-part intellectual property related to their joint projects to guard against related risks; and conducted education in intellectual property protection to raise staff’s awareness for IP protection, so as to create proprietary intellectual property rights while respecting those of the others.

Energy conservation and emission reduction, green working environment

As an IT solutions and services provider, Insigma has eliminated dust, waste gas, waste water, waste residue, noise and other pollutants during the development, manufacturing, and marketing process, with no negative impact on the environment. Meanwhile Insigma has advocated a garden-style working environment in the establishment of an office park in accordance with the philosophy of “ecology, science and harmony”, making the enterprise more ecologically sound. Insigma advocates the green and environmental protection philosophy and actively engages itself in the drive for energy conservation, emission reduction and reasonable utilization of resources.

All office buildings in the company have adopted the energy-saving fluorescent lamps, resulting in a 30% reaction in energy consumption. Hardware upgrading and other measures will prolong the life of computers, leading to resources recycling and reasonable use, lessening its impact on the environment.

Great attention is paid to establishing a low-carbon, green and environmentally friendly working mode, and to expediting the unified information system construction; at present, automation of working process is carried in such areas as assets management, conference management, logistics, expenditure and staff management, with progress being made in the cooperative office mode.

In order to implement a diversified energy-saving and efficient conference mode, Insigma has actively improved the usage efficiency of the online meeting center; to date, the three conference solutions of teleconferencing, video conferencing and online meeting adopted by the company have considerably improved the internal and external communication and management efficiency, while curtailing the carbon emission and resources waste. Insigma has also boosted the internal and domestic direct dialing for the teleconferencing system with improvements in its quality and efficiency.

VII. Labor employment in accordance with the laws to protect the rights and interests of the staff

1. Staff cultivation and capability development

Insigma has set great store by the talent cultivation. With many years’ experiences in staff cultivation behind it, Insigma has, by relying upon the vast and rich high-end human resources of Zhejiang University, accumulated rich talent cultivation experience in the university-enterprise cooperation mode of “enterprise-university-research institute”, and has placed high emphasis on development of the operating management, strategic leadership and decision-making for the talent team surrounding operating management, expertise, marketing/sales, project management and functional management, so as to elevate the level of engineering technology and management as well as the business administration. The ever-improving staff performance and continual replenishment of talent will boost the staff growth and competitiveness.

Insigma has proactively created new opportunities for innovations and talent-displaying; in 2011, Insigma has launched the “Insigma IN Program” with the aim of inspiring the staff in independent innovation, tapping talent with innovative minds, and exploring and assisting excellent projects, in order to nurture an innovative cultural environment of “daring to dream and to pursue”.

2. Cultivating IT application-oriented talent for the society

The key to the 21^st century is the competition for talent. Insigma has actively been on the lookout for employment and training of students fresh out of college; as for the career change and expertise improvement for students, Insigma has established a scientific practical training process and methodology; its ability-oriented talent cultivation methods assist students in applying their knowledge into practice, skills and practical ability in engineering, elevating their employment prospects and career development ability to achieve full employment. In 2011, Insigma-affiliated Insigma New International Software Training Ltd. has provided practical training for over 600 students to fulfill their employment goals. The talent cultivation quality has reached a new height through exploration and practices of continual reform of teaching. Since its inception, the company has provided training for over 3,000 IT application-oriented with international preservative and individuality for the economy and industry.

3. Employment in accordance with the laws to earnestly project interests of the staff

Insigma has consistently carried out the practice of employing staff according to law and the protection of employee’s rights and interests. Insigma abides by the related laws and regulations on employment, signs written labor contract with employees on the basis of equality, voluntariness and consensus, and provides reasonable remunerations and statutory benefits for employees according to law. Insigma esteems multi-culture and religious faith and doesn’t show nor support discrimination on the grounds of gender, nationality, race, religious faith, citizenship, political affiliations, age etc. in the areas of employment, remunerations, training promotion, termination and so on. Insigma has acted in accordance with the principle of “distribution on the basis of labor” and implemented the pay management system on the basis of position, employee personal development and performance.

4. Creating a sound working environment, achieving a harmonious enterprise culture

(1) Democratic corporate governance

The set-up of Employee Supervisor position in Insigma guarantees the employees’ rights and interests in the corporate governance, and the trade union, with members elected by the staff, has made it possible to voice the staff’s wishes and to participate in the company’s democratic governance on behalf of the staff.

(2) Comfortable working environment

On Feb. 28^th 2011, Insigma has moved into a new office park and taken the philosophy of improving level of comfort for working as the key part of the working environment, in a bid to create a safe, comfortable and green working environment.

(3) Rich recreational activities

Insigma boasts a work team full of vigor and vitality; in order to enrich the life of the staff after work, Insigma stages regularly a variety of sporting competitions, such as football, basketball, dragon boat racing; fitness activities, including table tennis, tennis, swimming, mountain climbing, dancing; social activities, including photography solon, bachelor party for staff; and other large-scale activities such as the New Year Party.

The Family Day activity is held in acknowledgement of the generous support for Insigma shown by the family members of the staff; engaging the family members of the staff in the corporate activities will enhance the cohesive force of the Insigma staff and enable the staff to experience the warmth of the employee’s family and the great family of Insigma. These activities are well received by the staff and have won high plaudits from the staff and family members alike.

5. Providing health management service, caring for the physical and psychological health of the staff

(1) Regular free physical examination and health salon

Free physical examination at large-scale and accredited Physical Examination Centers is provided by Insigma for the staff, as well as the teaching of healthcare methods and a healthy lifestyle through multiple channels. Insigma proactively promulgates precautionary measures against disease at the turn of the seasons or whenever a major epidemic disease occurs.

(2) Providing the staff with Medical Insurance and other commercial insurance such as cooperative medical service

Insigma has proactively established a comprehensive commercial insurance system as a complement to the national insurance, providing guarantee against personal accidents, hospitalization, out-patient medical care, and childbearing costs for the staff.

6. Incentive of equity

In May 2011, Insigma has successfully implanted the Incentive Program of Restricted Stock of A Shares. The 107 targets of the incentive have received, through private placement, a total of 28,965,000 shares with 3.87 yuan per share issued by Insigma. The incentive targets include 13 board members, senior management members, and 100 middle management members, senior management members of subsidiaries, core marking, and technology and management staff. The implementation of the stock option incentive program has achieved the results of having established and perfected the company management mechanism, established and perfected the incentive and restrictive mechanism for the senior management, promulgated the philosophy of common and sustainable development between Insigma, senior management and core staff, effectively inspired the initiative of the management team and core staff, attracted and kept top-flight staff, elevated the competitive position of the company in the industry, boosted the core competitiveness, and ensured the accomplishment of the corporate development strategies and business objective.

VIII. Engaging in assistance and public welfare as payment for society

Over the years, Insigma has actively involved itself in social assistance and social benefit activities as repay for the society, including protecting the disadvantaged groups, making contribution to building elementary schools for poor children, assisting college students in need, and making donations to the disaster victims.

1. Good deeds – Service Website for the Handicapped in China

On Apr. 19^th, 2011, the Service Website for the Handicapped in China (www.cdpsn.org.cn), oriented towards providing comprehensive services for the handicapped in social security system and services system, and jointly developed by the China Disabled Persons’ Federation (CDPF), Insigma and Zhejiang University, and characterized by its authoritative and professional information, non-profit-making nature, and interactivity and easy of use for the general public, provides obstacle-free online services, so as to achieve equal participation in society and sharing of a beautiful life for the handicapped. In order to further tap the online information resources for serving the handicapped, the Service Website for the Handicapped in China has seen a new face-lift on the eve of 2012 New Year’s Day; the newly-altered website pays even more attention to the user services and experience with its simple and intuitive layout, with the addition of Information Service concerning the life of the handicapped; it has also added such channels as information channel, love and care channel, digital library for Chinese handicapped people, employment & recruitment, auxiliary rehabilitation tools, distance learning, obstacle-free interactive games etc., and its innovative major “Encyclopedic F&Qs” channel provides exclusive services for the handicapped users with official accreditation.

On the eve of the 2012 Chinese Lunar New Year, the Service Website for the Handicapped in China has provided obstacle-free (words + video) online live broadcasting of CCTV New Year’s Gala for the hearing impaired person with the click rate and visitors reaching 430,000 and 140,000 respectively. During the five-hour live broadcasting period, a total of 32,000 words was keyed in by rapid typing, which marked a new era for the hearing impaired person to break the voiceless world and share the cultural feast of the Gala in the same way as the able-bodied cousins.

2. Love for the Alma Mater— Computer Festival at Zhejiang University

To date, Insigma has made contributions to the Computer Festival held at Zhejiang University for nine times; the “Insigma” Computer Festival held by Zhejiang University, first initiated by the teaching and research office of the Undergraduate School of Zhejiang University and undertaken by the Computer College and Software College, was a major activity oriented towards the students for learning science and technology knowledge. The Computer Festival, based upon the objective of “keeping the finger on the pulse of the times, and carrying forward the pioneering spirit”, and the goals of popularizing knowledge and fostering a culture concerning computer, cultivating the computer talent with potential and innovative mindset, is committed to tapping the society-transforming potential of computer, building a green, harmonious, healthy and innovation culture in computer, and plays an active role in spurring the development of teaching and research in computer curriculum and injecting vitality into the campus life.

3. Concern for the Qingchuan—continual support for the Hope Elementary School

Insigma and its subsidiaries have made contributions to the building of a Hope Elementary School in Sanpan Village, Kongxi Town, Qingchuan, Sichuan province after a major Wenchuan earthquake rocked the area on May 12^th 2008. The Hope Elementary School, commenced in August 2009, and completed in April 2010, is capable of holding up to 150 students, and covers an area of 2,046 sq m, of which the area of structure 845 sq m; by the end of 2011, the total enrolment of students number 87 with 9 teachers; the newly-built school has tremendously improved the education level and learning environment for the disaster area and greatly inspired the student’s enthusiasm and initiative in learning. In 2011, Insigma has eld another benefit auction for this Elementary School, with a total of 15,323 yuan raised for the building of a library.

Conclusion

The year 2011 marks the beginning of the “12^th Five-year Plan”, and is a major year for Insigma in setting a new course for future development. Over the past year, Insigma has maintained stable growth, and will make further efforts to create new values for shareholders, clients and the society as a whole with active creativity, mature corporate governance and confident management mentality, in a bid to realize the dream of becoming a world-leading high-tech enterprise.

Insigma Technology Co., Ltd.

April 23, 2012