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振华重工2019年年度报告(英文版) 下载公告
公告日期:2020-07-25

Shanghai Zhenhua Heavy Industries Co., Ltd.

Annual Report 2019

Stock code: 600320 900947Stock Name: Zhenhua Heavy Zhenhua B-share

DenitionsCompany Prole and Principal Financial IndexesBusiness ProleDiscussion and Analysis of the PerformanceImportant EventsChanges in Ordinary shares and Shareholders' SituationPreferred SharesDirectors, Supervisors, Senior Executives and EmployeesCorporate governanceRelated Information on Corporate BondsFinancial ReportList of Reference Documents

Section ISection IISection IIISection IVSection VSection VISection VIISection VIII

Section IXSection XSection XISection XII

The Board of Directors, Board of Supervisors, directors, supervisors and senior executivesof the Company hereby guarantee the truthfulness, accuracy and completeness of thecontents carried in this annual report, guarantee no false record, serious misleadingstatement or great omission carried in this annual report and guarantee to assume thelegal responsibilities jointly and separately.All directors of the Company are present at the board meeting.Ernst & Young LLP. (Special General Partnership) issues the standard audit reportwithout qualied opinion for the Company.Zhu Lianyu, the chairman of the Company, Huang Qingfeng, responsible person foraccounting, and Zhu Xiaohuai , the person in charge of accounting organ (accountantin charge) hereby declare that the nancial statements in this Annual Report are true,accurate and complete.Proposal for profit distribution or common reserves capitalizing during the reportingperiod reviewed by the board of directorsProfit distribution proposal for 2019: based on the total share capital registered onthe registration date of the implementation of equity distribution, a cash dividend ofRMB 0.5 per 10 shares (tax-included) will be distributed to all shareholders from theundistributed prot as at Dec 31, 2019. The total cash dividend to be distributed will beRMB 263,417,675.05 based on the total share capital of 5,268,353,501 shares as atDecember 31, 2019.The Company will neither distribute the bonus shares nor transferthe capital public reserves into the paid-in capital.Risk declaration of forward-looking statements

□Applicable √ Not Applicable

Does the Company have non-operating funds occupied by the holding shareholderand its related parties?NoDoes the Company provide the external guarantees in breach of the stipulateddecision-making procedure?NoMajor Risk WarningThe company has described the related potential risks in this annual report. Investorsmay pay attention to the same. Please refer to discussion and analysis of theperformance and related chapters for the risks the company may be confronted with inthe future development.Others

□Applicable √ Not Applicable

Important Notice

The terms used in this report shall be dened as follows, unless otherwise specied:

Denitions of high frequency termsCompany, the CompanyRefers toShanghai Zhenhua Heavy Industries Co., Ltd.CCCCRefers toChina Communications Construction Company Ltd.CCCGRefers toChina Communications Construction Group Co., Ltd.CCCG HKRefers toCCCG (HK) Holding LimitedReporting periodRefers toFrom Jan. 1, 2019 to Dec. 31, 2019

I. DenitionsSection IDefinitions

Company Information1

Company name in Chinese上海振华重工(集团)股份有限公司Abbreviation of the Company name in Chinese振华重工Company name in EnglishSHANGHAI ZHENHUA HEAVY INDUSTRIES CO., LTD.Abbreviation of the Company name in EnglishZPMCLegal representative of the CompanyZhu LianyuContact information

Secretary of the Board of DirectorsNameSun LiAddressNo. 3261, Dongfang Road, ShanghaiTelephone021-50390727Fax021-31193316E-mailIR@ZPMC.COMBasic Information

Registered addressNo.3470, Pudong South Road, ShanghaiPostal code of registered address200125Ofce addressNo. 3261, Dongfang Road, ShanghaiPostal code of ofce address200125Websitehttp://www.zpmc.comE-mailIR@ZPMC.COMInformation disclosure and placement locationNewspaper designated by the Company for informationdisclosure

Shanghai Securities News, Hong Kong Wen Wei PoWebsite designated by China Securities RegulatoryCommission (CSRC) for publishing the annual report of theCompany

www.sse.com.cnPlacement location of the annual report of the CompanySecurities Affairs Ofce

Section IICompany Profile and Principal Financial Indexes

Stock information

Stock InformationStock typeStock exchangeStock abbreviationStock codeStock abbreviation before changeA-shareShanghai Stock Exchange (SSE)Zhenhua Heavy600320ZPMC IndustriesB-shareShanghai Stock Exchange (SSE)Zhenhua B-share900947-

6Other relevant informationPublic accountingrm engaged by theCompany (domestic)

NameErnst & Young LLP (Special General Partnership)Ofce address

Room 01-12, Floor 17th, Ernst & Young Tower Oriental Plaza, No.1East Changan Street, Dongcheng District, BeijingSigned by the AccountantsLiu Wei, Gu Chengli

(I) Main accounting dataMain accounting data and nancial indexes in recent three years7

Unit: Yuan Currency: RMBMain accounting dataYear 2019Year 2018

Year-on-yearchange (%)

Year 2017Operating revenue24,595,587,88321,812,389,64412.7621,858,814,000Net prot attributable to the shareholders of the listedcompany

514,930,143443,005,09216.24300,195,422Net prot attributable to the shareholders of the listedcompany after deducting the non-recurring prots and losses

311,117,615121,335,528156.41277,837,568Net cash ows from operating activities1,290,213,109553,943,979132.911,332,209,274

At the end of2019

At the end of2018

Year-on-yearchange (%)

At the end of

2017Net assets attributable to the shareholders of the listedcompany

15,543,404,01415,185,861,9522.3515,011,306,366Total assets74,410,783,30070,598,364,6275.4067,519,953,829(II) Major nancial indexes

Major nancial indexesYear 2019Year 2018Year-on-year change (%)Year 2017Basic earnings per share(RMB/share)0.0980.08416.670.057Diluted earnings per share (RMB/share)0.0980.08416.670.057Basic earnings per share after deducting non-recurring prots and losses (RMB/share)

0.0590.023156.520.053Weighted average ROE (%)3.392.92+0.471.99Weighted average ROE after deducting non-recurringprots and losses (%)

2.060.80+1.261.84

Notes to the main accounting data and nancial indexes in the past 3 years before the end of the reporting period

□Applicable √ Not Applicable

Differences in accounting data under domestic and overseas accounting standards

1.Difference in net profits and net assets attributable to the shareholders of the listed company in the financial

statement synchronously disclosed under the international and national accounting standards

□Applicable √ Not Applicable

2.Difference in net profits and net assets attributable to the shareholders of the listed company in the financial

statement synchronously disclosed under the domestic and overseas accounting standards

□Applicable √ Not Applicable

3.Explanation for differences between the domestic and overseas accounting standards:

□Applicable √ Not Applicable

Main nancial data in 2019 by quarters

Unit: Yuan Currency: RMB

Q1(Jan. to Mar.)

Q2(Apr. to Jun.)

Q3(Jul. to Sep.)

Q4(Oct. to Dec.)Operating revenue4,776,791,9745,409,998,7605,351,591,7499,057,205,400Net prot attributable to the shareholders of the listed company98,988,791123,433,88520,809,039271,698,428Net prot attributable to the shareholders of the listed companyafter deducting the non-recurring prots and losses

-134,306,822172,856,694145,747,664126,820,079Net cash ows from operating activities59,817,5521,002,96230,455,3761,198,937,219Notes to differences between the quarterly data and the data in periodically disclosed reports

□Applicable √ Not Applicable

Non-recurring prot and loss items and amount

√Applicable □Not applicable

Unit: Yuan Currency: RMBNon-recurring prot and loss items

Amount in2019

Note (ifapplicable)

Amount in

2018

Amount in2017Prot or loss from disposal of non-current assets49,091,913155,557,71613,285,984Government grants included in current prots and losses exceptfor government grants closely related to the Company business,in line with national policies and obtained by quota or quantity atunied state standards

93,271,980114,412,51783,502,544Prot or loss on changes in fair values of nancial assets heldfor trading and nancial liabilities held for trading and investmentincome obtained from disposal of nancial assets held for trading,nancial liabilities held for trading and available-for-sale nancialassets, except for effective hedging operations associated with thecompany's normal operations

146,517,39774,200,75020,563,270Reversal of provision for impairment of receivables subject toseparate impairment test

150,327,138-

Non-recurring prot and loss items

Amount in

2019

Note (ifapplicable)

Amount in

2018

Amount in

2017Other non-operating revenue and expenses except for the above-mentioned items

-18,553,180-67,069,856-70,077,032Affected amount of minority equity-23,013,076-30,908,588-14,565,022Affected amount of income tax-43,502,506-74,850,113-10,351,890Total203,812,528321,669,56422,357,854Items measured at fair value

√Applicable □Not applicable

Unit: Yuan Currency: RMB

Others

Item

Beginningbalance

Endingbalance

Currentchange

Impact oncurrentprotsJiangxi Huawu Brake Co., Ltd.102,163,301132,211,33230,048,03130,048,031Qingdao Port International Co., Ltd.476,713,253510,671,77133,958,51833,958,518China Railway Signal & Communication CorporationLimited

591,773,048479,560,537-112,212,511-112,212,511Shenwan Hongyuan Group Co., Ltd.889,7921,119,345229,553229,553COSCO Shipping Holdings Co., Ltd.0585,555,555585,555,555165,555,556Derivative nancial assets44,481,80622,235,244-22,246,562-22,246,562Derivative nancial liabilities0-7,312,741-7,312,741-7,312,741Equity instrument investment8,438,2788,438,27800Hunan Fengri Power & Electric Co., Ltd.20,398,05124,348,6893,950,6380CCCC Highway Bridges National Engineering ResearchCentre Co., Ltd.

18,693,21517,649,136-1,044,0790CCCC National Engineering Research Center of DredgingTechnology and Equipment

7,837,1469,005,3781,168,2320Shanghai Zhenhua Port Machinery (Group) ShenyangElevator Co., Ltd.

2,271,4002,865,664594,2640ZMPC Ningbo Transmission Machinery Co., Ltd5,308,5147,241,6101,933,0960Shanghai Zhenhua Gangkou Machine (Group) LongchangLifting Equipment Co., Ltd.

818,203870,79152,5880Total1,279,786,0071,794,460,589514,674,58288,019,844

□Applicable √Not applicable

I. Main business, business model of the Company and the industrial prole during the reporting periodThe Company is a famous heavy-duty equipment manufacturer, and a state-owned listed company on A and B shares,with the headquarters in Shanghai and multiple production bases in Shanghai and Nantong. It is also the biggest port heavy-duty machinery equipment manufacturer in the world. The business scope of ZPMC mainly covers: marine heavy industry,heavy special steel structure, marine transportation and installation, system integration, engineering general contracting,electrical product, software development and integration, investment and nancing business, integrated services; It is alsoactively expanding smart industries, livelihood consumption, integrated development and digital industries. At present, theproducts of the Company enter 103 nations and regions.

The business scope of the Company covers: design, construction, installation and contracting of large port loadingand unloading system and equipment, offshore heavy equipment, engineering machinery, engineering vessels and largemetal structural parts and their parts and components; ship repair; leasing of equipment; leasing of self-owned houses;leasing of self-produced crane; sales of the products made by the sales company; international sea transportation by specialpurpose vessels that can be transported with the whole equipment; specialized contracting of steel structure engineering;construction of electric construction engineering; and construction of electromechanical installation and constructionengineering; research and development, installation and sales of oil and gas exploration equipment and mechanicalengineering equipment; design of marine engineering buildings; technology development, technical consulting, technicalservices, and technology transfer in the fields of computer software and information, computer network, mechanicaltechnology, environmental protection technology, new energy technology, intelligent technology; installation and maintenanceof railway and urban rail transportation equipment and accessories; property management; loading, unloading, handlingand storage; parking lot (warehouse) operation and management; import and export business of goods and technologies (Incase of quota, license management, special regulations, quality inspection, safety inspection and construction qualicationrequirements involved, it shall not carry out the business activities before obtaining the corresponding qualifications orlicenses in accordance with the relevant national regulations).[Items subject to approval according to law can be carried outonly after such approval is granted by the competent authorities]II. Explanation for major changes in prime assets of the Company during the reporting period

□Applicable √ Not Applicable

III. Analysis of the core competitiveness during the reporting period

√ Applicable □ Not Applicable

There was no material difference in the core competitiveness of the Company during the reporting period.

Section IIIBusiness Profile

I. Discussion and Analysis of the Performance

In 2019, under the guidance of the "One Entity with Two Wings" strategy, the Company proceeded with condence,seized development opportunities, and took innovation as its source of power. Through continuous deepening of reformsand continuous improvement of management system construction, the Company's core competitiveness was furtherconsolidated. Its business segments are developing with steady progress.During the reporting period, the Company's leading position in the port machinery business was further consolidated.It explored new market of port machinery products, and the business entered 103 nations and regions. Many new domesticand international projects have been signed for the automated terminal business. Offshore destocking work of offshoreengineering has achieved periodic results, and has successfully delivered several large offshore projects. The steel structurebusiness has improved signicantly, and the amount of newly signed contracts has increased sharply. Investment businessprojects under construction progressed steadily, signing the first operational investment project. For the marine servicebusiness, the expansion of the high-end shipping, installation and offshore wind power general contracting business marketsare further strengthened. The market share of the electrical business and the market inuence of the EZ brand have furtherincreased. Progress has been made in integrated services, and after-sales service quality and contract value have beenimproved. The general contracting business continued to proceed with steady progress.Emerging business achieved remarkable results. In the smart industry sector, the port automation business leverages5G technology, the smart parking business has blossomed in multiple ways, and the warehousing and logistics business hasachieved a breakthrough. In the livelihood consumption industry, it focused on old residential area renovation, prefabricatedconstruction, security and other services. While accumulating project experience, new markets are gradually opened up.It conducts in-depth development of integrated development industry. Digital exhibition industry continues to improve. TheTerminexus e-commerce cloud platform continues to be optimized, and the Company's ERP, PLM, ECM and other digitalprojects are progressing orderly.II.Performance during the reporting period

During the reporting period, the Company realized the operating revenue amounting to RMB 24,595,587,883,representing a year-on-year increase of 12.76%; the total profit was RMB 590,872,197, with a year-on-year increase of

10.02%; the net prot attributable to the owner of the parent company was RMB 514,930,143, with a year-on-year increase

of 16.24%.1 Analysis of the performance

1. Analysis table of changes in the related items in prot statement and cash ow statement

Unit: Yuan Currency: RMBItem

Amount in the current

period

Amount in the sameperiod of the last year

Change (%)Operating revenue24,595,587,88321,812,389,64412.76Operating cost20,590,531,32218,082,285,75213.87Selling and distribution expenses122,517,036115,541,1616.04General and administrative expenses1,095,131,2871,142,337,348-4.13Research and development expenditures887,096,178672,614,07331.89Financial expenses1,496,586,4141,522,264,813-1.69Investment income174,600,552116,030,97950.48Income from changes in fair value88,019,84444,481,80697.88

Section IVDiscussion and Analysis of the Performance

Item

Amount in the current

period

Amount in the sameperiod of the last year

Change (%)Losses from credit impairment-38,761,593-N/AGains from disposal of assets49,091,913155,557,716-68.44Net cash ows from operating activities1,290,213,109553,943,979132.91Net cash ows from investing activities-1,547,161,450-2,779,460,550-44.34Net cash ows from nancing activities141,933,820-408,453,790-134.75

2. Analysis of revenue and cost

√ Applicable □ Not Applicable

The increase in the research and development expenditures was mainly caused by the increase in the expenses forresearch and development projects of the Company.The increase in the investment income was mainly caused by the increase in the cash dividends from the financialassets share investment of the Company.The increase in the gains from changes in fair value was mainly caused by the increase in the gains from changes in thefair value of share investment of nancial assets held for trading.The changes in the losses from credit impairment was mainly caused by the implementation of the new financialinstrument standards by the Company and reclassication of losses from credit impairment.The decrease in the gains from disposal of assets was mainly caused by the decrease in the net gains from the disposalof xed assets.The changes in the net cash ows from operating activities were mainly caused by the increase in the payment forgoods and project payments received from the Company for the sales of goods and rendering of labor services.The changes in the net cash ows from investing activities were mainly caused by the decrease in the cash paid topurchase and construct xed assets.The changes in the net cash ows from nancing activities was mainly caused by the increase in bank borrowings.

(1) Main businesses by sectors, products and regions

Unit: Yuan Currency: RMBMain business by productsProduct

Operating

revenue

Operating cost

Gross protrate (%)

Year-on- yearchange inoperatingrevenue (%)

Year-on-yearchange inoperating cost (%)

Year-on-year change ingross prot rate (%)Port machinery16,458,563,16413,240,912,28619.69.816.1-4.3Heavy-duty equipment1,491,597,7491,218,182,03118.3-45.7-53.3+13.3“Building-construction”and projectconstruction items

2,564,145,0182,428,961,1595.374.966.9+4.6Steel structure andrelated income

2,709,430,9772,571,473,9945.173.855.3+11.3Marine transport andothers

989,117,844959,513,5613.019.617.9+1.4

Main business by regionsRegion

Operatingrevenue

Operating cost

Gross protrate (%)

Year-on- yearchange in operating

revenue (%)

Year-on-year

change inoperating cost (%)

Year-on-yearchange in grossprot rate (%)Mainland, China12,346,088,29711,200,513,0639.322.911.8+9.0Asia (excludingChinese Mainland)

3,469,961,1932,482,979,66528.4-17.5-1.3-11.7North America2,205,954,5341,717,614,14322.18.71.3+5.6South America963,140,369854,282,71811.3-7.440.3-30.2Europe3,416,405,4992,988,874,73212.5118.9133.9-5.6Mainland China(export sales)

697,069,989349,377,37349.95.022.5-7.2Africa761,455,510513,591,81232.6-49.5-54.1+6.8Oceania352,779,360311,809,52511.6-33.6-26.1-9.0

Notes to the main business by sectors, products and regions1: The amount listed in “Chinese Mainland (export sales)” in “Main business by regions” was the main operation incomefrom the export sales of this Company to the overseas subsidiaries or the related parties of the Company and then sales tothe related projects of the domestic customers.

2: The Company expanded the business in Europe in this year, resulting in the corresponding rise in operating revenue.

(2) Analysis table of cost-volume-prot relationship

□Applicable √ Not Applicable

(3) Cost analysis table

Unit: YuanBy productsProductItems of cost structure

Amount in thecurrent period

Proportion intotal cost inthe currentperiod (%)

Amount in thesame period ofthe last year

Proportion of the onein the same period ofthe last year in totalcosts (%)

Year-on-yearchange (%)

NotesPort machinery

Raw material cost, laborcost and production cost

13,240,912,28664.811,405,896,70763.616.1

NormaloperatinguctuationsHeavy-dutyequipment

Raw material cost, laborcost and production cost

1,218,182,03162,608,895,65314.5-53.3

NormaloperatinguctuationsEngineeringconstructionprojects

Raw material cost, laborcost and production cost

2,428,961,15911.91,455,633,8648.166.9

NormaloperatinguctuationsSteel structure andrelated income

Raw material cost, laborcost and production cost

2,571,473,99412.61,656,155,9359.255.3

NormaloperatinguctuationsMarine transportand others

Raw material cost, laborcost and production cost

959,513,5614.7813,493,3424.517.9

NormaloperatinguctuationsOther information about cost analysisNone.

(4) Particulars about main customers and suppliers

√ Applicable □ Not Applicable

The sales volume of Top 5 customers was RMB 3.81165 billion, accounting for 16% of total annual sales volume; thesales volume of the related parties in that of Top 5 customers was RMB 1.44365 billion, accounting for 6% of total annualsales volume.The purchase amount of Top 5 suppliers was RMB 3.68803 billion, accounting for 14% of total annual purchase amount;the purchase of the related parties in that of Top 5 suppliers was RMB 1.55912 billion, accounting for 6% of total annualpurchase amount.Other notesNone.

3.Expenses

√ Applicable □ Not Applicable

The research and development expenditures of the Company in 2019 was RMB 887,096,178, representing a year-on-year increase of 31.89%. The increase was mainly caused by the increase in the expenses for the research anddevelopment projects of the Company.

4. Investment in R&D

(1) Detail table of investment in R&D

√ Applicable □ Not Applicable

Unit: YuanCurrent expensed investment in R&D887,096,178Current capitalized investment in R&D26,086,662Total investment in R&D913,182,840Proportion of total investment in R&D in operating revenue(%)3.71Number of R&D employees in the Company1,695Proportion of number of R&D employees in the totalemployees of the Company (%)

19.48

Proportion of capitalized investment in R&D (%)2.86

(2) Explanation

□Applicable √ Not Applicable

5. Cash ow

√ Applicable □ Not Applicable

The net cash ow from operating activities was RMB 1.290 billion, mainly caused by the increase in payment for goodsand project funds received from the sales of goods/rendering of labor services; The net cash flow from the investmentactivities was RMB -1.547 billion, mainly caused by the decrease in cash payment for purchase and construction of xedassets of the Company. The net cash ow from the nancing activities was RMB 142 million, mainly caused by the increasein the bank borrowings by the Company.2 Explanation for the signicant changes in prots due to non-main business

□Applicable √ Not Applicable

3 Analysis of assets and liabilities

√ Applicable □ Not Applicable

1. Assets and liabilities

Unit: YuanItem

Amount atthe end of thecurrent period

Proportion of theamount at the endof the current period

in total assets (%)

Amount atthe end of theprevious period

Proportion of theamount at the end ofthe previous periodin the total assets (%)

Year- on-year change

(%)

NotesFinancial assets held for trading1,739,792,0622.34-0.00100.00%Financial assets measured atfair value through the currentprot or loss

-0.0052,920,0840.07-100.00Notes receivable5,650,0000.01189,371,1050.27-97.02Receivables nancing406,408,6040.55-0.00100.00%Advances to suppliers935,878,7771.261,681,187,7152.38-44.33Non-current assets maturingwithin one year

1,313,203,5811.76894,638,4241.2746.79Non-current assets720,183,5740.971,152,476,4391.63-37.51Available-for-sale nancial assets-0.001,214,533,5541.72-100.00Other equity instrumentinvestment

61,981,2680.08-0.00100.00Construction in progress4,380,489,8885.893,050,468,2924.3243.60Short-term borrowings22,001,319,38029.5716,554,687,48723.4532.90Advances from customers822,987,9861.11494,744,3740.7066.35Non-current liabilities maturingwithin one year

7,287,484,5139.794,209,532,5105.9673.12Long-term borrowings8,413,339,98611.3115,097,725,25921.39-44.27Other non-current liabilities376,626,8210.51288,474,6960.4130.56Other notesThe changes in the nancial assets held for trading were mainly caused by the implementation of the new nancialinstrument standards by the Company and reclassication of nancial assets.The decrease in nancial assets measured at fair value through the current prot or loss was mainly caused by theexpiration of the forward foreign exchange contract purchased by the Company.The decrease in the notes receivable was mainly caused by the implementation of the new financial instrumentstandards by the Company and reclassication of nancial assets.The increase in the receivables nancing was mainly caused by the implementation of the new nancial instrumentstandards by the Company and reclassication of nancial assets.The changes in the advances to suppliers were mainly caused by the increase in the carry-forward of advances tosuppliers upon the arrival of the productive materials purchased by the Company.The increase in the non-current assets maturing within one year was mainly caused by the increase in the long-termreceivables maturing within one year.The decrease in other current assets was mainly caused by the decrease in the deductible VAT input tax of theCompany.The decrease in the available-for-sale nancial assets was mainly caused by the implementation of the new nancialinstrument standards by the Company and reclassication of nancial assets.The increase in the other equity instrument investment was mainly caused by the implementation of the new nancialinstrument standards by the Company and reclassication of nancial assets.The increase in the construction in progress was mainly caused by the increase in the large machinery and engineeringequipment in progress.

The increase in short-term borrowings was mainly caused by the increase in the short-term current fund loan requiredby the production of the Company.

The increase in the advances from customers was mainly caused by the increase in the payment for goods received inadvances from customers.

The increase in the non-current liabilities maturing within one year was mainly caused by the increase in the long-termbank borrowings maturing within one year.

The decrease in the long-term borrowings was mainly caused by the increase in the long-term borrowings maturingwithin one year.

The increase in the other non-current liabilities was mainly caused by the increase in the output tax to be carriedforward.

2. Particulars about main restricted assets by the end of the reporting period

√ Applicable □ Not Applicable

Item

Book value at the end of the

period

Reason for restrictionMonetary funds242,272,475

Special fund, letter of guarantee from the bank and guarantee fundfor L/C collected from the overseas projects and deposited in theoverseas supervision accountFixed assets5,694,247,285Collateral for loanLong-term receivables4,482,230,928Hypothecation for loanTotal10,418,750,688/

3. Other information

□Applicable √ Not Applicable

4 Analysis of operational information of the industry

√ Applicable □ Not Applicable

The value of the newly concluded contracts by the Company on the port machinery was USD 2.96 billion, with a year-on-year increase of 11.61%. The value of the newly concluded contracts on marine engineering products and steel structurewas USD 1.463 billion, with a year-on-year increase of 62.02%, among which the one on steel structure was USD 697million. The value of the newly concluded contracts on investment business was RMB 2.037 billion, with a year-on-yearincrease of 5.05%.In the port machinery industry, the increase in market demand for traditional new equipment has slowed down.Businesses such as the construction of automated terminals, after-sales maintenance and renovation of existing equipmenthave become new bright spots in the market. With the ofcial commercialization of 5G technology, cutting-edge technologiessuch as 5G, artificial intelligence and big data will accelerate the transformation and upgrading of the port and shippingindustry.In the offshore industry, as the country attaches more importance to the development of the marine economy, thedemand for offshore supporting services such as energy exploitation, transportation, and installation will increase to a certainextent, but the trend of international oil prices still brings uncertainty to the recovery time of the offshore industry.The steel structure industry beneted from the increase in investment in infrastructure, and the overall situation of theindustry is more optimistic. However, due to the low access threshold, the competition is ercer, and the efciency needs tobe further improved.The investment industry continues to be optimized, driving the entire industry chain to a new development track.Domestic investment in industries such as manufacturing, infrastructure, and green energy has entered a stage of high-quality development. For a long period of time in the future, funds will continue to be biased towards the common benet ofsupply and demand, advanced manufacturing and livelihood construction with multiplier effects, infrastructure construction,and other elds.

For emerging industries, the exploration and application of 5G and digital technologies will continue to empowermanufacturing. The reconstruction of old communities, the construction of prefabricated buildings, and the construction ofsmart cities are in line with the needs of the times and present strong development potential. With the support of nationalpolicies, the integrated development industry has gradually optimized its market environment, gradually consolidated itsindustrial foundation and integrated its content.5 Analysis of investment

1.Overall analysis of external equity investment

√ Applicable □ Not Applicable

Investment amount by the end of reporting period4,644,773,553Changes in investment amount (RMB)654,438,239Investment amount in the same period of the last year3,990,335,314Change in investment amount (%)16.40

On January 9, 2019, the fourth meeting of the seventh Board of Directors of the Company deliberated and approvedthe Proposal on the Subscription of Non-Public Issuance of A Shares by COSCO SHIPPING HOLDINGS, and the Companysubscribed 111,111,111A shares issued in a non-public manner by COSCO SHIPPING HOLDINGS with the self-owned fundamounting to RMB 419,999,999.58. During the reporting period, the Company has completed the subscription of A-sharesissued in a non-public manner by COSCO SHIPPING HOLDINGS.

(1) Signicant equity investment

□Applicable √ Not Applicable

(2) Signicant non-equity investment

□Applicable √ Not Applicable

(3) Financial assets measured at fair value

√ Applicable □ Not Applicable

Stock code

Stockabbreviation

Initialinvestment

cost

Initialshareholdingratio (%)

Finalshareholdingratio (%)

Book valueat the end ofthe period

Prot or lossin reportingperiod

Changes inowners’ equityduring thereporting period

Accountingsubject

Source ofshares03969CRSC617,854,0001.401.40479,560,537-112,212,511-112,212,511

Financial assetsheld for trading

Purchase onmarket06198Qingdao Port308,515,5881.591.59510,671,77133,958,51833,958,518

Financial assetsheld for trading

Purchase onmarket300095Huawu Stock11,071,6065.885.88132,211,33230,048,03130,048,031

Financial assetsheld for trading

Contribution601919

COSCOSHIPPINGHOLDINGS

420,000,000-0.91585,555,555165,555,556165,555,556

Financial assetsheld for trading

SubscriptionStock equity held in nancial enterprisesObjectname

Initialinvestment

cost

Initialshareholdingratio (%)

Finalshareholdingratio (%)

Book value atthe end of theperiod

Prot or lossin reportingperiod

Changesin owners’equity duringthe reportingperiod

Accountingsubject

Source ofsharesShenwanHongyuan

200,000﹤0.01﹤0.011,119,345229,553229,553

Financial assetsheld for trading

Subscription

6 Sales of signicant assets and equities

□Applicable √ Not Applicable

7 Analysis of the primary holding companies and the joint-stock companies

√ Applicable □ Not Applicable

Company NameMain product or services

Registeredcapital

Assets size

Net prot/(loss)Shanghai Zhenhua HeavyIndustries Group (Nantong)Transmitter Co., Ltd.

Construction and installation of large-scale port equipment,engineering vessels, offshore heavy equipment, mechanicalequipment, gear box for wind power generation equipment; large-sized reverse branch, transmission mechanism, dynamic positioning,large-sized anchor windlass, offshore oil platform lifting device andcomponents; design and manufacturing of the accessories.

591,102,6631,454,550,11947,393,360Nanjing Ninggao New ChannelConstruction Co., Ltd

Engaged in the construction, investment and management ofNanjing-Gaochun new channel project.

100,000,000573,330,81433,186,360

Tianhe Mechanical EquipmentManufacturing Co., Ltd of CCCC

System integration design, R&D and manufacturing of tunnel boringmachine with the diameter of over 6m; system integration design,R&D and manufacturing of tunnel boring machine (TBM) with thediameter of over 5m; design, R&D and manufacturing of marinemachinery and parts, cranes and parts, bridges and high dampingbracket for buildings; sales of self-produced products. Whole salesand import & export business of marine machinery and parts, cranesand parts, bridges and high damping bracket for buildings (if nocommodity controlled by the national trade, designed quota andlicense is involved, the related national rules will prevail); installation,maintenance, leasing, consulting, technical services for its self-produced products (foreign capital proportion is less than 25%) (asfor the items requiring the approval, carry out the business activitiesafter obtaining the approval from the authorities)

681,627,1005,116,525,52571,810,934

Shanghai Zhenhua Shipping Co.,Ltd

Operation of international offshore sea transportation; ordinarycargo liner trafc in the middle and lower reaches of Yangtze River;transportation of port machinery.

120,000,0001,741,180,746-63,701,126Shanghai Zhenhua PortMachinery (Hong Kong) Co., Ltd.

Design, manufacturing and sales of port machinery, engineeringvessel, steel structure and other parts

HKD 50,000,00014,248,751,060-231,684,714Shanghai Zhenhua HeavyIndustries Port Machinery GeneralEquipment Co., Ltd.

Sales of port loading and unloading machine, bulk cargo andcontainer machine, port engineering vessels (including oatingengineering crane), material handling mechanical products andparts, sales and technical services, installation and maintenance,technical consultation of all types of machine and equipment, keyparts of the raw materials and accessories equipment.

2,184,730,0002,843,353,791-7,940,921

Nantong Zhenhua HeavyEquipment Manufacturing Co., Ltd.

Installation of heavy port equipment, engineering vessels, heavymetal structure and its parts; manufacturing and installation of gearbox, container yard crane, super heavy-duty bridge steel structure,heavy marine machinery equipment; leasing of cranes; specializedcontracting of steel structures etc.

1,154,936,9003,732,350,2083,240,217ZPMC Qidong Marine EngineeringCo., Ltd.

Machinery manufacturing303,000,0002,014,831,008-142,837,846

Company NameMain product or services

Registeredcapital

Assets size

Net prot/(loss)Shanghai Zhenhua OceanEngineering Service Co., Ltd

Agency of international land transport, air transport, oceanshipping and domestic freight; sales of large-scale port equipment,engineering vessel equipment and marine materials at homeand abroad; construction of ocean engineering and leasing ofengineering vessels; import and export of goods and technologies,transit trade, trade between enterprises and trade agency within thefree trade zone.

100,000,000675,537,0335,468,768Zhenhua Pufeng Wind Energy(HongKong) Co., Ltd.

Installation of offshore wind turbineUSD 16,326,531 645,570-7,434,259CCCC Financial Leasing Co., Ltd.Finance lease5,000,000,00041,279,094,102386,156,164China Communicationsconstruction USA. Inc

Construction of port, waterway, highway and bridge.USD 50,000,000253,126,692-8,972,397CCCC Estate Yixing Co., Ltd.Real estate development900,000,0001,537,005,529-2,269,490Jiangsu Longyuan ZhenhuaMarine Engineering Co., Ltd

Fabrication and installation of steel structure; construction of

the foundation for offshore wind power facilities, installation and

maintenance of equipment; construction and maintenance of

submarine cable system, construction of marine engineering;

installation and maintenance of equipment and leasing of equipment.

260,000,0002,693,210,39833,230,880Greenland Heavylift (Hongkong)Limited

Marine transport USD 91,975,1582,244,921,836-18,416,656

8 Particulars about structured entities controlled by the Company

□Applicable √ Not Applicable

III. Discussion and analysis of the future development of the Company1 Industrial structure and trend

√ Applicable □ Not Applicable

The demand for port machine products remained stable; the overall protability of upstream shipping companies fromthe recent situation is conducive to the long-term development of the terminal industry; the development of automation andintelligent technologies will continue to empower terminals and lead the future development of global terminals. Driven bythe upsizing trend of container shipping, the shore bridge heightening market will continue to grow; due to the superpositionof various factors such as port group integration, terminal re-planning, equipment re-maintenance and re-manufacturing, theequipment relocation market will also maintain a large growth space. Due to the continued uctuations in international crudeoil prices, the development of offshore oil and gas projects and related equipment demands remain to be seen. It is still acommon phenomenon in the industry to obtain steel structure orders depending on the general contracting of the project.Large, heavy and special steel structures with high-tech added value are still the direction of efforts for steel structureenterprises to improve the industry competitiveness. With the deep development of green renewable energy, offshorewind power is expected to become the rst choice for clean energy in a certain period in the future. As an important basicequipment for the construction of wind farms, offshore wind power installation vessels have broad development space. Theintegration of the Yangtze River Delta, the development of emerging regional markets such as the Guangdong-Hong Kong-Macao Greater Bay Area, Xiong'an, Hainan and Fujian, and the launch of some major engineering projects have placedhigher demands on the investment capabilities of enterprises.The livelihood consumption such as elevator installation, three-dimensional garage products, smart logistics, marineranch industry and other fields has vast market space. In the future, the digital economy model will benefit from theimprovement of the network scale effect, realize the rapid optimal allocation and regeneration of resources, and further forman economic form of high-quality development. The development of the digital industry will face greater opportunities fordevelopment.

2 Development strategy of the Company

√ Applicable □ Not Applicable

By taking “equipment manufacturing“ as the entity, “capital operation” and “Internet” as two wings, it aims to build“Flag + Flagship” of Chinese national industry. “One Entity with Two Wings” strategy is a new strategy for transformationand upgrade of the Company after objectively analyzing the development stage and orientation of the Company, based onnational and industrial development trend at present and in future, around “Industry 4.0”and“Made in China 2025”, by rmlyseizing the development opportunities of the reform of state-owned enterprises “Double Hundred Action”, in combinationwith the development features of equipment manufacturing industry. “Capital operation” will help the Company to extend theindustrial chain of the port machine business and create the whole industrial chain of marine heavy industry and offshorewind power; help the Company and the customers as well as the partners to form a community of a shared future with thecapital as the tie. The digitized transformation and upgrade of the Company under “Internet” can accelerate the upgradeof the information system in an all-round way and create the cloud platform through the top information-oriented designof the Company to offer more convenient, efcient, intelligent and integrated service to the global customers. Meanwhile,by using 5G technology as a carrier, we continue to enrich the concept of "Internet" and use smart port construction as abreakthrough to further expand the rich connotation of "+ 5G" and apply 5G technology to various elds such as strategy,design, manufacturing, products, services, etc. to promote the quality revolution, efciency revolution, power revolution of theCompany.3 Operation plan

√Applicable □Not applicable

Guided by the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, the Company fullyimplemented spirit of the 19th National Congress of the Communist Party of China, the second plenary session of the19th Central Committee of the Communist Party of China, the third plenary session of the 19th Central Committee of theCommunist Party of China and the fourth plenary session of the 19th Central Committee of the Communist Party of China,and the spirit of the Central Economic Working Conference and the meeting of leaders of central enterprises, stayed close toits striving goal of becoming the excellent company worldwide with the international competitiveness and continuing to buildthe “Flag + Flagship” of China’s national industry, followed the general principle of making progress while working to keepperformance stable, and persisted to the new development concept and the strategy of “One Body Two Wings”, focused onimproving the company development quality and capacity level, continued to deepen reform as the main force, promotedthe green, high-quality development, and comprehensively carried out reform, development and stability, to guarantee thesteady, sustained and healthy development of all tasks of the Company.

The Company will try its best to expand the business related to the port machinery market and continue to increasethe development and promotion of the market of automated terminals. It will seize the market opportunities in "the Belt andRoad” countries, intensify the promotion of domestic accessories for port machinery products, and increase the market shareof autonomic electric cabinet and gear box. It will continue to ll the gap in the product chain of port machinery, and expandthe market for port machinery mobile machines, such as the straddle carrier, front-facing cranes, reach stacker and forklift.Through the integration of resources, the Company will improve user experience, and expand the Company's full life cycleservice market rapidly and steadily. The Company will fully support and expand the port machinery renovation, relocationand other value-added service markets; fully support the unied sales of spare parts and accessories, to quickly form thecompetitive force of the Company's port machinery services.

For ocean engineering, the Company will continue to reduce inventory and improve protability simultaneously, do agood job in contract performance, risk prevention and benet improvement regarding the leased drilling platforms. It strivesto make breakthrough in ocean engineering EPC; continue to consolidate the research and development capabilities oftraditional engineering ships and promote the market-driving competitiveness via the competitiveness of ocean engineeringtechnology; for steel structure business, the ne steel structure manufacturing and EPC are necessary, where the correlatedmarket should be formed, together with the prefabricated building business developed by the Company, to improve thediversity and protability of steel structure products; bring into play the integrated advantages of advanced ocean engineeringand transportation equipment in different levels and types to vigorously expand the ocean engineering EPC, includingtransportation, installation, operation & maintenance and disassembly; form the joint force of different units of offshore windpower business, and consolidate offshore wind power equipment and construction advantages to strive to improve theprotability thereof; focus on the Company's internal and external markets, continue to consolidate and expand the traditionalport machinery electronic control market, and put effort into business development, including automatic tire cranes, remoterenovation, and shore power for ships; strive to increase the market share of mechanical and electrical EPC; do a good

job in the intelligent manufacturing business projects under construction, and steadily improve the Company's intelligentmanufacturing level; actively explore investment opportunities related to the main business, promote the construction of"Zhenhua incubator for mass entrepreneurship and innovation" through innovation, and give full play to the leading force ofcapital operation.Aim at the huge development opportunity of the country's strong support for intelligent parking, accelerate theimplementation of projects through technological innovation and business model innovation, and take intelligent parkingas the starting point and breakthrough of the layout of intelligent industry, letting them continue to expand into areas suchas intelligent logistics and intelligent ocean, to promote the implementation of projects of different intelligence scenarios;strengthen the cooperation with the government, universities and industry institutions, make effort to promote the renovationof old residential areas, campus security and other livelihood projects; give full play to and accumulate the Company'sinternal and external advantages in participating in the construction of marine ranchings, accelerate and expand thedevelopment of breeding equipment market, and accelerate the design and implementation of business models; attach greatimportance to the digital economy, accelerate the digital transformation and upgrading of Zhenhua, accelerate the cultivationof the digital industry, and turn data, ows and platform value into cash.The Company will focus on national strategic opportunities such as the coordinated development of the Beijing-Tianjin-Hebei region, the integrated development of the Yangtze river delta, the construction of Yangtze river economic belt,Guangdong-Hong Kong-Macao Greater Bay area, Xiong’an New Area, Hainan Pilot Free Trade Zone, Northeast Fujianand Fuzhou on the sea, and make systematic plans for the development of strategic regional markets. Give full play to theCompany's strong operating strength in overseas regions, integrate the industrial chain advantages, and actively develop theoverseas project EPC market.4 Potential risks

√Applicable □Not applicable

Market risk: the growth force of the world economy is weakened, the increase in the international trade slows down,the trade friction between China and USA and the challenges from the deglobalization trend on the global economy imposesome uncertainties on the development of the Company. The market competition of the container port machinery is stillfierce, the ocean engineering industry is slightly resuscitative, but the sign of reverse turnaround and upgrade is not soremarkable. Other new businesses are still in the infant stage.Countermeasures: the Company will study and determine the current political and economic situation in depth, highlyconcern the market change and carry out the benchmarking management like the high quality companies in the sameindustry, deepen the reform, tamp the basic management, enhance the risk resistivity, optimize and adjust the market andbusiness structure, seek for increment from the strategic opportunity, business expansion, internal and external cooperation,investment, acquisition and overseas projects, accelerate the structural readjustment and resources integration andaccelerate the sustainable development of the enterprise through the transformation and upgrade.Financial risk: it mainly includes exchange rate risk and credit risk.Countermeasures: Lock in the forward exchange rate through rational planning, control exchange rate risks, graduallyreduce the foreign exchange liabilities, pay attention to the research on policies and strategies of foreign exchange riskmanagement, closely concern the changes in exchange rates, regularly analyze the trend of exchange rate, strictly conductthe approval procedure related to the transaction of the nancial derivatives, do well in statistics of the products, currenciesand exchange rates, further tamp the basic work of the foreign exchange management and reduce the Company’s exchangerate risk. By arranging favorable settlement terms in the contract (If a contract linked to the RMB exchange rate is signed,settlement of exchange should be done as soon as possible as the proportion of advance payment increases.), or controland lock in the exchange rate risks with proper nancial instruments or means.As to credit risk, reduce raw material reserves, cut down the capital expenditure, adjust the Company’s debt structurein many ways (such as medium-term notes, short-term nancing bond, perpetual bond), strengthen the collection of theaccounts receivable, reduce the amount of bank debt step by step and reduce the business risks of the enterprise.5 Others

□Applicable √Not applicable

IV. Explanation for non-disclosure in accordance with the accounting standard due to being not applicable to theprovisions of the standard or state secret and business secrete and other special reasons

□Applicable √Not applicable

Section VImportant EventsI. Proposal for prot distribution of ordinary shares or convention of capital reserves into bonus sharess1 Formulation, implementation or adjustment of cash dividend distribution policies

√Applicable □Not applicable

According to the requirements of the Circular on Further Implementation of Relevant Matters Concerning CashDividend Distribution of Listed Companies (ZJF [2012] No. 37) issued by the CSRC, as proposed by the 10th meeting ofthe Company’s fth session of Board held on August 21, 2012, amendments were made to the Articles of Association of theCompany concerning prot distribution and cash dividends policy, and as a result, the dividend distribution standard andproportion became clearer, related decision making process and mechanism were compete, and the minority shareholders’legal rights and interests were fully protected, giving them the opportunity to fully express their views and demands.

2 The Company’s plan or proposal for prot distribution of ordinary shares, plan or proposal for the conventionof capital reserves into bonus shares in recent 3 years (including the reporting period)

Unit: Yuan Currency: RMBYear fordividenddistribution

Bonussharesfor every10 shares(share)

Dividend forevery 10 shares

(Yuan) (taxincluded)

Sharesconverted forevery 10 shares

(share)

Amount ofcash dividend(tax included)

Net prot attributable

to the ordinaryshareholders of thelisted company in theconsolidated statementin the year for dividend

distribution

Ratio of the net protattributable to theordinary shareholdersof the listed Companyin the consolidatedstatements (%)201900.50263,417,675514,930,14351.16201800.50263,417,675443,005,09259.46201700.52219,514,729300,195,42273.123 Shares repurchased by offer in cash and included in cash dividends

□Applicable √Not applicable

4 If the prot is positive in the reporting period and the prot of the parent company available for distributionto the ordinary shareholders is positive but the Company does not represent the plan or proposal for profitdistribution of ordinary shares in cash, the Company shall disclose in detail the reasons and the purpose and useplan of the undistributed prot

□Applicable √Not applicable

II. Fulllment of commitments1 Commitments of the actual controller, shareholders, related parties, acquirer, companies of the Company in thereporting period or ongoing at the period-end

□Applicable √Not applicable

2 If there is earnings forecast for the assets or projects of the Company and the reporting period is still in theearnings forecast period, the Company shall explain whether the asset or project reaches the original earningsforecast and give the reasons

□Reached □Failing to reach √Not applicable

3 Fulllment of commitments on the performance and its impacts on goodwill impairment test

□Applicable √Not applicable

III. Fund occupation and progress in returning scheme during the reporting period

□Applicable √Not applicable

IV. Explanation of the Company for Accounting Firm’s “auditors’ report with nonstandard opinions”

□Applicable √Not applicable

V. Analysis and explanation of the Company of the causes and the impacts of the major changes in accountingpolicies and accounting estimates or correction of signicant accounting errors1 Analysis and explanation of the Company on the causes and the impacts of the changes in accounting policies

and accounting estimates

√Applicable □Not applicable

See “V.41 Changes in signicant accounting policies and accounting estimates in Section XI” for details.2 Analysis and explanation of the cause of correction of signicant accounting errors and their impacts by the

Company

□Applicable √Not applicable

3 Communication with former CPA rm

□Applicable √Not applicable

4 Other description

□Applicable √Not applicable

VI. Engagement and dismissal of the public accounting rm

Unit: Yuan Currency: RMBNow engagingName of the domestic accounting rmErnst & Young LLP. (Special General Partnership)Remuneration of domestic accounting rm4,700,000Audit term of the domestic accounting rm4

NameRemunerationAccounting rm performing internal control auditErnst & Young LLP. (Special General Partnership)450,000Particulars about the engagement and dismissal of the accounting rm

□Applicable √Not applicable

Particulars about reappointment of the accounting rm in the auditing period

□Applicable √Not applicable

VII. Risk of suspension of the listing1 Cause for shares suspended from listing

□Applicable √Not applicable

2 Countermeasures to be taken by the Company

□Applicable √Not applicable

VIII. Termination of the listing and its reasons

□Applicable √Not applicable

IX. Events related to bankruptcy and reorganization

□Applicable √Not applicable

X. Major lawsuit and arbitration issues

√Existence of major lawsuit and arbitration in the year □No major lawsuit or arbitration in the year

1 Lawsuit and arbitration already disclosed in provisional announcement, without follow-up progress

□Applicable √Not applicable

2 Lawsuit and arbitration not disclosed in provisional announcement, or with follow-up progress

√Applicable □Not applicable

Unit: Yuan Currency: RMB

In the reporting period:

Plaintiff(applicant)

Defendant(respondent)

Partybearingjointliabilities

Type oflawsuit andarbitration

Background of the lawsuit (arbitration)

Amountinvolvedin lawsuit(arbitration)

Estimatedliabilities andamount caused

by lawsuit(arbitration) or not

Progressin lawsuit(arbitration)

Results of thelawsuit(arbitration)and impacts

Execution ofadjudicationof lawsuit(arbitration)ShanghaiZhenhuaHeavyIndustriesCo., Ltd,and ZPMCQidongMarineEngineeringCo., Ltd.

NantongHuafu PortCo., Ltd, LiAidong, andZhao Xiaohua

NoneLawsuit

At the end of February 2014, the Companycompleted the acquisition of the formerJiangsu Daoda Ocean Engineering Co.,Ltd through capital increase and held 67%of the shares. At the same time, it wasagreed that the losses of the company,was borne by the former shareholdersincluding Nantong Huafu Port Co., Ltd, LiAidong and Zhao Xiaohua before February28, 2014. During the subsequent businessprocess, it was found that the former DaodaCompany untruthfully disclosed somematters of lawsuit or debts, resulting in aseries of losses of the Company. Throughthe related audit and readjustment etc., itwas deemed that the loss of RMB 368.7222million Yuan should be in borne in theformer shareholders and the lawsuit wasprosecuted again after an inconclusivepress for payment.

368,722.000.000

The case is stillpending

Not yet judgedNot yet judged

3 Other description

□Applicable √Not applicable

XI. Punishment to the listed Company and its directors, supervisors, senior executives, controlling shareholder,actual controller and acquirer and the rectication

□Applicable √Not applicable

XII. Particulars about the credit conditions of the Company and its controlling shareholder and the actual controllerduring the reporting period

□Applicable √Not applicable

XIII. The Company’s equity incentive plan, employee stock ownership plan or other incentives to the employees andtheir impacts

1 Related incentives disclosed in provisional announcement, without progress or change in follow-upimplementation

□Applicable √Not applicable

2 Incentives not disclosed in provisional announcement or with follow-up progressEquity incentive

□Applicable √Not applicable

Other description

□Applicable √Not applicable

Information about employee stock ownership plan

□Applicable √Not applicable

Other incentive measures

□Applicable √Not applicable

XIV. Material related transactions

1 Related transactions relevant to routine business

1. Events disclosed in provisional announcement, without progress or changes in follow-up implementation

□Applicable √Not applicable

2. Events disclosed in the provisional announcement, with progress or changes in follow-up implementation

□Applicable √Not applicable

3. Events not disclosed in provisional announcements

√Applicable □Not applicable

Unit: Yuan Currency: RMBRelated partyRelationship

Type ofrelatedtransaction

Content of relatedtransaction

Pricingprincipleof relatedtransaction

Prince ofrelatedtransaction

Amount of relatedtransaction

Proportionin theamountof similartransactions(%)Settlementmode ofassociatedtransaction

Market price

Reasonfor greatdifferencesbetweenthe bargainprice andmarketpriceChina Road & BridgeCorporation

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

1,678,140,6411,678,140,6410.07

Monetaryfund

1,678,140,641/CCCC Financial Leasing Co.,Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

667,073,687667,073,6870.03

Monetaryfund

667,073,687/CCCC Second CCCC SecondHarbor Engineering Co., Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

337,523,772337,523,7720.01

Monetary

fund

337,523,772/Jiangsu Longyuan ZhenhuaMarine Engineering Co., Ltd

Joint venture

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

248,918,845248,918,8450.01

Monetaryfund

248,918,845/China CommunicationsConstruction Company Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

231,935,329231,935,3290.01

Monetaryfund

231,935,329/CCCC Second HighwayEngineering Co., Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

230,557,910230,557,9100.01

Monetaryfund

230,557,910/CCCC First HighwayEngineering Co., Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

126,158,585126,158,5850.01

Monetaryfund

126,158,585/CCCC Electrical andMechanical Engineering Co.,Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

124,928,355124,928,3550.01

Monetaryfund

124,928,355/CCCC Third HarborEngineering Co., Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

113,127,045113,127,0450

Monetaryfund

113,127,045/Road & Bridge InternationalCo., Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

95,683,93895,683,9380

Monetaryfund

95,683,938/China Harbor Engineering Co.,Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

roject income/lease

of assets

Pricing basedon market price

45,102,49745,102,4970

Monetary

fund

45,102,497/CCCC Third HighwayEngineering Co., Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

30,678,38530,678,3850

Monetary

fund

30,678,385/

Related partyRelationship

Type ofrelatedtransaction

Content of related

transaction

Pricingprincipleof relatedtransaction

Prince ofrelatedtransaction

Amount of related

transaction

Proportion

in theamountof similartransactions(%)

Settlementmode ofassociatedtransaction

Market price

Reasonfor greatdifferencesbetweenthe bargainprice andmarketpriceInstallation Engineering Co.,Ltd. of CCCC First HarborEngineering Co. Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

28,657,10128,657,1010

Monetaryfund

28,657,101/CCCC - SHEC Third HighwayEngineering Co., Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

26,395,51426,395,5140

Monetaryfund

26,395,514/CCCC Tianjin Dredging Co., Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

21,822,75921,822,7590

Monetaryfund

21,822,759/CCCC Marine Engineering &Technology Research CenterCo., Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

8,345,3398,345,3390

Monetaryfund

8,345,339/Hong Kong Marine ConstructionLimited

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

7,992,0477,992,0470

Monetaryfund

7,992,047/CCCC Fourth HighwayEngineering Co., Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

7,874,2507,874,2500

Monetaryfund

7,874,250/No.3 Engineering Co., Ltd.of CCCC Third HarborEngineering Co., Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

7,230,0667,230,0660

Monetaryfund

7,230,066/CCCC First HarborEngineering Co., Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

6,829,6336,829,6330

Monetaryfund

6,829,633/CCCC Tunnel Engineering Co.,Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

6,135,4116,135,4110

Monetaryfund

6,135,411/No.4 Engineering Co., Ltd.of CCCC Second HarborEngineering Co., Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

6,037,2906,037,2900

Monetaryfund

6,037,290/CCCC Tianjin Dredging Co., Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

4,716,9814,716,9810

Monetaryfund

4,716,981/China Communications 2ndNavigational Bureau 3rdEngineering Co., Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

3,750,0003,750,0000

Monetaryfund

3,750,000/Shanghai CommunicationsConstruction Contracting Co.,Ltd.

Holding subsidiary ofparent company

Selling goods/other inows

Project income/lease of assets

Pricing basedon market price

12,23612,2360

Monetaryfund

12,236/No.2 Engineering Co., Ltd.of CCCC Third HarborEngineering Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for theCompany

Pricing basedon market price

1,559,123,0961,559,123,0960.08

Monetaryfund

1,559,123,096/CCCC Fourth HighwayEngineering Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for theCompany

Pricing basedon market price

326,099,884326,099,8840.02

Monetaryfund

326,099,884/No.2 Engineering Co., Ltd.of CCCC Fourth HarborEngineering Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for the

Company

Pricing basedon market price

166,442,076166,442,0760.01

Monetary

fund

166,442,076/CCCC Third HarborEngineering Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for the

Company

Pricing basedon market price

138,044,572138,044,5720.01

Monetary

fund

138,044,572/Xing An Ji Engineering Co.,Ltd. of CCCC Third HarborEngineering Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for the

Company

Pricing basedon market price

126,919,874126,919,8740.01

Monetary

fund

126,919,874/CCCC Third HighwayEngineering Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for the

Company

Pricing basedon market price

102,954,724102,954,7240.01

Monetary

fund

102,954,724/CCCC Second HarborEngineering Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for the

Company

Pricing basedon market price

44,626,77844,626,7780

Monetary

fund

44,626,778/CCCC Water TransportationPlanning and Design InstituteCo., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for the

Company

Pricing basedon market price

44,003,68844,003,6880

Monetary

fund

44,003,688/China Communications 2ndNavigational Bureau 3rdEngineering Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for the

Company

Pricing basedon market price

37,974,35637,974,3560

Monetary

fund

37,974,356/CCCC - SHEC SecondHighway Engineering Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for the

Company

Pricing basedon market price

32,728,01832,728,0180

Monetary

fund

32,728,018/ZPMC Southeast Asia Pte. LtdAssociated company

Receipt ofservices

Consignedprocessing for the

Company

Pricing basedon market price

31,842,24231,842,2420

Monetary

fund

31,842,242/CCCC Tianjin Dredging Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for the

Company

Pricing basedon market price

30,385,22630,385,2260

Monetary

fund

30,385,226/

Related partyRelationship

Type ofrelatedtransaction

Content of relatedtransaction

Pricingprincipleof relatedtransaction

Prince ofrelatedtransaction

Amount of relatedtransaction

Proportionin theamountof similartransactions(%)Settlementmode ofassociatedtransaction

Market price

Reasonfor greatdifferences

betweenthe bargainprice andmarketpriceCCCC Shanghai Dredging Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for theCompany

Pricing basedon market price

27,320,34427,320,3440

Monetary

fund

27,320,344/China CommunicationsMaterials & Equipment Co., Ltd

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for the

Company

Pricing basedon market price

17,482,04517,482,0450

Monetary

fund

17,482,045/CCCC Second HighwayConsultants Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for theCompany

Pricing basedon market price

12,744,48012,744,4800

Monetaryfund

12,744,480/China Road & BridgeCorporation

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for theCompany

Pricing basedon market price

9,772,5469,772,5460

Monetaryfund

9,772,546/ZPMC Mediterranean LimanMakinalari Ticaret AnonimSirketi

Joint venture

Receipt ofservices

Consignedprocessing for theCompany

Pricing basedon market price

9,022,8149,022,8140

Monetaryfund

9,022,814/Installation Engineering Co.,Ltd. of CCCC First HarborEngineering Co. Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for theCompany

Pricing basedon market price

7,202,9997,202,9990

Monetaryfund

7,202,999/China CommunicationsConstruction Company Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for theCompany

Pricing basedon market price

6,970,3186,970,3180

Monetaryfund

6,970,318/CCCC Shanghai EquipmentEngineering Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for theCompany

Pricing basedon market price

4,533,9104,533,9100

Monetaryfund

4,533,910/Shanghai CommunicationsConstruction Contracting Co.,Ltd

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for theCompany

Pricing basedon market price

3,843,6773,843,6770

Monetaryfund

3,843,677/CCCC Highway BridgesNational Engineering ResearchCentre Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for theCompany

Pricing basedon market price

2,449,5412,449,5410

Monetaryfund

2,449,541/CCCC Marine Engineering &Technology Research CenterCo., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for the

Company

Pricing basedon market price

1,599,3771,599,3770

Monetary

fund

1,599,377/CCCC First HighwayConsultants Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for the

Company

Pricing basedon market price

1,153,0731,153,0730

Monetary

fund

1,153,073/Shanghai ChinaCommunications WaterTransportation Design &Research Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for the

Company

Pricing basedon market price

1,008,3941,008,3940

Monetary

fund

1,008,394/CCCC Third Harbor ConsultantsCo., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for theCompany

Pricing basedon market price

400,000400,0000

Monetaryfund

400,000/CCCC (Zhoushan) DredgingEngineering Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for theCompany

Pricing basedon market price

350,748350,7480

Monetaryfund

350,748/No.Three Engineering Co.,Ltd. of CCCC First HighwayEngineering Co., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for theCompany

Pricing basedon market price

343,394343,3940

Monetary

fund

343,394/CCCC First Harbor ConsultantsCo., Ltd.

Holding subsidiary ofparent company

Receipt ofservices

Consignedprocessing for the

Company

Pricing basedon market price

128,440128,4400

Monetary

fund

128,440/CCCC Fourth HarborEngineering Co., Ltd.

Holding subsidiary

Receipt ofservices

Consignedprocessing for the

Company

Pricing basedon market price

86,84986,8490

Monetary

fund

86,849/CCCC Shanghai EquipmentEngineering Co., Ltd.

Holding subsidiary ofparent company

Purchase of

goods

Providing materialsfor the Company

Pricing basedon market price

51,424,06351,424,0630.00

Monetary

fund

51,424,063/ZPMC Changzhou CoatingsCo., Ltd.

Associated company

Purchase of

goods

Providing materialsfor the Company

Pricing basedon market price

145,138,516145,138,5160.01

Monetary

fund

145,138,516/CCCC Tianjin Industry andTrade Co., Ltd.

Holding subsidiary ofparent company

Purchase ofgoods

Providing materialsfor the Company

Pricing basedon market price

1,669,8241,669,8240.00

Monetary

fund

1,669,824/Chuwa Bussan Co., Ltd.

Holding subsidiary ofparent company

Purchase of

goods

Providing materialsfor the Company

Pricing basedon market price

36,202,21136,202,2110

Monetary

fund

36,202,211/CCCC Tianjin HarborConsultants Co., Ltd.

Holding subsidiary ofparent company

Purchase of

goods

Providing materialsfor the Company

Pricing basedon market price

9,951,0619,951,0610

Monetary

fund

9,951,061/Shanghai Jiangtian IndustrialCo., Ltd.

Holding subsidiary ofparent company

Purchase of

goods

Providing materialsfor the Company

Pricing basedon market price

9,429,6679,429,6670

Monetary

fund

9,429,667/CCCC Tianjin Dredging Co.,Ltd.

Holding subsidiary ofparent company

Purchase of

goods

Providing materialsfor the Company

Pricing basedon market price

5,475,2645,475,2640

Monetary

fund

5,475,264/

Related partyRelationship

Type ofrelatedtransaction

Content of relatedtransaction

Pricingprincipleof relatedtransaction

Prince ofrelatedtransaction

Amount of related

transaction

Proportionin theamountof similartransactions(%)Settlementmode ofassociatedtransaction

Market price

Reasonfor greatdifferencesbetweenthe bargainprice andmarketpriceCCCC North Industrial Co., Ltd.

Holding subsidiary ofparent company

Purchase ofgoods

Providing materialsfor the Company

Pricing basedon market price

3,841,5233,841,5230

Monetaryfund

3,841,523/CCCC Marine Engineering &Technology Research CenterCo., Ltd.

Holding subsidiary ofparent company

Purchase ofgoods

Providing materialsfor the Company

Pricing basedon market price

2,451,6162,451,6160

Monetaryfund

2,451,616/CNPC & CCCC PetroleumSales Co., Ltd.

Holding subsidiary ofparent company

Purchase ofgoods

Providing materialsfor the Company

Pricing basedon market price

1,475,1211,475,1210

Monetary

fund

1,475,121/China CommunicationsMaterials & Equipment Co., Ltd.

Holding subsidiary ofparent company

Purchase ofgoods

Providing materialsfor the Company

Pricing basedon market price

380,531380,5310

Monetaryfund

380,531/CCCC Third Harbor ConsultantsCo., Ltd.

Holding subsidiary ofparent company

Purchase ofgoods

Providing materialsfor the Company

Pricing basedon market price

353,982353,9820

Monetaryfund

353,982/CCCC Shanghai ChannelEquipment Industry Co., Ltd.

Holding subsidiary ofparent company

Purchase ofgoods

Providing materialsfor the Company

Pricing basedon market price

320,806320,8060

Monetaryfund

320,806/China Road & BridgeCorporation

Holding subsidiary ofparent company

Purchase ofgoods

Providing materialsfor the Company

Pricing basedon market price

64,21464,2140

Monetaryfund

64,214/Total//7,081,363,4980.31///Details of large amount of sales returnsNoneExplanation for related transactions

The Proposal on Estimating Routine Related Transactions for Years 2019-2021 was approved upon deliberation at the rstprovisional general meeting in 2019 of the Company. In 2019, the amount of the annual related transactions in the normalbusiness between the Company and its subsidiaries and China Communications Construction Co., Ltd. and its subsidiariesdid not exceed RMB 8.3 billion. The Annual General Meeting had authorized the Company’s management to handle therelevant specic matters.2 Related transactions arising from acquisition or offering of assets or stock equity

1. Events disclosed in provisional announcement, without progress or changes in follow-up implementation

□Applicable √Not applicable

2. Events disclosed in the provisional announcement, with progress or changes in follow-up implementation

□Applicable √Not applicable

3. Events not disclosed in provisional announcements

□Applicable √Not applicable

4. Where agreed performance is involved, the performance achievement during the reporting period should be disclosed

□Applicable √Not applicable

3 Material related transactions with joint external investments

1. Events disclosed in provisional announcement, without progress or changes in follow-up implementation

□Applicable √Not applicable

2. Events disclosed in the provisional announcement, with progress or changes in follow-up implementation

□Applicable √Not applicable

3. Events not disclosed in provisional announcements

□Applicable √Not applicable

4 Current associated rights of credit and liabilities

1. Events disclosed in provisional announcement, without progress or changes in follow-up implementation

□Applicable √Not applicable

2. Events disclosed in the provisional announcement, with progress or changes in follow-up implementation

□Applicable √Not applicable

3. Events not disclosed in provisional announcements

□Applicable √Not applicable

5 Others

□Applicable √Not applicable

XV. Material contracts and their performance1 Trusteeship, contracting and leasing matters

1. Trusteeship

□Applicable √Not applicable

2. Contracting

□Applicable √Not applicable

3. Leasing

√Applicable □Not applicable

Unit: Yuan Currency: RMBName oflessor

Name of lessee

Leasedassets

Amountinvolved inleased assets

Startingdate ofleasing

Terminationdate ofleasing

Income fromleasing

Basis fordeterminingincome fromleasing

Impacts ofincome fromleasing on the

Company

Relatedtransactionor not

RelationshipTheCompany

ShanghaiZhenlong AssetManagement Co.,Ltd, and othercompanies

Lease ofhouses

251,529,199.83

2012/8/10August 10,

2012

2025/7/9July 9, 2025

44,347,607.62Agreed44,347,607.62NoOtherLeasing explanationNone2 Guarantee

√Applicable □Not applicable

Unit: Yuan Currency: RMBExternal guarantee of the Company (excluding guarantee to the subsidiaries)Guarantor

Relationbetween theguarantorand thelistedcompany

Guaranteedparty

Guaranteedamount

Date ofguarantee(signing date ofagreement)

Startingdate ofguarantee

Duedate ofguarantee

Type ofguarantee

Fulllmentof theguaranteeor not

Overdueor not

Amount ofoverdueguarantee

Counterguaranteeor notGuaranteeby therelatedparty ornotRelationshipTotal amount of guarantee incurred during the reporting period (excludingguarantee to the subsidiaries)Total balance of guarantee at the end of the reporting period (A) (excludingguarantee to the subsidiaries)

Guarantee of the Company and its subsidiaries to the subsidiariesTotal amount of guarantee to the subsidiaries incurred during the reportingperiod

-1,048,320,819Total balance of guarantee to the subsidiaries at the end of the reportingperiod (B)

2,051,665,981

Total amount of guarantee of the Company (including guarantee to the subsidiaries)Total amount of guarantee (A+B)2,051,665,981Proportion of total amount of guarantee in the net assets of the Company (%)11.05Including:

Amount of guarantee to the shareholders, the actual controller and relatedparties (C)Amount of debt guarantee directly or indirectly provided to the guaranteedparty with the asset-liability ratio over 70% (D)

1,252,227,900Amount of guarantee exceeding 50% of net assets (E)Total guarantee amount of the above three items (C+D+E)1,252,227,900Explanation for the joint and several repayment liabilities for the undueguaranteeDescription of guarantee

The Proposal for Providing Financing Guarantee to the Subsidiary Shanghai Zhenhua Port Machinery (Hong Kong) Co.,Ltd. Was approved upon deliberation by the Company at the 1st provisional general meeting for 2008 held in September22, 2008, which agreed to provide the nancial support to the subsidiary in Hong Kong and provided the guarantee withthe upper limit of RMB 500 million for the loan it applied for through the bank. Guarantees provided by the Company tosubsidiaries during the reporting period refer to the guarantees to subsidiaries in Hong Kong. Other guarantee matters wereapproved upon deliberation at the 30th meeting of the 5th Board of Directors.3 Consigned cash assets management

1.Consigned nancing

(1) General information of consigned nancing

□Applicable √Not applicable

Other information

□Applicable √Not applicable

(2) Information on individual consigned nancing

□Applicable √Not applicable

Other information

□Applicable √Not applicable

(3) Provision for impairment of consigned nancing

□Applicable √Not applicable

2. Consigned loans

(1) General information of consigned loans

□Applicable √Not applicable

Other information

□Applicable √Not applicable

(2) Individual consigned loans

□Applicable √Not applicable

Other information

□Applicable √Not applicable

(3) Provision for impairment of consigned loans

□Applicable √Not applicable

3. Other information

□Applicable √Not applicable

4 Other material contracts

□Applicable √Not applicable

XVI. Particulars about other important events

□Applicable √Not applicable

XVII. Particulars about actively performing social responsibilities1 Poverty alleviation of the listed company

√Applicable □Not applicable

1. Targeted poverty alleviation program

√Applicable □Not applicable

According to the requirements of the Decision of the Central Committee of the Communist Party of China and the StateCouncil on Winning the Battle Against Poverty, in order to implement the enterprise social responsibility, the Company, underthe general plan of CCCC, actively carried out the targeted poverty alleviation, and formulated the partner assistance plan inTue Town, Yunnan Province.

2. Summary of annual targeted poverty alleviation

√Applicable □Not applicable

Since 2019, taking the principle of “Poverty Alleviation after Education” as the main working concept, the Companycentralized the resource to build the library and reading rooms for Tue Town Center Primary School, provided educationand teaching materials, facilities, equipment, and prepared the “Student Grant Plan” for over ten students in Majimi Village,by which the local education resource lack was improved. In addition to education, the Company carried out the povertyalleviation through consumption and employment there, and participated in the free construction project of Nujiang DukouBridge, helping the local infrastructure construction.

The Company carried out a series of assistance work, receiving favorable reviews from Tue Town Government. TueTown Committee of the PCP and Tue Town People’s Government issued the Decision on Commending the Winner of 2019Tue Town Poverty Alleviation Award, and the Company won the title of “Poverty Alleviation Star Enterprise”.

3. Effectiveness of targeted poverty alleviation

□Applicable √Not applicable

4. Subsequent targeted poverty alleviation program

√Applicable □Not applicable

(1) Do a good job in poverty alleviation investigation to have the comprehensive understanding of the poverty alleviation

demand in Tue Town, and make the targeted poverty alleviation program.

(2) Carry out a series of educational poverty alleviation with own funds. As the relocation of Tue Dam, local

kindergartens and secondary schools badly need materials, facilities and equipment, the Company will try the best giveassistance, including providing internal classroom facilities and outdoor facilities to kindergartens, and drinking water device(water dispenser with purication and hot water) to local secondary schools.

(3) Introduce assistance funds to cultivate a batch of local grass-roots cadres and technical personnel in Yunnan.

(4) Focus on the poverty alleviation through consumption, make plans for buying agricultural products, sales assistance

of agricultural products and other work, and implement the same based on the actual situation.

2 Fulllment of social responsibility

√Applicable □Not applicable

The Company actively bears the social responsibility, enhances the responsibility management to create the benet forshareholders, upgrades the operation quality to create the high quality products for users, responds to the “Belt and Road”initiative and “Made in China 2025 Strategy” with the actual action, implements the development strategy with equipmentmanufacturing as the center and capital operation and Internet+ as two wings.

In addition to the traditional dominant plates such as port machinery, ocean engineering, system EPC and oceantransportation of heavy cargoes, the Company also developed the intelligent industry, livelihood consumption, integrateddevelopment and digital industry, to make contribution to the development of entity economy and the construction of the well-off society.

Adhering to the concept of "open development and all-win harmony", the Company speeded up the pace of "goingglobal", actively promoted the layout of overseas regional centers, and built Terminexus digital intelligent platform, to providefaster and more efcient services to global users.

Every year, the Company may hold the forum on intelligent solutions of wharf to discuss the development plan withthe global professionals. The Company made full use of the platform of China International Import Expo to achieve mutualbenet and common development with global enterprises.

The Company paid more attention to the green and sustainable development, actively invested in the research anddevelopment of green products, promoted the "change from oil into electricity" technology of dock equipment, and optimizedthe environmental protection properties of existing equipment; built intelligent terminals to achieve "zero emission" fromterminals and provided equipment support for the development of clean energy such as solar and wind power. The Companyfurther increased the investment in environmental protection, improved the existing production equipment and facilities,and innovate the green production process; strengthened the long-term mechanism for green environmental protectionmanagement, created the environmental protection culture with vitality, set up the special training for environmentalprotection, enhance the environmental protection awareness of the staff, and laid a green foundation for promoting the high-quality development of the Company.

The Company always adhered to the principle of "people-oriented", strengthen the humanistic care for employees,built a career development platform for employees; strengthened the communication with the community where theCompany is located through activities such as party building and association building; released the annual report and SocialResponsibility Report as required to show the development trend of the enterprise to related parties; carried out the targetedpoverty alleviation by building the library and reading rooms for Tue Town Primary School in Yunnan Province, helpingsolve problems such as the lack of local educational resources. At the same time, the Company actively promoted povertyalleviation in education and consumption.3 Environmental Information

1. Information about environmental protection of the Company and its subsidiaries as the key pollutant

discharge units published by environmental protection department

√Applicable □Not applicable

(1) Pollutant discharge

√Applicable □Not applicable

The pollutants discharged at the main production base of the Company in Changxing Island include: wastewater, wastegas, noise and solid waste, for which the pollutant discharging license has been obtained.

Wastewater: the majority of domestic wastewater and a little wastewater from production. There are 3 discharge outletsfor wastewater, which can be discharged after the disposal in Changxing Wastewater Disposal Plant.

Waste gas: mainly including coating waste gas, welding dust and boiler waste gas, which can be discharged after thestandard disposal in relevant waste gas disposal facilities. There are 89 discharge outlets for waste gas.

Solid waste: mainly including the common solid waste, such as scrap steel from the steel plate processing, canteenwaste oil and domestic refuse; hazardous waste such as waste mineral oil and waste emulsion from machining; paint waste,waste packaging from painting operations. Those pollutants have been disposed of by qualied units upon entrustment.

Noise: mainly from cutting, painting, machine tools and fans. There are 14 noise monitoring outlets.

Implementing standards: the Comprehensive Standards for Wastewater Discharge in Shanghai Municipality (DB31/199-2018) for wastewater discharge; the Standard for Air Pollutant Discharge in Shanghai Municipality (DB31/933-2015) forwaste gas discharge; the Standards for Factory Boundary Noise Discharge of Industrial Enterprises (GB12348-2008) forfactory boundary noise.

(2) Construction and operation of pollution control facilities

√Applicable □Not applicable

The Company takes the necessary protective measures for the collection and treatment of the main contaminants andhas installed the corresponding monitoring equipment.

Wastewater: install on-line monitoring equipment at the wastewater outlet to monitor factors such as pH, flow rate,COD and ammonia nitrogen, and entrust qualied entities for operation and maintenance; check existing pipelines, and adddomestic sewage treatment facilities and initial rainwater collection ponds, etc.Exhaust gas: conduct pre-treatment and adopt cloth bag/cartridge dust removal equipment in sand blasting workshop;adopt activated carbon adsorption - nitrogen gas desorption - condensation recovery process treatment equipment inpainting workshop, spray and build temporary shed outside, add mobile paint mixing room, adopt water-based paintreplacement process for pre-treatment production line, transform VOCs end treatment device; adopt alkali spray and waterspray treatment devices for acid mist and galvanizing exhaust gas in galvanizing workshop; install mobile smoke and dusttreatment device for welding in steel structure workshop, and add new multiple treatment device outdoor.Fully utilize thepurication effect of distributed collection and processing system, clamping type local high negative pressure dust removalsystem, blowing and suction type dust removal system, removable welding fume processor and grinding dust removalsystem. Regularly replace the adsorption and filtration materials of various treatment devices, perfect the equipmentoperation and maintenance ledger and strengthen daily management.Noise: adopt the measures for construction sound insulation; add sound insulation to reduce the environmental impactof staggered production.Solid waste: all solid and hazardous wastes are handled by qualied entities. It is required to newly build solid wastewarehouses, arranged for management by dedicated personnel, and perfect identication of hazardous waste signs andledger, etc.

(3) Environmental impact assessment(EIA) of construction project and other administrative licenses for environmental

protection

√Applicable □Not applicable

The related construction projects in Changxing Base, Nantong, Qidong and other places belonging to the Companyhave obtained EIA, and in 2019, Changxing Branch completed the EIA work for the reconstruction of 4# dangerous goodsterminal and the independent acceptance of the comprehensive workshop project. Nantong Branch and Qidong MarineEngineering Co., Ltd. completed the completion and acceptance of the project. Some of the pending acceptance andpending EIA projects are undergoing relevant procedures in accordance with the requirements of government departments.

(4) Emergency proposal for environmental accident

√Applicable □Not applicable

The Company's major production entities have signed and issued emergency plans for environmental emergencies, andhave completed ling with their local government regulatory authorities in accordance with environmental requirements.

(5) Self-monitoring scheme for environment

√Applicable □Not applicable

The Company has formulated an annual environmental self-monitoring program and is currently equipped with an onlinemonitoring system for wastewater, exhaust gas and plant boundary noise, and has commissioned a third party to carry outself-monitoring of wastewater, exhaust gas, noise, groundwater and soil according to the scheme requirements.

(6) Other environmental information to be disclosed

√Applicable □Not applicable

In August 2019, the Central Ecological and Environmental Protection Inspectorate Group announced the environmentalprotection problems of the Company's Changxing Base as a typical case, in response to the above situation, the Companyattaches great importance to the upper and lower, set up the rectification work leading group and working group in therst time, all staff seriously and deeply reect the problem, resolve to make a rectication, organize a comprehensive self-examination and self-correction work, formulate the comprehensive planning rectification program for the Company'sproblems, scientically formulate the rectication measures, dene the rectication plans and programs, to ensure that therectication responsibility of the people are in place, and the rectication work is comprehensive and thorough.

The Company will learn from the example, take environmental protection reform as an opportunity, deeply studyand implement Xi Jinping's idea of ecological civilization, rmly establish the concept of green development, enhance theenvironmental protection awareness of all staff, establish and perfect the long-term mechanism of environmental protectionwork, and continuously promote the company to the path of green and high-quality development.

2. Particulars about the environmental protection of the companies other than those dened as key pollutant-

discharge entities

√Applicable □Not applicable

The main pollutants of the Company other than the key emission entities such as Nantong Transmission, subordinateto the Company: wastewater, exhaust gas, solid waste, noise, etc. Discharge mode: the wastewater was discharged up tothe standard after treatment and some units have set up sewage treatment facilities; the atmospheric pollutants such as thewaste gas, fume and VOCs were discharged in the manner of organized discharge; it is required to progressively renovatespraying exhaust gas treatment facilities and workshop dust removal devices, etc., the solid wastes and the hazardouswastes were handed over to the qualied entities for treatment; plant boundary noise was discharged up to the standard.According to the prepared sudden environmental emergency plan, various entities improved the conguration of emergencyrescue equipment and facilities, carried out emergency rescue technical training and practical exercises on a regular basis,and effectively improved the emergency disposal capacity, in combination with the actual situation of various entities.

3. Description of the reasons for failing to disclose the environmental information by the companies other than

the key pollutant discharge entities

□ Applicable √Not applicable

4. Description of the follow-up progress and changes in the contents of environmental information disclosed

during the reporting period

□ Applicable √Not applicable

(IV) Other notes

□ Applicable √Not applicable

XVIII. Information about convertible corporate bonds

□ Applicable √Not applicable"

Section VIChanges in Ordinary shares and Shareholders' SituationI. Changes in ordinary shares capital1 Table of changes in ordinary shares

1. Table of changes in ordinary shares

The total number of shares of the Company's ordinary shares and the structure of its share capital remained unchangedduring the reporting period.

2. Notes to changes in ordinary shares

□ Applicable √Not applicable

3. Effect of changes in ordinary shares on nancial indicators such as earnings per share and net asset per

share for the latest year and period (if any)

□ Applicable √Not applicable

4. Other contents that the Company deems necessary to be disclosed or required to be disclosed by the

securities regulatory authority

□ Applicable √Not applicable

2 Changes in shares with restrictive conditions for sales

□ Applicable √Not applicable

II. Issuance and listing of securities1 Securities issuance by the reporting period

□ Applicable √Not applicable

Particulars about the issuance of securities during the reporting period (for bonds of different interest rates within theduration, please state them respectively)

□ Applicable √Not applicable

2 Changes in total ordinary shares of the Company and the shareholder structure, as well as the assets and liabilities

□ Applicable √Not applicable

3 Existing internal employee ownership

□ Applicable √Not applicable

III. Shareholders and actual controller

1 Total number of shareholders

Total of ordinary shareholders by the end of the reporting period233,460Total of ordinary shareholders by the end of the month previous to the disclosuredate of annual report

231,134

2 Table of the shares held by Top 10 shareholders, Top 10 holders of marketable shares (or shareholders without

trading limited conditions) by the end of reporting period

Unit: shareShares held by Top 10 shareholdersName of shareholder(in full)

Changes inthe reporting

period

Number ofshares held atthe end of theperiod

Ratio (%)

Number ofshares withtrading limitedconditions held

Pledge or freezingcondition

Nature ofshareholderSharestatus

Numberof sharesCCCG (HK) Holding Limited0916,755,84017.4010NA0

Overseaslegal personChina Communications ConstructionCompany Ltd.

0855,542,04416.2390NA0

State-ownedlegal personChina Communications Construction GroupCo., Ltd.

0663,223,37512.5890NA0

State-ownedlegal personCentral Huijin Asset Management Co., Ltd.089,378,6401.70UnknownUnknownChina Securities Finance Corporation Limited082,269,8681.56UnknownUnknownBosera Fund - Agricultural Bank of China -Bosera China Securities Financial AssetsManagement Plan

019,855,9200.38UnknownUnknownE FUND Management- Agricultural Bankof China - E FUND Management ChinaSecurities Financial Assets Management Plan

019,855,9200.38UnknownUnknownDacheng Fund- Agricultural Bank of China- Dacheng China Securities Financial AssetManagement Plan

019,855,9200.38UnknownUnknownHarvest Fund - Agricultural Bank of China -Harvest CSI Asset Management Plan

019,855,9200.38UnknownUnknownGF Fund- Agricultural Bank of China -GF China Securities Financial AssetsManagement Plan

019,855,9200.38UnknownUnknownLombarda China Fund- Agricultural Bankof China - Lombarda China Fund ChinaSecurities Financial Assets Management Plan

019,855,9200.38UnknownUnknownChina Asset Management- Agricultural Bankof China - China Asset Management ChinaSecurities Financial Assets Management Plan

019,855,9200.38UnknownUnknownYinhua Fund- Agricultural Bank of China- Yinhua China Securities Financial AssetManagement Plan

019,855,9200.38UnknownUnknownChina Southern Asset Management-Agricultural Bank of China - China SouthernAsset Management China Securities FinancialAsset Management Plan

019,855,9200.38UnknownUnknownICBC Credit Suisse Fund- Agricultural Bank ofChina - ICBC Credit Suisse China SecuritiesFinancial Asset Management Plan

019,855,9200.38UnknownUnknownShareholdings of top 10 shareholders without trading limited conditionsName of shareholder

Number of non-restrictive circulationshares held

Type and number of sharesCategoryQuantityCCCG (HK) Holding Limited916,755,840

Foreignshares listeddomestically

Shareholdings of top 10 shareholders without trading limited conditionsName of shareholder

Number of non-restrictive circulationshares held

Type and number of shares

CategoryQuantityChina Communications Construction Company Ltd.855,542,044

RMB ordinarysharesChina Communications Construction Group Co., Ltd.663,223,375

RMB ordinarysharesCentral Huijin Asset Management Co., Ltd.89,378,640

RMB ordinary

sharesChina Securities Finance Corporation Limited82,269,868

RMB ordinary

sharesBosera Fund - Agricultural Bank of China - Bosera China SecuritiesFinancial Assets Management Plan

19,855,920

RMB ordinary

sharesE FUND Management- Agricultural Bank of China - E FUND ManagementChina Securities Financial Assets Management Plan

19,855,920

RMB ordinary

sharesDacheng Fund- Agricultural Bank of China - Dacheng China SecuritiesFinancial Asset Management Plan

19,855,920

RMB ordinary

sharesHarvest Fund - Agricultural Bank of China - Harvest CSI AssetManagement Plan

19,855,920

RMB ordinary

sharesGF Fund- Agricultural Bank of China - GF China Securities FinancialAssets Management Plan

19,855,920

RMB ordinary

sharesLombarda China Fund- Agricultural Bank of China - Lombarda ChinaFund China Securities Financial Assets Management Plan

19,855,920

RMB ordinary

sharesChina Asset Management- Agricultural Bank of China - China AssetManagement China Securities Financial Assets Management Plan

19,855,920

RMB ordinary

sharesYinhua Fund- Agricultural Bank of China - Yinhua China SecuritiesFinancial Asset Management Plan

19,855,920

RMB ordinary

sharesChina Southern Asset Management- Agricultural Bank of China -China Southern Asset Management China Securities Financial AssetManagement Plan

19,855,920

RMB ordinary

sharesICBC Credit Suisse Fund- Agricultural Bank of China - ICBC Credit SuisseChina Securities Financial Assets Management Plan

19,855,920

RMB ordinary

sharesNotes to the related relation or consistent actions of the above-mentionedshareholders

Among the above top 10 shareholders, CCCG (HK)Holding Limited, China Communications ConstructionGroup Co., Ltd. and China CommunicationsConstruction Company Ltd. are related companies.It was unknown to the Company whether there wasrelated relation or concerted actor specied in theManagement Method on Information Disclosure forShareholding Change of the Shareholders of ListedCompanies.Explanation on preferred stock holders with recovered voting rights andnumber of stocks held by them

Shareholding quantity of top ten shareholders with sales restriction and the sales restriction

□ Applicable √Not applicable

3 Strategic investors or legal persons becoming the top 10 shareholders due to placement of new shares

□ Applicable √Not applicable

IV. Controlling shareholders and actual controllers1 Controlling shareholder

1. Legal person

√Applicable □Not applicable

NameChina Communications Construction Group Co., Ltd.Company principal or legal representativeLiu QitaoDate of EstablishmentDecember 8, 2005

Main business

Construction of overseas projects and international bidding projects at home; generalcontracting for construction of various special ships, leasing and maintenance of specialship and construction machines; offshore towage and professional services related to theocean engineering; technical consultant services regarding the ship and the supporting portequipment; engaging in the general contracting of construction projects for ports, channels,highways and bridges both home and abroad (including technical and economic consultationof engineering, feasibility study, survey, design, construction, supervision, procurementand supply for related complete set of equipment or materials, and equipment installation);undertaking the general contracting of the construction of industrial and civil works, railway,metallurgy, petrochemical, tunnel, power, mine, water conservancy, and municipal works;import and export business; real estate development and property management; investmentand management of transportation, hotel and tourism industries.

Equities of other domestic and overseaspublic companies during the reportingperiod

CCCG holds 57.96% of the stock equity of CCCC (601800.SH) and it is the controllingshareholder. CCCG holds 100% of the stock equity of CCCG Real Estate Group Co., Ltd.;CCCG Real Estate Group Co., Ltd holds 100% of the stock equity of Zhongzhu Real EstateDevelopment Co., Ltd. Zhongzhu Real Estate Development Co., Ltd holds 53.32% of thestock equity of CCCG Real Estate Co., Ltd (name used before: Chongqing Industries,Zhongfang Real Estate) (000726.SZ) and it is the controlling shareholder. CCCG and itscontrolling subsidiaries totally hold 28.91% of the stock equity of Greentown Holding Co., Ltd(03900.HK) and are the controlling shareholders. CCCG and its subsidiaries hold 29.99% ofthe stock equity of Shanghai Zhenhua Heavy Industries Co., Ltd (600320.SH) and are thecontrolling shareholder.Notes to other circumstances

2. Natural persons

□ Applicable √Not applicable

3. Particulars about no controlling shareholder in the Company

□ Applicable √Not applicable

4. Index and date of change in the controlling shareholder during the reporting period

□ Applicable √Not applicable

5. Chart for the property and controlling relationships between the company and the controlling shareholders

√Applicable □Not applicable

CCCCShareholding ratio100%Shareholding ratio 17.4012%Shareholding ratio 16.2393%

Shareholding ratio 57.96%

Shanghai Zhenhua Heavy Industries, Co., Ltd.

CCCGCCCG HKShareholding ratio 12.5888%

2 Actual controller

1. Legal person

□ Applicable √Not applicable

2. Natural person

□ Applicable √Not applicable

3. Particulars about no actual controller in the Company

□ Applicable √Not applicable

4. Index and date of change in the actual controller during the reporting period

□ Applicable √Not applicable

5. Block diagram of ownership and control relation between the Company and the actual controller

√Applicable □Not applicable

Shanghai Zhenhua Heavy Industries, Co., Ltd.

CCCGState-owned Assets

Shareholding ratio100%

Shareholding ratio100%

Shareholding ratio 17.4012%Shareholding ratio 16.2393%

Shareholding ratio 57.96%CCCC CCCG HK

Shareholding ratio 12.5888%

6. Control over the Company by the actual controller via trust or other ways of assets management

□ Applicable √Not applicable

3 Other information about Controlling shareholders and actual controllers

□ Applicable √Not applicable

V. Other legal person shareholder holding more than 10%

□ Applicable √Not applicable

VI. Particulars about restriction on reduction in shares held

□ Applicable √Not applicable

Section VIIPreferred Shares

□Applicable √Not applicable

Section VIIIDirectors, Supervisors, Senior Executives and EmployeesI. Shareholding variation and remuneration1 Changes in shares held by current and resigned directors, supervisors and senior executives during thereporting period and their remunerations

√Applicable □Not applicable

Unit: share

NamePost (Note)SexAge

Startingdate oftenure

Expirydate oftenure

Numberof shares

heldat thebeginningof year

Numberofsharesheld atthe endof theyear

Changein sharesin theyear

Reasonofchange

Totalremunerationbefore tax fromthe Company

during thereporting period(RMB’0,000)

Remunerationfrom therelatedparty of theCompany or

notZhu Lianyu

Chairman ofthe Board,Secretaryof PartyCommittee

Male50

June 26,

2018

June 25,2021

427,200427,2000 78.26NoHuangQingfeng

Director,President,vice secretaryof PartyCommittee

Male45

June 26,2018

June 25,2021

000 78.26NoZhangHongwen

DirectorMale60

June 26,2018

June 25,2021

000 0YesLiu Qizhong

Director, vicepresident

Male56

June 26,2018

June 25,2021

000 62.61NoDai Wenkai

Director, vicepresident

Male53

June 26,2018

June 25,2021

000 62.61NoZhuXiaohuai

Director, CFOMale51

June 26,2018

June 25,2021

000 62.61NoZhaoZhanbo

Independentdirector

Male44

June 26,2018

June 25,2021

000 12NoJi Linhong

Independentdirector

Male58

June 26,2018

June 25,2021

000 12NoBai Yunxia

Independent

director

Female47

June 26,2018

June 25,2021

000 12NoYang Jun

Independentdirector

Male63

June 26,2018

June 25,2021

000 12NoZhang Hua

Independentdirector

Male47

May28,2019

June25,2021

000 7NoShengLeiming

Independentdirector

Male50

May 28,2019

June 25,2021

000 7No

Wang Cheng

Supervisor,

vicesecretaryof PartyCommittee,Secretary ofCommitteefor DisciplineInspection,chairman of labor union

Male47

June 26,

2018

June 25,2021

000 62.61No

ZhangMinghai

SupervisorMale58

June 26,

2018

June 25,

2021

24,31124,3110 70.06No

NamePost (Note)SexAge

Startingdate oftenure

Expirydate oftenure

Numberof shares

heldat thebeginning

of year

Number

ofsharesheld atthe endof theyear

Changein shares

in theyear

Reason

ofchange

Totalremunerationbefore tax fromthe Company

during thereporting period(RMB’0,000)

Remunerationfrom therelatedparty of theCompany ornotXiangXudong

SupervisorMale44

June 26,2018

June 25,2021

000 60.51NoLiu JianboVice presidentMale57

August22, 2018

June 25,

2021

000 62.61NoZhou QiVice presidentMale48

August22, 2018

June 25,2021

000 62.61NoChen BinVice presidentMale46

August22, 2018

June 25,2021

107,328107,3280 57.58NoShanJianguo

Vice presidentMale56

August22, 2018

June 25,2021

000 62.61NoZhang JianVice presidentMale51

August22, 2018

June 25,2021

000 62.61NoFei GuoChief EngineerMale58

August22, 2018

June 25,2021

000 62.61NoLi Ruixiang

Chiefeconomist

Male45

August22, 2018

June 25,2021

000 62.61NoSun Li

Chief legalcounsel andsecretary of theboard

Male48

August22, 2018

June 25,2021

000 62.61NoYan Yunfu

Former director

or chiefengineer

Male61

June 26,2018

December11, 2019

000 62.61NoLing He

Originalindependentdirector

Male68

June 26,2018

March 8,2019

000 3NoTotal/////558,839558,8390/1,160.99/NameMain working experiencesZhu Lianyu

Born in 1970, male, Ph.D., professor-level senior engineer. He began his career in September 1992 and successively served as the engineer,equipment leader of overseas projects, vice chief of Marine Machine Department, manager of Enterprise Development Department ofCCCC First Harbor Engineering Co., Ltd; the general manager of CCCC International Shipping Co., Ltd and the vice general manager of theEquipment Manufacturing Marine Heavy Industry Department of China Communications Construction Co., Ltd. Now, he is the Chairman ofthe Board and Secretary of Party Committee of the Company.HuangQingfeng

Born in 1975, male, EMBA, senior engineer. He began his career in July 1996 and successively served as the chief of quality inspectiondepartment, vice director of quality inspection No.2 department, vice general manager of quality inspection companies, vice general managerof after-sales service department, general manager of quality inspection company; vice director of off-shore office, vice director or viceof quality safety ofce, director of product service center and assistant president of the Company; vice president of the Company sinceDecember 2014. Now, he is the director, president and Secretary of Party Committee of the Company.ZhangHongwen

Born in 1960, male, undergraduate, senior engineer; engaged in work in August 1983. He successively served as the vice general managerof Overseas Division and manager of Integrated Department of Zhonggung Group, vice general manager of Engineering ManagementDepartment and Operation & Management Department of China Communications Construction Co., Ltd, vice general manager and generalmanager of Capital Construction Department (Dredging Department) and the executive general manager and general manager of PortDredging Business Department of CCCC, as well as the director, executive general manager, temporary member of the Party committee andnon-executive director of CCCC Dredging (Group) Co., Ltd. Now, he is the general manager of CCCC Equipment Manufacturing & MarineHeavy Industry Department and the director of the Company.Liu Qizhong

Born in 1964, male, undergraduate, senior economist. He successively served as the manager of Operating Department and the vicepresident of the Company, and serves as the director of the Company since March 2004.Now, he is the director, vice president and Partycommittee standing member of and chief compliance ofcer of the Company.Dai Wenkai

Born in 1967, male, master of physics, EMBA, senior engineer. He began his career in March 1993 and successively served as the projectdirector, vice manager, vice chief economist and chief economist, director of operation management ofce and vice president of the Company.Now, his is the director, vice president and Party committee standing member of the Company.

NameMain working experiencesZhu Xiaohuai

Born in 1969, male, master of MBA, senior accountant. He began his career in July 1991 and successively served as the vice sectionmanager of Financial Division of CCCC Shanghai Dredging Co., Ltd, vice director of Budget and Finance Department, vice manager (incharge of the work) or manager of Finance Department, and member of commission for disciplinary inspection of CCCC Shanghai DredgingCo., Ltd, and the director, chief accountant and Party committee standing member of CCCC Shanghai Dredging Co. Ltd. Now, he served asthe director, CFO and Party committee standing member of the Company.

Zhao

Zhanbo

Born in 1976, Male, Ph. D. He had served as a teacher in School of Software, Peking University since 2005 and now he is a professor. He ismainly engaged in the research in Internet business model innovation and corporate development strategy. Now he acts as the independentdirector of the Company.Ji Linhong

Born in 1962, Male, Ph. D. He successively served as the assistant and the lecturer of Department of Precision Instrument of TsinghuaUniversity; assistant professor of Department of Precision Engineering of Faculty of Engineering of the University of Tokyo, the PostdoctoralResearcher in Ministry of Education, Culture, Sports, Science and Technology of Japan. He had acted as vice director of Department ofPrecision Instrument of Tsinghua University, vice director of Department of Mechanical Engineering of Tsinghua University, director of DesignEngineering Research Institute of Tsinghua University, director of Experiment & Teaching Center of Mechanical Engineering, and vice directorof State Key Lab of Tribology, Tsinghua University and so on. Now he serves as a professor and a doctoral tutor in Department of MechanicalEngineering, Tsinghua University. He is mainly engaged in digitalized design and system optimization of complicated mechanical system andthe intelligent and biological mechanical design. Now he acts as the independent director of the Company.Yang Jun

Born in 1957, male, master degree. He successively served as intermediate and senior court judge of Shanghai Court, president andmember of the judicial committee member, Property Trade Operation Director of Shanghai United Property Rights Exchange. Now he is theassistant president of Shanghai United Property Rights Exchange, general manager of Beijing HQ, director of Financial Property Rights TradeCenter, arbitrator of China International Economic and Trade Arbitration Commission, Shanghai International Economic and Trade ArbitrationCommission, arbitrator of Shanghai Arbitration Commission, Shanghai Financial Arbitration Court, expert of China domain name disputeresolution center, director of Intellectual Property Association of China Law Society, director of Company Law Research Society of ShanghaiLaw Society, director of Shanghai Patent/Trademark/Copyright Association, and the independent director of the Company. Now he acts as theindependent director of the Company.Bai Yunxia

Born in October 1973, female, Ph. D from Xiamen University, post-doctor in accounting of Guanggua School of Management, PekingUniversity, professor of accounting, doctoral tutor, engaged in work in 1995. She successively served as the assistant engineer of KaiyuanGroup under Xi’an Jiaotong University, lecturer of School of Economics and Management of Tongji University, research scholar of CKGSB.Now, she acts as the director of Department of Accounting, School of Economics and Management, Tongji University and the researchscholar of Investment Center of CKGSB. Now he acts as the independent director of the Company.Zhang Hua

Born in 1973, Male, Ph.D. Economics, associate professor of nance. He successively served as a researcher, lecturer, assistant professorand associate professor at China Europe International Business School. Now he acts as the independent director of the Company.

Sheng

Leiming

Born in 1970, male, doctor of laws, senior lawyer. He successively served as a lawyer assistant and lawyer in Shanghai Foreign TradeLaw Firm, a teacher of civil and commercial law in East China University of Political Science and Law, a senior partner and chief lawyer ofShanghai Zhongmao Law Firm, and co-chairman, senior partner and lawyer in the head ofce management committee of Guantao Law Firm.Now he acts as the independent director of the Company.Wang Cheng

Born in 1973, male, master of engineering, senior political worker. He successively served as the vice secretary or secretary of leaguecommittee, and vice secretary or secretary of Party Branch of No. 2 Engineering Co., Ltd of CCCC Third Harbor Engineering Co., Ltd; vicedirector and director of Organization Department of CCCC Third Harbor Engineering Co., Ltd; secretary of the Party Committee and vicegeneral manager of No. 2 Engineering Co., Ltd of CCCC Third Harbor Engineering Co., Ltd; chairman of board of supervisors, vice secretaryof the Party Committee, secretary of Committee for Discipline Inspection and chairman of labor union of CCCC Third Harbor EngineeringCo., Ltd. Now he serves as the vice secretary of the Party Committee, secretary of Commission for Disciplinary Inspection, chairman of laborunion and chairman of board of supervisors of the Company.

Zhang

Minghai

Born in 1962, male, undergraduate, professor-level senior engineer. He successively served as the engineer of Technology Division ofShanghai Port Machinery Plant; mechanical ofce designer, vice manager and vice chief engineer of Shanghai Zhenhua Heavy IndustriesCo., Ltd., general manager of Shore Bridge No.1 Company of Mechanical Ofce, and general manager of Land-based Heavy Industry Co.,Ltd. Now, he is the supervisor and chief of the Company, designer and vice general manager of ZPMC PortMachinery Group or vice dean of ZPMC Land-based Heavy Industry Research & Design Institute.

Xiang

Xudong

Born in 1976, male, undergraduate, senior engineer. He successively served as the vice director and vice manager of Quality Department,and general manager of ZPMC Inspection Co., Ltd. Currently, he is the staff representative supervisor of the board of supervisors, vicegeneral manager of ZPMC Port Machinery Group, and the secretary of the party committee and executive vice general manager ofChangxing Branch.Liu Jianbo

Born in 1963, male, undergraduate, senior engineer. He successively served as the engineer at technological office of Shanghai PortMachinery Plant; assistant director in engineering technology department of Shanghai Container Dock Co. Ltd., project director of shipoperation department and chief engineer of engineering department of Shanghai ZPMC, and vice general manager of and vice generalmanager of ZPMC Changxing Base. Currently, he is the vice president and Party committee standing member of the Company.Zhou Qi

Born in 1972, male, EMBA, professor-level senior engineer. He successively served as the technician, manager and vice general engineer,general manager and chief engineer of the Electric Appliance Ofce of the Company. Currently, he is the vice president and Party committeestanding member of the Company.

NameMain working experiencesChen Bin

Born in 1974, male, EMBA, senior engineer. He successively served as the project quality leader of Quality Control Division, vice manager oftire crane ofce of quality control division, manager of quality control division, vice general manager and general manager of quality inspectioncompany, vice director and vice chief engineer of quality safety ofce, manager of quality safety division, supervisor of the Company, and vicepresident of the Company, etc. Currently, he is the vice president and safety director of the Company.

Shan

Jianguo

Born in 1964, male, undergraduate, senior engineer. He successively served as the technician in Shanghai Port Machinery ManufacturingPlant, served as the engineer and chief engineer of ZPMC Machinery Ofce, general manager and vice chief engineer of No.4 design ofceof design company, vice director and director of ZPMC Machinery Ofce, manager of budget assessment department and the dean of ZPMCLand-based Heavy Industry Research & Design Institute. Currently, he is the vice president of the Company.Zhang Jian

Born in 1969, male, MBA, senior engineer. He successively served as the technician, production planner and assistant director of No. 2Panel beater of Shanghai Port Machinery Manufacturing Plant, director of gearbox branch of Shanghai Port Machinery Manufacturing Plant,vice director and member of the Party committee of Shanghai Port Machinery Manufacturing Plant, vice general manager of Shanghai PortMachinery Heavy Industry Co., Ltd, general manager and president assistant of ZPMC Operation Ofce. Currently, he is the vice president ofthe Company.Fei Guo

Born in 1962, male, EMBA, professor-level senior engineer. He successively served as the engineer of Shanghai Port Machinery Plant,electrical engineer of director of No. 5 electrical ofce, vice chief engineer, chief engineer, director of Development Ofce and executivedirector of ZPMC Electric Department. Currently, he is now the chief engineer of the Company.Li Ruixiang

Born in 1975, male, undergraduate, senior economist. He successively served as the director of technical process department and traineemanager of Manufacturing Department and manager of Quality Assurance Department of Zhangjiagang Base of Shanghai Port MachineryPlant; project leader, office manager, vice director of Quality Safety Office, vice general manager and general manager of mechanicalsupporting base, secretary of Party Branch , vice chief economist, general manager of budget assessment department, general manager andassistant president of material and equipment procurement department of ZPMC quality inspection companies. Currently, he is now the chiefeconomist of the Company.

Sun Li

Born in 1972, male, EMBA, senior engineer. He successively served as the project leader and vice manager of operation department, vicedirector of operation ofce and director of off-shore ofce, general manager assistant and president and director of the Company. He is nowthe chief legal counsel of and secretary of the board of the Company.Yan Yunfu

Born in 1959, male, EMBA, professor-level senior engineer. He successively served as the vice chief of technical department, manager ofmechanical design department, vice chief engineer, chief engineer and vice president of the Company, president of Land Heavy IndustryEquipment Design Institute, and director of the Company since 2004. He used to be the director, chief engineer and Party committee standingmember of the Company.

Ling He

Born in 1952, male, professor. He successively served as the senior editor (senior professional title) of Liberation Daily, director of ShanghaiJournalists Association, and director of Shanghai Institute of Essays. He successively served as the member, assistant chief editor, director ofEditing Department of the democratic and legal magazine agency, vice director and director of Comment Department of Liberation Daily, maineditor of Liberation Daily, and chief editor of Liberty Forum; and obtained the awards as one of the rst National 100 Journalists, China NewsFirst Prize for three times, and Shanghai News First Prize for 15 times. Now he used to be the independent director of the Company.

Notes to other circumstances

□ Applicable √Not applicable

2 Equity incentives awarded to the directors and senior executives during the reporting period

□ Applicable √Not applicable

II. Incumbency of current and resigned directors, supervisors and senior executives during the reporting period

1 Position at the shareholder entity

√Applicable □Not applicable

Name of in-

service staff

Name of shareholding entityPosition

Starting date of

tenure

Expiration date

of tenureZhang Hongwen

China Communications ConstructionCompany Ltd.

General manager of equipmentmanufacturing and marine heavyindustry division

January 4, 2018Statement of the position held in shareholding entity

2 Statement of the position held in other entities

√Applicable □Not applicable

Name of in-service staff

Name of other entities

Position held in other

entities

Startingdate oftenure

Expiration

date oftenureZhao ZhanboSchool of Software, Peking UniversityProfessorJi LinhongDepartment of Mechanical Engineering, Tsinghua University

Professor and doctoralsupervisorLinghe

Jiefang Daily, Shanghai Journalists Association, Shanghai EssaysSociety.

Senior editor (Seniorprofessional title), directorYang Jun

Shanghai United Assets and Equity Exchange, Financial AssetsExchange, Shanghai International Economic and Trade ArbitrationCommission, Shanghai Arbitration Commission, Shanghai Court ofFinancial Arbitration, Chinese Domain Name Dispute SettlementCenter, Intellectual Property Association of China Law Society,Company Law Association of Shanghai Law Society, ShanghaiPatent/Trademark/Copyright Association.

Assistant president,general manager, director,arbitrator, expert, directorBai Yunxia

School of Economics and Management of Tongji University,Investment Centre of Cheung Kong Graduate School of Business

Director of AccountingDepartment, researchscholarZhang HuaChina Europe International Business School

Researcher, lecturer,assistant professor andassociate professorShengLeiming

Shanghai Foreign Trade Law Firm, East China University of PoliticalScience and Law, Shanghai Zhongmao Law Firm, Guantao Law Firm.

Senior partners, lawyers,teachers, etc.Statement of the position held in other entities

III. Remuneration of directors, supervisors and senior executives

√Applicable □Not applicable

Decision-making process for the remuneration of directors,supervisors and senior executives

In accordance with the regulations of Articles of Association, theremuneration of directors and supervisors are subject to the generalmeeting of shareholders and the remuneration of the senior executivesare assessed and approved by the chairman and president.Basis for deciding the remuneration of remuneration of directors,supervisors and senior executives

The basic salary plus performance bonus are assessed in combinationwith the quantitative index of production and operation, etc..Actual payout of remuneration for directors, supervisors andsenior executives

All in-service and resigned director, supervisor and senior executivesare paid by the Company within the reporting period.Total remuneration actually obtained by all directors, supervisorsand senior executives at the end of reporting period

RMB 11,609,900.00

IV. Change in directors, supervisors and senior executives

√Applicable □Not applicable

NamePostChangeReason of changeYan YunfuDirector or Chief EngineerResignedIndividual reasonSheng LeimingIndependent directorElectedJob demand

Zhang HuaIndependent directorElectedJob demand

Ling Hendependent directorResignedIndividual reason

V. Punishments by securities regulatory authority in recent three years

□ Applicable √Not applicable

VI. Particulars about the employees in the parent company and the main subsidiaries1 Particulars about employeesNumber of in-service employees of the parent company3,172Number of in-service employees of the main subsidiaries5,529Total of in-service employees8,701Number of retired employees required to be paid by the parent company and its major subsidiaries

SpecialtiesCategoryNumber of staffProduction staff3,290Sales staff280Technical staff4,195Financial staff154Administrative staff782Total8,701

Education backgroundEducation levelNumber (person)Doctor23Master710Undergraduate4,133Junior College2,028Technical secondary school594High school and below1,213Total8,7012 Remuneration policies

√Applicable □Not applicable

In line with the Company’s development strategy, it continuously perfected the remuneration distribution incentivesystem, perfected the performance assessment system and established and improved the performance assessment systembased on the different properties and characteristics of each entity and division; promoted the salary incentive system closelyliking the performance distribution with the unit or division performance, value contribution, industrial characteristics, growthphase and similar factors, and comprehensively liking the staff performance with position duty and value contribution, andthus initially established the distribution mode integrating with the market.3 Training plan

√Applicable □Not applicable

In line with the Company’s development strategy, the Company gradually established a rigid staff training system withsystematic, directional and continuous features. The Company sets up all-staff annual educational and training plan andimplements it according to the plan to improve the business skill level and professional quality of staff at various levels.4 Labor outsourcing

√Applicable □Not applicable

Total of labor outsourcing hours7,550,208 hoursTotal of labor outsourcing remunerationRMB 319,180,200.00

VII. Others

□ Applicable √Not applicable

Section IXCorporate governanceI.Related information about corporate governance

√Applicable □Not applicable

During the reporting period, the Company strictly followed the regulations specified in the Company law, SecuritiesLaw, Stock Listing Rules, Articles of Association and the legal requirements of China Securities Regulatory Commissionto standardize the Company’s daily operation, further established and improved the internal control system, improvedthe internal control management and corporate governance structure, strengthened the insider information management,strengthened the information disclosure, continuously improved the company governance, made efforts to improve theconstruction of legal person governance structure, and gradually established a modern enterprise system, earnestlyprotected the legal rights and interests of the Company and all the shareholders, ensuring the sustainable and stabledevelopment.After self-inspection, the staffs who know the insider information didn’t trade the stocks of the company before majorprice information is disclosed. There is no difference between the company governance and the regulations of ChinaSecurities Regulatory Commission.Whether there is important difference between corporate governance and the requirements of relevant regulations ofChina Securities Regulatory Commission; if any, please give the reason.

□ Applicable √Not applicable

II. Brief introduction to the general meeting of shareholders

Session of meetingConvening date

Query index of the website specied for

publishing resolutions

Date of disclosure forpublishing resolutionsGeneral Meeting of Shareholdersin 2018

May 28,2019

www.sse.com.cnEnter the stock code to search

May 29, 2019The rst interim general meeting ofshareholders held in 2019

December 27, 2019

www.sse.com.cnEnter the stock code to search

December 28, 2019Particulars about the general meeting of shareholders

□ Applicable √Not applicable

III. Duty performance of directors1 Attendance of the directors at the board meetings and the general meeting of shareholders

Director

Name

Independent

director or

not

Attendance at Board Meetings

Attendance at thegeneral meeting of

shareholdersTimes ofmeetingsshould beattended in

this year

Times ofpersonalattendance

Times ofattendance bytelecommunication

Times ofattendancethrough a

proxy

Times ofabsenceTimes ofabsence

Personalabsence for two

consecutive

times

Times ofattendance in thegeneral meeting of

shareholdersZhu LianyuNo99800No2Huang QingfengNo99800No2Zhang HongwenNo99800No1

Liu QizhongNo99800No1Dai WenkaiNo99800No1Zhu XiaohuaiNo99800No2

Yan YunfuNo88700No0Zhao ZhanboYes99800No1

DirectorName

Independent

director ornot

Attendance at Board Meetings

Attendance at thegeneral meeting of

shareholdersTimes ofmeetingsshould beattended inthis year

Times ofpersonalattendance

Times ofattendance bytelecommunication

Times ofattendancethrough a

proxy

Times ofabsenceTimes ofabsence

Personalabsence for twoconsecutivetimes

Times ofattendance in thegeneral meeting of

shareholdersJi LinhongYes99800No1Bai YunxiaYes99800No2Yang JunYes99800No2Zhang HuaYes44400No1Sheng LeimingYes44400No1

Ling HeYes22200No0

Explanations for personal absence from the meeting for two consecutive times

□ Applicable √Not applicable

Times of the board meetings convened in current year9Including: times of on-site meetings1Times of meetings convened through telecommunication8Times of meetings convened on-site and through telecommunication02 Objections from independent directors against related issues of the Company

□ Applicable √Not applicable

3 Others

□ Applicable √Not applicable

IV. As for the important suggestions and advices raised by the special interest committees under the Board ofDirectors while performing their duties in the reporting period, where there is any objection, the details shall bedisclosed

□ Applicable √Not applicable

V. Description of the risks found by the board of supervisors

□ Applicable √Not applicable

VI. Particulars about the inability of the Company and its controlling shareholders to guarantee the independenceand keep independent operation capacity with regard to business, personnel, assets, institution, nance, etc.

□ Applicable √Not applicable

Where there is horizontal competition, the corresponding solutions, job schedule and follow-up wok plan of the Company

□ Applicable √Not applicable

VII. Establishment and implementation of the assessment mechanism and incentive mechanism for seniorexecutives during the reporting period

√Applicable □Not applicable

The Company appoints the directors, supervisors and senior executives in accordance with the provisions of Company

Law and the Articles of Association, has built up a preliminary cultivation, selection, supervision, assessment, rewardand punishment, constraint system for the Company’s senior executives suitable for the actual situation. The Companyformulated corresponding administrative methods for senior executives. According to the production and development needof the Company, the senior executives are appointed, resigned and assessed following the principles of “being from top tobottom integrating the virtue and talent”, and are subject to annual appraisal by the Company according to the due diligenceand job performance. The Company will gradually improve the existing performance evaluation system and salary system,promote medium and long term incentive system for all senior executives and the core technical personnel of the Company,to continue to stimulate the enthusiasm of the senior executives, to create new achievements, and to ensure the benetmaximization and standard operation of the Company.VIII. Disclosure of self-evaluation report on internal control or not

√Applicable □Not applicable

Ernst & Young LLP (special general partnership), engaged by the Company, had audited the effectiveness of the internalcontrol of the nancial statement as of December 31, 2019 and issued a standard internal control audit report with cleanopinion (see the attachment to the announcement for details).Description of the important deciencies in internal control during the reporting period

□ Applicable √Not applicable

IX. Particulars about the audit report on internal control

√Applicable □Not applicable

Ernst & Young LLP (special general partnership), engaged by the Company, had audited the effectiveness of the internalcontrol of the nancial statement as of December 31, 2019 and issued a standard internal control audit report with cleanopinion (see the attachment to the announcement for details).

Audit report on internal control disclosed or not: YesX. Others

□ Applicable √Not applicable

Section XRelated Information on Corporate Bonds

□Applicable √Not applicable

Section XIFinancial Report

I. Auditors' report

√Applicable □Not applicable

Auditors' Report

Ernst & Young (2020) SZ No.61249778_B01

Shanghai Zhenhua Heavy Industries Co., Ltd.All shareholders of Shanghai Zhenhua Heavy Industries Co., Ltd.:

I. OpinionWe have audited the nancial statements of Shanghai Zhenhua Heavy Industries Co., Ltd. (hereinafter referred to asthe "Company"), which comprise the consolidated balance sheet and the Company's balance sheet as at December 31,2019, the consolidated income statement and the Company's income statement, the consolidated statement of changes inshareholders’ equity and the Company's statement of changes in owners’ equity and the consolidated statement of cashows and the Company's statement of cash ows for the year then ended as well as the notes to the nancial statements.In our opinion, the nancial statements of the Company attached are prepared, in all material respects, in accordancewith the Accounting Standards for Business Enterprises, and fairly present the consolidated financial position and theCompany's financial position as at December 31, 2019 and the consolidated operating results and cash flows and theCompany's operating results and cash ows for the year then ended.II. Basis for Our Opinions

We conducted our audit in accordance with Chinese Certified Public Accountants Auditing Standards. Ourresponsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the FinancialStatements section of this auditors' report. According to the Code of Ethics for Certied Public Accountants of China, we areindependent of the Company, and we have fullled other responsibilities in the aspect of code of ethics. We believe that theaudit evidence we have obtained is sufcient and appropriate to provide a basis for our opinion.III. Key Audit MattersKey audit matters are those matters that, in our professional judgment, were of most signicance in our audit of thefinancial statements for the current period. The response to these matters is based on the overall audit of the financialstatements and the formation of audit opinions. We do not express our opinions on these matters separately. The followingdescription of how our audit addressed the key audit matter is also against this background.

We have fullled the responsibilities stated in “Responsibilities of Certied Public Accountant for Auditing of FinancialStatement” in this report, including the responsibilities related to these key auditing matters. Correspondingly, our auditingwork includes the implementation of the auditing procedure designed for dealing with the great misstatement risks of thefinancial statement to be evaluated. The results from the implementation of the auditing procedure by us, including theprocedure to be implemented for the following key auditing matters, offers a foundation for releasing the auditing opinions ofthe nancial statements.

Key Audit Matters:How our audit addressed the key audit matter:

1. Inventory depreciation reserves

Shanghai Zhenhua Heavy Industries Co., Ltd. and its subsidiaries(“Group”) are mainly engaged in manufacturing the port container crane;in addition, they are also engaged in the manufacture of bulk handlingmachine, offshore heavy-duty machine and large-sized steel structure. Itsinventories mainly include engineering raw materials, outsourcing partsand components, products in the process and inventory goods. Since theproduction cycle of the products of this group is relatively long, the netrealizable value of the related inventory may uctuate with the change inthe market demand, resulting in the inventory depreciation risks. The Groupsets aside the inventory depreciation reserves according to the balance ofthe inventory cost and the net realizable value. The net realizable value isdetermined as per the estimated selling price of the inventory minus thecost, the estimated selling expenses and the related taxes that may occurin the completion on the assumption that the management layer adopts acertain estimate and hypothesis in determining the net realizable value. Incase of difference between the actual gure and the originally estimatedgure, the related balance will affect the book value of the inventory and thedepreciation loss in the estimated uctuation.As of December 31, 2019, in the consolidated nancial statements, thebalance of inventories was RMB 9.28 billion and the reserve for inventorydepreciation was RMB 720 million; in the nancial statements of theCompany, the balance of inventories was RMB 9.37 billion and the reservefor inventory depreciation was RMB 760 million.The accounting policy and other disclosures regarding the inventory arestated in Note III (11), Note III (30) and Note V (9) of the nancial statement.

Our procedure mainly included knowing and testing thevalidity of the control related to the provision of inventorydepreciation reserves and the method of calculating thenet realizable value of the Group. We also implementedthe related auditing procedures over the inventory such assupervision of inventory to verify whether the Group hadmarked the inventory with slow turnover and defectivesand taken into full account in provision of inventorydepreciation reserves. In addition, we obtained thecomputation sheet of provision of inventory depreciationreserves on December 31, 2019 from the Group,rechecked the calculation method. As to the key elementstaken into consideration by the Group in calculating thenet realizable value, including the estimated selling price,the cost that may occur till completion, the estimatedselling expenses and the related taxes, we evaluatedthe hypothesis and the estimates through analyzing therelated historical data and comparing the after-date data.We also tested the calculation of the provision amount ofthe inventory depreciation reserves.

2. Provision for bad debts of accounts receivable

The accounts receivable of the Group is mainly from the business contracton port machine and ocean engineering manufacturing. Since it involveslarge contracted value, long construction period, relatively complicatedtechnical parameters, the implementation of the contract may be affectedby the periodicity of the economic environment. The accounts receivableof the Group has certain risk in the recovery in case of any dispute incontract or we evaluated the accounting estimate relating to the stagnantindustry. As from January 1, 2019, the Group adopted the new nancialinstrument standards. The provisions for bad debts of accounts receivableare recognized on the basis of estimated credit losses, involving majorjudgment and estimates. The management of the Group analyzed thenancial position of counter parties, guarantee acquired for accountsreceivable, historical repayment records of accounts receivable, as wellas the credit rating and future economic situations of counter parties forevaluating the credit risk of accounts receivable.As of December 31, 2019, in the consolidated nancial statements, thebalance of accounts receivable was RMB 6.64 billion and the provisionfor bad debts of accounts receivable was RMB 1.68 billion; in the nancialstatements of the Company, the balance of accounts receivable was RMB

12.78 billion and the provision for bad debts of accounts receivable was

RMB 1.59 billion.The accounting policy and other disclosures regarding the provision for baddebts of accounts receivable are stated in Note III (8), Note III (30), Note V

(5) and Note XII (1) of the nancial statements.

We evaluated the accounting estimate relating to thedepreciation reserves, such as the nancial status andcredit rating of the counterpart; checked the account ageof accounts receivable and historical repayment recordand evaluated whether the nancial problems of thecounter party had effects on the recovery of the accountsreceivable; we checked the related supporting documentsfor the selected samples and the account age of theaccounts receivable; reviewed the after-date recoveryof the accounts receivable and rechecked the relatedevidences of the accounts receivable that could not berecovered and was written off (if any).

Key Audit MattersHow our audit report addressed this key audit matter:

3.Recognition of income from construction contract

Most of the income of the Group comes from the one of the constructioncontracts on the large-sized port equipment, heavy equipment, steelstructure and construction projects customized by the customer. The Groupadopts the percentage of completion method to calculate the income of theconstruction contracts. As to the large-sized port equipment, its completionschedule is determined according to the corresponding percentage ofcompletion of the conrmation node of the income achieved by theconstruction contract at the end of period. As to the heavy equipment andconstruction period, its completion schedule is determined according to thepercentage of the accumulative contract cost in the expected total contractcost. As to the fabrication of the steel structure, its completion schedule isdetermined according to the percentage of the accumulatively completedprocessing tonnage in the expected total processing tonnage. The above-mentioned methods involve the use of the major judgment and estimate ofthe management, including the achieved node, expected total contract cost,total contract income and expected contract loss. In addition, the income,cost and realizable gross prot of the contract may change with the actualconditions, resulting in important differences in the initial estimate of theGroup.The accounting policy and other disclosures regarding the recognition ofincome from construction contract are stated in Note III (12), Note III (30),Note V (10), Note V (46) and Note XII (4) of the nancial statements.

We evaluated and tested the internal control foraccounting the contract cost, contract income, achievednode and recognition and for calculating the ow ofcompletion schedule. We got the important contracts toverify the total contract income and review the importantcontract clauses. Through selecting the samples, weveried whether the contract cost that occurred conformedto the certication. We implemented the cutoff checkprocedure to validate the cost was conrmed in the properaccounting period; as to the large-sized port equipment,through sampling, we got the certication for the achievednode and made the sampling for eld observation.We evaluated the judgment and estimate of the totalcontract cost and total processing amount made by themanagement. We made sampling to calculate and checkthe income determined by the occurred contract cost andthe expected total contract cost again. In addition, weimplemented the analysis- oriented recheck procedureagainst the gross prot of the key construction contract ofthe Group.IV. Other InformationThe management of Shanghai Zhenhua Heavy Industries Co., Ltd. shall be responsible for other information. The otherinformation comprises information of the annual report, but excludes the nancial statements and our auditors' report.

Our opinion on the nancial statements does not cover the other information, and we do not and will not express anyform of assurance conclusion thereon.In connection with our audit of the financial statements, our responsibility is to read the other information identifiedabove and, in doing so, consider whether the other information is materially inconsistent with the nancial statements or ourknowledge obtained in the audit, or otherwise appears to be materially misstated.If, based on the work we have performed on the other information that we obtained prior to the date of this auditors'report, we conclude that there is a material misstatement of this other information, we are required to report that fact. In thisregard, we have nothing to report.V. Responsibilities of the Management and Those Charged with Governance for the Financial StatementsThe Management is responsible for preparing the financial statements in accordance with the requirements ofAccounting Standards for Business Enterprises to achieve a fair presentation, and for designing, implementing andmaintaining internal control that is necessary to ensure that the nancial statements are free from material misstatements,whether due to frauds or errors.In preparing the financial statements, the Management is responsible for assessing the Company’s going-concernability, disclosing the matters related to going concern (if applicable) and using the going-concern assumption, unless theManagement either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company's nancial reporting process.

VI. Auditors' Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the nancial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonableassurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the audit standards

will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to inuence the economic decisions of userstaken on the basis of these nancial statements.During the process of an audit conducted in accordance with audit standards, we exercise professional judgment andmaintain professional scepticism throughout the audit. Meanwhile, we also implement the following work:

(1) Identify and assess the risks of material misstatement of the nancial statements, whether due to fraud or error,

design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufcient and appropriateto provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than forone resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override ofinternal control.

(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are

appropriate in the circumstances.

(3) Evaluate the appropriateness of accounting policies used by and the reasonableness of accounting estimates and

related disclosures made by the management.

(4) Conclude on the appropriateness of the Management's use of the going concern basis of accounting.

Based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that maycast signicant doubt on the ability of Shanghai Zhenhua Heavy Industries Co., Ltd. to continue as a going concern.If we conclude that a material uncertainty exists, we are required to, in our auditors' report, draw attention of the usersof statements to the related disclosures in the nancial statements; if such disclosures are inadequate, we should modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report.However, future events or conditions may cause Shanghai Zhenhua Heavy Industries Co., Ltd. to cease to continue asa going concern.

(5) Evaluate the overall presentation, structure and content (including the disclosures) of the nancial statements, and

evaluate whether the nancial statements represent the underlying transactions and events in a manner that achieves fairpresentation.

(6) Obtain sufcient appropriate audit evidence regarding the nancial information of the entities or business activities

within the Company to express an opinion on the nancial statements. We are responsible for the direction, supervision andperformance of the group audit, and bear full responsibility for our audit opinion.

We communicate with those charged with governance regarding the planned scope and timing of the audit, signicantaudit ndings and other matters, including any signicant deciencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence, and to communicate with them in regard to all relationships and other matters thatmay reasonably be thought to affect our independence, and related safeguards (if applicable).

From the matters communicated with those charged with governance, we determine those matters that were of mostsignicance in the audit of the nancial statements of the current period and are therefore the key audit matters. We describethese matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, inextremely rare circumstances, we determine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interest benets of such communication.

Ernst & Young LLP.(Special General Partnership)

Beijing, China

Certied Public Accountant of China: Liu Wei(Engagement Partner)Certied Public Accountant of China: Gu Cheng Li

March 31, 2020

Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.

Consolidated Balance Sheet as As at December 31, 2019

Unity: Yuan Currency: RMBAssetsNote VAs at December 31, 2019As at December 31, 2018Current assetsMonetary funds13,310,297,4513,697,338,708Financial assets held for trading21,739,792,062-Financial assets measured at fair valuethrough the current prot or loss

3-52,920,084Notes receivable45,650,000189,371,105Accounts receivable54,966,175,5285,032,548,741Receivables nancing6406,408,604-Advances to suppliers7935,878,7771,681,187,715Other receivables81,176,561,5081,149,035,349Inventories98,561,251,5808,803,035,942Outstanding payments for constructioncompleted

1012,434,158,62412,054,580,392Non-current assets maturing within one year111,313,203,581894,638,424Other current assets12720,183,5741,152,476,439Total current assets 35,569,561,28934,707,132,899Non-current assetsAvailable-for-sale nancial assets13-1,214,533,554Long-term receivables145,227,728,4205,188,341,089Long-term equity investments152,873,673,7452,775,801,760Other equity instrument investment1661,981,268-Investment properties17418,425,533436,760,631Fixed assets1821,454,967,29918,654,732,030Construction in progress194,380,489,8883,050,468,292Intangible assets203,506,541,3663,588,412,732Goodwill21268,434,934266,591,462Long-term deferred expenses221,444,6365,112,664Deferred income tax assets23486,197,635539,684,925Other non-current assets24161,337,287170,792,589Total non-current assets38,841,222,01135,891,231,728Total assets74,410,783,30070,598,364,627

Liabilities and Shareholders' EquityNote VAs at December 31, 2019As at December 31, 2018Current liabilitiesShort-term borrowings2622,001,319,38016,554,687,487Financial liabilities held for trading277,312,741-Notes payable283,420,945,4512,732,404,222Accounts payable297,869,378,3657,036,869,701Advances from customers30822,987,986494,744,374

II. Financial Report

Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.

Consolidated Balance Sheet (Continued) as As at December 31, 2019

Unity: Yuan Currency: RMBLiabilities and Shareholders' EquityNote VAs at December 31, 2019As at December 31, 2018Amount settled for uncompleted work101,679,950,8791,989,560,887Employee compensation payable31329,978,281310,112,327Taxes and surcharges payable32144,506,742164,964,681Other payables33711,389,9961,098,580,447Non-current liabilities maturing within one year347,287,484,5134,209,532,510Total current liabilities44,275,254,33434,591,456,636Non-current liabilities

Long-term borrowings358,413,339,98615,097,725,259Long-term payables361,741,945,6361,967,461,119Estimated liabilities37484,000,772439,052,683Deferred income38458,722,579469,296,220Deferred income tax liabilities2389,856,727132,401,282Other non-current liabilities39376,626,821288,474,696Total non-current liabilities11,564,492,52118,394,411,259Total liabilities55,839,746,85552,985,867,895Shareholders' equityShare capital405,268,353,5015,268,353,501Capital reserves414,834,854,3324,648,919,658Other comprehensive income4223,530,451223,853,860Special reserves433,615,6383,019,173Surplus reserves441,761,198,7091,696,762,554Undistributed prots453,651,851,3833,344,953,206Total equity attributable to shareholders ofthe parent company

15,543,404,01415,185,861,952Minority equity3,027,632,4312,426,634,780Total shareholders' equity18,571,036,44517,612,496,732Total liabilities and shareholders' equity74,410,783,30070,598,364,627

The accompanying notes form an integral part of these nancial statements.Legal Representative:Accounting principal:Head of the Accounting

Department:

Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd. Unity: Yuan Currency: RMB

Consolidated Income Statement Year 2019

Note VYear 2019Year 2018Operating revenue4624,595,587,88321,812,389,644Less: operating costs4620,590,531,32218,082,285,752Taxes and surcharges47108,028,681116,279,994Selling and distribution expenses48122,517,036115,541,161General and administrative expenses491,095,131,2871,142,337,348Research and development expenditures50887,096,178672,614,073Financial expenses511,496,586,4141,522,264,813Including: interest expenses 1,702,292,3691,603,062,758

Interest income 331,452,183332,607,896Plus: other income5288,459,588112,065,705Investment income53174,600,552116,030,979Including: income from investment inassociates and joint ventures

110,724,31696,886,332Income from changes in fair value5488,019,84444,481,806Losses from credit impairment55(38,761,593)-Losses from asset impairment / reversal56(52,494,284)12,576,222Income from disposal of assets5749,091,913155,557,716Operating prots604,612,985601,778,931Plus: non-operating revenue5816,462,71012,102,280Less: non-operating expenses5930,203,49876,825,324Total prots 590,872,197537,055,887

Less: income tax expenses6193,750,584143,213,448

Net prot 497,121,613393,842,439Net prot from continued operation 497,121,613393,842,439Classied by ownershipNet prot attributable to shareholders of theparent company

514,930,143443,005,092Minority interest income(17,808,530)(49,162,653)Other comprehensive income of tax 22,021,165(30,764,830)Other comprehensive income, net of tax,attributable to owners of the parent company

4215,806,812(50,039,118)Other comprehensive income that can notbe reclassied into prot or loss

Changes in fair value of other equityinstrument investments

5,656,529-

Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd. Unity: Yuan Currency: RMB

Consolidated Income Statement (Continued) Year 2019

Note VYear 2019Year 2018Other comprehensive income that will bereclassied into prot or loss

Other comprehensive income that can betransferred to prot or loss under the equitymethod

15(2,004,706)(4,655,831)Changes in fair value of available-for-salenancial assets

13-(76,002,428)Differences arising from translation offoreign-currency nancial statements

12,154,98930,619,141Other comprehensive income, net of taxattributable to minority shareholders

426,214,35319,274,288Total comprehensive income 519,142,778363,077,609Including:

Total comprehensive income attributable toshareholders of the parent company

530,736,955392,965,974Total comprehensive income attributable tominority shareholders

(11,594,177)(29,888,365)Earnings per share62Basic earnings per share 0.10 0.08Diluted earnings per share 0.10 0.08Legal Representative:Accounting principal:Head of the Accounting

Department:

For the Year Ended December 31, 2019Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.

Consolidated Statement of Changes in Shareholders' Equity Year 2019

Unity: Yuan Currency: RMBEquity attributable to the shareholders of the parent companyShare capital

Capitalreserves

Othercomprehensiveincome

Specialreserves

Surplusreserves

Undistributedprots

Sub-total Minority equity

Totalshareholders'equityI. Balance at the end of thecurrent year

5,268,353,5014,648,919,658223,853,8603,019,1731,696,762,5543,344,953,20615,185,861,9522,426,634,78017,612,496,732Plus:

Adjustments for changes inaccounting policies

--(216,130,221)--119,821,864(96,308,357)(9,011,824)(105,320,181)II. Balance at the beginning ofthe current year

5,268,353,5014,648,919,6587,723,6393,019,1731,696,762,5543,464,775,07015,089,553,5952,417,622,95617,507,176,551III. Increase/decrease in the current year(I) Total comprehensive income--15,806,812--514,930,143530,736,955(11,594,177)519,142,778(II) Capital contributed or reducedby shareholders

1. Investments received by

subsidiaries from minorityshareholders

-185,934,674----185,934,674622,315,326808,250,000(III) Prot distribution

1. Withdrawal of surplus reserves----64,436,155(64,436,155---

2. Prot distributed to

shareholders

-----(263,417,675(263,417,675)(973,150)(264,390,825)(IV) Special reserves

1. Amount withdrawn in the current

year

---71,228,319--71,228,3194,507,52375,735,842

2. Amount used in the current year ---(70,631,854)--(70,631,854)(4,246,047)(74,877,901)IV. Balance at the end of thecurrent year

5,268,353,5014,834,854,33223,530,4513,615,6381,761,198,7093,651,851,38315,543,404,0143,027,632,43118,571,036,445For the Year Ended December 31, 2018I. Balance at the beginning ofthe current year

4,390,294,5845,526,978,575273,892,9781,914,8321,618,543,9713,199,681,42615,011,306,3661,817,314,29516,828,620,661II. Increase/decrease in the current year(I) Total comprehensive income--(50,039,118)--443,005,092392,965,974(29,888,365)363,077,609(II) Capital contributed or reducedby shareholders

1.Investments received by

subsidiaries from minorityshareholders

-------640,453,310640,453,310(III) Prot distribution

1. Withdrawal of surplus reserves----78,218,583(78,218,583)---

2. Prot distributed to

shareholders

-----(219,514,729)(219,514,729)(1,481,438)(220,996,167)(IV) Internal carry-forward of equity

1. Conversion of capital reserves

into paid-in capital

878,058,917(878,058,917)-------(V) Special reserves

1. Amount withdrawn in the current

year

---40,081,847--40,081,8474,422,69044,504,537

2. Amount used in the current year---(38,977,506)--(38,977,506)(4,185,712)(43,163,218)III. Balance at the end of thecurrent year

5,268,353,5014,648,919,658223,853,8603,019,1731,696,762,5543,344,953,20615,185,861,9522,426,634,78017,612,496,732Legal Representative:Accounting principal:Head of the Accounting

Department:

Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.

Consolidated Statement of Cash Flows Year 2019

Unity: Yuan Currency: RMBNote VYear 2019Year 2018I. Cash ows from operating activities

Cash received from sale of goods and renderingof services

23,025,755,64120,116,019,149Refunds of taxes and surcharges received 1,271,698,523 327,889,433Cash received from other operating activities63 329,767,258 380,058,325Sub-total of cash inows from operating activities 24,627,221,42220,823,966,907Cash paid for goods purchased and servicesreceived

19,942,201,097 17,045,009,084Cash paid to and on behalf of employees 2,190,735,091 2,128,181,027Cash paid for taxes and surcharges 296,562,379 399,974,649Cash paid for other operating activities907,509,746696,858,168Sub-total of cash outows from operating activities 23,337,008,313 20,270,022,928Net cash ows from operating activities64(1) 1,290,213,109 553,943,979II. Cash ows from the investing activitiesCash received from disinvestment 50,000,000-Cash received from returns on investments 73,626,23665,672,231Net cash received from disposal of xed assets,intangible assets and other long-term assets

283,066,093367,198,136Cash received from other investing activities63267,388,460302,041,173Sub-total of cash inows from investing activities 674,080,789734,911,540Cash paid to acquire and construct xed assets,intangible assets and other long-term assets

1,735,742,239 3,105,409,114Cash paid for investments 485,500,000 408,962,976Sub-total of cash outows from investing activities 2,221,242,2393,514,372,090Net cash ows from the investing activities(1,547,161,450)(2,779,460,550)III. Cash ows from nancing activitiesCash from absorption of investments 808,250,000194,345,310Including: cash received by subsidiaries frominvestments by minority shareholders

808,250,000194,345,310Cash received from borrowings 31,773,610,20334,277,959,026Cash received from other nancing activities63819,334,9751,284,314,355

Note VYear 2019Year 2018Sub-total of cash inows from nancing activities 33,401,195,17835,756,618,691Cash paid for debt repayments 29,962,425,56033,134,286,292Cash paid for distribution of dividends and protsor payment of interest

2,053,070,2241,828,486,604Including: dividends and prots paid to minorityshareholders by subsidiaries

973,1501,481,438Cash paid for other nancing activities631,243,765,5741,202,299,585Sub-total of cash outows from nancing activities 33,259,261,35836,165,072,481Net cash ows from nancing activities 141,933,820(408,453,790)IV. Effect of uctuation in exchange rate on cashand cash equivalents

34,052,125109,110,732V. Net decrease in cash and cash equivalents (80,962,396)(2,524,859,629)

Plus: beginning balance of cash and cashequivalents

3,148,987,3725,673,847,001VI. Ending balance of cash and cash equivalents64(3)3,068,024,9763,148,987,372

Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.

Consolidated Statement of Cash Flows (Continued) Year 2019

Unity: Yuan Currency: RMB

Legal Representative:Accounting principal:Head of the Accounting

Department:

Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.

Balance Sheet As at December 31, 2019

Unity: Yuan Currency: RMBAssetsNote XIIAs at December 31, 2019As at December 31, 2018Current assetsMonetary funds 2,009,711,4622,459,295,919Financial assets held for trading 717,766,887-Financial assets measured at fair valuethrough the current prot or loss

-44,481,806Notes receivable 5,650,00075,801,953Accounts receivable111,188,977,4467,136,766,887Receivables nancing 372,373,708-Advances to suppliers 2,516,366,7302,268,577,972Other receivables27,850,320,71513,955,146,640Inventories 8,605,357,5577,658,200,294Outstanding payments for constructioncompleted

7,399,709,6897,476,738,206Non-current assets maturing within one year 16,068,80016,068,800Other current assets 242,069,645683,547,950Total current assets 40,924,372,63941,774,626,427Non-current assetsAvailable-for-sale nancial assets -145,157,462Long-term receivables 349,516,318368,585,118Long-term equity investments38,748,485,7298,636,018,724Other equity instrument investment 61,981,268-Investment properties 418,425,533436,760,631Fixed assets 4,484,852,6944,819,571,556Construction in progress 352,334,608308,737,034Intangible assets 1,537,053,3081,571,347,557Deferred income tax assets 461,638,248510,532,925Total non-current assets 16,414,287,70616,796,711,007Total assets 57,338,660,34558,571,337,434

Liabilities and owners' equityNote XIIAs at December 31, 2019As at December 31, 2018Current liabilities

Short-term borrowings16,511,846,09912,958,295,349Notes payable4,115,677,1232,533,542,476Accounts payable4,097,874,3906,326,807,559Advances from customers490,409,652370,660,873Amount settled for uncompleted work2,053,025,8762,390,332,471

Liabilities and owners' equityNote XIIAs at December 31, 2019As at December 31, 2018Employee compensation payable312,443,598294,662,685Taxes and surcharges payable24,536,75922,636,402Other payables1,223,412,2121,508,889,581Non-current liabilities maturing within one year5,454,698,3222,820,655,037Total current liabilities34,283,924,03129,226,482,433Non-current liabilities

Long-term borrowings6,446,433,31912,922,319,986Long-term payables-182,174,839Estimated liabilities470,724,247422,869,949Deferred income329,345,661336,941,770Other non-current liabilities21,272,9259,783,043Total non-current liabilities7,267,776,15213,874,089,587Total liabilities41,551,700,18343,100,572,020Shareholders' equityShare capital5,268,353,5015,268,353,501Capital reserves4,914,468,6834,914,468,683Other comprehensive income8,348,10771,258,509Surplus reserves1,760,690,4361,696,254,281Undistributed prots3,835,099,4353,520,430,440Total shareholders' equity15,786,960,16215,470,765,414Total liabilities and owners' equity57,338,660,34558,571,337,434

Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.

Balance Sheet (Continued) As at December 31, 2019

Unity: Yuan Currency: RMB

Legal Representative:Accounting principal:Head of the Accounting

Department:

Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.

Income Statement Year 2019

Unity: Yuan Currency: RMBNote XIIYear 2019Year 2018Operating revenue425,040,304,43019,386,688,004

Less: operating costs422,072,761,46616,282,345,726Taxes and surcharges 46,993,01749,472,269Selling and distribution expenses 95,598,29484,713,588General and administrative expenses 443,039,394523,147,247Research and development expenditures 733,613,874557,762,997Financial expenses 1,196,403,2871,259,434,698Including: interest expenses 1,287,736,0071,282,879,956

Interest income 25,417,76532,752,024Plus: other income 66,222,31171,471,982Investment income5107,761,737101,099,249Including: income from investment in associates andjoint ventures

106,972,779100,431,517Income from changes in fair value 151,121,78044,481,806Losses from credit impairment(16,036,863)-Losses from asset impairment / reversal(59,200,823)25,476,619Income from disposal of assets4,536,49769,575,485Operating prots706,299,737941,916,620Plus: non-operating revenue5,369,9914,014,476Less: non-operating expenses6,293,97772,568,075Total prots705,375,751873,363,021Less: income tax expenses61,014,19891,177,196Net prot644,361,553782,185,825Net prot from continued operation644,361,553782,185,825Other comprehensive income of tax 4,035,024 (69,006,208)Other comprehensive income that can not bereclassied into prot or lossChanges in fair value of other equity instrument 5,656,529-Other comprehensive income that will be reclassiedinto prot or loss

Other comprehensive income that can be transferredto prot or loss under the equity method

(2,004,706)(4,655,831)Changes in fair value of available-for-sale nancialassets

-(65,270,999)Differences arising from translation of foreign-currency nancial statements

383,201920,622Total comprehensive income 648,396,577713,179,617

Legal Representative:Accounting principal:Head of the Accounting

Department:

Share capital

Capitalreserves

Othercomprehensive

income

Specialreserves

Surplusreserves

Undistributed

prots

Totalshareholders'equityI. Balance at the end of the lastyear

5,268,353,5014,914,468,68371,258,509-1,696,254,2813,520,430,44015,470,765,414Plus: Adjustments for changes inaccounting policies

--(66,945,426)--(1,838,728)(68,784,154)II. Balance at the beginning of thecurrent year

5,268,353,5014,914,468,6834,313,083-1,696,254,2813,518,591,71215,401,981,260III. Increase/decrease in the current year(I) Total comprehensive income--4,035,024--644,361,553648,396,577(II) Prot distribution

1. Withdrawal of surplus reserves 64,436,155(64,436,155)-

2. Prot distributed to owners ---- (263,417,675)(263,417,675)(III) Special reserves

1. Amount withdrawn in the current

year

---43,399,676--43,399,676

2. Amount used in the current year---(43,399,676)--(43,399,676)IV. Balance at the end of thecurrent year

5,268,353,5014,914,468,6838,348,107-1,760,690,4363,835,099,43515,786,960,162For the Year Ended December 31, 2018I. Balance at the beginning of thecurrent year

4,390,294,5845,792,527,600140,264,717-1,618,035,6983,035,977,92714,977,100,526II. Increase/decrease in the current year(I) Total comprehensive income--(69,006,208)--782,185,825713,179,617(II) Prot distribution

1. Withdrawal of surplus reserves----78,218,583(78,218,583)-

2. Prot distributed to owners-----(219,514,729)(219,514,729)(III) Internal carry-forward ofshareholders’ equity

1. Conversion of capital reserves

into paid-in capital

878,058,917(878,058,917)-----(IV) Special reserves

1. Amount withdrawn in the

current year

---15,614,116--15,614,116

2. Amount used in the current year ---(15,614,116)--(15,614,116)III. Balance at the end of thecurrent year

5,268,353,5014,914,468,68371,258,509-1,696,254,2813,520,430,44015,470,765,414

For the Year Ended December 31, 2019Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.

Statement of Changes in Shareholders' Equity Year 2019

Unity: Yuan Currency: RMB

Legal Representative:Accounting principal:Head of the Accounting

Department:

Prepared by: Shanghai Zhenhua Heavy Industries Co., Ltd.

Statement of Cash Flows Year 2019

Unity: Yuan Currency: RMBNote XIIYear 2019Year 2018I. Cash ows from operating activitiesCash received from sale of goods and rendering of services 20,652,573,56619,289,270,419Refunds of taxes and surcharges received 1,240,029,186291,302,010Cash received from other operating activities 311,770,463377,616,135Sub-total of cash inows from operating activities 22,204,373,21519,958,188,564Cash paid for goods purchased and services received 17,781,170,677 17,744,386,344Cash paid to and on behalf of employees 1,045,121,920 1,035,785,352Cash paid for taxes and surcharges 74,252,976 100,888,209Cash paid for other operating activities 694,695,689 438,838,219Sub-total of cash outows from operating activities 19,595,241,262 19,319,898,124Net cash ows from operating activities6 2,609,131,953 638,290,440II. Cash ows from the investing activitiesCash received from disinvestment579,983998,000,000Cash received from returns on investments 10,538,95847,195,316Net cash received from disposal of xed assets, intangibleassets and other long-term assets

59,069,806179,932,134Cash received from other investing activities 9,674,11234,930,409Sub-total of cash inows from investing activities 79,862,8591,260,057,859Cash paid to acquire and construct xed assets, intangibleassets and other long-term assets

121,396,662135,206,982Cash paid for investments 453,354,150661,904,450Sub-total of cash outows from investing activities574,750,812797,111,432Cash ows from the investing activities Net amount(494,887,953)462,946,427III. Cash ows from nancing activitiesCash received from borrowings 23,196,312,11429,304,939,364Sub-total of cash inows from nancing activities 23,196,312,11429,304,939,364Cash paid for debt repayments 23,435,344,09229,914,416,598Cash paid for distribution of dividends and prots or paymentof interest

1,641,001,5711,501,107,415Cash paid for other nancing activities 407,455,030407,455,030Sub-total of cash outows from nancing activities25,483,800,69331,822,979,043Net cash ows from nancing activities (2,287,488,579)(2,518,039,679)IV. Effect of uctuation in exchange rate on cash and cashequivalents

12,864,24945,951,367V. Net decrease in cash and cash equivalents(160,380,330)(1,370,851,445)Plus: beginning balance of cash and cash equivalents1,930,451,1403,301,302,585VI. Ending balance of cash and cash equivalents61,770,070,8101,930,451,140Legal Representative:Accounting principal:Head of the Accounting

Department:

I. Company prole

Shanghai Zhenhua Heavy Industries Co., Ltd. (hereinafter referred to as “the Company”) is a joint-stock companylimited established on September 8, 1997 through restructuring Shanghai Zhenhua Port Machinery Company Limited(hereinafter referred to as “Zhenhua Company”). Both the place of registration place and the address of the headquarters arein Shanghai City, P. R. China.As approved by ZWFZ (1997) No.42 Document issued by the Securities Commission under the State Council, theCompany issued 100 million domestically-listed shares held by the foreign investors (B-share) from July 15, 1997 till July 17,1997. The B-shares were listed for trading at Shanghai Stock Exchange on Aug. 5, 1997.As approved by ZJFXZ (2000) No. 200 Document of China Securities Regulatory Commission, the Companyadditionally issued of 88 million common shares (RMB denominated) (A-share) held by the domestic investors in December2000. The A-shares were listed for trading at Shanghai Stock Exchange on Dec 21, 2000.

As approved by ZJFXZ (2004) No.165 Document of China Securities Regulatory Commission, the Company additionallyissued 114,280,000 A-shares held by the domestic investors on December 23, 2004. The additionally issued A-shares werelisted at Shanghai Stock Exchange respectively for trading on December 31, 2004 and January 31, 2005.

As approved by ZJFXZ (2007) No. 346 Document of China Securities Regulatory Commission, the Companyadditionally issued 125,515,000 A-shares held by the domestic investors on October 15, 2007. The additionally issuedA-shares were listed at Shanghai Stock Exchange for trading on October 23, 2007 and January 23, 2008 respectively.

As approved by ZJXKZ (2009) No.71 Document of China Securities Regulatory Commission, the Company privatelyplaced 169,794,680 A-shares on Sept. 22, 2008 to its controller China Communications Construction Co., Ltd. (hereinafterreferred to as “China Communications Corporation”). A-shares privately placed were the tradable shares with limited tradingconditions. From Mar. 20, 2012 on, the term of trading limitation expired for above-mentioned A-shares which were listed atShanghai Stock Exchange for trading.

By December 31, 2019, after all issuances of the shares and bonus shares distributed in the past year, the total sharesof the Company amounted to 5,268,353,501 shares, par value per share was RMB 1. The share capital totaled up to RMB5,268,353,501.

On December 18, 2005, China Road and Bridge Construction Group General Company and the Company’s formercontrolling shareholder China Harbor Construction (Group) General Company were merged into China CommunicationsConstruction (Group) Co. Ltd after restructuring (hereafter referred to as “CCCG”). In accordance with the Ofcial Reply toOverall Reorganization and Overseas-listed and Domestically-listed Share of China Communications Construction Co. Ltd.(GZGG [2006] No.1063 Document) by State-owned Assets Supervision and Administration Commission of the State Councilon Aug. 16, 2006, the reorganization proposal of China Communications Construction (Group) Co., Ltd approved in theOfcial Reply to the Issues Concerning Management of State-owned Stock Equity of China Communications ConstructionCo. Ltd. (GZCQ [2006] No.1072 Document) on Sept. 30, 2006 and the Ofcial Reply to Approval of China CommunicationsConstruction Co. Ltd.’s Announcement of Purchase Report of Road and Bridge Construction Co. Ltd. and ShanghaiZhenhua Port Machinery (Group) Co. Ltd. and Exemption of Their Obligations for Purchase by Offer (ZJGSZ [2006] No.227 Document), CCCG solely initiated the incorporation of China Communications Construction Co. Ltd. and investedthe stock equity of the Company held into the newly incorporated China Communications Co., Ltd. With the completion ofreorganization, China Communications Co., Ltd thus became the controlling shareholder of the Company.

In 2016, the Company was granted the Uniform Social Credit Code of 91310000607206953D.

On July 18, 2017, the board of directors of China Communications Construction Co., Ltd. discussed and approvedthe Proposal for Transfer of Some Shares of Shanghai Zhenhua Heavy Industries (Group) Co., Ltd by Agreement andAssociated Transaction and agreed to transfer totally 1,316,649,346 shares of this Company held by it to CCCG and CCCG(Hong Kong) Holdings Co., Ltd. (hereinafter referred to as “CCCG Hong Kong”), accounting for 29.990% of the total sharesof this Company, after that, China Communications Construction Co., Ltd. held 16.239% of the stock equity of this Company.The transfer and registration of shares was accomplished on December 27, 2017. On the date of the transfer of shares,CCCG directly held 552,686,146 A-shares of this Company (accounting for 12.589% of the total shares of this Company),indirectly held 763,963,200 B-shares of this Company through CCCG (Hong Kong) (accounting for 17.401% of the totalshares of the Company) and held 712,951,703 A-shares of this Company through China Communications Construction Co.,Ltd. (accounting for 16.239% of the total shares of this Company), as a result, it became the controlling shareholder of theCompany.

The Company and its subsidiaries (hereinafter collectively referred to as “the Group”) was mainly engaged in design,construction, installation and contracting of large-sized port handling system and equipment, offshore heavy-duty equipment,engineering machinery, engineering vessel and large-sized metal structural members and their parts and components; repair

of vessel; leasing of self-produced crane, sales of the self-produced products; international shipment by available specialtransportation vessel and specialized contracting for steel structure engineering.The nancial statements have been approved by the resolution of the Board of Directors of the Company on March 31, 2020.The scope of the consolidated nancial statements is conrmed based on the control. Please refer to Notes VII.1 for theannual changes in the current year and the main subsidiaries included in the scope of consolidation.II. Basis of preparation for nancial statementsThe financial statements are prepared on the basis of the Accounting Standards for Business Enterprise– BasicStandards issued by the Ministry of Finance and the subsequently issued and revised specific accounting principles,guidelines, explanations and other related regulations (hereinafter collectively referred to as “Accounting Standards forBusiness Enterprise”).

The nancial statements of the Company have been be presented on a going concern basis.As of December 31, 2019, the current liabilities of the Group were about RMB 8.7 billion beyond the current assets.At the time of preparing the nancial statements for the current year, in view of the facts that the Group has obtained thebank credit line and the nancing record and it has established good cooperation relationship with all banks and nancialinstitutions with good operation status, the Board of Directors of the Company believes that, the Group may continueacquiring sufcient nancing sources and operating cash ows to guarantee the funds required for operation, repaymentof expired debts and capital expenditures. Therefore, the Board of Directors of the Company rmly believes to prepare theannual nancial statements for the current year on a basis of going-concern.While preparing the nancial statements, except for some nancial instruments, the valuation principle of historical costshall be adopted. If the assets are impaired, the provision for impairment is made in accordance with relevant provisions.III. Principal accounting policies and accounting estimates

The Company determines the specic accounting policies and accounting estimates based on actual production andoperation characteristics, which are mainly reected in the provision for bad debts receivable, inventory valuation methods,business accounting of construction contracts, depreciation of xed assets, amortization of intangible assets, measurementmodel of investment properties and income recognition and measurement and so on.1 Statement on compliance with the Accounting Standards for Business EnterprisesThe nancial statements meet the requirements of the Accounting Standards for Business Enterprises, and truly andcompletely reect the nancial position of the Company and the Group as at December 31, 2019, and the operating resultsand cash ows for the year then ended.2 Accounting periodThe Group adopts calendar year as the accounting year, which commences on January from the 1, and ends onDecember 31 of each year.3 Functional currencyRMB is the recording currency of the Group and also the currency used in the nancial statements. Unless otherwisespecied, the nancial statements are presented in RMB.The subsidiaries, joint ventures and associates under the Group shall, on the basis of the main economic environmentin which they operate, decide their own recording currency, and convert them into RMB when preparing nancial statements.

4 Business combinations

Business combinations are classied into business combination under common control and business combination notunder common control.

Business combination under common control

The business combination under common control is a business combination in which all of the combining enterprisesare ultimately controlled by the same party or the same parties both before and after the business combination and on whichthe control is not temporary. In a business combination under common control, the party which obtains control of othercombining enterprise on the combination date is the absorbing party, the other combining enterprise is the combined party.The combination date refers to the date on which the combining party actually obtains control on the combined party.

The assets and liabilities that the combining party obtains in a business combination under common control(including thegoodwill formed by the acquisition of the combined party by the ultimate controlling party), are subject to the correspondingaccounting treatment in accordance with the carrying amount in the nancial statements of the ultimate controlling partyon the combination date. The difference between the carrying amount of the net assets obtained from the combination andthe carrying amount of the consideration paid (or total par value of the shares issued) for the combination is treated as anadjustment to capital premium in the capital reserves and the capital reserves carried out under the former system. If thecapital premium is not sufcient to absorb the difference, the remaining balance is adjusted against retained earnings.Business combination not under common controlThe business combination not under common control is a business combination in which all of the combining enterprisesare not controlled by the same party or the same parties before and after the combination. As for the business combinationnot under the same control, the party which obtains the control of other combining enterprises on the acquisition date is theacquirer, and the other combining enterprises is the acquiree. The acquisition date refers to the date on which the acquireractually obtains control on the acquiree.The identifiable assets, liabilities and contingent liabilities obtained of the acquiree in the business combination notunder common control shall be measured at fair value on the acquisition date.The positive balance between the sum of the fair value of the combined consideration paid (or fair value of the issuedequity securities) and the fair value of the held stock equity of the acquiree before the acquisition date and the fair valueof the identiable net assets obtained in the combination from the acquiree is conrmed as goodwill, and shall be accountedfor subsequent measurement after subtracting the accumulated impairment losses from the cost. If the sum of the fair valueof the combined consideration paid (or fair value of the issued equity securities) and the fair value of the held stock equity ofthe acquiree before the acquisition date is smaller than the fair value of the identiable net assets of the acquiree obtainedin the combination, firstly recheck the measurement of the fair value of the identifiable assets, liabilities and contingentliabilities obtained from the acquiree, and the fair value of the combined consideration paid (or fair value of the issued equitysecurities), and the fair value of the held stock equity of the acquiree before the acquisition date, after that, if the sum thefair value of the combined consideration paid (or fair value of the issued equity securities) and the fair value of the held stockequity of the acquiree before the acquisition date is still smaller than the fair value of the identiable net assets obtained incombination from the acquiree, the balance shall be included in the current prot or loss.5 Consolidated nancial statements

The consolidation scope of consolidated nancial statements is determined on the basis of control, covering the nancialstatements of the Company and all the subsidiaries. A subsidiary is a subject which is controlled by the Company (includingthe enterprise, the separable part of the invested entity, and the structural entity controlled by the Company).

When preparing the consolidated nancial statements, the subsidiary adopts the accounting period and the accountingpolicies consistent with the Company. Assets, liabilities, equity, income, expenses and cash ows arising from all transactionsbetween the Group’s internal companies are fully offset at the time of combination.

If the current losses borne by the minority shareholders of the subsidiary exceed the shares held by the minorityshareholders in the initial shareholders’ equity of the subsidiary, the balance still offsets the minority’s equity.

For the subsidiaries acquired in business combination not under common control, the operating results and the cashows of the acquiree shall be included in the consolidated nancial statements on the date of acquisition of control till thetermination of control. When preparing the consolidated nancial statements, the nancial statements of subsidiaries shall beadjusted based on the fair value of various identiable assets, liabilities and contingent liability conrmed on the acquisitiondate.

For the subsidiaries acquired in business combination under common control, the operating results and the cash owsof the combined party shall be included in the consolidated nancial statements at the beginning of the combination period.When preparing the consolidated nancial statements, relevant items of the previous nancial statements shall be adjustedand the reporting entity formed after the consolidation is regarded as existed since the ultimate controlling party begins toimplement control.

If changes in the relevant facts and circumstances lead to changes in one or more control elements, the Group will re-evaluate whether or not the investee is controlled.6 Cash and cash equivalents

Cash is the Group’s cash on hand and the deposits that can be readily drawn on demand. Cash equivalents are short-

term, highly liquid investments held by the Group that are readily convertible to known account of cash and which are subjectto an insignicant risk of changes in value.7 Foreign currency transactions and transaction of nancial statements denominated in foreign currencyIn the case of a foreign currency transaction, the Group translates the amount of foreign currency into the amount of therecording currency.

At the time of initial conrmation, the amount of foreign currency transaction shall be translated into the amount of therecording currency at the spot rate of the transaction date. On the date of balance sheet, the currency exchange rate of thecurrency denominated items shall be translated at the spot rate on the date of balance sheet. The transaction difference ofsettlement and monetary items arising therefrom, in addition to the difference arising from foreign currency special borrowingrelating to the assets of which the purchase and construction conform to the capitalized conditions, which shall be handledin accordance with the principle of capitalization of borrowing costs, shall be included in the current prot or loss. The foreigncurrency non-currency items calculated on historical cost basis are still translated at spot rate on the date of transaction,not changing the amount of its recording currency. The foreign currency non-monetary items measured at fair value shallbe translated at the spot rate on fair value determination date, and the difference arising therefrom shall be included in thecurrent prot or loss or other comprehensive income according to the nature of the non-monetary items.In the case of overseas business, the Group translates its recording currency into RMB in preparing the financialstatements: for assets/liabilities in the balance sheet, spot exchange rate on the date of balance sheet is used for translation.As for the items under the shareholders’ equity, except for those under “undistributed prots”, other items are translated usingthe spot exchange rate at the time of occurrence; the income and expense items in the income statement shall be translatedat the spot exchange rate of the transaction. The conversion difference of foreign currency statements arising from abovetranslation shall be recognized as other comprehensive income. When disposing overseas operations, other comprehensiveincome related to the overseas operation shall be transferred into the current prots and losses, partial disposal shall becalculated according to the proportion of disposal.Foreign currency cash ows shall be translated at the spot exchange rate on the day of occurrence of the cash ow.Cash ow from overseas subsidiaries is translated at the spot exchange rate on the day of occurrence of the cash ow.Effect of changes in exchange rate on cash amount is shown separately in the cash ow statements as an adjustmentitem.8 Financial instruments (Applicable as of January 1, 2019)Financial instrument is the contract that forms the nancial assets of an enterprise and the nancial liabilities or equityinstruments of the other entities.Recognition and de-recognition of nancial instrumentsThe Group recognizes a nancial asset or nancial liability when becoming a party to a nancial instrument contract.Once the following conditions are satised, the Group will de-recognize nancial assets (or part of nancial assets or ofa portfolio of similar nancial assets), i.e. writing off from its account and balance sheet:

(1) The right to receive cash ows from nancial assets expires;

(2) The right to receive the cash ow from nancial asset has been transferred, or have assumed the obligation in the

“pass-through agreement” to pay the collected cash ow timely to the third party in full; and (a) has transferred substantiallyalmost all the risks and rewards of ownership of the nancial asset, or (b) although does not transfer or retain substantiallynearly all of the risks and rewards of ownership of the nancial asset, but has given up the control over the nancial asset.

In the event that the liability of a nancial liability has been fullled, cancelled or expired, the nancial liabilities shall bede-recognized. If the existing nancial liability is replaced by the same creditor with another nancial liabilities of virtuallyentirely different terms, or the terms of the existing liabilities are almost entirely modied substantially, such substitutionsor modications will be handled as the derecognition of the original liability and the recognition of new liabilities, and thedifference will be included in current prot or loss.

In case of trading nancial assets in the conventional way, such nancial assets will be recognized and de-recognizedon the trading day. Trading nancial assets in the conventional way refers to collecting or delivering nancial assets withinthe time limit prescribed in the law or the prevailing practice in accordance with the terms and conditions of the contract.Trading day is the date on which the Group commits to buy or sell nancial assets.

Classication and measurement of nancial assets

At the initial recognition, the Group's nancial assets, based on the Group's management model of nancial assets and

the contract cash ow characteristics of nancial assets, are classied as nancial assets measured at fair value through thecurrent prot or loss, nancial assets measured at amortized cost, and nancial assets measured at fair value through theother comprehensive income.

Financial assets are measured at fair value at initial recognition, while the accounts receivable or notes receivablearising from sales of goods or rendering of services, excluding the significant financing composition or the financialcomposition for over one year, are initially measured at the transaction price.For financial assets measured at fair value through the current profit or loss, relevant transaction costs are directlyincluded in the current prot or loss, while the transaction costs relevant to other nancial assets are included in the initialrecognition amount.The subsequent measurement of nancial assets depends on the classication thereof:

Investment in debt instruments measured at cost

Financial assets simultaneously meet the following conditions are classified as the financial assets measured atamortized cost: the management model of such nancial assets aims at the collection of contract cash ows; according tothe terms in the contract for such nancial assets, the cash ows generating on the special date are paid at the interest forthe principal and the unpaid principal. Such nancial assets are recognized as interest income by the effective rate method,and the gains or losses from the derecognition, modication or impairment thereof are in the current prot or loss.

Investment in equity instruments measured at fair value through the other comprehensive income

The Group irrevocably chooses to designate some non-trading equity instruments as the nancial assets measuredat fair value through the other comprehensive income, and only include the relevant dividends revenue (except for thatpartially recovered as the investment cost) in the current prot or loss, and the subsequent changes in fair values in the othercomprehensive income, without the provision for impairment. At derecognition of nancial assets, the accumulated gainsor losses previously included in other comprehensive income are transferred from the other comprehensive income to theretained earnings.

Financial assets measured at fair value through the current prot or loss

The nancial assets other than the nancial assets measured at amortized cost and the nancial assets measured atfair value through the other comprehensive income are classied as the nancial assets measured at fair value through theother comprehensive income. For such nancial assets, the subsequent measurement is made at fair value, and changes infair value are included in the current prot or loss.

Classication and measurement of nancial liabilities

At the initial recognition, the Group’s financial liabilities are classified as: financial liabilities measured at fair valuethrough the current prot or loss, and other nancial liabilities. For nancial liabilities measured at fair value through thecurrent prot or loss, relevant transaction costs are directly included in the current prot or loss, while the transaction costsrelevant to other nancial liabilities are included in the initial recognition amount.

The subsequent measurement of nancial liabilities depends on the classication thereof:

Financial liabilities measured at fair value through the current prot or loss

Financial liabilities measured at fair value through the current prot or loss include the trading nancial liabilities (includingthe derivative instruments belonging to nancial liabilities), and the nancial liabilities measured at fair value through thecurrent prot or loss. The subsequent measurement of the trading nancial liabilities (including the derivative instrumentsbelonging to nancial liabilities) is made at fair value, and changes in fair value are included in the current prot or loss. Forthe nancial liabilities measured at fair value through the current prot or loss, the subsequent measurement is made at fairvalue, and the changes in fair value are included in the current prot or loss except that the changes in fair value causedby the changes in the Group's credit risks are included in the other comprehensive income; if including the changes in fairvalue caused by the changes in the Group's credit risks in the other comprehensive income may cause or exacerbate theaccounting mismatch in prot or loss, the Group will include all changes in fair value (including the amounts affected by thechanges in the Group’s credit risks) in the current prot or loss.

Other nancial liabilities

The subsequent measurement of such nancial liabilities is made at amortized cost by the effective rate method.

Impairment of nancial instruments

Based on the expected credit losses, the Group makes the provision for impairment and recognizes the loss provisionsfor the nancial assets measured amortized cost and the investment in debt instruments measured at fair value through theother comprehensive income.

For the receivables excluding signicant nancing component, the Group measures the loss provision based on theamount equivalent to the expected credit loss over the whole duration by the simplied measurement method.

Except for the above financial assets subject to the simplified measurement method, on each balance sheet date,the Group makes assessment on whether the credit risk in financial assets has had significant increase after the initialrecognition. If the credit risk does not signicantly increase after the initial recognition, standing at the rst level, the Groupwill measure the loss provision based on the amount of expected credit loss within the future 12 months, and calculate theinterest income based on the book balance at the effective interest rate; if the credit risk has signicantly increased afterthe initial recognition without any credit impairment, standing at the second level, the Group will measure the loss provisionbased on the amount equivalent to the expected credit loss over the whole duration; in case of any credit impairment afterthe initial recognition, standing at the third level, the Group will measure the loss provision based on the amount of expectedcredit loss over the whole duration, and calculate the interest income based on the amortized cost at the effective interestrate. For nancial instruments only with relatively low credit risk on the balance sheet date, the Group assumes that suchcredit risk does not signicantly increase after the initial recognition.The Group evaluates the expected credit loss of nancial instruments individually and by portfolio. After taking the creditrisk characteristics of different customers into account, the Group evaluated the expected credit loss on accounts receivableby the aging portfolio.For the Group’s disclosure of the judgment standards for signicant increase of credit risk, denition of assets with creditimpairment and assumption of the measurement of expected credit loss, see Note VIII (3) for details.

When the Group ceases to expect reasonably the contract cash ows of nancial assets which can be recovered inwhole or in part, the Group will directly write off the book balance of such nancial assets.

Derivative nancial instruments

The Group carries out the exchange rate risk hedging by using derivative nancial instruments, such as the forwardexchange contract and the foreign exchange option contract. Derivative financial instruments are initially measured attheir fair values on date of signing relevant derivative transaction contracts and subsequently measured at their fairvalues. Derivative nancial instrument with positive fair value is recognized as an asset, and that with negative fair value isrecognized as a liability.

Gains or losses from changes in fair values of derivative instruments are directly included in the in current prot or loss,unless they are related to the hedging accounting.

Financial instrument offset

Financial assets and nancial liabilities are presented in the balance sheet at the net amount after mutual offset whenthe following conditions are met simultaneously: possess the legal right to offset the recognized amount and such right iscurrently executable; intend to settle at net amount, or cash such nancial assets or liquidate such nancial liabilities.

Financial guarantee contracts

A nancial guarantee contract refers to the contract where the issuer shall pay the specic amount to the contract holdersuffering losses when the specic debtor fails to repay debts according to the nancial guarantee clauses. The nancialguarantee contracts are measured at fair value at initial recognition. Financial guarantee contracts other than those thenancial liabilities measured at fair value through the current prot or loss are subsequently measured at the higher betweenthe amount of expected credit loss reserve determined on the balance sheet date and the balance of the initially recognizedamount deducting the accumulated amortization amount determined in the revenue recognition principle.

Transfer of nancial assets

If the Group has transferred nearly all the risks and rewards associated with the ownership of nancial assets to thetransferee, such nancial assets will be de-recognized; if the Group retains nearly all the risks and rewards associated withthe ownership of nancial assets, such nancial assets will continuously recognized.

If the Group neither transfers nor retains nearly all the risks and rewards associated with the ownership of the nancialassets, the following treatments will be adopted based on different circumstances: if the Group has given up its controlover the nancial assets, the nancial assets will be derecognized, and the assets and liabilities arising therefrom will berecognized; if the Group does not give up its control over the nancial assets, the nancial assets will be recognized to theextent of its continuing involvement in the transferred nancial assets, while relevant liabilities are recognized accordingly.9 Financial instruments (applicable to year 2018)

Financial instrument is the contract that forms the nancial assets of an enterprise and the nancial liabilities or equityinstruments of the other entities.

Recognition and de-recognition of nancial instruments

The Group recognizes a nancial asset or nancial liability when becoming a party to a nancial instrument contract.

Once the following conditions are satised, the Group will de-recognize nancial assets (or part of nancial assets or ofa portfolio of similar nancial assets), i.e. writing off from its account and balance sheet:

(1) The right to receive cash ows from nancial assets expires;

(2) The right to receive the cash ow from nancial asset has been transferred, or have assumed the obligation in the

“pass-through agreement” to pay the collected cash ow timely to the third party in full; and (a) has transferred substantiallyalmost all the risks and rewards of ownership of the nancial asset, or (b) although does not transfer or retain substantiallynearly all of the risks and rewards of ownership of the nancial asset, but has given up the control over the nancial asset.

In the event that the liability of a nancial liability has been fullled, cancelled or expired, the nancial liabilities shall bede-recognized. If the existing nancial liability is replaced by the same creditor with another nancial liabilities of virtuallyentirely different terms, or the terms of the existing liabilities are almost entirely modied substantially, such substitutionsor modications will be handled as the derecognition of the original liability and the recognition of new liabilities, and thedifference will be included in current prot or loss.

In case of trading nancial assets in the conventional way, such nancial assets will be recognized and de-recognizedon the trading day. Trading nancial assets in the conventional way refers to collecting or delivering nancial assets withinthe time limit prescribed in the law or the prevailing practice in accordance with the terms and conditions of the contract.Trading day is the date on which the Group commits to buy or sell nancial assets.

Classication and measurement of nancial assets

At the initial recognition, the Group’s nancial assets are classied as: nancial assets measured at fair value throughthe current prot or loss, loans and other receivables, and available-for-sale nancial assets. Financial assets are measuredat fair value at initial recognition. For financial assets measured at fair value through the current profit or loss, relevanttransaction costs are directly included in the current profit or loss, while the transaction costs relevant to other financialassets are included in the initial recognition amount.

The subsequent measurement of nancial assets depends on the classication thereof:

Financial assets measured at fair value through the current prot or loss

Financial assets measured at fair value through current prot or loss include the trading nancial assets and nancialassets designated to be measured at fair value through current prot or loss in initial recognition. Trading nancial assetsrefer to the nancial assets meeting one of the following conditions: they are acquired for the purpose of sales in the nearfuture; they belong to a part of the portfolio of identiable nancial instruments under centralized management, and there isan objective evidence that the enterprise has managed the portfolio in a short-term proting manner recently; they belongto derivative instruments, except for the derivative instruments which are designated and with effective hedging instrument,belong to the nancial guarantee contracts, and relate to the investments in equity instruments which have no quotationin the active market and of which fair values cannot be measured reliably and must be settled through the delivery of suchequity instruments. For such financial assets, the subsequent measurement is made at fair value, and all profit or lossrealized and not realized are included in the current prot or loss. Dividends or interest income from the nancial assetsmeasured at fair value through the current prot or loss is included in the current prot or loss.

At the initial recognition, nancial assets meeting one of the following conditions may be designated as the nancialliabilities measured at fair value through the current prot or loss:

(1) Such designation can eliminate or obviously reduce the inconsistencies in recognition and measurement of relevant

prot or loss that are caused due to different measurement bases of nancial assets;

(2) The formal written document of risk management or investment strategies has clearly stated that such nancial asset

portfolio is managed, evaluated and reported to key management personnel based on the fair values.

(3) The mixed instruments with one or more embedded derivative instrument(s) are covered, unless the embedded

derivative instrument has no signicant impact on the cash ows of the mixed instruments, or it is obvious that the embeddedderivative instrument should not be split out from relevant mixed instrument.

(4) The mixed instruments with embedded derivative instruments which need to be split out but cannot be separately

measured at acquisition or on the subsequent balance sheet date are covered.

Equity instrument investments which have no quoted prices in the active market and of which fair values cannot bemeasured reliably may not be designated as the nancial assets measured at fair value through the current prot or loss.

Financial assets classied as the nancial assets measured at fair value through the current prot or loss at the initialrecognition cannot be reclassied as other nancial assets, while other nancial assets also cannot be reclassied as thenancial assets measured at fair value through the current prot or loss.

According to the above conditions, such nancial assets of the Group mainly include the forward exchange contracts.

Loans and receivablesLoans and receivables refer to non-derivative nancial assets without quoted price in the active market and with xedor determinable recovery amount. Such nancial assets are subsequently measured at amortized cost by the effective ratemethod, and the gains or losses from the amortization or impairment thereof are included in the current prot or loss.Available-for-sale nancial assetsAvailable-for-sale nancial assets refer to non-derivative nancial assets designated to be available-for-sale at the initialrecognition, and the nancial assets other than the above-mentioned nancial assets. Such nancial assets are subsequentlymeasured at fair value. The discount or premium thereof is amortized by the effective rate method and recognized as theinterest income or expenses. Except that the impairment loss or the exchange difference of foreign-currency monetarynancial assets is included in the current prot or loss, the changes in fair values of available-for-sale nancial assets arerecognized as the other comprehensive income until the derecognition or impairment of such financial assets, and theaccumulated gains or losses are included in the current prot or loss. Dividends or interest income relevant to available-for-sale nancial assets is included in the current prot or loss.The equity instrument investment which has no quoted price in the active market and of which fair value cannot bemeasured reliably is measured at cost.

Classication and measurement of nancial liabilitiesAt the initial recognition, the Group’s nancial liabilities are classied as other nancial liabilities. The transaction costsrelevant to the other nancial liabilities are included in the initially recognized amount, and the other nancial liabilities aresubsequently measured at amortized cost by the effective rate method.Financial instrument offsetFinancial assets and nancial liabilities are presented in the balance sheet at the net amount after mutual offset whenthe following conditions are met simultaneously: possess the legal right to offset the recognized amount and such right iscurrently executable; intend to settle at net amount, or cash such nancial assets or liquidate such nancial liabilities.Financial guarantee contractsFinancial guarantee contracts refer to contracts where the guarantor and the debtor agree that the guarantor shallperform obligations or assume liability as agreed when the debtor fails to perform obligations. Financial guarantee contractsare measured at fair value at initial recognition. After the initial recognition, nancial guarantee contracts not belonging tothe nancial liabilities designated to be measured at fair value through the current prot or loss are subsequently measuredat the higher between the determined amount of the current best estimate required to be paid for performing relevantcurrent obligations on the balance sheet date and the balance of the initially recognized amount deducting the accumulatedamortization amount determined in the revenue recognition principle.Derivative nancial instrumentsThe Group carries out exchange rate risk hedging by using derivative financial instruments, such as the forwardexchange contract. Derivative financial instruments are initially measured at their fair values on date of signing relevantderivative transaction contracts and subsequently measured at their fair values. Derivative nancial instrument with positivefair value is recognized as an asset, and that with negative fair value is recognized as a liability. However, the derivativenancial instrument, linking up with the equity instrument which has not quoted price in the active market and of which fairvalue cannot be measured reliably, and subject to the settlement through the delivery of such equity instrument, is measuredat cost.Except that the effective hedging portion of cash flow hedging is included in the other comprehensive income andtransferred out and included in the current prot or loss when the hedging items affect the prot or loss, the gains or lossesfrom the changes in fair values of derivative instruments are directly included in the current prot or loss.

Impairment of nancial assetsThe Group checks the book values of nancial assets on the balance sheet date. If there is objective evidence that anynancial asset has been impaired, the provision for impairment will be made. Objective evidence indicating the impairment ofnancial assets refers to the matters that occurred after initial recognition of such nancial assets and have an impact, whichcan be measured reliably by the Group, on the estimated future cash ows of such nancial assets. Objective evidenceindicating the impairment of financial assets includes serious financial difficulty encountered by the issuer or debtor, theviolation of the debtor against contract terms (such as default or delay in payment of interest or repayment of principle),the situation that the debtor is likely to go into liquidation or be subject to other nancial restructuring, and the public daterevealing that the estimated future cash ows have decreased and can be measured.Financial assets measured at amortized costAt impairment, the book value of such nancial assets will be written down to the present value of estimated future cash

ows through the provision items (excluding the future credit loss which has not incurred), and the written-down amountis included in the current prot or loss. The present value of estimated future cash ows is determined via discount at theoriginal actual interest rate of such nancial assets (i.e. Actual interest rate determined at the initial recognition), with theconsideration of the value of relevant guaranty. After the impairment, the interest income is recognized at the discount ratewhich is used for the discount of future cash ows at the determination of impairment loss. For loans and receivables, if thereis no realistic expectation for future recovery and all guaranties have been realized or transferred to the Group, the loans andreceivables as well as relevant provision for impairment will be written off.The financial assets with individually significant amount are subject to the separate impairment test. If there is anyobjective evidence indicating that the financial assets have been impaired, the impairment loss will be recognized andincluded in the current prot or loss. The nancial assets with individually insignicant amount are included in the portfolioof financial assets with similar credit risk characteristics for impairment test or are subject to the separate impairmenttest. Financial assets without impairment upon the separate test (including individual nancial assets with signicant andinsignicant amount) shall be included in nancial assets portfolio which similar credit risk characteristics to conduct theimpairment test again. The individual nancial asset with impairment loss recognized upon the separate test does not beincluded in the portfolio of nancial assets with similar credit risk characteristics for impairment test.After the Group recognizes the impairment losses of financial assets measured at amortized cost, if there is anyobjective evidence showing that the value of such nancial assets has been recovered and it relates objectively to the eventoccurred after the recognition of the losses, the originally recognized impairment loss will be reversed and included in thecurrent prot or loss. However, the book value upon the reversal shall not exceed the amortized cost of such nancial assetson the reversal date under the assumption that no provision for impairment is made.Available-for-sale nancial assetsIf there is any objective evidence indicating that such financial assets have been impaired, the accumulated lossoriginally included in the other comprehensive income and arising from the decline of fair value will be transferred out andincluded in the current prot or loss. Such transferred-out accumulated loss refers to the balance of the initial acquisition costof the available-for-sale nancial assets deducting the recovered principal and amortized amount, the current fair value andthe impairment loss originally included in the prot or loss.

The objective evidence indicating that the investment in available-for-sale equity instruments have impaired includes theserious or non-temporary decline of fair value.The “serious” degree is determined based on how the fair value is lower than the cost, while the “non-temporary” degreeis determined based on how long the fair value is lower than the cost. In case of the objective evidence of impairment,the transferred-out accumulated loss refers to the balance of the acquisition cost deducting the current fair value and theimpairment loss originally included in the profit or loss. Impairment loss from the investment in available-for-sale equityinstruments does not be reversed through the profit or loss. The increase in fair value after the impairment is directlyrecognized in the other comprehensive income.In determining the “serious” or “non-temporary” degree, relevant judgment should be made. The Group makes thejudgment based on how or how long the fair value is lower than the cost, in combination with other factors.The investment in available-for-sale debt instruments is assessed by the identical method for the financial assetsmeasured at amortized cost. However, the transferred-out accumulated loss refers to the balance of amortized costdeducting the current fair value and the impairment loss originally included in the prot or loss. After the impairment, theinterest income is recognized at the discount rate which is used for the discount of future cash ows at the determination ofimpairment loss.For available-for-sale debt instruments whose impairment losses have been recognized, if their fair values rise in thesubsequent accounting period and such rise is objectively related to the matters occurring after the recognition of suchimpairment losses, the previously recognized impairment losses may be reversed and included in the current prot or loss.Financial assets measured at costWhere there is objective evidence showing that such nancial assets are impaired, the difference between its bookvalue and the present value determined through the discount of the current market yield for similar nancial assets to futurecash ow should be recognized as impairment loss, and included in the current prot or loss. Once the impairment loss isrecognized, it cannot be reversed.Transfer of nancial assetsIf the Group has transferred nearly all the risks and rewards associated with the ownership of nancial assets to thetransferee, such nancial assets will be de-recognized; if the Group retains nearly all the risks and rewards associated withthe ownership of nancial assets, such nancial assets will continuously recognized.

If the Group neither transfers nor retains nearly all the risks and rewards associated with the ownership of the nancialassets, the following treatments will be adopted based on different circumstances: if the Group has given up its controlover the nancial assets, the nancial assets will be derecognized, and the assets and liabilities arising therefrom will berecognized; if the Group does not give up its control over the nancial assets, the nancial assets will be recognized to theextent of its continuing involvement in the transferred nancial assets, while relevant liabilities are recognized accordingly.If the nancial assets are continuously involved in by through the nancial guarantee provided to the transferred nancialassets, the assets arising from the continuous involvement will be recognized at the book value of the nancial assets or thenancial guarantee amount, whichever is lower. The nancial guarantee amount refers the maximum amount required to berepaid among all considerations received.

10 Receivables (applicable to year 2018)

The Company's receivables include accounts receivable, other receivables and others. The accounts receivable arisingfrom the Group’s external sales of goods or rendering of services are initially recognized at the fair value of the contract oragreement price receivable from the purchaser.

(a) Accounts receivable

Accounts receivable with individually signicant amount and individual provision for bad debts

Accounts receivable with individually significant amount are subject to the separate impairment test. When there isobjective evidence showing that the Group will be incapable of recovering accounts receivable in accordance with theoriginal terms of receivables, the provision for bad debts will be made.

Judgment standard for individually signicant amount:Top ve receivables of non-related parties.Provision method for accounts receivable with individuallysignicant amount and individual provision for bad debts:

provision for bad debts is made at the difference between the presentvalue of estimated future cash ows of accounts receivable and the bookvalue of the same.Reason for individual provision for bad debts:

There is objective evidence showing that the Group will be incapable ofrecovering accounts receivable in accordance with the original terms ofreceivables.Method for the provision for bad debts:

The provision for bad debts will be made at the difference between thepresent value of estimated future cash ows of receivables and the bookvalue of the same.

Accounts receivable with provision for bad debts made by portfolio with credit risk characteristics

For receivables with individually insignicant amount, classied in several portfolios by the credit risk characteristicstogether with receivables not impaired after a separate test, the provision for bad debts to be made is recognized basedon the actual loss ratio of the portfolio of other receivables with credit risk characteristics identical or similar thereto in theprevious year, and in combination with the current situation.Basis for determining the credit risk portfolio:

Portfolio 1 Accounts receivable of related partiesPortfolio 2 Accounts receivable of non-related partiesMethod for the provision for bad debts made by the creditrisk portfolio:

Portfolio 1 Except that there is objective evidence showing that theGroup will be incapable of recovering accounts receivable in accordancevalue original terms of receivables, no provision for bad debts of accountsreceivable of related parties will be made.Portfolio 2 Aging analysis method

In portfolio 2, the proportions of provision under the aging analysis method are stated as follows:

AgingProportion of provisionWithin 6 months-7 months - 12 months1%1 - 2years15%2 - 3 years30%

AgingProportion of provision3 - 4 years50%4 - 5 years75%Over 5 years100%(b) Other receivablesOther receivables with individually signicant amount and individual provision for bad debtsOther receivables with individually significant amount are subject to the separate impairment test. When there isobjective evidence showing that the Group will be incapable of recovering other receivables in accordance with the originalterms of receivables, the provision for bad debts will be made.

Judgment standard for individually signicant amount:Top ve receivables of non-related parties.The provision for bad debts of other receivables with individuallysignicant amount and individual provision for bad debts is:

made at the difference between the present value of the estimatedfuture cash ows of other receivables and the book value of the same.

Other receivables with individually insignicant amount and individual provision for bad debtsReason for individual provision for bad debts:

There is objective evidence showing that the Group will be incapableof recovering other receivables in accordance with the original terms ofother receivables.Method for the provision for bad debts:

The provision for bad debts will be made at the difference between thepresent value of estimated future cash ows of other receivables andthe book value of the same.

Other receivables with provision for bad debts made by portfolio

For other receivables with individually insignificant amount, classified in several portfolios by the credit riskcharacteristics together with other receivables not impaired after a separate test, the provision for bad debts to be madeis recognized based on the actual loss ratio of the portfolio of other receivables with credit risk characteristics identical orsimilar thereto in the previous year, and in combination with the current situation.Basis for determining the credit riskportfolio:

Portfolio 1 Margin (Excluding the quality margin)Portfolio 2 Employee personal loan or imprestPortfolio 3 Others receivables in other natures

Method for the provision for bad debtsmade by the credit risk portfolio:

Portfolio 1 Except that there is objective evidence showing that the Group will be incapableof recovering other receivables in accordance value original terms of other receivables, noprovision for bad debts of margin will be made.Portfolio 2 Except that there is objective evidence showing that the Group will be incapableof recovering other receivables in accordance value original terms of other receivables, noprovision for bad debts of employee personal loan or reserve funds will be made.Portfolio 3 Aging analysis method

In portfolio 3, the proportions of provision under the aging analysis method are stated as follows:

AgingProportion of provisionWithin 6 months-7 months - 12 months1%1 - 2 years15%2 - 3 years30%

AgingProportion of provision3 - 4 years50%4 - 5 years75%Over 5 years100%11 Inventories

Inventories include the raw materials, outsourcing components and parts, goods in process, and stock commodities.Inventories are initially measured at the cost. The inventory cost includes the procurement cost, processing cost andother cost. The actual cost of inventory in transit is determined by the weighted average method. Revolving materials includelow-cost consumables and packing materials, in which low-cost consumables are amortized by the multiple amortizationmethod, while packing materials are amortized by the one-off write-off method.Perpetual inventory system is adopted for inventories.On the balance sheet date, the inventory is measured at its cost or its net realizable value, whichever is lower; if thecost is higher than the net realizable value, the provision for inventory depreciation will be made and included in the currentprot or loss. If the previous factor for the provision for inventory depreciation has been eliminated, resulting that the netrealizable value of the inventory is higher than the cost of the same, the amount written down will be reversed in the amountof provision for inventory depreciation originally made, and the reversed amount will be included in the current prot or loss.The net realizable value, in the routine activities, refers to amount of the estimated selling price of inventory minusthe estimated cost to completion, estimated selling expense and relevant taxes and surcharges. At the time of making theprovision for inventory depreciation, the provision for depreciation of raw materials is made by category, and that of goods inprocess and stock commodities is made by each single inventory item.12 Construction contractFor large port equipment, heavy equipment and steel products as well as construction projects customized forcustomers, as the commencement dates and the completion dates are usually in different accounting years, the Groupaccounts for their revenue and costs by the construction contract.(a) If the outcome of a construction contract can be estimated reliably, the revenue and cost of such constructioncontract will be recognized on the balance sheet date based on the progress of completion by the percentage-of-completionmethod. The outcome of a construction contract can be estimated reliably means that the economic benefit relevant tothe contract is likely to ow in the Group, and the actually incurred contract cost can be clearly distinguished and reliablymeasured; for xed price contracts, the following conditions should be also met: The total contract revenue can be reliablymeasured, and the progress of completion and the cost to complete the contract can be reliably determined. Total contractrevenue includes the initial cost specied in the contract and the revenue from contract change, claim and award. The Groupdetermines the progress of contract completion by the following ways:

(i) For large port equipment, the progress of completion is determined at the percentage of completion corresponding tothe time-point for recognizing the revenue of the construction contract at the end of the period. The Group has determinedthe following three revenue recognition time-points:

Time-point 1: The manufacturing of main steel structure has been completed and set upright;

Time-point 2: The product manufacturing, installation and preliminary debugging have been completed, the factoryqualication certicates for products have been issued, the bill of loading has been obtained, and the product delivery hasbeen prepared;

Time-point 3: The products have been delivered to the purchaser upon the purchaser’s inspection, and the deliverycerticate issued by the purchaser has been obtained.

The Group analyzes construction contracts completed in the previous year by the category of product, and determinesthe percentage of completion to recognized at each revenue recognition time-point, based on the proportion of the cost atthe each revenue recognition time-point mentioned above in the total actual cost, and takes such percentage of completionas that to be recognized at each revenue recognition time-point in the current period.

(ii) For heavy equipment and construction projects, the completion of completion is determined based on the proportionof the contract cost accumulated incurred in the total estimated contract costs. The accumulated incurred contract cost doesnot include the relevant contract costs in the future activities.

(iii) For steel structure manufacturing, the progress of completion is determined based on the proportion of theaccumulatively completed processing tonnage in the total estimated processing tonnage.(b) If the outcome of an individual construction contract cannot be estimated reliably, the treatment will be takenseparately in following situations:

(i) If the contract cost is recoverable, it will be recognized based on the actual contract cost recoverable as the contractexpense in the period when such cost is incurred.

(ii) If the contract cost is not recoverable, it will be recognized as contract expense when it is incurred, without contractrevenue recognition.

(c) If the total estimated contract cost is more than the total estimated contract revenue, the estimated loss will beimmediately recognized as the current prot or loss.

(d) For the contract price by installment, the settled price is presented, and will be reversed based on relevantaccumulated incurred cost and the accumulated recognized gross prot after the settlement of construction contract. Onthe balance sheet date, the difference between the sum of the accumulated incurred cost and the accumulated recognizedgross prot and the settled price (the former is larger) is presented as the completed but not settled construction payment inthe current assets; in case the latter is larger, such difference will be presented as the settled but not completed constructionpayment in the current liabilities.

13 Long-term equity investments

Long-term equity investments include the equity investments in subsidiaries, joint ventures and associates.

Long-term equity investments are initially measured at the initial investment cost. The initial investment cost of a long-term equity investment acquired through the business combination under common control is recognized at book value ofowners' equity acquired from the combinee on the combination date in the consolidated nancial statements of the ultimatecontroller; the difference between the initial investment cost and the book value of the combination consideration is used toadjust the capital reserves (if the capital reserves are insufcient to offset, the retained earnings will be offset); for the othercomprehensive income before the combination date, at the disposal of such investment, the accounting treatment identicalto that for the direct treatment of relevant assets or liabilities by the investee is adopted; the shareholders’ equity recognizedon account of the change in other shareholders’ equity of the investee other than net prot or loss, other comprehensiveincome and prot distribution is transferred in the current prot or loss at the disposal of such investment; in which, after suchdisposal, if such investment is still the long-term equity investment, it will be carried forward in proportion; if it is convertedinto the nancial instrument, it will be carried forward in full.

The initial investment cost of a long-term equity investment acquired through business combination not under commoncontrol is recognized at the combination cost (if the business combination not under common control is realized throughseveral transactions by step, the sum of the book value of the equity investment of the acquiree held before the acquisitiondate and the cost of investment newly added on the acquisition date is recognized as the initial investment cost), and thecombination cost includes the asset paid by the acquiree, liability incurred or borne by the acquiree, and the fair values ofissued equity securities; for the other comprehensive income held before the acquisition date and recognized due to theaccounting under equity method, at the disposal of such investment, the accounting treatment identical to that for the directtreatment of relevant assets or liabilities by the investee is adopted; the shareholders’ equity recognized on account of thechange in other shareholders’ equity of the investee other than net prot or loss, other comprehensive income and protdistribution is transferred in the current prot or loss at the disposal of such investment; in which, after such disposal, if suchinvestment is still the long-term equity investment, it will be carried forward in proportion; if it is converted into the nancialinstrument, it will be carried forward in full. The accumulated changes in fair values of the equity investments held before theacquisition date, which was included in the other comprehensive income as the nancial instruments, are fully transferredin the retained earnings (from 2019) or the current prot or loss (before 2019), on the accounting at cost. For long-termequity investments acquired not through business combination, their initial investment costs are determined by the followingways: if the long-term equity investment is acquired through cash payment, the initial investment cost will be the sum of theacquisition price actually paid and the costs, taxes and other necessary costs, which are directly relevant to the long-termequity investment; if the long-term equity investment is acquired by issuing equity securities, the initial investment cost will bethe fair value of the equity securities issued.

The long-term equity investments where the Company could control the investee shall be accounted in individualnancial statements of the Company under the cost method. Control means the power owned over the investee and enjoysthe variable return through participating in activities related to the investee, and has the ability to affect its return by using thepower over the investee.

Under the cost method, long-term equity investments are valuated at initial investment cost. The Company shallincrease or recover the investment to adjust the cost of long-term equity investments. Cash dividends or prots declared anddistributed by the investee should be recognized as investment income in the current period.If the Group has joint control over or signicant inuence on the investees, long-term equity investments are accountedfor with the equity method. Joint control refers to the control shared over an arrangement in accordance with the relevantstipulations, and the decision-making of related activities of the arrangement should not be made before the party sharingthe control right agrees the same. Signicant inuence refers to the power to participate in making decisions on the nancialand operating policies of the investee, but not the power to control, or jointly control, the formulation of such policies withother parties.For long-term equity investments measured under the equity method, if the initial investment costs are higher than theinvestor's attributable share of the fair value of the investee's identiable net assets, the initial costs of the long-term equityinvestments shall be recognized; if the initial investment costs are lower than the investor's attributable share of the fair valueof the investee's identiable net assets, the difference shall be recognized in current prot and loss and at the same time theadjustment will be made to the initial costs of the long-term equity investments.Where the equity method is adopted, after the long-equity investments are acquired, the Company shall, according tothe shares of net prot and loss and other comprehensive income realized by the investee which the Company shall enjoyor bear, recognize the prot and loss on the investments and other comprehensive income and adjust the book value of thelong-term equity investments. When recognizing the share of net prot or loss of the investee that the Group shall enjoy,based on fair value of various identifiable assets and others of the investee on acquisition and according to accountingpolicies and accounting periods of the Group, the Group shall write off the part of incomes from internal transactions withassociates and joint ventures which are attributable to the investor according to the shareholding ratio (but the loss frominternal transactions is the asset impairment loss, its total amount shall be recognized) and then recognize the prot andloss on investments on such basis, except those assets investments or sale constitute business. The Group shall, in thelight of the prots or cash dividends that the investee declares to distribute, calculate the part it should share and reduce thebook value of the long-term equity investment correspondingly. Recognition of the net loss in the investee shall be withinthe limit that the book value of long-term equity investments and other long-term interests which substantially form the netinvestment in the investee are reduced to zero, unless the Group is obliged to bear extraneous losses; For other changesin shareholder's equity of the investee excluding net losses or prots, other comprehensive income or prot distribution, thebook value of long-term equity investments will be adjusted and included in shareholder's equity.For disposal of long-term equity investments, the difference between the book value and the actual price shall beincluded in the current investment income. For long-term equity investments recognized under equity method, when theequity method is no longer adopted due to the disposal, accounting treatment should be made for other comprehensiveincome previously recognized under the equity method by using the same basis for the investee to directly dispose therelevant assets or liabilities. Shareholder's equity recognized from the investee's changes in other shareholder’s equityother than net prot or loss, other comprehensive income and prot distribution should all transferred to the current prots orlosses.14 Investment propertiesInvestment properties refer to properties that are held for the purposes of earning rental income, capital appreciation, orsome combination thereof, including land use rights and buildings that have been leased out.The investment property shall be initially measured at cost. Subsequent expenses related to investment properties, ifthe economic benets associated are likely to ow in and its cost can be measured reliably, should be recorded in the cost ofinvestment property. Otherwise, such subsequent expenses should be included in current prots or losses upon occurrence.The subsequent measurement of an investment property shall be conducted by the Group under the cost method, andthe land use right and buildings shall be amortized and depreciated according to the expected useful life and net residualrate of the investment property. The expected useful lives, net residual value rate and annual depreciation (amortization) rateof the investment properties are as follows:

Expected useful livesExpected net residual value rateAnnual depreciation(amortization) rateBuildings30 years0%3.3%Land use rightsLand useful lives0%

Determined according to the expected net residualvalue and useful life for the land useful lives

The Group shall review estimated useful lives, estimated net residual value and depreciation (amortization) methods ofthe investment properties at the end of each year and shall make adjustment when necessary.When an investment property is changed for self-use, upon change, the investment property shall be converted intoxed assets or intangible assets. When the self-use property is changed to earn rentals or for capital appreciation, uponchange, xed assets or intangible assets shall be converted into investment properties. When there is a conversion, the bookvalue before the conversion shall be regarded as the book value after the conversion.15 Fixed assetsFixed assets will only be recognized when the economic benets relating to the xed assets may ow into the Groupand the costs of the xed assets can be measured reliably. If the subsequent disbursements relevant to a xed asset meetthe recognition conditions, they shall be recorded in the cost of xed asset, and the book value of the replaced part shall bederecognized; otherwise, they shall be recorded in the current prots and losses.

Fixed assets are initially measured at cost. The costs of externally acquired xed assets comprise their purchase prices,related taxes and surcharges and any attributable expenditure incurred to prepare the asset for its intended use.

Except for the xed assets form by using withdrawn safe production costs, the provisions for the depreciation of xedassets are made by straight-line method, and the useful lives, expected net salvage value and annual depreciation rates ofvarious xed assets are as follows:

Useful livesEstimated net residual value rateAnnual depreciation rateBuildings and constructions20-40 years0%2.5%-5%Mechanical equipment3-20 years0%5%-33.3%Ofce and electronic equipment3-5 years0%20%-33.3%Transportation facilities (excluding ship)5 years0%20%Ship10-30 years5%/10%3%-9.5%

The fixed assets acquired under financing leases adopt the same depreciation policies for the provision for thedepreciation of leased assets as those of its own xed assets. Where it can be reasonably certain that the Company willobtain ownership of the leased asset at the expiry of the lease term, the leased assets are depreciated over the useful life;where it cannot be reasonably certain that the Company can obtain ownership of the leased asset at the end of the leaseterm, the leased assets are depreciated at the shorter of the lease term and the use life of the leased assets.The Group shall review useful lives, estimated net residual value and depreciation methods of the xed assets at theend of each year and shall make adjustment when necessary.16 Construction in progressThe Group recognizes the cost of the construction in progress at the actually incurred expenditures, including all typesof necessary expenditures incurred during the construction period, the capitalized borrowing costs incurred prior to the timewhen the construction is brought to the expected conditions for use and other relevant costs.The construction in progress is converted into xed assets after it reaches the expected conditions for use.17 Borrowing costs

Borrowing costs refer to the interest and other relevant costs of the Company due to borrowings, including the interest ofborrowings, the amortization of discount or premium, auxiliary expenses, exchange differences incurred by foreign currencyborrowings, etc.

The Group capitalizes the borrowing costs of acquisition or construction or production which may directly belong toassets that are eligible for capitalization; and other borrowing costs are included in the current prot or loss. Assets eligiblefor capitalization refer to xed assets, investment property, inventories and other assets which may reach their intended useor sale status only after long-time acquisition and construction or production activities.

The borrowing costs shall not be capitalized unless they simultaneously meet the following requirements:

(1) The asset disbursements have already incurred;

(2) The borrowing costs have already incurred; and

(3) Purchase, construction or manufacturing activities that are necessary to prepare the asset for its intended use or

sale have already started.Capitalization of borrowing costs should cease when the acquired and constructed or produced assets eligible forcapitalization have reached the working condition for their intended use or sale. The borrowing costs incurred thereafter shallbe included in the current prot or loss.During the period of capitalization, the capitalized amount on interest of each accounting period shall be determined inaccordance with the following provisions:

(1) The interest of special borrowings to be capitalized should be determined according to the actually incurred interest

expenses in the current period less the interest income on deposits or the investment income;

(2) The interest of general borrowings to be capitalized should be calculated by multiplying the weighted average of

asset disbursements of the part of accumulated asset disbursements exceeding special borrowings by the weighted averagerate of used general borrowings.If the acquisition and construction or production activities of assets eligible for capitalization are abnormally interrupteddue to the matters other than necessary procedures for such assets to reach the working conditions for its intended use orsale and such circumstance lasts for more than three months, the capitalization of borrowing costs should be suspended.Borrowing costs incurred during the interruption are recognized as the current prot or loss and continue to be capitalizeduntil the acquisition, construction or production of the asset restarts.

18 Intangible assets

Intangible assets will be recognized only when relevant economic benets may well ow into the Group and the costsof intangible assets can be measured reliably, and initially measured at costs. However, if the fair value of the intangibleassets acquired in the business combination not under common control can be reliably measured, it should be recognizedas intangible assets and measured at fair value separately. When the Company reconstructs its corporate system, for theintangible assets invested by the shareholders of the state-owned shares, the evaluation value conrmed by the state-ownedassets management department shall be served as the book value.The useful life of an intangible asset is determined based on the period during which it can bring economic benets tothe Group. If the said period cannot be predicted, it will be recognized as an intangible asset with indenite useful life.The useful lives of all kinds of intangible assets are determined as follows:

Useful lifeLand use rightLand useful livesSoftware use fees5 yearsProprietary technology10 years

The land use rights acquired by the Group are usually accounted as intangible assets. For the plants and other buildingsdeveloped and constructed by the Company, relevant land use rights and constructions shall be respectively accounted asintangible assets and xed assets. For externally purchased land and buildings, the related payments are distributed in theland use right and buildings; those difcult to be distributed shall be all handled as xed assets.For the intangible assets with limited useful life, their amount shall be amortized at the straight-line method over itsuseful life. The Group will reexamine the useful lives and amortization method of intangible assets with limited useful lives,and make adjustments when necessary at the end of each year.The Group's expenditures for its internal research and development projects are classied into research expendituresand development expenditures. The expenditures in research phase will be included in the current profit or loss onoccurrence. The development expenditures will be capitalized only when all of the following conditions are satisfiedsimultaneously: It is feasible technically to nish intangible assets for use or sale; It is intended to nish and use or sell theintangible assets; The usefulness of methods for intangible assets to generate economic benets shall be proved, includingbeing able to prove that there is a potential market for the products manufactured by applying the intangible assets or thereis a potential market for the intangible assets itself or the intangible assets will be used internally; It is able to nish thedevelopment of the intangible assets, and able to use or sell the intangible assets, with the support of sufcient technologies,nancial resources and other resources; and the expenditures attributable to the intangible asset during its developmentphase can be measured reliably. Development expenditures that do not meet the above conditions are included in thecurrent prot or loss on occurrence.

19 Asset impairmentThe Group recognizes the asset impairment under the following methods except for inventories, deferred income taxand nancial assets:

The Group shall, on the balance sheet date, make a judgment on whether there is any indication that the assets mayimpair. If such indication does exist, the Group shall estimate the recoverable amount and carry out an impairment test.Impairment tests for goodwill caused by business combination shall be conducted at the end of every year whether theyhave signs of impairment or not. Impairment tests for intangible assets not reaching usable condition shall be conductedevery year.The recoverable amounts of assets are the higher of their fair values less costs to sell and the present values of thefuture cash ows expected to be derived from the assets. The Group shall, on the basis of single item assets, estimate therecoverable amount. Where it is difcult to do so, it shall determine the recoverable amount of the group assets on the basisof the asset group to which the asset belongs. The recognition of an asset group shall base on whether the main cash inowgenerated from the asset group is independent of those generated from other assets or other group assets.

Where the recoverable amount of an asset or an asset group is lower than its book value, the book value of the asset orasset group shall be written down to their recoverable amounts. The write-downs are recorded into the current prot or lossand the provision for asset impairment are made accordingly at the same time.

When the Company makes an impairment test of goodwill, it shall, as of the purchasing day, apportion the book value ofthe goodwill formed by business combination to the relevant asset groups by a reasonable method. Where it is difcult to doso, it shall be apportioned to the relevant portfolio of asset groups .The related asset group or combination of asset groupsshall be the asset group or combination of asset groups that can benet from the synergy effect of business combination,and shall be smaller than the reporting segments as determined by the Group.

When making an impairment test on the relevant asset groups or combination of asset groups containing goodwill, if anyindication shows that the asset groups or combinations of asset groups related to the goodwill may be impaired, the Groupshall rst conduct an impairment test on the asset groups or combinations of asset groups not containing goodwill, calculatethe recoverable amount and recognize the corresponding impairment loss. Then, the Group shall conduct an impairment teston the asset groups or asset groups portfolio containing goodwill, and compare it book value and recoverable amount: if therecoverable amount is lower than book value, the amount of impairment losses should be rstly used to deduct book valueof goodwill allocated to the asset group or the asset group portfolio, and then deduct book value of other assets according tothe proportion of the book value of other assets other than the goodwill in the asset group or the asset group portfolio.

Once the loss of assets impairment is recognized, it is not allowed to be reversed even if the value can be recovered insubsequent period.20 Long-term deferred expenses

Long-term deferred expenses shall be amortized at the straight-line method, and the amortization period is set out asfollows:

Amortization periodImprovement of xed assets acquiredExpected benecial period under the operating lease21 Employee compensation

Employee compensations refer to multiform remuneration or compensation offered of the Group in order to get servicesprovided by its employees or sever the labor relation. Employee compensation mainly includes short-term employeecompensation, post-employment benets, dismissal benets and other long-term employee benets. The welfare providedby the Company to employees' spouses, children, dependents, family dependants of the deceased employee and otherbenecial owners also belong to employee compensation.Short-term compensationDuring the accounting period of an employee' providing services, the short-term compensation actually incurred isrecognized as liabilities and includes them in the current prot or loss or the related asset costs.Post-employment benets (dened contribution plans)The employees of the Group participated in the endowment insurance and unemployment insurance managed by thelocal government, and also participated in the enterprise annuity, and the corresponding expenses were included in therelevant asset costs or the current prot or loss when incurred.

22 Estimated liabilitiesExcept for contingent consideration and contingent liabilities assumed in business combination not under the samecontrol, when the obligations related to contingencies meet the following conditions, the Group recognizes them as estimatedliabilities:

(1) This obligation is a present obligation of the Group;

(2) The performance of such obligation is likely to result in outow of economic benets from the Group;

(3) The amount of the obligation can be measured reliably.

The estimated liabilities are initially measured as the best estimate of expenses required for the performance of relevantpresent obligations by considering comprehensively the risks with respect to contingencies, uncertainties and the time valueof money. On each balance sheet date, the Group shall review the book value of estimated liabilities. The Company shallmake corresponding adjustments to reect the current best estimate if there is any conclusive evidence indicating that suchbook value cannot reect the current best estimate.

23 Revenue

Revenue shall be recognized when related benefits are likely to flow into the Group, the amount can be reliablycalculated, and the following conditions are met synchronously.

(a) Revenue from sales of large-scale port equipment, ocean heavy equipment, product of steel structure andconstruction project is recognized by the percentage-of-completion method. Please refer to Note III. 12.

(b) Revenue from ship transportation is recognized at the completion of the voyage.

(c) Income is recognized at the time of delivery for the sale of spare goods or parts and other materials.

(d) The interest income is recognized based on the time and effective interest rate for others to use the monetary fundsof the Group.

(e) The revenue from operating lease is recognized in each period under the straight-line method during the lease term.

(f) Activities under the construction and transfer of contracts usually include construction and transfer. With respect tothe construction projects for which the Group is responsible, during the construction period, in accordance with principals ofthe construction contract, when the outcome can be reliably estimated, the construction contract revenue is measured at thefair value of the consideration receivable, with long-term receivables recognized at the same time and offset upon receipt ofpayment of the project owner.24 Government grants

Government grants shall be recognized only if the Company is able to comply with the conditions for the governmentgrants, and is likely to receive the government grants. If a government grant is a monetary asset, it shall be measured at theamount received or receivable. If a government grant is a non-monetary asset, it shall be measured at its fair value; and if itsfair value cannot be obtained in a reliable way, it shall be measured at a nominal amount.

If the government grants shall be used for the construction or the generation in otherwise of the long-term assets asrequired by the government documents, they are the assets-related government grants; If government documents haveno relevant provisions, and such government grants are based on the condition of the construction or the generation inotherwise of the long-term assets judged on the basis of basic conditions required for obtaining such government grants,they shall be deemed as the assets-related government grants, other government grants in addition to the said ones shall bedeemed as the income-related government grants.

Income-related government grants which are used to compensate for relevant costs or losses in subsequent periods willbe recognized as deferred income, and will be included in the current prot or loss or be used to write off relevant costs inthe period when relevant costs or losses are recognized.

If assets-related government grants are recognized as deferred income, they shall be included in profit or loss bystages by a reasonable and systematic method within the useful lives of relevant assets. (However, the government grantsmeasured at nominal amounts are directly included in the current prot or loss); if the relevant assets are sold, transferred,scrapped or damaged before the end of their useful lives, the undistributed balance of relevant deferred income is transferredto the prot or loss from the current period of asset disposal.25 Income tax

Income tax includes the income tax of the current period and deferred income tax. Except that the adjusted goodwillarising from business combination or the deferred income tax related to transactions or events directly recognized in

shareholder’s equity shall be included in shareholder’s equity, other current income tax and deferred income tax shall beincluded in current prot and loss as income tax expenses.The current income tax liabilities or assets incurred in the current period or prior periods shall be measured by the Groupin light of the expected payable or refundable amount of income taxes according to the tax law.Deferred income tax is accrued under the balance sheet liability method by the Group based on the temporary differencebetween book value of assets and liabilities on the balance sheet date and tax base, as well as the balance between thebook value of items which have not been recognized as assets or liabilities but the tax base can be determined according tothe tax law and the tax base.Taxable temporary differences are recognized as deferred income tax liabilities, except that

(1) Taxable temporary differences are generated in the following transactions: the initial recognition of goodwill, or the

initial recognition of assets or liabilities arising from transactions with the following characteristics: the transaction is nota business combination and will not affect accosting prots, nor affect the taxable income or deductible losses when thetransaction occurs.

(2) For taxable temporary differences related to the investments in subsidiaries, joint ventures and associates, the time

for the reversal of the taxable temporary differences can be controlled and the taxable temporary differences are likely not tobe reversed in the foreseeable future.

For deductible temporary differences, deductible losses and tax credits that can be carried forward to subsequentperiods, deferred tax assets arising therefrom are recognized to the extent that future taxable income will be probable to beavailable against the deductible temporary differences, deductible losses and tax credits, unless the deductible temporarydifferences arise from the following transactions:

(1) The deductible temporary difference is generated in the following transaction: the transaction is not a business

combination and it will affect neither accounting prots nor the taxable income (or deductible losses) when occurred.

(2) For the deductible temporary differences arising from investments in subsidiaries, associates and joint ventures,

the deferred income tax assets will be accordingly recognized when meeting the following conditions at the same time:

the temporary differences may be reversed in the foreseeable future and they can be used to offset the taxable income ofdeductible temporary differences in the future.

On the balance sheet date, the Company shall measure deferred income tax assets and deferred income tax liabilitiesat the applicable tax rate during the period for expected recovery of assets or settlement of liabilities and reect the impactsof the income tax by means of expected recovery of assets or settlement of liabilities on the balance sheet date.

On the balance sheet date, the Group reviews the book value of deferred income-tax assets. If it is unlikely to obtainsufcient taxable income to offset the benet of the deferred income-tax assets, the book value of the deferred income-taxassets will be written down. On the balance sheet date, the Group re-evaluates unrecognized deferred income tax assets,and deferred income tax assets are recognized to the extent that it is likely to obtain sufcient taxable income for all or partof the deferred income tax assets to be reversed.

Deferred income tax assets and deferred income tax liabilities meeting the following conditions simultaneously will bepresented by net amount after offset: when the Company has the statutory right to balance current income tax assets andcurrent income tax liabilities with net amounts, and deferred income tax assets and deferred income tax liabilities are relatedto the income tax which are imposed on the same taxpayer by the same tax collection authority or on different taxpayers,but, in each important future period in connection with the reversal of deferred income tax assets and liabilities, the involvedtaxpayer intends to settle the current income tax assets and liabilities on a net amount basis, or obtain assets at the time ofdischarging liabilities.26 Lease

Lease under which all the risks and rewards related to the ownership of assets are materially transferred is recognizedas nancing lease, with the rest as operating lease.

As the leasee of operating lease

Rental payment for operating lease in each stage during the rental period should be included into related asset costs orthe current prot or loss by the straight-line method.

As a lessor of operating lease

Rental income from the operating lease in each stage during the lease term should be recognized as the current protor loss by the straight-line method.

As the lessee of nance lease

At the commencement of the lease term, assets acquired under nance lease shall be recorded at the lower of their fair

values and the present values of the minimum lease payments, and the Company shall recognize the book value of long-term payables at the minimum lease payments, and shall record the differences between book value of the leased assetsand the long-term payables as unrecognized nance charges, which are amortized at the effective interest method in eachstage during the lease term. The contingent rental is included in the current prots or losses when actually occurring.

LeasebackLeaseback for nancing purposes will be treated as a whole, which is accounted by mortgage loan, on the condition thatasset sale is related to lease transaction and can be repurchased when the lease term expires, that is to say, the accountingtreatment shall be conducted as per mortgage loan.

27 Prot distributionThe Company's cash dividends are recognized as liabilities after approval at the general meeting.28 Work safety expenses

The Company withdraws the work safety expenses according to provisions, includes them in the cost of related productsor the current profit or loss, and includes them in special reserves at the same time. The costs are handled separatelydepending on whether they form fixed assets: when withdrawn work safety expenses are used within the prescribedrange and belong to expenses, such costs shall be directly deducted from special reserves; where a xed asset is formed,the expenses incurred through collection are recognized as the xed asset when it is ready for its intended use, and theequivalent special reserve is written off and the equivalent accumulated depreciation is conrmed.

29 Fair value measurement

The Group measures the derivative financial instruments and equity instrument investment at fair value on eachbalance sheet date. Fair value is the price received from sales of an asset or paid for transfer of a liability by a marketparticipant in an orderly transaction on the measurement date. The Group measures the relevant assets or liabilities atfair value, assuming that the sale of assets or transfer of liabilities is orderly carried out in the main market of the relevantassets or liabilities. Where there is no main market, the Group should assume that the transaction is carried out in the mostadvantageous market related to the assets or liabilities. The main market (or the most advantageous market) is the tradingmarket that can be entered by the Company on the measurement date. The Group adopts the assumption used for realizingits utmost economic benet when the market participants price the asset or liability.

When the Company measures non-financial assets at fair value, it should consider a market participant’s ability togenerate economic benefit by using the asset or by selling it to another market participant who will use the asset in itshighest and best use.

When the Group uses the valuation techniques, it has considered the valuation techniques that are applicable in thecurrent situation and are supported by enough available data and other information. The Company gives priority to theobservable inputs when using valuation techniques, and those unobservable inputs are used only under the circumstancewhen it is impossible or unobservable inputs to obtain relevant observable inputs.

For assets and liabilities measured at or disclosed by their fair value in the financial statements, the level of themeasurement result of fair value shall subject to the lowest level which the input having great significance to the entiremeasurement of fair value belongs to: Level 1 inputs refer to quoted prices (unadjusted) in active markets for identical assetsor liabilities available on the measurement date; Level 2 inputs refer to inputs that are directly or indirectly observable for theassets or liabilities other than Level 1 inputs; Level 3 inputs refer to unobservable inputs of the relevant assets or liabilities.

On each balance sheet date, the Group reevaluates the assets and liabilities continuously measured at fair value andrecognized in the nancial statements in order to determine whether there is a conversion among the levels of fair valuemeasurement.30 Signicant accounting judgment and estimate

The preparation of financial statements requires the management to make judgments, estimates and assumptions.These judgments, estimates and assumptions will affect the reported amounts and disclosures of income, expenses, assetsand liabilities, and the disclosure of contingent liabilities on the balance sheet date. The results from the uncertainties ofthese assumptions and estimates may lead to signicant adjustments to the book amount of assets or liabilities that areaffected in the future.

Uncertainty of estimationThe following are other key sources of the uncertainty of the key assumptions and estimates in the future on the balancesheet date, which may lead to major adjustments in the book value of the assets and liabilities of next scal year.Construction contractsFor customized production of large port equipment, heavy equipment, steel structure product and construction project,because the commencement and completion dates usually in different scal years, the Group shall use construction contractcalculate the revenue and cost. During the course of the project, the Group shall continuously review and revise the expectedtotal cost of the construction contract based on the situation of actual cost of the construction contract and the actual cost ofthe similar products in the reference, so that the expected total cost of the contract is approximate to its nal actual cost. Ifthere is a discrepancy between the actual total cost and the expected total cost of contracts in the future, the discrepancy willaffect the cost conrmed by the Group this year.At the same time, the Group management regularly performs impairment testing on construction contracts. If theestimated total contract costs exceed the total contract revenue, the provisions for estimated contract losses will be madeaccordingly. Changes of the expected total cost due to the above continuous review and revision may affect the book valueof the construction completed amount not closed/construction uncompleted amount closed and impairment losses during theestimated changes.Impairment of nancial instrumentsThe Group adopts the expected credit loss model to assess the impairment of nancial instruments. The applicationof the expected credit loss model requires significant judgments and estimates. It must consider all reasonable andevidence-based information, including forward-looking information. In making such judgments and estimates, the Groupinfers expected changes in debtors' credit risk based on historical repayment data combined with economic policies,macroeconomic indicators, industry risks and other factors. Different estimates may affect the provision for impairment, andthe amount of impairment that has been provided may be not equal to the actual amount of future impairment losses.Inventory impairmentsThe management shall estimate the net realizable value of inventories in time so as to estimate the provision fordepreciation of inventories. If any event or circumstance changes, it is necessary to use the estimate to make the provisionfor depreciation of inventories if the inventory is not likely to realize the relevant value. If the expected amount is differentfrom the original estimate, the relevant difference will affect the book value of the inventories and the impairment loss duringthe estimated change.Impairment of non-current assets other than nancial assets (other than goodwill)On the balance sheet date, the Group judges whether there are any signs of possible impairment of non-currentassets other than nancial assets. Non-current assets other than nancial assets are tested for impairment when there isan indication showing that their book amounts are irrecoverable. When the book value of an asset or asset group is higherthan the recoverable amount, that is, the higher of the net amount from fair value less the disposal expense and the presentvalue of the estimated future cash ow, it indicates that the impairment occurred. The net amount after the fair value minusthe disposal expenses is determined by reference to the sales agreement price of similar assets in the fair trade or theobservable market price, minus the incremental cost directly attributable to the disposal of the asset. When estimating thepresent value of future cash ows, management must estimate the expected future cash ows of the asset or asset groupand select an appropriate discount rate to determine the present value of future cash ows.Impairment of goodwillThe Group tests whether the goodwill is impaired at least annually. This requires an estimate of the present value ofthe future cash ows of the asset group or combination of asset groups to which goodwill is allocated. When estimatingthe present value of future cash flows, the Group needs to estimate the cash flow generated by future asset groups orcombination of asset groups, and select the appropriate discount rate to determine the present value of future cash ows.See Note V (21) for details.Fair value of unlisted equity investmentsThe valuation of unlisted equity investments is an estimated future cash ow discounted at the current discount rateof other nancial instruments with similar contract terms and risk characteristics. This requires the Group to estimate theexpected future cash ow, credit risk, uctuation and discount rate; therefore, there is some uncertainty.31 Changes in accounting policies and accounting estimatesChanges in accounting policies

New Standards for Financial InstrumentsThe Ministry of Finance promulgated the revised Accounting Standards for Business Enterprises No.22 - Recognitionand Measurement of Financial Instruments, the Accounting Standards for Business Enterprises No.23 - Transfer ofFinancial Assets, the Accounting Standards for Business Enterprises No.24 - Hedge and the Accounting Standards forBusiness Enterprises No.37 - Presentation of Financial Instruments (hereinafter referred to as "New Standards for FinancialInstruments") in 2017. The Group has carried out accounting treatment in accordance with the New Standards for FinancialInstruments from January 1, 2019. According to the convergence provisions, the information for comparable periods is notadjusted. The difference between the implementation of the new standards and the implementation of existing standardson the rst day will be used for retrospective adjustment of the undistributed prots or other comprehensive income as atJanuary 1, 2019.The New Standards for Financial Instruments changed the classification and measurement of financial assets, andidentied three main measurement categories: measurement subject to amortized cost; measurement subject to fair valuethrough other comprehensive income; measurement subject to fair value through current profit or loss. The Companyneeds to consider its business model and the contractual cash ow characteristics of nancial assets to make the aboveclassication. Equity instrument investments need to be measured at fair value and their changes should be included in thecurrent prot or loss, but equity instrument investments not held for trading may be irrevocably designated as nancial assetsmeasured at fair value through other comprehensive income at initial recognition.The New Standards for Financial Instruments require that the impairment measurement of financial assets will bechanged from the incurred loss model to the expected credit loss model, which is applicable to nancial assets measured atamortized cost, nancial assets measured at fair value through other comprehensive income, as well as loan commitmentsand nancial guarantee contracts.The Group endorses or discounts some of its banker's acceptance bills in its daily fund management, and the businessmodel for managing the aforementioned notes receivable is both to collect contractual cash ows and to sell such notesreceivable, therefore the Group reclassies such notes receivable as nancial assets measured at fair value through othercomprehensive income and reported as receivables nancing after January 1, 2019.The Group classifies the equity investments of listed companies held by it as the available-for-sale financial assetsmeasured at fair value before January 1, 2019. As of January 1, 2019, the Group classies such equity investments into thenancial assets measured at fair value through prot or loss, presented as the nancial assets held for trading.Before January 1, 2019, the Group classies the equity investment of unlisted companies held by it as the available-for-sale nancial assets measured at cost, which are held in the long term for strategic purpose. As of January 1, 2019,the Group designated some of its held equity investments as financial assets measured at fair value through othercomprehensive income, and presented them into other equity instrument investments.On the first implementation date, the comparison on results of which financial asset is classified and measured inaccordance with the recognition and measurement standards of nancial instruments before and after the revision is listedas follows:

The Group

Recognition and measurement standards ofnancial instruments before the revision

Recognition and measurement standards of nancial

instruments after the revisionCategory of measurementBook valueCategory of measurementBook valueNotes receivable

Amortized cost (Loans andreceivables)

189,371,105

measured at fair value through othercomprehensive income

162,148,105Amortized cost 27,223,000Equity investment

Measured at fair value throughother comprehensive income(Available-for-sale assets)

1,171,539,394

Measured at fair value through thecurrent prot or loss (Requirementsfor principles)

1,171,539,394Equity investment

Measured at costs(Available-for-sale assets)

42,994,160

Measured at fair value through othercomprehensive income (designated)

55,326,529Equity instrumentinvestments

Measured at fair value throughcurrent prot or loss

8,438,278

Measured at fair value throughcurrent prot or loss

8,438,278Derivative nancialinstruments

Measured at fair value throughcurrent prot or loss

44,481,806

Measured at fair value throughcurrent prot or loss

44,481,806

On the first implementation date, the comparison on results of which financial asset is classified and measured inaccordance with the recognition and measurement standards of nancial instruments before and after the revision is listedas follows:

The Company

Recognition and measurement standards ofnancial instruments before the revision

Recognition and measurement standards of nancial

instruments after the revisionCategory of measurementBook valueCategory of measurementBook valueNotes receivable

Amortized cost (Loans andreceivables)

75,801,953

Measured at fair value through othercomprehensive income

75,801,953Equity investment

Measured at fair valuethrough other comprehensiveincome (Available-for-sale assets)

102,163,302

Measured at fair value through the currentprot or loss (Requirements for principles)

102,163,302Equity investment

Measured at costs (Available-for-sale assets)

42,994,160

Measured at fair value through othercomprehensive income (designated)

55,326,529Derivative nancialinstruments

Measured at fair value throughcurrent prot or loss

44,481,806

Measured at fair value through currentprot or loss

44,481,806

On the rst implementation date, the original book value of the nancial asset is adjusted to the adjustment table of newbook value of the nancial asset classied in accordance with the revised recognition and measurement standard of nancialinstruments:

Book value under the OldStandards for Financial

Instruments

ReclassicationRemeasurement

Book value under the NewStandards for FinancialInstrumentsAs at December 31, 2018As at January 1, 2019Financial asset measured atamortized costNotes receivableBalance under the Old Standardsfor Financial Instruments

189,371,105Less: amount transferred to bemeasured at fair value throughother comprehensive income(New Standards for FinancialInstruments)

162,148,105Balance under New Standards forFinancial Instruments

27,223,000Accounts receivableBalance under the Old Standards forFinancial Instruments

5,032,548,741Remeasurement: provision forexpected credit losses

(111,908,301)Balance under New Standards forFinancial Instruments

4,920,640,440Other receivablesBalance under the Old Standardsfor Financial Instruments

1,149,035,349

Book value under the Old

Standards for FinancialInstruments

ReclassicationRemeasurement

Book value under the New

Standards for Financial

InstrumentsAs at December 31, 2018As at January 1, 2019Remeasurement: provision forexpected credit losses

(1,497,196)Balance under New Standards forFinancial Instruments

1,147,538,153Available-for-sale nancial assetsBalance under the Old Standardsfor Financial Instruments

1,214,533,554Less: amount transferred to bemeasured at fair value throughother comprehensive income-equityinstruments (New Standards forFinancial Instruments)

42,994,160Less: amount transferred to bemeasured at fair value throughthe current prot or loss (NewStandards for Financial Instruments)

1,171,539,394Balance under New Standards forFinancial Instruments

-Total7,585,488,7491,376,681,659(113,405,497)6,095,401,593

On the date of rst implementation, the amount as at December 31, 2018 of the original provision for impairment ofnancial assets was adjusted to a new adjustment table of loss provision of the nancial asset classied in accordance withthe revised New Standards for Financial Instruments:

Category of measurement

Provision for loss under the OldStandards for Financial Instruments

Remeasurement

Provision for loss under the NewStandards for Financial InstrumentsAccounts receivable1,529,308,221111,908,3011,641,216,522Other receivables234,115,5211,497,196235,612,717

1,763,423,742113,405,4971,876,829,239In addition, the Group's signicant associate, CCCC Financial Leasing Co., Ltd., implemented the New Standards forFinancial Instruments and re-measure the provision for loss of RMB 51,750,784, and the Group accordingly adjusted thebeginning undistributed prot of RMB 15,525,235 at 30% of its shareholding.Changes in presentation methods of nancial statementsIn 2019, the Ministry of Finance promulgated the Circular on Issuing the Amended General Corporate FinancialStatement Templates for Year 2019 (CK[2019] No.6) and the Circular on Revising and Issuing the Consolidated FinancialStatement Templates (2019 Version) (CK[2019] No.16), in the balance sheet, the "notes receivable and accounts receivable"are separately presented as "notes receivable" and "accounts receivable", while the “notes payable and accounts payable"are separately presented as "notes payable" and "accounts payable", and the Group conducts retroactive adjustments overthe comparison data. The change of accounting policy has no effect on the consolidated and the Company's net prot andowner's equity. In addition, with the implementation of the New Standards for Financial Instruments this year, in accordancewith the requirements of the Circular on the Revision of the Format for the Issuance of General Corporate FinancialStatements for Year 2019 (CK [2019] No.6), "interest receivable" in the item "other receivables" was changed to the interestdue and receivable on the relevant financial instruments but not yet received on the balance sheet date, and "interestpayable" in the item "other payables" was changed to the interest due and payable on the relevant nancial instruments

but not yet paid on the balance sheet date, without retroactively adjusting the comparative data in accordance with theconvergence provisions of the New Standards for Financial Instruments.The major impact of retrospective adjustments caused by the above changes in accounting policies on the nancialstatements is as follows:

The Group

Before the accountingpolicy changes

Changes in accounting policies

After the accountingpolicy changesBalance as atDecember 31, 2018

Impact of New

Standardsfor FinancialInstruments

Impact of changes inpresentationmethods of othernancial statements

Balance as atJanuary 1, 2019Financial assets measured atfair value through the currentprot or loss

52,920,084(52,920,084)--Financial assets held fortrading

-1,224,459,478-1,224,459,478Notes receivable and accountsreceivable

5,221,919,846(162,148,105)(5,059,771,741)-Notes receivable--27,223,00027,223,000Accounts receivable-(111,908,301)5,032,548,7414,920,640,440Receivables nancing-162,148,105-162,148,105Other receivables1,149,035,349(1,497,196)-1,147,538,153Available-for-sale nancial assets1,214,533,554(1,214,533,554)--Other equity instruments-55,326,529-55,326,529Long-term equity investments2,775,801,760(15,525,235)-2,760,276,525Deferred income tax assets539,684,92511,278,182-550,963,107Notes payable and accountspayable

(9,769,273,923)-9,769,273,923-Notes payable--(2,732,404,222)(2,732,404,222)Accounts payable--(7,036,869,701)(7,036,869,701)Other comprehensive income(223,853,860)216,130,221-(7,723,639)Undistributed prots(3,344,953,206)(119,821,864)-(3,464,775,070)Minority equity(2,426,634,780)9,011,824-(2,417,622,956)The Company

Before the accountingpolicy changes

Changes in accounting policies

After the accounting

policy changesBalance as atDecember 31, 2018

Impact of NewStandardsfor FinancialInstruments

Impact of changes inpresentationmethods of othernancial statements

Balance as at

January 1, 2019Financial assets measured atfair value through the currentprot or loss

44,481,806(44,481,806)--Financial assets held fortrading

-146,645,109-146,645,109Notes receivable and accountsreceivable

7,212,568,840(75,801,953)(7,136,766,887)-Accounts receivable-(74,767,027)7,136,766,8877,061,999,860

Before the accountingpolicy changes

Changes in accounting policies

After the accountingpolicy changesBalance as atDecember 31, 2018

Impact of NewStandardsfor FinancialInstruments

Impact of changes inpresentationmethods of othernancial statements

Balance as atJanuary 1, 2019Receivables nancing-75,801,953-75,801,953Other receivables13,955,146,640(222,894)-13,954,923,746Available-for-sale nancialassets

145,157,462(145,157,462)--Other equity instruments-55,326,529-55,326,529Long-term equity investments8,636,018,724(15,525,235)-8,620,493,489Deferred income tax assets510,532,9259,398,632-519,931,557Notes payable and accountspayable

(8,860,350,035)-8,860,350,035-Notes payable--(2,533,542,476)(2,533,542,476)Accounts payable--(6,326,807,559)(6,326,807,559)Other comprehensive income(71,258,509)66,945,426-(4,313,083)Undistributed prots(3,520,430,440)1,838,728-(3,518,591,712)IV. Taxation1 Major tax types and tax rates

Tax Taxation basis Tax rate

VAT -

VAT is applicable to the sales of the Group’s products, among which the taxable income fromthe sales of the products in domestic market is subject to the output tax as per 16% beforeApril 1, 2019 and 13% from April 1, 2019 on; The products for export adopt the method of“tax exemption, tax deduction and tax reimbursement” and the applicable tax rate is 13%(before April 1, 2019: 16%, 15% and 13%).The Group’s income from the marine transport isapplicable to VAT, and the output tax is calculated as per 10% of the taxable income beforeApril 1, 2019 and 9% from April 1, 2019 on; the income from leasing of the equipment isapplicable to VAT and the output tax is calculated as per 16% of the taxable income beforeApril 1, 2019 and 13% from April 1, 2019 on; the income from the sales of the equipment isapplicable to the simple collection measures of VAT and the tax rate is subject to the reducedtax rate of 2%; the Group’s income from the leasing of the housing is applicable to the simplecollection measures of VAT and the tax rate is 5%; the item “B-T” is applicable to VAT and theoutput tax on the taxable income is collected at 10% before April 1, 2019 and 9% from April1, 2019 on. The above output tax shall calculate and pay VAT after deducting the amount ofinput tax deductible, except for the applicable VAT’s simple collection method.Urban maintenanceand construction taxand education surtax

-should be calculated and paid according to 7% and 3% of the actual turnover tax paid.

Enterprise incometax

-

is calculated and paid in accordance with the Enterprise Income Tax Law of People’sRepublic of China (hereinafter referred to as the “Income Tax Law”). In accordance withrelevant regulations in the Administrative Measures for Certication of New and HighTechnology Enterprises (GKFH [2016] No.32), the Guidelines for the Administration ofQualication Accreditation of High-tech Enterprises (GKFH [2016] No.195), and the Circularon Announcing the Recognition List of the Second Batch of High-tech Enterprises ofShanghai in 2017, the Company was awarded the High-tech Enterprise Certicate (CerticateNumber: GR201831002345) with the valid term of 3 years. The Company actually appliedthe enterprise income tax rate of 15% this year (2018: 15%).

Enterprise income tax rates applicable to the Company and holding subsidiaries are as follows:

Registration place

Year 2019 Applicable

tax rate

Year 2018Applicable tax ratethe CompanyPudong New Area, Shanghai15%15%Shanghai Zhenhua Port Machinery Heavy IndustriesCo., Ltd.

Chongming District, Shanghai25%25%Shanghai Zhenhua Port Machinery (Hong Kong) Co.,Ltd. (Remark 1)

Hong Kong16.5%16.5%Shanghai Zhenhua Shipping Co., LtdPudong New Area, Shanghai25%25%Nantong Zhenhua Heavy EquipmentManufacturing Co., Ltd.

Nantong, Jiangsu Province25%25%Shanghai Zhenhua Heavy Industries Group(Nantong) Transmitter Co., Ltd. (Remark 2)

Nantong, Jiangsu Province15%15%ZPMC Electric Co., Ltd. (Remark 2)Pudong New Area, Shanghai15%15%Jiangyin Zhenhua Port Machinery Steel StructureManufacturing Co., Ltd.

Jiangyin, Jiangsu Province25%25%ZPMC Steel Structure Co., Ltd. (Remark 3)Pudong New Area, ShanghaiCanceled25%Shanghai Zhenhua Ocean EngineeringService Co., Ltd

Yangshan, ShanghaiBonded Port Area

25%25%ZPMC Machinery Equipment Services Co., Ltd.Pudong New Area, Shanghai25%25%Shanghai Zhenhua Heavy Industries Port MachineryGeneral Equipment Co., Ltd.

Pudong New Area, Shanghai25%25%Shanghai Port Machinery Heavy Industries Co., Ltd.Pudong New Area, Shanghai25%25%ZPMC Zhangjiagang Port Machinery Co., Ltd.

Port Area, Jingang Town, Jiangsu

Province

25%25%ZPMC Qidong Marine Engineering Co., Ltd.Nantong, Jiangsu Province25%25%Jiahua Shipping Co., Ltd. (Remark 1)Hong Kong16.5%16.5%Zhenhua Pufeng Wind Energy (HongKong) Co., Ltd.Hong Kong16.5%16.5%Tianhe Mechanical Equipment Manufacturing Co.,Ltd of CCCC (Remark 2)

Changshu, Jiangsu Province15%15%Fujian CCCC Qianda Heavy Industries Co., Ltd.(Remark 3)

Fuzhou, Fujian ProvinceCanceled25%Nanjing Ninggao New Channel Construction Co., LtdNanjing, Jiangsu Province25%25%CCCC Investment & Development Qidong Co., Ltd.Nantong, Jiangsu Province25%25%CCCC Liyang Urban Investment andConstruction Co., Ltd.

Liyang, Jiangsu Province25%25%CCCC (Huaian) Construction Development Co., Ltd.Huai'an, Jiangsu Province25%25%CCCC Zhenjiang Investment ConstructionManagement Development Co., Ltd.

Zhenjiang, Jiangsu Province25%25%CCCC Rudong Construction Development Co., Ltd.Nantong, Jiangsu Province25%25%ZPMC Netherlands Co?peratie U.A.Rotterdam, Netherlands20%20%ZPMC Netherlands B.V.Rotterdam, Netherlands20%20%

Registration place

Year 2019 Applicabletax rate

Year 2018Applicable tax rateVerspannen B.V.Rotterdam, Netherlands20%20%ZPMC Espana S.L.Los Valios, Spain28%28%ZPMC GmbH Hamburg Hamburg, Germany32.28%32.28%ZPMC Lanka Company (Private) LimitedColombo, Sri Lanka17.50%17.50%ZPMC North America Inc.Delaware, USA15%15%ZPMC Korea Co., Ltd.Busan, Korea20%20%ZPMC Engineering Africa (Pty) Ltd.

KwaZulu-Natal, Republic ofSouth Africa

28%28%ZPMC Engineering (India) Private LimitedMaharashtra ,India30%30%ZPMC Southeast Asia Holding Pte. Ltd.Singapore17%17%ZPMC Engineering (Malaysia) Sdn. Bhd.Malaysia20%20%ZPMC Australia Company (Pty) Ltd.

State of New South Wales

Australia

30%30%ZPMC Brazil Servi?o Portuários LTDARio de Janeiro, Brazil25%25%ZPMC Limited Liability CompanyMoscow, Russia20%20%ZPMC NA East Coast lnc. Delaware, USA15%15%ZPMC Middle East FZEDubai, UAE0%0%ZPMC UK LDCardiff, UK20%20%Greenland Heavylift (Hong Kong) Limited (Remark 1)Hong Kong16.5%16.5%GPO Grace LimitedMarshall Islands0%0%GPO Amethyst LimitedGPO Grace Limited

Marshall Islands0%0%GPO Sapphire LimitedMarshall Islands0%0%GPO Emerald LimitedMarshall Islands0%0%GPO Heavylift LimitedCayman Island0%0%GPO Heavylift ASOslo, Norway0%0%GPO Heavylift Pte LtdSingapore17%17%ZPMC Latin America Holding CorporationPanama25%25%Terminexus Co., Ltd.Hong Kong16.5%16.5%CCCC Yongjia Construction Development Co., Ltd.Wenzhou, Zhejiang Province25%25%CCCC Zhenhua Lvjian Technology (Ningbo) Co., Ltd.Ningbo, Zhejiang Province25%25%ZPMC Hotel Co., Ltd.Pudong New Area, Shanghai25%25%Xiong’an Zhenhua Co., Ltd.Baoding, Hebei Province25%Not ApplicableZPMC Fuzhou Offshore Construction Co., Ltd. Fuzhou, Fujian Province25%Not ApplicableCCCC (Dongming) Investment and ConstructionCo., Ltd.

Heze, Shandong Province25%Not Applicable

Remark 1: Shanghai Zhenhua Port Machinery (Hong Kong) Co., Ltd., Jiahua Shipping Co., Ltd. and Greenland Heavylift(Hong Kong) Limited are the limited liability companies registered in Hong Kong, China. According to the taxation regulationsof Hong Kong, the actual applicable income tax rate for such companies is 16.5% (2018: 16.5%).

Remark 2: Shanghai Zhenhua Heavy Industries Group (Nantong) Heavy Gear Reducer Co., Ltd won the Hi-techEnterprise Certicate (No. GR201732001352) in 2017, with the valid term of 3 years. Shanghai Zhenhua Heavy IndustriesElectric Co., Ltd was recognized as a hi-tech enterprise in November, 2017 and won the Hi-tech Enterprise Certificate(No.: GR201831003143) with the valid term of 3 years. CCCC Tianhe Mechanical Equipment Manufacturing Co., Ltd. wasrecognized as hi-tech enterprise in August, 2015 and won the Hi-tech Enterprise Certicate (No. GR201832001451) afterreexamination in 2018, with the valid term of 3 years. In accordance with relevant provisions in Article 28 of the Income TaxLaw, the actually applicable enterprise income tax rate for these companies in this year was 15% (2018: 15%).

Remark 3: Fujian CCCC Qianda Heavy Industries Co., Ltd. and Shanghai ZPMC Steel Structure Co., Ltd. had beencanceled in this year and the applicable income tax rate was 25% (2017: 25%) before cancellation.V. Notes to the main items of the consolidated nancial statements1 Monetary funds

Year 2019Year 2018Cash on hand1,469,6551,569,455Bank deposits3,066,555,3213,147,417,917Other monetary funds242,272,475548,351,336

3,310,297,4513,697,338,708As at December 31, 2019, the other monetary funds, including the restricted deposit of RMB 242,272,475 (as atDecember 31, 2018: RMB 548,351,336), were the money appropriated that was collected form the overseas projects anddeposited in the overseas regulatory accounts and the cash deposit deposited for application to the bank for the letter ofcredit and letter of guarantee.As at December 31, 2019,, the overseas monetary fund deposited by the Group was RMB 888,185,684 (Dec, 31, 2018:

RMB 998,711,134).As at December 31, 2019, the bank deposits were current deposits. The interest income from current deposits arecalculated as per the interest rate of the current deposits.2 Financial assets held for trading

Year 2019Financial assets measured at fair value through the current prot or lossEquity instrument investment(i)8,438,278Investments in shares of listed companies(ii)1,709,118,540Derivative nancial assets(iii)22,235,244

1,739,792,062(i) As at December 31, 2019, the financial assets held for trading - equity instrument investment held by the Grouprefers to the fair value of the right obtained at the of acquiring Greenland Heavylift (Hong Kong) Limited to purchase 1% of itsequity of at the price of USD 1.(ii) as at December 31, 2019, the listed company share investments held by the Group include 5.9% equity of JiangxiHuawu Brake Co., Ltd., 1.59% equity of Qingdao Port International Co., Ltd., 1.40% equity of CRSC, 0.91% equity ofCOSCO Shipping Holdings Co., Ltd. and 0.001% equity of Shenwan Hongyuan Group Co., Ltd.(iii) As at December 31, 2019, the financial assets held for trading-derivative financial assets held by the Companywere the exchange option contracts, which was signed but not yet due by and between the Group and the banks, and couldchange EUR and GBP with RMB.The contract will fall due from March 6, 2020 to July 16, 2020. The gains or losses from the evaluation of the fair valueof the above-mentioned foreign exchange option contracts at the end of the year was the amount conrmed by the tradingbanks.

3 Financial assets measured at fair value through the current prot or loss (only applicable in 2018)

Year 2018Financial assets measured at fair value through the current prot or lossEquity instrument investment(i)8,438,278Derivative nancial assets(ii)44,481,806

52,920,084(i) As at December 31, 2018, the nancial assets held for trading - equity instrument investment held by the Companyrefers to the fair value of the right obtained at the of acquiring Greenland Heavylift (Hong Kong) Limited to purchase 1% of itsequity of at the price of USD 1.(ii) As at December 31, 2018, the nancial assets held for trading-derivative nancial assets held by the Company werethe forward exchange contracts, which was signed by and between the Company and the banks, was not due and couldchange USD with Ruble. The contract will fall due from Jan. 15, 2019 to Oct. 15, 2019. The evaluation of the fair value of theabove-mentioned forward foreign exchange contracts at the end of the year was the amount conrmed by the trading banks.

4 Notes receivable

Year 2019Year 2018Bank acceptance bill-162,148,105Commercial acceptance bill5,650,00027,223,000

5,650,000189,371,105Among which, the notes receivable that have been pledged are as follows:

Year 2018Bank acceptance bill31,522,267As at December 31, 2018, RMB 31,522,267 of the notes receivable were pledged to the bank as the pledge guaranteefor the new bank acceptance bill.Notes receivable that had been endorsed or discounted and not matured on the balance sheet date are as follows:

Year 2018Amount derecognizedAmount not derecognizedBank acceptance bill364,908,608

5 Accounts receivableAging analysis of accounts receivable is as follows:

Year 2019Year 2018Within 6 months3,063,448,4782,820,815,0437 - 12 months677,893,7861,156,520,1621- 2 years723,009,434617,093,3312- 3 years449,964,072546,723,2583- 4 years469,520,662215,731,0384- 5 years193,784,143106,965,760Over 5 years1,066,006,7891,098,008,370

6,643,627,3646,561,856,962Less: Provision for bad debts of accountsreceivable

1,677,451,8361,529,308,221

4,966,175,5285,032,548,741

Changes in the provision for bad debts of accounts receivable are as follows:

Balance as atDecember 31,2018

Adjustmentsfor changes inaccounting policies

Balance asat January 1,

2019

Provision in

2019

Reversal in

2019

Balance as atDecember 31,

2019Year 20191,529,308,221111,908,3011,641,216,522206,632,546(170,397,232)1,677,451,836Year 20181,335,401,780-1,335,401,780395,007,065(201,100,624)1,529,308,221

Year 2019Book balance Provision for bad debtsAmountProportion (%)AmountProportion of provision (%)Provision for bad debts accrued on anindividual basis

753,396,38511591,042,38578Accounts receivable with provisionfor bad debts accrued by credit riskfeatures portfolio

5,890,230,979891,086,409,451186,643,627,3641001,677,451,836

Year 2018Book balanceProvision for bad debts

AmountProportion (%) AmountProportion of provision (%)Accounts receivables with individuallysignicant amount and individualprovision for bad debts

588,585,8319440,054,33175Accounts receivable with provisionfor bad debts accrued by credit riskfeatures portfolio

- Related party1,400,155,61421--- Non-related party4,447,868,11668964,006,48922Accounts receivables with individuallyinsignicant amount and individualprovision for bad debts

125,247,4012125,247,4011006,561,856,9621001,529,308,221

As at December 31, 2019, the accounts receivables with individual provision for bad debts are as follows:

Book balance

Provision for baddebts

Estimated credit loss

ratio %

Reason for provisionAccounts receivable 1324,708,000162,354,00050

Counterparty nancialshortageAccounts receivable 2182,958,900182,958,900100Contract disputeAccounts receivable 3158,184,500158,184,500100

Counterparty nancialshortageAccounts receivable 427,904,87027,904,870100Contract disputeAccounts receivable 526,911,14726,911,147100Contract disputeAccounts receivable 610,748,86910,748,869100Contract disputeAccounts receivable 77,815,5007,815,500100Contract dispute

Book balance

Provision for bad

debts

Estimated credit loss

ratio %

Reason for provisionAccounts receivable 87,463,1747,463,174100Contract disputeAccounts receivable 93,582,1353,582,135100Contract disputeAccounts receivable 102,224,0132,224,013100Contract disputeAccounts receivable 11895,277895,277100Contract dispute

753,396,385591,042,385

As at December 31, 2018, accounts receivable with individually signicant amount and individual provision for bad debtsare as follows:

Book balanceProvision for bad debtsProportion of provision%Reason for provisionAccounts receivable 1297,063,000148,531,50050Contract disputeAccounts receivable 2183,703,331183,703,331100Contract disputeAccounts receivable 3107,819,500107,819,500100

Counterparty nancialshortage588,585,831440,054,331As at December 31, 2018, accounts receivable with individually insignicant amount and individual provision for baddebts are as follows:

Book balanceProvision for bad debtsProportion of provision%Reason for provisionAccounts receivable 150,365,00050,365,000100

Counterparty nancialshortageAccounts receivable 227,452,86827,452,868100Contract disputeAccounts receivable 314,854,46714,854,467100Contract disputeAccounts receivable 410,792,60510,792,605100Contract disputeAccounts receivable 57,847,3007,847,300100Contract disputeAccounts receivable 67,342,2867,342,286100Contract disputeAccounts receivable 73,524,1123,524,112100Contract disputeAccounts receivable 82,187,9882,187,988100Contract disputeAccounts receivable 9880,775880,775100Contract dispute

125,247,401125,247,401

The accounts receivable with provision for bad debts made by the aging analysis method by the Group (2018: accountsreceivable of non-related parties) are as follows:

Year 2019Year 2018Book balanceof estimateddefault

Estimatedcreditloss ratio

(%)

In the wholeduration Expected

credit loss

Book balanceProportion (%)

Provision for

bad debtsWithin 6 months3,055,684,559274,664,8841,801,135,202 --7 - 12 months669,859,386216,367,846879,500,97218,795,0101 - 2 years602,231,6071380,579,861547,403,660 1582,110,5492 - 3 years449,964,0722089,520,636333,225,101 3099,967,5303 - 4 years246,662,1622970,797,046188,508,4515094,254,225

Year 2019Year 2018Book balanceof estimateddefault

Estimatedcreditloss ratio(%)

In the wholeduration Expectedcredit loss

Book balanceProportion (%)

Provision forbad debts4 - 5 years175,572,09968119,983,51376,862,2177557,646,662Over 5 years690,257,09492634,495,665621,232,513 100621,232,513

5,890,230,979 1,086,409,4514,447,868,116 964,006,489

As at December 31, 2019, top 5 accounts receivable in terms of ending balance presented by debtor summarized andanalyzed as follows:

BalanceProvision for bad debts

Proportion in total balanceof accounts receivable %Total accounts receivable of Top 5 balances1,305,425,250367,432,65720

As at December 31, 2018, top 5 accounts receivable in terms of ending balance presented by debtor summarized andanalyzed as follows:

BalanceProvision for bad debts

Proportion in total balanceof accounts receivable %Total accounts receivable of Top 5 balances1,214,312,641450,959,592196 Receivables nancing

Year 2019Bank acceptance bill406,408,604

Notes receivable that had been endorsed or discounted and not matured on the balance sheet date are as follows:

Year 2019Amount derecognizedAmount not derecognizedBank acceptance bill738,496,7547 Advances to suppliersAging analysis of advances to suppliers is as follows:

Year 2019Year 2018Book balanceProportion (%)Book balanceProportion (%)Within 1 year603,532,662641,438,324,530861- 2 years267,030,95629165,247,645102- 3 years54,362,644636,491,6512Over 3 years10,952,515141,123,8892

935,878,7771001,681,187,715100As at December 31, 2019, the advances to suppliers of the Company with the aging over one year was RMB332,346,115 (as at December 31, 2018: RMB 242,863,185), mainly the advances to suppliers for the procurement ofimported parts, which has not been yet settled because the purchased imported parts have not yet received.As at December 31, 2019, top 5 advances to suppliers in terms of ending balance presented by debtor summarized andanalyzed as follows:

AmountProportion in total advances to suppliers %Total advances to suppliers of Top 5 balances354,954,21838

As at December 31, 2018, top 5 advances to suppliers in terms of ending balance presented by debtor summarized andanalyzed as follows:

AmountProportion in total advances to suppliers %Total advances to suppliers of Top 5 balances784,431,874478 Other receivables

Year 2019Year 2018Dividends receivable1,072,390-Other receivables1,413,628,1141,383,150,870

1,414,700,5041,383,150,870Less: provision for bad debts238,138,996234,115,521

1,176,561,5081,149,035,349Dividends receivable

Year 2019Year 2018CCCC Nanjing Trafc Engineering Management Co., Ltd.1,072,390Other receivablesAging analysis of other receivables as follows:

Year 2019Year 2018Within 6 months834,207,637529,041,7527 - 12 months64,478,205309,480,5021- 2 years205,383,218486,706,7192- 3 years283,616,57538,707,9193- 4 years13,234,072348,7594- 5 years326,6834,178,886Over 5 years12,381,72414,686,333Sub-total1,413,628,1141,383,150,870Less: Provision for bad debts of other receivables238,138,996234,115,521

1,175,489,1181,149,035,349Classication of other receivables by nature is as follows:

Year 2019Year 2018Unpaid taxes receivable375,987,305361,289,603Bid and performance bond291,599,548389,218,822Export rebates214,352,29043,627,838Secured repayment 164,124,678164,124,678Advance payment receivable on behalf of the third party95,480,544108,068,254Money on call for product eld service43,035,82758,832,432Customs-related security deposit38,241,87863,341,536Lease payment receivable33,434,66833,434,668Staff borrowings receivable23,557,06028,506,262Deposit receivable2,946,0425,345,585Others130,868,274127,361,192

1,413,628,1141,383,150,870

As at December 31, 2019, the provision for bad debts of other receivables in accordance with 12-month expected creditloss and the expected credit loss in the whole duration is as follows:

Stage IStage IIStage III

TotalExpected creditlosses in the future

12 months

Expected creditlosses for the entireduration

Financial assets with creditimpairment (Expected credit lossesin the whole duration)Beginning balance-9,597,790226,014,927235,612,717Provision in the current year -828,2616,235,6297,063,890Reversal in the current year -(715,144)(3,822,467)(4,537,611)Ending balance-9,710,907228,428,089238,138,996Changes in the provision for bad debts of other receivables are as follows:

Beginning balance

Provision in thecurrent year

Reversal in thecurrent year

Write-off in thecurrent year

Ending balanceYear 2018377,838,8416,603,888(150,327,208)-234,115,521

Year 2018Book balance Provision for bad debtsAmountProportion (%)AmountProportion of provision (%)Accounts receivables with individually signicantamount and individual provision for bad debts

218,557,89316209,985,64596Accounts receivable with provision for bad debtsaccrued by credit risk features portfolio

- Security deposit (excluding quality guaranteedeposit)

457,905,94433--- Employee borrowings and reserve funds87,338,6946--Others603,319,057448,100,5941Accounts receivables with individuallyinsignicant amount and individual provision forbad debts

16,029,282116,029,2821001,383,150,870100234,115,521

As at December 31, 2018, other receivables with individually signicant amount and individual provision for bad debtsare as follows:

Book balanceProvision for bad debtsProportion of provision%Reason for provisionOther receivables 1164,124,678164,124,678100Counterparty nancial shortageOther receivables 254,433,21545,860,96784Contract dispute

218,557,893209,985,64596

As at December 31, 2018, other receivables with the provisions for bad debt made by aging analysis method are asfollows:

Year 2018Book balanceProvision for bad debtsAmountProportion (%)AmountWithin 6 months592,643,053--7 - 12 months1,630,497116,306

Year 2018Book balanceProvision for bad debtsAmountProportion (%)Amount1 - 2 years790,42615118,5642 - 3 years110,5923033,1783 - 4 years 348,73550174,3674 to 5 years150,30475112,729Over 5 years7,645,4501007,645,450 603,319,057 8,100,594As at December 31, 2018, other receivables with individually insignicant amount and individual provision for bad debtsare as follows:

Book balanceProvision for bad debts

Proportion ofprovision%

Reason for provisionOther receivables 14,214,6424,214,642100Bankruptcy of the opposite sideOther receivables 23,037,0423,037,042100Contract cancellationOther receivables 31,692,7651,692,765100Contract cancellationOther receivables 41,539,6001,539,600100Contract cancellationOther receivables 51,170,2821,170,282100Contract cancellationOthers4,374,9514,374,951100Contract cancellation

16,029,28216,029,282As at December 31, 2019, top ve other receivables are as follows:

Endingbalance

Proportion in thetotal balance of otherreceivables(%)

NatureAging

Balance of provisionfor bad debts at theend of the yearOther receivables 1164,124,67812Secured repayment2 - 3 years164,124,678Other receivables 275,500,0005Performance bond1-2 years/ 2-3 years -Other receivables 354,433,2154Advance payment3 - 4 years52,096,596Other receivables 448,615,6393Performance bond2 - 3 years -Other receivables 537,741,8783

Customs-relatedsecurity deposit

Within 1 year-380,415,41027 216,221,274As at December 31, 2018, top ve other receivables are as follows:

Endingbalance

Proportion in thetotal balance of other

receivables(%)

NatureAging

Balance of provisionfor bad debts at the

end of the yearOther receivables 1176,800,00013Performance bond 1 - 2 years -Other receivables 2164,124,67812Secured repayment1 - 2 years164,124,678Other receivables 375,500,0005Performance bond

Within 1 year/ 1 - 2years

-Other receivables 463,341,5365

Customs-relatedsecurity deposit

Within 1 year-Other receivables 554,433,2154Advance payment2 - 3 years 45,860,967

534,199,42939 209,985,645

9 Inventories

Year 2019Year 2018Book balance

Provision fordepreciation

Book valueBook balance

Provision fordepreciation

Book valueRaw materials and outsourcedparts and components

3,370,311,93176,456,9713,293,854,9602,834,989,50798,418,5592,736,570,948Goods in process5,907,300,381644,261,4535,263,038,9287,141,481,8611,082,734,6876,058,747,174Stock commodities4,357,692-4,357,6927,717,820-7,717,820

9,281,970,004720,718,4248,561,251,5809,984,189,1881,181,153,2468,803,035,942

The goods in process of the Group are marine heavy equipment products and spare parts that have been underconstruction with no sales orders signed.Changes in the provision for inventory depreciation are as follows:

Year 2019

Decrease in the current yearAmount at the beginningof the current year

Provision in thecurrent year

Reversal or write-offEnding balanceRaw materials and outsourced partsand components

98,418,5595,028,021(26,989,609)76,456,971Goods in process1,082,734,687162,242,348(600,715,582)644,261,453

1,181,153,246167,270,369(627,705,191)720,718,424

Year 2018

Decrease in the current yearAmount at the beginningof the current year

Provision in thecurrent year

Reversal or write-offEnding balanceRaw materials and outsourced partsand components

78,519,21455,128,654(35,229,309)98,418,559Goods in process1,516,893,86942,157,991(476,317,173)1,082,734,687Stock commodities11,153,985-(11,153,985)-

1,606,567,06897,286,645(522,700,467)1,181,153,246Provision for inventory depreciation is as follows:

Specic basis for determination of net

realizable values

Reasons for provision for depreciation ofinventories reversed or written-off in the

current yearRaw materials and outsourcedparts and components

Product price fall results in raw materials andoutsourced parts and components Differencebetween the net realizable value and its book value

Value recovery or external salesGoods in process

Difference between the net realizable value and the

book value of goods in process

Value recovery10 Outstanding payments for construction completed / Amount settled for uncompleted workOutstanding payments for construction completed

Year 2019Year 2018Accumulatively incurred costs60,202,923,50252,716,364,109Plus: Gross prot accumulatively recognized7,212,427,7314,645,085,079

Year 2019Year 2018Less: Accumulative settled payment 54,922,301,01045,104,303,070Estimated contract losses accumulatively recognized58,891,599202,565,726 12,434,158,62412,054,580,392

Amount settled for uncompleted work

Year 2019Year 2018Accumulative settled payment15,658,827,12310,482,414,050Less: Gross prot accumulatively recognized799,740,462838,321,038Accumulatively incurred costs13,230,003,2177,719,913,531Plus: Estimated contract losses accumulatively recognized50,867,43565,381,406

1,679,950,8791,989,560,887Estimated contract losses

Year 2019

Beginningbalance

Increase in thecurrent year

Decrease in thecurrent year

Ending balanceOutstanding payments for constructioncompleted

202,565,72696,978,421(240,652,548)58,891,599Amount settled for uncompleted work65,381,40652,327,602(66,841,573)50,867,435 267,947,132149,306,023(307,494,121)109,759,034

Year 2018

Beginningbalance

Increase in thecurrent year

Decrease in thecurrent year

Ending balanceOutstanding payments for constructioncompleted

167,373,950211,730,653(176,538,877)202,565,726Amount settled for uncompleted work122,353,72466,003,010(122,975,328)65,381,406 289,727,674277,733,663(299,514,205)267,947,132As at December 31, 2019, the total contract amount of the construction contract still under construction (excluding VAT)was about RMB 28,553,084,908 (as at December 31, 2018: RMB 31,234,014,562).Total amount of possible penalties for failure to fulll the obligations as contracted:

Year 2019Year 2018Valid letter of guarantee signed by the bank11,500,477,84112,425,695,774Letter of guarantee not signed by the bank7,293,181,2425,601,715,384 18,793,659,08318,027,411,15811 Non-current assets maturing within one year

Year 2019Year 2018ong-term receivables maturing within one year (See Note V (14)1,313,203,581894,638,42412 Other current assets

Year 2019Year 2018Input tax to be deducted704,526,2881,145,606,901Prepaid income tax15,657,2866,869,538 720,183,5741,152,476,439

13 Available-for-sale nancial assets (only applicable in 2018)

Year 2018Book balance

Provision forimpairment

Book valueAvailable-for-sale equity instrumentsMeasured at fair value1,171,539,394-1,171,539,394Measured at cost72,994,16030,000,00042,994,160

1,244,533,55430,000,0001,214,533,554Available-for-sale nancial assets measured at fair value:

Year 2018Cost of available-for-sale equity instruments937,641,194Changes in fair value accumulatively included in other comprehensive income233,898,200Fair value1,171,539,394

(i) As at December 31, 2018, the Group held 5.9% of equity of Jiangxi Huawu Brake Co., Ltd., and the investment costsamounted to RMB 11,071,606.The fair value of the available-for-sale equity instruments shall be determined in accordance with the closing price ofthe last trading day of the Shenzhen Stock Exchange in the year. As at December 31, 2018, the Company accumulativelyrecognized the income from the available-for-sale equity instruments amounting to RMB 91,091,695 which would be includedin other comprehensive income.(ii) As at December 31, 2018, the Group held 1.59% of equity of Qingdao Port International Co., Ltd., and the investmentcosts amounted to RMB 308,515,588.The fair value of the available-for-sale equity instruments shall be determined in accordance with the closing price ofthe last trading day of the Stock Exchange of Hong Kong in the year.As at December 31, 2018, the Company accumulativelyrecognized the income from the available-for-sale equity instruments amounting to RMB 168,197,665 which would beincluded in other comprehensive income.(iii) As at December 31, 2018, the Group held 1.40% of equity of CRSC and the investment costs amounted to RMB617,854,000.The fair value of the available-for-sale equity instruments shall be determined in accordance with the closing price of thelast trading day of the Stock Exchange of Hong Kong in the year. As at December 31, 2018, the Company accumulativelyrecognized the losses from the available-for-sale equity instruments amounting to RMB 26,080,952 which would be includedin other comprehensive income.(iv) As at December 31, 2018, the Group held 1.59% of equity of Shenwan Hongyuan Group Co., Ltd. The investmentcosts amounted to RMB 200,000, and the shareholding ratio was less than 0.01%.The fair value of the available-for-sale equity instruments shall be determined in accordance with the closing price ofthe last trading day of the Shenzhen Stock Exchange in the year. As at December 31, 2018, the Company accumulativelyrecognized the income from the available-for-sale equity instruments amounting to RMB 689,792 which would be included inother comprehensive income.Available-for-sale nancial assets measured at cost:

Year 2018

Book balanceAt the beginningof the year

Increase in the

current year

Decrease in thecurrent year

At the end ofthe year

Shareholdingratio (%)

Cash dividends inthe current year21st Century Science and TechnologyInvestment Co., Ltd.

30,000,000--30,000,0008.96-CCCC Highway Bridges National EngineeringResearch Centre Co., Ltd.

13,000,000--13,000,00010-

Book balanceAt the beginningof the year

Increase in thecurrent year

Decrease in the

current year

At the end of

the year

Shareholding

ratio (%)

Cash dividends inthe current yearCCCC National Engineering Research Center ofDredging Technology and Equipment Co., Ltd.

6,400,000--6,400,0003.2-Shanghai Zhenhua Gangkou Machine (Group)Longchang Lifting Equipment Co., Ltd.

800,000--800,00010-Shanghai Zhenhua Port Machinery (Group)Shenyang Elevator Co., Ltd.

1,500,000--1,500,00010-ZMPC Ningbo Transmission Machinery Co.,Ltd.

1,296,000--1,296,00010-Hunan Fengri Power & Electric Co., Ltd.19,998,160--19,998,1606.38-

72,994,160--72,994,160 -Available-for-sale equity instruments -Provision for impairment21st Century Science and TechnologyInvestment Co., Ltd.

(30,000,000)--(30,000,000) -

42,994,160--42,994,160 -The available-for-sale nancial assets measured at cost are mainly non-listed equity investments held by the Group.These investments have no active market quotes and their fair value estimates vary widely. The various probabilities used todetermine fair value estimates cannot be reasonably determined. Therefore, the fair value cannot be measured reliably. TheGroup has no plans to dispose of these investments.

14 Long-term receivables

Year 2019Year 2018Receivables from “Building – Transfer” project- Principal6,140,109,7485,742,499,069- Interest receivable349,937,720273,527,110Accounts receivable from the projects of collectionof payment by installment

50,884,53366,953,3346,540,932,0016,082,979,513Less: Long-term receivables maturing within oneyear (Note V(11)

1,313,203,581894,638,424 5,227,728,4205,188,341,089As at December 31, 2019, the account receivable from “Building – Transfer” project was the principal invested in above“Building– Transfer” project by the Group, and the amount of interest receivable was the nancing return recognized basedon the contract.As at December 31, 2019, the long-term accounts receivable were RMB 4,482,230,928 (as at December 31, 2018: RMB3,850,867,673), which had been pledged to the bank as the guarantee for the long-term borrowings of RMB 1,420,127,942 (asat December 31, 2018: Long-term borrowings of RMB 1,549,240,000). Please refer to Note VII (35(ii)).Aging analysis of long-term receivable is as follows:

Year 2019Year 2018Within 1 year1,189,304,3571,660,580,8131- 2 years1,633,251,8032,057,388,7382- 3 years1,996,302,1101,829,854,335Over 3 years1,722,073,731535,155,627

Year 2019Year 2018Sub-total6,540,932,0016,082,979,513Less: Long-term receivables maturing within one year1,313,203,581894,638,424

5,227,728,4205,188,341,08915 Long-term equity investments

Year 2019Year 2018Joint ventures312,812,059287,691,938Associates2,560,861,6862,488,109,822

2,873,673,7452,775,801,760

Joint ventures:

Year 2019

Increase/decrease in the current yearBeginningbalance

Additionalinvestment

Reducedinvestment

Prot or loss oninvestments underthe equity method

Cash dividendsdeclared to bedistributed

Endingbalance

Provision forimpairment at theend of the yearJiangsu Longyuan ZhenhuaMarine Engineering Co., Ltd

244,265,213--16,615,440-260,880,653-CCCC Tianhe Xi’an EquipmentManufacturing Co., Ltd.

37,905,482--(1,735,203)-36,170,279-ZPMC Mediterranean LimanMakinalari Ticaret Anonim Sirketi

4,774,543--(1,039,354)-3,735,189-ZPMC-OTL MARINECONTRACTOR LIMITED (iv)

-------Zhenhua Marine Energy (HK)Co., Ltd. (i)

-------Cranetech Global Sdn.Bnd.(ii)

746,700----746,700CCCC Nanjing TrafcEngineering Management Co.,Ltd. (v)

-9,000,000-3,351,628(1,072,390)11,279,238-287,691,9389,000,000-17,192,511(1,072,390)312,812,059-Year 2018

Increase/decrease in the current yearBeginning

balance

Additionalinvestment

Reducedinvestment

Prot or loss oninvestments underthe equity method

Endingbalance

Provision forimpairmentat the end of the yearJiangsu Longyuan ZhenhuaMarine Engineering Co., Ltd

231,309,282--12,955,931244,265,213-CCCC Tianhe Xi’an EquipmentManufacturing Co., Ltd.

29,820,34710,000,000 -(1,914,865)37,905,482-ZPMC Mediterranean LimanMakinalari Ticaret Anonim Sirketi

3,775,146--999,3974,774,543-ZPMC-OTL MARINECONTRACTOR LIMITED

2,976,740--(2,976,740)--Zhenhua Marine Energy (HK)Co., Ltd. (i)

------

Increase/decrease in the current yearBeginningbalance

Additionalinvestment

Reducedinvestment

Prot or loss oninvestments underthe equity method

Endingbalance

Provision for

impairmentat the end of the yearCranetech Global Sdn. Bnd.(ii)629,241--117,459746,700-

268,510,75610,000,000-9,181,182287,691,938-(I) On May 5, 2014, the subsidiary of the Company and the partner invested to establish Zhenhua Marine Energy(Hong Kong) Co., Ltd (Zhenhua Marine Energy). The registered capital is USD 5,969,998. The subsidiary of the Companycontributed USD 3,044,699 with the shareholding ratio of 51%. Zhenhua Marine Energy focused on the vessel transportationbusiness. Based on the regulations of the shareholder agreement, the important events of such company shall be agreedby at least 75% shareholders via voting. Hence, the Group has no control right but jointly controls Zhenhua Marine Energytogether with the partner.(ii) On July 30, 2015, the subsidiary of the Company and the partner jointly invested to establish Cranetech GlobalSdn. Bhd. The registered capital is MYR 1,000,000; the subsidiary of the Company contributed MYR 499,999 with theshareholding ratio of 49.99%. The company focused on the spare parts sales. Based on the regulations of the shareholderagreement, the important events of the company shall be agreed by both parties. Therefore, the Group controls the companytogether with the partner.(iii) On May 5, 2017, the subsidiary of the Company and the partner jointly invested and established CCCC TianheXi’an Equipment Manufacturing Co., Ltd. The registered capital of the company is RMB 300 million. The subsidiary of theCompany contributed RMB 3 million with the shareholding ratio of 50%. The company is mainly engaged in the machinerymanufacturing business of shield machine. Based on the regulations of the shareholder agreement, the important events ofthe company shall be agreed by both parties. Therefore, the Group controls the company together with the partner.(iv) On November 22, 2017, the Company sold 20% equity of its former subsidiary ZPMC-OTL MARINE CONTRACTORLIMITED at the price of USD 400,000. After change, the registered capital of the company was USD 2,000,000, andthe shareholding ratio was 50%. The company is mainly engaged in shipping business. Based on the regulations of theshareholder agreement, the important events of the company shall be agreed by both parties. Therefore, the Group controlsthe company together with the partner.(v) In August 2016, the subsidiary of the Company and the partner invested and established CCCC Nanjing TrafcEngineering Management Co., Ltd. The registered capital was RMB 50,000,000 and the shareholding ratio was 45%.The subsidiary of the Company contributed RMB 9,000,000 in CCCC Nanjing Trafc Engineering Management Co., Ltd.according to the subscription ratio. Based on the regulations of the shareholder agreement, the important events of thecompany shall be agreed by both parties. Therefore, the Group controls the company together with the partner.Associates:

Year 2019

Increase/decrease in the current yearBalance atthe end of the

last year

Changes inaccountingpolicies

Beginningbalance

Additionalinvestment

Prot or losson investmentsunder the equitymethod

Adjustmentto othercomprehensiveincome

Cashdividendsdeclared tobe distributed

Endingbalance

Provision forimpairment atthe end of theyearCCCC Financial LeasingCo., Ltd.(Formerly known as:

CCCC Financial LeasingCo.,Ltd.) (i)

1,721,445,354(15,525,235)1,705,920,119-89,222,324310,435(9,750,000)1,785,702,878-CCCC Estate Yixing Co., Ltd.180,652,673-180,652,673-3,007,868--183,660,541-CCCC South AmericanRegional Company SARL (ii)

191,064,983-191,064,983-(1,127,404)(3,258,739)-186,678,840-China CommunicationsConstruction USA Inc.(iii)

61,722,121-61,722,121-(1,945,770)943,598-60,719,949-CCCC Marine Engineering &Technology Research CenterCo., Ltd.

16,252,274-16,252,274-478,530--16,730,804-ZPMC Changzhou CoatingsCo., Ltd.

16,115,277-16,115,277-1,520,000--17,635,277-

Increase/decrease in the current yearBalance atthe end of thelast year

Changes inaccountingpolicies

Beginningbalance

Additionalinvestment

Prot or losson investmentsunder the equitymethod

Adjustmentto othercomprehensive

income

Cashdividendsdeclared tobe distributed

Endingbalance

Provision forimpairment atthe end of theyearZPMC Southeast AsiaPte. Ltd

1,401,639-1,401,639-268,683--1,670,322-CCCC YanchengConstruction andDevelopment Co.,Ltd. (iv)

289,380,523-289,380,523-385,719--289,766,242-Suzhou Chuanglian ElectricDrive Co.,Ltd.

10,074,978-10,074,978-1,866,429--11,941,407-Shanghai Ocean EngineeringEquipment ManufacturingInnovation Center Co., Ltd. (v)

---6,500,000(144,574)--6,355,426-2,488,109,822(15,525,235)2,472,584,5876,500,00093,531,805(2,004,706)(9,750,000)2,560,861,686-

Year 2018

Increase/decrease in the current yearBeginningbalance

Increase ininvestment

Prot or losson investmentsunder the equitymethod

Adjustmentto othercomprehensiveincome

Cashdividendsdeclared to bedistributed

Endingbalance

Provision forimpairment atthe end of theyearCCCC Financial Leasing Co.,Ltd. (i)

1,678,550,583-87,246,932647,839(45,000,000)1,721,445,354-CCCC Estate Yixing Co., Ltd.178,099,707-2,552,966--180,652,673-CCCC South AmericanRegional Company SARL (ii)

96,195,38799,912,9763,288,529(8,331,909)-191,064,983-China CommunicationsConstruction USA Inc. (iii)

67,230,450-(8,536,5683,028,239-61,722,121-CCCC Marine Engineering &Technology Research CenterCo., Ltd.

15,849,544-402,730--16,252,274-ZPMC Changzhou CoatingsCo., Ltd.

15,786,438-1,191,077-(862,238)16,115,277-ZPMC Southeast Asia Pte. Ltd247,656-1,153,983--1,401,639-CCCC Yancheng Constructionand Development Co.Ltd. (iv)

-289,050,000330,523--289,380,523-Suzhou Chuanglian ElectricDrive Co.,Ltd.

-10,000,00074,978--10,074,978-2,051,959,765398,962,97687,705,150(4,655,831)(45,862,238)2,488,109,822-(i) On May 31, 2016, the Company and other shareholders increased the capital amounting to RMB 420,000,000 toCCCC Financial Leasing Co., Ltd. in the same proportion. After the capital increase, the investment costs of the Company toCCCC Financial Leasing Co., Ltd. Increased to RMB 1,500,000,000 with the unchanged shareholding ratio of 30%.(ii) On December 15, 2016, the Company invested USD 16,480,000 (equivalent to RMB 114,321,760) to purchase theshares of CCCC South American Regional Company SARL. The registered capital was USD 103,000,000. The Companyheld 16% of the equity. The company was mainly engaged in port construction business. Based on the related regulationsof the Articles of Association of such company, the Company had the right to designate one director to that company andimplement signicant impact to that company. On October 31, 2018, the Company increased the capital to CCCC SouthAmerican Regional Company SARL by USD 14,489,171, equivalent to RMB 99,912,976. After the capital increase, theinvestment costs in CCCC South American Regional Company SARL by the Company increased to RMB 214,234,736 andthe shareholding ratio of the Company was changed to 17%.(iii) On October 8, 2015, the Company invested to establish China Communications Construction USA Inc. The

registered capital is USD 50,000,000, USD 12,000,000 of which was contributed by the Company, equivalent to RMB76,206,000. The shareholding ratio of the Company is 24%. The company is mainly engaged in port construction business.(iv) On October 16, 2018, the Company invested in CCCC Yancheng Construction & Development Co., Ltd to purchaseit shares.The registered capital of the company was RMB 1,156,200,000. The Company contributed RMB 289,050,000 with theshareholding ratio of 25%. The company was mainly engaged in the engineering construction.(v) On September 10, 2019, the Company invested RMB 6,500,000 in Shanghai Ocean Engineering EquipmentManufacturing Innovation Center Co., Ltd. to purchase its shares. The registered capital of the company was RMB72,500,000. The shareholding ratio of the Company was 8.97%. The company was mainly engaged in the marineengineering technological development business.16 Other equity instrument investment (only applicable in 2019)

Cost

Changes in fairvalueaccumulativelyincluded in othercomprehensive

income

Fair value

Dividend income in the current

year

Reasons for nancial assetsdesignated to be measuredat fair value through othercomprehensive incomeEquity instrumentsderecognized in thecurrent year

Equityinstrumentsstill heldHunan Fengri Power & ElectricCo., Ltd.

19,998,1604,350,52924,348,689--

Strategic investment, long-term holdingCCCC Highway Bridges NationalEngineering Research Centre Co.,Ltd.

13,000,0004,649,13617,649,136--

Strategic investment, long-term holdingCCCC National Engineering ResearchCenter of Dredging Technology andEquipment Co.,Ltd.

6,400,0002,605,3789,005,378--

Strategic investment, long-term holdingShanghai Zhenhua Port Machinery(Group) Shenyang Elevator Co., Ltd.

1,500,0001,365,6642,865,664--

Strategic investment, long-term holdingZMPC Ningbo TransmissionMachinery Co., Ltd.

1,296,0005,945,6107,241,610--

Strategic investment, long-term holdingShanghai Zhenhua GangkouMachine (Group) LongchangLifting Equipment Co., Ltd.

800,00070,791870,791--

Strategic investment, long-term holding21st Century Science andTechnology Investment Co., Ltd.

30,000,000(30,000,000)---

Strategic investment, long-term holdingTotal72,994,160(11,012,892)61,981,268--17 Investment propertiesThe Company carries out subsequent measurement of investment properties by using the cost method:

Year 2019

Buildings and constructionsLand use rightTotalOriginal priceBeginning and ending balance397,820,689209,845,794607,666,483Accumulative depreciation and amortizationBeginning balance110,093,61260,812,240170,905,852Provision12,964,3035,370,79518,335,098Ending balance123,057,91566,183,035189,240,950Book valueAt the end of the year274,762,774143,662,759418,425,533At the beginning of the year287,727,077149,033,554436,760,631

Year 2018

Buildings and constructionsLand use rightTotalOriginal priceBeginning and ending balance397,820,689209,845,794607,666,483Accumulative depreciation and amortizationBeginning balance97,115,18455,487,576152,602,760Provision12,978,4285,324,66418,303,092Ending balance110,093,61260,812,240170,905,852Book valueAt the end of the year287,727,077149,033,554436,760,631At the beginning of the year300,705,505154,358,218455,063,723

18 Fixed assetsYear 2019

Buildings andconstructions

Machinery

equipment

Ofce and electronicequipment

Transportationfacilities(Excluding ship)

ShipTotalOriginal priceBeginning balance11,666,113,4388,134,429,365257,492,955265,571,67711,123,157,72031,446,765,155Purchase6,113,383222,848,05725,019,7596,054,717747,381,3001,007,417,216Transferred from construction inprogress and others (Remark 1)

78,745,281304,777,4491,132,595-2,787,417,6293,172,072,954Disposal or scrapping(181,654,286)(231,168,045)(12,856,990)(13,249,200)(715,398,559)(1,154,327,080)Fluctuation in foreign exchange rate----51,543,62051,543,620Ending balance11,569,317,8168,430,886,826270,788,319258,377,19413,994,101,71034,523,471,865Accumulated depreciationBeginning balance3,787,393,5625,410,248,288198,187,739182,976,6363,213,226,90012,792,033,125Provision376,129,271351,691,73621,727,67912,631,898446,913,9601,209,094,544Disposal or scrapping(125,189,584)(222,422,246)(11,984,376)(11,316,395)(567,531,735)(938,444,336)Fluctuation in foreign exchange rate----5,821,2335,821,233Ending balance4,038,333,2495,539,517,778207,931,042184,292,1393,098,430,35813,068,504,566Book valueAt the end of the year7,530,984,5672,891,369,04862,857,27774,085,05510,895,671,35221,454,967,299At the beginning of the year7,878,719,8762,724,181,07759,305,21682,595,0417,909,930,82018,654,732,030

Other transfer-in in this year were mainly caused by the drilling platforms and oating cranes originally planned for saleYear 2018

Buildings andconstructions

Machineryequipment

Ofce and electronicequipment

Transportationfacilities (Excludingvessels)

ShipTotalOriginal priceBeginning balance11,675,835,7417,061,236,685248,048,072274,791,26310,251,529,28629,511,441,047Purchase3,081,12332,097,06914,560,5767,843,184698,371,763755,953,715Transferred from construction inprogress

100,290,6511,195,139,530756,662-637,802,1411,933,988,984Business combination not undercommon control

--144,128--144,128Disposal or scrapping(113,094,077)(154,043,919)(6,016,483)(17,062,770)(507,983,782)(798,201,031)Fluctuation in foreign exchange rate----43,438,31243,438,312Ending balance11,666,113,4388,134,429,365257,492,955265,571,67711,123,157,72031,446,765,155

Buildings andconstructions

Machineryequipment

Ofce and electronic

equipment

Transportationfacilities (Excluding

vessels)

ShipTotalAccumulated depreciationBeginning balance3,487,513,5405,152,968,939184,766,115186,449,3203,164,391,52212,176,089,436Provision375,689,195402,382,99518,622,51913,590,086467,117,2121,277,402,007Disposal or scrapping(75,809,173)(145,103,646)(5,200,895)(17,062,770)(413,261,783)(656,438,267)Fluctuation in foreign exchange rate ---(5,020,051)(5,020,051)Ending balance3,787,393,5625,410,248,288198,187,739182,976,6363,213,226,90012,792,033,125Book valueAt the end of the year7,878,719,8762,724,181,07759,305,21682,595,0417,909,930,82018,654,732,030At the beginning of the year8,188,322,2011,908,267,74663,281,95788,341,9437,087,137,76417,335,351,611

As at December 31, 2019, the following xed assets were taken as loan mortgage:

Original priceBook value

BorrowingsNatureAmountMachinery equipment1,387,867,681255,113,376Long-term payables89,262,318Vessel6,634,000,7175,439,133,909Long-term payables 2,161,280,894

8,021,868,3985,694,247,285 2,250,543,212

As at December 31, 2018, the following xed assets were taken as loan mortgage:

Original priceBook valueNatureAmountMachinery equipment1,398,297,681329,796,189Long-term payables258,565,211Vessel5,847,522,3604,940,559,588Long-term payables2,420,668,918

7,245,820,0415,270,355,777 2,679,234,129As at December 31, 2019 and December 31, 2018, the book values of xed assets for operating lease were as follows:

Year 2019Year 2018Machinery equipment783,490,756734,607,031Vessel1,622,945,7981,695,800,485

2,406,436,5542,430,407,516

As at December 31, 2019, the xed assets with pending certicate of title were as follows:

Book valueReasons for pending certicate of titleBuildings and constructions891,790,853

The handling of relevant formalities is still

in process.19 Construction in progress

Year 2019Year 2018Book balance

Provision for

impairment

Book valueBook balance

Provision forimpairment

Book valueInfrastructure construction ofNantong Base

98,623,383-98,623,38397,628,960-97,628,960Infrastructure construction ofChangxing Base

80,973,129-80,973,12945,615,124-45,615,124Large machinery and engineeringequipment of the base underconstruction

4,052,729,743-4,052,729,7432,815,026,280-2,815,026,280Ofce building and ancillary facilities29,401-29,40116,131,833-16,131,833

Year 2019Year 2018Book balance

Provision for

impairment

Book valueBook balance

Provision forimpairment

Book valueShield machine parts project28,416,002-28,416,00210,284,487-10,284,487Infrastructure construction ofNanhui Base

3,061,744-3,061,7443,893,442-3,893,442Large mechanical reconstructionand upgrading project

116,656,486-116,656,48661,888,166-61,888,1664,380,489,888-4,380,489,8883,050,468,292-3,050,468,292Changes of major construction in progress in 2019 are as follows:

Budget

Beginning

balance

Increase inthe currentyear

Transferred intoxed assets inthe current year(Note V(18)

Transferred intointangible assetsin the current year(Note V(20)

EndingbalanceInfrastructure constructionof Nantong Base

7,817,201,77197,628,96059,231,059(58,236,636)-98,623,383Infrastructure constructionof Changxing Base

8,678,930,50045,615,12447,326,206(7,750,995)(4,217,206)80,973,129Large machinery andengineering equipment of thebase under construction

9,995,547,1582,815,026,2801,503,381,406(265,677,943)-4,052,729,743Ofce building and ancillaryfacilities

34,798,37016,131,83313,666,537(29,768,969)-29,401Shield machine parts project140,796,53110,284,48718,759,512(627,997)-28,416,002Infrastructure constructionof Nanhui Base

531,736,4253,893,4424,421,617(5,253,315)-3,061,744Large mechanicalreconstruction andupgrading

1,200,868,71061,888,16682,078,369(27,310,049)-116,656,48628,399,879,4653,050,468,2921,728,864,706(394,625,904)(4,217,206)4,380,489,888Changes of major construction in progress in 2018 are as follows:

Budget

Beginningbalance

Increase inthe currentyear

Transferred intoxed assets inthe current year(Note V(18)

Transferred intointangible assetsin the current year(Note V(20)

EndingbalanceInfrastructure construction ofNantong Base

7,745,549,47153,508,75562,113,177(17,992,972)-97,628,960Infrastructure construction ofChangxing Base

8,645,540,00030,242,21235,225,697(18,888,804)(963,981)45,615,124Large machinery andengineering equipment of thebase under construction

9,086,660,6311,123,208,0282,955,472,032(1,263,653,780)-2,815,026,280Ofce building and ancillaryfacilities

23,500,000-16,131,833--16,131,833Shield machine parts project130,587,50074,507,3008,494,856(72,717,669)-10,284,487Infrastructure construction ofNanhui Base

504,500,0003,893,442443,966(443,966)-3,893,442Large mechanicalreconstruction and upgrading

830,025,368603,786,27218,393,687(560,291,793)-61,888,16626,966,362,9701,889,146,0093,096,275,248(1,933,988,984)(963,981)3,050,468,292

Changes of major construction in progress in 2019 are as follows:

Proportionof projectinvestments inbudget %

Workprogress(Remark 1) %

Cumulativeamount ofinterestcapitalized

Including:

capitalization ofthe interest inthe current year

Capitalization rate

for the interestin the current year

Fund sourceInfrastructure construction ofNantong Base

8484---

Self-ownedfundsInfrastructure construction ofChangxing Base

838323,531,836--

Self-owned

funds, BankloanLarge machinery andengineering equipment of thebase under construction

8686159,838,01044,551,1833.82

Self-owned

funds, BankloanOfce building and ancillaryfacilities

9999---

Self-owned

fundsShield machine parts project86865,762,616--

Self-ownedfunds, Bank

loanInfrastructure construction ofNanhui Base

8787---

Self-owned

fundsLarge mechanicalreconstruction and upgrading

6767---

Self-owned

funds189,132,46244,551,183Changes of major construction in progress in 2018 are as follows:

Proportionof projectinvestments inbudget %

Workprogress(Remark 1) %

Accumulatedcapitalizationamount ofinterest

Including:

capitalization ofthe interest inthe current year

Capitalization ratefor the interest ofthe current year %

Fund sourceInfrastructure construction ofNantong Base

8484---

Self-ownedfundsInfrastructure construction ofChangxing Base

838323,531,836--

Self-owned

funds, BankloanLarge machinery andengineering equipment of thebase under construction

7878115,286,82718,794,1223.82

Self-owned

funds, BankloanOfce building and ancillaryfacilities

9090---

Self-ownedfundsShield machine parts project79795,762,616--

Self-owned

funds, BankloanInfrastructure construction ofNanhui Base

9191---

Self-ownedfundsLarge mechanicalreconstruction and upgrading

8787---

Self-ownedfunds144,581,27918,794,122Remark 1: The project progress is estimated on the basis of budget and cumulative investment.20 Intangible assetsYear 2019

Land use rightSoftware use feeProprietary technologyTotalOriginal priceBeginning balance4,297,078,82857,979,69165,201,8104,420,260,329

Land use rightSoftware use feeProprietary technologyTotalTransferred fromconstruction in progress

-4,217,206-4,217,206Purchase-13,466,87094,36113,561,231Sale and scrapping-(44,156)-(44,156)Ending balance4,297,078,82875,619,61165,296,1714,437,994,610Accumulated amortizationBeginning balance729,735,38045,772,07856,340,139831,847,597Provision88,358,4635,509,0265,773,47199,640,960Reversal-(35,313)-(35,313)Ending balance818,093,84351,245,79162,113,610931,453,244Book valueAt the end of the year3,478,984,98524,373,8203,182,5613,506,541,366At the beginning of the year3,567,343,44812,207,6138,861,6713,588,412,732Year 2018

Land use rightSoftware use feeProprietary technologyTotalOriginal priceBeginning balance4,297,078,82855,046,83465,201,8104,417,327,472Transferred fromconstruction in progress

-963,981-963,981Purchase-1,968,876-1,968,876Ending balance4,297,078,82857,979,69165,201,8104,420,260,329Accumulated amortizationBeginning balance642,231,14542,451,67249,479,047734,161,864Provision87,504,2353,320,4066,861,09297,685,733Ending balance729,735,38045,772,07856,340,139831,847,597Book valueAt the end of the year3,567,343,44812,207,6138,861,6713,588,412,732At the beginning of the year3,654,847,68312,595,16215,722,7633,683,165,608

In 2019, total technology research and development expenses of the Group amounted to RMB 887,096,178 (2018:

RMB 672,614,073) (Please refer to Note V (50) for details). These technology research and development expenses are notcapitalized. As at December 31, 2019 and December 31, 2018, the intangible assets excluded any capitalized technologyresearch and development expenses.21 Goodwill

Year 2019

Beginning

balance

Increase in the currentyear (Remark 1)

Decrease in the

current year

Ending balanceZPMC Qidong Marine Engineering Co.,Ltd. 149,212,956--149,212,956Verspannen B.V.5,412,807--5,412,807Greenland Heavylift (Hong Kong) Limited111,965,6991,843,472-113,809,171

266,591,4621,843,472-268,434,934

Year 2018

Beginning

balance

Increase in the current

year

Decrease in thecurrent year

Ending balanceZPMC Qidong Marine Engineering Co.,Ltd.149,212,956--149,212,956Verspannen B.V.5,412,807--5,412,807Greenland Heavylift (Hong Kong) Limited110,562,7021,402,997-111,965,699

265,188,4651,402,997-266,591,462Remark 1: The increase in the current year was caused by the translation differences of foreign currency statement.As at December 31, 2019, the Group had no provision for the impairment of goodwill. When the impairment test isconducted, the book value of goodwill is amortized to the asset group portfolio expected to benet from the synergistic effectof business combination.The goodwill acquired through business combination has been distributed to the following asset groups forimpairment test:

? Heavy equipment asset group? Semi-submerged ship transport assets group of Greenland Heavylift (Hongkong) Limited (GHHL)Heavy equipment asset groupThe recoverable amount of heavy equipment asset group is measured based on the ve-year budget approved by themanagement and shall be measured with cash ow forecast method. Cash ow over 5-year period shall be calculated basedon the estimated growth rate.The main assumptions of the future cash ow discount method:

Growth rate during forecast period12.50%-15.43%Perpetual growth rate3%Gross prot rate17.43%-17.97%Discount rate11%GHHL semi-submerged ship transport assets groupThe recoverable amount of GHHL semi-submerged ship transport assets group combination is determined based onthe expected future cash ow of the asset group, and the expected future cash ow is determined according to the cash owforecast based on the transport service contract revenue expected to be obtained within the service life of vessel.The main assumptions of the future cash ow discount method:

Number of customized short-distance and long-distancetransport service contracts expected to be obtained

3 / year / vesselVessel utilization rate of general charter party65%Charter rate of general charter partyUSD 65,000/ dayDiscount rate11%The distributions of the book value of goodwill to asset groups are as follows:

Heavy equipment asset group

GHHL semi-submerged shiptransport assets group

TotalYear 2019Year 2018Year 2019 Year 2018 Year 2019 Year 2018Book amount of goodwill154,625,763154,625,763113,809,171111,965,699268,434,934266,591,462

The perpetual growth rate adopted by management does not exceed the industry's long-term average growth rate.Based on the historical experience and the forecasts of market development, the management determines the budgetgross prot rate and adopts the pretax interest rate which can reect the specic risk of relevant asset group portfolio as thediscount rate. The above assumptions are used to analyze the recoverable amount of the asset group portfolio.

22 Long-term deferred expensesYear 2019

Beginningbalance

Increase in thecurrent year

Amortization inthe current year

Other decreasesEnding balanceImprovement expenditure of xedassets under operating lease

5,112,664-(3,668,028)-1,444,636Year 2018

Beginningbalance

Increase in thecurrent year

Amortization inthe current year

Other decreasesEnding balanceImprovement expenditure of xedassets under operating lease

7,764,5011,654,070(4,305,907)-5,112,66423 Deferred income tax assets/liabilitiesDeferred income tax assets before offsetting:

Year 2019Year 2018Deductible temporarydifferences

Deferred income tax

assets

Deductible temporarydifferences

Deferred income taxassetsProvision for impairment of assets2,668,138,888402,758,0063,164,854,396477,266,865Unrealized prots of internaltransactions

60,082,11412,012,332110,927,56017,314,143Estimated liabilities470,724,24770,608,637424,901,99463,735,299Wages and salaries unpaid28,462,1824,269,32727,975,2074,196,281Interest unpaid37,098,3435,564,75190,106,45913,515,968Deferred income63,738,1359,560,72073,819,77611,072,966Deductible losses384,592,11257,688,817--Changes in fair value of nancialliabilities held for trading

7,312,7411,096,911-- 3,720,148,762563,559,5013,892,585,392587,101,522Deferred income tax liabilities before offsetting:

Year 2019Year 2018Taxable temporarydifferences

Deferred income taxliabilities

Taxable temporarydifferences

Deferred income taxliabilitiesDepreciation of xed assets535,071,99188,286,880692,627,602114,283,553Change from fair value of nancialassets measured at fair valuethrough current prot or loss

--44,481,8066,672,271Changes in fair value of nancialassets held for trading

373,507,09557,055,388--Changes in fair value of available-for-sale nancial assets

--233,898,20037,285,461Changes in fair value of otherequity instrument

18,987,1082,848,066--Asset evaluation increment frombusiness combination not undercommon control

126,855,06319,028,259143,843,95921,576,5941,054,421,257167,218,5931,114,851,567179,817,879

Deferred income tax assets and deferred income tax liabilities presented by net amount after offset as follows:

Year 2019Year 2018Offset amountBalance after offsetOffset amountBalance after offsetDeferred income tax assets77,361,866486,197,63547,416,597539,684,925Deferred income tax liabilities77,361,86689,856,72747,416,597132,401,282Deductible temporary differences and deductible losses from the unrecognized deferred income tax assets arepresented as follows:

Year 2019Year 2018Deductible temporary differences222,990,045203,797,399Deductible losses1,671,758,7521,627,279,485

1,894,748,7971,831,076,884The deductible losses on the unrecognized deferred income tax assets will become due or reversed in the following years:

Year 2019Year 2018Year 2019-304,056,031Year 2020368,426,916368,426,916Year 202199,087,307105,576,931Year 2022252,840,194272,388,360Year 2023576,831,247576,831,247Year 2024374,573,088-

1,671,758,7521,627,279,48524 Other non-current assets

Year 2019Year 2018Advance payment for vessels132,563,749142,126,354Advance payment for ofce buildings28,773,53828,666,235

161,337,287170,792,58925 Provision for impairment of assetsYear 2019

Beginningbalance

Adjustmentsfor changesin accounting

policies

Balance at thebeginning of the

current year

Provision inthe current

year

Decrease in the current year

EndingbalanceReversalWrite-offProvision for bad debts1,763,423,742113,405,4971,876,829,239213,696,436(174,934,843)-1,915,590,832Including: accountsreceivable

1,529,308,221111,908,3011,641,216,522206,632,546(170,397,232)-1,677,451,836 Other receivables234,115,5211,497,196235,612,7177,063,890(4,537,611)-238,138,996Estimated contractlosses

267,947,132-267,947,132149,306,023(25,192,263)(282,301,858)109,759,034Provisionfor inventorydepreciation

1,181,153,246-1,181,153,246167,270,369(238,889,845)(388,815,346)720,718,424Provision forimpairment ofavailable-for-sale

30,000,000(30,000,000)-----

3,242,524,12083,405,4973,325,929,617530,272,828(439,016,951)(671,117,204)2,746,068,290

Year 2018

Beginning balance

Provision in thecurrent year

Decrease in the current year

Ending balanceReversalWrite-offProvision for bad debts1,713,240,621401,610,953(351,427,832)-1,763,423,742Including: accounts receivable1,335,401,780395,007,065(201,100,624)-1,529,308,221 Other receivables377,838,8416,603,888(150,327,208)-234,115,521Estimated contract losses289,727,674277,733,663(23,164,190)(276,350,015)267,947,132Provision for inventory depreciation1,606,567,06897,286,645(414,615,461)(108,085,006)1,181,153,246Provision for impairment ofavailable-for-sale nancial assets

30,000,000---30,000,000 3,639,535,363776,631,261(789,207,483)(384,435,021)3,242,524,120

26 Short-term borrowings

Year 2019Year 2018Fiduciary borrowings20,638,025,70915,295,290,287Guaranteed borrowings (i)1,363,293,6711,259,397,200

22,001,319,38016,554,687,487As at December 31, 2019, the annual interest rate on the aforesaid borrowings ranges from 2.7% to 5.66% (as atDecember 31, 2018: 2.9% to 5.87%).(i) As at December 31, 2019, the bank guarantee loan amounting to USD 195,420,669, equivalent to RMB 1,363,293,671(as at December 31, 2018: USD 163,500,000, equivalent to RMB 1,122,133,200) was the bank loans borrowed by thesubsidiary of the Company, which was guaranteed by the letter of guarantee issued by the bank for the Company within thescope of credit.As at December 31, 2019, the Company had no bank guarantee loan (as at December 31, 2018: USD 20,000,000,equivalent to RMB 137,264,000) with joint and several liability repayment guarantee provided by its subsidiaries.27 Financial liabilities held for trading

Year 2019Financial liabilities measured at fair value through the current prot or lossDerivative nancial liabilities7,312,741As at December 31, 2019, the derivative nancial assets held by the Company were the forward exchange contracts,which was signed but not yet due by and between the Company and the banks and could change EUR with RMB. Thecontract would due from February 7, 2020 to March 6, 2020.The gains or losses from the evaluation of the fair value of the above-mentioned forward foreign exchange contracts atthe end of the year was the amount conrmed by the trading banks.28 Notes payable

Year 2019Year 2018Bank acceptance bill3,420,945,4512,732,404,222

29 Accounts payable

Year 2019Year 2018Payables for material purchase and productmanufacturing

7,095,705,9026,556,698,942Quality guarantee deposit payable352,114,025265,219,012Equipment and vessel purchase payables361,370,347132,468,294Infrastructure payables55,685,49777,821,238Port charge payable4,502,5944,662,215

7,869,378,3657,036,869,701Aging analysis of accounts payable is as follows:

Year 2019Year 2018Amount

Proportion in totalamount%

Amount

Proportion in totalamount%Within 1 year6,173,075,498785,178,586,02374Over 1 year1,696,302,867221,858,283,67826

7,869,378,3651007,036,869,701100As at December 31, 2019, the accounts payable aging over 1 year were mainly the payables for imported parts, whichhad not been taken for nal settlement.30 Advances from customers

Year 2019Year 2018Advances from customers for goods653,848,400447,761,752Advances for lease payment169,139,58646,982,622

822,987,986494,744,374

Aging analysis of advances from customers is as follows:

Year 2019Year 2018Amount

Proportion in totalamount%

Amount

Proportion in total

amount%Within 1 year728,030,57088436,464,76488Over 1 year94,957,4161258,279,61012

822,987,986100494,744,374100As at December 31, 2019, the advances from customers with the aging over 1 year mainly included the unsettled salespayments of spare parts for products.31 Employee compensation payable

Year 2019Year 2018Short-term compensation329,928,711309,129,844Post-employment benets (dened contribution plans)49,570982,483 329,978,281310,112,327

Short-term compensation is as follows:

Year 2019

Beginningbalance

Increase in thecurrent year

Decrease in the

current year

Ending balanceSalaries, bonuses, allowances and subsidies273,102,5971,527,933,232(1,507,309,211)293,726,618Employee welfare34,98864,266,078(64,285,529)15,537Social insurance premium549,697133,124,633(133,643,741)30,589Including: medical insurance premium452,960114,399,535(114,826,701)25,794Work-related injury insurance premium56,4306,564,269(6,618,581)2,118Maternity insurance premium40,30712,160,829(12,198,459)2,677Housing provident funds488,787137,294,524(137,762,772)20,539Union expenditures and employee educationexpenses

34,953,77529,084,499(27,902,846)36,135,428Other short-term compensation-14,311,220(14,311,220)- 309,129,8441,906,014,186(1,885,215,319)329,928,711Year 2018

Beginningbalance

Increase in thecurrent year

Decrease in the

current year

Ending balanceSalaries, bonuses, allowances and subsidies237,081,6311,504,565,034(1,468,544,068)273,102,597Employee welfare-60,344,342(60,309,354)34,988Social insurance premium554,452121,121,387(121,126,142)549,697Including: medical insurance premium445,494103,465,704(103,458,238)452,960Work-related injury insurance premium69,3387,133,651(7,146,559)56,430Maternity insurance premium39,62010,522,032(10,521,345)40,307Housing provident funds479,386124,837,764(124,828,363)488,787Union expenditures and employee educationexpenses

34,541,03331,831,526(31,418,784)34,953,775Other short-term compensation110,35810,562,699(10,673,057)- 272,766,8601,853,262,752(1,816,899,768)309,129,844Dened contribution plans are as follows:

Year 2019

Beginningbalance

Increase in the

current year

Decrease in thecurrent year

Ending balanceBasic endowment insurance premium957,289216,613,632(217,522,781)48,140Supplementary endowment insurance premium-87,850,814(87,850,814)-Unemployment insurance premium25,1945,587,230(5,610,994)1,430

982,483310,051,676(310,984,589)49,570Year 2018

Beginningbalance

Increase in the

current year

Decrease in thecurrent year

Ending balanceBasic endowment insurance premium941,529221,794,310(221,778,550)957,289Supplementary endowment insurance premium-81,248,762(81,248,762)-Unemployment insurance premium24,8185,258,521(5,258,145)25,194 966,347308,301,593(308,285,457)982,483

32 Taxes and surcharges payable

Year 2019Year 2018VAT19,182,49643,724,528Enterprise income tax84,488,18181,219,652Individual income tax14,648,5819,390,756Urban maintenance and construction tax445,0321,912,715Education surtax381,5741,624,991Others25,360,87827,092,039 144,506,742164,964,68133 Other payables

Year 2019Year 2018Interest payable-114,397,903Dividends payable31,701,96531,701,965Other payables679,688,031952,480,579 711,389,9961,098,580,447Interest payable

Year 2019Year 2018Interest on borrowings-114,397,903Dividends payable

Year 2019Year 2018CCCC Tianjin Dredging Co., Ltd.25,079,49425,079,494Chuwa Bussan Co. Ltd.6,269,8736,269,873Hong Kong Zhenhua Engineering Co., Ltd.346,005346,005Macau Zhenhua Harbour Construction Co.,Ltd.

6,5936,593 31,701,96531,701,965As at December 31, 2019, the reason for the dividend payable with the aging over 1 year amounting to RMB 31,701,965(as at December 31, 2018: RMB 31,701,965) was that the shareholders of the Company had not requested for actualpayment by the Group.Other payables

Year 2019Year 2018Engineering deposit and quality guaranteedeposit

227,040,148206,589,722Investment section payable to CCCC (i)100,971,833100,971,833Amounts due to related parties77,381,454184,440,322Special payables16,971,821146,470,013Contract advance payment to be returned-129,540,880Others257,322,775184,467,809 679,688,031952,480,579(i) The Group completed the cancellation of a subsidiary in 2011. RMB 25,971,833 in the balance was the investmentliquidation fund payable by the Group and attributable to CCCC who was another shareholder of the subsidiary; meanwhile,the Group completed the merger and acquisition of the subsidiary of CCCC under the common control in 2015, and RMB75,000,000 in the balance was the purchase fund payable by the Group to CCCC.

Aging analysis of other payables is as follows:

Year 2019Year 2018AmountProportion %AmountProportion %Within 1 year501,239,66874703,845,81374Over 1 year178,448,36326248,634,76626

679,688,031100952,480,579100

As at December 31, 2019, the other payables with the aging over 1 year were mainly the investment section payable toCCCC, payable deposit and quality guarantee deposit collected from outsourcing engineering team and payables to related party.34 Non-current liabilities maturing within one year

Year 2019Year 2018Long-term borrowings maturing within one year (See Note V (35)6,533,318,5853,258,154,392Long-term receivables maturing within one year (See Note V (36)754,165,928951,378,118

7,287,484,5134,209,532,510

35 Long-term borrowings

Year 2019Year 2018Fiduciary borrowings 9,837,007,59514,274,414,371Guaranteed borrowings (i) 3,689,523,0342,532,225,280Pledged borrowings (ii) 1,420,127,9421,549,240,000

14,946,658,57118,355,879,651Less: Long-term borrowings maturing within one yearFiduciary borrowings(2,966,074,277)(2,833,064,392)Guaranteed borrowings(3,219,523,034)-Pledged borrowings(347,721,274)(425,090,000)

(6,533,318,585)(3,258,154,392)8,413,339,98615,097,725,259As at December 31, 2019, the annual interest rate on the aforesaid borrowings ranges from 2.95% to 5.46% (as atDecember 31, 2018: 3.90% to 5.13%).(i) As at December 31, 2019, the bank guarantee loan amounting to USD 50,518,682, equivalent to RMB 352,428,432 (asat December 31, 2018: USD 50,400,000, equivalent to RMB 345,905,280), was the bank loan borrowed by the Company'ssubsidiary Shanghai Zhenhua Port Machinery (Hong Kong) Co., Ltd. and the guarantee was provided by the Company. Theinterest shall be paid quarterly and the principal shall be repaid on Aug. 13, 2020.As at December 31, 2019, the bank guarantee loan amounting to USD 195,459,188, equivalent to RMB 1,363,562,387(as at December 31, 2018: USD 100,000,000, equivalent to RMB 686,320,000), was the bank loan borrowed by theCompany. The Company’s subsidiary ZPMC Port Machinery General Equipment Co., Ltd., provided the joint and severalliability repayment guarantee. The interest shall be paid quarterly and the principal shall be repaid on November 12, 2020.As at December 31, 2019, the bank guarantee loan amounting to RMB 1,973,532,215 (as at December 31, 2018: RMB1,500,000,000), was the bank loan borrowed by the Company. The Company’s subsidiary ZPMC Port Machinery GeneralEquipment Co., Ltd., provided the joint and several liability repayment guarantee. The interest shall be paid quarterly. For theprincipal, RMB 1,503,532,215 shall be repaid on September 10, 2020, and RMB 470,000,000 shall be repaid on November10, 2021.(ii) As at December 31, 2019, the total amount of multiple pledged loans amounting to RMB 1,420,127,942(as atDecember 31, 2018: RMB 1,549,240,000) took the long-term accounts receivable of the “building-transfer” project of theGroup as pledge (Note V (14)).The interest shall be paid quarterly, and the principal shall be repaid between December 15, 2020 and December 23,2029 (as at December 31, 2018: the principal shall be repaid between June 30, 2019 and December 31, 2029).

36 Long-term payables

Year 2019Year 2018Leaseback nancing fund (i)2,250,543,2122,679,234,129"Building - transfer” project fund (ii)139,682,457131,402,483Project quality guarantee deposit105,885,895108,202,625Less: Leaseback nancing fund maturedwithin one year (Note V (34))

(754,165,928)(951,378,118)1,741,945,6361,967,461,119

(i) As at December 31, 2019, the long-term payables of RMB 2,250,543,212 (December 31, 2018: RMB 2,679,234,129)were obtained from the vessel with the book value of RMB 5,439,133,909 (as at December 31, 2018: RMB 4,940,559,588)and the mechanical equipment with the book value of RMB 255,113,376 (December 31, 2018: RMB 329,796,189) (NoteV (18)) in leaseback way from the nancial leasing company, with the maturity date from April 11, 2020 to September 24,2031 (December 31, 2018: from April 11, 2020 to February 24, 2028). The Group will pay the leaseback nancing fund onschedule each year to the nancial leasing company in accordance with the contract terms. The Group takes the aboveseries of transactions as mortgage loans for accounting treatment.(ii) The Group and the construction party of “building-transfer” project agreed that part of the project payments would bepaid to the construction party after the nal acceptance of the “building-transfer” project within a certain term.37 Estimated liabilitiesYear 2019

Beginning BalanceIncreaseDecreaseEnding BalanceEstimated after-sale service cost434,362,487289,062,867(242,082,732)481,342,622Product quality guarantee deposit2,032,046134,616(2,166,662)-Others2,658,150--2,658,150 439,052,683289,197,483(244,249,394)484,000,772

Year 2018

Beginning BalanceIncreaseDecreaseEnding BalanceEstimated after-sale service cost376,515,711285,921,532(228,074,756)434,362,487Product quality guarantee deposit514,4621,561,231(43,647)2,032,046Lawsuit compensation85,200,340-(85,200,340)-Others2,658,150--2,658,150 464,888,663287,482,763(313,318,743)439,052,683

38 Deferred incomeYear 2019

Beginning BalanceIncreaseDecreaseEnding BalanceGovernment grants368,795,36165,081,202(73,219,850)360,656,713Land compensation100,500,859-(2,434,993)98,065,866

469,296,22065,081,202(75,654,843)458,722,579Year 2018

Beginning BalanceIncreaseDecreaseEnding BalanceGovernment grants376,238,26896,133,365(103,576,272)368,795,361Land compensation102,935,852-(2,434,993)100,500,859

479,174,12096,133,365(106,011,265)469,296,220

As at December 31, 2019, liability items involved in government grants:

BeginningBalance

Increase

Amount includedin the other income

in this year

Otherchanges

EndingBalanceHoisting and pipe laying ship R&D project92,500,000-(45,050,000)-47,450,000Automated dock R&D project28,050,0009,405,000--37,455,000Floating crane R&D project15,399,400-(2,740,400)-12,659,000Comprehensive standardization of intelligentmanufacturing of marine engineering equipment

17,000,000-(5,300,000)-11,700,000Deep sea drilling ship and auxiliary equipmentresearch project

14,860,000---14,860,000Unmanned driving technology piercing and intelligentgroup control system project

-5,850,000--5,850,000Research and demonstration project of crane boomstructure and its test with low cost and large bearingcapacity at sea

-16,000,000--16,000,000Research and introduction of key technologies forthree-dimensional VOCs observation, traceability andnear-zero emission

-1,600,000--1,600,000Research and application of key technologies forintelligent maintenance system for automatic containerhandling equipment

-3,280,000--3,280,000Architecture design and testing tools development ofthe next generation of intelligent operation platform forautomated container terminals

6,410,0004,800,000--11,210,000Intelligent manufacturing workshop for crane box ofautomated terminal

14,171,796---14,171,79610,000t semi-submerged ship R&D project13,066,667-(560,000)-12,506,667Transportation emplacement system R&D project10,000,000---10,000,000Drilling platform R&D project9,390,000---9,390,000Research and development of large-scale underwaterrobot work-system

8,533,000---8,533,000Manufacturing process optimization R&D project inmarine engineering eld

8,000,000---8,000,000Marine engineering positioning system R&D project6,085,103-(1,612,218)-4,472,885Port outdoor trackless navigation overload project-4,070,000--4,070,000Intelligent transportation system of Automatic GuidedVehicle (AGV)

16,800,000---16,800,000Development and industrialization of large deep watercrane piping ship

5,572,000---5,572,000CCCC DCM ship achievement transformation project807,962-(807,962)--Self-elevating platform central control system6,190,000---6,190,000Finishing intelligent production line of special gearshaft for port machinery

2,560,000---2,560,000Retractable boarding trestle system R&D project4,448,300---4,448,300Intelligent equipment for container yard1,245,000---1,245,000Collaborative innovation in the industrial chain ofcore components for high-end marine engineeringequipment

2,100,000---2,100,000

Beginning

Balance

Increase

Amount includedin the other income

in this year

Otherchanges

EndingBalanceKey technology research project of bottom-supportedoffshore wind power installation platform

12,400,000---12,400,000R&D and application demonstration project for theintelligent coating system of the main structure of largeport machinery

8,000,000---8,000,000Others65,206,13320,076,202(11,074,270)(6,075,000)68,133,065 368,795,36165,081,202(67,144,850)(6,075,000)360,656,713On December 31, 2018, liability items involved in government grants:

BeginningBalance

Increase

Amount includedin the other incomein this year

Otherchanges

EndingBalanceHoisting and pipe laying ship R&D project92,500,000---92,500,000Submarine pipeline laying R&D project41,300,500-(41,300,500)--Automated dock R&D project24,820,0003,430,000-(200,000)28,050,000Floating crane R&D project18,139,800-(2,740,400)-15,399,400Comprehensive standardization of intelligentmanufacturing of marine engineering equipment

17,000,000---17,000,000Deep sea drilling ship and auxiliary equipmentresearch project

14,860,000---14,860,000Drilling package R&D project14,410,000-(8,000,000)-6,410,000Intelligent manufacturing workshop for crane box ofautomated terminal

14,171,796---14,171,79610,000t semi-submerged ship R&D project13,626,667-(560,000)-13,066,667Transportation emplacement system R&D project10,000,000---10,000,000Drilling platform R&D project9,390,000---9,390,000Research and development of large-scaleunderwater robot work-system

8,533,000---8,533,000Manufacturing process optimization R&D project inmarine engineering eld

8,000,000---8,000,000Marine engineering positioning system R&D project7,697,321-(1,612,218)-6,085,103Intelligent transportation system of AutomaticGuided Vehicle (AGV)

6,000,00010,800,000--16,800,000Development and industrialization of large deep watercrane piping ship

5,572,000---5,572,000CCCC DCM ship achievement transformation project4,031,250-(3,223,288)-807,962Self-elevating platform central control system3,810,0002,380,000--6,190,000Finishing intelligent production line of special gearshaft for port machinery

2,560,000---2,560,000Retractable boarding trestle system R&D project2,160,3002,288,000--4,448,300Intelligent equipment for container yard1,445,000-(200,000)-1,245,000Intelligent electric differential traction bridge crane1,122,900-(1,122,900)--Collaborative innovation in the industrial chain ofcore components for high-end marine engineeringequipment

-18,900,000(16,800,000)-2,100,000

BeginningBalance

Increase

Amount includedin the other income

in this year

Otherchanges

EndingBalanceKey technology research project of bottom-supportedoffshore wind power installation platform

-16,000,000(3,600,000)-12,400,000R&D and application demonstration project for theintelligent coating system of the main structure of largeport machinery

-8,000,000--8,000,000Others55,087,73434,335,365(16,741,963)(7,475,003)65,206,133 376,238,26896,133,365(95,901,269)(7,675,003)368,795,361The above government grants are related to income.Other changes in current year are the R&D subsidies allocated to the partner in accordance with the research anddevelopment agreement.Land compensation refers to the land compensation acquired by a subsidiary of the Company, which shall be amortizedover the 50 years’ land use term.

39 Other non-current liabilities

Year 2019Year 2018Output tax to be carried forward376,626,821288,474,696On balance sheet date, the revenue of some construction contracts and interest income of “building-transfer” projectsof the Company had not reached the time point of the VAT liability. In accordance with the requirements of the Provisions onAccounting Treatment of VAT (CK 2016 No. [22]), the Group reclassied the ending credit balance of the item “Taxes andsurcharges payable - Output tax to be carried forward” from “Taxes and surcharges payable” to “Other non-current liabilities”and listed in the balance sheet.40 Share capital

Year 2019

Increase/decreaseBeginning

Balance

New shares

issued

Sharedonation

Conversionof reservesinto share

OthersSub-total

EndingBalanceShares without restrictedconditions

- Ordinary share in RMB3,321,997,661-----3,321,997,661- Foreign invested sharedomestically listed

1,946,355,840-----1,946,355,8405,268,353,501-----5,268,353,501Year 2018

Increase/decreaseBeginningBalance

New sharesissued

Sharedonation

Conversionof reservesinto share

OthersSub-total

EndingBalanceShares without restrictedconditions

- Ordinary share in RMB2,768,331,384--553,666,277-553,666,2773,321,997,661- Foreign invested sharedomestically listed

1,621,963,200--324,392,640-324,392,6401,946,355,8404,390,294,584--878,058,917-878,058,9175,268,353,501

The increase in share capital in 2018 was caused by the implementation of capital increase and allotment scheme bythe Company. Based on the total share capital as at December 31, 2017, 2 shares per 10 shares were transferred to all ofthe shareholders with the capital reserves.41 Capital reservesYear 2019

Beginning BalanceIncreaseDecreaseEnding BalanceShare capital premium4,537,774,553--4,537,774,553Other capital reserves --- Business combination under common control(16,203,111)--(16,203,111)- Purchase of minority interest of subsidiaries(711,345)--(711,345)- Absorption of minority shareholders’ investments bysubsidiaries

-185,934,674-185,934,674- Transfer-in of capital reserves under the original system128,059,561--128,059,561

4,648,919,658185,934,674-4,834,854,332

Year 2018

Beginning BalanceIncreaseDecreaseEnding BalanceShare capital premium5,415,833,470-(878,058,917)4,537,774,553Other capital reserves- Business combination under common control(16,203,111)--(16,203,111)- Purchase of minority interest of subsidiaries(711,345)--(711,345)- Transfer-in of capital reserves under the original system128,059,561--128,059,561 5,526,978,575-(878,058,917)4,648,919,65842 Other comprehensive incomeIn the balance sheet, accumulated balance of other comprehensive income attributable to the parent company:

As at January1, 2018

Increase/decrease

As atDecember 31,

2018

Adjustments forchanges in accountingpolicies

As at January 1,2019

Increase/decrease

As atDecember 31,2019Other comprehensiveincome that cannot bereclassied into prot or loss

- Changes in fair value ofother equity instrumentinvestments

---(19,517,486)(19,517,486)5,656,529(13,860,957)Other comprehensiveincome that will bereclassied into prot or loss- Other comprehensiveincome that can betransferred to prot or lossunder the equity method

(2,391,155)(4,655,831)(7,046,986)-(7,046,986)(2,004,706)(9,051,692)- Changes in fair value ofavailable-for-sale nancialassets

272,615,163(76,002,428)196,612,735)(196,612,735)---- Translation balance offoreign currency nancialstatements

3,668,97030,619,14134,288,111-34,288,11112,154,98946,443,100

273,892,978(50,039,118223,853,860(216,130,221)7,723,63915,806,81223,530,451

Amount of other comprehensive income incurred in the current period in the income statement:

Year 2019

Pre-taxamount

Less: amount previously includedin the other comprehensive incomeand currently transferred to the

prot or loss

Less:

incometax

Attributableto the parent

company

Attributable

to theminorityequityOther comprehensive income thatcannot be reclassied into prot or loss

- Changes in fair value of other equityinstrument investments

6,654,739-998,2105,656,529-Other comprehensive income that willbe reclassied into prot or loss

- Share in the investees' othercomprehensive income that will bereclassied into prot or loss underequity method

(2,004,706)--(2,004,706)-- Translation balance of foreigncurrency nancial statements

18,369,342--12,154,9896,214,353 23,019,375-998,21015,806,8126,214,353Year 2018

Pre-tax

amount

Less: amount previously included

in the other comprehensiveincome and currently transferredto the prot or loss

Less:

income tax

Attributableto the parentcompany

Attributableto theminorityequityOther comprehensive income thatwill be reclassied into prot or loss- Share in the investees' othercomprehensive income that will bereclassied into prot or loss underequity method

(4,655,831)--(4,655,831)-- Changes in fair value of available-for-sale nancial assets

(89,670,351-(13,667,923)(76,002,428)-- Translation balance of foreigncurrency nancial statements

49,893,429--30,619,14119,274,288 (44,432,753)-(13,667,923)(50,039,118)19,274,28843 Special reserves

Beginning BalanceIncreaseDecreaseEnding BalanceWork safety expenses3,019,17371,228,319(70,631,854)3,615,638

According to the relevant requirements of the Administrative Measures for the Withdrawal and Use of Work SafetyExpenses, the enterprises engaged in large - scale machinery manufacture and engineering construction shall withdraw thework safety expenses according to the standards. The increase and decrease in current year was the work safety expenseswithdrawn and used by the Group for the reporting year in accordance with relevant requirements.

44 Surplus reservesYear 2019

Beginning BalanceIncreaseDecreaseEnding BalanceStatutory surplus reserves1,404,383,88664,436,155-1,468,820,041Discretionary surplus reserves292,378,668--292,378,668 1,696,762,55464,436,155-1,761,198,709Year 2018

Beginning BalanceIncreaseDecreaseEnding BalanceStatutory surplus reserves1,326,165,30378,218,583-1,404,383,886Discretionary surplus reserves292,378,668--292,378,668

1,618,543,97178,218,583-1,696,762,554

In accordance with the Company Law of the People Republic of China, the Company’s Article of Association and theresolutions of the Board of Directors, the Company withdrew 10% of its net prot as statutory surplus reserves. When theaccumulated amount of statutory surplus reserves reaches 50% or more of the share capital, the Company can stop thewithdrawal.The statutory surplus reserves can be used to compensate loss upon approval, or to increase share capital. Thestatutory surplus reserves withdrawn by the Company amounted to RMB 64,436,155 in 2019 (2018: RMB 78,218,583).45 Undistributed prots

Year 2019Year 2018Undistributed prots at the end of the previous year3,344,953,2063,199,681,426Plus: changes in accounting policies119,821,864-Undistributed prots at the beginning of the year after adjustment3,464,775,0703,199,681,426Net prot attributable to shareholders of the parent company514,930,143443,005,092Less: withdrawal of statutory surplus reserves64,436,15578,218,583Distribution of cash dividends of ordinary shares263,417,675219,514,729Undistributed prots at the end of the period3,651,851,3833,344,953,20646 Operating revenue and operating costs

Year 2019Year 2018RevenueCostRevenueCostPrimary business24,212,854,75220,419,043,03121,581,514,08617,940,075,501Other business382,733,131171,488,291230,875,558142,210,251

24,595,587,88320,590,531,32221,812,389,64418,082,285,752Primary business revenue and cost are presented as below

Year 2019Year 2018Primary businessrevenue

Primary business cost

Primary businessrevenue

Primary business costPort machinery16,458,563,16413,240,912,28614,983,974,89811,405,896,707Heavy equipment1,491,597,7491,218,182,0312,746,107,4062,608,895,653"Building-transfer" project andengineering construction

2,564,145,0182,428,961,1591,465,829,7991,455,633,864Steel structures and related revenue2,709,430,9772,571,473,9941,558,778,5861,656,155,935Vessel shipping and others989,117,844959,513,561826,823,397813,493,342 24,212,854,75220,419,043,03121,581,514,08617,940,075,501

Other business revenue and cost are presented as below:

Year 2019Year 2018Other businessrevenue

Other business cost

Other businessrevenue

Other business costMaterials expenses84,343,16376,180,52564,386,03062,947,534Equipment leasing and others298,389,96895,307,766166,489,52879,262,717

382,733,131171,488,291230,875,558142,210,25147 Taxes and surcharges

Year 2019Year 2018Housing property tax52,880,02854,701,491Land use tax24,137,15224,648,393Stamp duty16,163,33014,526,274Urban maintenance and construction tax5,291,4139,113,572Educational surtax4,625,3938,062,514Others4,931,3655,227,750 108,028,681116,279,99448 Selling and distribution expenses

Year 2019Year 2018Employee compensation74,574,64764,666,352Travel expenses20,877,89523,270,054Sales and service fees6,112,8803,448,859Exhibition fees6,028,7178,541,412Advertising and publicity costs4,381,0653,966,124Bidding and tendering expenses2,028,9182,087,276Ofce expenses1,854,2112,186,270Others6,658,7037,374,814 122,517,036115,541,16149 General and administrative expenses

Year 2019Year 2018Employee compensation574,875,380569,997,151Amortization of intangible assets98,274,72897,685,733Travel expenses79,287,29854,893,674Depreciation of xed assets78,096,56772,047,391Ofce expenses66,065,94475,138,588Expenses from employment ofintermediaries

26,042,98962,799,747Management and security fees23,138,96421,796,844Consulting fees16,504,53027,249,851Entertainment expenses14,982,73115,774,517Management and cleaning fees14,822,11415,449,059Insurance expenses13,347,01316,063,873Informatization expenses12,571,62228,395,805Maintenance cost6,151,6915,696,924Others70,969,71679,348,191 1,095,131,2871,142,337,348

50 Research and development expenses

Year 2019Year 2018Employee compensation422,157,374393,654,871Processing expenses173,591,78630,312,011Depreciation expenses133,479,779128,117,342Materials expenses97,624,84987,551,345Product design expenses5,968,0512,553,979Others54,274,33930,424,525 887,096,178672,614,07351 Financial expenses

Year 2019Year 2018Interest expenses1,746,843,5521,621,856,880Less: Capitalized amount of interest44,551,18318,794,122Less: interest income331,452,183332,607,896Exchange losses15,933,055195,218,216Others109,813,17356,591,735 1,496,586,4141,522,264,813The capitalized amounts of borrowing costs have been included in the construction in progress.52 Other incomeGovernment grants relevant to the routine activities:

Year 2019Year 2018Related to assets/incomeFiscal appropriation68,173,79892,341,144Related to incomeTechnological subsidy17,850,79717,289,568Related to incomeLand compensation2,434,9932,434,993Related to income

88,459,588112,065,705

53 Investment income

Year 2019Year 2018Income from long-term equity investment calculated underthe equity method (Note V (15)

110,724,31696,886,332Investment income from trading nancial assets during theholding period

63,766,921-Investment income from available-for-sale nancial assetsduring the holding period (Note V (13)

-19,144,647Investment income from disposal of trading nancial assets109,315- 174,600,552116,030,97954 Gains from changes in fair value

Year 2019Year 2018Trading nancial assets (Only for year 2019)Including: Stock investment of listed companies117,579,147-Derivative nancial instruments - Forward exchangecontract (Note V (3)

(44,481,806)-Derivative nancial instruments - Foreign exchange optioncontract (Note V (2)

22,235,244-

Year 2019Year 2018Trading nancial assets (Only for year 2019)Including: Derivative nancial instruments - Forwardexchange contract (Note V (27)

(7,312,741)-Financial assets measured at fair value through the currentprot or loss (Only for year 2018)Including: Derivative nancial instruments - Forwardexchange contract (Note V. 3)

-44,481,806 88,019,84444,481,806

55 Losses from credit impairment

Year 2019Losses from bad debts of accounts receivable (Note V (25)36,235,314Losses from bad debts of other receivables (Note V (25)2,526,279

38,761,59356 Losses from impairment of assets

Year 2019Year 2018Reversal of inventory depreciation (Note V (25)(71,619,476)(317,328,816)Losses from bad debts (Note V (25)-50,183,121Estimated contract losses (Note V (25)124,113,760254,569,473

52,494,284(12,576,222)57 Gains from disposal of assets

Year 2019Year 2018Gains from disposal of xed assets49,091,913155,557,71658 Non-operating revenue

Year 2019Year 2018

Included in non-recurringprot or loss in 2019Government grants irrelevant tothe routine activities

4,812,3922,346,8124,812,392Revenue from insurance indemnity60,000290,94160,000Others11,590,3189,464,52711,590,318

16,462,71012,102,28016,462,71059 Non-operating expenses

Year 2019Year 2018

Included in non-recurringprot or loss in 2019Lawsuit compensation21,781,22070,449,29921,781,220Amercement outlay5,535,000-5,535,000Overdue ne payment1,213,0121,471,2891,213,012External donations128,984330,000128,984Others1,545,2824,574,7361,545,282

30,203,49876,825,32430,203,498

60 Classication of expenses by natureSupplementary information on the classification by nature of the operating costs, selling and distribution expenses,general and administrative expenses, and research and development expenses of the Group is as follows:

Year 2019Year 2018Used raw materials and low-cost consumables15,704,636,15713,048,899,660Employee compensation (Note V (31)2,216,065,8622,161,564,345Depreciation and amortization expenses(Notes V (17), V (18), V (20) and V (22)1,330,738,6301,397,696,739Outsourcing expenses1,378,775,2661,193,139,124Transportation expenses589,854,221627,384,537On-site installation expenses257,412,249383,631,253After-sale cost240,972,483219,776,274Rental fees218,357,687185,422,528Energy cost216,602,224218,960,046Travel expenses100,165,19378,163,728Ofce expenses67,920,15577,324,858Expenses from employment of intermediaries26,042,98962,799,747Entertainment expenses14,982,73115,774,517Informatization expenses12,571,62228,395,805Bidding and tendering expenses2,028,9182,087,276Other expenses318,149,436311,757,897 22,695,275,82320,012,778,33461 Income tax expenses

Year 2019Year 2018Current income tax expenses72,527,877102,237,124Deferred income tax expenses21,222,70740,976,324

93,750,584143,213,448The relationship between the income tax expenses and total prots is as follows:

Year 2019Year 2018Total prots590,872,197537,055,887Income tax expenses calculated at applicable tax rate (15%)88,630,83080,558,383Effect of the application of various tax rates by subsidiaries19,167,84123,403,438Prot or loss attributable to joint ventures and associates(16,608,647)(14,532,950)Tax-free income(9,574,902)(2,882,946)Non-deductible expenses3,223,5734,068,352Adjustment to nal settlement in previous years(1,253,554)7,088,786Use of deductible losses in previous years(2,993,542)(4,034,159)Effect of unrecognized deductible temporary differences and deductible losses58,152,73488,991,848Additional deduction of technological development expenses(44,993,749)(39,447,304)Income tax expenses calculated at the actual tax rate applicable to the Group93,750,584143,213,44862 Earnings per shareThe basic earnings per share is calculated by dividing the current net prot attributable to the common shareholder ofthe Company by the weighted average of the Company’s outstanding ordinary shares.

Calculation of basic earnings per share and diluted earnings per share:

Year 2019Year 2018RMB / ShareRMB / ShareConsolidated net prot attributable to the commonshareholder of the parent company

514,930,143443,005,092Weighted average of outstanding ordinary shares5,268,353,5015,268,353,501Basic earnings per share0.10 0.08In 2019 and 2018, the Company had no dilutive potential ordinary share, thus, the diluted earnings per share were equalto the basic earnings per share.

63 Notes to items in the statement of cash ows

Year 2019Year 2018Cash received from other operating activitiesCustoms deposit recovered215,598,140134,438,167Cash received from government grants and rewards99,690,746210,466,281Employee loan recovered4,949,2025,751,095Cash received from the revenue from nes7,820,3155,842,463Others1,708,85523,560,319

329,767,258380,058,325Cash paid for other operating activitiesCustoms deposit paid190,498,482193,509,947Expenditures on selling and distribution expenses, general and administrativeexpenses, and research and development expenses

480,355,112321,991,460Financial expenses and handling charges 72,827,22036,673,878Subsidy for research and development paid to cooperative units6,075,0007,675,003Others157,753,932137,007,880

907,509,746696,858,168Cash received from other investing activitiesInterest income267,388,460301,254,856Others-786,317

267,388,460302,041,173Cash received from other nancing activitiesRestricted bank deposits recovered311,887,883323,466,355Loan recovered from third parties507,447,092960,848,000

819,334,9751,284,314,355Cash paid for other nancing activitiesRestricted bank deposits paid265,853,823311,887,883L/G expenditures on overseas loan under domestic guarantee 27,092,71919,917,857Related-party loan repaid864,135,544803,092,390Third-party loan repaid86,683,48867,401,455

1,243,765,5741,202,299,58564 Supplementary information to the statement of cash ows

(1) Supplementary information to the statement of cash ows

Net prot adjusted to cash ows from operating activities:

Year 2019Year 2018Net prot497,121,613393,842,439Plus: provision for impairment of assets / (Reversal)52,494,284(12,576,222)Provision for loss from credit impairment38,761,593-Depreciation of investment properties and xed assets1,227,429,6421,295,705,099Intangible assets and long-term deferred expenses103,308,988101,991,640Net amount of gains from disposal of xed assets and intangible assets(49,091,913)(155,557,716)Gains from changes in fair value(88,019,844)(44,481,806)Financial expenses1,547,048,6451,489,952,919Investment income(174,600,552)(116,030,979)Decrease in deferred income tax assets66,615,33178,369,439Decrease in deferred income tax liabilities(45,392,624)(37,393,115)Increase in inventories(3,151,985,115)(1,532,625,209)(Increase) / Decrease in construction contract payment(531,000,142902,142,450Decrease / (Increase) in operating receivables440,854,132(2,166,466,826)Increases in operating payables1,356,072,606355,967,525Increase in special reserves596,4651,104,341Net cash ows from operating activities1,290,213,109553,943,979

Signicant nancing activities not involving cash:

Year 2019Year 2018Capitan injection of minority shareholders with discounted engineering material-446,108,000

Endorsement transfer of notes:

Year 2019Year 2018Endorsement transfer of bank acceptance bill received from sales of goodsand rendering of services

3,777,188,5213,079,584,191Net changes in cash and cash equivalents:

Year 2019Year 2018Ending balance of cash3,068,024,9763,148,987,372Less: beginning balance of cash3,148,987,3725,673,847,001Net decrease in cash and cash equivalents(80,962,396)(2,524,859,629)

(2) Information on the acquisition or disposal of subsidiaries and other business units

Acquisition of subsidiaries

Year 2019Year 2018Subsidiary acquisition price-100,000Less: cash and cash equivalents acquired from subsidiaries-886,316Net cash received from acquisition of subsidiaries-(786,316)

(3) Cash and cash equivalents

Year 2019Year 2018CashIncluding: cash on hand1,469,6551,569,455Unrestricted bank deposit3,066,555,3213,147,417,917Ending balance of cash and cash equivalents3,068,024,9763,148,987,372

65 Assets with restrictions on the ownership or use right

Year 2019Year 2018Monetary funds (Note V(1)242,272,475548,351,336Remark 1Fixed assets (Note V (18)5,694,247,2855,270,355,777Remark 2Long-term receivables (Note V (14)4,482,230,9283,850,867,673Remark 3

10,418,750,6889,669,574,786Remark 1: As at December 31, 2019, other monetary funds, including the restricted monetary fund of RMB 242,272,475(as at December 31, 2018: RMB 548,351,336), were the special payment collected for overseas project and deposited inoverseas supervision account and the margin deposit deposited by the Group for applying to the bank for letter of credit andbank guarantee.

Remark 2: As at December 31, 2019, the vessel with the book value of RMB 5,439,133,909 (December 31, 2018:

RMB 4,940,559,588) and the mechanical equipment with the book value of RMB 255,133,376 (December 31, 2018: RMB329,796,189) had been used for leaseback with the nancial leasing company, with the nancing term of 3 - 12 years.Remark 3: As at December 31, 2019, the long-term receivables of “building-transfer” project of RMB 4,482,230,928(December 31, 2018: RMB 3,850,867,673) were used as the pledge for obtaining bank loans.66 Foreign currency monetary items

Year 2019Year 2018Originalcurrency

Exchange rate

Converted intoRMB

Originalcurrency

Exchange rate

Converted into

RMBMonetary fundUSD187,030,1486.97621,304,759,718230,480,6436.86321,581,834,749RUB1,850,471,7750.1126208,363,1224,727,787,2010.0986466,159,818EUR22,115,9947.8155172,847,55149,058,1557.8473384,974,060MYR11,680,8861.698619,841,153---KRW1,883,694,2690.006011,302,166157,390,3670.0061960,081OMR606,62917.822010,811,342606,62917.424910,570,450HKD6,566,8440.89585,882,57965,211,2740.876257,138,118AUD1,063,3724.88435,193,8282,344,8484.825011,313,892GBP530,2739.15014,852,051846,6778.67627,345,939AED2,232,5791.87164,178,495997,6051.86791,863,426INR41,131,5390.09764,014,43833,893,7810.09803,321,591JPY58,950,8950.06413,778,752155,379,8370.06199,618,012BRL1,736,0791.73243,007,5831,119,3121.77421,985,883SGD423,8185.17392,192,7922,569,5645.006212,863,751LKR1,924,1470.037872,73310,851,2780.0380412,349ZAR65,3410.494332,298183,0620.473586,680NZD6254.69732,9366254.59542,872CAD2725.34211,453272 5.0381 1,370

1,761,134,9902,550,453,041Accounts receivableUSD199,858,740 6.9762 1,394,254,542202,790,509 6.8632 1,391,791,821EUR51,214,638 7.8155 400,268,00350,839,953 7.8473 398,956,363SGD16,774,617 5.1739 86,790,19118,734,848 5.0062 93,790,396CAD4,860,024 5.3421 25,962,7344,860,024 5.0381 24,485,287GBP1,906,839 9.1501 17,447,76812,015,844 8.6762 104,251,866ZAR26,853,604 0.4943 13,273,73629,070,672 0.4735 13,764,963

Year 2019Year 2018Originalcurrency

Exchange rate

Converted into

RMB

Originalcurrency

Exchange rate

Converted intoRMBQAR6,946,721 1.9102 13,269,62620,257,390 1.8886 38,258,107SAR6,132,449 1.8597 11,404,5156,132,949 1.8287 11,215,324KRW1,619,097,005 0.0060 9,714,5821,402,775,643 0.0061 8,556,931LKR175,910,762 0.0378 6,649,427110,102,442 0.0380 4,183,893AUD946,057 4.8843 4,620,826312,721 4.8250 1,508,879INR12,547,995 0.0976 1,224,6847,711,999 0.0980 755,776RUB7,704,734 0.1126 867,5531,826,988,611 0.0986 180,141,077HKD857,920 0.8958 768,525162,113 0.8762 142,043BRL26,188 1.7324 45,3688,702 1.7742 15,439MYR- 1.6986 -18,313,728 1.6479 30,179,192

1,986,562,0802,301,997,357Other receivablesRUB434,924,316 0.1126 48,972,478 36,896,471 0.0986 3,637,992USD6,152,092 6.9762 42,918,224 30,261,426 6.8632 207,690,219EUR2,681,728 7.8155 20,959,045 12,115,656 7.8473 95,075,187ZAR12,000,000 0.4943 5,931,600 387,503 0.4735 183,483LKR147,386,227 0.0378 5,571,199 67,576,559 0.0380 2,567,909AUD371,983 4.8843 1,816,877 291,278 4.8250 1,405,416INR10,674,702 0.0976 1,041,851 3,685,547 0.0980 361,184HKD562,294 0.8958 503,703 562,294 0.8762 492,682KRW68,820,643 0.0060 412,924 55,130,445 0.0061 336,296BRL169,311 1.7324 293,314 150,590 1.7742 267,177SGD---339,137 5.0062 1,697,788OMR---5,015 17.4249 87,386

128,421,215313,802,719Accounts payableUSD145,950,807 6.9762 1,018,182,020 122,986,455 6.8632 844,080,638EUR33,271,115 7.8155 260,030,399 52,054,224 7.8473 408,485,112SGD5,664,134 5.1739 29,305,663 1,760,739 5.0062 8,814,612JPY134,130,528 0.0641 8,597,767 16,534,523 0.0619 1,023,487GBP548,386 9.1501 5,017,787 1,032,925 8.6762 8,961,864KRW391,082,860 0.0060 2,346,497 310,011,525 0.0061 1,891,070INR20,305,434 0.0976 1,981,810 13,157,480 0.0980 1,289,433ZAR3,307,565 0.4943 1,634,929 4,894,947 0.4735 2,317,757HKD1,124,619 0.8958 1,007,434 1,028,299 0.8762 900,996AUD186,345 4.8843 910,165 30,469 4.8250 147,013BRL58,509 1.7324 101,361 27,992 1.7742 49,663CAD7,259 5.3421 38,778 22,295 5.0381 112,324RUB22,478 0.1126 2,531 9,202 0.0986 907LKR- - -2,644,316 0.0380 100,484

1,329,157,1411,278,175,360Other payablesUSD20,905,589 6.9762 145,841,570 25,833,699 6.8632 177,301,844EUR4,303,074 7.8155 33,630,675 2,937,497 7.8473 23,051,421

Year 2019Year 2018Originalcurrency

Exchange rate

Converted into

RMB

Originalcurrency

Exchange rate

Converted into

RMBSGD576,277 5.1739 2,981,600 1,131,844 5.0062 5,666,237LKR70,614,854 0.0378 2,669,241 78,956,219 0.0380 3,000,336BRL371,496 1.7324 643,580 100,246 1.7742 177,856RUB3,926,708 0.1126 442,147 55,371,311 0.0986 5,459,611KRW25,539,452 0.0060 153,237 8,978,922 0.0061 54,771HKD15,000 0.8958 13,437 - - -AUD532 4.8843 2,598 972 4.8250 4,690GBP- - -2,776 8.6762 24,085

186,378,085214,740,851Short-term borrowingsUSD261,118,082 6.9762 1,821,611,964482,561,612 6.8632 3,311,916,855EUR73,125,397 7.8155 571,511,540110,711,331 7.8473 868,785,028JPY1,356,315,135 0.0641 86,939,800102,474,480 0.0619 6,343,170CHF11,000,000 7.2028 79,230,800---GBP7,300,000 9.1501 66,795,730---

2,626,089,8344,187,045,053Long-term borrowings maturing within one yearUSD245,400,000 6.9762 1,711,959,480---EUR22,770,0007.8155177,958,935---

1,889,918,415-Long-term payables maturing within one yearUSD79,252,1116.9762552,878,57779,252,1116.8632543,923,088Long-term borrowingsUSD---150,400,0006.86321,032,225,280EUR---22,770,000 7.8473 178,683,021

-1,210,908,301Long-term payablesUSD214,501,6666.97621,496,406,522225,212,9006.86321,545,681,175VI. Changes in the scope of consolidation1 Changes in scope of consolidation due to other reasonsOn February 2, 2019, the Company established a wholly-owned subsidiary ZPMC Fuzhou Offshore Construction Co.,Ltd. via capital contribution in cash of RMB 5,000,000. As at December 31, 2019, the Company has a shareholding ratio of100% in such subsidiary.

On May 28, 2019, the Company established a wholly-owned subsidiary Xiong'an Zhenhua Co., Ltd. via registration. Asat December 31, 2019, the Company has a shareholding ratio of 100% in such subsidiary.On October 24, 2019, the Company and CCCC Third Highway Engineering Co., Ltd. made a joint investment toestablish a holding subsidiary CCCC (Dongming) Investment and Construction Co., Ltd. As at December 31, 2019, theGroup has a shareholding ratio of 70% in such subsidiary.VII. Equity in other entities1 Equity in subsidiaries

Subsidiaries of the Company:

Main business placeRegistration placeBusiness nature

Shareholding ratio(%)Way of acquisitionDirect IndirectShanghai Zhenhua Port MachineryHeavy Industry Co., Ltd.

Chongming,

Shanghai

Chongming,Shanghai

Machinemanufacture

94.76%-

Establishment by

investingShanghai Zhenhua Port Machinery(Hong Kong) Co., Ltd.

Hong KongHong KongShipping100%-

Establishment by

investingShanghai Zhenhua Shipping Co., Ltd.

Pudong New Area,Shanghai

Pudong New Area,Shanghai

Shipping55.00%-

Establishment by

investingNantong Zhenhua Heavy EquipmentManufacturing Co., Ltd.

Nantong City, JiangsuProvince

Nantong City,Jiangsu Province

Machinemanufacturing

100.00%-

Establishment byinvestingZPMC Transmission Machinery(Nantong) Co., Ltd.

Nantong City, Jiangsu

Province

Nantong City,Jiangsu Province

Machinemanufacturing

50.75%-

Establishment byinvestingZPMC Electric Co., Ltd.

Pudong New Area,

Shanghai

Pudong New Area,Shanghai

Electric equipmentresearch anddevelopment

100.00%-

Establishment byinvestingJiangyin Zhenhua Port Machinery SteelStructure Manufacturing Co., Ltd.

Jiangyin City, JiangsuProvince

Jiangyin City,Jiangsu Province

Machinemanufacturing

75.00%25.00%

Establishment byinvestingShanghai Zhenhua MarineEngineering Service Co., Ltd.

Yangshan BondedPort Area, Shanghai

Yangshan BondedPort Area, Shanghai

Shipping100.00%-

Establishment byinvestingZPMC Machinery Equipment ServicesCo., Ltd.

Pudong New Area,Shanghai

Pudong New Area,Shanghai

Technicalconsultancy

100.00%-

Establishment byinvestingZPMC Netherlands Co?peratie U.A.

Rotterdam,Netherlands

Rotterdam,Netherlands

Trade sales100.00%-

Establishment byinvestingZPMC Netherlands B.V.

Rotterdam,Netherlands

Rotterdam,Netherlands

Trade sales100.00%-

Establishment byinvestingVerspannen B.V.

Rotterdam,Netherlands

Rotterdam,Netherlands

Machinemanufacturing

-100.00%

Business combinationnot under commoncontrolZPMC Espana S.L.Los Barrios, Spain Los Barrios, SpainTrade sales-100.00%

Establishment byinvestingZPMC GmbH HamburgHamburg, Germany Hamburg, GermanyTrade sales100.00%-

Establishment by

investingZPMC Lanka Company (Private)Limited

Colombo, Sri LankaColombo, Sri LankaTrade sales70.00%-

Establishment by

investingZPMC North America Inc.Delaware, USADelaware, USATrade sales100.00%-

Establishment by

investingZPMC Korea Co., Ltd.Pusan, KoreaPusan, KoreaTrade sales70.00%-

Establishment by

investingZPMC Engineering Africa (Pty) Ltd.

Kwazulu-NatalProvince, Republic ofSouth Africa

Kwazulu-NatalProvince, Republicof South Africa

Trade sales100.00%-

Establishment byinvestingZPMC Engineering (India) PrivateLimited

Maharashtra State,India

Maharashtra State,India

Trade sales100.00%-

Establishment byinvestingZPMC Southeast Asia Holding Pte.Ltd.

SingaporeSingaporeTrade sales100.00%-

Establishment byinvestingZPMC Engineering (Malaysia) Sdn.Bhd.

MalaysiaMalaysiaTrade sales-70.00%

Establishment byinvestingZPMC Australia Company (Pty) Ltd.

New South Wales,Australia

New South Wales,Australia

Trade sales100.00%-

Establishment byinvestingZPMC Port Machinery GeneralEquipment Co., Ltd.

Pudong New Area,Shanghai

Pudong New Area,Shanghai

Machinemanufacturing

100.00%-

Businesscombination undercommon control

Main business placeRegistration placeBusiness nature

Shareholding ratio(%)Way of acquisitionDirect IndirectShanghai Port Machinery HeavyIndustries Co., Ltd.

Pudong New Area,Shanghai

Pudong New Area,Shanghai

Machinemanufacturing

-74.02%

Businesscombination under

common controlZPMC Zhangjiagang Port MachineryCo., Ltd.

Zhangjiagang City,Jiangsu Province

Zhangjiagang City,Jiangsu Province

Machinemanufacturing

90.00%-

Businesscombination undercommon controlNanjing Ninggao New ChannelConstruction Co., Ltd.

Nanjing City, JiangsuProvince

Nanjing City,Jiangsu Province

Engineeringconstruction

100.00%-Investment

ZPMC Qidong Marine EngineeringCo., Ltd.

Nantong City, JiangsuProvince

Nantong City,Jiangsu Province

Machinemanufacturing

67.00%-

Business combinationnot under common

controlJiahua Shipping Co., Ltd.Hong KongHong KongShipping-70.00%

Establishment by

investingZhenhua Pufeng Wind Power (HongKong) Co., Ltd.

Hong KongHong KongShipping-51.00%

Establishment by

investingZPMC Brazil Servi?o Portuá riosLTDA

Rio DE Janeiro,Brazil

Rio DE Janeiro,Brazil

Trade sales80.00%-

Establishment by

investingZPMC Limited Liability CompanyMoscow, RussiaMoscow, RussiaTrade sales85.00%-

Establishment by

investingZPMC NA East Coast lnc. VirginiaDelaware, USATrade sales-100.00%

Establishment by

investingCCCC Tianhe Mechanical EquipmentManufacturing Co., Ltd.

(Remark 1)

Changshu City,Jiangsu Province

Changshu City,Jiangsu Province

Machinemanufacturing

32.51%-

Businesscombination undercommon controlCCCC Investment & DevelopmentQidong Co., Ltd.

(Remark 2)

Nantong City, JiangsuProvince

Nantong City,Jiangsu Province

Engineeringconstruction

49.36%-

Establishment byinvestingCCCC Liyang Urban Investment andConstruction Co., Ltd.

(Remark 3)

Liyang City, JiangsuProvince

Liyang City, JiangsuProvince

Engineeringconstruction

48.00%-

Establishment byinvestingZPMC UK LDCardiff, UKCardiff, UKTrade sales100.00%-

Establishment byinvestingZPMC Middle East FzeDubai, UAEDubai, UAETrade sales100.00%-

Establishment byinvestingCCCC (Huaian) ConstructionDevelopment Co., Ltd.

Huaian City, JiangsuProvince

Huaian City, JiangsuProvince

Engineeringconstruction

-77.01%

Establishment byinvestingCCCC Zhenjiang InvestmentConstruction ManagementDevelopment Co., Ltd

Zhenjiang City,Jiangsu Province

Zhenjiang City,Jiangsu Province

Engineeringconstruction

70.00%-

Establishment byinvestingCCCC Yongjia ConstructionDevelopment Co., Ltd.

Wenzhou City,Zhejiang Province

Wenzhou City,Zhejiang Province

Engineeringconstruction

80.00%-

Establishment byinvestingCCCC Zhenhua Lvjian Technology(Ningbo) Co., Ltd.

(Remark 4)

Ningbo City, ZhejiangProvince

Ningbo City,Zhejiang Province

Engineeringconstruction

40.00%-

Establishment byinvestingZPMC Hotel Co., Ltd.

Pudong New Area,Shanghai

Pudong New Area,Shanghai

Hotel and catering-100.00%

Business combinationnot under common

controlCCCC Rudong ConstructionDevelopment Co., Ltd.

Rudong City, JiangsuProvince

Rudong City,Jiangsu Province

Engineeringconstruction

13.96%52.54%

Establishment byinvestingZPMC Latin America HoldingCorporation

PanamaPanamaTrade sales100.00%-

Establishment byinvestingTerminexus Co., Ltd.Hong KongHong Kong

Technicalconsultancy

-100.00%

Establishment by

investingGreenland Heavylift (Hong Kong)Limited

(Remark 5)Hong KongHong KongShipping-50.00%

Business combination

not under common

control

Main business placeRegistration placeBusiness nature

Shareholding ratio(%)

Way of acquisitionDirect IndirectGPO Grace Limitedarshall Islandsarshall IslandsShipping-100.00%

Business combination

not under common

controlGPO Amethyst LimitedMarshall IslandsMarshall IslandsShipping-100.00%

Business combinationnot under common

controlGPO Sapphire LimitedMarshall IslandsMarshall IslandsShipping-100.00%

Business combinationnot under common

controlGPO Emerald LimitedMarshall IslandsMarshall IslandsShipping-100.00%

Business combinationnot under common

controlGPO Heavylift LimitedCayman IslandsCayman IslandsShipping-60.00%

Business combinationnot under common

controlGPO Heavylift ASOslo, NorwayOslo, NorwayShipping-60.00%

Not under common

controlGPO Heavylift Pte LtdSingaporeSingaporeShipping-100.00%

Business combinationnot under common

controlXiong'an Zhenhua Co., Ltd.

Baoding City, HebeiProvince

Baoding City, HebeiProvince

Intelligent service100.00%-

Establishment by

investingZPMC Fuzhou Offshore ConstructionCo., Ltd.

Fuzhou City, Fujian

Province

Fuzhou City, FujianProvince

Maritimeengineeringconstruction

100.00%-

Establishment byinvestingCCCC (Dongming) Investment andConstruction Co., Ltd..

Heze City, ShandongProvince

Heze City,Shandong Province

Engineeringconstruction

70.00%-

Establishment byinvestingRemark 1: The Group obtained 55.98% voting power in the board of shareholders of and 80% voting power in the boardof directors of such company (CCCC Tianhe Mechanical Equipment Manufacturing Co., Ltd.) by the amendment of articles ofassociation of such company, reconstruction of the board of directors thereof and signing the agreement for concerted actionwith China Communications Corporation (one of the shareholders of CCCC Tianhe Mechanical Equipment ManufacturingCo., Ltd.). In accordance with the regulations of the articles of association of such company, the Group had obtained thecontrol right thereof, thus, such company was included in the Group’s scope of consolidation.Remark 2: By signing the agreement for concerted action with CCCC Tianjin Dredging Co., Ltd., the Group had obtained95% voting power in the board of shareholders of and 100% voting power in the board of directors of such company(CCCC Investment & Development Qidong Co., Ltd.). In accordance with the regulations of the articles of association ofsuch company, the Group had obtained the control right thereof, thus, such company was included in the Group’s scope ofconsolidation.Remark 3: By signing the agreement for concerted action with CCCC Shanghai Dredging Co. Ltd. and CCCC EastChina Investment Co., Ltd., the Group had obtained 76% voting power in the board of shareholder of and 71% voting powerin the board of directors of such company (CCCC Liyang Urban Investment and Construction Co., Ltd.). In accordance withthe regulations of the articles of association of such company, the Group had obtained the control rights thereof, thus, suchcompany was included in the Groups’ scope of consolidation.Remark 4: By signing the agreement for concerted action with CCCC Highway Consultants Co. Ltd. and CCCCEquipment Manufacturing Marine Heavy Industry Division, the Group had obtained 50% voting power in the board ofshareholders of and 60% voting power of the board of directors of such company (CCCC Zhenhua Lvjian Technology (Ningbo)Co., Ltd.). In accordance with the regulations of the articles of association of such company, the Group had obtained thecontrol right thereof, thus, such company was included in the Group’s scope of consolidation.Remark 5: In accordance with the acquisition agreement, the Group held two of the four seats in the board of directorsof such company (Greenland Heavylift (Hong Kong) Limited), including chairman of the board. As required in the articles ofassociation of such company, the chairman of the board has super voting power when the voting of the board is deadlocked.

In addition, Group also has the right to buy 1% equity of such company at USD 1 at any time in the future. Therefore, theGroup has the substantial control over such company, and such company was included in the Group’s scope of consolidationfor the nancial statements.Subsidiaries with signicant minority equity:

Year 2019

Shareholding

ratio ofminorityshareholder %

Capitalcontributedby minorityshareholder

Changes inaccounting

policies

Prot or lossattributable to

the minorityshareholder

Dividendspaid tominorityshareholder

Special reserveswithdrawnby minorityshareholder

Accumulatedminorityequity at theend of the yearCCCC Tianhe Mechanical EquipmentManufacturing Co., Ltd.

67.49-(6,011,469)48,481,428-53,477684,876,399ZPMC Transmission Machinery(Nantong) Co., Ltd.

49.25614,065,326----614,065,326CCCC Zhenjiang InvestmentConstruction ManagementDevelopment Co., Ltd

30.00--14,514,024--350,277,452Greenland Heavylift (Hong Kong)Limited

50.00--(2,667,244)(973,150)-292,355,846Year 2018

Shareholding

ratio ofminorityshareholder %

Capitalcontributedby minorityshareholder

Prot or lossattributable tothe minorityshareholder

Dividendspaid tominorityshareholder

Special reserveswithdrawnby minorityshareholder

Accumulatedminority equityat the end ofthe yearCCCC Tianhe MechanicalEquipment Manufacturing Co., Ltd.

67.49 -39,565,707(635,573)(413)642,352,963CCCC Zhenjiang InvestmentConstruction ManagementDevelopment Co., Ltd

30.00 -15,949,306--335,763,428Greenland Heavylift (Hong Kong)Limited

50.00 -(12,996,502)--295,996,240The following table presents the main financial information of above subsidiaries. The data refer to amounts of allcompanies in the Group before mutual offset:

Year 2019

Current

assets

Non-current

assets

Total assets

Currentliabilities

Non-currentliabilities

Total liabilitiesCCCC Tianhe MechanicalEquipment Manufacturing Co., Ltd.

2,245,394,1112,871,131,4145,116,525,525(3,456,472,738)(645,270,749)(4,101,743,487)CCCC Zhenjiang InvestmentConstruction ManagementDevelopment Co., Ltd

377,510,693853,738,5411,231,249,234(63,657,726)-(63,657,726)Greenland Heavylift (Hong Kong)Limited

105,658,7412,139,263,0952,244,921,836(429,544,507)(1,233,274,882)(1,662,819,389)ZPMC Transmission Machinery(Nantong) Co., Ltd.

1,061,226,741393,323,3781,454,550,119(207,716,971)-(207,716,971)

Year 2019Operatingrevenue

Net prot

Totalcomprehensiveincome

Cash ows fromoperating activitiesCCCC Tianhe Mechanical EquipmentManufacturing Co., Ltd.

1,163,944,62671,810,93471,810,93455,406,683

Year 2019Operating

revenue

Net prot

Totalcomprehensive

income

Cash ows fromoperating activitiesCCCC Zhenjiang Investment ConstructionManagement Development Co., Ltd

-48,380,07948,380,079(256,615,368)Greenland Heavylift (Hong Kong) Limited245,078,363(16,628,814)(7,122,338)95,869,438ZPMC Transmission Machinery (Nantong)Co., Ltd.

650,913,18347,393,36047,393,36014,617,991

Year 2018Currentassets

Non-current

assets

Total assets

Currentliabilities

Non-currentliabilities

Total liabilitiesCCCC Tianhe MechanicalEquipment Manufacturing Co., Ltd.

2,683,768,5332,250,708,2054,934,476,738(3,405,276,767)(577,400,904)(3,982,677,671)CCCC Zhenjiang InvestmentConstruction ManagementDevelopment Co., Ltd

114,313,9701,045,638,4491,159,952,419(40,740,990)-(40,740,990)Greenland Heavylift (Hong Kong)Limited

60,153,7961,436,258,4331,496,412,229(87,059,172)(818,181,971)(905,241,143)

Year 2018Operatingrevenue

Net prot

Totalcomprehensiveincome

Cash ows fromoperating activitiesCCCC Tianhe Mechanical EquipmentManufacturing Co., Ltd.

1,230,112,61758,624,54858,624,548(61,417,339)CCCC Zhenjiang Investment ConstructionManagement Development Co., Ltd

-53,164,35353,164,353(102,681,078)Greenland Heavylift (Hong Kong) Limited106,628,409(60,006,966)(49,950,762)(72,567,613)2 Equity in joint ventures and associates

Main business

place

Registration

place

Business nature

Registeredcapital

Shareholding ratioAccountingtreatmentDirectIndirectJoint venturesJiangsu Longyuan Zhenhua MarineEngineering Co., Ltd.

JiangsuNantong, Jiangsu

Marine engineeringconstruction

260,000,000RMB

50%-Equity methodZPMC Mediterranean LimanMakinalari Ticaret Anonim Sirketi

Istanbul,Turkey

Istanbul, Turkey

Technical servicefor port equipment

50,000 TRY50%-Equity methodZhenhua Marine Energy (Hong Kong)Co., Ltd. (Remark 1)

Hong KongHong Kong Shipping 5,969,99 USD-51%Equity methodCranetech Global Sdn.Bhd.Malaysia Malaysia

Technical servicefor port equipment

1,000,000 MYR-49.99%Equity methodZPMC-OTL MARINE CONTRACTORLIMITED

Hong Kong Hong Kong Shipping 2,000,000 USD-50%Equity methodCCCC Tianhe Xi’an EquipmentManufacturing Co., Ltd.

Shaanxi Xi’an, Shaanxi

Machinemanufacture

300,000,000RMB

-50%Equity methodCCCC Nanjing Trafc EngineeringManagement Co., Ltd.

Nanjing China

Engineeringmanagement

50,000,000 RMB45%- Equity method

Main businessplace

Registration

place

Business nature

Registeredcapital

Shareholding ratio

AccountingtreatmentDirectIndirectAssociatesCCCC Marine Engineering &Technology Research Center Co., Ltd.

Shanghai

Pudong NewArea, Shanghai

Marine technologydevelopment and

consulting

60,000,000 RMB25%- Equity methodCCCC Real Estate Yinxing Co., Ltd.JiangsuWuxi, Jiangsu

Real estatedevelopment

900,000,000 RMB20%- Equity methodZPMC Changzhou Coatings Co., Ltd.Jiangsu

Changzhou,Jiangsu

Paint manufacture 3,000,000 RMB20%- Equity methodCCCC Financial Leasing Co., Ltd.Shanghai

Pudong NewArea, Shanghai

Finance lease

5,000,000,000RMB

30%- Equity methodCCCC Yancheng Construction andDevelopment Co., Ltd

Jiangsu

Yancheng,Jiangsu

Engineering projectconstruction

1,156,200,000

RMB

25%- Equity methodSuzhou Chuanglian Electric DriveCo., Ltd.

JiangsuSuzhou, Jiangsu

Electric equipmentmanufacturing

50,000,000 RMB20%- Equity methodChina Communications ConstructionUSA Inc.

United StatesUnited States

Port, channel,highway and bridgeconstruction

50,000,000 USD 24%- Equity methodCCCC South American RegionalCompany SARL (Remark 2)

USAUSA

Port, channel,highway and bridgeconstruction

179,988,158 USD17%- Equity methodZPMC Southeast Asia Pte.Ltd.SingaporeSingapore Trade sales 787,760 USD-40% Equity methodShanghai Ocean EngineeringEquipment Manufacturing InnovationCenter Co., Ltd. (Remark 3)

Shanghai China

Development ofocean engineeringtechnology

72,500,000 RMB8.97%- Equity methodRemark 1: On May 5, 2014, the subsidiary of the Company and the partner established Zhenhua Marine Energy (HongKong) Co., Ltd. via joint investment. The registered capital of such company was USD 5,969,998, in which the subsidiaryof the Company contributed USD 3,044,699 with the shareholding ratio of 51%. The company mainly engages in shipping.According to the regulations of the company’s shareholder agreement, the important events of the company should beagreed via voting by shareholders holding no less than 75% of shares. Therefore, the Group has no control over thecompany but jointly controls the same with the partner.

Remark 2: On December 15, 2016, the Company contributed USD 16,480,000 (equivalent to RMB 114,321,760) tobuy shares of CCCC South American Regional Company SARL. As at December 31, 2019, the registered capital of suchcompany was USD 179,988,158 and the Company held a shareholding ratio of 17% in such company. The company mainlyengages in port construction. According to the regulations of the articles of association of such company, the Company hasthe right to designate one director thereto and to implement signicant impact thereon.Remark 3:On September 10, 2019, the Company contributed RMB 6,500,000 to buy shares of Shanghai OceanEngineering Equipment Manufacturing Innovation Center Co., Ltd. Such company has a registered capital of RMB72,500,000, and the Company has a shareholding ratio of 8.97% therein. Such company main engages in the developmentof ocean engineering technology. According to the regulations of the articles of associations of such company, the Companyhas the right to designate one director thereon and to implement signicant impact thereon.Main nancial information of major associates:

For amounts of associates in the consolidated nancial statements, the fair values of identiable assets and liabilities ofassociates at the time of acquiring investments and the impact of unied accounting policies have been taken into account.

CCCC Financial Leasing Co., Ltd.Year 2019Year 2018Current assets19,939,324,54316,819,852,506Non-current assets21,339,769,55914,386,974,050Total assets41,279,094,10231,206,826,556Current liabilities(21,496,787,586)(14,391,112,371)Non-current liabilities(11,265,256,085)(9,282,803,916)Total liabilities(32,762,043,671)(23,673,916,287)

CCCC Financial Leasing Co., Ltd.Year 2019Year 2018Minority equity2,564,707,5041,794,759,090Shareholders’ equity attributable the parent company5,952,342,9275,738,151,179Share of net assets held based on shareholding ratio1,785,702,8781,721,445,354Book values of investments in associates1,785,702,8781,721,445,354Operating revenue2,052,054,1871,693,357,297Financial expenses-interest income18,917,03214,581,320Financial expenses - interest expenses51,051,24611,983,472Income tax expenses126,731,537114,094,285Net prot386,156,164351,695,926Other comprehensive income, net of tax1,034,7822,159,463Total comprehensive income387,190,946353,855,387Total comprehensive income attributable to the parentcompany

298,442,527292,982,568Dividends distributed32,500,000150,000,000Summary of nancial information on insignicant joint ventures and associates:

Joint ventures

Year 2019Year 2018Total book value of investment312,812,059287,691,938Total amounts of the following itemscalculated at shareholding ratio

Net prot17,192,5119,181,182Other comprehensive income--Total comprehensive income17,192,5119,181,182Associates

Year 2019Year 2018Total book value of investment775,158,808766,664,468Total amounts of the following itemscalculated at shareholding ratio

Net prot4,309,481458,218Other comprehensive income(2,315,141)(5,303,670)Total comprehensive income1,994,340(4,845,452)

VIII. Risks related to nancial instruments1 Classication of nancial instruments

The book values of various nancial instruments on the balance sheet date:

Year 2019Financial assets

Financial assets measured atfair value through the current

prot or loss

Financial assetsmeasured at

amortized cost

Financial assets measured atfair value through the othercomprehensive income

TotalStandardDesignatedStandard DesignatedMonetary fund --3,310,297,451--3,310,297,451Trading nancial assets1,739,792,062----1,739,792,062Notes receivable--5,650,000--5,650,000

Financial assets measured atfair value through the current

prot or loss

Financial assets

measured atamortized cost

Financial assets measured at

fair value through the other

comprehensive income

TotalStandardDesignatedStandard DesignatedReceivables nancing---406,408,604-406,408,604Accounts receivable--4,966,175,528--4,966,175,528Other receivables--546,907,645--546,907,645Non-current assetsmaturing within one year

--1,313,203,581--1,313,203,581Investment in other equityinstruments

----61,981,26861,981,268Long-term receivables--5,227,728,420--5,227,728,420

1,739,792,062-15,369,962,625406,408,60461,981,26817,578,144,559

Financial liabilities

Financial liabilities measured at fairvalue through the current prot or loss

Financial liabilitiesmeasured atamortized cost

TotalStandardDesignatedShort-term borrowings--22,001,319,38022,001,319,380Trading nancial liabilities7,312,741--7,312,741Notes payable--3,420,945,4513,420,945,451Accounts payable--7,869,378,3657,869,378,365Other payables--694,418,175694,418,175Non-current liabilities maturing within one year--7,287,484,5137,287,484,513Long-term borrowings--8,413,339,9868,413,339,986Long-term payables--1,741,945,6361,741,945,636

7,312,741-51,428,831,50651,436,144,247Year 2018Financial assets

Financial assetsmeasured at fairvalue through the

current prot orloss

Loans andreceivables

Available-for-salenancial assets

TotalMonetary fund-3,697,338,708-3,697,338,708Financial assets measured at fair value throughthe current prot or loss

52,920,084--52,920,084Notes receivable and accounts receivable-5,221,919,846-5,221,919,846Other receivables-680,776,372-680,776,372Non-current assets maturing within one year-894,638,424-894,638,424Available-for-sale nancial assets--1,214,533,5541,214,533,554Long-term receivables-5,188,341,089-5,188,341,089

52,920,08415,683,014,4391,214,533,55416,950,468,077Financial liabilities

Other nancial liabilitiesShort-term borrowings16,554,687,487Notes payable and accounts payable9,769,273,923

Other nancial liabilitiesOther payables952,110,434Non-current liabilities maturing within one year4,209,532,510Long-term borrowings15,097,725,259Long-term payables1,967,461,119

48,550,790,7322 Transfer of nancial assetsTransferred nancial assets derecognized as a whole but involved continuouslyAs at December 31, 2019, the book value of the bank acceptance bill given by the Group upon endorsement to thesupplier for accounts payable settlement amounted to RMB738,496,754(December 31, 2018: RMB 364,908,608).As at December 31, 2019, the maturity term of such bill was 1 - 12 months. In accordance with the relevant provisionsof the Negotiable Instruments Law, if the acceptance bank refuses to pay, the bill holder shall be entitled to recourse to theGroup (“continue to be involved”).The Group considered that it had transferred almost all risks and rewards of such bill,therefore, the aforesaid book value and the book value of relevant settled accounts payable should be derecognized as awhole. The maximum losses and undiscounted cash ows that continue to be involved were equal to the book value. TheGroup considered that the fair value with continuous involvement was insignicant.In 2019, the Group failed to recognized relevant gain or loss on the date of transfer of the above nancial assets (Year2018: None).The Group had no income or expense which had been recognized for the current year or accumulativelyas it had been derecognized as a whole but continued to be involved in the financial assets. The endorsement of bankacceptance bill receivable happened in this year evenly.3 Financial instrument risksVarious nancial instrument risks the Group faces during the routine activities mainly include the credit risk, liquidity riskand market risk (including the exchange rate risk and interest rate risk). Main nancial instruments of the Group include themonetary funds, equity investment, borrowings, notes receivable, accounts receivable, accounts receivable nancing, long-term receivables, notes payable and accounts payable.The Group's overall risk management plan is targeted at the unpredictability of nancial market, trying to minimize thepotential adverse inuence on the Group’s nancial results.Credit riskThe Group manages the credit risks by the classication of portfolios. The credit risk is mainly from notes receivable,accounts receivable nancing, accounts receivable, other receivables and long-term receivables.Other financial assets of the Group include monetary funds, trading financial assets and other equity investmentinstruments, of which credit risks are from the counterpart's default, and the maximum exposure is equal to the book amountof these instruments.The Group only trade with the authorized third parties in good standing. Credit risks are managed in a centralizedmanner by customer/counterpart, geographic region and industry. As the Group’s customers of accounts receivable andlong-term receivables are widely dispersed across sectors and industries, there is no signicant credit risk concentrationwithin the Group. The Group did not hold any collateral or other credit enhancements for the balance of accounts receivableand long-term receivables, but did the same for the balance of long-term receivables.As the counterparts of monetary funds, bank acceptance bill receivable and derivative nancial instruments are banks ingood standing and having relatively higher credit rating, these nancial instruments have low credit risk.In addition, as for the notes receivable, accounts receivable nancing, accounts receivable, other receivables, and long-term accounts receivable, the Group has set relevant policies to control the credit risk exposure. The Group, based on thecustomers' nancial positions, the possibility of obtaining guarantees from the third party, credit records and other factorssuch as the current market conditions, evaluates the credit qualications of customers and set the credit period accordingly.The Group will monitor customers’ credit records periodically; as for the customers with bad credit records, the Group willtake measures, such as requesting a payment in writing, shortening the credit period or canceling the credit term, to ensurethat the Group's overall credit risks are within the controllable scope.

Year 2019Judgment criteria for signicant increase in credit riskOn each balance sheet date, the Group will evaluate the credit risks of relevant nancial instruments to conrm whetherthey have had significant increase or not after the initial recognition. On such confirmation, the Group will consider thereasonable and well-founded information which can be obtained without paying unnecessary surcharge or effort, includingthe information on qualitative and quantitative analysis based on the Group’s historical date, external credit risk rating andperspectiveness. Based on the individual financial instrument or portfolio of financial instruments with similar credit riskcharacteristics, the Group determines the changes in default risk in nancial instruments during the estimated duration bycomparing the default risks in nancial instruments on the balance sheet date with those on the initial recognition date.

In case of one or more quantitative or qualitative standards, the Group will consider that the credit risk of a nancialinstrument has had signicant increase:

(1) The quantitative standard mainly refers to the situation that the reporting date is overdue for certain days.

(2) The qualitative standard mainly refers to the situation that the debtor encounters any significant and adverse

operating or nancial change, or prepares the list of warning customers.

Denition of assets with credit impairment

In order the determine whether there is credit impairment, the Group adopts a denition standard to keep pace with theinternal credit risk management target regarding relevant nancial instruments, and takes the quantitative and qualitativeindicators into account. The Group mainly considers the following factors on evaluating whether the debtor has had creditimpairment:

(1) The issuer or the debtor suffers signicant nancial difculties;

(2) The debtor violates any contract, such as default or delay in repayment of interest or principal;

(3) Considering the economic or contractual reasons relevant to the debtor’s financial difficulty, the debtor makes

concession which it will not make in any other circumstance;

(4) The debtor is likely to go bankrupt or carry out other nancial reorganization;

(5) The active market of such nancial assets disappears due to the issuer’s or the debtor’s nancial difculty;

(6) A nancial asset is purchased or generated through the substantial discount, and such discount reects the fact of

credit loss.

The credit impairment of nancial assets may be caused by several events, not just one event which can be individuallyidentied.

Parameters for the measurement of expected credit loss

Based on the information whether the credit risk has had signicant increase or there is credit impairment, the Groupmakes the provision for impairment of expected credit losses of various assets for 12 months or the entire duration. Keyparameters for the measurements of expected credit loss include the probability of default, loss given default and exposureat default. Considering the quantitative analysis on historical statistical data (including the rating of the counterpart, way ofguarantee and category of collateral) and prospective information, the Group builds models for probability of default, lossgiven default and exposure at default.

Relevant denitions:

(1) The probability of default refers to the probability that the debtor may fail to perform the payment obligation within the

future 12 months or the entire duration. The Group’s probability of default is adjusted based on the credit loss model, addingthe prospective information to reect the debtor's probability of default in the current macroeconomic environment;

(2) The loss given default refers to the expectation made by the Group regarding the degree of loss on default risk

exposure. As the type of counterpart, way of recourse and priority as well as collateral may be different, the loss given defaultmay also be different. The loss given default refers to the percentage of the risk exposure loss at default, calculated basedon the term of future 12 months or the entire duration;

(3) The exposure at default refers to the amount paid by the Group at default in the future 12 months or the entire

remaining duration.

The prospective information is involved in the evaluation on significant change in credit risk and the calculation ofexpected credit loss. Through the historical data analysis, the Group identies the key economic indicators affecting thecredit risks in various type of business and the expected credit loss.

The impact of these economic indicators on the probability of default and the loss given default is different for differenttype of business. In such course, the Group makes the reference to the authoritative predictive values, expect theseeconomic indicators based on results of those values, and determine the impact of these economic indicators on theprobability of default and the loss given default.

The maximum risk exposure and the year-end classication of credit risk degrees regarding the Group’s nancial assetsare as follows:

Expected credit lossin future 12 months

Expected credit loss in the entire lifecycle

TotalStage IStage IIStage IIISimple methodMonetary funds3,310,297,451---3,310,297,451Notes receivable5,650,000---5,650,000Accounts receivable---4,966,175,5284,966,175,528Receivables nancing406,408,604---406,408,604Other receivables1,097,763,73778,797,771--1,176,561,508Non-current assets maturingwithin one year

1,313,203,581---1,313,203,581Long-term receivables5,227,728,420---5,227,728,420

11,361,051,79378,797,771-4,966,175,52816,406,025,092Year 2018As at December 31, 2018, analysis on the term of nancial assets overdue but not impaired is as follows:

Total

Not overdueNot impaired

OverdueWithin 1 year1 - 2 years2 - 3 yearsOver 3 yearsMonetary funds3,697,338,7083,697,338,708----Notes receivable189,371,105189,371,105----Accounts receivable3,201,290,8162,699,000,085153,982,269120,227,018102,862,164125,219,280Other receivables1,137,887,6911,137,887,691----Non-current assetsmaturing within one year

894,638,424894,638,424----Long-term receivables5,188,341,0895,188,341,089----

14,308,867,83313,806,577,102153,982,269120,227,018102,862,164125,219,280As at December 31, 2018, the accounts receivable not overdue and impaired were relevant to a large number ofsporadic customers where there is no default record recently.

As at December 31, 2018, the accounts receivable overdue and impaired were relevant to a large number of individualcustomers where there are good records on transactions with Group. According to the previous experience, as the nancialassets have no signicant change in credit quality and are deemed to be recoverable in full, the Group considers that noprovision for impairment should be made for such nancial assets.Liquidity riskSubsidiaries within the Group are responsible for their own cash-flow prospects. The financial section of the headofce continues to monitor the short-term and long-term capital demands at the group level after collecting the cash owsprospects of all subsidiaries, to guarantee the sufficient cash reserve and cashable securities. Meanwhile, the financialsection of the head office continues to monitor the financial and non-financial indicators prescribed in credit-grantingagreements and loan agreements, to ensure that the Group can get sufcient line of credit from major nancial institutions,so as to satisfy the short-term and long-term capital demands of all subsidiaries of the Group.As at December 31, 2019, the various financial liabilities of the Group are listed as follows by due dates based onundiscounted contracted cash ows (including principal and interest):

Year 2019Within 1 year1 - 2 years2 - 5 yearsOver 5 yearsTotalShort-term borrowings22,371,944,008---22,371,944,008Notes payable3,420,945,451---3,420,945,451Accounts payable7,869,378,365---7,869,378,365Other payables711,389,996---711,389,996

Year 2019Within 1 year1 - 2 years2 - 5 yearsOver 5 yearsTotalNon-current liabilities maturingwithin one year

7,533,454,596---7,533,454,596Long-term borrowings-2,959,780,0135,249,838,271879,572,2059,089,190,489Long-term payables-683,803,609535,717,708609,414,9841,828,936,301

41,907,112,4163,643,583,6225,785,555,9791,488,987,18952,825,239,206As at December 31, 2018, the various financial liabilities of the Group are listed as follows by due dates based onundiscounted contracted cash ows (including principal and interest):

Year 2018

Within 1 year1 - 2 years2 - 5 yearsOver 5 yearsTotalShort-term borrowings16,831,239,955---16,831,239,955Notes payable2,732,404,222---2,732,404,222Accounts payable7,036,869,701---7,036,869,701Other payables1,098,580,447---1,098,580,447Non-current liabilities maturingwithin one year

4,383,617,609---4,383,617,609Long-term borrowings-7,708,456,6127,771,884,597509,025,15015,989,366,359Long-term payables-1,013,791,584524,739,421505,113,0742,043,644,079 32,082,711,9348,722,248,1968,296,624,0181,014,138,22450,115,722,372Market riskInterest rate riskThe Group’s interest rate risk is mainly from such long-term interest-bearing liabilities as long-term bank borrowings andlong-term payables. Floating-rate nancial liabilities expose the Group to cash ow interest rate risk while xed-rate nancialliabilities expose the Group to fair value interest rate risk. The Group determines the relative proportion of contracts withxed interest rate and contracts with oating interest rate according to the current market environment. As at December 31,2019, the Group’s long-term interest-bearing liabilities mainly were the oating rate contracts priced in USD, and the xedrate contracts priced in RMB.

The market interest rate uctuating risks the Group encounters are mainly relevant to the long-term liabilities where theinterest is calculated at the oating interest rate.The nance department in the headquarters of the Group continues monitoring and controlling the interest rate level ofthe Group. The increase in interest rate will increase the costs of the new interest-bearing debts and the interest expensesof interest-bearing debts failing to be paid up by the Group and subject to the interest calculation at oating interest rate,and will, signicantly and adversely, affect the Group's nancial results; the management will control partial interest rate riskbased on the newest market situation through the swap contract and other interest rate swap arrangements. In 2018 and2019, the Group had no interest rate swap arrangement.The following table shows the sensitivity analysis of the interest rate risk, reecting the effect of the reasonable andpossible changes in the interest rate on net prot or loss (through the impact on loan with oating interest rate) and the netamount of other comprehensive income after tax, based on the assumption of no change in other variables.Year 2019

Base pointIncreases /

(Decreased)

Net prot or lossIncreases / (Decreased)

Other comprehensiveincome, net of taxIncreases / (Decreased)

Total shareholders’equityIncreases /(Decreased)RMB100(58,026,976)-(58,026,976)RMB(100)58,026,976-58,026,976

Year 2018

Base pointIncreases /(Decreased)

Net prot orlossIncreases /(Decreased)

Other comprehensiveincome, net oftaxIncreases / (Decreased)

Total shareholders’equityIncreases /(Decreased)RMB100(48,269,201)-(48,269,201)RMB(100)48,269,201-48,269,201

Exchange rate riskThe Group is exposed to transactional exchange rate risk. Such risks are due to sales or purchases made by theoperating entity in currencies other than its functional currency. The Group’s main production is within the territory of China,but its sales and purchase is settled in USD. However, there still were foreign exchange risks in the foreign currency assetsand liabilities and future foreign currency transactions that have been recognized by the Group (foreign currency assetsand liabilities and foreign currency transactions are priced mainly in USD). The nance department of the Headquarters ofthe Group is responsible for supervising the scale of the Group's foreign currency transactions and foreign currency assetsand liabilities to minimize the foreign exchange risks; In the year, the Group adopted forward foreign exchange contract withRuble to USD to offset the exchange rate risk of sales transactions in Ruble.

The following table is a sensitivity analysis of exchange rate risk, reecting the assumption that all other variables willremain the same, when the USD exchange rate changes reasonably and possibly, it will affect the net prot or loss (due tothe change in fair value of monetary assets and liabilities) and other comprehensive income, net of tax (due to the change infair value of forward foreign exchange contract).Year 2019

USD exchange rateIncrease /(decrease)

Net prot or lossIncrease /(decrease)

Other comprehensive

income, net of taxIncrease /(decrease)

Total shareholders'equityIncrease /(decrease)RMB appreciation against USD1%40,098,106-40,098,106RMB depreciation against USD(1)%(40,098,106)-(40,098,106)Year 2018

USD exchange rateIncrease /(decrease)

Net prot or lossIncrease /(decrease)

Other comprehensiveincome, net of taxIncrease /(decrease)

Total shareholders'equityIncrease /(decrease)RMB appreciation against USD1%35,226,305-35,226,305RMB depreciation against USD(1)%(35,226,305)-(35,226,305)4 Capital managementThe Group’s objectives of capital management policy are to safeguard the Group’s ability to continue as a going concernin order to provide returns for shareholders and benets for other stakeholders and to maintain an optimal capital structure toreduce the cost of capital.In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,return capital to shareholders, issue new shares, borrow new funds or sell assets to reduce debt.The total capital of the Group is the shareholders' equity as listed in the consolidated balance sheet. The Group is notsubject to external mandatory capital requirements and makes use of the asset-liability ratio to monitor capital. This ratiois calculated by the net debt divided by total capital. The net debt is the total borrowing (including Short-term borrowingslisted in the consolidated balance sheet, other non-current liabilities due within one-year, Long-term borrowings, otherpayables and interest-bearing liabilities in long-term payables) minus cash and cash equivalents. The total capital is the totalshareholders’ equity plus net debt.

As at December 31, 2019 and December 31, 2018, the liability ratio of the Group is listed as follows:

Year 2019Year 2018Debt ratio67%66%

XI. Disclosure of fair value

1 Assets and liabilities measured at the fair valueYear 2019

Inputs used in the fair value measurementWith quoted price inthe activemarket(Level 1)

Important observableinput value (Level 2)

Importantunobservable input

value (Level 3)

TotalContinuous measurement at fair valueFinancial assets held for trading-Equity instrument investments--8,438,2788,438,278Equity of listed companies1,709,118,540--1,709,118,540-Foreign currency options contract-22,235,244-22,235,244Receivables nancing--406,408,604406,408,604Investment in other equity instruments--61,981,26861,981,268

1,709,118,54022,235,244476,828,1502,208,181,934Continuous measurement at fair valueFinancial liabilities held for trading-Forward foreign exchange contract-7,312,741-7,312,741Year 2018

Inputs used in the fair value measurementWith quoted price inthe activemarket

(Level 1)

Important observableinput value (Level 2)

Importantunobservable input

value (Level 3)

TotalFinancial assetsFinancial assets measured at fairvalue through current prot or loss

-Forward foreign exchange contract-44,481,806-44,481,806-Equity instrument investments--8,438,2788,438,278Available-for-sale equity instruments1,171,539,394--1,171,539,394

1,171,539,39444,481,8068,438,2781,224,459,478

The Group regards the date when the conversion of levels occurs as the time point of the conversion of all levels. Therewas no conversion among levels in this year.Where there is an active market traded for a nancial instrument, the Group shall adopt the quoted price in the activemarket to determine the fair value thereof; where there is no active market traded for a nancial instrument, the Group shalladopt value appraisal techniques to determine its fair value. The valuation models used are discounted cash ow model. Theinput value of valuation techniques mainly includes the risk-free interest rate or forward exchange rate.Relevant information about the measurement of fair value at level 2 as follows:

Year 2019Observable input valueFair valueValuation techniqueNameScopeFinancial assets held for trading- EUR options contract13,571,924

Cash owDiscounting model

RMB-EUR conversionForward foreign exchange

7.8518 to 7.9009

- GBP options contract8,663,320

Cash owDiscounting model

RMB-EUR conversionForward foreign exchange

Financial liabilities held for trading- EUR Forward foreign exchangecontract

7,312,741

Cash owDiscounting model

RMB-EUR conversionForward foreign exchange

7.8331 to 7.8518

The signicant and unobservable input value of fair value measurement at Level 3 is as follows:

Year 2019Unobservable input valueFair valueValuation techniqueNameWeighted averageFinancial assets held for trading-Equity instrument investments

8,438,278

Discounted cash ow

mode

Weighted average capital cost11%Receivables nancing406,408,604

Discounted cash owmode

Similar open market Lending rate4.4%Investment in other equityinstruments

61,981,268

Market comparablecompany model

Liquidity discount P/B ratio ofcomparable company

29%1.22 Assets and liabilities disclosed at fair valueThe financial assets and liabilities measured at amortized cost of the Group mainly include monetary funds, notesreceivable and accounts receivable, other receivables, long-term receivables, non-current assets maturing within one-year,short-term borrowings, notes payable, accounts payable, long-term borrowings, and non-current liabilities maturing withinone year, etc.The management has evaluated the monetary funds, accounts receivables, notes payable and accounts payable, andthe fair value is equal to the book value due to short remaining termThe long-term receivables of the Group are the receivables with oating rate, and the difference between the book valueand fair value is small.As for the long-term borrowings and long-term payables, the book value shall be determined by the future cash owspecied in the contract after discounting according to the interest rate which has comparable credit rating on the market andprovides almost the same cash ow under the same conditions, and the difference between the book value and such fairvalue is small.X. Related parties and related party transactions1 Parent company

Registrationplace

Nature ofbusiness

Registered

capital

Shareholding ratioin the Company (%)

Voting ratio in theCompany (%)China CommunicationsConstruction Group Co., Ltd.

Beijing City

Port projectcontracting andrelated business

5,855,423,83046.22946.229The nal controlling party of the Company is the China Communications Construction Group Co., Ltd.2 SubsidiariesFor details of subsidiaries, please refer to Note VII (1).3 Joint ventures and associatesFor details of joint ventures and associates, please refer to Note VII (2).4 Other related parties

Relationship with related partyChina Communications Construction Company Ltd.Under the control of the same parent companyCCCC INTERNATIONAL SHIPPING CORP.Under the control of the same parent companyZhen Hwa Harbour Construction Co., Ltd.Under the control of the same parent companyHainan CCCC Fourth Harbor Construction Co., Ltd.Under the control of the same parent companyRoad & Bridge International Co., Ltd.Under the control of the same parent companyCCCC Nanjing Weisanlu River Tunnel Co., Ltd.Under the control of the same parent companyShanghai Jiangtian Industrial Co., Ltd.Under the control of the same parent company

Relationship with related partyShanghai Communications Construction Contracting Co., Ltd.Under the control of the same parent companyZhenhua Engineering Co., Ltd.Under the control of the same parent companyYueyang Chenglingji New Port Co., Ltd.Under the control of the same parent companyChina Harbour Engineering Co., Ltd.Under the control of the same parent companyChina Communications Materials & Equipment Co., Ltd.Under the control of the same parent companyChina Road & Bridge CorporationUnder the control of the same parent companyChuwa Bussan Co., Ltd.Under the control of the same parent companyCCCC Finance Company Ltd.Under the control of the same parent companyCCCC Second Highway Engineering Co., Ltd.Under the control of the same parent companyCCCC Second Highway Consultants Co., Ltd.Under the control of the same parent companyCCCC Second Harbor Engineering Co., Ltd.Under the control of the same parent companyCCCC Third Highway Engineering Co. Ltd.Under the control of the same parent companyCCCC Third Harbor Engineering Co., Ltd.Under the control of the same parent companyCCCC Third Harbor Consultants Co., Ltd.Under the control of the same parent companyCCCC Fourth Highway Engineering Co., Ltd.Under the control of the same parent companyCCCC Fourth Harbor Engineering Co., Ltd.Under the control of the same parent companyCCCC First Harbor Consultants Co., Ltd.Under the control of the same parent companyTransportation Construction Engineering Branch of CCCC Third HarborEngineering Co., Ltd.

Under the control of the same parent companyConstruction Engineering Branch of CCCC Third Highway Engineering Co. Ltd.Under the control of the same parent companyCCCC First Highway Engineering Co., Ltd.Under the control of the same parent companyCCCC First Harbor Engineering Co., Ltd.Under the control of the same parent companyCCCC First Harbor Consultants Co., Ltd.Under the control of the same parent companyCCCC - SHEC Second Highway Engineering Co., Ltd.Under the control of the same parent companyCCCC - SHEC Third Highway Engineering Co., Ltd.Under the control of the same parent companyCCCC - SHEC Fourth Highway Engineering Co., Ltd.Under the control of the same parent companyCCCC - SHEC First Highway Engineering Co., Ltd.Under the control of the same parent companyNo.1 Engineering Co., Ltd. of CCCC Second Harbor Engineering Co., Ltd.Under the control of the same parent companyNo.2 Engineering Co., Ltd. of CCCC Second Harbor Engineering Co., Ltd.Under the control of the same parent companyChina Communications 2nd Navigational Bureau 3rd Engineering Co., Ltd.Under the control of the same parent companyNo.4 Engineering Co., Ltd. of CCCC Second Harbor Engineering Co., Ltd.Under the control of the same parent companyCCCC Highway Bridges National Engineering Research Centre Co., Ltd.Under the control of the same parent companyCCCC Guangzhou Dredging Co., Ltd.Under the control of the same parent companyCCCC Marine Construction and Development Co., Ltd.Under the control of the same parent companyCTTIC Shanghai Co., Ltd.Under the control of the same parent companyCCCC East China Investment Co., Ltd.Under the control of the same parent companyCCCC Electrical and Mechanical Engineering Co., Ltd.Under the control of the same parent companyRoad & Bridge South China Engineering Co., Ltd.Under the control of the same parent companyRoad & Bridge International Co., Ltd.Under the control of the same parent companyCCCC Nanjing Trafc Engineering Management Co., Ltd.Under the control of the same parent companyNo.2 Engineering Co., Ltd. of CCCC Third Harbor Engineering Co., Ltd.Under the control of the same parent companyNo.3 Engineering Co., Ltd. of CCCC Third Harbor Engineering Co., Ltd.Under the control of the same parent companyXing An Ji Engineering Co., Ltd. of CCCC Third Harbor Engineering Co., Ltd.Under the control of the same parent companyCCCC Shanghai Dredging Co., Ltd.Under the control of the same parent companyCCCC Shanghai Equipment Engineering Co., Ltd.Under the control of the same parent companyCCCC Dredging (Group) Co., Ltd.Under the control of the same parent company

Relationship with related partyCCCC Water Transportation Planning and Design Institute Co., Ltd.Under the control of the same parent companyNo.2 Engineering Co., Ltd. of CCCC Fourth Harbor Engineering Co., Ltd.Under the control of the same parent companyCCCC Tunnel Engineering Company LimitedUnder the control of the same parent companyBinhai Environmental Protection Dredging Co., ltd. of CCCC Tianjin DredgingCo., Ltd.

Under the control of the same parent companyCCCC Tianjin Port Waterway Prospection & Design Research Institute Co., Ltd.Under the control of the same parent companyHainan Industry Co., ltd. of CCCC Tianjin Dredging Co., Ltd.Under the control of the same parent companyCCCC - SHEC Electrical Engineering Co., Ltd.Under the control of the same parent companyElectrication Co., Ltd. of CCCC Tunnel Engineering Company LimitedUnder the control of the same parent companyCCCC (Zhoushan) Dredging Co., Ltd.Under the control of the same parent companyCCCC Tianjin Industry and Trade Co., Ltd.Under the control of the same parent companyCCCC Tianjin Dredging Co., Ltd.Under the control of the same parent companyCCCC WuHan Harbour Engineering Design and Research Co., Ltd.Under the control of the same parent companyThe Sixth Engineering Co., Ltd. of CCCC First Highway Engineering Co., Ltd.Under the control of the same parent companyInstallation Engineering Co., Ltd. of CCCC First Harbor Engineering Co. Ltd.Under the control of the same parent companyCCCC-FHEC Urban Trafc Engineering Co., Ltd.Under the control of the same parent companyNo.2 Engineering Co., Ltd. of CCCC First Harbor Engineering Co., Ltd.Under the control of the same parent companyNo.1 Engineering Co., Ltd. of CCCC First Harbor Engineering Co., Ltd.Under the control of the same parent companyCCCC Leasing Jiahua No.2 Co. Ltd.Under the control of the same parent companyCCCC Leasing Jiahua No.1 Co., Ltd.Under the control of the same parent companyNo.Three Engineering Co., Ltd. of CCCC First Highway Engineering Co., Ltd.Under the control of the same parent companyCCCC First Highway Fifth Engineering Co., Ltd.Under the control of the same parent companyCCCC Guidu Highway Construction Co., Ltd.Under the control of the same parent companyCCCC Guangzhou Logistics Co., Ltd.Under the control of the same parent companyCCCC SHEC Chengdu Urban Construction Engineering Co., Ltd.Under the control of the same parent companyHong Kong Marine Construction LimitedUnder the control of the same parent companyCCCC-FHEC Bridge and Tunnel Engineering Co., Ltd.Under the control of the same parent companyCCCC Infrastructure Maintenance Group Co., Ltd.Under the control of the same parent companyCCCC Yancheng Construction and Development Co., Ltd.Under the control of the same parent companyCCCC Chengdu Rail Transit Investment and Construction Co., Ltd.Under the control of the same parent companyCCCC Shanghai Channel Equipment Industry Co., Ltd.Under the control of the same parent companyConstruction Materials Co., Ltd, CCCC Third Harbor Engineering Co., Ltd.Under the control of the same parent companyCNPC & CCCC Petroleum Sales Co., Ltd.Under the control of the same parent companyTianjin Dredging Co., Ltd.Under the control of the same parent companyShanghai Zhensha Longfu Machinery Co., Ltd.Under the control of the same parent companyRoad & Bridge East China Engineering Co., Ltd.Under the control of the same parent companyCCCC National Engineering Research Center of Dredging Technology andEquipment

Under the control of the same parent companyCCCC Xi’an Road Construction Machinery Co., Ltd.Under the control of the same parent companyCCCC Highway Consultants Co., Ltd.Under the control of the same parent companyCCCC Financial Leasing Co., Ltd.Under the control of the same parent companyFriede&Goldman, Llc.Under the control of the same parent companyHaiwei Engineering Construction Co., Ltd., of FHEC of CCCCUnder the control of the same parent companyCCCC North Industrial Co., Ltd.Under the control of the same parent companyShanghai China Communications Water Transportation Design & ResearchCo., Ltd.

Under the control of the same parent company

Relationship with related partyCCCC First Highway Consultants Co., Ltd.Under the control of the same parent companyWuhan Hangke Logistics Company LimitedUnder the control of the same parent companyXiangtan CCCC Infrastructure Investment and Construction Co., Ltd.Under the control of the same parent company5 Main transactions between the Group and its related parties

The Group's transactions with related parties are priced on the basis of mutual agreement and with reference to market prices.

(1) Related-party goods and service transactions

Sales of goods and rendering of labor services or operating lease to related parties

Year 2019Year 2018China Road & Bridge Corporation 1,678,140,641 358,243,636CCCC Financial Leasing Co., Ltd. 667,073,687 502,962,177CCCC Second Harbor Engineering Co., Ltd. 337,523,772 101,372,715Jiangsu Longyuan Zhenhua Marine Engineering Co., Ltd. 248,918,845 151,822,406China Communications Construction Company Ltd. 231,935,329 89,640,834CCCC Second Highway Engineering Co., Ltd. 230,557,910 319,093,357CCCC First Highway Engineering Co., Ltd. 126,158,585 125,052,034CCCC Electrical and Mechanical Engineering Co., Ltd. 124,928,355 51,393,504CCCC Third Harbor Engineering Co., Ltd. 113,127,045 110,053,924Road & Bridge International Co., Ltd. 95,683,938 187,488,462China Harbour Engineering Co., Ltd. 45,102,497 141,896,122CCCC Third Highway Engineering Co. Ltd. 30,678,385 22,231,105Installation Engineering Co., Ltd. of CCCC First HarborEngineering Co. Ltd.

28,657,101 91,653,393CCCC - SHEC Third Highway Engineering Co., Ltd. 26,395,514 5,617,718Tianjin Dredging Co., Ltd. 21,822,759 -CCCC Marine Engineering & Technology Research CenterCo., Ltd.

8,345,339 1,057,048Hong Kong Marine Construction Limited 7,992,047 6,550,315CCCC Fourth Highway Engineering Co., Ltd. 7,874,250 7,500,000No.3 Engineering Co., Ltd. of CCCC Third Harbor EngineeringCo., Ltd.

7,230,066 -CCCC First Harbor Engineering Co., Ltd. 6,829,633 -CCCC Tunnel Engineering Company Limited 6,135,411 82,647,412No.4 Engineering Co., Ltd. of CCCC Second HarborEngineering Co., Ltd.

6,037,290 -CCCC Tianjin Dredging Co., Ltd. 4,716,981 13,801,887China Communications 2nd Navigational Bureau 3rdEngineering Co., Ltd.

3,750,000 -Shanghai Communications Construction Contracting Co., Ltd. 12,236 24,459,644ZPMC-OTL MARINE CONTRACTOR LIMITED - 137,098,857No.1 Engineering Co., Ltd. of CCCC Second HarborEngineering Co., Ltd.

- 34,589,744Road & Bridge South China Engineering Co., Ltd - 30,377,284CCCC Second Highway Consultants Co., Ltd. - 19,181,054Binhai Environmental Protection Dredging Co., ltd. of CCCCTianjin Dredging Co., Ltd.

- 16,810,345

Year 2019Year 2018CCCC First Harbor Consultants Co., Ltd. - 16,524,972CCCC First Highway Fifth Engineering Co., Ltd. - 12,905,660No.Three Engineering Co., Ltd. of CCCC First HighwayEngineering Co., Ltd.

- 9,654,872CCCC - SHEC First Engineering Co., Ltd. - 7,304,022No.1 Engineering Co., Ltd. of CCCC First Harbor EngineeringCo., Ltd.

- 5,264,957CCCC Third Harbor Consultants Co., Ltd. - 5,018,319CCCC Guangzhou Dredging Co., Ltd. - 4,664,101ZPMC Mediterranean Liman Makinalari Ticaret Anonim Sirketi - 4,262,198CCCC - SHEC Fourth Highway Engineering Co., Ltd. - 2,949,470Friede & Goldman, Llc. - 2,673,016Chuwa Bussan Co., Ltd. - 2,023,654ZPMC Changzhou Coatings Co., Ltd. - 1,396,226CCCC Tianjin Industry and Trade Co., Ltd. - 674,414CCCC(Tianjin) Eco-environmental Protection Design &Research Institute Co., Ltd.

- 207,547CCCC Highway Consultants Co., Ltd. - 65,517CCCC Guangzhou Logistics Co., Ltd. - 56,604Hainan CCCC Fourth Harbor Construction Co., Ltd. - 13,248CCCC - SHEC Second Highway Engineering Co., Ltd. - 7,727

4,065,627,616 2,708,261,501Receipt of labor services from related parties

Year 2019Year 2018No.2 Engineering Co., Ltd. of CCCC Third Harbor EngineeringCo., Ltd.

1,559,123,096 435,493,711CCCC Fourth Highway Engineering Co., Ltd.326,099,884 180,145,846No.2 Engineering Co., Ltd. of CCCC Fourth HarborEngineering Co., Ltd.

166,442,076 58,238,659CCCC Third Harbor Engineering Co., Ltd.138,044,572 171,166,061Xing An Ji Engineering Co., Ltd. of CCCC Third HarborEngineering Co., Ltd.

126,919,874 -CCCC Third Highway Engineering Co. Ltd.102,954,724 26,704,324CCCC Second Harbor Engineering Co., Ltd.44,626,778 319,635,901CCCC Water Transportation Planning and Design Institute Co., Ltd.44,003,688 9,564,649China Communications 2nd Navigational Bureau 3rdEngineering Co., Ltd.

37,974,356 13,181,025CCCC - SHEC Second Highway Engineering Co., Ltd.32,728,018 51,067,364ZPMC Southeast Asia Pte. Ltd31,842,242-CCCC Tianjin Dredging Co., Ltd.30,385,226 119,241,651CCCC Shanghai Dredging Co., Ltd.27,320,344 44,255,071China Communications Materials & Equipment Co., Ltd.17,482,045 318,966CCCC Second Highway Consultants Co., Ltd.12,744,480 22,139,413China Road & Bridge Corporation9,772,546 -ZPMC Mediterranean Liman Makinalari Ticaret Anonim Sirketi9,022,814 8,502,537

Year 2019Year 2018Installation Engineering Co., Ltd. of CCCC First HarborEngineering Co. Ltd.

7,202,999 5,974,138China Communications Construction Company Ltd.6,970,318 3,701,020CCCC Shanghai Equipment Engineering Co., Ltd.4,533,910 31,619,960Shanghai Communications Construction Contracting Co., Ltd.3,843,677 1,254,523CCCC Highway Bridges National Engineering ResearchCentre Co., Ltd.

2,449,541 -CCCC Marine Engineering & Technology Research Center Co., Ltd.1,599,377 3,425,753CCCC First Highway Consultants Co., Ltd.1,153,073 -Shanghai China Communications Water Transportation Design &Research Co., Ltd.

1,008,394 -CCCC Third Harbor Consultants Co., Ltd.400,000 85,470CCCC (Zhoushan) Dredging Co., Ltd. 350,748 -No.Three Engineering Co., Ltd. of CCCC First HighwayEngineering Co., Ltd.

343,394 -CCCC First Harbor Consultants Co., Ltd.128,440 26,259,626CCCC Fourth Harbor Engineering Co., Ltd.86,849 -CCCC Electrical and Mechanical Engineering Co., Ltd.- 183,813,849CCCC First Harbor Engineering Co., Ltd.- 24,659,835CCCC Leasing Jiahua No.2 Co. Ltd.- 17,399,943No.1 Engineering Co., Ltd. of CCCC First Harbor EngineeringCo., Ltd.

- 16,698,341CCCC - SHEC Third Highway Engineering Co., Ltd.- 12,990,744No.3 Engineering Co., Ltd. of CCCC Third Harbor EngineeringCo., Ltd.

- 10,326,479Chuwa Bussan Co., Ltd.- 7,063,023CCCC Tunnel Engineering Company Limited- 4,536,422Shanghai Jiangtian Industrial Co., Ltd.- 2,594,773

2,747,557,483 1,812,059,077

Purchase of goods from related parties

Year 2019Year 2018ZPMC Changzhou Coatings Co., Ltd.145,138,516108,484,161CCCC Shanghai Equipment Engineering Co., Ltd.51,424,063210,238,846Chuwa Bussan Co., Ltd.36,202,21119,663,204CCCC Tianjin Port Waterway Prospection & Design ResearchInstitute Co., Ltd.

9,951,061-Shanghai Jiangtian Industrial Co., Ltd.9,429,66765,858,536CCCC Tianjin Dredging Co., Ltd.5,475,264-CCCC North Industrial Co., Ltd.3,841,523-CCCC Marine Engineering & Technology Research Center Co., Ltd.2,451,616-CCCC Tianjin Industry and Trade Co., Ltd.1,669,824-CNPC & CCCC Petroleum Sales Co., Ltd.1,475,1211,487,613China Communications Materials & Equipment Co., Ltd.380,531209,106CCCC Third Harbor Consultants Co., Ltd.353,982-CCCC Shanghai Channel Equipment Industry Co., Ltd.320,806302,564China Road & Bridge Corporation64,214-

Year 2019Year 2018Jiangsu Longyuan Zhenhua Marine Engineering Co., Ltd.-10,643,590CCCC National Engineering Research Center of DredgingTechnology and Equipment

-1,245,211China Communications Construction Company Ltd.-258,621CCCC Water Transportation Planning and Design Institute Co., Ltd.-237,931

268,178,399 418,629,383

(2) Paying dividends to related parties

Year 2019Year 2018Zhenhua Engineering Co., Ltd.44,921,03637,434,197China Communications Construction Company Ltd. 42,777,102 35,647,585China Communications Construction Group Co., Ltd. 33,161,169 27,634,307Zhen Hwa Harbour Construction Co., Ltd.916,756763,963

121,776,063101,480,052

(3) Deposits in (withdrawal of deposits from) related parties

Year 2019Year 2018CCCC Finance Company Ltd.433,312,793(479,100,507)China Communications Construction Company Ltd.(3,733,158)(19,058,644)

429,579,635(498,159,151)

(4) Borrowings from related parties

Year 2019Year 2018CCCC Financial Leasing Co., Ltd.413,361,212-CCCC Finance Company Ltd.50,000,000350,000,000

463,361,212350,000,000

(5) Interest collected from related parties

Year 2019Year 2018China Communications Construction Company Ltd.2,101,285341,322CCCC Finance Company Ltd.465,2611,015,732

2,566,5461,357,054

(6) Interest paid to related parties

Year 2019Year 2018CCCC Leasing Jiahua No.1 Co., Ltd.46,946,94461,347,010CCCC Financial Leasing Co., Ltd.26,460,64527,841,630CCCC Finance Company Ltd.18,245,22926,374,292CCCC Leasing Jiahua No.2 Co. Ltd.14,691,72319,035,746

106,344,541134,598,678

(7) Other related party transactions

Year 2019Year 2018Remuneration of key management personnel11,609,90011,074,400The number of key management personnel in the Group for 2019 is 25 (in 2018: 25). Remuneration for new recruits andresigned personnel is based on length of service, while remuneration for others is based on the full year.

6 Commitments between the Group and related parties

The Group's commitments related to related party contracted for but not provided in the balance sheet as at the balancesheet date:

Rendering of services for the Group by related partiesYear 2019Year 2018CCCC First Highway Engineering Co., Ltd.1,386,937,372449,685,317CCCC Third Harbor Engineering Co., Ltd.1,274,486,2841,150,776,369CCCC Tianjin Dredging Co., Ltd.681,997,993770,500,180CCCC Fourth Highway Engineering Co., Ltd.338,361,768544,767,057No.1 Engineering Co., Ltd. of CCCC First Harbor EngineeringCo., Ltd.

56,568,99656,568,996CCCC Shanghai Dredging Co., Ltd.45,932,12273,170,956CCCC Tunnel Engineering Company Limited158,070158,070CCCC Second Highway Consultants Co., Ltd.-1,766,362

3,784,442,6053,047,393,307Lease assets to related partiesYear 2019Year 2018Zhenhua Marine Energy (Hong Kong) Co., Ltd.891,356,7811,206,719,318

Standby leasing agreement signed with the related partiesOn December 16, 2015, the Company signed ship rental standby agreement with CCCC Leasing Jiahua No.1 Co., Ltdand CCCC Leasing Jiahua No.2 Co., Ltd (collectively referred to as “CCCC Jiahua”), with the rental term from March 5, 2016to December 5, 2021.The contract would come into effect when the ship rental agreement signed by the subsidiary of theCompany and CCCC Jiahua couldn’t be performed normally. As at December 31, 2019, the maximum payment amount ofthe contract was RMB 390,667,201 (as at December 31, 2018: RMB 509,837,715).

Sales of goods and rendering of labor services or lease to related parties

Year 2019Year 2018China Road & Bridge Corporation 830,028,535 1,594,741,615CCCC Second Highway Engineering Co., Ltd. 182,569,664 7,482,377China Communications Construction Company Ltd. 153,839,131 431,794,106CCCC Financial Leasing Co., Ltd. 54,987,809 520,893,238CCCC Second Harbor Engineering Co., Ltd. 53,549,590 333,337,005CCCC Electrical and Mechanical Engineering Co., Ltd. 35,920,354 22,754,735China Harbour Engineering Co., Ltd. 22,547,495 85,809,151Friede & Goldman, Llc. 21,714,704 19,160,384Jiangsu Longyuan Zhenhua Marine Engineering Co., Ltd. 15,936,240 6,361,922CCCC Third Harbor Engineering Co., Ltd. 5,470,566 26,223,595CCCC First Harbor Engineering Co., Ltd. 1,795,091 215,550,525China Communications 2nd Navigational Bureau 3rdEngineering Co., Ltd.

14,538 14,538Road & Bridge International Co., Ltd. - 46,506,516CCCC Tunnel Engineering Company Limited - 22,489,719No.Three Engineering Co., Ltd. of CCCC First HighwayEngineering Co., Ltd.

- 7,992,240Chuwa Bussan Co., Ltd. - 2,420,013No.4 Engineering Co., Ltd. of CCCC Second HarborEngineering Co., Ltd.

- 12,236Road & Bridge South China Engineering Co., Ltd - 6,060CCCC - SHEC Third Highway Engineering Co., Ltd. - 3,242

1,378,373,7173,343,553,217

7 Balance of receivables from related parties

Year 2019Year 2018Book balance

Provision for

bad debts

Book balance

Provision forbad debtsAccounts receivableCCCC Financial Leasing Co., Ltd.226,485,073-14,850,000-Jiangsu Longyuan Zhenhua Marine Engineering Co., Ltd.204,812,244-101,223,377-CCCC First Harbor Engineering Co., Ltd.130,700,172-164,008,643-CCCC Second Harbor Engineering Co., Ltd.112,525,256-105,083,335-CCCC Second Highway Engineering Co., Ltd.104,419,393-63,391,227-CCCC Tunnel Engineering Company Limited92,085,891-109,822,612-No.1 Engineering Co., Ltd. of CCCC First Harbor EngineeringCo., Ltd.

59,832,510-85,793,713-Road & Bridge International Co., Ltd.55,526,242-9,118,927-CCCC Third Harbor Engineering Co., Ltd.48,017,218-48,250,022-China Communications Construction Company Ltd.44,091,360-34,063,397-CCCC First Highway Engineering Co., Ltd.43,230,857-4,694,962-ZPMC-OTL MARINE CONTRACTOR LIMITED33,140,688-49,354,814-China Communications 2nd Navigational Bureau 3rdEngineering Co., Ltd.

23,938,106-84,077,626-No.1 Engineering Co., Ltd. of CCCC Second HarborEngineering Co., Ltd.

21,712,500-2,750,000-ZPMC Mediterranean Liman Makinalari Ticaret Anonim Sirketi19,559,532-17,250,552-China Road & Bridge Corporation18,076,000-167,321,393-Friede & Goldman, Llc.17,890,465-15,970,344-Xiangtan CCCC Infrastructure Investment and ConstructionCo., Ltd.

15,052,800---CCCC-FHDI Engineering Co., Ltd.14,796,000-12,592,000-CCCC First Harbor Consultants Co., Ltd.13,290,419---Road & Bridge South China Engineering Co., Ltd13,178,839-26,581,168-CCCC Marine Engineering & Technology Research Center Co., Ltd.12,822,927-1,100,000-CCCC Fourth Harbor Engineering Co., Ltd.12,750,000-12,000,000-Zhenhua Marine Energy (HK) Co., Ltd.12,013,016-11,818,430-CCCC Third Highway Engineering Co. Ltd.11,363,591-22,746,125-CCCC - SHEC Second Highway Engineering Co., Ltd.8,125,713-4,817,096-China Harbour Engineering Co., Ltd.7,338,237-8,779,024-Road & Bridge International Co., Ltd.6,953,532-39,658,009-Hainan CCCC Fourth Harbor Construction Co., Ltd.6,200,000-6,200,000-No.2 Engineering Co., Ltd. of CCCC Second HarborEngineering Co., Ltd.

6,199,367-7,808,358-The Sixth Engineering Co., Ltd. of CCCC First HighwayEngineering Co., Ltd.

6,098,300-6,098,300-CCCC Shanghai Equipment Engineering Co., Ltd.6,000,000-844,000-CCCC Tianjin Industry and Trade Co., Ltd.5,058,290---CCCC-FHEC Urban Trafc Engineering Co., Ltd.4,303,584-3,415,780-

Year 2019Year 2018Book balance

Provision for

bad debts

Book balance

Provision for

bad debtsCCCC Fourth Highway Engineering Co., Ltd.4,000,000---ZPMC Southeast Asia Pte. Ltd3,097,777---Hainan Industry Co., ltd. of CCCC Tianjin Dredging Co., Ltd.2,156,675---Installation Engineering Co., Ltd. of CCCC First HarborEngineering Co. Ltd.

1,311,259-1,197,764-No.Three Engineering Co., Ltd. of CCCC First HighwayEngineering Co., Ltd.

1,126,432---CCCC - SHEC Third Highway Engineering Co., Ltd.1,015,313-5,548,004-CCCC - SHEC Electrical Engineering Co., Ltd.770,321---Xing An Ji Engineering Co., Ltd. of CCCC Third HarborEngineering Co., Ltd.

331,860-331,860-Electrication Co., Ltd. of CCCC Tunnel Engineering CompanyLimited

172,787---CCCC Third Harbor Consultants Co., Ltd.150,000-150,000-No.2 Engineering Co., Ltd. of CCCC First Harbor EngineeringCo., Ltd.

130,500-5,019,557-CCCC Guidu Highway Construction Co., Ltd.79,332-79,332-CCCC Guangzhou Dredging Co., Ltd.69,200---Yueyang Chenglingji New Port Co., Ltd.48,680-84,660-Hong Kong Marine Construction Limited--137,133,578-CCCC - SHEC Fourth Highway Engineering Co., Ltd.--7,755,561-No.2 Engineering Co., Ltd. of CCCC Fourth HarborEngineering Co., Ltd.

--564,537-CCCC SHEC Chengdu Urban Construction Engineering Co., Ltd.--277,527-CCCC Electrical and Mechanical Engineering Co., Ltd.--250,000-CCCC(Tianjin) Eco-environmental Protection Design &Research Institute Co. Ltd.

--220,000-CCCC Guangzhou Logistics Co., Ltd.--60,000-

1,432,048,258 -1,400,155,614-Notes receivableCCCC Second Harbor Engineering Co., Ltd.--36,868,000-Road & Bridge International Co., Ltd.--27,223,000-

--64,091,000-

Year 2019Book balanceProvision for bad debtsReceivables nancingRoad & Bridge East China Engineering Co., Ltd.46,389,055CCCC Second Harbor Engineering Co., Ltd.15,998,000-CCCC Fourth Harbor Engineering Co., Ltd.8,045,547-CCCC First Harbor Engineering Co., Ltd.4,000,000CCCC Electrical and Mechanical Engineering Co., Ltd.2,000,000-

76,432,602-

Year 2019Year 2018Book balance

Provision forbad debts

Book balance

Provision for

bad debtsOther receivablesZhenhua Marine Energy (HK) Co., Ltd.164,124,678164,124,678164,124,678164,124,678China Communications Construction Company Ltd.47,845,576-54,620,094-CCCC Financial Leasing Co., Ltd.20,000,000-176,800,000-ZPMC Southeast Asia Pte. Ltd13,890,516---CCCC Third Harbor Engineering Co., Ltd.11,312,360---CCCC East China Investment Co., Ltd.9,129,287---CCCC First Highway Fifth Engineering Co., Ltd.8,897,903---CCCC Highway Consultants Co., Ltd.4,629,287---No.3 Engineering Co., Ltd. of CCCC Third Harbor EngineeringCo., Ltd.

3,975,000---CCCC Yancheng Construction and Development Co., Ltd. 3,357,729-750,908-CCCC Tianhe Xi’an Equipment Manufacturing Co., Ltd.3,199,744-164,787-CCCC Second Highway Consultants Co., Ltd.3,180,000-3,180,000-CCCC Third Highway Engineering Co. Ltd.3,132,473-732,473-CCCC Marine Engineering & Technology Research CenterCo., Ltd.

1,100,000---Installation Engineering Co., Ltd. of CCCC First HarborEngineering Co. Ltd.

600,000-300,000-CCCC Second Highway Engineering Co., Ltd.200,000-1,000,000-Shanghai Jiangtian Industrial Co., Ltd.77,552---CCCC Tunnel Engineering Company Limited60,000-349-Shanghai Zhensha Longfu Machinery Co., Ltd.21,503-21,503-CCCC Second Harbor Engineering Co., Ltd.10,000---ZPMC Changzhou Coatings Co., Ltd.4,214---CCCC Nanjing Trafc Engineering Management Co., Ltd.--6,789,498-China Communications Construction Group Co., Ltd.--1,350,000-No.2 Engineering Co., Ltd. of CCCC Second HarborEngineering Co., Ltd.

--800,000-Road & Bridge East China Engineering Co., Ltd.--800,000-CCCC Third Harbor Consultants Co., Ltd.--250,000-CCCC Chengdu Rail Transit Investment and Construction Co., Ltd.--164,787-CCCC Infrastructure Maintenance Group Co., Ltd.--157,018CCCC-FHEC Bridge and Tunnel Engineering Co., Ltd. --100,000- 298,747,822164,124,678412,106,095164,124,678Advances to suppliersCCCC Marine Engineering & Technology Research CenterCo., Ltd.

767,382---ZPMC Southeast Asia Pte. Ltd102,910---Chuwa Bussan Co., Ltd.--7,141,035-China Communications Construction Company Ltd.--1,423,515-CCCC Shanghai Channel Equipment Industry Co., Ltd.--354,000-

Year 2019Year 2018Book balance

Provision forbad debts

Book balance

Provision for

bad debts870,292-8,918,550-Long-term receivablesCCCC Third Highway Engineering Co. Ltd.797,873-797,873-

797,873-797,873-

8 Balance of receivables from and payables to related parties

Year 2019Year 2018Accounts payableCCCC Fourth Highway Engineering Co., Ltd.218,797,193145,983,998CCCC Third Harbor Engineering Co., Ltd.154,812,290142,373,233No.2 Engineering Co., Ltd. of CCCC Fourth HarborEngineering Co., Ltd.

125,024,62642,885,407CCCC Shanghai Equipment Engineering Co., Ltd.81,410,40241,551,721CCCC Third Highway Engineering Co. Ltd.81,247,66530,977,016CCCC Tianjin Dredging Co., Ltd.78,800,49769,699,557CCCC First Highway Engineering Co., Ltd.71,000,83195,538,686CCCC - SHEC Second Highway Engineering Co., Ltd.30,900,741125,227,201China Communications 2nd Navigational Bureau 3rdEngineering Co., Ltd.

28,660,48784,371,458CCCC Second Harbor Engineering Co., Ltd.27,440,101140,174,674CCCC Second Highway Consultants Co., Ltd.25,578,96217,087,478No.1 Engineering Co., Ltd. of CCCC First Harbor EngineeringCo., Ltd.

23,818,22539,691,618CCCC First Harbor Engineering Co., Ltd.15,754,54945,054,549ZPMC Changzhou Coatings Co., Ltd.15,695,70715,543,890Shanghai Jiangtian Industrial Co., Ltd.13,898,98817,535,832Shanghai Communications Construction Contracting Co., Ltd.13,225,99816,046,390CCCC Shanghai Dredging Co., Ltd.13,133,51730,964,342CCCC Marine Engineering & Technology Research CenterCo., Ltd.

12,919,59910,118,782Jiangsu Longyuan Zhenhua Marine Engineering Co., Ltd.10,136,02810,532,751CCCC - SHEC Third Highway Engineering Co., Ltd.10,012,23019,811,475CCCC First Harbor Consultants Co., Ltd.8,694,17624,254,176No.3 Engineering Co., Ltd. of CCCC Third Harbor EngineeringCo., Ltd.

7,815,0187,815,018ZPMC Southeast Asia Pte. Ltd7,070,528-CCCC Water Transportation Planning and Design InstituteCo., Ltd.

6,547,8919,547,891CCCC National Engineering Research Center of DredgingTechnology and Equipment

5,205,113260,000Xing An Ji Engineering Co., Ltd. of CCCC Third HarborEngineering Co., Ltd.

4,327,35210,051,352CCCC Tianjin Industry and Trade Co., Ltd.3,589,6812,452,453CCCC North Industrial Co., Ltd.3,228,777-

Year 2019Year 2018CCCC Highway Bridges National Engineering ResearchCentre Co., Ltd.

2,670,000-No.2 Engineering Co., Ltd. of CCCC Third Harbor EngineeringCo., Ltd.

1,600,0001,600,000CCCC Tunnel Engineering Company Limited1,477,3082,477,307CCCC WuHan Harbour Engineering Design and ResearchCo., Ltd.

700,000700,000CCCC First Highway Consultants Co., Ltd.574,560-Shanghai China Communications Water TransportationDesign & Research Co., Ltd.

538,750-CCCC Electrical and Mechanical Engineering Co., Ltd.501,000-CNPC & CCCC Petroleum Sales Co., Ltd.391,0562,660,621CCCC Third Harbor Consultants Co., Ltd.385,980100,000ZPMC Mediterranean Liman Makinalari Ticaret Anonim Sirketi336,1271,217,089Construction Materials Co., Ltd, CCCC Third HarborEngineering Co., Ltd.

150,00016,067,701CTTIC Shanghai Co., Ltd.120,000-Installation Engineering Co., Ltd. of CCCC First HarborEngineering Co. Ltd.

77,5991,067,599China Communications Materials & Equipment Co., Ltd.30,000242,563Chuwa Bussan Co., Ltd.-272,058,371China Communications Construction Company Ltd.-4,388,938CCCC Tianjin Port Waterway Prospection & Design ResearchInstitute Co., Ltd.

-3,139,336CCCC Tianhe Xi’an Equipment Manufacturing Co., Ltd.-304,798CCCC Xi’an Road Construction Machinery Co., Ltd.-212,247 1,108,299,5521,501,787,518Notes payableCCCC Tianjin Industry and Trade Co., Ltd.66,393,97660,124,526CCCC Shanghai Equipment Engineering Co., Ltd.42,912,08212,667,489CCCC National Engineering Research Center of DredgingTechnology and Equipment

2,322,0002,726,050No.Three Engineering Co., Ltd. of CCCC First HighwayEngineering Co., Ltd.

374,300-CCCC (Zhoushan) Dredging Co., Ltd.246,887-CCCC Finance Company Ltd.-20,600,000CTTIC Shanghai Co., Ltd.-1,088,000CCCC Tianjin Port Waterway Prospection & Design ResearchInstitute Co., Ltd.

-1,269,000CCCC Xi’an Road Construction Machinery Co., Ltd.-1,910,224

112,249,245100,385,289Advances from customersCCCC Tunnel Engineering Company Limited 124,057,549 30,250,993Binhai Environmental Protection Dredging Co., ltd. of CCCCTianjin Dredging Co., Ltd.

53,943,315 70,058,100China Communications 2nd Navigational Bureau 3rdEngineering Co., Ltd.

13,651,291 8,917,608

Year 2019Year 2018Wuhan Hangke Logistics Company Limited 5,801,268 -CCCC Second Harbor Engineering Co., Ltd. 4,005,140 -CCCC First Highway Engineering Co., Ltd. 4,000,000 -CCCC Yancheng Construction and Development Co., Ltd. 1,340,000 -No.8 Engineering Co., Ltd. of CCCC First HighwayEngineering Co., Ltd.

1,200,000 -CCCC SHEC Chengdu Urban Construction Engineering Co., Ltd. 942,101 -Road & Bridge International Co., Ltd. 832,675 -ZPMC-OTL MARINE CONTRACTOR LIMITED 749,244 -Friede & Goldman, Llc. 713,623 -CCCC Third Harbor Engineering Co., Ltd. 600,000 -No.Three Engineering Co., Ltd. of CCCC First HighwayEngineering Co., Ltd.

600,000 -Jiangsu Longyuan Zhenhua Marine Engineering Co., Ltd. 366,574 -China Harbour Engineering Co., Ltd. 346,318 736,500Cranetech Global Sdn. Bhd. 233,005 -CCCC Shanghai Equipment Engineering Co., Ltd. 100,000 -Transportation Construction Engineering Branch of CCCCThird Harbor Engineering Co., Ltd.

56,758 -No.2 Engineering Co., Ltd. of CCCC Third Harbor EngineeringCo., Ltd.

- 1,891,307ZPMC Mediterranean Liman Makinalari Ticaret Anonim Sirketi - 558,589No.1 Engineering Co., Ltd. of CCCC First Harbor EngineeringCo., Ltd.

- 487,482China Communications Construction Company Ltd. - 182,513Yueyang Chenglingji New Port Co., Ltd. - 35,980 213,538,861113,119,072Other payablesChina Communications Construction Company Ltd. 101,284,894 101,209,468CCCC Tianjin Dredging Co., Ltd. 27,079,494 27,079,494Chuwa Bussan Co., Ltd. 6,269,873 6,269,873Shanghai Jiangtian Industrial Co., Ltd. 4,586,085 4,586,085CCCC Tunnel Engineering Company Limited 4,000,000 4,000,000China Harbour Engineering Co., Ltd. 3,625,000 3,625,000CCCC Third Highway Engineering Co. Ltd. 2,986,596 1,286,596China Communications Construction Group Co., Ltd. 1,600,544 1,672,705Tianjin Dredging Co., Ltd. 1,107,559 871,856CCCC Second Harbor Engineering Co., Ltd. 1,051,750 -CCCC Third Harbor Engineering Co., Ltd. 804,250 12,285,000CCCC Electrical and Mechanical Engineering Co., Ltd. 665,174 -Road & Bridge East China Engineering Co., Ltd. 448,442 525,186Zhenhua Engineering Co., Ltd. 346,005 346,005CCCC Water Transportation Planning and Design Institute Co., Ltd. 319,340 319,340CNPC & CCCC Petroleum Sales Co., Ltd. 300,000 -Jiangsu Longyuan Zhenhua Marine Engineering Co., Ltd. 250,329 143,395Shanghai Zhensha Longfu Machinery Co., Ltd. 150,124 146,558

Year 2019Year 2018ZPMC Changzhou Coatings Co., Ltd. 108,592 108,583No.2 Engineering Co., Ltd. of CCCC Fourth HarborEngineering Co., Ltd.

100,000 11,400CCCC Shanghai Equipment Engineering Co., Ltd. 89,000 89,000CCCC First Harbor Engineering Co., Ltd. 87,893 -CCCC Infrastructure Maintenance Group Co., Ltd. 72,477 -CCCC Nanjing Trafc Engineering Management Co., Ltd. 21,288 -Construction Engineering Branch of CCCC Third HighwayEngineering Co. Ltd.

20,000 -Zhen Hwa Harbour Construction Co., Ltd. 6,593 6,593CCCC Dredging (Group) Co., Ltd. - 88,219,383Road & Bridge International Co., Ltd. - 45,840,000CCCC Marine Construction and Development Co., Ltd. - 17,472,600CCCC Leasing Jiahua No.1 Co., Ltd. - 1,141,960CCCC - SHEC Fourth Highway Engineering Co., Ltd. - 1,000,000CCCC Finance Company Ltd. - 537,708

157,381,302318,793,788Short-term borrowingsCCCC Financial Leasing Co., Ltd.414,863,968-CCCC Finance Company Ltd.-50,000,000

414,863,96850,000,000Long-term borrowings

500,483,333500,000,000Non-current liabilities maturing within one yearCCCC Leasing Jiahua No.1 Co., Ltd.412,592,400405,909,257CCCC Financial Leasing Co., Ltd.203,727,814407,455,030CCCC Leasing Jiahua No.2 Co. Ltd.63,782,40062,749,257

680,102,614876,113,544Long-term payablesCCCC Tianjin Dredging Co., Ltd.139,682,457131,402,483CCCC Leasing Jiahua No.2 Co. Ltd.131,551,201192,169,601CCCC Leasing Jiahua No.1 Co., Ltd.131,551,200535,329,601CCCC Second Harbor Engineering Co., Ltd.82,663,04182,663,041CCCC Third Harbor Engineering Co., Ltd.16,923,59416,923,594No.2 Engineering Co., Ltd. of CCCC Fourth HarborEngineering Co., Ltd.

7,788,2417,788,241CCCC Financial Leasing Co., Ltd.-203,727,814

510,159,7341,170,004,375

9 Monetary funds deposited in the related parties

Year 2019Year 2018CCCC Finance Company Ltd. 435,344,0841,566,030China Communications Construction Company Ltd. -1,631,873

435,344,0843,197,903

XI. Commitments1 Signicant commitments

(1) Matters related to capital expenditure commitments

Commitments related to capital expenditure contracted for but not provided in the nancial statements as at the balancesheet date:

Year 2019Year 2018Buildings and constructions, machinery equipment591,419,876136,573,381

(2) Commitments related to operating lease

According to the irrecoverable operating lease contract concluded, the Group will at least pay rental as follows:

Year 2019Year 2018Within 1 year32,650,11058,661,8681-2 years20,566,30218,859,9302-3 years11,239,0448,864,867Over 3 years132,5964,849,513

64,588,05291,236,178

(3) L/C commitments

The Group had entrusted the bank to issue several L/Cs to purchase imported components and parts. As at December31, 2019, the unpaid amount under the L/Cs was about RMB 1,698,125,301(as at December 31, 2018: RMB 1,764,643,618).XII. Notes to items of the nancial statements of the Company1 Accounts receivableAging analysis of accounts receivable as follows:

Year 2019Year 2018Within 6 months4,189,416,1384,140,368,9207-12 months4,228,767,7411,014,352,2151-2 years1,279,501,4561,484,686,4472-3 years1,354,366,423592,012,4023-4 years476,274,707222,037,3054-5 years201,083,470106,717,390Over 5 years1,050,300,8461,073,312,115Sub-total12,779,710,7818,633,486,794Less: provision for bad debts1,590,733,3351,496,719,907

11,188,977,4467,136,766,887Changes in provision for bad debts of accounts receivable as follows:

Balance as at December

31, 2018

Balance as atJanuary 1, 2019

Provision in 2019Reversal in 2019

Balance as at December

31, 2019Year 20191,496,719,9071,571,486,934188,332,979169,086,5781,590,733,335Year 20181,307,045,9511,307,045,951385,413,154(195,739,198)1,496,719,907Accounts receivable are analyzed by categories as follows:

Year 2019Book balance Provision for bad debtsAmountRatio (%) AmountProportion of provision (%)Individual provision for bad debts753,396,3856591,042,38578

Year 2019Book balance Provision for bad debtsAmountRatio (%) AmountProportion of provision (%)Provision for bad debts by portfoliowith the credit risk characteristics

12,026,314,39694999,690,950812,779,710,7811001,590,733,335

Year 2018Book balanceProvision for bad debtsAmountRatio (%)AmountProportion of provision (%)With individually signicant amount andindividual provision for bad debts

588,585,8317440,054,33175Provision for bad debts by portfolio withthe credit risk characteristics

-Related party4,308,189,57550---Non-related parties3,611,463,98742931,418,17525With individually insignicant amountand individual provision for bad debts

125,247,4011125,247,4011008,633,486,7941001,496,719,907

As at December 31, 2019, accounts receivable with individual provision for bad debts are as follows:

Book balanceProvision for bad debtsProvision ratio %Reason for provisionAccounts receivable 1324,708,000162,354,00050Shortage of funds for the other partyAccounts receivable 2182,958,900182,958,900100Contract disputeAccounts receivable 3158,184,500158,184,500100Shortage of funds for the other partyAccounts receivable 427,904,87027,904,870100Contract disputeAccounts receivable 526,911,14726,911,147100Contract disputeAccounts receivable 610,748,86910,748,869100Contract disputeAccounts receivable 77,815,5007,815,500100Contract disputeAccounts receivable 87,463,1747,463,174100Contract disputeAccounts receivable 93,582,1353,582,135100Contract disputeAccounts receivable 102,224,0132,224,013100Contract disputeAccounts receivable 11895,277895,277100Contract dispute

753,396,385591,042,385

As at December 31, 2018, accounts receivable with individually signicant amount and individual provision for bad debtsare as follows:

Book balanceProvision for bad debtsProvision ratio %Reason for provisionAccounts receivable 1183,703,331183,703,331100Contract disputeAccounts receivable 2297,063,000148,531,50050Contract disputeAccounts receivable 3107,819,500107,819,500100Shortage of funds for the other party

588,585,831440,054,331As at December 31, 2018, accounts receivable with individually insignicant amount and individual provision for baddebts are as follows:

Book balanceProvision for bad debtsProvision ratio %Reason for provisionAccounts receivable 150,365,00050,365,000100Shortage of funds for the other partyAccounts receivable 227,452,86827,452,868100Contract disputeAccounts receivable 314,854,46714,854,467100Contract dispute

Book balanceProvision for bad debtsProvision ratio %Reason for provisionAccounts receivable 410,792,60510,792,605100Contract disputeAccounts receivable 57,847,3007,847,300100Contract disputeAccounts receivable 67,342,2867,342,286100Contract disputeAccounts receivable 73,524,1123,524,112100Contract disputeAccounts receivable 82,187,9882,187,988100Contract disputeAccounts receivable 9880,775880,775100Contract dispute

125,247,401125,247,401Accounts receivable subject to provisions for bad debts by the Company under aging analysis method are as follows (in2018: accounts receivable from non-related parties):

Year 2019Year 2018Book balanceof estimateddefault

Expected creditLoss rate (%)

The entire durationExpected creditloss

Amount for theentire duration

Provision for bad debtsRatio (%)AmountWithin 6 months4,181,652,216136,194,6151,069,737,753--7-12 months4,220,733,341136,532,885854,283,99318,542,8401 - 2 years1,158,723,629451,346,322501,366,5931575,204,9892 - 3 years1,354,366,423569,254,171321,730,5193096,519,1553 - 4 years253,416,2072973,708,832188,175,8895094,087,9454 - 5 years182,871,42769126,053,37576,423,9777557,317,983Over 5 years674,551,15390606,600,750599,745,263100599,745,263

12,026,314,396 999,690,9503,611,463,987 931,418,175Top 5 of accounts receivable as December 31, 2019, presented by debtors:

Balance

Provision forbad debts

Proportion in total balance of accounts receivable

Proportion in total amount (%)Top 5 of total of accounts receivable6,205,808,56330,765,48449Top 5 of accounts receivable as at December 31, 2018, presented by debtors:

Balance

Provision forbad debts

Proportion in total balance of accounts receivable

Proportion in total amount (%)Top 5 of total of accounts receivable3,680,578,75518,169,279432 Other receivables

Year 2019Year 2018Other receivables7,860,646,322 13,968,458,891Less: provision for bad debts10,325,60713,312,251

7,850,320,715 13,955,146,640Aging analysis of other receivables is as set out below:

Year 2019Year 2018Within 6 months7,660,131,53613,639,005,1657-12 months28,811,129190,908,0421-2 years86,757,020112,968,9402-3 years74,609,88911,872,6733-4 years1,038,07920,8714-5 years18,6004,128,886Over 5 years9,280,0699,554,314

Year 2019Year 2018

7,860,646,322 13,968,458,891Less: provision for bad debts of otherreceivables

10,325,60713,312,251

7,850,320,715 13,955,146,640Classication of other receivables in terms of nature of payment as follows:

Year 2019Year 2018Current accounts between subsidiaries7,080,666,063 13,391,496,986Bid and performance bonds230,696,849171,149,432Export tax refund214,352,29043,627,838Taxes on outstanding payment receivable188,526,214181,205,119Customs deposits38,241,87863,341,536Lease payment receivable33,434,66833,434,668Money on call of on-site product service30,215,95446,372,659Staff loan receivable23,009,96127,854,145Others21,502,4459,976,508

7,860,646,32213,968,458,891As at December 31, 2019, provisions for bad debts in respect of other receivables are respectively made on the basis ofexpected credit losses for 12 months and expected credit losses for the entire duration as follows:

Phase 1Phase 2Phase 3

TotalExpected creditlosses in the next 12

months

Expected creditloss for the entireduration

Financial assets that have sufferedcredit impairment (Expected creditloss for the entire duration)Beginning balance-3,812,5909,722,55513,535,145Provision in the current year-612,929-612,929Reversal in the current year--(3,822,467)(3,822,467)Ending balance-4,425,5195,900,08810,325,607

Changes in provision for bad debts of other receivables are as follows:

Beginning balance

Provision in thecurrent year

Reversal in thecurrent year

Charge-off in thecurrent year

Ending balanceYear 2018163,639,459-(150,327,208)-13,312,251

As at December 31, 2018Book balance Provision for bad debtsAmountRatio (%)AmountProportion of provision (%)Provision for bad debts accrued bycredit risk characteristics-Deposits (excluding quality deposits)234,490,9682--Employee borrowings and petty cash74,226,8041---Others13,650,018,564973,589,6960With individually insignicant amountand individualprovision for bad debts9,722,555-9,722,555100

13,968,458,89110013,312,251There were no other receivables with individually significant amount and individual provision for bad debts as atDecember 31, 2018.

As at December 31, 2018, other receivables with individually insignicant amount and individual provision for bad debtsare as follows:

Book balance

Proportion of provisionfor bad debts

Proportion of provision

(%)

Reason for provisionOther receivables 13,037,0423,037,042100Contract cancellationOther receivables 21,692,7651,692,765100Contract cancellationOther receivables 31,170,2821,170,282100Contract cancellationOthers3,822,4663,822,466100

9,722,5559,722,555

As at December 31, 2018, other receivables with provision for bad debts made by the Company under aging analysismethod are as follows:

Year 2018Book balance

Provision for bad debtsAmountRatio (%)Within 6 months13,644,611,754--7-12 months1,612,892116,1291 - 2 years183,0411527,4562 - 3 years41,8103012,5433-4 years 20,8475010,4244 - 5 years100,3047575,228Over 5 years3,447,9161003,447,916 13,650,018,564 3,589,696As at December 31, 2019, top ve of other receivables are as follows:

Balance as atDecember 31,2019

Proportion in thetotal balance of other

receivables (%)

NatureAging

Balance of provisionfor bad debts as atDecember 31, 2019Other receivables 13,250,805,33942

Current accounts of

the subsidiaries

Within 1 year-Other receivables 21,264,426,41716

Current accounts ofthe subsidiaries

Within 1 year-Other receivables 31,257,974,81816

Current accounts of

the subsidiaries

Within 1 year-Other receivables 4929,804,80512

Current accounts of

the subsidiaries

Within 1 year-Other receivables 5110,235,1651

Current accounts ofthe subsidiaries

Within 1 year-6,813,246,54487-As at December 31, 2018, top ve of other receivables are as follows:

Balance as atDecember 31,2019

Proportion in thetotal balance of otherreceivables (%)

NatureAging

Balance of provisionfor bad debts as atDecember 31, 2019Other receivables 15,620,231,05540

Current accounts ofthe subsidiaries

Within 1 year-Other receivables 21,705,364,67812

Current accounts ofthe subsidiaries

Within 1 year-Other receivables 31,589,824,45111

Current accounts ofthe subsidiaries

Within 1 year-

Balance as atDecember 31,2019

Proportion in thetotal balance of other

receivables (%)

NatureAging

Balance of provision

for bad debts as atDecember 31, 2019Other receivables 41,339,983,01310

Current accounts ofthe subsidiaries

Within 1 year-Other receivables 51,232,207,9999

Current accounts of

the subsidiaries

Within 1 year-11,487,611,19682-3 Long-term equity investment

Year 2019Year 2018Subsidiaries5,935,939,2435,909,665,076Joint ventures264,615,842249,039,756Associates2,547,930,6442,477,313,892 8,748,485,7298,636,018,724

(1) Subsidiaries

Year 2019

Year 2018

Increase/decrease in 2019Additional or reduced investment

Year 2019Shanghai Zhenhua Port Machinery Heavy Industry Co., Ltd.9,964,200-9,964,200Shanghai Zhenhua Port Machinery (Hongkong) Co., Ltd.---Shanghai Zhenhua Shipping Co., Ltd.140,260,673-140,260,673ZPMC Zhangjiagang Port Machinery Co. Ltd.4,518,000-4,518,000Nantong Zhenhua Heavy Equipment Manufacturing Co., Ltd.1,154,936,900-1,154,936,900ZPMC Jiangyin Steel Structure Manufacturing Co., Ltd.579,983(579,983)-ZPMC Port Machinery General Equipment Co., Ltd.2,201,086,744-2,201,086,744ZPMC Transmission Machinery (Nantong) Co. Ltd.300,000,000-300,000,000ZPMC Electric Co., Ltd.50,000,000-50,000,000ZPMC GmbH Hamburg207,940-207,940ZPMC Netherlands Cooperatie V.A.29,366,084-29,366,084ZPMC Netherlands B.V.---Verspannen B.V.---Shanghai Zhenhua Marine Engineering Service Co., Ltd.100,000,000-100,000,000ZPMC Machinery Equipment Services Co., Ltd.7,000,000-7,000,000ZPMC Lanka Company(Private)Limited6,183,978-6,183,978Nanjing Ninggao New Channel Construction Co., Ltd.100,000,000-100,000,000 ZPMC Qidong Marine Engineering Co., Ltd.203,000,000-203,000,000ZPMC Engineering Africa (Pty) Ltd.3,084,000-3,084,000ZPMC Korea Co., Ltd.2,876,2093,521,8506,398,059ZPMC Engineering (India)Private Limited2,953,200-2,953,200ZPMC Australia Company (Pty) Limited2,708,500-2,708,500ZPMC North America Inc.18,564,520-18,564,520ZPMC Southeast Asia Holding Pte. Ltd.12,513,114-12,513,114ZPMC Brazil Servio Portuários LTDA2,936,771-2,936,771ZPMC Limited Liability Company10,172,070-10,172,070CCCC Liyang Urban Investment and Construction Co., Ltd.243,000,000-243,000,000

Year 2018

Increase/decrease in 2019Additional or reduced investment

Year 2019CCCC Tianhe Mechanical Equipment Manufacturing Co., Ltd.242,542,999-242,542,999CCCC Investment & Development Qidong Co., Ltd.192,500,000-192,500,000CCCC Zhenjiang Investment Construction ManagementDevelopment Co., Ltd.

707,000,000-707,000,000CCCC Rudong Construction Development Co., Ltd.18,332,30018,332,30036,664,600CCCC Yongjia Construction Development Co., Ltd.128,000,000-128,000,000CCCC Zhenhua Lvjian Technology (Ningbo) Co., Ltd.4,000,000-4,000,000ZPMC Latin America Holding Corporation3,307,850-3,307,850ZPMC Middle East Fze5,271,120-5,271,120ZPMC UK LD2,797,921-2,797,921ZPMC Fuzhou Offshore Construction Co., Ltd.-5,000,0005,000,000

5,909,665,07626,274,1675,935,939,243Year 2018

Year 2017

Increase/decrease in 2018Additional or decreased

investment

Year 2018Shanghai Zhenhua Port Machinery Heavy Industry Co., Ltd.9,964,200-9,964,200Shanghai Zhenhua Port Machinery (Hongkong) Co., Ltd.---Shanghai Zhenhua Shipping Co., Ltd.140,260,673-140,260,673ZPMC Zhangjiagang Port Machinery Co., Ltd.4,518,000-4,518,000Nantong Zhenhua Heavy Equipment Manufacturing Co., Ltd.854,936,900-854,936,900ZPMC Jiangyin Steel Structure Manufacturing Co.,Ltd.579,983-579,983ZPMC Port Machinery General Equipment Co., Ltd.2,201,086,744-2,201,086,744ZPMC Transmission Machinery (Nantong) Co. Ltd.600,000,000-600,000,000ZPMC Electric Co., Ltd.50,000,000-50,000,000ZPMC GmbH Hamburg207,940-207,940ZPMC Netherlands Cooperatie V.A.26,662,5792,703,50529,366,084ZPMC Netherlands B.V.---Verspannen B.V.---Shanghai Zhenhua Marine Engineering Service Co., Ltd.100,000,000-100,000,000ZPMC Machinery Equipment Services Co., Ltd.7,000,000-7,000,000ZPMC Lanka Company(Private)Limited6,183,978-6,183,978Nanjing Ninggao New Channel Construction Co., Ltd.1,098,000,000(998,000,000100,000,000ZPMC Qidong Marine Engineering Co., Ltd.203,000,000-203,000,000ZPMC Engineering Africa (Pty) Ltd.3,084,000-3,084,000ZPMC Korea Co., Ltd.2,876,209-2,876,209ZPMC Engineering (India)Private Limited2,953,200-2,953,200ZPMC Australia Company (Pty) Limited2,708,500-2,708,500ZPMC North America Inc.18,564,520-18,564,520ZPMC Southeast Asia Holding Pte. Ltd.3,875,9498,637,16512,513,114ZPMC Brazil Servio Portuários LTDA2,936,771-2,936,771ZPMC Limited Liability Company7,211,4162,960,65410,172,070CCCC Liyang Urban Investment and Construction Co., Ltd.183,000,00060,000,000243,000,000CCCC Tianhe Mechanical Equipment Manufacturing Co., Ltd.242,542,999-242,542,999

Year 2017

Increase/decrease in 2018

Additional or decreased

investment

Year 2018CCCC Investment & Development Qidong Co., Ltd.147,500,00045,000,000192,500,000CCCC Zhenjiang Investment Construction ManagementDevelopment Co., Ltd.

707,000,000-707,000,000CCCC Rudong Construction Development Co., Ltd.-18,332,30018,332,300CCCC Yongjia Construction Development Co., Ltd.-128,000,000128,000,000CCCC Zhenhua Lvjian Technology (Ningbo) Co., Ltd.-4,000,0004,000,000ZPMC Latin America Holding Corporation-3,307,8503,307,850ZPMC Middle East Fze5,271,120-5,271,120ZPMC UK LD2,797,921-2,797,921 6,634,723,602(725,058,526)5,909,665,076

(2) Joint ventures

Year 2019

Balance asat January 1,2019

Changes in 2019

Balance as atDecember 31,2019

Provision forimpairment asat December31, 2019Additionalinvestment

Reducedinvestment

Investmentincome under theequity methodJoint venturesJiangsu Longyuan Zhenhua MarineEngineering Co. Ltd.

244,265,213--16,615,440260,880,653-ZPMC Mediterranean LimanMakinalari Ticaret Anonim Sirketi

4,774,543--(1,039,354)3,735,189-

249,039,756--15,576,086264,615,842-

Year 2018

Balance as

at January1, 2018

Changes in 2018

Balanceas atDecember31, 2018

Provision forimpairment asat December31, 2018Additionalinvestment

Reducedinvestment

Investmentincome under

the equity

methodJoint venturesJiangsu Longyuan ZhenhuaMarine Engineering Co. Ltd.

231,309,282--12,955,931244,265,213-ZPMC Mediterranean LimanMakinalari Ticaret Anonim Sirketi

3,775,146--999,3974,774,543-

235,084,428--13,955,328249,039,756-

(3) Associates

Balance as atDecember 31,2018

Changes in

accounting

policies

Balance asat January 1,

2019

Changes in 2019

Balance as atDecember 31,

2019

Provision forimpairment asat December

31, 2019Increase ininvestment

Investmentincome under

the equity

method

Adjustments

to othercomprehensive

income

Cash dividends

or protsdeclared to be

distributedCCCC Marine Engineering &Technology Research CenterCo., Ltd

16,252,274-16,252,274-478,530--16,730,804-ZPMC Changzhou CoatingsCo., Ltd.

16,795,964-16,795,964-1,520,000--18,315,964-

Balance as atDecember 31,2018

Changes inaccountingpolicies

Balance asat January 1,

2019

Changes in 2019

Balance as atDecember 31,2019

Provision forimpairment asat December31, 2019Increase ininvestment

Investmentincome under

the equitymethod

Adjustmentsto othercomprehensiveincome

Cash dividendsor protsdeclared to bedistributedCCCC Real Estate Yinxing Co.,Ltd.

180,652,673-180,652,673-3,007,868--183,660,541-CCCC Financial Leasing Co., Ltd.1,721,445,354(15,525,235)1,705,920,119-89,222,324310,435(9,750,0001,785,702,878-CCCC Yancheng Constructionand Development Co. Ltd.

289,380,523-289,380,523-385,719--289,766,242-China CommunicationsConstruction USA Inc.

61,722,121-61,722,121-(1,945,770)943,598-60,719,949-CCCC South AmericanRegional Company SARL

191,064,983-191,064,983-(1,127,404)(3,258,739)-186,678,840-Shanghai Ocean EngineeringEquipment ManufacturingInnovation Center Co., Ltd.

---6,500,000(144,574)--6,355,426-2,477,313,892(15,525,235)2,461,788,6576,500,00091,396,693(2,004,706)(9,750,000)2,547,930,644-Year 2018

Beginningbalance

Changes in 2018

Endingbalance

Provision forimpairment asat December31, 2018Increase ininvestment

Investmentincome underthe equitymethod

Adjustments

to othercomprehensiveincome

Cash dividendsor protsdeclared to be

distributedCCCC Marine Engineering &Technology Research Center Co., Ltd.

15,849,544-402,730--16,252,274-ZPMC Changzhou Coatings Co., Ltd.16,467,125-1,191,077-(862,238)16,795,964-CCCC Real Estate Yinxing Co., Ltd.178,099,707-2,552,966--180,652,673-CCCC Financial Leasing Co., Ltd.1,678,550,583-87,246,932647,839(45,000,000)1,721,445,354-CCCC Yancheng Construction andDevelopment Co. Ltd.

-289,050,000330,523--289,380,523-China CommunicationsConstruction USA Inc.

67,230,450-(8,536,568)3,028,239-61,722,121-CCCC South AmericanRegional Company SARL

96,195,38799,912,9763,288,529(8,331,909)-191,064,983-2,052,392,796388,962,97686,476,189(4,655,831)(45,862,238)2,477,313,892-

4 Operating revenue and operating costs

Year 2019Year 2018RevenueCostRevenueCostMain business22,756,923,77519,937,920,29018,070,463,75315,061,380,936Other business2,283,380,6552,134,841,1761,316,224,2511,220,964,790 25,040,304,43022,072,761,46619,386,688,00416,282,345,726

Year 2019Year 2018Revenue fromprimary business

Costs of primary

business

Revenue fromprimary business

Costs of primary

businessPort machinery15,145,230,75912,686,901,26614,576,864,13511,382,215,682Heavy equipment3,127,014,2012,999,144,8241,651,058,2291,675,938,342Steel structure and related income2,695,894,3132,622,346,8751,527,592,9321,712,519,900“Building-transfer” project and engineering construction1,788,784,5021,629,527,325314,948,457290,707,012

22,756,923,77519,937,920,29018,070,463,75315,061,380,936

Other business revenue and cost listed as follows:

Year 2019Year 2018Revenue from other

business

Costs of otherbusinesses

Revenue from otherbusiness

Costs of otherbusinessesSales of materials1,873,183,0091,875,749,0991,044,182,5051,046,418,417Equipment lease and others410,197,646259,092,077272,041,746174,546,373

2,283,380,6552,134,841,1761,316,224,2511,220,964,790

5 Investment income

Year 2019Year 2018Income from long-term equity investments calculated under cost method788,958-Income from long-term equity investments calculated under equity method106,972,779100,431,517Investment income from the available-for-sale nancial assets during holding period-667,732

107,761,737101,099,249

6 Supplementary information to the statement of cash owsNet prot adjusted to cash ow from operating activities:

Year 2019Year 2018Net prot644,361,553782,185,825Plus: provision/ reversal for asset impairment59,200,823(25,476,619)Losses from credit impairment16,036,863-Depreciation of investment properties and xed assets405,982,932466,954,562Amortization of intangible assets48,969,63453,202,552Net gain from disposal of xed assets and intangible assets(4,536,497)(69,575,485)Gains from changes in fair value(151,121,780)(44,481,806)Financial expenses1,395,060,6901,410,797,106Investment income(107,761,737)(101,099,249)Decreases in deferred income tax assets58,293,30953,252,590Increase in inventories(833,435,956(1,546,854,405)Increase / decrease in construction contracts(106,347,164)1,028,657,153Decrease/Increase in operating receivables2,161,329,300(2,198,475,931)Decrease/increase in operating payables(976,900,017)829,204,147Net cash ows from operating activities2,609,131,953638,290,440

Net change in cash and cash equivalents:

Year 2019Year 2018Ending balance of cash1,770,070,8101,930,451,140Less: beginning balance of cash1,930,451,1403,301,302,585Net decrease in cash and cash equivalents(160,380,330)(1,370,851,445)

XIII. Post balance sheet events

Since the beginning of 2020, the COVID-19 epidemic (hereinafter referred to as "the epidemic") has spread globally.The Company actively implements and strictly enforces the regulations and requirements issued by the government forprevention and control work, and acts quickly to support and strengthen the prevention work from social responsibility andinternal management aspects. As of the date of this report, the Company has resumed production in an orderly manner.As the epidemic will have an impact on the global economy, it may have a temporary impact on the Company's

production and operations to a certain extent, depending on the prevention and control of the epidemic, its duration and theimplementation of various regulatory policies.The Company is currently unable to predict the specic amount of impact of this matter on the nancial statements,and will continue to closely monitor the development of the epidemic and its impact on the Company's nancial position andoperating results.XIV. Other signicant events1 Segment reportingThe Group determines operating segments based on internal organization structure, management requirements andinternal reporting system, determines reporting segments based on operating segments, and disclose the information of thesegments.Operating segment refers to the component part of the Group that meet the following requirements: (1) it can generateincome and expenses in daily activities; (2) the management of the Group can regularly evaluate its operating resultsto determine its allocation of resources and to evaluate its performance; (3) the Group is able to obtain its accountinginformation regarding nancial position, operating results and cash ows, etc. If two or more operating segments have similareconomic characteristics, and have met a certain conditions, they will be merged into one operating segment.The Group identied the business as an operating segment for analysis and assessment based on internal organizationstructure, management requirement and internal report system.

Product and labor informationIncome from external transactions

Year 2019Year 2018Port machinery16,458,563,16414,983,974,898Heavy equipment1,491,597,7492,746,107,406“Building-transfer” project and engineering construction2,564,145,0181,465,829,799Steel structure and related income2,709,430,9771,558,778,586Shipping and others989,117,844826,823,397Sales of materials84,343,16364,386,030Equipment lease and others298,389,968166,489,528

24,595,587,88321,812,389,644

Geographic informationIncome from external transactions

Year 2019Year 2018Chinese Mainland12,728,821,42910,273,382,617Asia (excluding Chinese Mainland)3,469,961,1934,204,353,552Europe3,416,405,4991,560,574,842North America2,205,954,5342,029,837,441South America963,140,3691,040,540,883Africa761,455,5101,508,172,239Chinese Mainland (export sales)697,069,989664,121,407Oceania352,779,360531,406,663

24,595,587,88321,812,389,644The income from external transaction is attributable to where the customer is located.Total current assets

Year 2019Year 2018Chinese Mainland22,450,499,09619,922,533,912Asia (excluding Chinese Mainland)7,270,356,5895,774,343,229

Year 2019Year 2018Others41,013,03738,609,208

29,761,868,72225,735,486,349The Non-current assets are attributable to where they are located, excluding financial assets, long-term equityinvestment, goodwill, deferred income tax assets and other non-current assets.2 Comparative dataAs explained in Note III (31), the accounting treatment and presentation of certain items in the nancial statements andthe amounts in the nancial statements have been modied to comply with the new requirements as a result of changes inthe presentation of notes and accounts receivable, notes payable and accounts payable.

1 Breakdowns of non-recurring prot or loss

Year 2019Year 2018Net gains on disposal of non-current assets49,091,913155,557,716Government grants included in the current prot or loss (except for the one closely relatedto the normal operation of the Company and gained constantly at a xed amount or quantityaccording to certain standard based on state policies)

93,271,980114,412,517Prot or loss on changes in fair values of nancial assets held for trading and nancial liabilitiesheld for trading and investment income obtained from disposal of nancial assets held fortrading, nancial liabilities held for trading and available-for-sale nancial assets

146,517,39774,200,750Reversal of provision for impairment of receivables subject to separate impairment test-150,327,138Non-operating income and expenses other than the above-mentioned items(18,553,180)(67,069,856)Effect of income tax(43,502,506)(74,850,113)Affected amount of minority equity(after tax)(23,013,076)(30,908,588)

203,812,528321,669,5642 Return on net assets and earnings per share

Weighted average rate ofreturn on net assets (%)

Earnings per shareBasic earnings per shareDiluted earnings per shareYear 2019Year 2018Year 2019Year 2018Year 2019Year 2018Net prot attributable to ordinary shareholdersof the Company

3.39 2.92 0.10 0.08 0.10 0.08Net prot attributable to ordinary shareholdersof the Company after deducting non-recurringprots and losses

2.06 0.80 0.06 0.02 0.06 0.02

Section XIIList of Reference Documents

List of Reference Documents

Financial statements afxed with the signature and seal of legal representative, accounting principaland head of the accounting departmentList of Reference DocumentsOriginal of auditors' report afxed with the signature by the accounting rm and seal by CPA.List of Reference Documents

Public disclosure of all original documents and announcement of the Company on the newspaperdesignated by the China Securities Regulatory Commission

Chairman: Zhu LianyuDate of reporting approved by the Board of Directors:

March 31, 2020

Revision information

□Applicable √Not applicable


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