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神州B:2018年年度报告(英文版) 下载公告
公告日期:2019-04-30

Sino Great Wall Co., Ltd.

2018 Annual Report

April 2019

I. Important Notice, Table of Contents and DefinitionsThe Board of Directors and the directors, Supervisory Committee andsupervisors and Senior Executives of the Company hereby warrant that at theyear, there are no misstatement, misleading representation or importantomissions in this report and shall assume joint and several liability for theauthenticity, accuracy and completeness of the contents hereof.

Mr. Chen Lue, The Company leader, Ms. Yang Chunling, Chief FinancialOfficer and the person in charge of the accounting department (the person incharge of the accounting) hereby confirm the authenticity and completeness ofthe financial report enclosed in this annual report.

Directors apart from the below mentioned have attended the Meeting forannual report deliberation:

Absent Director NameAbsent Director TitleAbsent ReasonAttorney Name
Jiang ChongguangIndependent DirectorWork ArrangementsYu Haichun

Due to the inability to obtain sufficient and appropriate audit evidence asthe basis for expressing audit opinions on the financial statements, ReandaPublic Certified Accountants (LLP) issued an audit report that could reservationopinions on the company. The board of directors and the board of supervisors ofthe Company have made detailed explanations on relevant matters, to whichinvestors shall pay attention.

Any plans for the future and other forward-looking statements mentioned

in this Report shall Not be considered as absolute promises of the Company toinvestors. Therefore, investors are kindly reminded to pay attention to possibleinvestment risks.

Possible risks faced by the Company and countermeasures have beenexplained in “Operating Performance Discussion and Analysis” herein, whichinvestors are kindly reminded to pay attention to.

The Company has no plan of cash dividends carried out, bonus issued andcapitalizing of common reserves either.

Table of Contents

I. Important Notice, Table of Contents and Definitions ........................................................................................................................... 2

II. Basic Information of the Company and Financial index ..................................................................................................................... 6

IV. Management’s Discussion and Analysis .......................................................................................................................................... 16

V. Important Events ............................................................................................................................................................................... 44

VI. Change of share capital and shareholding of Principal Shareholders ............................................................................................ 148

VII. Situation of the Preferred Shares .................................................................................................................................................. 156

VIII. Information about Directors, Supervisors and Senior Executives ............................................................................................... 157

IX. Administrative structure ................................................................................................................................................................ 171

X. Specifications on Company Securities ............................................................................................................................................ 183

XI. Financial Statements ..................................................................................................................................................................... 184

XII. Documents Available for Inspection ............................................................................................................................................ 355

Definition

Terms to be definedRefers toDefinition
Company LawRefers toCompany Law of the People’s Republic of China
Securities LawRefers toSecurities Law of the People’s Republic of China
“CSRC”Refers toChina Securities Regulatory Commission
Company, The Company, Sino Great WallRefers toSino Great Wall Co., Ltd.
Sino InternationalRefers toSino Great Wall International Engineering Co., Ltd.
ReandaRefers toReanda Certified Public Accountants LLP
SSERefers toShenzhen Stock Exchange
Shenzhen Regulatory AuthorityRefers toShenzhen Regulatory Authority of China Securities Regulatory Commission
Reporting periodRefers toJanuary 1, 2018 to December 31, 2018
Wuhan Commercial Worker HospitalRefers toWuhan Commercial Worker Hospital Co., Ltd.
Union HoldingsRefers toUnion Holdings Co., Ltd.
Rich Crown InvestmentRefers toRich Crown Investment Co., Ltd.
Baden-Baden HospitalRefers toAcura Kliniken Baden-Baden GmbH

II. Basic Information of the Company and Financial index

I.Company Information

Stock abbreviation:Sino Great Wall; Sino-BStock code:000018; 200018
Change of stock Abbreviation(If any)Nil
Stock exchange for listingShenzhen Stock Exchange
Name in Chinese神州长城股份有限公司
Chinese Abbreviation神州长城
English name (If any)Sino Great Wall Co., Ltd.
English Abbreviation (If any)Sino Great Wall; Sino-B
Legal RepresentativeChen Lue
Registered address26 Kuipeng Road, Kuiyong Town, Longgang District, Shenzhen
Postal code of the Registered Address518119
Office AddressSino Great Wall Building, No.3 Jinxiu Street,Economic Technology Development Zone , Beijing
Postal code of the office address100176
Internet Web Sitewww.sgwde.com
E-mail000018sz@sina.com

II. Contact person and contact manner

Board secretarySecurities affairs Representative
NameYang ChunlingSun Yu
Contact addressSino Great Wall Building, No.3 Jinxiu Street,Economic Technology Development Zone , BeijingSino Great Wall Building, No.3 Jinxiu Street,Economic Technology Development Zone , Beijing
Tel010-89045855010-89045855
Fax010-89045856010-89045856
E-mail1208806865@qq.com000018sz@sina.com

III. Information disclosure and placed

Newspapers selected by the Company for informationSecurities Times and Hongkong Commercial Daily.
disclosure
Internet website designated by CSRC for publishing the Annual report of the Companyhttp: // www.cninfo. com. cn
The place where the Annual report is prepared and placedSecurities Department, Sino Great Wall Building, No.3 Jinxiu Street, Economic Technology Development Zone, Beijing

IV. Changes in Registration

Organization Code91440300618801483A
Changes in principal business activities since listing (if any)Nil
Changes is the controlling shareholder in the past (is any)Nil

V. Other Relevant Information

CPAs engaged

Name of the CPAsReanda Certified Public Accountants LLP
Office address:11/F, Building E, Sino-Ocean International, No.210, Ciyuansi Beili, Chaoyang District, Beijing, PRC
Names of the Certified Public Accountants as the signatoriesWang Xinyu, Zhou Zhonghua

The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.√ Applicable □Not applicable

Sponsor NameOffice addressRepresentativesPeriod of supervision and guide
Huatai United Securities Co., Ltd.6/F, A Unit, Fengming International Building, No.22, Fengsheng Hutong, Xicheng District, BeijingWu Wenmin, Fang YuhuiSeptember 27, 2015 to December 31, 2018

The Financial advisor performing persist ant supervision duties engaged by the Company in the reporting period√ Applicable □Not applicable

Advisor NameOffice addressRepresentativesPeriod of supervision and guide
Huatai United Securities Co., Ltd.6/F, A Unit, Fengming International Building, No.22, Fengsheng Hutong, Xicheng District, BeijingWu Wenmin, Fang YuhuiSeptember 27, 2015 to December 31, 2018

VI. Summary of Accounting data and Financial index

May the Company make retroactive adjustment or restatement of the accounting data of the previous years

□Yes √No

20182017Changed over last year (%)2016
Operating revenue2,426,987,687.026,497,124,980.52-62.65%4,664,999,117.17
Net profit attributable to the shareholders of the listed company (Yuan)-1,704,739,736.40380,090,990.82-548.51%473,661,862.67
Net profit after deducting of non-recurring gain/loss attributable to the shareholders of listed company (Yuan)-1,411,440,495.34377,087,197.69-474.30%470,274,602.37
Net cash flow generated by business operation, net (Yuan)827,879,055.45-1,781,868,618.65-146.46%-1,687,875,813.94
Basic earning per share (Yuan/Share)-1.0040.220-560.45%0.28
Diluted gains per share (Yuan/Share)-1.0040.220-560.45%0.28
Net asset earning ratio (%)-142.85%19.35%-162.20%31.18%
End of 2018End of 2017Changed over last year (%)End of 2016
Gross assets9,603,455,934.8911,667,845,186.30-17.69%7,986,178,961.63
Net assets attributable to shareholders of the listed company (Yuan)235,202,473.512,151,482,467.52-89.07%1,777,948,117.49

VII. The differences between domestic and international accounting standards

1.Simultaneously pursuant to both Chinese accounting standards and international accounting standardsdisclosed in the financial reports of differences in net income and net assets

□ Applicable√ Not applicableNon-existence

2. Differences of net profit and net assets disclosed in financial reports prepared under overseas andChinese accounting standards.

□ Applicable√Not applicableNon-existence

VIII. Main Financial Index by Quarters

Unit: Yuan

First quarterSecond quarterThird quarterFourth quarter
Operating income923,442,740.92663,528,834.32672,083,613.81167,932,497.97
Net profit attributable to the shareholders of the listed company218,523,628.75-74,524,173.03-118,516,821.76-1,730,222,370.36
Net profit after deducting of non-recurring gain/loss attributable to the shareholders of listed company56,977,615.63-65,023,592.77-144,157,168.171,284,719,983.995
Net Cash flow generated by business operation809,676,459.22288,487,906.41189,148,952.32459,434,262.506

Whether significant variances exist between the above financial index or the index with its sum and the financial index of thequarterly report as well as semi-annual report index disclosed by the Company.□ Yes √No

IX. Items and amount of non-current gains and losses

√Applicable □Not applicable

Unit: Yuan

ItemsAmount (2018)Amount (2017)Amount (2016)Notes
Non-current asset disposal gain/loss (including the write-off part for which assets impairment provision is made)-1,181,511.77-150,250.00-564,833.40
Government subsidy recognized in current gain and loss (excluding those closely related to the Company’s business and granted under the state’s policies)105,536,702.002,211,128.89108,121.33
Profit due to the situation where investment costs for the company to obtain subsidiaries, associates and joint ventures are lower than the enjoyable fair Value of identifiable net assets of investees when making investments1,783,284.99
Profit/loss on fair value changes of transactional financial assets and liabilities & investment profit on disposal of transactional financial assets and liabilities as well as financial assets available for443,065.98
sale, except for effectively hedging business related to normal business operations for the Company
Other non-operating income and expenditure except for the aforementioned items-397,654,450.871,444,308.745,296,814.65
Less: Amount of influence of income tax501,394.503,668,000.60
Influenced amount of minor shareholders’ equity (after tax)-19.5811,192.65
Total-293,299,241.063,003,793.133,387,260.30--

For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 oninformation disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses andits non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosurefor Companies offering their securities to the public-non-recurring Gains and losses which have been defined asrecurring gains and losses, it is necessary to explain the reason.□ Applicable√ Not applicableNone of Non-recurring gain /loss items recognized as recurring gain /loss/items as defined by the informationdisclosure explanatory Announcement No.1- Non-recurring gain/loss in the report period.

III. Business Profile

Ⅰ.Main Business the Company is Engaged in During the Report Period

Whether the company needs to comply with the disclosure requirements of the particular industryYesCivil Engineering ConstructionThe company shall comply with disclosure requirements in Shenzhen Stock Exchange Industry Information Disclosure GuidelinesNo. 7-the Listed Company Engagement in Civil Engineering Construction Business(I) Company main business scope and business model

Within the report period, the core business of Sino Great Wall is the engineering construction and medical treatment and healthindustry investment and management. The engineering construction mainly includes the international EPC and domestic PPPbusiness. The medical treatment and health industry investment and management mainly comprises the hospitals and medicaltreatment operation management through engagement in the industry through several ways including acquisition of existing hospitals,construction of new hospitals as well as building and investing the hospital PPP project, etc. At present, the company business coversthe house building, roads and bridges, power and chemical industry as well as medical treatment and health, etc. among manycountries and regions in Southeast Asia, the Middle East, South Asia and Africa, etc.

The company mainly engages in the foreign engineering construction through EPC, namely contracting the whole process or

several phases among the construction project design, purchase, construction and trail operation, etc. through integrating thehigh-quality resources at home and abroad. For the domestic engineering construction, the company mainly adopts PPP mode,namely the project operation mode through cooperation of the governmental and social capital. Under such mode, the governmentwill select the social capital with the investment and operation management capacity through the competitive ways and both partiesshall enter into the contract subject to the equality-based consultation principle, under which, the social capital shall provide publicservices and the government shall pay the consideration against the social capital based on the public service achievement assessmentresult.

The Company business includes the project development, financing, design, procurement and construction, etc. and it will alsoparticipate in investment in and provision of operation services for high-quality projects with good development prospect.(II) Engineering construction industry macro-situation, competition pattern and position in industry

Foreign engineering: with the comprehensive advance of the “One Belt and One Road” initiative, the Company’ s contractedengineering projects industry for other countries is in the good growth momentum wholly with continuous expansion of the industryscale. During the reporting period, the company was awarded with the 138th medal in the “2018 ENR Top 250 InternationalContractors” (ranked 39th among Chinese enterprises and 1st among Chinese private enterprises). According to statistics from theMinistry of Commerce and the State Administration of Foreign Exchange, China's industry-wide foreign direct investment in 2018was USD 129.83 billion, with a year-on-year increase of 4.2%. Turnover from overseas contracted projects reached USD 169.04billion, with a year-on-year increase of 0.3%. The turnover of overseas contracted projects in 63 countries and regions along the “theBelt and Road” was USD 89.33 billion, accounting for 52% of the total for the same period. The Chinese government has continuedto push forward the construction of "the Belt and Road" and has strengthened strategic docking with countries and regions along theline. It has embraced a broader cooperation space in infrastructure construction, metallurgical engineering, equipment manufacturingand other fields, and created more market opportunities for the company’s overseas business expansion.(III) Company’s qualification

At present, the Company possesses the construction certificates such as Constructional Engineering Construction GeneralConstructing-Grade I, Highway Engineering General Constructing-Grade I; Municipal utility construction General

Constructing-Grade I; Urban and road lighting engineering Constructing-Grade I;Environmental engineering Constructing-Grade I;Design and construction of architectural decoration Constructing-Grade I, Electromechanical Equipment Installation ProjectSpecialized Contracting-Grade I, Construction Curtain Wall Project Specialized Contracting- Grade I, Fire Control Facilities ProjectSpecialized Contracting-Grade I, Possessing 10 first-class qualifications of professional contracting for engineering of waterproof,anti-corrosion and insulation; meanwhile, possesses two class-a special-grade design qualifications of building curtain wallengineering design and architectural decoration engineering design; in addition, possesses 5 second-class qualifications, including thesecond-class general contracting qualification of construction of water conservancy and hydropower projects, the second-class ofgeneral contracting of metallurgy engineering construction, the second-class qualification of professional contracting of steel structureengineering, the second-class qualification of professional contracting of electronic and intelligent engineering and the second-classgeneral contracting qualification of mechanical and electrical engineering construction, and possesses the third-class generalcontracting qualification of railway construction, the specialized contracting qualification for special projects and so forthqualifications. The scope covers architecture, highways, railways, municipal utilities, water conservancy and hydropower,petrochemical, electric power and other specialties. For the overseas market, the Company has always been developing the market,accumulating the talent and technology and improving the adaptive capacity of oversea standards and the local project managementability continuously for many years. For the domestic business, accumulates experience in aspects of the project bidding, financingways and operation management and forms its unique operation ways.(IV) Financing Situation

During the reporting period, the company's financing structure was reasonable and it better supported thecompany's business development. The financing during the reporting period is as follows:

Unit: Yuan

NoFinancing ChannelDecember 31, 2018Financing cost rangeStructure
1Bank loans1,664,568,470.435.2%-8.1%1年以内
160,440,152.953.5%-5.2%1-2年
--2-3年
Subtotal1,825,008,623.38
2Trust financing666,666,608.686.09%-9.9%1年以内
876,250,0006.65%-9.9%1-2年
300,000,0006.56%2-3年
Subtotal1,842,916,608.68
3
Bond financing100,000,0006.2%1-2年
145,000,0006.2%2-3年
Subtotal345,000,000
4Notes211,334,653.110-10%1年以内
Total4,224,259,885.17

(V) Quality Control System

Quality is the life of engineering construction companies. Quality is the best display and promotion of the image ofconstruction companies. The company has always attached great importance to project quality management, has a dedicated QC(Quality Control) department, and is fully responsible for the management of the company’s construction projects, forming a set of

effective and mature quality control processes and systems. Quality control measures have been continuously optimized to cover allaspects and operate efficiently; quality management is scientific and standardized. During the reporting period, the company did nothave major project quality problems.(VI) Safety Production Operation

The company has firmly established the guiding principle of “safety first, prevention first”, attaches great importance to safetyproduction, carefully organizes safety education and training, adheres to the safety red line, strictly implements the safety productionresponsibility system, and conducts in-depth safety inspections and hidden trouble investigations, enhances safety precautions, andcreates a safe, harmonious, standardized construction environment, and constantly improves the level of precision management ofsafety production. During the reporting period, the company did not have major safety issues, all work was carried out in an orderlymanner, and the construction was safe and stable.

Ⅱ.Major Changes in Main Assets

1. Major Changes in Main Assets

MainMajor changes
Equity assetsThe slight change
Fixed assetsMainly due to the scrapping of vehicles and the sale of houses
Intangible assetsMainly due to the transfer of Sino Great Wall Intelligent Real Estate (Zhanjiang) Co., Ltd. to reduce intangible assets
Construction in processMainly that the Sino Zhigu Industry (Yueyang) Co., Ltd. and Chengwu County Shenguang Project Management Co., Ltd. merge the project under construction

2. Main Conditions of Overseas Assets

□ Applicable□√ Not applicable

Ⅲ.Analysis On core Competitiveness

Whether the company needs to comply with the disclosure requirements of the particular industryYesCivil Engineering Construction

Sino Great Wall is a leading construction & engineering contractor in China with business covers various types construction &engineering contracting. With leading projects such as PM, EPC, BT, BO and PPP, etc., The implementation of the National Strategyof “One Belt, One Road” will provide a good opportunity for the company's overseas business development. The company continuesto increase efforts to open up overseas markets, thus the overseas project orders and the revenue have maintained a rapid annualgrowth rate. Domestic business, With the continuous promotion of national PPP projects. The company will also usher in a betterdevelopment opportunity, the company's comprehensive strength, overseas influence and market competitiveness have increased yearby year.

1. Strategic positioning advantage

The “Construction & Engineering contracting” and “Medical & Health Business” will be the company’s two strategic

directions for future development. In 2013, the company set up the development goal “Making bigger and stronger overseas business,and to become the world's leading international comprehensive construction & building service provider”. In 2016, the company setup the “Medical & Health business” as another essential development direction. All of those are to comprehensively cater the needsof the national strategies of “One Belt, One Road” and “Medical & Health Industry Development”. The good prospects of “One Belt,One Road” projects and “Medical & Health Industry” will provide a broad market space for the company’s business development. Interms of engineering contracting, the early-development advantage of overseas business enables the company to have richmanagement experiences and high-quality customers and establish talented teams, thus laid a solid foundation for the company’soverseas business development. In terms of the Medical & Health business, the company has set up project teams in many domesticplaces such as Sichuan, Henan and Hubei, and the company has purchased Wuhan Commercial Worker Hospital and won the bids ofmany medical PPP project. Also, the company has established cooperative relationships with many hospitals and has recruited manykinds of talents in terms of medical, hospital management, investment and financing etc., thus provided a strong support for theMedical & Health business development.2. Standardized and high-efficient management system, fully market-oriented operation mechanism

With the increasingly expanding of the company scale and business scope, the management for the company is becoming morecomplex. However, the company timely set up the sound management system and the authorization system to standardize theapproval procedures, reduce the management hierarchy tiers and improve the work efficiency and execution, thus ensured theefficient operation of the company’s business operation. For the operation mechanism, the company bravely faces the fiercecompetition in the market, adheres to the market-oriented development, respects the objective laws of the market and constantlyimproves its management level, thus to timely response to changes in the market and continuously improve the company's marketimage, construction quality and profitability.3. Integrated design and construction advantages

The company has a wide range, high-ranking construction qualifications, and the company has integrated design and constructionexperiences and good project management capabilities, so the company is able to provide integrated design and construction servicesin terms of civil engineering, decoration, mechanical and electrical installation and full industry chain of curtain wall, and thecompany can independently complete the whole process of construction project. The company can form a comprehensive advantagein the field of building engineering, so it can reasonably schedule the procurement, labor use and construction plan, as well as thecompany can constantly optimize the process to reduce the project costs. The company’s excellent design ability, sound constructionquality, high-efficient construction planning and the comprehensive high-quality service greatly enhanced the customers’satisfaction.4. Costs advantages and quality-control advantages

The core management staff of the company all have more than 10 years experiences of building and engineering construction.Upon the deep understanding of the industry, the company established a relatively perfect material procurement, labor managementand quality control system. Through the price ceiling mode for procurement, the company screens the suppliers in the early stage of aproject, thus to ensure that the procurement costs of the project materials would be in a reasonable scope. By locking the technicalrequirements and time requirements of the project, the company can lock the labor costs. The company has set up strictquality-control system for the design drawing, raw material procurement and each aspect of the project construction management, thusto strictly ensue the project construction quality, so the company has won good reputation and got trust and recognition by a greatnumber of customers.

IV. Management’s Discussion and Analysis

I. Overview

2018 was an extremely difficult year for the company, with the global economic situation increasingly complicated,international trade protection on the rise, growth rate of foreign engineering contracting industry slowed down and competitionintensified. Due to the national capital management policy at the beginning of 2018 and the environmental impact of deleveraging,the company was subjected to loan recovery with different degrees such as loan withdrawal and loan cut, resulting in the liquiditydifficulties of the company's operating funds and triggering a series of chain reactions of operating difficulties. Overdue repaymentappeared in the financing of the company, its subsidiaries and banks and other financial institutions. Major accounts, some assets andshares of subsidiaries were frozen by overdue financial institutions in pre litigation preservation, further causing some employees ofthe company to default on their wages, some suppliers to default on their debts, and bidding for new projects was also greatlyaffected. The company's operating income has been greatly reduced, and the annual operating results in 2018 show losses for the firsttime. In 2018, the company realized operation income of RMB 2.431 billion, a decrease of 62.58% from the last year; realized theoperating profits of RMB- 1.48 billion, a decrease of 391.32% from the last year; and the net profit attributable to the parentcompany was RMB -1.736 billion, a decrease of 556.66% from the last year.

In terms of engineering construction, the company overcame difficulties and obstacles, rooted in the existing business area andscale, and continued to steadily expand its business. During the reporting period, the company faced difficulties both domesticallyand abroad. In terms of foreign business, the company undertook the traditional construction business-Cambodia Mekong River VillaProject; Meanwhile, it actively participated in investment and financing, development, construction and operation projects, andjointly develops Dongpoxi Comprehensive Park in Laos with international engineering companies; In addition, It completed anddelivered the residential and commercial buildings of the stock project NAGA Phase II Integrated entertainment in Cambodia and theCambodia Haoli Diamond Project, and maintained the normal operation of the stock projects in Cambodia, Russia, Sri Lanka,Malaysia, Algeria and Myanmar regions. In terms of domestic business, the company has successfully connected with strategicprojects such as Chengdu Rennan Square Project, Future New World Project, Xinhui Hilton Hotel and Villa Project. Meanwhile, itactively expands its major clients and reaches strategic cooperation intentions with well-known real estate developers and investmentcompanies, which are expected to sign high-value business contracts with the company in 2019.

The medical and health industry is an important pillar in the company's transformation and development strategy. Due to theinfluence of the adjustment of national financial policies, the company actively expanded the traditional construction business ofinfrastructure, utilized existing resources, and strengthened horizontal integration. It is expected that some breakthroughs will bemade inMedical engineering and proton therapy projects in the future.

In smart housing sector, it will locate the trend and accurately position it, and comprehensively push forward theimplementation of strategic development goals. In recent years, the Chinese government has successively issued relevant policies tovigorously promote the transformation of the construction industry to construction industrialization. The company has set up a “SinoGreat Wall Intelligence Residential Co, LTD.” in Zhanjiang, Guangdong, to produce fabricated supporting products. During thereporting period, the construction of the base's factory building framework was basically completed. Due to the financialenvironment, the production line has not yet been established and put into production. Meanwhile, the company promoted the ruralassembly business and made a preliminary layout in key regions of the country.

Faced with the financial difficulties, the company has made concerted efforts from top to bottom to conquer the difficulties. Ithas successively carried out a series of reforms and innovations in enterprise management mode, timely investigated and re-electedboard members, integrated the senior management team, re-organized the business sectors, defined the responsibility assessment,strengthened the asset preservation, comprehensively optimized control and other measures to effectively stimulate enterprise

development potential in adversity.

Ⅱ. Main business analysis

1. General

Refer to relevant contents of “1.Summarization” in “Discussion and Analysis of Management”.

2. Revenue and cost

(1) Revenue structure

Unit: Yuan

20182017Year-on-year increase/decrease
AmountProportionAmountProportion
Total of operating revenue2,426,987,687.02100%6,497,124,980.52100%-62.65%
On industry
EPC1,853,545,312.4476.37%4,268,109,664.4365.69%-56.57%
Engineering design6,971,646.830.29%19,119,855.940.29%-63.54%
Decoration work430,784,976.1517.75%2,015,057,491.4831.01%-78.62%
Medical Service revenue135,685,751.605.59%132,427,255.482.04%2.46%
Other62,410,713.190.96%-100.00%
On product
EPC1,853,545,312.4476.37%4,268,109,664.4365.69%-56.57%
Engineering design6,971,646.830.29%19,119,855.940.29%-63.54%
Decoration work430,784,976.1517.75%2,015,057,491.4831.01%-78.62%
Medical Service revenue135,685,751.605.59%132,427,255.482.04%2.46%
Other62,410,713.190.96%-100.00%
On Area
Domestic1,725,531,194.4971.10%3,750,012,620.0957.72%-53.99%
Overseas701,456,492.5328.90%2,747,112,360.4342.28%-74.47%

(2) Situation of Industry, Product and District Occupying the Company’s Business Income and OperatingProfit with Profit over 10%

√ Applicable □Not applicableWhether the company needs to comply with the disclosure requirements of the particular industryYesCivil Engineering Construction

Unit: Yuan

TurnoverOperation costGross profit rate (%)Increase/decrease of revenue in the same period of the previous year (%)Increase/decrease of business cost over the same period of previous year (%)Increase/decrease of gross profit rate over the same period of the previous year (%)
On Industry
EPC1,853,545,312.441,854,176,312.80-0.03%-56.57%-38.80%-29.05%
Decoration work430,784,976.15494,437,274.02-14.78%-78.62%-70.55%-31.47%
On Product
EPC1,853,545,312.441,854,176,312.80-0.03%-56.57%-38.80%-29.05%
Decoration work430,784,976.15494,437,274.02-14.78%-78.62%-70.55%-31.47%
On Area
Domestic1,725,531,194.491,817,363,558.28-5.32%-53.99%-40.14%-24.36%
Overseas701,456,492.53632,137,076.599.88%-74.47%-65.84%-22.76%

Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based onlatest on year’s scope of period-end.□ Applicable √Not applicable

(3) Whether the Company’s Physical Sales Income Exceeded Service Income

□ Yes √No

(4) Degree of Performance of the Significant Sales Contract Signed up to this Report Period

√ Applicable □Not applicableWhether the company needs to comply with the disclosure requirements of the particular industryYes

Civil Engineering ConstructionThe company is required to comply with the disclosure requirements of No. 7 of Shenzhen Stock Exchange's Industry InformationDisclosure Guidelines - Listed Companies Engaged in Civil Engineering Construction Business.

Major ProjectsBusiness ModePrice Setting PolicyRepayment ArrangementsFinancing MethodsPreferential PoliciesFranchising (If Applicable)Operating Period (If Applicable)Source of Income And Attribution (If Applicable)Guaranteed Base Operations (If Applicable)Investment Income Protection Measures (If Applicable)
Subcontracted Project of the Military Academy of Kuwait National Ministry of DefenceEPC General contractingNegotiated pricingExecute according to the contractBank loanNoneNot applicableNot applicableConstruction incomeNot applicableNot applicable
Qatar Newport NPP/0057 Housing and Infrastructure EngineeringEPC General contractingNegotiated pricingExecute according to the contractBank loanNoneNot applicableNot applicableConstruction incomeNot applicableNot applicable
5 million tons / year refinery project in CambodiaEPC General contractingNegotiated pricingExecute according to the contractBank loanNoneNot applicableNot applicableConstruction incomeNot applicableNot applicable
Cambodia Haoli Diamond Project (Phnom Penh National AssemblyEPC General contractingBidding pricingExecute according to the contractBank loanNoneNot applicableNot applicableConstruction incomeNot applicableNot applicable
Street Commercial/Residential Area Development Project)
PPP project of Baiyang Lake Headquarters Economic Port, Xingang District, Chenglingji, Hunan ProvincePPP modeBidding pricingExecute according to the contractBank loanNoneNot applicableNot applicableConstruction incomeNot applicableNot applicable
Chongqing Yinglong Lake Rural Revitalization Demonstration Park ProjectInvestment
Development of the Dongpoxi Special Economic Zone in Vientiane, Laos - EPC General ContractEPC General contractingNegotiated pricingExecute according to the contractBank loanNoneNot applicableNot applicableConstruction incomeNot applicableNot applicable
General contracting of 5000 sets of modern affordableEPC+F General contractingNegotiated pricingExecute according to the contraBank loanNoneNot applicableNot applicableConstruction incomeNot applicableNot applicable
housing projects in the Republic of Congoct

Status of completed (completed acceptance) project during the reporting period:

Unit: Yuan

Business ModelNumber of ProjectsItem AmountAcceptance SituationRevenue ConfirmationSettlement SituationRepayment Situation
EPC General contracting11,100,000,000.00Handed overRevenue confirmedUnsettlement1,080,142,722.26

Status of completed (non-completed acceptance) project during the reporting period:

Unit: Yuan

Business ModelNumber of ProjectsItem AmountAccumulated Confirmed RevenueAmount of Non-completed Parts
PPP mode12,000,000,000.009,137,796.591,990,862,203.41
EPC+F General contracting12,000,000,000.000.000.00
Investment110,000,000,000.000.000.00

Unit: Yuan

Project NameCompletionBusiness ModelStart DateDurationPercentage of CompletionCurrent Confirmed RevenueAccumulated Confirmed RevenueRepayment SituationReceivables Balance
Subcontracted Project of the Military Academy of Kuwait National Ministry of Defence2,100,000,000.00EPC General contractingJune 21, 20151,460 days57.00%1,174,079,614.23483,557,587.63716,094,881.32
Qatar Newport NPP/0057 Housing and Infrastructure Engineering1,500,000,000.00EPC General contractingMarch 20, 2015971 days100.00%54,541,245.261,981,727,577.071,320,438,761.02674,079,636.78
5 million4,268,00EPCMay 4,1,3819.00%0.00369,885,008.172,83197,051,27
tons / year refinery project in Cambodia0,000.00General contracting2017days263,735.063.20
Cambodia Haoli Diamond Project (Phnom Penh National Assembly Street Commercial/Residential Area Development Project)1,100,000,000.00EPC General contractingAugust 14, 20141,996 days100.00%0.001,070,958,575.311,080,142,722.262,766,807.52
PPP project of Baiyang Lake Headquarters Economic Port, Xingang District, Chenglingji, Hunan Province2,000,000,000.00PPP modeNovember 01, 20171,095 days9,137,796.599,137,796.59-10,051,576.25
Chongqing Yinglong Lake Rural Revitalization Demonstration Park Project10,000,000,000.00Investment
Development of the Dongpoxi Special Economic Zone in8,736,000,000.00EPC General contracting2,190 days
Vientiane, Laos - EPC General Contract
General contracting of 5000 sets of modern affordable housing projects in the Republic of Congo2,000,000,000.00EPC+F General contracting

Other notes□ Applicable √ Not applicableStatus of completed outstanding projects in inventory:

Unit: Yuan

Accumulated Costs IncurredAccumulated Confirmed Gross ProfitExpected LossAlready Settled AmountCompleted Outstanding Balance

Unit: Yuan

Project nameAmountAlready Settled AmountCompleted Outstanding Balance

Other Notes□ Applicable √ Not applicableDoes the company carry out overseas projects?

√ Yes □No

Unit: Yuan

Project nameAmountBusiness ModelCompletion
Subcontracted Project of the Military Academy of Kuwait National Ministry of Defence2,100,000,000.00EPC General contractingThe civil construction structure and masonry of each building are completed, and the doors and windows, decoration, and electromechanical professional construction are in progress.
Qatar Newport NPP/0057 Housing and Infrastructure Engineering1,500,000,000.00EPC General contractingUnder finishing construction
5 million tons / year refinery project in Cambodia4,268,000,000.00EPC General contractingEarthwork backfilling, earthmoving work; construction of concrete mixing plant; temporary infrastructure construction, and temporary camp construction
Cambodia Haoli Diamond Project (Phnom Penh National Assembly Street Commercial/Residential Area Development Project)1,100,000,000.00EPC General contractingThe structure is completed and handed over, the podium building is completed and handed over, the SOHU decoration is completed and handed over; the APT tower decoration is completed and handed over; the podium curtain wall is completed and handed over; the electromechanical construction is completed and handed over
PPP project of Baiyang Lake Headquarters Economic Port, Xingang District, Chenglingji, Hunan Province2,000,000,000.00PPP mode
Chongqing Yinglong Lake Rural Revitalization Demonstration Park Project10,000,000,000.00Investment
Development of the Dongpoxi Special Economic Zone in Vientiane, Laos - EPC General Contract8,736,000,000.00EPC General contractingOn-site camp and temporary construction are completed
General contracting of 5000 sets of modern affordable housing projects in the Republic of Congo2,000,000,000.00EPC+F General contracting

(5) Composition of business costThe company shall comply with disclosure requirements in Shenzhen Stock Exchange Industry InformationDisclosure Guidelines No. 7-the Listed Company Engagement in Civil Engineering Construction Business.Component of business cost

Unit: Yuan

Composition20182017Increase /decrease Proportion
AmountProportionAmountAmount
Labor1,504,503,479.9861.42%2,765,222,215.8456.59%-45.59%
Material695,785,282.3828.41%1,483,612,055.4330.36%-53.10%
Other249,211,872.5110.17%527,498,994.9610.80%-52.76%

Industry Category

Unit: Yuan

IndustryItems20182017Increase /decrease
AmountProportionAmountProportion
EPCLabor1,231,327,330.7750.27%2,506,781,251.4451.30%-50.88%
EPCMaterial522,483,649.0321.33%1,286,809,864.4026.33%-59.40%
EPCOther100,365,333.004.10%433,230,315.678.87%-76.83%
Medical service99,316,403.494.05%97,366,145.371.99%2.00%
Engineering design1,570,644.560.06%13,262,528.250.27%-88.16%
Decoration workLabor273,176,149.2111.15%258,440,964.405.29%5.70%
Decoration workMaterial173,301,633.357.07%196,802,191.034.03%-11.94%
Decoration workOther47,959,491.461.96%94,268,679.291.93%-49.12%

Unit: Yuan

ProductItems20182017Increase /decrease
AmountProportionAmountProportion
EPCLabor1,231,327,330.7750.27%2,506,781,251.4451.30%-50.88%
EPCMaterial522,483,649.0321.33%1,286,809,864.4026.33%-59.40%
EPCOther100,365,333.004.10%433,230,315.678.87%-76.83%
Medical service99,316,403.494.05%97,366,145.371.99%2.00%
Engineering design1,570,644.560.06%13,262,528.250.27%-88.16%
Decoration workLabor273,176,149.2111.15%258,440,964.405.29%5.70%
Decoration workMaterial173,301,633.357.07%196,802,191.034.03%-11.94%
Decoration workOther47,959,491.461.96%94,268,679.291.93%-49.12%

Note

(6) Whether Changes Occurred in Consolidation Scope in the Report Period

√ Yes □NoDuring the reporting period, the changes in the scope of consolidated statements are detailed in the notes to the financial reports.

(7) Relevant Situation of Significant Changes or Adjustment of the Business, Product or Service in theCompany’s Report Period

□ Applicable √ Not applicable

(8) Situation of Main Customers and Main Supplier

Information of Main Customers

Total sales amount to top 5 customers (RMB)1,175,772,799.58
Proportion of sales to top 5 customers in the annual sales (%)48.45%
Proportion of the sales volume to the top five customers in the total sales to the related parties in the year0.00%

Information of the Company’s top 5 customers

NoNameAmount (RMB)Proportion (%)
1Customer 1588,855,867.6924.26%
2Customer 2323,621,751.2613.33%
3Customer 3100,635,898.114.15%
4Customer 484,152,835.113.47%
5Customer 578,506,447.413.23%
Total--1,175,772,799.5848.45%

Other notes of major customers□ Applicable √ Not applicableMajor suppliers

Total purchase of top 5 Suppliers (RMB)645,383,000.58
Percentage of total purchase of top 5 suppliers in total annual purchase (%)26.35%
Proportion of purchase amount from the top 5 suppliers in the total purchase amount from the related parties in the year0.00%

Information about the top 5 suppliers

NoNameAmount (RMB)Proportion
1Supplier 1390,603,102.0015.95%
2Supplier 277,094,220.903.15%
3Supplier 367,334,330.252.75%
4Supplier 456,090,518.762.29%
5Supplier 554,260,828.642.22%
Total--645,383,000.5826.35%

Other notes of major suppliers□ Applicable √ Not applicable

3. Expenses

Unit: Yuan

20182017Increase/Decrease (%)Notes
Sale expenses28,300,802.4232,213,247.97-12.15%
Administration expenses311,698,800.53312,957,207.20-0.40%
Financial expenses606,015,536.23432,590,607.5540.09%Mainly due to interest on bank loans and damages for breach of contract

4. R& D Expenses

√Applicable □Not applicableIn order to enhance the company’s core competitiveness and meet the needs of sustainable development, the Company’s main R&Ddirection during the reporting period was decoration engineering design, project general contracting, etc. Currently, each project hasbeen progressed as scheduled, and after practical application, the good economic and social benefits have been achieved.Situation of Research and Development Input by the Company

20182017Increase /decrease (%)
Number of Research and Development persons (persons)40146-72.60%
Proportion of Research and Development persons4.87%5.08%-0.21%
Amount of Research and Development Investment (In RMB)31,536,641.34156,200,083.05-79.81%
Proportion of Research and Development Investment of Operation Revenue1.30%2.40%-1.10%
Amount of Research and Development Investment Capitalization (In RMB)0.000.000.00%
Proportion of Capitalization Research and Development Investment of Research and Development Investment0.00%0.00%0.00%

The Reason of the Prominent Change in Total Amount of Research and Development Input Occupying the Business Income Year onYear□Applicable √Not applicableExplanation of the Reason for Substantial Changes in the Research and Development Input’s Capitalization Rate and ItsReasonableness□Applicable √Not applicable

5. Cash Flow

Unit: Yuan

Items20182017YoY Increase/Decrease (%)
Subtotal of cash inflow received from operation activities8,406,131,087.2610,789,046,921.79-22.09%
Subtotal of cash outflow received from operation activities7,578,252,031.8112,570,915,540.44-39.72%
Net cash flow arising from operating activities827,879,055.45-1,781,868,618.65-146.46%
Subtotal of cash inflow received from investing activities3,824,000.002,085,000.0083.41%
Subtotal of cash outflow for investment activities195,480,772.241,022,993,256.12-80.89%
Net cash flow arising from investment activities-191,656,772.24-1,020,908,256.12-81.23%
Subtotal cash inflow received from financing activities1,481,623,182.065,092,144,392.35-70.90%
Subtotal cash outflow for financing activities2,638,553,654.502,564,264,123.492.90%
Net cash flow arising from financing activities-1,156,930,472.442,527,880,268.86-145.77%
Net increase in cash and cash-521,454,793.60-296,482,731.9375.88%

Notes to the year-on-year change of the relevant data√Applicable □Not applicableIn 2018, the company encountered liquidity difficulties, the scale of its operations shrank, and the inflow and outflow of operatingfunds decreased from the previous year; Affected by this, foreign investment has decreased significantly; Meanwhile, due toenvironmental influences such as bank loan withdrawal and financial deleveraging, the Company has difficulty in financing, the cashinflow from financing has been greatly reduced, and the net cash flow from financing activities has been negativeNotes to the big difference between cash flow from operating activities and net profit in the reporting year□Applicable √Not applicable

III. Analysis of Non-core Business

□Applicable √Not applicable

IV. Condition of Asset and Liabilities

1. Condition of Asset Causing Significant Change

Unit: Yuan

equivalents

End of 2018End of 2017Proportion increase/decreaseNotes to the significant change
AmountProportion in the total assets (%)AmountProportion in the total assets (%)
Monetary funds658,714,886.486.86%1,604,973,916.1213.76%-6.90%Mainly due to the deduction of guarantee deposit on account of guarantee claim
Account receivable4,202,594,258.2443.76%5,706,675,244.0848.91%-5.15%Mainly due to the decrease of income during the report period
Inventory717,531,578.237.47%556,839,325.504.77%2.70%
Long-term Equity Investment106,837,810.831.11%0.00%1.11%
Fixed assets158,746,947.911.65%174,537,150.561.50%0.15%
Construction in process36,697,284.040.38%4,968,590.960.04%0.34%
Short-term loans2,862,584,629.0129.81%3,477,200,420.5529.80%0.01%
Long-term120,000,000.1.25%843,092,471.7.23%-5.98%Mainly due to the repayment and
loans0002decrease of loans during the report period

2. Asset and Liabilities Measured by Fair Value

□Applicable √Not applicable

3. Restricted asset rights as of the end of this Reporting Period

ItemsYear-end book valueReason
Monetary funds532,947,089.60Margin and frozen funds
Account receivable716,094,881.32Pledge
Fixed asset15,963,305.27Financial lease assets
Total1,265,005,276.19

V. Investment situation

1. General condition

√Applicable □Not applicable

182,993,849.80840,948,723.7778.24%

2. Condition of Acquiring Significant Share Right Investment during the Report Period

□Applicable √Not applicable

3. Situation of the Significant Non-equity Investment Undergoing in the Report Period

□Applicable √Not applicable

4. Investment of Financial Asset

(1) Securities investment

□Applicable √Not applicableThe Company had no securities investment in the reporting period.

(2) Investment in Derivatives

□Applicable √Not applicableThe Company had no investment in derivatives in the reporting period.

5. Application of the raised capital

√Applicable □Not applicable

(1) General application of the raised funds

√Applicable □Not applicable

Unit: 10,000 Yuan

Year of RaisingWay of RaisingTotal raised capitalTotal Amount of the Raised Fund Used at theTotal amount of Raised FundsAmount of raised capital of which the purpose was changed in the report periodAccumulative amount of raised capital of which the purpose has been changedProportion of raised capital of which the purpose has been changed (%)Total Amount of the Unused Raised Fund at the Current PeriodUse and Whereabouts of the Unused Raised FundAmount of the Raised Fund with over 2 Years’ Idling
2015Non-public offering25,500011,739.85000.00%13,760.15For temporary replenishment of corporate liquidity0
合计--25,500011,739.85000.00%13,760.15--0
Notes to use of raised capital
Upon the approval from the CSRC with the document of the 2015-No.1774 Zheng Jian Xu Ke -Reply of the Major Asset Restructuring and the Issue of Shares to Objects such as Chen Lue to Purchase Assets and Raise Matching Funds by Shenzhen Victor Onward Textile Industrial Co., Ltd., Sino Great Wall International Engineering Co., Ltd. (hereinafter referred to as: “company or the company”) had non-publicly issued 25,914,633 shares of RMB common share(A share), of which the par value per share was RMB 1.00, the issuing price per share was RMB 9.84, the total funds raised was RMB 254,999,988.72, and after deducting the issuance expenses of RMB 14,500,000.00 directly from the raised funds, the actual net amount of the raised funds is RMB 240,499,988.72. As of December 31, 2018, the company accumulatively used the raised funds of RMB 117,398,462.65, of which the Company used the raised funds of RMB 0 in 2018. By the end of 2018, the company accumulatively invested RMB 100,000,000.00 in the overseas marketing network construction project and RMB 276,000 in the second phase of informatization construction project, and the taxes and charges and the intermediary fees related to this transaction was RMB 17,122,462.65, yet the not-yet-used balance of the raised funds was 137,601,526.07; besides, the idle raised funds used for temporarily supplementing the Company’s liquidity was RMB 139,327,254.00, the interest income from the special account for raised funds

(2) Promised projects of raised capital

√Applicable □Not applicable

Unit: 10,000 Yuan

was RMB 1,732,150.44, the expenditure for the handling charges of the special account for raised funds was RMB 1,043.92, andthe actual balance of the special account for raised funds was RMB 5,883.59.

Committedinvestment projects

and investment

Committed investment projects and investmentProject changed (including partial change)Total raised capital invested as committedTotal investment after adjustment (1)Amount invested in the reporting periodAccumulated amount invested at the end of the reporting period (2)Investment progress ended the reporting period (%) (3) = (2)(1)Date when the project has reached the predicted applicable statusBenefit realized in the reporting periodHas the predicted result be realizedHas any material change taken place in feasibility
Committed investment projects
1. Overseas marketing network construction projectYes10,00010,00010,000100.00%YesNo
2.Informatization Construction Phase IINo2,5002,50027.61.10%NoYes
3.Related taxes and agency fees of this transactionNo13,00013,0001,712.2513.17%Not applicableYes
Subtotal of committed investment projects--25,50025,50011,739.85--------
Investment orientation for und arising out of plan
Not applicable
Total--25,50025,500011,739.85----0----
Situation about not coming up to schemed progress or expected revenue and the reason (in1. Phase II Information Construction Project: The Sino Great Wall has changed from its core business of decoration construction before listing to its core business of general contracting after listing. After that, it has gradually transitioned its core business to engineering construction and investment and management of medical and health industries. In recent years, the business model of listed companies has changed. However, the phase II information construction project to be invested in at the initial stage of listing is
specific project)no longer suitable for the current development status. 2. Taxes and intermediary expenses related to the transaction of raised funds: The company has registered for filing the special tax treatment for enterprise restructuring at the Dapeng New District Local Taxation Bureau on May 26, 2016. The type of special tax treatment for enterprise restructuring is equity acquisition, and the filing number is SDSPB [2016] No.22. For this reorganization of the company, special reorganization is selected in terms of tax. The part of the value of the company's placed assets that is equivalent to the value of the placed assets is recognized according to the original book value of the placed assets. Therefore, the transfer income of the relevant assets is not recognized for the time being during this reorganization, and the income tax liability is not generated for the time being during this reorganization. In the later period, in case of any income from asset transfer, the company will fulfill its tax obligations in a timely manner in accordance with the provisions of the tax law. In order to maximize the use efficiency of raised funds and reduce financial expenses, the company held the fourth meeting of the eighth board of directors on January 26, 2019, and deliberated and passed the Proposal on Termination of Some Funded Investment Projects and Use of Funds Raised for Temporary Supplementary Working Capital for Permanent Supplementary Working Capital. The Company plans to terminate the raised funds investment project "Phase II Informatization Construction Project" and "taxes and intermediary fees related to the raised funds transaction" and use the remaining raised funds of RMB 137,601,537.35 (excluding interest) for permanent replenishment of working capital. On February 13, 2019, the above proposal was reviewed and approved by the company's first extraordinary shareholders' meeting in 2019.
Notes to significant change in feasibility of the projectPlease refer to the above-mentioned "circumstances and reasons for not achieving the planned schedule or expected revenue".
Amount, application and application progress of the unbooked proceedsNot applicable
About the change of the implementation site of the projects invested with the proceedsApplicable
Adjustment of the implementation way of investment funded by raised capitalNot applicable
About the initial investment in the projects planned to be invested with the proceeds and the replacementNot applicable
Using the idle proceeds to supplement the working capital on temporary basisApplicable
In order to maximize the use efficiency of the raised funds and reduce financial expenses, the Company will, in consideration of the funds use plan for the projects invested by the raised funds, use RMB 120 million of idle raised funds to temporarily supplement the liquidity, with a term of such use no more than 12 months, From the date of approval by the board of directors of the company, the special account for raised funds shall be returned in full upon maturity. The matter has been examined and approved by the 35th meeting of the seventh board of directors of the company, and the board of supervisors, independent directors and recommendation agencies of the company have all expressed their opinions of agreement. During its use, the company did not change the use of the raised funds in disguised form, did not affect the normal operation of the investment plan of the raised funds, and did not carry out securities and other risk investments. The company transferred out the raised capital of RMB 120,000,000.00 from August 1 in 2018. Due to a contract dispute in Bank of Ningbo, the Company's account number 23001892778 of Bank of Shanghai Beijing Branch was deducted RMB 14,158,049.00 on August 8, 2018. Due to the execution of (2018) W0928Z No.13610-251370, the company's account number 03002719068 was deducted RMB 5,169,205.00 on October 25, 2018, resulting in the company's raised funds temporarily supplementing the actual use amount of working capital by RMB 139,327,254.00, exceeding the amount approved by the board of directors by RMB 327,254.00.
Balance of the proceeds in process of project implementation and the causeNot applicable
About application and status of the proceeds unusedAs of December 31, 2018, the unused raised funds are still in the raised funds account. The company held the fourth meeting of the eighth board of directors on January 26, 2019, and deliberated and passed the Proposal on Termination of Some Funded Investment Projects and Use of Funds Raised for Temporary Supplementary Working Capital for Permanent Supplementary Working Capital. On February 13, 2019, the above proposal was deliberated and passed by the company's first extraordinary shareholders’ meeting in 2019. The unused fund raised by the company has permanently replenished the working capital.
Problems existing in application of the proceeds and the information disclosure or other issues1. On March 6, 2019, the Company received the Decision on Taking Corrective Measures against Sino Great Wall Co., Ltd. ([2019] No.11) from Shenzhen Supervision Bureau of China Securities Regulatory Commission (hereinafter referred to as the "Decision on Correction"). The Decision on Correction raises the following questions regarding the use of the company's raised funds: the Management System for the Use of Raised Funds does not involve the accountability mechanism for the illegal use of raised funds, and the provisions on the hierarchical examination and approval authority, decision-making procedures, risk control measures, etc. for the use of raised funds are unclear, which do not conform to the provisions of Article 3 of the Guidelines No.2 for the Supervision of Listed Companies - Regulatory Requirements for the Management and Use of Raised Funds by Listed Companies. Currently, the Company has fulfilled its obligations on the use of raised funds and information disclosure in accordance with the Guidelines No.2 for the Supervision of Listed Companies - Regulatory Requirements for the Management and Use of Raised Funds by Listed Companies, Measures for the Administration of Information Disclosure by Listed Companies and Listing Rules of Shenzhen Stock Exchange. On March 18, 2019, the Company held the fifth meeting of the eighth board of directors and deliberated and passed

(3) Changes of raised funds projects

□Applicable √Not applicableThe Company had no sales of major assets in the reporting period.

VI. Sales of major assets and equity

1. Sales of major assets

□Applicable √Not applicableThe Company had no sales of major assets in the reporting period.

2. Sales of major equity

√Applicable □Not applicable

the Proposal on revising the Management System of Raised Funds, improving the accountabilitymechanism for illegal use of raised funds, and specifying the grading approval authority,decision-making procedures and risk control measures for the use of raised funds.2. In 2018, the board of directors of the company passed the Proposal on Temporary Replenishment ofCirculating Fund with Part of Idle Raised Funds and agreed to temporarily replenish the working capitalwith 139 million yuan of raised funds. The company transferred out the raised capital of RMB120,000,000.00 from August 1 in 2018. Due to a contract dispute in Bank of Ningbo, the Company'saccount number 23001892778 of Bank of Shanghai Beijing Branch was deducted RMB 14,158,049.00on August 8, 2018. Due to the execution of (2018) W0828Z No.13610-251370, the company's accountnumber 03002719068 was deducted RMB 5,169,205.00 on October 25, 2018, resulting in the company'sraised funds temporarily supplementing the actual use amount of working capital by RMB139,327,254.00, exceeding the amount approved by the board of directors by RMB 327,254.00. In viewof the resolution of the Company’s first extraordinary shareholders' meeting on February 13, 2019 toconsider and pass the Proposal on Termination of Some Funded Investment Projects and Use of FundsRaised for Temporary Supplementary Working Capital for Permanent Supplementary Working Capital,the Company will no longer return the above-mentioned part of raised funds exceeding the amountapproved by the Board of Directors to the special account for raised funds.

Count

erparty

Counter partySold equitiesSold dateTransaction price (Ten thousand yuan)Net profits contribute ted by the equities to the listedInfluence of the selling of the CompanyProportion on on of the net profits of the contribute tedPricing principles of the equities sellingWhether was the related transactionRelationship with the center partyWhether the involve d equities all completed the ownerWhether execute as schedule ed and if failed, should state theDisclosure dateDisclosure index
companies from the period- begin to the sold date (Ten thousand yuan)amount of the equities selling to the listed companies to the total amo9un t of the net profitsship transferreasons and the adopted measurments of the company
Sino Great Wall Constructional Engineering Co., Ltd.60%December 6, 20189,000-3,681.44The sale of the company generated a return on investment of RMB 15.11 million-0.88%fair valueNofair valueYesYes

VII. Analysis of the Main Share Holding Companies and Share Participating Companies

√Applicable □Not applicableSituation of Main Subsidiaries and the Joint-stock Company with over 10% net profit influencing to the Company

Unit: Yuan

Company NameCompany typeSectors engaged inRegistered capitalTotal assetsNet assetsTurnoverOperating profitNet Profit
Sino Great Wall International Engineering Co., Ltd.SubsidiariesGeneral contracting, subcontracting, engineering survey and design; professional contracting; architectural decoration engineering; architectural curtain wall; project and technology study and experimental development; sell building material, machinery, hardware, plastic articles; technology development, technology consultation, technology service; goods import and export;1,000,000,0008,591,829,570.83880,871,998.002,330,186,998.92-916,877,204.86-1,183,696,469.41

Acquirement and disposal of subsidiaries in the Reporting period√Applicable □Not applicable

technologyimport andexport;agentimport andexport.

Name

NameModeInfluence
Sino Great Wall (Beijing) Investment Fund Management Co., Ltd.Transfer
Sino Great Wall Zhihui Building Industry (Zhanjiang) Co., Ltd.Transfer
Sino Great Wall Jianjie Engineering Co., Ltd.Transfer
Guangzhou Heebeina Interior design Co., Ltd.Transfer
Shenzhen Yatian Decorative Design Engineering Co., Ltd.Transfer

NoteSino Great wall International Construction Co., Ltd. is a subsidiary of the company and is the main of income and profits of thecompany, which accounts for more than 90% of all the company’s operating income and net profit and the rest subsidiaries accountfor less than 10% of all the company’s operating income and net profit, which weight less in the whole company’s operation.

VIII. Special purpose vehicle controlled by the Company

□Applicable √Not applicable

IX. Prospect for future development of the Company

(1) Strategy of the Company’s Development

It is the 70th anniversary of the founding of New China in 2019. It is the key year for comprehensively building a well-offsociety to achieve its first 100-year goal. The 2019 Government Work Report emphasizes that the central government will launch anew round of comprehensive reform and opening-up and the second round of structural reforms in supply-side economics to furtherstabilize employment, finance, foreign trade, foreign investment, investment and expectations, boost market confidence, and maintainsustained and healthy economic development and overall social stability. In 2019, China will promote all-round opening to theoutside world, further expand the scope of opening up, optimize the layout of opening up, and further release the policy dividend.1. Building construction

As one of the pillar industries of China’s economic development, construction plays an important role in national economy andsocial life. During the “The thirteenth Five-Year Plan” period, China's economic development has entered a new normal. Theeconomic structure has been optimized and upgraded, with its driving force shifted from investment-driven to innovation-driven.China has entered a key period of reform in which the market plays a decisive role in the allocation of resources and the government

plays a better role as the core. New urbanization, coordinated development of Beijing, Tianjin and Hebei, the development of theYangtze River economic belt and the construction of "the Belt and Road" form an important driving force and valuable opportunityfor the future development of the construction industry. According to the latest research report on the development prospects of theindustry, in the medium and long term, with the continuous improvement of people’s requirements for quality of life and supportingfacilities, the sustainable development of the construction industry will be continuously promoted.

In addition, with the steady recovery of macro-economy and the rapid advancement of new urbanization, the unfavorabledevelopment trend of the construction industry market will be effectively alleviated, which will definitely have a positive impact onthe construction industry. Overseas, the resolution of the 19th National Congress on Constitution of the Communist Party of China(Amendment) explicitly stated that the promotion of “the Belt and Road” construction and other contents shall be included in theParty Constitution. Since 2017, the construction of “the Belt and Road” has entered a golden period of development, and theeconomic exchanges and cooperation between China and the countries along the “the Belt and Road” will be closer. According to thelatest report of the Asian Development Bank, from 2016 to 2030, the demand for infrastructure in the Asian region is expected toexceed USD 22.6 trillion, with an average annual demand of more than USD 1.5 trillion. The market of countries along the "the Beltand Road" will continue to be the growth point and driving force for the development of the foreign contracted engineering industry,and China's construction and decoration enterprises will usher in a golden development period for “going out”. Meanwhile, othercountries will continue to invest in infrastructure, and infrastructure development will continue to rise steadily. As a well-knowninternational engineering construction contractor, the company, relying on its rich construction experience and market image, willearnestly seize the historic development opportunities in the overseas engineering contract market, carry out in-depth research andproject exploration in countries and regions with existing investment layout, and meanwhile continue to develop the overseasbusiness platform by using various advantageous resources, fully explore the “the Belt and Road” market, actively promote thesustainable development of overseas business, further increase the proportion of overseas market performance in the company’soverall performance, and strengthen the brand and status of private enterprise pioneer for "the belt and road initiative" of Sino GreatWall.2. Healthcare

In 2018, the National Health Commission and the National Healthcare Security Administration were formally established. The“Comprehensive Work Plan for Comprehensive Improvement of County-Level Hospitals (2018-2020)” issued by the People’sRepublic of China pointed out that by 2020, 500 county hospitals (including some impoverished county and county hospitals) andcounty Chinese medicine hospitals will reach “third-level hospitals” and The service capacity requirements of “three-level Chinesemedicine hospitals” strive to make 90% of county hospitals and county hospitals in China meet the basic standards for medicalservice capacity of county hospitals and county hospitals. County-level hospitals officially entered the stage of explosivecomprehensive construction, and China's medical engineering will usher in a golden period of development. During the reportingperiod, the company invested in the Yinglong Lake Commercial Medical Treatment and Health Care Rural Complex Project(Yinglong Lake Rural Revitalization Demonstration Project). The project integrates the herbal medicine health research institute, theinternational medical treatment and health care zone, the hot spring resort sanitarium area and other sectors, implements the"powerful combination" strategy, and collaborates with social capital to jointly build a modern medical care and rehabilitationcomplex with complete functions and facilities. Meanwhile, combining with the company's resource advantages, through theconstruction of medical real estate and supporting medical treatment and health care engineering, a medical treatment and health caredevelopment model with the company's characteristics in combination of medical treatment and health care and centered by medicaltreatment is formed.(2) The Company’s Development Strategy

The company focuses its development strategy on two aspects: one is to strengthen the project contracting and investment of theBelt and Road Initiative, and the other is to enhance the domestic medical investment. At present, the company has possessedabundant projects in Southeast Asia, South Asia, the Middle East and Africa. In the field of medical and health care, apart frominvesting in the construction of health care engineering, it will further choose to purchase mature hospitals and introduce foreign

advanced proton therapy technologies and leading medical services. The company will give full play to the advantages of listedcompanies in financing, engineering construction coordination, investment decision-making, medical expert resources and moderncorporate governance, gather medical experts from Beijing and Shanghai and hospital management experts, and strive to build ahospital management group with important status and influence in the industry. Centering around the development strategies of“enlarging and strengthening overseas business to become an integrated international construction services supplier” and “developingthe health-care industry”, in the future, the company will devote major efforts to developing abroad business and arranging themedical industry so as to enhance its capacity for core competitiveness and profit constantly and eventually strive to build itself into aprominent business group developed by the mutual driving forces of construction and health-care industry.(3) The Company's Business Plans

Facing the difficulties both domestically and internationally in 2018, the company will focus on the following work in 2019:

1. Optimize the business structure and management system, and improve the company's performance appraisal system

In 2019, in combination with the internal and external environment faced by the company for development, the company'sbusiness organization and business structure will be adjusted upon the review of the company's board of directors; The company'sstaffing will be re-combed, the salary and performance appraisal system will be formulated according to company managementstructure and business model to reduce the personnel cost effectively, and control various expenses reasonably for more scientific andefficient business management.2. Comb the internal control system to improve the level of fine management

The company will re-comb its corporate governance system and strengthen construction of internal control systems to improveits fine management level. According to the Shenzhen Securities Regulatory Bureau's decision to order the company to makecorrections, the company will fully supervise the implementation of the rectification measures in accordance with the contents of therectification report, make reasonable plans for the overall financial situation of the company, continue to consolidate the basic workof financial accounting, form a stable financial control system, reduce management costs and financial risks, and well ensure thesafeguarding of the company's business development.3. Strengthen the collection of accounts receivable and actively promote debt restructuring

In 2019, the company will intensify the collection of accounts receivable, include the collection of accounts receivable as a keyassessment index, set up a special "debt collection decision leading group", formulate a corresponding debt collection incentivesystem, and link the collection of overdue accounts receivable with individual performance assessment. If necessary, legalproceedings and assigned responsible persons will be used to strengthen the collection of overdue accounts receivable, and thecollection of accounts receivable will be implemented as a key special management work to effectively improve the company's assetquality. Meanwhile, investment and financing capability is an important prerequisite for the medium and long-term stabledevelopment of the enterprise. The company will resolve the existing on-balance-sheet litigation as soon as possible, enhance theconfidence of external financial institutions, actively adjust the loan structure, reduce the financing cost, realize the dynamic balanceof funds, promote the investment and financing activities on the right track, In addition, the company actively communicated andsought solutions for current debt overdue, litigation and arbitration matters, and did not rule out the use of judicial restructuring anddebt restructuring to solve the company's current financial difficulties.4. Consolidate existing overseas projects and continue to expand overseas markets

In 2019, the company will focus on the national strategic layout, continue to deepen the overseas market, strengthen exchangesand cooperation with the governments of countries and regions along the "the Belt and Road", fully seize the construction projectopportunities brought by the countries and regions along the "the Belt and Road", focus on intensive cultivation in key markets,continue to strengthen business expansion, strengthen the comprehensive management of EPC contracting for overseas projects,refine the classification of management subjects, and further promote regional and project responsibility management, so as to meetthe relevant requirements of the company for professional business and fine management. Meanwhile, it will take root in the existingbusiness areas, moderately expand the volume of professional engineering, and actively expand the industrial energy constructionmarket in the advantageous market areas.

5. Actively expand smart houses and build up medical treat and health care businesses

In 2019, the company will continue to raise funds to complete the construction of the smart housing industry base in ZhanjiangCity, Guangdong Province, and ensure that it passes the commissioning acceptance and goes into production within the year;Meanwhile, the company will accelerate the expansion of the smart housing sector in the domestic real estate industry, closely followthe good policy of China to vigorously build the beautiful countryside, actively promote the construction of a new socialistcountryside, and strive to open a smart housing rural sector operation center in Xiong'an New Area in 2019, so as to buildhigh-quality village houses for farmers; In addition, in combination with the company's advantageous resources in the health caresector and relying on the construction of health care facilities, the sales, operation and service of health care apartments, the companyactively created a new pattern of transformation and upgrading.6. Actively expand smart houses and profit growth points

In 2019, the company will continue to raise funds to complete the construction of the smart housing industry base in ZhanjiangCity, Guangdong Province, to ensure that the trials will be completed and put into production during the year. At the same time, thecompany will accelerate the expansion of the smart housing sector in the domestic real estate industry, closely following the country'sefforts to build beautiful villages. Policies, actively promote the construction of a new socialist countryside, and strive to open asmart housing rural sector operation center in Xiong'an New District in 2019 to build high-quality village houses for the majority offarmers; in addition, combined with the superior resources of the company's Kangyang plate, relying on Kang The construction offacilities, the sales, operation and service of Kangyang Apartment will actively create a new pattern of transformation and upgradingof the company.(4) Main Risks faced by the Company and Solutions1. Macro economy and policy-related influences

The company belongs to the construction industry. The change of economic cycle is closely related to the development ofconstruction industry, and factors such as the operation of national economy and the development of urbanization process willdirectly affect the construction industry. The company's main business is in a fully competitive market with low industry barriers andfierce competition. The company is in a period of rapid development, and the rapid development and expansion of domestic andforeign businesses raise higher requirements for the company's organizational operations and project management.

Solutions: Pay constant attention to the international and domestic economic situation to make reasonable prejudgment. Maketimely adjustment for operating strategy and marketing policy and make pre-arranged planning which copes with market changes toguarantee the smooth realization for business goals in 2019.2. Risks Aggravated by the Market Competition

As to the international market, on the one hand, the combinations among the strong ones of the giant international contractors inEurope, America, Japan and South Korea are increasingly common, which can increasingly strength the aspects including thetechnology, financing and management; on the other hand, more domestic enterprises have participated in the international marketcompetition of construction & engineering, intensified the overseas construction market competition. In the domestic market, withthe continuous rise of the attractiveness of medical engineering projects, many companies have participated in the construction ofmedical engineering projects. Thus, the medical engineering projects have been more difficult to bid and have fierce competition,which imposes a higher requirement on the Company's market expansion.

Solutions: Strengthen team construction and take first-mover advantage of the Company’s overseas business. Draw lessons fromthe past, improve the capacity of management and control for the Company’s own projects to constantly heighten the Company’score competitiveness.3. Management Risks Brought by Constant Business Scope Enlargement

The company's business and scale continue to expand, putting forward higher requirements for the management of thecompany's management mode, talent reserve, technological innovation and market development.

Solutions: The company will continue to improve the management level, strengthen the talent reserve, adjust and improve themanagement system, continue to strengthen the information management, and form big data precipitation and analysis of various

data in the operation process through advanced technical means, so as to promote the improvement of management efficiency andwiden the management coverage.4. Operation-related risks(1) Risks of period in project construction

The engineering construction project may be affected by factors such as changes in project design, delays in the payment ofproject funds, restrictions on transportation, power supply and water supply, land acquisition and relocation, and bad weather, etc.,resulting in the failure to proceed as the project schedule agreed in the contract, the risk of the project not being completed anddelivered on schedule, and the impact on the company's operating performance and reputation.(2) Risk of increased material price

The construction industry is mainly about fixed cost contract, so gross profit margin is somehow sensitive to the fluctuation ofpurchasing price of construction materials. The bulk materials used by the company mainly include concrete and steel. Due to thelong construction period in construction projects, the price increase of these bulk materials will directly lead to the increase ofconstruction costs, resulting in the difference between the actual construction costs and the project budget, affecting the company'soperating performance.(3) Operational risks of overseas businesses

Although the company's overseas businesses are mainly in Southeast Asia and other regions, the company will face potentialeconomic risks, exchange rate risks, political risks and other risks in the process of overseas business operation. In case of majorfluctuations or economic crises in the economic development of the countries or regions where the company's overseas target marketsare located, they will adversely affect the company's overseas business and the further development of new markets in the future.

Solutions:For the above risks, the company will integrate internal and external resources, strengthen technological innovationaccording to the professional development ideas, seek expansion of business areas and construction qualifications, improve operationquality and benefits, create green and high-quality projects, realize multi-field professional construction operations and enterprisedevelopment, and continuously upgrade brand strength.5. Risk of bad debt caused by accounts receivable

Some countries have entered the debt repayment period, with increased financial pressure, increased risk of debt default,insufficient confidence of investors, and scarce funds for infrastructure construction. The company has a large balance of accountsreceivable, and the high proportion of net accounts receivable to total assets is due to the characteristics of the industry. With theexpansion of the company's business scale, the balance of the company's accounts receivable is generally on the increase, and theproportion of net accounts receivable to total assets is expected to remain at a relatively high level. The failure to recover thecompany's accounts receivable in time will affect the company's capital turnover rate and cash flow from operating activities, thusadversely affecting the company's production, operation and performance level.

Solutions:Strengthen fund management, rationally allocate fund structure, and establish assessment mechanism for project fundrecovery to resolve and prevent potential fund risks.6. Risks of litigation and asset freeze caused by debt repayment

Earlier, the company issued multiple announcements on litigation and arbitration matters in the designated informationdisclosure media. As the overdue debts of the company and its subsidiaries are not paid off and the company is under investigation bythe CSRC, the company has been sued by some creditors and some of its bank accounts and company's assets have been frozen. Theoverdue debts of the company may be subject to payment of relevant liquidated damages, late fees and penalty interests, increasingthe company's financial expenses, thus affecting the company's production and business operation, possibly weakening theconfidence of other creditors in the company, thus aggravating the company's financial tension and adversely affecting the company'soperation.

Solutions:The Company will continue to pay attention to the follow-up progress, fulfill its information disclosure obligations ina timely manner in accordance with relevant regulations, strengthen the management of litigation-related matters, and employprofessional lawyers to actively respond to lawsuits so as to protect the legitimate rights and interests of the company. The company

is making every effort to raise debt service funds and properly handle the debt crisis. Does not rule out future borrowing judicialrestructuring, debt restructuring and other ways to solve the company's current financial difficulties.7. Risk of share suspension

The company is currently being investigated by the China Securities Regulatory Commission because of suspected illegalinformation disclosure. According to the relevant provisions of the Shenzhen Stock Exchange Listing Rules (Revised in November2018), if the company is involved in the illegal material information disclosure and under other forced delisting situations stipulatedin Article 13.2.1, the company's shares will be subject to the delisting risk warning. The company's shares will be suspended on thenext trading day after the expiration of the 30-trading-day period in the delisting risk warning until the Shenzhen Stock Exchangemakes a decision on whether to suspend the listing of the company's shares within 15 trading days after the suspension. If theinvestigation items that the company is involved in are not found to have any major illegal acts by the CSRC, the company's shareswill not be at risk of suspension.

Solutions:The Company will actively cooperate with the CSRC to carry out investigations, and perform its informationdisclosure obligations according to the relevant provisions of the Shenzhen Stock Exchange Listing Rules and disclose risk alertannouncements at least once a month.

X. About researches, visits and interviews received in this reporting period

1、Records about researches, visits and interviews received in the reporting period

√ Applicable □ Not applicable

Reception timeWay of receptionTypes of visitorsBasic index
March 8,2018Onsite investigationOrganizationThe interactive relation with the investors on Shenzhen Stock Exchange platform about Sino Great Wall International Engineering Co., Ltd: Record of the investors relations activities on March 8, 2018.
Reception times1
Reception agency amount3
Reception personal number0
Others0
Whether to disclose, reveal or disclose non-public material informationNo

V. Important Events

I. Specification of profit distribution of common shares and capitalizing of common reserves

Formulation, implementation and adjustment of profit distribution policy of common shares especially cash dividend policyduring the reporting period√Applicable □Not applicable

During the reporting period, the formulation and implementation of the company's cash dividend policy comply with theprovisions of the Articles of Association and the requirements of the resolutions of the shareholders' meeting. The dividend standardand proportion are explicit and clear. Relevant decision-making procedures and mechanisms are complete. Independent directorsfulfill their duties and play their due roles. The shareholders' meeting and the daily investor reception work provide small andmedium shareholders with the opportunity to fully express their opinions and demands, and the legitimate rights and interests ofsmall and medium shareholders are fully protected.

Special cash dividend policy description
Whether meets the requirements of the provisions of the articles of association or shareholders' meeting resolutions:Yes
Whether dividends standard and proportion are clearYes
Whether decision making and supervision mechanism for profit distribution are completedYes
Whether independent directors perform their duties responsibly and play its due role:Yes
Whether the Minority shareholders have adequate opportunity to express their views and aspirations and Their legitimate rights and interests have been fully protectedYes
Whether the Cash dividend policy to adjust or change the conditions and procedures are compliant and transparentNot applicable

The profit distribution preplan or proposal and the preplan or proposal of conversion of the capital reserve into share capital in thepast three years (with the reporting period inclusive):

1. Profit distribution plan for 2016the Company distributed cash dividends of RMB 0.60 (including tax) for every 10 shares based on the existing 1,698,245,011 shares.with a total distribution of RMB 101,894,700.66. No bonus shares were given and no capital reserves were conversed. The remainingun-allocated profit will be carried over to the next year. The 2016 profit distribution plan has been approved and implemented at the2016 shareholders' meeting of the company.2. Profit distribution plan for 2017On April 23,2018,The 32nd meeting of the 7th board of directors of the company deliberated and approved the 2017 profitdistribution plan. The Company distributed cash dividends of RMB 0.40 (including tax) for every 10 shares based on the existing1,698,245,011 shares. With a total distribution of RMB 67,929,800.44. No bonus shares were given, and no capital reserves wereconversed. The remaining un-allocated profit will be carried over to the next year. The 2017 profit distribution plan has beenapproved and implemented at the 2017 shareholders' meeting of the company.

3. Profit distribution Preplan for 2018:

On April 28, 2019,The 7th meeting of the 8th board of directors of the company deliberated and approved the 2018 profitdistribution plan. No cash dividend, no bonus shares, no capital reserve converted into share capital. The above profit distributionplan shall be examined and approved by the company's 2018 annual shareholders' meeting. On April 28, 2019, the 7th session of the8th Board of Directors of the companyDividend distribution of the latest three years

Unit: Yuan

YearAmount for cash bonus (tax included)Net profit attributable to the over of the parent company in the consolidated financial statementsRatio in net profit attributable to the parent company in the consolidated financial statementsAmount of cash dividends from cash offer to repurchase shares of the fundsProportion of cash dividends from cash offer to repurchase shares of the fundsAmount for cash bonus (tax included)Ratio of the total cash bonus (other ways included) in net profit attributable to common stock shareholders of listed company contained in consolidation statement
20180.00-1,704,739,736.400.00%0.000.00%0.000.00%
201767,929,800.44380,090,990.8217.87%0.000.00%67,929,800.4417.87%
2016101,894,700.66473,661,862.6721.51%0.000.00%101,894,700.6621.51%

In the reporting period, both the Company’s profit and the parent company’s retained earnings were positive however not cashdividend distribution proposal has been put forward.□Applicable √Not applicable

II. Profit distribution plan and capitalizing of common reserves plan for the Period

□Applicable √Not applicableThe Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either.

III. Commitments to fulfill the situation

1.The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of thereporting period made by the company, shareholder, actual controller, acquirer, director, supervisor,senior management personnel and other related parties.

√ Applicable □ Not applicable

CommitmentCommitment makerTypeContentsTime of making commitmentPeriod of commitmentFulfillment
Commitment on share reformNoNoNoNoNo
Commitment in the acquisition report or the report on equity changesNoNoNoNoNo
Commitments in assets reorganizationChen Lue, He FeiyanStock lockShares acquired by purchases of assets through issuing shares: “I will not transfer the new shares of Victor Onward Holdings acquired through this restructuring, including but not limited to the public transfer through the stock market or by agreement, and I will not entrust anybodyMarch 19,201536 monthsFully completed (shares acquired by Chen Lue and He Feiyan from issuing shares to purchase assets have been released from restriction on sale) Please refer to the detailed conted published on juchao information website(www.cninfo.com.cn)on October
else to manage my shares of Victor Onward Holdings, within 36 months from the date new shares list and before the date I’ve carried out my obligations of performance compensation under this restructuring(subject to whatever is early, hereinafter referred to as “lock-up periods”). If the closing price of shares of Victor Onward Holdings were lower than this issue price for 20 continuous trading days in 6 months after the restructuring23, 2018(Announcement No.:2018-123)
major omission of the information provided or disclosed, I will not transfer my shares of the company before the conclusion of the case has been made clear. After the above-mentioned lock-up periods, I will sell or transfer the new shares of the company acquired from this restructuring following relevant regulations of China Securities Regulatory commission and Shenzhen Stock Exchange.
Chen LueStock lockShares acquired by matching funds raised: “IMarch 19, 201536 monthsStrict performing
will not transfer the new shares of Victor Onward Holdings acquired through this issuing by any way, including but not limited to the public transfer through the stock market or by agreement, within 36 months from the date new shares list. If regulation rules or regulators have longer requirements for lock-up periods, it should be executed accordingly.
Chen LueNo capital occupationUp to the issue day of the letter, I and other corporations controlled by me haven’tMarch 19,2015Long-termStrict performing
system and funds management system within lawful authority.
Chen LueCash compensationIn view of the fact that the houses rented by Sino Great Wall and it’s son subsidiaries, subsidiaries, haven’t rental registration, I promise, if Sino Great Wall and its son subsidiaries, subsidiaries, were penalized by real estate management department or suffered other losses resulting from it, I agree to compensate the loss of the company by cash.March 19,2015Long-termStrict performing
Chen LueCash compensatioDuring the reporting period, theMarch 19,2015Long-termStrict performin
nproject which Sino Great Wall is involved in is the decoration engineering construction project of Libo Grand Hotel (hereinafter referred to as “Libo project”) which the company contracted before the bidding process. Sino Great Wall is not involved in any other projects except for Libo project before bidding process. As to the violating issues existed in the Libo project, I promise as follows: if Sino Great Wall got penalized by governmentg
administration departments or suffered any economic loss resulted from it, I will compensate the company by cash; Meanwhile, I, within lawful authority, will also promise to urge the company to undertake related construction projects legally so as to avoid violating issues happened before implementation of bidding process, i.e., at the time for construction again.
Chen LueCash compensation“1. Up to October 13th,2014, the related expenses ofMarch 19, 2015Long-termIt has been fulfilled (on May 21, 2018, Chen Lue paid
the litigation and arbitration cases, including the actual price, compensation, penalty, ligation costs, etc. which the parent-subsidiary companies of Sino Great Wall needs to pay caused by the final results of ligation and arbitration cases, exceed the amount of liabilities which recognized in the “Audit Report” made for Sino Great Wall by Ruihua CPA (Special Ordinary Partnership) on the basis of the audit base day of July 31st,the company a payment of RMB 5,601,460.21 for the difference between the lawsuit and arbitration of parent company and subsidiary of Sino Great Wall Co., Ltd.. For details information, please refer to the Announcement on the Payment of Cash by the Controlling Shareholder and the Actual Controller to the Company to Fulfill the Commitment published by the company on the website of Juchao Information (cninfo.com.cn ) on May 22, 2018.)
2014, I promise to bear the balance by cash unconditionally so as to guarantee the parent-subsidiaries of Sino Great Wall won’t suffer any loss. 2. This commitment letter is irrevocable.
Chen LueCash compensation1. On condition that ownership defect exists in the lease of house property of parent-subsidiary companies of Sino Great Wall and its subsidiary corporation, which resulted in inability for parent-subsidiary companies of Sino Great Wall and its subsidiaryMarch 19,2015Long-termStrict performing
Chen LueCash compensation“In condition that parent-subsidiary companies of Sino Great Wall or its son subsidiary haven’t paid social security or housing fund for staff according to law, which resulted in any losses to Sino Great Wall , including the competent authorities’ requirement for Sino Great Wall or its subsidiary to make supplementary payment, to be punished and resourced, I will bear by full-amount cash for the fee of supplemental paymentMarch 19, 2015Long-termStrict performing
and the expense and fee for being punished or resourced, which is to guarantee Sino Great Wall and its subsidiary to avoid suffering from any loss ”.
Chen LueCash compensation“At present, Suzhou Lvbang has possessed one state-own land use right, of which the land certificate is Suzhou Guo Yong(2014) No.Y2014086”, locates in Danan Village, Dadian Town, Yongqiao District, Suzhou City with 32,966 square meters of area and the purpose for industry. SuzhouMarch 19,2015Long-termStrict performing
ownership, which shall be my responsibility to carry out solution, and I undertake to compensate by cash for Suzhou Lvbang’s losses which are due to this matter, guaranteeing no losses occur to Sino Great Wall and Suzhou Lvbang for this matter.
Chen LueCash compensation“According to the “Agreement of Significant Asset Replacement and Issue of Share to Buy Asset”(hereinafter referred to as “Agreement”) signed among Victor Onward Holdings,March 19, 2015Long-termStrict performing
Holdings according to the“ Agreement”, I will compensate by cash for the Victor Onward Company within 5 working day in advance. Meanwhile, I will reserve the resource rights for Union Group and the specified third party “.
Chen Lue, He FeiyanPerformance commitmentAccording to“ Agreement of Shenzhen Victor Onward Textile Industrial Co., Ltd., Chen Lue and He Feiyan Concerning on Performance Compensation” and its supplementalMay 11,2015Long-termCompleted
ce Compensation Agreement” and its supplemental agreement
Chen Lue; He FeiyanIndependent competition1. This reorganization is planned to place in asset. At present, complete separation has existed between me or other enterprises under my possession (if any) and the listed company in staff, asset, finance, institution and business of Sino Great Wall. Independence exists in both staff, asset, finance, institution and business and no confusion exists. 2. I undertake,September 30,2015Long-termStrict performing
the fair operation according to the principle of market culture and the fair price, and fulfill the transaction procedures and the obligation of disclosing information according to relevant laws and regulations and normative document.
Chen Lue; He FeiyaRelated transactions“1.Before this reorganization, the fairness and reasonableness of pricing and the legitimacy and effectiveness of decision-making procedure exist in the transaction(if any) between me or theMarch 19, 2015Long termStrict perfo rming
the related transaction to illegally transfer the capital and profit of listed company, and not to utilize this transaction to engage in any behaviors which will cause any losses to listed company or other shareholder’s legitimate rights. Once I violate the above promises and cause losses to the listed company, I will compensate the listed company for the losses caused by the this matter.
Union Development Group Co., Ltd.Income disposalDuring the assets reorganization, the houseMarch 19,2015Long-termFully completed (On March 29, 2018, the
property and land without property certificate in the disposed assets within the plant area of Kuixin Community of Kuichong Street of Longgang District and the expected compensations, as well as the expected compensations concerning to the regaining of plots planned as schools within the right of land use of Nanyou Industrial Park of Nanshan District have not been recorded in the assessment. Therefore, Union Groupcompany received an economic compensation of RMB 100 million from Shenzhen Union Development Investment Co., Ltd., and promised to complete the performance.)
buildings at built-up area are within the plan of removal and collection of government,hereinafter referred as “undocumented property) still belongs to Victor Onward Holdings. And the benefits and risks of the real estate without certificate are enjoyed and assumed by Victor Onward Holdings.”
Union Development Group Co., LtdCash compensationAccording to the Term 5.5.3 of Agreement on Major Asset Replacement and Asset Purchase Through Issuing Shares (hereinafter referred to asMarch 19,2015Long-termCompleted the implementation (On March 29, 2018, the company received an economic compensation of RMB 100 million from Shenzhen Union
Agreement) signed on October 13, 2014 by the company and all shareholders of Victor Onward Co. Ltd.. and Sino Great Wall, Victor Onward Holdings should obtain the letter of approval concerning the transferred debts of the disposed assets from the creditor (including the guarantee, similarly hereinafter) before the date of assets delivery. In the situation of debts on Victor Onward Holdings due to the absence of creditor’s consent, the company orDevelopment Investment Co., Ltd., and promised to complete the performance.)
debts, payment obligations and penalties, the company or the third party appointed by the company will fully compensate for the losses of Victor Onward Holdings due to the above-mentioned matters based on the Agreement in cash.
Commitments make in initial public offering or re-financingNoNoNoNoNo
Equity incentive commitmentNoNoNoNo
Other commitments for medium and small shareholdersNoNoNoNo
Completed on time(Y/N)Yes
If the commitments are not fulfilled on time, shall explain the specify reason and the next work planNil

2.The existence of the company's assets or projects earnings forecasts and earnings reporting period is stillin the forecast period, the company has assets or projects meet the original profit forecast made and thereasons explained

□Applicable √ Not applicable

IV. Particulars about the non-operating occupation of funds by the controlling shareholder

□ Applicable √ Not applicableNo non-operating occupation from controlling shareholders and its related party in the period.

V. Explanation of the Supervisory Committee and Independent Directors (If applicable)onthe Qualified Auditor’s Report Issued by the CPAs.

√ Applicable □ Not applicableReanda Certified Public Accountants (LLP) audited the financial report of Sino Great Wall Co., Ltd. (hereinafter referred to as "theCompany") for 2018 and issued an Audit Report, (LADS Zi [2019] No 2333), which was unable to provide opinions. The board ofdirectors, board of supervisors and independent directors of the company issued the following relevant explanations:

1. Special Notes of the Board of Directors on Matters Involving Non-standard Audit Opinions in 2018 Financial ReportThe board of directors believes that "matters that lead to the inability to express opinions" fully reveal the risks faced by the companyand objectively reflect the actual situation and financial situation of the company. The board of directors of the company agrees to theaudit report issued by Reanda Certified Public Accountants (Special General Partnership) for the 2018 financial report of thecompany that cannot express opinions. The Board of Directors of the Company will take effective measures to eliminate the aboverisk factors as far as possible.2. The opinions of the Board of Supervisors on the special statement of the Board of Directors on matters concerning thenon-standard audit opinion in the 2018 financial reportIn the opinion of the Board of Supervisors: Reanda Certified Public Accountants (Special General Partnership) has issued adisclaimer audit report on the Company's 2018 financial report based on professional judgment. We respect the professional opinionsof the accountants and agree with the special statement of the Board of Directors on the matters covered in the disclaimer audit report.The Board of Supervisors will actively cooperate with the Board of Directors, keep an eye on the development of the relevant workof the Board of Directors and the management continuously, and earnestly safeguard the legitimate rights and interests of theCompany and all shareholders. Meanwhile, the Board of Supervisors hopes that the Board of Directors and the management will takeeffective measures to eliminate the contents mentioned in the audit report that lead to the inability to express opinions as soon aspossible, so as to effectively safeguard the interests of the majority of investors.3. Independent opinions of the independent directors on matters concerning the non-standard audit opinion in the 2018 financialreportAfter the relevant information consulted and communicating with the audit institution and relevant personnel, as an independentdirector of the Company, we consider that the disclaimer audit report on the 2018 financial report of the Company issued by ReandaCertified Public Accountants (LLP) is based on professional judgement, and we respect the professional opinions of the accountantsand agree with the special statement of the Board of Directors on the matters covered in the disclaimer audit report. The measurestaken or to be taken by the Board of Directors are conducive to eliminating the matters concerning this disclaimer audit report ofopinion and their impacts. We will urge the Board of Directors and the management of the Company to pay continuous attention tothis matter and earnestly safeguard the rights and interests of the Company and all shareholders.

VI. Explain change of the accounting policy, accounting estimate and measurement methodsas compared with the financial reporting of last year.

√Applicable □Not applicableThe format of financial statements of general enterprises has been revised in accordance with the provisions of Notice on Revisionand Issue of 2018 Format of Financial Statements for General Enterprises (CK [2018] No.15) issued by the Ministry of Finance.

VII. Explain retrospective restatement due to correction of significant accounting errors inthe reporting period

□Applicable √ Not applicableNo major accounting errors within reporting period that needs retrospective restatement for the Company in the period.

VIII. Explain change of the consolidation scope as compared with the financial reporting oflast year.

√Applicable □Not applicableDuring the reporting period, the changes in the scope of consolidated statements are detailed in the notes to the financial reports.

IX. Engagement/Disengagement of CPAs

CPAs currently engaged

Name of the domestic CPAsReanda Certified Public Accountants LLP
Remuneration for domestic accounting firm (Ten thousand yuan)260
Continuous life of auditing service for domestic accounting firm1
Name of domestic CPAWang Xinyu, Zhou Zhonghua
Continuous life of auditing service for domestic accounting firm1

Has the CPAs been changed in the current period√ Yes □NoWhether change the appointment of account firm during the auditing period or not□ Yes √NoWhether perform approval procedures when change the appointment of account firm or not√ Yes □NoA detailed explanation of the change of employment and accounting firmDue to the arrangement of project personnel of Shu Lun Pan CPAs (Special General Partnership) and other reasons, its 2018 annualaudit work time cannot match the company's plan; Meanwhile, considering that it has provided auditing services for the company formany years, in order to ensure the independence and objectivity of the company's audit work, the fourth meeting of the company'seighth board of directors and the first extraordinary general meeting of shareholders in 2019 deliberated and passed the Proposal onReplacement of Accounting Firm, it was agreed to employ Reanda Public Certified Accountants (special general partnership) as thecompany's 2018 annual financial report and internal control auditing body for a period of one year. For details, please refer to thecompany's announcements 2019-007,2019-010 and 2019-016 published on Cninf on January 29, 2019 and February 14, 2019.CPAs firm for the internal control audit√applicable □ Not applicableIn the current year, the company engaged Reanda Certified Public Accountants LLP as the internal control audit accounting firm,during the period, the company totally pays RMB 600,000 for the internal control audit expenses.

X. Situation of Facing Listing Suspension and Listing Termination after the Disclosure of theYearly Report

□Applicable √ Not applicable

XI. Bankruptcy reorganization

□Applicable √ Not applicableNo bankruptcy reorganization for the Company in reporting period.

XII. Significant lawsuits and arbitrations of the Company

√ Applicable □Not applicable

General informationInvolved amount (Ten thousand yuan)ProvisionProgressDecisions and effectsExecution of decisionsDisclosure dateIndex to disclosed information
Loan Contract Dispute Case with Shenzhen Guodingsheng Trading Co., Ltd.12,811.63NoSecond instance judgment is given and case is closedFirst-instance judgment: Defendant I shall repay the principal of 88,082,007.52 yuan and overdue interest of 1,377,936.36 yuan; Defendants II, III and IV shall be jointly and severally liable; Defendant V shall assume the pledge guarantee responsibility and other claims are rejected. The second instance judgment was as follows: The appeal wasThe Guangdong Shenzhen Intermediate People's Court issued (2019) Y03Z701 enforcement verdict, with a mandatory enforcement of 88,941,110.88 yuan.August 31,2018On August 31, 2018, it was disclosed in the 2018 Semi-annual Report on Cninf; On September 2018, Announcement on the Company, Its Wholly-owned Subsidiaries and Controlling Shareholders Receiving <Notice of Enforceme
rejected and the original verdict was upheld.nt> and < Property Report Order>; On October 23, 2018, Announcement on Reply to Inquiry Letter on Semi-annual Report of Shenzhen Stock Exchange(Announcement No.:2018-125); On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019);Announcement on the Progress of Major Litigation and Arbitration Matters on
April 19, 2019 (Announcement No.: 2019-036)
Financial loan contract dispute case of Zhuhai Branch of Xiamen International Bank Co., Ltd.4,997.22NoThe first-instance verdict was closed and an appeal was filed.August 31,2018On August 31, 2018, it was disclosed in the 2018 Semi-annual Report on Cninf; On September 2018, Announcement on the Company, Its Wholly-owned Subsidiaries and Controlling Shareholders Receiving <Notice of Enforcement> and < Property Report Order>; On October 23, 2018, Announcement on Reply to Inquiry Letter on Semi-annual Report
of Shenzhen Stock Exchange(Announcement No.:2018-125); On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019)
Loan contract dispute case with Li Qiaoli16,192.92NoThe judgment is given and the case is closed.Under enforcement On February 2, 2019, Shenzhen Intermediate People's Court issued (2019) Y03Z65 enforcement verdict, with a mandatory enforcement of 177.,194128 million yuanAugust 31,2018On August 31, 2018, it was disclosed in the 2018 Semi-annual Report on Cninf; On September 2018, Announcement on the Company, Its Wholly-owned Subsidiaries and Controlling Shareholde
rs Receiving <Notice of Enforcement> and < Property Report Order>; On October 23, 2018, Announcement on Reply to Inquiry Letter on Semi-annual Report of Shenzhen Stock Exchange(Announcement No.:2018-125); On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019)
Loan contract dispute case of Shenzhen Brach of Bank of Ningbo9,523.09NoWaiting for the judgment of first instance.August 31,2018On August 31, 2018, it was disclosed in the 2018
Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019)
Loan contract dispute case of Industrial Bank (China) Shenzhen Houhai Sub-branch29,137.97NoThe judgment is given and the case is closed.Shenzhen Intermediate People's Court issued (2018) Y03Z2798, with a mandatory enforcement of 293,399,781 yuan.August 31,2018On August 31, 2018, it was disclosed in the 2018 Semi-annual Report on Cninf; On September 2018, Announcement on the Company, Its Wholly-owned Subsidiaries and Controlling Shareholders Receiving <Notice of Enforcement> and < Property Report Order>; On October 23, 2018,
Announcement on Reply to Inquiry Letter on Semi-annual Report of Shenzhen Stock Exchange(Announcement No.:2018-125); On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019); Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036)
Enforcement case11,711.49NoTheUnderSeptemberOn
of Shaanxi International Trust Co., Ltd(2018) XZZF Zi No. 140 execution certificate issued by Xi'an Notary Office has become legally effective, and Shaanxi International Trust Co., Ltd. applied to Beijing Second Intermediate People's Court for compulsory executionenforcement14,2018September 2018, Announcement on the Company, Its Wholly-owned Subsidiaries and Controlling Shareholders Receiving <Notice of Enforcement> and < Property Report Order>; On October 23, 2018, Announcement on Reply to Inquiry Letter on Semi-annual Report of Shenzhen Stock Exchange(Announcement No.:2018-125); On February 20, 2019, Announcement on Reply to Shenzhen
Stock Exchange's Letter of Concern(Announcement No.::2019-019); Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036)
Enforcement case of CCB International Asset Management (Shanghai) Co., Ltd21,111.82NoThe Notice of Enforcement from Beijing Third Intermediate People's Court on the Case of Notarization of Creditor's Rights Documents between the Company and CCBConsumption restriction orderUnder enforcementSeptember 18,2018On September 2018, Announcement on the Company, Its Wholly-owned Subsidiaries and Controlling Shareholders Receiving <Notice of Enforcement> and < Property Report Order>; On
International Asset Management (Shanghai) Co., Ltd. is receivedFebruary 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019)
Loan dispute case with Chen Jiang4,980NoThe case is closed through mediation1. Confirm the outstanding loan principal of 49.8 million yuan and interest. 2. Pay interest of 5,342,800 yuan before July 25, 2018. 3. Pay interest of 15 million yuan before July 31, 2018. 4. Pay principal of 34.8 million yuan before September 30, 2018. 5. The lawsuit fee of 290,800 yuan and preservation fee of 5000 yuan shall be borne by Sino Stock Company. Pay off before July 31, 2018. 6. OtherUnder enforcementSeptember 18,2018On September 2018, Announcement on the Company, Its Wholly-owned Subsidiaries and Controlling Shareholders Receiving <Notice of Enforcement> and < Property Report Order>; On October 23, 2018, Announcement on Reply to Inquiry Letter on Semi-annu
defendants shall pay off jointly and severally. 7. Chen Jiang shall apply for unsealing within 3 days after the aforesaid payment is completed. 8. Failure to pay the aforesaid amount may be subject to enforcement. 9. Chen Jiang has the priority of compensation for the pledgeal Report of Shenzhen Stock Exchange; Announcement on Enforcement of Company Shares Held by Directors and Senior Executives on January 5, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019)
Contract dispute case with Gome Cinda Factoring Co., Ltd.4,285.52NoThe first-instance verdict was closed and an appeal was filed.October 23,2018On October 23, 2018, Announcement on Reply to Inquiry Letter on Semi-annual Report of Shenzhen Stock
Exchange; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019); Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036)
Financial loan contract dispute case with Bohai International Trust Co., Ltd.36,492.18NoWaiting for the judgment of first instance.September 15,2018Announcement on Partial Debt Overdue on September 15, 2018; Announcement on Receiving Civil Complaint on October 9, 2018;
On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019)
Financial loan contract dispute case with China Industrial International Trust Limited10,245.74NoThe first-instance verdict was closedSeptember 15,2018Announcement on Partial Debt Overdue on September 15, 2018; Announcement on Receiving Civil Complaint on October 13, 2018;On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019);
Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036)
Financial loan contract dispute case with China Industrial International Trust Limited10,113.78NoThe first-instance verdict was closedSino Great Wall shall repay the loan principal of 100 million yuan, the interest calculated according to the interest rate agreed in the contract from June 30, 2018 to August 7, 2018, the overdue interest (default interest) calculated according to the interest rate agreed in the contract from August 8 in 2018 to the actual repayment date, and the compound interest calculatedSeptember 15,2018Announcement on Partial Debt Overdue on September 15, 2018; Announcement on Receiving Civil Complaint on October 13, 2018;On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019)
fee is 547,488.89 yuan, of which 5050 yuan shall be borne by China Industrial International, and 542,438.89 yuan shall be borne jointly by Sino Great Wall, Chen Lue and He Feiyan. The case preservation fee of 5,000 yuan shall be shared by Sino Great Wall, Chen Lue and He Feiyan.
Bill dispute case with Jiaozuo Junpeng Coal Co., Ltd.305NoThe judgment is given and the case is closed.The plaintiff has not yet applied for enforcement for failure to performOctober 13,2018Announcement on Receiving Civil Complaint on October 13, 2018;On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019)
Bill dispute case with Tongchuan New District Hengxin Building Material Co., Ltd.456NoThe judgment is given and the case is closed.The plaintiff has not yet applied for enforcement for failure to performOctober 13,2018Announcement on Receiving Civil Complaint on October 13, 2018;On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019)
Bill dispute case with Xian Bihui Road & Bridge Engineering Co., Ltd.507NoThe judgment is given and the case is closed.The plaintiff has not yet applied for enforcement for failure to performOctober 13,2018Announcement on Receiving Civil Complaint on October 13, 2018;On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019)
Financial loan contract dispute case with Datong Securities Co., Ltd.13,801.32NoThe judgment is given and the case is closed.September 14,2018Announcement on Early Termination of Collective Funds Trust Plan for Trust Loan on September 14, 2018;Announcement on Partial Debt Overdue on September 15, 2018; Announcement on Receiving Civil Complaint on October 18, 2018(Announcement No.:2018-120);On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019);
Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036)
Financial loan contract dispute case of Ping An International Financial Leasing Co., Ltd.2,905.1NoWaiting for a court decision.October 24,2018Announcement on Receiving Civil Complaint on October 24, 2018;Announcement on Receiving Notice of Early Maturity of Debt on October 26, 2018; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-
019)
Private loan dispute case with Gong Lihong3,143.18NoThe first-instance verdict was closed and the company has appealedOctober 24,2018Announcement on Receiving Civil Complaint on October 24, 2018;On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019) ; Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036)
Right of recourse dispute case with Shenzhen Yi'an Factoring Co., Ltd.301.89NoWaiting for the judgment of first instanceOctober 24,2018Announcement on Receiving Civil Complaint on October 24, 2018;
On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019); Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036)
Loan contract dispute case with Zhongjiang International Trust Co., Ltd.32,738.68NoWaiting for the judgment of first instanceSeptember 29,2018Announcement on Receiving Notice of Early Maturity of Debt on September 29, 2018 ;Announcement on Receiving Civil Complaint
on November 10, 2018;On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019)
Loan dispute case with China Railway Trust Co., Ltd.2,140.87NoThe enforcement verdict has been received.In commissionFebruary 13,2019Announcement on Receiving <Civil Complaint> and <Notice of Advance Mediation> on February 13, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-
019)
Financial loan contract dispute case with Shenzhen Branch of Shanghai Pudong Development Co., Ltd.7,017.76NoNo trial has yet been held.February 13,2019Announcement on Receiving <Civil Complaint> and <Notice of Advance Mediation> on February 13, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019)
Financial loan contract dispute case of Shenzhen Branch of China Minsheng Bank10,164.09NoMediation stage before litigation.February 13,2019Announcement on Receiving <Civil Complaint> and <Notice of Advance Mediation> on February 13, 2019; On February 20, 2019, Announce
ment on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019)
Enforcement case with Beijing Zhongguancun Sci-tech Financing Guaranty Co., Ltd.736.1NoEnforcement.In commissionFebruary 13,2019Announcement on Receiving <Civil Complaint> and <Notice of Advance Mediation> on February 13, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019)
Sales contract dispute case with Jieyang Fangyuan Stone Co., Ltd.489.33NoNo trial has yet been held.February 13,2019Announcement on Receiving <Civil Complaint> and
<Notice of Advance Mediation> on February 13, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019)
Installation contract dispute case with lvmeiyi Environmental Construction Group Co., Ltd.1,412.36NoNo trial has yet been held.February 13,2019Announcement on Receiving <Civil Complaint> and <Notice of Advance Mediation> on February 13, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(A
nnouncement No.::2019-019)
Contract of hired work dispute case with Shanghai Disheng Wood Co., Ltd.219.97NoWaiting for the judgment of first instanceFebruary 13,2019Announcement on Receiving <Civil Complaint> and <Notice of Advance Mediation> on February 13, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019); Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.:
2019-036)
Loan dispute case with Henan No.1 Thermal Power Construction Co., Ltd.4,717.75NoThe first-instance verdict was closed and the company has appealedFebruary 19,2019Announcement on Receiving <Civil Complaint>, <Arbitration Notice> and <Notice of Enforcement> on February 19, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019) ; Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036)
Contract dispute case with Gome Cinda Factoring Co., Ltd.4,163.7NoMediation has been reached, waiting for the court to deliver the mediation documentFebruary 19,2019Announcement on Receiving <Civil Complaint>, <Arbitration Notice> and <Notice of Enforcement> on February 19, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019)
Loan contract dispute case with Li Shaoxiong5,860.92NoAwaiting judgment2 February 19,2019Announcement on Receiving <Civil Complaint>, <Arbitration Notice> and <Notice of Enforcement> on February 19, 2019; On
February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019)
Enforcement case with Bairui Trust Co., Ltd.30,736.58NoThe enforcement verdict has been received.In commissionFebruary 19,2019Announcement on Receiving <Civil Complaint>, <Arbitration Notice> and <Notice of Enforcement> on February 19, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concer(Announcement No.::2019-019)
Dispute case over Lease Agreement of construction equipment with Zhejiang Huatie Construction Support Technology Co., Ltd.979.05NoIn the trial of first instanceFebruary 19,2019Announcement on Receiving <Civil Complaint>, <Arbitration Notice> and <Notice of Enforcement> on February 19, 2019; On February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019)
Construction contract dispute case with Wang Kaixiang304.41NoWaiting for the judgment of first instanceFebruary 19,2019Announcement on Receiving <Civil Complaint>, <Arbitration Notice> and <Notice of Enforcement> on February 19, 2019; On
February 20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern(Announcement No.::2019-019); Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036)
Labor subcontract dispute case with Hunan Zhongjian Construction Labor Co., Ltd.251.57NoAn award is issued upon arbitration and the case is closed.February 19,2019Announcement on Receiving <Civil Complaint>, <Arbitration Notice> and <Notice of Enforcement> on February 19, 2019; On February
20, 2019, Announcement on Reply to Shenzhen Stock Exchange's Letter of Concern (Announcement No.::2019-019); Announcement on the Progress of Major Litigation and Arbitration Matters on April 19, 2019 (Announcement No.: 2019-036)
Loan contract dispute case with Beijing Tellhow Intelligent Engineering Co., Ltd.3,017.5No。Currently, the company has repaid the loan, and the plaintiff withdrew and closed the case.August 31,2018On August 31, 2018, it was disclosed in the 2018 Semi-annual Report on Cninf; On September 14, 2018, the Announcement on the Company, Its
wholly-owned Subsidiaries and Controlling Shareholders Receiving the Notice of Enforcement and the Property Report Order; On October 23, 2018, Announcement on Reply to Inquiry Letter on Semi-annual Report of Shenzhen Stock Exchange(Announcement No.:2018-125)
Contract dispute case for construction project with Anhui Tiangan Construction Co., Ltd.59.85NoNolle prosequi and case closedCurrrently, the payment has been completed and the case has been closed.September 14,2018On September 14, 2018, the Announcement on the Company, Its wholly-owned Subsidiarie
s and Controlling Shareholders Receiving the Notice of Enforcement and the Property Report Order; On October 23, 2018, Announcement on Reply to Inquiry Letter on Semi-annual Report of Shenzhen Stock Exchange(Announcement No.:2018-125)
Right to recourse dispute case with China Arts Century Construction & Decoration Design (Beijing) Co., Ltd.43.8NoNolle prosequi and case closedThe plaintiff withdrew the lawsuit and closed the case.August 24,2018Announcement on Receiving Civil Complaint on October 24, 2018
Financial loan contract case with SPD Bank .Beijing Branch7,977.89NoNo trial has yet been held.March 1, 2019Announcement on Receiving <Civil Complaint> on March
1, 2019
Financial loan contract case with Shanghai Bank .Beijing Branch27,411.99NoNo trial has yet been held.March 1, 2019Announcement on Receiving <Civil Complaint> on March 1, 2019
Financial loan contract case with Bank of China.Shenzhen Futian7,934.39NoNo trial has yet been held.March 1, 2019Announcement on Receiving <Civil Complaint> on March 1, 2019
Financial loan contract case with Hengfeng Bank .Fuzhou Branch10,024.5NoThe case is closed through mediationApril 8,2019Announcement on Receiving <Civil Complaint> and <Application for Arbitration> on April 8, 2019
Financial loan contract case with SPD Bank Beijing Branch3,965NoThe case is closed through mediationApril 8,2019Announcement on Receiving <Civil Complaint> and <Application for Arbitration> on April 8, 2019
Financial loan contract case with Hunan Jinjude Construction Investment Co., Ltd.502NoIn the first instance trialApril 8,2019Announcement on Receiving <Civil Complaint> and
<Application for Arbitration> on April 8, 2019
Dispute case over decoration and renovation contract with Xu Zhigui104.07NoIn the first instance trialApril 8,2019Announcement on Receiving <Civil Complaint> and <Application for Arbitration> on April 8, 2019
Financial loan contract case with Jiujiang Bank .Guangzhou Haizhu Branch10,223.39NoThe case is closed through mediationApril 8,2019Announcement on Receiving <Civil Complaint> and <Application for Arbitration> on April 8, 2019
Financial loan contract case with Baoshang Bank.Shenzhen Branch20,451.46NoThe case is closed through mediationApril 13, 2019Announcement on Receiving <Civil Complaint> plication > on April 13, 2019
Other small litigations4,411.59NoOctober 23,2018On February 20, 2019, Announcement on Reply to Shenzhen

XIII. Situation of Punishment and Rectification

√ Applicable □Not applicable

StockExchange'sLetter ofConcer;OnAugust 31,2018, itwasdisclosedin the 2018Semi-annual Reporton Cninfby 34.4954millionyuan; OnFebruary20, 2019,Announcement onReply toShenzhenStockExchange'sLetter ofConcern(AnnouncementNo.::2019-019)Name

NameTypeReasonsType of PunishmentConclusion (if any)Disclosure dateDisclosure index
Sino Great Wall Co., LtdThe companyAs the company is suspected of violating laws and regulations in information disclosure, according to the relevantAn investigation is filed or an administrative punishment is imposed by the China Securities RegulatoryAs of the disclosure date of this announcement, the company has not yet received the China SecuritiesOctober 19,2018(www.cninfo.com.cn)(Announcement No.:2018-121)
provisions of the Securities Law of the People's Republic of China, the CSRC has decided to initiate an investigation in the company.CommissionRegulatory Commission's concluding comments or decisions on relevant investigation matters.
Sino Great Wall Co., LtdThe companyThe Shenzhen Supervision Bureau of China Securities Regulatory Commission will conduct on-site inspections of the company from May 2018 onwardsBe investigated by a competent authorityDecision on Administrative Supervision Measures of Shenzhen Supervision Bureau of China Securities Regulatory Commission ([2019] No.11)March 7,2019(www.cninfo.com.cn)(Announcement No.:2019-022)
Chen Lue, Tian Wei, Tang Xianyong, Cui Hongli and Yang ChunlingSenior executivesThe Shenzhen Supervision Bureau of China Securities Regulatory Commission will conduct on-site inspections of the company from May 2018 onwardsBe investigated by a competent authorityDecision on Administrative Supervision Measures of Shenzhen Supervision Bureau of China Securities Regulatory Commission [2019] No.12 [2019]No.13 [2019]No.14 [2019]No.15 and [2019]No.16March 7,2019(www.cninfo.com.cn)(Announcement No.:2019-022)
Chen LueDirectorThe Shenzhen SupervisionBe investigated by a competentDecision on AdministrativeMarch 7,2019(www.cninfo.com.cn)
Bureau of China Securities Regulatory Commission will conduct on-site inspections of the company from May 2018 onwardsauthoritySupervision Measures of Shenzhen Supervision Bureau of China Securities Regulatory Commission ([2019] No.12)(Announcement No.:2019-022)

Explanation on Rectification√Applicable □Not applicableOn October 18, 2018, the company received the notice of investigation issued by the China Securities Regulatory Commission (No:

JDC Zi No. 18041). As the company is suspected of violating laws and regulations in information disclosure, according to therelevant provisions of the Securities Law of the People's Republic of China, the CSRC has decided to initiate an investigation in thecompany. On March 6, 2019, the company received the Shenzhen Securities Regulatory Bureau's Decision on AdministrativeSupervision Measures (No 2019] 11, No. [2019] 12 , No. [2019] 13 ,No. [2019] 14 , No. [2019] 15, and No. [2019] 16) showing thatthe Shenzhen Securities Regulatory Bureau had carried out on-site inspection of the company since May 2018, and the ShenzhenSecurities Regulatory Bureau had filed a case for investigation on the illegal disclosure of relevant information found in theinspection; In addition, through inspection, it is also found that the company had the following problems "I. The income costaccounting is not standardized, and expenses are charged through out-of-account fund accounts; II. It did not disclose the changes inmajor items in a timely manner, the preparation of performance forecasts and performance report is not prudent; III. It has capitalexchanges of no real business foundation with a number of companies, and illegal foreign financial assistance; IV. The relevantmanagement system for raising funds is not perfect; V. Registration management for information insider is not standardized". TheShenzhen Securities Regulatory Bureau decided to take corrective measures against the company, the company's relevant directors,senior management personnel, and issue warning letters to Mr. Chen Lue, Mr. Tian Wei, Mr. Tang Xianyong, Ms. Cui Hongli, Ms.Yang Chunling (see 2018-121, 2019-022,2019-033) In response to the relevant problems found during the inspection against thecompany, the company has made serious rectification in accordance with the matters involved in the Decision on Taking CorrectiveMeasures against Sino Great Wall Co., Ltd. ([2019] No.11). In addition to the above matters, Shenzhen Securities Regulatory Bureaurequires the company to employ a third party independent agency to conduct special inspections on the problems of NPP-0057 inXingang, Qatar, Cambodia Refinery and NAGA Casino Phase II project in Cambodia.As of the disclosure date of this announcement, the company has not yet received the China Securities Regulatory Commission'sconcluding comments or decisions on relevant investigation matters.

XIV. Credit Condition of the Company and its Controlling Shareholders and ActualControllers

√Applicable □Not applicable(I) The integrity of the company and its subsidiaries1. The company and its wholly-owned subsidiary Sino International Engineering Co., Ltd. were incorporated into the list ofdefaulters due to breach by the Beijing Second Intermediate People's Court due to the dispute with Shaanxi International TrustCompany Limited over financial loan contract. Currently, the case is in enforcement.2. Due to a dispute with CCB International Asset Management (Shanghai) Co., Ltd over financial loan contract, the company and its

wholly-owned subsidiary Sino International Engineering Co., Ltd. were incorporated into the list of defaulters by the Beijing ThirdIntermediate People's Court. Currently, the case is in enforcement.3. The company was incorporated into the list of defaulters by Beijing Third Intermediate People's Court due to the dispute withBairui Trust Co., Ltd. over financial loan contract. Currently, the case is in enforcement.4. Due to a dispute with China Railway Trust Co., Ltd. over financial loan contract, the company and its wholly-owned subsidiarySino International Engineering Co., Ltd. were incorporated into the list of defaulters by the Chengdu Intermediate People's Court.Currently, the case is in enforcement.5. The company and its wholly-owned subsidiary Sino International Engineering Co., Ltd. were incorporated into the list by theHaidian District People's Court of Beijing for notarizing the enforcement of creditor's rights documents with Beijing ZhongguancunSci-tech Financing Guaranty Co., Ltd. Currently, the case is under trial.6. Sino Great Wall International Engineering Co., Ltd., a subsidiary of the company, was incorporated into the list of defaulters byTangshan Intermediate People's Court for the dispute over the liability of victims of labor service providers with Cao Zhenrong.Currently, the case is in enforcement.7. Sino Great Wall International Engineering Co., Ltd., a subsidiary of the company, was incorporated into the list of defaulters by theTongzhou District People's Court of Beijing for its labor arbitration with Zhang Jie. Currently, the case is in enforcement.For details of the above cases, please refer to the company's announcements 2018-107, 2018-125, 2018-109, 2019-018, 2019-019,2019-015 published on Cninf (www.cninfo.com.cn) on September 14, 2018, October 23, 2018, September 18, 2018, February 19,2019, February 20, 2019(II) Integrity of controlling shareholders and actual controllers1. Chen Lue, the controlling shareholder and actual controller of the company, has been incorporated into the list of defaulters, due tohis failure to perform the obligations specified in the effective legal documents, including:

1) In the dispute between the company and Shanxi International Trust Co., Ltd. over financial loan contract, Chen Lue, as theguarantor and counter-guarantor, assumed joint and several guarantee liability for the above debts and was incorporated into the listof defaulters by the Beijing Second Intermediate People's Court. Currently, the case is in enforcement.2) In the dispute between the company and China Railway Trust Co., Ltd. over financial loan contract, Chen Lue, as the guarantor ofthe counter-guarantor, assumed joint guarantee liability for the debt and was incorporated into the list of defaulters by the ChengduIntermediate People's Court. Currently, the case is in enforcement.3) Chen Lue was incorporated into the list of defaulters by Tongzhou District People's Court of Beijing for a dispute over privatelending with Xia Honggan. Currently, the case is in the process of enforcement.4) In the case of notarization of creditor's rights documents between the company and Beijing Zhongguancun Sci-tech FinancingGuaranty Co., Ltd., Chen Lue, as the guarantor and counter-guarantor, assumed joint and several guarantee liabilities for the debtsand was incorporated into the list of defaulters by the Haidian District People's Court of Beijing. Currently, the case is under trial.5) In the dispute between the company and Bairui Trust Co., Ltd. over financial loan contract, Chen Lue, as the guarantor andcounter-guarantor, assumed joint guarantee liability for the debt and was incorporated into the list of defaulters by the Beijing ThirdIntermediate People's Court. Currently, the case is in enforcement.6) In the case of dispute over the financial loan contract between the Company and CCB International Asset Management (Shanghai)Co., Ltd., Chen Lue as the counter guarantor assumed a joint surety bond liability for the debt and was incorporated by Beijing ThirdIntermediate People's Court into the list of defaulters. Currently, the case is in enforcement.Regarding particulars of the preceding case, please refer to Announcement 2018-107, 2018-125, 2019-015, 2019-019, 2019-018, and2018-109 published by the Company at Cninf (www.cninfo.com.cn) on September 14, 2018, October 23, 2018, February 13, 2019,February 20, 2019, February 19, 2019 and September 18, 2018 respectively.2. The Company's holding shareholder and actual controller Chen Lue held 583,454,556 shares of the Company, accounting for 34.36%of its total capital stock. In the report period, all the shares held by Mr. Chen Lue were frozen and waited for being frozen,attributable to a property preservation caused by his assumption of personal joint guarantee for a subsidiary to carry out business

financing. For more information, please refer to Announcement on Waiting to Freeze Shares of the Holding Shareholder 2018-112,2018-124, 2018-139, 2018-143, 2018-145 ,2018-150.2018-153,2018-155,2019-017 and 2019-025 published by the Company atCninf (www.cninfo.com.cn) on September 22, 2018, October 23, 2018, November 2, 2018, November 14, 2018, November 15, 2018,November 20, 2018, November 28, 2018 ,December 22, 2018, February 6,2019 and March 27, 2019 respectively.

XV. Implementation Situation of Stock Incentive Plan of the Company, Employee StockOwnership Plan or Other Employee Incentive Measures

√Applicable □ Not applicableThe second meeting of the seventh board of directors, the second meeting of the seventh board of supervisors and the 2015 thirdextraordinary general shareholder meeting were respectively convened by the company on Nov 5, 2015 and Nov 23, 205, at whichthe Proposal on the First Phase of Employee Stock Ownership Plan (draft) of Shenzhen Victor Onward Textile Industrial Co., Ltdwas examined and approved.Please refer to the published on November 7, 2015 and November 24,2015 (www.cninfo.com.cn) on the relevant announcement.On December 24, 2015, the company as the asset trustor of the ESOP asset management plan, together with the asset manager-Xingzheng Securities Asset Management Co., Ltd. and the asset trustee- China Everbright Bank Co., Ltd. signed the contract ofNo.57 Xing Zheng Zi Guan Xin Zhong Assets Management Contract of the Collection Assets Management Plan which concretelyexplained and stipulated the information included the basic information of the collection plan, participating in and withdrawal of thecollection plan, guarantee, classification of the collection plan, the management methods and the management rights of the customerassets in the collection plan, the establishment of the collection plan, the expenses of the collection plan, the proceeds and itsdistribution of the collection plan, investment philosophy and investment strategy, investment decision-making and risk control,restrictions and prohibited behaviors of investment, information disclosure of the collection plan, transfer of the share of thecollection plan, non-transaction transfer ownership and freezing and so on.Please refer to the published on December 29, 2015 (www.cninfo.com.cn) on the relevant announcement.As of January 7, 2016, the company’s first phase of the employee stock ownership plan has completed the share-purchasing by meansof buying in the secondary security market, of which the average position price is RMB44.7578 per share, the total purchase quantityis 833,187 shares which account for 0.1864% of the company's total share capital, and the total turnover is RMB37,291,630. Thelock-up period of the shares purchased under the plan is 12 months commenced from the date of this Announcement. Please refer tothe published on January 8, 2016 (www.cninfo.com.cn) on the relevant announcement.On November 20, 2017, with the consent of more than two-thirds of the holders presented at the holders’ meeting, the “Proposalon the one-year extension of the company's first phase ESOP” was passed. On November 21, 2017, the company held thetwenty-sixth meeting of the seventh board of directors, which reviewed and adopted the “Proposal on the one-year extension of thecompany's first phase ESOP”, and according to the voting result of the holders’ meeting, the board agreed to extend the duration ofthe company's first phase ESOP by one year, meaning that the ESOP can sell shares within the afore-said extension of one year (untilNovember 23, 2018).If the shares are not sold before the expiration of the extended one year, a further meeting of the holders and themeeting of the board of directors can be convened two months before the expiration to consider the follow-up matters. Please refer tothe published on November 22, 2017 (www.cninfo.com.cn) on the relevant announcement.

On November 20, 2018, attendees of the holders' meeting with 2/3 of shares agreed and adopted the Proposal on Extending theCompany's First Staff Shareholding Plan for One Year. On November 21, 2018, the Company convened the second meeting of theeighth Board of Directors, deliberating and adopting the Proposal on Extending the Company's First Staff Shareholding Plan for OneYear. According to voting results at the holders' meeting, the Board of Directors agreed to extend the Company's first staffshareholding plan for one year, i.e., the former expiry date was extended to one year later--November 23, 2019. In the duration, once

the Company's shares held in the staff shareholding plan are sold out, the staff shareholding plan may be terminated beforehand. Ifshares are not sold upon the expiry of the extended period, a holders' meeting and meeting of Board of Directors may be convened 2months before the expiration to deliberate relevant following matters. Please refer to the published on November 22, 2018(www.cninfo.com.cn) on the relevant announcement.

XVI. Material related transactions

1. Related transactions in connection with daily operation

□Applicable √ Not applicableNil

2. Related-party transactions arising from asset acquisition or sold

□Applicable √ Not applicableNo related transactions by assets acquisition and sold for the Company in reporting period.

3. Related-party transitions with joint investments□Applicable √ Not applicableNo main related transactions of joint investment outside for the Company in reporting period.4. Credits and liabilities with related parties□Applicable √ Not applicable

Nil

5. Other significant related-party transactions

√ Applicable □Not applicable

On March 12, 2018, the company and Union Development Group Co., Ltd. and Chen Lue signed an Agreementon the Economic Compensation for the Events after the Major Asset Restructuring Period of Shenzhen VictorOnward Textile Industrial Co., Ltd. On March 17, 2018, the company and Union Development Group and Mr.Chen Lue signed a Supplementary Agreement on Agreement on the Economic Compensation for the Events afterthe Major Asset Restructuring Period of Shenzhen Victor Onward Textile Industrial Co., Ltd. On March 29, 2018,the company received RMB 100 million as the economic compensation paid by Shenzhen Union DevelopmentInvestment Co., Ltd.

Website for temporary disclosure of the connected transaction

AnnouncementDate of disclosureWebsite for disclosure
Announcement on Signing the Economic Compensation Agreement and Changes in Shareholders' Commitments and Related TransactionsMarch 20,2018http://www.cninfo.com.cn
Announcement on the Supplemental Agreement for the Signing of the Economic Compensation AgreementMarch 20,2018http://www.cninfo.com.cn

XVII. Particulars about significant contracts and their fulfillment

1. Particulars about trusteeship, contract and lease

(1) Trusteeship

□Applicable √ Not applicableNo trusteeship, contract or leasing for the Company in reporting period.

(2) Contract

□ Applicable √ Not applicableNo any contract for the Company in the reporting period.

(3) Lease

√Applicable □ Not applicableNotesDuring the reporting period, the company's leasing expenses were mainly the company’s office space and staffquarters’ capital expenditures.

The company's profit and loss has reached more than 10% of the company's total profit during the reportingperiod□ Applicable √ Not applicable

Nil

2.Guarantees

√ Applicable □ Not applicable

(1)Guarantees

Unit: 10,000 Yuan

Guarantee of the Company for the controlling subsidiaries (Exclude controlled subsidiaries)
Name of the CompanyRelevant disclosure date/No.Amount of GuaranteeDate of happening (Date of signingActual mount of guaranteeGuarantee typeGuarantee termComplete implementationGuarantee for associate
of the guaranteed amountagreement)or notd parties (Yes or no)
Guarantee of the company for its subsidiaries
Guarantee provided toAmount of guarantee and date of disclosureAmount of the guaranteeActual date of occurring (signing date of agreementsActual amount of guaranteeType of guaranteeTermCompleted or notRelated guarantee
Sino InternationalMarch 31, 201670,000January 16,201770,000The joint liability guaranty1 yearNoNo
Sino InternationalMay 20, 201712,000October 28,201612,000The joint liability guaranty1 yearNoNo
Sino InternationalMarch 31, 20167,000February 20, 20177,000The joint liability guaranty1 yearYesNo
Sino InternationalMay 20, 201712,000March 12, 201812,000The joint liability guaranty1 yearNoNo
Sino InternationalMarch 31, 201620,000April 14, 201720,000The joint liability guaranty1 yearYesNo
Sino InternationalMarch 31, 201618,000January 3, 201718,000The joint liability guaranty1 yearYesNo
Sino InternationalMay 20, 201712,000June 7, 201712,000The joint liability guaranty1 yearYesNo
Sino InternationalMarch 29, 201811,990August 22, 201811,990The joint liability guaranty1 yearNoNo
Sino InternationalMay 20, 201740,000July 25, 201740,000The joint liability guaranty1 yearNoNo
Sino InternationalMay 20, 201722,000June 30, 201722,000The joint liability guaranty1 yearNoNo
Sino InternationalMay 20, 201720,000October 18, 201720,000The joint liability guaranty1 yearNoNo
Sino InternationalMay 20, 201710,000November 22, 201710,000The joint liability guaranty1 yearNoNo
Sino InternationalMay 20, 201710,000November 30, 201710,000The joint liability guaranty1 yearNoNo
Sino InternationalMarch 31, 20168,400March 31, 20178,400The joint liability guaranty30 monthsNoNo
Sino InternationalMay 20, 20178,000February 13, 20188,000The joint liability guaranty1 yearNoNo
Sino InternationalMay 20, 201720,000December 20, 201720,000The joint liability guaranty1 yearNoNo
Wuhan Commercial Work HospitalMarch 31, 201610,889.81January 18, 201710,889.81The joint liability guaranty3 yearsNoNo
Sino Great Wall ConstructionMarch 29, 20183,500September 30, 20183,500The joint liability guaranty1 yearNoNo
报告期内审批对子公司担保额度合计(B1)1,000,000报告期内对子公司担保实际发生额合计(B2)315,780
报告期末已审批的对子公司担保额度合计(B3)1,000,000报告期末对子公司实际担保余额合计(B4)258,779.81
子公司对子公司的担保情况
担保对象名称担保额度相关公告披露日期担保额度实际发生日期实际担保金额担保类型担保期是否履行完毕是否为关联方担保
Total of Company’s guarantee(namely total of the large three aforementioned)
Total of guarantee in the Period (A1+B1+C1)1,000,000Total of actual guarantee in the Period(A2+B2+C2)315,780
Total of guarantee at Period-end(A3+B3+C3)1,000,000Total of actual guarantee at period-end (A4+B4+C4)258,779.81
The proportion of the total amount of actually guarantee in the net assets of the company(A4+B4+C4)1,100.24%
Including:
Amount of guarantee for shareholders, actual controller and its associated parties(D)0
The debts guarantee amount provided for the Guaranteed parties whose assets-liability ratio exceed 70% directly or indirectly(E)258,779.81
Amount of guarantee exceeds 50% of net capital(F)208,205.88
Total Amount(D+E+F)466,985.67
Explanations on possibly bearing joint and several liquidating responsibilities for undue guarantees (If any)Nil
Explanations on external guarantee against regulated procedures (If any)Nil

Description of the guarantee with complex method

(2)Illegal providing of external guarantees

□ Applicable √ Not applicableNo illegal providing of external guarantees in the report period.

3. Situation of Entrusting Others for Managing Spot Asset(1) Situation of Entrusted Finance

□ Applicable √ Not applicableNil

(2) Situation of Entrusted Loans

□ Applicable √ Not applicableNil

4. Other significant contract

Applicable √ Not applicableNon existence

XVIII. Social responsibility

1. Execution of social responsibility

In the report period, the Company took the initiative to fulfill the social responsibility. The Company highlighted work safety,

the safety management work of international projects and personnel in particular and kept improving its engineering constructionsafety mechanism to implement occupational health guarantee and other measures with effort, put an end to major safety accidents,and assure personal safety and health of staff; the Company kept improving its compensation and benefit system and modifying allthe labor and employment systems to create a harmonious employment relationship and provide broad development room foremployees with effort while giving a help to sick and needy employees to promote the harmonious development between employeesand society; the Company took the initiative to build a healthy and positive enterprise culture and highlighted improving the staffquality by organizing training activities in a variety of forms on demand and frequently holding badminton, table tennis, andbasketball games and staff sports meetings to enrich the spare life of employees; besides, the Company paid all the taxes and dues infull amount and carefully performed the social responsibility by law.

2. Precise poverty alleviation social responsibility(1) Targeted poverty alleviation program

There is no precise poverty alleviation carried out in the period and no follow plan either.

(2) Annual precision poverty alleviation(3) Accuracy of poverty alleviation

IndexMeasurement unitQuantity / Status
I. General situation————
II. Breakdown Input————
1. Poverty alleviation by industrial development————
2. Poverty alleviation by transfer employment————
3. Poverty alleviation by relocation————
4. Educational poverty alleviation————
5. Health poverty alleviation————
6. Ecological protection poverty alleviation————
7. Guarantee of all the details————
8. Social poverty alleviation————
9. Other projects————
III. Awards (Content and level)————

(4)Subsequent targeted poverty alleviation program3. Information on environmental protection

The Listed Company and its subsidiary whether belong to the key sewage units released from environmental protection department

NoThe Company and its subsidiaries do not belong to the key pollutant discharge units announced by the environmental protectiondepartment.

XIX. Other material events

√ Applicable □ Not applicable1. At the tenth meeting of the seventh Board of Directors and 2016 second extraordinary general meeting of shareholders held on July7, 2016 and July 25, 2016 respectively, the Company deliberated and adopted a Proposal on Private Placement of A-share Stocks ofSino Great Wall Co., Ltd. and planned to issue stocks to Sino Great Wall (Beijing) Investment Co., Ltd., Beijing Anben MedicalInvestment Holding Co., Ltd. and Mr. Zheng Jihua to raise funds of RMB 2.5 billion. On October 14, 2016, China SecuritiesRegulatory Commission accepted the Company's application for private placement of stocks. On February 16, 2017, the Companyconvened the sixteenth meeting of the seventh Board of Directors and the eleventh meeting of the seventh Board of Supervisors,deliberating and adopting the Proposal on Adjustment of the Company's Plan for Private Placement of Stocks to adjust the sum offunds raised to RMB 900 million. On March 22, 2017, the Company's application for private placement of A-share stocks wasapproved by CSRC Issue Review Committee. On July 21, 2017, the Company received a Reply to Approval of Private Placement ofStocks Given to Sino Great Wall Co., Ltd. (Zheng Jian Xu Ke [2017] No.1145) from China Securities Regulatory Commission. Dueto fluctuation in the capital market environment, the Company failed to complete matters of the private placement of stocks within 6months after getting the approval for issue from China Securities Regulatory Commission (i.e., before January 4, 2018), hence thereply of China Securities Regulatory Commission to the Company on the private placement of stocks became void and ineffectivespontaneously upon expiry (refer to the Company's Announcement 2016-052, 2016-065, 2017-009, 2017-010, and 2018-004 fordetails).2. The Company convened the twenty-eighth meeting of the seventh Board of Directors and 2018 first extraordinary general meetingof shareholders on January 19, 2018 and March 13, 2018 respectively, deliberating and adopting the Proposal on the Company'sFinancing Plan by Bond Issue and Proposal on the Company's Financing Plan by Issue of Accounts Receivable Bonds and approvingthe Company's plan to raise funds in the amount of not over RMB 2 billion by listed bonds at Beijing Financial Assets Exchange(refer to the Company's Announcement 2018-006, 007, 050 for details). The Company suspended implementing its financing plan,affected by market environment and its own current situation.3. In December 2016, the Company received a letter of acceptance from its wholly-owned subsidiary Sino International that made upa consortium with Wuchang Shipbuilding Industry Group Co., Ltd. to win the bid for "Phnom Penh Twin Tower World Trade Center(Cambodia) Construction Project" (hereinafter referred to as the Twin Tower Project) with a sum of about USD 2.7 billion or RMB17.128 billion (refer to the Company's Announcement 2016-108 for details). After receiving the letter of acceptance, the Companytook the initiative to help the owner handle financing-related work to promote further performance of the Twin Tower Project.However, financing matters concerned in the project were not put into practice, affected by lots of objective factors. Based on acomprehensive evaluation on risks for implementation and financing risks in the international project and such risk factors as whetherthe economic benefit can be as expected upon the completion of the project, the Company considered the project to have manyuncontrollable risks. To further prevent business risks and safeguard shareholders' rights and interests, the Company decided to waivethe project (refer to the Company's Announcement 2018-014).4. On January 26, 2018, Guizhou Bijie Public Resources Trading Center released an Announcement of Results of (Secondary)Construction of PPP Project of Jinsha County Hospital, according to which, Sino Great Wall Co., Ltd. (hereinafter referred to as theCompany) won the bid for the "(Secondary) Construction of PPP Project of Jinsha County Hospital" beforehand in the investmentsum of about RMB 1,438,314,400 (refer to the Company's Announcement 2018-015). Due to a high uncertainty and risk in the returnon investment on the project, the Company terminated the project.5. On February 12, 2018, the Company convened the twenty-ninth meeting of the seventh Board of Directors, deliberating and

adopting a Proposal on Acquisition of Shares of UPL Laos Co., Ltd., according to which, UPL (MALAYSIA) SDN. BHD.(hereinafter referred to as UPL Malaysia) transfered 30% of shares of UPL Laos Co., Ltd. (hereinafter referred to as UPL Laos) to theCompany by signing an Agreement of Equity Cooperation on Laos Vientiane Dongphosy Special Economic Zone Project, UPL Laosentered into a franchise agreement for 50+40 years with Laos Government by cash contribution of USD 10 million and advancepayment of USD 20 million for project construction put together as the consideration of acquisition and took full charge of matters ofdevelopment of Dongphosy as the franchisee to Dongphosy Special Economic Zone (refer to the Company's Announcement2018-020 and 021). On June 12, 2018, the Company agreed with UPL Malaysia on transfer of 10% of shares, hence the Company'sshareholding ratio rose to 40%. Whereas the Company is experiencing a financial difficulty at the moment and has failed to performduties of advance payment and construction in the equity agreement and duties in the loan agreement, the Malaysian shareholderUPL Malaysia sent a latter in request for a return of equity and filed an arbitration to Hong Kong International Arbitration Centre onthe dispute of equity in March 2019. Right now, the Company has hired an arbitrator duly in response to the suit.6. On February 23, 2018, the Company received the “Mekong River Villa Project Bid-Winning Notice” issued byOXLEYEMERALD (CAMBODIA) CO., LTD, and Sino International won the bid for the “Mekong River Villa Project” inCambodia, with the bid amount of USD 46.5 million (equivalent to RMB 295 million) (See the 2018-035 announcement of theCompany for details). As of the end of the reporting period, most of the on-site piling construction work has been completed, and therelevant civil work has been in progress. As of the disclosure date of this report, both parties have agreed to terminate the contractand the project is in the process of settlement.7. In the report period, the Company's wholly-owned subsidiary Sino International invested RMB 100 million in founding awholly-owned subsidiary--Sino Great Wall Hebei Xiong'an Engineering Co., Ltd. at Xiong'an New Area, which obtained a BusinessLicense issued by Hebei Xiong'an New Area Public Service Bureau on February 24, 2018 (refer to the Company's Announcement2018-031).8. The Company convened the thirty-first meeting of the seventh Board of Directors and 2018 second extraordinary general meetingof shareholders on March 24, 2018 and March 29, 2018 respectively, deliberating and adopting a Proposal on the Company'sEligibility for Public Offering of A-share Convertible Bonds and Proposal on the Company's Plan for Issue of Short-term FinancingBonds among other proposals concerned, according to which, the Company was approved to do public offering of A-shareconvertible bonds in a period of 6 years to raise funds in the amount of not higher than RMB 850 million; the Company wasapproved to apply for subscribing and issuing short-term financing bonds in the sum of not over RMB 600 million to NationalAssociation of Financial Market Institutional Investors, wherein the period of single issue of short-term financing bonds must not beover 1 year (refer to the Company's Announcement 2018-044, 046, 047, and 050). The Company suspended implementing thepreceding financing plan, affected by market environment and its own current situation.9. The Company convened the thirty-fourth meeting of the seventh Board of Directors and 2018 third extraordinary general meetingof shareholders on June 4, 2018 and June 22, 2018 respectively, deliberating and adopting a Proposal on the Wholly-ownedSubsidiary Issuing USD Bonds Overseas. The Company was planned to issue bonds overseas in the amount of not higher than USD300 million (including USD 300 million) and period of not longer than 5 years, wherein its new wholly-owned subsidiary Sino GreatWall Overseas Limited (subject to actual registered name, 100% of its shares attributable to Sino Hong Kong) played a major role(refer to the Company's Announcement 2018-073, 074, and 055). The Company suspended implementing the preceding financingplan, affected by market environment and its own current situation.10. The Company convened the thirty-seventh meeting of the seventh Board of Directors on September 2, 2018, planned to investand found "Yinglonghu Development Co., Ltd." (hereinafter referred to as the Project Company, whose final name is subject to thename approved in industrial and commercial registration) with Chongqing Circum-Yinglonghu Industrial Co., Ltd. (hereinafterreferred to as Party A) and 7 village committees concerned at the project location (hereinafter referred to as Party C). The registeredcapital of the Project Company was RMB 125 million, wherein Party A subscribed capital by earlier input of physical assets worthRMB 23.75 million (subject to the audited amount) in the Yinglong Project, accounting for 19% of the registered capital; Sino GreatWall contributed RMB 100 million by currency, accounting for 80% of the registered capital; Party C subscribed RMB 1.25 million

by currency or contribution in kind, accounting for 1% of the registered capital (refer to the Company's Announcement 2018-104 and105). At the moment, the Project Company has been registered and project planning and design are underway.11. The company held the sixth meeting of the eighth Board of Directors on April 12, 2019, deliberated and passed the Proposal onAdjusting the Company's Organizational Structure and agreed to adjust the operating organization and business structure of thecompany's headquarters. The company will implement a division system by sections and set up four operating organizations,including the domestic traditional construction business sector (division), infrastructure business sector (division), overseas businesssector (division), smart housing and medical care business sector (division). After this adjustment, the organizational structure of thecompany's headquarters is as follows: eight functional departments and offices, including the comprehensive office, the financedepartment and the human resources department, as well as the above-mentioned four operating institutions (see the company'sannouncement No 2019-028 for details).

XX. Significant event of subsidiary of the Company

√ Applicable □ Not applicableIn January 2018, the Company's wholly-owned subsidiary Sino Great Wall Intelligent Real Estate (Zhanjiang) Co., Ltd. obtained aReply to Sino Great Wall on EIA Report for Residential Industrialization Base Construction Project, which was expected to speed upconstruction of the Company's fabricated intelligent property R&D center and production base project, facilitate the Company to getinvolved in the fabricated intelligent property construction area, add a new profit growth point to the Company and show a positiveimpact on its future operation and development. For more details, please refer to Announcement of Voluntary Information Disclosureon the Company Getting an EIA Reply to Fabricated Intelligent Property R&D Center and Production Base Construction Projectdisclosed by the Company on January 4, 2018 (refer to the Company's Announcement 2018-003).Due to the shortage of project fundsand the mortgage of production base land to China Bohai Bank, the project is currently at a standstill.

VI. Change of share capital and shareholding of Principal

Shareholders

Ⅰ.Changes in share capital

1. Changes in share capital

Unit: Share

Before the changeIncrease/decrease(+,-)After the Change
AmountProportionShare allotmentBonus sharesCapitalization of common reserve fundOtherSubtotalQuantityProportion
1.Shares with conditional subscription681,305,43640.12%-242,448,369-242,448,369438,857,06725.84%
3.Other domestic shares681,305,43640.12%-242,448,369-242,448,369438,857,06725.84%
Including :Domestic Legal person shares42,479,6722.50%-42,479,672-42,479,67200.00%
Domestic natural person shares638,825,76437.62%-199,968,697-199,968,697438,857,06725.84%
II. Shares with unconditional subscription1,016,939,57559.88%242,448,369242,448,3691,259,387,94474.16%
1.Common shares in RMB753,136,34444.34%242,448,369242,448,369995,584,71358.62%
2.Foreign shares in domestic market263,803,23115.54%263,803,23115.53%
III. Total of capital shares1,698,245,011100.00%001,698,245,011100.00%

Reasons for share changed□ Applicable √ Not applicableApproval of Change of Shares□ Applicable √ Not applicable

Ownership transfer of share changes□ Applicable √ Not applicableInfluence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to commonshareholders of Company in latest year and period□ Applicable √ Not applicableOther information necessary to disclose for the company or need to disclose under requirement from security regulators□ Applicable √ Not applicable

2. Change of shares with limited sales condition

√ Applicable □Not applicable

Unit: Share

Shareholder NameInitial Restricted SharesNumber of Unrestricted Shares This TermNumber of Increased Restricted Shares This TermRestricted Shares in the End of the TermReason for Restricted SharesDate of Restriction Removal
Chen Lue525,344,262525,344,26200The major asset restructuring and the issue of shares to purchase assets and raise matching fundsOctober 24,2018
Chen Lue55,995,9340055,995,934The major asset restructuring and the issue of shares to purchase assets and raise matching funds--
Chen Lue382,5000381,212,483381,594,983Executive locking stockNot applicable
He Feiyan54,800,45854,800,45800The major asset restructuring and the issue of shares to purchase assets and raiseOctober 24,2018
matching funds
He Sen1,637,4351,637,43500The major asset restructuring and the issue of shares to purchase assets and raise matching fundsOctober 24,2018
Jiutai Fund-Bank of Communications-Jiutai Huitong No.2 specific customer asset management plan42,479,67242,479,67200The major asset restructuring and the issue of shares to purchase assets and raise matching fundsDecember 3, 2018
Li Erlong619,05000619,050Executive locking stockNot applicable
Yang Chunling46,1250046,125Executive locking stockNot applicable
Liang Rong00600,975600,975Executive locking stockNot applicable
Total681,305,436624,261,827381,813,458438,857,067----

II. Issuing and listing

1. Explanation of the Situation of the Security Issue (No Preferred Shares) in the Report Period

□ Applicable √ Not applicable

2. Change of asset and liability structure caused by change of total capital shares and structure

□ Applicable √ Not applicable

3. About the existing employees’ shares

□Applicable√Not applicable

III. Shareholders and actual controlling shareholder

1. Number of shareholders and shareholding

Unit: Share

Total number of common shareholders at the end of the reporting period77,544Total shareholders at the end of the month from the date of disclosing the annual report78,961The total number of preferred shareholders voting rights restored at period-end (if any) (See Notes 8)0Total preferred shareholders at the end of the month from the date of disclosing the annual report (if any) (See Notes 8)0
Particulars about shares held above 5% by shareholders or top ten shareholders
ShareholdersNature of shareholderProportion of shares held(%)Number of shares held at period -endChanges in reporting periodAmount of restricted shares heldAmount of un-restricted shares held
Number of share pledged/frozen
Chen LueDomestic Natural person34.36%583,454,5560437,590,917145,863,639Pledge583,454,462
Freeze583,454,556
STYLE-SUCCESS LIMITEDForeign legal person5.47%92,970,9100092,970,910
Union Holdings Co., Ltd.Domestic Non- State-owned legal person5.18%87,935,9210087,935,921
He FeiyanDomestic Natural person3.23%54,800,4580054,800,458Freeze54,800,458
Jiutai Fund-Bank of Communications-Jiutai Huitong No.2 specific customer asset management planOther2.40%40,696,7721,782,900040,696,772
Rich Crown Investment Co.,Foreign legal person1.37%23,235,3130023,235,313
Ltd.
Qinghai Heyi Industry Development Co., Ltd.Domestic Non- State-owned legal person0.79%13,357,0840013,357,084Pledge13,357,084
Huang HuaianDomestic Natural person0.72%12,300,0003793000012,300,000
Zhang XubaoDomestic Natural person0.34%5,852,820-201338005,852,820
Chen LihongDomestic Natural person0.28%4,775,7609230004,775,760
Strategy investors or general legal person becomes top 10 shareholders due to rights issued (if applicable)See Notes 3)Not applicable
Explanation on associated relationship among the aforesaid shareholdersThe largest shareholder of Mr. Chen Lue and the Fourth largest shareholder of Ms. He Feiyan aforesaid are persons acting in concerted; The controlling shareholder of the above-mentioned third shareholder Shenzhen Union Holdings Co.,Ltd. And Sixth shareholder Rich Crown Investment Co., Ltd.. Is Union Development Group Ltd.; It is unknown whether there is relationship between other shareholders and whether they are persons taking concerted action specified in the Regulations on Disclosure of Information about Change in Shareholding of Shareholders of Listed Companies.
Shareholding of top 10 shareholders of unrestricted shares
Name of the shareholderQuantity of unrestricted shares held at the end of the reporting periodName of the shareholder
Chen Lue145,863,639Chen Lue145,863,639
STYLE-SUCCESS LIMITED92,970,910STYLE-SUCCESS LIMITED92,970,910
Union Holdings Co., Ltd.87,935,921Union Holdings Co., Ltd.87,935,921
He Feiyan54,800,458He Feiyan54,800,458
Jiutai Fund-Bank of Communications-Jiutai Huitong No.2 specific customer asset management plan40,696,772Jiutai Fund-Bank of Communications-Jiutai Huitong No.2 specific customer asset management40,696,772
plan
Rich Crown Investment Co., Ltd.23,235,313Rich Crown Investment Co., Ltd.23,235,313
Qinghai Heyi Industry Development Co., Ltd.13,357,084Qinghai Heyi Industry Development Co., Ltd.13,357,084
Huang Huaian12,300,000Huang Huaian12,300,000
Zhang Xubao5,852,820Zhang Xubao5,852,820
Chen Lihong4,775,760Chen Lihong4,775,760
Explanation on associated relationship or consistent action among the top 10 shareholders of non-restricted negotiable shares and that between the top 10 shareholders of non-restricted negotiable shares and top 10 shareholdersMr. Chen Lue and Ms. He Feiyan are the unanimous persons; Union Development Group Co., Ltd. is the controlling shareholder of the Above –mentioned shareholder Union Holdings Co., Ltd. And Rich Grown Investment Co., Ltd., It is unknown whether there is relationship between other shareholders and whether they are persons taking concerted action specified in the Regulations on Disclosure of Information about Change in Shareholding of Shareholders of Listed Companies.
Notes to the shareholders involved in financing securities (if any) (See Notes 4)Not applicable

Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreementdealing in reporting period.□ Yes √ NoThe top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy –backagreement dealing in reporting period.

2. Controlling shareholder

Nature of Controlling Shareholders: Natural Person HoldingType of Controlling Shareholders: Natural Person

NameNationalityWhether to obtain the right of abode in other countries or regions
Chen LueChinaNo
Main occupations and dutiesBoard Chairman of the Company
Situation of domestic and abroad holding listed companies in the reporting period.Nil

Change of the actual controller in the reporting period□ Applicable √ Not applicableNil

3.Information about the controlling shareholder of the Company

Actual controller nature:Domestic natural personActual controller type:Natural person

Name of actual controllersRelationship with the actual controllerNationalityWhether to obtain the right of abode in other countries or regions
Chen LueSelfChinaNo
He FeiyanActing in concert (including agreed, relative and same control)ChinaNo
He SenActing in concert (including agreed, relative and same control)ChinaNo
Main occupations and dutiesChen Lue: Chairman. He Feiyan: assuming no duty in the Company. He Sen: Vice General Manager of Sino Great Wall International Engineering Co., Ltd.
Situation of domestic and abroad holding listed companies in the past 10 yearsThe Company's actual controller and persons acting in concert did not hold other listed companies, save the Company, in the past decade.

Changes of the actual controller in the reporting period□Applicable √Not applicableNo Changes of the actual controller in the reporting period

Block Diagram of the ownership and control relations between the company and the actual controller

The actual controller controls the company by means of trust or managing the assets in other way

□Applicable √Not applicable

4. Particulars about other legal person shareholders with over 10% share held□Applicable √Not applicable5. Situation of Share Limitation Reduction of Controlling Shareholders, Actual Controllers, RestructuringParty and Other Commitment Subjects□Applicable √Not applicable

VII. Situation of the Preferred Shares

□ Applicable √ Not ApplicableThe Company had no preferred shares in the reporting period

VIII. Information about Directors, Supervisors and Senior Executives

I. Change in shares held by directors, supervisors and senior executives

NamePositionsOffice statusSexAgeStarting date of tenureExpiry date of tenureShares held at the year-begin(share)Amount of shares increased at the reporting period(share)Amount of shares decreased at the reporting period(share)Other changes increase/decreaseShares held at the year-end(share)
Chen LueBoard chairmanIn officeMale482015年10月29日2021年11月14日583,454,556000583,454,556
Li ErlongVice Board chairman, General ManagerIn officeMale432015年10月29日2021年11月14日825,40000-206,3501619,050
Liang RongVice Board chairman, Deputy General ManagerIn officeMale492015年10月29日2021年11月14日0801,3000-200,3252600,975
He YanjunDirectorIn officeFemale402018年11月15日2021年11月14日00000
Peng LizhiDirector, Executive deputy general managerIn officeMale502018年11月15日2021年11月14日00000
Liang YongDirectorIn officeMale582018年11月15日2021年11月14日00000
Niu HongjunIndependent directorIn officeMale462018年11月15日2021年11月14日00000
Jiang ChongguangIndependent directorIn officeMale432015年10月29日2021年11月14日00000
Yu HaichunIndependent directorIn officeMale552018年11月15日2021年11月14日00000
Wu XiaomingChairman of the supervisory committeeIn officeMale382018年11月15日2021年11月14日00000
Pang AishengSupervisorIn officeMale382018年11月15日2021年11月14日00000
Qin YuanxinEmployee supervisorIn officeMale542018年11月15日2021年11月14日00000
Yang ChunlingDeputy General Manager, CFO, Secretary to the board of directorsIn officeFemale472015年10月29日2021年11月14日61,50000061,500
Cui HongliDeputy General ManagerIn officeFemale462017年07月06日2021年11月14日00000
Fang XiangzhongDeputy General ManagerIn officeMale482018年11月15日2021年11月14日00000
Zhang JianDeputy General ManagerIn officeMale602018年11月15日2021年11月14日00000
Bai BinDirectorDimissionMale332015年10月29日2018年01月18日00000
Tian WeiDirectorDimissionMale602018年03月28日2018年11月14日00000
Hu YongfengDirectorDimissionMale562000年05月12日2018年11月14日00000
Wang LeiDirectorDimissionMale552015年10月29日2018年11月14日00000
Tang JianxinIndependent DirectorDimissionMale532015年10月29日2018年11月14日00000
Zhang YufengIndependent DirectorDimissionMale552015年10月29日2018年11月14日00000
Dong BinggenChairman of the supervisory committeeDimissionMale692002年06月26日2018年06月21日00000
Fang XianzhongChairman of the supervisory committeeDimissionMale482018年06月21日2018年11月14日00000
Huang ShengdeSupervisorDimissionMale472015年10月29日2018年11月14日00000
Wu XiaomingEmployee SupervisorDimissionMale382015年10月29日2018年11月14日00000
Tian WeiGeneral ManagerDimissionMale602017年07月06日2018年11月14日00000
Wang ShaojunDeputy General ManagerDimissionMale622017年07月06日2018年11月14日00000
Tang XianyongCFO, Deputy General ManagerDimissionMale452017年07月06日2018年11月14日00000
Total------------584,341,4801,3000-406,675584,736,0
5681

注:1 系被广东省深圳市福田区人民法院强制卖出,详见2019年1月5日披露于巨潮资讯网上的《关于董事及高管所持公司股份被强制执行的公告》(公告编号:2019-001)2 系被法院强制卖出

II. Change in shares held by directors, supervisors and senior executives

√ Applicable □Not applicable

NamePositionsTypesDateReason
He YanjunDirectorEngagedNovember 15,2018Elected as a non-independent director in the fourth extraordinary shareholders’ general meeting of 2018
Peng LizhiDirector, Executive Deputy General ManagerEngagedNovember 15,2018Elected as a non-independent director in the fourth extraordinary shareholders’ general meeting of 2018, Appointed as the Executive Deputy general manager of the company by the 1st meeting of the Eighth Board of Directors
Liang YongDirectorEngagedNovember 15,2018Elected as a non-independent director in the fourth extraordinary shareholders’ general meeting of 2018
Niu HongjunIndependent directorEngagedNovember 15,2018Elected as independent director in the fourth extraordinary shareholders’ general meeting of 2018
Yu HaichunIndependent directorEngagedNovember 15,2018Elected as a non-independent director in the fourth extraordinary shareholders’ general meeting of 2018
Wu XiaomingChairman of the supervisory committeeEngagedNovember 15,2018Elected as supervisor in the fourth extraordinary shareholders’ general meeting of 2018;Elected as Chairman of the supervisory committee of the Company by the 1st meeting of the Eighth Board of supervisors
Pang AishengSupervisorEngagedNovember 15,2018Elected as Supervisor in the fourth extraordinary shareholders’ general meeting of 2018
Qin YuanxinEmployee supervisorEngagedOctober 29,2018Elected as employee supervisor by the employee representative assembly of the company on October 29, 2018
Li ErlongGeneral ManagerEngagedNovember 15,2018Appointed general manager of the company at the first meeting of the eighth board of directors
Fang XianzhongDeputy General ManagerEngagedNovember 15,2018Appointed Deputy general manager of the company at the first meeting of the eighth board of directors
Zhang JianDeputy GeneralEngagedNovember 15,2018Appointed Deputy general manager of the company at the first meeting of the eighth board of directors
Manager
Yang ChunlingDeputy General Manager, CFOEngagedNovember 15,2018Appointed Deputy general manager and CFO of the company at the first meeting of the eighth board of directors
Hu YongfengDirectorLeave the office while office term endsNovember 14,2018No longer assuming the duty of non-independent director in the Company upon expiry of term
Tian WeiDirectorLeave the office while office term endsNovember 14,2018No longer assuming the duty of non-independent director in the Company upon expiry of term
Wang LeiDirectorLeave the office while office term endsNovember 14,2018No longer assuming the duty of non-independent director in the Company upon expiry of term
Tang JianxinIndependent directorLeave the office while office term endsNovember 14,2018No longer assuming the duty of independent director in the Company upon expiry of term
Zhang YufengIndependent directorLeave the office while office term endsNovember 14,2018No longer assuming the duty of independent director in the Company upon expiry of term
Bai BinDirectorLeave the office while office term endsJanuary 18,2018Resigned due to personal reasons
Dong BinggenChairman of the supervisory committeeLeave the office while office term endsJune 21,2018Resigned due to personal reasons
Fang XianzhongChairman of the supervisory committeeLeave the office while office term endsNovember 14,2018No longer assuming the duty of Chairman of the supervisory committee in the Company upon expiry of term
Huang DeshengSupervisorLeave the office while office term endsNovember 14,2018No longer assuming the duty of Supervisor in the Company upon expiry of term
Wu XiaomingEmployeeLeave theNovemberNo longer assuming the duty of Employee supervisor in
supervisoroffice while office term ends14,2018the Company upon expiry of term
Tang XianyongCFOLeave the office while office term endsNovember 14,2018No longer assuming the duty of CFO in the Company upon expiry of term
Tian WeiGeneral ManagerLeave the office while office term endsNovember 14,2018No longer assuming the duty of General Manager in the Company upon expiry of term
Wang ShaojunDeputy General ManagerLeave the office while office term endsNovember 14,2018No longer assuming the duty of Deputy General Manager in the Company upon expiry of term

III. Posts holding

Main working experience of current directors, supervisors and senior management staff

(1) Director

Chen Lue, male, Chinese nationality, no overseas permanent residence, born in April 1970, currently the doctoral students ofaccounting specialty in Wuhan University, Senior Management MBA of Guanghua School of Management of Beijing University,Senior Management MBA of School of Economics and Management of Tsinghua University, Bachelor in major of Food Science andNutritional Engineering of China Agricultural University, senior engineer. Since October 2001, he has been the director of Sino Greatwall International Engineering Co., Ltd., since April 2014, he has been the executive director of Sino Great Wall Investment (Beijing)Co., Ltd; since October 2015, he has been the chairman of China Industry Investment Co., Ltd. From October 2015 to July 2017, hehas been the chairman and General Manger of the Company, Sine July 2017, He has been the Chairman of the Company.Li Erlong, Chinese nationality, no overseas permanent residence, male, was born in September 1975, graduated from the ShandongBuilding Materials Engineering College, MBA of Tsinghua University. He had served as the assistant to director of the NationalBuilding Materials Quality Supervision and Inspection Center, the researcher for the China-Africa R&D Center of Artificial Crystal.Since March 2005, he has been served as the general manager of Sino Great Wall International Engineering Co., Ltd; sinceNovember 2007, he has been the manager of Beijing Sino Great Wall Decoration Design Co., Ltd.; since June 2014, he has been thedirector of Sino Great Wall Internatioanal Engineering Co., Ltd., Since September 2015, he has been the director of China IndustryInvestment Co., Ltd., since July 2016, he has been the chairman of Sino Great Wall Internatioanal Engineering Co., Ltd., SinceAugust 2016, he has been the executive director of Sino Great Wall Southwest Construction Engineering Co., Ltd., Since November2016, he has been the chairman of Sino Great Wall Jianye Engineering Co., Ltd., since December 2016, he has been the GeneralManger of Sino Great Wall Development (Hengqin) Co., Ltd., From October 2015 to June 2017, he has been the Director and GenralManger of the Company, Since September 2017, he has been the executive director and General Manger of Sino Great WallSouthwest Engineering Consulting Co . , Ltd . Sino Great Wall Southwest Commercial Trade Co., Ltd. And Sino Great WallSouthwest Technology Co., Ltd., since February 2018, he has been the executive director of Sino Great Wall Hebei XionganEngineering Co., Ltd.,From July 2017 to November 2018, he has been the Vice Chairman and Deputy General Manger of theCompany. Since November 2018, he has been the Vice Chairman and General Manger of the Company.Liang Rong, Male Chinese nationality, no overseas permanent residence, was born in December 1969,graduated from civil

engineering major of Shantou University and MBA of Senior Management of Nankai University, is a senior engineer. He had severedas Assistant Engineer of Zhuhai Xinzhou Real Estate Co., Ltd, Quantity Surveyor of Japan Shimizu Construction Co., Ltd, andProject Manager of Shenzhen Great Wall Furniture Decoration Engineering Co., Ltd. From April 2003 to June 2016, he has been theExecutive General Manger of Sino Great Wall Construction Engineering Co., Ltd., since June 2014, he has been the Director SinoGreat Wall Construction Engineering Co., Ltd., since Novemer 2014, he has been the Diretor of Sino Great Wall InternationalEngineering(Macao) Co., Ltd., From October 2015 to June 2017, he has been the director and Deputy General Manger of theCompany, since August 2017, he has been the Chairman of Sino Great Wall Group Co., Ltd., Since September 2017, he has been theChairman of Kunming Sino Shengong Forestry Development Co., Ltd.,since October 2017, he has been the General Manager of SinoGreat Wall Guangxia (Wuhan )Medical Development Co., Ltd., since Decemer 2017, he has been the Chairman of Sino Great WallHealth Management (Jiangsu) Co., Ltd., and Director of Weifang Sino Great wall Health Development Co., Ltd., since March 2018,he has been the Chairman of Renhui Sino Great wall Wine Culture Development Co., Ltd., Since July 2017, he has been the ViceChairman and Deputy General Manger of the Company.Since August 2017, he has been the Chairman of Sino Great Wall Group Co.,Ltd. has assumed Kunming Sino Sengong Forestry Development Co., Ltd., a director of Sino Great Wall (Hong Kong) Real EstateCo., Ltd., Chairman and a director of Alor Vista Development Sdn Bhd (Penang Bukit Mertajam Project Company) since September2017, assumed the General Manager of Sino Great Wall Guangxia (Wuhan) Medical Development Co., Ltd. since October 2017,assumed a director of SGW Ventures Sdn Bhd (Malaysia Management Company) since November 2017, assumed Chairman of SinoGreat Wall Health Management (Jiangsu) Co., Ltd. and a director of Weifang Sino Great Wall Health Development Co., Ltd. sinceDecember 2017, assumed a director of Cenang Resort Sdn Bhd (Cenang Company) and Chairman of Sino Great Wall TechnologyDevelopment Co., Ltd. since January 2018, assumed the Chairman of Renhuai Sino Great Wall Wine Culture Expo ParkDevelopment Co., Ltd. since March 2018, assumed a director of Aofa Investment Co., Ltd. and Weifang Sino Great Wall Health CareIndustry Co., Ltd. since August 2018, and assumed a director of Weifang Binhai Sino Bincheng Hospital Co., Ltd. since September2018.

He Yanjun , Female, a Hong Kong resident, born in May 1978, graduated from Southwest University of Political Science & Law,majoring in law. She worked as a court clerk at Shenzhen Intermediate People's Court from July 2003 to August 2009; she assumedthe Legal Secretary and Manager Assistant of Office of the President, UDC Group Co., Ltd. from August 2009 to February 2011; shehas assumed the Legal Manager of UDC Holding Co., Ltd. since April 2015. Since November 2018, she has assumed a director ofthe Company.Peng Lizhi,Male , Chinese nationality, no overseas permanent residence, born in September 1968,He is an MBA master, nationalhighway engineering constructor, and professor-level senior engineer. From 1990 to 2002, he worked at Second Engineering Division,Second Highway Engineering Bureau, Ministry of Transportation; from 2003 to 2006, he assumed the Chief Engineer of Road &Bridge South China Engineering Co., Ltd.; from 2006 to May 2016, he assumed Chairman and General Manager of Road & BridgeNorth China Engineering Co., Ltd.; since June 2016, he has assumed Chairman and General Manager of Sino Great WallInfrastructure Investment Co., Ltd. From December 2017 to November 2018, he assumed Vice General Manager of the Company;from November 2018, he has assumed a director and Standing Vice Manager of the Company.

Liang Yong, Male , Chinese nationality, no overseas permanent residence, born in April 1960,He is an engineer graduating fromAnsteel Engineering College. He used to work at Ansteel Design Research Institute, Yantai Liaohai Hi-Tech Development Co., Ltd.,Coastal Green Homeland (Anshan) Co., Ltd. and Coastal Green Homeland Central China Company among other companies. FromMay 2008 to July 2009, he assumed the General Project Manager of Tianjin Haishun Real Estate Development Co., Ltd.; from July2009 to August 2011, he assumed General Project Manager of MCC Times Real Estate Co., Ltd.; from September 2011 to April 2012,he assumed Vice President of Hubei Brandmont Investment Group Co., Ltd.; from April 2012 to August 2014, he assumed GeneralManager of Nanyang Feifan Real Estate Co., Ltd.; from August 2014 to March 2016, he assumed General Manager Assistant ofCITIC Guoan Investment (Shanghai) Company; from April 2016 to March 2019, he assumed Vice General Manager of Real Estate

Development Department of the Company; since November 2018, he has assumed a director of the Company.Niu Hongjun, Male , Chinese nationality, no overseas permanent residence, born in November 1972,He is a certified publicaccountant in both China and Australia with a bachelor's degree awarded by School of Economic & Management, ShijiazhuangTiedao University, a master's degree awarded by Chinese Academy of Fiscal Sciences, Ministry of Finance, and a doctoral degree ofmanagement awarded by Renmin Business School; since 2008, he has been a master supervisor at Business School of BeijingTechnology and Business University, working on specialized accountancy teaching and research; since 2009, he has been hired as afinancial consultant by Ministry of Commerce of the People's Republic of China; since January 2015, he has assumed an independentdirector of Jingwei Textile Machinery; from June 2016 to February 2018, he assumed an independent director of Cloud Live TechGroup; since November 2018, he has assumed an independent director of the Company.Jiang Chongguang, Male , Chinese nationality, no overseas permanent residence, He is a doctor of economics, postdoctor, researcher,part-time professor and visiting scholar to international institutions of higher education. He is the present Executive Vice Presidentand Secretary-General of China Insurance Innovation Research Institute, Executive Director of Health China Strategy ResearchCenter, Chinese Academy of Social Sciences, Deputy Director of Financial Technology Committee, Asian Financial CooperationAssociation, a consultant to Insurance Society of China and an independent director of Dezhan Big Health Co., Ltd. He is a senioreconomist of Ivy Capital. Since 2015, he has acted as an independent director of the Company.Yu Haichun ,Male, Chinese nationality, no overseas permanent residence, born in November 1962,He has a doctoral degree of civiland commercial law awarded by China University of Political Science and Law. He used to be anassistant-regimental-commander-level instructor of PLA Dalian Naval Academy, lawyer of Liaoning Fada Law Firm, lawyer andpartner of Beijing King & Capital Law Firm, secretary of the party committee and vice president of School of Insurance andEconomics at UIBE. From March 2013 to September 2018, he assumed secretary of the party committee and vice president of UIBELaw School. Since September 2018, he has assumed a professor of UIBE Law School and Director of Research Center for InsurancePolicies and Laws. Since November 2018, he has assumed an independent director of the Company.

2. SupervisorsWu Xiaoming, Male, Chinese nationality, no overseas permanent residence, born in November 1980, He has a bachelor's degree oflaw awarded by School of Law, Guangdong Business School (presently known as GuangDong University of Finance & Economics).He used to work at Haizhu Branch, Guangzhou Municipal Administration of Quality and Technology Supervision (the presentQuality and Technology Supervision Bureau of Haizhu District, Guangzhou). Since December 2008, he has assumed GeneralManager Assistant and Legal Manager of Sino Great Wall International Engineering Co., Ltd. Since June 2014, he has assumedChairman of Board of Supervisors of Sino Great Wall International Engineering Co., Ltd.; from October 2015 to November 2018, heassumed the Employee Supervisor of the Company; since November 2018, he has assumed Chairman of the Board of Supervisors ofthe Company.Pang Aisheng, Male, Chinese nationality, no overseas permanent residence, born in May 1981,He has a bachelor's degree awarded byGuangdong Vocational Normal School (presently known as Guangdong Polytechnic Normal University) and MBA degree of seniorexecutives awarded by Zhejiang University. He used to be a project manager of Sino Great Wall International Engineering Co., Ltd.;since 2015, he has assumed Vice General Manager of Sino Great Wall International Engineering Co., Ltd. and General Manager ofEast China Division herein; since November 2018, he has assumed a supervisor of the Company.Qin Yuanxin, male, Chinese nationality, no overseas permanent residence, born in November 1964, is a senior engineer, graduatingfrom Shandong Construction Engineering School with a bachelor's degree of engineering management. He used to be TechnicalDirector and Production Manager of Tongcheng Sixing Construction Installation Engineering Co., Ltd.; from March 1996 toDecember 2004, he assumed the Production Manager and Project Manager of Anhui First Construction Engineering Co., Ltd.; sinceMarch 2005, he has assumed Project Manager, Security Inspection Manager, Vice General Manager of Engineering ManagementCenter, Vice General Manager and Supervisor of Clearing Center of Sino Great Wall International Engineering Co., Ltd. Since March2005, he has assumed Standing Vice Manager of SPV Management Center of Sino Great Wall Co., Ltd. Since November 2018, he

has assumed the Employee Supervisor of the Company.3. Senior management personnelRefer to the preceding "1. Members of Board of Directors" for resumes of Mr. Li Erlong, Mr. Liang Rong and Mr. Peng Lizhi.Yang Chunling, female, Chinese nationality, no overseas permanent residence, born in February 1971, Bachelor in economics, masterin industrial engineering, accountant. She had served as employee in Sinotrans Henan Zhengzhou Logistic and Trading Company,Deputy Minister of the securities department of Aeolus Tyre Co., Ltd, vice general manager and secretary of the board of directors ofHenan Yuhua New Material Co., Ltd. Since September 2015, she has been the director of Sino Cubic Investment Co., Ltd; sinceMarch 2014, she has been the secretary of the board of directors of Sino Great Wall International Engineering Co., Ltd; FromOctober 2015 to November 2018,, she has been the secretary of the board of directors of the company.Since November 2014, she hasbeen the Deputy General Manager , CFO and secretary of the board of directors of the Company.

Cui Hongli, female, Chinese nationality, no overseas permanent residence, born in January 1972, graduated from Henan Universityof Finance and Economics, CPA. She had been served in China Luoyang Float Glass Group Co.,Ltd, Beijing Jiayou Real EstateDevelopment Group Co.,Ltd and Yuancheng Industrial Group Co.,Ltd. Since July 2011, she has been the investment and financedepartment manager, CFO of Sino Great Wall International Engineering Co., Ltd; From October 2015 to June 2017, she has been thecompany’s CFO.Since July 2017, She has been the Deputy General Manger of the Company.Fang Xianzhong male, Chinese nationality, no overseas permanent residence, born in February 1970, he has an EMBA degreeawarded by Guanghua School of Management, Peking University. He used to assume an office staff of Beijing Jingdong AutoMaintenance Group, Sales Manager of Beijing Gomatech Co., Ltd., General Manager of Business Unit of Founder Technology CO.,Ltd., and Vice General Manager of Beijing Honglian Jiuwu Information Industry Co., Ltd. among other duties. From May 2002 toDecember 2003, he assumed General Manager of Beijing Haiweixin Technology Co., Ltd.; from January 2004 to June 2010, heassumed General Manager of Beijing Haiwei Xinda Technology Co., Ltd.; since July 2010, he has assumed Vice General Manager ofSino Great Wall International Engineering Co., Ltd.; from June to November 2018, he assumed Chairman of Board of Supervisors ofthe Company; since November 2018, he has assumed Vice General Manager of the Company.Zhang Jian,male, Chinese nationality, no overseas permanent residence, born in August 1958,graduated from Central School of ChinaCommunist Youth League with a specialized associate degree. He used to assume a company commander of Headquarters ofKunming Military Command, a section chief of Qingdao Municipal People's Government, General Manager of Government OfficesAdministration Trading Company, General Manager of Qingdao Shopping Mall of Beijing Chengxiang (a listed company), GeneralManager of New City Plaza of South Group, General Manager of Qingdao Aoda Investment Development Company, Hongta Group,and COO of Yunnan, Guizhou, Sichuan and Shaanxi of Junhao Group among other duties. From January 2016 to March 2018, heassumed Vice General Manager of Sino Great Wall Medical Investment Management Company; since April 2018, he has assumedVice General Manager of Sino Great Wall Real Estate Company; since November 2018, he has assumed Vice General Manager ofSino Great Wall Co., Ltd.Office taking in shareholder companies□ Applicable √Not applicableOffices taken in other organizations√Applicable □Not applicable

NameName of other unitsPositionOffice term start fromOffice term endedWhether receiving remuneration from other units or not
Chen LueSino Great Wall International EngineeringBoardOctoberNo
Co., Ltd.chairman17,2001
Chen LueSino Great Wall Investment (Beijing) Co., Ltd.Executive directorApril 22, 2014No
Chen LueChina Industry Investment Co., Ltd.Board chairmanSeptember 14,2015No
Chen LueShenzhen Sino Dalue Investment Co.,Ltd.Executive directorFebruary 25,2015No
Chen LueZhongshang Sino Aerospace Technology (Beijing) Co., Ltd.Board chairmanJanuary 24,2017No
Li ErlongChina Industry Investment Co., Ltd.DirectorSeptember 14,2015No
Niu HongjunBusiness Schooll of Beijing Technology and Business UniversityMaster SupervisorSeptember 1,2008Yes
Niu HongjunMinistry of Commerce of the people's republic of ChinaFinancial advisoryJanuary 15,2009Yes
Niu HongjunJingwei Textile Machinery Co., Ltd.Independent DirectorJanuary 13,2015Yes
Jiang ChongguangDezhan Healthcare Co., Ltd.Independent DirectorOctober 25,2016October 25,2021Yes
Jiang ChongguangCASS Healthy China Strategic Research Center.Executive directorMay 1,2015May 1,2025Yes
Jiang ChongguangIVY CapitalSenior economistJune 1,2015June 1,2025Yes
Jiang ChongguangInsurance Society of ChinaCounselorJune 15,2016June 15,2021Yes
Jiang ChongguangChina Insurance Innovation Research InstituteExecutive vice President and general secretaryApril 25,2016April 25,2026Yes
Jiang ChongguangAsian Finance Association Financial Science and Technology CommitteeAssociate directorFebruary 1,2018March 1,2023No
Yu HaichunSchool of Law,UIBEProfessor, Director of Insurance Industry Policy and Law Research CenterSeptember 13,2018Yes
Yang ChunlingChina Industry Investment Co., Ltd.DirectorSeptember 1,2015No

Punishments to the current and leaving board directors, supervisors and senior managers during the report period by securitiesregulators in the recent three years□ Applicable √Not applicable

IV. Remuneration to directors, supervisors and senior executives

Decision-making procedures, basis for determination and actual payment of the remuneration to directors , supervisors and seniorexecutivesThe Company's remuneration and appraisal committee formulates the remuneration plan, which is implemented after the approval bythe board of directors or after review and approval by the shareholders' general meeting; and it performances the evaluation ofdirectors and senior management personnel according to the performance evaluation standards and procedures; meanwhile, theCompany proposes the amount of remuneration and reward methods for directors, supervisors and senior managers according to thepost performance evaluation and salary distribution policy, which shall be approved by voting and finally be reported to the board ofdirectors for approval and implementation.The Company formulates the remuneration plans or schemes based on the main scope, responsibilities, and importance of directorsand senior management positions and the remuneration levels of other related companies, and it pays the remuneration based on thepost performance evaluation results and the salary allocation policy.Remuneration to directors, supervisors and senior executives in the reporting period

Unit: 10,000 Yuan

NamePositionsSexAgeOffice statusTotal remuneration received from the shareholderRemuneration actually receives at the end of the reporting period
Chen LueBoard ChairmanMale48In office36.6No
Li ErlongVice Board Chairman, General ManagerMale43In office52.15No
Liang RongVice Board Chairman, Deputy General MangerMale49In office43.2No
He YanjunDirectorFemale40In office0Yes
Peng LizhiDirector, Excutive Deputy GeneralMale50In office43.46No
Manager
Liang YongDirectorMale58In office0.33No
Niu HongjunIndependent DirectorMale46In office1.37No
Jiang ChongguangIndependent DirectorMale43In office11No
Yu HaichunIndependent DirectorMale55In office1.37No
Wu XiaomingChairman of the supervisory committeeMale38In office1.76No
Pang AishengSupervisorMale38In office3.12No
Qin YuanxinEmployees supervisorMale54In office1.24No
Yang ChunlingDeputy General Manager, CFO, Secretary to the board of directorsFemale47In office22.8No
Cui HongliDeputy General ManagerFemale46In office22.8No
Fang XianzhongDeputy General ManagerMale48In office2.1No
Zhang JianDeputy General ManagerMale60In office7.31No
Hu YongfengDirectorMale56Dimission0Yes
Wang LeiDirectorMale55Dimission0No
Bai BinDirectorMale33Dimission0No
Tian WeiDirectorMale60Dimission0No
Tang JianxinIndependent DirectorMale53Dimission9.63No
Zhang YufengIndependent DirectorMale55Dimission9.63No
Dong BinggenChairman of the supervisory committeeMale69Dimission0Yes
Fang XianzhongChairman of the supervisory committeeMale48Dimission6.3No
Huang ShengdeSupervisorMale47Dimission12.68No
Wu XiaomingEmployees supervisorMale38Dimission12.34No
Tian WeiGeneral ManagerMale60Dimission77.53No
Wang ShaojunDeputy General ManagerMale62Dimission52.5No
Tang XianyongDeputy Genral Manager, CFOMale45Dimission35No
Total--------466.22--

Incentive equity to directors, supervisors or/and senior executives in the reporting period□ Applicable √Not applicable

V. Particulars about employees.

1. Number of staff, professional structure and educational background

Number of in-service staff of the parent company(person)59
Number of in-service staff of the main subsidiaries(person)762
The total number of the in-service staff(person)821
The total number of staff receiving remuneration in the current period(person)821
Retired staff with charges paid by the parent company and main subsidiaries (person)17
Professional
Classified according by ProfessionsNumber of persons(person)
Production251
Sales16
Technical331
Financial40
Administrative61
Other122
Total821
Education
Classified according by ProfessionsNumber of persons(person)
Master’s Degree and bove52
Bachelor366
College diploma270
Other133
Total821

2. Remuneration policies

Based on the principle of “external fairness and internal fairness”, the Company combines the company’soverall strategic plan to provide competitive remuneration and benefits in the industry. Different post has differentremuneration, and the remuneration will be raised upon the excellent performance, and the staff remunerationlevel will be determined according to the job responsibilities,3.Training plan

The Company builds its talent team by combining internal and external training methods and creates atraining system where a priority is given to specialized quality while other professional qualities aid. To bespecific, the Company explores and trains excellent internal lecturers and develops a variety of trainingcoursewares suitable to its own enterprise culture. The Company hires external consultants and experts in theindustry to impart and communicate new techniques and management skills. The Company implements itstraining at three levels including project, department and company and fulfills a full coverage of its training workby an on-line school, planned to hit a high rate of fulfillment, promote comprehensive qualities of employees stepby step and supplement sustainable and applicable talents to its following sound development.4.Outsourcing situation□ Applicable √ Not Applicable

IX. Administrative structure

I. Basic state of corporate governance

The company’s governance meets the requirements of regular documents on the governance of the listed companies issued by ChinaSecurities Regulatory Commission.In the report period, the Company kept improving its standard operation and management system, optimized its managementstructure, further standardized its operation and raised its management standard by abiding by Company Law, Securities Law, StockListing Rules of the Shenzhen Stock Exchange, Code of Corporate Governance for Listed Companies and relevant laws andregulations of China Securities Regulatory Commission in combination with its own actual situation.As the end of the report period, the Company's actual management situation agreed with normative documents published by ChinaSecurities Regulatory Commission regarding governance of listed companies. Specifically showed in the following respects:

1. Shareholders and General Meeting of Shareholders: the Company can safeguard rights to be informed and participate granted toshareholders by law in all respects, convene and hold a General Meeting of Shareholders in accordance with provisions andrequirements in the Rules for General Meeting of Shareholders of Listed Companies and Rules of Procedure at General Meeting ofShareholders among others, and ensure that all the shareholders, minority shareholders in particular, were granted with the right to beinformed and capacity to exercise their rights. In the report period, the Company complied with relevant provisions in the CompanyLaw and Articles of Association and had the witness of a lawyer in convening each General Meeting of Shareholders and ensuringsufficient number of shareholders with sufficient number of shares attended each meeting. Shareholders attending each meeting canexercise their rights fully in principle of independence.2. Relationship between holding shareholders and the listed company: holding shareholders behaved and conducted no act thatdirectly or indirectly intervened in the Company's decision-making and business activities by bypassing the General Meeting ofShareholders; the Company was independent from holding shareholders regarding personnel, assets, finance, institution and businessand the Company's Board of Directors and Board of Supervisors can make independent operation. The Company was independentfrom holding shareholders regarding personnel, assets, finance, institution and business among others.3. The Directors and The Board of Directors: the Board of Directors includes four special committees, such as Audit Committee,Nomination Committee, Strategy Committee and Remuneration and Appraisal Committee, which has provided a favorable support tothe company for the decision-making related issues. Each special committee has operated according to their work responsibilities andprocedure rules, made research and examination for the relative business and major issues of the company, and expressed theprofessional opinions in the Board of Directors to offer support and advice for the scientific decision-making of the Board and ensurethe Board’s work more scientific and efficient. Also, the organization of the Board of Directors is in line with the requirement of lawsand regulations, and the independent directors play an important role in the corporate decision-making. So, the company attachesimportance to the function of the independent directors. In the company’s management, the independent directors make carefulreview and express the independent views for the financial audit, the affiliated transactions and other issues.(4)Supervisors and the supervisory committee: The number and composition of the Supervisory Committee of the Companycomplied with the requirements of laws and regulations. The Supervisory Committee of the Company formulated the Rules ofProcedure of the Supervisory Committee. The supervisors of the Company were able to perform their duties seriously, take theattitude of being responsible for all shareholders and supervise the legality and regulation conformity of the Company's finance andthe duty performance of the directors, managers and other senior executives of the Company.5. Regarding information disclosure and transparency: the Company discharged its duties of information disclosure as specified inrelevant laws and regulations as well as System for Management of Information Disclosure. The Company enhanced communication

with investors in a variety of channels to promote their understanding and recognition of the Company. The Company took suchcommunication measures as carefully handling the visit and consultation of each shareholder and duly giving a reply to questionsraised by investors at the interactive platform to ensure that all the shareholders were granted with a fair opportunity to acquireinformation and guarantee their right to be informed.6. Regarding performance assessment and incentive & constraint mechanisms: in the report period, the Company kept improving theperformance evaluation indicator and incentive & constraint mechanisms for senior executives under the instruction of theCompensation and Evaluation Committee of Board of Directors, wherein their compensation was combined with the Company'sbusiness performance and total development plan and personal working performance, an annual integrated quantitative andqualitative evaluation was organized on senior executives' fulfillment of duties and senior executives were hired in an open andtransparent way and in compliance with laws and regulations.7. Regarding stakeholders: the Company fully respected and safeguarded legitimate rights and interests of stakeholders, implementeda benefit coordination and balance among society, shareholders, the Company, employees and other parties, and enhancedcommunication and exchange of the parties to jointly promote sustainable and robust development of the Company.Does there exist any difference in compliance with the corporate governance , the PRC Company Law and the relevant provisions ofCSRC,□ Yes √ NoThere exist no difference in compliance with the corporate governance , the PRC Company Law and the relevant provisions ofCSRC.

II. Independence and Completeness in business, personnel , assets, organization and financeThe company is completely separate with the controlling shareholder in terms of the business, personnel, assets,organizations, finance and other aspects, possessing independent and complete business and independent operatingcapacity.1. Business: the Company had independent decision-making and execution agencies, built independent businessdepartments which, independent from holding shareholders, actual controllers and other companies under control,handled businesses, and conducted no related transaction of horizontal competition or significant loss of fairnesswith holding shareholders, actual controllers and other companies under control.2.Personnel:The company has a completely independent personnel management and salary system. The company’ssenior manager personnel all are work in the company and receiving remunerations, and they do not hold anyother posts except the post of director or receive remunerations in the controlling shareholder and its affiliatedenterprises. The company's financial staffs do not concurrently hold posts in the controlling shareholder and itsaffiliated enterprises.3. Assets: the Company owned independent sites for office and business operation and other assets, possessedproduction systems pertaining to production and operation, boasted equipment related to production and operationby law and had independent purchase and sales systems and supporting facilities; the Company's holdingshareholders and actual controllers did not occupy the Company's funds, assets or other resources.4. Agencies: the Company built a full and independent internal institutional framework and functional system outof its own development, where departments with specific duties defined worked together well and agencies werefully independent from each other in operation. Meanwhile, the Company set an independent decision-makingagency, office agency and site for production and operation management and the setting of agencies andproduction and operation activities were immune from the intervention of other units or individuals.5.Finance:The company has a standardized financial accounting system, with an independent financial accountingdepartment, full-time accounting personnel and independent accounting system, being able to make financial

decisions independently. The company has set up the independent bank account and independently pays the tax.The situation of the free-occupying of the company’s assets and funds by the controlling shareholder and itsaffiliated enterprises does not exist.

III. Horizontal Competitions

□Applicable√Not applicable

IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the ReportingPeriod

1. Annual General Meeting

SessionsTypeInvestor participation ratioMeeting DateDisclosure dateDisclosure index
The first provisional shareholders’ General meeting in 2018Provisional shareholders’ General Meeting51.78%March 28,2018March 29,2018The first provisional shareholders’ General meeting in 2018 (No.2018-050) published on Juchao Website(http://www.cninfo.com.cn)on March 29,2018
The Second provisional shareholders’ General meeting in 2018Provisional shareholders’ General Meeting38.84%April 9,2018April 10,2018The Second provisional shareholders’ General meeting in 2018 (No.2018-053) published on Juchao Website(http://www.cninfo.com.cn)on April 10,2018
Annual General Meeting of 2017Annual General Meeting34.50%May 16,2018May 17,2018Annual General Meeting of 2017 (No.2018-071) published on Juchao Website(http://www.cnin
fo.com.cn)on May 17,2018
The Third provisional shareholders’ General meeting in 2018Provisional shareholders’ General Meeting34.50%June 21,2018June 22,2018The Third provisional shareholders’ General meeting in 2018 (No.2018-081) published on Juchao Website(http://www.cninfo.com.cn)on June 22,2018
The Fourth provisional shareholders’ General meeting in 2018Provisional shareholders’ General Meeting39.64%November 15,2018November 16,2018The Fourth provisional shareholders’ General meeting in 2018 (No.2018-147) published on Juchao Website(http://www.cninfo.com.cn)on November 16,2018

2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore

□ Applicable √Not applicable

V. Responsibility performance of independent directors in report period

1. The attending of independent directors to board meetings and shareholders’ general meeting

The attending of independent directors
Independent Directors本报告期应参加董事会次数现场出席董事会次数以通讯方式参加董事会次数委托出席董事会次数缺席董事会次数是否连续两次未亲自参加董事会会议出席股东大会次数
Tang Jianxin12111001
Zhang Yufeng1229010
Jiang14311002
Chongguang
Niu Hongjun211001
Yu Haichun211001

Notes to failure to personally attend Board Meetings Successively Twice

2.Objection of independent directors on some relevant issues

Objection of independent directors on some relevant issues□ Yes √NoNil

3. Other notes to duty performance of independent directors

Has an independent director’s advice to the Company been accepted√Yes □ NoExplanation on acceptance of or failure to accept an independent director’s advice to the Company.

In accordance with Instruction for Listed Companies on Building an Independent Director System, Guide to Listed Companieson Standardized Operation, Articles of Association, and Working System of Independent Directors among other provisions, theCompany's independent directors held an responsible attitude towards the Company and shareholders herein, faithfully performedtheir duties in due diligence, took the initiative to attend relevant meetings, carefully deliberated all the proposals, objectivelyexpressed their own opinions and viewpoints, and conducted a thorough survey on the Company with effort to understand theCompany's production and operation, personnel management, financial management, and internal control among other informationand implementation of resolutions of the Board of Directors and General Meeting of Shareholders.

In the report period, they delivered independent opinions concerning the Company's financing plans, external guarantees, hiringof an auditing agency, use of funds raised, profit distribution plans, election of the Board of Directors, alteration of promised mattersand related transactions and other matters. They carefully debriefed operation from the management and communicated with certifiedpublic accountants responsible for the annual audit while preparing, examining and disclosing regular reports. By rich specializedknowledge and industrial experience, they played a positive part in improving the Company's supervision mechanism, promoting theBoard of Directors to make scientific decisions and standardize operation, and safeguarding rights and interests of minorityshareholders by offering many reference opinions and valuable suggestions regarding the Company's development strategies,institutional improvement, financial management, and standardized operation among others.

VI. Duty Performance of Special Committees under the Board of Directors in the ReportingPeriod

The board of directors of the Company has special committees including audit committee, remuneration and appraisal committee,strategy committee and nomination committee. According to the scope of authority specified in the working rules for them, thecommittees conducted study and put forward opinions and suggestions for reference by the board of directors for decision making.1.Information about fulfillment of the audit Committee of the Board of Directors duringAudit Committee gave a full play to its supervision and auditing functions. In the report period, it deliberated such matters as theCompany's financial information, internal control, substitution of an accounting firm, and relevant reports on preservation of fundsraised and formed and submitted resolutions to the Board of Directors; while auditing annual financial reports, it meticulouslyreviewed the Company's financial audit reports and delivered audit opinions, communicated with certified public accountants for the

annual audit through a communication meeting and other forms, and urged the progress of the audit work to guarantee the success ofthe annual audit work.2. Fulfillment of Duties of the Compensation and Evaluation Committee of the Board of DirectorsCompensation and Evaluation Committee kept improving the Company's compensation policy and evaluation mechanism and tookthe initiative to promote deepening the management reform. In the report period, the Compensation and Evaluation Committeeconvened meetings, supervised and assessed standards for fulfillment of performance and assessment on directors and seniorexecutives and implementation of the standards, carried out appointment and evaluation procedures for directors and seniorexecutives and examined the annual basic pay of each senior executive.3. Fulfillment of duties of Strategy CommitteeStrategy Committee helped the Company determine development plans, improve investment decision-making procedures, makemore scientific decisions, and improve its management structure by studying and offering advice for the Company's longtermdevelopment strategies and major investment decisions. In the report period, the Strategy Committee convened a total of fivemeetings, deliberating and adopting the Company's proposals regarding foreign investment, financing planning, etc.4.Fulfillment of duties of Nomination Committee of Board of DirectorsNomination Committee devoted itself in due diligence, offering an instruction on improving the leader assessment mechanism andtalent promotion system and enhancing back-up talent reserves among others and keeping studying and following the Company'sneeds for senior executives. In the report period, the Nomination Committee convened meetings to examine qualifications of generalmanager candidates and candidates of the eighth board of senior executives.

VII. Work of the supervisory Committee

Did the supervisory Committee find any risk existing in performing the supervision activities in the reporting period?□Yes √NoThe supervisory Committee has no objection against any matters under supervision in the reporting period

VIII. Assessment and incentive Mechanism for Senior executives

The company established the evaluation system based on the targeted responsibility system and adopted signing the annualresponsibility appraisal agreement for the evaluation of the company’s senior management personnel which specified the KPI andevaluation method with methods related to the evaluation results. During the reporting period, the companies had conformed to themeasures of the targeted responsibility system to assess and evaluate the senior management personnel performances, whichpresented in the annual performance.

IX. Internal control situations

1. Specific situations on major defects of internal control discovered during report period

√Yes □ No

Details of major defects of internal control discovered during the reporting period
1. Income cost accounting is not standardized. The company’s claim for a project in Cambodia was US$ 1.13 million (equivalent to approximately RMB 7 million), which was confirmed in writing by Party A in 2018, but the company confirmed the income in 2017. According to the company's accounting policy, the 7 million yuan income is confirmed to have an intertemporal situation. 2. Insider information registration management is not standardized. The company made a memorandum of progress on major events in the planning of major asset placements in 2018, but none of the participants in the memorandum and the notified

2. Self-evaluation report on internal control

Disclosure date of appraisal report on internal controlApril 30,2019
Disclosure index of appraisal report on internal controlJuchao Website:(http://www.cninfo.com.cn), Selfevaluation report of internal control in 2018 on April 30,2019
Proportion of total unit assets covered by appraisal in the total assets of the consolidated financial statements of the company100.00%
Proportion of total unit incomes covered by appraisal in the total business incomes of the consolidated financial statements of the company100.00%
Standards of Defects Evaluation
CategoryFinancial ReportNon-financial Report
StandardMaterial Defect: 1.Fraud of directors, supervisors and senior management; 2.Material errors appear in the Company’s financial report published; 3. The certified public auditor finds material wrong reporting in the current financial statement, while the Company has not found such reporting during its operation;4. The audit committee and audit department of the Company exercise invalid supervision upon internal control; 5.The result of internal control assessment hasn’t been rectified, especially the material or major defects; 6.Important business is lack of system control or the system loses its validity. Major Defects:1. No recognized accounting standards were followed when choosing and applying the accounting policies; 2.No anti-fraud program and control measures were established; 3.No corresponding control mechanism was established or implemented for treating theMaterial Defect: 1.Violation of national laws or regulations, normative documents and significant decision making lacking scientific and system may lead to invalid system, no rectification for material or major defect or other situations that materially affect the Company; 2. Violation of regulations led to punishment from government department or regulatory authority. Violation of management system or internal control procedure led to major business disputes. Ranges of material litigation led to great losses;3.The working initiatives of staffs was damaged at a great level, and the working efficiency was substantially decreased, which exerted major adverse effects on the culture and cohesion of the enterprise, and led to serious turnover of core teams;4.Negative news spreads in the whole business scope( including the extension to industry chain ), or is concerned by national medias or public
abnormal or special accounting, and it is lack of compensating control;4.One or more frauds appeared during the financial report process, and which couldn’t reasonably guarantee that the formulated financial report would reach the goals of being actual and accurate. General Defect: Other defects besides material defect and major defect.ones, which will substantially damage the enterprise’s reputation, and the negative effects can’t be eliminated all the time;5.The Company involved punishment from CSRC and involved warnings from stock exchange.
Standards of Quantitation(1) Material Defect: amount with wrong reporting ≧ 10% of total profit amount; amount with wrong reporting ≧ 10% of operating income; amount with wrong reporting≧ 10% of total asset; amount with wrong reporting≧10% of net assets;(2) Major Defect: 5% of total profit amount≦amount with wrong reporting﹤10% of total profit amount; 5% of operating income≦amount with wrong reporting﹤10% of operating income ;5% of total asset≦amount with wrong reporting﹤10% of total asset;5% of net assets ≦amount with wrong reporting﹤10% of net assets;(3) General Defect: amount with wrong reporting﹤5% of operating income. amount with wrong﹤5% of total asset; amount with wrong reporting﹤5% of net assets.Material Defect: Due to the internal control defect of non-financial report, it may exert impacts of over RMB 10 million(including RMB10 million ) on the total profit amount.Major Defect: Due to the internal control defect of non-financial report, it may exert impacts of over RMB 5 million (including 5 million but less than 10 million) on the total profit amount. General Defect:Due to the internal control defect of non-financial report, it may exert impacts of below RMB 5 million.
Number of major defects in financial reporting(a)9
Number of major defects in non financial reporting (a)1
Number of important defects in financial reporting(a)0
Number of important defects in non financial reporting(a)0

X. Internal Control audit report

√ Applicable □Not applicable

Review opinions in the internal control audit report
Reanda Certified Public Accountants (LLP) conducted an audit of the effectiveness of internal control over the Company’s
financial statements as of December 31, 2018, and issued the Reanda 's No. 2334-[2019] Internal Control Audit Report, with issuance of the following opinion: We consider that due to the above-mentioned material deficiency and its impact on the achievement of the control objectives, Sino Great Wall failed to remain effective in all major aspects in the Internal control of financial reporting in accordance with the Basic Rules for Internal Control of Enterprises and the related regulations on December 31, 2018.
Disclosure of internal audit reportDisclosure
Disclosure date of audit report of internal control (full-text)April 30,2019
Disclosure index of audit report of internal control (full-text)(www.cninfo.com.cn)
Internal audit report’s opinionNegative opinions
Non-financial reporting the existence of significant deficienciesYes

Has the CPAs issued a qualified auditor’s report of internal control .√Yes □NoStatement of internal control audit report issued by accounting firm with non-standard opinionsIn this internal control audit, Reanda Certified Public Accountants (LLP) notices the following significant defects in the internalcontrol of the Company's financial reporting:

1. The accounting of income and cost is not standardized. Of the Company's revenue claimed in relation to a project in Cambodia,USD 1.13 million (equivalent to approximately RMB 7 million) was confirmed in writing by Party A in 2018, but the Companyrecognized the revenue in 2017. According to the accounting policies of the Company, the revenue of RMB 7 million is recognizedas intertemporal.2. Inventory management is not standardized. The management of raw materials is lack of improved system and standard. The rawmaterials purchased by the Company for project construction, such as steel, are only accessible in the material purchase andwarehousing management process. The materials purchased and warehoused are directly included in the construction cost of theconstruction project of the Company. The actual cost of the issued inventory is not determined by the first-in first-out method,weighted average method or individual valuation method in accordance with the relevant provisions of Accounting Standards forBusiness Enterprises No. 1 - Inventory. It is impossible to accurately measure the quantity and amount of raw materials collected forthe current project and those of raw materials at the end of the period.3. The insider registration management of insider information is not standardized. A memorandum of major events progress wasprepared in preparation for major assets acquisition in 2018, but none of the participants and insiders indicated in the memorandumsigned the memorandum for confirmation. It violates the provisions of Article 6 and Article 10 of the Provisions on ListedCompanies Establishing Insider Registration Management System of Insider Information.4. The management of raised funds is not standardized.(1) The excessive use of the raised funds has not been corrected and disclosed in a timely manner. At the 35th session of the seventhmeeting of the Board of Directors and the 23rd session of the seventh meeting of the Board of Supervisors of the Company, theProposal on Temporary Replenishment of Circulating Fund with Part of Idle Raised Funds was considered and adopted, and theCompany was allowed to temporarily supplement circulating funds with idle raised funds of RMB 139 million. Upon inspection, theraised funds account of the Company was deducted by more than RMB 5.1 million by the court on October 25, 2018, resulting in thetotal amount actually used by the Company to supplement circulating funds exceeding the approved amount RMB 327,300 tosupplement circulating funds. (2) The management system of raised funds is not sound. The Company's Management System for Useof Raised Funds does not involve the responsibility assigning mechanism for the illegal use of raised funds, and the provisions on the

hierarchical approval authority, decision-making procedures and risk control measures for the use of raised funds are not clear, whichdoes not conform to Article 3 of Guidelines for Supervision of Listed Companies No. 2 -Supervision Requirements for theManagement and Use of Raised Funds of Listed Companies.5. The assets of the Company and equity of subsidiaries are disposed without approval.On December 14, 2017, Sino Great Wall International Engineering Co., Ltd. (International Engineering Company), wholly-ownedsubsidiary of the Company, entered into a Non-recourse Domestic Factoring Contract with Shenzhen Qianhai Shihong CommercialFactoring Co., Ltd. to handle non-recourse factoring business on the accounts receivable of International Engineering Company.Pursuant to the Articles of Association, handling the factoring business falls within the decision-making authority of the Board ofDirectors of the Company. When the Company handles the factoring business, it has not been reviewed and approved by the Board ofDirectors of the Company. (2) On November 20, 2018, the General Manager of the Company made the decision to transfer 60%equity (accounting for 100% of the Company holding its shares) of Sino Great Wall Jianye Engineering Co., Ltd. (hereinafterreferred to as Sino Great Wall Jianye Engineering) at the office meeting. On November 27, 2018, the Company entered into an equitytransfer agreement with the counterparty. According to the Articles of Association (Article 112 Where the transactions of theCompany fall into any of the following circumstances, the Board of Directors shall review and approve them: . (2) The operatingincome related to the transaction object in the latest fiscal year accounts for more than 10% of the audited operating income of theCompany in the latest fiscal year, and the absolute amount exceeds RMB 10 million;).6. Funds management is not standardized.(1) The financial assistance is provided externally without approval. From 2016 to 2017, Sino Great Wall International EngineeringCo., Ltd., wholly-owned subsidiary of the Company, engaged in many loans entrusted payment business with Beijing AnlulaisenBuilding Materials Co., Ltd., Beijing Hongda Guangfa Construction Labor Service Co., Ltd. and Beijing Puya ArchitecturalDecoration Engineering Co., Ltd. The above matters have not been approved by the Board of Directors of the Company. TheCompany held the sixth session of the eighth meeting of the Board of Directors on April 12, 2019, at which the Proposal onSupplementary Consideration of Providing External Financial Assistance was considered and adopted. (2) Financing business ishandled without approval. In 2018, the Company conducted financing to financial institutions, non-financial institutions andindividuals without going through the normal approval process of the Company. (3) The control over some bank deposits is lost.During the examination of bank deposits and capital flow at the end of the period, it was found that the Company was unable toprovide bank deposit balances on the balance sheet date of some bank accounts and bank statements during the audit, and failed toimplement effective control over some bank deposits to ensure the safety of funds. (4) Fund raising problems. Under thecircumstance that the Company is short of funds, many loans are overdue and cause litigation, there are still large amounts ofnon-operating receivables and payables outstanding. For example, as of the balance sheet date, the Company shall receive RMB332,026,600 from Longyan Hengda Engineering Co., Ltd. and RMB 158,129,600 from Wuhan Jiutai Weiye Steel Co., Ltd.7. The tax management is not standardized.On December 7, 2018, the Second Taxation Office of Beijing Tongzhou District Taxation Bureau of the State TaxationAdministration shall issue the Notice on Tax Matters (JTEST [2018] No.13) to Sino Great Wall International Engineering Co., Ltd.,subsidiary of the Company. According to the self-inspection of the Company, Sino Great Wall International Engineering Co., Ltd.,subsidiary of the Company, obtained those listing the expenditures into construction cost of RMB 42.9313 million as a suspect inwriting false VAT ordinary invoices, intelligence VAT ordinary invoices of other provinces and out-of-control VAT special invoices,thus the taxable income shall be increased by RMB 6.4397 million. The tax management of the Company is not standardized, and theinvoice management and other tax management systems are lacked, resulting in listing the expenditures into the construction cost ofthe project in violation of regulations.8. Project management is out of control. As a result of the company's reasons, the Kuwait Military Academy, the Cambodian OilRefinery and other projects of Sino International Engineering Co., Ltd., subsidiary of the Company, have been halted, and theNewport Project in Qatar, the Kuwait Ministry of Finance Building Project and other projects have been stalled. The Company haslost control over the above mentioned projects. In the process of auditing the above overseas projects of the Company, we failed to

obtain satisfactory audit evidence through confirmation, interview and other procedures. We are unable to implement further auditprocedures or substitute audit procedures to obtain adequate and appropriate audit evidence due to the failure of the Company toprovide complete external information.9. Guarantee is provided externally without approval. According to Article 5, Chapter I of the Management System for ExternalGuarantee of the Company, "the Company shall not provide external guarantee without the consideration and approval of the generalmeeting of stockholders or the Board of Directors". On April 18, 2018, the Company (Party B, obligor to balance supplement) signeda balance supplement agreement with the Zhongyuan Trust (Party A, creditor) and Sino Great Wall (Fugou) High-speed RailwayArea Investment Co., Ltd. (Party C, debtor). Article 2.2 of the Agreement stipulates that "Where Party C fails to repay any amount orinstallment of funds payable (including but not limited to the principal of the loan, interest, compound interest, penalty interest,liquidated damages, compensation, fund possession cost, creditor's rights realization fee, etc.) on time for any reason in accordancewith the Trust Loan Contract (Main Contract), Party A shall have the right to send written notice to Party B to require Party B tofulfill the obligation to balance supplement. Balance supplement amount = principal and interest of Party A's principal creditor'srights and other receivables of Party A - principal and interest of principal creditor's rights actually received by Party A and otherreceivables of Party A." The above balance supplement agreement fails to go through the examination and approval procedures inaccordance with the relevant provisions of the Company. 10. In 2018, the Company was involved in a number of cases and disputes.For this kind of litigation cases, the Company has not established a litigation affair management system, and has failed to manage theinformation related to litigation timely and effectively in the case of receiving multiple litigation cases.Effective internal control can provide reasonable assurance for the truthfulness and completeness of financial reports and relatedinformation, while the above-mentioned major defects make the internal control of Sino Great Wall lose this function.The above-mentioned major defects have been included in the enterprise internal control evaluation report. In 2018 financialstatement auditing of Sino Great Wall, we have considered the impact of above-mentioned major defects on the nature, time andscope of the audit process.

In this internal control audit, Reanda Certified Public Accountants (Special General Partnership) noted that the company'snon-financial reporting internal controls have the following major deficiencies:

1. In 2018, the Great Wall of China involved more disputes. In response to such litigation cases, the company has not established alitigation management system, and has not timely and effectively managed information related to litigation in the case of receivingmultiple litigation cases. Due to the above-mentioned major defects, we remind users of this report to pay attention to the risksinvolved. It should be pointed out that we do not express opinions or provide guarantees on the internal control of non-financialreporting of the Great Wall of China. This paragraph does not affect the audit opinion issued on the effectiveness of internal controlover financial reporting.Does the internal control audit report issued by the CPAs agree with the self-assessment report of the Board of Directors√Yes □No

X. Specifications on Company Securities

Whether the company has any corporate bonds that are publicly issued and listed on the stock exchange, and that are not due or notfully repaid on the date of approval of the annual reportNo

XI. Financial Statements

1. Audit report

Types of Audit OpinionsDisclaimer of Opinion
Signature DateApril 28, 2019
AuditorReanda Certified Public Accountants (special general partnership)
Report No.Reanda SZ [2019] No. 2333
Chinese Certified Public Accountant:Wang Xinyu and Zhou Zhonghua

Audit Report

Audit report

Reanda SZ [2019] No. 2333

To all shareholders of Sino Great Wall Co., Ltd.:

I. OpinionsWe have audited the financial statements of Sino Great Wall Co., Ltd (hereinafter referred to as“Sino Great Wall”), including the consolidated and parent company’s balance sheet as of December 31,2018, the consolidated and parent company’s income statement, the consolidated and parent company’scash flow statement, the consolidated and parent company’s statement of changes in shareholder’s equityand the notes to financial statements of Year 2018.

We won’t express any opinions on the attached financial statements of Sino Great Wall. Due to thematters described in the section “Basis for Disclaimer of Opinion”, we are unable to obtain sufficient andappropriate audit evidence on which to base the opinion on the financial statements.

II Basis for Disclaimer of Opinion

1. Internal control failure

During our review of the rationality behind and effectiveness of the internal control design related tothe financial statements of Sino Great Wall on December 31, 2018, we found that many internal controlfailures have had a significant and extensive impact on the financial statements. (More details in InternalControl Audit Report, Reanda SZ [2019] No. 2333) We performed the audit based on sampling. Therefore,in the case of invalid internal control, no sufficient and appropriate audit evidence could be obtainedthrough this procedure to serve as the basis for an audit opinion.

2. Limited scope of audit

①As of the audit report date, the Company has not obtained sufficient confirmation letters to itsbank deposits, accounts receivable, other receivables, prepayments, long-term and short-term loans,

accounts payable, advance receipts, other payables, and notes payable and the confirmed amount is small.Besides, there is no alternative audit procedures to obtain sufficient and appropriate audit evidence toverify the authenticity and accuracy of the deposits and payments mentioned above.

② During the audit of the Company’s important engineering projects, procedures such asconfirmation in writing and interviews, failed to yield satisfactory audit evidence. Due to the Company’sfailure to provide complete external information, we are unable to further implement audit procedures oralternative procedures to obtain sufficient and appropriate audit evidence for the revenue and cost of theprojects.

Sino Great Wall launched a non-recourse factoring business with Dagang Financial Leasing(Shanghai) Co., Ltd. in June 2016. In December 2017, it launched another non-recourse factoringbusiness with Shihong Factoring Co., Ltd. As of the end of 2018, the Company received 140.954 millionRMB and 91.153 million RMB respectively from the original debtors, which were not transferred to thefactoring parties. We couldn’t obtain satisfactory audit evidence during our verification of this transactionand are unable to determine the nature of the transaction and its impact on the company’s financialstatements.

3. Failure to project the impact of project suspension, law suit and claim for damages

Many of the Company’s projects were suspended during construction, its major bank accounts werefrozen, employees dismissed, and some project related guarantees were claimed. A large amount of debtswas overdue and involved in litigation. Completed projects with unsettled inventory and investmentexpenses may have the risk of impairment, and the accounts receivable confirmed by the project mayhave bad debt risk. The guarantee may result in claim for loss, and the litigation may result in loss fromlawsuit. Due to the largely uncertain impact of matters mentioned above, we are unable to evaluate theCompany's judgment on the them.

4. Significant uncertainties in continued operations

In 2018, the Company’s major bank accounts were frozen with overdue debts, many of which areinvolved in litigation. Projects under construction were suspended and employees were dismissed withoverdue salaries. The Company is faced with fund shortage to sustain its operation and its financial statusis worsening, resulting in huge amount of loss in 2018. The above situation indicates that there issignificant uncertainty in the Company’s ability to continue its operations. We are unable to determinewhether it is appropriate for Sino Great Wall to apply the continued operations assumption to prepare the2018 financial statements.

5. Investigation of China Securities Regulatory Commission

The Company received the Notification of Investigation (No. JDCZ19041) from China SecuritiesRegulatory Commission, which decided to investigate the Company in accordance with Securities Law ofthe People's Republic of China on suspicion of law-breaking operations. As of the issue date of thefinancial statements, the investigation had not come to any conclusion.

III The Management and Governance Team’s Responsibilities for the Financial Statements

The management of the Company (hereinafter referred to as “the Management”) shall be responsiblefor compiling financial statements in accordance with the Accounting Standards for Business Enterprisesfor the true and fair presentation as well as designing, executing and protecting the internal control relatedto the compilation of financial statements so as to make the financial statements be free from any seriousmisstatement caused by frauds and errors.

In the preparation of the financial statements, the management is responsible for assessing thecontinued operation ability of Sino Great Wall, disclosing the matters related to continued operations (ifapplicable), and applying the continued operations assumption unless it is planned to liquidate, terminate

operations or make other necessary realistic choice.

The governance team is responsible for overseeing the financial reporting process of Sino GreatWall.

IV CPA’s Responsibility for Auditing Financial Statements

Our responsibility is to conduct our audit in accordance with Chinese CPA Standards on Auditingand present an audit report. Due to the matters described in the section “Basis for Disclaimer of Opinion”,we are unable to obtain sufficient appropriate audit evidence on which to base the opinion on the financialstatements.

According to the Code of Ethics for Chinese Certified Public Accountants, we are independent ofSino Great Wall and perform other duties in terms of professional ethics.

Reanda Certified Public Accountants (special general partnership)Chinese Certified Public Accountant: (Engagement Partner):
Beijing · ChinaChinese Certified Public Accountant:
April 28, 2019

II. Financial Statements

Unit in the financial statements: RMB

1. Consolidated Balance Sheet

Prepared by: Sino Great Wall Co., Ltd.

Unit: Yuan

ItemEnding balanceOpening balance
Current assets
Monetary resources658,714,886.481,604,973,916.12
Deposit reservation for balance
Funds lent
Financial assets measured with fair value and having the change of fair value recorded in the gain or loss of current
period
Derivative financial assets
Notes receivable and accounts receivable4,204,113,048.245,994,876,806.96
Including: notes receivable1,518,790.00288,201,562.88
Accounts receivable4,202,594,258.245,706,675,244.08
Advance payment220,261,619.13225,208,527.88
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserves receivable
Other accounts receivable2,186,223,361.401,674,675,360.28
Including: accrued interest receivable
Dividends receivable
Redemptory monetary capital for sale
Inventories717,531,578.23556,839,325.50
Assets held for sale105,075,792.00
Non-current assets coming due within one year
Other current assets5,795,797.4417,126,911.05
Total current assets8,097,716,082.9210,073,700,847.79
Non-current assets:
Disbursement of advances and loans
Available-for-sale financial assets10,338,500.0010,338,500.00
Held-to-maturity investments
Long-term accounts receivable16,708,613.1914,328,557.82
Long-term equity investments106,837,810.83
Investment real estate
Fixed assets158,746,947.91174,537,150.56
Construction in progress36,697,284.044,968,590.96
Capitalized biological assets
Oil and gas assets
Intangible assets99,921,251.67127,524,445.00
Development costs
Goodwill27,268,234.5364,494,271.55
Long-term deferred expenses6,727,688.9010,124,913.15
Deferred income tax assets117,983,727.91118,233,337.36
Other non-current assets924,509,792.991,069,594,572.11
Total non-current assets1,505,739,851.971,594,144,338.51
Total assets9,603,455,934.8911,667,845,186.30
Current liabilities:
Short-term loans2,862,584,629.013,477,200,420.55
Borrowings from the central bank
Absorption of deposits and interbank deposit
Loans from banks and other financial institutions
Financial liabilities measured with fair value and having the change of fair value recorded in the gain or loss of current period
Derivative financial liabilities
Notes payable and accounts payable1,926,243,130.152,626,177,075.77
Advances from customers478,101,743.92146,379,852.67
Financial assets sold under repurchase agreements
Handling charges and commissions payable
Employee compensation payable86,414,858.8621,911,542.07
Taxes and surcharges payable393,957,887.52357,445,477.71
Other accounts payable2,212,412,970.43537,070,684.98
Including: interest payable280,806,670.4916,105,263.85
Dividends payable8,541,818.64
Reinsurance accounts payable
Reserves for insurance contracts
Receivings from vicariously traded securities
Receivings from vicariously sold securities
Liabilities held for sale
Non-current liabilities coming due within one year975,719,981.55820,422,471.45
Other current liabilities121,529,600.95
Total current liabilities8,935,435,201.448,108,137,126.15
Non-current liabilities:
Long-term loans120,000,000.00843,092,471.02
Bonds payable254,801,342.47345,000,000.00
Including: preferred stock
Perpetual debts
Long-term accounts payable322,990.3581,945,567.86
Long-term employee compensation payable
Estimated liabilities2,958,723.153,414,189.15
Deferred income
Deferred income tax liabilities24,369,456.1826,088,961.71
Other non-current liabilities
Total non-current liabilities402,452,512.151,299,541,189.74
Total liabilities9,337,887,713.599,407,678,315.89
Total owners’ equity:
Capital stock1,698,245,011.001,698,245,011.00
Other equity instruments
Including: preferred stock
Perpetual debts
Capital reserve-1,298,846,540.07-1,299,349,701.74
Less: treasury stock
Other comprehensive income-50,380.95858,242.13
Special reserve21,026,082.43164,231,078.18
Surplus reserve84,394,441.2384,394,441.23
General risk reserves
Undistributed profits-269,566,140.131,503,103,396.72
Total equity attributable to owners of Parent Company235,202,473.512,151,482,467.52
Minority equity30,365,747.79108,684,402.89
Total owners’ equity265,568,221.302,260,166,870.41
Total liabilities and owners’ equity9,603,455,934.8911,667,845,186.30

Legal Representative: Chen LueAccounting Principal: Yang ChunlingHead of the Accounting Department: Yang Chunling

2. Balance Sheet of Parent Company

Unit: Yuan

ItemEnding balanceOpening balance
Current assets
Monetary resources46,778,625.47407,959,304.60
Financial assets measured with fair value and having the change of fair value recorded in the gain or loss of current period
Derivative financial assets
Notes receivable and accounts receivable
Including: notes receivable
Accounts receivable
Advance payment3,865,500.01
Other accounts receivable2,986,852,664.143,690,967,483.22
Including: accrued interest receivable
Dividends receivable100,000,000.00100,000,000.00
Inventories
Assets held for sale
Non-current assets coming due within one year
Other current assets2,604,075.382,175,646.45
Total current assets3,036,235,364.994,104,967,934.28
Non-current assets:
Available-for-sale financial assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments3,323,211,536.663,311,211,536.66
Investment real estate
Fixed assets36,371.1252,246.48
Construction in progress
Capitalized biological assets
Oil and gas assets
Intangible assets
Development costs
Goodwill
Long-term deferred expenses1,074,666.67168,284.84
Deferred income tax assets
Other non-current assets728,328,020.00550,524,570.00
Total non-current assets4,052,650,594.453,861,956,637.98
Total assets7,088,885,959.447,966,924,572.26
Current liabilities:
Short-term loans2,189,866,602.212,287,870,000.00
Financial liabilities measured with fair value and having the change of fair value recorded in the gain or loss of current period
Derivative financial liabilities
Notes payable and accounts payable95,000,000.00537,227,578.11
Advances from customers
Employee compensation payable15,016,143.391,580,335.12
Taxes and surcharges payable97,149,029.1097,124,633.81
Other accounts payable1,347,473,661.05392,422,663.75
Including: interest payable243,458,030.1513,002,236.21
Dividends payable8,541,818.64
Liabilities held for sale
Non-current liabilities coming due within one year866,250,000.00700,000,000.00
Other current liabilities
Total current liabilities4,610,755,435.754,016,225,210.79
Non-current liabilities:
Long-term loans800,000,000.00
Bonds payable100,000,000.00
Including: preferred stock
Perpetual debts
Long-term accounts payable
Long-term employee compensation payable
Estimated liabilities
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities900,000,000.00
Total liabilities4,610,755,435.754,916,225,210.79
Total owners’ equity:
Capital stock1,698,245,011.001,698,245,011.00
Other equity instruments
Including: preferred stock
Perpetual debts
Capital reserve1,237,956,472.371,237,956,472.37
Less: treasury stock
Other comprehensive income
Special reserve
Surplus reserve26,309,287.0026,309,287.00
Undistributed profits-484,380,246.6888,188,591.10
Total owners’ equity2,478,130,523.693,050,699,361.47
Total liabilities and owners’ equity7,088,885,959.447,966,924,572.26

3. Consolidated Income Statement

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period
I. Gross operating income2,426,987,687.026,497,124,980.52
Including: operating income2,426,987,687.026,497,124,980.52
Interest income
Insurance premiums earned
Handling charges and commission income
II. Gross operating cost3,906,818,404.185,990,935,078.96
Including: operating cost2,449,500,634.874,886,354,499.66
Interest expenditure
Handling charges and commission expenditure
Surrender value
Net payments for insurance claims
Net provision insurance contracts
Expenditures dividend policy
Reinsurance expenses
Taxes and surcharges4,790,660.574,533,005.61
Selling expenses28,300,802.4232,213,247.97
Management expenses311,698,800.53312,957,207.20
R&D expenses
Financial expenses606,015,536.23432,590,607.55
Including: interest expenses295,397,174.36
Interest income15,353,873.68
Asset impairment loss506,511,969.56322,286,510.97
Plus: Other incomes52,040.482,211,128.89
Investment income (Losses are marked with a “-”)30,219,918.01-387,601.37
Including: Income from investment in jointly-run enterprises and joint ventures
Profits from changes in fair value (Losses are marked with a “-”)
Exchange earning (Losses are marked with a “-”)0.00
Proceeds from asset disposal (Losses are marked with a “-”)-150,250.00
III. Operating profit (Losses are marked with a “-”)-1,449,558,758.67507,863,179.08
Plus: Non-Operating Income128,699,835.85156,426.78
Less: Non-Operating Expenditure395,623,593.98-3,030,152.73
IV: Total profit (Losses are marked with a “-”)-1,716,482,516.80511,049,758.59
Less: Expense of income tax3,281,922.60127,003,731.76
V. Net profit (Losses are marked with a “-”)-1,719,764,439.40384,046,026.83
(I) Net profits from continued operations (Losses are marked with a “-”)
(II) Net profits from discontinued operations (Losses are marked with a “-”)
Net profit attributed to the parent company’s owners-1,704,739,736.40380,090,990.82
Profit and loss of minority shareholders-15,024,703.003,955,036.01
VI. Net of tax for other comprehensive income-908,623.08858,242.13
Net of tax for comprehensive income attributed to the parent company’s owners-908,623.08858,242.13
(I) Other comprehensive income that cannot be reclassified into profit or loss
1. Remeasure the change in the defined benefit plan
2. Other comprehensive income that cannot be transferred with equity method
(II) Other comprehensive income to be reclassified into profit or loss-908,623.08858,242.13
1. Other comprehensive income that can be transferred with equity method
2. Gains and losses from changes in fair value of available-for-sale financial assets
3. Held-to-maturity investment reclassified as gains and losses on available-for-sale financial assets
4. Effective portion of cash flow hedge gains and losses
5. Balance from conversion of foreign-currency financial statements-908,623.08858,242.13
6. Others
VI. Net of tax for other comprehensive income attributed to minority stockholders
VII. Total amount of composite benefits-1,720,673,062.48384,904,268.96
Total amount of composite benefits attributed to the parent company’s owners-1,705,648,359.48380,949,232.95
Total amount of composite benefits attributed to minority stockholders-15,024,703.003,955,036.01
VIII. Earnings per share
(I) Basic earnings per share-1.0040.220
(II) Diluted earnings per share-1.0040.220

f the enterprise is merged under the same control in the current period, the net profit realized by the merged party before the merger shall beRMB , and the net profit realized by the merged party in the last period shall be RMBLegal Representative: Chen LueAccounting Principal: Yang ChunlingHead of the Accounting Department: Yang Chunling

4. Parent company’s income statement

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period
I. Operating income197,962.06240,558.55
Less: operating cost0.001,482.50
Taxes and surcharges232,339.11486,860.22
Selling expenses1,041,800.14793,644.62
Management expenses46,082,221.3748,845,134.77
R&D expenses
Financial expenses439,946,225.0194,901,413.49
Including: interest expenses
Interest income
Asset impairment loss14,901,696.517,489,577.66
Plus: Other incomes7,211.91
Investment income (Losses are marked with a “-”)100,000,000.00
Including: Income from investment in jointly-run enterprises and joint ventures
Profits from changes in fair value (Losses are marked with a “-”)
Proceeds from asset disposal (Losses are marked with a “-”)
II. Operating profit (Losses are marked with a “-”)-502,006,320.08-52,270,342.80
Plus: Non-Operating Income100,000,000.000.01
Less: Non-Operating Expenditure102,632,717.26
III: Total profit (Losses are marked with a “-”)-504,639,037.34-52,270,342.79
Less: Expense of income tax
IV. Net profit (Losses are marked with a “-”)-504,639,037.34-52,270,342.79
(I) Net profits from continued operations (Losses are marked with a “-”)
(II) Net profits from discontinued operations (Losses are marked with a “-”)
V. Net of tax for other comprehensive income
(I) Other comprehensive income that cannot be reclassified into profit or loss
1. Remeasure the change in the defined benefit plan
2. Other comprehensive income that cannot be transferred
with equity method
(II) Other comprehensive income to be reclassified into profit or loss
1. Other comprehensive income that can be transferred with equity method
2. Gains and losses from changes in fair value of available-for-sale financial assets
3. Held-to-maturity investment reclassified as gains and losses on available-for-sale financial assets
4. Effective portion of cash flow hedge gains and losses
5. Balance from conversion of foreign-currency financial statements
6. Others
VI. Total amount of composite benefits-504,639,037.34-52,270,342.79
VII. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share

5. Consolidated Statements of Cash Flows

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period
I. Cash flow from operating activities
Cash received from sales of goods and rending of services3,468,136,123.204,642,883,579.49
Net increase in customer deposits and interbank deposits
Net increase for borrowing from the central bank
Net increase in placements from other financial institutions
Cash premiums received on
original insurance contracts
Cash received from re-insurance business
Net increase in deposits and investments from insurers
Net increase for disposals of financial assets measured as fair value and the variation included in current profit and loss
Interest, handling charges and commissions received
Net increase in placements from financial institutions
Net increase in repurchasing business capital
Receipts of tax refunds3,982,148.2011,520,458.96
Other cash received relating to operating activities4,934,012,815.866,134,642,883.34
Sub-total of cash inflows from operating activities8,406,131,087.2610,789,046,921.79
Cash payments for goods purchased and services received2,715,043,669.325,007,872,564.26
Net increase in loans and advances to customers
Net increase in deposits with the central bank and other financial institutions
Payments of claims for original insurance contracts
Interest, handling charges and commissions paid
Commissions on insurance policies paid
Cash payments to and on behalf of employees262,092,659.22380,713,969.98
Payments of all types of taxes72,091,894.26212,006,262.08
Other cash payments relating to operating activities4,529,023,809.016,970,322,744.12
Sub-total of cash outflows from operating activities7,578,252,031.8112,570,915,540.44
Net cash flows from operating activities827,879,055.45-1,781,868,618.65
II. Cash flows from investing activities
Cash received from disposals and withdrawals of investment2,000,000.00
Cash received from returns on investments
Net cash received from disposals of fixed assets, intangible assets and other long-term assets424,000.0085,000.00
Net cash received from disposals of subsidiaries and other business units3,400,000.00
Other cash payments relating to investing activities
Sub-total of cash inflows from investing activities3,824,000.002,085,000.00
Cash payments to acquire and construct fixed assets, intangible assets and other long-term assets9,496,541.0348,204,408.85
Cash payments to acquire investments182,993,849.80840,948,723.77
Net increase in secured loans
Net cash payments for acquisitions of subsidiaries and other business units2,340,123.50
Other cash payments relating to investing activities2,990,381.41131,500,000.00
Sub-total of cash outflows from investing activities195,480,772.241,022,993,256.12
Net cash flows from investing activities-191,656,772.24-1,020,908,256.12
III. Cash flows from financing activities
Cash received from investors12,490,000.0030,240,000.00
Including: Cash received from minority shareholders
Cash received from borrowings1,414,923,533.714,537,777,192.35
Proceeds from issuance of bonds344,800,000.00
Other cash received relating to financing activities54,209,648.35179,327,200.00
Sub-total of cash inflows from financing activities1,481,623,182.065,092,144,392.35
Cash repayments of amounts borrowed2,438,563,678.821,998,607,849.12
Cash payments for distribution of dividends or profits, or cash payments for interest expenses177,477,175.65332,584,990.54
Including: Subsidiary companies’ payment to minority shareholders for distribution of dividends or profit
Other cash payments relating to financing activities22,512,800.03233,071,283.83
Sub-total of cash outflows from financing activities2,638,553,654.502,564,264,123.49
Net cash flows from financing activities-1,156,930,472.442,527,880,268.86
IV. Effect of foreign exchange rate changes on cash and cash equivalents-746,604.37-21,586,126.02
V. Net increase in cash and cash equivalents-521,454,793.60-296,482,731.93
Plus: Cash and cash equivalents at the beginning of period647,222,590.48943,705,322.41
VI. Cash and cash equivalents at the end of period125,767,796.88647,222,590.48

6. Consolidated Statements of Cash Flows of the Parent Company

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period
I. Cash flow from operating activities
Cash received from sales of goods and rending of services265,320.00
Receipts of tax refunds
Other cash received relating to operating activities3,916,915,819.934,283,071,598.59
Sub-total of cash inflows from3,916,915,819.934,283,336,918.59
operating activities
Cash payments for goods purchased and services received
Cash payments to and on behalf of employees494,240.89
Payments of all types of taxes234,343.88396,447.37
Other cash payments relating to operating activities2,670,055,342.905,546,418,464.78
Sub-total of cash outflows from operating activities2,670,289,686.785,547,309,153.04
Net cash flows from operating activities1,246,626,133.15-1,263,972,234.45
II. Cash flows from investing activities
Cash received from disposals and withdrawals of investment
Cash received from returns on investments
Net cash received from disposals of fixed assets, intangible assets and other long-term assets
Net cash received from disposals of subsidiaries and other business units
Other cash payments relating to investing activities
Sub-total of cash inflows from investing activities
Cash payments to acquire and construct fixed assets, intangible assets and other long-term assets65,440.00
Cash payments to acquire investments160,000,000.00696,324,570.00
Net cash payments for acquisitions of subsidiaries and other business units
Other cash payments relating to investing activities
Sub-total of cash outflows from investing activities160,000,000.00696,390,010.00
Net cash flows from investing activities-160,000,000.00-696,390,010.00
III. Cash flows from financing activities
Cash received from investors
Cash received from borrowings840,650,000.003,085,070,000.00
Proceeds from issuance of bonds99,800,000.00
Other cash received relating to financing activities
Sub-total of cash inflows from financing activities840,650,000.003,184,870,000.00
Cash repayments of amounts borrowed1,902,673,705.66980,200,000.00
Cash payments for distribution of dividends or profits, or cash payments for interest expenses100,441,437.45282,451,200.03
Other cash payments relating to financing activities31,000,000.00
Sub-total of cash outflows from financing activities2,003,115,143.111,293,651,200.03
Net cash flows from financing activities-1,162,465,143.111,891,218,799.97
IV. Effect of foreign exchange rate changes on cash and cash equivalents
V. Net increase in cash and cash equivalents-75,839,009.96-69,143,444.48
Plus: Cash and cash equivalents at beginning of period99,547,899.86168,691,344.34
VI. Cash and cash equivalents at end of period23,708,889.9099,547,899.86

7. Consolidated Statement of Changes in Owners’ Equity

Amount of the current period

Unit: Yuan

ItemCurrent period
Equity attributable to owners of Parent CompanyMinority equitTotal owners’
CapitalOther equity instrumentsCapitalCapitalOther equitCapitalCapitalOther equitCapital
stockPreferred stockPerpetual debtsOthersreservestocky instrumentsreservestocky instrumentsreservey Capital stockequity Other equity instruments
I. Balance at the end of the last year1,698,245,011.00-1,299,349,701.74858,242.13164,231,078.1884,394,441.231,503,103,396.71108,684,402.892,260,166,870.40
Plus: adjustments for changes in accounting policies
Correction of accounting errors in prior periods
Business combination under common control
Others
II. Balance at the beginning of the year1,698,245,011.00-1,299,349,701.74858,242.13164,231,078.1884,394,441.231,503,103,396.71108,684,402.892,260,166,870.40
III. Increases/decreases in the current period (“-” for decreases)503,161.67-908,623.08-143,204,995.75-1,772,669,536.84-78,318,655.10-1,994,598,649.10
(I) Total comprehensive income-50,380.95-1,704,739,736.40-15,024,703.00-1,719,814,820.35
(II) Capital503,1-858,-63,2-63,6
contributed or reduced by owners61.67242.1393,952.1049,032.56
1. Common shares contributed by owners490,000.00490,000.00
2. Capital contributed by holders of other equity instruments
3. Amounts of share-based payments recognized in owners’ equity
4. Others503,161.67-858,242.13-63,783,952.10-64,139,032.56
(III) Profit distribution-67,929,800.44-67,929,800.44
1. Withdrawal of surplus reserves
2. Withdrawal of general risk reserves
3. Profits distributed to owners (or shareholders)-67,929,800.44-67,929,800.44
4. Others
(IV) Internal carry-forward of owners’ equity
1. Conversion of capital reserves into paid-in capital (or capital stock)
2. Conversion of
surplus reserves into paid-in capital (or capital stock)
3. Surplus reserves offsetting losses
4. Carried-forward retained earnings of changes in defined benefit plan
5. Others
(V) Special reserve-143,204,995.75-143,204,995.75
1. Amount withdrawn in the current period-143,204,995.75-143,204,995.75
2. Amount used in the current period
(VI) Others
IV. Balance at the end of the current period1,698,245,011.00-1,298,846,540.07-50,380.9521,026,082.4384,394,441.23-269,566,140.1330,365,747.79265,568,221.30

Amount of the last period

Unit: Yuan

ItemLast period
Equity attributable to owners of Parent CompanyMinority equity Capital stockTotal owners’ equity Other equity instruments
Capital stockOther equity instrumentsCapital reserveCapital stockOther equity instrumentsCapital reserveCapital stockOther equity instrumentsCapital reserve
Preferred stockPerpetual debtsOthers
I. Balance at the end of the last year1,698,245,011.00-1,299,349,701.7465,687,868.1484,394,441.231,228,970,498.8652,534,755.101,830,482,872.59
Plus: adjustments for changes in accounting policies
Correction of accounting errors in prior periods
Business combination under common control
Others
II. Balance at the beginning of the year1,698,245,011.00-1,299,349,701.7465,687,868.1484,394,441.231,228,970,498.8652,534,755.101,830,482,872.59
III. Increases/decreases in the current period (“-” for decreases)858,242.1398,543,210.04274,132,897.8656,149,647.79429,683,997.82
(I) Total comprehensive income858,242.13380,090,990.833,955,036.01384,904,268.97
(II) Capital contributed or reduced by owners-4,063,392.3152,194,611.7848,131,219.47
1. Common shares contributed by owners30,240,000.0030,240,000.00
2. Capital
contributed by holders of other equity instruments
3. Amounts of share-based payments recognized in owners’ equity
4. Others-4,063,392.3121,954,611.7817,891,219.47
(III) Profit distribution-101,894,700.66-101,894,700.66
1. Withdrawal of surplus reserves
2. Withdrawal of general risk reserves
3. Profits distributed to owners (or shareholders)-101,894,700.66-101,894,700.66
4. Others
(IV) Internal carry-forward of owners’ equity
1. Conversion of capital reserves into paid-in capital (or capital stock)
2. Conversion of surplus reserves into paid-in capital (or capital stock)
3. Surplus reserves offsetting losses
4.
Carried-forward retained earnings of changes in defined benefit plan
5. Others
(V) Special reserve98,543,210.0498,543,210.04
1. Amount withdrawn in the current period98,543,210.0498,543,210.04
2. Amount used in the current period
(VI) Others
IV. Balance at the end of the current period1,698,245,011.00-1,299,349,701.74858,242.13164,231,078.1884,394,441.231,503,103,396.72108,684,402.892,260,166,870.41

8. Statement of Changes in Equity of Owners of Parent Company

Amount of the current period

Unit: Yuan

ItemCurrent period
Capital stockOther equity instrumentsCapital reserveLess: treasury stockOther comprehensive incomeSpecial reserveSurplus reserveUndistributed profitsTotal owners’ equity
Preferred stockPerpetual debtsOthers
I. Balance at the end of the last year1,698,245,011.001,237,956,472.3726,309,287.0088,188,591.103,050,699,361.47
Plus: adjustments for changes in accounting policies
Correction of accounting errors in prior periods
Others
II. Balance at the beginning of the year1,698,245,011.001,237,956,472.3726,309,287.0088,188,591.103,050,699,361.47
III. Increases/decreases in the current period (“-” for decreases)-572,568,837.78-572,568,837.78
(I) Total comprehensive income-504,639,037.34-504,639,037.34
(II) Capital contributed or reduced by owners
1. Common shares contributed by owners
2. Capital contributed by holders of other equity instruments
3. Amounts of share-based payments recognized in owners’ equity
4. Others
(III) Profit distribution-67,929,800.44-67,929,800.44
1. Withdrawal of surplus reserves
2. Profits distributed to-67,929,80-67,929,800.44
owners (or shareholders)0.44
3. Others
(IV) Internal carry-forward of owners’ equity
1. Conversion of capital reserves into paid-in capital (or capital stock)
2. Conversion of surplus reserves into paid-in capital (or capital stock)
3. Surplus reserves offsetting losses
4. Carried-forward retained earnings of changes in defined benefit plan
5. Others
(V) Special reserve
1. Amount withdrawn in the current period
2. Amount used in the current period
(VI) Others
IV. Balance at the end of the current period1,698,245,011.001,237,956,472.3726,309,287.00-484,380,246.682,478,130,523.69

Amount of the last period

Unit: Yuan

ItemLast period
Capital stockCapital stockCapital stockCapital stockCapital stock
Preferred stockPerpetual debtsOthers
I. Balance at the end of the last year1,698,245,011.001,237,956,472.3726,309,287.00242,353,634.553,204,864,404.92
Plus: adjustments for changes in accounting policies
Correction of accounting errors in prior periods
Others
II. Balance at the beginning of the year1,698,245,011.001,237,956,472.3726,309,287.00242,353,634.553,204,864,404.92
III. Increases/decreases in the current period (“-” for decreases)-154,165,043.45-154,165,043.45
(I) Total comprehensive income-52,270,342.79-52,270,342.79
(II) Capital contributed or reduced by owners
1. Common shares contributed by owners
2. Capital contributed by holders of other equity
instruments
3. Amounts of share-based payments recognized in owners’ equity
4. Others
(III) Profit distribution-101,894,700.66-101,894,700.66
1. Withdrawal of surplus reserves
2. Profits distributed to owners (or shareholders)-101,894,700.66-101,894,700.66
3. Others
(IV) Internal carry-forward of owners’ equity
1. Conversion of capital reserves into paid-in capital (or capital stock)
2. Conversion of surplus reserves into paid-in capital (or capital stock)
3. Surplus reserves offsetting losses
4. Carried-forward retained earnings of changes in defined benefit plan
5. Others
(V) Special reserve
1. Amount withdrawn in the current period
2. Amount used in the current period
(VI) Others
IV. Balance at the end of the current period1,698,245,011.001,237,956,472.3726,309,287.0088,188,591.103,050,699,361.47

III. Basic Information of the Company

Sino Great Wall Co., Ltd. (hereinafter referred to as "Company” or the "Company”) is a limitedliability company restructured by Shenzhen Victor Onward Textile Printing Co., Ltd. and altered its nameto Shenzhen Victor Onward Textile Industrial Co., Ltd. upon the approval of the People's Government ofShenzhen Municipality on November 19, 1991. The Company’s enterprise uniform social credit code:

91440300618801483A. It was listed on the Shenzhen Stock Exchange in 1992.

On July 23, 2015, the Chinese Securities Regulatory Commission approved the “Approval onShenzhen Victor Onward Textile Industrial Co., Ltd.’s Material Assets Reorganization, Issuance of StockShares to Chen Lve and Others, Asset Purchase, and Raising of Supporting Fund” ([2015] No. 1774). Thecompany issued 251,849,593 shares to 17 shareholders of Sino Great Wall Co., Ltd. including Chen Lveto purchase a 100% stake in Sino Great Wall International Engineering Co., Ltd. Meanwhile, it alsoissued 25,914,633 shares in a non-public manner to the 17 shareholders and raised a total of RMB254,999,988.72.

On July 29, 2015, the listed company received the total newly added capital of RMB 251,849,593contributed by all shareholders of Sino Great Wall Co., Ltd. On July 30, 2015, Ruihua Certified PublicAccountants (Special General Partnership) verified the numbers and issued the “Capital VerificationReport” (Ruihua Yanzi [2015] No. 48250011). After the change, the registered capital became RMB420,991,949 with capital stock of RMB 420,991,949. On December 4, 2015, the company changed itsname to Sino Great Wall Co., Ltd.

On May 6, 2016, the general meeting of stockholders reviewed and approved the 2015 plan ofconverting capital reserve into share capital. The specific plan was: Based on the total capital stock of446,906,582 shares issued as of December 31, 2015, all shareholders would receive 28 shares for every10 shares, with the total amount of converted capital stock reaching 1,251,338,429 shares. After thetransfer, the total capital stock would be increased to 1,698,245,011 shares. As of December 31 2016, theCompany’s total capital stock was 1,698,245,011 shares, of which 1,434,441,780 were outstanding Ashares, and 263,803,231 were outstanding B shares. Chen Lve held 582,944,556 A shares, accounting for34.33% of the total. He was the controlling shareholder and actual controller of the Company.

The industries involved are the architectural decoration industry and other construction industries. Asof December 31, 2018, the Company has issued capital stock of RMB 169,824,500 shares in total withthe registered capital of RMB 169,824,500; the registration address is located at No. 26, Kuipeng Road,

Baishigang, Kuichong Subdistrict, Dapeng New District, Shenzhen City and the headquarter address is:

Sino Great Wall Tower, No. 3, Jinxiu Road, Beijing Economic-Technological Development Area.

The operating activities of the Company include: production and operation of textile goods and theneeded raw materials, accessories, mechanical equipment, clothes of various face fabrics and provision ofrelevant services (excluding those products managed by the current license, performing as per the licenseif there is one). 70% of the products are for export. A branch has set up in Shanghai. Supplementedoperating activities: engaging in businesses of quota-free license management, acquisition and export ofnon-monopolized commodity. The actual controller of the Company is Chen Lve. The financialstatements have been reported on April 26, 2018 after the approval of all directors (board of directors) ofthe Company.

For the subsidiaries of the Company that were included in the combination scope in 2018, pleaserefer to “Note VIII. Equity in Other Subjects”. For details of the changes in the combination scope of theCompany for the current year, please refer to “Note VII. Change of Combination Scope”.IV. Basis for Preparation of Financial Statements

1. Basis of Preparation

The Company has prepared financial statements based on sustained operation as basis, according tothe transactions and matters having occurred actually, and in accordance with the Accounting Standardsfor Business Enterprises – Basic Rules (Issued by the Order No. 33 of the Ministry of Finance, amendedin accordance with the Order No. 76 of the Ministry of Finance), the 42 detailed accounting rules,Guidelines for Application of Accounting Standards for Business Enterprises, Interpretation ofAccounting Standards for Business Enterprises and other relevant regulations issued and amended onFebruary 15, 2006 and afterwards (hereinafter jointly referred to as “Accounting Standards for BusinessEnterprises”), as well as the disclosure provisions of the Preparation Rules for Information Disclosure byCompanies Offering Securities to the Public No.15 – General Provisions on Financial Report (Amendedin 2014) issued by China Securities Regulatory Commission.

According to the relevant provisions of the Accounting Standards for Business Enterprises, theaccounting of the Company is based on the accrual basis. Except for certain financial instruments, themeasurement of the financial statements is based on historical cost. If the asset is impaired, thecorresponding provision for impairment will be made in accordance with relevant regulations.

2. Sustained Operation

The Company had the ability of sustained operation within 12 months since the end of the reportingperiod, and did not have significant matters affecting its sustained operation.V. Important Accounting Policies and Accounting Estimates

Whether the Company is subject to special industrial requirements for disclosure

Yes

Civil engineering construction

Specific accounting policies and accounting estimates remind:

The major business of the company is the civil engineering construction industry, which is subject to the special

industrial requirements for disclosure.1. Statement on Observing Accounting Standards for Business Enterprises

The financial statements prepared by the Company meet the requirements of Accounting Standardsfor Business Enterprises, and reflect the Company’s financial standing as of December 31, 2018 and itsoperating results, cash flow, and other relevant information in 2018 authentically and completely. Inaddition, all material aspects of the financial statements of the Company are in line with the disclosureprovisions regarding financial statements and notes stipulated in the Preparation Rules for InformationDisclosure by Companies Offering Securities to the Public No.15 – General Provisions on FinancialReport (Amended in 2014) issued by China Securities Regulatory Commission.

2. Fiscal Period

From Jan. 1 to Dec. 31 in the Gregorian calendar is one fiscal year.

3. Business Cycle

The Company takes 12 months as a business cycle and uses it as a standard for the liquidity of assets and liabilities.4. Recording CurrencyThe Company adopts RMB as recording currency.

5. Method for Accounting Treatment of Business Combination under and Not under the Same ControlBusiness combination under the same control: The assets and liabilities obtained by the Company from business combination aremeasured as per the book value of the combined party’s assets and liabilities (including the goodwill formed from the final controller’sacquisition of the combined party) on the date of combination in the final controller’s consolidated financial statements. For the balancebetween the book value of net assets obtained from the combination and the book value of combination consideration paid (or the total bookvalue of shares issued), the capital stock premium in capital reserve will be adjusted; and if the capital stock premium in the capital reserve isinsufficient to write down, the retained earnings will be adjusted.

Business combination not under the same control: The assets paid as consideration for business combination and the liabilities incurredor undertaken by the Company on the date of purchasing will be measured as per fair value, and the balance between the fair value and itsbook value will be recorded in the gain or loss of the current period. The Company confirms the balance that the “combination cost” is biggerthan “the fair value shares of the purchased party’s distinguishable net assets obtained from the combination” as goodwill; and records afterchecking the balance that the “combination cost” is smaller than “the fair value shares of the purchased party’s distinguishable net assetsobtained from the combination” in the gain or loss of the current period.

The intermediary expenses incurred for business combination, like audit, legal service, appraisal and consulting, etc., and other directlyrelated expenses will be recorded in the gain or loss of the current period when incurred; the transaction expenses of equity securities issuedfor business combination will be used to write down the equity.

6. Method for Preparation of Consolidated Financial Statements

(1) Principles for determining the scope of consolidated financial statements

The consolidation scope of the Company’s consolidated financial statements is determined based on control. Control means that theCompany has the power to the investee, enjoys variable returns by participating in the relevant activities of the investee, and has the ability touse the power over the investee to affect the amount of the returns. The scope of consolidation includes the Company and all subsidiaries.Subsidiaries refer to the entities controlled by the Company.

The company will conduct a reassessment once the relevant facts and circumstances have changed and the relevant elements involved inthe above definition of control have changed.

(2) Method for Preparation of Consolidated Financial Statements

The Company prepares consolidated financial statements based on itself and each subsidiary’s financial statements, and according toother relevant materials. For preparing consolidated financial statements, the Company deems the whole enterprise group as an accountingsubject, and reflects the enterprise group’s overall financial standing, operating results and cash flow according to the confirmation,measuring and presentation requirements of relevant enterprise accounting standards, and according to uniform accounting policies.

The accounting policies and accounting period of all the subsidiaries incorporated into the consolidation scope of consolidated financialstatements are consistent with those adopted by the Company. If the accounting policies and accounting period adopted by the subsidiariesare inconsistent with those adopted by the Company, then when consolidated financial statements are prepared, necessary adjustments willbe made according to the Company’s accounting policies and accounting period. For the subsidiaries obtained through business combinationnot under the same control, their financial statements will be adjusted based on the fair value of distinguishable net assets on the date ofpurchasing. For subsidiaries obtained through business combination under the same control, their financial statements will be adjusted basedon the book value of their assets and liabilities (including the goodwill formed from the final controller’s acquisition of the subsidiaries) inthe final controller’s financial statements.

The shares belonging to minor shareholders of subsidiaries’ owners’ equity, net gain or loss of current period, and composite benefits ofcurrent period will be listed independently under the owners' equity in consolidated balance sheet, the net profit and total composite benefitin consolidated profit statement respectively. The balance formed from that “the loss of current period shared by subsidiaries’ minorshareholders” exceeds “the shares shared by the minor shareholders in the subsidiaries’ owners’ equity at the beginning of period” will beused to write down minor shareholders’ equity.

① Increase of subsidiaries or businesses

In the reporting period, if subsidiaries or businesses are increased for business combination under the same control, the opening amountin the consolidated balance sheet will be adjusted; the income, expense, and profit of the subsidiaries or businesses from the beginning of thevery period of combination to the end of the reporting period will be incorporated into the consolidated profit statement; the cash flow of thesubsidiaries or businesses from the beginning of the very period of combination to the end of the reporting period will be incorporated intothe consolidated cash flow statement, and meanwhile, relevant items in comparative statements will be adjusted, and the report subjects aftercombination will be deemed as having always existed from the time point when the final controller starts the control.

If it’s available to impose control on invested parties under the same control for reason of additional investment, etc., each partyparticipating in the combination will be deemed to exist and make adjustments according to present state when the final controller starts thecontrol. The equity investments held before obtaining the right to control the combined parties, relevant gain or loss already confirmed from

“the date when original equity is obtained and the date when the combining party and the combined party are under the same control,whichever is later” to the date of combination, other composite benefits, and the changes of other net assets will be used to write down theopening retained benefit of the period of comparative statement or the gain or loss of the current period respectively.

In the reporting period, if subsidiaries or businesses are increased for business combination not under the same control, the openingamount of consolidated balance sheet will not be adjusted; the income, expense and profit of the subsidiaries or businesses from the date ofpurchasing to the end of reporting period will be incorporated into the profit statement respectively; and the cash flow of the subsidiaries orbusinesses from the date of purchasing to the end of reporting period will be incorporated into the cash flow statement.

If it is available to impose control on the invested parties not under the same control for reason of additional investment, etc., then thepurchased parties’ stock equity held before the date of purchasing will be re-measured by the Company as per the fair value of the stockequity on the date of purchasing, and the balance between the fair value and its book value will be recorded in the investment yield of thecurrent period. If the purchased parties’ equity held before the date of purchasing involves other composite benefits under accounting withequity method, as well as changes of other owners’ equity except for net gain or loss, other composite benefit and profit distribution, thenrelevant other composite benefit and changes of other owner’s equity will be converted into the investment yield in the very period to whichthe date of purchasing belongs, excluding the other composite benefits arising from the changes of the net liabilities or net assets of benefitplan measured and set up over again by the invested parties.

② Disposal of Subsidiaries or Businesses

In the reporting period, if the Company disposes some subsidiaries or businesses, then the income, expense and profit of suchsubsidiaries or businesses from the beginning of the period to the date of disposal will be incorporated into the consolidated profit statement;the cash flow of the subsidiaries or businesses from the beginning of period to the date of disposal will be incorporated into cash flowstatement.

If the Company loses the right to control invested parties for disposal of partial equity investments or other reasons,the remained equity investments after disposal will be re-measured by the Company as per their fair value on the datewhen the control right is lost. The balance of “the sum of the consideration obtained from disposal of equity and the fairvalue of the remained stock equity” minus “the sum of the net asset shares enjoyed in original subsidiaries and calculatedcontinuously from the date of purchasing or date of combination according to original shareholding proportion and thegoodwill” will be recorded in the investment yield of the very period when control right is lost. Other composite benefitsrelated to original subsidiaries’ equity investments, or the changes of other owners’ equity except for other compositebenefits and profit distribution, will be converted into the investment yield of the very period when the control right islost, excluding the other composite benefits arising from the changes of the net liabilities or net assets of benefit planmeasured and set up over again by the invested parties.In case of any declination on the shareholding proportion of the Company and herein losing the control rights overits subsidiary arising from the capital increase contributed by other investors, it shall conduct accounting treatment in thelight of the aforesaid principles.If the Company disposes the equity investments in subsidiaries by steps through multiple transactions until losingthe right to control the subsidiaries, and if the clauses, terms and economic influences of various transactions for

disposing the equity investments in the subsidiaries meet one or several of the following circumstances, such multipletransactions will generally be subject to accounting treatment as package transaction:

a. These transactions are concluded simultaneously or in condition of considering mutual influences;b. Only the entirety of these transactions could achieve a complete business result;c. The occurrence of a transaction depends on the occurrence of at least one of the other transactions;d. A transaction is not economical independently, but economical if considered together with othertransactions.If various transactions of disposing the equity investments in subsidiaries until losing the control right belong topackage transaction, the Company will execute accounting treatment of various transactions as a transaction of disposingsubsidiaries until losing control right; but the balance between the price of every disposal before losing control right andthe subsidiaries’ net asset shares enjoyed and corresponding to the investments disposed will be confirmed as othercomposite benefits in the consolidated financial statements, and transferred into the gain or loss of the very period whenthe control right is lost.If various transactions of disposing the equity investments in subsidiaries until losing the control right do not belongto package transaction, then before losing control right, the Company will execute accounting treatment according torelevant policies about partial disposal of equity investments in subsidiaries in condition of not losing control right; ifcontrol right is lost, the accounting treatment will be carried out according to general method for treatment ofsubsidiaries.For the balance between “the long-term equity investments newly obtained from purchasing of minor stock equity”and “the net asset shares to be enjoyed in the subsidiaries according to newly increased shareholding proportion andcalculated continuously from the date of purchasing (or the date of combination)”, the capital stock premium in thecapital reserve in the consolidated balance sheet will be adjusted; if the capital stock premium in the capital reserve is notsufficient to write down, the retained benefit will be adjusted.

For the balance between “the disposal price obtained from disposal of partial long-term equity investments in subsidiaries incondition of not losing control right” and “the net asset shares to be enjoyed in the subsidiaries, corresponding to the disposal of long-termequity investments, and calculated continuously from the date of purchasing or the date of combination”, the capital stock premium in thecapital reserve in the consolidated balance sheet will be adjusted; if the capital stock premium in the capital reserve is not sufficient to writedown, the retained benefit will be adjusted.

7. Classification of Joint Venture Arrangements and Accounting Method of Joint Operations

A joint arrangement is an arrangement of which two or more parties have joint control. TheCompany classifies joint venture arrangements into joint operations and joint ventures in line with therights and obligations in joint venture arrangements. A joint operation refers to a joint arrangementwhereby the Company has rights to the assets, and obligations for the liabilities, relating to thearrangement. A joint venture refers to a joint arrangement whereby the Company has rights to the netassets of the arrangement.

The Company adopts equity method for accounting of investments in joint ventures in line with theaccounting policy described in Note IV. 13, “Long-term Equity Investments Subject to Accounting with

Equity Method”.

As a joint operator, the Company recognizes in relation to its interest in a joint operation: its assets,including its share of any assets held jointly, and its liabilities, including its share of any liabilitiesincurred jointly; its revenue from the sale of its share of the output of the joint operation; its share of therevenue from the sale of the output by the joint operation; and its expenses, including its share of anyexpenses incurred jointly.

When the Company, as a joint operator, invests in or sells assets to a joint operation (such assets donot constitute businesses, the same below), or purchases assets from the joint operation, the Companyonly recognizes the portion of the profits and losses arising from such transactions that is attributable toother participants in the joint operation before such assets are sold to third parties. If such assets aresubject to asset impairment losses stipulated in the Accounting Standards for Business Enterprises No.8of Asset Impairment, etc., in case that the Company invests in or sells assets to the joint operation, theCompany will fully recognize such losses incurred thereof; in case that the Company purchases assetsfrom the joint operation, the Company will recognize its share of such losses incurred thereof.

8. Standard for Determination of Cash and Cash Equivalents

When compiling the cash flow statement, the Company's cash on hand and the deposit, which can beused to make payment at any time, should be confirmed as the cash. The investment, having four featuresof short duration (expired within three months from the acquisition date), strong mobility, being easy tobe changed into known cash, low value change risk at the same time, should be confirmed as the cashequivalent.

9. Foreign-Currency Businesses and Conversion of Foreign-Currency Statements

Foreign-Currency Businesses

Foreign-currency businesses are converted into RMB for book-keeping with the approximateexchange rate of the spot exchange rate on transaction date as the exchange rate for conversion. Thebalance of foreign-currency monetary items on the date of balance sheet will be converted with the spotexchange rate on the date of balance sheet, and the balance of exchange arising from hereof will berecorded in the gain or loss of the current period, except for that the balance of exchange arising fromspecial foreign-currency loan related to the purchasing and construction of assets meeting capitalizationconditions is treated in line with the principle for capitalization of borrowing costs.

Conversion of Foreign-Currency Statements

The asset and liability items in the balance sheet will be converted with the spot exchange rate on thedate of balance sheet; for the owner’s equity, except for “undistributed profit”, all the other items will beconverted with the spot exchange rate when they are incurred. The revenue item and the expense item inthe Profit Statement are converted with the approximate exchange rate of the spot exchange rate ontransaction date.

For disposal of foreign business operation, the balance from conversion of foreign-currency financialstatements related to such foreign operation shall be transferred from owner’s equity to the gain or loss ofthe very period of disposal.

10. Financial Instruments

Financial instruments include financial assets, financial liabilities and equity instruments.(1) Classification of Financial InstrumentsWhen initially confirmed, financial assets and financial liabilities are classified into: Financial assetsor financial liabilities measured with fair value and having the change of fair value recorded in the gain orloss of current period, including tradable financial assets or financial liabilities, and financial assets orfinancial liabilities directly specified to measure with fair value and having the change of fair valuerecorded in the gain or loss of the current period; held-to-maturity investments; accounts receivable;available-for-sale financial assets; and other financial liabilities, etc.

(2) Confirmation Basis and Measuring Method of Financial Instruments①Financial assets (financial liabilities) measured with fair value and having the change of fair valuerecorded in the gain or loss of current periodWhen they are obtained, fair value (after deduction of cash dividends already declared but not paid yet, orbond interests with interest payment period expired but having not been acquired) will be taken as initialconfirmed amount, and relevant transaction expenses will be recorded in the gain or loss of the currentperiod.

During the holding period, the interests or cash dividends obtained will be confirmed as investmentyield, and at the end of period, the change of fair value will be recorded in the gain or loss of the currentperiod.

During disposal, the balance between the fair value and initial amount entered into account will beconfirmed as investment yield, and meanwhile, the gain or loss on change of fair value will be adjusted.

② Held-to-maturity investments

When they are obtained, the sum of fair value (after deduction of bond interests with interestpayment period expired but having not been acquired) and relevant transaction expanses will be taken asinitial confirmed amount.

During the holding period, interest income will be calculated and confirmed as per amortized costand actual interest rate, and recorded in investment yield. The actual interest rate will be determined whenbeing obtained, and maintained unchanged during the predicted survival period or applicable shorterperiod.

During disposal, the balance between the acquisition price and the book value of such investmentwill be recorded in investment yield.

③ Accounts receivable

For the creditor’s rights receivable formed from the Company’s sale of goods or rendering of laborservices, and the other enterprises’ creditor’s rights held by the Company and excluding the debtinstruments having an offer in active market, including accounts receivable and other accounts receivable,etc., the contract or agreement price receivable from purchasers will be taken as the initially confirmedamount; if the receivables have financing nature, they will be initially confirmed as per their presentvalue.

In case of recovery or disposal, the balance between the acquisition price and the book value ofaccounts receivable will be recorded in the gain or loss of the current period.

④ Available-for-sale financial assets

When they are acquired, the sum of fair value (after deduction of cash dividends already declared butnot paid yet, or bond interests with interest payment period expired but having not been acquired) andrelevant transaction expenses will be taken as initially confirmed amount.

During the holding period, the interests or cash dividends obtained will be confirmed as investmentyield. At the end of period, they will be measured as per fair value, and the change of fair value will berecorded in other composite benefit. However, the equity instrument investments which have no offer inactive market and of which the fair value cannot be reliably measured, and the derived financial assetswhich are linked with the equity instruments and settled through delivery of the equity instruments will bemeasured as per cost.

During disposal, the balance between the acquisition price and the book value of financial assets willbe recorded in the gain or loss of investment; meanwhile, the amount of corresponding disposal part andoriginally recorded in the accumulative amount of change in the fair value of other composite benefitdirectly will be recorded in the gain or loss of the current period.

⑤ Other financial liabilities

The sum of their fair value and relevant transaction expenses will be taken as initially confirmedamount. The amortized cost will be adopted for follow-up measurement.

(3) Confirmation Basis and Measurement Method of Financial Assets Transferred

If the Company transfers financial assets, and transfers nearly all risks and rewards on the ownershipof such financial assets to the transfer-in party, the Company will terminate the confirmation of thefinancial assets; if the Company reserves nearly all risks and rewards on the ownership of the financialassets, the Company will not terminate the confirmation of such financial assets.

When judging whether the transfer of financial assets meets the above-mentioned conditions forterminating the confirmation of financial assets, the Company will follow the “Substance Over Form”principle. The Company distinguishes the transfer of financial assets into overall transfer and partialtransfer of financial assets. If the overall transfer of financial assets meets the conditions for terminationof confirmation, the balance of the following two amounts will be recorded in the gain or loss of thecurrent period:

① The book value of the financial assets transferred;

② The sum of the consideration received for the transfer and the accumulative amount of change inthe fair value originally recorded in the owner’s equity directly (involving the circumstance that thefinancial assets transferred are available-for-sale financial assets);

If partial transfer of financial assets meets the conditions for termination of confirmation, the overallbook value of the financial assets transferred will be amortized between the confirmation-terminated partand non-confirmation-terminated part as per respective relative fair value, and the balance of thefollowing two amounts will be recorded in the gain or loss of the current period:

① The book value of the confirmation-terminated part;

② The consideration for the confirmation-terminated part and the amount of correspondingconfirmation-terminated part in the accumulative amount of change in the fair value originally recordedin the owner's equity directly (involving the circumstance that the financial assets transferred areavailable-for-sale financial assets);

If the transfer of financial assets does not meet the conditions for termination of confirmation, thefinancial assets will be confirmed continuously, and the consideration received will be confirmed as afinancial liability.

(4) Conditions for Terminating the Confirmation of Financial Liabilities

If the current obligation of financial liabilities is rescinded completely or partially, the confirmationof such financial liabilities or part of them will be terminated; if the Company signs an agreement withcreditors to replace the existing financial liabilities by means of undertaking new financial liabilities, andthe contract clauses for new financial liabilities are substantially different from the contract clauses for

existing financial liabilities, the confirmation of the existing financial liabilities will be terminated, andnew financial liabilities will be confirmed at the same time.

If all or partial contract clauses for existing financial liabilities are amended substantially, theconfirmation of the existing financial liabilities or part of them will be terminated, and meanwhile, thefinancial liabilities after amendment of clauses will be confirmed as a new financial liability.

If the confirmation of financial liabilities is terminated completely or partially, the balance betweenthe book value of the financial liabilities of which the confirmation is terminated and the considerationpaid (including non-cash assets transferred out or the new financial liabilities undertaken) will berecorded in the gain or loss of the current period.

If the Company buys back partial financial liabilities, then on the date of buyback, the Company willdistribute the overall book value of the financial assets according to the relative fair value of the partconfirmed continuously and the confirmation-terminated part. The balance between the book valuedistributed to the confirmation and the consideration paid (including non-cash assets transferred out or thenew financial liabilities undertaken) will be recorded in the gain or loss of the current period.

(5) Method for Determining the Fair Value of Financial Assets and Financial Liabilities

For financial instruments having an active market, their fair value will be determined as per the offerin the active market. For financial instruments not having an active market, their value will be determinedby estimation technique. In case of estimation, the Company will adopt estimation techniques which areapplicable under present circumstances and supported by sufficient available data and other information,select input values consistent with the asset or liability characteristics considered by market participantsin the transactions of relevant assets or liabilities, and preferentially use relevant observable input values.Non-observable input values will be used only under the circumstance that relevant observable inputvalues cannot be obtained or such values obtained are not practicable.

(6) Method for Testing and Accounting Treatment of Depreciation of Financial Assets (ExcludingAccounts Receivable)

Except for the financial assets measured with fair value and having the change of fair value recordedin the gain or loss of the current period, the Company checks the book value of financial assets on thedate of balance sheet. If some objective evidence proves that some financial asset depreciates, theCompany will withdraw depreciation reserve for this financial asset.

① Depreciation reserve of available-for-sale financial assets:

If the fair value of available-for-sale financial assets drops severely at the end of period, or suchtrend of drop is predicted to be non-temporary after comprehensively considering various relevant factors,the Company will confirm that the available-for-sale financial assets depreciate, will transfer out theaccumulative losses arising from the drop of fair value originally recorded in the owner’s equity directly,and confirm the impairment loss.

For available-for-sale debt instruments with impairment loss confirmed, if in a later fiscal period, thefair value rises and the rise is objectively related to the matters occurring after confirmation of originalimpairment loss, then the originally confirmed impairment loss will be transferred back and recorded inthe gain or loss of the current period.

The impairment loss on available-for-sale equity instrument investments will not be transferred backthrough gain or loss.

② Impairment reserve for held-to-maturity investments:

Held-to-maturity investments

11. Notes Receivable and Accounts Receivable(1) Accounts Receivable with Significant Single Amount and Having Bad Debt Reserve WithdrawnIndependently:

Judgment basis or amount standard of significant single amountThe Company recognizes accounts receivable for a single project with the balance ≥ RMB 10 million and other accounts receivable from a single relevant unit with the balance ≥ RMB 2 million as accounts receivable with significant single amount.
Method for withdrawal of bad debt reserve with significant single amount and withdrawn independently:The Company will carry out impairment test independently for accounts receivable with significant single amount. If such accounts receivable are proved impairing through the test, the Company will determine the impairment loss and withdraw bad debt reserve according to the balance that the present value of its future cash flow is lower than its book value. The accounts receivable not impairing as proved in single test, will, together with the accounts receivable with insignificant single amount, be divided into many portfolios according to similar credit risk characteristics. Then according to certain proportion of the balance on the date of balance sheet of the portfolios of these accounts receivable, the Company will calculate and determine impairment loss and withdraw bad debt reserve.

(2) Accounts Receivable with Bad Debt Reserve Withdrawn as per the Portfolios Classified Based on Credit RiskCharacteristics:

Portfolio nameMethod for withdrawal of bad debt reserve
Account aging portfolioAccount age analysis method
Combination of affiliated parties within the range of consolidation

Those with bad debt reserve withdrawn by means of account analysis in the portfolios:

√ Apply □ Not Apply

Account ageWithdrawal rate of accounts receivableWithdrawal rate of other receivables
Within 1 year (inclusive)5.00%5.00%
1-2 years10.00%10.00%
2-3 years30.00%30.00%
3-4 years50.00%50.00%
4-5 years80.00%80.00%
More than 5 years100.00%100.00%

Those with bad debt reserve withdrawn by means of percentage of total accounts receivable outstanding:

√ Apply □ Not ApplyThose with bad debt reserve withdrawn by other means:

√ Apply □ Not Apply

(3) Accounts Receivable with Insignificant Single Amount but Having Bad Debt Reserve Withdrawn Separately:

The Company needs to comply with disclosure requirements of the Guidelines No.7 of the Shenzhen Stock Exchange on IndustryInformation Disclosure — Civil Engineering of Listed Companies.

Reasons for independent withdrawal of bad debt reserveOn the date of balance sheet, for the other accounts receivable with insignificant single amount and having obvious sign of impairment, the Company will determine impairment loss and withdraw bad debt reserve according to the balance that the present value of their future cash flow is lower than their book value.
Method for withdrawal of bad debt reserveOn the date of balance sheet, the Company will execute impairment test of the accounts receivable with insignificant single amount but having bad debt reserve withdrawn separately. If such accounts receivable are proved impairing during the test, the Company will determine impairment loss and withdraw bad debt reserve according to the balance that the present value of their future cash flow is lower than their book value.

12. Inventories

Whether the Company needs to comply with disclosure requirements of special industriesYesCivil Engineering

(1) Classification of InventoriesInventories mainly include raw materials, engineering construction, merchandise inventory,work-in-process, low value consumables, etc.

(2) Method for Pricing of Inventories DeliveredDuring the delivery of inventory, it is priced in terms of the method of weighted mean.(3) Basis for Determining the Net Realizable Value of Different Types of InventoriesFor commodity stocks directly for sale, such as finished products, merchandise inventory, andmaterials for sale, etc., their net realizable value is confirmed during normal production and operation asper the amount after deduction of estimated selling expenses and relevant taxes from the estimated salesprice of such inventories; for material stocks needing processing, their net realizable value will bedetermined during normal production and operation as per the amount after deduction of costs estimatedto incur until completion of work, estimated selling expenses and relevant taxes from the estimated salesprice of finished products; for the inventories held for executing sales contract or labor service contract,their net realizable value will be calculated on the basis of contract price. If the quantity of inventoriesheld is more than the quantity ordered under sales contract, the net realizable value of the excessiveinventory will be calculated based on general sales price.

At the end of period, inventory depreciation reserve is withdrawn as per single inventory item;however, for plentiful inventories of relatively low unit price, inventory depreciation reserve will bewithdrawn by the type of inventory; for inventories related to the product series produced and sold in asame region, having the same or similar final use or objective, and difficult to measure by separating fromother items, inventory depreciation reserve will be withdrawn in a consolidated way. Except for that someconclusive evidence proves abnormality of market price on the date of balance sheet, the net realizablevalue of inventory items will be determined based on the market price on the date of balance sheet.

The net realizable value of inventory items at the end of this period will be determined based on themarket price on the date of balance sheet.

(4) Perpetual inventory taking system is adopted for inventory taking system.

(5) Method for Amortization of Low-Value Easily-Consumed Articles and Packing

One-off writing-off method is adopted for low-value easily-consumed articles; one-off writing-offmethod is adopted for packing.

13. Assets Held for Sale

The Company classifies the non-current assets or disposal group meeting the following conditions asassets held for sale:

(1) Based on the practice of selling such assets or disposal groups in similar transactions, they can besold immediately under current conditions;

The sale is very likely to happen, that is, the Company has already made a resolution on a sales planand obtained an assuring purchase commitment and it is expected that the sale will be completed withinone year. Where regulations require the approval of relevant power organ or regulatory department of theCompany before they can be sold, the approval has been obtained.

14. Long-term Equity Investments

(1) Standards for Judgment of Common Control and Significant Influences

Common control indicates the jointly-owned control on some arrangement as per relevant provisions,and relevant activities of such arrangement must be unanimously agreed by the participants sharing thecontrol right before being decided. If the Company and other joint operators impose common control oninvested units and have the right to the invested units’ net assets, the invested units will be the Company’sjoint ventures.

Significant influences indicate having the right to participate in making decisions on an enterprise’sfinancial affairs and business operation, but could not control or jointly control together with other partiesthe making of these policies. If the Company could impose significant influences on invested units, theinvested units will be the Company’s associates.

(2) Determination of Initial Investment Cost

① Long-term Equity Investments Formed from Business Combination

Business combination under the same control: If the Company pays combination consideration bypaying cash, transferring non-cash assets or undertaking debts and issuing equity securities, the Companywill take the book value shares of the combined party’s owners’ equity obtained on the date ofcombination in the final controller’s consolidated financial statements as the initial investment cost oflong-term equity investments. If the Company could impose control on invested units under the samecontrol for reason of additional investment, etc., the Company will confirm on the date of combination the

initial investment cost of long-term equity investments as per the book value shares of the combinedparty’s net assets to be enjoyed in the final controller’s consolidated financial statements aftercombination. For the balance between “the initial investment cost of long-term equity investments on thedate of combination” and “the sum of the book value of long-term equity investments before combinationand the book value of newly paid consideration for further obtaining shares on the date of combination”,the Company will adjust the capital stock premium; and if the capital stock premium is not enough towrite down, the Company will write down the retained benefits.

Business combination not under the same control: The Company takes the combination costdetermined on the date of purchasing as the initial investment cost of long-term equity investments. If theCompany could impose control on invested units not under the same control for reason of additionalinvestment, etc., the Company will take the sum of the book value of originally held equity investmentsand the newly increased investment cost as the initial investment cost of long-term equity investmentswhich are subject to accounting with cost method instead.

② Long-term Equity Investments Obtained by Other Means

For long-term equity investments obtained by means of payment in cash, the purchasing priceactually paid will be taken as initial investment cost.

For long-term equity investments obtained by issuing equity securities, the fair value of the equitysecurities issued will be taken as initial investment cost.

In the precondition that non-monetary asset exchange has business nature, and the fair value ofexchanged-in or exchanged-out assets could be measured reliably, the fair value of exchanged-out assetsand relevant expenses payable will be determined as the initial investment cost of the long-term equityinvestments obtained from non-monetary assets exchange, unless some conclusive evidence proves thatthe fair value of exchanged-in assets is more reliable; for non-monetary assets exchange not meeting theabove-mentioned precondition, the book value of exchanged-out assets and relevant taxes payable shallbe taken as the initial investment cost of exchanged-in long-term equity investments.

For long-term equity investments obtained through debt reorganization, their initial investment costwill be determined based on fair value.

(3) Follow-up Measurement and Gain or Loss Confirmation Method

① Long-term Equity Investments Subject to Accounting with Cost Method

The Company adopts cost method for accounting of long-term equity investments in subsidiaries.Except for the cash dividends or profits included in the price or consideration actually paid wheninvestments are obtained, and already announced but not paid, the Company confirms the investmentyield of the very period according to the cash dividends or profits enjoyed by the Company and declaredto grant by invested units.

② Long-term Equity Investments Subject to Accounting with Equity Method

The Company adopts equity method for accounting of long-term equity investments in associatesand joint ventures. For the balance that the initial investment cost is bigger than the fair value shares ofinvested units’ distinguished net assets which shall be enjoyed by the Company, the Company will notadjust the initial investment cost of long-term equity investments; for the balance that the initialinvestment cost is smaller than the fair value shares of invested units’ distinguished net assets which shallbe enjoyed by the Company, the Company will adjust the book value of long-term equity investments andrecord it in owner’s equity.

When confirming the shares of invested units’ net gain or loss to be enjoyed, the Company willadjust and confirm the invested units’ net profit based on the fair value of the invested units’distinguishable net assets when investments are obtained, and according to the Company’s accounting

policies and fiscal period. If the invested units prepare consolidated financial statements during theholding of investments, the accounting will be conducted based on the amount attributing to the investedunits in the net profit in the consolidated financial statements, other composite benefits, and changes ofother owner’s equity.

For the gain or loss on the non-realized internal transactions between the Company and jointly-runenterprises/ joint ventures, the part attributing to the Company will be calculated as per the proportion tobe enjoyed, will be written down, and on this basis, the investment yield will be confirmed. The gain orloss on non-realized internal transactions done with invested units will be fully confirmed if belonging toasset impairment loss. During the period of holding investment, as for the invested entity preparingconsolidated financial statements, carry out accounting based on the invested entity’s attributable amountof the net profit, other comprehensive income and other changes in equity in the consolidated financialstatements.

The unrealized gains or losses on internal transaction occurring among the company, associates andjoint ventures will confirm the investment income on the basis of offsetting the company’s attributablepart calculated according to the entitlement proportion. The unrealized losses on internal transactionoccurring in the invested entity belonging to assets impairment loss will be confirmed in full amount. Ifthe assets of investment or asset-sale transactions occurring among the company, associates and jointventures constitute the business, the accounting treatment shall be carried out according to the relatedpolicies disclosed in “IV. (4) Method for Accounting Treatment of Business Combination under and Notunder the Same Control” and “IV. (5) Method for Preparation of Consolidated Financial Statements”.

When the Company determines to share the losses of the invested entity, it will be treated in theorder as follows: firstly, the book value of long-term equity investments will be offset. Secondly, if thebook value of the long-term equity investment is not sufficient to be offset, the recognition of losses ofthe investment will be continued to the extent of the book value of other long-term rights and interestswhich substantially form the net investment made to the invested entity, and the book value of long-termaccounts receivable will be offset. Finally, after the above-mentioned treatment, if the Company stillundertakes extra obligations according to the provisions of investment contract or agreement, theCompany will confirm accrued liabilities with obligations predicted to undertake, and record them in theinvestment loss of the current period.

③ Disposal of Long-Term Equity Investments

For disposal of long-term equity investments, the balance between their book value and actualacquisition price will be recorded in the gain or loss of the current period.

For long-term equity investments with equity method adopted for accounting, when suchinvestments are disposed, the part originally recorded in other composite benefits will be subject toaccounting treatment according to corresponding proportion and on the same basis adopted by investedunits to directly dispose relevant assets or liabilities. The owner’s equity confirmed for change of otherowner’s equity except for net gain or loss, other composite benefit and profit distribution of invested unitswill be carried forward into the gain or loss of the current period, excluding the other composite benefitsarising from the change of net liabilities or net assets of invested units’ new measurement and setting ofbenefit plan.

If the Company loses common control or significant influences on invested units for reason ofdisposal of partial equity investments, etc., the remained equity after disposal will be subject toaccounting according to the standards for the confirmation and measurement of financial instruments, andthe balance between the fair value and book value of such remained equity investments on the date whenthe Company losing common control or significant influences will be recorded in the gain or loss of the

current period. Other composite benefits confirmed for accounting with equity method of original equityinvestments will be subject to accounting treatment with the same basis adopted by invested units todirectly dispose relevant assets or liabilities when the accounting with equity method is terminated. Theowner’s equity confirmed for change of other owner’s equity except for invested parties’ net gain or loss,other composite benefit and profit distribution will be totally transferred in the gain or loss of the currentperiod when the accounting with equity method is terminated.

In case the control right on the invested unit is deprived due to disposal of part of equity investment,increase of investment by other investment parties on subsidiaries causing decrease of holding proportionof the company, when preparing certain financial statement, the residual equity shall be checked by equitymethod if having common control or major effect on invested unit, and adjusted as the residual equity ischecked by the equity method from being obtained; If the remaining equity cannot exert joint control orsignificant influence on the invested unit, it shall take accounting treatment according to the relevantprovisions of financial tools and measurement rules, and the difference between the fair value and bookvalue on the date of losing control shall be included in the current profits and losses.

If the equity disposed is obtained from business combination for reason of additional investment,and when individual financial statements are prepared,

cost method or equity method is adopted for accounting of the remained equity after disposal, theother composite benefits and other owner’s equity confirmed for accounting with equity method of theequity investments held before the date of purchasing will be carried forward by proportion; if theremained equity after disposal is subject to accounting treatment according to the standards forconfirmation and measurement of financial instruments, the other composite benefits and other owner’sequity will be carried forward completely.

15. Investment Real Estate

Investment real estate measurement modelCosting accountingMethod of depreciation or amortization

The company's investment real estate includes the land use right held and prepared to transfer afterincrement, the buildings already leased (including the buildings used for leasing after completion ofself-construction or development activities, and buildings in construction or development and to be usedfor leasing in future).

The Company adopts cost mode to measure the existing investment real estates. For investment realestate measured with cost mode – the buildings used for leasing, the Company will adopt the depreciationpolicy, which is the same for fixed assets, and for the land use right for leasing, the Company will adoptthe amortization policy which is the same for intangible assets.

16. Fixed Assets1. Fixed asset recognition conditions

Fixed assets indicate the tangible assets held for producing goods, rendering labor services, leasing or operation management, and having aservice life of more than one fiscal year. No fixed asset may be recognized unless it simultaneously meets the conditions as follows:

(1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise;(2) The cost of the fixed asset can be measured reliably.

2. Depreciation method for various fixed assets

TypeDepreciation methodDepreciation life (Year)Salvage rate (%)Annual depreciation rate (%)
House and buildingsStraight-line method2054.75
Mechanical equipmentStraight-line method1059.5
Transportation equipmentStraight-line method7513.57
Electronic equipment and other equipmentStraight-line method3-5519.00-31.67

3. Recognition basis and valuation method for fixed assets under financing lease

Where the leasing agreement signed between company and the lessor specifies either of the conditions as follows, the lease will berecognized as a finance lease:

(1) The ownership of the leasing asset belongs to this company at the expiration of the lease;(2) Company has the option to buy the asset at a price to be far lower than the fair value of the asset at the date when the option becomesexercisable;(3) The lease term covers the major part of the use life of the leased asset;(4) The present value of the minimum lease payments on the lease beginning date does not have too large differences with the fair value ofthe asset.On the starting date of the Company’s leasing, the fair value of leased assets and the present value of the minimum rent payment, whicheveris lower, will be taken as the entry value of leased-in assets, and the minimum rent payment will be taken as the entry value of long-termaccounts payable, and the balance will be taken as non-confirmed financing cost.

17. Construction in Progress

Whether the company is required to comply with special industry disclosure requirementsYesCivil Engineering Construction

For construction in progress, the necessary expenditure incurred for making the constructed assets reach

the predetermined usable state will be taken as the entry value of the fixed assets. If the constructed fixedassets have reached the predetermined usable state, but the completion settlement has not been handled,then since the date when such assets reach the predetermined usable state, the Company will transfer suchassets into fixed assets as per estimated value and based on engineering budget, construction cost, oractual cost of engineering, etc., and will withdraw fixed asset depreciation according to the Company’spolicy for fixed asset depreciation; after handling of completion settlement, the Company will adjustoriginal temporarily estimated value as per actual cost, but will not adjust originally withdrawndepreciation amount.

18. Borrowing Costs

Borrowing costs include loan interest, discount or premium amortized, auxiliary expense, andexchange balance arising from foreign-currency loan, etc.

1. Principle for Confirmation of Borrowing Cost Capitalization

The Company’s borrowing costs, if available to directly attribute to the construction or production ofassets meeting capitalization conditions, will be capitalized and recorded in the cost of relevant assets;and other borrowing costs will be confirmed as expenses and recorded in the gain or loss of current periodas per their amount incurred when they are incurred.

Assets meeting capitalization conditions indicate the fixed assets which need to experience quite along term of construction or production activities before reaching the predetermined usable or salablestate, as well as investment real estates and inventories, etc.

Borrowing costs will be capitalized if simultaneously meeting the following conditions:

(1) Asset expenditure has occurred, including the payment in cash for purchasing and constructionor production of assets meeting capitalization conditions, transfer of non-cash assets, or undertaking ofinterest-bearing debts;

(2) Borrowing costs have occurred;

(3) The purchasing and construction or production activities necessary for making assets reachpredetermined usable or salable state have started.

2. Period for capitalization of borrowing costs

Capitalization period indicates the period of from the time point when capitalization of borrowingcosts starts to the time point when capitalization stops, excluding the period when the capitalization ofborrowing costs is suspended.

If the assets purchased and constructed or produced and meeting capitalization conditions reach thepredetermined usable or salable state, the capitalization of borrowing costs will stop.

If some items of the assets purchased and constructed or produced and meeting capitalizationconditions are completed separately and could be used independently, the capitalization of borrowingcosts for such assets will stop.

If each part of the assets purchased and constructed or produced is completed respectively, butcannot be used or sold until the whole assets are completed, the capitalization of borrowing costs may bestopped when the assets are totally completed.

3. Period for suspension of capitalization

If the assets meeting capitalization conditions are broken abnormally during purchasing andconstruction or production process, and the suspension lasts for more than 3 months successively, thecapitalization of borrowing costs will be suspended; if such suspension is a necessary procedure formaking the assets purchased and constructed or produced and meeting capitalization conditions reach thepredetermined usable state or salable state, the capitalization of borrowing costs will continue. Theborrowing costs occurring during suspension period will be confirmed as gain or loss in the current period,and the capitalization of borrowing costs will continue after the construction and purchasing orproduction activities of such assets restart.

4. Method for calculation of borrowing costs capitalization rate and capitalized amount

For the special loan obtained for purchasing and construction or production of assets meetingcapitalization conditions, the capitalized amount of borrowing costs will be determined as per the amountafter “the borrowing costs actually incurred in the very period of special loan” minus “the interest incomeobtained from bank deposit or the investment yield obtained from temporary investment of the non-used

loan fund”.

For general loans occupied for purchasing and construction or production of assets meetingcapitalization conditions, the borrowing costs amount to be capitalized of general loans shall be calculatedand determined as per the “weighted mean of asset expenditure that accumulative asset expenditureexceeds the special loan” multiplied by the capitalization rate of general loan. The capitalization rate isgenerally calculated and determined as per the weighted mean interest rate of general loan.

19、Biological Assets

20、Oil and Gas Assets

21. Intangible assets

Intangible assets refer to identifiable non-monetary assets without physical form owned or controlledby the Company. The intangible assets of the Company mainly include land use right and softwareroyalty.

1. Pricing Method of Intangible Assets

The Company initially measures the intangible assets as per the cost when they are acquired.

The cost of purchased intangible assets includes purchasing price, relevant taxes, and otherexpenditures directly for making the assets reach the predetermined use. If the price for purchasingintangible assets is delayed in payment by exceeding normal credit conditions, and the intangible assetshave financing nature substantially, the cost of intangible assets will be determined based on the presentvalue of purchasing price.

As for the intangible assets obtained from debt reorganization and used by debtors for repaying debts,their entry value will be determined based on the fair value of such intangible assets, and the balancebetween the book value of reorganized debts and the fair value of the intangible assets used for repayingdebts will be recorded in the gain or loss of the current period.

In the precondition that non-monetary asset exchange has the essence of commerce, and the fairvalue of exchanged-in or exchanged-out assets could be measured reliably, the entry value of theintangible assets obtained from non-monetary asset exchange will be determined based on the fair valueof exchanged-out assets, unless conclusive evidence proves that the fair value of exchanged-in assets ismore reliable; for the non-monetary asset exchange not meeting the above-mentioned precondition, thebook value of exchanged-out assets and relevant taxes payable will be taken as the cost of exchanged-inintangible assets, and the gain or loss won’t be confirmed.

The Company analyzes and judges the service life of intangible assets when obtaining them.

Intangible assets with limited service life are amortized with straight-line method within the periodwhen they bring about economic benefits for the enterprise; if it’s impossible to predict the period whenthe intangible assets could bring about economic benefits to the enterprise, the intangible assets will be

deemed to have uncertain service life, and won’t be amortized.

2. Estimate on the service life of intangible assets with limited service life:

ItemsService lifeAmortization method
Software royalty5 yearsStraight-line method
Land use right50 yearsStraight-line method

At the end of every year, the Company checks the service life and amortization method of theintangible assets with limited service life. As checked, the service life and amortization method ofintangible assets at the end of this year were not different from previous estimates.

3. Concrete Standard for Division of Research Stage and Development Stage

The Company’s expenditure for internal research and development projects is divided into theexpenditure at research stage and expenditure at development stage.

Research stage: The stage of unique and planned investigation and research activities conducted forobtaining and understanding new scientific or technological knowledge.

Development stage: The stage of applying research findings or other knowledge to some plan ordesign, in order to produce new or substantially improved materials, devices and products, etc. beforecommercial production or use.

4. Concrete Conditions for Capitalization of Expenditure at Development Stage

The expenditure at development stage of internal research and development projects will beconfirmed as intangible assets when simultaneously meeting the following conditions:

(1) It is technically feasible to complete the intangible assets and make them available for use orsale;

(2) The Company has the intent to complete, use or sell the intangible assets;

(3) The way by which intangible assets produce economic benefit could prove the usability of suchintangible assets, including proving that the products produced with such intangible assets have markets,or such intangible assets have markets, and intangible assets would be used internally;

(4) The Company has sufficient technical, financial resources and other resources to support thecompletion of the development of such intangible assets, and the Company has the ability to use or sellsuch intangible assets.

(5) The expenditure attributing to the development stage of such intangible assets could be measuredreliably.

22. Long-term Asset Impairment

If there is any sign of impairment in long-term equity investments, investment real estates measuredby the cost model, fixed assets, construction in progress, intangible assets with finite service life and other

long-term assets at the balance sheet date, an impairment test will be made. If the result of impairmenttest proves that the recoverable amount of assets is lower than their book value, the depreciation reservewill be withdrawn as per their balance and recorded in the impairment loss. The recoverable amountindicates the net amount after the fair value of assets minus the disposal expenses, and the present valueof predicted future cash flow of the assets, whichever is higher. Asset depreciation reserve is calculatedand confirmed based on single assets. If it is difficult to estimate the recoverable amount of single assets,the recoverable amount of asset portfolio will be determined as per the asset portfolio to which the assetsbelong. Asset portfolio indicates the minimum asset group which could independently produce cashinflows.

Goodwill will be subject to impairment test at least at the end of every year.The Company carries out impairment test of goodwill, and amortizes the book value of the goodwillformed from business combination to relevant asset group by reasonable means since the date ofpurchasing; if it is difficult to amortize the book value to relevant asset group, the Company will amortizeit to relevant asset group, the Company will amortize it to relevant asset group portfolio. When the bookvalue of goodwill is amortized to relevant asset group or asset group portfolio, the Company will executeamortization as per the proportion of the fair value of each asset group or asset group portfolio to the totalfair value of relevant asset group or asset group portfolio. If it is difficult to measure the fair value reliably,the Company will execute amortization as per the proportion of the book value of each asset group orasset group portfolio to the total book value of relevant asset group or asset group portfolio.

When impairment test is carried out for relevant asset groups or asset group portfolios includinggoodwill, if the asset groups or asset group portfolios relevant to goodwill have the sign of impairment,the Company will carry out impairment test of the asset group or asset group portfolio excluding goodwill,calculate recoverable amount, compare it with relevant book value, and confirm correspondingimpairment loss. And then conduct impairment test on asset groups or asset group combination withgoodwill, compare book values of relevant asset groups or asset group combination (including the bookvalue of amortized goodwill) with recoverable amounts, if the recoverable amounts of relevant assetgroups or asset group combination are lower than their book values, the impairment loss of goodwill willbe recognized. Once any loss of asset impairment is recognized, it shall not be turned back in the futureaccounting period.

23. Long-term Deferred Expenses

Long-term deferred expenses indicate various expenses having been incurred, to be shared in presentperiod and later periods, and having an amortization period of more than one year.

(1) Amortization Method

Long-term deferred expenses will be averagely amortized within the benefit period;

(2) Amortization Life

It shall be determined as agreed in contracts or during the expected benefit period.

24. Employee Compensation1. Accounting Method of Short-Term Remuneration

During the fiscal period when employees provide services for the Company, the Company confirmsthe short-term remuneration incurred actually as liabilities, and records them in the gain or loss of the

current period or the cost of relevant assets.

For the social insurance premiums and housing fund paid by the Company for employees, the tradeunion outlay and employee education outlay withdrawn as per regulations, the Company calculates anddetermines corresponding amount of employees’ remuneration as per the withdrawal basis andwithdrawal proportion regulated during the fiscal period when employees provide services for theCompany.

If employees’ welfare expense is non-monetary welfare and could be measured reliably, they will bemeasured as per fair value.

2. Accounting Method of Post-Demission Welfare

Defined contribution plans

As for the basic pension insurance and unemployment insurance paid by the Company foremployees according to relevant provisions of local government, the amount payable will be calculated asper the base amount and proportion of payment regulated by local place and recorded in the gain or lossof the current period or the cost of relevant assets during the fiscal period when the employees provideservices for the Company.

3. Accounting Method of Dismissal Welfare

If being unavailable to unilaterally revoke the dismissal welfare provided for rescission of laborrelationship plan or staff cut-down suggestions, or when confirming the costs or expenses related toreorganization involving the payment of dismiss welfare (whichever is earlier), the Company will confirmthe employee compensation liabilities arising from dismiss welfare, and record them in the gain or loss ofthe current period.

4. Accounting Method of Other Long-term Welfares

Other long-term welfares provided by the company to employees in accordance with the defined contribution plans shall be subject toaccounting treatment in accordance with the defined contribution plans; otherwise shall be subject to accounting treatment in accordancewith the defined benefit plan.

25. Accrued Liabilities

1. Standard for Confirmation of Accrued Liabilities

If the obligations related to the contingencies like lawsuits, debt guarantees, loss contracts,reorganization matters, etc. simultaneously meet the following conditions, the Company will confirmsuch obligations as accrued liabilities:

(1) The obligations are current obligation undertaken by the Company;

(2) The implementation of such obligations will probably induce that economic benefits flow out ofthe Company;

(3) The amount of such obligations could be measured reliably.

2. Measures for Measurement of Various Accrued Liabilities

The Company initially measures the accrued liabilities as per the optimum estimated amount ofexpenditures necessary for implementation of relevant current obligations.

When determining the optimum estimated amount, the Company comprehensively considers therisks related to contingencies, uncertainty, time value of money, and other factors. If the time value ofmoney has significant influences, the optimum estimated amount will be determined after discountingwith relevant future cash outflow.

The optimum estimated amount is treated by the following circumstances respectively:

If the expenditure needed has a continuous scope (or range), and the possibility for various results tooccur is the same within this scope, then the optimum estimated amount will be determined as per themiddle value of this scope, namely the average of the upper-limit and lower-limit amounts.

If the expenditure needed does not have a continuous scope (or range), or there is a continuous scope,but the possibility for various results to occur within this scope is not the same, for example,contingencies involve single item, the optimum estimated amount will be determined as per the amountwhich will occur most possibly; if contingencies involve multiple items, the optimum estimated amountwill be calculated and determined as per various possible results and relevant probability.

If the Company’s expenditure needed for discharging accrued liabilities is predicted to compensateby third parties fully or partially, then the compensation amount will be confirmed independently as assetswhen being ascertained basically available to receive, and the compensation amount confirmed won’t bemore than the book value of the accrued liabilities.

26. Share-Based Payment

The share-based payment of the Company refers to the transaction through granting equityinstruments or undertaking equity-instrument-based liabilities to obtain the services provided byemployees [or other parties]. The Company’s share-based payment is divided into the share-basedpayment settled with equity and the share-based payment settled in cash.

1. Share-based payment settled with equity and equity instruments

The share-based payment settled with equity, if used to exchange for employees’ services, will bemeasured with the fair value of the equity instruments granted to employees. If the Company makesshare-based payment with restricted shares, then the shares subscribed with investment by employeesshall not be circulated in the market or transferred before meeting unlocking conditions and beingunlocked; if the unlocking conditions regulated in the final Stock Incentive Plan are not satisfied, theCompany will buy back shares at the predetermined price. When obtaining the money paid by employeesfor subscribing restricted shares, the Company will confirm capital stock and capital reserve (capital stockpremium) as per the stock subscription money obtained, and meanwhile, will confirm a liability andinventory stock as per the full amount of buyback obligation. On every date of balance sheet within thewaiting period, the Company will make the optimum estimate on the quantity of exercised equityinstruments according to follow-up information such as the latest acquired change in the number ofright-exercising employees, whether meeting regulated performance conditions, etc., on this basis, andaccording to the fair value on the date of granted, the Company will record the services obtained in thevery period in relevant cost or expense, and increase capital reserve correspondingly. After exercisingdate, the Company will not adjust the total amount of relevant confirmed cost or expense and owner’sequity. However, it’s available to exercise rights immediately after being granted, it will be recorded inrelevant cost or expense as per fair value on the date of granted, and capital reserve will be increasedcorrespondingly.

For the share-based payment not exercised finally, the Company will not confirm cost or expense,unless the exercise conditions are market conditions or non-excisable conditions. No matter whethermarket conditions or non-excisable conditions are satisfied, if only non-market conditions amongexcisable conditions are satisfied, it will be deemed as excisable. If the clauses of share-based paymentsettled with equity are amended, the services obtained will be confirmed at least according to the clausesbefore amendment. In addition, any amendment increasing the fair value of equity instruments granted, oralterations beneficial for employees on the date of amendment will be confirmed as increase of servicesobtained.

If share-based payment settled with equity is cancelled, the Company will treat it as acceleratedexercise on the date of cancellation, and confirm the non-confirmed amount immediately. If employees orother parties could choose to meet non-exercisable conditions, but do not meet such conditions withinwaiting period, the Company will treat this as cancelation of share-based payment settled with equity.However, if new equity instruments are granted, and the new equity instruments granted are recognized toreplace the cancelled equity instruments on the granted date of the new equity instruments, the grantedalternative equity instruments will be treated by the means the same as those for amending the terms andconditions for treatment of original equity instruments.

27. Other financial instruments such as preferred stocks and perpetual bonds, etc.28. Income

Should the company comply with the disclosure requirements of specific industries?

Yes.

Civil engineering construction industry

The company shall comply with the disclosure requirements of "the Guidelines No.7 of the Shenzhen Stock Exchange on IndustryInformation Disclosure—Listed Companies Engaging in the Civil Engineering Construction Business".

1. General principles for recognition of revenue from sales of goods:

(1) The significant risk and the rewards of the goods ownership has been transferred to the Buyer by the Company.

(2) The Company neither reserves the continuous management right which is generally associated with ownership nor carries outeffective control of sold commodities.

(3) Related income amount can be measured in a reliable way;

(4) The relevant economic benefits may flow into the Company;

(5) Relevant costs occurred or to be occurred can be measured in a reliable way.

2. Specific principles

(1) Service revenue

The service revenue provided by the Company mainly refers to the revenue of engineering design. In case that the results fromprovision of labor transactions can be estimated reliably, the revenue shall be recognized as per the important milestones specified by thedesign contract. Namely, the revenue is recognized as per the percentage of the workload of important milestones of the completed design inthe total design workload and the expected recoverable contract amount.

If the result of providing service transaction cannot be estimated in a reliable way, the service revenue shall be determined accordingto the service costs which has generated and expected to be compensated. The existing service costs are calculated as the period charges.When it is not probable that the costs incurred will be recovered, revenue is not recognized.

Provided that sales of commodity and provision of labor can be distinguished and separately measured in the contract or agreement

signed by the Company with other enterprises, sales of commodity and provision of labor shall be separately disposed. Provided that sales ofcommodity and provision of labor cannot be distinguished, or can be distinguished but cannot be separately measured, the entire contractshall be disposed as sales of commodity.

(2) Income from construction contractsUnder the circumstance that the outcome of a construction contract can be estimated in a reliable way, the contract revenue and thecontract costs shall be recognized in light of the percentage-of-completion method on the date of the balance sheet. The percentage ofcompletion is determined in the proportion of the accumulated actual contract costs among the estimated total contract costs.

If the outcome of a contraction contract cannot be estimated in a reliable way, but the contract costs can be recovered, the contractrevenue shall be recognized in accordance with the recoverable actual contract costs and the contract costs shall be recognized as contractexpenses in the current period they are incurred; if the contract costs cannot be recovered, they shall be recognized as contract expensesimmediately when they are incurred and no contract revenue shall be recognized. If uncertainties, due to which the outcome of a constructioncontract cannot be measured in a reliable way, have passed out of existence, the revenues and expenses pertinent to the construction contractshall be determined in the percentage-of-completion method.

If the estimated total contract costs exceed the total contract revenue, the estimated loss is recognized as the expenses for the period.

The cost and the gross profit (loss) accumulatively incurred and recognized of a construction-in-progress contract and the settled priceare presented in the balance sheet with a net amount after offset. The part of the sum of the cost and the gross profit (loss) accumulativelyincurred from a construction-in-progress contract exceeding over the settled contract price is presented as inventory; and the part of thesettled contract price exceeding over the cost and the gross profit (loss) accumulatively incurred from a construction-in-progress is presentedas advance payment.

(3) Recognized income of hospital business

The income of hospital mainly comes from the outpatient and inpatient departments, and the income recognition is done at the time ofpatient’s settlement.

For the outpatient income, as the patients turning to the outpatient treatment do not need the inpatient treatment generally, thetreatment duration is short, the settlement is made with the hospital at the end of the treatment and treatment and medicine expense is paid.Financially, such outpatient income shall be recognized at the day of receipt.

For the inpatient income, as the patient needs to be treated in the hospital for a certain period and a part of the medical expense shallbe prepaid when be admitted to hospital, the inpatient income shall not be recognized at this moment. When discharging from the hospital,the patient will settle the medical expense for the hospitalization and the hospital will issue the invoice to the patient. In such case, theincome from the inpatient is recognized financially.

29. Governmental subsidy

A government subsidy means the monetary or non-monetary assets obtained free by this companyfrom the government. Government subsidies consist of the government subsidies pertinent to assets andgovernment subsidies pertinent to income.

The assets-related government subsidy refers to government subsidies that are obtained by theCompany used for purchase or construction, or forming the long-term assets by other ways. Governmentsubsidies pertinent to income refer to the governmental subsidies except governmental subsidies pertinentto assets.

(1) The judgment basis and accounting treatment method of assets-related government subsidy

1. Recognition time

In case the governmental subsidies are monetary assets, it shall be calculated according to thereceived amount or the receivable amount. If a governmental subsidy is a nonmonetary asset, it shall bemeasured at its fair value or at its nominal amount in case that the fair value cannot be reliably obtained.The governmental subsidies calculated according to nominal amount shall be directly included in the

current profits and losses.

2. Accounting treatmentGovernmental subsidy related to assets will be used to write down the book value of relevant assetsor be confirmed as deferred income. If being confirmed as deferred income, the governmental subsidywill be recorded in the gain or loss of the current period within the service life of relevant assets withreasonable and systematic methods (if being related to the Company’s daily activities, the governmentalsubsidy will be recorded in other benefits; if not, they will be recorded in non-operating income).

(1) The judgment basis and accounting method of income-related government subsidyThe income-related government subsidy, if being used to compensate the Company’s relevant costexpenses or losses in later period, will be confirmed as deferred income, and be recorded in the gain orloss of the current period (if being related to the Company’s daily activities, the governmental subsidywill be recorded in other benefits; if not, they will be recorded in non-operating income) or be used towrite down relevant cost expenses or losses during the period of confirmation on relevant cost expensesor losses; if being used to compensate the Company’s relevant cost expenses or losses already incurred,the governmental subsidy will be directly recorded in the gain or loss of the current period (if beingrelated to the Company’s daily activities, the governmental subsidy will be recorded in other benefits; ifnot, they will be recorded in non-operating income) or be used to write down relevant cost expenses orlosses.

30. Deferred Income Tax Assets/Deferred Income Tax Liabilities

For deductible temporary difference, deferred income tax assets will be confirmed within the limit ofthe taxable income which will probably be obtained in future period and be used to offset deductibletemporary difference. As for deductible losses and taxes rebate which could be carried forward to lateryears, corresponding deferred income tax assets will be confirmed within the limit of the future taxableincome which will probably be obtained to offset deductible losses and taxes.

For taxable temporary difference, deferred income tax liabilities will be confirmed except for underspecial circumstances.

The special circumstances under which deferred income tax assets or deferred income tax liabilitiesare not confirmed include: the initial confirmation of goodwill; other transactions or matters (except forbusiness combination) of which the occurrence won’t affect accounting profit or taxable income (ordeductible loss).

If the Company has statutory right to settle with net amount, and has the intention to settle or obtainassets with net amount, and the discharge of debts is conducted simultaneously, the income tax assets ofthe current period and the income tax liabilities of the current period will be presented with the netamount after offsetting.

If the Company has the statutory right to settle the income tax assets of the current period and theincome tax liabilities of the current period with net amount, and the deferred income tax assets anddeferred income tax liabilities are related to the income tax levied by a same tax administrationdepartment from a same tax payment subject, or are related to different tax payment subjects, but in everyimportant period when deferred income tax assets and liabilities are transferred back in future, if the taxpayment subjects involved intend to settle the income tax assets and liabilities of the very period with netamount or to obtain assets and discharge liabilities simultaneously, deferred income tax assets anddeferred income tax liabilities will be presented with the net amount after offsetting.

Leasing1. Accounting treatment method for operating lease

(1) The rent paid by the Company for rented assets will be amortized with straight-line methodwithin the whole lease term including the rent-free period, and recorded in the expense of the currentperiod. The initial direct expenses paid by the Company and related to leasing transaction will berecorded in the expense of the current period.

If the asset lessor undertakes the lease-related expenses which shall be assumed by the Company, theCompany shall deduct such expenses from the total rent, amortize the remained rent within the lease term,and record it in the expense of the very period.

(2) The rent collected by the Company for leasing out assets will be amortized with straight-linemethod within the whole lease term including the rent-free period, and confirmed as lease-related income.The initial direct expenses paid by the Company and related to leasing transaction will be recorded in theexpense of the very period; if the amount is relatively big, the amount will be capitalized, and will berecorded in the income of the very period by installments within the whole lease term on the basis sameas that for confirmation of lease-related income.

If the Company undertakes lease-related expenses which shall be undertaken by the lessee, theCompany will deduct such expenses from the total amount of rent income, and distributed the remainedrent expense within the lease term.

2. Accounting treatment method for finance lease

(1) Assets rented through finance lease: On the date when the renting starts, the Company takes thefair value of rented assets and the present value of minimum rent payment, whichever is lower, as theentry value of rented assets, takes the minimum rent payment as the entry value of long-term accountspayable, and takes the balance as non-confirmed financing expense. The Company adopts actual interestrate method to amortize the non-confirmed financing expenses within the asset lease term, and recordsthem in financial expenses. The Company records the initial direct expenses incurred in the value ofrented assets.

(2) Assets leased out through finance lease: On the date when leasing starts, the Company confirmsthe balance between “the sum of finance lease account receivable and non-guaranteed balance” and theirpresent value as non-realized financing income, and confirms it as lease income within each future periodwhen rents are received. The Company records the initial direct expenses related to leasing transaction inthe initial measured amount of finance lease account receivable, and reduces the income amountconfirmed within the lease term.

32. Other Important Accounting Policies and Accounting Estimates

1. Important Accounting Judgment and Estimates

When applying accounting policies, the Company needs to make judgment, estimation and assumption of the bookvalue of the statement items that cannot be accounted accurately due to the uncertainty of business activities. Based onthe past experience of the company's management and other relevant factors, these judgments, estimates, andassumptions will impact the disclosure of reported amount of income, expenses, assets, and liabilities and the contingentliabilities on the balance sheet date. However, there may exists differences between the actual results caused by theuncertainty of these estimates and the current estimates of the company's management, which may lead to a significant

adjustment of the book amount of the affected assets or liabilities in the future.

The Company will regularly review the above-mentioned judgments, estimates and assumptions on the basis ofcontinuing operations. In case the changes of accounting estimates only impact the period of change, the impactednumber shall be confirmed in the period of change; in case the changes impact both the period of change and the future,the impacted number shall be confirmed in the period of change and the future.

On the date of balance sheet, the Company shall judge, estimate and assume the amount of the financial statementitems in the following important areas.

(1) Accrued liabilities

The Company shall estimate and judge the possibility that the accrued liabilities may lead to the current obligationsundertaken by the Company based on available evidence. If the management consider that there is such a possibility, andthey are able to make a reliable estimation of the expenditures required, then the Company will recognize the bestestimated amount of the expenditure required to fulfill the current obligations of the estimated liabilities as the accruedliabilities. Changes in these estimates may result in significant adjustments of accrued liabilities.

(2) Withdrawal of the bad debt reserves

The Company will use allowance method to account the loss of bad debt in accordance with the accounting policyof receivables. The impairment of receivables is based on the recoverability of estimated receivables. The appraisal ofimpairment of receivables requires the judgment and estimate of the management. The difference between the actualresult and the original estimate will affect the book value of the receivables and the withdrawal or transferal of the baddebt reserve of the receivables during the period when the estimate is changed.

(3) Inventory depreciation reserve

In accordance with the inventory accounting policy, the Company will account based on the lower one of the costand net realizable value. For the inventory with a cost higher than that of the net realizable value and the outdatedinventory, it will withdraw the inventory depreciation reserve. The impairment of inventory to net realizable value isbased on the marketability and the net realizable value of estimated inventory. The appraisal of inventory impairmentrequires the management to make judgment and estimate on the basis of obtaining solid evidence and taking into accountthe purpose of holding inventory and the impact of matters after the balance sheet date. The difference between theactual result and the original estimate will impact the book value of inventory and the withdrawal or transferal of theinventory depreciation reserve during the change of the estimate.

(4) Impairment of financial assets available for sale

The Company’s determination of the impairment of financial assets available for sale depends on the judgment andassumption of the management to a large extent to determine whether the impairment loss needs to be confirmed in theincome statement. When making judgments and assumptions, the Company needs to assess the degree and duration thatthe fair value of the investment is lower than the cost, as well as the financial condition and short-term business outlookof the invested objects, including the industry situation, technological innovation, credit rating, default rate and the riskof the peers.

(5) Long-term asset depreciation reserve

The Company shall judge the sign of possible impairment of non-current assets other than financial assets on thebalance sheet date. For intangible assets with uncertain service life, impairment test should be conducted when there aresigns of impairment except the annual impairment test. The non-current assets other than financial assets will haveimpairment tests when there is sign that their book value is unrecoverable.

It indicates depreciation when the book value of asset or group of assets is higher than the recoverable amount,which is the higher of the net amount after the fair value minus the disposal expenses and the present value of thepredicted future cash flow.

The net amount after the fair value minus the disposal expenses is confirmed as the amount after agreed sales priceof similar asset in a fair transaction or observable market price minus the incremental costs directly attributable to thedisposal of asset.

When estimating the present value of future cash flow, it is necessary to make judgments on the output, sellingprice, relevant operating costs of the asset (or group of assets) and the discount rate to calculate the present value. TheCompany will use all relevant material available when estimating the recoverable amount, including projections ofproduction, selling prices and relevant operating costs based on reasonable and supportable assumptions.

The Company shall test goodwill impairment annually, which requires estimating the present value of the futurecash flow of the asset groups or portfolio of asset groups apportioned with goodwill. When estimating the present valueof future cash flow, the Company shall estimate the cash flow generated by the future asset group or portfolios of assetgroups, and choose the appropriate discount rate to determine the present value of future cash flow.

(6) Depreciation and amortization

The Company shall withdraw depreciation and amortization according to the straight-line method within theservice life after considering the residual value of fixed assets and intangible assets. The Company shall regularly reviewthe service life to determine the amount of depreciation and amortization to be included in each reporting period. It shalldetermine the service life based on the past experience of similar assets and expected technological updates. If there arebig changes in previous estimates, the depreciation and amortization amount will be adjusted in the future.

(7) Deferred income tax asset

The Company will confirm deferred income tax assets for all unused tax losses when it is likely to offset losseswith enough taxable profits. This requires the management of the Company to make many judgments to estimate thetime and amount of future taxable profits to determine the amount of deferred income tax assets in combination with taxplanning strategy.

(8) Income tax

There is some uncertainty in the final tax treatment and calculation of some deals in the company’s normalbusiness activities. Whether part of the projects can be itemized before tax need the approval of the tax department. Ifthere is difference between the final result confirmed of these tax matters and the original estimated amount, then thedifference will impact the income tax and deferred income tax of the final period confirmed.

2. Correction of Accounting Error

(1) Reasons and content of the correction of accounting error

① The Company confirmed the claim income of the project of Cambodia in 2017. Among it, the actual written

confirmation of the claim amount of USD 1.13 million (equivalent to RMB XX thousand yuan) by party A isin 2018, which is intertemporal. Besides, the project and two other projects of Cambodia are being accounted.Their revenue cost was not accounted according to the actual project progress. What should have beenaccounted in 2016 was included in 2017. As a result, the operating profit of 2016 is 12 million yuan less.

② In 2016 and 2017, there were accounts opened in the name of employees used to pay the employee’s salary

and other costs. Among them, the amount in 2016 is 1.9885 million yuan and the amount in 2017 is 3.8529million yuan. As a result, the cost in 2016 was 1.9885 million yuan less, and the cost in 2017 was RMB 3.8529yuan less.

③ During the tax audit, it was found that the invoices of the construction cost of the Company in 2017 were

illegal, including illegal general VAT invoice, general VAT invoice of other provinces, and abnormal VATinvoice, with a total amount of 42.9313 million yuan. As a result, the payable income tax of the Company in2017 was 6.4397 million yuan less.

(2) Methods of correction of accounting error and its impact on financial statementConsidering that the amount of the above accounting errors is not significant, and has little impact on thecompany's assets liabilities at relevant time and the profits and losses during the period, the Company will adopt theprospective application method to correct the accounting errors. The impact on the 2018 financial statement is asfollows:

MattersHave an impact or notThe impacted statement itemCorrected amount
Intertemporal claim incomeNo
Cost paid by personal cardsYesAdministration expense of 2018+5,841,400.00
Other account payable of 2018+5,841,400.00
Illegal cost invoiceYesIncome tax of 2018+6,439,691.12
Tax payable of 2018+6,439,691.12

33. Correction of Important Accounting Policies and Accounting Estimates(1) Correction of Important Accounting Policies

√ Applicable □ Not applicable

Contents of and reasons for change of accounting policiesApproval proceduresNotes

According to the provisions of the Notice of the Ministry of Finance on the Revision and Issuance ofthe Format of Financial Statement of General Enterprises in 2018, (CK (2018) No. 15), the format offinancial statement of general enterprises has been revised. The Company has prepared financialstatements in the reporting period in accordance with the new reporting format stipulated by the Ministryof Finance. The specific subjects and amount affected are listed as follows:

No.Name of the affected statement itemAffected
amount
Retroactive adjustment method
1January 1, 2018 Note receivable and account receivable5,994,876,806.96
2January 1, 2018 Account receivable-288,201,562.88
3January 1, 2018 Account receivable-5,706,675,244.08
4January 1, 2018 Note receivable and account payable2,626,177,075.77
5January 1, 2018 Notes Payable-906,597,988.15
6January 1, 2018 Account payable-1,719,579,087.62
7January 1, 2018 Other account payable16,105,263.85

(2) Change of Important Accounting Estimates

□ Applicable √ Not applicable

34. OtherVI. Taxes1. Main Types of Taxes and Tax Rate

TaxesTaxation basisTax rate
VATFor the taxable income, the output tax should be calculated based on relevant tax rate, and the VAT shall be paid based on the difference after deducting the input tax that is allowed to be deducted in the current period0%、3%、6%、11%、17%
Urban maintenance and construction taxPaid as per 7%, 5% and 1% of the turnover tax paid actually.7%、5%、1%
Enterprise income taxPaid as per 15% and 25% of taxable income15%、25%
Educational surtaxPaid as per 3% of the turnover tax paid actually.3%
Local educational surtaxPaid as per 2% of the turnover tax paid actually.2%

Illustration for disclosure of tax payers of different corporate income tax rate

Name of tax payersIncome tax rate
Changzhi Shenzhou Laodingshan Industrial Co., Ltd.25%
Xiangfen County Taoshan Construction Co., Ltd.25%
Sino Great Wall (Xihua) Economic Development Zone Investment Co., Ltd.25%
Liupanshui Central People’s Hospital Investment Co., Ltd.25%
Sino Zhigu Industrial (Yueyang) Co., Ltd.25%
Sino Great Wall Guangxia (Wuhan) Medical Development Co., Ltd.25%
Sino Great Wall Infrastructure Investment Co., Ltd.25%
Wuhan Commercial Workers Hospital LLC25%
Sino Great Wall Medical Investment Management Co., Ltd.25%
Sino Great Wall International Engineering Co., Ltd.15%
Fujian Sino Great Wall Mingyihui Medical Investment Co., Ltd.25%
Sino Great Wall Medical Investment (Hubei) Co., Ltd.25%
Hubei Yuanyaotong Supply Chain Co., Ltd.25%
Sino Great Wall Medical Management (Inner Mongolia) Co., Ltd.25%
Sino Great Wall Health Management (Jiangsu) Co., Ltd.25%
Sino Great Wall (Beijing) Investment Fund Management Co., Ltd.25%
Sino Great Wall New Energy (Beijing) Co., Ltd.25%
Wu’an Juhe Photovoltaic Power Co., Ltd.25%
Shanghai Lingrui International Trading Co., Ltd.25%
Shenzhen Hongtulve Industrial Co., Ltd.25%
Sino Great Wall Southwest Engineering Co., Ltd.25%
Sino Great Wall Southwest Science and Technology Co., Ltd.25%
Sino Great Wall Southwest Commercial and Trading Co., Ltd.25%
Sino Great Wall Southwest Engineering Consultation Co., Ltd.25%
Sino Great Wall Decoration and Design Co., Ltd.25%
Suzhou Lvbang Wood Industry Technology Co., Ltd.25%
Huichang County Zhongcheng Construction Engineering Co., Ltd.25%
Great Wall Biaodian Energy Co., Ltd.25%
Kunming Sino Forest Industry Development Co., Ltd.25%
Sino Great Wall Development (Hengqin) Co., Ltd.25%
Sino Great Wall Real Estate (Hubei) Co., Ltd.25%
SGW America LLC21%
Sino Great Wall Group Co., Limited17%
Far eastern international engineering company,LLC20%
Sino Great Wall(Philippines) International Corporation30%
Sino Wai Man International Engineering Limited12%
Sino Great Wall (HK) Property Co., Limited17%
SGW HPEngineeringConstructionSDN.BHD24%
SGW VENTURES SDN.BHD.24%
SGW CONSTRUCTION (LANGKAWI) SDN.BHD.24%
SINO GREAT WALL GENERAL TRADING & CONTRACTING CO.LTD15%
Shenzhou Changcheng(Lao)Co., Ltd25%
Sino International Engineering (Laos) Co., Ltd.25%
Sino Great Wall Investment (Laos) Co., Ltd.25%
Sino Great Wall Group (UK) Co., Limited19%
Sino Great Wall International Engineering (MM) Co., Ltd25%
Sino Great Wall International Engineering Co., Ltd0%
Inrich Me Engineering Co., Ltd17%
SINOGREAT
Sino Great Wall International Engineering (Thailand) Co., Ltd.20%
Sino Great Wall International Engineering (CNMI) Co., LLC.21%
SINO GREAT WALL(USA).INC21%
PT.SINO GREAT WALL INVESTMENT INDONESIA25%
PT.SINO GREAT WALL CONSTRUCTION INDONESIA25%
Anshun Sino Great Wall Real Estate Development and Construction Co., Ltd.25%
Beijing Sino Xinda Real Estate Co., Ltd.25%
Sino Great Wall Hebei Xiong’an Engineering Co., Ltd.25%
Sino Great Wall Scientific and Technologic Development Co., Ltd.25%
Weifang Sino Great Wall Medical care and Health Industry Co., Ltd.25%
Sino Great Wall (Guangzhou) Elevator Engineering Co., Ltd.25%
Zhongda Chancheng Industrial (Chongqing) Co., Ltd.25%
Sino Rongju Real Estate Development Co., Ltd.25%
Chengwu County Shenguang Engineering Project Management Co., Ltd.25%
Sino Boda (Zhanjiang) Industrial Co., Ltd.25%
Sino Great Wall Industrial (Chongqing) Co., Ltd.25%

2. Tax Preferences

(1) As verified by Beijing Municipal Office, SAT in 2013 as per Tax Category Verification Notice,the taxable income of Sino Great Wall Design shall be 10% of the total income.

(2) According to provisions in Notice of the State Administration of Taxation on Several IssuesConcerning the Administration of Collection of Income Tax of Enterprises Operating Business acrossDifferent Regions and Paying Taxes on a Consolidated Basis (GSF (2008) No.28) on March 10, 2008, thehead office (parent company) of the operation units and the place of business, being established withinterritory of China and running business across China without the legal personality (i.e. running productionand operation activity across regions) shall be deemed as the enterprise for consolidated taxation. If theparent Company adopt the consolidated taxation method and the head office and the branches intend to

prepay the enterprise income tax by stages, 50% of such taxes shall be amortized to the branches andprepaid, while the other 50% shall be prepaid by the head office. The amortization ratio of each branchshall be 0.35:0.35:0.30 among the operating income, the staff salary and the total assets of each; the finalsettlement of annual corporate income tax shall be made to the tax authority by the parent Company andshall never amortized to the branches.

(3) Sino Great Wall Group Co., Limited (hereinafter referred to as “Sino Hong Kong”) and InrichMe Engineering Co., Ltd. (hereinafter referred to as “Inrich Me”) under the subsidiary Company of theCompany are enterprises established in the Hong Kong Special Administrative Region, which shall paythe enterprise profit tax at the rate of 16.5%. SINO GREAT WALL INTERNATIONAL ENGINEERING(MACAU) CO., LIMITED (hereinafter referred to as “SINO MACAU”) is an enterprise established inthe Macao Special Administrative Region, which shall pay the net profit tax and observe the progressivetax rate.

(4) Sino Great Wall International Engineering Co., Ltd. (hereinafter referred to as the “SinoInternational”), the wholly-owned subsidiary Company of the Company, was granted the Certificate ofHigh & New Technological Enterprise on November 24, 2015 which was jointly approved and issued byBeijing Municipal Science & Technology Commission, Beijing Finance Bureau, Beijing MunicipalOffice, SAT and Beijing Local Taxation Bureau. Sino International was identified as the high and newtechnological enterprise (Certificate No.: GR201511003125; Issue date: November 24, 2015; Term ofValidity: Three Years), i.e. Sino International shall pay the enterprise income tax at the rate of 15% in2015, 2016 and 2017, respectively.

(5) According to Notice of Ministry of Finance and State Administration of Taxation on Pilot forComprehensive Implementation of Business Tax Replaced by Value-added Tax (CS (2016) No.36),Wuhan Commercial Workers Hospital LLC, the wholly-owned subsidiary Company of the Company wasentitled to the preferential policies of being exempted from VAT since May 1, 2016.

3. Other

According to provisions in the Notice of the State Administration of Taxation on the Tax Policies for Implementing across the Countrythe Pilot Program of Levying Value-Added Tax in Lieu of Business Tax on the Transportation Industry and Some Modern Service Industries(CS (2012) No.71) on July 31, 2012, the design business of Sino Great Wall Decoration and Design Co., Ltd. (hereinafter referred to as the“Sino Great Wall Design”) under the subsidiary Company of the Company was changed to taxable item of value-added tax from the that ofthe business tax with the value-added tax rate of 3% since September 1, 2012 and Sino Great Wall Design was deemed as the small-scaletaxpayer.

VII. Notes to Items in Consolidated Financial Statements

1. Monetary Resources

Unit: Yuan

ItemsEnding balanceOpening balance
Cash on hand3,116,229.514,614,087.16
Bank deposit122,651,567.37642,608,503.33
Other monetary resources532,947,089.60957,751,325.63
Total658,714,886.481,604,973,916.12
Including: the total amount of overseas funds51,902,846.57

Other description

ItemsEnding balanceOpening balance
Bank acceptance guarantee deposit230,602,428.53349,043,551.56
Guarantee bond181,351,839.27555,665,432.94
Fixed time deposits or call deposits used for guarantee100,024,675.0050,000,000.00
Overseas funds with limited remittance873,465.9022,098.66
Bond for wages of migrant workers303,963.073,020,242.47
Freezing19,790,717.83
Total532,947,089.60957,751,325.63

2. Financial assets measured with fair value and having the change of fair value recorded in the gain or loss ofthe current period

Unit: Yuan

ItemsEnding balanceOpening balance

Other description:

3. Derived financial assets

□ Applicable √ Not applicable

4. Notes Receivable and Accounts Receivable

Unit: Yuan

ItemsEnding balanceOpening balance
Notes receivable1,518,790.00288,201,562.88
Accounts receivable4,202,594,258.245,706,675,244.08
Total4,204,113,048.245,994,876,806.96

(1)Notes Receivable

1) Classified Presentation of Notes Receivable

Unit: Yuan

ItemsEnding balanceOpening balance
Bank acceptance0.0015,544,160.00
Trade acceptance1,518,790.00272,657,402.88
Total1,518,790.00288,201,562.88

2) Notes receivable pledged by the Company at the end of the period

Unit: Yuan

ItemsAmounts pledged at the end of the period
Bank acceptance0.00
Trade acceptance0.00
Total0.00

3) Notes Receivable Already Endorsed or Discounted by the Company at the End of Period, but Not Coming Due Yet on the Date of BalanceSheet

Unit: Yuan

ItemsConfirmation-terminated amount at the end of periodNon-confirmation-terminated amount at the end of period
Bank acceptance4,608,144.880.00
Trade acceptance95,940,000.000.00
Total100,548,144.880.00

4) Bills turned into account receivables due to the default of the drawer of the Company at the end of term

Unit: Yuan

ItemsEnd-of-period arrears among the receivables
Trade acceptance444,932,329.41
Total444,932,329.41

Other descriptionNone

(2)Accounts receivable

1) Classified Disclosure of Accounts Receivable

Unit: Yuan

TypeEnding balanceOpening balance
Book balanceBad debt reserveBook valueBook balanceBad debt reserveBook value
AmountProportionAmountWithdrawal proportionAmountProportionAmountWithdrawal proportion
Accounts receivable with significant single amount and having bad716,094,881.3213.72%286,437,952.5340.00%429,656,928.79
debt reserve withdrawn independently
Accounts receivable with bad debt reserve withdrawn as per the portfolio of credit risk characteristics4,503,309,614.8086.28%730,372,285.3516.22%3,772,937,329.456,332,915,727.57100.00%626,240,483.499.89%5,706,675,244.08
Total5,219,404,496.12100.00%1,016,810,237.8856.22%4,202,594,258.246,332,915,727.57100.00%626,240,483.499.89%5,706,675,244.08

Accounts receivable with significant single amount and having bad debt reserve withdrawn independently at the end of term:

√ Applicable □ Not applicable

Unit: Yuan

Accounts receivable (per unit)Ending balance
Accounts receivableBad debt reserveWithdrawal proportionReasons for withdrawal
China Harbor Engineering Company Ltd.716,094,881.32286,437,952.5340.00%Shutdown for the project of Military Academy, Ministry of National Defense
Total716,094,881.32286,437,952.53----

Accounts receivable with bad debt reserve withdrawn by means of account age analysis in the portfolios:

√ Applicable □ Not applicable

Unit: Yuan

Account ageEnding balance
Accounts receivableBad debt reserveWithdrawal proportion
Within 1 year
1,435,285,534.0371,769,102.305.00%
1-2 years2,038,443,035.35190,125,609.5410.00%
2-3 years555,716,897.18166,715,069.1430.00%
3-4 years358,293,199.04179,146,599.5250.00%
4-5years76,448,267.4261,158,613.9480.00%
More than 5years64,205,580.8464,205,580.83100.00%
Total4,528,392,513.86733,120,575.26

Description about the basis for determining the portfolio:

②Situations of bad debt reserves withheld, recycled or reversed in this term

The amount of bad debt reserve withdrawn in the current period was RMB 393,318,044.30; andthe amount of bad debt reserve recovered or transferred back in the current period was RMB 0.00.

③Accounts Receivable Actually Cancelled after Verification in the Current Period: none.④Top 5 Owning Parties Classified by Ending Balance of Accounts Receivable

The aggregate amount of the top 5 owning parties classified by ending balance of accountsreceivable was RMB 2,441,187,064.70, accounting for 46.55% of the total amount of accountsreceivable at the end of the year, and the aggregate amount of bad debt reserve ending balancewithdrawn was RMB 498,149,003.15.

Unit nameEnding balance
Accounts receivableProportion to total accounts receivable (%)Bad debt reserve
China Harbor Engineering Company Ltd.831,409,897.2315.85313,687,509.07
POWERCHINA Construction Group Ltd.674,079,636.7812.8573,244,894.27
Oxley Gem (Cambodia)Co., Ltd426,011,027.468.1225,469,397.37
Henan NO.1 Thermal Power Construction Company298,264,504.825.6965,526,002.54
Cambodia Petrochemical Co., Ltd.211,421,998.414.0320,221,199.90
Total2,441,187,064.7046.55498,149,003.15

⑤Accounts receivable of which the recognition is terminated due to the transfer of financial assets:

none.

⑥Amount of assets and liabilities formed by transferring accounts receivable and continuousinvolvement: none.

In the portfolio, other receivables of bad debts withdrawn with the balance percentage method:

□ Applicable √ Not applicableIn the portfolio, other receivables of bad debts withdrawn with other methods:

The company shall comply with the disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guide No. 7

-Listed Companies Engaged in Civil Engineering Construction Business.2) Bad Debt Reserves Withdrawn, Recovered or Transferred Back in the Current PeriodThe amount of bad debt reserves withdrawn in current period is RMB 393,318,044.30 and the amount of bad debt reserves recovered orreversed in current period is RMB 0.Important amounts of bad debt reserves recovered or reversed in current period:

Unit: Yuan

Unit nameAmounts recycled or reversedRecycle Method

3) Accounts Receivable Actually Cancelled after Verification in the Current Period

Unit: Yuan

ItemsAmounts cancelled after verification

Important cancelation after verification of other accounts receivable:

Unit: Yuan

Unit nameNature of accounts receivableAmounts cancelled after verificationReasons for cancelation after verificationProcedures performed for cancelation after verificationWhether the payment is generated by related transaction

Note for accounts receivable cancelled after verification:

None

4) Top 5 Owing Parties Classified by the Ending Balance of Other Accounts Receivable

Unit nameEnding balance
Accounts receivableProportion to total accounts receivable (%)Bad debt reserve
China Harbor Engineering Company Ltd.831,409,897.2315.85313,687,509.07
POWERCHINA Construction Group Ltd.674,079,636.7812.8573,244,894.27
Oxley Gem (Cambodia) Co., Ltd426,011,027.468.1225,469,397.37
Henan NO.1 Thermal Power Construction Company298,264,504.825.6965,526,002.54
Cambodia Petrochemical Co., Ltd.211,421,998.414.0320,221,199.90
Total2,441,187,064.7046.55498,149,003.15

5) Other accounts receivable of which the recognition is terminated due to transfer of financial assetsNone6) Amount of assets and liabilities formed through transfer of other receivables and continuous involvementNoneOther description:

5. Advance Payment(1)Presentation of Advance Payments by Account Age

Unit: Yuan

Account age

Account ageEnding balanceOpening balance
AmountProportionAmountProportion
Within 1 year207,889,106.3971.74%212,854,246.0094.51%
1-2 years8,022,057.2421.31%11,257,454.645.00%
2-3 years3,620,871.706.17%903,997.250.40%
More than 3 years729,583.800.78%192,829.990.09%
Total220,261,619.13--225,208,527.88--

Description of reasons why the advance payments of an important amount with account age more than 1 year are not settled in time:

(2)Top 5 Advance Payment Objects Classified by the Ending Balance of Advance Payments

(2)Top 5 Advance Payment Objects Classified by the Ending Balance of Advance PaymentsThe aggregate amount of the top 5 advance payment objects classified by the ending balance ofadvance payments was RMB 85,197,913.66, accounting for 38.60% of the total amount of the endingbalance of advance payments.

Unit nameRelationshipEnding balanceProportion to theAdvanceReasons for not
with the companytotal ending balance of advance payments (%)payment timesettlement
Jiangsu Juye Jianshe Group Co., Ltd.Subcontractor27,020,017.5612.24Within 2 yearAdvance payment for subcontracted project
Zhongcheng Jianye Construction Co., Ltd.Subcontractor25,421,813.7711.52Within 2 yearAdvance payment for subcontracted project
Shandong Zhiyuan Building Installation Engineering Co., Ltd.Subcontractor11,430,371.935.18Within 1 yearAdvance payment for subcontracted project
Longyan City Hengda Engineering Co., Ltd.Subcontractor11,552,049.405.23Within 1 yearAdvance payment for subcontracted project
Xi'an Bihui Road and Bridge Engineering Co., Ltd.Subcontractor9,773,661.004.43Within 1 yearAdvance payment for subcontracted project
Total85,197,913.6638.60
?

Other description:

6. Other accounts receivable

Unit: Yuan

ItemsEnding balanceOpening balance
Other accounts receivable2,186,223,361.401,674,675,360.28
Total2,186,223,361.401,674,675,360.28

(1)Interest receivable

1) Classification of interest receivable

Unit: Yuan

ItemsEnding balanceOpening balance

2) Important overdue interest

Unit: Yuan

Borrowing unitEnding balanceOverdue timeOverdue reasonWhether impairment occurs and the basis for its judgment

Other description:

(2)Dividends receivable

1) Dividends receivable

Unit: Yuan

Items (or the invested unit)Ending balanceOpening balance

2) Important dividends receivable over one year of account age

Unit: Yuan

Items (or the invested unit)Ending balanceAccount ageReason for not recyclingWhether impairment occurs and the basis for its judgment

Other description:

(3)Other accounts receivable

1) Classified Disclosure of Other Accounts Receivable

Unit: Yuan

TypeEnding balanceOpening balance
Book balanceBad debt reserveBook valueBook balanceBad debt reserveBook value
AmountProportionAmountWithdrawal proportionAmountProportionAmountWithdrawal proportion
Other accounts receivables that are individually significant and for which individual bad debt reserves are withdrawn22,402,980.000.95%2,000,000.008.93%20,402,980.00
Other accounts receivable with bad debt reserve withdrawn as per the portfolio of credit risk characteristics2,341,177,867.3498.92%175,357,485.947.49%2,165,820,381.401,820,332,846.84100.00%145,657,486.568.07%1,674,675,360.28
Other accounts receivable with insignificant single amount and having bad debt reserve withdrawn separately2,963,005.730.13%2,963,005.73100.00%
Total2,366,543,853.07100.00%180,320,491.672,186,223,361.401,820,332,846.84100.00%145,657,486.561,674,675,360.28

Other accounts receivables that are individually significant and for which individual bad debt reserves are withdrawn at the end of the period:

√ Applicable □ Not applicable

Unit: Yuan

Other accounts receivable (per unit)Ending balance
Other accounts receivableBad debt reserveWithdrawal proportionReasons for withdrawal
Accounting Center of Forestry Bureau of Yongqiao District, Suzhou City2,000,000.002,000,000.00100.00%Low likelihood of recycling
ACURA Kliniken Group Baden-Baden GmbH20,402,980.00Assets held for sale
Total22,402,980.002,000,000.00----

Other accounts receivable with bad debt reserve withdrawn by means of account age analysis in the portfolios:

√ Applicable □ Not applicable

Unit: Yuan

Account ageEnding balance
Other accounts receivableBad debt reserveWithdrawal proportion
Within 1 year
1,980,686,398.1099,034,319.915.00%
1-2 years248,752,112.9924,875,211.3010.00%
2-3 years49,079,589.3114,723,876.7930.00%
3-4 years48,461,428.8624,230,714.4350.00%
4-5 years8,524,872.846,819,898.2780.00%
More than 5 years5,673,465.245,673,465.24100.00%
Total2,341,177,867.34175,357,485.93

Description about the basis for determining the portfolio:

②Classified Disclosure of Other Accounts Receivable by Nature

Nature of accountsEnding book balanceBook balance at the beginning of year
Tender bond, performance bond and deposit359,746,410.63564,988,488.94
Pretty Cash and personal intercourse funds400,356,527.1945,065,829.65
Intercourse funds of the organization1,534,777,052.091,191,088,012.16
Others71,663,863.1619,190,516.09
Total2,366,543,853.071,820,332,846.84

③Bad Debt Reserves of Other Accounts Receivable Withdrawn, Recovered or Transferred Back inthe Year

The amount of bad debt reserves withdrawn in current period is RMB34,911,005.11.

④Top 5 Owing Parties Classified by the Ending Balance of Other Accounts Receivable

Unit nameNature of accountsEnding balanceAccount ageProportion to total ending balance of other accountsBad debt reserve Ending balance

receivable (%)Longyan City Hengda EngineeringCo., Ltd.

Longyan City Hengda Engineering Co., Ltd.Intercourse funds of the organization335,179,148.00Within 2 year14.1621,608,957.40
POWERCHINA Construction Group Ltd.Intercourse funds of the organization250,908,351.381-2 years10.625,090,835.14
Yueyang Public Resource Trading CenterTender bond131,500,000.001-2 years5.5613,150,000.00
Hebei Xuxing Industrial Co., Ltd.Tender bond55,000,000.001-2 years2.325,500,000.00
China Harbor Engineering Company Ltd.Intercourse funds of the organization54,278,966.48Within 3 year2.296,330,428.72
Total——826,866,465.86——34.9371,680,221.26

⑥Accounts Receivable Involving Governmental Subsidy: none.⑦Other accounts receivable of which the recognition is terminated due to transfer of financial assets: none.⑧Amount of assets and liabilities formed through transfer of other receivables and continuous involvement: none.

In the portfolio, other receivables of bad debts withdrawn with the balance percentage method:

□ Applicable √ Not applicableIn the portfolio, other receivables of bad debts withdrawn with other methods:

□ Applicable √ Not applicable2) Situations of bad debt reserves withheld, reversed or recycled in this termThe amount of bad debt reserves withdrawn in current period is RMB and the amount of bad debt reserves recovered or reversed incurrent period is RMB .Important amounts of bad debt reserves recovered or reversed in current period:

Unit: Yuan

Unit nameAmounts reversed or recycledRecycle method

3) Status of actual verified other receivables in current period

Unit: Yuan

ItemAmounts cancelled after verification

Important cancelation after verification of other accounts receivable:

Unit: Yuan

Unit nameNature of other accounts receivableAmounts cancelled after verificationReasons for cancelation after verificationProcedures performed for cancelation after verificationWhether the payment is generated by related transactions

Notes on other accounts receivable cancelation after verification:

4) Classification of Other Accounts Receivable by Nature

Unit: Yuan

Nature of accountsEnding book balanceBook balance at the beginning of year
Tender bond, performance bond and deposit359,746,410.63564,988,488.94
Pretty cash and intercourse funds of individuals400,356,527.1945,065,829.65
Intercourse funds of the organization1,534,777,052.091,191,088,012.16
Others71,663,863.1619,190,516.09
Total2,366,543,853.071,820,332,846.84

5) Top 5 Owing Parties Classified by the Ending Balance of Other Accounts Receivable

Unit: Yuan

Unit nameNature of accountsEnding balanceAccount ageProportion to total ending balance of other accounts receivableBad debt reserve Ending balance

6) Accounts Receivable Involving Governmental Subsidy

Unit: Yuan

Unit nameGovernmental subsidy project nameEnding balanceEnding account ageEstimated possession time, amount and basis

7) Other accounts receivable of which the recognition is terminated due to transfer of financial assets8) Amount of assets and liabilities formed through transfer of other receivables and continuous involvementOther description:

7. Inventories

Whether the company shall comply with the disclosure requirements of the real estate industryNo

(1)Classification of Inventories

Unit: Yuan

ItemsEnding balanceOpening balance
Book balanceDepreciation reserveBook valueBook balanceDepreciation reserveBook value
Raw materials110,557.92110,557.921,810,694.491,810,694.49
Merchandise inventory10,708,600.5010,708,600.509,328,819.669,328,819.66
Completed and unsettled assets formed by the construction contract678,132,183.224,354,226.05673,777,957.17516,478,683.845,051,867.60511,426,816.24
Development costs30,299,350.3630,299,350.3634,272,995.1134,272,995.11
Others2,635,112.282,635,112.28
Total721,885,804.284,354,226.05717,531,578.23561,891,193.105,051,867.60556,839,325.50

Whether the company shall comply with the disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure GuideNo. 4-Listed Companies Engaged in the Seed Industry and Planting BusinessNoThe company shall comply with the disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guide No. 11

-Listed Companies Engaged in the Jewelry Related BusinessNo

(2)Depreciation Reserve of Inventories

Unit: Yuan

ItemsOpening balanceAmount increased of current periodAmount decreased of current periodEnding balance
WithdrawnOthersTransferred-back or written-offOthers
Completed and unsettled assets formed by the construction contract5,051,867.60697,641.554,354,226.05
Total5,051,867.60697,641.554,354,226.05

(3)Description about Capitalized Amount of Borrowing Costs Contained in Ending Balance of Inventories(4)The completed and unsettled assets formed by the construction contract at the end of the period

Unit: Yuan

ItemsAmount
Aggregate costs incurred18,506,213,679.77
Aggregate gross profits acknowledged4,332,256,515.21
Minus: estimated losses4,354,226.05
Amount settled22,160,338,011.76
Completed and unsettled assets formed by the construction contract673,777,957.17

Other description:

8、Assets Held for Sale

Unit: Yuan

ItemsEnding book valuefair valueEstimated disposal costEstimated disposal time
February 02, 2019
Including: fixed assets0.00
Investment real estate0.00
Equity investment105,075,792.00
0.00February 02, 2019
0.00
Total105,075,792.00--

Other description:

Note: in order to improve the company's financial situation and revitalize its effective assets, the company decided to transfer 94% ofthe equity of Acura Kliniken Baden-Baden GmbH. The company signed the equity transfer agreement with Hong Kong CongzhongInvestment Co., Ltd. on February 2, 2019, with the transfer price of RMB 190 million.

(2)Impairment provision of assets held for sale

ItemsBook value at the beginning of the yearAmount Withdrawn of current periodAmount decreased of current periodEnding balance
Amount recoveredOther amount decreased
Non-current assets held for sale
Including: fixed assets
Investment real estate
Equity investment
Disposal group held for sale
Including: fixed assets
Investment real estate
Equity investment
Total————

(3)At the end of the year, the accumulated amount of other comprehensive incomes related to theabove non-current assets held for sale was RMB 0.00.(4)It is no longer classified as assets held for sale and removal from Disposal group held for sale thisyear: none.

9. Non-current Assets Due Within One Year

Unit: Yuan

ItemsEnding balanceOpening balance

Other description:

10. Other Non-current Assets

Unit: Yuan

ItemsEnding balanceOpening balance
Advance tax291,392.341,779,133.63
Input tax to be deducted or verified5,504,405.1015,347,777.42
Total5,795,797.4417,126,911.05

Other description:

11. Financial Assets Available for Sale(1)Financial assets available for sale

Unit: Yuan

ItemsEnding balanceOpening balance
Book balanceDepreciation reserveBook valueBook balanceDepreciation reserveBook value
Available-for-sale equity instruments10,338,500.0010,338,500.0010,338,500.0010,338,500.00
Measured at Costs10,338,500.0010,338,500.0010,338,500.0010,338,500.00
Total10,338,500.0010,338,500.0010,338,500.0010,338,500.00

(2)Available-for-Sale Financial Assets Measured by Fair Value at the End of Period

Unit: Yuan

Classification of financial assets available for saleAvailable-for-sale equity instrumentsAvailable-for-sale debt instruments:Total

(3)Available-for-Sale Financial Assets Measured by Cost at the End of Period

Unit: Yuan

Invested unitsBook balanceDepreciation reserveProportion of shares held in invested units (%)Cash dividends of current period
At the beginning of the yearAmount increased of current periodAmount decreased of current periodEnding amountAt the beginning of the yearAmount increased of current periodAmount decreased of current periodEnding amount
Zhanjiang Construction & Engineering Co., Ltd.10,338,500.0010,338,500.0019.00%
Total10,338,500.0010,338,500.00--

(4)Changed situations of impairment of financial assets available for sale during the reporting period

Unit: Yuan

Classification of financial assets available for saleAvailable-for-sale equity instrumentsAvailable-for-sale debt instruments:Total

(5)Description of the ending fair value of the available-for-sale equity instruments seriously reduced ornon-temporarily reduced with impairment reserve not withdrawn

Unit: Yuan

Available-for-sale equity instruments projectInvestment costEnding fair valueThe decline in fair value relative to costContinuous decline time (months)Amount of impairment withdrawnReason for impairment not withdrawn

Other description

12. Held-to-maturity Investment(1)Held-to-maturity investment

Unit: Yuan

ItemsEnding balanceOpening balance
Book balanceDepreciation reserveBook valueBook balanceDepreciation reserveBook value

(2)Important held-to-maturity investment at the end of the period

Unit: Yuan

Bond projectPar valuePar interest rateActual interest rateDue date

(3)Reclassified held-to-maturity investment of the current period

Other description

13. Long-Term Accounts Receivable(1)Long-Term Accounts Receivable

Unit: Yuan

ItemsEnding balanceOpening balanceRange of discount rate
Book balanceBad debt reserveBook valueBook balanceBad debt reserveBook value
Long-Term Accounts Receivable16,708,613.1916,708,613.1914,328,557.8214,328,557.82
Total16,708,613.1916,708,613.1914,328,557.8214,328,557.82--

(2)Long-Term accounts receivable of which the recognition is terminated due to transfer of financial assets

Notes: Sino Great Wall Group Co., Limited, the subsidiary company of the Company, concluded andsigned the cooperation agreement with Hong Kong Yick Hing Construction Co. Ltd. (hereinafter referredto as "Hong Kong Yick Hing”) on October 10, 2017 on the jointly founding of SGW. Yick HingConstruction Engineering (Hong Kong) Limited (hereinafter referred to as "SGW. Yick HingConstruction”), with Sino Great Wall Group Co., Limited contributing HKD 6 million and holding 60%shares and Hong Kong Yick Hing contributing HKD 4 million and holding 40% shares. The business ofSGW. Yick Hing Construction shall be managed by the Board of Directors. There are three seats in theBoard of Directors, with two for Sino Great Wall and one for Hong Kong Yick Hing. However, only thedirector appointed by Yick Hing can serve as the chairman of the Board of Directors meeting, in case ofwhose absence from the Board of Directors meeting, an alternate shall take this place. In the event of thesame votes, the chairman of the Board of Directors meeting has the right to vote the casting vote; theresolution of the Board of Directors shall be issued via the majority vote but the director of Hong KongYick Hing possesses the veto right and has the right to agree that the revenue shall be calculated as thelong-term receivables based on constant rate of return.

(2)Long-term accounts receivable of which the recognition is terminated due to transfer offinancial assets: none.

(3)Amount of assets and liabilities formed through transfer of long-term accounts receivable andcontinuous involvement: none.

(3)Amount of assets and liabilities formed through transfer of long-term accounts receivable and continuousinvolvement

Other description

14. Long-term Equity Investments

Unit: Yuan

Invested unitsOpening balanceChanges of current periodEnding balanceEnding balance of depreciation reserve
Additional investmentNegative investmentGains and losses on investments recognized with equity methodOther comprehensive income adjustmentsOther changes in equityDeclare the payment of cash dividends or profitsDepreciation reserve withdrawnOthers
I. Joint ventures
II. Jointly-run enterprises
Sino Great Wall Zhihui Housing Property (Zhanjiang) Co., Ltd.24,000,000.00-420,828.2923,579,171.71
Cenang Resort Sdn Bhd83,258,639.1283,258,639.12
III. Subsidiary
AlorVista Development Sdn Bhd25,292,312.6825,292,312.6825,292,312.6825,292,312.68
Subtotal49,292,312.6883,258,639.12-420,828.2925,292,312.68132,130,123.5125,292,312.68
Total49,292,312.6883,258,639.12-420,828.2925,292,312.68132,130,123.5125,292,312.68

Other description

15. Investment Real Estate(1)Investment real estate using cost measurement

□ Applicable √ Not applicable

(2)Investment real estate using fair value measurement

□ Applicable √ Not applicable

(3)Investment real estate with the certificate of title not transacted

Unit: Yuan

ItemsBook valueReason(s) for the failure to transact the certificate of title

Other description

16、Fixed Assets

Unit: Yuan

ItemsEnding balanceOpening balance
Fixed assets158,746,947.91174,537,150.56
Total158,746,947.91174,537,150.56

(1)Fixed assets

Unit: Yuan

ItemsHouses and buildingsMechanical equipmentTransportation EquipmentTransportation equipmentTotal
I. Original book value
1. Opening balance103,857,727.5099,011,854.5141,578,019.3714,847,444.63259,295,046.01
2. Amount increased of current period45,846.639,855,943.682,397,598.49788,453.0613,087,841.86
(1)Purchase45,846.639,855,943.682,397,598.49788,453.0613,087,841.86
(2)Transfer-in of construction in progress
(3)Increase of business combination
3. Amount decreased of current period565,613.953,796,972.944,934,924.281,685,768.9910,983,280.16
(1)Disposal or retirement565,613.953,796,972.944,934,924.281,685,768.9910,983,280.16
4. Ending balance103,337,960.18105,070,825.2539,040,693.5813,950,128.70261,399,607.71
II. Accumulative depreciation
1. Opening balance15,127,800.9430,513,047.9216,465,368.369,502,963.2471,609,180.46
2. Amount increased of current period14,889,879.2110,245,735.168,611,485.052,173,342.3135,920,441.73
(1)Withdrawn14,889,879.2110,245,735.168,611,485.052,173,342.3135,920,441.73
3. Amount decreased223,358.6826,600.004,624,998.262,005.454,876,962.39
of current period
(1)Disposal or retirement223,358.6826,600.004,624,998.262,005.454,876,962.39
4. Ending balance29,794,321.4740,732,183.0820,451,855.1511,674,300.10102,652,659.80
III. Depreciation reserve
1. Opening balance
2. Amount increased of current period
(1)Withdrawn
3. Amount decreased of current period
(1)Disposal or retirement
4. Ending balance
IV. Book value
1. Ending book value73,543,638.7164,338,642.1718,588,838.432,275,828.60158,746,947.91
2. Opening book value84,132,304.9666,390,485.1620,774,962.843,239,397.60174,537,150.56

(2)Temporarily idle fixed assets

Unit: Yuan

ItemsOriginal book valueAccumulative depreciationDepreciation reserveBook valueNote

(3)Fixed asset rented through financing lease

Unit: Yuan

ItemsOriginal book valueAccumulative depreciationDepreciation reserveBook value
House buildings11,152,810.3610,554,734.50598,075.86
Mechanical equipment34,196,914.0018,831,684.5915,365,229.41

(4)Fixed assets leased through operating leases

Unit: Yuan

ItemsEnding book value

(5)Fixed assets with the certificate of title not transacted

Unit: Yuan

ItemsBook valueReason(s) for the failure to transact the certificate of title
Suzhou plants8,574,218.59Being processed
International engineering19,863,248.79Being processed

Other description

(6)Disposal of fixed assets

Unit: Yuan

ItemsEnding balanceOpening balance

Other description

17.Construction in Progress

Unit: Yuan

ItemsEnding balanceOpening balance
Construction in progress36,697,284.044,968,590.96
Total36,697,284.044,968,590.96

(1)Construction in Progress

Unit: Yuan

ItemsEnding balanceOpening balance
Book balanceDepreciation reserveBook valueBook balanceDepreciation reserveBook value
Equipment and Construction in progress36,697,284.0436,697,284.044,968,590.964,968,590.96
Total36,697,284.0436,697,284.044,968,590.964,968,590.96

(2)Change of Important Projects of Construction in Progress in Current Period

Unit: Yuan

Name of itemsBudget amountOpening balanceAmount increased of current periodAmount transferred into fixed assets in current periodOther amount decreased in current periodEnding balanceProportion of accumulative project input to the budgetProject progressAccumulative amount of interest capitalizationIncluding: Amount of interest capitalization in the current periodCurrent interest capitalization rateCapital source
Liangdu Central Hospital of Liupanshui City (tentative name) medical and nursing integration project2,630,910.962,370,537.985,001,448.94
PPP project of the north coast landscape engineering of Huanbaiyang Lake (Central Lake), PPP project of Baiyang Lake Headquarters Economic Port,1,112,880.007,363,471.418,476,351.4167%
Xingang District, Chenglingji, Hunan Province
Construction Project of Radio and Television Media Activity Center, Chengwu County15,792,351.4815,792,351.4813%
Total3,743,790.9625,526,360.8729,270,151.83------

(3)Impairment provision of project under construction withdrawn in the period

Unit: Yuan

ItemsCurrent withdrawal amountReason for withdrawal

Other description

(4)Engineering materials

Unit: Yuan

ItemsEnding balanceOpening balance
Book balanceDepreciation reserveBook valueBook balanceDepreciation reserveBook value

Other description:

18. Productive Biological Asset(1)Productive biological assets measured at costs

□ Applicable √ Not applicable

(2)Productive biological assets measured according to fair value

□ Applicable √ Not applicable

19. Oil and gas assets

□Applicable √ Not applicable

20. Intangible Assets

(1)Intangible Assets

Unit: Yuan

ItemsLand use rightPatent rightNon-patent technologySoftwareTotal
I. Original book value
1. Opening balance132,460,370.944,551,469.92137,011,840.86
2. Amount increased of current period
(1)Purchase
(2)Internal research and development
(3)Amount decreased of current period
3. Amount decreased of current period23,839,368.3523,839,368.35
(1)Disposal
(2)Consolidation scope reduction23,839,368.3523,839,368.35
4. Ending balance108,621,002.594,551,469.92113,172,472.51
II. Accumulative amortization
1. Opening balance6,882,267.852,605,128.019,487,395.86
2. Amount increased of current period3,062,788.20902,968.923,965,757.12
(1)Withdrawn
3. Amount decreased of current period201,932.14201,932.14
(1)Disposal
(2)Consolidation scope reduction201,932.14201,932.14
4. Ending balance9,743,123.913,508,096.9313,251,220.84
III. Depreciation reserve
1. Opening balance
2. Amount increased of current period
(1)Withdrawn
3. Amount decreased of current period
(1)Disposal
4. Ending balance
IV. Book value
1. Ending book value98,877,878.681,043,372.9999,921,251.67
2. Opening book value125,578,103.091,946,341.91127,524,445.00

The proportion of ending intangible assets generated via internal R&D of the Company in the balance of intangible assets.

(2)Conditions of land use right with incomplete certificates of title

Unit: Yuan

ItemsBook valueReason(s) for the failure to transact the certificate of title

Other description:

21. Development Expenditure

Unit: Yuan

ItemsOpening balanceAmount increased of current periodAmount decreased of current periodEnding balance

Other description

22. Goodwill(1) Original book value of goodwill

Unit: Yuan

Name of invested units or the matters forming goodwillOpening balanceAmount increased of current periodAmount decreased of current periodEnding balance
Shenzhen Yatian Decoration Design Engineering Co., Ltd.6,724,316.916,724,316.910.00
Wuhan Commercial Workers Hospital LLC27,257,314.4927,257,314.49
Sino Great Wall Southwest Engineering Co., Ltd.17,948,978.5317,948,978.53
Sino Great Wall Construction Construction Co., Ltd.6,943,534.866,943,534.86
Alor Vista Development Sdn Bhd5,609,206.725,609,206.72
SAFAT GULF GENERAL TRADING & CONTRACTING COMPANY5,547,635.005,547,635.00
Far eastern international engineering company, LLC10,920.0410,920.04
Total70,041,906.5513,667,851.775,609,206.7250,764,848.06

(2) Depreciation Reserve of Goodwill

Unit: Yuan

Name of invested units or the matters forming goodwillOpening balanceAmount increased of current periodAmount decreased of current periodEnding balance
Shenzhen Yatian Decoration Design Engineering Co., Ltd.
Wuhan Commercial Workers Hospital LLC
Sino Great Wall Southwest Engineering Co., Ltd.17,948,978.5317,948,978.53
Sino Great Wall Construction Co., Ltd.
Alor Vista Development Sdn Bhd
SAFAT GULF GENERAL TRADING & CONTRACTING COMPANY5,547,635.005,547,635.00
Far eastern international engineering company, LLC
Total5,547,635.0017,948,978.5323,496,613.53

Relevant information of goodwill-related asset group or portfolio

(3) Process of impairment test of goodwillSino Great Wall Southwest Engineering Co., Ltd., a subsidiary of the Company, has stopped allconstruction projects and has negative net assets. Given the failure to project positive future operation, theCompany decides to record full goodwill impairment.

Description of process of goodwill impairment test, key factors (including estimated growth rate at the time of future cash flow valueestimation, growth rate during the stable period, profit rate, discount rate and) and the method to confirm the loss of goodwill impairment:

Influences of goodwill impairment test

Other description

23. Long-term deferred expense

Unit: Yuan

ItemsOpening balanceAmount increased of current periodAmount amortized of current periodOther amount decreasedEnding balance
Leasehold improvement7,029,913.151,207,117.004,103,741.4856,698.694,076,589.98
Overseas fees for letter of guarantee3,095,000.001,903,525.811,191,474.19
Others2,235,044.00775,419.271,459,624.73
Less: Long-term deferred expenses coming due within 1 year
Total10,124,913.153,442,161.006,782,686.5656,698.696,727,688.90

Other description

Deferred income tax assets/deferred income tax liabilities(1) Non-offset deferred income tax assets

Unit: Yuan

ItemsEnding balanceOpening balance
Deductible temporary difference(1) Deferred Income Tax AssetsDeductible temporary difference(1) Deferred Income Tax Assets
Asset depreciation reserve700,024,233.95107,117,209.33766,127,594.16118,233,337.36
Deductible losses43,486,026.0310,871,506.51
Total743,510,259.98117,988,715.84766,127,594.16118,233,337.36

(2) Non-offset deferred income tax liabilities

Unit: Yuan

ItemsEnding balanceOpening balance
Taxable temporary differenceDeferred Income Tax LiabilitiesTaxable temporary differenceDeferred Income Tax Liabilities
Appraised increment of assets for business combination not under97,477,824.7224,369,456.18105,725,885.8626,088,961.71
the same control
Total97,477,824.7224,369,456.18105,725,885.8626,088,961.71

(3) Offset deferred income tax assets or liabilities

Unit: Yuan

ItemsOffset amount of deferred tax assets and liabilities at the end of a periodBalance of deferred tax assets and liabilities at the end of a periodOffset amount of deferred tax assets and liabilities at the beginning of a periodBalance of deferred tax assets and liabilities at the beginning of a period
(1) Deferred Income Tax Assets117,983,727.91118,233,337.36
Deferred Income Tax Liabilities24,369,456.1826,088,961.71

(4) Details of unconfirmed deferred income tax assets

Unit: Yuan

ItemsEnding balanceOpening balance
Deductible temporary difference506,759,969.5620,178,730.17
Deductible losses1,297,146,979.9879,207,601.38
Total1,803,906,949.5499,386,331.55

(5) Deductible losses of unconfirmed deferred income tax assets due in the following years

Unit: Yuan

YearEnding balanceOpening balanceNote

Other description:

25. Other non-current assets

Unit: Yuan

ItemsEnding balanceOpening balance
PPP Project investment664,524,570.00610,524,570.00
Advance payment for purchasing long-term assets129,221,120.79283,729,420.79
Other project investment121,953,450.20175,340,581.32
Others8,810,652.00
Less: Amount due within a year
Total924,509,792.991,069,594,572.11

Other description:

(1) Description of PPP Project

ProjectsRegistered capital (ten thousand Yuan)Subscribed investment amount (ten thousand Yuan)Shareholding proportionOpening amount (ten thousand Yuan)Amount increased of current period (ten thousand Yuan)Amount decreased of current periodClosing amount (ten thousand Yuan)
Luyi Shuguang Medical Industrial Investment Construction Co., Ltd.9,600.004,896.0051%4,896.004,896.00
Huichang County Sino Great Wall Medical Industrial Construction Service Co., Ltd.9,559.008,507.5189%8,507.518,507.51
Sino Great Wall (Fugou) High-speed Railways District Investment Co., Ltd.13,050.657,830.3960%7,830.397,830.39
Anyang Sino Great Wall Medical Management Service Co., Ltd.26,680.0025,346.0090%25,346.0025,346.00
Sino Great Wall (Fugou) Jialu River Comprehensive Treatment Investment Co., Ltd.3,986.163,587.5490%200.003,600.003,800.00
Sino Great Wall (Fugou) Fitness Center Investment Co., Ltd.4,191.003,771.9090%3,772.563,772.56
Sino Great Wall Shaanxi Fuyan Industrial Park Investment Co., Ltd.5,000.004,500.0090%4,500.004,500.00
Wuchuan City Sino Great Wall People’s Hospital Investment CO., Ltd.21,700.0017,360.0080%800.00800.00
Wuchuan City Sino Great Wall Chinese Medicine Hospital Investment CO., Ltd.6,000.004,800.0080%0.00
Guizhou Hongqiao Sino Great Wall Healthcare Real Estate Investment Co., Ltd.15,200.0011,400.0080%1,000.001,000.00
Gongxian Sino Healthcare Investment Co., Ltd.15,000.0013,500.0040%6,000.006,000.00
Total66,386.8151,393.3461,052.4625,700.0066,452.46

The PPP Project Company invested by the Company shall be operated in accordance with theestablished way. The rights, obligations, and related activities under which the Project Company becontrolled are established through explicit contract terms or arrangements at the beginning of theestablishment. In addition, there are representatives sent by the government among the members of theBoard of Directors of the Project Company and the variable returns of the Project Company are generallyfixed. The Project Company is not within the control scope of the Company, so the PPP Project Companyis not included in the scope of the consolidation.(2) Advance payment for purchasing long-term assets include: Housing payment of 129,221,120.79RMB which can be used to offset liabilities.

(3) Other project investment

No.Company NameAmount
1UPL LAO CO., LTD.63,803,450.00
2Sino Hengda Engineering Co., Ltd.58,150,000.20
Total121,953,450.20

26. Short-term Loans(1) Classification of Short-Term Loans

Unit: Yuan

ItemsEnding balanceOpening balance
Pledged loan50,000,000.00150,000,000.00
Mortgaged loan112,696,582.102,137,870,000.00
Guaranteed loan2,650,398,046.911,114,073,017.67
Credit loan49,490,000.00
Trade acceptance for which endorsement and discounting have been conducted while still being unmatured at the balance sheet date75,257,402.88
Total2,862,584,629.013,477,200,420.55

Description for classification of short-term loans:

(2) Description for overdue but unpaid short-term loans

The total overdue but unpaid short-term loans by the end of this period is 1,562,683,719.03 RMB, in which details of significant overdue butunpaid short-term loans are as follow:

Unit: Yuan

BorrowerEnding balanceInterest rateOverdue periodLate payment interest rate
DBS Bank47,081,552.003.15%September 27, 2018
Bank of Ningbo Shenzhen Branch43,233,518.836.09%June 1, 2018
Xiamen International Bank Zhuhai Branch44,291,741.547.00%May 26, 2018
Chang'an International Trust Co., Ltd.115,874,736.707.00%June 22, 2018
Industrial International Trust Co., Ltd.100,000,000.008.60%August 9, 2018
Bridge Trust Co., Ltd.300,000,000.007.50%August 21, 2018
Shanghai Pudong Development Bank Shenzhen Center District Branch70,000,000.006.09%August 29, 2018
Bank of Jiujiang Zhuhai Branch97,768,794.96August 22, 2018
Shenzhen Rural Commercial Bank Futian Branch9,200,000.006.09%September 16, 2018
Shenzhen Rural Commercial Bank Meilin Branch8,800,000.006.09%November 17, 2018
Shenzhen Rural Commercial Bank Meilin Branch27,800,000.00November 17, 2018
China Bohai Bank Shenzhen Branch50,000,000.005.22%December 21, 2018
China Bohai Bank Shenzhen Branch50,000,000.005.22%December 21, 2018
CITIC Trust Co., Ltd.210,000,000.007.65%June 28, 201816.00%
Industrial International Trust Co., Ltd.100,000,000.008.00%September 29, 2018
Industrial Bank Houhai Branch288,633,375.008.00%October 17, 2018
Total1,562,683,719.03------

Other description:

Note: ① The loan is due on September 27, 2018. Considering the Company failed to pay back ontime due to fund shortage, DBS Bank Beijing Branch has withdrawn a guarantee deposit of 50 millionRMB to back up the overdue loan. The loan has not be paid back but DBS Bank has waived furtherinterest charges by September 27, 2018.

27. Changes are measured by the fair value and will be recorded in the gain or loss of the current period

Unit: Yuan

ItemsEnding balanceOpening balance

Other description:

28. Derived financial liabilities

□ Applicable √ Non-applicable

29. Notes payable and accounts payable

Unit: Yuan

ItemsEnding balanceOpening balance
Notes payable1,034,087,499.72906,597,988.15
Accounts payable892,155,630.431,719,579,087.62
Total1,926,243,130.152,626,177,075.77

(1) Classified presentation of notes receivable

Unit: Yuan

TypeEnding balanceOpening balance
Trade acceptance471,267,864.12283,190,010.00
Bank acceptance562,819,635.60623,407,978.15
Total1,034,087,499.72906,597,988.15

Overdue but unpaid notes receivable by the end of the period is 427,190,071.71 RMB.

(2) Presentation of accounts payable

Unit: Yuan

ItemsEnding balanceOpening balance
Project construction cost870,866,176.061,704,130,649.60
Payment for purchasing long-term assets
Payment for medicine17,497,130.2315,448,438.02
Others3,792,324.14
Total892,155,630.431,719,579,087.62

(3) Significant accounts receivable with account age of more than 1 year

Unit: Yuan

ItemsEnding balanceCauses for non-payment or carryover

Other description:

30. Items received in advance(1) Presentation of items received in advance

Unit: Yuan

ItemsEnding balanceOpening balance
Unfinished project with settled construction cost10,850,086.84
Advance payment for project construction cost391,350,850.34145,513,588.44
Advance payment for medical treatment845,407.87866,264.23
Advance payment for lease43,733,325.87
Advance payment for rent31,322,073.00
Total478,101,743.92146,379,852.67

(2) Significant items received in advance with account age of more than 1 year

Unit: Yuan

ItemsEnding balanceCauses for non-payment or carryover

(3) Description for unfinished project with settled construction cost due to end-of-period contract conclusion

Unit: Yuan

ItemsAmount
Accrued occurred cost1,449,011,469.60
Accrued recognized gross profit290,007,053.46
Settled amount1,749,868,609.90
Unfinished project with settled construction cost arising from contract conclusion-10,850,086.84

Other description:

31. Long-term payroll payable(1) Presentation of long-term payroll payable

Unit: Yuan

ItemsOpening balanceAmount increased of current periodAmount decreased of current periodEnding balance
I. Short-term remuneration20,727,897.18368,573,235.31303,232,214.7686,068,917.73
2. Post-demission welfare - defined contribution plans1,183,644.8920,080,481.9620,918,185.73345,941.13
Total21,911,542.07388,653,717.27324,150,400.4986,414,858.86

(2) Presentation of short-term remuneration

Unit: Yuan

ItemsOpening balanceAmount increased of current periodAmount decreased of current periodEnding balance
1. Salary, bonus, allowance and subsidy20,075,245.00324,705,806.14259,868,209.6084,912,841.53
2. Employees’ welfare expense23,251,690.7122,328,108.54923,582.18
3. Social insurance premium599,087.7211,728,150.4012,274,222.8453,015.28
Including: Medical insurance premium504,031.4110,323,842.0710,824,592.083,281.40
Industrial injury insurance premium22,668.30594,546.56601,117.5116,097.35
Maternity insurance premium72,388.01809,761.77848,513.2533,636.53
4. Housing fund53,564.468,084,058.907,958,144.62179,478.74
5. Labor union outlay and employees’ education outlay803,529.16803,529.16
Total20,727,897.18368,573,235.31303,232,214.7686,068,917.73

(3) Presentation of Drawing Plans Set Up

Unit: Yuan

ItemsOpening balanceAmount increased of current periodAmount decreased of current periodEnding balance
1. Basic pension insurance1,154,346.0019,327,824.9020,136,651.60345,519.30
2. Unemployment insurance premium29,298.89752,657.06781,534.13421.83
Total1,183,644.8920,080,481.9620,918,185.73345,941.13

Other description:

32. Taxes payable

Unit: Yuan

ItemsEnding balanceOpening balance
Value-added tax85,518,697.3032,678,325.28
Enterprise income tax221,830,373.42239,018,994.88
Personal income tax6,468,895.33374,031.94
Urban maintenance and construction tax4,026,082.613,928,587.22
Educational surtax3,001,921.432,983,381.35
Other taxes73,111,917.4378,462,157.04
Total393,957,887.52357,445,477.71

Other description:

None

33. Other accounts payable

Unit: Yuan

ItemsEnding balanceOpening balance
Interest payable280,806,670.4916,105,263.85
Dividends payable8,541,818.64
Other accounts payable1,923,064,481.30520,965,421.13
Total2,212,412,970.43537,070,684.98

(1) Interest payable

Unit: Yuan

ItemsEnding balanceOpening balance
Payment of principal at maturity and interest in installments142,367,316.8010,819,629.22
Interest payable on short-term loans137,060,010.225,285,634.63
Interests withdrawn for overdue notes1,379,343.47
Total280,806,670.4916,105,263.85

Significant overdue but unpaid interest

Unit: Yuan

BorrowerOverdue amountCauses for overdue
Great Wall Guoxing Financial Leasing Co., Ltd.1,862,398.37Capital shortage
CITIC Trust Co., Ltd.18,755,539.19Capital shortage
Industrial International Trust Co., Ltd.11,534,803.45Capital shortage
Industrial Bank Houhai Branch11,388,850.54Capital shortage
Bohai International Trust Co., Ltd.25,430,142.49Capital shortage
Xiamen International Bank Zhuhai Branch4,236,900.04Capital shortage
Bank of Ningbo Shenzhen Branch4,149,615.44Capital shortage
Shenzhen Rural Commercial Bank Futian Branch326,957.92Capital shortage
Wanxiang Trust Co., Ltd.6,164,383.56Capital shortage
Zhongjiang International Trust Co., Ltd.48,926,568.27Capital shortage
Baoshang Bank Shenzhen Branch16,118,737.07Capital shortage
Shenzhen Rural Commercial Bank Meilin Branch1,036,262.79Capital shortage
China Bohai Bank Shenzhen Branch2,760,164.38Capital shortage
Shaanxi International Trust Co., Ltd.18,150,565.60Capital shortage
Chang'an International Trust Co., Ltd.7,952,291.31Capital shortage
Industrial International Trust Co., Ltd.14,470,421.04Capital shortage
Bridge Trust Co., Ltd.36,052,715.11Capital shortage
Shanghai Pudong Development Bank Shenzhen Center District Branch3,738,211.58Capital shortage
Bank of Jiujiang Zhuhai Branch6,599,149.57Capital shortage
China Minsheng Bank Shenzhen Branch4,286,407.31Capital shortage
Shanghai Pudong Development Bank Fulicheng Subbranch6,317,529.17Capital shortage
China Railway Trust Co., Ltd.2,724,608.75Capital shortage
Ping'an International Financial Leasing Co., Ltd.816,385.59Capital shortage
Bank of Beijing Shuangxiu Subbranch24,843,680.56Capital shortage
Total278,643,289.10--

Other description:

(2) Dividends payable

Unit: Yuan

ItemsEnding balanceOpening balance
Common stock dividends8,541,818.64
Total8,541,818.64

Other description, including reasons for significant dividends in arrears for over a year:

(3) Other accounts payable

1) Presentation of other accounts payable by the nature of accounts

Unit: Yuan

ItemsEnding balanceOpening balance
Tender bond, performance bond and deposit29,414,375.0448,363,917.10
Personal intercourse funds and withheld items266,550,420.2614,453,897.51
Intercourse funds of the organization841,985,904.64450,793,562.35
Payment for subscription of non-public offerings33,536.804,500,000.00
Others785,080,244.562,854,044.17
Total1,923,064,481.30520,965,421.13

2) Other significant accounts receivable with account age of more than 1 year

Unit: Yuan

ItemsEnding balanceCauses for non-payment or carryover

Other description

34. Liabilities held for sale

Unit: Yuan

ItemsEnding balanceOpening balance

Other description:

None

35. Non-current liabilities coming due within one year

Unit: Yuan

ItemsEnding balanceOpening balance
Long-term loans coming due within 1 year906,690,152.95820,422,471.45
Long-term account payable coming due within 1 year69,029,828.60
Total975,719,981.55820,422,471.45

Other description:

None

36. Other Current Liabilities

Unit: Yuan

ItemsEnding balanceOpening balance
Output taxes to transfer121,529,600.95
Total121,529,600.95

Increase or decrease of short-term bonds payable

Unit: Yuan

Bond namePar valueDate of issueBond periodIssued amountOpening balanceIssue of current periodInterests withdrawn as per par valueAmortization of premium or discountAmount repaid of current periodEnding balance

Other description:

None

37. Long-term loans(2) Classification of long-term loans

Unit: Yuan

ItemsEnding balanceOpening balance
Mortgaged loan16,839,164.49
Guaranteed loan1,026,690,152.95826,253,306.53
Less: Long-term loans coming due within 1 year (see Note VI, 25)-906,690,152.95
Total120,000,000.00843,092,471.02

Description for classification of long-term loans:

NoneOther description: including the range of interest rate:

None

38. Bonds payable

(1) Bonds payable

Unit: Yuan

ItemsEnding balanceOpening balance
First period bond financing plan of Sino Great Wall International Engineering Co., Ltd. in 2017254,801,342.47245,000,000.00
Qianhai Wutong Private Bond No. 2016070100,000,000.00
Total254,801,342.47345,000,000.00

(2) Increase or decrease of bonds payable (excluding other financial instruments classified as financial liabilities,like preferred stocks and perpetual bonds, etc.)

Unit: Yuan

Bond namePar valueDate of issueBond periodIssued amountOpening balanceIssue of current periodInterests withdrawn as per par valueAmortization of premium or discountAmount repaid of current periodOther amount decreasedEnding balance
1. Qianhai Wutong100,000,000.001/6/20171/6/201999,800,000.00100,000,000.000.006,200,000.00106,200,000.000.00
Private Bond No. 2016070
2. First period bond financing plan of Sino Great Wall International Engineering Co., Ltd. in 2017245,000,000.0010/31/201710/31/2020245,000,000.00245,000,000.000.009,801,342.47254,801,342.47
Subtotal345,000,000.00344,800,000.00345,000,000.000.0016,001,342.47106,200,000.00254,801,342.47
Less: End-of-year amount due within a year (see Note VI, 25)
Total------344,800,000.00345,000,000.000.0016,001,342.47106,200,000.00254,801,342.47

(3) Description of conversion conditions and time for convertible corporate bonds

None

(4) Description of other financial instruments classified as financial liabilities

Basic description of financial instruments including preferred stocks and perpetual bonds issued at the end of a periodNonePresentation of changed situations of financial instruments including preferred stocks and perpetual bonds issued at the end of a period

Unit: Yuan

Issued financial instrumentsOpeningAmount increased of current periodAmount decreased of current periodEnding
AmountBook valueAmountBook valueAmountBook valueAmountBook value

Description of other financial instruments classified as financial liabilitiesNoneOther descriptionNone

39. Long-term account payable

Unit: Yuan

ItemsEnding balanceOpening balance
Long-term account payable322,990.3581,945,567.86
Total322,990.3581,945,567.86

(1) Presentation of other accounts payable by the nature of accounts

Unit: Yuan

ItemsEnding balanceOpening balance
Accrued financial lease outlay322,990.3581,945,567.86

Other description:

None

(2) Special account payable

Unit: Yuan

ItemsOpening balanceAmount increased of current periodAmount decreased of current periodEnding balanceReason for formation

Other description:

None

40. Long-term payroll payable(1) Chart of long-term payroll payable

Unit: Yuan

ItemsEnding balanceOpening balance

(2) Changed situations of benefit plan measured and set up

Present value of benefit plan measured and set up

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period

Asset set up:

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period

Net liabilities or net assets of benefit plan measured and set up

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period

Explanation on the content of benefit plan set up and related risks, impact on the company’s cash flow, timing and uncertainties:

Explanation on the sensitivity analysis result and significant actuarial assumptions of benefit plan set up:

Other description:

41. Accrued liabilities

Unit: Yuan

ItemsEnding balanceOpening balanceReason for formation
Pending actions2,958,723.153,414,189.15
Total2,958,723.153,414,189.15--

Other descriptions, including significant assumptions and appraisal of significant accrued liabilities:

42. Deferred income

Unit: Yuan

ItemsOpening balanceAmount increased of current periodAmount decreased of current periodEnding balanceReason for formation

Projects involving governmental subsidy:

Unit: Yuan

Liability itemsOpening balanceSubsidy increased over current periodAmount recorded in non-operating income over current periodAmount recorded in other benefits over current periodCost offset expenses over current periodOther changesEnding balanceRelated to assets/Related to income

Other description:

43. Other Non-current liabilities

Unit: Yuan

ItemsEnding balanceOpening balance

Other description:

None

44. Capital Stock

Unit: Yuan

Opening balanceIncrease/Decrease (+/-)Ending balance
New shares issuedShares presented for freeShares converted from public reserveOthersSubtotal
Total amount of shares1,698,245,011.001,698,245,011.00

Other description:

45. Other equity instruments(1) Basic description of financial instruments including preferred stocks and perpetual bonds issued at the end ofa period(2) Presentation of changed situations of financial instruments including preferred stocks and perpetual bondsissued at the end of a period

Unit: Yuan

Issued financial instrumentsOpeningAmount increased of current periodAmount decreased of current periodEnding
AmountBook valueAmountBook valueAmountBook valueAmountBook value

Explanation on the reason for increase, decrease or change of other current equity instruments and the accounting methods:

Other description:

46. Capital reserve

Unit: Yuan

ItemsOpening balanceAmount increased of current periodAmount decreased of current periodEnding balance
Capital premium (capital stock premium)-857,285,524.28-857,285,524.28
Other capital reserve-442,064,177.46503,161.67-441,561,015.79
Total-1,299,349,701.74503,161.67-1,298,846,540.07

Other description, including explanation on the reason for increase, decrease or change of current special reserve:

47. Inventory stock

Unit: Yuan

ItemsOpening balanceAmount increased ofAmount decreased ofEnding balance
current periodcurrent period

Other description, including explanation on the reason for increase, decrease or change of current inventory stock

48. Other composite benefits

Unit: Yuan

ItemsOpening balanceAmount incurred of current periodEnding balance
Amount incurred of current period before taxesLess: Current gain and loss from conversion of other previous composite benefitsLess: Expense of income taxAfter-tax amount attributed to the parent companyAfter-tax amount attributed to minor shareholders
II. Other composite benefits to be re-classified as gain and loss858,242.13-50,380.95858,242.130.00-908,623.080.00-50,380.95
Balance from conversion of foreign-currency financial statements858,242.13-50,380.95-908,623.08-50,380.95
Total of other composite benefits858,242.13-50,380.95858,242.130.00-908,623.08-50,380.95

Other description, including adjustment of initial carrying amount of hedged items converted from the effective portion of gain or loss ofcash flow hedge

Special reserve

Unit: Yuan

ItemsOpening balanceAmount increased of current periodAmount decreased of current periodEnding balance
Work safety expense164,231,078.18143,204,995.7521,026,082.43
Total164,231,078.18143,204,995.7521,026,082.43

Other description, including explanation on the reason for increase, decrease or change of current special reserve:

50. Surplus reserve

Unit: Yuan

ItemsOpening balanceAmount increased of current periodAmount decreased of current periodEnding balance
Statutory surplus reserve84,394,441.2384,394,441.23
Total84,394,441.2384,394,441.23

Description, including explanation on the reason for increase, decrease or change of current surplus reserve

51. Undistributed profit

Unit: Yuan

ItemsAmount of current periodAmount of last period
Undistributed profit at the end of last period before adjustment1,503,103,396.721,228,970,498.86
Undistributed profit at beginning of the year after adjustment1,503,103,396.721,228,970,498.86
Plus: Net profit attributed to the parent company’s owners in the current period-1,704,739,736.40380,090,990.83
Common stock dividends payable67,929,800.44-101,894,700.66
Others-4,063,392.31
Ending undistributed profit-269,566,140.131,503,103,396.72

Details of undistributed profit at beginning of the year:

1) Undistributed profit affected by the tracking and adjustment carried out in accordance with the Accounting Standards for BusinessEnterprises and related regulations.2) Undistributed profit affected by change of accounting methods.3) Undistributed profit affected by significant accounting errors.4) Undistributed profit affected by change of accounting scope after business combination under the same control.5) Undistributed profit affected by other adjustments.

52.Operating Income and Operating Cost

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period
IncomeCostIncomeCost
Main businesses2,426,404,120.172,448,895,755.446,496,576,893.364,886,041,528.62
Other businesses583,566.85604,879.43548,087.16312,971.04
Total2,426,987,687.022,449,500,634.876,497,124,980.524,886,354,499.66

53.Taxes and Surcharge

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period
Urban maintenance and construction tax1,925,156.821,884,723.85
Educational surtax1,461,672.671,399,860.90
Property tax136,902.96
Land use tax95,436.15
Vehicle and vessel usage tax660.00
Stamp duty1,136,171.01
Business tax-141,646.64
Other taxes34,660.961,390,067.50
Total4,790,660.574,533,005.61

Other description:

54.Selling Expenses

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period
Employee Compensation4,952,958.618,019,452.92
Travel expenses169,017.69723,327.21
Business entertainment expense430,325.64379,837.66
Advertising and promotion expenses16,293.68
Construction maintenance fees20,496,867.6316,040,272.66
Others2,251,632.857,034,063.84
Total28,300,802.4232,213,247.97

Other description:

55.Management Expenses

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period
Employee Compensation179,468,828.70146,060,526.13
Administrative expenses6,753,534.2415,110,557.60
Rental14,188,202.2919,054,037.35
Travel expenses9,449,221.5313,611,200.61
Business entertainment expense10,737,792.078,668,113.32
Depreciation fees of fixed assets11,878,149.0711,262,728.55
Vehicle expenses1,259,121.593,538,337.07
Long-term deferred expense amortization3,947,660.604,360,113.43
Consulting fee27,870,502.2359,415,179.05
Conference140,828.39718,194.44
Litigation Fee3,039,464.22
Intangible asset amortization3,522,205.28
Others39,443,290.3231,158,219.65
Total311,698,800.53312,957,207.20

Other description:

56.R&D Expenses

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period

Other description:

57.Financial Expenses

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period
Interest expenditure721,751,253.62294,207,584.82
Less: Interest income17,750,530.7214,448,977.61
Net Interest Expenses704,000,722.90279,758,607.21
Exchange gain or loss-118,130,856.86124,220,566.01
Discount interest
Handling charges and others20,145,670.1928,611,434.33
Total606,015,536.23432,590,607.55

Other description:

58.Asset Impairment Loss

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period
I. Bad debt loss463,968,319.90316,738,875.97
II. Inventory depreciation loss-697,641.55
V. Impairment losses on long-term equity investment25,292,312.68
XIII. Goodwill impairment loss17,948,978.535,547,635.00
Total506,511,969.56322,286,510.97

Other description:

59.Other Income

Unit: Yuan

Sources of other incomeAmount incurred of current periodAmount incurred of last period
Subsidy for post stabilization38,940.28250,194.89
Commerce Commission bounty1,960,934.00
Return of handling charges on personal income tax13,100.20

60.Investment Yield

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period
Gain on long-term equity investments subject to accounting with equity method-420,828.29
Investment yield obtained from disposal of long-term equity investments25,953,835.15
Proceeds from wealth management products4,686,911.15-387,601.37
Total30,219,918.01-387,601.37

Other description:

61.Profits from Changes in Fair Value

Unit: Yuan

Sources of profits from changes in fair valueAmount incurred of current periodAmount incurred of last period

Other description:

62.Proceeds from Asset Disposal

Unit: Yuan

Sources of proceeds from asset disposalAmount incurred of current periodAmount incurred of last period
Disposal of fixed assets-150,250.00

63.Non-Operating Income

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last periodAmount recorded in the non-recurring gain or loss of current period
Gains from debt restructuring100,000,000.00
Awards for steady growth5,526,702.00
Nonpayment intercourse funds22,972,420.86
Gains from disposal of non-current assets116,125.14
Others84,587.85156,426.78
Total128,699,835.85156,426.78

Governmental subsidies included in gain or loss of current period:

Unit: Yuan

Subsidy itemsGranting subjectsReasonsNature/typeWhether subsidies affect gain or loss in the current periodWhether it is special subsidyAmount incurred of current periodAmount incurred of last periodRelated to assets/Related to income
Awards for steady growth5,526,702.00Related to income
Subsidy for post stabilization38,940.20Related to income
Return of handling charge on personal income tax13,100.20Related to income

Other description:

64.Non-Operating Expenditure

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last periodAmount recorded in the non-recurring gain or loss of current period
Donation outlay240,000.00
Loss from non-current asset retirement1,297,636.911,297,636.91
Overdue fine11,774,955.7411,774,955.74
Loss by default403,761,833.33403,761,833.33
Others5,133,452.12-3,270,152.735,133,452.12
Total395,623,593.98-3,030,152.73

Other description:

65.Expense of Income Tax(I) Table of Income Tax

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period
Expense of income tax in the current period12,135,333.39172,349,309.88
Deferred income tax expenses-8,853,410.79-45,345,578.12
Total3,281,922.60127,003,731.76

(II) Adjustment Process of Accounting Profit and Expense of Income Tax

Unit: Yuan

ItemsAmount incurred of current period
Total profit-1,716,482,516.80
Expense of income tax calculated with statutory [or applicable] tax rate-430,354,356.39
Influences of different tax rates applicable to subsidiaries-3,982,736.66
Influences of non-deductible costs, expenses and losses126,689,992.39
Influences of deductible temporary difference or deductible loss of non-confirmed deferred income tax assets in the current period304,484,844.65
Expense of income tax3,281,922.60

Other description:

66.Other Composite Benefits

For more details, please see Notes to Financial Statement.

67.Items of Cash Flow Statement(I) Cash Received Relating to Other Operating Activities

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period
Interest income6,994,835.156,963,410.83
Bond, deposit and other intercourse funds4,926,888,796.416,125,468,343.62
Governmental subsidy51,435.002,211,128.89
Others77,749.30
Total4,934,012,815.866,134,642,883.34

Description on cash received relating to other operating activities:

(II) Cash Paid Relating to Other Operating Activities

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period
Handling charges235,185,395.0725,037,998.96
Warranties and deposit expenses190,984,798.40545,286,663.39
Selling Expenses1,076,050.1771,903,447.59
Management Expenses50,611,015.00305,349,194.66
Current account4,051,155,412.986,022,745,439.52
Others11,137.39
Total4,529,023,809.016,970,322,744.12

Description on cash paid relating to other operating activities:

(III) Cash Received Relating to Other Investment Activities

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period

Description on cash received relating to other investment activities:

(IV) Cash Paid Relating to Other Investment Activities

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period
Cash balance of subsidiaries in disposal of subsidiaries2,990,381.41
Bond paid for land auction131,500,000.00
Total2,990,381.41131,500,000.00

Description on cash paid relating to other investment activities:

(V) Cash Received Relating to Other Financing Activities

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period
Received company/personal financing fund54,209,648.35166,727,200.00
Non-public warranties12,600,000.00
Total54,209,648.35179,327,200.00

Description on cash received relating to other financing activities:

(VI) Cash Paid Relating to Other Financing Activities

Unit: Yuan

ItemsAmount incurred of current periodAmount incurred of last period
Paid company/personal financing fund22,511,749.85178,321,283.83
Paid trust deposit48,600,000.00
Paid financing fees6,150,000.00
Others1,050.18
Total22,512,800.03233,071,283.83

Description on cash paid relating to other financing activities:

68.Supplementary Data of Cash Flow Statement(I) Supplementary Data of Cash Flow Statement

Unit: Yuan

Supplementary DataAmount of current periodAmount of last period
1. Net profit adjusted to cash flow of operating activities:----
Net profit-1,719,764,439.40384,046,026.83
Plus: Asset depreciation reserve506,759,969.56322,286,510.97
Depreciation of fixed assets, depreciation of oil and gas assets, and depreciation of productive biological assets35,920,441.7317,923,017.62
Intangible asset amortization3,965,757.122,653,220.75
Long-term deferred expense amortization6,782,686.5617,222,764.37
Loss on disposal of fixed assets, intangible assets and other long-term assets (income represented with “-”)1,181,511.77
Loss from fixed asset retirement (Income is represented with “-”)150,250.00
Financial expenses (income represented with “-”)721,751,253.62294,207,584.82
Investment loss (income represented with-29,219,919.01387,601.37
“-”)
Decrease of deferred income tax assets (increase represented with “-”)-5,949,436.23-41,934,678.02
Increase of deferred income tax liabilities (decrease represented with “-”)-53,653.31-1,380,927.06
Decrease of inventories (increase represented with “-”)-160,692,252.73-222,529,694.72
Decrease of operating items receivable (increase represented with “-”)1,284,162,666.35-2,467,941,286.77
Increase of operating items payable (decrease represented with “-”)183,034,469.42-86,959,008.81
Net amount of cash flow from operating activities827,879,055.45-1,781,868,618.65
2. Major investment and financing activities not involving cash revenue and expenditure:----
3. Net change of cash and cash equivalents:----
Ending balance of cash125,767,796.88647,222,590.48
Less: Opening balance of cash647,222,590.48943,705,322.41
Net increment of cash and cash equivalents-521,454,793.60-296,482,731.93

(II) Net Amount of Cash Paid for Acquisition of Subsidiaries in Current Period

Unit: Yuan

Amount
Wherein:--
Wherein:--
Wherein:--

Other description:

(III) Net Amount of Cash Received from Disposal of Subsidiaries in Current Period

Unit: Yuan

Amount
Wherein:--
Wherein:--
Wherein:--

Other description:

(IV) Composition of Cash and Cash Equivalents

Unit: Yuan

ItemsEnding balanceOpening balance
I. Cash125,767,796.88647,222,590.48
Including: Cash on hand3,116,229.514,614,087.17
Bank deposit available for payment anytime122,651,567.37642,608,503.33
III. Ending balance of cash and cash equivalents125,767,796.88647,222,590.48

Other description:

69.Notes to Items in Statement of Changes in Owner’s Equity

Explain names of "other" items that adjust the ending balance of last year and the amount adjusted and other items:

70.Assets with Ownership or Use Right Restricted

Unit: Yuan

ItemsEnding book valueReason for restriction
Monetary Resources532,947,089.60Guarantee deposit and frozen fund
Fixed assets15,963,305.27Finance lease assets
Accounts receivable716,094,881.32Pledge
Total1,265,005,276.19--

Other description:

71.Foreign-Currency Monetary Items(I) Foreign-Currency Monetary Items

Unit: Yuan

ItemsEnding balance in foreign currencyExchange rate for conversionEnding balance in RMB after conversion
Monetary Resources----
Wherein: USD1,079,139.416.86327,406,349.58
EUR
HKD345,733.970.8762302,932.10
QAR48,391.431.884891,210.45
BUK24,542,203.150.0044108,446.54
IDR2,955,569.100.00051,395.00
Russian Ruble (RUB)14,477,133.450.09861,427,445.36
PHP8,409,386.870.13061,098,400.48
MYR561,416.731.6479925,164.25
MOP109,037.470.850092,680.21
Accounts receivable----
Wherein: USD61,883,264.106.8632424,717,218.17
EUR
HKD
QAR357,701,359.031.8848674,212,418.07
MYR60,603,384.881.647999,868,923.99
MOP1,362,817.670.85001,158,373.92
Advance Payment
Wherein: USD190,698.156.86321,308,799.55
Russian Ruble (RUB)7,869,840.230.0986775,966.25
MYR121,322.961.6479199,929.32
Other accounts receivable:
Wherein: USD3,495,233.166.863224,030,248.49
EUR2,600,000.007.847320,402,980.00
HKD1,474.180.87621,291.68
QAR136,466,367.941.8848257,218,256.48
BUK202,697,842.510.0046936,810.18
Russian Ruble (RUB)9,583,296.610.0986944,913.05
PHP146,997.000.130619,200.16
MYR1,000,168.971.64791,648,188.49
LAK375,243,716.390.0008301,125.13
Accounts payable
Wherein: USD38,973,517.016.8632267,483,041.94
QAR5,928,511.951.853410,987,967.45
BUK1,121,875.000.00444,959.81
PHP44,130.430.13065,764.13
MYR26,092,854.291.647942,998,675.51
Items Received in Advance:
Wherein: USD354,069.486.86322,430,049.66
Other accounts payable:
Wherein: USD608,672.046.86324,177,437.95
HKD407.620.8762357.16
PHP8,447.150.13061,103.33
MYR24,542.401.647940,443.42
AUD6,270.004.825030,252.75
Long-term loans----
Wherein: USD
EUR
HKD

Other description:

(II) Description of Overseas Operating Entities; In Particular, Important Overseas Operating Entities ShouldDisclose Their Main Business Place, Recording Currency and the Basis for Selection; Reasons for Changes in theRecording Currency Should Also Be Disclosed.

√ Applicable □ Not applicable

72.Hedging

Disclosure of hedging items and related hedging instruments and qualitative and quantitative information on hedged risks in accordance withthe hedging category:

73.Governmental Subsidy(I) Basic Facts about Governmental Subsidies

Unit: Yuan

TypeAmountPresented itemsAmount recorded in the gain or loss of the current period

(II) Refund of Governmental Subsidy

□ Applicable √ Not applicableOther description:

74. Miscellaneous

VIII. Change of Combination Scope

(I) Business Combination not under the Same Control1. Business combination not under the same control in current term:

Unit: Yuan

Name of the purchased partyTime point of equity acquisitionCost of equity acquisitionProportion of equity acquiredWay to acquire the stock equityDate of purchasingBasis for determining the date of purchasingThe purchased party’s income from the date of purchasing to the end of termThe purchased party’s net profit from the date of purchasing to the end of term

Others:

2. Combination cost and goodwill

Unit: Yuan

Combination cost

Method to determine the fair value of combination cost, contingent consideration and its changes:

Main reasons for large amount of goodwill:

Others:

3. Identifiable assets and liabilities of the purchased party on the date of purchasing

Unit: Yuan

Fair value on the date of purchasingBook value on the date of purchasing

Method to determine the fair value of identifiable assets and liabilities:

Contingent liabilities from the purchased party during the combination:

Others:

4. Gains or losses on re-measurement as per fair value of equity held before the date of purchasingIs there such transaction that realizes combination through several steps of transactions and obtains control right during reporting period?□ Yes √ No

5. Relevant descriptions for failure to reasonably determine combination consideration and fair value of identifiable assets andliabilities of the purchased party on the purchasing date or at the end of current combination term.6. Others(II) Business Combination under the Same Control1. Business combination under the same control in current term

Unit: Yuan

Name of the combined partyProportion of gained equities during the combination.Basis for business combination under the same controlCombination dateBasis for determining the combination dateThe combined party’s income from the beginning to the end of the current combination termThe combined party’s net profit from the beginning to the end of the current combination termThe combined party’s income in the comparative periodThe combined party’s net profit in the comparative period

Others:

2. Combination cost

Unit: Yuan

Combination cost

Contingent consideration and its changes:

Others:

3. The combined party’s book value of assets and liabilities on the combination date

Unit: Yuan

Combination dateAt the end of the last term

Contingent liabilities from the combined party during the combination:

Others:

(III) Counter PurchaseTransaction basic information, basis to determine a transaction as a counter purchase, remaining assets of the listed company, whetherliabilities are part of businesses and basis to determine it, determination of combination cost, adjusted equity amount and its calculation whendealt per equity transaction:

(IV) Disposal of SubsidiariesIs there a single disposal of investments in a subsidiary, that is, loss of control right?√ Yes □ No

Unit: Yuan

Name of the subsidiaryPrice of the stock equity disposalProportion of the stock equity disposedWay of the equity stock disposalTime point of losing control rightBasis for determining the time point of losing control rightBalance between the disposal price and the owned net asset share of the subsidiary corresponding to the disposal investment in the financial statementRemaining proportion of stock equity at the date of losing control rightBook value of the remaining stock equity at the date of losing control rightFair value of the remaining stock equity at the date of losing control rightGain or loss on re-measurement of remaining stock equity as per fair valueMethod to determine the fair value of the remaining stock equity at the date of losing control right and major assumptionsAmount of profit and loss on investments converted from other comprehensive gains related to the stock equity investments of the original subsidiary
Sino Great Wall (Beijing) Investment Fund Management Co., Ltd.1,000,000.00100.00%TransferJanuary 24, 2018Completion of industrial and commercial registration of changes6,207.57
Sino Great Wall Zhihui Housing Property (Zhanjiang) Co., Ltd.84,000,000.0056.00%TransferAugust 10, 2018Completion of industrial and commercial registration of changes72,235,477.4844.00%24,000,000.0024,000,000.00
Sino Great Wall Construction Construction Co., Ltd.90,000,000.0060.00%TransferDecember 06, 2018Completion of industrial and commercial registration of changes22,054,227.07
Guangzhou Herabenna Interior Design Co., Ltd.1.00100.00%TransferOctober 16, 2018Completion of industrial and commercial registration of changes-565,924.41
Shenzhen Yatian Decoration Design Engineering Co., Ltd.5,500,000.0070.00%TransferJanuary 18, 2018Completion of industrial and commercial registration of changes15,953,394.16

OthersIs there disposal by steps of investments in a subsidiary through several transactions and losing control right in the current term?□ Yes √ No(V) Changes of Combination Scope for Other ReasonsDescribing other reasons for the changes of combination scope (e.g. newly-established subsidiary, liquidation of a subsidiary) and relatedmatters:

6. Miscellaneous

IX. Equity in Other Subjects

(I) Equity in Subsidiaries1. Composition of the enterprise group

Name of the subsidiaryMain business placeRegistered placeBusiness natureShareholding proportionAcquisition method
DirectIndirect

About a subsidiary’s shareholding proportion different from voting proportion:

Basis for controlling the invested party while holding half or less voting rights and not controlling the invested party despite holding half ormore voting rights:

Basis for controlling the important structured entity incorporated into the combination scope:

Basis to confirm whether a company is an agent or a consignor:

Others:

2. Main non-sole subsidiaries

Unit: Yuan

Name of the subsidiaryShares of minority shareholdersGains and losses of minority shareholders in current termDividends declared to minority shareholders in current termEquity balance of minority shareholders at the end of the term

About minority shareholders’ shareholding proportion different from voting proportion:

Others:

3. Main financial information of important non-sole subsidiaries

Unit: Yuan

Name of the subsidiaryEnding balanceOpening balance
Current assetsNon-current assetsTotal assetsCurrent liabilitiesNon-current liabilitiesTotal liabilitiesCurrent assetsNon-current assetsTotal assetsCurrent liabilitiesNon-current liabilitiesTotal liabilities

Unit: Yuan

Name of the subsidiaryAmount incurred of current termAmount incurred of last term
Operating incomeNet profitTotal amount of composite benefitsCash flow from operating activitiesOperating incomeNet profitTotal amount of composite benefitsCash flow from operating activities

Others:

4. Major limitations on using corporate group assets and liquidating corporate group liabilities5. Financial and other support for structured entities incorporated into the combined financial statementOthers:

(II) Transactions When Owned Equity Shares of a Subsidiary Changed but Still Control the Subsidiary1. About change of owned equity shares of a subsidiary2. Influence of transactions on parent company’s owned equity and the equity of minority shareholders

Unit: Yuan

Others:

(III). Equity in Joint Ventures and Jointly-run Enterprises1. Important joint ventures and jointly-run enterprises

Name of the joint venture and jointly-run enterpriseMain business placeRegistered placeBusiness natureShareholding proportionAccountant arrangement method for joint ventures and jointly-run enterprise
DirectIndirect

About a joint venture or jointly-run enterprise’s shareholding proportion different from voting proportion:

Basis for holding 20% or less voting rights but exerting important influence, or holding 20% or more voting rights but not exerting importantinfluence:

2. Main financial information of important joint ventures

Unit: Yuan

Ending balance/Amount incurred of current termOpening balance/Amount incurred of last term

Others:

3. Main financial information of important jointly-run enterprises

Unit: Yuan

Ending balance/Amount incurred of current termOpening balance/Amount incurred of last term

Others:

4. Financial information summary of not important joint ventures and jointly-run enterprises

Unit: Yuan

Ending balance/Amount incurred of current termOpening balance/Amount incurred of last term
Joint ventures:----
Total number of the following items calculated by shareholding proportion----
Jointly-run enterprises:----
Total number of the following items calculated by shareholding proportion----

Others:

5. About major limitations on joint ventures and jointly-run enterprises’ capability of capital transfer to the company6. Excess deficit incurred by joint ventures and jointly-run enterprises

Unit: Yuan

Name of the joint venture and jointly-run enterpriseAccumulated unconfirmed losses accrued in the previous termUnconfirmed losses of the current term (or shared net profits of the current term)Accumulated unconfirmed losses in current term

Others:

7. Unconfirmed undertakings related to the investments of joint ventures8. Contingent liabilities related to the investments of joint ventures or jointly-run enterprises(IV). Important Joint Operation

Name of the joint operationMain business placeRegistered placeBusiness natureShareholding proportion/Owned shares
DirectIndirect

About shareholding proportion or owned shares in the joint operation different from voting proportion:

Basis for classifying a single entity as joint operation:

Others:

5. Equity in structured entities not incorporated into the combined financial statementAbout structured entities not incorporated into the combined financial statement:

6. Others

X. Risks Related to Financial InstrumentsXI. Disclosure of Fair Values1. Closing fair values of assets and liabilities measured with fair value

Unit: Yuan

ItemClosing fair values
Level 1 fair value measurement第二层次公允价值计量第三层次公允价值计量合计
I. Continuous fair value measurement--------
II. Non-continuous fair value measurement--------

2. Basis for determining market prices of items of continuous and non-continuous Level 1 fair valuemeasurements3. Qualitative and quantitative information of estimation techniques and key parameters adopted for items ofcontinuous and non-continuous Level 2 fair value measurements4. Qualitative and quantitative information of estimation techniques and key parameters adopted for items ofcontinuous and non-continuous Level 3 fair value measurements5. Adjustments between the beginning and the closing book values and sensitivity analysis of non-observableparameters for items of continuous Level 3 fair value measurement6. Reasons for and policies for deciding the time for conversion between different levels for items of continuousfair value measurement during the current period7. Estimation technique changes during the current period and reasons for the changes8. Fair values of financial assets and financial liabilities non-measured with fair value9. Others

XII. Related Parties and Related Transactions

1. Information about Parent Company of the Company

Name of Parent CompanyRegistered placeBusiness natureRegistered capitalShareholding proportion ofVoting right proportion of
Parent Company to the CompanyParent Company to the Company

Description about Parent Company of the CompanyThe final controller of the Company is Chen Lue.Other description:

2. Information about Subsidiaries of the Company

Please refer to Note VIII. 1 “Equity in Subsidiaries”.

3. Information about Joint Ventures and Associates of the Company

Please refer to Notes.Other joint ventures or associates that had balances from related party transactions with the Company during the current period or theprevious period:

Name of joint venture or associateRelationship with the Company
Cenang Resort Sdn BhdAn associate of which the Company holds 40% shares

Other description

4. Information about Other Related Parties

Name of other related partyRelationship with the Company
Shenzhen Hualian Development Investment Co., Ltd.An affiliated company of shareholder
Kunwu Jiuding Investment Management Co., Ltd.Bai Bin, a former director of the Company, acts as its Investment Director
Shanghai Heyi Supply Chain Management Co., Ltd.Wang Lei, a former director of the Company, acts as its director
Sino Great Wall (Beijing) Investment Fund Management Co., Ltd.A company controlled by the actual controller
Qinghai Heyi Commerce Co., Ltd.A company controlled by Wang Lei, a former director of the Company
Sino Great Wall Investment (Beijing) Co., Ltd.A company controlled by Chen Lve, a director of the Company
Yang ChunlingSecretary to the Board of Directors of the Company
Fang XianzhongVice President of the Company
Chen LveActual controller of the Company
He SenBrother-in-law of the shareholder and actual controller of the Company
Luyi Shuguang Medical Industrial Investment Construction Co., Ltd.A PPP Project Company controlled by the Company
Huichang County Sino Great Wall Medical Industrial Construction Service Co., Ltd.A PPP Project Company controlled by the Company
Sino Great Wall (Fugou) High-speed Railways District Investment Co., Ltd.A PPP Project Company controlled by the Company
Anyang Sino Great Wall Medical Management Service Co., Ltd.A PPP Project Company controlled by the Company
Sino Great Wall (Fugou) Jialu River Comprehensive Control Investment Co., Ltd.A PPP Project Company controlled by the Company
Sino Great Wall (Fugou) National Fitness Center Investment Co., Ltd.A PPP Project Company controlled by the Company
Sino Great Wall Shaanxi Fuyan Industrial Park Investment Co., Ltd.A PPP Project Company controlled by the Company
Wuchuan City Sino Great Wall People’s HospitalA PPP Project Company controlled by the Company
Wuchuan Sino Great Wall TCM Hospital Investment Co., Ltd.A PPP Project Company controlled by the Company
Guizhou Hongqiao Sino Great Wall Medical Real Estate Investment Co., Ltd.A PPP Project Company controlled by the Company

Other description

5. Related Transaction(1)Related transactions for the provision and receipt of labor services for merchandises purchased and sold

Purchase goods/Service acceptance

Unit: Yuan

Related PartyContent of related transactionsCurrent amountApproved transaction quotaWhether exceed the transaction limitedLast Amount

Purchase goods/Service acceptance

Unit: Yuan

Related PartyContent of related transactionsCurrent amountLast Amount
Sino Great Wall (Fugou) High-speed Railways District Investment Co., Ltd.PPP project construction108,664,988.71
Sino Great Wall (Fugou) Fitness Center Investment Co., Ltd.PPP project construction42,981,344.98
Sino Great Wall People’s Hospital Co., Ltd. in WuchuanPPP project construction21,553,398.06
Sino Great Wall Traditional Chinese Medicine Investment Co., Ltd. in WuchuanPPP project construction19,149,594.63
Total119,209,440.10347,760,072.27

Related transactions for the provision and receipt of labor services for merchandises purchased and sold

(2)Related Trusteeship/contract and entrusted management/packaging situation

Table on company’s trusteeship/contract

Unit: Yuan

Name ofName ofType of assetBeginning dateEnd date ofPricing basis ofConfirmed
entrusting/contract-out parttrustee/contracting partytrustee/contractingof trustee/contractingtrustee/contractingtrustee earning/contracting earningtrustee earning/contract earning

Note of related trustee/contractingTable on company’s trusteeship/contract-out

Unit: Yuan

Name of entrusting/contract-out partName of trustee/contracting partyType of asset trustee/contractingBeginning date of trustee/contractingEnd date of trustee/contractingPricing basis of trustee earning/contracting-out earningConfirmed trustee earning/contract earning

Note of related trustee/contracting

(3)Related tenancy situation

The company as the lessor

Unit: Yuan

Name of renterType of leased assetsCurrent confirmed rental incomeLast confirmed rental income

The company as the renter:

Unit: Yuan

Name of renterType of leased assetsCurrent confirmed rental incomeLast confirmed rental income

Note of related tenancy situation

(4)Related guarantee situation

The company as the guarantee:

Unit: Yuan

Secured partyAmount guaranteedBeginning date of guaranteeEnd date of guaranteeFinished or yet
Sino Great Wall Co., Ltd.200,000,000.002017. 01 .132018.01.12.Yes
Sino Great Wall Co., Ltd.200,000,000.002018.01.17.2019.01.16.No
Sino Great Wall Co., Ltd.800,000,000.002017.04.17.2018.10.17.No
Sino Great Wall Co., Ltd.50,000,000.002017.05.17.2018.05.16.No
Sino Great Wall Co., Ltd.400,000,000.002017.06.23.2018.06.22.No
Sino Great Wall Co., Ltd.2017.07.10.2018.07.09.No
Sino Great Wall Co., Ltd.2017.08.24.2018.08.23.No
Sino Great Wall Co., Ltd.100,000,000.002017.06.28.2018.12.21.No
Sino Great Wall Co., Ltd.100,000,000.002017.08.09.2018.08.08.No
Sino Great Wall Co., Ltd.130,000,000.002017.08.22.2018.08.21.Yes
Sino Great Wall Co., Ltd.2017.08.23.2018.08.22.Yes
Sino Great Wall Co., Ltd.130,000,000.002018.09.30.2019.09.29.No
Sino Great Wall Co., Ltd.2018.11.02.2019.09.29.No
Sino Great Wall Co., Ltd.200,000,000.002017.08.30.2018.08.30.Yes
Sino Great Wall Co., Ltd.200,000,000.002018.09.08.2019.03.08.No
Sino Great Wall Co., Ltd.50,000,000.002017.11.17.2018.11.17.No
Sino Great Wall Co., Ltd.200,000,000.002017.10.26.2018.05.27.No
Sino Great Wall Co., Ltd.100,000,000.002016.10.27.2017.10.27.No
Sino Great Wall Co., Ltd.200,000,000.002016.04.19.2018.04.19.No
Sino Great Wall Co., Ltd.400,000,000.002016.06.28.2018.06.27.No
Sino Great Wall Co., Ltd.300,000,000.002017.05.10.2020.05.10.No
Sino Great Wall Co., Ltd.200,000,000.002017.08.03.2019.02.03.No
Sino Great Wall Co., Ltd.2017.08.10.2019.02.10.No
Sino Great Wall Co., Ltd.2017.08.16.2019.02.16.No
Sino Great Wall Co.,2017.08.03.2019.08.03.No
Ltd.
Sino Great Wall Co., Ltd.2017.08.10.2019.08.10.No
Sino Great Wall Co., Ltd.2017.08.16.2019.08.16.No
Sino Great Wall Co., Ltd.300,000,000.002017.09.18.2019.09.18.No
Sino Great Wall Co., Ltd.2017.09.25.2019.09.25.No
Sino Great Wall Co., Ltd.2017.09.29.2019.09.29.No
Sino Great Wall Co., Ltd.2017.10.13.2019.10.13.No
Sino Great Wall Co., Ltd.2017.10.18.2019.10.18.No
Sino Great Wall Co., Ltd.160,000,000.002018.04.04.2019.04.03.No
Sino Great Wall Co., Ltd.2018.04.04.2019.10.03.No
Sino Great Wall Co., Ltd.250,000,000.002017.01.11.2018.01.10.No
Sino Great Wall Co., Ltd.100,000,000.002016.09.30.2018.09.29.No
Sino Great Wall Co., Ltd.101,590,000.002018.12.28.2019.12.28.No
Sino Great Wall Co., Ltd.500,000,000.002016.11.12.2017.11.12.Yes
Sino Great Wall Co., Ltd.700,000,000.002017.11.16.2018.11.05.No
Sino Great Wall Co., Ltd.130,000,000.002016.10.28.2017.09.28.No
Sino Great Wall Co., Ltd.70,000,000.002017.02.28.2018.02.27.Yes
Sino Great Wall Co., Ltd.120,000,000.002018.03.12.2019.03.11.No
Sino Great Wall Co., Ltd.200,000,000.002017.04.11.2018.03.31.Yes
Sino Great Wall Co., Ltd.180,000,000.002017.01.03.2018.01.02.Yes
Sino Great Wall Co., Ltd.120,000,000.002017.06.07.2018.05.22.Yes
Sino Great Wall Co., Ltd.119,900,000.002018.08.22.2019.08.21.No
Sino Great Wall Co., Ltd.400,000,000.002017.07.25.2018.07.24.No
Sino Great Wall Co., Ltd.220,000,000.002017.06.30.2018.06.30.No
Sino Great Wall Co., Ltd.200,000,000.002017.10.18.2018.10.17.No
Sino Great Wall Co., Ltd.100,000,000.002017.11.22.2018.11.21.No
Sino Great Wall Co., Ltd.84,000,000.002017.03.31.2019.09.30.No
Sino Great Wall Co., Ltd.100,000,000.002017.11.30.2018.11.30.No
Sino Great Wall Co., Ltd.80,000,000.002018.02.13.2019.02.13.No
Sino Great Wall Co., Ltd.200,000,000.002017.12.28.2018.12.27.No
Sino Great Wall Construction Co. LTD.50,000,000.002017.09.30.2018.09.29.No
Wuhan Business Professional Hospital Co., Ltd.108,898,099.512017.01.18.2020.01.17.No

The company as the secured party

Unit: Yuan

Secured partyAmount guaranteedBeginning date of guaranteeEnd date of guaranteeFinished or yet
Chen Lue, Sino Great Wall Co., Ltd.130,000,000.002016.10.28.2017.09.28.No
Sino Great Wall Co., Ltd., Chen Lue70,000,000.002017.02.28.2018.02.27.Yes
Sino Great Wall Co., Ltd., Chen Lue120,000,000.002018.03.12.2019.03.11.No
Sino Great Wall Co., Ltd., Chen Lue200,000,000.002017.04.11.2018.03.31.Yes
Sino Great Wall Co.,180,000,000.002017.01.03.2018.01.02.Yes
Ltd., Chen Lue, He Feiyan
Sino Great Wall Co., Ltd., Chen Lue120,000,000.002017.06.07.2018.05.22.No
Sino Great Wall Co., Ltd., Chen Lue, Sino Great Wall Investment (Beijing) Co., Ltd, Suzhou Lvbang Wood Industry Technology Co., Ltd., Sino Great Wall Southwest Engineering Co., Ltd.119,900,000.002018.08.22.2019.08.21.No
Chen Lue, Sino Great Wall Zhihui Housing Property (Zhanjiang) Co., Ltd., Wuhan Business Professional Hospital Co., Ltd., China Industry Investment Co., Ltd., Sino Zhigu Industrial (Yueyang) Co., Ltd.400,000,000.002017.07.25.2018.07.24.No
Sino Great Wall Co., Ltd., Chen Lue220,000,000.002017.06.30.2018.06.30.No
Sino Great Wall Co., Ltd., Chen Lue200,000,000.002017.10.18.2019.10.17.No
Sino Great Wall Co., Ltd., Chen Lue100,000,000.002017.11.22.2018.11.21.No
Sino Great Wall Co., Ltd., Chen Lue84,000,000.002017.03.31.2019.09.30.No
Sino Great Wall Co., Ltd., Chen Lue100,000,000.002017.11.30.2018.11.30.No
Beijing Zhongguancun Sci-tech Financing Guaranty Co., Ltd.230,000,000.002016.02.22.2018.03.22.No
Beijing Zhongguancun Sci-tech Financing Guaranty Co., Ltd.150,000,000.002018.03.22.2020.09.10.No
Chen Lue5,500,000.002015.02.11.2018.02.11.No
Chen Lue5,500,000.002015.02.11.2018.02.11.No
Chen Lue5,500,000.002015.07.30.2018.07.30.No
Chen Lue5,500,000.002015.08.03.2018.08.03.No
Chen Lue12,000,000.002016.01.13.2018.01.13.No
Chen Lue12,000,000.002016.03.29.2018.03.29.No
Chen Lue12,000,000.002016.03.29.2018.03.29.No
Beijing Zhongguancun Sci-tech Financing Guaranty Co., Ltd.245,000,000.002017.10.31.2020.10.30.No
Sino Great Wall Co., Ltd., Chen Lue80,000,000.002018.02.13.2019.02.13.No
Sino Great Wall Co., Ltd., Chen Lue, He Feiyan200,000,000.002017.12.28.2018.12.27.No
Beijing Zhongguancun Sci-tech Financing Guaranty Co., Ltd.150,000,000.002017.12.14.2019.12.13.No
Sino Great Wall International Engineering Co., Ltd., Chen Lue, He Feiyan270,000,000.002017.03.13.2018.03.13.No
Sino Great Wall International Engineering Co., Ltd., Chen Lue, He Feiyan200,000,000.002017.01.13.2018.01.12.No
Sino Great Wall International Engineering Co., Ltd., Chen Lue200,000,000.002018.01.17.2019.01.16.No
Sino Great Wall International Engineering Co., Ltd., Chen Lue800,000,000.002017.04.17.2018.10.17.No
Chen Lue300,000,000.002017.08.21.2018.08.21.No
Sino Great Wall International Engineering Co., Ltd., Chen Lue50,000,000.002017.05.17.2018.05.16.No
Sino Great Wall International Engineering Co., Ltd., Chen Lue400,000,000.002017.06.23.2018.06.22.No
Sino Great Wall International Engineering Co., Ltd., Chen Lue2017.07.10.2018.07.09.No
Sino Great