Sino Great Wall Co., Ltd. 2018 Annual Report
Sino Great Wall Co., Ltd.
2018 Annual Report
April 2019
1
Sino Great Wall Co., Ltd. 2018 Annual Report
I. Important Notice, Table of Contents and Definitions
The Board of Directors and the directors, Supervisory Committee and
supervisors and Senior Executives of the Company hereby warrant that at the
year, there are no misstatement, misleading representation or important
omissions in this report and shall assume joint and several liability for the
authenticity, accuracy and completeness of the contents hereof.
Mr. Chen Lue, The Company leader, Ms. Yang Chunling, Chief Financial
Officer and the person in charge of the accounting department (the person in
charge of the accounting) hereby confirm the authenticity and completeness of
the financial report enclosed in this annual report.
Directors apart from the below mentioned have attended the Meeting for
annual report deliberation:
Absent Director Name Absent Director Title Absent Reason Attorney Name
Jiang Chongguang Independent Director Work Arrangements Yu Haichun
Due to the inability to obtain sufficient and appropriate audit evidence as
the basis for expressing audit opinions on the financial statements, Reanda
Public Certified Accountants (LLP) issued an audit report that could reservation
opinions on the company. The board of directors and the board of supervisors of
the Company have made detailed explanations on relevant matters, to which
investors shall pay attention.
Any plans for the future and other forward-looking statements mentioned
2
Sino Great Wall Co., Ltd. 2018 Annual Report
in this Report shall Not be considered as absolute promises of the Company to
investors. Therefore, investors are kindly reminded to pay attention to possible
investment risks.
Possible risks faced by the Company and countermeasures have been
explained in “Operating Performance Discussion and Analysis” herein, which
investors are kindly reminded to pay attention to.
The Company has no plan of cash dividends carried out, bonus issued and
capitalizing of common reserves either.
3
Sino Great Wall Co., Ltd. 2018 Annual Report
Table of Contents
I. Important Notice, Table of Contents and Definitions ...........................................................................................................................2
II. Basic Information of the Company and Financial index .....................................................................................................................6
IV. Management’s Discussion and Analysis ..........................................................................................................................................16
V. Important Events ...............................................................................................................................................................................44
VI. Change of share capital and shareholding of Principal Shareholders ............................................................................................148
VII. Situation of the Preferred Shares ..................................................................................................................................................156
VIII. Information about Directors, Supervisors and Senior Executives ...............................................................................................157
IX. Administrative structure ................................................................................................................................................................171
X. Specifications on Company Securities ............................................................................................................................................183
XI. Financial Statements .....................................................................................................................................................................184
XII. Documents Available for Inspection ............................................................................................................................................355
4
Sino Great Wall Co., Ltd. 2018 Annual Report
Definition
Terms to be defined Refers to Definition
Company Law Refers to Company Law of the People’s Republic of China
Securities Law Refers to Securities Law of the People’s Republic of China
“CSRC” Refers to China Securities Regulatory Commission
Company, The Company, Sino Great Wall Refers to Sino Great Wall Co., Ltd.
Sino International Refers to Sino Great Wall International Engineering Co., Ltd.
Reanda Refers to Reanda Certified Public Accountants LLP
SSE Refers to Shenzhen Stock Exchange
Shenzhen Regulatory Authority Refers to Shenzhen Regulatory Authority of China Securities Regulatory Commission
Reporting period Refers to January 1, 2018 to December 31, 2018
Wuhan Commercial Worker Hospital Refers to Wuhan Commercial Worker Hospital Co., Ltd.
Union Holdings Refers to Union Holdings Co., Ltd.
Rich Crown Investment Refers to Rich Crown Investment Co., Ltd.
Baden-Baden Hospital Refers to Acura Kliniken Baden-Baden GmbH
5
Sino Great Wall Co., Ltd. 2018 Annual Report
II. Basic Information of the Company and Financial index
I．Company Information
Stock abbreviation: Sino Great Wall; Sino-B Stock code： 000018; 200018
Change of stock Abbreviation
Nil
（If any）
Stock exchange for listing Shenzhen Stock Exchange
Name in Chinese 神州长城股份有限公司
Chinese Abbreviation 神州长城
English name (If any) Sino Great Wall Co., Ltd.
English Abbreviation (If any) Sino Great Wall; Sino-B
Legal Representative Chen Lue
Registered address 26 Kuipeng Road, Kuiyong Town, Longgang District, Shenzhen
Postal code of the Registered
518119
Address
Office Address Sino Great Wall Building, No.3 Jinxiu Street,Economic Technology Development Zone , Beijing
Postal code of the office
100176
address
Internet Web Site www.sgwde.com
E-mail 000018sz@sina.com
II. Contact person and contact manner
Board secretary Securities affairs Representative
Name Yang Chunling Sun Yu
Sino Great Wall Building, No.3 Jinxiu Sino Great Wall Building, No.3 Jinxiu
Contact address Street,Economic Technology Development Street,Economic Technology Development
Zone , Beijing Zone , Beijing
Tel 010-89045855 010-89045855
Fax 010-89045856 010-89045856
E-mail 1208806865@qq.com 000018sz@sina.com
III. Information disclosure and placed
Newspapers selected by the Company for information Securities Times and Hongkong Commercial Daily.
6
Sino Great Wall Co., Ltd. 2018 Annual Report
disclosure
Internet website designated by CSRC for publishing
http: // www.cninfo. com. cn
the Annual report of the Company
The place where the Annual report is prepared and Securities Department, Sino Great Wall Building, No.3 Jinxiu Street,
placed Economic Technology Development Zone, Beijing
IV. Changes in Registration
Organization Code 91440300618801483A
Changes in principal business activities
Nil
since listing (if any)
Changes is the controlling shareholder in
Nil
the past (is any)
V. Other Relevant Information
CPAs engaged
Name of the CPAs Reanda Certified Public Accountants LLP
11/F, Building E, Sino-Ocean International, No.210, Ciyuansi Beili, Chaoyang District,
Office address：
Beijing, PRC
Names of the Certified Public
Wang Xinyu, Zhou Zhonghua
Accountants as the signatories
The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.
√ Applicable □Not applicable
Sponsor Name Office address Representatives Period of supervision and guide
6/F, A Unit, Fengming
Huatai United Securities Co., International Building, No.22, September 27, 2015 to
Wu Wenmin, Fang Yuhui
Ltd. Fengsheng Hutong, Xicheng December 31, 2018
District, Beijing
The Financial advisor performing persist ant supervision duties engaged by the Company in the reporting period
√ Applicable □Not applicable
Advisor Name Office address Representatives Period of supervision and guide
6/F, A Unit, Fengming
Huatai United Securities Co., International Building, No.22, September 27, 2015 to
Wu Wenmin, Fang Yuhui
Ltd. Fengsheng Hutong, Xicheng December 31, 2018
District, Beijing
VI. Summary of Accounting data and Financial index
May the Company make retroactive adjustment or restatement of the accounting data of the previous years
7
Sino Great Wall Co., Ltd. 2018 Annual Report
□Yes √No
Changed over last year
2018 2017 2016
(%)
Operating revenue 2,426,987,687.02 6,497,124,980.52 -62.65% 4,664,999,117.17
Net profit attributable to the
shareholders of the listed company -1,704,739,736.40 380,090,990.82 -548.51% 473,661,862.67
(Yuan)
Net profit after deducting of
non-recurring gain/loss attributable
-1,411,440,495.34 377,087,197.69 -474.30% 470,274,602.37
to the shareholders of listed
company (Yuan)
Net cash flow generated by
827,879,055.45 -1,781,868,618.65 -146.46% -1,687,875,813.94
business operation, net (Yuan)
Basic earning per share
-1.004 0.220 -560.45% 0.28
(Yuan/Share)
Diluted gains per share
-1.004 0.220 -560.45% 0.28
(Yuan/Share)
Net asset earning ratio (%) -142.85% 19.35% -162.20% 31.18%
End of Changed over last year
End of 2018 End of 2016
2017 (%)
Gross assets 9,603,455,934.89 11,667,845,186.30 -17.69% 7,986,178,961.63
Net assets attributable to
shareholders of the listed company 235,202,473.51 2,151,482,467.52 -89.07% 1,777,948,117.49
(Yuan)
VII. The differences between domestic and international accounting standards
1．Simultaneously pursuant to both Chinese accounting standards and international accounting standards
disclosed in the financial reports of differences in net income and net assets
□ Applicable√ Not applicable
Non-existence
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards.
□ Applicable√Not applicable
Non-existence
8
Sino Great Wall Co., Ltd. 2018 Annual Report
VIII. Main Financial Index by Quarters
Unit: Yuan
First quarter Second quarter Third quarter Fourth quarter
Operating income 923,442,740.92 663,528,834.32 672,083,613.81 167,932,497.97
Net profit attributable to the
shareholders of the listed 218,523,628.75 -74,524,173.03 -118,516,821.76 -1,730,222,370.36
company
Net profit after deducting of
non-recurring gain/loss
56,977,615.63 -65,023,592.77 -144,157,168.17 1,284,719,983.995
attributable to the shareholders
of listed company
Net Cash flow generated by
809,676,459.22 288,487,906.41 189,148,952.32 459,434,262.506
business operation
Whether significant variances exist between the above financial index or the index with its sum and the financial index of the
quarterly report as well as semi-annual report index disclosed by the Company.
□ Yes √No
IX. Items and amount of non-current gains and losses
√Applicable □Not applicable
Unit: Yuan
Items Amount (2018) Amount (2017) Amount (2016) Notes
Non-current asset disposal gain/loss
(including the write-off part for which -1,181,511.77 -150,250.00 -564,833.40
assets impairment provision is made)
Government subsidy recognized in current
gain and loss (excluding those closely
105,536,702.00 2,211,128.89 108,121.33
related to the Company’s business and
granted under the state’s policies)
Profit due to the situation where
investment costs for the company to
obtain subsidiaries, associates and joint
1,783,284.99
ventures are lower than the enjoyable fair
Value of identifiable net assets of
investees when making investments
Profit/loss on fair value changes of
transactional financial assets and liabilities
& investment profit on disposal of 443,065.98
transactional financial assets and liabilities
as well as financial assets available for
9
Sino Great Wall Co., Ltd. 2018 Annual Report
sale, except for effectively hedging
business related to normal business
operations for the Company
Other non-operating income and
expenditure except for the aforementioned -397,654,450.87 1,444,308.74 5,296,814.65
items
Less: Amount of influence of income tax 501,394.50 3,668,000.60
Influenced amount of minor
-19.58 11,192.65
shareholders’ equity (after tax)
Total -293,299,241.06 3,003,793.13 3,387,260.30 --
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on
information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and
its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure
for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as
recurring gains and losses, it is necessary to explain the reason.
□ Applicable√ Not applicable
None of Non-recurring gain /loss items recognized as recurring gain /loss/items as defined by the information
disclosure explanatory Announcement No.1- Non-recurring gain/loss in the report period.
10
Sino Great Wall Co., Ltd. 2018 Annual Report
11
Sino Great Wall Co., Ltd. 2018 Annual Report
III. Business Profile
Ⅰ.Main Business the Company is Engaged in During the Report Period
Whether the company needs to comply with the disclosure requirements of the particular industry
Yes
Civil Engineering Construction
The company shall comply with disclosure requirements in Shenzhen Stock Exchange Industry Information Disclosure Guidelines
No. 7-the Listed Company Engagement in Civil Engineering Construction Business
(I) Company main business scope and business model
Within the report period, the core business of Sino Great Wall is the engineering construction and medical treatment and health
industry investment and management. The engineering construction mainly includes the international EPC and domestic PPP
business. The medical treatment and health industry investment and management mainly comprises the hospitals and medical
treatment operation management through engagement in the industry through several ways including acquisition of existing hospitals,
construction of new hospitals as well as building and investing the hospital PPP project, etc. At present, the company business covers
the house building, roads and bridges, power and chemical industry as well as medical treatment and health, etc. among many
countries and regions in Southeast Asia, the Middle East, South Asia and Africa, etc.
The company mainly engages in the foreign engineering construction through EPC, namely contracting the whole process or
several phases among the construction project design, purchase, construction and trail operation, etc. through integrating the
high-quality resources at home and abroad. For the domestic engineering construction, the company mainly adopts PPP mode,
namely the project operation mode through cooperation of the governmental and social capital. Under such mode, the government
will select the social capital with the investment and operation management capacity through the competitive ways and both parties
shall enter into the contract subject to the equality-based consultation principle, under which, the social capital shall provide public
services and the government shall pay the consideration against the social capital based on the public service achievement assessment
result.
The Company business includes the project development, financing, design, procurement and construction, etc. and it will also
participate in investment in and provision of operation services for high-quality projects with good development prospect.
(II) Engineering construction industry macro-situation, competition pattern and position in industry
Foreign engineering: with the comprehensive advance of the “One Belt and One Road” initiative, the Company’ s contracted
engineering projects industry for other countries is in the good growth momentum wholly with continuous expansion of the industry
scale. During the reporting period, the company was awarded with the 138th medal in the “2018 ENR Top 250 International
Contractors” (ranked 39th among Chinese enterprises and 1st among Chinese private enterprises). According to statistics from the
Ministry of Commerce and the State Administration of Foreign Exchange, China's industry-wide foreign direct investment in 2018
was USD 129.83 billion, with a year-on-year increase of 4.2%. Turnover from overseas contracted projects reached USD 169.04
billion, with a year-on-year increase of 0.3%. The turnover of overseas contracted projects in 63 countries and regions along the “the
Belt and Road” was USD 89.33 billion, accounting for 52% of the total for the same period. The Chinese government has continued
to push forward the construction of "the Belt and Road" and has strengthened strategic docking with countries and regions along the
line. It has embraced a broader cooperation space in infrastructure construction, metallurgical engineering, equipment manufacturing
and other fields, and created more market opportunities for the company’s overseas business expansion.
(III) Company’s qualification
At present, the Company possesses the construction certificates such as Constructional Engineering Construction General
Constructing-Grade I, Highway Engineering General Constructing-Grade I; Municipal utility construction General
12
Sino Great Wall Co., Ltd. 2018 Annual Report
Constructing-Grade I; Urban and road lighting engineering Constructing-Grade I；Environmental engineering Constructing-Grade I;
Design and construction of architectural decoration Constructing-Grade I, Electromechanical Equipment Installation Project
Specialized Contracting-Grade I, Construction Curtain Wall Project Specialized Contracting- Grade I, Fire Control Facilities Project
Specialized Contracting-Grade I, Possessing 10 first-class qualifications of professional contracting for engineering of waterproof,
anti-corrosion and insulation; meanwhile, possesses two class-a special-grade design qualifications of building curtain wall
engineering design and architectural decoration engineering design; in addition, possesses 5 second-class qualifications, including the
second-class general contracting qualification of construction of water conservancy and hydropower projects, the second-class of
general contracting of metallurgy engineering construction, the second-class qualification of professional contracting of steel structure
engineering, the second-class qualification of professional contracting of electronic and intelligent engineering and the second-class
general contracting qualification of mechanical and electrical engineering construction, and possesses the third-class general
contracting qualification of railway construction, the specialized contracting qualification for special projects and so forth
qualifications. The scope covers architecture, highways, railways, municipal utilities, water conservancy and hydropower,
petrochemical, electric power and other specialties. For the overseas market, the Company has always been developing the market,
accumulating the talent and technology and improving the adaptive capacity of oversea standards and the local project management
ability continuously for many years. For the domestic business, accumulates experience in aspects of the project bidding, financing
ways and operation management and forms its unique operation ways.
(IV) Financing Situation
During the reporting period, the company's financing structure was reasonable and it better supported the
company's business development. The financing during the reporting period is as follows:
Unit: Yuan
No Financing Channel December 31, Financing cost range Structure
2018
1 Bank loans 1,664,568,470.43 5.2%-8.1% 1年以内
160,440,152.95 3.5%-5.2% 1-2年
- - 2-3年
Subtotal 1,825,008,623.38
2 Trust financing 666,666,608.68 6.09%-9.9% 1年以内
876,250,000 6.65%-9.9% 1-2年
300,000,000 6.56% 2-3年
Subtotal 1,842,916,608.68
3 Bond financing 100,000,000 6.2% 1-2年
145,000,000 6.2% 2-3年
Subtotal 345,000,000
4 Notes 211,334,653.11 0-10% 1年以内
Total 4,224,259,885.17
(V) Quality Control System
Quality is the life of engineering construction companies. Quality is the best display and promotion of the image of
construction companies. The company has always attached great importance to project quality management, has a dedicated QC
(Quality Control) department, and is fully responsible for the management of the company’s construction projects, forming a set of
13
Sino Great Wall Co., Ltd. 2018 Annual Report
effective and mature quality control processes and systems. Quality control measures have been continuously optimized to cover all
aspects and operate efficiently; quality management is scientific and standardized. During the reporting period, the company did not
have major project quality problems.
(VI) Safety Production Operation
The company has firmly established the guiding principle of “safety first, prevention first”, attaches great importance to safety
production, carefully organizes safety education and training, adheres to the safety red line, strictly implements the safety production
responsibility system, and conducts in-depth safety inspections and hidden trouble investigations, enhances safety precautions, and
creates a safe, harmonious, standardized construction environment, and constantly improves the level of precision management of
safety production. During the reporting period, the company did not have major safety issues, all work was carried out in an orderly
manner, and the construction was safe and stable.
Ⅱ.Major Changes in Main Assets
1. Major Changes in Main Assets
Main Major changes
Equity assets The slight change
Fixed assets Mainly due to the scrapping of vehicles and the sale of houses
Mainly due to the transfer of Sino Great Wall Intelligent Real Estate (Zhanjiang) Co.,
Intangible assets
Ltd. to reduce intangible assets
Mainly that the Sino Zhigu Industry (Yueyang) Co., Ltd. and Chengwu County
Construction in process
Shenguang Project Management Co., Ltd. merge the project under construction
2. Main Conditions of Overseas Assets
□ Applicable□√ Not applicable
Ⅲ.Analysis On core Competitiveness
Whether the company needs to comply with the disclosure requirements of the particular industry
Yes
Civil Engineering Construction
Sino Great Wall is a leading construction & engineering contractor in China with business covers various types construction &
engineering contracting. With leading projects such as PM, EPC, BT, BO and PPP, etc., The implementation of the National Strategy
of “One Belt, One Road” will provide a good opportunity for the company's overseas business development. The company continues
to increase efforts to open up overseas markets, thus the overseas project orders and the revenue have maintained a rapid annual
growth rate. Domestic business, With the continuous promotion of national PPP projects. The company will also usher in a better
development opportunity, the company's comprehensive strength, overseas influence and market competitiveness have increased year
by year.
1. Strategic positioning advantage
The “Construction & Engineering contracting” and “Medical & Health Business” will be the company’s two strategic
14
Sino Great Wall Co., Ltd. 2018 Annual Report
directions for future development. In 2013, the company set up the development goal “Making bigger and stronger overseas business,
and to become the world's leading international comprehensive construction & building service provider”. In 2016, the company set
up the “Medical & Health business” as another essential development direction. All of those are to comprehensively cater the needs
of the national strategies of “One Belt, One Road” and “Medical & Health Industry Development”. The good prospects of “One Belt,
One Road” projects and “Medical & Health Industry” will provide a broad market space for the company’s business development. In
terms of engineering contracting, the early-development advantage of overseas business enables the company to have rich
management experiences and high-quality customers and establish talented teams, thus laid a solid foundation for the company’s
overseas business development. In terms of the Medical & Health business, the company has set up project teams in many domestic
places such as Sichuan, Henan and Hubei, and the company has purchased Wuhan Commercial Worker Hospital and won the bids of
many medical PPP project. Also, the company has established cooperative relationships with many hospitals and has recruited many
kinds of talents in terms of medical, hospital management, investment and financing etc., thus provided a strong support for the
Medical & Health business development.
2. Standardized and high-efficient management system, fully market-oriented operation mechanism
With the increasingly expanding of the company scale and business scope, the management for the company is becoming more
complex. However, the company timely set up the sound management system and the authorization system to standardize the
approval procedures, reduce the management hierarchy tiers and improve the work efficiency and execution, thus ensured the
efficient operation of the company’s business operation. For the operation mechanism, the company bravely faces the fierce
competition in the market, adheres to the market-oriented development, respects the objective laws of the market and constantly
improves its management level, thus to timely response to changes in the market and continuously improve the company's market
image, construction quality and profitability.
3. Integrated design and construction advantages
The company has a wide range, high-ranking construction qualifications, and the company has integrated design and construction
experiences and good project management capabilities, so the company is able to provide integrated design and construction services
in terms of civil engineering, decoration, mechanical and electrical installation and full industry chain of curtain wall, and the
company can independently complete the whole process of construction project. The company can form a comprehensive advantage
in the field of building engineering, so it can reasonably schedule the procurement, labor use and construction plan, as well as the
company can constantly optimize the process to reduce the project costs. The company’s excellent design ability, sound construction
quality, high-efficient construction planning and the comprehensive high-quality service greatly enhanced the customers’
satisfaction.
4. Costs advantages and quality-control advantages
The core management staff of the company all have more than 10 years experiences of building and engineering construction.
Upon the deep understanding of the industry, the company established a relatively perfect material procurement, labor management
and quality control system. Through the price ceiling mode for procurement, the company screens the suppliers in the early stage of a
project, thus to ensure that the procurement costs of the project materials would be in a reasonable scope. By locking the technical
requirements and time requirements of the project, the company can lock the labor costs. The company has set up strict
quality-control system for the design drawing, raw material procurement and each aspect of the project construction management, thus
to strictly ensue the project construction quality, so the company has won good reputation and got trust and recognition by a great
number of customers.
15
Sino Great Wall Co., Ltd. 2018 Annual Report
IV. Management’s Discussion and Analysis
I. Overview
2018 was an extremely difficult year for the company, with the global economic situation increasingly complicated,
international trade protection on the rise, growth rate of foreign engineering contracting industry slowed down and competition
intensified. Due to the national capital management policy at the beginning of 2018 and the environmental impact of deleveraging,
the company was subjected to loan recovery with different degrees such as loan withdrawal and loan cut, resulting in the liquidity
difficulties of the company's operating funds and triggering a series of chain reactions of operating difficulties. Overdue repayment
appeared in the financing of the company, its subsidiaries and banks and other financial institutions. Major accounts, some assets and
shares of subsidiaries were frozen by overdue financial institutions in pre litigation preservation, further causing some employees of
the company to default on their wages, some suppliers to default on their debts, and bidding for new projects was also greatly
affected. The company's operating income has been greatly reduced, and the annual operating results in 2018 show losses for the first
time. In 2018, the company realized operation income of RMB 2.431 billion, a decrease of 62.58% from the last year; realized the
operating profits of RMB- 1.48 billion, a decrease of 391.32% from the last year; and the net profit attributable to the parent
company was RMB -1.736 billion, a decrease of 556.66% from the last year.
In terms of engineering construction, the company overcame difficulties and obstacles, rooted in the existing business area and
scale, and continued to steadily expand its business. During the reporting period, the company faced difficulties both domestically
and abroad. In terms of foreign business, the company undertook the traditional construction business-Cambodia Mekong River Villa
Project; Meanwhile, it actively participated in investment and financing, development, construction and operation projects, and
jointly develops Dongpoxi Comprehensive Park in Laos with international engineering companies; In addition, It completed and
delivered the residential and commercial buildings of the stock project NAGA Phase II Integrated entertainment in Cambodia and the
Cambodia Haoli Diamond Project, and maintained the normal operation of the stock projects in Cambodia, Russia, Sri Lanka,
Malaysia, Algeria and Myanmar regions. In terms of domestic business, the company has successfully connected with strategic
projects such as Chengdu Rennan Square Project, Future New World Project, Xinhui Hilton Hotel and Villa Project. Meanwhile, it
actively expands its major clients and reaches strategic cooperation intentions with well-known real estate developers and investment
companies, which are expected to sign high-value business contracts with the company in 2019.
The medical and health industry is an important pillar in the company's transformation and development strategy. Due to the
influence of the adjustment of national financial policies, the company actively expanded the traditional construction business of
infrastructure, utilized existing resources, and strengthened horizontal integration. It is expected that some breakthroughs will be
made inMedical engineering and proton therapy projects in the future.
In smart housing sector, it will locate the trend and accurately position it, and comprehensively push forward the
implementation of strategic development goals. In recent years, the Chinese government has successively issued relevant policies to
vigorously promote the transformation of the construction industry to construction industrialization. The company has set up a “Sino
Great Wall Intelligence Residential Co, LTD.” in Zhanjiang, Guangdong, to produce fabricated supporting products. During the
reporting period, the construction of the base's factory building framework was basically completed. Due to the financial
environment, the production line has not yet been established and put into production. Meanwhile, the company promoted the rural
assembly business and made a preliminary layout in key regions of the country.
Faced with the financial difficulties, the company has made concerted efforts from top to bottom to conquer the difficulties. It
has successively carried out a series of reforms and innovations in enterprise management mode, timely investigated and re-elected
board members, integrated the senior management team, re-organized the business sectors, defined the responsibility assessment,
strengthened the asset preservation, comprehensively optimized control and other measures to effectively stimulate enterprise
16
Sino Great Wall Co., Ltd. 2018 Annual Report
development potential in adversity.
Ⅱ. Main business analysis
1. General
Refer to relevant contents of “1.Summarization” in “Discussion and Analysis of Management”.
2. Revenue and cost
(1) Revenue structure
Unit: Yuan
2018 2017 Year-on-year
Amount Proportion Amount Proportion increase/decrease
Total of operating
2,426,987,687.02 100% 6,497,124,980.52 100% -62.65%
revenue
On industry
EPC 1,853,545,312.44 76.37% 4,268,109,664.43 65.69% -56.57%
Engineering
6,971,646.83 0.29% 19,119,855.94 0.29% -63.54%
design
Decoration work 430,784,976.15 17.75% 2,015,057,491.48 31.01% -78.62%
Medical Service
135,685,751.60 5.59% 132,427,255.48 2.04% 2.46%
revenue
Other 62,410,713.19 0.96% -100.00%
On product
EPC 1,853,545,312.44 76.37% 4,268,109,664.43 65.69% -56.57%
Engineering
6,971,646.83 0.29% 19,119,855.94 0.29% -63.54%
design
Decoration work 430,784,976.15 17.75% 2,015,057,491.48 31.01% -78.62%
Medical Service
135,685,751.60 5.59% 132,427,255.48 2.04% 2.46%
revenue
Other 62,410,713.19 0.96% -100.00%
On Area
Domestic 1,725,531,194.49 71.10% 3,750,012,620.09 57.72% -53.99%
Overseas 701,456,492.53 28.90% 2,747,112,360.43 42.28% -74.47%
17
Sino Great Wall Co., Ltd. 2018 Annual Report
(2) Situation of Industry, Product and District Occupying the Company’s Business Income and Operating
Profit with Profit over 10%
√ Applicable □Not applicable
Whether the company needs to comply with the disclosure requirements of the particular industry
Yes
Civil Engineering Construction
Unit: Yuan
Increase/decrea Increase/decrea
Increase/decrea
se of business se of gross
se of revenue in
Gross profit cost over the profit rate over
Turnover Operation cost the same period
rate (%) same period of the same period
of the previous
previous year of the previous
year (%)
(%) year (%)
On Industry
1,853,545,312. 1,854,176,312.
EPC -0.03% -56.57% -38.80% -29.05%
44 80
Decoration
430,784,976.15 494,437,274.02 -14.78% -78.62% -70.55% -31.47%
work
On Product
1,853,545,312. 1,854,176,312.
EPC -0.03% -56.57% -38.80% -29.05%
44 80
Decoration
430,784,976.15 494,437,274.02 -14.78% -78.62% -70.55% -31.47%
work
On Area
1,725,531,194. 1,817,363,558.
Domestic -5.32% -53.99% -40.14% -24.36%
49 28
Overseas 701,456,492.53 632,137,076.59 9.88% -74.47% -65.84% -22.76%
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on
latest on year’s scope of period-end.
□ Applicable √Not applicable
(3) Whether the Company’s Physical Sales Income Exceeded Service Income
□ Yes √No
(4) Degree of Performance of the Significant Sales Contract Signed up to this Report Period
√ Applicable □Not applicable
Whether the company needs to comply with the disclosure requirements of the particular industry
Yes
18
Sino Great Wall Co., Ltd. 2018 Annual Report
Civil Engineering Construction
The company is required to comply with the disclosure requirements of No. 7 of Shenzhen Stock Exchange's Industry Information
Disclosure Guidelines - Listed Companies Engaged in Civil Engineering Construction Business.
Major Business Price Repay Financ Prefer Franchis Operati Source of Guarant Investment
Projects Mode Settin ment ing ential ing (If ng Income eed Income
g Arran Metho Policie Applica Period And Base Protection
Policy gemen ds s ble) (If Attribution Operati Measures
ts Applica (If ons (If (If
ble) Applicable) Applica Applicable)
ble)
Subcontrac EPC Negoti Execut Bank None Not Not Constructio Not Not
ted Project General ated e loan applicab applicab n income applicab applicable
of the contractin pricin accord le le le
Military g g ing to
Academy the
of Kuwait contra
National ct
Ministry of
Defence
Qatar EPC Negoti Execut Bank None Not Not Constructio Not Not
Newport General ated e loan applicab applicab n income applicab applicable
NPP/0057 contractin pricin accord le le le
Housing g g ing to
and the
Infrastructu contra
re ct
Engineerin
g
5 million EPC Negoti Execut Bank None Not Not Constructio Not Not
tons / year General ated e loan applicab applicab n income applicab applicable
refinery contractin pricin accord le le le
project in g g ing to
Cambodia the
contra
ct
Cambodia EPC Biddin Execut Bank None Not Not Constructio Not Not
Haoli General g e loan applicab applicab n income applicab applicable
Diamond contractin pricin accord le le le
Project g g ing to
(Phnom the
Penh contra
National ct
Assembly
19
Sino Great Wall Co., Ltd. 2018 Annual Report
Street
Commercia
l/Residenti
al Area
Developme
nt Project)
PPP project PPP mode Biddin Execut Bank None Not Not Constructio Not Not
of Baiyang g e loan applicab applicab n income applicab applicable
Lake pricin accord le le le
Headquarte g ing to
rs the
Economic contra
Port, ct
Xingang
District,
Chenglingji
, Hunan
Province
Chongqing Investme
Yinglong nt
Lake Rural
Revitalizati
on
Demonstrat
ion Park
Project
Developme EPC Negoti Execut Bank None Not Not Constructio Not Not
nt of the General ated e loan applicab applicab n income applicab applicable
Dongpoxi contractin pricin accord le le le
Special g g ing to
Economic the
Zone in contra
Vientiane, ct
Laos －
EPC
General
Contract
General EPC+F Negoti Execut Bank None Not Not Constructio Not Not
contracting General ated e loan applicab applicab n income applicab applicable
of 5000 contractin pricin accord le le le
sets of g g ing to
modern the
affordable contra
20
Sino Great Wall Co., Ltd. 2018 Annual Report
housing ct
projects in
the
Republic of
Congo
Status of completed (completed acceptance) project during the reporting period:
Unit: Yuan
Number of Item Amount Acceptance Revenue Settlement Repayment
Business Model
Projects Situation Confirmation Situation Situation
EPC General 1,100,000,00 Revenue 1,080,142,72
1 Handed over Unsettlement
contracting 0.00 confirmed 2.26
Status of completed (non-completed acceptance) project during the reporting period:
Unit: Yuan
Business Model Number of Projects Item Amount Accumulated Confirmed Amount of
Revenue Non-completed Parts
PPP mode 1 2,000,000,000.00 9,137,796.59 1,990,862,203.41
EPC+F General 1 2,000,000,000.00 0.00 0.00
contracting
Investment 1 10,000,000,000.00 0.00 0.00
Unit: Yuan
Project Completi Business Start Durat Percentage Current Accumulate Repay Receivable
Name on Model Date ion of Confirmed d Confirmed ment s Balance
Completio Revenue Revenue Situati
n on
Subcontracte 2,100,00 EPC June 1,460 57.00% 1,174,079,61 483,55 716,094,88
d Project of 0,000.00 General 21, days 4.23 7,587.6 1.32
the Military contracti 2015 3
Academy of ng
Kuwait
National
Ministry of
Defence
Qatar 1,500,00 EPC March 971 100.00% 54,541,245.2 1,981,727,57 1,320,4 674,079,63
Newport 0,000.00 General 20, days 6 7.07 38,761. 6.78
NPP/0057 contracti 2015 02
Housing and ng
Infrastructur
e
Engineering
5 million 4,268,00 EPC May 4, 1,381 9.00% 0.00 369,885,008. 172,83 197,051,27
21
Sino Great Wall Co., Ltd. 2018 Annual Report
tons / year 0,000.00 General 2017 days 26 3,735.0 3.20
refinery contracti 6
project in ng
Cambodia
Cambodia 1,100,00 EPC August 1,996 100.00% 0.00 1,070,958,57 1,080,1 2,766,807.
Haoli 0,000.00 General 14, days 5.31 42,722. 52
Diamond contracti 2014 26
Project ng
(Phnom
Penh
National
Assembly
Street
Commercial/
Residential
Area
Developmen
t Project)
PPP project 2,000,00 PPP Novem 1,095 9,137,796.59 9,137,796.59 - 10,051,576
of Baiyang 0,000.00 mode ber 01, days .25
Lake 2017
Headquarter
s Economic
Port,
Xingang
District,
Chenglingji,
Hunan
Province
Chongqing 10,000,0 Investme
Yinglong 00,000.0 nt
Lake Rural 0
Revitalizatio
n
Demonstrati
on Park
Project
Developmen 8,736,00 EPC 2,190
t of the 0,000.00 General days
Dongpoxi contracti
Special ng
Economic
Zone in
22
Sino Great Wall Co., Ltd. 2018 Annual Report
Vientiane,
Laos －
EPC General
Contract
General 2,000,00 EPC+F
contracting 0,000.00 General
of 5000 sets contracti
of modern ng
affordable
housing
projects in
the Republic
of Congo
Other notes□ Applicable √ Not applicable
Status of completed outstanding projects in inventory:
Unit: Yuan
Accumulated Costs Accumulated Already Settled Completed Outstanding
Expected Loss
Incurred Confirmed Gross Profit Amount Balance
Unit: Yuan
Completed Outstanding
Project name Amount Already Settled Amount
Balance
Other Notes□ Applicable √ Not applicable
Does the company carry out overseas projects?
√ Yes □No
Unit: Yuan
Project name Amount Business Model Completion
Subcontracted Project of the 2,100,000,000.00 EPC General contracting The civil construction structure and
Military Academy of Kuwait masonry of each building are
National Ministry of Defence completed, and the doors and
windows, decoration, and
electromechanical professional
construction are in progress.
Qatar Newport NPP/0057 1,500,000,000.00 EPC General contracting Under finishing construction
Housing and Infrastructure
Engineering
23
Sino Great Wall Co., Ltd. 2018 Annual Report
5 million tons / year refinery 4,268,000,000.00 EPC General contracting Earthwork backfilling, earthmoving
project in Cambodia work; construction of concrete
mixing plant; temporary
infrastructure construction, and
temporary camp construction
Cambodia Haoli Diamond 1,100,000,000.00 EPC General contracting The structure is completed and
Project (Phnom Penh National handed over, the podium building is
Assembly Street completed and handed over, the
Commercial/Residential Area SOHU decoration is completed and
Development Project) handed over; the APT tower
decoration is completed and handed
over; the podium curtain wall is
completed and handed over; the
electromechanical construction is
completed and handed over
PPP project of Baiyang Lake 2,000,000,000.00 PPP mode
Headquarters Economic Port,
Xingang District, Chenglingji,
Hunan Province
Chongqing Yinglong Lake 10,000,000,000.00 Investment
Rural Revitalization
Demonstration Park Project
Development of the Dongpoxi 8,736,000,000.00 EPC General contracting On-site camp and temporary
Special Economic Zone in construction are completed
Vientiane, Laos － EPC
General Contract
General contracting of 5000 2,000,000,000.00 EPC+F General
sets of modern affordable contracting
housing projects in the
Republic of Congo
(5) Composition of business cost
The company shall comply with disclosure requirements in Shenzhen Stock Exchange Industry Information
Disclosure Guidelines No. 7-the Listed Company Engagement in Civil Engineering Construction Business.
Component of business cost
Unit: Yuan
2018 2017 Increase /decrease
Composition
Amount Proportion Amount Amount Proportion
Labor 1,504,503,479.98 61.42% 2,765,222,215.84 56.59% -45.59%
Material 695,785,282.38 28.41% 1,483,612,055.43 30.36% -53.10%
24
Sino Great Wall Co., Ltd. 2018 Annual Report
Other 249,211,872.51 10.17% 527,498,994.96 10.80% -52.76%
Industry Category
Unit: Yuan
2018 2017 Increase
Industry Items
Amount Proportion Amount Proportion /decrease
1,231,327,330. 2,506,781,251.
EPC Labor 50.27% 51.30% -50.88%
77 44
1,286,809,864.
EPC Material 522,483,649.03 21.33% 26.33% -59.40%
40
EPC Other 100,365,333.00 4.10% 433,230,315.67 8.87% -76.83%
Medical service 99,316,403.49 4.05% 97,366,145.37 1.99% 2.00%
Engineering
1,570,644.56 0.06% 13,262,528.25 0.27% -88.16%
design
Decoration
Labor 273,176,149.21 11.15% 258,440,964.40 5.29% 5.70%
work
Decoration
Material 173,301,633.35 7.07% 196,802,191.03 4.03% -11.94%
work
Decoration
Other 47,959,491.46 1.96% 94,268,679.29 1.93% -49.12%
work
Unit: Yuan
2018 2017 Increase
Product Items
Amount Proportion Amount Proportion /decrease
1,231,327,330. 2,506,781,251.
EPC Labor 50.27% 51.30% -50.88%
77 44
1,286,809,864.
EPC Material 522,483,649.03 21.33% 26.33% -59.40%
40
EPC Other 100,365,333.00 4.10% 433,230,315.67 8.87% -76.83%
Medical service 99,316,403.49 4.05% 97,366,145.37 1.99% 2.00%
Engineering
1,570,644.56 0.06% 13,262,528.25 0.27% -88.16%
design
Decoration
Labor 273,176,149.21 11.15% 258,440,964.40 5.29% 5.70%
work
Decoration
Material 173,301,633.35 7.07% 196,802,191.03 4.03% -11.94%
work
Decoration
Other 47,959,491.46 1.96% 94,268,679.29 1.93% -49.12%
work
Note
25
Sino Great Wall Co., Ltd. 2018 Annual Report
(6) Whether Changes Occurred in Consolidation Scope in the Report Period
√ Yes □No
During the reporting period, the changes in the scope of consolidated statements are detailed in the notes to the financial reports.
(7) Relevant Situation of Significant Changes or Adjustment of the Business, Product or Service in the
Company’s Report Period
□ Applicable √ Not applicable
(8) Situation of Main Customers and Main Supplier
Information of Main Customers
Total sales amount to top 5 customers (RMB) 1,175,772,799.58
Proportion of sales to top 5 customers in the annual
48.45%
sales (%)
Proportion of the sales volume to the top five customers
0.00%
in the total sales to the related parties in the year
Information of the Company’s top 5 customers
No Name Amount (RMB) Proportion (%)
1 Customer 1 588,855,867.69 24.26%
2 Customer 2 323,621,751.26 13.33%
3 Customer 3 100,635,898.11 4.15%
4 Customer 4 84,152,835.11 3.47%
5 Customer 5 78,506,447.41 3.23%
Total -- 1,175,772,799.58 48.45%
Other notes of major customers
□ Applicable √ Not applicable
Major suppliers
Total purchase of top 5 Suppliers (RMB) 645,383,000.58
Percentage of total purchase of top 5 suppliers in total
26.35%
annual purchase (%)
Proportion of purchase amount from the top 5 suppliers
in the total purchase amount from the related parties in 0.00%
the year
Information about the top 5 suppliers
No Name Amount (RMB) Proportion
26
Sino Great Wall Co., Ltd. 2018 Annual Report
1 Supplier 1 390,603,102.00 15.95%
2 Supplier 2 77,094,220.90 3.15%
3 Supplier 3 67,334,330.25 2.75%
4 Supplier 4 56,090,518.76 2.29%
5 Supplier 5 54,260,828.64 2.22%
Total -- 645,383,000.58 26.35%
Other notes of major suppliers
□ Applicable √ Not applicable
3. Expenses
Unit: Yuan
Increase/Decreas
2018 2017 Notes
e (%)
Sale expenses 28,300,802.42 32,213,247.97 -12.15%
Administration
311,698,800.53 312,957,207.20 -0.40%
expenses
Mainly due to interest on bank loans
Financial expenses 606,015,536.23 432,590,607.55 40.09%
and damages for breach of contract
4. R& D Expenses
√Applicable □Not applicable
In order to enhance the company’s core competitiveness and meet the needs of sustainable development, the Company’s main R&D
direction during the reporting period was decoration engineering design, project general contracting, etc. Currently, each project has
been progressed as scheduled, and after practical application, the good economic and social benefits have been achieved.
Situation of Research and Development Input by the Company
2018 2017 Increase /decrease (%)
Number of Research and
Development persons 40 146 -72.60%
(persons)
Proportion of Research and
4.87% 5.08% -0.21%
Development persons
Amount of Research and
Development Investment (In 31,536,641.34 156,200,083.05 -79.81%
RMB)
Proportion of Research and
Development Investment of 1.30% 2.40% -1.10%
Operation Revenue
27
Sino Great Wall Co., Ltd. 2018 Annual Report
Amount of Research and
Development Investment 0.00 0.00 0.00%
Capitalization (In RMB)
Proportion of Capitalization
Research and Development
0.00% 0.00% 0.00%
Investment of Research and
Development Investment
The Reason of the Prominent Change in Total Amount of Research and Development Input Occupying the Business Income Year on
Year
□Applicable √Not applicable
Explanation of the Reason for Substantial Changes in the Research and Development Input’s Capitalization Rate and Its
Reasonableness
□Applicable √Not applicable
5. Cash Flow
Unit: Yuan
Items 2018 2017 YoY Increase/Decrease (%)
Subtotal of cash inflow
received from operation 8,406,131,087.26 10,789,046,921.79 -22.09%
activities
Subtotal of cash outflow
received from operation 7,578,252,031.81 12,570,915,540.44 -39.72%
activities
Net cash flow arising from
827,879,055.45 -1,781,868,618.65 -146.46%
operating activities
Subtotal of cash inflow
received from investing 3,824,000.00 2,085,000.00 83.41%
activities
Subtotal of cash outflow for
195,480,772.24 1,022,993,256.12 -80.89%
investment activities
Net cash flow arising from
-191,656,772.24 -1,020,908,256.12 -81.23%
investment activities
Subtotal cash inflow received
1,481,623,182.06 5,092,144,392.35 -70.90%
from financing activities
Subtotal cash outflow for
2,638,553,654.50 2,564,264,123.49 2.90%
financing activities
Net cash flow arising from
-1,156,930,472.44 2,527,880,268.86 -145.77%
financing activities
Net increase in cash and cash -521,454,793.60 -296,482,731.93 75.88%
28
Sino Great Wall Co., Ltd. 2018 Annual Report
equivalents
Notes to the year-on-year change of the relevant data
√Applicable □Not applicable
In 2018, the company encountered liquidity difficulties, the scale of its operations shrank, and the inflow and outflow of operating
funds decreased from the previous year; Affected by this, foreign investment has decreased significantly; Meanwhile, due to
environmental influences such as bank loan withdrawal and financial deleveraging, the Company has difficulty in financing, the cash
inflow from financing has been greatly reduced, and the net cash flow from financing activities has been negative
Notes to the big difference between cash flow from operating activities and net profit in the reporting year
□Applicable √Not applicable
III. Analysis of Non-core Business
□Applicable √Not applicable
IV. Condition of Asset and Liabilities
1. Condition of Asset Causing Significant Change
Unit: Yuan
End of 2018 End of 2017 Proport
ion
Proportion Proportion
increas Notes to the significant change
Amount in the total Amount in the total
e/decre
assets (%) assets (%)
ase
Mainly due to the deduction of
658,714,886. 1,604,973,91
Monetary funds 6.86% 13.76% -6.90% guarantee deposit on account of
48 6.12
guarantee claim
Account 4,202,594,25 5,706,675,24 Mainly due to the decrease of
43.76% 48.91% -5.15%
receivable 8.24 4.08 income during the report period
717,531,578. 556,839,325.
Inventory 7.47% 4.77% 2.70%
23 50
Long-term
106,837,810.
Equity 1.11% 0.00% 1.11%
83
Investment
158,746,947. 174,537,150.
Fixed assets 1.65% 1.50% 0.15%
91 56
Construction in 36,697,284.0
0.38% 4,968,590.96 0.04% 0.34%
process 4
Short-term 2,862,584,62 3,477,200,42
29.81% 29.80% 0.01%
loans 9.01 0.55
Long-term 120,000,000. 1.25% 843,092,471. 7.23% -5.98% Mainly due to the repayment and
29
Sino Great Wall Co., Ltd. 2018 Annual Report
loans 00 02 decrease of loans during the report
period
2. Asset and Liabilities Measured by Fair Value
□Applicable √Not applicable
3. Restricted asset rights as of the end of this Reporting Period
Items Year-end book value Reason
Monetary funds 532,947,089.60 Margin and frozen funds
Account receivable 716,094,881.32 Pledge
Fixed asset 15,963,305.27 Financial lease assets
Total 1,265,005,276.19
V. Investment situation
1. General condition
√Applicable □Not applicable
182,993,849.80 840,948,723.77 78.24%
2. Condition of Acquiring Significant Share Right Investment during the Report Period
□Applicable √Not applicable
3. Situation of the Significant Non-equity Investment Undergoing in the Report Period
□Applicable √Not applicable
4. Investment of Financial Asset
(1) Securities investment
□Applicable √Not applicable
The Company had no securities investment in the reporting period.
(2) Investment in Derivatives
□Applicable √Not applicable
The Company had no investment in derivatives in the reporting period.
30
Sino Great Wall Co., Ltd. 2018 Annual Report
5. Application of the raised capital
√Applicable □Not applicable
(1) General application of the raised funds
√Applicable □Not applicable
Unit: 10,000 Yuan
Year of Way of Total Total Total Amount Accumu Proporti Total Use and Amount
Raising Raising raised Amount amount of raised lative on of Amount Whereab of the
capital of the of capital amount raised of the outs of Raised
Raised Raised of which of raised capital Unused the Fund
Fund Funds the capital of which Raised Unused with
Used at purpose of which the Fund at Raised over 2
the was the purpose the Fund Years’
changed purpose has been Current Idling
in the has been changed Period
report changed (%)
period
For
temporar
y
Non-pub
11,739.8 13,760.1 replenis
2015 lic 25,500 0 0 0 0.00% 0
5 5 hment of
offering
corporat
e
liquidity
11,739.8 13,760.1
合计 -- 25,500 0 0 0 0.00% -- 0
5 5
Notes to use of raised capital
Upon the approval from the CSRC with the document of the 2015-No.1774 Zheng Jian Xu Ke -Reply of the Major Asset
Restructuring and the Issue of Shares to Objects such as Chen Lue to Purchase Assets and Raise Matching Funds by Shenzhen
Victor Onward Textile Industrial Co., Ltd., Sino Great Wall International Engineering Co., Ltd. (hereinafter referred to as:
“company or the company”) had non-publicly issued 25,914,633 shares of RMB common share(A share), of which the par value
per share was RMB 1.00, the issuing price per share was RMB 9.84, the total funds raised was RMB 254,999,988.72, and after
deducting the issuance expenses of RMB 14,500,000.00 directly from the raised funds, the actual net amount of the raised funds
is RMB 240,499,988.72.
As of December 31, 2018, the company accumulatively used the raised funds of RMB 117,398,462.65, of which the
Company used the raised funds of RMB 0 in 2018. By the end of 2018, the company accumulatively invested RMB
100,000,000.00 in the overseas marketing network construction project and RMB 276,000 in the second phase of informatization
construction project, and the taxes and charges and the intermediary fees related to this transaction was RMB 17,122,462.65, yet
the not-yet-used balance of the raised funds was 137,601,526.07; besides, the idle raised funds used for temporarily
supplementing the Company’s liquidity was RMB 139,327,254.00, the interest income from the special account for raised funds
31
Sino Great Wall Co., Ltd. 2018 Annual Report
was RMB 1,732,150.44, the expenditure for the handling charges of the special account for raised funds was RMB 1,043.92, and
the actual balance of the special account for raised funds was RMB 5,883.59.
(2) Promised projects of raised capital
√Applicable □Not applicable
Unit: 10,000 Yuan
Date
Accum Invest
when Has
ulated ment
Project the any
Total Total Amoun amount progres Has the
change project Benefit materia
raised invest t investe s ended predict
d has realize l
Committed capital ment investe d at the the ed
(includi reached d in the change
investment projects investe after d in the end of reporti result
ng the reporti taken
and investment d as adjust reporti the ng be
partial predict ng place
commit ment ng reporti period realize
change ed period in
ted (1) period ng (%) (3) d
) applica feasibil
period =
ble ity
(2) (2)(1)
status
Committed investment projects
1. Overseas
100.00
marketing network Yes 10,000 10,000 10,000 Yes No
%
construction project
2.Informatization
Construction Phase No 2,500 2,500 27.6 1.10% No Yes
II
3.Related taxes and Not
1,712.2
agency fees of this No 13,000 13,000 13.17% applica Yes
5
transaction ble
Subtotal of
11,739.
committed -- 25,500 25,500 -- -- -- --
85
investment projects
Investment orientation for und arising out of plan
Not applicable
11,739.
Total -- 25,500 25,500 0 -- -- 0 -- --
85
Situation about not 1. Phase II Information Construction Project: The Sino Great Wall has changed from its core business of
coming up to decoration construction before listing to its core business of general contracting after listing. After that, it
schemed progress or has gradually transitioned its core business to engineering construction and investment and management
expected revenue of medical and health industries. In recent years, the business model of listed companies has changed.
and the reason (in However, the phase II information construction project to be invested in at the initial stage of listing is
32
Sino Great Wall Co., Ltd. 2018 Annual Report
specific project) no longer suitable for the current development status.
2. Taxes and intermediary expenses related to the transaction of raised funds: The company has
registered for filing the special tax treatment for enterprise restructuring at the Dapeng New District
Local Taxation Bureau on May 26, 2016. The type of special tax treatment for enterprise restructuring is
equity acquisition, and the filing number is SDSPB [2016] No.22. For this reorganization of the
company, special reorganization is selected in terms of tax. The part of the value of the company's placed
assets that is equivalent to the value of the placed assets is recognized according to the original book
value of the placed assets. Therefore, the transfer income of the relevant assets is not recognized for the
time being during this reorganization, and the income tax liability is not generated for the time being
during this reorganization. In the later period, in case of any income from asset transfer, the company
will fulfill its tax obligations in a timely manner in accordance with the provisions of the tax law. In
order to maximize the use efficiency of raised funds and reduce financial expenses, the company held the
fourth meeting of the eighth board of directors on January 26, 2019, and deliberated and passed the
Proposal on Termination of Some Funded Investment Projects and Use of Funds Raised for Temporary
Supplementary Working Capital for Permanent Supplementary Working Capital. The Company plans to
terminate the raised funds investment project "Phase II Informatization Construction Project" and "taxes
and intermediary fees related to the raised funds transaction" and use the remaining raised funds of RMB
137,601,537.35 (excluding interest) for permanent replenishment of working capital. On February 13,
2019, the above proposal was reviewed and approved by the company's first extraordinary shareholders'
meeting in 2019.
Notes to significant
Please refer to the above-mentioned "circumstances and reasons for not achieving the planned schedule
change in feasibility
or expected revenue".
of the project
Amount, application Not applicable
and application
progress of the
unbooked proceeds
About the change of Applicable
the implementation
site of the projects
invested with the
proceeds
Adjustment of the Not applicable
implementation way
of investment funded
by raised capital
About the initial Not applicable
investment in the
projects planned to
be invested with the
proceeds and the
replacement
33
Sino Great Wall Co., Ltd. 2018 Annual Report
Applicable
In order to maximize the use efficiency of the raised funds and reduce financial expenses, the Company
will, in consideration of the funds use plan for the projects invested by the raised funds, use RMB 120
million of idle raised funds to temporarily supplement the liquidity, with a term of such use no more than
12 months, From the date of approval by the board of directors of the company, the special account for
raised funds shall be returned in full upon maturity. The matter has been examined and approved by the
Using the idle 35th meeting of the seventh board of directors of the company, and the board of supervisors, independent
proceeds to directors and recommendation agencies of the company have all expressed their opinions of agreement.
supplement the During its use, the company did not change the use of the raised funds in disguised form, did not affect
working capital on the normal operation of the investment plan of the raised funds, and did not carry out securities and other
temporary basis risk investments. The company transferred out the raised capital of RMB 120,000,000.00 from August 1
in 2018. Due to a contract dispute in Bank of Ningbo, the Company's account number 23001892778 of
Bank of Shanghai Beijing Branch was deducted RMB 14,158,049.00 on August 8, 2018. Due to the
execution of (2018) W0928Z No.13610-251370, the company's account number 03002719068 was
deducted RMB 5,169,205.00 on October 25, 2018, resulting in the company's raised funds temporarily
supplementing the actual use amount of working capital by RMB 139,327,254.00, exceeding the amount
approved by the board of directors by RMB 327,254.00.
Balance of the Not applicable
proceeds in process
of project
implementation and
the cause
As of December 31, 2018, the unused raised funds are still in the raised funds account. The company
held the fourth meeting of the eighth board of directors on January 26, 2019, and deliberated and passed
About application the Proposal on Termination of Some Funded Investment Projects and Use of Funds Raised for
and status of the Temporary Supplementary Working Capital for Permanent Supplementary Working Capital. On
proceeds unused February 13, 2019, the above proposal was deliberated and passed by the company's first extraordinary
shareholders’ meeting in 2019. The unused fund raised by the company has permanently replenished the
working capital.
1. On March 6, 2019, the Company received the Decision on Taking Corrective Measures against Sino
Great Wall Co., Ltd. ([2019] No.11) from Shenzhen Supervision Bureau of China Securities Regulatory
Commission (hereinafter referred to as the "Decision on Correction"). The Decision on Correction raises
the following questions regarding the use of the company's raised funds: the Management System for the
Problems existing in Use of Raised Funds does not involve the accountability mechanism for the illegal use of raised funds,
application of the and the provisions on the hierarchical examination and approval authority, decision-making procedures,
proceeds and the risk control measures, etc. for the use of raised funds are unclear, which do not conform to the provisions
information of Article 3 of the Guidelines No.2 for the Supervision of Listed Companies - Regulatory
disclosure or other Requirements for the Management and Use of Raised Funds by Listed Companies. Currently, the
issues Company has fulfilled its obligations on the use of raised funds and information disclosure in accordance
with the Guidelines No.2 for the Supervision of Listed Companies - Regulatory Requirements for the
Management and Use of Raised Funds by Listed Companies, Measures for the Administration of
Information Disclosure by Listed Companies and Listing Rules of Shenzhen Stock Exchange. On March
18, 2019, the Company held the fifth meeting of the eighth board of directors and deliberated and passed
34
Sino Great Wall Co., Ltd. 2018 Annual Report
the Proposal on revising the Management System of Raised Funds, improving the accountability
mechanism for illegal use of raised funds, and specifying the grading approval authority,
decision-making procedures and risk control measures for the use of raised funds.
2. In 2018, the board of directors of the company passed the Proposal on Temporary Replenishment of
Circulating Fund with Part of Idle Raised Funds and agreed to temporarily replenish the working capital
with 139 million yuan of raised funds. The company transferred out the raised capital of RMB
120,000,000.00 from August 1 in 2018. Due to a contract dispute in Bank of Ningbo, the Company's
account number 23001892778 of Bank of Shanghai Beijing Branch was deducted RMB 14,158,049.00
on August 8, 2018. Due to the execution of (2018) W0828Z No.13610-251370, the company's account
number 03002719068 was deducted RMB 5,169,205.00 on October 25, 2018, resulting in the company's
raised funds temporarily supplementing the actual use amount of working capital by RMB
139,327,254.00, exceeding the amount approved by the board of directors by RMB 327,254.00. In view
of the resolution of the Company’s first extraordinary shareholders' meeting on February 13, 2019 to
consider and pass the Proposal on Termination of Some Funded Investment Projects and Use of Funds
Raised for Temporary Supplementary Working Capital for Permanent Supplementary Working Capital,
the Company will no longer return the above-mentioned part of raised funds exceeding the amount
approved by the Board of Directors to the special account for raised funds.
(3) Changes of raised funds projects
□Applicable √Not applicable
The Company had no sales of major assets in the reporting period.
VI. Sales of major assets and equity
1. Sales of major assets
□Applicable √Not applicable
The Company had no sales of major assets in the reporting period.
2. Sales of major equity
√Applicable □Not applicable
Net Propo Whet Whet
profit rtion Pricin her her
Influe Whet
Trans s on on g the execu
nce of her Relati
action contri of the princi involv te as
the was onshi
Count Sold price bute net ples ed sched Discl Discl
Sold sellin the p with
er equiti (Ten ted by profit of the equiti ule ed osure osure
date g of relate the
party es thous the s of equiti es all and if date index
the d center
and equiti the es compl failed,
Comp transa party
yuan) es to contri sellin eted shoul
any ction
the bute g the d state
listed ted owner the
35
Sino Great Wall Co., Ltd. 2018 Annual Report
comp amou ship reaso
anies nt of transf ns and
from the er the
the equiti adopt
period es ed
- sellin measu
begin g to rment
to the the s of
sold listed the
date comp comp
(Ten anies any
thous to the
and total
yuan) amo9
un t
of the
net
profit
s
The
sale
of the
comp
Sino
any
Great
gener
Wall
Dece ated a
Const
mber -3,681 return -0.88 fair fair
ructio 60% 9,000 No Yes Yes
6, .44 on % value value
nal
2018 invest
Engin
ment
eering
of
Co.,
RMB
Ltd.
15.11
millio
n
VII. Analysis of the Main Share Holding Companies and Share Participating Companies
√Applicable □Not applicable
Situation of Main Subsidiaries and the Joint-stock Company with over 10% net profit influencing to the Company
Unit: Yuan
Company Company Sectors Registered Total Operating
Net assets Turnover Net Profit
Name type engaged in capital assets profit
36
Sino Great Wall Co., Ltd. 2018 Annual Report
General
contracting
,
subcontrac
ting,
engineerin
g survey
and design;
profession
al
contracting
;
architectur
al
decoration
engineerin
g;
architectur
al curtain
Sino Great wall;
Wall project and
Internation technology 1,000,000, 8,591,829, 880,871,99 2,330,186, -916,877,2 -1,183,696,
Subsidiaries
al study and 000 570.83 8.00 998.92 04.86 469.41
Engineerin experiment
g Co., Ltd. al
developme
nt; sell
building
material,
machinery,
hardware,
plastic
articles;
technology
developme
nt,
technology
consultatio
n,
technology
service;
goods
import and
export;
37
Sino Great Wall Co., Ltd. 2018 Annual Report
technology
import and
export;
agent
import and
export.
Acquirement and disposal of subsidiaries in the Reporting period
√Applicable □Not applicable
Name Mode Influence
Sino Great Wall (Beijing) Investment
Transfer
Fund Management Co., Ltd.
Sino Great Wall Zhihui Building
Transfer
Industry (Zhanjiang) Co., Ltd.
Sino Great Wall Jianjie Engineering Co.,
Transfer
Ltd.
Guangzhou Heebeina Interior design
Transfer
Co., Ltd.
Shenzhen Yatian Decorative Design
Transfer
Engineering Co., Ltd.
Note
Sino Great wall International Construction Co., Ltd. is a subsidiary of the company and is the main of income and profits of the
company, which accounts for more than 90% of all the company’s operating income and net profit and the rest subsidiaries account
for less than 10% of all the company’s operating income and net profit, which weight less in the whole company’s operation.
VIII. Special purpose vehicle controlled by the Company
□Applicable √Not applicable
IX. Prospect for future development of the Company
(1) Strategy of the Company’s Development
It is the 70th anniversary of the founding of New China in 2019. It is the key year for comprehensively building a well-off
society to achieve its first 100-year goal. The 2019 Government Work Report emphasizes that the central government will launch a
new round of comprehensive reform and opening-up and the second round of structural reforms in supply-side economics to further
stabilize employment, finance, foreign trade, foreign investment, investment and expectations, boost market confidence, and maintain
sustained and healthy economic development and overall social stability. In 2019, China will promote all-round opening to the
outside world, further expand the scope of opening up, optimize the layout of opening up, and further release the policy dividend.
1. Building construction
As one of the pillar industries of China’s economic development, construction plays an important role in national economy and
social life. During the “The thirteenth Five-Year Plan” period, China's economic development has entered a new normal. The
economic structure has been optimized and upgraded, with its driving force shifted from investment-driven to innovation-driven.
China has entered a key period of reform in which the market plays a decisive role in the allocation of resources and the government
38
Sino Great Wall Co., Ltd. 2018 Annual Report
plays a better role as the core. New urbanization, coordinated development of Beijing, Tianjin and Hebei, the development of the
Yangtze River economic belt and the construction of "the Belt and Road" form an important driving force and valuable opportunity
for the future development of the construction industry. According to the latest research report on the development prospects of the
industry, in the medium and long term, with the continuous improvement of people’s requirements for quality of life and supporting
facilities, the sustainable development of the construction industry will be continuously promoted.
In addition, with the steady recovery of macro-economy and the rapid advancement of new urbanization, the unfavorable
development trend of the construction industry market will be effectively alleviated, which will definitely have a positive impact on
the construction industry. Overseas, the resolution of the 19th National Congress on Constitution of the Communist Party of China
(Amendment) explicitly stated that the promotion of “the Belt and Road” construction and other contents shall be included in the
Party Constitution. Since 2017, the construction of “the Belt and Road” has entered a golden period of development, and the
economic exchanges and cooperation between China and the countries along the “the Belt and Road” will be closer. According to the
latest report of the Asian Development Bank, from 2016 to 2030, the demand for infrastructure in the Asian region is expected to
exceed USD 22.6 trillion, with an average annual demand of more than USD 1.5 trillion. The market of countries along the "the Belt
and Road" will continue to be the growth point and driving force for the development of the foreign contracted engineering industry,
and China's construction and decoration enterprises will usher in a golden development period for “going out”. Meanwhile, other
countries will continue to invest in infrastructure, and infrastructure development will continue to rise steadily. As a well-known
international engineering construction contractor, the company, relying on its rich construction experience and market image, will
earnestly seize the historic development opportunities in the overseas engineering contract market, carry out in-depth research and
project exploration in countries and regions with existing investment layout, and meanwhile continue to develop the overseas
business platform by using various advantageous resources, fully explore the “the Belt and Road” market, actively promote the
sustainable development of overseas business, further increase the proportion of overseas market performance in the company’s
overall performance, and strengthen the brand and status of private enterprise pioneer for "the belt and road initiative" of Sino Great
Wall.
2. Healthcare
In 2018, the National Health Commission and the National Healthcare Security Administration were formally established. The
“Comprehensive Work Plan for Comprehensive Improvement of County-Level Hospitals (2018-2020)” issued by the People’s
Republic of China pointed out that by 2020, 500 county hospitals (including some impoverished county and county hospitals) and
county Chinese medicine hospitals will reach “third-level hospitals” and The service capacity requirements of “three-level Chinese
medicine hospitals” strive to make 90% of county hospitals and county hospitals in China meet the basic standards for medical
service capacity of county hospitals and county hospitals. County-level hospitals officially entered the stage of explosive
comprehensive construction, and China's medical engineering will usher in a golden period of development. During the reporting
period, the company invested in the Yinglong Lake Commercial Medical Treatment and Health Care Rural Complex Project
(Yinglong Lake Rural Revitalization Demonstration Project). The project integrates the herbal medicine health research institute, the
international medical treatment and health care zone, the hot spring resort sanitarium area and other sectors, implements the
"powerful combination" strategy, and collaborates with social capital to jointly build a modern medical care and rehabilitation
complex with complete functions and facilities. Meanwhile, combining with the company's resource advantages, through the
construction of medical real estate and supporting medical treatment and health care engineering, a medical treatment and health care
development model with the company's characteristics in combination of medical treatment and health care and centered by medical
treatment is formed.
(2) The Company’s Development Strategy
The company focuses its development strategy on two aspects: one is to strengthen the project contracting and investment of the
Belt and Road Initiative, and the other is to enhance the domestic medical investment. At present, the company has possessed
abundant projects in Southeast Asia, South Asia, the Middle East and Africa. In the field of medical and health care, apart from
investing in the construction of health care engineering, it will further choose to purchase mature hospitals and introduce foreign
39
Sino Great Wall Co., Ltd. 2018 Annual Report
advanced proton therapy technologies and leading medical services. The company will give full play to the advantages of listed
companies in financing, engineering construction coordination, investment decision-making, medical expert resources and modern
corporate governance, gather medical experts from Beijing and Shanghai and hospital management experts, and strive to build a
hospital management group with important status and influence in the industry. Centering around the development strategies of
“enlarging and strengthening overseas business to become an integrated international construction services supplier” and “developing
the health-care industry”, in the future, the company will devote major efforts to developing abroad business and arranging the
medical industry so as to enhance its capacity for core competitiveness and profit constantly and eventually strive to build itself into a
prominent business group developed by the mutual driving forces of construction and health-care industry.
(3) The Company's Business Plans
Facing the difficulties both domestically and internationally in 2018, the company will focus on the following work in 2019:
1. Optimize the business structure and management system, and improve the company's performance appraisal system
In 2019, in combination with the internal and external environment faced by the company for development, the company's
business organization and business structure will be adjusted upon the review of the company's board of directors; The company's
staffing will be re-combed, the salary and performance appraisal system will be formulated according to company management
structure and business model to reduce the personnel cost effectively, and control various expenses reasonably for more scientific and
efficient business management.
2. Comb the internal control system to improve the level of fine management
The company will re-comb its corporate governance system and strengthen construction of internal control systems to improve
its fine management level. According to the Shenzhen Securities Regulatory Bureau's decision to order the company to make
corrections, the company will fully supervise the implementation of the rectification measures in accordance with the contents of the
rectification report, make reasonable plans for the overall financial situation of the company, continue to consolidate the basic work
of financial accounting, form a stable financial control system, reduce management costs and financial risks, and well ensure the
safeguarding of the company's business development.
3. Strengthen the collection of accounts receivable and actively promote debt restructuring
In 2019, the company will intensify the collection of accounts receivable, include the collection of accounts receivable as a key
assessment index, set up a special "debt collection decision leading group", formulate a corresponding debt collection incentive
system, and link the collection of overdue accounts receivable with individual performance assessment. If necessary, legal
proceedings and assigned responsible persons will be used to strengthen the collection of overdue accounts receivable, and the
collection of accounts receivable will be implemented as a key special management work to effectively improve the company's asset
quality. Meanwhile, investment and financing capability is an important prerequisite for the medium and long-term stable
development of the enterprise. The company will resolve the existing on-balance-sheet litigation as soon as possible, enhance the
confidence of external financial institutions, actively adjust the loan structure, reduce the financing cost, realize the dynamic balance
of funds, promote the investment and financing activities on the right track, In addition, the company actively communicated and
sought solutions for current debt overdue, litigation and arbitration matters, and did not rule out the use of judicial restructuring and
debt restructuring to solve the company's current financial difficulties.
4. Consolidate existing overseas projects and continue to expand overseas markets
In 2019, the company will focus on the national strategic layout, continue to deepen the overseas market, strengthen exchanges
and cooperation with the governments of countries and regions along the "the Belt and Road", fully seize the construction project
opportunities brought by the countries and regions along the "the Belt and Road", focus on intensive cultivation in key markets,
continue to strengthen business expansion, strengthen the comprehensive management of EPC contracting for overseas projects,
refine the classification of management subjects, and further promote regional and project responsibility management, so as to meet
the relevant requirements of the company for professional business and fine management. Meanwhile, it will take root in the existing
business areas, moderately expand the volume of professional engineering, and actively expand the industrial energy construction
market in the advantageous market areas.
40
Sino Great Wall Co., Ltd. 2018 Annual Report
5. Actively expand smart houses and build up medical treat and health care businesses
In 2019, the company will continue to raise funds to complete the construction of the smart housing industry base in Zhanjiang
City, Guangdong Province, and ensure that it passes the commissioning acceptance and goes into production within the year;
Meanwhile, the company will accelerate the expansion of the smart housing sector in the domestic real estate industry, closely follow
the good policy of China to vigorously build the beautiful countryside, actively promote the construction of a new socialist
countryside, and strive to open a smart housing rural sector operation center in Xiong'an New Area in 2019, so as to build
high-quality village houses for farmers; In addition, in combination with the company's advantageous resources in the health care
sector and relying on the construction of health care facilities, the sales, operation and service of health care apartments, the company
actively created a new pattern of transformation and upgrading.
6. Actively expand smart houses and profit growth points
In 2019, the company will continue to raise funds to complete the construction of the smart housing industry base in Zhanjiang
City, Guangdong Province, to ensure that the trials will be completed and put into production during the year. At the same time, the
company will accelerate the expansion of the smart housing sector in the domestic real estate industry, closely following the country's
efforts to build beautiful villages. Policies, actively promote the construction of a new socialist countryside, and strive to open a
smart housing rural sector operation center in Xiong'an New District in 2019 to build high-quality village houses for the majority of
farmers; in addition, combined with the superior resources of the company's Kangyang plate, relying on Kang The construction of
facilities, the sales, operation and service of Kangyang Apartment will actively create a new pattern of transformation and upgrading
of the company.
(4) Main Risks faced by the Company and Solutions
1. Macro economy and policy-related influences
The company belongs to the construction industry. The change of economic cycle is closely related to the development of
construction industry, and factors such as the operation of national economy and the development of urbanization process will
directly affect the construction industry. The company's main business is in a fully competitive market with low industry barriers and
fierce competition. The company is in a period of rapid development, and the rapid development and expansion of domestic and
foreign businesses raise higher requirements for the company's organizational operations and project management.
Solutions: Pay constant attention to the international and domestic economic situation to make reasonable prejudgment. Make
timely adjustment for operating strategy and marketing policy and make pre-arranged planning which copes with market changes to
guarantee the smooth realization for business goals in 2019.
2. Risks Aggravated by the Market Competition
As to the international market, on the one hand, the combinations among the strong ones of the giant international contractors in
Europe, America, Japan and South Korea are increasingly common, which can increasingly strength the aspects including the
technology, financing and management; on the other hand, more domestic enterprises have participated in the international market
competition of construction & engineering, intensified the overseas construction market competition. In the domestic market, with
the continuous rise of the attractiveness of medical engineering projects, many companies have participated in the construction of
medical engineering projects. Thus, the medical engineering projects have been more difficult to bid and have fierce competition,
which imposes a higher requirement on the Company's market expansion.
Solutions: Strengthen team construction and take first-mover advantage of the Company’s overseas business. Draw lessons from
the past, improve the capacity of management and control for the Company’s own projects to constantly heighten the Company’s
core competitiveness.
3. Management Risks Brought by Constant Business Scope Enlargement
The company's business and scale continue to expand, putting forward higher requirements for the management of the
company's management mode, talent reserve, technological innovation and market development.
Solutions: The company will continue to improve the management level, strengthen the talent reserve, adjust and improve the
management system, continue to strengthen the information management, and form big data precipitation and analysis of various
41
Sino Great Wall Co., Ltd. 2018 Annual Report
data in the operation process through advanced technical means, so as to promote the improvement of management efficiency and
widen the management coverage.
4. Operation-related risks
(1) Risks of period in project construction
The engineering construction project may be affected by factors such as changes in project design, delays in the payment of
project funds, restrictions on transportation, power supply and water supply, land acquisition and relocation, and bad weather, etc.,
resulting in the failure to proceed as the project schedule agreed in the contract, the risk of the project not being completed and
delivered on schedule, and the impact on the company's operating performance and reputation.
(2) Risk of increased material price
The construction industry is mainly about fixed cost contract, so gross profit margin is somehow sensitive to the fluctuation of
purchasing price of construction materials. The bulk materials used by the company mainly include concrete and steel. Due to the
long construction period in construction projects, the price increase of these bulk materials will directly lead to the increase of
construction costs, resulting in the difference between the actual construction costs and the project budget, affecting the company's
operating performance.
(3) Operational risks of overseas businesses
Although the company's overseas businesses are mainly in Southeast Asia and other regions, the company will face potential
economic risks, exchange rate risks, political risks and other risks in the process of overseas business operation. In case of major
fluctuations or economic crises in the economic development of the countries or regions where the company's overseas target markets
are located, they will adversely affect the company's overseas business and the further development of new markets in the future.
Solutions：For the above risks, the company will integrate internal and external resources, strengthen technological innovation
according to the professional development ideas, seek expansion of business areas and construction qualifications, improve operation
quality and benefits, create green and high-quality projects, realize multi-field professional construction operations and enterprise
development, and continuously upgrade brand strength.
5. Risk of bad debt caused by accounts receivable
Some countries have entered the debt repayment period, with increased financial pressure, increased risk of debt default,
insufficient confidence of investors, and scarce funds for infrastructure construction. The company has a large balance of accounts
receivable, and the high proportion of net accounts receivable to total assets is due to the characteristics of the industry. With the
expansion of the company's business scale, the balance of the company's accounts receivable is generally on the increase, and the
proportion of net accounts receivable to total assets is expected to remain at a relatively high level. The failure to recover the
company's accounts receivable in time will affect the company's capital turnover rate and cash flow from operating activities, thus
adversely affecting the company's production, operation and performance level.
Solutions：Strengthen fund management, rationally allocate fund structure, and establish assessment mechanism for project fund
recovery to resolve and prevent potential fund risks.
6. Risks of litigation and asset freeze caused by debt repayment
Earlier, the company issued multiple announcements on litigation and arbitration matters in the designated information
disclosure media. As the overdue debts of the company and its subsidiaries are not paid off and the company is under investigation by
the CSRC, the company has been sued by some creditors and some of its bank accounts and company's assets have been frozen. The
overdue debts of the company may be subject to payment of relevant liquidated damages, late fees and penalty interests, increasing
the company's financial expenses, thus affecting the company's production and business operation, possibly weakening the
confidence of other creditors in the company, thus aggravating the company's financial tension and adversely affecting the company's
operation.
Solutions：The Company will continue to pay attention to the follow-up progress, fulfill its information disclosure obligations in
a timely manner in accordance with relevant regulations, strengthen the management of litigation-related matters, and employ
professional lawyers to actively respond to lawsuits so as to protect the legitimate rights and interests of the company. The company
42
Sino Great Wall Co., Ltd. 2018 Annual Report
is making every effort to raise debt service funds and properly handle the debt crisis. Does not rule out future borrowing judicial
restructuring, debt restructuring and other ways to solve the company's current financial difficulties.
7. Risk of share suspension
The company is currently being investigated by the China Securities Regulatory Commission because of suspected illegal
information disclosure. According to the relevant provisions of the Shenzhen Stock Exchange Listing Rules (Revised in November
2018), if the company is involved in the illegal material information disclosure and under other forced delisting situations stipulated
in Article 13.2.1, the company's shares will be subject to the delisting risk warning. The company's shares will be suspended on the
next trading day after the expiration of the 30-trading-day period in the delisting risk warning until the Shenzhen Stock Exchange
makes a decision on whether to suspend the listing of the company's shares within 15 trading days after the suspension. If the
investigation items that the company is involved in are not found to have any major illegal acts by the CSRC, the company's shares
will not be at risk of suspension.
Solutions：The Company will actively cooperate with the CSRC to carry out investigations, and perform its information
disclosure obligations according to the relevant provisions of the Shenzhen Stock Exchange Listing Rules and disclose risk alert
announcements at least once a month.
X. About researches, visits and interviews received in this reporting period
1、Records about researches, visits and interviews received in the reporting period
√ Applicable □ Not applicable
Reception time Way of reception Types of visitors Basic index
March 8,2018 Onsite investigation Organization The interactive relation with the
investors on Shenzhen Stock
Exchange platform about Sino Great
Wall International Engineering Co.,
Ltd: Record of the investors relations
activities on March 8, 2018.
Reception times 1
Reception agency amount 3
Reception personal number 0
Others 0
Whether to disclose, reveal or disclose No
non-public material information
43
Sino Great Wall Co., Ltd. 2018 Annual Report
V. Important Events
I. Specification of profit distribution of common shares and capitalizing of common reserves
Formulation, implementation and adjustment of profit distribution policy of common shares especially cash dividend policy
during the reporting period
√Applicable □Not applicable
During the reporting period, the formulation and implementation of the company's cash dividend policy comply with the
provisions of the Articles of Association and the requirements of the resolutions of the shareholders' meeting. The dividend standard
and proportion are explicit and clear. Relevant decision-making procedures and mechanisms are complete. Independent directors
fulfill their duties and play their due roles. The shareholders' meeting and the daily investor reception work provide small and
medium shareholders with the opportunity to fully express their opinions and demands, and the legitimate rights and interests of
small and medium shareholders are fully protected.
Special cash dividend policy description
Whether meets the requirements of the provisions of the
Yes
articles of association or shareholders' meeting resolutions:
Whether dividends standard and proportion are clear Yes
Whether decision making and supervision mechanism for
Yes
profit distribution are completed
Whether independent directors perform their duties
Yes
responsibly and play its due role:
Whether the Minority shareholders have adequate opportunity
to express their views and aspirations and Their legitimate Yes
rights and interests have been fully protected
Whether the Cash dividend policy to adjust or change the
Not applicable
conditions and procedures are compliant and transparent
The profit distribution preplan or proposal and the preplan or proposal of conversion of the capital reserve into share capital in the
past three years (with the reporting period inclusive):
1. Profit distribution plan for 2016
the Company distributed cash dividends of RMB 0.60 (including tax) for every 10 shares based on the existing 1,698,245,011 shares.
with a total distribution of RMB 101,894,700.66. No bonus shares were given and no capital reserves were conversed. The remaining
un-allocated profit will be carried over to the next year. The 2016 profit distribution plan has been approved and implemented at the
2016 shareholders' meeting of the company.
2. Profit distribution plan for 2017
On April 23,2018，The 32nd meeting of the 7th board of directors of the company deliberated and approved the 2017 profit
distribution plan. The Company distributed cash dividends of RMB 0.40 (including tax) for every 10 shares based on the existing
1,698,245,011 shares. With a total distribution of RMB 67,929,800.44. No bonus shares were given, and no capital reserves were
conversed. The remaining un-allocated profit will be carried over to the next year. The 2017 profit distribution plan has been
approved and implemented at the 2017 shareholders' meeting of the company.
44
Sino Great Wall Co., Ltd. 2018 Annual Report
3. Profit distribution Preplan for 2018：
On April 28, 2019，The 7th meeting of the 8th board of directors of the company deliberated and approved the 2018 profit
distribution plan. No cash dividend, no bonus shares, no capital reserve converted into share capital. The above profit distribution
plan shall be examined and approved by the company's 2018 annual shareholders' meeting. On April 28, 2019, the 7th session of the
8th Board of Directors of the company
Dividend distribution of the latest three years
Unit: Yuan
Ratio of the
total cash
bonus (other
ways
Net profit Ratio in net
Amount of Proportion of included) in
attributable profit
cash cash net profit
to the over of attributable Amount for
Amount for dividends dividends
the parent to the parent attributable
cash bonus from cash from cash cash bonus
Year company in company in to common
(tax offer to offer to (tax
the the stock
included) repurchase repurchase
consolidated consolidated included)
shareholders
shares of the shares of the
financial financial
funds funds of listed
statements statements
company
contained in
consolidation
statement
-1,704,739,7
2018 0.00 0.00% 0.00 0.00% 0.00 0.00%
36.40
67,929,800.4 380,090,990. 67,929,800.4
2017 17.87% 0.00 0.00% 17.87%
4 82 4
101,894,700. 473,661,862. 101,894,700.
2016 21.51% 0.00 0.00% 21.51%
66 67 66
In the reporting period, both the Company’s profit and the parent company’s retained earnings were positive however not cash
dividend distribution proposal has been put forward.
□Applicable √Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□Applicable √Not applicable
The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either.
45
Sino Great Wall Co., Ltd. 2018 Annual Report
III. Commitments to fulfill the situation
1.The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the
reporting period made by the company, shareholder, actual controller, acquirer, director, supervisor,
senior management personnel and other related parties.
√ Applicable □ Not applicable
Time of Period of
Commitmen
Commitment Type Contents making commitmen Fulfillment
t maker
commitment t
Commitment on share reform No No No No No
Commitment in the acquisition
report or the report on equity No No No No No
changes
Shares Fully
acquired by completed
purchases of (shares
assets acquired
through by Chen
issuing Lue and
shares: “I He Feiyan
will not from
transfer the issuing
new shares shares to
of Victor purchase
Onward assets
Holdings have been
acquired released
Commitments in assets Chen Lue, March
Stock lock through this 36 months from
reorganization He Feiyan 19,2015
restructurin restriction
g, including on sale)
but not Please refer
limited to to the
the public detailed
transfer conted
through the published
stock on juchao
market or information
by website
agreement, （www.cni
and I will nfo.com.cn
not entrust ）on
anybody October
46
Sino Great Wall Co., Ltd. 2018 Annual Report
else to 23,
manage my 2018(Anno
shares of uncement
Victor No.:2018-1
Onward 23）
Holdings,
within 36
months
from the
date new
shares list
and before
the date I’ve
carried out
my
obligations
of
performance
compensatio
n under this
restructurin
g(subject to
whatever is
early,
hereinafter
referred to
as “lock-up
periods”). If
the closing
price of
shares of
Victor
Onward
Holdings
were lower
than this
issue price
for 20
continuous
trading days
in 6 months
after the
restructurin
g
47
Sino Great Wall Co., Ltd. 2018 Annual Report
transaction
has been
completed,
or the final
closing
price were
lower than
this issue
price 6
months after
the
transaction
has been
completed,
the lock-up
periods of
my shares
of Victor
Onward
Holdings
are
automaticall
y prolonged
for 6
months.
(The
above-menti
oned issue
price will be
calculated
according to
the price
after the
adjustment
of
ex-dividend,
etc. if
ex-dividend
behaviors of
the
company,
including
distribution
of
48
Sino Great Wall Co., Ltd. 2018 Annual Report
dividends,
giving
bonus,
conversion
of share
capital,
rationing
shares, and
etc., were
happened
during the
above-menti
oned
periods. If
the
restructurin
g
transaction
were March
19,2015 36
months
Strict
performing
Shenzhen
Victor
Onward
Textile
Industrial
Co., Ltd.
The Third
Quarterly
Report
2015. 14
investigated
by judicial
authorities
or China
Securities
Regulatory
Commissio
n due to
false record,
misleading
statement or
49
Sino Great Wall Co., Ltd. 2018 Annual Report
major
omission of
the
information
provided or
disclosed, I
will not
transfer my
shares of the
company
before the
conclusion
of the case
has been
made clear.
After the
above-menti
oned
lock-up
periods, I
will sell or
transfer the
new shares
of the
company
acquired
from this
restructurin
g following
relevant
regulations
of China
Securities
Regulatory
commission
and
Shenzhen
Stock
Exchange.
Shares
acquired by Strict
March 19,
Chen Lue Stock lock matching 36 months performin
2015
funds g
raised: “I
50
Sino Great Wall Co., Ltd. 2018 Annual Report
will not
transfer the
new shares
of Victor
Onward
Holdings
acquired
through this
issuing by
any way,
including
but not
limited to
the public
transfer
through the
stock
market or
by
agreement,
within 36
months
from the
date new
shares list.
If regulation
rules or
regulators
have longer
requirement
s for
lock-up
periods, it
should be
executed
accordingly.
Up to the
issue day of
the letter, I
Strict
No capital and other March
Chen Lue Long-term performin
occupation corporations 19,2015
g
controlled
by me
haven’t
51
Sino Great Wall Co., Ltd. 2018 Annual Report
possessed
funds of
Sino Great
Wall; After
the
transaction
is
completed, I
and other
companies
controlled
by me (if
any), except
for listed
companies
and their
holding
subsidiaries,
will not
possess the
funds of
listed
companies
or Sino
Great Wall
by any way,
including
cash in
advance,
other
expenses,
direct or
indirect
loans,
assumption,
etc. and try
our best to
avoid fund
intercourse
with listed
companies
or Sino
Great Wall,
which has
52
Sino Great Wall Co., Ltd. 2018 Annual Report
nothing to
do with
normal
operations.
If Sino
Great Wall
got
penalized
by
government
administrati
on
departments
due to the
money
lending
which was
happened
before the
transaction,
I will bear
the total
compensatio
n for the
company’s
loss
resulting
from it by
cash in
order to
guarantee
Sino Great
Wall won’t
suffer any
loss.
Meanwhile,
I will
actively
urge Sino
Great Wall
to establish
complete
inner
control
53
Sino Great Wall Co., Ltd. 2018 Annual Report
system and
funds
managemen
t system
within
lawful
authority.
In view of
the fact that
the houses
rented by
Sino Great
Wall and it’s
son
subsidiaries,
subsidiaries,
haven’t
rental
registration,
I promise, if
Sino Great
Wall and its
son
Cash Strict
subsidiaries, March
Chen Lue compensatio Long-term performin
subsidiaries, 19,2015
n g
were
penalized
by real
estate
managemen
t department
or suffered
other losses
resulting
from it, I
agree to
compensate
the loss of
the
company by
cash.
During the
Cash March Strict
Chen Lue reporting Long-term
compensatio 19,2015 performin
period, the
54
Sino Great Wall Co., Ltd. 2018 Annual Report
n project g
which Sino
Great Wall
is involved
in is the
decoration
engineering
construction
project of
Libo Grand
Hotel
(hereinafter
referred to
as “Libo
project”)
which the
company
contracted
before the
bidding
process.
Sino Great
Wall is not
involved in
any other
projects
except for
Libo project
before
bidding
process. As
to the
violating
issues
existed in
the Libo
project, I
promise as
follows: if
Sino Great
Wall got
penalized
by
government
55
Sino Great Wall Co., Ltd. 2018 Annual Report
administrati
on
departments
or suffered
any
economic
loss resulted
from it, I
will
compensate
the
company by
cash;
Meanwhile,
I, within
lawful
authority,
will also
promise to
urge the
company to
undertake
related
construction
projects
legally so as
to avoid
violating
issues
happened
before
implementat
ion of
bidding
process, i.e.,
at the time
for
construction
again.
“1. Up to It has been
Cash October fulfilled (on
March 19,
Chen Lue compensatio 13th,2014, Long-term May 21,
2015
n the related 2018, Chen
expenses of Lue paid
56
Sino Great Wall Co., Ltd. 2018 Annual Report
the the
litigation company a
and payment of
arbitration RMB
cases, 5,601,460.2
including 1 for the
the actual difference
price, between the
compensatio lawsuit and
n, penalty, arbitration
ligation of parent
costs, etc. company
which the and
parent-subsi subsidiary
diary of Sino
companies Great Wall
of Sino Co., Ltd..
Great Wall For details
needs to pay information
caused by , please
the final refer to the
results of Announcem
ligation and ent on the
arbitration Payment of
cases, Cash by the
exceed the Controlling
amount of Shareholder
liabilities and the
which Actual
recognized Controller
in the to the
“Audit Company to
Report” Fulfill the
made for Commitme
Sino Great nt published
Wall by by the
Ruihua CPA company on
(Special the website
Ordinary of Juchao
Partnership) Information
on the basis (cninfo.com
of the audit .cn ) on
base day of May 22,
July 31st, 2018.)
57
Sino Great Wall Co., Ltd. 2018 Annual Report
2014, I
promise to
bear the
balance by
cash
uncondition
ally so as to
guarantee
the
parent-subsi
diaries of
Sino Great
Wall won’t
suffer any
loss. 2. This
commitment
letter is
irrevocable.
1. On
condition
that
ownership
defect exists
in the lease
of house
property of
parent-subsi
diary
companies
of Sino
Cash Strict
Great Wall March
Chen Lue compensatio Long-term performin
and its 19,2015
n g
subsidiary
corporation,
which
resulted in
inability for
parent-subsi
diary
companies
of Sino
Great Wall
and its
subsidiary
58
Sino Great Wall Co., Ltd. 2018 Annual Report
corporation
to continue
leasing this
house
property but
having to
relocate, or
parent-subsi
diary
companies
of Sino
Great Wall
and its
subsidiary
corporation
can’t timely
find suitable
workplace
for lawful
operation in
related area,
I will
undertake to
compensate
by cash for
parent-subsi
diary
companies
of Sino
Great Wall’s
losses
which are
caused by
operation
and finance
due to the
above-menti
oned
matters. 2. I
undertake to
uncondition
ally bear the
relevant
fines by
59
Sino Great Wall Co., Ltd. 2018 Annual Report
cash for
parent-subsi
diary
companies
of Sino
Great Wall
on condition
that the
rental house
property of
parent-subsi
diary
companies
of Sino
Great Wall
and its
subsidiary
corporation
is in
absence of
handling
procedures
for filing
house
leasing ,whi
ch resulted
in that
parent-subsi
diary
companies
of Sino
Great Wall
and its
subsidiary
corporation
are fined by
property
administrati
ve
department.
3.The
commitment
letter is
irrevocable.
60
Sino Great Wall Co., Ltd. 2018 Annual Report
“In
condition
that
parent-subsi
diary
companies
of Sino
Great Wall
or its son
subsidiary
haven’t paid
social
security or
housing
fund for
staff
according to
law, which
resulted in
any losses
to Sino
Cash Strict
Great Wall , March 19,
Chen Lue compensatio Long-term performin
including 2015
n g
the
competent
authorities’
requirement
for Sino
Great Wall
or its
subsidiary
to make
supplementa
ry payment,
to be
punished
and
resourced, I
will bear by
full-amount
cash for the
fee of
supplementa
l payment
61
Sino Great Wall Co., Ltd. 2018 Annual Report
and the
expense and
fee for
being
punished or
resourced,
which is to
guarantee
Sino Great
Wall and its
subsidiary
to avoid
suffering
from any
loss ”.
“At present,
Suzhou
Lvbang has
possessed
one
state-own
land use
right, of
which the
land
certificate is
Suzhou Guo
Yong(2014)
Cash No.Y20140 Strict
March
Chen Lue compensatio 86”, locates Long-term performin
19,2015
n in Danan g
Village,
Dadian
Town,
Yongqiao
District,
Suzhou City
with 32,966
square
meters of
area and the
purpose for
industry.
Suzhou
62
Sino Great Wall Co., Ltd. 2018 Annual Report
Lvbang
possesses its
own factory
with
9,843.87
square
meters of
area
above-menti
oned, which
is the
building
reserved on
the former
selling land.
Suzhou
Lvbang is
carrying out
refurnishing
and
reconstructi
on for this
factory and
has acquired
“License of
Constructio
n Land
Planning ”w
ith
No.2014-08
-001
approved
and issued
by
Yongqiao
District,
Suzhou
City’s
housing and
rural
construction
bureau, of
which other
examination
63
Sino Great Wall Co., Ltd. 2018 Annual Report
and
approval
procedures
of
construction
are in the
process of
handling “I
undertake to
actively
supervise
and urge
Suzhou
Lvbang on
handling
procedures
of the
approval
process
involved
with factor
refurnishing
and
reconstructi
on, and
which is
suffered
from
administrati
ve
punishment
by relevant
competent
authorities
in reason of
claiming
certificate
of title, or in
which any
dispute or
controversy
exist in
construction
and
64
Sino Great Wall Co., Ltd. 2018 Annual Report
ownership,
which shall
be my
responsibilit
y to carry
out solution,
and I
undertake to
compensate
by cash for
Suzhou
Lvbang’s
losses
which are
due to this
matter,
guaranteein
g no losses
occur to
Sino Great
Wall and
Suzhou
Lvbang for
this matter.
“According
to the
“Agreement
of
Significant
Asset
Replacemen
t and Issue
of Share to
Cash Strict
Buy March 19,
Chen Lue compensatio Long-term performin
Asset”(herei 2015
n g
nafter
referred to
as
“Agreement
”) signed
among
Victor
Onward
Holdings,
65
Sino Great Wall Co., Ltd. 2018 Annual Report
all
shareholders
of Sino
Great Wall
and Union
Developme
nt Group
Co., Ltd
(hereinafter
referred to
as“ Union
Group”) on
October 13,
2014, all the
creditor’s
rights and
liabilities
related to
place-out
asset before
the delivery
date of
Victor
Onward
Holdings
shall be
Union
Group’s
responsibilit
y to carry
out solution;
After the
asset
delivery
date, if any
losses occur
to Victor
Onward
Holdings in
reason of
the liability
transfer of
asset
delivery,
66
Sino Great Wall Co., Ltd. 2018 Annual Report
personnel
placement,
unsettled
dispute or
controversy
and other
compensatio
n related to
place-out
asset,
payment
obligation
and
punishment,
Union
Group or
the
specified
third party
shall
sufficiently
compensate
all losses for
Victor
Onward
Holdings
for the
above
matters. I
undertake, if
Union
Group and
the
specified
third party
refuse to
compensate
the losses
caused by
the above
mentioned
matters for
Victor
Onward
67
Sino Great Wall Co., Ltd. 2018 Annual Report
Holdings
according to
the“ Agree
ment”, I
will
compensate
by cash for
the Victor
Onward
Company
within 5
working day
in advance.
Meanwhile,
I will
reserve the
resource
rights for
Union
Group and
the
specified
third party
“.
According
to“ Agreem
ent of
Shenzhen
Victor
Onward
Textile
Industrial
Co., Ltd.,
Performanc
Chen Lue, Chen Lue May
e Long-term Completed
He Feiyan and He 11,2015
commitment
Feiyan
Concerning
on
Performanc
e
Compensati
on” and its
supplementa
l
68
Sino Great Wall Co., Ltd. 2018 Annual Report
agreement ,
Chen Lue’s
promised
Sino Great
Wall that
the net
profit
deducted by
incidental
losses and
attributable
to the parent
companies’
owners after
audition of
2015, 2016
and 2017
shall be
respectively
more than
RMB 345.8
million,
RMB 438.5
million and
RMB 538.2
million. If
the net
profit of
Sino Great
Wall is less
than the
promised
net profit
mentioned
above ,
Chen Lue
and He
Feiyan will
compensate
for listed
company in
accordance
with
“Performan
69
Sino Great Wall Co., Ltd. 2018 Annual Report
ce
Compensati
on
Agreement”
and its
supplementa
l agreement
1. This
reorganizati
on is
planned to
place in
asset. At
present,
complete
separation
has existed
between me
or other
enterprises
under my
possession
(if any) and
the listed
company in Strict
Chen Lue; Independent September
staff, asset, Long-term performin
He Feiyan competition 30,2015
finance, g
institution
and
business of
Sino Great
Wall.
Independen
ce exists in
both staff,
asset,
finance,
institution
and
business
and no
confusion
exists. 2. I
undertake,
70
Sino Great Wall Co., Ltd. 2018 Annual Report
after this
reorganizati
on, to
ensure the
continued
complete
separation
between me
or other
enterprises
under my
possession(i
f any) and
the listed
company in
staff, asset,
finance,
institution
and
business,
sustaining
the
independenc
e in the
listed
company’s
staff, asset,
finance,
institution
and
business, as
follows:
(1).The
Ensurance
of
Independen
ce for Listed
Company’s
Personnel
Ensure that
the general
manager,
the
vice-general
71
Sino Great Wall Co., Ltd. 2018 Annual Report
manger, the
chief
financial
officer, the
board
secretary
and the
senior
executives
of the
Company
only accept
salary in
listed
company,
including no
holding of
any post
except
director and
supervisor
in my
enterprise or
other
enterprises
under my
possession.
2.Ensure the
complete
independenc
e exists
among the
listed
company’s
labor,
personnel,
and salary
managemen
t and me. 3.
The
director,
supervisor,
general
manager
72
Sino Great Wall Co., Ltd. 2018 Annual Report
and other
senior
executives
recommend
ed by me
have all
been
through the
legal
procedures,
and I will
not
intervene
the
company’s
board and
the
shareholder’
s decision
for
appointing
and
dismissing
personnel
by
exercising
official
power.
(2)The
Insurance of
the Asset
Independen
ce of Listed
Company
1.Ensure
that the
listed
company
possesses
business
system
related to
operation
and the
73
Sino Great Wall Co., Ltd. 2018 Annual Report
relevant
completely-i
ndependent
asset.
2.Ensure
that no
occupation
of mine
exists in
capitals and
assets of the
listed
company.
3.The
Insurance of
the
Financial
Independen
ce of Listed
Company
1.Ensure
that the
independent
finance
department
and the
independent
financial
calculating
system set
up by the
listed
company,
which
possess
normative
and
independent
financial
and
accounting
rules. 2.
Ensure that
the listed
74
Sino Great Wall Co., Ltd. 2018 Annual Report
company
independent
ly opens a
bank
account, not
sharing the
same bank
account
with me.
3.Ensure
that the
financial
staff of the
listed
company
holds no
part-time
post in my
enterprise
and other
enterprises
under my
possession.
4. Ensure
that the
listed
company
pays taxes
according to
law. 5.
Ensure that
the listed
company
makes the
financial
decision-ma
king
independent
ly, I will not
intervene
the
utilization
of the listed
company’s
75
Sino Great Wall Co., Ltd. 2018 Annual Report
capital.
(4)The
Insurance of
the
Institutional
Independen
ce of Listed
Company
1.Ensure
that the
listed
company
sets up
perfect
governance
structure for
the share
company’s
legal
person,
which
possesses
independent
and
complete
institutional
framework
2.Ensure
that the
shareholder’
s meeting,
the board of
director, the
independent
director, the
supervisor
and the
general
managers
exercise
official
powers
according to
laws,
76
Sino Great Wall Co., Ltd. 2018 Annual Report
regulations
and articles
of
incorporatio
n (5)The
Insurance of
the Business
Independen
ce of Listed
Company 1.
Ensure that
the listed
company
possesses
the asset,
staff,
qualification
and ability
for
independent
ly holding
business
activities,
which
possesses
the
independent
,
autonomous
and sustain
operation
ability
catering to
the market.
2. Ensure
that I will
not
intervene
the listed
company’s
business
activities
except
exercising
77
Sino Great Wall Co., Ltd. 2018 Annual Report
shareholder’
s rights.
3.Ensure
that I or
other
enterprises
under my
possession
will avoid
working on
the listed
company’s
main
business
which
possesses
substantial
competition.
4. Ensure to
reduce the
related
transaction
between me
and the
listed
company or
between
other
enterprises
under my
possession
and the
listed
company as
much as
possible;
When
confirming
necessary
but
unavoidable
related
transaction,
I will ensure
78
Sino Great Wall Co., Ltd. 2018 Annual Report
the fair
operation
according to
the principle
of market
culture and
the fair
price, and
fulfill the
transaction
procedures
and the
obligation
of
disclosing
information
according to
relevant
laws and
regulations
and
normative
document.
Related “1.Before March 19, Long term Strict perfo
transactions this 2015 rming
reorganizati
on, the
fairness and
reasonablen
ess of
pricing and
the
legitimacy
Chen Lue;
and
He Feiya
effectivenes
s of
decision-ma
king
procedure
exist in the
transaction(i
f any)
between me
or the
79
Sino Great Wall Co., Ltd. 2018 Annual Report
enterprise
under my
possession(i
f any) and
Sino Great
Wall which
is planned
to place
asset in, no
related
transaction
with
obvious
unfairness
exists ;
2.After this
reorganizati
on, I or the
enterprise
under my
possession
will avoid
and reduce
the related
transaction
with listed
company as
much as
possible. As
for any
unavoidable
or
reasonable
related
transaction,
I or the
enterprise
under my
possession
will sign the
agreement
according to
laws and
fulfill the
80
Sino Great Wall Co., Ltd. 2018 Annual Report
lawful
procedure,
and fulfill
relevant
approval
procedure
for internal
decision-ma
king and
timely
fulfill the
obligation
of
disclosing
information
according to
law,
following
relevant
laws,
regulations,
other
normative
documents
and articles
of listed
company,
which is to
guarantee
the fairness
and
reasonablen
ess in
related
transaction
pricing, to
guarantee
the fairness
of
transaction
condition
and to
guarantee
not to utilize
81
Sino Great Wall Co., Ltd. 2018 Annual Report
the related
transaction
to illegally
transfer the
capital and
profit of
listed
company,
and not to
utilize this
transaction
to engage in
any
behaviors
which will
cause any
losses to
listed
company or
other
shareholder’
s legitimate
rights. Once
I violate the
above
promises
and cause
losses to the
listed
company, I
will
compensate
the listed
company
for the
losses
caused by
the this
matter.
During the Fully
Union
assets completed
Developme Income March
reorganizati Long-term (On March
nt Group disposal 19,2015
on, the 29, 2018,
Co., Ltd.
house the
82
Sino Great Wall Co., Ltd. 2018 Annual Report
property company
and land received an
without economic
property compensati
certificate in on of RMB
the disposed 100 million
assets from
within the Shenzhen
plant area of Union
Kuixin Developme
Community nt
of Kuichong Investment
Street of Co., Ltd.,
Longgang and
District and promised to
the expected complete
compensatio the
ns, as well performanc
as the e.)
expected
compensatio
ns
concerning
to the
regaining of
plots
planned as
schools
within the
right of land
use of
Nanyou
Industrial
Park of
Nanshan
District
have not
been
recorded in
the
assessment.
Therefore,
Union
Group
83
Sino Great Wall Co., Ltd. 2018 Annual Report
promises
that after the
reorganizati
on, if Union
or a third
party
appointed
by Union
receives
compensatio
ns or
incomes
related to
above-menti
oned
disposed
assets which
are house
property
and land
without
property
certificate
as well as
regaining of
plots
planned as
schools,
Union will
return the
benefits to
Victor
Onward
Holdings, in
10 working
days since
the
collection.
The actual
costs and
fees during
the
possession
of the house
84
Sino Great Wall Co., Ltd. 2018 Annual Report
property
and land
and the paid
as well as
the unpaid
but
necessary
costs and
fees for the
reception of
the
above-menti
oned
benefits for
Union
Group or its
third party
will be
deducted
from the
income. The
specific
benefits and
payable
costs and
fees should
be
confirmed
jointly by
Union
Group and
Victor
Onward
Holdings
based on the
actual
situations.
（Note:On
June 25,
2015,All
shareholders
of Victor
Onward
Holdings,
85
Sino Great Wall Co., Ltd. 2018 Annual Report
Union
Group and
Sino Great
Wall Signed
supplementa
ry
agreement,
and
specified
that the land
and houses
without
ownership
certificate
of Victor
Onward
Holdings
located at
the factory
area of
Kuixin
community
of Kuichong
street office
of
Longgang
district (the
land area is
about
50,000
square
meters, the
built-up
area of
houses is
about
25,000
square
meters,
among them
about
18,000
square
meters of
86
Sino Great Wall Co., Ltd. 2018 Annual Report
buildings at
built-up
area are
within the
plan of
removal and
collection of
government
，hereinafter
referred as
“undocume
nted
property)
still belongs
to Victor
Onward
Holdings.
And the
benefits and
risks of the
real estate
without
certificate
are enjoyed
and
assumed by
Victor
Onward
Holdings.”
According Completed
to the Term the
5.5.3 of implementa
Agreement tion (On
on Major March 29,
Asset 2018, the
Union
Cash Replacemen company
Developme March
compensatio t and Asset Long-term received an
nt Group 19,2015
n Purchase economic
Co., Ltd
Through compensati
Issuing on of RMB
Shares 100 million
(hereinafter from
referred to Shenzhen
as Union
87
Sino Great Wall Co., Ltd. 2018 Annual Report
Agreement) Developme
signed on nt
October 13, Investment
2014 by the Co., Ltd.,
company and
and all promised to
shareholders complete
of Victor the
Onward Co. performanc
Ltd.. and e.)
Sino Great
Wall, Victor
Onward
Holdings
should
obtain the
letter of
approval
concerning
the
transferred
debts of the
disposed
assets from
the creditor
(including
the
guarantee,
similarly
hereinafter)
before the
date of
assets
delivery. In
the situation
of debts on
Victor
Onward
Holdings
due to the
absence of
creditor’s
consent, the
company or
88
Sino Great Wall Co., Ltd. 2018 Annual Report
the third
party
appointed
by the
company is
in charge of
paying off
debts or
reaching
agreement
on the
solution
with the
creditor.
When there
are losses
caused by
improper
solutions of
the
company or
the third
party
appointed
by the
company,
the
company or
the third
party
appointed
by the
company
will fully
compensate
for the
caused
losses of
Victor
Onward
Holdings in
5 working
days after
receiving
89
Sino Great Wall Co., Ltd. 2018 Annual Report
the notice.
According
to the Term
5.5.4 of
Agreement,
after the
date of
assets
delivery,
any
compensatio
ns,
obligations
of payment
and
penalties
caused by
disposed
assets as
well as
unsettled
disputes in
Victor
Onward
Holdings
will be
undertaken
and solved
by the
company or
the third
party
appointed
by the
company,
and Victor
Onward
Holdings
assumes no
responsibilit
y. When
there are
losses
caused by it,
90
Sino Great Wall Co., Ltd. 2018 Annual Report
the
company or
the third
party
appointed
by the
company
will fully
compensate
for the
caused
losses of
Victor
Onward
Holdings in
5 working
days after
receiving
the notice.
According
to the Term
5.6.1 of
Agreement
and based
on the
principle of
“staff
arrangement
according to
the assets”,
the labor
relations,
social
insurance
relations
including
pension,
medical
treatment,
unemploym
ent, working
injury and
maternity,
and other
91
Sino Great Wall Co., Ltd. 2018 Annual Report
liable
welfare and
salary of all
the staff in
Victor
Onward
Holdings.
(including
but not
limited to
on-post
Shenzhen
Victor
Onward
Textile
Industrial
Co., Ltd.
The Third
Quarterly
Report
2015. 25
employees,
employees
awaiting job
assignments
, retired
employees,
retained
employees
with
suspend
salary,
transferred
employees,
and
temporary
employees,
etc) will be
transferred
to the
company or
the third
party
appointed
92
Sino Great Wall Co., Ltd. 2018 Annual Report
by the
company.
Compensati
ons or
related
matters (if
any) due to
the
termination
of labor
relationship
in advance
with Victor
Onward
Holdings,
the
company or
the third
party
appointed
by the
company
will be in
charge of
the
payment.
The
company
promises
that for the
losses
caused by
matters such
as the
above-menti
oned debt
transfers of
disposed
assets,
personnel
arrangement
, unsettled
disputes,
potential
93
Sino Great Wall Co., Ltd. 2018 Annual Report
debts,
payment
obligations
and
penalties,
the
company or
the third
party
appointed
by the
company
will fully
compensate
for the
losses of
Victor
Onward
Holdings
due to the
above-menti
oned
matters
based on the
Agreement
in cash.
Commitments make in initial public
No No No No No
offering or re-financing
Equity incentive commitment No No No No
Other commitments for medium
No No No No
and small shareholders
Completed on time(Y/N) Yes
If the commitments are not fulfilled
on time, shall explain the specify Nil
reason and the next work plan
2.The existence of the company's assets or projects earnings forecasts and earnings reporting period is still
in the forecast period, the company has assets or projects meet the original profit forecast made and the
reasons explained
□Applicable √ Not applicable
94
Sino Great Wall Co., Ltd. 2018 Annual Report
IV. Particulars about the non-operating occupation of funds by the controlling shareholder
□ Applicable √ Not applicable
No non-operating occupation from controlling shareholders and its related party in the period.
V. Explanation of the Supervisory Committee and Independent Directors (If applicable)on
the Qualified Auditor’s Report Issued by the CPAs.
√ Applicable □ Not applicable
Reanda Certified Public Accountants (LLP) audited the financial report of Sino Great Wall Co., Ltd. (hereinafter referred to as "the
Company") for 2018 and issued an Audit Report, (LADS Zi [2019] No 2333), which was unable to provide opinions. The board of
directors, board of supervisors and independent directors of the company issued the following relevant explanations:
1. Special Notes of the Board of Directors on Matters Involving Non-standard Audit Opinions in 2018 Financial Report
The board of directors believes that "matters that lead to the inability to express opinions" fully reveal the risks faced by the company
and objectively reflect the actual situation and financial situation of the company. The board of directors of the company agrees to the
audit report issued by Reanda Certified Public Accountants (Special General Partnership) for the 2018 financial report of the
company that cannot express opinions. The Board of Directors of the Company will take effective measures to eliminate the above
risk factors as far as possible.
2. The opinions of the Board of Supervisors on the special statement of the Board of Directors on matters concerning the
non-standard audit opinion in the 2018 financial report
In the opinion of the Board of Supervisors: Reanda Certified Public Accountants (Special General Partnership) has issued a
disclaimer audit report on the Company's 2018 financial report based on professional judgment. We respect the professional opinions
of the accountants and agree with the special statement of the Board of Directors on the matters covered in the disclaimer audit report.
The Board of Supervisors will actively cooperate with the Board of Directors, keep an eye on the development of the relevant work
of the Board of Directors and the management continuously, and earnestly safeguard the legitimate rights and interests of the
Company and all shareholders. Meanwhile, the Board of Supervisors hopes that the Board of Directors and the management will take
effective measures to eliminate the contents mentioned in the audit report that lead to the inability to express opinions as soon as
possible, so as to effectively safeguard the interests of the majority of investors.
3. Independent opinions of the independent directors on matters concerning the non-standard audit opinion in the 2018 financial
report
After the relevant information consulted and communicating with the audit institution and relevant personnel, as an independent
director of the Company, we consider that the disclaimer audit report on the 2018 financial report of the Company issued by Reanda
Certified Public Accountants (LLP) is based on professional judgement, and we respect the professional opinions of the accountants
and agree with the special statement of the Board of Directors on the matters covered in the disclaimer audit report. The measures
taken or to be taken by the Board of Directors are conducive to eliminating the matters concerning this disclaimer audit report of
opinion and their impacts. We will urge the Board of Directors and the management of the Company to pay continuous attention to
this matter and earnestly safeguard the rights and interests of the Company and all shareholders.
VI. Explain change of the accounting policy, accounting estimate and measurement methods
as compared with the financial reporting of last year.
√Applicable □Not applicable
The format of financial statements of general enterprises has been revised in accordance with the provisions of Notice on Revision
and Issue of 2018 Format of Financial Statements for General Enterprises (CK [2018] No.15) issued by the Ministry of Finance.
95
Sino Great Wall Co., Ltd. 2018 Annual Report
VII. Explain retrospective restatement due to correction of significant accounting errors in
the reporting period
□Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
VIII. Explain change of the consolidation scope as compared with the financial reporting of
last year.
√Applicable □Not applicable
During the reporting period, the changes in the scope of consolidated statements are detailed in the notes to the financial reports.
IX. Engagement/Disengagement of CPAs
CPAs currently engaged
Name of the domestic CPAs Reanda Certified Public Accountants LLP
Remuneration for domestic accounting firm (Ten thousand
260
yuan)
Continuous life of auditing service for domestic accounting
1
firm
Name of domestic CPA Wang Xinyu, Zhou Zhonghua
Continuous life of auditing service for domestic accounting
1
firm
Has the CPAs been changed in the current period
√ Yes □No
Whether change the appointment of account firm during the auditing period or not
□ Yes √No
Whether perform approval procedures when change the appointment of account firm or not
√ Yes □No
A detailed explanation of the change of employment and accounting firm
Due to the arrangement of project personnel of Shu Lun Pan CPAs (Special General Partnership) and other reasons, its 2018 annual
audit work time cannot match the company's plan; Meanwhile, considering that it has provided auditing services for the company for
many years, in order to ensure the independence and objectivity of the company's audit work, the fourth meeting of the company's
eighth board of directors and the first extraordinary general meeting of shareholders in 2019 deliberated and passed the Proposal on
Replacement of Accounting Firm, it was agreed to employ Reanda Public Certified Accountants (special general partnership) as the
company's 2018 annual financial report and internal control auditing body for a period of one year. For details, please refer to the
company's announcements 2019-007,2019-010 and 2019-016 published on Cninf on January 29, 2019 and February 14, 2019.
CPAs firm for the internal control audit
√applicable □ Not applicable
In the current year, the company engaged Reanda Certified Public Accountants LLP as the internal control audit accounting firm,
during the period, the company totally pays RMB 600,000 for the internal control audit expenses.
96
Sino Great Wall Co., Ltd. 2018 Annual Report
X. Situation of Facing Listing Suspension and Listing Termination after the Disclosure of the
Yearly Report
□Applicable √ Not applicable
XI. Bankruptcy reorganization
□Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period.
XII. Significant lawsuits and arbitrations of the Company
√ Applicable □Not applicable
Involved
Index to
amount
General Decisions and Execution of Disclosure disclosed
（Ten Provision Progress
information effects decisions date informatio
thousand
n
yuan)
First-instance On August
judgment: 31, 2018, it
Defendant I was
shall repay the disclosed
principal of 88， in the 2018
082，007.52 Semi-annu
yuan and The al Report
overdue interest Guangdong on Cninf;
of 1，377， Shenzhen On
936.36 yuan; Intermediate September
Second Defendants II, People's 2018,
Loan Contract
instance III and IV shall Court issued Announce
Dispute Case with
judgment be jointly and (2019) August ment on
Shenzhen 12,811.63 No
is given severally liable; Y03Z701 31,2018 the
Guodingsheng
and case Defendant V enforcement Company,
Trading Co., Ltd.
is closed shall assume verdict, with Its
the pledge a mandatory Wholly-ow
guarantee enforcement ned
responsibility of 88，941， Subsidiarie
and other 110.88 yuan. s and
claims are Controlling
rejected. The Shareholde
second instance rs
judgment was Receiving
as follows: The and <
original verdict Property
was upheld. Report
Order>; On
October
23, 2018,
Announce
ment on
Reply to
Inquiry
Letter on
Semi-annu
al Report
of
Shenzhen
Stock
Exchange(
Announce
ment
No.:2018-1
25）; On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)；
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
98
Sino Great Wall Co., Ltd. 2018 Annual Report
April 19,
2019
(Announce
ment No.:
2019-036)
On August
31, 2018, it
was
disclosed
in the 2018
Semi-annu
al Report
on Cninf;
On
September
2018,
Announce
ment on
the
Company,
The Its
first-insta Wholly-ow
Financial loan
nce ned
contract dispute
verdict Subsidiarie
case of Zhuhai August
4,997.22 No was s and
Branch of Xiamen 31,2018
closed Controlling
International
and an Shareholde
Bank Co., Ltd.
appeal rs
was filed. Receiving
and <
Property
Report
Order>; On
October
23, 2018,
Announce
ment on
Reply to
Inquiry
Letter on
Semi-annu
al Report
99
Sino Great Wall Co., Ltd. 2018 Annual Report
of
Shenzhen
Stock
Exchange(
Announce
ment
No.:2018-1
25）; On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
On August
31, 2018, it
was
Under
disclosed
enforcement
in the 2018
On February
Semi-annu
2, 2019,
al Report
Shenzhen
on Cninf;
Intermediate
The On
People's
judgment September
Loan contract Court issued
is given August 2018,
dispute case with 16,192.92 No — (2019)
and the 31,2018 Announce
Li Qiaoli Y03Z65
case is ment on
enforcement
closed. the
verdict, with
Company,
a mandatory
Its
enforcement
Wholly-ow
of
ned
177.,194128
Subsidiarie
million yuan
s and
Controlling
Shareholde
100
Sino Great Wall Co., Ltd. 2018 Annual Report
rs
Receiving
and <
Property
Report
Order>; On
October
23, 2018,
Announce
ment on
Reply to
Inquiry
Letter on
Semi-annu
al Report
of
Shenzhen
Stock
Exchange(
Announce
ment
No.:2018-1
25）; On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
Loan contract Waiting On August
dispute case of for the 31, 2018, it
August
Shenzhen Brach 9,523.09 No judgment — — was
31,2018
of Bank of of first disclosed
Ningbo instance. in the 2018
101
Sino Great Wall Co., Ltd. 2018 Annual Report
Semi-annu
al Report
on Cninf;
On
September
2018,
Announce
ment on
the
Company,
Its
Wholly-ow
ned
Subsidiarie
s and
Controlling
Shareholde
rs
Receiving
and <
Property
Report
Order>; On
October
23, 2018,
Announce
ment on
Reply to
Inquiry
Letter on
Semi-annu
al Report
of
Shenzhen
Stock
Exchange(
Announce
ment
No.:2018-1
25）; On
February
20, 2019,
102
Sino Great Wall Co., Ltd. 2018 Annual Report
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
On August
31, 2018, it
was
disclosed
in the 2018
Semi-annu
al Report
on Cninf;
On
September
Shenzhen 2018,
Intermediate Announce
People's ment on
Loan contract The Court issued the
dispute case of judgment (2018) Company,
Industrial Bank is given Y03Z2798, August Its
29,137.97 No —
(China) Shenzhen and the with a 31,2018 Wholly-ow
Houhai case is mandatory ned
Sub-branch closed. enforcement Subsidiarie
of s and
293,399,781 Controlling
yuan. Shareholde
rs
Receiving
and <
Property
Report
Order>; On
October
23, 2018,
103
Sino Great Wall Co., Ltd. 2018 Annual Report
Announce
ment on
Reply to
Inquiry
Letter on
Semi-annu
al Report
of
Shenzhen
Stock
Exchange(
Announce
ment
No.:2018-1
25）; On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019);
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
Enforcement case 11,711.49 No The — Under September On
104
Sino Great Wall Co., Ltd. 2018 Annual Report
of Shaanxi (2018) enforcement 14,2018 September
International Trust XZZF Zi 2018,
Co., Ltd No. 140 Announce
execution ment on
certificate the
issued by Company,
Xi'an Its
Notary Wholly-ow
Office ned
has Subsidiarie
become s and
legally Controlling
effective, Shareholde
and rs
Shaanxi Receiving
Internatio and <
applied to Property
Beijing Report
Second Order>; On
Intermedi October
ate 23, 2018,
People's Announce
Court for ment on
compulso Reply to
ry Inquiry
execution Letter on
Semi-annu
al Report
of
Shenzhen
Stock
Exchange(
Announce
ment
No.:2018-1
25）; On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
105
Sino Great Wall Co., Ltd. 2018 Annual Report
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019);
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
The On
Notice of September
Enforcem 2018,
ent from Announce
Beijing ment on
Third the
Intermedi Company,
ate Its
Enforcement case
People's Wholly-ow
of CCB
Court on ned
International
the Case Consumption Under September Subsidiarie
Asset 21,111.82 No
of restriction order enforcement 18,2018 s and
Management
Notarizati Controlling
(Shanghai) Co.,
on of Shareholde
Ltd
Creditor's rs
Rights Receiving
Documen and <
the Property
Company Report
and CCB Order>; On
106
Sino Great Wall Co., Ltd. 2018 Annual Report
Internatio February
nal Asset 20, 2019,
Managem Announce
ent ment on
(Shangha Reply to
i) Co., Shenzhen
Ltd. is Stock
received Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
1. Confirm the On
outstanding September
loan principal 2018,
of 49.8 million Announce
yuan and ment on
interest. 2. Pay the
interest of Company,
5,342,800 yuan Its
before July 25, Wholly-ow
2018. 3. Pay ned
interest of 15 Subsidiarie
million yuan s and
before July 31, Controlling
The case 2018. 4. Pay Shareholde
Loan dispute case is closed principal of Under September rs
4,980 No
with Chen Jiang through 34.8 million enforcement 18,2018 Receiving
mediation yuan before and <
lawsuit fee of Property
290,800 yuan Report
and Order>; On
preservation fee October
of 5000 yuan 23, 2018,
shall be borne Announce
by Sino Stock ment on
Company. Pay Reply to
off before July Inquiry
31, 2018. 6. Letter on
Other Semi-annu
107
Sino Great Wall Co., Ltd. 2018 Annual Report
defendants al Report
shall pay off of
jointly and Shenzhen
severally. 7. Stock
Chen Jiang Exchange;
shall apply for Announce
unsealing ment on
within 3 days Enforceme
after the nt of
aforesaid Company
payment is Shares
completed. 8. Held by
Failure to pay Directors
the aforesaid and Senior
amount may be Executives
subject to on January
enforcement. 9. 5, 2019;
Chen Jiang has On
the priority of February
compensation 20, 2019,
for the pledge Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
On October
23, 2018,
The
Announce
first-insta
ment on
nce
Contract dispute Reply to
verdict
case with Gome October Inquiry
4,285.52 No was — —
Cinda Factoring 23,2018 Letter on
closed
Co., Ltd. Semi-annu
and an
al Report
appeal
of
was filed.
Shenzhen
Stock
108
Sino Great Wall Co., Ltd. 2018 Annual Report
Exchange;
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019);
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
Announce
ment on
Partial
Debt
Overdue on
Financial loan Waiting
September
contract dispute for the
September 15, 2018;
case with Bohai 36,492.18 No judgment — —
15,2018 Announce
International Trust of first
ment on
Co., Ltd. instance.
Receiving
Civil
Complaint
on October
9, 2018;
109
Sino Great Wall Co., Ltd. 2018 Annual Report
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
Announce
ment on
Partial
Debt
Overdue on
September
15, 2018;
Announce
ment on
Receiving
Civil
Complaint
Financial loan The
on October
contract dispute first-insta
13, 2018；
case with China nce September
10,245.74 No — — On
Industrial verdict 15,2018
February
International Trust was
20, 2019,
Limited closed
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019);
110
Sino Great Wall Co., Ltd. 2018 Annual Report
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
Sino Great Wall
Announce
shall repay the
ment on
loan principal
Partial
of 100 million
Debt
yuan, the
Overdue on
interest
September
calculated
15, 2018;
according to
Announce
the interest rate
ment on
agreed in the
Receiving
contract from
Civil
June 30, 2018
Complaint
Financial loan The to August 7,
on October
contract dispute first-insta 2018, the
13, 2018；
case with China nce overdue interest September
10,113.78 No — On
Industrial verdict (default 15,2018
February
International Trust was interest)
20, 2019,
Limited closed calculated
Announce
according to
ment on
the interest rate
Reply to
agreed in the
Shenzhen
contract from
Stock
August 8 in
Exchange's
2018 to the
Letter of
actual
Concern(A
repayment date,
nnounceme
and the
nt
compound
No.::2019-
interest
019)
calculated
111
Sino Great Wall Co., Ltd. 2018 Annual Report
according to
the interest rate
agreed in the
contract from
July 5, 2018 to
the actual
repayment date;
The Sino Great
Wall shall pay
the legal fee of
80,000 yuan; If
Sino Great Wall
fails to fulfill
the first and
second debts
mentioned
above, China
Industrial
International
has the right to
receive priority
compensation
within the
scope of this
judgment
according to
the Pledge
Contract of
Accounts
Receivable
signed by both
parties; Chen
Lue and He
Feiyan shall
bear joint and
several
liabilities for
the first and
second debts
mentioned
above; Other
claims are
rejected. The
case acceptance
112
Sino Great Wall Co., Ltd. 2018 Annual Report
fee is
547,488.89
yuan, of which
5050 yuan shall
be borne by
China
Industrial
International,
and 542,438.89
yuan shall be
borne jointly by
Sino Great
Wall, Chen Lue
and He Feiyan.
The case
preservation fee
of 5,000 yuan
shall be shared
by Sino Great
Wall, Chen Lue
and He Feiyan.
Announce
ment on
Receiving
Civil
Complaint
on October
13, 2018；
On
The The plaintiff February
Bill dispute case judgment has not yet 20, 2019,
with Jiaozuo is given applied for October Announce
305 No —
Junpeng Coal Co., and the enforcement 13,2018 ment on
Ltd. case is for failure to Reply to
closed. perform Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019)
113
Sino Great Wall Co., Ltd. 2018 Annual Report
Announce
ment on
Receiving
Civil
Complaint
on October
13, 2018；
On
The The plaintiff February
Bill dispute case
judgment has not yet 20, 2019,
with Tongchuan
is given applied for October Announce
New District 456 No —
and the enforcement 13,2018 ment on
Hengxin Building
case is for failure to Reply to
Material Co., Ltd.
closed. perform Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
Announce
ment on
Receiving
Civil
Complaint
on October
13, 2018；
On
The The plaintiff February
Bill dispute case
judgment has not yet 20, 2019,
with Xian Bihui
is given applied for October Announce
Road & Bridge 507 No —
and the enforcement 13,2018 ment on
Engineering Co.,
case is for failure to Reply to
Ltd.
closed. perform Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019)
114
Sino Great Wall Co., Ltd. 2018 Annual Report
Announce
ment on
Early
Terminatio
n of
Collective
Funds
Trust Plan
for Trust
Loan on
September
14, 2018；
Announce
ment on
Partial
Debt
Overdue on
September
15, 2018;
The Announce
Financial loan
judgment ment on
contract dispute
is given September Receiving
case with Datong 13,801.32 No — —
and the 14,2018 Civil
Securities Co.,
case is Complaint
Ltd.
closed. on October
18,
2018(Anno
uncement
No.:2018-1
20);On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019);
115
Sino Great Wall Co., Ltd. 2018 Annual Report
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
Announce
ment on
Receiving
Civil
Complaint
on October
24, 2018；
Announce
ment on
Receiving
Notice of
Early
Financial loan Maturity of
contract dispute Waiting Debt on
case of Ping An for a October October
2,905.1 No — —
International court 24,2018 26, 2018;
Financial Leasing decision. On
Co., Ltd. February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
116
Sino Great Wall Co., Ltd. 2018 Annual Report
019)
Announce
ment on
Receiving
Civil
Complaint
on October
24, 2018；
On
February
20, 2019,
Announce
ment on
Reply to
The Shenzhen
first-insta Stock
nce Exchange's
verdict Letter of
Private loan
was October Concern(A
dispute case with 3,143.18 No — —
closed 24,2018 nnounceme
Gong Lihong
and the nt
company No.::2019-
has 019) ;
appealed Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
Announce
Right of recourse Waiting ment on
dispute case with for the Receiving
October
Shenzhen Yi'an 301.89 No judgment — — Civil
24,2018
Factoring Co., of first Complaint
Ltd. instance on October
24, 2018；
117
Sino Great Wall Co., Ltd. 2018 Annual Report
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019);
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
Announce
ment on
Receiving
Notice of
Early
Loan contract Waiting Maturity of
dispute case with for the Debt on
September
Zhongjiang 32,738.68 No judgment — — September
29,2018
International Trust of first 29, 2018
Co., Ltd. instance ；
Announce
ment on
Receiving
Civil
Complaint
118
Sino Great Wall Co., Ltd. 2018 Annual Report
on
November
10, 2018；
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
Announce
ment on
Receiving
and
on
The February
Loan dispute case enforcem 13, 2019;
with China ent In February On
2,140.87 No —
Railway Trust verdict commission 13,2019 February
Co., Ltd. has been 20, 2019,
received. Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
119
Sino Great Wall Co., Ltd. 2018 Annual Report
019)
Announce
ment on
Receiving
and
on
Financial loan
February
contract dispute
13, 2019;
case with No trial
On
Shenzhen Branch has yet February
7,017.76 No — — February
of Shanghai been 13,2019
20, 2019,
Pudong held.
Announce
Development Co.,
ment on
Ltd.
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019)
Announce
ment on
Receiving
and
Financial loan
Mediatio
Branch of China
litigation. on
Minsheng Bank
February
13, 2019;
On
February
20, 2019,
Announce
120
Sino Great Wall Co., Ltd. 2018 Annual Report
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019)
Announce
ment on
Receiving
and
on
Enforcement case February
with Beijing 13, 2019;
Zhongguancun On
Enforcem In February
Sci-tech 736.1 No — February
ent. commission 13,2019
Financing 20, 2019,
Guaranty Co., Announce
Ltd. ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019)
Announce
Sales contract No trial ment on
dispute case with has yet February Receiving
489.33 No — —
Jieyang Fangyuan been 13,2019 and
121
Sino Great Wall Co., Ltd. 2018 Annual Report
on
February
13, 2019;
On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019)
Announce
ment on
Receiving
and
Installation
on
contract dispute No trial
February
case with lvmeiyi has yet February
1,412.36 No — — 13, 2019;
Environmental been 13,2019
On
Construction held.
February
Group Co., Ltd.
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
122
Sino Great Wall Co., Ltd. 2018 Annual Report
nnounceme
nt
No.::2019-
019)
Announce
ment on
Receiving
and
on
February
13, 2019;
On
February
20, 2019,
Announce
ment on
Reply to
Contract of hired Waiting
Shenzhen
work dispute case for the
February Stock
with Shanghai 219.97 No judgment — —
13,2019 Exchange's
Disheng Wood of first
Letter of
Co., Ltd. instance
Concern
(Announce
ment
No.::2019-
019);
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
123
Sino Great Wall Co., Ltd. 2018 Annual Report
2019-036)
Announce
ment on
Receiving
,
and
on
February
19, 2019;
On
February
20, 2019,
The
Announce
first-insta
ment on
nce
Loan dispute case Reply to
verdict
with Henan No.1 Shenzhen
was February
Thermal Power 4,717.75 No — — Stock
closed 19,2019
Construction Co., Exchange's
and the
Ltd. Letter of
company
Concern(A
has
nnounceme
appealed
nt
No.::2019-
019) ;
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
124
Sino Great Wall Co., Ltd. 2018 Annual Report
Announce
ment on
Receiving
,
and
Mediatio on
reached, February
Contract dispute
waiting 19, 2019;
case with Gome February
4,163.7 No for the — — On
Cinda Factoring 19,2019
court to February
Co., Ltd.
deliver 20, 2019,
the Announce
mediation ment on
document Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019)
Announce
ment on
Receiving
,
Loan contract
judgment 19,2019
Li Shaoxiong and
on
February
19, 2019;
On
125
Sino Great Wall Co., Ltd. 2018 Annual Report
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
Announce
ment on
Receiving
,
and
on
The
February
enforcem
Enforcement case 19, 2019;
ent In February
with Bairui Trust 30,736.58 No — On
verdict commission 19,2019
Co., Ltd. February
has been
20, 2019,
received.
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concer(An
nouncemen
t
No.::2019-
019)
126
Sino Great Wall Co., Ltd. 2018 Annual Report
Announce
ment on
Receiving
,
and
on
of construction February
In the
equipment with 19, 2019;
trial of February
Zhejiang Huatie 979.05 No — — On
first 19,2019
Construction February
instance
Support 20, 2019,
Technology Co., Announce
Ltd. ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019)
Announce
ment on
Receiving
,
Construction
for the
case with Wang 19,2019
of first and
Kaixiang
instance on
February
19, 2019;
On
127
Sino Great Wall Co., Ltd. 2018 Annual Report
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019);
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
Announce
ment on
Receiving
,
Labor subcontract is issued
Hunan Zhongjian 251.57 No arbitratio — —
19,2019 and
Construction n and the
on
February
19, 2019;
On
February
128
Sino Great Wall Co., Ltd. 2018 Annual Report
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern
(Announce
ment
No.::2019-
019);
Announce
ment on
the
Progress of
Major
Litigation
and
Arbitration
Matters on
April 19,
2019
(Announce
ment No.:
2019-036)
On August
31, 2018, it
was
disclosed
in the 2018
。Currently,
Semi-annu
Loan contract the company
al Report
dispute case with has repaid the
on Cninf;
Beijing Tellhow loan, and the August
3,017.5 No — On
Intelligent plaintiff 31,2018
September
Engineering Co., withdrew and
14, 2018,
Ltd. closed the
the
case.
Announce
ment on
the
Company,
Its
129
Sino Great Wall Co., Ltd. 2018 Annual Report
wholly-ow
ned
Subsidiarie
s and
Controlling
Shareholde
rs
Receiving
the Notice
of
Enforceme
nt and the
Property
Report
Order; On
October
23, 2018,
Announce
ment on
Reply to
Inquiry
Letter on
Semi-annu
al Report
of
Shenzhen
Stock
Exchange(
Announce
ment
No.:2018-1
25）
On
September
14, 2018,
Contract dispute Currrently,
the
case for the payment
Nolle Announce
construction has been
prosequi September ment on
project with 59.85 No — completed
and case 14,2018 the
Anhui Tiangan and the case
closed Company,
Construction Co., has been
Its
Ltd. closed.
wholly-ow
ned
Subsidiarie
130
Sino Great Wall Co., Ltd. 2018 Annual Report
s and
Controlling
Shareholde
rs
Receiving
the Notice
of
Enforceme
nt and the
Property
Report
Order; On
October
23, 2018,
Announce
ment on
Reply to
Inquiry
Letter on
Semi-annu
al Report
of
Shenzhen
Stock
Exchange(
Announce
ment
No.:2018-1
25）
Right to recourse
Announce
dispute case with
The plaintiff ment on
China Arts Nolle
withdrew the Receiving
Century prosequi August
43.8 No — lawsuit and Civil
Construction & and case 24,2018
closed the Complaint
Decoration closed
case. on October
Design (Beijing)
24, 2018
Co., Ltd.
Announce
Financial loan
No trial ment on
contract case with
has yet March 1, Receiving
SPD 7,977.89 No
been 2019 on March
131
Sino Great Wall Co., Ltd. 2018 Annual Report
1, 2019
Announce
Financial loan ment on
No trial
contract case with Receiving
has yet March 1,
Shanghai 27,411.99 No on March
1, 2019
Announce
Financial loan ment on
No trial
contract case with Receiving
has yet March 1,
Bank of 7,934.39 No on March
1, 2019
Announce
ment on
Receiving
Financial loan and
through 8,2019
Bank .Fuzhou on April
8, 2019
Announce
ment on
Receiving
and
SPD Bank Beijing through 8,2019
on April
8, 2019
Financial loan Announce
contract case with In the ment on
Hunan Jinjude first April Receiving
502 No
Construction instance 8,2019 and
132
Sino Great Wall Co., Ltd. 2018 Annual Report
on April
8, 2019
Announce
ment on
Receiving
Dispute case over and
instance 8,2019
contract with Xu on April
8, 2019
Announce
ment on
Receiving
Financial loan and
through 8,2019
Bank .Guangzhou on April
8, 2019
Announce
ment on
Financial loan Receiving
The case
contract case with
mediation
Branch plication >
on April
13, 2019
On
February
20, 2019,
Other small October
4,411.59 No — — — Announce
litigations 23,2018
ment on
Reply to
Shenzhen
133
Sino Great Wall Co., Ltd. 2018 Annual Report
Stock
Exchange's
Letter of
Concer；On
August 31,
2018, it
was
disclosed
in the 2018
Semi-annu
al Report
on Cninf
by 34.4954
million
yuan; On
February
20, 2019,
Announce
ment on
Reply to
Shenzhen
Stock
Exchange's
Letter of
Concern(A
nnounceme
nt
No.::2019-
019)
XIII. Situation of Punishment and Rectification
√ Applicable □Not applicable
Type of Conclusion (if Disclosure
Name Type Reasons Disclosure date
Punishment any) index
As the An As of the
company is investigation is disclosure date
suspected of filed or an of this （www.cninfo.
violating laws administrative announcement, com.cn）
Sino Great Wall October
The company and regulations punishment is the company （Announceme
Co., Ltd 19,2018
in information imposed by the has not yet nt
disclosure, China received the No.:2018-121）
according to Securities China
the relevant Regulatory Securities
134
Sino Great Wall Co., Ltd. 2018 Annual Report
provisions of Commission Regulatory
the Securities Commission's
Law of the concluding
People's comments or
Republic of decisions on
China, the relevant
CSRC has investigation
decided to matters.
initiate an
investigation in
the company.
The Shenzhen
Decision on
Supervision
Administrative
Bureau of
Supervision
China
Measures of
Securities （www.cninfo.
Shenzhen
Regulatory Be investigated com.cn）
Sino Great Wall Supervision
The company Commission by a competent March 7,2019 （Announceme
Co., Ltd Bureau of
will conduct authority nt
China
on-site No.:2019-022）
Securities
inspections of
Regulatory
the company
Commission
from May 2018
([2019] No.11)
onwards
Decision on
Administrative
The Shenzhen Supervision
Supervision Measures of
Bureau of Shenzhen
China Supervision
Chen Lue, Tian Securities Bureau of （www.cninfo.
Wei, Tang Regulatory Be investigated China com.cn）
Senior
Xianyong, Cui Commission by a competent Securities March 7,2019 （Announceme
executives
Hongli and will conduct authority Regulatory nt
Yang Chunling on-site Commission No.:2019-022）
inspections of [2019] No.12
the company [2019]No.13
from May 2018 [2019]No.14
onwards [2019]No.15
and
[2019]No.16
The Shenzhen Be investigated Decision on （www.cninfo.
Chen Lue Director March 7,2019
Supervision by a competent Administrative com.cn)
135
Sino Great Wall Co., Ltd. 2018 Annual Report
Bureau of authority Supervision （Announceme
China Measures of nt
Securities Shenzhen No.:2019-022）
Regulatory Supervision
Commission Bureau of
will conduct China
on-site Securities
inspections of Regulatory
the company Commission
from May 2018 ([2019] No.12)
onwards
Explanation on Rectification
√Applicable □Not applicable
On October 18, 2018, the company received the notice of investigation issued by the China Securities Regulatory Commission (No:
JDC Zi No. 18041). As the company is suspected of violating laws and regulations in information disclosure, according to the
relevant provisions of the Securities Law of the People's Republic of China, the CSRC has decided to initiate an investigation in the
company. On March 6, 2019, the company received the Shenzhen Securities Regulatory Bureau's Decision on Administrative
Supervision Measures (No 2019] 11, No. [2019] 12 , No. [2019] 13 ,No. [2019] 14 , No. [2019] 15, and No. [2019] 16) showing that
the Shenzhen Securities Regulatory Bureau had carried out on-site inspection of the company since May 2018, and the Shenzhen
Securities Regulatory Bureau had filed a case for investigation on the illegal disclosure of relevant information found in the
inspection; In addition, through inspection, it is also found that the company had the following problems "I. The income cost
accounting is not standardized, and expenses are charged through out-of-account fund accounts; II. It did not disclose the changes in
major items in a timely manner, the preparation of performance forecasts and performance report is not prudent; III. It has capital
exchanges of no real business foundation with a number of companies, and illegal foreign financial assistance; IV. The relevant
management system for raising funds is not perfect; V. Registration management for information insider is not standardized". The
Shenzhen Securities Regulatory Bureau decided to take corrective measures against the company, the company's relevant directors,
senior management personnel, and issue warning letters to Mr. Chen Lue, Mr. Tian Wei, Mr. Tang Xianyong, Ms. Cui Hongli, Ms.
Yang Chunling (see 2018-121, 2019-022,2019-033) In response to the relevant problems found during the inspection against the
company, the company has made serious rectification in accordance with the matters involved in the Decision on Taking Corrective
Measures against Sino Great Wall Co., Ltd. ([2019] No.11). In addition to the above matters, Shenzhen Securities Regulatory Bureau
requires the company to employ a third party independent agency to conduct special inspections on the problems of NPP-0057 in
Xingang, Qatar, Cambodia Refinery and NAGA Casino Phase II project in Cambodia.
As of the disclosure date of this announcement, the company has not yet received the China Securities Regulatory Commission's
concluding comments or decisions on relevant investigation matters.
XIV. Credit Condition of the Company and its Controlling Shareholders and Actual
Controllers
√Applicable □Not applicable
(I) The integrity of the company and its subsidiaries
1. The company and its wholly-owned subsidiary Sino International Engineering Co., Ltd. were incorporated into the list of
defaulters due to breach by the Beijing Second Intermediate People's Court due to the dispute with Shaanxi International Trust
Company Limited over financial loan contract. Currently, the case is in enforcement.
2. Due to a dispute with CCB International Asset Management (Shanghai) Co., Ltd over financial loan contract, the company and its
136
Sino Great Wall Co., Ltd. 2018 Annual Report
wholly-owned subsidiary Sino International Engineering Co., Ltd. were incorporated into the list of defaulters by the Beijing Third
Intermediate People's Court. Currently, the case is in enforcement.
3. The company was incorporated into the list of defaulters by Beijing Third Intermediate People's Court due to the dispute with
Bairui Trust Co., Ltd. over financial loan contract. Currently, the case is in enforcement.
4. Due to a dispute with China Railway Trust Co., Ltd. over financial loan contract, the company and its wholly-owned subsidiary
Sino International Engineering Co., Ltd. were incorporated into the list of defaulters by the Chengdu Intermediate People's Court.
Currently, the case is in enforcement.
5. The company and its wholly-owned subsidiary Sino International Engineering Co., Ltd. were incorporated into the list by the
Haidian District People's Court of Beijing for notarizing the enforcement of creditor's rights documents with Beijing Zhongguancun
Sci-tech Financing Guaranty Co., Ltd. Currently, the case is under trial.
6. Sino Great Wall International Engineering Co., Ltd., a subsidiary of the company, was incorporated into the list of defaulters by
Tangshan Intermediate People's Court for the dispute over the liability of victims of labor service providers with Cao Zhenrong.
Currently, the case is in enforcement.
7. Sino Great Wall International Engineering Co., Ltd., a subsidiary of the company, was incorporated into the list of defaulters by the
Tongzhou District People's Court of Beijing for its labor arbitration with Zhang Jie. Currently, the case is in enforcement.
For details of the above cases, please refer to the company's announcements 2018-107, 2018-125, 2018-109, 2019-018, 2019-019,
2019-015 published on Cninf (www.cninfo.com.cn) on September 14, 2018, October 23, 2018, September 18, 2018, February 19,
2019, February 20, 2019
(II) Integrity of controlling shareholders and actual controllers
1. Chen Lue, the controlling shareholder and actual controller of the company, has been incorporated into the list of defaulters, due to
his failure to perform the obligations specified in the effective legal documents, including:
1) In the dispute between the company and Shanxi International Trust Co., Ltd. over financial loan contract, Chen Lue, as the
guarantor and counter-guarantor, assumed joint and several guarantee liability for the above debts and was incorporated into the list
of defaulters by the Beijing Second Intermediate People's Court. Currently, the case is in enforcement.
2) In the dispute between the company and China Railway Trust Co., Ltd. over financial loan contract, Chen Lue, as the guarantor of
the counter-guarantor, assumed joint guarantee liability for the debt and was incorporated into the list of defaulters by the Chengdu
Intermediate People's Court. Currently, the case is in enforcement.
3) Chen Lue was incorporated into the list of defaulters by Tongzhou District People's Court of Beijing for a dispute over private
lending with Xia Honggan. Currently, the case is in the process of enforcement.
4) In the case of notarization of creditor's rights documents between the company and Beijing Zhongguancun Sci-tech Financing
Guaranty Co., Ltd., Chen Lue, as the guarantor and counter-guarantor, assumed joint and several guarantee liabilities for the debts
and was incorporated into the list of defaulters by the Haidian District People's Court of Beijing. Currently, the case is under trial.
5) In the dispute between the company and Bairui Trust Co., Ltd. over financial loan contract, Chen Lue, as the guarantor and
counter-guarantor, assumed joint guarantee liability for the debt and was incorporated into the list of defaulters by the Beijing Third
Intermediate People's Court. Currently, the case is in enforcement.
6) In the case of dispute over the financial loan contract between the Company and CCB International Asset Management (Shanghai)
Co., Ltd., Chen Lue as the counter guarantor assumed a joint surety bond liability for the debt and was incorporated by Beijing Third
Intermediate People's Court into the list of defaulters. Currently, the case is in enforcement.
Regarding particulars of the preceding case, please refer to Announcement 2018-107, 2018-125, 2019-015, 2019-019, 2019-018, and
2018-109 published by the Company at Cninf (www.cninfo.com.cn) on September 14, 2018, October 23, 2018, February 13, 2019,
February 20, 2019, February 19, 2019 and September 18, 2018 respectively.
2. The Company's holding shareholder and actual controller Chen Lue held 583,454,556 shares of the Company, accounting for 34.36%
of its total capital stock. In the report period, all the shares held by Mr. Chen Lue were frozen and waited for being frozen,
attributable to a property preservation caused by his assumption of personal joint guarantee for a subsidiary to carry out business
137
Sino Great Wall Co., Ltd. 2018 Annual Report
financing. For more information, please refer to Announcement on Waiting to Freeze Shares of the Holding Shareholder 2018-112,
2018-124, 2018-139, 2018-143, 2018-145 ,2018-150.2018-153,2018-155,2019-017 and 2019-025 published by the Company at
Cninf (www.cninfo.com.cn) on September 22, 2018, October 23, 2018, November 2, 2018, November 14, 2018, November 15, 2018,
November 20, 2018, November 28, 2018 ,December 22, 2018, February 6,2019 and March 27, 2019 respectively.
XV. Implementation Situation of Stock Incentive Plan of the Company, Employee Stock
Ownership Plan or Other Employee Incentive Measures
√Applicable □ Not applicable
The second meeting of the seventh board of directors, the second meeting of the seventh board of supervisors and the 2015 third
extraordinary general shareholder meeting were respectively convened by the company on Nov 5, 2015 and Nov 23, 205, at which
the Proposal on the First Phase of Employee Stock Ownership Plan (draft) of Shenzhen Victor Onward Textile Industrial Co., Ltd
was examined and approved.
Please refer to the published on November 7, 2015 and November 24,2015 (www.cninfo.com.cn) on the relevant announcement.
On December 24, 2015, the company as the asset trustor of the ESOP asset management plan, together with the asset manager-
Xingzheng Securities Asset Management Co., Ltd. and the asset trustee- China Everbright Bank Co., Ltd. signed the contract of
No.57 Xing Zheng Zi Guan Xin Zhong Assets Management Contract of the Collection Assets Management Plan which concretely
explained and stipulated the information included the basic information of the collection plan, participating in and withdrawal of the
collection plan, guarantee, classification of the collection plan, the management methods and the management rights of the customer
assets in the collection plan, the establishment of the collection plan, the expenses of the collection plan, the proceeds and its
distribution of the collection plan, investment philosophy and investment strategy, investment decision-making and risk control,
restrictions and prohibited behaviors of investment, information disclosure of the collection plan, transfer of the share of the
collection plan, non-transaction transfer ownership and freezing and so on.
Please refer to the published on December 29, 2015 (www.cninfo.com.cn) on the relevant announcement.
As of January 7, 2016, the company’s first phase of the employee stock ownership plan has completed the share-purchasing by means
of buying in the secondary security market, of which the average position price is RMB44.7578 per share, the total purchase quantity
is 833,187 shares which account for 0.1864% of the company's total share capital, and the total turnover is RMB37,291,630. The
lock-up period of the shares purchased under the plan is 12 months commenced from the date of this Announcement. Please refer to
the published on January 8, 2016 (www.cninfo.com.cn) on the relevant announcement.
On November 20, 2017, with the consent of more than two-thirds of the holders presented at the holders’ meeting, the “Proposal
on the one-year extension of the company's first phase ESOP” was passed. On November 21, 2017, the company held the
twenty-sixth meeting of the seventh board of directors, which reviewed and adopted the “Proposal on the one-year extension of the
company's first phase ESOP”, and according to the voting result of the holders’ meeting, the board agreed to extend the duration of
the company's first phase ESOP by one year, meaning that the ESOP can sell shares within the afore-said extension of one year (until
November 23, 2018).If the shares are not sold before the expiration of the extended one year, a further meeting of the holders and the
meeting of the board of directors can be convened two months before the expiration to consider the follow-up matters. Please refer to
the published on November 22, 2017 (www.cninfo.com.cn) on the relevant announcement.
On November 20, 2018, attendees of the holders' meeting with 2/3 of shares agreed and adopted the Proposal on Extending the
Company's First Staff Shareholding Plan for One Year. On November 21, 2018, the Company convened the second meeting of the
eighth Board of Directors, deliberating and adopting the Proposal on Extending the Company's First Staff Shareholding Plan for One
Year. According to voting results at the holders' meeting, the Board of Directors agreed to extend the Company's first staff
shareholding plan for one year, i.e., the former expiry date was extended to one year later--November 23, 2019. In the duration, once
138
Sino Great Wall Co., Ltd. 2018 Annual Report
the Company's shares held in the staff shareholding plan are sold out, the staff shareholding plan may be terminated beforehand. If
shares are not sold upon the expiry of the extended period, a holders' meeting and meeting of Board of Directors may be convened 2
months before the expiration to deliberate relevant following matters. Please refer to the published on November 22, 2018
(www.cninfo.com.cn) on the relevant announcement.
XVI. Material related transactions
1. Related transactions in connection with daily operation
□Applicable √ Not applicable
Nil
2. Related-party transactions arising from asset acquisition or sold
□Applicable √ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period.
3. Related-party transitions with joint investments
□Applicable √ Not applicable
No main related transactions of joint investment outside for the Company in reporting period.
4. Credits and liabilities with related parties
□Applicable √ Not applicable
Nil
5. Other significant related-party transactions
√ Applicable □Not applicable
On March 12, 2018, the company and Union Development Group Co., Ltd. and Chen Lue signed an Agreement
on the Economic Compensation for the Events after the Major Asset Restructuring Period of Shenzhen Victor
Onward Textile Industrial Co., Ltd. On March 17, 2018, the company and Union Development Group and Mr.
Chen Lue signed a Supplementary Agreement on Agreement on the Economic Compensation for the Events after
the Major Asset Restructuring Period of Shenzhen Victor Onward Textile Industrial Co., Ltd. On March 29, 2018,
the company received RMB 100 million as the economic compensation paid by Shenzhen Union Development
Investment Co., Ltd.
Website for temporary disclosure of the connected transaction
Announcement Date of disclosure Website for disclosure
Announcement on Signing the Economic March 20,2018 http://www.cninfo.com.cn
Compensation Agreement and Changes in
Shareholders' Commitments and Related
Transactions
139
Sino Great Wall Co., Ltd. 2018 Annual Report
Announcement on the Supplemental March 20,2018 http://www.cninfo.com.cn
Agreement for the Signing of the Economic
Compensation Agreement
XVII. Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
□Applicable √ Not applicable
No trusteeship, contract or leasing for the Company in reporting period.
(2) Contract
□ Applicable √ Not applicable
No any contract for the Company in the reporting period.
(3) Lease
√Applicable □ Not applicable
Notes
During the reporting period, the company's leasing expenses were mainly the company’s office space and staff
quarters’ capital expenditures.
The company's profit and loss has reached more than 10% of the company's total profit during the reporting
period
□ Applicable √ Not applicable
Nil
2.Guarantees
√ Applicable □ Not applicable
（1）Guarantees
Unit: 10,000 Yuan
Guarantee of the Company for the controlling subsidiaries (Exclude controlled subsidiaries)
Relevant Amount Date of Complet Guarante
Actual
Name of the disclosur of happening Guarantee Guarantee e e
mount of
Company e Guarante (Date of type term impleme for
guarantee
date/No. e signing ntation associate
140
Sino Great Wall Co., Ltd. 2018 Annual Report
of agreement) or not d
the parties
guarantee (Yes or
d no)
amount
Guarantee of the company for its subsidiaries
Amount
of
Actual date of
guarantee Amount Actual Comple Related
Guarantee provided occurring Type of
and date of the amount of Term ted or guarant
to (signing date guarantee
of guarantee guarantee not ee
of agreements
disclosur
e
The joint
March January
Sino International 70,000 70,000 liability 1 year No No
31, 2016 16,2017
guaranty
The joint
May 20, October
Sino International 12,000 12,000 liability 1 year No No
2017 28,2016
guaranty
The joint
March February 20,
Sino International 7,000 7,000 liability 1 year Yes No
31, 2016 2017
guaranty
The joint
May 20, March 12,
Sino International 12,000 12,000 liability 1 year No No
2017 2018
guaranty
The joint
March April 14,
Sino International 20,000 20,000 liability 1 year Yes No
31, 2016 2017
guaranty
The joint
March January 3,
Sino International 18,000 18,000 liability 1 year Yes No
31, 2016 2017
guaranty
The joint
May 20, June 7,
Sino International 12,000 12,000 liability 1 year Yes No
2017 2017
guaranty
The joint
March August 22,
Sino International 11,990 11,990 liability 1 year No No
29, 2018 2018
guaranty
The joint
May 20, July 25,
Sino International 40,000 40,000 liability 1 year No No
2017 2017
guaranty
The joint
May 20, June 30,
Sino International 22,000 22,000 liability 1 year No No
2017 2017
guaranty
141
Sino Great Wall Co., Ltd. 2018 Annual Report
The joint
May 20, October 18,
Sino International 20,000 20,000 liability 1 year No No
2017 2017
guaranty
The joint
May 20, November 22,
Sino International 10,000 10,000 liability 1 year No No
2017 2017
guaranty
The joint
May 20, November 30,
Sino International 10,000 10,000 liability 1 year No No
2017 2017
guaranty
The joint
March March 31,
Sino International 8,400 8,400 liability 30 months No No
31, 2016 2017
guaranty
The joint
May 20, February 13,
Sino International 8,000 8,000 liability 1 year No No
2017 2018
guaranty
The joint
May 20, December 20,
Sino International 20,000 20,000 liability 1 year No No
2017 2017
guaranty
The joint
Wuhan Commercial March 10,889.8 January 18,
10,889.81 liability 3 years No No
Work Hospital 31, 2016 1 2017
guaranty
The joint
Sino Great Wall March September 30,
3,500 3,500 liability 1 year No No
Construction 29, 2018 2018
guaranty
报告期内审批对子公司担保额 报告期内对子公司担保
1,000,000 315,780
度合计（B1） 实际发生额合计（B2）
报告期末已审批的对子公司担 报告期末对子公司实际
1,000,000 258,779.81
保额度合计（B3） 担保余额合计（B4）
子公司对子公司的担保情况
担保额
是否为
度相关 担保额 实际担保 是否履
担保对象名称 实际发生日期 担保类型 担保期 关联方
公告披 度 金额 行完毕
担保
露日期
Total of Company’s guarantee（namely total of the large three aforementioned）
Total of actual guarantee
Total of guarantee in the Period
1,000,000 in 315,780
（A1+B1+C1）
the Period（A2+B2+C2）
Total of actual guarantee
Total of guarantee at Period-end
1,000,000 at period-end 258,779.81
（A3+B3+C3）
（A4+B4+C4）
142
Sino Great Wall Co., Ltd. 2018 Annual Report
The proportion of the total amount of actually guarantee in the
1,100.24%
net assets of the company(A4+B4+C4)
Including:
Amount of guarantee for shareholders, actual controller and its
0
associated parties（D)
The debts guarantee amount provided for the Guaranteed
parties whose assets-liability ratio exceed 70% directly or 258,779.81
indirectly（E）
Amount of guarantee exceeds 50% of net capital（F） 208,205.88
Total Amount（D+E+F） 466,985.67
Explanations on possibly bearing joint and several liquidating
Nil
responsibilities for undue guarantees (If any)
Explanations on external guarantee against regulated
Nil
procedures (If any)
Description of the guarantee with complex method
（2）Illegal providing of external guarantees
□ Applicable √ Not applicable
No illegal providing of external guarantees in the report period.
3. Situation of Entrusting Others for Managing Spot Asset
(1) Situation of Entrusted Finance
□ Applicable √ Not applicable
Nil
(2) Situation of Entrusted Loans
□ Applicable √ Not applicable
Nil
4. Other significant contract
Applicable √ Not applicable
Non existence
XVIII. Social responsibility
1. Execution of social responsibility
In the report period, the Company took the initiative to fulfill the social responsibility. The Company highlighted work safety,
143
Sino Great Wall Co., Ltd. 2018 Annual Report
the safety management work of international projects and personnel in particular and kept improving its engineering construction
safety mechanism to implement occupational health guarantee and other measures with effort, put an end to major safety accidents,
and assure personal safety and health of staff; the Company kept improving its compensation and benefit system and modifying all
the labor and employment systems to create a harmonious employment relationship and provide broad development room for
employees with effort while giving a help to sick and needy employees to promote the harmonious development between employees
and society; the Company took the initiative to build a healthy and positive enterprise culture and highlighted improving the staff
quality by organizing training activities in a variety of forms on demand and frequently holding badminton, table tennis, and
basketball games and staff sports meetings to enrich the spare life of employees; besides, the Company paid all the taxes and dues in
full amount and carefully performed the social responsibility by law.
2. Precise poverty alleviation social responsibility
(1) Targeted poverty alleviation program
There is no precise poverty alleviation carried out in the period and no follow plan either.
(2) Annual precision poverty alleviation
(3) Accuracy of poverty alleviation
Index Measurement Quantity / Status
unit
I. General situation —— ——
II. Breakdown Input —— ——
1. Poverty alleviation by industrial —— ——
development
2. Poverty alleviation by transfer employment —— ——
3. Poverty alleviation by relocation —— ——
4. Educational poverty alleviation —— ——
5. Health poverty alleviation —— ——
6. Ecological protection poverty alleviation —— ——
7. Guarantee of all the details —— ——
8. Social poverty alleviation —— ——
9. Other projects —— ——
III. Awards (Content and level) —— ——
（4）Subsequent targeted poverty alleviation program
3. Information on environmental protection
The Listed Company and its subsidiary whether belong to the key sewage units released from environmental protection department
144
Sino Great Wall Co., Ltd. 2018 Annual Report
No
The Company and its subsidiaries do not belong to the key pollutant discharge units announced by the environmental protection
department.
XIX. Other material events
√ Applicable □ Not applicable
1. At the tenth meeting of the seventh Board of Directors and 2016 second extraordinary general meeting of shareholders held on July
7, 2016 and July 25, 2016 respectively, the Company deliberated and adopted a Proposal on Private Placement of A-share Stocks of
Sino Great Wall Co., Ltd. and planned to issue stocks to Sino Great Wall (Beijing) Investment Co., Ltd., Beijing Anben Medical
Investment Holding Co., Ltd. and Mr. Zheng Jihua to raise funds of RMB 2.5 billion. On October 14, 2016, China Securities
Regulatory Commission accepted the Company's application for private placement of stocks. On February 16, 2017, the Company
convened the sixteenth meeting of the seventh Board of Directors and the eleventh meeting of the seventh Board of Supervisors,
deliberating and adopting the Proposal on Adjustment of the Company's Plan for Private Placement of Stocks to adjust the sum of
funds raised to RMB 900 million. On March 22, 2017, the Company's application for private placement of A-share stocks was
approved by CSRC Issue Review Committee. On July 21, 2017, the Company received a Reply to Approval of Private Placement of
Stocks Given to Sino Great Wall Co., Ltd. (Zheng Jian Xu Ke [2017] No.1145) from China Securities Regulatory Commission. Due
to fluctuation in the capital market environment, the Company failed to complete matters of the private placement of stocks within 6
months after getting the approval for issue from China Securities Regulatory Commission (i.e., before January 4, 2018), hence the
reply of China Securities Regulatory Commission to the Company on the private placement of stocks became void and ineffective
spontaneously upon expiry (refer to the Company's Announcement 2016-052, 2016-065, 2017-009, 2017-010, and 2018-004 for
details).
2. The Company convened the twenty-eighth meeting of the seventh Board of Directors and 2018 first extraordinary general meeting
of shareholders on January 19, 2018 and March 13, 2018 respectively, deliberating and adopting the Proposal on the Company's
Financing Plan by Bond Issue and Proposal on the Company's Financing Plan by Issue of Accounts Receivable Bonds and approving
the Company's plan to raise funds in the amount of not over RMB 2 billion by listed bonds at Beijing Financial Assets Exchange
(refer to the Company's Announcement 2018-006, 007, 050 for details). The Company suspended implementing its financing plan,
affected by market environment and its own current situation.
3. In December 2016, the Company received a letter of acceptance from its wholly-owned subsidiary Sino International that made up
a consortium with Wuchang Shipbuilding Industry Group Co., Ltd. to win the bid for "Phnom Penh Twin Tower World Trade Center
(Cambodia) Construction Project" (hereinafter referred to as the Twin Tower Project) with a sum of about USD 2.7 billion or RMB
17.128 billion (refer to the Company's Announcement 2016-108 for details). After receiving the letter of acceptance, the Company
took the initiative to help the owner handle financing-related work to promote further performance of the Twin Tower Project.
However, financing matters concerned in the project were not put into practice, affected by lots of objective factors. Based on a
comprehensive evaluation on risks for implementation and financing risks in the international project and such risk factors as whether
the economic benefit can be as expected upon the completion of the project, the Company considered the project to have many
uncontrollable risks. To further prevent business risks and safeguard shareholders' rights and interests, the Company decided to waive
the project (refer to the Company's Announcement 2018-014).
4. On January 26, 2018, Guizhou Bijie Public Resources Trading Center released an Announcement of Results of (Secondary)
Construction of PPP Project of Jinsha County Hospital, according to which, Sino Great Wall Co., Ltd. (hereinafter referred to as the
Company) won the bid for the "(Secondary) Construction of PPP Project of Jinsha County Hospital" beforehand in the investment
sum of about RMB 1,438,314,400 (refer to the Company's Announcement 2018-015). Due to a high uncertainty and risk in the return
on investment on the project, the Company terminated the project.
5. On February 12, 2018, the Company convened the twenty-ninth meeting of the seventh Board of Directors, deliberating and
145
Sino Great Wall Co., Ltd. 2018 Annual Report
adopting a Proposal on Acquisition of Shares of UPL Laos Co., Ltd., according to which, UPL (MALAYSIA) SDN. BHD.
(hereinafter referred to as UPL Malaysia) transfered 30% of shares of UPL Laos Co., Ltd. (hereinafter referred to as UPL Laos) to the
Company by signing an Agreement of Equity Cooperation on Laos Vientiane Dongphosy Special Economic Zone Project, UPL Laos
entered into a franchise agreement for 50+40 years with Laos Government by cash contribution of USD 10 million and advance
payment of USD 20 million for project construction put together as the consideration of acquisition and took full charge of matters of
development of Dongphosy as the franchisee to Dongphosy Special Economic Zone (refer to the Company's Announcement
2018-020 and 021). On June 12, 2018, the Company agreed with UPL Malaysia on transfer of 10% of shares, hence the Company's
shareholding ratio rose to 40%. Whereas the Company is experiencing a financial difficulty at the moment and has failed to perform
duties of advance payment and construction in the equity agreement and duties in the loan agreement, the Malaysian shareholder
UPL Malaysia sent a latter in request for a return of equity and filed an arbitration to Hong Kong International Arbitration Centre on
the dispute of equity in March 2019. Right now, the Company has hired an arbitrator duly in response to the suit.
6. On February 23, 2018, the Company received the “Mekong River Villa Project Bid-Winning Notice” issued by
OXLEYEMERALD (CAMBODIA) CO., LTD, and Sino International won the bid for the “Mekong River Villa Project” in
Cambodia, with the bid amount of USD 46.5 million (equivalent to RMB 295 million) (See the 2018-035 announcement of the
Company for details). As of the end of the reporting period, most of the on-site piling construction work has been completed, and the
relevant civil work has been in progress. As of the disclosure date of this report, both parties have agreed to terminate the contract
and the project is in the process of settlement.
7. In the report period, the Company's wholly-owned subsidiary Sino International invested RMB 100 million in founding a
wholly-owned subsidiary--Sino Great Wall Hebei Xiong'an Engineering Co., Ltd. at Xiong'an New Area, which obtained a Business
License issued by Hebei Xiong'an New Area Public Service Bureau on February 24, 2018 (refer to the Company's Announcement
2018-031).
8. The Company convened the thirty-first meeting of the seventh Board of Directors and 2018 second extraordinary general meeting
of shareholders on March 24, 2018 and March 29, 2018 respectively, deliberating and adopting a Proposal on the Company's
Eligibility for Public Offering of A-share Convertible Bonds and Proposal on the Company's Plan for Issue of Short-term Financing
Bonds among other proposals concerned, according to which, the Company was approved to do public offering of A-share
convertible bonds in a period of 6 years to raise funds in the amount of not higher than RMB 850 million; the Company was
approved to apply for subscribing and issuing short-term financing bonds in the sum of not over RMB 600 million to National
Association of Financial Market Institutional Investors, wherein the period of single issue of short-term financing bonds must not be
over 1 year (refer to the Company's Announcement 2018-044, 046, 047, and 050). The Company suspended implementing the
preceding financing plan, affected by market environment and its own current situation.
9. The Company convened the thirty-fourth meeting of the seventh Board of Directors and 2018 third extraordinary general meeting
of shareholders on June 4, 2018 and June 22, 2018 respectively, deliberating and adopting a Proposal on the Wholly-owned
Subsidiary Issuing USD Bonds Overseas. The Company was planned to issue bonds overseas in the amount of not higher than USD
300 million (including USD 300 million) and period of not longer than 5 years, wherein its new wholly-owned subsidiary Sino Great
Wall Overseas Limited (subject to actual registered name, 100% of its shares attributable to Sino Hong Kong) played a major role
(refer to the Company's Announcement 2018-073, 074, and 055). The Company suspended implementing the preceding financing
plan, affected by market environment and its own current situation.
10. The Company convened the thirty-seventh meeting of the seventh Board of Directors on September 2, 2018, planned to invest
and found "Yinglonghu Development Co., Ltd." (hereinafter referred to as the Project Company, whose final name is subject to the
name approved in industrial and commercial registration) with Chongqing Circum-Yinglonghu Industrial Co., Ltd. (hereinafter
referred to as Party A) and 7 village committees concerned at the project location (hereinafter referred to as Party C). The registered
capital of the Project Company was RMB 125 million, wherein Party A subscribed capital by earlier input of physical assets worth
RMB 23.75 million (subject to the audited amount) in the Yinglong Project, accounting for 19% of the registered capital; Sino Great
Wall contributed RMB 100 million by currency, accounting for 80% of the registered capital; Party C subscribed RMB 1.25 million
146
Sino Great Wall Co., Ltd. 2018 Annual Report
by currency or contribution in kind, accounting for 1% of the registered capital (refer to the Company's Announcement 2018-104 and
105). At the moment, the Project Company has been registered and project planning and design are underway.
11. The company held the sixth meeting of the eighth Board of Directors on April 12, 2019, deliberated and passed the Proposal on
Adjusting the Company's Organizational Structure and agreed to adjust the operating organization and business structure of the
company's headquarters. The company will implement a division system by sections and set up four operating organizations,
including the domestic traditional construction business sector (division), infrastructure business sector (division), overseas business
sector (division), smart housing and medical care business sector (division). After this adjustment, the organizational structure of the
company's headquarters is as follows: eight functional departments and offices, including the comprehensive office, the finance
department and the human resources department, as well as the above-mentioned four operating institutions (see the company's
announcement No 2019-028 for details).
XX. Significant event of subsidiary of the Company
√ Applicable □ Not applicable
In January 2018, the Company's wholly-owned subsidiary Sino Great Wall Intelligent Real Estate (Zhanjiang) Co., Ltd. obtained a
Reply to Sino Great Wall on EIA Report for Residential Industrialization Base Construction Project, which was expected to speed up
construction of the Company's fabricated intelligent property R&D center and production base project, facilitate the Company to get
involved in the fabricated intelligent property construction area, add a new profit growth point to the Company and show a positive
impact on its future operation and development. For more details, please refer to Announcement of Voluntary Information Disclosure
on the Company Getting an EIA Reply to Fabricated Intelligent Property R&D Center and Production Base Construction Project
disclosed by the Company on January 4, 2018 (refer to the Company's Announcement 2018-003).Due to the shortage of project funds
and the mortgage of production base land to China Bohai Bank, the project is currently at a standstill.
147
Sino Great Wall Co., Ltd. 2018 Annual Report
VI. Change of share capital and shareholding of Principal
Shareholders
Ⅰ.Changes in share capital
1. Changes in share capital
Unit: Share
Before the change Increase/decrease（+，-） After the Change
Amount Proporti Capitali
on zation
Share of
Bonus Quantit Proport
allotme commo Other Subtotal
shares y ion
nt n
reserve
fund
1.Shares with conditional 681,305 -242,44 -242,44 438,85
40.12% 25.84%
subscription ,436 8,369 8,369 7,067
681,305 -242,44 -242,44 438,85
3.Other domestic shares 40.12% 25.84%
,436 8,369 8,369 7,067
Including ：Domestic 42,479, -42,479, -42,479,
2.50% 0 0.00%
Legal person shares 672 672 672
Domestic natural person 638,825 -199,96 -199,96 438,85
37.62% 25.84%
shares ,764 8,697 8,697 7,067
II. Shares with 1,016,9 242,448 242,448 1,259,3
59.88% 74.16%
unconditional subscription 39,575 ,369 ,369 87,944
753,136 242,448 242,448 995,58
1.Common shares in RMB 44.34% 58.62%
,344 ,369 ,369 4,713
2.Foreign shares in 263,803 263,80
15.54% 15.53%
domestic market ,231 3,231
1,698,2 100.00 1,698,2 100.00
III. Total of capital shares 0 0
45,011 % 45,011 %
Reasons for share changed
□ Applicable √ Not applicable
Approval of Change of Shares
□ Applicable √ Not applicable
148
Sino Great Wall Co., Ltd. 2018 Annual Report
Ownership transfer of share changes
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose for the company or need to disclose under requirement from security regulators
□ Applicable √ Not applicable
2. Change of shares with limited sales condition
√ Applicable □Not applicable
Unit: Share
Number of
Number of Restricted
Initial Increased Reason for Date of
Shareholder Unrestricted Shares in the
Restricted Restricted Restricted Restriction
Name Shares This End of the
Shares Shares This Shares Removal
Term Term
Term
The major
asset
restructuring
and the issue of October
Chen Lue 525,344,262 525,344,262 0 0
shares to 24,2018
purchase assets
and raise
matching funds
The major
asset
restructuring
and the issue of
Chen Lue 55,995,934 0 0 55,995,934 --
shares to
purchase assets
and raise
matching funds
Executive
Chen Lue 382,500 0 381,212,483 381,594,983 Not applicable
locking stock
The major
asset
restructuring
October
He Feiyan 54,800,458 54,800,458 0 0 and the issue of
24,2018
shares to
purchase assets
and raise
149
Sino Great Wall Co., Ltd. 2018 Annual Report
matching funds
The major
asset
restructuring
and the issue of October
He Sen 1,637,435 1,637,435 0 0
shares to 24,2018
purchase assets
and raise
matching funds
Jiutai Fund－ The major
Bank of asset
Communications restructuring
－Jiutai Huitong and the issue of December 3,
42,479,672 42,479,672 0 0
No.2 specific shares to 2018
customer asset purchase assets
management and raise
plan matching funds
Executive
Li Erlong 619,050 0 0 619,050 Not applicable
locking stock
Executive
Yang Chunling 46,125 0 0 46,125 Not applicable
locking stock
Executive
Liang Rong 0 0 600,975 600,975 Not applicable
locking stock
Total 681,305,436 624,261,827 381,813,458 438,857,067 -- --
II. Issuing and listing
1. Explanation of the Situation of the Security Issue (No Preferred Shares) in the Report Period
□ Applicable √ Not applicable
2. Change of asset and liability structure caused by change of total capital shares and structure
□ Applicable √ Not applicable
3. About the existing employees’ shares
□Applicable√Not applicable
150
Sino Great Wall Co., Ltd. 2018 Annual Report
III. Shareholders and actual controlling shareholder
1. Number of shareholders and shareholding
Unit: Share
Total preferred
Total number Total The total number shareholders at
of common shareholders at of preferred shar the end of the
shareholders the end of the eholders voting r month from
at the end of 77,544 month from 78,961 ights restored at 0 the date of 0
the the date of period-end disclosing the
reporting disclosing the (if any) (See annual report
period annual report Notes 8) (if any) (See
Notes 8)
Particulars about shares held above 5% by shareholders or top ten shareholders
Shareholders
Nature of Proport Numbe Change Amoun Amount Number of
shareholder ion of r of s in t of of share
shares shares reportin restrict un-restri pledged/frozen
held held at g ed cted
（%） period period shares shares
-end held held
Domestic 583,45 437,59 145,863 Pledge 583,454,462
Chen Lue 34.36% 0
Natural person 4,556 0,917 ,639 Freeze 583,454,556
STYLE-SUCCE Foreign legal 92,970, 92,970,
5.47% 0 0
SS LIMITED person 910 910
Domestic Non-
Union Holdings 87,935, 87,935,
State-owned 5.18% 0 0
Co., Ltd. 921 921
legal person
Domestic 54,800, 54,800,
He Feiyan 3.23% 0 0 Freeze 54,800,458
Natural person 458 458
Jiutai Fund－
Bank of
Communications
－Jiutai Huitong 40,696, 1,782,9 40,696,
Other 2.40% 0
No.2 specific 772 00 772
customer asset
management
plan
Rich Crown Foreign legal 23,235, 23,235,
1.37% 0 0
Investment Co., person 313 313
151
Sino Great Wall Co., Ltd. 2018 Annual Report
Ltd.
Qinghai Heyi
Domestic Non-
Industry 13,357, 13,357,
State-owned 0.79% 0 0 Pledge 13,357,084
Development 084 084
legal person
Co., Ltd.
Domestic 12,300, 379300 12,300,
Huang Huaian 0.72% 0
Natural person 000 0 000
Domestic 5,852,8 -20133 5,852,8
Zhang Xubao 0.34% 0
Natural person 20 80 20
Domestic 4,775,7 4,775,7
Chen Lihong 0.28% 92300 0
Natural person 60 60
Strategy investors or general legal
person becomes top 10 shareholders
Not applicable
due to rights issued (if
applicable)See Notes 3）
The largest shareholder of Mr. Chen Lue and the Fourth largest shareholder of Ms. He
Feiyan aforesaid are persons acting in concerted; The controlling shareholder of the
Explanation on associated above-mentioned third shareholder Shenzhen Union Holdings Co.,Ltd. And Sixth
relationship among the aforesaid shareholder Rich Crown Investment Co., Ltd.. Is Union Development Group Ltd.; It is
shareholders unknown whether there is relationship between other shareholders and whether they are
persons taking concerted action specified in the Regulations on Disclosure of Information
about Change in Shareholding of Shareholders of Listed Companies.
Shareholding of top 10 shareholders of unrestricted shares
Quantity of unrestricted shares held at the end of Name of the shareholder
Name of the shareholder
the reporting period
Chen Lue 145,863,639 Chen Lue 145,863,639
STYLE-SUCC
STYLE-SUCCESS LIMITED 92,970,910 92,970,910
ESS LIMITED
Union
Union Holdings Co., Ltd. 87,935,921 Holdings Co., 87,935,921
Ltd.
He Feiyan 54,800,458 He Feiyan 54,800,458
Jiutai Fund－
Bank of
Jiutai Fund－Bank of Communicatio
Communications－Jiutai Huitong ns－Jiutai
40,696,772 40,696,772
No.2 specific customer asset Huitong No.2
management plan specific
customer asset
management
152
Sino Great Wall Co., Ltd. 2018 Annual Report
plan
Rich Crown
Rich Crown Investment Co., Ltd. 23,235,313 Investment 23,235,313
Co., Ltd.
Qinghai Heyi
Qinghai Heyi Industry Development Industry
13,357,084 13,357,084
Co., Ltd. Development
Co., Ltd.
Huang Huaian 12,300,000 Huang Huaian 12,300,000
Zhang Xubao 5,852,820 Zhang Xubao 5,852,820
Chen Lihong 4,775,760 Chen Lihong 4,775,760
Explanation on associated
Mr. Chen Lue and Ms. He Feiyan are the unanimous persons; Union Development Group
relationship or consistent action
Co., Ltd. is the controlling shareholder of the Above –mentioned shareholder Union
among the top 10 shareholders of
Holdings Co., Ltd. And Rich Grown Investment Co., Ltd., It is unknown whether there is
non-restricted negotiable shares and
relationship between other shareholders and whether they are persons taking concerted
that between the top 10 shareholders
action specified in the Regulations on Disclosure of Information about Change in
of non-restricted negotiable shares
Shareholding of Shareholders of Listed Companies.
and top 10 shareholders
Notes to the shareholders involved
in financing securities (if any) (See Not applicable
Notes 4)
Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement
dealing in reporting period.
□ Yes √ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy –back
agreement dealing in reporting period.
2. Controlling shareholder
Nature of Controlling Shareholders: Natural Person Holding
Type of Controlling Shareholders: Natural Person
Name Nationality Whether to obtain the right of abode in other
countries or regions
Chen Lue China No
Main occupations and duties Board Chairman of the Company
Situation of domestic and abroad holding Nil
listed companies in the reporting period.
Change of the actual controller in the reporting period
□ Applicable √ Not applicable
Nil
153
Sino Great Wall Co., Ltd. 2018 Annual Report
3．Information about the controlling shareholder of the Company
Actual controller nature：Domestic natural person
Actual controller type：Natural person
Name of actual controllers Relationship with Nationality Whether to obtain the right of abode in other
the actual countries or regions
controller
Chen Lue Self China No
He Feiyan Acting in concert China No
(including agreed,
relative and same
control)
He Sen Acting in concert China No
(including agreed,
relative and same
control)
Main occupations and duties Chen Lue: Chairman. He Feiyan: assuming no duty in the Company. He Sen: Vice General
Manager of Sino Great Wall International Engineering Co., Ltd.
Situation of domestic and abroad The Company's actual controller and persons acting in concert did not hold other listed
holding listed companies in the companies, save the Company, in the past decade.
past 10 years
Changes of the actual controller in the reporting period
□Applicable √Not applicable
No Changes of the actual controller in the reporting period
Block Diagram of the ownership and control relations between the company and the actual controller
154
Sino Great Wall Co., Ltd. 2018 Annual Report
The actual controller controls the company by means of trust or managing the assets in other way
□Applicable √Not applicable
4. Particulars about other legal person shareholders with over 10% share held
□Applicable √Not applicable
5. Situation of Share Limitation Reduction of Controlling Shareholders, Actual Controllers, Restructuring
Party and Other Commitment Subjects
□Applicable √Not applicable
155
Sino Great Wall Co., Ltd. 2018 Annual Report
VII. Situation of the Preferred Shares
□ Applicable √ Not Applicable
The Company had no preferred shares in the reporting period
156
Sino Great Wall Co., Ltd. 2018 Annual Report
VIII. Information about Directors, Supervisors and Senior Executives
I. Change in shares held by directors, supervisors and senior executives
Amount Amount
Shares of shares of shares Shares
Other
Starting Expiry held at increased decreased held at
Office changes
Name Positions Sex Age date of date of the at the at the the
status increase/d
tenure tenure year-begi reporting reporting year-end(
ecrease
n(share) period(sh period(sh share)
are) are)
2015 年 2021 年
Board 583,454,5 583,454,5
Chen Lue In office Male 48 10 月 29 11 月 14 0 0 0
chairman 56 56
日 日
Vice
Board 2015 年 2021 年
Li Erlong chairman, In office Male 43 10 月 29 11 月 14 825,400 0 0 -206,3501 619,050
General 日 日
Manager
Vice
Board
2015 年 2021 年
Liang chairman,
In office Male 49 10 月 29 11 月 14 0 801,300 0 -200,3252 600,975
Rong Deputy
日 日
General
Manager
2018 年 2021 年
He
Director In office Female 40 11 月 15 11 月 14 0 0 0 0 0
Yanjun
日 日
Director,
Executive 2018 年 2021 年
Peng
deputy In office Male 50 11 月 15 11 月 14 0 0 0 0 0
Lizhi
general 日 日
manager
2018 年 2021 年
Liang
Director In office Male 58 11 月 15 11 月 14 0 0 0 0 0
Yong
日 日
Independ 2018 年 2021 年
Niu
ent In office Male 46 11 月 15 11 月 14 0 0 0 0 0
Hongjun
director 日 日
157
Sino Great Wall Co., Ltd. 2018 Annual Report
Jiang Independ 2015 年 2021 年
Chonggua ent In office Male 43 10 月 29 11 月 14 0 0 0 0 0
ng director 日 日
Independ 2018 年 2021 年
Yu
ent In office Male 55 11 月 15 11 月 14 0 0 0 0 0
Haichun
director 日 日
Chairman
of the
2018 年 2021 年
Wu superviso
In office Male 38 11 月 15 11 月 14 0 0 0 0 0
Xiaoming ry
日 日
committe
e
2018 年 2021 年
Pang Superviso
In office Male 38 11 月 15 11 月 14 0 0 0 0 0
Aisheng r
日 日
Employee 2018 年 2021 年
Qin
superviso In office Male 54 11 月 15 11 月 14 0 0 0 0 0
Yuanxin
r 日 日
Deputy
General
Manager,
2015 年 2021 年
Yang CFO,
In office Female 47 10 月 29 11 月 14 61,500 0 0 0 61,500
Chunling Secretary
日 日
to the
board of
directors
Deputy 2017 年 2021 年
Cui
General In office Female 46 07 月 06 11 月 14 0 0 0 0 0
Hongli
Manager 日 日
Fang Deputy 2018 年 2021 年
Xiangzho General In office Male 48 11 月 15 11 月 14 0 0 0 0 0
ng Manager 日 日
Deputy 2018 年 2021 年
Zhang
General In office Male 60 11 月 15 11 月 14 0 0 0 0 0
Jian
Manager 日 日
2015 年 2018 年
Bai Bin Director Dimission Male 33 10 月 29 01 月 18 0 0 0 0 0
日 日
2018 年 2018 年
Tian Wei Director Dimission Male 60 03 月 28 11 月 14 0 0 0 0 0
日 日
158
Sino Great Wall Co., Ltd. 2018 Annual Report
2000 年 2018 年
Hu
Director Dimission Male 56 05 月 12 11 月 14 0 0 0 0 0
Yongfeng
日 日
2015 年 2018 年
Wang Lei Director Dimission Male 55 10 月 29 11 月 14 0 0 0 0 0
日 日
Independ 2015 年 2018 年
Tang
ent Dimission Male 53 10 月 29 11 月 14 0 0 0 0 0
Jianxin
Director 日 日
Independ 2015 年 2018 年
Zhang
ent Dimission Male 55 10 月 29 11 月 14 0 0 0 0 0
Yufeng
Director 日 日
Chairman
of the
2002 年 2018 年
Dong superviso
Dimission Male 69 06 月 26 06 月 21 0 0 0 0 0
Binggen ry
日 日
committe
e
Chairman
of the
Fang 2018 年 2018 年
superviso
Xianzhon Dimission Male 48 06 月 21 11 月 14 0 0 0 0 0
ry
g 日 日
committe
e
2015 年 2018 年
Huang Superviso
Dimission Male 47 10 月 29 11 月 14 0 0 0 0 0
Shengde r
日 日
2015 年 2018 年
Wu Employee
Superviso Dimission Male 38 10 月 29 11 月 14 0 0 0 0 0
Xiaoming r
日 日
2017 年 2018 年
General
Tian Wei Dimission Male 60 07 月 06 11 月 14 0 0 0 0 0
Manager
日 日
Deputy 2017 年 2018 年
Wang
General Dimission Male 62 07 月 06 11 月 14 0 0 0 0 0
Shaojun
Manager 日 日
CFO,
2017 年 2018 年
Tang Deputy
Dimission Male 45 07 月 06 11 月 14 0 0 0 0 0
Xianyong General
日 日
Manager
Total -- -- -- -- -- -- 584,341,4 801,300 0 -406,675 584,736,0
159
Sino Great Wall Co., Ltd. 2018 Annual Report
56 81
注：1 系被广东省深圳市福田区人民法院强制卖出，详见 2019 年 1 月 5 日披露于巨潮资讯网上的《关于董事及高管所持公
司股份被强制执行的公告》（公告编号：2019-001）
2 系被法院强制卖出
II. Change in shares held by directors, supervisors and senior executives
√ Applicable □Not applicable
Name Positions Types Date Reason
November Elected as a non-independent director in the fourth
He Yanjun Director Engaged
15,2018 extraordinary shareholders’ general meeting of 2018
Director, Elected as a non-independent director in the fourth
Executive extraordinary shareholders’ general meeting of 2018,
November
Peng Lizhi Deputy Engaged Appointed as the Executive Deputy general manager of
15,2018
General the company by the 1st meeting of the Eighth Board of
Manager Directors
November Elected as a non-independent director in the fourth
Liang Yong Director Engaged
15,2018 extraordinary shareholders’ general meeting of 2018
Independent November Elected as independent director in the fourth
Niu Hongjun Engaged
director 15,2018 extraordinary shareholders’ general meeting of 2018
Independent November Elected as a non-independent director in the fourth
Yu Haichun Engaged
director 15,2018 extraordinary shareholders’ general meeting of 2018
Elected as supervisor in the fourth extraordinary
Chairman of shareholders’ general meeting of 2018;Elected as
November
Wu Xiaoming the supervisory Engaged Chairman of the supervisory committee of the
15,2018
committee Company by the 1st meeting of the Eighth Board of
supervisors
November Elected as Supervisor in the fourth extraordinary
Pang Aisheng Supervisor Engaged
15,2018 shareholders’ general meeting of 2018
Employee October Elected as employee supervisor by the employee repres
Qin Yuanxin Engaged
supervisor 29,2018 entative assembly of the company on October 29, 2018
General November Appointed general manager of the company at the first
Li Erlong Engaged
Manager 15,2018 meeting of the eighth board of directors
Deputy
Fang November Appointed Deputy general manager of the company at
General Engaged
Xianzhong 15,2018 the first meeting of the eighth board of directors
Manager
Deputy November Appointed Deputy general manager of the company at
Zhang Jian Engaged
General 15,2018 the first meeting of the eighth board of directors
160
Sino Great Wall Co., Ltd. 2018 Annual Report
Manager
Deputy Appointed Deputy general manager and CFO of the
November
Yang Chunling General Engaged company at the first meeting of the eighth board of
15,2018
Manager, CFO directors
Leave the
office while November No longer assuming the duty of non-independent
Hu Yongfeng Director
office term 14,2018 director in the Company upon expiry of term
ends
Leave the
office while November No longer assuming the duty of non-independent
Tian Wei Director
office term 14,2018 director in the Company upon expiry of term
ends
Leave the
office while November No longer assuming the duty of non-independent
Wang Lei Director
office term 14,2018 director in the Company upon expiry of term
ends
Leave the
Independent office while November No longer assuming the duty of independent director in
Tang Jianxin
director office term 14,2018 the Company upon expiry of term
ends
Leave the
Independent office while November No longer assuming the duty of independent director in
Zhang Yufeng
director office term 14,2018 the Company upon expiry of term
ends
Leave the
office while January
Bai Bin Director Resigned due to personal reasons
office term 18,2018
ends
Leave the
Chairman of
office while
Dong Binggen the supervisory June 21,2018 Resigned due to personal reasons
office term
committee
ends
Leave the
Chairman of No longer assuming the duty of Chairman of the
Fang office while November
the supervisory supervisory committee in the Company upon expiry of
Xianzhong office term 14,2018
committee term
ends
Leave the
Huang office while November No longer assuming the duty of Supervisor in the
Supervisor
Desheng office term 14,2018 Company upon expiry of term
ends
Wu Xiaoming Employee Leave the November No longer assuming the duty of Employee supervisor in
161
Sino Great Wall Co., Ltd. 2018 Annual Report
supervisor office while 14,2018 the Company upon expiry of term
office term
ends
Leave the
office while November No longer assuming the duty of CFO in the Company
Tang Xianyong CFO
office term 14,2018 upon expiry of term
ends
Leave the
General office while November No longer assuming the duty of General Manager in the
Tian Wei
Manager office term 14,2018 Company upon expiry of term
ends
Leave the
Deputy
office while November No longer assuming the duty of Deputy General
Wang Shaojun General
office term 14,2018 Manager in the Company upon expiry of term
Manager
ends
III. Posts holding
Main working experience of current directors, supervisors and senior management staff
(1) Director
Chen Lue, male, Chinese nationality, no overseas permanent residence, born in April 1970, currently the doctoral students of
accounting specialty in Wuhan University, Senior Management MBA of Guanghua School of Management of Beijing University,
Senior Management MBA of School of Economics and Management of Tsinghua University, Bachelor in major of Food Science and
Nutritional Engineering of China Agricultural University, senior engineer. Since October 2001, he has been the director of Sino Great
wall International Engineering Co., Ltd., since April 2014, he has been the executive director of Sino Great Wall Investment (Beijing)
Co., Ltd; since October 2015, he has been the chairman of China Industry Investment Co., Ltd. From October 2015 to July 2017, he
has been the chairman and General Manger of the Company, Sine July 2017, He has been the Chairman of the Company.
Li Erlong, Chinese nationality, no overseas permanent residence, male, was born in September 1975, graduated from the Shandong
Building Materials Engineering College, MBA of Tsinghua University. He had served as the assistant to director of the National
Building Materials Quality Supervision and Inspection Center, the researcher for the China-Africa R&D Center of Artificial Crystal.
Since March 2005, he has been served as the general manager of Sino Great Wall International Engineering Co., Ltd; since
November 2007, he has been the manager of Beijing Sino Great Wall Decoration Design Co., Ltd.; since June 2014, he has been the
director of Sino Great Wall Internatioanal Engineering Co., Ltd., Since September 2015, he has been the director of China Industry
Investment Co., Ltd., since July 2016, he has been the chairman of Sino Great Wall Internatioanal Engineering Co., Ltd., Since
August 2016, he has been the executive director of Sino Great Wall Southwest Construction Engineering Co., Ltd., Since November
2016, he has been the chairman of Sino Great Wall Jianye Engineering Co., Ltd., since December 2016, he has been the General
Manger of Sino Great Wall Development (Hengqin) Co., Ltd., From October 2015 to June 2017, he has been the Director and Genral
Manger of the Company, Since September 2017, he has been the executive director and General Manger of Sino Great Wall
Southwest Engineering Consulting Co . , Ltd . Sino Great Wall Southwest Commercial Trade Co., Ltd. And Sino Great Wall
Southwest Technology Co., Ltd., since February 2018, he has been the executive director of Sino Great Wall Hebei Xiongan
Engineering Co., Ltd.,From July 2017 to November 2018, he has been the Vice Chairman and Deputy General Manger of the
Company. Since November 2018, he has been the Vice Chairman and General Manger of the Company.
Liang Rong, Male Chinese nationality, no overseas permanent residence, was born in December 1969，graduated from civil
162
Sino Great Wall Co., Ltd. 2018 Annual Report
engineering major of Shantou University and MBA of Senior Management of Nankai University, is a senior engineer. He had severed
as Assistant Engineer of Zhuhai Xinzhou Real Estate Co., Ltd, Quantity Surveyor of Japan Shimizu Construction Co., Ltd, and
Project Manager of Shenzhen Great Wall Furniture Decoration Engineering Co., Ltd. From April 2003 to June 2016, he has been the
Executive General Manger of Sino Great Wall Construction Engineering Co., Ltd., since June 2014, he has been the Director Sino
Great Wall Construction Engineering Co., Ltd., since Novemer 2014, he has been the Diretor of Sino Great Wall International
Engineering(Macao) Co., Ltd., From October 2015 to June 2017, he has been the director and Deputy General Manger of the
Company, since August 2017, he has been the Chairman of Sino Great Wall Group Co., Ltd., Since September 2017, he has been the
Chairman of Kunming Sino Shengong Forestry Development Co., Ltd.,since October 2017, he has been the General Manager of Sino
Great Wall Guangxia (Wuhan )Medical Development Co., Ltd., since Decemer 2017, he has been the Chairman of Sino Great Wall
Health Management (Jiangsu) Co., Ltd., and Director of Weifang Sino Great wall Health Development Co., Ltd., since March 2018,
he has been the Chairman of Renhui Sino Great wall Wine Culture Development Co., Ltd., Since July 2017, he has been the Vice
Chairman and Deputy General Manger of the Company.Since August 2017, he has been the Chairman of Sino Great Wall Group Co.,
Ltd. has assumed Kunming Sino Sengong Forestry Development Co., Ltd., a director of Sino Great Wall (Hong Kong) Real Estate
Co., Ltd., Chairman and a director of Alor Vista Development Sdn Bhd (Penang Bukit Mertajam Project Company) since September
2017, assumed the General Manager of Sino Great Wall Guangxia (Wuhan) Medical Development Co., Ltd. since October 2017,
assumed a director of SGW Ventures Sdn Bhd (Malaysia Management Company) since November 2017, assumed Chairman of Sino
Great Wall Health Management (Jiangsu) Co., Ltd. and a director of Weifang Sino Great Wall Health Development Co., Ltd. since
December 2017, assumed a director of Cenang Resort Sdn Bhd (Cenang Company) and Chairman of Sino Great Wall Technology
Development Co., Ltd. since January 2018, assumed the Chairman of Renhuai Sino Great Wall Wine Culture Expo Park
Development Co., Ltd. since March 2018, assumed a director of Aofa Investment Co., Ltd. and Weifang Sino Great Wall Health Care
Industry Co., Ltd. since August 2018, and assumed a director of Weifang Binhai Sino Bincheng Hospital Co., Ltd. since September
2018.
He Yanjun , Female, a Hong Kong resident, born in May 1978, graduated from Southwest University of Political Science & Law,
majoring in law. She worked as a court clerk at Shenzhen Intermediate People's Court from July 2003 to August 2009; she assumed
the Legal Secretary and Manager Assistant of Office of the President, UDC Group Co., Ltd. from August 2009 to February 2011; she
has assumed the Legal Manager of UDC Holding Co., Ltd. since April 2015. Since November 2018, she has assumed a director of
the Company.
Peng Lizhi,Male , Chinese nationality, no overseas permanent residence, born in September 1968,He is an MBA master, national
highway engineering constructor, and professor-level senior engineer. From 1990 to 2002, he worked at Second Engineering Division,
Second Highway Engineering Bureau, Ministry of Transportation; from 2003 to 2006, he assumed the Chief Engineer of Road &
Bridge South China Engineering Co., Ltd.; from 2006 to May 2016, he assumed Chairman and General Manager of Road & Bridge
North China Engineering Co., Ltd.; since June 2016, he has assumed Chairman and General Manager of Sino Great Wall
Infrastructure Investment Co., Ltd. From December 2017 to November 2018, he assumed Vice General Manager of the Company;
from November 2018, he has assumed a director and Standing Vice Manager of the Company.
Liang Yong, Male , Chinese nationality, no overseas permanent residence, born in April 1960,He is an engineer graduating from
Ansteel Engineering College. He used to work at Ansteel Design Research Institute, Yantai Liaohai Hi-Tech Development Co., Ltd.,
Coastal Green Homeland (Anshan) Co., Ltd. and Coastal Green Homeland Central China Company among other companies. From
May 2008 to July 2009, he assumed the General Project Manager of Tianjin Haishun Real Estate Development Co., Ltd.; from July
2009 to August 2011, he assumed General Project Manager of MCC Times Real Estate Co., Ltd.; from September 2011 to April 2012,
he assumed Vice President of Hubei Brandmont Investment Group Co., Ltd.; from April 2012 to August 2014, he assumed General
Manager of Nanyang Feifan Real Estate Co., Ltd.; from August 2014 to March 2016, he assumed General Manager Assistant of
CITIC Guoan Investment (Shanghai) Company; from April 2016 to March 2019, he assumed Vice General Manager of Real Estate
163
Sino Great Wall Co., Ltd. 2018 Annual Report
Development Department of the Company; since November 2018, he has assumed a director of the Company.
Niu Hongjun, Male , Chinese nationality, no overseas permanent residence, born in November 1972,He is a certified public
accountant in both China and Australia with a bachelor's degree awarded by School of Economic & Management, Shijiazhuang
Tiedao University, a master's degree awarded by Chinese Academy of Fiscal Sciences, Ministry of Finance, and a doctoral degree of
management awarded by Renmin Business School; since 2008, he has been a master supervisor at Business School of Beijing
Technology and Business University, working on specialized accountancy teaching and research; since 2009, he has been hired as a
financial consultant by Ministry of Commerce of the People's Republic of China; since January 2015, he has assumed an independent
director of Jingwei Textile Machinery; from June 2016 to February 2018, he assumed an independent director of Cloud Live Tech
Group; since November 2018, he has assumed an independent director of the Company.
Jiang Chongguang, Male , Chinese nationality, no overseas permanent residence, He is a doctor of economics, postdoctor, researcher,
part-time professor and visiting scholar to international institutions of higher education. He is the present Executive Vice President
and Secretary-General of China Insurance Innovation Research Institute, Executive Director of Health China Strategy Research
Center, Chinese Academy of Social Sciences, Deputy Director of Financial Technology Committee, Asian Financial Cooperation
Association, a consultant to Insurance Society of China and an independent director of Dezhan Big Health Co., Ltd. He is a senior
economist of Ivy Capital. Since 2015, he has acted as an independent director of the Company.
Yu Haichun ,Male, Chinese nationality, no overseas permanent residence, born in November 1962,He has a doctoral degree of civil
and commercial law awarded by China University of Political Science and Law. He used to be an
assistant-regimental-commander-level instructor of PLA Dalian Naval Academy, lawyer of Liaoning Fada Law Firm, lawyer and
partner of Beijing King & Capital Law Firm, secretary of the party committee and vice president of School of Insurance and
Economics at UIBE. From March 2013 to September 2018, he assumed secretary of the party committee and vice president of UIBE
Law School. Since September 2018, he has assumed a professor of UIBE Law School and Director of Research Center for Insurance
Policies and Laws. Since November 2018, he has assumed an independent director of the Company.
2. Supervisors
Wu Xiaoming, Male, Chinese nationality, no overseas permanent residence, born in November 1980, He has a bachelor's degree of
law awarded by School of Law, Guangdong Business School (presently known as GuangDong University of Finance & Economics).
He used to work at Haizhu Branch, Guangzhou Municipal Administration of Quality and Technology Supervision (the present
Quality and Technology Supervision Bureau of Haizhu District, Guangzhou). Since December 2008, he has assumed General
Manager Assistant and Legal Manager of Sino Great Wall International Engineering Co., Ltd. Since June 2014, he has assumed
Chairman of Board of Supervisors of Sino Great Wall International Engineering Co., Ltd.; from October 2015 to November 2018, he
assumed the Employee Supervisor of the Company; since November 2018, he has assumed Chairman of the Board of Supervisors of
the Company.
Pang Aisheng, Male, Chinese nationality, no overseas permanent residence, born in May 1981,He has a bachelor's degree awarded by
Guangdong Vocational Normal School (presently known as Guangdong Polytechnic Normal University) and MBA degree of senior
executives awarded by Zhejiang University. He used to be a project manager of Sino Great Wall International Engineering Co., Ltd.;
since 2015, he has assumed Vice General Manager of Sino Great Wall International Engineering Co., Ltd. and General Manager of
East China Division herein; since November 2018, he has assumed a supervisor of the Company.
Qin Yuanxin, male, Chinese nationality, no overseas permanent residence, born in November 1964, is a senior engineer, graduating
from Shandong Construction Engineering School with a bachelor's degree of engineering management. He used to be Technical
Director and Production Manager of Tongcheng Sixing Construction Installation Engineering Co., Ltd.; from March 1996 to
December 2004, he assumed the Production Manager and Project Manager of Anhui First Construction Engineering Co., Ltd.; since
March 2005, he has assumed Project Manager, Security Inspection Manager, Vice General Manager of Engineering Management
Center, Vice General Manager and Supervisor of Clearing Center of Sino Great Wall International Engineering Co., Ltd. Since March
2005, he has assumed Standing Vice Manager of SPV Management Center of Sino Great Wall Co., Ltd. Since November 2018, he
164
Sino Great Wall Co., Ltd. 2018 Annual Report
has assumed the Employee Supervisor of the Company.
3. Senior management personnel
Refer to the preceding "1. Members of Board of Directors" for resumes of Mr. Li Erlong, Mr. Liang Rong and Mr. Peng Lizhi.
Yang Chunling, female, Chinese nationality, no overseas permanent residence, born in February 1971, Bachelor in economics, master
in industrial engineering, accountant. She had served as employee in Sinotrans Henan Zhengzhou Logistic and Trading Company,
Deputy Minister of the securities department of Aeolus Tyre Co., Ltd, vice general manager and secretary of the board of directors of
Henan Yuhua New Material Co., Ltd. Since September 2015, she has been the director of Sino Cubic Investment Co., Ltd; since
March 2014, she has been the secretary of the board of directors of Sino Great Wall International Engineering Co., Ltd; From
October 2015 to November 2018,, she has been the secretary of the board of directors of the company.Since November 2014, she has
been the Deputy General Manager , CFO and secretary of the board of directors of the Company.
Cui Hongli, female, Chinese nationality, no overseas permanent residence, born in January 1972, graduated from Henan University
of Finance and Economics, CPA. She had been served in China Luoyang Float Glass Group Co.,Ltd, Beijing Jiayou Real Estate
Development Group Co.,Ltd and Yuancheng Industrial Group Co.,Ltd. Since July 2011, she has been the investment and finance
department manager, CFO of Sino Great Wall International Engineering Co., Ltd; From October 2015 to June 2017, she has been the
company’s CFO.Since July 2017, She has been the Deputy General Manger of the Company.
Fang Xianzhong male, Chinese nationality, no overseas permanent residence, born in February 1970, he has an EMBA degree
awarded by Guanghua School of Management, Peking University. He used to assume an office staff of Beijing Jingdong Auto
Maintenance Group, Sales Manager of Beijing Gomatech Co., Ltd., General Manager of Business Unit of Founder Technology CO.,
Ltd., and Vice General Manager of Beijing Honglian Jiuwu Information Industry Co., Ltd. among other duties. From May 2002 to
December 2003, he assumed General Manager of Beijing Haiweixin Technology Co., Ltd.; from January 2004 to June 2010, he
assumed General Manager of Beijing Haiwei Xinda Technology Co., Ltd.; since July 2010, he has assumed Vice General Manager of
Sino Great Wall International Engineering Co., Ltd.; from June to November 2018, he assumed Chairman of Board of Supervisors of
the Company; since November 2018, he has assumed Vice General Manager of the Company.
Zhang Jian,male, Chinese nationality, no overseas permanent residence, born in August 1958,graduated from Central School of China
Communist Youth League with a specialized associate degree. He used to assume a company commander of Headquarters of
Kunming Military Command, a section chief of Qingdao Municipal People's Government, General Manager of Government Offices
Administration Trading Company, General Manager of Qingdao Shopping Mall of Beijing Chengxiang (a listed company), General
Manager of New City Plaza of South Group, General Manager of Qingdao Aoda Investment Development Company, Hongta Group,
and COO of Yunnan, Guizhou, Sichuan and Shaanxi of Junhao Group among other duties. From January 2016 to March 2018, he
assumed Vice General Manager of Sino Great Wall Medical Investment Management Company; since April 2018, he has assumed
Vice General Manager of Sino Great Wall Real Estate Company; since November 2018, he has assumed Vice General Manager of
Sino Great Wall Co., Ltd.
Office taking in shareholder companies
□ Applicable √Not applicable
Offices taken in other organizations
√Applicable □Not applicable
Name Name of other units Position Office term Office term Whether
start from ended receiving
remuneration
from other units
or not
Chen Lue Sino Great Wall International Engineering Board October No
165
Sino Great Wall Co., Ltd. 2018 Annual Report
Co., Ltd. chairman 17,2001
Chen Lue Sino Great Wall Investment (Beijing) Co., Executive April 22, No
Ltd. director 2014
Chen Lue China Industry Investment Co., Ltd. Board September No
chairman 14,2015
Chen Lue Shenzhen Sino Dalue Investment Co.,Ltd. Executive February No
director 25,2015
Chen Lue Zhongshang Sino Aerospace Technology Board January No
(Beijing) Co., Ltd. chairman 24,2017
Li Erlong China Industry Investment Co., Ltd. Director September No
14,2015
Niu Hongjun Business Schooll of Beijing Technology Master September Yes
and Business University Supervisor 1,2008
Niu Hongjun Ministry of Commerce of the people's Financial January Yes
republic of China advisory 15,2009
Niu Hongjun Jingwei Textile Machinery Co., Ltd. Independen January Yes
t Director 13,2015
Jiang Dezhan Healthcare Co., Ltd. Independen October October Yes
Chongguang t Director 25,2016 25,2021
Jiang CASS Healthy China Strategic Research Executive May 1,2015 May 1,2025 Yes
Chongguang Center. director
Jiang IVY Capital Senior June 1,2015 June 1,2025 Yes
Chongguang economist
Jiang Insurance Society of China Counselor June 15,2016 June 15,2021 Yes
Chongguang
Jiang China Insurance Innovation Research Executive April 25,2016 April 25,2026 Yes
Chongguang Institute vice
President
and general
secretary
Jiang Asian Finance Association Financial Associate February March 1,2023 No
Chongguang Science and Technology Committee director 1,2018
Yu Haichun School of Law,UIBE Professor, September Yes
Director of 13,2018
Insurance
Industry
Policy and
Law
Research
Center
166
Sino Great Wall Co., Ltd. 2018 Annual Report
Yang China Industry Investment Co., Ltd. Director September No
Chunling 1,2015
Punishments to the current and leaving board directors, supervisors and senior managers during the report period by securities
regulators in the recent three years
□ Applicable √Not applicable
IV. Remuneration to directors, supervisors and senior executives
Decision-making procedures, basis for determination and actual payment of the remuneration to directors , supervisors and senior
executives
The Company's remuneration and appraisal committee formulates the remuneration plan, which is implemented after the approval by
the board of directors or after review and approval by the shareholders' general meeting; and it performances the evaluation of
directors and senior management personnel according to the performance evaluation standards and procedures; meanwhile, the
Company proposes the amount of remuneration and reward methods for directors, supervisors and senior managers according to the
post performance evaluation and salary distribution policy, which shall be approved by voting and finally be reported to the board of
directors for approval and implementation.
The Company formulates the remuneration plans or schemes based on the main scope, responsibilities, and importance of directors
and senior management positions and the remuneration levels of other related companies, and it pays the remuneration based on the
post performance evaluation results and the salary allocation policy.
Remuneration to directors, supervisors and senior executives in the reporting period
Unit: 10,000 Yuan
Remuneration
Total actually
remuneration receives at the
Name Positions Sex Age Office status
received from end of the
the shareholder reporting
period
Board
Chen Lue Male 48 In office 36.6 No
Chairman
Vice Board
Chairman,
Li Erlong Male 43 In office 52.15 No
General
Manager
Vice Board
Chairman,
Liang Rong Male 49 In office 43.2 No
Deputy General
Manger
He Yanjun Director Female 40 In office 0 Yes
Director,
Peng Lizhi Excutive Male 50 In office 43.46 No
Deputy General
167
Sino Great Wall Co., Ltd. 2018 Annual Report
Manager
Liang Yong Director Male 58 In office 0.33 No
Independent
Niu Hongjun Male 46 In office 1.37 No
Director
Jiang Independent
Male 43 In office 11 No
Chongguang Director
Independent
Yu Haichun Male 55 In office 1.37 No
Director
Chairman of
Wu Xiaoming the supervisory Male 38 In office 1.76 No
committee
Pang Aisheng Supervisor Male 38 In office 3.12 No
Employees
Qin Yuanxin Male 54 In office 1.24 No
supervisor
Deputy General
Manager, CFO,
Yang Chunling Secretary to the Female 47 In office 22.8 No
board of
directors
Deputy General
Cui Hongli Female 46 In office 22.8 No
Manager
Fang Deputy General
Male 48 In office 2.1 No
Xianzhong Manager
Deputy General
Zhang Jian Male 60 In office 7.31 No
Manager
Hu Yongfeng Director Male 56 Dimission 0 Yes
Wang Lei Director Male 55 Dimission 0 No
Bai Bin Director Male 33 Dimission 0 No
Tian Wei Director Male 60 Dimission 0 No
Independent
Tang Jianxin Male 53 Dimission 9.63 No
Director
Independent
Zhang Yufeng Male 55 Dimission 9.63 No
Director
Chairman of
Dong Binggen the supervisory Male 69 Dimission 0 Yes
committee
Chairman of
Fang
the supervisory Male 48 Dimission 6.3 No
Xianzhong
committee
168
Sino Great Wall Co., Ltd. 2018 Annual Report
Huang Shengde Supervisor Male 47 Dimission 12.68 No
Employees
Wu Xiaoming Male 38 Dimission 12.34 No
supervisor
General
Tian Wei Male 60 Dimission 77.53 No
Manager
Deputy General
Wang Shaojun Male 62 Dimission 52.5 No
Manager
Deputy Genral
Tang Xianyong Male 45 Dimission 35 No
Manager, CFO
Total -- -- -- -- 466.22 --
Incentive equity to directors, supervisors or/and senior executives in the reporting period
□ Applicable √Not applicable
V. Particulars about employees.
1. Number of staff, professional structure and educational background
Number of in-service staff of the parent company(person) 59
Number of in-service staff of the main subsidiaries(person) 762
The total number of the in-service staff(person) 821
The total number of staff receiving remuneration in the current 821
period(person)
Retired staff with charges paid by the parent company and 17
main subsidiaries (person)
Professional
Classified according by Professions Number of persons（person）
Production 251
Sales 16
Technical 331
Financial 40
Administrative 61
Other 122
Total 821
Education
Classified according by Professions Number of persons（person）
Master’s Degree and bove 52
Bachelor 366
169
Sino Great Wall Co., Ltd. 2018 Annual Report
College diploma 270
Other 133
Total 821
2. Remuneration policies
Based on the principle of “external fairness and internal fairness”, the Company combines the company’s
overall strategic plan to provide competitive remuneration and benefits in the industry. Different post has different
remuneration, and the remuneration will be raised upon the excellent performance, and the staff remuneration
level will be determined according to the job responsibilities,
3.Training plan
The Company builds its talent team by combining internal and external training methods and creates a
training system where a priority is given to specialized quality while other professional qualities aid. To be
specific, the Company explores and trains excellent internal lecturers and develops a variety of training
coursewares suitable to its own enterprise culture. The Company hires external consultants and experts in the
industry to impart and communicate new techniques and management skills. The Company implements its
training at three levels including project, department and company and fulfills a full coverage of its training work
by an on-line school, planned to hit a high rate of fulfillment, promote comprehensive qualities of employees step
by step and supplement sustainable and applicable talents to its following sound development.
4.Outsourcing situation
□ Applicable √ Not Applicable
170
Sino Great Wall Co., Ltd. 2018 Annual Report
IX. Administrative structure
I. Basic state of corporate governance
The company’s governance meets the requirements of regular documents on the governance of the listed companies issued by China
Securities Regulatory Commission.
In the report period, the Company kept improving its standard operation and management system, optimized its management
structure, further standardized its operation and raised its management standard by abiding by Company Law, Securities Law, Stock
Listing Rules of the Shenzhen Stock Exchange, Code of Corporate Governance for Listed Companies and relevant laws and
regulations of China Securities Regulatory Commission in combination with its own actual situation.
As the end of the report period, the Company's actual management situation agreed with normative documents published by China
Securities Regulatory Commission regarding governance of listed companies. Specifically showed in the following respects:
1. Shareholders and General Meeting of Shareholders: the Company can safeguard rights to be informed and participate granted to
shareholders by law in all respects, convene and hold a General Meeting of Shareholders in accordance with provisions and
requirements in the Rules for General Meeting of Shareholders of Listed Companies and Rules of Procedure at General Meeting of
Shareholders among others, and ensure that all the shareholders, minority shareholders in particular, were granted with the right to be
informed and capacity to exercise their rights. In the report period, the Company complied with relevant provisions in the Company
Law and Articles of Association and had the witness of a lawyer in convening each General Meeting of Shareholders and ensuring
sufficient number of shareholders with sufficient number of shares attended each meeting. Shareholders attending each meeting can
exercise their rights fully in principle of independence.
2. Relationship between holding shareholders and the listed company: holding shareholders behaved and conducted no act that
directly or indirectly intervened in the Company's decision-making and business activities by bypassing the General Meeting of
Shareholders; the Company was independent from holding shareholders regarding personnel, assets, finance, institution and business
and the Company's Board of Directors and Board of Supervisors can make independent operation. The Company was independent
from holding shareholders regarding personnel, assets, finance, institution and business among others.
3. The Directors and The Board of Directors: the Board of Directors includes four special committees, such as Audit Committee,
Nomination Committee, Strategy Committee and Remuneration and Appraisal Committee, which has provided a favorable support to
the company for the decision-making related issues. Each special committee has operated according to their work responsibilities and
procedure rules, made research and examination for the relative business and major issues of the company, and expressed the
professional opinions in the Board of Directors to offer support and advice for the scientific decision-making of the Board and ensure
the Board’s work more scientific and efficient. Also, the organization of the Board of Directors is in line with the requirement of laws
and regulations, and the independent directors play an important role in the corporate decision-making. So, the company attaches
importance to the function of the independent directors. In the company’s management, the independent directors make careful
review and express the independent views for the financial audit, the affiliated transactions and other issues.
(4)Supervisors and the supervisory committee: The number and composition of the Supervisory Committee of the Company
complied with the requirements of laws and regulations. The Supervisory Committee of the Company formulated the Rules of
Procedure of the Supervisory Committee. The supervisors of the Company were able to perform their duties seriously, take the
attitude of being responsible for all shareholders and supervise the legality and regulation conformity of the Company's finance and
the duty performance of the directors, managers and other senior executives of the Company.
5. Regarding information disclosure and transparency: the Company discharged its duties of information disclosure as specified in
relevant laws and regulations as well as System for Management of Information Disclosure. The Company enhanced communication
171
Sino Great Wall Co., Ltd. 2018 Annual Report
with investors in a variety of channels to promote their understanding and recognition of the Company. The Company took such
communication measures as carefully handling the visit and consultation of each shareholder and duly giving a reply to questions
raised by investors at the interactive platform to ensure that all the shareholders were granted with a fair opportunity to acquire
information and guarantee their right to be informed.
6. Regarding performance assessment and incentive & constraint mechanisms: in the report period, the Company kept improving the
performance evaluation indicator and incentive & constraint mechanisms for senior executives under the instruction of the
Compensation and Evaluation Committee of Board of Directors, wherein their compensation was combined with the Company's
business performance and total development plan and personal working performance, an annual integrated quantitative and
qualitative evaluation was organized on senior executives' fulfillment of duties and senior executives were hired in an open and
transparent way and in compliance with laws and regulations.
7. Regarding stakeholders: the Company fully respected and safeguarded legitimate rights and interests of stakeholders, implemented
a benefit coordination and balance among society, shareholders, the Company, employees and other parties, and enhanced
communication and exchange of the parties to jointly promote sustainable and robust development of the Company.
Does there exist any difference in compliance with the corporate governance , the PRC Company Law and the relevant provisions of
CSRC,
□ Yes √ No
There exist no difference in compliance with the corporate governance , the PRC Company Law and the relevant provisions of
CSRC.
II. Independence and Completeness in business, personnel , assets, organization and finance
The company is completely separate with the controlling shareholder in terms of the business, personnel, assets,
organizations, finance and other aspects, possessing independent and complete business and independent operating
capacity.
1. Business: the Company had independent decision-making and execution agencies, built independent business
departments which, independent from holding shareholders, actual controllers and other companies under control,
handled businesses, and conducted no related transaction of horizontal competition or significant loss of fairness
with holding shareholders, actual controllers and other companies under control.
2.Personnel：The company has a completely independent personnel management and salary system. The company’s
senior manager personnel all are work in the company and receiving remunerations, and they do not hold any
other posts except the post of director or receive remunerations in the controlling shareholder and its affiliated
enterprises. The company's financial staffs do not concurrently hold posts in the controlling shareholder and its
affiliated enterprises.
3. Assets: the Company owned independent sites for office and business operation and other assets, possessed
production systems pertaining to production and operation, boasted equipment related to production and operation
by law and had independent purchase and sales systems and supporting facilities; the Company's holding
shareholders and actual controllers did not occupy the Company's funds, assets or other resources.
4. Agencies: the Company built a full and independent internal institutional framework and functional system out
of its own development, where departments with specific duties defined worked together well and agencies were
fully independent from each other in operation. Meanwhile, the Company set an independent decision-making
agency, office agency and site for production and operation management and the setting of agencies and
production and operation activities were immune from the intervention of other units or individuals.
5.Finance:The company has a standardized financial accounting system, with an independent financial accounting
department, full-time accounting personnel and independent accounting system, being able to make financial
172
Sino Great Wall Co., Ltd. 2018 Annual Report
decisions independently. The company has set up the independent bank account and independently pays the tax.
The situation of the free-occupying of the company’s assets and funds by the controlling shareholder and its
affiliated enterprises does not exist.
III. Horizontal Competitions
□Applicable√Not applicable
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting
Period
1. Annual General Meeting
Investor Disclosure
Sessions Type Meeting Date Disclosure date
participation ratio index
The first
provisional
shareholders’
The first General meeting
provisional Provisional in 2018
shareholders’ shareholders’ 51.78% March 28,2018 March 29,2018 (No.2018-050)
General meeting in General Meeting published on
2018 Juchao Website
（http://www.cnin
fo.com.cn）on
March 29,2018
The Second
provisional
shareholders’
The Second General meeting
provisional Provisional in 2018
shareholders’ shareholders’ 38.84% April 9,2018 April 10,2018 (No.2018-053)
General meeting in General Meeting published on
2018 Juchao Website
（http://www.cnin
fo.com.cn）on
April 10,2018
Annual General
Meeting of 2017
Annual General Annual General (No.2018-071)
34.50% May 16,2018 May 17,2018
Meeting of 2017 Meeting published on
Juchao Website
（http://www.cnin
173
Sino Great Wall Co., Ltd. 2018 Annual Report
fo.com.cn）on May
17,2018
The Third
provisional
shareholders’
The Third General meeting
provisional Provisional in 2018
shareholders’ shareholders’ 34.50% June 21,2018 June 22,2018 (No.2018-081)
General meeting in General Meeting published on
2018 Juchao Website
（http://www.cnin
fo.com.cn）on June
22,2018
The Fourth
provisional
shareholders’
General meeting
The Fourth
in 2018
provisional Provisional
November November (No.2018-147)
shareholders’ shareholders’ 39.64%
15,2018 16,2018 published on
General meeting in General Meeting
Juchao Website
2018
（http://www.cnin
fo.com.cn）on
November
16,2018
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √Not applicable
V. Responsibility performance of independent directors in report period
1. The attending of independent directors to board meetings and shareholders’ general meeting
The attending of independent directors
Independent 是否连续两
本报告期应 以通讯方式
Directors 现场出席董 委托出席董 缺席董事会 次未亲自参 出席股东大
参加董事会 参加董事会
事会次数 事会次数 次数 加董事会会 会次数
次数 次数
议
Tang Jianxin 12 1 11 0 0 否 1
Zhang Yufeng 12 2 9 0 1 否 0
Jiang 14 3 11 0 0 否 2
174
Sino Great Wall Co., Ltd. 2018 Annual Report
Chongguang
Niu Hongjun 2 1 1 0 0 否 1
Yu Haichun 2 1 1 0 0 否 1
Notes to failure to personally attend Board Meetings Successively Twice
2.Objection of independent directors on some relevant issues
Objection of independent directors on some relevant issues
□ Yes √No
Nil
3. Other notes to duty performance of independent directors
Has an independent director’s advice to the Company been accepted
√Yes □ No
Explanation on acceptance of or failure to accept an independent director’s advice to the Company.
In accordance with Instruction for Listed Companies on Building an Independent Director System, Guide to Listed Companies
on Standardized Operation, Articles of Association, and Working System of Independent Directors among other provisions, the
Company's independent directors held an responsible attitude towards the Company and shareholders herein, faithfully performed
their duties in due diligence, took the initiative to attend relevant meetings, carefully deliberated all the proposals, objectively
expressed their own opinions and viewpoints, and conducted a thorough survey on the Company with effort to understand the
Company's production and operation, personnel management, financial management, and internal control among other information
and implementation of resolutions of the Board of Directors and General Meeting of Shareholders.
In the report period, they delivered independent opinions concerning the Company's financing plans, external guarantees, hiring
of an auditing agency, use of funds raised, profit distribution plans, election of the Board of Directors, alteration of promised matters
and related transactions and other matters. They carefully debriefed operation from the management and communicated with certified
public accountants responsible for the annual audit while preparing, examining and disclosing regular reports. By rich specialized
knowledge and industrial experience, they played a positive part in improving the Company's supervision mechanism, promoting the
Board of Directors to make scientific decisions and standardize operation, and safeguarding rights and interests of minority
shareholders by offering many reference opinions and valuable suggestions regarding the Company's development strategies,
institutional improvement, financial management, and standardized operation among others.
VI. Duty Performance of Special Committees under the Board of Directors in the Reporting
Period
The board of directors of the Company has special committees including audit committee, remuneration and appraisal committee,
strategy committee and nomination committee. According to the scope of authority specified in the working rules for them, the
committees conducted study and put forward opinions and suggestions for reference by the board of directors for decision making.
1.Information about fulfillment of the audit Committee of the Board of Directors during
Audit Committee gave a full play to its supervision and auditing functions. In the report period, it deliberated such matters as the
Company's financial information, internal control, substitution of an accounting firm, and relevant reports on preservation of funds
raised and formed and submitted resolutions to the Board of Directors; while auditing annual financial reports, it meticulously
reviewed the Company's financial audit reports and delivered audit opinions, communicated with certified public accountants for the
175
Sino Great Wall Co., Ltd. 2018 Annual Report
annual audit through a communication meeting and other forms, and urged the progress of the audit work to guarantee the success of
the annual audit work.
2. Fulfillment of Duties of the Compensation and Evaluation Committee of the Board of Directors
Compensation and Evaluation Committee kept improving the Company's compensation policy and evaluation mechanism and took
the initiative to promote deepening the management reform. In the report period, the Compensation and Evaluation Committee
convened meetings, supervised and assessed standards for fulfillment of performance and assessment on directors and senior
executives and implementation of the standards, carried out appointment and evaluation procedures for directors and senior
executives and examined the annual basic pay of each senior executive.
3. Fulfillment of duties of Strategy Committee
Strategy Committee helped the Company determine development plans, improve investment decision-making procedures, make
more scientific decisions, and improve its management structure by studying and offering advice for the Company's longterm
development strategies and major investment decisions. In the report period, the Strategy Committee convened a total of five
meetings, deliberating and adopting the Company's proposals regarding foreign investment, financing planning, etc.
4.Fulfillment of duties of Nomination Committee of Board of Directors
Nomination Committee devoted itself in due diligence, offering an instruction on improving the leader assessment mechanism and
talent promotion system and enhancing back-up talent reserves among others and keeping studying and following the Company's
needs for senior executives. In the report period, the Nomination Committee convened meetings to examine qualifications of general
manager candidates and candidates of the eighth board of senior executives.
VII. Work of the supervisory Committee
Did the supervisory Committee find any risk existing in performing the supervision activities in the reporting period?
□Yes √No
The supervisory Committee has no objection against any matters under supervision in the reporting period
VIII. Assessment and incentive Mechanism for Senior executives
The company established the evaluation system based on the targeted responsibility system and adopted signing the annual
responsibility appraisal agreement for the evaluation of the company’s senior management personnel which specified the KPI and
evaluation method with methods related to the evaluation results. During the reporting period, the companies had conformed to the
measures of the targeted responsibility system to assess and evaluate the senior management personnel performances, which
presented in the annual performance.
IX. Internal control situations
1. Specific situations on major defects of internal control discovered during report period
√Yes □ No
Details of major defects of internal control discovered during the reporting period
1. Income cost accounting is not standardized. The company’s claim for a project in Cambodia was US$ 1.13 million (equivalent
to approximately RMB 7 million), which was confirmed in writing by Party A in 2018, but the company confirmed the income in
2017. According to the company's accounting policy, the 7 million yuan income is confirmed to have an intertemporal situation.
2. Insider information registration management is not standardized. The company made a memorandum of progress on major
events in the planning of major asset placements in 2018, but none of the participants in the memorandum and the notified
176
Sino Great Wall Co., Ltd. 2018 Annual Report
personnel signed the memorandum. Violation of the provisions of Articles 6 and 10 of the "Regulations on the Establishment of
Insider Information Registration Management System for Listed Companies". 4. The management of raised funds is not
standardized. (1) The excess use of the raised funds was not corrected and was not disclosed in time. The 35th meeting of the 7th
Board of Directors and the 23rd meeting of the 7th Board of Supervisors reviewed and approved the Proposal on Temporarily
Replenishing Working Capital with Partially Raised Funds, and agreed to use the idle raised funds of 139 million yuan.
Temporary replenishment of working capital. Upon inspection, the company's fund-raising account was deducted by the court on
October 25, 2018 by more than 5.1 million yuan, resulting in the company's actual use of supplementary liquidity totaling more
than the approved supplementary liquidity quota of 327,300 yuan. (2) The management system for raised funds is not perfect.
The company's "Management System for the Use of Raised Funds" does not involve the accountability mechanism for the use of
raised funds in violation of regulations. The regulations on the approval authority for the use of raised funds, decision-making
procedures, and risk control measures are not clear, and are not in compliance with the "Guidelines for the Supervision of Listed
Companies No. 2 - - Article 3 of the Regulation Requirements for the Management and Use of Funds Raised by Listed
Companies. 5. Disposal of company assets and subsidiaries' equity without approval. (1) On December 14, 2017, the company's
wholly-owned subsidiary Shenzhou Great Wall International Engineering Co., Ltd. (International Engineering Company) and
Shenzhen Qianhai Shijie Commercial Factoring Co., Ltd. signed the “Non-Recourse Domestic Factoring Business Contract”. 》,
for the international engineering company's accounts receivable for non-recourse factoring business. According to the provisions
of the “Articles of Association”, the processing of the factoring business belongs to the decision-making authority of the board of
directors of the company. When the company handled the factoring business, it was not reviewed and approved by the company's
board of directors. (2) On November 20, 2018, the general manager's office meeting of the company made a transfer of 60% of
the shares of Shenzhou Great Wall Construction Engineering Co., Ltd. (hereinafter referred to as Shenzhou Jianye) (accounting
for 100% of the shares held by the company). Decide. On November 27, 2018, the company signed an equity transfer agreement
with the counterparty. According to the company's articles of association (Article 112) If the transaction occurred in the company
belongs to any of the following circumstances, the board of directors shall review: ..., (2) the transaction target (such as equity)
accounted for the relevant business income in the most recent fiscal year. The company's most recent audited annual audited
operating income of more than 10%, and the absolute amount exceeds 10 million yuan;). The company transferred the equity of
Shenzhou Jianye without the approval of the board of directors of the company. 6. The fund management is not standardized. (1)
Providing financial assistance to the outside without approval. From 2016 to 2017, the company's wholly-owned subsidiary
Shenzhou Great Wall International Engineering Co., Ltd. and Beijing Anlu Lai Sen Building Materials Co., Ltd., Beijing Hongda
Guangfa Construction Labor Co., Ltd., Beijing Puya Building Decoration Engineering Co., Ltd. Payment business. The above
matters were not approved by the company's board of directors. The company held the sixth meeting of the eighth board of
directors on April 12, 2019, and reviewed and approved the “Proposal on Supplementary Review of External Financial
Provisions”. (2), without approval, handling financing business. In 2018, the company conducts financing activities with
financial institutions, non-financial institutions and individuals without the approval of the company's normal approval process.
(3) Losing control over some bank deposits. During the inspection of bank deposits and capital flows at the end of the period, it
was found that the company was unable to provide bank balances on the balance sheet date of some bank accounts and bank
statements during the audit period, and failed to effectively control some bank deposits to ensure the safety of funds. (4) The
problem of fund raising. In the case of tight capital of the company, multiple borrowings overdue and litigation, there are still
large non-operating payments that have not been cleared. 7. Tax management is not standardized. Lack of invoice management
and other tax management systems, resulting in illegal construction costs. 8. Project management is out of control. Due to
company reasons, some overseas projects of the company's subsidiary Shenzhou International Engineering Co., Ltd. have
stagnated, and the company has lost control of the project. During the audit of the company's overseas projects, we did not obtain
satisfactory audit evidence for the procedures such as letters and interviews.9. In 2018, the company involved more disputes. In
response to such litigation cases, the company has not established a litigation management system, and has not timely and
effectively managed information related to litigation in the case of receiving multiple litigation cases.
177
Sino Great Wall Co., Ltd. 2018 Annual Report
2. Self-evaluation report on internal control
Disclosure date of appraisal report on
April 30,2019
internal control
Disclosure index of appraisal report on Juchao Website:（http://www.cninfo.com.cn）, Selfevaluation report of internal
internal control control in 2018 on April 30,2019
Proportion of total unit assets covered by
appraisal in the total assets of the
100.00%
consolidated financial statements of the
company
Proportion of total unit incomes covered
by appraisal in the total business
100.00%
incomes of the consolidated financial
statements of the company
Standards of Defects Evaluation
Category Financial Report Non-financial Report
Material Defect: Material Defect:
1.Fraud of directors, supervisors and 1.Violation of national laws or
senior management; regulations, normative documents and
significant decision making lacking
2.Material errors appear in the Company’s
scientific and system may lead to
financial report published;
invalid system, no rectification for
3. The certified public auditor finds
material or major defect or other
material wrong reporting in the current
situations that materially affect
financial statement, while the Company
the Company; 2. Violation of
has not found such reporting during its
regulations led to punishment from
operation;4. The audit committee and audit
government department or regulatory
department of the Company exercise
authority. Violation of management
invalid supervision upon internal control;
system or internal control procedure
Standard 5.The result of internal control assessment
led to major business disputes. Ranges
hasn’t been rectified, especially the
of material litigation led to great
material or major defects;
losses;3.The working initiatives of
6.Important business is lack of system
staffs was damaged at a great level,
control or the system loses its validity.
and the working efficiency was
Major Defects:1. No recognized
substantially decreased, which exerted
accounting standards were followed when
major adverse effects on the culture
choosing and applying the accounting
and cohesion of the enterprise, and led
policies;
to serious turnover of core
2.No anti-fraud program and control teams;4.Negative news spreads in the
measures were established; 3.No whole business scope( including the
corresponding control mechanism was extension to industry chain ), or is
established or implemented for treating the concerned by national medias or public
178
Sino Great Wall Co., Ltd. 2018 Annual Report
abnormal or special accounting, and it is ones, which will substantially damage
lack of compensating control;4.One or the enterprise’s reputation, and the
more frauds appeared during the financial negative effects can’t be eliminated all
report process, and which couldn’t the time;5.The Company involved
reasonably guarantee that the formulated punishment from CSRC and involved
financial report would reach the goals of warnings from stock exchange.
being actual and accurate. General Defect:
Other defects besides material defect and
major defect.
(1) Material Defect: amount with wrong
reporting ≧ 10% of total profit amount;
amount with wrong reporting ≧ 10% of Material Defect: Due to the internal
operating income; amount with wrong control defect of non-financial report,
reporting≧ 10% of total asset; amount it may exert impacts of over RMB 10
with wrong reporting≧10% of net million(including RMB10 million ) on
assets;(2) Major Defect: 5% of total profit the total profit amount.Major Defect:
amount≦amount with wrong reporting﹤ Due to the internal control defect of
10% of total profit amount; 5% of non-financial report, it may exert
Standards of Quantitation operating income≦amount with wrong impacts of over RMB 5 million
reporting﹤10% of operating income ;5% (including 5 million but less than 10
of total asset≦amount with wrong million) on the total profit amount.
reporting﹤10% of total asset;5% of net General Defect:Due to the internal
assets ≦amount with wrong reporting﹤ control defect of non-financial report,
10% of net assets;(3) General Defect: it may exert impacts of below RMB 5
amount with wrong reporting﹤5% of million.
operating income. amount with wrong﹤
5% of total asset; amount with wrong
reporting﹤5% of net assets.
Number of major defects in financial
9
reporting（a）
Number of major defects in non
1
financial reporting (a)
Number of important defects in financial
0
reporting（a）
Number of important defects in non
0
financial reporting（a）
X. Internal Control audit report
√ Applicable □Not applicable
Review opinions in the internal control audit report
Reanda Certified Public Accountants (LLP) conducted an audit of the effectiveness of internal control over the Company’s
179
Sino Great Wall Co., Ltd. 2018 Annual Report
financial statements as of December 31, 2018, and issued the Reanda 's No. 2334-[2019] Internal Control Audit Report, with
issuance of the following opinion: We consider that due to the above-mentioned material deficiency and its impact on the
achievement of the control objectives, Sino Great Wall failed to remain effective in all major aspects in the Internal control of
financial reporting in accordance with the Basic Rules for Internal Control of Enterprises and the related regulations on
December 31, 2018.
Disclosure of internal audit report Disclosure
Disclosure date of audit report
April 30,2019
of internal control (full-text)
Disclosure index of audit report
（www.cninfo.com.cn）
of internal control (full-text)
Internal audit report’s opinion Negative opinions
Non-financial reporting the
existence of significant Yes
deficiencies
Has the CPAs issued a qualified auditor’s report of internal control .
√Yes □No
Statement of internal control audit report issued by accounting firm with non-standard opinions
In this internal control audit, Reanda Certified Public Accountants (LLP) notices the following significant defects in the internal
control of the Company's financial reporting:
1. The accounting of income and cost is not standardized. Of the Company's revenue claimed in relation to a project in Cambodia,
USD 1.13 million (equivalent to approximately RMB 7 million) was confirmed in writing by Party A in 2018, but the Company
recognized the revenue in 2017. According to the accounting policies of the Company, the revenue of RMB 7 million is recognized
as intertemporal.
2. Inventory management is not standardized. The management of raw materials is lack of improved system and standard. The raw
materials purchased by the Company for project construction, such as steel, are only accessible in the material purchase and
warehousing management process. The materials purchased and warehoused are directly included in the construction cost of the
construction project of the Company. The actual cost of the issued inventory is not determined by the first-in first-out method,
weighted average method or individual valuation method in accordance with the relevant provisions of Accounting Standards for
Business Enterprises No. 1 - Inventory. It is impossible to accurately measure the quantity and amount of raw materials collected for
the current project and those of raw materials at the end of the period.
3. The insider registration management of insider information is not standardized. A memorandum of major events progress was
prepared in preparation for major assets acquisition in 2018, but none of the participants and insiders indicated in the memorandum
signed the memorandum for confirmation. It violates the provisions of Article 6 and Article 10 of the Provisions on Listed
Companies Establishing Insider Registration Management System of Insider Information.
4. The management of raised funds is not standardized.
(1) The excessive use of the raised funds has not been corrected and disclosed in a timely manner. At the 35th session of the seventh
meeting of the Board of Directors and the 23rd session of the seventh meeting of the Board of Supervisors of the Company, the
Proposal on Temporary Replenishment of Circulating Fund with Part of Idle Raised Funds was considered and adopted, and the
Company was allowed to temporarily supplement circulating funds with idle raised funds of RMB 139 million. Upon inspection, the
raised funds account of the Company was deducted by more than RMB 5.1 million by the court on October 25, 2018, resulting in the
total amount actually used by the Company to supplement circulating funds exceeding the approved amount RMB 327,300 to
supplement circulating funds. (2) The management system of raised funds is not sound. The Company's Management System for Use
of Raised Funds does not involve the responsibility assigning mechanism for the illegal use of raised funds, and the provisions on the
180
Sino Great Wall Co., Ltd. 2018 Annual Report
hierarchical approval authority, decision-making procedures and risk control measures for the use of raised funds are not clear, which
does not conform to Article 3 of Guidelines for Supervision of Listed Companies No. 2 -Supervision Requirements for the
Management and Use of Raised Funds of Listed Companies.
5. The assets of the Company and equity of subsidiaries are disposed without approval.
On December 14, 2017, Sino Great Wall International Engineering Co., Ltd. (International Engineering Company), wholly-owned
subsidiary of the Company, entered into a Non-recourse Domestic Factoring Contract with Shenzhen Qianhai Shihong Commercial
Factoring Co., Ltd. to handle non-recourse factoring business on the accounts receivable of International Engineering Company.
Pursuant to the Articles of Association, handling the factoring business falls within the decision-making authority of the Board of
Directors of the Company. When the Company handles the factoring business, it has not been reviewed and approved by the Board of
Directors of the Company. (2) On November 20, 2018, the General Manager of the Company made the decision to transfer 60%
equity (accounting for 100% of the Company holding its shares) of Sino Great Wall Jianye Engineering Co., Ltd. (hereinafter
referred to as Sino Great Wall Jianye Engineering) at the office meeting. On November 27, 2018, the Company entered into an equity
transfer agreement with the counterparty. According to the Articles of Association (Article 112 Where the transactions of the
Company fall into any of the following circumstances, the Board of Directors shall review and approve them: . (2) The operating
income related to the transaction object in the latest fiscal year accounts for more than 10% of the audited operating income of the
Company in the latest fiscal year, and the absolute amount exceeds RMB 10 million;).
6. Funds management is not standardized.
(1) The financial assistance is provided externally without approval. From 2016 to 2017, Sino Great Wall International Engineering
Co., Ltd., wholly-owned subsidiary of the Company, engaged in many loans entrusted payment business with Beijing Anlulaisen
Building Materials Co., Ltd., Beijing Hongda Guangfa Construction Labor Service Co., Ltd. and Beijing Puya Architectural
Decoration Engineering Co., Ltd. The above matters have not been approved by the Board of Directors of the Company. The
Company held the sixth session of the eighth meeting of the Board of Directors on April 12, 2019, at which the Proposal on
Supplementary Consideration of Providing External Financial Assistance was considered and adopted. (2) Financing business is
handled without approval. In 2018, the Company conducted financing to financial institutions, non-financial institutions and
individuals without going through the normal approval process of the Company. (3) The control over some bank deposits is lost.
During the examination of bank deposits and capital flow at the end of the period, it was found that the Company was unable to
provide bank deposit balances on the balance sheet date of some bank accounts and bank statements during the audit, and failed to
implement effective control over some bank deposits to ensure the safety of funds. (4) Fund raising problems. Under the
circumstance that the Company is short of funds, many loans are overdue and cause litigation, there are still large amounts of
non-operating receivables and payables outstanding. For example, as of the balance sheet date, the Company shall receive RMB
332,026,600 from Longyan Hengda Engineering Co., Ltd. and RMB 158,129,600 from Wuhan Jiutai Weiye Steel Co., Ltd.
7. The tax management is not standardized.
On December 7, 2018, the Second Taxation Office of Beijing Tongzhou District Taxation Bureau of the State Taxation
Administration shall issue the Notice on Tax Matters (JTEST [2018] No.13) to Sino Great Wall International Engineering Co., Ltd.,
subsidiary of the Company. According to the self-inspection of the Company, Sino Great Wall International Engineering Co., Ltd.,
subsidiary of the Company, obtained those listing the expenditures into construction cost of RMB 42.9313 million as a suspect in
writing false VAT ordinary invoices, intelligence VAT ordinary invoices of other provinces and out-of-control VAT special invoices,
thus the taxable income shall be increased by RMB 6.4397 million. The tax management of the Company is not standardized, and the
invoice management and other tax management systems are lacked, resulting in listing the expenditures into the construction cost of
the project in violation of regulations.
8. Project management is out of control. As a result of the company's reasons, the Kuwait Military Academy, the Cambodian Oil
Refinery and other projects of Sino International Engineering Co., Ltd., subsidiary of the Company, have been halted, and the
Newport Project in Qatar, the Kuwait Ministry of Finance Building Project and other projects have been stalled. The Company has
lost control over the above mentioned projects. In the process of auditing the above overseas projects of the Company, we failed to
181
Sino Great Wall Co., Ltd. 2018 Annual Report
obtain satisfactory audit evidence through confirmation, interview and other procedures. We are unable to implement further audit
procedures or substitute audit procedures to obtain adequate and appropriate audit evidence due to the failure of the Company to
provide complete external information.
9. Guarantee is provided externally without approval. According to Article 5, Chapter I of the Management System for External
Guarantee of the Company, "the Company shall not provide external guarantee without the consideration and approval of the general
meeting of stockholders or the Board of Directors". On April 18, 2018, the Company (Party B, obligor to balance supplement) signed
a balance supplement agreement with the Zhongyuan Trust (Party A, creditor) and Sino Great Wall (Fugou) High-speed Railway
Area Investment Co., Ltd. (Party C, debtor). Article 2.2 of the Agreement stipulates that "Where Party C fails to repay any amount or
installment of funds payable (including but not limited to the principal of the loan, interest, compound interest, penalty interest,
liquidated damages, compensation, fund possession cost, creditor's rights realization fee, etc.) on time for any reason in accordance
with the Trust Loan Contract (Main Contract), Party A shall have the right to send written notice to Party B to require Party B to
fulfill the obligation to balance supplement. Balance supplement amount = principal and interest of Party A's principal creditor's
rights and other receivables of Party A - principal and interest of principal creditor's rights actually received by Party A and other
receivables of Party A." The above balance supplement agreement fails to go through the examination and approval procedures in
accordance with the relevant provisions of the Company. 10. In 2018, the Company was involved in a number of cases and disputes.
For this kind of litigation cases, the Company has not established a litigation affair management system, and has failed to manage the
information related to litigation timely and effectively in the case of receiving multiple litigation cases.
Effective internal control can provide reasonable assurance for the truthfulness and completeness of financial reports and related
information, while the above-mentioned major defects make the internal control of Sino Great Wall lose this function.
The above-mentioned major defects have been included in the enterprise internal control evaluation report. In 2018 financial
statement auditing of Sino Great Wall, we have considered the impact of above-mentioned major defects on the nature, time and
scope of the audit process.
In this internal control audit, Reanda Certified Public Accountants (Special General Partnership) noted that the company's
non-financial reporting internal controls have the following major deficiencies:
1. In 2018, the Great Wall of China involved more disputes. In response to such litigation cases, the company has not established a
litigation management system, and has not timely and effectively managed information related to litigation in the case of receiving
multiple litigation cases. Due to the above-mentioned major defects, we remind users of this report to pay attention to the risks
involved. It should be pointed out that we do not express opinions or provide guarantees on the internal control of non-financial
reporting of the Great Wall of China. This paragraph does not affect the audit opinion issued on the effectiveness of internal control
over financial reporting.
Does the internal control audit report issued by the CPAs agree with the self-assessment report of the Board of Directors
√Yes □No
182
Sino Great Wall Co., Ltd. 2018 Annual Report
X. Specifications on Company Securities
Whether the company has any corporate bonds that are publicly issued and listed on the stock exchange, and that are not due or not
fully repaid on the date of approval of the annual report
No
183
Sino Great Wall Co., Ltd. 2018 Annual Report
XI. Financial Statements
1. Audit report
Types of Audit Opinions Disclaimer of Opinion
Signature Date April 28, 2019
Auditor Reanda Certified Public Accountants (special general
partnership)
Report No. Reanda SZ [2019] No. 2333
Chinese Certified Public Accountant: Wang Xinyu and Zhou Zhonghua
Audit Report
Audit report
Reanda SZ [2019] No. 2333
To all shareholders of Sino Great Wall Co., Ltd.：
I. Opinions
We have audited the financial statements of Sino Great Wall Co., Ltd (hereinafter referred to as
“Sino Great Wall”), including the consolidated and parent company’s balance sheet as of December 31,
2018, the consolidated and parent company’s income statement, the consolidated and parent company’s
cash flow statement, the consolidated and parent company’s statement of changes in shareholder’s equity
and the notes to financial statements of Year 2018.
We won’t express any opinions on the attached financial statements of Sino Great Wall. Due to the
matters described in the section “Basis for Disclaimer of Opinion”, we are unable to obtain sufficient and
appropriate audit evidence on which to base the opinion on the financial statements.
II Basis for Disclaimer of Opinion
1. Internal control failure
During our review of the rationality behind and effectiveness of the internal control design related to
the financial statements of Sino Great Wall on December 31, 2018, we found that many internal control
failures have had a significant and extensive impact on the financial statements. (More details in Internal
Control Audit Report, Reanda SZ [2019] No. 2333) We performed the audit based on sampling. Therefore,
in the case of invalid internal control, no sufficient and appropriate audit evidence could be obtained
through this procedure to serve as the basis for an audit opinion.
2. Limited scope of audit
①As of the audit report date, the Company has not obtained sufficient confirmation letters to its
bank deposits, accounts receivable, other receivables, prepayments, long-term and short-term loans,
184
Sino Great Wall Co., Ltd. 2018 Annual Report
accounts payable, advance receipts, other payables, and notes payable and the confirmed amount is small.
Besides, there is no alternative audit procedures to obtain sufficient and appropriate audit evidence to
verify the authenticity and accuracy of the deposits and payments mentioned above.
② During the audit of the Company’s important engineering projects, procedures such as
confirmation in writing and interviews, failed to yield satisfactory audit evidence. Due to the Company’s
failure to provide complete external information, we are unable to further implement audit procedures or
alternative procedures to obtain sufficient and appropriate audit evidence for the revenue and cost of the
projects.
Sino Great Wall launched a non-recourse factoring business with Dagang Financial Leasing
(Shanghai) Co., Ltd. in June 2016. In December 2017, it launched another non-recourse factoring
business with Shihong Factoring Co., Ltd. As of the end of 2018, the Company received 140.954 million
RMB and 91.153 million RMB respectively from the original debtors, which were not transferred to the
factoring parties. We couldn’t obtain satisfactory audit evidence during our verification of this transaction
and are unable to determine the nature of the transaction and its impact on the company’s financial
statements.
3. Failure to project the impact of project suspension, law suit and claim for damages
Many of the Company’s projects were suspended during construction, its major bank accounts were
frozen, employees dismissed, and some project related guarantees were claimed. A large amount of debts
was overdue and involved in litigation. Completed projects with unsettled inventory and investment
expenses may have the risk of impairment, and the accounts receivable confirmed by the project may
have bad debt risk. The guarantee may result in claim for loss, and the litigation may result in loss from
lawsuit. Due to the largely uncertain impact of matters mentioned above, we are unable to evaluate the
Company's judgment on the them.
4. Significant uncertainties in continued operations
In 2018, the Company’s major bank accounts were frozen with overdue debts, many of which are
involved in litigation. Projects under construction were suspended and employees were dismissed with
overdue salaries. The Company is faced with fund shortage to sustain its operation and its financial status
is worsening, resulting in huge amount of loss in 2018. The above situation indicates that there is
significant uncertainty in the Company’s ability to continue its operations. We are unable to determine
whether it is appropriate for Sino Great Wall to apply the continued operations assumption to prepare the
2018 financial statements.
5. Investigation of China Securities Regulatory Commission
The Company received the Notification of Investigation (No. JDCZ19041) from China Securities
Regulatory Commission, which decided to investigate the Company in accordance with Securities Law of
the People's Republic of China on suspicion of law-breaking operations. As of the issue date of the
financial statements, the investigation had not come to any conclusion.
III The Management and Governance Team’s Responsibilities for the Financial Statements
The management of the Company (hereinafter referred to as “the Management”) shall be responsible
for compiling financial statements in accordance with the Accounting Standards for Business Enterprises
for the true and fair presentation as well as designing, executing and protecting the internal control related
to the compilation of financial statements so as to make the financial statements be free from any serious
misstatement caused by frauds and errors.
In the preparation of the financial statements, the management is responsible for assessing the
continued operation ability of Sino Great Wall, disclosing the matters related to continued operations (if
applicable), and applying the continued operations assumption unless it is planned to liquidate, terminate
185
Sino Great Wall Co., Ltd. 2018 Annual Report
operations or make other necessary realistic choice.
The governance team is responsible for overseeing the financial reporting process of Sino Great
Wall.
IV CPA’s Responsibility for Auditing Financial Statements
Our responsibility is to conduct our audit in accordance with Chinese CPA Standards on Auditing
and present an audit report. Due to the matters described in the section “Basis for Disclaimer of Opinion”,
we are unable to obtain sufficient appropriate audit evidence on which to base the opinion on the financial
statements.
According to the Code of Ethics for Chinese Certified Public Accountants, we are independent of
Sino Great Wall and perform other duties in terms of professional ethics.
Reanda Certified Public Accountants Chinese Certified Public Accountant:
(special general partnership) (Engagement Partner):
Beijing China Chinese Certified Public Accountant:
April 28, 2019
II. Financial Statements
Unit in the financial statements: RMB
1. Consolidated Balance Sheet
Prepared by: Sino Great Wall Co., Ltd.
Unit: Yuan
Item Ending balance Opening balance
Current assets
Monetary resources 658,714,886.48 1,604,973,916.12
Deposit reservation for balance
Funds lent
Financial assets measured with fair
value and having the change of fair value
recorded in the gain or loss of current
186
Sino Great Wall Co., Ltd. 2018 Annual Report
period
Derivative financial assets
Notes receivable and accounts
4,204,113,048.24 5,994,876,806.96
receivable
Including: notes receivable 1,518,790.00 288,201,562.88
Accounts receivable 4,202,594,258.24 5,706,675,244.08
Advance payment 220,261,619.13 225,208,527.88
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserves
receivable
Other accounts receivable 2,186,223,361.40 1,674,675,360.28
Including: accrued interest
receivable
Dividends receivable
Redemptory monetary capital for
sale
Inventories 717,531,578.23 556,839,325.50
Assets held for sale 105,075,792.00
Non-current assets coming due
within one year
Other current assets 5,795,797.44 17,126,911.05
Total current assets 8,097,716,082.92 10,073,700,847.79
Non-current assets:
Disbursement of advances and
loans
Available-for-sale financial assets 10,338,500.00 10,338,500.00
Held-to-maturity investments
Long-term accounts receivable 16,708,613.19 14,328,557.82
Long-term equity investments 106,837,810.83
Investment real estate
Fixed assets 158,746,947.91 174,537,150.56
Construction in progress 36,697,284.04 4,968,590.96
Capitalized biological assets
Oil and gas assets
Intangible assets 99,921,251.67 127,524,445.00
187
Sino Great Wall Co., Ltd. 2018 Annual Report
Development costs
Goodwill 27,268,234.53 64,494,271.55
Long-term deferred expenses 6,727,688.90 10,124,913.15
Deferred income tax assets 117,983,727.91 118,233,337.36
Other non-current assets 924,509,792.99 1,069,594,572.11
Total non-current assets 1,505,739,851.97 1,594,144,338.51
Total assets 9,603,455,934.89 11,667,845,186.30
Current liabilities:
Short-term loans 2,862,584,629.01 3,477,200,420.55
Borrowings from the central bank
Absorption of deposits and
interbank deposit
Loans from banks and other
financial institutions
Financial liabilities measured with
fair value and having the change of fair
value recorded in the gain or loss of
current period
Derivative financial liabilities
Notes payable and accounts payable 1,926,243,130.15 2,626,177,075.77
Advances from customers 478,101,743.92 146,379,852.67
Financial assets sold under
repurchase agreements
Handling charges and commissions
payable
Employee compensation payable 86,414,858.86 21,911,542.07
Taxes and surcharges payable 393,957,887.52 357,445,477.71
Other accounts payable 2,212,412,970.43 537,070,684.98
Including: interest payable 280,806,670.49 16,105,263.85
Dividends payable 8,541,818.64
Reinsurance accounts payable
Reserves for insurance contracts
Receivings from vicariously traded
securities
Receivings from vicariously sold
securities
Liabilities held for sale
188
Sino Great Wall Co., Ltd. 2018 Annual Report
Non-current liabilities coming due
975,719,981.55 820,422,471.45
within one year
Other current liabilities 121,529,600.95
Total current liabilities 8,935,435,201.44 8,108,137,126.15
Non-current liabilities:
Long-term loans 120,000,000.00 843,092,471.02
Bonds payable 254,801,342.47 345,000,000.00
Including: preferred stock
Perpetual debts
Long-term accounts payable 322,990.35 81,945,567.86
Long-term employee compensation
payable
Estimated liabilities 2,958,723.15 3,414,189.15
Deferred income
Deferred income tax liabilities 24,369,456.18 26,088,961.71
Other non-current liabilities
Total non-current liabilities 402,452,512.15 1,299,541,189.74
Total liabilities 9,337,887,713.59 9,407,678,315.89
Total owners’ equity:
Capital stock 1,698,245,011.00 1,698,245,011.00
Other equity instruments
Including: preferred stock
Perpetual debts
Capital reserve -1,298,846,540.07 -1,299,349,701.74
Less: treasury stock
Other comprehensive income -50,380.95 858,242.13
Special reserve 21,026,082.43 164,231,078.18
Surplus reserve 84,394,441.23 84,394,441.23
General risk reserves
Undistributed profits -269,566,140.13 1,503,103,396.72
Total equity attributable to owners of
235,202,473.51 2,151,482,467.52
Parent Company
Minority equity 30,365,747.79 108,684,402.89
Total owners’ equity 265,568,221.30 2,260,166,870.41
Total liabilities and owners’ equity 9,603,455,934.89 11,667,845,186.30
189
Sino Great Wall Co., Ltd. 2018 Annual Report
Legal Representative: Chen Lue
Accounting Principal: Yang Chunling
Head of the Accounting Department: Yang Chunling
2. Balance Sheet of Parent Company
Unit: Yuan
Item Ending balance Opening balance
Current assets
Monetary resources 46,778,625.47 407,959,304.60
Financial assets measured with fair
value and having the change of fair value
recorded in the gain or loss of current
period
Derivative financial assets
Notes receivable and accounts
receivable
Including: notes receivable
Accounts receivable
Advance payment 3,865,500.01
Other accounts receivable 2,986,852,664.14 3,690,967,483.22
Including: accrued interest
receivable
Dividends receivable 100,000,000.00 100,000,000.00
Inventories
Assets held for sale
Non-current assets coming due
within one year
Other current assets 2,604,075.38 2,175,646.45
Total current assets 3,036,235,364.99 4,104,967,934.28
Non-current assets:
Available-for-sale financial assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments 3,323,211,536.66 3,311,211,536.66
Investment real estate
190
Sino Great Wall Co., Ltd. 2018 Annual Report
Fixed assets 36,371.12 52,246.48
Construction in progress
Capitalized biological assets
Oil and gas assets
Intangible assets
Development costs
Goodwill
Long-term deferred expenses 1,074,666.67 168,284.84
Deferred income tax assets
Other non-current assets 728,328,020.00 550,524,570.00
Total non-current assets 4,052,650,594.45 3,861,956,637.98
Total assets 7,088,885,959.44 7,966,924,572.26
Current liabilities:
Short-term loans 2,189,866,602.21 2,287,870,000.00
Financial liabilities measured with
fair value and having the change of fair
value recorded in the gain or loss of
current period
Derivative financial liabilities
Notes payable and accounts payable 95,000,000.00 537,227,578.11
Advances from customers
Employee compensation payable 15,016,143.39 1,580,335.12
Taxes and surcharges payable 97,149,029.10 97,124,633.81
Other accounts payable 1,347,473,661.05 392,422,663.75
Including: interest payable 243,458,030.15 13,002,236.21
Dividends payable 8,541,818.64
Liabilities held for sale
Non-current liabilities coming due
866,250,000.00 700,000,000.00
within one year
Other current liabilities
Total current liabilities 4,610,755,435.75 4,016,225,210.79
Non-current liabilities:
Long-term loans 800,000,000.00
Bonds payable 100,000,000.00
Including: preferred stock
Perpetual debts
191
Sino Great Wall Co., Ltd. 2018 Annual Report
Long-term accounts payable
Long-term employee compensation
payable
Estimated liabilities
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 900,000,000.00
Total liabilities 4,610,755,435.75 4,916,225,210.79
Total owners’ equity:
Capital stock 1,698,245,011.00 1,698,245,011.00
Other equity instruments
Including: preferred stock
Perpetual debts
Capital reserve 1,237,956,472.37 1,237,956,472.37
Less: treasury stock
Other comprehensive income
Special reserve
Surplus reserve 26,309,287.00 26,309,287.00
Undistributed profits -484,380,246.68 88,188,591.10
Total owners’ equity 2,478,130,523.69 3,050,699,361.47
Total liabilities and owners’ equity 7,088,885,959.44 7,966,924,572.26
3. Consolidated Income Statement
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
I. Gross operating income 2,426,987,687.02 6,497,124,980.52
Including: operating income 2,426,987,687.02 6,497,124,980.52
Interest income
Insurance premiums
earned
Handling charges and
commission income
II. Gross operating cost 3,906,818,404.18 5,990,935,078.96
Including: operating cost 2,449,500,634.87 4,886,354,499.66
192
Sino Great Wall Co., Ltd. 2018 Annual Report
Interest expenditure
Handling charges and
commission expenditure
Surrender value
Net payments for
insurance claims
Net provision insurance
contracts
Expenditures dividend
policy
Reinsurance expenses
Taxes and surcharges 4,790,660.57 4,533,005.61
Selling expenses 28,300,802.42 32,213,247.97
Management expenses 311,698,800.53 312,957,207.20
R&D expenses
Financial expenses 606,015,536.23 432,590,607.55
Including: interest
295,397,174.36
expenses
Interest income 15,353,873.68
Asset impairment loss 506,511,969.56 322,286,510.97
Plus: Other incomes 52,040.48 2,211,128.89
Investment income (Losses
30,219,918.01 -387,601.37
are marked with a “-”)
Including: Income from
investment in jointly-run enterprises
and joint ventures
Profits from changes in fair
value (Losses are marked with a “-”)
Exchange earning (Losses
0.00
are marked with a “-”)
Proceeds from asset
disposal (Losses are marked with a -150,250.00
“-”)
III. Operating profit (Losses are
-1,449,558,758.67 507,863,179.08
marked with a “-”)
Plus: Non-Operating Income 128,699,835.85 156,426.78
Less: Non-Operating
395,623,593.98 -3,030,152.73
Expenditure
193
Sino Great Wall Co., Ltd. 2018 Annual Report
IV: Total profit (Losses are marked
-1,716,482,516.80 511,049,758.59
with a “-”)
Less: Expense of income tax 3,281,922.60 127,003,731.76
V. Net profit (Losses are marked with
-1,719,764,439.40 384,046,026.83
a “-”)
(I) Net profits from continued
operations (Losses are marked with a
“-”)
(II) Net profits from
discontinued operations (Losses are
marked with a “-”)
Net profit attributed to the parent
-1,704,739,736.40 380,090,990.82
company’s owners
Profit and loss of minority
-15,024,703.00 3,955,036.01
shareholders
VI. Net of tax for other
-908,623.08 858,242.13
comprehensive income
Net of tax for comprehensive
income attributed to the parent -908,623.08 858,242.13
company’s owners
(I) Other comprehensive income
that cannot be reclassified into profit
or loss
1. Remeasure the change
in the defined benefit plan
2. Other comprehensive
income that cannot be transferred
with equity method
(II) Other comprehensive
income to be reclassified into profit -908,623.08 858,242.13
or loss
1. Other comprehensive
income that can be transferred with
equity method
2. Gains and losses from
changes in fair value of
available-for-sale financial assets
3. Held-to-maturity
investment reclassified as gains and
losses on available-for-sale financial
assets
194
Sino Great Wall Co., Ltd. 2018 Annual Report
4. Effective portion of
cash flow hedge gains and losses
5. Balance from
conversion of foreign-currency -908,623.08 858,242.13
financial statements
6. Others
VI. Net of tax for other
comprehensive income attributed to
minority stockholders
VII. Total amount of composite
-1,720,673,062.48 384,904,268.96
benefits
Total amount of composite
benefits attributed to the parent -1,705,648,359.48 380,949,232.95
company’s owners
Total amount of composite
benefits attributed to minority -15,024,703.00 3,955,036.01
stockholders
VIII. Earnings per share
(I) Basic earnings per share -1.004 0.220
(II) Diluted earnings per share -1.004 0.220
f the enterprise is merged under the same control in the current period, the net profit realized by the merged party before the merger shall be
RMB , and the net profit realized by the merged party in the last period shall be RMB
Legal Representative: Chen Lue
Accounting Principal: Yang Chunling
Head of the Accounting Department: Yang Chunling
4. Parent company’s income statement
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
I. Operating income 197,962.06 240,558.55
Less: operating cost 0.00 1,482.50
Taxes and surcharges 232,339.11 486,860.22
Selling expenses 1,041,800.14 793,644.62
Management expenses 46,082,221.37 48,845,134.77
R&D expenses
Financial expenses 439,946,225.01 94,901,413.49
195
Sino Great Wall Co., Ltd. 2018 Annual Report
Including: interest
expenses
Interest income
Asset impairment loss 14,901,696.51 7,489,577.66
Plus: Other incomes 7,211.91
Investment income (Losses
100,000,000.00
are marked with a “-”)
Including: Income from
investment in jointly-run enterprises
and joint ventures
Profits from changes in fair
value (Losses are marked with a “-”)
Proceeds from asset
disposal (Losses are marked with a
“-”)
II. Operating profit (Losses are
-502,006,320.08 -52,270,342.80
marked with a “-”)
Plus: Non-Operating Income 100,000,000.00 0.01
Less: Non-Operating
102,632,717.26
Expenditure
III: Total profit (Losses are marked
-504,639,037.34 -52,270,342.79
with a “-”)
Less: Expense of income tax
IV. Net profit (Losses are marked
-504,639,037.34 -52,270,342.79
with a “-”)
(I) Net profits from continued
operations (Losses are marked with a
“-”)
(II) Net profits from
discontinued operations (Losses are
marked with a “-”)
V. Net of tax for other comprehensive
income
(I) Other comprehensive income
that cannot be reclassified into profit
or loss
1. Remeasure the change
in the defined benefit plan
2. Other comprehensive
income that cannot be transferred
196
Sino Great Wall Co., Ltd. 2018 Annual Report
with equity method
(II) Other comprehensive
income to be reclassified into profit
or loss
1. Other comprehensive
income that can be transferred with
equity method
2. Gains and losses from
changes in fair value of
available-for-sale financial assets
3. Held-to-maturity
investment reclassified as gains and
losses on available-for-sale financial
assets
4. Effective portion of
cash flow hedge gains and losses
5. Balance from
conversion of foreign-currency
financial statements
6. Others
VI. Total amount of composite
-504,639,037.34 -52,270,342.79
benefits
VII. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share
5. Consolidated Statements of Cash Flows
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
I. Cash flow from operating activities
Cash received from sales of
3,468,136,123.20 4,642,883,579.49
goods and rending of services
Net increase in customer
deposits and interbank deposits
Net increase for borrowing from
the central bank
Net increase in placements from
other financial institutions
Cash premiums received on
197
Sino Great Wall Co., Ltd. 2018 Annual Report
original insurance contracts
Cash received from re-insurance
business
Net increase in deposits and
investments from insurers
Net increase for disposals of
financial assets measured as fair
value and the variation included in
current profit and loss
Interest, handling charges and
commissions received
Net increase in placements from
financial institutions
Net increase in repurchasing
business capital
Receipts of tax refunds 3,982,148.20 11,520,458.96
Other cash received relating to
4,934,012,815.86 6,134,642,883.34
operating activities
Sub-total of cash inflows from
8,406,131,087.26 10,789,046,921.79
operating activities
Cash payments for goods
2,715,043,669.32 5,007,872,564.26
purchased and services received
Net increase in loans and
advances to customers
Net increase in deposits with the
central bank and other financial
institutions
Payments of claims for original
insurance contracts
Interest, handling charges and
commissions paid
Commissions on insurance
policies paid
Cash payments to and on behalf
262,092,659.22 380,713,969.98
of employees
Payments of all types of taxes 72,091,894.26 212,006,262.08
Other cash payments relating to
4,529,023,809.01 6,970,322,744.12
operating activities
Sub-total of cash outflows from
7,578,252,031.81 12,570,915,540.44
operating activities
198
Sino Great Wall Co., Ltd. 2018 Annual Report
Net cash flows from operating
827,879,055.45 -1,781,868,618.65
activities
II. Cash flows from investing
activities
Cash received from disposals
2,000,000.00
and withdrawals of investment
Cash received from returns on
investments
Net cash received from disposals
of fixed assets, intangible assets and 424,000.00 85,000.00
other long-term assets
Net cash received from disposals
of subsidiaries and other business
3,400,000.00
units
Other cash payments relating to
investing activities
Sub-total of cash inflows from
3,824,000.00 2,085,000.00
investing activities
Cash payments to acquire and
construct fixed assets, intangible 9,496,541.03 48,204,408.85
assets and other long-term assets
Cash payments to acquire
182,993,849.80 840,948,723.77
investments
Net increase in secured loans
Net cash payments for
acquisitions of subsidiaries and other 2,340,123.50
business units
Other cash payments relating to
2,990,381.41 131,500,000.00
investing activities
Sub-total of cash outflows from
195,480,772.24 1,022,993,256.12
investing activities
Net cash flows from investing
-191,656,772.24 -1,020,908,256.12
activities
III. Cash flows from financing
activities
Cash received from investors 12,490,000.00 30,240,000.00
Including: Cash received from
minority shareholders
Cash received from borrowings 1,414,923,533.71 4,537,777,192.35
199
Sino Great Wall Co., Ltd. 2018 Annual Report
Proceeds from issuance of bonds 344,800,000.00
Other cash received relating to
54,209,648.35 179,327,200.00
financing activities
Sub-total of cash inflows from
1,481,623,182.06 5,092,144,392.35
financing activities
Cash repayments of amounts
2,438,563,678.82 1,998,607,849.12
borrowed
Cash payments for distribution
of dividends or profits, or cash 177,477,175.65 332,584,990.54
payments for interest expenses
Including: Subsidiary
companies’ payment to minority
shareholders for distribution of
dividends or profit
Other cash payments relating to
22,512,800.03 233,071,283.83
financing activities
Sub-total of cash outflows from
2,638,553,654.50 2,564,264,123.49
financing activities
Net cash flows from financing
-1,156,930,472.44 2,527,880,268.86
activities
IV. Effect of foreign exchange rate
-746,604.37 -21,586,126.02
changes on cash and cash equivalents
V. Net increase in cash and cash
-521,454,793.60 -296,482,731.93
equivalents
Plus: Cash and cash equivalents
647,222,590.48 943,705,322.41
at the beginning of period
VI. Cash and cash equivalents at the
125,767,796.88 647,222,590.48
end of period
6. Consolidated Statements of Cash Flows of the Parent Company
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
I. Cash flow from operating activities
Cash received from sales of
265,320.00
goods and rending of services
Receipts of tax refunds
Other cash received relating to
3,916,915,819.93 4,283,071,598.59
operating activities
Sub-total of cash inflows from 3,916,915,819.93 4,283,336,918.59
200
Sino Great Wall Co., Ltd. 2018 Annual Report
operating activities
Cash payments for goods
purchased and services received
Cash payments to and on behalf
494,240.89
of employees
Payments of all types of taxes 234,343.88 396,447.37
Other cash payments relating to
2,670,055,342.90 5,546,418,464.78
operating activities
Sub-total of cash outflows from
2,670,289,686.78 5,547,309,153.04
operating activities
Net cash flows from operating
1,246,626,133.15 -1,263,972,234.45
activities
II. Cash flows from investing
activities
Cash received from disposals
and withdrawals of investment
Cash received from returns on
investments
Net cash received from disposals
of fixed assets, intangible assets and
other long-term assets
Net cash received from disposals
of subsidiaries and other business
units
Other cash payments relating to
investing activities
Sub-total of cash inflows from
investing activities
Cash payments to acquire and
construct fixed assets, intangible 65,440.00
assets and other long-term assets
Cash payments to acquire
160,000,000.00 696,324,570.00
investments
Net cash payments for
acquisitions of subsidiaries and other
business units
Other cash payments relating to
investing activities
Sub-total of cash outflows from
160,000,000.00 696,390,010.00
investing activities
201
Sino Great Wall Co., Ltd. 2018 Annual Report
Net cash flows from investing
-160,000,000.00 -696,390,010.00
activities
III. Cash flows from financing
activities
Cash received from investors
Cash received from borrowings 840,650,000.00 3,085,070,000.00
Proceeds from issuance of bonds 99,800,000.00
Other cash received relating to
financing activities
Sub-total of cash inflows from
840,650,000.00 3,184,870,000.00
financing activities
Cash repayments of amounts
1,902,673,705.66 980,200,000.00
borrowed
Cash payments for distribution
of dividends or profits, or cash 100,441,437.45 282,451,200.03
payments for interest expenses
Other cash payments relating to
31,000,000.00
financing activities
Sub-total of cash outflows from
2,003,115,143.11 1,293,651,200.03
financing activities
Net cash flows from financing
-1,162,465,143.11 1,891,218,799.97
activities
IV. Effect of foreign exchange rate
changes on cash and cash equivalents
V. Net increase in cash and cash
-75,839,009.96 -69,143,444.48
equivalents
Plus: Cash and cash equivalents
99,547,899.86 168,691,344.34
at beginning of period
VI. Cash and cash equivalents at end
23,708,889.90 99,547,899.86
of period
7. Consolidated Statement of Changes in Owners’ Equity
Amount of the current period
Unit: Yuan
Current period
Equity attributable to owners of Parent Company Mino Total
Item
Capi Other equity Capit Capit Other Capit Capit Other Capit rity owne
tal instruments al al equit al al equit al equit rs’
202
Sino Great Wall Co., Ltd. 2018 Annual Report
stoc reserv stock y reserv stock y reserv y equit
k Pref Per e instru e instru e Capit y
erre petu ments ments al Other
Oth
d al stock equit
ers
stoc debt y
k s instru
ments
1,69 -1,29 1,503 2,260
I. Balance at the 164,2 84,39 108,6
8,24 9,349 858,2 ,103, ,166,
end of the last 31,07 4,441 84,40
5,01 ,701. 42.13 396.7 870.4
year 8.18 .23 2.89
1.00 74 1 0
Plus:
adjustments for
changes in
accounting
policies
Correction of
accounting
errors in prior
periods
Business
combination
under common
control
Others
1,69 -1,29 1,503 2,260
II. Balance at 164,2 84,39 108,6
8,24 9,349 858,2 ,103, ,166,
the beginning of 31,07 4,441 84,40
5,01 ,701. 42.13 396.7 870.4
the year 8.18 .23 2.89
1.00 74 1 0
III.
Increases/decrea -1,77 -1,99
-908, -143, -78,3
ses in the 503,1 2,669 4,598
623.0 204,9 18,65
current period 61.67 ,536. ,649.
8 95.75 5.10
(“-” for 84 10
decreases)
-1,70 -1,71
(I) Total -15,0
-50,3 4,739 9,814
comprehensive 24,70
80.95 ,736. ,820.
income 3.00
40 35
(II) Capital 503,1 -858, -63,2 -63,6
203
Sino Great Wall Co., Ltd. 2018 Annual Report
contributed or 61.67 242.1 93,95 49,03
reduced by 3 2.10 2.56
owners
1. Common
shares 490,0 490,0
contributed by 00.00 00.00
owners
2. Capital
contributed by
holders of other
equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
-858, -63,7 -64,1
503,1
4. Others 242.1 83,95 39,03
61.67
3 2.10 2.56
-67,9 -67,9
(III) Profit
29,80 29,80
distribution
0.44 0.44
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk
reserves
3. Profits
-67,9 -67,9
distributed to
29,80 29,80
owners (or
0.44 0.44
shareholders)
4. Others
(IV) Internal
carry-forward of
owners’ equity
1. Conversion of
capital reserves
into paid-in
capital (or
capital stock)
2. Conversion of
204
Sino Great Wall Co., Ltd. 2018 Annual Report
surplus reserves
into paid-in
capital (or
capital stock)
3. Surplus
reserves
offsetting losses
4.
Carried-forward
retained
earnings of
changes in
defined benefit
plan
5. Others
-143, -143,
(V) Special
204,9 204,9
reserve
95.75 95.75
1. Amount -143, -143,
withdrawn in the 204,9 204,9
current period 95.75 95.75
2. Amount used
in the current
period
(VI) Others
1,69 -1,29
IV. Balance at 21,02 84,39 -269, 30,36 265,5
8,24 8,846 -50,3
the end of the 6,082 4,441 566,1 5,747 68,22
5,01 ,540. 80.95
current period .43 .23 40.13 .79 1.30
1.00 07
Amount of the last period
Unit: Yuan
Last period
Equity attributable to owners of Parent Company Total
owne
Other equity Mino
rs’
instruments rity
Other Other equit
Capi Capit Capit Capit equit
Item equit equit y
Pref Per Capit Capit
tal al al al y
erre petu al y al y Other
stoc Oth reserv reserv reserv Capit
d al stock instru stock instru equit
k ers e e e al
stoc debt ments ments y
stock
k s instru
ments
205
Sino Great Wall Co., Ltd. 2018 Annual Report
1,69 -1,29 1,830
I. Balance at the 65,68 84,39 1,228, 52,53
8,24 9,349 ,482,
end of the last 7,868 4,441 970,4 4,755
5,01 ,701. 872.5
year .14 .23 98.86 .10
1.00 74 9
Plus:
adjustments for
changes in
accounting
policies
Correction of
accounting
errors in prior
periods
Business
combination
under common
control
Others
1,69 -1,29 1,830
II. Balance at 65,68 84,39 1,228, 52,53
8,24 9,349 ,482,
the beginning of 7,868 4,441 970,4 4,755
5,01 ,701. 872.5
the year .14 .23 98.86 .10
1.00 74 9
III.
Increases/decrea
98,54 274,1 56,14 429,6
ses in the 858,2
3,210 32,89 9,647 83,99
current period 42.13
.04 7.86 .79 7.82
(“-” for
decreases)
(I) Total 380,0 3,955 384,9
858,2
comprehensive 90,99 ,036. 04,26
42.13
income 0.83 01 8.97
(II) Capital
-4,06 52,19 48,13
contributed or
3,392. 4,611 1,219
reduced by
31 .78 .47
owners
1. Common
30,24 30,24
shares
0,000 0,000
contributed by
.00 .00
owners
2. Capital
206
Sino Great Wall Co., Ltd. 2018 Annual Report
contributed by
holders of other
equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
-4,06 21,95 17,89
4. Others 3,392. 4,611 1,219
31 .78 .47
-101, -101,
(III) Profit
894,7 894,7
distribution
00.66 00.66
1. Withdrawal of
surplus reserves
2. Withdrawal of
general risk
reserves
3. Profits
-101, -101,
distributed to
894,7 894,7
owners (or
00.66 00.66
shareholders)
4. Others
(IV) Internal
carry-forward of
owners’ equity
1. Conversion of
capital reserves
into paid-in
capital (or
capital stock)
2. Conversion of
surplus reserves
into paid-in
capital (or
capital stock)
3. Surplus
reserves
offsetting losses
4.
207
Sino Great Wall Co., Ltd. 2018 Annual Report
Carried-forward
retained
earnings of
changes in
defined benefit
plan
5. Others
98,54 98,54
(V) Special
3,210 3,210
reserve
.04 .04
1. Amount 98,54 98,54
withdrawn in the 3,210 3,210
current period .04 .04
2. Amount used
in the current
period
(VI) Others
1,69 -1,29 2,260
IV. Balance at 164,2 84,39 1,503, 108,6
8,24 9,349 858,2 ,166,
the end of the 31,07 4,441 103,3 84,40
5,01 ,701. 42.13 870.4
current period 8.18 .23 96.72 2.89
1.00 74 1
8. Statement of Changes in Equity of Owners of Parent Company
Amount of the current period
Unit: Yuan
Current period
Other equity Undis
Other
instruments Less: tribut Total
Item Capita Capital compre Special Surplus
Prefer Perpe treasury ed owners
l stock Other reserve hensive reserve reserve
red tual stock profit ’ equity
s income
stock debts s
I. Balance at the 1,698, 1,237,9 88,18 3,050,6
26,309,
end of the last 245,0 56,472. 8,591. 99,361.
287.00
year 11.00 37 10 47
Plus:
adjustments for
changes in
accounting
policies
208
Sino Great Wall Co., Ltd. 2018 Annual Report
Correction of
accounting
errors in prior
periods
Others
II. Balance at 1,698, 1,237,9 88,18 3,050,6
26,309,
the beginning of 245,0 56,472. 8,591. 99,361.
287.00
the year 11.00 37 10 47
III.
Increases/decrea -572, -572,56
ses in the current 568,8 8,837.7
period (“-” for 37.78 8
decreases)
(I) Total -504, -504,63
comprehensive 639,0 9,037.3
income 37.34 4
(II) Capital
contributed or
reduced by
owners
1. Common
shares
contributed by
owners
2. Capital
contributed by
holders of other
equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others
-67,9
(III) Profit -67,929
29,80
distribution ,800.44
0.44
1. Withdrawal of
surplus reserves
2. Profits -67,9 -67,929
distributed to 29,80 ,800.44
209
Sino Great Wall Co., Ltd. 2018 Annual Report
owners (or 0.44
shareholders)
3. Others
(IV) Internal
carry-forward of
owners’ equity
1. Conversion of
capital reserves
into paid-in
capital (or
capital stock)
2. Conversion of
surplus reserves
into paid-in
capital (or
capital stock)
3. Surplus
reserves
offsetting losses
4.
Carried-forward
retained
earnings of
changes in
defined benefit
plan
5. Others
(V) Special
reserve
1. Amount
withdrawn in the
current period
2. Amount used
in the current
period
(VI) Others
IV. Balance at 1,698, 1,237,9 -484, 2,478,1
26,309,
the end of the 245,0 56,472. 380,2 30,523.
287.00
current period 11.00 37 46.68 69
Amount of the last period
Unit: Yuan
210
Sino Great Wall Co., Ltd. 2018 Annual Report
Last period
Item Capita Capital Capital Capital Capital
Prefer Perpe
Other
l stock red tual stock stock stock stock
s
stock debts
I. Balance at the 1,698, 1,237,9 242,3 3,204,8
26,309,
end of the last 245,0 56,472. 53,63 64,404.
287.00
year 11.00 37 4.55 92
Plus:
adjustments for
changes in
accounting
policies
Correction of
accounting
errors in prior
periods
Others
II. Balance at 1,698, 1,237,9 242,3 3,204,8
26,309,
the beginning of 245,0 56,472. 53,63 64,404.
287.00
the year 11.00 37 4.55 92
III.
Increases/decrea -154, -154,16
ses in the current 165,0 5,043.4
period (“-” for 43.45 5
decreases)
(I) Total -52,2
-52,270
comprehensive 70,34
,342.79
income 2.79
(II) Capital
contributed or
reduced by
owners
1. Common
shares
contributed by
owners
2. Capital
contributed by
holders of other
equity
211
Sino Great Wall Co., Ltd. 2018 Annual Report
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others
-101, -101,89
(III) Profit
894,7 4,700.6
distribution
00.66 6
1. Withdrawal of
surplus reserves
2. Profits
-101, -101,89
distributed to
894,7 4,700.6
owners (or
00.66 6
shareholders)
3. Others
(IV) Internal
carry-forward of
owners’ equity
1. Conversion of
capital reserves
into paid-in
capital (or
capital stock)
2. Conversion of
surplus reserves
into paid-in
capital (or
capital stock)
3. Surplus
reserves
offsetting losses
4.
Carried-forward
retained
earnings of
changes in
defined benefit
plan
5. Others
212
Sino Great Wall Co., Ltd. 2018 Annual Report
(V) Special
reserve
1. Amount
withdrawn in the
current period
2. Amount used
in the current
period
(VI) Others
IV. Balance at 1,698, 1,237,9 88,18 3,050,6
26,309,
the end of the 245,0 56,472. 8,591. 99,361.
287.00
current period 11.00 37 10 47
III. Basic Information of the Company
Sino Great Wall Co., Ltd. (hereinafter referred to as "Company” or the "Company”) is a limited
liability company restructured by Shenzhen Victor Onward Textile Printing Co., Ltd. and altered its name
to Shenzhen Victor Onward Textile Industrial Co., Ltd. upon the approval of the People's Government of
Shenzhen Municipality on November 19, 1991. The Company’s enterprise uniform social credit code:
91440300618801483A. It was listed on the Shenzhen Stock Exchange in 1992.
On July 23, 2015, the Chinese Securities Regulatory Commission approved the “Approval on
Shenzhen Victor Onward Textile Industrial Co., Ltd.’s Material Assets Reorganization, Issuance of Stock
Shares to Chen Lve and Others, Asset Purchase, and Raising of Supporting Fund” ([2015] No. 1774). The
company issued 251,849,593 shares to 17 shareholders of Sino Great Wall Co., Ltd. including Chen Lve
to purchase a 100% stake in Sino Great Wall International Engineering Co., Ltd. Meanwhile, it also
issued 25,914,633 shares in a non-public manner to the 17 shareholders and raised a total of RMB
254,999,988.72.
On July 29, 2015, the listed company received the total newly added capital of RMB 251,849,593
contributed by all shareholders of Sino Great Wall Co., Ltd. On July 30, 2015, Ruihua Certified Public
Accountants (Special General Partnership) verified the numbers and issued the “Capital Verification
Report” (Ruihua Yanzi [2015] No. 48250011). After the change, the registered capital became RMB
420,991,949 with capital stock of RMB 420,991,949. On December 4, 2015, the company changed its
name to Sino Great Wall Co., Ltd.
On May 6, 2016, the general meeting of stockholders reviewed and approved the 2015 plan of
converting capital reserve into share capital. The specific plan was: Based on the total capital stock of
446,906,582 shares issued as of December 31, 2015, all shareholders would receive 28 shares for every
10 shares, with the total amount of converted capital stock reaching 1,251,338,429 shares. After the
transfer, the total capital stock would be increased to 1,698,245,011 shares. As of December 31 2016, the
Company’s total capital stock was 1,698,245,011 shares, of which 1,434,441,780 were outstanding A
shares, and 263,803,231 were outstanding B shares. Chen Lve held 582,944,556 A shares, accounting for
34.33% of the total. He was the controlling shareholder and actual controller of the Company.
The industries involved are the architectural decoration industry and other construction industries. As
of December 31, 2018, the Company has issued capital stock of RMB 169,824,500 shares in total with
the registered capital of RMB 169,824,500; the registration address is located at No. 26, Kuipeng Road,
213
Sino Great Wall Co., Ltd. 2018 Annual Report
Baishigang, Kuichong Subdistrict, Dapeng New District, Shenzhen City and the headquarter address is:
Sino Great Wall Tower, No. 3, Jinxiu Road, Beijing Economic-Technological Development Area.
The operating activities of the Company include: production and operation of textile goods and the
needed raw materials, accessories, mechanical equipment, clothes of various face fabrics and provision of
relevant services (excluding those products managed by the current license, performing as per the license
if there is one). 70% of the products are for export. A branch has set up in Shanghai. Supplemented
operating activities: engaging in businesses of quota-free license management, acquisition and export of
non-monopolized commodity. The actual controller of the Company is Chen Lve. The financial
statements have been reported on April 26, 2018 after the approval of all directors (board of directors) of
the Company.
For the subsidiaries of the Company that were included in the combination scope in 2018, please
refer to “Note VIII. Equity in Other Subjects”. For details of the changes in the combination scope of the
Company for the current year, please refer to “Note VII. Change of Combination Scope”.
IV. Basis for Preparation of Financial Statements
1. Basis of Preparation
The Company has prepared financial statements based on sustained operation as basis, according to
the transactions and matters having occurred actually, and in accordance with the Accounting Standards
for Business Enterprises – Basic Rules (Issued by the Order No. 33 of the Ministry of Finance, amended
in accordance with the Order No. 76 of the Ministry of Finance), the 42 detailed accounting rules,
Guidelines for Application of Accounting Standards for Business Enterprises, Interpretation of
Accounting Standards for Business Enterprises and other relevant regulations issued and amended on
February 15, 2006 and afterwards (hereinafter jointly referred to as “Accounting Standards for Business
Enterprises”), as well as the disclosure provisions of the Preparation Rules for Information Disclosure by
Companies Offering Securities to the Public No.15 – General Provisions on Financial Report (Amended
in 2014) issued by China Securities Regulatory Commission.
According to the relevant provisions of the Accounting Standards for Business Enterprises, the
accounting of the Company is based on the accrual basis. Except for certain financial instruments, the
measurement of the financial statements is based on historical cost. If the asset is impaired, the
corresponding provision for impairment will be made in accordance with relevant regulations.
2. Sustained Operation
The Company had the ability of sustained operation within 12 months since the end of the reporting
period, and did not have significant matters affecting its sustained operation.
V. Important Accounting Policies and Accounting Estimates
Whether the Company is subject to special industrial requirements for disclosure
Yes
Civil engineering construction
Specific accounting policies and accounting estimates remind:
The major business of the company is the civil engineering construction industry, which is subject to the special
214
Sino Great Wall Co., Ltd. 2018 Annual Report
industrial requirements for disclosure.
1. Statement on Observing Accounting Standards for Business Enterprises
The financial statements prepared by the Company meet the requirements of Accounting Standards
for Business Enterprises, and reflect the Company’s financial standing as of December 31, 2018 and its
operating results, cash flow, and other relevant information in 2018 authentically and completely. In
addition, all material aspects of the financial statements of the Company are in line with the disclosure
provisions regarding financial statements and notes stipulated in the Preparation Rules for Information
Disclosure by Companies Offering Securities to the Public No.15 – General Provisions on Financial
Report (Amended in 2014) issued by China Securities Regulatory Commission.
2. Fiscal Period
From Jan. 1 to Dec. 31 in the Gregorian calendar is one fiscal year.
3. Business Cycle
The Company takes 12 months as a business cycle and uses it as a standard for the liquidity of assets and liabilities.
4. Recording Currency
The Company adopts RMB as recording currency.
5. Method for Accounting Treatment of Business Combination under and Not under the Same Control
Business combination under the same control: The assets and liabilities obtained by the Company from business combination are
measured as per the book value of the combined party’s assets and liabilities (including the goodwill formed from the final controller’s
acquisition of the combined party) on the date of combination in the final controller’s consolidated financial statements. For the balance
between the book value of net assets obtained from the combination and the book value of combination consideration paid (or the total book
value of shares issued), the capital stock premium in capital reserve will be adjusted; and if the capital stock premium in the capital reserve is
insufficient to write down, the retained earnings will be adjusted.
Business combination not under the same control: The assets paid as consideration for business combination and the liabilities incurred
or undertaken by the Company on the date of purchasing will be measured as per fair value, and the balance between the fair value and its
book value will be recorded in the gain or loss of the current period. The Company confirms the balance that the “combination cost” is bigger
than “the fair value shares of the purchased party’s distinguishable net assets obtained from the combination” as goodwill; and records after
checking the balance that the “combination cost” is smaller than “the fair value shares of the purchased party’s distinguishable net assets
obtained from the combination” in the gain or loss of the current period.
The intermediary expenses incurred for business combination, like audit, legal service, appraisal and consulting, etc., and other directly
related expenses will be recorded in the gain or loss of the current period when incurred; the transaction expenses of equity securities issued
for business combination will be used to write down the equity.
6. Method for Preparation of Consolidated Financial Statements
(1) Principles for determining the scope of consolidated financial statements
215
Sino Great Wall Co., Ltd. 2018 Annual Report
The consolidation scope of the Company’s consolidated financial statements is determined based on control. Control means that the
Company has the power to the investee, enjoys variable returns by participating in the relevant activities of the investee, and has the ability to
use the power over the investee to affect the amount of the returns. The scope of consolidation includes the Company and all subsidiaries.
Subsidiaries refer to the entities controlled by the Company.
The company will conduct a reassessment once the relevant facts and circumstances have changed and the relevant elements involved in
the above definition of control have changed.
(2) Method for Preparation of Consolidated Financial Statements
The Company prepares consolidated financial statements based on itself and each subsidiary’s financial statements, and according to
other relevant materials. For preparing consolidated financial statements, the Company deems the whole enterprise group as an accounting
subject, and reflects the enterprise group’s overall financial standing, operating results and cash flow according to the confirmation,
measuring and presentation requirements of relevant enterprise accounting standards, and according to uniform accounting policies.
The accounting policies and accounting period of all the subsidiaries incorporated into the consolidation scope of consolidated financial
statements are consistent with those adopted by the Company. If the accounting policies and accounting period adopted by the subsidiaries
are inconsistent with those adopted by the Company, then when consolidated financial statements are prepared, necessary adjustments will
be made according to the Company’s accounting policies and accounting period. For the subsidiaries obtained through business combination
not under the same control, their financial statements will be adjusted based on the fair value of distinguishable net assets on the date of
purchasing. For subsidiaries obtained through business combination under the same control, their financial statements will be adjusted based
on the book value of their assets and liabilities (including the goodwill formed from the final controller’s acquisition of the subsidiaries) in
the final controller’s financial statements.
The shares belonging to minor shareholders of subsidiaries’ owners’ equity, net gain or loss of current period, and composite benefits of
current period will be listed independently under the owners' equity in consolidated balance sheet, the net profit and total composite benefit
in consolidated profit statement respectively. The balance formed from that “the loss of current period shared by subsidiaries’ minor
shareholders” exceeds “the shares shared by the minor shareholders in the subsidiaries’ owners’ equity at the beginning of period” will be
used to write down minor shareholders’ equity.
① Increase of subsidiaries or businesses
In the reporting period, if subsidiaries or businesses are increased for business combination under the same control, the opening amount
in the consolidated balance sheet will be adjusted; the income, expense, and profit of the subsidiaries or businesses from the beginning of the
very period of combination to the end of the reporting period will be incorporated into the consolidated profit statement; the cash flow of the
subsidiaries or businesses from the beginning of the very period of combination to the end of the reporting period will be incorporated into
the consolidated cash flow statement, and meanwhile, relevant items in comparative statements will be adjusted, and the report subjects after
combination will be deemed as having always existed from the time point when the final controller starts the control.
If it’s available to impose control on invested parties under the same control for reason of additional investment, etc., each party
participating in the combination will be deemed to exist and make adjustments according to present state when the final controller starts the
control. The equity investments held before obtaining the right to control the combined parties, relevant gain or loss already confirmed from
216
Sino Great Wall Co., Ltd. 2018 Annual Report
“the date when original equity is obtained and the date when the combining party and the combined party are under the same control,
whichever is later” to the date of combination, other composite benefits, and the changes of other net assets will be used to write down the
opening retained benefit of the period of comparative statement or the gain or loss of the current period respectively.
In the reporting period, if subsidiaries or businesses are increased for business combination not under the same control, the opening
amount of consolidated balance sheet will not be adjusted; the income, expense and profit of the subsidiaries or businesses from the date of
purchasing to the end of reporting period will be incorporated into the profit statement respectively; and the cash flow of the subsidiaries or
businesses from the date of purchasing to the end of reporting period will be incorporated into the cash flow statement.
If it is available to impose control on the invested parties not under the same control for reason of additional investment, etc., then the
purchased parties’ stock equity held before the date of purchasing will be re-measured by the Company as per the fair value of the stock
equity on the date of purchasing, and the balance between the fair value and its book value will be recorded in the investment yield of the
current period. If the purchased parties’ equity held before the date of purchasing involves other composite benefits under accounting with
equity method, as well as changes of other owners’ equity except for net gain or loss, other composite benefit and profit distribution, then
relevant other composite benefit and changes of other owner’s equity will be converted into the investment yield in the very period to which
the date of purchasing belongs, excluding the other composite benefits arising from the changes of the net liabilities or net assets of benefit
plan measured and set up over again by the invested parties.
② Disposal of Subsidiaries or Businesses
In the reporting period, if the Company disposes some subsidiaries or businesses, then the income, expense and profit of such
subsidiaries or businesses from the beginning of the period to the date of disposal will be incorporated into the consolidated profit statement;
the cash flow of the subsidiaries or businesses from the beginning of period to the date of disposal will be incorporated into cash flow
statement.
If the Company loses the right to control invested parties for disposal of partial equity investments or other reasons,
the remained equity investments after disposal will be re-measured by the Company as per their fair value on the date
when the control right is lost. The balance of “the sum of the consideration obtained from disposal of equity and the fair
value of the remained stock equity” minus “the sum of the net asset shares enjoyed in original subsidiaries and calculated
continuously from the date of purchasing or date of combination according to original shareholding proportion and the
goodwill” will be recorded in the investment yield of the very period when control right is lost. Other composite benefits
related to original subsidiaries’ equity investments, or the changes of other owners’ equity except for other composite
benefits and profit distribution, will be converted into the investment yield of the very period when the control right is
lost, excluding the other composite benefits arising from the changes of the net liabilities or net assets of benefit plan
measured and set up over again by the invested parties.
In case of any declination on the shareholding proportion of the Company and herein losing the control rights over
its subsidiary arising from the capital increase contributed by other investors, it shall conduct accounting treatment in the
light of the aforesaid principles.
If the Company disposes the equity investments in subsidiaries by steps through multiple transactions until losing
the right to control the subsidiaries, and if the clauses, terms and economic influences of various transactions for
217
Sino Great Wall Co., Ltd. 2018 Annual Report
disposing the equity investments in the subsidiaries meet one or several of the following circumstances, such multiple
transactions will generally be subject to accounting treatment as package transaction:
a. These transactions are concluded simultaneously or in condition of considering mutual influences;
b. Only the entirety of these transactions could achieve a complete business result;
c. The occurrence of a transaction depends on the occurrence of at least one of the other transactions;
d. A transaction is not economical independently, but economical if considered together with other
transactions.
If various transactions of disposing the equity investments in subsidiaries until losing the control right belong to
package transaction, the Company will execute accounting treatment of various transactions as a transaction of disposing
subsidiaries until losing control right; but the balance between the price of every disposal before losing control right and
the subsidiaries’ net asset shares enjoyed and corresponding to the investments disposed will be confirmed as other
composite benefits in the consolidated financial statements, and transferred into the gain or loss of the very period when
the control right is lost.
If various transactions of disposing the equity investments in subsidiaries until losing the control right do not belong
to package transaction, then before losing control right, the Company will execute accounting treatment according to
relevant policies about partial disposal of equity investments in subsidiaries in condition of not losing control right; if
control right is lost, the accounting treatment will be carried out according to general method for treatment of
subsidiaries.
For the balance between “the long-term equity investments newly obtained from purchasing of minor stock equity”
and “the net asset shares to be enjoyed in the subsidiaries according to newly increased shareholding proportion and
calculated continuously from the date of purchasing (or the date of combination)”, the capital stock premium in the
capital reserve in the consolidated balance sheet will be adjusted; if the capital stock premium in the capital reserve is not
sufficient to write down, the retained benefit will be adjusted.
For the balance between “the disposal price obtained from disposal of partial long-term equity investments in subsidiaries in
condition of not losing control right” and “the net asset shares to be enjoyed in the subsidiaries, corresponding to the disposal of long-term
equity investments, and calculated continuously from the date of purchasing or the date of combination”, the capital stock premium in the
capital reserve in the consolidated balance sheet will be adjusted; if the capital stock premium in the capital reserve is not sufficient to write
down, the retained benefit will be adjusted.
7. Classification of Joint Venture Arrangements and Accounting Method of Joint Operations
A joint arrangement is an arrangement of which two or more parties have joint control. The
Company classifies joint venture arrangements into joint operations and joint ventures in line with the
rights and obligations in joint venture arrangements. A joint operation refers to a joint arrangement
whereby the Company has rights to the assets, and obligations for the liabilities, relating to the
arrangement. A joint venture refers to a joint arrangement whereby the Company has rights to the net
assets of the arrangement.
The Company adopts equity method for accounting of investments in joint ventures in line with the
accounting policy described in Note IV. 13, “Long-term Equity Investments Subject to Accounting with
218
Sino Great Wall Co., Ltd. 2018 Annual Report
Equity Method”.
As a joint operator, the Company recognizes in relation to its interest in a joint operation: its assets,
including its share of any assets held jointly, and its liabilities, including its share of any liabilities
incurred jointly; its revenue from the sale of its share of the output of the joint operation; its share of the
revenue from the sale of the output by the joint operation; and its expenses, including its share of any
expenses incurred jointly.
When the Company, as a joint operator, invests in or sells assets to a joint operation (such assets do
not constitute businesses, the same below), or purchases assets from the joint operation, the Company
only recognizes the portion of the profits and losses arising from such transactions that is attributable to
other participants in the joint operation before such assets are sold to third parties. If such assets are
subject to asset impairment losses stipulated in the Accounting Standards for Business Enterprises No.8
of Asset Impairment, etc., in case that the Company invests in or sells assets to the joint operation, the
Company will fully recognize such losses incurred thereof; in case that the Company purchases assets
from the joint operation, the Company will recognize its share of such losses incurred thereof.
8. Standard for Determination of Cash and Cash Equivalents
When compiling the cash flow statement, the Company's cash on hand and the deposit, which can be
used to make payment at any time, should be confirmed as the cash. The investment, having four features
of short duration (expired within three months from the acquisition date), strong mobility, being easy to
be changed into known cash, low value change risk at the same time, should be confirmed as the cash
equivalent.
9. Foreign-Currency Businesses and Conversion of Foreign-Currency Statements
Foreign-Currency Businesses
Foreign-currency businesses are converted into RMB for book-keeping with the approximate
exchange rate of the spot exchange rate on transaction date as the exchange rate for conversion. The
balance of foreign-currency monetary items on the date of balance sheet will be converted with the spot
exchange rate on the date of balance sheet, and the balance of exchange arising from hereof will be
recorded in the gain or loss of the current period, except for that the balance of exchange arising from
special foreign-currency loan related to the purchasing and construction of assets meeting capitalization
conditions is treated in line with the principle for capitalization of borrowing costs.
Conversion of Foreign-Currency Statements
The asset and liability items in the balance sheet will be converted with the spot exchange rate on the
date of balance sheet; for the owner’s equity, except for “undistributed profit”, all the other items will be
converted with the spot exchange rate when they are incurred. The revenue item and the expense item in
the Profit Statement are converted with the approximate exchange rate of the spot exchange rate on
transaction date.
For disposal of foreign business operation, the balance from conversion of foreign-currency financial
statements related to such foreign operation shall be transferred from owner’s equity to the gain or loss of
the very period of disposal.
219
Sino Great Wall Co., Ltd. 2018 Annual Report
10. Financial Instruments
Financial instruments include financial assets, financial liabilities and equity instruments.
(1) Classification of Financial Instruments
When initially confirmed, financial assets and financial liabilities are classified into: Financial assets
or financial liabilities measured with fair value and having the change of fair value recorded in the gain or
loss of current period, including tradable financial assets or financial liabilities, and financial assets or
financial liabilities directly specified to measure with fair value and having the change of fair value
recorded in the gain or loss of the current period; held-to-maturity investments; accounts receivable;
available-for-sale financial assets; and other financial liabilities, etc.
(2) Confirmation Basis and Measuring Method of Financial Instruments
①Financial assets (financial liabilities) measured with fair value and having the change of fair value
recorded in the gain or loss of current period
When they are obtained, fair value (after deduction of cash dividends already declared but not paid yet, or
bond interests with interest payment period expired but having not been acquired) will be taken as initial
confirmed amount, and relevant transaction expenses will be recorded in the gain or loss of the current
period.
During the holding period, the interests or cash dividends obtained will be confirmed as investment
yield, and at the end of period, the change of fair value will be recorded in the gain or loss of the current
period.
During disposal, the balance between the fair value and initial amount entered into account will be
confirmed as investment yield, and meanwhile, the gain or loss on change of fair value will be adjusted.
② Held-to-maturity investments
When they are obtained, the sum of fair value (after deduction of bond interests with interest
payment period expired but having not been acquired) and relevant transaction expanses will be taken as
initial confirmed amount.
During the holding period, interest income will be calculated and confirmed as per amortized cost
and actual interest rate, and recorded in investment yield. The actual interest rate will be determined when
being obtained, and maintained unchanged during the predicted survival period or applicable shorter
period.
During disposal, the balance between the acquisition price and the book value of such investment
will be recorded in investment yield.
③ Accounts receivable
For the creditor’s rights receivable formed from the Company’s sale of goods or rendering of labor
services, and the other enterprises’ creditor’s rights held by the Company and excluding the debt
instruments having an offer in active market, including accounts receivable and other accounts receivable,
etc., the contract or agreement price receivable from purchasers will be taken as the initially confirmed
amount; if the receivables have financing nature, they will be initially confirmed as per their present
value.
In case of recovery or disposal, the balance between the acquisition price and the book value of
accounts receivable will be recorded in the gain or loss of the current period.
④ Available-for-sale financial assets
When they are acquired, the sum of fair value (after deduction of cash dividends already declared but
not paid yet, or bond interests with interest payment period expired but having not been acquired) and
relevant transaction expenses will be taken as initially confirmed amount.
220
Sino Great Wall Co., Ltd. 2018 Annual Report
During the holding period, the interests or cash dividends obtained will be confirmed as investment
yield. At the end of period, they will be measured as per fair value, and the change of fair value will be
recorded in other composite benefit. However, the equity instrument investments which have no offer in
active market and of which the fair value cannot be reliably measured, and the derived financial assets
which are linked with the equity instruments and settled through delivery of the equity instruments will be
measured as per cost.
During disposal, the balance between the acquisition price and the book value of financial assets will
be recorded in the gain or loss of investment; meanwhile, the amount of corresponding disposal part and
originally recorded in the accumulative amount of change in the fair value of other composite benefit
directly will be recorded in the gain or loss of the current period.
⑤ Other financial liabilities
The sum of their fair value and relevant transaction expenses will be taken as initially confirmed
amount. The amortized cost will be adopted for follow-up measurement.
(3) Confirmation Basis and Measurement Method of Financial Assets Transferred
If the Company transfers financial assets, and transfers nearly all risks and rewards on the ownership
of such financial assets to the transfer-in party, the Company will terminate the confirmation of the
financial assets; if the Company reserves nearly all risks and rewards on the ownership of the financial
assets, the Company will not terminate the confirmation of such financial assets.
When judging whether the transfer of financial assets meets the above-mentioned conditions for
terminating the confirmation of financial assets, the Company will follow the “Substance Over Form”
principle. The Company distinguishes the transfer of financial assets into overall transfer and partial
transfer of financial assets. If the overall transfer of financial assets meets the conditions for termination
of confirmation, the balance of the following two amounts will be recorded in the gain or loss of the
current period:
① The book value of the financial assets transferred;
② The sum of the consideration received for the transfer and the accumulative amount of change in
the fair value originally recorded in the owner’s equity directly (involving the circumstance that the
financial assets transferred are available-for-sale financial assets);
If partial transfer of financial assets meets the conditions for termination of confirmation, the overall
book value of the financial assets transferred will be amortized between the confirmation-terminated part
and non-confirmation-terminated part as per respective relative fair value, and the balance of the
following two amounts will be recorded in the gain or loss of the current period:
① The book value of the confirmation-terminated part;
② The consideration for the confirmation-terminated part and the amount of corresponding
confirmation-terminated part in the accumulative amount of change in the fair value originally recorded
in the owner's equity directly (involving the circumstance that the financial assets transferred are
available-for-sale financial assets);
If the transfer of financial assets does not meet the conditions for termination of confirmation, the
financial assets will be confirmed continuously, and the consideration received will be confirmed as a
financial liability.
(4) Conditions for Terminating the Confirmation of Financial Liabilities
If the current obligation of financial liabilities is rescinded completely or partially, the confirmation
of such financial liabilities or part of them will be terminated; if the Company signs an agreement with
creditors to replace the existing financial liabilities by means of undertaking new financial liabilities, and
the contract clauses for new financial liabilities are substantially different from the contract clauses for
221
Sino Great Wall Co., Ltd. 2018 Annual Report
existing financial liabilities, the confirmation of the existing financial liabilities will be terminated, and
new financial liabilities will be confirmed at the same time.
If all or partial contract clauses for existing financial liabilities are amended substantially, the
confirmation of the existing financial liabilities or part of them will be terminated, and meanwhile, the
financial liabilities after amendment of clauses will be confirmed as a new financial liability.
If the confirmation of financial liabilities is terminated completely or partially, the balance between
the book value of the financial liabilities of which the confirmation is terminated and the consideration
paid (including non-cash assets transferred out or the new financial liabilities undertaken) will be
recorded in the gain or loss of the current period.
If the Company buys back partial financial liabilities, then on the date of buyback, the Company will
distribute the overall book value of the financial assets according to the relative fair value of the part
confirmed continuously and the confirmation-terminated part. The balance between the book value
distributed to the confirmation and the consideration paid (including non-cash assets transferred out or the
new financial liabilities undertaken) will be recorded in the gain or loss of the current period.
(5) Method for Determining the Fair Value of Financial Assets and Financial Liabilities
For financial instruments having an active market, their fair value will be determined as per the offer
in the active market. For financial instruments not having an active market, their value will be determined
by estimation technique. In case of estimation, the Company will adopt estimation techniques which are
applicable under present circumstances and supported by sufficient available data and other information,
select input values consistent with the asset or liability characteristics considered by market participants
in the transactions of relevant assets or liabilities, and preferentially use relevant observable input values.
Non-observable input values will be used only under the circumstance that relevant observable input
values cannot be obtained or such values obtained are not practicable.
(6) Method for Testing and Accounting Treatment of Depreciation of Financial Assets (Excluding
Accounts Receivable)
Except for the financial assets measured with fair value and having the change of fair value recorded
in the gain or loss of the current period, the Company checks the book value of financial assets on the
date of balance sheet. If some objective evidence proves that some financial asset depreciates, the
Company will withdraw depreciation reserve for this financial asset.
① Depreciation reserve of available-for-sale financial assets:
If the fair value of available-for-sale financial assets drops severely at the end of period, or such
trend of drop is predicted to be non-temporary after comprehensively considering various relevant factors,
the Company will confirm that the available-for-sale financial assets depreciate, will transfer out the
accumulative losses arising from the drop of fair value originally recorded in the owner’s equity directly,
and confirm the impairment loss.
For available-for-sale debt instruments with impairment loss confirmed, if in a later fiscal period, the
fair value rises and the rise is objectively related to the matters occurring after confirmation of original
impairment loss, then the originally confirmed impairment loss will be transferred back and recorded in
the gain or loss of the current period.
The impairment loss on available-for-sale equity instrument investments will not be transferred back
through gain or loss.
② Impairment reserve for held-to-maturity investments:
Held-to-maturity investments
222
Sino Great Wall Co., Ltd. 2018 Annual Report
11. Notes Receivable and Accounts Receivable
(1) Accounts Receivable with Significant Single Amount and Having Bad Debt Reserve Withdrawn
Independently:
Judgment basis or amount standard of significant single The Company recognizes accounts receivable for a single
amount project with the balance ≥ RMB 10 million and other accounts
receivable from a single relevant unit with the balance ≥ RMB
2 million as accounts receivable with significant single
amount.
Method for withdrawal of bad debt reserve with significant The Company will carry out impairment test independently for
single amount and withdrawn independently: accounts receivable with significant single amount. If such
accounts receivable are proved impairing through the test, the
Company will determine the impairment loss and withdraw
bad debt reserve according to the balance that the present value
of its future cash flow is lower than its book value. The
accounts receivable not impairing as proved in single test, will,
together with the accounts receivable with insignificant single
amount, be divided into many portfolios according to similar
credit risk characteristics. Then according to certain proportion
of the balance on the date of balance sheet of the portfolios of
these accounts receivable, the Company will calculate and
determine impairment loss and withdraw bad debt reserve.
(2) Accounts Receivable with Bad Debt Reserve Withdrawn as per the Portfolios Classified Based on Credit Risk
Characteristics:
Portfolio name Method for withdrawal of bad debt reserve
Account aging portfolio Account age analysis method
Combination of affiliated parties within the range of
consolidation
Those with bad debt reserve withdrawn by means of account analysis in the portfolios:
√ Apply □ Not Apply
Account age Withdrawal rate of accounts receivable Withdrawal rate of other receivables
Within 1 year (inclusive) 5.00% 5.00%
1-2 years 10.00% 10.00%
2-3 years 30.00% 30.00%
3-4 years 50.00% 50.00%
4-5 years 80.00% 80.00%
More than 5 years 100.00% 100.00%
Those with bad debt reserve withdrawn by means of percentage of total accounts receivable outstanding:
223
Sino Great Wall Co., Ltd. 2018 Annual Report
√ Apply □ Not Apply
Those with bad debt reserve withdrawn by other means:
√ Apply □ Not Apply
(3) Accounts Receivable with Insignificant Single Amount but Having Bad Debt Reserve Withdrawn Separately:
The Company needs to comply with disclosure requirements of the Guidelines No.7 of the Shenzhen Stock Exchange on Industry
Information Disclosure — Civil Engineering of Listed Companies.
Reasons for independent withdrawal of bad debt reserve On the date of balance sheet, for the other accounts receivable
with insignificant single amount and having obvious sign of
impairment, the Company will determine impairment loss and
withdraw bad debt reserve according to the balance that the
present value of their future cash flow is lower than their book
value.
Method for withdrawal of bad debt reserve On the date of balance sheet, the Company will execute
impairment test of the accounts receivable with insignificant
single amount but having bad debt reserve withdrawn
separately. If such accounts receivable are proved impairing
during the test, the Company will determine impairment loss
and withdraw bad debt reserve according to the balance that
the present value of their future cash flow is lower than their
book value.
12. Inventories
Whether the Company needs to comply with disclosure requirements of special industries
Yes
Civil Engineering
(1) Classification of Inventories
Inventories mainly include raw materials, engineering construction, merchandise inventory,
work-in-process, low value consumables, etc.
(2) Method for Pricing of Inventories Delivered
During the delivery of inventory, it is priced in terms of the method of weighted mean.
(3) Basis for Determining the Net Realizable Value of Different Types of Inventories
For commodity stocks directly for sale, such as finished products, merchandise inventory, and
materials for sale, etc., their net realizable value is confirmed during normal production and operation as
per the amount after deduction of estimated selling expenses and relevant taxes from the estimated sales
price of such inventories; for material stocks needing processing, their net realizable value will be
determined during normal production and operation as per the amount after deduction of costs estimated
to incur until completion of work, estimated selling expenses and relevant taxes from the estimated sales
price of finished products; for the inventories held for executing sales contract or labor service contract,
their net realizable value will be calculated on the basis of contract price. If the quantity of inventories
held is more than the quantity ordered under sales contract, the net realizable value of the excessive
inventory will be calculated based on general sales price.
224
Sino Great Wall Co., Ltd. 2018 Annual Report
At the end of period, inventory depreciation reserve is withdrawn as per single inventory item;
however, for plentiful inventories of relatively low unit price, inventory depreciation reserve will be
withdrawn by the type of inventory; for inventories related to the product series produced and sold in a
same region, having the same or similar final use or objective, and difficult to measure by separating from
other items, inventory depreciation reserve will be withdrawn in a consolidated way. Except for that some
conclusive evidence proves abnormality of market price on the date of balance sheet, the net realizable
value of inventory items will be determined based on the market price on the date of balance sheet.
The net realizable value of inventory items at the end of this period will be determined based on the
market price on the date of balance sheet.
(4) Perpetual inventory taking system is adopted for inventory taking system.
(5) Method for Amortization of Low-Value Easily-Consumed Articles and Packing
One-off writing-off method is adopted for low-value easily-consumed articles; one-off writing-off
method is adopted for packing.
13. Assets Held for Sale
The Company classifies the non-current assets or disposal group meeting the following conditions as
assets held for sale:
(1) Based on the practice of selling such assets or disposal groups in similar transactions, they can be
sold immediately under current conditions;
The sale is very likely to happen, that is, the Company has already made a resolution on a sales plan
and obtained an assuring purchase commitment and it is expected that the sale will be completed within
one year. Where regulations require the approval of relevant power organ or regulatory department of the
Company before they can be sold, the approval has been obtained.
14. Long-term Equity Investments
(1) Standards for Judgment of Common Control and Significant Influences
Common control indicates the jointly-owned control on some arrangement as per relevant provisions,
and relevant activities of such arrangement must be unanimously agreed by the participants sharing the
control right before being decided. If the Company and other joint operators impose common control on
invested units and have the right to the invested units’ net assets, the invested units will be the Company’s
joint ventures.
Significant influences indicate having the right to participate in making decisions on an enterprise’s
financial affairs and business operation, but could not control or jointly control together with other parties
the making of these policies. If the Company could impose significant influences on invested units, the
invested units will be the Company’s associates.
(2) Determination of Initial Investment Cost
① Long-term Equity Investments Formed from Business Combination
Business combination under the same control: If the Company pays combination consideration by
paying cash, transferring non-cash assets or undertaking debts and issuing equity securities, the Company
will take the book value shares of the combined party’s owners’ equity obtained on the date of
combination in the final controller’s consolidated financial statements as the initial investment cost of
long-term equity investments. If the Company could impose control on invested units under the same
control for reason of additional investment, etc., the Company will confirm on the date of combination the
225
Sino Great Wall Co., Ltd. 2018 Annual Report
initial investment cost of long-term equity investments as per the book value shares of the combined
party’s net assets to be enjoyed in the final controller’s consolidated financial statements after
combination. For the balance between “the initial investment cost of long-term equity investments on the
date of combination” and “the sum of the book value of long-term equity investments before combination
and the book value of newly paid consideration for further obtaining shares on the date of combination”,
the Company will adjust the capital stock premium; and if the capital stock premium is not enough to
write down, the Company will write down the retained benefits.
Business combination not under the same control: The Company takes the combination cost
determined on the date of purchasing as the initial investment cost of long-term equity investments. If the
Company could impose control on invested units not under the same control for reason of additional
investment, etc., the Company will take the sum of the book value of originally held equity investments
and the newly increased investment cost as the initial investment cost of long-term equity investments
which are subject to accounting with cost method instead.
② Long-term Equity Investments Obtained by Other Means
For long-term equity investments obtained by means of payment in cash, the purchasing price
actually paid will be taken as initial investment cost.
For long-term equity investments obtained by issuing equity securities, the fair value of the equity
securities issued will be taken as initial investment cost.
In the precondition that non-monetary asset exchange has business nature, and the fair value of
exchanged-in or exchanged-out assets could be measured reliably, the fair value of exchanged-out assets
and relevant expenses payable will be determined as the initial investment cost of the long-term equity
investments obtained from non-monetary assets exchange, unless some conclusive evidence proves that
the fair value of exchanged-in assets is more reliable; for non-monetary assets exchange not meeting the
above-mentioned precondition, the book value of exchanged-out assets and relevant taxes payable shall
be taken as the initial investment cost of exchanged-in long-term equity investments.
For long-term equity investments obtained through debt reorganization, their initial investment cost
will be determined based on fair value.
(3) Follow-up Measurement and Gain or Loss Confirmation Method
① Long-term Equity Investments Subject to Accounting with Cost Method
The Company adopts cost method for accounting of long-term equity investments in subsidiaries.
Except for the cash dividends or profits included in the price or consideration actually paid when
investments are obtained, and already announced but not paid, the Company confirms the investment
yield of the very period according to the cash dividends or profits enjoyed by the Company and declared
to grant by invested units.
② Long-term Equity Investments Subject to Accounting with Equity Method
The Company adopts equity method for accounting of long-term equity investments in associates
and joint ventures. For the balance that the initial investment cost is bigger than the fair value shares of
invested units’ distinguished net assets which shall be enjoyed by the Company, the Company will not
adjust the initial investment cost of long-term equity investments; for the balance that the initial
investment cost is smaller than the fair value shares of invested units’ distinguished net assets which shall
be enjoyed by the Company, the Company will adjust the book value of long-term equity investments and
record it in owner’s equity.
When confirming the shares of invested units’ net gain or loss to be enjoyed, the Company will
adjust and confirm the invested units’ net profit based on the fair value of the invested units’
distinguishable net assets when investments are obtained, and according to the Company’s accounting
226
Sino Great Wall Co., Ltd. 2018 Annual Report
policies and fiscal period. If the invested units prepare consolidated financial statements during the
holding of investments, the accounting will be conducted based on the amount attributing to the invested
units in the net profit in the consolidated financial statements, other composite benefits, and changes of
other owner’s equity.
For the gain or loss on the non-realized internal transactions between the Company and jointly-run
enterprises/ joint ventures, the part attributing to the Company will be calculated as per the proportion to
be enjoyed, will be written down, and on this basis, the investment yield will be confirmed. The gain or
loss on non-realized internal transactions done with invested units will be fully confirmed if belonging to
asset impairment loss. During the period of holding investment, as for the invested entity preparing
consolidated financial statements, carry out accounting based on the invested entity’s attributable amount
of the net profit, other comprehensive income and other changes in equity in the consolidated financial
statements.
The unrealized gains or losses on internal transaction occurring among the company, associates and
joint ventures will confirm the investment income on the basis of offsetting the company’s attributable
part calculated according to the entitlement proportion. The unrealized losses on internal transaction
occurring in the invested entity belonging to assets impairment loss will be confirmed in full amount. If
the assets of investment or asset-sale transactions occurring among the company, associates and joint
ventures constitute the business, the accounting treatment shall be carried out according to the related
policies disclosed in “IV. (4) Method for Accounting Treatment of Business Combination under and Not
under the Same Control” and “IV. (5) Method for Preparation of Consolidated Financial Statements”.
When the Company determines to share the losses of the invested entity, it will be treated in the
order as follows: firstly, the book value of long-term equity investments will be offset. Secondly, if the
book value of the long-term equity investment is not sufficient to be offset, the recognition of losses of
the investment will be continued to the extent of the book value of other long-term rights and interests
which substantially form the net investment made to the invested entity, and the book value of long-term
accounts receivable will be offset. Finally, after the above-mentioned treatment, if the Company still
undertakes extra obligations according to the provisions of investment contract or agreement, the
Company will confirm accrued liabilities with obligations predicted to undertake, and record them in the
investment loss of the current period.
③ Disposal of Long-Term Equity Investments
For disposal of long-term equity investments, the balance between their book value and actual
acquisition price will be recorded in the gain or loss of the current period.
For long-term equity investments with equity method adopted for accounting, when such
investments are disposed, the part originally recorded in other composite benefits will be subject to
accounting treatment according to corresponding proportion and on the same basis adopted by invested
units to directly dispose relevant assets or liabilities. The owner’s equity confirmed for change of other
owner’s equity except for net gain or loss, other composite benefit and profit distribution of invested units
will be carried forward into the gain or loss of the current period, excluding the other composite benefits
arising from the change of net liabilities or net assets of invested units’ new measurement and setting of
benefit plan.
If the Company loses common control or significant influences on invested units for reason of
disposal of partial equity investments, etc., the remained equity after disposal will be subject to
accounting according to the standards for the confirmation and measurement of financial instruments, and
the balance between the fair value and book value of such remained equity investments on the date when
the Company losing common control or significant influences will be recorded in the gain or loss of the
227
Sino Great Wall Co., Ltd. 2018 Annual Report
current period. Other composite benefits confirmed for accounting with equity method of original equity
investments will be subject to accounting treatment with the same basis adopted by invested units to
directly dispose relevant assets or liabilities when the accounting with equity method is terminated. The
owner’s equity confirmed for change of other owner’s equity except for invested parties’ net gain or loss,
other composite benefit and profit distribution will be totally transferred in the gain or loss of the current
period when the accounting with equity method is terminated.
In case the control right on the invested unit is deprived due to disposal of part of equity investment,
increase of investment by other investment parties on subsidiaries causing decrease of holding proportion
of the company, when preparing certain financial statement, the residual equity shall be checked by equity
method if having common control or major effect on invested unit, and adjusted as the residual equity is
checked by the equity method from being obtained; If the remaining equity cannot exert joint control or
significant influence on the invested unit, it shall take accounting treatment according to the relevant
provisions of financial tools and measurement rules, and the difference between the fair value and book
value on the date of losing control shall be included in the current profits and losses.
If the equity disposed is obtained from business combination for reason of additional investment,
and when individual financial statements are prepared,
cost method or equity method is adopted for accounting of the remained equity after disposal, the
other composite benefits and other owner’s equity confirmed for accounting with equity method of the
equity investments held before the date of purchasing will be carried forward by proportion; if the
remained equity after disposal is subject to accounting treatment according to the standards for
confirmation and measurement of financial instruments, the other composite benefits and other owner’s
equity will be carried forward completely.
15. Investment Real Estate
Investment real estate measurement model
Costing accounting
Method of depreciation or amortization
The company's investment real estate includes the land use right held and prepared to transfer after
increment, the buildings already leased (including the buildings used for leasing after completion of
self-construction or development activities, and buildings in construction or development and to be used
for leasing in future).
The Company adopts cost mode to measure the existing investment real estates. For investment real
estate measured with cost mode – the buildings used for leasing, the Company will adopt the depreciation
policy, which is the same for fixed assets, and for the land use right for leasing, the Company will adopt
the amortization policy which is the same for intangible assets.
16. Fixed Assets
1. Fixed asset recognition conditions
Fixed assets indicate the tangible assets held for producing goods, rendering labor services, leasing or operation management, and having a
service life of more than one fiscal year. No fixed asset may be recognized unless it simultaneously meets the conditions as follows:
(1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise;
(2) The cost of the fixed asset can be measured reliably.
228
Sino Great Wall Co., Ltd. 2018 Annual Report
2. Depreciation method for various fixed assets
Depreciation life Annual depreciation
Type Depreciation method Salvage rate (%)
(Year) rate (%)
House and buildings Straight-line method 20 5 4.75
Mechanical equipment Straight-line method 10 5 9.5
Transportation Straight-line method
7 5 13.57
equipment
Electronic equipment Straight-line method
3-5 5 19.00-31.67
and other equipment
3. Recognition basis and valuation method for fixed assets under financing lease
Where the leasing agreement signed between company and the lessor specifies either of the conditions as follows, the lease will be
recognized as a finance lease:
(1) The ownership of the leasing asset belongs to this company at the expiration of the lease;
(2) Company has the option to buy the asset at a price to be far lower than the fair value of the asset at the date when the option becomes
exercisable;
(3) The lease term covers the major part of the use life of the leased asset;
(4) The present value of the minimum lease payments on the lease beginning date does not have too large differences with the fair value of
the asset.
On the starting date of the Company’s leasing, the fair value of leased assets and the present value of the minimum rent payment, whichever
is lower, will be taken as the entry value of leased-in assets, and the minimum rent payment will be taken as the entry value of long-term
accounts payable, and the balance will be taken as non-confirmed financing cost.
17. Construction in Progress
Whether the company is required to comply with special industry disclosure requirements
Yes
Civil Engineering Construction
For construction in progress, the necessary expenditure incurred for making the constructed assets reach
the predetermined usable state will be taken as the entry value of the fixed assets. If the constructed fixed
assets have reached the predetermined usable state, but the completion settlement has not been handled,
then since the date when such assets reach the predetermined usable state, the Company will transfer such
assets into fixed assets as per estimated value and based on engineering budget, construction cost, or
actual cost of engineering, etc., and will withdraw fixed asset depreciation according to the Company’s
policy for fixed asset depreciation; after handling of completion settlement, the Company will adjust
original temporarily estimated value as per actual cost, but will not adjust originally withdrawn
depreciation amount.
229
Sino Great Wall Co., Ltd. 2018 Annual Report
18. Borrowing Costs
Borrowing costs include loan interest, discount or premium amortized, auxiliary expense, and
exchange balance arising from foreign-currency loan, etc.
1. Principle for Confirmation of Borrowing Cost Capitalization
The Company’s borrowing costs, if available to directly attribute to the construction or production of
assets meeting capitalization conditions, will be capitalized and recorded in the cost of relevant assets;
and other borrowing costs will be confirmed as expenses and recorded in the gain or loss of current period
as per their amount incurred when they are incurred.
Assets meeting capitalization conditions indicate the fixed assets which need to experience quite a
long term of construction or production activities before reaching the predetermined usable or salable
state, as well as investment real estates and inventories, etc.
Borrowing costs will be capitalized if simultaneously meeting the following conditions:
(1) Asset expenditure has occurred, including the payment in cash for purchasing and construction
or production of assets meeting capitalization conditions, transfer of non-cash assets, or undertaking of
interest-bearing debts;
(2) Borrowing costs have occurred;
(3) The purchasing and construction or production activities necessary for making assets reach
predetermined usable or salable state have started.
2. Period for capitalization of borrowing costs
Capitalization period indicates the period of from the time point when capitalization of borrowing
costs starts to the time point when capitalization stops, excluding the period when the capitalization of
borrowing costs is suspended.
If the assets purchased and constructed or produced and meeting capitalization conditions reach the
predetermined usable or salable state, the capitalization of borrowing costs will stop.
If some items of the assets purchased and constructed or produced and meeting capitalization
conditions are completed separately and could be used independently, the capitalization of borrowing
costs for such assets will stop.
If each part of the assets purchased and constructed or produced is completed respectively, but
cannot be used or sold until the whole assets are completed, the capitalization of borrowing costs may be
stopped when the assets are totally completed.
3. Period for suspension of capitalization
If the assets meeting capitalization conditions are broken abnormally during purchasing and
construction or production process, and the suspension lasts for more than 3 months successively, the
capitalization of borrowing costs will be suspended; if such suspension is a necessary procedure for
making the assets purchased and constructed or produced and meeting capitalization conditions reach the
predetermined usable state or salable state, the capitalization of borrowing costs will continue. The
borrowing costs occurring during suspension period will be confirmed as gain or loss in the current period,
and the capitalization of borrowing costs will continue after the construction and purchasing or
production activities of such assets restart.
4. Method for calculation of borrowing costs capitalization rate and capitalized amount
For the special loan obtained for purchasing and construction or production of assets meeting
capitalization conditions, the capitalized amount of borrowing costs will be determined as per the amount
after “the borrowing costs actually incurred in the very period of special loan” minus “the interest income
obtained from bank deposit or the investment yield obtained from temporary investment of the non-used
230
Sino Great Wall Co., Ltd. 2018 Annual Report
loan fund”.
For general loans occupied for purchasing and construction or production of assets meeting
capitalization conditions, the borrowing costs amount to be capitalized of general loans shall be calculated
and determined as per the “weighted mean of asset expenditure that accumulative asset expenditure
exceeds the special loan” multiplied by the capitalization rate of general loan. The capitalization rate is
generally calculated and determined as per the weighted mean interest rate of general loan.
19、Biological Assets
20、Oil and Gas Assets
21. Intangible assets
Intangible assets refer to identifiable non-monetary assets without physical form owned or controlled
by the Company. The intangible assets of the Company mainly include land use right and software
royalty.
1. Pricing Method of Intangible Assets
The Company initially measures the intangible assets as per the cost when they are acquired.
The cost of purchased intangible assets includes purchasing price, relevant taxes, and other
expenditures directly for making the assets reach the predetermined use. If the price for purchasing
intangible assets is delayed in payment by exceeding normal credit conditions, and the intangible assets
have financing nature substantially, the cost of intangible assets will be determined based on the present
value of purchasing price.
As for the intangible assets obtained from debt reorganization and used by debtors for repaying debts,
their entry value will be determined based on the fair value of such intangible assets, and the balance
between the book value of reorganized debts and the fair value of the intangible assets used for repaying
debts will be recorded in the gain or loss of the current period.
In the precondition that non-monetary asset exchange has the essence of commerce, and the fair
value of exchanged-in or exchanged-out assets could be measured reliably, the entry value of the
intangible assets obtained from non-monetary asset exchange will be determined based on the fair value
of exchanged-out assets, unless conclusive evidence proves that the fair value of exchanged-in assets is
more reliable; for the non-monetary asset exchange not meeting the above-mentioned precondition, the
book value of exchanged-out assets and relevant taxes payable will be taken as the cost of exchanged-in
intangible assets, and the gain or loss won’t be confirmed.
The Company analyzes and judges the service life of intangible assets when obtaining them.
Intangible assets with limited service life are amortized with straight-line method within the period
when they bring about economic benefits for the enterprise; if it’s impossible to predict the period when
the intangible assets could bring about economic benefits to the enterprise, the intangible assets will be
231
Sino Great Wall Co., Ltd. 2018 Annual Report
deemed to have uncertain service life, and won’t be amortized.
2. Estimate on the service life of intangible assets with limited service life:
Items Service life Amortization method
Software royalty 5 years Straight-line method
Land use right 50 years Straight-line method
At the end of every year, the Company checks the service life and amortization method of the
intangible assets with limited service life. As checked, the service life and amortization method of
intangible assets at the end of this year were not different from previous estimates.
3. Concrete Standard for Division of Research Stage and Development Stage
The Company’s expenditure for internal research and development projects is divided into the
expenditure at research stage and expenditure at development stage.
Research stage: The stage of unique and planned investigation and research activities conducted for
obtaining and understanding new scientific or technological knowledge.
Development stage: The stage of applying research findings or other knowledge to some plan or
design, in order to produce new or substantially improved materials, devices and products, etc. before
commercial production or use.
4. Concrete Conditions for Capitalization of Expenditure at Development Stage
The expenditure at development stage of internal research and development projects will be
confirmed as intangible assets when simultaneously meeting the following conditions:
(1) It is technically feasible to complete the intangible assets and make them available for use or
sale;
(2) The Company has the intent to complete, use or sell the intangible assets;
(3) The way by which intangible assets produce economic benefit could prove the usability of such
intangible assets, including proving that the products produced with such intangible assets have markets,
or such intangible assets have markets, and intangible assets would be used internally;
(4) The Company has sufficient technical, financial resources and other resources to support the
completion of the development of such intangible assets, and the Company has the ability to use or sell
such intangible assets.
(5) The expenditure attributing to the development stage of such intangible assets could be measured
reliably.
22. Long-term Asset Impairment
If there is any sign of impairment in long-term equity investments, investment real estates measured
by the cost model, fixed assets, construction in progress, intangible assets with finite service life and other
232
Sino Great Wall Co., Ltd. 2018 Annual Report
long-term assets at the balance sheet date, an impairment test will be made. If the result of impairment
test proves that the recoverable amount of assets is lower than their book value, the depreciation reserve
will be withdrawn as per their balance and recorded in the impairment loss. The recoverable amount
indicates the net amount after the fair value of assets minus the disposal expenses, and the present value
of predicted future cash flow of the assets, whichever is higher. Asset depreciation reserve is calculated
and confirmed based on single assets. If it is difficult to estimate the recoverable amount of single assets,
the recoverable amount of asset portfolio will be determined as per the asset portfolio to which the assets
belong. Asset portfolio indicates the minimum asset group which could independently produce cash
inflows.
Goodwill will be subject to impairment test at least at the end of every year.
The Company carries out impairment test of goodwill, and amortizes the book value of the goodwill
formed from business combination to relevant asset group by reasonable means since the date of
purchasing; if it is difficult to amortize the book value to relevant asset group, the Company will amortize
it to relevant asset group, the Company will amortize it to relevant asset group portfolio. When the book
value of goodwill is amortized to relevant asset group or asset group portfolio, the Company will execute
amortization as per the proportion of the fair value of each asset group or asset group portfolio to the total
fair value of relevant asset group or asset group portfolio. If it is difficult to measure the fair value reliably,
the Company will execute amortization as per the proportion of the book value of each asset group or
asset group portfolio to the total book value of relevant asset group or asset group portfolio.
When impairment test is carried out for relevant asset groups or asset group portfolios including
goodwill, if the asset groups or asset group portfolios relevant to goodwill have the sign of impairment,
the Company will carry out impairment test of the asset group or asset group portfolio excluding goodwill,
calculate recoverable amount, compare it with relevant book value, and confirm corresponding
impairment loss. And then conduct impairment test on asset groups or asset group combination with
goodwill, compare book values of relevant asset groups or asset group combination (including the book
value of amortized goodwill) with recoverable amounts, if the recoverable amounts of relevant asset
groups or asset group combination are lower than their book values, the impairment loss of goodwill will
be recognized. Once any loss of asset impairment is recognized, it shall not be turned back in the future
accounting period.
23. Long-term Deferred Expenses
Long-term deferred expenses indicate various expenses having been incurred, to be shared in present
period and later periods, and having an amortization period of more than one year.
(1) Amortization Method
Long-term deferred expenses will be averagely amortized within the benefit period;
(2) Amortization Life
It shall be determined as agreed in contracts or during the expected benefit period.
24. Employee Compensation
1. Accounting Method of Short-Term Remuneration
During the fiscal period when employees provide services for the Company, the Company confirms
the short-term remuneration incurred actually as liabilities, and records them in the gain or loss of the
233
Sino Great Wall Co., Ltd. 2018 Annual Report
current period or the cost of relevant assets.
For the social insurance premiums and housing fund paid by the Company for employees, the trade
union outlay and employee education outlay withdrawn as per regulations, the Company calculates and
determines corresponding amount of employees’ remuneration as per the withdrawal basis and
withdrawal proportion regulated during the fiscal period when employees provide services for the
Company.
If employees’ welfare expense is non-monetary welfare and could be measured reliably, they will be
measured as per fair value.
2. Accounting Method of Post-Demission Welfare
Defined contribution plans
As for the basic pension insurance and unemployment insurance paid by the Company for
employees according to relevant provisions of local government, the amount payable will be calculated as
per the base amount and proportion of payment regulated by local place and recorded in the gain or loss
of the current period or the cost of relevant assets during the fiscal period when the employees provide
services for the Company.
3. Accounting Method of Dismissal Welfare
If being unavailable to unilaterally revoke the dismissal welfare provided for rescission of labor
relationship plan or staff cut-down suggestions, or when confirming the costs or expenses related to
reorganization involving the payment of dismiss welfare (whichever is earlier), the Company will confirm
the employee compensation liabilities arising from dismiss welfare, and record them in the gain or loss of
the current period.
4. Accounting Method of Other Long-term Welfares
Other long-term welfares provided by the company to employees in accordance with the defined contribution plans shall be subject to
accounting treatment in accordance with the defined contribution plans; otherwise shall be subject to accounting treatment in accordance
with the defined benefit plan.
25. Accrued Liabilities
1. Standard for Confirmation of Accrued Liabilities
If the obligations related to the contingencies like lawsuits, debt guarantees, loss contracts,
reorganization matters, etc. simultaneously meet the following conditions, the Company will confirm
such obligations as accrued liabilities:
(1) The obligations are current obligation undertaken by the Company;
(2) The implementation of such obligations will probably induce that economic benefits flow out of
the Company;
(3) The amount of such obligations could be measured reliably.
2. Measures for Measurement of Various Accrued Liabilities
234
Sino Great Wall Co., Ltd. 2018 Annual Report
The Company initially measures the accrued liabilities as per the optimum estimated amount of
expenditures necessary for implementation of relevant current obligations.
When determining the optimum estimated amount, the Company comprehensively considers the
risks related to contingencies, uncertainty, time value of money, and other factors. If the time value of
money has significant influences, the optimum estimated amount will be determined after discounting
with relevant future cash outflow.
The optimum estimated amount is treated by the following circumstances respectively:
If the expenditure needed has a continuous scope (or range), and the possibility for various results to
occur is the same within this scope, then the optimum estimated amount will be determined as per the
middle value of this scope, namely the average of the upper-limit and lower-limit amounts.
If the expenditure needed does not have a continuous scope (or range), or there is a continuous scope,
but the possibility for various results to occur within this scope is not the same, for example,
contingencies involve single item, the optimum estimated amount will be determined as per the amount
which will occur most possibly; if contingencies involve multiple items, the optimum estimated amount
will be calculated and determined as per various possible results and relevant probability.
If the Company’s expenditure needed for discharging accrued liabilities is predicted to compensate
by third parties fully or partially, then the compensation amount will be confirmed independently as assets
when being ascertained basically available to receive, and the compensation amount confirmed won’t be
more than the book value of the accrued liabilities.
26. Share-Based Payment
The share-based payment of the Company refers to the transaction through granting equity
instruments or undertaking equity-instrument-based liabilities to obtain the services provided by
employees [or other parties]. The Company’s share-based payment is divided into the share-based
payment settled with equity and the share-based payment settled in cash.
1. Share-based payment settled with equity and equity instruments
The share-based payment settled with equity, if used to exchange for employees’ services, will be
measured with the fair value of the equity instruments granted to employees. If the Company makes
share-based payment with restricted shares, then the shares subscribed with investment by employees
shall not be circulated in the market or transferred before meeting unlocking conditions and being
unlocked; if the unlocking conditions regulated in the final Stock Incentive Plan are not satisfied, the
Company will buy back shares at the predetermined price. When obtaining the money paid by employees
for subscribing restricted shares, the Company will confirm capital stock and capital reserve (capital stock
premium) as per the stock subscription money obtained, and meanwhile, will confirm a liability and
inventory stock as per the full amount of buyback obligation. On every date of balance sheet within the
waiting period, the Company will make the optimum estimate on the quantity of exercised equity
instruments according to follow-up information such as the latest acquired change in the number of
right-exercising employees, whether meeting regulated performance conditions, etc., on this basis, and
according to the fair value on the date of granted, the Company will record the services obtained in the
very period in relevant cost or expense, and increase capital reserve correspondingly. After exercising
date, the Company will not adjust the total amount of relevant confirmed cost or expense and owner’s
equity. However, it’s available to exercise rights immediately after being granted, it will be recorded in
relevant cost or expense as per fair value on the date of granted, and capital reserve will be increased
correspondingly.
235
Sino Great Wall Co., Ltd. 2018 Annual Report
For the share-based payment not exercised finally, the Company will not confirm cost or expense,
unless the exercise conditions are market conditions or non-excisable conditions. No matter whether
market conditions or non-excisable conditions are satisfied, if only non-market conditions among
excisable conditions are satisfied, it will be deemed as excisable. If the clauses of share-based payment
settled with equity are amended, the services obtained will be confirmed at least according to the clauses
before amendment. In addition, any amendment increasing the fair value of equity instruments granted, or
alterations beneficial for employees on the date of amendment will be confirmed as increase of services
obtained.
If share-based payment settled with equity is cancelled, the Company will treat it as accelerated
exercise on the date of cancellation, and confirm the non-confirmed amount immediately. If employees or
other parties could choose to meet non-exercisable conditions, but do not meet such conditions within
waiting period, the Company will treat this as cancelation of share-based payment settled with equity.
However, if new equity instruments are granted, and the new equity instruments granted are recognized to
replace the cancelled equity instruments on the granted date of the new equity instruments, the granted
alternative equity instruments will be treated by the means the same as those for amending the terms and
conditions for treatment of original equity instruments.
27. Other financial instruments such as preferred stocks and perpetual bonds, etc.
28. Income
Should the company comply with the disclosure requirements of specific industries?
Yes.
Civil engineering construction industry
The company shall comply with the disclosure requirements of "the Guidelines No.7 of the Shenzhen Stock Exchange on Industry
Information Disclosure—Listed Companies Engaging in the Civil Engineering Construction Business".
1. General principles for recognition of revenue from sales of goods:
(1) The significant risk and the rewards of the goods ownership has been transferred to the Buyer by the Company.
(2) The Company neither reserves the continuous management right which is generally associated with ownership nor carries out
effective control of sold commodities.
(3) Related income amount can be measured in a reliable way;
(4) The relevant economic benefits may flow into the Company;
(5) Relevant costs occurred or to be occurred can be measured in a reliable way.
2. Specific principles
(1) Service revenue
The service revenue provided by the Company mainly refers to the revenue of engineering design. In case that the results from
provision of labor transactions can be estimated reliably, the revenue shall be recognized as per the important milestones specified by the
design contract. Namely, the revenue is recognized as per the percentage of the workload of important milestones of the completed design in
the total design workload and the expected recoverable contract amount.
If the result of providing service transaction cannot be estimated in a reliable way, the service revenue shall be determined according
to the service costs which has generated and expected to be compensated. The existing service costs are calculated as the period charges.
When it is not probable that the costs incurred will be recovered, revenue is not recognized.
Provided that sales of commodity and provision of labor can be distinguished and separately measured in the contract or agreement
236
Sino Great Wall Co., Ltd. 2018 Annual Report
signed by the Company with other enterprises, sales of commodity and provision of labor shall be separately disposed. Provided that sales of
commodity and provision of labor cannot be distinguished, or can be distinguished but cannot be separately measured, the entire contract
shall be disposed as sales of commodity.
(2) Income from construction contracts
Under the circumstance that the outcome of a construction contract can be estimated in a reliable way, the contract revenue and the
contract costs shall be recognized in light of the percentage-of-completion method on the date of the balance sheet. The percentage of
completion is determined in the proportion of the accumulated actual contract costs among the estimated total contract costs.
If the outcome of a contraction contract cannot be estimated in a reliable way, but the contract costs can be recovered, the contract
revenue shall be recognized in accordance with the recoverable actual contract costs and the contract costs shall be recognized as contract
expenses in the current period they are incurred; if the contract costs cannot be recovered, they shall be recognized as contract expenses
immediately when they are incurred and no contract revenue shall be recognized. If uncertainties, due to which the outcome of a construction
contract cannot be measured in a reliable way, have passed out of existence, the revenues and expenses pertinent to the construction contract
shall be determined in the percentage-of-completion method.
If the estimated total contract costs exceed the total contract revenue, the estimated loss is recognized as the expenses for the period.
The cost and the gross profit (loss) accumulatively incurred and recognized of a construction-in-progress contract and the settled price
are presented in the balance sheet with a net amount after offset. The part of the sum of the cost and the gross profit (loss) accumulatively
incurred from a construction-in-progress contract exceeding over the settled contract price is presented as inventory; and the part of the
settled contract price exceeding over the cost and the gross profit (loss) accumulatively incurred from a construction-in-progress is presented
as advance payment.
(3) Recognized income of hospital business
The income of hospital mainly comes from the outpatient and inpatient departments, and the income recognition is done at the time of
patient’s settlement.
For the outpatient income, as the patients turning to the outpatient treatment do not need the inpatient treatment generally, the
treatment duration is short, the settlement is made with the hospital at the end of the treatment and treatment and medicine expense is paid.
Financially, such outpatient income shall be recognized at the day of receipt.
For the inpatient income, as the patient needs to be treated in the hospital for a certain period and a part of the medical expense shall
be prepaid when be admitted to hospital, the inpatient income shall not be recognized at this moment. When discharging from the hospital,
the patient will settle the medical expense for the hospitalization and the hospital will issue the invoice to the patient. In such case, the
income from the inpatient is recognized financially.
29. Governmental subsidy
A government subsidy means the monetary or non-monetary assets obtained free by this company
from the government. Government subsidies consist of the government subsidies pertinent to assets and
government subsidies pertinent to income.
The assets-related government subsidy refers to government subsidies that are obtained by the
Company used for purchase or construction, or forming the long-term assets by other ways. Government
subsidies pertinent to income refer to the governmental subsidies except governmental subsidies pertinent
to assets.
(1) The judgment basis and accounting treatment method of assets-related government subsidy
1. Recognition time
In case the governmental subsidies are monetary assets, it shall be calculated according to the
received amount or the receivable amount. If a governmental subsidy is a nonmonetary asset, it shall be
measured at its fair value or at its nominal amount in case that the fair value cannot be reliably obtained.
The governmental subsidies calculated according to nominal amount shall be directly included in the
237
Sino Great Wall Co., Ltd. 2018 Annual Report
current profits and losses.
2. Accounting treatment
Governmental subsidy related to assets will be used to write down the book value of relevant assets
or be confirmed as deferred income. If being confirmed as deferred income, the governmental subsidy
will be recorded in the gain or loss of the current period within the service life of relevant assets with
reasonable and systematic methods (if being related to the Company’s daily activities, the governmental
subsidy will be recorded in other benefits; if not, they will be recorded in non-operating income).
(1) The judgment basis and accounting method of income-related government subsidy
The income-related government subsidy, if being used to compensate the Company’s relevant cost
expenses or losses in later period, will be confirmed as deferred income, and be recorded in the gain or
loss of the current period (if being related to the Company’s daily activities, the governmental subsidy
will be recorded in other benefits; if not, they will be recorded in non-operating income) or be used to
write down relevant cost expenses or losses during the period of confirmation on relevant cost expenses
or losses; if being used to compensate the Company’s relevant cost expenses or losses already incurred,
the governmental subsidy will be directly recorded in the gain or loss of the current period (if being
related to the Company’s daily activities, the governmental subsidy will be recorded in other benefits; if
not, they will be recorded in non-operating income) or be used to write down relevant cost expenses or
losses.
30. Deferred Income Tax Assets/Deferred Income Tax Liabilities
For deductible temporary difference, deferred income tax assets will be confirmed within the limit of
the taxable income which will probably be obtained in future period and be used to offset deductible
temporary difference. As for deductible losses and taxes rebate which could be carried forward to later
years, corresponding deferred income tax assets will be confirmed within the limit of the future taxable
income which will probably be obtained to offset deductible losses and taxes.
For taxable temporary difference, deferred income tax liabilities will be confirmed except for under
special circumstances.
The special circumstances under which deferred income tax assets or deferred income tax liabilities
are not confirmed include: the initial confirmation of goodwill; other transactions or matters (except for
business combination) of which the occurrence won’t affect accounting profit or taxable income (or
deductible loss).
If the Company has statutory right to settle with net amount, and has the intention to settle or obtain
assets with net amount, and the discharge of debts is conducted simultaneously, the income tax assets of
the current period and the income tax liabilities of the current period will be presented with the net
amount after offsetting.
If the Company has the statutory right to settle the income tax assets of the current period and the
income tax liabilities of the current period with net amount, and the deferred income tax assets and
deferred income tax liabilities are related to the income tax levied by a same tax administration
department from a same tax payment subject, or are related to different tax payment subjects, but in every
important period when deferred income tax assets and liabilities are transferred back in future, if the tax
payment subjects involved intend to settle the income tax assets and liabilities of the very period with net
amount or to obtain assets and discharge liabilities simultaneously, deferred income tax assets and
deferred income tax liabilities will be presented with the net amount after offsetting.
238
Sino Great Wall Co., Ltd. 2018 Annual Report
Leasing
1. Accounting treatment method for operating lease
(1) The rent paid by the Company for rented assets will be amortized with straight-line method
within the whole lease term including the rent-free period, and recorded in the expense of the current
period. The initial direct expenses paid by the Company and related to leasing transaction will be
recorded in the expense of the current period.
If the asset lessor undertakes the lease-related expenses which shall be assumed by the Company, the
Company shall deduct such expenses from the total rent, amortize the remained rent within the lease term,
and record it in the expense of the very period.
(2) The rent collected by the Company for leasing out assets will be amortized with straight-line
method within the whole lease term including the rent-free period, and confirmed as lease-related income.
The initial direct expenses paid by the Company and related to leasing transaction will be recorded in the
expense of the very period; if the amount is relatively big, the amount will be capitalized, and will be
recorded in the income of the very period by installments within the whole lease term on the basis same
as that for confirmation of lease-related income.
If the Company undertakes lease-related expenses which shall be undertaken by the lessee, the
Company will deduct such expenses from the total amount of rent income, and distributed the remained
rent expense within the lease term.
2. Accounting treatment method for finance lease
(1) Assets rented through finance lease: On the date when the renting starts, the Company takes the
fair value of rented assets and the present value of minimum rent payment, whichever is lower, as the
entry value of rented assets, takes the minimum rent payment as the entry value of long-term accounts
payable, and takes the balance as non-confirmed financing expense. The Company adopts actual interest
rate method to amortize the non-confirmed financing expenses within the asset lease term, and records
them in financial expenses. The Company records the initial direct expenses incurred in the value of
rented assets.
(2) Assets leased out through finance lease: On the date when leasing starts, the Company confirms
the balance between “the sum of finance lease account receivable and non-guaranteed balance” and their
present value as non-realized financing income, and confirms it as lease income within each future period
when rents are received. The Company records the initial direct expenses related to leasing transaction in
the initial measured amount of finance lease account receivable, and reduces the income amount
confirmed within the lease term.
32． Other Important Accounting Policies and Accounting Estimates
1. Important Accounting Judgment and Estimates
When applying accounting policies, the Company needs to make judgment, estimation and assumption of the book
value of the statement items that cannot be accounted accurately due to the uncertainty of business activities. Based on
the past experience of the company's management and other relevant factors, these judgments, estimates, and
assumptions will impact the disclosure of reported amount of income, expenses, assets, and liabilities and the contingent
liabilities on the balance sheet date. However, there may exists differences between the actual results caused by the
uncertainty of these estimates and the current estimates of the company's management, which may lead to a significant
239
Sino Great Wall Co., Ltd. 2018 Annual Report
adjustment of the book amount of the affected assets or liabilities in the future.
The Company will regularly review the above-mentioned judgments, estimates and assumptions on the basis of
continuing operations. In case the changes of accounting estimates only impact the period of change, the impacted
number shall be confirmed in the period of change; in case the changes impact both the period of change and the future,
the impacted number shall be confirmed in the period of change and the future.
On the date of balance sheet, the Company shall judge, estimate and assume the amount of the financial statement
items in the following important areas.
(1) Accrued liabilities
The Company shall estimate and judge the possibility that the accrued liabilities may lead to the current obligations
undertaken by the Company based on available evidence. If the management consider that there is such a possibility, and
they are able to make a reliable estimation of the expenditures required, then the Company will recognize the best
estimated amount of the expenditure required to fulfill the current obligations of the estimated liabilities as the accrued
liabilities. Changes in these estimates may result in significant adjustments of accrued liabilities.
(2) Withdrawal of the bad debt reserves
The Company will use allowance method to account the loss of bad debt in accordance with the accounting policy
of receivables. The impairment of receivables is based on the recoverability of estimated receivables. The appraisal of
impairment of receivables requires the judgment and estimate of the management. The difference between the actual
result and the original estimate will affect the book value of the receivables and the withdrawal or transferal of the bad
debt reserve of the receivables during the period when the estimate is changed.
(3) Inventory depreciation reserve
In accordance with the inventory accounting policy, the Company will account based on the lower one of the cost
and net realizable value. For the inventory with a cost higher than that of the net realizable value and the outdated
inventory, it will withdraw the inventory depreciation reserve. The impairment of inventory to net realizable value is
based on the marketability and the net realizable value of estimated inventory. The appraisal of inventory impairment
requires the management to make judgment and estimate on the basis of obtaining solid evidence and taking into account
the purpose of holding inventory and the impact of matters after the balance sheet date. The difference between the
actual result and the original estimate will impact the book value of inventory and the withdrawal or transferal of the
inventory depreciation reserve during the change of the estimate.
(4) Impairment of financial assets available for sale
The Company’s determination of the impairment of financial assets available for sale depends on the judgment and
assumption of the management to a large extent to determine whether the impairment loss needs to be confirmed in the
income statement. When making judgments and assumptions, the Company needs to assess the degree and duration that
the fair value of the investment is lower than the cost, as well as the financial condition and short-term business outlook
of the invested objects, including the industry situation, technological innovation, credit rating, default rate and the risk
of the peers.
(5) Long-term asset depreciation reserve
The Company shall judge the sign of possible impairment of non-current assets other than financial assets on the
balance sheet date. For intangible assets with uncertain service life, impairment test should be conducted when there are
signs of impairment except the annual impairment test. The non-current assets other than financial assets will have
impairment tests when there is sign that their book value is unrecoverable.
240
Sino Great Wall Co., Ltd. 2018 Annual Report
It indicates depreciation when the book value of asset or group of assets is higher than the recoverable amount,
which is the higher of the net amount after the fair value minus the disposal expenses and the present value of the
predicted future cash flow.
The net amount after the fair value minus the disposal expenses is confirmed as the amount after agreed sales price
of similar asset in a fair transaction or observable market price minus the incremental costs directly attributable to the
disposal of asset.
When estimating the present value of future cash flow, it is necessary to make judgments on the output, selling
price, relevant operating costs of the asset (or group of assets) and the discount rate to calculate the present value. The
Company will use all relevant material available when estimating the recoverable amount, including projections of
production, selling prices and relevant operating costs based on reasonable and supportable assumptions.
The Company shall test goodwill impairment annually, which requires estimating the present value of the future
cash flow of the asset groups or portfolio of asset groups apportioned with goodwill. When estimating the present value
of future cash flow, the Company shall estimate the cash flow generated by the future asset group or portfolios of asset
groups, and choose the appropriate discount rate to determine the present value of future cash flow.
(6) Depreciation and amortization
The Company shall withdraw depreciation and amortization according to the straight-line method within the
service life after considering the residual value of fixed assets and intangible assets. The Company shall regularly review
the service life to determine the amount of depreciation and amortization to be included in each reporting period. It shall
determine the service life based on the past experience of similar assets and expected technological updates. If there are
big changes in previous estimates, the depreciation and amortization amount will be adjusted in the future.
(7) Deferred income tax asset
The Company will confirm deferred income tax assets for all unused tax losses when it is likely to offset losses
with enough taxable profits. This requires the management of the Company to make many judgments to estimate the
time and amount of future taxable profits to determine the amount of deferred income tax assets in combination with tax
planning strategy.
(8) Income tax
There is some uncertainty in the final tax treatment and calculation of some deals in the company’s normal
business activities. Whether part of the projects can be itemized before tax need the approval of the tax department. If
there is difference between the final result confirmed of these tax matters and the original estimated amount, then the
difference will impact the income tax and deferred income tax of the final period confirmed.
2. Correction of Accounting Error
(1) Reasons and content of the correction of accounting error
① The Company confirmed the claim income of the project of Cambodia in 2017. Among it, the actual written
confirmation of the claim amount of USD 1.13 million (equivalent to RMB XX thousand yuan) by party A is
in 2018, which is intertemporal. Besides, the project and two other projects of Cambodia are being accounted.
Their revenue cost was not accounted according to the actual project progress. What should have been
accounted in 2016 was included in 2017. As a result, the operating profit of 2016 is 12 million yuan less.
② In 2016 and 2017, there were accounts opened in the name of employees used to pay the employee’s salary
and other costs. Among them, the amount in 2016 is 1.9885 million yuan and the amount in 2017 is 3.8529
million yuan. As a result, the cost in 2016 was 1.9885 million yuan less, and the cost in 2017 was RMB 3.8529
yuan less.
241
Sino Great Wall Co., Ltd. 2018 Annual Report
③ During the tax audit, it was found that the invoices of the construction cost of the Company in 2017 were
illegal, including illegal general VAT invoice, general VAT invoice of other provinces, and abnormal VAT
invoice, with a total amount of 42.9313 million yuan. As a result, the payable income tax of the Company in
2017 was 6.4397 million yuan less.
(2) Methods of correction of accounting error and its impact on financial statement
Considering that the amount of the above accounting errors is not significant, and has little impact on the
company's assets liabilities at relevant time and the profits and losses during the period, the Company will adopt the
prospective application method to correct the accounting errors. The impact on the 2018 financial statement is as
follows:
Matters Have an impact The impacted statement item Corrected amount
or not
Intertemporal claim income No
Cost paid by personal cards Yes Administration expense of 2018 +5,841,400.00
Other account payable of 2018 +5,841,400.00
Illegal cost invoice Yes Income tax of 2018 +6,439,691.12
Tax payable of 2018 +6,439,691.12
33. Correction of Important Accounting Policies and Accounting Estimates
(1) Correction of Important Accounting Policies
√ Applicable □ Not applicable
Contents of and reasons for change of Approval procedures Notes
accounting policies
According to the provisions of the Notice of the Ministry of Finance on the Revision and Issuance of
the Format of Financial Statement of General Enterprises in 2018, (CK (2018) No. 15), the format of
financial statement of general enterprises has been revised. The Company has prepared financial
statements in the reporting period in accordance with the new reporting format stipulated by the Ministry
of Finance. The specific subjects and amount affected are listed as follows:
No. Name of the affected statement item Affected
amount
Retroactive adjustment method
1 January 1, 2018 Note receivable and account receivable 5,994,876,806.96
2 January 1, 2018 Account receivable -288,201,562.88
3 January 1, 2018 Account receivable -5,706,675,244.08
4 January 1, 2018 Note receivable and account payable 2,626,177,075.77
5 January 1, 2018 Notes Payable -906,597,988.15
242
Sino Great Wall Co., Ltd. 2018 Annual Report
6 January 1, 2018 Account payable -1,719,579,087.62
7 January 1, 2018 Other account payable 16,105,263.85
(2) Change of Important Accounting Estimates
□ Applicable √ Not applicable
34. Other
VI. Taxes
1. Main Types of Taxes and Tax Rate
Taxes Taxation basis Tax rate
VAT For the taxable income, the output tax 0%、3%、6%、11%、17%
should be calculated based on relevant
tax rate, and the VAT shall be paid based
on the difference after deducting the
input tax that is allowed to be deducted
in the current period
Urban maintenance and construction tax Paid as per 7%, 5% and 1% of the 7%、5%、1%
turnover tax paid actually.
Enterprise income tax Paid as per 15% and 25% of taxable 15%、25%
income
Educational surtax Paid as per 3% of the turnover tax paid 3%
actually.
Local educational surtax Paid as per 2% of the turnover tax paid 2%
actually.
Illustration for disclosure of tax payers of different corporate income tax rate
Name of tax payers Income tax rate
Changzhi Shenzhou Laodingshan Industrial Co., Ltd. 25%
Xiangfen County Taoshan Construction Co., Ltd. 25%
Sino Great Wall (Xihua) Economic Development Zone Investment
Co., Ltd.
25%
Liupanshui Central People’s Hospital Investment Co., Ltd. 25%
Sino Zhigu Industrial (Yueyang) Co., Ltd. 25%
Sino Great Wall Guangxia (Wuhan) Medical Development Co., Ltd. 25%
Sino Great Wall Infrastructure Investment Co., Ltd. 25%
Wuhan Commercial Workers Hospital LLC 25%
243
Sino Great Wall Co., Ltd. 2018 Annual Report
Sino Great Wall Medical Investment Management Co., Ltd. 25%
Sino Great Wall International Engineering Co., Ltd. 15%
Fujian Sino Great Wall Mingyihui Medical Investment Co., Ltd. 25%
Sino Great Wall Medical Investment (Hubei) Co., Ltd. 25%
Hubei Yuanyaotong Supply Chain Co., Ltd. 25%
Sino Great Wall Medical Management (Inner Mongolia) Co., Ltd. 25%
Sino Great Wall Health Management (Jiangsu) Co., Ltd. 25%
Sino Great Wall (Beijing) Investment Fund Management Co., Ltd. 25%
Sino Great Wall New Energy (Beijing) Co., Ltd. 25%
Wu’an Juhe Photovoltaic Power Co., Ltd. 25%
Shanghai Lingrui International Trading Co., Ltd. 25%
Shenzhen Hongtulve Industrial Co., Ltd. 25%
Sino Great Wall Southwest Engineering Co., Ltd. 25%
Sino Great Wall Southwest Science and Technology Co., Ltd. 25%
Sino Great Wall Southwest Commercial and Trading Co., Ltd. 25%
Sino Great Wall Southwest Engineering Consultation Co., Ltd. 25%
Sino Great Wall Decoration and Design Co., Ltd. 25%
Suzhou Lvbang Wood Industry Technology Co., Ltd. 25%
Huichang County Zhongcheng Construction Engineering Co., Ltd. 25%
Great Wall Biaodian Energy Co., Ltd. 25%
Kunming Sino Forest Industry Development Co., Ltd. 25%
Sino Great Wall Development (Hengqin) Co., Ltd. 25%
Sino Great Wall Real Estate (Hubei) Co., Ltd. 25%
SGW America LLC 21%
Sino Great Wall Group Co., Limited 17%
Far eastern international engineering company,LLC 20%
Sino Great Wall(Philippines) International Corporation 30%
Sino Wai Man International Engineering Limited 12%
Sino Great Wall (HK) Property Co., Limited 17%
SGW HPEngineeringConstructionSDN.BHD 24%
SGW VENTURES SDN.BHD. 24%
SGW CONSTRUCTION (LANGKAWI) SDN.BHD. 24%
SINO GREAT WALL GENERAL TRADING &
15%
CONTRACTING CO.LTD
Shenzhou Changcheng（Lao）Co., Ltd 25%
244
Sino Great Wall Co., Ltd. 2018 Annual Report
Sino International Engineering (Laos) Co., Ltd. 25%
Sino Great Wall Investment (Laos) Co., Ltd. 25%
Sino Great Wall Group (UK) Co., Limited 19%
Sino Great Wall International Engineering (MM) Co., Ltd 25%
Sino Great Wall International Engineering Co., Ltd 0%
Inrich Me Engineering Co., Ltd 17%
SINO GREAT
Sino Great Wall International Engineering (Thailand) Co., Ltd. 20%
Sino Great Wall International Engineering (CNMI) Co., LLC. 21%
SINO GREAT WALL（USA）.INC 21%
PT.SINO GREAT WALL INVESTMENT INDONESIA 25%
PT.SINO GREAT WALL CONSTRUCTION INDONESIA 25%
Anshun Sino Great Wall Real Estate Development and
25%
Construction Co., Ltd.
Beijing Sino Xinda Real Estate Co., Ltd. 25%
Sino Great Wall Hebei Xiong’an Engineering Co., Ltd. 25%
Sino Great Wall Scientific and Technologic Development Co.,
25%
Ltd.
Weifang Sino Great Wall Medical care and Health Industry
25%
Co., Ltd.
Sino Great Wall (Guangzhou) Elevator Engineering Co., Ltd. 25%
Zhongda Chancheng Industrial (Chongqing) Co., Ltd. 25%
Sino Rongju Real Estate Development Co., Ltd. 25%
Chengwu County Shenguang Engineering Project
25%
Management Co., Ltd.
Sino Boda (Zhanjiang) Industrial Co., Ltd. 25%
Sino Great Wall Industrial (Chongqing) Co., Ltd. 25%
2. Tax Preferences
(1) As verified by Beijing Municipal Office, SAT in 2013 as per Tax Category Verification Notice,
the taxable income of Sino Great Wall Design shall be 10% of the total income.
(2) According to provisions in Notice of the State Administration of Taxation on Several Issues
Concerning the Administration of Collection of Income Tax of Enterprises Operating Business across
Different Regions and Paying Taxes on a Consolidated Basis (GSF (2008) No.28) on March 10, 2008, the
head office (parent company) of the operation units and the place of business, being established within
territory of China and running business across China without the legal personality (i.e. running production
and operation activity across regions) shall be deemed as the enterprise for consolidated taxation. If the
parent Company adopt the consolidated taxation method and the head office and the branches intend to
245
Sino Great Wall Co., Ltd. 2018 Annual Report
prepay the enterprise income tax by stages, 50% of such taxes shall be amortized to the branches and
prepaid, while the other 50% shall be prepaid by the head office. The amortization ratio of each branch
shall be 0.35:0.35:0.30 among the operating income, the staff salary and the total assets of each; the final
settlement of annual corporate income tax shall be made to the tax authority by the parent Company and
shall never amortized to the branches.
(3) Sino Great Wall Group Co., Limited (hereinafter referred to as “Sino Hong Kong”) and Inrich
Me Engineering Co., Ltd. (hereinafter referred to as “Inrich Me”) under the subsidiary Company of the
Company are enterprises established in the Hong Kong Special Administrative Region, which shall pay
the enterprise profit tax at the rate of 16.5%. SINO GREAT WALL INTERNATIONAL ENGINEERING
(MACAU) CO., LIMITED (hereinafter referred to as “SINO MACAU”) is an enterprise established in
the Macao Special Administrative Region, which shall pay the net profit tax and observe the progressive
tax rate.
(4) Sino Great Wall International Engineering Co., Ltd. (hereinafter referred to as the “Sino
International”), the wholly-owned subsidiary Company of the Company, was granted the Certificate of
High & New Technological Enterprise on November 24, 2015 which was jointly approved and issued by
Beijing Municipal Science & Technology Commission, Beijing Finance Bureau, Beijing Municipal
Office, SAT and Beijing Local Taxation Bureau. Sino International was identified as the high and new
technological enterprise (Certificate No.: GR201511003125; Issue date: November 24, 2015; Term of
Validity: Three Years), i.e. Sino International shall pay the enterprise income tax at the rate of 15% in
2015, 2016 and 2017, respectively.
(5) According to Notice of Ministry of Finance and State Administration of Taxation on Pilot for
Comprehensive Implementation of Business Tax Replaced by Value-added Tax (CS (2016) No.36),
Wuhan Commercial Workers Hospital LLC, the wholly-owned subsidiary Company of the Company was
entitled to the preferential policies of being exempted from VAT since May 1, 2016.
3. Other
According to provisions in the Notice of the State Administration of Taxation on the Tax Policies for Implementing across the Country
the Pilot Program of Levying Value-Added Tax in Lieu of Business Tax on the Transportation Industry and Some Modern Service Industries
(CS (2012) No.71) on July 31, 2012, the design business of Sino Great Wall Decoration and Design Co., Ltd. (hereinafter referred to as the
“Sino Great Wall Design”) under the subsidiary Company of the Company was changed to taxable item of value-added tax from the that of
the business tax with the value-added tax rate of 3% since September 1, 2012 and Sino Great Wall Design was deemed as the small-scale
taxpayer.
VII. Notes to Items in Consolidated Financial Statements
1. Monetary Resources
Unit: Yuan
Items Ending balance Opening balance
Cash on hand 3,116,229.51 4,614,087.16
246
Sino Great Wall Co., Ltd. 2018 Annual Report
Bank deposit 122,651,567.37 642,608,503.33
Other monetary resources 532,947,089.60 957,751,325.63
Total 658,714,886.48 1,604,973,916.12
Including: the total amount of overseas 51,902,846.57
funds
Other description
Items Ending balance Opening balance
Bank acceptance guarantee deposit 230,602,428.53 349,043,551.56
Guarantee bond 181,351,839.27 555,665,432.94
Fixed time deposits or call deposits used for guarantee 100,024,675.00 50,000,000.00
Overseas funds with limited remittance 873,465.90 22,098.66
Bond for wages of migrant workers 303,963.07 3,020,242.47
Freezing 19,790,717.83
Total 532,947,089.60 957,751,325.63
2. Financial assets measured with fair value and having the change of fair value recorded in the gain or loss of
the current period
Unit: Yuan
Items Ending balance Opening balance
Other description:
3. Derived financial assets
□ Applicable √ Not applicable
4. Notes Receivable and Accounts Receivable
Unit: Yuan
Items Ending balance Opening balance
Notes receivable 1,518,790.00 288,201,562.88
Accounts receivable 4,202,594,258.24 5,706,675,244.08
Total 4,204,113,048.24 5,994,876,806.96
（1）Notes Receivable
1) Classified Presentation of Notes Receivable
Unit: Yuan
247
Sino Great Wall Co., Ltd. 2018 Annual Report
Items Ending balance Opening balance
Bank acceptance 0.00 15,544,160.00
Trade acceptance 1,518,790.00 272,657,402.88
Total 1,518,790.00 288,201,562.88
2) Notes receivable pledged by the Company at the end of the period
Unit: Yuan
Items Amounts pledged at the end of the period
Bank acceptance 0.00
Trade acceptance 0.00
Total 0.00
3) Notes Receivable Already Endorsed or Discounted by the Company at the End of Period, but Not Coming Due Yet on the Date of Balance
Sheet
Unit: Yuan
Confirmation-terminated amount at the end Non-confirmation-terminated amount at
Items
of period the end of period
Bank acceptance 4,608,144.88 0.00
Trade acceptance 95,940,000.00 0.00
Total 100,548,144.88 0.00
4) Bills turned into account receivables due to the default of the drawer of the Company at the end of term
Unit: Yuan
Items End-of-period arrears among the receivables
Trade acceptance 444,932,329.41
Total 444,932,329.41
Other description
None
（2）Accounts receivable
1) Classified Disclosure of Accounts Receivable
Unit: Yuan
Ending balance Opening balance
Book balance Bad debt reserve Book balance Bad debt reserve
Type Book
Withdraw
Withdrawal Book value
Amount Proportion Amount al value Amount Proportion Amount
proportion
proportion
Accounts receivable
716,094, 286,437, 429,656,9
with significant single 13.72% 40.00%
881.32 952.53 28.79
amount and having bad
248
Sino Great Wall Co., Ltd. 2018 Annual Report
debt reserve withdrawn
independently
Accounts receivable
with bad debt reserve 6,332,9
4,503,30 730,372, 3,772,937 626,240,4 5,706,675,2
withdrawn as per the 86.28% 16.22% 15,727. 100.00% 9.89%
9,614.80 285.35 ,329.45 83.49 44.08
portfolio of credit risk 57
characteristics
6,332,9
5,219,40 1,016,81 4,202,594 626,240,4 5,706,675,2
Total 100.00% 56.22% 15,727. 100.00% 9.89%
4,496.12 0,237.88 ,258.24 83.49 44.08
57
Accounts receivable with significant single amount and having bad debt reserve withdrawn independently at the end of term:
√ Applicable □ Not applicable
Unit: Yuan
Accounts receivable (per Ending balance
unit) Accounts receivable Bad debt reserve Withdrawal proportion Reasons for withdrawal
Shutdown for the project
China Harbor
of Military Academy,
Engineering Company 716,094,881.32 286,437,952.53 40.00%
Ministry of National
Ltd.
Defense
Total 716,094,881.32 286,437,952.53 -- --
Accounts receivable with bad debt reserve withdrawn by means of account age analysis in the portfolios:
√ Applicable □ Not applicable
Unit: Yuan
Ending balance
Account age
Accounts receivable Bad debt reserve Withdrawal proportion
Within 1 year
1,435,285,534.03 71,769,102.30 5.00%
1-2 years 2,038,443,035.35 190,125,609.54 10.00%
2-3 years 555,716,897.18 166,715,069.14 30.00%
3-4 years 358,293,199.04 179,146,599.52 50.00%
4-5years 76,448,267.42 61,158,613.94 80.00%
More than 5years 64,205,580.84 64,205,580.83 100.00%
Total 4,528,392,513.86 733,120,575.26
Description about the basis for determining the portfolio:
②Situations of bad debt reserves withheld, recycled or reversed in this term
The amount of bad debt reserve withdrawn in the current period was RMB 393,318,044.30; and
the amount of bad debt reserve recovered or transferred back in the current period was RMB 0.00.
③Accounts Receivable Actually Cancelled after Verification in the Current Period: none.
④Top 5 Owning Parties Classified by Ending Balance of Accounts Receivable
249
Sino Great Wall Co., Ltd. 2018 Annual Report
The aggregate amount of the top 5 owning parties classified by ending balance of accounts
receivable was RMB 2,441,187,064.70, accounting for 46.55% of the total amount of accounts
receivable at the end of the year, and the aggregate amount of bad debt reserve ending balance
withdrawn was RMB 498,149,003.15.
Ending balance
Unit name Accounts receivable Proportion to total accounts Bad debt reserve
receivable (%)
China Harbor Engineering Company Ltd. 831,409,897.23 15.85 313,687,509.07
POWERCHINA Construction Group Ltd. 674,079,636.78 12.85 73,244,894.27
Oxley Gem (Cambodia)Co., Ltd 426,011,027.46 8.12 25,469,397.37
Henan NO.1 Thermal Power 298,264,504.82 5.69 65,526,002.54
Construction Company
Cambodia Petrochemical Co., Ltd. 211,421,998.41 4.03 20,221,199.90
Total 2,441,187,064.70 46.55 498,149,003.15
⑤Accounts receivable of which the recognition is terminated due to the transfer of financial assets:
none.
⑥Amount of assets and liabilities formed by transferring accounts receivable and continuous
involvement: none.
In the portfolio, other receivables of bad debts withdrawn with the balance percentage method:
□ Applicable √ Not applicable
In the portfolio, other receivables of bad debts withdrawn with other methods:
The company shall comply with the disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guide No. 7
－ Listed Companies Engaged in Civil Engineering Construction Business.
2) Bad Debt Reserves Withdrawn, Recovered or Transferred Back in the Current Period
The amount of bad debt reserves withdrawn in current period is RMB 393,318,044.30 and the amount of bad debt reserves recovered or
reversed in current period is RMB 0.
Important amounts of bad debt reserves recovered or reversed in current period:
Unit: Yuan
Unit name Amounts recycled or reversed Recycle Method
3) Accounts Receivable Actually Cancelled after Verification in the Current Period
Unit: Yuan
Items Amounts cancelled after verification
Important cancelation after verification of other accounts receivable:
Unit: Yuan
Procedures Whether the
Reasons for
Nature of accounts Amounts cancelled performed for payment is generated
Unit name cancelation after
receivable after verification cancelation after by related
verification
verification transaction
Note for accounts receivable cancelled after verification:
None
250
Sino Great Wall Co., Ltd. 2018 Annual Report
4) Top 5 Owing Parties Classified by the Ending Balance of Other Accounts Receivable
Ending balance
Unit name Accounts receivable Proportion to total accounts Bad debt reserve
receivable (%)
China Harbor Engineering Company Ltd. 831,409,897.23 15.85 313,687,509.07
POWERCHINA Construction Group Ltd. 674,079,636.78 12.85 73,244,894.27
Oxley Gem (Cambodia) Co., Ltd 426,011,027.46 8.12 25,469,397.37
Henan NO.1 Thermal Power 298,264,504.82 5.69 65,526,002.54
Construction Company
Cambodia Petrochemical Co., Ltd. 211,421,998.41 4.03 20,221,199.90
Total 2,441,187,064.70 46.55 498,149,003.15
5) Other accounts receivable of which the recognition is terminated due to transfer of financial assets
None
6) Amount of assets and liabilities formed through transfer of other receivables and continuous involvement
None
Other description:
5. Advance Payment
（1）Presentation of Advance Payments by Account Age
Unit: Yuan
Ending balance Opening balance
Account age
Amount Proportion Amount Proportion
Within 1 year 207,889,106.39 71.74% 212,854,246.00 94.51%
1-2 years 8,022,057.24 21.31% 11,257,454.64 5.00%
2-3 years 3,620,871.70 6.17% 903,997.25 0.40%
More than 3 years 729,583.80 0.78% 192,829.99 0.09%
Total 220,261,619.13 -- 225,208,527.88 --
Description of reasons why the advance payments of an important amount with account age more than 1 year are not settled in time:
（2）Top 5 Advance Payment Objects Classified by the Ending Balance of Advance Payments
（2）Top 5 Advance Payment Objects Classified by the Ending Balance of Advance Payments
The aggregate amount of the top 5 advance payment objects classified by the ending balance of
advance payments was RMB 85,197,913.66, accounting for 38.60% of the total amount of the ending
balance of advance payments.
Unit name Relationship Ending balance Proportion to the Advance Reasons for not
251
Sino Great Wall Co., Ltd. 2018 Annual Report
with the total ending payment time settlement
company balance of
advance
payments (%)
Jiangsu Juye Jianshe Group Co., Subcontractor 27,020,017.56 12.24 Within 2 year Advance payment for
Ltd. subcontracted project
Zhongcheng Jianye Construction Subcontractor 25,421,813.77 11.52 Within 2 year Advance payment for
Co., Ltd. subcontracted project
Shandong Zhiyuan Building Subcontractor 11,430,371.93 5.18 Within 1 year Advance payment for
Installation Engineering Co., Ltd. subcontracted project
Longyan City Hengda Subcontractor 11,552,049.40 5.23 Within 1 year Advance payment for
Engineering Co., Ltd. subcontracted project
Xi'an Bihui Road and Bridge Subcontractor 9,773,661.00 4.43 Within 1 year Advance payment for
Engineering Co., Ltd. subcontracted project
Total 85,197,913.66 38.60
?
Other description:
6. Other accounts receivable
Unit: Yuan
Items Ending balance Opening balance
Other accounts receivable 2,186,223,361.40 1,674,675,360.28
Total 2,186,223,361.40 1,674,675,360.28
（1）Interest receivable
1) Classification of interest receivable
Unit: Yuan
Items Ending balance Opening balance
2) Important overdue interest
Unit: Yuan
Whether impairment
Borrowing unit Ending balance Overdue time Overdue reason occurs and the basis for
its judgment
Other description:
（2）Dividends receivable
1) Dividends receivable
Unit: Yuan
252
Sino Great Wall Co., Ltd. 2018 Annual Report
Items (or the invested unit) Ending balance Opening balance
2) Important dividends receivable over one year of account age
Unit: Yuan
Whether impairment
Items (or the invested
Ending balance Account age Reason for not recycling occurs and the basis for
unit)
its judgment
Other description:
（3）Other accounts receivable
1) Classified Disclosure of Other Accounts Receivable
Unit: Yuan
Ending balance Opening balance
Book balance Bad debt reserve Book balance Bad debt reserve
Type Book
Withdraw
Withdrawal Book value
Amount Proportion Amount al value Amount Proportion Amount
proportion
proportion
Other accounts
receivables that are
individually significant 22,402,9 2,000,00 20,402,98
0.95% 8.93%
and for which individual 80.00 0.00 0.00
bad debt reserves are
withdrawn
Other accounts
receivable with bad debt
1,820,3
reserve withdrawn as 2,341,17 175,357, 2,165,820 145,657,4 1,674,675,3
98.92% 7.49% 32,846. 100.00% 8.07%
per the portfolio of 7,867.34 485.94 ,381.40 86.56 60.28
84
credit risk
characteristics
Other accounts
receivable with
insignificant single 2,963,00 2,963,00
0.13% 100.00%
amount and having bad 5.73 5.73
debt reserve withdrawn
separately
1,820,3
2,366,54 180,320, 2,186,223 145,657,4 1,674,675,3
Total 100.00% 32,846. 100.00%
3,853.07 491.67 ,361.40 86.56 60.28
84
Other accounts receivables that are individually significant and for which individual bad debt reserves are withdrawn at the end of the period:
√ Applicable □ Not applicable
Unit: Yuan
253
Sino Great Wall Co., Ltd. 2018 Annual Report
Ending balance
Other accounts
Other accounts
receivable (per unit) Bad debt reserve Withdrawal proportion Reasons for withdrawal
receivable
Accounting Center of
Forestry Bureau of Low likelihood of
2,000,000.00 2,000,000.00 100.00%
Yongqiao District, recycling
Suzhou City
ACURA Kliniken
Group Baden-Baden 20,402,980.00 Assets held for sale
GmbH
Total 22,402,980.00 2,000,000.00 -- --
Other accounts receivable with bad debt reserve withdrawn by means of account age analysis in the portfolios:
√ Applicable □ Not applicable
Unit: Yuan
Ending balance
Account age
Other accounts receivable Bad debt reserve Withdrawal proportion
Within 1 year
1,980,686,398.10 99,034,319.91 5.00%
1-2 years 248,752,112.99 24,875,211.30 10.00%
2-3 years 49,079,589.31 14,723,876.79 30.00%
3-4 years 48,461,428.86 24,230,714.43 50.00%
4-5 years 8,524,872.84 6,819,898.27 80.00%
More than 5 years 5,673,465.24 5,673,465.24 100.00%
Total 2,341,177,867.34 175,357,485.93
Description about the basis for determining the portfolio:
②Classified Disclosure of Other Accounts Receivable by Nature
Nature of accounts Ending book balance Book balance at the
beginning of year
Tender bond, performance bond and deposit 359,746,410.63 564,988,488.94
Pretty Cash and personal intercourse funds 400,356,527.19 45,065,829.65
Intercourse funds of the organization 1,534,777,052.09 1,191,088,012.16
Others 71,663,863.16 19,190,516.09
Total 2,366,543,853.07 1,820,332,846.84
③Bad Debt Reserves of Other Accounts Receivable Withdrawn, Recovered or Transferred Back in
the Year
The amount of bad debt reserves withdrawn in current period is RMB34,911,005.11.
④Top 5 Owing Parties Classified by the Ending Balance of Other Accounts Receivable
Unit name Nature of accounts Ending balance Account age Proportion to total ending Bad debt reserve
balance of other accounts Ending balance
254
Sino Great Wall Co., Ltd. 2018 Annual Report
receivable (%)
Longyan City Hengda Engineering Intercourse funds 335,179,148.00 Within 2 14.16 21,608,957.40
Co., Ltd. of the organization year
POWERCHINA Construction Group Intercourse funds 250,908,351.38 1-2 years 10.6 25,090,835.14
Ltd. of the organization
Yueyang Public Resource Tender bond 131,500,000.00 1-2 years 5.56 13,150,000.00
Trading Center
Hebei Xuxing Industrial Co., Ltd. Tender bond 55,000,000.00 1-2 years 2.32 5,500,000.00
China Harbor Engineering Company Intercourse funds 54,278,966.48 Within 3 2.29 6,330,428.72
Ltd. of the organization year
Total —— 826,866,465.86 —— 34.93 71,680,221.26
⑥Accounts Receivable Involving Governmental Subsidy: none.
⑦Other accounts receivable of which the recognition is terminated due to transfer of financial assets: none.
⑧Amount of assets and liabilities formed through transfer of other receivables and continuous involvement: none.
In the portfolio, other receivables of bad debts withdrawn with the balance percentage method:
□ Applicable √ Not applicable
In the portfolio, other receivables of bad debts withdrawn with other methods:
□ Applicable √ Not applicable
2) Situations of bad debt reserves withheld, reversed or recycled in this term
The amount of bad debt reserves withdrawn in current period is RMB and the amount of bad debt reserves recovered or reversed in
current period is RMB .
Important amounts of bad debt reserves recovered or reversed in current period:
Unit: Yuan
Unit name Amounts reversed or recycled Recycle method
3) Status of actual verified other receivables in current period
Unit: Yuan
Item Amounts cancelled after verification
Important cancelation after verification of other accounts receivable:
Unit: Yuan
Procedures Whether the
Reasons for
Nature of other Amounts cancelled performed for payment is generated
Unit name cancelation after
accounts receivable after verification cancelation after by related
verification
verification transactions
Notes on other accounts receivable cancelation after verification:
4) Classification of Other Accounts Receivable by Nature
Unit: Yuan
Nature of accounts Ending book balance Book balance at the beginning of year
Tender bond, performance bond and
359,746,410.63 564,988,488.94
deposit
255
Sino Great Wall Co., Ltd. 2018 Annual Report
Pretty cash and intercourse funds of
400,356,527.19 45,065,829.65
individuals
Intercourse funds of the organization 1,534,777,052.09 1,191,088,012.16
Others 71,663,863.16 19,190,516.09
Total 2,366,543,853.07 1,820,332,846.84
5) Top 5 Owing Parties Classified by the Ending Balance of Other Accounts Receivable
Unit: Yuan
Proportion to total
ending balance of Bad debt reserve
Unit name Nature of accounts Ending balance Account age
other accounts Ending balance
receivable
6) Accounts Receivable Involving Governmental Subsidy
Unit: Yuan
Governmental subsidy Estimated possession
Unit name Ending balance Ending account age
project name time, amount and basis
7) Other accounts receivable of which the recognition is terminated due to transfer of financial assets
8) Amount of assets and liabilities formed through transfer of other receivables and continuous involvement
Other description:
7. Inventories
Whether the company shall comply with the disclosure requirements of the real estate industry
No
（1）Classification of Inventories
Unit: Yuan
Ending balance Opening balance
Items
Book balance Depreciation reserve Book value Book balance Depreciation reserve Book value
Raw materials 110,557.92 110,557.92 1,810,694.49 1,810,694.49
Merchandise
10,708,600.50 10,708,600.50 9,328,819.66 9,328,819.66
inventory
Completed and
unsettled assets
formed by the 678,132,183.22 4,354,226.05 673,777,957.17 516,478,683.84 5,051,867.60 511,426,816.24
construction
contract
Development
30,299,350.36 30,299,350.36 34,272,995.11 34,272,995.11
costs
Others 2,635,112.28 2,635,112.28
256
Sino Great Wall Co., Ltd. 2018 Annual Report
Total 721,885,804.28 4,354,226.05 717,531,578.23 561,891,193.10 5,051,867.60 556,839,325.50
Whether the company shall comply with the disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guide
No. 4 － Listed Companies Engaged in the Seed Industry and Planting Business
No
The company shall comply with the disclosure requirements of the Shenzhen Stock Exchange Industry Information Disclosure Guide No. 11
－ Listed Companies Engaged in the Jewelry Related Business
No
（2）Depreciation Reserve of Inventories
Unit: Yuan
Amount increased of current period Amount decreased of current period
Items Opening balance Transferred-back Ending balance
Withdrawn Others Others
or written-off
Completed and
unsettled assets
formed by the 5,051,867.60 697,641.55 4,354,226.05
construction
contract
Total 5,051,867.60 697,641.55 4,354,226.05
（3）Description about Capitalized Amount of Borrowing Costs Contained in Ending Balance of Inventories
（4）The completed and unsettled assets formed by the construction contract at the end of the period
Unit: Yuan
Items Amount
Aggregate costs incurred 18,506,213,679.77
Aggregate gross profits acknowledged 4,332,256,515.21
Minus: estimated losses 4,354,226.05
Amount settled 22,160,338,011.76
Completed and unsettled assets formed by the construction
673,777,957.17
contract
Other description:
8、Assets Held for Sale
Unit: Yuan
Items Ending book value fair value Estimated disposal cost Estimated disposal time
February 02, 2019
257
Sino Great Wall Co., Ltd. 2018 Annual Report
Including: fixed assets 0.00
Investment real estate 0.00
Equity investment 105,075,792.00
0.00 February 02, 2019
0.00
Total 105,075,792.00 --
Other description:
Note: in order to improve the company's financial situation and revitalize its effective assets, the company decided to transfer 94% of
the equity of Acura Kliniken Baden-Baden GmbH. The company signed the equity transfer agreement with Hong Kong Congzhong
Investment Co., Ltd. on February 2, 2019, with the transfer price of RMB 190 million.
（2）Impairment provision of assets held for sale
Items Book value at the Amount Amount decreased of current Ending balance
beginning of the Withdrawn of period
year current period Amount Other amount
recovered decreased
Non-current assets held for
sale
Including: fixed assets
Investment real estate
Equity investment
Disposal group held for
sale
Including: fixed assets
Investment real estate
Equity investment
Total —— ——
（3）At the end of the year, the accumulated amount of other comprehensive incomes related to the
above non-current assets held for sale was RMB 0.00.
（4）It is no longer classified as assets held for sale and removal from Disposal group held for sale this
year: none.
9. Non-current Assets Due Within One Year
Unit: Yuan
Items Ending balance Opening balance
Other description:
10. Other Non-current Assets
Unit: Yuan
258
Sino Great Wall Co., Ltd. 2018 Annual Report
Items Ending balance Opening balance
Advance tax 291,392.34 1,779,133.63
Input tax to be deducted or verified 5,504,405.10 15,347,777.42
Total 5,795,797.44 17,126,911.05
Other description:
11. Financial Assets Available for Sale
（1）Financial assets available for sale
Unit: Yuan
Ending balance Opening balance
Items Depreciation Depreciation
Book balance Book value Book balance Book value
reserve reserve
Available-for-sale equity
10,338,500.00 10,338,500.00 10,338,500.00 10,338,500.00
instruments
Measured at Costs 10,338,500.00 10,338,500.00 10,338,500.00 10,338,500.00
Total 10,338,500.00 10,338,500.00 10,338,500.00 10,338,500.00
（2）Available-for-Sale Financial Assets Measured by Fair Value at the End of Period
Unit: Yuan
Classification of
Available-for-sale equity Available-for-sale debt
financial assets available Total
instruments instruments:
for sale
（3）Available-for-Sale Financial Assets Measured by Cost at the End of Period
Unit: Yuan
Book balance Depreciation reserve Proportion
Cash
Amount Amount Amount Amount of shares
Invested At the At the dividends
increased decreased Ending increased decreased Ending held in
units beginning beginning of current
of current of current amount of current of current amount invested
of the year of the year period
period period period period units (%)
Zhanjiang
Constructi
10,338,500 10,338,500
on & 19.00%
.00 .00
Engineerin
g Co., Ltd.
10,338,500 10,338,500
Total --
.00 .00
259
Sino Great Wall Co., Ltd. 2018 Annual Report
（4）Changed situations of impairment of financial assets available for sale during the reporting period
Unit: Yuan
Classification of
Available-for-sale equity Available-for-sale debt
financial assets available Total
instruments instruments:
for sale
（5）Description of the ending fair value of the available-for-sale equity instruments seriously reduced or
non-temporarily reduced with impairment reserve not withdrawn
Unit: Yuan
Available-for-sale
The decline in Continuous Amount of Reason for
equity
Investment cost Ending fair value fair value relative decline time impairment impairment not
instruments
to cost (months) withdrawn withdrawn
project
Other description
12. Held-to-maturity Investment
（1）Held-to-maturity investment
Unit: Yuan
Ending balance Opening balance
Items Depreciation Depreciation
Book balance Book value Book balance Book value
reserve reserve
（2）Important held-to-maturity investment at the end of the period
Unit: Yuan
Bond project Par value Par interest rate Actual interest rate Due date
（3）Reclassified held-to-maturity investment of the current period
Other description
13. Long-Term Accounts Receivable
（1）Long-Term Accounts Receivable
Unit: Yuan
Ending balance Opening balance Range of discount
Items
Book balance Bad debt reserve Book value Book balance Bad debt reserve Book value rate
260
Sino Great Wall Co., Ltd. 2018 Annual Report
Long-Term
Accounts 16,708,613.19 16,708,613.19 14,328,557.82 14,328,557.82
Receivable
Total 16,708,613.19 16,708,613.19 14,328,557.82 14,328,557.82 --
（2）Long-Term accounts receivable of which the recognition is terminated due to transfer of financial assets
Notes: Sino Great Wall Group Co., Limited, the subsidiary company of the Company, concluded and
signed the cooperation agreement with Hong Kong Yick Hing Construction Co. Ltd. (hereinafter referred
to as "Hong Kong Yick Hing”) on October 10, 2017 on the jointly founding of SGW. Yick Hing
Construction Engineering (Hong Kong) Limited (hereinafter referred to as "SGW. Yick Hing
Construction”), with Sino Great Wall Group Co., Limited contributing HKD 6 million and holding 60%
shares and Hong Kong Yick Hing contributing HKD 4 million and holding 40% shares. The business of
SGW. Yick Hing Construction shall be managed by the Board of Directors. There are three seats in the
Board of Directors, with two for Sino Great Wall and one for Hong Kong Yick Hing. However, only the
director appointed by Yick Hing can serve as the chairman of the Board of Directors meeting, in case of
whose absence from the Board of Directors meeting, an alternate shall take this place. In the event of the
same votes, the chairman of the Board of Directors meeting has the right to vote the casting vote; the
resolution of the Board of Directors shall be issued via the majority vote but the director of Hong Kong
Yick Hing possesses the veto right and has the right to agree that the revenue shall be calculated as the
long-term receivables based on constant rate of return.
（2）Long-term accounts receivable of which the recognition is terminated due to transfer of
financial assets: none.
（3）Amount of assets and liabilities formed through transfer of long-term accounts receivable and
continuous involvement: none.
（3）Amount of assets and liabilities formed through transfer of long-term accounts receivable and continuous
involvement
Other description
14. Long-term Equity Investments
Unit: Yuan
Changes of current period
Gains and
Ending
losses on Other Declare
Depreciat balance
Additiona investmen comprehe the
Invested Opening Negative Other ion Ending of
l ts nsive payment
units balance investmen changes reserve Others balance depreciati
investmen recognize income of cash
t in equity withdraw on
t d with adjustmen dividends
n reserve
equity ts or profits
method
261
Sino Great Wall Co., Ltd. 2018 Annual Report
I. Joint ventures
II. Jointly-run enterprises
Sino Great
Wall
Zhihui
24,000,00 -420,828. 23,579,17
Housing
0.00 29 1.71
Property
(Zhanjiang
) Co., Ltd.
Cenang
83,258,63 83,258,63
Resort
9.12 9.12
Sdn Bhd
III.
Subsidiar
y
AlorVista
Develop 25,292,31 25,292,31 25,292,31 25,292,31
ment Sdn 2.68 2.68 2.68 2.68
Bhd
49,292,31 83,258,63 -420,828. 25,292,31 132,130,1 25,292,31
Subtotal
2.68 9.12 29 2.68 23.51 2.68
49,292,31 83,258,63 -420,828. 25,292,31 132,130,1 25,292,31
Total
2.68 9.12 29 2.68 23.51 2.68
Other description
15. Investment Real Estate
（1）Investment real estate using cost measurement
□ Applicable √ Not applicable
（2）Investment real estate using fair value measurement
□ Applicable √ Not applicable
（3）Investment real estate with the certificate of title not transacted
Unit: Yuan
Reason(s) for the failure to transact the
Items Book value
certificate of title
Other description
262
Sino Great Wall Co., Ltd. 2018 Annual Report
16、Fixed Assets
Unit: Yuan
Items Ending balance Opening balance
Fixed assets 158,746,947.91 174,537,150.56
Total 158,746,947.91 174,537,150.56
（1）Fixed assets
Unit: Yuan
Houses and Mechanical Transportation Transportation
Items Total
buildings equipment Equipment equipment
I. Original book
value
1. Opening balance 103,857,727.50 99,011,854.51 41,578,019.37 14,847,444.63 259,295,046.01
2. Amount increased
45,846.63 9,855,943.68 2,397,598.49 788,453.06 13,087,841.86
of current period
（1）Purchase 45,846.63 9,855,943.68 2,397,598.49 788,453.06 13,087,841.86
（2）Transfer-in of
construction in
progress
（3）Increase of
business
combination
3. Amount decreased
565,613.95 3,796,972.94 4,934,924.28 1,685,768.99 10,983,280.16
of current period
（1）Disposal or
565,613.95 3,796,972.94 4,934,924.28 1,685,768.99 10,983,280.16
retirement
4. Ending balance 103,337,960.18 105,070,825.25 39,040,693.58 13,950,128.70 261,399,607.71
II. Accumulative
depreciation
1. Opening balance 15,127,800.94 30,513,047.92 16,465,368.36 9,502,963.24 71,609,180.46
2. Amount increased
14,889,879.21 10,245,735.16 8,611,485.05 2,173,342.31 35,920,441.73
of current period
（1）Withdrawn 14,889,879.21 10,245,735.16 8,611,485.05 2,173,342.31 35,920,441.73
3. Amount decreased 223,358.68 26,600.00 4,624,998.26 2,005.45 4,876,962.39
263
Sino Great Wall Co., Ltd. 2018 Annual Report
of current period
（1）Disposal or
223,358.68 26,600.00 4,624,998.26 2,005.45 4,876,962.39
retirement
4. Ending balance 29,794,321.47 40,732,183.08 20,451,855.15 11,674,300.10 102,652,659.80
III. Depreciation
reserve
1. Opening balance
2. Amount increased
of current period
（1）Withdrawn
3. Amount decreased
of current period
（1）Disposal or
retirement
4. Ending balance
IV. Book value
1. Ending book
73,543,638.71 64,338,642.17 18,588,838.43 2,275,828.60 158,746,947.91
value
2. Opening book
84,132,304.96 66,390,485.16 20,774,962.84 3,239,397.60 174,537,150.56
value
（2）Temporarily idle fixed assets
Unit: Yuan
Accumulative
Items Original book value Depreciation reserve Book value Note
depreciation
（3）Fixed asset rented through financing lease
Unit: Yuan
Accumulative
Items Original book value Depreciation reserve Book value
depreciation
House buildings 11,152,810.36 10,554,734.50 598,075.86
Mechanical
34,196,914.00 18,831,684.59 15,365,229.41
equipment
264
Sino Great Wall Co., Ltd. 2018 Annual Report
（4）Fixed assets leased through operating leases
Unit: Yuan
Items Ending book value
（5）Fixed assets with the certificate of title not transacted
Unit: Yuan
Reason(s) for the failure to transact the
Items Book value
certificate of title
Suzhou plants 8,574,218.59 Being processed
International engineering 19,863,248.79 Being processed
Other description
（6）Disposal of fixed assets
Unit: Yuan
Items Ending balance Opening balance
Other description
17．Construction in Progress
Unit: Yuan
Items Ending balance Opening balance
Construction in progress 36,697,284.04 4,968,590.96
Total 36,697,284.04 4,968,590.96
（1）Construction in Progress
Unit: Yuan
Ending balance Opening balance
Items Depreciation Depreciation
Book balance Book value Book balance Book value
reserve reserve
Equipment and
Construction in 36,697,284.04 36,697,284.04 4,968,590.96 4,968,590.96
progress
Total 36,697,284.04 36,697,284.04 4,968,590.96 4,968,590.96
（2）Change of Important Projects of Construction in Progress in Current Period
Unit: Yuan
265
Sino Great Wall Co., Ltd. 2018 Annual Report
Amount Including:
Proportio Accumula
Amount transferre Other Amount
n of tive Current
increased d into amount of interest
Name of Budget Opening Ending accumulat Project amount of interest Capital
of fixed decreased capitalizat
items amount balance balance ive project progress interest capitalizat source
current assets in in current ion in the
input to capitalizat ion rate
period current period current
the budget ion
period period
Liangdu
Central
Hospital
of
Liupansh
ui City
(tentativ 2,630,91 2,370,53 5,001,44
e name) 0.96 7.98 8.94
medical
and
nursing
integrati
on
project
PPP
project
of the
north
coast
landscap
e
engineeri
ng of
Huanbai
yang
1,112,88 7,363,47 8,476,35
Lake 67%
0.00 1.41 1.41
(Central
Lake),
PPP
project
of
Baiyang
Lake
Headqua
rters
Economi
c Port,
266
Sino Great Wall Co., Ltd. 2018 Annual Report
Xingang
District,
Chenglin
gji,
Hunan
Province
Construc
tion
Project
of Radio
and
15,792,3 15,792,3
Televisio 13%
51.48 51.48
n Media
Activity
Center,
Chengw
u County
3,743,79 25,526,3 29,270,1
Total -- -- --
0.96 60.87 51.83
（3）Impairment provision of project under construction withdrawn in the period
Unit: Yuan
Items Current withdrawal amount Reason for withdrawal
Other description
（4）Engineering materials
Unit: Yuan
Ending balance Opening balance
Items Depreciation Depreciation
Book balance Book value Book balance Book value
reserve reserve
Other description:
18. Productive Biological Asset
（1）Productive biological assets measured at costs
□ Applicable √ Not applicable
（2）Productive biological assets measured according to fair value
□ Applicable √ Not applicable
267
Sino Great Wall Co., Ltd. 2018 Annual Report
19. Oil and gas assets
□Applicable √ Not applicable
20. Intangible Assets
（1）Intangible Assets
Unit: Yuan
Non-patent
Items Land use right Patent right Software Total
technology
I. Original book
value
1. Opening balance 132,460,370.94 4,551,469.92 137,011,840.86
2. Amount increased
of current period
（1）Purchase
（2）Internal research
and development
（3）Amount
decreased of current
period
3. Amount decreased
23,839,368.35 23,839,368.35
of current period
（1）Disposal
（2）Consolidation
23,839,368.35 23,839,368.35
scope reduction
4. Ending balance 108,621,002.59 4,551,469.92 113,172,472.51
II. Accumulative
amortization
1. Opening balance 6,882,267.85 2,605,128.01 9,487,395.86
2. Amount increased
3,062,788.20 902,968.92 3,965,757.12
of current period
（1）Withdrawn
3. Amount decreased
201,932.14 201,932.14
of current period
（1）Disposal
268
Sino Great Wall Co., Ltd. 2018 Annual Report
（2）Consolidation
201,932.14 201,932.14
scope reduction
4. Ending balance 9,743,123.91 3,508,096.93 13,251,220.84
III. Depreciation
reserve
1. Opening balance
2. Amount increased
of current period
（1）Withdrawn
3. Amount decreased
of current period
（1）Disposal
4. Ending balance
IV. Book value
1. Ending book
98,877,878.68 1,043,372.99 99,921,251.67
value
2. Opening book
125,578,103.09 1,946,341.91 127,524,445.00
value
The proportion of ending intangible assets generated via internal R&D of the Company in the balance of intangible assets.
（2）Conditions of land use right with incomplete certificates of title
Unit: Yuan
Reason(s) for the failure to transact the
Items Book value
certificate of title
Other description:
21. Development Expenditure
Unit: Yuan
Opening Ending
Items Amount increased of current period Amount decreased of current period
balance balance
Other description
269
Sino Great Wall Co., Ltd. 2018 Annual Report
22. Goodwill
(1) Original book value of goodwill
Unit: Yuan
Name of invested
units or the
Opening balance Amount increased of current period Amount decreased of current period Ending balance
matters forming
goodwill
Shenzhen Yatian
Decoration
Design 6,724,316.91 6,724,316.91 0.00
Engineering Co.,
Ltd.
Wuhan
Commercial
27,257,314.49 27,257,314.49
Workers Hospital
LLC
Sino Great Wall
Southwest
17,948,978.53 17,948,978.53
Engineering Co.,
Ltd.
Sino Great Wall
Construction
6,943,534.86 6,943,534.86
Construction Co.,
Ltd.
Alor Vista
Development Sdn 5,609,206.72 5,609,206.72
Bhd
SAFAT GULF
GENERAL
TRADING & 5,547,635.00 5,547,635.00
CONTRACTING
COMPANY
Far eastern
international
10,920.04 10,920.04
engineering
company, LLC
Total 70,041,906.55 13,667,851.77 5,609,206.72 50,764,848.06
(2) Depreciation Reserve of Goodwill
Unit: Yuan
270
Sino Great Wall Co., Ltd. 2018 Annual Report
Name of invested
units or the
Opening balance Amount increased of current period Amount decreased of current period Ending balance
matters forming
goodwill
Shenzhen Yatian
Decoration
Design
Engineering Co.,
Ltd.
Wuhan
Commercial
Workers Hospital
LLC
Sino Great Wall
Southwest
17,948,978.53 17,948,978.53
Engineering Co.,
Ltd.
Sino Great Wall
Construction Co.,
Ltd.
Alor Vista
Development Sdn
Bhd
SAFAT GULF
GENERAL
TRADING & 5,547,635.00 5,547,635.00
CONTRACTING
COMPANY
Far eastern
international
engineering
company, LLC
Total 5,547,635.00 17,948,978.53 23,496,613.53
Relevant information of goodwill-related asset group or portfolio
(3) Process of impairment test of goodwill
Sino Great Wall Southwest Engineering Co., Ltd., a subsidiary of the Company, has stopped all
construction projects and has negative net assets. Given the failure to project positive future operation, the
Company decides to record full goodwill impairment.
Description of process of goodwill impairment test, key factors (including estimated growth rate at the time of future cash flow value
estimation, growth rate during the stable period, profit rate, discount rate and) and the method to confirm the loss of goodwill impairment:
Influences of goodwill impairment test
271
Sino Great Wall Co., Ltd. 2018 Annual Report
Other description
23. Long-term deferred expense
Unit: Yuan
Amount increased of Amount amortized Other amount
Items Opening balance Ending balance
current period of current period decreased
Leasehold
7,029,913.15 1,207,117.00 4,103,741.48 56,698.69 4,076,589.98
improvement
Overseas fees for
3,095,000.00 1,903,525.81 1,191,474.19
letter of guarantee
Others 2,235,044.00 775,419.27 1,459,624.73
Less: Long-term
deferred expenses
coming due within 1
year
Total 10,124,913.15 3,442,161.00 6,782,686.56 56,698.69 6,727,688.90
Other description
Deferred income tax assets/deferred income tax liabilities
(1) Non-offset deferred income tax assets
Unit: Yuan
Ending balance Opening balance
Items Deductible temporary (1) Deferred Income Tax Deductible temporary (1) Deferred Income Tax
difference Assets difference Assets
Asset depreciation
700,024,233.95 107,117,209.33 766,127,594.16 118,233,337.36
reserve
Deductible losses 43,486,026.03 10,871,506.51
Total 743,510,259.98 117,988,715.84 766,127,594.16 118,233,337.36
(2) Non-offset deferred income tax liabilities
Unit: Yuan
Ending balance Opening balance
Items Taxable temporary Deferred Income Tax Taxable temporary Deferred Income Tax
difference Liabilities difference Liabilities
Appraised increment of
assets for business 97,477,824.72 24,369,456.18 105,725,885.86 26,088,961.71
combination not under
272
Sino Great Wall Co., Ltd. 2018 Annual Report
the same control
Total 97,477,824.72 24,369,456.18 105,725,885.86 26,088,961.71
(3) Offset deferred income tax assets or liabilities
Unit: Yuan
Offset amount of Offset amount of
Balance of deferred tax Balance of deferred tax
deferred tax assets and deferred tax assets and
Items assets and liabilities at assets and liabilities at
liabilities at the end of a liabilities at the
the end of a period the beginning of a period
period beginning of a period
(1) Deferred Income Tax
117,983,727.91 118,233,337.36
Assets
Deferred Income Tax
24,369,456.18 26,088,961.71
Liabilities
(4) Details of unconfirmed deferred income tax assets
Unit: Yuan
Items Ending balance Opening balance
Deductible temporary difference 506,759,969.56 20,178,730.17
Deductible losses 1,297,146,979.98 79,207,601.38
Total 1,803,906,949.54 99,386,331.55
(5) Deductible losses of unconfirmed deferred income tax assets due in the following years
Unit: Yuan
Year Ending balance Opening balance Note
Other description:
25. Other non-current assets
Unit: Yuan
Items Ending balance Opening balance
PPP Project investment 664,524,570.00 610,524,570.00
Advance payment for purchasing
129,221,120.79 283,729,420.79
long-term assets
Other project investment 121,953,450.20 175,340,581.32
Others 8,810,652.00
Less: Amount due within a year
Total 924,509,792.99 1,069,594,572.11
273
Sino Great Wall Co., Ltd. 2018 Annual Report
Other description:
(1) Description of PPP Project
Projects Registered Subscribed Shareholding Opening Amount Amount Closing
capital investment proportion amount increased of decreased amount
amount (ten (ten thousand current of current
(ten thousand (ten thousand
thousand Yuan) period period
Yuan) Yuan)
Yuan)
(ten thousand
Yuan)
Luyi Shuguang 9,600.00 4,896.00 51% 4,896.00 4,896.00
Medical Industrial
Investment
Construction Co.,
Ltd.
Huichang County 9,559.00 8,507.51 89% 8,507.51 8,507.51
Sino Great Wall
Medical Industrial
Construction
Service Co., Ltd.
Sino Great Wall 13,050.65 7,830.39 60% 7,830.39 7,830.39
(Fugou) High-speed
Railways District
Investment Co., Ltd.
Anyang Sino Great 25,346.00 90% 25,346.00 25,346.00
Wall Medical 26,680.00
Management
Service Co., Ltd.
Sino Great Wall 3,986.16 3,587.54 90% 3,600.00 3,800.00
(Fugou) Jialu River 200.00
Comprehensive
Treatment
Investment Co., Ltd.
Sino Great Wall 4,191.00 3,771.90 90% 3,772.56 3,772.56
(Fugou) Fitness
Center Investment
Co., Ltd.
Sino Great Wall 5,000.00 4,500.00 90% 4,500.00 4,500.00
Shaanxi Fuyan
Industrial Park
Investment Co., Ltd.
274
Sino Great Wall Co., Ltd. 2018 Annual Report
Wuchuan City Sino 80% 800.00 800.00
Great Wall People’s 21,700.00 17,360.00
Hospital Investment
CO., Ltd.
Wuchuan City Sino 6,000.00 4,800.00 80% 0.00
Great Wall Chinese
Medicine Hospital
Investment CO.,
Ltd.
Guizhou Hongqiao 80% 1,000.00 1,000.00
Sino Great Wall 15,200.00 11,400.00
Healthcare Real
Estate Investment
Co., Ltd.
Gongxian Sino 15,000.00 13,500.00 40% 6,000.00 6,000.00
Healthcare
Investment Co., Ltd.
Total 66,386.81 51,393.34 61,052.46 25,700.00 66,452.46
The PPP Project Company invested by the Company shall be operated in accordance with the
established way. The rights, obligations, and related activities under which the Project Company be
controlled are established through explicit contract terms or arrangements at the beginning of the
establishment. In addition, there are representatives sent by the government among the members of the
Board of Directors of the Project Company and the variable returns of the Project Company are generally
fixed. The Project Company is not within the control scope of the Company, so the PPP Project Company
is not included in the scope of the consolidation.
(2) Advance payment for purchasing long-term assets include: Housing payment of 129,221,120.79
RMB which can be used to offset liabilities.
(3) Other project investment
No. Company Name Amount
1 UPL LAO CO., LTD. 63,803,450.00
2 Sino Hengda Engineering Co., Ltd. 58,150,000.20
Total 121,953,450.20
26. Short-term Loans
(1) Classification of Short-Term Loans
Unit: Yuan
Items Ending balance Opening balance
275
Sino Great Wall Co., Ltd. 2018 Annual Report
Pledged loan 50,000,000.00 150,000,000.00
Mortgaged loan 112,696,582.10 2,137,870,000.00
Guaranteed loan 2,650,398,046.91 1,114,073,017.67
Credit loan 49,490,000.00
Trade acceptance for which endorsement
and discounting have been conducted
75,257,402.88
while still being unmatured at the balance
sheet date
Total 2,862,584,629.01 3,477,200,420.55
Description for classification of short-term loans:
(2) Description for overdue but unpaid short-term loans
The total overdue but unpaid short-term loans by the end of this period is 1,562,683,719.03 RMB, in which details of significant overdue but
unpaid short-term loans are as follow:
Unit: Yuan
Late payment interest
Borrower Ending balance Interest rate Overdue period
rate
DBS Bank 47,081,552.00 3.15% September 27, 2018
Bank of Ningbo
43,233,518.83 6.09% June 1, 2018
Shenzhen Branch
Xiamen International
44,291,741.54 7.00% May 26, 2018
Bank Zhuhai Branch
Chang'an International
115,874,736.70 7.00% June 22, 2018
Trust Co., Ltd.
Industrial International
100,000,000.00 8.60% August 9, 2018
Trust Co., Ltd.
Bridge Trust Co., Ltd. 300,000,000.00 7.50% August 21, 2018
Shanghai Pudong
Development Bank
70,000,000.00 6.09% August 29, 2018
Shenzhen Center District
Branch
Bank of Jiujiang Zhuhai
97,768,794.96 August 22, 2018
Branch
Shenzhen Rural
Commercial Bank Futian 9,200,000.00 6.09% September 16, 2018
Branch
Shenzhen Rural
Commercial Bank Meilin 8,800,000.00 6.09% November 17, 2018
Branch
276
Sino Great Wall Co., Ltd. 2018 Annual Report
Shenzhen Rural
Commercial Bank Meilin 27,800,000.00 November 17, 2018
Branch
China Bohai Bank
50,000,000.00 5.22% December 21, 2018
Shenzhen Branch
China Bohai Bank
50,000,000.00 5.22% December 21, 2018
Shenzhen Branch
CITIC Trust Co., Ltd. 210,000,000.00 7.65% June 28, 2018 16.00%
Industrial International
100,000,000.00 8.00% September 29, 2018
Trust Co., Ltd.
Industrial Bank Houhai
288,633,375.00 8.00% October 17, 2018
Branch
Total 1,562,683,719.03 -- -- --
Other description:
Note: ① The loan is due on September 27, 2018. Considering the Company failed to pay back on
time due to fund shortage, DBS Bank Beijing Branch has withdrawn a guarantee deposit of 50 million
RMB to back up the overdue loan. The loan has not be paid back but DBS Bank has waived further
interest charges by September 27, 2018.
27. Changes are measured by the fair value and will be recorded in the gain or loss of the current period
Unit: Yuan
Items Ending balance Opening balance
Other description:
28. Derived financial liabilities
□ Applicable √ Non-applicable
29. Notes payable and accounts payable
Unit: Yuan
Items Ending balance Opening balance
Notes payable 1,034,087,499.72 906,597,988.15
Accounts payable 892,155,630.43 1,719,579,087.62
Total 1,926,243,130.15 2,626,177,075.77
277
Sino Great Wall Co., Ltd. 2018 Annual Report
(1) Classified presentation of notes receivable
Unit: Yuan
Type Ending balance Opening balance
Trade acceptance 471,267,864.12 283,190,010.00
Bank acceptance 562,819,635.60 623,407,978.15
Total 1,034,087,499.72 906,597,988.15
Overdue but unpaid notes receivable by the end of the period is 427,190,071.71 RMB.
(2) Presentation of accounts payable
Unit: Yuan
Items Ending balance Opening balance
Project construction cost 870,866,176.06 1,704,130,649.60
Payment for purchasing long-term assets
Payment for medicine 17,497,130.23 15,448,438.02
Others 3,792,324.14
Total 892,155,630.43 1,719,579,087.62
(3) Significant accounts receivable with account age of more than 1 year
Unit: Yuan
Items Ending balance Causes for non-payment or carryover
Other description:
30. Items received in advance
(1) Presentation of items received in advance
Unit: Yuan
Items Ending balance Opening balance
Unfinished project with settled
10,850,086.84
construction cost
Advance payment for project construction
391,350,850.34 145,513,588.44
cost
Advance payment for medical treatment 845,407.87 866,264.23
Advance payment for lease 43,733,325.87
Advance payment for rent 31,322,073.00
Total 478,101,743.92 146,379,852.67
278
Sino Great Wall Co., Ltd. 2018 Annual Report
(2) Significant items received in advance with account age of more than 1 year
Unit: Yuan
Items Ending balance Causes for non-payment or carryover
(3) Description for unfinished project with settled construction cost due to end-of-period contract conclusion
Unit: Yuan
Items Amount
Accrued occurred cost 1,449,011,469.60
Accrued recognized gross profit 290,007,053.46
Settled amount 1,749,868,609.90
Unfinished project with settled construction cost arising from
-10,850,086.84
contract conclusion
Other description:
31. Long-term payroll payable
(1) Presentation of long-term payroll payable
Unit: Yuan
Amount increased of Amount decreased of
Items Opening balance Ending balance
current period current period
I. Short-term
20,727,897.18 368,573,235.31 303,232,214.76 86,068,917.73
remuneration
2. Post-demission
welfare - defined 1,183,644.89 20,080,481.96 20,918,185.73 345,941.13
contribution plans
Total 21,911,542.07 388,653,717.27 324,150,400.49 86,414,858.86
(2) Presentation of short-term remuneration
Unit: Yuan
Amount increased of Amount decreased of
Items Opening balance Ending balance
current period current period
1. Salary, bonus,
20,075,245.00 324,705,806.14 259,868,209.60 84,912,841.53
allowance and subsidy
2. Employees’ welfare
23,251,690.71 22,328,108.54 923,582.18
expense
3. Social insurance
599,087.72 11,728,150.40 12,274,222.84 53,015.28
premium
279
Sino Great Wall Co., Ltd. 2018 Annual Report
Including: Medical
504,031.41 10,323,842.07 10,824,592.08 3,281.40
insurance premium
Industrial
injury insurance 22,668.30 594,546.56 601,117.51 16,097.35
premium
Maternity
72,388.01 809,761.77 848,513.25 33,636.53
insurance premium
4. Housing fund 53,564.46 8,084,058.90 7,958,144.62 179,478.74
5. Labor union outlay
and employees’ 803,529.16 803,529.16
education outlay
Total 20,727,897.18 368,573,235.31 303,232,214.76 86,068,917.73
(3) Presentation of Drawing Plans Set Up
Unit: Yuan
Amount increased of Amount decreased of
Items Opening balance Ending balance
current period current period
1. Basic pension
1,154,346.00 19,327,824.90 20,136,651.60 345,519.30
insurance
2. Unemployment
29,298.89 752,657.06 781,534.13 421.83
insurance premium
Total 1,183,644.89 20,080,481.96 20,918,185.73 345,941.13
Other description:
32. Taxes payable
Unit: Yuan
Items Ending balance Opening balance
Value-added tax 85,518,697.30 32,678,325.28
Enterprise income tax 221,830,373.42 239,018,994.88
Personal income tax 6,468,895.33 374,031.94
Urban maintenance and construction tax 4,026,082.61 3,928,587.22
Educational surtax 3,001,921.43 2,983,381.35
Other taxes 73,111,917.43 78,462,157.04
Total 393,957,887.52 357,445,477.71
Other description:
None
280
Sino Great Wall Co., Ltd. 2018 Annual Report
33. Other accounts payable
Unit: Yuan
Items Ending balance Opening balance
Interest payable 280,806,670.49 16,105,263.85
Dividends payable 8,541,818.64
Other accounts payable 1,923,064,481.30 520,965,421.13
Total 2,212,412,970.43 537,070,684.98
(1) Interest payable
Unit: Yuan
Items Ending balance Opening balance
Payment of principal at maturity and
142,367,316.80 10,819,629.22
interest in installments
Interest payable on short-term loans 137,060,010.22 5,285,634.63
Interests withdrawn for overdue notes 1,379,343.47
Total 280,806,670.49 16,105,263.85
Significant overdue but unpaid interest
Unit: Yuan
Borrower Overdue amount Causes for overdue
Great Wall Guoxing Financial Leasing Co.,
1,862,398.37 Capital shortage
Ltd.
CITIC Trust Co., Ltd. 18,755,539.19 Capital shortage
Industrial International Trust Co., Ltd. 11,534,803.45 Capital shortage
Industrial Bank Houhai Branch 11,388,850.54 Capital shortage
Bohai International Trust Co., Ltd. 25,430,142.49 Capital shortage
Xiamen International Bank Zhuhai Branch 4,236,900.04 Capital shortage
Bank of Ningbo Shenzhen Branch 4,149,615.44 Capital shortage
Shenzhen Rural Commercial Bank Futian
326,957.92 Capital shortage
Branch
Wanxiang Trust Co., Ltd. 6,164,383.56 Capital shortage
Zhongjiang International Trust Co., Ltd. 48,926,568.27 Capital shortage
Baoshang Bank Shenzhen Branch 16,118,737.07 Capital shortage
Shenzhen Rural Commercial Bank Meilin
1,036,262.79 Capital shortage
Branch
China Bohai Bank Shenzhen Branch 2,760,164.38 Capital shortage
281
Sino Great Wall Co., Ltd. 2018 Annual Report
Shaanxi International Trust Co., Ltd. 18,150,565.60 Capital shortage
Chang'an International Trust Co., Ltd. 7,952,291.31 Capital shortage
Industrial International Trust Co., Ltd. 14,470,421.04 Capital shortage
Bridge Trust Co., Ltd. 36,052,715.11 Capital shortage
Shanghai Pudong Development Bank
3,738,211.58 Capital shortage
Shenzhen Center District Branch
Bank of Jiujiang Zhuhai Branch 6,599,149.57 Capital shortage
China Minsheng Bank Shenzhen Branch 4,286,407.31 Capital shortage
Shanghai Pudong Development Bank
6,317,529.17 Capital shortage
Fulicheng Subbranch
China Railway Trust Co., Ltd. 2,724,608.75 Capital shortage
Ping'an International Financial Leasing
816,385.59 Capital shortage
Co., Ltd.
Bank of Beijing Shuangxiu Subbranch 24,843,680.56 Capital shortage
Total 278,643,289.10 --
Other description:
(2) Dividends payable
Unit: Yuan
Items Ending balance Opening balance
Common stock dividends 8,541,818.64
Total 8,541,818.64
Other description, including reasons for significant dividends in arrears for over a year:
(3) Other accounts payable
1) Presentation of other accounts payable by the nature of accounts
Unit: Yuan
Items Ending balance Opening balance
Tender bond, performance bond and
29,414,375.04 48,363,917.10
deposit
Personal intercourse funds and withheld
266,550,420.26 14,453,897.51
items
Intercourse funds of the organization 841,985,904.64 450,793,562.35
Payment for subscription of non-public
33,536.80 4,500,000.00
offerings
Others 785,080,244.56 2,854,044.17
282
Sino Great Wall Co., Ltd. 2018 Annual Report
Total 1,923,064,481.30 520,965,421.13
2) Other significant accounts receivable with account age of more than 1 year
Unit: Yuan
Items Ending balance Causes for non-payment or carryover
Other description
34. Liabilities held for sale
Unit: Yuan
Items Ending balance Opening balance
Other description:
None
35. Non-current liabilities coming due within one year
Unit: Yuan
Items Ending balance Opening balance
Long-term loans coming due within 1 year 906,690,152.95 820,422,471.45
Long-term account payable coming due
69,029,828.60
within 1 year
Total 975,719,981.55 820,422,471.45
Other description:
None
36. Other Current Liabilities
Unit: Yuan
Items Ending balance Opening balance
Output taxes to transfer 121,529,600.95
Total 121,529,600.95
Increase or decrease of short-term bonds payable
Unit: Yuan
Amortizat
Interests Amount
Issue of ion of
Bond Date of Bond Issued Opening withdraw repaid of Ending
Par value current premium
name issue period amount balance n as per current balance
period or
par value period
discount
Other description:
None
283
Sino Great Wall Co., Ltd. 2018 Annual Report
37. Long-term loans
(2) Classification of long-term loans
Unit: Yuan
Items Ending balance Opening balance
Mortgaged loan 16,839,164.49
Guaranteed loan 1,026,690,152.95 826,253,306.53
Less: Long-term loans coming due within
-906,690,152.95
1 year (see Note VI, 25)
Total 120,000,000.00 843,092,471.02
Description for classification of long-term loans:
None
Other description: including the range of interest rate:
None
38. Bonds payable
(1) Bonds payable
Unit: Yuan
Items Ending balance Opening balance
First period bond financing plan of Sino
Great Wall International Engineering Co., 254,801,342.47 245,000,000.00
Ltd. in 2017
Qianhai Wutong Private Bond No.
100,000,000.00
2016070
Total 254,801,342.47 345,000,000.00
(2) Increase or decrease of bonds payable (excluding other financial instruments classified as financial liabilities,
like preferred stocks and perpetual bonds, etc.)
Unit: Yuan
Amortizat
Interests Amount
Issue of ion of Other
Bond Date of Bond Issued Opening withdraw repaid of Ending
Par value current premium amount
name issue period amount balance n as per current balance
period or decreased
par value period
discount
1.
100,000,0 99,800,00 100,000,0 6,200,000 106,200,0
Qianhai 1/6/2017 1/6/2019 0.00 0.00
00.00 0.00 00.00 .00 00.00
Wutong
284
Sino Great Wall Co., Ltd. 2018 Annual Report
Private
Bond No.
2016070
2. First
period
bond
financing
plan of
Sino
Great 245,000,0 10/31/201 10/31/202 245,000,0 245,000,0 9,801,342 254,801,3
0.00
Wall 00.00 7 0 00.00 00.00 .47 42.47
Internatio
nal
Engineeri
ng Co.,
Ltd. in
2017
345,000,0 344,800,0 345,000,0 16,001,34 106,200,0 254,801,3
Subtotal 0.00
00.00 00.00 00.00 2.47 00.00 42.47
Less:
End-of-ye
ar amount
due
within a
year (see
Note VI,
25)
344,800,0 345,000,0 16,001,34 106,200,0 254,801,3
Total -- -- -- 0.00
00.00 00.00 2.47 00.00 42.47
(3) Description of conversion conditions and time for convertible corporate bonds
None
(4) Description of other financial instruments classified as financial liabilities
Basic description of financial instruments including preferred stocks and perpetual bonds issued at the end of a period
None
Presentation of changed situations of financial instruments including preferred stocks and perpetual bonds issued at the end of a period
Unit: Yuan
Issued Amount increased of current Amount decreased of
Opening Ending
financial period current period
instruments Amount Book value Amount Book value Amount Book value Amount Book value
285
Sino Great Wall Co., Ltd. 2018 Annual Report
Description of other financial instruments classified as financial liabilities
None
Other description
None
39. Long-term account payable
Unit: Yuan
Items Ending balance Opening balance
Long-term account payable 322,990.35 81,945,567.86
Total 322,990.35 81,945,567.86
(1) Presentation of other accounts payable by the nature of accounts
Unit: Yuan
Items Ending balance Opening balance
Accrued financial lease outlay 322,990.35 81,945,567.86
Other description:
None
(2) Special account payable
Unit: Yuan
Amount increased of Amount decreased Reason for
Items Opening balance Ending balance
current period of current period formation
Other description:
None
40. Long-term payroll payable
(1) Chart of long-term payroll payable
Unit: Yuan
Items Ending balance Opening balance
(2) Changed situations of benefit plan measured and set up
Present value of benefit plan measured and set up
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Asset set up:
286
Sino Great Wall Co., Ltd. 2018 Annual Report
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Net liabilities or net assets of benefit plan measured and set up
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Explanation on the content of benefit plan set up and related risks, impact on the company’s cash flow, timing and uncertainties:
Explanation on the sensitivity analysis result and significant actuarial assumptions of benefit plan set up:
Other description:
41. Accrued liabilities
Unit: Yuan
Items Ending balance Opening balance Reason for formation
Pending actions 2,958,723.15 3,414,189.15
Total 2,958,723.15 3,414,189.15 --
Other descriptions, including significant assumptions and appraisal of significant accrued liabilities:
42. Deferred income
Unit: Yuan
Amount increased of Amount decreased Reason for
Items Opening balance Ending balance
current period of current period formation
Projects involving governmental subsidy:
Unit: Yuan
Amount
Amount
Subsidy recorded in Cost offset
recorded in Related to
Liability Opening increased non-operatin expenses Other Ending
other benefits assets/Relate
items balance over current g income over current changes balance
over current d to income
period over current period
period
period
Other description:
43. Other Non-current liabilities
Unit: Yuan
Items Ending balance Opening balance
Other description:
None
287
Sino Great Wall Co., Ltd. 2018 Annual Report
44. Capital Stock
Unit: Yuan
Increase/Decrease (+/-)
Opening Shares Shares
New shares Ending balance
balance presented for converted from Others Subtotal
issued
free public reserve
Total amount 1,698,245,011. 1,698,245,011.
of shares 00 00
Other description:
45. Other equity instruments
(1) Basic description of financial instruments including preferred stocks and perpetual bonds issued at the end of
a period
(2) Presentation of changed situations of financial instruments including preferred stocks and perpetual bonds
issued at the end of a period
Unit: Yuan
Issued Amount increased of current Amount decreased of
Opening Ending
financial period current period
instruments Amount Book value Amount Book value Amount Book value Amount Book value
Explanation on the reason for increase, decrease or change of other current equity instruments and the accounting methods:
Other description:
46. Capital reserve
Unit: Yuan
Amount increased of Amount decreased of
Items Opening balance Ending balance
current period current period
Capital premium (capital
-857,285,524.28 -857,285,524.28
stock premium)
Other capital reserve -442,064,177.46 503,161.67 -441,561,015.79
Total -1,299,349,701.74 503,161.67 -1,298,846,540.07
Other description, including explanation on the reason for increase, decrease or change of current special reserve:
47. Inventory stock
Unit: Yuan
Items Opening balance Amount increased of Amount decreased of Ending balance
288
Sino Great Wall Co., Ltd. 2018 Annual Report
current period current period
Other description, including explanation on the reason for increase, decrease or change of current inventory stock
48. Other composite benefits
Unit: Yuan
Amount incurred of current period
Less: Current
Amount After-tax
gain and loss After-tax
incurred of amount
Opening from Less: amount Ending
Items current attributed to
balance conversion of Expense of attributed to balance
period minor
other previous income tax the parent
before shareholder
composite company
taxes s
benefits
II. Other composite benefits to be -50,380.9
858,242.13 -50,380.95 858,242.13 0.00 -908,623.08 0.00
re-classified as gain and loss 5
Balance from conversion of -50,380.9
858,242.13 -50,380.95 -908,623.08
foreign-currency financial statements 5
-50,380.9
Total of other composite benefits 858,242.13 -50,380.95 858,242.13 0.00 -908,623.08
5
Other description, including adjustment of initial carrying amount of hedged items converted from the effective portion of gain or loss of
cash flow hedge
Special reserve
Unit: Yuan
Amount increased of Amount decreased of
Items Opening balance Ending balance
current period current period
Work safety expense 164,231,078.18 143,204,995.75 21,026,082.43
Total 164,231,078.18 143,204,995.75 21,026,082.43
Other description, including explanation on the reason for increase, decrease or change of current special reserve:
50. Surplus reserve
Unit: Yuan
Amount increased of Amount decreased of
Items Opening balance Ending balance
current period current period
Statutory surplus reserve 84,394,441.23 84,394,441.23
Total 84,394,441.23 84,394,441.23
Description, including explanation on the reason for increase, decrease or change of current surplus reserve
289
Sino Great Wall Co., Ltd. 2018 Annual Report
51. Undistributed profit
Unit: Yuan
Items Amount of current period Amount of last period
Undistributed profit at the end of last period
1,503,103,396.72 1,228,970,498.86
before adjustment
Undistributed profit at beginning of the year after
1,503,103,396.72 1,228,970,498.86
adjustment
Plus: Net profit attributed to the parent company’s
-1,704,739,736.40 380,090,990.83
owners in the current period
Common stock dividends payable 67,929,800.44 -101,894,700.66
Others -4,063,392.31
Ending undistributed profit -269,566,140.13 1,503,103,396.72
Details of undistributed profit at beginning of the year:
1) Undistributed profit affected by the tracking and adjustment carried out in accordance with the Accounting Standards for Business
Enterprises and related regulations.
2) Undistributed profit affected by change of accounting methods.
3) Undistributed profit affected by significant accounting errors.
4) Undistributed profit affected by change of accounting scope after business combination under the same control.
5) Undistributed profit affected by other adjustments.
52．Operating Income and Operating Cost
Unit: Yuan
Amount incurred of current period Amount incurred of last period
Items
Income Cost Income Cost
Main businesses 2,426,404,120.17 2,448,895,755.44 6,496,576,893.36 4,886,041,528.62
Other businesses 583,566.85 604,879.43 548,087.16 312,971.04
Total 2,426,987,687.02 2,449,500,634.87 6,497,124,980.52 4,886,354,499.66
53．Taxes and Surcharge
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Urban maintenance and construction tax 1,925,156.82 1,884,723.85
Educational surtax 1,461,672.67 1,399,860.90
Property tax 136,902.96
Land use tax 95,436.15
Vehicle and vessel usage tax 660.00
290
Sino Great Wall Co., Ltd. 2018 Annual Report
Stamp duty 1,136,171.01
Business tax -141,646.64
Other taxes 34,660.96 1,390,067.50
Total 4,790,660.57 4,533,005.61
Other description:
54．Selling Expenses
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Employee Compensation 4,952,958.61 8,019,452.92
Travel expenses 169,017.69 723,327.21
Business entertainment expense 430,325.64 379,837.66
Advertising and promotion expenses 16,293.68
Construction maintenance fees 20,496,867.63 16,040,272.66
Others 2,251,632.85 7,034,063.84
Total 28,300,802.42 32,213,247.97
Other description:
55．Management Expenses
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Employee Compensation 179,468,828.70 146,060,526.13
Administrative expenses 6,753,534.24 15,110,557.60
Rental 14,188,202.29 19,054,037.35
Travel expenses 9,449,221.53 13,611,200.61
Business entertainment expense 10,737,792.07 8,668,113.32
Depreciation fees of fixed assets 11,878,149.07 11,262,728.55
Vehicle expenses 1,259,121.59 3,538,337.07
Long-term deferred expense amortization 3,947,660.60 4,360,113.43
Consulting fee 27,870,502.23 59,415,179.05
Conference 140,828.39 718,194.44
Litigation Fee 3,039,464.22
Intangible asset amortization 3,522,205.28
Others 39,443,290.32 31,158,219.65
Total 311,698,800.53 312,957,207.20
291
Sino Great Wall Co., Ltd. 2018 Annual Report
Other description:
56．R&D Expenses
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Other description:
57．Financial Expenses
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Interest expenditure 721,751,253.62 294,207,584.82
Less: Interest income 17,750,530.72 14,448,977.61
Net Interest Expenses 704,000,722.90 279,758,607.21
Exchange gain or loss -118,130,856.86 124,220,566.01
Discount interest
Handling charges and others 20,145,670.19 28,611,434.33
Total 606,015,536.23 432,590,607.55
Other description:
58．Asset Impairment Loss
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
I. Bad debt loss 463,968,319.90 316,738,875.97
II. Inventory depreciation loss -697,641.55
V. Impairment losses on long-term equity
25,292,312.68
investment
XIII. Goodwill impairment loss 17,948,978.53 5,547,635.00
Total 506,511,969.56 322,286,510.97
Other description:
59．Other Income
Unit: Yuan
Sources of other income Amount incurred of current period Amount incurred of last period
Subsidy for post stabilization 38,940.28 250,194.89
Commerce Commission bounty 1,960,934.00
292
Sino Great Wall Co., Ltd. 2018 Annual Report
Return of handling charges on personal
13,100.20
income tax
60．Investment Yield
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Gain on long-term equity investments subject
-420,828.29
to accounting with equity method
Investment yield obtained from disposal of
25,953,835.15
long-term equity investments
Proceeds from wealth management products 4,686,911.15 -387,601.37
Total 30,219,918.01 -387,601.37
Other description:
61．Profits from Changes in Fair Value
Unit: Yuan
Sources of profits from changes in fair
Amount incurred of current period Amount incurred of last period
value
Other description:
62．Proceeds from Asset Disposal
Unit: Yuan
Sources of proceeds from asset disposal Amount incurred of current period Amount incurred of last period
Disposal of fixed assets -150,250.00
63．Non-Operating Income
Unit: Yuan
Amount recorded in the
Amount incurred of current
Items Amount incurred of last period non-recurring gain or loss of
period
current period
Gains from debt restructuring 100,000,000.00
Awards for steady growth 5,526,702.00
Nonpayment intercourse funds 22,972,420.86
Gains from disposal of
116,125.14
non-current assets
Others 84,587.85 156,426.78
293
Sino Great Wall Co., Ltd. 2018 Annual Report
Total 128,699,835.85 156,426.78
Governmental subsidies included in gain or loss of current period:
Unit: Yuan
Whether
subsidies Amount
Whether it is Amount Related to
Subsidy Granting affect gain or incurred of
Reasons Nature/type special incurred of assets/Relate
items subjects loss in the current
subsidy last period d to income
current period
period
Awards for
Related to
steady 5,526,702.00
income
growth
Subsidy for
Related to
post 38,940.20
income
stabilization
Return of
handling
Related to
charge on 13,100.20
income
personal
income tax
Other description:
64．Non-Operating Expenditure
Unit: Yuan
Amount recorded in the
Amount incurred of current
Items Amount incurred of last period non-recurring gain or loss of
period
current period
Donation outlay 240,000.00
Loss from non-current asset
1,297,636.91 1,297,636.91
retirement
Overdue fine 11,774,955.74 11,774,955.74
Loss by default 403,761,833.33 403,761,833.33
Others 5,133,452.12 -3,270,152.73 5,133,452.12
Total 395,623,593.98 -3,030,152.73
Other description:
294
Sino Great Wall Co., Ltd. 2018 Annual Report
65．Expense of Income Tax
(I) Table of Income Tax
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Expense of income tax in the current
12,135,333.39 172,349,309.88
period
Deferred income tax expenses -8,853,410.79 -45,345,578.12
Total 3,281,922.60 127,003,731.76
(II) Adjustment Process of Accounting Profit and Expense of Income Tax
Unit: Yuan
Items Amount incurred of current period
Total profit -1,716,482,516.80
Expense of income tax calculated with statutory [or applicable]
-430,354,356.39
tax rate
Influences of different tax rates applicable to subsidiaries -3,982,736.66
Influences of non-deductible costs, expenses and losses 126,689,992.39
Influences of deductible temporary difference or deductible loss
of non-confirmed deferred income tax assets in the current 304,484,844.65
period
Expense of income tax 3,281,922.60
Other description:
66．Other Composite Benefits
For more details, please see Notes to Financial Statement.
67．Items of Cash Flow Statement
(I) Cash Received Relating to Other Operating Activities
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Interest income 6,994,835.15 6,963,410.83
Bond, deposit and other intercourse funds 4,926,888,796.41 6,125,468,343.62
Governmental subsidy 51,435.00 2,211,128.89
Others 77,749.30
295
Sino Great Wall Co., Ltd. 2018 Annual Report
Total 4,934,012,815.86 6,134,642,883.34
Description on cash received relating to other operating activities:
(II) Cash Paid Relating to Other Operating Activities
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Handling charges 235,185,395.07 25,037,998.96
Warranties and deposit expenses 190,984,798.40 545,286,663.39
Selling Expenses 1,076,050.17 71,903,447.59
Management Expenses 50,611,015.00 305,349,194.66
Current account 4,051,155,412.98 6,022,745,439.52
Others 11,137.39
Total 4,529,023,809.01 6,970,322,744.12
Description on cash paid relating to other operating activities:
(III) Cash Received Relating to Other Investment Activities
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Description on cash received relating to other investment activities:
(IV) Cash Paid Relating to Other Investment Activities
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Cash balance of subsidiaries in disposal of
2,990,381.41
subsidiaries
Bond paid for land auction 131,500,000.00
Total 2,990,381.41 131,500,000.00
Description on cash paid relating to other investment activities:
(V) Cash Received Relating to Other Financing Activities
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Received company/personal financing
54,209,648.35 166,727,200.00
fund
Non-public warranties 12,600,000.00
296
Sino Great Wall Co., Ltd. 2018 Annual Report
Total 54,209,648.35 179,327,200.00
Description on cash received relating to other financing activities:
(VI) Cash Paid Relating to Other Financing Activities
Unit: Yuan
Items Amount incurred of current period Amount incurred of last period
Paid company/personal financing fund 22,511,749.85 178,321,283.83
Paid trust deposit 48,600,000.00
Paid financing fees 6,150,000.00
Others 1,050.18
Total 22,512,800.03 233,071,283.83
Description on cash paid relating to other financing activities:
68．Supplementary Data of Cash Flow Statement
(I) Supplementary Data of Cash Flow Statement
Unit: Yuan
Supplementary Data Amount of current period Amount of last period
1. Net profit adjusted to cash flow of
-- --
operating activities:
Net profit -1,719,764,439.40 384,046,026.83
Plus: Asset depreciation reserve 506,759,969.56 322,286,510.97
Depreciation of fixed assets, depreciation of
oil and gas assets, and depreciation of 35,920,441.73 17,923,017.62
productive biological assets
Intangible asset amortization 3,965,757.12 2,653,220.75
Long-term deferred expense amortization 6,782,686.56 17,222,764.37
Loss on disposal of fixed assets, intangible
assets and other long-term assets (income
1,181,511.77
represented with “－”)
Loss from fixed asset retirement (Income is
150,250.00
represented with “-”)
Financial expenses (income represented with
721,751,253.62 294,207,584.82
“－”)
Investment loss (income represented with -29,219,919.01 387,601.37
297
Sino Great Wall Co., Ltd. 2018 Annual Report
“－”)
Decrease of deferred income tax assets
-5,949,436.23 -41,934,678.02
(increase represented with “－”)
Increase of deferred income tax liabilities
-53,653.31 -1,380,927.06
(decrease represented with “－”)
Decrease of inventories (increase represented
-160,692,252.73 -222,529,694.72
with “－”)
Decrease of operating items receivable
1,284,162,666.35 -2,467,941,286.77
(increase represented with “－”)
Increase of operating items payable
183,034,469.42 -86,959,008.81
(decrease represented with “－”)
Net amount of cash flow from operating
827,879,055.45 -1,781,868,618.65
activities
2. Major investment and financing
activities not involving cash revenue and -- --
expenditure:
3. Net change of cash and cash
-- --
equivalents:
Ending balance of cash 125,767,796.88 647,222,590.48
Less: Opening balance of cash 647,222,590.48 943,705,322.41
Net increment of cash and cash equivalents -521,454,793.60 -296,482,731.93
(II) Net Amount of Cash Paid for Acquisition of Subsidiaries in Current Period
Unit: Yuan
Amount
Wherein: --
Wherein: --
Wherein: --
Other description:
(III) Net Amount of Cash Received from Disposal of Subsidiaries in Current Period
Unit: Yuan
298
Sino Great Wall Co., Ltd. 2018 Annual Report
Amount
Wherein: --
Wherein: --
Wherein: --
Other description:
(IV) Composition of Cash and Cash Equivalents
Unit: Yuan
Items Ending balance Opening balance
I. Cash 125,767,796.88 647,222,590.48
Including: Cash on hand 3,116,229.51 4,614,087.17
Bank deposit available for payment anytime 122,651,567.37 642,608,503.33
III. Ending balance of cash and cash
125,767,796.88 647,222,590.48
equivalents
Other description:
69．Notes to Items in Statement of Changes in Owner’s Equity
Explain names of "other" items that adjust the ending balance of last year and the amount adjusted and other items:
70．Assets with Ownership or Use Right Restricted
Unit: Yuan
Items Ending book value Reason for restriction
Monetary Resources 532,947,089.60 Guarantee deposit and frozen fund
Fixed assets 15,963,305.27 Finance lease assets
Accounts receivable 716,094,881.32 Pledge
Total 1,265,005,276.19 --
Other description:
71．Foreign-Currency Monetary Items
(I) Foreign-Currency Monetary Items
Unit: Yuan
Ending balance in foreign Ending balance in RMB after
Items Exchange rate for conversion
currency conversion
Monetary Resources -- --
Wherein: USD 1,079,139.41 6.8632 7,406,349.58
299
Sino Great Wall Co., Ltd. 2018 Annual Report
EUR
HKD 345,733.97 0.8762 302,932.10
QAR 48,391.43 1.8848 91,210.45
BUK 24,542,203.15 0.0044 108,446.54
IDR 2,955,569.10 0.0005 1,395.00
Russian Ruble (RUB) 14,477,133.45 0.0986 1,427,445.36
PHP 8,409,386.87 0.1306 1,098,400.48
MYR 561,416.73 1.6479 925,164.25
MOP 109,037.47 0.8500 92,680.21
Accounts receivable -- --
Wherein: USD 61,883,264.10 6.8632 424,717,218.17
EUR
HKD
QAR 357,701,359.03 1.8848 674,212,418.07
MYR 60,603,384.88 1.6479 99,868,923.99
MOP 1,362,817.67 0.8500 1,158,373.92
Advance Payment
Wherein: USD 190,698.15 6.8632 1,308,799.55
Russian Ruble (RUB) 7,869,840.23 0.0986 775,966.25
MYR 121,322.96 1.6479 199,929.32
Other accounts receivable:
Wherein: USD 3,495,233.16 6.8632 24,030,248.49
EUR 2,600,000.00 7.8473 20,402,980.00
HKD 1,474.18 0.8762 1,291.68
QAR 136,466,367.94 1.8848 257,218,256.48
BUK 202,697,842.51 0.0046 936,810.18
Russian Ruble (RUB) 9,583,296.61 0.0986 944,913.05
PHP 146,997.00 0.1306 19,200.16
MYR 1,000,168.97 1.6479 1,648,188.49
LAK 375,243,716.39 0.0008 301,125.13
Accounts payable
Wherein: USD 38,973,517.01 6.8632 267,483,041.94
QAR 5,928,511.95 1.8534 10,987,967.45
BUK 1,121,875.00 0.0044 4,959.81
PHP 44,130.43 0.1306 5,764.13
300
Sino Great Wall Co., Ltd. 2018 Annual Report
MYR 26,092,854.29 1.6479 42,998,675.51
Items Received in Advance:
Wherein: USD 354,069.48 6.8632 2,430,049.66
Other accounts payable:
Wherein: USD 608,672.04 6.8632 4,177,437.95
HKD 407.62 0.8762 357.16
PHP 8,447.15 0.1306 1,103.33
MYR 24,542.40 1.6479 40,443.42
AUD 6,270.00 4.8250 30,252.75
Long-term loans -- --
Wherein: USD
EUR
HKD
Other description:
(II) Description of Overseas Operating Entities; In Particular, Important Overseas Operating Entities Should
Disclose Their Main Business Place, Recording Currency and the Basis for Selection; Reasons for Changes in the
Recording Currency Should Also Be Disclosed.
√ Applicable □ Not applicable
72．Hedging
Disclosure of hedging items and related hedging instruments and qualitative and quantitative information on hedged risks in accordance with
the hedging category:
73．Governmental Subsidy
(I) Basic Facts about Governmental Subsidies
Unit: Yuan
Amount recorded in the gain or
Type Amount Presented items
loss of the current period
(II) Refund of Governmental Subsidy
□ Applicable √ Not applicable
Other description:
301
Sino Great Wall Co., Ltd. 2018 Annual Report
74. Miscellaneous
VIII. Change of Combination Scope
(I) Business Combination not under the Same Control
1. Business combination not under the same control in current term:
Unit: Yuan
The The
purchased purchased
Basis for party’s party’s net
Name of the Time point of Cost of Proportion of Way to
Date of determining income from profit from
purchased equity equity equity acquire the
purchasing the date of the date of the date of
party acquisition acquisition acquired stock equity
purchasing purchasing to purchasing to
the end of the end of
term term
Others：
2. Combination cost and goodwill
Unit: Yuan
Combination cost
Method to determine the fair value of combination cost, contingent consideration and its changes:
Main reasons for large amount of goodwill:
Others:
3. Identifiable assets and liabilities of the purchased party on the date of purchasing
Unit: Yuan
Fair value on the date of purchasing Book value on the date of purchasing
Method to determine the fair value of identifiable assets and liabilities:
Contingent liabilities from the purchased party during the combination:
Others:
4. Gains or losses on re-measurement as per fair value of equity held before the date of purchasing
Is there such transaction that realizes combination through several steps of transactions and obtains control right during reporting period?
□ Yes √ No
302
Sino Great Wall Co., Ltd. 2018 Annual Report
5. Relevant descriptions for failure to reasonably determine combination consideration and fair value of identifiable assets and
liabilities of the purchased party on the purchasing date or at the end of current combination term.
6. Others
(II) Business Combination under the Same Control
1. Business combination under the same control in current term
Unit: Yuan
The The
combined combined
The The
Proportion of Basis for Basis for party’s party’s net
combined combined
Name of the gained business determining income from profit from
Combination party’s party’s net
combined equities combination the the beginning the beginning
date income in the profit in the
party during the under the combination to the end of to the end of
comparative comparative
combination. same control date the current the current
period period
combination combination
term term
Others:
2. Combination cost
Unit: Yuan
Combination cost
Contingent consideration and its changes:
Others:
3. The combined party’s book value of assets and liabilities on the combination date
Unit: Yuan
Combination date At the end of the last term
Contingent liabilities from the combined party during the combination:
Others:
(III) Counter Purchase
Transaction basic information, basis to determine a transaction as a counter purchase, remaining assets of the listed company, whether
liabilities are part of businesses and basis to determine it, determination of combination cost, adjusted equity amount and its calculation when
dealt per equity transaction:
303
Sino Great Wall Co., Ltd. 2018 Annual Report
(IV) Disposal of Subsidiaries
Is there a single disposal of investments in a subsidiary, that is, loss of control right?
√ Yes □ No
Unit: Yuan
Balance
Amount
between
of profit
the
Method and loss
disposal
to on
price and
determin investme
the
Remaini Book Fair Gain or e the fair nts
owned
Basis for ng value of value of loss on value of converte
net asset
determin proportio the the re-measu the d from
Proporti Way of Time share of
Name of Price of ing the n of remainin remainin rement remainin other
on of the the point of the
the the stock time stock g stock g stock of g stock compreh
stock equity losing subsidiar
subsidiar equity point of equity at equity at equity at remainin equity at ensive
equity stock control y
y disposal losing the date the date the date g stock the date gains
disposed disposal right correspo
control of losing of losing of losing equity as of losing related to
nding to
right control control control per fair control the stock
the
right right right value right and equity
disposal
major investme
investme
assumpti nts of the
nt in the
ons original
financial
subsidiar
statemen
y
t
Sino Completi
Great on of
Wall industria
(Beijing) l and
1,000,00 January
Investme 100.00% Transfer commerc 6,207.57
0.00 24, 2018
nt Fund ial
Manage registrati
ment on of
Co., Ltd. changes
Sino Completi
Great on of
Wall industria
Zhihui l and
84,000,0 August 72,235,4 24,000,0 24,000,0
Housing 56.00% Transfer commerc 44.00%
00.00 10, 2018 77.48 00.00 00.00
Property ial
(Zhanjia registrati
ng) Co., on of
Ltd. changes
304
Sino Great Wall Co., Ltd. 2018 Annual Report
Completi
Sino
on of
Great
industria
Wall
Decemb l and
Construc 90,000,0 22,054,2
60.00% Transfer er 06, commerc
tion 00.00 27.07
2018 ial
Construc
registrati
tion Co.,
on of
Ltd.
changes
Completi
Guangzh on of
ou industria
Heraben l and
October -565,924
na 1.00 100.00% Transfer commerc
16, 2018 .41
Interior ial
Design registrati
Co., Ltd. on of
changes
Completi
Shenzhe
on of
n Yatian
industria
Decorati
l and
on 5,500,00 January 15,953,3
70.00% Transfer commerc
Design 0.00 18, 2018 94.16
ial
Engineer
registrati
ing Co.,
on of
Ltd.
changes
Others
Is there disposal by steps of investments in a subsidiary through several transactions and losing control right in the current term?
□ Yes √ No
(V) Changes of Combination Scope for Other Reasons
Describing other reasons for the changes of combination scope (e.g. newly-established subsidiary, liquidation of a subsidiary) and related
matters:
305
Sino Great Wall Co., Ltd. 2018 Annual Report
6. Miscellaneous
IX. Equity in Other Subjects
(I) Equity in Subsidiaries
1. Composition of the enterprise group
Name of the Main business Shareholding proportion Acquisition
Registered place Business nature
subsidiary place Direct Indirect method
About a subsidiary’s shareholding proportion different from voting proportion:
Basis for controlling the invested party while holding half or less voting rights and not controlling the invested party despite holding half or
more voting rights:
Basis for controlling the important structured entity incorporated into the combination scope:
Basis to confirm whether a company is an agent or a consignor:
Others:
2. Main non-sole subsidiaries
Unit: Yuan
Gains and losses of Dividends declared to Equity balance of
Shares of minority
Name of the subsidiary minority shareholders in minority shareholders in minority shareholders at
shareholders
current term current term the end of the term
About minority shareholders’ shareholding proportion different from voting proportion:
Others:
3. Main financial information of important non-sole subsidiaries
Unit: Yuan
Name of Ending balance Opening balance
the Non-curr Non-curr Non-curr Non-curr
Current Total Current Total Current Total Current Total
subsidiar ent ent ent ent
assets assets liabilities liabilities assets assets liabilities liabilities
y assets liabilities assets liabilities
Unit: Yuan
Amount incurred of current term Amount incurred of last term
Cash flow Cash flow
Name of the Total amount Total amount
Operating from Operating from
subsidiary Net profit of composite Net profit of composite
income operating income operating
benefits benefits
activities activities
Others:
306
Sino Great Wall Co., Ltd. 2018 Annual Report
4. Major limitations on using corporate group assets and liquidating corporate group liabilities
5. Financial and other support for structured entities incorporated into the combined financial statement
Others:
（II） Transactions When Owned Equity Shares of a Subsidiary Changed but Still Control the Subsidiary
1. About change of owned equity shares of a subsidiary
2. Influence of transactions on parent company’s owned equity and the equity of minority shareholders
Unit: Yuan
Others:
(III). Equity in Joint Ventures and Jointly-run Enterprises
1. Important joint ventures and jointly-run enterprises
Shareholding proportion Accountant
Name of the joint arrangement
venture and Main business method for joint
Registered place Business nature
jointly-run place Direct Indirect ventures and
enterprise jointly-run
enterprise
About a joint venture or jointly-run enterprise’s shareholding proportion different from voting proportion:
Basis for holding 20% or less voting rights but exerting important influence, or holding 20% or more voting rights but not exerting important
influence:
2. Main financial information of important joint ventures
Unit: Yuan
Ending balance/Amount incurred of Opening balance/Amount incurred of last
current term term
Others:
3. Main financial information of important jointly-run enterprises
Unit: Yuan
Ending balance/Amount incurred of Opening balance/Amount incurred of last
current term term
307
Sino Great Wall Co., Ltd. 2018 Annual Report
Others:
4. Financial information summary of not important joint ventures and jointly-run enterprises
Unit: Yuan
Ending balance/Amount incurred of Opening balance/Amount incurred of last
current term term
Joint ventures: -- --
Total number of the following items
-- --
calculated by shareholding proportion
Jointly-run enterprises: -- --
Total number of the following items
-- --
calculated by shareholding proportion
Others:
5. About major limitations on joint ventures and jointly-run enterprises’ capability of capital transfer to the company
6. Excess deficit incurred by joint ventures and jointly-run enterprises
Unit: Yuan
Accumulated unconfirmed Unconfirmed losses of the
Name of the joint venture and Accumulated unconfirmed
losses accrued in the previous current term (or shared net
jointly-run enterprise losses in current term
term profits of the current term)
Others:
7. Unconfirmed undertakings related to the investments of joint ventures
8. Contingent liabilities related to the investments of joint ventures or jointly-run enterprises
(IV). Important Joint Operation
Name of the joint Shareholding proportion/Owned shares
Main business place Registered place Business nature
operation Direct Indirect
About shareholding proportion or owned shares in the joint operation different from voting proportion:
Basis for classifying a single entity as joint operation:
Others:
5. Equity in structured entities not incorporated into the combined financial statement
About structured entities not incorporated into the combined financial statement:
308
Sino Great Wall Co., Ltd. 2018 Annual Report
6. Others
X. Risks Related to Financial Instruments
XI. Disclosure of Fair Values
1. Closing fair values of assets and liabilities measured with fair value
Unit: Yuan
Item Closing fair values
Level 1 fair value 第二层次公允价值计 第三层次公允价值计
合计
measurement 量 量
I. Continuous fair value --
-- -- --
measurement
II. Non-continuous fair --
-- -- --
value measurement
2. Basis for determining market prices of items of continuous and non-continuous Level 1 fair value
measurements
3. Qualitative and quantitative information of estimation techniques and key parameters adopted for items of
continuous and non-continuous Level 2 fair value measurements
4. Qualitative and quantitative information of estimation techniques and key parameters adopted for items of
continuous and non-continuous Level 3 fair value measurements
5. Adjustments between the beginning and the closing book values and sensitivity analysis of non-observable
parameters for items of continuous Level 3 fair value measurement
6. Reasons for and policies for deciding the time for conversion between different levels for items of continuous
fair value measurement during the current period
7. Estimation technique changes during the current period and reasons for the changes
8. Fair values of financial assets and financial liabilities non-measured with fair value
9. Others
XII. Related Parties and Related Transactions
1. Information about Parent Company of the Company
Name of Parent Shareholding Voting right
Registered place Business nature Registered capital
Company proportion of proportion of
309
Sino Great Wall Co., Ltd. 2018 Annual Report
Parent Company Parent Company
to the Company to the Company
Description about Parent Company of the Company
The final controller of the Company is Chen Lue.
Other description:
2. Information about Subsidiaries of the Company
Please refer to Note VIII. 1 “Equity in Subsidiaries”.
3. Information about Joint Ventures and Associates of the Company
Please refer to Notes.
Other joint ventures or associates that had balances from related party transactions with the Company during the current period or the
previous period:
Name of joint venture or associate Relationship with the Company
Cenang Resort Sdn Bhd An associate of which the Company holds 40% shares
Other description
4. Information about Other Related Parties
Name of other related party Relationship with the Company
Shenzhen Hualian Development Investment Co., Ltd. An affiliated company of shareholder
Bai Bin, a former director of the Company, acts as its
Kunwu Jiuding Investment Management Co., Ltd.
Investment Director
310
Sino Great Wall Co., Ltd. 2018 Annual Report
Wang Lei, a former director of the Company, acts as its
Shanghai Heyi Supply Chain Management Co., Ltd.
director
Sino Great Wall (Beijing) Investment Fund Management Co.,
A company controlled by the actual controller
Ltd.
A company controlled by Wang Lei, a former director of the
Qinghai Heyi Commerce Co., Ltd.
Company
Sino Great Wall Investment (Beijing) Co., Ltd. A company controlled by Chen Lve, a director of the Company
Yang Chunling Secretary to the Board of Directors of the Company
Fang Xianzhong Vice President of the Company
Chen Lve Actual controller of the Company
Brother-in-law of the shareholder and actual controller of the
He Sen
Company
Luyi Shuguang Medical Industrial Investment Construction
A PPP Project Company controlled by the Company
Co., Ltd.
Huichang County Sino Great Wall Medical Industrial
A PPP Project Company controlled by the Company
Construction Service Co., Ltd.
Sino Great Wall (Fugou) High-speed Railways District
A PPP Project Company controlled by the Company
Investment Co., Ltd.
Anyang Sino Great Wall Medical Management Service Co.,
A PPP Project Company controlled by the Company
Ltd.
Sino Great Wall (Fugou) Jialu River Comprehensive Control
A PPP Project Company controlled by the Company
Investment Co., Ltd.
Sino Great Wall (Fugou) National Fitness Center Investment
A PPP Project Company controlled by the Company
Co., Ltd.
Sino Great Wall Shaanxi Fuyan Industrial Park Investment
A PPP Project Company controlled by the Company
Co., Ltd.
Wuchuan City Sino Great Wall People’s Hospital A PPP Project Company controlled by the Company
Wuchuan Sino Great Wall TCM Hospital Investment Co., Ltd. A PPP Project Company controlled by the Company
Guizhou Hongqiao Sino Great Wall Medical Real Estate
A PPP Project Company controlled by the Company
Investment Co., Ltd.
Other description
311
Sino Great Wall Co., Ltd. 2018 Annual Report
5. Related Transaction
（1）Related transactions for the provision and receipt of labor services for merchandises purchased and sold
Purchase goods/Service acceptance
Unit: Yuan
Content of
Approved Whether exceed the
Related Party related Current amount Last Amount
transaction quota transaction limited
transactions
Purchase goods/Service acceptance
Unit: Yuan
Content of related
Related Party Current amount Last Amount
transactions
Sino Great Wall (Fugou)
High-speed Railways District PPP project construction 108,664,988.71
Investment Co., Ltd.
Sino Great Wall (Fugou)
Fitness Center Investment PPP project construction 42,981,344.98
Co., Ltd.
Sino Great Wall People’s
Hospital Co., Ltd. in PPP project construction 21,553,398.06
Wuchuan
Sino Great Wall Traditional
Chinese Medicine Investment PPP project construction 19,149,594.63
Co., Ltd. in Wuchuan
Total 119,209,440.10 347,760,072.27
Related transactions for the provision and receipt of labor services for merchandises purchased and sold
（2）Related Trusteeship/contract and entrusted management/packaging situation
Table on company’s trusteeship/contract
Unit: Yuan
Name of Name of Type of asset Beginning date End date of Pricing basis of Confirmed
312
Sino Great Wall Co., Ltd. 2018 Annual Report
entrusting/contr trustee/contract trustee/contract of trustee/contract trustee trustee
act-out part ing party ing trustee/contract ing earning/contrac earning/contrac
ing ting earning t earning
Note of related trustee/contracting
Table on company’s trusteeship/contract-out
Unit: Yuan
Pricing basis of
Beginning date Confirmed
Name of Name of Type of asset End date of trustee
of trustee
entrusting/contr trustee/contract trustee/contract trustee/contract earning/contrac
trustee/contract earning/contrac
act-out part ing party ing ing ting-out
ing t earning
earning
Note of related trustee/contracting
（3）Related tenancy situation
The company as the lessor
Unit: Yuan
Current confirmed rental
Name of renter Type of leased assets Last confirmed rental income
income
The company as the renter:
Unit: Yuan
Current confirmed rental
Name of renter Type of leased assets Last confirmed rental income
income
Note of related tenancy situation
（4）Related guarantee situation
The company as the guarantee:
Unit: Yuan
Secured party Amount guaranteed Beginning date of End date of guarantee Finished or yet
guarantee
Sino Great Wall Co., 200,000,000.00 2017. 01 .13 2018.01.12. Yes
Ltd.
Sino Great Wall Co., 200,000,000.00 2018.01.17. 2019.01.16. No
Ltd.
Sino Great Wall Co., 800,000,000.00 2017.04.17. 2018.10.17. No
Ltd.
Sino Great Wall Co., 50,000,000.00 2017.05.17. 2018.05.16. No
Ltd.
Sino Great Wall Co., 400,000,000.00 2017.06.23. 2018.06.22. No
Ltd.
313
Sino Great Wall Co., Ltd. 2018 Annual Report
Sino Great Wall Co., 2017.07.10. 2018.07.09. No
Ltd.
Sino Great Wall Co., 2017.08.24. 2018.08.23. No
Ltd.
Sino Great Wall Co., 100,000,000.00 2017.06.28. 2018.12.21. No
Ltd.
Sino Great Wall Co., 100,000,000.00 2017.08.09. 2018.08.08. No
Ltd.
Sino Great Wall Co., 130,000,000.00 2017.08.22. 2018.08.21. Yes
Ltd.
Sino Great Wall Co., 2017.08.23. 2018.08.22. Yes
Ltd.
Sino Great Wall Co., 130,000,000.00 2018.09.30. 2019.09.29. No
Ltd.
Sino Great Wall Co., 2018.11.02. 2019.09.29. No
Ltd.
Sino Great Wall Co., 200,000,000.00 2017.08.30. 2018.08.30. Yes
Ltd.
Sino Great Wall Co., 200,000,000.00 2018.09.08. 2019.03.08. No
Ltd.
Sino Great Wall Co., 50,000,000.00 2017.11.17. 2018.11.17. No
Ltd.
Sino Great Wall Co., 200,000,000.00 2017.10.26. 2018.05.27. No
Ltd.
Sino Great Wall Co., 100,000,000.00 2016.10.27. 2017.10.27. No
Ltd.
Sino Great Wall Co., 200,000,000.00 2016.04.19. 2018.04.19. No
Ltd.
Sino Great Wall Co., 400,000,000.00 2016.06.28. 2018.06.27. No
Ltd.
Sino Great Wall Co., 300,000,000.00 2017.05.10. 2020.05.10. No
Ltd.
Sino Great Wall Co., 200,000,000.00 2017.08.03. 2019.02.03. No
Ltd.
Sino Great Wall Co., 2017.08.10. 2019.02.10. No
Ltd.
Sino Great Wall Co., 2017.08.16. 2019.02.16. No
Ltd.
Sino Great Wall Co., 2017.08.03. 2019.08.03. No
314
Sino Great Wall Co., Ltd. 2018 Annual Report
Ltd.
Sino Great Wall Co., 2017.08.10. 2019.08.10. No
Ltd.
Sino Great Wall Co., 2017.08.16. 2019.08.16. No
Ltd.
Sino Great Wall Co., 300,000,000.00 2017.09.18. 2019.09.18. No
Ltd.
Sino Great Wall Co., 2017.09.25. 2019.09.25. No
Ltd.
Sino Great Wall Co., 2017.09.29. 2019.09.29. No
Ltd.
Sino Great Wall Co., 2017.10.13. 2019.10.13. No
Ltd.
Sino Great Wall Co., 2017.10.18. 2019.10.18. No
Ltd.
Sino Great Wall Co., 160,000,000.00 2018.04.04. 2019.04.03. No
Ltd.
Sino Great Wall Co., 2018.04.04. 2019.10.03. No
Ltd.
Sino Great Wall Co., 250,000,000.00 2017.01.11. 2018.01.10. No
Ltd.
Sino Great Wall Co., 100,000,000.00 2016.09.30. 2018.09.29. No
Ltd.
Sino Great Wall Co., 101,590,000.00 2018.12.28. 2019.12.28. No
Ltd.
Sino Great Wall Co., 500,000,000.00 2016.11.12. 2017.11.12. Yes
Ltd.
Sino Great Wall Co., 700,000,000.00 2017.11.16. 2018.11.05. No
Ltd.
Sino Great Wall Co., 130,000,000.00 2016.10.28. 2017.09.28. No
Ltd.
Sino Great Wall Co., 70,000,000.00 2017.02.28. 2018.02.27. Yes
Ltd.
Sino Great Wall Co., 120,000,000.00 2018.03.12. 2019.03.11. No
Ltd.
Sino Great Wall Co., 200,000,000.00 2017.04.11. 2018.03.31. Yes
Ltd.
Sino Great Wall Co., 180,000,000.00 2017.01.03. 2018.01.02. Yes
Ltd.
315
Sino Great Wall Co., Ltd. 2018 Annual Report
Sino Great Wall Co., 120,000,000.00 2017.06.07. 2018.05.22. Yes
Ltd.
Sino Great Wall Co., 119,900,000.00 2018.08.22. 2019.08.21. No
Ltd.
Sino Great Wall Co., 400,000,000.00 2017.07.25. 2018.07.24. No
Ltd.
Sino Great Wall Co., 220,000,000.00 2017.06.30. 2018.06.30. No
Ltd.
Sino Great Wall Co., 200,000,000.00 2017.10.18. 2018.10.17. No
Ltd.
Sino Great Wall Co., 100,000,000.00 2017.11.22. 2018.11.21. No
Ltd.
Sino Great Wall Co., 84,000,000.00 2017.03.31. 2019.09.30. No
Ltd.
Sino Great Wall Co., 100,000,000.00 2017.11.30. 2018.11.30. No
Ltd.
Sino Great Wall Co., 80,000,000.00 2018.02.13. 2019.02.13. No
Ltd.
Sino Great Wall Co., 200,000,000.00 2017.12.28. 2018.12.27. No
Ltd.
Sino Great Wall 50,000,000.00 2017.09.30. 2018.09.29. No
Construction Co. LTD.
Wuhan Business 108,898,099.51 2017.01.18. 2020.01.17. No
Professional Hospital
Co., Ltd.
The company as the secured party
Unit: Yuan
Secured party Amount guaranteed Beginning date of End date of guarantee Finished or yet
guarantee
Chen Lue, Sino Great 130,000,000.00 2016.10.28. 2017.09.28. No
Wall Co., Ltd.
Sino Great Wall Co., 70,000,000.00 2017.02.28. 2018.02.27. Yes
Ltd., Chen Lue
Sino Great Wall Co., 120,000,000.00 2018.03.12. 2019.03.11. No
Ltd., Chen Lue
Sino Great Wall Co., 200,000,000.00 2017.04.11. 2018.03.31. Yes
Ltd., Chen Lue
Sino Great Wall Co., 180,000,000.00 2017.01.03. 2018.01.02. Yes
316
Sino Great Wall Co., Ltd. 2018 Annual Report
Ltd., Chen Lue, He
Feiyan
Sino Great Wall Co., 120,000,000.00 2017.06.07. 2018.05.22. No
Ltd., Chen Lue
Sino Great Wall Co., 119,900,000.00 2018.08.22. 2019.08.21. No
Ltd., Chen Lue, Sino
Great Wall Investment
(Beijing) Co., Ltd,
Suzhou Lvbang Wood
Industry Technology
Co., Ltd., Sino Great
Wall Southwest
Engineering Co., Ltd.
Chen Lue, Sino Great 400,000,000.00 2017.07.25. 2018.07.24. No
Wall Zhihui Housing
Property (Zhanjiang)
Co., Ltd., Wuhan
Business Professional
Hospital Co., Ltd.,
China Industry
Investment Co., Ltd.,
Sino Zhigu Industrial
(Yueyang) Co., Ltd.
Sino Great Wall Co., 220,000,000.00 2017.06.30. 2018.06.30. No
Ltd., Chen Lue
Sino Great Wall Co., 200,000,000.00 2017.10.18. 2019.10.17. No
Ltd., Chen Lue
Sino Great Wall Co., 100,000,000.00 2017.11.22. 2018.11.21. No
Ltd., Chen Lue
Sino Great Wall Co., 84,000,000.00 2017.03.31. 2019.09.30. No
Ltd., Chen Lue
Sino Great Wall Co., 100,000,000.00 2017.11.30. 2018.11.30. No
Ltd., Chen Lue
Beijing Zhongguancun 230,000,000.00 2016.02.22. 2018.03.22. No
Sci-tech Financing
Guaranty Co., Ltd.
Beijing Zhongguancun 150,000,000.00 2018.03.22. 2020.09.10. No
Sci-tech Financing
Guaranty Co., Ltd.
Chen Lue 5,500,000.00 2015.02.11. 2018.02.11. No
Chen Lue 5,500,000.00 2015.02.11. 2018.02.11. No
317
Sino Great Wall Co., Ltd. 2018 Annual Report
Chen Lue 5,500,000.00 2015.07.30. 2018.07.30. No
Chen Lue 5,500,000.00 2015.08.03. 2018.08.03. No
Chen Lue 12,000,000.00 2016.01.13. 2018.01.13. No
Chen Lue 12,000,000.00 2016.03.29. 2018.03.29. No
Chen Lue 12,000,000.00 2016.03.29. 2018.03.29. No
Beijing Zhongguancun 245,000,000.00 2017.10.31. 2020.10.30. No
Sci-tech Financing
Guaranty Co., Ltd.
Sino Great Wall Co., 80,000,000.00 2018.02.13. 2019.02.13. No
Ltd., Chen Lue
Sino Great Wall Co., 200,000,000.00 2017.12.28. 2018.12.27. No
Ltd., Chen Lue, He
Feiyan
Beijing Zhongguancun 150,000,000.00 2017.12.14. 2019.12.13. No
Sci-tech Financing
Guaranty Co., Ltd.
Sino Great Wall 270,000,000.00 2017.03.13. 2018.03.13. No
International
Engineering Co., Ltd.,
Chen Lue, He Feiyan
Sino Great Wall 200,000,000.00 2017.01.13. 2018.01.12. No
International
Engineering Co., Ltd.,
Chen Lue, He Feiyan
Sino Great Wall 200,000,000.00 2018.01.17. 2019.01.16. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 800,000,000.00 2017.04.17. 2018.10.17. No
International
Engineering Co., Ltd.,
Chen Lue
Chen Lue 300,000,000.00 2017.08.21. 2018.08.21. No
Sino Great Wall 50,000,000.00 2017.05.17. 2018.05.16. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 400,000,000.00 2017.06.23. 2018.06.22. No
International
Engineering Co., Ltd.,
Chen Lue
318
Sino Great Wall Co., Ltd. 2018 Annual Report
Sino Great Wall 2017.07.10. 2018.07.09. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 2017.08.24. 2018.08.23. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 200,000,000.00 2017.06.28. 2018.12.21. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 100,000,000.00 2017.08.09. 2018.08.08. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 130,000,000.00 2017.08.22. 2018.08.22. No
International
Engineering Co., Ltd.
Sino Great Wall 2017.08.23. 2018.08.22. No
International
Engineering Co., Ltd.
Sino Great Wall 130,000,000.00 2018.09.30. 2019.09.29. No
International
Engineering Co., Ltd.
Sino Great Wall 2018.11.02. 2019.09.29. No
International
Engineering Co., Ltd.
Sino Great Wall 200,000,000.00 2017.08.30. 2018.08.30. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 200,000,000.00 2018.09.08. 2018.08.30. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 50,000,000.00 2017.11.17. 2018.11.17. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 200,000,000.00 2017.10.26. 2018.05.27. No
International
319
Sino Great Wall Co., Ltd. 2018 Annual Report
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 100,000,000.00 2016.10.27. 2017.10.27. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 200,000,000.00 2016.04.19. 2018.04.19. No
International
Engineering Co., Ltd.,
Chen Lue, He Feiyan
Sino Great Wall 400,000,000.00 2016.06.28. 2018.06.27. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 300,000,000.00 2017.05.10. 2020.05.10. No
International
Engineering Co., Ltd.,
Chen Lue, He Feiyan
Sino Great Wall 200,000,000.00 2017.08.03. 2019.02.03. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 2017.08.10. 2019.02.10. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 2017.08.16. 2019.02.16. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 2017.08.03. 2019.08.03. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 2017.08.10. 2019.08.10. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 2017.08.16. 2019.08.16. No
International
Engineering Co., Ltd.,
Chen Lue
320
Sino Great Wall Co., Ltd. 2018 Annual Report
Sino Great Wall 300,000,000.00 2017.09.18. 2019.09.18. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 2017.09.25. 2019.09.25. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 2017.09.29. 2019.09.29. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 2017.10.13. 2019.10.13. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 2017.10.18. 2019.10.18. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 250,000,000.00 2017.01.11. 2018.01.10. No
International
Engineering Co., Ltd.,
Chen Lue
Chen Lue, He Feiyan 600,000,000.00 2017.04.07. 2018.04.07. Yes
Chen Lue 100,000,000.00 2017.04.28. 2018.04.28. Yes
Chen Lue, He Feiyan, 100,000,000.00 2016.09.30. 2018.09.30. Yes
Sino China Great Wall
Co., Ltd.
Shenzhen Small and 100,000,000.00 2017.01.06. 2019.01.05. Yes
Medium Enterprises
Credit Financing
Guarantee Group Co.,
Ltd.
Sino Great Wall 101,590,000.00 2018.12.28. 2019.12.28. No
International
Engineering Co., Ltd.,
Chen Lue
Sino Great Wall 500,000,000.00 2016.11.12. 2017.11.12. No
International
Engineering Co., Ltd.,
Chen Lue
321
Sino Great Wall Co., Ltd. 2018 Annual Report
Sino Great Wall 160,000,000.00 2018.04.04. 2019.10.03. No
International
Engineering Co., Ltd.,
Chen Lue
Sino China Great Wall 50,000,000.00 2017.09.30. 2018.09.29. No
Co., Ltd.
Sino China Great Wall 108,898,099.51 2017.01.18. 2020.01.17. No
Co., Ltd.
Sino China Great Wall 32,000,000.00 2018.12.21. 2019.12.20. No
Co., Ltd., Sino Great
Wall International
Engineering Co., Ltd.,
Chen Lue
Note on related guarantee
（5）Related party fund borrowing
Unit: Yuan
Related party Borrowing amount Beginning date End date Note
Sino Great Wall
Borrowing Investment (Beijing) 3,590,000.00
Co., Ltd.
Lending
（6）Related party asset transferring and debt restructing
Unit: Yuan
Content or related
Related party Current amount Last amount
transactions
322
Sino Great Wall Co., Ltd. 2018 Annual Report
（7）Reward of key management persons
Unit: Yuan
Project Current amount Last amount
（8）Other related transactions
6、Receivables and payables of related party
（1）Receivables
Unit: Yuan
Project name Related party Ending book value Beginning book value
Reserve for Reserve for
Book balance Book balance
bad-debt bad-debt
JD Capital
Investment
Management Co., 77,613.49 7,761.35 1,227,613.49 61,380.67
Ltd. and its related
party
Lhasa JD Capital
Investment
Management Co., 160,000.00 48,000.00 160,000.00 16,000.00
Ltd. and its related
party
Shanghai Heyi
Supply Chain
2,469,164.81 246,916.48 2,469,164.81 123,458.24
Management Co.,
Ltd
Huichang County
Sino Great Wall
Medical Industrial 78,155,590.97 3,907,779.55 133,278,732.83 6,663,936.64
Construction
Service Co., Ltd.
323
Sino Great Wall Co., Ltd. 2018 Annual Report
Sino Great Wall
(Fugou)
High-speed
45,962,983.37 2,298,149.17
Railways District
Investment Co.,
Ltd.
Sino Great Wall
(Fugou) Fitness
4,445,215.33 444,521.53 8,545,215.33 427,260.77
Center Investment
Co., Ltd.
Sino Great Wall
People’s Hospital
19,724,082.47 986,204.12
Co., Ltd. in
Wuchuan
Total 105,031,667.07 5,641,183.04 191,643,709.83 9,590,185.49
Other receivables
Yang Chunling 530,000.00 26,500.00
Fang Xianzhong 227,789.60 24,066.88 227,789.60 12,648.96
Sino Great Wall
Investment 9,500.00 950.00 9,500.00
(Beijing) Co., Ltd.
Sino Great Wall
Investment 1,060,000.00 53,000.00
(Beijing) Co., Ltd,
Luyi Shuguang
Medical Industrial
Investment 4,220,171.89 418,999.46 4,159,817.24 207,990.86
Construction Co.,
Ltd.
Sino Great Wall
(Fugou) Jialu
River
Comprehensive 217,569.20 3,851.67 19,464.20 973.21
Treatment
Investment Co.,
Ltd.
Sino Great Wall
Shaanxi Fuyan
Industrial Park 5,195,923.58 400,761.72 2,819,310.85 140,965.54
Investment Co.,
Ltd.
Sino Great Wall
23,773,722.22 1,188,686.11 188,000.00 9,400.00
(Fugou)
324
Sino Great Wall Co., Ltd. 2018 Annual Report
High-speed
Railways District
Investment Co.,
Ltd.
Sino Great Wall
(Fugou) Fitness
573,300.00 28,665.00
Center Investment
Co., Ltd.
Wuchuan City
Sino Great Wall
People’s Hospital 35,626,341.47 1,818,500.17 743,661.85 37,183.09
Investment CO.,
Ltd.
Wuchuan City
Sino Great Wall
People’s Hospital 343,018.86 34,301.89 343,018.86 17,150.94
Investment CO.,
Ltd.
Yanjin County
Sino Great Wall
Drainage Network 400,000.00 20,000.00
Construction Co.,
Ltd.
Total 72,177,336.82 4,018,282.90 8,510,562.60 426,312.60
（2）Payables
Unit: Yuan
Project name Related party Ending book value Beginning book value
Qinghai Heyi Commercial
3,190,000.00
Co., Ltd.
Total 3,190,000.00
Deposit received:
Qinghai Heyi Commercial 244,863,301.51 0.00
325
Sino Great Wall Co., Ltd. 2018 Annual Report
Co., Ltd.
Wuchuan City Sino Great
Wall People’s Hospital 12,360,000.00 0.00
Investment CO., Ltd.
Total 257,223,301.51
Other payables
Sino Great Wall Investment
3,590,000.00
Co., Ltd.
He Sen 200,000.00 628,600.00
Chen Lue 153,613.00
Yang Chunling 22,106.90
Anyang Sino Great Wall
Medical Management Service 159,973,316.87 100,000,016.87
Co., Ltd.
Total 163,939,036.77 100,628,616.87
7. Promise of related party
No
8. Other
XIII. Share payment
1. Overall situation of share payment
□ Applicable √ Not Applicable
2. Share payments settled in equity
□ Applicable √ Not Applicable
326
Sino Great Wall Co., Ltd. 2018 Annual Report
3. Share payments settled in cash
□ Applicable √ Not Applicable
4. Modification and termination of share payment
No
5. Other
XIV. Commitments and Contingencies
1. Important commitments
Important commitments on the balance sheet date
1) Outstanding letter of guarantee
In order to ensure the smooth completion of the project, the company, upon the request of the
employer, applied for the issuance of a performance guarantee at a commercial bank or a guarantee
institution. By December 31st of 2018, the outstanding letter of guarantee was 1,440,006,713.84
yuan, of which 1,044,136,514.99 yuan is the outstanding performance guarantee and
204,736,366.85 yuan is the outstanding advance payment guarantee.
The outstanding balance is as follows (exchange rate: 1 USD =6.8632 yuan):
Item/currency Amount of RMB Amount of USD USD-equivalent-to-RM Total
guarantee guarantee ($) B amount
Letter of guarantee that has 220,208,723.00 500,000.00 3,431,600.00 223,640,323.00
expired but has not yet been paid
in respect of which a claim has
been filed before the expiration
date ①
Letter of guarantee that has not 826,278,870.95 28,988,473.00 198,953,687.89 1,025,232,558.84
expired and has not been settled
②
Total outstanding letter of 1,046,487,593.95 29,488,473.00 202,385,287.89 1,248,872,881.84
guarantee ③ = ①+②
Unexpired letter of guarantee 180,000,000.00 180,000,000.00
which a claim has been filed
against but no payment has been
made for ④
Total outstanding letter of 400,208,723.00 500,000.00 3,431,600.00 403,640,323.00
guarantee claimed ⑤=①+④
2) The company has no other important commitments that need to be disclosed.
327
Sino Great Wall Co., Ltd. 2018 Annual Report
2. Contingencies
(1) Important contingencies on the balance sheet date
(1) Contingent liabilities arising from pending litigation/arbitration and their financial implications
1) Dispute over the loan contract with Bohai International Trust Co., Ltd.
On April 28th of 2017, the company signed a loan agreement with Bohai International Trust Co.,
Ltd., with a loan amount of 300 million yuan. Chen Lue and He Feiyan, the actual controllers of Sino
Great Wall International Engineering Co., Ltd.(the company's subsidiary), made a joint liability guarantee.
On September 25th of 2018, Bohai International Trust Co., Ltd. filed a lawsuit with the Higher People's
Court of Hebei Province, requesting the company to pay the principal of 300 million yuan, interest of
2,504,316.67 yuan (from June 21st of 2018 to the date of full payment, provisionally calculated until
August 6th of 2018), default interest of 2,212,489.89 YUAN (from July 10th of 2018 to the date of full
payment, provisionally calculated until August 6th of 2018), and liquidated damages of 60 million yuan.
Sino Great Wall International Engineering Co., Ltd., Chen Lue and He Feiyan shall bear joint and several
liabilities, and jointly bear lawyer fees of 200,000 YUAN, pre-litigation preservation fees of 5,000 yuan
and case acceptance fees.As of the balance sheet date, the case has not yet been concluded.
2) Dispute over the loan contract with China Industrial International Trust Limited
On July 13th of 2017, the company signed a trust loan agreement with China Industrial International
Trust Limited with a loan amount of 100 million yuan. Chen Lue, the actual controller of Sino Great Wall
International Engineering Co., Ltd.(the company's subsidiary), made a joint liability guarantee. On
October 9th of 2018, China Industrial International Trust Limited filed a lawsuit with the Higher People's
Court of Fujian Province, requesting the company to pay the principal of 100 million yuan along with
interest, default interest and compound interest (calculated from May 9th of 2018 to the actual date of
repayment by the defendant in accordance with the standards of the contract, the result of provisional
calculation until August 6th of 2018 is 2,277,354.05 yuan).Moreover, the company is requested to pay
lawyer fees of 180,000 YUAN and the legal costs of the case. Sino Great Wall International Engineering
Co., Ltd. and Chen Lue shall be jointly and severally liable. As of the balance sheet date, the case has not
yet been concluded.
3) Dispute over the loan contract with China Industrial International Trust Limited
On September 23rd of 2016, the company signed a trust loan agreement with China Industrial
International Trust Limited with a loan amount of 100 million yuan. Chen Lue and He Feiyan (actual
controllers of Sino Great Wall International Engineering Co., Ltd., the company's subsidiary) made a joint
liability guarantee. On October 9th of 2018, China Industrial International Trust Limited filed a lawsuit
with the Higher People's Court of Fujian Province, requesting the company to pay the principal of 100
million yuan along with interest, default interest and compound interest (calculated from May 9th of 2018
to the actual date of repayment by the defendant in accordance with the standards of the contract, the
result of provisional calculation until August 6th of 2018 is 957,777.78 YUAN).Moreover, the company
is requested to pay lawyer fees of 180,000 YUAN and the legal costs of the case. China Industrial
International Trust Limited is entitled to be paid in priority for the receivables under the Accounts
Receivable Pledge Contract numbered CIIT [2016] 0479XTXY and CIIT [2016] 0479XTXY2.Chen Lue
and He Feiyan shall be jointly and severally liable. As of the balance sheet date, the case has not yet been
concluded.
4) Dispute over the loan contract with Datong Securities Co., Ltd.
On April 27th of 2017, the company signed a trust loan agreement with Datong Securities Co., Ltd.,
with a loan amount of 400 million yuan. The actual loans amounted to 138.07 million YUAN. Sino Great
328
Sino Great Wall Co., Ltd. 2018 Annual Report
Wall International Engineering Co., Ltd. and its actual controllers Chen Lue and He Feiyan made a joint
liability guarantee. On September 28th of 2018, China Industrial International Trust Limited filed a
lawsuit with the Shanghai Financial Court, requesting the company to pay the principal of 134.07 million
yuan, the loan interest of 3,943,237.50 yuan from June 20th of 2018 to September 17th of 2018 based on
the principal of 134.07 million yuan, and the overdue interest at a rate of 24% as of September 17th of
2018. The guarantors shall bear joint and several liabilities and jointly bear the litigation costs. As of the
balance sheet date, the case has not yet been concluded.
5) Dispute over bill recourse right with Shenzhen Yi'an Baoli Co., Ltd.
On April 12th of 2018, the company issued 6 electronic commercial acceptance bills to Zhongcheng
Jianye Construction Co., Ltd., totaling 10 million yuan. Later, Zhongcheng Jianye Construction Co., Ltd.
transferred the bills to Shenzhen Yi'an Baoli Co., Ltd. Sino Great Wall International Engineering Co., Ltd.,
Chen Lue and He Feiyan made a joint liability guarantee. On November 27th of 2018, Shenzhen Yi'an
Baoli Co., Ltd. filed a lawsuit with the Shenzhen Longgang District People's Court, requesting the
Company to pay the principal (3 million YUAN) of the matured bill of exchange, interest of 2,416.67
yuan (from the maturity date of the bill to the date of full payment, calculated provisionally to September
30th of 2018), and fixation fees of 1,500 yuan for electronic evidence. Moreover, the company and
guarantors are requested to pay default interest of 15,000.00 yuan (from the maturity date of the bill to the
date of full payment, calculated on the basis of 3 million yuan at a rate of 5/10000 per day, provisionally
calculated until September 30th of 2018) and to jointly bear the litigation and other costs. As of the date
of balance sheet, the case has not yet been concluded.
6) Private lending dispute with Gong Lihong
On March 30, 2018, the Company and Sino Great Wall International Engineering Co., Ltd. and Chen
Lue as co-borrowers signed a loan agreement with Gong Lihong with a loan amount of 30 million yuan.
The company's subsidiary Wuhan Business Professional Hospital Co., Ltd. provided joint liability
guarantee for it. On September 29, 2018, Gong Lihong filed a lawsuit with the People's Court of Futian
District, Shenzhen, requesting the Company, Sino Great Wall International Engineering Co., Ltd., Chen
Lue and Wuhan Business Professional Hospital Co., Ltd. as co-payers to repay the principal of 30 million
yuan and an interest of 1,190,000.00 yuan (calculated according to the monthly profit of 2%, from July 25,
2018 to the date of prosecution, after which interest continues to be calculated at the monthly interest rate
of 2% to the date of actual repayment), and jointly bear attorney fees of 220,000.00 yuan, costs of
preservation of 21,833 yuan and related litigation costs. As of the date of balance sheet, the case has not
yet been concluded.
7) Financial loan contract dispute with Zhongjiang International Trust Co., Ltd.
On August 21, 2017, the company signed a trust loan agreement with Zhongjiang International Trust
Co., Ltd., with a loan amount of 300 million yuan, for which Sino Great Wall International Engineering
Co., Ltd. and its actual controller Chen Lue made joint liability guarantee and Sino Great Wall
International Engineering Co., Ltd. pledged its accounts receivable. On November 1, 2018, Zhongjiang
International Trust Co., Ltd. filed a lawsuit with the Jiangxi Higher People's Court, requesting the court to
order an early expiration of the loan and other unexpired business contracts, the company's repayment
of the principal of 300 million yuan, payment of an interest (including default interest and compound
interest) of 12,386,825.17 yuan (interest calculated tentatively to September 28, 2018), a penalty of
15,000,000.00 yuan, and bearing of all the charges, attorneys' fees, travel expenses, etc. At the same time,
Zhongjiang International Trust Co., Ltd. shall have the right to receive priority payment for the accounts
receivable under the Accounts Receivable Pledge Contract of 04728646000565579073 signed with Sino
Great Wall International Engineering Co., Ltd. The guarantor shall bear joint and several liabilities and
329
Sino Great Wall Co., Ltd. 2018 Annual Report
jointly bear the litigation expenses and maintenance costs. As of the date of balance sheet, the case has
not yet been concluded.
8) Contract dispute with Shanghai Ctrip Hongrui International Travel Service Co., Ltd. and Shanghai
Huacheng Southwest International Travel Service Co., Ltd.
On July 1, 2016, the company signed a business travel service agreement with Shanghai Ctrip
Hongrui International Travel Service Co., Ltd. and Shanghai Huacheng Southwest International Travel
Service Co., Ltd. From May to September, 2018, the company failed to pay the booked airfares on
schedule. On November 19, 2018, Shanghai Ctrip Hongrui International Travel Service Co., Ltd. and
Shanghai Huacheng Southwest International Travel Service Co., Ltd. Ltd. filed a lawsuit with the People's
Court of Changning District of Jianghai City, requesting the company to pay a total of 389,766 yuan for
air tickets and hotels in August and September 2018, and an overdue fine of 8828.22 yuan in
May-September (until the actual payment date). As of the date of balance sheet, the case has not yet been
concluded.
9) Loan contract dispute with Li Shaoxiong
At the beginning of May 2018, the company signed a loan agreement with Li Shaoxiong with a loan
amount of 50 million yuan. The loan period was three months. On October 25, 2018, Chen Lue, He
Feiyan, China Industry Investment Co., Ltd., Tang Xianyong and Sino Great Wall Group made joint and
several liability guarantees for the contract. Li Shaoxiong filed an arbitration with the Shenzhen
International Court of Arbitration, requesting the company's immediately return of the principal and
interest (based on the principal of 50 million yuan and a monthly interest of 3%; calculated from August 8,
2018 to the date of the full repayment of the principal of the loan, tentatively counted to 31.5 million yuan
on October 9, 2018) of the loan of 50 million yuan. At the same time, the company was required to pay
liquidated damages (based on the loan principal of RMB 50 million, calculated from August 8, 2018 to
the date of the full repayment of the loan principal, and tentatively counted to 3.15 million yuan on
October 9, 2018). The company was also required to bear a legal fee of 2,254,198.80 yuan and an
arbitration fee. The company, together with the guarantor, shall jointly bear the costs of preservation of
5,000 yuan, a warranty fee of 49,969.92 yuan, travel expenses, etc. As of the date of balance sheet, the
arbitral decision has not been made.
10) Loan contract dispute with Shanghai Pudong Development Bank Co., Ltd. Shen'zhen Branch
On August 29, 2017, the company signed a loan agreement with Shanghai Pudong Development
Bank Co., Ltd. Shenzhen Branch to borrow 70 million yuan from the bank. Sino Great Wall International
Engineering Co., Ltd. and the actual controller of the company, Chen Lue and He Feiyan made a joint
liability guarantee. On January 2, 2019, Shanghai Pudong Development Bank Co., Ltd. Shenzhen Branch
filed a lawsuit with Shenzhen Intermediate People's Court, requesting the Court to adjudge the company
to repay the principal of 70 million yuan and the related interest, compound interest and penalty interest
(the accrued interest as of July 5, 2018 is 177,625.00 yuan, after which the interest, default interest and
compound interest shall be collected according to the contract and relevant regulations of the People's
Bank of China). The guarantor shall bear joint and several liabilities and jointly bear the litigation
expenses. As of the date of balance sheet, the results have not yet been concluded.
11) Loan contract dispute with Bank of Ningbo Co., Ltd. Shenzhen Branch
On May 31, 2017, the company signed a loan agreement with Bank of Ningbo Co., Ltd. Shenzhen
Branch for a loan of 50 million yuan. On June 21, 2017, the company signed a Cooperation Agreement on
Guaranteed Discount of Commercial Acceptance Bills, with the maximum amount as 50 million yuan.
Chen Lue, Sino Great Wall International Engineering Co., Ltd. and Sino Great Wall Investment (Beijing)
Co., Ltd. made joint liability guarantee and pledged their respective property rights. On August 20, 2018,
330
Sino Great Wall Co., Ltd. 2018 Annual Report
Bank of Ningbo Co., Ltd. Shenzhen Branch filed a lawsuit with Shenzhen Intermediate People's Court,
requesting the Court to adjudge the company to return the principal of 44,734,233.41 yuan and the related
interest of 215,674.92 yuan (including default interest and compound interest as of July 9, 2018); adjudge
the company to return the advance of 43,236,631.80 yuan for the commercial acceptance bills and the
related default interest of 281,038.11 yuan (temporarily calculated as of July 9, 2018); adjudge the
company to repay the discounted amount of commercial acceptance bills, which is 6,763,368.20 yuan,
and the related default interest until the date of repayment; adjudge that the bank has the priority to get
repaid in light of the related pledges of the guarantors. The guarantors shall bear joint and several
liabilities and jointly bear the litigation expenses. As of the date of balance sheet, the results have not yet
been concluded.
12) Financial loan contract dispute with Xiamen International Bank Co., Ltd. Zhuhai Branch
On May 27, 2017, the company borrowed 50 million yuan from Xiamen International Bank Co., Ltd.
Zhuhai Branch but failed to repay the principal and interest after the maturity in May 2018. On July 3,
2018, Xiamen International Bank Co., Ltd. Zhuhai Branch filed a lawsuit with the People's Court of
Xiangzhou District, Zhuhai. On September 29, 2018, the Court ruled in the first instance that: the
company shall repay the principal of 44,010,311.18 yuan, the interest of 895,528.99 yuan, the default
interest of 447,764.50 yuan and compound interest of 2189.08 yuan as of September 11, 2018 to Xiamen
International Bank Co., Ltd. Zhuhai Branch; shall pay the interest, default interest and compound interest
from September 12, 2018 until the principal and interest are actually paid off (the interest is calculated on
the basis of the outstanding principal of 44,010,311.18 yuan and the interest rate of 60.9% higher than the
benchmark one-year loan interest rate, and the penalty interest and compound interest are halved). Sino
Great Wall International Engineering Co., Ltd. and Chen Lue shall be jointly and severally liable for the
relevant debts. The litigation cost of 291,661.00 yuan and the preservation fee of 5000.00 yuan shall be
jointly borne by the company and the guarantors. The company appealed to Zhuhai Intermediate People's
Court on October 19, 2018 because the Court did not consider the part that has been repaid. As of the date
of balance sheet, the results of the second instance have not yet been concluded.
13) Loan contract dispute with Shenzhen Dingsheng Trade Co., Ltd.
The company borrowed 50 million yuan from Shenzhen Guodingsheng Trade Co., Ltd. on March 10,
2018 and another 50 million yuan on March 20. The company failed to fully repay the principal and
interest upon maturity. On July 18, 2018, Shenzhen Guodingsheng Trade Co., Ltd. filed a lawsuit with
Shenzhen Intermediate People's Court. On October 15, 2018, the Court ruled in the first instance that: The
company shall repay the principal of 88,082,007.52 yuan and the overdue interest (the overdue interest as
of July 26, 2018 is 1,377,936.36 yuan, and the overdue interest as of July 27 is calculated on the basis of
the outstanding principal at an annual interest rate of 24% until the actual pay-off date) to Shenzhen
Guodingsheng Trade Co., Ltd. Sino Great Wall International Engineering Co., Ltd., Chen Lue and Li
Erlong shall be jointly and severally liable for the relevant debts. Shenzhen Guodingsheng Trade Co., Ltd.
has the priority to receive compensation from the collateral pledged by China Industry Investment Co.,
Ltd. The litigation cost of 481,167.00 yuan shall be jointly borne by the company and the guarantors. The
company appealed to the Guangdong Provincial Higher People's Court on October 8, 2018 because the
calculation of the remaining principal and interest was wrong when the Court made the judgment. As of
the date of balance sheet, the results of second instance have not yet been concluded.
14) Loan contract dispute with Ping An International Financial Leasing Co., Ltd.
On March 3, 2017, Sino Great Wall International Engineering Co., Ltd. (referred to as "International
Engineering"), the company's subsidiary, borrowed 84 million yuan from Ping An International Financial
Leasing Co., Ltd. Sino Great Wall Co., Ltd. and the actual controller Chen Lue provided joint liability
331
Sino Great Wall Co., Ltd. 2018 Annual Report
guarantee for such loan. Since Sino Great International Engineering Co., Ltd. failed to repay the principal
due on August 31, 2018 to Ping An International Financial Leasing Co., Ltd. Ping An International
Financial Leasing Co., Ltd. filed a lawsuit with the Pudong New Area People's Court in Shanghai,
requesting the Court to adjudge Sino Great International Engineering Co., Ltd. to repay the understanding
principal and interest totaling 29,050,995.68 yuan (after deducting the deposit of 12,600,00.00 yuan);
adjudge Sino Great Wall International Engineering Co., Ltd. to pay the liquidated damages (based on the
unpaid amount due for each period and as per the daily interest rate of 0.08% from the date of breach of
contract to the actual pay-off date); adjudge Sino Great Wall Co., Ltd. and Chen Lue to bear the joint and
several liabilities for repayment, Sino Great International Engineering Co., Ltd., Sino Great Wall Co., Ltd.
and Chen Lue to jointly bear the litigation cost, property preservation cost and other cost for realizing the
creditor's rights. As of the date of balance sheet, the case has not yet been heard.
15) Labor contract dispute with Lei Hongxiang
On April 17, 2015, the company's subsidiary Sino Great Wall International Engineering Co., Ltd.
(referred to as "International Engineering") signed a Construction Contracting Agreement with Lei
Hongxiang. According to the agreement, Lei Hongxiang shall be responsible for all works of water,
electricity, mason, wood and painting and the relevant added works for interior decoration of Nanjing
Poly Jiangxinzhou Zijin Masion undertaken by International Engineering. As the International
Engineering failed to pay the remaining project cost of 734,330 yuan to Lei Hongxiang, Lei Hongxiang
filed a lawsuit with the People's Court of Jianye District, requesting the Court to adjudge International
Engineering to pay the remaining project cost and liquidated damages totaling 818,688.20 yuan; adjudge
Hangzhou Yingtianxia Construction Co., Ltd., as the labor subcontractor of the project, to bear the joint
and several liability; adjudge International Engineering and Hangzhou Yingtianxia Construction Co., Ltd.
to jointly bear the litigation cost and preservation cost of the case. As of the date of balance sheet, the
results have not yet been concluded.
16) Purchase and sales contract dispute with Guangdong Haomei Aluminium Co., Ltd.
In December 2016, Sino Great Wall International Engineering Co., Ltd. (referred to "International
Engineering"), the company's subsidiary, signed an aluminum profile procurement contract with
Guangdong Haomei Aluminium Co., Ltd. As the International Engineering failed to clear the payment to
Guangdong Haomei Aluminium Co., Ltd., Guangdong Haomei Aluminium Co., Ltd. filed a lawsuit with
People's Court of Qingcheng District, Qingyuan City, requesting the Court to adjudge International
Engineering to pay the contract price of 604,034.94 yuan; adjudge International Engineering to pay the
liquidated damages (overdue interest shall be paid at 150% of the bank loan interest rate for the same
period from June 25, 2017 until it is paid off); and adjudge international engineering to bear the litigation
costs of this case. As of the date of balance sheet, the results have not yet been concluded.
17) Labor dispute with Hunan Zhongjian Construction Labor Co., Ltd.
On March 15, 2016 and in February 2017, the company's subsidiary, Sino Great Wall International
Engineering Co., Ltd. (referred to International Engineering) signed two Labor Subcontracting
Agreements with Hunan Zhongjian Construction Labor Co., Ltd. As International Engineering failed to
fulfill its obligations as agreed in the contract, Hunan Zhongjian Construction Labor Co., Ltd. filed an
arbitration with Beijing Arbitration Commission, requesting the Commission to rule to rescind the two
Labor Sub-contracting Agreements; rule International Engineering to compensate Hunan Zhongjian
Construction Labor Co., Ltd. for various loss totaling 2,515,717.43 yuan; rule International Engineering
to bear the arbitration cost of this case. As of the date of balance sheet, the arbitral decision has not been
made.
18) Construction contract dispute with Nanchang Wanda City Investment Co., Ltd.
332
Sino Great Wall Co., Ltd. 2018 Annual Report
On October 16, 2014, the company's subsidiary, Sino Great Wall International Engineering Co., Ltd.
(referred to "International Engineering") signed Subcontracting Agreement with Nanchang Wanda City
Investment Co., Ltd. and China Construction Eighth Engineering Division Corp., Ltd. (not involved in
this case). As Nanchang Wanda City Investment Co., Ltd. failed to pay the project price on schedule,
International Engineering filed an arbitration with China International Economic and Trade Arbitration
Commission, requesting the Commission to rule Nanchang Wanda City Investment Co., Ltd. to pay the
remaining project price of 6,323,181.65 yuan to International Engineering; rule Nanchang Wanda City
Investment Co., Ltd. to pay the interest of project price (from the January 12, 2018 to actual pay-off date)
to International Engineering; rule Nanchang Wandan City Investment Co., Ltd. to bear the arbitration cost
and lawyer's fee paid by International Engineering. As of the date of balance sheet, the results have not
yet been concluded.
19) Decoration contract dispute with Xi'an Vanke Kaizhou Real Estate Co., Ltd.
On March 15, 2012, Sino Great Wall International Engineering Co., Ltd. (referred to "International
Engineering"), the company's subsidiary, signed Contract on Fine Decoration of Building 14 in 1.3
Section of Qujiang Project. As Xi'an Vanke Kaizhou Real Estate Co., Ltd. failed to pay the project fund
and warranty fund on schedule, International Engineering filed a lawsuit with People's Court of Yanta
District, Xi'an City, requesting the Court to adjudge Xi'an Vanke Kaizhou Real Estate Co., Ltd. to pay the
remaining project fund of 141,849.78 yuan to International Engineering; rule Xi'an Vanke Kaizhou Real
Estate Co., Ltd. to return the amount of 151,505.41 yuan for warranty to International Engineering; Rule
Xi'an Vanke Kaizhou Real Estate Co., Ltd. to pay liquidated damages for the overdue payable balance of
the project (calculated on the basis of 141,849.78 yuan and as per the default interest rate of five-year
loan announced by the People's Bank of China, from April 10, 2015 until the actual pay-off date); rule
Xi'an Vanke Kaizhou Real Estate Co., Ltd. to pay the overdue warranty fund and liquidated damages
(calculated on the basis of 151,505.41 yuan and as per the default interest rate of the same type of loan
announced by the People's Bank of China until the actual pay-off date; of which, the part with 106,053.79
yuan as the base number should be calculated from May 30, 2014; the part with 45,451.6 yuan as the base
number should be calculated from May 30, 2017). As of the date of balance sheet, the case has not yet
been concluded.
20) Decoration contract dispute with Xi'an Vanke Kaizhou Real Estate Co., Ltd.
In December 2012, Sino Great Wall International Engineering Co., Ltd. (referred to "International
Engineering"), the company's subsidiary, signed Contract on Fine Decoration of Building 20, Building 28
and Building 29 in 2.2 Section of Qujiang Project. As Xi'an Vanke Kaizhou Real Estate Co., Ltd. failed to
pay the project fund on schedule, International Engineering filed a lawsuit with People's Court of Yanta
District, Xi'an City, requesting the Court to adjudge Xi'an Vanke Kaizhou Real Estate Co., Ltd. to pay the
remaining project fund of 836,231.53 yuan to International Engineering; adjudge Xi'an Vanke Kaizhou
Real Estate Co., Ltd. to return the warranty fund of 1,500,894.19 yuan to International Engineering;
adjudge Xi'an Vanke Kaizhou Real Estate Co., Ltd. to pay liquidated damages for the overdue payable
balance of the project (calculated on the basis of 836,231.53 yuan and as per the default interest rate of
one-year to five-year loan announced by the People's Bank of China, from April 11, 2015 until the actual
pay-off date); adjudge Xi'an Vanke Kaizhou Real Estate Co., Ltd. to pay the overdue warranty fund and
liquidated damages (calculated on the basis of 1,500,894.19 yuan and as per the default interest rate of the
same type of loan announced by the People's Bank of China until the actual pay-off date; Of which, the
part with 1,050,625.93 yuan as the base number should be calculated from June 14, 2015 to the actual
pay-off date. The liquidated damages for this part until June 13, 2018 are 320,816.13 yuan). As of the date
of balance sheet, the case has not yet been concluded.
333
Sino Great Wall Co., Ltd. 2018 Annual Report
21) Purchase and sales contract dispute with Zhejiang Jianlifang Wood Industry Co., Ltd.
On December 19, 2014, the company's subsidiary, Sino Great Wall International Engineering Co.,
Ltd. (referred to International Engineering) signed Contract on Supply and Installation of Wood Veneer
and Wood Furniture with Zhejiang Jianlifang Wood Industry Co., Ltd. After that, both parties made an
agreement on the additional works which were signed by managers of the both parties and confirmed that
such agreement is an attachment to the afore-said contract. As International Engineering failed to clear the
project fund to Zhejiang Jianlifang Wood Industry Co., Ltd., Zhejiang Jianlifang Wood Industry Co., Ltd.
filed an arbitration with Beijing Arbitration Commission, requesting the Commission to rule International
Engineering to pay the remaining project fund of 993,108.95 yuan under the Contract on Supply and
Installation of Wood Veneer and Wood Furniture and compensate Zhejiang Jianlifang Wood Industry Co.,
Ltd. for the interest loss from the agreed payment date to the actual pay-off date as per the benchmark
interest rate of the same type of loan for the same period announced by the People's Bank of China; rule
International Engineering to bear the arbitration cost and lawyer's fee totaling 38,000 yuan of this case. As
of the date of balance sheet, the arbitral decision has not been made.
22) Purchase and sales contract dispute with Shanghai Wusheng Industrial Co., Ltd.
On August 18, 2016, the company's subsidiary, Sino Great Wall International Engineering Co., Ltd.
(referred to "International Engineering") signed Asia Materials (Equipment) Subcontract Contract for
Supply with Shanghai Wusheng Industrial Co., Ltd. As International Engineering failed to clear the
payment to Shanghai Wusheng Industrial Co., Ltd., Shanghai Wusheng Industrial Co., Ltd. filed an
arbitration with Shanghai Arbitration Commission, requesting the Commission to rule International
Engineering to pay the contract price of 267,594.37 yuan to Shanghai Wusheng Industrial Co., Ltd; rule
International Engineering to pay the liquidated damages for overdue payment from May 5, 2017 to the
actual pay-off date as per the benchmark interest rate of the loan for the same period announced by the
People's Bank of China and the liquidated damages as of August 4, 2018 is 15,888.42 yuan; rule
International Engineering to bear the arbitration cost of this case; Rule International Engineering to bear
lawyer's fee of 10,000.00 yuan. As of the date of balance sheet, the arbitral decision has not been made.
23) Loan contract dispute with Gome Cinda Commercial Factoring Co., Ltd.
On February 12, 2018, Gome Cinda Commercial Factoring Co., Ltd. signed a Factoring Contract
with the Company’s subsidiary Sino Great Wall International Engineering Co., Ltd. (hereinafter referred
to as “International Engineering”) and Wuhan Jiutai Weiye Iron & Steel Co., Ltd., agreeing that within the
term of cooperation and the credit line, Wuhan Jiutai Weiye Iron & Steel Co., Ltd. may transfer its
accounts receivable for International Engineering to Gome Cinda Commercial Factoring Co., Ltd. to
apply for factoring financing. After the expiration of factoring financing, the International Engineering
will pay the interest of factoring financing to Gome Xinda Commercial Factoring Co., Ltd. On February
12, 2018, Wuhan Jiutai Weiye Iron & Steel Co., Ltd. transferred its accounts receivable of 14,564,590.97
yuan for International Engineering to Gome Cinda Commercial Factoring Co., Ltd. for factoring
financing of 11,600,000.00 yuan according to the above-mentioned Factoring Contract and signed the
Accounts Receivable Transfer Financing Application. At the same time, Wuhan Jiutai Weiye Iron & Steel
Co., Ltd. transferred a commercial acceptance bill with the International Engineering as the drawer and
the Company as the Acceptor to Gome Cinda Commercial Factoring Co., Ltd., and the commercial
acceptance bill expired on August 10, 2018. On May 28, 2018, Wuhan Jiutai Weiye Iron & Steel Co., Ltd.
transferred its accounts receivable of 27,294,442.23 yuan for International Engineering to Gome Cinda
Commercial Factoring Co., Ltd. for factoring financing of 21,800,000.00 yuan according to the
above-mentioned Factoring Contract and signed the Accounts Receivable Transfer Financing Application.
At the same time, Wuhan Jiutai Weiye Iron & Steel Co., Ltd. transferred a commercial acceptance bill
334
Sino Great Wall Co., Ltd. 2018 Annual Report
with the International Engineering as the drawer and the Company as the Acceptor to Gome Cinda
Commercial Factoring Co., Ltd., and the commercial acceptance bill expired on November 23, 2018. As
International Engineering, Wuhan Jiutai Weiye Iron & Steel Co., Ltd. and the Company did not fulfil their
respective responsibilities before the expiration of the term of factoring financing and the bill, Gome
Cinda Commercial Factoring Co., Ltd. filed a lawsuit with the People's Court of Chaoyang District,
ordering the International Engineering to pay 14,564,590.97 yuan of principal of the accounts receivable,
63,800.00 yuan of overdue interest, and 131,081.32 yuan of liquidated damages for overdue payment of
accounts receivable; ordering the International Engineering to pay 27,294,442.23 yuan of principal of the
accounts receivable, 492,922.22 yuan of interests during actual financing, 3,696.92 yuan of liquidated
damages for overdue payment of interests, 99,916.67 yuan of overdue interest, 204,708.32 yuan of
liquidated damages for overdue payment of accounts receivable; ordering the Wuhan Jiutai Weiye Iron &
Steel Co., Ltd. to pay 11,600,000.00 yuan of repurchase money and 87,000.00 yuan of default interest for
overdue repurchase; ordering Wuhan Jiutai Weiye Iron & Steel Co., Ltd. to pay 21,800,000.00 yuan of
repurchase money and 163,500.00 yuan of default interest for overdue repurchase; ordering the
International Engineering, Wuhan Jiutai Weiye Iron & Steel Co., Ltd. and the Company to undertake the
litigation costs, attorney fees, property preservation fees, security guarantee fees, travel expenses, notary
fees of the case and other costs to realized the creditor’s right. As of the balance sheet date, the case has
not been concluded.
24) Construction dispute with Changzhou Green Furniture Co., Ltd.
In May 2017, Changzhou Green Furniture Co., Ltd. and a subsidiary of the Company, Sino Great
Wall International Engineering Co., Ltd. (hereinafter referred to as the “International Engineering”) orally
agreed that Changzhou Green Furniture Co., Ltd. undertook the decoration engineering of Jinjiang
Sunshine Town Feili Bay and fine decoration and installation engineering of public area in Tower 01-A,
Xiamen Huarun Center (Plot 2013P16). It was later negotiated by both parties that Changzhou Green
Furniture Co., Ltd. withdrew from the construction, and both parties signed the Withdrawal Settlement
Agreement on September 7, 2017. As the International Engineering failed to pay the project payment,
Changzhou Green Furniture Co., Ltd., filed a lawsuit with the People's Court of Jinjiang City, Fujian
Province, ordering the International Engineering to repay 560,000.00 yuan of principal of the project
payment to Changzhou Green Furniture Co., Ltd. with a penalty of 39,680.00 yuan (calculated as of
January 5, 2018), and ordering the International Engineering to undertake the litigation costs of this case.
As of the balance sheet date, the case has not been concluded.
25) Sales contract dispute with KINGKOIL (Shanghai) Co., Ltd.
On November 22, 2016, the Company’s subsidiary Sino Great Wall International Engineering Co.,
Ltd. (hereinafter referred to as “International Engineering”) signed a Bedclothes Purchase Contract with
KINGKOIL (Shanghai) Co., Ltd. After the delivery of the goods by KINGKOIL (Shanghai) Co., Ltd., the
International Engineering failed to make the payment as agreed in the Contract. KINGKOIL (Shanghai)
Co., Ltd. filed an arbitration application with Beijing Arbitration Commission, ordering the International
Engineering to pay the repurchase price of RMB 25,466.00, and liquidated damages of RMB 1,151.20
(from January 7, 2018 to the actual payment date, temporarily calculate as of October 8, 2018 at the bank
loan interest rate for the same period) to KINGKOIL (Shanghai) Co., Ltd.; ordering the International
Engineering to bear the arbitration fee of the case. As of the balance sheet date, the case has not yet been
concluded.
26) Case of revocation of the arbitration with Beijing Yuhe Borui Culture Development Co., Ltd.
On February 14, 2017, Xiao Yang, Xue Piao, et al., on bebalf of the Company’s subsidiary, Sino
Great Wall International Engineering Co., Ltd. (hereinafter referred to as “International Engineering”)
335
Sino Great Wall Co., Ltd. 2018 Annual Report
signed a Software Procurement Contract with Beijing Yuhe Borui Culture Development Co., Ltd. Since
the International Engineering failed to pay for the remaining project payments, Beijing Yuhe Borui
Culture Development Co., Ltd. filed an arbitration application with the Beijing Arbitration Commission,
claiming the remaining project payments and the liquidated damages for overdue payment. After
arbitration, the Beijing Arbitration Commission made a ruling on August 31, 2018, rejecting the
arbitration application of Beijing Yuhe Borui Culture Development Co., Ltd. On November 27, 2018,
Beijing Yuhe Borui Culture Development Co., Ltd. decided that the Beijing Arbitration Commission had
violated the law and applied to the the Beijing Fourth Intermediate People's Court for revocation of the
arbitration. As of the balance sheet date, the case has not been concluded.
27) Supply and installation contract dispute with Dongguan Kema Decoration Furniture Co., Ltd.
On December 1, 2016, the Company’ subsidiary, Sino Great Wall International Engineering Co., Ltd.
(hereinafter referred to as “International Engineering”) and Dongguan Kema Decoration Furniture Co.,
Ltd. signed a Wood Veneer and Furniture Supply and Installation Contract. Since the International
Engineering owed Dongguan Kema Decoration Furniture Co., Ltd. the contract payment of 771,387.98
yuan and refused to pay it at the repeated urging by Dongguan Kema Decoration Furniture Co., Ltd.,
Dongguan Kema Decoration Furniture Co., Ltd. filed an arbitration application with the Beijing
Arbitration Commission, ordering the International Engineering to pay the money immediately and
assume the economic loss caused to the applicant due to delayed payment, including the interest loss
during the capital occupation period, attorney fees and other losses incurred in realizing the creditor's
right. As of the balance sheet date, the case has not been concluded.
28) Construction contract dispute with Tong Xianfeng, Zhou wenfa v. Fan Zeyan, Sino Great Wall
International Engineering Co., Ltd. and Anhui Weike Industrial Development Co., Ltd.
In February 2016, the Company’s subsidiary, Sino Great Wall International Engineering Co., Ltd.
(hereinafter referred to as “International Engineering”) undertook the decoration engineering project of
public commercial area in Wulishan Tianjie, Yaohai District, Hefei City from Anhui Weike Industrial
Development Co., Ltd. After undertaking the project, the International Engineering illegally
subcontracted the entire paving of ground brick, toilet wall and floor tile to Fan Zeyan, who then
subcontracted part of the project to Tong Xianfeng and Zhou Wenfa. They completed related engineering
tasks at the end of 2016. However, the International Engineering and Fan Zeyan did not make the
remaining project payments as agreed in relevant agreements. In such a case, Tong Xianfeng and Zhou
wenfa filed a lawsuit to the People's Court of Yaohai District, ruling Fan Zeyan and the International
Engineering to pay the original project payments of 45,500 yuan and interests of 2,047.50 yuan. As of the
balance sheet date, the case has not been concluded.
29) Steel Parts, Bolts, Stone Pendant and Dry Hanging Adhesive Supply Contract dispute with
Beijing Huaye Xingcheng Technology Co., Ltd.
On March 2, 2017, the Company’s subsidiary, Sino Great Wall International Engineering Co., Ltd.
(hereinafter referred to as “International Engineering”) and Beijing Huaye Xingcheng Technology Co.,
Ltd. signed the Steel Parts, Bolts, Stone Pendant and Dry Hanging Adhesive Supply Contract. Since the
International Engineering failed to make the supply payment on time and still refused to pay it at the
repeated urging, Beijing Huaye Xingcheng Technology Co., Ltd. filed an arbitration application with the
Beijing Arbitration Commission, ordering the International Engineering to pay the supply payable of
172,474.07 yuan and the liquidated damages for overdue payment at 0.5% of the payable per day. As of
the balance sheet date, the case has not been concluded.
30) Sales contract dispute with Jieyang Fangyuan Stone Co., Ltd.
On August 14, 2016, the Company’s subsidiary, Sino Great Wall International Engineering Co., Ltd.
336
Sino Great Wall Co., Ltd. 2018 Annual Report
(hereinafter referred to as “International Engineering”) and Jieyang Fangyuan Stone Co., Ltd. signed a
Stone Material (Equipment) Supply and Subcontracting Contract. Due to the malicious default in
payment for goods by the International Engineering, Jieyang Fangyuan Stone Co., Ltd. filed an arbitration
application with the Guangzhou Arbitration Commission, ruling the International Engineering to pay
3,343,649.45 yuan for supply of stone materials and the liquidated damages for overdue payment at 1‰
of the actual payable per day. As of the balance sheet date, the case has not been concluded.
31) Contract dispute with Beijing Jingsheng Taihua Jinshu Jiegou Co., Ltd.
To construct the glass curtain wall for the expansion project of the Polly Airport Terminal in Ethiopia,
Sino Great Wall International Engineering Co., Ltd. and Beijing Jingsheng Taihua Jinshu Jiegou Co., Ltd.
signed the Steel Supply Contract on August 29, 2016 and January 11, 2017 respectively. Among them, the
contract signed on August 29, 2016 stipulates that the total amount of the contract is 700,000 yuan. The
actual amount settled by both parties is 753,574.75 yuan. Sino Great Wall International Engineering Co.,
Ltd. actually paid 675,000 yuan and 78,574.75 yuan is still owed. As for the contract signed on January
11, 2017, the project has been suspended due to the reason of Sino Great Wall International Engineering
Co., Ltd., resulting in that 118 pieces of Y-type steel has been processed but not delivered by the applicant,
with the value of 201,673.8 yuan. Since Y-type steel is made to order for special type of products and
cannot be used elsewhere after processing, it has become a pile of scrap. Sino Great Wall International
Engineering Co., Ltd. has not paid the above payments. Beijing Jingsheng Taihua Jinshu Jiegou Co., Ltd.
filed an arbitration application with the Beijing Arbitration Commission, requesting the International
Engineering to make the balance payment of 78,574.75 yuan stipulated in the contract signed on August
29, 2016, payment of 382,375.67 yuan in the contract signed on January 11, 2017, processing and
materials payment of products that were not delivered of 201,673.8 yuan, and pay corresponding interests
of 33,572.96 yuan (tentatively calculated at the loan interest rate of the People's Bank of China for the
same period with 662,624.22 yuan as the base value as of the second day of the last delivery date, namely
from July 14, 2017 to the date of actual payment by the respondent), and at the same time, requesting
Sino Great Wall International Engineering Co., Ltd. to pay 20,000 yuan of legal fees due to rights
protection. As of the balance sheet date, the case has not been concluded.
32）Case of Purchase Contract of Guangdong Newpearl Ceramics Group Co., Ltd.
On July 25, 2017, Sino Great Wall International Engineering Co., Ltd., Guangdong Newpearl
Ceramics Group Co., Ltd. and Poly Real Estate (Group) Co., Ltd. entered into the Contract for Supplying
Wall and Floor Tiles for the Project of 1-4 Floors of the Basement and 1-2 Floors of the Skirt Building of
Intercontinental Hotel at No. 4 Land Parcel of Pazhou Village, Guangzhou City (Guang Zhou Pa Zhou
Cun Xiang Mu He 20160037). Because Sino Great Wall International Engineering Co., Ltd. has not made
payment for the goods through Poly Real Estate (Group) Co., Ltd., which has constituted a breach of
contract, Guangdong Newpearl Ceramics Group Co., Ltd. filed a lawsuit with the People's Court of
Haizhu District, Guangzhou City, requesting Sino Great Wall International Engineering Co., Ltd. to pay a
total of RMB781,353.24 for goods and overdue interest of 13,170.68 yuan (The interest rate is calculated
based on the loan interest rate of the People's Bank of China for the same period, and is subject to upward
adjustment of 50% with reference to the overdue penalty interest rate. The date of overdue is tentatively
scheduled for November 2, 2018, and the interest is accrued up to the date on which the payment is
actually fully settled. The payment is 92 days overdue calculated from August 1, 2018 to November 2,
2018, so the overdue interest is 781353.24*4.35%*(1+50%)/360*93= 13170.68 yuan);and requesting
Sino Great Wall International Engineering Co., Ltd. to bear the legal costs of the case. As of the date of
balance sheet, the case has not yet been concluded.
33）Case of Stone Supply Contract of Lvmeiyi Company
337
Sino Great Wall Co., Ltd. 2018 Annual Report
On June 25, 2015, Lvmeiyi Horticulture Greening Engineering Co., Ltd. and Sino Great Wall
International Engineering Co., Ltd. entered into Contract for Purchasing and Partially Installing Wood
Finishes, Wood Doors, Wardrobes for Fine Decoration Project of Old Rooms and the Newly Built
Catering Complex of Jing Feng Hotel of the General Logistics Department of PLA, and Stone Products
Supply Contract. On June 27, 2015, they entered into Supplementary Agreement on the Contract for
Supplying Stones, Wall and Floor Tiles, Wooden Doors, Wardrobes, and Wood Finishes. On January 20,
2017 and May 8, 2017, the project leader team carried out the completion acceptance. At present, the
project is in actual use. The actual value of wood finishes, wooden doors and wardrobes supplied
amounted to 12,082,635.91 yuan, in which, 7,963,329.64 yuan has been paid, and 4,119,306.27 yuan is
still unpaid. The penalty amounted to 2,142,039.26 yuan (4,119,306.27*0.36/12*(17 10/30)). The project
was successfully completed and accepted on May 8, 2017. The actual value of stones supplied amounted
to 19,117,159 yuan, in which 13,910,374 yuan has been paid, and 5,206,785 yuan is still unpaid. The
penalty amounted to 2,655,460.35 yuan (5206785*0.36/12*17). The project was successfully completed
and accepted on May 8, 2017. Lvmeiyi Horticulture Greening Engineering Co., Ltd. filed an arbitration
application with the Beijing Arbitration Commission, requesting Sino Great Wall International
Engineering Co., Ltd. to pay the principal of 9,326,091.27 yuan, and penalty of 4,797,499.61 yuan,
totaling 14,123,590.88 yuan;and requesting Sino Great Wall International Engineering Co., Ltd. to
entirely bear the arbitration fees. As of the balance sheet date, the case has not yet been concluded.
34）Case of Contract Dispute with Gome Xinda
On April 26, 2018, Gome Xinda Commercial Factoring Co., Ltd., Sino Great Wall International
Engineering Co., Ltd., and Zhanjiang City Chikan Yasheng Meile Trading Co., Ltd. entered into the
Factoring Contract (No. GMBL-GBL-180420-BJ-YSML-001), pursuant to which, within the cooperation
period and credit line, Zhanjiang City Chikan Yasheng Meile Trading Co., Ltd. can transfer its accounts
receivable due from Sino Great Wall International Engineering Co., Ltd. to Gome Xinda Commercial
Factoring Co., Ltd. and apply for factoring financing with Gome Xinda Commercial Factoring Co., Ltd.
After the expiration of factoring financing, Sino Great Wall International Engineering Co., Ltd. will pay
the interest of factoring financing to Gome Xinda Commercial Factoring Co., Ltd. If Sino Great Wall
International Engineering Co., Ltd. fails to make full payment in time, Sino Great Wall International
Engineering Co., Ltd. shall bear the corresponding liability for breach of contract. At the same time,
Gome Xinda Commercial Factoring Co., Ltd. has the right to request Zhanjiang City Chikan Yasheng
Meile Trading Co., Ltd. to repurchase accounts receivable. If Zhanjiang City Chikan Yasheng Meile
Trading Co., Ltd. fails to repurchase accounts receivable within the specified time, it shall bear the
corresponding liability for breach of contract. On April 26, 2018, pursuant to the Accounts Receivable
Transfer Financing Application under the Factoring Contract (No.
GMBL-GBL-180420-BJ-YSML-001-1), Zhanjiang City Chikan Yasheng Meile Trading Co., Ltd.
transferred the account receivable of 39,974,980.00 yuan due from Sino Great Wall International
Engineering Co., Ltd. to Gome Xinda Commercial Factoring Co., Ltd., and applied for the factoring
financing amount of 30,000,000.00 yuan. The interest rate of the factoring financing is 11%, at an
annualized basis. The term of the factoring financing is 180 days from the date on which Gome Xinda
Commercial Factoring Co., Ltd. makes payment of factoring financing. On May 11, 2018, Gome Xinda
Commercial Factoring Co., Ltd. paid the factoring financing amount of 3,000,0000.00 yuan to Zhanjiang
City Chikan Yasheng Meile Trading Co., Ltd. On October 23, 2018, upon which the term of the factoring
financing expired, Sino Great Wall International Engineering Co., Ltd. did not pay the accounts
receivable and the interest thereon, Zhanjiang City Chikan Yasheng Meile Trading Co., Ltd. did not fulfill
the obligation of repurchase. Gome Xinda Commercial Factoring Co., Ltd. filed a lawsuit with the
338
Sino Great Wall Co., Ltd. 2018 Annual Report
People's Court of Chaoyang District, Beijing City, requesting Sino Great Wall International Engineering
Co., Ltd., pursuant to accounts receivable under the Accounts Receivable Transfer Financing Application
(No. GMBL-GBL-180420-BJ-YSML-001-1), to pay the principal of the accounts receivable of
39,974,980.00 yuan, interest of 1,512,500 yuan, overdue interest of 45,833.33 yuan (tentatively scheduled
for October 28, 2018), the penalty for overdue payment for accounts receivable of 99,937.45 yuan
(tentatively scheduled for October 28, 2018), and the penalty for overdue payment for interest of 3,781.25
yuan (tentatively scheduled for October 28, 2018), totaling 41,637,032.03 yuan. requesting Zhanjiang
City Chikan Yasheng Meile Trading Co., Ltd. to bear part of the repurchase obligation within the scope of
the principal amount of 30,000,000.00 yuan, interest of 1,512,500 yuan and default interest for overdue
repurchase of 63,025 yuan (tentatively scheduled for October 28, 2018); and requesting Sino Great Wall
International Engineering Co., Ltd. and Zhanjiang City Chikan Yasheng Meile Trading Co., Ltd. to bear
all expenses for realization of obligation right such as litigation fees, property preservation fees, and
security guarantee fees. As of the date of balance sheet, the case has not yet been concluded.
35）Case of Contract Dispute with Henan First Thermal Power Construction Co., Ltd.
In 2015, Henan First Thermal Power Construction Co., Ltd. (hereinafter referred to as Henan First
Thermal Power) and Sino Great Wall International Engineering Co., Ltd. entered into a loan agreement,
pursuant to which, Henan First Thermal Power will lend 30 million yuan to Sino Great Wall International
Engineering Co., Ltd., with a monthly interest rate of 1%, and Sino Great Wall International Engineering
Co., Ltd. shall return 30 million yuan before December 31, 2015. The interest rate will be changed to
monthly interest rate of 1.5% after the repayment is overdue. As of September 2018, Sino Great Wall
International Engineering Co., Ltd. had not repaid the amount. Therefore, Henan First Thermal Power
filed a lawsuit on September 17, 2018, requesting repayment of the principal, interest, and remittance fees
totaling 47,177,460.94 yuan. The case went on trial on December 12, 2018 and has not yet been
concluded.
36）Case of Dispute on Stone Products Supply Contract of Fujian Province Nan'an City Feiwang
Stone Arts & Crafts Co., Ltd.
On June 7, 2015, Fujian Province Nan'an City Feiwang Stone Arts & Crafts Co., Ltd. (hereinafter
referred to as Stone Company) and Sino Great Wall International Engineering Co., Ltd. entered into the
Stone Products Supply Contract, pursuant to which, Stone Company provided stones with a total value of
3,516,152.30 yuan to Sino Great Wall International Engineering Co., Ltd. From July 1, 2015 to April 26,
2016, Sino Great Wall paid a total of 2.6 million yuan to the Stone Company, and has not paid any
amount to the Stone Company since then. On October 9, 2018, the Stone Company filed an arbitration
application with the Beijing Arbitration Commission, requesting payment for the goods of 916,152.30
yuan and related interest(The interest is calculated based on the arrears, from January 10, 2016 to the date
on which the payment for goods is actually settled). The case was accepted by the Beijing Arbitration
Commission on October 29, 2018 and has not yet been concluded.
37）Case of Sales Contract Dispute with Shenzhen Strive Industrial Co., Ltd.
On March 25, 2017, Shenzhen Strive Industrial Co., Ltd. (hereinafter referred to as Industrial
Company) and Sino Great Wall International Engineering Co., Ltd. entered into a supply contract,
According to the contract, Sino Great Wall paid an advance payment of 80,000.00 yuan to the Industrial
Company. The Industrial Company provided goods worth yuan 263,963.29 to Sino Great Wall in three
batches on April 8, 2017, May 4, 2017, and May 10, 2017, respectively. Then, however, Sino Great Wall
was reluctant to pay the remaining payment. It only paid 100,000 yuan on March 8, 2018, and the
remaining payment of 83,963.29 yuan has not been paid. On October 18, 2018, the Industrial Company
filed an arbitration application with the Beijing Arbitration Commission, requesting Sino Great Wall
339
Sino Great Wall Co., Ltd. 2018 Annual Report
International Engineering Co., Ltd. to pay the remaining payment of 83,963.29 yuan, transportation
expenses, travel expenses, and cost of lost labor of 8,000.00 yuan due to the application for arbitration, as
well as arbitration fees. The case was accepted by the arbitration commission on November 2, 2018, and
has not yet been concluded.
38）Case of Contract Dispute of Shenzhen Fangyuan Ronghua Metal Engineering Co., Ltd.
On April 7, 2017, Shenzhen Fangyuan Ronghua Metal Engineering Co., Ltd. (hereinafter referred to
as Ronghua Company) and Sino Great Wall International Engineering Co., Ltd. entered into a supply and
processing contract, pursuant to which, Ronghua Company provides metal products and processing
services to Sino Great Wall, with a total value of 314,905.00 yuan. As of the date of filing the lawsuit,
Sino Great Wall only paid a processing fee of 170,000 yuan. However, as of the date of filing the lawsuit,
the one-year warranty period for the project had expired, and Sino Great Wall should pay 95% of the
processing fee. On October 25, 2018, Ronghua Company filed a lawsuit requesting Sino Great Wall to
pay the processing fee of 144,905.00 yuan, and interest of 7,684.55 yuan, as well as related litigation
costs. At present, the case has not yet been concluded.
39) Financial loan contract dispute with Baoshang Bank Limited
On January 14, 2018, Sino Great Wall signed a Loan Contract for Liquidity with Baoshang Bank
Limited, which agreed to grant a loan of 200 million yuan to Sino Great Wall for a period of 12 months,
paying interest on a monthly basis, and repaying the principal and interest of the loan in one lump sum on
the maturity date of the loan. On January 17, 2018, Baoshang Bank issued loans to Sino Great Wall. Sino
Great Wall International Engineering Co., Ltd. and its actual controllers Chen Lue and He Feiyan
provided joint liability guarantees, and at the same time agreed that Chen Lue shall not pledge the 60
million shares of Sino Great Wall held by him. On October 24, 2018, Baoshang Bank announced that the
debt had expired in advance, and the company was sued for failing to repay the above loan within the
required time. Baoshang Bank has requested the following: the court shall order Sino Great Wall to repay
the loan principal of 200 million yuan to Baoshang Bank; the court shall order Sino Great Wall to pay an
interest of 4,458,750 yuan and a compound interest of 55,890.37 yuan to Baoshang Bank, and from
November 20, 2018, the principal of the remaining loan and the remaining interest shall be used as the
basis for the company's payment of the default interest and compound interest to Baoshang Bank
respectively in accordance with the annual interest rate of 9.8755%, until the date when the debts are fully
settled; the court shall order Sino Great Wall and Chen Lue to hold jointly liabilities for the above debts;
the court shall order He Feiyan to hold jointly liabilities for the above-mentioned debts within the scope
of the joint property with Chen Lue; the court shall order the defendants to bear all the expenses paid by
the plaintiff for the recovery of the claims, such as the litigation fee, costs of preservation, the counsel fee,
etc. As of the date of balance sheet, the case has not yet been heard.
40) Leasing contract dispute with Zhejiang Huatie Construction Equipment
Sino Great Wall Southwest Construction Engineering Co., Ltd., a subsidiary of the company, signed
the Steel Pipe Leasing Contract with Zhejiang Huatie Construction Support Technology Co., Ltd., which
stipulated the rental price of the steel pipe leased goods. The quantity of the leased goods was based on
the invoice. From the date of the lessee's shipment to the date of the return of the lessor's warehouse, the
lessee shall pay 70% of the rent every 3 months and settle the entire rent within 3 months after the leased
property is removed. After the conclusion of the contract, the lessor provided the leased items such as
steel pipes and fasteners. The miscellaneous expenses incurred in the performance of the contract were
1593635.57 yuan, and no payment was made by Sino Great Wall Southwest Construction Engineering
Co., Ltd. Zhejiang Huatie Construction Support Technology Co., Ltd. filed a lawsuit, requesting:
termination of the Steel Pipe Leasing Contract; immediate payment of rental and miscellaneous fees from
340
Sino Great Wall Co., Ltd. 2018 Annual Report
Southwest Construction of 1593635.57 yuan (tentatively until March 6, 2018); immediate return of leased
goods such as steel mesh, steel pipe, crossbar, etc., or a compensation of 8084676.16 yuan for the price;
the liquidated damages for overdue payment of 112213.10 yuan (tentatively until March 6, 2018 from the
date of signing the contract; after that, the rent shall be collected on the basis of 1593635.57 yuan by one
thousandth of the amount per day until the date of payment of the rent); joint and several liabilities to be
held by Guo Xiaoyi for liquidation; and bearing of the litigation costs. As of the date of balance sheet, the
case has not yet been concluded.
41) Contract Dispute with the People's Government of Chapan Township, Yingshan County
On January 30, 2016, the company's subsidiary Sino Great Wall Southwest Construction
Engineering Co., Ltd. (formerly known as: Sichuan Dinghui Construction Co., Ltd.) signed the
Construction Contract of Small and Micro Water Conservancy Projects in Tanping Village, Chapan
Township, Yingshan County with the People's Government of Chapan Township, Yingshan County, and
was contracted to undertake the construction of small and micro water conservancy projects in Tanping
Village, Chapan Township, Yingshan County. The construction period was from February 15th, 2016 to
May 31st, 2016, and the contract price was 1862300 yuan. After the signing of the contract, the
Southwest Construction Company carried out part of the construction work, and the construction was
completely shut down in May 2017. After many unsuccessful negotiations, the People’s Government of
Chapan Township of Yingshan County sued the Southwest Construction Company and requested the
termination of the previously signed contract of the construction project, payment of liquidated damages
from the Southwest Construction Company, compensation for economic losses, and bearing of legal
costs.
42) Labor Dispute
In 2018, the Comapny's subsidiary Shenzhen Great Wall International Engineering Co., Ltd. was
submitted to arbitration for labor and personnel disputes by 51 people, including Qi Deyun, requesting the
company to pay a total of 5,068,538.15 yuan in arrears of wages, overtime, bonuses, compensation for
termination of labor relations, reimbursed expenses, etc. As of the date of balance sheet, the arbitration is
pending.
43) Dispute with Xu Zhigui over the Decoration Contract
Xu Zhigui, as the actual construction worker of the interior decoration project of Four Stars A and B
Hotels (Building B) in Wanda City, Nanchang, completed and delivered the interior mechanical and
electrical installation project to Sino Great Wall International Engineering Co., Ltd. According to the
contract agreement and additional contract price, Sino Great Wall International Engineering Co., Ltd.
owed Xu Zhigui 1040716.25 yuan for the decoration work.Xu Zhigui filed a lawsuit and requested that
Nanchang Wanda City Investment Co., Ltd., Sino Great Wall International Engineering Co., Ltd. and
Hangzhou Yingtianxia Construction Co., Ltd. shall be ordered to jointly pay the arrears of 10,407,616.25
yuan for the decoration work and the interest on the arrears of decoration payments (calculated at the
same period loan interest rate of the People's Bank of China from March 11, 2016 to the time of payment
of the arrears), and to jointly bear the litigation fees.
(2) Contingent liabilities formed by providing debt guarantees to other enterprises/institutions and
their financial implications.
(2) Important contingencies not required to be disclosed by the company shall also be explained
The company does not have important contingencies that need to be disclosed.
341
Sino Great Wall Co., Ltd. 2018 Annual Report
3. Others
XV. Matters after the balance sheet date
1. Important non-adjusting events
Unit: Yuan
Item Contents effects on financial conditions Reasons for inestimable
and operating results effects
2. Profit distribution
Unit: Yuan
3. Sales return
4. Description of other events after the balance sheet date
XVI. Other important events
1. Correction of accounting errors in the prior period
(1) Retrospective restatement method
Unit: Yuan
Correction contents of the
Report items of various
accounting errors Treatment procedure Cumulative effects
affected comparative periods
(2) Prospective application method
Correction contents of the accounting Reasons for adopting prospective
Approval procedure
errors application method
Company expenses disbursed by means
The amount is of no significant
except for the personal card accounts of Resolution of the board of directors
importance
the actual controllers and senior executives
342
Sino Great Wall Co., Ltd. 2018 Annual Report
2. Debt restructuring
3. Asset replacement
(1) Non-monetary asset exchange
(2) Other asset replacement
4. Annuity plan
5. Discontinued operation
Unit: Yuan
Discontinued operation
Item Revenue Expense Total profit Income tax expense Net profit profits attributable to the
owner of the parent company
Other notes
6. Segment information
(1) Determination basis and accounting policy of the reporting segments
Accounting policy of the reporting segments:
As businesses in domestic architectural decoration, outbound architectural decoration and medical sectors
are not associated with each other, there is no price transfer among the segments; medical businesses are
operated by the Company and independent subsidies. Outbound architectural decoration business shall be
accounted by overseas companies according to regions in which the projects under construction is located
by establishing independent account sets for 8 main projects in Qatar, Kuwait, Cambodia, Sri Lanka,
Malaysia, Myanmar, Maldives and Saipan. There are no expenses indirectly attributable to various
segments to be apportioned. And outbound architectural decoration business data also consist of financial
figures from the account sets of the above 8 main projects.
Domestic architectural Outbound architectural Medical
Item Offset Total
decoration sector decoration sector sector
Current Last Curr Last Curre Current Last Current Last
343
Sino Great Wall Co., Ltd. 2018 Annual Report
period period ent perio nt period period period perio
perio d perio d
d d
I. I.
1,713,614,392. 4,055,226,176. 617,181,344.1 2,747,112,360. 135,685,751. 1,713,614,392. 4,055,226,176. 2,496,411,771 6,497,124,980.
Operating Operating
65 75 8 43 60 65 75 .38 52
income income
Of which: Of which:
foreign 1,713,614,392. 4,055,226,176. 617,181,344.1 2,747,112,360. 135,685,751. foreign 1,713,614,392. 4,055,226,176.
trade 65 75 8 43 60 trade 65 75
income income
Income Income
6,497,124,980.
from from
52
inter-segm inter-segm
ent trade ent trade
2,518,924,719 4,886,354,499.
II. 1,823,342,781. 3,376,128,111 561,946,596.4 1,850,501,055 99,316,403.4 II. 1,823,342,781. 3,376,128,111 .23 66
Operating 16 .31 0 .12 9 Operating 16 .31
cost cost
Of which: Of which:
1,823,342,781. 3,376,128,111 561,946,596.4 1,850,501,055 99,316,403.4 1,823,342,781. 3,376,128,111
foreign foreign
16 .31 0 .12 9 16 .31
trade cost trade cost
Cost of Cost of
4,886,354,499.
inter-segm inter-segm
66
ent trade ent trade
Ⅲ. Asset Ⅲ. Asset
233,324,136.1 445,662,546. 10,313,351 233,324,136.1 562,914,387.9 323,067,604.8
impairment 90,665,168.24 92,834,249.44 impairment 90,665,168.24
8 73 .51 8 0 6
loss loss
Ⅳ. Ⅳ. 37,225,793.86 18,664,799.34
Depreciat Depreciat
25,439,978.2 13,617,861 25,439,978.2
ion and 8,485,049.12 3,297,464.80 2,669,193.11 ion and 8,485,049.12
9 .75 9
amortizati amortizati
on costs on costs
V. Total -1,454,805,513 -353,395,19 616,507,925.7 -15,055,00 V. Total -1,454,805,513 -1,819,685,02 663,236,724.4
-3,420,438.20 -3,420,438.20
profit .15 0.80 4 6.40 profit .15 7.26 8
Ⅵ. Income Ⅵ. Income
-31,794,530. 2,561,747. -3,162,256.01 11,921,876.40
tax 27,790,032.39 92,409.54 10,327,779.55 tax 27,790,032.39 92,409.54
69 82
expense expense
Ⅶ. Net -1,482,595,545 -321,600,66 606,950,602.7 -17,616,75 Ⅶ. Net -1,482,595,545 -1,816,522,77 651,314,841.4
-3,512,847.74 -3,512,847.74
profit .54 0.11 5 4.22 profit .54 1.25 5
Ⅷ. Total 14,713,980,506 16,528,958,963 4,092,433,748 4,411,681,112. 348,963,251. Ⅷ. Total 14,713,980,506 16,528,958,963 9,763,085,782. 21,254,377,131
assets .82 .06 .17 49 61 assets .82 .06 40 .56
Ⅸ. Total 12,593,571,839 16,505,938,299 2,511,243,436 4,414,287,247. 301,650,637. Ⅸ. Total 12,593,571,839 16,505,938,299 9,596,028,675. 15,743,967,165
344
Sino Great Wall Co., Ltd. 2018 Annual Report
liabiliteis .66 .90 .32 85 75 liabiliteis .66 .90 32 .45
（(2) Financial information of reporting segments
Unit:
YuanItem
(3) If the Company lacks reporting segments or is not allowed to disclose total assets and total liabilities of the
reporting segments, please provide reasons
(4) Other notes
7. Other important transactions and events affecting investors' decisions
8. Others
XVII. Notes to main items on the Financial Statements of the parent company
1. Notes receivable and accounts receivable
Unit: Yuan
Item Closing balance Beginning balance
(1) Notes receivable
1) Notes receivables are listed by class
Unit: Yuan
Item Closing balance Beginning balance
Bank acceptance 0.00 0.00
Trade acceptance 0.00 0.00
2) Notes receivable of the Company pledged at the end of the period
345
Sino Great Wall Co., Ltd. 2018 Annual Report
Unit: Yuan
Item Amount pledged at the end of the period
Bank acceptance 0.00
Trade acceptance 0.00
3) Notes receivable endorsed or discounted by the Company at the end of the period and undue on the balance sheet date
Unit: Yuan
Amount for which the recognition Amount for which the recognition did not
Item
terminated at the end of the period terminate at the end of the period
Bank acceptance 0.00 0.00
Trade acceptance 0.00 0.00
4) Notes converted to accounts receivable by the Company at the end of the period due to the non-performance of
the drawer
Unit: Yuan
Item Amount converted to accounts receivables at the end of the period
Trade acceptance 0.00
Other notes
(2) Accounts receivable
1) Disclosure of accounts receivable by class
Unit: Yuan
Closing balance Beginning balance
Book balance Bad-debt provision Book balance Bad-debt provision
Class Book
Accruing
Proportio Proportio Accruing Book value
Amount Amount proportio value Amount Amount
n n proportion
n
Receivables with a significant individual amount and individual provision for bad debts at the end of the period:
□ Applicable √ Not applicable
Receivables for which bad-debt provision is made by aging analysis method in the set:
□ Applicable √ Not applicable
Receivables for which bad-debt provision is made by balance percentage method in the set:
□ Applicable √ Not applicable
Receivables for which bad-debt provision is made by other methods in the set:
2) Bad-debt provisions set aside, recovered or carried back during the reporting period
During the reporting period, there were altogether RMB bad-debt provision set aside and RMB bad-debt provision recovered or carried back.
Bad-debt provisions recovered or carried back in the current period with significant amount are as follows:
Unit: Yuan
346
Sino Great Wall Co., Ltd. 2018 Annual Report
Unit name Amount recovered or carried back Recovery method
3) Receivables actually written off in the current period are as follows:
Unit: Yuan
Item Amount written off
Significant receivables written off are as follows:
Unit: Yuan
Is the amount
Reasons for writing Writing-off incurred by the
Unit name Receivable nature Amount written off
off procedure connected
transaction
Notes to receivable write-off:
4) Receivables ranking top five on the ending balance list based on the concentration degree of the borrower
5) Receivables for which the recognition is terminated due to the transfer of financial assets
6) Asset and liability amounts incurred by the transfer of accounts receivables and continuing involvement
Other notes:
2. Other receivables
Unit: Yuan
Item Closing balance Beginning balance
Dividends receivable 100,000,000.00 100,000,000.00
Other receivables 2,886,852,664.14 3,590,967,483.22
Total 2,986,852,664.14 3,690,967,483.22
(1) Interests receivable
1) Classification of interests receivable
Unit: Yuan
Item Closing balance Beginning balance
2) Significant overdue interests
Unit: Yuan
Whether impairment occurs and the
Borrower Closing balance Overdue time Overdue reasons
judgment basis
Other notes:
(2) Dividends receivable
1) Dividends receivable
Unit: Yuan
Item (or the invested party) Closing balance Beginning balance
347
Sino Great Wall Co., Ltd. 2018 Annual Report
Sino Great Wall International 100,000,000.00 100,000,000.00
Engineering Co., Ltd.
Total 100,000,000.00 100,000,000.00
2) Significant dividends receivable with an aging of more than 1 year
Unit: Yuan
Whether impairment
Item (or the invested Reasons for recovery
Closing balance Aging occurs and the judgment
party) failure
basis
Sino Great Wall
The dividends are not
International Engineering 100,000,000.00 1-2
actually paid
Co., Ltd.
Total 100,000,000.00 -- -- --
Other notes:
(3) Other receivables
1) Disclosure of other receivables by class
Unit: Yuan
Closing balance Beginning balance
Bad-debt
Book balance Book balance Bad-debt provision
provision
Class Accrui
Accruing
Amoun Proport Amoun ng Amo Proport
Amount proportio
t ion t proport unt ion
n
ion
Other receivables
for which bad-debt
3,599
provision is made 2,909,9 2,886,8
100.00 23,116, ,182, 100.00 8,215,2 3,590,967
according to 69,569. 0.79% 52,664. 0.23%
% 905.63 692.3 % 09.12 ,483.22
characteristic 77 14
4
portfolio of credit
risk
Other receivables with a significant individual amount and individual provision for bad debts at the end of the period:
□ Applicable √ Not applicable
Other receivables for which bad-debt provision is made by aging analysis method in the set:
√ Applicable □ Not applicable
Unit: Yuan
Closing balance
Aging
Other receivables Bad-debt provision Accruing proportion
348
Sino Great Wall Co., Ltd. 2018 Annual Report
Sub-items within 1 year
Within 1 year 204,032,509.97 10,201,625.50 5.00%
Sub-total (within 1 year) 204,032,509.97 10,201,625.50 5.00%
1 - 2 years 116,005,431.09 11,600,543.11 10.00%
2 - 3 years 4,382,456.75 1,314,737.03 30.00%
Total 324,420,397.81 23,116,905.63
Notes to the determination basis for the set:
Other receivables for which bad-debt provision is made by balance percentage method in the set:
□ Applicable √ Not applicable
Other receivables for which bad-debt provision is made by other methods in the set:
□ Applicable √ Not applicable
2) Bad-debt provisions set aside, recovered or carried back during the reporting period
During the reporting period, there were altogether 14,839,141.69 yuan bad-debt provision set aside and 0.00 yuan bad-debt provision
recovered or carried back.
Bad-debt provisions carried back or recovered in the current period with significant amount are as follows:
Unit: Yuan
Unit name Amount carried back or recovered Recovery method
3) Other receivables actually written off in the current period are as follows:
Unit: Yuan
Item Amount written off
Significant other receivables written off are as follows:
Unit: Yuan
Is the amount
Nature of other Reasons for writing Writing-off incurred by the
Unit name Amount written off
receivables off procedure connected
transaction
Notes to the write-off of other receivables:
4) Classification of other receivables by nature
Unit: Yuan
Nature of payment Closing book balance Beginning book balance
Current payment between units 2,757,783,997.09 3,506,887,491.95
Reserve fund 666,710.88 142,590.46
Cash deposit and pledge 151,379,709.93 92,152,609.93
Others 139,151.87
Total 2,909,969,569.77 3,599,182,692.34
5) Other receivables ranking top five on the ending balance list based on the concentration degree of the borrower
Unit: Yuan
349
Sino Great Wall Co., Ltd. 2018 Annual Report
Proportion in the
Closing balance of
Unit name Nature of payment Closing balance Aging total closing balance
bad-debt provision
of other receivables
Sino Great Wall
International Current payment 2,394,022,760.68 Within 1 year 83.30%
Engineering Co., Ltd.
Wuhan Commercial
Worker Hospital Co., Current payment 89,886,449.10 Within 1 year 3.13%
Ltd.
Sino Great Wall
Southwest
Current payment 59,000,000.00 Within 1 year 2.05%
Construction
Engineering Co., Ltd.
Administration
Committee of Fuping
Deposit 50,000,000.00 1 - 2 years 1.74% 5,000,000.00
High-tech
Development Zone
Payment transferred
DBS Beijing Branch to the account as 50,000,000.00 Within 1 year 1.74% 2,500,000.00
deposit
Total -- 2,642,909,209.78 -- 91.87% 7,500,000.00
6) Receivables covered by governmental subsidy
Unit: Yuan
Name of government Estimated time, amount
Unit name Closing balance Closing aging
subsidy project and basis of the receipt
Nil
7) Other receivables for which the recognition is terminated due to the transfer of financial assets
Nil
8) Asset and liability amounts incurred by the transfer of other receivables and continuing involvement
Nil
Other notes:
3. Long-term equity investment
Unit: Yuan
Closing balance Beginning balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investment in
3,323,211,536.66 3,323,211,536.66 3,311,211,536.66 3,311,211,536.66
subsidies
Total 3,323,211,536.66 3,323,211,536.66 3,311,211,536.66 3,311,211,536.66
350
Sino Great Wall Co., Ltd. 2018 Annual Report
(1) Investment in subsidies
Unit: Yuan
Provision for Closing balance
Beginning Increase in the Decrease in the
Invested party Closing balance impairment in the of provision for
balance current period current period
current period impairment
Sino Great Wall
International
3,079,451,536.66 3,079,451,536.66
Engineering Co.,
Ltd.
Wuhan
Commercial
97,000,000.00 97,000,000.00
Worker Hospital
Co., Ltd.
Sino Great Wall
Medical
Investment 5,000,000.00 5,000,000.00
Management Co.,
Ltd.
Changye City
Shenzhou
10,000,000.00 10,000,000.00
Laodingshan
Industrial Co., Ltd.
Xiangfen County
Taoshan
10,000,000.00 10,000,000.00
Construction Co.,
Ltd.
Shenzhou Zhigu
Industrial
109,760,000.00 109,760,000.00
(Yueyang) Co.,
Ltd.
Ningling County
Inner Lake
Wetland
Shanty-town 5,000,000.00 5,000,000.00
Renovation
Construction Co.,
Ltd.
Chengwu County
Shenguang
Engineering 7,000,000.00 7,000,000.00
Project
Management
351
Sino Great Wall Co., Ltd. 2018 Annual Report
Co., Ltd.
Total 3,311,211,536.66 12,000,000.00 3,323,211,536.66
(2) Investment in associated companies and joint ventures
Unit: Yuan
Increase or decrease in the current period
Gains and Closing
losses on Adjustme balance
Declared
Additiona investmen nt of of
Investing Beginnin Reduced Other distributio Provision Closing
l t other provision
party g balance investmen equity n of cash for Others balance
investmen recognize comprehe for
t changes dividends impairment
t d by nsive impairme
or profits
equity income nt
method
Ⅰ. Joint venture
Ⅱ. Associated companies
(3) Other notes
4. Operating revenue and operating cost
Unit: Yuan
Amount incurred in the current period Amount incurred in last period
Item
Revenue Cost Revenue Cost
Other businesses 197,962.06 240,558.55 1,482.50
Total 197,962.06 240,558.55 1,482.50
Other notes:
5. Investment income
Unit: Yuan
Item Amount incurred in the current period Amount incurred in last period
Income from long-term equity investment
100,000,000.00
calculated by cost method
Total 100,000,000.00
352
Sino Great Wall Co., Ltd. 2018 Annual Report
6. Others
XVIII. Supplementary information
1. Breakdown of non-recurring gains and losses in the current period
√ Applicable □ Not applicable
Unit: Yuan
Item Amount Notes
Gains and loss from the disposal of non-current assets -1,181,511.77
Government subsidy recognized in current gains and losses
(excluding those closely related to the Company’s business
105,536,702.00
and granted according to the unified national standard quota
or quantity)
Other non-operating income and expenditure except for the
-397,654,450.87
aforementioned items
Influences on minority equity -19.58
Total -293,299,241.06 --
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on Information Disclosure for
Companies Publicly Issuing Securities-Non-recurring Gains and Losses and its non-recurring gain/loss items that are listed in the
Explanatory Announcement No.1 on Information Disclosure for Companies Publicly Issuing Securities-Non-recurring Gains and Losses and
have been defined as recurring gain/loss items, it is necessary to explain the reasons.
□ Applicable √ Not Applicable
2. Return on equity and earnings per share
Earnings per share
Profits in the reporting period Weighted average return on equity Basic earnings per share Diluted earnings per
(yuan/share) share (yuan/share)
Net profits attributable to common
-124.70% -1.004 -1.004
stockholders of the parent company
Net profits attributable to common
stockholders of the Company after -103.49% -0.84 -0.84
deducting non-recurring gains and loss
3. Accounting data differences under domestic and international accounting standards
(1) Differences in net profits and assets in the financial reports disclosed in accordance with International and
Chinese accounting standards
□ Applicable √ Not Applicable
353
Sino Great Wall Co., Ltd. 2018 Annual Report
（2）Differences in net profits and assets in the financial reports disclosed in accordance with overseas and
Chinese accounting standards
□ Applicable √ Not Applicable
(3) Descriptions of reasons for accounting data differences occurring under domestic and foreign accounting
standards; if adjustment is made for data audited by an overseas audit institution, the name of the institution
shall be provided
4. Others
354
Sino Great Wall Co., Ltd. 2018 Annual Report
XII. Documents Available for Inspection
Ⅰ. 2018 Financial Statements with signatures and seals of the legal representative, person in charge of the accounting work and
person in charge of the accounting institution.
Ⅱ. Original of Auditor Report with the seal of the accounting firm and signatures and seals of the CPAs.
Ⅲ. All originals of the Company documents and announcements publically disclosed on www.cninfo.com.cn, Security Times and
Hong Kong Commercial Daily.
Note: The report is prepared in Chinese and English. Should there be any discrepancy between the two versions, the Chinese version
shall prevail.
355
