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2012 was a year that began with much optimism. We finally had the infrastructure in place to put us on equal footing with the best competitors in the industry. We focused on execution. We worked closer with our project foremen to give them the tools to succeed on site. We focused on getting better information from the estimate to project progress meetings. The office improved the communication link to the field. Although our labor cost average remained a concern with the help of project foremen we could do a better job of recognizing the cause. Overall our performance improved consistently on every project. We continue to grow and evolve but our challenge remains the cost at which we do. Our decision to work for another subcontractor on a major project in Saskatoon led us to commit time and resources to a situation that ultimately failed. The experience left us bowed but not broken and we dug deep and managed through the process successfully. This experience will dedicate us to hone our strategic decision of having a better project mix working to solidify our process and playing to our strengths. We continue to chase profitability and are improving in the areas that will help us to achieve that goal. Looking at project statements we experienced tremendous improvement over past fiscal years and interestingly achieved a greater market share of the commercial industrial sector versus multi residential. From a revenue perspective commercial projects garnered almost 35 of the pie but accounted for over 50 of our contribution margin compared to the residential sector. We do see the progression to an increase in commercial projects as a natural one for G Mechanical and the project statements support that evolution. The economy continues to bear fruit and we see no slowdown with the project opportunities in the market place. We have done a tremendous job of leveraging positive experiences with General Contractors this year and are excited where those relationships will take G Mechanical in the New Year. TJ Smith 2012 ANNUAL REPORT 12