Sino Great Wall Co., Ltd.
Audit Report and Financial Statement
Year 2017
Sino Great Wall Co., Ltd.
Audit Report and Financial Statement
(From January 1, 2017 to December 31, 2017)
CONTENTS Page
I. Audit Report 1-7
II. Financial Statements
Consolidated Balance Sheet and Company Balance 1-8
Sheet
Consolidated Income Statement and Company Income 9-12
Statement
Consolidated Cash Flow Statement and Company 13-16
Cash Flow Statement
Consolidated Statement of Changes in Owner‘s 17-26
Equity and Company Statement of Changes in
Owner‘s Equity
Notes to Financial Statement 1-141
Audit Report
XKSBZ [2018] No. ZB10958
To all shareholders of Sino Great Wall Co., Ltd.,
I. Opinions
We have audited the attached 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,
2017, 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 2017.
In our opinion, the attached financial statements are in conformity
with the relevant regulations of Accounting Standards for Business
Enterprises in all important aspects, and reflect fairly the consolidated and
parent company's financial status as of December 31, 2017 and the
consolidated and parent company's business achievements and cash flow
of 2017 year of Sino Great Wall.
II. Basis for Forming Audit Opinions
We conducted our audit in accordance with Chinese CPA Standards
on Auditing. The section CPA's Responsibility for Audit of Financial
Statements‘ in the audit report further provides for our responsibilities
under these accounting standards. 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. We believe
that we have obtained sufficient and appropriate audit evidences and our
auditing work will provide reasonable foundation for the declaration of
opinions and suggestions.
Audit Report Page 1
III Key Audit Matters
The key audit matters are the matters that we believe are the most
important for the audit of the current financial statements based on
professional judgment. The handling of these matters is based on the
audit of the financial statements as a whole and the formation of an audit
opinion. We will not comment on these matters separately. We confirm
that the following matters are key audit matters that need to be
communicated in the audit report.
Key Audit Matters How is this matter handled in
the audit?
(I) Recognition of income from construction contracts
The revenue of the Company is During the audit, the audit
primarily from the construction procedures we implemented
contracts recognized with mainly include: 1) test the
completion percentage method. In Company‘s preparation of
case the results of construction estimated total revenue and
contract could be reliably estimated estimated total cost and related key
at balance sheet date, contract internal control; 2) recalculate the
revenue and expenses is identified percentage of completion of the
through percentage of completion construction contract in the
of works, and completion construction contract ledger and
percentage is determined on the compare it with the percentage of
basis of the ratio of the actual completion confirmed by the
contract cost to estimated total employer to verify its accuracy; 3)
contract cost. The percentage of sample the construction contracts
completion method involves major to check the construction contract
judgment and estimates by the and data for cost budgeting on
management, including estimate of which the management‘s estimated
the percentage of completion, total revenue and estimated total
estimated total contract cost, cost cost are based, and thereby
Audit Report Page 2
for uncompleted works, total evaluate whether the
contract revenue, and estimate of management‘s estimate is
contract risks. In addition, the total reasonable and sufficiently based;
contract cost and total contract 4) sample to test the project
revenue may be different from the construction costs incurred in the
original estimate (sometimes current year; 5) sample the
significant) due to changes in construction contracts and conduct
circumstances, and should be on-site inspection of image and
continuously evaluated and revised progress of the project therein.
during the execution of the contract.
Therefore, we identify it as a key
audit matter.
(II) Recoverability of accounts receivable
As of December 31, 2017, the The audit procedures we
original book value of accounts implemented for the recoverability
receivable and bad debt reserves in of accounts receivable mainly
the consolidated statements of Sino include:
Great Wall were RMB 1) Test the management‘s internal
6,332,915,727.57and RMB control related to the daily
626,240,483.49 respectively. The management of accounts
recognition of estimated receivable and assessment of
recoverable amount of accounts recoverability of the same at the
receivable requires the management end of the period;
of Sino Great Wall to identify the 2) Audit the considerations and
projects that have been impaired objective evidence of the
and objective evidences, assess management in the impairment test
expected future cash flows and of account receivables, and pay
determine their present value, attention to whether the
which involves the management management fully identifies the
applying significant accounting projects that have been impaired;
estimates and judgment and a large 3) Sample the accounts
amount of money. Therefore, we receivables with the separate bad
identify the bad debt reserves of debt reserves, and audit the basis
Audit Report Page 3
accounts receivable as a key audit and rationality of the
matter. management's estimation of the
expected future cash flow;
4) For the accounts receivable for
which the bad debt reserves are set
aside by the management based on
the credit risk characteristic
combination, assess whether such
provision determined by the
management is reasonable;
5) Implement the external
certification procedures, and
compare the results thereof with
the amount recorded by the
management; and
6) Perform audit by taking into
account A/D payment collection to
assess the reasonableness of the
bad debt reserves set aside by the
management.
IV Other Information
The management of Sino Great Wall (hereinafter referred to as "the
management") is responsible for other information. Other information
includes the information covered in Sino Great Wall Yearly Report 2017,
excluding the financial statements and our audit report.
Our audit opinions to the financial statements do not cover such
other information, and will not give authentication conclusions in any
form on such other information.
Our responsibility is to read such other information together with our
audit of the financial statements. In this process, we consider whether
there is a material inconsistency or other material misstatement between
Audit Report Page 4
such other information and the financial statements or what we have
learned during the audit process.
If we determine that there is a material misstatement in such other
information based on the work we have performed, we should report such
material misstatement. In this regard, we have nothing to report.
V 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 operations or make other necessary realistic choice.
The governance team is responsible for overseeing the financial
reporting process of Sino Great Wall.
VI CPA’s Responsibility for Auditing Financial Statements
Our objective is to obtain reasonable assurance as to whether the
entire financial statements are free from material misstatement due to
frauds or errors and to present an audit report containing audit opinions.
Reasonable assurance is a high level of assurance, but it does not
guarantee that the audit performed in accordance with audit standards can
always identify all material misstatements. Misstatement may be caused
by frauds or errors, and it is generally considered that the misstatement is
Audit Report Page 5
significant if it is reasonably expected that the misstatement alone or
aggregated may affect the economic decision of the financial statement
user based on the financial statements
In the course of carrying out the audit work in accordance with the
audit standards, we use professional judgment and maintain professional
suspicion. At the same time, we also perform the following tasks:
(1) Identify and assess risks of material misstatement of the
financial statements due to fraud or errors, design and implement audit
procedures to address these risks, and obtain adequate and appropriate
audit evidence as a basis for expressing audit opinions. Since frauds may
involve collusion, falsification, intentional omission, misrepresentation or
override of internal controls, the risk of failing to identify a material
misstatement due to frauds is higher than the risk of failing to identify a
material misstatement due to errors.
(2) Understand audit-related internal controls to design
appropriate audit procedures.
(3) Evaluate the appropriateness of the accounting policies
selected and the reasonableness of the accounting estimates and relevant
disclosure by the management;
(4) Draw conclusions on the appropriateness of continued
operations assumptions used by the management. Conclude on whether a
material uncertainty exists related to events or condition that may cast
significant doubt on Sino Great Wall‘s ability to continue as a going
concern based on the audit basis acquired. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor‘s
report to the related disclosures in the financial statements or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are
based on the information available as of the date of the audit report.
However, future events or circumstances may cause Sino Great Wall not
to continue the operation.
(5) Evaluate the overall presentation, structure, and content
(including disclosures) of the financial statements, and evaluate whether
the financial statements fairly reflect the relevant transactions and events.
Audit Report Page 6
(6) Gain sufficient and appropriate audit evidence for the financial
information of the entities‘ or business activities of Sino Great Wall to
express audit opinions on the financial statements. We are responsible for
directing, supervising and executing audit of the Company, and assume
full responsibility for the audit opinions.
We communicate with the governance team on the planned audit
scope, timing, and major audit findings, including communication on the
internal control deficiencies that we identified during the audit.
We also provide a statement to the governance team on compliance
with ethical requirements related to independence, and communicate with
the governance team on all relationships and other matters that may
reasonably be considered to affect our independence and related
preventive measures (if applicable).
From the matters on which we communicate with the governance
team, we determine which matters are the most important for the audit of
the financial statements for the current period and thus constitute the key
audit matters. We describe these matters in our audit report, and unless
laws and regulations prohibit the public disclosure of these matters, or in
rare cases, if it is reasonably expected that the negative consequences of
communicating certain matters in the audit report will outweigh the
benefits in the public interest, we determine that such matters should not
be communicated in the audit report.
Lixin Certified Public Chinese Certified Public Accountant:
Accountants Liao Jiahe (Engagement Partner)
(Special General
Partnership)
Chinese Certified Public Accountant:
Feng Xue
Shanghai, China April 23, 2018
Audit Report Page 7
Sino Great Wall Co., Ltd.
Consolidated Balance Sheet
December 31, 2017
(All amounts expressed in RMB unless otherwise stated)
Assets Note V Ending balance Opening balance
Current assets:
Monetary Resources (I) 1,604,973,916.12 1,340,815,821.83
Settlement provisions
Loans to other banks
Financial assets measured with fair value and
having the change of fair value recorded in the gain
or loss of the current period
Derived financial assets
Notes Receivable (II) 288,201,562.88 1,074,390,642.58
Accounts receivable (III) 5,706,675,244.08 3,725,170,208.31
Advance Payment (IV) 225,208,527.88 319,206,798.63
Premiums receivable
Reinsurance receivables
Reinsurance contract reserve receivable
Interests Receivable
Dividends receivable
Other accounts receivable (V) 1,674,675,360.28 651,012,132.91
Bought-for-resale financial assets
Inventories (VI) 556,839,325.50 332,904,930.36
Assets held for sale
Non-current Assets Coming Due within One Year (VII) 0.00 13,462,942.89
Other Current Assets (VIII) 17,126,911.05 35,450,194.47
Total current assets
10,073,700,847.79 7,492,413,671.98
Non-current assets:
Loans and advances
Available-for-Sale Financial Assets (IX) 10,338,500.00
Held-to-maturity investments
Long-Term Accounts Receivable (X) 14,328,557.82
Long-term Equity Investments
Investment Real Estate
Fixed assets (XI) 174,537,150.56 128,483,747.74
Construction in Progress (XII) 4,968,590.96
Engineering materials
Page 1 of Financial Statement
Assets Note V Ending balance Opening balance
Disposal of fixed assets
Productive biological assets
Oil-gas assets
Intangible assets (XIII) 127,524,445.00 106,203,443.55
Development expenditure
Goodwill (XIV) 64,494,271.55 58,874,144.79
Long-term Deferred Expenses (XV) 10,124,913.15 7,003,035.94
Deferred income tax assets (XVI) 118,233,337.36 76,298,659.34
Other Non-current Assets (XVII) 1,069,594,572.11 116,902,258.30
Total non-current assets
1,594,144,338.51 493,765,289.66
Total assets 11,667,845,186.30 7,986,178,961.63
The attached notes to the financial statements are integral part of the financial statements.
Enterprise Legal Representative: Chief Accountant: Person-in-charge of the accounting agency:
Page 2 of Financial Statement
Sino Great Wall Co., Ltd.
Consolidated Balance Sheet (cont.)
December 31, 2017
(All amounts expressed in RMB unless otherwise stated)
Total Liabilities and Owners' Equity Note V Ending balance Opening balance
Current liabilities:
Short-term Loans （XVIII）
3,477,200,420.55 1,966,058,357.59
Borrowings from central banks
Receipt of deposits and deposits from other banks
Loans from other banks
Financial liabilities measured with fair value and having the
change of fair value recorded in the gain or loss of the current
period
Derived financial liabilities
Notes Payable （XXI）
906,597,988.15 706,883,375.54
Accounts payable （XX）
1,719,579,087.62 1,313,948,990.25
Items Received in Advance XXI 146,379,852.67 573,784,072.58
Fee for sold-for-buyback financial assets
Handling charge and commission payable
Payroll Payable XXII 21,911,542.07 18,797,546.69
Taxes Payable XXIII 357,445,477.71 313,483,669.78
Interest Payable XXIV 16,105,263.85 6,428,493.55
Dividends payable
Other accounts payable XXV 520,965,421.13 222,414,975.01
Reinsurance premiums payable
Insurance contract provisions
Fee for agency transaction of securities
Fee for agency underwriting of securities
Held-for-sale liabilities
Non-current liabilities coming due within one year XXVI 820,422,471.45 175,958,998.04
Other Current Liabilities XXVII 121,529,600.95 30,382,980.72
Total current liabilities
8,108,137,126.15 5,328,141,459.75
Non-current liabilities:
Long-Term Loans XXVIII 843,092,471.02 786,858,878.82
Bonds Payable XXIX 345,000,000.00
Including: Preferred stock
Perpetual bond
Long-term accounts payable XXX 81,945,567.86
Long-term payroll payable
Page 3 of Financial Statement
Total Liabilities and Owners' Equity Note V Ending balance Opening balance
Special accounts payable
Accrued Liabilities XXXI 3,414,189.15 13,225,861.70
Differed Income
Deferred income tax liabilities (XVI) 26,088,961.71 27,469,888.77
Other non-current liabilities
Total non-current liabilities
1,299,541,189.74 827,554,629.29
Total liabilities
9,407,678,315.89 6,155,696,089.04
Owner‘s equity
Capital Stock XXXII 1,698,245,011.00 1,698,245,011.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Capital Reserve XXXIII -1,299,349,701.74 -1,299,349,701.74
Less: Treasury stock
Other composite benefits
858,242.13
Special reserve XXXIV 164,231,078.18 65,687,868.14
Surplus Reserve XXXV 84,394,441.23 84,394,441.23
General risk reserve
Undistributed Profit XXXVI 1,503,103,396.72 1,228,970,498.86
Total owner‘s equity attributed to the parent company
2,151,482,467.52 1,777,948,117.49
Minor shareholders‘ equity
108,684,402.89 52,534,755.10
Total owner’s equity
2,260,166,870.41 1,830,482,872.59
Total liabilities and owner’s equity
11,667,845,186.30 7,986,178,961.63
The attached notes to the financial statements are integral part of the financial statements.
Enterprise Legal Representative: Chief Accountant: Person-in-charge of the accounting agency:
Page 4 of Financial Statement
Sino Great Wall Co., Ltd.
Balance Sheet
December 31, 2017
(All amounts expressed in RMB unless otherwise stated)
Assets Note XV Ending balance Opening balance
Current assets:
Monetary Resources
407,959,304.60 168,691,344.34
Financial assets measured with fair value and having the
change of fair value recorded in the gain or loss of the
current period
Derived financial assets
Notes Receivable
Accounts receivable (I)
6,346.00
Advance Payment
3,865,500.01 1,000,000.00
Interests Receivable
Dividends receivable
100,000,000.00
Other accounts receivable (II) 3,590,967,483.22 1,672,200,041.98
Inventories
Assets held for sale
Non-current Assets Coming Due within One Year
Other Current Assets
2,175,646.45 1,404,744.25
Total current assets 4,104,967,934.28 1,843,302,476.57
Non-current assets:
Available-for-Sale Financial Assets
Held-to-maturity investments
Long-Term Accounts Receivable
Long-term Equity Investments (III)
3,311,211,536.66 3,176,451,536.66
Investment Real Estate
Fixed assets 52,246.48 4,121.50
Construction in Progress
Engineering materials
Disposal of fixed assets
Productive biological assets
Oil-gas assets
Intangible assets
Development expenditure
Goodwill
Long-term Deferred Expenses
168,284.84 336,569.60
Page 5 of Financial Statement
Assets Note XV Ending balance Opening balance
Deferred income tax assets
Other Non-current Assets
550,524,570.00 48,960,000.00
Total non-current assets 3,861,956,637.98 3,225,752,227.76
Total assets 7,966,924,572.26 5,069,054,704.33
The attached notes to the financial statements are integral part of the financial statements.
Enterprise Legal Representative: Chief Accountant: Person-in-charge of the accounting agency:
Page 6 of Financial Statement
Sino Great Wall Co., Ltd.
Balance Sheet (cont.)
December 31, 2017
(All amounts expressed in RMB unless otherwise stated)
Total Liabilities and Owners' Equity Notes Ending balance Opening balance
Current liabilities:
Short-term Loans
2,287,870,000.00 980,000,000.00
Financial liabilities measured with fair value and having
the change of fair value recorded in the gain or loss of
the current period
Derived financial liabilities
Notes Payable
537,227,578.11 68,000,000.00
Accounts payable
Items Received in Advance
Payroll Payable
1,580,335.12 701,792.11
Taxes Payable
97,124,633.81 97,085,106.00
Interest Payable
13,002,236.21 5,150,639.24
Dividends payable
Other accounts payable 379,420,427.54 13,252,762.06
Held-for-sale liabilities
Non-current liabilities coming due within one year
700,000,000.00
Other Current Liabilities
Total current liabilities 4,016,225,210.79 1,164,190,299.41
Non-current liabilities:
Long-Term Loans 800,000,000.00 700,000,000.00
Bonds Payable 100,000,000.00
Including: Preferred stock
Perpetual bond
Long-term accounts payable
Long-term payroll payable
Special accounts payable
Accrued Liabilities
Differed Income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 900,000,000.00 700,000,000.00
Total liabilities 4,916,225,210.79 1,864,190,299.41
Owner‘s equity
Page 7 of Financial Statement
Total Liabilities and Owners' Equity Notes Ending balance Opening balance
Capital Stock
1,698,245,011.00 1,698,245,011.00
Other equity instruments
Including: Preferred stock
Perpetual bond
Capital Reserve 1,237,956,472.37 1,237,956,472.37
Less: Treasury stock
Other composite benefits
Special reserve
Surplus Reserve
26,309,287.00 26,309,287.00
Undistributed Profit
88,188,591.10 242,353,634.55
Total owner’s equity 3,050,699,361.47 3,204,864,404.92
Total liabilities and owner’s equity 7,966,924,572.26 5,069,054,704.33
The attached notes to the financial statements are integral part of the financial statements.
Enterprise Legal Representative: Chief Accountant: Person-in-charge of the accounting agency:
Page 8 of Financial Statement
Sino Great Wall Co., Ltd.
Consolidated Profit Statement
Year 2017
(All amounts expressed in RMB unless otherwise stated)
Amount incurred of Amount incurred of last
Items Note V
current period period
I. Total business income
6,497,124,980.52 4,664,999,117.17
Including: Business income (XXXVII)
6,497,124,980.52 4,664,999,117.17
Interest income
Insurance premiums earned
Handling charges and commission income
II. Total business costs
5,990,935,078.96 4,110,727,814.01
Including: Business costs (XXXVII)
4,886,354,499.66 3,459,377,744.66
Interest expenditure
Handling charges and commissions expenses
Refund of insurance premiums
Net payments for insurance claims
Net provision for insurance contracts
Commission on insurance policies
Cession charges
Taxes and Surcharge (XXXVIII)
4,533,005.61 9,651,529.46
Selling Expenses (XXXIX)
32,213,247.97 30,318,688.27
Management Expenses (XL)
312,957,207.20 313,930,733.56
Financial Expenses (XLI)
432,590,607.55 127,437,227.95
Asset Impairment Loss (XLII)
322,286,510.97 170,011,890.11
Plus: Gain on change of fair value (loss represented with ―－‖)
Gain on investment (loss represented with ―－‖) (XLIII)
-387,601.37 2,226,350.97
Including: Gain on investments in jointly-run enterprises and joint ventures
-564,833.40
Proceeds from asset disposal (loss is represented with "-") (XLIV)
-150,250.00 -564,833.40
Gain or loss on foreign exchange transactions (loss filled with ―-―)
Other Income (XLV)
2,211,128.89
III. Operating profit (loss represented with ―－‖)
507,863,179.08 555,932,820.72
Plus: Non-operating income (XLVI)
156,426.78 26,427,042.86
Less: Non-operating expenditure (XLVII)
-3,030,152.73 21,022,106.88
IV. Total profit (total loss represented with ―－‖)
511,049,758.59 561,337,756.70
Less: Expense of income tax (XLVIII)
127,003,731.76 89,244,861.75
V. Net profit (net loss represented with ―－‖)
384,046,026.83 472,092,894.95
Page 9 of Financial Statement
Amount incurred of Amount incurred of last
Items Note V
current period period
(I) Classified by business continuity
1. Net profit from continued operations (net loss is represented with "-")
2. Net profit from discontinued operations (net loss is represented with "-")
384,046,026.83 472,092,894.95
(II) Classified by ownership
1. Minor stockholder‘s gain or loss
2. Net profits attributable to the Shareholders of the Parent Company
3,955,036.01 -1,568,967.72
VI. After-tax net amount of other composite benefits
380,090,990.82 473,661,862.67
After-tax net amount of other composite benefit attributed to the parent
company‘s owner 858,242.13
(I) Other composite benefits unavailable to reclassify into gain or loss in future
858,242.13
1. Change as a result of re-measurement of net liabilities or net assets of defined
benefit plan
2. Shares enjoyed in the other composite benefits which cannot be reclassified
into gain or loss of invested units under equity method
(II) Other composite benefits which will be reclassified into gain or loss in future
1. Shares enjoyed in the other composite benefits which will be reclassified into
gain or loss of invested units under equity method 858,242.13
2. Gain or loss on the change of fair value of available-for-sale financial assets
3. Gain or loss on held-to-maturity investments reclassified into
available-for-sale financial assets
4. Effective part of gain or loss on hedging of cash flow
5. Balance from conversion of foreign-currency financial statements
6. Others
858,242.13
After-tax net amount of other composite benefits attributed to minor shareholders
VII. Total amount of composite benefits
Total amount of composite benefits attributed to the parent company‘s owner
384,904,268.96 472,092,894.95
Total amount of composite benefits attributed to minor shareholders
380,949,232.95 473,661,862.67
VIII. Earnings per share:
3,955,036.01 -1,568,967.72
(I) Basic earnings per share (Yuan/ share)
(II) Diluted earnings per share (Yuan/ share)
0.22 0.28
0.22 0.28
Enterprise Legal Representative: Chief Accountant: Person-in-charge of the accounting agency:
Page 10 of Financial Statement
Sino Great Wall Co., Ltd.
Profit Statement
Year 2017
(All amounts expressed in RMB unless otherwise stated)
Amount incurred of Amount incurred of last
Items Note XV
current period period
I. Operating income
240,558.55 238,048.64
Less: Operating cost
1,482.50
Taxes and Surcharge
486,860.22 192,135.56
Selling Expenses
793,644.62
Management Expenses
48,845,134.77 34,816,749.95
Financial Expenses
94,901,413.49 5,966,974.50
Asset Impairment Loss
7,489,577.66 781,524.61
Plus: Gain on change of fair value (loss represented with ―－‖)
Gain on investment (loss represented with ―－‖)
100,000,000.00 396,197.49
Including: Gain on investments in jointly-run enterprises and joint
ventures
Proceeds from asset disposal (loss is represented with "-")
Other Income
7,211.91
II. Operating profit (loss represented with ―－‖)
-52,270,342.80 -41,123,138.49
Plus: Non-operating income
0.01 26,315,384.00
Less: Non-operating expenditure
III. Total profit (total loss represented with ―－‖)
-52,270,342.79 -14,807,754.49
Less: Expense of income tax
382.68
IV. Net profit (net loss represented with ―－‖)
-52,270,342.79 -14,808,137.17
(I) Net profit from continued operations (net loss is represented
with "-") -52,270,342.79 -14,808,137.17
(II) Net profit from discontinued operations (net loss is
represented with "-")
V. After-tax net amount of other composite benefits
(I) Other composite benefits unavailable to reclassify into gain or
loss in future
1. Change as a result of re-measurement of net liabilities or net
assets of defined benefit plan
2. Shares enjoyed in the other composite benefits which cannot
be reclassified into gain or loss of invested units under equity
method
(II) Other composite benefits which will be reclassified into gain
or loss in future
1. Shares enjoyed in the other composite benefits which will be
reclassified into gain or loss of invested units under equity method
2. Gain or loss on the change of fair value of available-for-sale
financial assets
3. Gain or loss on held-to-maturity investments reclassified into
available-for-sale financial assets
4. Effective part of gain or loss on hedging of cash flow
Page 11 of Financial Statement
Amount incurred of Amount incurred of last
Items Note XV
current period period
5. Balance from conversion of foreign-currency financial
statements
6. Others
VI. Total amount of composite benefits
-52,270,342.79 -14,808,137.17
VII. Earnings per share:
(I) Basic earnings per share (Yuan/ share)
(II) Diluted earnings per share (Yuan/ share)
The attached notes to the financial statements are integral part of the financial statements.
Enterprise Legal Representative: Chief Accountant: Person-in-charge of the accounting agency:
Page 12 of Financial Statement
Sino Great Wall Co., Ltd.
Consolidated Cash Flow Statement
Year 2017
(All amounts expressed in RMB unless otherwise stated)
Amount incurred of Amount incurred of last
Items Note V
current period period
I Cash flow from operating activities
Cash received from sale of goods or rendering of services
4,642,883,579.49 2,793,118,697.02
Net increment in customer bank deposits and due to banks and other financial
institutions -
Net increment of borrowings from central bank
-
Net increment in placements from other financial institutions
-
Premiums received from original insurance contracts
-
Net cash received from reinsurance business
-
Net increment in deposits from policyholders
-
Net increment from disposal of financial assets measured with fair value and
having the change of fair value recorded in the gain or loss of the current period -
Interest, handling charges and commission received
-
Net increment in placements
-
Net increment in repurchase business capital
-
Tax rebates received
11,520,458.96 6,342,293.39
Cash received relating to other operating activities
6,134,642,883.34 1,818,662,633.63
Subtotal of cash inflows from operating activities
4,618,123,624.04
10,789,046,921.79
Cash paid for goods purchased and services received
5,007,872,564.26 2,879,469,436.78
Net increment in loans and advances to customers
-
Net increment in deposits with central bank and other financial institutions
-
Original insurance contract claims paid
-
Interest, handling charges and commissions paid
-
Policyholder Dividend Paid
-
Cash paid to and for employees
380,713,969.98 345,233,924.96
Various taxes paid
212,006,262.08 92,009,656.66
Cash paid relating to other operating activities
6,970,322,744.12 2,989,286,419.58
Subtotal of cash outflows for operating activities
6,305,999,437.98
12,570,915,540.43
Net amount of cash flow from operating activities
-1,781,868,618.65 -1,687,875,813.94
II Cash flows from investing activities
Cash received from disinvestments
2,000,000.00 119,902,961.04
Page 13 of Financial Statement
Amount incurred of Amount incurred of last
Items Note V
current period period
Cash received from obtaining of investment yield
- 1,566,217.08
Net amount of cash received from disposal of fixed assets, intangible assets and
other long-term assets 85,000.00 95,937.00
Net amount of cash received from disposal of subsidiaries and other operating
units - -
Cash received relating to other investment activities
- -
Subtotal of cash inflows from investment activities
2,085,000.00 121,565,115.12
Cash paid for purchasing and construction of fixed assets, intangible assets and
other long-term assets 48,204,408.85 15,582,049.03
Cash paid for investments
840,948,723.77 188,307,635.00
Net increment of pledged loans
- -
Net amount of cash paid for obtaining subsidiaries and other operating units
2,340,123.50 42,467,736.61
Cash paid relating to other investment activities
131,500,000.00 -
Subtotal of cash outflows for investment activities
1,022,993,256.12 246,357,420.64
Net amount of cash flow from investment activities
-124,792,305.52
-1,020,908,256.12
III Cash flow from financing activities
Cash received from absorbing investments
30,240,000.00 -
Including: Cash received from subsidiaries‘ absorbing the investments of minor
shareholders - -
Cash received from obtaining loans
4,537,777,192.35 3,352,564,898.49
Cash received from issuing bonds
344,800,000.00 -
Cash received relating to other financing activities
179,327,200.00 175,355,000.00
Subtotal of cash inflows from financing activities
5,092,144,392.35 3,527,919,898.49
Cash paid for repaying debts
1,998,607,849.12 676,386,220.35
Cash paid for distributing dividends, profits or paying interests
332,584,990.54 116,576,063.38
Including: Dividends and profits paid by subsidiaries to minor shareholders
- -
Cash paid relating to other financing activities
233,071,283.83 555,780,295.84
Subtotal of cash outflows for financing activities
2,564,264,123.49 1,348,742,579.57
Net amount of cash flow from financing activities
2,527,880,268.86 2,179,177,318.92
IV Cash and cash equivalents affected by change of exchange rate
-21,586,126.02 -5,549,633.86
V Net increment of cash and cash equivalents
-296,482,731.93 360,959,565.60
Plus: Opening balance of cash and cash equivalents
943,705,322.41 582,745,756.81
VI Ending balance of cash and cash equivalents
647,222,590.48 943,705,322.41
The attached notes to the financial statements are integral part of the financial statements.
Enterprise Legal Representative: Chief Accountant: Person-in-charge of the accounting agency:
Page 14 of Financial Statement
Sino Great Wall Co., Ltd.
Cash Flow Statement
Year 2017
(All amounts expressed in RMB unless otherwise stated)
Amount incurred of Amount incurred of last
Items Notes
current period period
I Cash flow from operating activities
Cash received from sale of goods or rendering of services
265,320.00 266,133.00
Tax rebates received
Cash received relating to other operating activities
4,283,071,598.59 822,670,967.58
Subtotal of cash inflows from operating activities
4,283,336,918.59 822,937,100.58
Cash paid for goods purchased and services received
Cash paid to and for employees
494,240.89 7,388,478.01
Various taxes paid
396,447.37 1,558,123.56
Cash paid relating to other operating activities
5,546,418,464.78 2,332,567,169.66
Subtotal of cash outflows for operating activities
5,547,309,153.04 2,341,513,771.23
Net amount of cash flow from operating activities
-1,263,972,234.45 -1,518,576,670.65
II Cash flows from investing activities
Cash received from disinvestments
107,000,000.00
Cash received from obtaining of investment yield
396,197.49
Net amount of cash received from disposal of fixed assets,
intangible assets and other long-term assets
Net amount of cash received from disposal of subsidiaries and
other operating units
Cash received relating to other investment activities
Subtotal of cash inflows from investment activities
107,396,197.49
Cash paid for purchasing and construction of fixed assets,
intangible assets and other long-term assets 65,440.00
Cash paid for investments
696,324,570.00 155,960,000.00
Net amount of cash paid for obtaining subsidiaries and other
operating units - 97,000,000.00
Cash paid relating to other investment activities
-
Subtotal of cash outflows for investment activities
696,390,010.00 252,960,000.00
Net amount of cash flow from investment activities
-696,390,010.00 -145,563,802.51
III Cash flow from financing activities
Cash received from absorbing investments
Cash received from obtaining loans
3,085,070,000.00 1,810,000,000.00
Cash received from issuing bonds
99,800,000.00 -
Cash received relating to other financing activities
12,500,000.00
Subtotal of cash inflows from financing activities
3,184,870,000.00 1,822,500,000.00
Page 15 of Financial Statement
Amount incurred of Amount incurred of last
Items Notes
current period period
Cash paid for repaying debts
980,200,000.00 130,000,000.00
Cash paid for distributing dividends, profits or paying interests
282,451,200.03 74,013,433.81
Cash paid relating to other financing activities
31,000,000.00 24,800,000.00
Subtotal of cash outflows for financing activities
1,293,651,200.03 228,813,433.81
Net amount of cash flow from financing activities
1,891,218,799.97 1,593,686,566.19
IV Cash and cash equivalents affected by change of
exchange rate
V Net increment of cash and cash equivalents
-69,143,444.48 -70,453,906.97
Plus: Opening balance of cash and cash equivalents
168,691,344.34 239,145,251.31
VI Ending balance of cash and cash equivalents
99,547,899.86 168,691,344.34
The attached notes to the financial statements are integral part of the financial statements.
Enterprise Legal Representative: Chief Accountant: Person-in-charge of the accounting agency:
Page 16 of Financial Statement
Sino Great Wall Co., Ltd.
Consolidated Statement of Changes in Owner’s Equity
Year 2017
(All amounts expressed in RMB unless otherwise stated)
Amount of current period
Owner‘s equity attributed to the parent company
Items Minor
Other equity instruments Less: Other Genera
shareholders‘ Total owner‘s equity
Capital Stock Preferre Perpetu Other Capital Reserve Treasur composite Special reserve Surplus Reserve l risk Undistributed Profit equity
d stock al bond s y stock benefits reserve
I. Closing
balance of 1,698,245,011. -1,299,349,701. 84,394,441.2 1,228,970,498. 1,830,482,872.
the prior 65,687,868.14 52,534,755.10
period
00 74 3 86 59
Plus:
Correction
of
accounting
policies
Correction
of previous
errors
Business
combination
under the
same
control
Others
II.
Beginning 1,698,245,011. -1,299,349,701. 84,394,441.2 1,228,970,498. 1,830,482,872.
balance of 65,687,868.14 52,534,755.10
this year
00 74 3 86 60
III. Amount
increased or
decreased of
current 858,242.1
period 98,543,210.04 0.00 274,132,897.86 56,149,647.79 429,683,997.82
(decrease
represented 3
with ―-‖)
(I)Total
amount of 858,242.1
composite 380,090,990.83 3,955,036.01 384,904,268.97
benefits
3
(II)Capital
input and
decreased -4,063,392.31 52,194,611.78 48,131,219.47
by owners
1.
Common
stock input
by 30,240,000.00 30,240,000.00
shareholders
Page 17 of Financial Statement
Amount of current period
Owner‘s equity attributed to the parent company
Items Minor
Other equity instruments Less: Other Genera shareholders‘ Total owner‘s equity
Capital Stock Preferre Perpetu Other Capital Reserve Treasur composite Special reserve Surplus Reserve l risk Undistributed Profit equity
d stock al bond s y stock benefits reserve
2. Capital
input by
holders of
other equity
instruments
3. Amount
of
share-based
payment
recorded in
owner‘s
equity
4. Others
-4,063,392.31 21,954,611.78 17,891,219.47
(III)Profit -101,894,700.6 -101,894,700.6
distribution -0.00
6 6
1. Surplus
reserve
withdrawn -0.00 0.00
2. General
risk reserve
withdrawn
3.
Distribution
to owners -101,894,700.6 -101,894,700.6
(or
shareholders
) 6 6
4. Others
(IV)Internal
carry-forwar
d of owner‘s
equity
1. Capital
reserve
converted to
increase
capital (or
capital
stock)
2. Surplus
reserve
converted to
increase
capital (or
capital
stock)
3. Surplus
reserve used
to cover
losses
4. Others
Page 18 of Financial Statement
Amount of current period
Owner‘s equity attributed to the parent company
Items Minor
Other equity instruments Less: Other Genera shareholders‘ Total owner‘s equity
Capital Stock Preferre Perpetu Other Capital Reserve Treasur composite Special reserve Surplus Reserve l risk Undistributed Profit equity
d stock al bond s y stock benefits reserve
(V). Special
reserve 98,543,210.04 98,543,210.04
1.
Withdrawn
in current 98,543,210.04 98,543,210.04
period
2. Used in
current
period
(VI). Others
IV. Ending
balance of 1,698,245,011. -1,299,349,701. 858,242.1 164,231,078.1 84,394,441.2 1,503,103,396. 108,684,402.8 2,260,166,870.
current
period
00 74 3 8 3 72 9 41
The attached notes to the financial statements are integral part of the financial statements.
Enterprise Legal Representative: Chief Accountant: Person-in-charge of the accounting agency:
Page 19 of Financial Statement
Sino Great Wall Co., Ltd.
Consolidated Statement of Changes in Owner’s Equity (cont.)
Year 2017
(All amounts expressed in RMB unless otherwise stated)
Amount of last period
Owner‘s equity attributed to the parent company
Minor
Items Other equity instruments Less: Other Genera
shareholders‘ Total owner‘s equity
Capital Stock Preferre Perpetua Other Capital Reserve Treasur composit Special reserve Surplus Reserve l risk Undistributed Profit
equity
d stock l bond s y stock e benefits reserve
I. Closing
balance of 46,014,941.5 84,394,441.2 -1,713,075.1 1,280,543,663.5
the prior 446,906,582.00 -50,367,862.22 755,308,636.19
period
4 3 9 5
Plus:
Correction
of
accounting
policies
Correction
of previous
errors
Business
combination
under the
same control
Others
II.
Beginning 46,014,941.5 84,394,441.2 -1,713,075.1 1,280,543,663.5
balance of 446,906,582.00 -50,367,862.22 755,308,636.19
this year
4 3 9 5
III. Amount
increased or
decreased of
current 1,251,338,429.0 -1,248,981,839.5 19,672,926.6 54,247,830.2
period 473,661,862.67 549,939,209.04
(decrease
represented 0 2 0 9
with ―-‖)
(I)Total
amount of -1,327,357.6
composite 473,661,862.67 472,334,505.07
benefits
0
(II)Capital
input and 1,251,338,429.0 55,575,187.8 1,309,270,206.3
decreased by 2,356,589.48
owners
0 9 7
1. Common
stock input 1,251,338,429.0 1,251,338,429.0
by
shareholders
0 0
2. Capital
input by
holders of
Page 20 of Financial Statement
Amount of last period
Owner‘s equity attributed to the parent company
Minor
Items Other equity instruments Less: Other Genera
shareholders‘ Total owner‘s equity
Capital Stock Preferre Perpetua Other Capital Reserve Treasur composit Special reserve Surplus Reserve l risk Undistributed Profit
equity
d stock l bond s y stock e benefits reserve
other equity
instruments
3. Amount
of
share-based
payment
recorded in
owner‘s
equity
4. Others
55,575,187.8
2,356,589.48 57,931,777.37
9
(III)Profit
distribution
1. Surplus
reserve
withdrawn
2. General
risk reserve
withdrawn
3.
Distribution
to owners
(or
shareholders
)
4. Others
(IV)Internal
carry-forwar -1,251,338,429.0 -1,251,338,429.0
d of owner‘s
equity
0 0
1. Capital
reserve
converted to -1,251,338,429.0 -1,251,338,429.0
increase
capital (or
capital 0 0
stock)
2. Surplus
reserve
converted to
increase
capital (or
capital
stock)
3. Surplus
reserve used
to cover
losses
4. Others
(V)Special
reserve 19,672,926.6 19,672,926.60
Page 21 of Financial Statement
Amount of last period
Owner‘s equity attributed to the parent company
Minor
Items Other equity instruments Less: Other Genera
shareholders‘ Total owner‘s equity
Capital Stock Preferre Perpetua Other Capital Reserve Treasur composit Special reserve Surplus Reserve l risk Undistributed Profit
equity
d stock l bond s y stock e benefits reserve
0
1.
Withdrawn 56,095,547.0
in current 56,095,547.05
period
5
2. Used in 36,422,620.4
current
period 36,422,620.45
5
(VI)Others
IV. Ending
balance of 1,698,245,011.0 -1,299,349,701.7 65,687,868.1 84,394,441.2 1,228,970,498.8 52,534,755.1 1,830,482,872.5
current
period
0 4 4 3 6 0 9
The attached notes to the financial statements are integral part of the financial statements.
Enterprise Legal Representative: Chief Accountant: Person-in-charge of the accounting agency:
Page 22 of Financial Statement
Sino Great Wall Co., Ltd.
Statement of Changes in Owner’s Equity
Year 2017
(All amounts expressed in RMB unless otherwise stated)
Items Amount of current period
Other equity instruments Less: Other
Special Undistributed
Capital Stock Preferred Perpetual Capital Reserve Treasury composite Surplus Reserve Total owner‘s equity
Others reserve Profit
stock bond stock benefits
I. Closing balance of the prior
period 1,698,245,011.00 1,237,956,472.37 26,309,287.00 242,353,634.55 3,204,864,404.92
Plus: Correction of accounting
policies
Correction of previous errors
Others
II. Beginning balance of this year
1,698,245,011.00 1,237,956,472.37 26,309,287.00 242,353,634.55 3,204,864,404.92
III. Amount increased or
decreased of current period
(decrease represented with ―-‖) -154,165,043.45 -154,165,043.45
(I)Total amount of composite
benefits -52,270,342.79 -52,270,342.79
(II)Capital input and decreased by
owners
1. Common stock input by
shareholders
2. Capital input by holders of
other equity instruments
3. Amount of share-based
payment recorded in owner‘s
equity
4. Others
(III)Profit distribution
-101,894,700.66 -101,894,700.66
1. Surplus reserve withdrawn
2. Distribution to owners (or
shareholders) -101,894,700.66 -101,894,700.66
3. Others
(IV)Internal carry-forward of
owner‘s equity
1. Capital reserve converted to
increase capital (or capital stock)
2. Surplus reserve converted to
increase capital (or capital stock)
Page 23 of Financial Statement
Items Amount of current period
Other equity instruments Less: Other
Special Undistributed
Capital Stock Preferred Perpetual Capital Reserve Treasury composite Surplus Reserve Total owner‘s equity
Others reserve Profit
stock bond stock benefits
3. Surplus reserve used to cover
losses
4. Others
(V)Special reserve
1. Withdrawn in current period
2. Used in current period
(VI)Others
IV. Ending balance of current
period 1,698,245,011.00 1,237,956,472.37 26,309,287.00 88,188,591.10 3,050,699,361.47
The attached notes to the financial statements are integral part of the financial statements.
Enterprise Legal Representative: Chief Accountant: Person-in-charge of the accounting agency:
Page 24 of Financial Statement
Sino Great Wall Co., Ltd.
Statement of Changes in Owner’s Equity (cont.)
Year 2017
(All amounts expressed in RMB unless otherwise stated)
Amount of last period
Other equity instruments Less: Other
Items Special Undistributed
Capital Stock Preferred Perpetual Capital Reserve Treasury composite Surplus Reserve Total owner‘s equity
Others reserve Profit
stock bond stock benefits
I. Closing balance of the prior
period 446,906,582.00 2,489,294,901.37 26,309,287.00 257,161,771.72 3,219,672,542.09
Plus: Correction of accounting
policies
Correction of previous errors
Others
II. Beginning balance of this
year 446,906,582.00 2,489,294,901.37 26,309,287.00 257,161,771.72 3,219,672,542.09
III. Amount increased or
decreased of current period
(decrease represented with ―-‖) 1,251,338,429.00 -1,251,338,429.00 -14,808,137.17 -14,808,137.17
(I)Total amount of composite
benefits -14,808,137.17 -14,808,137.17
(II)Capital input and decreased
by owners 1,251,338,429.00 1,251,338,429.00
1. Common stock input by
shareholders 1,251,338,429.00 1,251,338,429.00
2. Capital input by holders of
other equity instruments
3. Amount of share-based
payment recorded in owner‘s
equity
4. Others
(III)Profit distribution
1. Surplus reserve withdrawn
2. Distribution to owners (or
shareholders)
3. Others
(IV)Internal carry-forward of
owner‘s equity -1,251,338,429.00 -1,251,338,429.00
1. Capital reserve converted to
increase capital (or capital
stock) -1,251,338,429.00 -1,251,338,429.00
Page 25 of Financial Statement
Amount of last period
Other equity instruments Less: Other
Items Special Undistributed
Capital Stock Preferred Perpetual Capital Reserve Treasury composite Surplus Reserve Total owner‘s equity
Others reserve Profit
stock bond stock benefits
2. Surplus reserve converted to
increase capital (or capital
stock)
3. Surplus reserve used to
cover losses
4. Others
(V)Special reserve
1. Withdrawn in current period
2. Used in current period
(VI)Others
IV. Ending balance of current
period 1,698,245,011.00 1,237,956,472.37 26,309,287.00 242,353,634.55 3,204,864,404.92
The attached notes to the financial statements are integral part of the financial statements.
Enterprise Legal Representative: Chief Accountant: Person-in-charge of the accounting agency:
Page 26 of Financial Statement
Notes to Financial Statement
Sino Great Wall Co., Ltd.
Notes to Financial Statements 2017
(All amounts expressed in RMB unless otherwise stated)
I. Basic Information of the Company
(I)
Company Profile
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. The industries involved are the
architectural decoration industry and other construction industries.
As of December 31, 2017, 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, 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 23, 2018 after the approval of all
directors (board of directors) of the Company.
(II) Scope of consolidated financial statements
As of December 31, 2017, the subsidiaries within the scope of the Company‘s
consolidated financial statements were as shown below:
Note to financial statement Page 1
Notes to Financial Statement
Invested units
Changzhi Shenzhou Laodingshan Industrial Co., Ltd.
Xiangfen County Taoshan Construction Co., Ltd.
Sino Great Wall (Xihua) Economic Development Zone Investment Co., Ltd.
Liupanshui Central People‘s Hospital Investment Co., Ltd.
Sino Zhigu Industrial (Yueyang) Co., Ltd.
Sino Great Wall Guangxia (Wuhan) Medical Development Co., Ltd.
Sino Great Wall Infrastructure Investment Co., Ltd.
Wuhan Commercial Workers Hospital LLC
Sino Great Wall Medical Investment Management Co., Ltd.
Sino Great Wall International Engineering Co., Ltd.
Fujian Sino Great Wall Mingyihui Medical Investment Co., Ltd.
Sino Great Wall Medical Investment (Hubei) Co., Ltd.
Hubei Yuanyaotong Supply Chain Co., Ltd.
Sino Great Wall Medical Management (Inner Mongolia) Co., Ltd.
Sino Great Wall Health Management (Jiangsu) Co., Ltd.
Sino Great Wall (Beijing) Investment Fund Management Co., Ltd.
Sino Great Wall New Energy (Beijing) Co., Ltd.
Bozhou Guangcheng New Energy LLC
Bozhou Zhaosheng Agricultural Technology LLC
Bozhou Xieying Solar Power Generation LLC
Wu‘an Juhe Photovoltaic Power Co., Ltd.
Qian‘an Shenzhou Solar Power Generation Co., Ltd.
Shanghai Lingrui International Trading Co., Ltd.
Shenzhen Hongtulve Industrial Co., Ltd.
Guangzhou Herabenna Interior Design Co., Ltd.
Sino Great Wall Southwest Engineering Co., Ltd.
Sino Great Wall Southwest Science and Technology Co., Ltd.
Sino Great Wall Southwest Commercial and Trading Co., Ltd.
Sino Great Wall Southwest Engineering Consultation Co., Ltd.
Shenzhen Yatian Decoration Design Engineering Co., Ltd.
Sino Great Wall Decoration and Design Co., Ltd.
Suzhou Lvbang Wood Industry Technology Co., Ltd.
Huichang County Zhongcheng Construction Engineering Co., Ltd.
Sino Great Wall Zhihui Housing Property (Zhanjiang) Co., Ltd.
Great Wall Biaodian Energy Co., Ltd.
Kunming Sino Forest Industry Development Co., Ltd.
Sino Great Wall Development (Hengqin) Co., Ltd.
Sino Great Wall Construction Construction Co., Ltd.
Sino Great Wall Real Estate (Hubei) Co., Ltd.
SGW America LLC
Sino Great Wall Group Co., Limited
Far Eastern International Engineering Company, LLC
Sino Great Wall (Philippines) International Corporation
Sino Wai Man International Engineering Limited
Note to financial statement Page 2
Notes to Financial Statement
Sino Great Wall (HK) Property Co., Limited
SGW HP Engineering Construction SDN.BHD
SGW VENTURES SDN.BHD.
SGW CONSTRUCTION (LANGKAWI) SDN.BHD.
Alor Vista Development Sdn Bhd
SINO GREAT WALL GENERAL TRADING & CONTRACTING CO., LTD (Kuwait Branch)
Shenzhou Changcheng (Lao) Co., Ltd.
Sino Great Wall Group (UK) Co., Limited
Sino Great Wall International Engineering (MM) Co., Ltd.
Maldives Branch of Sino Great Wall International Engineering Co., Ltd.
Inrich Me Engineering Co., Ltd.
SINO GREAT WALL INTERNATIONAL ENGINEERING (MACAU) CO., LIMITED
Sino Great Wall International Engineering (Thailand) Co., Ltd.
Sino Great Wall International Engineering (CNMI) Co., LLC.
SINO GREAT WALL (USA).INC
PT.SINO GREAT WALL INVESTMENT INDONESIA
PT.SINO GREAT WALL CONSTRUCTION INDONESIA
For the range of this consolidated financial statement and its change information, see
details in Note VI. Change of consolidation range and Note VII. Rights and interests in
other subjects.
II. Basis for Preparation of Financial Statements
(I) 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, various detailed
accounting rules, Guidelines for Application of Accounting Standards for Business
Enterprises, Interpretation of Accounting Standards for Business Enterprises and other
relevant regulations issued by the Ministry of Finance (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 issued by China Securities
Regulatory Commission.
(II) Sustained Operation
Note to financial statement Page 3
Notes to Financial Statement
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.
III Important Accounting Policies and Accounting Estimates
(I) 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 relevant information like
financial standing, operating results, cash flow, etc. in the reporting period authentically
and completely.
(II) Fiscal Period
From Jan. 1 to Dec. 31 in the Gregorian calendar is one fiscal year.
(III) Business Cycle
The Company‘s business cycle is 12 months.
(IV) Recording Currency
The Company adopts RMB as recording currency.
(V) 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
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Notes to Financial Statement
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.
(VI)
Method for Preparation of Consolidated Financial Statements
1. Consolidation Scope
The consolidation scope of the Company‘s consolidated financial statements is
determined based on control, and all subsidiaries (including the divisible parts of
the invested parties controlled by the Company) are all incorporated into the
consolidated financial statements.
2. Consolidation Procedures
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
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Notes to Financial Statement
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
―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
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Notes to Financial Statement
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
① General Treatment Method
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
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Notes to Financial Statement
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.
② Disposal of subsidiaries by steps
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 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:
ⅰ. These transactions are concluded simultaneously or in condition of
considering mutual influences;
ⅱ. Only the entirety of these transactions could achieve a complete business
result;
ⅲ. The occurrence of a transaction depends on the occurrence of at least one of
the other transactions;
ⅳ. 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
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Notes to Financial Statement
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.
(3) Purchasing of subsidiaries‘ minor stock equity
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.
(4) Disposal of partial equity investments in subsidiary companies in condition of
not losing control right
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.
(VII)
Standard for Determination of Cash and Cash Equivalents
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Notes to Financial Statement
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.
(VIII) Foreign Businesses and Conversion of Foreign-Currency Statements
1. 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.
2. 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.
(IX) Financial Instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
1. Classification of Financial Instruments
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Notes to Financial Statement
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
(1) Financial 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.
Note to financial statement Page 11
Notes to Financial Statement
(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.
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.
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Notes to Financial Statement
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
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Notes to Financial Statement
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 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
Note to financial statement Page 14
Notes to Financial Statement
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
The measurement of impairment loss for held-to-maturity investments will be
Note to financial statement Page 15
Notes to Financial Statement
treated according to the method for measurement of impairment loss of accounts
receivable.
(X) Bad Debt Reserves for 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
more than RMB 10 million (inclusive) and other accounts receivable from a single
relevant unit with the balance more than RMB 2 million (inclusive) as accounts
receivable with significant single amount.
Method for withdrawal of bad debt reserve with significant single amount and
withdrawn independently:
On the date of balance sheet, 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:
(1) Recognition basis for credit risk portfolio
The Company classifies the accounts receivable without significant single amount and
those with significant single amount that are not impaired according to separate test into
groups in accordance with the similarity and relevance of credit risk characteristics. Bad
debt reserves shall be withdrawn in a certain rate of the balance of these accounts
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Notes to Financial Statement
receivable portfolios. Based on the actual loss ratio of the previous year's same or similar
portfolio of accounts receivable, combined with the current situation, the rate for
withdrawing the bad debt reserves for each portfolio of the current period shall be
confirmed, according to which the bad debt reserves to be withdrawn for the current
period are calculated.
(2) Method for withdrawing bad debt reserves according to the credit risk feature
portfolio
Method for withdrawing bad debt reserves according to the credit risk feature portfolio
Account aging portfolio Account age analysis method
Combination of affiliated parties within the range of consolidation No calculation of bad debt reserves
Those with bad debt reserve withdrawn by means of account analysis in the
portfolios:
Withdrawal rate of accounts Withdrawal rate of other
Account age
receivable (%) receivables (%)
Within 1 year 5 5
1－2 years 10 10
2－3 years 30 30
3－4 years 50 50
4－5 years 80 80
More than 5 years 100 100
3. Accounts Receivable with Insignificant Single Amount but Having Bad Debt
Reserve Withdrawn Separately:
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
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Notes to Financial Statement
than their book value;
(XI) Inventories
1. Classification of Inventories
The stock is divided into: 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. 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
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Notes to Financial Statement
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. Inventory Taking System
Perpetual inventory taking system is adopted.
5. Method for Amortization of Low-Value Easily-Consumed Articles and
Packing
(1) One-off writing-off method is adopted for low-value easily-consumed articles;
(2) One-off writing-off method is adopted for packing.
(XII) 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;
(2) 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.
(XIII) 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 ventures 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
Note to financial statement Page 19
Notes to Financial Statement
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 jointly
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 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
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Notes to Financial Statement
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 jointly-run enterprises 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
Note to financial statement Page 21
Notes to Financial Statement
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 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 ―III. (V)
Method for Accounting Treatment of Business Combination under and Not under
the Same Control‖ and ―III. (VI) 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
Note to financial statement Page 22
Notes to Financial Statement
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 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
Note to financial statement Page 23
Notes to Financial Statement
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.
(XIV) Investment Real Estate
Investment real estate indicate the real estate held for earning rent or capital increment, or
for both, including the land use right already leased, 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.
Note to financial statement Page 24
Notes to Financial Statement
(XV) 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.
2. Depreciation method
The depreciation of fixed assets is made by employing the straight-line method,
and the depreciation rate is determined in accordance with the category of fixed
assets, estimated service life and estimated net salvage value rate. If the fixed
assets have different service life or offer economic benefits to the enterprise in
different ways, different rate or method of depreciation shall be adopted for
separate depreciation.
For a fixed asset leased in the form of finance lease, if it is reasonable to be certain
that the ownership of the leased asset can be obtained when the lease term expires,
the depreciation of the leased asset will be made over its useful life; if it is not
reasonable to be certain that the ownership of the leased asset can be obtained at
the expiry of the lease term, the depreciation of the leased asset will be made over
the shorter one of the lease term or its useful life.
The depreciation method, depreciation life, salvage value rate and annual
depreciation rate of various fixed assets are as follows:
Depreciation Salvage Annual depreciation
Type Depreciation method
life (Year) rate (%) rate (%)
Houses and buildings Straight-line method 20 5.00 4.75
Mechanical equipment Straight-line method 10 5.00 9.50
Transportation equipment Straight-line method 7 5.00 13.57
Electronic equipment and other
Straight-line method 3-5 5.00 19.00-31.67
equipment
3. Recognition basis and valuation method for fixed assets under financing lease
Where the leasing agreement signed between company and the lessor specifies
Note to financial statement Page 25
Notes to Financial Statement
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.
(XVI) Construction in Progress
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.
(XVII) Borrowing Costs
1. Principle for Confirmation of Borrowing Cost Capitalization
Borrowing costs include loan interest, discount or premium amortized, auxiliary
expense, and exchange balance arising from foreign-currency loan, etc.
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
Note to financial statement Page 26
Notes to Financial Statement
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
Note to financial statement Page 27
Notes to Financial Statement
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 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.
(XVIII) Intangible assets
1. Pricing Method of Intangible Assets
(1) 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
Note to financial statement Page 28
Notes to Financial Statement
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.
(2) Follow-up Measurement
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 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 Predicted service life Basis
Land use right 50 years Land use right certificate
Software 5 years Refer to the same industry
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.
Note to financial statement Page 29
Notes to Financial Statement
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.
(XIX) 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 long-term assets at the balance sheet date, an impairment test
Note to financial statement Page 30
Notes to Financial Statement
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.
Note to financial statement Page 31
Notes to Financial Statement
(XX) 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.
(XXI) 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 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.
Note to financial statement Page 32
Notes to Financial Statement
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.
(XXII) 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
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
Note to financial statement Page 33
Notes to Financial Statement
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.
(XXIII) 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
Note to financial statement Page 34
Notes to Financial Statement
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 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.
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. Here, 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 same as those for amending the terms and
conditions for treatment of original equity instruments.
(XXIV) Income
1. General principles for recognition of revenue from sales of goods:
(1) The significant risk and the rewards of the goods ownership has been
Note to financial statement Page 35
Notes to Financial Statement
transferred to the Buyer by the Company.
(2) The Company neither reserves the continuous management right which is
generally associated with ownership nor caries 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 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.
Note to financial statement Page 36
Notes to Financial Statement
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,
Note to financial statement Page 37
Notes to Financial Statement
the income from the inpatient is recognized financially.
(XXV) Governmental subsidy
1. Type
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.
2. 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 current profits and losses.
3. Accounting
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).
The governmental subsidy related to income, 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
Note to financial statement Page 38
Notes to Financial Statement
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.
(XXV) Deferred Income Tax Assets and 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
Note to financial statement Page 39
Notes to Financial Statement
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.
(XXVII) Leasing
1. Accounting treatment 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 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
Note to financial statement Page 40
Notes to Financial Statement
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 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.
(XXVIII) Discontinuing operation
The discontinuation of operation is a separately identifiable constituent part that meets
one of the following conditions and that has been disposed of or classified by the
Company as the held for sale:
(1) This constituent part represents a separate major business or a major business area;
(2) This constituent part is a part of an associated plan for disposal of a separate major
business or business area;
(3) This constituent part is for a subsidiary acquired only for re-sell.
(XXIX) Changes of Important Accounting Policies and Accounting Estimates
1. Changes of Important Accounting Policies
The Accounting Standard for Business Enterprises No.42 - Non-current Assets or
Disposal Groups Held for Sale and Discontinued Operations, the Accounting
Standards for Enterprises No.16 - Government Subsidies and the Circular of the
Ministry of Finance on Revising and Issuing the Format of Financial Statements of
General Enterprises shall apply.
In 2017, the Ministry of Finance promulgated the Accounting Standard for
Business Enterprises No. 42 - Non-current Assets or Disposal Groups Held for Sale
and Discontinued Operations, which took effect as of May 28, 2017. The
non-current assets, disposal groups and termination operations held for sale existing
on that date shall be treated with the prospective application method.
In 2017, the Ministry of Finance revised the Accounting Standards for Enterprises
No.16 - Government Subsidies, which comes into effect on June 12, 2017. The
Note to financial statement Page 41
Notes to Financial Statement
Company applies the prospective application method for the government subsidies
that exist on January 1, 2017. For the government subsidies added from January 1,
2017 to the implementation date, adjustments were made according to the revised
standards.
In 2017, the Ministry of Finance issued the Notice of the Ministry of Finance on
Revising the Format of General Financial Statements of Business Enterprises‖,
which revised the format of general financial statements of business enterprises and
shall be applicable to the financial statements 2017 and thereafter.
The main impact of the implementation of the above three regulations by the
Company is as follows:
Examination
Contents of and reasons for change of accounting Name and amount of the affected
and approval
policies statement item
procedures
The recognized net profit from
(1) The "net profits from continued operations" and
continued operations was RMB 0.00
"net profits from discontinued operations" are listed in
in this year, and the recognized net
the income statement; The comparison data are
profit from terminating operations
adjusted accordingly.
was RMB 0.00 in this year.
(2) Part of governmental subsidy related to assets
wrote down the book value of relevant assets. The Fixed assets: Less RMB 0.00
comparison data are not adjusted.
(3) Part of governmental subsidy related to income
Management expense: Less RMB
wrote down relevant costs and expenses. The
0.00
comparison data are not adjusted.
(4) The government subsidies related to the
Company's daily operation are included in other profit
Other income: RMB 2,211,128.89
and are no longer included in non-operating income.
The comparison data are not adjusted.
The non-operating expense of 2017
(5) The "proceeds from assets disposal" was added to was less by RMB 150,250.00 and
the Profit Statement, and some profits and losses from reclassified to the proceeds from
assets disposal that were previously listed as the assets disposal.
"non-operating expenses" was reclassified to the The non-operating expense of 2016
"proceeds from assets disposal". The comparison data was less by RMB 564,833.40 and
are adjusted accordingly. reclassified to the proceeds from
assets disposal.
2. Changes of Important Accounting Estimates
The important accounting estimates of the current reporting period remain
unchanged.
IV Taxes
(I) Main Types of Taxes and Tax Rate
Type of taxes Tax base Tax rate (%)
Note to financial statement Page 42
Notes to Financial Statement
After calculating the ducting the output tax on the basis of the
taxable income and deducting the deduction-permitted input tax of
Value-added tax 0.3.6.11.17
current period as per stipulations of tax laws, the value-added tax
shall be paid for the balance.
Sales tax Paid according to taxable business income (The business tax has
3.5
been replaced with value-added tax since May 1, 2016)
Urban maintenance and Paid according to actually paid business tax, value-added tax and
1.5.7
construction tax consumption tax
Educational surtax Paid as per the turnover tax paid actually. 3
Local educational surtax Paid as per the turnover tax paid actually. 2
Enterprise income tax Calculated and paid as per taxable income 15.25
Note 1: 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.
The income tax rates applicable to the Company and its subsidiaries are as follows:
Rate of
Name of tax payment subjects income
tax
Changzhi Shenzhou Laodingshan Industrial Co., Ltd. 25%
Xiangfen County Taoshan Construction Co., Ltd. 25%
Sino Great Wall (Xihua) Economic Development Zone Investment Co., Ltd. 25%
Liupanshui Central People‘s Hospital Investment Co., Ltd. 25%
Sino Zhigu Industrial (Yueyang) Co., Ltd. 25%
Sino Great Wall Guangxia (Wuhan) Medical Development Co., Ltd. 25%
Sino Great Wall Infrastructure Investment Co., Ltd. 25%
Wuhan Commercial Workers Hospital LLC 25%
Sino Great Wall Medical Investment Management Co., Ltd. 25%
Sino Great Wall International Engineering Co., Ltd. 15%
Fujian Sino Great Wall Mingyihui Medical Investment Co., Ltd. 25%
Sino Great Wall Medical Investment (Hubei) Co., Ltd. 25%
Hubei Yuanyaotong Supply Chain Co., Ltd. 25%
Sino Great Wall Medical Management (Inner Mongolia) Co., Ltd. 25%
Sino Great Wall Health Management (Jiangsu) Co., Ltd. 25%
Sino Great Wall (Beijing) Investment Fund Management Co., Ltd. 25%
Sino Great Wall New Energy (Beijing) Co., Ltd. 25%
Note to financial statement Page 43
Notes to Financial Statement
Bozhou Guangcheng New Energy LLC 25%
Bozhou Zhaosheng Agricultural Technology LLC 25%
Bozhou Xieying Solar Power Generation LLC 25%
Wu‘an Juhe Photovoltaic Power Co., Ltd. 25%
Qian‘an Shenzhou Solar Power Generation Co., Ltd. 25%
Shanghai Lingrui International Trading Co., Ltd. 25%
Shenzhen Hongtulve Industrial Co., Ltd. 25%
Guangzhou Herabenna Interior Design 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%
Shenzhen Yatian Decoration Design Engineering 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%
Sino Great Wall Zhihui Housing Property (Zhanjiang) 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 Construction Construction 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 HP Engineering Construction SDN.BHD 24%
SGW VENTURES SDN.BHD. 24%
SGW CONSTRUCTION (LANGKAWI) SDN.BHD. 24%
Alor Vista Development Sdn Bhd 24%
SINO GREAT WALL GENERAL TRADING & CONTRACTING CO., LTD (Kuwait Branch) 15%
Shenzhou Changcheng (Lao) Co., Ltd. 25%
Sino Great Wall Group (UK) Co., Limited 19%
Sino Great Wall International Engineering (MM) Co., Ltd. 25%
Maldives Branch of Sino Great Wall International Engineering Co., Ltd. 0%
Inrich Me Engineering Co., Ltd. 17%
SINO GREAT WALL INTERNATIONAL ENGINEERING (MACAU) CO., LIMITED 12%
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%
Note to financial statement Page 44
Notes to Financial Statement
PT.SINO GREAT WALL CONSTRUCTION INDONESIA 25%
(II) 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 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
Note to financial statement Page 45
Notes to Financial Statement
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 VAT since May 1, 2016.
V Notes to Items in Financial Statements
(I) Monetary Resources
Items Ending balance Opening balance
Cash on hand 4,614,087.16 2,974,883.16
Bank deposit 642,608,503.33 940,730,439.25
Other monetary resources 957,751,325.63 397,110,499.42
Total 1,604,973,916.13 1,340,815,821.83
Including: the total amount of overseas funds 221,610,258.90 197,496,287.50
Thereinto, the details of monetary capitals with restrictive use due to mortgage, pledge or freezing etc. and
restrictive monetary capitals depositing in overseas and repatriation are as follows:
Items Ending balance Opening balance
Bank acceptance guarantee deposit 349,043,551.56 140,689,860.21
Guarantee bond 555,665,432.94
Performance bond 255,913,019.19
Fixed time deposits or call deposits used for guarantee 50,000,000.00
Overseas funds with limited remittance 22,098.66
Bond for wages of migrant workers 3,020,242.47 507,620.02
Total 957,751,325.63 397,110,499.42
Note to financial statement Page 46
Notes to Financial Statement
(II) Notes Receivable
1. Classified Presentation of Notes Receivable
Items Ending balance Opening balance
Bank acceptance 15,544,160.00 21,300,446.44
Trade acceptance 272,657,402.88 1,053,090,196.14
Total 288,201,562.88 1,074,390,642.58
2. Notes receivable pledged by the Company at the end of the period
None
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
Confirmation-terminated amount at the Non-confirmation-terminated amount at
Items
end of period the end of period
Bank acceptance 24,223,962.36
Trade acceptance 75,257,402.88
Total 24,223,962.36 75,257,402.88
4. Bills turned into account receivables due to the default of the drawer of the
Company at the end of term
Items End-of-period arrears among the receivables
Trade acceptance
162,632,328.22
Total
162,632,328.22
5. Other description: None
Note to financial statement Page 47
Notes to Financial Statement
(III) Accounts receivable
1. Classified Disclosure of Accounts Receivable
Ending balance Opening balance
Book balance Bad debt reserve Book balance Bad debt reserve
Type
Withdrawal Book value Withdrawal Book value
Proportion Proportion
Amount Amount proportion Amount Amount proportion
(%) (%)
(%) (%)
Accounts Receivable
with Significant
Single Amount and
Having Bad Debt
Reserve Withdrawn
Independently
Accounts receivable
with bad debt reserve
6,332,915,727.5 626,240,483.4 5,706,675,244.0
withdrawn as per the 100.00 9.89 4,148,182,356.26 99.91 423,012,147.95 10.20 3,725,170,208.31
portfolio of credit 7 9 8
risk characteristics
Accounts receivable
with insignificant
single amount, but
3,844,309.34 0.09 3,844,309.34 100.00
having bad debt
reserve withdrawn
separately
6,332,915,727.5 626,240,483.4 5,706,675,244.0
Total 100.00 4,152,026,665.60 100.00 426,856,457.29 3,725,170,208.31
7 9 8
Note to financial statement Page 48
Notes to Financial Statement
Accounts receivable with bad debt reserve withdrawn by means of account age
analysis in the portfolios:
Ending balance
Account age
Accounts receivable Bad debt reserve Withdrawal proportion (%)
Within 1 year 4,305,576,910.12 215,278,845.52 5.00
1-2 years 1,383,620,160.85 138,362,016.08 10.00
2-3 years 410,525,095.44 123,126,264.90 30.00
3-4 years 138,875,850.66 69,437,925.33 50.00
4-5 years 71,411,394.20 57,129,115.36 80.00
More than 5 years 22,906,316.30 22,906,316.30 100.00
Total 6,332,915,727.57 626,240,483.49
2. Situations of bad debt reserves withheld, reversed or recycled in this term.
The amount of bad debt reserve withdrawn in the current period was RMB
199,539,145.39; and the amount of bad debt reserve recovered or transferred back in the current
period was RMB 0.
3. Accounts Receivable Actually Cancelled after Verification in the Current
Period
None
4. Top 5 Owning Parties Classified by Ending Balance of Accounts Receivable
Ending balance
Unit name Accounts Proportion to total Bad debt
receivable accounts receivable (%) reserve
China Harbor Engineering Company Ltd. 900,646,409.09 14.22% 75,403,763.89
POWERCHINA Construction Group Ltd. 578,903,295.87 9.14 31,594,101.70
OxleyGem (Cambodia) Co., Ltd 438,481,134.91 6.92 21,924,056.75
Cambodia Petrochemical Co., Ltd. 365,835,734.60 5.78 18,291,786.73
Sanya Sente Real Estate Development Co.,
324,428,947.91 5.12 16,221,447.40
Ltd.
Total 2,608,295,522.38 41.18 163,435,156.47
5. Accounts receivable of which the recognition is terminated due to the transfer
of financial assets
Derecognition-r
Amount Way of transfer of financial
Name of debtors elated gains or
derecognized assets
losses
Sanya Hongshulin Tourism, Culture Credit assignment (without
4,132,384.11
and Real Estate Development Co., right of recourse) 547,127.66
Note to financial statement Page 49
Notes to Financial Statement
Ltd.
Hangzhou Wankun Property Co., Credit assignment (without
3,181,378.08
Ltd. right of recourse) 421,214.46
Zhejiang Golden Shining Real Estate Credit assignment (without
3,648,356.96
Group Co., Ltd. right of recourse) 483,042.46
Jiaxing Yongxin Construction Co., Credit assignment (without
2,327,855.00
Ltd. right of recourse) 308,208.00
Dalian Chengbao Hotel Credit assignment (without
6,355,712.70
Development Co., Ltd. right of recourse) 841,496.36
Sanya Jiapeng Science and Credit assignment (without
2,492,090.00
Technology Development Co., Ltd. right of recourse) 329,952.72
Qinhuangdao Evergrande City of Credit assignment (without
3,236,312.07
China Evergrande Group right of recourse) 428,487.72
Taiyuan Hesheng Dijing Credit assignment (without
12,388,341.71
Construction Co., Ltd. right of recourse) 1,640,216.44
Taiyuan Hesheng Dijing Credit assignment (without
581,484.18
Construction Co., Ltd. right of recourse) 76,988.51
Shanxi Causeway Bay International Credit assignment (without
3,582,922.00
Shopping Mall Co., Ltd. right of recourse) 474,378.87
China Tobacco Hebei Industrial Co., Credit assignment (without
4,744,694.34
Ltd. right of recourse) 628,197.53
Fujian New Donghu Science and
Credit assignment (without
Technology Park Development 16,466,632.00
right of recourse) 2,180,182.08
Company
Qian‘an Yangang Steel Real Estate Credit assignment (without
7,861,704.46
Development Co., Ltd. right of recourse) 1,040,889.67
Qinhuangdao Runqin Real Estate Credit assignment (without
6,506,774.00
Development Co., Ltd. right of recourse) 861,496.88
Credit assignment (without
Zhuhai Zhongye Property Co., Ltd. 3,629,555.64
right of recourse) 480,553.17
Xuzhou Central International Square Credit assignment (without
2,399,364.90
Property Co., Ltd. right of recourse) 317,675.91
Sanya Sunny Bay Development Co., Credit assignment (without
3,700,000.00
Ltd. right of recourse) 489,880.00
Credit assignment (without
Fujian Zhonggeng Property Co., Ltd. 7,441,268.98
right of recourse) 985,224.01
Fujian Qinhe Real Estate Credit assignment (without
1,263,793.14
Development Co., Ltd. right of recourse) 167,326.21
Fujian Qinhe Real Estate Credit assignment (without
3,204,534.20
Development Co., Ltd. right of recourse) 424,280.33
Tianjin Jinnan Xincheng Real Estate Credit assignment (without
10,444,594.02
Development Co., Ltd. right of recourse) 1,382,864.25
Credit assignment (without
Yunnan Bangke Hotel Co., Ltd. 2,170,907.03
right of recourse) 287,428.09
Chongqing Bayuezhuang Industrial Credit assignment (without
4,658,756.46
Co., Ltd. right of recourse) 616,819.36
Credit assignment (without
Wuxi Maoye Property Co., Ltd. 2,620,352.27
right of recourse) 346,934.64
Lijiang Jinlin Property Investment Credit assignment (without
7,061,525.07
Co., Ltd. right of recourse) 934,945.92
Zhejiang Donglin Real Estate Credit assignment (without
1,100,670.00
Development Co., Ltd. right of recourse) 145,728.71
Note to financial statement Page 50
Notes to Financial Statement
Zhejiang Donglin Real Estate Credit assignment (without
1,779,241.19
Development Co., Ltd. right of recourse) 235,571.53
Shanxi Zhengxin Mechanical Credit assignment (without
9,880,000.00
Technology Development Co., Ltd. right of recourse) 1,308,112.00
Zhejiang Deli Real Estate Credit assignment (without
800,000.00
Development Co., Ltd. right of recourse) 105,920.00
Zhejiang Deli Real Estate Credit assignment (without
7,300,000.00
Development Co., Ltd. right of recourse) 966,520.00
Hangzhou Liangzhu Cultural Village Credit assignment (without
6,963,718.43
Development Co., Ltd. right of recourse) 921,996.32
Fuyang Wanke Real Estate Credit assignment (without
2,621,603.89
Development Co., Ltd. right of recourse) 347,100.36
Ningbo Wangang Real Estate Credit assignment (without
89,296.00
Development Co., Ltd. right of recourse) 11,822.79
Ningbo Wangang Real Estate Credit assignment (without
2,805,749.20
Development Co., Ltd. right of recourse) 371,481.19
Beijing Zhongminjian Hospital Credit assignment (without
31,973,141.30
Management Co., Ltd. right of recourse) 4,233,243.91
Yongkang City Jingxiang Industrial Credit assignment (without
4,938,083.45
Co., Ltd. right of recourse) 653,802.25
Shandong Anbang Real Estate Co., Credit assignment (without
3,869,517.52
Ltd. right of recourse) 512,324.12
Hunan Xinlieying Science and Credit assignment (without
1,784,370.00
Education Co., Ltd. right of recourse) 236,250.59
Hunan Xinlieying Science and Credit assignment (without
30,003,795.00
Education Co., Ltd. right of recourse) 3,972,502.46
Total 232,010,479.30
30,718,187.48
6. Amount of assets and liabilities formed by transferring accounts receivable
and continuous involvement
None
7. Other descriptions: accounts receivable with large single item amount and
account age of more than three years
Account Ending Bad debt Causes for failure of
Unit name
age balance reserve payment collection
Libo Zhangjiang Buluo Hotel Co., 3－4
34,520,564.47 17,260,282.24 Funds in collection
Ltd. years
3－4
Qingdao Dinglin Property Co., Ltd. 19,376,335.66 9,688,167.83 Funds in collection
years
Government Office Administration 3－4
16,073,718.79 8,036,859.40 Funds in collection
of Hebei Province years
Total 69,970,618.92 34,985,309.47
Note to financial statement Page 51
Notes to Financial Statement
(IV)
Advance Payment
1. Presentation of Advance Payments by Account Age
Ending balance Opening balance
Account age
Book balance Proportion (%) Book balance Proportion (%)
Within 1 year 212,854,246.00 94.51 311,193,306.31 97.49
1-2 years 11,257,454.64 5.00 5,789,414.72 1.81
2-3 years 903,997.25 0.40 1,269,897.25 0.40
More than 3 years 192,829.99 0.09 954,180.35 0.30
Total 225,208,527.88 100.00 319,206,798.63 100.00
2. Top 5 Advance Payment Objects Classified by the Ending Balance of Advance
Payments
Proportion
to the total
ending
Advance payment object Ending balance balance of
advance
payments
（%）
Wuhan Jiutai Weiye Iron & Steel Co., Ltd. 45,717,600.00 20.30
Zhongcheng Jianye Construction Co., Ltd. 33,040,865.35 14.67
FirstUnitedGeneralTradingandContractingCompanyW.L.L 25,217,059.32 11.20
Nanjing China Construction Chemical Equipment Manufacturing
9,028,707.25 4.01
Co., Ltd.
China Harbor Engineering Company Ltd. 8,585,270.20 3.81
Total 121,589,502.12 53.99
Note to financial statement Page 52
Notes to Financial Statement
(V) Other accounts receivable
1. Classified Disclosure of Other Accounts Receivable:
Ending balance Opening balance
Book balance Bad debt reserve Book balance Bad debt reserve
Type Withdraw Withdraw
Proportio al Book value Proporti al Book value
Amount Amount Amount Amount
n (%) proportio on (%) proportion
n (%) (%)
Other accounts receivables that are
individually significant and for
which individual bad debt reserves
are withdrawn
Other accounts receivable with bad
debt reserve withdrawn as per the 1,820,332,846.
portfolio of credit risk
100.00 145,657,486.56 8.07 1,674,675,360.28 709,527,391.05 99.93 58,515,258.14 8.25 651,012,132.91
84
characteristics
Other accounts receivable with
insignificant single amount and
500,000.00 0.07 500,000.00 100.00
having bad debt reserve withdrawn
separately
1,820,332,846.
Total 100.00 145,657,486.59 1,674,675,360.28 710,027,391.05 100.00 59,015,258.14 651,012,132.91
84
Note to financial statement Page 53
Notes to Financial Statement
Other accounts receivable with bad debt reserve withdrawn by means of account
age analysis in the portfolios:
Ending balance
Account age
Other accounts receivable Bad debt reserve Withdrawal proportion (%)
Within 1 year 72,551,395.35 5.00
1,451,069,833.10
1-2 years 25,753,555.99 10.00
257,540,559.93
2-3 years 16,643,617.20 30.00
55,478,724.03
3-4 years 24,657,112.27 50.00
49,314,224.53
4-5 years 3,510,797.92 80.00
4,388,497.40
More than 5
2,541,007.84 100.00
years 2,541,007.84
Total 145,657,486.57
1,820,332,846.84
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 89,420,207.12 and
the amount of bad-debt reserves recovered or reversed in current period is RMB 0.00.
3. Status of actual verified other receivables in current period
None
4. Classification 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 366,310,322.14
564,988,488.94
Pretty cash and intercourse funds of individuals 59,867,918.12
45,065,829.65
Intercourse funds of the organization 282,984,039.72
1,191,088,012.16
Others 865,111.07
19,190,516.09
Total 710,027,391.05
1,820,332,846.84
5. Top 5 Owing Parties Classified by the Ending Balance of Other Accounts
Receivable
Proportion
to total Bad debt
ending reserve
Unit name Nature of accounts Ending balance Account age balance of Ending
other balance
accounts
receivable
Note to financial statement Page 54
Notes to Financial Statement
(%)
POWERCHINA Intercourse funds of Within 1 14,349,319.
286,986,392.78 15.89
Construction Group Ltd. the organization year 64
Wuhan Jiutai Weiye Iron Intercourse funds of Within 1 10,000,000.
200,000,000.00 11.08
& Steel Co., Ltd. the organization year 00
Chengdu Xianglong Real
House payment and Within 1 5,772,600.0
Estate Development Co., 115,452,000.00 6.39
performance bond year 0
Ltd.
Longyan City Hengda Intercourse funds of Within 1 4,000,000.0
80,000,000.00 4.43
Engineering Co., Ltd. the organization year 0
Qingyuan Hefeng New
Intercourse funds of 7,500,000.0
Energy Technology Co., 75,000,000.00 1-2 years 4.15
the organization 0
Ltd.
41,621,919.
Total 757,438,392.78 41.94
64
6. Accounts Receivable Involving Governmental Subsidy
None
7. Other accounts receivable of which the recognition is terminated due to
transfer of financial assets
None
8. Amount of assets and liabilities formed through transfer of other receivables
and continuous involvement
None
9. Other description:
None
(VI) Inventories
1. Classification of Inventories
Ending balance Opening balance
Items Depreciation Depreciation
Book balance Book value Book balance Book value
reserve reserve
Raw
1,810,694.49 1,810,694.49 12,078,945.75 12,078,945.75
materials
Merchandise
9,328,819.66 9,328,819.66 43,492,877.62 1,404,765.68 42,088,111.94
inventory
Engineering
516,478,683.84 5,051,867.60 511,426,816.24 282,911,079.94 5,051,867.60 277,859,212.34
construction
Materials in
transit
Products in 668,934.23 668,934.23
Note to financial statement Page 55
Notes to Financial Statement
Ending balance Opening balance
Items Depreciation Depreciation
Book balance Book value Book balance Book value
reserve reserve
process
Low-value
209,726.10 209,726.10
consumables
Development
product 34,272,995.11 34,272,995.11
Total 339,361,563.64 6,456,633.28 332,904,930.36
561,891,193.10 5,051,867.60 556,839,325.50
2. Depreciation Reserve of Inventories
Amount increased of Amount decreased of current
Opening current period period Ending
Items
balance Transferred-back or balance
Withdrawn Others Others
written-off
Merchandise
1,404,765.68 1,404,765.68
inventory
Engineering
5,051,867.60 5,051,867.60
construction
Total 6,456,633.28 1,404,765.68 5,051,867.60
3. Description about Capitalized Amount of Borrowing Costs Contained in
Ending Balance of Inventories
None
4. The completed unsettlement assets formed by the construction contract
Items Amount
Cumulative costs incurred 19,958,097,052.45
Cumulative confirmed gross profit 5,029,672,289.20
Less: expected losses
Already settled amount 24,471,290,657.81
The completed unsettlement assets formed by the
511,426,816.24
construction contract
5. Other description: None
Note to financial statement Page 56
Notes to Financial Statement
(VII) Non-current Assets Coming Due within One Year
Items Ending balance Opening balance
Long-term deferred expenses coming due within 1 year 13,462,942.89
Total 13,462,942.89
(VIII) Other Current Assets
Items Ending balance Opening balance
Input VAT 35,248,102.26
15,347,777.42
Expense of prepaid income tax 202,092.21
1,779,133.63
Total 35,450,194.47
17,126,911.05
(IX) Available-for-Sale Financial Assets
1. Available-for-Sale Financial Assets
Ending balance Opening balance
Items Depreciation Book Depreciation Book
Book balance Book value
reserve balance reserve value
Available-for-sale debt
instruments:
Available-for-sale equity
instruments 10,338,500.00 10,338,500.00
Including: Measured
according to fair value
Measured at Costs
Total 10,338,500.00 10,338,500.00
Note to financial statement Page 57
Notes to Financial Statement
2. Available-for-Sale Financial Assets Measured by Cost at the End of Period
Book balance Depreciation reserve
Proportion of shares
At the Amount At the Amount Amount Cash dividends
Invested units Amount increased of Ending held in invested units
beginning decreased of Ending amount beginning of increased of decreased of of current period
current period amount (%)
of the year current period the year current period current period
Zhanjiang Construction &
Engineering Co., Ltd. 10,338,500.00 10,338,500.00 19%
Total 10,338,500.00 10,338,500.00
The Company entered into the agreement with Industrial Investment and Trade Co., Ltd. and Zhanjiang Infrastructure Construction Investment Group Co., Ltd. on the
capital and share increase of Zhanjiang Construction & Engineering Co., Ltd. on the first ten-day period of August 2017. Pursuant to this agreement, the Company
shall increase the capital of RMB 38,089,100 to Zhanjiang Construction & Engineering Co., Ltd. (hereinafter referred to as the "Invested Party‖), holding 70% of the
equity in this Company, and shall own the nomination of three directors in the Board of Directors, one of whom may be appointed as the chairman. The alteration
procedures for industrial and commercial registration of capital and share increase of Zhanjiang Construction & Engineering Co., Ltd. shall be completed on August
21st, 2017. As part of the original agreed arrangement, the Company reached the agreement with Industrial Investment and Trade Co., Ltd. on transferring 51% of the
equity of the Invested Party held by the Company to this Company at the price of RMB 27,750,600 on the first ten-day period of November 2017. The industrial and
commercial registration procedures for such equity transfer shall be completed on November 17, 2017. So far, the Company has held 19% of the equity of the Invested
Party.
Note to financial statement Page 58
Notes to Financial Statement
3. Changed situations of impairment of financial assets available for sale in this term: none
4. Other description: None
Note to financial statement Page 59
Notes to Financial Statement
(X) Long-Term Accounts Receivable
1. Long-Term Accounts Receivable
Ending balance Opening balance
Items Range of discount rate
Book balance Bad debt reserve Book value Book balance Bad debt reserve Book value
Long-Term Accounts Receivable 14,328,557.82 14,328,557.82
Total 14,328,557.82 14,328,557.82
2. Other 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.
Note to financial statement Page 60
Notes to Financial Statement
(XI) Fixed assets
1. Fixed Assets
Electronic equipment and
Items Houses and buildings Mechanical equipment Transportation equipment Total
other equipment
1. Original book value
(1) Opening balance 67,969,481.04 81,254,453.35 36,163,316.47 14,705,677.33 200,092,928.19
(2) Amount increased of current period 35,888,246.46 22,331,349.16 6,023,686.53 325,272.30 64,568,554.45
— Purchase 35,888,246.46 22,331,349.16 6,023,686.53 177,388.73 64,420,670.88
— Transfer-in of construction in progress
— Increase of business combination 147,883.57 147,883.57
--Others
(3) Amount decreased of current period 4,573,948.00 608,983.63 183,505.00 5,366,436.63
— Disposal or retirement 4,573,948.00 608,983.63 183,505.00 5,366,436.63
— Others
(4) Ending balance 103,857,727.50 99,011,854.51 41,578,019.37 14,847,444.63 259,295,046.01
2. 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 4,597,621.60 6,452,671.43 4,622,743.27 2,288,588.79 17,961,625.09
— Withdrawn 4,597,621.60 6,452,671.43 4,622,743.27 2,249,981.32 17,923,017.62
— Others 38,607.47 38,607.47
(3) Amount decreased of current period 4,344,350.00 285,055.10 183,505.00 4,812,910.10
— Disposal or retirement 4,344,350.00 285,055.10 4,629,405.10
— Others 183,505.00 183,505.00
Note to financial statement Page 61
Notes to Financial Statement
Electronic equipment and
Items Houses and buildings Mechanical equipment Transportation equipment Total
other equipment
(4) Ending balance 19,725,422.54 32,621,369.35 20,803,056.53 11,608,047.03 84,757,895.45
3. Depreciation reserve
(1) Opening balance
(2) Amount increased of current period
— Withdrawn
— Others
(3) Amount decreased of current period
— Disposal or retirement
— Others
(4) Ending balance
4. Book value
(1) Ending book value 84,132,304.96 66,390,485.16 20,774,962.84 3,239,397.60 174,537,150.56
(2) Opening book value 52,841,680.10 50,741,405.43 19,697,948.11 5,202,714.09 128,483,747.74
Note to financial statement Page 62
Notes to Financial Statement
2. Temporarily idle fixed assets
None
3. Fixed asset rented through financing lease
Accumulative Depreciation
Items Original book value Book value
depreciation reserve
House
11,152,810.36 10,543,488.71 609,321.65
buildings
Mechanical
33,365,334.00 14397622.72 18,967,711.28
equipment
Total 44,518,144.36 24,941,111.43 - 19,577,032.93
4. Fixed assets with the certificate of title not transacted
Items Book value Reason(s) for the failure to transact the certificate of title
International
32,054,393.00 Being processed
engineering
Suzhou plants 8,982,474.09 Being processed
(XII) Construction in Progress
1. Construction in Progress
Ending balance Opening balance
Items Depreciation Book Depreciation
Book balance Book value Book value
reserve balance reserve
Equipment and
constructions in 4,968,590.96 4,968,590.96
progress
Total 4,968,590.96 4,968,590.96
Note to financial statement Page 63
Notes to Financial Statement
2. Change of Important Projects of Construction in Progress in Current Period
Amount Other Including:
Proportion of Accumulative
Amount transferred amount Amount of Current interest
Name of Budget Opening Ending accumulative Project amount of Capital
increased of into fixed decreased in interest capitalization
items amount balance balance project input to progress interest source
current period assets in current capitalization in rate (%)
the budget (%) capitalization
current period period the current period
Facilities
Self-raised
under 1,224,800.00 1,224,800.00
funds
installation
Liangdu
Central 2,630,910.96 2,630,910.96 Self-raised
Hospital funds
Project
Zhigu Self-raised
1,112,880.00 1,112,880.00
Project funds
Total 4,968,590.96 4,968,590.96
Note to financial statement Page 64
Notes to Financial Statement
3. Impairment provision of project under construction withdrawn in the period
None
4. Other description
None
(XIII) Intangible assets
1. Intangible Assets
Items Land use right Software Total
1. Original book value
(1) Opening balance 108,621,002.59 4,416,616.07 113,037,618.66
(2) Amount increased of current period 23,839,368.35 134,853.85 23,974,222.20
— Purchase 23,839,368.35 134,853.85 23,974,222.20
— Internal research and development
— Increase of business combination
(3) Amount decreased of current period
— Disposal
(4) Ending balance 132,460,370.94 4,551,469.92 137,011,840.86
2. Accumulative amortization
(1) Opening balance 5,054,613.34 1,779,561.77 6,834,175.11
(2) Amount increased of current period 1,827,654.51 825,566.24 2,653,220.75
— Withdrawn 1,827,654.51 825,566.24 2,653,220.75
— Increase of business combination
(3) Amount decreased of current period
— Disposal
(4) Ending balance 6,882,267.85 2,605,128.01 9,487,395.86
3. Depreciation reserve
(1) Opening balance
(2) Amount increased of current period
— Withdrawn
(3) Amount decreased of current period
— Disposal
(4) Ending balance
4. Book value
(1) Ending book value 125,578,103.09 1,946,341.91 127,524,445.00
(2) Opening book value 103,566,389.25 2,637,054.30 106,203,443.55
Intangible assets generated via internal R&D of the Company of ending intangible
assets
Note to financial statement Page 65
Notes to Financial Statement
2. Conditions of land use right with incomplete certificates of title: none
Note to financial statement Page 66
Notes to Financial Statement
(XIV) Goodwill
1. Original Book Value of Goodwill
Amount
Amount
decreased
increased of
of current
Opening current period Ending
Name of invested units or the matters forming goodwill period
balance balance
Formed by
business Disposal
combination
Shenzhen Yatian Decoration Design Engineering Co., Ltd. 6,724,316.91 6,724,316.91
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 5609206.72
SAFAT GULF GENERAL TRADING & CONTRACTING
5,547,635.00 5,547,635.00
COMPANY
Far Eastern International Engineering Company, LLC 10920.0423 10920.0423
Total 58,874,144.79 11,167,761.76 70,041,906.55
Note: 1. The natural person Pan Huan entered into the Equity Transfer Agreement
with Sino Great Wall International Engineering Co., Ltd., a wholly-owned
subsidiary company of the Company on November 25, 2015, agreeing that the
natural person Pan Huan shall transfer 70% of the equity held by Shenzhen Yatian
Decoration Design Engineering Co., Ltd. to the Company‘s wholly-owned
subsidiary company Sino Great Wall International Engineering Co., Ltd. Upon the
completion of such equity transfer, the Company‘s wholly-owned subsidiary
company Sino Great Wall International Engineering Co., Ltd. shall own 70% of the
equity of Shenzhen Yatian Decoration Design Engineering Co., Ltd. The price for
acquiring such 70% of the equity of Shenzhen Yatian Decoration Design
Engineering Co., Ltd. by the Company‘s wholly-owned subsidiary company Sino
Great Wall International Engineering Co., Ltd. was RMB 4 million. The total
amount of the combined cost on the acquisition date, i.e. November 25, 2017 as
taken by the Company‘s wholly-owned subsidiary company Sino Great Wall
International Engineering Co., Ltd., was RMB 4 million. The fair value for the net
identifiable assets on the acquisition date of the 70% of the equity of Shenzhen
Yatian Decoration Design Engineering Co., Ltd. acquired by the Company‘s
wholly-owned subsidiary company Sino Great Wall International Engineering Co.,
Ltd. was RMB -2,724,316.91, which was less than the balance of the combined
cost, RMB 6,724,316.91, so it shall be recorded in the goodwill.
Note to financial statement Page 67
Notes to Financial Statement
2. On May 1, 2016, Wuhan Commercial Workers Hospital LLC and its
management shareholders concluded the Equity Transfer and Asset Acquisition
Contract with the Company in connection with the former‘s transferring 100% of
the equity held in Wuhan Commercial Workers Hospital LLC by them to the
Company. After the equity transfer was completed, the Company shall hold 100%
equity in Wuhan Commercial Workers Hospital LLC. The price for acquiring 100%
equity in Wuhan Commercial Workers Hospital LLC was RMB 97 million. The
total amount of the combined cost on the acquisition date, i.e. June 21, 2016 as
taken by the Company, was RMB 97 million. The fair value for the net identifiable
assets on the acquisition date of the 100% of the equity of Wuhan Commercial
Workers Hospital LLC acquired by the Company was RMB 69,742,685.51, which
was less than the balance of the combined cost, RMB 27,257,314.49, so it shall be
recorded in the goodwill.
3. On July 27, 2016, the natural persons Ye Jiajun and Zhang Shizhong entered into
the Equity Transfer Agreement with Sino Great Wall International Engineering Co.,
Ltd., a wholly-owned subsidiary company of the Company, agreeing that they shall
transfer 100% of the equity held in Sichuan Dinghui Construction Co., Ltd. to the
Company‘s wholly-owned subsidiary company Sino Great Wall International
Engineering Co., Ltd. Upon the completion of such equity transfer, the Company‘s
wholly-owned subsidiary company Sino Great Wall International Engineering Co.,
Ltd. shall own 100% of the equity of Sichuan Dinghui Construction Co., Ltd. The
price for acquiring such 100% of the equity of Sichuan Dinghui Construction Co.,
Ltd. by the Company‘s wholly-owned subsidiary company Sino Great Wall
International Engineering Co., Ltd. was RMB 18 million. The total amount of the
combined cost on the acquisition date, i.e. August 9, 2016 as taken by the Company,
was RMB 18 million. The fair value for the net identifiable assets on the
acquisition date of the 100% of the equity of Sichuan Dinghui Construction Co.,
Ltd. acquired by the Company was RMB 51,021.47, which was less than the
balance of the combined cost, RMB 17,948,978.53, so it shall be recorded in the
goodwill. After the acquisition was completed, Sichuan Dinghui Construction Co.,
Ltd. shall change its name to Sino Great Wall Southwest Engineering Co., Ltd.
4. On November 9, 2016, Sichuan Haoyao Construction & Engineering Co., Ltd.
and its parent company Chengdu Ruihe Hongsheng Technology Co., Ltd. entered
Note to financial statement Page 68
Notes to Financial Statement
into the Capital and Share Increase Agreement with Sino Great Wall International
Engineering Co., Ltd., a wholly-owned subsidiary company of the Company,
agreeing that they shall transfer 60% of the equity held in Sichuan Haoyao
Construction & Engineering Co., Ltd. to the Company‘s wholly-owned subsidiary
company Sino Great Wall International Engineering Co., Ltd. Upon the completion
of such equity transfer, the Company‘s wholly-owned subsidiary company Sino
Great Wall International Engineering Co., Ltd. shall own 60% of the equity of
Sichuan Haoyao Construction & Engineering Co., Ltd. The price for acquiring such
60% of the equity of Sichuan Haoyao Construction & Engineering Co., Ltd. by the
Company‘s wholly-owned subsidiary company Sino Great Wall International
Engineering Co., Ltd. was RMB 90 million. The total amount of the combined cost
on the acquisition date, i.e. November 11, 2016 as taken by the Company, was
RMB 90 million. The fair value for the net identifiable assets on the acquisition
date of the 60% of the equity of Sichuan Haoyao Construction & Engineering Co.,
Ltd. acquired by the Company was RMB 83,056,465.14, which was less than the
balance of the combined cost, RMB 6,943,534.86, so it shall be recorded in the
goodwill.
5. In September 2017, the subsidiary company of the Company Sino Great Wall
Group Co., Limited (hereinafter referred to as "Sino Hong Kong‖) acquired 51%
equity of the company Alor Vista in consideration of MYR 15,877,600 and on
September 28, 2017, Sino Hong Kong formally became the controlling shareholder
of Alor Vista after completing the change procedures for the above equity in
Malaysia. The balance between the payment price and the net identifiable assets on
the acquisition date shall be confirmed as the goodwill.
6. In January 2017, the Company signed an agreement with SAFAT GULF
GENERAL TRADING & CONTRACTING COMPANY at the acquisition price
of RMB 5,547,635.00 and the balance between the acquisition price and the net
identifiable assets on the acquisition date shall be confirmed as the goodwill.
7. In January 2017, the Company concluded the Equity Transfer Agreement with
Mo Ruobin on acquiring 95% equity of Yuandong International Engineering Co.,
Ltd. at the price of RUB 95,000; the acquisition price and the amount of the fair
value for the net identifiable assets on the acquisition date shall be recorded in the
goodwill.
Note to financial statement Page 69
Notes to Financial Statement
2. Depreciation Reserve of Goodwill
Amount increased of Amount decreased of
Name of invested units or the matters forming Opening current period current period Ending
goodwill balance balance
Withdrawn Disposal
SAFAT GULF GENERAL TRADING &
5,547,635.00 5,547,635.00
CONTRACTING COMPANY
Total 5,547,635.00 5,547,635.00
At the end of period, the Company recognized all assets of every abovementioned
unit as one asset group portfolio, and in combination with the analysis on the estimated
recoverable amount of the asset group portfolios and present value of predicted future cash
flow of assets of the above-mentioned units except for SAFAT GULF GENERAL
TRADING & CONTRACTING COMPANY at the end of period, the Company did not
discover the impairment sign of goodwill, so the Company did not need to withdraw
depreciation reserve.
Shenzhen Yatian Decoration Design Engineering Co., Ltd. executed the Equity
Transfer Agreement in December 2017 and completed the change of equity registration in
January 2018. Since the equity transfer price was higher than the investment cost of the
Company, there is no sign of impairment.
There was no normal business of SAFAT GULF GENERAL TRADING &
CONTRACTING COMPANY, so there is doubt about the profitability and the depreciation
reserve will be accrued in full.
(XV) Long-term Deferred Expenses
Amount Amount Other
Opening
Items increased of amortized of amount Ending balance
balance
current period current period decreased
Leasehold improvement 12,028,199.87 56,698.69 5,054,985.41 7,029,913.15
Overseas fees for letter
8,437,778.96 6,825,000.00 12,167,778.96 3,095,000.00
of guarantee
Subtotal 20,465,978.83 6,825,000.00 17,222,764.37 10,124,913.15
Minus: long-term
deferred expenses
13,462,942.89
coming due within 1
year
Total 7,003,035.94 6,825,000.00 17,222,764.37 10,124,913.15
Note to financial statement Page 70
Notes to Financial Statement
(XVI) Deferred Income Tax Assets and Deferred Income Tax Liabilities
1. Non-offset Deferred Income Tax Assets
Ending balance Opening balance
Items Deductible Deferred
Deductible temporary
Deferred income tax assets temporary income tax
difference
difference assets
Asset
484,110,666.8 74,623,400.2
depreciation 766,127,594.16 118,233,337.36
1 3
reserve
Deductible
2,265,150.21 566,287.55
losses
Depreciation
Reserve of 6,456,633.28 1,108,971.56
Inventories
492,832,450.3 76,298,659.3
Total 766,127,594.16 118,233,337.36
0 4
2. Non-offset Deferred Income Tax Liabilities
Ending balance Opening balance
Items Taxable Deferred
Taxable temporary Deferred income
temporary income tax
difference tax liabilities
difference liabilities
Profits from changes in fair
value of financial assets
measured with fair value and
having the change of fair value
recorded in the gain or loss of
the current period
Appraised increment of assets
for business combination not 109,879,555.06 27,469,888.77
105,725,885.86 26,088,961.71
under the same control
Total 109,879,555.06 27,469,888.77
105,725,885.86 26,088,961.71
3. Details of Unconfirmed Deferred Income Tax Assets
Items Ending balance Opening balance
Deductible temporary difference 1,761,048.62
20,178,730.17
Deductible losses 29,368,743.01
79,207,601.38
Total 31,129,791.63
99,386,331.55
(XVII) Other Non-current Assets
Items Ending balance Opening balance
PPP Project investment 610,524,570.00 48,960,000.00
Advance payment for purchasing long-term assets 283,729,420.79 67,942,258.30
Funds for other projects 175,340,581.32
Note to financial statement Page 71
Notes to Financial Statement
Items Ending balance Opening balance
116,902,258.3
Total 1,069,594,572.11
0
Other description:
1. Description of PPP Project
Amount Amount Amount
Subscribed Opening
increased decreased at the end
Registered investment balance
Shareholding of current of current of period
Items capital (ten amount (ten (ten
thousand proportion year (ten period (ten (ten
thousand thousand
Yuan) thousand thousand thousand
Yuan) Yuan)
Yuan) Yuan) Yuan)
Luyi Shuguang
Medical
Industrial
9,600.00 4,896.00 51% 4,896.00 4,896.00
Investment
Construction Co.,
Ltd.
Sino Great Wall
(Fugou) Jialu
River
Comprehensive 3,986.16 3,587.54 90% 200 200.00
Control
Investment Co.,
Ltd.
Sino Great Wall
(Fugou)
High-speed
13,050.65 7,830.39 60% 7,830.39 7,830.39
Railways District
Investment Co.,
Ltd.
Sino Great Wall
(Fugou) National
Fitness Center 4,191.00 3,771.90 90% 3,772.56 3,772.56
Investment Co.,
Ltd.
Huichang County
Sino Great Wall
Medical
9,559.00 8,507.51 89% 8,507.51 8,507.51
Industrial
Construction
Service Co., Ltd.
Anyang Sino
Great Wall
Medical - 90% 25,346.00 25,346.00
Management
Service Co., Ltd.
Yanjin County
Sino Great Wall
4,000.00 2,780.00 69.50% 0.00
Construction Co.,
Ltd.
Sino Great Wall
Shaanxi Fuyan
Industrial Park 5,000.00 4,500.00 90% 4,500.00 4,500.00
Investment Co.,
Ltd.
Weifang Sino
Great Wall
Health 10,000.00 10,000.00 100% 0.00
Development
Co., Ltd.
Gongxian County 15,000.00 13,500.00 90% 6,000.00 6,000.00
Sino Medical
Note to financial statement Page 72
Notes to Financial Statement
Investment Co.,
Ltd.
Wuchuan Sino
Great Wall TCM
Hospital 6,000.00 4,800.00 80% 0.00
Investment Co.,
Ltd.
Total 4,896.00 56,156.46 0.00 61,052.46
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. In prepaid funds for purchasing long-term assets: the funds for fixed assets, equipment
or land are RMB 283,729,420.79;
3. Funds for other items are as follows:
SN Unit name Amount
1 ACURA Kliniken Group Baden-Baden GmbH 105,075,792.00
2 Cenang Resort Sdn Bhd (Tropicana Project in Malaysia) 60,264,789.32
3 Sino Great Wall Infrastructure Investment Co., Ltd. 10,000,000.00
Total 175,340,581.32
(1) On June 29, 2017, the Acquisition Contract for Acura Kliniken Baden-Baden
GmbH was made and entered into by and between Sino Great Wall Group Co., Limited,
wholly-owned subsidiary company of Sino International, which is a wholly-owned
subsidiary company of Sino Great Wall Co., Ltd., (hereinafter referred to as ―Sino Hong
Kong‖) and bankruptcy trustee of Acura Baden-Baden Kliniken (hereinafter referred to as
―Acura Kliniken‖), and Sino Hong Kong acquired 100% equity of Acura Kliniken with
the considerations of EUR 14,100,000 (equivalent to approximately RMB 110 million).
On December 29, 2017, Acura Kliniken completed the registration for transfer with
official German business registration department, and Sino Hong Kong formally became
the controlling shareholder of Acura Kliniken. The bankrupt procedure of Acura Kliniken
was formally completed upon the decision made by Germany's Baden-Baden court on
March 15, 2018 and notarization on March 16, and became a common corporation limited,
Note to financial statement Page 73
Notes to Financial Statement
and the Company completed its acquisition of Acura Kliniken. The Company plans to
include Acura Kliniken in the consolidated statements of the Company in March 2018.
(2) On July 25, 2017, the Equity Subscription and Shareholders Agreement was
made and entered into by and among parties in Malaysia, i.e. ABD RAZAK BIN MOHD
OMAR (hereinafter referred to as ―RAZAK‖); MOHD ZAPI BIN ABDULLAH
(hereinafter referred to as ―ZAPI‖); HAMAL BIN A RAHMAN (hereinafter referred to as
―HAMAL‖); ISMAIL BIN SALEH (hereinafter referred to as ―ISMAIL‖);
SHAZALLY BIN SULAIMAN (hereinafter referred to as ―SHAZALLY‖) and the
Company. Parties in Malaysia, i.e. RAZAK, ZAPI, HAMAL, ISMAIL and SHAZALLY,
agreed to issue and allocate shares to Sino Great Wall Group Co., Limited, and Sino Great
Wall Group Co., Limited agreed to subscribe 67 new common shares of CENANG
RESORT SDN. BHD. with the amount of MYR 776,119.00, accounting for 40% of
enlarged issued shares and paid-in capital of CENANG RESORT SDN. BHD.
(―subscribed shares‖) with the total subscribed value of MYR 52,000,000.00. The
Company paid the subscribed amount by two installments. On August 8, Sino Great Wall
Group Co., Limited paid CENANG RESORT SDN. BHD. (USD 3.03 million, equivalent
to approximately MYR 13 million, and due to the difference in exchange rate, on
September 4, USD 14,800 was paid additionally) MYR 13,000,000.00 as deposit and
partial payment for subscription (―initial subscribed fund‖). From October 10 to October
13, Sino Great Wall Group Co., Limited paid CENANG RESORT SDN. BHD. (USD 2
million, USD 1 million, USD 2 million and USD 1 million, totally USD 6 million) and
USD 3,519,000 on January 9, 2018. The balance amounting to MYR 39 million
(―remained subscribed amount‖) was paid. So far, the equity subscription was completed.
After the subscription, Sino Great Wall accounts for 40% of the issued capital stock and
the paid-in capital of CENANG RESORT SDN. BHD. The Company completed change
of directors on January 10, 2018. The proportions of shares of other five shareholders,
who are persons acting in concert, are 12%, and the Company does not have controlling
power, so this company is not included in consolidated statements.
(3) On August 22, 2017, the Supplementary Agreement of Equity Transfer
Agreement was made and entered into by and among Sino Great Wall Infrastructure
Investment Co., Ltd. (hereinafter referred to as ―Infrastructure Company‖), wholly-owned
subsidiary company of the Company, and natural persons, namely Xie Guihua, Xie
Rongrong and Xie Rubin, and natural persons, namely Xie Guihua, Xie Rongrong and
Note to financial statement Page 74
Notes to Financial Statement
Xie Rubin, transferred 80% equity of Longyan City Hengda Engineering Co., Ltd.
(hereinafter referred to as ―Longyan Hengda‖) owned by them to Infrastructure Company.
After the equity transfer, Infrastructure Company holds 80% equity of Longyan Hengda,
Xie Guihua holds 8% equity of Longyan Hengda, and Xie Rongrong and Xie Rubin
respectively holds 6% equity of Longyan Hengda. The equity transfer price was RMB 16
million. The date of commercial alteration registration of the equity transfer was April 18,
2018, and the Company plans to include Sino Hengda in the consolidated statements of
the Company in May 2018.
(4) Cangnan Haixi Hospital Co., Ltd.
On December 4, 2017, the Equity Transfer Agreement of Cangnan Haixi Hospital Co.,
Ltd. was made and entered into by and among Sino Great Wall Medical Investment
Management Co., Ltd. (Acquiring Company 1), Sino Global (Beijing) Decoration
Engineering Co., Ltd. (Acquiring Company 2) and Yideli Group Co., Ltd., Zhongshan
Health Management Co., Ltd. (Acquired Companies); the registered capital of Cangnan
Haixi Hospital Co., Ltd. was RMB 100 million and the paid-in capital was RMB 28
million; after the change of equity, the original shareholders acting in concert hold 43%,
Acquiring Company 1 holds 40%, Acquiring Company 2 holds 17%; the registered
capital is still RMB 100 million and as of the report date, the Company has totally paid
RMB 3 million as investment funds.
(XVIII) Short-term Loans
1. Classification of Short-Term Loans
Items Ending balance Opening balance
Guaranteed loan 1,189,330,420.55 1,621,515,110.00
Trade acceptance for which endorsement and discounting have
been conducted while still being unmatured at the balance sheet 344,543,247.59
date
Mortgaged loan 2,137,870,000.00
Pledged loan 150,000,000.00
Total 3,477,200,420.55 1,966,058,357.59
2. Overdue but unpaid short-term loans
None
(XIX) Notes Payable
Type Ending balance Opening balance
Note to financial statement Page 75
Notes to Financial Statement
Type Ending balance Opening balance
Bank acceptance 623,407,978.15 397,450,000.00
Trade acceptance 283,190,010.00 309,433,375.54
Total 906,597,988.15 706,883,375.54
The total amount of notes payable having come due but not repaid yet in the current
period was RMB 0.00.
(XX) Accounts payable
1. Presentation of Accounts Payable:
Items Ending balance Opening balance
Project construction cost 1,704,130,649.60 1,295,611,654.20
Payment for purchasing long-term assets 7,923,625.18
Payment for medicine 15,448,438.02 10,413,710.87
Total 1,719,579,087.62 1,313,948,990.25
2. Significant Accounts Receivable with Account Age of More than 1 Year:
None
(XXI) Items Received in Advance
1. Presentation of Items Received in Advance
Items Ending balance Opening balance
Project construction cost 145,513,588.44 572,743,695.28
Advance payment for medical treatment 866,264.23 1,040,377.30
Total 146,379,852.67 573,784,072.58
(XXII) Payroll Payable
1. Presentation of Payroll Payable
Amount
Opening Amount decreased
Items increased of Ending balance
balance of current period
current period
Short-term
17,637,749.42 359,773,740.57 356,683,592.81 20,727,897.18
remuneration
Post-demission
welfare- 1,159,797.27 22,007,066.01 21,983,218.39 1,183,644.89
defined
Note to financial statement Page 76
Notes to Financial Statement
contribution
plans
Total 18,797,546.69 381,780,806.58 378,666,811.20 21,911,542.07
2. Presentation of Short-Term Remuneration
Amount increased Amount decreased of
Items Opening balance Ending balance
of current period current period
(1) 16,916,964.73 320,205,852.11 317,047,571.84 20,075,245.00
Sal
ary,
bonus,
allowanc
e and
subsidy
(2) 0.00 17,411,768.25 17,411,768.25 0.00
Em
ployees‘
welfare
expense
(3) 620,944.70 13,625,683.29 13,647,540.27 599,087.72
Soc
ial
insurance
premium
Including 516,068.74 12,051,641.09 12,063,678.42 504,031.41
: Medical
insurance
premium
Industrial 26,369.92 581,662.52 585,364.14 22,668.30
injury
insurance
premium
Maternit 78,506.04 992,379.68 998,497.71 72,388.01
y
insurance
premium
(4)
Ho 99,839.99 8,259,881.03 8,306,156.56 53,564.46
using
fund
(5)
Lab - 270,555.89 270,555.89 -
or union
outlay
and
employee
s‘
education
outlay
(6)short
-term - - - -
paid
leave
(7)short-
term - - - -
profit-s
haring
Note to financial statement Page 77
Notes to Financial Statement
plan
- - - -
Total 17,637,749.42 359,773,740.57 356,683,592.81 20,727,897.18
3. Presentation of Drawing Plans Set Up
Amount increased Amount decreased of
Items Opening balance Ending balance
of current period current period
Basic 1,130,824.85 21,182,742.86 21,159,221.71 1,154,346.00
pensi
on
insura
nce
Unem 28,972.42 824,323.15 823,996.68 29,298.89
ploy
ment
insura
nce
premi
um
Corp
orati - - - -
on
pensi
on
pay
ment
Total 1,159,797.27 22,007,066.01 21,983,218.39 1,183,644.89
(XXIII) Taxes Payable
Tax Item Ending balance Opening balance
Value-added tax 12,062,605.90
32,678,325.28
Sales tax 83,297,969.10
78,101,559.07
Enterprise income tax 207,849,865.19
239,018,994.88
Personal income tax 1,515,889.41
374,031.94
Urban maintenance and construction tax 4,725,964.11
3,928,587.22
Educational surtax 3,694,729.45
2,983,381.35
Stamp tax and other taxes 336,646.62
360,597.97
Total 313,483,669.78
357,445,477.71
(XXIV) Interest Payable
Note to financial statement Page 78
Notes to Financial Statement
Items Ending balance Opening balance
Interests payable on short-term loans 5,285,634.63 4,710,255.00
Long-term loan interest payable 10,819,629.22 1,718,238.55
Total 16,105,263.85 6,428,493.55
(XXV) Other accounts payable
1. Presentation of Other Accounts Payable by the Nature of Accounts
Items Ending balance Opening balance
Tender bond, performance bond and deposit 26,582,761.45
48,363,917.10
Personal intercourse funds and withheld items 45,650,286.49
14,453,897.51
Loans of shareholders -
Intercourse funds of the organization 136,613,997.74
450,793,562.35
Others 1,067,929.33
2,854,044.18
Payment for subscription of non-public offerings 12,500,000.00
4,500,000.00
Total 222,414,975.01
520,965,421.14
2. Other important accounts payable with payment days over a year
None
(XXV) Non-current liabilities coming due within one year
Items Ending balance Opening balance
Long-term loans coming due within one year 820,422,471.45 175,958,998.04
Total 820,422,471.45 175,958,998.04
Other description:
(XXVII) Other Current Liabilities
Items Ending balance Opening balance
Output taxes to transfer 121,529,600.95 30,382,980.72
Total 121,529,600.95 30,382,980.72
Note to financial statement Page 79
Notes to Financial Statement
(XXVIII) Long-Term Loans
1. Classification of Long-Term Loans
Items Ending balance Opening balance
Pledged loan 500,000,000.00
Mortgaged loan 3,175,860.22
16,839,164.49
Guaranteed loan 283,683,018.60
826,253,306.53
Total 786,858,878.82
843,092,471.02
(XXIX) Bonds Payable
1. Details of bonds payable
Items Ending balance Opening balance
1 Qianhai Wutong Private Bond No. 2016070 100,000,000.00
2 First period bond financing plan of Sino Great Wall
245,000,000.00
International Engineering Co., Ltd. in 2017
Total 345,000,000.00
Note to financial statement Page 80
Notes to Financial Statement
2. Increase or Decrease of Bonds Payable (Excluding Other Financial Instruments Classified as Financial Liabilities, like Preferred Stocks and
Perpetual Bonds, etc.)
Amount
Interests Amortization of
Date of Bond Opening Issue of current repaid of … Ending
Bond name Par value Issued amount withdrawn as premium or
issue period balance period current … balance
per par value discount
period
1. Qianhai Wutong 100,000,000.0
Private Bond No. 0 2017/1/6 2019/1/6 99,800,000.00 99,800,000.00 6,200,000.00 0 0
2016070
2. First period bond
financing plan of Sino 245,000,000.0 245,000,000.0
Great Wall 245,000,000.00
0 2017/10/31 2020/10/31 0 2,440,334.25 0 0
International
Engineering Co., Ltd.
in 2017
345,000,000.0 344,800,000.0
Total 344,800,000.00 8,640,334.25
0 0
Note to financial statement Page 81
Notes to Financial Statement
(XXX) Long-term accounts payable
Items Ending balance Opening balance
Accrued financial lease outlay 81,945,567.86
Total 81,945,567.86
(XXXI) Accrued Liabilities
Items Ending balance Opening balance Reason for formation
Company‘s accrual for pending
Pending actions 3,414,189.15 13,225,861.70
actions
Total 3,414,189.15 13,225,861.70
(XXXII) Capital Stock
Changes during current period: plus （+）minus（－）
Shares
Items Opening balance New Shares Ending balance
converted
shares presented Others Subtotal
from public
issued for free
reserve
Total
1,698,245,011.0 1,698,245,011.0
amount
0 0
of shares
Note to financial statement Page 82
Notes to Financial Statement
(XXXIII) Capital Reserve
Amount increased of Amount decreased of
Items Opening balance Ending balance
current period current period
Capital premium (capital stock premium) -857,285,524.28 -857,285,524.28
Other capital reserve -442,064,177.46 -442,064,177.46
Total -1,299,349,701.74 -1,299,349,701.74
Note: the increase in negative capital reserve in the current period is mainly due to the adjustment of the capital reserve after the acquisition of minority
equity in subsidiary company.
Note to financial statement Page 83
Notes to Financial Statement
(XXXIV) Special reserve
Amount
Amount increased of
Items Opening balance decreased of Ending balance
current period
current period
Work safety
65,687,868.14 101,731,018.39 3,187,808.35 164,231,078.18
expense
Total 65,687,868.14 101,731,018.39 3,187,808.35 164,231,078.18
(XXXV) Surplus Reserve
Amount Amount
Items Opening balance increased of decreased of Ending balance
current period current period
Statutory surplus
84,394,441.23 84,394,441.23
reserve
Total 84,394,441.23 84,394,441.23
(XXXVI) Undistributed Profit
Amount of current
Items Amount of last period
period
Undistributed profit at the end of last period before
755,308,636.19
adjustment 1,228,970,498.86
Total of undistributed profit at the beginning of the year of
adjustment (increase adjusted +, decrease adjusted -)
Undistributed profit at the beginning of the year 755,308,636.19
1,228,970,498.86
Plus: Net profit attributed to the parent company‘s owners in
473,661,862.67
the current period 380,090,990.82
Less: Statutory surplus reserve withdrawn
Common stock dividends payable
-101,894,700.66
Others
-4,063,392.31
Ending undistributed profit 1,228,970,498.86
1,503,103,396.70
(XXXVII) Operating Income and Operating Cost
Amount incurred of current period Amount incurred of last period
Items
Income Cost Income Cost
Main 4,662,402,374.1 3,459,377,744.6
6,496,576,893.36
businesses 4,886,041,528.62 7 6
Note to financial statement Page 84
Notes to Financial Statement
Amount incurred of current period Amount incurred of last period
Items
Income Cost Income Cost
Other
548,087.16 2,596,743.00
businesses 312,971.04
4,664,999,117.1 3,459,377,744.6
Total 6,497,124,980.52
4,886,354,499.66 7 6
(XXXVIII) Taxes and Surcharge
Items Amount incurred of current period Amount incurred of last period
Sales tax -141,646.64 8,128,747.41
Urban maintenance and construction tax 1,884,723.85 597,022.91
Educational surtax 1,399,860.90 478,975.13
Other taxes 1,390,067.50 446,784.01
Total 4,533,005.61 9,651,529.46
(XXXIX) Selling Expenses
Items Amount incurred of current period Amount incurred of last period
Employee Compensation 8,019,452.92 6,623,108.93
Travel expenses 723,327.21 934,104.49
Business entertainment
379,837.66 469,366.01
expense
Advertising and promotion
16,293.68 2,675.00
expenses
Construction maintenance
16,040,272.66 17,911,593.82
fees
Others 7,034,063.84 4,377,840.02
Total 32,213,247.97 30,318,688.27
(XL) Management Expenses
Items Amount incurred of current period Amount incurred of last period
Employee Compensation 146,060,526.13 127,039,183.19
Administrative expenses 15,110,557.60 9,544,489.51
Rental 19,054,037.35 19,084,430.19
Travel expenses 13,611,200.61 12,096,343.79
Business entertainment expense 8,668,113.32 9,828,496.48
Depreciation fees of fixed assets 11,262,728.55 6,848,917.76
Vehicle expenses 3,538,337.07 2,871,639.42
Long-term deferred expense amortization 4,360,113.43 4,308,529.48
Consulting fee 59,415,179.05 79,559,745.78
Note to financial statement Page 85
Notes to Financial Statement
Items Amount incurred of current period Amount incurred of last period
Conference 718,194.44 156,486.46
Others 28,448,104.70 42,592,471.50
Total 310,247,868.40 313,930,733.56
(XLI) Financial Expenses
Type Amount incurred of current period Amount incurred of last period
Interest expenditure 130,325,289.46
294,207,584.82
Less: Interest income 3,936,374.12
14,448,977.61
Exchange gain or loss -75,709,807.87
124,220,566.01
Discount interest 19,445,217.45
Handling charges and others 57,312,903.03
28,611,434.33
Total 127,437,227.95
432,590,607.55
(XLII) Asset Impairment Loss
Items Amount incurred of current period Amount incurred of last period
Bad debt loss 164,907,841.91
316,739,050.51
Inventory depreciation loss 5,104,048.20
Goodwill loss
5,547,635.00
Total 170,011,890.11
322,286,510.97
Assets held for sale are subject to a confirmed impairment loss of RMB 0.00 of
held-for-sale assets for the current period, and a reversed impairment loss of RMB 0.00
for the current period.
(XLIII) Investment Yield
Amount
Amount incurred
Items incurred of
of current period
last period
Gain on long-term equity investments subject to accounting with equity
method
Investment yield obtained from disposal of long-term equity investments -1,742,270.77
Note to financial statement Page 86
Notes to Financial Statement
Amount
Amount incurred
Items incurred of
of current period
last period
Investment incomes from financial assets which are measured as per fair
value and the variation of which is included in current profits and losses
statement in the holding period
Investment incomes from the disposal of financial assets measured by fair
13,448.02
value and with the variation recorded into current profits and losses
Investment incomes from held-to-maturity investment in the holding period
Investment yield during the holding of available-for-sale financial assets
Investment income from disposal of financial assets available for sale
Gains from surplus entities remeasured by fair value after the loss of the
control right
Others 2,212,902.95
Total -1,742,270.77 2,226,350.97
(XLIV) Proceeds from asset disposal
Amount incurred of Amount incurred of Amount recorded in the non-recurring gain
Items
current period last period or loss of current period
Disposal of
-150,250.00 -150,250.00
fixed assets
Total -150,250.00 -150,250.00
(XLV) Other Income
Amount incurred of Amount incurred
Subsidy items Related to assets/Related to income
current period of last period
Commerce Commission
1,960,934.00 Related to income
bounty
Subsidy for post
250,194.89 Related to income
stabilization
Total 2,211,128.89
(XLVI) Non-Operating Income
Amount incurred of Amount incurred of Amount recorded in the non-recurring
Items
current period last period gain or loss of current period
Governmental
108,121.33
subsidy
Others 156,426.78 26,318,921.53 156,426.78
Total 156,426.78 26,427,042.86 156,426.78
Governmental subsidies included in non-operating incomes
Note to financial statement Page 87
Notes to Financial Statement
Related to
Amount incurred of Amount incurred of
Subsidy items assets/Related to
current period last period
income
Reward the headquarters enterprises
72,365.00 Related to income
investing in Tongzhou District
Job subsidy 35,756.33 Related to income
Total 108,121.33
(XLVII) Non-Operating Expenditure
Amount recorded in the
Amount incurred of Amount incurred of
Items non-recurring gain or loss of current
current period last period
period
Loss from disposal of
564,833.40
non-current assets
Donation outlay 240,000.00 240,000.00
Others -3,270,152.73 21,022,106.88 -3,270,152.73
Total -3,030,152.73 21,586,940.28 -3,030,152.73
(XLVIII) Expense of income tax
1. Table of Income Tax
Amount incurred of current Amount incurred of last
Items
period period
Expense of income tax in the current
115,052,974.76
period 172,349,309.87
Deferred income tax expenses -25,808,113.01
-45,345,578.12
Total 127,003,731.75 89,244,861.75
2. Adjustment Process of Accounting Profit and Expense of Income Tax
Amount incurred of
Items
current period
Total profit
511,049,758.58
Expense of income tax calculated with statutory [or applicable] tax rate
127,762,439.65
Influences of different tax rates applicable to subsidiaries -67,362,980.24
Influences of adjustment of previous income tax
Note to financial statement Page 88
Notes to Financial Statement
Amount incurred of
Items
current period
Influences of non-taxable income
Influences of non-deductible costs, expenses and losses
8,067,220.48
Influences of deductible losses of previous non-confirmed deferred income tax
assets used
Influences of deductible temporary difference or deductible loss of non-confirmed
deferred income tax assets in the current period 60,054,467.66
Expense of income tax
127,003,731.76
(XLIX) Items of Cash Flow Statement
1. Cash Received Relating to Other Operating Activities
Amount incurred of current
Items Amount incurred of last period
period
Interest income 6,963,410.83 3,936,374.12
Bond, deposit and other intercourse funds 6,125,468,343.62 1,814,618,138.18
Governmental subsidy 2,211,128.89 108,121.33
Total 6,134,642,883.34 1,818,662,633.63
2. Cash Paid Relating to Other Operating Activities
Items Amount incurred of current period Amount incurred of last period
Handling charges 25,037,998.96 15,515,853.49
Warranties and deposit expenses 545,286,663.39 117,417,474.74
Selling Expenses 71,903,447.59 23,695,579.34
Management Expenses 305,349,194.66 175,125,500.48
Current account 6,022,745,439.52 2,657,532,011.53
Total 6,970,322,744.12 2,989,286,419.58
3. Cash Paid Relating to Other Investment Activities
Amount incurred of Amount incurred of last
Items
current period period
Bond paid for land auction 131,500,000.00
Total 131,500,000.00
4. Cash Received Relating to Other Financing Activities
Note to financial statement Page 89
Notes to Financial Statement
Amount incurred of current
Items Amount incurred of last period
period
Received personal or company
166,727,200.00 162,855,000.00
financing fund
Non-public warranties 12,600,000.00 12,500,000.00
Total 179,327,200.00 179,327,200.00
5. Cash Paid Relating to Other Financing Activities
Amount incurred of current
Items Amount incurred of last period
period
Paid personal or company financing
178,321,283.83 530,980,295.84
fund
Paid trust deposit 48,600,000.00 2,000,000.00
Paid financing fees 6,150,000.00 22,800,000.00
Total 233,071,283.83 555,780,295.84
(L) Supplementary Data of Cash Flow Statement
1. Supplementary Data of Cash Flow Statement
Supplementary Data Amount of current period Amount of last period
1. Net profit adjusted to cash flow of operating
activities
Net profit 384,046,026.83 472,092,894.95
Plus: Asset depreciation reserve 322,286,510.97 170,011,890.11
Depreciation of fixed assets 13,148,714.99 8,868,947.59
Intangible asset amortization 78,994.75 1,109,731.85
Long-term deferred expense amortization 16,221,447.22 18,584,438.70
Loss on disposal of fixed assets, intangible assets and
564,833.40
other long-term assets (income represented with ―－‖)
Loss from fixed asset retirement (Income is represented
150,250.00
with ―-‖)
Loss from changes in fair value (income is represented
with ―-―)
Financial expenses (income represented with ―－‖) 14,162,456.72 136,256,259.56
Investment loss (income represented with ―－‖) -3,096,940.17
2,226,350.97
Decrease of deferred income tax assets (increase
1,646,331.60
represented with ―－‖) -41,934,678.02
Increase of deferred income tax liabilities (decrease
-27,454,444.61
represented with ―－‖) -1,380,927.06
Decrease of inventories (increase represented with ―－‖) -222,529,694.72
-148,243,275.45
Decrease of operating items receivable (increase
-2,878,862,492.67
represented with ―－‖) -2,467,941,286.77
Note to financial statement Page 90
Notes to Financial Statement
Supplementary Data Amount of current period Amount of last period
Increase of operating items payable (decrease represented
555,322,720.06
with ―－‖) 204,920,506.62
Others
Net amount of cash flow from operating activities -1,781,868,618.65 -1,687,875,813.94
2. Major investment and financing activities not
involving cash revenue and expenditure
Conversion of debt into capital
Convertible corporate bonds due within one year
Fixed assets acquired under finance leases
3. Net change of cash and cash equivalents
Ending balance of cash 943,705,322.41
647,222,590.48
Less: Opening balance of cash 582,745,756.81
943,705,322.41
Plus: Balance of cash equivalents at the end of the year
Less: balance of cash equivalents at the beginning of the
year
Net increment of cash and cash equivalents 360,959,565.60
-296,482,731.93
2. Net Amount of Cash Paid for Acquisition of Subsidiaries in Current Period
Amount
25,313,232.7
Cash or cash equivalents for business combination of current period and paid in current period
2
Less: Cash and cash equivalents held by subsidiaries on the date of purchasing 22,973,109.2
3
Plus: Cash or cash equivalents for business combination of previous period and paid in current
period
Net amount of cash paid for acquisition of subsidiaries 2,340,123.50
3. Net Amount of Cash Received from Disposal of Subsidiaries in Current
Period
None
4. Composition of Cash and Cash Equivalents
Items Ending balance Opening balance
I. Cash 943,705,322.41
647,222,590.48
Including: Cash on hand 2,974,883.16
4,614,087.17
Note to financial statement Page 91
Notes to Financial Statement
Items Ending balance Opening balance
Bank deposit available for payment anytime 940,730,439.25
642,608,503.33
Other monetary capital available for payment
II. Cash equivalent
Including: bond investments to be mature within three (3) months
III Ending balance of cash and cash equivalents 943,705,322.41
647,222,590.48
Including: Cash and cash equivalents the use of which by the parent
company or any member of the group is limited
(LI) Assets with Ownership or Use Right Restricted
Items Ending book value Reason for restriction
Monetary Resources Guarantee deposit
957,751,325.63
Accounts receivable Pledge
862,436,053.18
Total
1,820,187,378.81
(XXXXXII) Foreign-Currency Monetary Items
1. Foreign-Currency Monetary Items
Ending balance in Exchange rate Ending balance in RMB
Items
foreign currency for conversion after conversion
Monetary Resources
Wherein: USD 22,202,038.06 6.5342 145,072,557.09
HKD 25,385,021.07 0.8359 21,219,339.11
THB 4,008,097.88 0.1995 799,775.85
QAR 646,404.20 1.7752 1,147,477.34
KWD 315,870.16 21.6271 6,831,355.54
BUK 14,152,354.13 0.0048 68,072.83
IDR 2,955,569.10 0.0005 1,424.58
KHR 2,814,000,000.00 0.0016 4,502,400.00
LKR 13,887,108.86 0.0426 591,532.90
UAE Dirham (AED) 54,806.22 1.7790 97,499.17
Russian Ruble (RUB) 5,189,976.74 0.1132 587,420.40
PHP 10,832,769.80 0.1302 1,410,534.96
Note to financial statement Page 92
Notes to Financial Statement
Ending balance in Exchange rate Ending balance in RMB
Items
foreign currency for conversion after conversion
MYR 3,256,061.00 1.6071 5,232,815.63
MOP 109,601.42 0.8006 87,746.90
Other accounts payable 868.79 0.4227 367.24
Including: AED
PHP 28,480.00 0.56212 16,009.18
HKD 38,447.15 3.0165 115,975.83
KWD 49,108,163.32 0.83591 41,050,004.80
MYR 400,084.01 21.62711 8,652,662.56
LKR 1,028,013.33 0.62224 639,671.01
USD 255,741,160.60 0.042596 10,893,506.46
Other accounts receivable 3,515,185.88 6.5342 22,968,927.57
Including: PHP
AED 116,997.00 3.0165 352,921.45
KWD 81,600.14 0.56212 45,869.07
QAR 240,764,214.32 0.056848791 13,687,154.42
LAK 165,274,765.76 1.794617 296,604,881.74
MYR 88,456,500.00 0.000785 69,470.25
LKR 993,634.08 0.62224 618,278.87
RUB 11,391,067.30 0.042596 485,211.94
USD 1,948,581.20 8.814 17,174,794.70
EUR 13,909,944.01 6.5342 90,890,356.15
Accounts payable 18,000,000.00 7.8023 140,441,400.00
Including: BHD
KWD 36.00 17.32842 623.82
LKR 11,272,681.63 21.62711 243,795,572.46
MYR 368,300,617.95 0.042596 15,688,069.74
USD 24,113,547.02 0.62224 15,004,413.50
BUK 68,722,689.46 6.5342 449,047,797.47
THB 1,121,875.00 0.004776 5,358.59
Accounts receivable 353,636.00 0.200048 70,744.18
Note to financial statement Page 93
Notes to Financial Statement
Ending balance in Exchange rate Ending balance in RMB
Items
foreign currency for conversion after conversion
Including: KWD
QAR 53,003,628.62 21.62711 1,146,315,526.86
LKR 326,181,915.40 0.57397 187,218,633.98
MYR 1,161,001,564.95 0.042596 49,453,822.85
USD 75,610,033.35 0.62224 47,047,587.15
THB 150,679,689.73 6.5342 984,571,228.63
Advance Payment 95,183.08 0.200048 19,041.19
Including: KWD
MYR 3,305,362.27 21.62711 71,485,447.14
USD 1,641,357.42 0.62224 1,021,318.24
LKR 35,700,885.00 6.5342 233,276,722.77
Items Received in
Advance 8,300,455.56 0.042596 353,564.78
Wherein: USD
Monetary Resources 1,551,293.67 6.5342 10,136,463.10
Note to financial statement Page 94
Notes to Financial Statement
VI Change of Combination Scope
(I) Business Combination not Under the Same Control
1. Business combination not under the same control in current term:
The purchased
The purchased party‘s net
Time Proportion Way to Basis for
party‘s income profit from the
point of Cost of equity of equity acquire the Date of determining
Name of purchased parties from the date of date of
equity acquisition acquired stock purchasing the date of
purchasing to the purchasing to
acquisition (%) equity purchasing
end of period the end of
period
Obtainment
Huichang County Zhongcheng Construction Engineering Co., Ltd. 2017.3.14 10,000.00 100.00 Purchasing 2017.3.14 196,113,738.58 35,837,282.15
of the
control right
Obtainment
Far Eastern International Engineering Company, LLC 2017.1.1 RUB95,000.00 95.00 Purchasing 2017.1.1 27,861,516.09 5,808,267.69
of the
control right
SINO GREAT WALL GENERAL TRADING & Obtainment
CONTRACTING CO., LTD (Kuwait Branch)
2017.1.1 RMB5,547,635.00 100.00 Purchasing 2017.1.1
of the
- -1,796,820.82
control right
Obtainment
Alor Vista Development Sdn Bhd 2017.9.28 MYR15,877,600 51.00 Purchasing 2017.9.28 of the -866,218.22
control right
Note to financial statement Page 95
Notes to Financial Statement
2. Combination Cost and Goodwill
Huichang County Far Eastern SINO GREAT WA Alor Vista
Development
Zhongcheng International LL GENERAL TR
Sdn Bhd
Construction Engineering ADING & CONTR
Engineering Co., Company, ACTING CO., LTD
Ltd. LLC (Kuwait Branch)
Combination cost
— Cash 10,000.00 5,547,635.00 25,292,312.
10,920.04
68
— Fair value of non-cash
assets
— Fair value of issued or
undertaken debts
— Fair value of issued
equity securities
— Fair value of contingent
consideration
— - Purchase-date fair
value of entities held before
the purchase date
— Others
Total combination cost 25,292,312.
10,000.00 10,920.04 5,547,635.00
68
Less: Fair value shares of
distinguishable net assets - 19,683,105.
10,000.00
obtained 96
Amount that goodwill/
combination cost is smaller
than the fair value shares of 5,609,206.7
- 10,920.04 5,547,635.00
distinguishable net assets 2
obtained
Note to financial statement Page 96
Notes to Financial Statement
3. Distinguishable Assets and Liabilities of Purchased Parties on the Date of Purchasing
Huichang County Zhongcheng
Far Eastern International SINO GREAT WALL GENERAL TRADING & CONTRACTING CO., Alor Vista Development Sdn
Construction Engineering Co.,
Engineering Company, LLC LTD (Kuwait Branch) Bhd
Ltd.
Fair value Book value
Fair value on Book value on Fair value on Book value
on the date on the date Fair value on the date of Book value on the date of
the date of the date of the date of on the date of
of of purchasing purchasing
purchasing purchasing purchasing purchasing
purchasing purchasing
10,000.00 10,000.00 2,439,674.5 2,439,674.5
Assets: 56,932,291.01 56,932,291.01
5 5
Monetary 10,000.00 10,000.00
261,775.85 261,775.85 0 0 22,701,333.38 22,701,333.38
Resources
Accounts 1,091,352.7 1,091,352.7
0 0 298,756.33 298,756.33
receivable 5 5
1,086,545.9 1,086,545.9
Inventories 0 0 32,965,323.27 32,965,323.27
5 5
Fixed assets 0 0
Intangible
0 0 966,878.04 966,878.04
assets
2,439,674.5 2,439,674.5
Liabilities: 18,337,965.58 18,337,965.58
5 5
Loan 0 0 16,623,744.74 16,623,744.74
Accounts 2,439,674.5 2,439,674.5
0 0 1,714,220.84 1,714,220.84
payable 5 5
Deferred
income tax 0 0
liabilities
Net assets 10,000.00 10,000.00 0 0 0 0 38,594,325.42 38,594,325.42
Less: Minor 10,000.00 10,000.00
shareholders‘ - - 18,911,219.46 18,911,219.46
equity
Note to financial statement Page 97
Notes to Financial Statement
Net assets 10,000.00 10,000.00
0 0 0 0 19,683,105.96 19,683,105.96
obtained
4. Gain or Loss on Re-measurement as per Fair Value of Equity Held before the Date of Purchasing
None
5. Relevant descriptions for failure to determine consolidated consideration and identified assets after being purchased and fair value of liability
at the purchasing date or at the end of current consolidation period.
None
6. Other description
None
Note to financial statement Page 98
Notes to Financial Statement
(II) Business combination under the same control
None
(III) Counter purchase
None
Note to financial statement Page 99
Notes to Financial Statement
(IV) Disposal of Subsidiaries
None
(V) Changes of Combination Scope for Other Reasons
Newly established companies in 2017 are as follows:
Shareholding
proportion (%) Acquisition Establishment
Invested units Main business place Registered place Business nature
method date
Direct Indirect
Sino Zhigu Industrial (Yueyang) Co., Ltd. Yueyang Yueyang Building construction 78.3 New establishment 2017/9/29
Urban infrastructure construction and
development, construction engineering
Changzhi Shenzhou Laodingshan Industrial Co., Ltd. Changzhi Changzhi 100 New establishment 2017/5/16
design, R&D, construction equipment
leasing, construction consulting
Xiangfen County Taoshan Construction Co., Ltd. Xiangfen Xiangfen 100 New establishment 2017/5/11
Infrastructure investment, road and
Sino Great Wall (Xihua) Economic Development Zone Investment bridge construction, water conservancy
Xihua Xihua 100 New establishment 2017/8/25
Co., Ltd. construction, general airport
construction
Hospital management service, pension
Liupanshui Central People‘s Hospital Investment Co., Ltd. Liupanshui Liupanshui rehabilitation service, investment, 75 New establishment 2017/4/6
trade, aged articles wholesale and retail
Medical technology development,
Sino Great Wall Guangxia (Wuhan) Medical Development Co., pharmaceutical sales, medical device
Wuhan Wuhan 60 New establishment 2017/10/17
Ltd. wholesale, medical and pension
investment
Investment in medical and pension
Fujian Sino Great Wall Mingyihui Medical Investment Co., Ltd. Fuzhou Fuzhou industry; hospital management; 87.5 New establishment 2017/1/4
medical device sales
Investment in medical industry
projects; self-operation and agency of
Sino Great Wall Medical Investment (Hubei) Co., Ltd. Wuhan Wuhan 100 New establishment 2017/1/3
the import and export business of
various goods and technology
Pharmaceutical wholesale,
Hubei Yuanyaotong Supply Chain Co., Ltd. Wuhan Wuhan self-operation and agency of the import 51 New establishment 2017/9/29
and export of goods and technology
Sino Great Wall Medical Management (Inner Mongolia) Co., Ltd. Hohhot Hohhot Pharmaceutical development, 62 New establishment 2017/4/20
pharmaceutical sales, medical device
Note to financial statement Page 100
Notes to Financial Statement
sales
Health consulting, fitness, pension
Sino Great Wall Health Management (Jiangsu) Co., Ltd. Jingjiang Jingjiang 51 New establishment 2017/12/25
service and medical device sales
Computer technology service, software
Sino Great Wall Southwest Science and Technology Co., Ltd. Chengdu Chengdu and hardware R&D sales, equipment 100 New establishment 2017/9/12
installation
Sino Great Wall Southwest Commercial and Trading Co., Ltd. Chengdu Chengdu Wholesale and sales 100 New establishment 2017/9/12
Construction engineering design,
Sino Great Wall Southwest Engineering Consultation Co., Ltd. Chengdu Chengdu 100 New establishment 2017/9/12
consulting, survey
Real estate development, interior
Sino Great Wall Zhihui Housing Property (Zhanjiang) Co., Ltd. Zhanjiang Zhanjiang decoration works for buildings and 100 New establishment 2017/6/16
houses
Great Wall Biaodian Energy Co., Ltd. Beijing Beijing Energy trade, R&D, import and export 51 New establishment 2017/3/13
Development, construction, operation
Kunming Sino Forest Industry Development Co., Ltd. Kunming Kunming 51 New establishment 2017/9/29
and management of industrial parks
Sino Great Wall Development (Hengqin) Co., Ltd. Zhuhai Hengqin Design and construction 85 New establishment 2016/12/8
Sino Great Wall Real Estate (Hubei) Co., Ltd. Wuhan Wuhan Real estate development 80 New establishment 2016/6/14
SGW America LLC America America Construction, design 99 1 New establishment 2017/9/17
Various construction, design, trade,
Sino Wai Man International Engineering Limited Macao Macao 60 New establishment 2017/9/28
investment, consulting
Real estate development and
management, land investment, property
Sino Great Wall (HK) Property Co., Limited Hong Kong Hong Kong 100 New establishment 2017/9/25
management, investment and business
consulting, trade
Purchased, or otherwise obtained,
SGW VENTURES SDN.BHD. Malaysia Malaysia attributes, stocks, bonds, reinvested 100 New establishment 2017/4/7
earnings, etc.
Building construction, engineering
SGW CONSTRUCTION (LANGKAWI) SDN.BHD. Malaysia Malaysia design, installation project, mechanical 100 New establishment 2017/4/19
and electrical installation, etc.
100
Shenzhou Changcheng (Lao) Co., Ltd.
Laos Laos Building, construction New establishment 2017/6/6
87
Sino Oman Refinery and Petrochemicals LLC Oman Oman Oil production, import and export New establishment 2017/12/26
Note to financial statement Page 101
Notes to Financial Statement
(VI) Others
Note to financial statement Page 102
Notes to Financial Statement
VII Equity in Other Subjects
(I) Equity in Subsidiaries
1. Composition of the Enterprise Group
Shareholding
Main proportion (%)
Registered Acquisitio
Name of subsidiaries business Business nature
place Indir n method
place Direct
ect
Sino Great Wall under
International Engineering Beijing Beijing Decoration industry 100.00 non-comm
Co., Ltd. on control
Sino Great Wall Investment
Establish
Infrastructure Investment Beijing Beijing management, import 100.00
ment
Co., Ltd. and export
Sino Great Wall Medical
Establish
Investment Management Beijing Beijing Medical investment 100.00
ment
Co., Ltd.
under
Wuhan Commercial Sanitary & medical
Wuhan Wuhan 100.00 non-comm
Workers Hospital LLC service
on control
Medical technology
development,
Sino Great Wall Guangxia pharmaceutical
Establish
(Wuhan) Medical Wuhan Wuhan sales, medical device 60.00
ment
Development Co., Ltd. wholesale, medical
and pension
investment
Urban infrastructure
construction and
development,
Changzhi Shenzhou construction
Establish
Laodingshan Industrial Changzhi Changzhi engineering design, 100.00
ment
Co., Ltd. R&D, construction
equipment leasing,
construction
consulting
Xiangfen County Taoshan Urban infrastructure Establish
Xiangfen Xiangfen 100.00
Construction Co., Ltd. construction, trade ment
Infrastructure
investment, road and
Sino Great Wall (Xihua)
bridge construction, Establish
Economic Development Xihua Xihua 100.00
water conservancy ment
Zone Investment Co., Ltd.
construction, general
airport construction
Hospital
management service,
Liupanshui Central pension
Establish
People‘s Hospital Liupanshui Liupanshui rehabilitation 75.00
ment
Investment Co., Ltd. service, investment,
trade, aged articles
wholesale and retail
Sino Zhigu Industrial Building Establish
Yueyang Yueyang 78.3
(Yueyang) Co., Ltd. construction ment
Sino Great Wall Group Construction, Establish
Hong Kong Hong Kong 100.00
Co., Limited design, trade, ment
Note to financial statement Page 103
Notes to Financial Statement
Shareholding
Main proportion (%)
Registered Acquisitio
Name of subsidiaries business Business nature
place Indir n method
place Direct
ect
investment
consulting
Sino Great Wall
Design and Establish
Decoration and Design Beijing Beijing 100.00
consulting ment
Co., Ltd.
Sino Great Wall
Design and Establish
International Engineering Macao Macao 96.00 4.00
construction ment
(Macao) Co., Ltd.
Suzhou Lvbang Wood
Establish
Industry Technology Co., Suzhou Suzhou Production and sales 100.00
ment
Ltd.
Shenzhen Yatian under
Design and
Decoration Design Shenzhen Shenzhen 70.00 non-comm
construction
Engineering Co., Ltd. on control
Guangzhou Herabenna Establish
Guangzhou Guangzhou Design 100.00
Interior Design Co., Ltd. ment
Investment, R&D
Shenzhen Hongtulve Establish
Shenzhen Shenzhen and sales, trade, 100.00
Industrial Co., Ltd. ment
import and export
Mechanical and
electrical
Inrich Me Engineering engineering, Establish
Hong Kong Hong Kong 100.00
Co., Ltd. scientific research, ment
trade, investment
consulting
Sino Great Wall Real Real estate Establish
Wuhan Wuhan 80.00
Estate (Hubei) Co., Ltd. development ment
Sino Great Wall New Renewable energy Establish
Beijing Beijing 100.00
Energy (Beijing) Co., Ltd. technology ment
Shanghai Lingrui
Establish
International Trading Co., Shanghai Shanghai Trade 100.00
ment
Ltd.
Sino Great Wall under
Building
Construction Construction Chengdu Chengdu 60.00 non-comm
construction
Co., Ltd. on control
Sino Great Wall under
Building
Southwest Engineering Chengdu Chengdu 100.00 non-comm
construction
Co., Ltd. on control
Investment and
Sino Great Wall (Beijing)
Asset Management; Establish
Investment Fund Beijing Beijing 100.00
economic and trade ment
Management Co., Ltd.
consulting
Huichang County Medical industry under
Zhongcheng Construction Huichang Huichang construction, import 100.00 non-comm
Engineering Co., Ltd. and export on control
Great Wall Biaodian Energy trade, R&D, Establish
Beijing Beijing 51.00
Energy Co., Ltd. import and export ment
Sino Great Wall Zhihui Real estate Establish
Housing Property Zhanjiang Zhanjiang development, 100.00 ment
(Zhanjiang) Co., Ltd. interior decoration
works for buildings
Note to financial statement Page 104
Notes to Financial Statement
Shareholding
Main proportion (%)
Registered Acquisitio
Name of subsidiaries business Business nature
place Indir n method
place Direct
ect
and houses
SINO GREAT WALL
INTERNETIONAL Design and Establish
Saipan Saipan 100.00
ENGINEERING(CNMI) construction ment
CO.,LLC
SINO GREAT WALL GE under
Building
NERAL TRADING & C Kuwait Kuwait 49.00 non-comm
construction
ONTRACTING CO.LTD on control
Sino Great Wall
International Design and Establish
Burma Burma 80.00
Engineering( MM ) Co., construction ment
Ltd
PT.SINO GREAT WALL
Building Establish
CONSTRUCTION Indonesia Indonesia 67.00
construction ment
INDONESIA
Shenzhou Changcheng Building, Establish
Laos Laos 100.00
(Lao) Co., Ltd construction ment
Engaged in domestic
and international
construction
contracting, interior
and exterior
decoration of
buildings, accepting
bids to obtain
bidding civil
engineering projects
Sino Great Wall
of government
International Establish
Thailand Thailand agencies (cities, 49.00
Engineering(Thailand) ment
organs, etc.),
Co., Ltd.
individuals and legal
entities; engaged in
leasing, sales,
export, purchase of
various construction
materials and
construction
equipment, and real
estate development,
etc.
Sino Great Wall
Design and Establish
International Engineering Maldives Maldives 100.00
construction ment
Co., Ltd
PT.SINO GREAT WALL Establish
Real estate or
INVESTMENT Indonesia Indonesia 99.90 ment
leasing
INDONESIA
Establish
SGW America LLC America America Construction, design 99.00 1.00
ment
Sino Great Wall Group Design and Establish
England England 98.00
(UK) Co., Limited construction ment
Kunming Sino Forest Development, Establish
Industry Development Kunming Kunming construction, 51.00 ment
Co., Ltd. operation and
Note to financial statement Page 105
Notes to Financial Statement
Shareholding
Main proportion (%)
Registered Acquisitio
Name of subsidiaries business Business nature
place Indir n method
place Direct
ect
management of
industrial parks
SINO GREAT Legal business Establish
America America 100.00
WALL(USA).INC practices ment
Sino Great Wall Establish
Design and
Development (Hengqin) Zhuhai Hengqin 85.00 ment
construction
Co., Ltd.
Investment in
Fujian Sino Great Wall medical and pension
Establish
Mingyihui Medical Fuzhou Fuzhou industry; hospital 87.50
ment
Investment Co., Ltd. management;
medical device sales
Investment in
medical industry
projects;
Sino Great Wall Medical
self-operation and Establish
Investment (Hubei) Co., Wuhan Wuhan 100.00
agency of the import ment
Ltd.
and export business
of various goods and
technology
Pharmaceutical
Sino Great Wall Medical development,
Establish
Management (Inner Hohhot Hohhot pharmaceutical 62.00
ment
Mongolia) Co., Ltd. sales, medical device
sales
Health consulting,
Sino Great Wall Health
fitness, pension Establish
Management (Jiangsu) Jingjiang Jingjiang 51.00
service and medical ment
Co., Ltd.
device sales
Pharmaceutical
wholesale,
Hubei Yuanyaotong self-operation and Establish
Wuhan Wuhan 51.00
Supply Chain Co., Ltd. agency of the import ment
and export of goods
and technology
Bozhou Guangcheng New Solar power Establish
Bozhou Bozhou 100.00
Energy LLC generation ment
Bozhou Zhaosheng
Establish
Agricultural Technology Bozhou Bozhou Agriculture 100.00
ment
LLC
Bozhou Xieying Solar Solar power Establish
Bozhou Bozhou 100.00
Power Generation LLC generation ment
Wu‘an Juhe Photovoltaic Establish
Wu‘an Wu‘an Solar photovoltaic 100.00
Power Co., Ltd. ment
Qian‘an Shenzhou Solar
Solar photovoltaic Establish
Power Generation Co., Qian‘an Qian‘an 100.00
power station ment
Ltd.
Computer Establish
Sino Great Wall technology service, ment
Southwest Science and Chengdu Chengdu software and 100.00
Technology Co., Ltd. hardware R&D
sales, equipment
Note to financial statement Page 106
Notes to Financial Statement
Shareholding
Main proportion (%)
Registered Acquisitio
Name of subsidiaries business Business nature
place Indir n method
place Direct
ect
installation
Sino Great Wall Establish
Southwest Commercial Chengdu Chengdu Wholesale and sales 100.00 ment
and Trading Co., Ltd.
Sino Great Wall Construction
Establish
Southwest Engineering Chengdu Chengdu engineering design, 100.00
ment
Consultation Co., Ltd. consulting, survey
Gongxian County Sino
Gong Gong Establish
Medical Investment Co., Medical investment 50.00
County County ment
Ltd.
Building
Far eastern international under
construction,
engineering company, Russia Russia 95.00 non-comm
commerce and trade,
LLC on control
transport, leasing
Sino Great Building Establish
the the
Wall(Philippines) construction, import 100.00 ment
Philippines Philippines
International Corporation and export trade
Real estate Establish
development and ment
management, land
Sino Great Wall (HK) investment, property
Hong Kong Hong Kong 100.00
Property Co., Limited management,
investment and
business consulting,
trade
Building Establish
construction, ment
engineering design,
SGW HP Engineering
Malaysia Malaysia installation project, 100.00
Construction SDN.BHD
mechanical and
electrical
installation, etc.
Purchased, or Establish
otherwise obtained, ment
SGW VENTURES
Malaysia Malaysia attributes, stocks, 100.00
SDN.BHD.
bonds, reinvested
earnings, etc.
Building
construction,
SGW CONSTRUCTION engineering design,
Establish
(LANGKAWI) Malaysia Malaysia installation project, 100.00
ment
SDN.BHD. mechanical and
electrical
installation, etc.
Real estate
Combinatio
development and
Alor Vista Development n not under
Malaysia Malaysia management, land 51
Sdn Bhd common
investment, building
control
and construction, etc.
Sino Oman Refinery Oil production, import
Oman Oman and export 87 Establishment
and Petrochemicals
Note to financial statement Page 107
Notes to Financial Statement
Shareholding
Main proportion (%)
Registered Acquisitio
Name of subsidiaries business Business nature
place Indir n method
place Direct
ect
LLC
Combinatio
SINO GREAT WALL GENE
n not under
RAL TRADING & CONTR Kuwait Kuwait Building construction 100
common
ACTING CO.LTD
control
Important Non-sole Subsidiaries
Proportion of Dividends declared
Gain or loss attributed Ending balance of
Name of shares held to distribute to minor
to minor shareholders in minor shareholders‘
subsidiaries by minor shareholders in
current period equity
shareholders current period
Sino Great Wall
Construction
60% 4,411,448.72 60,022,959.21
Construction Co.,
Ltd.
Note to financial statement Page 108
Notes to Financial Statement
2. Main Financial Information of Important Non-sole Subsidiaries
Ending balance Opening balance
Name of
subsidiaries Non-current Current Non-curren Total Non-curren Current Non-curren Total
Current assets Total assets Current assets Total assets
assets liabilities t liabilities liabilities t assets liabilities t liabilities liabilities
Sino Great
Wall
Constructio 524,593,077.5 65,345,534.1 589,938,611.6 439,881,213.6 439,881,213.6 393,681,062.9 3,756,227.5 397,437,290.4 258,408,514.2 258,408,514.2
0 -
n 0 7 7 4 4 1 6 7 4 4
Constructio
n Co., Ltd.
Amount incurred of current period Amount incurred of last period
Name of subsidiaries Total amount of Cash flow from Operating Total amount of Cash flow from
Operating income Net profit Net profit
composite benefits operating activities income composite benefits operating activities
Sino Great Wall Construction
674,529,952.42 11,028,621.80 11,028,621.80 -9,740,360.89 421,055,207.64 1,986,128.01 1,986,128.01 -59,821,309.86
Construction Co., Ltd.
Note to financial statement Page 109
Notes to Financial Statement
VIII Risks Related to Financial Instruments
The Company faces various financial risks in business operation, including credit risk,
market risk and fluidity risk. The Company‘s Board of Directors comprehensively takes
charge of determining risk management objectives and policies, and undertakes ultimate
responsibility for the risk management objectives and policies. However, the Board of
Directors has authorized the Company‘s management level to design and implement the
procedures which could guarantee the effective implementation of the risk management
objectives and policies. The Board of Directors reviews the effectiveness of the
implemented procedures and the rationality of the risk management targets and policies
via monthly reports submitted by the Management. The Company‘s internal auditor will
audit the policies and procedures of risk management and report the findings to the audit
committee.
The overall objective of the Company‘s risk management is to make risk management
policies which could lower risks to the greatest extent in condition of not excessively
affecting the Company‘s competitiveness and ability to meet emergencies.
(I) Credit Risk
Credit risk indicates the risk that one party to financial instruments does not implement its
obligations, so the other party suffers from financial losses. The Company mainly faces
the customer credit risk caused by sales on account. Before signing a new contract, the
Company will appraise a new customer‘s credit risk, including external credit rating and
bank credibility letter (if available) under some circumstances. The company has set a
credit limit to each customer, which is the maximum amount that does not require
additional approval.
The company ensures its whole credit risk is within a controllable range by means of the
quarterly monitoring over credit rating of existing customers and the monthly review of
aging of accounts receivable. When monitoring customers‘ credit risk, the Company
divides customers into different groups according to their credit characteristics.
Customers rated to be ―high-risk‖ level will appear in the shortlist of restricted customers,
and only in the precondition of obtaining extra approval, will they enjoy the sales on
account in future, or they must pay corresponding accounts in advance.
Note to financial statement Page 110
Notes to Financial Statement
(II) Market Risk
Market risk of financial instruments indicate the risk that the fair value or future cash flow
of financial instruments fluctuates due to change of market price, including exchange rate
risk, interest rate risk and other price risk.
(1) Interest Rate Risk
Interest rate risk indicates the risk that the fair value or future cash flow of financial
instruments fluctuates due to change of market interest rate. The interest rate risk faced by
the Company is mainly sourced from bank loan. By establishing good bank-enterprise
relationship, the Company reasonably designs the credit line, credit variety and credit
period, guarantees sufficient credit line obtained from banks, meeting the Company‘s
various short-term financing demands. Meanwhile, by shortening the period of single
loans, and specially stipulating the clauses of advanced repayment, the Company
reasonably lowers the risk of interest rate fluctuation.
On December 31, 2017, if the loan interest rate calculated by the floating interest rate
rises or reduces by 100 benchmark points when other variables are kept unchanged, the
net profit of the Company will decrease or increase by RMB [ ] million (December 31,
2016: RMB 2.12 million)
(2) Exchange rate risk
The exchange rate risk refers to the risks of fluctuant fair value of financial instruments or
future cash flow due to the change of foreign currency exchange rate. Our company will
try to match the foreign currency income and foreign currency expense to reduce the
exchange rate risks. Besides, the company may sign a long-term foreign exchange
contracts or currency exchange contracts to achieve the purpose of avoiding exchange rate
risk.
The exchange rate risk that the Company is faced with mainly comes from financial assets
and financial liabilities priced with US dollars. The amount that foreign currency financial
assets and foreign currency financial liabilities converting into RMB are listed as follows:
Note to financial statement Page 111
Notes to Financial Statement
Ending balance Ending balance
Items Other foreign Other foreign
USD Total USD Total
currencies currencies
Monetary 42,577,762.4 187,650,319.
145,072,557.09 1,069,830,885.89 18,299,991.93 1,088,130,877.82
Resources 5 54
Accounts
984,571,228.63 1,430,054,612.03 2,414,625,840.66 761,770,797.71 1,301,117,521.35 2,062,888,319.06
receivable
Advance
233,276,722.77 72,860,330.16 306,137,052.93 17,950,907.64 78,735,339.22 96,686,246.86
Payment
Other accounts
90,890,356.15
469,479,982. 560,370,338. 90,517,446.65 58,320,891.22 148,838,337.87
receivable 44 59
Subtotal of 1,453,810,864.6 2,014,972,68 3,468,783,55
1,940,070,037.89 1,456,473,743.72 3,396,543,781.61
Assets 4 7.08 1.72
Accounts
449,047,797.47 274,564,782.29 723,612,579.76 297,374,515.61 318,399,295.82 615,773,811.43
payable
Items Received
10,136,463.10 0.00 10,136,463.10 10,572,092.06 21,321,289.59 31,893,381.65
in Advance
Other accounts
22,968,927.57 61,367,829.84 84,336,757.41 70,299,852.89 10,091,141.13 80,390,994.02
payable
Liability subtotal 482,153,188.14 335,932,612.13 818,085,800.27 378,246,460.56 349,811,726.54 728,058,187.10
1,679,040,07 2,650,697,75
Net 971,657,676.50 1,561,823,577.33 1,106,662,017.18 2,668,485,594.51
4.95 1.45
As of December 31, 2017, if the rate of RMB against USD rises or reduces by 1% with all
other variables unchanged, the net profit of the Company will increase or decrease RMB
9,716,600 (December 31, 2016: RMB 15,618,200).
(III) Liquidity risk
Fluidity risk indicates the risk of capital shortage which occurs during the enterprise‘s
implementing the obligation of accounts settlement by delivering cash or other financial
assets. The Company‘s policy is to ensure sufficient cash for repaying debts coming due.
Fluidity risk is under the centralized control of the Company‘s financial department. By
monitoring the balance of cash and the securities which could be realized anytime, and
through rolling prediction on the cash flow in the upcoming 12 months, the financial
department ensures the Company to have sufficient funds to repay debts under all
reasonably predicted circumstances. See the related subjects in the Note 5 for the
disclosure of all financial liabilities of the Company at non-discounting contractual cash
flows are listed as per due date
IX Related party and related transaction
(I) Information about Parent Company of the Company
Voting right proportion of the
Name of Parent Amount of Shareholding proportion of the
parent company to the company
Company holdings parent company to the company (%)
(%)
Note to financial statement Page 112
Notes to Financial Statement
Voting right proportion of the
Name of Parent Amount of Shareholding proportion of the
parent company to the company
Company holdings parent company to the company (%)
(%)
Chen Lve 582,944,556 34.33 34.33
(II) Information about Subsidiaries of the Company
Please refer to Note VII. Equities in other subjects for the detailed information of the
company‘s subsidiaries.
(III) Other Affiliated Parties
Name of other affiliated parties Relationship between other affiliated parties and our company
He Sen Brother-in-law of the shareholder and actual controller of the Company
He Feiyan Spouse of the shareholder and actual controller of the Company
Li Erlong, etc. Director, supervisor and senior executive of the Company
Qinghai Heyi Commerce Co., Ltd. Enterprise controlled by the director Wang Lei of the Company
Qinghai Heyi Mining Industry Co.,
Enterprise controlled by the director Wang Lei of the Company
Ltd.
Kunwu Jiuding Investment
More than 5% of the shareholders of the Company and the companies
Management Co. Ltd and the affiliated
under common control
parties
The wholly-owned subsidiary company of which the company director
Beijing Baolilai Technology Co., Ltd.
of the Company acts as the director of its parent company
(IV) Affiliated Transactions
1. Affiliated Transactions of Purchasing and Selling Goods, Rendering and
Accepting Labor Services
Form of Information on Purchasing of Goods/ Accepting of Labor Services
(ten thousand Yuan)
Contents of affiliated Amount incurred of Amount incurred of
Affiliated parties
transactions current period last period
Qinghai Heyi Commerce Co., Ltd. Payment for materials 319.00 1,959.00
Table of selling commodities/ supplying labor
(unit: ten thousand Yuan)
Amount Amount
Contents of
incurred incurred
Affiliated parties affiliated
of current of last
transactions
period period
Leasehold
Kunwu Jiuding Investment Management Co. Ltd. improvement
122.76 795.13
Beijing Baolilai Technology Co., Ltd. (renamed as: Beijing Leasehold 16.00 38.2
Note to financial statement Page 113
Notes to Financial Statement
Shenzhou High-speed Railway Asset Management Co., improvement
Ltd.)
Leasehold
Shanghai Heyi Supply Chain Management Co., Ltd. improvement
421.69
2. Related entrusted management/contract and commission
management/outsource situation
None
3. Related-party lease
None
4. Affiliated Guarantees
The Company acting as the secured party
Guarantee
Guaranteed Starting date Expiry date
Guaranteed Party Corresponding Bank completed
amount of guarantee of guarantee
or not
Shanghai Pudong
Sino Great Wall Co., Ltd. Development Bank
27,000.00
2017.3.13 2018.3.13 No
Shenzhen Branch
Baoshang Bank
Sino Great Wall Co., Ltd.
Shenzhen Branch 20,000.00
2017.1.13 2018.1.12 No
Industrial Bank
Sino Great Wall Co., Ltd.
Houhai Branch 80,000.00
2017.4.17 2018.4.17 No
Xiamen International
Sino Great Wall Co., Ltd.
Bank 5,000.00
2017.5.17 2017.5.16 No
Sino Great Wall Co., Ltd. 2017.6.23 2018.6.22 No
Chang'an International
Sino Great Wall Co., Ltd.
Trust 40,000.00
2017.7.10 2018.7.9 No
Sino Great Wall Co., Ltd. 2017.8.24 2018.8.23 No
China Bohai Bank
Sino Great Wall Co., Ltd.
Shenzhen Branch 10,000.00
2017.6.28 2018.6.27 No
Sino Great Wall Co., Ltd. Industrial Trust
10,000.00
2017.8.9 2018.8.8 No
Sino Great Wall Co., Ltd. 2017.8.22 2018.8.21 No
Bank of Jiujiang
Sino Great Wall Co., Ltd. 13,000.00 2017.8.23 2018.8.22 No
China Minsheng Bank
Sino Great Wall Co., Ltd.
Shenzhen Branch 20,000.00
2017.8.30 2018.8.30 No
Shenzhen Rural
Sino Great Wall Co., Ltd.
Commercial Bank 1,000.00
2017.11.17 2018.11.17 No
China Zheshang Bank
Sino Great Wall Co., Ltd. Shenzhen Baoan
20,000.00
2017.10.26 2018.5.27 No
Subbranch
Bank of Hangzhou
Sino Great Wall Co., Ltd.
Shenzhen Branch 10,000.00
2016.10.27 2017.10.27 No
Sino Great Wall Co., Ltd. Hunan Trust 2016.4.19 2018.4.19 No
Note to financial statement Page 114
Notes to Financial Statement
20,000.00
Sino Great Wall Co., Ltd. CITIC Trust
40,000.00
2016.6.28 2018.6.27 No
Bohai Trust (Shanghai
Pudong Development
Sino Great Wall Co., Ltd.
Bank Shenzhen 30,000.00
2017.5.10 2020.5.10 No
Branch)
Sino Great Wall Co., Ltd. 2017.8.3 2019.2.3 No
Sino Great Wall Co., Ltd. 2017.8.10 2019.2.10 No
Sino Great Wall Co., Ltd. 2017.8.16 2019.2.16 No
Wanxiang Trust
Sino Great Wall Co., Ltd. 20,000.00 2017.8.3 2019.8.3 No
Sino Great Wall Co., Ltd. 2017.8.10 2019.8.10 No
Sino Great Wall Co., Ltd. 2017.8.16 2019.8.16 No
Sino Great Wall Co., Ltd. 2019.9.18 No
2017.9.18
Sino Great Wall Co., Ltd. 2017.9.25 2019.9.25 No
Zhongjiang Trust
Sino Great Wall Co., Ltd. 30,000.00 2017.9.29 2019.9.29 No
Sino Great Wall Co., Ltd. 2017.10.13 2019.10.13 No
Sino Great Wall Co., Ltd. 2017.10.18 2019.10.18 No
Sino Great Wall Co., Ltd. China Everbright
Pledge for accounts Bank Shenzhen
25,000.00
2017.1.11 2018.1.10 No
receivable Branch
China Everbright
Sino Great Wall Co., Ltd. Bank Co., Ltd.
10,000.00
2016/1/13 2017/1/12 Yes
Shenzhen Branch
Shanghai Pudong
Development Bank
Sino Great Wall Co., Ltd.
Co., Ltd. Shenzhen 12,000.00
2016/1/13 2017/1/12 Yes
Branch
Shanghai Pudong
Development Bank
Sino Great Wall Co., Ltd.
Co., Ltd. Shenzhen 25,714.00
2016/8/25 2017/8/25 Yes
Branch
Baoshang Bank Co.,
Sino Great Wall Co., Ltd.
Ltd. Shenzhen Branch 20,000.00
2016/1/21 2017/1/20 Yes
China Zheshang Bank
Sino Great Wall Co., Ltd. Co., Ltd. Shenzhen
20,000.00
2016/6/21 2017/6/20 Yes
Branch
China Bohai Bank
Sino Great Wall Co., Ltd. Co., Ltd. Shenzhen
10,000.00
2016/4/29 2017/4/28 Yes
Branch
China Guangfa Bank
Sino Great Wall Co., Ltd. Co., Ltd. Shenzhen
10,000.00
2016/8/22 2017/8/22 Yes
Branch
Industrial International
Sino Great Wall Co., Ltd.
Trust 10,000.00
2016.9.30 2018.9.29 No
Bank of China
Sino Great Wall Co., Ltd. Shenzhen Futian 2016.11.12 2017.11.12 Yes
50,000.00
Subbranch
Sino Great Wall Bank of Shanghai
Beijing Branch 70,000.00
2017.11.16 2018.11.5 No
International Engineering
Note to financial statement Page 115
Notes to Financial Statement
Co., Ltd.
Sino Great Wall Shanghai Pudong
International Engineering Development Bank
13,000.00
2016.10.28 2017.9.28 No
Co., Ltd. Fulicheng Subbranch
Sino Great Wall
Haikou United Rural
International Engineering
Commercial Bank 7,000.00
2017.2.28 2018.2.27 Yes
Co., Ltd.
Sino Great Wall
Bank of Ningbo
International Engineering
Beijing Branch 20,000.00
2017.4.11 2018.3.31 No
Co., Ltd.
Sino Great Wall
Bank of Dalian
International Engineering
Beijing Branch 18,000.00
2017.1.3 2018.1.2 No
Co., Ltd.
Sino Great Wall
Harbin Bank Tianjin
International Engineering
Branch 12,000.00
2017.6.7 2018.5.22 No
Co., Ltd.
Sino Great Wall
China Bohai Bank
International Engineering
Shenzhen Branch 40,000.00
2017.7.25 2018.7.24 No
Co., Ltd.
Sino Great Wall
China CITIC Bank
International Engineering
Cuiwei Subbranch 22,000.00
2017.6.30 2018.6.30 No
Co., Ltd.
Sino Great Wall
Huaneng Guicheng
International Engineering
Trust Co., Ltd. 20,000.00
2017.10.18 2018.10.17 No
Co., Ltd.
Sino Great Wall
China Railway Trust
International Engineering
Co., Ltd. 10,000.00
2017.11.22 2018.11.21 No
Co., Ltd.
Sino Great Wall Shanghai Huarui Bank
International Engineering (Ping An Financial
8,400.00
2017.3.31 2019.9.30 No
Co., Ltd. Leasing)
Sino Great Wall
Bank of Nanjing
International Engineering
Beijing Branch 0801 15,000.00
2016/3/21 2017/3/21 No
Co., Ltd.
China Minsheng Bank
Sino Great Wall
Beijing
International Engineering
Jianguomenwai 15,000.00
2016/7/19 2017/7/19 No
Co., Ltd.
Subbranch
China Resources Bank
Sino Great Wall
Shenzhen
International Engineering
Huaruncheng 10,000.00
2017.11.30 2018.11.30 No
Co., Ltd.
Subbranch
Sino Great Wall
Kincheng Bank of
International Engineering
Tianjin Co., Ltd. 5,000.00
2016/8/8 2017/8/8 Yes
Co., Ltd.
Sino Great Wall Guangdong Nanyue
International Engineering Bank Shenzhen
5,000.00
2015/11/19 2016/11/19 Yes
Co., Ltd. Branch
Sino Great Wall Shanghai Huarui Bank
International Engineering (Ping An Financial
8,400.00
2016/12/19 2017/12/19 Yes
Co., Ltd. Leasing)
Sino Great Wall
Bank of Shanghai
International Engineering
Beijing Branch 14,000.00
2016/7/12 2017/7/12 Yes
Co., Ltd.
Sino Great Wall Luzhou City 2017.9.30 2018.9.29 No
Note to financial statement Page 116
Notes to Financial Statement
Construction Construction Commercial Bank 5,000.00
Co., Ltd.
Great Wall Guoxing
Wuhan Commercial
Worker Hospital
Financial Leasing Co.,
10,889.81
2017.1.18 2020.1.17 No
Ltd.
Chongqing Haier
Chen Lve
Microfinance Co., Ltd. 6,000.00
2017.5.22 2017.8.22 Yes
Chongqing Haier
Chen Lve
Microfinance Co., Ltd. 6,000.00
2017.9.21 2017.12.21 Yes
Bank of Beijing
Chen Lve
Shuangxiu Subbranch 1,000.00
2016.12.15 2017.6.14 Yes
The Company acting as the secured party
Guaran
tee
Corresponding Debit Guarantee Starting date Expiry date
Guarantor comple
Bank d amount of guarantee of guarantee
ted or
not
Chen Lve, He Feiyan, Sino Bank of Shanghai
Great Wall Co., Ltd. Beijing Branch 70,000.00
2017.11.16 2018.11.5 No
Shanghai Pudong
Chen Lve, Sino Great Wall
Co., Ltd.
Development Bank
13,000.00
2016.10.28 2017.9.28 No
Fulicheng Subbranch
Sino Great Wall Co., Ltd., Haikou United Rural
Chen Lve Commercial Bank 7,000.00
2017.2.28 2018.2.27 Yes
Sino Great Wall Co., Ltd., Bank of Ningbo Beijing
Chen Lve Branch 20,000.00
2017.4.11 2018.3.31 No
Sino Great Wall Co., Ltd., Bank of Dalian Beijing
Chen Lve, He Feiyan Branch 18,000.00
2017.1.3 2018.1.2 No
Sino Great Wall Co., Ltd., Harbin Bank Tianjin
Chen Lve Branch 12,000.00
2017.6.7 2018.5.22 No
China Bohai Bank
Sino Great Wall Co., Ltd.
Shenzhen Branch 40,000.00
2017.7.25 2018.7.24 No
Sino Great Wall Co., Ltd., China CITIC Bank
Chen Lve Cuiwei Subbranch 22,000.00
2017.6.30 2018.6.30 No
Sino Great Wall Co., Ltd., Huaneng Guicheng Trust
Chen Lve Co., Ltd. 20,000.00
2017.10.18 2018.10.17 No
Sino Great Wall Co., Ltd., China Railway Trust Co.,
Chen Lve Ltd. 10,000.00
2017.11.22 2018.11.21 No
Sino Great Wall Co., Ltd.,
Chen Lve
Shanghai Huarui Bank
8,400.00
2017.3.31 2019.9.30 No
Chen Lve, Sino Great Wall Bank of Nanjing Beijing
Co., Ltd. Branch 0801 15,000.00
2016/3/21 2017/3/21 No
China Minsheng Bank
Chen Lve, Sino Great Wall
Co., Ltd., He Feiyan
Beijing Jianguomenwai
15,000.00
2016/7/19 2017/7/19 No
Subbranch
China Resources Bank
Chen Lve, Sino Great Wall
Co., Ltd.
Shenzhen Huaruncheng
10,000.00
2017.11.30 2018.11.30 No
Subbranch
Kincheng Bank of
Sino Great Wall Co., Ltd.
Tianjin Co., Ltd. 5,000.00
2016/8/8 2017/8/8 Yes
Note to financial statement Page 117
Notes to Financial Statement
Chen Lve, He Feiyan, Sino Guangdong Nanyue
Great Wall Co., Ltd. Bank Shenzhen Branch 5,000.00
2015/11/19 2016/11/19 Yes
Bank of Beijing Lvgang
Qinghai Heyi Mining CO.,
Ltd., Chen Lve
International Center
50,000.00
2016.3.10 2017.3.9 Yes
Subbranch 3640
Ping'an International
Sino Great Wall Co., Ltd.,
Chen Lve
Financial Leasing Co.,
8,400.00
2016/12/19 2017/12/19 Yes
Ltd.
Joint Adventure Guarantee Haikou United Rural
Group Co., Ltd. Commercial Bank 2,800.00
2016/1/8 2017/1/7 Yes
Chen Lve, Sino Great Wall Bank of Shanghai
Co., Ltd., He Feiyan Beijing Branch 14,000.00
2016/7/12 2017/7/12 Yes
Ping An Bank Shenzhen
Chen Lve, He Feiyan Times Finance Center
30,000.00
2016.12.21 2017.12.20 No
Subbranch 3008
Beijing Zhongguancun The Export-Import Bank
Sci-tech Financing Guaranty of China Beijing Branch
23,000.00
2016/2/22 2018/3/22 No
Co., Ltd. 0941
Ping'an International
Chen Lve
Financial Leasing 0171 550.00
2015.2.11 2018.2.11 No
Ping'an International
Chen Lve
Financial Leasing 0172 550.00
2015.2.11 2018.2.11 No
Ping'an International
Chen Lve
Financial Leasing 0173 550.00
2015.7.30 2018.7.30 No
Ping'an International
Chen Lve
Financial Leasing 0174 550.00
2015.8.3 2018.8.3 No
Ping'an International
Chen Lve Financial Leasing Co.,
1,200.00
2016/1/13 2018/1/13 No
Ltd.
Ping'an International
Chen Lve Financial Leasing Co.,
1,200.00
2016/3/29 2018/3/29 No
Ltd.
Ping'an International
Chen Lve Financial Leasing Co.,
1,200.00
2016/3/29 2018/3/29 No
Ltd.
Beijing Zhongguancun
Bank of Beijing
Sci-tech Financing Guaranty
Shuangxiu Subbranch 24,500.00
2017.10.31 2020.10.30 No
Co., Ltd.
Sino Great Wall
Shanghai Pudong
International Engineering
Co., Ltd., Chen Lve, He
Development Bank
27,000.00
2017.3.13 2018.3.13 No
Shenzhen Branch
Feiyan
Sino Great Wall
Baoshang Bank
International Engineering
Shenzhen Branch 20,000.00
2017.1.13 2018.1.12 No
Co., Ltd., Chen Lve
Sino Great Wall
Industrial Bank Houhai
International Engineering
Branch 80,000.00
2017.4.17 2018.4.17 No
Co., Ltd., Chen Lve
Chen Lve Bridge Trust
30,000.00
2017.8.21 2018.8.21 No
Sino Great Wall
Xiamen International
International Engineering
Bank 5,000.00
2017.5.17 2017.5.16 No
Co., Ltd., Chen Lve
Sino Great Wall Chang'an International 2017.6.23 2018.6.22 No
Note to financial statement Page 118
Notes to Financial Statement
International Engineering Trust 40,000.00
Co., Ltd., Chen Lve
Sino Great Wall
International Engineering 2017.7.10 2018.7.9 No
Co., Ltd., Chen Lve
Sino Great Wall
International Engineering 2017.8.24 2018.8.23 No
Co., Ltd., Chen Lve
Sino Great Wall
China Bohai Bank
International Engineering Shenzhen Branch 10,000.00
2017.6.28 2018.6.27 No
Co., Ltd., Chen Lve
Sino Great Wall
International Engineering
Industrial Trust
10,000.00
2017.8.9 2018.8.8 No
Co., Ltd., Chen Lve, He
Feiyan
Sino Great Wall
International Engineering 2017.8.22 2018.8.22 No
Co., Ltd.
Bank of Jiujiang
Sino Great Wall 13,000.00
International Engineering 2017.8.23 2018.8.22 No
Co., Ltd.
Sino Great Wall
China Minsheng Bank
International Engineering
Shenzhen Branch 20,000.00
2017.8.30 2018.8.30 No
Co., Ltd., Chen Lve
Sino Great Wall
Shenzhen Rural
International Engineering
Commercial Bank 5,000.00
2017.11.17 2018.11.17 No
Co., Ltd., Chen Lve
Sino Great Wall China Zheshang Bank
International Engineering Shenzhen Baoan
20,000.00
2017.10.26 2018.5.27 No
Co., Ltd., Chen Lve Subbranch
Sino Great Wall
Bank of Hangzhou
International Engineering
Shenzhen Branch 10,000.00
2016.10.27 2017.10.27 No
Co., Ltd., Chen Lve
Sino Great Wall
International Engineering
Co., Ltd., Chen Lve, He
Hunan Trust
20,000.00
2016.4.19 2018.4.19 No
Feiyan
Sino Great Wall
International Engineering CITIC Trust
40,000.00
2016.6.28 2018.6.27 No
Co., Ltd., Chen Lve
Sino Great Wall
Bohai Trust (Shanghai
International Engineering
Co., Ltd., Chen Lve, He
Pudong Development
30,000.00
2017.5.10 2020.5.10 No
Bank Shenzhen Branch)
Feiyan
Sino Great Wall
International Engineering 2017.8.3 2019.2.3 No
Co., Ltd., Chen Lve
Sino Great Wall
International Engineering Wanxiang Trust
20,000.00
2017.8.10 2019.2.10 No
Co., Ltd., Chen Lve
Sino Great Wall
International Engineering 2017.8.16 2019.2.16 No
Co., Ltd., Chen Lve
Note to financial statement Page 119
Notes to Financial Statement
Sino Great Wall
International Engineering 2017.8.3 2019.8.3 No
Co., Ltd., Chen Lve
Sino Great Wall
International Engineering 2017.8.10 2019.8.10 No
Co., Ltd., Chen Lve
Sino Great Wall
International Engineering 2017.8.16 2019.8.16 No
Co., Ltd., Chen Lve
Sino Great Wall
International Engineering 2019.9.18 No
Co., Ltd., Chen Lve 2017.9.18
Sino Great Wall
International Engineering 2017.9.25 2019.9.25 No
Co., Ltd., Chen Lve
Sino Great Wall
International Engineering Zhongjiang Trust
30,000.00
2017.9.29 2019.9.29 No
Co., Ltd., Chen Lve
Sino Great Wall
International Engineering 2017.10.13 2019.10.13 No
Co., Ltd., Chen Lve
Sino Great Wall
International Engineering 2017.10.18 2019.10.18 No
Co., Ltd., Chen Lve
Sino Great Wall
China Everbright Bank
International Engineering
Shenzhen Branch 2,500.00
2017.1.11 2018.1.10 No
Co., Ltd., Chen Lve
Sino Great Wall China Everbright Bank
International Engineering Co., Ltd. Shenzhen
10,000.00
2016/1/13 2017/1/12 Yes
Co., Ltd., Chen Lve Branch
Sino Great Wall
Shanghai Pudong
International Engineering
Co., Ltd., Chen Lve, He
Development Bank Co.,
12,000.00
2016/1/13 2017/1/12 Yes
Ltd. Shenzhen Branch
Feiyan
Sino Great Wall
Shanghai Pudong
International Engineering
Co., Ltd., Chen Lve, He
Development Bank Co.,
25,714.00
2016/8/25 2017/8/25 Yes
Ltd. Shenzhen Branch
Feiyan
Sino Great Wall
Baoshang Bank Co., Ltd.
International Engineering
Shenzhen Branch 20,000.00
2016/1/21 2017/1/20 Yes
Co., Ltd., Chen Lve
Guangdong Huaxing
Chen Lve Bank Co., Ltd. Shenzhen
5,000.00
2016/7/29 2017/1/28 Yes
Branch
Sino Great Wall China Zheshang Bank
International Engineering Co., Ltd. Shenzhen
20,000.00
2016/6/21 2017/6/20 Yes
Co., Ltd., Chen Lve Branch
Sino Great Wall
International Engineering
China Bohai Bank Co.,
Co., Ltd., Zhongcheng
Ltd. Shenzhen Branch 10,000.00
2016/4/29 2017/4/28 Yes
Jianye Construction Co.,
Ltd., Chen Lve
Bank of Ningbo Co., Ltd.
Chen Lve
Shenzhen Branch 10,000.00
2016/3/21 2017/3/21 Yes
Sino Great Wall China Guangfa Bank 2016/8/22 2017/8/22 Yes
International Engineering Co., Ltd. Shenzhen 10,000.00
Note to financial statement Page 120
Notes to Financial Statement
Co., Ltd., Chen Lve, He Branch
Feiyan
Industrial and
Chen Lve, He Feiyan Commercial Bank of 2017.4.7 2018.4.7 Yes
60,000.00
China
Chen Lve Bank of Ningbo
10,000.00
2017/4/28 2018/4/28 Yes
Sino Great Wall
International Engineering Industrial International
Co., Ltd., Chen Lve, He Trust 10,000.00
2016.9.30 2018.9.29 Yes
Feiyan
Shenzhen Small & Medium
Guangdong Huaxing
Enterprises Credit Financing 2017.1.6 2019.1.5 No
Bank Shenzhen Branch 10,000.00
Guarantee Group Co., Ltd.
Luzhou City
Sino Great Wall Co., Ltd.
5,000.00
2017.9.30 2018.9.29 No
Commercial Bank
Great Wall Guoxing
Sino Great Wall Co., Ltd. Financial Leasing Co.,
10,889.81
2017.1.18 2020.1.17 No
Ltd.
Chongqing Haier
Chen Lve 2017.5.22 2017.8.22 Yes
Microfinance Co., Ltd. 6,000.00
Bank of Beijing
Chen Lve 2016.12.15 2017.6.14 Yes
Shuangxiu Subbranch 1,000.00
Bank of Beijing
Chen Lve 2016.12.15 2017.6.14 Yes
Shuangxiu Subbranch 1,000.00
Sichuan Jinyu Financing
Bank of Chengdu
Guarantee Co., Ltd., Ye 2016/2/17 2017/2/16 No
Fuqin Subbranch 800.00
Meifu, Yang Qiuhua
5. Fund lending/borrowing for related parties
None
6. Assets Transfer and Debts Reorganization of Affiliated Parties
(1) Sale of subsidiaries
On February 10, 2017, the Equity Transfer Agreement was made and entered into by and
between Sino Great Wall International Engineering Co., Ltd., wholly-owned subsidiary company
of the Company, and Shenzhen Sino Dalue Investment Co., Ltd., and Sino International
transferred 100% equity of Sino Great Wall (Beijing) Investment Fund Management Co., Ltd.
held by it to Sino Dalue. The legal representative and actual controller of Shenzhen Sino Dalue
Investment Co., Ltd. shall be the chairman of the company, Mr. Chen Lve, so this equity transfer
shall constitute a related party transaction.
Note to financial statement Page 121
Notes to Financial Statement
On July 27, 2017, Sino Great Wall International Engineering Co., Ltd., Shenzhen Sino Dalue
Investment Co., Ltd. and Sino Long-term Investment (Beijing) Co., Ltd. executed the
supplementary equity transfer agreement. The International Engineering Co., Ltd. transferred 100%
equities of Sino Great Wall (Beijing) Investment Fund Management Co., Ltd. under its control.
The transfer price was RMB 1 million and the paid-in capital was RMB 1 million. The transfer of
the above equity has completed the change of equity in January 2018.
(2) Selling assets
On March 17, 2018, the Company executed the Supplemental Agreement of the Economic
Compensation Agreement on Subsequent Events of Major Assets Reconstruction of Shenzhen
Victor Onward Textile Industrial Co., Ltd. (hereinafter referred to as the "Supplemental
Agreement‖) with Union Developing Group of China and Mr. Chen Lve. In the Supplemental
Agreement, the content ―In the event the Agreement shall be terminated or cancelled by any
reason whatsoever, the effectiveness of the termination of the Commitment Letter under the
Framework Agreement shall remain the same‖ in Article 5.4 was deleted. Other contents are
consistent with the original announcement.
The period of use of this land lot has expired on April 17, 2017 and cannot be extended upon
the reply from the government authority. Meanwhile, this land lot has been included in the
planning scope of Urban Update Unit of Union Developing Group of China Zone A, Nanshan
District, Shenzhen City. In accordance with the policy related to the urban update and the approval
requirements of government special program of Shenzhen City, this land lot will be transferred
without compensation to the government as the land intended for education during the urban
update. The Commitment Letter objectively cannot be performed in practice.
To protect interests of the listed company and other shareholders and properly solve
subsequent events of the land lot involved in this reorganization, the Framework Agreement on
Subsequent Events of Major Assets Reorganization of Shenzhen Victor Onward Textile Industrial
Co., Ltd. (hereinafter referred to as the Framework Agreement) was executed by and among the
Company, Union Developing Group of China and Mr. Chen Lve on February 22, 2018.
As agreed in the Framework Agreement, Union Developing Group of China or its appointed
third party shall pay the economic compensation of about RMB 100 million to the Company and
the specific amount shall be subject to the assessment result of Pengxin Asset Evaluation
Company. On March 9, 2018, Pengxin Asset Evaluation Company issued the Asset Evaluation
Report (PXZPBZ (2018) No.S012). According to the Asset Evaluation Report, InfoChamp
Systems shall be entitled to the rights and interests of RMB 99.953 million as for the land lot and
Note to financial statement Page 122
Notes to Financial Statement
its ground structures. After friendly negotiation by and among parties, on March 12, 2018, the
Company, Union Developing Group of China and Mr. Chen Lve executed the Economic
Compensation Agreement on Subsequent Events of Major Assets Reconstruction of Shenzhen
Victor Onward Textile Industrial Co., Ltd. (hereinafter referred to as the ―Compensation
Agreement‖) as for economic compensation affairs of the land lot. As agreed in the Compensation
Agreement, Union Developing Group of China shall pay the compensation amount totaling RMB
100 million to the Company; Union Developing Group of China agreed to pay the compensation
amount of RMB 100 million in full at one time to the Company‘s stipulated amount by itself or
via a third party within 15 working days upon execution and effectiveness of the agreement.
Upon completion of this economic compensation, the rights and interests, future benefits,
risks and others of the subject asset shall be granted to and undertaken by Union Developing
Group of China or its specified third party and shall be no longer related to the Company, Mr.
Chen Lve or the Company‘s affiliated party. The Company, Mr. Chen Lve or the Company‘s
affiliated party shall not claim any related rights and interests against Union Developing Group of
China and any party related to the land lot for any reason or via any way or propose any recourse
in any form.
As Union Developing Group of China, China Union Holdings Ltd. and Fuguan Investment
Co., Ltd., the latter two of which are owned by Union Developing Group of China, are the persons
acting in concert, they hold more than 5% of the Company‘s shares in total; Mr. Dong Binggen,
the President of the Company‘s Board of Supervisors shall act as the Chairman of Union
Developing Group of China; Mr. Hu Yongfeng, the Company‘s Director, shall act as the Vice
President of Union Developing Group of China; and this transaction shall constitute the related
transaction.
7. Salary of key management personnel
Amount incurred of current
Items Amount incurred of last period
period
Salary of key management personnel 2,960,600.00 1,696,900.00
(V) Accounts Receivable and Accounts Payable of Affiliated Parties
1. Items Receivable
Ending balance Opening balance
Name of
Affiliated parties Book Bad debt Book Bad debt
items
balance reserve balance reserve
Accounts
receivable
Note to financial statement Page 123
Notes to Financial Statement
Kunwu Jiuding Investment
Management Co. Ltd and the 1,227,613.49 61,380.67 1,609,996.92 80,499.85
affiliated parties
Beijing Baolilai Technology Co.,
160,000.00 16,000.00 160,000.00 8,000.00
Ltd.
2. Items Payable
Ending book Book balance at the beginning of
Name of items Affiliated parties
balance year
Accounts
payable
Qinghai Heyi Commerce Co., Ltd. 3,190,000.00
Shanghai Heyi Supply Chain
Management Co., Ltd. 2,469,164.81 -1,000,000.00
Other accounts
payable
Qinghai Heyi Commerce Co., Ltd. 2,999,209.78
He Sen 4,405,644.43
(VI) Commitments of related parties
None
X Share-Based Payment
None
XI Governmental subsidy
Government subsidies related to income
Amount transferred to the profit or loss Item transferred to
for the period or offset against relevant the profit or loss
cost losses for the period or
Type Amount
Amount offset against
Amount incurred of relevant cost
incurred of last
current period losses
period
250,194.
Job subsidy 89
250,194.89 250,194.89
Awards for steady growth in
159,381.
foreign trade from Beijing 00
159,381.00 159,381.00
Commerce Commission
Beijing special fund for
1,801,55
development of foreign economy 3.00
1,801,553.00 1,801,553.00
and trade
XII Commitments and Contingencies
(I) Important Commitments
1. Important commitments existing on the date of balance sheet
Note to financial statement Page 124
Notes to Financial Statement
The Company has no significant commitments which require separate disclosure.
(1) Unsettled Letter of Guarantee
In order to ensure the successful completion of the Project, the Company obtained a
performance Letter of Guarantee issued by a commercial bank at the request of the
Owner. As of December 31, 2017, the outstanding amount under the Letter of Guarantee
was:
SN Currency Amount (ten thousand Yuan)
1 HKD 10,800.00
2 RMB 90,880.95
3 USD 5,915.93
4 Total amount 107,596.88
(2) The Company has no other significant commitments which require separate
disclosure.
(II) Contingencies
For details of external guarantee, see Note IX, Affiliated Party and Related Guarantees
(IV), related transaction conditions 5 and information on related-party guarantee.
XIII Matters after the Date of Balance Sheet
(I) Important non-adjusting events
1. Major foreign financing
(1) The Company held the 31st meeting of the Company‘s 7th Board of Directors on
March 22, 2018, in which the Proposal on Short-term Financing Bonds to Be Issued by the
Company was approved. The Company was intended to apply for the issuance of short-term
financing bond with the total amount of not greater than RMB 600 million (inclusive) to the
National Association of Financial Market Institutional Investors; the short-term financing
bond intended to be registered and issued has been reviewed and approved by the 31 st meeting
of the Company‘s 7th Board of Directors, which shall be implemented only with approval of
the Company‘s 2nd extraordinary general meeting of 2018 and the approval for application and
registration of the National Association of Financial Market Institutional Investors.
(2) On July 21, 2017, the Company received the Reply for approval on private stock
issuance by Sino Great Wall Co., Ltd. issued by China Securities Regulatory Commission
(hereinafter referred to as the ―CSRC‖, ZJXK (2017) No.1145), which approved that the
private stocks issued by the Company shall not be greater than 86,455,330 new shares [since
the implementation of the profit distribution scheme of 2016, the issuance number of the
Note to financial statement Page 125
Notes to Financial Statement
private stock was changed from 86,455,330 shares (inclusive) to not greater than 86,956,520
shares (inclusive)]. The replay was valid for 6 months since the approval issue date (July 5,
2017).
After obtaining the above approval, the Company has been involved in the promotion of
issuance. However, due to the change of the capital market environment, the Company failed
to complete the private stock issuance within 6 months since the issuance approval date of
China Securities Regulatory Commission (i.e. January 4, 2018). Thus, the approval for the
Company‘s private stock issuance approval by China Securities Regulatory Commission was
null and void upon its expiration.
(3) Sino Great Wall Co., Ltd. (hereinafter referred to as the ―Company‖) held the 28 th
meeting of the Company‘s 7th Board of Directors on January 19, 2018, in which the Proposal
on the Debt Financing Plan to Be Issued by the Company and the Proposal on the Receivables
Debt Financing Plan to Be Issued by the Company were reviewed and approved. To meet the
demand of the Company‘s production and operation working capital and widen the financing
channel, the Company is intended to list the bond financing plan (hereinafter referred to as the
―Bond Financing Plan‖) in Beijing Financial Asset Exchange (hereinafter referred to as the
―Beijing Financial Asset Exchange‖) as per provisions in the Business Guide for Bond
Financing Plan of Beijing Financial Asset Exchange and other related laws, regulations and
specifications. The affairs of the bond financing plan were reviewed and approved by the
28th meeting of the Company’s 7th Board of Directors. The plan shall be implemented
only after review and approval by the Company’s 1st extraordinary general meeting in
2018 and the registration by the Beijing Financial Asset Exchange.
(4) On January 19, 2018, Sino Great Wall Co., Ltd. (hereinafter referred to as the
―Company‖) held the 28th meeting of the Company‘s Board of Directors, in which the
Proposal on Providing Guarantee to Credit Granting and Other Financial Business of
Fully-owned Subsidiary Companies and Holding Subsidiary Companies was reviewed and
approved. The Company agreed to provide guarantee to the comprehensive credit granting and
other financial business of applying no more than RMB 10 billion to the financing institutions
and other institutions by its fully-owned and holding subsidiary companies.
(II) Condition of profit distribution
As approved by the 32nd meeting of the Company‘s 7th Board of Directors, 1,698,245,011
shares of the existing share capital shall be used as the capital base, and the bonus
dividend RMB 0.40 (tax included) shall be distributed per 10 shares. No bonus shares
Note to financial statement Page 126
Notes to Financial Statement
shall be transferred and no capital reserve shall be used for increasing the share capital.
(III) Sales return
None
(IV) Assets and disposal group categorized as held-for-sale
1. Held-for-sale assets
None
2. Disposal group categorized as held-for-sale:
None
(V) Description for other events after the balance sheet date:
1. Sale of subsidiary company
(1) Shenzhen Yatian Decoration Design Engineering Co., Ltd.
On December 7, 2017, Sino Great Wall International Engineering Co., Ltd. (hereinafter
referred to as the ―International Engineering‖, the subsidiary company of the Company)
the Shenzhen Bojie Investment Holding Co., Ltd., Wan Duanlin and Sino Global (Beijing)
Decoration Engineering Co., Ltd. signed the agreement on transfer of 100% equities of
Shenzhen Yatian Decoration Design Engineering Co., Ltd. The equity change affairs
concerning the above equity transfer affairs have been completed in January 2018.
(2) Sino Great Wall (Beijing) Investment Fund Management Co., Ltd.
On July 27, 2017, Sino Great Wall International Engineering Co., Ltd. (hereinafter
referred to as the ―International Engineering‖, the Company‘s subsidiary company),
Shenzhen Sino Dalue Investment Co., Ltd. and Sino Long-term Investment (Beijing) Co.,
Ltd. executed the supplementary equity transfer agreement. The International Engineering
transferred
100% equities of Sino Great Wall (Beijing) Investment Fund Management Co., Ltd. under
its control. The transfer price was RMB 1 million and the paid-in capital was RMB 1
million. The transfer of the above equity has completed the change of equity in January
2018.
2. Acquisition of equity
(1) On December 12, 2017, Sino Great Wall Medical Investment Management Co., Ltd.
(the subsidiary company of the Company) and relevant shareholders of Wuhan Huaye
Medicine Co., Ltd. executed the Equity Transfer Agreement. The asset completion and
equity change procedure shall be finished in 2018. Upon completion of change, the
Note to financial statement Page 127
Notes to Financial Statement
Company obtained 51% controlling interests of Wuhan Huaye Medicine Co., Ltd..
(2) On February 12, 2018, the Company, the UPL (Laos) Co., Ltd. (hereinafter referred
to as the ―UPL Laos‖, the ―Target Company‖ or ―Party B‖) and the UPL (MALAYSIA)
SDN. BHD. (hereinafter referred to as ―Party C‖) executed the Equity Cooperation
Agreement on the Project of Dongphosy Special Economic Zone, Vientiane, Laos as for
the 30% equities purchased from UPL Laos by the Company. The purchase price of the
equity was RMB 30 million (including the case of RMB 10 million and the construction
loaning of RMB 20 million).
3. Establishment of new subsidiary company
(1) In January 2018, Sino Great Wall International Engineering Co., Ltd. contributed
51% and Shenzhen Shenzhouhong International Soft Decoration and Art Co., Ltd.
contributed 49% to jointly establish the Sino Great Wall Engineering Management
(Shenzhen) Co., Ltd. with the registered capital of RMB 2 million;
(2) In January 2017, Sino Great Wall Co., Ltd. contributed 62.23% and Lingbao
Stated-owned Assets Operation Co., Ltd. contributed 37.77% to jointly establish the
Lingbao City Sino Great Wall Medical Management Co., Ltd. with the registered capital
of RMB 148.48 million;
(3) In February 2018, Sino Great Wall Co., Ltd. contributed 75% and Beijing
Zhongtou Huayi Investment Co., Ltd. contributed 25% to jointly establish Sino Great
Wall Medical and Well-being Industrial (Hunan) Investment Co., Ltd. with the registered
capital of RMB 100 million;
(4) In February 2018, Sino Great Wall International Engineering Co., Ltd. contributed
100% to establish Sino Great Wall Hebei Xiongan Engineering Co., Ltd. with the
registered capital of RMB 100 million;
(5) In March 2018, Sino Great Wall Co., Ltd. contributed 80% and the Wuchuan City
People‘s Hospital contributed 20% to jointly establish Wuchuan City Sino Great Wall
People‘s Hospital with the registered capital of RMB 217 million;
(6) In March 2018, Sino Great Wall Co., Ltd. contributed 90% and Renhuai City
Maotai-flavor Liquor Industrial Development Co., Ltd. (Guizhou Province) contributed
10% to jointly establish Renhuai City Sino Great Wall Wine Culture Expo Park
Development Co., Ltd. with the registered capital of RMB 245.09 million;
4. Cancellation of subsidiary company
In January 2018, the Company handled the industrial and commercial cancellation
Note to financial statement Page 128
Notes to Financial Statement
formalities for Bozhou Xieying Solar Power Generation LLC, Bozhou Zhaosheng
Agricultural Technology LLC and Qian‘an Shenzhou Solar Power Generation Co., Ltd.,
the three of which were under the control of the Company.
XIV Other Important Matters
(I) Correction of early accounting error
1. Retrospective restatement
The company does not have correction of accounting error with retrospective
restatement in the current reporting period.
2. Prospective application
The company does not have correction of accounting error with prospective
application it in the current reporting period.
(II) Debt restructuring
None
(III) Replacement of assets
1. Exchange of non-monetary assets
None
2. Replacement of other assets
None
(IV) Pension plan
None
(V) Discontinuing operation
None
(VI) Segment Information
1. Determination Basis and Accounting Policies of Report Segment
Accounting Policies of Report Segment:
There is no related business among the domestic construction and decoration section, the
overseas construction and decoration section and the medical section, thus there is no
price transfer among the various divisions.
The medical section business is implemented by the company and the independent
Note to financial statement Page 129
Notes to Financial Statement
subsidiary company. The account sets of the overseas construction and decoration
section business are set up according to the construction areas of the projects under
construction for accounting. There are 8 major account sets respectively for Qatar,
Kuwait, Cambodia, Sri Lanka, Malaysia, Burma, Maldives and Saipan for
accounting. There is no situation in which the costs indirectly attributing to the
various divisions need to be shared. The business data of the overseas construction
and decoration section is also composed of the financial data of the above 8 major
project account sets.
2. Financial Information of Report Segment
Note to financial statement Page 130
Notes to Financial Statement
Domestic construction and decoration Overseas construction and decoration
Medical section Set off Total
section section
Items
Amount of current Amount of last Amount of Amount of last Amount of Amount of last Amount of Amount of last Amount of current Amount of last
period period current period period current period period current period period period period
I. Operating 3,165,213,312.5 132,427,255.4 4,664,999,117.1
4,055,226,176.75 1,418,192,694.17 2,747,112,360.43 81,593,110.43 -437,640,812.14 6,497,124,980.52
income 7 8 7
Including: Income
3,165,213,312.5 132,427,255.4 4,664,999,117.1
from external 4,055,226,176.75 1,418,192,694.17 2,747,112,360.43 81,593,110.43
7 8 7
transaction
Income from
transaction between -437,640,812.14 6,497,124,980.52 -
segments
2,216,759,318.3 3,459,377,744.6
II. Operating cost 3,376,128,111.31 1,184,945,928.21 1,850,501,055.12 97,366,145.37 57,672,498.15 -437,640,812.14 4,886,354,499.66
0 6
Including: Cost of 2,216,759,318.3 3,401,705,246.5
3,376,128,111.31 1,184,945,928.21 1,850,501,055.12 97,366,145.37
external transaction 0 1
Cost of transaction
-437,640,812.14 4,886,354,499.66 -
between segments
III Asset
233,324,136.18 74,286,638.56 92,834,249.44 95,207,208.36 805,778.49 518,043.19 -3,896,559.25 323,067,604.86 170,011,890.11
Impairment Loss
IV Depreciation
costs and 8,485,049.12 3,004,474.27 2,669,193.11 30,488.71 5,433,722.50 19,316.10 2,076,834.60 -3,794,638.67 18,664,799.34 6,848,917.76
amortization charges
V Total profit -3,420,438.20 -304,963,110.16 616,507,925.74 864,476,659.76 396,068.89 3,583,802.03 49,753,168.05 1,759,594.94 663,236,724.48 561,337,756.68
VI Expense of
92,409.54 -10,207,854.94 10,327,779.55 99,038,519.27 1,899,263.79 1,703,401.20 -397,576.47 1,289,203.78 11,921,876.40 89,244,861.75
income tax
VII Net profit -3,512,847.74 -294,755,255.22 606,950,602.75 765,438,140.48 -1,503,194.90 1,880,400.83 49,380,281.33 470,391.16 651,314,841.45 472,092,894.93
10,947,559,949.2 3,044,412,477.4 220,153,409.3 7,986,178,961.6
VIII Total assets 16,528,958,963.06 4,411,681,112.49 121,748,481.08 93,583,646.64 6,127,541,946.13 21,254,377,131.56
4 5 8 3
IX Total 1,752,059,212.3 220,153,409.3 6,155,696,089.0
16,505,938,299.90 7,089,471,639.73 4,414,287,247.85 136,402,672.37 -5,396,411,791.68 2,822,237,435.41 15,743,967,165.45
liabilities 4 8 4
(VII) Others
Note to financial statement Page 131
Notes to Financial Statement
Sino Great Wall International Engineering Co., Ltd. concluded and signed the Contract on SOHO Property Cooperation of Ruian Chengzhonghui with
Chengdu Xianglong Real Estate Development Co., Ltd. on December 16, 2016, agreeing that Chengdu Xianglong Real Estate Development Co., Ltd. shall
entrust Sino Great Wall International Engineering Co., Ltd. to sell (exclusive sales) the property of the office building located at 7-28 Floors, Building 1
(SOHO), Ruian Chengzhonghui which was developed by Chengdu Xianglong Real Estate Development Co., Ltd., in which, Chengdu Xianglong Real Estate
Development Co., Ltd. may obtain the cooperative profit of RMB 230,090,400.00 and Sino Great Wall International Engineering Co., Ltd. obtained the
actual selling price and the premium of the cooperative profit and paid relevant taxes while Sino Great Wall International Engineering Co., Ltd. paid 10% of
the cooperative profit, namely RMB 23,090,400.00, as the performance bond. On July 12, 2017, Chengdu Xianglong Real Estate Development Co., Ltd.
issued the Notification of Termination of Contract to Sino Great Wall International Engineering Co., Ltd. But because of failure of the negotiation, Chengdu
Xianglong Real Estate Development Co., Ltd. initiated a civil action to the Intermediate People's Court of Chengdu Municipality, Sichuan Province in
connection with the Cooperation Contract in question on August 30, 2017, asking for a judgment to terminate the above-mentioned contract without
returning the performance bond. Sino Great Wall International Engineering Co., Ltd. initiated a civil action to the Higher People's Court of Sichuan Province
to ask for an order to continue the performance of the Contract and request Chengdu Xianglong Real Estate Development Co., Ltd. to compensate Sino Great
Wall International Engineering Co., Ltd. for RMB 10,000,000.00 to cover the loss caused by Xianglong‘s breach of contract. However, since the case-filing
date for the case that Sino Great Wall International Engineering Co., Ltd. should be the plaintiff was later than that for the case that Chengdu Xianglong Real
Estate Development Co., Ltd. should be the plaintiff, the Higher People's Court of Sichuan Province decided to transfer this case to the Intermediate People's
Court of Chengdu Municipality, Sichuan Province to handle it. This case now is still appealing at the first trial. The company has adopted property
preservation measures.
Note to financial statement Page 132
Notes to Financial Statement
XV Notes to Main Items in the Financial Statements of the Parent Company
(I) Accounts receivable
1. Classified Disclosure of Accounts Receivable
Ending balance Opening balance
Book balance Bad debt reserve Book balance Bad debt reserve
Type Book Book
Proportion Withdrawal value Proportion Withdrawal value
Amount Amount Amount Amount
(%) proportion (%) (%) proportion (%)
Accounts Receivable with Significant Single
Amount and Having Bad Debt Reserve Withdrawn
Independently
Accounts receivable with bad debt reserve
6,670.0
withdrawn as per the portfolio of credit risk 100.00 334.00 5.01 6,336.00
0
characteristics
Accounts receivable with insignificant single
amount, but having bad debt reserve withdrawn
separately
6,670.0
Total 100.00 334.00 5.01 6,336.00
0
Note to financial statement Page 133
Notes to Financial Statement
2. Receivables withdrawn, recovered or reversed in this period
The amount of bad debt reserve withdrawn in the current period was RMB 0.00;
and the amount of bad debt reserve recovered or transferred back in the current
period was RMB 334.00.
Note to financial statement Page 134
Notes to Financial Statement
(II) Other accounts receivable
1. Classified Disclosure of Other Accounts Receivable:
Ending balance Opening balance
Book balance Bad debt reserve Book balance Bad debt reserve
Type
Withdrawal Book value Withdrawal Book value
Proportion Proportion
Amount Amount proportion Amount Amount proportion
(%) (%)
(%) (%)
Other accounts
receivables that are
individually significant
and for which
individual bad debt
reserves are withdrawn
Other accounts
receivable with bad
debt reserve withdrawn 8,215,209.1 3,590,967,483.2 782,721.3
as per the portfolio of
3,599,182,692.34 100
2
0.23 1,672,982,763.29 100.00
1
0.05 1,672,200,041.98
2
credit risk
characteristics
Other accounts
receivable with
insignificant single
amount and having bad
debt reserve withdrawn
separately
8,215,209.1 3,590,967,483.2 782,721.3
Total 3,599,182,692.34 100.00
2
0.23 1,672,982,763.29 100.00
1
1,672,200,041.98
2
Note to financial statement Page 135
Notes to Financial Statement
Other accounts receivable with bad debt reserve withdrawn by means of account
age analysis in the portfolios:
Ending balance
Account age
Other accounts receivable Bad debt reserve Withdrawal proportion (%)
Within 1 year 135,463,984.45 6,773,199.22 5.00
1-2 years 14,420,098.95 1,442,009.90 10.00
2-3 years
More than 3 years
3-4 years
4-5 years
More than 5 years
Total 149,884,083.40 8,215,209.12 3,628,861,127.88
Description about the basis for determining the portfolio:
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 7,432,487.81 and the
amount of bad debt reserves recovered or reversed in current period is RMB 0.
3. Classification of Other Accounts Receivable by Nature
Nature of accounts Ending book balance Book balance at the beginning of year
Intercourse funds of the
3,506,887,491.95 1,657,328,337.13
organization
Pretty Cash 142,590.46 1,272,085.13
Guarantee, deposit 92,152,609.93 14,382,341.03
Others
Total 3,599,182,692.34 1,672,982,763.29
4. Top 5 Owing Parties Classified by the Ending Balance of Other Accounts
Receivable:
Proportion in
Nature of Account Bad debt reserve
Unit name Ending balance total receivables
accounts age Ending balance
(%)
Sino Great Wall International Related 3,327,283,868.37 Within
Engineering Co., Ltd. party dealing one year
92.45
Wuhan Commercial Workers Guarantee 1－2
Hospital LLC deposit
107,800,000.00 3
years
Management Committee of
Guarantee Within
Fuping Hi-Tech Industrial
deposit
52,000,000.00
one year
1.44 2,600,000.00
Development Zone
Yanjin County Sino Great Wall Related Within
Construction Co., Ltd. party dealing
40,000,000.00
one year
1.11 2,000,000.00
Sino Great Wall Infrastructure Related Within
Investment Co., Ltd. party dealing
11,359,740.57
one year
0.32
3,538,443,608.9
Total 98.32 4,600,000.00
4
Note to financial statement Page 136
Notes to Financial Statement
5. Accounts Receivable Involving Governmental Subsidy
None
6. Other accounts receivable of which the recognition is terminated due to
transfer of financial assets
None
7. Amount of assets and liabilities formed through transfer of other receivables
and continuous involvement:
None
8. Other description: None
(III) Long-term Equity Investments
Ending balance Opening balance
Items Depreci Deprecia
Book balance ation Book value Book balance tion Book value
reserve reserve
Investments 3,311,211,536.66 3,311,211,536.66
in 3,176,451,536.66 3,176,451,536.66
Subsidiaries
Investments
in jointly-run
enterprises
and joint
ventures
Total 3,311,211,536.66 3,311,211,536.66 3,176,451,536.66 3,176,451,536.66
1. Investments in Subsidiaries
Amount Depreciation Ending
Amount increased decreased reserve balance of
Invested units Opening balance Ending balance
of current period of current withdrawn of depreciation
period current period reserve
Sino Great
Wall
3,079,451,536.6 3,079,451,536.6
International
6 6
Engineering
Co., Ltd.
Wuhan
Commercial
97,000,000.00 97,000,000.00
Workers
Hospital LLC
Changzhi
Shenzhou 10,000,000.00 10,000,000.00
Laodingshan
Note to financial statement Page 137
Notes to Financial Statement
Amount Depreciation Ending
Amount increased decreased reserve balance of
Invested units Opening balance Ending balance
of current period of current withdrawn of depreciation
period current period reserve
Industrial Co.,
Ltd.
Xiangfen
County
Taoshan 10,000,000.00 10,000,000.00
Construction
Co., Ltd.
Sino Great
Wall Medical
Investment 5,000,000.00 5,000,000.00
Management
Co., Ltd.
Sino Zhigu
Industrial
109,760,000.00 109,760,000.00
(Yueyang)
Co., Ltd.
3,176,451,536.6 3,311,211,536.6
Total 134,760,000.00
6 6
Note to financial statement Page 138
Notes to Financial Statement
2. Investments in jointly-run enterprises and joint ventures
None
Note to financial statement Page 139
Notes to Financial Statement
(IV) Operating Income and Operating Cost
Amount incurred of current period Amount incurred of last period
Items
Income Cost Income Cost
Main businesses
Other businesses 240,558.55 1,482.50 238,048.64
Total 240,558.55 1,482.50 238,048.64
Other descriptions: None
(V) Investment Yield
Amount incurred of Amount incurred of
Items
current period last period
Gain on long-term equity investments subject to accounting
100,000,000.00
with cost method
Investment incomes obtained from the disposal of the
396,197.49
disposal group that constitutes the business
Total 100,000,000.00 396,197.49
XVI Supplementary Data
(I) Schedule of Non-recurring Gain or Loss of the Current Period
Items Amount Description
Gain or loss on disposal of non-current assets (including the written-off part
-150,250.00
with asset depreciation reserve withdrawn)
Tax returns and exemption with approval exceeding one's authority or without
formal approval document
Governmental subsidy recorded in the gain or loss of the current period
(excluding the governmental subsidy closely related to enterprise‘s businesses, 2,211,128.89
and enjoyed according to national uniform standard quota or fixed quantity)
Fund possession cost from non-financial business included in current profits and
losses statement
Entitled income generated from fair value of net identifiable assets of invested
company when the investment cost obtained by the enterprise from subsidiaries,
affiliated enterprises and joint ventures is less than the obtained investment.
Profit or loss from exchange of non-monetary assets
Profit or loss of entrusting others to invest or managing assets
Provision for asset impairment withdrawn due to force majeure factors, such as
suffering from natural disaster
Profit or loss from debt restructuring
Note to financial statement Page 140
Notes to Financial Statement
Items Amount Description
Enterprise restructuring charge, such as expenditure on staffing, integration cost.
Profit or loss of part exceeding fair value generated from transaction with
unreasonable transaction price
Subsidiaries‘ net gain or loss arising from business combination under the same
control, and from the beginning of period to the very period of the date of
combination
Profit or loss generated from contingencies unrelated to normal business of
company
Profit or loss of fair value change generated from financial assets for trading and
transaction financial liabilities, and investment income obtained from disposing
financial assets held for trading, transaction financial liabilities and financial
assets available for sale, except for effective hedging business related to normal
business of company
Reversal of provision for receivable impairment with independent impairment
test
Profit or loss obtained from entrust loans
Profit or loss generated from fair value change of investment real estate whose
subsequent measurement is conducted with fair value model
Influences on current profit and loss of one-time adjustment to current profit and
loss statement pursuant to the laws and regulations on tax and accounting
Trustee fee income obtained from entrusted operation
Other non-operating income and expenditure except for the above-mentioned
items 2,798,978.14
Other gain or loss items meeting the definition of non-recurring gain or loss
Amount influencing the income tax
-704,594.91
Amount affected of minor shareholders‘ equity (after-tax)
Total
4,155,262.12
(II) Net Rate of Return on Assets and Earnings per Share:
Weighted average net Earnings per share (Yuan)
Profit in the reporting period rate of return on assets Basic earnings per Diluted earnings
(%) share per share
Net profit attributed to the Company‘s
common stock holders 19.35 0.22 0.22
Net profit attributed to the Company‘s
common stock holders after deduction of
19.26 0.22 0.22
non-recurring gain or loss
Sino Great Wall Co., Ltd.
(Official seal)
April 23 , 2018
Note to financial statement Page 141
