Sino Great Wall Co., Ltd.
2018 Annual Report
April 2019
I. Important Notice, Table of Contents and DefinitionsThe Board of Directors and the directors, Supervisory Committee andsupervisors and Senior Executives of the Company hereby warrant that at theyear, there are no misstatement, misleading representation or importantomissions in this report and shall assume joint and several liability for theauthenticity, accuracy and completeness of the contents hereof.
Mr. Chen Lue, The Company leader, Ms. Yang Chunling, Chief FinancialOfficer and the person in charge of the accounting department (the person incharge of the accounting) hereby confirm the authenticity and completeness ofthe financial report enclosed in this annual report.
Directors apart from the below mentioned have attended the Meeting forannual report deliberation:
| Absent Director Name | Absent Director Title | Absent Reason | Attorney Name |
| Jiang Chongguang | Independent Director | Work Arrangements | Yu Haichun |
Due to the inability to obtain sufficient and appropriate audit evidence asthe basis for expressing audit opinions on the financial statements, ReandaPublic Certified Accountants (LLP) issued an audit report that could reservationopinions on the company. The board of directors and the board of supervisors ofthe Company have made detailed explanations on relevant matters, to whichinvestors shall pay attention.
Any plans for the future and other forward-looking statements mentioned
in this Report shall Not be considered as absolute promises of the Company toinvestors. Therefore, investors are kindly reminded to pay attention to possibleinvestment risks.
Possible risks faced by the Company and countermeasures have beenexplained in “Operating Performance Discussion and Analysis” herein, whichinvestors are kindly reminded to pay attention to.
The Company has no plan of cash dividends carried out, bonus issued andcapitalizing of common reserves either.
Table of Contents
I. Important Notice, Table of Contents and Definitions ........................................................................................................................... 2
II. Basic Information of the Company and Financial index ..................................................................................................................... 6
IV. Management’s Discussion and Analysis .......................................................................................................................................... 16
V. Important Events ............................................................................................................................................................................... 44
VI. Change of share capital and shareholding of Principal Shareholders ............................................................................................ 148
VII. Situation of the Preferred Shares .................................................................................................................................................. 156
VIII. Information about Directors, Supervisors and Senior Executives ............................................................................................... 157
IX. Administrative structure ................................................................................................................................................................ 171
X. Specifications on Company Securities ............................................................................................................................................ 183
XI. Financial Statements ..................................................................................................................................................................... 184
XII. Documents Available for Inspection ............................................................................................................................................ 355
Definition
| Terms to be defined | Refers to | Definition |
| Company Law | Refers to | Company Law of the People’s Republic of China |
| Securities Law | Refers to | Securities Law of the People’s Republic of China |
| “CSRC” | Refers to | China Securities Regulatory Commission |
| Company, The Company, Sino Great Wall | Refers to | Sino Great Wall Co., Ltd. |
| Sino International | Refers to | Sino Great Wall International Engineering Co., Ltd. |
| Reanda | Refers to | Reanda Certified Public Accountants LLP |
| SSE | Refers to | Shenzhen Stock Exchange |
| Shenzhen Regulatory Authority | Refers to | Shenzhen Regulatory Authority of China Securities Regulatory Commission |
| Reporting period | Refers to | January 1, 2018 to December 31, 2018 |
| Wuhan Commercial Worker Hospital | Refers to | Wuhan Commercial Worker Hospital Co., Ltd. |
| Union Holdings | Refers to | Union Holdings Co., Ltd. |
| Rich Crown Investment | Refers to | Rich Crown Investment Co., Ltd. |
| Baden-Baden Hospital | Refers to | Acura Kliniken Baden-Baden GmbH |
II. Basic Information of the Company and Financial index
I．Company Information
| Stock abbreviation: | Sino Great Wall; Sino-B | Stock code： | 000018; 200018 |
| Change of stock Abbreviation（If any） | Nil | ||
| Stock exchange for listing | Shenzhen Stock Exchange | ||
| Name in Chinese | 神州长城股份有限公司 | ||
| Chinese Abbreviation | 神州长城 | ||
| English name (If any) | Sino Great Wall Co., Ltd. | ||
| English Abbreviation (If any) | Sino Great Wall; Sino-B | ||
| Legal Representative | Chen Lue | ||
| Registered address | 26 Kuipeng Road, Kuiyong Town, Longgang District, Shenzhen | ||
| Postal code of the Registered Address | 518119 | ||
| Office Address | Sino Great Wall Building, No.3 Jinxiu Street,Economic Technology Development Zone , Beijing | ||
| Postal code of the office address | 100176 | ||
| Internet Web Site | www.sgwde.com | ||
| 000018sz@sina.com | |||
II. Contact person and contact manner
| Board secretary | Securities affairs Representative | |
| Name | Yang Chunling | Sun Yu |
| Contact address | Sino Great Wall Building, No.3 Jinxiu Street,Economic Technology Development Zone , Beijing | Sino Great Wall Building, No.3 Jinxiu Street,Economic Technology Development Zone , Beijing |
| Tel | 010-89045855 | 010-89045855 |
| Fax | 010-89045856 | 010-89045856 |
| 1208806865@qq.com | 000018sz@sina.com |
III. Information disclosure and placed
| Newspapers selected by the Company for information | Securities Times and Hongkong Commercial Daily. |
| disclosure | |
| Internet website designated by CSRC for publishing the Annual report of the Company | http: // www.cninfo. com. cn |
| The place where the Annual report is prepared and placed | Securities Department, Sino Great Wall Building, No.3 Jinxiu Street, Economic Technology Development Zone, Beijing |
IV. Changes in Registration
| Organization Code | 91440300618801483A |
| Changes in principal business activities since listing (if any) | Nil |
| Changes is the controlling shareholder in the past (is any) | Nil |
V. Other Relevant Information
CPAs engaged
| Name of the CPAs | Reanda Certified Public Accountants LLP |
| Office address： | 11/F, Building E, Sino-Ocean International, No.210, Ciyuansi Beili, Chaoyang District, Beijing, PRC |
| Names of the Certified Public Accountants as the signatories | Wang Xinyu, Zhou Zhonghua |
The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.√ Applicable □Not applicable
| Sponsor Name | Office address | Representatives | Period of supervision and guide |
| Huatai United Securities Co., Ltd. | 6/F, A Unit, Fengming International Building, No.22, Fengsheng Hutong, Xicheng District, Beijing | Wu Wenmin, Fang Yuhui | September 27, 2015 to December 31, 2018 |
The Financial advisor performing persist ant supervision duties engaged by the Company in the reporting period√ Applicable □Not applicable
| Advisor Name | Office address | Representatives | Period of supervision and guide |
| Huatai United Securities Co., Ltd. | 6/F, A Unit, Fengming International Building, No.22, Fengsheng Hutong, Xicheng District, Beijing | Wu Wenmin, Fang Yuhui | September 27, 2015 to December 31, 2018 |
VI. Summary of Accounting data and Financial index
May the Company make retroactive adjustment or restatement of the accounting data of the previous years
□Yes √No
| 2018 | 2017 | Changed over last year (%) | 2016 | |
| Operating revenue | 2,426,987,687.02 | 6,497,124,980.52 | -62.65% | 4,664,999,117.17 |
| Net profit attributable to the shareholders of the listed company (Yuan) | -1,704,739,736.40 | 380,090,990.82 | -548.51% | 473,661,862.67 |
| Net profit after deducting of non-recurring gain/loss attributable to the shareholders of listed company (Yuan) | -1,411,440,495.34 | 377,087,197.69 | -474.30% | 470,274,602.37 |
| Net cash flow generated by business operation, net (Yuan) | 827,879,055.45 | -1,781,868,618.65 | -146.46% | -1,687,875,813.94 |
| Basic earning per share (Yuan/Share) | -1.004 | 0.220 | -560.45% | 0.28 |
| Diluted gains per share (Yuan/Share) | -1.004 | 0.220 | -560.45% | 0.28 |
| Net asset earning ratio (%) | -142.85% | 19.35% | -162.20% | 31.18% |
| End of 2018 | End of 2017 | Changed over last year (%) | End of 2016 | |
| Gross assets | 9,603,455,934.89 | 11,667,845,186.30 | -17.69% | 7,986,178,961.63 |
| Net assets attributable to shareholders of the listed company (Yuan) | 235,202,473.51 | 2,151,482,467.52 | -89.07% | 1,777,948,117.49 |
VII. The differences between domestic and international accounting standards
1．Simultaneously pursuant to both Chinese accounting standards and international accounting standardsdisclosed in the financial reports of differences in net income and net assets
□ Applicable√ Not applicableNon-existence
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas andChinese accounting standards.
□ Applicable√Not applicableNon-existence
VIII. Main Financial Index by Quarters
Unit: Yuan
| First quarter | Second quarter | Third quarter | Fourth quarter | |
| Operating income | 923,442,740.92 | 663,528,834.32 | 672,083,613.81 | 167,932,497.97 |
| Net profit attributable to the shareholders of the listed company | 218,523,628.75 | -74,524,173.03 | -118,516,821.76 | -1,730,222,370.36 |
| Net profit after deducting of non-recurring gain/loss attributable to the shareholders of listed company | 56,977,615.63 | -65,023,592.77 | -144,157,168.17 | 1,284,719,983.995 |
| Net Cash flow generated by business operation | 809,676,459.22 | 288,487,906.41 | 189,148,952.32 | 459,434,262.506 |
Whether significant variances exist between the above financial index or the index with its sum and the financial index of thequarterly report as well as semi-annual report index disclosed by the Company.□ Yes √No
IX. Items and amount of non-current gains and losses
√Applicable □Not applicable
Unit: Yuan
| Items | Amount (2018) | Amount (2017) | Amount (2016) | Notes |
| Non-current asset disposal gain/loss (including the write-off part for which assets impairment provision is made) | -1,181,511.77 | -150,250.00 | -564,833.40 | |
| Government subsidy recognized in current gain and loss (excluding those closely related to the Company’s business and granted under the state’s policies) | 105,536,702.00 | 2,211,128.89 | 108,121.33 | |
| Profit due to the situation where investment costs for the company to obtain subsidiaries, associates and joint ventures are lower than the enjoyable fair Value of identifiable net assets of investees when making investments | 1,783,284.99 | |||
| Profit/loss on fair value changes of transactional financial assets and liabilities & investment profit on disposal of transactional financial assets and liabilities as well as financial assets available for | 443,065.98 |
| sale, except for effectively hedging business related to normal business operations for the Company | ||||
| Other non-operating income and expenditure except for the aforementioned items | -397,654,450.87 | 1,444,308.74 | 5,296,814.65 | |
| Less: Amount of influence of income tax | 501,394.50 | 3,668,000.60 | ||
| Influenced amount of minor shareholders’ equity (after tax) | -19.58 | 11,192.65 | ||
| Total | -293,299,241.06 | 3,003,793.13 | 3,387,260.30 | -- |
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 oninformation disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses andits non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosurefor Companies offering their securities to the public-non-recurring Gains and losses which have been defined asrecurring gains and losses, it is necessary to explain the reason.□ Applicable√ Not applicableNone of Non-recurring gain /loss items recognized as recurring gain /loss/items as defined by the informationdisclosure explanatory Announcement No.1- Non-recurring gain/loss in the report period.
III. Business Profile
Ⅰ.Main Business the Company is Engaged in During the Report Period
Whether the company needs to comply with the disclosure requirements of the particular industryYesCivil Engineering ConstructionThe company shall comply with disclosure requirements in Shenzhen Stock Exchange Industry Information Disclosure GuidelinesNo. 7-the Listed Company Engagement in Civil Engineering Construction Business(I) Company main business scope and business model
Within the report period, the core business of Sino Great Wall is the engineering construction and medical treatment and healthindustry investment and management. The engineering construction mainly includes the international EPC and domestic PPPbusiness. The medical treatment and health industry investment and management mainly comprises the hospitals and medicaltreatment operation management through engagement in the industry through several ways including acquisition of existing hospitals,construction of new hospitals as well as building and investing the hospital PPP project, etc. At present, the company business coversthe house building, roads and bridges, power and chemical industry as well as medical treatment and health, etc. among manycountries and regions in Southeast Asia, the Middle East, South Asia and Africa, etc.
The company mainly engages in the foreign engineering construction through EPC, namely contracting the whole process or
several phases among the construction project design, purchase, construction and trail operation, etc. through integrating thehigh-quality resources at home and abroad. For the domestic engineering construction, the company mainly adopts PPP mode,namely the project operation mode through cooperation of the governmental and social capital. Under such mode, the governmentwill select the social capital with the investment and operation management capacity through the competitive ways and both partiesshall enter into the contract subject to the equality-based consultation principle, under which, the social capital shall provide publicservices and the government shall pay the consideration against the social capital based on the public service achievement assessmentresult.
The Company business includes the project development, financing, design, procurement and construction, etc. and it will alsoparticipate in investment in and provision of operation services for high-quality projects with good development prospect.(II) Engineering construction industry macro-situation, competition pattern and position in industry
Foreign engineering: with the comprehensive advance of the “One Belt and One Road” initiative, the Company’ s contractedengineering projects industry for other countries is in the good growth momentum wholly with continuous expansion of the industryscale. During the reporting period, the company was awarded with the 138th medal in the “2018 ENR Top 250 InternationalContractors” (ranked 39th among Chinese enterprises and 1st among Chinese private enterprises). According to statistics from theMinistry of Commerce and the State Administration of Foreign Exchange, China's industry-wide foreign direct investment in 2018was USD 129.83 billion, with a year-on-year increase of 4.2%. Turnover from overseas contracted projects reached USD 169.04billion, with a year-on-year increase of 0.3%. The turnover of overseas contracted projects in 63 countries and regions along the “theBelt and Road” was USD 89.33 billion, accounting for 52% of the total for the same period. The Chinese government has continuedto push forward the construction of "the Belt and Road" and has strengthened strategic docking with countries and regions along theline. It has embraced a broader cooperation space in infrastructure construction, metallurgical engineering, equipment manufacturingand other fields, and created more market opportunities for the company’s overseas business expansion.(III) Company’s qualification
At present, the Company possesses the construction certificates such as Constructional Engineering Construction GeneralConstructing-Grade I, Highway Engineering General Constructing-Grade I; Municipal utility construction General
Constructing-Grade I; Urban and road lighting engineering Constructing-Grade I；Environmental engineering Constructing-Grade I;Design and construction of architectural decoration Constructing-Grade I, Electromechanical Equipment Installation ProjectSpecialized Contracting-Grade I, Construction Curtain Wall Project Specialized Contracting- Grade I, Fire Control Facilities ProjectSpecialized Contracting-Grade I, Possessing 10 first-class qualifications of professional contracting for engineering of waterproof,anti-corrosion and insulation; meanwhile, possesses two class-a special-grade design qualifications of building curtain wallengineering design and architectural decoration engineering design; in addition, possesses 5 second-class qualifications, including thesecond-class general contracting qualification of construction of water conservancy and hydropower projects, the second-class ofgeneral contracting of metallurgy engineering construction, the second-class qualification of professional contracting of steel structureengineering, the second-class qualification of professional contracting of electronic and intelligent engineering and the second-classgeneral contracting qualification of mechanical and electrical engineering construction, and possesses the third-class generalcontracting qualification of railway construction, the specialized contracting qualification for special projects and so forthqualifications. The scope covers architecture, highways, railways, municipal utilities, water conservancy and hydropower,petrochemical, electric power and other specialties. For the overseas market, the Company has always been developing the market,accumulating the talent and technology and improving the adaptive capacity of oversea standards and the local project managementability continuously for many years. For the domestic business, accumulates experience in aspects of the project bidding, financingways and operation management and forms its unique operation ways.(IV) Financing Situation
During the reporting period, the company's financing structure was reasonable and it better supported thecompany's business development. The financing during the reporting period is as follows:
Unit: Yuan
| No | Financing Channel | December 31, 2018 | Financing cost range | Structure |
| 1 | Bank loans | 1,664,568,470.43 | 5.2%-8.1% | 1年以内 |
| 160,440,152.95 | 3.5%-5.2% | 1-2年 | ||
| - | - | 2-3年 | ||
| Subtotal | 1,825,008,623.38 |
| 2 | Trust financing | 666,666,608.68 | 6.09%-9.9% | 1年以内 |
| 876,250,000 | 6.65%-9.9% | 1-2年 | ||
| 300,000,000 | 6.56% | 2-3年 | ||
| Subtotal | 1,842,916,608.68 | |||
| 3 | ||||
| Bond financing | 100,000,000 | 6.2% | 1-2年 | |
| 145,000,000 | 6.2% | 2-3年 | ||
| Subtotal | 345,000,000 | |||
| 4 | Notes | 211,334,653.11 | 0-10% | 1年以内 |
| Total | 4,224,259,885.17 |
(V) Quality Control System
Quality is the life of engineering construction companies. Quality is the best display and promotion of the image ofconstruction companies. The company has always attached great importance to project quality management, has a dedicated QC(Quality Control) department, and is fully responsible for the management of the company’s construction projects, forming a set of
effective and mature quality control processes and systems. Quality control measures have been continuously optimized to cover allaspects and operate efficiently; quality management is scientific and standardized. During the reporting period, the company did nothave major project quality problems.(VI) Safety Production Operation
The company has firmly established the guiding principle of “safety first, prevention first”, attaches great importance to safetyproduction, carefully organizes safety education and training, adheres to the safety red line, strictly implements the safety productionresponsibility system, and conducts in-depth safety inspections and hidden trouble investigations, enhances safety precautions, andcreates a safe, harmonious, standardized construction environment, and constantly improves the level of precision management ofsafety production. During the reporting period, the company did not have major safety issues, all work was carried out in an orderlymanner, and the construction was safe and stable.
Ⅱ.Major Changes in Main Assets
1. Major Changes in Main Assets
| Main | Major changes |
| Equity assets | The slight change |
| Fixed assets | Mainly due to the scrapping of vehicles and the sale of houses |
| Intangible assets | Mainly due to the transfer of Sino Great Wall Intelligent Real Estate (Zhanjiang) Co., Ltd. to reduce intangible assets |
| Construction in process | Mainly that the Sino Zhigu Industry (Yueyang) Co., Ltd. and Chengwu County Shenguang Project Management Co., Ltd. merge the project under construction |
2. Main Conditions of Overseas Assets
□ Applicable□√ Not applicable
Ⅲ.Analysis On core Competitiveness
Whether the company needs to comply with the disclosure requirements of the particular industryYesCivil Engineering Construction
Sino Great Wall is a leading construction & engineering contractor in China with business covers various types construction &engineering contracting. With leading projects such as PM, EPC, BT, BO and PPP, etc., The implementation of the National Strategyof “One Belt, One Road” will provide a good opportunity for the company's overseas business development. The company continuesto increase efforts to open up overseas markets, thus the overseas project orders and the revenue have maintained a rapid annualgrowth rate. Domestic business, With the continuous promotion of national PPP projects. The company will also usher in a betterdevelopment opportunity, the company's comprehensive strength, overseas influence and market competitiveness have increased yearby year.
1. Strategic positioning advantage
The “Construction & Engineering contracting” and “Medical & Health Business” will be the company’s two strategic
directions for future development. In 2013, the company set up the development goal “Making bigger and stronger overseas business,and to become the world's leading international comprehensive construction & building service provider”. In 2016, the company setup the “Medical & Health business” as another essential development direction. All of those are to comprehensively cater the needsof the national strategies of “One Belt, One Road” and “Medical & Health Industry Development”. The good prospects of “One Belt,One Road” projects and “Medical & Health Industry” will provide a broad market space for the company’s business development. Interms of engineering contracting, the early-development advantage of overseas business enables the company to have richmanagement experiences and high-quality customers and establish talented teams, thus laid a solid foundation for the company’soverseas business development. In terms of the Medical & Health business, the company has set up project teams in many domesticplaces such as Sichuan, Henan and Hubei, and the company has purchased Wuhan Commercial Worker Hospital and won the bids ofmany medical PPP project. Also, the company has established cooperative relationships with many hospitals and has recruited manykinds of talents in terms of medical, hospital management, investment and financing etc., thus provided a strong support for theMedical & Health business development.2. Standardized and high-efficient management system, fully market-oriented operation mechanism
With the increasingly expanding of the company scale and business scope, the management for the company is becoming morecomplex. However, the company timely set up the sound management system and the authorization system to standardize theapproval procedures, reduce the management hierarchy tiers and improve the work efficiency and execution, thus ensured theefficient operation of the company’s business operation. For the operation mechanism, the company bravely faces the fiercecompetition in the market, adheres to the market-oriented development, respects the objective laws of the market and constantlyimproves its management level, thus to timely response to changes in the market and continuously improve the company's marketimage, construction quality and profitability.3. Integrated design and construction advantages
The company has a wide range, high-ranking construction qualifications, and the company has integrated design and constructionexperiences and good project management capabilities, so the company is able to provide integrated design and construction servicesin terms of civil engineering, decoration, mechanical and electrical installation and full industry chain of curtain wall, and thecompany can independently complete the whole process of construction project. The company can form a comprehensive advantagein the field of building engineering, so it can reasonably schedule the procurement, labor use and construction plan, as well as thecompany can constantly optimize the process to reduce the project costs. The company’s excellent design ability, sound constructionquality, high-efficient construction planning and the comprehensive high-quality service greatly enhanced the customers’satisfaction.4. Costs advantages and quality-control advantages
The core management staff of the company all have more than 10 years experiences of building and engineering construction.Upon the deep understanding of the industry, the company established a relatively perfect material procurement, labor managementand quality control system. Through the price ceiling mode for procurement, the company screens the suppliers in the early stage of aproject, thus to ensure that the procurement costs of the project materials would be in a reasonable scope. By locking the technicalrequirements and time requirements of the project, the company can lock the labor costs. The company has set up strictquality-control system for the design drawing, raw material procurement and each aspect of the project construction management, thusto strictly ensue the project construction quality, so the company has won good reputation and got trust and recognition by a greatnumber of customers.
IV. Management’s Discussion and Analysis
I. Overview
2018 was an extremely difficult year for the company, with the global economic situation increasingly complicated,international trade protection on the rise, growth rate of foreign engineering contracting industry slowed down and competitionintensified. Due to the national capital management policy at the beginning of 2018 and the environmental impact of deleveraging,the company was subjected to loan recovery with different degrees such as loan withdrawal and loan cut, resulting in the liquiditydifficulties of the company's operating funds and triggering a series of chain reactions of operating difficulties. Overdue repaymentappeared in the financing of the company, its subsidiaries and banks and other financial institutions. Major accounts, some assets andshares of subsidiaries were frozen by overdue financial institutions in pre litigation preservation, further causing some employees ofthe company to default on their wages, some suppliers to default on their debts, and bidding for new projects was also greatlyaffected. The company's operating income has been greatly reduced, and the annual operating results in 2018 show losses for the firsttime. In 2018, the company realized operation income of RMB 2.431 billion, a decrease of 62.58% from the last year; realized theoperating profits of RMB- 1.48 billion, a decrease of 391.32% from the last year; and the net profit attributable to the parentcompany was RMB -1.736 billion, a decrease of 556.66% from the last year.
In terms of engineering construction, the company overcame difficulties and obstacles, rooted in the existing business area andscale, and continued to steadily expand its business. During the reporting period, the company faced difficulties both domesticallyand abroad. In terms of foreign business, the company undertook the traditional construction business-Cambodia Mekong River VillaProject; Meanwhile, it actively participated in investment and financing, development, construction and operation projects, andjointly develops Dongpoxi Comprehensive Park in Laos with international engineering companies; In addition, It completed anddelivered the residential and commercial buildings of the stock project NAGA Phase II Integrated entertainment in Cambodia and theCambodia Haoli Diamond Project, and maintained the normal operation of the stock projects in Cambodia, Russia, Sri Lanka,Malaysia, Algeria and Myanmar regions. In terms of domestic business, the company has successfully connected with strategicprojects such as Chengdu Rennan Square Project, Future New World Project, Xinhui Hilton Hotel and Villa Project. Meanwhile, itactively expands its major clients and reaches strategic cooperation intentions with well-known real estate developers and investmentcompanies, which are expected to sign high-value business contracts with the company in 2019.
The medical and health industry is an important pillar in the company's transformation and development strategy. Due to theinfluence of the adjustment of national financial policies, the company actively expanded the traditional construction business ofinfrastructure, utilized existing resources, and strengthened horizontal integration. It is expected that some breakthroughs will bemade inMedical engineering and proton therapy projects in the future.
In smart housing sector, it will locate the trend and accurately position it, and comprehensively push forward theimplementation of strategic development goals. In recent years, the Chinese government has successively issued relevant policies tovigorously promote the transformation of the construction industry to construction industrialization. The company has set up a “SinoGreat Wall Intelligence Residential Co, LTD.” in Zhanjiang, Guangdong, to produce fabricated supporting products. During thereporting period, the construction of the base's factory building framework was basically completed. Due to the financialenvironment, the production line has not yet been established and put into production. Meanwhile, the company promoted the ruralassembly business and made a preliminary layout in key regions of the country.
Faced with the financial difficulties, the company has made concerted efforts from top to bottom to conquer the difficulties. Ithas successively carried out a series of reforms and innovations in enterprise management mode, timely investigated and re-electedboard members, integrated the senior management team, re-organized the business sectors, defined the responsibility assessment,strengthened the asset preservation, comprehensively optimized control and other measures to effectively stimulate enterprise
development potential in adversity.
Ⅱ. Main business analysis
1. General
Refer to relevant contents of “1.Summarization” in “Discussion and Analysis of Management”.
2. Revenue and cost
(1) Revenue structure
Unit: Yuan
| 2018 | 2017 | Year-on-year increase/decrease | |||
| Amount | Proportion | Amount | Proportion | ||
| Total of operating revenue | 2,426,987,687.02 | 100% | 6,497,124,980.52 | 100% | -62.65% |
| On industry | |||||
| EPC | 1,853,545,312.44 | 76.37% | 4,268,109,664.43 | 65.69% | -56.57% |
| Engineering design | 6,971,646.83 | 0.29% | 19,119,855.94 | 0.29% | -63.54% |
| Decoration work | 430,784,976.15 | 17.75% | 2,015,057,491.48 | 31.01% | -78.62% |
| Medical Service revenue | 135,685,751.60 | 5.59% | 132,427,255.48 | 2.04% | 2.46% |
| Other | 62,410,713.19 | 0.96% | -100.00% | ||
| On product | |||||
| EPC | 1,853,545,312.44 | 76.37% | 4,268,109,664.43 | 65.69% | -56.57% |
| Engineering design | 6,971,646.83 | 0.29% | 19,119,855.94 | 0.29% | -63.54% |
| Decoration work | 430,784,976.15 | 17.75% | 2,015,057,491.48 | 31.01% | -78.62% |
| Medical Service revenue | 135,685,751.60 | 5.59% | 132,427,255.48 | 2.04% | 2.46% |
| Other | 62,410,713.19 | 0.96% | -100.00% | ||
| On Area | |||||
| Domestic | 1,725,531,194.49 | 71.10% | 3,750,012,620.09 | 57.72% | -53.99% |
| Overseas | 701,456,492.53 | 28.90% | 2,747,112,360.43 | 42.28% | -74.47% |
(2) Situation of Industry, Product and District Occupying the Company’s Business Income and OperatingProfit with Profit over 10%
√ Applicable □Not applicableWhether the company needs to comply with the disclosure requirements of the particular industryYesCivil Engineering Construction
Unit: Yuan
| Turnover | Operation cost | Gross profit rate (%) | Increase/decrease of revenue in the same period of the previous year (%) | Increase/decrease of business cost over the same period of previous year (%) | Increase/decrease of gross profit rate over the same period of the previous year (%) | |
| On Industry | ||||||
| EPC | 1,853,545,312.44 | 1,854,176,312.80 | -0.03% | -56.57% | -38.80% | -29.05% |
| Decoration work | 430,784,976.15 | 494,437,274.02 | -14.78% | -78.62% | -70.55% | -31.47% |
| On Product | ||||||
| EPC | 1,853,545,312.44 | 1,854,176,312.80 | -0.03% | -56.57% | -38.80% | -29.05% |
| Decoration work | 430,784,976.15 | 494,437,274.02 | -14.78% | -78.62% | -70.55% | -31.47% |
| On Area | ||||||
| Domestic | 1,725,531,194.49 | 1,817,363,558.28 | -5.32% | -53.99% | -40.14% | -24.36% |
| Overseas | 701,456,492.53 | 632,137,076.59 | 9.88% | -74.47% | -65.84% | -22.76% |
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based onlatest on year’s scope of period-end.□ Applicable √Not applicable
(3) Whether the Company’s Physical Sales Income Exceeded Service Income
□ Yes √No
(4) Degree of Performance of the Significant Sales Contract Signed up to this Report Period
√ Applicable □Not applicableWhether the company needs to comply with the disclosure requirements of the particular industryYes
Civil Engineering ConstructionThe company is required to comply with the disclosure requirements of No. 7 of Shenzhen Stock Exchange's Industry InformationDisclosure Guidelines - Listed Companies Engaged in Civil Engineering Construction Business.
| Major Projects | Business Mode | Price Setting Policy | Repayment Arrangements | Financing Methods | Preferential Policies | Franchising (If Applicable) | Operating Period (If Applicable) | Source of Income And Attribution (If Applicable) | Guaranteed Base Operations (If Applicable) | Investment Income Protection Measures (If Applicable) |
| Subcontracted Project of the Military Academy of Kuwait National Ministry of Defence | EPC General contracting | Negotiated pricing | Execute according to the contract | Bank loan | None | Not applicable | Not applicable | Construction income | Not applicable | Not applicable |
| Qatar Newport NPP/0057 Housing and Infrastructure Engineering | EPC General contracting | Negotiated pricing | Execute according to the contract | Bank loan | None | Not applicable | Not applicable | Construction income | Not applicable | Not applicable |
| 5 million tons / year refinery project in Cambodia | EPC General contracting | Negotiated pricing | Execute according to the contract | Bank loan | None | Not applicable | Not applicable | Construction income | Not applicable | Not applicable |
| Cambodia Haoli Diamond Project (Phnom Penh National Assembly | EPC General contracting | Bidding pricing | Execute according to the contract | Bank loan | None | Not applicable | Not applicable | Construction income | Not applicable | Not applicable |
| Street Commercial/Residential Area Development Project) | ||||||||||
| PPP project of Baiyang Lake Headquarters Economic Port, Xingang District, Chenglingji, Hunan Province | PPP mode | Bidding pricing | Execute according to the contract | Bank loan | None | Not applicable | Not applicable | Construction income | Not applicable | Not applicable |
| Chongqing Yinglong Lake Rural Revitalization Demonstration Park Project | Investment | |||||||||
| Development of the Dongpoxi Special Economic Zone in Vientiane, Laos － EPC General Contract | EPC General contracting | Negotiated pricing | Execute according to the contract | Bank loan | None | Not applicable | Not applicable | Construction income | Not applicable | Not applicable |
| General contracting of 5000 sets of modern affordable | EPC+F General contracting | Negotiated pricing | Execute according to the contra | Bank loan | None | Not applicable | Not applicable | Construction income | Not applicable | Not applicable |
| housing projects in the Republic of Congo | ct |
Status of completed (completed acceptance) project during the reporting period:
Unit: Yuan
| Business Model | Number of Projects | Item Amount | Acceptance Situation | Revenue Confirmation | Settlement Situation | Repayment Situation |
| EPC General contracting | 1 | 1,100,000,000.00 | Handed over | Revenue confirmed | Unsettlement | 1,080,142,722.26 |
Status of completed (non-completed acceptance) project during the reporting period:
Unit: Yuan
| Business Model | Number of Projects | Item Amount | Accumulated Confirmed Revenue | Amount of Non-completed Parts |
| PPP mode | 1 | 2,000,000,000.00 | 9,137,796.59 | 1,990,862,203.41 |
| EPC+F General contracting | 1 | 2,000,000,000.00 | 0.00 | 0.00 |
| Investment | 1 | 10,000,000,000.00 | 0.00 | 0.00 |
Unit: Yuan
| Project Name | Completion | Business Model | Start Date | Duration | Percentage of Completion | Current Confirmed Revenue | Accumulated Confirmed Revenue | Repayment Situation | Receivables Balance |
| Subcontracted Project of the Military Academy of Kuwait National Ministry of Defence | 2,100,000,000.00 | EPC General contracting | June 21, 2015 | 1,460 days | 57.00% | 1,174,079,614.23 | 483,557,587.63 | 716,094,881.32 | |
| Qatar Newport NPP/0057 Housing and Infrastructure Engineering | 1,500,000,000.00 | EPC General contracting | March 20, 2015 | 971 days | 100.00% | 54,541,245.26 | 1,981,727,577.07 | 1,320,438,761.02 | 674,079,636.78 |
| 5 million | 4,268,00 | EPC | May 4, | 1,381 | 9.00% | 0.00 | 369,885,008. | 172,83 | 197,051,27 |
| tons / year refinery project in Cambodia | 0,000.00 | General contracting | 2017 | days | 26 | 3,735.06 | 3.20 | ||
| Cambodia Haoli Diamond Project (Phnom Penh National Assembly Street Commercial/Residential Area Development Project) | 1,100,000,000.00 | EPC General contracting | August 14, 2014 | 1,996 days | 100.00% | 0.00 | 1,070,958,575.31 | 1,080,142,722.26 | 2,766,807.52 |
| PPP project of Baiyang Lake Headquarters Economic Port, Xingang District, Chenglingji, Hunan Province | 2,000,000,000.00 | PPP mode | November 01, 2017 | 1,095 days | 9,137,796.59 | 9,137,796.59 | - | 10,051,576.25 | |
| Chongqing Yinglong Lake Rural Revitalization Demonstration Park Project | 10,000,000,000.00 | Investment | |||||||
| Development of the Dongpoxi Special Economic Zone in | 8,736,000,000.00 | EPC General contracting | 2,190 days |
| Vientiane, Laos － EPC General Contract | |||||||||
| General contracting of 5000 sets of modern affordable housing projects in the Republic of Congo | 2,000,000,000.00 | EPC+F General contracting |
Other notes□ Applicable √ Not applicableStatus of completed outstanding projects in inventory:
Unit: Yuan
| Accumulated Costs Incurred | Accumulated Confirmed Gross Profit | Expected Loss | Already Settled Amount | Completed Outstanding Balance |
Unit: Yuan
| Project name | Amount | Already Settled Amount | Completed Outstanding Balance |
Other Notes□ Applicable √ Not applicableDoes the company carry out overseas projects?
√ Yes □No
Unit: Yuan
| Project name | Amount | Business Model | Completion |
| Subcontracted Project of the Military Academy of Kuwait National Ministry of Defence | 2,100,000,000.00 | EPC General contracting | The civil construction structure and masonry of each building are completed, and the doors and windows, decoration, and electromechanical professional construction are in progress. |
| Qatar Newport NPP/0057 Housing and Infrastructure Engineering | 1,500,000,000.00 | EPC General contracting | Under finishing construction |
| 5 million tons / year refinery project in Cambodia | 4,268,000,000.00 | EPC General contracting | Earthwork backfilling, earthmoving work; construction of concrete mixing plant; temporary infrastructure construction, and temporary camp construction |
| Cambodia Haoli Diamond Project (Phnom Penh National Assembly Street Commercial/Residential Area Development Project) | 1,100,000,000.00 | EPC General contracting | The structure is completed and handed over, the podium building is completed and handed over, the SOHU decoration is completed and handed over; the APT tower decoration is completed and handed over; the podium curtain wall is completed and handed over; the electromechanical construction is completed and handed over |
| PPP project of Baiyang Lake Headquarters Economic Port, Xingang District, Chenglingji, Hunan Province | 2,000,000,000.00 | PPP mode | |
| Chongqing Yinglong Lake Rural Revitalization Demonstration Park Project | 10,000,000,000.00 | Investment | |
| Development of the Dongpoxi Special Economic Zone in Vientiane, Laos － EPC General Contract | 8,736,000,000.00 | EPC General contracting | On-site camp and temporary construction are completed |
| General contracting of 5000 sets of modern affordable housing projects in the Republic of Congo | 2,000,000,000.00 | EPC+F General contracting |
(5) Composition of business costThe company shall comply with disclosure requirements in Shenzhen Stock Exchange Industry InformationDisclosure Guidelines No. 7-the Listed Company Engagement in Civil Engineering Construction Business.Component of business cost
Unit: Yuan
| Composition | 2018 | 2017 | Increase /decrease Proportion | ||
| Amount | Proportion | Amount | Amount | ||
| Labor | 1,504,503,479.98 | 61.42% | 2,765,222,215.84 | 56.59% | -45.59% |
| Material | 695,785,282.38 | 28.41% | 1,483,612,055.43 | 30.36% | -53.10% |
| Other | 249,211,872.51 | 10.17% | 527,498,994.96 | 10.80% | -52.76% |
Industry Category
Unit: Yuan
| Industry | Items | 2018 | 2017 | Increase /decrease | ||
| Amount | Proportion | Amount | Proportion | |||
| EPC | Labor | 1,231,327,330.77 | 50.27% | 2,506,781,251.44 | 51.30% | -50.88% |
| EPC | Material | 522,483,649.03 | 21.33% | 1,286,809,864.40 | 26.33% | -59.40% |
| EPC | Other | 100,365,333.00 | 4.10% | 433,230,315.67 | 8.87% | -76.83% |
| Medical service | 99,316,403.49 | 4.05% | 97,366,145.37 | 1.99% | 2.00% | |
| Engineering design | 1,570,644.56 | 0.06% | 13,262,528.25 | 0.27% | -88.16% | |
| Decoration work | Labor | 273,176,149.21 | 11.15% | 258,440,964.40 | 5.29% | 5.70% |
| Decoration work | Material | 173,301,633.35 | 7.07% | 196,802,191.03 | 4.03% | -11.94% |
| Decoration work | Other | 47,959,491.46 | 1.96% | 94,268,679.29 | 1.93% | -49.12% |
Unit: Yuan
| Product | Items | 2018 | 2017 | Increase /decrease | ||
| Amount | Proportion | Amount | Proportion | |||
| EPC | Labor | 1,231,327,330.77 | 50.27% | 2,506,781,251.44 | 51.30% | -50.88% |
| EPC | Material | 522,483,649.03 | 21.33% | 1,286,809,864.40 | 26.33% | -59.40% |
| EPC | Other | 100,365,333.00 | 4.10% | 433,230,315.67 | 8.87% | -76.83% |
| Medical service | 99,316,403.49 | 4.05% | 97,366,145.37 | 1.99% | 2.00% | |
| Engineering design | 1,570,644.56 | 0.06% | 13,262,528.25 | 0.27% | -88.16% | |
| Decoration work | Labor | 273,176,149.21 | 11.15% | 258,440,964.40 | 5.29% | 5.70% |
| Decoration work | Material | 173,301,633.35 | 7.07% | 196,802,191.03 | 4.03% | -11.94% |
| Decoration work | Other | 47,959,491.46 | 1.96% | 94,268,679.29 | 1.93% | -49.12% |
Note
(6) Whether Changes Occurred in Consolidation Scope in the Report Period
√ Yes □NoDuring the reporting period, the changes in the scope of consolidated statements are detailed in the notes to the financial reports.
(7) Relevant Situation of Significant Changes or Adjustment of the Business, Product or Service in theCompany’s Report Period
□ Applicable √ Not applicable
(8) Situation of Main Customers and Main Supplier
Information of Main Customers
| Total sales amount to top 5 customers (RMB) | 1,175,772,799.58 |
| Proportion of sales to top 5 customers in the annual sales (%) | 48.45% |
| Proportion of the sales volume to the top five customers in the total sales to the related parties in the year | 0.00% |
Information of the Company’s top 5 customers
| No | Name | Amount (RMB) | Proportion (%) |
| 1 | Customer 1 | 588,855,867.69 | 24.26% |
| 2 | Customer 2 | 323,621,751.26 | 13.33% |
| 3 | Customer 3 | 100,635,898.11 | 4.15% |
| 4 | Customer 4 | 84,152,835.11 | 3.47% |
| 5 | Customer 5 | 78,506,447.41 | 3.23% |
| Total | -- | 1,175,772,799.58 | 48.45% |
Other notes of major customers□ Applicable √ Not applicableMajor suppliers
| Total purchase of top 5 Suppliers (RMB) | 645,383,000.58 |
| Percentage of total purchase of top 5 suppliers in total annual purchase (%) | 26.35% |
| Proportion of purchase amount from the top 5 suppliers in the total purchase amount from the related parties in the year | 0.00% |
Information about the top 5 suppliers
| No | Name | Amount (RMB) | Proportion |
| 1 | Supplier 1 | 390,603,102.00 | 15.95% |
| 2 | Supplier 2 | 77,094,220.90 | 3.15% |
| 3 | Supplier 3 | 67,334,330.25 | 2.75% |
| 4 | Supplier 4 | 56,090,518.76 | 2.29% |
| 5 | Supplier 5 | 54,260,828.64 | 2.22% |
| Total | -- | 645,383,000.58 | 26.35% |
Other notes of major suppliers□ Applicable √ Not applicable
3. Expenses
Unit: Yuan
| 2018 | 2017 | Increase/Decrease (%) | Notes | |
| Sale expenses | 28,300,802.42 | 32,213,247.97 | -12.15% | |
| Administration expenses | 311,698,800.53 | 312,957,207.20 | -0.40% | |
| Financial expenses | 606,015,536.23 | 432,590,607.55 | 40.09% | Mainly due to interest on bank loans and damages for breach of contract |
4. R& D Expenses
√Applicable □Not applicableIn order to enhance the company’s core competitiveness and meet the needs of sustainable development, the Company’s main R&Ddirection during the reporting period was decoration engineering design, project general contracting, etc. Currently, each project hasbeen progressed as scheduled, and after practical application, the good economic and social benefits have been achieved.Situation of Research and Development Input by the Company
| 2018 | 2017 | Increase /decrease (%) | |
| Number of Research and Development persons (persons) | 40 | 146 | -72.60% |
| Proportion of Research and Development persons | 4.87% | 5.08% | -0.21% |
| Amount of Research and Development Investment (In RMB) | 31,536,641.34 | 156,200,083.05 | -79.81% |
| Proportion of Research and Development Investment of Operation Revenue | 1.30% | 2.40% | -1.10% |
| Amount of Research and Development Investment Capitalization (In RMB) | 0.00 | 0.00 | 0.00% |
| Proportion of Capitalization Research and Development Investment of Research and Development Investment | 0.00% | 0.00% | 0.00% |
The Reason of the Prominent Change in Total Amount of Research and Development Input Occupying the Business Income Year onYear□Applicable √Not applicableExplanation of the Reason for Substantial Changes in the Research and Development Input’s Capitalization Rate and ItsReasonableness□Applicable √Not applicable
5. Cash Flow
Unit: Yuan
| Items | 2018 | 2017 | YoY Increase/Decrease (%) |
| Subtotal of cash inflow received from operation activities | 8,406,131,087.26 | 10,789,046,921.79 | -22.09% |
| Subtotal of cash outflow received from operation activities | 7,578,252,031.81 | 12,570,915,540.44 | -39.72% |
| Net cash flow arising from operating activities | 827,879,055.45 | -1,781,868,618.65 | -146.46% |
| Subtotal of cash inflow received from investing activities | 3,824,000.00 | 2,085,000.00 | 83.41% |
| Subtotal of cash outflow for investment activities | 195,480,772.24 | 1,022,993,256.12 | -80.89% |
| Net cash flow arising from investment activities | -191,656,772.24 | -1,020,908,256.12 | -81.23% |
| Subtotal cash inflow received from financing activities | 1,481,623,182.06 | 5,092,144,392.35 | -70.90% |
| Subtotal cash outflow for financing activities | 2,638,553,654.50 | 2,564,264,123.49 | 2.90% |
| Net cash flow arising from financing activities | -1,156,930,472.44 | 2,527,880,268.86 | -145.77% |
| Net increase in cash and cash | -521,454,793.60 | -296,482,731.93 | 75.88% |
Notes to the year-on-year change of the relevant data√Applicable □Not applicableIn 2018, the company encountered liquidity difficulties, the scale of its operations shrank, and the inflow and outflow of operatingfunds decreased from the previous year; Affected by this, foreign investment has decreased significantly; Meanwhile, due toenvironmental influences such as bank loan withdrawal and financial deleveraging, the Company has difficulty in financing, the cashinflow from financing has been greatly reduced, and the net cash flow from financing activities has been negativeNotes to the big difference between cash flow from operating activities and net profit in the reporting year□Applicable √Not applicable
III. Analysis of Non-core Business
□Applicable √Not applicable
IV. Condition of Asset and Liabilities
1. Condition of Asset Causing Significant Change
Unit: Yuan
equivalents
| End of 2018 | End of 2017 | Proportion increase/decrease | Notes to the significant change | |||
| Amount | Proportion in the total assets (%) | Amount | Proportion in the total assets (%) | |||
| Monetary funds | 658,714,886.48 | 6.86% | 1,604,973,916.12 | 13.76% | -6.90% | Mainly due to the deduction of guarantee deposit on account of guarantee claim |
| Account receivable | 4,202,594,258.24 | 43.76% | 5,706,675,244.08 | 48.91% | -5.15% | Mainly due to the decrease of income during the report period |
| Inventory | 717,531,578.23 | 7.47% | 556,839,325.50 | 4.77% | 2.70% | |
| Long-term Equity Investment | 106,837,810.83 | 1.11% | 0.00% | 1.11% | ||
| Fixed assets | 158,746,947.91 | 1.65% | 174,537,150.56 | 1.50% | 0.15% | |
| Construction in process | 36,697,284.04 | 0.38% | 4,968,590.96 | 0.04% | 0.34% | |
| Short-term loans | 2,862,584,629.01 | 29.81% | 3,477,200,420.55 | 29.80% | 0.01% | |
| Long-term | 120,000,000. | 1.25% | 843,092,471. | 7.23% | -5.98% | Mainly due to the repayment and |
| loans | 00 | 02 | decrease of loans during the report period |
2. Asset and Liabilities Measured by Fair Value
□Applicable √Not applicable
3. Restricted asset rights as of the end of this Reporting Period
| Items | Year-end book value | Reason |
| Monetary funds | 532,947,089.60 | Margin and frozen funds |
| Account receivable | 716,094,881.32 | Pledge |
| Fixed asset | 15,963,305.27 | Financial lease assets |
| Total | 1,265,005,276.19 |
V. Investment situation
1. General condition
√Applicable □Not applicable
| 182,993,849.80 | 840,948,723.77 | 78.24% |
2. Condition of Acquiring Significant Share Right Investment during the Report Period
□Applicable √Not applicable
3. Situation of the Significant Non-equity Investment Undergoing in the Report Period
□Applicable √Not applicable
4. Investment of Financial Asset
(1) Securities investment
□Applicable √Not applicableThe Company had no securities investment in the reporting period.
(2) Investment in Derivatives
□Applicable √Not applicableThe Company had no investment in derivatives in the reporting period.
5. Application of the raised capital
√Applicable □Not applicable
(1) General application of the raised funds
√Applicable □Not applicable
Unit: 10,000 Yuan
| Year of Raising | Way of Raising | Total raised capital | Total Amount of the Raised Fund Used at the | Total amount of Raised Funds | Amount of raised capital of which the purpose was changed in the report period | Accumulative amount of raised capital of which the purpose has been changed | Proportion of raised capital of which the purpose has been changed (%) | Total Amount of the Unused Raised Fund at the Current Period | Use and Whereabouts of the Unused Raised Fund | Amount of the Raised Fund with over 2 Years’ Idling |
| 2015 | Non-public offering | 25,500 | 0 | 11,739.85 | 0 | 0 | 0.00% | 13,760.15 | For temporary replenishment of corporate liquidity | 0 |
| 合计 | -- | 25,500 | 0 | 11,739.85 | 0 | 0 | 0.00% | 13,760.15 | -- | 0 |
| Notes to use of raised capital | ||||||||||
| Upon the approval from the CSRC with the document of the 2015-No.1774 Zheng Jian Xu Ke -Reply of the Major Asset Restructuring and the Issue of Shares to Objects such as Chen Lue to Purchase Assets and Raise Matching Funds by Shenzhen Victor Onward Textile Industrial Co., Ltd., Sino Great Wall International Engineering Co., Ltd. (hereinafter referred to as: “company or the company”) had non-publicly issued 25,914,633 shares of RMB common share(A share), of which the par value per share was RMB 1.00, the issuing price per share was RMB 9.84, the total funds raised was RMB 254,999,988.72, and after deducting the issuance expenses of RMB 14,500,000.00 directly from the raised funds, the actual net amount of the raised funds is RMB 240,499,988.72. As of December 31, 2018, the company accumulatively used the raised funds of RMB 117,398,462.65, of which the Company used the raised funds of RMB 0 in 2018. By the end of 2018, the company accumulatively invested RMB 100,000,000.00 in the overseas marketing network construction project and RMB 276,000 in the second phase of informatization construction project, and the taxes and charges and the intermediary fees related to this transaction was RMB 17,122,462.65, yet the not-yet-used balance of the raised funds was 137,601,526.07; besides, the idle raised funds used for temporarily supplementing the Company’s liquidity was RMB 139,327,254.00, the interest income from the special account for raised funds | ||||||||||
(2) Promised projects of raised capital
√Applicable □Not applicable
Unit: 10,000 Yuan
was RMB 1,732,150.44, the expenditure for the handling charges of the special account for raised funds was RMB 1,043.92, andthe actual balance of the special account for raised funds was RMB 5,883.59.
Committedinvestment projects
and investment
| Committed investment projects and investment | Project changed (including partial change) | Total raised capital invested as committed | Total investment after adjustment (1) | Amount invested in the reporting period | Accumulated amount invested at the end of the reporting period (2) | Investment progress ended the reporting period (%) (3) = (2)(1) | Date when the project has reached the predicted applicable status | Benefit realized in the reporting period | Has the predicted result be realized | Has any material change taken place in feasibility |
| Committed investment projects | ||||||||||
| 1. Overseas marketing network construction project | Yes | 10,000 | 10,000 | 10,000 | 100.00% | Yes | No | |||
| 2.Informatization Construction Phase II | No | 2,500 | 2,500 | 27.6 | 1.10% | No | Yes | |||
| 3.Related taxes and agency fees of this transaction | No | 13,000 | 13,000 | 1,712.25 | 13.17% | Not applicable | Yes | |||
| Subtotal of committed investment projects | -- | 25,500 | 25,500 | 11,739.85 | -- | -- | -- | -- | ||
| Investment orientation for und arising out of plan | ||||||||||
| Not applicable | ||||||||||
| Total | -- | 25,500 | 25,500 | 0 | 11,739.85 | -- | -- | 0 | -- | -- |
| Situation about not coming up to schemed progress or expected revenue and the reason (in | 1. Phase II Information Construction Project: The Sino Great Wall has changed from its core business of decoration construction before listing to its core business of general contracting after listing. After that, it has gradually transitioned its core business to engineering construction and investment and management of medical and health industries. In recent years, the business model of listed companies has changed. However, the phase II information construction project to be invested in at the initial stage of listing is | |||||||||
| specific project) | no longer suitable for the current development status. 2. Taxes and intermediary expenses related to the transaction of raised funds: The company has registered for filing the special tax treatment for enterprise restructuring at the Dapeng New District Local Taxation Bureau on May 26, 2016. The type of special tax treatment for enterprise restructuring is equity acquisition, and the filing number is SDSPB [2016] No.22. For this reorganization of the company, special reorganization is selected in terms of tax. The part of the value of the company's placed assets that is equivalent to the value of the placed assets is recognized according to the original book value of the placed assets. Therefore, the transfer income of the relevant assets is not recognized for the time being during this reorganization, and the income tax liability is not generated for the time being during this reorganization. In the later period, in case of any income from asset transfer, the company will fulfill its tax obligations in a timely manner in accordance with the provisions of the tax law. In order to maximize the use efficiency of raised funds and reduce financial expenses, the company held the fourth meeting of the eighth board of directors on January 26, 2019, and deliberated and passed the Proposal on Termination of Some Funded Investment Projects and Use of Funds Raised for Temporary Supplementary Working Capital for Permanent Supplementary Working Capital. The Company plans to terminate the raised funds investment project "Phase II Informatization Construction Project" and "taxes and intermediary fees related to the raised funds transaction" and use the remaining raised funds of RMB 137,601,537.35 (excluding interest) for permanent replenishment of working capital. On February 13, 2019, the above proposal was reviewed and approved by the company's first extraordinary shareholders' meeting in 2019. |
| Notes to significant change in feasibility of the project | Please refer to the above-mentioned "circumstances and reasons for not achieving the planned schedule or expected revenue". |
| Amount, application and application progress of the unbooked proceeds | Not applicable |
| About the change of the implementation site of the projects invested with the proceeds | Applicable |
| Adjustment of the implementation way of investment funded by raised capital | Not applicable |
| About the initial investment in the projects planned to be invested with the proceeds and the replacement | Not applicable |
| Using the idle proceeds to supplement the working capital on temporary basis | Applicable |
| In order to maximize the use efficiency of the raised funds and reduce financial expenses, the Company will, in consideration of the funds use plan for the projects invested by the raised funds, use RMB 120 million of idle raised funds to temporarily supplement the liquidity, with a term of such use no more than 12 months, From the date of approval by the board of directors of the company, the special account for raised funds shall be returned in full upon maturity. The matter has been examined and approved by the 35th meeting of the seventh board of directors of the company, and the board of supervisors, independent directors and recommendation agencies of the company have all expressed their opinions of agreement. During its use, the company did not change the use of the raised funds in disguised form, did not affect the normal operation of the investment plan of the raised funds, and did not carry out securities and other risk investments. The company transferred out the raised capital of RMB 120,000,000.00 from August 1 in 2018. Due to a contract dispute in Bank of Ningbo, the Company's account number 23001892778 of Bank of Shanghai Beijing Branch was deducted RMB 14,158,049.00 on August 8, 2018. Due to the execution of (2018) W0928Z No.13610-251370, the company's account number 03002719068 was deducted RMB 5,169,205.00 on October 25, 2018, resulting in the company's raised funds temporarily supplementing the actual use amount of working capital by RMB 139,327,254.00, exceeding the amount approved by the board of directors by RMB 327,254.00. | |
| Balance of the proceeds in process of project implementation and the cause | Not applicable |
| About application and status of the proceeds unused | As of December 31, 2018, the unused raised funds are still in the raised funds account. The company held the fourth meeting of the eighth board of directors on January 26, 2019, and deliberated and passed the Proposal on Termination of Some Funded Investment Projects and Use of Funds Raised for Temporary Supplementary Working Capital for Permanent Supplementary Working Capital. On February 13, 2019, the above proposal was deliberated and passed by the company's first extraordinary shareholders’ meeting in 2019. The unused fund raised by the company has permanently replenished the working capital. |
| Problems existing in application of the proceeds and the information disclosure or other issues | 1. On March 6, 2019, the Company received the Decision on Taking Corrective Measures against Sino Great Wall Co., Ltd. ([2019] No.11) from Shenzhen Supervision Bureau of China Securities Regulatory Commission (hereinafter referred to as the "Decision on Correction"). The Decision on Correction raises the following questions regarding the use of the company's raised funds: the Management System for the Use of Raised Funds does not involve the accountability mechanism for the illegal use of raised funds, and the provisions on the hierarchical examination and approval authority, decision-making procedures, risk control measures, etc. for the use of raised funds are unclear, which do not conform to the provisions of Article 3 of the Guidelines No.2 for the Supervision of Listed Companies - Regulatory Requirements for the Management and Use of Raised Funds by Listed Companies. Currently, the Company has fulfilled its obligations on the use of raised funds and information disclosure in accordance with the Guidelines No.2 for the Supervision of Listed Companies - Regulatory Requirements for the Management and Use of Raised Funds by Listed Companies, Measures for the Administration of Information Disclosure by Listed Companies and Listing Rules of Shenzhen Stock Exchange. On March 18, 2019, the Company held the fifth meeting of the eighth board of directors and deliberated and passed |
(3) Changes of raised funds projects
□Applicable √Not applicableThe Company had no sales of major assets in the reporting period.
VI. Sales of major assets and equity
1. Sales of major assets
□Applicable √Not applicableThe Company had no sales of major assets in the reporting period.
2. Sales of major equity
√Applicable □Not applicable
the Proposal on revising the Management System of Raised Funds, improving the accountabilitymechanism for illegal use of raised funds, and specifying the grading approval authority,decision-making procedures and risk control measures for the use of raised funds.2. In 2018, the board of directors of the company passed the Proposal on Temporary Replenishment ofCirculating Fund with Part of Idle Raised Funds and agreed to temporarily replenish the working capitalwith 139 million yuan of raised funds. The company transferred out the raised capital of RMB120,000,000.00 from August 1 in 2018. Due to a contract dispute in Bank of Ningbo, the Company'saccount number 23001892778 of Bank of Shanghai Beijing Branch was deducted RMB 14,158,049.00on August 8, 2018. Due to the execution of (2018) W0828Z No.13610-251370, the company's accountnumber 03002719068 was deducted RMB 5,169,205.00 on October 25, 2018, resulting in the company'sraised funds temporarily supplementing the actual use amount of working capital by RMB139,327,254.00, exceeding the amount approved by the board of directors by RMB 327,254.00. In viewof the resolution of the Company’s first extraordinary shareholders' meeting on February 13, 2019 toconsider and pass the Proposal on Termination of Some Funded Investment Projects and Use of FundsRaised for Temporary Supplementary Working Capital for Permanent Supplementary Working Capital,the Company will no longer return the above-mentioned part of raised funds exceeding the amountapproved by the Board of Directors to the special account for raised funds.
Count
erparty
| Counter party | Sold equities | Sold date | Transaction price (Ten thousand yuan) | Net profits contribute ted by the equities to the listed | Influence of the selling of the Company | Proportion on on of the net profits of the contribute ted | Pricing principles of the equities selling | Whether was the related transaction | Relationship with the center party | Whether the involve d equities all completed the owner | Whether execute as schedule ed and if failed, should state the | Disclosure date | Disclosure index |
| companies from the period- begin to the sold date (Ten thousand yuan) | amount of the equities selling to the listed companies to the total amo9un t of the net profits | ship transfer | reasons and the adopted measurments of the company | ||||||||||
| Sino Great Wall Constructional Engineering Co., Ltd. | 60% | December 6, 2018 | 9,000 | -3,681.44 | The sale of the company generated a return on investment of RMB 15.11 million | -0.88% | fair value | No | fair value | Yes | Yes |
VII. Analysis of the Main Share Holding Companies and Share Participating Companies
√Applicable □Not applicableSituation of Main Subsidiaries and the Joint-stock Company with over 10% net profit influencing to the Company
Unit: Yuan
| Company Name | Company type | Sectors engaged in | Registered capital | Total assets | Net assets | Turnover | Operating profit | Net Profit |
| Sino Great Wall International Engineering Co., Ltd. | Subsidiaries | General contracting, subcontracting, engineering survey and design; professional contracting; architectural decoration engineering; architectural curtain wall; project and technology study and experimental development; sell building material, machinery, hardware, plastic articles; technology development, technology consultation, technology service; goods import and export; | 1,000,000,000 | 8,591,829,570.83 | 880,871,998.00 | 2,330,186,998.92 | -916,877,204.86 | -1,183,696,469.41 |
Acquirement and disposal of subsidiaries in the Reporting period√Applicable □Not applicable
technologyimport andexport;agentimport andexport.
Name
| Name | Mode | Influence |
| Sino Great Wall (Beijing) Investment Fund Management Co., Ltd. | Transfer | |
| Sino Great Wall Zhihui Building Industry (Zhanjiang) Co., Ltd. | Transfer | |
| Sino Great Wall Jianjie Engineering Co., Ltd. | Transfer | |
| Guangzhou Heebeina Interior design Co., Ltd. | Transfer | |
| Shenzhen Yatian Decorative Design Engineering Co., Ltd. | Transfer |
NoteSino Great wall International Construction Co., Ltd. is a subsidiary of the company and is the main of income and profits of thecompany, which accounts for more than 90% of all the company’s operating income and net profit and the rest subsidiaries accountfor less than 10% of all the company’s operating income and net profit, which weight less in the whole company’s operation.
VIII. Special purpose vehicle controlled by the Company
□Applicable √Not applicable
IX. Prospect for future development of the Company
(1) Strategy of the Company’s Development
It is the 70th anniversary of the founding of New China in 2019. It is the key year for comprehensively building a well-offsociety to achieve its first 100-year goal. The 2019 Government Work Report emphasizes that the central government will launch anew round of comprehensive reform and opening-up and the second round of structural reforms in supply-side economics to furtherstabilize employment, finance, foreign trade, foreign investment, investment and expectations, boost market confidence, and maintainsustained and healthy economic development and overall social stability. In 2019, China will promote all-round opening to theoutside world, further expand the scope of opening up, optimize the layout of opening up, and further release the policy dividend.1. Building construction
As one of the pillar industries of China’s economic development, construction plays an important role in national economy andsocial life. During the “The thirteenth Five-Year Plan” period, China's economic development has entered a new normal. Theeconomic structure has been optimized and upgraded, with its driving force shifted from investment-driven to innovation-driven.China has entered a key period of reform in which the market plays a decisive role in the allocation of resources and the government
plays a better role as the core. New urbanization, coordinated development of Beijing, Tianjin and Hebei, the development of theYangtze River economic belt and the construction of "the Belt and Road" form an important driving force and valuable opportunityfor the future development of the construction industry. According to the latest research report on the development prospects of theindustry, in the medium and long term, with the continuous improvement of people’s requirements for quality of life and supportingfacilities, the sustainable development of the construction industry will be continuously promoted.
In addition, with the steady recovery of macro-economy and the rapid advancement of new urbanization, the unfavorabledevelopment trend of the construction industry market will be effectively alleviated, which will definitely have a positive impact onthe construction industry. Overseas, the resolution of the 19th National Congress on Constitution of the Communist Party of China(Amendment) explicitly stated that the promotion of “the Belt and Road” construction and other contents shall be included in theParty Constitution. Since 2017, the construction of “the Belt and Road” has entered a golden period of development, and theeconomic exchanges and cooperation between China and the countries along the “the Belt and Road” will be closer. According to thelatest report of the Asian Development Bank, from 2016 to 2030, the demand for infrastructure in the Asian region is expected toexceed USD 22.6 trillion, with an average annual demand of more than USD 1.5 trillion. The market of countries along the "the Beltand Road" will continue to be the growth point and driving force for the development of the foreign contracted engineering industry,and China's construction and decoration enterprises will usher in a golden development period for “going out”. Meanwhile, othercountries will continue to invest in infrastructure, and infrastructure development will continue to rise steadily. As a well-knowninternational engineering construction contractor, the company, relying on its rich construction experience and market image, willearnestly seize the historic development opportunities in the overseas engineering contract market, carry out in-depth research andproject exploration in countries and regions with existing investment layout, and meanwhile continue to develop the overseasbusiness platform by using various advantageous resources, fully explore the “the Belt and Road” market, actively promote thesustainable development of overseas business, further increase the proportion of overseas market performance in the company’soverall performance, and strengthen the brand and status of private enterprise pioneer for "the belt and road initiative" of Sino GreatWall.2. Healthcare
In 2018, the National Health Commission and the National Healthcare Security Administration were formally established. The“Comprehensive Work Plan for Comprehensive Improvement of County-Level Hospitals (2018-2020)” issued by the People’sRepublic of China pointed out that by 2020, 500 county hospitals (including some impoverished county and county hospitals) andcounty Chinese medicine hospitals will reach “third-level hospitals” and The service capacity requirements of “three-level Chinesemedicine hospitals” strive to make 90% of county hospitals and county hospitals in China meet the basic standards for medicalservice capacity of county hospitals and county hospitals. County-level hospitals officially entered the stage of explosivecomprehensive construction, and China's medical engineering will usher in a golden period of development. During the reportingperiod, the company invested in the Yinglong Lake Commercial Medical Treatment and Health Care Rural Complex Project(Yinglong Lake Rural Revitalization Demonstration Project). The project integrates the herbal medicine health research institute, theinternational medical treatment and health care zone, the hot spring resort sanitarium area and other sectors, implements the"powerful combination" strategy, and collaborates with social capital to jointly build a modern medical care and rehabilitationcomplex with complete functions and facilities. Meanwhile, combining with the company's resource advantages, through theconstruction of medical real estate and supporting medical treatment and health care engineering, a medical treatment and health caredevelopment model with the company's characteristics in combination of medical treatment and health care and centered by medicaltreatment is formed.(2) The Company’s Development Strategy
The company focuses its development strategy on two aspects: one is to strengthen the project contracting and investment of theBelt and Road Initiative, and the other is to enhance the domestic medical investment. At present, the company has possessedabundant projects in Southeast Asia, South Asia, the Middle East and Africa. In the field of medical and health care, apart frominvesting in the construction of health care engineering, it will further choose to purchase mature hospitals and introduce foreign
advanced proton therapy technologies and leading medical services. The company will give full play to the advantages of listedcompanies in financing, engineering construction coordination, investment decision-making, medical expert resources and moderncorporate governance, gather medical experts from Beijing and Shanghai and hospital management experts, and strive to build ahospital management group with important status and influence in the industry. Centering around the development strategies of“enlarging and strengthening overseas business to become an integrated international construction services supplier” and “developingthe health-care industry”, in the future, the company will devote major efforts to developing abroad business and arranging themedical industry so as to enhance its capacity for core competitiveness and profit constantly and eventually strive to build itself into aprominent business group developed by the mutual driving forces of construction and health-care industry.(3) The Company's Business Plans
Facing the difficulties both domestically and internationally in 2018, the company will focus on the following work in 2019:
1. Optimize the business structure and management system, and improve the company's performance appraisal system
In 2019, in combination with the internal and external environment faced by the company for development, the company'sbusiness organization and business structure will be adjusted upon the review of the company's board of directors; The company'sstaffing will be re-combed, the salary and performance appraisal system will be formulated according to company managementstructure and business model to reduce the personnel cost effectively, and control various expenses reasonably for more scientific andefficient business management.2. Comb the internal control system to improve the level of fine management
The company will re-comb its corporate governance system and strengthen construction of internal control systems to improveits fine management level. According to the Shenzhen Securities Regulatory Bureau's decision to order the company to makecorrections, the company will fully supervise the implementation of the rectification measures in accordance with the contents of therectification report, make reasonable plans for the overall financial situation of the company, continue to consolidate the basic workof financial accounting, form a stable financial control system, reduce management costs and financial risks, and well ensure thesafeguarding of the company's business development.3. Strengthen the collection of accounts receivable and actively promote debt restructuring
In 2019, the company will intensify the collection of accounts receivable, include the collection of accounts receivable as a keyassessment index, set up a special "debt collection decision leading group", formulate a corresponding debt collection incentivesystem, and link the collection of overdue accounts receivable with individual performance assessment. If necessary, legalproceedings and assigned responsible persons will be used to strengthen the collection of overdue accounts receivable, and thecollection of accounts receivable will be implemented as a key special management work to effectively improve the company's assetquality. Meanwhile, investment and financing capability is an important prerequisite for the medium and long-term stabledevelopment of the enterprise. The company will resolve the existing on-balance-sheet litigation as soon as possible, enhance theconfidence of external financial institutions, actively adjust the loan structure, reduce the financing cost, realize the dynamic balanceof funds, promote the investment and financing activities on the right track, In addition, the company actively communicated andsought solutions for current debt overdue, litigation and arbitration matters, and did not rule out the use of judicial restructuring anddebt restructuring to solve the company's current financial difficulties.4. Consolidate existing overseas projects and continue to expand overseas markets
In 2019, the company will focus on the national strategic layout, continue to deepen the overseas market, strengthen exchangesand cooperation with the governments of countries and regions along the "the Belt and Road", fully seize the construction projectopportunities brought by the countries and regions along the "the Belt and Road", focus on intensive cultivation in key markets,continue to strengthen business expansion, strengthen the comprehensive management of EPC contracting for overseas projects,refine the classification of management subjects, and further promote regional and project responsibility management, so as to meetthe relevant requirements of the company for professional business and fine management. Meanwhile, it will take root in the existingbusiness areas, moderately expand the volume of professional engineering, and actively expand the industrial energy constructionmarket in the advantageous market areas.
5. Actively expand smart houses and build up medical treat and health care businesses
In 2019, the company will continue to raise funds to complete the construction of the smart housing industry base in ZhanjiangCity, Guangdong Province, and ensure that it passes the commissioning acceptance and goes into production within the year;Meanwhile, the company will accelerate the expansion of the smart housing sector in the domestic real estate industry, closely followthe good policy of China to vigorously build the beautiful countryside, actively promote the construction of a new socialistcountryside, and strive to open a smart housing rural sector operation center in Xiong'an New Area in 2019, so as to buildhigh-quality village houses for farmers; In addition, in combination with the company's advantageous resources in the health caresector and relying on the construction of health care facilities, the sales, operation and service of health care apartments, the companyactively created a new pattern of transformation and upgrading.6. Actively expand smart houses and profit growth points
In 2019, the company will continue to raise funds to complete the construction of the smart housing industry base in ZhanjiangCity, Guangdong Province, to ensure that the trials will be completed and put into production during the year. At the same time, thecompany will accelerate the expansion of the smart housing sector in the domestic real estate industry, closely following the country'sefforts to build beautiful villages. Policies, actively promote the construction of a new socialist countryside, and strive to open asmart housing rural sector operation center in Xiong'an New District in 2019 to build high-quality village houses for the majority offarmers; in addition, combined with the superior resources of the company's Kangyang plate, relying on Kang The construction offacilities, the sales, operation and service of Kangyang Apartment will actively create a new pattern of transformation and upgradingof the company.(4) Main Risks faced by the Company and Solutions1. Macro economy and policy-related influences
The company belongs to the construction industry. The change of economic cycle is closely related to the development ofconstruction industry, and factors such as the operation of national economy and the development of urbanization process willdirectly affect the construction industry. The company's main business is in a fully competitive market with low industry barriers andfierce competition. The company is in a period of rapid development, and the rapid development and expansion of domestic andforeign businesses raise higher requirements for the company's organizational operations and project management.
Solutions: Pay constant attention to the international and domestic economic situation to make reasonable prejudgment. Maketimely adjustment for operating strategy and marketing policy and make pre-arranged planning which copes with market changes toguarantee the smooth realization for business goals in 2019.2. Risks Aggravated by the Market Competition
As to the international market, on the one hand, the combinations among the strong ones of the giant international contractors inEurope, America, Japan and South Korea are increasingly common, which can increasingly strength the aspects including thetechnology, financing and management; on the other hand, more domestic enterprises have participated in the international marketcompetition of construction & engineering, intensified the overseas construction market competition. In the domestic market, withthe continuous rise of the attractiveness of medical engineering projects, many companies have participated in the construction ofmedical engineering projects. Thus, the medical engineering projects have been more difficult to bid and have fierce competition,which imposes a higher requirement on the Company's market expansion.
Solutions: Strengthen team construction and take first-mover advantage of the Company’s overseas business. Draw lessons fromthe past, improve the capacity of management and control for the Company’s own projects to constantly heighten the Company’score competitiveness.3. Management Risks Brought by Constant Business Scope Enlargement
The company's business and scale continue to expand, putting forward higher requirements for the management of thecompany's management mode, talent reserve, technological innovation and market development.
Solutions: The company will continue to improve the management level, strengthen the talent reserve, adjust and improve themanagement system, continue to strengthen the information management, and form big data precipitation and analysis of various
data in the operation process through advanced technical means, so as to promote the improvement of management efficiency andwiden the management coverage.4. Operation-related risks(1) Risks of period in project construction
The engineering construction project may be affected by factors such as changes in project design, delays in the payment ofproject funds, restrictions on transportation, power supply and water supply, land acquisition and relocation, and bad weather, etc.,resulting in the failure to proceed as the project schedule agreed in the contract, the risk of the project not being completed anddelivered on schedule, and the impact on the company's operating performance and reputation.(2) Risk of increased material price
The construction industry is mainly about fixed cost contract, so gross profit margin is somehow sensitive to the fluctuation ofpurchasing price of construction materials. The bulk materials used by the company mainly include concrete and steel. Due to thelong construction period in construction projects, the price increase of these bulk materials will directly lead to the increase ofconstruction costs, resulting in the difference between the actual construction costs and the project budget, affecting the company'soperating performance.(3) Operational risks of overseas businesses
Although the company's overseas businesses are mainly in Southeast Asia and other regions, the company will face potentialeconomic risks, exchange rate risks, political risks and other risks in the process of overseas business operation. In case of majorfluctuations or economic crises in the economic development of the countries or regions where the company's overseas target marketsare located, they will adversely affect the company's overseas business and the further development of new markets in the future.
Solutions：For the above risks, the company will integrate internal and external resources, strengthen technological innovationaccording to the professional development ideas, seek expansion of business areas and construction qualifications, improve operationquality and benefits, create green and high-quality projects, realize multi-field professional construction operations and enterprisedevelopment, and continuously upgrade brand strength.5. Risk of bad debt caused by accounts receivable
Some countries have entered the debt repayment period, with increased financial pressure, increased risk of debt default,insufficient confidence of investors, and scarce funds for infrastructure construction. The company has a large balance of accountsreceivable, and the high proportion of net accounts receivable to total assets is due to the characteristics of the industry. With theexpansion of the company's business scale, the balance of the company's accounts receivable is generally on the increase, and theproportion of net accounts receivable to total assets is expected to remain at a relatively high level. The failure to recover thecompany's accounts receivable in time will affect the company's capital turnover rate and cash flow from operating activities, thusadversely affecting the company's production, operation and performance level.
Solutions：Strengthen fund management, rationally allocate fund structure, and establish assessment mechanism for project fundrecovery to resolve and prevent potential fund risks.6. Risks of litigation and asset freeze caused by debt repayment
Earlier, the company issued multiple announcements on litigation and arbitration matters in the designated informationdisclosure media. As the overdue debts of the company and its subsidiaries are not paid off and the company is under investigation bythe CSRC, the company has been sued by some creditors and some of its bank accounts and company's assets have been frozen. Theoverdue debts of the company may be subject to payment of relevant liquidated damages, late fees and penalty interests, increasingthe company's financial expenses, thus affecting the company's production and business operation, possibly weakening theconfidence of other creditors in the company, thus aggravating the company's financial tension and adversely affecting the company'soperation.
Solutions：The Company will continue to pay attention to the follow-up progress, fulfill its information disclosure obligations ina timely manner in accordance with relevant regulations, strengthen the management of litigation-related matters, and employprofessional lawyers to actively respond to lawsuits so as to protect the legitimate rights and interests of the company. The company
is making every effort to raise debt service funds and properly handle the debt crisis. Does not rule out future borrowing judicialrestructuring, debt restructuring and other ways to solve the company's current financial difficulties.7. Risk of share suspension
The company is currently being investigated by the China Securities Regulatory Commission because of suspected illegalinformation disclosure. According to the relevant provisions of the Shenzhen Stock Exchange Listing Rules (Revised in November2018), if the company is involved in the illegal material information disclosure and under other forced delisting situations stipulatedin Article 13.2.1, the company's shares will be subject to the delisting risk warning. The company's shares will be suspended on thenext trading day after the expiration of the 30-trading-day period in the delisting risk warning until the Shenzhen Stock Exchangemakes a decision on whether to suspend the listing of the company's shares within 15 trading days after the suspension. If theinvestigation items that the company is involved in are not found to have any major illegal acts by the CSRC, the company's shareswill not be at risk of suspension.
Solutions：The Company will actively cooperate with the CSRC to carry out investigations, and perform its informationdisclosure obligations according to the relevant provisions of the Shenzhen Stock Exchange Listing Rules and disclose risk alertannouncements at least once a month.
X. About researches, visits and interviews received in this reporting period
1、Records about researches, visits and interviews received in the reporting period
√ Applicable □ Not applicable
| Reception time | Way of reception | Types of visitors | Basic index | |
| March 8,2018 | Onsite investigation | Organization | The interactive relation with the investors on Shenzhen Stock Exchange platform about Sino Great Wall International Engineering Co., Ltd: Record of the investors relations activities on March 8, 2018. | |
| Reception times | 1 | |||
| Reception agency amount | 3 | |||
| Reception personal number | 0 | |||
| Others | 0 | |||
| Whether to disclose, reveal or disclose non-public material information | No | |||
V. Important Events
I. Specification of profit distribution of common shares and capitalizing of common reserves
Formulation, implementation and adjustment of profit distribution policy of common shares especially cash dividend policyduring the reporting period√Applicable □Not applicable
During the reporting period, the formulation and implementation of the company's cash dividend policy comply with theprovisions of the Articles of Association and the requirements of the resolutions of the shareholders' meeting. The dividend standardand proportion are explicit and clear. Relevant decision-making procedures and mechanisms are complete. Independent directorsfulfill their duties and play their due roles. The shareholders' meeting and the daily investor reception work provide small andmedium shareholders with the opportunity to fully express their opinions and demands, and the legitimate rights and interests ofsmall and medium shareholders are fully protected.
| Special cash dividend policy description | |
| Whether meets the requirements of the provisions of the articles of association or shareholders' meeting resolutions: | Yes |
| Whether dividends standard and proportion are clear | Yes |
| Whether decision making and supervision mechanism for profit distribution are completed | Yes |
| Whether independent directors perform their duties responsibly and play its due role: | Yes |
| Whether the Minority shareholders have adequate opportunity to express their views and aspirations and Their legitimate rights and interests have been fully protected | Yes |
| Whether the Cash dividend policy to adjust or change the conditions and procedures are compliant and transparent | Not applicable |
The profit distribution preplan or proposal and the preplan or proposal of conversion of the capital reserve into share capital in thepast three years (with the reporting period inclusive):
1. Profit distribution plan for 2016the Company distributed cash dividends of RMB 0.60 (including tax) for every 10 shares based on the existing 1,698,245,011 shares.with a total distribution of RMB 101,894,700.66. No bonus shares were given and no capital reserves were conversed. The remainingun-allocated profit will be carried over to the next year. The 2016 profit distribution plan has been approved and implemented at the2016 shareholders' meeting of the company.2. Profit distribution plan for 2017On April 23,2018，The 32nd meeting of the 7th board of directors of the company deliberated and approved the 2017 profitdistribution plan. The Company distributed cash dividends of RMB 0.40 (including tax) for every 10 shares based on the existing1,698,245,011 shares. With a total distribution of RMB 67,929,800.44. No bonus shares were given, and no capital reserves wereconversed. The remaining un-allocated profit will be carried over to the next year. The 2017 profit distribution plan has beenapproved and implemented at the 2017 shareholders' meeting of the company.
3. Profit distribution Preplan for 2018：
On April 28, 2019，The 7th meeting of the 8th board of directors of the company deliberated and approved the 2018 profitdistribution plan. No cash dividend, no bonus shares, no capital reserve converted into share capital. The above profit distributionplan shall be examined and approved by the company's 2018 annual shareholders' meeting. On April 28, 2019, the 7th session of the8th Board of Directors of the companyDividend distribution of the latest three years
Unit: Yuan
| Year | Amount for cash bonus (tax included) | Net profit attributable to the over of the parent company in the consolidated financial statements | Ratio in net profit attributable to the parent company in the consolidated financial statements | Amount of cash dividends from cash offer to repurchase shares of the funds | Proportion of cash dividends from cash offer to repurchase shares of the funds | Amount for cash bonus (tax included) | Ratio of the total cash bonus (other ways included) in net profit attributable to common stock shareholders of listed company contained in consolidation statement |
| 2018 | 0.00 | -1,704,739,736.40 | 0.00% | 0.00 | 0.00% | 0.00 | 0.00% |
| 2017 | 67,929,800.44 | 380,090,990.82 | 17.87% | 0.00 | 0.00% | 67,929,800.44 | 17.87% |
| 2016 | 101,894,700.66 | 473,661,862.67 | 21.51% | 0.00 | 0.00% | 101,894,700.66 | 21.51% |
In the reporting period, both the Company’s profit and the parent company’s retained earnings were positive however not cashdividend distribution proposal has been put forward.□Applicable √Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□Applicable √Not applicableThe Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either.
III. Commitments to fulfill the situation
1.The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of thereporting period made by the company, shareholder, actual controller, acquirer, director, supervisor,senior management personnel and other related parties.
√ Applicable □ Not applicable
| Commitment | Commitment maker | Type | Contents | Time of making commitment | Period of commitment | Fulfillment |
| Commitment on share reform | No | No | No | No | No | |
| Commitment in the acquisition report or the report on equity changes | No | No | No | No | No | |
| Commitments in assets reorganization | Chen Lue, He Feiyan | Stock lock | Shares acquired by purchases of assets through issuing shares: “I will not transfer the new shares of Victor Onward Holdings acquired through this restructuring, including but not limited to the public transfer through the stock market or by agreement, and I will not entrust anybody | March 19,2015 | 36 months | Fully completed (shares acquired by Chen Lue and He Feiyan from issuing shares to purchase assets have been released from restriction on sale) Please refer to the detailed conted published on juchao information website（www.cninfo.com.cn）on October |
| else to manage my shares of Victor Onward Holdings, within 36 months from the date new shares list and before the date I’ve carried out my obligations of performance compensation under this restructuring(subject to whatever is early, hereinafter referred to as “lock-up periods”). If the closing price of shares of Victor Onward Holdings were lower than this issue price for 20 continuous trading days in 6 months after the restructuring | 23, 2018(Announcement No.:2018-123） |
| major omission of the information provided or disclosed, I will not transfer my shares of the company before the conclusion of the case has been made clear. After the above-mentioned lock-up periods, I will sell or transfer the new shares of the company acquired from this restructuring following relevant regulations of China Securities Regulatory commission and Shenzhen Stock Exchange. | |||||
| Chen Lue | Stock lock | Shares acquired by matching funds raised: “I | March 19, 2015 | 36 months | Strict performing |
| will not transfer the new shares of Victor Onward Holdings acquired through this issuing by any way, including but not limited to the public transfer through the stock market or by agreement, within 36 months from the date new shares list. If regulation rules or regulators have longer requirements for lock-up periods, it should be executed accordingly. | |||||
| Chen Lue | No capital occupation | Up to the issue day of the letter, I and other corporations controlled by me haven’t | March 19,2015 | Long-term | Strict performing |
| system and funds management system within lawful authority. | |||||
| Chen Lue | Cash compensation | In view of the fact that the houses rented by Sino Great Wall and it’s son subsidiaries, subsidiaries, haven’t rental registration, I promise, if Sino Great Wall and its son subsidiaries, subsidiaries, were penalized by real estate management department or suffered other losses resulting from it, I agree to compensate the loss of the company by cash. | March 19,2015 | Long-term | Strict performing |
| Chen Lue | Cash compensatio | During the reporting period, the | March 19,2015 | Long-term | Strict performin |
| n | project which Sino Great Wall is involved in is the decoration engineering construction project of Libo Grand Hotel (hereinafter referred to as “Libo project”) which the company contracted before the bidding process. Sino Great Wall is not involved in any other projects except for Libo project before bidding process. As to the violating issues existed in the Libo project, I promise as follows: if Sino Great Wall got penalized by government | g |
| administration departments or suffered any economic loss resulted from it, I will compensate the company by cash; Meanwhile, I, within lawful authority, will also promise to urge the company to undertake related construction projects legally so as to avoid violating issues happened before implementation of bidding process, i.e., at the time for construction again. | |||||
| Chen Lue | Cash compensation | “1. Up to October 13th,2014, the related expenses of | March 19, 2015 | Long-term | It has been fulfilled (on May 21, 2018, Chen Lue paid |
| the litigation and arbitration cases, including the actual price, compensation, penalty, ligation costs, etc. which the parent-subsidiary companies of Sino Great Wall needs to pay caused by the final results of ligation and arbitration cases, exceed the amount of liabilities which recognized in the “Audit Report” made for Sino Great Wall by Ruihua CPA (Special Ordinary Partnership) on the basis of the audit base day of July 31st, | the company a payment of RMB 5,601,460.21 for the difference between the lawsuit and arbitration of parent company and subsidiary of Sino Great Wall Co., Ltd.. For details information, please refer to the Announcement on the Payment of Cash by the Controlling Shareholder and the Actual Controller to the Company to Fulfill the Commitment published by the company on the website of Juchao Information (cninfo.com.cn ) on May 22, 2018.) |
| 2014, I promise to bear the balance by cash unconditionally so as to guarantee the parent-subsidiaries of Sino Great Wall won’t suffer any loss. 2. This commitment letter is irrevocable. | |||||
| Chen Lue | Cash compensation | 1. On condition that ownership defect exists in the lease of house property of parent-subsidiary companies of Sino Great Wall and its subsidiary corporation, which resulted in inability for parent-subsidiary companies of Sino Great Wall and its subsidiary | March 19,2015 | Long-term | Strict performing |
| Chen Lue | Cash compensation | “In condition that parent-subsidiary companies of Sino Great Wall or its son subsidiary haven’t paid social security or housing fund for staff according to law, which resulted in any losses to Sino Great Wall , including the competent authorities’ requirement for Sino Great Wall or its subsidiary to make supplementary payment, to be punished and resourced, I will bear by full-amount cash for the fee of supplemental payment | March 19, 2015 | Long-term | Strict performing |
| and the expense and fee for being punished or resourced, which is to guarantee Sino Great Wall and its subsidiary to avoid suffering from any loss ”. | |||||
| Chen Lue | Cash compensation | “At present, Suzhou Lvbang has possessed one state-own land use right, of which the land certificate is Suzhou Guo Yong(2014) No.Y2014086”, locates in Danan Village, Dadian Town, Yongqiao District, Suzhou City with 32,966 square meters of area and the purpose for industry. Suzhou | March 19,2015 | Long-term | Strict performing |
| ownership, which shall be my responsibility to carry out solution, and I undertake to compensate by cash for Suzhou Lvbang’s losses which are due to this matter, guaranteeing no losses occur to Sino Great Wall and Suzhou Lvbang for this matter. | |||||
| Chen Lue | Cash compensation | “According to the “Agreement of Significant Asset Replacement and Issue of Share to Buy Asset”(hereinafter referred to as “Agreement”) signed among Victor Onward Holdings, | March 19, 2015 | Long-term | Strict performing |
| Holdings according to the“ Agreement”, I will compensate by cash for the Victor Onward Company within 5 working day in advance. Meanwhile, I will reserve the resource rights for Union Group and the specified third party “. | |||||
| Chen Lue, He Feiyan | Performance commitment | According to“ Agreement of Shenzhen Victor Onward Textile Industrial Co., Ltd., Chen Lue and He Feiyan Concerning on Performance Compensation” and its supplemental | May 11,2015 | Long-term | Completed |
| ce Compensation Agreement” and its supplemental agreement | |||||
| Chen Lue; He Feiyan | Independent competition | 1. This reorganization is planned to place in asset. At present, complete separation has existed between me or other enterprises under my possession (if any) and the listed company in staff, asset, finance, institution and business of Sino Great Wall. Independence exists in both staff, asset, finance, institution and business and no confusion exists. 2. I undertake, | September 30,2015 | Long-term | Strict performing |
| the fair operation according to the principle of market culture and the fair price, and fulfill the transaction procedures and the obligation of disclosing information according to relevant laws and regulations and normative document. | |||||
| Chen Lue; He Feiya | Related transactions | “1.Before this reorganization, the fairness and reasonableness of pricing and the legitimacy and effectiveness of decision-making procedure exist in the transaction(if any) between me or the | March 19, 2015 | Long term | Strict perfo rming |
| the related transaction to illegally transfer the capital and profit of listed company, and not to utilize this transaction to engage in any behaviors which will cause any losses to listed company or other shareholder’s legitimate rights. Once I violate the above promises and cause losses to the listed company, I will compensate the listed company for the losses caused by the this matter. | |||||
| Union Development Group Co., Ltd. | Income disposal | During the assets reorganization, the house | March 19,2015 | Long-term | Fully completed (On March 29, 2018, the |
| property and land without property certificate in the disposed assets within the plant area of Kuixin Community of Kuichong Street of Longgang District and the expected compensations, as well as the expected compensations concerning to the regaining of plots planned as schools within the right of land use of Nanyou Industrial Park of Nanshan District have not been recorded in the assessment. Therefore, Union Group | company received an economic compensation of RMB 100 million from Shenzhen Union Development Investment Co., Ltd., and promised to complete the performance.) |
| buildings at built-up area are within the plan of removal and collection of government，hereinafter referred as “undocumented property) still belongs to Victor Onward Holdings. And the benefits and risks of the real estate without certificate are enjoyed and assumed by Victor Onward Holdings.” | |||||
| Union Development Group Co., Ltd | Cash compensation | According to the Term 5.5.3 of Agreement on Major Asset Replacement and Asset Purchase Through Issuing Shares (hereinafter referred to as | March 19,2015 | Long-term | Completed the implementation (On March 29, 2018, the company received an economic compensation of RMB 100 million from Shenzhen Union |
| Agreement) signed on October 13, 2014 by the company and all shareholders of Victor Onward Co. Ltd.. and Sino Great Wall, Victor Onward Holdings should obtain the letter of approval concerning the transferred debts of the disposed assets from the creditor (including the guarantee, similarly hereinafter) before the date of assets delivery. In the situation of debts on Victor Onward Holdings due to the absence of creditor’s consent, the company or | Development Investment Co., Ltd., and promised to complete the performance.) |
| debts, payment obligations and penalties, the company or the third party appointed by the company will fully compensate for the losses of Victor Onward Holdings due to the above-mentioned matters based on the Agreement in cash. | ||||||
| Commitments make in initial public offering or re-financing | No | No | No | No | No | |
| Equity incentive commitment | No | No | No | No | ||
| Other commitments for medium and small shareholders | No | No | No | No | ||
| Completed on time(Y/N) | Yes | |||||
| If the commitments are not fulfilled on time, shall explain the specify reason and the next work plan | Nil | |||||
2.The existence of the company's assets or projects earnings forecasts and earnings reporting period is stillin the forecast period, the company has assets or projects meet the original profit forecast made and thereasons explained
□Applicable √ Not applicable
IV. Particulars about the non-operating occupation of funds by the controlling shareholder
□ Applicable √ Not applicableNo non-operating occupation from controlling shareholders and its related party in the period.
V. Explanation of the Supervisory Committee and Independent Directors (If applicable)onthe Qualified Auditor’s Report Issued by the CPAs.
√ Applicable □ Not applicableReanda Certified Public Accountants (LLP) audited the financial report of Sino Great Wall Co., Ltd. (hereinafter referred to as "theCompany") for 2018 and issued an Audit Report, (LADS Zi [2019] No 2333), which was unable to provide opinions. The board ofdirectors, board of supervisors and independent directors of the company issued the following relevant explanations:
1. Special Notes of the Board of Directors on Matters Involving Non-standard Audit Opinions in 2018 Financial ReportThe board of directors believes that "matters that lead to the inability to express opinions" fully reveal the risks faced by the companyand objectively reflect the actual situation and financial situation of the company. The board of directors of the company agrees to theaudit report issued by Reanda Certified Public Accountants (Special General Partnership) for the 2018 financial report of thecompany that cannot express opinions. The Board of Directors of the Company will take effective measures to eliminate the aboverisk factors as far as possible.2. The opinions of the Board of Supervisors on the special statement of the Board of Directors on matters concerning thenon-standard audit opinion in the 2018 financial reportIn the opinion of the Board of Supervisors: Reanda Certified Public Accountants (Special General Partnership) has issued adisclaimer audit report on the Company's 2018 financial report based on professional judgment. We respect the professional opinionsof the accountants and agree with the special statement of the Board of Directors on the matters covered in the disclaimer audit report.The Board of Supervisors will actively cooperate with the Board of Directors, keep an eye on the development of the relevant workof the Board of Directors and the management continuously, and earnestly safeguard the legitimate rights and interests of theCompany and all shareholders. Meanwhile, the Board of Supervisors hopes that the Board of Directors and the management will takeeffective measures to eliminate the contents mentioned in the audit report that lead to the inability to express opinions as soon aspossible, so as to effectively safeguard the interests of the majority of investors.3. Independent opinions of the independent directors on matters concerning the non-standard audit opinion in the 2018 financialreportAfter the relevant information consulted and communicating with the audit institution and relevant personnel, as an independentdirector of the Company, we consider that the disclaimer audit report on the 2018 financial report of the Company issued by ReandaCertified Public Accountants (LLP) is based on professional judgement, and we respect the professional opinions of the accountantsand agree with the special statement of the Board of Directors on the matters covered in the disclaimer audit report. The measurestaken or to be taken by the Board of Directors are conducive to eliminating the matters concerning this disclaimer audit report ofopinion and their impacts. We will urge the Board of Directors and the management of the Company to pay continuous attention tothis matter and earnestly safeguard the rights and interests of the Company and all shareholders.
VI. Explain change of the accounting policy, accounting estimate and measurement methodsas compared with the financial reporting of last year.
√Applicable □Not applicableThe format of financial statements of general enterprises has been revised in accordance with the provisions of Notice on Revisionand Issue of 2018 Format of Financial Statements for General Enterprises (CK [2018] No.15) issued by the Ministry of Finance.
VII. Explain retrospective restatement due to correction of significant accounting errors inthe reporting period
□Applicable √ Not applicableNo major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
VIII. Explain change of the consolidation scope as compared with the financial reporting oflast year.
√Applicable □Not applicableDuring the reporting period, the changes in the scope of consolidated statements are detailed in the notes to the financial reports.
IX. Engagement/Disengagement of CPAs
CPAs currently engaged
| Name of the domestic CPAs | Reanda Certified Public Accountants LLP |
| Remuneration for domestic accounting firm (Ten thousand yuan) | 260 |
| Continuous life of auditing service for domestic accounting firm | 1 |
| Name of domestic CPA | Wang Xinyu, Zhou Zhonghua |
| Continuous life of auditing service for domestic accounting firm | 1 |
Has the CPAs been changed in the current period√ Yes □NoWhether change the appointment of account firm during the auditing period or not□ Yes √NoWhether perform approval procedures when change the appointment of account firm or not√ Yes □NoA detailed explanation of the change of employment and accounting firmDue to the arrangement of project personnel of Shu Lun Pan CPAs (Special General Partnership) and other reasons, its 2018 annualaudit work time cannot match the company's plan; Meanwhile, considering that it has provided auditing services for the company formany years, in order to ensure the independence and objectivity of the company's audit work, the fourth meeting of the company'seighth board of directors and the first extraordinary general meeting of shareholders in 2019 deliberated and passed the Proposal onReplacement of Accounting Firm, it was agreed to employ Reanda Public Certified Accountants (special general partnership) as thecompany's 2018 annual financial report and internal control auditing body for a period of one year. For details, please refer to thecompany's announcements 2019-007,2019-010 and 2019-016 published on Cninf on January 29, 2019 and February 14, 2019.CPAs firm for the internal control audit√applicable □ Not applicableIn the current year, the company engaged Reanda Certified Public Accountants LLP as the internal control audit accounting firm,during the period, the company totally pays RMB 600,000 for the internal control audit expenses.
X. Situation of Facing Listing Suspension and Listing Termination after the Disclosure of theYearly Report
□Applicable √ Not applicable
XI. Bankruptcy reorganization
□Applicable √ Not applicableNo bankruptcy reorganization for the Company in reporting period.
XII. Significant lawsuits and arbitrations of the Company
√ Applicable □Not applicable
| General information | Involved amount （Ten thousand yuan) | Provision | Progress | Decisions and effects | Execution of decisions | Disclosure date | Index to disclosed information |
| Loan Contract Dispute Case with Shenzhen Guodingsheng Trading Co., Ltd. | 12,811.63 | No | Second instance judgment is given and case is closed | First-instance judgment: Defendant I shall repay the principal of 88，082，007.52 yuan and overdue interest of 1，377，936.36 yuan; Defendants II, III and IV shall be jointly and severally liable; Defendant V shall assume the pledge guarantee responsibility and other claims are rejected. The second instance judgment was as follows: The appeal was | The Guangdong Shenzhen Intermediate People's Court issued (2019) Y03Z701 enforcement verdict, with a mandatory enforcement of 88，941，110.88 yuan. | August 31,2018 | On August 31, 2018, it was disclosed in the 2018 Semi-annual Report on Cninf; On September 2018, Announcement on the Company, Its Wholly-owned Subsidiaries and Controlling Shareholders Receiving <Notice of Enforceme |
| rejected and the original verdict was upheld. | nt> and < Property Report Order>; On October 23, 2018, Announcement on Reply to Inquiry Letter on Semi-annual Report of Shenzhen Stock Exchange(Announcement No.:2018-125）; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019)；Announcement on the Progress of Major Litigation and Arbitration Matters on |
| April 19, 2019 (Announcement No.: 2019-036) | |||||||
| Financial loan contract dispute case of Zhuhai Branch of Xiamen International Bank Co., Ltd. | 4,997.22 | No | The first-instance verdict was closed and an appeal was filed. | August 31,2018 | On August 31, 2018, it was disclosed in the 2018 Semi-annual Report on Cninf; On September 2018, Announcement on the Company, Its Wholly-owned Subsidiaries and Controlling Shareholders Receiving <Notice of Enforcement> and < Property Report Order>; On October 23, 2018, Announcement on Reply to Inquiry Letter on Semi-annual Report |
| of Shenzhen Stock Exchange(Announcement No.:2018-125）; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019) | |||||||
| Loan contract dispute case with Li Qiaoli | 16,192.92 | No | The judgment is given and the case is closed. | — | Under enforcement On February 2, 2019, Shenzhen Intermediate People's Court issued (2019) Y03Z65 enforcement verdict, with a mandatory enforcement of 177.,194128 million yuan | August 31,2018 | On August 31, 2018, it was disclosed in the 2018 Semi-annual Report on Cninf; On September 2018, Announcement on the Company, Its Wholly-owned Subsidiaries and Controlling Shareholde |
| rs Receiving <Notice of Enforcement> and < Property Report Order>; On October 23, 2018, Announcement on Reply to Inquiry Letter on Semi-annual Report of Shenzhen Stock Exchange(Announcement No.:2018-125）; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019) | |||||||
| Loan contract dispute case of Shenzhen Brach of Bank of Ningbo | 9,523.09 | No | Waiting for the judgment of first instance. | — | — | August 31,2018 | On August 31, 2018, it was disclosed in the 2018 |
| Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019) | |||||||
| Loan contract dispute case of Industrial Bank (China) Shenzhen Houhai Sub-branch | 29,137.97 | No | The judgment is given and the case is closed. | — | Shenzhen Intermediate People's Court issued (2018) Y03Z2798, with a mandatory enforcement of 293,399,781 yuan. | August 31,2018 | On August 31, 2018, it was disclosed in the 2018 Semi-annual Report on Cninf; On September 2018, Announcement on the Company, Its Wholly-owned Subsidiaries and Controlling Shareholders Receiving <Notice of Enforcement> and < Property Report Order>; On October 23, 2018, |
| Announcement on Reply to Inquiry Letter on Semi-annual Report of Shenzhen Stock Exchange(Announcement No.:2018-125）; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019); Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036) | |||||||
| Enforcement case | 11,711.49 | No | The | — | Under | September | On |
| of Shaanxi International Trust Co., Ltd | (2018) XZZF Zi No. 140 execution certificate issued by Xi'an Notary Office has become legally effective, and Shaanxi International Trust Co., Ltd. applied to Beijing Second Intermediate People's Court for compulsory execution | enforcement | 14,2018 | September 2018, Announcement on the Company, Its Wholly-owned Subsidiaries and Controlling Shareholders Receiving <Notice of Enforcement> and < Property Report Order>; On October 23, 2018, Announcement on Reply to Inquiry Letter on Semi-annual Report of Shenzhen Stock Exchange(Announcement No.:2018-125）; On February 20, 2019, Announcement on Reply to Shenzhen |
| Stock Exchange's Letter of Concern(Announcement No.::2019-019); Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036) | |||||||
| Enforcement case of CCB International Asset Management (Shanghai) Co., Ltd | 21,111.82 | No | The Notice of Enforcement from Beijing Third Intermediate People's Court on the Case of Notarization of Creditor's Rights Documents between the Company and CCB | Consumption restriction order | Under enforcement | September 18,2018 | On September 2018, Announcement on the Company, Its Wholly-owned Subsidiaries and Controlling Shareholders Receiving <Notice of Enforcement> and < Property Report Order>; On |
| International Asset Management (Shanghai) Co., Ltd. is received | February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019) | ||||||
| Loan dispute case with Chen Jiang | 4,980 | No | The case is closed through mediation | 1. Confirm the outstanding loan principal of 49.8 million yuan and interest. 2. Pay interest of 5,342,800 yuan before July 25, 2018. 3. Pay interest of 15 million yuan before July 31, 2018. 4. Pay principal of 34.8 million yuan before September 30, 2018. 5. The lawsuit fee of 290,800 yuan and preservation fee of 5000 yuan shall be borne by Sino Stock Company. Pay off before July 31, 2018. 6. Other | Under enforcement | September 18,2018 | On September 2018, Announcement on the Company, Its Wholly-owned Subsidiaries and Controlling Shareholders Receiving <Notice of Enforcement> and < Property Report Order>; On October 23, 2018, Announcement on Reply to Inquiry Letter on Semi-annu |
| defendants shall pay off jointly and severally. 7. Chen Jiang shall apply for unsealing within 3 days after the aforesaid payment is completed. 8. Failure to pay the aforesaid amount may be subject to enforcement. 9. Chen Jiang has the priority of compensation for the pledge | al Report of Shenzhen Stock Exchange; Announcement on Enforcement of Company Shares Held by Directors and Senior Executives on January 5, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019) | ||||||
| Contract dispute case with Gome Cinda Factoring Co., Ltd. | 4,285.52 | No | The first-instance verdict was closed and an appeal was filed. | — | — | October 23,2018 | On October 23, 2018, Announcement on Reply to Inquiry Letter on Semi-annual Report of Shenzhen Stock |
| Exchange; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019); Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036) | |||||||
| Financial loan contract dispute case with Bohai International Trust Co., Ltd. | 36,492.18 | No | Waiting for the judgment of first instance. | — | — | September 15,2018 | Announcement on Partial Debt Overdue on September 15, 2018; Announcement on Receiving Civil Complaint on October 9, 2018; |
| On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019) | |||||||
| Financial loan contract dispute case with China Industrial International Trust Limited | 10,245.74 | No | The first-instance verdict was closed | — | — | September 15,2018 | Announcement on Partial Debt Overdue on September 15, 2018; Announcement on Receiving Civil Complaint on October 13, 2018；On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019); |
| Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036) | |||||||
| Financial loan contract dispute case with China Industrial International Trust Limited | 10,113.78 | No | The first-instance verdict was closed | Sino Great Wall shall repay the loan principal of 100 million yuan, the interest calculated according to the interest rate agreed in the contract from June 30, 2018 to August 7, 2018, the overdue interest (default interest) calculated according to the interest rate agreed in the contract from August 8 in 2018 to the actual repayment date, and the compound interest calculated | — | September 15,2018 | Announcement on Partial Debt Overdue on September 15, 2018; Announcement on Receiving Civil Complaint on October 13, 2018；On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019) |
| fee is 547,488.89 yuan, of which 5050 yuan shall be borne by China Industrial International, and 542,438.89 yuan shall be borne jointly by Sino Great Wall, Chen Lue and He Feiyan. The case preservation fee of 5,000 yuan shall be shared by Sino Great Wall, Chen Lue and He Feiyan. | |||||||
| Bill dispute case with Jiaozuo Junpeng Coal Co., Ltd. | 305 | No | The judgment is given and the case is closed. | — | The plaintiff has not yet applied for enforcement for failure to perform | October 13,2018 | Announcement on Receiving Civil Complaint on October 13, 2018；On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019) |
| Bill dispute case with Tongchuan New District Hengxin Building Material Co., Ltd. | 456 | No | The judgment is given and the case is closed. | — | The plaintiff has not yet applied for enforcement for failure to perform | October 13,2018 | Announcement on Receiving Civil Complaint on October 13, 2018；On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019) |
| Bill dispute case with Xian Bihui Road & Bridge Engineering Co., Ltd. | 507 | No | The judgment is given and the case is closed. | — | The plaintiff has not yet applied for enforcement for failure to perform | October 13,2018 | Announcement on Receiving Civil Complaint on October 13, 2018；On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019) |
| Financial loan contract dispute case with Datong Securities Co., Ltd. | 13,801.32 | No | The judgment is given and the case is closed. | — | — | September 14,2018 | Announcement on Early Termination of Collective Funds Trust Plan for Trust Loan on September 14, 2018；Announcement on Partial Debt Overdue on September 15, 2018; Announcement on Receiving Civil Complaint on October 18, 2018(Announcement No.:2018-120);On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019); |
| Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036) | |||||||
| Financial loan contract dispute case of Ping An International Financial Leasing Co., Ltd. | 2,905.1 | No | Waiting for a court decision. | — | — | October 24,2018 | Announcement on Receiving Civil Complaint on October 24, 2018；Announcement on Receiving Notice of Early Maturity of Debt on October 26, 2018; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019- |
| 019) | |||||||
| Private loan dispute case with Gong Lihong | 3,143.18 | No | The first-instance verdict was closed and the company has appealed | — | — | October 24,2018 | Announcement on Receiving Civil Complaint on October 24, 2018；On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019) ; Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036) |
| Right of recourse dispute case with Shenzhen Yi'an Factoring Co., Ltd. | 301.89 | No | Waiting for the judgment of first instance | — | — | October 24,2018 | Announcement on Receiving Civil Complaint on October 24, 2018； |
| On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019); Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036) | |||||||
| Loan contract dispute case with Zhongjiang International Trust Co., Ltd. | 32,738.68 | No | Waiting for the judgment of first instance | — | — | September 29,2018 | Announcement on Receiving Notice of Early Maturity of Debt on September 29, 2018 ；Announcement on Receiving Civil Complaint |
| on November 10, 2018；On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019) | |||||||
| Loan dispute case with China Railway Trust Co., Ltd. | 2,140.87 | No | The enforcement verdict has been received. | — | In commission | February 13,2019 | Announcement on Receiving <Civil Complaint> and <Notice of Advance Mediation> on February 13, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019- |
| 019) | |||||||
| Financial loan contract dispute case with Shenzhen Branch of Shanghai Pudong Development Co., Ltd. | 7,017.76 | No | No trial has yet been held. | — | — | February 13,2019 | Announcement on Receiving <Civil Complaint> and <Notice of Advance Mediation> on February 13, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019) |
| Financial loan contract dispute case of Shenzhen Branch of China Minsheng Bank | 10,164.09 | No | Mediation stage before litigation. | — | — | February 13,2019 | Announcement on Receiving <Civil Complaint> and <Notice of Advance Mediation> on February 13, 2019; On February 20, 2019, Announce |
| ment on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019) | |||||||
| Enforcement case with Beijing Zhongguancun Sci-tech Financing Guaranty Co., Ltd. | 736.1 | No | Enforcement. | — | In commission | February 13,2019 | Announcement on Receiving <Civil Complaint> and <Notice of Advance Mediation> on February 13, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019) |
| Sales contract dispute case with Jieyang Fangyuan Stone Co., Ltd. | 489.33 | No | No trial has yet been held. | — | — | February 13,2019 | Announcement on Receiving <Civil Complaint> and |
| <Notice of Advance Mediation> on February 13, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019) | |||||||
| Installation contract dispute case with lvmeiyi Environmental Construction Group Co., Ltd. | 1,412.36 | No | No trial has yet been held. | — | — | February 13,2019 | Announcement on Receiving <Civil Complaint> and <Notice of Advance Mediation> on February 13, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(A |
| nnouncement No.::2019-019) | |||||||
| Contract of hired work dispute case with Shanghai Disheng Wood Co., Ltd. | 219.97 | No | Waiting for the judgment of first instance | — | — | February 13,2019 | Announcement on Receiving <Civil Complaint> and <Notice of Advance Mediation> on February 13, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019); Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: |
| 2019-036) | |||||||
| Loan dispute case with Henan No.1 Thermal Power Construction Co., Ltd. | 4,717.75 | No | The first-instance verdict was closed and the company has appealed | — | — | February 19,2019 | Announcement on Receiving <Civil Complaint>, <Arbitration Notice> and <Notice of Enforcement> on February 19, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019) ; Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036) |
| Contract dispute case with Gome Cinda Factoring Co., Ltd. | 4,163.7 | No | Mediation has been reached, waiting for the court to deliver the mediation document | — | — | February 19,2019 | Announcement on Receiving <Civil Complaint>, <Arbitration Notice> and <Notice of Enforcement> on February 19, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019) |
| Loan contract dispute case with Li Shaoxiong | 5,860.92 | No | Awaiting judgment | — | — | 2 February 19,2019 | Announcement on Receiving <Civil Complaint>, <Arbitration Notice> and <Notice of Enforcement> on February 19, 2019; On |
| February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019) | |||||||
| Enforcement case with Bairui Trust Co., Ltd. | 30,736.58 | No | The enforcement verdict has been received. | — | In commission | February 19,2019 | Announcement on Receiving <Civil Complaint>, <Arbitration Notice> and <Notice of Enforcement> on February 19, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concer(Announcement No.::2019-019) |
| Dispute case over Lease Agreement of construction equipment with Zhejiang Huatie Construction Support Technology Co., Ltd. | 979.05 | No | In the trial of first instance | — | — | February 19,2019 | Announcement on Receiving <Civil Complaint>, <Arbitration Notice> and <Notice of Enforcement> on February 19, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019) |
| Construction contract dispute case with Wang Kaixiang | 304.41 | No | Waiting for the judgment of first instance | — | — | February 19,2019 | Announcement on Receiving <Civil Complaint>, <Arbitration Notice> and <Notice of Enforcement> on February 19, 2019; On |
| February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019); Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036) | |||||||
| Labor subcontract dispute case with Hunan Zhongjian Construction Labor Co., Ltd. | 251.57 | No | An award is issued upon arbitration and the case is closed. | — | — | February 19,2019 | Announcement on Receiving <Civil Complaint>, <Arbitration Notice> and <Notice of Enforcement> on February 19, 2019; On February |
| 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019); Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036) | |||||||
| Loan contract dispute case with Beijing Tellhow Intelligent Engineering Co., Ltd. | 3,017.5 | No | — | 。Currently, the company has repaid the loan, and the plaintiff withdrew and closed the case. | August 31,2018 | On August 31, 2018, it was disclosed in the 2018 Semi-annual Report on Cninf; On September 14, 2018, the Announcement on the Company, Its |
| wholly-owned Subsidiaries and Controlling Shareholders Receiving the Notice of Enforcement and the Property Report Order; On October 23, 2018, Announcement on Reply to Inquiry Letter on Semi-annual Report of Shenzhen Stock Exchange(Announcement No.:2018-125） | |||||||
| Contract dispute case for construction project with Anhui Tiangan Construction Co., Ltd. | 59.85 | No | Nolle prosequi and case closed | — | Currrently, the payment has been completed and the case has been closed. | September 14,2018 | On September 14, 2018, the Announcement on the Company, Its wholly-owned Subsidiarie |
| s and Controlling Shareholders Receiving the Notice of Enforcement and the Property Report Order; On October 23, 2018, Announcement on Reply to Inquiry Letter on Semi-annual Report of Shenzhen Stock Exchange(Announcement No.:2018-125） | |||||||
| Right to recourse dispute case with China Arts Century Construction & Decoration Design (Beijing) Co., Ltd. | 43.8 | No | Nolle prosequi and case closed | — | The plaintiff withdrew the lawsuit and closed the case. | August 24,2018 | Announcement on Receiving Civil Complaint on October 24, 2018 |
| Financial loan contract case with SPD Bank .Beijing Branch | 7,977.89 | No | No trial has yet been held. | March 1, 2019 | Announcement on Receiving <Civil Complaint> on March |
| 1, 2019 | |||||||
| Financial loan contract case with Shanghai Bank .Beijing Branch | 27,411.99 | No | No trial has yet been held. | March 1, 2019 | Announcement on Receiving <Civil Complaint> on March 1, 2019 | ||
| Financial loan contract case with Bank of China.Shenzhen Futian | 7,934.39 | No | No trial has yet been held. | March 1, 2019 | Announcement on Receiving <Civil Complaint> on March 1, 2019 | ||
| Financial loan contract case with Hengfeng Bank .Fuzhou Branch | 10,024.5 | No | The case is closed through mediation | April 8,2019 | Announcement on Receiving <Civil Complaint> and <Application for Arbitration> on April 8, 2019 | ||
| Financial loan contract case with SPD Bank Beijing Branch | 3,965 | No | The case is closed through mediation | April 8,2019 | Announcement on Receiving <Civil Complaint> and <Application for Arbitration> on April 8, 2019 | ||
| Financial loan contract case with Hunan Jinjude Construction Investment Co., Ltd. | 502 | No | In the first instance trial | April 8,2019 | Announcement on Receiving <Civil Complaint> and |
| <Application for Arbitration> on April 8, 2019 | |||||||
| Dispute case over decoration and renovation contract with Xu Zhigui | 104.07 | No | In the first instance trial | April 8,2019 | Announcement on Receiving <Civil Complaint> and <Application for Arbitration> on April 8, 2019 | ||
| Financial loan contract case with Jiujiang Bank .Guangzhou Haizhu Branch | 10,223.39 | No | The case is closed through mediation | April 8,2019 | Announcement on Receiving <Civil Complaint> and <Application for Arbitration> on April 8, 2019 | ||
| Financial loan contract case with Baoshang Bank.Shenzhen Branch | 20,451.46 | No | The case is closed through mediation | April 13, 2019 | Announcement on Receiving <Civil Complaint> plication > on April 13, 2019 | ||
| Other small litigations | 4,411.59 | No | — | — | — | October 23,2018 | On February 20, 2019, Announcement on Reply to Shenzhen |
XIII. Situation of Punishment and Rectification
√ Applicable □Not applicable
StockExchange'sLetter ofConcer；OnAugust 31,2018, itwasdisclosedin the 2018Semi-annual Reporton Cninfby 34.4954millionyuan; OnFebruary20, 2019,Announcement onReply toShenzhenStockExchange'sLetter ofConcern(AnnouncementNo.::2019-019)Name
| Name | Type | Reasons | Type of Punishment | Conclusion (if any) | Disclosure date | Disclosure index |
| Sino Great Wall Co., Ltd | The company | As the company is suspected of violating laws and regulations in information disclosure, according to the relevant | An investigation is filed or an administrative punishment is imposed by the China Securities Regulatory | As of the disclosure date of this announcement, the company has not yet received the China Securities | October 19,2018 | （www.cninfo.com.cn）（Announcement No.:2018-121） |
| provisions of the Securities Law of the People's Republic of China, the CSRC has decided to initiate an investigation in the company. | Commission | Regulatory Commission's concluding comments or decisions on relevant investigation matters. | ||||
| Sino Great Wall Co., Ltd | The company | The Shenzhen Supervision Bureau of China Securities Regulatory Commission will conduct on-site inspections of the company from May 2018 onwards | Be investigated by a competent authority | Decision on Administrative Supervision Measures of Shenzhen Supervision Bureau of China Securities Regulatory Commission ([2019] No.11) | March 7,2019 | （www.cninfo.com.cn）（Announcement No.:2019-022） |
| Chen Lue, Tian Wei, Tang Xianyong, Cui Hongli and Yang Chunling | Senior executives | The Shenzhen Supervision Bureau of China Securities Regulatory Commission will conduct on-site inspections of the company from May 2018 onwards | Be investigated by a competent authority | Decision on Administrative Supervision Measures of Shenzhen Supervision Bureau of China Securities Regulatory Commission [2019] No.12 [2019]No.13 [2019]No.14 [2019]No.15 and [2019]No.16 | March 7,2019 | （www.cninfo.com.cn）（Announcement No.:2019-022） |
| Chen Lue | Director | The Shenzhen Supervision | Be investigated by a competent | Decision on Administrative | March 7,2019 | （www.cninfo.com.cn) |
| Bureau of China Securities Regulatory Commission will conduct on-site inspections of the company from May 2018 onwards | authority | Supervision Measures of Shenzhen Supervision Bureau of China Securities Regulatory Commission ([2019] No.12) | （Announcement No.:2019-022） |
Explanation on Rectification√Applicable □Not applicableOn October 18, 2018, the company received the notice of investigation issued by the China Securities Regulatory Commission (No:
JDC Zi No. 18041). As the company is suspected of violating laws and regulations in information disclosure, according to therelevant provisions of the Securities Law of the People's Republic of China, the CSRC has decided to initiate an investigation in thecompany. On March 6, 2019, the company received the Shenzhen Securities Regulatory Bureau's Decision on AdministrativeSupervision Measures (No 2019] 11, No. [2019] 12 , No. [2019] 13 ,No. [2019] 14 , No. [2019] 15, and No. [2019] 16) showing thatthe Shenzhen Securities Regulatory Bureau had carried out on-site inspection of the company since May 2018, and the ShenzhenSecurities Regulatory Bureau had filed a case for investigation on the illegal disclosure of relevant information found in theinspection; In addition, through inspection, it is also found that the company had the following problems "I. The income costaccounting is not standardized, and expenses are charged through out-of-account fund accounts; II. It did not disclose the changes inmajor items in a timely manner, the preparation of performance forecasts and performance report is not prudent; III. It has capitalexchanges of no real business foundation with a number of companies, and illegal foreign financial assistance; IV. The relevantmanagement system for raising funds is not perfect; V. Registration management for information insider is not standardized". TheShenzhen Securities Regulatory Bureau decided to take corrective measures against the company, the company's relevant directors,senior management personnel, and issue warning letters to Mr. Chen Lue, Mr. Tian Wei, Mr. Tang Xianyong, Ms. Cui Hongli, Ms.Yang Chunling (see 2018-121, 2019-022,2019-033) In response to the relevant problems found during the inspection against thecompany, the company has made serious rectification in accordance with the matters involved in the Decision on Taking CorrectiveMeasures against Sino Great Wall Co., Ltd. ([2019] No.11). In addition to the above matters, Shenzhen Securities Regulatory Bureaurequires the company to employ a third party independent agency to conduct special inspections on the problems of NPP-0057 inXingang, Qatar, Cambodia Refinery and NAGA Casino Phase II project in Cambodia.As of the disclosure date of this announcement, the company has not yet received the China Securities Regulatory Commission'sconcluding comments or decisions on relevant investigation matters.
XIV. Credit Condition of the Company and its Controlling Shareholders and ActualControllers
√Applicable □Not applicable(I) The integrity of the company and its subsidiaries1. The company and its wholly-owned subsidiary Sino International Engineering Co., Ltd. were incorporated into the list ofdefaulters due to breach by the Beijing Second Intermediate People's Court due to the dispute with Shaanxi International TrustCompany Limited over financial loan contract. Currently, the case is in enforcement.2. Due to a dispute with CCB International Asset Management (Shanghai) Co., Ltd over financial loan contract, the company and its
wholly-owned subsidiary Sino International Engineering Co., Ltd. were incorporated into the list of defaulters by the Beijing ThirdIntermediate People's Court. Currently, the case is in enforcement.3. The company was incorporated into the list of defaulters by Beijing Third Intermediate People's Court due to the dispute withBairui Trust Co., Ltd. over financial loan contract. Currently, the case is in enforcement.4. Due to a dispute with China Railway Trust Co., Ltd. over financial loan contract, the company and its wholly-owned subsidiarySino International Engineering Co., Ltd. were incorporated into the list of defaulters by the Chengdu Intermediate People's Court.Currently, the case is in enforcement.5. The company and its wholly-owned subsidiary Sino International Engineering Co., Ltd. were incorporated into the list by theHaidian District People's Court of Beijing for notarizing the enforcement of creditor's rights documents with Beijing ZhongguancunSci-tech Financing Guaranty Co., Ltd. Currently, the case is under trial.6. Sino Great Wall International Engineering Co., Ltd., a subsidiary of the company, was incorporated into the list of defaulters byTangshan Intermediate People's Court for the dispute over the liability of victims of labor service providers with Cao Zhenrong.Currently, the case is in enforcement.7. Sino Great Wall International Engineering Co., Ltd., a subsidiary of the company, was incorporated into the list of defaulters by theTongzhou District People's Court of Beijing for its labor arbitration with Zhang Jie. Currently, the case is in enforcement.For details of the above cases, please refer to the company's announcements 2018-107, 2018-125, 2018-109, 2019-018, 2019-019,2019-015 published on Cninf (www.cninfo.com.cn) on September 14, 2018, October 23, 2018, September 18, 2018, February 19,2019, February 20, 2019(II) Integrity of controlling shareholders and actual controllers1. Chen Lue, the controlling shareholder and actual controller of the company, has been incorporated into the list of defaulters, due tohis failure to perform the obligations specified in the effective legal documents, including:
1) In the dispute between the company and Shanxi International Trust Co., Ltd. over financial loan contract, Chen Lue, as theguarantor and counter-guarantor, assumed joint and several guarantee liability for the above debts and was incorporated into the listof defaulters by the Beijing Second Intermediate People's Court. Currently, the case is in enforcement.2) In the dispute between the company and China Railway Trust Co., Ltd. over financial loan contract, Chen Lue, as the guarantor ofthe counter-guarantor, assumed joint guarantee liability for the debt and was incorporated into the list of defaulters by the ChengduIntermediate People's Court. Currently, the case is in enforcement.3) Chen Lue was incorporated into the list of defaulters by Tongzhou District People's Court of Beijing for a dispute over privatelending with Xia Honggan. Currently, the case is in the process of enforcement.4) In the case of notarization of creditor's rights documents between the company and Beijing Zhongguancun Sci-tech FinancingGuaranty Co., Ltd., Chen Lue, as the guarantor and counter-guarantor, assumed joint and several guarantee liabilities for the debtsand was incorporated into the list of defaulters by the Haidian District People's Court of Beijing. Currently, the case is under trial.5) In the dispute between the company and Bairui Trust Co., Ltd. over financial loan contract, Chen Lue, as the guarantor andcounter-guarantor, assumed joint guarantee liability for the debt and was incorporated into the list of defaulters by the Beijing ThirdIntermediate People's Court. Currently, the case is in enforcement.6) In the case of dispute over the financial loan contract between the Company and CCB International Asset Management (Shanghai)Co., Ltd., Chen Lue as the counter guarantor assumed a joint surety bond liability for the debt and was incorporated by Beijing ThirdIntermediate People's Court into the list of defaulters. Currently, the case is in enforcement.Regarding particulars of the preceding case, please refer to Announcement 2018-107, 2018-125, 2019-015, 2019-019, 2019-018, and2018-109 published by the Company at Cninf (www.cninfo.com.cn) on September 14, 2018, October 23, 2018, February 13, 2019,February 20, 2019, February 19, 2019 and September 18, 2018 respectively.2. The Company's holding shareholder and actual controller Chen Lue held 583,454,556 shares of the Company, accounting for 34.36%of its total capital stock. In the report period, all the shares held by Mr. Chen Lue were frozen and waited for being frozen,attributable to a property preservation caused by his assumption of personal joint guarantee for a subsidiary to carry out business
financing. For more information, please refer to Announcement on Waiting to Freeze Shares of the Holding Shareholder 2018-112,2018-124, 2018-139, 2018-143, 2018-145 ,2018-150.2018-153,2018-155,2019-017 and 2019-025 published by the Company atCninf (www.cninfo.com.cn) on September 22, 2018, October 23, 2018, November 2, 2018, November 14, 2018, November 15, 2018,November 20, 2018, November 28, 2018 ,December 22, 2018, February 6,2019 and March 27, 2019 respectively.
XV. Implementation Situation of Stock Incentive Plan of the Company, Employee StockOwnership Plan or Other Employee Incentive Measures
√Applicable □ Not applicableThe second meeting of the seventh board of directors, the second meeting of the seventh board of supervisors and the 2015 thirdextraordinary general shareholder meeting were respectively convened by the company on Nov 5, 2015 and Nov 23, 205, at whichthe Proposal on the First Phase of Employee Stock Ownership Plan (draft) of Shenzhen Victor Onward Textile Industrial Co., Ltdwas examined and approved.Please refer to the published on November 7, 2015 and November 24,2015 (www.cninfo.com.cn) on the relevant announcement.On December 24, 2015, the company as the asset trustor of the ESOP asset management plan, together with the asset manager-Xingzheng Securities Asset Management Co., Ltd. and the asset trustee- China Everbright Bank Co., Ltd. signed the contract ofNo.57 Xing Zheng Zi Guan Xin Zhong Assets Management Contract of the Collection Assets Management Plan which concretelyexplained and stipulated the information included the basic information of the collection plan, participating in and withdrawal of thecollection plan, guarantee, classification of the collection plan, the management methods and the management rights of the customerassets in the collection plan, the establishment of the collection plan, the expenses of the collection plan, the proceeds and itsdistribution of the collection plan, investment philosophy and investment strategy, investment decision-making and risk control,restrictions and prohibited behaviors of investment, information disclosure of the collection plan, transfer of the share of thecollection plan, non-transaction transfer ownership and freezing and so on.Please refer to the published on December 29, 2015 (www.cninfo.com.cn) on the relevant announcement.As of January 7, 2016, the company’s first phase of the employee stock ownership plan has completed the share-purchasing by meansof buying in the secondary security market, of which the average position price is RMB44.7578 per share, the total purchase quantityis 833,187 shares which account for 0.1864% of the company's total share capital, and the total turnover is RMB37,291,630. Thelock-up period of the shares purchased under the plan is 12 months commenced from the date of this Announcement. Please refer tothe published on January 8, 2016 (www.cninfo.com.cn) on the relevant announcement.On November 20, 2017, with the consent of more than two-thirds of the holders presented at the holders’ meeting, the “Proposalon the one-year extension of the company's first phase ESOP” was passed. On November 21, 2017, the company held thetwenty-sixth meeting of the seventh board of directors, which reviewed and adopted the “Proposal on the one-year extension of thecompany's first phase ESOP”, and according to the voting result of the holders’ meeting, the board agreed to extend the duration ofthe company's first phase ESOP by one year, meaning that the ESOP can sell shares within the afore-said extension of one year (untilNovember 23, 2018).If the shares are not sold before the expiration of the extended one year, a further meeting of the holders and themeeting of the board of directors can be convened two months before the expiration to consider the follow-up matters. Please refer tothe published on November 22, 2017 (www.cninfo.com.cn) on the relevant announcement.
On November 20, 2018, attendees of the holders' meeting with 2/3 of shares agreed and adopted the Proposal on Extending theCompany's First Staff Shareholding Plan for One Year. On November 21, 2018, the Company convened the second meeting of theeighth Board of Directors, deliberating and adopting the Proposal on Extending the Company's First Staff Shareholding Plan for OneYear. According to voting results at the holders' meeting, the Board of Directors agreed to extend the Company's first staffshareholding plan for one year, i.e., the former expiry date was extended to one year later--November 23, 2019. In the duration, once
the Company's shares held in the staff shareholding plan are sold out, the staff shareholding plan may be terminated beforehand. Ifshares are not sold upon the expiry of the extended period, a holders' meeting and meeting of Board of Directors may be convened 2months before the expiration to deliberate relevant following matters. Please refer to the published on November 22, 2018(www.cninfo.com.cn) on the relevant announcement.
XVI. Material related transactions
1. Related transactions in connection with daily operation
□Applicable √ Not applicableNil
2. Related-party transactions arising from asset acquisition or sold
□Applicable √ Not applicableNo related transactions by assets acquisition and sold for the Company in reporting period.
3. Related-party transitions with joint investments□Applicable √ Not applicableNo main related transactions of joint investment outside for the Company in reporting period.4. Credits and liabilities with related parties□Applicable √ Not applicable
Nil
5. Other significant related-party transactions
√ Applicable □Not applicable
On March 12, 2018, the company and Union Development Group Co., Ltd. and Chen Lue signed an Agreementon the Economic Compensation for the Events after the Major Asset Restructuring Period of Shenzhen VictorOnward Textile Industrial Co., Ltd. On March 17, 2018, the company and Union Development Group and Mr.Chen Lue signed a Supplementary Agreement on Agreement on the Economic Compensation for the Events afterthe Major Asset Restructuring Period of Shenzhen Victor Onward Textile Industrial Co., Ltd. On March 29, 2018,the company received RMB 100 million as the economic compensation paid by Shenzhen Union DevelopmentInvestment Co., Ltd.
Website for temporary disclosure of the connected transaction
| Announcement | Date of disclosure | Website for disclosure |
| Announcement on Signing the Economic Compensation Agreement and Changes in Shareholders' Commitments and Related Transactions | March 20,2018 | http://www.cninfo.com.cn |
| Announcement on the Supplemental Agreement for the Signing of the Economic Compensation Agreement | March 20,2018 | http://www.cninfo.com.cn |
XVII. Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
□Applicable √ Not applicableNo trusteeship, contract or leasing for the Company in reporting period.
(2) Contract
□ Applicable √ Not applicableNo any contract for the Company in the reporting period.
(3) Lease
√Applicable □ Not applicableNotesDuring the reporting period, the company's leasing expenses were mainly the company’s office space and staffquarters’ capital expenditures.
The company's profit and loss has reached more than 10% of the company's total profit during the reportingperiod□ Applicable √ Not applicable
Nil
2.Guarantees
√ Applicable □ Not applicable
（1）Guarantees
Unit: 10,000 Yuan
| Guarantee of the Company for the controlling subsidiaries (Exclude controlled subsidiaries) | ||||||||
| Name of the Company | Relevant disclosure date/No. | Amount of Guarantee | Date of happening (Date of signing | Actual mount of guarantee | Guarantee type | Guarantee term | Complete implementation | Guarantee for associate |
| of the guaranteed amount | agreement) | or not | d parties (Yes or no) | |||||
| Guarantee of the company for its subsidiaries | ||||||||
| Guarantee provided to | Amount of guarantee and date of disclosure | Amount of the guarantee | Actual date of occurring (signing date of agreements | Actual amount of guarantee | Type of guarantee | Term | Completed or not | Related guarantee |
| Sino International | March 31, 2016 | 70,000 | January 16,2017 | 70,000 | The joint liability guaranty | 1 year | No | No |
| Sino International | May 20, 2017 | 12,000 | October 28,2016 | 12,000 | The joint liability guaranty | 1 year | No | No |
| Sino International | March 31, 2016 | 7,000 | February 20, 2017 | 7,000 | The joint liability guaranty | 1 year | Yes | No |
| Sino International | May 20, 2017 | 12,000 | March 12, 2018 | 12,000 | The joint liability guaranty | 1 year | No | No |
| Sino International | March 31, 2016 | 20,000 | April 14, 2017 | 20,000 | The joint liability guaranty | 1 year | Yes | No |
| Sino International | March 31, 2016 | 18,000 | January 3, 2017 | 18,000 | The joint liability guaranty | 1 year | Yes | No |
| Sino International | May 20, 2017 | 12,000 | June 7, 2017 | 12,000 | The joint liability guaranty | 1 year | Yes | No |
| Sino International | March 29, 2018 | 11,990 | August 22, 2018 | 11,990 | The joint liability guaranty | 1 year | No | No |
| Sino International | May 20, 2017 | 40,000 | July 25, 2017 | 40,000 | The joint liability guaranty | 1 year | No | No |
| Sino International | May 20, 2017 | 22,000 | June 30, 2017 | 22,000 | The joint liability guaranty | 1 year | No | No |
| Sino International | May 20, 2017 | 20,000 | October 18, 2017 | 20,000 | The joint liability guaranty | 1 year | No | No |
| Sino International | May 20, 2017 | 10,000 | November 22, 2017 | 10,000 | The joint liability guaranty | 1 year | No | No |
| Sino International | May 20, 2017 | 10,000 | November 30, 2017 | 10,000 | The joint liability guaranty | 1 year | No | No |
| Sino International | March 31, 2016 | 8,400 | March 31, 2017 | 8,400 | The joint liability guaranty | 30 months | No | No |
| Sino International | May 20, 2017 | 8,000 | February 13, 2018 | 8,000 | The joint liability guaranty | 1 year | No | No |
| Sino International | May 20, 2017 | 20,000 | December 20, 2017 | 20,000 | The joint liability guaranty | 1 year | No | No |
| Wuhan Commercial Work Hospital | March 31, 2016 | 10,889.81 | January 18, 2017 | 10,889.81 | The joint liability guaranty | 3 years | No | No |
| Sino Great Wall Construction | March 29, 2018 | 3,500 | September 30, 2018 | 3,500 | The joint liability guaranty | 1 year | No | No |
| 报告期内审批对子公司担保额度合计（B1） | 1,000,000 | 报告期内对子公司担保实际发生额合计（B2） | 315,780 | |||||
| 报告期末已审批的对子公司担保额度合计（B3） | 1,000,000 | 报告期末对子公司实际担保余额合计（B4） | 258,779.81 | |||||
| 子公司对子公司的担保情况 | ||||||||
| 担保对象名称 | 担保额度相关公告披露日期 | 担保额度 | 实际发生日期 | 实际担保金额 | 担保类型 | 担保期 | 是否履行完毕 | 是否为关联方担保 |
| Total of Company’s guarantee（namely total of the large three aforementioned） | ||||||||
| Total of guarantee in the Period （A1+B1+C1） | 1,000,000 | Total of actual guarantee in the Period（A2+B2+C2） | 315,780 | |||||
| Total of guarantee at Period-end（A3+B3+C3） | 1,000,000 | Total of actual guarantee at period-end （A4+B4+C4） | 258,779.81 | |||||
| The proportion of the total amount of actually guarantee in the net assets of the company(A4+B4+C4) | 1,100.24% |
| Including: | |
| Amount of guarantee for shareholders, actual controller and its associated parties（D) | 0 |
| The debts guarantee amount provided for the Guaranteed parties whose assets-liability ratio exceed 70% directly or indirectly（E） | 258,779.81 |
| Amount of guarantee exceeds 50% of net capital（F） | 208,205.88 |
| Total Amount（D+E+F） | 466,985.67 |
| Explanations on possibly bearing joint and several liquidating responsibilities for undue guarantees (If any) | Nil |
| Explanations on external guarantee against regulated procedures (If any) | Nil |
Description of the guarantee with complex method
（2）Illegal providing of external guarantees
□ Applicable √ Not applicableNo illegal providing of external guarantees in the report period.
3. Situation of Entrusting Others for Managing Spot Asset(1) Situation of Entrusted Finance
□ Applicable √ Not applicableNil
(2) Situation of Entrusted Loans
□ Applicable √ Not applicableNil
4. Other significant contract
Applicable √ Not applicableNon existence
XVIII. Social responsibility
1. Execution of social responsibility
In the report period, the Company took the initiative to fulfill the social responsibility. The Company highlighted work safety,
the safety management work of international projects and personnel in particular and kept improving its engineering constructionsafety mechanism to implement occupational health guarantee and other measures with effort, put an end to major safety accidents,and assure personal safety and health of staff; the Company kept improving its compensation and benefit system and modifying allthe labor and employment systems to create a harmonious employment relationship and provide broad development room foremployees with effort while giving a help to sick and needy employees to promote the harmonious development between employeesand society; the Company took the initiative to build a healthy and positive enterprise culture and highlighted improving the staffquality by organizing training activities in a variety of forms on demand and frequently holding badminton, table tennis, andbasketball games and staff sports meetings to enrich the spare life of employees; besides, the Company paid all the taxes and dues infull amount and carefully performed the social responsibility by law.
2. Precise poverty alleviation social responsibility(1) Targeted poverty alleviation program
There is no precise poverty alleviation carried out in the period and no follow plan either.
(2) Annual precision poverty alleviation(3) Accuracy of poverty alleviation
| Index | Measurement unit | Quantity / Status |
| I. General situation | —— | —— |
| II. Breakdown Input | —— | —— |
| 1. Poverty alleviation by industrial development | —— | —— |
| 2. Poverty alleviation by transfer employment | —— | —— |
| 3. Poverty alleviation by relocation | —— | —— |
| 4. Educational poverty alleviation | —— | —— |
| 5. Health poverty alleviation | —— | —— |
| 6. Ecological protection poverty alleviation | —— | —— |
| 7. Guarantee of all the details | —— | —— |
| 8. Social poverty alleviation | —— | —— |
| 9. Other projects | —— | —— |
| III. Awards (Content and level) | —— | —— |
（4）Subsequent targeted poverty alleviation program3. Information on environmental protection
The Listed Company and its subsidiary whether belong to the key sewage units released from environmental protection department
NoThe Company and its subsidiaries do not belong to the key pollutant discharge units announced by the environmental protectiondepartment.
XIX. Other material events
√ Applicable □ Not applicable1. At the tenth meeting of the seventh Board of Directors and 2016 second extraordinary general meeting of shareholders held on July7, 2016 and July 25, 2016 respectively, the Company deliberated and adopted a Proposal on Private Placement of A-share Stocks ofSino Great Wall Co., Ltd. and planned to issue stocks to Sino Great Wall (Beijing) Investment Co., Ltd., Beijing Anben MedicalInvestment Holding Co., Ltd. and Mr. Zheng Jihua to raise funds of RMB 2.5 billion. On October 14, 2016, China SecuritiesRegulatory Commission accepted the Company's application for private placement of stocks. On February 16, 2017, the Companyconvened the sixteenth meeting of the seventh Board of Directors and the eleventh meeting of the seventh Board of Supervisors,deliberating and adopting the Proposal on Adjustment of the Company's Plan for Private Placement of Stocks to adjust the sum offunds raised to RMB 900 million. On March 22, 2017, the Company's application for private placement of A-share stocks wasapproved by CSRC Issue Review Committee. On July 21, 2017, the Company received a Reply to Approval of Private Placement ofStocks Given to Sino Great Wall Co., Ltd. (Zheng Jian Xu Ke [2017] No.1145) from China Securities Regulatory Commission. Dueto fluctuation in the capital market environment, the Company failed to complete matters of the private placement of stocks within 6months after getting the approval for issue from China Securities Regulatory Commission (i.e., before January 4, 2018), hence thereply of China Securities Regulatory Commission to the Company on the private placement of stocks became void and ineffectivespontaneously upon expiry (refer to the Company's Announcement 2016-052, 2016-065, 2017-009, 2017-010, and 2018-004 fordetails).2. The Company convened the twenty-eighth meeting of the seventh Board of Directors and 2018 first extraordinary general meetingof shareholders on January 19, 2018 and March 13, 2018 respectively, deliberating and adopting the Proposal on the Company'sFinancing Plan by Bond Issue and Proposal on the Company's Financing Plan by Issue of Accounts Receivable Bonds and approvingthe Company's plan to raise funds in the amount of not over RMB 2 billion by listed bonds at Beijing Financial Assets Exchange(refer to the Company's Announcement 2018-006, 007, 050 for details). The Company suspended implementing its financing plan,affected by market environment and its own current situation.3. In December 2016, the Company received a letter of acceptance from its wholly-owned subsidiary Sino International that made upa consortium with Wuchang Shipbuilding Industry Group Co., Ltd. to win the bid for "Phnom Penh Twin Tower World Trade Center(Cambodia) Construction Project" (hereinafter referred to as the Twin Tower Project) with a sum of about USD 2.7 billion or RMB17.128 billion (refer to the Company's Announcement 2016-108 for details). After receiving the letter of acceptance, the Companytook the initiative to help the owner handle financing-related work to promote further performance of the Twin Tower Project.However, financing matters concerned in the project were not put into practice, affected by lots of objective factors. Based on acomprehensive evaluation on risks for implementation and financing risks in the international project and such risk factors as whetherthe economic benefit can be as expected upon the completion of the project, the Company considered the project to have manyuncontrollable risks. To further prevent business risks and safeguard shareholders' rights and interests, the Company decided to waivethe project (refer to the Company's Announcement 2018-014).4. On January 26, 2018, Guizhou Bijie Public Resources Trading Center released an Announcement of Results of (Secondary)Construction of PPP Project of Jinsha County Hospital, according to which, Sino Great Wall Co., Ltd. (hereinafter referred to as theCompany) won the bid for the "(Secondary) Construction of PPP Project of Jinsha County Hospital" beforehand in the investmentsum of about RMB 1,438,314,400 (refer to the Company's Announcement 2018-015). Due to a high uncertainty and risk in the returnon investment on the project, the Company terminated the project.5. On February 12, 2018, the Company convened the twenty-ninth meeting of the seventh Board of Directors, deliberating and
adopting a Proposal on Acquisition of Shares of UPL Laos Co., Ltd., according to which, UPL (MALAYSIA) SDN. BHD.(hereinafter referred to as UPL Malaysia) transfered 30% of shares of UPL Laos Co., Ltd. (hereinafter referred to as UPL Laos) to theCompany by signing an Agreement of Equity Cooperation on Laos Vientiane Dongphosy Special Economic Zone Project, UPL Laosentered into a franchise agreement for 50+40 years with Laos Government by cash contribution of USD 10 million and advancepayment of USD 20 million for project construction put together as the consideration of acquisition and took full charge of matters ofdevelopment of Dongphosy as the franchisee to Dongphosy Special Economic Zone (refer to the Company's Announcement2018-020 and 021). On June 12, 2018, the Company agreed with UPL Malaysia on transfer of 10% of shares, hence the Company'sshareholding ratio rose to 40%. Whereas the Company is experiencing a financial difficulty at the moment and has failed to performduties of advance payment and construction in the equity agreement and duties in the loan agreement, the Malaysian shareholderUPL Malaysia sent a latter in request for a return of equity and filed an arbitration to Hong Kong International Arbitration Centre onthe dispute of equity in March 2019. Right now, the Company has hired an arbitrator duly in response to the suit.6. On February 23, 2018, the Company received the “Mekong River Villa Project Bid-Winning Notice” issued byOXLEYEMERALD (CAMBODIA) CO., LTD, and Sino International won the bid for the “Mekong River Villa Project” inCambodia, with the bid amount of USD 46.5 million (equivalent to RMB 295 million) (See the 2018-035 announcement of theCompany for details). As of the end of the reporting period, most of the on-site piling construction work has been completed, and therelevant civil work has been in progress. As of the disclosure date of this report, both parties have agreed to terminate the contractand the project is in the process of settlement.7. In the report period, the Company's wholly-owned subsidiary Sino International invested RMB 100 million in founding awholly-owned subsidiary--Sino Great Wall Hebei Xiong'an Engineering Co., Ltd. at Xiong'an New Area, which obtained a BusinessLicense issued by Hebei Xiong'an New Area Public Service Bureau on February 24, 2018 (refer to the Company's Announcement2018-031).8. The Company convened the thirty-first meeting of the seventh Board of Directors and 2018 second extraordinary general meetingof shareholders on March 24, 2018 and March 29, 2018 respectively, deliberating and adopting a Proposal on the Company'sEligibility for Public Offering of A-share Convertible Bonds and Proposal on the Company's Plan for Issue of Short-term FinancingBonds among other proposals concerned, according to which, the Company was approved to do public offering of A-shareconvertible bonds in a period of 6 years to raise funds in the amount of not higher than RMB 850 million; the Company wasapproved to apply for subscribing and issuing short-term financing bonds in the sum of not over RMB 600 million to NationalAssociation of Financial Market Institutional Investors, wherein the period of single issue of short-term financing bonds must not beover 1 year (refer to the Company's Announcement 2018-044, 046, 047, and 050). The Company suspended implementing thepreceding financing plan, affected by market environment and its own current situation.9. The Company convened the thirty-fourth meeting of the seventh Board of Directors and 2018 third extraordinary general meetingof shareholders on June 4, 2018 and June 22, 2018 respectively, deliberating and adopting a Proposal on the Wholly-ownedSubsidiary Issuing USD Bonds Overseas. The Company was planned to issue bonds overseas in the amount of not higher than USD300 million (including USD 300 million) and period of not longer than 5 years, wherein its new wholly-owned subsidiary Sino GreatWall Overseas Limited (subject to actual registered name, 100% of its shares attributable to Sino Hong Kong) played a major role(refer to the Company's Announcement 2018-073, 074, and 055). The Company suspended implementing the preceding financingplan, affected by market environment and its own current situation.10. The Company convened the thirty-seventh meeting of the seventh Board of Directors on September 2, 2018, planned to investand found "Yinglonghu Development Co., Ltd." (hereinafter referred to as the Project Company, whose final name is subject to thename approved in industrial and commercial registration) with Chongqing Circum-Yinglonghu Industrial Co., Ltd. (hereinafterreferred to as Party A) and 7 village committees concerned at the project location (hereinafter referred to as Party C). The registeredcapital of the Project Company was RMB 125 million, wherein Party A subscribed capital by earlier input of physical assets worthRMB 23.75 million (subject to the audited amount) in the Yinglong Project, accounting for 19% of the registered capital; Sino GreatWall contributed RMB 100 million by currency, accounting for 80% of the registered capital; Party C subscribed RMB 1.25 million
by currency or contribution in kind, accounting for 1% of the registered capital (refer to the Company's Announcement 2018-104 and105). At the moment, the Project Company has been registered and project planning and design are underway.11. The company held the sixth meeting of the eighth Board of Directors on April 12, 2019, deliberated and passed the Proposal onAdjusting the Company's Organizational Structure and agreed to adjust the operating organization and business structure of thecompany's headquarters. The company will implement a division system by sections and set up four operating organizations,including the domestic traditional construction business sector (division), infrastructure business sector (division), overseas businesssector (division), smart housing and medical care business sector (division). After this adjustment, the organizational structure of thecompany's headquarters is as follows: eight functional departments and offices, including the comprehensive office, the financedepartment and the human resources department, as well as the above-mentioned four operating institutions (see the company'sannouncement No 2019-028 for details).
XX. Significant event of subsidiary of the Company
√ Applicable □ Not applicableIn January 2018, the Company's wholly-owned subsidiary Sino Great Wall Intelligent Real Estate (Zhanjiang) Co., Ltd. obtained aReply to Sino Great Wall on EIA Report for Residential Industrialization Base Construction Project, which was expected to speed upconstruction of the Company's fabricated intelligent property R&D center and production base project, facilitate the Company to getinvolved in the fabricated intelligent property construction area, add a new profit growth point to the Company and show a positiveimpact on its future operation and development. For more details, please refer to Announcement of Voluntary Information Disclosureon the Company Getting an EIA Reply to Fabricated Intelligent Property R&D Center and Production Base Construction Projectdisclosed by the Company on January 4, 2018 (refer to the Company's Announcement 2018-003).Due to the shortage of project fundsand the mortgage of production base land to China Bohai Bank, the project is currently at a standstill.
VI. Change of share capital and shareholding of Principal
Shareholders
Ⅰ.Changes in share capital
1. Changes in share capital
Unit: Share
| Before the change | Increase/decrease（+，-） | After the Change | |||||||
| Amount | Proportion | Share allotment | Bonus shares | Capitalization of common reserve fund | Other | Subtotal | Quantity | Proportion | |
| 1.Shares with conditional subscription | 681,305,436 | 40.12% | -242,448,369 | -242,448,369 | 438,857,067 | 25.84% | |||
| 3.Other domestic shares | 681,305,436 | 40.12% | -242,448,369 | -242,448,369 | 438,857,067 | 25.84% | |||
| Including ：Domestic Legal person shares | 42,479,672 | 2.50% | -42,479,672 | -42,479,672 | 0 | 0.00% | |||
| Domestic natural person shares | 638,825,764 | 37.62% | -199,968,697 | -199,968,697 | 438,857,067 | 25.84% | |||
| II. Shares with unconditional subscription | 1,016,939,575 | 59.88% | 242,448,369 | 242,448,369 | 1,259,387,944 | 74.16% | |||
| 1.Common shares in RMB | 753,136,344 | 44.34% | 242,448,369 | 242,448,369 | 995,584,713 | 58.62% | |||
| 2.Foreign shares in domestic market | 263,803,231 | 15.54% | 263,803,231 | 15.53% | |||||
| III. Total of capital shares | 1,698,245,011 | 100.00% | 0 | 0 | 1,698,245,011 | 100.00% | |||
Reasons for share changed□ Applicable √ Not applicableApproval of Change of Shares□ Applicable √ Not applicable
Ownership transfer of share changes□ Applicable √ Not applicableInfluence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to commonshareholders of Company in latest year and period□ Applicable √ Not applicableOther information necessary to disclose for the company or need to disclose under requirement from security regulators□ Applicable √ Not applicable
2. Change of shares with limited sales condition
√ Applicable □Not applicable
Unit: Share
| Shareholder Name | Initial Restricted Shares | Number of Unrestricted Shares This Term | Number of Increased Restricted Shares This Term | Restricted Shares in the End of the Term | Reason for Restricted Shares | Date of Restriction Removal |
| Chen Lue | 525,344,262 | 525,344,262 | 0 | 0 | The major asset restructuring and the issue of shares to purchase assets and raise matching funds | October 24,2018 |
| Chen Lue | 55,995,934 | 0 | 0 | 55,995,934 | The major asset restructuring and the issue of shares to purchase assets and raise matching funds | -- |
| Chen Lue | 382,500 | 0 | 381,212,483 | 381,594,983 | Executive locking stock | Not applicable |
| He Feiyan | 54,800,458 | 54,800,458 | 0 | 0 | The major asset restructuring and the issue of shares to purchase assets and raise | October 24,2018 |
| matching funds | ||||||
| He Sen | 1,637,435 | 1,637,435 | 0 | 0 | The major asset restructuring and the issue of shares to purchase assets and raise matching funds | October 24,2018 |
| Jiutai Fund－Bank of Communications－Jiutai Huitong No.2 specific customer asset management plan | 42,479,672 | 42,479,672 | 0 | 0 | The major asset restructuring and the issue of shares to purchase assets and raise matching funds | December 3, 2018 |
| Li Erlong | 619,050 | 0 | 0 | 619,050 | Executive locking stock | Not applicable |
| Yang Chunling | 46,125 | 0 | 0 | 46,125 | Executive locking stock | Not applicable |
| Liang Rong | 0 | 0 | 600,975 | 600,975 | Executive locking stock | Not applicable |
| Total | 681,305,436 | 624,261,827 | 381,813,458 | 438,857,067 | -- | -- |
II. Issuing and listing
1. Explanation of the Situation of the Security Issue (No Preferred Shares) in the Report Period
□ Applicable √ Not applicable
2. Change of asset and liability structure caused by change of total capital shares and structure
□ Applicable √ Not applicable
3. About the existing employees’ shares
□Applicable√Not applicable
III. Shareholders and actual controlling shareholder
1. Number of shareholders and shareholding
Unit: Share
| Total number of common shareholders at the end of the reporting period | 77,544 | Total shareholders at the end of the month from the date of disclosing the annual report | 78,961 | The total number of preferred shareholders voting rights restored at period-end (if any) (See Notes 8) | 0 | Total preferred shareholders at the end of the month from the date of disclosing the annual report (if any) (See Notes 8) | 0 | |||||||
| Particulars about shares held above 5% by shareholders or top ten shareholders | ||||||||||||||
| Shareholders | Nature of shareholder | Proportion of shares held（%） | Number of shares held at period -end | Changes in reporting period | Amount of restricted shares held | Amount of un-restricted shares held | ||||||||
| Number of share pledged/frozen | ||||||||||||||
| Chen Lue | Domestic Natural person | 34.36% | 583,454,556 | 0 | 437,590,917 | 145,863,639 | Pledge | 583,454,462 | ||||||
| Freeze | 583,454,556 | |||||||||||||
| STYLE-SUCCESS LIMITED | Foreign legal person | 5.47% | 92,970,910 | 0 | 0 | 92,970,910 | ||||||||
| Union Holdings Co., Ltd. | Domestic Non- State-owned legal person | 5.18% | 87,935,921 | 0 | 0 | 87,935,921 | ||||||||
| He Feiyan | Domestic Natural person | 3.23% | 54,800,458 | 0 | 0 | 54,800,458 | Freeze | 54,800,458 | ||||||
| Jiutai Fund－Bank of Communications－Jiutai Huitong No.2 specific customer asset management plan | Other | 2.40% | 40,696,772 | 1,782,900 | 0 | 40,696,772 | ||||||||
| Rich Crown Investment Co., | Foreign legal person | 1.37% | 23,235,313 | 0 | 0 | 23,235,313 | ||||||||
| Ltd. | ||||||||
| Qinghai Heyi Industry Development Co., Ltd. | Domestic Non- State-owned legal person | 0.79% | 13,357,084 | 0 | 0 | 13,357,084 | Pledge | 13,357,084 |
| Huang Huaian | Domestic Natural person | 0.72% | 12,300,000 | 3793000 | 0 | 12,300,000 | ||
| Zhang Xubao | Domestic Natural person | 0.34% | 5,852,820 | -2013380 | 0 | 5,852,820 | ||
| Chen Lihong | Domestic Natural person | 0.28% | 4,775,760 | 92300 | 0 | 4,775,760 | ||
| Strategy investors or general legal person becomes top 10 shareholders due to rights issued (if applicable)See Notes 3） | Not applicable | |||||||
| Explanation on associated relationship among the aforesaid shareholders | The largest shareholder of Mr. Chen Lue and the Fourth largest shareholder of Ms. He Feiyan aforesaid are persons acting in concerted; The controlling shareholder of the above-mentioned third shareholder Shenzhen Union Holdings Co.,Ltd. And Sixth shareholder Rich Crown Investment Co., Ltd.. Is Union Development Group Ltd.; It is unknown whether there is relationship between other shareholders and whether they are persons taking concerted action specified in the Regulations on Disclosure of Information about Change in Shareholding of Shareholders of Listed Companies. | |||||||
| Shareholding of top 10 shareholders of unrestricted shares | ||||||||
| Name of the shareholder | Quantity of unrestricted shares held at the end of the reporting period | Name of the shareholder | ||||||
| Chen Lue | 145,863,639 | Chen Lue | 145,863,639 | |||||
| STYLE-SUCCESS LIMITED | 92,970,910 | STYLE-SUCCESS LIMITED | 92,970,910 | |||||
| Union Holdings Co., Ltd. | 87,935,921 | Union Holdings Co., Ltd. | 87,935,921 | |||||
| He Feiyan | 54,800,458 | He Feiyan | 54,800,458 | |||||
| Jiutai Fund－Bank of Communications－Jiutai Huitong No.2 specific customer asset management plan | 40,696,772 | Jiutai Fund－Bank of Communications－Jiutai Huitong No.2 specific customer asset management | 40,696,772 | |||||
| plan | |||
| Rich Crown Investment Co., Ltd. | 23,235,313 | Rich Crown Investment Co., Ltd. | 23,235,313 |
| Qinghai Heyi Industry Development Co., Ltd. | 13,357,084 | Qinghai Heyi Industry Development Co., Ltd. | 13,357,084 |
| Huang Huaian | 12,300,000 | Huang Huaian | 12,300,000 |
| Zhang Xubao | 5,852,820 | Zhang Xubao | 5,852,820 |
| Chen Lihong | 4,775,760 | Chen Lihong | 4,775,760 |
| Explanation on associated relationship or consistent action among the top 10 shareholders of non-restricted negotiable shares and that between the top 10 shareholders of non-restricted negotiable shares and top 10 shareholders | Mr. Chen Lue and Ms. He Feiyan are the unanimous persons; Union Development Group Co., Ltd. is the controlling shareholder of the Above –mentioned shareholder Union Holdings Co., Ltd. And Rich Grown Investment Co., Ltd., It is unknown whether there is relationship between other shareholders and whether they are persons taking concerted action specified in the Regulations on Disclosure of Information about Change in Shareholding of Shareholders of Listed Companies. | ||
| Notes to the shareholders involved in financing securities (if any) (See Notes 4) | Not applicable | ||
Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreementdealing in reporting period.□ Yes √ NoThe top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy –backagreement dealing in reporting period.
2. Controlling shareholder
Nature of Controlling Shareholders: Natural Person HoldingType of Controlling Shareholders: Natural Person
| Name | Nationality | Whether to obtain the right of abode in other countries or regions |
| Chen Lue | China | No |
| Main occupations and duties | Board Chairman of the Company | |
| Situation of domestic and abroad holding listed companies in the reporting period. | Nil | |
Change of the actual controller in the reporting period□ Applicable √ Not applicableNil
3．Information about the controlling shareholder of the Company
Actual controller nature：Domestic natural personActual controller type：Natural person
| Name of actual controllers | Relationship with the actual controller | Nationality | Whether to obtain the right of abode in other countries or regions |
| Chen Lue | Self | China | No |
| He Feiyan | Acting in concert (including agreed, relative and same control) | China | No |
| He Sen | Acting in concert (including agreed, relative and same control) | China | No |
| Main occupations and duties | Chen Lue: Chairman. He Feiyan: assuming no duty in the Company. He Sen: Vice General Manager of Sino Great Wall International Engineering Co., Ltd. | ||
| Situation of domestic and abroad holding listed companies in the past 10 years | The Company's actual controller and persons acting in concert did not hold other listed companies, save the Company, in the past decade. | ||
Changes of the actual controller in the reporting period□Applicable √Not applicableNo Changes of the actual controller in the reporting period
Block Diagram of the ownership and control relations between the company and the actual controller
The actual controller controls the company by means of trust or managing the assets in other way
□Applicable √Not applicable
4. Particulars about other legal person shareholders with over 10% share held□Applicable √Not applicable5. Situation of Share Limitation Reduction of Controlling Shareholders, Actual Controllers, RestructuringParty and Other Commitment Subjects□Applicable √Not applicable
VII. Situation of the Preferred Shares
□ Applicable √ Not ApplicableThe Company had no preferred shares in the reporting period
VIII. Information about Directors, Supervisors and Senior Executives
I. Change in shares held by directors, supervisors and senior executives
| Name | Positions | Office status | Sex | Age | Starting date of tenure | Expiry date of tenure | Shares held at the year-begin(share) | Amount of shares increased at the reporting period(share) | Amount of shares decreased at the reporting period(share) | Other changes increase/decrease | Shares held at the year-end(share) |
| Chen Lue | Board chairman | In office | Male | 48 | 2015年10月29日 | 2021年11月14日 | 583,454,556 | 0 | 0 | 0 | 583,454,556 |
| Li Erlong | Vice Board chairman, General Manager | In office | Male | 43 | 2015年10月29日 | 2021年11月14日 | 825,400 | 0 | 0 | -206,3501 | 619,050 |
| Liang Rong | Vice Board chairman, Deputy General Manager | In office | Male | 49 | 2015年10月29日 | 2021年11月14日 | 0 | 801,300 | 0 | -200,3252 | 600,975 |
| He Yanjun | Director | In office | Female | 40 | 2018年11月15日 | 2021年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Peng Lizhi | Director, Executive deputy general manager | In office | Male | 50 | 2018年11月15日 | 2021年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Liang Yong | Director | In office | Male | 58 | 2018年11月15日 | 2021年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Niu Hongjun | Independent director | In office | Male | 46 | 2018年11月15日 | 2021年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Jiang Chongguang | Independent director | In office | Male | 43 | 2015年10月29日 | 2021年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Yu Haichun | Independent director | In office | Male | 55 | 2018年11月15日 | 2021年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Wu Xiaoming | Chairman of the supervisory committee | In office | Male | 38 | 2018年11月15日 | 2021年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Pang Aisheng | Supervisor | In office | Male | 38 | 2018年11月15日 | 2021年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Qin Yuanxin | Employee supervisor | In office | Male | 54 | 2018年11月15日 | 2021年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Yang Chunling | Deputy General Manager, CFO, Secretary to the board of directors | In office | Female | 47 | 2015年10月29日 | 2021年11月14日 | 61,500 | 0 | 0 | 0 | 61,500 |
| Cui Hongli | Deputy General Manager | In office | Female | 46 | 2017年07月06日 | 2021年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Fang Xiangzhong | Deputy General Manager | In office | Male | 48 | 2018年11月15日 | 2021年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Zhang Jian | Deputy General Manager | In office | Male | 60 | 2018年11月15日 | 2021年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Bai Bin | Director | Dimission | Male | 33 | 2015年10月29日 | 2018年01月18日 | 0 | 0 | 0 | 0 | 0 |
| Tian Wei | Director | Dimission | Male | 60 | 2018年03月28日 | 2018年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Hu Yongfeng | Director | Dimission | Male | 56 | 2000年05月12日 | 2018年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Wang Lei | Director | Dimission | Male | 55 | 2015年10月29日 | 2018年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Tang Jianxin | Independent Director | Dimission | Male | 53 | 2015年10月29日 | 2018年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Zhang Yufeng | Independent Director | Dimission | Male | 55 | 2015年10月29日 | 2018年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Dong Binggen | Chairman of the supervisory committee | Dimission | Male | 69 | 2002年06月26日 | 2018年06月21日 | 0 | 0 | 0 | 0 | 0 |
| Fang Xianzhong | Chairman of the supervisory committee | Dimission | Male | 48 | 2018年06月21日 | 2018年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Huang Shengde | Supervisor | Dimission | Male | 47 | 2015年10月29日 | 2018年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Wu Xiaoming | Employee Supervisor | Dimission | Male | 38 | 2015年10月29日 | 2018年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Tian Wei | General Manager | Dimission | Male | 60 | 2017年07月06日 | 2018年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Wang Shaojun | Deputy General Manager | Dimission | Male | 62 | 2017年07月06日 | 2018年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Tang Xianyong | CFO, Deputy General Manager | Dimission | Male | 45 | 2017年07月06日 | 2018年11月14日 | 0 | 0 | 0 | 0 | 0 |
| Total | -- | -- | -- | -- | -- | -- | 584,341,4 | 801,300 | 0 | -406,675 | 584,736,0 |
| 56 | 81 |
注：1 系被广东省深圳市福田区人民法院强制卖出，详见2019年1月5日披露于巨潮资讯网上的《关于董事及高管所持公司股份被强制执行的公告》（公告编号：2019-001）2 系被法院强制卖出
II. Change in shares held by directors, supervisors and senior executives
√ Applicable □Not applicable
| Name | Positions | Types | Date | Reason |
| He Yanjun | Director | Engaged | November 15,2018 | Elected as a non-independent director in the fourth extraordinary shareholders’ general meeting of 2018 |
| Peng Lizhi | Director, Executive Deputy General Manager | Engaged | November 15,2018 | Elected as a non-independent director in the fourth extraordinary shareholders’ general meeting of 2018, Appointed as the Executive Deputy general manager of the company by the 1st meeting of the Eighth Board of Directors |
| Liang Yong | Director | Engaged | November 15,2018 | Elected as a non-independent director in the fourth extraordinary shareholders’ general meeting of 2018 |
| Niu Hongjun | Independent director | Engaged | November 15,2018 | Elected as independent director in the fourth extraordinary shareholders’ general meeting of 2018 |
| Yu Haichun | Independent director | Engaged | November 15,2018 | Elected as a non-independent director in the fourth extraordinary shareholders’ general meeting of 2018 |
| Wu Xiaoming | Chairman of the supervisory committee | Engaged | November 15,2018 | Elected as supervisor in the fourth extraordinary shareholders’ general meeting of 2018;Elected as Chairman of the supervisory committee of the Company by the 1st meeting of the Eighth Board of supervisors |
| Pang Aisheng | Supervisor | Engaged | November 15,2018 | Elected as Supervisor in the fourth extraordinary shareholders’ general meeting of 2018 |
| Qin Yuanxin | Employee supervisor | Engaged | October 29,2018 | Elected as employee supervisor by the employee representative assembly of the company on October 29, 2018 |
| Li Erlong | General Manager | Engaged | November 15,2018 | Appointed general manager of the company at the first meeting of the eighth board of directors |
| Fang Xianzhong | Deputy General Manager | Engaged | November 15,2018 | Appointed Deputy general manager of the company at the first meeting of the eighth board of directors |
| Zhang Jian | Deputy General | Engaged | November 15,2018 | Appointed Deputy general manager of the company at the first meeting of the eighth board of directors |
| Manager | ||||
| Yang Chunling | Deputy General Manager, CFO | Engaged | November 15,2018 | Appointed Deputy general manager and CFO of the company at the first meeting of the eighth board of directors |
| Hu Yongfeng | Director | Leave the office while office term ends | November 14,2018 | No longer assuming the duty of non-independent director in the Company upon expiry of term |
| Tian Wei | Director | Leave the office while office term ends | November 14,2018 | No longer assuming the duty of non-independent director in the Company upon expiry of term |
| Wang Lei | Director | Leave the office while office term ends | November 14,2018 | No longer assuming the duty of non-independent director in the Company upon expiry of term |
| Tang Jianxin | Independent director | Leave the office while office term ends | November 14,2018 | No longer assuming the duty of independent director in the Company upon expiry of term |
| Zhang Yufeng | Independent director | Leave the office while office term ends | November 14,2018 | No longer assuming the duty of independent director in the Company upon expiry of term |
| Bai Bin | Director | Leave the office while office term ends | January 18,2018 | Resigned due to personal reasons |
| Dong Binggen | Chairman of the supervisory committee | Leave the office while office term ends | June 21,2018 | Resigned due to personal reasons |
| Fang Xianzhong | Chairman of the supervisory committee | Leave the office while office term ends | November 14,2018 | No longer assuming the duty of Chairman of the supervisory committee in the Company upon expiry of term |
| Huang Desheng | Supervisor | Leave the office while office term ends | November 14,2018 | No longer assuming the duty of Supervisor in the Company upon expiry of term |
| Wu Xiaoming | Employee | Leave the | November | No longer assuming the duty of Employee supervisor in |
| supervisor | office while office term ends | 14,2018 | the Company upon expiry of term | |
| Tang Xianyong | CFO | Leave the office while office term ends | November 14,2018 | No longer assuming the duty of CFO in the Company upon expiry of term |
| Tian Wei | General Manager | Leave the office while office term ends | November 14,2018 | No longer assuming the duty of General Manager in the Company upon expiry of term |
| Wang Shaojun | Deputy General Manager | Leave the office while office term ends | November 14,2018 | No longer assuming the duty of Deputy General Manager in the Company upon expiry of term |
III. Posts holding
Main working experience of current directors, supervisors and senior management staff
(1) Director
Chen Lue, male, Chinese nationality, no overseas permanent residence, born in April 1970, currently the doctoral students ofaccounting specialty in Wuhan University, Senior Management MBA of Guanghua School of Management of Beijing University,Senior Management MBA of School of Economics and Management of Tsinghua University, Bachelor in major of Food Science andNutritional Engineering of China Agricultural University, senior engineer. Since October 2001, he has been the director of Sino Greatwall International Engineering Co., Ltd., since April 2014, he has been the executive director of Sino Great Wall Investment (Beijing)Co., Ltd; since October 2015, he has been the chairman of China Industry Investment Co., Ltd. From October 2015 to July 2017, hehas been the chairman and General Manger of the Company, Sine July 2017, He has been the Chairman of the Company.Li Erlong, Chinese nationality, no overseas permanent residence, male, was born in September 1975, graduated from the ShandongBuilding Materials Engineering College, MBA of Tsinghua University. He had served as the assistant to director of the NationalBuilding Materials Quality Supervision and Inspection Center, the researcher for the China-Africa R&D Center of Artificial Crystal.Since March 2005, he has been served as the general manager of Sino Great Wall International Engineering Co., Ltd; sinceNovember 2007, he has been the manager of Beijing Sino Great Wall Decoration Design Co., Ltd.; since June 2014, he has been thedirector of Sino Great Wall Internatioanal Engineering Co., Ltd., Since September 2015, he has been the director of China IndustryInvestment Co., Ltd., since July 2016, he has been the chairman of Sino Great Wall Internatioanal Engineering Co., Ltd., SinceAugust 2016, he has been the executive director of Sino Great Wall Southwest Construction Engineering Co., Ltd., Since November2016, he has been the chairman of Sino Great Wall Jianye Engineering Co., Ltd., since December 2016, he has been the GeneralManger of Sino Great Wall Development (Hengqin) Co., Ltd., From October 2015 to June 2017, he has been the Director and GenralManger of the Company, Since September 2017, he has been the executive director and General Manger of Sino Great WallSouthwest Engineering Consulting Co . , Ltd . Sino Great Wall Southwest Commercial Trade Co., Ltd. And Sino Great WallSouthwest Technology Co., Ltd., since February 2018, he has been the executive director of Sino Great Wall Hebei XionganEngineering Co., Ltd.,From July 2017 to November 2018, he has been the Vice Chairman and Deputy General Manger of theCompany. Since November 2018, he has been the Vice Chairman and General Manger of the Company.Liang Rong, Male Chinese nationality, no overseas permanent residence, was born in December 1969，graduated from civil
engineering major of Shantou University and MBA of Senior Management of Nankai University, is a senior engineer. He had severedas Assistant Engineer of Zhuhai Xinzhou Real Estate Co., Ltd, Quantity Surveyor of Japan Shimizu Construction Co., Ltd, andProject Manager of Shenzhen Great Wall Furniture Decoration Engineering Co., Ltd. From April 2003 to June 2016, he has been theExecutive General Manger of Sino Great Wall Construction Engineering Co., Ltd., since June 2014, he has been the Director SinoGreat Wall Construction Engineering Co., Ltd., since Novemer 2014, he has been the Diretor of Sino Great Wall InternationalEngineering(Macao) Co., Ltd., From October 2015 to June 2017, he has been the director and Deputy General Manger of theCompany, since August 2017, he has been the Chairman of Sino Great Wall Group Co., Ltd., Since September 2017, he has been theChairman of Kunming Sino Shengong Forestry Development Co., Ltd.,since October 2017, he has been the General Manager of SinoGreat Wall Guangxia (Wuhan )Medical Development Co., Ltd., since Decemer 2017, he has been the Chairman of Sino Great WallHealth Management (Jiangsu) Co., Ltd., and Director of Weifang Sino Great wall Health Development Co., Ltd., since March 2018,he has been the Chairman of Renhui Sino Great wall Wine Culture Development Co., Ltd., Since July 2017, he has been the ViceChairman and Deputy General Manger of the Company.Since August 2017, he has been the Chairman of Sino Great Wall Group Co.,Ltd. has assumed Kunming Sino Sengong Forestry Development Co., Ltd., a director of Sino Great Wall (Hong Kong) Real EstateCo., Ltd., Chairman and a director of Alor Vista Development Sdn Bhd (Penang Bukit Mertajam Project Company) since September2017, assumed the General Manager of Sino Great Wall Guangxia (Wuhan) Medical Development Co., Ltd. since October 2017,assumed a director of SGW Ventures Sdn Bhd (Malaysia Management Company) since November 2017, assumed Chairman of SinoGreat Wall Health Management (Jiangsu) Co., Ltd. and a director of Weifang Sino Great Wall Health Development Co., Ltd. sinceDecember 2017, assumed a director of Cenang Resort Sdn Bhd (Cenang Company) and Chairman of Sino Great Wall TechnologyDevelopment Co., Ltd. since January 2018, assumed the Chairman of Renhuai Sino Great Wall Wine Culture Expo ParkDevelopment Co., Ltd. since March 2018, assumed a director of Aofa Investment Co., Ltd. and Weifang Sino Great Wall Health CareIndustry Co., Ltd. since August 2018, and assumed a director of Weifang Binhai Sino Bincheng Hospital Co., Ltd. since September2018.
He Yanjun , Female, a Hong Kong resident, born in May 1978, graduated from Southwest University of Political Science & Law,majoring in law. She worked as a court clerk at Shenzhen Intermediate People's Court from July 2003 to August 2009; she assumedthe Legal Secretary and Manager Assistant of Office of the President, UDC Group Co., Ltd. from August 2009 to February 2011; shehas assumed the Legal Manager of UDC Holding Co., Ltd. since April 2015. Since November 2018, she has assumed a director ofthe Company.Peng Lizhi,Male , Chinese nationality, no overseas permanent residence, born in September 1968,He is an MBA master, nationalhighway engineering constructor, and professor-level senior engineer. From 1990 to 2002, he worked at Second Engineering Division,Second Highway Engineering Bureau, Ministry of Transportation; from 2003 to 2006, he assumed the Chief Engineer of Road &Bridge South China Engineering Co., Ltd.; from 2006 to May 2016, he assumed Chairman and General Manager of Road & BridgeNorth China Engineering Co., Ltd.; since June 2016, he has assumed Chairman and General Manager of Sino Great WallInfrastructure Investment Co., Ltd. From December 2017 to November 2018, he assumed Vice General Manager of the Company;from November 2018, he has assumed a director and Standing Vice Manager of the Company.
Liang Yong, Male , Chinese nationality, no overseas permanent residence, born in April 1960,He is an engineer graduating fromAnsteel Engineering College. He used to work at Ansteel Design Research Institute, Yantai Liaohai Hi-Tech Development Co., Ltd.,Coastal Green Homeland (Anshan) Co., Ltd. and Coastal Green Homeland Central China Company among other companies. FromMay 2008 to July 2009, he assumed the General Project Manager of Tianjin Haishun Real Estate Development Co., Ltd.; from July2009 to August 2011, he assumed General Project Manager of MCC Times Real Estate Co., Ltd.; from September 2011 to April 2012,he assumed Vice President of Hubei Brandmont Investment Group Co., Ltd.; from April 2012 to August 2014, he assumed GeneralManager of Nanyang Feifan Real Estate Co., Ltd.; from August 2014 to March 2016, he assumed General Manager Assistant ofCITIC Guoan Investment (Shanghai) Company; from April 2016 to March 2019, he assumed Vice General Manager of Real Estate
Development Department of the Company; since November 2018, he has assumed a director of the Company.Niu Hongjun, Male , Chinese nationality, no overseas permanent residence, born in November 1972,He is a certified publicaccountant in both China and Australia with a bachelor's degree awarded by School of Economic & Management, ShijiazhuangTiedao University, a master's degree awarded by Chinese Academy of Fiscal Sciences, Ministry of Finance, and a doctoral degree ofmanagement awarded by Renmin Business School; since 2008, he has been a master supervisor at Business School of BeijingTechnology and Business University, working on specialized accountancy teaching and research; since 2009, he has been hired as afinancial consultant by Ministry of Commerce of the People's Republic of China; since January 2015, he has assumed an independentdirector of Jingwei Textile Machinery; from June 2016 to February 2018, he assumed an independent director of Cloud Live TechGroup; since November 2018, he has assumed an independent director of the Company.Jiang Chongguang, Male , Chinese nationality, no overseas permanent residence, He is a doctor of economics, postdoctor, researcher,part-time professor and visiting scholar to international institutions of higher education. He is the present Executive Vice Presidentand Secretary-General of China Insurance Innovation Research Institute, Executive Director of Health China Strategy ResearchCenter, Chinese Academy of Social Sciences, Deputy Director of Financial Technology Committee, Asian Financial CooperationAssociation, a consultant to Insurance Society of China and an independent director of Dezhan Big Health Co., Ltd. He is a senioreconomist of Ivy Capital. Since 2015, he has acted as an independent director of the Company.Yu Haichun ,Male, Chinese nationality, no overseas permanent residence, born in November 1962,He has a doctoral degree of civiland commercial law awarded by China University of Political Science and Law. He used to be anassistant-regimental-commander-level instructor of PLA Dalian Naval Academy, lawyer of Liaoning Fada Law Firm, lawyer andpartner of Beijing King & Capital Law Firm, secretary of the party committee and vice president of School of Insurance andEconomics at UIBE. From March 2013 to September 2018, he assumed secretary of the party committee and vice president of UIBELaw School. Since September 2018, he has assumed a professor of UIBE Law School and Director of Research Center for InsurancePolicies and Laws. Since November 2018, he has assumed an independent director of the Company.
2. SupervisorsWu Xiaoming, Male, Chinese nationality, no overseas permanent residence, born in November 1980, He has a bachelor's degree oflaw awarded by School of Law, Guangdong Business School (presently known as GuangDong University of Finance & Economics).He used to work at Haizhu Branch, Guangzhou Municipal Administration of Quality and Technology Supervision (the presentQuality and Technology Supervision Bureau of Haizhu District, Guangzhou). Since December 2008, he has assumed GeneralManager Assistant and Legal Manager of Sino Great Wall International Engineering Co., Ltd. Since June 2014, he has assumedChairman of Board of Supervisors of Sino Great Wall International Engineering Co., Ltd.; from October 2015 to November 2018, heassumed the Employee Supervisor of the Company; since November 2018, he has assumed Chairman of the Board of Supervisors ofthe Company.Pang Aisheng, Male, Chinese nationality, no overseas permanent residence, born in May 1981,He has a bachelor's degree awarded byGuangdong Vocational Normal School (presently known as Guangdong Polytechnic Normal University) and MBA degree of seniorexecutives awarded by Zhejiang University. He used to be a project manager of Sino Great Wall International Engineering Co., Ltd.;since 2015, he has assumed Vice General Manager of Sino Great Wall International Engineering Co., Ltd. and General Manager ofEast China Division herein; since November 2018, he has assumed a supervisor of the Company.Qin Yuanxin, male, Chinese nationality, no overseas permanent residence, born in November 1964, is a senior engineer, graduatingfrom Shandong Construction Engineering School with a bachelor's degree of engineering management. He used to be TechnicalDirector and Production Manager of Tongcheng Sixing Construction Installation Engineering Co., Ltd.; from March 1996 toDecember 2004, he assumed the Production Manager and Project Manager of Anhui First Construction Engineering Co., Ltd.; sinceMarch 2005, he has assumed Project Manager, Security Inspection Manager, Vice General Manager of Engineering ManagementCenter, Vice General Manager and Supervisor of Clearing Center of Sino Great Wall International Engineering Co., Ltd. Since March2005, he has assumed Standing Vice Manager of SPV Management Center of Sino Great Wall Co., Ltd. Since November 2018, he
has assumed the Employee Supervisor of the Company.3. Senior management personnelRefer to the preceding "1. Members of Board of Directors" for resumes of Mr. Li Erlong, Mr. Liang Rong and Mr. Peng Lizhi.Yang Chunling, female, Chinese nationality, no overseas permanent residence, born in February 1971, Bachelor in economics, masterin industrial engineering, accountant. She had served as employee in Sinotrans Henan Zhengzhou Logistic and Trading Company,Deputy Minister of the securities department of Aeolus Tyre Co., Ltd, vice general manager and secretary of the board of directors ofHenan Yuhua New Material Co., Ltd. Since September 2015, she has been the director of Sino Cubic Investment Co., Ltd; sinceMarch 2014, she has been the secretary of the board of directors of Sino Great Wall International Engineering Co., Ltd; FromOctober 2015 to November 2018,, she has been the secretary of the board of directors of the company.Since November 2014, she hasbeen the Deputy General Manager , CFO and secretary of the board of directors of the Company.
Cui Hongli, female, Chinese nationality, no overseas permanent residence, born in January 1972, graduated from Henan Universityof Finance and Economics, CPA. She had been served in China Luoyang Float Glass Group Co.,Ltd, Beijing Jiayou Real EstateDevelopment Group Co.,Ltd and Yuancheng Industrial Group Co.,Ltd. Since July 2011, she has been the investment and financedepartment manager, CFO of Sino Great Wall International Engineering Co., Ltd; From October 2015 to June 2017, she has been thecompany’s CFO.Since July 2017, She has been the Deputy General Manger of the Company.Fang Xianzhong male, Chinese nationality, no overseas permanent residence, born in February 1970, he has an EMBA degreeawarded by Guanghua School of Management, Peking University. He used to assume an office staff of Beijing Jingdong AutoMaintenance Group, Sales Manager of Beijing Gomatech Co., Ltd., General Manager of Business Unit of Founder Technology CO.,Ltd., and Vice General Manager of Beijing Honglian Jiuwu Information Industry Co., Ltd. among other duties. From May 2002 toDecember 2003, he assumed General Manager of Beijing Haiweixin Technology Co., Ltd.; from January 2004 to June 2010, heassumed General Manager of Beijing Haiwei Xinda Technology Co., Ltd.; since July 2010, he has assumed Vice General Manager ofSino Great Wall International Engineering Co., Ltd.; from June to November 2018, he assumed Chairman of Board of Supervisors ofthe Company; since November 2018, he has assumed Vice General Manager of the Company.Zhang Jian,male, Chinese nationality, no overseas permanent residence, born in August 1958,graduated from Central School of ChinaCommunist Youth League with a specialized associate degree. He used to assume a company commander of Headquarters ofKunming Military Command, a section chief of Qingdao Municipal People's Government, General Manager of Government OfficesAdministration Trading Company, General Manager of Qingdao Shopping Mall of Beijing Chengxiang (a listed company), GeneralManager of New City Plaza of South Group, General Manager of Qingdao Aoda Investment Development Company, Hongta Group,and COO of Yunnan, Guizhou, Sichuan and Shaanxi of Junhao Group among other duties. From January 2016 to March 2018, heassumed Vice General Manager of Sino Great Wall Medical Investment Management Company; since April 2018, he has assumedVice General Manager of Sino Great Wall Real Estate Company; since November 2018, he has assumed Vice General Manager ofSino Great Wall Co., Ltd.Office taking in shareholder companies□ Applicable √Not applicableOffices taken in other organizations√Applicable □Not applicable
| Name | Name of other units | Position | Office term start from | Office term ended | Whether receiving remuneration from other units or not |
| Chen Lue | Sino Great Wall International Engineering | Board | October | No |
| Co., Ltd. | chairman | 17,2001 | |||
| Chen Lue | Sino Great Wall Investment (Beijing) Co., Ltd. | Executive director | April 22, 2014 | No | |
| Chen Lue | China Industry Investment Co., Ltd. | Board chairman | September 14,2015 | No | |
| Chen Lue | Shenzhen Sino Dalue Investment Co.,Ltd. | Executive director | February 25,2015 | No | |
| Chen Lue | Zhongshang Sino Aerospace Technology (Beijing) Co., Ltd. | Board chairman | January 24,2017 | No | |
| Li Erlong | China Industry Investment Co., Ltd. | Director | September 14,2015 | No | |
| Niu Hongjun | Business Schooll of Beijing Technology and Business University | Master Supervisor | September 1,2008 | Yes | |
| Niu Hongjun | Ministry of Commerce of the people's republic of China | Financial advisory | January 15,2009 | Yes | |
| Niu Hongjun | Jingwei Textile Machinery Co., Ltd. | Independent Director | January 13,2015 | Yes | |
| Jiang Chongguang | Dezhan Healthcare Co., Ltd. | Independent Director | October 25,2016 | October 25,2021 | Yes |
| Jiang Chongguang | CASS Healthy China Strategic Research Center. | Executive director | May 1,2015 | May 1,2025 | Yes |
| Jiang Chongguang | IVY Capital | Senior economist | June 1,2015 | June 1,2025 | Yes |
| Jiang Chongguang | Insurance Society of China | Counselor | June 15,2016 | June 15,2021 | Yes |
| Jiang Chongguang | China Insurance Innovation Research Institute | Executive vice President and general secretary | April 25,2016 | April 25,2026 | Yes |
| Jiang Chongguang | Asian Finance Association Financial Science and Technology Committee | Associate director | February 1,2018 | March 1,2023 | No |
| Yu Haichun | School of Law,UIBE | Professor, Director of Insurance Industry Policy and Law Research Center | September 13,2018 | Yes |
| Yang Chunling | China Industry Investment Co., Ltd. | Director | September 1,2015 | No |
Punishments to the current and leaving board directors, supervisors and senior managers during the report period by securitiesregulators in the recent three years□ Applicable √Not applicable
IV. Remuneration to directors, supervisors and senior executives
Decision-making procedures, basis for determination and actual payment of the remuneration to directors , supervisors and seniorexecutivesThe Company's remuneration and appraisal committee formulates the remuneration plan, which is implemented after the approval bythe board of directors or after review and approval by the shareholders' general meeting; and it performances the evaluation ofdirectors and senior management personnel according to the performance evaluation standards and procedures; meanwhile, theCompany proposes the amount of remuneration and reward methods for directors, supervisors and senior managers according to thepost performance evaluation and salary distribution policy, which shall be approved by voting and finally be reported to the board ofdirectors for approval and implementation.The Company formulates the remuneration plans or schemes based on the main scope, responsibilities, and importance of directorsand senior management positions and the remuneration levels of other related companies, and it pays the remuneration based on thepost performance evaluation results and the salary allocation policy.Remuneration to directors, supervisors and senior executives in the reporting period
Unit: 10,000 Yuan
| Name | Positions | Sex | Age | Office status | Total remuneration received from the shareholder | Remuneration actually receives at the end of the reporting period |
| Chen Lue | Board Chairman | Male | 48 | In office | 36.6 | No |
| Li Erlong | Vice Board Chairman, General Manager | Male | 43 | In office | 52.15 | No |
| Liang Rong | Vice Board Chairman, Deputy General Manger | Male | 49 | In office | 43.2 | No |
| He Yanjun | Director | Female | 40 | In office | 0 | Yes |
| Peng Lizhi | Director, Excutive Deputy General | Male | 50 | In office | 43.46 | No |
| Manager | ||||||
| Liang Yong | Director | Male | 58 | In office | 0.33 | No |
| Niu Hongjun | Independent Director | Male | 46 | In office | 1.37 | No |
| Jiang Chongguang | Independent Director | Male | 43 | In office | 11 | No |
| Yu Haichun | Independent Director | Male | 55 | In office | 1.37 | No |
| Wu Xiaoming | Chairman of the supervisory committee | Male | 38 | In office | 1.76 | No |
| Pang Aisheng | Supervisor | Male | 38 | In office | 3.12 | No |
| Qin Yuanxin | Employees supervisor | Male | 54 | In office | 1.24 | No |
| Yang Chunling | Deputy General Manager, CFO, Secretary to the board of directors | Female | 47 | In office | 22.8 | No |
| Cui Hongli | Deputy General Manager | Female | 46 | In office | 22.8 | No |
| Fang Xianzhong | Deputy General Manager | Male | 48 | In office | 2.1 | No |
| Zhang Jian | Deputy General Manager | Male | 60 | In office | 7.31 | No |
| Hu Yongfeng | Director | Male | 56 | Dimission | 0 | Yes |
| Wang Lei | Director | Male | 55 | Dimission | 0 | No |
| Bai Bin | Director | Male | 33 | Dimission | 0 | No |
| Tian Wei | Director | Male | 60 | Dimission | 0 | No |
| Tang Jianxin | Independent Director | Male | 53 | Dimission | 9.63 | No |
| Zhang Yufeng | Independent Director | Male | 55 | Dimission | 9.63 | No |
| Dong Binggen | Chairman of the supervisory committee | Male | 69 | Dimission | 0 | Yes |
| Fang Xianzhong | Chairman of the supervisory committee | Male | 48 | Dimission | 6.3 | No |
| Huang Shengde | Supervisor | Male | 47 | Dimission | 12.68 | No |
| Wu Xiaoming | Employees supervisor | Male | 38 | Dimission | 12.34 | No |
| Tian Wei | General Manager | Male | 60 | Dimission | 77.53 | No |
| Wang Shaojun | Deputy General Manager | Male | 62 | Dimission | 52.5 | No |
| Tang Xianyong | Deputy Genral Manager, CFO | Male | 45 | Dimission | 35 | No |
| Total | -- | -- | -- | -- | 466.22 | -- |
Incentive equity to directors, supervisors or/and senior executives in the reporting period□ Applicable √Not applicable
V. Particulars about employees.
1. Number of staff, professional structure and educational background
| Number of in-service staff of the parent company(person) | 59 |
| Number of in-service staff of the main subsidiaries(person) | 762 |
| The total number of the in-service staff(person) | 821 |
| The total number of staff receiving remuneration in the current period(person) | 821 |
| Retired staff with charges paid by the parent company and main subsidiaries (person) | 17 |
| Professional | |
| Classified according by Professions | Number of persons（person） |
| Production | 251 |
| Sales | 16 |
| Technical | 331 |
| Financial | 40 |
| Administrative | 61 |
| Other | 122 |
| Total | 821 |
| Education | |
| Classified according by Professions | Number of persons（person） |
| Master’s Degree and bove | 52 |
| Bachelor | 366 |
| College diploma | 270 |
| Other | 133 |
| Total | 821 |
2. Remuneration policies
Based on the principle of “external fairness and internal fairness”, the Company combines the company’soverall strategic plan to provide competitive remuneration and benefits in the industry. Different post has differentremuneration, and the remuneration will be raised upon the excellent performance, and the staff remunerationlevel will be determined according to the job responsibilities,3.Training plan
The Company builds its talent team by combining internal and external training methods and creates atraining system where a priority is given to specialized quality while other professional qualities aid. To bespecific, the Company explores and trains excellent internal lecturers and develops a variety of trainingcoursewares suitable to its own enterprise culture. The Company hires external consultants and experts in theindustry to impart and communicate new techniques and management skills. The Company implements itstraining at three levels including project, department and company and fulfills a full coverage of its training workby an on-line school, planned to hit a high rate of fulfillment, promote comprehensive qualities of employees stepby step and supplement sustainable and applicable talents to its following sound development.4.Outsourcing situation□ Applicable √ Not Applicable
IX. Administrative structure
I. Basic state of corporate governance
The company’s governance meets the requirements of regular documents on the governance of the listed companies issued by ChinaSecurities Regulatory Commission.In the report period, the Company kept improving its standard operation and management system, optimized its managementstructure, further standardized its operation and raised its management standard by abiding by Company Law, Securities Law, StockListing Rules of the Shenzhen Stock Exchange, Code of Corporate Governance for Listed Companies and relevant laws andregulations of China Securities Regulatory Commission in combination with its own actual situation.As the end of the report period, the Company's actual management situation agreed with normative documents published by ChinaSecurities Regulatory Commission regarding governance of listed companies. Specifically showed in the following respects:
1. Shareholders and General Meeting of Shareholders: the Company can safeguard rights to be informed and participate granted toshareholders by law in all respects, convene and hold a General Meeting of Shareholders in accordance with provisions andrequirements in the Rules for General Meeting of Shareholders of Listed Companies and Rules of Procedure at General Meeting ofShareholders among others, and ensure that all the shareholders, minority shareholders in particular, were granted with the right to beinformed and capacity to exercise their rights. In the report period, the Company complied with relevant provisions in the CompanyLaw and Articles of Association and had the witness of a lawyer in convening each General Meeting of Shareholders and ensuringsufficient number of shareholders with sufficient number of shares attended each meeting. Shareholders attending each meeting canexercise their rights fully in principle of independence.2. Relationship between holding shareholders and the listed company: holding shareholders behaved and conducted no act thatdirectly or indirectly intervened in the Company's decision-making and business activities by bypassing the General Meeting ofShareholders; the Company was independent from holding shareholders regarding personnel, assets, finance, institution and businessand the Company's Board of Directors and Board of Supervisors can make independent operation. The Company was independentfrom holding shareholders regarding personnel, assets, finance, institution and business among others.3. The Directors and The Board of Directors: the Board of Directors includes four special committees, such as Audit Committee,Nomination Committee, Strategy Committee and Remuneration and Appraisal Committee, which has provided a favorable support tothe company for the decision-making related issues. Each special committee has operated according to their work responsibilities andprocedure rules, made research and examination for the relative business and major issues of the company, and expressed theprofessional opinions in the Board of Directors to offer support and advice for the scientific decision-making of the Board and ensurethe Board’s work more scientific and efficient. Also, the organization of the Board of Directors is in line with the requirement of lawsand regulations, and the independent directors play an important role in the corporate decision-making. So, the company attachesimportance to the function of the independent directors. In the company’s management, the independent directors make carefulreview and express the independent views for the financial audit, the affiliated transactions and other issues.(4)Supervisors and the supervisory committee: The number and composition of the Supervisory Committee of the Companycomplied with the requirements of laws and regulations. The Supervisory Committee of the Company formulated the Rules ofProcedure of the Supervisory Committee. The supervisors of the Company were able to perform their duties seriously, take theattitude of being responsible for all shareholders and supervise the legality and regulation conformity of the Company's finance andthe duty performance of the directors, managers and other senior executives of the Company.5. Regarding information disclosure and transparency: the Company discharged its duties of information disclosure as specified inrelevant laws and regulations as well as System for Management of Information Disclosure. The Company enhanced communication
with investors in a variety of channels to promote their understanding and recognition of the Company. The Company took suchcommunication measures as carefully handling the visit and consultation of each shareholder and duly giving a reply to questionsraised by investors at the interactive platform to ensure that all the shareholders were granted with a fair opportunity to acquireinformation and guarantee their right to be informed.6. Regarding performance assessment and incentive & constraint mechanisms: in the report period, the Company kept improving theperformance evaluation indicator and incentive & constraint mechanisms for senior executives under the instruction of theCompensation and Evaluation Committee of Board of Directors, wherein their compensation was combined with the Company'sbusiness performance and total development plan and personal working performance, an annual integrated quantitative andqualitative evaluation was organized on senior executives' fulfillment of duties and senior executives were hired in an open andtransparent way and in compliance with laws and regulations.7. Regarding stakeholders: the Company fully respected and safeguarded legitimate rights and interests of stakeholders, implementeda benefit coordination and balance among society, shareholders, the Company, employees and other parties, and enhancedcommunication and exchange of the parties to jointly promote sustainable and robust development of the Company.Does there exist any difference in compliance with the corporate governance , the PRC Company Law and the relevant provisions ofCSRC,□ Yes √ NoThere exist no difference in compliance with the corporate governance , the PRC Company Law and the relevant provisions ofCSRC.
II. Independence and Completeness in business, personnel , assets, organization and financeThe company is completely separate with the controlling shareholder in terms of the business, personnel, assets,organizations, finance and other aspects, possessing independent and complete business and independent operatingcapacity.1. Business: the Company had independent decision-making and execution agencies, built independent businessdepartments which, independent from holding shareholders, actual controllers and other companies under control,handled businesses, and conducted no related transaction of horizontal competition or significant loss of fairnesswith holding shareholders, actual controllers and other companies under control.2.Personnel：The company has a completely independent personnel management and salary system. The company’ssenior manager personnel all are work in the company and receiving remunerations, and they do not hold anyother posts except the post of director or receive remunerations in the controlling shareholder and its affiliatedenterprises. The company's financial staffs do not concurrently hold posts in the controlling shareholder and itsaffiliated enterprises.3. Assets: the Company owned independent sites for office and business operation and other assets, possessedproduction systems pertaining to production and operation, boasted equipment related to production and operationby law and had independent purchase and sales systems and supporting facilities; the Company's holdingshareholders and actual controllers did not occupy the Company's funds, assets or other resources.4. Agencies: the Company built a full and independent internal institutional framework and functional system outof its own development, where departments with specific duties defined worked together well and agencies werefully independent from each other in operation. Meanwhile, the Company set an independent decision-makingagency, office agency and site for production and operation management and the setting of agencies andproduction and operation activities were immune from the intervention of other units or individuals.5.Finance:The company has a standardized financial accounting system, with an independent financial accountingdepartment, full-time accounting personnel and independent accounting system, being able to make financial
decisions independently. The company has set up the independent bank account and independently pays the tax.The situation of the free-occupying of the company’s assets and funds by the controlling shareholder and itsaffiliated enterprises does not exist.
III. Horizontal Competitions
□Applicable√Not applicable
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the ReportingPeriod
1. Annual General Meeting
| Sessions | Type | Investor participation ratio | Meeting Date | Disclosure date | Disclosure index |
| The first provisional shareholders’ General meeting in 2018 | Provisional shareholders’ General Meeting | 51.78% | March 28,2018 | March 29,2018 | The first provisional shareholders’ General meeting in 2018 (No.2018-050) published on Juchao Website（http://www.cninfo.com.cn）on March 29,2018 |
| The Second provisional shareholders’ General meeting in 2018 | Provisional shareholders’ General Meeting | 38.84% | April 9,2018 | April 10,2018 | The Second provisional shareholders’ General meeting in 2018 (No.2018-053) published on Juchao Website（http://www.cninfo.com.cn）on April 10,2018 |
| Annual General Meeting of 2017 | Annual General Meeting | 34.50% | May 16,2018 | May 17,2018 | Annual General Meeting of 2017 (No.2018-071) published on Juchao Website（http://www.cnin |
| fo.com.cn）on May 17,2018 | |||||
| The Third provisional shareholders’ General meeting in 2018 | Provisional shareholders’ General Meeting | 34.50% | June 21,2018 | June 22,2018 | The Third provisional shareholders’ General meeting in 2018 (No.2018-081) published on Juchao Website（http://www.cninfo.com.cn）on June 22,2018 |
| The Fourth provisional shareholders’ General meeting in 2018 | Provisional shareholders’ General Meeting | 39.64% | November 15,2018 | November 16,2018 | The Fourth provisional shareholders’ General meeting in 2018 (No.2018-147) published on Juchao Website（http://www.cninfo.com.cn）on November 16,2018 |
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √Not applicable
V. Responsibility performance of independent directors in report period
1. The attending of independent directors to board meetings and shareholders’ general meeting
| The attending of independent directors | |||||||
| Independent Directors | 本报告期应参加董事会次数 | 现场出席董事会次数 | 以通讯方式参加董事会次数 | 委托出席董事会次数 | 缺席董事会次数 | 是否连续两次未亲自参加董事会会议 | 出席股东大会次数 |
| Tang Jianxin | 12 | 1 | 11 | 0 | 0 | 否 | 1 |
| Zhang Yufeng | 12 | 2 | 9 | 0 | 1 | 否 | 0 |
| Jiang | 14 | 3 | 11 | 0 | 0 | 否 | 2 |
| Chongguang | |||||||
| Niu Hongjun | 2 | 1 | 1 | 0 | 0 | 否 | 1 |
| Yu Haichun | 2 | 1 | 1 | 0 | 0 | 否 | 1 |
Notes to failure to personally attend Board Meetings Successively Twice
2.Objection of independent directors on some relevant issues
Objection of independent directors on some relevant issues□ Yes √NoNil
3. Other notes to duty performance of independent directors
Has an independent director’s advice to the Company been accepted√Yes □ NoExplanation on acceptance of or failure to accept an independent director’s advice to the Company.
In accordance with Instruction for Listed Companies on Building an Independent Director System, Guide to Listed Companieson Standardized Operation, Articles of Association, and Working System of Independent Directors among other provisions, theCompany's independent directors held an responsible attitude towards the Company and shareholders herein, faithfully performedtheir duties in due diligence, took the initiative to attend relevant meetings, carefully deliberated all the proposals, objectivelyexpressed their own opinions and viewpoints, and conducted a thorough survey on the Company with effort to understand theCompany's production and operation, personnel management, financial management, and internal control among other informationand implementation of resolutions of the Board of Directors and General Meeting of Shareholders.
In the report period, they delivered independent opinions concerning the Company's financing plans, external guarantees, hiringof an auditing agency, use of funds raised, profit distribution plans, election of the Board of Directors, alteration of promised mattersand related transactions and other matters. They carefully debriefed operation from the management and communicated with certifiedpublic accountants responsible for the annual audit while preparing, examining and disclosing regular reports. By rich specializedknowledge and industrial experience, they played a positive part in improving the Company's supervision mechanism, promoting theBoard of Directors to make scientific decisions and standardize operation, and safeguarding rights and interests of minorityshareholders by offering many reference opinions and valuable suggestions regarding the Company's development strategies,institutional improvement, financial management, and standardized operation among others.
VI. Duty Performance of Special Committees under the Board of Directors in the ReportingPeriod
The board of directors of the Company has special committees including audit committee, remuneration and appraisal committee,strategy committee and nomination committee. According to the scope of authority specified in the working rules for them, thecommittees conducted study and put forward opinions and suggestions for reference by the board of directors for decision making.1.Information about fulfillment of the audit Committee of the Board of Directors duringAudit Committee gave a full play to its supervision and auditing functions. In the report period, it deliberated such matters as theCompany's financial information, internal control, substitution of an accounting firm, and relevant reports on preservation of fundsraised and formed and submitted resolutions to the Board of Directors; while auditing annual financial reports, it meticulouslyreviewed the Company's financial audit reports and delivered audit opinions, communicated with certified public accountants for the
annual audit through a communication meeting and other forms, and urged the progress of the audit work to guarantee the success ofthe annual audit work.2. Fulfillment of Duties of the Compensation and Evaluation Committee of the Board of DirectorsCompensation and Evaluation Committee kept improving the Company's compensation policy and evaluation mechanism and tookthe initiative to promote deepening the management reform. In the report period, the Compensation and Evaluation Committeeconvened meetings, supervised and assessed standards for fulfillment of performance and assessment on directors and seniorexecutives and implementation of the standards, carried out appointment and evaluation procedures for directors and seniorexecutives and examined the annual basic pay of each senior executive.3. Fulfillment of duties of Strategy CommitteeStrategy Committee helped the Company determine development plans, improve investment decision-making procedures, makemore scientific decisions, and improve its management structure by studying and offering advice for the Company's longtermdevelopment strategies and major investment decisions. In the report period, the Strategy Committee convened a total of fivemeetings, deliberating and adopting the Company's proposals regarding foreign investment, financing planning, etc.4.Fulfillment of duties of Nomination Committee of Board of DirectorsNomination Committee devoted itself in due diligence, offering an instruction on improving the leader assessment mechanism andtalent promotion system and enhancing back-up talent reserves among others and keeping studying and following the Company'sneeds for senior executives. In the report period, the Nomination Committee convened meetings to examine qualifications of generalmanager candidates and candidates of the eighth board of senior executives.
VII. Work of the supervisory Committee
Did the supervisory Committee find any risk existing in performing the supervision activities in the reporting period?□Yes √NoThe supervisory Committee has no objection against any matters under supervision in the reporting period
VIII. Assessment and incentive Mechanism for Senior executives
The company established the evaluation system based on the targeted responsibility system and adopted signing the annualresponsibility appraisal agreement for the evaluation of the company’s senior management personnel which specified the KPI andevaluation method with methods related to the evaluation results. During the reporting period, the companies had conformed to themeasures of the targeted responsibility system to assess and evaluate the senior management personnel performances, whichpresented in the annual performance.
IX. Internal control situations
1. Specific situations on major defects of internal control discovered during report period
√Yes □ No
| Details of major defects of internal control discovered during the reporting period |
| 1. Income cost accounting is not standardized. The company’s claim for a project in Cambodia was US$ 1.13 million (equivalent to approximately RMB 7 million), which was confirmed in writing by Party A in 2018, but the company confirmed the income in 2017. According to the company's accounting policy, the 7 million yuan income is confirmed to have an intertemporal situation. 2. Insider information registration management is not standardized. The company made a memorandum of progress on major events in the planning of major asset placements in 2018, but none of the participants in the memorandum and the notified |
2. Self-evaluation report on internal control
| Disclosure date of appraisal report on internal control | April 30,2019 | |
| Disclosure index of appraisal report on internal control | Juchao Website:（http://www.cninfo.com.cn）, Selfevaluation report of internal control in 2018 on April 30,2019 | |
| Proportion of total unit assets covered by appraisal in the total assets of the consolidated financial statements of the company | 100.00% | |
| Proportion of total unit incomes covered by appraisal in the total business incomes of the consolidated financial statements of the company | 100.00% | |
| Standards of Defects Evaluation | ||
| Category | Financial Report | Non-financial Report |
| Standard | Material Defect: 1.Fraud of directors, supervisors and senior management; 2.Material errors appear in the Company’s financial report published; 3. The certified public auditor finds material wrong reporting in the current financial statement, while the Company has not found such reporting during its operation;4. The audit committee and audit department of the Company exercise invalid supervision upon internal control; 5.The result of internal control assessment hasn’t been rectified, especially the material or major defects; 6.Important business is lack of system control or the system loses its validity. Major Defects:1. No recognized accounting standards were followed when choosing and applying the accounting policies; 2.No anti-fraud program and control measures were established; 3.No corresponding control mechanism was established or implemented for treating the | Material Defect: 1.Violation of national laws or regulations, normative documents and significant decision making lacking scientific and system may lead to invalid system, no rectification for material or major defect or other situations that materially affect the Company; 2. Violation of regulations led to punishment from government department or regulatory authority. Violation of management system or internal control procedure led to major business disputes. Ranges of material litigation led to great losses;3.The working initiatives of staffs was damaged at a great level, and the working efficiency was substantially decreased, which exerted major adverse effects on the culture and cohesion of the enterprise, and led to serious turnover of core teams;4.Negative news spreads in the whole business scope( including the extension to industry chain ), or is concerned by national medias or public |
| abnormal or special accounting, and it is lack of compensating control;4.One or more frauds appeared during the financial report process, and which couldn’t reasonably guarantee that the formulated financial report would reach the goals of being actual and accurate. General Defect: Other defects besides material defect and major defect. | ones, which will substantially damage the enterprise’s reputation, and the negative effects can’t be eliminated all the time;5.The Company involved punishment from CSRC and involved warnings from stock exchange. | |
| Standards of Quantitation | (1) Material Defect: amount with wrong reporting ≧ 10% of total profit amount; amount with wrong reporting ≧ 10% of operating income; amount with wrong reporting≧ 10% of total asset; amount with wrong reporting≧10% of net assets;(2) Major Defect: 5% of total profit amount≦amount with wrong reporting﹤10% of total profit amount; 5% of operating income≦amount with wrong reporting﹤10% of operating income ;5% of total asset≦amount with wrong reporting﹤10% of total asset;5% of net assets ≦amount with wrong reporting﹤10% of net assets;(3) General Defect: amount with wrong reporting﹤5% of operating income. amount with wrong﹤5% of total asset; amount with wrong reporting﹤5% of net assets. | Material Defect: Due to the internal control defect of non-financial report, it may exert impacts of over RMB 10 million(including RMB10 million ) on the total profit amount.Major Defect: Due to the internal control defect of non-financial report, it may exert impacts of over RMB 5 million (including 5 million but less than 10 million) on the total profit amount. General Defect:Due to the internal control defect of non-financial report, it may exert impacts of below RMB 5 million. |
| Number of major defects in financial reporting（a） | 9 | |
| Number of major defects in non financial reporting (a) | 1 | |
| Number of important defects in financial reporting（a） | 0 | |
| Number of important defects in non financial reporting（a） | 0 | |
X. Internal Control audit report
√ Applicable □Not applicable
| Review opinions in the internal control audit report |
| Reanda Certified Public Accountants (LLP) conducted an audit of the effectiveness of internal control over the Company’s |
| financial statements as of December 31, 2018, and issued the Reanda 's No. 2334-[2019] Internal Control Audit Report, with issuance of the following opinion: We consider that due to the above-mentioned material deficiency and its impact on the achievement of the control objectives, Sino Great Wall failed to remain effective in all major aspects in the Internal control of financial reporting in accordance with the Basic Rules for Internal Control of Enterprises and the related regulations on December 31, 2018. | |
| Disclosure of internal audit report | Disclosure |
| Disclosure date of audit report of internal control (full-text) | April 30,2019 |
| Disclosure index of audit report of internal control (full-text) | （www.cninfo.com.cn） |
| Internal audit report’s opinion | Negative opinions |
| Non-financial reporting the existence of significant deficiencies | Yes |
Has the CPAs issued a qualified auditor’s report of internal control .√Yes □NoStatement of internal control audit report issued by accounting firm with non-standard opinionsIn this internal control audit, Reanda Certified Public Accountants (LLP) notices the following significant defects in the internalcontrol of the Company's financial reporting:
1. The accounting of income and cost is not standardized. Of the Company's revenue claimed in relation to a project in Cambodia,USD 1.13 million (equivalent to approximately RMB 7 million) was confirmed in writing by Party A in 2018, but the Companyrecognized the revenue in 2017. According to the accounting policies of the Company, the revenue of RMB 7 million is recognizedas intertemporal.2. Inventory management is not standardized. The management of raw materials is lack of improved system and standard. The rawmaterials purchased by the Company for project construction, such as steel, are only accessible in the material purchase andwarehousing management process. The materials purchased and warehoused are directly included in the construction cost of theconstruction project of the Company. The actual cost of the issued inventory is not determined by the first-in first-out method,weighted average method or individual valuation method in accordance with the relevant provisions of Accounting Standards forBusiness Enterprises No. 1 - Inventory. It is impossible to accurately measure the quantity and amount of raw materials collected forthe current project and those of raw materials at the end of the period.3. The insider registration management of insider information is not standardized. A memorandum of major events progress wasprepared in preparation for major assets acquisition in 2018, but none of the participants and insiders indicated in the memorandumsigned the memorandum for confirmation. It violates the provisions of Article 6 and Article 10 of the Provisions on ListedCompanies Establishing Insider Registration Management System of Insider Information.4. The management of raised funds is not standardized.(1) The excessive use of the raised funds has not been corrected and disclosed in a timely manner. At the 35th session of the seventhmeeting of the Board of Directors and the 23rd session of the seventh meeting of the Board of Supervisors of the Company, theProposal on Temporary Replenishment of Circulating Fund with Part of Idle Raised Funds was considered and adopted, and theCompany was allowed to temporarily supplement circulating funds with idle raised funds of RMB 139 million. Upon inspection, theraised funds account of the Company was deducted by more than RMB 5.1 million by the court on October 25, 2018, resulting in thetotal amount actually used by the Company to supplement circulating funds exceeding the approved amount RMB 327,300 tosupplement circulating funds. (2) The management system of raised funds is not sound. The Company's Management System for Useof Raised Funds does not involve the responsibility assigning mechanism for the illegal use of raised funds, and the provisions on the
hierarchical approval authority, decision-making procedures and risk control measures for the use of raised funds are not clear, whichdoes not conform to Article 3 of Guidelines for Supervision of Listed Companies No. 2 -Supervision Requirements for theManagement and Use of Raised Funds of Listed Companies.5. The assets of the Company and equity of subsidiaries are disposed without approval.On December 14, 2017, Sino Great Wall International Engineering Co., Ltd. (International Engineering Company), wholly-ownedsubsidiary of the Company, entered into a Non-recourse Domestic Factoring Contract with Shenzhen Qianhai Shihong CommercialFactoring Co., Ltd. to handle non-recourse factoring business on the accounts receivable of International Engineering Company.Pursuant to the Articles of Association, handling the factoring business falls within the decision-making authority of the Board ofDirectors of the Company. When the Company handles the factoring business, it has not been reviewed and approved by the Board ofDirectors of the Company. (2) On November 20, 2018, the General Manager of the Company made the decision to transfer 60%equity (accounting for 100% of the Company holding its shares) of Sino Great Wall Jianye Engineering Co., Ltd. (hereinafterreferred to as Sino Great Wall Jianye Engineering) at the office meeting. On November 27, 2018, the Company entered into an equitytransfer agreement with the counterparty. According to the Articles of Association (Article 112 Where the transactions of theCompany fall into any of the following circumstances, the Board of Directors shall review and approve them: . (2) The operatingincome related to the transaction object in the latest fiscal year accounts for more than 10% of the audited operating income of theCompany in the latest fiscal year, and the absolute amount exceeds RMB 10 million;).6. Funds management is not standardized.(1) The financial assistance is provided externally without approval. From 2016 to 2017, Sino Great Wall International EngineeringCo., Ltd., wholly-owned subsidiary of the Company, engaged in many loans entrusted payment business with Beijing AnlulaisenBuilding Materials Co., Ltd., Beijing Hongda Guangfa Construction Labor Service Co., Ltd. and Beijing Puya ArchitecturalDecoration Engineering Co., Ltd. The above matters have not been approved by the Board of Directors of the Company. TheCompany held the sixth session of the eighth meeting of the Board of Directors on April 12, 2019, at which the Proposal onSupplementary Consideration of Providing External Financial Assistance was considered and adopted. (2) Financing business ishandled without approval. In 2018, the Company conducted financing to financial institutions, non-financial institutions andindividuals without going through the normal approval process of the Company. (3) The control over some bank deposits is lost.During the examination of bank deposits and capital flow at the end of the period, it was found that the Company was unable toprovide bank deposit balances on the balance sheet date of some bank accounts and bank statements during the audit, and failed toimplement effective control over some bank deposits to ensure the safety of funds. (4) Fund raising problems. Under thecircumstance that the Company is short of funds, many loans are overdue and cause litigation, there are still large amounts ofnon-operating receivables and payables outstanding. For example, as of the balance sheet date, the Company shall receive RMB332,026,600 from Longyan Hengda Engineering Co., Ltd. and RMB 158,129,600 from Wuhan Jiutai Weiye Steel Co., Ltd.7. The tax management is not standardized.On December 7, 2018, the Second Taxation Office of Beijing Tongzhou District Taxation Bureau of the State TaxationAdministration shall issue the Notice on Tax Matters (JTEST [2018] No.13) to Sino Great Wall International Engineering Co., Ltd.,subsidiary of the Company. According to the self-inspection of the Company, Sino Great Wall International Engineering Co., Ltd.,subsidiary of the Company, obtained those listing the expenditures into construction cost of RMB 42.9313 million as a suspect inwriting false VAT ordinary invoices, intelligence VAT ordinary invoices of other provinces and out-of-control VAT special invoices,thus the taxable income shall be increased by RMB 6.4397 million. The tax management of the Company is not standardized, and theinvoice management and other tax management systems are lacked, resulting in listing the expenditures into the construction cost ofthe project in violation of regulations.8. Project management is out of control. As a result of the company's reasons, the Kuwait Military Academy, the Cambodian OilRefinery and other projects of Sino International Engineering Co., Ltd., subsidiary of the Company, have been halted, and theNewport Project in Qatar, the Kuwait Ministry of Finance Building Project and other projects have been stalled. The Company haslost control over the above mentioned projects. In the process of auditing the above overseas projects of the Company, we failed to
obtain satisfactory audit evidence through confirmation, interview and other procedures. We are unable to implement further auditprocedures or substitute audit procedures to obtain adequate and appropriate audit evidence due to the failure of the Company toprovide complete external information.9. Guarantee is provided externally without approval. According to Article 5, Chapter I of the Management System for ExternalGuarantee of the Company, "the Company shall not provide external guarantee without the consideration and approval of the generalmeeting of stockholders or the Board of Directors". On April 18, 2018, the Company (Party B, obligor to balance supplement) signeda balance supplement agreement with the Zhongyuan Trust (Party A, creditor) and Sino Great Wall (Fugou) High-speed RailwayArea Investment Co., Ltd. (Party C, debtor). Article 2.2 of the Agreement stipulates that "Where Party C fails to repay any amount orinstallment of funds payable (including but not limited to the principal of the loan, interest, compound interest, penalty interest,liquidated damages, compensation, fund possession cost, creditor's rights realization fee, etc.) on time for any reason in accordancewith the Trust Loan Contract (Main Contract), Party A shall have the right to send written notice to Party B to require Party B tofulfill the obligation to balance supplement. Balance supplement amount = principal and interest of Party A's principal creditor'srights and other receivables of Party A - principal and interest of principal creditor's rights actually received by Party A and otherreceivables of Party A." The above balance supplement agreement fails to go through the examination and approval procedures inaccordance with the relevant provisions of the Company. 10. In 2018, the Company was involved in a number of cases and disputes.For this kind of litigation cases, the Company has not established a litigation affair management system, and has failed to manage theinformation related to litigation timely and effectively in the case of receiving multiple litigation cases.Effective internal control can provide reasonable assurance for the truthfulness and completeness of financial reports and relatedinformation, while the above-mentioned major defects make the internal control of Sino Great Wall lose this function.The above-mentioned major defects have been included in the enterprise internal control evaluation report. In 2018 financialstatement auditing of Sino Great Wall, we have considered the impact of above-mentioned major defects on the nature, time andscope of the audit process.
In this internal control audit, Reanda Certified Public Accountants (Special General Partnership) noted that the company'snon-financial reporting internal controls have the following major deficiencies:
1. In 2018, the Great Wall of China involved more disputes. In response to such litigation cases, the company has not established alitigation management system, and has not timely and effectively managed information related to litigation in the case of receivingmultiple litigation cases. Due to the above-mentioned major defects, we remind users of this report to pay attention to the risksinvolved. It should be pointed out that we do not express opinions or provide guarantees on the internal control of non-financialreporting of the Great Wall of China. This paragraph does not affect the audit opinion issued on the effectiveness of internal controlover financial reporting.Does the internal control audit report issued by the CPAs agree with the self-assessment report of the Board of Directors√Yes □No
X. Specifications on Company Securities
Whether the company has any corporate bonds that are publicly issued and listed on the stock exchange, and that are not due or notfully repaid on the date of approval of the annual reportNo
XI. Financial Statements
1. Audit report
| Types of Audit Opinions | Disclaimer of Opinion |
| Signature Date | April 28, 2019 |
| Auditor | Reanda Certified Public Accountants (special general partnership) |
| Report No. | Reanda SZ [2019] No. 2333 |
| Chinese Certified Public Accountant: | Wang Xinyu and Zhou Zhonghua |
Audit Report
Audit report
Reanda SZ [2019] No. 2333
To all shareholders of Sino Great Wall Co., Ltd.：
I. OpinionsWe have audited the financial statements of Sino Great Wall Co., Ltd (hereinafter referred to as“Sino Great Wall”), including the consolidated and parent company’s balance sheet as of December 31,2018, the consolidated and parent company’s income statement, the consolidated and parent company’scash flow statement, the consolidated and parent company’s statement of changes in shareholder’s equityand the notes to financial statements of Year 2018.
We won’t express any opinions on the attached financial statements of Sino Great Wall. Due to thematters described in the section “Basis for Disclaimer of Opinion”, we are unable to obtain sufficient andappropriate audit evidence on which to base the opinion on the financial statements.
II Basis for Disclaimer of Opinion
1. Internal control failure
During our review of the rationality behind and effectiveness of the internal control design related tothe financial statements of Sino Great Wall on December 31, 2018, we found that many internal controlfailures have had a significant and extensive impact on the financial statements. (More details in InternalControl Audit Report, Reanda SZ [2019] No. 2333) We performed the audit based on sampling. Therefore,in the case of invalid internal control, no sufficient and appropriate audit evidence could be obtainedthrough this procedure to serve as the basis for an audit opinion.
2. Limited scope of audit
①As of the audit report date, the Company has not obtained sufficient confirmation letters to itsbank deposits, accounts receivable, other receivables, prepayments, long-term and short-term loans,
accounts payable, advance receipts, other payables, and notes payable and the confirmed amount is small.Besides, there is no alternative audit procedures to obtain sufficient and appropriate audit evidence toverify the authenticity and accuracy of the deposits and payments mentioned above.
② During the audit of the Company’s important engineering projects, procedures such asconfirmation in writing and interviews, failed to yield satisfactory audit evidence. Due to the Company’sfailure to provide complete external information, we are unable to further implement audit procedures oralternative procedures to obtain sufficient and appropriate audit evidence for the revenue and cost of theprojects.
Sino Great Wall launched a non-recourse factoring business with Dagang Financial Leasing(Shanghai) Co., Ltd. in June 2016. In December 2017, it launched another non-recourse factoringbusiness with Shihong Factoring Co., Ltd. As of the end of 2018, the Company received 140.954 millionRMB and 91.153 million RMB respectively from the original debtors, which were not transferred to thefactoring parties. We couldn’t obtain satisfactory audit evidence during our verification of this transactionand are unable to determine the nature of the transaction and its impact on the company’s financialstatements.
3. Failure to project the impact of project suspension, law suit and claim for damages
Many of the Company’s projects were suspended during construction, its major bank accounts werefrozen, employees dismissed, and some project related guarantees were claimed. A large amount of debtswas overdue and involved in litigation. Completed projects with unsettled inventory and investmentexpenses may have the risk of impairment, and the accounts receivable confirmed by the project mayhave bad debt risk. The guarantee may result in claim for loss, and the litigation may result in loss fromlawsuit. Due to the largely uncertain impact of matters mentioned above, we are unable to evaluate theCompany's judgment on the them.
4. Significant uncertainties in continued operations
In 2018, the Company’s major bank accounts were frozen with overdue debts, many of which areinvolved in litigation. Projects under construction were suspended and employees were dismissed withoverdue salaries. The Company is faced with fund shortage to sustain its operation and its financial statusis worsening, resulting in huge amount of loss in 2018. The above situation indicates that there issignificant uncertainty in the Company’s ability to continue its operations. We are unable to determinewhether it is appropriate for Sino Great Wall to apply the continued operations assumption to prepare the2018 financial statements.
5. Investigation of China Securities Regulatory Commission
The Company received the Notification of Investigation (No. JDCZ19041) from China SecuritiesRegulatory Commission, which decided to investigate the Company in accordance with Securities Law ofthe People's Republic of China on suspicion of law-breaking operations. As of the issue date of thefinancial statements, the investigation had not come to any conclusion.
III The Management and Governance Team’s Responsibilities for the Financial Statements
The management of the Company (hereinafter referred to as “the Management”) shall be responsiblefor compiling financial statements in accordance with the Accounting Standards for Business Enterprisesfor the true and fair presentation as well as designing, executing and protecting the internal control relatedto the compilation of financial statements so as to make the financial statements be free from any seriousmisstatement caused by frauds and errors.
In the preparation of the financial statements, the management is responsible for assessing thecontinued operation ability of Sino Great Wall, disclosing the matters related to continued operations (ifapplicable), and applying the continued operations assumption unless it is planned to liquidate, terminate
operations or make other necessary realistic choice.
The governance team is responsible for overseeing the financial reporting process of Sino GreatWall.
IV CPA’s Responsibility for Auditing Financial Statements
Our responsibility is to conduct our audit in accordance with Chinese CPA Standards on Auditingand present an audit report. Due to the matters described in the section “Basis for Disclaimer of Opinion”,we are unable to obtain sufficient appropriate audit evidence on which to base the opinion on the financialstatements.
According to the Code of Ethics for Chinese Certified Public Accountants, we are independent ofSino Great Wall and perform other duties in terms of professional ethics.
| Reanda Certified Public Accountants (special general partnership) | Chinese Certified Public Accountant: (Engagement Partner): |
| Beijing · China | Chinese Certified Public Accountant: |
| April 28, 2019 |
II. Financial Statements
Unit in the financial statements: RMB
1. Consolidated Balance Sheet
Prepared by: Sino Great Wall Co., Ltd.
Unit: Yuan
| Item | Ending balance | Opening balance |
| Current assets | ||
| Monetary resources | 658,714,886.48 | 1,604,973,916.12 |
| Deposit reservation for balance | ||
| Funds lent | ||
| Financial assets measured with fair value and having the change of fair value recorded in the gain or loss of current |
| period | ||
| Derivative financial assets | ||
| Notes receivable and accounts receivable | 4,204,113,048.24 | 5,994,876,806.96 |
| Including: notes receivable | 1,518,790.00 | 288,201,562.88 |
| Accounts receivable | 4,202,594,258.24 | 5,706,675,244.08 |
| Advance payment | 220,261,619.13 | 225,208,527.88 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance contract reserves receivable | ||
| Other accounts receivable | 2,186,223,361.40 | 1,674,675,360.28 |
| Including: accrued interest receivable | ||
| Dividends receivable | ||
| Redemptory monetary capital for sale | ||
| Inventories | 717,531,578.23 | 556,839,325.50 |
| Assets held for sale | 105,075,792.00 | |
| Non-current assets coming due within one year | ||
| Other current assets | 5,795,797.44 | 17,126,911.05 |
| Total current assets | 8,097,716,082.92 | 10,073,700,847.79 |
| Non-current assets: | ||
| Disbursement of advances and loans | ||
| Available-for-sale financial assets | 10,338,500.00 | 10,338,500.00 |
| Held-to-maturity investments | ||
| Long-term accounts receivable | 16,708,613.19 | 14,328,557.82 |
| Long-term equity investments | 106,837,810.83 | |
| Investment real estate | ||
| Fixed assets | 158,746,947.91 | 174,537,150.56 |
| Construction in progress | 36,697,284.04 | 4,968,590.96 |
| Capitalized biological assets | ||
| Oil and gas assets | ||
| Intangible assets | 99,921,251.67 | 127,524,445.00 |
| Development costs | ||
| Goodwill | 27,268,234.53 | 64,494,271.55 |
| Long-term deferred expenses | 6,727,688.90 | 10,124,913.15 |
| Deferred income tax assets | 117,983,727.91 | 118,233,337.36 |
| Other non-current assets | 924,509,792.99 | 1,069,594,572.11 |
| Total non-current assets | 1,505,739,851.97 | 1,594,144,338.51 |
| Total assets | 9,603,455,934.89 | 11,667,845,186.30 |
| Current liabilities: | ||
| Short-term loans | 2,862,584,629.01 | 3,477,200,420.55 |
| Borrowings from the central bank | ||
| Absorption of deposits and interbank deposit | ||
| Loans from banks and other financial institutions | ||
| Financial liabilities measured with fair value and having the change of fair value recorded in the gain or loss of current period | ||
| Derivative financial liabilities | ||
| Notes payable and accounts payable | 1,926,243,130.15 | 2,626,177,075.77 |
| Advances from customers | 478,101,743.92 | 146,379,852.67 |
| Financial assets sold under repurchase agreements | ||
| Handling charges and commissions payable | ||
| Employee compensation payable | 86,414,858.86 | 21,911,542.07 |
| Taxes and surcharges payable | 393,957,887.52 | 357,445,477.71 |
| Other accounts payable | 2,212,412,970.43 | 537,070,684.98 |
| Including: interest payable | 280,806,670.49 | 16,105,263.85 |
| Dividends payable | 8,541,818.64 | |
| Reinsurance accounts payable | ||
| Reserves for insurance contracts | ||
| Receivings from vicariously traded securities | ||
| Receivings from vicariously sold securities | ||
| Liabilities held for sale |
| Non-current liabilities coming due within one year | 975,719,981.55 | 820,422,471.45 |
| Other current liabilities | 121,529,600.95 | |
| Total current liabilities | 8,935,435,201.44 | 8,108,137,126.15 |
| Non-current liabilities: | ||
| Long-term loans | 120,000,000.00 | 843,092,471.02 |
| Bonds payable | 254,801,342.47 | 345,000,000.00 |
| Including: preferred stock | ||
| Perpetual debts | ||
| Long-term accounts payable | 322,990.35 | 81,945,567.86 |
| Long-term employee compensation payable | ||
| Estimated liabilities | 2,958,723.15 | 3,414,189.15 |
| Deferred income | ||
| Deferred income tax liabilities | 24,369,456.18 | 26,088,961.71 |
| Other non-current liabilities | ||
| Total non-current liabilities | 402,452,512.15 | 1,299,541,189.74 |
| Total liabilities | 9,337,887,713.59 | 9,407,678,315.89 |
| Total owners’ equity: | ||
| Capital stock | 1,698,245,011.00 | 1,698,245,011.00 |
| Other equity instruments | ||
| Including: preferred stock | ||
| Perpetual debts | ||
| Capital reserve | -1,298,846,540.07 | -1,299,349,701.74 |
| Less: treasury stock | ||
| Other comprehensive income | -50,380.95 | 858,242.13 |
| Special reserve | 21,026,082.43 | 164,231,078.18 |
| Surplus reserve | 84,394,441.23 | 84,394,441.23 |
| General risk reserves | ||
| Undistributed profits | -269,566,140.13 | 1,503,103,396.72 |
| Total equity attributable to owners of Parent Company | 235,202,473.51 | 2,151,482,467.52 |
| Minority equity | 30,365,747.79 | 108,684,402.89 |
| Total owners’ equity | 265,568,221.30 | 2,260,166,870.41 |
| Total liabilities and owners’ equity | 9,603,455,934.89 | 11,667,845,186.30 |
Legal Representative: Chen LueAccounting Principal: Yang ChunlingHead of the Accounting Department: Yang Chunling
2. Balance Sheet of Parent Company
Unit: Yuan
| Item | Ending balance | Opening balance |
| Current assets | ||
| Monetary resources | 46,778,625.47 | 407,959,304.60 |
| Financial assets measured with fair value and having the change of fair value recorded in the gain or loss of current period | ||
| Derivative financial assets | ||
| Notes receivable and accounts receivable | ||
| Including: notes receivable | ||
| Accounts receivable | ||
| Advance payment | 3,865,500.01 | |
| Other accounts receivable | 2,986,852,664.14 | 3,690,967,483.22 |
| Including: accrued interest receivable | ||
| Dividends receivable | 100,000,000.00 | 100,000,000.00 |
| Inventories | ||
| Assets held for sale | ||
| Non-current assets coming due within one year | ||
| Other current assets | 2,604,075.38 | 2,175,646.45 |
| Total current assets | 3,036,235,364.99 | 4,104,967,934.28 |
| Non-current assets: | ||
| Available-for-sale financial assets | ||
| Held-to-maturity investments | ||
| Long-term accounts receivable | ||
| Long-term equity investments | 3,323,211,536.66 | 3,311,211,536.66 |
| Investment real estate |
| Fixed assets | 36,371.12 | 52,246.48 |
| Construction in progress | ||
| Capitalized biological assets | ||
| Oil and gas assets | ||
| Intangible assets | ||
| Development costs | ||
| Goodwill | ||
| Long-term deferred expenses | 1,074,666.67 | 168,284.84 |
| Deferred income tax assets | ||
| Other non-current assets | 728,328,020.00 | 550,524,570.00 |
| Total non-current assets | 4,052,650,594.45 | 3,861,956,637.98 |
| Total assets | 7,088,885,959.44 | 7,966,924,572.26 |
| Current liabilities: | ||
| Short-term loans | 2,189,866,602.21 | 2,287,870,000.00 |
| Financial liabilities measured with fair value and having the change of fair value recorded in the gain or loss of current period | ||
| Derivative financial liabilities | ||
| Notes payable and accounts payable | 95,000,000.00 | 537,227,578.11 |
| Advances from customers | ||
| Employee compensation payable | 15,016,143.39 | 1,580,335.12 |
| Taxes and surcharges payable | 97,149,029.10 | 97,124,633.81 |
| Other accounts payable | 1,347,473,661.05 | 392,422,663.75 |
| Including: interest payable | 243,458,030.15 | 13,002,236.21 |
| Dividends payable | 8,541,818.64 | |
| Liabilities held for sale | ||
| Non-current liabilities coming due within one year | 866,250,000.00 | 700,000,000.00 |
| Other current liabilities | ||
| Total current liabilities | 4,610,755,435.75 | 4,016,225,210.79 |
| Non-current liabilities: | ||
| Long-term loans | 800,000,000.00 | |
| Bonds payable | 100,000,000.00 | |
| Including: preferred stock | ||
| Perpetual debts |
| Long-term accounts payable | ||
| Long-term employee compensation payable | ||
| Estimated liabilities | ||
| Deferred income | ||
| Deferred income tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 900,000,000.00 | |
| Total liabilities | 4,610,755,435.75 | 4,916,225,210.79 |
| Total owners’ equity: | ||
| Capital stock | 1,698,245,011.00 | 1,698,245,011.00 |
| Other equity instruments | ||
| Including: preferred stock | ||
| Perpetual debts | ||
| Capital reserve | 1,237,956,472.37 | 1,237,956,472.37 |
| Less: treasury stock | ||
| Other comprehensive income | ||
| Special reserve | ||
| Surplus reserve | 26,309,287.00 | 26,309,287.00 |
| Undistributed profits | -484,380,246.68 | 88,188,591.10 |
| Total owners’ equity | 2,478,130,523.69 | 3,050,699,361.47 |
| Total liabilities and owners’ equity | 7,088,885,959.44 | 7,966,924,572.26 |
3. Consolidated Income Statement
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
| I. Gross operating income | 2,426,987,687.02 | 6,497,124,980.52 |
| Including: operating income | 2,426,987,687.02 | 6,497,124,980.52 |
| Interest income | ||
| Insurance premiums earned | ||
| Handling charges and commission income | ||
| II. Gross operating cost | 3,906,818,404.18 | 5,990,935,078.96 |
| Including: operating cost | 2,449,500,634.87 | 4,886,354,499.66 |
| Interest expenditure | ||
| Handling charges and commission expenditure | ||
| Surrender value | ||
| Net payments for insurance claims | ||
| Net provision insurance contracts | ||
| Expenditures dividend policy | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 4,790,660.57 | 4,533,005.61 |
| Selling expenses | 28,300,802.42 | 32,213,247.97 |
| Management expenses | 311,698,800.53 | 312,957,207.20 |
| R&D expenses | ||
| Financial expenses | 606,015,536.23 | 432,590,607.55 |
| Including: interest expenses | 295,397,174.36 | |
| Interest income | 15,353,873.68 | |
| Asset impairment loss | 506,511,969.56 | 322,286,510.97 |
| Plus: Other incomes | 52,040.48 | 2,211,128.89 |
| Investment income (Losses are marked with a “-”) | 30,219,918.01 | -387,601.37 |
| Including: Income from investment in jointly-run enterprises and joint ventures | ||
| Profits from changes in fair value (Losses are marked with a “-”) | ||
| Exchange earning (Losses are marked with a “-”) | 0.00 | |
| Proceeds from asset disposal (Losses are marked with a “-”) | -150,250.00 | |
| III. Operating profit (Losses are marked with a “-”) | -1,449,558,758.67 | 507,863,179.08 |
| Plus: Non-Operating Income | 128,699,835.85 | 156,426.78 |
| Less: Non-Operating Expenditure | 395,623,593.98 | -3,030,152.73 |
| IV: Total profit (Losses are marked with a “-”) | -1,716,482,516.80 | 511,049,758.59 |
| Less: Expense of income tax | 3,281,922.60 | 127,003,731.76 |
| V. Net profit (Losses are marked with a “-”) | -1,719,764,439.40 | 384,046,026.83 |
| (I) Net profits from continued operations (Losses are marked with a “-”) | ||
| (II) Net profits from discontinued operations (Losses are marked with a “-”) | ||
| Net profit attributed to the parent company’s owners | -1,704,739,736.40 | 380,090,990.82 |
| Profit and loss of minority shareholders | -15,024,703.00 | 3,955,036.01 |
| VI. Net of tax for other comprehensive income | -908,623.08 | 858,242.13 |
| Net of tax for comprehensive income attributed to the parent company’s owners | -908,623.08 | 858,242.13 |
| (I) Other comprehensive income that cannot be reclassified into profit or loss | ||
| 1. Remeasure the change in the defined benefit plan | ||
| 2. Other comprehensive income that cannot be transferred with equity method | ||
| (II) Other comprehensive income to be reclassified into profit or loss | -908,623.08 | 858,242.13 |
| 1. Other comprehensive income that can be transferred with equity method | ||
| 2. Gains and losses from changes in fair value of available-for-sale financial assets | ||
| 3. Held-to-maturity investment reclassified as gains and losses on available-for-sale financial assets |
| 4. Effective portion of cash flow hedge gains and losses | ||
| 5. Balance from conversion of foreign-currency financial statements | -908,623.08 | 858,242.13 |
| 6. Others | ||
| VI. Net of tax for other comprehensive income attributed to minority stockholders | ||
| VII. Total amount of composite benefits | -1,720,673,062.48 | 384,904,268.96 |
| Total amount of composite benefits attributed to the parent company’s owners | -1,705,648,359.48 | 380,949,232.95 |
| Total amount of composite benefits attributed to minority stockholders | -15,024,703.00 | 3,955,036.01 |
| VIII. Earnings per share | ||
| (I) Basic earnings per share | -1.004 | 0.220 |
| (II) Diluted earnings per share | -1.004 | 0.220 |
f the enterprise is merged under the same control in the current period, the net profit realized by the merged party before the merger shall beRMB , and the net profit realized by the merged party in the last period shall be RMBLegal Representative: Chen LueAccounting Principal: Yang ChunlingHead of the Accounting Department: Yang Chunling
4. Parent company’s income statement
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
| I. Operating income | 197,962.06 | 240,558.55 |
| Less: operating cost | 0.00 | 1,482.50 |
| Taxes and surcharges | 232,339.11 | 486,860.22 |
| Selling expenses | 1,041,800.14 | 793,644.62 |
| Management expenses | 46,082,221.37 | 48,845,134.77 |
| R&D expenses | ||
| Financial expenses | 439,946,225.01 | 94,901,413.49 |
| Including: interest expenses | ||
| Interest income | ||
| Asset impairment loss | 14,901,696.51 | 7,489,577.66 |
| Plus: Other incomes | 7,211.91 | |
| Investment income (Losses are marked with a “-”) | 100,000,000.00 | |
| Including: Income from investment in jointly-run enterprises and joint ventures | ||
| Profits from changes in fair value (Losses are marked with a “-”) | ||
| Proceeds from asset disposal (Losses are marked with a “-”) | ||
| II. Operating profit (Losses are marked with a “-”) | -502,006,320.08 | -52,270,342.80 |
| Plus: Non-Operating Income | 100,000,000.00 | 0.01 |
| Less: Non-Operating Expenditure | 102,632,717.26 | |
| III: Total profit (Losses are marked with a “-”) | -504,639,037.34 | -52,270,342.79 |
| Less: Expense of income tax | ||
| IV. Net profit (Losses are marked with a “-”) | -504,639,037.34 | -52,270,342.79 |
| (I) Net profits from continued operations (Losses are marked with a “-”) | ||
| (II) Net profits from discontinued operations (Losses are marked with a “-”) | ||
| V. Net of tax for other comprehensive income | ||
| (I) Other comprehensive income that cannot be reclassified into profit or loss | ||
| 1. Remeasure the change in the defined benefit plan | ||
| 2. Other comprehensive income that cannot be transferred |
| with equity method | ||
| (II) Other comprehensive income to be reclassified into profit or loss | ||
| 1. Other comprehensive income that can be transferred with equity method | ||
| 2. Gains and losses from changes in fair value of available-for-sale financial assets | ||
| 3. Held-to-maturity investment reclassified as gains and losses on available-for-sale financial assets | ||
| 4. Effective portion of cash flow hedge gains and losses | ||
| 5. Balance from conversion of foreign-currency financial statements | ||
| 6. Others | ||
| VI. Total amount of composite benefits | -504,639,037.34 | -52,270,342.79 |
| VII. Earnings per share | ||
| (I) Basic earnings per share | ||
| (II) Diluted earnings per share |
5. Consolidated Statements of Cash Flows
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
| I. Cash flow from operating activities | ||
| Cash received from sales of goods and rending of services | 3,468,136,123.20 | 4,642,883,579.49 |
| Net increase in customer deposits and interbank deposits | ||
| Net increase for borrowing from the central bank | ||
| Net increase in placements from other financial institutions | ||
| Cash premiums received on |
| original insurance contracts | ||
| Cash received from re-insurance business | ||
| Net increase in deposits and investments from insurers | ||
| Net increase for disposals of financial assets measured as fair value and the variation included in current profit and loss | ||
| Interest, handling charges and commissions received | ||
| Net increase in placements from financial institutions | ||
| Net increase in repurchasing business capital | ||
| Receipts of tax refunds | 3,982,148.20 | 11,520,458.96 |
| Other cash received relating to operating activities | 4,934,012,815.86 | 6,134,642,883.34 |
| Sub-total of cash inflows from operating activities | 8,406,131,087.26 | 10,789,046,921.79 |
| Cash payments for goods purchased and services received | 2,715,043,669.32 | 5,007,872,564.26 |
| Net increase in loans and advances to customers | ||
| Net increase in deposits with the central bank and other financial institutions | ||
| Payments of claims for original insurance contracts | ||
| Interest, handling charges and commissions paid | ||
| Commissions on insurance policies paid | ||
| Cash payments to and on behalf of employees | 262,092,659.22 | 380,713,969.98 |
| Payments of all types of taxes | 72,091,894.26 | 212,006,262.08 |
| Other cash payments relating to operating activities | 4,529,023,809.01 | 6,970,322,744.12 |
| Sub-total of cash outflows from operating activities | 7,578,252,031.81 | 12,570,915,540.44 |
| Net cash flows from operating activities | 827,879,055.45 | -1,781,868,618.65 |
| II. Cash flows from investing activities | ||
| Cash received from disposals and withdrawals of investment | 2,000,000.00 | |
| Cash received from returns on investments | ||
| Net cash received from disposals of fixed assets, intangible assets and other long-term assets | 424,000.00 | 85,000.00 |
| Net cash received from disposals of subsidiaries and other business units | 3,400,000.00 | |
| Other cash payments relating to investing activities | ||
| Sub-total of cash inflows from investing activities | 3,824,000.00 | 2,085,000.00 |
| Cash payments to acquire and construct fixed assets, intangible assets and other long-term assets | 9,496,541.03 | 48,204,408.85 |
| Cash payments to acquire investments | 182,993,849.80 | 840,948,723.77 |
| Net increase in secured loans | ||
| Net cash payments for acquisitions of subsidiaries and other business units | 2,340,123.50 | |
| Other cash payments relating to investing activities | 2,990,381.41 | 131,500,000.00 |
| Sub-total of cash outflows from investing activities | 195,480,772.24 | 1,022,993,256.12 |
| Net cash flows from investing activities | -191,656,772.24 | -1,020,908,256.12 |
| III. Cash flows from financing activities | ||
| Cash received from investors | 12,490,000.00 | 30,240,000.00 |
| Including: Cash received from minority shareholders | ||
| Cash received from borrowings | 1,414,923,533.71 | 4,537,777,192.35 |
| Proceeds from issuance of bonds | 344,800,000.00 | |
| Other cash received relating to financing activities | 54,209,648.35 | 179,327,200.00 |
| Sub-total of cash inflows from financing activities | 1,481,623,182.06 | 5,092,144,392.35 |
| Cash repayments of amounts borrowed | 2,438,563,678.82 | 1,998,607,849.12 |
| Cash payments for distribution of dividends or profits, or cash payments for interest expenses | 177,477,175.65 | 332,584,990.54 |
| Including: Subsidiary companies’ payment to minority shareholders for distribution of dividends or profit | ||
| Other cash payments relating to financing activities | 22,512,800.03 | 233,071,283.83 |
| Sub-total of cash outflows from financing activities | 2,638,553,654.50 | 2,564,264,123.49 |
| Net cash flows from financing activities | -1,156,930,472.44 | 2,527,880,268.86 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | -746,604.37 | -21,586,126.02 |
| V. Net increase in cash and cash equivalents | -521,454,793.60 | -296,482,731.93 |
| Plus: Cash and cash equivalents at the beginning of period | 647,222,590.48 | 943,705,322.41 |
| VI. Cash and cash equivalents at the end of period | 125,767,796.88 | 647,222,590.48 |
6. Consolidated Statements of Cash Flows of the Parent Company
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
| I. Cash flow from operating activities | ||
| Cash received from sales of goods and rending of services | 265,320.00 | |
| Receipts of tax refunds | ||
| Other cash received relating to operating activities | 3,916,915,819.93 | 4,283,071,598.59 |
| Sub-total of cash inflows from | 3,916,915,819.93 | 4,283,336,918.59 |
| operating activities | ||
| Cash payments for goods purchased and services received | ||
| Cash payments to and on behalf of employees | 494,240.89 | |
| Payments of all types of taxes | 234,343.88 | 396,447.37 |
| Other cash payments relating to operating activities | 2,670,055,342.90 | 5,546,418,464.78 |
| Sub-total of cash outflows from operating activities | 2,670,289,686.78 | 5,547,309,153.04 |
| Net cash flows from operating activities | 1,246,626,133.15 | -1,263,972,234.45 |
| II. Cash flows from investing activities | ||
| Cash received from disposals and withdrawals of investment | ||
| Cash received from returns on investments | ||
| Net cash received from disposals of fixed assets, intangible assets and other long-term assets | ||
| Net cash received from disposals of subsidiaries and other business units | ||
| Other cash payments relating to investing activities | ||
| Sub-total of cash inflows from investing activities | ||
| Cash payments to acquire and construct fixed assets, intangible assets and other long-term assets | 65,440.00 | |
| Cash payments to acquire investments | 160,000,000.00 | 696,324,570.00 |
| Net cash payments for acquisitions of subsidiaries and other business units | ||
| Other cash payments relating to investing activities | ||
| Sub-total of cash outflows from investing activities | 160,000,000.00 | 696,390,010.00 |
| Net cash flows from investing activities | -160,000,000.00 | -696,390,010.00 |
| III. Cash flows from financing activities | ||
| Cash received from investors | ||
| Cash received from borrowings | 840,650,000.00 | 3,085,070,000.00 |
| Proceeds from issuance of bonds | 99,800,000.00 | |
| Other cash received relating to financing activities | ||
| Sub-total of cash inflows from financing activities | 840,650,000.00 | 3,184,870,000.00 |
| Cash repayments of amounts borrowed | 1,902,673,705.66 | 980,200,000.00 |
| Cash payments for distribution of dividends or profits, or cash payments for interest expenses | 100,441,437.45 | 282,451,200.03 |
| Other cash payments relating to financing activities | 31,000,000.00 | |
| Sub-total of cash outflows from financing activities | 2,003,115,143.11 | 1,293,651,200.03 |
| Net cash flows from financing activities | -1,162,465,143.11 | 1,891,218,799.97 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | ||
| V. Net increase in cash and cash equivalents | -75,839,009.96 | -69,143,444.48 |
| Plus: Cash and cash equivalents at beginning of period | 99,547,899.86 | 168,691,344.34 |
| VI. Cash and cash equivalents at end of period | 23,708,889.90 | 99,547,899.86 |
7. Consolidated Statement of Changes in Owners’ Equity
Amount of the current period
Unit: Yuan
| Item | Current period | ||||||||||
| Equity attributable to owners of Parent Company | Minority equit | Total owners’ | |||||||||
| Capital | Other equity instruments | Capital | Capital | Other equit | Capital | Capital | Other equit | Capital | |||
| stock | Preferred stock | Perpetual debts | Others | reserve | stock | y instruments | reserve | stock | y instruments | reserve | y Capital stock | equity Other equity instruments | |
| I. Balance at the end of the last year | 1,698,245,011.00 | -1,299,349,701.74 | 858,242.13 | 164,231,078.18 | 84,394,441.23 | 1,503,103,396.71 | 108,684,402.89 | 2,260,166,870.40 | |||||
| Plus: adjustments for changes in accounting policies | |||||||||||||
| Correction of accounting errors in prior periods | |||||||||||||
| Business combination under common control | |||||||||||||
| Others | |||||||||||||
| II. Balance at the beginning of the year | 1,698,245,011.00 | -1,299,349,701.74 | 858,242.13 | 164,231,078.18 | 84,394,441.23 | 1,503,103,396.71 | 108,684,402.89 | 2,260,166,870.40 | |||||
| III. Increases/decreases in the current period (“-” for decreases) | 503,161.67 | -908,623.08 | -143,204,995.75 | -1,772,669,536.84 | -78,318,655.10 | -1,994,598,649.10 | |||||||
| (I) Total comprehensive income | -50,380.95 | -1,704,739,736.40 | -15,024,703.00 | -1,719,814,820.35 | |||||||||
| (II) Capital | 503,1 | -858, | -63,2 | -63,6 |
| contributed or reduced by owners | 61.67 | 242.13 | 93,952.10 | 49,032.56 | |||||||||
| 1. Common shares contributed by owners | 490,000.00 | 490,000.00 | |||||||||||
| 2. Capital contributed by holders of other equity instruments | |||||||||||||
| 3. Amounts of share-based payments recognized in owners’ equity | |||||||||||||
| 4. Others | 503,161.67 | -858,242.13 | -63,783,952.10 | -64,139,032.56 | |||||||||
| (III) Profit distribution | -67,929,800.44 | -67,929,800.44 | |||||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||
| 2. Withdrawal of general risk reserves | |||||||||||||
| 3. Profits distributed to owners (or shareholders) | -67,929,800.44 | -67,929,800.44 | |||||||||||
| 4. Others | |||||||||||||
| (IV) Internal carry-forward of owners’ equity | |||||||||||||
| 1. Conversion of capital reserves into paid-in capital (or capital stock) | |||||||||||||
| 2. Conversion of |
| surplus reserves into paid-in capital (or capital stock) | |||||||||||||
| 3. Surplus reserves offsetting losses | |||||||||||||
| 4. Carried-forward retained earnings of changes in defined benefit plan | |||||||||||||
| 5. Others | |||||||||||||
| (V) Special reserve | -143,204,995.75 | -143,204,995.75 | |||||||||||
| 1. Amount withdrawn in the current period | -143,204,995.75 | -143,204,995.75 | |||||||||||
| 2. Amount used in the current period | |||||||||||||
| (VI) Others | |||||||||||||
| IV. Balance at the end of the current period | 1,698,245,011.00 | -1,298,846,540.07 | -50,380.95 | 21,026,082.43 | 84,394,441.23 | -269,566,140.13 | 30,365,747.79 | 265,568,221.30 |
Amount of the last period
Unit: Yuan
| Item | Last period | ||||||||||||
| Equity attributable to owners of Parent Company | Minority equity Capital stock | Total owners’ equity Other equity instruments | |||||||||||
| Capital stock | Other equity instruments | Capital reserve | Capital stock | Other equity instruments | Capital reserve | Capital stock | Other equity instruments | Capital reserve | |||||
| Preferred stock | Perpetual debts | Others | |||||||||||
| I. Balance at the end of the last year | 1,698,245,011.00 | -1,299,349,701.74 | 65,687,868.14 | 84,394,441.23 | 1,228,970,498.86 | 52,534,755.10 | 1,830,482,872.59 | ||||||
| Plus: adjustments for changes in accounting policies | |||||||||||||
| Correction of accounting errors in prior periods | |||||||||||||
| Business combination under common control | |||||||||||||
| Others | |||||||||||||
| II. Balance at the beginning of the year | 1,698,245,011.00 | -1,299,349,701.74 | 65,687,868.14 | 84,394,441.23 | 1,228,970,498.86 | 52,534,755.10 | 1,830,482,872.59 | ||||||
| III. Increases/decreases in the current period (“-” for decreases) | 858,242.13 | 98,543,210.04 | 274,132,897.86 | 56,149,647.79 | 429,683,997.82 | ||||||||
| (I) Total comprehensive income | 858,242.13 | 380,090,990.83 | 3,955,036.01 | 384,904,268.97 | |||||||||
| (II) Capital contributed or reduced by owners | -4,063,392.31 | 52,194,611.78 | 48,131,219.47 | ||||||||||
| 1. Common shares contributed by owners | 30,240,000.00 | 30,240,000.00 | |||||||||||
| 2. Capital |
| contributed by holders of other equity instruments | |||||||||||||
| 3. Amounts of share-based payments recognized in owners’ equity | |||||||||||||
| 4. Others | -4,063,392.31 | 21,954,611.78 | 17,891,219.47 | ||||||||||
| (III) Profit distribution | -101,894,700.66 | -101,894,700.66 | |||||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||
| 2. Withdrawal of general risk reserves | |||||||||||||
| 3. Profits distributed to owners (or shareholders) | -101,894,700.66 | -101,894,700.66 | |||||||||||
| 4. Others | |||||||||||||
| (IV) Internal carry-forward of owners’ equity | |||||||||||||
| 1. Conversion of capital reserves into paid-in capital (or capital stock) | |||||||||||||
| 2. Conversion of surplus reserves into paid-in capital (or capital stock) | |||||||||||||
| 3. Surplus reserves offsetting losses | |||||||||||||
| 4. |
| Carried-forward retained earnings of changes in defined benefit plan | |||||||||||||
| 5. Others | |||||||||||||
| (V) Special reserve | 98,543,210.04 | 98,543,210.04 | |||||||||||
| 1. Amount withdrawn in the current period | 98,543,210.04 | 98,543,210.04 | |||||||||||
| 2. Amount used in the current period | |||||||||||||
| (VI) Others | |||||||||||||
| IV. Balance at the end of the current period | 1,698,245,011.00 | -1,299,349,701.74 | 858,242.13 | 164,231,078.18 | 84,394,441.23 | 1,503,103,396.72 | 108,684,402.89 | 2,260,166,870.41 |
8. Statement of Changes in Equity of Owners of Parent Company
Amount of the current period
Unit: Yuan
| Item | Current period | ||||||||||
| Capital stock | Other equity instruments | Capital reserve | Less: treasury stock | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profits | Total owners’ equity | |||
| Preferred stock | Perpetual debts | Others | |||||||||
| I. Balance at the end of the last year | 1,698,245,011.00 | 1,237,956,472.37 | 26,309,287.00 | 88,188,591.10 | 3,050,699,361.47 | ||||||
| Plus: adjustments for changes in accounting policies | |||||||||||
| Correction of accounting errors in prior periods | |||||||||||
| Others | |||||||||||
| II. Balance at the beginning of the year | 1,698,245,011.00 | 1,237,956,472.37 | 26,309,287.00 | 88,188,591.10 | 3,050,699,361.47 | ||||||
| III. Increases/decreases in the current period (“-” for decreases) | -572,568,837.78 | -572,568,837.78 | |||||||||
| (I) Total comprehensive income | -504,639,037.34 | -504,639,037.34 | |||||||||
| (II) Capital contributed or reduced by owners | |||||||||||
| 1. Common shares contributed by owners | |||||||||||
| 2. Capital contributed by holders of other equity instruments | |||||||||||
| 3. Amounts of share-based payments recognized in owners’ equity | |||||||||||
| 4. Others | |||||||||||
| (III) Profit distribution | -67,929,800.44 | -67,929,800.44 | |||||||||
| 1. Withdrawal of surplus reserves | |||||||||||
| 2. Profits distributed to | -67,929,80 | -67,929,800.44 |
| owners (or shareholders) | 0.44 | ||||||||||
| 3. Others | |||||||||||
| (IV) Internal carry-forward of owners’ equity | |||||||||||
| 1. Conversion of capital reserves into paid-in capital (or capital stock) | |||||||||||
| 2. Conversion of surplus reserves into paid-in capital (or capital stock) | |||||||||||
| 3. Surplus reserves offsetting losses | |||||||||||
| 4. Carried-forward retained earnings of changes in defined benefit plan | |||||||||||
| 5. Others | |||||||||||
| (V) Special reserve | |||||||||||
| 1. Amount withdrawn in the current period | |||||||||||
| 2. Amount used in the current period | |||||||||||
| (VI) Others | |||||||||||
| IV. Balance at the end of the current period | 1,698,245,011.00 | 1,237,956,472.37 | 26,309,287.00 | -484,380,246.68 | 2,478,130,523.69 |
Amount of the last period
Unit: Yuan
| Item | Last period | ||||||||||
| Capital stock | Capital stock | Capital stock | Capital stock | Capital stock | |||||||
| Preferred stock | Perpetual debts | Others | |||||||||
| I. Balance at the end of the last year | 1,698,245,011.00 | 1,237,956,472.37 | 26,309,287.00 | 242,353,634.55 | 3,204,864,404.92 | ||||||
| Plus: adjustments for changes in accounting policies | |||||||||||
| Correction of accounting errors in prior periods | |||||||||||
| Others | |||||||||||
| II. Balance at the beginning of the year | 1,698,245,011.00 | 1,237,956,472.37 | 26,309,287.00 | 242,353,634.55 | 3,204,864,404.92 | ||||||
| III. Increases/decreases in the current period (“-” for decreases) | -154,165,043.45 | -154,165,043.45 | |||||||||
| (I) Total comprehensive income | -52,270,342.79 | -52,270,342.79 | |||||||||
| (II) Capital contributed or reduced by owners | |||||||||||
| 1. Common shares contributed by owners | |||||||||||
| 2. Capital contributed by holders of other equity | |||||||||||
| instruments | |||||||||||
| 3. Amounts of share-based payments recognized in owners’ equity | |||||||||||
| 4. Others | |||||||||||
| (III) Profit distribution | -101,894,700.66 | -101,894,700.66 | |||||||||
| 1. Withdrawal of surplus reserves | |||||||||||
| 2. Profits distributed to owners (or shareholders) | -101,894,700.66 | -101,894,700.66 | |||||||||
| 3. Others | |||||||||||
| (IV) Internal carry-forward of owners’ equity | |||||||||||
| 1. Conversion of capital reserves into paid-in capital (or capital stock) | |||||||||||
| 2. Conversion of surplus reserves into paid-in capital (or capital stock) | |||||||||||
| 3. Surplus reserves offsetting losses | |||||||||||
| 4. Carried-forward retained earnings of changes in defined benefit plan | |||||||||||
| 5. Others |
| (V) Special reserve | |||||||||||
| 1. Amount withdrawn in the current period | |||||||||||
| 2. Amount used in the current period | |||||||||||
| (VI) Others | |||||||||||
| IV. Balance at the end of the current period | 1,698,245,011.00 | 1,237,956,472.37 | 26,309,287.00 | 88,188,591.10 | 3,050,699,361.47 |
III. Basic Information of the Company
Sino Great Wall Co., Ltd. (hereinafter referred to as "Company” or the "Company”) is a limitedliability company restructured by Shenzhen Victor Onward Textile Printing Co., Ltd. and altered its nameto Shenzhen Victor Onward Textile Industrial Co., Ltd. upon the approval of the People's Government ofShenzhen Municipality on November 19, 1991. The Company’s enterprise uniform social credit code:
91440300618801483A. It was listed on the Shenzhen Stock Exchange in 1992.
On July 23, 2015, the Chinese Securities Regulatory Commission approved the “Approval onShenzhen Victor Onward Textile Industrial Co., Ltd.’s Material Assets Reorganization, Issuance of StockShares to Chen Lve and Others, Asset Purchase, and Raising of Supporting Fund” ([2015] No. 1774). Thecompany issued 251,849,593 shares to 17 shareholders of Sino Great Wall Co., Ltd. including Chen Lveto purchase a 100% stake in Sino Great Wall International Engineering Co., Ltd. Meanwhile, it alsoissued 25,914,633 shares in a non-public manner to the 17 shareholders and raised a total of RMB254,999,988.72.
On July 29, 2015, the listed company received the total newly added capital of RMB 251,849,593contributed by all shareholders of Sino Great Wall Co., Ltd. On July 30, 2015, Ruihua Certified PublicAccountants (Special General Partnership) verified the numbers and issued the “Capital VerificationReport” (Ruihua Yanzi [2015] No. 48250011). After the change, the registered capital became RMB420,991,949 with capital stock of RMB 420,991,949. On December 4, 2015, the company changed itsname to Sino Great Wall Co., Ltd.
On May 6, 2016, the general meeting of stockholders reviewed and approved the 2015 plan ofconverting capital reserve into share capital. The specific plan was: Based on the total capital stock of446,906,582 shares issued as of December 31, 2015, all shareholders would receive 28 shares for every10 shares, with the total amount of converted capital stock reaching 1,251,338,429 shares. After thetransfer, the total capital stock would be increased to 1,698,245,011 shares. As of December 31 2016, theCompany’s total capital stock was 1,698,245,011 shares, of which 1,434,441,780 were outstanding Ashares, and 263,803,231 were outstanding B shares. Chen Lve held 582,944,556 A shares, accounting for34.33% of the total. He was the controlling shareholder and actual controller of the Company.
The industries involved are the architectural decoration industry and other construction industries. Asof December 31, 2018, the Company has issued capital stock of RMB 169,824,500 shares in total withthe registered capital of RMB 169,824,500; the registration address is located at No. 26, Kuipeng Road,
Baishigang, Kuichong Subdistrict, Dapeng New District, Shenzhen City and the headquarter address is:
Sino Great Wall Tower, No. 3, Jinxiu Road, Beijing Economic-Technological Development Area.
The operating activities of the Company include: production and operation of textile goods and theneeded raw materials, accessories, mechanical equipment, clothes of various face fabrics and provision ofrelevant services (excluding those products managed by the current license, performing as per the licenseif there is one). 70% of the products are for export. A branch has set up in Shanghai. Supplementedoperating activities: engaging in businesses of quota-free license management, acquisition and export ofnon-monopolized commodity. The actual controller of the Company is Chen Lve. The financialstatements have been reported on April 26, 2018 after the approval of all directors (board of directors) ofthe Company.
For the subsidiaries of the Company that were included in the combination scope in 2018, pleaserefer to “Note VIII. Equity in Other Subjects”. For details of the changes in the combination scope of theCompany for the current year, please refer to “Note VII. Change of Combination Scope”.IV. Basis for Preparation of Financial Statements
1. Basis of Preparation
The Company has prepared financial statements based on sustained operation as basis, according tothe transactions and matters having occurred actually, and in accordance with the Accounting Standardsfor Business Enterprises – Basic Rules (Issued by the Order No. 33 of the Ministry of Finance, amendedin accordance with the Order No. 76 of the Ministry of Finance), the 42 detailed accounting rules,Guidelines for Application of Accounting Standards for Business Enterprises, Interpretation ofAccounting Standards for Business Enterprises and other relevant regulations issued and amended onFebruary 15, 2006 and afterwards (hereinafter jointly referred to as “Accounting Standards for BusinessEnterprises”), as well as the disclosure provisions of the Preparation Rules for Information Disclosure byCompanies Offering Securities to the Public No.15 – General Provisions on Financial Report (Amendedin 2014) issued by China Securities Regulatory Commission.
According to the relevant provisions of the Accounting Standards for Business Enterprises, theaccounting of the Company is based on the accrual basis. Except for certain financial instruments, themeasurement of the financial statements is based on historical cost. If the asset is impaired, thecorresponding provision for impairment will be made in accordance with relevant regulations.
2. Sustained Operation
The Company had the ability of sustained operation within 12 months since the end of the reportingperiod, and did not have significant matters affecting its sustained operation.V. Important Accounting Policies and Accounting Estimates
Whether the Company is subject to special industrial requirements for disclosure
Yes
Civil engineering construction
Specific accounting policies and accounting estimates remind:
The major business of the company is the civil engineering construction industry, which is subject to the special
industrial requirements for disclosure.1. Statement on Observing Accounting Standards for Business Enterprises
The financial statements prepared by the Company meet the requirements of Accounting Standardsfor Business Enterprises, and reflect the Company’s financial standing as of December 31, 2018 and itsoperating results, cash flow, and other relevant information in 2018 authentically and completely. Inaddition, all material aspects of the financial statements of the Company are in line with the disclosureprovisions regarding financial statements and notes stipulated in the Preparation Rules for InformationDisclosure by Companies Offering Securities to the Public No.15 – General Provisions on FinancialReport (Amended in 2014) issued by China Securities Regulatory Commission.
2. Fiscal Period
From Jan. 1 to Dec. 31 in the Gregorian calendar is one fiscal year.
3. Business Cycle
The Company takes 12 months as a business cycle and uses it as a standard for the liquidity of assets and liabilities.4. Recording CurrencyThe Company adopts RMB as recording currency.
5. Method for Accounting Treatment of Business Combination under and Not under the Same ControlBusiness combination under the same control: The assets and liabilities obtained by the Company from business combination aremeasured as per the book value of the combined party’s assets and liabilities (including the goodwill formed from the final controller’sacquisition of the combined party) on the date of combination in the final controller’s consolidated financial statements. For the balancebetween the book value of net assets obtained from the combination and the book value of combination consideration paid (or the total bookvalue of shares issued), the capital stock premium in capital reserve will be adjusted; and if the capital stock premium in the capital reserve isinsufficient to write down, the retained earnings will be adjusted.
Business combination not under the same control: The assets paid as consideration for business combination and the liabilities incurredor undertaken by the Company on the date of purchasing will be measured as per fair value, and the balance between the fair value and itsbook value will be recorded in the gain or loss of the current period. The Company confirms the balance that the “combination cost” is biggerthan “the fair value shares of the purchased party’s distinguishable net assets obtained from the combination” as goodwill; and records afterchecking the balance that the “combination cost” is smaller than “the fair value shares of the purchased party’s distinguishable net assetsobtained from the combination” in the gain or loss of the current period.
The intermediary expenses incurred for business combination, like audit, legal service, appraisal and consulting, etc., and other directlyrelated expenses will be recorded in the gain or loss of the current period when incurred; the transaction expenses of equity securities issuedfor business combination will be used to write down the equity.
6. Method for Preparation of Consolidated Financial Statements
(1) Principles for determining the scope of consolidated financial statements
The consolidation scope of the Company’s consolidated financial statements is determined based on control. Control means that theCompany has the power to the investee, enjoys variable returns by participating in the relevant activities of the investee, and has the ability touse the power over the investee to affect the amount of the returns. The scope of consolidation includes the Company and all subsidiaries.Subsidiaries refer to the entities controlled by the Company.
The company will conduct a reassessment once the relevant facts and circumstances have changed and the relevant elements involved inthe above definition of control have changed.
(2) Method for Preparation of Consolidated Financial Statements
The Company prepares consolidated financial statements based on itself and each subsidiary’s financial statements, and according toother relevant materials. For preparing consolidated financial statements, the Company deems the whole enterprise group as an accountingsubject, and reflects the enterprise group’s overall financial standing, operating results and cash flow according to the confirmation,measuring and presentation requirements of relevant enterprise accounting standards, and according to uniform accounting policies.
The accounting policies and accounting period of all the subsidiaries incorporated into the consolidation scope of consolidated financialstatements are consistent with those adopted by the Company. If the accounting policies and accounting period adopted by the subsidiariesare inconsistent with those adopted by the Company, then when consolidated financial statements are prepared, necessary adjustments willbe made according to the Company’s accounting policies and accounting period. For the subsidiaries obtained through business combinationnot under the same control, their financial statements will be adjusted based on the fair value of distinguishable net assets on the date ofpurchasing. For subsidiaries obtained through business combination under the same control, their financial statements will be adjusted basedon the book value of their assets and liabilities (including the goodwill formed from the final controller’s acquisition of the subsidiaries) inthe final controller’s financial statements.
The shares belonging to minor shareholders of subsidiaries’ owners’ equity, net gain or loss of current period, and composite benefits ofcurrent period will be listed independently under the owners' equity in consolidated balance sheet, the net profit and total composite benefitin consolidated profit statement respectively. The balance formed from that “the loss of current period shared by subsidiaries’ minorshareholders” exceeds “the shares shared by the minor shareholders in the subsidiaries’ owners’ equity at the beginning of period” will beused to write down minor shareholders’ equity.
① Increase of subsidiaries or businesses
In the reporting period, if subsidiaries or businesses are increased for business combination under the same control, the opening amountin the consolidated balance sheet will be adjusted; the income, expense, and profit of the subsidiaries or businesses from the beginning of thevery period of combination to the end of the reporting period will be incorporated into the consolidated profit statement; the cash flow of thesubsidiaries or businesses from the beginning of the very period of combination to the end of the reporting period will be incorporated intothe consolidated cash flow statement, and meanwhile, relevant items in comparative statements will be adjusted, and the report subjects aftercombination will be deemed as having always existed from the time point when the final controller starts the control.
If it’s available to impose control on invested parties under the same control for reason of additional investment, etc., each partyparticipating in the combination will be deemed to exist and make adjustments according to present state when the final controller starts thecontrol. The equity investments held before obtaining the right to control the combined parties, relevant gain or loss already confirmed from
“the date when original equity is obtained and the date when the combining party and the combined party are under the same control,whichever is later” to the date of combination, other composite benefits, and the changes of other net assets will be used to write down theopening retained benefit of the period of comparative statement or the gain or loss of the current period respectively.
In the reporting period, if subsidiaries or businesses are increased for business combination not under the same control, the openingamount of consolidated balance sheet will not be adjusted; the income, expense and profit of the subsidiaries or businesses from the date ofpurchasing to the end of reporting period will be incorporated into the profit statement respectively; and the cash flow of the subsidiaries orbusinesses from the date of purchasing to the end of reporting period will be incorporated into the cash flow statement.
If it is available to impose control on the invested parties not under the same control for reason of additional investment, etc., then thepurchased parties’ stock equity held before the date of purchasing will be re-measured by the Company as per the fair value of the stockequity on the date of purchasing, and the balance between the fair value and its book value will be recorded in the investment yield of thecurrent period. If the purchased parties’ equity held before the date of purchasing involves other composite benefits under accounting withequity method, as well as changes of other owners’ equity except for net gain or loss, other composite benefit and profit distribution, thenrelevant other composite benefit and changes of other owner’s equity will be converted into the investment yield in the very period to whichthe date of purchasing belongs, excluding the other composite benefits arising from the changes of the net liabilities or net assets of benefitplan measured and set up over again by the invested parties.
② Disposal of Subsidiaries or Businesses
In the reporting period, if the Company disposes some subsidiaries or businesses, then the income, expense and profit of suchsubsidiaries or businesses from the beginning of the period to the date of disposal will be incorporated into the consolidated profit statement;the cash flow of the subsidiaries or businesses from the beginning of period to the date of disposal will be incorporated into cash flowstatement.
If the Company loses the right to control invested parties for disposal of partial equity investments or other reasons,the remained equity investments after disposal will be re-measured by the Company as per their fair value on the datewhen the control right is lost. The balance of “the sum of the consideration obtained from disposal of equity and the fairvalue of the remained stock equity” minus “the sum of the net asset shares enjoyed in original subsidiaries and calculatedcontinuously from the date of purchasing or date of combination according to original shareholding proportion and thegoodwill” will be recorded in the investment yield of the very period when control right is lost. Other composite benefitsrelated to original subsidiaries’ equity investments, or the changes of other owners’ equity except for other compositebenefits and profit distribution, will be converted into the investment yield of the very period when the control right islost, excluding the other composite benefits arising from the changes of the net liabilities or net assets of benefit planmeasured and set up over again by the invested parties.In case of any declination on the shareholding proportion of the Company and herein losing the control rights overits subsidiary arising from the capital increase contributed by other investors, it shall conduct accounting treatment in thelight of the aforesaid principles.If the Company disposes the equity investments in subsidiaries by steps through multiple transactions until losingthe right to control the subsidiaries, and if the clauses, terms and economic influences of various transactions for
disposing the equity investments in the subsidiaries meet one or several of the following circumstances, such multipletransactions will generally be subject to accounting treatment as package transaction:
a. These transactions are concluded simultaneously or in condition of considering mutual influences;b. Only the entirety of these transactions could achieve a complete business result;c. The occurrence of a transaction depends on the occurrence of at least one of the other transactions;d. A transaction is not economical independently, but economical if considered together with othertransactions.If various transactions of disposing the equity investments in subsidiaries until losing the control right belong topackage transaction, the Company will execute accounting treatment of various transactions as a transaction of disposingsubsidiaries until losing control right; but the balance between the price of every disposal before losing control right andthe subsidiaries’ net asset shares enjoyed and corresponding to the investments disposed will be confirmed as othercomposite benefits in the consolidated financial statements, and transferred into the gain or loss of the very period whenthe control right is lost.If various transactions of disposing the equity investments in subsidiaries until losing the control right do not belongto package transaction, then before losing control right, the Company will execute accounting treatment according torelevant policies about partial disposal of equity investments in subsidiaries in condition of not losing control right; ifcontrol right is lost, the accounting treatment will be carried out according to general method for treatment ofsubsidiaries.For the balance between “the long-term equity investments newly obtained from purchasing of minor stock equity”and “the net asset shares to be enjoyed in the subsidiaries according to newly increased shareholding proportion andcalculated continuously from the date of purchasing (or the date of combination)”, the capital stock premium in thecapital reserve in the consolidated balance sheet will be adjusted; if the capital stock premium in the capital reserve is notsufficient to write down, the retained benefit will be adjusted.
For the balance between “the disposal price obtained from disposal of partial long-term equity investments in subsidiaries incondition of not losing control right” and “the net asset shares to be enjoyed in the subsidiaries, corresponding to the disposal of long-termequity investments, and calculated continuously from the date of purchasing or the date of combination”, the capital stock premium in thecapital reserve in the consolidated balance sheet will be adjusted; if the capital stock premium in the capital reserve is not sufficient to writedown, the retained benefit will be adjusted.
7. Classification of Joint Venture Arrangements and Accounting Method of Joint Operations
A joint arrangement is an arrangement of which two or more parties have joint control. TheCompany classifies joint venture arrangements into joint operations and joint ventures in line with therights and obligations in joint venture arrangements. A joint operation refers to a joint arrangementwhereby the Company has rights to the assets, and obligations for the liabilities, relating to thearrangement. A joint venture refers to a joint arrangement whereby the Company has rights to the netassets of the arrangement.
The Company adopts equity method for accounting of investments in joint ventures in line with theaccounting policy described in Note IV. 13, “Long-term Equity Investments Subject to Accounting with
Equity Method”.
As a joint operator, the Company recognizes in relation to its interest in a joint operation: its assets,including its share of any assets held jointly, and its liabilities, including its share of any liabilitiesincurred jointly; its revenue from the sale of its share of the output of the joint operation; its share of therevenue from the sale of the output by the joint operation; and its expenses, including its share of anyexpenses incurred jointly.
When the Company, as a joint operator, invests in or sells assets to a joint operation (such assets donot constitute businesses, the same below), or purchases assets from the joint operation, the Companyonly recognizes the portion of the profits and losses arising from such transactions that is attributable toother participants in the joint operation before such assets are sold to third parties. If such assets aresubject to asset impairment losses stipulated in the Accounting Standards for Business Enterprises No.8of Asset Impairment, etc., in case that the Company invests in or sells assets to the joint operation, theCompany will fully recognize such losses incurred thereof; in case that the Company purchases assetsfrom the joint operation, the Company will recognize its share of such losses incurred thereof.
8. Standard for Determination of Cash and Cash Equivalents
When compiling the cash flow statement, the Company's cash on hand and the deposit, which can beused to make payment at any time, should be confirmed as the cash. The investment, having four featuresof short duration (expired within three months from the acquisition date), strong mobility, being easy tobe changed into known cash, low value change risk at the same time, should be confirmed as the cashequivalent.
9. Foreign-Currency Businesses and Conversion of Foreign-Currency Statements
Foreign-Currency Businesses
Foreign-currency businesses are converted into RMB for book-keeping with the approximateexchange rate of the spot exchange rate on transaction date as the exchange rate for conversion. Thebalance of foreign-currency monetary items on the date of balance sheet will be converted with the spotexchange rate on the date of balance sheet, and the balance of exchange arising from hereof will berecorded in the gain or loss of the current period, except for that the balance of exchange arising fromspecial foreign-currency loan related to the purchasing and construction of assets meeting capitalizationconditions is treated in line with the principle for capitalization of borrowing costs.
Conversion of Foreign-Currency Statements
The asset and liability items in the balance sheet will be converted with the spot exchange rate on thedate of balance sheet; for the owner’s equity, except for “undistributed profit”, all the other items will beconverted with the spot exchange rate when they are incurred. The revenue item and the expense item inthe Profit Statement are converted with the approximate exchange rate of the spot exchange rate ontransaction date.
For disposal of foreign business operation, the balance from conversion of foreign-currency financialstatements related to such foreign operation shall be transferred from owner’s equity to the gain or loss ofthe very period of disposal.
10. Financial Instruments
Financial instruments include financial assets, financial liabilities and equity instruments.(1) Classification of Financial InstrumentsWhen initially confirmed, financial assets and financial liabilities are classified into: Financial assetsor financial liabilities measured with fair value and having the change of fair value recorded in the gain orloss of current period, including tradable financial assets or financial liabilities, and financial assets orfinancial liabilities directly specified to measure with fair value and having the change of fair valuerecorded in the gain or loss of the current period; held-to-maturity investments; accounts receivable;available-for-sale financial assets; and other financial liabilities, etc.
(2) Confirmation Basis and Measuring Method of Financial Instruments①Financial assets (financial liabilities) measured with fair value and having the change of fair valuerecorded in the gain or loss of current periodWhen they are obtained, fair value (after deduction of cash dividends already declared but not paid yet, orbond interests with interest payment period expired but having not been acquired) will be taken as initialconfirmed amount, and relevant transaction expenses will be recorded in the gain or loss of the currentperiod.
During the holding period, the interests or cash dividends obtained will be confirmed as investmentyield, and at the end of period, the change of fair value will be recorded in the gain or loss of the currentperiod.
During disposal, the balance between the fair value and initial amount entered into account will beconfirmed as investment yield, and meanwhile, the gain or loss on change of fair value will be adjusted.
② Held-to-maturity investments
When they are obtained, the sum of fair value (after deduction of bond interests with interestpayment period expired but having not been acquired) and relevant transaction expanses will be taken asinitial confirmed amount.
During the holding period, interest income will be calculated and confirmed as per amortized costand actual interest rate, and recorded in investment yield. The actual interest rate will be determined whenbeing obtained, and maintained unchanged during the predicted survival period or applicable shorterperiod.
During disposal, the balance between the acquisition price and the book value of such investmentwill be recorded in investment yield.
③ Accounts receivable
For the creditor’s rights receivable formed from the Company’s sale of goods or rendering of laborservices, and the other enterprises’ creditor’s rights held by the Company and excluding the debtinstruments having an offer in active market, including accounts receivable and other accounts receivable,etc., the contract or agreement price receivable from purchasers will be taken as the initially confirmedamount; if the receivables have financing nature, they will be initially confirmed as per their presentvalue.
In case of recovery or disposal, the balance between the acquisition price and the book value ofaccounts receivable will be recorded in the gain or loss of the current period.
④ Available-for-sale financial assets
When they are acquired, the sum of fair value (after deduction of cash dividends already declared butnot paid yet, or bond interests with interest payment period expired but having not been acquired) andrelevant transaction expenses will be taken as initially confirmed amount.
During the holding period, the interests or cash dividends obtained will be confirmed as investmentyield. At the end of period, they will be measured as per fair value, and the change of fair value will berecorded in other composite benefit. However, the equity instrument investments which have no offer inactive market and of which the fair value cannot be reliably measured, and the derived financial assetswhich are linked with the equity instruments and settled through delivery of the equity instruments will bemeasured as per cost.
During disposal, the balance between the acquisition price and the book value of financial assets willbe recorded in the gain or loss of investment; meanwhile, the amount of corresponding disposal part andoriginally recorded in the accumulative amount of change in the fair value of other composite benefitdirectly will be recorded in the gain or loss of the current period.
⑤ Other financial liabilities
The sum of their fair value and relevant transaction expenses will be taken as initially confirmedamount. The amortized cost will be adopted for follow-up measurement.
(3) Confirmation Basis and Measurement Method of Financial Assets Transferred
If the Company transfers financial assets, and transfers nearly all risks and rewards on the ownershipof such financial assets to the transfer-in party, the Company will terminate the confirmation of thefinancial assets; if the Company reserves nearly all risks and rewards on the ownership of the financialassets, the Company will not terminate the confirmation of such financial assets.
When judging whether the transfer of financial assets meets the above-mentioned conditions forterminating the confirmation of financial assets, the Company will follow the “Substance Over Form”principle. The Company distinguishes the transfer of financial assets into overall transfer and partialtransfer of financial assets. If the overall transfer of financial assets meets the conditions for terminationof confirmation, the balance of the following two amounts will be recorded in the gain or loss of thecurrent period:
① The book value of the financial assets transferred;
② The sum of the consideration received for the transfer and the accumulative amount of change inthe fair value originally recorded in the owner’s equity directly (involving the circumstance that thefinancial assets transferred are available-for-sale financial assets);
If partial transfer of financial assets meets the conditions for termination of confirmation, the overallbook value of the financial assets transferred will be amortized between the confirmation-terminated partand non-confirmation-terminated part as per respective relative fair value, and the balance of thefollowing two amounts will be recorded in the gain or loss of the current period:
① The book value of the confirmation-terminated part;
② The consideration for the confirmation-terminated part and the amount of correspondingconfirmation-terminated part in the accumulative amount of change in the fair value originally recordedin the owner's equity directly (involving the circumstance that the financial assets transferred areavailable-for-sale financial assets);
If the transfer of financial assets does not meet the conditions for termination of confirmation, thefinancial assets will be confirmed continuously, and the consideration received will be confirmed as afinancial liability.
(4) Conditions for Terminating the Confirmation of Financial Liabilities
If the current obligation of financial liabilities is rescinded completely or partially, the confirmationof such financial liabilities or part of them will be terminated; if the Company signs an agreement withcreditors to replace the existing financial liabilities by means of undertaking new financial liabilities, andthe contract clauses for new financial liabilities are substantially different from the contract clauses for
existing financial liabilities, the confirmation of the existing financial liabilities will be terminated, andnew financial liabilities will be confirmed at the same time.
If all or partial contract clauses for existing financial liabilities are amended substantially, theconfirmation of the existing financial liabilities or part of them will be terminated, and meanwhile, thefinancial liabilities after amendment of clauses will be confirmed as a new financial liability.
If the confirmation of financial liabilities is terminated completely or partially, the balance betweenthe book value of the financial liabilities of which the confirmation is terminated and the considerationpaid (including non-cash assets transferred out or the new financial liabilities undertaken) will berecorded in the gain or loss of the current period.
If the Company buys back partial financial liabilities, then on the date of buyback, the Company willdistribute the overall book value of the financial assets according to the relative fair value of the partconfirmed continuously and the confirmation-terminated part. The balance between the book valuedistributed to the confirmation and the consideration paid (including non-cash assets transferred out or thenew financial liabilities undertaken) will be recorded in the gain or loss of the current period.
(5) Method for Determining the Fair Value of Financial Assets and Financial Liabilities
For financial instruments having an active market, their fair value will be determined as per the offerin the active market. For financial instruments not having an active market, their value will be determinedby estimation technique. In case of estimation, the Company will adopt estimation techniques which areapplicable under present circumstances and supported by sufficient available data and other information,select input values consistent with the asset or liability characteristics considered by market participantsin the transactions of relevant assets or liabilities, and preferentially use relevant observable input values.Non-observable input values will be used only under the circumstance that relevant observable inputvalues cannot be obtained or such values obtained are not practicable.
(6) Method for Testing and Accounting Treatment of Depreciation of Financial Assets (ExcludingAccounts Receivable)
Except for the financial assets measured with fair value and having the change of fair value recordedin the gain or loss of the current period, the Company checks the book value of financial assets on thedate of balance sheet. If some objective evidence proves that some financial asset depreciates, theCompany will withdraw depreciation reserve for this financial asset.
① Depreciation reserve of available-for-sale financial assets:
If the fair value of available-for-sale financial assets drops severely at the end of period, or suchtrend of drop is predicted to be non-temporary after comprehensively considering various relevant factors,the Company will confirm that the available-for-sale financial assets depreciate, will transfer out theaccumulative losses arising from the drop of fair value originally recorded in the owner’s equity directly,and confirm the impairment loss.
For available-for-sale debt instruments with impairment loss confirmed, if in a later fiscal period, thefair value rises and the rise is objectively related to the matters occurring after confirmation of originalimpairment loss, then the originally confirmed impairment loss will be transferred back and recorded inthe gain or loss of the current period.
The impairment loss on available-for-sale equity instrument investments will not be transferred backthrough gain or loss.
② Impairment reserve for held-to-maturity investments:
Held-to-maturity investments
11. Notes Receivable and Accounts Receivable(1) Accounts Receivable with Significant Single Amount and Having Bad Debt Reserve WithdrawnIndependently:
| Judgment basis or amount standard of significant single amount | The Company recognizes accounts receivable for a single project with the balance ≥ RMB 10 million and other accounts receivable from a single relevant unit with the balance ≥ RMB 2 million as accounts receivable with significant single amount. |
| Method for withdrawal of bad debt reserve with significant single amount and withdrawn independently: | The Company will carry out impairment test independently for accounts receivable with significant single amount. If such accounts receivable are proved impairing through the test, the Company will determine the impairment loss and withdraw bad debt reserve according to the balance that the present value of its future cash flow is lower than its book value. The accounts receivable not impairing as proved in single test, will, together with the accounts receivable with insignificant single amount, be divided into many portfolios according to similar credit risk characteristics. Then according to certain proportion of the balance on the date of balance sheet of the portfolios of these accounts receivable, the Company will calculate and determine impairment loss and withdraw bad debt reserve. |
(2) Accounts Receivable with Bad Debt Reserve Withdrawn as per the Portfolios Classified Based on Credit RiskCharacteristics:
| Portfolio name | Method for withdrawal of bad debt reserve |
| Account aging portfolio | Account age analysis method |
| Combination of affiliated parties within the range of consolidation |
Those with bad debt reserve withdrawn by means of account analysis in the portfolios:
√ Apply □ Not Apply
| Account age | Withdrawal rate of accounts receivable | Withdrawal rate of other receivables |
| Within 1 year (inclusive) | 5.00% | 5.00% |
| 1-2 years | 10.00% | 10.00% |
| 2-3 years | 30.00% | 30.00% |
| 3-4 years | 50.00% | 50.00% |
| 4-5 years | 80.00% | 80.00% |
| More than 5 years | 100.00% | 100.00% |
Those with bad debt reserve withdrawn by means of percentage of total accounts receivable outstanding:
√ Apply □ Not ApplyThose with bad debt reserve withdrawn by other means:
√ Apply □ Not Apply
(3) Accounts Receivable with Insignificant Single Amount but Having Bad Debt Reserve Withdrawn Separately:
The Company needs to comply with disclosure requirements of the Guidelines No.7 of the Shenzhen Stock Exchange on IndustryInformation Disclosure — Civil Engineering of Listed Companies.
| Reasons for independent withdrawal of bad debt reserve | On the date of balance sheet, for the other accounts receivable with insignificant single amount and having obvious sign of impairment, the Company will determine impairment loss and withdraw bad debt reserve according to the balance that the present value of their future cash flow is lower than their book value. |
| Method for withdrawal of bad debt reserve | On the date of balance sheet, the Company will execute impairment test of the accounts receivable with insignificant single amount but having bad debt reserve withdrawn separately. If such accounts receivable are proved impairing during the test, the Company will determine impairment loss and withdraw bad debt reserve according to the balance that the present value of their future cash flow is lower than their book value. |
12. Inventories
Whether the Company needs to comply with disclosure requirements of special industriesYesCivil Engineering
(1) Classification of InventoriesInventories mainly include raw materials, engineering construction, merchandise inventory,work-in-process, low value consumables, etc.
(2) Method for Pricing of Inventories DeliveredDuring the delivery of inventory, it is priced in terms of the method of weighted mean.(3) Basis for Determining the Net Realizable Value of Different Types of InventoriesFor commodity stocks directly for sale, such as finished products, merchandise inventory, andmaterials for sale, etc., their net realizable value is confirmed during normal production and operation asper the amount after deduction of estimated selling expenses and relevant taxes from the estimated salesprice of such inventories; for material stocks needing processing, their net realizable value will bedetermined during normal production and operation as per the amount after deduction of costs estimatedto incur until completion of work, estimated selling expenses and relevant taxes from the estimated salesprice of finished products; for the inventories held for executing sales contract or labor service contract,their net realizable value will be calculated on the basis of contract price. If the quantity of inventoriesheld is more than the quantity ordered under sales contract, the net realizable value of the excessiveinventory will be calculated based on general sales price.
At the end of period, inventory depreciation reserve is withdrawn as per single inventory item;however, for plentiful inventories of relatively low unit price, inventory depreciation reserve will bewithdrawn by the type of inventory; for inventories related to the product series produced and sold in asame region, having the same or similar final use or objective, and difficult to measure by separating fromother items, inventory depreciation reserve will be withdrawn in a consolidated way. Except for that someconclusive evidence proves abnormality of market price on the date of balance sheet, the net realizablevalue of inventory items will be determined based on the market price on the date of balance sheet.
The net realizable value of inventory items at the end of this period will be determined based on themarket price on the date of balance sheet.
(4) Perpetual inventory taking system is adopted for inventory taking system.
(5) Method for Amortization of Low-Value Easily-Consumed Articles and Packing
One-off writing-off method is adopted for low-value easily-consumed articles; one-off writing-offmethod is adopted for packing.
13. Assets Held for Sale
The Company classifies the non-current assets or disposal group meeting the following conditions asassets held for sale:
(1) Based on the practice of selling such assets or disposal groups in similar transactions, they can besold immediately under current conditions;
The sale is very likely to happen, that is, the Company has already made a resolution on a sales planand obtained an assuring purchase commitment and it is expected that the sale will be completed withinone year. Where regulations require the approval of relevant power organ or regulatory department of theCompany before they can be sold, the approval has been obtained.
14. Long-term Equity Investments
(1) Standards for Judgment of Common Control and Significant Influences
Common control indicates the jointly-owned control on some arrangement as per relevant provisions,and relevant activities of such arrangement must be unanimously agreed by the participants sharing thecontrol right before being decided. If the Company and other joint operators impose common control oninvested units and have the right to the invested units’ net assets, the invested units will be the Company’sjoint ventures.
Significant influences indicate having the right to participate in making decisions on an enterprise’sfinancial affairs and business operation, but could not control or jointly control together with other partiesthe making of these policies. If the Company could impose significant influences on invested units, theinvested units will be the Company’s associates.
(2) Determination of Initial Investment Cost
① Long-term Equity Investments Formed from Business Combination
Business combination under the same control: If the Company pays combination consideration bypaying cash, transferring non-cash assets or undertaking debts and issuing equity securities, the Companywill take the book value shares of the combined party’s owners’ equity obtained on the date ofcombination in the final controller’s consolidated financial statements as the initial investment cost oflong-term equity investments. If the Company could impose control on invested units under the samecontrol for reason of additional investment, etc., the Company will confirm on the date of combination the
initial investment cost of long-term equity investments as per the book value shares of the combinedparty’s net assets to be enjoyed in the final controller’s consolidated financial statements aftercombination. For the balance between “the initial investment cost of long-term equity investments on thedate of combination” and “the sum of the book value of long-term equity investments before combinationand the book value of newly paid consideration for further obtaining shares on the date of combination”,the Company will adjust the capital stock premium; and if the capital stock premium is not enough towrite down, the Company will write down the retained benefits.
Business combination not under the same control: The Company takes the combination costdetermined on the date of purchasing as the initial investment cost of long-term equity investments. If theCompany could impose control on invested units not under the same control for reason of additionalinvestment, etc., the Company will take the sum of the book value of originally held equity investmentsand the newly increased investment cost as the initial investment cost of long-term equity investmentswhich are subject to accounting with cost method instead.
② Long-term Equity Investments Obtained by Other Means
For long-term equity investments obtained by means of payment in cash, the purchasing priceactually paid will be taken as initial investment cost.
For long-term equity investments obtained by issuing equity securities, the fair value of the equitysecurities issued will be taken as initial investment cost.
In the precondition that non-monetary asset exchange has business nature, and the fair value ofexchanged-in or exchanged-out assets could be measured reliably, the fair value of exchanged-out assetsand relevant expenses payable will be determined as the initial investment cost of the long-term equityinvestments obtained from non-monetary assets exchange, unless some conclusive evidence proves thatthe fair value of exchanged-in assets is more reliable; for non-monetary assets exchange not meeting theabove-mentioned precondition, the book value of exchanged-out assets and relevant taxes payable shallbe taken as the initial investment cost of exchanged-in long-term equity investments.
For long-term equity investments obtained through debt reorganization, their initial investment costwill be determined based on fair value.
(3) Follow-up Measurement and Gain or Loss Confirmation Method
① Long-term Equity Investments Subject to Accounting with Cost Method
The Company adopts cost method for accounting of long-term equity investments in subsidiaries.Except for the cash dividends or profits included in the price or consideration actually paid wheninvestments are obtained, and already announced but not paid, the Company confirms the investmentyield of the very period according to the cash dividends or profits enjoyed by the Company and declaredto grant by invested units.
② Long-term Equity Investments Subject to Accounting with Equity Method
The Company adopts equity method for accounting of long-term equity investments in associatesand joint ventures. For the balance that the initial investment cost is bigger than the fair value shares ofinvested units’ distinguished net assets which shall be enjoyed by the Company, the Company will notadjust the initial investment cost of long-term equity investments; for the balance that the initialinvestment cost is smaller than the fair value shares of invested units’ distinguished net assets which shallbe enjoyed by the Company, the Company will adjust the book value of long-term equity investments andrecord it in owner’s equity.
When confirming the shares of invested units’ net gain or loss to be enjoyed, the Company willadjust and confirm the invested units’ net profit based on the fair value of the invested units’distinguishable net assets when investments are obtained, and according to the Company’s accounting
policies and fiscal period. If the invested units prepare consolidated financial statements during theholding of investments, the accounting will be conducted based on the amount attributing to the investedunits in the net profit in the consolidated financial statements, other composite benefits, and changes ofother owner’s equity.
For the gain or loss on the non-realized internal transactions between the Company and jointly-runenterprises/ joint ventures, the part attributing to the Company will be calculated as per the proportion tobe enjoyed, will be written down, and on this basis, the investment yield will be confirmed. The gain orloss on non-realized internal transactions done with invested units will be fully confirmed if belonging toasset impairment loss. During the period of holding investment, as for the invested entity preparingconsolidated financial statements, carry out accounting based on the invested entity’s attributable amountof the net profit, other comprehensive income and other changes in equity in the consolidated financialstatements.
The unrealized gains or losses on internal transaction occurring among the company, associates andjoint ventures will confirm the investment income on the basis of offsetting the company’s attributablepart calculated according to the entitlement proportion. The unrealized losses on internal transactionoccurring in the invested entity belonging to assets impairment loss will be confirmed in full amount. Ifthe assets of investment or asset-sale transactions occurring among the company, associates and jointventures constitute the business, the accounting treatment shall be carried out according to the relatedpolicies disclosed in “IV. (4) Method for Accounting Treatment of Business Combination under and Notunder the Same Control” and “IV. (5) Method for Preparation of Consolidated Financial Statements”.
When the Company determines to share the losses of the invested entity, it will be treated in theorder as follows: firstly, the book value of long-term equity investments will be offset. Secondly, if thebook value of the long-term equity investment is not sufficient to be offset, the recognition of losses ofthe investment will be continued to the extent of the book value of other long-term rights and interestswhich substantially form the net investment made to the invested entity, and the book value of long-termaccounts receivable will be offset. Finally, after the above-mentioned treatment, if the Company stillundertakes extra obligations according to the provisions of investment contract or agreement, theCompany will confirm accrued liabilities with obligations predicted to undertake, and record them in theinvestment loss of the current period.
③ Disposal of Long-Term Equity Investments
For disposal of long-term equity investments, the balance between their book value and actualacquisition price will be recorded in the gain or loss of the current period.
For long-term equity investments with equity method adopted for accounting, when suchinvestments are disposed, the part originally recorded in other composite benefits will be subject toaccounting treatment according to corresponding proportion and on the same basis adopted by investedunits to directly dispose relevant assets or liabilities. The owner’s equity confirmed for change of otherowner’s equity except for net gain or loss, other composite benefit and profit distribution of invested unitswill be carried forward into the gain or loss of the current period, excluding the other composite benefitsarising from the change of net liabilities or net assets of invested units’ new measurement and setting ofbenefit plan.
If the Company loses common control or significant influences on invested units for reason ofdisposal of partial equity investments, etc., the remained equity after disposal will be subject toaccounting according to the standards for the confirmation and measurement of financial instruments, andthe balance between the fair value and book value of such remained equity investments on the date whenthe Company losing common control or significant influences will be recorded in the gain or loss of the
current period. Other composite benefits confirmed for accounting with equity method of original equityinvestments will be subject to accounting treatment with the same basis adopted by invested units todirectly dispose relevant assets or liabilities when the accounting with equity method is terminated. Theowner’s equity confirmed for change of other owner’s equity except for invested parties’ net gain or loss,other composite benefit and profit distribution will be totally transferred in the gain or loss of the currentperiod when the accounting with equity method is terminated.
In case the control right on the invested unit is deprived due to disposal of part of equity investment,increase of investment by other investment parties on subsidiaries causing decrease of holding proportionof the company, when preparing certain financial statement, the residual equity shall be checked by equitymethod if having common control or major effect on invested unit, and adjusted as the residual equity ischecked by the equity method from being obtained; If the remaining equity cannot exert joint control orsignificant influence on the invested unit, it shall take accounting treatment according to the relevantprovisions of financial tools and measurement rules, and the difference between the fair value and bookvalue on the date of losing control shall be included in the current profits and losses.
If the equity disposed is obtained from business combination for reason of additional investment,and when individual financial statements are prepared,
cost method or equity method is adopted for accounting of the remained equity after disposal, theother composite benefits and other owner’s equity confirmed for accounting with equity method of theequity investments held before the date of purchasing will be carried forward by proportion; if theremained equity after disposal is subject to accounting treatment according to the standards forconfirmation and measurement of financial instruments, the other composite benefits and other owner’sequity will be carried forward completely.
15. Investment Real Estate
Investment real estate measurement modelCosting accountingMethod of depreciation or amortization
The company's investment real estate includes the land use right held and prepared to transfer afterincrement, the buildings already leased (including the buildings used for leasing after completion ofself-construction or development activities, and buildings in construction or development and to be usedfor leasing in future).
The Company adopts cost mode to measure the existing investment real estates. For investment realestate measured with cost mode – the buildings used for leasing, the Company will adopt the depreciationpolicy, which is the same for fixed assets, and for the land use right for leasing, the Company will adoptthe amortization policy which is the same for intangible assets.
16. Fixed Assets1. Fixed asset recognition conditions
Fixed assets indicate the tangible assets held for producing goods, rendering labor services, leasing or operation management, and having aservice life of more than one fiscal year. No fixed asset may be recognized unless it simultaneously meets the conditions as follows:
(1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise;(2) The cost of the fixed asset can be measured reliably.
2. Depreciation method for various fixed assets
| Type | Depreciation method | Depreciation life (Year) | Salvage rate (%) | Annual depreciation rate (%) |
| House and buildings | Straight-line method | 20 | 5 | 4.75 |
| Mechanical equipment | Straight-line method | 10 | 5 | 9.5 |
| Transportation equipment | Straight-line method | 7 | 5 | 13.57 |
| Electronic equipment and other equipment | Straight-line method | 3-5 | 5 | 19.00-31.67 |
3. Recognition basis and valuation method for fixed assets under financing lease
Where the leasing agreement signed between company and the lessor specifies either of the conditions as follows, the lease will berecognized as a finance lease:
(1) The ownership of the leasing asset belongs to this company at the expiration of the lease;(2) Company has the option to buy the asset at a price to be far lower than the fair value of the asset at the date when the option becomesexercisable;(3) The lease term covers the major part of the use life of the leased asset;(4) The present value of the minimum lease payments on the lease beginning date does not have too large differences with the fair value ofthe asset.On the starting date of the Company’s leasing, the fair value of leased assets and the present value of the minimum rent payment, whicheveris lower, will be taken as the entry value of leased-in assets, and the minimum rent payment will be taken as the entry value of long-termaccounts payable, and the balance will be taken as non-confirmed financing cost.
17. Construction in Progress
Whether the company is required to comply with special industry disclosure requirementsYesCivil Engineering Construction
For construction in progress, the necessary expenditure incurred for making the constructed assets reach
the predetermined usable state will be taken as the entry value of the fixed assets. If the constructed fixedassets have reached the predetermined usable state, but the completion settlement has not been handled,then since the date when such assets reach the predetermined usable state, the Company will transfer suchassets into fixed assets as per estimated value and based on engineering budget, construction cost, oractual cost of engineering, etc., and will withdraw fixed asset depreciation according to the Company’spolicy for fixed asset depreciation; after handling of completion settlement, the Company will adjustoriginal temporarily estimated value as per actual cost, but will not adjust originally withdrawndepreciation amount.
18. Borrowing Costs
Borrowing costs include loan interest, discount or premium amortized, auxiliary expense, andexchange balance arising from foreign-currency loan, etc.
1. Principle for Confirmation of Borrowing Cost Capitalization
The Company’s borrowing costs, if available to directly attribute to the construction or production ofassets meeting capitalization conditions, will be capitalized and recorded in the cost of relevant assets;and other borrowing costs will be confirmed as expenses and recorded in the gain or loss of current periodas per their amount incurred when they are incurred.
Assets meeting capitalization conditions indicate the fixed assets which need to experience quite along term of construction or production activities before reaching the predetermined usable or salablestate, as well as investment real estates and inventories, etc.
Borrowing costs will be capitalized if simultaneously meeting the following conditions:
(1) Asset expenditure has occurred, including the payment in cash for purchasing and constructionor production of assets meeting capitalization conditions, transfer of non-cash assets, or undertaking ofinterest-bearing debts;
(2) Borrowing costs have occurred;
(3) The purchasing and construction or production activities necessary for making assets reachpredetermined usable or salable state have started.
2. Period for capitalization of borrowing costs
Capitalization period indicates the period of from the time point when capitalization of borrowingcosts starts to the time point when capitalization stops, excluding the period when the capitalization ofborrowing costs is suspended.
If the assets purchased and constructed or produced and meeting capitalization conditions reach thepredetermined usable or salable state, the capitalization of borrowing costs will stop.
If some items of the assets purchased and constructed or produced and meeting capitalizationconditions are completed separately and could be used independently, the capitalization of borrowingcosts for such assets will stop.
If each part of the assets purchased and constructed or produced is completed respectively, butcannot be used or sold until the whole assets are completed, the capitalization of borrowing costs may bestopped when the assets are totally completed.
3. Period for suspension of capitalization
If the assets meeting capitalization conditions are broken abnormally during purchasing andconstruction or production process, and the suspension lasts for more than 3 months successively, thecapitalization of borrowing costs will be suspended; if such suspension is a necessary procedure formaking the assets purchased and constructed or produced and meeting capitalization conditions reach thepredetermined usable state or salable state, the capitalization of borrowing costs will continue. Theborrowing costs occurring during suspension period will be confirmed as gain or loss in the current period,and the capitalization of borrowing costs will continue after the construction and purchasing orproduction activities of such assets restart.
4. Method for calculation of borrowing costs capitalization rate and capitalized amount
For the special loan obtained for purchasing and construction or production of assets meetingcapitalization conditions, the capitalized amount of borrowing costs will be determined as per the amountafter “the borrowing costs actually incurred in the very period of special loan” minus “the interest incomeobtained from bank deposit or the investment yield obtained from temporary investment of the non-used
loan fund”.
For general loans occupied for purchasing and construction or production of assets meetingcapitalization conditions, the borrowing costs amount to be capitalized of general loans shall be calculatedand determined as per the “weighted mean of asset expenditure that accumulative asset expenditureexceeds the special loan” multiplied by the capitalization rate of general loan. The capitalization rate isgenerally calculated and determined as per the weighted mean interest rate of general loan.
19、Biological Assets
20、Oil and Gas Assets
21. Intangible assets
Intangible assets refer to identifiable non-monetary assets without physical form owned or controlledby the Company. The intangible assets of the Company mainly include land use right and softwareroyalty.
1. Pricing Method of Intangible Assets
The Company initially measures the intangible assets as per the cost when they are acquired.
The cost of purchased intangible assets includes purchasing price, relevant taxes, and otherexpenditures directly for making the assets reach the predetermined use. If the price for purchasingintangible assets is delayed in payment by exceeding normal credit conditions, and the intangible assetshave financing nature substantially, the cost of intangible assets will be determined based on the presentvalue of purchasing price.
As for the intangible assets obtained from debt reorganization and used by debtors for repaying debts,their entry value will be determined based on the fair value of such intangible assets, and the balancebetween the book value of reorganized debts and the fair value of the intangible assets used for repayingdebts will be recorded in the gain or loss of the current period.
In the precondition that non-monetary asset exchange has the essence of commerce, and the fairvalue of exchanged-in or exchanged-out assets could be measured reliably, the entry value of theintangible assets obtained from non-monetary asset exchange will be determined based on the fair valueof exchanged-out assets, unless conclusive evidence proves that the fair value of exchanged-in assets ismore reliable; for the non-monetary asset exchange not meeting the above-mentioned precondition, thebook value of exchanged-out assets and relevant taxes payable will be taken as the cost of exchanged-inintangible assets, and the gain or loss won’t be confirmed.
The Company analyzes and judges the service life of intangible assets when obtaining them.
Intangible assets with limited service life are amortized with straight-line method within the periodwhen they bring about economic benefits for the enterprise; if it’s impossible to predict the period whenthe intangible assets could bring about economic benefits to the enterprise, the intangible assets will be
deemed to have uncertain service life, and won’t be amortized.
2. Estimate on the service life of intangible assets with limited service life:
| Items | Service life | Amortization method |
| Software royalty | 5 years | Straight-line method |
| Land use right | 50 years | Straight-line method |
At the end of every year, the Company checks the service life and amortization method of theintangible assets with limited service life. As checked, the service life and amortization method ofintangible assets at the end of this year were not different from previous estimates.
3. Concrete Standard for Division of Research Stage and Development Stage
The Company’s expenditure for internal research and development projects is divided into theexpenditure at research stage and expenditure at development stage.
Research stage: The stage of unique and planned investigation and research activities conducted forobtaining and understanding new scientific or technological knowledge.
Development stage: The stage of applying research findings or other knowledge to some plan ordesign, in order to produce new or substantially improved materials, devices and products, etc. beforecommercial production or use.
4. Concrete Conditions for Capitalization of Expenditure at Development Stage
The expenditure at development stage of internal research and development projects will beconfirmed as intangible assets when simultaneously meeting the following conditions:
(1) It is technically feasible to complete the intangible assets and make them available for use orsale;
(2) The Company has the intent to complete, use or sell the intangible assets;
(3) The way by which intangible assets produce economic benefit could prove the usability of suchintangible assets, including proving that the products produced with such intangible assets have markets,or such intangible assets have markets, and intangible assets would be used internally;
(4) The Company has sufficient technical, financial resources and other resources to support thecompletion of the development of such intangible assets, and the Company has the ability to use or sellsuch intangible assets.
(5) The expenditure attributing to the development stage of such intangible assets could be measuredreliably.
22. Long-term Asset Impairment
If there is any sign of impairment in long-term equity investments, investment real estates measuredby the cost model, fixed assets, construction in progress, intangible assets with finite service life and other
long-term assets at the balance sheet date, an impairment test will be made. If the result of impairmenttest proves that the recoverable amount of assets is lower than their book value, the depreciation reservewill be withdrawn as per their balance and recorded in the impairment loss. The recoverable amountindicates the net amount after the fair value of assets minus the disposal expenses, and the present valueof predicted future cash flow of the assets, whichever is higher. Asset depreciation reserve is calculatedand confirmed based on single assets. If it is difficult to estimate the recoverable amount of single assets,the recoverable amount of asset portfolio will be determined as per the asset portfolio to which the assetsbelong. Asset portfolio indicates the minimum asset group which could independently produce cashinflows.
Goodwill will be subject to impairment test at least at the end of every year.The Company carries out impairment test of goodwill, and amortizes the book value of the goodwillformed from business combination to relevant asset group by reasonable means since the date ofpurchasing; if it is difficult to amortize the book value to relevant asset group, the Company will amortizeit to relevant asset group, the Company will amortize it to relevant asset group portfolio. When the bookvalue of goodwill is amortized to relevant asset group or asset group portfolio, the Company will executeamortization as per the proportion of the fair value of each asset group or asset group portfolio to the totalfair value of relevant asset group or asset group portfolio. If it is difficult to measure the fair value reliably,the Company will execute amortization as per the proportion of the book value of each asset group orasset group portfolio to the total book value of relevant asset group or asset group portfolio.
When impairment test is carried out for relevant asset groups or asset group portfolios includinggoodwill, if the asset groups or asset group portfolios relevant to goodwill have the sign of impairment,the Company will carry out impairment test of the asset group or asset group portfolio excluding goodwill,calculate recoverable amount, compare it with relevant book value, and confirm correspondingimpairment loss. And then conduct impairment test on asset groups or asset group combination withgoodwill, compare book values of relevant asset groups or asset group combination (including the bookvalue of amortized goodwill) with recoverable amounts, if the recoverable amounts of relevant assetgroups or asset group combination are lower than their book values, the impairment loss of goodwill willbe recognized. Once any loss of asset impairment is recognized, it shall not be turned back in the futureaccounting period.
23. Long-term Deferred Expenses
Long-term deferred expenses indicate various expenses having been incurred, to be shared in presentperiod and later periods, and having an amortization period of more than one year.
(1) Amortization Method
Long-term deferred expenses will be averagely amortized within the benefit period;
(2) Amortization Life
It shall be determined as agreed in contracts or during the expected benefit period.
24. Employee Compensation1. Accounting Method of Short-Term Remuneration
During the fiscal period when employees provide services for the Company, the Company confirmsthe short-term remuneration incurred actually as liabilities, and records them in the gain or loss of the
current period or the cost of relevant assets.
For the social insurance premiums and housing fund paid by the Company for employees, the tradeunion outlay and employee education outlay withdrawn as per regulations, the Company calculates anddetermines corresponding amount of employees’ remuneration as per the withdrawal basis andwithdrawal proportion regulated during the fiscal period when employees provide services for theCompany.
If employees’ welfare expense is non-monetary welfare and could be measured reliably, they will bemeasured as per fair value.
2. Accounting Method of Post-Demission Welfare
Defined contribution plans
As for the basic pension insurance and unemployment insurance paid by the Company foremployees according to relevant provisions of local government, the amount payable will be calculated asper the base amount and proportion of payment regulated by local place and recorded in the gain or lossof the current period or the cost of relevant assets during the fiscal period when the employees provideservices for the Company.
3. Accounting Method of Dismissal Welfare
If being unavailable to unilaterally revoke the dismissal welfare provided for rescission of laborrelationship plan or staff cut-down suggestions, or when confirming the costs or expenses related toreorganization involving the payment of dismiss welfare (whichever is earlier), the Company will confirmthe employee compensation liabilities arising from dismiss welfare, and record them in the gain or loss ofthe current period.
4. Accounting Method of Other Long-term Welfares
Other long-term welfares provided by the company to employees in accordance with the defined contribution plans shall be subject toaccounting treatment in accordance with the defined contribution plans; otherwise shall be subject to accounting treatment in accordancewith the defined benefit plan.
25. Accrued Liabilities
1. Standard for Confirmation of Accrued Liabilities
If the obligations related to the contingencies like lawsuits, debt guarantees, loss contracts,reorganization matters, etc. simultaneously meet the following conditions, the Company will confirmsuch obligations as accrued liabilities:
(1) The obligations are current obligation undertaken by the Company;
(2) The implementation of such obligations will probably induce that economic benefits flow out ofthe Company;
(3) The amount of such obligations could be measured reliably.
2. Measures for Measurement of Various Accrued Liabilities
The Company initially measures the accrued liabilities as per the optimum estimated amount ofexpenditures necessary for implementation of relevant current obligations.
When determining the optimum estimated amount, the Company comprehensively considers therisks related to contingencies, uncertainty, time value of money, and other factors. If the time value ofmoney has significant influences, the optimum estimated amount will be determined after discountingwith relevant future cash outflow.
The optimum estimated amount is treated by the following circumstances respectively:
If the expenditure needed has a continuous scope (or range), and the possibility for various results tooccur is the same within this scope, then the optimum estimated amount will be determined as per themiddle value of this scope, namely the average of the upper-limit and lower-limit amounts.
If the expenditure needed does not have a continuous scope (or range), or there is a continuous scope,but the possibility for various results to occur within this scope is not the same, for example,contingencies involve single item, the optimum estimated amount will be determined as per the amountwhich will occur most possibly; if contingencies involve multiple items, the optimum estimated amountwill be calculated and determined as per various possible results and relevant probability.
If the Company’s expenditure needed for discharging accrued liabilities is predicted to compensateby third parties fully or partially, then the compensation amount will be confirmed independently as assetswhen being ascertained basically available to receive, and the compensation amount confirmed won’t bemore than the book value of the accrued liabilities.
26. Share-Based Payment
The share-based payment of the Company refers to the transaction through granting equityinstruments or undertaking equity-instrument-based liabilities to obtain the services provided byemployees [or other parties]. The Company’s share-based payment is divided into the share-basedpayment settled with equity and the share-based payment settled in cash.
1. Share-based payment settled with equity and equity instruments
The share-based payment settled with equity, if used to exchange for employees’ services, will bemeasured with the fair value of the equity instruments granted to employees. If the Company makesshare-based payment with restricted shares, then the shares subscribed with investment by employeesshall not be circulated in the market or transferred before meeting unlocking conditions and beingunlocked; if the unlocking conditions regulated in the final Stock Incentive Plan are not satisfied, theCompany will buy back shares at the predetermined price. When obtaining the money paid by employeesfor subscribing restricted shares, the Company will confirm capital stock and capital reserve (capital stockpremium) as per the stock subscription money obtained, and meanwhile, will confirm a liability andinventory stock as per the full amount of buyback obligation. On every date of balance sheet within thewaiting period, the Company will make the optimum estimate on the quantity of exercised equityinstruments according to follow-up information such as the latest acquired change in the number ofright-exercising employees, whether meeting regulated performance conditions, etc., on this basis, andaccording to the fair value on the date of granted, the Company will record the services obtained in thevery period in relevant cost or expense, and increase capital reserve correspondingly. After exercisingdate, the Company will not adjust the total amount of relevant confirmed cost or expense and owner’sequity. However, it’s available to exercise rights immediately after being granted, it will be recorded inrelevant cost or expense as per fair value on the date of granted, and capital reserve will be increasedcorrespondingly.
For the share-based payment not exercised finally, the Company will not confirm cost or expense,unless the exercise conditions are market conditions or non-excisable conditions. No matter whethermarket conditions or non-excisable conditions are satisfied, if only non-market conditions amongexcisable conditions are satisfied, it will be deemed as excisable. If the clauses of share-based paymentsettled with equity are amended, the services obtained will be confirmed at least according to the clausesbefore amendment. In addition, any amendment increasing the fair value of equity instruments granted, oralterations beneficial for employees on the date of amendment will be confirmed as increase of servicesobtained.
If share-based payment settled with equity is cancelled, the Company will treat it as acceleratedexercise on the date of cancellation, and confirm the non-confirmed amount immediately. If employees orother parties could choose to meet non-exercisable conditions, but do not meet such conditions withinwaiting period, the Company will treat this as cancelation of share-based payment settled with equity.However, if new equity instruments are granted, and the new equity instruments granted are recognized toreplace the cancelled equity instruments on the granted date of the new equity instruments, the grantedalternative equity instruments will be treated by the means the same as those for amending the terms andconditions for treatment of original equity instruments.
27. Other financial instruments such as preferred stocks and perpetual bonds, etc.28. Income
Should the company comply with the disclosure requirements of specific industries?
Yes.
Civil engineering construction industry
The company shall comply with the disclosure requirements of "the Guidelines No.7 of the Shenzhen Stock Exchange on IndustryInformation Disclosure—Listed Companies Engaging in the Civil Engineering Construction Business".
1. General principles for recognition of revenue from sales of goods:
(1) The significant risk and the rewards of the goods ownership has been transferred to the Buyer by the Company.
(2) The Company neither reserves the continuous management right which is generally associated with ownership nor carries outeffective control of sold commodities.
(3) Related income amount can be measured in a reliable way;
(4) The relevant economic benefits may flow into the Company;
(5) Relevant costs occurred or to be occurred can be measured in a reliable way.
2. Specific principles
(1) Service revenue
The service revenue provided by the Company mainly refers to the revenue of engineering design. In case that the results fromprovision of labor transactions can be estimated reliably, the revenue shall be recognized as per the important milestones specified by thedesign contract. Namely, the revenue is recognized as per the percentage of the workload of important milestones of the completed design inthe total design workload and the expected recoverable contract amount.
If the result of providing service transaction cannot be estimated in a reliable way, the service revenue shall be determined accordingto the service costs which has generated and expected to be compensated. The existing service costs are calculated as the period charges.When it is not probable that the costs incurred will be recovered, revenue is not recognized.
Provided that sales of commodity and provision of labor can be distinguished and separately measured in the contract or agreement
signed by the Company with other enterprises, sales of commodity and provision of labor shall be separately disposed. Provided that sales ofcommodity and provision of labor cannot be distinguished, or can be distinguished but cannot be separately measured, the entire contractshall be disposed as sales of commodity.
(2) Income from construction contractsUnder the circumstance that the outcome of a construction contract can be estimated in a reliable way, the contract revenue and thecontract costs shall be recognized in light of the percentage-of-completion method on the date of the balance sheet. The percentage ofcompletion is determined in the proportion of the accumulated actual contract costs among the estimated total contract costs.
If the outcome of a contraction contract cannot be estimated in a reliable way, but the contract costs can be recovered, the contractrevenue shall be recognized in accordance with the recoverable actual contract costs and the contract costs shall be recognized as contractexpenses in the current period they are incurred; if the contract costs cannot be recovered, they shall be recognized as contract expensesimmediately when they are incurred and no contract revenue shall be recognized. If uncertainties, due to which the outcome of a constructioncontract cannot be measured in a reliable way, have passed out of existence, the revenues and expenses pertinent to the construction contractshall be determined in the percentage-of-completion method.
If the estimated total contract costs exceed the total contract revenue, the estimated loss is recognized as the expenses for the period.
The cost and the gross profit (loss) accumulatively incurred and recognized of a construction-in-progress contract and the settled priceare presented in the balance sheet with a net amount after offset. The part of the sum of the cost and the gross profit (loss) accumulativelyincurred from a construction-in-progress contract exceeding over the settled contract price is presented as inventory; and the part of thesettled contract price exceeding over the cost and the gross profit (loss) accumulatively incurred from a construction-in-progress is presentedas advance payment.
(3) Recognized income of hospital business
The income of hospital mainly comes from the outpatient and inpatient departments, and the income recognition is done at the time ofpatient’s settlement.
For the outpatient income, as the patients turning to the outpatient treatment do not need the inpatient treatment generally, thetreatment duration is short, the settlement is made with the hospital at the end of the treatment and treatment and medicine expense is paid.Financially, such outpatient income shall be recognized at the day of receipt.
For the inpatient income, as the patient needs to be treated in the hospital for a certain period and a part of the medical expense shallbe prepaid when be admitted to hospital, the inpatient income shall not be recognized at this moment. When discharging from the hospital,the patient will settle the medical expense for the hospitalization and the hospital will issue the invoice to the patient. In such case, theincome from the inpatient is recognized financially.
29. Governmental subsidy
A government subsidy means the monetary or non-monetary assets obtained free by this companyfrom the government. Government subsidies consist of the government subsidies pertinent to assets andgovernment subsidies pertinent to income.
The assets-related government subsidy refers to government subsidies that are obtained by theCompany used for purchase or construction, or forming the long-term assets by other ways. Governmentsubsidies pertinent to income refer to the governmental subsidies except governmental subsidies pertinentto assets.
(1) The judgment basis and accounting treatment method of assets-related government subsidy
1. Recognition time
In case the governmental subsidies are monetary assets, it shall be calculated according to thereceived amount or the receivable amount. If a governmental subsidy is a nonmonetary asset, it shall bemeasured at its fair value or at its nominal amount in case that the fair value cannot be reliably obtained.The governmental subsidies calculated according to nominal amount shall be directly included in the
current profits and losses.
2. Accounting treatmentGovernmental subsidy related to assets will be used to write down the book value of relevant assetsor be confirmed as deferred income. If being confirmed as deferred income, the governmental subsidywill be recorded in the gain or loss of the current period within the service life of relevant assets withreasonable and systematic methods (if being related to the Company’s daily activities, the governmentalsubsidy will be recorded in other benefits; if not, they will be recorded in non-operating income).
(1) The judgment basis and accounting method of income-related government subsidyThe income-related government subsidy, if being used to compensate the Company’s relevant costexpenses or losses in later period, will be confirmed as deferred income, and be recorded in the gain orloss of the current period (if being related to the Company’s daily activities, the governmental subsidywill be recorded in other benefits; if not, they will be recorded in non-operating income) or be used towrite down relevant cost expenses or losses during the period of confirmation on relevant cost expensesor losses; if being used to compensate the Company’s relevant cost expenses or losses already incurred,the governmental subsidy will be directly recorded in the gain or loss of the current period (if beingrelated to the Company’s daily activities, the governmental subsidy will be recorded in other benefits; ifnot, they will be recorded in non-operating income) or be used to write down relevant cost expenses orlosses.
30. Deferred Income Tax Assets/Deferred Income Tax Liabilities
For deductible temporary difference, deferred income tax assets will be confirmed within the limit ofthe taxable income which will probably be obtained in future period and be used to offset deductibletemporary difference. As for deductible losses and taxes rebate which could be carried forward to lateryears, corresponding deferred income tax assets will be confirmed within the limit of the future taxableincome which will probably be obtained to offset deductible losses and taxes.
For taxable temporary difference, deferred income tax liabilities will be confirmed except for underspecial circumstances.
The special circumstances under which deferred income tax assets or deferred income tax liabilitiesare not confirmed include: the initial confirmation of goodwill; other transactions or matters (except forbusiness combination) of which the occurrence won’t affect accounting profit or taxable income (ordeductible loss).
If the Company has statutory right to settle with net amount, and has the intention to settle or obtainassets with net amount, and the discharge of debts is conducted simultaneously, the income tax assets ofthe current period and the income tax liabilities of the current period will be presented with the netamount after offsetting.
If the Company has the statutory right to settle the income tax assets of the current period and theincome tax liabilities of the current period with net amount, and the deferred income tax assets anddeferred income tax liabilities are related to the income tax levied by a same tax administrationdepartment from a same tax payment subject, or are related to different tax payment subjects, but in everyimportant period when deferred income tax assets and liabilities are transferred back in future, if the taxpayment subjects involved intend to settle the income tax assets and liabilities of the very period with netamount or to obtain assets and discharge liabilities simultaneously, deferred income tax assets anddeferred income tax liabilities will be presented with the net amount after offsetting.
Leasing1. Accounting treatment method for operating lease
(1) The rent paid by the Company for rented assets will be amortized with straight-line methodwithin the whole lease term including the rent-free period, and recorded in the expense of the currentperiod. The initial direct expenses paid by the Company and related to leasing transaction will berecorded in the expense of the current period.
If the asset lessor undertakes the lease-related expenses which shall be assumed by the Company, theCompany shall deduct such expenses from the total rent, amortize the remained rent within the lease term,and record it in the expense of the very period.
(2) The rent collected by the Company for leasing out assets will be amortized with straight-linemethod within the whole lease term including the rent-free period, and confirmed as lease-related income.The initial direct expenses paid by the Company and related to leasing transaction will be recorded in theexpense of the very period; if the amount is relatively big, the amount will be capitalized, and will berecorded in the income of the very period by installments within the whole lease term on the basis sameas that for confirmation of lease-related income.
If the Company undertakes lease-related expenses which shall be undertaken by the lessee, theCompany will deduct such expenses from the total amount of rent income, and distributed the remainedrent expense within the lease term.
2. Accounting treatment method for finance lease
(1) Assets rented through finance lease: On the date when the renting starts, the Company takes thefair value of rented assets and the present value of minimum rent payment, whichever is lower, as theentry value of rented assets, takes the minimum rent payment as the entry value of long-term accountspayable, and takes the balance as non-confirmed financing expense. The Company adopts actual interestrate method to amortize the non-confirmed financing expenses within the asset lease term, and recordsthem in financial expenses. The Company records the initial direct expenses incurred in the value ofrented assets.
(2) Assets leased out through finance lease: On the date when leasing starts, the Company confirmsthe balance between “the sum of finance lease account receivable and non-guaranteed balance” and theirpresent value as non-realized financing income, and confirms it as lease income within each future periodwhen rents are received. The Company records the initial direct expenses related to leasing transaction inthe initial measured amount of finance lease account receivable, and reduces the income amountconfirmed within the lease term.
32． Other Important Accounting Policies and Accounting Estimates
1. Important Accounting Judgment and Estimates
When applying accounting policies, the Company needs to make judgment, estimation and assumption of the bookvalue of the statement items that cannot be accounted accurately due to the uncertainty of business activities. Based onthe past experience of the company's management and other relevant factors, these judgments, estimates, andassumptions will impact the disclosure of reported amount of income, expenses, assets, and liabilities and the contingentliabilities on the balance sheet date. However, there may exists differences between the actual results caused by theuncertainty of these estimates and the current estimates of the company's management, which may lead to a significant
adjustment of the book amount of the affected assets or liabilities in the future.
The Company will regularly review the above-mentioned judgments, estimates and assumptions on the basis ofcontinuing operations. In case the changes of accounting estimates only impact the period of change, the impactednumber shall be confirmed in the period of change; in case the changes impact both the period of change and the future,the impacted number shall be confirmed in the period of change and the future.
On the date of balance sheet, the Company shall judge, estimate and assume the amount of the financial statementitems in the following important areas.
(1) Accrued liabilities
The Company shall estimate and judge the possibility that the accrued liabilities may lead to the current obligationsundertaken by the Company based on available evidence. If the management consider that there is such a possibility, andthey are able to make a reliable estimation of the expenditures required, then the Company will recognize the bestestimated amount of the expenditure required to fulfill the current obligations of the estimated liabilities as the accruedliabilities. Changes in these estimates may result in significant adjustments of accrued liabilities.
(2) Withdrawal of the bad debt reserves
The Company will use allowance method to account the loss of bad debt in accordance with the accounting policyof receivables. The impairment of receivables is based on the recoverability of estimated receivables. The appraisal ofimpairment of receivables requires the judgment and estimate of the management. The difference between the actualresult and the original estimate will affect the book value of the receivables and the withdrawal or transferal of the baddebt reserve of the receivables during the period when the estimate is changed.
(3) Inventory depreciation reserve
In accordance with the inventory accounting policy, the Company will account based on the lower one of the costand net realizable value. For the inventory with a cost higher than that of the net realizable value and the outdatedinventory, it will withdraw the inventory depreciation reserve. The impairment of inventory to net realizable value isbased on the marketability and the net realizable value of estimated inventory. The appraisal of inventory impairmentrequires the management to make judgment and estimate on the basis of obtaining solid evidence and taking into accountthe purpose of holding inventory and the impact of matters after the balance sheet date. The difference between theactual result and the original estimate will impact the book value of inventory and the withdrawal or transferal of theinventory depreciation reserve during the change of the estimate.
(4) Impairment of financial assets available for sale
The Company’s determination of the impairment of financial assets available for sale depends on the judgment andassumption of the management to a large extent to determine whether the impairment loss needs to be confirmed in theincome statement. When making judgments and assumptions, the Company needs to assess the degree and duration thatthe fair value of the investment is lower than the cost, as well as the financial condition and short-term business outlookof the invested objects, including the industry situation, technological innovation, credit rating, default rate and the riskof the peers.
(5) Long-term asset depreciation reserve
The Company shall judge the sign of possible impairment of non-current assets other than financial assets on thebalance sheet date. For intangible assets with uncertain service life, impairment test should be conducted when there aresigns of impairment except the annual impairment test. The non-current assets other than financial assets will haveimpairment tests when there is sign that their book value is unrecoverable.
It indicates depreciation when the book value of asset or group of assets is higher than the recoverable amount,which is the higher of the net amount after the fair value minus the disposal expenses and the present value of thepredicted future cash flow.
The net amount after the fair value minus the disposal expenses is confirmed as the amount after agreed sales priceof similar asset in a fair transaction or observable market price minus the incremental costs directly attributable to thedisposal of asset.
When estimating the present value of future cash flow, it is necessary to make judgments on the output, sellingprice, relevant operating costs of the asset (or group of assets) and the discount rate to calculate the present value. TheCompany will use all relevant material available when estimating the recoverable amount, including projections ofproduction, selling prices and relevant operating costs based on reasonable and supportable assumptions.
The Company shall test goodwill impairment annually, which requires estimating the present value of the futurecash flow of the asset groups or portfolio of asset groups apportioned with goodwill. When estimating the present valueof future cash flow, the Company shall estimate the cash flow generated by the future asset group or portfolios of assetgroups, and choose the appropriate discount rate to determine the present value of future cash flow.
(6) Depreciation and amortization
The Company shall withdraw depreciation and amortization according to the straight-line method within theservice life after considering the residual value of fixed assets and intangible assets. The Company shall regularly reviewthe service life to determine the amount of depreciation and amortization to be included in each reporting period. It shalldetermine the service life based on the past experience of similar assets and expected technological updates. If there arebig changes in previous estimates, the depreciation and amortization amount will be adjusted in the future.
(7) Deferred income tax asset
The Company will confirm deferred income tax assets for all unused tax losses when it is likely to offset losseswith enough taxable profits. This requires the management of the Company to make many judgments to estimate thetime and amount of future taxable profits to determine the amount of deferred income tax assets in combination with taxplanning strategy.
(8) Income tax
There is some uncertainty in the final tax treatment and calculation of some deals in the company’s normalbusiness activities. Whether part of the projects can be itemized before tax need the approval of the tax department. Ifthere is difference between the final result confirmed of these tax matters and the original estimated amount, then thedifference will impact the income tax and deferred income tax of the final period confirmed.
2. Correction of Accounting Error
(1) Reasons and content of the correction of accounting error
① The Company confirmed the claim income of the project of Cambodia in 2017. Among it, the actual written
confirmation of the claim amount of USD 1.13 million (equivalent to RMB XX thousand yuan) by party A isin 2018, which is intertemporal. Besides, the project and two other projects of Cambodia are being accounted.Their revenue cost was not accounted according to the actual project progress. What should have beenaccounted in 2016 was included in 2017. As a result, the operating profit of 2016 is 12 million yuan less.
② In 2016 and 2017, there were accounts opened in the name of employees used to pay the employee’s salary
and other costs. Among them, the amount in 2016 is 1.9885 million yuan and the amount in 2017 is 3.8529million yuan. As a result, the cost in 2016 was 1.9885 million yuan less, and the cost in 2017 was RMB 3.8529yuan less.
③ During the tax audit, it was found that the invoices of the construction cost of the Company in 2017 were
illegal, including illegal general VAT invoice, general VAT invoice of other provinces, and abnormal VATinvoice, with a total amount of 42.9313 million yuan. As a result, the payable income tax of the Company in2017 was 6.4397 million yuan less.
(2) Methods of correction of accounting error and its impact on financial statementConsidering that the amount of the above accounting errors is not significant, and has little impact on thecompany's assets liabilities at relevant time and the profits and losses during the period, the Company will adopt theprospective application method to correct the accounting errors. The impact on the 2018 financial statement is asfollows:
| Matters | Have an impact or not | The impacted statement item | Corrected amount |
| Intertemporal claim income | No | ||
| Cost paid by personal cards | Yes | Administration expense of 2018 | +5,841,400.00 |
| Other account payable of 2018 | +5,841,400.00 | ||
| Illegal cost invoice | Yes | Income tax of 2018 | +6,439,691.12 |
| Tax payable of 2018 | +6,439,691.12 |
33. Correction of Important Accounting Policies and Accounting Estimates(1) Correction of Important Accounting Policies
√ Applicable □ Not applicable
| Contents of and reasons for change of accounting policies | Approval procedures | Notes |
According to the provisions of the Notice of the Ministry of Finance on the Revision and Issuance ofthe Format of Financial Statement of General Enterprises in 2018, (CK (2018) No. 15), the format offinancial statement of general enterprises has been revised. The Company has prepared financialstatements in the reporting period in accordance with the new reporting format stipulated by the Ministryof Finance. The specific subjects and amount affected are listed as follows:
| No. | Name of the affected statement item | Affected |
| amount |
| Retroactive adjustment method | ||
| 1 | January 1, 2018 Note receivable and account receivable | 5,994,876,806.96 |
| 2 | January 1, 2018 Account receivable | -288,201,562.88 |
| 3 | January 1, 2018 Account receivable | -5,706,675,244.08 |
| 4 | January 1, 2018 Note receivable and account payable | 2,626,177,075.77 |
| 5 | January 1, 2018 Notes Payable | -906,597,988.15 |
| 6 | January 1, 2018 Account payable | -1,719,579,087.62 |
| 7 | January 1, 2018 Other account payable | 16,105,263.85 |
(2) Change of Important Accounting Estimates
□ Applicable √ Not applicable
34. OtherVI. Taxes1. Main Types of Taxes and Tax Rate
| Taxes | Taxation basis | Tax rate |
| VAT | For the taxable income, the output tax should be calculated based on relevant tax rate, and the VAT shall be paid based on the difference after deducting the input tax that is allowed to be deducted in the current period | 0%、3%、6%、11%、17% |
| Urban maintenance and construction tax | Paid as per 7%, 5% and 1% of the turnover tax paid actually. | 7%、5%、1% |
| Enterprise income tax | Paid as per 15% and 25% of taxable income | 15%、25% |
| Educational surtax | Paid as per 3% of the turnover tax paid actually. | 3% |
| Local educational surtax | Paid as per 2% of the turnover tax paid actually. | 2% |
Illustration for disclosure of tax payers of different corporate income tax rate
| Name of tax payers | Income tax rate |
| Changzhi Shenzhou Laodingshan Industrial Co., Ltd. | 25% |
| Xiangfen County Taoshan Construction Co., Ltd. | 25% |
| Sino Great Wall (Xihua) Economic Development Zone Investment Co., Ltd. | 25% |
| Liupanshui Central People’s Hospital Investment Co., Ltd. | 25% |
| Sino Zhigu Industrial (Yueyang) Co., Ltd. | 25% |
| Sino Great Wall Guangxia (Wuhan) Medical Development Co., Ltd. | 25% |
| Sino Great Wall Infrastructure Investment Co., Ltd. | 25% |
| Wuhan Commercial Workers Hospital LLC | 25% |
| Sino Great Wall Medical Investment Management Co., Ltd. | 25% |
| Sino Great Wall International Engineering Co., Ltd. | 15% |
| Fujian Sino Great Wall Mingyihui Medical Investment Co., Ltd. | 25% |
| Sino Great Wall Medical Investment (Hubei) Co., Ltd. | 25% |
| Hubei Yuanyaotong Supply Chain Co., Ltd. | 25% |
| Sino Great Wall Medical Management (Inner Mongolia) Co., Ltd. | 25% |
| Sino Great Wall Health Management (Jiangsu) Co., Ltd. | 25% |
| Sino Great Wall (Beijing) Investment Fund Management Co., Ltd. | 25% |
| Sino Great Wall New Energy (Beijing) Co., Ltd. | 25% |
| Wu’an Juhe Photovoltaic Power Co., Ltd. | 25% |
| Shanghai Lingrui International Trading Co., Ltd. | 25% |
| Shenzhen Hongtulve Industrial Co., Ltd. | 25% |
| Sino Great Wall Southwest Engineering Co., Ltd. | 25% |
| Sino Great Wall Southwest Science and Technology Co., Ltd. | 25% |
| Sino Great Wall Southwest Commercial and Trading Co., Ltd. | 25% |
| Sino Great Wall Southwest Engineering Consultation Co., Ltd. | 25% |
| Sino Great Wall Decoration and Design Co., Ltd. | 25% |
| Suzhou Lvbang Wood Industry Technology Co., Ltd. | 25% |
| Huichang County Zhongcheng Construction Engineering Co., Ltd. | 25% |
| Great Wall Biaodian Energy Co., Ltd. | 25% |
| Kunming Sino Forest Industry Development Co., Ltd. | 25% |
| Sino Great Wall Development (Hengqin) Co., Ltd. | 25% |
| Sino Great Wall Real Estate (Hubei) Co., Ltd. | 25% |
| SGW America LLC | 21% |
| Sino Great Wall Group Co., Limited | 17% |
| Far eastern international engineering company,LLC | 20% |
| Sino Great Wall(Philippines) International Corporation | 30% |
| Sino Wai Man International Engineering Limited | 12% |
| Sino Great Wall (HK) Property Co., Limited | 17% |
| SGW HPEngineeringConstructionSDN.BHD | 24% |
| SGW VENTURES SDN.BHD. | 24% |
| SGW CONSTRUCTION (LANGKAWI) SDN.BHD. | 24% |
| SINO GREAT WALL GENERAL TRADING & CONTRACTING CO.LTD | 15% |
| Shenzhou Changcheng（Lao）Co., Ltd | 25% |
| Sino International Engineering (Laos) Co., Ltd. | 25% |
| Sino Great Wall Investment (Laos) Co., Ltd. | 25% |
| Sino Great Wall Group (UK) Co., Limited | 19% |
| Sino Great Wall International Engineering (MM) Co., Ltd | 25% |
| Sino Great Wall International Engineering Co., Ltd | 0% |
| Inrich Me Engineering Co., Ltd | 17% |
| SINO | GREAT |
| Sino Great Wall International Engineering (Thailand) Co., Ltd. | 20% |
| Sino Great Wall International Engineering (CNMI) Co., LLC. | 21% |
| SINO GREAT WALL（USA）.INC | 21% |
| PT.SINO GREAT WALL INVESTMENT INDONESIA | 25% |
| PT.SINO GREAT WALL CONSTRUCTION INDONESIA | 25% |
| Anshun Sino Great Wall Real Estate Development and Construction Co., Ltd. | 25% |
| Beijing Sino Xinda Real Estate Co., Ltd. | 25% |
| Sino Great Wall Hebei Xiong’an Engineering Co., Ltd. | 25% |
| Sino Great Wall Scientific and Technologic Development Co., Ltd. | 25% |
| Weifang Sino Great Wall Medical care and Health Industry Co., Ltd. | 25% |
| Sino Great Wall (Guangzhou) Elevator Engineering Co., Ltd. | 25% |
| Zhongda Chancheng Industrial (Chongqing) Co., Ltd. | 25% |
| Sino Rongju Real Estate Development Co., Ltd. | 25% |
| Chengwu County Shenguang Engineering Project Management Co., Ltd. | 25% |
| Sino Boda (Zhanjiang) Industrial Co., Ltd. | 25% |
| Sino Great Wall Industrial (Chongqing) Co., Ltd. | 25% |
2. Tax Preferences
(1) As verified by Beijing Municipal Office, SAT in 2013 as per Tax Category Verification Notice,the taxable income of Sino Great Wall Design shall be 10% of the total income.
(2) According to provisions in Notice of the State Administration of Taxation on Several IssuesConcerning the Administration of Collection of Income Tax of Enterprises Operating Business acrossDifferent Regions and Paying Taxes on a Consolidated Basis (GSF (2008) No.28) on March 10, 2008, thehead office (parent company) of the operation units and the place of business, being established withinterritory of China and running business across China without the legal personality (i.e. running productionand operation activity across regions) shall be deemed as the enterprise for consolidated taxation. If theparent Company adopt the consolidated taxation method and the head office and the branches intend to
prepay the enterprise income tax by stages, 50% of such taxes shall be amortized to the branches andprepaid, while the other 50% shall be prepaid by the head office. The amortization ratio of each branchshall be 0.35:0.35:0.30 among the operating income, the staff salary and the total assets of each; the finalsettlement of annual corporate income tax shall be made to the tax authority by the parent Company andshall never amortized to the branches.
(3) Sino Great Wall Group Co., Limited (hereinafter referred to as “Sino Hong Kong”) and InrichMe Engineering Co., Ltd. (hereinafter referred to as “Inrich Me”) under the subsidiary Company of theCompany are enterprises established in the Hong Kong Special Administrative Region, which shall paythe enterprise profit tax at the rate of 16.5%. SINO GREAT WALL INTERNATIONAL ENGINEERING(MACAU) CO., LIMITED (hereinafter referred to as “SINO MACAU”) is an enterprise established inthe Macao Special Administrative Region, which shall pay the net profit tax and observe the progressivetax rate.
(4) Sino Great Wall International Engineering Co., Ltd. (hereinafter referred to as the “SinoInternational”), the wholly-owned subsidiary Company of the Company, was granted the Certificate ofHigh & New Technological Enterprise on November 24, 2015 which was jointly approved and issued byBeijing Municipal Science & Technology Commission, Beijing Finance Bureau, Beijing MunicipalOffice, SAT and Beijing Local Taxation Bureau. Sino International was identified as the high and newtechnological enterprise (Certificate No.: GR201511003125; Issue date: November 24, 2015; Term ofValidity: Three Years), i.e. Sino International shall pay the enterprise income tax at the rate of 15% in2015, 2016 and 2017, respectively.
(5) According to Notice of Ministry of Finance and State Administration of Taxation on Pilot forComprehensive Implementation of Business Tax Replaced by Value-added Tax (CS (2016) No.36),Wuhan Commercial Workers Hospital LLC, the wholly-owned subsidiary Company of the Company wasentitled to the preferential policies of being exempted from VAT since May 1, 2016.
3. Other
According to provisions in the Notice of the State Administration of Taxation on the Tax Policies for Implementing across the Countrythe Pilot Program of Levying Value-Added Tax in Lieu of Business Tax on the Transportation Industry and Some Modern Service Industries(CS (2012) No.71) on July 31, 2012, the design business of Sino Great Wall Decoration and Design Co., Ltd. (hereinafter referred to as the“Sino Great Wall Design”) under the subsidiary Company of the Company was changed to taxable item of value-added tax from the that ofthe business tax with the value-added tax rate of 3% since September 1, 2012 and Sino Great Wall Design was deemed as the small-scaletaxpayer.
VII. Notes to Items in Consolidated Financial Statements
1. Monetary Resources
Unit: Yuan
| Items | Ending balance | Opening balance |
| Cash on hand | 3,116,229.51 | 4,614,087.16 |
| Bank deposit | 122,651,567.37 | 642,608,503.33 |
| Other monetary resources | 532,947,089.60 | 957,751,325.63 |
| Total | 658,714,886.48 | 1,604,973,916.12 |
| Including: the total amount of overseas funds | 51,902,846.57 |
Other description
| Items | Ending balance | Opening balance |
| Bank acceptance guarantee deposit | 230,602,428.53 | 349,043,551.56 |
| Guarantee bond | 181,351,839.27 | 555,665,432.94 |
| Fixed time deposits or call deposits used for guarantee | 100,024,675.00 | 50,000,000.00 |
| Overseas funds with limited remittance | 873,465.90 | 22,098.66 |
| Bond for wages of migrant workers | 303,963.07 | 3,020,242.47 |
| Freezing | 19,790,717.83 |
| Total | 532,947,089.60 | 957,751,325.63 |
2. Financial assets measured with fair value and having the change of fair value recorded in the gain or loss ofthe current period
Unit: Yuan
| Items | Ending balance | Opening balance |
Other description:
3. Derived financial assets
□ Applicable √ Not applicable
4. Notes Receivable and Accounts Receivable
Unit: Yuan
| Items | Ending balance | Opening balance |
| Notes receivable | 1,518,790.00 | 288,201,562.88 |
| Accounts receivable | 4,202,594,258.24 | 5,706,675,244.08 |
| Total | 4,204,113,048.24 | 5,994,876,806.96 |
（1）Notes Receivable
1) Classified Presentation of Notes Receivable
Unit: Yuan
| Items | Ending balance | Opening balance |
| Bank acceptance | 0.00 | 15,544,160.00 |
| Trade acceptance | 1,518,790.00 | 272,657,402.88 |
| Total | 1,518,790.00 | 288,201,562.88 |
2) Notes receivable pledged by the Company at the end of the period
Unit: Yuan
| Items | Amounts pledged at the end of the period |
| Bank acceptance | 0.00 |
| Trade acceptance | 0.00 |
| Total | 0.00 |
3) Notes Receivable Already Endorsed or Discounted by the Company at the End of Period, but Not Coming Due Yet on the Date of BalanceSheet
Unit: Yuan
| Items | Confirmation-terminated amount at the end of period | Non-confirmation-terminated amount at the end of period |
| Bank acceptance | 4,608,144.88 | 0.00 |
| Trade acceptance | 95,940,000.00 | 0.00 |
| Total | 100,548,144.88 | 0.00 |
4) Bills turned into account receivables due to the default of the drawer of the Company at the end of term
Unit: Yuan
| Items | End-of-period arrears among the receivables |
| Trade acceptance | 444,932,329.41 |
| Total | 444,932,329.41 |
Other descriptionNone
（2）Accounts receivable
1) Classified Disclosure of Accounts Receivable
Unit: Yuan
| Type | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
| Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Accounts receivable with significant single amount and having bad | 716,094,881.32 | 13.72% | 286,437,952.53 | 40.00% | 429,656,928.79 | |||||
| debt reserve withdrawn independently | ||||||||||
| Accounts receivable with bad debt reserve withdrawn as per the portfolio of credit risk characteristics | 4,503,309,614.80 | 86.28% | 730,372,285.35 | 16.22% | 3,772,937,329.45 | 6,332,915,727.57 | 100.00% | 626,240,483.49 | 9.89% | 5,706,675,244.08 |
| Total | 5,219,404,496.12 | 100.00% | 1,016,810,237.88 | 56.22% | 4,202,594,258.24 | 6,332,915,727.57 | 100.00% | 626,240,483.49 | 9.89% | 5,706,675,244.08 |
Accounts receivable with significant single amount and having bad debt reserve withdrawn independently at the end of term:
√ Applicable □ Not applicable
Unit: Yuan
| Accounts receivable (per unit) | Ending balance | |||
| Accounts receivable | Bad debt reserve | Withdrawal proportion | Reasons for withdrawal | |
| China Harbor Engineering Company Ltd. | 716,094,881.32 | 286,437,952.53 | 40.00% | Shutdown for the project of Military Academy, Ministry of National Defense |
| Total | 716,094,881.32 | 286,437,952.53 | -- | -- |
Accounts receivable with bad debt reserve withdrawn by means of account age analysis in the portfolios:
√ Applicable □ Not applicable
Unit: Yuan
| Account age | Ending balance | ||
| Accounts receivable | Bad debt reserve | Withdrawal proportion | |
| Within 1 year | |||
| 1,435,285,534.03 | 71,769,102.30 | 5.00% | |
| 1-2 years | 2,038,443,035.35 | 190,125,609.54 | 10.00% |
| 2-3 years | 555,716,897.18 | 166,715,069.14 | 30.00% |
| 3-4 years | 358,293,199.04 | 179,146,599.52 | 50.00% |
| 4-5years | 76,448,267.42 | 61,158,613.94 | 80.00% |
| More than 5years | 64,205,580.84 | 64,205,580.83 | 100.00% |
| Total | 4,528,392,513.86 | 733,120,575.26 | |
Description about the basis for determining the portfolio:
②Situations of bad debt reserves withheld, recycled or reversed in this term
The amount of bad debt reserve withdrawn in the current period was RMB 393,318,044.30; andthe amount of bad debt reserve recovered or transferred back in the current period was RMB 0.00.
③Accounts Receivable Actually Cancelled after Verification in the Current Period: none.④Top 5 Owning Parties Classified by Ending Balance of Accounts Receivable
The aggregate amount of the top 5 owning parties classified by ending balance of accountsreceivable was RMB 2,441,187,064.70, accounting for 46.55% of the total amount of accountsreceivable at the end of the year, and the aggregate amount of bad debt reserve ending balancewithdrawn was RMB 498,149,003.15.
| Unit name | Ending balance | ||
| Accounts receivable | Proportion to total accounts receivable (%) | Bad debt reserve | |
| China Harbor Engineering Company Ltd. | 831,409,897.23 | 15.85 | 313,687,509.07 |
| POWERCHINA Construction Group Ltd. | 674,079,636.78 | 12.85 | 73,244,894.27 |
| Oxley Gem (Cambodia)Co., Ltd | 426,011,027.46 | 8.12 | 25,469,397.37 |
| Henan NO.1 Thermal Power Construction Company | 298,264,504.82 | 5.69 | 65,526,002.54 |
| Cambodia Petrochemical Co., Ltd. | 211,421,998.41 | 4.03 | 20,221,199.90 |
| Total | 2,441,187,064.70 | 46.55 | 498,149,003.15 |
⑤Accounts receivable of which the recognition is terminated due to the transfer of financial assets:
none.
⑥Amount of assets and liabilities formed by transferring accounts receivable and continuousinvolvement: none.
In the portfolio, other receivables of bad debts withdrawn with the balance percentage method:
□ Applicable √ Not applicableIn the portfolio, other receivables of bad debts withdrawn with other methods:
The company shall comply with the disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guide No. 7
－Listed Companies Engaged in Civil Engineering Construction Business.2) Bad Debt Reserves Withdrawn, Recovered or Transferred Back in the Current PeriodThe amount of bad debt reserves withdrawn in current period is RMB 393,318,044.30 and the amount of bad debt reserves recovered orreversed in current period is RMB 0.Important amounts of bad debt reserves recovered or reversed in current period:
Unit: Yuan
| Unit name | Amounts recycled or reversed | Recycle Method |
3) Accounts Receivable Actually Cancelled after Verification in the Current Period
Unit: Yuan
| Items | Amounts cancelled after verification |
Important cancelation after verification of other accounts receivable:
Unit: Yuan
| Unit name | Nature of accounts receivable | Amounts cancelled after verification | Reasons for cancelation after verification | Procedures performed for cancelation after verification | Whether the payment is generated by related transaction |
Note for accounts receivable cancelled after verification:
None
4) Top 5 Owing Parties Classified by the Ending Balance of Other Accounts Receivable
| Unit name | Ending balance | ||
| Accounts receivable | Proportion to total accounts receivable (%) | Bad debt reserve | |
| China Harbor Engineering Company Ltd. | 831,409,897.23 | 15.85 | 313,687,509.07 |
| POWERCHINA Construction Group Ltd. | 674,079,636.78 | 12.85 | 73,244,894.27 |
| Oxley Gem (Cambodia) Co., Ltd | 426,011,027.46 | 8.12 | 25,469,397.37 |
| Henan NO.1 Thermal Power Construction Company | 298,264,504.82 | 5.69 | 65,526,002.54 |
| Cambodia Petrochemical Co., Ltd. | 211,421,998.41 | 4.03 | 20,221,199.90 |
| Total | 2,441,187,064.70 | 46.55 | 498,149,003.15 |
5) Other accounts receivable of which the recognition is terminated due to transfer of financial assetsNone6) Amount of assets and liabilities formed through transfer of other receivables and continuous involvementNoneOther description:
5. Advance Payment（1）Presentation of Advance Payments by Account Age
Unit: Yuan
Account age
| Account age | Ending balance | Opening balance | ||
| Amount | Proportion | Amount | Proportion | |
| Within 1 year | 207,889,106.39 | 71.74% | 212,854,246.00 | 94.51% |
| 1-2 years | 8,022,057.24 | 21.31% | 11,257,454.64 | 5.00% |
| 2-3 years | 3,620,871.70 | 6.17% | 903,997.25 | 0.40% |
| More than 3 years | 729,583.80 | 0.78% | 192,829.99 | 0.09% |
| Total | 220,261,619.13 | -- | 225,208,527.88 | -- |
Description of reasons why the advance payments of an important amount with account age more than 1 year are not settled in time:
（2）Top 5 Advance Payment Objects Classified by the Ending Balance of Advance Payments
（2）Top 5 Advance Payment Objects Classified by the Ending Balance of Advance PaymentsThe aggregate amount of the top 5 advance payment objects classified by the ending balance ofadvance payments was RMB 85,197,913.66, accounting for 38.60% of the total amount of the endingbalance of advance payments.
| Unit name | Relationship | Ending balance | Proportion to the | Advance | Reasons for not |
| with the company | total ending balance of advance payments (%) | payment time | settlement | ||
| Jiangsu Juye Jianshe Group Co., Ltd. | Subcontractor | 27,020,017.56 | 12.24 | Within 2 year | Advance payment for subcontracted project |
| Zhongcheng Jianye Construction Co., Ltd. | Subcontractor | 25,421,813.77 | 11.52 | Within 2 year | Advance payment for subcontracted project |
| Shandong Zhiyuan Building Installation Engineering Co., Ltd. | Subcontractor | 11,430,371.93 | 5.18 | Within 1 year | Advance payment for subcontracted project |
| Longyan City Hengda Engineering Co., Ltd. | Subcontractor | 11,552,049.40 | 5.23 | Within 1 year | Advance payment for subcontracted project |
| Xi'an Bihui Road and Bridge Engineering Co., Ltd. | Subcontractor | 9,773,661.00 | 4.43 | Within 1 year | Advance payment for subcontracted project |
| Total | 85,197,913.66 | 38.60 | |||
| ? |
Other description:
6. Other accounts receivable
Unit: Yuan
| Items | Ending balance | Opening balance |
| Other accounts receivable | 2,186,223,361.40 | 1,674,675,360.28 |
| Total | 2,186,223,361.40 | 1,674,675,360.28 |
（1）Interest receivable
1) Classification of interest receivable
Unit: Yuan
| Items | Ending balance | Opening balance |
2) Important overdue interest
Unit: Yuan
| Borrowing unit | Ending balance | Overdue time | Overdue reason | Whether impairment occurs and the basis for its judgment |
Other description:
（2）Dividends receivable
1) Dividends receivable
Unit: Yuan
| Items (or the invested unit) | Ending balance | Opening balance |
2) Important dividends receivable over one year of account age
Unit: Yuan
| Items (or the invested unit) | Ending balance | Account age | Reason for not recycling | Whether impairment occurs and the basis for its judgment |
Other description:
（3）Other accounts receivable
1) Classified Disclosure of Other Accounts Receivable
Unit: Yuan
| Type | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | |||||
| Amount | Proportion | Amount | Withdrawal proportion | Amount | Proportion | Amount | Withdrawal proportion | |||
| Other accounts receivables that are individually significant and for which individual bad debt reserves are withdrawn | 22,402,980.00 | 0.95% | 2,000,000.00 | 8.93% | 20,402,980.00 | |||||
| Other accounts receivable with bad debt reserve withdrawn as per the portfolio of credit risk characteristics | 2,341,177,867.34 | 98.92% | 175,357,485.94 | 7.49% | 2,165,820,381.40 | 1,820,332,846.84 | 100.00% | 145,657,486.56 | 8.07% | 1,674,675,360.28 |
| Other accounts receivable with insignificant single amount and having bad debt reserve withdrawn separately | 2,963,005.73 | 0.13% | 2,963,005.73 | 100.00% | ||||||
| Total | 2,366,543,853.07 | 100.00% | 180,320,491.67 | 2,186,223,361.40 | 1,820,332,846.84 | 100.00% | 145,657,486.56 | 1,674,675,360.28 | ||
Other accounts receivables that are individually significant and for which individual bad debt reserves are withdrawn at the end of the period:
√ Applicable □ Not applicable
Unit: Yuan
| Other accounts receivable (per unit) | Ending balance | |||
| Other accounts receivable | Bad debt reserve | Withdrawal proportion | Reasons for withdrawal | |
| Accounting Center of Forestry Bureau of Yongqiao District, Suzhou City | 2,000,000.00 | 2,000,000.00 | 100.00% | Low likelihood of recycling |
| ACURA Kliniken Group Baden-Baden GmbH | 20,402,980.00 | Assets held for sale | ||
| Total | 22,402,980.00 | 2,000,000.00 | -- | -- |
Other accounts receivable with bad debt reserve withdrawn by means of account age analysis in the portfolios:
√ Applicable □ Not applicable
Unit: Yuan
| Account age | Ending balance | ||
| Other accounts receivable | Bad debt reserve | Withdrawal proportion | |
| Within 1 year | |||
| 1,980,686,398.10 | 99,034,319.91 | 5.00% | |
| 1-2 years | 248,752,112.99 | 24,875,211.30 | 10.00% |
| 2-3 years | 49,079,589.31 | 14,723,876.79 | 30.00% |
| 3-4 years | 48,461,428.86 | 24,230,714.43 | 50.00% |
| 4-5 years | 8,524,872.84 | 6,819,898.27 | 80.00% |
| More than 5 years | 5,673,465.24 | 5,673,465.24 | 100.00% |
| Total | 2,341,177,867.34 | 175,357,485.93 | |
Description about the basis for determining the portfolio:
②Classified Disclosure of Other Accounts Receivable by Nature
| Nature of accounts | Ending book balance | Book balance at the beginning of year |
| Tender bond, performance bond and deposit | 359,746,410.63 | 564,988,488.94 |
| Pretty Cash and personal intercourse funds | 400,356,527.19 | 45,065,829.65 |
| Intercourse funds of the organization | 1,534,777,052.09 | 1,191,088,012.16 |
| Others | 71,663,863.16 | 19,190,516.09 |
| Total | 2,366,543,853.07 | 1,820,332,846.84 |
③Bad Debt Reserves of Other Accounts Receivable Withdrawn, Recovered or Transferred Back inthe Year
The amount of bad debt reserves withdrawn in current period is RMB34,911,005.11.
④Top 5 Owing Parties Classified by the Ending Balance of Other Accounts Receivable
| Unit name | Nature of accounts | Ending balance | Account age | Proportion to total ending balance of other accounts | Bad debt reserve Ending balance |
receivable (%)Longyan City Hengda EngineeringCo., Ltd.
| Longyan City Hengda Engineering Co., Ltd. | Intercourse funds of the organization | 335,179,148.00 | Within 2 year | 14.16 | 21,608,957.40 |
| POWERCHINA Construction Group Ltd. | Intercourse funds of the organization | 250,908,351.38 | 1-2 years | 10.6 | 25,090,835.14 |
| Yueyang Public Resource Trading Center | Tender bond | 131,500,000.00 | 1-2 years | 5.56 | 13,150,000.00 |
| Hebei Xuxing Industrial Co., Ltd. | Tender bond | 55,000,000.00 | 1-2 years | 2.32 | 5,500,000.00 |
| China Harbor Engineering Company Ltd. | Intercourse funds of the organization | 54,278,966.48 | Within 3 year | 2.29 | 6,330,428.72 |
| Total | —— | 826,866,465.86 | —— | 34.93 | 71,680,221.26 |
⑥Accounts Receivable Involving Governmental Subsidy: none.⑦Other accounts receivable of which the recognition is terminated due to transfer of financial assets: none.⑧Amount of assets and liabilities formed through transfer of other receivables and continuous involvement: none.
In the portfolio, other receivables of bad debts withdrawn with the balance percentage method:
□ Applicable √ Not applicableIn the portfolio, other receivables of bad debts withdrawn with other methods:
□ Applicable √ Not applicable2) Situations of bad debt reserves withheld, reversed or recycled in this termThe amount of bad debt reserves withdrawn in current period is RMB and the amount of bad debt reserves recovered or reversed incurrent period is RMB .Important amounts of bad debt reserves recovered or reversed in current period:
Unit: Yuan
| Unit name | Amounts reversed or recycled | Recycle method |
3) Status of actual verified other receivables in current period
Unit: Yuan
| Item | Amounts cancelled after verification |
Important cancelation after verification of other accounts receivable:
Unit: Yuan
| Unit name | Nature of other accounts receivable | Amounts cancelled after verification | Reasons for cancelation after verification | Procedures performed for cancelation after verification | Whether the payment is generated by related transactions |
Notes on other accounts receivable cancelation after verification:
4) Classification of Other Accounts Receivable by Nature
Unit: Yuan
| Nature of accounts | Ending book balance | Book balance at the beginning of year |
| Tender bond, performance bond and deposit | 359,746,410.63 | 564,988,488.94 |
| Pretty cash and intercourse funds of individuals | 400,356,527.19 | 45,065,829.65 |
| Intercourse funds of the organization | 1,534,777,052.09 | 1,191,088,012.16 |
| Others | 71,663,863.16 | 19,190,516.09 |
| Total | 2,366,543,853.07 | 1,820,332,846.84 |
5) Top 5 Owing Parties Classified by the Ending Balance of Other Accounts Receivable
Unit: Yuan
| Unit name | Nature of accounts | Ending balance | Account age | Proportion to total ending balance of other accounts receivable | Bad debt reserve Ending balance |
6) Accounts Receivable Involving Governmental Subsidy
Unit: Yuan
| Unit name | Governmental subsidy project name | Ending balance | Ending account age | Estimated possession time, amount and basis |
7) Other accounts receivable of which the recognition is terminated due to transfer of financial assets8) Amount of assets and liabilities formed through transfer of other receivables and continuous involvementOther description:
7. Inventories
Whether the company shall comply with the disclosure requirements of the real estate industryNo
（1）Classification of Inventories
Unit: Yuan
| Items | Ending balance | Opening balance | ||||
| Book balance | Depreciation reserve | Book value | Book balance | Depreciation reserve | Book value | |
| Raw materials | 110,557.92 | 110,557.92 | 1,810,694.49 | 1,810,694.49 | ||
| Merchandise inventory | 10,708,600.50 | 10,708,600.50 | 9,328,819.66 | 9,328,819.66 | ||
| Completed and unsettled assets formed by the construction contract | 678,132,183.22 | 4,354,226.05 | 673,777,957.17 | 516,478,683.84 | 5,051,867.60 | 511,426,816.24 |
| Development costs | 30,299,350.36 | 30,299,350.36 | 34,272,995.11 | 34,272,995.11 | ||
| Others | 2,635,112.28 | 2,635,112.28 | ||||
| Total | 721,885,804.28 | 4,354,226.05 | 717,531,578.23 | 561,891,193.10 | 5,051,867.60 | 556,839,325.50 |
Whether the company shall comply with the disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure GuideNo. 4－Listed Companies Engaged in the Seed Industry and Planting BusinessNoThe company shall comply with the disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guide No. 11
－Listed Companies Engaged in the Jewelry Related BusinessNo
（2）Depreciation Reserve of Inventories
Unit: Yuan
| Items | Opening balance | Amount increased of current period | Amount decreased of current period | Ending balance | ||
| Withdrawn | Others | Transferred-back or written-off | Others | |||
| Completed and unsettled assets formed by the construction contract | 5,051,867.60 | 697,641.55 | 4,354,226.05 | |||
| Total | 5,051,867.60 | 697,641.55 | 4,354,226.05 | |||
（3）Description about Capitalized Amount of Borrowing Costs Contained in Ending Balance of Inventories（4）The completed and unsettled assets formed by the construction contract at the end of the period
Unit: Yuan
| Items | Amount |
| Aggregate costs incurred | 18,506,213,679.77 |
| Aggregate gross profits acknowledged | 4,332,256,515.21 |
| Minus: estimated losses | 4,354,226.05 |
| Amount settled | 22,160,338,011.76 |
| Completed and unsettled assets formed by the construction contract | 673,777,957.17 |
Other description:
8、Assets Held for Sale
Unit: Yuan
| Items | Ending book value | fair value | Estimated disposal cost | Estimated disposal time |
| February 02, 2019 |
| Including: fixed assets | 0.00 | |||
| Investment real estate | 0.00 | |||
| Equity investment | 105,075,792.00 | |||
| 0.00 | February 02, 2019 | |||
| 0.00 | ||||
| Total | 105,075,792.00 | -- |
Other description:
Note: in order to improve the company's financial situation and revitalize its effective assets, the company decided to transfer 94% ofthe equity of Acura Kliniken Baden-Baden GmbH. The company signed the equity transfer agreement with Hong Kong CongzhongInvestment Co., Ltd. on February 2, 2019, with the transfer price of RMB 190 million.
（2）Impairment provision of assets held for sale
| Items | Book value at the beginning of the year | Amount Withdrawn of current period | Amount decreased of current period | Ending balance | |
| Amount recovered | Other amount decreased | ||||
| Non-current assets held for sale | |||||
| Including: fixed assets |
| Investment real estate | |||||
| Equity investment |
| Disposal group held for sale | |||||
| Including: fixed assets |
| Investment real estate | |||||
| Equity investment |
| Total | —— | —— |
（3）At the end of the year, the accumulated amount of other comprehensive incomes related to theabove non-current assets held for sale was RMB 0.00.（4）It is no longer classified as assets held for sale and removal from Disposal group held for sale thisyear: none.
9. Non-current Assets Due Within One Year
Unit: Yuan
| Items | Ending balance | Opening balance |
Other description:
10. Other Non-current Assets
Unit: Yuan
| Items | Ending balance | Opening balance |
| Advance tax | 291,392.34 | 1,779,133.63 |
| Input tax to be deducted or verified | 5,504,405.10 | 15,347,777.42 |
| Total | 5,795,797.44 | 17,126,911.05 |
Other description:
11. Financial Assets Available for Sale（1）Financial assets available for sale
Unit: Yuan
| Items | Ending balance | Opening balance | ||||
| Book balance | Depreciation reserve | Book value | Book balance | Depreciation reserve | Book value | |
| Available-for-sale equity instruments | 10,338,500.00 | 10,338,500.00 | 10,338,500.00 | 10,338,500.00 | ||
| Measured at Costs | 10,338,500.00 | 10,338,500.00 | 10,338,500.00 | 10,338,500.00 | ||
| Total | 10,338,500.00 | 10,338,500.00 | 10,338,500.00 | 10,338,500.00 | ||
（2）Available-for-Sale Financial Assets Measured by Fair Value at the End of Period
Unit: Yuan
| Classification of financial assets available for sale | Available-for-sale equity instruments | Available-for-sale debt instruments: | Total |
（3）Available-for-Sale Financial Assets Measured by Cost at the End of Period
Unit: Yuan
| Invested units | Book balance | Depreciation reserve | Proportion of shares held in invested units (%) | Cash dividends of current period | ||||||
| At the beginning of the year | Amount increased of current period | Amount decreased of current period | Ending amount | At the beginning of the year | Amount increased of current period | Amount decreased of current period | Ending amount | |||
| Zhanjiang Construction & Engineering Co., Ltd. | 10,338,500.00 | 10,338,500.00 | 19.00% | |||||||
| Total | 10,338,500.00 | 10,338,500.00 | -- | |||||||
（4）Changed situations of impairment of financial assets available for sale during the reporting period
Unit: Yuan
| Classification of financial assets available for sale | Available-for-sale equity instruments | Available-for-sale debt instruments: | Total |
（5）Description of the ending fair value of the available-for-sale equity instruments seriously reduced ornon-temporarily reduced with impairment reserve not withdrawn
Unit: Yuan
| Available-for-sale equity instruments project | Investment cost | Ending fair value | The decline in fair value relative to cost | Continuous decline time (months) | Amount of impairment withdrawn | Reason for impairment not withdrawn |
Other description
12. Held-to-maturity Investment（1）Held-to-maturity investment
Unit: Yuan
| Items | Ending balance | Opening balance | ||||
| Book balance | Depreciation reserve | Book value | Book balance | Depreciation reserve | Book value | |
（2）Important held-to-maturity investment at the end of the period
Unit: Yuan
| Bond project | Par value | Par interest rate | Actual interest rate | Due date |
（3）Reclassified held-to-maturity investment of the current period
Other description
13. Long-Term Accounts Receivable（1）Long-Term Accounts Receivable
Unit: Yuan
| Items | Ending balance | Opening balance | Range of discount rate | ||||
| Book balance | Bad debt reserve | Book value | Book balance | Bad debt reserve | Book value | ||
| Long-Term Accounts Receivable | 16,708,613.19 | 16,708,613.19 | 14,328,557.82 | 14,328,557.82 | |||
| Total | 16,708,613.19 | 16,708,613.19 | 14,328,557.82 | 14,328,557.82 | -- |
（2）Long-Term accounts receivable of which the recognition is terminated due to transfer of financial assets
Notes: Sino Great Wall Group Co., Limited, the subsidiary company of the Company, concluded andsigned the cooperation agreement with Hong Kong Yick Hing Construction Co. Ltd. (hereinafter referredto as "Hong Kong Yick Hing”) on October 10, 2017 on the jointly founding of SGW. Yick HingConstruction Engineering (Hong Kong) Limited (hereinafter referred to as "SGW. Yick HingConstruction”), with Sino Great Wall Group Co., Limited contributing HKD 6 million and holding 60%shares and Hong Kong Yick Hing contributing HKD 4 million and holding 40% shares. The business ofSGW. Yick Hing Construction shall be managed by the Board of Directors. There are three seats in theBoard of Directors, with two for Sino Great Wall and one for Hong Kong Yick Hing. However, only thedirector appointed by Yick Hing can serve as the chairman of the Board of Directors meeting, in case ofwhose absence from the Board of Directors meeting, an alternate shall take this place. In the event of thesame votes, the chairman of the Board of Directors meeting has the right to vote the casting vote; theresolution of the Board of Directors shall be issued via the majority vote but the director of Hong KongYick Hing possesses the veto right and has the right to agree that the revenue shall be calculated as thelong-term receivables based on constant rate of return.
（2）Long-term accounts receivable of which the recognition is terminated due to transfer offinancial assets: none.
（3）Amount of assets and liabilities formed through transfer of long-term accounts receivable andcontinuous involvement: none.
（3）Amount of assets and liabilities formed through transfer of long-term accounts receivable and continuousinvolvement
Other description
14. Long-term Equity Investments
Unit: Yuan
| Invested units | Opening balance | Changes of current period | Ending balance | Ending balance of depreciation reserve | |||||||
| Additional investment | Negative investment | Gains and losses on investments recognized with equity method | Other comprehensive income adjustments | Other changes in equity | Declare the payment of cash dividends or profits | Depreciation reserve withdrawn | Others | ||||
| I. Joint ventures | |||||||||||
| II. Jointly-run enterprises | |||||||||||
| Sino Great Wall Zhihui Housing Property (Zhanjiang) Co., Ltd. | 24,000,000.00 | -420,828.29 | 23,579,171.71 | ||||||||
| Cenang Resort Sdn Bhd | 83,258,639.12 | 83,258,639.12 | |||||||||
| III. Subsidiary | |||||||||||
| AlorVista Development Sdn Bhd | 25,292,312.68 | 25,292,312.68 | 25,292,312.68 | 25,292,312.68 | |||||||
| Subtotal | 49,292,312.68 | 83,258,639.12 | -420,828.29 | 25,292,312.68 | 132,130,123.51 | 25,292,312.68 | |||||
| Total | 49,292,312.68 | 83,258,639.12 | -420,828.29 | 25,292,312.68 | 132,130,123.51 | 25,292,312.68 | |||||
Other description
15. Investment Real Estate（1）Investment real estate using cost measurement
□ Applicable √ Not applicable
（2）Investment real estate using fair value measurement
□ Applicable √ Not applicable
（3）Investment real estate with the certificate of title not transacted
Unit: Yuan
| Items | Book value | Reason(s) for the failure to transact the certificate of title |
Other description
16、Fixed Assets
Unit: Yuan
| Items | Ending balance | Opening balance |
| Fixed assets | 158,746,947.91 | 174,537,150.56 |
| Total | 158,746,947.91 | 174,537,150.56 |
（1）Fixed assets
Unit: Yuan
| Items | Houses and buildings | Mechanical equipment | Transportation Equipment | Transportation equipment | Total |
| I. Original book value | |||||
| 1. Opening balance | 103,857,727.50 | 99,011,854.51 | 41,578,019.37 | 14,847,444.63 | 259,295,046.01 |
| 2. Amount increased of current period | 45,846.63 | 9,855,943.68 | 2,397,598.49 | 788,453.06 | 13,087,841.86 |
| （1）Purchase | 45,846.63 | 9,855,943.68 | 2,397,598.49 | 788,453.06 | 13,087,841.86 |
| （2）Transfer-in of construction in progress | |||||
| （3）Increase of business combination | |||||
| 3. Amount decreased of current period | 565,613.95 | 3,796,972.94 | 4,934,924.28 | 1,685,768.99 | 10,983,280.16 |
| （1）Disposal or retirement | 565,613.95 | 3,796,972.94 | 4,934,924.28 | 1,685,768.99 | 10,983,280.16 |
| 4. Ending balance | 103,337,960.18 | 105,070,825.25 | 39,040,693.58 | 13,950,128.70 | 261,399,607.71 |
| II. Accumulative depreciation | |||||
| 1. Opening balance | 15,127,800.94 | 30,513,047.92 | 16,465,368.36 | 9,502,963.24 | 71,609,180.46 |
| 2. Amount increased of current period | 14,889,879.21 | 10,245,735.16 | 8,611,485.05 | 2,173,342.31 | 35,920,441.73 |
| （1）Withdrawn | 14,889,879.21 | 10,245,735.16 | 8,611,485.05 | 2,173,342.31 | 35,920,441.73 |
| 3. Amount decreased | 223,358.68 | 26,600.00 | 4,624,998.26 | 2,005.45 | 4,876,962.39 |
| of current period | |||||
| （1）Disposal or retirement | 223,358.68 | 26,600.00 | 4,624,998.26 | 2,005.45 | 4,876,962.39 |
| 4. Ending balance | 29,794,321.47 | 40,732,183.08 | 20,451,855.15 | 11,674,300.10 | 102,652,659.80 |
| III. Depreciation reserve | |||||
| 1. Opening balance | |||||
| 2. Amount increased of current period | |||||
| （1）Withdrawn | |||||
| 3. Amount decreased of current period | |||||
| （1）Disposal or retirement | |||||
| 4. Ending balance | |||||
| IV. Book value | |||||
| 1. Ending book value | 73,543,638.71 | 64,338,642.17 | 18,588,838.43 | 2,275,828.60 | 158,746,947.91 |
| 2. Opening book value | 84,132,304.96 | 66,390,485.16 | 20,774,962.84 | 3,239,397.60 | 174,537,150.56 |
（2）Temporarily idle fixed assets
Unit: Yuan
| Items | Original book value | Accumulative depreciation | Depreciation reserve | Book value | Note |
（3）Fixed asset rented through financing lease
Unit: Yuan
| Items | Original book value | Accumulative depreciation | Depreciation reserve | Book value |
| House buildings | 11,152,810.36 | 10,554,734.50 | 598,075.86 | |
| Mechanical equipment | 34,196,914.00 | 18,831,684.59 | 15,365,229.41 |
（4）Fixed assets leased through operating leases
Unit: Yuan
| Items | Ending book value |
（5）Fixed assets with the certificate of title not transacted
Unit: Yuan
| Items | Book value | Reason(s) for the failure to transact the certificate of title |
| Suzhou plants | 8,574,218.59 | Being processed |
| International engineering | 19,863,248.79 | Being processed |
Other description
（6）Disposal of fixed assets
Unit: Yuan
| Items | Ending balance | Opening balance |
Other description
17．Construction in Progress
Unit: Yuan
| Items | Ending balance | Opening balance |
| Construction in progress | 36,697,284.04 | 4,968,590.96 |
| Total | 36,697,284.04 | 4,968,590.96 |
（1）Construction in Progress
Unit: Yuan
| Items | Ending balance | Opening balance | ||||
| Book balance | Depreciation reserve | Book value | Book balance | Depreciation reserve | Book value | |
| Equipment and Construction in progress | 36,697,284.04 | 36,697,284.04 | 4,968,590.96 | 4,968,590.96 | ||
| Total | 36,697,284.04 | 36,697,284.04 | 4,968,590.96 | 4,968,590.96 | ||
（2）Change of Important Projects of Construction in Progress in Current Period
Unit: Yuan
| Name of items | Budget amount | Opening balance | Amount increased of current period | Amount transferred into fixed assets in current period | Other amount decreased in current period | Ending balance | Proportion of accumulative project input to the budget | Project progress | Accumulative amount of interest capitalization | Including: Amount of interest capitalization in the current period | Current interest capitalization rate | Capital source |
| Liangdu Central Hospital of Liupanshui City (tentative name) medical and nursing integration project | 2,630,910.96 | 2,370,537.98 | 5,001,448.94 | |||||||||
| PPP project of the north coast landscape engineering of Huanbaiyang Lake (Central Lake), PPP project of Baiyang Lake Headquarters Economic Port, | 1,112,880.00 | 7,363,471.41 | 8,476,351.41 | 67% |
| Xingang District, Chenglingji, Hunan Province | ||||||||||||
| Construction Project of Radio and Television Media Activity Center, Chengwu County | 15,792,351.48 | 15,792,351.48 | 13% | |||||||||
| Total | 3,743,790.96 | 25,526,360.87 | 29,270,151.83 | -- | -- | -- |
（3）Impairment provision of project under construction withdrawn in the period
Unit: Yuan
| Items | Current withdrawal amount | Reason for withdrawal |
Other description
（4）Engineering materials
Unit: Yuan
| Items | Ending balance | Opening balance | ||||
| Book balance | Depreciation reserve | Book value | Book balance | Depreciation reserve | Book value | |
Other description:
18. Productive Biological Asset（1）Productive biological assets measured at costs
□ Applicable √ Not applicable
（2）Productive biological assets measured according to fair value
□ Applicable √ Not applicable
19. Oil and gas assets
□Applicable √ Not applicable
20. Intangible Assets
（1）Intangible Assets
Unit: Yuan
| Items | Land use right | Patent right | Non-patent technology | Software | Total |
| I. Original book value | |||||
| 1. Opening balance | 132,460,370.94 | 4,551,469.92 | 137,011,840.86 | ||
| 2. Amount increased of current period | |||||
| （1）Purchase | |||||
| （2）Internal research and development | |||||
| （3）Amount decreased of current period | |||||
| 3. Amount decreased of current period | 23,839,368.35 | 23,839,368.35 | |||
| （1）Disposal | |||||
| （2）Consolidation scope reduction | 23,839,368.35 | 23,839,368.35 | |||
| 4. Ending balance | 108,621,002.59 | 4,551,469.92 | 113,172,472.51 | ||
| II. Accumulative amortization | |||||
| 1. Opening balance | 6,882,267.85 | 2,605,128.01 | 9,487,395.86 | ||
| 2. Amount increased of current period | 3,062,788.20 | 902,968.92 | 3,965,757.12 | ||
| （1）Withdrawn | |||||
| 3. Amount decreased of current period | 201,932.14 | 201,932.14 | |||
| （1）Disposal |
| （2）Consolidation scope reduction | 201,932.14 | 201,932.14 | |||
| 4. Ending balance | 9,743,123.91 | 3,508,096.93 | 13,251,220.84 | ||
| III. Depreciation reserve | |||||
| 1. Opening balance | |||||
| 2. Amount increased of current period | |||||
| （1）Withdrawn | |||||
| 3. Amount decreased of current period | |||||
| （1）Disposal | |||||
| 4. Ending balance | |||||
| IV. Book value | |||||
| 1. Ending book value | 98,877,878.68 | 1,043,372.99 | 99,921,251.67 | ||
| 2. Opening book value | 125,578,103.09 | 1,946,341.91 | 127,524,445.00 |
The proportion of ending intangible assets generated via internal R&D of the Company in the balance of intangible assets.
（2）Conditions of land use right with incomplete certificates of title
Unit: Yuan
| Items | Book value | Reason(s) for the failure to transact the certificate of title |
Other description:
21. Development Expenditure
Unit: Yuan
| Items | Opening balance | Amount increased of current period | Amount decreased of current period | Ending balance |
Other description
22. Goodwill(1) Original book value of goodwill
Unit: Yuan
| Name of invested units or the matters forming goodwill | Opening balance | Amount increased of current period | Amount decreased of current period | Ending balance | ||
| Shenzhen Yatian Decoration Design Engineering Co., Ltd. | 6,724,316.91 | 6,724,316.91 | 0.00 | |||
| Wuhan Commercial Workers Hospital LLC | 27,257,314.49 | 27,257,314.49 | ||||
| Sino Great Wall Southwest Engineering Co., Ltd. | 17,948,978.53 | 17,948,978.53 | ||||
| Sino Great Wall Construction Construction Co., Ltd. | 6,943,534.86 | 6,943,534.86 | ||||
| Alor Vista Development Sdn Bhd | 5,609,206.72 | 5,609,206.72 | ||||
| SAFAT GULF GENERAL TRADING & CONTRACTING COMPANY | 5,547,635.00 | 5,547,635.00 | ||||
| Far eastern international engineering company, LLC | 10,920.04 | 10,920.04 | ||||
| Total | 70,041,906.55 | 13,667,851.77 | 5,609,206.72 | 50,764,848.06 | ||
(2) Depreciation Reserve of Goodwill
Unit: Yuan
| Name of invested units or the matters forming goodwill | Opening balance | Amount increased of current period | Amount decreased of current period | Ending balance | ||
| Shenzhen Yatian Decoration Design Engineering Co., Ltd. | ||||||
| Wuhan Commercial Workers Hospital LLC | ||||||
| Sino Great Wall Southwest Engineering Co., Ltd. | 17,948,978.53 | 17,948,978.53 | ||||
| Sino Great Wall Construction Co., Ltd. | ||||||
| Alor Vista Development Sdn Bhd | ||||||
| SAFAT GULF GENERAL TRADING & CONTRACTING COMPANY | 5,547,635.00 | 5,547,635.00 | ||||
| Far eastern international engineering company, LLC | ||||||
| Total | 5,547,635.00 | 17,948,978.53 | 23,496,613.53 | |||
Relevant information of goodwill-related asset group or portfolio
(3) Process of impairment test of goodwillSino Great Wall Southwest Engineering Co., Ltd., a subsidiary of the Company, has stopped allconstruction projects and has negative net assets. Given the failure to project positive future operation, theCompany decides to record full goodwill impairment.
Description of process of goodwill impairment test, key factors (including estimated growth rate at the time of future cash flow valueestimation, growth rate during the stable period, profit rate, discount rate and) and the method to confirm the loss of goodwill impairment:
Influences of goodwill impairment test
Other description
23. Long-term deferred expense
Unit: Yuan
| Items | Opening balance | Amount increased of current period | Amount amortized of current period | Other amount decreased | Ending balance |
| Leasehold improvement | 7,029,913.15 | 1,207,117.00 | 4,103,741.48 | 56,698.69 | 4,076,589.98 |
| Overseas fees for letter of guarantee | 3,095,000.00 | 1,903,525.81 | 1,191,474.19 | ||
| Others | 2,235,044.00 | 775,419.27 | 1,459,624.73 | ||
| Less: Long-term deferred expenses coming due within 1 year | |||||
| Total | 10,124,913.15 | 3,442,161.00 | 6,782,686.56 | 56,698.69 | 6,727,688.90 |
Other description
Deferred income tax assets/deferred income tax liabilities(1) Non-offset deferred income tax assets
Unit: Yuan
| Items | Ending balance | Opening balance | ||
| Deductible temporary difference | (1) Deferred Income Tax Assets | Deductible temporary difference | (1) Deferred Income Tax Assets | |
| Asset depreciation reserve | 700,024,233.95 | 107,117,209.33 | 766,127,594.16 | 118,233,337.36 |
| Deductible losses | 43,486,026.03 | 10,871,506.51 | ||
| Total | 743,510,259.98 | 117,988,715.84 | 766,127,594.16 | 118,233,337.36 |
(2) Non-offset deferred income tax liabilities
Unit: Yuan
| Items | Ending balance | Opening balance | ||
| Taxable temporary difference | Deferred Income Tax Liabilities | Taxable temporary difference | Deferred Income Tax Liabilities | |
| Appraised increment of assets for business combination not under | 97,477,824.72 | 24,369,456.18 | 105,725,885.86 | 26,088,961.71 |
| the same control | ||||
| Total | 97,477,824.72 | 24,369,456.18 | 105,725,885.86 | 26,088,961.71 |
(3) Offset deferred income tax assets or liabilities
Unit: Yuan
| Items | Offset amount of deferred tax assets and liabilities at the end of a period | Balance of deferred tax assets and liabilities at the end of a period | Offset amount of deferred tax assets and liabilities at the beginning of a period | Balance of deferred tax assets and liabilities at the beginning of a period |
| (1) Deferred Income Tax Assets | 117,983,727.91 | 118,233,337.36 | ||
| Deferred Income Tax Liabilities | 24,369,456.18 | 26,088,961.71 |
(4) Details of unconfirmed deferred income tax assets
Unit: Yuan
| Items | Ending balance | Opening balance |
| Deductible temporary difference | 506,759,969.56 | 20,178,730.17 |
| Deductible losses | 1,297,146,979.98 | 79,207,601.38 |
| Total | 1,803,906,949.54 | 99,386,331.55 |
(5) Deductible losses of unconfirmed deferred income tax assets due in the following years
Unit: Yuan
| Year | Ending balance | Opening balance | Note |
Other description:
25. Other non-current assets
Unit: Yuan
| Items | Ending balance | Opening balance |
| PPP Project investment | 664,524,570.00 | 610,524,570.00 |
| Advance payment for purchasing long-term assets | 129,221,120.79 | 283,729,420.79 |
| Other project investment | 121,953,450.20 | 175,340,581.32 |
| Others | 8,810,652.00 | |
| Less: Amount due within a year | ||
| Total | 924,509,792.99 | 1,069,594,572.11 |
Other description:
(1) Description of PPP Project
| Projects | Registered capital (ten thousand Yuan) | Subscribed investment amount (ten thousand Yuan) | Shareholding proportion | Opening amount (ten thousand Yuan) | Amount increased of current period (ten thousand Yuan) | Amount decreased of current period | Closing amount (ten thousand Yuan) |
| Luyi Shuguang Medical Industrial Investment Construction Co., Ltd. | 9,600.00 | 4,896.00 | 51% | 4,896.00 | 4,896.00 | ||
| Huichang County Sino Great Wall Medical Industrial Construction Service Co., Ltd. | 9,559.00 | 8,507.51 | 89% | 8,507.51 | 8,507.51 | ||
| Sino Great Wall (Fugou) High-speed Railways District Investment Co., Ltd. | 13,050.65 | 7,830.39 | 60% | 7,830.39 | 7,830.39 |
| Anyang Sino Great Wall Medical Management Service Co., Ltd. | 26,680.00 | 25,346.00 | 90% | 25,346.00 | 25,346.00 |
| Sino Great Wall (Fugou) Jialu River Comprehensive Treatment Investment Co., Ltd. | 3,986.16 | 3,587.54 | 90% | 200.00 | 3,600.00 | 3,800.00 | |
| Sino Great Wall (Fugou) Fitness Center Investment Co., Ltd. | 4,191.00 | 3,771.90 | 90% | 3,772.56 | 3,772.56 | ||
| Sino Great Wall Shaanxi Fuyan Industrial Park Investment Co., Ltd. | 5,000.00 | 4,500.00 | 90% | 4,500.00 | 4,500.00 |
| Wuchuan City Sino Great Wall People’s Hospital Investment CO., Ltd. | 21,700.00 | 17,360.00 | 80% | 800.00 | 800.00 | ||
| Wuchuan City Sino Great Wall Chinese Medicine Hospital Investment CO., Ltd. | 6,000.00 | 4,800.00 | 80% | 0.00 | |||
| Guizhou Hongqiao Sino Great Wall Healthcare Real Estate Investment Co., Ltd. | 15,200.00 | 11,400.00 | 80% | 1,000.00 | 1,000.00 |
| Gongxian Sino Healthcare Investment Co., Ltd. | 15,000.00 | 13,500.00 | 40% | 6,000.00 | 6,000.00 | ||
| Total | 66,386.81 | 51,393.34 | 61,052.46 | 25,700.00 | 66,452.46 |
The PPP Project Company invested by the Company shall be operated in accordance with theestablished way. The rights, obligations, and related activities under which the Project Company becontrolled are established through explicit contract terms or arrangements at the beginning of theestablishment. In addition, there are representatives sent by the government among the members of theBoard of Directors of the Project Company and the variable returns of the Project Company are generallyfixed. The Project Company is not within the control scope of the Company, so the PPP Project Companyis not included in the scope of the consolidation.(2) Advance payment for purchasing long-term assets include: Housing payment of 129,221,120.79RMB which can be used to offset liabilities.
(3) Other project investment
| No. | Company Name | Amount |
| 1 | UPL LAO CO., LTD. | 63,803,450.00 |
| 2 | Sino Hengda Engineering Co., Ltd. | 58,150,000.20 |
| Total | 121,953,450.20 |
26. Short-term Loans(1) Classification of Short-Term Loans
Unit: Yuan
| Items | Ending balance | Opening balance |
| Pledged loan | 50,000,000.00 | 150,000,000.00 |
| Mortgaged loan | 112,696,582.10 | 2,137,870,000.00 |
| Guaranteed loan | 2,650,398,046.91 | 1,114,073,017.67 |
| Credit loan | 49,490,000.00 | |
| Trade acceptance for which endorsement and discounting have been conducted while still being unmatured at the balance sheet date | 75,257,402.88 | |
| Total | 2,862,584,629.01 | 3,477,200,420.55 |
Description for classification of short-term loans:
(2) Description for overdue but unpaid short-term loans
The total overdue but unpaid short-term loans by the end of this period is 1,562,683,719.03 RMB, in which details of significant overdue butunpaid short-term loans are as follow:
Unit: Yuan
| Borrower | Ending balance | Interest rate | Overdue period | Late payment interest rate |
| DBS Bank | 47,081,552.00 | 3.15% | September 27, 2018 | |
| Bank of Ningbo Shenzhen Branch | 43,233,518.83 | 6.09% | June 1, 2018 | |
| Xiamen International Bank Zhuhai Branch | 44,291,741.54 | 7.00% | May 26, 2018 | |
| Chang'an International Trust Co., Ltd. | 115,874,736.70 | 7.00% | June 22, 2018 | |
| Industrial International Trust Co., Ltd. | 100,000,000.00 | 8.60% | August 9, 2018 | |
| Bridge Trust Co., Ltd. | 300,000,000.00 | 7.50% | August 21, 2018 | |
| Shanghai Pudong Development Bank Shenzhen Center District Branch | 70,000,000.00 | 6.09% | August 29, 2018 | |
| Bank of Jiujiang Zhuhai Branch | 97,768,794.96 | August 22, 2018 | ||
| Shenzhen Rural Commercial Bank Futian Branch | 9,200,000.00 | 6.09% | September 16, 2018 | |
| Shenzhen Rural Commercial Bank Meilin Branch | 8,800,000.00 | 6.09% | November 17, 2018 |
| Shenzhen Rural Commercial Bank Meilin Branch | 27,800,000.00 | November 17, 2018 | ||
| China Bohai Bank Shenzhen Branch | 50,000,000.00 | 5.22% | December 21, 2018 | |
| China Bohai Bank Shenzhen Branch | 50,000,000.00 | 5.22% | December 21, 2018 | |
| CITIC Trust Co., Ltd. | 210,000,000.00 | 7.65% | June 28, 2018 | 16.00% |
| Industrial International Trust Co., Ltd. | 100,000,000.00 | 8.00% | September 29, 2018 | |
| Industrial Bank Houhai Branch | 288,633,375.00 | 8.00% | October 17, 2018 | |
| Total | 1,562,683,719.03 | -- | -- | -- |
Other description:
Note: ① The loan is due on September 27, 2018. Considering the Company failed to pay back ontime due to fund shortage, DBS Bank Beijing Branch has withdrawn a guarantee deposit of 50 millionRMB to back up the overdue loan. The loan has not be paid back but DBS Bank has waived furtherinterest charges by September 27, 2018.
27. Changes are measured by the fair value and will be recorded in the gain or loss of the current period
Unit: Yuan
| Items | Ending balance | Opening balance |
Other description:
28. Derived financial liabilities
□ Applicable √ Non-applicable
29. Notes payable and accounts payable
Unit: Yuan
| Items | Ending balance | Opening balance |
| Notes payable | 1,034,087,499.72 | 906,597,988.15 |
| Accounts payable | 892,155,630.43 | 1,719,579,087.62 |
| Total | 1,926,243,130.15 | 2,626,177,075.77 |
(1) Classified presentation of notes receivable
Unit: Yuan
| Type | Ending balance | Opening balance |
| Trade acceptance | 471,267,864.12 | 283,190,010.00 |
| Bank acceptance | 562,819,635.60 | 623,407,978.15 |
| Total | 1,034,087,499.72 | 906,597,988.15 |
Overdue but unpaid notes receivable by the end of the period is 427,190,071.71 RMB.
(2) Presentation of accounts payable
Unit: Yuan
| Items | Ending balance | Opening balance |
| Project construction cost | 870,866,176.06 | 1,704,130,649.60 |
| Payment for purchasing long-term assets | ||
| Payment for medicine | 17,497,130.23 | 15,448,438.02 |
| Others | 3,792,324.14 | |
| Total | 892,155,630.43 | 1,719,579,087.62 |
(3) Significant accounts receivable with account age of more than 1 year
Unit: Yuan
| Items | Ending balance | Causes for non-payment or carryover |
Other description:
30. Items received in advance(1) Presentation of items received in advance
Unit: Yuan
| Items | Ending balance | Opening balance |
| Unfinished project with settled construction cost | 10,850,086.84 | |
| Advance payment for project construction cost | 391,350,850.34 | 145,513,588.44 |
| Advance payment for medical treatment | 845,407.87 | 866,264.23 |
| Advance payment for lease | 43,733,325.87 | |
| Advance payment for rent | 31,322,073.00 | |
| Total | 478,101,743.92 | 146,379,852.67 |
(2) Significant items received in advance with account age of more than 1 year
Unit: Yuan
| Items | Ending balance | Causes for non-payment or carryover |
(3) Description for unfinished project with settled construction cost due to end-of-period contract conclusion
Unit: Yuan
| Items | Amount |
| Accrued occurred cost | 1,449,011,469.60 |
| Accrued recognized gross profit | 290,007,053.46 |
| Settled amount | 1,749,868,609.90 |
| Unfinished project with settled construction cost arising from contract conclusion | -10,850,086.84 |
Other description:
31. Long-term payroll payable(1) Presentation of long-term payroll payable
Unit: Yuan
| Items | Opening balance | Amount increased of current period | Amount decreased of current period | Ending balance |
| I. Short-term remuneration | 20,727,897.18 | 368,573,235.31 | 303,232,214.76 | 86,068,917.73 |
| 2. Post-demission welfare - defined contribution plans | 1,183,644.89 | 20,080,481.96 | 20,918,185.73 | 345,941.13 |
| Total | 21,911,542.07 | 388,653,717.27 | 324,150,400.49 | 86,414,858.86 |
(2) Presentation of short-term remuneration
Unit: Yuan
| Items | Opening balance | Amount increased of current period | Amount decreased of current period | Ending balance |
| 1. Salary, bonus, allowance and subsidy | 20,075,245.00 | 324,705,806.14 | 259,868,209.60 | 84,912,841.53 |
| 2. Employees’ welfare expense | 23,251,690.71 | 22,328,108.54 | 923,582.18 | |
| 3. Social insurance premium | 599,087.72 | 11,728,150.40 | 12,274,222.84 | 53,015.28 |
| Including: Medical insurance premium | 504,031.41 | 10,323,842.07 | 10,824,592.08 | 3,281.40 |
| Industrial injury insurance premium | 22,668.30 | 594,546.56 | 601,117.51 | 16,097.35 |
| Maternity insurance premium | 72,388.01 | 809,761.77 | 848,513.25 | 33,636.53 |
| 4. Housing fund | 53,564.46 | 8,084,058.90 | 7,958,144.62 | 179,478.74 |
| 5. Labor union outlay and employees’ education outlay | 803,529.16 | 803,529.16 | ||
| Total | 20,727,897.18 | 368,573,235.31 | 303,232,214.76 | 86,068,917.73 |
(3) Presentation of Drawing Plans Set Up
Unit: Yuan
| Items | Opening balance | Amount increased of current period | Amount decreased of current period | Ending balance |
| 1. Basic pension insurance | 1,154,346.00 | 19,327,824.90 | 20,136,651.60 | 345,519.30 |
| 2. Unemployment insurance premium | 29,298.89 | 752,657.06 | 781,534.13 | 421.83 |
| Total | 1,183,644.89 | 20,080,481.96 | 20,918,185.73 | 345,941.13 |
Other description:
32. Taxes payable
Unit: Yuan
| Items | Ending balance | Opening balance |
| Value-added tax | 85,518,697.30 | 32,678,325.28 |
| Enterprise income tax | 221,830,373.42 | 239,018,994.88 |
| Personal income tax | 6,468,895.33 | 374,031.94 |
| Urban maintenance and construction tax | 4,026,082.61 | 3,928,587.22 |
| Educational surtax | 3,001,921.43 | 2,983,381.35 |
| Other taxes | 73,111,917.43 | 78,462,157.04 |
| Total | 393,957,887.52 | 357,445,477.71 |
Other description:
None
33. Other accounts payable
Unit: Yuan
| Items | Ending balance | Opening balance |
| Interest payable | 280,806,670.49 | 16,105,263.85 |
| Dividends payable | 8,541,818.64 | |
| Other accounts payable | 1,923,064,481.30 | 520,965,421.13 |
| Total | 2,212,412,970.43 | 537,070,684.98 |
(1) Interest payable
Unit: Yuan
| Items | Ending balance | Opening balance |
| Payment of principal at maturity and interest in installments | 142,367,316.80 | 10,819,629.22 |
| Interest payable on short-term loans | 137,060,010.22 | 5,285,634.63 |
| Interests withdrawn for overdue notes | 1,379,343.47 | |
| Total | 280,806,670.49 | 16,105,263.85 |
Significant overdue but unpaid interest
Unit: Yuan
| Borrower | Overdue amount | Causes for overdue |
| Great Wall Guoxing Financial Leasing Co., Ltd. | 1,862,398.37 | Capital shortage |
| CITIC Trust Co., Ltd. | 18,755,539.19 | Capital shortage |
| Industrial International Trust Co., Ltd. | 11,534,803.45 | Capital shortage |
| Industrial Bank Houhai Branch | 11,388,850.54 | Capital shortage |
| Bohai International Trust Co., Ltd. | 25,430,142.49 | Capital shortage |
| Xiamen International Bank Zhuhai Branch | 4,236,900.04 | Capital shortage |
| Bank of Ningbo Shenzhen Branch | 4,149,615.44 | Capital shortage |
| Shenzhen Rural Commercial Bank Futian Branch | 326,957.92 | Capital shortage |
| Wanxiang Trust Co., Ltd. | 6,164,383.56 | Capital shortage |
| Zhongjiang International Trust Co., Ltd. | 48,926,568.27 | Capital shortage |
| Baoshang Bank Shenzhen Branch | 16,118,737.07 | Capital shortage |
| Shenzhen Rural Commercial Bank Meilin Branch | 1,036,262.79 | Capital shortage |
| China Bohai Bank Shenzhen Branch | 2,760,164.38 | Capital shortage |
| Shaanxi International Trust Co., Ltd. | 18,150,565.60 | Capital shortage |
| Chang'an International Trust Co., Ltd. | 7,952,291.31 | Capital shortage |
| Industrial International Trust Co., Ltd. | 14,470,421.04 | Capital shortage |
| Bridge Trust Co., Ltd. | 36,052,715.11 | Capital shortage |
| Shanghai Pudong Development Bank Shenzhen Center District Branch | 3,738,211.58 | Capital shortage |
| Bank of Jiujiang Zhuhai Branch | 6,599,149.57 | Capital shortage |
| China Minsheng Bank Shenzhen Branch | 4,286,407.31 | Capital shortage |
| Shanghai Pudong Development Bank Fulicheng Subbranch | 6,317,529.17 | Capital shortage |
| China Railway Trust Co., Ltd. | 2,724,608.75 | Capital shortage |
| Ping'an International Financial Leasing Co., Ltd. | 816,385.59 | Capital shortage |
| Bank of Beijing Shuangxiu Subbranch | 24,843,680.56 | Capital shortage |
| Total | 278,643,289.10 | -- |
Other description:
(2) Dividends payable
Unit: Yuan
| Items | Ending balance | Opening balance |
| Common stock dividends | 8,541,818.64 | |
| Total | 8,541,818.64 |
Other description, including reasons for significant dividends in arrears for over a year:
(3) Other accounts payable
1) Presentation of other accounts payable by the nature of accounts
Unit: Yuan
| Items | Ending balance | Opening balance |
| Tender bond, performance bond and deposit | 29,414,375.04 | 48,363,917.10 |
| Personal intercourse funds and withheld items | 266,550,420.26 | 14,453,897.51 |
| Intercourse funds of the organization | 841,985,904.64 | 450,793,562.35 |
| Payment for subscription of non-public offerings | 33,536.80 | 4,500,000.00 |
| Others | 785,080,244.56 | 2,854,044.17 |
| Total | 1,923,064,481.30 | 520,965,421.13 |
2) Other significant accounts receivable with account age of more than 1 year
Unit: Yuan
| Items | Ending balance | Causes for non-payment or carryover |
Other description
34. Liabilities held for sale
Unit: Yuan
| Items | Ending balance | Opening balance |
Other description:
None
35. Non-current liabilities coming due within one year
Unit: Yuan
| Items | Ending balance | Opening balance |
| Long-term loans coming due within 1 year | 906,690,152.95 | 820,422,471.45 |
| Long-term account payable coming due within 1 year | 69,029,828.60 | |
| Total | 975,719,981.55 | 820,422,471.45 |
Other description:
None
36. Other Current Liabilities
Unit: Yuan
| Items | Ending balance | Opening balance |
| Output taxes to transfer | 121,529,600.95 | |
| Total | 121,529,600.95 |
Increase or decrease of short-term bonds payable
Unit: Yuan
| Bond name | Par value | Date of issue | Bond period | Issued amount | Opening balance | Issue of current period | Interests withdrawn as per par value | Amortization of premium or discount | Amount repaid of current period | Ending balance |
Other description:
None
37. Long-term loans(2) Classification of long-term loans
Unit: Yuan
| Items | Ending balance | Opening balance |
| Mortgaged loan | 16,839,164.49 | |
| Guaranteed loan | 1,026,690,152.95 | 826,253,306.53 |
| Less: Long-term loans coming due within 1 year (see Note VI, 25) | -906,690,152.95 | |
| Total | 120,000,000.00 | 843,092,471.02 |
Description for classification of long-term loans:
NoneOther description: including the range of interest rate:
None
38. Bonds payable
(1) Bonds payable
Unit: Yuan
| Items | Ending balance | Opening balance |
| First period bond financing plan of Sino Great Wall International Engineering Co., Ltd. in 2017 | 254,801,342.47 | 245,000,000.00 |
| Qianhai Wutong Private Bond No. 2016070 | 100,000,000.00 | |
| Total | 254,801,342.47 | 345,000,000.00 |
(2) Increase or decrease of bonds payable (excluding other financial instruments classified as financial liabilities,like preferred stocks and perpetual bonds, etc.)
Unit: Yuan
| Bond name | Par value | Date of issue | Bond period | Issued amount | Opening balance | Issue of current period | Interests withdrawn as per par value | Amortization of premium or discount | Amount repaid of current period | Other amount decreased | Ending balance |
| 1. Qianhai Wutong | 100,000,000.00 | 1/6/2017 | 1/6/2019 | 99,800,000.00 | 100,000,000.00 | 0.00 | 6,200,000.00 | 106,200,000.00 | 0.00 |
| Private Bond No. 2016070 | |||||||||||
| 2. First period bond financing plan of Sino Great Wall International Engineering Co., Ltd. in 2017 | 245,000,000.00 | 10/31/2017 | 10/31/2020 | 245,000,000.00 | 245,000,000.00 | 0.00 | 9,801,342.47 | 254,801,342.47 | |||
| Subtotal | 345,000,000.00 | 344,800,000.00 | 345,000,000.00 | 0.00 | 16,001,342.47 | 106,200,000.00 | 254,801,342.47 | ||||
| Less: End-of-year amount due within a year (see Note VI, 25) | |||||||||||
| Total | -- | -- | -- | 344,800,000.00 | 345,000,000.00 | 0.00 | 16,001,342.47 | 106,200,000.00 | 254,801,342.47 |
(3) Description of conversion conditions and time for convertible corporate bonds
None
(4) Description of other financial instruments classified as financial liabilities
Basic description of financial instruments including preferred stocks and perpetual bonds issued at the end of a periodNonePresentation of changed situations of financial instruments including preferred stocks and perpetual bonds issued at the end of a period
Unit: Yuan
| Issued financial instruments | Opening | Amount increased of current period | Amount decreased of current period | Ending | ||||
| Amount | Book value | Amount | Book value | Amount | Book value | Amount | Book value | |
Description of other financial instruments classified as financial liabilitiesNoneOther descriptionNone
39. Long-term account payable
Unit: Yuan
| Items | Ending balance | Opening balance |
| Long-term account payable | 322,990.35 | 81,945,567.86 |
| Total | 322,990.35 | 81,945,567.86 |
(1) Presentation of other accounts payable by the nature of accounts
Unit: Yuan
| Items | Ending balance | Opening balance |
| Accrued financial lease outlay | 322,990.35 | 81,945,567.86 |
Other description:
None
(2) Special account payable
Unit: Yuan
| Items | Opening balance | Amount increased of current period | Amount decreased of current period | Ending balance | Reason for formation |
Other description:
None
40. Long-term payroll payable(1) Chart of long-term payroll payable
Unit: Yuan
| Items | Ending balance | Opening balance |
(2) Changed situations of benefit plan measured and set up
Present value of benefit plan measured and set up
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
Asset set up:
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
Net liabilities or net assets of benefit plan measured and set up
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
Explanation on the content of benefit plan set up and related risks, impact on the company’s cash flow, timing and uncertainties:
Explanation on the sensitivity analysis result and significant actuarial assumptions of benefit plan set up:
Other description:
41. Accrued liabilities
Unit: Yuan
| Items | Ending balance | Opening balance | Reason for formation |
| Pending actions | 2,958,723.15 | 3,414,189.15 | |
| Total | 2,958,723.15 | 3,414,189.15 | -- |
Other descriptions, including significant assumptions and appraisal of significant accrued liabilities:
42. Deferred income
Unit: Yuan
| Items | Opening balance | Amount increased of current period | Amount decreased of current period | Ending balance | Reason for formation |
Projects involving governmental subsidy:
Unit: Yuan
| Liability items | Opening balance | Subsidy increased over current period | Amount recorded in non-operating income over current period | Amount recorded in other benefits over current period | Cost offset expenses over current period | Other changes | Ending balance | Related to assets/Related to income |
Other description:
43. Other Non-current liabilities
Unit: Yuan
| Items | Ending balance | Opening balance |
Other description:
None
44. Capital Stock
Unit: Yuan
| Opening balance | Increase/Decrease (+/-) | Ending balance | |||||
| New shares issued | Shares presented for free | Shares converted from public reserve | Others | Subtotal | |||
| Total amount of shares | 1,698,245,011.00 | 1,698,245,011.00 | |||||
Other description:
45. Other equity instruments(1) Basic description of financial instruments including preferred stocks and perpetual bonds issued at the end ofa period(2) Presentation of changed situations of financial instruments including preferred stocks and perpetual bondsissued at the end of a period
Unit: Yuan
| Issued financial instruments | Opening | Amount increased of current period | Amount decreased of current period | Ending | ||||
| Amount | Book value | Amount | Book value | Amount | Book value | Amount | Book value | |
Explanation on the reason for increase, decrease or change of other current equity instruments and the accounting methods:
Other description:
46. Capital reserve
Unit: Yuan
| Items | Opening balance | Amount increased of current period | Amount decreased of current period | Ending balance |
| Capital premium (capital stock premium) | -857,285,524.28 | -857,285,524.28 | ||
| Other capital reserve | -442,064,177.46 | 503,161.67 | -441,561,015.79 | |
| Total | -1,299,349,701.74 | 503,161.67 | -1,298,846,540.07 |
Other description, including explanation on the reason for increase, decrease or change of current special reserve:
47. Inventory stock
Unit: Yuan
| Items | Opening balance | Amount increased of | Amount decreased of | Ending balance |
| current period | current period |
Other description, including explanation on the reason for increase, decrease or change of current inventory stock
48. Other composite benefits
Unit: Yuan
| Items | Opening balance | Amount incurred of current period | Ending balance | ||||
| Amount incurred of current period before taxes | Less: Current gain and loss from conversion of other previous composite benefits | Less: Expense of income tax | After-tax amount attributed to the parent company | After-tax amount attributed to minor shareholders | |||
| II. Other composite benefits to be re-classified as gain and loss | 858,242.13 | -50,380.95 | 858,242.13 | 0.00 | -908,623.08 | 0.00 | -50,380.95 |
| Balance from conversion of foreign-currency financial statements | 858,242.13 | -50,380.95 | -908,623.08 | -50,380.95 | |||
| Total of other composite benefits | 858,242.13 | -50,380.95 | 858,242.13 | 0.00 | -908,623.08 | -50,380.95 | |
Other description, including adjustment of initial carrying amount of hedged items converted from the effective portion of gain or loss ofcash flow hedge
Special reserve
Unit: Yuan
| Items | Opening balance | Amount increased of current period | Amount decreased of current period | Ending balance |
| Work safety expense | 164,231,078.18 | 143,204,995.75 | 21,026,082.43 | |
| Total | 164,231,078.18 | 143,204,995.75 | 21,026,082.43 |
Other description, including explanation on the reason for increase, decrease or change of current special reserve:
50. Surplus reserve
Unit: Yuan
| Items | Opening balance | Amount increased of current period | Amount decreased of current period | Ending balance |
| Statutory surplus reserve | 84,394,441.23 | 84,394,441.23 | ||
| Total | 84,394,441.23 | 84,394,441.23 |
Description, including explanation on the reason for increase, decrease or change of current surplus reserve
51. Undistributed profit
Unit: Yuan
| Items | Amount of current period | Amount of last period |
| Undistributed profit at the end of last period before adjustment | 1,503,103,396.72 | 1,228,970,498.86 |
| Undistributed profit at beginning of the year after adjustment | 1,503,103,396.72 | 1,228,970,498.86 |
| Plus: Net profit attributed to the parent company’s owners in the current period | -1,704,739,736.40 | 380,090,990.83 |
| Common stock dividends payable | 67,929,800.44 | -101,894,700.66 |
| Others | -4,063,392.31 | |
| Ending undistributed profit | -269,566,140.13 | 1,503,103,396.72 |
Details of undistributed profit at beginning of the year:
1) Undistributed profit affected by the tracking and adjustment carried out in accordance with the Accounting Standards for BusinessEnterprises and related regulations.2) Undistributed profit affected by change of accounting methods.3) Undistributed profit affected by significant accounting errors.4) Undistributed profit affected by change of accounting scope after business combination under the same control.5) Undistributed profit affected by other adjustments.
52．Operating Income and Operating Cost
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period | ||
| Income | Cost | Income | Cost | |
| Main businesses | 2,426,404,120.17 | 2,448,895,755.44 | 6,496,576,893.36 | 4,886,041,528.62 |
| Other businesses | 583,566.85 | 604,879.43 | 548,087.16 | 312,971.04 |
| Total | 2,426,987,687.02 | 2,449,500,634.87 | 6,497,124,980.52 | 4,886,354,499.66 |
53．Taxes and Surcharge
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
| Urban maintenance and construction tax | 1,925,156.82 | 1,884,723.85 |
| Educational surtax | 1,461,672.67 | 1,399,860.90 |
| Property tax | 136,902.96 | |
| Land use tax | 95,436.15 | |
| Vehicle and vessel usage tax | 660.00 |
| Stamp duty | 1,136,171.01 | |
| Business tax | -141,646.64 | |
| Other taxes | 34,660.96 | 1,390,067.50 |
| Total | 4,790,660.57 | 4,533,005.61 |
Other description:
54．Selling Expenses
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
| Employee Compensation | 4,952,958.61 | 8,019,452.92 |
| Travel expenses | 169,017.69 | 723,327.21 |
| Business entertainment expense | 430,325.64 | 379,837.66 |
| Advertising and promotion expenses | 16,293.68 | |
| Construction maintenance fees | 20,496,867.63 | 16,040,272.66 |
| Others | 2,251,632.85 | 7,034,063.84 |
| Total | 28,300,802.42 | 32,213,247.97 |
Other description:
55．Management Expenses
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
| Employee Compensation | 179,468,828.70 | 146,060,526.13 |
| Administrative expenses | 6,753,534.24 | 15,110,557.60 |
| Rental | 14,188,202.29 | 19,054,037.35 |
| Travel expenses | 9,449,221.53 | 13,611,200.61 |
| Business entertainment expense | 10,737,792.07 | 8,668,113.32 |
| Depreciation fees of fixed assets | 11,878,149.07 | 11,262,728.55 |
| Vehicle expenses | 1,259,121.59 | 3,538,337.07 |
| Long-term deferred expense amortization | 3,947,660.60 | 4,360,113.43 |
| Consulting fee | 27,870,502.23 | 59,415,179.05 |
| Conference | 140,828.39 | 718,194.44 |
| Litigation Fee | 3,039,464.22 | |
| Intangible asset amortization | 3,522,205.28 | |
| Others | 39,443,290.32 | 31,158,219.65 |
| Total | 311,698,800.53 | 312,957,207.20 |
Other description:
56．R&D Expenses
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
Other description:
57．Financial Expenses
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
| Interest expenditure | 721,751,253.62 | 294,207,584.82 |
| Less: Interest income | 17,750,530.72 | 14,448,977.61 |
| Net Interest Expenses | 704,000,722.90 | 279,758,607.21 |
| Exchange gain or loss | -118,130,856.86 | 124,220,566.01 |
| Discount interest | ||
| Handling charges and others | 20,145,670.19 | 28,611,434.33 |
| Total | 606,015,536.23 | 432,590,607.55 |
Other description:
58．Asset Impairment Loss
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
| I. Bad debt loss | 463,968,319.90 | 316,738,875.97 |
| II. Inventory depreciation loss | -697,641.55 | |
| V. Impairment losses on long-term equity investment | 25,292,312.68 | |
| XIII. Goodwill impairment loss | 17,948,978.53 | 5,547,635.00 |
| Total | 506,511,969.56 | 322,286,510.97 |
Other description:
59．Other Income
Unit: Yuan
| Sources of other income | Amount incurred of current period | Amount incurred of last period |
| Subsidy for post stabilization | 38,940.28 | 250,194.89 |
| Commerce Commission bounty | 1,960,934.00 |
| Return of handling charges on personal income tax | 13,100.20 |
60．Investment Yield
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
| Gain on long-term equity investments subject to accounting with equity method | -420,828.29 | |
| Investment yield obtained from disposal of long-term equity investments | 25,953,835.15 | |
| Proceeds from wealth management products | 4,686,911.15 | -387,601.37 |
| Total | 30,219,918.01 | -387,601.37 |
Other description:
61．Profits from Changes in Fair Value
Unit: Yuan
| Sources of profits from changes in fair value | Amount incurred of current period | Amount incurred of last period |
Other description:
62．Proceeds from Asset Disposal
Unit: Yuan
| Sources of proceeds from asset disposal | Amount incurred of current period | Amount incurred of last period |
| Disposal of fixed assets | -150,250.00 |
63．Non-Operating Income
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period | Amount recorded in the non-recurring gain or loss of current period |
| Gains from debt restructuring | 100,000,000.00 | ||
| Awards for steady growth | 5,526,702.00 | ||
| Nonpayment intercourse funds | 22,972,420.86 | ||
| Gains from disposal of non-current assets | 116,125.14 | ||
| Others | 84,587.85 | 156,426.78 |
| Total | 128,699,835.85 | 156,426.78 |
Governmental subsidies included in gain or loss of current period:
Unit: Yuan
| Subsidy items | Granting subjects | Reasons | Nature/type | Whether subsidies affect gain or loss in the current period | Whether it is special subsidy | Amount incurred of current period | Amount incurred of last period | Related to assets/Related to income |
| Awards for steady growth | 5,526,702.00 | Related to income | ||||||
| Subsidy for post stabilization | 38,940.20 | Related to income | ||||||
| Return of handling charge on personal income tax | 13,100.20 | Related to income |
Other description:
64．Non-Operating Expenditure
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period | Amount recorded in the non-recurring gain or loss of current period |
| Donation outlay | 240,000.00 | ||
| Loss from non-current asset retirement | 1,297,636.91 | 1,297,636.91 | |
| Overdue fine | 11,774,955.74 | 11,774,955.74 | |
| Loss by default | 403,761,833.33 | 403,761,833.33 | |
| Others | 5,133,452.12 | -3,270,152.73 | 5,133,452.12 |
| Total | 395,623,593.98 | -3,030,152.73 |
Other description:
65．Expense of Income Tax(I) Table of Income Tax
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
| Expense of income tax in the current period | 12,135,333.39 | 172,349,309.88 |
| Deferred income tax expenses | -8,853,410.79 | -45,345,578.12 |
| Total | 3,281,922.60 | 127,003,731.76 |
(II) Adjustment Process of Accounting Profit and Expense of Income Tax
Unit: Yuan
| Items | Amount incurred of current period |
| Total profit | -1,716,482,516.80 |
| Expense of income tax calculated with statutory [or applicable] tax rate | -430,354,356.39 |
| Influences of different tax rates applicable to subsidiaries | -3,982,736.66 |
| Influences of non-deductible costs, expenses and losses | 126,689,992.39 |
| Influences of deductible temporary difference or deductible loss of non-confirmed deferred income tax assets in the current period | 304,484,844.65 |
| Expense of income tax | 3,281,922.60 |
Other description:
66．Other Composite Benefits
For more details, please see Notes to Financial Statement.
67．Items of Cash Flow Statement(I) Cash Received Relating to Other Operating Activities
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
| Interest income | 6,994,835.15 | 6,963,410.83 |
| Bond, deposit and other intercourse funds | 4,926,888,796.41 | 6,125,468,343.62 |
| Governmental subsidy | 51,435.00 | 2,211,128.89 |
| Others | 77,749.30 |
| Total | 4,934,012,815.86 | 6,134,642,883.34 |
Description on cash received relating to other operating activities:
(II) Cash Paid Relating to Other Operating Activities
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
| Handling charges | 235,185,395.07 | 25,037,998.96 |
| Warranties and deposit expenses | 190,984,798.40 | 545,286,663.39 |
| Selling Expenses | 1,076,050.17 | 71,903,447.59 |
| Management Expenses | 50,611,015.00 | 305,349,194.66 |
| Current account | 4,051,155,412.98 | 6,022,745,439.52 |
| Others | 11,137.39 | |
| Total | 4,529,023,809.01 | 6,970,322,744.12 |
Description on cash paid relating to other operating activities:
(III) Cash Received Relating to Other Investment Activities
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
Description on cash received relating to other investment activities:
(IV) Cash Paid Relating to Other Investment Activities
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
| Cash balance of subsidiaries in disposal of subsidiaries | 2,990,381.41 | |
| Bond paid for land auction | 131,500,000.00 | |
| Total | 2,990,381.41 | 131,500,000.00 |
Description on cash paid relating to other investment activities:
(V) Cash Received Relating to Other Financing Activities
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
| Received company/personal financing fund | 54,209,648.35 | 166,727,200.00 |
| Non-public warranties | 12,600,000.00 |
| Total | 54,209,648.35 | 179,327,200.00 |
Description on cash received relating to other financing activities:
(VI) Cash Paid Relating to Other Financing Activities
Unit: Yuan
| Items | Amount incurred of current period | Amount incurred of last period |
| Paid company/personal financing fund | 22,511,749.85 | 178,321,283.83 |
| Paid trust deposit | 48,600,000.00 | |
| Paid financing fees | 6,150,000.00 | |
| Others | 1,050.18 | |
| Total | 22,512,800.03 | 233,071,283.83 |
Description on cash paid relating to other financing activities:
68．Supplementary Data of Cash Flow Statement(I) Supplementary Data of Cash Flow Statement
Unit: Yuan
| Supplementary Data | Amount of current period | Amount of last period |
| 1. Net profit adjusted to cash flow of operating activities: | -- | -- |
| Net profit | -1,719,764,439.40 | 384,046,026.83 |
| Plus: Asset depreciation reserve | 506,759,969.56 | 322,286,510.97 |
| Depreciation of fixed assets, depreciation of oil and gas assets, and depreciation of productive biological assets | 35,920,441.73 | 17,923,017.62 |
| Intangible asset amortization | 3,965,757.12 | 2,653,220.75 |
| Long-term deferred expense amortization | 6,782,686.56 | 17,222,764.37 |
| Loss on disposal of fixed assets, intangible assets and other long-term assets (income represented with “－”) | 1,181,511.77 | |
| Loss from fixed asset retirement (Income is represented with “-”) | 150,250.00 | |
| Financial expenses (income represented with “－”) | 721,751,253.62 | 294,207,584.82 |
| Investment loss (income represented with | -29,219,919.01 | 387,601.37 |
| “－”) | ||
| Decrease of deferred income tax assets (increase represented with “－”) | -5,949,436.23 | -41,934,678.02 |
| Increase of deferred income tax liabilities (decrease represented with “－”) | -53,653.31 | -1,380,927.06 |
| Decrease of inventories (increase represented with “－”) | -160,692,252.73 | -222,529,694.72 |
| Decrease of operating items receivable (increase represented with “－”) | 1,284,162,666.35 | -2,467,941,286.77 |
| Increase of operating items payable (decrease represented with “－”) | 183,034,469.42 | -86,959,008.81 |
| Net amount of cash flow from operating activities | 827,879,055.45 | -1,781,868,618.65 |
| 2. Major investment and financing activities not involving cash revenue and expenditure: | -- | -- |
| 3. Net change of cash and cash equivalents: | -- | -- |
| Ending balance of cash | 125,767,796.88 | 647,222,590.48 |
| Less: Opening balance of cash | 647,222,590.48 | 943,705,322.41 |
| Net increment of cash and cash equivalents | -521,454,793.60 | -296,482,731.93 |
(II) Net Amount of Cash Paid for Acquisition of Subsidiaries in Current Period
Unit: Yuan
| Amount | |
| Wherein: | -- |
| Wherein: | -- |
| Wherein: | -- |
Other description:
(III) Net Amount of Cash Received from Disposal of Subsidiaries in Current Period
Unit: Yuan
| Amount | |
| Wherein: | -- |
| Wherein: | -- |
| Wherein: | -- |
Other description:
(IV) Composition of Cash and Cash Equivalents
Unit: Yuan
| Items | Ending balance | Opening balance |
| I. Cash | 125,767,796.88 | 647,222,590.48 |
| Including: Cash on hand | 3,116,229.51 | 4,614,087.17 |
| Bank deposit available for payment anytime | 122,651,567.37 | 642,608,503.33 |
| III. Ending balance of cash and cash equivalents | 125,767,796.88 | 647,222,590.48 |
Other description:
69．Notes to Items in Statement of Changes in Owner’s Equity
Explain names of "other" items that adjust the ending balance of last year and the amount adjusted and other items:
70．Assets with Ownership or Use Right Restricted
Unit: Yuan
| Items | Ending book value | Reason for restriction |
| Monetary Resources | 532,947,089.60 | Guarantee deposit and frozen fund |
| Fixed assets | 15,963,305.27 | Finance lease assets |
| Accounts receivable | 716,094,881.32 | Pledge |
| Total | 1,265,005,276.19 | -- |
Other description:
71．Foreign-Currency Monetary Items(I) Foreign-Currency Monetary Items
Unit: Yuan
| Items | Ending balance in foreign currency | Exchange rate for conversion | Ending balance in RMB after conversion |
| Monetary Resources | -- | -- | |
| Wherein: USD | 1,079,139.41 | 6.8632 | 7,406,349.58 |
| EUR | |||
| HKD | 345,733.97 | 0.8762 | 302,932.10 |
| QAR | 48,391.43 | 1.8848 | 91,210.45 |
| BUK | 24,542,203.15 | 0.0044 | 108,446.54 |
| IDR | 2,955,569.10 | 0.0005 | 1,395.00 |
| Russian Ruble (RUB) | 14,477,133.45 | 0.0986 | 1,427,445.36 |
| PHP | 8,409,386.87 | 0.1306 | 1,098,400.48 |
| MYR | 561,416.73 | 1.6479 | 925,164.25 |
| MOP | 109,037.47 | 0.8500 | 92,680.21 |
| Accounts receivable | -- | -- | |
| Wherein: USD | 61,883,264.10 | 6.8632 | 424,717,218.17 |
| EUR | |||
| HKD | |||
| QAR | 357,701,359.03 | 1.8848 | 674,212,418.07 |
| MYR | 60,603,384.88 | 1.6479 | 99,868,923.99 |
| MOP | 1,362,817.67 | 0.8500 | 1,158,373.92 |
| Advance Payment | |||
| Wherein: USD | 190,698.15 | 6.8632 | 1,308,799.55 |
| Russian Ruble (RUB) | 7,869,840.23 | 0.0986 | 775,966.25 |
| MYR | 121,322.96 | 1.6479 | 199,929.32 |
| Other accounts receivable: | |||
| Wherein: USD | 3,495,233.16 | 6.8632 | 24,030,248.49 |
| EUR | 2,600,000.00 | 7.8473 | 20,402,980.00 |
| HKD | 1,474.18 | 0.8762 | 1,291.68 |
| QAR | 136,466,367.94 | 1.8848 | 257,218,256.48 |
| BUK | 202,697,842.51 | 0.0046 | 936,810.18 |
| Russian Ruble (RUB) | 9,583,296.61 | 0.0986 | 944,913.05 |
| PHP | 146,997.00 | 0.1306 | 19,200.16 |
| MYR | 1,000,168.97 | 1.6479 | 1,648,188.49 |
| LAK | 375,243,716.39 | 0.0008 | 301,125.13 |
| Accounts payable | |||
| Wherein: USD | 38,973,517.01 | 6.8632 | 267,483,041.94 |
| QAR | 5,928,511.95 | 1.8534 | 10,987,967.45 |
| BUK | 1,121,875.00 | 0.0044 | 4,959.81 |
| PHP | 44,130.43 | 0.1306 | 5,764.13 |
| MYR | 26,092,854.29 | 1.6479 | 42,998,675.51 |
| Items Received in Advance: | |||
| Wherein: USD | 354,069.48 | 6.8632 | 2,430,049.66 |
| Other accounts payable: | |||
| Wherein: USD | 608,672.04 | 6.8632 | 4,177,437.95 |
| HKD | 407.62 | 0.8762 | 357.16 |
| PHP | 8,447.15 | 0.1306 | 1,103.33 |
| MYR | 24,542.40 | 1.6479 | 40,443.42 |
| AUD | 6,270.00 | 4.8250 | 30,252.75 |
| Long-term loans | -- | -- | |
| Wherein: USD | |||
| EUR | |||
| HKD | |||
Other description:
(II) Description of Overseas Operating Entities; In Particular, Important Overseas Operating Entities ShouldDisclose Their Main Business Place, Recording Currency and the Basis for Selection; Reasons for Changes in theRecording Currency Should Also Be Disclosed.
√ Applicable □ Not applicable
72．Hedging
Disclosure of hedging items and related hedging instruments and qualitative and quantitative information on hedged risks in accordance withthe hedging category:
73．Governmental Subsidy(I) Basic Facts about Governmental Subsidies
Unit: Yuan
| Type | Amount | Presented items | Amount recorded in the gain or loss of the current period |
(II) Refund of Governmental Subsidy
□ Applicable √ Not applicableOther description:
74. Miscellaneous
VIII. Change of Combination Scope
(I) Business Combination not under the Same Control1. Business combination not under the same control in current term:
Unit: Yuan
| Name of the purchased party | Time point of equity acquisition | Cost of equity acquisition | Proportion of equity acquired | Way to acquire the stock equity | Date of purchasing | Basis for determining the date of purchasing | The purchased party’s income from the date of purchasing to the end of term | The purchased party’s net profit from the date of purchasing to the end of term |
Others：
2. Combination cost and goodwill
Unit: Yuan
| Combination cost |
Method to determine the fair value of combination cost, contingent consideration and its changes:
Main reasons for large amount of goodwill:
Others:
3. Identifiable assets and liabilities of the purchased party on the date of purchasing
Unit: Yuan
| Fair value on the date of purchasing | Book value on the date of purchasing | |
Method to determine the fair value of identifiable assets and liabilities:
Contingent liabilities from the purchased party during the combination:
Others:
4. Gains or losses on re-measurement as per fair value of equity held before the date of purchasingIs there such transaction that realizes combination through several steps of transactions and obtains control right during reporting period?□ Yes √ No
5. Relevant descriptions for failure to reasonably determine combination consideration and fair value of identifiable assets andliabilities of the purchased party on the purchasing date or at the end of current combination term.6. Others(II) Business Combination under the Same Control1. Business combination under the same control in current term
Unit: Yuan
| Name of the combined party | Proportion of gained equities during the combination. | Basis for business combination under the same control | Combination date | Basis for determining the combination date | The combined party’s income from the beginning to the end of the current combination term | The combined party’s net profit from the beginning to the end of the current combination term | The combined party’s income in the comparative period | The combined party’s net profit in the comparative period |
Others:
2. Combination cost
Unit: Yuan
| Combination cost |
Contingent consideration and its changes:
Others:
3. The combined party’s book value of assets and liabilities on the combination date
Unit: Yuan
| Combination date | At the end of the last term | |
Contingent liabilities from the combined party during the combination:
Others:
(III) Counter PurchaseTransaction basic information, basis to determine a transaction as a counter purchase, remaining assets of the listed company, whetherliabilities are part of businesses and basis to determine it, determination of combination cost, adjusted equity amount and its calculation whendealt per equity transaction:
(IV) Disposal of SubsidiariesIs there a single disposal of investments in a subsidiary, that is, loss of control right?√ Yes □ No
Unit: Yuan
| Name of the subsidiary | Price of the stock equity disposal | Proportion of the stock equity disposed | Way of the equity stock disposal | Time point of losing control right | Basis for determining the time point of losing control right | Balance between the disposal price and the owned net asset share of the subsidiary corresponding to the disposal investment in the financial statement | Remaining proportion of stock equity at the date of losing control right | Book value of the remaining stock equity at the date of losing control right | Fair value of the remaining stock equity at the date of losing control right | Gain or loss on re-measurement of remaining stock equity as per fair value | Method to determine the fair value of the remaining stock equity at the date of losing control right and major assumptions | Amount of profit and loss on investments converted from other comprehensive gains related to the stock equity investments of the original subsidiary |
| Sino Great Wall (Beijing) Investment Fund Management Co., Ltd. | 1,000,000.00 | 100.00% | Transfer | January 24, 2018 | Completion of industrial and commercial registration of changes | 6,207.57 | ||||||
| Sino Great Wall Zhihui Housing Property (Zhanjiang) Co., Ltd. | 84,000,000.00 | 56.00% | Transfer | August 10, 2018 | Completion of industrial and commercial registration of changes | 72,235,477.48 | 44.00% | 24,000,000.00 | 24,000,000.00 |
| Sino Great Wall Construction Construction Co., Ltd. | 90,000,000.00 | 60.00% | Transfer | December 06, 2018 | Completion of industrial and commercial registration of changes | 22,054,227.07 | ||||||
| Guangzhou Herabenna Interior Design Co., Ltd. | 1.00 | 100.00% | Transfer | October 16, 2018 | Completion of industrial and commercial registration of changes | -565,924.41 | ||||||
| Shenzhen Yatian Decoration Design Engineering Co., Ltd. | 5,500,000.00 | 70.00% | Transfer | January 18, 2018 | Completion of industrial and commercial registration of changes | 15,953,394.16 |
OthersIs there disposal by steps of investments in a subsidiary through several transactions and losing control right in the current term?□ Yes √ No(V) Changes of Combination Scope for Other ReasonsDescribing other reasons for the changes of combination scope (e.g. newly-established subsidiary, liquidation of a subsidiary) and relatedmatters:
6. Miscellaneous
IX. Equity in Other Subjects
(I) Equity in Subsidiaries1. Composition of the enterprise group
| Name of the subsidiary | Main business place | Registered place | Business nature | Shareholding proportion | Acquisition method | |
| Direct | Indirect | |||||
About a subsidiary’s shareholding proportion different from voting proportion:
Basis for controlling the invested party while holding half or less voting rights and not controlling the invested party despite holding half ormore voting rights:
Basis for controlling the important structured entity incorporated into the combination scope:
Basis to confirm whether a company is an agent or a consignor:
Others:
2. Main non-sole subsidiaries
Unit: Yuan
| Name of the subsidiary | Shares of minority shareholders | Gains and losses of minority shareholders in current term | Dividends declared to minority shareholders in current term | Equity balance of minority shareholders at the end of the term |
About minority shareholders’ shareholding proportion different from voting proportion:
Others:
3. Main financial information of important non-sole subsidiaries
Unit: Yuan
| Name of the subsidiary | Ending balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
Unit: Yuan
| Name of the subsidiary | Amount incurred of current term | Amount incurred of last term | ||||||
| Operating income | Net profit | Total amount of composite benefits | Cash flow from operating activities | Operating income | Net profit | Total amount of composite benefits | Cash flow from operating activities | |
Others:
4. Major limitations on using corporate group assets and liquidating corporate group liabilities5. Financial and other support for structured entities incorporated into the combined financial statementOthers:
（II） Transactions When Owned Equity Shares of a Subsidiary Changed but Still Control the Subsidiary1. About change of owned equity shares of a subsidiary2. Influence of transactions on parent company’s owned equity and the equity of minority shareholders
Unit: Yuan
Others:
(III). Equity in Joint Ventures and Jointly-run Enterprises1. Important joint ventures and jointly-run enterprises
| Name of the joint venture and jointly-run enterprise | Main business place | Registered place | Business nature | Shareholding proportion | Accountant arrangement method for joint ventures and jointly-run enterprise | |
| Direct | Indirect | |||||
About a joint venture or jointly-run enterprise’s shareholding proportion different from voting proportion:
Basis for holding 20% or less voting rights but exerting important influence, or holding 20% or more voting rights but not exerting importantinfluence:
2. Main financial information of important joint ventures
Unit: Yuan
| Ending balance/Amount incurred of current term | Opening balance/Amount incurred of last term | |
Others:
3. Main financial information of important jointly-run enterprises
Unit: Yuan
| Ending balance/Amount incurred of current term | Opening balance/Amount incurred of last term |
Others:
4. Financial information summary of not important joint ventures and jointly-run enterprises
Unit: Yuan
| Ending balance/Amount incurred of current term | Opening balance/Amount incurred of last term | |
| Joint ventures: | -- | -- |
| Total number of the following items calculated by shareholding proportion | -- | -- |
| Jointly-run enterprises: | -- | -- |
| Total number of the following items calculated by shareholding proportion | -- | -- |
Others:
5. About major limitations on joint ventures and jointly-run enterprises’ capability of capital transfer to the company6. Excess deficit incurred by joint ventures and jointly-run enterprises
Unit: Yuan
| Name of the joint venture and jointly-run enterprise | Accumulated unconfirmed losses accrued in the previous term | Unconfirmed losses of the current term (or shared net profits of the current term) | Accumulated unconfirmed losses in current term |
Others:
7. Unconfirmed undertakings related to the investments of joint ventures8. Contingent liabilities related to the investments of joint ventures or jointly-run enterprises(IV). Important Joint Operation
| Name of the joint operation | Main business place | Registered place | Business nature | Shareholding proportion/Owned shares | |
| Direct | Indirect | ||||
About shareholding proportion or owned shares in the joint operation different from voting proportion:
Basis for classifying a single entity as joint operation:
Others:
5. Equity in structured entities not incorporated into the combined financial statementAbout structured entities not incorporated into the combined financial statement:
6. Others
X. Risks Related to Financial InstrumentsXI. Disclosure of Fair Values1. Closing fair values of assets and liabilities measured with fair value
Unit: Yuan
| Item | Closing fair values | |||
| Level 1 fair value measurement | 第二层次公允价值计量 | 第三层次公允价值计量 | 合计 | |
| I. Continuous fair value measurement | -- | -- | -- | -- |
| II. Non-continuous fair value measurement | -- | -- | -- | -- |
2. Basis for determining market prices of items of continuous and non-continuous Level 1 fair valuemeasurements3. Qualitative and quantitative information of estimation techniques and key parameters adopted for items ofcontinuous and non-continuous Level 2 fair value measurements4. Qualitative and quantitative information of estimation techniques and key parameters adopted for items ofcontinuous and non-continuous Level 3 fair value measurements5. Adjustments between the beginning and the closing book values and sensitivity analysis of non-observableparameters for items of continuous Level 3 fair value measurement6. Reasons for and policies for deciding the time for conversion between different levels for items of continuousfair value measurement during the current period7. Estimation technique changes during the current period and reasons for the changes8. Fair values of financial assets and financial liabilities non-measured with fair value9. Others
XII. Related Parties and Related Transactions
1. Information about Parent Company of the Company
| Name of Parent Company | Registered place | Business nature | Registered capital | Shareholding proportion of | Voting right proportion of |
| Parent Company to the Company | Parent Company to the Company | ||||
Description about Parent Company of the CompanyThe final controller of the Company is Chen Lue.Other description:
2. Information about Subsidiaries of the Company
Please refer to Note VIII. 1 “Equity in Subsidiaries”.
3. Information about Joint Ventures and Associates of the Company
Please refer to Notes.Other joint ventures or associates that had balances from related party transactions with the Company during the current period or theprevious period:
| Name of joint venture or associate | Relationship with the Company |
| Cenang Resort Sdn Bhd | An associate of which the Company holds 40% shares |
Other description
4. Information about Other Related Parties
| Name of other related party | Relationship with the Company |
| Shenzhen Hualian Development Investment Co., Ltd. | An affiliated company of shareholder |
| Kunwu Jiuding Investment Management Co., Ltd. | Bai Bin, a former director of the Company, acts as its Investment Director |
| Shanghai Heyi Supply Chain Management Co., Ltd. | Wang Lei, a former director of the Company, acts as its director |
| Sino Great Wall (Beijing) Investment Fund Management Co., Ltd. | A company controlled by the actual controller |
| Qinghai Heyi Commerce Co., Ltd. | A company controlled by Wang Lei, a former director of the Company |
| Sino Great Wall Investment (Beijing) Co., Ltd. | A company controlled by Chen Lve, a director of the Company |
| Yang Chunling | Secretary to the Board of Directors of the Company |
| Fang Xianzhong | Vice President of the Company |
| Chen Lve | Actual controller of the Company |
| He Sen | Brother-in-law of the shareholder and actual controller of the Company |
| Luyi Shuguang Medical Industrial Investment Construction Co., Ltd. | A PPP Project Company controlled by the Company |
| Huichang County Sino Great Wall Medical Industrial Construction Service Co., Ltd. | A PPP Project Company controlled by the Company |
| Sino Great Wall (Fugou) High-speed Railways District Investment Co., Ltd. | A PPP Project Company controlled by the Company |
| Anyang Sino Great Wall Medical Management Service Co., Ltd. | A PPP Project Company controlled by the Company |
| Sino Great Wall (Fugou) Jialu River Comprehensive Control Investment Co., Ltd. | A PPP Project Company controlled by the Company |
| Sino Great Wall (Fugou) National Fitness Center Investment Co., Ltd. | A PPP Project Company controlled by the Company |
| Sino Great Wall Shaanxi Fuyan Industrial Park Investment Co., Ltd. | A PPP Project Company controlled by the Company |
| Wuchuan City Sino Great Wall People’s Hospital | A PPP Project Company controlled by the Company |
| Wuchuan Sino Great Wall TCM Hospital Investment Co., Ltd. | A PPP Project Company controlled by the Company |
| Guizhou Hongqiao Sino Great Wall Medical Real Estate Investment Co., Ltd. | A PPP Project Company controlled by the Company |
Other description
5. Related Transaction（1）Related transactions for the provision and receipt of labor services for merchandises purchased and sold
Purchase goods/Service acceptance
Unit: Yuan
| Related Party | Content of related transactions | Current amount | Approved transaction quota | Whether exceed the transaction limited | Last Amount |
Purchase goods/Service acceptance
Unit: Yuan
| Related Party | Content of related transactions | Current amount | Last Amount |
| Sino Great Wall (Fugou) High-speed Railways District Investment Co., Ltd. | PPP project construction | 108,664,988.71 | |
| Sino Great Wall (Fugou) Fitness Center Investment Co., Ltd. | PPP project construction | 42,981,344.98 | |
| Sino Great Wall People’s Hospital Co., Ltd. in Wuchuan | PPP project construction | 21,553,398.06 | |
| Sino Great Wall Traditional Chinese Medicine Investment Co., Ltd. in Wuchuan | PPP project construction | 19,149,594.63 | |
| Total | 119,209,440.10 | 347,760,072.27 | |
Related transactions for the provision and receipt of labor services for merchandises purchased and sold
（2）Related Trusteeship/contract and entrusted management/packaging situation
Table on company’s trusteeship/contract
Unit: Yuan
| Name of | Name of | Type of asset | Beginning date | End date of | Pricing basis of | Confirmed |
| entrusting/contract-out part | trustee/contracting party | trustee/contracting | of trustee/contracting | trustee/contracting | trustee earning/contracting earning | trustee earning/contract earning |
Note of related trustee/contractingTable on company’s trusteeship/contract-out
Unit: Yuan
| Name of entrusting/contract-out part | Name of trustee/contracting party | Type of asset trustee/contracting | Beginning date of trustee/contracting | End date of trustee/contracting | Pricing basis of trustee earning/contracting-out earning | Confirmed trustee earning/contract earning |
Note of related trustee/contracting
（3）Related tenancy situation
The company as the lessor
Unit: Yuan
| Name of renter | Type of leased assets | Current confirmed rental income | Last confirmed rental income |
The company as the renter:
Unit: Yuan
| Name of renter | Type of leased assets | Current confirmed rental income | Last confirmed rental income |
Note of related tenancy situation
（4）Related guarantee situation
The company as the guarantee:
Unit: Yuan
| Secured party | Amount guaranteed | Beginning date of guarantee | End date of guarantee | Finished or yet |
| Sino Great Wall Co., Ltd. | 200,000,000.00 | 2017. 01 .13 | 2018.01.12. | Yes |
| Sino Great Wall Co., Ltd. | 200,000,000.00 | 2018.01.17. | 2019.01.16. | No |
| Sino Great Wall Co., Ltd. | 800,000,000.00 | 2017.04.17. | 2018.10.17. | No |
| Sino Great Wall Co., Ltd. | 50,000,000.00 | 2017.05.17. | 2018.05.16. | No |
| Sino Great Wall Co., Ltd. | 400,000,000.00 | 2017.06.23. | 2018.06.22. | No |
| Sino Great Wall Co., Ltd. | 2017.07.10. | 2018.07.09. | No | |
| Sino Great Wall Co., Ltd. | 2017.08.24. | 2018.08.23. | No | |
| Sino Great Wall Co., Ltd. | 100,000,000.00 | 2017.06.28. | 2018.12.21. | No |
| Sino Great Wall Co., Ltd. | 100,000,000.00 | 2017.08.09. | 2018.08.08. | No |
| Sino Great Wall Co., Ltd. | 130,000,000.00 | 2017.08.22. | 2018.08.21. | Yes |
| Sino Great Wall Co., Ltd. | 2017.08.23. | 2018.08.22. | Yes | |
| Sino Great Wall Co., Ltd. | 130,000,000.00 | 2018.09.30. | 2019.09.29. | No |
| Sino Great Wall Co., Ltd. | 2018.11.02. | 2019.09.29. | No | |
| Sino Great Wall Co., Ltd. | 200,000,000.00 | 2017.08.30. | 2018.08.30. | Yes |
| Sino Great Wall Co., Ltd. | 200,000,000.00 | 2018.09.08. | 2019.03.08. | No |
| Sino Great Wall Co., Ltd. | 50,000,000.00 | 2017.11.17. | 2018.11.17. | No |
| Sino Great Wall Co., Ltd. | 200,000,000.00 | 2017.10.26. | 2018.05.27. | No |
| Sino Great Wall Co., Ltd. | 100,000,000.00 | 2016.10.27. | 2017.10.27. | No |
| Sino Great Wall Co., Ltd. | 200,000,000.00 | 2016.04.19. | 2018.04.19. | No |
| Sino Great Wall Co., Ltd. | 400,000,000.00 | 2016.06.28. | 2018.06.27. | No |
| Sino Great Wall Co., Ltd. | 300,000,000.00 | 2017.05.10. | 2020.05.10. | No |
| Sino Great Wall Co., Ltd. | 200,000,000.00 | 2017.08.03. | 2019.02.03. | No |
| Sino Great Wall Co., Ltd. | 2017.08.10. | 2019.02.10. | No | |
| Sino Great Wall Co., Ltd. | 2017.08.16. | 2019.02.16. | No | |
| Sino Great Wall Co., | 2017.08.03. | 2019.08.03. | No |
| Ltd. | ||||
| Sino Great Wall Co., Ltd. | 2017.08.10. | 2019.08.10. | No | |
| Sino Great Wall Co., Ltd. | 2017.08.16. | 2019.08.16. | No | |
| Sino Great Wall Co., Ltd. | 300,000,000.00 | 2017.09.18. | 2019.09.18. | No |
| Sino Great Wall Co., Ltd. | 2017.09.25. | 2019.09.25. | No | |
| Sino Great Wall Co., Ltd. | 2017.09.29. | 2019.09.29. | No | |
| Sino Great Wall Co., Ltd. | 2017.10.13. | 2019.10.13. | No | |
| Sino Great Wall Co., Ltd. | 2017.10.18. | 2019.10.18. | No | |
| Sino Great Wall Co., Ltd. | 160,000,000.00 | 2018.04.04. | 2019.04.03. | No |
| Sino Great Wall Co., Ltd. | 2018.04.04. | 2019.10.03. | No | |
| Sino Great Wall Co., Ltd. | 250,000,000.00 | 2017.01.11. | 2018.01.10. | No |
| Sino Great Wall Co., Ltd. | 100,000,000.00 | 2016.09.30. | 2018.09.29. | No |
| Sino Great Wall Co., Ltd. | 101,590,000.00 | 2018.12.28. | 2019.12.28. | No |
| Sino Great Wall Co., Ltd. | 500,000,000.00 | 2016.11.12. | 2017.11.12. | Yes |
| Sino Great Wall Co., Ltd. | 700,000,000.00 | 2017.11.16. | 2018.11.05. | No |
| Sino Great Wall Co., Ltd. | 130,000,000.00 | 2016.10.28. | 2017.09.28. | No |
| Sino Great Wall Co., Ltd. | 70,000,000.00 | 2017.02.28. | 2018.02.27. | Yes |
| Sino Great Wall Co., Ltd. | 120,000,000.00 | 2018.03.12. | 2019.03.11. | No |
| Sino Great Wall Co., Ltd. | 200,000,000.00 | 2017.04.11. | 2018.03.31. | Yes |
| Sino Great Wall Co., Ltd. | 180,000,000.00 | 2017.01.03. | 2018.01.02. | Yes |
| Sino Great Wall Co., Ltd. | 120,000,000.00 | 2017.06.07. | 2018.05.22. | Yes |
| Sino Great Wall Co., Ltd. | 119,900,000.00 | 2018.08.22. | 2019.08.21. | No |
| Sino Great Wall Co., Ltd. | 400,000,000.00 | 2017.07.25. | 2018.07.24. | No |
| Sino Great Wall Co., Ltd. | 220,000,000.00 | 2017.06.30. | 2018.06.30. | No |
| Sino Great Wall Co., Ltd. | 200,000,000.00 | 2017.10.18. | 2018.10.17. | No |
| Sino Great Wall Co., Ltd. | 100,000,000.00 | 2017.11.22. | 2018.11.21. | No |
| Sino Great Wall Co., Ltd. | 84,000,000.00 | 2017.03.31. | 2019.09.30. | No |
| Sino Great Wall Co., Ltd. | 100,000,000.00 | 2017.11.30. | 2018.11.30. | No |
| Sino Great Wall Co., Ltd. | 80,000,000.00 | 2018.02.13. | 2019.02.13. | No |
| Sino Great Wall Co., Ltd. | 200,000,000.00 | 2017.12.28. | 2018.12.27. | No |
| Sino Great Wall Construction Co. LTD. | 50,000,000.00 | 2017.09.30. | 2018.09.29. | No |
| Wuhan Business Professional Hospital Co., Ltd. | 108,898,099.51 | 2017.01.18. | 2020.01.17. | No |
The company as the secured party
Unit: Yuan
| Secured party | Amount guaranteed | Beginning date of guarantee | End date of guarantee | Finished or yet |
| Chen Lue, Sino Great Wall Co., Ltd. | 130,000,000.00 | 2016.10.28. | 2017.09.28. | No |
| Sino Great Wall Co., Ltd., Chen Lue | 70,000,000.00 | 2017.02.28. | 2018.02.27. | Yes |
| Sino Great Wall Co., Ltd., Chen Lue | 120,000,000.00 | 2018.03.12. | 2019.03.11. | No |
| Sino Great Wall Co., Ltd., Chen Lue | 200,000,000.00 | 2017.04.11. | 2018.03.31. | Yes |
| Sino Great Wall Co., | 180,000,000.00 | 2017.01.03. | 2018.01.02. | Yes |
| Ltd., Chen Lue, He Feiyan | ||||
| Sino Great Wall Co., Ltd., Chen Lue | 120,000,000.00 | 2017.06.07. | 2018.05.22. | No |
| Sino Great Wall Co., Ltd., Chen Lue, Sino Great Wall Investment (Beijing) Co., Ltd, Suzhou Lvbang Wood Industry Technology Co., Ltd., Sino Great Wall Southwest Engineering Co., Ltd. | 119,900,000.00 | 2018.08.22. | 2019.08.21. | No |
| Chen Lue, Sino Great Wall Zhihui Housing Property (Zhanjiang) Co., Ltd., Wuhan Business Professional Hospital Co., Ltd., China Industry Investment Co., Ltd., Sino Zhigu Industrial (Yueyang) Co., Ltd. | 400,000,000.00 | 2017.07.25. | 2018.07.24. | No |
| Sino Great Wall Co., Ltd., Chen Lue | 220,000,000.00 | 2017.06.30. | 2018.06.30. | No |
| Sino Great Wall Co., Ltd., Chen Lue | 200,000,000.00 | 2017.10.18. | 2019.10.17. | No |
| Sino Great Wall Co., Ltd., Chen Lue | 100,000,000.00 | 2017.11.22. | 2018.11.21. | No |
| Sino Great Wall Co., Ltd., Chen Lue | 84,000,000.00 | 2017.03.31. | 2019.09.30. | No |
| Sino Great Wall Co., Ltd., Chen Lue | 100,000,000.00 | 2017.11.30. | 2018.11.30. | No |
| Beijing Zhongguancun Sci-tech Financing Guaranty Co., Ltd. | 230,000,000.00 | 2016.02.22. | 2018.03.22. | No |
| Beijing Zhongguancun Sci-tech Financing Guaranty Co., Ltd. | 150,000,000.00 | 2018.03.22. | 2020.09.10. | No |
| Chen Lue | 5,500,000.00 | 2015.02.11. | 2018.02.11. | No |
| Chen Lue | 5,500,000.00 | 2015.02.11. | 2018.02.11. | No |
| Chen Lue | 5,500,000.00 | 2015.07.30. | 2018.07.30. | No |
| Chen Lue | 5,500,000.00 | 2015.08.03. | 2018.08.03. | No |
| Chen Lue | 12,000,000.00 | 2016.01.13. | 2018.01.13. | No |
| Chen Lue | 12,000,000.00 | 2016.03.29. | 2018.03.29. | No |
| Chen Lue | 12,000,000.00 | 2016.03.29. | 2018.03.29. | No |
| Beijing Zhongguancun Sci-tech Financing Guaranty Co., Ltd. | 245,000,000.00 | 2017.10.31. | 2020.10.30. | No |
| Sino Great Wall Co., Ltd., Chen Lue | 80,000,000.00 | 2018.02.13. | 2019.02.13. | No |
| Sino Great Wall Co., Ltd., Chen Lue, He Feiyan | 200,000,000.00 | 2017.12.28. | 2018.12.27. | No |
| Beijing Zhongguancun Sci-tech Financing Guaranty Co., Ltd. | 150,000,000.00 | 2017.12.14. | 2019.12.13. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue, He Feiyan | 270,000,000.00 | 2017.03.13. | 2018.03.13. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue, He Feiyan | 200,000,000.00 | 2017.01.13. | 2018.01.12. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 200,000,000.00 | 2018.01.17. | 2019.01.16. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 800,000,000.00 | 2017.04.17. | 2018.10.17. | No |
| Chen Lue | 300,000,000.00 | 2017.08.21. | 2018.08.21. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 50,000,000.00 | 2017.05.17. | 2018.05.16. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 400,000,000.00 | 2017.06.23. | 2018.06.22. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 2017.07.10. | 2018.07.09. | No | |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 2017.08.24. | 2018.08.23. | No | |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 200,000,000.00 | 2017.06.28. | 2018.12.21. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 100,000,000.00 | 2017.08.09. | 2018.08.08. | No |
| Sino Great Wall International Engineering Co., Ltd. | 130,000,000.00 | 2017.08.22. | 2018.08.22. | No |
| Sino Great Wall International Engineering Co., Ltd. | 2017.08.23. | 2018.08.22. | No | |
| Sino Great Wall International Engineering Co., Ltd. | 130,000,000.00 | 2018.09.30. | 2019.09.29. | No |
| Sino Great Wall International Engineering Co., Ltd. | 2018.11.02. | 2019.09.29. | No | |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 200,000,000.00 | 2017.08.30. | 2018.08.30. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 200,000,000.00 | 2018.09.08. | 2018.08.30. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 50,000,000.00 | 2017.11.17. | 2018.11.17. | No |
| Sino Great Wall International | 200,000,000.00 | 2017.10.26. | 2018.05.27. | No |
| Engineering Co., Ltd., Chen Lue | ||||
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 100,000,000.00 | 2016.10.27. | 2017.10.27. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue, He Feiyan | 200,000,000.00 | 2016.04.19. | 2018.04.19. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 400,000,000.00 | 2016.06.28. | 2018.06.27. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue, He Feiyan | 300,000,000.00 | 2017.05.10. | 2020.05.10. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 200,000,000.00 | 2017.08.03. | 2019.02.03. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 2017.08.10. | 2019.02.10. | No | |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 2017.08.16. | 2019.02.16. | No | |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 2017.08.03. | 2019.08.03. | No | |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 2017.08.10. | 2019.08.10. | No | |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 2017.08.16. | 2019.08.16. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 300,000,000.00 | 2017.09.18. | 2019.09.18. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 2017.09.25. | 2019.09.25. | No | |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 2017.09.29. | 2019.09.29. | No | |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 2017.10.13. | 2019.10.13. | No | |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 2017.10.18. | 2019.10.18. | No | |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 250,000,000.00 | 2017.01.11. | 2018.01.10. | No |
| Chen Lue, He Feiyan | 600,000,000.00 | 2017.04.07. | 2018.04.07. | Yes |
| Chen Lue | 100,000,000.00 | 2017.04.28. | 2018.04.28. | Yes |
| Chen Lue, He Feiyan, Sino China Great Wall Co., Ltd. | 100,000,000.00 | 2016.09.30. | 2018.09.30. | Yes |
| Shenzhen Small and Medium Enterprises Credit Financing Guarantee Group Co., Ltd. | 100,000,000.00 | 2017.01.06. | 2019.01.05. | Yes |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 101,590,000.00 | 2018.12.28. | 2019.12.28. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 500,000,000.00 | 2016.11.12. | 2017.11.12. | No |
| Sino Great Wall International Engineering Co., Ltd., Chen Lue | 160,000,000.00 | 2018.04.04. | 2019.10.03. | No |
| Sino China Great Wall Co., Ltd. | 50,000,000.00 | 2017.09.30. | 2018.09.29. | No |
| Sino China Great Wall Co., Ltd. | 108,898,099.51 | 2017.01.18. | 2020.01.17. | No |
| Sino China Great Wall Co., Ltd., Sino Great Wall International Engineering Co., Ltd., Chen Lue | 32,000,000.00 | 2018.12.21. | 2019.12.20. | No |
Note on related guarantee
（5）Related party fund borrowing
Unit: Yuan
| Related party | Borrowing amount | Beginning date | End date | Note |
| Borrowing | Sino Great Wall Investment (Beijing) Co., Ltd. | 3,590,000.00 | ||
| Lending | ||||
（6）Related party asset transferring and debt restructing
Unit: Yuan
| Related party | Content or related transactions | Current amount | Last amount |
（7）Reward of key management persons
Unit: Yuan
| Project | Current amount | Last amount |
（8）Other related transactions6、Receivables and payables of related party
（1）Receivables
Unit: Yuan
| Project name | Related party | Ending book value | Beginning book value | ||
| Book balance | Reserve for bad-debt | Book balance | Reserve for bad-debt | ||
| JD Capital Investment Management Co., Ltd. and its related party | 77,613.49 | 7,761.35 | 1,227,613.49 | 61,380.67 | |
| Lhasa JD Capital Investment Management Co., Ltd. and its related party | 160,000.00 | 48,000.00 | 160,000.00 | 16,000.00 | |
| Shanghai Heyi Supply Chain Management Co., Ltd | 2,469,164.81 | 246,916.48 | 2,469,164.81 | 123,458.24 | |
| Huichang County Sino Great Wall Medical Industrial Construction Service Co., Ltd. | 78,155,590.97 | 3,907,779.55 | 133,278,732.83 | 6,663,936.64 | |
| Sino Great Wall (Fugou) High-speed Railways District Investment Co., Ltd. | 45,962,983.37 | 2,298,149.17 | |||
| Sino Great Wall (Fugou) Fitness Center Investment Co., Ltd. | 4,445,215.33 | 444,521.53 | 8,545,215.33 | 427,260.77 | |
| Sino Great Wall People’s Hospital Co., Ltd. in Wuchuan | 19,724,082.47 | 986,204.12 | |||
| Total | 105,031,667.07 | 5,641,183.04 | 191,643,709.83 | 9,590,185.49 | |
| Other receivables | |||||
| Yang Chunling | 530,000.00 | 26,500.00 | |||
| Fang Xianzhong | 227,789.60 | 24,066.88 | 227,789.60 | 12,648.96 | |
| Sino Great Wall Investment (Beijing) Co., Ltd. | 9,500.00 | 950.00 | 9,500.00 | ||
| Sino Great Wall Investment (Beijing) Co., Ltd, | 1,060,000.00 | 53,000.00 | |||
| Luyi Shuguang Medical Industrial Investment Construction Co., Ltd. | 4,220,171.89 | 418,999.46 | 4,159,817.24 | 207,990.86 | |
| Sino Great Wall (Fugou) Jialu River Comprehensive Treatment Investment Co., Ltd. | 217,569.20 | 3,851.67 | 19,464.20 | 973.21 | |
| Sino Great Wall Shaanxi Fuyan Industrial Park Investment Co., Ltd. | 5,195,923.58 | 400,761.72 | 2,819,310.85 | 140,965.54 | |
| Sino Great Wall (Fugou) | 23,773,722.22 | 1,188,686.11 | 188,000.00 | 9,400.00 |
| High-speed Railways District Investment Co., Ltd. | |||||
| Sino Great Wall (Fugou) Fitness Center Investment Co., Ltd. | 573,300.00 | 28,665.00 | |||
| Wuchuan City Sino Great Wall People’s Hospital Investment CO., Ltd. | 35,626,341.47 | 1,818,500.17 | 743,661.85 | 37,183.09 | |
| Wuchuan City Sino Great Wall People’s Hospital Investment CO., Ltd. | 343,018.86 | 34,301.89 | 343,018.86 | 17,150.94 | |
| Yanjin County Sino Great Wall Drainage Network Construction Co., Ltd. | 400,000.00 | 20,000.00 | |||
| Total | 72,177,336.82 | 4,018,282.90 | 8,510,562.60 | 426,312.60 | |
（2）Payables
Unit: Yuan
| Project name | Related party | Ending book value | Beginning book value |
| Qinghai Heyi Commercial Co., Ltd. | 3,190,000.00 | ||
| Total | 3,190,000.00 | ||
| Deposit received: | |||
| Qinghai Heyi Commercial | 244,863,301.51 | 0.00 |
| Co., Ltd. | |||
| Wuchuan City Sino Great Wall People’s Hospital Investment CO., Ltd. | 12,360,000.00 | 0.00 | |
| Total | 257,223,301.51 | ||
| Other payables | |||
| Sino Great Wall Investment Co., Ltd. | 3,590,000.00 | ||
| He Sen | 200,000.00 | 628,600.00 | |
| Chen Lue | 153,613.00 | ||
| Yang Chunling | 22,106.90 | ||
| Anyang Sino Great Wall Medical Management Service Co., Ltd. | 159,973,316.87 | 100,000,016.87 | |
| Total | 163,939,036.77 | 100,628,616.87 | |
7. Promise of related party
No
8. Other
XIII. Share payment
1. Overall situation of share payment
□ Applicable √ Not Applicable
2. Share payments settled in equity
□ Applicable √ Not Applicable
3. Share payments settled in cash
□ Applicable √ Not Applicable
4. Modification and termination of share payment
No
5. Other
XIV. Commitments and Contingencies
1. Important commitments
Important commitments on the balance sheet date
1) Outstanding letter of guarantee
In order to ensure the smooth completion of the project, the company, upon the request of theemployer, applied for the issuance of a performance guarantee at a commercial bank or a guaranteeinstitution. By December 31st of 2018, the outstanding letter of guarantee was 1,440,006,713.84yuan, of which 1,044,136,514.99 yuan is the outstanding performance guarantee and204,736,366.85 yuan is the outstanding advance payment guarantee.
The outstanding balance is as follows (exchange rate: 1 USD =6.8632 yuan):
| Item/currency | Amount of RMB guarantee | Amount of USD guarantee ($) | USD-equivalent-to-RMB amount | Total |
| Letter of guarantee that has expired but has not yet been paid in respect of which a claim has been filed before the expiration date ① | 220,208,723.00 | 500,000.00 | 3,431,600.00 | 223,640,323.00 |
| Letter of guarantee that has not expired and has not been settled ② | 826,278,870.95 | 28,988,473.00 | 198,953,687.89 | 1,025,232,558.84 |
| Total outstanding letter of guarantee ③ = ①+② | 1,046,487,593.95 | 29,488,473.00 | 202,385,287.89 | 1,248,872,881.84 |
| Unexpired letter of guarantee which a claim has been filed against but no payment has been made for ④ | 180,000,000.00 | 180,000,000.00 |
| Total outstanding letter of guarantee claimed ⑤=①+④ | 400,208,723.00 | 500,000.00 | 3,431,600.00 | 403,640,323.00 |
2) The company has no other important commitments that need to be disclosed.
2. Contingencies
(1) Important contingencies on the balance sheet date
(1) Contingent liabilities arising from pending litigation/arbitration and their financial implications1) Dispute over the loan contract with Bohai International Trust Co., Ltd.On April 28th of 2017, the company signed a loan agreement with Bohai International Trust Co.,Ltd., with a loan amount of 300 million yuan. Chen Lue and He Feiyan, the actual controllers of SinoGreat Wall International Engineering Co., Ltd.(the company's subsidiary), made a joint liability guarantee.On September 25th of 2018, Bohai International Trust Co., Ltd. filed a lawsuit with the Higher People'sCourt of Hebei Province, requesting the company to pay the principal of 300 million yuan, interest of2,504,316.67 yuan (from June 21st of 2018 to the date of full payment, provisionally calculated untilAugust 6th of 2018), default interest of 2,212,489.89 YUAN (from July 10th of 2018 to the date of fullpayment, provisionally calculated until August 6th of 2018), and liquidated damages of 60 million yuan.Sino Great Wall International Engineering Co., Ltd., Chen Lue and He Feiyan shall bear joint and severalliabilities, and jointly bear lawyer fees of 200,000 YUAN, pre-litigation preservation fees of 5,000 yuanand case acceptance fees.As of the balance sheet date, the case has not yet been concluded.
2) Dispute over the loan contract with China Industrial International Trust LimitedOn July 13th of 2017, the company signed a trust loan agreement with China Industrial InternationalTrust Limited with a loan amount of 100 million yuan. Chen Lue, the actual controller of Sino Great WallInternational Engineering Co., Ltd.(the company's subsidiary), made a joint liability guarantee. OnOctober 9th of 2018, China Industrial International Trust Limited filed a lawsuit with the Higher People'sCourt of Fujian Province, requesting the company to pay the principal of 100 million yuan along withinterest, default interest and compound interest (calculated from May 9th of 2018 to the actual date ofrepayment by the defendant in accordance with the standards of the contract, the result of provisionalcalculation until August 6th of 2018 is 2,277,354.05 yuan).Moreover, the company is requested to paylawyer fees of 180,000 YUAN and the legal costs of the case. Sino Great Wall International EngineeringCo., Ltd. and Chen Lue shall be jointly and severally liable. As of the balance sheet date, the case has notyet been concluded.
3) Dispute over the loan contract with China Industrial International Trust LimitedOn September 23rd of 2016, the company signed a trust loan agreement with China IndustrialInternational Trust Limited with a loan amount of 100 million yuan. Chen Lue and He Feiyan (actualcontrollers of Sino Great Wall International Engineering Co., Ltd., the company's subsidiary) made a jointliability guarantee. On October 9th of 2018, China Industrial International Trust Limited filed a lawsuitwith the Higher People's Court of Fujian Province, requesting the company to pay the principal of 100million yuan along with interest, default interest and compound interest (calculated from May 9th of 2018to the actual date of repayment by the defendant in accordance with the standards of the contract, theresult of provisional calculation until August 6th of 2018 is 957,777.78 YUAN).Moreover, the companyis requested to pay lawyer fees of 180,000 YUAN and the legal costs of the case. China IndustrialInternational Trust Limited is entitled to be paid in priority for the receivables under the AccountsReceivable Pledge Contract numbered CIIT [2016] 0479XTXY and CIIT [2016] 0479XTXY2.Chen Lueand He Feiyan shall be jointly and severally liable. As of the balance sheet date, the case has not yet beenconcluded.
4) Dispute over the loan contract with Datong Securities Co., Ltd.On April 27th of 2017, the company signed a trust loan agreement with Datong Securities Co., Ltd.,with a loan amount of 400 million yuan. The actual loans amounted to 138.07 million YUAN. Sino Great
Wall International Engineering Co., Ltd. and its actual controllers Chen Lue and He Feiyan made a jointliability guarantee. On September 28th of 2018, China Industrial International Trust Limited filed alawsuit with the Shanghai Financial Court, requesting the company to pay the principal of 134.07 millionyuan, the loan interest of 3,943,237.50 yuan from June 20th of 2018 to September 17th of 2018 based onthe principal of 134.07 million yuan, and the overdue interest at a rate of 24% as of September 17th of2018. The guarantors shall bear joint and several liabilities and jointly bear the litigation costs. As of thebalance sheet date, the case has not yet been concluded.
5) Dispute over bill recourse right with Shenzhen Yi'an Baoli Co., Ltd.On April 12th of 2018, the company issued 6 electronic commercial acceptance bills to ZhongchengJianye Construction Co., Ltd., totaling 10 million yuan. Later, Zhongcheng Jianye Construction Co., Ltd.transferred the bills to Shenzhen Yi'an Baoli Co., Ltd. Sino Great Wall International Engineering Co., Ltd.,Chen Lue and He Feiyan made a joint liability guarantee. On November 27th of 2018, Shenzhen Yi'anBaoli Co., Ltd. filed a lawsuit with the Shenzhen Longgang District People's Court, requesting theCompany to pay the principal (3 million YUAN) of the matured bill of exchange, interest of 2,416.67yuan (from the maturity date of the bill to the date of full payment, calculated provisionally to September30th of 2018), and fixation fees of 1,500 yuan for electronic evidence. Moreover, the company andguarantors are requested to pay default interest of 15,000.00 yuan (from the maturity date of the bill to thedate of full payment, calculated on the basis of 3 million yuan at a rate of 5/10000 per day, provisionallycalculated until September 30th of 2018) and to jointly bear the litigation and other costs. As of the dateof balance sheet, the case has not yet been concluded.
6) Private lending dispute with Gong LihongOn March 30, 2018, the Company and Sino Great Wall International Engineering Co., Ltd. and ChenLue as co-borrowers signed a loan agreement with Gong Lihong with a loan amount of 30 million yuan.The company's subsidiary Wuhan Business Professional Hospital Co., Ltd. provided joint liabilityguarantee for it. On September 29, 2018, Gong Lihong filed a lawsuit with the People's Court of FutianDistrict, Shenzhen, requesting the Company, Sino Great Wall International Engineering Co., Ltd., ChenLue and Wuhan Business Professional Hospital Co., Ltd. as co-payers to repay the principal of 30 millionyuan and an interest of 1,190,000.00 yuan (calculated according to the monthly profit of 2%, from July 25,2018 to the date of prosecution, after which interest continues to be calculated at the monthly interest rateof 2% to the date of actual repayment), and jointly bear attorney fees of 220,000.00 yuan, costs ofpreservation of 21,833 yuan and related litigation costs. As of the date of balance sheet, the case has notyet been concluded.
7) Financial loan contract dispute with Zhongjiang International Trust Co., Ltd.On August 21, 2017, the company signed a trust loan agreement with Zhongjiang International TrustCo., Ltd., with a loan amount of 300 million yuan, for which Sino Great Wall International EngineeringCo., Ltd. and its actual controller Chen Lue made joint liability guarantee and Sino Great WallInternational Engineering Co., Ltd. pledged its accounts receivable. On November 1, 2018, ZhongjiangInternational Trust Co., Ltd. filed a lawsuit with the Jiangxi Higher People's Court, requesting the court toorder an early expiration of the loan and other unexpired business contracts, the company's repaymentof the principal of 300 million yuan, payment of an interest (including default interest and compoundinterest) of 12,386,825.17 yuan (interest calculated tentatively to September 28, 2018), a penalty of15,000,000.00 yuan, and bearing of all the charges, attorneys' fees, travel expenses, etc. At the same time,Zhongjiang International Trust Co., Ltd. shall have the right to receive priority payment for the accountsreceivable under the Accounts Receivable Pledge Contract of 04728646000565579073 signed with SinoGreat Wall International Engineering Co., Ltd. The guarantor shall bear joint and several liabilities and
jointly bear the litigation expenses and maintenance costs. As of the date of balance sheet, the case hasnot yet been concluded.
8) Contract dispute with Shanghai Ctrip Hongrui International Travel Service Co., Ltd. and ShanghaiHuacheng Southwest International Travel Service Co., Ltd.
On July 1, 2016, the company signed a business travel service agreement with Shanghai CtripHongrui International Travel Service Co., Ltd. and Shanghai Huacheng Southwest International TravelService Co., Ltd. From May to September, 2018, the company failed to pay the booked airfares onschedule. On November 19, 2018, Shanghai Ctrip Hongrui International Travel Service Co., Ltd. andShanghai Huacheng Southwest International Travel Service Co., Ltd. Ltd. filed a lawsuit with the People'sCourt of Changning District of Jianghai City, requesting the company to pay a total of 389,766 yuan forair tickets and hotels in August and September 2018, and an overdue fine of 8828.22 yuan inMay-September (until the actual payment date). As of the date of balance sheet, the case has not yet beenconcluded.
9) Loan contract dispute with Li Shaoxiong
At the beginning of May 2018, the company signed a loan agreement with Li Shaoxiong with a loanamount of 50 million yuan. The loan period was three months. On October 25, 2018, Chen Lue, HeFeiyan, China Industry Investment Co., Ltd., Tang Xianyong and Sino Great Wall Group made joint andseveral liability guarantees for the contract. Li Shaoxiong filed an arbitration with the ShenzhenInternational Court of Arbitration, requesting the company's immediately return of the principal andinterest (based on the principal of 50 million yuan and a monthly interest of 3%; calculated from August 8,2018 to the date of the full repayment of the principal of the loan, tentatively counted to 31.5 million yuanon October 9, 2018) of the loan of 50 million yuan. At the same time, the company was required to payliquidated damages (based on the loan principal of RMB 50 million, calculated from August 8, 2018 tothe date of the full repayment of the loan principal, and tentatively counted to 3.15 million yuan onOctober 9, 2018). The company was also required to bear a legal fee of 2,254,198.80 yuan and anarbitration fee. The company, together with the guarantor, shall jointly bear the costs of preservation of5,000 yuan, a warranty fee of 49,969.92 yuan, travel expenses, etc. As of the date of balance sheet, thearbitral decision has not been made.
10) Loan contract dispute with Shanghai Pudong Development Bank Co., Ltd. Shen'zhen Branch
On August 29, 2017, the company signed a loan agreement with Shanghai Pudong DevelopmentBank Co., Ltd. Shenzhen Branch to borrow 70 million yuan from the bank. Sino Great Wall InternationalEngineering Co., Ltd. and the actual controller of the company, Chen Lue and He Feiyan made a jointliability guarantee. On January 2, 2019, Shanghai Pudong Development Bank Co., Ltd. Shenzhen Branchfiled a lawsuit with Shenzhen Intermediate People's Court, requesting the Court to adjudge the companyto repay the principal of 70 million yuan and the related interest, compound interest and penalty interest(the accrued interest as of July 5, 2018 is 177,625.00 yuan, after which the interest, default interest andcompound interest shall be collected according to the contract and relevant regulations of the People'sBank of China). The guarantor shall bear joint and several liabilities and jointly bear the litigationexpenses. As of the date of balance sheet, the results have not yet been concluded.
11) Loan contract dispute with Bank of Ningbo Co., Ltd. Shenzhen Branch
On May 31, 2017, the company signed a loan agreement with Bank of Ningbo Co., Ltd. ShenzhenBranch for a loan of 50 million yuan. On June 21, 2017, the company signed a Cooperation Agreement onGuaranteed Discount of Commercial Acceptance Bills, with the maximum amount as 50 million yuan.Chen Lue, Sino Great Wall International Engineering Co., Ltd. and Sino Great Wall Investment (Beijing)Co., Ltd. made joint liability guarantee and pledged their respective property rights. On August 20, 2018,
Bank of Ningbo Co., Ltd. Shenzhen Branch filed a lawsuit with Shenzhen Intermediate People's Court,requesting the Court to adjudge the company to return the principal of 44,734,233.41 yuan and the relatedinterest of 215,674.92 yuan (including default interest and compound interest as of July 9, 2018); adjudgethe company to return the advance of 43,236,631.80 yuan for the commercial acceptance bills and therelated default interest of 281,038.11 yuan (temporarily calculated as of July 9, 2018); adjudge thecompany to repay the discounted amount of commercial acceptance bills, which is 6,763,368.20 yuan,and the related default interest until the date of repayment; adjudge that the bank has the priority to getrepaid in light of the related pledges of the guarantors. The guarantors shall bear joint and severalliabilities and jointly bear the litigation expenses. As of the date of balance sheet, the results have not yetbeen concluded.
12) Financial loan contract dispute with Xiamen International Bank Co., Ltd. Zhuhai BranchOn May 27, 2017, the company borrowed 50 million yuan from Xiamen International Bank Co., Ltd.Zhuhai Branch but failed to repay the principal and interest after the maturity in May 2018. On July 3,2018, Xiamen International Bank Co., Ltd. Zhuhai Branch filed a lawsuit with the People's Court ofXiangzhou District, Zhuhai. On September 29, 2018, the Court ruled in the first instance that: thecompany shall repay the principal of 44,010,311.18 yuan, the interest of 895,528.99 yuan, the defaultinterest of 447,764.50 yuan and compound interest of 2189.08 yuan as of September 11, 2018 to XiamenInternational Bank Co., Ltd. Zhuhai Branch; shall pay the interest, default interest and compound interestfrom September 12, 2018 until the principal and interest are actually paid off (the interest is calculated onthe basis of the outstanding principal of 44,010,311.18 yuan and the interest rate of 60.9% higher than thebenchmark one-year loan interest rate, and the penalty interest and compound interest are halved). SinoGreat Wall International Engineering Co., Ltd. and Chen Lue shall be jointly and severally liable for therelevant debts. The litigation cost of 291,661.00 yuan and the preservation fee of 5000.00 yuan shall bejointly borne by the company and the guarantors. The company appealed to Zhuhai Intermediate People'sCourt on October 19, 2018 because the Court did not consider the part that has been repaid. As of the dateof balance sheet, the results of the second instance have not yet been concluded.
13) Loan contract dispute with Shenzhen Dingsheng Trade Co., Ltd.The company borrowed 50 million yuan from Shenzhen Guodingsheng Trade Co., Ltd. on March 10,2018 and another 50 million yuan on March 20. The company failed to fully repay the principal andinterest upon maturity. On July 18, 2018, Shenzhen Guodingsheng Trade Co., Ltd. filed a lawsuit withShenzhen Intermediate People's Court. On October 15, 2018, the Court ruled in the first instance that: Thecompany shall repay the principal of 88,082,007.52 yuan and the overdue interest (the overdue interest asof July 26, 2018 is 1,377,936.36 yuan, and the overdue interest as of July 27 is calculated on the basis ofthe outstanding principal at an annual interest rate of 24% until the actual pay-off date) to ShenzhenGuodingsheng Trade Co., Ltd. Sino Great Wall International Engineering Co., Ltd., Chen Lue and LiErlong shall be jointly and severally liable for the relevant debts. Shenzhen Guodingsheng Trade Co., Ltd.has the priority to receive compensation from the collateral pledged by China Industry Investment Co.,Ltd. The litigation cost of 481,167.00 yuan shall be jointly borne by the company and the guarantors. Thecompany appealed to the Guangdong Provincial Higher People's Court on October 8, 2018 because thecalculation of the remaining principal and interest was wrong when the Court made the judgment. As ofthe date of balance sheet, the results of second instance have not yet been concluded.
14) Loan contract dispute with Ping An International Financial Leasing Co., Ltd.On March 3, 2017, Sino Great Wall International Engineering Co., Ltd. (referred to as "InternationalEngineering"), the company's subsidiary, borrowed 84 million yuan from Ping An International FinancialLeasing Co., Ltd. Sino Great Wall Co., Ltd. and the actual controller Chen Lue provided joint liability
guarantee for such loan. Since Sino Great International Engineering Co., Ltd. failed to repay the principaldue on August 31, 2018 to Ping An International Financial Leasing Co., Ltd. Ping An InternationalFinancial Leasing Co., Ltd. filed a lawsuit with the Pudong New Area People's Court in Shanghai,requesting the Court to adjudge Sino Great International Engineering Co., Ltd. to repay the understandingprincipal and interest totaling 29,050,995.68 yuan (after deducting the deposit of 12,600,00.00 yuan);adjudge Sino Great Wall International Engineering Co., Ltd. to pay the liquidated damages (based on theunpaid amount due for each period and as per the daily interest rate of 0.08% from the date of breach ofcontract to the actual pay-off date); adjudge Sino Great Wall Co., Ltd. and Chen Lue to bear the joint andseveral liabilities for repayment, Sino Great International Engineering Co., Ltd., Sino Great Wall Co., Ltd.and Chen Lue to jointly bear the litigation cost, property preservation cost and other cost for realizing thecreditor's rights. As of the date of balance sheet, the case has not yet been heard.
15) Labor contract dispute with Lei HongxiangOn April 17, 2015, the company's subsidiary Sino Great Wall International Engineering Co., Ltd.(referred to as "International Engineering") signed a Construction Contracting Agreement with LeiHongxiang. According to the agreement, Lei Hongxiang shall be responsible for all works of water,electricity, mason, wood and painting and the relevant added works for interior decoration of NanjingPoly Jiangxinzhou Zijin Masion undertaken by International Engineering. As the InternationalEngineering failed to pay the remaining project cost of 734,330 yuan to Lei Hongxiang, Lei Hongxiangfiled a lawsuit with the People's Court of Jianye District, requesting the Court to adjudge InternationalEngineering to pay the remaining project cost and liquidated damages totaling 818,688.20 yuan; adjudgeHangzhou Yingtianxia Construction Co., Ltd., as the labor subcontractor of the project, to bear the jointand several liability; adjudge International Engineering and Hangzhou Yingtianxia Construction Co., Ltd.to jointly bear the litigation cost and preservation cost of the case. As of the date of balance sheet, theresults have not yet been concluded.
16) Purchase and sales contract dispute with Guangdong Haomei Aluminium Co., Ltd.In December 2016, Sino Great Wall International Engineering Co., Ltd. (referred to "InternationalEngineering"), the company's subsidiary, signed an aluminum profile procurement contract withGuangdong Haomei Aluminium Co., Ltd. As the International Engineering failed to clear the payment toGuangdong Haomei Aluminium Co., Ltd., Guangdong Haomei Aluminium Co., Ltd. filed a lawsuit withPeople's Court of Qingcheng District, Qingyuan City, requesting the Court to adjudge InternationalEngineering to pay the contract price of 604,034.94 yuan; adjudge International Engineering to pay theliquidated damages (overdue interest shall be paid at 150% of the bank loan interest rate for the sameperiod from June 25, 2017 until it is paid off); and adjudge international engineering to bear the litigationcosts of this case. As of the date of balance sheet, the results have not yet been concluded.
17) Labor dispute with Hunan Zhongjian Construction Labor Co., Ltd.On March 15, 2016 and in February 2017, the company's subsidiary, Sino Great Wall InternationalEngineering Co., Ltd. (referred to International Engineering) signed two Labor SubcontractingAgreements with Hunan Zhongjian Construction Labor Co., Ltd. As International Engineering failed tofulfill its obligations as agreed in the contract, Hunan Zhongjian Construction Labor Co., Ltd. filed anarbitration with Beijing Arbitration Commission, requesting the Commission to rule to rescind the twoLabor Sub-contracting Agreements; rule International Engineering to compensate Hunan ZhongjianConstruction Labor Co., Ltd. for various loss totaling 2,515,717.43 yuan; rule International Engineeringto bear the arbitration cost of this case. As of the date of balance sheet, the arbitral decision has not beenmade.
18) Construction contract dispute with Nanchang Wanda City Investment Co., Ltd.
On October 16, 2014, the company's subsidiary, Sino Great Wall International Engineering Co., Ltd.(referred to "International Engineering") signed Subcontracting Agreement with Nanchang Wanda CityInvestment Co., Ltd. and China Construction Eighth Engineering Division Corp., Ltd. (not involved inthis case). As Nanchang Wanda City Investment Co., Ltd. failed to pay the project price on schedule,International Engineering filed an arbitration with China International Economic and Trade ArbitrationCommission, requesting the Commission to rule Nanchang Wanda City Investment Co., Ltd. to pay theremaining project price of 6,323,181.65 yuan to International Engineering; rule Nanchang Wanda CityInvestment Co., Ltd. to pay the interest of project price (from the January 12, 2018 to actual pay-off date)to International Engineering; rule Nanchang Wandan City Investment Co., Ltd. to bear the arbitration costand lawyer's fee paid by International Engineering. As of the date of balance sheet, the results have notyet been concluded.
19) Decoration contract dispute with Xi'an Vanke Kaizhou Real Estate Co., Ltd.
On March 15, 2012, Sino Great Wall International Engineering Co., Ltd. (referred to "InternationalEngineering"), the company's subsidiary, signed Contract on Fine Decoration of Building 14 in 1.3Section of Qujiang Project. As Xi'an Vanke Kaizhou Real Estate Co., Ltd. failed to pay the project fundand warranty fund on schedule, International Engineering filed a lawsuit with People's Court of YantaDistrict, Xi'an City, requesting the Court to adjudge Xi'an Vanke Kaizhou Real Estate Co., Ltd. to pay theremaining project fund of 141,849.78 yuan to International Engineering; rule Xi'an Vanke Kaizhou RealEstate Co., Ltd. to return the amount of 151,505.41 yuan for warranty to International Engineering; RuleXi'an Vanke Kaizhou Real Estate Co., Ltd. to pay liquidated damages for the overdue payable balance ofthe project (calculated on the basis of 141,849.78 yuan and as per the default interest rate of five-yearloan announced by the People's Bank of China, from April 10, 2015 until the actual pay-off date); ruleXi'an Vanke Kaizhou Real Estate Co., Ltd. to pay the overdue warranty fund and liquidated damages(calculated on the basis of 151,505.41 yuan and as per the default interest rate of the same type of loanannounced by the People's Bank of China until the actual pay-off date; of which, the part with 106,053.79yuan as the base number should be calculated from May 30, 2014; the part with 45,451.6 yuan as the basenumber should be calculated from May 30, 2017). As of the date of balance sheet, the case has not yetbeen concluded.
20) Decoration contract dispute with Xi'an Vanke Kaizhou Real Estate Co., Ltd.
In December 2012, Sino Great Wall International Engineering Co., Ltd. (referred to "InternationalEngineering"), the company's subsidiary, signed Contract on Fine Decoration of Building 20, Building 28and Building 29 in 2.2 Section of Qujiang Project. As Xi'an Vanke Kaizhou Real Estate Co., Ltd. failed topay the project fund on schedule, International Engineering filed a lawsuit with People's Court of YantaDistrict, Xi'an City, requesting the Court to adjudge Xi'an Vanke Kaizhou Real Estate Co., Ltd. to pay theremaining project fund of 836,231.53 yuan to International Engineering; adjudge Xi'an Vanke KaizhouReal Estate Co., Ltd. to return the warranty fund of 1,500,894.19 yuan to International Engineering;adjudge Xi'an Vanke Kaizhou Real Estate Co., Ltd. to pay liquidated damages for the overdue payablebalance of the project (calculated on the basis of 836,231.53 yuan and as per the default interest rate ofone-year to five-year loan announced by the People's Bank of China, from April 11, 2015 until the actualpay-off date); adjudge Xi'an Vanke Kaizhou Real Estate Co., Ltd. to pay the overdue warranty fund andliquidated damages (calculated on the basis of 1,500,894.19 yuan and as per the default interest rate of thesame type of loan announced by the People's Bank of China until the actual pay-off date; Of which, thepart with 1,050,625.93 yuan as the base number should be calculated from June 14, 2015 to the actualpay-off date. The liquidated damages for this part until June 13, 2018 are 320,816.13 yuan). As of the dateof balance sheet, the case has not yet been concluded.
21) Purchase and sales contract dispute with Zhejiang Jianlifang Wood Industry Co., Ltd.On December 19, 2014, the company's subsidiary, Sino Great Wall International Engineering Co.,Ltd. (referred to International Engineering) signed Contract on Supply and Installation of Wood Veneerand Wood Furniture with Zhejiang Jianlifang Wood Industry Co., Ltd. After that, both parties made anagreement on the additional works which were signed by managers of the both parties and confirmed thatsuch agreement is an attachment to the afore-said contract. As International Engineering failed to clear theproject fund to Zhejiang Jianlifang Wood Industry Co., Ltd., Zhejiang Jianlifang Wood Industry Co., Ltd.filed an arbitration with Beijing Arbitration Commission, requesting the Commission to rule InternationalEngineering to pay the remaining project fund of 993,108.95 yuan under the Contract on Supply andInstallation of Wood Veneer and Wood Furniture and compensate Zhejiang Jianlifang Wood Industry Co.,Ltd. for the interest loss from the agreed payment date to the actual pay-off date as per the benchmarkinterest rate of the same type of loan for the same period announced by the People's Bank of China; ruleInternational Engineering to bear the arbitration cost and lawyer's fee totaling 38,000 yuan of this case. Asof the date of balance sheet, the arbitral decision has not been made.
22) Purchase and sales contract dispute with Shanghai Wusheng Industrial Co., Ltd.On August 18, 2016, the company's subsidiary, Sino Great Wall International Engineering Co., Ltd.(referred to "International Engineering") signed Asia Materials (Equipment) Subcontract Contract forSupply with Shanghai Wusheng Industrial Co., Ltd. As International Engineering failed to clear thepayment to Shanghai Wusheng Industrial Co., Ltd., Shanghai Wusheng Industrial Co., Ltd. filed anarbitration with Shanghai Arbitration Commission, requesting the Commission to rule InternationalEngineering to pay the contract price of 267,594.37 yuan to Shanghai Wusheng Industrial Co., Ltd; ruleInternational Engineering to pay the liquidated damages for overdue payment from May 5, 2017 to theactual pay-off date as per the benchmark interest rate of the loan for the same period announced by thePeople's Bank of China and the liquidated damages as of August 4, 2018 is 15,888.42 yuan; ruleInternational Engineering to bear the arbitration cost of this case; Rule International Engineering to bearlawyer's fee of 10,000.00 yuan. As of the date of balance sheet, the arbitral decision has not been made.
23) Loan contract dispute with Gome Cinda Commercial Factoring Co., Ltd.On February 12, 2018, Gome Cinda Commercial Factoring Co., Ltd. signed a Factoring Contractwith the Company’s subsidiary Sino Great Wall International Engineering Co., Ltd. (hereinafter referredto as “International Engineering”) and Wuhan Jiutai Weiye Iron & Steel Co., Ltd., agreeing that within theterm of cooperation and the credit line, Wuhan Jiutai Weiye Iron & Steel Co., Ltd. may transfer itsaccounts receivable for International Engineering to Gome Cinda Commercial Factoring Co., Ltd. toapply for factoring financing. After the expiration of factoring financing, the International Engineeringwill pay the interest of factoring financing to Gome Xinda Commercial Factoring Co., Ltd. On February12, 2018, Wuhan Jiutai Weiye Iron & Steel Co., Ltd. transferred its accounts receivable of 14,564,590.97yuan for International Engineering to Gome Cinda Commercial Factoring Co., Ltd. for factoringfinancing of 11,600,000.00 yuan according to the above-mentioned Factoring Contract and signed theAccounts Receivable Transfer Financing Application. At the same time, Wuhan Jiutai Weiye Iron & SteelCo., Ltd. transferred a commercial acceptance bill with the International Engineering as the drawer andthe Company as the Acceptor to Gome Cinda Commercial Factoring Co., Ltd., and the commercialacceptance bill expired on August 10, 2018. On May 28, 2018, Wuhan Jiutai Weiye Iron & Steel Co., Ltd.transferred its accounts receivable of 27,294,442.23 yuan for International Engineering to Gome CindaCommercial Factoring Co., Ltd. for factoring financing of 21,800,000.00 yuan according to theabove-mentioned Factoring Contract and signed the Accounts Receivable Transfer Financing Application.At the same time, Wuhan Jiutai Weiye Iron & Steel Co., Ltd. transferred a commercial acceptance bill
with the International Engineering as the drawer and the Company as the Acceptor to Gome CindaCommercial Factoring Co., Ltd., and the commercial acceptance bill expired on November 23, 2018. AsInternational Engineering, Wuhan Jiutai Weiye Iron & Steel Co., Ltd. and the Company did not fulfil theirrespective responsibilities before the expiration of the term of factoring financing and the bill, GomeCinda Commercial Factoring Co., Ltd. filed a lawsuit with the People's Court of Chaoyang District,ordering the International Engineering to pay 14,564,590.97 yuan of principal of the accounts receivable,63,800.00 yuan of overdue interest, and 131,081.32 yuan of liquidated damages for overdue payment ofaccounts receivable; ordering the International Engineering to pay 27,294,442.23 yuan of principal of theaccounts receivable, 492,922.22 yuan of interests during actual financing, 3,696.92 yuan of liquidateddamages for overdue payment of interests, 99,916.67 yuan of overdue interest, 204,708.32 yuan ofliquidated damages for overdue payment of accounts receivable; ordering the Wuhan Jiutai Weiye Iron &Steel Co., Ltd. to pay 11,600,000.00 yuan of repurchase money and 87,000.00 yuan of default interest foroverdue repurchase; ordering Wuhan Jiutai Weiye Iron & Steel Co., Ltd. to pay 21,800,000.00 yuan ofrepurchase money and 163,500.00 yuan of default interest for overdue repurchase; ordering theInternational Engineering, Wuhan Jiutai Weiye Iron & Steel Co., Ltd. and the Company to undertake thelitigation costs, attorney fees, property preservation fees, security guarantee fees, travel expenses, notaryfees of the case and other costs to realized the creditor’s right. As of the balance sheet date, the case hasnot been concluded.
24) Construction dispute with Changzhou Green Furniture Co., Ltd.In May 2017, Changzhou Green Furniture Co., Ltd. and a subsidiary of the Company, Sino GreatWall International Engineering Co., Ltd. (hereinafter referred to as the “International Engineering”) orallyagreed that Changzhou Green Furniture Co., Ltd. undertook the decoration engineering of JinjiangSunshine Town Feili Bay and fine decoration and installation engineering of public area in Tower 01-A,Xiamen Huarun Center (Plot 2013P16). It was later negotiated by both parties that Changzhou GreenFurniture Co., Ltd. withdrew from the construction, and both parties signed the Withdrawal SettlementAgreement on September 7, 2017. As the International Engineering failed to pay the project payment,Changzhou Green Furniture Co., Ltd., filed a lawsuit with the People's Court of Jinjiang City, FujianProvince, ordering the International Engineering to repay 560,000.00 yuan of principal of the projectpayment to Changzhou Green Furniture Co., Ltd. with a penalty of 39,680.00 yuan (calculated as ofJanuary 5, 2018), and ordering the International Engineering to undertake the litigation costs of this case.As of the balance sheet date, the case has not been concluded.
25) Sales contract dispute with KINGKOIL (Shanghai) Co., Ltd.On November 22, 2016, the Company’s subsidiary Sino Great Wall International Engineering Co.,Ltd. (hereinafter referred to as “International Engineering”) signed a Bedclothes Purchase Contract withKINGKOIL (Shanghai) Co., Ltd. After the delivery of the goods by KINGKOIL (Shanghai) Co., Ltd., theInternational Engineering failed to make the payment as agreed in the Contract. KINGKOIL (Shanghai)Co., Ltd. filed an arbitration application with Beijing Arbitration Commission, ordering the InternationalEngineering to pay the repurchase price of RMB 25,466.00, and liquidated damages of RMB 1,151.20(from January 7, 2018 to the actual payment date, temporarily calculate as of October 8, 2018 at the bankloan interest rate for the same period) to KINGKOIL (Shanghai) Co., Ltd.; ordering the InternationalEngineering to bear the arbitration fee of the case. As of the balance sheet date, the case has not yet beenconcluded.
26) Case of revocation of the arbitration with Beijing Yuhe Borui Culture Development Co., Ltd.On February 14, 2017, Xiao Yang, Xue Piao, et al., on bebalf of the Company’s subsidiary, SinoGreat Wall International Engineering Co., Ltd. (hereinafter referred to as “International Engineering”)
signed a Software Procurement Contract with Beijing Yuhe Borui Culture Development Co., Ltd. Sincethe International Engineering failed to pay for the remaining project payments, Beijing Yuhe BoruiCulture Development Co., Ltd. filed an arbitration application with the Beijing Arbitration Commission,claiming the remaining project payments and the liquidated damages for overdue payment. Afterarbitration, the Beijing Arbitration Commission made a ruling on August 31, 2018, rejecting thearbitration application of Beijing Yuhe Borui Culture Development Co., Ltd. On November 27, 2018,Beijing Yuhe Borui Culture Development Co., Ltd. decided that the Beijing Arbitration Commission hadviolated the law and applied to the the Beijing Fourth Intermediate People's Court for revocation of thearbitration. As of the balance sheet date, the case has not been concluded.
27) Supply and installation contract dispute with Dongguan Kema Decoration Furniture Co., Ltd.On December 1, 2016, the Company’ subsidiary, Sino Great Wall International Engineering Co., Ltd.(hereinafter referred to as “International Engineering”) and Dongguan Kema Decoration Furniture Co.,Ltd. signed a Wood Veneer and Furniture Supply and Installation Contract. Since the InternationalEngineering owed Dongguan Kema Decoration Furniture Co., Ltd. the contract payment of 771,387.98yuan and refused to pay it at the repeated urging by Dongguan Kema Decoration Furniture Co., Ltd.,Dongguan Kema Decoration Furniture Co., Ltd. filed an arbitration application with the BeijingArbitration Commission, ordering the International Engineering to pay the money immediately andassume the economic loss caused to the applicant due to delayed payment, including the interest lossduring the capital occupation period, attorney fees and other losses incurred in realizing the creditor'sright. As of the balance sheet date, the case has not been concluded.
28) Construction contract dispute with Tong Xianfeng, Zhou wenfa v. Fan Zeyan, Sino Great WallInternational Engineering Co., Ltd. and Anhui Weike Industrial Development Co., Ltd.
In February 2016, the Company’s subsidiary, Sino Great Wall International Engineering Co., Ltd.(hereinafter referred to as “International Engineering”) undertook the decoration engineering project ofpublic commercial area in Wulishan Tianjie, Yaohai District, Hefei City from Anhui Weike IndustrialDevelopment Co., Ltd. After undertaking the project, the International Engineering illegallysubcontracted the entire paving of ground brick, toilet wall and floor tile to Fan Zeyan, who thensubcontracted part of the project to Tong Xianfeng and Zhou Wenfa. They completed related engineeringtasks at the end of 2016. However, the International Engineering and Fan Zeyan did not make theremaining project payments as agreed in relevant agreements. In such a case, Tong Xianfeng and Zhouwenfa filed a lawsuit to the People's Court of Yaohai District, ruling Fan Zeyan and the InternationalEngineering to pay the original project payments of 45,500 yuan and interests of 2,047.50 yuan. As of thebalance sheet date, the case has not been concluded.
29) Steel Parts, Bolts, Stone Pendant and Dry Hanging Adhesive Supply Contract dispute withBeijing Huaye Xingcheng Technology Co., Ltd.
On March 2, 2017, the Company’s subsidiary, Sino Great Wall International Engineering Co., Ltd.(hereinafter referred to as “International Engineering”) and Beijing Huaye Xingcheng Technology Co.,Ltd. signed the Steel Parts, Bolts, Stone Pendant and Dry Hanging Adhesive Supply Contract. Since theInternational Engineering failed to make the supply payment on time and still refused to pay it at therepeated urging, Beijing Huaye Xingcheng Technology Co., Ltd. filed an arbitration application with theBeijing Arbitration Commission, ordering the International Engineering to pay the supply payable of172,474.07 yuan and the liquidated damages for overdue payment at 0.5% of the payable per day. As ofthe balance sheet date, the case has not been concluded.
30) Sales contract dispute with Jieyang Fangyuan Stone Co., Ltd.
On August 14, 2016, the Company’s subsidiary, Sino Great Wall International Engineering Co., Ltd.
(hereinafter referred to as “International Engineering”) and Jieyang Fangyuan Stone Co., Ltd. signed aStone Material (Equipment) Supply and Subcontracting Contract. Due to the malicious default inpayment for goods by the International Engineering, Jieyang Fangyuan Stone Co., Ltd. filed an arbitrationapplication with the Guangzhou Arbitration Commission, ruling the International Engineering to pay3,343,649.45 yuan for supply of stone materials and the liquidated damages for overdue payment at 1‰of the actual payable per day. As of the balance sheet date, the case has not been concluded.
31) Contract dispute with Beijing Jingsheng Taihua Jinshu Jiegou Co., Ltd.To construct the glass curtain wall for the expansion project of the Polly Airport Terminal in Ethiopia,Sino Great Wall International Engineering Co., Ltd. and Beijing Jingsheng Taihua Jinshu Jiegou Co., Ltd.signed the Steel Supply Contract on August 29, 2016 and January 11, 2017 respectively. Among them, thecontract signed on August 29, 2016 stipulates that the total amount of the contract is 700,000 yuan. Theactual amount settled by both parties is 753,574.75 yuan. Sino Great Wall International Engineering Co.,Ltd. actually paid 675,000 yuan and 78,574.75 yuan is still owed. As for the contract signed on January11, 2017, the project has been suspended due to the reason of Sino Great Wall International EngineeringCo., Ltd., resulting in that 118 pieces of Y-type steel has been processed but not delivered by the applicant,with the value of 201,673.8 yuan. Since Y-type steel is made to order for special type of products andcannot be used elsewhere after processing, it has become a pile of scrap. Sino Great Wall InternationalEngineering Co., Ltd. has not paid the above payments. Beijing Jingsheng Taihua Jinshu Jiegou Co., Ltd.filed an arbitration application with the Beijing Arbitration Commission, requesting the InternationalEngineering to make the balance payment of 78,574.75 yuan stipulated in the contract signed on August29, 2016, payment of 382,375.67 yuan in the contract signed on January 11, 2017, processing andmaterials payment of products that were not delivered of 201,673.8 yuan, and pay corresponding interestsof 33,572.96 yuan (tentatively calculated at the loan interest rate of the People's Bank of China for thesame period with 662,624.22 yuan as the base value as of the second day of the last delivery date, namelyfrom July 14, 2017 to the date of actual payment by the respondent), and at the same time, requestingSino Great Wall International Engineering Co., Ltd. to pay 20,000 yuan of legal fees due to rightsprotection. As of the balance sheet date, the case has not been concluded.
32）Case of Purchase Contract of Guangdong Newpearl Ceramics Group Co., Ltd.On July 25, 2017, Sino Great Wall International Engineering Co., Ltd., Guangdong NewpearlCeramics Group Co., Ltd. and Poly Real Estate (Group) Co., Ltd. entered into the Contract for SupplyingWall and Floor Tiles for the Project of 1-4 Floors of the Basement and 1-2 Floors of the Skirt Building ofIntercontinental Hotel at No. 4 Land Parcel of Pazhou Village, Guangzhou City (Guang Zhou Pa ZhouCun Xiang Mu He 20160037). Because Sino Great Wall International Engineering Co., Ltd. has not madepayment for the goods through Poly Real Estate (Group) Co., Ltd., which has constituted a breach ofcontract, Guangdong Newpearl Ceramics Group Co., Ltd. filed a lawsuit with the People's Court ofHaizhu District, Guangzhou City, requesting Sino Great Wall International Engineering Co., Ltd. to pay atotal of RMB781,353.24 for goods and overdue interest of 13,170.68 yuan (The interest rate is calculatedbased on the loan interest rate of the People's Bank of China for the same period, and is subject to upwardadjustment of 50% with reference to the overdue penalty interest rate. The date of overdue is tentativelyscheduled for November 2, 2018, and the interest is accrued up to the date on which the payment isactually fully settled. The payment is 92 days overdue calculated from August 1, 2018 to November 2,2018, so the overdue interest is 781353.24*4.35%*(1+50%)/360*93= 13170.68 yuan);and requestingSino Great Wall International Engineering Co., Ltd. to bear the legal costs of the case. As of the date ofbalance sheet, the case has not yet been concluded.
33）Case of Stone Supply Contract of Lvmeiyi Company
On June 25, 2015, Lvmeiyi Horticulture Greening Engineering Co., Ltd. and Sino Great WallInternational Engineering Co., Ltd. entered into Contract for Purchasing and Partially Installing WoodFinishes, Wood Doors, Wardrobes for Fine Decoration Project of Old Rooms and the Newly BuiltCatering Complex of Jing Feng Hotel of the General Logistics Department of PLA, and Stone ProductsSupply Contract. On June 27, 2015, they entered into Supplementary Agreement on the Contract forSupplying Stones, Wall and Floor Tiles, Wooden Doors, Wardrobes, and Wood Finishes. On January 20,2017 and May 8, 2017, the project leader team carried out the completion acceptance. At present, theproject is in actual use. The actual value of wood finishes, wooden doors and wardrobes suppliedamounted to 12,082,635.91 yuan, in which, 7,963,329.64 yuan has been paid, and 4,119,306.27 yuan isstill unpaid. The penalty amounted to 2,142,039.26 yuan (4,119,306.27*0.36/12*(17 10/30)). The projectwas successfully completed and accepted on May 8, 2017. The actual value of stones supplied amountedto 19,117,159 yuan, in which 13,910,374 yuan has been paid, and 5,206,785 yuan is still unpaid. Thepenalty amounted to 2,655,460.35 yuan (5206785*0.36/12*17). The project was successfully completedand accepted on May 8, 2017. Lvmeiyi Horticulture Greening Engineering Co., Ltd. filed an arbitrationapplication with the Beijing Arbitration Commission, requesting Sino Great Wall InternationalEngineering Co., Ltd. to pay the principal of 9,326,091.27 yuan, and penalty of 4,797,499.61 yuan,totaling 14,123,590.88 yuan;and requesting Sino Great Wall International Engineering Co., Ltd. toentirely bear the arbitration fees. As of the balance sheet date, the case has not yet been concluded.
34）Case of Contract Dispute with Gome Xinda
On April 26, 2018, Gome Xinda Commercial Factoring Co., Ltd., Sino Great Wall InternationalEngineering Co., Ltd., and Zhanjiang City Chikan Yasheng Meile Trading Co., Ltd. entered into theFactoring Contract (No. GMBL-GBL-180420-BJ-YSML-001), pursuant to which, within the cooperationperiod and credit line, Zhanjiang City Chikan Yasheng Meile Trading Co., Ltd. can transfer its accountsreceivable due from Sino Great Wall International Engineering Co., Ltd. to Gome Xinda CommercialFactoring Co., Ltd. and apply for factoring financing with Gome Xinda Commercial Factoring Co., Ltd.After the expiration of factoring financing, Sino Great Wall International Engineering Co., Ltd. will paythe interest of factoring financing to Gome Xinda Commercial Factoring Co., Ltd. If Sino Great WallInternational Engineering Co., Ltd. fails to make full payment in time, Sino Great Wall InternationalEngineering Co., Ltd. shall bear the corresponding liability for breach of contract. At the same time,Gome Xinda Commercial Factoring Co., Ltd. has the right to request Zhanjiang City Chikan YashengMeile Trading Co., Ltd. to repurchase accounts receivable. If Zhanjiang City Chikan Yasheng MeileTrading Co., Ltd. fails to repurchase accounts receivable within the specified time, it shall bear thecorresponding liability for breach of contract. On April 26, 2018, pursuant to the Accounts ReceivableTransfer Financing Application under the Factoring Contract (No.GMBL-GBL-180420-BJ-YSML-001-1), Zhanjiang City Chikan Yasheng Meile Trading Co., Ltd.transferred the account receivable of 39,974,980.00 yuan due from Sino Great Wall InternationalEngineering Co., Ltd. to Gome Xinda Commercial Factoring Co., Ltd., and applied for the factoringfinancing amount of 30,000,000.00 yuan. The interest rate of the factoring financing is 11%, at anannualized basis. The term of the factoring financing is 180 days from the date on which Gome XindaCommercial Factoring Co., Ltd. makes payment of factoring financing. On May 11, 2018, Gome XindaCommercial Factoring Co., Ltd. paid the factoring financing amount of 3,000,0000.00 yuan to ZhanjiangCity Chikan Yasheng Meile Trading Co., Ltd. On October 23, 2018, upon which the term of the factoringfinancing expired, Sino Great Wall International Engineering Co., Ltd. did not pay the accountsreceivable and the interest thereon, Zhanjiang City Chikan Yasheng Meile Trading Co., Ltd. did not fulfillthe obligation of repurchase. Gome Xinda Commercial Factoring Co., Ltd. filed a lawsuit with the
People's Court of Chaoyang District, Beijing City, requesting Sino Great Wall International EngineeringCo., Ltd., pursuant to accounts receivable under the Accounts Receivable Transfer Financing Application(No. GMBL-GBL-180420-BJ-YSML-001-1), to pay the principal of the accounts receivable of39,974,980.00 yuan, interest of 1,512,500 yuan, overdue interest of 45,833.33 yuan (tentatively scheduledfor October 28, 2018), the penalty for overdue payment for accounts receivable of 99,937.45 yuan(tentatively scheduled for October 28, 2018), and the penalty for overdue payment for interest of 3,781.25yuan (tentatively scheduled for October 28, 2018), totaling 41,637,032.03 yuan. requesting ZhanjiangCity Chikan Yasheng Meile Trading Co., Ltd. to bear part of the repurchase obligation within the scope ofthe principal amount of 30,000,000.00 yuan, interest of 1,512,500 yuan and default interest for overduerepurchase of 63,025 yuan (tentatively scheduled for October 28, 2018); and requesting Sino Great WallInternational Engineering Co., Ltd. and Zhanjiang City Chikan Yasheng Meile Trading Co., Ltd. to bearall expenses for realization of obligation right such as litigation fees, property preservation fees, andsecurity guarantee fees. As of the date of balance sheet, the case has not yet been concluded.
35）Case of Contract Dispute with Henan First Thermal Power Construction Co., Ltd.In 2015, Henan First Thermal Power Construction Co., Ltd. (hereinafter referred to as Henan FirstThermal Power) and Sino Great Wall International Engineering Co., Ltd. entered into a loan agreement,pursuant to which, Henan First Thermal Power will lend 30 million yuan to Sino Great Wall InternationalEngineering Co., Ltd., with a monthly interest rate of 1%, and Sino Great Wall International EngineeringCo., Ltd. shall return 30 million yuan before December 31, 2015. The interest rate will be changed tomonthly interest rate of 1.5% after the repayment is overdue. As of September 2018, Sino Great WallInternational Engineering Co., Ltd. had not repaid the amount. Therefore, Henan First Thermal Powerfiled a lawsuit on September 17, 2018, requesting repayment of the principal, interest, and remittance feestotaling 47,177,460.94 yuan. The case went on trial on December 12, 2018 and has not yet beenconcluded.
36）Case of Dispute on Stone Products Supply Contract of Fujian Province Nan'an City FeiwangStone Arts & Crafts Co., Ltd.
On June 7, 2015, Fujian Province Nan'an City Feiwang Stone Arts & Crafts Co., Ltd. (hereinafterreferred to as Stone Company) and Sino Great Wall International Engineering Co., Ltd. entered into theStone Products Supply Contract, pursuant to which, Stone Company provided stones with a total value of3,516,152.30 yuan to Sino Great Wall International Engineering Co., Ltd. From July 1, 2015 to April 26,2016, Sino Great Wall paid a total of 2.6 million yuan to the Stone Company, and has not paid anyamount to the Stone Company since then. On October 9, 2018, the Stone Company filed an arbitrationapplication with the Beijing Arbitration Commission, requesting payment for the goods of 916,152.30yuan and related interest(The interest is calculated based on the arrears, from January 10, 2016 to the dateon which the payment for goods is actually settled). The case was accepted by the Beijing ArbitrationCommission on October 29, 2018 and has not yet been concluded.
37）Case of Sales Contract Dispute with Shenzhen Strive Industrial Co., Ltd.
On March 25, 2017, Shenzhen Strive Industrial Co., Ltd. (hereinafter referred to as IndustrialCompany) and Sino Great Wall International Engineering Co., Ltd. entered into a supply contract,According to the contract, Sino Great Wall paid an advance payment of 80,000.00 yuan to the IndustrialCompany. The Industrial Company provided goods worth yuan 263,963.29 to Sino Great Wall in threebatches on April 8, 2017, May 4, 2017, and May 10, 2017, respectively. Then, however, Sino Great Wallwas reluctant to pay the remaining payment. It only paid 100,000 yuan on March 8, 2018, and theremaining payment of 83,963.29 yuan has not been paid. On October 18, 2018, the Industrial Companyfiled an arbitration application with the Beijing Arbitration Commission, requesting Sino Great Wall
International Engineering Co., Ltd. to pay the remaining payment of 83,963.29 yuan, transportationexpenses, travel expenses, and cost of lost labor of 8,000.00 yuan due to the application for arbitration, aswell as arbitration fees. The case was accepted by the arbitration commission on November 2, 2018, andhas not yet been concluded.
38）Case of Contract Dispute of Shenzhen Fangyuan Ronghua Metal Engineering Co., Ltd.On April 7, 2017, Shenzhen Fangyuan Ronghua Metal Engineering Co., Ltd. (hereinafter referred toas Ronghua Company) and Sino Great Wall International Engineering Co., Ltd. entered into a supply andprocessing contract, pursuant to which, Ronghua Company provides metal products and processingservices to Sino Great Wall, with a total value of 314,905.00 yuan. As of the date of filing the lawsuit,Sino Great Wall only paid a processing fee of 170,000 yuan. However, as of the date of filing the lawsuit,the one-year warranty period for the project had expired, and Sino Great Wall should pay 95% of theprocessing fee. On October 25, 2018, Ronghua Company filed a lawsuit requesting Sino Great Wall topay the processing fee of 144,905.00 yuan, and interest of 7,684.55 yuan, as well as related litigationcosts. At present, the case has not yet been concluded.
39) Financial loan contract dispute with Baoshang Bank LimitedOn January 14, 2018, Sino Great Wall signed a Loan Contract for Liquidity with Baoshang BankLimited, which agreed to grant a loan of 200 million yuan to Sino Great Wall for a period of 12 months,paying interest on a monthly basis, and repaying the principal and interest of the loan in one lump sum onthe maturity date of the loan. On January 17, 2018, Baoshang Bank issued loans to Sino Great Wall. SinoGreat Wall International Engineering Co., Ltd. and its actual controllers Chen Lue and He Feiyanprovided joint liability guarantees, and at the same time agreed that Chen Lue shall not pledge the 60million shares of Sino Great Wall held by him. On October 24, 2018, Baoshang Bank announced that thedebt had expired in advance, and the company was sued for failing to repay the above loan within therequired time. Baoshang Bank has requested the following: the court shall order Sino Great Wall to repaythe loan principal of 200 million yuan to Baoshang Bank; the court shall order Sino Great Wall to pay aninterest of 4,458,750 yuan and a compound interest of 55,890.37 yuan to Baoshang Bank, and fromNovember 20, 2018, the principal of the remaining loan and the remaining interest shall be used as thebasis for the company's payment of the default interest and compound interest to Baoshang Bankrespectively in accordance with the annual interest rate of 9.8755%, until the date when the debts are fullysettled; the court shall order Sino Great Wall and Chen Lue to hold jointly liabilities for the above debts;the court shall order He Feiyan to hold jointly liabilities for the above-mentioned debts within the scopeof the joint property with Chen Lue; the court shall order the defendants to bear all the expenses paid bythe plaintiff for the recovery of the claims, such as the litigation fee, costs of preservation, the counsel fee,etc. As of the date of balance sheet, the case has not yet been heard.
40) Leasing contract dispute with Zhejiang Huatie Construction EquipmentSino Great Wall Southwest Construction Engineering Co., Ltd., a subsidiary of the company, signedthe Steel Pipe Leasing Contract with Zhejiang Huatie Construction Support Technology Co., Ltd., whichstipulated the rental price of the steel pipe leased goods. The quantity of the leased goods was based onthe invoice. From the date of the lessee's shipment to the date of the return of the lessor's warehouse, thelessee shall pay 70% of the rent every 3 months and settle the entire rent within 3 months after the leasedproperty is removed. After the conclusion of the contract, the lessor provided the leased items such assteel pipes and fasteners. The miscellaneous expenses incurred in the performance of the contract were1593635.57 yuan, and no payment was made by Sino Great Wall Southwest Construction EngineeringCo., Ltd. Zhejiang Huatie Construction Support Technology Co., Ltd. filed a lawsuit, requesting:
termination of the Steel Pipe Leasing Contract; immediate payment of rental and miscellaneous fees from
Southwest Construction of 1593635.57 yuan (tentatively until March 6, 2018); immediate return of leasedgoods such as steel mesh, steel pipe, crossbar, etc., or a compensation of 8084676.16 yuan for the price;the liquidated damages for overdue payment of 112213.10 yuan (tentatively until March 6, 2018 from thedate of signing the contract; after that, the rent shall be collected on the basis of 1593635.57 yuan by onethousandth of the amount per day until the date of payment of the rent); joint and several liabilities to beheld by Guo Xiaoyi for liquidation; and bearing of the litigation costs. As of the date of balance sheet, thecase has not yet been concluded.
41) Contract Dispute with the People's Government of Chapan Township, Yingshan CountyOn January 30, 2016, the company's subsidiary Sino Great Wall Southwest ConstructionEngineering Co., Ltd. (formerly known as: Sichuan Dinghui Construction Co., Ltd.) signed theConstruction Contract of Small and Micro Water Conservancy Projects in Tanping Village, ChapanTownship, Yingshan County with the People's Government of Chapan Township, Yingshan County, andwas contracted to undertake the construction of small and micro water conservancy projects in TanpingVillage, Chapan Township, Yingshan County. The construction period was from February 15th, 2016 toMay 31st, 2016, and the contract price was 1862300 yuan. After the signing of the contract, theSouthwest Construction Company carried out part of the construction work, and the construction wascompletely shut down in May 2017. After many unsuccessful negotiations, the People’s Government ofChapan Township of Yingshan County sued the Southwest Construction Company and requested thetermination of the previously signed contract of the construction project, payment of liquidated damagesfrom the Southwest Construction Company, compensation for economic losses, and bearing of legalcosts.
42) Labor DisputeIn 2018, the Comapny's subsidiary Shenzhen Great Wall International Engineering Co., Ltd. wassubmitted to arbitration for labor and personnel disputes by 51 people, including Qi Deyun, requesting thecompany to pay a total of 5,068,538.15 yuan in arrears of wages, overtime, bonuses, compensation fortermination of labor relations, reimbursed expenses, etc. As of the date of balance sheet, the arbitration ispending.
43) Dispute with Xu Zhigui over the Decoration ContractXu Zhigui, as the actual construction worker of the interior decoration project of Four Stars A and BHotels (Building B) in Wanda City, Nanchang, completed and delivered the interior mechanical andelectrical installation project to Sino Great Wall International Engineering Co., Ltd. According to thecontract agreement and additional contract price, Sino Great Wall International Engineering Co., Ltd.owed Xu Zhigui 1040716.25 yuan for the decoration work.Xu Zhigui filed a lawsuit and requested thatNanchang Wanda City Investment Co., Ltd., Sino Great Wall International Engineering Co., Ltd. andHangzhou Yingtianxia Construction Co., Ltd. shall be ordered to jointly pay the arrears of 10,407,616.25yuan for the decoration work and the interest on the arrears of decoration payments (calculated at thesame period loan interest rate of the People's Bank of China from March 11, 2016 to the time of paymentof the arrears), and to jointly bear the litigation fees.
(2) Contingent liabilities formed by providing debt guarantees to other enterprises/institutions andtheir financial implications.
(2) Important contingencies not required to be disclosed by the company shall also be explained
The company does not have important contingencies that need to be disclosed.
3. Others
XV. Matters after the balance sheet date
1. Important non-adjusting events
Unit: Yuan
| Item | Contents | effects on financial conditions and operating results | Reasons for inestimable effects |
2. Profit distribution
Unit: Yuan
3. Sales return4. Description of other events after the balance sheet date
XVI. Other important events
1. Correction of accounting errors in the prior period(1) Retrospective restatement method
Unit: Yuan
| Correction contents of the accounting errors | Treatment procedure | Report items of various affected comparative periods | Cumulative effects |
(2) Prospective application method
| Correction contents of the accounting errors | Approval procedure | Reasons for adopting prospective application method |
| Company expenses disbursed by means except for the personal card accounts of the actual controllers and senior executives | Resolution of the board of directors | The amount is of no significant importance |
2. Debt restructuring3. Asset replacement(1) Non-monetary asset exchange
(2) Other asset replacement
4. Annuity plan5. Discontinued operation
Unit: Yuan
| Item | Revenue | Expense | Total profit | Income tax expense | Net profit | Discontinued operation profits attributable to the owner of the parent company |
Other notes
6. Segment information(1) Determination basis and accounting policy of the reporting segments
Accounting policy of the reporting segments:
As businesses in domestic architectural decoration, outbound architectural decoration and medical sectorsare not associated with each other, there is no price transfer among the segments; medical businesses areoperated by the Company and independent subsidies. Outbound architectural decoration business shall beaccounted by overseas companies according to regions in which the projects under construction is locatedby establishing independent account sets for 8 main projects in Qatar, Kuwait, Cambodia, Sri Lanka,Malaysia, Myanmar, Maldives and Saipan. There are no expenses indirectly attributable to varioussegments to be apportioned. And outbound architectural decoration business data also consist of financialfigures from the account sets of the above 8 main projects.
| Item | Domestic architectural decoration sector | Outbound architectural decoration sector | Medical sector | Offset | Total | |||||
| Current | Last | Curr | Last | Curre | Current | Last | Current | Last | ||
| period | period | ent period | period | nt period | period | period | period | period | ||
| I. Operating income | 1,713,614,392.65 | 4,055,226,176.75 | 617,181,344.18 | 2,747,112,360.43 | 135,685,751.60 | I. Operating income | 1,713,614,392.65 | 4,055,226,176.75 | 2,496,411,771.38 | 6,497,124,980.52 |
| Of which: foreign trade income | 1,713,614,392.65 | 4,055,226,176.75 | 617,181,344.18 | 2,747,112,360.43 | 135,685,751.60 | Of which: foreign trade income | 1,713,614,392.65 | 4,055,226,176.75 | ||
| Income from inter-segment trade | Income from inter-segment trade | 6,497,124,980.52 |
| II. Operating cost | 1,823,342,781.16 | 3,376,128,111.31 | 561,946,596.40 | 1,850,501,055.12 | 99,316,403.49 | II. Operating cost | 1,823,342,781.16 | 3,376,128,111.31 | 2,518,924,719.23 | 4,886,354,499.66 |
| Of which: foreign trade cost | 1,823,342,781.16 | 3,376,128,111.31 | 561,946,596.40 | 1,850,501,055.12 | 99,316,403.49 | Of which: foreign trade cost | 1,823,342,781.16 | 3,376,128,111.31 |
| Cost of inter-segment trade | Cost of inter-segment trade | 4,886,354,499.66 |
| Ⅲ. Asset impairment loss | 90,665,168.24 | 233,324,136.18 | 445,662,546.73 | 92,834,249.44 | 10,313,351.51 | Ⅲ. Asset impairment loss | 90,665,168.24 | 233,324,136.18 | 562,914,387.90 | 323,067,604.86 |
| Ⅳ. Depreciation and amortization costs | 25,439,978.29 | 8,485,049.12 | 3,297,464.80 | 2,669,193.11 | 13,617,861.75 | Ⅳ. Depreciation and amortization costs | 25,439,978.29 | 8,485,049.12 | 37,225,793.86 | 18,664,799.34 |
| V. Total profit | -1,454,805,513.15 | -3,420,438.20 | -353,395,190.80 | 616,507,925.74 | -15,055,006.40 | V. Total profit | -1,454,805,513.15 | -3,420,438.20 | -1,819,685,027.26 | 663,236,724.48 |
| Ⅵ. Income tax expense | 27,790,032.39 | 92,409.54 | -31,794,530.69 | 10,327,779.55 | 2,561,747.82 | Ⅵ. Income tax expense | 27,790,032.39 | 92,409.54 | -3,162,256.01 | 11,921,876.40 |
| Ⅶ. Net profit | -1,482,595,545.54 | -3,512,847.74 | -321,600,660.11 | 606,950,602.75 | -17,616,754.22 | Ⅶ. Net profit | -1,482,595,545.54 | -3,512,847.74 | -1,816,522,771.25 | 651,314,841.45 |
| Ⅷ. Total assets | 14,713,980,506.82 | 16,528,958,963.06 | 4,092,433,748.17 | 4,411,681,112.49 | 348,963,251.61 | Ⅷ. Total assets | 14,713,980,506.82 | 16,528,958,963.06 | 9,763,085,782.40 | 21,254,377,131.56 |
| Ⅸ. Total | 12,593,571,839 | 16,505,938,299 | 2,511,243,436 | 4,414,287,247. | 301,650,637. | Ⅸ. Total | 12,593,571,839 | 16,505,938,299 | 9,596,028,675. | 15,743,967,165 |
| liabiliteis | .66 | .90 | .32 | 85 | 75 | liabiliteis | .66 | .90 | 32 | .45 |
（(2) Financial information of reporting segments
| Unit: YuanItem | ||||||||
(3) If the Company lacks reporting segments or is not allowed to disclose total assets and total liabilities of thereporting segments, please provide reasons
(4) Other notes
7. Other important transactions and events affecting investors' decisions8. Others
XVII. Notes to main items on the Financial Statements of the parent company
1. Notes receivable and accounts receivable
Unit: Yuan
| Item | Closing balance | Beginning balance |
(1) Notes receivable
1) Notes receivables are listed by class
Unit: Yuan
| Item | Closing balance | Beginning balance |
| Bank acceptance | 0.00 | 0.00 |
| Trade acceptance | 0.00 | 0.00 |
2) Notes receivable of the Company pledged at the end of the period
Unit: Yuan
| Item | Amount pledged at the end of the period |
| Bank acceptance | 0.00 |
| Trade acceptance | 0.00 |
3) Notes receivable endorsed or discounted by the Company at the end of the period and undue on the balance sheet date
Unit: Yuan
| Item | Amount for which the recognition terminated at the end of the period | Amount for which the recognition did not terminate at the end of the period |
| Bank acceptance | 0.00 | 0.00 |
| Trade acceptance | 0.00 | 0.00 |
4) Notes converted to accounts receivable by the Company at the end of the period due to the non-performance ofthe drawer
Unit: Yuan
| Item | Amount converted to accounts receivables at the end of the period | |
| Trade acceptance | 0.00 | |
Other notes
(2) Accounts receivable
1) Disclosure of accounts receivable by class
Unit: Yuan
| Class | Closing balance | Beginning balance | ||||||||
| Book balance | Bad-debt provision | Book value | Book balance | Bad-debt provision | Book value | |||||
| Amount | Proportion | Amount | Accruing proportion | Amount | Proportion | Amount | Accruing proportion | |||
Receivables with a significant individual amount and individual provision for bad debts at the end of the period:
□ Applicable √ Not applicableReceivables for which bad-debt provision is made by aging analysis method in the set:
□ Applicable √ Not applicableReceivables for which bad-debt provision is made by balance percentage method in the set:
□ Applicable √ Not applicableReceivables for which bad-debt provision is made by other methods in the set:
2) Bad-debt provisions set aside, recovered or carried back during the reporting periodDuring the reporting period, there were altogether RMB bad-debt provision set aside and RMB bad-debt provision recovered or carried back.Bad-debt provisions recovered or carried back in the current period with significant amount are as follows:
Unit: Yuan
| Unit name | Amount recovered or carried back | Recovery method |
3) Receivables actually written off in the current period are as follows:
Unit: Yuan
| Item | Amount written off |
Significant receivables written off are as follows:
Unit: Yuan
| Unit name | Receivable nature | Amount written off | Reasons for writing off | Writing-off procedure | Is the amount incurred by the connected transaction |
Notes to receivable write-off:
4) Receivables ranking top five on the ending balance list based on the concentration degree of the borrower5) Receivables for which the recognition is terminated due to the transfer of financial assets6) Asset and liability amounts incurred by the transfer of accounts receivables and continuing involvementOther notes:
2. Other receivables
Unit: Yuan
| Item | Closing balance | Beginning balance |
| Dividends receivable | 100,000,000.00 | 100,000,000.00 |
| Other receivables | 2,886,852,664.14 | 3,590,967,483.22 |
| Total | 2,986,852,664.14 | 3,690,967,483.22 |
(1) Interests receivable
1) Classification of interests receivable
Unit: Yuan
| Item | Closing balance | Beginning balance |
2) Significant overdue interests
Unit: Yuan
| Borrower | Closing balance | Overdue time | Overdue reasons | Whether impairment occurs and the judgment basis |
Other notes:
(2) Dividends receivable
1) Dividends receivable
Unit: Yuan
| Item (or the invested party) | Closing balance | Beginning balance |
| Sino Great Wall International Engineering Co., Ltd. | 100,000,000.00 | 100,000,000.00 |
| Total | 100,000,000.00 | 100,000,000.00 |
2) Significant dividends receivable with an aging of more than 1 year
Unit: Yuan
| Item (or the invested party) | Closing balance | Aging | Reasons for recovery failure | Whether impairment occurs and the judgment basis |
| Sino Great Wall International Engineering Co., Ltd. | 100,000,000.00 | 1-2 | The dividends are not actually paid | |
| Total | 100,000,000.00 | -- | -- | -- |
Other notes:
(3) Other receivables
1) Disclosure of other receivables by class
Unit: Yuan
| Class | Closing balance | Beginning balance | ||||||||
| Book balance | Bad-debt provision | Book balance | Bad-debt provision | |||||||
| Amount | Proportion | Amount | Accruing proportion | Amount | Proportion | Amount | Accruing proportion | |||
| Other receivables for which bad-debt provision is made according to characteristic portfolio of credit risk | 2,909,969,569.77 | 100.00% | 23,116,905.63 | 0.79% | 2,886,852,664.14 | 3,599,182,692.34 | 100.00% | 8,215,209.12 | 0.23% | 3,590,967,483.22 |
Other receivables with a significant individual amount and individual provision for bad debts at the end of the period:
□ Applicable √ Not applicableOther receivables for which bad-debt provision is made by aging analysis method in the set:
√ Applicable □ Not applicable
Unit: Yuan
| Aging | Closing balance | ||
| Other receivables | Bad-debt provision | Accruing proportion | |
| Sub-items within 1 year | |||
| Within 1 year | 204,032,509.97 | 10,201,625.50 | 5.00% |
| Sub-total (within 1 year) | 204,032,509.97 | 10,201,625.50 | 5.00% |
| 1 - 2 years | 116,005,431.09 | 11,600,543.11 | 10.00% |
| 2 - 3 years | 4,382,456.75 | 1,314,737.03 | 30.00% |
| Total | 324,420,397.81 | 23,116,905.63 | |
Notes to the determination basis for the set:
Other receivables for which bad-debt provision is made by balance percentage method in the set:
□ Applicable √ Not applicableOther receivables for which bad-debt provision is made by other methods in the set:
□ Applicable √ Not applicable2) Bad-debt provisions set aside, recovered or carried back during the reporting periodDuring the reporting period, there were altogether 14,839,141.69 yuan bad-debt provision set aside and 0.00 yuan bad-debt provisionrecovered or carried back.Bad-debt provisions carried back or recovered in the current period with significant amount are as follows:
Unit: Yuan
| Unit name | Amount carried back or recovered | Recovery method |
3) Other receivables actually written off in the current period are as follows:
Unit: Yuan
| Item | Amount written off |
Significant other receivables written off are as follows:
Unit: Yuan
| Unit name | Nature of other receivables | Amount written off | Reasons for writing off | Writing-off procedure | Is the amount incurred by the connected transaction |
Notes to the write-off of other receivables:
4) Classification of other receivables by nature
Unit: Yuan
| Nature of payment | Closing book balance | Beginning book balance |
| Current payment between units | 2,757,783,997.09 | 3,506,887,491.95 |
| Reserve fund | 666,710.88 | 142,590.46 |
| Cash deposit and pledge | 151,379,709.93 | 92,152,609.93 |
| Others | 139,151.87 | |
| Total | 2,909,969,569.77 | 3,599,182,692.34 |
5) Other receivables ranking top five on the ending balance list based on the concentration degree of the borrower
Unit: Yuan
| Unit name | Nature of payment | Closing balance | Aging | Proportion in the total closing balance of other receivables | Closing balance of bad-debt provision |
| Sino Great Wall International Engineering Co., Ltd. | Current payment | 2,394,022,760.68 | Within 1 year | 83.30% | |
| Wuhan Commercial Worker Hospital Co., Ltd. | Current payment | 89,886,449.10 | Within 1 year | 3.13% | |
| Sino Great Wall Southwest Construction Engineering Co., Ltd. | Current payment | 59,000,000.00 | Within 1 year | 2.05% | |
| Administration Committee of Fuping High-tech Development Zone | Deposit | 50,000,000.00 | 1 - 2 years | 1.74% | 5,000,000.00 |
| DBS Beijing Branch | Payment transferred to the account as deposit | 50,000,000.00 | Within 1 year | 1.74% | 2,500,000.00 |
| Total | -- | 2,642,909,209.78 | -- | 91.87% | 7,500,000.00 |
6) Receivables covered by governmental subsidy
Unit: Yuan
| Unit name | Name of government subsidy project | Closing balance | Closing aging | Estimated time, amount and basis of the receipt |
Nil
7) Other receivables for which the recognition is terminated due to the transfer of financial assets
Nil8) Asset and liability amounts incurred by the transfer of other receivables and continuing involvementNilOther notes:
3. Long-term equity investment
Unit: Yuan
| Item | Closing balance | Beginning balance | ||||
| Book balance | Provision for impairment | Book value | Book balance | Provision for impairment | Book value | |
| Investment in subsidies | 3,323,211,536.66 | 3,323,211,536.66 | 3,311,211,536.66 | 3,311,211,536.66 | ||
| Total | 3,323,211,536.66 | 3,323,211,536.66 | 3,311,211,536.66 | 3,311,211,536.66 | ||
(1) Investment in subsidies
Unit: Yuan
| Invested party | Beginning balance | Increase in the current period | Decrease in the current period | Closing balance | Provision for impairment in the current period | Closing balance of provision for impairment |
| Sino Great Wall International Engineering Co., Ltd. | 3,079,451,536.66 | 3,079,451,536.66 | ||||
| Wuhan Commercial Worker Hospital Co., Ltd. | 97,000,000.00 | 97,000,000.00 | ||||
| Sino Great Wall Medical Investment Management Co., Ltd. | 5,000,000.00 | 5,000,000.00 | ||||
| Changye City Shenzhou Laodingshan Industrial Co., Ltd. | 10,000,000.00 | 10,000,000.00 | ||||
| Xiangfen County Taoshan Construction Co., Ltd. | 10,000,000.00 | 10,000,000.00 | ||||
| Shenzhou Zhigu Industrial (Yueyang) Co., Ltd. | 109,760,000.00 | 109,760,000.00 | ||||
| Ningling County Inner Lake Wetland Shanty-town Renovation Construction Co., Ltd. | 5,000,000.00 | 5,000,000.00 | ||||
| Chengwu County Shenguang Engineering Project Management | 7,000,000.00 | 7,000,000.00 |
| Co., Ltd. | ||||||
| Total | 3,311,211,536.66 | 12,000,000.00 | 3,323,211,536.66 |
(2) Investment in associated companies and joint ventures
Unit: Yuan
| Investing party | Beginning balance | Increase or decrease in the current period | Closing balance | Closing balance of provision for impairment | |||||||
| Additional investment | Reduced investment | Gains and losses on investment recognized by equity method | Adjustment of other comprehensive income | Other equity changes | Declared distribution of cash dividends or profits | Provision for impairment | Others | ||||
| Ⅰ. Joint venture | |||||||||||
| Ⅱ. Associated companies | |||||||||||
(3) Other notes
4. Operating revenue and operating cost
Unit: Yuan
| Item | Amount incurred in the current period | Amount incurred in last period | ||
| Revenue | Cost | Revenue | Cost | |
| Other businesses | 197,962.06 | 240,558.55 | 1,482.50 | |
| Total | 197,962.06 | 240,558.55 | 1,482.50 | |
Other notes:
5. Investment income
Unit: Yuan
| Item | Amount incurred in the current period | Amount incurred in last period |
| Income from long-term equity investment calculated by cost method | 100,000,000.00 | |
| Total | 100,000,000.00 |
6. Others
XVIII. Supplementary information
1. Breakdown of non-recurring gains and losses in the current period
√ Applicable □ Not applicable
Unit: Yuan
| Item | Amount | Notes |
| Gains and loss from the disposal of non-current assets | -1,181,511.77 | |
| Government subsidy recognized in current gains and losses (excluding those closely related to the Company’s business and granted according to the unified national standard quota or quantity) | 105,536,702.00 | |
| Other non-operating income and expenditure except for the aforementioned items | -397,654,450.87 | |
| Influences on minority equity | -19.58 | |
| Total | -293,299,241.06 | -- |
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on Information Disclosure forCompanies Publicly Issuing Securities-Non-recurring Gains and Losses and its non-recurring gain/loss items that are listed in theExplanatory Announcement No.1 on Information Disclosure for Companies Publicly Issuing Securities-Non-recurring Gains and Losses andhave been defined as recurring gain/loss items, it is necessary to explain the reasons.□ Applicable √ Not Applicable
2. Return on equity and earnings per share
| Profits in the reporting period | Weighted average return on equity | Earnings per share | |
| Basic earnings per share (yuan/share) | Diluted earnings per share (yuan/share) | ||
| Net profits attributable to common stockholders of the parent company | -124.70% | -1.004 | -1.004 |
| Net profits attributable to common stockholders of the Company after deducting non-recurring gains and loss | -103.49% | -0.84 | -0.84 |
3. Accounting data differences under domestic and international accounting standards(1) Differences in net profits and assets in the financial reports disclosed in accordance with International andChinese accounting standards
□ Applicable √ Not Applicable
（2）Differences in net profits and assets in the financial reports disclosed in accordance with overseas andChinese accounting standards
□ Applicable √ Not Applicable
(3) Descriptions of reasons for accounting data differences occurring under domestic and foreign accountingstandards; if adjustment is made for data audited by an overseas audit institution, the name of the institutionshall be provided4. Others
XII. Documents Available for Inspection
Ⅰ. 2018 Financial Statements with signatures and seals of the legal representative, person in charge of the accounting work andperson in charge of the accounting institution.Ⅱ. Original of Auditor Report with the seal of the accounting firm and signatures and seals of the CPAs.Ⅲ. All originals of the Company documents and announcements publically disclosed on www.cninfo.com.cn, Security Times andHong Kong Commercial Daily.
Note: The report is prepared in Chinese and English. Should there be any discrepancy between the two versions, the Chinese versionshall prevail.