Corporate.quality.manual[1]

1

Quality Management

System

Revision 5

15 October 2010

Corporate Quality Manual

Corporate Quality Manual

Rev Revision Status Approval / Date

0 New Corporate issue. Replaces quality manuals under Civil, Foundations, Building and Retrofitting systems. Revised to suit organisational restructuring and ISO 9001: 2000.

Original signed by T. Ho / 4/12/01

1 Whole reissued incorporating name change. EXCO changed HK Sector Board. Scope & purpose clarified. App 1 rearranged & corrected. App 3 vision, mission, strategies & values added. 1.6 outsourcing simplified. Update name of Plant Dept. Services added to 4 purchasing. Partnering added under 5.3 project planning and clarified under 6.1.1. Design expanded under 5.6. Clarification to 3.1 process ownership, 5.4 quality controls, 5.7 construction control. Correction to 5.11, 5.13.2, 6.1.2, 6.4. & 6.5. QAC added to 6.6, management review.

Original signed by

T. Ho / 9/4/02

2 Whole reissued incorporating relevant PSSD operations into Hong Kong Sector system, clarify procurement roles and pretender processes, add the Academy, use of approved designs, plant and equipment enhancements, reference to Crisis Communication Manual and make minor corrections.

Original signed by

T. Ho / 30/6/03

3 Name change GS to Gammon Construction. Refine wording to add clarity, incorporate organisational changes & Macau operations. Change MD to CE. Add further references to risk assessment. Add 5.13.4 wrap up meetings.

Original signed by

T. Ho / 11/3/05

4 Updated to reflect latest organisation structure & staff roles. Document security included, sub-consultant evaluation & assessment added, KPI, monthly quality reports and PQR meetings added, Appendices 1&2 updated & minor corrections in various sections.

Original signed by

T. Ho / 21/2/08

5 Scope rearranged, expand on design control, consultants, work environment & contract review & minor changes to tie in with ISO 9001:2008. Update mission, vision & values.

Original signed byT. Ho / 14/10/10

CORPORATE QUALITY MANUAL

Rev 5 15 October 2010

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Contents 1. Quality Management System (QMS) ISO 9001 Ref 1.1 Purpose - 1.2 Scope of QMS 4.2.2a) 1.3 Responsibility and authority 5.5.1/2 1.4 Process operation, control and interaction 4.1a),c)/4.2.2c) 1.5 Sequence of processes 4.1b) 1.6 Control of outsourced processes 4.1 1.7 QMS documentation 4.2 1.8 Information, communication & control of documents and records 4.2.3/4.2.4/5.5.3 2. Setting Direction (Key Process A) 2.1 Policy and action plans 5.1/5.3 2.2 Quality objectives 5.4.1 3. Resource Management (Key Process D) 6 3.1 Resources assignment 6.1/2 3.2 HR recruitment, competence, training and development 6.2 3.3 Plant and equipment and fabrication resources 6.1 3.4 Knowledge resources 6.1/3 3.5 Infrastructure and environment 6.3 4. Procurement (Key Process E) 7.4 4.1 Material procurement general 7.4.1 4.2 Sourcing capable suppliers 7.4.1 4.3 Placing orders 7.4.2 4.4 Completion of order delivery 7.4.3 5. Project Management & Delivery (Key Processes) Securing New Contracts (Process B) Preconstruction Phase 5.1 Pretender 7.1/2 5.2 Tender Stage Estimating and planning 7.1/7.2.1/2 Management of Contracts (Process C) 7.5 5.3 Project Initiation and Planning 7.1/7.5.1/5.5.1/7.2.3 5.4 Quality Control Planning/Inspection and Testing 7.5.2/7.5.3/8.2.4 5.5 Procurement/Subcontracting 7.4 5.6 Design Controls 7.3 5.7 Control of construction and fabrication 7.5.1 5.8 Control of customer property 7.5.4 5.9 Control of subcontractors / consultants / suppliers 7.4.3/7.5.2/8.2.4 5.10 Equipment Maintenance and Calibration 7.6 5.11 Control of Non-conforming Product 8.3 5.12 Contract Review 7.5.1/8 5.13 Project Close Out 7.5.5 6. Measurement, analysis and improvement (Key Process F) 8 6.1 Customer Satisfaction 7.2.3/8.3.2 6.2 Quality System Audits 8.2.2 6.3 Monitoring and measurement of QMS processes 8.2.3 6.4 Corrective and Preventive Action 8.5.2/3 6.5 Analysis of data used for measuring QMS performance 8.4 6.6 Review of the Quality Management System 5.6 Appendix 1 Processes needed by the QMS, inputs, outputs, criteria and methods for control Appendix 2 List of QMS procedures Appendix 3 Mission, Vision, Strategies and Values



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1.0 QUALITY MANAGEMENT SYSTEM (QMS) 1.1 Purpose

This Manual aims to define the scope of the QMS, describe its key processes and how they interact with one another in accordance with ISO 9001:2008 requirements. The documented procedures to be used are referred to or described within this Manual. The QMS as a whole is intended to create a systematic means for managing these processes, including those of continual improvement, with the aim of enhancing customer satisfaction through its effective implementation.

1.2 Scope of Quality Management System (QMS) 1.2.1 Areas of application 1.2.1.1 This system applies to those processes identified as needed by the QMS and which

are related to Gammons Hong Kong and Macau operations and the relevant support services carried out at Gammon Shenzhen, PRC. Where specifically stated or agreed this QMS may also apply to Gammon subsidiary companies or Joint Venture partnerships.

1.2.1.2 When undertaking design work required by Customers, Gammon implements and

maintains relevant procedures established by Lambeth Associates Limited, a wholly owned subsidiary of Gammon. The common process procedures applicable are identified under Section 5.6.

1.2.1.3 Separate systems have been developed specifically for use in processes involving

the design and supply of concrete, and in soil, rock and chemical testing and calibration. These systems are assessed independently of one another.

1.2.2 Exclusions

Non 1.3 Responsibility and Authority 1.3.1 Gammon's top corporate management is the Executive Committee chaired by the

Chief Executive (CE) and comprising a Chief Operating Officer (COO) & Executive Directors. This Committee has been authorised by the Board to be responsible for managing the day to day business. The CE has developed the management structure that defines the organisational framework of operating units and support functions and areas of responsibility of Directors and other key staff. Charts or other means are used to illustrate details of staff roles and interrelationships at other levels and on projects.

1.3.2 The Chief Executive is responsible for establishing & implementing the Quality

Policy applicable to the business and has set up a Quality Action Committee to steer quality improvement actions and help ensure policy understanding and implementation. A formal system of delegations and limits of authority is used to empower staff to make business decisions.



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1.3.3 Within their specific areas of authority, it is the responsibility of the Executive Directors or Directors to use regular meetings, briefings, newsletters, circulars or other means to make relevant staff aware of the importance of meeting customer, statutory and regulatory requirements and to communicate issues concerning the effectiveness of the QMS.

1.3.4 Process owners ensure that the management of QMS processes follows the

company guidelines and procedures set and are required to take suitable actions to ensure the consistent delivery of acceptable products and provision of quality services to both internal & external customers. To help ensure the planned results are achieved process owners define the roles and responsibilities of their staff (with reference to typical responsibilities defined within the QMS procedures) and ensure these are communicated, understood and updated to reflect business needs.

1.3.5 The Group Systems Manager, co-ordinates & monitors the operation of the QMS &

liaises with the certification body. Supervised by the Group Risk & Opportunities Manager he is responsible for reporting on the systems performance & presenting proposals for improvement. Other Quality Managers or representatives for specific areas or QMS processes are responsible for bringing support and expertise to QMS implementation, understanding, feedback and maintenance.

1.4 Process Operation, Control and Interaction

Appendix 1 identifies the core processes under the QMS and the key criteria and methods needed to ensure their effective operation and control. The following table describes the basic interaction of these processes.

Key Process Description of process interaction (refer section 1.5 also)

A. Setting Direction

The policies, objectives, actions, targets and goals permeate all other processes. The measurement and analysis of performance results give facts that facilitate decision making, corrective and preventive action planning and improvement.

B. Securing new contracts

Outputs from processes A and F are used for planning and tender reviews whilst processes D and E interact on costs, availability and capabilities. Relevant feedback from process C is used for a variety of purposes such as planning and resource proposals.

C. Management of contracts

Outputs from A and B are used in detailed project planning whilst this process gives inputs to processes D, E and F. The interaction with process F is continuous during a project life cycle.

D. Resource Management

Interaction when resources required from process C. Training and development plans use outputs from process A and may interact with other processes. Measurement of HR data is used for process F and to provide feedback to process A.

E. Procurement

Sourcing and provision of data for input to process B whilst ordering materials, plant and equipment interact with process C. Analysis of subcontractor & supplier performance results interacts with process F.

F. Measurement, analysis and improvement

Extent of deployment dependant on outputs from process A whilst the results and reviews provide feedback to most other processes. Measurement interaction is mainly with processes B to E.

G. Information, Communication, Control of Documents and Records Together inputs / outputs interact with all processes on a continuous basis.



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1.5 Sequence of Processes

The chart below illustrates the main sequence and interaction links between the primary processes. Further levels of interaction are defined under section 1.4 and elsewhere under the QMS.

P-D-C-A cycle

Improvement actions

A. Setting Direction

Vision, policy, strategies, objectives, operating plan,

action plans, Balanced Scorecards

F. Measurement, analysis and improvement

Customer feedback

Audit, data measurement,

corrective & preventive action, emergency

preparedness & response

Analysis and review

B. Securing New Contracts

Marketing, research, design development,

innovation.

Prequalification, estimating, planning, strategy deployment, tender reviews, risk

evaluation, negotiation

C. Management of contracts

Project Initiation & Planning

Procurement, design, control of construction, customer

property, subcontractors, risk management, equipment calibration, control of NC

product

Contract performance review, quality control, project close

out

PRODUCT DELIVERY TO CUSTOMER

Successful tenders

Output

D. Resource Management

HR recruitment, competence, training and development

Fabrication facilities, plant & equipment.

Information Technology

Customer Requirements

G. Information, Communication, Control of Documents and Records

External documents

Internal documents

E. Procurement

Sourcing, evaluating, analysing, ordering



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1.6 Control of Outsourced Processes

Methods for control of any outsourced process affecting service quality or product conformity are established and identified when securing new contracts or during management of contracts. The mechanisms used for procurement of external services that assist in executing processes are identified under Section 4.

1.7 Quality Management System Documentation

The QMS documentation comprises the Quality Policy, Quality Manual, Quality Objectives, targets and action plans; QMS Procedures & company procedural manuals, documents needed for the effective planning, operation & control of processes (e.g. programmes, Project Quality Plans, Inspection and Test Plans, method statements, work instructions, risk registers, action plans and meeting records) and various records and documents generated by operating the QMS.

QMS Procedures and other relevant company manuals supplementing the QMS are listed under Appendix 2.

1.8 Information, Communication, Control of Documents and Records

Management use all available written, electronic and verbal means of communication to ensure that the right staff are kept aware of policies and objectives and are provided with relevant, reliable, accurate, complete and authorised information at the right time. Top Management have established regular meetings, procedures, charts, briefings, staff surveys, an Intranet, e-mail, in house newsletters and information circulars for communication.

The following documents are applicable:-

(a) A Crisis Communications Manual and a Business Continuity Plan have been

established to provide communication procedures to be followed when unexpected events occur.

(b) Procedure QMS/01 Control of Documents has been established to define

the controls needed for the proper control of all documents required by the QMS.

(c) Procedure QMS/02 Control of Records has been established to define the

controls needed for the identification, storage, protection, retrieval, retention time and disposal of records used to provide evidence of conformity to requirements and the effective operation of the QMS. Documents & records to be maintained in a confidential manner are classified following the guidelines established and are kept & stored with access control implemented according to the security level.

These communication and control processes are common to all activities undertaken and therefore responsibility for implementation, control & improvement rests with each process owner.



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2.0 SETTING DIRECTION (Key Process A) 2.1 Policy and Action Plans

The Chief Executive has defined a quality policy, vision and the key strategies and values to be adopted. He works with the Executive Committee to develop and update an operating plan(s) to map out the intended future organisational direction. To help steer and measure progress towards the long term goals, corporate performance objectives and targets are set each year including use of Balanced Scorecards. Gammon Board members and Executive Committee review performance, assess corporate and project risks, internal and external factors to formulate actions to mitigate risk and to meet the goals identified in the operating plan and the annual targets set. Quality Action and Safety & Environmental Action Committees form a direct link to the Executive Committee and steer the development of objectives, actions and targets in their respective areas and in conjunction with the Executive Committee ensure that Policies, actions and targets are communicated to all staff.

2.2 Quality Objectives

The Executive Committee, in conjunction with the Quality Action Committee, ensure the establishment of suitable measurable quality objectives that are consistent with the quality policy and relevant to the products or services provided. Quality objectives are cascaded down to include relevant functions and levels supporting and interacting with key processes. Process owners ensure that where necessary action plans are developed and implemented to direct the achievement of the quality objectives established.

3.0 RESOURCE MANAGEMENT (Key Process D) 3.1 Resources Assignment

It is the duty of the Chief Executive and Executive Directors to ensure that adequate & appropriate resources are provided to achieve objectives and targets. This includes adequate time and those financial, IT, plant and equipment and human resources planned to meet contract, statutory and regulatory requirements. The process of recruitment, transfer, assignment and release of personnel is managed and controlled by management using resource meetings, demand projections, succession planning, sourcing, training and development plans. Once a new project is likely to be awarded an intense review of current resource commitments, expertise and availability is undertaken to develop a strategy that can best meet contract requirements. The human resources required for projects are identified in a suitable format and responsibilities are defined at project level.

3.2 Competence, Training and Development 3.2.1 The necessary competence of required staff workers, operators who manage,

supervise or perform work affecting the quality of services or products delivered to internal and external Customers is determined using one or more of the following references:



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a) Competency profiles agreed at senior level; b) Professional Institution requirements; c) Statutory supervision requirements; d) Contract requirements; and e) Recruitment profiles.

3.2.2 Assessment of training needs (determining the gap between current and required

competency)

Gammon follows Procedure QMS/03 Staff Training and Development to guide the processes of developing the workforce to meet the current and future needs of the organisation and the following actions are implemented:

(a) Annual Performance Appraisals of all staff by their immediate Supervisors to

identify short term training needs. (b) Participation in HR Programmes including; career reviews, graduate and

apprentice training schemes, individual development plans, appointment panels, site peer reviews.

(c) Other training required to meet statutory or contractual requirements. (d) Cross discipline training under the Gammon Academy prospectus and other

corporate training needs identified from time to time as new initiatives, systems or changes are introduced.

3.2.3 Provision of training or other actions to address needs & achieve necessary

competency

The Human Resources function and Gammon Academy help manage the process of training course design and delivery to those personnel with approved applications or needs identified and those working under training agreements. Qualified in-house specialists or external consultants provide formal training. In addition other actions are planned and undertaken to achieve competency using on the job training, internal transfer, job rotation, briefings and familiarisations.

3.2.4 Evaluation of effectiveness of training given or other actions taken

Gammon adopts one or more of the following measures to help ensure the effectiveness of training actions taken:

a) Completion of course end or periodic questionnaires and /or tests or exams; b) After course evaluations; c) Continuous on going review of staff development programmes; d) Annual appraisals; e) Appointment panels; f) Periodic supervisor assessments for graduates, technicians and; g) Incident reviews.

3.2.5 Training records

Detailed training records are made and retained to show participation of personnel in training activities and the level of competency and qualification achieved.



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3.2.6 Awareness

Staff are briefed at regularly meetings on the relevance and importance of their work activities by their supervisors or by other designated staff. Actions to contribute to the achievement of quality objectives are discussed and reviewed between affected staff. Furthermore ethical values are communicated by issue of a company Code of Conduct and by circulation of prevention of bribery reminders.

3.3 Plant, Equipment and Fabrication Resources

Gammon designs, develops, fabricates steelwork and mechanical plant and equipment, procures, supplies and maintains a variety of plant equipment including fabrication equipment, and qualified operators required to meet demand. Plant and equipment inventory, demand and maintenance are planned and tracked to help ensure optimum usage and consistent service to the operations. This function provides support on plant, equipment and steelwork issues during preconstruction and construction stages.

3.4 Knowledge Resources

Special knowledge and experience gained is captured, retained and documented for future application. The main methods of knowledge storage and preservation used include: the Gammon Record, method statement libraries, newsletter articles, project sheets, innovation competition entries, internal project wrap up meetings, patents, special methods reports and presentations, Gammon Academy programmes, problem sharing sessions, customer and market knowledge files and personnel skills and competency inventories.

A technical and legal library of up-to-date construction, design and management related publications, Ordinances and Technical Memorandums are maintained and a variety of informative journals are circulated for internal learning and to keep abreast of current industry and market intelligence.

3.5 Infrastructure and Environment

Both centralised and satellite office environments has been established and are maintained based on a set of company standards that ensure a pleasant and comfortable work environment equipped with suitable facilities for working, undertaking engineering design and creating drawings, communication, data processing and transport. The standards for temporary site offices vary according to contract requirements, scale and project duration. Workspace and facilities for information processing, storage, communication and transport are installed on all projects. Workshops, plant and equipment, computer networks and IT systems are deployed to provide the infrastructure to support operations in the field.

Recognising that environmental conditions on sites effect service and product quality, health and safety, HS&E systems are implemented to ensure a suitable working environment is established and maintained consistent with Gammons commitments and in conformity with legislation, regulatory contractual & other applicable requirements.



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4.0 PROCUREMENT (Key Process E) 4.1 Material and Service Procurement General

External material and service suppliers (including subcontractors and consultants) acquired through procurement processes have three stages of control, pre-contract, selection and award, and post contract. Guidance for all stages is provided under the company Procurement and Subcontract Manuals supplemented by specific operating procedures governed by the Enterprise Resource Planning system control environment which also contains a Sundries Order Module for efficient procurement of low value consumable items. Section 5 of this QMS manual summarises the main post contract controls. The centralised and satellite procurement functions are under the direction of a procurement team and Procurement Managers.

4.2 Sourcing Capable Suppliers

A potential suppliers ability to deliver quality & conforming services, materials, plant or equipment is assessed from past history of performance, job references, business credentials, quality system certification, customer acceptance of proposals and other means. Gammon conducts a regular review of overall performance of selected material and service suppliers across the company. The results supplement the routine monitoring and evaluation being conducted during the procurement process and management of contracts. Information is used to reassess supplier approval status and to take improvement actions where warranted.

4.3 Placing Orders

Supplier enquiries are initiated upon receipt of requirements during tender or contract works. Proposals are compared, evaluated and analysed in an agreed manner before proceeding to the next stage of recommendation and/or ordering. Orders are only initiated upon receipt of authorised and completed requisitions. Purchasing documents (including subcontracts and consultant agreements) are written to contain sufficient information to accurately and precisely identify the product or service required, including where appropriate the applicable specification, approvals needed, qualifications of personnel, quality system requirements, preshipment verification and other relevant technical data. Orders are only approved by authorised staff and issued based on standard terms and conditions.

4.4 Completion of Order Delivery

Service deliveries & material shipments are monitored against plans made. Inspections and/or tests are undertaken at the place of manufacture and/or upon delivery according to plans to verify compliance with requirements. These activities and those checks associated with service provisions are planned and carried out during the management of contract processes described under Section 5. Should significant problems arise these are brought to the attention of the relevant procurement function.



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5.0 PROJECT MANAGEMENT AND DELIVERY (Key Processes)

Securing New Contracts (Process B) Preconstruction Phase 5.1 Pretender (Marketing, research, design development, innovation, prequalification)

Research and design development is undertaken and innovation promoted in order to be in a position to continually improve and provide competitive and novel solutions to Clients when opportunities arise. Information and data required by potential customers for the purpose of prequalification, expressing interest, maintenance on approved listings or applications for new listings is managed and controlled. Potential work opportunities are identified from the government Gazette, market and industry sources and where information permits the requirements are determined, resources planned and assigned for prequalification activities. Potential projects of particular interest are highlighted for more intensive investigation, strategy formulation, research, partnering, consultation and review of product and Customer requirements prior to tender stage.

5.2 Tender Stage Estimating and Planning

The requirements specified in the tender documents are determined and a detailed analysis of the work involved and overall risk is undertaken including assessing compliance issues in respect of statutory and regulatory requirements.

Tender processes follow the Group Tendering Manual whereby tender documents are analysed to assess the breakdown of various elements including materials, subcontracts, labour, plant, supervision, Client / Engineer requirements, temporary works, and other items identified in the documents. Market enquiries are made for package of services and supplies. An assessment is made on the site infrastructure and work environment needed to complete contracts. Risks are analysed through assessment of the planning, methods, commercial and contractual review, technical review of the specifications and the ability to comply with the Client's requirements and meet any unstated needs or expectations. Document ambiguities or errors are clarified during the tender process.

Reviews are conducted at various stages of the process to ensure proper and timely co-ordination of input and decision making. For proposals where a tender strategy has been developed the implementation of the strategy will also be monitored and reviewed to ensure alignment. The tender analysis is summarised on a Tender Top sheet with associated backup data for a final review and settlement of the submission to the Client. Records of the results of reviews and any post contract clarifications, negotiations and tender presentations are maintained. For successful tenders Procedure QMS/04 Project Initiation governs the requirements for handovers of tender information to project teams.

Management of Contracts (Process C)

5.3 Project Initiation and Planning

Upon successful contract award or high potential award the relevant Director initiates actions, assigns resources & gives instructions to commence mobilisation.



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Tender handovers are conducted between estimating and operations units and statutory and regulatory issues are identified. Subject to Customer agreement arrangements are put in hand to activate a partnering spirit. A programme is prepared identifying the activities and related processes to be carried out, defining the resources and timescale in a logical sequence in accordance with the accepted start dates and milestones. Risks and opportunities identified at tender stage in accordance with QMS/13 Risk Management are reassessed and response measures confirmed and implemented.

Procedure QMS/04 Project Initiation describes the requirements for initiating a construction project. Procedure QMS/05 Quality Planning is used to document a plan specifying quality objectives, method statements, inspection and test plans, processes or other documents to be established, responsibilities and resources to be applied to each project in order to meet contract and company requirements.

5.4 Quality Control Planning / Inspection and Testing

Materials, plant and equipment delivered to site and workshops will be subject to incoming inspection or test to ensure compliance. Procedure QMS/07 Preparation of Inspection and Test Plans has been established to document plans and responsibilities for quality control activities for construction and fabrication processes including those of a temporary nature. Reference is made to specification acceptance criteria, regulatory requirements, risks, quality objectives and other relevant factors such as subcontractors capability and operator skills. Quality controls included under each plan may include submission approvals, services being provided and incoming material and equipment controls. Plans provide sufficient detail to reference records to be maintained to evidence conformity and to provide the staff position responsible for authorising approval to the next stage.

5.5 Procurement / Subcontracting

Contract stage procurement processes are carried out according to established procedures as described under Section 4 Procurement and under the company Procurement and Subcontracting Manuals. The input for planning these processes is provided by project management who are responsible for the establishing the timing and criteria for supplier / subcontractor selection and for management and control of the subcontracting and supply processes after they have been transferred from the procurement and estimating functions. Variations to these processes may arise for certain types of contracts and these are defined during the quality planning stage. Procurement of services from design consultants shall also be made only upon a detailed assessment & evaluation of their ability, experience & proposal submitted, in consultation with Lambeth as appropriate, and be approved by the Chief Executive.

5.6 Design Control

Gammon identifies all design works required during the tender & project planning stages and ensures that any design works (both permanent & temporary) required are carried out by suitably experienced and qualified designers following relevant codes, standards & government regulatory requirements.



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Permanent works design undertaken internally are carried out & controlled in accordance with Lambeth Associates Limited procedures LAL 20, 40 and 100 relating to Quality Planning, Design Control and Inspection and Testing respectively. Where external design consultants are employed, Gammon ensures that design works are controlled in accordance with agreed procedures.

Temporary works design and construction processes needed for projects are undertaken in accordance with QMS/06 Temporary Works Design and Construction Control.

All design works carried out are further reviewed by designated member(s) of the Gammon project team prior to issue for external approval and/or certification. Any alternative management control measures to be undertaken to ensure design output conforms to requirements are identified during quality planning.

5.7 Control of Construction and Fabrication

Construction and fabrication works are carried under controlled conditions. The initial levels and variety of controls considered necessary are determined during quality planning and will depend on a number of different issues including the type of materials being delivered, the activities, contract requirements and reliability of resources involved.

Construction and fabrication process controls usually include working to detailed product specifications, statutory and regulatory requirements, manuals, codes, programmes of work, documented methods of work, using approved designs, assigning approved personnel, use of suitable monitoring and measuring devices, undertaking supervision to monitor compliance with process plans, carrying out planned inspections and tests and risk response measures, using approved plant, equipment and materials and proper storage and protection & preservation of materials, plant and equipment and of completed works. Achievements are monitored, measured where applicable & reviewed against plans at regular intervals as described under Section 6.3. Project risks are regularly reviewed and risk registers updated in accordance with QMS/13 Risk Management. Control actions are implemented throughout production when planned results are not achieved.

5.8 Control of Customer Property

Any property belonging to the Customer and under Gammon's control shall be identified and checked upon delivery and subject to protection whilst in Gammon's care. The Customer shall be informed & records maintained if the property is found unsuitable.

5.9 Control of Subcontractors / Consultants / Suppliers

Contracts, Construction and Project Managers select Subcontractors / Consultants / Suppliers for a project in liaison with the preconstruction team using established procedures as described under Section 5.5. The levels of control to be exercised over subcontractors / consultants / suppliers will vary according to the nature, risk and impact of work being undertaken and the quality system operated by the organisation, and the existence of any partnership arrangements.



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Subcontractors / consultants / suppliers elements of work are individually considered to take these factors into account when preparing management and quality control tools such as programmes and schedules, quality plans, method statements and inspection and test plans.

Purchase orders, subcontracts & consultancy agreements set out the detailed obligations of the organisation, however responsibility for achieving the related Clients requirements remains with project management under the main contract. When a subcontractor, supplier or consultant is nominated by the Client, Gammon uses their right to object to a nomination where they have knowledge to suggest that their performance may be deficient. Upon an appointment of nominated organisations the management and control processes applied are similar to domestic subcontractors or suppliers unless otherwise defined under quality planning.

5.10 Equipment Maintenance and Calibration

To ensure valid and accurate results consistent with predetermined requirements where necessary any equipment used for fabrication, setting out or compliance testing or measurement shall be maintained, calibrated and/or verified at specified intervals or prior to use. Procedure QMS/08 Control of Inspection Measuring and Testing Equipment (IMTE) defines the minimum requirements governing this process for such equipment. IMTE shall be identified to enable its calibration status to be determined and be protected from damage and deterioration. Fabrication equipment requiring verification and maintenance shall also be effectively maintained. Only qualified staff shall use such equipment. Records of traceability shall be maintained. The processes governing the provision and maintenance of other plant and equipment used (such as cranes, compressors and the like) follows section 5.7.

5.11 Control of Non-conforming Product

Procedure QMS/09 Control of Nonconforming Product is used to define the control, responsibility & authority for dealing with non-conformities detected. These procedures ensure that work, materials, plant or equipment that do not conform to requirements are identified and controlled to prevent further processing without relevant authorisation and action appropriate to the effects or potential effects of the nonconforming product. Records of nonconformities and actions are maintained.

5.12 Contract Review

Projects are subject to regular review to assess aspects of performance achieved, to consider the effectiveness of controls and the need for improvement, and to examine detailed requirements on drawings, in specifications, instructions and other documents provided. Reviews will include a look ahead on risks anticipated and planned responses. Records are maintained of items requiring follow up or clarification. Regular monthly reports are made to record the results of key monitoring activities, changes to risk and the status of performance and to ensure pertinent matters requiring action are highlighted.



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5.13 Project Close Out 5.13.1 Measures are taken to ensure contracted works are protected prior to handover.

The process of handovers to Customers is mutually agreed beforehand and usually involves a series of joint inspections and tests and creation of agreed records of outstanding works or components and where applicable, defects.

5.13.2 During project closing, plans are made to relocate records, demobilise staff, plant,

equipment & facilities taking into account Customer needs, the time and resources required for defect rectification, preparation of as-built records and operating manuals and settlement of commercial matters. Various transfer forms are used to authorise resource demobilisation and wherever possible transfers to other sites. The site area is subsequently cleared and completed to meet requirements.

5.13.3 Communication channels are updated during the maintenance period following the

relocation or transfer of resources. 5.13.4 A risk wrap up will be convened to close out the Risk Register in accordance with

QMS/13. Furthermore as determined and directed by the responsible Director(s), a more comprehensive wrap up to identify the lessons learnt and success factors related to the project and/or a review of specific issues arising, will be carried out for the purpose of identifying opportunities for improvement.

6.0 MEASUREMENT, ANALYSIS AND IMPROVEMENT (Key Process F) 6.1 Customer Satisfaction 6.1.1 Measurement and action

Surveys are used to monitor Customer perceptions as to whether requirements are being met and to gauge expectations. Other methods of formal and informal monitoring and measurement of satisfaction are also adopted including partnering arrangements and Customer meetings. Feedback from surveys and, where applicable partnering processes, is analysed and results reported & communicated to responsible staff for review and follow up. The need for actions is determined using Procedure QMS/10 Corrective and Preventive Action.

6.1.2 Customer communication

A corporate level database of current Customers has been established and company publications are circulated to them from time to time. Selected Customers are invited to participate in company learning activities on a voluntary basis. A web site is also maintained affording Customers access to relevant company information and contacts. Those Customers participating in surveys are provided with information in the form of a newsletter giving results. At project level communication channels are established during project initiation and closely maintained at various levels during the course of the contract.



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6.2 Quality System Audits

The planning & implementation of quality audits and responsibilities are defined under Procedure QMS/11 Internal Audits. Similar procedures can be applied to second party audits on suppliers, subcontractors or consultants. As well as deficiencies or issues for correction the audit process includes the establishment and reporting of corrective action plans and observations which may be potential non-conformities or improvement opportunities.

6.3 Monitoring and Measurement of QMS Processes

Management monitor, and where applicable select suitable performance indicators to measure, review & control process outputs against norms and targets. Regular measurement, analysis & reporting of performance in meeting plans is undertaken where required under each plan strategy, quality objective or target. Typically project process performance is monitored continuously, measured and reported monthly. Management meetings review on-going operation and support processes to monitor progress against planned achievements.

6.4 Corrective and Preventive Action

Procedure QMS/10 Corrective and Preventive Action describes : a) how to plan and take action to eliminate the cause of non-conformities detected in construction and other QMS processes to prevent recurrence; b) how trends and other information are used to identify opportunities to take preventive action prior to the occurrence of non-conformity; c) how the effectiveness of corrective and preventive action taken is reviewed. This procedure also defines the requirements for reviewing customer complaints.

6.5 Analysis of Data Used for Measuring QMS Performance

The following data related to the QMS is to be collected for analysis:

a) Customer Satisfaction Survey results; b) Nonconformities (Nonconformance Reports); c) Subcontractor and Supplier performance ratings; d) Partnering monitoring matrix reports (where applicable); e) Client measurement system results (e.g. PASS, MASS, Contractors

Performance Reports & Rating); f) Internal and External quality audit results; g) Data related to relevant Balanced Scorecard performance; h) Data related to quality objective measures; i) Data on process performance; j) Customer performance reports; and k) Relevant Staff Opinion Survey results.

Depending on the type of data, collection is made daily, monthly, quarterly or half yearly. An analysis is conducted by comparing the current data against targets, previous results, benchmarking between different internal units and where applicable external organisations. Data analysed maybe summarised to highlight the key points or most significant actionable issues arising. Monthly quality reports are collected from projects for compiling information on the QMS performance.



Page 16 of 16

6.6 Review of the Quality Management System (QMS)

Reviews of the corporate QMS are planned and undertaken to cover all relevant inputs at least annually. The frequency of reviews may be adjusted depending on the maturity of the QMS and any problems encountered. Selected performance aspects of the QMS are reviewed regularly during Board meetings, business reviews, Quality Action Committee meetings and during other management meetings as decided by top management. The following shall be covered during the regular reviews:

a) Follow up on previous reviews; b) Results of audits; c) Customer feedback; d) Process performance and product conformity; e) The status of corrective and preventive actions; f) Organisational or other changes that could effect the QMS; and g) Recommendations for improvement.

Regular meetings with project quality representatives are also conducted to assist with the review process and to help share relevant information.

Reviews are used to monitor the use and usefulness of the QMS, its completeness as well as the degree to which the Group Quality Policy and quality objectives are being met. A key aspect of each review is the assessment of opportunities for improvement and the need for changes to the QMS, policy and objectives. The review process provides the authorisation for change and improvement to the QMS including the quality policy and quality objectives, any necessary resources needed to implement actions arising to the service provided to Customers and the quality of products being constructed. The results of the review are recorded in the form of meeting minutes.

CORPORATE QUALITY MANUAL Rev 5 15 October 2010

Appendix 1 Processes needed by the QMS

Corporate Quality Manual Page 1 of 5

Inputs Key Process & Owners

Outputs Criteria and methods for effective control

A

Setting Direction

1. Shareholder requirements

2. Operating Plan 3. Action plans 4. Policies 5. Vision & values 6. Business results 7. Balanced Scorecard

results 8. External environment

data 9. Market projections 10. Competitor related data 11. Customer feedback 12. Staff feedback 13. Regulatory changes 14. HSEQ & Risk Committee

input

1. Chief Executive

2. Chief Operating Officer

3. Executive Directors

4. Directors

Updated Operating Plan New / updated strategic action

plans New / updated policies New Balanced Scorecards New / updated Quality

objectives Meeting records Process action plans Management Circulars Organisational changes Corporate Risk Register

a. External assessments (Shareholder) b. Annual targets established by consensus c. Scanning internal and external factors d. Directors / Top Management conference, gap

analysis, issue identification, establishment of critical success factors, lessons learnt

e. Regular measurement and reporting of results either monthly or quarterly

f. Meetings to review key indicators g. Corporate risk reviews






B Securing New

Contracts

1. BSC targets 2. Listing requirements 3. Quality Objectives 4. Resource availability &

capabilities 5. CSS results 6. Market information 7. Research & development 8. Innovations 9. Tender documents 10. Technical references 11. Performance data 12. Regulatory requirements 13. HSE programmes 14. Safety, environmental

and quality plans 15. Feedback from

completed projects 16. Plant and equipment

enhancements

1. Executive Directors

2. Directors / Head of Estimating / Managing Estimators

3. Bid Managers

Marketing Customer approved listings Weekly tender reports Prequalification documents Project Briefs / planning reports Tender programmes Tender review meeting minutes

/ action lists Enquiries Analysis Tender approvals Tenders Tender presentations Tender feedback and

clarifications Tender registers Plant and equipment monitoring

& test reports Tender Risk & Opportunity

Register

a. Procedures and process flow charts governing key tender activities and approvals

b. Completion and approval of Preliminary Tender Summary

c. Tender activity schedules d. *Initial tender briefing and strategy meeting e. *Mid tender strategy reviews f. Tender reviews including risk and opportunity

workshops/ meetings g. Settlement meetings and completion and

approval of Tender Top Sheet, standard processes in Group Tendering Manual and QMS/13 Risk Management

h. Market data collection, feedback and communication

i. *Strategic review meeting j. Lost tender feedback analysis k. Plant and equipment development plans (* Applicable to key work packages and target projects only)






C Management of

Contracts

1. BSC targets 2. Quality Objectives 3. CSS results 4. Tender handover

documents 5. Contract documents 6. Technical references 7. Regulatory requirements 8. Design briefs & criteria 9. Safety, environmental &

quality system requirements

10. Subcontractor performance results

11. Resource availability information

12. Asset inventory 13. Innovations 14. Subcontractor and

supplier proposals 15. Revised client

requirements

1. Directors 2. Contracts /

General Managers

3. Construction Managers

4. Project Managers

5. Comm Managers

6. Engineering Managers

Construction programmes & control schedules

Quality planning & associated documentation

Subcontract analysis Budgets and forecasts Monthly productivity & financial

performance reports Progress reports to Client Client approved methods,

materials and workmanship Subcontracts Inspection and test records Meeting records &

correspondence Design plans and designs Updated R&O Registers Problem resolution Improvement plans Project diaries Updated subcontractor

Approved Lists Contractual notices Subcontractor performance

reports P&E Maintenance Plans

a. Assignment of competent staff b. Programme and budget agreement,

monitoring and control c. Criteria include project progress against plan

and achievement of milestones d. Monthly measurement of issues effecting the

project e. Approval of methods, plans, designs,

materials and equipment f. Compliance with quality plans and associated

documented procedures g. Safety and environmental management

systems h. Design reviews and independent checks i. Regular contract reviews j. Risk and opportunity reviews k. Subcontractor management plans






D

Resource Management

1. HR Programmes, objectives and targets

2. Tender, legal and regulatory requirements

3. Opinion Survey results 4. Training needs 5. Training & development

opportunities 6. Steelwork orders and

demand projections 7. Plant inventory &

demand projections

1. Executive Directors / Directors

2. Contracts / Construction / General Managers

Training plans & schemes HR appraisal data Individual development plans HR data / skills inventory Code of conduct Employment contracts Competent staff Completed steelwork orders Maintained fabrication

resources, plant & equipment Plants parts inventory,

procurement & maintenance reports

a. Company procedures define policies and controls for HR recruitment and management

b. Training schemes & Training Manuals for graduates

c. Review meetings and supervising Engineers d. Delivery of training against needs e. Training programmes and feedback systems f. Staff turnover tracking g. Staff opinion surveys h. Promotion review board i. Plant maintenance plans and management

reviews

E Procurement

1. Action plans / strategies 2. Product data 3. Supplier data 4. Supplier performance

results 5. Tender specification &

quantities 6. Requisitions 7. Samples 8. Order & delivery

schedules 9. Market prices 10. *Stores inventory

1. Executive Director

2. Head of Procurement

3. Procurement Managers

Updated Approved lists & supplier performance data

Supplier Comparison Customer proposals Purchase orders / agreements Delivery of materials Price trend data Order registers and monthly

order valuations Updated stores inventory Asset inventory & disposal data

a. Company procedures and Procurement Policies govern steps, responsibilities and authority for purchasing

b. Schedules control order cut-off dates for resource planning (output from Key Process C)

c. Customer approvals of samples and product proposals dictate quality standards and acceptance criteria

d. Companywide supplier performance monitoring.






F

Measurement, analysis and improvement

1. Customer survey design, methodology & results

2. Innovation ideas & plans 3. Project requirements 4. Project performance data 5. Corrective action 6. Preventive action 7. Audit process measures 8. Quality objectives and

targets 9. BSC targets 10. Customer performance

results

1. All the above (Directors / Managers)

2. GR&OM / GSM

Company promotional materials Analysis of CSS results Corrective action plans Preventive actions Action plans for improvement Review records Management / Board reports Performance analysis

a. Processes for auditing and conducting Customer Satisfaction Surveys, reviewing feedback / results and initiating actions for key relevant issues.

b. Quality Action Committee review of performance and progress against action plans and identification of improvement opportunities

c. Management meetings to review results against targets set

d. Project and risk wrap up meetings

G Information,

Communication, Control of

documents and records

1. Opinion survey results 2. Contract requirements 3. Comments received 4. Organisational changes 5. New contracts 6. New staff 7. Gammon Fling System 8. Regulatory changes 9. Procedural

developments

1. Directors 2. All the above

Process Owners

Communications via e-mails, intranet, circulars, internal newsletters, notice boards, briefings

Revised document distributions & approvals

Standardised records listings Evidence of conformity &

effective QMS operation Delegated limits of authority

a. Processes governing the whole process of surveying Customer satisfaction by dedicated group

b. Procedures for control of documents and records

c. Timeframes established for document issues d. Trends in satisfaction are plotted for

evaluation of effectiveness of measured in place

e. ERP authorised access control f. Crisis Communications Manual



Page 1 of 1

Appendix 2

Quality Management System Procedures

Group wide application

QMS/01 Control of Documents QMS/02 Control of Records QMS/03 Staff Training and Development QMS/04 Project Initiation QMS/05 Quality Planning QMS/06 Temporary Works Design and Construction Control QMS/07 Preparation of Inspection and Test Plans QMS/08 Control of IMTE QMS/09 Control of Nonconforming Product QMS/10 Corrective and Preventive Action QMS/11 Internal Audits QMS/12 (Not used) QMS/13 Risk Management

Specific design related procedures applicable to staff involved in design

LAL 20 Quality Planning LAL 40 Design Control LAL 100 Inspection and testing

Company procedural manuals

1. Staff Handbook (Hong Kong and Macau versions) 2. Manual of Procurement Policies 3. Subcontracting Manual 4. Commercial Manual 5. Group Tendering Manual 6. *Health, Safety and Environmental Management System 7. *Concrete Technology Department Quality Management System 8. *#Lambeth Associates Limited (LAL) Quality Management System 9. *Gammon Technology Centre (Soil, Rock and Chemical Testing

Laboratory) Quality System

Notes: *These systems are also separately certified systems to ISO 9001, 14001 OHSAS 18001 or 17025 and share a common philosophy and approach with many procedures being similar. #Design related procedures defined under the Lambeth Associates Limited (a wholly owned subsidiary of Gammon) as listed above are also applicable to this QMS when design work is undertaken by Gammon.



Page 1 of 1

Appendix 3

Mission To build for a better quality of life and living environment in a safe and sustainable manner. Vision To be the Contractor of Choice in Hong Kong, China and Southeast Asia. Strategies

To focus on customer needs and develop long-term relationships. To have a comprehensive range of business streams delivering a diversified range of

construction services.

To have best in class management and technical competence. To be technically innovative and flexible in our approach to business. To participate throughout the project life-cycle from idea through construction,

operation and maintenance to decommissioning and renewal.

To grow organically and through acquisition in existing and new markets. Values At Gammon, our ultimate goal is to deliver a high level of quality to our customers. In this, we mean not only the quality of our built products and service outcomes, but also the quality of the way in which they are delivered, reliably, safely and responsibly. We believe that we can best deliver the level of quality to which we aspire by concentrating on three core values Safety, Integrity and Excellence: -

Safety - we actively challenge the construction process to reduce and remove risk. Integrity - we always do what is right. Excellence - we strive to improve and exceed expectations.

(Note: Further details concerning these values can be viewed on the Gammon Website at www.gammonconstruction.com)

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