Sino Great Wall Co., Ltd. 2018 Annual Report
1
Sino Great Wall Co., Ltd.
2018 Annual Report
April 2019 Sino Great Wall Co., Ltd. 2018 Annual Report
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I. Important Notice, Table of Contents and Definitions
The Board of Directors and the directors, Supervisory Committee and
supervisors and Senior Executives of the Company hereby warrant that at the
year, there are no misstatement, misleading representation or important
omissions in this report and shall assume joint and several liability for the
authenticity, accuracy and completeness of the contents hereof.
Mr. Chen Lue, The Company leader, Ms. Yang Chunling, Chief Financial
Officer and the person in charge of the accounting department (the person in
charge of the accounting) hereby confirm the authenticity and completeness of
the financial report enclosed in this annual report.
Directors apart from the below mentioned have attended the Meeting for
annual report deliberation:
Absent Director Name Absent Director Title Absent Reason Attorney Name
Jiang Chongguang Independent Director Work Arrangements Yu Haichun
Due to the inability to obtain sufficient and appropriate audit evidence as
the basis for expressing audit opinions on the financial statements, Reanda
Public Certified Accountants (LLP) issued an audit report that could reservation
opinions on the company. The board of directors and the board of supervisors of
the Company have made detailed explanations on relevant matters, to which
investors shall pay attention.
Any plans for the future and other forward-looking statements mentioned Sino Great Wall Co., Ltd. 2018 Annual Report
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in this Report shall Not be considered as absolute promises of the Company to
investors. Therefore, investors are kindly reminded to pay attention to possible
investment risks.
Possible risks faced by the Company and countermeasures have been
explained in “Operating Performance Discussion and Analysis” herein, which
investors are kindly reminded to pay attention to.
The Company has no plan of cash dividends carried out, bonus issued and
capitalizing of common reserves either. Sino Great Wall Co., Ltd. 2018 Annual Report
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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 Sino Great Wall Co., Ltd. 2018 Annual Report
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Definition
Terms to be defined Refers to Definition
Company Law Refers to Company Law of the People’ s Republic of China
Securities Law Refers to Securities Law of the People’ s Republic of China
“CSRC” Refers to China Securities Regulatory Commission
Company, The Company, Sino Great Wall Refers to Sino Great Wall Co., Ltd.
Sino International Refers to Sino Great Wall International Engineering Co., Ltd.
Reanda Refers to Reanda Certified Public Accountants LLP
SSE Refers to Shenzhen Stock Exchange
Shenzhen Regulatory Authority Refers to Shenzhen Regulatory Authority of China Securities Regulatory Commission
Reporting period Refers to January 1, 2018 to December 31, 2018
Wuhan Commercial Worker Hospital Refers to Wuhan Commercial Worker Hospital Co., Ltd.
Union Holdings Refers to Union Holdings Co., Ltd.
Rich Crown Investment Refers to Rich Crown Investment Co., Ltd.
Baden-Baden Hospital Refers to Acura Kliniken Baden-Baden GmbH Sino Great Wall Co., Ltd. 2018 Annual Report
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II. Basic Information of the Company and Financial index
I ．Company Information
Stock abbreviation: Sino Great Wall; Sino-B Stock code ： 000018; 200018
Change of stock Abbreviation
（If any ）
Nil
Stock exchange for listing Shenzhen Stock Exchange
Name in Chinese 神州长城股份有限公司
Chinese Abbreviation 神州长城
English name (If any) Sino Great Wall Co., Ltd.
English Abbreviation (If any) Sino Great Wall; Sino-B
Legal Representative Chen Lue
Registered address 26 Kuipeng Road, Kuiyong Town, Longgang District, Shenzhen
Postal code of the Registered
Address
518119
Office Address Sino Great Wall Building, No.3 Jinxiu Street,Economic Technology Development Zone , Beijing
Postal code of the office
address
100176
Internet Web Site www.sgwde.com
E-mail 000018sz@sina.com
II. Contact person and contact manner
Board secretary Securities affairs Representative
Name Yang Chunling Sun Yu
Contact address
Sino Great Wall Building, No.3 Jinxiu
Street,Economic Technology Development
Zone , Beijing
Sino Great Wall Building, No.3 Jinxiu
Street,Economic Technology Development
Zone , Beijing
Tel 010-89045855 010-89045855
Fax 010-89045856 010-89045856
E-mail 1208806865@qq.com 000018sz@sina.com
III. Information disclosure and placed
Newspapers selected by the Company for information
Securities Times and Hongkong Commercial Daily. Sino Great Wall Co., Ltd. 2018 Annual Report
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disclosure
Internet website designated by CSRC for publishing
the Annual report of the Company
http: // www.cninfo. com. cn
The place where the Annual report is prepared and
placed
Securities Department, Sino Great Wall Building, No.3 Jinxiu Street,
Economic Technology Development Zone, Beijing
IV. Changes in Registration
Organization Code 91440300618801483A
Changes in principal business activities
since listing (if any)
Nil
Changes is the controlling shareholder in
the past (is any)
Nil
V. Other Relevant Information
CPAs engaged
Name of the CPAs Reanda Certified Public Accountants LLP
Office address ：
11/F, Building E, Sino-Ocean International, No.210, Ciyuansi Beili, Chaoyang District,
Beijing, PRC
Names of the Certified Public
Accountants as the signatories
Wang Xinyu, Zhou Zhonghua
The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.
√ Applicable □Not applicable
Sponsor Name Office address Representatives Period of supervision and guide
Huatai United Securities Co.,
Ltd.
6/F, A Unit, Fengming
International Building, No.22,
Fengsheng Hutong, Xicheng
District, Beijing
Wu Wenmin, Fang Yuhui
September 27, 2015 to
December 31, 2018
The Financial advisor performing persist ant supervision duties engaged by the Company in the reporting period
√ Applicable □Not applicable
Advisor Name Office address Representatives Period of supervision and guide
Huatai United Securities Co.,
Ltd.
6/F, A Unit, Fengming
International Building, No.22,
Fengsheng Hutong, Xicheng
District, Beijing
Wu Wenmin, Fang Yuhui
September 27, 2015 to
December 31, 2018
VI. Summary of Accounting data and Financial index
May the Company make retroactive adjustment or restatement of the accounting data of the previous years Sino Great Wall Co., Ltd. 2018 Annual Report
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□Yes √No
2018 2017
Changed over last year
(%)
2016
Operating revenue 2,426,987,687.02 6,497,124,980.52 -62.65% 4,664,999,117.17
Net profit attributable to the
shareholders of the listed company
(Yuan)
-1,704,739,736.40 380,090,990.82 -548.51% 473,661,862.67
Net profit after deducting of
non-recurring gain/loss attributable
to the shareholders of listed
company (Yuan)
-1,411,440,495.34 377,087,197.69 -474.30% 470,274,602.37
Net cash flow generated by
business operation, net (Yuan)
827,879,055.45 -1,781,868,618.65 -146.46% -1,687,875,813.94
Basic earning per share
(Yuan/Share)
-1.004 0.220 -560.45% 0.28
Diluted gains per share
(Yuan/Share)
-1.004 0.220 -560.45% 0.28
Net asset earning ratio (%) -142.85% 19.35% -162.20% 31.18%
End of 2018
End of
2017
Changed over last year
(%)
End of 2016
Gross assets 9,603,455,934.89 11,667,845,186.30 -17.69% 7,986,178,961.63
Net assets attributable to
shareholders of the listed company
(Yuan)
235,202,473.51 2,151,482,467.52 -89.07% 1,777,948,117.49
VII. The differences between domestic and international accounting standards
1 ．Simultaneously pursuant to both Chinese accounting standards and international accounting standards
disclosed in the financial reports of differences in net income and net assets
□ Applicable√ Not applicable
Non-existence
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards.
□ Applicable√Not applicable
Non-existence Sino Great Wall Co., Ltd. 2018 Annual Report
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VIII. Main Financial Index by Quarters
Unit: Yuan
First quarter Second quarter Third quarter Fourth quarter
Operating income 923,442,740.92 663,528,834.32 672,083,613.81 167,932,497.97
Net profit attributable to the
shareholders of the listed
company
218,523,628.75 -74,524,173.03 -118,516,821.76 -1,730,222,370.36
Net profit after deducting of
non-recurring gain/loss
attributable to the shareholders
of listed company
56,977,615.63 -65,023,592.77 -144,157,168.17 1,284,719,983.995
Net Cash flow generated by
business operation
809,676,459.22 288,487,906.41 189,148,952.32 459,434,262.506
Whether significant variances exist between the above financial index or the index with its sum and the financial index of the
quarterly report as well as semi-annual report index disclosed by the Company.
□ Yes √No
IX. Items and amount of non-current gains and losses
√Applicable □Not applicable
Unit: Yuan
Items Amount (2018) Amount (2017) Amount (2016) Notes
Non-current asset disposal gain/loss
(including the write-off part for which
assets impairment provision is made)
-1,181,511.77 -150,250.00 -564,833.40
Government subsidy recognized in current
gain and loss (excluding those closely
related to the Company’s business and
granted under the state’s policies)
105,536,702.00 2,211,128.89 108,121.33
Profit due to the situation where
investment costs for the company to
obtain subsidiaries, associates and joint
ventures are lower than the enjoyable fair
Value of identifiable net assets of
investees when making investments
1,783,284.99
Profit/loss on fair value changes of
transactional financial assets and liabilities
& investment profit on disposal of
transactional financial assets and liabilities
as well as financial assets available for
443,065.98 Sino Great Wall Co., Ltd. 2018 Annual Report
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sale, except for effectively hedging
business related to normal business
operations for the Company
Other non-operating income and
expenditure except for the aforementioned
items
-397,654,450.87 1,444,308.74 5,296,814.65
Less: Amount of influence of income tax 501,394.50 3,668,000.60
Influenced amount of minor
shareholders’ equity (after tax)
-19.58 11,192.65
Total -293,299,241.06 3,003,793.13 3,387,260.30 --
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on
information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and
its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure
for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as
recurring gains and losses, it is necessary to explain the reason.
□ Applicable√ Not applicable
None of Non-recurring gain /loss items recognized as recurring gain /loss/items as defined by the information
disclosure explanatory Announcement No.1- Non-recurring gain/loss in the report period. Sino Great Wall Co., Ltd. 2018 Annual Report
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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 industry
Yes
Civil Engineering Construction
The company shall comply with disclosure requirements in Shenzhen Stock Exchange Industry Information Disclosure Guidelines
No. 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 health
industry investment and management. The engineering construction mainly includes the international EPC and domestic PPP
business. The medical treatment and health industry investment and management mainly comprises the hospitals and medical
treatment 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 covers
the house building, roads and bridges, power and chemical industry as well as medical treatment and health, etc. among many
countries 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 the
high-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 government
will select the social capital with the investment and operation management capacity through the competitive ways and both parties
shall enter into the contract subject to the equality-based consultation principle, under which, the social capital shall provide public
services and the government shall pay the consideration against the social capital based on the public service achievement assessment
result.
The Company business includes the project development, financing, design, procurement and construction, etc. and it will also
participate 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 contracted
engineering projects industry for other countries is in the good growth momentum wholly with continuous expansion of the industry
scale. During the reporting period, the company was awarded with the 138th medal in the “2018 ENR Top 250 International
Contractors” (ranked 39th among Chinese enterprises and 1st among Chinese private enterprises). According to statistics from the
Ministry of Commerce and the State Administration of Foreign Exchange, China's industry-wide foreign direct investment in 2018
was USD 129.83 billion, with a year-on-year increase of 4.2%. Turnover from overseas contracted projects reached USD 169.04
billion, with a year-on-year increase of 0.3%. The turnover of overseas contracted projects in 63 countries and regions along the “the
Belt and Road” was USD 89.33 billion, accounting for 52% of the total for the same period. The Chinese government has continued
to push forward the construction of "the Belt and Road" and has strengthened strategic docking with countries and regions along the
line. It has embraced a broader cooperation space in infrastructure construction, metallurgical engineering, equipment manufacturing
and 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 General
Constructing-Grade I, Highway Engineering General Constructing-Grade I; Municipal utility construction General Sino Great Wall Co., Ltd. 2018 Annual Report
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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 Project
Specialized Contracting-Grade I, Construction Curtain Wall Project Specialized Contracting- Grade I, Fire Control Facilities Project
Specialized 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 wall
engineering design and architectural decoration engineering design; in addition, possesses 5 second-class qualifications, including the
second-class general contracting qualification of construction of water conservancy and hydropower projects, the second-class of
general contracting of metallurgy engineering construction, the second-class qualification of professional contracting of steel structure
engineering, the second-class qualification of professional contracting of electronic and intelligent engineering and the second-class
general contracting qualification of mechanical and electrical engineering construction, and possesses the third-class general
contracting qualification of railway construction, the specialized contracting qualification for special projects and so forth
qualifications. 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 management
ability continuously for many years. For the domestic business, accumulates experience in aspects of the project bidding, financing
ways 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 the
company's business development. The financing during the reporting period is as follows:
Unit: Yuan
No Financing Channel December 31,
2018
Financing cost range Structure
1 Bank loans
1,664,568,470.43
5.2%-8.1% 1年以内
160,440,152.95
3.5%-5.2% 1-2年
-
- 2-3年
Subtotal
1,825,008,623.38
2 Trust financing
666,666,608.68
6.09%-9.9% 1年以内
876,250,000
6.65%-9.9% 1-2年
300,000,000
6.56% 2-3年
Subtotal
1,842,916,608.68
3 Bond financing
100,000,000
6.2% 1-2年
145,000,000
6.2% 2-3年
Subtotal
345,000,000
4 Notes
211,334,653.11
0-10% 1年以内
Total
4,224,259,885.17
(V) Quality Control System
Quality is the life of engineering construction companies. Quality is the best display and promotion of the image of
construction 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 Sino Great Wall Co., Ltd. 2018 Annual Report
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effective and mature quality control processes and systems. Quality control measures have been continuously optimized to cover all
aspects and operate efficiently; quality management is scientific and standardized. During the reporting period, the company did not
have 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 safety
production, carefully organizes safety education and training, adheres to the safety red line, strictly implements the safety production
responsibility system, and conducts in-depth safety inspections and hidden trouble investigations, enhances safety precautions, and
creates a safe, harmonious, standardized construction environment, and constantly improves the level of precision management of
safety production. During the reporting period, the company did not have major safety issues, all work was carried out in an orderly
manner, and the construction was safe and stable.
Ⅱ.Major Changes in Main Assets
1. Major Changes in Main Assets
Main Major changes
Equity assets The slight change
Fixed assets Mainly due to the scrapping of vehicles and the sale of houses
Intangible assets
Mainly due to the transfer of Sino Great Wall Intelligent Real Estate (Zhanjiang) Co.,
Ltd. to reduce intangible assets
Construction in process
Mainly that the Sino Zhigu Industry (Yueyang) Co., Ltd. and Chengwu County
Shenguang Project Management Co., Ltd. merge the project under construction
2. Main Conditions of Overseas Assets
□ Applicable□√ Not applicable
Ⅲ.Analysis On core Competitiveness
Whether the company needs to comply with the disclosure requirements of the particular industry
Yes
Civil 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 Strategy
of “One Belt, One Road” will provide a good opportunity for the company's overseas business development. The company continues
to increase efforts to open up overseas markets, thus the overseas project orders and the revenue have maintained a rapid annual
growth rate. Domestic business, With the continuous promotion of national PPP projects. The company will also usher in a better
development opportunity, the company's comprehensive strength, overseas influence and market competitiveness have increased year
by year.
1. Strategic positioning advantage
The “Construction & Engineering contracting” and “Medical & Health Business” will be the company’s two strategic Sino Great Wall Co., Ltd. 2018 Annual Report
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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 set
up the “Medical & Health business” as another essential development direction. All of those are to comprehensively cater the needs
of 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. In
terms of engineering contracting, the early-development advantage of overseas business enables the company to have rich
management experiences and high-quality customers and establish talented teams, thus laid a solid foundation for the company’s
overseas business development. In terms of the Medical & Health business, the company has set up project teams in many domestic
places such as Sichuan, Henan and Hubei, and the company has purchased Wuhan Commercial Worker Hospital and won the bids of
many medical PPP project. Also, the company has established cooperative relationships with many hospitals and has recruited many
kinds of talents in terms of medical, hospital management, investment and financing etc., thus provided a strong support for the
Medical & 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 more
complex. However, the company timely set up the sound management system and the authorization system to standardize the
approval procedures, reduce the management hierarchy tiers and improve the work efficiency and execution, thus ensured the
efficient operation of the company’s business operation. For the operation mechanism, the company bravely faces the fierce
competition in the market, adheres to the market-oriented development, respects the objective laws of the market and constantly
improves its management level, thus to timely response to changes in the market and continuously improve the company's market
image, 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 construction
experiences and good project management capabilities, so the company is able to provide integrated design and construction services
in terms of civil engineering, decoration, mechanical and electrical installation and full industry chain of curtain wall, and the
company can independently complete the whole process of construction project. The company can form a comprehensive advantage
in the field of building engineering, so it can reasonably schedule the procurement, labor use and construction plan, as well as the
company can constantly optimize the process to reduce the project costs. The company’s excellent design ability, sound construction
quality, 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 management
and quality control system. Through the price ceiling mode for procurement, the company screens the suppliers in the early stage of a
project, thus to ensure that the procurement costs of the project materials would be in a reasonable scope. By locking the technical
requirements and time requirements of the project, the company can lock the labor costs. The company has set up strict
quality-control system for the design drawing, raw material procurement and each aspect of the project construction management, thus
to strictly ensue the project construction quality, so the company has won good reputation and got trust and recognition by a great
number of customers. Sino Great Wall Co., Ltd. 2018 Annual Report
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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 competition
intensified. 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 liquidity
difficulties of the company's operating funds and triggering a series of chain reactions of operating difficulties. Overdue repayment
appeared in the financing of the company, its subsidiaries and banks and other financial institutions. Major accounts, some assets and
shares of subsidiaries were frozen by overdue financial institutions in pre litigation preservation, further causing some employees of
the company to default on their wages, some suppliers to default on their debts, and bidding for new projects was also greatly
affected. The company's operating income has been greatly reduced, and the annual operating results in 2018 show losses for the first
time. In 2018, the company realized operation income of RMB 2.431 billion, a decrease of 62.58% from the last year; realized the
operating profits of RMB- 1.48 billion, a decrease of 391.32% from the last year; and the net profit attributable to the parent
company 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 and
scale, and continued to steadily expand its business. During the reporting period, the company faced difficulties both domestically
and abroad. In terms of foreign business, the company undertook the traditional construction business-Cambodia Mekong River Villa
Project; Meanwhile, it actively participated in investment and financing, development, construction and operation projects, and
jointly develops Dongpoxi Comprehensive Park in Laos with international engineering companies; In addition, It completed and
delivered the residential and commercial buildings of the stock project NAGA Phase II Integrated entertainment in Cambodia and the
Cambodia 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 strategic
projects such as Chengdu Rennan Square Project, Future New World Project, Xinhui Hilton Hotel and Villa Project. Meanwhile, it
actively expands its major clients and reaches strategic cooperation intentions with well-known real estate developers and investment
companies, 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 the
influence of the adjustment of national financial policies, the company actively expanded the traditional construction business of
infrastructure, utilized existing resources, and strengthened horizontal integration. It is expected that some breakthroughs will be
made 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 the
implementation of strategic development goals. In recent years, the Chinese government has successively issued relevant policies to
vigorously promote the transformation of the construction industry to construction industrialization. The company has set up a “Sino
Great Wall Intelligence Residential Co, LTD.” in Zhanjiang, Guangdong, to produce fabricated supporting products. During the
reporting period, the construction of the base's factory building framework was basically completed. Due to the financial
environment, the production line has not yet been established and put into production. Meanwhile, the company promoted the rural
assembly 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. It
has successively carried out a series of reforms and innovations in enterprise management mode, timely investigated and re-elected
board 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 Sino Great Wall Co., Ltd. 2018 Annual Report
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development potential in adversity.
Ⅱ. Main business analysis
1. General
Refer to relevant contents of “1.Summarization” in “Discussion and Analysis of Management”.
2. Revenue and cost
(1) Revenue structure
Unit: Yuan
2018 2017
Year-on-year
increase/decrease
Amount Proportion Amount Proportion
Total of operating
revenue
2,426,987,687.02 100% 6,497,124,980.52 100% -62.65%
On industry
EPC 1,853,545,312.44 76.37% 4,268,109,664.43 65.69% -56.57%
Engineering
design
6,971,646.83 0.29% 19,119,855.94 0.29% -63.54%
Decoration work 430,784,976.15 17.75% 2,015,057,491.48 31.01% -78.62%
Medical Service
revenue
135,685,751.60 5.59% 132,427,255.48 2.04% 2.46%
Other 62,410,713.19 0.96% -100.00%
On product
EPC 1,853,545,312.44 76.37% 4,268,109,664.43 65.69% -56.57%
Engineering
design
6,971,646.83 0.29% 19,119,855.94 0.29% -63.54%
Decoration work 430,784,976.15 17.75% 2,015,057,491.48 31.01% -78.62%
Medical Service
revenue
135,685,751.60 5.59% 132,427,255.48 2.04% 2.46%
Other 62,410,713.19 0.96% -100.00%
On Area
Domestic 1,725,531,194.49 71.10% 3,750,012,620.09 57.72% -53.99%
Overseas 701,456,492.53 28.90% 2,747,112,360.43 42.28% -74.47% Sino Great Wall Co., Ltd. 2018 Annual Report
18
(2) Situation of Industry, Product and District Occupying the Company’s Business Income and Operating
Profit with Profit over 10%
√ Applicable □Not applicable
Whether the company needs to comply with the disclosure requirements of the particular industry
Yes
Civil Engineering Construction
Unit: Yuan
Turnover Operation cost
Gross profit
rate (%)
Increase/decrea
se of revenue in
the same period
of the previous
year (%)
Increase/decrea
se of business
cost over the
same period of
previous year
(%)
Increase/decrea
se of gross
profit rate over
the same period
of the previous
year (%)
On Industry
EPC
1,853,545,312.
44
1,854,176,312.
80
-0.03% -56.57% -38.80% -29.05%
Decoration
work
430,784,976.15 494,437,274.02 -14.78% -78.62% -70.55% -31.47%
On Product
EPC
1,853,545,312.
44
1,854,176,312.
80
-0.03% -56.57% -38.80% -29.05%
Decoration
work
430,784,976.15 494,437,274.02 -14.78% -78.62% -70.55% -31.47%
On Area
Domestic
1,725,531,194.
49
1,817,363,558.
28
-5.32% -53.99% -40.14% -24.36%
Overseas 701,456,492.53 632,137,076.59 9.88% -74.47% -65.84% -22.76%
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on
latest 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 applicable
Whether the company needs to comply with the disclosure requirements of the particular industry
Yes Sino Great Wall Co., Ltd. 2018 Annual Report
19
Civil Engineering Construction
The company is required to comply with the disclosure requirements of No. 7 of Shenzhen Stock Exchange's Industry Information
Disclosure Guidelines - Listed Companies Engaged in Civil Engineering Construction Business.
Major
Projects
Business
Mode
Price
Settin
g
Policy
Repay
ment
Arran
gemen
ts
Financ
ing
Metho
ds
Prefer
ential
Policie
s
Franchis
ing (If
Applica
ble)
Operati
ng
Period
(If
Applica
ble)
Source of
Income
And
Attribution
(If
Applicable)
Guarant
eed
Base
Operati
ons (If
Applica
ble)
Investment
Income
Protection
Measures
(If
Applicable)
Subcontrac
ted Project
of the
Military
Academy
of Kuwait
National
Ministry of
Defence
EPC
General
contractin
g
Negoti
ated
pricin
g
Execut
e
accord
ing to
the
contra
ct
Bank
loan
None Not
applicab
le
Not
applicab
le
Constructio
n income
Not
applicab
le
Not
applicable
Qatar
Newport
NPP/0057
Housing
and
Infrastructu
re
Engineerin
g
EPC
General
contractin
g
Negoti
ated
pricin
g
Execut
e
accord
ing to
the
contra
ct
Bank
loan
None Not
applicab
le
Not
applicab
le
Constructio
n income
Not
applicab
le
Not
applicable
5 million
tons / year
refinery
project in
Cambodia
EPC
General
contractin
g
Negoti
ated
pricin
g
Execut
e
accord
ing to
the
contra
ct
Bank
loan
None Not
applicab
le
Not
applicab
le
Constructio
n income
Not
applicab
le
Not
applicable
Cambodia
Haoli
Diamond
Project
(Phnom
Penh
National
Assembly
EPC
General
contractin
g
Biddin
g
pricin
g
Execut
e
accord
ing to
the
contra
ct
Bank
loan
None Not
applicab
le
Not
applicab
le
Constructio
n income
Not
applicab
le
Not
applicable Sino Great Wall Co., Ltd. 2018 Annual Report
20
Street
Commercia
l/Residenti
al Area
Developme
nt Project)
PPP project
of Baiyang
Lake
Headquarte
rs
Economic
Port,
Xingang
District,
Chenglingji
, Hunan
Province
PPP mode Biddin
g
pricin
g
Execut
e
accord
ing to
the
contra
ct
Bank
loan
None Not
applicab
le
Not
applicab
le
Constructio
n income
Not
applicab
le
Not
applicable
Chongqing
Yinglong
Lake Rural
Revitalizati
on
Demonstrat
ion Park
Project
Investme
nt
Developme
nt of the
Dongpoxi
Special
Economic
Zone in
Vientiane,
Laos －
EPC
General
Contract
EPC
General
contractin
g
Negoti
ated
pricin
g
Execut
e
accord
ing to
the
contra
ct
Bank
loan
None Not
applicab
le
Not
applicab
le
Constructio
n income
Not
applicab
le
Not
applicable
General
contracting
of 5000
sets of
modern
affordable
EPC+F
General
contractin
g
Negoti
ated
pricin
g
Execut
e
accord
ing to
the
contra
Bank
loan
None Not
applicab
le
Not
applicab
le
Constructio
n income
Not
applicab
le
Not
applicable Sino Great Wall Co., Ltd. 2018 Annual Report
21
housing
projects in
the
Republic of
Congo
ct
Status of completed (completed acceptance) project during the reporting period:
Unit: Yuan
Business Model
Number of
Projects
Item Amount
Acceptance
Situation
Revenue
Confirmation
Settlement
Situation
Repayment
Situation
EPC General
contracting
1
1,100,000,00
0.00
Handed over
Revenue
confirmed
Unsettlement
1,080,142,72
2.26
Status of completed (non-completed acceptance) project during the reporting period:
Unit: Yuan
Business Model Number of Projects Item Amount Accumulated Confirmed
Revenue
Amount of
Non-completed Parts
PPP mode 1 2,000,000,000.00 9,137,796.59 1,990,862,203.41
EPC+F General
contracting
1 2,000,000,000.00 0.00 0.00
Investment 1 10,000,000,000.00 0.00 0.00
Unit: Yuan
Project
Name
Completi
on
Business
Model
Start
Date
Durat
ion
Percentage
of
Completio
n
Current
Confirmed
Revenue
Accumulate
d Confirmed
Revenue
Repay
ment
Situati
on
Receivable
s Balance
Subcontracte
d Project of
the Military
Academy of
Kuwait
National
Ministry of
Defence
2,100,00
0,000.00
EPC
General
contracti
ng
June
21,
2015
1,460
days
57.00% 1,174,079,61
4.23
483,55
7,587.6
3
716,094,88
1.32
Qatar
Newport
NPP/0057
Housing and
Infrastructur
e
Engineering
1,500,00
0,000.00
EPC
General
contracti
ng
March
20,
2015
971
days
100.00% 54,541,245.2
6
1,981,727,57
7.07
1,320,4
38,761.
02
674,079,63
6.78
5 million 4,268,00 EPC May 4, 1,381 9.00% 0.00 369,885,008. 172,83 197,051,27 Sino Great Wall Co., Ltd. 2018 Annual Report
22
tons / year
refinery
project in
Cambodia
0,000.00 General
contracti
ng
2017 days 26 3,735.0
6
3.20
Cambodia
Haoli
Diamond
Project
(Phnom
Penh
National
Assembly
Street
Commercial/
Residential
Area
Developmen
t Project)
1,100,00
0,000.00
EPC
General
contracti
ng
August
14,
2014
1,996
days
100.00% 0.00 1,070,958,57
5.31
1,080,1
42,722.
26
2,766,807.
52
PPP project
of Baiyang
Lake
Headquarter
s Economic
Port,
Xingang
District,
Chenglingji,
Hunan
Province
2,000,00
0,000.00
PPP
mode
Novem
ber 01,
2017
1,095
days
9,137,796.59 9,137,796.59 - 10,051,576
.25
Chongqing
Yinglong
Lake Rural
Revitalizatio
n
Demonstrati
on Park
Project
10,000,0
00,000.0
0
Investme
nt
Developmen
t of the
Dongpoxi
Special
Economic
Zone in
8,736,00
0,000.00
EPC
General
contracti
ng
2,190
days
Sino Great Wall Co., Ltd. 2018 Annual Report
23
Vientiane,
Laos －
EPC General
Contract
General
contracting
of 5000 sets
of modern
affordable
housing
projects in
the Republic
of Congo
2,000,00
0,000.00
EPC+F
General
contracti
ng
Other notes□ Applicable √ Not applicable
Status of completed outstanding projects in inventory:
Unit: Yuan
Accumulated Costs
Incurred
Accumulated
Confirmed Gross Profit
Expected Loss
Already Settled
Amount
Completed Outstanding
Balance
Unit: Yuan
Project name Amount Already Settled Amount
Completed Outstanding
Balance
Other Notes□ Applicable √ Not applicable
Does the company carry out overseas projects?
√ Yes □No
Unit: Yuan
Project name Amount Business Model Completion
Subcontracted Project of the
Military Academy of Kuwait
National Ministry of Defence
2,100,000,000.00 EPC General contracting The civil construction structure and
masonry of each building are
completed, and the doors and
windows, decoration, and
electromechanical professional
construction are in progress.
Qatar Newport NPP/0057
Housing and Infrastructure
Engineering
1,500,000,000.00 EPC General contracting Under finishing construction Sino Great Wall Co., Ltd. 2018 Annual Report
24
5 million tons / year refinery
project in Cambodia
4,268,000,000.00 EPC General contracting Earthwork backfilling, earthmoving
work; construction of concrete
mixing plant; temporary
infrastructure construction, and
temporary camp construction
Cambodia Haoli Diamond
Project (Phnom Penh National
Assembly Street
Commercial/Residential Area
Development Project)
1,100,000,000.00 EPC General contracting The structure is completed and
handed over, the podium building is
completed and handed over, the
SOHU decoration is completed and
handed over; the APT tower
decoration is completed and handed
over; the podium curtain wall is
completed and handed over; the
electromechanical construction is
completed and handed over
PPP project of Baiyang Lake
Headquarters Economic Port,
Xingang District, Chenglingji,
Hunan Province
2,000,000,000.00 PPP mode
Chongqing Yinglong Lake
Rural Revitalization
Demonstration Park Project
10,000,000,000.00 Investment
Development of the Dongpoxi
Special Economic Zone in
Vientiane, Laos － EPC
General Contract
8,736,000,000.00 EPC General contracting On-site camp and temporary
construction are completed
General contracting of 5000
sets of modern affordable
housing projects in the
Republic of Congo
2,000,000,000.00 EPC+F General
contracting
(5) Composition of business cost
The company shall comply with disclosure requirements in Shenzhen Stock Exchange Industry Information
Disclosure Guidelines No. 7-the Listed Company Engagement in Civil Engineering Construction Business.
Component of business cost
Unit: Yuan
Composition
2018 2017
Increase /decrease
Proportion
Amount Proportion Amount Amount
Labor 1,504,503,479.98 61.42% 2,765,222,215.84 56.59% -45.59%
Material 695,785,282.38 28.41% 1,483,612,055.43 30.36% -53.10% Sino Great Wall Co., Ltd. 2018 Annual Report
25
Other 249,211,872.51 10.17% 527,498,994.96 10.80% -52.76%
Industry Category
Unit: Yuan
Industry Items
2018 2017
Increase
/decrease
Amount Proportion Amount Proportion
EPC Labor
1,231,327,330.
77
50.27%
2,506,781,251.
44
51.30% -50.88%
EPC Material 522,483,649.03 21.33%
1,286,809,864.
40
26.33% -59.40%
EPC Other 100,365,333.00 4.10% 433,230,315.67 8.87% -76.83%
Medical service 99,316,403.49 4.05% 97,366,145.37 1.99% 2.00%
Engineering
design
1,570,644.56 0.06% 13,262,528.25 0.27% -88.16%
Decoration
work
Labor 273,176,149.21 11.15% 258,440,964.40 5.29% 5.70%
Decoration
work
Material 173,301,633.35 7.07% 196,802,191.03 4.03% -11.94%
Decoration
work
Other 47,959,491.46 1.96% 94,268,679.29 1.93% -49.12%
Unit: Yuan
Product Items
2018 2017
Increase
/decrease
Amount Proportion Amount Proportion
EPC Labor
1,231,327,330.
77
50.27%
2,506,781,251.
44
51.30% -50.88%
EPC Material 522,483,649.03 21.33%
1,286,809,864.
40
26.33% -59.40%
EPC Other 100,365,333.00 4.10% 433,230,315.67 8.87% -76.83%
Medical service 99,316,403.49 4.05% 97,366,145.37 1.99% 2.00%
Engineering
design
1,570,644.56 0.06% 13,262,528.25 0.27% -88.16%
Decoration
work
Labor 273,176,149.21 11.15% 258,440,964.40 5.29% 5.70%
Decoration
work
Material 173,301,633.35 7.07% 196,802,191.03 4.03% -11.94%
Decoration
work
Other 47,959,491.46 1.96% 94,268,679.29 1.93% -49.12%
Note Sino Great Wall Co., Ltd. 2018 Annual Report
26
(6) Whether Changes Occurred in Consolidation Scope in the Report Period
√ Yes □No
During 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 the
Company’s Report Period
□ Applicable √ Not applicable
(8) Situation of Main Customers and Main Supplier
Information of Main Customers
Total sales amount to top 5 customers (RMB)
1,175,772,799.58
Proportion of sales to top 5 customers in the annual
sales (%)
48.45%
Proportion of the sales volume to the top five customers
in the total sales to the related parties in the year
0.00%
Information of the Company’s top 5 customers
No Name Amount (RMB) Proportion (%)
1 Customer 1 588,855,867.69 24.26%
2 Customer 2 323,621,751.26 13.33%
3 Customer 3 100,635,898.11 4.15%
4 Customer 4 84,152,835.11 3.47%
5 Customer 5 78,506,447.41 3.23%
Total -- 1,175,772,799.58 48.45%
Other notes of major customers
□ Applicable √ Not applicable
Major suppliers
Total purchase of top 5 Suppliers (RMB)
645,383,000.58
Percentage of total purchase of top 5 suppliers in total
annual purchase (%)
26.35%
Proportion of purchase amount from the top 5 suppliers
in the total purchase amount from the related parties in
the year
0.00%
Information about the top 5 suppliers
No Name Amount (RMB) Proportion Sino Great Wall Co., Ltd. 2018 Annual Report
27
1 Supplier 1 390,603,102.00 15.95%
2 Supplier 2 77,094,220.90 3.15%
3 Supplier 3 67,334,330.25 2.75%
4 Supplier 4 56,090,518.76 2.29%
5 Supplier 5 54,260,828.64 2.22%
Total -- 645,383,000.58 26.35%
Other notes of major suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: Yuan
2018 2017
Increase/Decreas
e (%)
Notes
Sale expenses 28,300,802.42 32,213,247.97 -12.15%
Administration
expenses
311,698,800.53 312,957,207.20 -0.40%
Financial expenses 606,015,536.23 432,590,607.55 40.09%
Mainly due to interest on bank loans
and damages for breach of contract
4. R& D Expenses
√Applicable □Not applicable
In order to enhance the company’s core competitiveness and meet the needs of sustainable development, the Company’s main R&D
direction during the reporting period was decoration engineering design, project general contracting, etc. Currently, each project has
been progressed as scheduled, and after practical application, the good economic and social benefits have been achieved.
Situation of Research and Development Input by the Company
2018 2017 Increase /decrease (%)
Number of Research and
Development persons
(persons)
40 146 -72.60%
Proportion of Research and
Development persons
4.87% 5.08% -0.21%
Amount of Research and
Development Investment (In
RMB)
31,536,641.34 156,200,083.05 -79.81%
Proportion of Research and
Development Investment of
Operation Revenue
1.30% 2.40% -1.10% Sino Great Wall Co., Ltd. 2018 Annual Report
28
Amount of Research and
Development Investment
Capitalization (In RMB)
0.00 0.00 0.00%
Proportion of Capitalization
Research and Development
Investment of Research and
Development Investment
0.00% 0.00% 0.00%
The Reason of the Prominent Change in Total Amount of Research and Development Input Occupying the Business Income Year on
Year
□Applicable √Not applicable
Explanation of the Reason for Substantial Changes in the Research and Development Input’s Capitalization Rate and Its
Reasonableness
□Applicable √Not applicable
5. Cash Flow
Unit: Yuan
Items 2018 2017 YoY Increase/Decrease (%)
Subtotal of cash inflow
received from operation
activities
8,406,131,087.26 10,789,046,921.79 -22.09%
Subtotal of cash outflow
received from operation
activities
7,578,252,031.81 12,570,915,540.44 -39.72%
Net cash flow arising from
operating activities
827,879,055.45 -1,781,868,618.65 -146.46%
Subtotal of cash inflow
received from investing
activities
3,824,000.00 2,085,000.00 83.41%
Subtotal of cash outflow for
investment activities
195,480,772.24 1,022,993,256.12 -80.89%
Net cash flow arising from
investment activities
-191,656,772.24 -1,020,908,256.12 -81.23%
Subtotal cash inflow received
from financing activities
1,481,623,182.06 5,092,144,392.35 -70.90%
Subtotal cash outflow for
financing activities
2,638,553,654.50 2,564,264,123.49 2.90%
Net cash flow arising from
financing activities
-1,156,930,472.44 2,527,880,268.86 -145.77%
Net increase in cash and cash
-521,454,793.60 -296,482,731.93 75.88% Sino Great Wall Co., Ltd. 2018 Annual Report
29
equivalents
Notes to the year-on-year change of the relevant data
√Applicable □Not applicable
In 2018, the company encountered liquidity difficulties, the scale of its operations shrank, and the inflow and outflow of operating
funds decreased from the previous year; Affected by this, foreign investment has decreased significantly; Meanwhile, due to
environmental influences such as bank loan withdrawal and financial deleveraging, the Company has difficulty in financing, the cash
inflow from financing has been greatly reduced, and the net cash flow from financing activities has been negative
Notes 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
End of 2018 End of 2017 Proport
ion
increas
e/decre
ase
Notes to the significant change
Amount
Proportion
in the total
assets (%)
Amount
Proportion
in the total
assets (%)
Monetary funds
658,714,886.
48
6.86%
1,604,973,91
6.12
13.76% -6.90%
Mainly due to the deduction of
guarantee deposit on account of
guarantee claim
Account
receivable
4,202,594,25
8.24
43.76%
5,706,675,24
4.08
48.91% -5.15%
Mainly due to the decrease of
income during the report period
Inventory
717,531,578.
23
7.47%
556,839,325.
50
4.77% 2.70%
Long-term
Equity
Investment
106,837,810.
83
1.11% 0.00% 1.11%
Fixed assets
158,746,947.
91
1.65%
174,537,150.
56
1.50% 0.15%
Construction in
process
36,697,284.0
4
0.38% 4,968,590.96 0.04% 0.34%
Short-term
loans
2,862,584,62
9.01
29.81%
3,477,200,42
0.55
29.80% 0.01%
Long-term 120,000,000. 1.25% 843,092,471. 7.23% -5.98% Mainly due to the repayment and Sino Great Wall Co., Ltd. 2018 Annual Report
30
loans 00 02 decrease of loans during the report
period
2. Asset and Liabilities Measured by Fair Value
□Applicable √Not applicable
3. Restricted asset rights as of the end of this Reporting Period
Items Year-end book value Reason
Monetary funds
532,947,089.60 Margin and frozen funds
Account receivable
716,094,881.32 Pledge
Fixed asset 15,963,305.27 Financial lease assets
Total 1,265,005,276.19
V. Investment situation
1. General condition
√Applicable □Not applicable
182,993,849.80 840,948,723.77 78.24%
2. Condition of Acquiring Significant Share Right Investment during the Report Period
□Applicable √Not applicable
3. Situation of the Significant Non-equity Investment Undergoing in the Report Period
□Applicable √Not applicable
4. Investment of Financial Asset
(1) Securities investment
□Applicable √Not applicable
The Company had no securities investment in the reporting period.
(2) Investment in Derivatives
□Applicable √Not applicable
The Company had no investment in derivatives in the reporting period. Sino Great Wall Co., Ltd. 2018 Annual Report
31
5. Application of the raised capital
√Applicable □Not applicable
(1) General application of the raised funds
√Applicable □Not applicable
Unit: 10,000 Yuan
Year of
Raising
Way of
Raising
Total
raised
capital
Total
Amount
of the
Raised
Fund
Used at
the
Total
amount
of
Raised
Funds
Amount
of raised
capital
of which
the
purpose
was
changed
in the
report
period
Accumu
lative
amount
of raised
capital
of which
the
purpose
has been
changed
Proporti
on of
raised
capital
of which
the
purpose
has been
changed
(%)
Total
Amount
of the
Unused
Raised
Fund at
the
Current
Period
Use and
Whereab
outs of
the
Unused
Raised
Fund
Amount
of the
Raised
Fund
with
over 2
Years’
Idling
2015
Non-pub
lic
offering
25,500 0
11,739.8
5
0 0 0.00%
13,760.1
5
For
temporar
y
replenis
hment of
corporat
e
liquidity
0
合计 -- 25,500 0
11,739.8
5
0 0 0.00%
13,760.1
5
-- 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 Sino Great Wall Co., Ltd. 2018 Annual Report
32
was RMB 1,732,150.44, the expenditure for the handling charges of the special account for raised funds was RMB 1,043.92, and
the actual balance of the special account for raised funds was RMB 5,883.59.
(2) Promised projects of raised capital
√Applicable □Not applicable
Unit: 10,000 Yuan
Committed
investment projects
and investment
Project
change
d
(includi
ng
partial
change
)
Total
raised
capital
investe
d as
commit
ted
Total
invest
ment
after
adjust
ment
(1)
Amoun
t
investe
d in the
reporti
ng
period
Accum
ulated
amount
investe
d at the
end of
the
reporti
ng
period
(2)
Invest
ment
progres
s ended
the
reporti
ng
period
(%) (3)
=
(2)(1)
Date
when
the
project
has
reached
the
predict
ed
applica
ble
status
Benefit
realize
d in the
reporti
ng
period
Has the
predict
ed
result
be
realize
d
Has
any
materia
l
change
taken
place
in
feasibil
ity
Committed investment projects
1. Overseas
marketing network
construction project
Yes 10,000 10,000 10,000
100.00
%
Yes No
2.Informatization
Construction Phase
II
No 2,500 2,500 27.6 1.10% No Yes
3.Related taxes and
agency fees of this
transaction
No 13,000 13,000
1,712.2
5
13.17%
Not
applica
ble
Yes
Subtotal of
committed
investment projects
-- 25,500 25,500
11,739.
85
-- -- -- --
Investment orientation for und arising out of plan
Not applicable
Total -- 25,500 25,500 0
11,739.
85
-- -- 0 -- --
Situation about not
coming up to
schemed progress or
expected revenue
and the reason (in
1. Phase II Information Construction Project: The Sino Great Wall has changed from its core business of
decoration construction before listing to its core business of general contracting after listing. After that, it
has gradually transitioned its core business to engineering construction and investment and management
of medical and health industries. In recent years, the business model of listed companies has changed.
However, the phase II information construction project to be invested in at the initial stage of listing is Sino Great Wall Co., Ltd. 2018 Annual Report
33
specific project) no longer suitable for the current development status.
2. Taxes and intermediary expenses related to the transaction of raised funds: The company has
registered for filing the special tax treatment for enterprise restructuring at the Dapeng New District
Local Taxation Bureau on May 26, 2016. The type of special tax treatment for enterprise restructuring is
equity acquisition, and the filing number is SDSPB [2016] No.22. For this reorganization of the
company, special reorganization is selected in terms of tax. The part of the value of the company's placed
assets that is equivalent to the value of the placed assets is recognized according to the original book
value of the placed assets. Therefore, the transfer income of the relevant assets is not recognized for the
time being during this reorganization, and the income tax liability is not generated for the time being
during this reorganization. In the later period, in case of any income from asset transfer, the company
will fulfill its tax obligations in a timely manner in accordance with the provisions of the tax law. In
order to maximize the use efficiency of raised funds and reduce financial expenses, the company held the
fourth meeting of the eighth board of directors on January 26, 2019, and deliberated and passed the
Proposal on Termination of Some Funded Investment Projects and Use of Funds Raised for Temporary
Supplementary Working Capital for Permanent Supplementary Working Capital. The Company plans to
terminate the raised funds investment project "Phase II Informatization Construction Project" and "taxes
and intermediary fees related to the raised funds transaction" and use the remaining raised funds of RMB
137,601,537.35 (excluding interest) for permanent replenishment of working capital. On February 13,
2019, the above proposal was reviewed and approved by the company's first extraordinary shareholders'
meeting in 2019.
Notes to significant
change in feasibility
of the project
Please refer to the above-mentioned "circumstances and reasons for not achieving the planned schedule
or expected revenue".
Amount, application
and application
progress of the
unbooked proceeds
Not applicable
About the change of
the implementation
site of the projects
invested with the
proceeds
Applicable
Adjustment of the
implementation way
of investment funded
by raised capital
Not applicable
About the initial
investment in the
projects planned to
be invested with the
proceeds and the
replacement
Not applicable
Sino Great Wall Co., Ltd. 2018 Annual Report
34
Using the idle
proceeds to
supplement the
working capital on
temporary basis
Applicable
In order to maximize the use efficiency of the raised funds and reduce financial expenses, the Company
will, in consideration of the funds use plan for the projects invested by the raised funds, use RMB 120
million of idle raised funds to temporarily supplement the liquidity, with a term of such use no more than
12 months, From the date of approval by the board of directors of the company, the special account for
raised funds shall be returned in full upon maturity. The matter has been examined and approved by the
35th meeting of the seventh board of directors of the company, and the board of supervisors, independent
directors and recommendation agencies of the company have all expressed their opinions of agreement.
During its use, the company did not change the use of the raised funds in disguised form, did not affect
the normal operation of the investment plan of the raised funds, and did not carry out securities and other
risk investments. The company transferred out the raised capital of RMB 120,000,000.00 from August 1
in 2018. Due to a contract dispute in Bank of Ningbo, the Company's account number 23001892778 of
Bank of Shanghai Beijing Branch was deducted RMB 14,158,049.00 on August 8, 2018. Due to the
execution of (2018) W0928Z No.13610-251370, the company's account number 03002719068 was
deducted RMB 5,169,205.00 on October 25, 2018, resulting in the company's raised funds temporarily
supplementing the actual use amount of working capital by RMB 139,327,254.00, exceeding the amount
approved by the board of directors by RMB 327,254.00.
Balance of the
proceeds in process
of project
implementation and
the cause
Not applicable
About application
and status of the
proceeds unused
As of December 31, 2018, the unused raised funds are still in the raised funds account. The company
held the fourth meeting of the eighth board of directors on January 26, 2019, and deliberated and passed
the Proposal on Termination of Some Funded Investment Projects and Use of Funds Raised for
Temporary Supplementary Working Capital for Permanent Supplementary Working Capital. On
February 13, 2019, the above proposal was deliberated and passed by the company's first extraordinary
shareholders’ meeting in 2019. The unused fund raised by the company has permanently replenished the
working capital.
Problems existing in
application of the
proceeds and the
information
disclosure or other
issues
1. On March 6, 2019, the Company received the Decision on Taking Corrective Measures against Sino
Great Wall Co., Ltd. ([2019] No.11) from Shenzhen Supervision Bureau of China Securities Regulatory
Commission (hereinafter referred to as the "Decision on Correction"). The Decision on Correction raises
the following questions regarding the use of the company's raised funds: the Management System for the
Use of Raised Funds does not involve the accountability mechanism for the illegal use of raised funds,
and the provisions on the hierarchical examination and approval authority, decision-making procedures,
risk control measures, etc. for the use of raised funds are unclear, which do not conform to the provisions
of Article 3 of the Guidelines No.2 for the Supervision of Listed Companies - Regulatory
Requirements for the Management and Use of Raised Funds by Listed Companies. Currently, the
Company has fulfilled its obligations on the use of raised funds and information disclosure in accordance
with the Guidelines No.2 for the Supervision of Listed Companies - Regulatory Requirements for the
Management and Use of Raised Funds by Listed Companies, Measures for the Administration of
Information Disclosure by Listed Companies and Listing Rules of Shenzhen Stock Exchange. On March
18, 2019, the Company held the fifth meeting of the eighth board of directors and deliberated and passed Sino Great Wall Co., Ltd. 2018 Annual Report
35
the Proposal on revising the Management System of Raised Funds, improving the accountability
mechanism 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 of
Circulating Fund with Part of Idle Raised Funds and agreed to temporarily replenish the working capital
with 139 million yuan of raised funds. 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) W0828Z 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. In view
of the resolution of the Company’s first extraordinary shareholders' meeting on February 13, 2019 to
consider and pass 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 will no longer return the above-mentioned part of raised funds exceeding the amount
approved by the Board of Directors to the special account for raised funds.
(3) Changes of raised funds projects
□Applicable √Not applicable
The 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 applicable
The Company had no sales of major assets in the reporting period.
2. Sales of major equity
√Applicable □Not applicable
Count
er
party
Sold
equiti
es
Sold
date
Trans
action
price
(Ten
thous
and
yuan)
Net
profit
s
contri
bute
ted by
the
equiti
es to
the
listed
Influe
nce of
the
sellin
g of
the
Comp
any
Propo
rtion
on on
of the
net
profit
s of
the
contri
bute
ted
Pricin
g
princi
ples
of the
equiti
es
sellin
g
Whet
her
was
the
relate
d
transa
ction
Relati
onshi
p with
the
center
party
Whet
her
the
involv
e d
equiti
es all
compl
eted
the
owner
Whet
her
execu
te as
sched
ule ed
and if
failed,
shoul
d state
the
Discl
osure
date
Discl
osure
index Sino Great Wall Co., Ltd. 2018 Annual Report
36
comp
anies
from
the
period
-
begin
to the
sold
date
(Ten
thous
and
yuan)
amou
nt of
the
equiti
es
sellin
g to
the
listed
comp
anies
to the
total
amo9
un t
of the
net
profit
s
ship
transf
er
reaso
ns and
the
adopt
ed
measu
rment
s of
the
comp
any
Sino
Great
Wall
Const
ructio
nal
Engin
eering
Co.,
Ltd.
60%
Dece
mber
6,
2018
9,000
-3,681
.44
The
sale
of the
comp
any
gener
ated a
return
on
invest
ment
of
RMB
15.11
millio
n
-0.88
%
fair
value
No
fair
value
Yes Yes
VII. Analysis of the Main Share Holding Companies and Share Participating Companies
√Applicable □Not applicable
Situation of Main Subsidiaries and the Joint-stock Company with over 10% net profit influencing to the Company
Unit: Yuan
Company
Name
Company
type
Sectors
engaged in
Registered
capital
Total
assets
Net assets Turnover
Operating
profit
Net Profit Sino Great Wall Co., Ltd. 2018 Annual Report
37
Sino Great
Wall
Internation
al
Engineerin
g Co., Ltd.
Subsidiaries
General
contracting
,
subcontrac
ting,
engineerin
g survey
and design;
profession
al
contracting
;
architectur
al
decoration
engineerin
g;
architectur
al curtain
wall;
project and
technology
study and
experiment
al
developme
nt; sell
building
material,
machinery,
hardware,
plastic
articles;
technology
developme
nt,
technology
consultatio
n,
technology
service;
goods
import and
export;
1,000,000,
000
8,591,829,
570.83
880,871,99
8.00
2,330,186,
998.92
-916,877,2
04.86
-1,183,696,
469.41 Sino Great Wall Co., Ltd. 2018 Annual Report
38
technology
import and
export;
agent
import and
export.
Acquirement and disposal of subsidiaries in the Reporting period
√Applicable □Not applicable
Name Mode Influence
Sino Great Wall (Beijing) Investment
Fund Management Co., Ltd.
Transfer
Sino Great Wall Zhihui Building
Industry (Zhanjiang) Co., Ltd.
Transfer
Sino Great Wall Jianjie Engineering Co.,
Ltd.
Transfer
Guangzhou Heebeina Interior design
Co., Ltd.
Transfer
Shenzhen Yatian Decorative Design
Engineering Co., Ltd.
Transfer
Note
Sino Great wall International Construction Co., Ltd. is a subsidiary of the company and is the main of income and profits of the
company, which accounts for more than 90% of all the company’s operating income and net profit and the rest subsidiaries account
for 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-off
society to achieve its first 100-year goal. The 2019 Government Work Report emphasizes that the central government will launch a
new round of comprehensive reform and opening-up and the second round of structural reforms in supply-side economics to further
stabilize employment, finance, foreign trade, foreign investment, investment and expectations, boost market confidence, and maintain
sustained and healthy economic development and overall social stability. In 2019, China will promote all-round opening to the
outside 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 and
social life. During the “The thirteenth Five-Year Plan” period, China's economic development has entered a new normal. The
economic 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 Sino Great Wall Co., Ltd. 2018 Annual Report
39
plays a better role as the core. New urbanization, coordinated development of Beijing, Tianjin and Hebei, the development of the
Yangtze River economic belt and the construction of "the Belt and Road" form an important driving force and valuable opportunity
for the future development of the construction industry. According to the latest research report on the development prospects of the
industry, in the medium and long term, with the continuous improvement of people’s requirements for quality of life and supporting
facilities, 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 unfavorable
development trend of the construction industry market will be effectively alleviated, which will definitely have a positive impact on
the 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 the
Party Constitution. Since 2017, the construction of “the Belt and Road” has entered a golden period of development, and the
economic exchanges and cooperation between China and the countries along the “the Belt and Road” will be closer. According to the
latest report of the Asian Development Bank, from 2016 to 2030, the demand for infrastructure in the Asian region is expected to
exceed USD 22.6 trillion, with an average annual demand of more than USD 1.5 trillion. The market of countries along the "the Belt
and 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, other
countries will continue to invest in infrastructure, and infrastructure development will continue to rise steadily. As a well-known
international engineering construction contractor, the company, relying on its rich construction experience and market image, will
earnestly seize the historic development opportunities in the overseas engineering contract market, carry out in-depth research and
project exploration in countries and regions with existing investment layout, and meanwhile continue to develop the overseas
business platform by using various advantageous resources, fully explore the “the Belt and Road” market, actively promote the
sustainable development of overseas business, further increase the proportion of overseas market performance in the company’s
overall performance, and strengthen the brand and status of private enterprise pioneer for "the belt and road initiative" of Sino Great
Wall.
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’s
Republic of China pointed out that by 2020, 500 county hospitals (including some impoverished county and county hospitals) and
county Chinese medicine hospitals will reach “third-level hospitals” and The service capacity requirements of “three-level Chinese
medicine hospitals” strive to make 90% of county hospitals and county hospitals in China meet the basic standards for medical
service capacity of county hospitals and county hospitals. County-level hospitals officially entered the stage of explosive
comprehensive construction, and China's medical engineering will usher in a golden period of development. During the reporting
period, 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, the
international 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 rehabilitation
complex with complete functions and facilities. Meanwhile, combining with the company's resource advantages, through the
construction of medical real estate and supporting medical treatment and health care engineering, a medical treatment and health care
development model with the company's characteristics in combination of medical treatment and health care and centered by medical
treatment 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 the
Belt and Road Initiative, and the other is to enhance the domestic medical investment. At present, the company has possessed
abundant projects in Southeast Asia, South Asia, the Middle East and Africa. In the field of medical and health care, apart from
investing in the construction of health care engineering, it will further choose to purchase mature hospitals and introduce foreign Sino Great Wall Co., Ltd. 2018 Annual Report
40
advanced proton therapy technologies and leading medical services. The company will give full play to the advantages of listed
companies in financing, engineering construction coordination, investment decision-making, medical expert resources and modern
corporate governance, gather medical experts from Beijing and Shanghai and hospital management experts, and strive to build a
hospital 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 “developing
the health-care industry”, in the future, the company will devote major efforts to developing abroad business and arranging the
medical industry so as to enhance its capacity for core competitiveness and profit constantly and eventually strive to build itself into a
prominent 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's
business organization and business structure will be adjusted upon the review of the company's board of directors; The company's
staffing will be re-combed, the salary and performance appraisal system will be formulated according to company management
structure and business model to reduce the personnel cost effectively, and control various expenses reasonably for more scientific and
efficient 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 improve
its fine management level. According to the Shenzhen Securities Regulatory Bureau's decision to order the company to make
corrections, the company will fully supervise the implementation of the rectification measures in accordance with the contents of the
rectification report, make reasonable plans for the overall financial situation of the company, continue to consolidate the basic work
of financial accounting, form a stable financial control system, reduce management costs and financial risks, and well ensure the
safeguarding 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 key
assessment index, set up a special "debt collection decision leading group", formulate a corresponding debt collection incentive
system, and link the collection of overdue accounts receivable with individual performance assessment. If necessary, legal
proceedings and assigned responsible persons will be used to strengthen the collection of overdue accounts receivable, and the
collection of accounts receivable will be implemented as a key special management work to effectively improve the company's asset
quality. Meanwhile, investment and financing capability is an important prerequisite for the medium and long-term stable
development of the enterprise. The company will resolve the existing on-balance-sheet litigation as soon as possible, enhance the
confidence of external financial institutions, actively adjust the loan structure, reduce the financing cost, realize the dynamic balance
of funds, promote the investment and financing activities on the right track, In addition, the company actively communicated and
sought solutions for current debt overdue, litigation and arbitration matters, and did not rule out the use of judicial restructuring and
debt 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 exchanges
and cooperation with the governments of countries and regions along the "the Belt and Road", fully seize the construction project
opportunities 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 meet
the relevant requirements of the company for professional business and fine management. Meanwhile, it will take root in the existing
business areas, moderately expand the volume of professional engineering, and actively expand the industrial energy construction
market in the advantageous market areas. Sino Great Wall Co., Ltd. 2018 Annual Report
41
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 Zhanjiang
City, 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 follow
the good policy of China to vigorously build the beautiful countryside, actively promote the construction of a new socialist
countryside, and strive to open a smart housing rural sector operation center in Xiong'an New Area in 2019, so as to build
high-quality village houses for farmers; In addition, in combination with the company's advantageous resources in the health care
sector and relying on the construction of health care facilities, the sales, operation and service of health care apartments, the company
actively 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 Zhanjiang
City, Guangdong Province, to ensure that the trials will be completed and put into production during the year. At the same time, the
company will accelerate the expansion of the smart housing sector in the domestic real estate industry, closely following the country's
efforts to build beautiful villages. Policies, actively promote the construction of a new socialist countryside, and strive to open a
smart housing rural sector operation center in Xiong'an New District in 2019 to build high-quality village houses for the majority of
farmers; in addition, combined with the superior resources of the company's Kangyang plate, relying on Kang The construction of
facilities, the sales, operation and service of Kangyang Apartment will actively create a new pattern of transformation and upgrading
of the company.
(4) Main Risks faced by the Company and Solutions
1. Macro economy and policy-related influences
The company belongs to the construction industry. The change of economic cycle is closely related to the development of
construction industry, and factors such as the operation of national economy and the development of urbanization process will
directly affect the construction industry. The company's main business is in a fully competitive market with low industry barriers and
fierce competition. The company is in a period of rapid development, and the rapid development and expansion of domestic and
foreign 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. Make
timely adjustment for operating strategy and marketing policy and make pre-arranged planning which copes with market changes to
guarantee 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 in
Europe, America, Japan and South Korea are increasingly common, which can increasingly strength the aspects including the
technology, financing and management; on the other hand, more domestic enterprises have participated in the international market
competition of construction & engineering, intensified the overseas construction market competition. In the domestic market, with
the continuous rise of the attractiveness of medical engineering projects, many companies have participated in the construction of
medical 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 from
the past, improve the capacity of management and control for the Company’s own projects to constantly heighten the Company’s
core 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 the
company'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 the
management system, continue to strengthen the information management, and form big data precipitation and analysis of various Sino Great Wall Co., Ltd. 2018 Annual Report
42
data in the operation process through advanced technical means, so as to promote the improvement of management efficiency and
widen 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 of
project 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 and
delivered 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 of
purchasing price of construction materials. The bulk materials used by the company mainly include concrete and steel. Due to the
long construction period in construction projects, the price increase of these bulk materials will directly lead to the increase of
construction costs, resulting in the difference between the actual construction costs and the project budget, affecting the company's
operating 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 potential
economic risks, exchange rate risks, political risks and other risks in the process of overseas business operation. In case of major
fluctuations or economic crises in the economic development of the countries or regions where the company's overseas target markets
are 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 innovation
according to the professional development ideas, seek expansion of business areas and construction qualifications, improve operation
quality and benefits, create green and high-quality projects, realize multi-field professional construction operations and enterprise
development, 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 accounts
receivable, and the high proportion of net accounts receivable to total assets is due to the characteristics of the industry. With the
expansion of the company's business scale, the balance of the company's accounts receivable is generally on the increase, and the
proportion of net accounts receivable to total assets is expected to remain at a relatively high level. The failure to recover the
company's accounts receivable in time will affect the company's capital turnover rate and cash flow from operating activities, thus
adversely affecting the company's production, operation and performance level.
Solutions ： Strengthen fund management, rationally allocate fund structure, and establish assessment mechanism for project fund
recovery 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 information
disclosure media. As the overdue debts of the company and its subsidiaries are not paid off and the company is under investigation by
the CSRC, the company has been sued by some creditors and some of its bank accounts and company's assets have been frozen. The
overdue debts of the company may be subject to payment of relevant liquidated damages, late fees and penalty interests, increasing
the company's financial expenses, thus affecting the company's production and business operation, possibly weakening the
confidence of other creditors in the company, thus aggravating the company's financial tension and adversely affecting the company's
operation.
Solutions ： The Company will continue to pay attention to the follow-up progress, fulfill its information disclosure obligations in
a timely manner in accordance with relevant regulations, strengthen the management of litigation-related matters, and employ
professional lawyers to actively respond to lawsuits so as to protect the legitimate rights and interests of the company. The company Sino Great Wall Co., Ltd. 2018 Annual Report
43
is making every effort to raise debt service funds and properly handle the debt crisis. Does not rule out future borrowing judicial
restructuring, 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 illegal
information disclosure. According to the relevant provisions of the Shenzhen Stock Exchange Listing Rules (Revised in November
2018), if the company is involved in the illegal material information disclosure and under other forced delisting situations stipulated
in Article 13.2.1, the company's shares will be subject to the delisting risk warning. The company's shares will be suspended on the
next trading day after the expiration of the 30-trading-day period in the delisting risk warning until the Shenzhen Stock Exchange
makes a decision on whether to suspend the listing of the company's shares within 15 trading days after the suspension. If the
investigation items that the company is involved in are not found to have any major illegal acts by the CSRC, the company's shares
will not be at risk of suspension.
Solutions ：The Company will actively cooperate with the CSRC to carry out investigations, and perform its information
disclosure obligations according to the relevant provisions of the Shenzhen Stock Exchange Listing Rules and disclose risk alert
announcements at least once a month.
X. About researches, visits and interviews received in this reporting period
1 、Records about researches, visits and interviews received in the reporting period
√ Applicable □ Not applicable
Reception time Way of reception Types of visitors Basic index
March 8,2018 Onsite investigation Organization The interactive relation with the
investors on Shenzhen Stock
Exchange platform about Sino Great
Wall International Engineering Co.,
Ltd: Record of the investors relations
activities on March 8, 2018.
Reception times 1
Reception agency amount 3
Reception personal number 0
Others 0
Whether to disclose, reveal or disclose
non-public material information
No Sino Great Wall Co., Ltd. 2018 Annual Report
44
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 policy
during the reporting period
√Applicable □Not applicable
During the reporting period, the formulation and implementation of the company's cash dividend policy comply with the
provisions of the Articles of Association and the requirements of the resolutions of the shareholders' meeting. The dividend standard
and proportion are explicit and clear. Relevant decision-making procedures and mechanisms are complete. Independent directors
fulfill their duties and play their due roles. The shareholders' meeting and the daily investor reception work provide small and
medium shareholders with the opportunity to fully express their opinions and demands, and the legitimate rights and interests of
small and medium shareholders are fully protected.
Special cash dividend policy description
Whether meets the requirements of the provisions of the
articles of association or shareholders' meeting resolutions:
Yes
Whether dividends standard and proportion are clear Yes
Whether decision making and supervision mechanism for
profit distribution are completed
Yes
Whether independent directors perform their duties
responsibly and play its due role:
Yes
Whether the Minority shareholders have adequate opportunity
to express their views and aspirations and Their legitimate
rights and interests have been fully protected
Yes
Whether the Cash dividend policy to adjust or change the
conditions and procedures are compliant and transparent
Not applicable
The profit distribution preplan or proposal and the preplan or proposal of conversion of the capital reserve into share capital in the
past three years (with the reporting period inclusive):
1. Profit distribution plan for 2016
the 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 remaining
un-allocated profit will be carried over to the next year. The 2016 profit distribution plan has been approved and implemented at the
2016 shareholders' meeting of the company.
2. Profit distribution plan for 2017
On April 23,2018 ，The 32nd meeting of the 7th board of directors of the company deliberated and approved the 2017 profit
distribution plan. The Company distributed cash dividends of RMB 0.40 (including tax) for every 10 shares based on the existing
1,698,245,011 shares. With a total distribution of RMB 67,929,800.44. No bonus shares were given, and no capital reserves were
conversed. The remaining un-allocated profit will be carried over to the next year. The 2017 profit distribution plan has been
approved and implemented at the 2017 shareholders' meeting of the company. Sino Great Wall Co., Ltd. 2018 Annual Report
45
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 profit
distribution plan. No cash dividend, no bonus shares, no capital reserve converted into share capital. The above profit distribution
plan shall be examined and approved by the company's 2018 annual shareholders' meeting. On April 28, 2019, the 7th session of the
8th Board of Directors of the company
Dividend distribution of the latest three years
Unit: Yuan
Year
Amount for
cash bonus
(tax
included)
Net profit
attributable
to the over of
the parent
company in
the
consolidated
financial
statements
Ratio in net
profit
attributable
to the parent
company in
the
consolidated
financial
statements
Amount of
cash
dividends
from cash
offer to
repurchase
shares of the
funds
Proportion of
cash
dividends
from cash
offer to
repurchase
shares of the
funds
Amount for
cash bonus
(tax
included)
Ratio of the
total cash
bonus (other
ways
included) in
net profit
attributable
to common
stock
shareholders
of listed
company
contained in
consolidation
statement
2018 0.00
-1,704,739,7
36.40
0.00% 0.00 0.00% 0.00 0.00%
2017
67,929,800.4
4
380,090,990.
82
17.87% 0.00 0.00%
67,929,800.4
4
17.87%
2016
101,894,700.
66
473,661,862.
67
21.51% 0.00 0.00%
101,894,700.
66
21.51%
In the reporting period, both the Company’s profit and the parent company’s retained earnings were positive however not cash
dividend distribution proposal has been put forward.
□Applicable √Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□Applicable √Not applicable
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either. Sino Great Wall Co., Ltd. 2018 Annual Report
46
III. Commitments to fulfill the situation
1.The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the
reporting period made by the company, shareholder, actual controller, acquirer, director, supervisor,
senior management personnel and other related parties.
√ Applicable □ Not applicable
Commitment
Commitmen
t maker
Type Contents
Time of
making
commitment
Period of
commitmen
t
Fulfillment
Commitment on share reform No No No No No
Commitment in the acquisition
report or the report on equity
changes
No No No No No
Commitments in assets
reorganization
Chen Lue,
He Feiyan
Stock lock
Shares
acquired by
purchases of
assets
through
issuing
shares: “I
will not
transfer the
new shares
of Victor
Onward
Holdings
acquired
through this
restructurin
g, including
but not
limited to
the public
transfer
through the
stock
market or
by
agreement,
and I will
not entrust
anybody
March
19,2015
36 months
Fully
completed
(shares
acquired
by Chen
Lue and
He Feiyan
from
issuing
shares to
purchase
assets
have been
released
from
restriction
on sale)
Please refer
to the
detailed
conted
published
on juchao
information
website
（www.cni
nfo.com.cn
）on
October Sino Great Wall Co., Ltd. 2018 Annual Report
47
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
compensatio
n under this
restructurin
g(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
restructurin
g
23,
2018(Anno
uncement
No.:2018-1
23） Sino Great Wall Co., Ltd. 2018 Annual Report
48
transaction
has been
completed,
or the final
closing
price were
lower than
this issue
price 6
months after
the
transaction
has been
completed,
the lock-up
periods of
my shares
of Victor
Onward
Holdings
are
automaticall
y prolonged
for 6
months.
(The
above-menti
oned issue
price will be
calculated
according to
the price
after the
adjustment
of
ex-dividend,
etc. if
ex-dividend
behaviors of
the
company,
including
distribution
of Sino Great Wall Co., Ltd. 2018 Annual Report
49
dividends,
giving
bonus,
conversion
of share
capital,
rationing
shares, and
etc., were
happened
during the
above-menti
oned
periods. If
the
restructurin
g
transaction
were March
19,2015 36
months
Strict
performing
Shenzhen
Victor
Onward
Textile
Industrial
Co., Ltd.
The Third
Quarterly
Report
2015. 14
investigated
by judicial
authorities
or China
Securities
Regulatory
Commissio
n due to
false record,
misleading
statement or Sino Great Wall Co., Ltd. 2018 Annual Report
50
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-menti
oned
lock-up
periods, I
will sell or
transfer the
new shares
of the
company
acquired
from this
restructurin
g following
relevant
regulations
of China
Securities
Regulatory
commission
and
Shenzhen
Stock
Exchange.
Chen Lue Stock lock
Shares
acquired by
matching
funds
raised: “I
March 19,
2015
36 months
Strict
performin
g Sino Great Wall Co., Ltd. 2018 Annual Report
51
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
requirement
s for
lock-up
periods, it
should be
executed
accordingly.
Chen Lue
No capital
occupation
Up to the
issue day of
the letter, I
and other
corporations
controlled
by me
haven’t
March
19,2015
Long-term
Strict
performin
g Sino Great Wall Co., Ltd. 2018 Annual Report
52
possessed
funds of
Sino Great
Wall; After
the
transaction
is
completed, I
and other
companies
controlled
by me (if
any), except
for listed
companies
and their
holding
subsidiaries,
will not
possess the
funds of
listed
companies
or Sino
Great Wall
by any way,
including
cash in
advance,
other
expenses,
direct or
indirect
loans,
assumption,
etc. and try
our best to
avoid fund
intercourse
with listed
companies
or Sino
Great Wall,
which has Sino Great Wall Co., Ltd. 2018 Annual Report
53
nothing to
do with
normal
operations.
If Sino
Great Wall
got
penalized
by
government
administrati
on
departments
due to the
money
lending
which was
happened
before the
transaction,
I will bear
the total
compensatio
n for the
company’s
loss
resulting
from it by
cash in
order to
guarantee
Sino Great
Wall won’t
suffer any
loss.
Meanwhile,
I will
actively
urge Sino
Great Wall
to establish
complete
inner
control Sino Great Wall Co., Ltd. 2018 Annual Report
54
system and
funds
managemen
t system
within
lawful
authority.
Chen Lue
Cash
compensatio
n
In view of
the fact that
the houses
rented by
Sino Great
Wall and it’s
son
subsidiaries,
subsidiaries,
haven’t
rental
registration,
I promise, if
Sino Great
Wall and its
son
subsidiaries,
subsidiaries,
were
penalized
by real
estate
managemen
t department
or suffered
other losses
resulting
from it, I
agree to
compensate
the loss of
the
company by
cash.
March
19,2015
Long-term
Strict
performin
g
Chen Lue
Cash
compensatio
During the
reporting
period, the
March
19,2015
Long-term
Strict
performin Sino Great Wall Co., Ltd. 2018 Annual Report
55
n project
which Sino
Great Wall
is involved
in is the
decoration
engineering
construction
project of
Libo Grand
Hotel
(hereinafter
referred to
as “Libo
project”)
which the
company
contracted
before the
bidding
process.
Sino Great
Wall is not
involved in
any other
projects
except for
Libo project
before
bidding
process. As
to the
violating
issues
existed in
the Libo
project, I
promise as
follows: if
Sino Great
Wall got
penalized
by
government
g Sino Great Wall Co., Ltd. 2018 Annual Report
56
administrati
on
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
implementat
ion of
bidding
process, i.e.,
at the time
for
construction
again.
Chen Lue
Cash
compensatio
n
“1. Up to
October
13th,2014,
the related
expenses of
March 19,
2015
Long-term
It has been
fulfilled (on
May 21,
2018, Chen
Lue paid Sino Great Wall Co., Ltd. 2018 Annual Report
57
the
litigation
and
arbitration
cases,
including
the actual
price,
compensatio
n, penalty,
ligation
costs, etc.
which the
parent-subsi
diary
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
5,601,460.2
1 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
Announcem
ent on the
Payment of
Cash by the
Controlling
Shareholder
and the
Actual
Controller
to the
Company to
Fulfill the
Commitme
nt published
by the
company on
the website
of Juchao
Information
(cninfo.com
.cn ) on
May 22,
2018.) Sino Great Wall Co., Ltd. 2018 Annual Report
58
2014, I
promise to
bear the
balance by
cash
uncondition
ally so as to
guarantee
the
parent-subsi
diaries of
Sino Great
Wall won’t
suffer any
loss. 2. This
commitment
letter is
irrevocable.
Chen Lue
Cash
compensatio
n
1. On
condition
that
ownership
defect exists
in the lease
of house
property of
parent-subsi
diary
companies
of Sino
Great Wall
and its
subsidiary
corporation,
which
resulted in
inability for
parent-subsi
diary
companies
of Sino
Great Wall
and its
subsidiary
March
19,2015
Long-term
Strict
performin
g Sino Great Wall Co., Ltd. 2018 Annual Report
59
corporation
to continue
leasing this
house
property but
having to
relocate, or
parent-subsi
diary
companies
of Sino
Great Wall
and its
subsidiary
corporation
can’t timely
find suitable
workplace
for lawful
operation in
related area,
I will
undertake to
compensate
by cash for
parent-subsi
diary
companies
of Sino
Great Wall’s
losses
which are
caused by
operation
and finance
due to the
above-menti
oned
matters. 2. I
undertake to
uncondition
ally bear the
relevant
fines by Sino Great Wall Co., Ltd. 2018 Annual Report
60
cash for
parent-subsi
diary
companies
of Sino
Great Wall
on condition
that the
rental house
property of
parent-subsi
diary
companies
of Sino
Great Wall
and its
subsidiary
corporation
is in
absence of
handling
procedures
for filing
house
leasing ,whi
ch resulted
in that
parent-subsi
diary
companies
of Sino
Great Wall
and its
subsidiary
corporation
are fined by
property
administrati
ve
department.
3.The
commitment
letter is
irrevocable. Sino Great Wall Co., Ltd. 2018 Annual Report
61
Chen Lue
Cash
compensatio
n
“In
condition
that
parent-subsi
diary
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
supplementa
ry payment,
to be
punished
and
resourced, I
will bear by
full-amount
cash for the
fee of
supplementa
l payment
March 19,
2015
Long-term
Strict
performin
g Sino Great Wall Co., Ltd. 2018 Annual Report
62
and the
expense and
fee for
being
punished or
resourced,
which is to
guarantee
Sino Great
Wall and its
subsidiary
to avoid
suffering
from any
loss ”.
Chen Lue
Cash
compensatio
n
“At present,
Suzhou
Lvbang has
possessed
one
state-own
land use
right, of
which the
land
certificate is
Suzhou Guo
Yong(2014)
No.Y20140
86”, locates
in Danan
Village,
Dadian
Town,
Yongqiao
District,
Suzhou City
with 32,966
square
meters of
area and the
purpose for
industry.
Suzhou
March
19,2015
Long-term
Strict
performin
g Sino Great Wall Co., Ltd. 2018 Annual Report
63
Lvbang
possesses its
own factory
with
9,843.87
square
meters of
area
above-menti
oned, which
is the
building
reserved on
the former
selling land.
Suzhou
Lvbang is
carrying out
refurnishing
and
reconstructi
on for this
factory and
has acquired
“License of
Constructio
n Land
Planning ”w
ith
No.2014-08
-001
approved
and issued
by
Yongqiao
District,
Suzhou
City’s
housing and
rural
construction
bureau, of
which other
examination Sino Great Wall Co., Ltd. 2018 Annual Report
64
and
approval
procedures
of
construction
are in the
process of
handling “I
undertake to
actively
supervise
and urge
Suzhou
Lvbang on
handling
procedures
of the
approval
process
involved
with factor
refurnishing
and
reconstructi
on, and
which is
suffered
from
administrati
ve
punishment
by relevant
competent
authorities
in reason of
claiming
certificate
of title, or in
which any
dispute or
controversy
exist in
construction
and Sino Great Wall Co., Ltd. 2018 Annual Report
65
ownership,
which shall
be my
responsibilit
y to carry
out solution,
and I
undertake to
compensate
by cash for
Suzhou
Lvbang’s
losses
which are
due to this
matter,
guaranteein
g no losses
occur to
Sino Great
Wall and
Suzhou
Lvbang for
this matter.
Chen Lue
Cash
compensatio
n
“According
to the
“Agreement
of
Significant
Asset
Replacemen
t and Issue
of Share to
Buy
Asset”(herei
nafter
referred to
as
“Agreement
”) signed
among
Victor
Onward
Holdings,
March 19,
2015
Long-term
Strict
performin
g Sino Great Wall Co., Ltd. 2018 Annual Report
66
all
shareholders
of Sino
Great Wall
and Union
Developme
nt Group
Co., Ltd
(hereinafter
referred to
as“ Union
Group”) on
October 13,
2014, all the
creditor’s
rights and
liabilities
related to
place-out
asset before
the delivery
date of
Victor
Onward
Holdings
shall be
Union
Group’s
responsibilit
y to carry
out solution;
After the
asset
delivery
date, if any
losses occur
to Victor
Onward
Holdings in
reason of
the liability
transfer of
asset
delivery, Sino Great Wall Co., Ltd. 2018 Annual Report
67
personnel
placement,
unsettled
dispute or
controversy
and other
compensatio
n related to
place-out
asset,
payment
obligation
and
punishment,
Union
Group or
the
specified
third party
shall
sufficiently
compensate
all losses for
Victor
Onward
Holdings
for the
above
matters. I
undertake, if
Union
Group and
the
specified
third party
refuse to
compensate
the losses
caused by
the above
mentioned
matters for
Victor
Onward Sino Great Wall Co., Ltd. 2018 Annual Report
68
Holdings
according to
the“ Agree
ment”, I
will
compensate
by cash for
the Victor
Onward
Company
within 5
working day
in advance.
Meanwhile,
I will
reserve the
resource
rights for
Union
Group and
the
specified
third party
“.
Chen Lue,
He Feiyan
Performanc
e
commitment
According
to“ Agreem
ent of
Shenzhen
Victor
Onward
Textile
Industrial
Co., Ltd.,
Chen Lue
and He
Feiyan
Concerning
on
Performanc
e
Compensati
on” and its
supplementa
l
May
11,2015
Long-term Completed Sino Great Wall Co., Ltd. 2018 Annual Report
69
agreement ,
Chen Lue’s
promised
Sino Great
Wall that
the net
profit
deducted by
incidental
losses and
attributable
to the parent
companies’
owners after
audition of
2015, 2016
and 2017
shall be
respectively
more than
RMB 345.8
million,
RMB 438.5
million and
RMB 538.2
million. If
the net
profit of
Sino Great
Wall is less
than the
promised
net profit
mentioned
above ,
Chen Lue
and He
Feiyan will
compensate
for listed
company in
accordance
with
“Performan Sino Great Wall Co., Ltd. 2018 Annual Report
70
ce
Compensati
on
Agreement”
and its
supplementa
l agreement
Chen Lue;
He Feiyan
Independent
competition
1. This
reorganizati
on 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.
Independen
ce exists in
both staff,
asset,
finance,
institution
and
business
and no
confusion
exists. 2. I
undertake,
September
30,2015
Long-term
Strict
performin
g Sino Great Wall Co., Ltd. 2018 Annual Report
71
after this
reorganizati
on, to
ensure the
continued
complete
separation
between me
or other
enterprises
under my
possession(i
f any) and
the listed
company in
staff, asset,
finance,
institution
and
business,
sustaining
the
independenc
e in the
listed
company’s
staff, asset,
finance,
institution
and
business, as
follows:
(1).The
Ensurance
of
Independen
ce for Listed
Company’s
Personnel
Ensure that
the general
manager,
the
vice-general Sino Great Wall Co., Ltd. 2018 Annual Report
72
manger, the
chief
financial
officer, the
board
secretary
and the
senior
executives
of the
Company
only accept
salary in
listed
company,
including no
holding of
any post
except
director and
supervisor
in my
enterprise or
other
enterprises
under my
possession.
2.Ensure the
complete
independenc
e exists
among the
listed
company’s
labor,
personnel,
and salary
managemen
t and me. 3.
The
director,
supervisor,
general
manager Sino Great Wall Co., Ltd. 2018 Annual Report
73
and other
senior
executives
recommend
ed by me
have all
been
through the
legal
procedures,
and I will
not
intervene
the
company’s
board and
the
shareholder’
s decision
for
appointing
and
dismissing
personnel
by
exercising
official
power.
(2)The
Insurance of
the Asset
Independen
ce of Listed
Company
1.Ensure
that the
listed
company
possesses
business
system
related to
operation
and the Sino Great Wall Co., Ltd. 2018 Annual Report
74
relevant
completely-i
ndependent
asset.
2.Ensure
that no
occupation
of mine
exists in
capitals and
assets of the
listed
company.
3.The
Insurance of
the
Financial
Independen
ce of Listed
Company
1.Ensure
that the
independent
finance
department
and the
independent
financial
calculating
system set
up by the
listed
company,
which
possess
normative
and
independent
financial
and
accounting
rules. 2.
Ensure that
the listed Sino Great Wall Co., Ltd. 2018 Annual Report
75
company
independent
ly opens a
bank
account, not
sharing the
same bank
account
with me.
3.Ensure
that the
financial
staff of the
listed
company
holds no
part-time
post in my
enterprise
and other
enterprises
under my
possession.
4. Ensure
that the
listed
company
pays taxes
according to
law. 5.
Ensure that
the listed
company
makes the
financial
decision-ma
king
independent
ly, I will not
intervene
the
utilization
of the listed
company’s Sino Great Wall Co., Ltd. 2018 Annual Report
76
capital.
(4)The
Insurance of
the
Institutional
Independen
ce of Listed
Company
1.Ensure
that the
listed
company
sets up
perfect
governance
structure for
the share
company’s
legal
person,
which
possesses
independent
and
complete
institutional
framework
2.Ensure
that the
shareholder’
s meeting,
the board of
director, the
independent
director, the
supervisor
and the
general
managers
exercise
official
powers
according to
laws, Sino Great Wall Co., Ltd. 2018 Annual Report
77
regulations
and articles
of
incorporatio
n (5)The
Insurance of
the Business
Independen
ce of Listed
Company 1.
Ensure that
the listed
company
possesses
the asset,
staff,
qualification
and ability
for
independent
ly holding
business
activities,
which
possesses
the
independent
,
autonomous
and sustain
operation
ability
catering to
the market.
2. Ensure
that I will
not
intervene
the listed
company’s
business
activities
except
exercising Sino Great Wall Co., Ltd. 2018 Annual Report
78
shareholder’
s rights.
3.Ensure
that I or
other
enterprises
under my
possession
will avoid
working on
the listed
company’s
main
business
which
possesses
substantial
competition.
4. Ensure to
reduce the
related
transaction
between me
and the
listed
company or
between
other
enterprises
under my
possession
and the
listed
company as
much as
possible;
When
confirming
necessary
but
unavoidable
related
transaction,
I will ensure Sino Great Wall Co., Ltd. 2018 Annual Report
79
the fair
operation
according to
the principle
of market
culture and
the fair
price, and
fulfill the
transaction
procedures
and the
obligation
of
disclosing
information
according to
relevant
laws and
regulations
and
normative
document.
Chen Lue;
He Feiya
Related
transactions
“1.Before
this
reorganizati
on, the
fairness and
reasonablen
ess of
pricing and
the
legitimacy
and
effectivenes
s of
decision-ma
king
procedure
exist in the
transaction(i
f any)
between me
or the
March 19,
2015
Long term Strict perfo
rming Sino Great Wall Co., Ltd. 2018 Annual Report
80
enterprise
under my
possession(i
f any) and
Sino Great
Wall which
is planned
to place
asset in, no
related
transaction
with
obvious
unfairness
exists ;
2.After this
reorganizati
on, I or the
enterprise
under my
possession
will avoid
and reduce
the related
transaction
with listed
company as
much as
possible. As
for any
unavoidable
or
reasonable
related
transaction,
I or the
enterprise
under my
possession
will sign the
agreement
according to
laws and
fulfill the Sino Great Wall Co., Ltd. 2018 Annual Report
81
lawful
procedure,
and fulfill
relevant
approval
procedure
for internal
decision-ma
king and
timely
fulfill the
obligation
of
disclosing
information
according to
law,
following
relevant
laws,
regulations,
other
normative
documents
and articles
of listed
company,
which is to
guarantee
the fairness
and
reasonablen
ess in
related
transaction
pricing, to
guarantee
the fairness
of
transaction
condition
and to
guarantee
not to utilize Sino Great Wall Co., Ltd. 2018 Annual Report
82
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
Developme
nt Group
Co., Ltd.
Income
disposal
During the
assets
reorganizati
on, the
house
March
19,2015
Long-term
Fully
completed
(On March
29, 2018,
the Sino Great Wall Co., Ltd. 2018 Annual Report
83
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
compensatio
ns, as well
as the
expected
compensatio
ns
concerning
to the
regaining of
plots
planned as
schools
within the
right of land
use of
Nanyou
Industrial
Park of
Nanshan
District
have not
been
recorded in
the
assessment.
Therefore,
Union
Group
company
received an
economic
compensati
on of RMB
100 million
from
Shenzhen
Union
Developme
nt
Investment
Co., Ltd.,
and
promised to
complete
the
performanc
e.)
Sino Great Wall Co., Ltd. 2018 Annual Report
84
promises
that after the
reorganizati
on, if Union
or a third
party
appointed
by Union
receives
compensatio
ns or
incomes
related to
above-menti
oned
disposed
assets which
are house
property
and land
without
property
certificate
as well as
regaining of
plots
planned as
schools,
Union will
return the
benefits to
Victor
Onward
Holdings, in
10 working
days since
the
collection.
The actual
costs and
fees during
the
possession
of the house Sino Great Wall Co., Ltd. 2018 Annual Report
85
property
and land
and the paid
as well as
the unpaid
but
necessary
costs and
fees for the
reception of
the
above-menti
oned
benefits for
Union
Group or its
third party
will be
deducted
from the
income. The
specific
benefits and
payable
costs and
fees should
be
confirmed
jointly by
Union
Group and
Victor
Onward
Holdings
based on the
actual
situations.
（Note:On
June 25,
2015,All
shareholders
of Victor
Onward
Holdings, Sino Great Wall Co., Ltd. 2018 Annual Report
86
Union
Group and
Sino Great
Wall Signed
supplementa
ry
agreement,
and
specified
that the land
and houses
without
ownership
certificate
of Victor
Onward
Holdings
located at
the factory
area of
Kuixin
community
of Kuichong
street office
of
Longgang
district (the
land area is
about
50,000
square
meters, the
built-up
area of
houses is
about
25,000
square
meters,
among them
about
18,000
square
meters of Sino Great Wall Co., Ltd. 2018 Annual Report
87
buildings at
built-up
area are
within the
plan of
removal and
collection of
government
， hereinafter
referred as
“undocume
nted
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
Developme
nt Group
Co., Ltd
Cash
compensatio
n
According
to the Term
5.5.3 of
Agreement
on Major
Asset
Replacemen
t and Asset
Purchase
Through
Issuing
Shares
(hereinafter
referred to
as
March
19,2015
Long-term
Completed
the
implementa
tion (On
March 29,
2018, the
company
received an
economic
compensati
on of RMB
100 million
from
Shenzhen
Union Sino Great Wall Co., Ltd. 2018 Annual Report
88
Agreement)
signed on
October 13,
2014 by the
company
and all
shareholders
of Victor
Onward Co.
Ltd.. and
Sino Great
Wall, Victor
Onward
Holdings
should
obtain the
letter of
approval
concerning
the
transferred
debts of the
disposed
assets from
the creditor
(including
the
guarantee,
similarly
hereinafter)
before the
date of
assets
delivery. In
the situation
of debts on
Victor
Onward
Holdings
due to the
absence of
creditor’s
consent, the
company or
Developme
nt
Investment
Co., Ltd.,
and
promised to
complete
the
performanc
e.)
Sino Great Wall Co., Ltd. 2018 Annual Report
89
the third
party
appointed
by the
company is
in charge of
paying off
debts or
reaching
agreement
on the
solution
with the
creditor.
When there
are losses
caused by
improper
solutions of
the
company or
the third
party
appointed
by the
company,
the
company or
the third
party
appointed
by the
company
will fully
compensate
for the
caused
losses of
Victor
Onward
Holdings in
5 working
days after
receiving Sino Great Wall Co., Ltd. 2018 Annual Report
90
the notice.
According
to the Term
5.5.4 of
Agreement,
after the
date of
assets
delivery,
any
compensatio
ns,
obligations
of payment
and
penalties
caused by
disposed
assets as
well as
unsettled
disputes in
Victor
Onward
Holdings
will be
undertaken
and solved
by the
company or
the third
party
appointed
by the
company,
and Victor
Onward
Holdings
assumes no
responsibilit
y. When
there are
losses
caused by it, Sino Great Wall Co., Ltd. 2018 Annual Report
91
the
company or
the third
party
appointed
by the
company
will fully
compensate
for the
caused
losses of
Victor
Onward
Holdings in
5 working
days after
receiving
the notice.
According
to the Term
5.6.1 of
Agreement
and based
on the
principle of
“staff
arrangement
according to
the assets”,
the labor
relations,
social
insurance
relations
including
pension,
medical
treatment,
unemploym
ent, working
injury and
maternity,
and other Sino Great Wall Co., Ltd. 2018 Annual Report
92
liable
welfare and
salary of all
the staff in
Victor
Onward
Holdings.
(including
but not
limited to
on-post
Shenzhen
Victor
Onward
Textile
Industrial
Co., Ltd.
The Third
Quarterly
Report
2015. 25
employees,
employees
awaiting job
assignments
, retired
employees,
retained
employees
with
suspend
salary,
transferred
employees,
and
temporary
employees,
etc) will be
transferred
to the
company or
the third
party
appointed Sino Great Wall Co., Ltd. 2018 Annual Report
93
by the
company.
Compensati
ons or
related
matters (if
any) due to
the
termination
of labor
relationship
in advance
with Victor
Onward
Holdings,
the
company or
the third
party
appointed
by the
company
will be in
charge of
the
payment.
The
company
promises
that for the
losses
caused by
matters such
as the
above-menti
oned debt
transfers of
disposed
assets,
personnel
arrangement
, unsettled
disputes,
potential Sino Great Wall Co., Ltd. 2018 Annual Report
94
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-menti
oned
matters
based on the
Agreement
in cash.
Commitments make in initial public
offering or re-financing
No No No No No
Equity incentive commitment No No No No
Other commitments for medium
and small shareholders
No No No No
Completed on time(Y/N) Yes
If the commitments are not fulfilled
on time, shall explain the specify
reason and the next work plan
Nil
2.The existence of the company's assets or projects earnings forecasts and earnings reporting period is still
in the forecast period, the company has assets or projects meet the original profit forecast made and the
reasons explained
□Applicable √ Not applicable Sino Great Wall Co., Ltd. 2018 Annual Report
95
IV. Particulars about the non-operating occupation of funds by the controlling shareholder
□ Applicable √ Not applicable
No non-operating occupation from controlling shareholders and its related party in the period.
V. Explanation of the Supervisory Committee and Independent Directors (If applicable)on
the Qualified Auditor’s Report Issued by the CPAs.
√ Applicable □ Not applicable
Reanda Certified Public Accountants (LLP) audited the financial report of Sino Great Wall Co., Ltd. (hereinafter referred to as "the
Company") for 2018 and issued an Audit Report, (LADS Zi [2019] No 2333), which was unable to provide opinions. The board of
directors, 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 Report
The board of directors believes that "matters that lead to the inability to express opinions" fully reveal the risks faced by the company
and objectively reflect the actual situation and financial situation of the company. The board of directors of the company agrees to the
audit report issued by Reanda Certified Public Accountants (Special General Partnership) for the 2018 financial report of the
company that cannot express opinions. The Board of Directors of the Company will take effective measures to eliminate the above
risk 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 the
non-standard audit opinion in the 2018 financial report
In the opinion of the Board of Supervisors: Reanda Certified Public Accountants (Special General Partnership) has issued a
disclaimer audit report on the Company's 2018 financial report based on professional judgment. We respect the professional opinions
of 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 work
of the Board of Directors and the management continuously, and earnestly safeguard the legitimate rights and interests of the
Company and all shareholders. Meanwhile, the Board of Supervisors hopes that the Board of Directors and the management will take
effective measures to eliminate the contents mentioned in the audit report that lead to the inability to express opinions as soon as
possible, 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 financial
report
After the relevant information consulted and communicating with the audit institution and relevant personnel, as an independent
director of the Company, we consider that the disclaimer audit report on the 2018 financial report of the Company issued by Reanda
Certified Public Accountants (LLP) is based on professional judgement, and we respect the professional opinions of the accountants
and agree with the special statement of the Board of Directors on the matters covered in the disclaimer audit report. The measures
taken or to be taken by the Board of Directors are conducive to eliminating the matters concerning this disclaimer audit report of
opinion and their impacts. We will urge the Board of Directors and the management of the Company to pay continuous attention to
this 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 methods
as compared with the financial reporting of last year.
√Applicable □Not applicable
The format of financial statements of general enterprises has been revised in accordance with the provisions of Notice on Revision
and Issue of 2018 Format of Financial Statements for General Enterprises (CK [2018] No.15) issued by the Ministry of Finance. Sino Great Wall Co., Ltd. 2018 Annual Report
96
VII. Explain retrospective restatement due to correction of significant accounting errors in
the reporting period
□Applicable √ Not applicable
No 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 of
last year.
√Applicable □Not applicable
During the reporting period, the changes in the scope of consolidated statements are detailed in the notes to the financial reports.
IX. Engagement/Disengagement of CPAs
CPAs currently engaged
Name of the domestic CPAs Reanda Certified Public Accountants LLP
Remuneration for domestic accounting firm (Ten thousand
yuan)
260
Continuous life of auditing service for domestic accounting
firm
1
Name of domestic CPA Wang Xinyu, Zhou Zhonghua
Continuous life of auditing service for domestic accounting
firm
1
Has the CPAs been changed in the current period
√ Yes □No
Whether change the appointment of account firm during the auditing period or not
□ Yes √No
Whether perform approval procedures when change the appointment of account firm or not
√ Yes □No
A detailed explanation of the change of employment and accounting firm
Due to the arrangement of project personnel of Shu Lun Pan CPAs (Special General Partnership) and other reasons, its 2018 annual
audit work time cannot match the company's plan; Meanwhile, considering that it has provided auditing services for the company for
many years, in order to ensure the independence and objectivity of the company's audit work, the fourth meeting of the company's
eighth board of directors and the first extraordinary general meeting of shareholders in 2019 deliberated and passed the Proposal on
Replacement of Accounting Firm, it was agreed to employ Reanda Public Certified Accountants (special general partnership) as the
company's 2018 annual financial report and internal control auditing body for a period of one year. For details, please refer to the
company'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 applicable
In 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. Sino Great Wall Co., Ltd. 2018 Annual Report
97
X. Situation of Facing Listing Suspension and Listing Termination after the Disclosure of the
Yearly Report
□Applicable √ Not applicable
XI. Bankruptcy reorganization
□Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period.
XII. Significant lawsuits and arbitrations of the Company
√ Applicable □Not applicable
General
information
Involved
amount
（Ten
thousand
yuan)
Provision Progress
Decisions and
effects
Execution of
decisions
Disclosure
date
Index to
disclosed
informatio
n
Loan Contract
Dispute Case with
Shenzhen
Guodingsheng
Trading Co., Ltd.
12,811.63 No
Second
instance
judgment
is given
and case
is closed
First-instance
judgment:
Defendant I
shall repay the
principal of 88 ，
082，007.52
yuan and
overdue interest
of 1 ，377，
936.36 yuan;
Defendants II,
III and IV shall
be jointly and
severally liable;
Defendant V
shall assume
the pledge
guarantee
responsibility
and other
claims are
rejected. The
second instance
judgment was
as follows: The
appeal was
The
Guangdong
Shenzhen
Intermediate
People's
Court issued
(2019)
Y03Z701
enforcement
verdict, with
a mandatory
enforcement
of 88 ，941 ，
110.88 yuan.
August
31,2018
On August
31, 2018, it
was
disclosed
in the 2018
Semi-annu
al Report
on Cninf;
On
September
2018,
Announce
ment on
the
Company,
Its
Wholly-ow
ned
Subsidiarie
s and
Controlling
Shareholde
rs
Receiving
<Notice of
Enforceme Sino Great Wall Co., Ltd. 2018 Annual Report
98
rejected and the
original verdict
was upheld.
nt> and <
Property
Report
Order>; On
October
23, 2018,
Announce
ment on
Reply to
Inquiry
Letter on
Semi-annu
al Report
of
Shenzhen
Stock
Exchange(
Announce
ment
No.:2018-1
25）; On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019) ；
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on Sino Great Wall Co., Ltd. 2018 Annual Report
99
April 19,
2019
(Announce
ment No.:
2019-036)
Financial loan
contract dispute
case of Zhuhai
Branch of Xiamen
International
Bank Co., Ltd.
4,997.22 No
The
first-insta
nce
verdict
was
closed
and an
appeal
was filed.
August
31,2018
On August
31, 2018, it
was
disclosed
in the 2018
Semi-annu
al Report
on Cninf;
On
September
2018,
Announce
ment on
the
Company,
Its
Wholly-ow
ned
Subsidiarie
s and
Controlling
Shareholde
rs
Receiving
<Notice of
Enforceme
nt> and <
Property
Report
Order>; On
October
23, 2018,
Announce
ment on
Reply to
Inquiry
Letter on
Semi-annu
al Report Sino Great Wall Co., Ltd. 2018 Annual Report
100
of
Shenzhen
Stock
Exchange(
Announce
ment
No.:2018-1
25）; On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
Loan contract
dispute case with
Li Qiaoli
16,192.92 No
The
judgment
is given
and the
case is
closed.
—
Under
enforcement
On February
2, 2019,
Shenzhen
Intermediate
People's
Court issued
(2019)
Y03Z65
enforcement
verdict, with
a mandatory
enforcement
of
177.,194128
million yuan
August
31,2018
On August
31, 2018, it
was
disclosed
in the 2018
Semi-annu
al Report
on Cninf;
On
September
2018,
Announce
ment on
the
Company,
Its
Wholly-ow
ned
Subsidiarie
s and
Controlling
Shareholde Sino Great Wall Co., Ltd. 2018 Annual Report
101
rs
Receiving
<Notice of
Enforceme
nt> and <
Property
Report
Order>; On
October
23, 2018,
Announce
ment on
Reply to
Inquiry
Letter on
Semi-annu
al Report
of
Shenzhen
Stock
Exchange(
Announce
ment
No.:2018-1
25）; On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
Loan contract
dispute case of
Shenzhen Brach
of Bank of
Ningbo
9,523.09 No
Waiting
for the
judgment
of first
instance.
— —
August
31,2018
On August
31, 2018, it
was
disclosed
in the 2018 Sino Great Wall Co., Ltd. 2018 Annual Report
102
Semi-annu
al Report
on Cninf;
On
September
2018,
Announce
ment on
the
Company,
Its
Wholly-ow
ned
Subsidiarie
s and
Controlling
Shareholde
rs
Receiving
<Notice of
Enforceme
nt> and <
Property
Report
Order>; On
October
23, 2018,
Announce
ment on
Reply to
Inquiry
Letter on
Semi-annu
al Report
of
Shenzhen
Stock
Exchange(
Announce
ment
No.:2018-1
25）; On
February
20, 2019, Sino Great Wall Co., Ltd. 2018 Annual Report
103
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
Loan contract
dispute case of
Industrial Bank
(China) Shenzhen
Houhai
Sub-branch
29,137.97 No
The
judgment
is given
and the
case is
closed.
—
Shenzhen
Intermediate
People's
Court issued
(2018)
Y03Z2798,
with a
mandatory
enforcement
of
293,399,781
yuan.
August
31,2018
On August
31, 2018, it
was
disclosed
in the 2018
Semi-annu
al Report
on Cninf;
On
September
2018,
Announce
ment on
the
Company,
Its
Wholly-ow
ned
Subsidiarie
s and
Controlling
Shareholde
rs
Receiving
<Notice of
Enforceme
nt> and <
Property
Report
Order>; On
October
23, 2018, Sino Great Wall Co., Ltd. 2018 Annual Report
104
Announce
ment on
Reply to
Inquiry
Letter on
Semi-annu
al Report
of
Shenzhen
Stock
Exchange(
Announce
ment
No.:2018-1
25）; On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019);
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
Enforcement case
11,711.49 No
The
—
Under September On Sino Great Wall Co., Ltd. 2018 Annual Report
105
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
Internatio
nal Trust
Co., Ltd.
applied to
Beijing
Second
Intermedi
ate
People's
Court for
compulso
ry
execution
enforcement 14,2018 September
2018,
Announce
ment on
the
Company,
Its
Wholly-ow
ned
Subsidiarie
s and
Controlling
Shareholde
rs
Receiving
<Notice of
Enforceme
nt> and <
Property
Report
Order>; On
October
23, 2018,
Announce
ment on
Reply to
Inquiry
Letter on
Semi-annu
al Report
of
Shenzhen
Stock
Exchange(
Announce
ment
No.:2018-1
25）; On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen Sino Great Wall Co., Ltd. 2018 Annual Report
106
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019);
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
Enforcement case
of CCB
International
Asset
Management
(Shanghai) Co.,
Ltd
21,111.82 No
The
Notice of
Enforcem
ent from
Beijing
Third
Intermedi
ate
People's
Court on
the Case
of
Notarizati
on of
Creditor's
Rights
Documen
ts
between
the
Company
and CCB
Consumption
restriction order
Under
enforcement
September
18,2018
On
September
2018,
Announce
ment on
the
Company,
Its
Wholly-ow
ned
Subsidiarie
s and
Controlling
Shareholde
rs
Receiving
<Notice of
Enforceme
nt> and <
Property
Report
Order>; On Sino Great Wall Co., Ltd. 2018 Annual Report
107
Internatio
nal Asset
Managem
ent
(Shangha
i) Co.,
Ltd. is
received
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
Loan dispute case
with Chen Jiang
4,980 No
The case
is closed
through
mediation
1. Confirm the
outstanding
loan principal
of 49.8 million
yuan and
interest. 2. Pay
interest of
5,342,800 yuan
before July 25,
2018. 3. Pay
interest of 15
million yuan
before July 31,
2018. 4. Pay
principal of
34.8 million
yuan before
September 30,
2018. 5. The
lawsuit fee of
290,800 yuan
and
preservation fee
of 5000 yuan
shall be borne
by Sino Stock
Company. Pay
off before July
31, 2018. 6.
Other
Under
enforcement
September
18,2018
On
September
2018,
Announce
ment on
the
Company,
Its
Wholly-ow
ned
Subsidiarie
s and
Controlling
Shareholde
rs
Receiving
<Notice of
Enforceme
nt> and <
Property
Report
Order>; On
October
23, 2018,
Announce
ment on
Reply to
Inquiry
Letter on
Semi-annu Sino Great Wall Co., Ltd. 2018 Annual Report
108
defendants
shall pay off
jointly and
severally. 7.
Chen Jiang
shall apply for
unsealing
within 3 days
after the
aforesaid
payment is
completed. 8.
Failure to pay
the aforesaid
amount may be
subject to
enforcement. 9.
Chen Jiang has
the priority of
compensation
for the pledge
al Report
of
Shenzhen
Stock
Exchange;
Announce
ment on
Enforceme
nt of
Company
Shares
Held by
Directors
and Senior
Executives
on January
5, 2019;
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
Contract dispute
case with Gome
Cinda Factoring
Co., Ltd.
4,285.52 No
The
first-insta
nce
verdict
was
closed
and an
appeal
was filed.
— —
October
23,2018
On October
23, 2018,
Announce
ment on
Reply to
Inquiry
Letter on
Semi-annu
al Report
of
Shenzhen
Stock Sino Great Wall Co., Ltd. 2018 Annual Report
109
Exchange;
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019);
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
Financial loan
contract dispute
case with Bohai
International Trust
Co., Ltd.
36,492.18 No
Waiting
for the
judgment
of first
instance.
— —
September
15,2018
Announce
ment on
Partial
Debt
Overdue on
September
15, 2018;
Announce
ment on
Receiving
Civil
Complaint
on October
9, 2018; Sino Great Wall Co., Ltd. 2018 Annual Report
110
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
Financial loan
contract dispute
case with China
Industrial
International Trust
Limited
10,245.74 No
The
first-insta
nce
verdict
was
closed
— —
September
15,2018
Announce
ment on
Partial
Debt
Overdue on
September
15, 2018;
Announce
ment on
Receiving
Civil
Complaint
on October
13, 2018 ；
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019); Sino Great Wall Co., Ltd. 2018 Annual Report
111
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
Financial loan
contract dispute
case with China
Industrial
International Trust
Limited
10,113.78 No
The
first-insta
nce
verdict
was
closed
Sino Great Wall
shall repay the
loan principal
of 100 million
yuan, the
interest
calculated
according to
the interest rate
agreed in the
contract from
June 30, 2018
to August 7,
2018, the
overdue interest
(default
interest)
calculated
according to
the interest rate
agreed in the
contract from
August 8 in
2018 to the
actual
repayment date,
and the
compound
interest
calculated
—
September
15,2018
Announce
ment on
Partial
Debt
Overdue on
September
15, 2018;
Announce
ment on
Receiving
Civil
Complaint
on October
13, 2018 ；
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019) Sino Great Wall Co., Ltd. 2018 Annual Report
112
according to
the interest rate
agreed in the
contract from
July 5, 2018 to
the actual
repayment date;
The Sino Great
Wall shall pay
the legal fee of
80,000 yuan; If
Sino Great Wall
fails to fulfill
the first and
second debts
mentioned
above, China
Industrial
International
has the right to
receive priority
compensation
within the
scope of this
judgment
according to
the Pledge
Contract of
Accounts
Receivable
signed by both
parties; Chen
Lue and He
Feiyan shall
bear joint and
several
liabilities for
the first and
second debts
mentioned
above; Other
claims are
rejected. The
case acceptance Sino Great Wall Co., Ltd. 2018 Annual Report
113
fee is
547,488.89
yuan, of which
5050 yuan shall
be borne by
China
Industrial
International,
and 542,438.89
yuan shall be
borne jointly by
Sino Great
Wall, Chen Lue
and He Feiyan.
The case
preservation fee
of 5,000 yuan
shall be shared
by Sino Great
Wall, Chen Lue
and He Feiyan.
Bill dispute case
with Jiaozuo
Junpeng Coal Co.,
Ltd.
305 No
The
judgment
is given
and the
case is
closed.
—
The plaintiff
has not yet
applied for
enforcement
for failure to
perform
October
13,2018
Announce
ment on
Receiving
Civil
Complaint
on October
13, 2018 ；
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019) Sino Great Wall Co., Ltd. 2018 Annual Report
114
Bill dispute case
with Tongchuan
New District
Hengxin Building
Material Co., Ltd.
456 No
The
judgment
is given
and the
case is
closed.
—
The plaintiff
has not yet
applied for
enforcement
for failure to
perform
October
13,2018
Announce
ment on
Receiving
Civil
Complaint
on October
13, 2018 ；
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
Bill dispute case
with Xian Bihui
Road & Bridge
Engineering Co.,
Ltd.
507 No
The
judgment
is given
and the
case is
closed.
—
The plaintiff
has not yet
applied for
enforcement
for failure to
perform
October
13,2018
Announce
ment on
Receiving
Civil
Complaint
on October
13, 2018 ；
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019) Sino Great Wall Co., Ltd. 2018 Annual Report
115
Financial loan
contract dispute
case with Datong
Securities Co.,
Ltd.
13,801.32 No
The
judgment
is given
and the
case is
closed.
— —
September
14,2018
Announce
ment on
Early
Terminatio
n of
Collective
Funds
Trust Plan
for Trust
Loan on
September
14, 2018 ；
Announce
ment on
Partial
Debt
Overdue on
September
15, 2018;
Announce
ment on
Receiving
Civil
Complaint
on October
18,
2018(Anno
uncement
No.:2018-1
20);On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019); Sino Great Wall Co., Ltd. 2018 Annual Report
116
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
Financial loan
contract dispute
case of Ping An
International
Financial Leasing
Co., Ltd.
2,905.1 No
Waiting
for a
court
decision.
— —
October
24,2018
Announce
ment on
Receiving
Civil
Complaint
on October
24, 2018 ；
Announce
ment on
Receiving
Notice of
Early
Maturity of
Debt on
October
26, 2018;
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019- Sino Great Wall Co., Ltd. 2018 Annual Report
117
019)
Private loan
dispute case with
Gong Lihong
3,143.18 No
The
first-insta
nce
verdict
was
closed
and the
company
has
appealed
— —
October
24,2018
Announce
ment on
Receiving
Civil
Complaint
on October
24, 2018 ；
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019) ;
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
Right of recourse
dispute case with
Shenzhen Yi'an
Factoring Co.,
Ltd.
301.89 No
Waiting
for the
judgment
of first
instance
— —
October
24,2018
Announce
ment on
Receiving
Civil
Complaint
on October
24, 2018； Sino Great Wall Co., Ltd. 2018 Annual Report
118
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019);
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
Loan contract
dispute case with
Zhongjiang
International Trust
Co., Ltd.
32,738.68 No
Waiting
for the
judgment
of first
instance
— —
September
29,2018
Announce
ment on
Receiving
Notice of
Early
Maturity of
Debt on
September
29, 2018
；
Announce
ment on
Receiving
Civil
Complaint Sino Great Wall Co., Ltd. 2018 Annual Report
119
on
November
10, 2018 ；
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
Loan dispute case
with China
Railway Trust
Co., Ltd.
2,140.87 No
The
enforcem
ent
verdict
has been
received.
—
In
commission
February
13,2019
Announce
ment 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(A
nnounceme
nt
No.::2019- Sino Great Wall Co., Ltd. 2018 Annual Report
120
019)
Financial loan
contract dispute
case with
Shenzhen Branch
of Shanghai
Pudong
Development Co.,
Ltd.
7,017.76 No
No trial
has yet
been
held.
— —
February
13,2019
Announce
ment 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
(Announce
ment
No.::2019-
019)
Financial loan
contract dispute
case of Shenzhen
Branch of China
Minsheng Bank
10,164.09 No
Mediatio
n stage
before
litigation.
— —
February
13,2019
Announce
ment on
Receiving
<Civil
Complaint
> and
<Notice of
Advance
Mediation>
on
February
13, 2019;
On
February
20, 2019,
Announce Sino Great Wall Co., Ltd. 2018 Annual Report
121
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019)
Enforcement case
with Beijing
Zhongguancun
Sci-tech
Financing
Guaranty Co.,
Ltd.
736.1 No
Enforcem
ent.
—
In
commission
February
13,2019
Announce
ment 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
(Announce
ment
No.::2019-
019)
Sales contract
dispute case with
Jieyang Fangyuan
Stone Co., Ltd.
489.33 No
No trial
has yet
been
held.
— —
February
13,2019
Announce
ment on
Receiving
<Civil
Complaint
> and Sino Great Wall Co., Ltd. 2018 Annual Report
122
<Notice of
Advance
Mediation>
on
February
13, 2019;
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019)
Installation
contract dispute
case with lvmeiyi
Environmental
Construction
Group Co., Ltd.
1,412.36 No
No trial
has yet
been
held.
— —
February
13,2019
Announce
ment 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(A Sino Great Wall Co., Ltd. 2018 Annual Report
123
nnounceme
nt
No.::2019-
019)
Contract of hired
work dispute case
with Shanghai
Disheng Wood
Co., Ltd.
219.97 No
Waiting
for the
judgment
of first
instance
— —
February
13,2019
Announce
ment 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
(Announce
ment
No.::2019-
019);
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.: Sino Great Wall Co., Ltd. 2018 Annual Report
124
2019-036)
Loan dispute case
with Henan No.1
Thermal Power
Construction Co.,
Ltd.
4,717.75 No
The
first-insta
nce
verdict
was
closed
and the
company
has
appealed
— —
February
19,2019
Announce
ment on
Receiving
<Civil
Complaint
>,
<Arbitratio
n Notice>
and
<Notice of
Enforceme
nt> on
February
19, 2019;
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019) ;
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036) Sino Great Wall Co., Ltd. 2018 Annual Report
125
Contract dispute
case with Gome
Cinda Factoring
Co., Ltd.
4,163.7 No
Mediatio
n has
been
reached,
waiting
for the
court to
deliver
the
mediation
document
— —
February
19,2019
Announce
ment on
Receiving
<Civil
Complaint
>,
<Arbitratio
n Notice>
and
<Notice of
Enforceme
nt> on
February
19, 2019;
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019)
Loan contract
dispute case with
Li Shaoxiong
5,860.92 No
Awaiting
judgment
— —
2 February
19,2019
Announce
ment on
Receiving
<Civil
Complaint
>,
<Arbitratio
n Notice>
and
<Notice of
Enforceme
nt> on
February
19, 2019;
On Sino Great Wall Co., Ltd. 2018 Annual Report
126
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
Enforcement case
with Bairui Trust
Co., Ltd.
30,736.58 No
The
enforcem
ent
verdict
has been
received.
—
In
commission
February
19,2019
Announce
ment on
Receiving
<Civil
Complaint
>,
<Arbitratio
n Notice>
and
<Notice of
Enforceme
nt> on
February
19, 2019;
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concer(An
nouncemen
t
No.::2019-
019) Sino Great Wall Co., Ltd. 2018 Annual Report
127
Dispute case over
Lease Agreement
of construction
equipment with
Zhejiang Huatie
Construction
Support
Technology Co.,
Ltd.
979.05 No
In the
trial of
first
instance
— —
February
19,2019
Announce
ment on
Receiving
<Civil
Complaint
>,
<Arbitratio
n Notice>
and
<Notice of
Enforceme
nt> on
February
19, 2019;
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019)
Construction
contract dispute
case with Wang
Kaixiang
304.41 No
Waiting
for the
judgment
of first
instance
— —
February
19,2019
Announce
ment on
Receiving
<Civil
Complaint
>,
<Arbitratio
n Notice>
and
<Notice of
Enforceme
nt> on
February
19, 2019;
On Sino Great Wall Co., Ltd. 2018 Annual Report
128
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019);
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
Labor subcontract
dispute case with
Hunan Zhongjian
Construction
Labor Co., Ltd.
251.57 No
An award
is issued
upon
arbitratio
n and the
case is
closed.
— —
February
19,2019
Announce
ment on
Receiving
<Civil
Complaint
>,
<Arbitratio
n Notice>
and
<Notice of
Enforceme
nt> on
February
19, 2019;
On
February Sino Great Wall Co., Ltd. 2018 Annual Report
129
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019);
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
Loan contract
dispute case with
Beijing Tellhow
Intelligent
Engineering Co.,
Ltd.
3,017.5 No —
。Currently,
the company
has repaid the
loan, and the
plaintiff
withdrew and
closed the
case.
August
31,2018
On August
31, 2018, it
was
disclosed
in the 2018
Semi-annu
al Report
on Cninf;
On
September
14, 2018,
the
Announce
ment on
the
Company,
Its Sino Great Wall Co., Ltd. 2018 Annual Report
130
wholly-ow
ned
Subsidiarie
s and
Controlling
Shareholde
rs
Receiving
the Notice
of
Enforceme
nt and the
Property
Report
Order; On
October
23, 2018,
Announce
ment on
Reply to
Inquiry
Letter on
Semi-annu
al Report
of
Shenzhen
Stock
Exchange(
Announce
ment
No.:2018-1
25）
Contract dispute
case for
construction
project with
Anhui Tiangan
Construction Co.,
Ltd.
59.85 No
Nolle
prosequi
and case
closed
—
Currrently,
the payment
has been
completed
and the case
has been
closed.
September
14,2018
On
September
14, 2018,
the
Announce
ment on
the
Company,
Its
wholly-ow
ned
Subsidiarie Sino Great Wall Co., Ltd. 2018 Annual Report
131
s and
Controlling
Shareholde
rs
Receiving
the Notice
of
Enforceme
nt and the
Property
Report
Order; On
October
23, 2018,
Announce
ment on
Reply to
Inquiry
Letter on
Semi-annu
al Report
of
Shenzhen
Stock
Exchange(
Announce
ment
No.:2018-1
25）
Right to recourse
dispute case with
China Arts
Century
Construction &
Decoration
Design (Beijing)
Co., Ltd.
43.8 No
Nolle
prosequi
and case
closed
—
The plaintiff
withdrew the
lawsuit and
closed the
case.
August
24,2018
Announce
ment on
Receiving
Civil
Complaint
on October
24, 2018
Financial loan
contract case with
SPD
Bank .Beijing
Branch
7,977.89 No
No trial
has yet
been
held.
March 1,
2019
Announce
ment on
Receiving
<Civil
Complaint
> on March Sino Great Wall Co., Ltd. 2018 Annual Report
132
1, 2019
Financial loan
contract case with
Shanghai
Bank .Beijing
Branch
27,411.99 No
No trial
has yet
been
held.
March 1,
2019
Announce
ment on
Receiving
<Civil
Complaint
> on March
1, 2019
Financial loan
contract case with
Bank of
China.Shenzhen
Futian
7,934.39 No
No trial
has yet
been
held.
March 1,
2019
Announce
ment on
Receiving
<Civil
Complaint
> on March
1, 2019
Financial loan
contract case with
Hengfeng
Bank .Fuzhou
Branch
10,024.5 No
The case
is closed
through
mediation
April
8,2019
Announce
ment on
Receiving
<Civil
Complaint
> and
<Applicati
on for
Arbitration
> on April
8, 2019
Financial loan
contract case with
SPD Bank Beijing
Branch
3,965 No
The case
is closed
through
mediation
April
8,2019
Announce
ment on
Receiving
<Civil
Complaint
> and
<Applicati
on for
Arbitration
> on April
8, 2019
Financial loan
contract case with
Hunan Jinjude
Construction
Investment Co.,
Ltd.
502 No
In the
first
instance
trial
April
8,2019
Announce
ment on
Receiving
<Civil
Complaint
> and Sino Great Wall Co., Ltd. 2018 Annual Report
133
<Applicati
on for
Arbitration
> on April
8, 2019
Dispute case over
decoration and
renovation
contract with Xu
Zhigui
104.07 No
In the
first
instance
trial
April
8,2019
Announce
ment on
Receiving
<Civil
Complaint
> and
<Applicati
on for
Arbitration
> on April
8, 2019
Financial loan
contract case with
Jiujiang
Bank .Guangzhou
Haizhu Branch
10,223.39 No
The case
is closed
through
mediation
April
8,2019
Announce
ment on
Receiving
<Civil
Complaint
> and
<Applicati
on for
Arbitration
> on April
8, 2019
Financial loan
contract case with
Baoshang
Bank.Shenzhen
Branch
20,451.46 No
The case
is closed
through
mediation
April 13,
2019
Announce
ment on
Receiving
<Civil
Complaint
>
plication >
on April
13, 2019
Other small
litigations
4,411.59 No — — —
October
23,2018
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen Sino Great Wall Co., Ltd. 2018 Annual Report
134
Stock
Exchange's
Letter of
Concer ； On
August 31,
2018, it
was
disclosed
in the 2018
Semi-annu
al Report
on Cninf
by 34.4954
million
yuan; On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
XIII. Situation of Punishment and Rectification
√ Applicable □Not applicable
Name Type Reasons
Type of
Punishment
Conclusion (if
any)
Disclosure date
Disclosure
index
Sino Great Wall
Co., Ltd
The company
As the
company is
suspected of
violating laws
and regulations
in information
disclosure,
according to
the relevant
An
investigation is
filed or an
administrative
punishment is
imposed by the
China
Securities
Regulatory
As of the
disclosure date
of this
announcement,
the company
has not yet
received the
China
Securities
October
19,2018
（www.cninfo.
com.cn ）
（Announceme
nt
No.:2018-121 ） Sino Great Wall Co., Ltd. 2018 Annual Report
135
provisions of
the Securities
Law of the
People's
Republic of
China, the
CSRC has
decided to
initiate an
investigation in
the company.
Commission Regulatory
Commission's
concluding
comments or
decisions on
relevant
investigation
matters.
Sino Great Wall
Co., Ltd
The company
The Shenzhen
Supervision
Bureau of
China
Securities
Regulatory
Commission
will conduct
on-site
inspections of
the company
from May 2018
onwards
Be investigated
by a competent
authority
Decision on
Administrative
Supervision
Measures of
Shenzhen
Supervision
Bureau of
China
Securities
Regulatory
Commission
([2019] No.11)
March 7,2019
（www.cninfo.
com.cn ）
（Announceme
nt
No.:2019-022）
Chen Lue, Tian
Wei, Tang
Xianyong, Cui
Hongli and
Yang Chunling
Senior
executives
The Shenzhen
Supervision
Bureau of
China
Securities
Regulatory
Commission
will conduct
on-site
inspections of
the company
from May 2018
onwards
Be investigated
by a competent
authority
Decision on
Administrative
Supervision
Measures of
Shenzhen
Supervision
Bureau of
China
Securities
Regulatory
Commission
[2019] No.12
[2019]No.13
[2019]No.14
[2019]No.15
and
[2019]No.16
March 7,2019
（www.cninfo.
com.cn ）
（Announceme
nt
No.:2019-022 ）
Chen Lue Director
The Shenzhen
Supervision
Be investigated
by a competent
Decision on
Administrative
March 7,2019
（www.cninfo.
com.cn) Sino Great Wall Co., Ltd. 2018 Annual Report
136
Bureau of
China
Securities
Regulatory
Commission
will conduct
on-site
inspections of
the company
from May 2018
onwards
authority Supervision
Measures of
Shenzhen
Supervision
Bureau of
China
Securities
Regulatory
Commission
([2019] No.12)
（Announceme
nt
No.:2019-022 ）
Explanation on Rectification
√Applicable □Not applicable
On 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 the
relevant provisions of the Securities Law of the People's Republic of China, the CSRC has decided to initiate an investigation in the
company. On March 6, 2019, the company received the Shenzhen Securities Regulatory Bureau's Decision on Administrative
Supervision Measures (No 2019] 11, No. [2019] 12 , No. [2019] 13 ,No. [2019] 14 , No. [2019] 15, and No. [2019] 16) showing that
the Shenzhen Securities Regulatory Bureau had carried out on-site inspection of the company since May 2018, and the Shenzhen
Securities Regulatory Bureau had filed a case for investigation on the illegal disclosure of relevant information found in the
inspection; In addition, through inspection, it is also found that the company had the following problems "I. The income cost
accounting is not standardized, and expenses are charged through out-of-account fund accounts; II. It did not disclose the changes in
major items in a timely manner, the preparation of performance forecasts and performance report is not prudent; III. It has capital
exchanges of no real business foundation with a number of companies, and illegal foreign financial assistance; IV . The relevant
management system for raising funds is not perfect; V . Registration management for information insider is not standardized". The
Shenzhen 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 the
company, the company has made serious rectification in accordance with the matters involved in the Decision on Taking Corrective
Measures against Sino Great Wall Co., Ltd. ([2019] No.11). In addition to the above matters, Shenzhen Securities Regulatory Bureau
requires the company to employ a third party independent agency to conduct special inspections on the problems of NPP-0057 in
Xingang, 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's
concluding comments or decisions on relevant investigation matters.
XIV. Credit Condition of the Company and its Controlling Shareholders and Actual
Controllers
√Applicable □Not applicable
(I) The integrity of the company and its subsidiaries
1. The company and its wholly-owned subsidiary Sino International Engineering Co., Ltd. were incorporated into the list of
defaulters due to breach by the Beijing Second Intermediate People's Court due to the dispute with Shaanxi International Trust
Company 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 Sino Great Wall Co., Ltd. 2018 Annual Report
137
wholly-owned subsidiary Sino International Engineering Co., Ltd. were incorporated into the list of defaulters by the Beijing Third
Intermediate 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 with
Bairui 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 subsidiary
Sino 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 the
Haidian District People's Court of Beijing for notarizing the enforcement of creditor's rights documents with Beijing Zhongguancun
Sci-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 by
Tangshan 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 the
Tongzhou 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 controllers
1. Chen Lue, the controlling shareholder and actual controller of the company, has been incorporated into the list of defaulters, due to
his 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 the
guarantor and counter-guarantor, assumed joint and several guarantee liability for the above debts and was incorporated into the list
of 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 of
the counter-guarantor, assumed joint guarantee liability for the debt and was incorporated into the list of defaulters by the Chengdu
Intermediate 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 private
lending 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 Financing
Guaranty Co., Ltd., Chen Lue, as the guarantor and counter-guarantor, assumed joint and several guarantee liabilities for the debts
and 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 and
counter-guarantor, assumed joint guarantee liability for the debt and was incorporated into the list of defaulters by the Beijing Third
Intermediate 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 Third
Intermediate 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, and
2018-109 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 Sino Great Wall Co., Ltd. 2018 Annual Report
138
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 at
Cninf (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 Stock
Ownership Plan or Other Employee Incentive Measures
√Applicable □ Not applicable
The second meeting of the seventh board of directors, the second meeting of the seventh board of supervisors and the 2015 third
extraordinary general shareholder meeting were respectively convened by the company on Nov 5, 2015 and Nov 23, 205, at which
the Proposal on the First Phase of Employee Stock Ownership Plan (draft) of Shenzhen Victor Onward Textile Industrial Co., Ltd
was 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 of
No.57 Xing Zheng Zi Guan Xin Zhong Assets Management Contract of the Collection Assets Management Plan which concretely
explained and stipulated the information included the basic information of the collection plan, participating in and withdrawal of the
collection plan, guarantee, classification of the collection plan, the management methods and the management rights of the customer
assets in the collection plan, the establishment of the collection plan, the expenses of the collection plan, the proceeds and its
distribution 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 the
collection 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 means
of buying in the secondary security market, of which the average position price is RMB44.7578 per share, the total purchase quantity
is 833,187 shares which account for 0.1864% of the company's total share capital, and the total turnover is RMB37,291,630. The
lock-up period of the shares purchased under the plan is 12 months commenced from the date of this Announcement. Please refer to
the 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 “Proposal
on the one-year extension of the company's first phase ESOP” was passed. On November 21, 2017, the company held the
twenty-sixth meeting of the seventh board of directors, which reviewed and adopted the “Proposal on the one-year extension of the
company's first phase ESOP”, and according to the voting result of the holders’ meeting, the board agreed to extend the duration of
the company's first phase ESOP by one year, meaning that the ESOP can sell shares within the afore-said extension of one year (until
November 23, 2018).If the shares are not sold before the expiration of the extended one year, a further meeting of the holders and the
meeting of the board of directors can be convened two months before the expiration to consider the follow-up matters. Please refer to
the 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 the
Company's First Staff Shareholding Plan for One Year. On November 21, 2018, the Company convened the second meeting of the
eighth Board of Directors, deliberating and adopting the Proposal on Extending the Company's First Staff Shareholding Plan for One
Year. According to voting results at the holders' meeting, the Board of Directors agreed to extend the Company's first staff
shareholding plan for one year, i.e., the former expiry date was extended to one year later--November 23, 2019. In the duration, once Sino Great Wall Co., Ltd. 2018 Annual Report
139
the Company's shares held in the staff shareholding plan are sold out, the staff shareholding plan may be terminated beforehand. If
shares are not sold upon the expiry of the extended period, a holders' meeting and meeting of Board of Directors may be convened 2
months 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 applicable
Nil
2. Related-party transactions arising from asset acquisition or sold
□Applicable √ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period.
3. Related-party transitions with joint investments
□Applicable √ Not applicable
No 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 Agreement
on the Economic Compensation for the Events after the Major Asset Restructuring Period of Shenzhen Victor
Onward 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 after
the 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 Development
Investment Co., Ltd.
Website for temporary disclosure of the connected transaction
Announcement Date of disclosure Website for disclosure
Announcement on Signing the Economic
Compensation Agreement and Changes in
Shareholders' Commitments and Related
Transactions
March 20,2018 http://www.cninfo.com.cn Sino Great Wall Co., Ltd. 2018 Annual Report
140
Announcement on the Supplemental
Agreement for the Signing of the Economic
Compensation Agreement
March 20,2018 http://www.cninfo.com.cn
XVII. Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
□Applicable √ Not applicable
No trusteeship, contract or leasing for the Company in reporting period.
(2) Contract
□ Applicable √ Not applicable
No any contract for the Company in the reporting period.
(3) Lease
√Applicable □ Not applicable
Notes
During the reporting period, the company's leasing expenses were mainly the company’s office space and staff
quarters’ capital expenditures.
The company's profit and loss has reached more than 10% of the company's total profit during the reporting
period
□ Applicable √ Not applicable
Nil
2.Guarantees
√ Applicable □ Not applicable
（1 ）Guarantees
Unit: 10,000 Yuan
Guarantee of the Company for the controlling subsidiaries (Exclude controlled subsidiaries)
Name of the
Company
Relevant
disclosur
e
date/No.
Amount
of
Guarante
e
Date of
happening
(Date of
signing
Actual
mount of
guarantee
Guarantee
type
Guarantee
term
Complet
e
impleme
ntation
Guarante
e
for
associate Sino Great Wall Co., Ltd. 2018 Annual Report
141
of
the
guarantee
d
amount
agreement) or not d
parties
(Yes or
no)
Guarantee of the company for its subsidiaries
Guarantee provided
to
Amount
of
guarantee
and date
of
disclosur
e
Amount
of the
guarantee
Actual date of
occurring
(signing date
of agreements
Actual
amount of
guarantee
Type of
guarantee
Term
Comple
ted or
not
Related
guarant
ee
Sino International
March
31, 2016
70,000
January
16,2017
70,000
The joint
liability
guaranty
1 year No No
Sino International
May 20,
2017
12,000
October
28,2016
12,000
The joint
liability
guaranty
1 year No No
Sino International
March
31, 2016
7,000
February 20,
2017
7,000
The joint
liability
guaranty
1 year Yes No
Sino International
May 20,
2017
12,000
March 12,
2018
12,000
The joint
liability
guaranty
1 year No No
Sino International
March
31, 2016
20,000
April 14,
2017
20,000
The joint
liability
guaranty
1 year Yes No
Sino International
March
31, 2016
18,000
January 3,
2017
18,000
The joint
liability
guaranty
1 year Yes No
Sino International
May 20,
2017
12,000
June 7,
2017
12,000
The joint
liability
guaranty
1 year Yes No
Sino International
March
29, 2018
11,990
August 22,
2018
11,990
The joint
liability
guaranty
1 year No No
Sino International
May 20,
2017
40,000
July 25,
2017
40,000
The joint
liability
guaranty
1 year No No
Sino International
May 20,
2017
22,000
June 30,
2017
22,000
The joint
liability
guaranty
1 year No No Sino Great Wall Co., Ltd. 2018 Annual Report
142
Sino International
May 20,
2017
20,000
October 18,
2017
20,000
The joint
liability
guaranty
1 year No No
Sino International
May 20,
2017
10,000
November 22,
2017
10,000
The joint
liability
guaranty
1 year No No
Sino International
May 20,
2017
10,000
November 30,
2017
10,000
The joint
liability
guaranty
1 year No No
Sino International
March
31, 2016
8,400
March 31,
2017
8,400
The joint
liability
guaranty
30 months No No
Sino International
May 20,
2017
8,000
February 13,
2018
8,000
The joint
liability
guaranty
1 year No No
Sino International
May 20,
2017
20,000
December 20,
2017
20,000
The joint
liability
guaranty
1 year No No
Wuhan Commercial
Work Hospital
March
31, 2016
10,889.8
1
January 18,
2017
10,889.81
The joint
liability
guaranty
3 years No No
Sino Great Wall
Construction
March
29, 2018
3,500
September 30,
2018
3,500
The joint
liability
guaranty
1 year No No
报告期内审批对子公司担保额
度合计（B1 ）
1,000,000
报告期内对子公司担保
实际发生额合计（B2 ）
315,780
报告期末已审批的对子公司担
保额度合计（B3 ）
1,000,000
报告期末对子公司实际
担保余额合计（B4 ）
258,779.81
子公司对子公司的担保情况
担保对象名称
担保额
度相关
公告披
露日期
担保额
度
实际发生日期
实际担保
金额
担保类型 担保期
是否履
行完毕
是否为
关联方
担保
Total of Company’s guarantee （namely total of the large three aforementioned ）
Total of guarantee in the Period
（A1+B1+C1 ）
1,000,000
Total of actual guarantee
in
the Period （A2+B2+C2 ）
315,780
Total of guarantee at Period-end
（A3+B3+C3 ）
1,000,000
Total of actual guarantee
at period-end
（A4+B4+C4 ）
258,779.81 Sino Great Wall Co., Ltd. 2018 Annual Report
143
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 applicable
No 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 applicable
Nil
(2) Situation of Entrusted Loans
□ Applicable √ Not applicable
Nil
4. Other significant contract
Applicable √ Not applicable
Non 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, Sino Great Wall Co., Ltd. 2018 Annual Report
144
the safety management work of international projects and personnel in particular and kept improving its engineering construction
safety 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 all
the labor and employment systems to create a harmonious employment relationship and provide broad development room for
employees with effort while giving a help to sick and needy employees to promote the harmonious development between employees
and society; the Company took the initiative to build a healthy and positive enterprise culture and highlighted improving the staff
quality by organizing training activities in a variety of forms on demand and frequently holding badminton, table tennis, and
basketball games and staff sports meetings to enrich the spare life of employees; besides, the Company paid all the taxes and dues in
full amount and carefully performed the social responsibility by law.
2. Precise poverty alleviation social responsibility
(1) Targeted poverty alleviation program
There is no precise poverty alleviation carried out in the period and no follow plan either.
(2) Annual precision poverty alleviation
(3) Accuracy of poverty alleviation
Index Measurement
unit
Quantity / Status
I. General situation —— ——
II. Breakdown Input —— ——
1. Poverty alleviation by industrial
development
—— ——
2. Poverty alleviation by transfer employment —— ——
3. Poverty alleviation by relocation —— ——
4. Educational poverty alleviation —— ——
5. Health poverty alleviation —— ——
6. Ecological protection poverty alleviation —— ——
7. Guarantee of all the details —— ——
8. Social poverty alleviation —— ——
9. Other projects —— ——
III. Awards (Content and level) —— ——
（4 ）Subsequent targeted poverty alleviation program
3. Information on environmental protection
The Listed Company and its subsidiary whether belong to the key sewage units released from environmental protection department Sino Great Wall Co., Ltd. 2018 Annual Report
145
No
The Company and its subsidiaries do not belong to the key pollutant discharge units announced by the environmental protection
department.
XIX. Other material events
√ Applicable □ Not applicable
1. At the tenth meeting of the seventh Board of Directors and 2016 second extraordinary general meeting of shareholders held on July
7, 2016 and July 25, 2016 respectively, the Company deliberated and adopted a Proposal on Private Placement of A-share Stocks of
Sino Great Wall Co., Ltd. and planned to issue stocks to Sino Great Wall (Beijing) Investment Co., Ltd., Beijing Anben Medical
Investment Holding Co., Ltd. and Mr. Zheng Jihua to raise funds of RMB 2.5 billion. On October 14, 2016, China Securities
Regulatory Commission accepted the Company's application for private placement of stocks. On February 16, 2017, the Company
convened 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 of
funds raised to RMB 900 million. On March 22, 2017, the Company's application for private placement of A-share stocks was
approved by CSRC Issue Review Committee. On July 21, 2017, the Company received a Reply to Approval of Private Placement of
Stocks Given to Sino Great Wall Co., Ltd. (Zheng Jian Xu Ke [2017] No.1145) from China Securities Regulatory Commission. Due
to fluctuation in the capital market environment, the Company failed to complete matters of the private placement of stocks within 6
months after getting the approval for issue from China Securities Regulatory Commission (i.e., before January 4, 2018), hence the
reply of China Securities Regulatory Commission to the Company on the private placement of stocks became void and ineffective
spontaneously upon expiry (refer to the Company's Announcement 2016-052, 2016-065, 2017-009, 2017-010, and 2018-004 for
details).
2. The Company convened the twenty-eighth meeting of the seventh Board of Directors and 2018 first extraordinary general meeting
of shareholders on January 19, 2018 and March 13, 2018 respectively, deliberating and adopting the Proposal on the Company's
Financing Plan by Bond Issue and Proposal on the Company's Financing Plan by Issue of Accounts Receivable Bonds and approving
the 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 up
a 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 RMB
17.128 billion (refer to the Company's Announcement 2016-108 for details). After receiving the letter of acceptance, the Company
took 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 a
comprehensive evaluation on risks for implementation and financing risks in the international project and such risk factors as whether
the economic benefit can be as expected upon the completion of the project, the Company considered the project to have many
uncontrollable risks. To further prevent business risks and safeguard shareholders' rights and interests, the Company decided to waive
the 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 the
Company) won the bid for the "(Secondary) Construction of PPP Project of Jinsha County Hospital" beforehand in the investment
sum of about RMB 1,438,314,400 (refer to the Company's Announcement 2018-015). Due to a high uncertainty and risk in the return
on 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 Sino Great Wall Co., Ltd. 2018 Annual Report
146
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 the
Company by signing an Agreement of Equity Cooperation on Laos Vientiane Dongphosy Special Economic Zone Project, UPL Laos
entered into a franchise agreement for 50+40 years with Laos Government by cash contribution of USD 10 million and advance
payment of USD 20 million for project construction put together as the consideration of acquisition and took full charge of matters of
development of Dongphosy as the franchisee to Dongphosy Special Economic Zone (refer to the Company's Announcement
2018-020 and 021). On June 12, 2018, the Company agreed with UPL Malaysia on transfer of 10% of shares, hence the Company's
shareholding ratio rose to 40%. Whereas the Company is experiencing a financial difficulty at the moment and has failed to perform
duties of advance payment and construction in the equity agreement and duties in the loan agreement, the Malaysian shareholder
UPL Malaysia sent a latter in request for a return of equity and filed an arbitration to Hong Kong International Arbitration Centre on
the 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 by
OXLEYEMERALD (CAMBODIA) CO., LTD, and Sino International won the bid for the “Mekong River Villa Project” in
Cambodia, with the bid amount of USD 46.5 million (equivalent to RMB 295 million) (See the 2018-035 announcement of the
Company for details). As of the end of the reporting period, most of the on-site piling construction work has been completed, and the
relevant civil work has been in progress. As of the disclosure date of this report, both parties have agreed to terminate the contract
and 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 a
wholly-owned subsidiary--Sino Great Wall Hebei Xiong'an Engineering Co., Ltd. at Xiong'an New Area, which obtained a Business
License issued by Hebei Xiong'an New Area Public Service Bureau on February 24, 2018 (refer to the Company's Announcement
2018-031).
8. The Company convened the thirty-first meeting of the seventh Board of Directors and 2018 second extraordinary general meeting
of shareholders on March 24, 2018 and March 29, 2018 respectively, deliberating and adopting a Proposal on the Company's
Eligibility for Public Offering of A-share Convertible Bonds and Proposal on the Company's Plan for Issue of Short-term Financing
Bonds among other proposals concerned, according to which, the Company was approved to do public offering of A-share
convertible bonds in a period of 6 years to raise funds in the amount of not higher than RMB 850 million; the Company was
approved to apply for subscribing and issuing short-term financing bonds in the sum of not over RMB 600 million to National
Association of Financial Market Institutional Investors, wherein the period of single issue of short-term financing bonds must not be
over 1 year (refer to the Company's Announcement 2018-044, 046, 047, and 050). The Company suspended implementing the
preceding 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 meeting
of shareholders on June 4, 2018 and June 22, 2018 respectively, deliberating and adopting a Proposal on the Wholly-owned
Subsidiary Issuing USD Bonds Overseas. The Company was planned to issue bonds overseas in the amount of not higher than USD
300 million (including USD 300 million) and period of not longer than 5 years, wherein its new wholly-owned subsidiary Sino Great
Wall 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 financing
plan, 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 invest
and found "Yinglonghu Development Co., Ltd." (hereinafter referred to as the Project Company, whose final name is subject to the
name approved in industrial and commercial registration) with Chongqing Circum-Yinglonghu Industrial Co., Ltd. (hereinafter
referred to as Party A) and 7 village committees concerned at the project location (hereinafter referred to as Party C). The registered
capital of the Project Company was RMB 125 million, wherein Party A subscribed capital by earlier input of physical assets worth
RMB 23.75 million (subject to the audited amount) in the Yinglong Project, accounting for 19% of the registered capital; Sino Great
Wall contributed RMB 100 million by currency, accounting for 80% of the registered capital; Party C subscribed RMB 1.25 million Sino Great Wall Co., Ltd. 2018 Annual Report
147
by currency or contribution in kind, accounting for 1% of the registered capital (refer to the Company's Announcement 2018-104 and
105). 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 on
Adjusting the Company's Organizational Structure and agreed to adjust the operating organization and business structure of the
company'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 business
sector (division), smart housing and medical care business sector (division). After this adjustment, the organizational structure of the
company's headquarters is as follows: eight functional departments and offices, including the comprehensive office, the finance
department and the human resources department, as well as the above-mentioned four operating institutions (see the company's
announcement No 2019-028 for details).
XX. Significant event of subsidiary of the Company
√ Applicable □ Not applicable
In January 2018, the Company's wholly-owned subsidiary Sino Great Wall Intelligent Real Estate (Zhanjiang) Co., Ltd. obtained a
Reply to Sino Great Wall on EIA Report for Residential Industrialization Base Construction Project, which was expected to speed up
construction of the Company's fabricated intelligent property R&D center and production base project, facilitate the Company to get
involved in the fabricated intelligent property construction area, add a new profit growth point to the Company and show a positive
impact on its future operation and development. For more details, please refer to Announcement of V oluntary Information Disclosure
on the Company Getting an EIA Reply to Fabricated Intelligent Property R&D Center and Production Base Construction Project
disclosed by the Company on January 4, 2018 (refer to the Company's Announcement 2018-003).Due to the shortage of project funds
and the mortgage of production base land to China Bohai Bank, the project is currently at a standstill. Sino Great Wall Co., Ltd. 2018 Annual Report
148
VI. Change of share capital and shareholding of Principal
Shareholders
Ⅰ.Changes in share capital
1. Changes in share capital
Unit: Share
Before the change Increase/decrease （+ ，- ） After the Change
Amount Proporti
on
Share
allotme
nt
Bonus
shares
Capitali
zation
of
commo
n
reserve
fund
Other Subtotal
Quantit
y
Proport
ion
1.Shares with conditional
subscription
681,305
,436
40.12%
-242,44
8,369
-242,44
8,369
438,85
7,067
25.84%
3.Other domestic shares
681,305
,436
40.12%
-242,44
8,369
-242,44
8,369
438,85
7,067
25.84%
Including ：Domestic
Legal person shares
42,479,
672
2.50%
-42,479,
672
-42,479,
672
0 0.00%
Domestic natural person
shares
638,825
,764
37.62%
-199,96
8,697
-199,96
8,697
438,85
7,067
25.84%
II. Shares with
unconditional subscription
1,016,9
39,575
59.88%
242,448
,369
242,448
,369
1,259,3
87,944
74.16%
1.Common shares in RMB
753,136
,344
44.34%
242,448
,369
242,448
,369
995,58
4,713
58.62%
2.Foreign shares in
domestic market
263,803
,231
15.54%
263,80
3,231
15.53%
III. Total of capital shares
1,698,2
45,011
100.00
%
0 0
1,698,2
45,011
100.00
%
Reasons for share changed
□ Applicable √ Not applicable
Approval of Change of Shares
□ Applicable √ Not applicable Sino Great Wall Co., Ltd. 2018 Annual Report
149
Ownership transfer of share changes
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose for the company or need to disclose under requirement from security regulators
□ Applicable √ Not applicable
2. Change of shares with limited sales condition
√ Applicable □Not applicable
Unit: Share
Shareholder
Name
Initial
Restricted
Shares
Number of
Unrestricted
Shares This
Term
Number of
Increased
Restricted
Shares This
Term
Restricted
Shares in the
End of the
Term
Reason for
Restricted
Shares
Date of
Restriction
Removal
Chen Lue 525,344,262 525,344,262 0 0
The major
asset
restructuring
and the issue of
shares to
purchase assets
and raise
matching funds
October
24,2018
Chen Lue 55,995,934 0 0 55,995,934
The major
asset
restructuring
and the issue of
shares to
purchase assets
and raise
matching funds
--
Chen Lue 382,500 0 381,212,483 381,594,983
Executive
locking stock
Not applicable
He Feiyan 54,800,458 54,800,458 0 0
The major
asset
restructuring
and the issue of
shares to
purchase assets
and raise
October
24,2018 Sino Great Wall Co., Ltd. 2018 Annual Report
150
matching funds
He Sen 1,637,435 1,637,435 0 0
The major
asset
restructuring
and the issue of
shares to
purchase assets
and raise
matching funds
October
24,2018
Jiutai Fund －
Bank of
Communications
－Jiutai Huitong
No.2 specific
customer asset
management
plan
42,479,672 42,479,672 0 0
The major
asset
restructuring
and the issue of
shares to
purchase assets
and raise
matching funds
December 3,
2018
Li Erlong 619,050 0 0 619,050
Executive
locking stock
Not applicable
Yang Chunling 46,125 0 0 46,125
Executive
locking stock
Not applicable
Liang Rong 0 0 600,975 600,975
Executive
locking stock
Not applicable
Total 681,305,436 624,261,827 381,813,458 438,857,067 -- --
II. Issuing and listing
1. Explanation of the Situation of the Security Issue (No Preferred Shares) in the Report Period
□ Applicable √ Not applicable
2. Change of asset and liability structure caused by change of total capital shares and structure
□ Applicable √ Not applicable
3. About the existing employees’ shares
□Applicable√Not applicable Sino Great Wall Co., Ltd. 2018 Annual Report
151
III. Shareholders and actual controlling shareholder
1. Number of shareholders and shareholding
Unit: Share
Total number
of common
shareholders
at the end of
the
reporting
period
77,544
Total
shareholders at
the end of the
month from
the date of
disclosing the
annual report
78,961
The total number
of preferred shar
eholders voting r
ights restored at
period-end
(if any) (See
Notes 8)
0
Total preferred
shareholders at
the end of the
month from
the date of
disclosing the
annual report
(if any) (See
Notes 8)
0
Particulars about shares held above 5% by shareholders or top ten shareholders
Shareholders
Nature of
shareholder
Proport
ion of
shares
held
（% ）
Numbe
r of
shares
held at
period
-end
Change
s in
reportin
g
period
Amoun
t of
restrict
ed
shares
held
Amount
of
un-restri
cted
shares
held
Number of
share
pledged/frozen
Chen Lue
Domestic
Natural person
34.36%
583,45
4,556
0
437,59
0,917
145,863
,639
Pledge 583,454,462
Freeze 583,454,556
STYLE-SUCCE
SS LIMITED
Foreign legal
person
5.47%
92,970,
910
0 0
92,970,
910
Union Holdings
Co., Ltd.
Domestic Non-
State-owned
legal person
5.18%
87,935,
921
0 0
87,935,
921
He Feiyan
Domestic
Natural person
3.23%
54,800,
458
0 0
54,800,
458
Freeze 54,800,458
Jiutai Fund －
Bank of
Communications
－Jiutai Huitong
No.2 specific
customer asset
management
plan
Other 2.40%
40,696,
772
1,782,9
00
0
40,696,
772
Rich Crown
Investment Co.,
Foreign legal
person
1.37%
23,235,
313
0 0
23,235,
313
Sino Great Wall Co., Ltd. 2018 Annual Report
152
Ltd.
Qinghai Heyi
Industry
Development
Co., Ltd.
Domestic Non-
State-owned
legal person
0.79%
13,357,
084
0 0
13,357,
084
Pledge 13,357,084
Huang Huaian
Domestic
Natural person
0.72%
12,300,
000
379300
0
0
12,300,
000
Zhang Xubao
Domestic
Natural person
0.34%
5,852,8
20
-20133
80
0
5,852,8
20
Chen Lihong
Domestic
Natural person
0.28%
4,775,7
60
92300 0
4,775,7
60
Strategy investors or general legal
person becomes top 10 shareholders
due to rights issued (if
applicable)See Notes 3 ）
Not applicable
Explanation on associated
relationship among the aforesaid
shareholders
The largest shareholder of Mr. Chen Lue and the Fourth largest shareholder of Ms. He
Feiyan aforesaid are persons acting in concerted; The controlling shareholder of the
above-mentioned third shareholder Shenzhen Union Holdings Co.,Ltd. And Sixth
shareholder Rich Crown Investment Co., Ltd.. Is Union Development Group Ltd.; It is
unknown whether there is relationship between other shareholders and whether they are
persons taking concerted action specified in the Regulations on Disclosure of Information
about Change in Shareholding of Shareholders of Listed Companies.
Shareholding of top 10 shareholders of unrestricted shares
Name of the shareholder
Quantity of unrestricted shares held at the end of
the reporting period
Name of the shareholder
Chen Lue 145,863,639 Chen Lue 145,863,639
STYLE-SUCCESS LIMITED 92,970,910
STYLE-SUCC
ESS LIMITED
92,970,910
Union Holdings Co., Ltd. 87,935,921
Union
Holdings Co.,
Ltd.
87,935,921
He Feiyan 54,800,458 He Feiyan 54,800,458
Jiutai Fund －Bank of
Communications －Jiutai Huitong
No.2 specific customer asset
management plan
40,696,772
Jiutai Fund －
Bank of
Communicatio
ns －Jiutai
Huitong No.2
specific
customer asset
management
40,696,772 Sino Great Wall Co., Ltd. 2018 Annual Report
153
plan
Rich Crown Investment Co., Ltd. 23,235,313
Rich Crown
Investment
Co., Ltd.
23,235,313
Qinghai Heyi Industry Development
Co., Ltd.
13,357,084
Qinghai Heyi
Industry
Development
Co., Ltd.
13,357,084
Huang Huaian 12,300,000 Huang Huaian 12,300,000
Zhang Xubao 5,852,820 Zhang Xubao 5,852,820
Chen Lihong 4,775,760 Chen Lihong 4,775,760
Explanation on associated
relationship or consistent action
among the top 10 shareholders of
non-restricted negotiable shares and
that between the top 10 shareholders
of non-restricted negotiable shares
and top 10 shareholders
Mr. Chen Lue and Ms. He Feiyan are the unanimous persons; Union Development Group
Co., Ltd. is the controlling shareholder of the Above –mentioned shareholder Union
Holdings Co., Ltd. And Rich Grown Investment Co., Ltd., It is unknown whether there is
relationship between other shareholders and whether they are persons taking concerted
action specified in the Regulations on Disclosure of Information about Change in
Shareholding of Shareholders of Listed Companies.
Notes to the shareholders involved
in financing securities (if any) (See
Notes 4)
Not applicable
Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement
dealing in reporting period.
□ Yes √ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy –back
agreement dealing in reporting period.
2. Controlling shareholder
Nature of Controlling Shareholders: Natural Person Holding
Type of Controlling Shareholders: Natural Person
Name Nationality Whether to obtain the right of abode in other
countries or regions
Chen Lue China No
Main occupations and duties Board Chairman of the Company
Situation of domestic and abroad holding
listed companies in the reporting period.
Nil
Change of the actual controller in the reporting period
□ Applicable √ Not applicable
Nil Sino Great Wall Co., Ltd. 2018 Annual Report
154
3 ．Information about the controlling shareholder of the Company
Actual controller nature ：Domestic natural person
Actual controller type ：Natural person
Name of actual controllers Relationship with
the actual
controller
Nationality Whether to obtain the right of abode in other
countries or regions
Chen Lue Self China No
He Feiyan Acting in concert
(including agreed,
relative and same
control)
China No
He Sen Acting in concert
(including agreed,
relative and same
control)
China No
Main occupations and duties Chen Lue: Chairman. He Feiyan: assuming no duty in the Company. He Sen: Vice General
Manager of Sino Great Wall International Engineering Co., Ltd.
Situation of domestic and abroad
holding listed companies in the
past 10 years
The Company's actual controller and persons acting in concert did not hold other listed
companies, save the Company, in the past decade.
Changes of the actual controller in the reporting period
□Applicable √Not applicable
No Changes of the actual controller in the reporting period
Block Diagram of the ownership and control relations between the company and the actual controller
Sino Great Wall Co., Ltd. 2018 Annual Report
155
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 applicable
5. Situation of Share Limitation Reduction of Controlling Shareholders, Actual Controllers, Restructuring
Party and Other Commitment Subjects
□Applicable √Not applicable Sino Great Wall Co., Ltd. 2018 Annual Report
156
VII. Situation of the Preferred Shares
□ Applicable √ Not Applicable
The Company had no preferred shares in the reporting period Sino Great Wall Co., Ltd. 2018 Annual Report
157
VIII. Information about Directors, Supervisors and Senior Executives
I. Change in shares held by directors, supervisors and senior executives
Name Positions
Office
status
Sex Age
Starting
date of
tenure
Expiry
date of
tenure
Shares
held at
the
year-begi
n(share)
Amount
of shares
increased
at the
reporting
period(sh
are)
Amount
of shares
decreased
at the
reporting
period(sh
are)
Other
changes
increase/d
ecrease
Shares
held at
the
year-end(
share)
Chen Lue
Board
chairman
In office Male 48
2015 年
10 月 29
日
2021 年
11 月 14
日
583,454,5
56
0 0 0
583,454,5
56
Li Erlong
Vice
Board
chairman,
General
Manager
In office Male 43
2015 年
10 月 29
日
2021 年
11 月 14
日
825,400 0 0 -206,350
1
619,050
Liang
Rong
Vice
Board
chairman,
Deputy
General
Manager
In office Male 49
2015 年
10 月 29
日
2021 年
11 月 14
日
0 801,300 0 -200,325
2
600,975
He
Yanjun
Director In office Female 40
2018 年
11 月 15
日
2021 年
11 月 14
日
0 0 0 0 0
Peng
Lizhi
Director,
Executive
deputy
general
manager
In office Male 50
2018 年
11 月 15
日
2021 年
11 月 14
日
0 0 0 0 0
Liang
Yong
Director In office Male 58
2018 年
11 月 15
日
2021 年
11 月 14
日
0 0 0 0 0
Niu
Hongjun
Independ
ent
director
In office Male 46
2018 年
11 月 15
日
2021 年
11 月 14
日
0 0 0 0 0 Sino Great Wall Co., Ltd. 2018 Annual Report
158
Jiang
Chonggua
ng
Independ
ent
director
In office Male 43
2015 年
10 月 29
日
2021 年
11 月 14
日
0 0 0 0 0
Yu
Haichun
Independ
ent
director
In office Male 55
2018 年
11 月 15
日
2021 年
11 月 14
日
0 0 0 0 0
Wu
Xiaoming
Chairman
of the
superviso
ry
committe
e
In office Male 38
2018 年
11 月 15
日
2021 年
11 月 14
日
0 0 0 0 0
Pang
Aisheng
Superviso
r
In office Male 38
2018 年
11 月 15
日
2021 年
11 月 14
日
0 0 0 0 0
Qin
Yuanxin
Employee
superviso
r
In office Male 54
2018 年
11 月 15
日
2021 年
11 月 14
日
0 0 0 0 0
Yang
Chunling
Deputy
General
Manager,
CFO,
Secretary
to the
board of
directors
In office Female 47
2015 年
10 月 29
日
2021 年
11 月 14
日
61,500 0 0 0 61,500
Cui
Hongli
Deputy
General
Manager
In office Female 46
2017 年
07 月 06
日
2021 年
11 月 14
日
0 0 0 0 0
Fang
Xiangzho
ng
Deputy
General
Manager
In office Male 48
2018 年
11 月 15
日
2021 年
11 月 14
日
0 0 0 0 0
Zhang
Jian
Deputy
General
Manager
In office Male 60
2018 年
11 月 15
日
2021 年
11 月 14
日
0 0 0 0 0
Bai Bin Director Dimission Male 33
2015 年
10 月 29
日
2018 年
01 月 18
日
0 0 0 0 0
Tian Wei Director Dimission Male 60
2018 年
03 月 28
日
2018 年
11 月 14
日
0 0 0 0 0 Sino Great Wall Co., Ltd. 2018 Annual Report
159
Hu
Yongfeng
Director Dimission Male 56
2000 年
05 月 12
日
2018 年
11 月 14
日
0 0 0 0 0
Wang Lei Director Dimission Male 55
2015 年
10 月 29
日
2018 年
11 月 14
日
0 0 0 0 0
Tang
Jianxin
Independ
ent
Director
Dimission Male 53
2015 年
10 月 29
日
2018 年
11 月 14
日
0 0 0 0 0
Zhang
Yufeng
Independ
ent
Director
Dimission Male 55
2015 年
10 月 29
日
2018 年
11 月 14
日
0 0 0 0 0
Dong
Binggen
Chairman
of the
superviso
ry
committe
e
Dimission Male 69
2002 年
06 月 26
日
2018 年
06 月 21
日
0 0 0 0 0
Fang
Xianzhon
g
Chairman
of the
superviso
ry
committe
e
Dimission Male 48
2018 年
06 月 21
日
2018 年
11 月 14
日
0 0 0 0 0
Huang
Shengde
Superviso
r
Dimission Male 47
2015 年
10 月 29
日
2018 年
11 月 14
日
0 0 0 0 0
Wu
Xiaoming
Employee
Superviso
r
Dimission Male 38
2015 年
10 月 29
日
2018 年
11 月 14
日
0 0 0 0 0
Tian Wei
General
Manager
Dimission Male 60
2017 年
07 月 06
日
2018 年
11 月 14
日
0 0 0 0 0
Wang
Shaojun
Deputy
General
Manager
Dimission Male 62
2017 年
07 月 06
日
2018 年
11 月 14
日
0 0 0 0 0
Tang
Xianyong
CFO,
Deputy
General
Manager
Dimission Male 45
2017 年
07 月 06
日
2018 年
11 月 14
日
0 0 0 0 0
Total -- -- -- -- -- --
584,341,4
801,300 0 -406,675
584,736,0 Sino Great Wall Co., Ltd. 2018 Annual Report
160
56 81
注：1 系被广东省深圳市福田区人民法院强制卖出，详见 2019 年 1 月 5 日披露于巨潮资讯网上的《关于董事及高管所持公
司股份被强制执行的公告》 （公告编号：2019-001 ）
2 系被法院强制卖出
II. Change in shares held by directors, supervisors and senior executives
√ Applicable □Not applicable
Name Positions Types Date Reason
He Yanjun Director Engaged
November
15,2018
Elected as a non-independent director in the fourth
extraordinary shareholders’ general meeting of 2018
Peng Lizhi
Director,
Executive
Deputy
General
Manager
Engaged
November
15,2018
Elected as a non-independent director in the fourth
extraordinary shareholders’ general meeting of 2018,
Appointed as the Executive Deputy general manager of
the company by the 1st meeting of the Eighth Board of
Directors
Liang Yong Director Engaged
November
15,2018
Elected as a non-independent director in the fourth
extraordinary shareholders’ general meeting of 2018
Niu Hongjun
Independent
director
Engaged
November
15,2018
Elected as independent director in the fourth
extraordinary shareholders’ general meeting of 2018
Yu Haichun
Independent
director
Engaged
November
15,2018
Elected as a non-independent director in the fourth
extraordinary shareholders’ general meeting of 2018
Wu Xiaoming
Chairman of
the supervisory
committee
Engaged
November
15,2018
Elected as supervisor in the fourth extraordinary
shareholders’ general meeting of 2018;Elected as
Chairman of the supervisory committee of the
Company by the 1st meeting of the Eighth Board of
supervisors
Pang Aisheng Supervisor Engaged
November
15,2018
Elected as Supervisor in the fourth extraordinary
shareholders’ general meeting of 2018
Qin Yuanxin
Employee
supervisor
Engaged
October
29,2018
Elected as employee supervisor by the employee repres
entative assembly of the company on October 29, 2018
Li Erlong
General
Manager
Engaged
November
15,2018
Appointed general manager of the company at the first
meeting of the eighth board of directors
Fang
Xianzhong
Deputy
General
Manager
Engaged
November
15,2018
Appointed Deputy general manager of the company at
the first meeting of the eighth board of directors
Zhang Jian
Deputy
General
Engaged
November
15,2018
Appointed Deputy general manager of the company at
the first meeting of the eighth board of directors Sino Great Wall Co., Ltd. 2018 Annual Report
161
Manager
Yang Chunling
Deputy
General
Manager, CFO
Engaged
November
15,2018
Appointed Deputy general manager and CFO of the
company at the first meeting of the eighth board of
directors
Hu Yongfeng Director
Leave the
office while
office term
ends
November
14,2018
No longer assuming the duty of non-independent
director in the Company upon expiry of term
Tian Wei Director
Leave the
office while
office term
ends
November
14,2018
No longer assuming the duty of non-independent
director in the Company upon expiry of term
Wang Lei Director
Leave the
office while
office term
ends
November
14,2018
No longer assuming the duty of non-independent
director in the Company upon expiry of term
Tang Jianxin
Independent
director
Leave the
office while
office term
ends
November
14,2018
No longer assuming the duty of independent director in
the Company upon expiry of term
Zhang Yufeng
Independent
director
Leave the
office while
office term
ends
November
14,2018
No longer assuming the duty of independent director in
the Company upon expiry of term
Bai Bin Director
Leave the
office while
office term
ends
January
18,2018
Resigned due to personal reasons
Dong Binggen
Chairman of
the supervisory
committee
Leave the
office while
office term
ends
June 21,2018 Resigned due to personal reasons
Fang
Xianzhong
Chairman of
the supervisory
committee
Leave the
office while
office term
ends
November
14,2018
No longer assuming the duty of Chairman of the
supervisory committee in the Company upon expiry of
term
Huang
Desheng
Supervisor
Leave the
office while
office term
ends
November
14,2018
No longer assuming the duty of Supervisor in the
Company upon expiry of term
Wu Xiaoming
Employee Leave the November No longer assuming the duty of Employee supervisor in Sino Great Wall Co., Ltd. 2018 Annual Report
162
supervisor office while
office term
ends
14,2018 the Company upon expiry of term
Tang Xianyong CFO
Leave the
office while
office term
ends
November
14,2018
No longer assuming the duty of CFO in the Company
upon expiry of term
Tian Wei
General
Manager
Leave the
office while
office term
ends
November
14,2018
No longer assuming the duty of General Manager in the
Company upon expiry of term
Wang Shaojun
Deputy
General
Manager
Leave the
office while
office term
ends
November
14,2018
No longer assuming the duty of Deputy General
Manager in the Company upon expiry of term
III. Posts holding
Main working experience of current directors, supervisors and senior management staff
(1) Director
Chen Lue, male, Chinese nationality, no overseas permanent residence, born in April 1970, currently the doctoral students of
accounting 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 and
Nutritional Engineering of China Agricultural University, senior engineer. Since October 2001, he has been the director of Sino Great
wall 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, he
has 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 Shandong
Building Materials Engineering College, MBA of Tsinghua University. He had served as the assistant to director of the National
Building 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; since
November 2007, he has been the manager of Beijing Sino Great Wall Decoration Design Co., Ltd.; since June 2014, he has been the
director of Sino Great Wall Internatioanal Engineering Co., Ltd., Since September 2015, he has been the director of China Industry
Investment Co., Ltd., since July 2016, he has been the chairman of Sino Great Wall Internatioanal Engineering Co., Ltd., Since
August 2016, he has been the executive director of Sino Great Wall Southwest Construction Engineering Co., Ltd., Since November
2016, he has been the chairman of Sino Great Wall Jianye Engineering Co., Ltd., since December 2016, he has been the General
Manger of Sino Great Wall Development (Hengqin) Co., Ltd., From October 2015 to June 2017, he has been the Director and Genral
Manger of the Company, Since September 2017, he has been the executive director and General Manger of Sino Great Wall
Southwest Engineering Consulting Co . , Ltd . Sino Great Wall Southwest Commercial Trade Co., Ltd. And Sino Great Wall
Southwest Technology Co., Ltd., since February 2018, he has been the executive director of Sino Great Wall Hebei Xiongan
Engineering Co., Ltd.,From July 2017 to November 2018, he has been the Vice Chairman and Deputy General Manger of the
Company. 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 Sino Great Wall Co., Ltd. 2018 Annual Report
163
engineering major of Shantou University and MBA of Senior Management of Nankai University, is a senior engineer. He had severed
as Assistant Engineer of Zhuhai Xinzhou Real Estate Co., Ltd, Quantity Surveyor of Japan Shimizu Construction Co., Ltd, and
Project Manager of Shenzhen Great Wall Furniture Decoration Engineering Co., Ltd. From April 2003 to June 2016, he has been the
Executive General Manger of Sino Great Wall Construction Engineering Co., Ltd., since June 2014, he has been the Director Sino
Great Wall Construction Engineering Co., Ltd., since Novemer 2014, he has been the Diretor of Sino Great Wall International
Engineering(Macao) Co., Ltd., From October 2015 to June 2017, he has been the director and Deputy General Manger of the
Company, since August 2017, he has been the Chairman of Sino Great Wall Group Co., Ltd., Since September 2017, he has been the
Chairman of Kunming Sino Shengong Forestry Development Co., Ltd.,since October 2017, he has been the General Manager of Sino
Great Wall Guangxia (Wuhan )Medical Development Co., Ltd., since Decemer 2017, he has been the Chairman of Sino Great Wall
Health 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 Vice
Chairman 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 Estate
Co., Ltd., Chairman and a director of Alor Vista Development Sdn Bhd (Penang Bukit Mertajam Project Company) since September
2017, 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 Sino
Great Wall Health Management (Jiangsu) Co., Ltd. and a director of Weifang Sino Great Wall Health Development Co., Ltd. since
December 2017, assumed a director of Cenang Resort Sdn Bhd (Cenang Company) and Chairman of Sino Great Wall Technology
Development Co., Ltd. since January 2018, assumed the Chairman of Renhuai Sino Great Wall Wine Culture Expo Park
Development Co., Ltd. since March 2018, assumed a director of Aofa Investment Co., Ltd. and Weifang Sino Great Wall Health Care
Industry Co., Ltd. since August 2018, and assumed a director of Weifang Binhai Sino Bincheng Hospital Co., Ltd. since September
2018.
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 assumed
the Legal Secretary and Manager Assistant of Office of the President, UDC Group Co., Ltd. from August 2009 to February 2011; she
has assumed the Legal Manager of UDC Holding Co., Ltd. since April 2015. Since November 2018, she has assumed a director of
the Company.
Peng Lizhi,Male , Chinese nationality, no overseas permanent residence, born in September 1968,He is an MBA master, national
highway 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 & Bridge
North China Engineering Co., Ltd.; since June 2016, he has assumed Chairman and General Manager of Sino Great Wall
Infrastructure 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 from
Ansteel 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. From
May 2008 to July 2009, he assumed the General Project Manager of Tianjin Haishun Real Estate Development Co., Ltd.; from July
2009 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 General
Manager of Nanyang Feifan Real Estate Co., Ltd.; from August 2014 to March 2016, he assumed General Manager Assistant of
CITIC Guoan Investment (Shanghai) Company; from April 2016 to March 2019, he assumed Vice General Manager of Real Estate Sino Great Wall Co., Ltd. 2018 Annual Report
164
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 public
accountant in both China and Australia with a bachelor's degree awarded by School of Economic & Management, Shijiazhuang
Tiedao University, a master's degree awarded by Chinese Academy of Fiscal Sciences, Ministry of Finance, and a doctoral degree of
management awarded by Renmin Business School; since 2008, he has been a master supervisor at Business School of Beijing
Technology and Business University, working on specialized accountancy teaching and research; since 2009, he has been hired as a
financial consultant by Ministry of Commerce of the People's Republic of China; since January 2015, he has assumed an independent
director of Jingwei Textile Machinery; from June 2016 to February 2018, he assumed an independent director of Cloud Live Tech
Group; 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 President
and Secretary-General of China Insurance Innovation Research Institute, Executive Director of Health China Strategy Research
Center, Chinese Academy of Social Sciences, Deputy Director of Financial Technology Committee, Asian Financial Cooperation
Association, a consultant to Insurance Society of China and an independent director of Dezhan Big Health Co., Ltd. He is a senior
economist 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 civil
and commercial law awarded by China University of Political Science and Law. He used to be an
assistant-regimental-commander-level instructor of PLA Dalian Naval Academy, lawyer of Liaoning Fada Law Firm, lawyer and
partner of Beijing King & Capital Law Firm, secretary of the party committee and vice president of School of Insurance and
Economics at UIBE. From March 2013 to September 2018, he assumed secretary of the party committee and vice president of UIBE
Law School. Since September 2018, he has assumed a professor of UIBE Law School and Director of Research Center for Insurance
Policies and Laws. Since November 2018, he has assumed an independent director of the Company.
2. Supervisors
Wu Xiaoming, Male, Chinese nationality, no overseas permanent residence, born in November 1980, He has a bachelor's degree of
law 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 present
Quality and Technology Supervision Bureau of Haizhu District, Guangzhou). Since December 2008, he has assumed General
Manager Assistant and Legal Manager of Sino Great Wall International Engineering Co., Ltd. Since June 2014, he has assumed
Chairman of Board of Supervisors of Sino Great Wall International Engineering Co., Ltd.; from October 2015 to November 2018, he
assumed the Employee Supervisor of the Company; since November 2018, he has assumed Chairman of the Board of Supervisors of
the Company.
Pang Aisheng, Male, Chinese nationality, no overseas permanent residence, born in May 1981,He has a bachelor's degree awarded by
Guangdong V ocational Normal School (presently known as Guangdong Polytechnic Normal University) and MBA degree of senior
executives 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 of
East 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, graduating
from Shandong Construction Engineering School with a bachelor's degree of engineering management. He used to be Technical
Director and Production Manager of Tongcheng Sixing Construction Installation Engineering Co., Ltd.; from March 1996 to
December 2004, he assumed the Production Manager and Project Manager of Anhui First Construction Engineering Co., Ltd.; since
March 2005, he has assumed Project Manager, Security Inspection Manager, Vice General Manager of Engineering Management
Center, Vice General Manager and Supervisor of Clearing Center of Sino Great Wall International Engineering Co., Ltd. Since March
2005, he has assumed Standing Vice Manager of SPV Management Center of Sino Great Wall Co., Ltd. Since November 2018, he Sino Great Wall Co., Ltd. 2018 Annual Report
165
has assumed the Employee Supervisor of the Company.
3. Senior management personnel
Refer 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, master
in 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 of
Henan Yuhua New Material Co., Ltd. Since September 2015, she has been the director of Sino Cubic Investment Co., Ltd; since
March 2014, she has been the secretary of the board of directors of Sino Great Wall International Engineering Co., Ltd; From
October 2015 to November 2018,, she has been the secretary of the board of directors of the company.Since November 2014, she has
been 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 University
of Finance and Economics, CPA. She had been served in China Luoyang Float Glass Group Co.,Ltd, Beijing Jiayou Real Estate
Development Group Co.,Ltd and Yuancheng Industrial Group Co.,Ltd. Since July 2011, she has been the investment and finance
department manager, CFO of Sino Great Wall International Engineering Co., Ltd; From October 2015 to June 2017, she has been the
company’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 degree
awarded by Guanghua School of Management, Peking University. He used to assume an office staff of Beijing Jingdong Auto
Maintenance 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 to
December 2003, he assumed General Manager of Beijing Haiweixin Technology Co., Ltd.; from January 2004 to June 2010, he
assumed General Manager of Beijing Haiwei Xinda Technology Co., Ltd.; since July 2010, he has assumed Vice General Manager of
Sino Great Wall International Engineering Co., Ltd.; from June to November 2018, he assumed Chairman of Board of Supervisors of
the 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 China
Communist Youth League with a specialized associate degree. He used to assume a company commander of Headquarters of
Kunming Military Command, a section chief of Qingdao Municipal People's Government, General Manager of Government Offices
Administration Trading Company, General Manager of Qingdao Shopping Mall of Beijing Chengxiang (a listed company), General
Manager 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, he
assumed Vice General Manager of Sino Great Wall Medical Investment Management Company; since April 2018, he has assumed
Vice General Manager of Sino Great Wall Real Estate Company; since November 2018, he has assumed Vice General Manager of
Sino Great Wall Co., Ltd.
Office taking in shareholder companies
□ Applicable √Not applicable
Offices taken in other organizations
√Applicable □Not applicable
Name Name of other units Position Office term
start from
Office term
ended
Whether
receiving
remuneration
from other units
or not
Chen Lue Sino Great Wall International Engineering Board October No Sino Great Wall Co., Ltd. 2018 Annual Report
166
Co., Ltd. chairman 17,2001
Chen Lue Sino Great Wall Investment (Beijing) Co.,
Ltd.
Executive
director
April 22,
2014
No
Chen Lue China Industry Investment Co., Ltd. Board
chairman
September
14,2015
No
Chen Lue Shenzhen Sino Dalue Investment Co.,Ltd. Executive
director
February
25,2015
No
Chen Lue Zhongshang Sino Aerospace Technology
(Beijing) Co., Ltd.
Board
chairman
January
24,2017
No
Li Erlong China Industry Investment Co., Ltd. Director September
14,2015
No
Niu Hongjun Business Schooll of Beijing Technology
and Business University
Master
Supervisor
September
1,2008
Yes
Niu Hongjun Ministry of Commerce of the people's
republic of China
Financial
advisory
January
15,2009
Yes
Niu Hongjun Jingwei Textile Machinery Co., Ltd. Independen
t Director
January
13,2015
Yes
Jiang
Chongguang
Dezhan Healthcare Co., Ltd. Independen
t Director
October
25,2016
October
25,2021
Yes
Jiang
Chongguang
CASS Healthy China Strategic Research
Center.
Executive
director
May 1,2015 May 1,2025 Yes
Jiang
Chongguang
IVY Capital Senior
economist
June 1,2015 June 1,2025 Yes
Jiang
Chongguang
Insurance Society of China Counselor June 15,2016 June 15,2021 Yes
Jiang
Chongguang
China Insurance Innovation Research
Institute
Executive
vice
President
and general
secretary
April 25,2016 April 25,2026 Yes
Jiang
Chongguang
Asian Finance Association Financial
Science and Technology Committee
Associate
director
February
1,2018
March 1,2023 No
Yu Haichun School of Law,UIBE Professor,
Director of
Insurance
Industry
Policy and
Law
Research
Center
September
13,2018
Yes Sino Great Wall Co., Ltd. 2018 Annual Report
167
Yang
Chunling
China Industry Investment Co., Ltd. Director September
1,2015
No
Punishments to the current and leaving board directors, supervisors and senior managers during the report period by securities
regulators 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 senior
executives
The Company's remuneration and appraisal committee formulates the remuneration plan, which is implemented after the approval by
the board of directors or after review and approval by the shareholders' general meeting; and it performances the evaluation of
directors and senior management personnel according to the performance evaluation standards and procedures; meanwhile, the
Company proposes the amount of remuneration and reward methods for directors, supervisors and senior managers according to the
post performance evaluation and salary distribution policy, which shall be approved by voting and finally be reported to the board of
directors for approval and implementation.
The Company formulates the remuneration plans or schemes based on the main scope, responsibilities, and importance of directors
and senior management positions and the remuneration levels of other related companies, and it pays the remuneration based on the
post performance evaluation results and the salary allocation policy.
Remuneration to directors, supervisors and senior executives in the reporting period
Unit: 10,000 Yuan
Name Positions Sex Age Office status
Total
remuneration
received from
the shareholder
Remuneration
actually
receives at the
end of the
reporting
period
Chen Lue
Board
Chairman
Male 48 In office 36.6 No
Li Erlong
Vice Board
Chairman,
General
Manager
Male 43 In office 52.15 No
Liang Rong
Vice Board
Chairman,
Deputy General
Manger
Male 49 In office 43.2 No
He Yanjun Director Female 40 In office 0 Yes
Peng Lizhi
Director,
Excutive
Deputy General
Male 50 In office 43.46 No Sino Great Wall Co., Ltd. 2018 Annual Report
168
Manager
Liang Yong Director Male 58 In office 0.33 No
Niu Hongjun
Independent
Director
Male 46 In office 1.37 No
Jiang
Chongguang
Independent
Director
Male 43 In office 11 No
Yu Haichun
Independent
Director
Male 55 In office 1.37 No
Wu Xiaoming
Chairman of
the supervisory
committee
Male 38 In office 1.76 No
Pang Aisheng Supervisor Male 38 In office 3.12 No
Qin Yuanxin
Employees
supervisor
Male 54 In office 1.24 No
Yang Chunling
Deputy General
Manager, CFO,
Secretary to the
board of
directors
Female 47 In office 22.8 No
Cui Hongli
Deputy General
Manager
Female 46 In office 22.8 No
Fang
Xianzhong
Deputy General
Manager
Male 48 In office 2.1 No
Zhang Jian
Deputy General
Manager
Male 60 In office 7.31 No
Hu Yongfeng Director Male 56 Dimission 0 Yes
Wang Lei Director Male 55 Dimission 0 No
Bai Bin Director Male 33 Dimission 0 No
Tian Wei Director Male 60 Dimission 0 No
Tang Jianxin
Independent
Director
Male 53 Dimission 9.63 No
Zhang Yufeng
Independent
Director
Male 55 Dimission 9.63 No
Dong Binggen
Chairman of
the supervisory
committee
Male 69 Dimission 0 Yes
Fang
Xianzhong
Chairman of
the supervisory
committee
Male 48 Dimission 6.3 No Sino Great Wall Co., Ltd. 2018 Annual Report
169
Huang Shengde Supervisor Male 47 Dimission 12.68 No
Wu Xiaoming
Employees
supervisor
Male 38 Dimission 12.34 No
Tian Wei
General
Manager
Male 60 Dimission 77.53 No
Wang Shaojun
Deputy General
Manager
Male 62 Dimission 52.5 No
Tang Xianyong
Deputy Genral
Manager, CFO
Male 45 Dimission 35 No
Total -- -- -- -- 466.22 --
Incentive equity to directors, supervisors or/and senior executives in the reporting period
□ Applicable √Not applicable
V. Particulars about employees.
1. Number of staff, professional structure and educational background
Number of in-service staff of the parent company(person) 59
Number of in-service staff of the main subsidiaries(person) 762
The total number of the in-service staff(person) 821
The total number of staff receiving remuneration in the current
period(person)
821
Retired staff with charges paid by the parent company and
main subsidiaries (person)
17
Professional
Classified according by Professions Number of persons （person ）
Production 251
Sales 16
Technical 331
Financial 40
Administrative 61
Other 122
Total 821
Education
Classified according by Professions Number of persons （person ）
Master’s Degree and bove 52
Bachelor 366 Sino Great Wall Co., Ltd. 2018 Annual Report
170
College diploma 270
Other 133
Total 821
2. Remuneration policies
Based on the principle of “external fairness and internal fairness”, the Company combines the company’s
overall strategic plan to provide competitive remuneration and benefits in the industry. Different post has different
remuneration, and the remuneration will be raised upon the excellent performance, and the staff remuneration
level 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 a
training system where a priority is given to specialized quality while other professional qualities aid. To be
specific, the Company explores and trains excellent internal lecturers and develops a variety of training
coursewares suitable to its own enterprise culture. The Company hires external consultants and experts in the
industry to impart and communicate new techniques and management skills. The Company implements its
training at three levels including project, department and company and fulfills a full coverage of its training work
by an on-line school, planned to hit a high rate of fulfillment, promote comprehensive qualities of employees step
by step and supplement sustainable and applicable talents to its following sound development.
4.Outsourcing situation
□ Applicable √ Not Applicable Sino Great Wall Co., Ltd. 2018 Annual Report
171
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 China
Securities Regulatory Commission.
In the report period, the Company kept improving its standard operation and management system, optimized its management
structure, further standardized its operation and raised its management standard by abiding by Company Law, Securities Law, Stock
Listing Rules of the Shenzhen Stock Exchange, Code of Corporate Governance for Listed Companies and relevant laws and
regulations 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 China
Securities 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 to
shareholders by law in all respects, convene and hold a General Meeting of Shareholders in accordance with provisions and
requirements in the Rules for General Meeting of Shareholders of Listed Companies and Rules of Procedure at General Meeting of
Shareholders among others, and ensure that all the shareholders, minority shareholders in particular, were granted with the right to be
informed and capacity to exercise their rights. In the report period, the Company complied with relevant provisions in the Company
Law and Articles of Association and had the witness of a lawyer in convening each General Meeting of Shareholders and ensuring
sufficient number of shareholders with sufficient number of shares attended each meeting. Shareholders attending each meeting can
exercise their rights fully in principle of independence.
2. Relationship between holding shareholders and the listed company: holding shareholders behaved and conducted no act that
directly or indirectly intervened in the Company's decision-making and business activities by bypassing the General Meeting of
Shareholders; the Company was independent from holding shareholders regarding personnel, assets, finance, institution and business
and the Company's Board of Directors and Board of Supervisors can make independent operation. The Company was independent
from 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 to
the company for the decision-making related issues. Each special committee has operated according to their work responsibilities and
procedure rules, made research and examination for the relative business and major issues of the company, and expressed the
professional opinions in the Board of Directors to offer support and advice for the scientific decision-making of the Board and ensure
the Board’s work more scientific and efficient. Also, the organization of the Board of Directors is in line with the requirement of laws
and regulations, and the independent directors play an important role in the corporate decision-making. So, the company attaches
importance to the function of the independent directors. In the company’s management, the independent directors make careful
review 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 Company
complied with the requirements of laws and regulations. The Supervisory Committee of the Company formulated the Rules of
Procedure of the Supervisory Committee. The supervisors of the Company were able to perform their duties seriously, take the
attitude of being responsible for all shareholders and supervise the legality and regulation conformity of the Company's finance and
the 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 in
relevant laws and regulations as well as System for Management of Information Disclosure. The Company enhanced communication Sino Great Wall Co., Ltd. 2018 Annual Report
172
with investors in a variety of channels to promote their understanding and recognition of the Company. The Company took such
communication measures as carefully handling the visit and consultation of each shareholder and duly giving a reply to questions
raised by investors at the interactive platform to ensure that all the shareholders were granted with a fair opportunity to acquire
information and guarantee their right to be informed.
6. Regarding performance assessment and incentive & constraint mechanisms: in the report period, the Company kept improving the
performance evaluation indicator and incentive & constraint mechanisms for senior executives under the instruction of the
Compensation and Evaluation Committee of Board of Directors, wherein their compensation was combined with the Company's
business performance and total development plan and personal working performance, an annual integrated quantitative and
qualitative evaluation was organized on senior executives' fulfillment of duties and senior executives were hired in an open and
transparent way and in compliance with laws and regulations.
7. Regarding stakeholders: the Company fully respected and safeguarded legitimate rights and interests of stakeholders, implemented
a benefit coordination and balance among society, shareholders, the Company, employees and other parties, and enhanced
communication 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 of
CSRC,
□ Yes √ No
There exist no difference in compliance with the corporate governance , the PRC Company Law and the relevant provisions of
CSRC.
II. Independence and Completeness in business, personnel , assets, organization and finance
The 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 operating
capacity.
1. Business: the Company had independent decision-making and execution agencies, built independent business
departments 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 fairness
with holding shareholders, actual controllers and other companies under control.
2.Personnel ： The company has a completely independent personnel management and salary system. The company’s
senior manager personnel all are work in the company and receiving remunerations, and they do not hold any
other posts except the post of director or receive remunerations in the controlling shareholder and its affiliated
enterprises. The company's financial staffs do not concurrently hold posts in the controlling shareholder and its
affiliated enterprises.
3. Assets: the Company owned independent sites for office and business operation and other assets, possessed
production systems pertaining to production and operation, boasted equipment related to production and operation
by law and had independent purchase and sales systems and supporting facilities; the Company's holding
shareholders 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 out
of its own development, where departments with specific duties defined worked together well and agencies were
fully independent from each other in operation. Meanwhile, the Company set an independent decision-making
agency, office agency and site for production and operation management and the setting of agencies and
production 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 accounting
department, full-time accounting personnel and independent accounting system, being able to make financial Sino Great Wall Co., Ltd. 2018 Annual Report
173
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 its
affiliated enterprises does not exist.
III. Horizontal Competitions
□Applicable√Not applicable
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting
Period
1. Annual General Meeting
Sessions Type
Investor
participation ratio
Meeting Date Disclosure date
Disclosure
index
The first
provisional
shareholders’
General meeting in
2018
Provisional
shareholders’
General Meeting
51.78% March 28,2018 March 29,2018
The first
provisional
shareholders’
General meeting
in 2018
(No.2018-050)
published on
Juchao Website
（http://www.cnin
fo.com.cn ）on
March 29,2018
The Second
provisional
shareholders’
General meeting in
2018
Provisional
shareholders’
General Meeting
38.84% April 9,2018 April 10,2018
The Second
provisional
shareholders’
General meeting
in 2018
(No.2018-053)
published on
Juchao Website
（http://www.cnin
fo.com.cn ）on
April 10,2018
Annual General
Meeting of 2017
Annual General
Meeting
34.50% May 16,2018 May 17,2018
Annual General
Meeting of 2017
(No.2018-071)
published on
Juchao Website
（http://www.cnin Sino Great Wall Co., Ltd. 2018 Annual Report
174
fo.com.cn ） on May
17,2018
The Third
provisional
shareholders’
General meeting in
2018
Provisional
shareholders’
General Meeting
34.50% June 21,2018 June 22,2018
The Third
provisional
shareholders’
General meeting
in 2018
(No.2018-081)
published on
Juchao Website
（http://www.cnin
fo.com.cn ） on June
22,2018
The Fourth
provisional
shareholders’
General meeting in
2018
Provisional
shareholders’
General Meeting
39.64%
November
15,2018
November
16,2018
The Fourth
provisional
shareholders’
General meeting
in 2018
(No.2018-147)
published on
Juchao Website
（http://www.cnin
fo.com.cn ）on
November
16,2018
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √Not applicable
V. Responsibility performance of independent directors in report period
1. The attending of independent directors to board meetings and shareholders’ general meeting
The attending of independent directors
Independent
Directors
本报告期应
参加董事会
次数
现场出席董
事会次数
以通讯方式
参加董事会
次数
委托出席董
事会次数
缺席董事会
次数
是否连续两
次未亲自参
加董事会会
议
出席股东大
会次数
Tang Jianxin 12 1 11 0 0 否 1
Zhang Yufeng 12 2 9 0 1 否 0
Jiang 14 3 11 0 0 否 2 Sino Great Wall Co., Ltd. 2018 Annual Report
175
Chongguang
Niu Hongjun 2 1 1 0 0 否 1
Yu Haichun 2 1 1 0 0 否 1
Notes to failure to personally attend Board Meetings Successively Twice
2.Objection of independent directors on some relevant issues
Objection of independent directors on some relevant issues
□ Yes √No
Nil
3. Other notes to duty performance of independent directors
Has an independent director’s advice to the Company been accepted
√Yes □ No
Explanation 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 Companies
on Standardized Operation, Articles of Association, and Working System of Independent Directors among other provisions, the
Company's independent directors held an responsible attitude towards the Company and shareholders herein, faithfully performed
their duties in due diligence, took the initiative to attend relevant meetings, carefully deliberated all the proposals, objectively
expressed their own opinions and viewpoints, and conducted a thorough survey on the Company with effort to understand the
Company's production and operation, personnel management, financial management, and internal control among other information
and 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, hiring
of an auditing agency, use of funds raised, profit distribution plans, election of the Board of Directors, alteration of promised matters
and related transactions and other matters. They carefully debriefed operation from the management and communicated with certified
public accountants responsible for the annual audit while preparing, examining and disclosing regular reports. By rich specialized
knowledge and industrial experience, they played a positive part in improving the Company's supervision mechanism, promoting the
Board of Directors to make scientific decisions and standardize operation, and safeguarding rights and interests of minority
shareholders 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 Reporting
Period
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, the
committees 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 during
Audit Committee gave a full play to its supervision and auditing functions. In the report period, it deliberated such matters as the
Company's financial information, internal control, substitution of an accounting firm, and relevant reports on preservation of funds
raised and formed and submitted resolutions to the Board of Directors; while auditing annual financial reports, it meticulously
reviewed the Company's financial audit reports and delivered audit opinions, communicated with certified public accountants for the Sino Great Wall Co., Ltd. 2018 Annual Report
176
annual audit through a communication meeting and other forms, and urged the progress of the audit work to guarantee the success of
the annual audit work.
2. Fulfillment of Duties of the Compensation and Evaluation Committee of the Board of Directors
Compensation and Evaluation Committee kept improving the Company's compensation policy and evaluation mechanism and took
the initiative to promote deepening the management reform. In the report period, the Compensation and Evaluation Committee
convened meetings, supervised and assessed standards for fulfillment of performance and assessment on directors and senior
executives and implementation of the standards, carried out appointment and evaluation procedures for directors and senior
executives and examined the annual basic pay of each senior executive.
3. Fulfillment of duties of Strategy Committee
Strategy Committee helped the Company determine development plans, improve investment decision-making procedures, make
more scientific decisions, and improve its management structure by studying and offering advice for the Company's longterm
development strategies and major investment decisions. In the report period, the Strategy Committee convened a total of five
meetings, deliberating and adopting the Company's proposals regarding foreign investment, financing planning, etc.
4.Fulfillment of duties of Nomination Committee of Board of Directors
Nomination Committee devoted itself in due diligence, offering an instruction on improving the leader assessment mechanism and
talent promotion system and enhancing back-up talent reserves among others and keeping studying and following the Company's
needs for senior executives. In the report period, the Nomination Committee convened meetings to examine qualifications of general
manager 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 √No
The 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 annual
responsibility appraisal agreement for the evaluation of the company’s senior management personnel which specified the KPI and
evaluation method with methods related to the evaluation results. During the reporting period, the companies had conformed to the
measures of the targeted responsibility system to assess and evaluate the senior management personnel performances, which
presented 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 Sino Great Wall Co., Ltd. 2018 Annual Report
177
personnel signed the memorandum. Violation of the provisions of Articles 6 and 10 of the "Regulations on the Establishment of
Insider Information Registration Management System for Listed Companies". 4. The management of raised funds is not
standardized. (1) The excess use of the raised funds was not corrected and was not disclosed in time. The 35th meeting of the 7th
Board of Directors and the 23rd meeting of the 7th Board of Supervisors reviewed and approved the Proposal on Temporarily
Replenishing Working Capital with Partially Raised Funds, and agreed to use the idle raised funds of 139 million yuan.
Temporary replenishment of working capital. Upon inspection, the company's fund-raising account was deducted by the court on
October 25, 2018 by more than 5.1 million yuan, resulting in the company's actual use of supplementary liquidity totaling more
than the approved supplementary liquidity quota of 327,300 yuan. (2) The management system for raised funds is not perfect.
The company's "Management System for the Use of Raised Funds" does not involve the accountability mechanism for the use of
raised funds in violation of regulations. The regulations on the approval authority for the use of raised funds, decision-making
procedures, and risk control measures are not clear, and are not in compliance with the "Guidelines for the Supervision of Listed
Companies No. 2 - - Article 3 of the Regulation Requirements for the Management and Use of Funds Raised by Listed
Companies. 5. Disposal of company assets and subsidiaries' equity without approval. (1) On December 14, 2017, the company's
wholly-owned subsidiary Shenzhou Great Wall International Engineering Co., Ltd. (International Engineering Company) and
Shenzhen Qianhai Shijie Commercial Factoring Co., Ltd. signed the “Non-Recourse Domestic Factoring Business Contract”. 》,
for the international engineering company's accounts receivable for non-recourse factoring business. According to the provisions
of the “Articles of Association”, the processing of the factoring business belongs to the decision-making authority of the board of
directors of the company. When the company handled the factoring business, it was not reviewed and approved by the company's
board of directors. (2) On November 20, 2018, the general manager's office meeting of the company made a transfer of 60% of
the shares of Shenzhou Great Wall Construction Engineering Co., Ltd. (hereinafter referred to as Shenzhou Jianye) (accounting
for 100% of the shares held by the company). Decide. On November 27, 2018, the company signed an equity transfer agreement
with the counterparty. According to the company's articles of association (Article 112) If the transaction occurred in the company
belongs to any of the following circumstances, the board of directors shall review: ..., (2) the transaction target (such as equity)
accounted for the relevant business income in the most recent fiscal year. The company's most recent audited annual audited
operating income of more than 10%, and the absolute amount exceeds 10 million yuan;). The company transferred the equity of
Shenzhou Jianye without the approval of the board of directors of the company. 6. The fund management is not standardized. (1)
Providing financial assistance to the outside without approval. From 2016 to 2017, the company's wholly-owned subsidiary
Shenzhou Great Wall International Engineering Co., Ltd. and Beijing Anlu Lai Sen Building Materials Co., Ltd., Beijing Hongda
Guangfa Construction Labor Co., Ltd., Beijing Puya Building Decoration Engineering Co., Ltd. Payment business. The above
matters were not approved by the company's board of directors. The company held the sixth meeting of the eighth board of
directors on April 12, 2019, and reviewed and approved the “Proposal on Supplementary Review of External Financial
Provisions”. (2), without approval, handling financing business. In 2018, the company conducts financing activities with
financial institutions, non-financial institutions and individuals without the approval of the company's normal approval process.
(3) Losing control over some bank deposits. During the inspection of bank deposits and capital flows at the end of the period, it
was found that the company was unable to provide bank balances on the balance sheet date of some bank accounts and bank
statements during the audit period, and failed to effectively control some bank deposits to ensure the safety of funds. (4) The
problem of fund raising. In the case of tight capital of the company, multiple borrowings overdue and litigation, there are still
large non-operating payments that have not been cleared. 7. Tax management is not standardized. Lack of invoice management
and other tax management systems, resulting in illegal construction costs. 8. Project management is out of control. Due to
company reasons, some overseas projects of the company's subsidiary Shenzhou International Engineering Co., Ltd. have
stagnated, and the company has lost control of the project. During the audit of the company's overseas projects, we did not obtain
satisfactory audit evidence for the procedures such as letters and interviews.9. In 2018, the company involved more disputes. In
response to such litigation cases, the company has not established a litigation management system, and has not timely and
effectively managed information related to litigation in the case of receiving multiple litigation cases. Sino Great Wall Co., Ltd. 2018 Annual Report
178
2. Self-evaluation report on internal control
Disclosure date of appraisal report on
internal control
April 30,2019
Disclosure index of appraisal report on
internal control
Juchao Website: （http://www.cninfo.com.cn ）, Selfevaluation report of internal
control in 2018 on April 30,2019
Proportion of total unit assets covered by
appraisal in the total assets of the
consolidated financial statements of the
company
100.00%
Proportion of total unit incomes covered
by appraisal in the total business
incomes of the consolidated financial
statements of the company
100.00%
Standards of Defects Evaluation
Category Financial Report Non-financial Report
Standard
Material Defect:
1.Fraud of directors, supervisors and
senior management;
2.Material errors appear in the Company’s
financial report published;
3. The certified public auditor finds
material wrong reporting in the current
financial statement, while the Company
has not found such reporting during its
operation;4. The audit committee and audit
department of the Company exercise
invalid supervision upon internal control;
5.The result of internal control assessment
hasn’t been rectified, especially the
material or major defects;
6.Important business is lack of system
control or the system loses its validity.
Major Defects:1. No recognized
accounting standards were followed when
choosing and applying the accounting
policies;
2.No anti-fraud program and control
measures were established; 3.No
corresponding control mechanism was
established or implemented for treating the
Material Defect:
1.Violation of national laws or
regulations, normative documents and
significant decision making lacking
scientific and system may lead to
invalid system, no rectification for
material or major defect or other
situations that materially affect
the Company; 2. Violation of
regulations led to punishment from
government department or regulatory
authority. Violation of management
system or internal control procedure
led to major business disputes. Ranges
of material litigation led to great
losses;3.The working initiatives of
staffs was damaged at a great level,
and the working efficiency was
substantially decreased, which exerted
major adverse effects on the culture
and cohesion of the enterprise, and led
to serious turnover of core
teams;4.Negative news spreads in the
whole business scope( including the
extension to industry chain ), or is
concerned by national medias or public Sino Great Wall Co., Ltd. 2018 Annual Report
179
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 Sino Great Wall Co., Ltd. 2018 Annual Report
180
financial statements as of December 31, 2018, and issued the Reanda 's No. 2334-[2019] Internal Control Audit Report, with
issuance of the following opinion: We consider that due to the above-mentioned material deficiency and its impact on the
achievement of the control objectives, Sino Great Wall failed to remain effective in all major aspects in the Internal control of
financial reporting in accordance with the Basic Rules for Internal Control of Enterprises and the related regulations on
December 31, 2018.
Disclosure of internal audit report Disclosure
Disclosure date of audit report
of internal control (full-text)
April 30,2019
Disclosure index of audit report
of internal control (full-text)
（www.cninfo.com.cn ）
Internal audit report’s opinion Negative opinions
Non-financial reporting the
existence of significant
deficiencies
Yes
Has the CPAs issued a qualified auditor’s report of internal control .
√Yes □No
Statement of internal control audit report issued by accounting firm with non-standard opinions
In this internal control audit, Reanda Certified Public Accountants (LLP) notices the following significant defects in the internal
control 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 Company
recognized the revenue in 2017. According to the accounting policies of the Company, the revenue of RMB 7 million is recognized
as intertemporal.
2. Inventory management is not standardized. The management of raw materials is lack of improved system and standard. The raw
materials purchased by the Company for project construction, such as steel, are only accessible in the material purchase and
warehousing management process. The materials purchased and warehoused are directly included in the construction cost of the
construction 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 for
Business Enterprises No. 1 - Inventory. It is impossible to accurately measure the quantity and amount of raw materials collected for
the 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 was
prepared in preparation for major assets acquisition in 2018, but none of the participants and insiders indicated in the memorandum
signed the memorandum for confirmation. It violates the provisions of Article 6 and Article 10 of the Provisions on Listed
Companies 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 seventh
meeting of the Board of Directors and the 23rd session of the seventh meeting of the Board of Supervisors of the Company, the
Proposal on Temporary Replenishment of Circulating Fund with Part of Idle Raised Funds was considered and adopted, and the
Company was allowed to temporarily supplement circulating funds with idle raised funds of RMB 139 million. Upon inspection, the
raised funds account of the Company was deducted by more than RMB 5.1 million by the court on October 25, 2018, resulting in the
total amount actually used by the Company to supplement circulating funds exceeding the approved amount RMB 327,300 to
supplement circulating funds. (2) The management system of raised funds is not sound. The Company's Management System for Use
of Raised Funds does not involve the responsibility assigning mechanism for the illegal use of raised funds, and the provisions on the Sino Great Wall Co., Ltd. 2018 Annual Report
181
hierarchical approval authority, decision-making procedures and risk control measures for the use of raised funds are not clear, which
does not conform to Article 3 of Guidelines for Supervision of Listed Companies No. 2 -Supervision Requirements for the
Management 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-owned
subsidiary of the Company, entered into a Non-recourse Domestic Factoring Contract with Shenzhen Qianhai Shihong Commercial
Factoring 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 of
Directors of the Company. When the Company handles the factoring business, it has not been reviewed and approved by the Board of
Directors 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. (hereinafter
referred to as Sino Great Wall Jianye Engineering) at the office meeting. On November 27, 2018, the Company entered into an equity
transfer agreement with the counterparty. According to the Articles of Association (Article 112 Where the transactions of the
Company fall into any of the following circumstances, the Board of Directors shall review and approve them: . (2) The operating
income related to the transaction object in the latest fiscal year accounts for more than 10% of the audited operating income of the
Company 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 Engineering
Co., Ltd., wholly-owned subsidiary of the Company, engaged in many loans entrusted payment business with Beijing Anlulaisen
Building Materials Co., Ltd., Beijing Hongda Guangfa Construction Labor Service Co., Ltd. and Beijing Puya Architectural
Decoration Engineering Co., Ltd. The above matters have not been approved by the Board of Directors of the Company. The
Company held the sixth session of the eighth meeting of the Board of Directors on April 12, 2019, at which the Proposal on
Supplementary Consideration of Providing External Financial Assistance was considered and adopted. (2) Financing business is
handled without approval. In 2018, the Company conducted financing to financial institutions, non-financial institutions and
individuals 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 to
provide bank deposit balances on the balance sheet date of some bank accounts and bank statements during the audit, and failed to
implement effective control over some bank deposits to ensure the safety of funds. (4) Fund raising problems. Under the
circumstance that the Company is short of funds, many loans are overdue and cause litigation, there are still large amounts of
non-operating receivables and payables outstanding. For example, as of the balance sheet date, the Company shall receive RMB
332,026,600 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 Taxation
Administration 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 in
writing false V AT ordinary invoices, intelligence V AT ordinary invoices of other provinces and out-of-control V AT special invoices,
thus the taxable income shall be increased by RMB 6.4397 million. The tax management of the Company is not standardized, and the
invoice management and other tax management systems are lacked, resulting in listing the expenditures into the construction cost of
the 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 Oil
Refinery and other projects of Sino International Engineering Co., Ltd., subsidiary of the Company, have been halted, and the
Newport Project in Qatar, the Kuwait Ministry of Finance Building Project and other projects have been stalled. The Company has
lost control over the above mentioned projects. In the process of auditing the above overseas projects of the Company, we failed to Sino Great Wall Co., Ltd. 2018 Annual Report
182
obtain satisfactory audit evidence through confirmation, interview and other procedures. We are unable to implement further audit
procedures or substitute audit procedures to obtain adequate and appropriate audit evidence due to the failure of the Company to
provide complete external information.
9. Guarantee is provided externally without approval. According to Article 5, Chapter I of the Management System for External
Guarantee of the Company, "the Company shall not provide external guarantee without the consideration and approval of the general
meeting of stockholders or the Board of Directors". On April 18, 2018, the Company (Party B, obligor to balance supplement) signed
a balance supplement agreement with the Zhongyuan Trust (Party A, creditor) and Sino Great Wall (Fugou) High-speed Railway
Area Investment Co., Ltd. (Party C, debtor). Article 2.2 of the Agreement stipulates that "Where Party C fails to repay any amount or
installment 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 accordance
with the Trust Loan Contract (Main Contract), Party A shall have the right to send written notice to Party B to require Party B to
fulfill the obligation to balance supplement. Balance supplement amount = principal and interest of Party A's principal creditor's
rights and other receivables of Party A - principal and interest of principal creditor's rights actually received by Party A and other
receivables of Party A." The above balance supplement agreement fails to go through the examination and approval procedures in
accordance 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 the
information 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 related
information, 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 financial
statement auditing of Sino Great Wall, we have considered the impact of above-mentioned major defects on the nature, time and
scope of the audit process.
In this internal control audit, Reanda Certified Public Accountants (Special General Partnership) noted that the company's
non-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 a
litigation management system, and has not timely and effectively managed information related to litigation in the case of receiving
multiple litigation cases. Due to the above-mentioned major defects, we remind users of this report to pay attention to the risks
involved. It should be pointed out that we do not express opinions or provide guarantees on the internal control of non-financial
reporting of the Great Wall of China. This paragraph does not affect the audit opinion issued on the effectiveness of internal control
over 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 Sino Great Wall Co., Ltd. 2018 Annual Report
183
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 not
fully repaid on the date of approval of the annual report
No Sino Great Wall Co., Ltd. 2018 Annual Report
184
XI. Financial Statements
1. Audit report
Types of Audit Opinions Disclaimer of Opinion
Signature Date April 28, 2019
Auditor Reanda Certified Public Accountants (special general
partnership)
Report No. Reanda SZ [2019] No. 2333
Chinese Certified Public Accountant: Wang Xinyu and Zhou Zhonghua
Audit Report
Audit report
Reanda SZ [2019] No. 2333
To all shareholders of Sino Great Wall Co., Ltd. ：
I. Opinions
We 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’s
cash flow statement, the consolidated and parent company’s statement of changes in shareholder’s equity
and 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 the
matters described in the section “Basis for Disclaimer of Opinion”, we are unable to obtain sufficient and
appropriate 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 to
the financial statements of Sino Great Wall on December 31, 2018, we found that many internal control
failures have had a significant and extensive impact on the financial statements. (More details in Internal
Control 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 obtained
through 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 its
bank deposits, accounts receivable, other receivables, prepayments, long-term and short-term loans, Sino Great Wall Co., Ltd. 2018 Annual Report
185
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 to
verify the authenticity and accuracy of the deposits and payments mentioned above.
② During the audit of the Company’s important engineering projects, procedures such as
confirmation in writing and interviews, failed to yield satisfactory audit evidence. Due to the Company’s
failure to provide complete external information, we are unable to further implement audit procedures or
alternative procedures to obtain sufficient and appropriate audit evidence for the revenue and cost of the
projects.
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 factoring
business with Shihong Factoring Co., Ltd. As of the end of 2018, the Company received 140.954 million
RMB and 91.153 million RMB respectively from the original debtors, which were not transferred to the
factoring parties. We couldn’t obtain satisfactory audit evidence during our verification of this transaction
and are unable to determine the nature of the transaction and its impact on the company’s financial
statements.
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 were
frozen, employees dismissed, and some project related guarantees were claimed. A large amount of debts
was overdue and involved in litigation. Completed projects with unsettled inventory and investment
expenses may have the risk of impairment, and the accounts receivable confirmed by the project may
have bad debt risk. The guarantee may result in claim for loss, and the litigation may result in loss from
lawsuit. Due to the largely uncertain impact of matters mentioned above, we are unable to evaluate the
Company'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 are
involved in litigation. Projects under construction were suspended and employees were dismissed with
overdue salaries. The Company is faced with fund shortage to sustain its operation and its financial status
is worsening, resulting in huge amount of loss in 2018. The above situation indicates that there is
significant uncertainty in the Company’s ability to continue its operations. We are unable to determine
whether it is appropriate for Sino Great Wall to apply the continued operations assumption to prepare the
2018 financial statements.
5. Investigation of China Securities Regulatory Commission
The Company received the Notification of Investigation (No. JDCZ19041) from China Securities
Regulatory Commission, which decided to investigate the Company in accordance with Securities Law of
the People's Republic of China on suspicion of law-breaking operations. As of the issue date of the
financial 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 responsible
for compiling financial statements in accordance with the Accounting Standards for Business Enterprises
for the true and fair presentation as well as designing, executing and protecting the internal control related
to the compilation of financial statements so as to make the financial statements be free from any serious
misstatement caused by frauds and errors.
In the preparation of the financial statements, the management is responsible for assessing the
continued operation ability of Sino Great Wall, disclosing the matters related to continued operations (if
applicable), and applying the continued operations assumption unless it is planned to liquidate, terminate Sino Great Wall Co., Ltd. 2018 Annual Report
186
operations or make other necessary realistic choice.
The governance team is responsible for overseeing the financial reporting process of Sino Great
Wall.
IV CPA’s Responsibility for Auditing Financial Statements
Our responsibility is to conduct our audit in accordance with Chinese CPA Standards on Auditing
and 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 financial
statements.
According to the Code of Ethics for Chinese Certified Public Accountants, we are independent of
Sino Great Wall and perform other duties in terms of professional ethics.
Reanda Certified Public Accountants
(special general partnership)
Chinese Certified Public Accountant:
(Engagement Partner):
Beijing · China Chinese Certified Public Accountant:
April 28, 2019
II. Financial Statements
Unit in the financial statements: RMB
1. Consolidated Balance Sheet
Prepared by: Sino Great Wall Co., Ltd.
Unit: Yuan
Item Ending balance Opening balance
Current assets
Monetary resources 658,714,886.48 1,604,973,916.12
Deposit reservation for balance
Funds lent
Financial assets measured with fair
value and having the change of fair value
recorded in the gain or loss of current
Sino Great Wall Co., Ltd. 2018 Annual Report
187
period
Derivative financial assets
Notes receivable and accounts
receivable
4,204,113,048.24 5,994,876,806.96
Including: notes receivable 1,518,790.00 288,201,562.88
Accounts receivable 4,202,594,258.24 5,706,675,244.08
Advance payment 220,261,619.13 225,208,527.88
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserves
receivable
Other accounts receivable 2,186,223,361.40 1,674,675,360.28
Including: accrued interest
receivable
Dividends receivable
Redemptory monetary capital for
sale
Inventories 717,531,578.23 556,839,325.50
Assets held for sale 105,075,792.00
Non-current assets coming due
within one year
Other current assets 5,795,797.44 17,126,911.05
Total current assets 8,097,716,082.92 10,073,700,847.79
Non-current assets:
Disbursement of advances and
loans
Available-for-sale financial assets 10,338,500.00 10,338,500.00
Held-to-maturity investments
Long-term accounts receivable 16,708,613.19 14,328,557.82
Long-term equity investments 106,837,810.83
Investment real estate
Fixed assets 158,746,947.91 174,537,150.56
Construction in progress 36,697,284.04 4,968,590.96
Capitalized biological assets
Oil and gas assets
Intangible assets 99,921,251.67 127,524,445.00 Sino Great Wall Co., Ltd. 2018 Annual Report
188
Development costs
Goodwill 27,268,234.53 64,494,271.55
Long-term deferred expenses 6,727,688.90 10,124,913.15
Deferred income tax assets 117,983,727.91 118,233,337.36
Other non-current assets 924,509,792.99 1,069,594,572.11
Total non-current assets 1,505,739,851.97 1,594,144,338.51
Total assets 9,603,455,934.89 11,667,845,186.30
Current liabilities:
Short-term loans 2,862,584,629.01 3,477,200,420.55
Borrowings from the central bank
Absorption of deposits and
interbank deposit
Loans from banks and other
financial institutions
Financial liabilities measured with
fair value and having the change of fair
value recorded in the gain or loss of
current period
Derivative financial liabilities
Notes payable and accounts payable 1,926,243,130.15 2,626,177,075.77
Advances from customers 478,101,743.92 146,379,852.67
Financial assets sold under
repurchase agreements
Handling charges and commissions
payable
Employee compensation payable 86,414,858.86 21,911,542.07
Taxes and surcharges payable 393,957,887.52 357,445,477.71
Other accounts payable 2,212,412,970.43 537,070,684.98
Including: interest payable 280,806,670.49 16,105,263.85
Dividends payable 8,541,818.64
Reinsurance accounts payable
Reserves for insurance contracts
Receivings from vicariously traded
securities
Receivings from vicariously sold
securities
Liabilities held for sale Sino Great Wall Co., Ltd. 2018 Annual Report
189
Non-current liabilities coming due
within one year
975,719,981.55 820,422,471.45
Other current liabilities 121,529,600.95
Total current liabilities 8,935,435,201.44 8,108,137,126.15
Non-current liabilities:
Long-term loans 120,000,000.00 843,092,471.02
Bonds payable 254,801,342.47 345,000,000.00
Including: preferred stock
Perpetual debts
Long-term accounts payable 322,990.35 81,945,567.86
Long-term employee compensation
payable
Estimated liabilities 2,958,723.15 3,414,189.15
Deferred income
Deferred income tax liabilities 24,369,456.18 26,088,961.71
Other non-current liabilities
Total non-current liabilities 402,452,512.15 1,299,541,189.74
Total liabilities 9,337,887,713.59 9,407,678,315.89
Total owners’ equity:
Capital stock 1,698,245,011.00 1,698,245,011.00
Other equity instruments
Including: preferred stock
Perpetual debts
Capital reserve -1,298,846,540.07 -1,299,349,701.74
Less: treasury stock
Other comprehensive income -50,380.95 858,242.13
Special reserve 21,026,082.43 164,231,078.18
Surplus reserve 84,394,441.23 84,394,441.23
General risk reserves
Undistributed profits -269,566,140.13 1,503,103,396.72
Total equity attributable to owners of
Parent Company
235,202,473.51 2,151,482,467.52
Minority equity 30,365,747.79 108,684,402.89
Total owners’ equity 265,568,221.30 2,260,166,870.41
Total liabilities and owners’ equity 9,603,455,934.89 11,667,845,186.30 Sino Great Wall Co., Ltd. 2018 Annual Report
190
Legal Representative: Chen Lue
Accounting Principal: Yang Chunling
Head of the Accounting Department: Yang Chunling
2. Balance Sheet of Parent Company
Unit: Yuan
Item Ending balance Opening balance
Current assets
Monetary resources 46,778,625.47 407,959,304.60
Financial assets measured with fair
value and having the change of fair value
recorded in the gain or loss of current
period
Derivative financial assets
Notes receivable and accounts
receivable
Including: notes receivable
Accounts receivable
Advance payment 3,865,500.01
Other accounts receivable 2,986,852,664.14 3,690,967,483.22
Including: accrued interest
receivable
Dividends receivable 100,000,000.00 100,000,000.00
Inventories
Assets held for sale
Non-current assets coming due
within one year
Other current assets 2,604,075.38 2,175,646.45
Total current assets 3,036,235,364.99 4,104,967,934.28
Non-current assets:
Available-for-sale financial assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments 3,323,211,536.66 3,311,211,536.66
Investment real estate Sino Great Wall Co., Ltd. 2018 Annual Report
191
Fixed assets 36,371.12 52,246.48
Construction in progress
Capitalized biological assets
Oil and gas assets
Intangible assets
Development costs
Goodwill
Long-term deferred expenses 1,074,666.67 168,284.84
Deferred income tax assets
Other non-current assets 728,328,020.00 550,524,570.00
Total non-current assets 4,052,650,594.45 3,861,956,637.98
Total assets 7,088,885,959.44 7,966,924,572.26
Current liabilities:
Short-term loans 2,189,866,602.21 2,287,870,000.00
Financial liabilities measured with
fair value and having the change of fair
value recorded in the gain or loss of
current period
Derivative financial liabilities
Notes payable and accounts payable 95,000,000.00 537,227,578.11
Advances from customers
Employee compensation payable 15,016,143.39 1,580,335.12
Taxes and surcharges payable 97,149,029.10 97,124,633.81
Other accounts payable 1,347,473,661.05 392,422,663.75
Including: interest payable 243,458,030.15 13,002,236.21
Dividends payable 8,541,818.64
Liabilities held for sale
Non-current liabilities coming due
within one year
866,250,000.00 700,000,000.00
Other current liabilities
Total current liabilities 4,610,755,435.75 4,016,225,210.79
Non-current liabilities:
Long-term loans 800,000,000.00
Bonds payable 100,000,000.00
Including: preferred stock
Perpetual debts Sino Great Wall Co., Ltd. 2018 Annual Report
192
Long-term accounts payable
Long-term employee compensation
payable
Estimated liabilities
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 900,000,000.00
Total liabilities 4,610,755,435.75 4,916,225,210.79
Total owners’ equity:
Capital stock 1,698,245,011.00 1,698,245,011.00
Other equity instruments
Including: preferred stock
Perpetual debts
Capital reserve 1,237,956,472.37 1,237,956,472.37
Less: treasury stock
Other comprehensive income
Special reserve
Surplus reserve 26,309,287.00 26,309,287.00
Undistributed profits -484,380,246.68 88,188,591.10
Total owners’ equity 2,478,130,523.69 3,050,699,361.47
Total liabilities and owners’ equity 7,088,885,959.44 7,966,924,572.26
3. Consolidated Income Statement
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
I. Gross operating income 2,426,987,687.02 6,497,124,980.52
Including: operating income 2,426,987,687.02 6,497,124,980.52
Interest income
Insurance premiums
earned
Handling charges and
commission income
II. Gross operating cost 3,906,818,404.18 5,990,935,078.96
Including: operating cost 2,449,500,634.87 4,886,354,499.66 Sino Great Wall Co., Ltd. 2018 Annual Report
193
Interest expenditure
Handling charges and
commission expenditure
Surrender value
Net payments for
insurance claims
Net provision insurance
contracts
Expenditures dividend
policy
Reinsurance expenses
Taxes and surcharges 4,790,660.57 4,533,005.61
Selling expenses 28,300,802.42 32,213,247.97
Management expenses 311,698,800.53 312,957,207.20
R&D expenses
Financial expenses 606,015,536.23 432,590,607.55
Including: interest
expenses
295,397,174.36
Interest income 15,353,873.68
Asset impairment loss 506,511,969.56 322,286,510.97
Plus: Other incomes 52,040.48 2,211,128.89
Investment income (Losses
are marked with a “-”)
30,219,918.01 -387,601.37
Including: Income from
investment in jointly-run enterprises
and joint ventures
Profits from changes in fair
value (Losses are marked with a “-”)
Exchange earning (Losses
are marked with a “-”)
0.00
Proceeds from asset
disposal (Losses are marked with a
“-”)
-150,250.00
III. Operating profit (Losses are
marked with a “-”)
-1,449,558,758.67 507,863,179.08
Plus: Non-Operating Income 128,699,835.85 156,426.78
Less: Non-Operating
Expenditure
395,623,593.98 -3,030,152.73 Sino Great Wall Co., Ltd. 2018 Annual Report
194
IV: Total profit (Losses are marked
with a “-”)
-1,716,482,516.80 511,049,758.59
Less: Expense of income tax 3,281,922.60 127,003,731.76
V . Net profit (Losses are marked with
a “-”)
-1,719,764,439.40 384,046,026.83
(I) Net profits from continued
operations (Losses are marked with a
“-”)
(II) Net profits from
discontinued operations (Losses are
marked with a “-”)
Net profit attributed to the parent
company’s owners
-1,704,739,736.40 380,090,990.82
Profit and loss of minority
shareholders
-15,024,703.00 3,955,036.01
VI. Net of tax for other
comprehensive income
-908,623.08 858,242.13
Net of tax for comprehensive
income attributed to the parent
company’s owners
-908,623.08 858,242.13
(I) Other comprehensive income
that cannot be reclassified into profit
or loss
1. Remeasure the change
in the defined benefit plan
2. Other comprehensive
income that cannot be transferred
with equity method
(II) Other comprehensive
income to be reclassified into profit
or loss
-908,623.08 858,242.13
1. Other comprehensive
income that can be transferred with
equity method
2. Gains and losses from
changes in fair value of
available-for-sale financial assets
3. Held-to-maturity
investment reclassified as gains and
losses on available-for-sale financial
assets
Sino Great Wall Co., Ltd. 2018 Annual Report
195
4. Effective portion of
cash flow hedge gains and losses
5. Balance from
conversion of foreign-currency
financial statements
-908,623.08 858,242.13
6. Others
VI. Net of tax for other
comprehensive income attributed to
minority stockholders
VII. Total amount of composite
benefits
-1,720,673,062.48 384,904,268.96
Total amount of composite
benefits attributed to the parent
company’s owners
-1,705,648,359.48 380,949,232.95
Total amount of composite
benefits attributed to minority
stockholders
-15,024,703.00 3,955,036.01
VIII. Earnings per share
(I) Basic earnings per share -1.004 0.220
(II) Diluted earnings per share -1.004 0.220
f the enterprise is merged under the same control in the current period, the net profit realized by the merged party before the merger shall be
RMB , and the net profit realized by the merged party in the last period shall be RMB
Legal Representative: Chen Lue
Accounting Principal: Yang Chunling
Head of the Accounting Department: Yang Chunling
4. Parent company’s income statement
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
I. Operating income 197,962.06 240,558.55
Less: operating cost 0.00 1,482.50
Taxes and surcharges 232,339.11 486,860.22
Selling expenses 1,041,800.14 793,644.62
Management expenses 46,082,221.37 48,845,134.77
R&D expenses
Financial expenses 439,946,225.01 94,901,413.49 Sino Great Wall Co., Ltd. 2018 Annual Report
196
Including: interest
expenses
Interest income
Asset impairment loss 14,901,696.51 7,489,577.66
Plus: Other incomes 7,211.91
Investment income (Losses
are marked with a “-”)
100,000,000.00
Including: Income from
investment in jointly-run enterprises
and joint ventures
Profits from changes in fair
value (Losses are marked with a “-”)
Proceeds from asset
disposal (Losses are marked with a
“-”)
II. Operating profit (Losses are
marked with a “-”)
-502,006,320.08 -52,270,342.80
Plus: Non-Operating Income 100,000,000.00 0.01
Less: Non-Operating
Expenditure
102,632,717.26
III: Total profit (Losses are marked
with a “-”)
-504,639,037.34 -52,270,342.79
Less: Expense of income tax
IV . Net profit (Losses are marked
with a “-”)
-504,639,037.34 -52,270,342.79
(I) Net profits from continued
operations (Losses are marked with a
“-”)
(II) Net profits from
discontinued operations (Losses are
marked with a “-”)
V . Net of tax for other comprehensive
income
(I) Other comprehensive income
that cannot be reclassified into profit
or loss
1. Remeasure the change
in the defined benefit plan
2. Other comprehensive
income that cannot be transferred
Sino Great Wall Co., Ltd. 2018 Annual Report
197
with equity method
(II) Other comprehensive
income to be reclassified into profit
or loss
1. Other comprehensive
income that can be transferred with
equity method
2. Gains and losses from
changes in fair value of
available-for-sale financial assets
3. Held-to-maturity
investment reclassified as gains and
losses on available-for-sale financial
assets
4. Effective portion of
cash flow hedge gains and losses
5. Balance from
conversion of foreign-currency
financial statements
6. Others
VI. Total amount of composite
benefits
-504,639,037.34 -52,270,342.79
VII. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share
5. Consolidated Statements of Cash Flows
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
I. Cash flow from operating activities
Cash received from sales of
goods and rending of services
3,468,136,123.20 4,642,883,579.49
Net increase in customer
deposits and interbank deposits
Net increase for borrowing from
the central bank
Net increase in placements from
other financial institutions
Cash premiums received on
Sino Great Wall Co., Ltd. 2018 Annual Report
198
original insurance contracts
Cash received from re-insurance
business
Net increase in deposits and
investments from insurers
Net increase for disposals of
financial assets measured as fair
value and the variation included in
current profit and loss
Interest, handling charges and
commissions received
Net increase in placements from
financial institutions
Net increase in repurchasing
business capital
Receipts of tax refunds 3,982,148.20 11,520,458.96
Other cash received relating to
operating activities
4,934,012,815.86 6,134,642,883.34
Sub-total of cash inflows from
operating activities
8,406,131,087.26 10,789,046,921.79
Cash payments for goods
purchased and services received
2,715,043,669.32 5,007,872,564.26
Net increase in loans and
advances to customers
Net increase in deposits with the
central bank and other financial
institutions
Payments of claims for original
insurance contracts
Interest, handling charges and
commissions paid
Commissions on insurance
policies paid
Cash payments to and on behalf
of employees
262,092,659.22 380,713,969.98
Payments of all types of taxes 72,091,894.26 212,006,262.08
Other cash payments relating to
operating activities
4,529,023,809.01 6,970,322,744.12
Sub-total of cash outflows from
operating activities
7,578,252,031.81 12,570,915,540.44 Sino Great Wall Co., Ltd. 2018 Annual Report
199
Net cash flows from operating
activities
827,879,055.45 -1,781,868,618.65
II. Cash flows from investing
activities
Cash received from disposals
and withdrawals of investment
2,000,000.00
Cash received from returns on
investments
Net cash received from disposals
of fixed assets, intangible assets and
other long-term assets
424,000.00 85,000.00
Net cash received from disposals
of subsidiaries and other business
units
3,400,000.00
Other cash payments relating to
investing activities
Sub-total of cash inflows from
investing activities
3,824,000.00 2,085,000.00
Cash payments to acquire and
construct fixed assets, intangible
assets and other long-term assets
9,496,541.03 48,204,408.85
Cash payments to acquire
investments
182,993,849.80 840,948,723.77
Net increase in secured loans
Net cash payments for
acquisitions of subsidiaries and other
business units
2,340,123.50
Other cash payments relating to
investing activities
2,990,381.41 131,500,000.00
Sub-total of cash outflows from
investing activities
195,480,772.24 1,022,993,256.12
Net cash flows from investing
activities
-191,656,772.24 -1,020,908,256.12
III. Cash flows from financing
activities
Cash received from investors 12,490,000.00 30,240,000.00
Including: Cash received from
minority shareholders
Cash received from borrowings 1,414,923,533.71 4,537,777,192.35 Sino Great Wall Co., Ltd. 2018 Annual Report
200
Proceeds from issuance of bonds 344,800,000.00
Other cash received relating to
financing activities
54,209,648.35 179,327,200.00
Sub-total of cash inflows from
financing activities
1,481,623,182.06 5,092,144,392.35
Cash repayments of amounts
borrowed
2,438,563,678.82 1,998,607,849.12
Cash payments for distribution
of dividends or profits, or cash
payments for interest expenses
177,477,175.65 332,584,990.54
Including: Subsidiary
companies’ payment to minority
shareholders for distribution of
dividends or profit
Other cash payments relating to
financing activities
22,512,800.03 233,071,283.83
Sub-total of cash outflows from
financing activities
2,638,553,654.50 2,564,264,123.49
Net cash flows from financing
activities
-1,156,930,472.44 2,527,880,268.86
IV . Effect of foreign exchange rate
changes on cash and cash equivalents
-746,604.37 -21,586,126.02
V . Net increase in cash and cash
equivalents
-521,454,793.60 -296,482,731.93
Plus: Cash and cash equivalents
at the beginning of period
647,222,590.48 943,705,322.41
VI. Cash and cash equivalents at the
end of period
125,767,796.88 647,222,590.48
6. Consolidated Statements of Cash Flows of the Parent Company
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
I. Cash flow from operating activities
Cash received from sales of
goods and rending of services
265,320.00
Receipts of tax refunds
Other cash received relating to
operating activities
3,916,915,819.93 4,283,071,598.59
Sub-total of cash inflows from
3,916,915,819.93 4,283,336,918.59 Sino Great Wall Co., Ltd. 2018 Annual Report
201
operating activities
Cash payments for goods
purchased and services received
Cash payments to and on behalf
of employees
494,240.89
Payments of all types of taxes 234,343.88 396,447.37
Other cash payments relating to
operating activities
2,670,055,342.90 5,546,418,464.78
Sub-total of cash outflows from
operating activities
2,670,289,686.78 5,547,309,153.04
Net cash flows from operating
activities
1,246,626,133.15 -1,263,972,234.45
II. Cash flows from investing
activities
Cash received from disposals
and withdrawals of investment
Cash received from returns on
investments
Net cash received from disposals
of fixed assets, intangible assets and
other long-term assets
Net cash received from disposals
of subsidiaries and other business
units
Other cash payments relating to
investing activities
Sub-total of cash inflows from
investing activities
Cash payments to acquire and
construct fixed assets, intangible
assets and other long-term assets
65,440.00
Cash payments to acquire
investments
160,000,000.00 696,324,570.00
Net cash payments for
acquisitions of subsidiaries and other
business units
Other cash payments relating to
investing activities
Sub-total of cash outflows from
investing activities
160,000,000.00 696,390,010.00 Sino Great Wall Co., Ltd. 2018 Annual Report
202
Net cash flows from investing
activities
-160,000,000.00 -696,390,010.00
III. Cash flows from financing
activities
Cash received from investors
Cash received from borrowings 840,650,000.00 3,085,070,000.00
Proceeds from issuance of bonds 99,800,000.00
Other cash received relating to
financing activities
Sub-total of cash inflows from
financing activities
840,650,000.00 3,184,870,000.00
Cash repayments of amounts
borrowed
1,902,673,705.66 980,200,000.00
Cash payments for distribution
of dividends or profits, or cash
payments for interest expenses
100,441,437.45 282,451,200.03
Other cash payments relating to
financing activities
31,000,000.00
Sub-total of cash outflows from
financing activities
2,003,115,143.11 1,293,651,200.03
Net cash flows from financing
activities
-1,162,465,143.11 1,891,218,799.97
IV . Effect of foreign exchange rate
changes on cash and cash equivalents
V . Net increase in cash and cash
equivalents
-75,839,009.96 -69,143,444.48
Plus: Cash and cash equivalents
at beginning of period
99,547,899.86 168,691,344.34
VI. Cash and cash equivalents at end
of period
23,708,889.90 99,547,899.86
7. Consolidated Statement of Changes in Owners’ Equity
Amount of the current period
Unit: Yuan
Item
Current period
Equity attributable to owners of Parent Company
Mino
rity
equit
Total
owne
rs’
Capi
tal
Other equity
instruments
Capit
al
Capit
al
Other
equit
Capit
al
Capit
al
Other
equit
Capit
al Sino Great Wall Co., Ltd. 2018 Annual Report
203
stoc
k
Pref
erre
d
stoc
k
Per
petu
al
debt
s
Oth
ers
reserv
e
stock y
instru
ments
reserv
e
stock y
instru
ments
reserv
e
y
Capit
al
stock
equit
y
Other
equit
y
instru
ments
I. Balance at the
end of the last
year
1,69
8,24
5,01
1.00
-1,29
9,349
,701.
74
858,2
42.13
164,2
31,07
8.18
84,39
4,441
.23
1,503
,103,
396.7
1
108,6
84,40
2.89
2,260
,166,
870.4
0
Plus:
adjustments for
changes in
accounting
policies
Correction of
accounting
errors in prior
periods
Business
combination
under common
control
Others
II. Balance at
the beginning of
the year
1,69
8,24
5,01
1.00
-1,29
9,349
,701.
74
858,2
42.13
164,2
31,07
8.18
84,39
4,441
.23
1,503
,103,
396.7
1
108,6
84,40
2.89
2,260
,166,
870.4
0
III.
Increases/decrea
ses in the
current period
(“-” for
decreases)
503,1
61.67
-908,
623.0
8
-143,
204,9
95.75
-1,77
2,669
,536.
84
-78,3
18,65
5.10
-1,99
4,598
,649.
10
(I) Total
comprehensive
income
-50,3
80.95
-1,70
4,739
,736.
40
-15,0
24,70
3.00
-1,71
9,814
,820.
35
(II) Capital 503,1 -858, -63,2 -63,6 Sino Great Wall Co., Ltd. 2018 Annual Report
204
contributed or
reduced by
owners
61.67 242.1
3
93,95
2.10
49,03
2.56
1. Common
shares
contributed by
owners
490,0
00.00
490,0
00.00
2. Capital
contributed by
holders of other
equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others
503,1
61.67
-858,
242.1
3
-63,7
83,95
2.10
-64,1
39,03
2.56
(III) Profit
distribution
-67,9
29,80
0.44
-67,9
29,80
0.44
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk
reserves
3. Profits
distributed to
owners (or
shareholders)
-67,9
29,80
0.44
-67,9
29,80
0.44
4. Others
(IV) Internal
carry-forward of
owners’ equity
1. Conversion of
capital reserves
into paid-in
capital (or
capital stock)
2. Conversion of
Sino Great Wall Co., Ltd. 2018 Annual Report
205
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,
204,9
95.75
-143,
204,9
95.75
1. Amount
withdrawn in the
current period
-143,
204,9
95.75
-143,
204,9
95.75
2. Amount used
in the current
period
(VI) Others
IV . Balance at
the end of the
current period
1,69
8,24
5,01
1.00
-1,29
8,846
,540.
07
-50,3
80.95
21,02
6,082
.43
84,39
4,441
.23
-269,
566,1
40.13
30,36
5,747
.79
265,5
68,22
1.30
Amount of the last period
Unit: Yuan
Item
Last period
Equity attributable to owners of Parent Company
Mino
rity
equit
y
Capit
al
stock
Total
owne
rs’
equit
y
Other
equit
y
instru
ments
Capi
tal
stoc
k
Other equity
instruments
Capit
al
reserv
e
Capit
al
stock
Other
equit
y
instru
ments
Capit
al
reserv
e
Capit
al
stock
Other
equit
y
instru
ments
Capit
al
reserv
e
Pref
erre
d
stoc
k
Per
petu
al
debt
s
Oth
ers Sino Great Wall Co., Ltd. 2018 Annual Report
206
I. Balance at the
end of the last
year
1,69
8,24
5,01
1.00
-1,29
9,349
,701.
74
65,68
7,868
.14
84,39
4,441
.23
1,228,
970,4
98.86
52,53
4,755
.10
1,830
,482,
872.5
9
Plus:
adjustments for
changes in
accounting
policies
Correction of
accounting
errors in prior
periods
Business
combination
under common
control
Others
II. Balance at
the beginning of
the year
1,69
8,24
5,01
1.00
-1,29
9,349
,701.
74
65,68
7,868
.14
84,39
4,441
.23
1,228,
970,4
98.86
52,53
4,755
.10
1,830
,482,
872.5
9
III.
Increases/decrea
ses in the
current period
(“-” for
decreases)
858,2
42.13
98,54
3,210
.04
274,1
32,89
7.86
56,14
9,647
.79
429,6
83,99
7.82
(I) Total
comprehensive
income
858,2
42.13
380,0
90,99
0.83
3,955
,036.
01
384,9
04,26
8.97
(II) Capital
contributed or
reduced by
owners
-4,06
3,392.
31
52,19
4,611
.78
48,13
1,219
.47
1. Common
shares
contributed by
owners
30,24
0,000
.00
30,24
0,000
.00
2. Capital Sino Great Wall Co., Ltd. 2018 Annual Report
207
contributed by
holders of other
equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others
-4,06
3,392.
31
21,95
4,611
.78
17,89
1,219
.47
(III) Profit
distribution
-101,
894,7
00.66
-101,
894,7
00.66
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk
reserves
3. Profits
distributed to
owners (or
shareholders)
-101,
894,7
00.66
-101,
894,7
00.66
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.
Sino Great Wall Co., Ltd. 2018 Annual Report
208
Carried-forward
retained
earnings of
changes in
defined benefit
plan
5. Others
(V) Special
reserve
98,54
3,210
.04
98,54
3,210
.04
1. Amount
withdrawn in the
current period
98,54
3,210
.04
98,54
3,210
.04
2. Amount used
in the current
period
(VI) Others
IV . Balance at
the end of the
current period
1,69
8,24
5,01
1.00
-1,29
9,349
,701.
74
858,2
42.13
164,2
31,07
8.18
84,39
4,441
.23
1,503,
103,3
96.72
108,6
84,40
2.89
2,260
,166,
870.4
1
8. Statement of Changes in Equity of Owners of Parent Company
Amount of the current period
Unit: Yuan
Item
Current period
Capita
l stock
Other equity
instruments
Capital
reserve
Less:
treasury
stock
Other
compre
hensive
income
Special
reserve
Surplus
reserve
Undis
tribut
ed
profit
s
Total
owners
’ equity
Prefer
red
stock
Perpe
tual
debts
Other
s
I. Balance at the
end of the last
year
1,698,
245,0
11.00
1,237,9
56,472.
37
26,309,
287.00
88,18
8,591.
10
3,050,6
99,361.
47
Plus:
adjustments for
changes in
accounting
policies
Sino Great Wall Co., Ltd. 2018 Annual Report
209
Correction of
accounting
errors in prior
periods
Others
II. Balance at
the beginning of
the year
1,698,
245,0
11.00
1,237,9
56,472.
37
26,309,
287.00
88,18
8,591.
10
3,050,6
99,361.
47
III.
Increases/decrea
ses in the current
period (“-” for
decreases)
-572,
568,8
37.78
-572,56
8,837.7
8
(I) Total
comprehensive
income
-504,
639,0
37.34
-504,63
9,037.3
4
(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
-67,9
29,80
0.44
-67,929
,800.44
1. Withdrawal of
surplus reserves
2. Profits
distributed to
-67,9
29,80
-67,929
,800.44 Sino Great Wall Co., Ltd. 2018 Annual Report
210
owners (or
shareholders)
0.44
3. Others
(IV) Internal
carry-forward of
owners’ equity
1. Conversion of
capital reserves
into paid-in
capital (or
capital stock)
2. Conversion of
surplus reserves
into paid-in
capital (or
capital stock)
3. Surplus
reserves
offsetting losses
4.
Carried-forward
retained
earnings of
changes in
defined benefit
plan
5. Others
(V) Special
reserve
1. Amount
withdrawn in the
current period
2. Amount used
in the current
period
(VI) Others
IV . Balance at
the end of the
current period
1,698,
245,0
11.00
1,237,9
56,472.
37
26,309,
287.00
-484,
380,2
46.68
2,478,1
30,523.
69
Amount of the last period
Unit: Yuan Sino Great Wall Co., Ltd. 2018 Annual Report
211
Item
Last period
Capita
l stock
Capital
stock
Capital
stock
Capital
stock
Capital
stock
Prefer
red
stock
Perpe
tual
debts
Other
s
I. Balance at the
end of the last
year
1,698,
245,0
11.00
1,237,9
56,472.
37
26,309,
287.00
242,3
53,63
4.55
3,204,8
64,404.
92
Plus:
adjustments for
changes in
accounting
policies
Correction of
accounting
errors in prior
periods
Others
II. Balance at
the beginning of
the year
1,698,
245,0
11.00
1,237,9
56,472.
37
26,309,
287.00
242,3
53,63
4.55
3,204,8
64,404.
92
III.
Increases/decrea
ses in the current
period (“-” for
decreases)
-154,
165,0
43.45
-154,16
5,043.4
5
(I) Total
comprehensive
income
-52,2
70,34
2.79
-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
Sino Great Wall Co., Ltd. 2018 Annual Report
212
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others
(III) Profit
distribution
-101,
894,7
00.66
-101,89
4,700.6
6
1. Withdrawal of
surplus reserves
2. Profits
distributed to
owners (or
shareholders)
-101,
894,7
00.66
-101,89
4,700.6
6
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 Sino Great Wall Co., Ltd. 2018 Annual Report
213
(V) Special
reserve
1. Amount
withdrawn in the
current period
2. Amount used
in the current
period
(VI) Others
IV . Balance at
the end of the
current period
1,698,
245,0
11.00
1,237,9
56,472.
37
26,309,
287.00
88,18
8,591.
10
3,050,6
99,361.
47
III. Basic Information of the Company
Sino Great Wall Co., Ltd. (hereinafter referred to as "Company” or the "Company”) is a limited
liability company restructured by Shenzhen Victor Onward Textile Printing Co., Ltd. and altered its name
to Shenzhen Victor Onward Textile Industrial Co., Ltd. upon the approval of the People's Government of
Shenzhen 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 on
Shenzhen Victor Onward Textile Industrial Co., Ltd.’s Material Assets Reorganization, Issuance of Stock
Shares to Chen Lve and Others, Asset Purchase, and Raising of Supporting Fund” ([2015] No. 1774). The
company issued 251,849,593 shares to 17 shareholders of Sino Great Wall Co., Ltd. including Chen Lve
to purchase a 100% stake in Sino Great Wall International Engineering Co., Ltd. Meanwhile, it also
issued 25,914,633 shares in a non-public manner to the 17 shareholders and raised a total of RMB
254,999,988.72.
On July 29, 2015, the listed company received the total newly added capital of RMB 251,849,593
contributed by all shareholders of Sino Great Wall Co., Ltd. On July 30, 2015, Ruihua Certified Public
Accountants (Special General Partnership) verified the numbers and issued the “Capital Verification
Report” (Ruihua Yanzi [2015] No. 48250011). After the change, the registered capital became RMB
420,991,949 with capital stock of RMB 420,991,949. On December 4, 2015, the company changed its
name to Sino Great Wall Co., Ltd.
On May 6, 2016, the general meeting of stockholders reviewed and approved the 2015 plan of
converting capital reserve into share capital. The specific plan was: Based on the total capital stock of
446,906,582 shares issued as of December 31, 2015, all shareholders would receive 28 shares for every
10 shares, with the total amount of converted capital stock reaching 1,251,338,429 shares. After the
transfer, the total capital stock would be increased to 1,698,245,011 shares. As of December 31 2016, the
Company’s total capital stock was 1,698,245,011 shares, of which 1,434,441,780 were outstanding A
shares, and 263,803,231 were outstanding B shares. Chen Lve held 582,944,556 A shares, accounting for
34.33% 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. As
of December 31, 2018, the Company has issued capital stock of RMB 169,824,500 shares in total with
the registered capital of RMB 169,824,500; the registration address is located at No. 26, Kuipeng Road, Sino Great Wall Co., Ltd. 2018 Annual Report
214
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 the
needed raw materials, accessories, mechanical equipment, clothes of various face fabrics and provision of
relevant services (excluding those products managed by the current license, performing as per the license
if there is one). 70% of the products are for export. A branch has set up in Shanghai. Supplemented
operating activities: engaging in businesses of quota-free license management, acquisition and export of
non-monopolized commodity. The actual controller of the Company is Chen Lve. The financial
statements have been reported on April 26, 2018 after the approval of all directors (board of directors) of
the Company.
For the subsidiaries of the Company that were included in the combination scope in 2018, please
refer to “Note VIII. Equity in Other Subjects”. For details of the changes in the combination scope of the
Company 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 to
the transactions and matters having occurred actually, and in accordance with the Accounting Standards
for Business Enterprises – Basic Rules (Issued by the Order No. 33 of the Ministry of Finance, amended
in 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 of
Accounting Standards for Business Enterprises and other relevant regulations issued and amended on
February 15, 2006 and afterwards (hereinafter jointly referred to as “Accounting Standards for Business
Enterprises”), as well as the disclosure provisions of the Preparation Rules for Information Disclosure by
Companies Offering Securities to the Public No.15 – General Provisions on Financial Report (Amended
in 2014) issued by China Securities Regulatory Commission.
According to the relevant provisions of the Accounting Standards for Business Enterprises, the
accounting of the Company is based on the accrual basis. Except for certain financial instruments, the
measurement of the financial statements is based on historical cost. If the asset is impaired, the
corresponding 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 reporting
period, 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 Sino Great Wall Co., Ltd. 2018 Annual Report
215
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 Standards
for Business Enterprises, and reflect the Company’s financial standing as of December 31, 2018 and its
operating results, cash flow, and other relevant information in 2018 authentically and completely. In
addition, all material aspects of the financial statements of the Company are in line with the disclosure
provisions regarding financial statements and notes stipulated in the Preparation Rules for Information
Disclosure by Companies Offering Securities to the Public No.15 – General Provisions on Financial
Report (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 Currency
The Company adopts RMB as recording currency.
5. Method for Accounting Treatment of Business Combination under and Not under the Same Control
Business combination under the same control: The assets and liabilities obtained by the Company from business combination are
measured as per the book value of the combined party’s assets and liabilities (including the goodwill formed from the final controller’s
acquisition of the combined party) on the date of combination in the final controller’s consolidated financial statements. For the balance
between the book value of net assets obtained from the combination and the book value of combination consideration paid (or the total book
value of shares issued), the capital stock premium in capital reserve will be adjusted; and if the capital stock premium in the capital reserve is
insufficient 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 incurred
or undertaken by the Company on the date of purchasing will be measured as per fair value, and the balance between the fair value and its
book value will be recorded in the gain or loss of the current period. The Company confirms the balance that the “combination cost” is bigger
than “the fair value shares of the purchased party’s distinguishable net assets obtained from the combination” as goodwill; and records after
checking the balance that the “combination cost” is smaller than “the fair value shares of the purchased party’s distinguishable net assets
obtained 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 directly
related expenses will be recorded in the gain or loss of the current period when incurred; the transaction expenses of equity securities issued
for 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 Sino Great Wall Co., Ltd. 2018 Annual Report
216
The consolidation scope of the Company’s consolidated financial statements is determined based on control. Control means that the
Company has the power to the investee, enjoys variable returns by participating in the relevant activities of the investee, and has the ability to
use 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 in
the 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 to
other relevant materials. For preparing consolidated financial statements, the Company deems the whole enterprise group as an accounting
subject, 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 financial
statements are consistent with those adopted by the Company. If the accounting policies and accounting period adopted by the subsidiaries
are inconsistent with those adopted by the Company, then when consolidated financial statements are prepared, necessary adjustments will
be made according to the Company’s accounting policies and accounting period. For the subsidiaries obtained through business combination
not under the same control, their financial statements will be adjusted based on the fair value of distinguishable net assets on the date of
purchasing. For subsidiaries obtained through business combination under the same control, their financial statements will be adjusted based
on the book value of their assets and liabilities (including the goodwill formed from the final controller’s acquisition of the subsidiaries) in
the 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 of
current period will be listed independently under the owners' equity in consolidated balance sheet, the net profit and total composite benefit
in consolidated profit statement respectively. The balance formed from that “the loss of current period shared by subsidiaries’ minor
shareholders” exceeds “the shares shared by the minor shareholders in the subsidiaries’ owners’ equity at the beginning of period” will be
used 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 amount
in the consolidated balance sheet will be adjusted; the income, expense, and profit of the subsidiaries or businesses from the beginning of the
very period of combination to the end of the reporting period will be incorporated into the consolidated profit statement; the cash flow of the
subsidiaries or businesses from the beginning of the very period of combination to the end of the reporting period will be incorporated into
the consolidated cash flow statement, and meanwhile, relevant items in comparative statements will be adjusted, and the report subjects after
combination 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 party
participating in the combination will be deemed to exist and make adjustments according to present state when the final controller starts the
control. The equity investments held before obtaining the right to control the combined parties, relevant gain or loss already confirmed from Sino Great Wall Co., Ltd. 2018 Annual Report
217
“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 the
opening 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 opening
amount of consolidated balance sheet will not be adjusted; the income, expense and profit of the subsidiaries or businesses from the date of
purchasing to the end of reporting period will be incorporated into the profit statement respectively; and the cash flow of the subsidiaries or
businesses 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 the
purchased parties’ stock equity held before the date of purchasing will be re-measured by the Company as per the fair value of the stock
equity on the date of purchasing, and the balance between the fair value and its book value will be recorded in the investment yield of the
current period. If the purchased parties’ equity held before the date of purchasing involves other composite benefits under accounting with
equity method, as well as changes of other owners’ equity except for net gain or loss, other composite benefit and profit distribution, then
relevant other composite benefit and changes of other owner’s equity will be converted into the investment yield in the very period to which
the date of purchasing belongs, excluding the other composite benefits arising from the changes of the net liabilities or net assets of benefit
plan 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 such
subsidiaries 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 flow
statement.
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 date
when the control right is lost. The balance of “the sum of the consideration obtained from disposal of equity and the fair
value of the remained stock equity” minus “the sum of the net asset shares enjoyed in original subsidiaries and calculated
continuously from the date of purchasing or date of combination according to original shareholding proportion and the
goodwill” will be recorded in the investment yield of the very period when control right is lost. Other composite benefits
related to original subsidiaries’ equity investments, or the changes of other owners’ equity except for other composite
benefits and profit distribution, will be converted into the investment yield of the very period when the control right is
lost, excluding the other composite benefits arising from the changes of the net liabilities or net assets of benefit plan
measured 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 over
its subsidiary arising from the capital increase contributed by other investors, it shall conduct accounting treatment in the
light of the aforesaid principles.
If the Company disposes the equity investments in subsidiaries by steps through multiple transactions until losing
the right to control the subsidiaries, and if the clauses, terms and economic influences of various transactions for Sino Great Wall Co., Ltd. 2018 Annual Report
218
disposing the equity investments in the subsidiaries meet one or several of the following circumstances, such multiple
transactions 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 other
transactions.
If various transactions of disposing the equity investments in subsidiaries until losing the control right belong to
package transaction, the Company will execute accounting treatment of various transactions as a transaction of disposing
subsidiaries until losing control right; but the balance between the price of every disposal before losing control right and
the subsidiaries’ net asset shares enjoyed and corresponding to the investments disposed will be confirmed as other
composite benefits in the consolidated financial statements, and transferred into the gain or loss of the very period when
the control right is lost.
If various transactions of disposing the equity investments in subsidiaries until losing the control right do not belong
to package transaction, then before losing control right, the Company will execute accounting treatment according to
relevant policies about partial disposal of equity investments in subsidiaries in condition of not losing control right; if
control right is lost, the accounting treatment will be carried out according to general method for treatment of
subsidiaries.
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 and
calculated continuously from the date of purchasing (or the date of combination)”, the capital stock premium in the
capital reserve in the consolidated balance sheet will be adjusted; if the capital stock premium in the capital reserve is not
sufficient 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 in
condition of not losing control right” and “the net asset shares to be enjoyed in the subsidiaries, corresponding to the disposal of long-term
equity investments, and calculated continuously from the date of purchasing or the date of combination”, the capital stock premium in the
capital reserve in the consolidated balance sheet will be adjusted; if the capital stock premium in the capital reserve is not sufficient to write
down, 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. The
Company classifies joint venture arrangements into joint operations and joint ventures in line with the
rights and obligations in joint venture arrangements. A joint operation refers to a joint arrangement
whereby the Company has rights to the assets, and obligations for the liabilities, relating to the
arrangement. A joint venture refers to a joint arrangement whereby the Company has rights to the net
assets of the arrangement.
The Company adopts equity method for accounting of investments in joint ventures in line with the
accounting policy described in Note IV . 13, “Long-term Equity Investments Subject to Accounting with Sino Great Wall Co., Ltd. 2018 Annual Report
219
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 liabilities
incurred jointly; its revenue from the sale of its share of the output of the joint operation; its share of the
revenue from the sale of the output by the joint operation; and its expenses, including its share of any
expenses incurred jointly.
When the Company, as a joint operator, invests in or sells assets to a joint operation (such assets do
not constitute businesses, the same below), or purchases assets from the joint operation, the Company
only recognizes the portion of the profits and losses arising from such transactions that is attributable to
other participants in the joint operation before such assets are sold to third parties. If such assets are
subject to asset impairment losses stipulated in the Accounting Standards for Business Enterprises No.8
of Asset Impairment, etc., in case that the Company invests in or sells assets to the joint operation, the
Company will fully recognize such losses incurred thereof; in case that the Company purchases assets
from 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 be
used to make payment at any time, should be confirmed as the cash. The investment, having four features
of short duration (expired within three months from the acquisition date), strong mobility, being easy to
be changed into known cash, low value change risk at the same time, should be confirmed as the cash
equivalent.
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 approximate
exchange rate of the spot exchange rate on transaction date as the exchange rate for conversion. The
balance of foreign-currency monetary items on the date of balance sheet will be converted with the spot
exchange rate on the date of balance sheet, and the balance of exchange arising from hereof will be
recorded in the gain or loss of the current period, except for that the balance of exchange arising from
special foreign-currency loan related to the purchasing and construction of assets meeting capitalization
conditions 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 the
date of balance sheet; for the owner’s equity, except for “undistributed profit”, all the other items will be
converted with the spot exchange rate when they are incurred. The revenue item and the expense item in
the Profit Statement are converted with the approximate exchange rate of the spot exchange rate on
transaction date.
For disposal of foreign business operation, the balance from conversion of foreign-currency financial
statements related to such foreign operation shall be transferred from owner’s equity to the gain or loss of
the very period of disposal. Sino Great Wall Co., Ltd. 2018 Annual Report
220
10. Financial Instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
(1) Classification of Financial Instruments
When initially confirmed, financial assets and financial liabilities are classified into: Financial assets
or financial liabilities measured with fair value and having the change of fair value recorded in the gain or
loss of current period, including tradable financial assets or financial liabilities, and financial assets or
financial liabilities directly specified to measure with fair value and having the change of fair value
recorded 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 Instruments
①Financial assets (financial liabilities) measured with fair value and having the change of fair value
recorded in the gain or loss of current period
When they are obtained, fair value (after deduction of cash dividends already declared but not paid yet, or
bond interests with interest payment period expired but having not been acquired) will be taken as initial
confirmed amount, and relevant transaction expenses will be recorded in the gain or loss of the current
period.
During the holding period, the interests or cash dividends obtained will be confirmed as investment
yield, and at the end of period, the change of fair value will be recorded in the gain or loss of the current
period.
During disposal, the balance between the fair value and initial amount entered into account will be
confirmed 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 interest
payment period expired but having not been acquired) and relevant transaction expanses will be taken as
initial confirmed amount.
During the holding period, interest income will be calculated and confirmed as per amortized cost
and actual interest rate, and recorded in investment yield. The actual interest rate will be determined when
being obtained, and maintained unchanged during the predicted survival period or applicable shorter
period.
During disposal, the balance between the acquisition price and the book value of such investment
will 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 labor
services, and the other enterprises’ creditor’s rights held by the Company and excluding the debt
instruments 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 confirmed
amount; if the receivables have financing nature, they will be initially confirmed as per their present
value.
In case of recovery or disposal, the balance between the acquisition price and the book value of
accounts 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 but
not paid yet, or bond interests with interest payment period expired but having not been acquired) and
relevant transaction expenses will be taken as initially confirmed amount. Sino Great Wall Co., Ltd. 2018 Annual Report
221
During the holding period, the interests or cash dividends obtained will be confirmed as investment
yield. At the end of period, they will be measured as per fair value, and the change of fair value will be
recorded in other composite benefit. However, the equity instrument investments which have no offer in
active market and of which the fair value cannot be reliably measured, and the derived financial assets
which are linked with the equity instruments and settled through delivery of the equity instruments will be
measured as per cost.
During disposal, the balance between the acquisition price and the book value of financial assets will
be recorded in the gain or loss of investment; meanwhile, the amount of corresponding disposal part and
originally recorded in the accumulative amount of change in the fair value of other composite benefit
directly 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 confirmed
amount. 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 ownership
of such financial assets to the transfer-in party, the Company will terminate the confirmation of the
financial assets; if the Company reserves nearly all risks and rewards on the ownership of the financial
assets, the Company will not terminate the confirmation of such financial assets.
When judging whether the transfer of financial assets meets the above-mentioned conditions for
terminating 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 partial
transfer of financial assets. If the overall transfer of financial assets meets the conditions for termination
of confirmation, the balance of the following two amounts will be recorded in the gain or loss of the
current 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 in
the fair value originally recorded in the owner’s equity directly (involving the circumstance that the
financial assets transferred are available-for-sale financial assets);
If partial transfer of financial assets meets the conditions for termination of confirmation, the overall
book value of the financial assets transferred will be amortized between the confirmation-terminated part
and non-confirmation-terminated part as per respective relative fair value, and the balance of the
following 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 corresponding
confirmation-terminated part in the accumulative amount of change in the fair value originally recorded
in the owner's equity directly (involving the circumstance that the financial assets transferred are
available-for-sale financial assets);
If the transfer of financial assets does not meet the conditions for termination of confirmation, the
financial assets will be confirmed continuously, and the consideration received will be confirmed as a
financial liability.
(4) Conditions for Terminating the Confirmation of Financial Liabilities
If the current obligation of financial liabilities is rescinded completely or partially, the confirmation
of such financial liabilities or part of them will be terminated; if the Company signs an agreement with
creditors to replace the existing financial liabilities by means of undertaking new financial liabilities, and
the contract clauses for new financial liabilities are substantially different from the contract clauses for Sino Great Wall Co., Ltd. 2018 Annual Report
222
existing financial liabilities, the confirmation of the existing financial liabilities will be terminated, and
new financial liabilities will be confirmed at the same time.
If all or partial contract clauses for existing financial liabilities are amended substantially, the
confirmation of the existing financial liabilities or part of them will be terminated, and meanwhile, the
financial 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 between
the book value of the financial liabilities of which the confirmation is terminated and the consideration
paid (including non-cash assets transferred out or the new financial liabilities undertaken) will be
recorded 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 will
distribute the overall book value of the financial assets according to the relative fair value of the part
confirmed continuously and the confirmation-terminated part. The balance between the book value
distributed to the confirmation and the consideration paid (including non-cash assets transferred out or the
new 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 offer
in the active market. For financial instruments not having an active market, their value will be determined
by estimation technique. In case of estimation, the Company will adopt estimation techniques which are
applicable 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 participants
in 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 input
values cannot be obtained or such values obtained are not practicable.
(6) Method for Testing and Accounting Treatment of Depreciation of Financial Assets (Excluding
Accounts Receivable)
Except for the financial assets measured with fair value and having the change of fair value recorded
in the gain or loss of the current period, the Company checks the book value of financial assets on the
date of balance sheet. If some objective evidence proves that some financial asset depreciates, the
Company 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 such
trend 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 the
accumulative 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, the
fair value rises and the rise is objectively related to the matters occurring after confirmation of original
impairment loss, then the originally confirmed impairment loss will be transferred back and recorded in
the gain or loss of the current period.
The impairment loss on available-for-sale equity instrument investments will not be transferred back
through gain or loss.
② Impairment reserve for held-to-maturity investments:
Held-to-maturity investments Sino Great Wall Co., Ltd. 2018 Annual Report
223
11. Notes Receivable and Accounts Receivable
(1) Accounts Receivable with Significant Single Amount and Having Bad Debt Reserve Withdrawn
Independently:
Judgment basis or amount standard of significant single
amount
The Company recognizes accounts receivable for a single
project with the balance ≥ RMB 10 million and other accounts
receivable from a single relevant unit with the balance ≥ RMB
2 million as accounts receivable with significant single
amount.
Method for withdrawal of bad debt reserve with significant
single amount and withdrawn independently:
The Company will carry out impairment test independently for
accounts receivable with significant single amount. If such
accounts receivable are proved impairing through the test, the
Company will determine the impairment loss and withdraw
bad debt reserve according to the balance that the present value
of its future cash flow is lower than its book value. The
accounts receivable not impairing as proved in single test, will,
together with the accounts receivable with insignificant single
amount, be divided into many portfolios according to similar
credit risk characteristics. Then according to certain proportion
of the balance on the date of balance sheet of the portfolios of
these accounts receivable, the Company will calculate and
determine impairment loss and withdraw bad debt reserve.
(2) Accounts Receivable with Bad Debt Reserve Withdrawn as per the Portfolios Classified Based on Credit Risk
Characteristics:
Portfolio name Method for withdrawal of bad debt reserve
Account aging portfolio Account age analysis method
Combination of affiliated parties within the range of
consolidation
Those with bad debt reserve withdrawn by means of account analysis in the portfolios:
√ Apply □ Not Apply
Account age Withdrawal rate of accounts receivable Withdrawal rate of other receivables
Within 1 year (inclusive) 5.00% 5.00%
1-2 years 10.00% 10.00%
2-3 years 30.00% 30.00%
3-4 years 50.00% 50.00%
4-5 years 80.00% 80.00%
More than 5 years 100.00% 100.00%
Those with bad debt reserve withdrawn by means of percentage of total accounts receivable outstanding: Sino Great Wall Co., Ltd. 2018 Annual Report
224
√ Apply □ Not Apply
Those 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 Industry
Information Disclosure — Civil Engineering of Listed Companies.
Reasons for independent withdrawal of bad debt reserve On the date of balance sheet, for the other accounts receivable
with insignificant single amount and having obvious sign of
impairment, the Company will determine impairment loss and
withdraw bad debt reserve according to the balance that the
present value of their future cash flow is lower than their book
value.
Method for withdrawal of bad debt reserve On the date of balance sheet, the Company will execute
impairment test of the accounts receivable with insignificant
single amount but having bad debt reserve withdrawn
separately. If such accounts receivable are proved impairing
during the test, the Company will determine impairment loss
and withdraw bad debt reserve according to the balance that
the present value of their future cash flow is lower than their
book value.
12. Inventories
Whether the Company needs to comply with disclosure requirements of special industries
Yes
Civil Engineering
(1) Classification of Inventories
Inventories mainly include raw materials, engineering construction, merchandise inventory,
work-in-process, low value consumables, etc.
(2) Method for Pricing of Inventories Delivered
During 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 Inventories
For commodity stocks directly for sale, such as finished products, merchandise inventory, and
materials for sale, etc., their net realizable value is confirmed during normal production and operation as
per the amount after deduction of estimated selling expenses and relevant taxes from the estimated sales
price of such inventories; for material stocks needing processing, their net realizable value will be
determined during normal production and operation as per the amount after deduction of costs estimated
to incur until completion of work, estimated selling expenses and relevant taxes from the estimated sales
price 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 inventories
held is more than the quantity ordered under sales contract, the net realizable value of the excessive
inventory will be calculated based on general sales price. Sino Great Wall Co., Ltd. 2018 Annual Report
225
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 be
withdrawn by the type of inventory; for inventories related to the product series produced and sold in a
same region, having the same or similar final use or objective, and difficult to measure by separating from
other items, inventory depreciation reserve will be withdrawn in a consolidated way. Except for that some
conclusive evidence proves abnormality of market price on the date of balance sheet, the net realizable
value 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 the
market 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-off
method is adopted for packing.
13. Assets Held for Sale
The Company classifies the non-current assets or disposal group meeting the following conditions as
assets held for sale:
(1) Based on the practice of selling such assets or disposal groups in similar transactions, they can be
sold immediately under current conditions;
The sale is very likely to happen, that is, the Company has already made a resolution on a sales plan
and obtained an assuring purchase commitment and it is expected that the sale will be completed within
one year. Where regulations require the approval of relevant power organ or regulatory department of the
Company 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 the
control right before being decided. If the Company and other joint operators impose common control on
invested units and have the right to the invested units’ net assets, the invested units will be the Company’s
joint ventures.
Significant influences indicate having the right to participate in making decisions on an enterprise’s
financial affairs and business operation, but could not control or jointly control together with other parties
the making of these policies. If the Company could impose significant influences on invested units, the
invested 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 by
paying cash, transferring non-cash assets or undertaking debts and issuing equity securities, the Company
will take the book value shares of the combined party’s owners’ equity obtained on the date of
combination in the final controller’s consolidated financial statements as the initial investment cost of
long-term equity investments. If the Company could impose control on invested units under the same
control for reason of additional investment, etc., the Company will confirm on the date of combination the Sino Great Wall Co., Ltd. 2018 Annual Report
226
initial investment cost of long-term equity investments as per the book value shares of the combined
party’s net assets to be enjoyed in the final controller’s consolidated financial statements after
combination. For the balance between “the initial investment cost of long-term equity investments on the
date of combination” and “the sum of the book value of long-term equity investments before combination
and 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 to
write down, the Company will write down the retained benefits.
Business combination not under the same control: The Company takes the combination cost
determined on the date of purchasing as the initial investment cost of long-term equity investments. If the
Company could impose control on invested units not under the same control for reason of additional
investment, etc., the Company will take the sum of the book value of originally held equity investments
and the newly increased investment cost as the initial investment cost of long-term equity investments
which 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 price
actually paid will be taken as initial investment cost.
For long-term equity investments obtained by issuing equity securities, the fair value of the equity
securities issued will be taken as initial investment cost.
In the precondition that non-monetary asset exchange has business nature, and the fair value of
exchanged-in or exchanged-out assets could be measured reliably, the fair value of exchanged-out assets
and relevant expenses payable will be determined as the initial investment cost of the long-term equity
investments obtained from non-monetary assets exchange, unless some conclusive evidence proves that
the fair value of exchanged-in assets is more reliable; for non-monetary assets exchange not meeting the
above-mentioned precondition, the book value of exchanged-out assets and relevant taxes payable shall
be 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 cost
will 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 when
investments are obtained, and already announced but not paid, the Company confirms the investment
yield of the very period according to the cash dividends or profits enjoyed by the Company and declared
to 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 associates
and joint ventures. For the balance that the initial investment cost is bigger than the fair value shares of
invested units’ distinguished net assets which shall be enjoyed by the Company, the Company will not
adjust the initial investment cost of long-term equity investments; for the balance that the initial
investment cost is smaller than the fair value shares of invested units’ distinguished net assets which shall
be enjoyed by the Company, the Company will adjust the book value of long-term equity investments and
record it in owner’s equity.
When confirming the shares of invested units’ net gain or loss to be enjoyed, the Company will
adjust 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 Sino Great Wall Co., Ltd. 2018 Annual Report
227
policies and fiscal period. If the invested units prepare consolidated financial statements during the
holding of investments, the accounting will be conducted based on the amount attributing to the invested
units in the net profit in the consolidated financial statements, other composite benefits, and changes of
other owner’s equity.
For the gain or loss on the non-realized internal transactions between the Company and jointly-run
enterprises/ joint ventures, the part attributing to the Company will be calculated as per the proportion to
be enjoyed, will be written down, and on this basis, the investment yield will be confirmed. The gain or
loss on non-realized internal transactions done with invested units will be fully confirmed if belonging to
asset impairment loss. During the period of holding investment, as for the invested entity preparing
consolidated financial statements, carry out accounting based on the invested entity’s attributable amount
of the net profit, other comprehensive income and other changes in equity in the consolidated financial
statements.
The unrealized gains or losses on internal transaction occurring among the company, associates and
joint ventures will confirm the investment income on the basis of offsetting the company’s attributable
part calculated according to the entitlement proportion. The unrealized losses on internal transaction
occurring in the invested entity belonging to assets impairment loss will be confirmed in full amount. If
the assets of investment or asset-sale transactions occurring among the company, associates and joint
ventures constitute the business, the accounting treatment shall be carried out according to the related
policies disclosed in “IV . (4) Method for Accounting Treatment of Business Combination under and Not
under 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 the
order as follows: firstly, the book value of long-term equity investments will be offset. Secondly, if the
book value of the long-term equity investment is not sufficient to be offset, the recognition of losses of
the investment will be continued to the extent of the book value of other long-term rights and interests
which substantially form the net investment made to the invested entity, and the book value of long-term
accounts receivable will be offset. Finally, after the above-mentioned treatment, if the Company still
undertakes extra obligations according to the provisions of investment contract or agreement, the
Company will confirm accrued liabilities with obligations predicted to undertake, and record them in the
investment 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 actual
acquisition 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 such
investments are disposed, the part originally recorded in other composite benefits will be subject to
accounting treatment according to corresponding proportion and on the same basis adopted by invested
units to directly dispose relevant assets or liabilities. The owner’s equity confirmed for change of other
owner’s equity except for net gain or loss, other composite benefit and profit distribution of invested units
will be carried forward into the gain or loss of the current period, excluding the other composite benefits
arising from the change of net liabilities or net assets of invested units’ new measurement and setting of
benefit plan.
If the Company loses common control or significant influences on invested units for reason of
disposal of partial equity investments, etc., the remained equity after disposal will be subject to
accounting according to the standards for the confirmation and measurement of financial instruments, and
the balance between the fair value and book value of such remained equity investments on the date when
the Company losing common control or significant influences will be recorded in the gain or loss of the Sino Great Wall Co., Ltd. 2018 Annual Report
228
current period. Other composite benefits confirmed for accounting with equity method of original equity
investments will be subject to accounting treatment with the same basis adopted by invested units to
directly dispose relevant assets or liabilities when the accounting with equity method is terminated. The
owner’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 current
period 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 proportion
of the company, when preparing certain financial statement, the residual equity shall be checked by equity
method if having common control or major effect on invested unit, and adjusted as the residual equity is
checked by the equity method from being obtained; If the remaining equity cannot exert joint control or
significant influence on the invested unit, it shall take accounting treatment according to the relevant
provisions of financial tools and measurement rules, and the difference between the fair value and book
value 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, the
other composite benefits and other owner’s equity confirmed for accounting with equity method of the
equity investments held before the date of purchasing will be carried forward by proportion; if the
remained equity after disposal is subject to accounting treatment according to the standards for
confirmation and measurement of financial instruments, the other composite benefits and other owner’s
equity will be carried forward completely.
15. Investment Real Estate
Investment real estate measurement model
Costing accounting
Method of depreciation or amortization
The company's investment real estate includes the land use right held and prepared to transfer after
increment, the buildings already leased (including the buildings used for leasing after completion of
self-construction or development activities, and buildings in construction or development and to be used
for leasing in future).
The Company adopts cost mode to measure the existing investment real estates. For investment real
estate measured with cost mode – the buildings used for leasing, the Company will adopt the depreciation
policy, which is the same for fixed assets, and for the land use right for leasing, the Company will adopt
the amortization policy which is the same for intangible assets.
16. Fixed Assets
1. Fixed asset recognition conditions
Fixed assets indicate the tangible assets held for producing goods, rendering labor services, leasing or operation management, and having a
service 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. Sino Great Wall Co., Ltd. 2018 Annual Report
229
2. Depreciation method for various fixed assets
Type Depreciation method
Depreciation life
(Year)
Salvage rate (%)
Annual depreciation
rate (%)
House and buildings Straight-line method
20 5 4.75
Mechanical equipment Straight-line method
10 5 9.5
Transportation
equipment
Straight-line method
7 5 13.57
Electronic equipment
and other equipment
Straight-line method
3-5 5 19.00-31.67
3. Recognition basis and valuation method for fixed assets under financing lease
Where the leasing agreement signed between company and the lessor specifies either of the conditions as follows, the lease will be
recognized 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 becomes
exercisable;
(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 of
the 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, whichever
is 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-term
accounts 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 requirements
Yes
Civil 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 fixed
assets 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 such
assets into fixed assets as per estimated value and based on engineering budget, construction cost, or
actual cost of engineering, etc., and will withdraw fixed asset depreciation according to the Company’s
policy for fixed asset depreciation; after handling of completion settlement, the Company will adjust
original temporarily estimated value as per actual cost, but will not adjust originally withdrawn
depreciation amount. Sino Great Wall Co., Ltd. 2018 Annual Report
230
18. Borrowing Costs
Borrowing costs include loan interest, discount or premium amortized, auxiliary expense, and
exchange 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 of
assets 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 period
as per their amount incurred when they are incurred.
Assets meeting capitalization conditions indicate the fixed assets which need to experience quite a
long term of construction or production activities before reaching the predetermined usable or salable
state, 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 construction
or production of assets meeting capitalization conditions, transfer of non-cash assets, or undertaking of
interest-bearing debts;
(2) Borrowing costs have occurred;
(3) The purchasing and construction or production activities necessary for making assets reach
predetermined 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 borrowing
costs starts to the time point when capitalization stops, excluding the period when the capitalization of
borrowing costs is suspended.
If the assets purchased and constructed or produced and meeting capitalization conditions reach the
predetermined usable or salable state, the capitalization of borrowing costs will stop.
If some items of the assets purchased and constructed or produced and meeting capitalization
conditions are completed separately and could be used independently, the capitalization of borrowing
costs for such assets will stop.
If each part of the assets purchased and constructed or produced is completed respectively, but
cannot be used or sold until the whole assets are completed, the capitalization of borrowing costs may be
stopped when the assets are totally completed.
3. Period for suspension of capitalization
If the assets meeting capitalization conditions are broken abnormally during purchasing and
construction or production process, and the suspension lasts for more than 3 months successively, the
capitalization of borrowing costs will be suspended; if such suspension is a necessary procedure for
making the assets purchased and constructed or produced and meeting capitalization conditions reach the
predetermined usable state or salable state, the capitalization of borrowing costs will continue. The
borrowing 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 or
production 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 meeting
capitalization conditions, the capitalized amount of borrowing costs will be determined as per the amount
after “the borrowing costs actually incurred in the very period of special loan” minus “the interest income
obtained from bank deposit or the investment yield obtained from temporary investment of the non-used Sino Great Wall Co., Ltd. 2018 Annual Report
231
loan fund”.
For general loans occupied for purchasing and construction or production of assets meeting
capitalization conditions, the borrowing costs amount to be capitalized of general loans shall be calculated
and determined as per the “weighted mean of asset expenditure that accumulative asset expenditure
exceeds the special loan” multiplied by the capitalization rate of general loan. The capitalization rate is
generally 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 controlled
by the Company. The intangible assets of the Company mainly include land use right and software
royalty.
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 other
expenditures directly for making the assets reach the predetermined use. If the price for purchasing
intangible assets is delayed in payment by exceeding normal credit conditions, and the intangible assets
have financing nature substantially, the cost of intangible assets will be determined based on the present
value 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 balance
between the book value of reorganized debts and the fair value of the intangible assets used for repaying
debts 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 fair
value of exchanged-in or exchanged-out assets could be measured reliably, the entry value of the
intangible assets obtained from non-monetary asset exchange will be determined based on the fair value
of exchanged-out assets, unless conclusive evidence proves that the fair value of exchanged-in assets is
more reliable; for the non-monetary asset exchange not meeting the above-mentioned precondition, the
book value of exchanged-out assets and relevant taxes payable will be taken as the cost of exchanged-in
intangible 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 period
when they bring about economic benefits for the enterprise; if it’s impossible to predict the period when
the intangible assets could bring about economic benefits to the enterprise, the intangible assets will be Sino Great Wall Co., Ltd. 2018 Annual Report
232
deemed to have uncertain service life, and won’t be amortized.
2. Estimate on the service life of intangible assets with limited service life:
Items Service life Amortization method
Software royalty 5 years Straight-line method
Land use right 50 years Straight-line method
At the end of every year, the Company checks the service life and amortization method of the
intangible assets with limited service life. As checked, the service life and amortization method of
intangible 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 the
expenditure at research stage and expenditure at development stage.
Research stage: The stage of unique and planned investigation and research activities conducted for
obtaining and understanding new scientific or technological knowledge.
Development stage: The stage of applying research findings or other knowledge to some plan or
design, in order to produce new or substantially improved materials, devices and products, etc. before
commercial 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 be
confirmed 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 or
sale;
(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 such
intangible 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 the
completion of the development of such intangible assets, and the Company has the ability to use or sell
such intangible assets.
(5) The expenditure attributing to the development stage of such intangible assets could be measured
reliably.
22. Long-term Asset Impairment
If there is any sign of impairment in long-term equity investments, investment real estates measured
by the cost model, fixed assets, construction in progress, intangible assets with finite service life and other Sino Great Wall Co., Ltd. 2018 Annual Report
233
long-term assets at the balance sheet date, an impairment test will be made. If the result of impairment
test proves that the recoverable amount of assets is lower than their book value, the depreciation reserve
will be withdrawn as per their balance and recorded in the impairment loss. The recoverable amount
indicates the net amount after the fair value of assets minus the disposal expenses, and the present value
of predicted future cash flow of the assets, whichever is higher. Asset depreciation reserve is calculated
and 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 assets
belong. Asset portfolio indicates the minimum asset group which could independently produce cash
inflows.
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 goodwill
formed from business combination to relevant asset group by reasonable means since the date of
purchasing; if it is difficult to amortize the book value to relevant asset group, the Company will amortize
it to relevant asset group, the Company will amortize it to relevant asset group portfolio. When the book
value of goodwill is amortized to relevant asset group or asset group portfolio, the Company will execute
amortization as per the proportion of the fair value of each asset group or asset group portfolio to the total
fair 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 or
asset 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 including
goodwill, 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 corresponding
impairment loss. And then conduct impairment test on asset groups or asset group combination with
goodwill, compare book values of relevant asset groups or asset group combination (including the book
value of amortized goodwill) with recoverable amounts, if the recoverable amounts of relevant asset
groups or asset group combination are lower than their book values, the impairment loss of goodwill will
be recognized. Once any loss of asset impairment is recognized, it shall not be turned back in the future
accounting period.
23. Long-term Deferred Expenses
Long-term deferred expenses indicate various expenses having been incurred, to be shared in present
period 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 Compensation
1. Accounting Method of Short-Term Remuneration
During the fiscal period when employees provide services for the Company, the Company confirms
the short-term remuneration incurred actually as liabilities, and records them in the gain or loss of the Sino Great Wall Co., Ltd. 2018 Annual Report
234
current period or the cost of relevant assets.
For the social insurance premiums and housing fund paid by the Company for employees, the trade
union outlay and employee education outlay withdrawn as per regulations, the Company calculates and
determines corresponding amount of employees’ remuneration as per the withdrawal basis and
withdrawal proportion regulated during the fiscal period when employees provide services for the
Company.
If employees’ welfare expense is non-monetary welfare and could be measured reliably, they will be
measured 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 for
employees according to relevant provisions of local government, the amount payable will be calculated as
per the base amount and proportion of payment regulated by local place and recorded in the gain or loss
of the current period or the cost of relevant assets during the fiscal period when the employees provide
services for the Company.
3. Accounting Method of Dismissal Welfare
If being unavailable to unilaterally revoke the dismissal welfare provided for rescission of labor
relationship plan or staff cut-down suggestions, or when confirming the costs or expenses related to
reorganization involving the payment of dismiss welfare (whichever is earlier), the Company will confirm
the employee compensation liabilities arising from dismiss welfare, and record them in the gain or loss of
the 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 to
accounting treatment in accordance with the defined contribution plans; otherwise shall be subject to accounting treatment in accordance
with 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 confirm
such 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 of
the Company;
(3) The amount of such obligations could be measured reliably.
2. Measures for Measurement of Various Accrued Liabilities Sino Great Wall Co., Ltd. 2018 Annual Report
235
The Company initially measures the accrued liabilities as per the optimum estimated amount of
expenditures necessary for implementation of relevant current obligations.
When determining the optimum estimated amount, the Company comprehensively considers the
risks related to contingencies, uncertainty, time value of money, and other factors. If the time value of
money has significant influences, the optimum estimated amount will be determined after discounting
with 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 to
occur is the same within this scope, then the optimum estimated amount will be determined as per the
middle 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 amount
which will occur most possibly; if contingencies involve multiple items, the optimum estimated amount
will 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 compensate
by third parties fully or partially, then the compensation amount will be confirmed independently as assets
when being ascertained basically available to receive, and the compensation amount confirmed won’t be
more 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 equity
instruments or undertaking equity-instrument-based liabilities to obtain the services provided by
employees [or other parties]. The Company’s share-based payment is divided into the share-based
payment 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 be
measured with the fair value of the equity instruments granted to employees. If the Company makes
share-based payment with restricted shares, then the shares subscribed with investment by employees
shall not be circulated in the market or transferred before meeting unlocking conditions and being
unlocked; if the unlocking conditions regulated in the final Stock Incentive Plan are not satisfied, the
Company will buy back shares at the predetermined price. When obtaining the money paid by employees
for subscribing restricted shares, the Company will confirm capital stock and capital reserve (capital stock
premium) as per the stock subscription money obtained, and meanwhile, will confirm a liability and
inventory stock as per the full amount of buyback obligation. On every date of balance sheet within the
waiting period, the Company will make the optimum estimate on the quantity of exercised equity
instruments according to follow-up information such as the latest acquired change in the number of
right-exercising employees, whether meeting regulated performance conditions, etc., on this basis, and
according to the fair value on the date of granted, the Company will record the services obtained in the
very period in relevant cost or expense, and increase capital reserve correspondingly. After exercising
date, the Company will not adjust the total amount of relevant confirmed cost or expense and owner’s
equity. However, it’s available to exercise rights immediately after being granted, it will be recorded in
relevant cost or expense as per fair value on the date of granted, and capital reserve will be increased
correspondingly. Sino Great Wall Co., Ltd. 2018 Annual Report
236
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 whether
market conditions or non-excisable conditions are satisfied, if only non-market conditions among
excisable conditions are satisfied, it will be deemed as excisable. If the clauses of share-based payment
settled with equity are amended, the services obtained will be confirmed at least according to the clauses
before amendment. In addition, any amendment increasing the fair value of equity instruments granted, or
alterations beneficial for employees on the date of amendment will be confirmed as increase of services
obtained.
If share-based payment settled with equity is cancelled, the Company will treat it as accelerated
exercise on the date of cancellation, and confirm the non-confirmed amount immediately. If employees or
other parties could choose to meet non-exercisable conditions, but do not meet such conditions within
waiting 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 to
replace the cancelled equity instruments on the granted date of the new equity instruments, the granted
alternative equity instruments will be treated by the means the same as those for amending the terms and
conditions 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 Industry
Information 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 out
effective 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 from
provision of labor transactions can be estimated reliably, the revenue shall be recognized as per the important milestones specified by the
design contract. Namely, the revenue is recognized as per the percentage of the workload of important milestones of the completed design in
the 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 according
to 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 Sino Great Wall Co., Ltd. 2018 Annual Report
237
signed by the Company with other enterprises, sales of commodity and provision of labor shall be separately disposed. Provided that sales of
commodity and provision of labor cannot be distinguished, or can be distinguished but cannot be separately measured, the entire contract
shall be disposed as sales of commodity.
(2) Income from construction contracts
Under the circumstance that the outcome of a construction contract can be estimated in a reliable way, the contract revenue and the
contract costs shall be recognized in light of the percentage-of-completion method on the date of the balance sheet. The percentage of
completion 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 contract
revenue shall be recognized in accordance with the recoverable actual contract costs and the contract costs shall be recognized as contract
expenses in the current period they are incurred; if the contract costs cannot be recovered, they shall be recognized as contract expenses
immediately when they are incurred and no contract revenue shall be recognized. If uncertainties, due to which the outcome of a construction
contract cannot be measured in a reliable way, have passed out of existence, the revenues and expenses pertinent to the construction contract
shall 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 price
are presented in the balance sheet with a net amount after offset. The part of the sum of the cost and the gross profit (loss) accumulatively
incurred from a construction-in-progress contract exceeding over the settled contract price is presented as inventory; and the part of the
settled contract price exceeding over the cost and the gross profit (loss) accumulatively incurred from a construction-in-progress is presented
as 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 of
patient’s settlement.
For the outpatient income, as the patients turning to the outpatient treatment do not need the inpatient treatment generally, the
treatment 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 shall
be 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, the
income from the inpatient is recognized financially.
29. Governmental subsidy
A government subsidy means the monetary or non-monetary assets obtained free by this company
from the government. Government subsidies consist of the government subsidies pertinent to assets and
government subsidies pertinent to income.
The assets-related government subsidy refers to government subsidies that are obtained by the
Company used for purchase or construction, or forming the long-term assets by other ways. Government
subsidies pertinent to income refer to the governmental subsidies except governmental subsidies pertinent
to 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 the
received amount or the receivable amount. If a governmental subsidy is a nonmonetary asset, it shall be
measured 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 Sino Great Wall Co., Ltd. 2018 Annual Report
238
current profits and losses.
2. Accounting treatment
Governmental subsidy related to assets will be used to write down the book value of relevant assets
or be confirmed as deferred income. If being confirmed as deferred income, the governmental subsidy
will be recorded in the gain or loss of the current period within the service life of relevant assets with
reasonable and systematic methods (if being related to the Company’s daily activities, the governmental
subsidy 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 subsidy
The income-related government subsidy, if being used to compensate the Company’s relevant cost
expenses or losses in later period, will be confirmed as deferred income, and be recorded in the gain or
loss of the current period (if being related to the Company’s daily activities, the governmental subsidy
will be recorded in other benefits; if not, they will be recorded in non-operating income) or be used to
write down relevant cost expenses or losses during the period of confirmation on relevant cost expenses
or 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 being
related to the Company’s daily activities, the governmental subsidy will be recorded in other benefits; if
not, they will be recorded in non-operating income) or be used to write down relevant cost expenses or
losses.
30. Deferred Income Tax Assets/Deferred Income Tax Liabilities
For deductible temporary difference, deferred income tax assets will be confirmed within the limit of
the taxable income which will probably be obtained in future period and be used to offset deductible
temporary difference. As for deductible losses and taxes rebate which could be carried forward to later
years, corresponding deferred income tax assets will be confirmed within the limit of the future taxable
income which will probably be obtained to offset deductible losses and taxes.
For taxable temporary difference, deferred income tax liabilities will be confirmed except for under
special circumstances.
The special circumstances under which deferred income tax assets or deferred income tax liabilities
are not confirmed include: the initial confirmation of goodwill; other transactions or matters (except for
business combination) of which the occurrence won’t affect accounting profit or taxable income (or
deductible loss).
If the Company has statutory right to settle with net amount, and has the intention to settle or obtain
assets with net amount, and the discharge of debts is conducted simultaneously, the income tax assets of
the current period and the income tax liabilities of the current period will be presented with the net
amount after offsetting.
If the Company has the statutory right to settle the income tax assets of the current period and the
income tax liabilities of the current period with net amount, and the deferred income tax assets and
deferred income tax liabilities are related to the income tax levied by a same tax administration
department from a same tax payment subject, or are related to different tax payment subjects, but in every
important period when deferred income tax assets and liabilities are transferred back in future, if the tax
payment subjects involved intend to settle the income tax assets and liabilities of the very period with net
amount or to obtain assets and discharge liabilities simultaneously, deferred income tax assets and
deferred income tax liabilities will be presented with the net amount after offsetting. Sino Great Wall Co., Ltd. 2018 Annual Report
239
Leasing
1. Accounting treatment method for operating lease
(1) The rent paid by the Company for rented assets will be amortized with straight-line method
within the whole lease term including the rent-free period, and recorded in the expense of the current
period. The initial direct expenses paid by the Company and related to leasing transaction will be
recorded in the expense of the current period.
If the asset lessor undertakes the lease-related expenses which shall be assumed by the Company, the
Company 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-line
method 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 the
expense of the very period; if the amount is relatively big, the amount will be capitalized, and will be
recorded in the income of the very period by installments within the whole lease term on the basis same
as that for confirmation of lease-related income.
If the Company undertakes lease-related expenses which shall be undertaken by the lessee, the
Company will deduct such expenses from the total amount of rent income, and distributed the remained
rent 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 the
fair value of rented assets and the present value of minimum rent payment, whichever is lower, as the
entry value of rented assets, takes the minimum rent payment as the entry value of long-term accounts
payable, and takes the balance as non-confirmed financing expense. The Company adopts actual interest
rate method to amortize the non-confirmed financing expenses within the asset lease term, and records
them in financial expenses. The Company records the initial direct expenses incurred in the value of
rented assets.
(2) Assets leased out through finance lease: On the date when leasing starts, the Company confirms
the balance between “the sum of finance lease account receivable and non-guaranteed balance” and their
present value as non-realized financing income, and confirms it as lease income within each future period
when rents are received. The Company records the initial direct expenses related to leasing transaction in
the initial measured amount of finance lease account receivable, and reduces the income amount
confirmed 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 book
value of the statement items that cannot be accounted accurately due to the uncertainty of business activities. Based on
the past experience of the company's management and other relevant factors, these judgments, estimates, and
assumptions will impact the disclosure of reported amount of income, expenses, assets, and liabilities and the contingent
liabilities on the balance sheet date. However, there may exists differences between the actual results caused by the
uncertainty of these estimates and the current estimates of the company's management, which may lead to a significant Sino Great Wall Co., Ltd. 2018 Annual Report
240
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 of
continuing operations. In case the changes of accounting estimates only impact the period of change, the impacted
number 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 statement
items 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 obligations
undertaken by the Company based on available evidence. If the management consider that there is such a possibility, and
they are able to make a reliable estimation of the expenditures required, then the Company will recognize the best
estimated amount of the expenditure required to fulfill the current obligations of the estimated liabilities as the accrued
liabilities. 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 policy
of receivables. The impairment of receivables is based on the recoverability of estimated receivables. The appraisal of
impairment of receivables requires the judgment and estimate of the management. The difference between the actual
result and the original estimate will affect the book value of the receivables and the withdrawal or transferal of the bad
debt 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 cost
and net realizable value. For the inventory with a cost higher than that of the net realizable value and the outdated
inventory, it will withdraw the inventory depreciation reserve. The impairment of inventory to net realizable value is
based on the marketability and the net realizable value of estimated inventory. The appraisal of inventory impairment
requires the management to make judgment and estimate on the basis of obtaining solid evidence and taking into account
the purpose of holding inventory and the impact of matters after the balance sheet date. The difference between the
actual result and the original estimate will impact the book value of inventory and the withdrawal or transferal of the
inventory 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 and
assumption of the management to a large extent to determine whether the impairment loss needs to be confirmed in the
income statement. When making judgments and assumptions, the Company needs to assess the degree and duration that
the fair value of the investment is lower than the cost, as well as the financial condition and short-term business outlook
of the invested objects, including the industry situation, technological innovation, credit rating, default rate and the risk
of 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 the
balance sheet date. For intangible assets with uncertain service life, impairment test should be conducted when there are
signs of impairment except the annual impairment test. The non-current assets other than financial assets will have
impairment tests when there is sign that their book value is unrecoverable. Sino Great Wall Co., Ltd. 2018 Annual Report
241
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 the
predicted future cash flow.
The net amount after the fair value minus the disposal expenses is confirmed as the amount after agreed sales price
of similar asset in a fair transaction or observable market price minus the incremental costs directly attributable to the
disposal of asset.
When estimating the present value of future cash flow, it is necessary to make judgments on the output, selling
price, relevant operating costs of the asset (or group of assets) and the discount rate to calculate the present value. The
Company will use all relevant material available when estimating the recoverable amount, including projections of
production, 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 future
cash flow of the asset groups or portfolio of asset groups apportioned with goodwill. When estimating the present value
of future cash flow, the Company shall estimate the cash flow generated by the future asset group or portfolios of asset
groups, 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 the
service life after considering the residual value of fixed assets and intangible assets. The Company shall regularly review
the service life to determine the amount of depreciation and amortization to be included in each reporting period. It shall
determine the service life based on the past experience of similar assets and expected technological updates. If there are
big 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 losses
with enough taxable profits. This requires the management of the Company to make many judgments to estimate the
time and amount of future taxable profits to determine the amount of deferred income tax assets in combination with tax
planning strategy.
(8) Income tax
There is some uncertainty in the final tax treatment and calculation of some deals in the company’s normal
business activities. Whether part of the projects can be itemized before tax need the approval of the tax department. If
there is difference between the final result confirmed of these tax matters and the original estimated amount, then the
difference 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 is
in 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 been
accounted 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 3.8529
million yuan. As a result, the cost in 2016 was 1.9885 million yuan less, and the cost in 2017 was RMB 3.8529
yuan less. Sino Great Wall Co., Ltd. 2018 Annual Report
242
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 VAT
invoice, with a total amount of 42.9313 million yuan. As a result, the payable income tax of the Company in
2017 was 6.4397 million yuan less.
(2) Methods of correction of accounting error and its impact on financial statement
Considering that the amount of the above accounting errors is not significant, and has little impact on the
company's assets liabilities at relevant time and the profits and losses during the period, the Company will adopt the
prospective application method to correct the accounting errors. The impact on the 2018 financial statement is as
follows:
Matters Have an impact
or not
The impacted statement item Corrected amount
Intertemporal claim income No
Cost paid by personal cards
Yes
Administration expense of 2018 +5,841,400.00
Other account payable of 2018 +5,841,400.00
Illegal cost invoice
Yes
Income tax of 2018 +6,439,691.12
Tax payable of 2018 +6,439,691.12
33. Correction of Important Accounting Policies and Accounting Estimates
(1) Correction of Important Accounting Policies
√ Applicable □ Not applicable
Contents of and reasons for change of
accounting policies
Approval procedures Notes
According to the provisions of the Notice of the Ministry of Finance on the Revision and Issuance of
the Format of Financial Statement of General Enterprises in 2018, (CK (2018) No. 15), the format of
financial statement of general enterprises has been revised. The Company has prepared financial
statements in the reporting period in accordance with the new reporting format stipulated by the Ministry
of Finance. The specific subjects and amount affected are listed as follows:
No. Name of the affected statement item Affected
amount
Retroactive adjustment method
1 January 1, 2018 Note receivable and account receivable 5,994,876,806.96
2 January 1, 2018 Account receivable -288,201,562.88
3 January 1, 2018 Account receivable -5,706,675,244.08
4 January 1, 2018 Note receivable and account payable 2,626,177,075.77
5 January 1, 2018 Notes Payable -906,597,988.15 Sino Great Wall Co., Ltd. 2018 Annual Report
243
6 January 1, 2018 Account payable -1,719,579,087.62
7 January 1, 2018 Other account payable 16,105,263.85
(2) Change of Important Accounting Estimates
□ Applicable √ Not applicable
34. Other
VI. Taxes
1. Main Types of Taxes and Tax Rate
Taxes Taxation basis Tax rate
V AT For the taxable income, the output tax
should be calculated based on relevant
tax rate, and the V AT shall be paid based
on the difference after deducting the
input tax that is allowed to be deducted
in the current period
0% 、3% 、6% 、11% 、17%
Urban maintenance and construction tax Paid as per 7%, 5% and 1% of the
turnover tax paid actually.
7% 、5% 、1%
Enterprise income tax Paid as per 15% and 25% of taxable
income
15% 、25%
Educational surtax Paid as per 3% of the turnover tax paid
actually.
3%
Local educational surtax Paid as per 2% of the turnover tax paid
actually.
2%
Illustration for disclosure of tax payers of different corporate income tax rate
Name of tax payers Income tax rate
Changzhi Shenzhou Laodingshan Industrial Co., Ltd. 25%
Xiangfen County Taoshan Construction Co., Ltd. 25%
Sino Great Wall (Xihua) Economic Development Zone Investment
Co., Ltd.
25%
Liupanshui Central People’s Hospital Investment Co., Ltd. 25%
Sino Zhigu Industrial (Yueyang) Co., Ltd. 25%
Sino Great Wall Guangxia (Wuhan) Medical Development Co., Ltd. 25%
Sino Great Wall Infrastructure Investment Co., Ltd. 25%
Wuhan Commercial Workers Hospital LLC 25% Sino Great Wall Co., Ltd. 2018 Annual Report
244
Sino Great Wall Medical Investment Management Co., Ltd. 25%
Sino Great Wall International Engineering Co., Ltd. 15%
Fujian Sino Great Wall Mingyihui Medical Investment Co., Ltd. 25%
Sino Great Wall Medical Investment (Hubei) Co., Ltd. 25%
Hubei Yuanyaotong Supply Chain Co., Ltd. 25%
Sino Great Wall Medical Management (Inner Mongolia) Co., Ltd. 25%
Sino Great Wall Health Management (Jiangsu) Co., Ltd. 25%
Sino Great Wall (Beijing) Investment Fund Management Co., Ltd. 25%
Sino Great Wall New Energy (Beijing) Co., Ltd. 25%
Wu’an Juhe Photovoltaic Power Co., Ltd. 25%
Shanghai Lingrui International Trading Co., Ltd. 25%
Shenzhen Hongtulve Industrial Co., Ltd. 25%
Sino Great Wall Southwest Engineering Co., Ltd. 25%
Sino Great Wall Southwest Science and Technology Co., Ltd. 25%
Sino Great Wall Southwest Commercial and Trading Co., Ltd. 25%
Sino Great Wall Southwest Engineering Consultation Co., Ltd. 25%
Sino Great Wall Decoration and Design Co., Ltd. 25%
Suzhou Lvbang Wood Industry Technology Co., Ltd. 25%
Huichang County Zhongcheng Construction Engineering Co., Ltd. 25%
Great Wall Biaodian Energy Co., Ltd. 25%
Kunming Sino Forest Industry Development Co., Ltd. 25%
Sino Great Wall Development (Hengqin) Co., Ltd. 25%
Sino Great Wall Real Estate (Hubei) Co., Ltd. 25%
SGW America LLC 21%
Sino Great Wall Group Co., Limited 17%
Far eastern international engineering company,LLC 20%
Sino Great Wall(Philippines) International Corporation 30%
Sino Wai Man International Engineering Limited 12%
Sino Great Wall (HK) Property Co., Limited 17%
SGW HPEngineeringConstructionSDN.BHD 24%
SGW VENTURES SDN.BHD. 24%
SGW CONSTRUCTION (LANGKAWI) SDN.BHD. 24%
SINO GREAT WALL GENERAL TRADING &
CONTRACTING CO.LTD
15%
Shenzhou Changcheng （Lao ）Co., Ltd 25% Sino Great Wall Co., Ltd. 2018 Annual Report
245
Sino International Engineering (Laos) Co., Ltd. 25%
Sino Great Wall Investment (Laos) Co., Ltd. 25%
Sino Great Wall Group (UK) Co., Limited 19%
Sino Great Wall International Engineering (MM) Co., Ltd 25%
Sino Great Wall International Engineering Co., Ltd 0%
Inrich Me Engineering Co., Ltd 17%
SINO GREAT
Sino Great Wall International Engineering (Thailand) Co., Ltd. 20%
Sino Great Wall International Engineering (CNMI) Co., LLC. 21%
SINO GREAT WALL （USA）.INC 21%
PT.SINO GREAT WALL INVESTMENT INDONESIA 25%
PT.SINO GREAT WALL CONSTRUCTION INDONESIA 25%
Anshun Sino Great Wall Real Estate Development and
Construction Co., Ltd.
25%
Beijing Sino Xinda Real Estate Co., Ltd. 25%
Sino Great Wall Hebei Xiong’an Engineering Co., Ltd. 25%
Sino Great Wall Scientific and Technologic Development Co.,
Ltd.
25%
Weifang Sino Great Wall Medical care and Health Industry
Co., Ltd.
25%
Sino Great Wall (Guangzhou) Elevator Engineering Co., Ltd. 25%
Zhongda Chancheng Industrial (Chongqing) Co., Ltd. 25%
Sino Rongju Real Estate Development Co., Ltd. 25%
Chengwu County Shenguang Engineering Project
Management Co., Ltd.
25%
Sino Boda (Zhanjiang) Industrial Co., Ltd. 25%
Sino Great Wall Industrial (Chongqing) Co., Ltd. 25%
2. Tax Preferences
(1) As verified by Beijing Municipal Office, SAT in 2013 as per Tax Category Verification Notice,
the taxable income of Sino Great Wall Design shall be 10% of the total income.
(2) According to provisions in Notice of the State Administration of Taxation on Several Issues
Concerning the Administration of Collection of Income Tax of Enterprises Operating Business across
Different Regions and Paying Taxes on a Consolidated Basis (GSF (2008) No.28) on March 10, 2008, the
head office (parent company) of the operation units and the place of business, being established within
territory of China and running business across China without the legal personality (i.e. running production
and operation activity across regions) shall be deemed as the enterprise for consolidated taxation. If the
parent Company adopt the consolidated taxation method and the head office and the branches intend to Sino Great Wall Co., Ltd. 2018 Annual Report
246
prepay the enterprise income tax by stages, 50% of such taxes shall be amortized to the branches and
prepaid, while the other 50% shall be prepaid by the head office. The amortization ratio of each branch
shall be 0.35:0.35:0.30 among the operating income, the staff salary and the total assets of each; the final
settlement of annual corporate income tax shall be made to the tax authority by the parent Company and
shall never amortized to the branches.
(3) Sino Great Wall Group Co., Limited (hereinafter referred to as “Sino Hong Kong”) and Inrich
Me Engineering Co., Ltd. (hereinafter referred to as “Inrich Me”) under the subsidiary Company of the
Company are enterprises established in the Hong Kong Special Administrative Region, which shall pay
the 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 in
the Macao Special Administrative Region, which shall pay the net profit tax and observe the progressive
tax rate.
(4) Sino Great Wall International Engineering Co., Ltd. (hereinafter referred to as the “Sino
International”), the wholly-owned subsidiary Company of the Company, was granted the Certificate of
High & New Technological Enterprise on November 24, 2015 which was jointly approved and issued by
Beijing Municipal Science & Technology Commission, Beijing Finance Bureau, Beijing Municipal
Office, SAT and Beijing Local Taxation Bureau. Sino International was identified as the high and new
technological enterprise (Certificate No.: GR201511003125; Issue date: November 24, 2015; Term of
Validity: Three Years), i.e. Sino International shall pay the enterprise income tax at the rate of 15% in
2015, 2016 and 2017, respectively.
(5) According to Notice of Ministry of Finance and State Administration of Taxation on Pilot for
Comprehensive 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 was
entitled to the preferential policies of being exempted from V AT 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 Country
the 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 of
the business tax with the value-added tax rate of 3% since September 1, 2012 and Sino Great Wall Design was deemed as the small-scale
taxpayer.
VII. Notes to Items in Consolidated Financial Statements
1. Monetary Resources
Unit: Yuan
Items Ending balance Opening balance
Cash on hand 3,116,229.51 4,614,087.16 Sino Great Wall Co., Ltd. 2018 Annual Report
247
Bank deposit 122,651,567.37 642,608,503.33
Other monetary resources 532,947,089.60 957,751,325.63
Total 658,714,886.48 1,604,973,916.12
Including: the total amount of overseas
funds
51,902,846.57
Other description
Items Ending balance Opening balance
Bank acceptance guarantee deposit 230,602,428.53 349,043,551.56
Guarantee bond 181,351,839.27 555,665,432.94
Fixed time deposits or call deposits used for guarantee 100,024,675.00 50,000,000.00
Overseas funds with limited remittance 873,465.90 22,098.66
Bond for wages of migrant workers 303,963.07 3,020,242.47
Freezing 19,790,717.83
Total 532,947,089.60 957,751,325.63
2. Financial assets measured with fair value and having the change of fair value recorded in the gain or loss of
the current period
Unit: Yuan
Items Ending balance Opening balance
Other description:
3. Derived financial assets
□ Applicable √ Not applicable
4. Notes Receivable and Accounts Receivable
Unit: Yuan
Items Ending balance Opening balance
Notes receivable 1,518,790.00 288,201,562.88
Accounts receivable 4,202,594,258.24 5,706,675,244.08
Total 4,204,113,048.24 5,994,876,806.96
（1 ）Notes Receivable
1) Classified Presentation of Notes Receivable
Unit: Yuan Sino Great Wall Co., Ltd. 2018 Annual Report
248
Items Ending balance Opening balance
Bank acceptance 0.00 15,544,160.00
Trade acceptance 1,518,790.00 272,657,402.88
Total 1,518,790.00 288,201,562.88
2) Notes receivable pledged by the Company at the end of the period
Unit: Yuan
Items Amounts pledged at the end of the period
Bank acceptance 0.00
Trade acceptance 0.00
Total 0.00
3) Notes Receivable Already Endorsed or Discounted by the Company at the End of Period, but Not Coming Due Yet on the Date of Balance
Sheet
Unit: Yuan
Items
Confirmation-terminated amount at the end
of period
Non-confirmation-terminated amount at
the end of period
Bank acceptance 4,608,144.88 0.00
Trade acceptance 95,940,000.00 0.00
Total 100,548,144.88 0.00
4) Bills turned into account receivables due to the default of the drawer of the Company at the end of term
Unit: Yuan
Items End-of-period arrears among the receivables
Trade acceptance 444,932,329.41
Total 444,932,329.41
Other description
None
（2 ）Accounts receivable
1) Classified Disclosure of Accounts Receivable
Unit: Yuan
Type
Ending balance Opening balance
Book balance Bad debt reserve
Book
value
Book balance Bad debt reserve
Book value
Amount Proportion Amount
Withdraw
al
proportion
Amount Proportion Amount
Withdrawal
proportion
Accounts receivable
with significant single
amount and having bad
716,094,
881.32
13.72%
286,437,
952.53
40.00%
429,656,9
28.79
Sino Great Wall Co., Ltd. 2018 Annual Report
249
debt reserve withdrawn
independently
Accounts receivable
with bad debt reserve
withdrawn as per the
portfolio of credit risk
characteristics
4,503,30
9,614.80
86.28%
730,372,
285.35
16.22%
3,772,937
,329.45
6,332,9
15,727.
57
100.00%
626,240,4
83.49
9.89%
5,706,675,2
44.08
Total
5,219,40
4,496.12
100.00%
1,016,81
0,237.88
56.22%
4,202,594
,258.24
6,332,9
15,727.
57
100.00%
626,240,4
83.49
9.89%
5,706,675,2
44.08
Accounts receivable with significant single amount and having bad debt reserve withdrawn independently at the end of term:
√ Applicable □ Not applicable
Unit: Yuan
Accounts receivable (per
unit)
Ending balance
Accounts receivable Bad debt reserve Withdrawal proportion Reasons for withdrawal
China Harbor
Engineering Company
Ltd.
716,094,881.32 286,437,952.53 40.00%
Shutdown for the project
of Military Academy,
Ministry of National
Defense
Total 716,094,881.32 286,437,952.53 -- --
Accounts receivable with bad debt reserve withdrawn by means of account age analysis in the portfolios:
√ Applicable □ Not applicable
Unit: Yuan
Account age
Ending balance
Accounts receivable Bad debt reserve Withdrawal proportion
Within 1 year
1,435,285,534.03 71,769,102.30 5.00%
1-2 years 2,038,443,035.35 190,125,609.54 10.00%
2-3 years 555,716,897.18 166,715,069.14 30.00%
3-4 years 358,293,199.04 179,146,599.52 50.00%
4-5years 76,448,267.42 61,158,613.94 80.00%
More than 5years 64,205,580.84 64,205,580.83 100.00%
Total 4,528,392,513.86 733,120,575.26
Description about the basis for determining the portfolio:
②Situations of bad debt reserves withheld, recycled or reversed in this term
The amount of bad debt reserve withdrawn in the current period was RMB 393,318,044.30; and
the 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 Sino Great Wall Co., Ltd. 2018 Annual Report
250
The aggregate amount of the top 5 owning parties classified by ending balance of accounts
receivable was RMB 2,441,187,064.70, accounting for 46.55% of the total amount of accounts
receivable at the end of the year, and the aggregate amount of bad debt reserve ending balance
withdrawn was RMB 498,149,003.15.
Unit name
Ending balance
Accounts receivable Proportion to total accounts
receivable (%)
Bad debt reserve
China Harbor Engineering Company Ltd. 831,409,897.23 15.85 313,687,509.07
POWERCHINA Construction Group Ltd. 674,079,636.78 12.85 73,244,894.27
Oxley Gem (Cambodia)Co., Ltd 426,011,027.46 8.12 25,469,397.37
Henan NO.1 Thermal Power
Construction Company
298,264,504.82 5.69 65,526,002.54
Cambodia Petrochemical Co., Ltd. 211,421,998.41 4.03 20,221,199.90
Total 2,441,187,064.70 46.55 498,149,003.15
⑤Accounts receivable of which the recognition is terminated due to the transfer of financial assets:
none.
⑥Amount of assets and liabilities formed by transferring accounts receivable and continuous
involvement: none.
In the portfolio, other receivables of bad debts withdrawn with the balance percentage method:
□ Applicable √ Not applicable
In 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 Period
The amount of bad debt reserves withdrawn in current period is RMB 393,318,044.30 and the amount of bad debt reserves recovered or
reversed in current period is RMB 0.
Important amounts of bad debt reserves recovered or reversed in current period:
Unit: Yuan
Unit name Amounts recycled or reversed Recycle Method
3) Accounts Receivable Actually Cancelled after Verification in the Current Period
Unit: Yuan
Items Amounts cancelled after verification
Important cancelation after verification of other accounts receivable:
Unit: Yuan
Unit name
Nature of accounts
receivable
Amounts cancelled
after verification
Reasons for
cancelation after
verification
Procedures
performed for
cancelation after
verification
Whether the
payment is generated
by related
transaction
Note for accounts receivable cancelled after verification:
None Sino Great Wall Co., Ltd. 2018 Annual Report
251
4) Top 5 Owing Parties Classified by the Ending Balance of Other Accounts Receivable
Unit name
Ending balance
Accounts receivable Proportion to total accounts
receivable (%)
Bad debt reserve
China Harbor Engineering Company Ltd. 831,409,897.23 15.85 313,687,509.07
POWERCHINA Construction Group Ltd. 674,079,636.78 12.85 73,244,894.27
Oxley Gem (Cambodia) Co., Ltd 426,011,027.46 8.12 25,469,397.37
Henan NO.1 Thermal Power
Construction Company
298,264,504.82 5.69 65,526,002.54
Cambodia Petrochemical Co., Ltd. 211,421,998.41 4.03 20,221,199.90
Total 2,441,187,064.70 46.55 498,149,003.15
5) Other accounts receivable of which the recognition is terminated due to transfer of financial assets
None
6) Amount of assets and liabilities formed through transfer of other receivables and continuous involvement
None
Other description:
5. Advance Payment
（1 ）Presentation of Advance Payments by Account Age
Unit: Yuan
Account age
Ending balance Opening balance
Amount Proportion Amount Proportion
Within 1 year 207,889,106.39 71.74% 212,854,246.00 94.51%
1-2 years 8,022,057.24 21.31% 11,257,454.64 5.00%
2-3 years 3,620,871.70 6.17% 903,997.25 0.40%
More than 3 years 729,583.80 0.78% 192,829.99 0.09%
Total 220,261,619.13 -- 225,208,527.88 --
Description of reasons why the advance payments of an important amount with account age more than 1 year are not settled in time:
（2 ）Top 5 Advance Payment Objects Classified by the Ending Balance of Advance Payments
（2 ）Top 5 Advance Payment Objects Classified by the Ending Balance of Advance Payments
The aggregate amount of the top 5 advance payment objects classified by the ending balance of
advance payments was RMB 85,197,913.66, accounting for 38.60% of the total amount of the ending
balance of advance payments.
Unit name Relationship Ending balance Proportion to the Advance Reasons for not Sino Great Wall Co., Ltd. 2018 Annual Report
252
with the
company
total ending
balance of
advance
payments (%)
payment time settlement
Jiangsu Juye Jianshe Group Co.,
Ltd.
Subcontractor 27,020,017.56 12.24 Within 2 year Advance payment for
subcontracted project
Zhongcheng Jianye Construction
Co., Ltd.
Subcontractor 25,421,813.77 11.52 Within 2 year Advance payment for
subcontracted project
Shandong Zhiyuan Building
Installation Engineering Co., Ltd.
Subcontractor 11,430,371.93 5.18 Within 1 year Advance payment for
subcontracted project
Longyan City Hengda
Engineering Co., Ltd.
Subcontractor 11,552,049.40 5.23 Within 1 year Advance payment for
subcontracted project
Xi'an Bihui Road and Bridge
Engineering Co., Ltd.
Subcontractor 9,773,661.00 4.43 Within 1 year Advance payment for
subcontracted project
Total 85,197,913.66 38.60
?
Other description:
6. Other accounts receivable
Unit: Yuan
Items Ending balance Opening balance
Other accounts receivable 2,186,223,361.40 1,674,675,360.28
Total 2,186,223,361.40 1,674,675,360.28
（1 ）Interest receivable
1) Classification of interest receivable
Unit: Yuan
Items Ending balance Opening balance
2) Important overdue interest
Unit: Yuan
Borrowing unit Ending balance Overdue time Overdue reason
Whether impairment
occurs and the basis for
its judgment
Other description:
（2 ）Dividends receivable
1) Dividends receivable
Unit: Yuan Sino Great Wall Co., Ltd. 2018 Annual Report
253
Items (or the invested unit) Ending balance Opening balance
2) Important dividends receivable over one year of account age
Unit: Yuan
Items (or the invested
unit)
Ending balance Account age Reason for not recycling
Whether impairment
occurs and the basis for
its judgment
Other description:
（3 ）Other accounts receivable
1) Classified Disclosure of Other Accounts Receivable
Unit: Yuan
Type
Ending balance Opening balance
Book balance Bad debt reserve
Book
value
Book balance Bad debt reserve
Book value
Amount Proportion Amount
Withdraw
al
proportion
Amount Proportion Amount
Withdrawal
proportion
Other accounts
receivables that are
individually significant
and for which individual
bad debt reserves are
withdrawn
22,402,9
80.00
0.95%
2,000,00
0.00
8.93%
20,402,98
0.00
Other accounts
receivable with bad debt
reserve withdrawn as
per the portfolio of
credit risk
characteristics
2,341,17
7,867.34
98.92%
175,357,
485.94
7.49%
2,165,820
,381.40
1,820,3
32,846.
84
100.00%
145,657,4
86.56
8.07%
1,674,675,3
60.28
Other accounts
receivable with
insignificant single
amount and having bad
debt reserve withdrawn
separately
2,963,00
5.73
0.13%
2,963,00
5.73
100.00%
Total
2,366,54
3,853.07
100.00%
180,320,
491.67
2,186,223
,361.40
1,820,3
32,846.
84
100.00%
145,657,4
86.56
1,674,675,3
60.28
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 Sino Great Wall Co., Ltd. 2018 Annual Report
254
Other accounts
receivable (per unit)
Ending balance
Other accounts
receivable
Bad debt reserve Withdrawal proportion Reasons for withdrawal
Accounting Center of
Forestry Bureau of
Yongqiao District,
Suzhou City
2,000,000.00 2,000,000.00 100.00%
Low likelihood of
recycling
ACURA Kliniken
Group Baden-Baden
GmbH
20,402,980.00 Assets held for sale
Total 22,402,980.00 2,000,000.00 -- --
Other accounts receivable with bad debt reserve withdrawn by means of account age analysis in the portfolios:
√ Applicable □ Not applicable
Unit: Yuan
Account age
Ending balance
Other accounts receivable Bad debt reserve Withdrawal proportion
Within 1 year
1,980,686,398.10 99,034,319.91 5.00%
1-2 years 248,752,112.99 24,875,211.30 10.00%
2-3 years 49,079,589.31 14,723,876.79 30.00%
3-4 years 48,461,428.86 24,230,714.43 50.00%
4-5 years 8,524,872.84 6,819,898.27 80.00%
More than 5 years 5,673,465.24 5,673,465.24 100.00%
Total 2,341,177,867.34 175,357,485.93
Description about the basis for determining the portfolio:
②Classified Disclosure of Other Accounts Receivable by Nature
Nature of accounts Ending book balance Book balance at the
beginning of year
Tender bond, performance bond and deposit 359,746,410.63 564,988,488.94
Pretty Cash and personal intercourse funds 400,356,527.19 45,065,829.65
Intercourse funds of the organization 1,534,777,052.09 1,191,088,012.16
Others 71,663,863.16 19,190,516.09
Total 2,366,543,853.07 1,820,332,846.84
③Bad Debt Reserves of Other Accounts Receivable Withdrawn, Recovered or Transferred Back in
the Year
The amount of bad debt reserves withdrawn in current period is RMB34,911,005.11.
④Top 5 Owing Parties Classified by the Ending Balance of Other Accounts Receivable
Unit name Nature of accounts Ending balance Account age Proportion to total ending
balance of other accounts
Bad debt reserve
Ending balance Sino Great Wall Co., Ltd. 2018 Annual Report
255
receivable (%)
Longyan City Hengda Engineering
Co., Ltd.
Intercourse funds
of the organization
335,179,148.00 Within 2
year
14.16 21,608,957.40
POWERCHINA Construction Group
Ltd.
Intercourse funds
of the organization
250,908,351.38 1-2 years 10.6 25,090,835.14
Yueyang Public Resource
Trading Center
Tender bond 131,500,000.00 1-2 years 5.56 13,150,000.00
Hebei Xuxing Industrial Co., Ltd. Tender bond 55,000,000.00 1-2 years 2.32 5,500,000.00
China Harbor Engineering Company
Ltd.
Intercourse funds
of the organization
54,278,966.48 Within 3
year
2.29 6,330,428.72
Total —— 826,866,465.86 —— 34.93 71,680,221.26
⑥Accounts Receivable Involving Governmental Subsidy: none.
⑦Other accounts receivable of which the recognition is terminated due to transfer of financial assets: none.
⑧Amount of assets and liabilities formed through transfer of other receivables and continuous involvement: none.
In the portfolio, other receivables of bad debts withdrawn with the balance percentage method:
□ Applicable √ Not applicable
In the portfolio, other receivables of bad debts withdrawn with other methods:
□ Applicable √ Not applicable
2) Situations of bad debt reserves withheld, reversed or recycled in this term
The amount of bad debt reserves withdrawn in current period is RMB and the amount of bad debt reserves recovered or reversed in
current period is RMB .
Important amounts of bad debt reserves recovered or reversed in current period:
Unit: Yuan
Unit name Amounts reversed or recycled Recycle method
3) Status of actual verified other receivables in current period
Unit: Yuan
Item Amounts cancelled after verification
Important cancelation after verification of other accounts receivable:
Unit: Yuan
Unit name
Nature of other
accounts receivable
Amounts cancelled
after verification
Reasons for
cancelation after
verification
Procedures
performed for
cancelation after
verification
Whether the
payment is generated
by related
transactions
Notes on other accounts receivable cancelation after verification:
4) Classification of Other Accounts Receivable by Nature
Unit: Yuan
Nature of accounts Ending book balance Book balance at the beginning of year
Tender bond, performance bond and
deposit
359,746,410.63 564,988,488.94 Sino Great Wall Co., Ltd. 2018 Annual Report
256
Pretty cash and intercourse funds of
individuals
400,356,527.19 45,065,829.65
Intercourse funds of the organization 1,534,777,052.09 1,191,088,012.16
Others 71,663,863.16 19,190,516.09
Total 2,366,543,853.07 1,820,332,846.84
5) Top 5 Owing Parties Classified by the Ending Balance of Other Accounts Receivable
Unit: Yuan
Unit name Nature of accounts Ending balance Account age
Proportion to total
ending balance of
other accounts
receivable
Bad debt reserve
Ending balance
6) Accounts Receivable Involving Governmental Subsidy
Unit: Yuan
Unit name
Governmental subsidy
project name
Ending balance Ending account age
Estimated possession
time, amount and basis
7) Other accounts receivable of which the recognition is terminated due to transfer of financial assets
8) Amount of assets and liabilities formed through transfer of other receivables and continuous involvement
Other description:
7. Inventories
Whether the company shall comply with the disclosure requirements of the real estate industry
No
（1 ）Classification of Inventories
Unit: Yuan
Items
Ending balance Opening balance
Book balance Depreciation reserve Book value Book balance Depreciation reserve Book value
Raw materials 110,557.92 110,557.92 1,810,694.49 1,810,694.49
Merchandise
inventory
10,708,600.50 10,708,600.50 9,328,819.66 9,328,819.66
Completed and
unsettled assets
formed by the
construction
contract
678,132,183.22 4,354,226.05 673,777,957.17 516,478,683.84 5,051,867.60 511,426,816.24
Development
costs
30,299,350.36 30,299,350.36 34,272,995.11 34,272,995.11
Others 2,635,112.28 2,635,112.28 Sino Great Wall Co., Ltd. 2018 Annual Report
257
Total 721,885,804.28 4,354,226.05 717,531,578.23 561,891,193.10 5,051,867.60 556,839,325.50
Whether the company shall comply with the disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guide
No. 4 － Listed Companies Engaged in the Seed Industry and Planting Business
No
The 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 Business
No
（2 ）Depreciation Reserve of Inventories
Unit: Yuan
Items Opening balance
Amount increased of current period Amount decreased of current period
Ending balance
Withdrawn Others
Transferred-back
or written-off
Others
Completed and
unsettled assets
formed by the
construction
contract
5,051,867.60 697,641.55 4,354,226.05
Total 5,051,867.60 697,641.55 4,354,226.05
（3 ）Description about Capitalized Amount of Borrowing Costs Contained in Ending Balance of Inventories
（4 ）The completed and unsettled assets formed by the construction contract at the end of the period
Unit: Yuan
Items Amount
Aggregate costs incurred 18,506,213,679.77
Aggregate gross profits acknowledged 4,332,256,515.21
Minus: estimated losses 4,354,226.05
Amount settled 22,160,338,011.76
Completed and unsettled assets formed by the construction
contract
673,777,957.17
Other description:
8 、Assets Held for Sale
Unit: Yuan
Items Ending book value fair value Estimated disposal cost Estimated disposal time
February 02, 2019 Sino Great Wall Co., Ltd. 2018 Annual Report
258
Including: fixed assets 0.00
Investment real estate 0.00
Equity investment 105,075,792.00
0.00 February 02, 2019
0.00
Total 105,075,792.00 --
Other description:
Note: in order to improve the company's financial situation and revitalize its effective assets, the company decided to transfer 94% of
the equity of Acura Kliniken Baden-Baden GmbH. The company signed the equity transfer agreement with Hong Kong Congzhong
Investment Co., Ltd. on February 2, 2019, with the transfer price of RMB 190 million.
（2 ）Impairment provision of assets held for sale
Items Book value at the
beginning of the
year
Amount
Withdrawn of
current period
Amount decreased of current
period
Ending balance
Amount
recovered
Other amount
decreased
Non-current assets held for
sale
Including: fixed assets
Investment real estate
Equity investment
Disposal group held for
sale
Including: fixed assets
Investment real estate
Equity investment
Total —— ——
（3 ）At the end of the year, the accumulated amount of other comprehensive incomes related to the
above 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 this
year: none.
9. Non-current Assets Due Within One Year
Unit: Yuan
Items Ending balance Opening balance
Other description:
10. Other Non-current Assets
Unit: Yuan Sino Great Wall Co., Ltd. 2018 Annual Report
259
Items Ending balance Opening balance
Advance tax 291,392.34 1,779,133.63
Input tax to be deducted or verified 5,504,405.10 15,347,777.42
Total 5,795,797.44 17,126,911.05
Other description:
11. Financial Assets Available for Sale
（1 ）Financial assets available for sale
Unit: Yuan
Items
Ending balance Opening balance
Book balance
Depreciation
reserve
Book value Book balance
Depreciation
reserve
Book value
Available-for-sale equity
instruments
10,338,500.00 10,338,500.00 10,338,500.00 10,338,500.00
Measured at Costs 10,338,500.00 10,338,500.00 10,338,500.00 10,338,500.00
Total 10,338,500.00 10,338,500.00 10,338,500.00 10,338,500.00
（2 ）Available-for-Sale Financial Assets Measured by Fair Value at the End of Period
Unit: Yuan
Classification of
financial assets available
for sale
Available-for-sale equity
instruments
Available-for-sale debt
instruments:
Total
（3 ）Available-for-Sale Financial Assets Measured by Cost at the End of Period
Unit: Yuan
Invested
units
Book balance Depreciation reserve
Proportion
of shares
held in
invested
units (%)
Cash
dividends
of current
period
At the
beginning
of the year
Amount
increased
of current
period
Amount
decreased
of current
period
Ending
amount
At the
beginning
of the year
Amount
increased
of current
period
Amount
decreased
of current
period
Ending
amount
Zhanjiang
Constructi
on &
Engineerin
g Co., Ltd.
10,338,500
.00
10,338,500
.00
19.00%
Total
10,338,500
.00
10,338,500
.00
-- Sino Great Wall Co., Ltd. 2018 Annual Report
260
（4 ）Changed situations of impairment of financial assets available for sale during the reporting period
Unit: Yuan
Classification of
financial assets available
for sale
Available-for-sale equity
instruments
Available-for-sale debt
instruments:
Total
（5 ）Description of the ending fair value of the available-for-sale equity instruments seriously reduced or
non-temporarily reduced with impairment reserve not withdrawn
Unit: Yuan
Available-for-sale
equity
instruments
project
Investment cost Ending fair value
The decline in
fair value relative
to cost
Continuous
decline time
(months)
Amount of
impairment
withdrawn
Reason for
impairment not
withdrawn
Other description
12. Held-to-maturity Investment
（1 ）Held-to-maturity investment
Unit: Yuan
Items
Ending balance Opening balance
Book balance
Depreciation
reserve
Book value Book balance
Depreciation
reserve
Book value
（2 ）Important held-to-maturity investment at the end of the period
Unit: Yuan
Bond project Par value Par interest rate Actual interest rate Due date
（3 ）Reclassified held-to-maturity investment of the current period
Other description
13. Long-Term Accounts Receivable
（1 ）Long-Term Accounts Receivable
Unit: Yuan
Items
Ending balance Opening balance
Range of discount
rate
Book balance Bad debt reserve Book value Book balance Bad debt reserve Book value Sino Great Wall Co., Ltd. 2018 Annual Report
261
Long-Term
Accounts
Receivable
16,708,613.19 16,708,613.19 14,328,557.82 14,328,557.82
Total 16,708,613.19 16,708,613.19 14,328,557.82 14,328,557.82 --
（2 ）Long-Term accounts receivable of which the recognition is terminated due to transfer of financial assets
Notes: Sino Great Wall Group Co., Limited, the subsidiary company of the Company, concluded and
signed the cooperation agreement with Hong Kong Yick Hing Construction Co. Ltd. (hereinafter referred
to as "Hong Kong Yick Hing”) on October 10, 2017 on the jointly founding of SGW. Yick Hing
Construction Engineering (Hong Kong) Limited (hereinafter referred to as "SGW. Yick Hing
Construction”), 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 of
SGW. Yick Hing Construction shall be managed by the Board of Directors. There are three seats in the
Board of Directors, with two for Sino Great Wall and one for Hong Kong Yick Hing. However, only the
director appointed by Yick Hing can serve as the chairman of the Board of Directors meeting, in case of
whose absence from the Board of Directors meeting, an alternate shall take this place. In the event of the
same votes, the chairman of the Board of Directors meeting has the right to vote the casting vote; the
resolution of the Board of Directors shall be issued via the majority vote but the director of Hong Kong
Yick Hing possesses the veto right and has the right to agree that the revenue shall be calculated as the
long-term receivables based on constant rate of return.
（2 ）Long-term accounts receivable of which the recognition is terminated due to transfer of
financial assets: none.
（3 ）Amount of assets and liabilities formed through transfer of long-term accounts receivable and
continuous involvement: none.
（3 ）Amount of assets and liabilities formed through transfer of long-term accounts receivable and continuous
involvement
Other description
14. Long-term Equity Investments
Unit: Yuan
Invested
units
Opening
balance
Changes of current period
Ending
balance
Ending
balance
of
depreciati
on
reserve
Additiona
l
investmen
t
Negative
investmen
t
Gains and
losses on
investmen
ts
recognize
d with
equity
method
Other
comprehe
nsive
income
adjustmen
ts
Other
changes
in equity
Declare
the
payment
of cash
dividends
or profits
Depreciat
ion
reserve
withdraw
n
Others Sino Great Wall Co., Ltd. 2018 Annual Report
262
I. Joint ventures
II. Jointly-run enterprises
Sino Great
Wall
Zhihui
Housing
Property
(Zhanjiang
) Co., Ltd.
24,000,00
0.00
-420,828.
29
23,579,17
1.71
Cenang
Resort
Sdn Bhd
83,258,63
9.12
83,258,63
9.12
III.
Subsidiar
y
AlorVista
Develop
ment Sdn
Bhd
25,292,31
2.68
25,292,31
2.68
25,292,31
2.68
25,292,31
2.68
Subtotal
49,292,31
2.68
83,258,63
9.12
-420,828.
29
25,292,31
2.68
132,130,1
23.51
25,292,31
2.68
Total
49,292,31
2.68
83,258,63
9.12
-420,828.
29
25,292,31
2.68
132,130,1
23.51
25,292,31
2.68
Other description
15. Investment Real Estate
（1 ）Investment real estate using cost measurement
□ Applicable √ Not applicable
（2 ）Investment real estate using fair value measurement
□ Applicable √ Not applicable
（3 ）Investment real estate with the certificate of title not transacted
Unit: Yuan
Items Book value
Reason(s) for the failure to transact the
certificate of title
Other description Sino Great Wall Co., Ltd. 2018 Annual Report
263
16 、Fixed Assets
Unit: Yuan
Items Ending balance Opening balance
Fixed assets 158,746,947.91 174,537,150.56
Total 158,746,947.91 174,537,150.56
（1 ）Fixed assets
Unit: Yuan
Items
Houses and
buildings
Mechanical
equipment
Transportation
Equipment
Transportation
equipment
Total
I. Original book
value
1. Opening balance 103,857,727.50 99,011,854.51 41,578,019.37 14,847,444.63 259,295,046.01
2. Amount increased
of current period
45,846.63 9,855,943.68 2,397,598.49 788,453.06 13,087,841.86
（1）Purchase 45,846.63 9,855,943.68 2,397,598.49 788,453.06 13,087,841.86
（2）Transfer-in of
construction in
progress
（3）Increase of
business
combination
3. Amount decreased
of current period
565,613.95 3,796,972.94 4,934,924.28 1,685,768.99 10,983,280.16
（1）Disposal or
retirement
565,613.95 3,796,972.94 4,934,924.28 1,685,768.99 10,983,280.16
4. Ending balance 103,337,960.18 105,070,825.25 39,040,693.58 13,950,128.70 261,399,607.71
II. Accumulative
depreciation
1. Opening balance 15,127,800.94 30,513,047.92 16,465,368.36 9,502,963.24 71,609,180.46
2. Amount increased
of current period
14,889,879.21 10,245,735.16 8,611,485.05 2,173,342.31 35,920,441.73
（1）Withdrawn 14,889,879.21 10,245,735.16 8,611,485.05 2,173,342.31 35,920,441.73
3. Amount decreased 223,358.68 26,600.00 4,624,998.26 2,005.45 4,876,962.39 Sino Great Wall Co., Ltd. 2018 Annual Report
264
of current period
（1）Disposal or
retirement
223,358.68 26,600.00 4,624,998.26 2,005.45 4,876,962.39
4. Ending balance 29,794,321.47 40,732,183.08 20,451,855.15 11,674,300.10 102,652,659.80
III. Depreciation
reserve
1. Opening balance
2. Amount increased
of current period
（1）Withdrawn
3. Amount decreased
of current period
（1）Disposal or
retirement
4. Ending balance
IV . Book value
1. Ending book
value
73,543,638.71 64,338,642.17 18,588,838.43 2,275,828.60 158,746,947.91
2. Opening book
value
84,132,304.96 66,390,485.16 20,774,962.84 3,239,397.60 174,537,150.56
（2 ）Temporarily idle fixed assets
Unit: Yuan
Items Original book value
Accumulative
depreciation
Depreciation reserve Book value Note
（3 ）Fixed asset rented through financing lease
Unit: Yuan
Items Original book value
Accumulative
depreciation
Depreciation reserve Book value
House buildings 11,152,810.36 10,554,734.50 598,075.86
Mechanical
equipment
34,196,914.00 18,831,684.59 15,365,229.41 Sino Great Wall Co., Ltd. 2018 Annual Report
265
（4 ）Fixed assets leased through operating leases
Unit: Yuan
Items Ending book value
（5 ）Fixed assets with the certificate of title not transacted
Unit: Yuan
Items Book value
Reason(s) for the failure to transact the
certificate of title
Suzhou plants 8,574,218.59 Being processed
International engineering 19,863,248.79 Being processed
Other description
（6 ）Disposal of fixed assets
Unit: Yuan
Items Ending balance Opening balance
Other description
17 ．Construction in Progress
Unit: Yuan
Items Ending balance Opening balance
Construction in progress 36,697,284.04 4,968,590.96
Total 36,697,284.04 4,968,590.96
（1 ）Construction in Progress
Unit: Yuan
Items
Ending balance Opening balance
Book balance
Depreciation
reserve
Book value Book balance
Depreciation
reserve
Book value
Equipment and
Construction in
progress
36,697,284.04 36,697,284.04 4,968,590.96 4,968,590.96
Total 36,697,284.04 36,697,284.04 4,968,590.96 4,968,590.96
（2 ）Change of Important Projects of Construction in Progress in Current Period
Unit: Yuan Sino Great Wall Co., Ltd. 2018 Annual Report
266
Name of
items
Budget
amount
Opening
balance
Amount
increased
of
current
period
Amount
transferre
d into
fixed
assets in
current
period
Other
amount
decreased
in current
period
Ending
balance
Proportio
n of
accumulat
ive project
input to
the budget
Project
progress
Accumula
tive
amount of
interest
capitalizat
ion
Including:
Amount
of interest
capitalizat
ion in the
current
period
Current
interest
capitalizat
ion rate
Capital
source
Liangdu
Central
Hospital
of
Liupansh
ui City
(tentativ
e name)
medical
and
nursing
integrati
on
project
2,630,91
0.96
2,370,53
7.98
5,001,44
8.94
PPP
project
of the
north
coast
landscap
e
engineeri
ng of
Huanbai
yang
Lake
(Central
Lake),
PPP
project
of
Baiyang
Lake
Headqua
rters
Economi
c Port,
1,112,88
0.00
7,363,47
1.41
8,476,35
1.41
67% Sino Great Wall Co., Ltd. 2018 Annual Report
267
Xingang
District,
Chenglin
gji,
Hunan
Province
Construc
tion
Project
of Radio
and
Televisio
n Media
Activity
Center,
Chengw
u County
15,792,3
51.48
15,792,3
51.48
13%
Total
3,743,79
0.96
25,526,3
60.87
29,270,1
51.83
-- -- --
（3 ）Impairment provision of project under construction withdrawn in the period
Unit: Yuan
Items Current withdrawal amount Reason for withdrawal
Other description
（4 ）Engineering materials
Unit: Yuan
Items
Ending balance Opening balance
Book balance
Depreciation
reserve
Book value Book balance
Depreciation
reserve
Book value
Other description:
18. Productive Biological Asset
（1 ）Productive biological assets measured at costs
□ Applicable √ Not applicable
（2 ）Productive biological assets measured according to fair value
□ Applicable √ Not applicable Sino Great Wall Co., Ltd. 2018 Annual Report
268
19. Oil and gas assets
□Applicable √ Not applicable
20. Intangible Assets
（1 ）Intangible Assets
Unit: Yuan
Items Land use right Patent right
Non-patent
technology
Software Total
I. Original book
value
1. Opening balance 132,460,370.94 4,551,469.92 137,011,840.86
2. Amount increased
of current period
（1）Purchase
（2）Internal research
and development
（3）Amount
decreased of current
period
3. Amount decreased
of current period
23,839,368.35 23,839,368.35
（1）Disposal
（2）Consolidation
scope reduction
23,839,368.35 23,839,368.35
4. Ending balance 108,621,002.59 4,551,469.92 113,172,472.51
II. Accumulative
amortization
1. Opening balance 6,882,267.85 2,605,128.01 9,487,395.86
2. Amount increased
of current period
3,062,788.20 902,968.92 3,965,757.12
（1）Withdrawn
3. Amount decreased
of current period
201,932.14 201,932.14
（1）Disposal Sino Great Wall Co., Ltd. 2018 Annual Report
269
（2）Consolidation
scope reduction
201,932.14 201,932.14
4. Ending balance 9,743,123.91 3,508,096.93 13,251,220.84
III. Depreciation
reserve
1. Opening balance
2. Amount increased
of current period
（1）Withdrawn
3. Amount decreased
of current period
（1）Disposal
4. Ending balance
IV . Book value
1. Ending book
value
98,877,878.68 1,043,372.99 99,921,251.67
2. Opening book
value
125,578,103.09 1,946,341.91 127,524,445.00
The proportion of ending intangible assets generated via internal R&D of the Company in the balance of intangible assets.
（2 ）Conditions of land use right with incomplete certificates of title
Unit: Yuan
Items Book value
Reason(s) for the failure to transact the
certificate of title
Other description:
21. Development Expenditure
Unit: Yuan
Items
Opening
balance
Amount increased of current period Amount decreased of current period
Ending
balance
Other description Sino Great Wall Co., Ltd. 2018 Annual Report
270
22. Goodwill
(1) Original book value of goodwill
Unit: Yuan
Name of invested
units or the
matters forming
goodwill
Opening balance Amount increased of current period Amount decreased of current period Ending balance
Shenzhen Yatian
Decoration
Design
Engineering Co.,
Ltd.
6,724,316.91 6,724,316.91 0.00
Wuhan
Commercial
Workers Hospital
LLC
27,257,314.49 27,257,314.49
Sino Great Wall
Southwest
Engineering Co.,
Ltd.
17,948,978.53 17,948,978.53
Sino Great Wall
Construction
Construction Co.,
Ltd.
6,943,534.86 6,943,534.86
Alor Vista
Development Sdn
Bhd
5,609,206.72 5,609,206.72
SAFAT GULF
GENERAL
TRADING &
CONTRACTING
COMPANY
5,547,635.00 5,547,635.00
Far eastern
international
engineering
company, LLC
10,920.04 10,920.04
Total 70,041,906.55 13,667,851.77 5,609,206.72 50,764,848.06
(2) Depreciation Reserve of Goodwill
Unit: Yuan Sino Great Wall Co., Ltd. 2018 Annual Report
271
Name of invested
units or the
matters forming
goodwill
Opening balance Amount increased of current period Amount decreased of current period Ending balance
Shenzhen Yatian
Decoration
Design
Engineering Co.,
Ltd.
Wuhan
Commercial
Workers Hospital
LLC
Sino Great Wall
Southwest
Engineering Co.,
Ltd.
17,948,978.53 17,948,978.53
Sino Great Wall
Construction Co.,
Ltd.
Alor Vista
Development Sdn
Bhd
SAFAT GULF
GENERAL
TRADING &
CONTRACTING
COMPANY
5,547,635.00 5,547,635.00
Far eastern
international
engineering
company, LLC
Total 5,547,635.00 17,948,978.53 23,496,613.53
Relevant information of goodwill-related asset group or portfolio
(3) Process of impairment test of goodwill
Sino Great Wall Southwest Engineering Co., Ltd., a subsidiary of the Company, has stopped all
construction projects and has negative net assets. Given the failure to project positive future operation, the
Company 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 value
estimation, 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 Sino Great Wall Co., Ltd. 2018 Annual Report
272
Other description
23. Long-term deferred expense
Unit: Yuan
Items Opening balance
Amount increased of
current period
Amount amortized
of current period
Other amount
decreased
Ending balance
Leasehold
improvement
7,029,913.15 1,207,117.00 4,103,741.48 56,698.69 4,076,589.98
Overseas fees for
letter of guarantee
3,095,000.00 1,903,525.81 1,191,474.19
Others 2,235,044.00 775,419.27 1,459,624.73
Less: Long-term
deferred expenses
coming due within 1
year
Total 10,124,913.15 3,442,161.00 6,782,686.56 56,698.69 6,727,688.90
Other description
Deferred income tax assets/deferred income tax liabilities
(1) Non-offset deferred income tax assets
Unit: Yuan
Items
Ending balance Opening balance
Deductible temporary
difference
(1) Deferred Income Tax
Assets
Deductible temporary
difference
(1) Deferred Income Tax
Assets
Asset depreciation
reserve
700,024,233.95 107,117,209.33 766,127,594.16 118,233,337.36
Deductible losses 43,486,026.03 10,871,506.51
Total 743,510,259.98 117,988,715.84 766,127,594.16 118,233,337.36
(2) Non-offset deferred income tax liabilities
Unit: Yuan
Items
Ending balance Opening balance
Taxable temporary
difference
Deferred Income Tax
Liabilities
Taxable temporary
difference
Deferred Income Tax
Liabilities
Appraised increment of
assets for business
combination not under
97,477,824.72 24,369,456.18 105,725,885.86 26,088,961.71 Sino Great Wall Co., Ltd. 2018 Annual Report
273
the same control
Total 97,477,824.72 24,369,456.18 105,725,885.86 26,088,961.71
(3) Offset deferred income tax assets or liabilities
Unit: Yuan
Items
Offset amount of
deferred tax assets and
liabilities at the end of a
period
Balance of deferred tax
assets and liabilities at
the end of a period
Offset amount of
deferred tax assets and
liabilities at the
beginning of a period
Balance of deferred tax
assets and liabilities at
the beginning of a period
(1) Deferred Income Tax
Assets
117,983,727.91 118,233,337.36
Deferred Income Tax
Liabilities
24,369,456.18 26,088,961.71
(4) Details of unconfirmed deferred income tax assets
Unit: Yuan
Items Ending balance Opening balance
Deductible temporary difference 506,759,969.56 20,178,730.17
Deductible losses 1,297,146,979.98 79,207,601.38
Total 1,803,906,949.54 99,386,331.55
(5) Deductible losses of unconfirmed deferred income tax assets due in the following years
Unit: Yuan
Year Ending balance Opening balance Note
Other description:
25. Other non-current assets
Unit: Yuan
Items Ending balance Opening balance
PPP Project investment 664,524,570.00 610,524,570.00
Advance payment for purchasing
long-term assets
129,221,120.79 283,729,420.79
Other project investment 121,953,450.20 175,340,581.32
Others 8,810,652.00
Less: Amount due within a year
Total 924,509,792.99 1,069,594,572.11 Sino Great Wall Co., Ltd. 2018 Annual Report
274
Other description:
(1) Description of PPP Project
Projects Registered
capital
(ten thousand
Yuan)
Subscribed
investment
amount (ten
thousand
Yuan)
Shareholding
proportion
Opening
amount
(ten thousand
Yuan)
Amount
increased of
current
period
(ten thousand
Yuan)
Amount
decreased
of current
period
Closing
amount
(ten thousand
Yuan)
Luyi Shuguang
Medical Industrial
Investment
Construction Co.,
Ltd.
9,600.00 4,896.00 51% 4,896.00 4,896.00
Huichang County
Sino Great Wall
Medical Industrial
Construction
Service Co., Ltd.
9,559.00 8,507.51 89% 8,507.51 8,507.51
Sino Great Wall
(Fugou) High-speed
Railways District
Investment Co., Ltd.
13,050.65 7,830.39 60% 7,830.39 7,830.39
Anyang Sino Great
Wall Medical
Management
Service Co., Ltd.
26,680.00
25,346.00 90% 25,346.00 25,346.00
Sino Great Wall
(Fugou) Jialu River
Comprehensive
Treatment
Investment Co., Ltd.
3,986.16 3,587.54 90%
200.00
3,600.00 3,800.00
Sino Great Wall
(Fugou) Fitness
Center Investment
Co., Ltd.
4,191.00 3,771.90 90% 3,772.56 3,772.56
Sino Great Wall
Shaanxi Fuyan
Industrial Park
Investment Co., Ltd.
5,000.00 4,500.00 90% 4,500.00 4,500.00 Sino Great Wall Co., Ltd. 2018 Annual Report
275
Wuchuan City Sino
Great Wall People’s
Hospital Investment
CO., Ltd.
21,700.00
17,360.00
80% 800.00 800.00
Wuchuan City Sino
Great Wall Chinese
Medicine Hospital
Investment CO.,
Ltd.
6,000.00 4,800.00 80% 0.00
Guizhou Hongqiao
Sino Great Wall
Healthcare Real
Estate Investment
Co., Ltd.
15,200.00
11,400.00
80% 1,000.00 1,000.00
Gongxian Sino
Healthcare
Investment Co., Ltd.
15,000.00 13,500.00 40% 6,000.00 6,000.00
Total 66,386.81 51,393.34 61,052.46 25,700.00 66,452.46
The PPP Project Company invested by the Company shall be operated in accordance with the
established way. The rights, obligations, and related activities under which the Project Company be
controlled are established through explicit contract terms or arrangements at the beginning of the
establishment. In addition, there are representatives sent by the government among the members of the
Board of Directors of the Project Company and the variable returns of the Project Company are generally
fixed. The Project Company is not within the control scope of the Company, so the PPP Project Company
is not included in the scope of the consolidation.
(2) Advance payment for purchasing long-term assets include: Housing payment of 129,221,120.79
RMB which can be used to offset liabilities.
(3) Other project investment
No. Company Name Amount
1 UPL LAO CO., LTD. 63,803,450.00
2 Sino Hengda Engineering Co., Ltd. 58,150,000.20
Total 121,953,450.20
26. Short-term Loans
(1) Classification of Short-Term Loans
Unit: Yuan
Items Ending balance Opening balance Sino Great Wall Co., Ltd. 2018 Annual Report
276
Pledged loan 50,000,000.00 150,000,000.00
Mortgaged loan 112,696,582.10 2,137,870,000.00
Guaranteed loan 2,650,398,046.91 1,114,073,017.67
Credit loan 49,490,000.00
Trade acceptance for which endorsement
and discounting have been conducted
while still being unmatured at the balance
sheet date
75,257,402.88
Total 2,862,584,629.01 3,477,200,420.55
Description for classification of short-term loans:
(2) Description for overdue but unpaid short-term loans
The total overdue but unpaid short-term loans by the end of this period is 1,562,683,719.03 RMB, in which details of significant overdue but
unpaid short-term loans are as follow:
Unit: Yuan
Borrower Ending balance Interest rate Overdue period
Late payment interest
rate
DBS Bank 47,081,552.00 3.15% September 27, 2018
Bank of Ningbo
Shenzhen Branch
43,233,518.83 6.09% June 1, 2018
Xiamen International
Bank Zhuhai Branch
44,291,741.54 7.00% May 26, 2018
Chang'an International
Trust Co., Ltd.
115,874,736.70 7.00% June 22, 2018
Industrial International
Trust Co., Ltd.
100,000,000.00 8.60% August 9, 2018
Bridge Trust Co., Ltd. 300,000,000.00 7.50% August 21, 2018
Shanghai Pudong
Development Bank
Shenzhen Center District
Branch
70,000,000.00 6.09% August 29, 2018
Bank of Jiujiang Zhuhai
Branch
97,768,794.96 August 22, 2018
Shenzhen Rural
Commercial Bank Futian
Branch
9,200,000.00 6.09% September 16, 2018
Shenzhen Rural
Commercial Bank Meilin
Branch
8,800,000.00 6.09% November 17, 2018 Sino Great Wall Co., Ltd. 2018 Annual Report
277
Shenzhen Rural
Commercial Bank Meilin
Branch
27,800,000.00 November 17, 2018
China Bohai Bank
Shenzhen Branch
50,000,000.00 5.22% December 21, 2018
China Bohai Bank
Shenzhen Branch
50,000,000.00 5.22% December 21, 2018
CITIC Trust Co., Ltd. 210,000,000.00 7.65% June 28, 2018 16.00%
Industrial International
Trust Co., Ltd.
100,000,000.00 8.00% September 29, 2018
Industrial Bank Houhai
Branch
288,633,375.00 8.00% October 17, 2018
Total 1,562,683,719.03 -- -- --
Other description:
Note: ① The loan is due on September 27, 2018. Considering the Company failed to pay back on
time due to fund shortage, DBS Bank Beijing Branch has withdrawn a guarantee deposit of 50 million
RMB to back up the overdue loan. The loan has not be paid back but DBS Bank has waived further
interest charges by September 27, 2018.
27. Changes are measured by the fair value and will be recorded in the gain or loss of the current period
Unit: Yuan
Items Ending balance Opening balance
Other description:
28. Derived financial liabilities
□ Applicable √ Non-applicable
29. Notes payable and accounts payable
Unit: Yuan
Items Ending balance Opening balance
Notes payable 1,034,087,499.72 906,597,988.15
Accounts payable 892,155,630.43 1,719,579,087.62
Total 1,926,243,130.15 2,626,177,075.77 Sino Great Wall Co., Ltd. 2018 Annual Report
278
(1) Classified presentation of notes receivable
Unit: Yuan
Type Ending balance Opening balance
Trade acceptance 471,267,864.12 283,190,010.00
Bank acceptance 562,819,635.60 623,407,978.15
Total 1,034,087,499.72 906,597,988.15
Overdue but unpaid notes receivable by the end of the period is 427,190,071.71 RMB.
(2) Presentation of accounts payable
Unit: Yuan
Items Ending balance Opening balance
Project construction cost 870,866,176.06 1,704,130,649.60
Payment for purchasing long-term assets
Payment for medicine 17,497,130.23 15,448,438.02
Others 3,792,324.14
Total 892,155,630.43 1,719,579,087.62
(3) Significant accounts receivable with account age of more than 1 year
Unit: Yuan
Items Ending balance Causes for non-payment or carryover
Other description:
30. Items received in advance
(1) Presentation of items received in advance
Unit: Yuan
Items Ending balance Opening balance
Unfinished project with settled
construction cost
10,850,086.84
Advance payment for project construction
cost
391,350,850.34 145,513,588.44
Advance payment for medical treatment 845,407.87 866,264.23
Advance payment for lease 43,733,325.87
Advance payment for rent 31,322,073.00
Total 478,101,743.92 146,379,852.67 Sino Great Wall Co., Ltd. 2018 Annual Report
279
(2) Significant items received in advance with account age of more than 1 year
Unit: Yuan
Items Ending balance Causes for non-payment or carryover
(3) Description for unfinished project with settled construction cost due to end-of-period contract conclusion
Unit: Yuan
Items Amount
Accrued occurred cost 1,449,011,469.60
Accrued recognized gross profit 290,007,053.46
Settled amount 1,749,868,609.90
Unfinished project with settled construction cost arising from
contract conclusion
-10,850,086.84
Other description:
31. Long-term payroll payable
(1) Presentation of long-term payroll payable
Unit: Yuan
Items Opening balance
Amount increased of
current period
Amount decreased of
current period
Ending balance
I. Short-term
remuneration
20,727,897.18 368,573,235.31 303,232,214.76 86,068,917.73
2. Post-demission
welfare - defined
contribution plans
1,183,644.89 20,080,481.96 20,918,185.73 345,941.13
Total 21,911,542.07 388,653,717.27 324,150,400.49 86,414,858.86
(2) Presentation of short-term remuneration
Unit: Yuan
Items Opening balance
Amount increased of
current period
Amount decreased of
current period
Ending balance
1. Salary, bonus,
allowance and subsidy
20,075,245.00 324,705,806.14 259,868,209.60 84,912,841.53
2. Employees’ welfare
expense
23,251,690.71 22,328,108.54 923,582.18
3. Social insurance
premium
599,087.72 11,728,150.40 12,274,222.84 53,015.28 Sino Great Wall Co., Ltd. 2018 Annual Report
280
Including: Medical
insurance premium
504,031.41 10,323,842.07 10,824,592.08 3,281.40
Industrial
injury insurance
premium
22,668.30 594,546.56 601,117.51 16,097.35
Maternity
insurance premium
72,388.01 809,761.77 848,513.25 33,636.53
4. Housing fund 53,564.46 8,084,058.90 7,958,144.62 179,478.74
5. Labor union outlay
and employees’
education outlay
803,529.16 803,529.16
Total 20,727,897.18 368,573,235.31 303,232,214.76 86,068,917.73
(3) Presentation of Drawing Plans Set Up
Unit: Yuan
Items Opening balance
Amount increased of
current period
Amount decreased of
current period
Ending balance
1. Basic pension
insurance
1,154,346.00 19,327,824.90 20,136,651.60 345,519.30
2. Unemployment
insurance premium
29,298.89 752,657.06 781,534.13 421.83
Total 1,183,644.89 20,080,481.96 20,918,185.73 345,941.13
Other description:
32. Taxes payable
Unit: Yuan
Items Ending balance Opening balance
Value-added tax 85,518,697.30 32,678,325.28
Enterprise income tax 221,830,373.42 239,018,994.88
Personal income tax 6,468,895.33 374,031.94
Urban maintenance and construction tax 4,026,082.61 3,928,587.22
Educational surtax 3,001,921.43 2,983,381.35
Other taxes 73,111,917.43 78,462,157.04
Total 393,957,887.52 357,445,477.71
Other description:
None Sino Great Wall Co., Ltd. 2018 Annual Report
281
33. Other accounts payable
Unit: Yuan
Items Ending balance Opening balance
Interest payable 280,806,670.49 16,105,263.85
Dividends payable 8,541,818.64
Other accounts payable 1,923,064,481.30 520,965,421.13
Total 2,212,412,970.43 537,070,684.98
(1) Interest payable
Unit: Yuan
Items Ending balance Opening balance
Payment of principal at maturity and
interest in installments
142,367,316.80 10,819,629.22
Interest payable on short-term loans 137,060,010.22 5,285,634.63
Interests withdrawn for overdue notes 1,379,343.47
Total 280,806,670.49 16,105,263.85
Significant overdue but unpaid interest
Unit: Yuan
Borrower Overdue amount Causes for overdue
Great Wall Guoxing Financial Leasing Co.,
Ltd.
1,862,398.37 Capital shortage
CITIC Trust Co., Ltd. 18,755,539.19 Capital shortage
Industrial International Trust Co., Ltd. 11,534,803.45 Capital shortage
Industrial Bank Houhai Branch 11,388,850.54 Capital shortage
Bohai International Trust Co., Ltd. 25,430,142.49 Capital shortage
Xiamen International Bank Zhuhai Branch 4,236,900.04 Capital shortage
Bank of Ningbo Shenzhen Branch 4,149,615.44 Capital shortage
Shenzhen Rural Commercial Bank Futian
Branch
326,957.92 Capital shortage
Wanxiang Trust Co., Ltd. 6,164,383.56 Capital shortage
Zhongjiang International Trust Co., Ltd. 48,926,568.27 Capital shortage
Baoshang Bank Shenzhen Branch 16,118,737.07 Capital shortage
Shenzhen Rural Commercial Bank Meilin
Branch
1,036,262.79 Capital shortage
China Bohai Bank Shenzhen Branch 2,760,164.38 Capital shortage Sino Great Wall Co., Ltd. 2018 Annual Report
282
Shaanxi International Trust Co., Ltd. 18,150,565.60 Capital shortage
Chang'an International Trust Co., Ltd. 7,952,291.31 Capital shortage
Industrial International Trust Co., Ltd. 14,470,421.04 Capital shortage
Bridge Trust Co., Ltd. 36,052,715.11 Capital shortage
Shanghai Pudong Development Bank
Shenzhen Center District Branch
3,738,211.58 Capital shortage
Bank of Jiujiang Zhuhai Branch 6,599,149.57 Capital shortage
China Minsheng Bank Shenzhen Branch 4,286,407.31 Capital shortage
Shanghai Pudong Development Bank
Fulicheng Subbranch
6,317,529.17 Capital shortage
China Railway Trust Co., Ltd. 2,724,608.75 Capital shortage
Ping'an International Financial Leasing
Co., Ltd.
816,385.59 Capital shortage
Bank of Beijing Shuangxiu Subbranch 24,843,680.56 Capital shortage
Total 278,643,289.10 --
Other description:
(2) Dividends payable
Unit: Yuan
Items Ending balance Opening balance
Common stock dividends 8,541,818.64
Total 8,541,818.64
Other description, including reasons for significant dividends in arrears for over a year:
(3) Other accounts payable
1) Presentation of other accounts payable by the nature of accounts
Unit: Yuan
Items Ending balance Opening balance
Tender bond, performance bond and
deposit
29,414,375.04 48,363,917.10
Personal intercourse funds and withheld
items
266,550,420.26 14,453,897.51
Intercourse funds of the organization 841,985,904.64 450,793,562.35
Payment for subscription of non-public
offerings
33,536.80 4,500,000.00
Others 785,080,244.56 2,854,044.17 Sino Great Wall Co., Ltd. 2018 Annual Report
283
Total 1,923,064,481.30 520,965,421.13
2) Other significant accounts receivable with account age of more than 1 year
Unit: Yuan
Items Ending balance Causes for non-payment or carryover
Other description
34. Liabilities held for sale
Unit: Yuan
Items Ending balance Opening balance
Other description:
None
35. Non-current liabilities coming due within one year
Unit: Yuan
Items Ending balance Opening balance
Long-term loans coming due within 1 year 906,690,152.95 820,422,471.45
Long-term account payable coming due
within 1 year
69,029,828.60
Total 975,719,981.55 820,422,471.45
Other description:
None
36. Other Current Liabilities
Unit: Yuan
Items Ending balance Opening balance
Output taxes to transfer 121,529,600.95
Total 121,529,600.95
Increase or decrease of short-term bonds payable
Unit: Yuan
Bond
name
Par value
Date of
issue
Bond
period
Issued
amount
Opening
balance
Issue of
current
period
Interests
withdraw
n as per
par value
Amortizat
ion of
premium
or
discount
Amount
repaid of
current
period
Ending
balance
Other description:
None Sino Great Wall Co., Ltd. 2018 Annual Report
284
37. Long-term loans
(2) Classification of long-term loans
Unit: Yuan
Items Ending balance Opening balance
Mortgaged loan 16,839,164.49
Guaranteed loan 1,026,690,152.95 826,253,306.53
Less: Long-term loans coming due within
1 year (see Note VI, 25)
-906,690,152.95
Total 120,000,000.00 843,092,471.02
Description for classification of long-term loans:
None
Other description: including the range of interest rate:
None
38. Bonds payable
(1) Bonds payable
Unit: Yuan
Items Ending balance Opening balance
First period bond financing plan of Sino
Great Wall International Engineering Co.,
Ltd. in 2017
254,801,342.47 245,000,000.00
Qianhai Wutong Private Bond No.
2016070
100,000,000.00
Total 254,801,342.47 345,000,000.00
(2) Increase or decrease of bonds payable (excluding other financial instruments classified as financial liabilities,
like preferred stocks and perpetual bonds, etc.)
Unit: Yuan
Bond
name
Par value
Date of
issue
Bond
period
Issued
amount
Opening
balance
Issue of
current
period
Interests
withdraw
n as per
par value
Amortizat
ion of
premium
or
discount
Amount
repaid of
current
period
Other
amount
decreased
Ending
balance
1.
Qianhai
Wutong
100,000,0
00.00
1/6/2017 1/6/2019
99,800,00
0.00
100,000,0
00.00
0.00
6,200,000
.00
106,200,0
00.00
0.00 Sino Great Wall Co., Ltd. 2018 Annual Report
285
Private
Bond No.
2016070
2. First
period
bond
financing
plan of
Sino
Great
Wall
Internatio
nal
Engineeri
ng Co.,
Ltd. in
2017
245,000,0
00.00
10/31/201
7
10/31/202
0
245,000,0
00.00
245,000,0
00.00
0.00
9,801,342
.47
254,801,3
42.47
Subtotal
345,000,0
00.00
344,800,0
00.00
345,000,0
00.00
0.00
16,001,34
2.47
106,200,0
00.00
254,801,3
42.47
Less:
End-of-ye
ar amount
due
within a
year (see
Note VI,
25)
Total -- -- --
344,800,0
00.00
345,000,0
00.00
0.00
16,001,34
2.47
106,200,0
00.00
254,801,3
42.47
(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 period
None
Presentation of changed situations of financial instruments including preferred stocks and perpetual bonds issued at the end of a period
Unit: Yuan
Issued
financial
instruments
Opening
Amount increased of current
period
Amount decreased of
current period
Ending
Amount Book value Amount Book value Amount Book value Amount Book value Sino Great Wall Co., Ltd. 2018 Annual Report
286
Description of other financial instruments classified as financial liabilities
None
Other description
None
39. Long-term account payable
Unit: Yuan
Items Ending balance Opening balance
Long-term account payable 322,990.35 81,945,567.86
Total 322,990.35 81,945,567.86
(1) Presentation of other accounts payable by the nature of accounts
Unit: Yuan
Items Ending balance Opening balance
Accrued financial lease outlay 322,990.35 81,945,567.86
Other description:
None
(2) Special account payable
Unit: Yuan
Items Opening balance
Amount increased of
current period
Amount decreased
of current period
Ending balance
Reason for
formation
Other description:
None
40. Long-term payroll payable
(1) Chart of long-term payroll payable
Unit: Yuan
Items Ending balance Opening balance
(2) Changed situations of benefit plan measured and set up
Present value of benefit plan measured and set up
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Asset set up: Sino Great Wall Co., Ltd. 2018 Annual Report
287
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Net liabilities or net assets of benefit plan measured and set up
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Explanation on the content of benefit plan set up and related risks, impact on the company’s cash flow, timing and uncertainties:
Explanation on the sensitivity analysis result and significant actuarial assumptions of benefit plan set up:
Other description:
41. Accrued liabilities
Unit: Yuan
Items Ending balance Opening balance Reason for formation
Pending actions 2,958,723.15 3,414,189.15
Total 2,958,723.15 3,414,189.15 --
Other descriptions, including significant assumptions and appraisal of significant accrued liabilities:
42. Deferred income
Unit: Yuan
Items Opening balance
Amount increased of
current period
Amount decreased
of current period
Ending balance
Reason for
formation
Projects involving governmental subsidy:
Unit: Yuan
Liability
items
Opening
balance
Subsidy
increased
over current
period
Amount
recorded in
non-operatin
g income
over current
period
Amount
recorded in
other benefits
over current
period
Cost offset
expenses
over current
period
Other
changes
Ending
balance
Related to
assets/Relate
d to income
Other description:
43. Other Non-current liabilities
Unit: Yuan
Items Ending balance Opening balance
Other description:
None Sino Great Wall Co., Ltd. 2018 Annual Report
288
44. Capital Stock
Unit: Yuan
Opening
balance
Increase/Decrease (+/-)
Ending balance
New shares
issued
Shares
presented for
free
Shares
converted from
public reserve
Others Subtotal
Total amount
of shares
1,698,245,011.
00
1,698,245,011.
00
Other description:
45. Other equity instruments
(1) Basic description of financial instruments including preferred stocks and perpetual bonds issued at the end of
a period
(2) Presentation of changed situations of financial instruments including preferred stocks and perpetual bonds
issued at the end of a period
Unit: Yuan
Issued
financial
instruments
Opening
Amount increased of current
period
Amount decreased of
current period
Ending
Amount Book value Amount Book value Amount Book value Amount Book value
Explanation on the reason for increase, decrease or change of other current equity instruments and the accounting methods:
Other description:
46. Capital reserve
Unit: Yuan
Items Opening balance
Amount increased of
current period
Amount decreased of
current period
Ending balance
Capital premium (capital
stock premium)
-857,285,524.28 -857,285,524.28
Other capital reserve -442,064,177.46 503,161.67 -441,561,015.79
Total -1,299,349,701.74 503,161.67 -1,298,846,540.07
Other description, including explanation on the reason for increase, decrease or change of current special reserve:
47. Inventory stock
Unit: Yuan
Items Opening balance
Amount increased of Amount decreased of
Ending balance Sino Great Wall Co., Ltd. 2018 Annual Report
289
current period current period
Other description, including explanation on the reason for increase, decrease or change of current inventory stock
48. Other composite benefits
Unit: Yuan
Items
Opening
balance
Amount incurred of current period
Ending
balance
Amount
incurred of
current
period
before
taxes
Less: Current
gain and loss
from
conversion of
other previous
composite
benefits
Less:
Expense of
income tax
After-tax
amount
attributed to
the parent
company
After-tax
amount
attributed to
minor
shareholder
s
II. Other composite benefits to be
re-classified as gain and loss
858,242.13 -50,380.95 858,242.13 0.00 -908,623.08 0.00
-50,380.9
5
Balance from conversion of
foreign-currency financial statements
858,242.13 -50,380.95 -908,623.08
-50,380.9
5
Total of other composite benefits 858,242.13 -50,380.95 858,242.13 0.00 -908,623.08
-50,380.9
5
Other description, including adjustment of initial carrying amount of hedged items converted from the effective portion of gain or loss of
cash flow hedge
Special reserve
Unit: Yuan
Items Opening balance
Amount increased of
current period
Amount decreased of
current period
Ending balance
Work safety expense 164,231,078.18 143,204,995.75 21,026,082.43
Total 164,231,078.18 143,204,995.75 21,026,082.43
Other description, including explanation on the reason for increase, decrease or change of current special reserve:
50. Surplus reserve
Unit: Yuan
Items Opening balance
Amount increased of
current period
Amount decreased of
current period
Ending balance
Statutory surplus reserve 84,394,441.23 84,394,441.23
Total 84,394,441.23 84,394,