Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Guangdong Provincial Expressway Development Co., Ltd. The Semi-Annual Report 2019 August 2019 1 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 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.Zheng Renfa, Compant principal , Mr. Wang Chunhua, General Manager ,Mr.Fang Zhi, Chief of the accounting owrk, Ms.Zhou Fang, Chief of the accounting organ (chief of accounting ) hereby confirm the authenticity and completeness of the financial report enclosed in this Semi-annual report. All the directors have attended the meeting of the board meeting at which this report was examined. The toll revenues of Expressway is main source of the major business income of the company , The charge standard of vehicle toll must be submitted to the same level people's government for review and approval after the transport regulatory department of province, autonomous region or municipality directly under the central government in conjunction with the price regulatory department at the same level consented upon examination. Therefore, the adjustment trend of the charge price and the charge price if has the corresponding adjustment in the future price level when the cost of the company rises still depend on the approval of relevant national policies and government departments, and the company isn't able to make timely adjustment to the charge standard in accordance with the its own operation cost or the change of market supply demand. So, the change of charge policy and the adjustment of charge standard also have influence on the expressways operated by the company to some extent. So, the charging policy changes and charges adjustment will affect the highways operation of the company. The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either. 2 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Table of Contents I. Important Notice, Table of Contents and Definitions II. Corporate Profile and Key Financial Indicators III. Business Profile IV. Performance Discussion and Analysis V. Important Events VI. Change of share capital and shareholding of Principal Shareholders VII. Situation of the Preferred Shares VIII .Information about Directors, Supervisors and Senior Executives IX. Corporate Bonds X. Financial Report XI. Documents available for inspection 3 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Definition Terms to be defined Refers to Definition Reporting period Refers to January 1, 2019 to June 30,2019 The Semi annual report of the company was approved by the board Reporting date Refers to of directors of 2019, that is, August 28, 2019 YOY Refers to Compared with January-June 2018 The Company /This Company Refers to Guangdong Provincial Expressway Development Co.,Ltd. Communication Group Refers to Guangdong Communication Group Co., Ltd. Guangdong Expressway Refers to Guangdong Expressway Co.,Ltd. Construction Company Refers to Guangdong Highway Construction Co., Ltd. Technology Company/Guangdong Refers to Guangdong Expressway Technology Investment Co., Ltd Expressway Technology Fokai Company Refers to Guangdong Fokai Expressway Co., Ltd. Fokai Branch Refers to Guangdong Fokai Expressway Co., Ltd. Fokai Branch Reconstruction and extension Project of the Reconstruction and Expansion Project of Sanbao-Shuikou Section Refers to South Section of Fokai Expressway of Fukai Expressway. Guangfo Company Refers to Guangdong Guangfo Expressway Co., Ltd. Guangdong Expressway Capital Refers to Yuegao Capital Investment (Hengqin) Co., Ltd. Guangzhu East Company Refers to Jingzhu Expressway Guangzhu Section Co., Ltd. Huiyan Company Refers to Shenzhen Huiyan Exprnessway Co., Ltd. Guangdong Provincial Expressway Development Co.,Ltd. issues Major assets restructuring Refers to shares and uses cash to purchase assets and raise counterpart funds and Related transaction 4 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 II. Corporate Profile and Key Financial Indicators 1.Company Information Stock abbreviation: Expressway A, Expressway B Stock code: 000429、200429 Stock exchange for listing Shenzhen Stock Exchange Name in Chinese 广东省高速公路发展股份有限公司 Abbreviation of Registered 粤高速 Company (if any) English name (If any) Guangdong Provincial Expressway Development Co.Ltd. English abbreviation (If GPED any) Legal Representative Zheng Renfa 2. Contact person and contact manner Name Yang Hanming Liang Jirong Name Yang Hanming Liang Jirong 46/F, Litong Plaza, No.32, Zhujiang East 45/F, Litong Plaza, No.32, Zhujiang East Contact address Road, Zhujiang New City, Tihe Disrtict , Road, Zhujiang New City, Tihe Disrtict , Guangzhou Guangzhou Tel 020-29004619 020-29004523 Fax 020-38787002 020-38787002 E-mail Hmy69@126.com 139221590@qq.com 3. Other 1. Way of contact Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or not □ Applicable √ Not applicable Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period, found more details in annual report 2018. 2. Information inquiry Whether information disclosure and preparation place changed in reporting period or not □ Applicable √ Not applicable None of the official presses, website, and place of enquiry has been changed in the semi report period. For details 5 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 please find the Annual Report 2018. 4. Summary of Accounting Data and Financial Indicators Indicate by tick mark whether the Company needs to retroactively restate any of its accounting data. √ Yes □No Retroactive adjustment or restatement of reasons Accounting policy change Same period of last year YoY+/-(%) Reporting period Before adjustment After adjustment After adjustment Operating income(yuan) 1,483,673,245.21 1,535,864,145.14 1,535,864,145.14 -3.40% Net profit attributable to the shareholders of the listed company 736,486,112.30 779,002,246.98 779,002,246.98 -5.46% (yuan) Net profit after deducting of non-recurring gain/loss attributable to 725,039,035.06 752,917,711.53 752,917,711.53 -3.70% the shareholders of listed company (yuan) Cash flow generated by business 1,050,811,097.23 817,279,588.10 819,779,588.10 28.18% operation, net(yuan) Basic earning per share(yuan/Share) 0.35 0.37 0.37 -5.41% Diluted gains per share(yuan/Share) 0.35 0.37 0.37 -5.41% Weighted average income/asset ratio 7.53% 8.60% 8.60% -1.07% (%) As at the end of As at the end of last year YoY+/-(%) the reporting Before adjustment After adjustment After adjustment period Gross assets(yuan) 16,404,770,149.44 16,295,910,774.45 16,295,910,774.45 0.67% Shareholders’ equity attributable to shareholders of the listed company 9,192,599,494.10 9,586,701,904.06 9,586,701,904.06 -4.11% (yuan) The reasons for the change of Accounting Policy and the Correction of Accounting errors On April 30, 2019, the Notice of the Ministry of Finance on Revising and Issuing the Format of Financial Statements of General Enterprises (No. 6 Finance and Accounting [2019]) issued by the Ministry of Finance indicated that the actual government subsidies received should be listed in the item "cash received from other business activities". In response to such change of accounting policy, the Company adopted the retroactive adjustment method to retroactively adjust the items reported in the financial statements from January to June 2018, affecting the item "net cash flow generated from operating activities" in the above table. 6 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 5. Differences between accounting data under domestic and overseas 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 Nil 2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards. □ Applicable √Not applicable Nil 6.Items and amount of non-current gains and losses √Applicable □Not applicable In RMB Items Amount Notes Non-current asset disposal gain/loss(including the write-off part 10,537,743.77 for which assets impairment provision is made) Govemment subsidies recognized in current gain and loss(excluding those closely related to the Company’s business 420,227.62 and granted under the state’s policies) Other non-business income and expenditures other than the -904,697.67 above Less: Amount of influence of income tax -796,580.71 Amount of influence of minority interests(after tax) -597,222.81 Total 11,447,077.24 -- 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 recorgnized as recurring gain /loss/items as defined by the information disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period. 7 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 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 No The Company is an infrastructure industry, with main business in developing and operating expressway and big bridges. It is one of the main institutions of developing expressway and big bridge in Guangdong Expressway System. The expressway industry is the industry helped by government. The Company is mainly engaged in tolling and maintenance of Guangfo Expressway, Fokai Expressway and Jingzhu Expressway Guangzhu Section investment in technological industries and provision of relevant consultation while investing in Shenzhen Huiyan Expressway Co., Ltd., Guangzhou Guanghui Expressway Co., Ltd.,Guangdong Jiangzhong Expressway Co., Ltd., Zhaoqing Yuezhao Higyway Co., Ltd.,Ganzhou Kangda Expr essway , Ganzhou Gankang Expressway Co., Ltd.,Guangdong Yueke Technology Micro Loan Co., Ltd.,Guangdo ng Guangle Expressway Co.,Ltd. and Guoyuan Securities Co., Ltd.,As of the end of the reporting period, the company ’ s share-controlled expressway is 153.71 km, and according to the equity ratio, after the conversion calculation, the total mileage is 264.41 km. Ⅱ.Major Changes in Main Assets 1. Major Changes in Main Assets Main assets Major changes The increase of 2.93% by the end of the period compared with that of the beginning, Equity assets Mainly due to the combined influence of the operation accumulation and profit distribution of the participating units. The increase of 4.10% by the end of the period compared with that of the beginning, It Fixed assets was mainly influenced by the completion and opening of the expansion project of Sanbao-Gonghe Section of Fokai Expressway and carry-forward of fixed assets. The decrease of 20.65% by the end of the period compared with that of the beginning, Intangible assets Mainly due to the impact of amortization of intangible assets. The decrease of 23.28% by the end of the period compared with that of the beginning, Construction in process It was mainly influenced by the completion and opening of the expansion project of Sanbao-Gonghe Section of Fokai Highway and carry-forward of fixed assets. The increase of 220.10% by the end of the period compared with that of the beginning, Other receivable It was mainly influenced by dividends receivable from non-participating companies. The decrease of 9.86% by the end of the period compared with that of the beginning, The main reason was that after the absorption and merger of the original wholly-owned Deferred income tax assets subsidiary company as a branch Company, the income of the branch Company this year made up part of the Company's deductible losses in previous years. 8 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 The increase of 15.95% by the end of the period compared with that of the beginning, Other Non-current assets It was mainly due to the combined influence of the advance payment for the expansion of Fokai Expressway and the increase of input tax to be deducted. 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 No The toll revenue of expressway industry mainly depends on the regional economic development. The regional economy is the critical factor that influences the traffic volume. The Guangfo expressway and the Fokai expressway, controlled by the company, are part of the National Expressway Network Planning-“Five vertical and seven horizontal”, The share-controlled Beijing-Zhuhai Guangzhu Section Expressway is a fast and convenient Expressway. and many of the company’s equity-participation expressways that are part of the main skeleton of the Guangdong Provincial Expressway Planning- “ Ten vertical and five horizontal ” , which provides a strong guarantee for stable traffic volume. Meanwhile, the regional economy is the critical factor that influences the traffic volume, as Guangdong province is the economically developed region, with years ’ continuous high growth of GDP, so that provides the stable rising demand for the company. 9 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 IV. Performance Discussion and Analysis Ⅰ.General The Company is an infrastructure industry, with main business in developing and operating expressway and big bridges. It is one of the main institutions of developing expressway and big bridge in Guangdong Expressway System. The expressway industry is the industry helped by government. In the first half of 2019, the company, according to the annual business plan established by the board of directors, soundly did a good job of each work. . In the first half of 2019, the main business income was 1.484 billion yuan, meaning 46.06% of the annual plan was completed; and the operating costs was 550 million yuan, Flat year-on-year, representing completed 38.68% of the annual plan. In the report period, the vehicle traffic and toll income of the controlled subsidiaries and joint ventures of the Company are as follows: Volume of vehicle traffic in Increase Toll income in the first Increase the first half year of 2019 /Decrease(%) half year of 2019(Ten /Decrease(% (Ten thousand vehicles) thousand) Guangfo Expressway 3,537.04 19.74% 23,017.10 2.19% Fokai Expressway 3,421.36 4.26% 61,731.41 -3.33% Jingzhu Expressway 3,483.62 -4.35% 60,184.56 -5.27% Guangzhu East Section Huiyan Expressway 2,008.31 -1.86% 11,728.74 -3.66% Guanghui Expressway 3,082.54 10.73% 90,639.13 4.44% Yuezhao Expressway 1,575.32 8.31% 27,114.74 3.18% Jiangzhong Expressway 2,736.67 6.30% 22,530.61 -1.90% Guangle Expressway 1,247.19 8.28% 155,056.82 1.45% Kangda Expressway 131.96 3.90% 12,001.61 6.16% Gangkang Expressway 216.06 15.40% 8,659.92 12.80% Overall situation: During the reporting period, the increase of Guangfo Expressway traffic volume was higher than that of toll revenue, which was mainly influenced by time-limited goods and distribution of trucks in the surrounding sections; the toll revenue of Fokai Expressway and Guangzhu Section of Jingzhu Expressway showed negative growth year on year, which was mainly influenced by the distributions of the surrounding road network. Guangfo Expressway: From July 1, 2018, a traffic restriction on trucks with more than 15 tons (7:00-22:00) has been imposed in the direction of Guangzhou (Yayao-Hengsha Section) that trucks are guided and the time period of Guangzhou-Foshan Section is adjusted. At the same time, the prohibition on goods was virtually cancelled early in this year in the Foshan First Ring and drivers can drive on the road for free. Thus, the proportion of trucks in Guangfo Section has been declined. However, Guangfo Area featured a intensive transportation of personnel and materials, complete supporting of surrounding buildings, and continuous growth 10 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 of cars and vehicles. As a consequence, the increase of traffic volume was higher than that of toll revenue. Foai Expressway: The toll revenue declined by 3.33% year on year compared with the first quarter, which was mainly affected by the following factors: on the one hand, the diversion effect of the second phase of Yunzhan Highway was apparent after the opening of the whole line; on the other hand, the tolls of Foshan First Ring Road that was originally planned to open in February were repeatedly postponed, but the entry of vehicles was unrestricted, and the strict control of over-limited and over-load transportation of trucks was not implemented. Guangzhu Section of Jingzhu Expressway: Due to the combination of multiple factors, such as limited cargo in some periods of Humen Bridge, the completion and opening of Nansha Bridge and Panguan Expressway, the traffic volume and toll revenue showed negative growth year-on-year. Gankang Expressway: traffic volume and toll revenue increased by 15.40% and 12.80% respectively year-on-year, and continued to grow on the basis of the first quarter. It is mainly affected by many factors, such as the construction of the surrounding national highway, the overhaul of sand and stone vehicles, and the restriction of the passage of some trucks. Kangda Expressway: In the first half of the year, toll revenue increased by 6.16% year-on-year in the first half of this year, which was mainly influenced by the combined influence such as the gradual stabilization of the negative impact of the Dayu Section of the 323 National Highway in 2017 and the stabilization of traffic volume. II.Main business analysis Refer to relevant contents of “1.Summarization” in “Discussion and Analysis of Management” Year-on-year change of main financial data In RMB Same period last YOY This report period Cause change year change(%) It was mainly affected by the diversion of surrounding roads that the toll revenue of Fokai Operating income 1,483,673,245.21 1,535,864,145.14 -3.40% Expressway and Guangzhu Eastern Highway has decreased. It was mainly influenced by the completion and opening of the expansion work of Sanbao- Operating cost 549,623,810.49 533,736,566.35 2.98% Gonghe Section in the Fokai Expressway, the carry-forward of the fixed assets, the depreciation increase of the road production increased. Administrative 76,975,210.47 73,109,460.94 5.29% expenses Financial 103,529,762.40 112,780,215.47 -8.20% expenses Income tax 189,696,774.05 213,221,718.85 -11.03% expenses After April 2018, the research and development R&D 2,485,173.03 -100.00% cost of "Blue Channel" project did not happen Investment again. 11 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Cash flow Mainly the corporate income tax paid by Fokai generated by 1,050,811,097.23 819,779,588.10 28.18% Company that were written off in the same period business last year operation, net Net cash flow It was mainly affected by the increase of project generated by -223,968,653.96 -138,624,695.43 61.56% payment in accordance with the expansion investment project of Fokai South Section It was mainly due to the combined influence of Net cash flow -1,220,463,569.0 the increase in dividend distribution and net generated by -911,807,967.81 -25.29% 9 increase in total fund-raising over the same financing period last year It was influenced by the increase of net cash Net increasing of inflow from operating activities, the increase of cash and cash -86,500,045.27 -541,576,561.05 -84.03% net cash outflow from investment activities and equivalents the decrease of net cash outflow from financing activities Major changes to the profit structure or sources of the Company in the reporting period □ Applicable √Not applicable Nil 12 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Breakdown of main business In RMB Increase/decrea Increase/decrea Increase/decrea se of principal se of gross Gross se of reverse in business cost Operating profit rate over operating costs profit the same period over the same revenue the same period rate(%) of the previous period of of the previous year(%) previous year year (%) (%) Industry Highway 1,449,330,681.59 521,438,699.05 64.02% -3.32% 3.27% -2.30% transportations Other 15,810,135.72 15,369,563.00 2.79% -19.95% -11.63% -9.15% Product Highway 1,449,330,681.59 521,438,699.05 64.02% -3.32% 3.27% -2.30% transportations Other 15,810,135.72 15,369,563.00 2.79% -19.95% -11.63% -9.15% Area Guangfo 230,170,928.97 31,785,031.71 86.19% 2.19% 14.43% -1.48% Expressway Fokai 617,314,121.48 325,665,097.11 47.24% -3.33% 6.25% -4.76% Expressway Jingzhu Expressway 601,845,631.14 163,988,570.23 72.75% -5.27% -3.89% -0.39% Guangzhu section Other 15,810,135.72 15,369,563.00 2.79% -19.95% -11.63% -9.15% III.Non-core business analysis √ Applicable □Not applicable In RMB Ratio in total Whether be Amount Note profit sustainable Investment It is due to the operation accumulation of 276,241,866.32 26.73% Yes income participant companies Non-operating Mainly the revenue incurred by claims for 735,359.76 0.07% No income highway property Non-operating 4,231,407.95 0.41% It was mainly the expenditure for repairing No 13 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 expenses damaged highway property facilities and the loss of abandoned fixed assets Assets disposal Income from transfer of intellectual property 13,129,094.29 1.27% No income rights related with "Blue Channel" by Yuegaoke 14 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 IV. Analysis of assets and liabilities 1.Significant changes in asset composition In RMB End of Reporting period End of same period of last year Change in Reason for As a percentage As a percentage percentage significant Amount Amount of total assets(%) of total assets(%) (%) change Monetary fund 2,038,024,951.05 12.42% 1,821,466,139.37 11.48% 0.94% Accounts 103,117,760.85 0.63% 94,111,175.70 0.59% 0.04% receivable Inventories 110,142.49 0.001% 139,076.49 0.001% 0.00% Real estate 3,442,059.61 0.02% 2,523,650.98 0.02% 0.00% Investment Long-term equity 3,237,607,137.38 19.74% 3,166,390,849.09 19.95% -0.21% investment Fixed assets 7,911,433,640.97 48.23% 7,945,714,512.39 50.07% -1.84% Construction in 835,875,363.36 5.10% 629,469,949.60 3.97% 1.13% process Long-term 3,281,725,000.00 20.00% 4,391,170,000.00 27.67% -7.67% loans 2.Asset and Liabilities Measured by Fair Value √ Applicable □Not applicable In RMB Impairment Purchase Sold Gain/Loss on Cumulative fair provisions d amount amount fair value value change Closing Items Opening amount in the in the in the change in the recorded into mount reporting reporting reporting reporting period equity period period period Financial assets Other Equity 1,694,669,6 Instrument 1,668,791,594.53 378,760,459.84 38.37 Investment Subtotal of 1,694,669,6 1,668,791,594.53 378,760,459.84 financial assets 38.37 Total of the 1,668,791,594.53 378,760,459.84 1,694,669,6 15 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 above 38.37 Financial 0.00 0.00 liabilities Did any significant change occur to the attribute of the Company’s main asset measurement during the reporting period? □ Yes √No 3. Assets right restriction till end of reporting period The balance of restricted bank deposits at the end of the period was RMB 1,221,200.00, which was the land reclamation fund deposited into the fund custody account for the reconstruction and expansion project of sanbao to Shuikou section of Fokai Expressway. 16 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 I. Investment situation 1. General √ Applicable □ Not applicable Current Investment Amount(Yuan) Same period of last year (Yuan) Change rate 489,183,814.45 273,407,293.65 78.92% 2.Condition of Acquiring Significant Share Right Investment during the Report Period √Applicable □Not applicable In RMB Gain or Whether Name of the Share Progress up Main Investm Investment Capital Investment Product Less or the to Involve Date of Disclosure Company Proportion Partner to Balance Anticipate Business ent Way Amount Source Horizon Type Current in Disclosure Index Invested % Sheet Date d Income Investment Lawsuit Announcement of Resolutions On the Huiyan of the 13th basis of the Shenzhen Co., Ltd. Yantian (Provisional) term of Huiyan Expressw Increase 38,917,650. Unallocate Port Limited October Meeting of the 33.33% operation Completed No Expressway ay capital 00 d profit Co., Company 31,2017 Eighth Board approved Co., Ltd. conversion ltd. of Directors, by the Capital Announcement government of External Investment 38,917,650. Total -- -- -- -- -- -- -- -- 0.00 0.00 -- -- -- 00 17 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 3.Situation of the Significant Non-equity Investment Undergoing in the Report Period √ Applicable □Not applicable In RMB Reasons for Accumulated Accumulated failure in Fixed Industry in Investment actual amount realized return meeting Date of Disclosure Form of assets which the amount during invested as of Source of Estimated as of the end Name Progress scheduled Disclosure( Index(If investment investment investment the reporting the end of und return of the end of progress and If any) any) or not project operates period reporting the reporting estimated period period return Announce ment of the 29th Fokai (Provisiona Expressway l) Meeting Sanbao to of the 450,266,164.4 1,948,731,008 Self and Not June 17, Shuikou Self Yes Expressway 58.87% Seventh 5 .60 Borrowing applicable 2016 section Board of Extension Directors, project Announce ment of External Investment 450,266,164.4 1,948,731,008 Total -- -- -- -- -- 0.00 0.00 -- -- -- 5 .60 18 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 4.Investment of Financial Asset (1)Securities investment √ Applicable □ Not applicable Book value Changes Purchase Sale balance at Cumulativ Gain/loss Book value Stock Initial Mode of in fair amount amount Security Security the e fair value of the balance at the end Sauce of Abbreviation investment accounting value of in the in the Accounting items category code beginning of changes in reporting of the reporting the shares : cost measurement the this this this the reporting equity period period period period period period Domesti Other equity c and Everbright 517,560,87 870,443,292 378,760,45 37,876,045 601818 FVM 896,321,336.64 Instrument Self foreign Bank 6.80 .80 9.84 .98 Investment stocks 517,560,87 870,443,292 378,760,45 37,876,045 Total -- 0.00 0.00 0.00 896,321,336.64 -- -- 6.80 .80 9.84 .98 Disclosure Date of Announcement on Securities Investment Approved by July 22,2009 the Board of Directors Disclosure Date of Announcement on Securities Investment Approved by August 7,2009 the Shareholders Meeting(If any) (2)Investment in Derivatives □ Applicable √ Not applicable The Company had no investment in derivatives in the reporting period. 19 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 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 20 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 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 In RMB Registe Company Operating Company Name Leading products and services red Total assets Net assets Operating profit Net Profit type Income capital Operating Guangfo Expressway Co., RMB Guangfo Subsidiary Ltd.(starts from Hengsha, Guangzhou, ends in 200 503,032,983.60 442,885,221.80 231,359,875.86 190,238,384.88 142,527,223.05 Expressway Xiebian, Foshan. Total length 15.7 kilometers million Jingzhu The operation and management of RMB Expressway Guangzhou-Zhuhai Expressway and provision Subsidiary 580 2,335,743,800.10 930,365,618.81 613,528,787.18 386,152,337.13 285,871,543.23 Guangzhu Section of supporting services including fueling, million Co., Ltd. salvage and supply of parts and components Guangzhu Traffic Investment Highway investment management and RMB 3 Subsidiary 2,340,653,396.83 516,610,687.09 613,528,787.18 386,102,723.36 157,179,735.01 Management Co., consultation; highway maintenance million Ltd. Investment in and construction of Guanghui Expressway Co., Ltd. and supporting Guangdong facilities, the toll collection and maintenance RMB Guanghui Sharing management of Guanghui Expressway, The 3,590,533,401.5 2.352 4,721,378,640.92 917,898,192.73 636,648,322.19 478,273,173.41 Expressway Co., company Guanghui Expressway's supporting gas 4 billion Ltd. station, salvation, vehicle maintenance, vehicle transport, catering, warehousing investment and development Subsidiaries obtained or disposed in the reporting period 21 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 □ Applicable √ Not applicable Particulars about the Mutual holding companies 1.The Company holds a 75% equity interest in the Guangfo company, the construction and operation of the Guangzhou-Foshan Expressway, including road maintenance, charges, signs, marking and other transport facilities maintenance, Vehicle rescue and other business. The current net profit increased by 50,219,596.66 yuan, a decrease of 14.95%, The main reasons for the decrease included the following factors: 1. reduction of the the toll income caused by traffic restriction of Humen Bridge, diversion of Nansha Bridge and Fanguan Highway First Phase after the opening, etc. 2. during the same period last year, the revenue from highway property disposal was confirmed to be RMB 44.72 million, which did not occur in the current period. 22 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 VIII.Structured vehicle controlled by the Company □ Applicable √ Not applicable IX. Prediction of business performance for January -September 2019 Estimation of accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warning of its material change compared with the corresponding period of the last year and explanation of reason. □ Applicable √ Not applicable X. Risks facing the Company and countermeasures The company ’ s profits mainly come from the expressway tolls revenue and the toll charging standards shall be examined by the traffic authority of the provincial, autonomous region and the direct-controlled municipality people ’ s governments together with the same-level pricing authority and then submitted to the same-level people’s government for approval. Therefore, the charging price adjustment trend and the possibility of the charging price adjustment upon rising of the commodity price and the company cost in the future are still subject to relevant national policies and the approval of the governmental department. And the company can’t adjust the charging standards promptly based on its own operation cost or the market supply-demand changes. In conclusion, the charging policies change and the charging standards adjustment have the influence on the expressway business of the company to some extent. 23 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 V. Important Events I. Annual General Meeting and Provisional Shareholders’ Meetings in the Reporting Period 1.Annual General Meeting Investor Index to disclosed Meeting Type participati Convened date Disclosure date information on ratio Annual 2018 Shareholders’ general Shareholders’ 67.59% May 20,2019 May 21,2019 www.cninfo.com.cn meeting General Meeting First provisional Provisional Shareholders’ general Shareholders’ 66.75% June 25,2019 June 26,2019 www.cninfo.com.cn meeting of 2019 general meeting 2. Preferred stockholders restored voting rights to request to convene Provisional Shareholders’ Meeting. □Applicable√Not applicable II. Proposal for profit distribution and converting capital Reserve into share actual for the reporting period □ Applicable √Not applicable For the reporting period, the Company plans not to distribute cash dividends or bonus shares or convert capital reserve into share capital. III. 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 parities. □ Applicable √Not applicable There is no commitment that has not been fulfilled by actual controller, shareholders, related parties, acquirers of the Company IV. Particulars about engagement and disengagement of CPAs firm Whether the semi-annual financial report had been audited? □ Yes √ No Not been audited. 24 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 V. Explanations given by board of directors and supervisory board regarding “ Modified auditor’s” Issued by CPAs firm for the reporting period □ Applicable √ Not applicable VI. Explanations given by Board of Directors regarding“ Modified auditor’ Report”Issued for last year □ Applicable √ Not applicable VII. Bankruptcy and restructuring □ Applicable √ Not applicable No such cases in the reporting period. VIII. Legal matters Signifieant lawsuits or arbitrations □ Applicable √ Not applicable No such cases in the reporting period. Other legal matters √ Applicable □ Not applicable Amount Litigation Forming of Litigation Litigation Date Index involved (arbitration) Basic conditions of litigation the (arbitratio (arbitration) of of (Ten judgement (arbitration) predicted n) judgement result discl disclo thousand execution debt progress and influence osure sure yuan ) condition On August 22, 2007, Guangdong Fokai Expressway Co., Ltd. filed a lawsuit with Guangzhou Maritime Court officially requiring Foshan Nanhai Yuhang Shipping Co., Ltd. and Yang Xiong to undertake the joint and several No major liabilities for the toll losses of Fokai Waiting influence on the company due to the Jiujiang collapse. for the company asset On March 7, 2014, the court made the 1,935.75 No court None conditions and first instance judgement requiring the judgement the operation defendants Foshan Nanhai Yuhang result results. Shipping Co., Ltd. and Yang Xiong to compensate the defendant Guangdong Fokai Expressway Co., Ltd. jointly for the vehicle toll revenue loss totaling 19,357,500.96 yuan. Guangdong Higher People's Court entered a judgement on 25 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 June 5, 2014 and the lawsuit terminated. By the end of the report period, the abatement of action causes are already removed and the provincial higher court restores the hearing and conducts the investigation on April 21, 2017. Now it’ s still the time waiting for the court judgement. On June 12, 2009, the 6.15 accident-causing boat owner Yang Xiong filed a lawsuit with Guangzhou Maritime Court requiring Fokai company to compensate for the boat loss and interest totaling 7.28 million yuan. During No major On December 20, 2013, the court made abatement influence on the the first instance judgement rejecting all of action company asset 728 No None litigation claims of Yang Xiong. He filed by the conditions and a lawsuit with Guangdong Higher second the operation People's Court against such sentence instance results. above, and the second instance terminated the lawsuit in May 2015. By the end of the report period, the lawsuit is still suspended without any notice from the provincial higher court. IX. Punishments and rectifications □ Applicable √ Not applicable No such cases in the reporting period. X. Credit conditions of the Company as well as its Controlling shareholder and actual Controller □ Applicable √ Not applicable XI.Equity incentive plans, employee stock ownership plans or other incentive measures for employees □ Applicable √ Not applicable No such cases in the reporting period. XII.Material related transactions 1. Related transactions in connection with daily operation □ Applicable √ Not applicable 26 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 No such cases in the reporting period. 2. Related-party transactions arising from asset acquisition or sold □Applicable √ Not applicable No such cases in the reporting period. 3. Related-party transitions with joint investments □Applicable √ Not applicable No such cases in the reporting period. 4. Credits and liabilities with related parties √Applicable □ Not applicable Is there a non-operational relationship between creditor's rights and liabilities? □Yes √No No such cases in the reporting period. 5. Other significant related-party transactions √ Applicable □Not applicable 1.The 23th (provisional) meeting of the Eighth board of directors of the Company examined and adopted the Proposal on Transferring the Intellectual Property Assets Group of the “Blue Channel” by Guangdong Expressway Technology Investment Co., Ltd., a wholly-owned subsidiary. It is agreed that Guangdong Expressway Technology Investment Co., Ltd., a wholly-owned subsidiary of the Company, will transfer the “Blue Channel” related intellectual property asset group to Guangdong Union Electronic Service Co., Ltd. by way of agreement transfer, with the assessed value of RMB 19,881,200.00 as the transfer price. 2.The 24th (provisional) meeting of the Eighth board of directors of the Company examined and adopted the Proposal Concerning the Company Daily Associated Transactions Predicted of 2019 . Agree on the predicted daily associated transactions for the company headquarters, wholly-owned and holding subsidiaries of 2019, whose amount in total is RMB 49.4265 million . The website to disclose the interim announcements on significant related-party transactions Date of disclosing provisional Description of the website for disclosing Description of provisional announcement announcement provisional announcements Announcement of related party transaction January 23,2019 www.cninfo.com.cn Estimates announcement of the Daily March 29,2019 www.cninfo.com.cn Related Party Transaction of 2019 27 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 XIII. Particulars about the non-operating occupation of funds by the Controlling shareholder and other related parties of the Company □Applicable √ Not applicable The company was not involved in the non-operating occupation of funds by the controlling shareholder and other related parties during the reporting period. XIV. Significant contracts and execution 1.Entrustments, contracting and leasing (1)Entrustment □Applicable √ Not applicable No such cases in the reporting period. (2)Contracting □Applicable √ Not applicable No such cases in the reporting period. (3)Leasing □Applicable √ Not applicable No such cases in the reporting period. 2.Guarantees √Applicable□Not applicable 28 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (1)Guarantees Ten thousand yuan External guarantees made by the Company(Exclude those made for subsidiaries) Relevant Guarantee Date of disclosure Complete for Amount happening Actual Name of the date/No. of Guarantee Guarantee implemen associated of (Date of mount of Company the type term tation parties Guarantee signing guarantee guaranteed or not (Yes or agreement) amount no) Guangdong 2012.9.25 Communicati May 172,500 May 31,2013 172,500 Pledge -2020.3.2 No Yes on Group 11,2012 5 Co.,Ltd Total amount of approved Total actually amount of external guarantee in the 0 external guarantee in the 0 report period(A1) report period(A2) Total amount of approved Total actually amount of external guarantee at the end 172,500 external guarantee at the end 172,500 of the report period(A3) of the report period(A4) Guarantee of the Company for the controlling subsidiaries Relevant Date of Complete Guarantee disclosure Name of the Amount happening Actual implement for date/No. of Guarantee Guarantee Company of (Date o mount of ation associated the type term guaranteed guarantee signing guarantee or parties guaranteed agreement) not (Yes or no) amount Guarantee of the subsidiaries for the controlling subsidiaries Relevant Date of Complete Guarantee disclosure Name of the Amount happening Actual implement for date/No. of Guarantee Guarantee Company of (Date o mount of ation associated the type term guaranteed guarantee signing guarantee or parties guaranteed agreement) not (Yes or no) amount Total of Company’s guarantee(namely total of the large three aforementioned) Total of guarantee in the Total of actual guarantee in Period 0 0 the Period(A2+B2+C2) (A1+B1+C1) Total of guarantee at 172,500 Total of actual guarantee at 172,500 29 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Period-end(A3+B3+C3) Period-end (A4+B4+C4) The proportion of the total amount of actually guarantee in 18.77% the net assets of the Company(that is A4+B4+C4) Including Amount of guarantee for shareholders, actual controller and 172,500 its associated parties(D) Description of the guarantee with complex method (2)Illegal external guarantee □ Applicable √ Not applicable No such cases in the reporting period. 3. Other significant contract □ Applicable √ Not applicable No such cases in the reporting period. XV. Social responsibilities 1.Major environmental protection The Listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department No The Company's main business is highway operation and management, which does not belong to the key pollutant discharge units announced by the environmental protection department. 2. Measures Taken for Targeted Poverty Alleviation (1) Targeted poverty alleviation plans The company has no precise social responsibility for poverty alleviation in theperiodand bas no follow-up plan either. (2)Summary of related work done in the reporting period Nil 30 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (3)Results of Targeted measures Nil (4)Subsequent plans Nil XVI.Other material events √ Applicable □Not applicable The annual shareholders' meeting of the Company held on May 20, 2019 examined and Adopted the Bill on the Change of Commitments Related to the Company's Major Asset Restructuring and agreed the commitment made by the Company that the land and property management rights registration procedures of Guangdong Fokai Expressway Co., Ltd. and Jingzhu Expressway Guangzhu Section Co., Ltd. in the major asset reorganization of Guangdong Communication Group Co., Ltd. has been changed in 2016 by issuing shares and paying cash to purchase assets and raise matching funds. Relevant Queries on the Disclosure Website of the Interim Report on this Matter Description of the website for Date of disclosing provisional Description of provisional announcement disclosing provisional announcement announcements Announcement of Resolutions of the 15th (Provisional) April 27,2019 www.cninfo.com.cn Meeting of the Eighth Board of Directors Announcement of Resolutions of the 14th (Provisional) April 27,2019 www.cninfo.com.cn Meeting of the Eighth Board of Supervisors Announcement on the Progress of Major Asset April 27,2019 www.cninfo.com.cn Restructuring Commitments and the Deadline for Controlling Shareholders to Apply for Changes in Commitments Announcement of Resolutions of the shareholders' May 21,2019 www.cninfo.com.cn general meeting of 2018 XVII. Material events of subsidiaries √Applicable □Not applicable The 23th (provisional) meeting of the Eighth board of directors of the Company examined and adopted the Proposal on Transferring the Intellectual Property Assets Group of the “Blue Channel” by Guangdong Expressway Technology Investment Co., Ltd., a wholly-owned subsidiary. It is agreed that Guangdong Expressway Technology Investment Co., Ltd., a wholly-owned subsidiary of the Company, will transfer the “Blue Channel” related intellectual property asset group to Guangdong Union Electronic Service Co., Ltd. by way of agreement transfer, 31 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 with the assessed value of RMB 19,881,200.00 as the transfer price. Relevant Queries on the Disclosure Website of the Interim Report on this Matter Description of the website for Date of disclosing Description of provisional announcement disclosing provisional provisional announcement announcements Announcement of Resolutions of the 23th (Provisional) Meeting of January 23,2019 www.cninfo.com.cn the Eighth Board of Directors Announcement of the Related Party Transaction January 23,2019 www.cninfo.com.cn VI. Change of share capital and shareholding of Principal Shareholders I.Changes in share capital 1. Changes in share capital In shares Before the change Increase/decrease(+,-) After the Change Amount Proportion Capitaliz Bo Share ation of nus allotm common Other Subtotal Quantity Proportion sha ent reserve res fund 1.Shares with conditional 1,273,271,62 60.90% -198,591 -198,591 1,273,073,036 60.89% subscription 7 1.State-owned shares 410,002,853 19.61% 29,912 29,912 410,032,765 19.61% 2.State-owned legal 652,971,967 31.23% 0 0 652,971,967 31.23% person shares 3.Other domestic shares 210,293,994 10.06% -225,690 -225,690 210,068,304 10.05% Including :Domestic 209,498,275 10.02% -40,771 -40,771 209,457,504 10.02% Legal person shares Domestic natural person 795,719 0.04% -184,919 -184,919 610,800 0.03% shares 4.Foreign shares 2,813 0.00% -2,813 -2,813 0 0.00% Including:Foreign Legal 0 0.00% 0 0 0 0.00% person shares Foreign natural person 2,813 0.00% -2,813 -2,813 0 0.00% shares II.Shares with unconditional 817,534,499 39.10% 198,591 198,591 817,733,090 39.11% subscription 32 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 1.Common shares in 468,885,824 22.43% 198,591 198,591 469,084,415 22.44% RMB 2.Foreign shares in 348,648,675 16.67% 0 0 348,648,675 16.67% domestic market 3. 2.Foreign shares in 0 0.00% 0 0 0 0.00% Overseas market 2,090,806,12 III. Total of capital shares 100.00% 0 0 2,090,806,126 100.00% 6 Reasons for share changed √ Applicable □Not applicable 1. Within the reporting period, 65 shareholders reimbursed 29,912 shares of Guangdong Provincial Communication Group Company Limited, which were converted from 29,534 shares of "shareholding of domestic natural person" and 378 shares of "shareholding of overseas natural person" to "national shareholding". Note 2: During the reporting period,40,771 shares of "domestic legal person holding" were converted to "domestic natural person holding shares. 3. Within the reporting period, 184,919 shares of "shareholding of domestic natural person with limited conditions of sale" and 2,435 shares of "shareholding of overseas natural person with limited conditions of sale" were converted to "unlimited conditional shares". 5,775 shares of limited conditional shares held by Li Mei, the outgoing supervisor, were converted into limited conditional shares. Approval of Change of Shares □Applicable √Not applicable 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 disclosed under requirement from security regulators □Applicable √Not applicable Progress on any share repurchase: □ Applicable √ Not applicable Progress on reducing the repurchased shares by means of centralized bidding: □ 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 disclosed under requirement from security regulators □ Applicable √Not applicable 33 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 2. Change of shares with limited sales condition √ Applicable □Not applicable In shares Number of Number of Restricted Initial Increased Unrestricted Shares in the Reason for Restricted Date of Restriction Shareholder Name Restricted Restricted Shares This End of the Shares Removal Shares Shares This Term Term Term Zhang Xiuling and other 65 Release of restrictions on 222,728 192,816 29,912 0 April 26,2019 shareholders sales Guangdong Communication 65 shareholders repay the 410,002,853 0 29,912 410,032,765 Unknown Group Co., Ltd. advance shares Change of top Lei Mei(Outgoing 92,404 5,775 0 86,629 management locking Unknown Supervisor) shares Total 410,317,985 198,591 0 410,119,394 -- -- II. Issuing and listing □ Applicable √ Not applicable 34 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 III. Shareholders and shareholding In Shares Total number of common shareholders at the end of Total number of preferred shareholders that had restored the voting right 56,739 0 the at the end of the reporting period (if any) (note 8) reporting period Particulars about shares held above 5% by shareholders or top ten shareholders Number of share Proportion of Number of Changes in Amount of Amount of pledged/frozen Shareholders Nature of shareholder shares held shares held at reporting restricted un-restricted State of (%) period -end period shares held shares held Amount share Guangdong Communication Group Co.,Ltd State-owned legal person 24.56% 513,412,507 410,032,765 10,337,972 Guangdong Highway Construction Co., Ltd, State-owned legal person 22.30% 466,325,020 466,325,020 Domestic non State-owned 156,652,50 Yadong Fuxing Yalian Investment Co., Ltd. 9.68% 202,429,149 202,429,149 Pledge Legal person 0 Tibet Yingyue Investment Management Co., Ltd. State-owned legal person 4.84% 101,214,574 101,214,574 Guangdong Expressway Co., Ltd. State-owned legal person 2.53% 52,937,491 52,937,491 Guangfa Securities Co., Ltd. State-owned legal person 1.45% 30,364,372 30,364,372 Agricultural Bank of China-Jingshun Great Wall Energy Infrastructure Mixed Securities Investment Other 1.27% 26,617,103 Fund China Life Insurance Co., Ltd.-Dividend - Other 1.15% 23,965,291 Personal dividend -005L-FH002 Shen China Life Insurance Co., Ltd.-Traditional- Other 1.08% 22,495,445 Common insurance products-005L-CT001Shen 35 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Domestic natural person Feng Wuchu 0.97% 20,222,807 shares Strategic investor or general legal person becoming top-10 ordinary shareholder due to rights issue (if None any) Guangdong Communication Group Co., Ltd. is the parent company of Guangdong Highway Construction Co., Ltd. and Guangdong Related or acting-in-concert parties among Expressway Co., Ltd., It is unknown whether there is relationship between other shareholders and whether they are persons taking shareholders above 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 Share type Name of the shareholder the end of the reporting period Share type Quantity Guangdong Communication Group Co.,Ltd 103,379,742 RMB Common shares 103,379,742 Agricultural Bank of China-Jingshun Great Wall Energy 26,617,103 RMB Common shares 26,617,103 Infrastructure Mixed Securities Investment Fund China Life Insurance Co., Ltd.-Dividend -Personal dividend 23,965,291 RMB Common shares 23,965,291 -005L-FH002 Shen China Life Insurance Co., Ltd.-Traditional-Common 22,495,445 RMB Common shares 22,495,445 insurance products-005L-CT001Shen RMB Common shares 18,146,144 Feng Wuchu 20,222,807 Foreign shares placed in domestic 2,076,663 exchange Foreign shares placed in domestic VALUE PARTNERS CLASSIC FUND 13,339,892 13,339,892 exchange Foreign shares placed in domestic Xinyue Co., Ltd. 13,201,086 13,201,086 exchange 36 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Foreign shares placed in domestic PRUSIK UMBRELLA UCITS FUND PLC 12,999,871 12,999,871 exchange Khazanah Nasional Berhad-self fund 10,522,779 RMB Common shares 10,522,779 Foreign shares placed in domestic MATTHEWS CHINA DIVIDEND FUND 10,498,218 10,498,218 exchange Explanation on associated relationship or consistent action Guangdong Communication Group Co., Ltd. is the parent company of Guangdong Highway Construction Co., Ltd. and among the top 10 shareholders of non-restricted negotiable Guangdong Expressway Co., Ltd. ,It is unknown whether there is relationship between other shareholders and whether they shares and that between the top 10 shareholders of non-restricted are persons taking concerted action specified in the Regulations on Disclosure of Information about Change in negotiable shares and top 10 shareholders Shareholding of Shareholders of Listed Companies. Top 10 ordinary shareholders conducting securities margin Nil trading (if any) (see note 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. IV. Change of the controlling shareholder or the actual controller Change of the controlling shareholder in the reporting period □ Applicable √ Not Applicable There was no any change of the controlling shareholder of the Company in the reporting period. Change of the actual controller in the reporting period □ Applicable √ Not applicable There was no any change of the actual controller of the Company in the reporting period. 37 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 VII. Situation of the Preferred Shares □Applicable √Not applicable The Company had no preferred shares in the reporting period 38 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 VIII. Information about Directors, Supervisors and Senior Executives I. Change in shares held by directors, supervisors and senior executives □ Applicable √Not applicable There was no change in shareholding of directors, supervisors and senior management staffs, for the specific information please refer to the 2018 Annual Report II. Change in shares held by directors, supervisors and senior executives √ Applicable □Not applicable Name Positions Types Date Reason Independent Leaves office after six years of Xiao Duan Left May 20,2019 director term of office Chairman of the Ling Ping Supervisory Left May 20,2019 Retiree Committee Independent Zeng Xiaoqing Elected May 20,2019 director Chairman of the Jiang Supervisory Elected May 20,2019 Changwen Committee 39 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 IX. Corporate Bond Whether the company has corporate bonds that have been publicly issued and listed on the stock exchange, and not yet due or due but not folly cashed on the approval date of annual report No 40 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 X. Financial Report I. Audit report Has this semi-annual report been audited? □Yes √No The semi-annual report was not audited. II. Financial statements Currency unit for the statements in the notes to these financial statements: RMB 1. Consolidated balance sheet Prepared by:Guangdong Provincial Expressway Development Co., Ltd. June 30,2019 In RMB Items June 30,2019 December 31,2018 Current asset: Monetary fund 2,038,024,951.05 2,124,524,996.32 Settlement provision Outgoing call loan Transactional financial assets Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Notes receivable Account receivable 103,117,760.85 91,076,995.07 Financing of receivables Prepayments 2,863,265.25 1,912,943.40 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Other account receivable 52,775,962.28 16,487,256.02 Including:Interest receivable 41 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Items June 30,2019 December 31,2018 Dividend receivable 34,145,770.80 1,205,472.90 Repurchasing of financial assets Inventories 110,142.49 81,017.91 Contract assets Assets held for sales Non-current asset due within 1 year 51,745.32 51,745.32 Other current asset Total of current assets 2,196,943,827.24 2,234,134,954.04 Non-current assets: Loans and payment on other’s behalf disbursed Debt investment Available for sale of financial assets 1,668,791,594.53 Other investment on bonds Expired investment in possess Long-term receivable Long term share equity investment 3,237,607,137.38 3,145,644,970.07 Other equity instruments investment 1,694,669,638.37 Other non-current financial assets Property investment 3,442,059.61 3,579,007.54 Fixed assets 7,911,433,640.97 7,600,046,319.91 Construction in progress 835,875,363.36 1,089,473,425.63 Production physical assets Oil & gas assets Use right assets Intangible assets 4,554,091.05 5,739,020.48 Development expenses Goodwill Long-germ expenses to be amortized 1,168,273.16 1,221,781.88 Deferred income tax asset 403,367,030.48 447,485,034.79 Other non-current asset 115,709,087.82 99,794,665.58 Total of non-current assets 14,207,826,322.20 14,061,775,820.41 Total of assets 16,404,770,149.44 16,295,910,774.45 42 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Items June 30,2019 December 31,2018 Current liabilities Short-term loans Loan from Central Bank Borrowing funds Transactional financial liabilities Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities Notes payable Account payable 215,439,814.83 203,779,190.74 Advance receipts 11,725,138.96 12,039,708.01 Selling of repurchased financial assets Deposit taking and interbank deposit Entrusted trading of securities Entrusted selling of securities Employees’ wage payable 18,123,397.10 13,122,437.17 Tax payable 95,207,898.65 104,198,746.06 Other account payable 284,563,651.27 191,254,464.84 Including:Interest payable 17,157,289.56 8,971,576.57 Dividend payable 21,150,413.70 17,191,142.23 Fees and commissions payable Reinsurance fee payable Contract Liabilities Liabilities held for sales Non-current liability due within 1 year 2,041,365,000.00 2,498,480,000.00 Other current liability Total of current liability 2,666,424,900.81 3,022,874,546.82 Non-current liabilities: Reserve fund for insurance contracts Long-term loan 3,281,725,000.00 2,983,040,000.00 Bond payable 677,902,761.25 Including:preferred stock Sustainable debt 43 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Items June 30,2019 December 31,2018 Lease liability Long-term payable 39,625,983.68 38,022,210.11 Long-term remuneration payable to staff Expected liabilities Deferred income Deferred income tax liability 203,179,299.45 205,672,389.59 Other non-current liabilities Total non-current liabilities 4,202,433,044.38 3,226,734,599.70 Total of liability 6,868,857,945.19 6,249,609,146.52 Owners’ equity Share capital 2,090,806,126.00 2,090,806,126.00 Other equity instruments Including:preferred stock Sustainable debt Capital reserves 2,562,570,465.31 2,536,774,965.31 Less:Shares in stock Other comprehensive income 275,111,548.84 245,109,114.81 Special reserve Surplus reserves 775,402,561.35 775,402,561.35 Common risk provision Retained profit 3,488,708,792.60 3,938,609,136.59 Total of owner’s equity belong to the parent company 9,192,599,494.10 9,586,701,904.06 Minority shareholders’ equity 343,312,710.15 459,599,723.87 Total of owners’ equity 9,535,912,204.25 10,046,301,627.93 Total of liabilities and owners’ equity 16,404,770,149.44 16,295,910,774.45 Legal Representative: Zheng Renfa General Manager: Wang Chunhua Person in charge of accounting:Fang Zhi Accounting Dept Leader: Zhou Fang 44 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 2.Parent Company Balance Sheet In RMB Items June 30,2019 December 31,2018 Current asset: Monetary fund 2,015,944,877.34 2,096,597,568.04 Transactional financial assets Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Notes receivable Account receivable 17,585,263.17 18,405,847.15 Financing of receivables Prepayments 2,266,509.88 1,532,057.82 Other account receivable 72,684,121.08 9,323,782.66 Including:Interest receivable 32,460,868.78 1,880,148.12 Dividend receivable 34,145,770.80 1,205,472.90 Inventories Contract assets Assets held for sales Non-current asset due within 1 year 100,000,000.00 100,000,000.00 Other current asset Total of current assets 2,208,480,771.47 2,225,859,255.67 Non-current assets: Debt investment 692,903,684.98 Available for sale of financial assets 1,668,791,594.53 Other investment on bonds Expired investment in possess Long-term receivable Long term share equity investment 4,771,272,146.19 4,679,309,978.88 Other equity instruments investment 1,694,669,638.37 Other non-current financial assets Property investment 3,189,921.36 3,326,869.29 Fixed assets 5,728,126,768.64 5,292,898,635.00 45 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Items June 30,2019 December 31,2018 Construction in progress 795,576,474.85 1,060,230,773.10 Production physical assets Oil & gas assets Use right assets Intangible assets 1,454,457.72 1,741,277.53 Development expenses Goodwill Long-germ expenses to be amortized Deferred income tax asset 403,245,352.12 447,328,530.77 Other non-current asset 115,094,875.40 790,720,727.48 Total of non-current assets 14,205,533,319.63 13,944,348,386.58 Total of assets 16,414,014,091.10 16,170,207,642.25 Current liabilities Short-term loans Transactional financial liabilities Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities Notes payable Account payable 173,643,504.46 124,833,335.72 Advance receipts Contract Liabilities Employees’ wage payable 5,271,471.25 5,669,203.37 Tax payable 6,636,136.81 10,297,144.52 Other account payable 241,188,208.02 142,457,135.79 Including:Interest payable 16,683,582.06 8,373,096.36 Dividend payable 21,150,413.70 17,191,142.23 Liabilities held for sales Non-current liability due within 1 year 2,002,685,000.00 2,327,180,000.00 Other current liability 566,301,158.49 977,236,252.44 Total of current liability 2,995,725,479.03 3,587,673,071.84 Non-current liabilities: Long-term loan 2,933,705,000.00 2,731,990,000.00 46 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Items June 30,2019 December 31,2018 Bond payable 677,902,761.25 Including:preferred stock Sustainable debt Lease liability Long-term payable 39,625,983.68 38,022,210.11 Long-term remuneration payable to staff Expected liabilities Deferred income Deferred income tax liability 94,690,114.96 88,220,604.00 Other non-current liabilities Total non-current liabilities 3,745,923,859.89 2,858,232,814.11 Total of liability 6,741,649,338.92 6,445,905,885.95 Owners’ equity Share capital 2,090,806,126.00 2,090,806,126.00 Other equity instruments Including:preferred stock Sustainable debt Capital reserves 2,974,458,696.93 2,948,663,196.93 Less:Shares in stock Other comprehensive income 275,111,548.84 245,109,114.81 Special reserve Surplus reserves 759,558,277.70 759,558,277.70 Retained profit 3,572,430,102.71 3,680,165,040.86 Total of owners’ equity 9,672,364,752.18 9,724,301,756.30 Total of liabilities and owners’ equity 16,414,014,091.10 16,170,207,642.25 47 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 3.Consolidated Income statement In RMB Items Semi-annual of 2019 Semi-annual of 2018 I. Income from the key business 1,483,673,245.21 1,535,864,145.14 Incl:Business income 1,483,673,245.21 1,535,864,145.14 Interest income Insurance fee earned Fee and commission received II. Total business cost 736,685,807.33 728,964,530.78 Incl:Business cost 549,623,810.49 533,736,566.35 Interest expense Fee and commission paid Insurance discharge payment Net claim amount paid Insurance policy dividend paid Insurance policy dividend paid Reinsurance expenses Business tax and surcharge 6,557,023.97 6,853,114.99 Sales expense Administrative expense 76,975,210.47 73,109,460.94 R & D expense 2,485,173.03 Financial expenses 103,529,762.40 112,780,215.47 Including:Interest expense 115,040,857.71 125,752,286.60 Interest income 15,761,707.69 18,076,236.30 Add:Other income 420,227.62 Investment gain(“-”for loss) 276,241,866.32 259,358,302.20 Including: investment gains from affiliates 237,712,998.09 216,777,157.34 Financial assets measured at amortized cost cease to be recognized as income Gains from currency exchange Net exposure hedging income Changing income of fair value Credit impairment loss Impairment loss of assets 57,890.35 48 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Items Semi-annual of 2019 Semi-annual of 2018 Assets disposal income 13,129,094.29 44,860,186.67 III. Operational profit(“-”for loss) 1,036,778,626.11 1,111,175,993.58 Add :Non-operational income 735,359.76 2,687,560.58 Less: Non-operating expense 4,231,407.95 2,007,967.43 IV. Total profit(“-”for loss) 1,033,282,577.92 1,111,855,586.73 Less:Income tax expenses 189,696,774.05 213,221,718.85 V. Net profit 843,585,803.87 898,633,867.88 (I) Classification by business continuity 1.Net continuing operating profit 843,585,803.87 898,633,867.88 2.Termination of operating net profit (II) Classification by ownership 1.Net profit attributable to the owners of parent company 736,486,112.30 779,002,246.98 2.Minority shareholders’ equity 107,099,691.57 119,631,620.90 VI. Net after-tax of other comprehensive income 18,938,083.74 -73,795,549.55 Net of profit of other comprehensive income attributable to owners o 18,938,083.74 -73,795,549.55 f the parent company. (I)Other comprehensive income items that will not be reclassified 19,408,532.88 into gains/losses in the subsequent accounting period 1.Re-measurement of defined benefit plans of changes in net debt or net assets 2.Other comprehensive income under the equity method investee can not be reclassified into profit or loss. 3. Changes in the fair value of investments in other equity 19,408,532.88 instruments 4. Changes in the fair value of the company’s credit risks 5.Other (II) Other comprehensive income that will be reclassified into profit or lo -470,449.14 -73,795,549.55 ss. 1.Other comprehensive income under the equity method investee can -470,449.14 -4,983,478.43 be reclassified into profit or loss. 2. Changes in the fair value of investments in other debt obligations -68,812,071.12 3.Gains and losses from changes in fair value available for sale finan 49 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Items Semi-annual of 2019 Semi-annual of 2018 cial assets 4. Other comprehensive income arising from the reclassification of financial assets 5.Held-to-maturity investments reclassified to gains and losses of ava ilable for sale financial assets 6. Allowance for credit impairments in investments in other debt obligations 7. Reserve for cash flow hedges 8. Translation differences in currency financial statements 9.Other Net of profit of other comprehensive income attributable to Minority shareholders’ equity VII. Total comprehensive income 862,523,887.61 824,838,318.33 Total comprehensive income attributable to the owner of the parent 755,424,196.04 705,206,697.43 company Total comprehensive income attributable minority shareholders 107,099,691.57 119,631,620.90 VIII. Earnings per share (I)Basic earnings per share 0.35 0.37 (II)Diluted earnings per share 0.35 0.37 The current business combination under common control, the net profits of the combined party before achieved ne t profit of RMB 0.00, last period the combined party realized RMB0.00. Legal Representative: Zheng Renfa General Manager: Wang Chunhua Person in charge of accounting:Fang Zhi Accounting Dept Leader: Zhou Fang 50 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 4. Income statement of the Parent Company In RMB Items Semi-annual of 2019 Semi-annual of 2018 I. Income from the key business 623,126,517.35 675,894,267.74 Incl:Business cost 329,190,674.52 310,310,687.32 Business tax and surcharge 3,486,292.37 3,493,775.90 Sales expense Administrative expense 46,996,060.64 42,233,003.03 R & D expense Financial expenses 96,377,160.24 104,206,424.94 Including:Interest expenses 109,559,414.30 118,866,427.75 Interest income 15,652,128.26 17,806,734.11 Add:Other income 70,758.72 Investment gain(“-”for loss) 975,659,501.70 880,579,568.71 Including: investment gains from affiliates 237,712,998.09 216,777,157.34 Financial assets measured at amortized cost cease to be recognized as income Net exposure hedging income Changing income of fair value Credit impairment loss Impairment loss of assets Assets disposal income 138,427.18 II. Operational profit(“-”for loss) 1,122,806,590.00 1,096,368,372.44 Add :Non-operational income 298,935.96 916,331.99 Less:Non -operational expenses 370,829.17 485,826.09 III. Total profit(“-”for loss) 1,122,734,696.79 1,096,798,878.34 Less:Income tax expenses 44,083,178.65 54,054,827.41 IV. Net profit 1,078,651,518.14 1,042,744,050.93 1.Net continuing operating profit 1,078,651,518.14 1,042,744,050.93 2.Termination of operating net profit V. Net after-tax of other comprehensive income 18,938,083.74 -73,795,549.55 (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting 19,408,532.88 period 51 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Items Semi-annual of 2019 Semi-annual of 2018 1.Re-measurement of defined benefit plans of changes in n et debt or net assets 2.Other comprehensive income under the equity method in vestee can not be reclassified into profit or loss. 3. Changes in the fair value of investments in other equity 19,408,532.88 instruments 4. Changes in the fair value of the company’s credit risks 5.Other (II) Other comprehensive income that will be reclassified into -470,449.14 -73,795,549.55 profit or loss. 1.Other comprehensive income under the equity method in -470,449.14 -4,983,478.43 vestee can be reclassified into profit or loss. 2. Changes in the fair value of investments in other debt obligations 3.Gains and losses from changes in fair value available for -68,812,071.12 sale financial assets 4. Other comprehensive income arising from the reclassification of financial assets 5.Held-to-maturity investments reclassified to gains and lo sses of available for sale financial assets 6. Allowance for credit impairments in investments in other debt obligations 7. Reserve for cash flow hedges 8.Translation differences in currency financial statements 9.Other VI. Total comprehensive income 1,097,589,601.88 968,948,501.38 VII. Earnings per share (I)Basic earnings per share (II)Diluted earnings per share 52 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 5. Consolidated Cash flow statement In RMB Items Semi-annual of 2019 Semi-annual of 2018 I. Cash flows from operating activities Cash received from sales of goods or rending of services 1,509,571,069.40 1,567,523,150.21 Net increase of customer deposits and capital kept for brother company Net increase of loans from central bank Net increase of inter-bank loans from other financial bodies Cash received against original insurance contract Net cash received from reinsurance business Net increase of client deposit and investment Cash received from interest, commission charge and commission Net increase of inter-bank fund received Net increase of repurchasing business Net cash received by agent in securities trading Tax returned Other cash received from business operation 25,618,718.28 41,946,329.98 Sub-total of cash inflow 1,535,189,787.68 1,609,469,480.19 Cash paid for purchasing of merchandise and services 92,703,135.93 96,705,259.73 Net increase of client trade and advance Net increase of savings in central bank and brother company Cash paid for original contract claim Net increase in financial assets held for trading purposes Net increase for Outgoing call loan Cash paid for interest, processing fee and commission Cash paid for policy dividend Cash paid to staffs or paid for staffs 143,256,732.77 138,291,293.37 Taxes paid 210,497,035.66 532,821,606.22 Other cash paid for business activities 37,921,786.09 21,871,732.77 Sub-total of cash outflow from business activities 484,378,690.45 789,689,892.09 Net cash generated from /used in operating activities 1,050,811,097.23 819,779,588.10 II. Cash flow generated by investing Cash received from investment retrieving 53 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Items Semi-annual of 2019 Semi-annual of 2018 Cash received as investment gains 176,375,388.78 84,683,907.47 Net cash retrieved from disposal of fixed assets, intangible assets, and 13,961,500.00 100,573,025.00 other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received Sub-total of cash inflow due to investment activities 190,336,888.78 185,256,932.47 Cash paid for construction of fixed assets, intangible assets and other 414,305,542.74 323,881,627.90 long-term assets Cash paid as investment Net increase of loan against pledge Net cash received from subsidiaries and other operational units Other cash paid for investment activities Sub-total of cash outflow due to investment activities 414,305,542.74 323,881,627.90 Net cash flow generated by investment -223,968,653.96 -138,624,695.43 III.Cash flow generated by financing Cash received as investment Including: Cash received as investment from minor shareholders Cash received as loans 2,231,700,000.00 800,000,000.00 Cash received from bond placing Other financing –related cash received Sub-total of cash inflow from financing activities 2,231,700,000.00 800,000,000.00 Cash to repay debts 1,620,130,000.00 637,830,000.00 Cash paid as dividend, profit, or interests 1,522,586,583.81 1,382,633,569.09 Including: Dividend and profit paid by subsidiaries to minor shareholders 220,140,964.92 179,899,173.50 Other cash paid for financing activities 791,384.00 Sub-total of cash outflow due to financing activities 3,143,507,967.81 2,020,463,569.09 Net cash flow generated by financing -911,807,967.81 -1,220,463,569.09 IV. Influence of exchange rate alternation on cash and cash equivalents -1,534,520.73 -2,267,884.63 V.Net increase of cash and cash equivalents -86,500,045.27 -541,576,561.05 Add: balance of cash and cash equivalents at the beginning of term 2,123,303,796.32 2,363,042,700.42 VI ..Balance of cash and cash equivalents at the end of term 2,036,803,751.05 1,821,466,139.37 54 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 6. Cash Flow Statement of the Parent Company In RMB Items Semi-annual of 2019 Semi-annual of 2018 I.Cash flows from operating activities Cash received from sales of goods or rending of services 641,027,153.33 661,994,572.24 Tax returned Other cash received from business operation 24,885,810.30 48,829,459.08 Sub-total of cash inflow 665,912,963.63 710,824,031.32 Cash paid for purchasing of merchandise and services 24,226,244.52 39,912,969.27 Cash paid to staffs or paid for staffs 56,174,438.87 55,205,264.99 Taxes paid 24,543,436.06 25,922,199.03 Other cash paid for business activities 444,674,884.91 402,529,977.62 Sub-total of cash outflow from business activities 549,619,004.36 523,570,410.91 Net cash generated from /used in operating activities 116,293,959.27 187,253,620.41 II. Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains 846,967,754.67 580,905,173.98 Net cash retrieved from disposal of fixed assets, intangible 3,700.00 195,540.00 assets, and other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 432,250.00 Sub-total of cash inflow due to investment activities 846,971,454.67 581,532,963.98 Cash paid for construction of fixed assets, intangible assets 399,081,697.08 312,406,878.23 and other long-term assets Cash paid as investment Net cash received from subsidiaries and other operational units Other cash paid for investment activities Sub-total of cash outflow due to investment activities 399,081,697.08 312,406,878.23 Net cash flow generated by investment 447,889,757.59 269,126,085.75 III. Cash flow generated by financing Cash received as investment Cash received as loans 1,845,000,000.00 400,000,000.00 55 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Items Semi-annual of 2019 Semi-annual of 2018 Cash received from bond placing Other financing –related ash received 291,000,000.00 Sub-total of cash inflow from financing activities 1,845,000,000.00 691,000,000.00 Cash to repay debts 1,197,780,000.00 50,100,000.00 Cash paid as dividend, profit, or interests 1,289,730,502.83 1,142,614,308.52 Other cash paid for financing activities 791,384.00 374,200,000.00 Sub-total of cash outflow due to financing activities 2,488,301,886.83 1,566,914,308.52 Net cash flow generated by financing -643,301,886.83 -875,914,308.52 IV. Influence of exchange rate alternation on cash and cash -1,534,520.73 -2,267,884.63 equivalents V.Net increase of cash and cash equivalents -80,652,690.70 -421,802,486.99 Add: balance of cash and cash equivalents at the beginning of 2,095,376,368.04 2,130,475,892.67 term VI ..Balance of cash and cash equivalents at the end of term 2,014,723,677.34 1,708,673,405.68 56 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 7. Consolidated Statement on Change in Owners’ Equity Amount in this period In RMB Semi-annual of 2019 Owner’s equity Attributable to the Parent Company Other Equity instrument Minor Total of Items Less: Other Common share Capital Specialized Surplus Retained shareholders’ owners’ preferred Sustai Shares Comprehensive risk Other Subtotal Capital Other reserves reserve reserves profit stock nable in stock Income provision equity equity debt 2,090,806 2,536,77 775,402,5 3,938,609,1 9,586,701 10,046,30 I.Balance at the end of last year 245,109,114.81 459,599,723.87 ,126.00 4,965.31 61.35 36.59 ,904.06 1,627.93 Add: Change of accounting -11,353,413 -289,063. -289,063. 11,064,350.29 policy .48 19 19 Correcting of previous errors Merger of entities under common control Other II. Balance at the beginning of 2,090,806 2,536,77 775,402,5 3,927,255,7 9,586,412 10,046,01 256,173,465.10 459,599,723.87 current year ,126.00 4,965.31 61.35 23.11 ,840.87 2,564.74 25,795,5 -438,546,93 -393,813, -510,100, III .Changed in the current year 18,938,083.74 -116,287,013.72 00.00 0.51 346.77 360.49 (1)Total comprehensive 736,486,112 755,424,1 862,523,8 18,938,083.74 107,099,691.57 income .30 96.04 87.61 (II)Investment or decreasing of capital by owners 57 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Semi-annual of 2019 Owner’s equity Attributable to the Parent Company Other Equity instrument Minor Total of Items Less: Other Common share Capital Specialized Surplus Retained shareholders’ owners’ preferred Sustai Shares Comprehensive risk Other Subtotal Capital Other reserves reserve reserves profit stock nable in stock Income provision equity equity debt 1.Ordinary Shares invested by shareholders 2.Holders of other equity instru ments invested capital 3.Amount of shares paid and accounted as owners’ equity 4.Other -1,175,033, -1,175,03 -1,398,41 (III)Profit allotment -223,386,705.29 042.81 3,042.81 9,748.10 1.Providing of surplus reserves 2.Providing of common risk provisions 3.Allotment to the owners (or -1,175,033, -1,175,03 -1,398,41 -223,386,705.29 shareholders) 042.81 3,042.81 9,748.10 4.Other (IV) Internal transferring of owners’ equity 1. Capitalizing of capital 58 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Semi-annual of 2019 Owner’s equity Attributable to the Parent Company Other Equity instrument Minor Total of Items Less: Other Common share Capital Specialized Surplus Retained shareholders’ owners’ preferred Sustai Shares Comprehensive risk Other Subtotal Capital Other reserves reserve reserves profit stock nable in stock Income provision equity equity debt reserves (or to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4.Change amount of defined benefit plans that carry forward Retained earnings 5.Other comprehensive income carry-over retained earnings 6.Other (V). Special reserves 1. Provided this year 2.Used this term 25,795,5 25,795,50 25,795,50 (VI)Other 00.00 0.00 0.00 IV. Balance at the end of this 2,090,806 2,562,57 775,402,5 3,488,708,7 9,192,599 9,535,912 275,111,548.84 343,312,710.15 term ,126.00 0,465.31 61.35 92.60 ,494.10 ,204.25 59 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Amount in last year In RMB Semi -annual of 2018 Owner’s equity Attributable to the Parent Company Minor Total of Items Other Equity instrument Other Common shareholders Less: Shares Specialized Surplus Retained owners’ share Capital preferred Capital reserves Comprehensive risk Other Subtotal Sustainab Other in stock reserve reserves profit ’ equity stock Income provision equity le debt 2,090,806,12 544,821,13 3,550,110 9,023,071, 431,039,563. 9,454,110, I.Balance at the end of last year 2,510,069,749.76 327,263,824.17 6.00 0.03 ,288.49 118.45 00 681.45 Add: Change of accounting policy Correcting of previous errors Merger of entities under common control Other II.Balance at the beginning of current 2,090,806,12 544,821,13 3,550,110 9,023,071, 431,039,563. 9,454,110, 2,510,069,749.76 327,263,824.17 year 6.00 0.03 ,288.49 118.45 00 681.45 -278,945, -348,794,8 -426,915,2 III.Changed in the current year 3,946,375.55 -73,795,549.55 -78,120,441. 652.78 26.78 68.54 76 779,002,2 705,206,69 119,631,620. (1)Total comprehensive income -73,795,549.55 824,838,31 46.98 7.43 90 8.33 (II)Investment or decreasing of capital by owners 60 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Semi -annual of 2018 Owner’s equity Attributable to the Parent Company Minor Total of Items Other Equity instrument Other Common shareholders Less: Shares Specialized Surplus Retained owners’ share Capital preferred Capital reserves Comprehensive risk Other Subtotal Sustainab Other in stock reserve reserves profit ’ equity stock Income provision equity le debt 1.Ordinary Shares invested by shareho lders 2.Holders of other equity instruments i nvested capital 3.Amount of shares paid and accounted as owners’ equity 4.Other -1,057,94 -1,057,947 -197,752,062 -1,255,699 (III)Profit allotment 7,899.76 ,899.76 .66 ,962.42 1.Providing of surplus reserves 2.Providing of common risk provisions 3.Allotment to the owners (or -1,057,94 -1,057,947 -197,752,062 -1,255,699 shareholders) 7,899.76 ,899.76 .66 ,962.42 4.Other (IV) Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 61 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Semi -annual of 2018 Owner’s equity Attributable to the Parent Company Minor Total of Items Other Equity instrument Other Common shareholders Less: Shares Specialized Surplus Retained owners’ share Capital preferred Capital reserves Comprehensive risk Other Subtotal Sustainab Other in stock reserve reserves profit ’ equity stock Income provision equity le debt 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4.Change amount of defined benefit plans that carry forward Retained earnings 5.Other comprehensive income carry-over retained earnings 6.Other (V). Special reserves 1. Provided this year 2.Used this term 3,946,375. 3,946,375. (VI)Other 3,946,375.55 55 55 2,090,806,12 544,821,13 8,674,276, 352,919,121. 9,027,195, IV. Balance at the end of this term 2,514,016,125.31 253,468,274.62 3,271,164 6.00 0.03 291.67 24 412.91 ,635.71 62 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 8. Statement of change in owner’s Equity of the Parent Company Amount in this period In RMB Semi-annual of 2019 Other Equity instrument Other Total of Items Share Less: Shares Specialized Surplus Retained preferred Capital reserves Comprehensive Other owners’ capital Sustainabl Other in stock reserve reserves profit stock Income equity e debt 2,090,806 759,558,277 3,680,165,0 9,724,301 I.Balance at the end of last year 2,948,663,196.93 245,109,114.81 ,126.00 .70 40.86 ,756.30 Add: Change of accounting -11,353,413 -289,063. 11,064,350.29 policy .48 19 Correcting of previous errors Other II.Balance at the beginning of 2,090,806 759,558,277 3,668,811,6 9,724,012 2,948,663,196.93 256,173,465.10 current year ,126.00 .70 27.38 ,693.11 -96,381,524 -51,647,9 III.Changed in the current year 25,795,500.00 18,938,083.74 .67 40.93 (I)Total comprehensive 1,078,651,5 1,097,589 18,938,083.74 income 18.14 ,601.88 (II) Investment or decreasing of capital by owners 1.Ordinary Shares invested by s hareholders 2.Holders of other equity instru 63 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Semi-annual of 2019 Other Equity instrument Other Total of Items Share Less: Shares Specialized Surplus Retained preferred Capital reserves Comprehensive Other owners’ capital Sustainabl Other in stock reserve reserves profit stock Income equity e debt ments invested capital 3.Amount of shares paid and accounted as owners’ equity 4.Other -1,175,033, -1,175,03 (III)Profit allotment 042.81 3,042.81 1.Providing of surplus reserves 2.Allotment to the owners (or -1,175,033, -1,175,03 shareholders) 042.81 3,042.81 3.Other (IV) Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4.Change amount of defined benefit plans that carry forward Retained earnings 64 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Semi-annual of 2019 Other Equity instrument Other Total of Items Share Less: Shares Specialized Surplus Retained preferred Capital reserves Comprehensive Other owners’ capital Sustainabl Other in stock reserve reserves profit stock Income equity e debt 5.Other comprehensive income carry-over retained earnings 6.Other (V) Special reserves 1. Provided this year 2.Used this term 25,795,50 (VI)Other 25,795,500.00 0.00 IV. Balance at the end of this 2,090,806 759,558,277 3,572,430,1 9,672,364 2,974,458,696.93 275,111,548.84 term ,126.00 .70 02.71 ,752.18 65 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Amount in last year In RMB Semi-annual of 2018 Other Equity instrument Other Total of Items Capital Less: Shares Specialized Surplus Retained Share Capital preferred Comprehensive Other owners’ Sustainable Other reserves in stock reserve reserves profit stock Income equity debt I.Balance at the end of last 2,090,806,12 2,921,957,981. 528,976,846 2,662,880, 8,531,88 327,263,824.17 year 6.00 38 .38 058.78 4,836.71 Add: Change of accounting policy Correcting of previous errors Other II.Balance at the beginning 2,090,806,12 2,921,957,981. 528,976,846 2,662,880, 8,531,88 327,263,824.17 of current year 6.00 38 .38 058.78 4,836.71 III.Changed in the current -15,203,84 -85,053,0 3,946,375.55 -73,795,549.55 year 8.83 22.83 (I)Total comprehensive 1,042,744, 968,948, -73,795,549.55 income 050.93 501.38 (II) Investment or decreasing of capital by owners 1.Ordinary Shares invested by shareholders 2.Holders of other equity in struments invested capital 66 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Semi-annual of 2018 Other Equity instrument Other Total of Items Capital Less: Shares Specialized Surplus Retained Share Capital preferred Comprehensive Other owners’ Sustainable Other reserves in stock reserve reserves profit stock Income equity debt 3.Amount of shares paid and accounted as owners’ equity 4.Other -1,057,947, -1,057,94 (III)Profit allotment 899.76 7,899.76 1.Providing of surplus reserves 2.Allotment to the owners -1,057,947, -1,057,94 (or shareholders) 899.76 7,899.76 3.Other (IV) Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 67 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Semi-annual of 2018 Other Equity instrument Other Total of Items Capital Less: Shares Specialized Surplus Retained Share Capital preferred Comprehensive Other owners’ Sustainable Other reserves in stock reserve reserves profit stock Income equity debt 4.Change amount of defined benefit plans that carry forward Retained earnings 5.Other comprehensive income carry-over retained earnings 6.Other (V) Special reserves 1. Provided this year 2.Used this term 3,946,37 (VI)Other 3,946,375.55 5.55 IV. Balance at the end of this 2,090,806,12 2,925,904,356. 528,976,846 2,647,676, 8,446,83 253,468,274.62 term 6.00 93 .38 209.95 1,813.88 68 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 III .Company Profile (1)History 1.The Company was established in February 1993, which was originally named as Guangdong Fokai Expressway Co., Ltd. On June 30, 1993, it was renamed as Guangdong Provincial Expressway Development Co., Ltd. after reorganization pursuant to the approval of the Office of Joint Examination Group of Experimental Units of Share Holding System with YLSB (1993)No. 68 document. The share capital structure after reorganization is as follows: Composition of state-owned shares: The appraised net value of state-owned assets of Guangdong Jiujiang Bridge Co. and Guangfo Expressway Co., Ltd. as of January 31, 1993 confirmed by Guangdong State-owned Asset Management Dept., i.e., 418.2136 million yuan, was converted into 155.025 million shares. Guangdong Expressway Co. invested cash of 115 million yuan to subscribe for 35.9375 million shares. Other legal persons invested cash of 286.992 million yuan to subscribe for 89.685 million shares. Staff of the Company invested 87.008 million yuan to subscribe for 27.19 million shares. The total is 307.8375 million shares. 2 . Pursuant to the approval of Guangdong Economic System Reform Committee and Guangdong Securities Regulatory Commission with YTG (1996) No. 67 document, part of the shareholders of non-state-owned legal person shares transferred 20 million non-state-owned legal person shares to Malaysia Yibao Engineering Co., Ltd. in June 1996. 3. Pursuant to the approval of Securities Commission under the State Council with WF (1996) No. 24 approval document and that of Guangdong Economic System Reform Committee with YTG (1996) No. 68 document, the Company issued 135 million domestically listed foreign investment shares (B shares) to overseas investors at the price of HKD 3.54 (equivalent to 3.8 yuan) with the par value of each share being 1 yuan during June to July 1996. 4. Pursuant to the reply of the Ministry of Foreign Trade and Economic Cooperation of the People’ s Republic of China with (1996) WJMZYHZ No. 606 document, the Company was approved to be a foreign-invested joint stock company limited.<0} 5.The Company distributed dividends and capitalized capital common reserve for the year 1996 in the following manner: The Company paid 1.7 bonus shares f or each 10 shares and capitalized capital common reserve on 3.3-for-10 basis.<0} 22,250 ordinary shares were actually placed to all . 8. Pursuant to the reply of the General Office of the People’ s Government of Guangdong Province with YBH (2000) No. 574 document, the state-owned shares were transferred to Guangdong Communication Group Co., Ltd. (Group Co.) for holding and management without compensation. 9.Pursuant to the approval of Shenzhen Stock Exchange, 53.0205 million staff shares of the Company (132,722 shares held by directors, supervisors and senior executives are temporarily frozen) were listed on February 5, 2001. 10.In accordance with the resolutions of 2000 annual shareholders’ general meeting, the Company capitalized capital common reserve into 419,039,249 shares on 5-for-10 basis with the total share capital as of the end of 2000, i.e., 838,078,499 shares as base. The date of stock right registration was May 21, 2001. The ex-right date was May 22, 2001. 11 . On March 8, 2004,As approved by China Securities Regulatory Commission by document 69 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Zheng-Jian-Gong-Si-Zi [2003]No.3, the 45,000,000 non-negotiable foreign shares were placed in Shenzhen Stock 12. On December 21, 2005, the Company's plan for share holding structure reform was voted through at the shareholders' meeting concerning A shares. On January 26 2006, The Ministry of Commerce of PRC issued “The approval on share converting of Guangdong Provincial Expressway Development Co., Ltd.” to approve the share equity relocation and transformation. On October 9 2006, according to the “Circular about implementing of share equity relocation and relative trading” issued by Shenzhen Stock Exchange, the abbreviation ID of the Company’s A shares was restored from “G-Expressway” “Expressway A”. 13. Upon the approval document of CSRC No.230-2016 Zheng Jian Xu ke-Approval of the Share-Issuing to Parties such as Guangdong Provincial Expressway Co., Ltd to Purchase Assets and Raise Matching Funds by Guangdong Provincial Expressway Development Co., Ltd, in June 2016 the company issued 33,355,263 shares and paid RMB 803.50 million to Guangdong Provincial Expressway Co., Ltd for purchasing the 25% stake of Guangdong Provincial Fokai Expressway Co., Ltd held by Guangdong Provincial Expressway Co., Ltd; and issued 466,325,020 shares to Guangdong Provincial Highway Construction Co., Ltd for purchasing the 100% stake of Guangzhou Guangzhu Traffic Investment Management Co., Ltd held by Guangdong Provincial Highway Construction Co., Ltd. On June 21, 2016, the company directionally issued 334,008,095 A-shares to Yadong Fuxing Yalian Investment Co.,Ltd, Tibet Yinyue Investment Management Co.,Ltd and GF Securities Co.,Ltd. The issuance of shares have been registered on July 7, 2016, the new shares will be listed on July 8, 2016. (2)Organization structure and the actual controller of the Company As of June 30, 2019,Registration capital:RMB2,090,806,126,Legal representative:Zheng Renfa,Registration place:No.85, Baiyun Road, Guangzhou, Headquarters Office: 45-46/F, Litong Plaza, No.32, Zhujiang East Road, Zhujiang New City, Tihe Disrtict , Guangzhou,The company has set up: Investment Development Dept, Security Affairs Department, Management Department, Financial Management Department, Base construction Department, Audit and Supervise Department, Affairs Department, Personnel Department , Party Work Department, Law affairs Department , Project Office and Labour union etc. Guangdong Communication Group Co., Ltd. is the largest shareholder of the Company. legal representative: Deng Xiaohua. Date of establishment: June 23, 2000. As of June 30, 2019,Registered capital: RMB 26.8 billion. It is a solely state-owned limited company. Business scope:equity management, organization of asset reorganization and optimized allocation, raising funds by means including mortgage, transfer of property rights and joint stock system transformation, project investment, operation and management, traffic infrastructure construction, highway and railway project operation and relevant industries, technological development, application, consultation and services, highway and railway passenger and cargo transport, ship industry, relevant overseas businesses; The value-added communication business. The State-owned assets Supervision and Administration Committee of the Guangdong Provincial people's Government shall be the final controlling shareholder of the company. (3)The company’s main business and share ,Holding company The company operated the construction of the highway construction, grading roads, bridges;Management fees and 70 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 maintenance of roads, bridges, and car rescue, maintenance, cleaning, concurrently with the company's business s upporting motor transport, warehousing operations. The Company is mainly engaged in tolling and maintenance of Guangfo Expressway, Fokai Expressway and Jingzhu Expressway Guangzhu Section , investment in technological industries and provision of relevant consultation while investing in Shenzhe n Huiyan Expressway Co., Ltd., Guangzhou Guanghui Expressway Co., Ltd.,Jingzhu Expressway Guangzhu Co., Ltd.,Guangdong Jiangzhong Expressway Co., Ltd., Zhaoqing Yuezhao Expressway Co., Ltd.,Ganzhou Kangda Ex pressway , Ganzhou Gankang Expressway Co., Ltd.,Guangdong Yueke Technology Micro Loan Co., Ltd.,Guangd ong Guangle Expressway Co.,Ltd. and Guoyuan Securities Co., Ltd. The financial statements have been authorized for issuance by the Board of Directors of the Group on August 28,2019. As of June 30,2019,A total of 5 subsidiaries of the Company that were included in the scope of consolidation are listed in Note 9 “The equity in other entities”. The scope of consolidation of the Company for the current year was reduced by one subsidiary from the previous year. Refer to Note 8 “Changes of the scope of consolidated financial statements” for details. IV. Basis for the preparation of financial statements 1.Preparation basis The financial statements of the Company have been prepared on basis of going concern in conformity with Chinese Accounting Standards for Business Enterprises and the Accounting Systems for Business Enterprises issued by the Ministry of Finance of People’s Republic of China (Ministry of Finance issued order No.33, the Ministry of Finance revised order No.76) on February 15, 2006, and revised Accounting Standards (order 42 of the Ministry of Finance) and Compilation Rules for Information Disclosure by Companies Offering Securities to the Public No.15 – General Provisions on Financial Reports (2014 Revision) issued by the China Securities Regulatory Commission (CSRC). According to the relevant accounting regulations in Chinese Accounting Standards for Business Enterprises, the Company has adopted the accrual basis of accounting. Held-for-sale non-current assets are measured at the lower of its book value at its classification date and fair value minus expected disposal costs. Where assets are impaired, provisions for asset impairment are made in accordance with relevant requirements 2.Continuation There will be no such events or situations in the 12 months from the end of the reporting period that will cause material doubts as to the continuation capability of the Company. 71 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 V. Significant Accounting Policies and Accounting Estimates Specific accounting policies and accounting estimates are indicated as follows: The Company and subsidiaries are mainly engaged in highway investment and operation management. The Company formulates the specific accounting policies and accounting estimates for revenue recognition and other transactions and events in accordance with the actual business operation characteristics of the Company and subsidiaries, and provisions of the relevant accounting standard for business enterprises, please see Note 5.24 “Revenue” for details. The description of significant account judgment and estimates made by management, please see Note 5.28 “Significant accounting judgment and estimates.” 1. Statement of Compliance with the Accounting Standards for Business Enterprises The financial statements of the Company are recognized and measured in accordance with the regulations in the Chinese Accounting Standards for Business Enterprises and they give a true and fair view of the financial position, business result and cash flow of the Company as of June 30, 2019. In addition, the financial statements of the Company comply, in all material respects, with the revised disclosing requirements for financial statements and the Compilation Rules for Information Disclosure by Companies Offering Securities to the Public No.15—General Provisions on Financial Reports (2014 Revision) issued by China Securities Regulatory Commission (CSRC) in 2014. 2. Accounting period The accounting period of the Company is classified as interim period and annual period. Interim period refers to the reporting period shorter than a complete annual period. The accounting period of the Company is the calendar year from January 1 to December 31. 3.Operating cycle The normal business cycle refers to the period from the purchase of assets for processing to the realization of cash or cash equivalents. The Company takes 12 months as a business cycle and uses it as a criterion for liquidity classification of assets and liabilities. 4.Standard currency for bookkeeping Yuan (CNY) is the currency of the primary economic environment in which the Company and its domestic subsidiaries operate. Therefore, the Company and its domestic subsidiaries choose CNY as their functional currency. The Company adopts CNY to prepare its functional statements. 5.Accountings for Business Combinations under the Same Control & Business Combinations not under the Same Control A business combination is a transaction or event that brings together two or more separate entities into one reporting entity. Business combinations are classified into business combinations involving enterprises under common control and business combinations not involving enterprises under common control. 72 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 1.Business Combinations under the Same Control A business combination involving enterprises under common control is a business combination in which all of the combining enterprises are ultimately controlled by the same party or parties both before and after the combination, and that control is not transitory. For a business combination involving enterprises under common control, the party that, on the combination date, obtains control of another enterprise participating in the combination is theabsorbing party, while that other enterprise participating in the combination is a party being absorbed. Combination date is the date on which the absorbing party effectively obtains control of the party being absorbed. The assets and liabilities obtained are measured at the carrying amounts as recorded by the enterprise being combined at the combination date. The difference between the carrying amount of the net assets obtained and the carrying amount of consideration paid for the combination (or the total face value of shares issued) is adjusted to the capital premium (or share premium) in the capital reserve. If the balance of the capital premium (or share premium) is insufficient, any excess is adjusted to retained earnings. The cost of a combination incurred by the absorbing party includes any costs directly attributable to the combination shall be recognized as an expense through profit or loss for the current period when incurred. 2. Business Combinations not under the Same Control A business combination involving enterprises not under common control is a business combination in which all of the combining enterprises are not ultimately controlled by the same party or parties both before and after the business combination. For a business combination not involving enterprises under common control, the party that, on the acquisition date, obtains control of another enterprise participating in the combination is the acquirer, while that other enterprise participating in the combination is the acquiree. Acquisition date is the date on which the acquirer effectively obtains control of the acquiree. For a business combination not involving enterprise under common control, the combined cost including the sum of fair value, at the acquisition date, of the assets given, liabilities incurred or assumed, and equity securities issued by the acquirer. The intermediary expenses incurred by the acquirer in respect of auditing, legal services, valuation and consultancy services, etc. and other associated administrative expenses attributable to the business combination are recognized in profit or loss when they are incurred. The transaction cost arose from issuing of equity securities, or liability securities shall be initially recognized as equity securities or liability securities. The contingent consideration related to the combination shall be booked as combination cost at the fair value at the acquisition date. If within the 12 months after the acquisition, additional information can prove the existence of related information at the acquisition date and the contingent consideration need to be adjusted, goodwill can be adjusted. Combination cost of the acquirer’s interest and identifiable net assets of the acquirer acquired through the business combination shall be measured by the fair value at the acquisition date. Where the costof combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference shall be recognized as goodwill. Where the cost of combination is less than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets, the difference shall be accounted for according to the following requirements: (i) the acquirer shall reassess the measurement of the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities and measurement of the cost of combination; (ii) if after that reassessment, the cost of combination is still less than the acquirer’s interest in the fair values of the acquiree’s identifiable net assets, the acquirer shall recognize the remaining difference immediately in profit or loss for the current period. Where the temporary difference obtained by the acquirer was not recognized due to conformity with the conditions applied for recognition of deferred income tax, if, within the 12 months after acquisition, additional 73 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 information can prove the existence of related information at acquisition date and the expected economic benefits on the acquisition date arose from temporary deductible difference by the acquiree can be achieved, relevant income tax assets can be recognized, and goodwill offset. If the goodwill is not sufficient, the difference shall be recognized as the profit of the current period. Apart from above, the differences shall be taken into profit or loss of the current period if the recognition of deferred income tax assets is related to the combination. For a business combination not involving enterprise under common control, which achieved in stages that involves multiple exchange transactions, according to “The notice of the Ministry of Finance on the issuance of Accounting Standards Interpretation No. 5” (CaiKuai [2012] No. 19) and Article 51 of “Accounting Standards for Business Enterprises No.33 - Consolidated Financial Statements” on the “package deal” criterion (see Note 4.5.2), to judge the multiple exchange transactions whether they are the "package deal". If it belongs to the “package deal” in reference to the preceding paragraphs of this section and the Notes described in 4.13 “long-term investment” accounting treatment, if it does not belong to the “package deal” to distinguish the individual financial statements and the consolidated financial statements related to the accounting treatment: In the individual financial statements, the total value of the book value of the acquiree's equity investment before the acquisition date and the cost of new investment at the acquisition date, as the initial cost of the investment, the acquiree's equity investment before the acquisition date involved in other comprehensive income, in the disposal of the investment will be in other comprehensive income associated with the use of infrastructure and the acquiree directly related to the disposal of assets or liabilities of the same accounting treatment (that is, except in accordance with the equity method of accounting in the defined benefit plan acquiree is remeasured net changes in net assets or liabilities other than in the corresponding share of the lead, and the rest into the current investment income). In the combination financial statements, the equity interest in the acquiree previously held before the acquisition date re-assessed at the fair value at the acquisition date, with any difference between its fair value and its carrying amount is recorded as investment income. The previously-held equityinterest in the acquiree involved in other comprehensive income and other comprehensive income associated with the purchase of the foundation should be used party directly related to the disposal of assets or liabilities of the same accounting treatment (that is, except in accordance with the equity method of accounting in the acquiree is remeasured defined benefit plans other than changes in net liabilities or net assets due to a corresponding share of the rest of the acquisition date into current investment income). 6.Methods for Preparing the Consolidated Financial Statements (1)The scope of consolidation The scope of consolidation for the consolidated financial statements is determined on the basis of control. Control is the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its operating activities. The scope of consolidation includes the Company and all of the subsidiaries. The subsidiary is an enterprise or entity under the control of the Company. Once the change in the relevant facts and circumstances leading to the definition of the relevant elements involved in the control of the change, the Company will be re-evaluated. (2) Preparation of the consolidated financial statements The subsidiary of the Company is included in the consolidated financial statements from the date when the control over the net assets and business decisions of the subsidiary is effectively obtained and excluded from the date when the control ceases. For a subsidiary disposed of by the Company, the operating results and cash flows before the date of disposal (the date when control is lost) are included in the consolidated income statement and consolidated 74 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 statement of cash flows, as appropriate. For a subsidiary disposed of during the period, no adjustment is made to the opening balance of the consolidated financial statements. For a subsidiary acquired through a business combination not under common control, the operating results and cash flows from the acquisition (the date when the control is obtained) are included in the consolidated income statement and consolidated statement of cash flows, as appropriate; no adjustment is made to the opening balance and comparative figures in the consolidated financial statements. Where a subsidiary was acquired during the reporting period, through a business combination involving enterprises under common control, the financial statements of the subsidiary are included in the consolidated financial statements. The results of operations and cash flow are included in the consolidated balance sheet and the consolidated income statement, respectively, based on their carrying amounts, from the date that common control was established, and the opening balances and the comparative figures of the consolidated financial statements are restated. When the accounting period or accounting policies of a subsidiary are different from those of theCompany, the Company makes necessary adjustments to the financial statements of the subsidiary based on the Company’s own accounting period or accounting policies. Where a subsidiary was acquired during the reporting period through a business combination not under common control, the financial statements were reconciled on the basis of the fair value of identifiable net assets at the date of acquisition. Intra-Group balances and transactions and any unrealized profit or loss arising from intra-Group transactions are eliminated in preparing the consolidated financial statements. Minority interest and the portion of the net profit or loss not attributable to the Company are presented separately in the consolidated balance sheet within shareholders’/ owners’ equity and net profit. Net profit or loss attributable to minority shareholders in the subsidiaries is presented separately as minority interest in the consolidated income statement below the net profit line item. When the amount of loss for the current period attributable to the minority shareholders. of a subsidiary exceeds the minority shareholders’ portion of the opening balance of shareholders’/equity of the subsidiary, the excess is allocated against the minority interests. When the Company loses control of a subsidiary due to the disposal of a portion of an equity investment or other reasons, the remaining equity investment is re-measured at its fair value at the date when control is lost. The difference between 1) the total amount of consideration received from the transaction that resulted in the loss of control and the fair value of the remaining equity investment and 2) the carrying amounts of the interest in the former subsidiary’s net assets immediately before the loss of the control is recognized as investment income for the current period when control is lost. Other comprehensive income related to the former subsidiary's equity investment, using the foundation and the acquiree directly related to the disposal of the same assets or liabilities are accounted when the control is lost (i.e., in addition to the former subsidiary, which is remeasured at the net defined benefit plan or changes in net assets and liabilities resulting from, the rest subsidiaries are transferred to the current investment income). The retained interest is subsequently measured according to the rules stipulated in the - “Chinese Accounting Standards for Business Enterprises No.2 - Long-term equity investment” or “Chinese Accounting Standards for Business Enterprises No.22 - Determination and measurement of financial instruments”. See Note 5.14 Long-term equity investments and Note 5.10 Financial instruments for details. Where loss of control over a subsidiary result from multiple transactions (agreements), the assessment shall be made as to whether the multiple agreements shall be viewed as a whole as a single transaction. Multiple agreements giving rise to loss of control over a subsidiary is generally viewed as a whole as a single transaction if the terms, conditions and economic implications of the multiple agreements satisfy one or more of the following 75 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 conditions: 1) the agreements are entered into simultaneously or taking into account the implication of each other; 2) the business objective cannot be achieved without successful completion of all the agreements; 3)the occurrence of oneagreement is dependent on the result of at least another one agreement; and/or 4) any one single agreement is not recognized as economic, and the agreements as a whole is economic. Where multiple agreements do not satisfy the conditions of being viewed as a single transaction, each agreement shall be treated and accounted for in accordance with the provisions of disposal of long-term equity investments not resulting loss of control (see Note 5.14.2.4) or loss of control due to disposal of shares or other events (see the previous paragraph). Where multiple agreements satisfy the conditions of being viewed as a single transaction, each agreement shall be treated and accounted for as a transaction which results in loss of control; differences between the consideration for disposals prior to loss of control and the net assets proportionate to the shares disposed prior to loss of control are recognized as other comprehensive income in the consolidated financial statements and transferred to profit or loss at the time of loss of control. 7.Joint venture arrangements classification and Co-operation accounting treatment A joint arrangement is an arrangement of which two or more parties have joint control. A joint arrangement is either a joint operation or a joint venture, depending on the rights and obligation of the Company in the joint arrangement. A joint operation is a joint arrangement whereby the Company has rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the Company has rights to the net assets of the arrangement. The Company accounts for joint ventures using the equity method, see Note 5.14.2.2 for details. The Company, a joint operator, recognizes in relation to its interest in a joint operation: (a) its assets, including its share of any assets held jointly; (b) its liabilities, including its share of any liabilities incurred jointly; (c) its revenue from the sale of its share of the output arising from the joint operation;(d)its share of the revenue from the sale of the output by the joint operation; and (e)its expenses, including its share of any expenses incurred jointly. When the Company enters into a transaction with a joint operation in which it is a joint operator, such as a sale or contribution of assets, the Company, prior to disposal of the assets to a third party by the joint operation, recognizes gains and losses resulting from such a transaction only to the extent of the other parties' interests in the joint operation. When there is evidence of a reduction in the net realizable value of the assets to be sold or contributed to the joint operation, or of an impairment loss of those assets which is in line with provision stipulated by CAS 8, those losses are recognized fully by the Company. When there is evidence of a reduction in the net realizable value of the assets to be purchased or of an impairment loss of those assets, the Company shall recognize its share of those losses. 8.Recognition Standard of Cash & Cash Equivalents Cash and cash equivalents of the Company include cash on hand, ready usable deposits and investments having short holding term (normally will be due within three months from the day of purchase), with strong liquidity and easy to be exchanged into certain amount of cash that can bemeasured reliably and have low risks of change. 9.Foreign Currency Transaction 1 Translation in foreign exchange transactions Transactions denominated in foreign currencies are translated into the functional currency using the transaction-date spot exchange rates. Where a transaction is conducted purely for the purpose of exchange one currency into another currency, the exchange rate used to translate the foreign currency into the functional currency is the exchange rate that is actually used for the currency exchange. 76 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 2 Translation of foreign monetary currency and non-monetary foreign currency At the balance sheet date, foreign currency monetary items are translated using the spot exchange rate at the balance sheet date. All the exchange differences thus resulted are taken to profit or loss, except for ①those relating to foreign currency borrowings specifically for construction and acquisition of qualifying assets, which are capitalized in accordance with the principle of capitalization of borrowing costs, ②hedging accounting, the exchange difference related to hedging instruments for the purpose of net oversea operating investment is recorded in the comprehensive income till the date of disposal and recognized in profit or loss of the period; exchange difference from changes of other account balance of foreign currency monetary items, ③available-for-trade is recorded into profit or loss except for amortized cost. Non-monetary foreign currency items measured at historical cost shall still be translated at the spot exchange rate prevailing on the transaction date, and the amount denominated in the functional currency is not changed. Non-monetary foreign currency items measured at fair value are translated at the spot exchange rate prevailing at the date when the fair values are determined. The exchange difference thus resulted are recognized in profit or loss for the current period or as capital reserve. (3)Conversion method of Foreign currency Financial statements Where the preparation of consolidated financial statements involves overseas operations, if any foreign currency monetary item constitutes a net investment in overseas operations in essence, the exchange difference resulting from the change of exchange rate shall be recognized as other comprehensive gains as the "conversion difference of foreign currency statements"; when dealing with overseas operations, it shall be included in the profits and losses of the current period of disposal. Foreign currency financial statements operated abroad are converted into RMB statements by the following methods: assets and liabilities in the balance sheet are converted at the spot exchange rate on the balance sheet date; shareholder equity items are converted at the spot exchange rate at the time of occurrence, except for "undistributed profit" items. The revenues and expenses in the income statement are converted with the spot exchange rate on the transaction day. The undistributed profit at the beginning of the year is the undistributed profit at the end of the year after the conversion of the previous year; the undistributed profit at the end of the year is calculated and shown according to the items of the profit distribution after the conversion; the difference between the total amount of assets and liabilities and shareholders' equity after the conversion is recognized as the conversion difference of foreign currency statements and as other comprehensive income. When the foreign operation is disposed and the control right is lost, the conversion balance which is presented under the shareholders’ equities item in the balance sheet and arises from the conversion of foreign currency financial statements related to this foreign operation will be transfered into the current profit and loss fully or in the foreign operation proportion. Cash flow of foreign currency shall be converted into spot exchange rate on the date of occurrence of cash flow. The influence of exchange rate fluctuation on cash will be separately presented as an adjustment item in the Cash Flow Statement. The account at the beginning of current year and the actual amount of previous year shall be listed in accordance with the translation differences statements of the previous year. During the management of the entire owner's equity of the Company's operations abroad or the loss of control over overseas operations due to the disposal of part of the equity investment or other reasons, the converted balance of the foreign currency statements related to the overseas operations, which are attributable to the owner's rights and interests of the parent Company, as shown below in the balance sheet, shall be transferred to the current profit and loss. During the management of part of the equity investment or other reasons leading to the reduction of the 77 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 proportion of holding overseas operating rights and interests but not losing control over overseas operations, the balance of foreign currency statement conversion related to the part of overseas operation and disposal will be attributed to the rights and interests of minority shareholders and shall not be transferred to current profits and losses. During the management of part of the equity of an overseas joint venture or joint venture, the difference in the conversion of foreign currency statements related to the overseas operation shall be transferred to the profits and losses of the current period according to the proportion of disposing of the overseas operation. 10.Financial instruments The Company recognizes the financial assets or liabilities when involved in financial instruments’ agreements. (1)Classification, recognition and measurement of financial assets In accordance with the characteristics of business model for managing financial assets and the contractual cash flow of financial assets, the Company classifies financial assets into: financial assets measured in amortized cost; financial assets measured at fair value and their's changes are included in other comprehensive income; financial assets measured at fair value and their's changes are included in current profits and losses. The initial measurement of financial assets is calculated by using fair value. For financial assets measured at fair value, whose changes are included in current profits and losses, relevant transaction costs are directly included in current profits and losses; For other types of financial assets, relevant transaction costs are included in the initial recognition amount. Accounts receivable or notes receivable arising from the sale of products or the provision of labor services that do not include or take into account significant financing components are initially recognized by the Company in accordance with the amount of consideration that the Company is expected to be entitled to receive. ①Financial assets measured at amortized cost The business model of the Company's management of financial assets measured by amortized cost is aimed at collecting the contractual cash flow, and the contractual cash flow characteristics of such financial assets are consistent with the basic lending arrangements, that is, the cash flow generated on a specific date is only the payment of principal and interest based on the amount of outstanding principal. For such financial assets, the Company adopts the method of real interest rate and makes subsequent measurement according to the cost of amortization. The profits or losses resulting from amortization or impairment are included in current profits and losses. ②Financial assets measured at fair value and changes included in other comprehensive income The Company's business model for managing such financial assets is to collect the contractual cash flow, and the contractual cash flow characteristics of such financial assets are consistent with the basic lending arrangements. The Company measures such financial assets at fair value and their changes are included in other comprehensive gains, but impairment losses or gains, exchange gains and losses and interest income calculated according to the actual interest rate method are included in current profits and losses. In addition, the Company designated some non-trading equity instrument investments as financial assets measured at fair value with changes included in other comprehensive income. The Company includes the relevant dividend income of such financial assets in current profits and losses, and the changes in fair value in other comprehensive gains. When the financial asset ceases to be recognized, the accumulated gains or losses previously included in other comprehensive gains shall be transferred into retained income from other comprehensive income, and not be included in current profit and loss. ③Financial assets measured at fair value and changes included in current profits and losses The Company includes the above-mentioned financial assets measured at amortized cost and those measured 78 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 at fair value and their's changes in financial assets other than financial assets of comprehensive income and classifies them as financial assets measured at fair value and their's changes that are included in current profits and losses. In addition, the Company designates some financial assets as financial assets measured at fair value and includes their changes in current profits and losses in order to eliminate or significantly reduce accounting mismatches during initial recognition. In regard with such financial assets, the Company adopts fair value for subsequent measurement, and includes changes in fair value into current profits and losses. (2)Classification, recognition and measurement of financial liabilities The Group’s financial liabilities are, on initial recognition, classified into financial liabilities at fair value through profit or loss and other financial liabilities. For financial liabilities at fair value through profit or loss, relevant transaction costs are immediately recognized in profit or loss for the current period, and transaction costs relating to other financial liabilities are included in the initial recognition amounts. .1 Financial liabilities measured by the fair value and the changes recorded in profit or loss The classification by which financial liabilities held-for-trade and financial liabilities designed at the initial recognition to be measured by the fair value follows the same criteria as the classification by which financial assets held-for-trade and financial assets designed at the initial recognition to be measured by the fair value and their changes are recorded in the current profit or loss Transactional financial liabilities (including derivatives belonging to financial liabilities) are subsequently measured according to fair value. Except for hedging accounting, changes in fair value are included in current profits and losses. Financial liabilities designated as financial liabilities that are measured at fair value and their's changes are included in current profits and losses. The liabilities are included in other comprehensive gains due to changes in fair value caused by changes in the Company's own credit risk, and when the liabilities are terminated, the changes in fair value caused by changes in its own credit risk of other comprehensive gains are included in the cumulative changes in its fair value caused by changes in its own credit risk of other comprehensive gains. The amount is transferred to retained earnings. The remaining changes in fair value are included in current profits and losses. If the above-mentioned way of dealing with the impact of the changes in the credit risk of such financial liabilities will result in or expand the accounting mismatch in the profits and losses, the Company shall include all the profits or losses of such financial liabilities (including the amount of the impact of the changes in the credit risk of the enterprise itself) into the current profits and losses. ② Other financial liabilities In addition to the transfer of a financial asset is not in conformity with the conditions to stop the recognition or formed by its continuous involvement in the transferred financial asset, financial liabilities and financial guarantee contract of other financial liabilities classified as financial liabilities measured at the amortized cost, measured at the amortized cost for subsequent measurement, recognition has been stopped or amortization of the profit or loss is included in the current profits and losses. (3) Recognition basis and measurement methods for transfer of financial assets Financial assets satisfying one of the following conditions shall be terminated and recognized: ① The contractual right to collect the cash flow of the financial asset is terminated; ② The financial asset has been transferred, and almost all the risks and rewards in the ownership of the financial asset have been transferred to the transferee; ③ The financial asset has been transferred, although the enterprise neither transfers nor retains almost all the risks and rewards in the ownership of the financial asset, but it abandoned control of the financial assets. In case that the enterprise does not transfer or retain almost all risks and rewards on financial assets ownership nor waive to control these assets, relevant financial assets shall be recognized in accordance with the 79 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 degree for continued involvement of financial assets transferred and relevant liabilities shall be recognized correspondingly. westbank The term "continuous involvement in the transferred financial asset" shall refer to the risk level that the enterprise faces resulting from the change of the value of the financial asset. If the overall transfer of the financial assets satisfies the derecognition criteria, the difference between the book value of the transferred financial assets and the sum of the consideration received from transfer and cumulative change in fair value previously recognized in other comprehensive income is accounted into the current profit or loss. In case that the partial transfer of financial assets meets de-recognition conditions, the book value of financial assets transferred shall be allocated as per respective fair value between de-recognized or not de-recognized parts, and the difference between the sum of the consideration received due to transfer with the accumulated amount of fair value changes that is previously included in other comprehensive income and shall be allocated to de-recognized parts and the aforesaid book amount allocated shall be included in the current profit or loss. The Company shall determine whether almost all the risks and rewards of the ownership of the financial assets sold by means of recourse or endorsed to transfer the financial assets it holds have been transferred. If almost all the risks and rewards in the ownership of the financial asset have been transferred to the transferee, the confirmation of the financial asset shall be terminated; if almost all the risks and rewards in the ownership of the financial asset have been retained, the confirmation of the financial asset shall not be terminated; if neither the transfer nor the retention of almost all the risks and rewards in the ownership of the financial asset has been made. In case of remuneration, it shall continue to determine whether the enterprise has retained control over the assets and conduct accounting treatment in accordance with the principles described in the preceding paragraphs. (4) Termination confirmation of financial liabilities If the current obligation of a financial liability (or part thereof) has been discharged, the Company shall terminate the recognition of the financial liability (or part thereof). If the Company (the debtor) signs an agreement with the lender to replace the original financial liabilities by assuming new financial liabilities, and the contract terms of the new financial liabilities are substantially different from those of the original financial liabilities, it shall terminate the recognition of the original financial liabilities and at the same time confirm a new financial liabilities. If the Company substantially amends the contract terms of the original financial liabilities (or part thereof), it shall terminate the confirmation of the original financial liabilities and at the same time confirm a new financial liabilities in accordance with the revised terms. If the financial liabilities (or part thereof) are terminated, the difference between their book value and the consideration paid (including the transferred non-cash assets or liabilities assumed) shall be included in the profits and losses of the current period. (5)Offsetting financial assets and financial liabilities When the Company has a legal right that is currently enforceable to set off the recognized financial assets and financial liabilities, and intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously, a financial asset and a financial liability shall be offset and the net amount is presented in the balance sheet. Except for the above circumstances, financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset. (6) Method for determining the fair value of financial assets and financial liabilities Fair value refers to the price that a market participant must pay to sell or transfer a liability in an orderly transaction that occurs on the measurement date. The fair value of financial instruments existing in an active market is determined by the Company according to its quoted price in this market. westbank The quoted prices in the active market refer to the prices, which are easily available from the stock exchanges, brokers, industry 80 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 associations, pricing service institutions and etc. at a fixed term, and which represent the prices at which actually occurred market transactions are made under fair conditions.¨ In can a financial instrument does not exist in active markets, its fair value shall be determined by the Company with assessment techniques. The value appraisal techniques mainly include the prices adopted by the parties, who are familiar with the condition, in the latest market transaction upon their own free will, the current fair value obtained by referring to other financial instruments of the same essential nature, the cash flow capitalization method and the option pricing model, etc. In valuation, the Company adopts valuation techniques that are applicable in the current situation and supported by sufficient data and other information to select input values consistent with the characteristics of assets or liabilities considered by market participants in the transactions of related assets or liabilities, and give priority to the use of relevant observable input values as far as possible. Unallowable values are used if the relevant observable input values are not available or are not practicable. (7)Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. The consideration received from issuing equity instruments, net of transaction costs, are added to shareholders’ equity. All types of distribution (excluding stock dividends) made by the Company to holders of equity instruments are deducted from shareholders’ equity. The dividends (including "interest" generated by the tools classified as equity instruments) distributed by the Company's equity instruments during the period of their existence shall be treated as profit distribution. 11. Impairment provision for financial assets The Company requires to confirm that the financial assets lost by impairment are financial assets measured by amortized cost, investment in debt instruments and lease receivables which are measured at fair value and whose changes are included in other comprehensive gains, mainly including notes receivable, accounts receivable, other receivables, creditor's rights investment, other creditor's rights investment and long-term receivables and etc. In addition, provision for impairment and confirmation of credit impairment losses are also made for contract assets and some financial guarantee contracts in accordance with the accounting policies described in this section. (1) Method of confirming impairment provision Based on anticipated credit loss, the Company calculates impairment preparation and confirms credit impairment loss according to the applicable anticipated credit loss measurement method (general method or simplified method). Credit loss refers to the difference between the cash flow of all contracts discounted according to the original real interest rate and the expected cash flow of all contracts receivable according to the contract, that is, the present value of all cash shortages. Among them, the Company discounts the financial assets purchased or originated with credit impairment at the actual interest rate adjusted by credit. The general method of measuring anticipated credit loss is whether the credit risk of the Company's financial assets (including other applicable items such as contract assets, similarly hereinafter) has increased significantly since the initial recognition on each balance sheet day. If the credit risk has increased significantly since the initial recognition, the Company shall measure the loss preparation according to the amount equivalent to the expected credit loss in the whole duration. If the credit risk has not increased significantly since the initial recognition, the Company shall measure the loss preparation according to the amount equivalent to the expected credit loss in the next 12 months. The Company shall consider all reasonable and evidenced information, including forward-looking information, when evaluating expected credit losses. Assuming that their credit risk has not increased significantly since the initial recognition, the Company may 81 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 choose to measure the loss reserve according to the expected credit loss in the next 12 months for financial instruments with low credit risk on the balance sheet date. (2) Criteria for judging whether credit risk has increased significantly since the initial recognition If the probability of default of a financial asset on the estimated duration of the balance sheet is significantly higher than the probability of default during the estimated duration of the initial recognition, the credit risk of the financial asset is significantly increased. Except for special circumstances, the Company uses the change of default risk in the next 12 months as a reasonable estimate of the change of default risk in the entire duration to determine whether the credit risk has increased significantly since the initial recognition. (3) A portfolio-based approach to assessing expected credit risk The Company shall evaluate the credit risk of financial assets with distinct differences in credit risk, such as tthe receivables in dispute with the other party or involving litigation and arbitration, and receivables that has been proved that the debtor may not be able to fulfill the obligation of repayment, etc. In addition to the financial assets that assess credit risk individually, the Company shall divide financial assets into different groups based on common risk characteristics, and assess credit risk on the basis of portfolio. (4) Accounting treatment of impairment of financial assets At the end of the duration, the Company shall calculate the anticipated credit losses of various financial assets. If the anticipated credit losses are greater than the book value of its current impairment provision, the difference is deemed as impairment loss. If the balance is less than the book value of the current impairment provision, the difference is deemed as impairment profit. (5) Method of determining credit losses of various financial assets ①Receivable In regard to receivables without significant financing components, the Company shall measure loss preparation according to the amount of anticipated credit loss equivalent to the entire duration. In regard to accounts receivable with significant financing components, the Company shall choose to measure loss preparation according to the amount equivalent to the expected credit loss within the duration all the time. In addition to the accounts receivable that assesses the credit risk individually, receivables are divided into different portfolios based on their credit risk characteristics: Items Basis for determining combination: Protfolio 1 This portfolio is characterized by the aging of receivables as a credit risk. For the above portfolio 1, the measurement method of bad debts reserve is the aging analysis method, specifically as follows Aging Proportion (%) Other receivable proportion(%) Within 1 year(Including 1 year) 0 0 1-2 years 10 10 2-3 years 30 30 3-4 years 50 50 4-5 years 90 90 Over 5 years 100 100 ②Other receivable The Company has measured the impairment loss based on the amount of expected credit losses in the next 12 months or the entire duration, based on whether the credit risk of other receivables has increased significantly since the initial recognition. In addition to the other accounts receivable which assesses the credit risk individually, 82 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 they are divided into different portfolios based on their credit risk characteristics: Items Basis for determining combination: Protfolio 1 This portfolio is a collection of various deposits, advances, pledges and other receivables in daily activities. Protfolio 2 This portfolio is a reserve fund borrowed by employees in their daily business activities. Protfolio 3 Other receivables other than the above portfolio. For portfolios 1 and 2 above, no provision for bad debts is generally made unless there is evidence of loss of assets. For portfolio 3 above, the provision for bad debts is the same as portfolio 1 for receivables. ③ Creditor's rights investment Creditor's rights investment mainly accounts for bond investment measured by amortized cost, etc. The Company has measured the impairment loss based on the amount of expected credit losses in the next 12 months or the entire duration, based on whether the credit risk has increased significantly since the initial recognition. The Company adopts the method of evaluating credit risk with individual assets for creditor's rights investment. 12.Inventory Whether the Company needs to comply with the disclosure requirements for specific industrie No 1.Investories class: The company’s stocks can be classified as: raw materials, etc. 2. Valuation method of inventory issued :The company calculates the prices of its inventories according to the weighted averages method or the first-in first-out method. 3. Determination of net realizable value of inventories and impairment allowance for inventories Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, the estimated costs necessary to make the sale and relevant taxes. Net realizable value is determined on the basis of clear evidence obtained and takes intoconsideration the purpose of holding inventories and effect of post balance sheet events. At the balance sheet date, inventories are measured at the lower of the cost and net realizable value. If the net realizable value is below the cost of inventories, a provision for decline in value of inventories is made. The provision for inventories decline in value is normally determined by the difference of the cost of the individual item less its realizable value. For large quantity and low-value items of inventories, provision for decline in value is made based on categories of inventories. For items of inventories relating to a product line that are produced and marketed in the same geographical area, have the same or similar end users or purposes, and cannot be practicably evaluated separately from other items in that product line provision for decline in value is determined on an aggregate basis. After the provision for decline in value of inventories is made, if the circumstances that previously caused inventories to be written down below cost no longer exist so that the net realizable value of inventories is higher than their cost, the original provision for decline in value is reversed and the reversal is included in profit or loss for the period. 4. Physical inventories are managed by the perpetual inventory taking system. 5. Amortization of low-value consumables and packaging materials. 83 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Low-value consumables and packaging materials are fully amortized at the time of issuance. 13. Held-for-sale assets and disposal group The Company classify a non-current asset or disposal group as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the following conditions shall be met: a) the asset (or disposal group) must be available for immediate sale in its present condition subject to terms that are usual and customary for sales of such assets or disposal groups; b) the Company has made the resolution on the disposal plan and must be committed to a plan to sell the asset (or disposal group); c) the sale is expected to be completed within one year from the date of classification. A disposal group is a group of assets to be disposed of, by sale or otherwise, together as a group in a single transaction, and liabilities directly associated with those assets that will be transferred in the transaction. The group shall include goodwill acquired in a business combination if the group is a cash-generating unit to which goodwill has been allocated in accordance with the requirements of Accounting Standard for Business Enterprises No. 8 – Impairment of assets. The Company measure a non-current asset or disposal group classified as held for sale at the lower of its carrying amount and fair value less costs to sell on initial recognition and subsequent remeasurement on the balance sheet date. An impairment loss is recognized when the carrying amount is higher than the fair value less costs to sell, and allowance for impairment is recognized accordingly. For the disposal group, the recognized impairment loss on assets is offset against the carrying amount of the goodwill in the disposal group, and then reduced in proportion of the book value of the non-current assets applicable to "Accounting Standard for Business Enterprises No. 42 - Non-current Assets Held for Sale, Disposal Group and Discontinued Operations (hereinafter referred to as "held for sale accounting principle") measurement requirements. The Company shall recognize a gain during the period for any subsequent increase in fair value less costs to sell of an asset, but not in excess of the cumulative impairment loss that has been recognized after the reclassification to non-current assets held for sale. The book value of assets in the disposal group is increased proportionately according to the proportion of the book value of each non-current asset except for goodwill. Impairment loss recognized before the reclassification to non-current assets held for sell shall not be recovered. Non-current asset or non-current asset in the disposal group classified as held for sale are not subject to depreciation or amortization. The interest and other expenses on liabilities held in the disposal group for sale are continuously recognized. Non-current assets or disposal group that no longer meet the conditions of non-current asset held for sell shall be removed from the category, and shall be measured at the lower of the following: (a) The carrying amount before classification as held for sale after adjustment of depreciation, amortization or impairment that should be recognized if it is not classified as non-current assets held for sell; (b) recoverable amount. .14. Long-term equity investments Long-term equity investments in this section refer to the long-term investment through which the Company has control, joint control, or material influence on the investee. Long-term equity investments through which the Company does not have control, joint control or material influence on the investee shall be recognized as available-for-sale financial assets or financial assets measured by fair value with changes in fair value recognized in profit or loss. See 10 for details. Joint control is the contractually agreed sharing of control over economic activity and exists when the 84 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies. (1)Determination of Investment cost Long-term equity investment acquired through business combination under common control are measured at the acquirer's share of the combination date book value of the acquiree's net equity in the ultimate controller's consolidated financial statements. The difference between the initial cost and cash paid, non-monetary assets transferred, and liabilities assumed by is adjusted to capital reserves, and to retained earnings if capital reserves are insufficient. If the consideration is paid by issuing equity instruments, the initial cost is measured at the acquirer's share of the combination date book value of the acquiree's net equity in the ultimate controller's consolidated financial statements, with the face value of the equity instruments issued recognized as share capital and the difference between the initial cost and the face value of the equity instruments issued adjusted to capital reserves, and to retained earnings if capital reserves is insufficient. For business combination involving entities under common control achieved through multiple transactions (acquisition in stages), the multiple agreements are assessed to determine whether they should be viewed as a lump-sum purchase. Where multiple agreements of an acquisition in stages are viewed as a lump-sum purchase, the transactions are viewed as one transaction that acquires the control power. Where multiple agreements of an acquisition fail the conditions of a lump-sum purchase, long-term equity investment acquired through business combination under common control are measured at the acquirer's share of the combination date book value of the acquiree's net equity in the ultimate controller's consolidated financial statements. The difference between the initial cost, and the book value of the long-term equity investment before combination date and considerations paid to acquire new shares on the combination date, is adjusted to capital reserves, and to retained earnings if capital reserves are insufficient. Long-term equity investment acquired through business combination not under common control is measured at combination cost on the combination date. The combination cost includes assets contributed by the purchaser, liabilities incurred or assumed by, and fair value of the equity instruments issued by the acquirer. For business combination involving entities not under common control achieved through multiple transactions (acquisition in stages), the multiple agreements are assessed to determine whether they should be viewed as a lump-sum purchase. Where multiple agreements of an acquisition in stages are viewed as a lump-sum purchase, the transactions are viewed as one transaction that acquires the control power. Where multiple agreements of an acquisition fail the conditions of a lump-sum purchase, long-term equity investment acquired through business combination not under common control are measured at the sum of the original book value of the equity investment on the investee and the new investment cost, which is regarded as the new initial cost of the long-term investment when transferred to cost method. If the original equity is measured by the equity method, not accounting treatment is applied to relevant other comprehensive income temporarily. The audit, legal services, valuation, and other directly associated administrative expenses incurred by the acquirer are recognized in profit or loss on the transaction dates. Long-term equity investments acquired not through business combination are measured at cost onnitial recognition. Depending on the way of acquisition, the cost of acquisition can be the total cash paid, the fair value of equity instrument issued, the contract price, the fair value or book value of the assets given away in the case of non-monetary asset exchange, or the fair value of the relevant long-term equity investments. The cost of acquisition of a long-term equity investment acquired not through business combination also includes all directly associated expenses, applicable taxes and fees, and other necessary expenses. When the Company increase investment to have material influence or joint control, but not control over the investee, long-term investments are measured at the sum of the fair value of initial equity investment and cost of new investment as defined in 85 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 CAS22-Recognition and Measurement of Financial Assets. (2)Subsequent measurement and recognition and measurement of gain or loss Where a long-term equity investment gives the Company either joint control or significant influence over the respective investee, the investment is subsequently measured using the equity method. Where a long-term equity investment gives the Company control over the respective investee, the investment is subsequently measured at cost. ① Long-term equity investments measured at cost A long-term equity investment is measured at the cost of investment, excluding declared cash dividends or profit pending distribution included in the consideration paid. Investment income for the relevant period from a long-term equity investment measured at cost is recognized as the Company's share of the cash dividends or profit declared for distribution by the investee. ② Long-term equity investments measured using the equity method When the cost of a long-term equity investment measured using the equity method on initial recognition exceeds the Company's share of the fair value of the respective investee's net identifiable assets, no adjustment is made to the cost of the investment for the excess. When the Company's share of the fair value of an investee's net identifiable assets exceeds the cost of the respective long-term equity investment measured using the equity method on initial recognition, adjustment is made to the cost of the investment for the difference and the difference is carried to profit or loss for the period during which the investment is recognized. Investment income or loss and other comprehensive income for the relevant period from a long-term equity investment measured using the equity method is measured at the Company's share of the net profit or loss and other comprehensive income of the respective investee for the relevant period, and the book value of long-term equity investments is adjusted accordingly. If the investee declares profit distribution or cash dividends, long-term equity investments are reduced by the Company’s share of declared profit distribution or cash dividends in the investee. Long-term equity investments will be adjusted, and capital reserves are recognized with variations other than net profit or loss, other comprehensive income, and profit distribution. When computing the Company's share of the net profit or loss of the investee for the relevant period, net profit or loss of the investee for the relevant period is adjusted, if necessary, for the fair value of the investee's identifiable assets and identifiable liabilities on acquisition and the Company's accounting policies and accounting period. Investment income and other comprehensive income is recognized accordingly. The computation of the Company's share of the net profit or loss of the investee for the relevant period also eliminates unrealized profit and loss arising from transactions between the Company and the investee (a joint venture or associate, whichever is applicable) and contributing or selling assets to the investee which forms an operation, to the extent of the Company's share calculated by the Company's shareholding in the investee for the relevant period, except for the unrealized loss resulted from impairment of transferred assets. When contributing assets to the joint venture or associate by the Company forms an operation, and the investor acquires the long-term equity investment without control, long-term equity investments are measured at fair value of the contributed operations, with the difference between initial investment cost and book value of the contributed operation fully recognized in profit or loss for the period. When selling assets to the joint venture or associate by the Company forms an operation, the difference between considerations received and book value of the operation is fully recognized in profit and loss for the period. When purchasing assets from the joint venture or associate by the Company belongs to an operation, income and losses are fully recognized as specified in CAS20-Business Combination. When the Company's share of an investee's net loss exceeds the sum of the carrying amount of the respective long-term equity investment measured using the equity method and other investments in the investee, the carrying amount of the long-term equity investment and other investments in the investee is reduced to zero. If the Company is obliged to share loss of the investee after 86 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 its long-term equity investment and other investments have been reduced to zero, an investment loss and provision is recognized to the extent of the estimated obligation. If the investee reports profits in subsequent periods, the Company only recognizes its share of profit after its share of profit equals the share of loss not recognized. For long-term equity investments in associates and joint ventures which had been held by the Company before its first time adoption of new accounting standards, where the initial investment cost of a long-term equity investment exceeds the Company’s share in the investee’s net assets at the time of acquisition, the excess is amortized and is recognized in profit or loss on a straight-line basis over the original remaining life. ③ Acquisition of minority interests If minority interests in an investee is acquired by the Company, during the Company's preparation of the consolidated financial statements, the difference between the Company's cumulative share of the investees net assets calculated on the basis of the new shareholding in the investee from the acquisition date (or combination date) and the Company's investment in the investee following the minority interest acquisition is adjusted to capital reserves, and to retained earnings if capital reserves is insufficient. ④Disposal of long-term equity investments On the consolidated financial statements, when partly disposal of a long-term equity investment in a subsidiary which does not cause loss of control over the subsidiary, the difference between the consideration for disposal and the net identifiable asset given away proportionate to the disposed shares in the subsidiary is recognized in equity; partly disposal of a long-term equity investment in a subsidiary which causes loss of control over the subsidiary is accounted for in accordance with Note 5.6.2. The difference between the consideration for disposal of long-term equity investments and the carrying amount of the long-term equity investments disposed of is recognized in profit or loss for the period during which the investments are disposed of. When a long-term equity investment measured using the equity method is disposed, and the residual equity after disposal is still measured using equity method, the respective cumulative other comprehensive income recognized in equity proportionate to the disposed of investment shall adopt the same accounting treatment as the investee disposes of relevant assets or liabilities directly. Movement in investee's equity other than changes in net profit or loss, other comprehensive income, and profit distribution is recognized in profit or loss proportionally. When a long-term equity investment measured using the cost method is disposed and the residual equity after disposal is still measured using cost method, other comprehensive income, which is recognized by equity method or recognition and measurement applicable to financial instruments prior to the Company's acquisition of control over the investee, shall adopt the same accounting treatment as the investee disposes relevant assets or liabilities directly on the date of loss of control, and profit or loss is recognized proportionally. Movement in investee's equity other than changes in net profit or loss, other comprehensive income, and profit distribution is recognized in profit or loss proportionally. Where the Company's control over an investee is lost due to partial disposal of investment in the investee and the Company continues to have significant influence over the investee after the partial disposal, the investment is measured by equity method in the Company's separate financial statements; where the Company's control over an investee is lost due to partial disposal of investment in the investee and the Company ceases to have significant influence over the investee after the partial disposal, the investment is measured in accordance with the recognition and measurement principles applicable to financial instruments in the Company's separate financial statements and the difference between the fair value and book value of the remaining investment at the date of loss of control is recognized in profit or loss. Cumulative other comprehensive income relevant to the investment, which is recognized by equity method or recognition and measurement principles applicable to financial instruments prior to the Company's acquisition of control over the investee, shall adopt the same accounting treatment as the investee disposes relevant assets or liabilities directly 87 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 on the date of loss of control, The investee's equity movement other than changes in net profit or loss, other comprehensive income and profit distribution, as a result of accounting by equity method, is recognized in profit or loss when control is lost. Where the remaining investment is measured by equity method, the afore-mentioned other comprehensive income and other equity movement are recognized in profit or loss proportionate to the disposal; Where the remaining investment is measured in accordance with the recognition and measurement principles applicable to financial instruments, the afore-mentioned other comprehensive income and other equity movement are fully recognized in profit or loss. Where the Company's joint control or significant influence over an investee is lost due to partial disposal of investment in the investee, the remaining investment in the investee is measured in accordance with the recognition and measurement principles applicable to financial instruments, the difference between the fair value and the book value of the remaining investment at the date of loss of joint control or significant influence is recognized in profit or loss. Cumulative other comprehensive income relevant to the investment, which is recognized by equity method or recognition and measurement principles applicable to financial instruments prior to the Company's acquisition of control over the investee, shall adopt the same accounting treatment as the investee disposes relevant assets or liabilities directly on the date of loss of control, The investee's equity movement other than changes in net profit or loss, other comprehensive income and profit distribution, as a result of accounting by equity method, is recognized in profit or loss when control is lost. Where the Company's control over an investee is lost through multiple disposals and the multiple disposals can be viewed as a lump-sum transaction, the multiple disposals are accounted for one single transaction which results in the Company's loss of control over the investee. Difference between the consideration received and the book value of the investment disposed at each time of disposal is recognized in other comprehensive income and reclassified in full to profit or loss at the period when control over the investee is lost. 15..Investment Property The measurement mode of investment property The measurement by the cost method Depreciation or amortization method Investment property is held to earn rentals or for capital appreciation or for both. Investment property includes leased or ready to transfer after capital appreciation land use rights and leased buildings. Investment property is initially measured at cost. Subsequent expenditures related to an investment real estate are likely to flow about the economic benefits of the asset, and its cost can be measured reliably, is included in the cost of investment real estate. Other subsequent expenditure in the profit or loss when it incurred. The Group uses the cost model for subsequent measurement of investment property, and in accordance with the depreciation or amortization of buildings or land use rights policy. Investment property impairment test method and impairment accrual method described in Note 20 “Non-current and non-financial assets impairment." Occupied real estate for investment property or investment property is transferred to the owner-occupied real estate or stock conversion as the recorded value after the conversion, according to the book value before the conversion. Investment property change into the Owner-occupied real estate, since the change of date for the investment property, is transferred to fixed assets or intangible assets. Change the owner-occupied property held to earn rentals or for capital appreciation, since the change of date, the fixed assets or intangible assets to investment property. Conversion occurs when converted to investment property using the cost model, as the book value 88 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 before the conversion of the recorded value after the conversion; converted to investment property measured at fair value model, the fair value of the conversion date as the recorded value after conversion. Derecognized, when the investment property is disposed of or permanently withdrawn from use and the expected economic benefits, cannot be obtained from the disposal of investment property. Proceeds on disposal of investment property is sold, transferred, retired or damaged through profit or loss after deducting the book value and related taxes. 16.Fixed assets (1)Confirmation conditions of fixed assets Fixed assets refer to physical assets owned for purpose of production, service providing, leasing or management, and operation with service life of more than one year. The fixed assets are recognized only after relevant economic interests probably flow into the Company and costs are reliably measured. The initial calculation will be made for the fixed assets based on the cost and the influence of expected disposal cost. Expected useful Residual rate Annual depreciation Type Depreciation method life(Year) (%) rate(%) Guangfo Expressway Working flow basis 28 years 0% Fokai Expressway-Xiebian to Sanbao Working flow basis 40 years 0% Section Fokai Expressway-Sanbao to Shuikou Working flow basis 30 years 0% Section Jingzhu Expressway Guangzhu Section Working flow basis 30 years 0% House Building The straight-line method 20-30 years 3%-10% 3%-4.85% Machine Equipment The straight-line method 10 years 3%-10% 9%-9.7% Transportation Equipment The straight-line method 5-8 years 3%-10% 11.25%-19.4% Electric Equipment and other The straight-line method 5-15 years 3%-10% 6%-19.4% (2)Depreciation method The Company's fixed assets of highways and bridges are depreciated within the approved charging period by workload method from the next month after reaching the intended usable state. The specific method is as follows: calculate the depreciation amount of each standard traffic flow based on the predicted total standard traffic flow or book value of roads and bridges within the tolling period, and then calculate and withdraw depreciation amount according to the actual standard traffic flow during each accounting period. Fixed assets other than highways and bridges are depreciated within the service life by the method of average life from the next month when they reach the intended usable state. Expected net residual value of fixed assets is the balance of the Company currently obtained from the 89 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 disposal of the asset less the estimated costs of disposal amount, assuming the asset is out of useful life and state the expected service life in the end. (3) Test Method for Fixed Asset Impairment and Counting & Drawing Method for Fixed Asset Impairment Reserves For the impairment test method and the impairment provision withdrawing method of the Fixed assets, please refer to “Long-term Assets Impairment in Article 21 of Important Accounting Policies and Accounting Estimates in Notes 5 of Financial Statements”. (4)Recognition and measurement of fixed assets held under financial lease A finance lease is a lease that transfers in substance all the risks and rewards incident to ownership of an asset. The title may or may not eventually be transferred. Fixed assets that are held under finance leases shall be depreciated by applying the same policy as that for the fixed assets owned by the Company. If it can be reasonably determined that the ownership of the leased assets can be obtained at the end of the lease period, the leased assets are depreciated over their useful lives; otherwise, the leased assets are depreciated over the shorter of the lease terms and the useful lives of the leased assets. (5) Other notes A fixed asset is recognized only when the economic benefits associated with the asset will probably flow to the Company and the cost of the asset can be measured reliably. Subsequent expenditure incurred for a fixed asset that meets the recognition criteria shall be included in the cost of the fixed asset, and the carrying amount of the component of the fixed asset that is replaced shall be derecognized. Otherwise, such expenditure shall be recognized in profit or loss in the period in which they are incurred. The revenue from selling or transferring or disposing of a fixed asset is booked into profit and loss after deduction of carrying value and related tax. The Company conducts a review of useful life, expected net realizable value and depreciation methods of the fixed asset at least on an annual base. Any change is regarded as a change in accounting estimates. 17.Construction-in process The cost of construction in progress is measured at the actual expenditure incurred, including construction expenditure and capitalization of borrowing costs and other applicable costs incurred prior to the completion. An item of construction in progress is reclassified to fixed asset upon completion. See Note 5.21 for details of assessment for impairment of construction in progress and impairment allowance for construction in progress. 18.Borrowing cost Borrowing costs include interests on loans, amortization of discount or premium, ancillary expenses, and foreign exchange difference on loans denominated in foreign currencies. Borrowing costs directly associated with the acquisition of construction of a qualifying asset are eligible for capitalization. Capitalization starts when expenditure on the qualifying asset is incurred, borrowing costs are incurred, or production or construction of the qualifying asset for its intended use or sales is started, whichever is later. Capitalization stops when the qualifying assets reach the condition of its intended use or sales. All other borrowing costs are recognized in profit or loss for 90 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 the period during which they are incurred. When a loan is taken out specifically for the construction of a particular qualifying asset, the interest expense capitalized for a particular period is the residual amount after deducting interest income from unused facilities for the period and/or income from temporary investment of the unused facilities for the period from the interest expense incurred for the period. Borrowing costs on general purpose financing are calculated by multiplying the weighted average of the excess of cumulative capital expenditure over the designated financing facilities with the capitalization rate of general purpose financing. The capitalisation rate of general purpose financing is calculated as the weighted average of the interest rates of general purpose financing. Foreign exchange difference on designated financing denominated in foreign currencies incurred during the capitalization period is wholly capitalized. Foreign exchange difference on general purpose financing denominated in foreign currencies is recognized in profit or loss for the period during which it is incurred. A qualifying asset is an item of fixed assets, investment property, inventories, etc. which requires a substantial period of time for the construction or production for its intended use of sales. If the construction or production of a qualifying asset stops for a period longer than three months, capitalization of borrowing costs is suspended until the construction or production is resumed. 19.Intangible assets (1) Pricing method, useful life and impairment test An intangible asset is an identifiable non-monetary asset without a physical form which is owned or control by the Company. Intangible assets are measured at cost on initial recognition. If it is probable that economic benefits associated with expenditure directly associated with an item of intangible assets will flow to the Company and the cost of the expenditure can be reliably measured, the expenditure is measured as part of the intangible asset's initial cost; all other expenditure is recognized in profit or loss for the period during which it is incurred. Land use rights acquired are generally recognized as intangible assets. In the case of a self-constructed building, the costs of acquiring the respective land use right(s) and the costs of building construction are separately recognized and measured as intangible assets and fixed assets respectively. In the case of a purchased building, the costs of acquisition are allocated to land useright(s) and building; if the reasonable allocation is impossible, the costs of acquisition as a whole are recognized and measured as fixed assets. For an item of intangible assets which is with a finite useful life, the residual amount after deducting its estimated residual value and previously recognized impairment from its cost is amortized over its estimated remaining useful life using the straight-line method starting from the month in which it reaches the conditions of its intended use of sales. Intangible assets with infinite useful life are not amortized. Useful lives of intangible assets are a review on each balance sheet date. If circumstances indicate that there is a change in the useful life of an item of intangible assets with a finite useful life, a change in accounting estimates is carried out. If circumstances indicate that the useful life of an item of intangible assets with infinite useful life becomes finite, the useful life of the intangible asset is estimated, and the intangible asset is amortized accordingly. See Note 5.21 for details of assessment for impairment of intangible assets and impairment allowance for intangible assets. (2) Research and development expenditure A research and development project is divided into research stage and development stage. Expenditure 91 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 incurred during the research stage is recognized in profit or loss for the period during which it is incurred. Expenditure incurred during the development stage is recognized as intangible assets if all of the following conditions are satisfied: a. it is technically feasible to complete the intangible asset so that it can be used or sold; and b. the Company has clear intention to complete the intangible asset and to use it or sell it; and c. it is evidential that the intangible asset will generate economic benefits either by selling the intangible asset itself or the goods produced by the intangible asset or by using it internally; and d. there are sufficient technical, financial and other resources to complete the intangible asset and the Company is able to use it or sell it, and e. expenditure incurred in the development stage of the intangible asset can be reliably measured. Where a research and development project cannot be separated into the research stage and development stage, all expenditure incurred for the project is recognized in profit or loss for the period during which it is incurred. 20. Long-term amortizable expenses An item of deferred charges is an expense incurred which brings economic benefits to the Company for a period exceeding one year starting from the transaction date. An item of deferred charges is amortized over its estimated useful life using the straight-line method. 21.Impairment of Long-term assets Non-current non-monetary assets, such as fixed assets, construction in progress, intangible assets with finite useful life, investment property measured by cost, and long-term equity investments in subsidiaries, joint ventures, and associates, are assessed for impairment on each balance sheet date. If circumstances on a balance-sheet date indicate that a non-current non-monetary asset is impaired, the recoverable amount of the asset is estimated. The recoverable amounts of goodwill, intangible assets with infinite useful live and intangible assets which have not yet reached the conditions of their intended use or sales are estimated at least once a year regardless of whether there is an indication of impairment. If the carrying amount of a non-current non-monetary asset exceeds its estimated recoverable amount, the excess of the carrying amount over the estimated recoverable amount is recognized as impairment allowance, and an impairment loss of the same amount is recognized. The estimated recoverable amount of an asset is the higher of the residual amount after deducting disposal expense of the asset from its fair value and the present value of its future cash flows. Where there is a sales contract for an asset, and the contract is entered into for an arm's length transaction, the fair value of the asset is the contract price; where there isn't a sales contract for an asset, but there is an active market for it, the fair value of the asset is price offered by the buyer; where there is neither a sales contract nor an active market for an asset, the fair value of the asset is the best estimate based on all available information. The disposal cost of an asset includes legal expenses, applicable taxes and fees and transportation costs directly associated with the asset's disposal and all direct costs necessary to bring the asset to its sellable condition. The present value of an asset's future cash flows is calculated by multiplying the cash flows arising from the continual use of the asset and its disposal at an appropriate discount rate. An impairment allowance is generally calculated on the basis of individual assets. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of a cash-generating unit to which the asset belongs is estimated. A cash-generating unit is the smallest combination of assets that are capable of cash flow generation. Goodwill separately presented on the (consolidated) financial statements is allocated to cash-generating units or groups of units that are expected to benefit from the synergy of business combination for impairment testing. Where the recoverable amount a cash-generating unit (or group of units) is lower than its carrying amount, an impairment 92 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 loss is recognized. The impairment loss is firstly allocated to the goodwill allocated to the unit (or group of units) and then to individual assets pro rata on the basis of the carrying amount of each asset in the unit (or group of units) The impairment loss recognized in accordance with this section is irreversible in subsequent periods. 22. Employee Benefits (1)Accounting methods of short-term benefits Short-term employee benefits include wages, bonuses, allowances and subsidies, welfare, health insurance, maternity insurance, work injury insurance, housing funds, labor union funds, employee education funds, non-monetary benefits etc. Short-term employee benefits are recognized as liabilities and profit or loss account or the costs associated with the asset during the accounting period when employees actually provide services. The non -monetary benefits are measured at fair value. (2) Accounting methods for post-employment benefits Post-employment benefits include defined contribution plans and defined benefit plans. Defined contribution plan which includes the basic pension, unemployment insurance and annuities shall be recognized as cost of related assets or profit or loss. (3) Accounting Treatment Method of Demission Welfare When the Company terminates the labor relationship with employees prior to the employment contracts, or encourages employees to accept voluntary redundancy compensation proposals in this company, a provision shall be recognized for the compensation arising from the termination of employment relationship with employees at the time when the Company cannot unilaterally withdraw layoff proposal termination benefits provided due to termination of employment or the Company ensures the costs related to the payment for termination benefits related to the restructuring, which one is early to confirm employee benefits liabilities, and recorded as profit or loss. However, if termination benefits cannot be fully paid within twelve months of the reporting date the liability shall be processed in accordance with other long-term employee benefits. Retirement plan adopts the same principles as the termination benefits. The salaries and insurance to be paid from the date when employees stop providing services to the date of normal retirement shall be recognized in profit or loss (termination benefits) when satisfying the requirements of a provision. (4)Other long-term employee benefits Other long-term employee benefits provided by the Company to employees that are in line with defined contribution plans shall adopt the accounting treatment in accordance with defined contribution plans, otherwise the accounting treatment of defined benefit plans. 23.Estimated liabilities A contingent liability is recognized as provision if all or the following conditions are satisfied: a. it is a present obligation assumed by the Company; and b. it is probable that the fulfillment of the obligation will cause economic benefit flows from the Company; and c. the amount of the obligation can be reliably measured. A provision is measured on a balance-sheet date as the best estimate of the amount that is required for the 93 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 fulfillment of the present obligation after considering of the risks and uncertainty associated with the respective contingent events and the time value of money. If the amount required for settlement of a provision is wholly or partly reimbursed by a third party, the reimbursement is recognized separately as an asset to the extent of the carrying amount of the provision if it is probable that the reimbursement becomes receivable. (1) Loss contract Loss contract is a contract in which the cost of performing contractual obligations inevitably exceeds the expected economic benefits. Where the pending contract becomes a loss contract, and the obligations arising from the loss contract meet the recognition conditions of the above-mentioned expected liabilities, the part of the expected loss of the contract exceeding the recognized impairment loss of the underlying asset of the contract (if any) shall be recognized as the expected liability. (2) Restructuring obligations For a restructuring plan with detailed, formal and public announcement, the amount of the estimated liabilities is determined according to the direct expenditure related to the restructuring, subject to the above conditions for confirmation of the estimated liabilities. 24. Revenues Whether the Company needs to comply with the disclosure requirements for specific industries No Whether implemented new revenue guidelines? □ Yes √ No The company’s incomes mainly include the toll service revenues and the services provision. (1) Toll service fee income The toll income of roads and bridges is determined according to the amount collected and receivable by vehicles when passing through. (2) Provision of labor service Incomes from labors services that start and complete within the same fiscal year shall be recognized when the services are finished. If the beginning and completion of labor services belong to different fiscal years, the Company shall, on the balance sheet date, recognize the related labor income by the percentage of completion method, provided that the result of the labor service transaction can be reliably estimated. When the following conditions can be satisfied, the results of the transaction can be reliably estimated: ① the total income and total cost of labor services can be reliably measured; ② the economic benefits related to the transaction can flow into the enterprise; ③ the degree of completion of labor services can be reliably determined. The income from provision of labor services shall be determined as follows in case the result of the provided labor service transaction cannot be reliably estimated on the date of the Balance Sheet: ① If the labor cost already incurred is expected to be compensated, the income from the service shall be recognized according to the amount of the labor cost already incurred, and the labor cost shall be carried over at the same amount. If the incurred labor cost is not expected to be compensated, the incurred labor cost shall be included in the profits and losses of the current period, and the income from the provision of labor service shall not be recognized. If a contract entered into by the Company and a counterparty involves both sales of goods and rendering of services and revenue arising from goods sold and services rendered can be distinguished, revenue from sales of 94 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 goods and rendering of services are separately accounted for; if, however, revenue arising from goods sold and services rendered cannot be distinguished or can be distinguished but cannot be separately measured, all revenue is accounted for as revenue arising from sales of goods. 25. Government Grants A government grant is a transfer of monetary and non-monetary assets from the government to the Company for no consideration, excluding resources transferred to the Company by the government in the capacity of the shareholder. Government grants include grants related to assets and grants related to income. Government grants obtained by the Company which is relevant to construction or acquisition of long-term assets are classified as asset-related government grants; all other government grants are classified as revenue-related government grants. For government grants without a specified beneficiary, the Company performs classification in accordance with the following criteria. a. Where a grant is obtained for a specified project, the grant is spat into asset-related and revenue related portions proportionate to the project's investment to expense ratio; the classification is reviewed on each balance sheet date and revised if necessary. b. Where a grant is obtained for general purpose, the grant as a whole is classified as a revenue-related government grant. If a government grant is in the form of monetary assets, it is measured at the amount received or receivable. If a government grant is in the form of non-monetary assets, it is measured by the fair value of the assets; if the fair value of the assets granted cannot be reliably measured, the grant is measured by the nominal value of the assets and is recognized immediately in profit or loss for the relevant period. In general, the Company recognizes a government grant when it is actually received, and measures at the amount actually received. However, a government grant may be recognized as receivable if it is objectively evidential on the reporting date that conditions for the grant receipt are satisfied and thatthe grant is receivable. A government grant is recognized as receivable if all following conditions are satisfied: a. the amount of the grant is expressly stipulated in an official publication by the authorized governmental agency or can be reasonably estimated in accordance with fiscal pronouncement issued by the authorized governmental agency, and the estimate is not subject to significant uncertainty; b. the grant is officially disclosed as part of publicly disclosed fiscal subsidized projects by the local fiscal government bodies in accordance with the Government Information Disclosure Directives and is managed in accordance with the fiscal plan published and the management of the grant if not entity-specific, i.e., every eligible entity is entitled to apply; c. the term for payment is expressly stipulated in the official pronouncement, and the payment is backed by fiscal planning so that it is reasonable to expect receipt within the term of the payment; and d. other conditions (inapplicable) need to be satisfied taking into account the Company's circumstances. Grants related to assets are recognized as deferred income and amortized over the useful life of the relevant assets using the straight-line method. A grant related to income is recognized as deferred income if it is related to expenses or loss to be incurred in the future and is carried to profit or loss for the period during which the relevant expenses or loss are recognized; it is recognized in profit or loss for the period during which it is received or becomes receivable if it is related to expenses or loss already incurred. When assets are sold, transferred, disposed or scraped before the end of useful life, the remaining differed income will be transferred to profit or loss in the current period of asset disposal. The government grants related to the daily activities of the Company are included in other income or offsetting the related costs according to the substance of the economic business. The government grants unrelated 95 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 to the daily activities are included in the non-operating income and expenses. Where a recognized grant becomes repayable, the amount repayable is firstly charged to the remaining deferred income (if any); the remaining amount after charge to deferred income is recognized in profit or loss for the period during which it becomes repayable 26.Deferred income tax assets and deferred income tax liabilities (1)Current income tax The current income tax liability (asset) on a balance-sheet date is measured at the amount of current income tax payable (receivable) computed in accordance with the relevant tax law. Current income tax expense is computed on the basis of taxable profit (loss) which is the amount after the adjustment of the relevant accounting profit (loss) in accordance with the relevant tax law. (2)Deferred tax assets and deferred tax liabilities Deferred tax assets and deferred tax liabilities are recognized on an accrual basis for the temporary difference between the carrying amounts of assets and liabilities and their tax bases and the temporary difference arising from the difference in recognition criteria for assets and liabilities between CAS and relevant tax provisions. No deferred tax liability is recognized for the temporary taxable difference arising from the initial recognition of goodwill and the initial recognition of assets and liabilities acquired or assumed resulting from transactions which are not business combination, and which do not have impact on both accounting profit and taxable profit (deductible tax loss) at the time of their occurrence. Similarly, the deferred tax liability is not recognized for temporary taxable difference associated with investments in subsidiaries, associates, and joint ventures if the Company can control the reverse of the temporary difference and it is probable that the temporary difference is not expected to reverse in the foreseeable future. Except for the circumstances described hereabove, the deferred tax liability is recognized for all other taxable temporary difference. No deferred tax asset is recognized for the temporary deductible difference arising from the initial recognition of assets and liabilities acquired or assumed resulting from transactions which are not a business combination, and which do not have an impact on both accounting profit and taxable profit (deductible tax loss) at the time of their occurrence. Similarly, deferred tax asset is not recognized for temporary deductible difference associated with investments in subsidiaries, associates, and joint ventures if the Company can control the reverse of the temporary difference and it is probable that the temporary difference is not expected to reverse in the foreseeable future. Except for the circumstances described hereabove, deferred tax asset is recognized for all other deductible temporary difference to the extent that it is probable that taxable profit will be available against which the temporary deductible difference can be utilized. Deferred tax asset is recognized for deductible tax loss and tax credit carrying forward to the extent that it is probable that taxable profit will be available against which the deductible tax loss and tax credit carryforward can be utilized. Deferred tax assets and deferred tax liabilities are measured on a balance-sheet date on the basis of tax rates expected to be applicable in accordance with relevant tax law at the time when the relevant assets are recovered, or relevant liabilities settled. The carrying amount of deferred tax assets is reviewed on each balance sheet date. If it is probable that insufficient taxable profit is available to utilize the deferred tax assets, the carrying amount of deferred tax assets is reduced. When it is probable that sufficient taxable profit becomes available after the carrying amount of deferred tax assets has been reduced, the reduction is reversed. (3) Income tax expenses 96 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Income tax expenses include current income tax expenses and deferred income tax expenses. All current income tax expenses (credit) and deferred income tax expenses (gains) are recognized inprofit or loss for the relevant period except for a. current income tax and deferred income tax on transactions and events which are accounted for in other comprehensive income or directly in equity, which are included in other comprehensive income or directly recognized in equity depending on the treatment of its underlying transactions and events, and b. deferred income tax arising from business combination, which is accounted for as an adjustment to the carrying amount of the respective goodwill. (4)Offsetting of income tax A current income tax liability and current income tax asset are presented on (consolidated) financial statements after netting only if the Company is permitted by law to settle the asset and liability net in cash and is planning to do so or to recover the asset and settle the liability simultaneously. A deferred tax asset and deferred tax liability are presented on (consolidated) financial statements after netting only if all of the following conditions are satisfied: the Company is permitted by law to settle the current asset and liability related to an income tax net in cash; and the deferred tax asset and deferred tax liability arising from that income tax is levied by the same tax authority on the same entity or on different entities but the relevant entities are planning to settle the underlying income tax net in cash or simultaneously recover the relevant assets and settle the relevant liabilities during each future period during which significant deferred tax assets and deferred tax liabilities are reversed. 27.Change of main accounting policies and estimations ⑴Change of accounting policies √ Applicable □Not applicable ① Changes in accounting policies resulting from the implementation of the new financial instrument guidelines The Accounting Standards for Enterprises No. 22 - Recognition and Measurement of Financial Instruments (Revised in 2017), the Accounting Standards for Enterprises No. 23 - Transfer of Financial Assets (Revised in 2017), and the Accounting Standards for Enterprises No. 24 - Hedge Accounting Standards for Enterprises (Revised in 2017) (Accounting [2017] No. 9) promulgated by the Ministry of Finance on March 31, 2017, as well as the Accounting Standards for Enterprises No. 37 - Financial Instruments Presentation (Revised in 2017) (Accounting [2017] No. 14) (collectively referred to as "New Financial Instruments Standards") issued on May 2, 2017 requires domestic listed enterprises to implement the new standards from January 1, 2019. Guidelines for financial instruments. Through the resolution of the 25th (provisional) meeting of the eighth board of directors of the Company on April 26, 2019, the Company began to implement the aforementioned new financial instrument guidelines on January 1, 2019. All recognized financial assets under the new financial instrument standards are subsequently measured at the amortized cost or fair value. On the date of implementation of the new financial instrument standards, the business model of managing financial assets is evaluated on the basis of the existing facts and circumstances of the Company on that day, and the characteristics of contractual cash flow on the financial assets are evaluated on the basis of facts and circumstances at the time of initial recognition of financial assets. The financial assets are divided into three categories: measured according to the amortized cost and measured according to the public value. Value is measured and its changes are included in other comprehensive income and fair value, and its 97 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 changes are included in current profits and losses. Among them, when the financial asset terminates recognition, the accumulated gains or losses previously included in other comprehensive gains will be transferred from other comprehensive gains to retained gains, not into current profits and losses. Under the new financial instrument standards, based on the expected credit loss, the Company makes provision for impairment of financial assets measured by amortized cost, investment in debt instruments measured by fair value and its changes included in other comprehensive gains, lease receivables, contractual assets and financial guarantee contracts, and confirms the loss of credit impairment. The Company retrospectively applies the new financial instrument standards, but for classification and measurement (including impairment) involving the inconsistency between the previous comparative financial statement data and the new financial instrument standards, the Company chooses not to repeat. Therefore, for the cumulative impact of the first implementation of this standard, the Company adjusted the retained earnings or other comprehensive earnings at the beginning of 2019 and the amount of other related items in the financial statements, which were not restated in the financial statements of 2018. The main changes and impacts of the implementation of the new financial instrument guidelines on our Company are as follows: - On January 1, 2019 and beyond, the Company designated some non-tradable equity investments held as financial assets measured at fair value and included their changes in other comprehensive income, and reported them as investments in other equity instruments. - For the long-term equity investment of associates, the Company re-classified and measured the financial instruments according to the new financial instrument standards, and the Company adjusted accordingly according to the equity method. - The Company holds part of the debt instruments, whose cash flow generated on a specific date is only the payment of principal and interest based on the amount of unpaid principal, and the business model of the Company's management of the financial assets is to collect the cash flow of the contract. The Company will take it from other sources on January 1, 2019 and beyond. Non-current assets are reclassified to creditor's rights investment. A. Comparison of financial assets classification and measurement before and after the first implementation date a. Impact on the consolidated financial statements December 31, 2018 (before change) January 1, 2019 (after the change) Items Measurement category Book value Items Measurement category Book value Available-for-sales Measured at fair value 1,668,791,594.53 Investment in Measured at fair value and 1,668,791,594.53 financial assets and included in other other equity included in other comprehensive benefits instruments comprehensive earnings (equity instruments) long-term equity Cost method/equity 3,145,644,970.07 long-term equity Cost method/equity method 3,145,355,906.88 investments method investments b. Impact on the financial statement December 31, 2018 (before change) January 1, 2019 (after the change) Items Measurement Book value Items Measurement category Book value category Available-for-sales Measured at fair 1,668,791,594.53 Investment in Measured at fair value and 1,668,791,594.53 financial assets value and included in other equity included in other 98 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 other comprehensive instruments comprehensive earnings benefits (equity instruments) long-term equity Cost method/equity 4,679,309,978.88 long-term equity Cost method/equity method 4,679,020,915.69 investments method investments Other non-current amortized cost 692,903,684.98 Creditor's right amortized cost 692,903,684.98 assets investment B. On the first execution date, the book value of the original financial assets shall be adjusted to a new adjustment table for the book value of the financial assets classified and measured in accordance with the provisions of the new financial instrument standards. a. Impact on consolidated statements Items December 31, 2018 Re-measurem January 1,2019 (before change) Re-Class ent (after change) Measured at fair value and included in other comprehensive earnings: Available-for-sale financial assets (original guidelines) 1,668,791,594.53 Less transfer to other creditor's rights investment Less: transfer to other non-current financial assets Less: transfer to other equity instruments 1,668,791,594.53 Balances shown in accordance with the new financial instrument guidelines Investment in other equity instruments Add: transfer from available-for-sale financial assets 1,668,791,594.53 (original criteria) Re-measurement: re-measurement at fair value Balances shown in accordance with the new financial 1,668,791,594.53 instrument guidelines b. Impact on the Company's financial statements Items December 31, 2018 Re-Class Re-measurem January 1,2019 (before change) ent (after change) Amortized cost Other non-current assets (original criteria) 692,903,684.98 Less: transfer to creditor's rights investment 692,903,684.98 Balances shown in accordance with the new financial instrument guidelines Creditor's rights investment Add: transfer from other non-current assets 692,903,684.98 (original criteria) Re-measurement: expected credit loss preparation Balances shown in accordance with the new 692,903,684.98 financial instrument guidelines Measured at fair value and included in other 99 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 comprehensive earnings: Available-for-sale financial assets (original 1,668,791,594.53 guidelines) Less: transfer to other creditor's rights investment Less: transfer to other non-current financial assets Less: transfer to other equity instruments 1,668,791,594.53 Balances shown in accordance with the new financial instrument guidelines Investment in other equity instruments Add : transfer from available-for-sale financial 1,668,791,594.53 assets (original criteria) Re-measurement: re-measurement at fair value Balances shown in accordance with the new 1,668,791,594.53 financial instrument guidelines C. Financial assets impairment provision adjustment table on the first implementation date a. Impact on consolidated statements Measurement category December 31, 2018 Re-Class Re-measurement January 1, 2019 (before change) (after change) Measured at fair value and included in other comprehensive benefits (debt instruments) Provision for impairment of available-for-sale 37,020,000.00 37,020,000.00 financial assets Investment in other equity instruments 37,020,000.00 37,020,000.00 b. Impact on the Company's financial statements Measurement category December 31, Re-Class Re-measu January 1, 2018 rement 2019 (before change) (after change) Measured at fair value and included in other comprehensive benefits (debt instruments) Provision for impairment of available-for-sale financial assets 7,020,000.00 7,020,000.00 Investment in other equity instruments 7,020,000.00 7,020,000.00 D. Impact on retained earnings and other comprehensive earnings as of January 1, 2019 December 31, 2018 Consolidated retained Consolidated surplus Consolidation of other earnings reserve comprehensive benefits December 31,2018 3,938,609,136.59 245,109,114.81 1. Re-measurement of long-term equity -11,353,413.48 11,064,350.29 investment January 1, 2019 3,927,255,723.11 256,173,465.10 ②Other accounting policy changes E. On April 30, 2019, the Notice of the Ministry of Finance on Revising and Issuing the Format of Financial 100 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Statements of General Enterprises (No. 6 Finance and Accounting [2019]) issued by the Ministry of Finance adjusts the format of financial statements of enterprises accordingly, and regulates that the detailed items of "management expenses" and "R&D expenses" should be separated from the items of "management expenses" in the profit statement; it also indicates that the actual government subsidies received should be listed in the item "cash received from other business activities". In response to such change of accounting policy, the Company adopts the retroactive adjustment method to retroactively adjust the items reported in the financial statements from January to June in 2018, as follows: a. Impact on consolidated statements January - June 2018 Before adjustment After Adjustment Change Administrative Fees 75,594,633.97 73,109,460.94 -2,485,173.03 R&D expense 2,485,173.03 2,485,173.03 Other cash receipts relating to operating 39,446,329.98 41,946,329.98 2,500,000.00 activities Receipt of other cash related to fund-raising 2,500,000.00 -2,500,000.00 activities b. Impact on the Company's financial statements January - June 2018 Before adjustment After Adjustment Change Other cash receipts relating to operating 46,329,459.08 48,829,459.08 2,500,000.00 activities Receipt of other cash related to fund-raising 293,500,000.00 291,000,000.00 -2,500,000.00 activities ⑵Change of accounting estimations □ Applicable √ Not applicable (3)Adjustments to the Financial Statements at the Beginning of the First Execution Year of any New Standards Governing Financial Instruments, Revenue or Leases √Applicable □ Not applicable Items December 31,2018 Jan 1,2019 Adjustment Current asset: Monetary fund 2,124,524,996.32 2,124,524,996.32 Settlement provision Outgoing call loan Transactional financial assets Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Notes receivable Account receivable 91,076,995.07 91,076,995.07 101 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Items December 31,2018 Jan 1,2019 Adjustment Financing of receivables Prepayments 1,912,943.40 1,912,943.40 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Other account receivable 16,487,256.02 16,487,256.02 Including:Interest receivable Dividend receivable 1,205,472.90 1,205,472.90 Repurchasing of financial assets Inventories 81,017.91 81,017.91 Contract assets Assets held for sales Non-current asset due within 1 year 51,745.32 51,745.32 Other current asset Total of current assets 2,234,134,954.04 2,234,134,954.04 Non-current assets: Loans and payment on other’s behalf disbursed Debt investment Available for sale of financial assets 1,668,791,594.53 -1,668,791,594.53 Other investment on bonds Expired investment in possess Long-term receivable Long term share equity investment 3,145,644,970.07 3,145,355,906.88 -289,063.19 Other equity instruments investment 1,668,791,594.53 1,668,791,594.53 Other non-current financial assets Property investment 3,579,007.54 3,579,007.54 Fixed assets 7,600,046,319.91 7,600,046,319.91 Construction in progress 1,089,473,425.63 1,089,473,425.63 Production physical assets Oil & gas assets Use right assets Intangible assets 5,739,020.48 5,739,020.48 102 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Items December 31,2018 Jan 1,2019 Adjustment Development expenses Goodwill Long-germ expenses to be amortized 1,221,781.88 1,221,781.88 Deferred income tax asset 447,485,034.79 447,485,034.79 Other non-current asset 99,794,665.58 99,794,665.58 Total of non-current assets 14,061,775,820.41 14,061,486,757.22 -289,063.19 Total of assets 16,295,910,774.45 16,295,621,711.26 -289,063.19 Current liabilities Short-term loans Loan from Central Bank Borrowing funds Transactional financial liabilities Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities Notes payable Account payable 203,779,190.74 203,779,190.74 Advance receipts 12,039,708.01 12,039,708.01 Selling of repurchased financial assets Deposit taking and interbank deposit Entrusted trading of securities Entrusted selling of securities Employees’wage payable 13,122,437.17 13,122,437.17 Tax payable 104,198,746.06 104,198,746.06 Other account payable 191,254,464.84 191,254,464.84 Including:Interest payable 8,971,576.57 8,971,576.57 Dividend payable 17,191,142.23 17,191,142.23 Fees and commissions payable Reinsurance fee payable Contract Liabilities Liabilities held for sales Non-current liability due within 1 year 2,498,480,000.00 2,498,480,000.00 Other current liability 103 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Items December 31,2018 Jan 1,2019 Adjustment Total of current liability 3,022,874,546.82 3,022,874,546.82 Non-current liabilities: Reserve fund for insurance contracts Long-term loan 2,983,040,000.00 2,983,040,000.00 Bond payable Including:preferred stock Sustainable debt Lease liability Long-term payable 38,022,210.11 38,022,210.11 Long-term remuneration payable to staff Expected liabilities Deferred income Deferred income tax liability 205,672,389.59 205,672,389.59 Other non-current liabilities Total non-current liabilities 3,226,734,599.70 3,226,734,599.70 Total of liability 6,249,609,146.52 6,249,609,146.52 Owners’ equity Share capital 2,090,806,126.00 2,090,806,126.00 Other equity instruments Including:preferred stock Sustainable debt Capital reserves 2,536,774,965.31 2,536,774,965.31 Less:Shares in stock Other comprehensive income 245,109,114.81 256,173,465.10 11,064,350.29 Special reserve Surplus reserves 775,402,561.35 775,402,561.35 Common risk provision Retained profit 3,938,609,136.59 3,927,255,723.11 -11,353,413.48 Total of owner’s equity belong to the parent 9,586,701,904.06 9,586,412,840.87 -289,063.19 company Minority shareholders’ equity 459,599,723.87 459,599,723.87 Total of owners’equity 10,046,301,627.93 10,046,012,564.74 -289,063.19 Total of liabilities and owners’equity 16,295,910,774.45 16,295,621,711.26 -289,063.19 Statement of adjustment 104 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Balance sheet of parent company In RMB Items December 31,2018 Jan 1,2019 Adjustment Current asset: Monetary fund 2,096,597,568.04 2,096,597,568.04 Transactional financial assets Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Notes receivable Account receivable 18,405,847.15 18,405,847.15 Financing of receivables Prepayments 1,532,057.82 1,532,057.82 Other account receivable 9,323,782.66 9,323,782.66 Including: Interest receivable 1,880,148.12 1,880,148.12 Dividend receivable 1,205,472.90 1,205,472.90 Inventories Contract assets Assets held for sales Non-current asset due within 1 year 100,000,000.00 100,000,000.00 Other current asset Total of current assets 2,225,859,255.67 2,225,859,255.67 Non-current assets: Debt investment 692,903,684.98 692,903,684.98 Available for sale of financial assets 1,668,791,594.53 -1,668,791,594.53 Other investment on bonds Expired investment in possess Long-term receivable Long term share equity investment 4,679,309,978.88 4,679,020,915.69 -289,063.19 Other equity instruments investment 1,668,791,594.53 1,668,791,594.53 Other non-current financial assets Property investment 3,326,869.29 3,326,869.29 Fixed assets 5,292,898,635.00 5,292,898,635.00 Construction in progress 1,060,230,773.10 1,060,230,773.10 105 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Production physical assets Oil & gas assets Use right assets Intangible assets 1,741,277.53 1,741,277.53 Development expenses Goodwill Long-germ expenses to be amortized Deferred income tax asset 447,328,530.77 447,328,530.77 Other non-current asset 790,720,727.48 97,817,042.50 -692,903,684.98 Total of non-current assets 13,944,348,386.58 13,944,059,323.39 -289,063.19 Total of assets 16,170,207,642.25 16,169,918,579.06 -289,063.19 Current liabilities Short-term loans Transactional financial liabilities Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities Notes payable Account payable 124,833,335.72 124,833,335.72 Advance receipts Contract Liabilities Employees’wage payable 5,669,203.37 5,669,203.37 Tax payable 10,297,144.52 10,297,144.52 Other account payable 142,457,135.79 142,457,135.79 Including:Interest payable 8,373,096.36 8,373,096.36 Dividend payable 17,191,142.23 17,191,142.23 Liabilities held for sales Non-current liability due within 1 year 2,327,180,000.00 2,327,180,000.00 Other current liability 977,236,252.44 977,236,252.44 Total of current liability 3,587,673,071.84 3,587,673,071.84 Non-current liabilities: Long-term loan 2,731,990,000.00 2,731,990,000.00 Bond payable Including:preferred stock 106 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Sustainable debt Lease liability Long-term payable 38,022,210.11 38,022,210.11 Long-term remuneration payable to staff Expected liabilities Deferred income Deferred income tax liability 88,220,604.00 88,220,604.00 Other non-current liabilities Total non-current liabilities 2,858,232,814.11 2,858,232,814.11 Total of liability 6,445,905,885.95 6,445,905,885.95 Owners’ equity Share capital 2,090,806,126.00 2,090,806,126.00 Other equity instruments Including:preferred stock Sustainable debt Capital reserves 2,948,663,196.93 2,948,663,196.93 Less:Shares in stock Other comprehensive income 245,109,114.81 256,173,465.10 11,064,350.29 Special reserve Surplus reserves 759,558,277.70 759,558,277.70 Retained profit 3,680,165,040.86 3,668,811,627.38 -11,353,413.48 Total of owners’ equity 9,724,301,756.30 9,724,012,693.11 -289,063.19 Total of liabilities and owners’ equity 16,170,207,642.25 16,169,918,579.06 -289,063.19 Statement of adjustment (4)Retrospective Restatement of Previous Comparative Data due to the First Execution of any New Standards Governing Financial Instruments or Leases □ Applicable √ Not applicable 28. Significant account judgment and estimates During the application of accounting policies, judgements, estimates, and presumption need to be made for elements of financial statements, which cannot be precisely measured due to inherent uncertainty existing in operating activities. The judgments, estimates, and presumption are made on the basis of the Company's past experience and other relevant factors. The exercise of judgements, estimates, and presumption has an impact on the measurement of revenue, expenses, assets and liabilities and the disclosure of contingent liabilities on the balance sheet date. However, the inherent uncertainty of the judgments, estimates, and presumption may result in 107 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 future significant adjustments to be made to the measurement of the affected assets and liabilities. The judgments, estimates, and presumption are regularly reviewed on the basis of going concern. Where a change in accounting estimates is applicable, its impact on financial statements is recognized in the period during which the change occurs if the change has an impact on the financial statements for that period only; and in subsequent periods if the change also has an impact on the financial statements for subsequent periods. Significant elements of financial statements and areas that are subject to judgements, estimates and presumption on the balance-sheet date include the following. (1)Impairment of financial assets The Company adopts the anticipated credit loss model to evaluate the impairment of financial instruments, which requires that significant judgments and estimates should be made and all reasonable and reliable information, including forward-looking information should be taken into account. In making such judgment and estimate, the Company deduces the expected change of debtor's credit risk based on historical data and macroeconomic indicators of economic policies, industrial risks, external market environment, technical environment, changes of customer conditions and other factors. (2)Provision for impairment of long-term assets. Non-current assets are assessed for indicators of impairment on each balance sheet date. In addition, intangible assets with infinite useful life are subject to impairment testing on each balance-sheet date and whenever there is evidence indicating impairment; other non-financial non-current assets are subject to impairment testing only if their evidence indicating that the carrying amount becomes non-collectible. Impairment exists when the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, which is higher of the residual amount after deducting necessary expenses for disposal from its fair value and the present value of its future cash flows. An asset's residual amount after deducting necessary expenses for disposal is determined by reference to the residual amount after deducting the incremental costs to dispose the asset from the selling price provided by contracts for sales of similar assets or the observable market price of similar assets. When estimating the present value of future cash flows of an asset or cash-generating unit, significant judgments must be made regarding the production capacity, selling price, relevant operating costs of the asset or cash-generating unit and relevant discount rates for discounting the cash flows. The Company considers all available relevant information when determining the recoverable amount, including estimates regarding future production capacity, selling price and relevant operating costs made on the basis of reasonable and supportive presumption. Goodwill is assessed for impairment at least annually. The assessment involves an estimate of the present value of the future cash flows associated with the assets or groups of assets to which goodwill has been allocated. The estimate considers the future cash flows associated with the assets or groups of assets to which goodwill has been allocated and the applicable discount rates for cash flow discounting. (3)Depreciation and amortization Investment property, fixed assets, and intangible assets are depreciated (amortized) over their useful lives using the straight-line method after considering of their residual value. Useful lives of these assets are regularly reviewed for the purpose of determining the depreciation and amortization recognized for each period. Useful lives are determined on the basis of the Company's past experience on similar assets and expected new technology development. If existing estimates change significantly, the adjustment is made to the depreciation and amortization for future periods. (4)Deferred tax assets All unutilized tax loss is recognized as deferred tax assets to the extent it is probable that taxable profit will 108 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 be available against which the deductible tax loss can be utilized. Significant judgments are required to estimate the timing and amount of future taxable profit and to consider tax planning strategy so as to determine the number of deferred tax assets to be recognized. VI. Taxation 1. Major category of taxes and tax rates Tax category Tax basis Tax rate VAT Sales by Sales of Goods or Tax Services 3%、5%、6%、9%、10%、11%、13% City maintenance and construction tax The actual payment of turnover tax 5%、7% Enterprise income tax Taxable income 25% The applicable tax rates for VAT sales or imported goods in our company during the period from January to March 2019 are 16% and 10%. According to the Announcement of the Ministry of Finance, the State Administration of Taxation and the General Administration of Customs on the Policies for Deepening the Reform of VAT (Announcement [2019] No. 39 of the Ministry of Finance, the State Administration of Taxation and the General Administration of Customs), the applicable tax rate has been adjusted to 13% and 9% since April 1, 1919. Where there are tax payers of different enterprise income tax rates, the disclosure information indicates that there is no tax payer. 2.Preferential tax Nil 3.Other Nil VII. Notes to the major items of consolidated financial statement 1.Monetary Capital In RMB Items Amount in year-end Balance Year-beginning Cash 91,690.76 53,211.49 Bank deposit 2,037,418,254.12 2,123,807,010.07 Other 515,006.17 664,774.76 Total 2,038,024,951.05 2,124,524,996.32 Other note On June 30,2019,The balance of restricted bank deposits at the end of the period was 1,221,200.00 yuan, which was the land reclamation fund deposited into the fund custody account for the reconstruction and expansion project of Sanbao to Shuikou section of Fokai Expressway. 109 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 2. Account receivable 1.Classification account receivables. In RMB Amount in year-end Balance Year-beginning Book Balance Bad debt provision Book Balance Bad debt provision Category Amount Proportio Amount Propor Amount Proporti Amount Propor Book value Book value n(%) tion(% on(%) tion(% ) ) Accrual of bad debt provision by single item Of which: Accrual of bad debt provision by 104,294,640.84 100.00% 1,176,879.99 1.13% 103,117,760.85 92,253,875.06 100.00% 1,176,879.99 1.28% 91,076,995.07 portfolio Of which: Portfolio 104,294,640.84 100.00% 1,176,879.99 1.13% 103,117,760.85 92,253,875.06 100.00% 1,176,879.99 1.28% 91,076,995.07 Total 104,294,640.84 100.00% 1,176,879.99 103,117,760.85 92,253,875.06 100.00% 1,176,879.99 91,076,995.07 110 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Accrual of bad debt provision by single item: Nil Accrual of bad debt provision by single item: Nil Accrual of bad debt provision by portfolio: In RMB Balance in year-end Name Receivable accounts Bad debt provision Withdrawal proportion Within 1 year 101,225,645.16 1-2 years 752,716.49 75,087.85 9.98% 2-3 years 849,193.27 254,757.98 30.00% 3-4 years 1,128,781.92 564,390.96 50.00% 4-5 years 278,304.00 222,643.20 80.00% Over 5 years 60,000.00 60,000.00 100.00% Total 104,294,640.84 1,176,879.99 -- Notes of the basis of recognizing the portfolio: Provision for bad debts according to the age portfolio Notes of the basis of recognizing the group: Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of other receivables if the provision for bad debts of bills receivable is accrued according to the general model of expected credit loss: □ Applicable √Not applicable Disclosure by aging In RMB Aging Closing balance Within 1 year(Including 1 year) 101,225,645.16 Within 1 year 101,225,645.16 1-2 years 752,716.49 2-3 years 849,193.27 Over 3 years 1,467,085.92 3-4 years 1,128,781.92 4-5 years 278,304.00 Over 5 years 60,000.00 Total 104,294,640.84 111 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (2) Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision: In RMB Amount of change in the current period Category Opening balance Reversed or Closing balance Accrual Write-off collected amount Portfolio 1 1,176,879.99 1,176,879.99 Total 1,176,879.99 1,176,879.99 Of which the significant amount of the reversed or collected part during the reporting period :Nil (3)The current accounts receivable write-offs situation Nil (4)The ending balance of other receivables owed by the imputation of the top five parties Name Amount Proportion(%) Bad debt provision Guangdong Union Electronic Services Co., Ltd. 47,675,526.05 45.71 Guangdong Humen Bridge Co., Ltd. 23,560,330.99 22.59 Shandong Boan Intelligent Technology Co., Ltd 7,409,966.25 7.10 Guangdong Jingzhu Expressway Guangzhu North 4,819,475.01 4.62 Section Co., Ltd. Zhongyuan Shipping Technology Co., Ltd. 3,932,168.05 3.77 Total 87,397,466.35 83.79 (5)Account receivable which terminate the recognition owning to the transfer of the financial assets Nil (6)The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts receivable Nil 3. Prepayments (1)Age analysis In RMB Balance in year-end Balance Year-beginning Age Amount Proportion(%) Amount Proportion(%) Within 1 year 2,658,527.25 92.85% 1,708,205.40 89.30% 112 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Over 3 years 204,738.00 7.15% 204,738.00 10.70% Total 2,863,265.25 -- 1,912,943.40 -- Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time: Nil (2) Top 5 of the closing balance of the prepayment collected according to the prepayment target Name Amount Aging Proportion(%) Guangdong Litong Real estate Investment 735,092.38 Within 1 year 25.67 Co., Ltd. Guangdong power transmission & 235,695.00 Within 1 year 8.23 transformation engineering company Guangdong south educational science and 152,800.00 Within 1 year 5.34 technology research institute Tianjing Kechang Huitong Information 134,339.62 Within 1 year 4.69 Technology Co., Ltd. Foshan Yingya Advertising Co., Ltd. 35,000.00 Over 3 years 1.22 Total 1,292,927.00 45.15 Other notes: Nil 4.Other accounts receivable In RMB Items Balance in year-end Balance Year-beginning Dividend receivable 34,145,770.80 1,205,472.90 Other receivable 18,630,191.48 15,281,783.12 Total 52,775,962.28 16,487,256.02 (1)Interest receivable Nil (2)Dividend receivable 1)Dividend receivable In RMB Items Balance in year-end Balance Year-beginning Guangdong Radio and Television Networks investment 1,205,472.90 1,205,472.90 No.1 Limited partnership enterprise Ganzhou Kangda Expressway Co., Ltd. 21,000,000.00 113 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Gluoyuan Securities Co., Ltd. 11,940,297.90 Total 34,145,770.80 1,205,472.90 (2)Significant dividend receivable aged over 1 year Nil 3)Bad-debt provision □ Applicable √ Not applicable Other notes:Nil (3) Other accounts receivable 1) Other accounts receivable classified by the nature of accounts In RMB Nature Closing book balance Opening book balance Balance of settlement funds for 47,528,056.18 47,528,056.18 securities transactions Cash deposit 8,230,858.96 7,813,222.94 Gelin Enze Account 4,007,679.91 4,007,679.91 Petty cash 4,554,632.19 3,800,100.00 Advertising and labor costs 1,023,421.29 924,266.65 Other 4,837,508.03 2,760,422.52 Total 70,182,156.56 66,833,748.20 2)Bad-debt provision In RMB Stage 1 Stage 2 Stage 3 Expected credit Expected credit loss over Expected credit losses for Bad Debt Reserves Total losses over the next life (no credit the entire duration (credit 12 months impairment) impairment occurred) Balance as at January 16,228.99 51,535,736.09 51,551,965.08 1, 2019 Balance as at January —— —— —— —— 1, 2019 in current Balance as at June 16,228.99 51,535,736.09 51,551,965.08 30,2019 Loss provision changes in current period, change in book balance with significant amount □ Applicable √Not applicable 114 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Disclosure by aging In RMB Aging Closing balance Within 1 year(Including 1 year) 10,683,833.96 Within 1 year 10,683,833.96 1-2 years 3,143,087.25 2-3 years 1,534,307.90 Over 3 years 54,820,927.45 3-4 years 579,262.98 4-5 years 772,029.18 Over 5 years 53,469,635.29 Total 70,182,156.56 3) Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision: In RMB Amount of change in the current period Category Opening balance Reversed or collected Closing balance Accrual amount Financial assets with significantly different 51,535,736.09 51,535,736.09 credit risks Portfolio 3 16,228.99 16,228.99 Total 51,551,965.08 51,551,965.08 Notes 1: The parent company once paid 33,683,774.79 yuan into Kunlun Securities Co., Ltd, Guangdong Expressway technology investment Co., Ltd once paid 18,000,000.00 yuan into Kunlun Securities Co., Ltd. Qinghai Province Xining City’s intermediate people’s court made a adjudication under law declared that Kunlun Securities Co., Ltd went bankrupt and repaid debt in November 11, 2006. On March 2007, The Company and Guangdong Expressway Technology Investment Co., Ltd had switched the money that paid into Kunlun Securities Co., Ltd to other account receivable, and follow the careful principle to doubtful debts provision. The 710,349.92 yuan Credit was Recovered in 2008, The 977,527.77 yuan credit was recovered in 2011, The 652,012.00 yuan Credit was recovered in 2014, The 1,815,828.92 yuan Credit was recovered in 2018, and the provision for had deb Notes2:Guangdong Expressway Technology investment Co., Ltd .should charge Beijing Gelin Enze Organic Fertilizer Co., Ltd.for 12,220,079.91 yuan. Eight millions of it was entrust loan, three million was temporary borrowing 12,400.00 yuan is the commission loan interest, the rest of it was advance money for another, Beijing Gelin Enze Organic Fertilizer Co., Ltd’s operating status was had and had already ceased producing, Accordingly, the controlling subsidiary of the company Guangdong Expressway Investment Co., Ltd. accounted full provision for Bad debt 12,220,079.91yuan provision. The company in 2014 recovered arrears of 8,000,000.00 yuan, rushed back to the provision for bad debts and write off uncollected interest entrusted loans according to tTh 115 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 e settlement agreement of 212,400.00 yuan. Where the current bad debts back or recover significant amounts:Nil 4)The actual write-off other accounts receivable: Nil 5) Top 5 of the closing balance of the other accounts receivable colleted according to the arrears party In RMB Proportion of the total Closing Closing year end balance of Name Nature Aging balance of bad balance the accounts debt provision receivable(%) Securities trading settle Over 5 Kunlun Securities Co.,Ltd 47,528,056.18 67.72% 47,528,056.18 ment funds years Over 5 Beijing Gelin Enze Current account 4,007,679.91 5.71% 4,007,679.91 years Shandong Boan Intelligent Within 1 Deposit 1,725,155.40 2.46% Technology Co., Ltd. year Guangdong Litong Real Estates Deposit 1,515,077.22 2-3 years 2.16% Investment Co., Ltd. Guangdong Guanghui Expressway Over 4 Deposit 1,462,587.90 2.08% Co., Ltd. years Total -- 56,238,556.61 -- 80.13% 51,535,736.09 (6) Accounts receivable involved with government subsidies Nil (7) Other account receivable which terminate the recognition owning to the transfer of the financial assets Nil (8) The amount of the assets and liabilities formed by the transfer and the continues involvement of other accounts receivable Nil 9. Inventories Whether implemented new revenue guidelines? □ Yes √No (1)Category of Inventory In RMB Items Closing book balance Opening book balance 116 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Provision for Provision for Book balance inventory Book value Book balance inventory Book value impairment impairment Raw materials 110,142.49 110,142.49 81,017.91 81,017.91 Total 110,142.49 110,142.49 81,017.91 81,017.91 Whether the company is required to comply with the "Shenzhen Stock Exchange Industry Information Disclosure Guidelines No. 4 - listed companies engaged in seed industry, planting business" disclosure requirements No (2) Inventory depreciation reserve Nil (3)Description of The closing balance of inventories contain the amount of borrowing costs capitalized Nil 6.Non-current asset due within 1 year In RMB Items Year-end balance Year-beginning balance Advance business tax 51,745.32 51,745.32 Total 51,745.32 51,745.32 Other note: Debt investments and other debt investments due within one important year of the end of the period:Nil 7. Available-for-sale financial assets Items Amount in year-end Book balance Bad debt provision Book value Available-for-sale debt Instruments Available-for-sale equity 1,705,811,594.53 37,020,000.00 1,668,791,594.53 Instruments Measured by fair value 870,443,292.80 870,443,292.80 Measured by cost 835,368,301.73 37,020,000.00 798,348,301.73 Other Total 1,705,811,594.53 37,020,000.00 1,668,791,594.53 117 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 8. Long-term equity investment In RMB Increase/decrease Closing Withd Investment balance Additi Negat rawal Adjustment Cash bonus or of profit and loss of Investees Opening balance onal ive of other Changes of profits Ot Closing balance impairm recognized impair comprehensi other equity announced to her ent invest invest ment under the equity ve income issue provisio ment ment provis n method ion I. Joint venture Guangdong Guanghui 992,521,223.58 143,481,952.02 25,795,500.00 84,638,655.14 1,077,160,020.46 Expressway Co., Ltd. Zhaoqing Yuezhao Highway 307,172,338.10 27,819,228.16 53,207,865.41 281,783,700.85 Co., Ltd. Subtotal 1,299,693,561.68 171,301,180.18 25,795,500.00 137,846,520.55 1,358,943,721.31 2. Affiliated Company Shenzhen Huiyan Expressway 230,553,756.87 16,104,358.08 246,658,114.95 Guangdong Jiangzhong Expressway Co.,. 175,324,643.76 10,932,203.70 186,256,847.46 Ltd. Ganzhou Kangda Expressway 219,985,018.52 17,339,428.35 21,000,000.00 216,324,446.87 Gan Ganzhou Gankang Expressway 209,995,910.71 4,937,249.59 214,933,160.30 Guangdong Yueke Technology Petty Loan 219,693,558.27 7,188,376.76 226,881,935.03 Co., Ltd. 118 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Guoyuan Securities Co., Ltd. 790,109,457.07 9,910,201.43 -470,449.14 11,940,297.90 787,608,911.46 Subtotal 1,845,662,345.20 66,411,817.91 -470,449.14 32,940,297.90 1,878,663,416.07 Total 3,145,355,906.88 237,712,998.09 -470,449.14 25,795,500.00 170,786,818.45 3,237,607,137.38 119 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 9.Other Equity instrument investment In RMB Items Closing balance Opening balance Guangle Expressway Co., Ltd. 748,348,301.73 748,348,301.73 Guangdong Radio and Television Networks investment No.1 Limited 50,000,000.00 50,000,000.00 partnership enterprise China Everbright Bank Co., Ltd. 896,321,336.64 870,443,292.80 Huaxia Securities Co., Ltd.(Notes1) 0.00 0.00 Huazheng Asset Management Co., Ltd. 0.00 0.00 (Notes2) Kunlun Securities Co., Ltd.(Notes3) 0.00 0.00 Total 1,694,669,638.37 1,668,791,594.53 Note 1: The owner's equity of Huaxia Securities Co., Ltd. was negative and it entered liquidation procedure in December 2005. The Company made full provision for impairment in respect of this long-term equity investment of RMB 5.4 million. Note 2: According to De Wei Ping Gu Zi 2005 No. 88 Appraisal Report issued by Beijing Dewei Appraisal Co., Ltd. As the June 30, 2005, the amount of net assets of Huazheng Asset Management Co., Ltd. in book was 279.132 million yuan and the appraised value was - 2299.5486 million yuan ,On October 14, 2005, Jianyin CITIC Asset Management Co., Ltd. issued the Letter of Soliciting Opinions on Equity Assignment to the Company. Jianyin CITIC Asset Management Co., Ltd. was willing to pay the price of not more than 42 million yuanto acquire 100% equity of Huazheng Asset Management Co., Ltd. and solicited the Company's opinions. The Company replied on December 5, 2005, abandoning the preemptive right under the same conditions. The Company made provision of 1.3932 million yuan for impairment in respect of this long-term equity investment of 1.62 million yuan. Note 3.The owner's equity of Kunlun Securities Co., Ltd. was negative and it entered liquidation procedure in October 2005. A wholly owned subsidiary of Guangdong Expressway Technology Investment Co., Ltd. Will invest Kunlun Securities Co., Ltd.'s full provision for impairment of 30 million yuan. Breakdown disclosure of investment in non-tradable equity instruments in the current period In RMB Amount of Reasons for Reasons for other designation as other Dividend Cumul consolidated measured at fair consolidated Items income Cumulative gain ative income value and changes income recognized loss transferred to included in other transferred to retained comprehensive retained earnings income earnings Guangle Expressway Co., Non-transactional Ltd. purpose for 120 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 shareholding Guangdong Radio and Non-transactional Television Networks 652,822.25 purpose for investment No.1 Limited shareholding partnership enterprise Non-transactional China Everbright Bank Co., 37,876,045.98 378,760,459.84 purpose for Ltd. shareholding Non-transactional Huaxia Securities Co., Ltd. purpose for shareholding Non-transactional Huazheng Asset Management purpose for Co., Ltd. shareholding Non-transactional Kunlun Securities Co., Ltd. purpose for shareholding Other notes:Nil 10. Investment property (1) Investment property adopted the cost measurement mode √ Applicable □Not applicable In RMB Construction in Items Houses and buildings Land use right Total progress I. Original value 1.Opening balance 12,664,698.25 2,971,831.10 15,636,529.35 2.Increased amount of the period (1)Outsourcing (2)Inventory, Fixed assets and Construction project into (3)Enterprise consolidation 121 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 3.Decreased amount of the period (1)Disposal (2)Other Out 4.Closing balance 12,664,698.25 2,971,831.10 15,636,529.35 II.Accumulated depreciation accumulated amortization 1.Opening balance 10,373,153.97 1,684,367.84 12,057,521.81 2.Increased amount of 100,163.25 36,784.68 136,947.93 the period (1)Withdrawal or 100,163.25 36,784.68 136,947.93 amortization 3.Decreased amount of the period (1)Disposal (2)Other Out 4.Closing balance 10,473,317.22 1,721,152.52 12,194,469.74 III. Impairment provision 1.Opening balance 2.Increased amount of the period (1)Withdrawal 3.Decreased amount of the period 122 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (1)Disposal (2)Other Out 4.Closing balance IV. Book value 1.Closing book value 2,191,381.03 1,250,678.58 3,442,059.61 2.Opening book 2,291,544.28 1,287,463.26 3,579,007.54 (2) Investment property adopted fair value measurement mode □Applicable√ Not applicable (3) Details of investment property failed to accomplish certification of property In RMB Items Book balance Reason Transportation and other ancillary Transportation and other ancillary 1,514,070.42 facilities facilities, Not accreditation (4) Real estate conversion: Nil. 123 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 11. Fixed assets In RMB Items Year-end balance Year-beginning balance Fixed assets 7,911,422,302.11 7,600,046,319.91 liquidation of fixed assets 11,338.86 Total 7,911,433,640.97 7,600,046,319.91 (1) List of fixed assets In RMB Jingzhu Electricity Guangfo Fokai House and Machinery Transportatio Items Expressway equipment and Total Expressway Expressway buildings equipment n equipment Guangzhu section other I. Original price 1.Opening balance 1,460,270,190.66 8,988,726,518.80 4,798,270,209.11 342,597,957.59 122,698,641.11 48,745,472.07 659,423,683.35 16,420,732,672.69 2.Increased amount of 677,371,219.45 453,016.00 24,456,055.29 606,062.20 13,570,262.33 716,456,615.27 the period (1)Purchase 606,062.20 472,154.38 1,078,216.58 (2)Transfer of project 677,371,219.45 453,016.00 24,456,055.29 13,098,107.95 715,378,398.69 under construction (3)Increased of Enterprise consolidation 3.Decreased amount of 1,241,560.00 558,232.00 25,704,639.81 27,504,431.81 124 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Jingzhu Electricity Guangfo Fokai House and Machinery Transportatio Items Expressway equipment and Total Expressway Expressway buildings equipment n equipment Guangzhu section other the period (1)Disposal or scrap 1,241,560.00 558,232.00 25,704,639.81 27,504,431.81 4.Closing balance 1,460,270,190.66 9,666,097,738.25 4,798,270,209.11 343,050,973.59 145,913,136.40 48,793,302.27 647,289,305.87 17,109,684,856.15 II. Accumulated depreciation 1.Opening balance 1,460,270,190.66 3,940,158,837.04 2,625,645,410.16 232,333,164.38 71,147,743.72 38,419,504.01 452,711,502.81 8,820,686,352.78 2.Increased amount of 258,648,669.85 110,175,156.27 6,740,911.11 6,561,004.35 1,343,196.17 18,970,099.01 402,439,036.76 the period (1)Withdrawal 258,648,669.85 110,175,156.27 6,740,911.11 6,561,004.35 1,343,196.17 18,970,099.01 402,439,036.76 3.Decreased amount of 1,179,482.00 502,408.80 23,180,944.70 24,862,835.50 the period (1)Disposal or scrap 1,179,482.00 502,408.80 23,180,944.70 24,862,835.50 4.Closing balance 1,460,270,190.66 4,198,807,506.89 2,735,820,566.43 239,074,075.49 76,529,266.07 39,260,291.38 448,500,657.12 9,198,262,554.04 II. Accumulated depreciation 1.Opening balance 2.Increased amount of 125 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Jingzhu Electricity Guangfo Fokai House and Machinery Transportatio Items Expressway equipment and Total Expressway Expressway buildings equipment n equipment Guangzhu section other the period (1)Withdrawal 3.Decreased amount of the period (1)Disposal or scrap 4.Closing balance IV. Book value 1.Closing book value 5,467,290,231.36 2,062,449,642.68 103,976,898.10 69,383,870.33 9,533,010.89 198,788,648.75 7,911,422,302.11 2.Opening book 5,048,567,681.76 2,172,624,798.95 110,264,793.21 51,550,897.39 10,325,968.06 206,712,180.54 7,600,046,319.91 126 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 ⑵Temporarily idle fixed assets Nil ⑶Fixed assets through financial leasing Nil ⑷Tenancy of fixed assets through operating lease Nil ⑸Details of fixed assets failed to accomplish certification of property In RMB Items Book value Reason Transportation and other ancillary House and buildings 78,592,579.67 facilities, Not accreditation (6)Liquidation of fixed assets In RMB Items Year-end balance Year-beginning balance Other equipment scrap cleaning 11,338.86 Total 11,338.86 Other notes 127 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 12. Project under construction In RMB Items Year-end balance Year-beginning balance Project under construction 834,325,807.36 1,087,923,869.63 Engineering material 1,549,556.00 1,549,556.00 Total 835,875,363.36 1,089,473,425.63 (1)Project under construction In RMB Year-end balance Year-beginning balance Book balance Provisi Book value Book balance Provisi Book value Items on for on for devalu devalu ation ation Sanbao - Shuikou Expansion 788,231,558.91 788,231,558.91 1,052,834,193.16 1,052,834,193.16 project Bridge deck pavement project 1,382,928.49 1,382,928.49 1,382,928.49 1,382,928.49 of hailong Bridge Minzhong Service area 29,178,686.23 29,178,686.23 18,210,698.73 18,210,698.73 reconstruction project Urban toll station project 5,053,672.53 5,053,672.53 5,008,642.53 5,008,642.53 Odd project 10,478,961.20 10,478,961.20 10,487,406.72 10,487,406.72 Total 834,325,807.36 834,325,807.36 1,087,923,869.63 1,087,923,869.63 128 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (2) Changes of significant construction in progress In RMB Including: Capitalizat capitalization Source Name of Transferred to Other End Proportion Project Capitalization ion of Budget Opening balance Increase of of project fixed assets decrease balance % process of interest interest Interest this funding rate (%) period Self-financi Sanbao - ng and Shuikou 788,231,55 56,941,383.4 3,426,206,700.00 1,052,834,193.16 450,266,164.45 714,868,798.70 58.87% 58.87 12,717,031.46 2.75% Loans from Expansion 8.91 7 financial project institutions 788,231,55 56,941,383.4 Total 3,426,206,700.00 1,052,834,193.16 450,266,164.45 714,868,798.70 -- -- 12,717,031.46 2.75% -- 8.91 7 (3)Provision for impairment of construction projects in the current period Nil (4)Engineering material In RMB Balance in year-end Balance Year-beginning Items Book balance Provision for Book value Book Provision for Book value devaluation balance devaluation Signpost 1,549,556.00 1,549,556.00 1,549,556.00 1,549,556.00 Total 1,549,556.00 1,549,556.00 1,549,556.00 1,549,556.00 129 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 13. Intangible assets (1) List of intangible assets In RMB Patent Non-patent Items Land use right Software Total right right I. Original price 1.Opening balance 1,311,658.00 28,619,133.57 29,930,791.57 2.Increased amount of the period (1) Purchase (2)Internal Development (3)Increased of Enterprise Combination 3.Decreased amount of the period (1)Disposal 4.Closing balance 1,311,658.00 28,619,133.57 29,930,791.57 II. Accumulated amortization 1.Opening balance 1,311,658.00 22,880,113.09 24,191,771.09 2.Increased amount of the 1,184,929.43 1,184,929.43 period (1) Withdrawal 1,184,929.43 1,184,929.43 3.Decreased amount of the period (1)Disposal 4.Closing balance 1,311,658.00 24,065,042.52 25,376,700.52 130 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Patent Non-patent Items Land use right Software Total right right III. Impairment provision 1.Opening balance 2.Increased amount of the period (1) Withdrawal 3.Decreased amount of the period (1)Disposal 4.Closing balance IV. Book value 1.Closing book value 4,554,091.05 4,554,091.05 2.Opening book value 5,739,020.48 5,739,020.48 The intangible assets by the end of the formation of the company's internal R & D accounted of the proportion of the balance of intangible assets ⑵Details of Land use right failed to accomplish certification of property Nil (3) intangible assets with uncertain service life Nil (4) Important individual intangible assets Nil (5) Conditions of intangible assets subject to restrictions on ownership or right of use Nil 14. Long-term amortize expenses In RMB Balance in Increase in this Amortized Balance in Items year-begin period expenses Other loss year-end 131 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Rental fee for Guangzhu 1,221,781.88 53,508.72 1,168,273.16 North Section sport ground Total 1,221,781.88 53,508.72 1,168,273.16 15. Deferred income tax assets/deferred income tax liabilities (1) Deferred income tax assets had not been off-set In RMB Balance in year-end Balance Year-beginning Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax difference assets difference assets Deductible loss 1,126,696,090.04 281,674,022.51 1,281,389,685.73 320,347,421.43 Fixed assets 486,210,744.68 121,552,686.17 506,674,347.73 126,668,586.93 Intangible assets 561,287.20 140,321.80 1,876,105.71 469,026.43 Total 1,613,468,121.92 403,367,030.48 1,789,940,139.17 447,485,034.79 (2) Deferred income tax liabilities had not been off-set In RMB Balance in year-end Balance Year-beginning Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax difference liabilities difference liabilities Changes in the fair value of other equity 378,760,459.84 94,690,114.96 352,882,416.00 88,220,604.00 instruments Fixed assets 433,956,737.96 108,489,184.49 469,807,142.34 117,451,785.59 Total 812,717,197.80 203,179,299.45 822,689,558.34 205,672,389.59 (3)Deferred tax assets of Liabilities that are presented at the net amount after offsetting Nil (4)Details of unrecognized deferred tax assets In RMB Items Balance in year-end Balance Year-beginning Deductible temporary differences 89,748,845.07 89,748,845.07 Deductible losses 5,781,345.15 8,796,952.44 Total 95,530,190.22 98,545,797.51 132 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (5)Deductible losses of the un-recognized deferred income tax asset will expire in the following years In RMB Year Balance in year-end Balance Year-beginning Remark 2019 3,456,570.30 2020 2021 2022 1,133,109.04 2,121,083.91 2023 3,137,842.72 3,219,298.23 2024 1,510,393.39 Total 5,781,345.15 8,796,952.44 -- Other notes: 16. Other Non-current assets Whether implemented new revenue guidelines? □ Yes √No In RMB Items Balance in year-end Balance Year-beginning Prepaid Project fee 29,790,591.16 49,890,408.41 Prepaid business tax 492,900.42 518,773.08 Deductible import tax 85,425,596.24 49,385,484.09 Less:Part due within 1 year Total 115,709,087.82 99,794,665.58 Other notes: 17.Account payable (1) List of account payable In RMB Items Balance in year-end Balance Year-beginning Within 1 year(Including 1 year) 79,648,896.66 84,200,629.90 1-2 years(including2 years) 18,724,164.80 8,911,247.40 2-3 years(including 3 years) 7,471,269.20 84,119,053.06 Over 3 years 109,595,484.17 26,548,260.38 Total 215,439,814.83 203,779,190.74 133 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (2)Significant payable aging more than 1 year In RMB Items Balance in year-end Reason Heshan Land and resources Bureau 38,186,893.60 Unsettled Foshan Land and resources 13,700,178.00 Unsettled Bureau.Chancheng Branch Foshan Land and resources Bureau. 11,335,478.40 Unsettled Guangdong Highway Construction Co., 25,630,651.00 Unsettled Ltd. Guangdong Expressway Co., Ltd. 8,746,491.18 Unsettled Guangdong Xinyue Traffic Investment 1,829,141.32 Unsettled Co., Ltd. The third Research Institute of the 6,424,475.20 Unsettled Ministryof Public Security Dongguan Yongyao Photoelectricity 2,388,817.70 Unsettled Technology Co., Ltd. Total 108,242,126.40 -- Other notes: 18. Prepayment received Whether implemented new revenue guidelines? □ Yes √No (1) List of Prepayment received In RMB Items Balance in year-end Balance Year-beginning Within 1 year(Including 1 year) 215,840.47 516,610.46 1-2 years(Including 2 years) 2-3 years(Including 3 years) 419,601.44 Over 3 years 11,509,298.49 11,103,496.11 Total 11,725,138.96 12,039,708.01 (2) Significant advance from customers aging over one year In RMB Items Balance in year-end Unpaid/ Uncarry over reason Guangzhou Huanlong Expressway Co., 9,229,313.18 Land rent is not in the settlement period 134 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Ltd. Guanghdong Xinle Technology The Rental is not in the settlement 1,757,170.13 Development Co., Ltd. period Total 10,986,483.31 -- 19. Payable Employee wage (1)Payable Employee wage In RMB Items Year-beginning Increase in the Decrease in the current Year-end balance balance current period period I. Short-term compensation 13,122,437.17 131,540,765.12 127,852,673.86 16,810,528.43 II.Post-employment benefits - def 20,234,926.19 18,922,057.52 1,312,868.67 ined contribution plans Total 13,122,437.17 151,775,691.31 146,774,731.38 18,123,397.10 (2)Short-term Remuneration In RMB Items Year-beginning Increase in the Decrease in the current Year-end balance balance current period period 1.Wages, bonuses, allowances 628,563.49 96,560,819.61 92,603,286.95 4,586,096.15 and subsidies 2.Employee welfare 8,294,025.59 8,268,433.50 25,592.09 3. Social insurance premiums 9,030,523.22 9,024,732.34 5,790.88 Including :Medical insurance 5,950,272.65 5,945,195.29 5,077.36 Work injury insurance 151,140.26 151,079.52 60.74 Maternity insurance 823,534.50 822,881.72 652.78 Supplementary medical 2,105,575.81 2,105,575.81 insurance 4.Public reserves for housing 13,332,834.00 13,322,552.00 10,282.00 5.Union funds and staff 11,817,868.74 3,248,185.04 3,560,531.41 11,505,522.37 education fee 6. Other 3,600.00 3,600.00 Short-term remuneration 8.Other 676,004.94 1,070,777.66 1,069,537.66 677,244.94 135 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Total 13,122,437.17 131,540,765.12 127,852,673.86 16,810,528.43 (3)Defined contribution plans listed In RMB Balance Increase in this period Payable in this period Balance in year-end Items Year-beginning 1. Basic old-age 11,350,594.44 11,341,888.96 8,705.48 insurance premiums 2.Unemployment 433,378.99 433,010.35 368.64 insurance 3.Enterprise annuity 8,450,952.76 7,147,158.21 1,303,794.55 payment Total 20,234,926.19 18,922,057.52 1,312,868.67 Other notes: 20. Tax Payable In RMB Items Balance in year-end Balance Year-beginning VAT 9,558,893.25 13,473,944.70 83,409,953.90 85,375,209.49 Enterprise Income tax Individual Income tax 95,911.15 3,551,727.77 City Construction tax 510,507.83 793,960.96 Land use tax 607,742.40 200,454.00 Property tax 619,943.82 155,413.34 Education subjoin 247,654.02 371,885.57 Locality Education subjoin 151,087.55 233,892.04 Stamp tax 3,744.73 26,304.47 Other 2,460.00 15,953.72 Total 95,207,898.65 104,198,746.06 Other notes: 21.Other accounts payable In RMB Items Balance in year-end Balance Year-beginning Interest payable 17,157,289.56 8,971,576.57 136 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Dividend payable 21,150,413.70 17,191,142.23 Other account payable 246,255,948.01 165,091,746.04 Total 284,563,651.27 191,254,464.84 (1)Interest payable In RMB Items Balance in year-end Balance Year-beginning Pay the interest for long-term loans by 6,702,057.71 7,832,311.57 installments. Interest on medium-term bills 9,091,506.85 Interest payable on entrusted loans 1,363,725.00 1,139,265.00 Total 17,157,289.56 8,971,576.57 - Particulars of significant overdue unpaid interest Nil (2)Dividends payable In RMB Items Balance in year-end Balance Year-beginning Common stock dividends 21,150,413.70 17,191,142.23 Total 21,150,413.70 17,191,142.23 Note: Including significant unpaid dividends payable over one year, the unpaid reason shall be disclosed: Final dividend payable 16,962,838.73yuan for more than a year in unpaid dividends to shareholders over the year was mainly due to non-payment of shareholder dividends did not provide information on interest-bearing bank, di d not share reform of shareholders to receive dividends or provide application to receive dividends the bank infor mation is incorrect, resulting in failure to pay a dividend or refund. (3)Other accounts payable (1) Other accounts payable listed by nature of the account In RMB Items Year-end balance Year-Beginning balance Quality guarantee fund 69,503,074.61 67,696,625.43 Deposit 3,598,824.65 1,876,467.00 Other 38,154,048.75 50,518,653.61 137 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Borrowing 135,000,000.00 45,000,000.00 Total 246,255,948.01 165,091,746.04 (2) Other significant accounts payable with aging over one year In RMB Items Closing balance Unpaid/un-carry over reason China Railway Tunnel Group Co., Ltd. 5,514,979.86 Project Quality guarantees China Railway 18 Bureau Group Co., Project Quality Guarantees,Contractual penalty, 7,134,981.40 Ltd. Wage deposit Baoli Changda Highway Engineering Project Quality Guarantees, Project performance 8,106,409.63 Co., Ltd. fund Dongguan Yueyu Optoelectronic 1,534,850.00 Project Quality guarantee Technology Co., Ltd. Total 22,291,220.89 -- Other notes 22. Non-current liabilities due within 1 year In RMB Items Balance year-end Year-beginning balance Long-term loans due within 1 year 2,041,365,000.00 2,498,480,000.00 Total 2,041,365,000.00 2,498,480,000.00 Other notes 23. Long-term loan (1) Category of long-term loan In RMB Items Balance year-end Year-beginning balance Pledge loan 386,700,000.00 422,350,000.00 Guaranteed loan 750,000,000.00 1,125,000,000.00 Credit loan 4,186,390,000.00 3,934,170,000.00 Long-term loans due within one year -2,041,365,000.00 -2,498,480,000.00 Total 3,281,725,000.00 2,983,040,000.00 Other notes including interest rate range: The Pledge loan rate is 4.41%; the guaranteed loan interest rate is 5.6%; the credit interest rate is 4.20%-4.41%. 138 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Notes: See Section VII, 48 for the types and amounts of mortgaged assets of pledged loans. 139 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 24.Bond payable (1)Bond payable In RMB Items Balance year-end Year-beginning balance Medium- term note 677,902,761.25 Total 677,902,761.25 (2)Changes of bonds payable(Not including the other financial instrument of preferred stock and perpetual capital securities that classify as financial liability In RMB Pay Open in Withdraw Overflow ing The current curre Name of the bond Book value Issue date Period Issue amount interest at discount Closing balance balan issue nt par amount ce perio d Guangdong 680,000,000.00 2019.3.1 2019.3.1-2024.3.1 680,000,000.00 680,000,000.00 -2,097,238.75 677,902,761.25 ExpresswayMTN001 (3) Note to conditions and time of share transfer of convertible bonds Nil (4)Other financial instruments that are classified as financial liabilities Nil 140 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 25. Long-term payable In RMB Items Balance year-end Year-beginning balance Long-term payable 39,625,983.68 38,022,210.11 Total 39,625,983.68 38,022,210.11 (1) Long-term payable listed by nature of the account In RMB Items Balance year-end Year-beginning balance Non-operating asset payable 2,022,210.11 2,022,210.11 Guangdong Jiangzhong Expressway Co., 36,000,000.00 36,000,000.00 Ltd. Entrusted loan Medium term bill underwriting fee 1,603,773.57 Part due within a year Other notes: (2)Special payable Nil 26. Deferred income In RMB Items Opening balance Increase Decrease Closing balance Cause Government 2,500,000.00 2,500,000.00 subsidy Total 2,500,000.00 2,500,000.00 -- Details of government subsidies: In RMB Other Amount Amount of Asset-related Beginn New subsidy income Other End transferred to cost deducted or Items ing of in current recorded in chang of non-operationa in the current income-relate term period the current es term l income period d period Financial Related to 2,500,000.00 2,500,000.00 discount income 27. Stock capital In RMB 141 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Changed(+,-) Balance Balance in Issuance of Bonus Capitalizatio Year-beginning Other Subtotal year-end new share shares n of public reserve Total of 2,090,806,126.00 2,090,806,126.00 capital shares 28. Capital reserves In RMB Items Year-beginning Increase in the current Decrease in the current Year-end balance balance period period Share premium 2,508,408,342.99 2,508,408,342.99 Other capital reserves 28,366,622.32 25,795,500.00 54,162,122.32 Total 2,536,774,965.31 25,795,500.00 2,562,570,465.31 - The situation of change in the current capital reserve is as follows: The capital reserve in this period was increased 25,795,500.00 yuan due to the change of the owner's equity of the joint-stock company 142 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 29. Other comprehensive income In RMB Amount of current period Less:Amount transferred into profit and loss in Less:Prior period the current included in other After-tax After-tax Year-beginning Amount Year-end Items period that composite income Less:Income attribute to the attribute to balance incurred before balance recognied into transfer to retained tax expenses parent minority income tax other income in the company shareholder comprehensive current period income in prior period Other comprehensive income will be 264,661,812.00 25,878,043.84 6,469,510.96 19,408,532.88 284,070,344.88 reclassified into income or loss in the future Including: Share of other comprehensive income of the investee that cannot be 264,661,812.00 25,878,043.84 6,469,510.96 19,408,532.88 284,070,344.88 transferred to profit or loss accounted for using the equity method Other comprehensive income reclassifiable -8,488,346.90 -470,449.14 -470,449.14 -8,958,796.04 to profit or loss in subsequent periods Including:Share of other comprehensive income of the investee that cannot be -8,488,346.90 -470,449.14 -470,449.14 -8,958,796.04 transferred to profit or loss accounted for using the equity method Total of other comprehensive income 256,173,465.10 25,407,594.70 6,469,510.96 18,938,083.74 275,111,548.84 143 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Other notes, including the adjustment of the recognition of initial amount of effective part of the cash flow hedging gains and losses transfer into arbitraged items: Nil 144 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 30. Surplus reserve In RMB Items Year-beginning Increase in the current Decrease in the current Year-end balance balance period period Statutory surplus 775,402,561.35 775,402,561.35 reserve Total 775,402,561.35 775,402,561.35 Notes: Nil 31. Retained profits In RMB Items Amount of this period Amount of last period Before adjustments: Retained profits in last 3,938,609,136.59 3,550,110,288.49 period end Adjust the total undistributed profits at the -11,353,413.48 beginning of the period After adjustments: Retained profits at the period 3,927,255,723.11 3,550,110,288.49 beginning Add:Net profit belonging to the owner of the 736,486,112.30 1,677,028,179.18 parent company Less: Statutory surplus reserve 230,581,431.32 Common stock dividend payable 1,175,033,042.81 1,057,947,899.76 Retained profit at the end of this term 3,488,708,792.60 3,938,609,136.59 As regards the details of adjusted the beginning undistributed profits (1)As the retroactive adjustment on Enterprise Accounting Standards and its related new regulations, the affected beginning undistributed profits are RMB -11,353,413.48 (2) As the change of the accounting policy, the affected beginning undistributed profits are RMB -11,353,413.48 (3) As the correction of significant accounting error, the affected beginning undistributed profits are RMB 0.00 . (4) As the change of consolidation scope caused by the same control, the affected beginning undistributed profits are RMB 0.00. (5) Other adjustment of the total affected beginning undistributed profits are RMB 0.00 . 145 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 32.Operation income and operation cost In RMB Amount of this period Amount of last period Items Income Cost Income Cost Main operation 1,465,140,817.31 536,808,262.05 1,518,875,852.56 522,317,994.54 Other operation 18,532,427.90 12,815,548.44 16,988,292.58 11,418,571.81 Total 1,483,673,245.21 549,623,810.49 1,535,864,145.14 533,736,566.35 Whether implemented new revenue guidelines? □ Yes √No Other notes 33. Business tax and subjoin In RMB Items Amount of this period Amount of last period Urban construction tax 2,826,207.50 2,938,753.34 Education surcharge 1,334,286.59 1,380,805.75 Property tax 653,603.50 661,486.13 Land use tax 607,742.40 603,977.11 Vehicle use tax 27,413.99 38,698.53 Stamp tax 151,645.56 242,575.38 Business tax 25,872.66 25,872.66 Locality Education surcharge 889,523.37 920,536.09 Other 40,728.40 40,410.00 Total 6,557,023.97 6,853,114.99 Other notes: The various taxes and additional payment criteria are detailed in the Section VI, tax. 34. Administrative expenses In RMB Items Amount of this period Amount of last period Wage 51,876,703.42 49,712,683.56 Depreciation and Amortization 5,426,970.90 5,428,661.13 Low consumables amortization 270,716.05 279,304.70 146 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Travel expenses 425,060.93 384,417.28 Office expenses 4,046,634.57 2,828,218.57 Leased expenses 5,621,607.68 5,606,396.14 The fee for hiring agency 4,459,697.91 2,202,760.36 Consultation expenses 1,186,300.00 853,466.98 Listing fee 11,320.75 11,320.76 Information cost and maintenance fee 180,975.14 48,300.00 Other 3,469,223.12 5,753,931.46 Total 76,975,210.47 73,109,460.94 35. R & D cost In RMB Items Amount of this period Amount of last period Labor cost 2,306,179.75 Depreciation expenses 52,214.75 Other 126,778.53 Total 2,485,173.03 36.Financial expenses In RMB Items Amount of this period Amount of last period Interest expenses 115,040,857.71 125,752,286.60 Deposit interest income(-) -15,761,707.69 -18,076,236.30 Exchange Income and loss(Gain-) 1,590,432.88 2,348,188.17 Bank commission charge 904,728.33 2,755,977.00 Other 1,755,451.17 Total 103,529,762.40 112,780,215.47 37.Other gains In RMB Items Amount of this period Amount of last period Maternity allowance 377,218.29 Return of income tax procedures 40,043.40 147 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 A 10% deduction for input tax 2,965.93 Total 420,227.62 38. Investment income In RMB Items Amount of this period Amount of last period Long-term equity investment income by equity 237,712,998.09 216,777,157.34 method Dividends eamed during the holding period on 38,528,868.23 investments in other equity instrument Hold the investment income during from 42,581,144.86 available-for-sale financial assets Total 276,241,866.32 259,358,302.20 39. Asset impairment loss Whether implemented new revenue guidelines? □ Yes √No In RMB Items Amount of this period Amount of last period I. Bad debt loss 57,890.35 Total 57,890.35 Other note: 40.Assets disposal income In RMB Source Amount of this period Amount of last period Income from disposal of Fixed assets 44,860,186.67 Income from disposal of Intellectual 13,129,094.29 property right 148 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Notes : According to the overall plan of upgrading and renovation of Guangdong expressway toll collection system. In April 2019, Guangdong Gaosu Science and Technology Investment Co., Ltd. transferred the related rights of "Blue Channel" which had not been completed as an asset group to the related party, Guangdong Unitoll Collection Inc.The transaction was based on the evaluation value of the underlying asset group of China Federation International Assessment Consulting Co., Ltd. (Assessment Report No. WIGPD0664, CIFIC International Commentary [2018]). 41. Non-Operation income In RMB Recorded in the amount of the Items Amount of this period Amount of last period non-recurring gains and losses Loss & abandonment of 110,018.02 non-current assets Road property claim income 543,754.07 736,148.53 543,754.07 Other income 191,605.69 1,841,394.03 191,605.69 Total 735,359.76 2,687,560.58 735,359.76 - Government subsidy reckoned into current gains/losses: Nil 42. Non-Operation expense In RMB The amount of non-operating Items Amount of current period Amount of previous period gains & losses Loss & abandonment of 2,591,350.52 505,483.87 2,591,350.52 non-current assets Fine 207.98 357,855.32 207.98 Other 1,639,849.45 1,144,628.24 1,639,849.45 Total 4,231,407.95 2,007,967.43 4,231,407.95 43. Income tax expense (1) Lists of income tax expense In RMB Items Amount of current period Amount of previous period Current income tax expense 154,541,370.84 179,094,084.83 Deferred income tax expense 35,155,403.21 34,127,634.02 Total 189,696,774.05 213,221,718.85 149 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (2) Adjustment process of accounting profit and income tax expense In RMB Items Amount of current period Total profits 1,033,282,577.92 Current income tax expense accounted by tax and relevant 258,320,644.48 regulations Influence of non taxable income -69,151,826.00 Impact of non-deductible costs, expenses and losses 1,297,869.31 Affect the use of deferred tax assets early unconfirmed deductible losses -1,111,136.29 The current period does not affect the deferred tax assets recognized 387,306.91 deductible temporary differences or deductible loss other -46,084.36 Income tax expense 189,696,774.05 44. Other comprehensive income Refer to the notes 7.29 45.Items of Cash flow statement (1)Other cash received from business operation In RMB Items Amount of current period Amount of previous period Interest income 15,761,707.69 18,076,236.30 Unit current account 9,857,010.59 23,870,093.68 Total 25,618,718.28 41,946,329.98 (2)Other cash paid related to operating activities In RMB Items Amount of current period Amount of previous period Management expense 16,677,364.01 18,068,478.74 Network received toll income 6,999,980.83 3,803,254.03 Unit current account 14,244,441.25 Total 37,921,786.09 21,871,732.77 150 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (3)Cash received related to other investment activities Nil (4)Cash paid related to other investment activities Nil (5)Other cash received in relation to financing activities Nil (6)Cash paid related with financing activities In RMB Items Amount of current period Amount of previous period Medium-term bill issuance fee 791,384.00 Total 791,384.00 46. Supplement Information for cash flow statement (1)Supplement Information for cash flow statement In RMB Supplement Information Amount of current Amount of previous period period I. Adjusting net profit to cash flow from operating activities -- -- Net profit 843,585,803.87 898,633,867.88 Add: Impairment loss provision of assets -57,890.35 Depreciation of fixed assets, oil and gas assets and consumable biological 402,575,984.69 398,876,127.65 assets Amortization of intangible assets 1,184,929.43 1,318,922.34 Amortization of Long-term deferred expenses 53,508.72 55,661.40 Loss on disposal of fixed assets, intangible assets and other long-term deferred -13,129,094.29 -44,860,186.67 assets Fixed assets scrap loss 2,591,350.52 395,465.85 Financial cost 116,631,290.59 130,600,474.77 151 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Supplement Information Amount of current Amount of previous period period Loss on investment -276,241,866.32 -259,358,302.20 Decrease of deferred income tax assets 44,118,004.31 54,102,320.89 Increased of deferred income tax liabilities -8,962,601.10 -42,912,043.91 Decrease of inventories -29,124.58 -139,076.49 Decease of operating receivables -16,566,898.76 -4,522,183.33 Increased of operating Payable -45,000,189.85 -312,353,569.73 Net cash flows arising from operating activities 1,050,811,097.23 819,779,588.10 II. Significant investment and financing activities that without cash flows: -- -- 3.Movement of cash and cash equivalents: -- -- Ending balance of cash 2,036,803,751.05 1,821,466,139.37 Less: Beginning balance of cash equivalents 2,123,303,796.32 2,363,042,700.42 Net increase of cash and cash equivalents -86,500,045.27 -541,576,561.05 (2) Net Cash paid of obtaining the subsidiary Nil (3) Net Cash receive of disposal of the subsidiary Nil (4)Composition of cash and cash equivalents In RMB Items Balance in year-end Balance in year-Beginning 2,036,803,751.05 2,123,303,796.32 Cash 91,690.76 53,211.49 Of which: Cash in stock Bank savings could be used at any time 2,036,197,054.12 2,122,585,810.07 Other monetary capital could be used at 515,006.17 664,774.76 any time Balance of cash and cash equivalents at 2,036,803,751.05 2,123,303,796.32 the period end Other note: Cash and cash equivalents exclude restricted cash and cash equivalents used by parent companies or subsidiaries within a group. 47. Note of statement of changes in the owner's equity 152 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Explain "other" project name and adjustment amount of the adjustment of closing balance in previous year, etc.: Nil 48. The assets with the ownership or use right restricted In RMB Items Book value at the end of the period Restricted reason Land reclamation funds in the Monetary fund 1,221,200.00 fund escrow account Total 1,221,200.00 -- Other notes: Up to June 30, 2019, Jingzhu Expressway Guangzhu Section Co., Ltd., the controlling grandchildren company of the Company, with the toll collection right 19.20% of Panyu Tangkeng-Zhuhai Jinding section project in Jingzhu expressway, asked for386,700,000.00 yuan of loan from Guangzhou Wuyang Branch of ICBC to provide pledge guarantee(of which the non-current debt balance with 1-year expiration was 38,680,000.00 yuan and the long-term loan balance was 348,020,000.00 yuan). 49. Foreign currency monetary items Nil 50.Hedging Nil 51. Government subsidies (1)Government subsidies confirmed in current period In RMB Amount included in current Items Amount Project profit and loss Financial discount 2,500,000.00 Financial expenses 2,500,000.00 Maternity allowance 377,218.29 Other income 377,218.29 Return of income tax 40,043.40 Other income 40,043.40 procedures A 10% deduction for input 2,965.93 Other income 2,965.93 tax (2)Government subsidy return Nil 153 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 52.Other Nil VIII. Changes of merge scope 1. Business merger not under same control Nil 2. Business combination under the same control Nil 3. Counter purchase Nil 4. The disposal of subsidiary Whether there is a single disposal of the investment to subsidiary and lost control □ Yes √No Whether there are multiple transactions step by step dispose the investment to subsidiary and lost control in reporting period □ Yes √ No 5. Other reasons for the changes in combination scope Notes to reasons for the changes in combination scope (Newly established subsidiary and subsidiary of liquidation) and relevant information In August 2018, Guangdong Fokai Expressway Co., Ltd. completed the industrial and commercial cancellation, and obtained the “Notice of Approval for Cancellation Registration” and the “Notice of Permit for Cancellation Registration”. From August 2018, Guangdong Fokai Expressway Co., Ltd. was no longer included in the scope of consolidated statements. IX. Equity in other entities 1. Equity in subsidiary (1) The structure of the enterprise group 154 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Registr Shareholding Ratio Main Places Name of Subsidiary ation Nature of Business (%) Obtaining Method of Operation Place direct indirect Under the same Guangz Expressway Guangfo Expressway Co., Ltd. Guangzhou 75.00% control business Management hou combination Investment in Guangdong Expressway Technology Guangz technical industries Guangzhou 100.00% Investment Investment Co., Ltd. hou and provision of relevant Under the same Guangzhuo Guangzhu Traffic Guangz Investment Guangzhou 100.00% control business Investment Management Co., Ltd. hou management combination Under the same Jingzhu Expressway Guangzhu Guangz Expressway Zhongshan 20.00% 55.00% control business Section Co.,Ltd.(Notes) hou Management combination Yuegao Capital Investment Guangzhou Zhuhai 100.00% Investment Investment(Hengqin)Co., Ltd. management Notes: holding proportion in subsidiary different from voting proportion: Nil Basis of holding half or less voting rights but still been controlled investee and holding more than half of the voting rights not been controlled investee: Nil Significant structure entities and controlling basis in the scope of combination: Nil Basis of determine whether the Company is the agent or the principal: Nil Other notes: Jingzhu Expressway Guangzhu Section Co., Ltd. is a non-wholly owned subsidiary of Guangzhou Guangzhu Traffic Investment Management Co., Ltd. Guangzhou Guangzhu Traffic Investment Management Co., Ltd. holds 55% equity in Guangzhu Section Co., Ltd. of Beijing-Zhuhai Expressway. (2) Important Non-wholly-owned Subsidiary In RMB Shareholding Profit or Loss Owned Dividends Distributed Equity Balance of the Ratio of by the Minority to the Minority Minority Shareholders Name of Subsidiary Minority Shareholders in the Shareholders in the in the End of the Shareholders Current Period Current Period Period (%) Guangfo Expressway Co., Ltd. 25.00% 35,631,805.76 64,914,807.35 110,721,305.45 155 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Jingzhu Expressway Guangzhu 25.00% 71,467,885.81 158,471,897.94 232,591,404.70 Section Co.,Ltd. Holding proportion of minority shareholder in subsidiary different from voting proportion Nil 156 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (3) The main financial information of significant not wholly owned subsidiary In RMB Year-end balance Year-beginning balance Name Current Non- current Current Non- current Non- current Current Non- current Total Total assets Total liabilities Current assets Total assets assets assets Liabilities liabilities assets Liabilities liabilities liabilities Guangfo Expresswa 478,939,446.36 24,093,537.24 503,032,983.60 60,147,761.80 60,147,761.80 590,663,709.13 27,675,485.80 618,339,194.93 58,321,966.77 58,321,966.77 y Co., Ltd. Jingzhu Expresswa y 144,135,264.47 2,191,608,535.63 2,335,743,800.10 280,965,311.82 1,124,412,869.47 1,405,378,181.29 432,281,073.29 2,301,876,076.48 2,734,157,149.77 419,370,011.85 1,036,405,470.57 1,455,775,482.42 Guangzhu Section Co.,Ltd. In RMB Amount of current period Amount of previous period Total Cash flows from Cash flows from Name Business Total Comprehensive Business income Net profit Comprehensive operating Net profit operating income income income activities activities Guangfo Expressway Co., Ltd. 231,359,875.86 142,527,223.05 142,527,223.05 146,829,390.44 226,325,833.32 142,435,343.71 142,435,343.71 145,431,353.01 Jingzhu Expressway Guangzhu 613,528,787.18 285,871,543.23 285,871,543.23 390,248,834.50 645,871,184.09 336,091,139.89 336,091,139.89 433,240,710.71 Section Co.,Ltd. Other notes: 157 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (4) Significant restrictions of using enterprise group assets and pay off enterprise group debt Nil (5) Provide financial support or other support for structure entities incorporate into the scope of consolidated financial statements Nil 2. The transaction of the Company with its owner’s equity share changed but still controlling the subsidiary Nil 3. Equity in joint venture arrangement or associated enterprise (1) Significant joint venture arrangement or associated enterprise Proportion Accounting treatment of the Main operating Registration investment of Name Business nature place place Directly Indirectly joint venture or associated enterprise Guangdong Guanghui Guangzhou, Guangzhou, Expressway 30.00% Equity method Expressway Guangdong Guangdong Management Co., Ltd. Zhaoqing Yuezhao Zhaoqing, Zhaoqing, Expressway 25.00% Equity method Highway Co., Management Guangdong Guangdong Ltd. Shenzhen Huiyan Shenzhen Shenzhen Expressway 33.33% Equity method Expressway Guangdong Guangdong Management Co., Ltd. Guangdong Jiangzhong Zhongshan , Guangzhou,Gu Expressway 15.00% Equity method Expressway Guangdong angdong Management Co., Ltd. Ganzhou kangda Gangzhou, Gangzhou, Expressway 30.00% Equity method Expressway Jiangxi Jiangxi Management Co., Ltd. Ganzhou Gangzhou, Gangzhou, Expressway Gankang 30.00% Equity method Jiangxi Jiangxi Management Expressway 158 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Co., Ltd. Guangdong Yueke Guangzhou, Guangzhou, Hande all kinds Technology 20.00% Equity method Guangdong Guangdong of small loans Petty Loan Co., Ltd. Guangyuan Security Securities Co., Hefei, Anhui Hefei, Anhui 2.37% Equity method business Ltd. Notes to holding proportion of joint venture or associated enterprise different from voting proportion: Nil Basis of holding less than 20% of the voting rights but has a significant impact or holding 20% or more voting rights but does not have a significant impact: Guangdong, Jiangzhong Expressway Co., Ltd and Guangyuan Securities Co., Ltd... holds 20% of the voting rights, but has the power to participate in making decisions on their financial and op erating decisions, and therefore deemed to be able to exert significant influence over the investee. (2) Main financial information of significant joint venture In RMB Year-beginning balance/ Amount of previous Year-end balance/ Amount of current period period Guangdong Guanghui Zhaoqing Yuezhao Guangdong Guanghui Zhaoqing Yuezhao Expressway Co., Ltd. Highway Co., Ltd. Expressway Co., Ltd. Highway Co., Ltd. Current assets 1,037,374,944.35 223,190,616.84 886,631,849.70 196,254,075.84 Including:Cash and 649,776,493.58 203,757,595.19 621,540,000.54 180,784,827.23 cash equivalent Non-current assets 3,684,003,696.57 1,503,858,440.11 3,813,612,927.86 1,565,557,770.89 Total assets 4,721,378,640.92 1,727,049,056.95 4,700,244,777.56 1,761,811,846.73 Current liabilities 380,259,354.55 170,743,108.11 544,082,765.04 151,065,956.20 Non-current liabilities 750,585,884.83 429,171,145.43 847,757,933.94 382,056,538.13 Total liabilities 1,130,845,239.38 599,914,253.54 1,391,840,698.98 533,122,494.33 Attributable to shareholders of the 3,590,533,401.54 1,127,134,803.41 3,308,404,078.58 1,228,689,352.40 parent company Share of net assets 1,077,160,020.46 281,783,700.85 992,521,223.58 307,172,338.10 calculated by stake Book value of equity 1,077,160,020.46 281,783,700.85 992,521,223.58 307,172,338.10 investment in joint 159 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 ventures Operating income 917,898,192.73 271,809,006.27 878,931,209.54 264,667,911.36 Financial expenses 10,890,126.55 8,018,895.83 18,892,654.01 11,944,947.35 Income tax expenses 159,573,250.38 36,249,025.63 152,535,401.50 39,485,100.11 Net profit 478,273,173.41 111,276,912.65 447,126,957.50 114,543,781.53 Total comprehensive 478,273,173.41 111,276,912.65 447,126,957.50 114,543,781.53 income Dividends received from joint ventures this 84,638,655.14 53,207,865.41 37,805,847.20 43,088,859.48 year Other notes 160 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (3) Main financial information of significant associated enterprise In RMB Year-end balance/ Amount of current period Year-beginning balance/ Amount of previous period Shenzhe Guangdong Guangdong n Guangdong Ganzhou Shenzhen Guangdong Ganzhou Ganzhou Yueke Guoyuan Ganzhou Yueke Guoyuan Huiyan Jiangzhong Gankang Huiyan Jiangzhong Gankang Kangda Technology Securities Co., Kangda Technology Securities Co., Express Expressway Expressway Expressway Expressway Expressway Expressway Petty Loan Ltd. Expressway Petty Loan Co., Ltd. way Co., Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd Ltd Ltd. Current 203,740,2 197,428,062.33 55,202,301.36 291,779,329.73 1,435,055,907.93 61,855,277,205.05 153,631,998.00 86,313,236.14 35,495,996.32 270,093,954.27 1,394,967,072.45 42,721,180,653.50 assets 50.60 Non-cur 579,942,5 rent 1,616,367,531.02 1,442,449,120.81 1,326,869,593.48 8,497,468.27 23,466,136,337.81 569,633,252.71 1,701,322,494.90 1,463,543,288.08 1,372,121,014.40 8,047,674.82 35,374,232,070.51 39.84 assets Total 783,682,7 1,813,795,593.35 1,497,651,422.17 1,618,648,923.21 1,443,553,376.20 85,321,413,542.86 723,265,250.71 1,787,635,731.04 1,499,039,284.40 1,642,214,968.67 1,403,014,747.27 78,095,412,724.01 assets 90.44 Current 31,708,44 liabilitie 210,083,276.93 112,133,062.29 81,897,874.17 73,463,278.19 47,675,073,040.50 31,603,980.10 170,304,772.67 72,629,731.89 109,921,418.26 40,797,858.70 46,417,460,063.63 5.60 s Non-cur rent 12,000,00 362,000,000.00 664,436,870.32 820,307,181.39 553,525.66 13,076,057,576.44 448,500,000.00 693,126,157.44 832,307,181.39 636,518.58 6,989,817,868.77 Liabiliti 0.00 es Total 43,708,44 liabilitie 572,083,276.93 776,569,932.61 902,205,055.56 74,016,803.85 60,751,130,616.94 31,603,980.10 618,804,772.67 765,755,889.33 942,228,599.65 41,434,377.28 53,407,277,932.40 5.60 s 161 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Year-end balance/ Amount of current period Year-beginning balance/ Amount of previous period Shenzhe Guangdong Guangdong n Guangdong Ganzhou Shenzhen Guangdong Ganzhou Ganzhou Yueke Guoyuan Ganzhou Yueke Guoyuan Huiyan Jiangzhong Gankang Huiyan Jiangzhong Gankang Kangda Technology Securities Co., Kangda Technology Securities Co., Express Expressway Expressway Expressway Expressway Expressway Expressway Petty Loan Ltd. Expressway Petty Loan Co., Ltd. way Co., Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd Ltd Ltd. Minorit y Shareho 235,126,897.17 11,457,327.58 263,112,578.63 11,368,910.62 lders’ Equity Shareho lders’ equity attributa 739,974,3 ble to 1,241,712,316.42 721,081,489.56 716,443,867.65 1,134,409,675.18 24,558,825,598.34 691,661,270.61 1,168,830,958.37 733,283,395.07 699,986,369.02 1,098,467,791.36 24,676,765,880.99 44.84 shareho lders of the parent Pro rata share o f the net 246,658,1 186,256,847.46 216,324,446.87 214,933,160.30 226,881,935.03 580,883,093.44 230,553,756.87 175,324,643.76 219,985,018.52 209,995,910.71 219,693,558.27 583,672,702.24 assets c 14.95 alculate d --Good 206,725,818.02 206,725,818.02 162 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Year-end balance/ Amount of current period Year-beginning balance/ Amount of previous period Shenzhe Guangdong Guangdong n Guangdong Ganzhou Shenzhen Guangdong Ganzhou Ganzhou Yueke Guoyuan Ganzhou Yueke Guoyuan Huiyan Jiangzhong Gankang Huiyan Jiangzhong Gankang Kangda Technology Securities Co., Kangda Technology Securities Co., Express Expressway Expressway Expressway Expressway Expressway Expressway Petty Loan Ltd. Expressway Petty Loan Co., Ltd. way Co., Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd Ltd Ltd. will The boo k value of equit 246,658,1 y invest 186,256,847.46 216,324,446.87 214,933,160.30 226,881,935.03 787,608,911.46 230,553,756.87 175,324,643.76 219,985,018.52 209,995,910.71 219,693,558.27 790,398,520.26 14.95 ments i n joint v entures Fair value of equity investm ent of associat 896,321,336.64 555,621,862.28 ed enterpri ses with open quotatio n Buinses 117,304,8 242,978,582.04 120,016,044.66 86,684,080.43 71,544,176.43 1,616,521,271.21 121,958,669.64 238,655,329.27 113,055,381.54 78,967,126.91 91,160,960.52 1,109,717,564.95 163 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Year-end balance/ Amount of current period Year-beginning balance/ Amount of previous period Shenzhe Guangdong Guangdong n Guangdong Ganzhou Shenzhen Guangdong Ganzhou Ganzhou Yueke Guoyuan Ganzhou Yueke Guoyuan Huiyan Jiangzhong Gankang Huiyan Jiangzhong Gankang Kangda Technology Securities Co., Kangda Technology Securities Co., Express Expressway Expressway Expressway Expressway Expressway Expressway Petty Loan Ltd. Expressway Petty Loan Co., Ltd. way Co., Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd Ltd Ltd. s incme 47.55 Net 48,313,07 72,881,358.05 57,798,094.49 16,457,498.63 43,992,902.36 432,745,658.33 53,441,605.08 45,984,003.63 46,129,129.35 10,167,378.44 36,989,232.30 211,597,500.90 profit 4.35 Other compre 6,888,669.24 -210,693,647.23 hensive income Total compre 48,313,07 72,881,358.05 57,798,094.49 16,457,498.63 43,992,902.36 439,634,327.57 53,441,605.08 45,984,003.63 46,129,129.35 10,167,378.44 36,989,232.30 903,853.67 hensive 4.35 income Dividen ds recei ved fro m assoc 3,789,200.79 11,940,297.90 iates du ring the year Other notes 164 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (4) Summary financial information of insignificant joint venture or associated enterprise Nil (5) Note to the significant restrictions of the ability of joint venture or associated enterprise transfer funds to the Company Nil (6)The excess loss of joint venture or associated enterprise (7) The unrecognized commitment related to joint venture investment Nil (8) Contingent liabilities related to joint venture or associated enterprise investment Nil 4. Significant common operation Nil 5. Equity of structure entity not including in the scope of consolidated financial statements Notes: Nil X. Risks Related to Financial Instruments The main financial instruments of the Company include equity investments, financial products, trust investments, accounts receivable, accounts payable etc., please refer to Note 6 for detail of related items. The risk associated with financial instruments, and risk management policies which the Company uses to reduce these risks are described below. The management of the Company manages and supervises the risks to ensure that the risks can be controlled within a limited range. The Company uses sensitivity analysis techniques to analyze the impact of reasonable and possible changes in risk variables on current profit and loss or shareholders' equity. Since any risk variable seldom changes in isolation, and the correlation between variables will have a significant impact on the final amount of change in a risk variable, the following is assumed to be independent of each variable. (I)The targets and policies of risk management The target of risk management is to obtain the proper balance between the risk and benefit, to reduce the negative impact that is caused by the risk of the Company to the lowest level, and to maximize the benefits of shareholders and other equity investors. Based on the targets of risk management, the basic strategy of the Company’s risk management is to identify and analyze the risks which are faced by the Company, establish suitable risk tolerance baseline and proceed the risk management, and supervise a variety of risks timely and reliably, and control the risks within a limited range. 1.Market risk 165 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (1)Foreign exchange risk Foreign exchange risk refers to the risk of loss due to exchange rate fluctuations generally. Our foreign exchange risk is mainly related to Hong Kong Dollar. Besides annual distribution of B-share shareholder dividends, other major business activities of our Company are settled in RMB. During the reporting period, due to the short credit period of the Company's income and expenditure related to foreign currency, it was not affected by foreign exchange risk. (2)Interest rate risk The Company's risk of cash flow changes in financial instruments caused by interest rate changes is mainly related to floating rate bank borrowings (see this Section VII 23). The Company's policy is to maintain the floating interest rate of these borrowings, and at the same time to reasonably reduce the risk of interest rate fluctuation by shortening the term of a single loan and specifically agreeing on prepayment terms. (3)Other price risk The investments held by the Company are classified as financial assets measured at fair value and whose changes are included in other comprehensive income (financial assets available for sale on or before December 31, 2018) and are measured at fair value on the balance sheet date. Therefore, the Company bears the risk of changes in the securities market. 2.Credit risk On June 30, 2019, the largest credit risk exposure that may cause financial losses of the Company mainly comes from the loss of financial assets of the Company caused by the failure of the other party to perform its obligations. In order to reduce credit risk, the Company only deals with recognized and reputable customers. In addition, the Company reviews the recovery of each single receivables on each balance sheet date to ensure that adequate bad debt provisions are made for unrecoverable amounts. Consequently, the Company's management believes that the Company's credit risk has been greatly reduced. 3.Liquidity risk When managing liquidity risks, the Company maintains sufficient cash and cash equivalents as deemed by the management and monitor them to meet the Company's operational needs and reduce the impact of cash flow fluctuations. The management of the Company monitors the use of bank loans and ensures compliance with the loan agreement. (II) Transfer of financial assets Nil (III) Offsetting of financial assets and financial liabilities Nil XI. The disclosure of the fair value 1. Closing fair value of assets and liabilities calculated by fair value In RMB Closing fair value Fir value Fir value Fir value Items measurement measurement measurement Total items at level 1 items at level 2 items at level 3 I. Consistent fair value -- -- -- -- 166 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 measurement (3)Other equity instrument investment 896,321,336.64 896,321,336.64 Total assets continuously measured at fair 896,321,336.64 896,321,336.64 value II. Non –persistent measure -- -- -- -- 2. Market price recognition basis for consistent and inconsistent fair value measurement items at level 1. As at the end of the period, the company holds shares 235,254,944 shares of China Everbright Bank According to the closing price of June 30, 2019 of 3.81 yuan, the final calculation of fair value was 896,321,336.64 yuan. 3. Valuation technique adopted and nature and amount determination of important parameters for consistent and inconsistent fair value measurement items at level 2. Nil 4. Sensitiveness analysis on unobservable parameters and adjustment information between opening and closing book value of consistent fair value measurement items at level 3. Nil 5. Sensitiveness analysis on unobservable parameters and adjustment information between opening and closing book value of consistent fair value measurement items at level 3. Nil 6. Explain the reason for conversion and the policy governing when the conversion happens if conversion happens among consistent fair value measurement items at different levels Nil 7. Changes in the valuation technique in the current period and the reason for change Nil 8. Fair value of financial assets and liabilities not measured at fair value At the end of the period, the fair value of financial assets and financial liabilities held by the Company that are not measured at fair value is as follows: Items Book value Fair values Rem Balance at Beginning Ending amount Affiliated ark of the Year hierarchy 167 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Financial assets not measured at fair 798,348,301.73 798,348,301.73 798,348,301.73 value Investment in other equity instruments 798,348,301.73 798,348,301.73 798,348,301.73 Financial liabilities not measured at fair value 9. The valuation method and relevant information description of the fair value change caused by the enterprise's own credit risk of financial assets and financial liabilities designated as fair value measurement and whose changes are included in current profits and losses Nil XII. Related parties and related-party transactions 1. Parent company information of the enterprise The parent The parent Register Redistricted company of the company of the Name ed Nature capital Company's Company’s vote address shareholding ratio ratio Equity management, traffic Guangdong communication Guangzh infrastructure 26.8 billion 24.55% 50.12% Group Co., Ltd ou construction and railway project operation Notes : Guangdong Communication Group Co., Ltd. is the largest shareholder of the Company. legal representative: Deng Xiaohua. Date of establishment: June 23, 2000. As of June 30, 2019,Registered capital: 26.8 billion yuan. It is a solely state-owned limited company. Business scope:equity management, organization of asset reorganization and optimized allocation, raising funds by means including mortgage, transfer of property rights and joint stock system transformation, project investment, operation and management, traffic infrastructure construction, highway and railway project operation and relevant industries, technological development, application, consultation and services, highway and railway passenger and cargo transport, ship industry, relevant overseas businesses; The value-added communication business. The finial control of the Company was State owned assets supervision and Administration Commission of Guangdong Provincial People's Government. 2.Subsidiaries of the Company Subsidiaries of this enterprise, see Note IX(1) the rights of other entity 3. Information on the joint ventures and associated enterprises of the Company Information on other joint venture and associated enterprise of occurring related party transactions with the 168 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Company in reporting period, or form balance due to related party transactions in previous period: Nil 4. Other Related parties Name Relation with the Company Guangdong Litong Real Estate Investment Co., Ltd. Fully owned subsidiary of the parent company Guangdong Highway Construction Co., Ltd. Fully owned subsidiary of the parent company Guangdong Guanghui Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong East Thinking Management Technology Fully owned subsidiary of the parent company Development Co., Ltd. Guangdong Guangle Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Jiangzhong Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Union Electron Service Co., ltd. Fully owned subsidiary of the parent company Guangdong Humen Bridge Co., Ltd. Fully owned subsidiary of the parent company Guangdong Xinyue Traffic Investment Co., Ltd. Fully owned subsidiary of the parent company Guangdong Litong Technology Investment Co., Ltd. Fully owned subsidiary of the parent company Guangdong Tongyi Expressway Service Area Co., Ltd. Fully owned subsidiary of the parent company Guangdong Expressway Media Co., Ltd. Fully owned subsidiary of the parent company Guangdong Hualu Traffic Technology Co., Ltd. Fully owned subsidiary of the parent company Guangdong Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Gaoda Property Development Co., Ltd. Fully owned subsidiary of the parent company Guangdong Two Guang Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Hehui Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Jiangzhao Expressway Management Center Fully owned subsidiary of the parent company Guangdong Kaiyang Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Lluoyang Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Maozhan Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Meihe Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Ninghua Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Shanfen Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Yangmao Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Yuedong Expressway Industry Development Co., Fully owned subsidiary of the parent company Ltd. Guangshenzhu Expressway Co., Ltd. Fully owned subsidiary of the parent company Heyuan Helong Expressway Co., Ltd. Fully owned subsidiary of the parent company 169 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Name Relation with the Company Yunfu Guangyun Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Boda Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Traffic Industry Investment Co., Ltd. Fully owned subsidiary of the parent company Guangdong Road & Bridge Construction Development Co., Fully owned subsidiary of the parent company Ltd. Guangdong Zhaoyang Expressway Co., ltd. Fully owned subsidiary of the parent company Guangdong Baomao Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Yueyun Traffic Co., Ltd. Fully owned subsidiary of the parent company Guangdong Taishan Coastal Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Lulutong Co., Ltd. Fully owned subsidiary of the parent company Guangdong Chaohui Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Guangfo Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Pingxing Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangzhou Xinyue Asphalt Co., Ltd. Fully owned subsidiary of the parent company Guangdong Yueyun Traffic Co., Ltd. Fully owned subsidiary of the parent company Guangdong Jingzhu Expressway Guangzhu North Section Co., Controlled by the same parent company and equity Ltd. participation unit Controlled by the same parent company and equity Guangdong Guangzhu West Line Expressway Co., Ltd. participation unit Baoli Changda Engineering Co., Ltd. Shareholding unit of parent company Controlled by the same parent company and equity Guangdong Shenshan Expressway Co., Ltd. participation unit Guangzhongjiang Expressway Project Management Center Managed by the parent company Hongkong- Zhuhai-Macao Connection line management center Managed by the parent company Guangdong Nanyue Traffic Renbo Expressway Management Managed by the parent company Center Guangdong Nanyue Traffic Shaogan Expressway Management Managed by the parent company Center Guangdong Nanyue Traffic Yunzhang Expressway Managed by the parent company Management Center Guangdong Nanyue Traffic Renhui Expressway Management Managed by the parent company Center 170 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 5. List of related-party transactions (1)Information on acquisition of goods and reception of labor service Acquisition of goods and reception of labor service In RMB Amount of Amount of Over the Content of related Amount of Related parties current previous trading transaction last period period period limit or not Baoli Changda Engineering Co., Ltd. Service charge 2,440.62 Guangdong Litong Technology Investment Project fund 784,739.50 Co., Ltd. Guangdong Humen Bridge Co., Ltd. Project fund, service 539,307.09 Guangdong Tongyi Expressway Service Area Service 103,076.37 259,399.97 Co., Ltd Maintenance Guangdong Lulutong Co., Ltd. 715,406.99 25,393.54 charges Guangdong Union electronic services co., Ltd. Service 3,767,825.78 8,075,494.51 Guangdong Expressway Media Co., Ltd. Electric charge 6,431.59 Guangdong Guanghui Expressway Co., Ltd. Interest 2,014,593.75 1,349,043.75 Guangdong Jiangzhong Expressway Co., Ltd. Interest 708,615.00 Ganzhou Gankang Expressway Co., Ltd. Interest 765,623.34 Guangdong Expressway Media Co., Ltd. Service 606,132.08 Guangdong East Thinking Management Service 60,000.00 60,000.00 Technology Development Co., Ltd. 183,277,074. 34,838,755.4 Baoli Changda Engineering Co., Ltd. Purchase assets 35 9 uangdong Hualu Traffic Technology Co., Ltd. Purchase assets 459,346.00 1,548,686.53 Guangdong Xinyue traffic Investment Co., Purchase assets 6,688,119.43 Ltd. Related transactions on sale goods and receiving services In RMB Amount of current Amount of previous Related party Content period period Jingzhu Expressway Guangzhu North section Commission 9,516,226.40 8,092,547.17 Co., Ltd. management fee Guangdong Expressway Co., Ltd. Project fund 2,052,036.80 2,192,131.13 171 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Amount of current Amount of previous Related party Content period period Guangdong Highway Construction Co., Ltd. Project fund 603,570.34 212,264.16 Guangdong Road & Bridge Construction Project fund 120,550.07 267,452.83 Development Co., Ltd. Guangshenzhu Expressway Co., Ltd. Project fund 114,655.17 Guangdong Boda Expressway Co., Ltd. Project fund 107,547.17 117,452.83 Guangdong Kaiyang Expressway Co., Ltd. Project fund 89,142.85 134,035.68 Yunfu Guangyun Expressway Co., Ltd. Project fund 69,535.81 35,377.36 Guangdong Traffic Industry Investment Co., Project fund 59,433.96 Ltd. Guangdong Xinyue Traffic Investment Co., Ltd. Project fund 32,212.39 Guangdong West Line Expressway Co., Ltd. Project fund 234,905.66 Guangdong Humen Bridge Co., Ltd. Project fund 29,716.98 26,886.79 Guangdong Chaohui Expressway Co., Ltd. Project fund 192,452.83 Guangdong Guangfo Expressway Co., Ltd. Project fund 154,245.28 Guangdong Guanghui Expressway Co., Ltd. Project fund 144,339.62 Guangdong Guangle Expressway Co., Ltd. Project fund 142,924.53 Zhaoqing Yuezhao Highway Co., Ltd. Project fund 123,113.21 101,886.79 Guangdong Zhongjiang Expressway Project Project fund 89,622.64 Management Dept Guangdong Jiangzhong Expressway Co., Ltd. Project fund 169,001.14 82,075.47 Guangdong Taishan Coastal Expressway Co., Project fund 59,433.96 Ltd. Guangdong Litong Technology Investment Co., Project fund 35,384.62 Ltd. Shezhen Huiyan Expressway Co., Ltd. Project fund 663,319.81 26,886.79 Guangdong Yueyun Triffic Co., Ltd. Project fund 21,226.42 Notes (2)Related trusteeship/contract Nil (3) Information of related lease The Company was lessor: In RMB 172 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 The lease income confirmed The lease income confirmed Name of lessee Category of lease assets in this year in last year Guangdong Expressway Advertising lease 195,542.86 1,748.41 Media Co., Ltd. - The company was lessee: In RMB The lease income confirmed Lessor Category of leased assets Category of leased assets in this year Guangdong Litong Real Office space 4,469,957.38 4,406,113.37 Eatate Investment Co., Ltd Guangdong Guanghui Advertising column lease 884,200.00 Expressway Co., Ltd. Zhaoqing Yuezhao Highway Advertising column lease 124,031.25 Co., Ltd. Guangzhou Yueyun Traffic Car rental fee 42,400.00 97,530.00 Co., Ltd. Guangdong Gaoda Property Office space 52,686.57 7,230.00 Development Co., Ltd. Notes (4)Related-party guarantee The Company was Guarantor Nil The Company was secured party In RMB Execution Guarantor Guarantee amount Start date End date accomplished or not Guangdong Communication 1,725,000,000.00 September 25,2012 March 25,2020 No Group Co., Ltd. (5) Inter-bank lending of capital of related parties In RMB Amount Related party borrowed and Initial date Due date Notes loaned Borrowed 173 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Guangdong Guanghui 30,000,000.00 April 1,2019 March 31,2020 Expressway Co., Ltd. Guangdong Guanghui 105,000,000.00 April 2,2019 April 1,2020 Expressway Co., Ltd. Guangdong Guanghui 45,000,000.00 May 22,2018 May 21,2019 Expressway Co., Ltd. Guangdong Jiangzhong 36,000,000.00 November 14,2018 November 13,2023 Expressway Co Loaned., Ltd. Loaned (6) Related party asset transfer and debt restructuring Nil (7) Rewards for the key management personnel In RMB Items Amount of current period Amount of previous period Rewards for the key management 2,417,800.00 2,415,100.00 personnel (8) Other related-party transactions -Capital Deposit Situation of Guangdong Provincial Communication Group Finance Co., Ltd. Items Amount of current period Amount of previous period 189,879,309.18 381,881,836.28 Balance of Deposit 6,226,669.02 3,752,689.53 Interest Income Reference to the deposit rate of the people's Bank of China for Pricing Principle the same period On December 25, 2017 and December 22, 2017, the Company signed the Cash Management Business Cooperation Agreement with Guangdong Communications Group Finance Co., Ltd. and Industrial and Commercial Bank of China Guangdong Branch and signed the Cash Management Business Cooperation Agreement with Guangdong Communications Group Finance Co., Ltd. and China Construction Bank Corporation. Guangdong Branch respectively, to join in the cash pool of Guangdong Communications Group Finance Co., Ltd. -On June 15, 2016,The company ’ s 29th meeting (Provisional) of the seventh board of directors was convened. The Proposal on Entrustment of Construction Management of the Renovation and Expansion Project of Sanbao-to-Shuikou Section of Shengyang-to-Haikou National Expressway was deliberated in the meeting, agreed 174 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 that Guangdong Provincial Fokai Expressway Co., Ltd entrusts Guangdong Provincial Highway Construction Co., Ltd with the construction management of the renovation and expansion project of Sanbao-to-Shuikou Section of Shengyang-to-Haikou National Expressway, and handling the related matters of the entrustment of the construction management. ③The subsidiary Guangdong Gaosu Science and Technology Investment Co., Ltd. signed the Blue Channel Related Asset Transfer Contract with the affiliated party Guangdong Unitoll Collection Inc, transferring the rights related to the Blue Channel that have not been developed and completed as an asset group to the affiliated party Guangdong Unitoll Collection Inc at a transfer price of RMB 19,881,200.00, see Note VII, 40 for details. 6. Receivables and payables of related parties (1)Receivables In RMB Amount at year end Amount at year beginning Name Related party Balance of Bad debt Balance of Bad debt Book Provision Book Provision Account Guangdong Humen Bridge Co., Ltd. 23,560,330.99 12,579,159.31 receivable Account Guangdong Union electron Service Co., 47,675,526.05 45,159,424.41 receivable Ltd. Account Jingzhu Expressway Guangzhu North 4,819,475.01 5,280,850.02 receivable Section Co., Ltd. Account Guangdong Expressway Co., Ltd. 2,579,058.00 873,408.00 receivable Account Guangdong Highway Construction Co., 699,980.00 358,484.00 109,152.00 receivable Ltd. Account Guangdong Xinyue Traffic Investment 532,703.53 188,155.61 1,828,273.53 202,508.01 receivable Co., Ltd. Account Guangdong Kaiyang Expressway Co., 267,300.00 178,157.15 receivable Ltd. Account Guangdong Boda Expressway Co., Ltd. 114,000.00 receivable Account Guangdong Road & Bridge Construction 108,000.00 receivable Development Co., Ltd. Account Guangdong Zhongjiang Expressway 95,000.00 95,000.00 receivable Priject Management Dept 175 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Amount at year end Amount at year beginning Name Related party Balance of Bad debt Balance of Bad debt Book Provision Book Provision Account Guangdong Jiangzhao Expressway 78,000.00 156,000.00 receivable Management Center Account Yunfu Guangyun Expressway Co., Ltd. 76,000.00 receivable Account Guangdong Litong Technology 68,542.00 6,854.20 receivable Investment Co., Ltd. Account Tuangdong Taishan Coastal Expressway 63,000.00 63,000.00 receivable Co., Ltd. Account Guangdong Traffic Industry Investment 63,000.00 receivable Co., Ltd. Account Guangdong Guanghui Expressway Co., 21,125.65 901,822.65 receivable Ltd. Account Guangdong Guangzhu West Line 294,260.00 receivable Expressway Co., Ltd. Account Guangdong Yueyun Traffic Co., Ltd. 45,000.00 receivable Account Zhaoqing Yuezhao Highway Co., Ltd. 135,329.98 4,829.98 receivable Advanced Guangdong Litong Real Estate 735,092.38 735,092.38 payment Investment Co., Ltd. Advanced Zhaoqing Yuezhao Highway Co., Ltd. 20,671.75 144,702.50 payment Other Account Guangdong Litong Real Estate 1,515,077.22 1,505,864.00 receivable Investment Co., Ltd. Other Account Guangdong Guanghui Expressway Co., 1,462,587.90 1,478,904.68 receivable Ltd. Other Account Guangdong Expressway Co., Ltd. 607,620.98 630,778.47 receivable Other Account Zhaoqing Yuezhao Highway Co., Ltd. 429,558.65 437,463.87 receivable Other Account Guangdong Xinyue Traffic Investment 423,767.60 415,442.60 receivable Co., Ltd. Other Account Guangshenzhu Expressway Co., Ltd. 185,014.40 187,533.46 receivable Other Account Guangdong Tongyi Expressway Service 160,191.20 176 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Amount at year end Amount at year beginning Name Related party Balance of Bad debt Balance of Bad debt Book Provision Book Provision receivable Area Co., Ltd. Other Account Guangdong Guangzhu West Line 104,727.60 186,371.32 receivable Expressway Co., Ltd. Other Account Guangdong Expressway Media Co., Ltd. 126,660.80 275,166.57 receivable Other Account Guangdong Highway Construction Co., 133,083.25 129,529.29 receivable Ltd. Other Account Guangdong Road & Bridge Construction 73,773.60 121,948.14 receivable Development Co., Ltd. Other Account Guangdong Boda Expressway Co., Ltd. 51,808.80 52,467.45 receivable Other Account Guangdong Jiangzhong Expressway Co., 28,120.00 28,474.26 receivable Ltd. Other Account Guangdong Gaoda Property 15,906.00 11,748.00 receivable Development Co., Ltd. Other Account Guangdong Shenshan Expressway East 12,000.00 12,081.56 receivable Section Co., Ltd. Other Account Guangdong Humen Bridge Co., Ltd. 11,306.50 9,141.89 receivable Other Account Guangdong Maozhan Expressway Co., 8,747.20 14,074.11 receivable Ltd. Other Account Guangdong Shanfen Expressway Co., 8,028.80 8,028.80 receivable Ltd. Other Account Guangdong Baomao Expressway Co., 7,633.60 7,633.60 receivable Ltd. Other Account Guangdong Yuedong Expressway 7,367.20 7,367.20 receivable Industry Development Co., Ltd. Other Account Guangdong Guangle Expressway Co., 7,248.00 29,832.90 receivable Ltd. Other Account Guangdong Yangmao Expressway Co., 6,004.80 29,265.49 receivable Ltd. Other Account Guangdong Zhaoyang Expressway Co., 4,304.00 4,304.00 receivable Ltd. Other Account Guangdong Yueyun Traffic Co., Ltd. 3,032.00 3,032.00 receivable 177 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Amount at year end Amount at year beginning Name Related party Balance of Bad debt Balance of Bad debt Book Provision Book Provision Other Account Guangdong Kaiyang Expressway Co., 45,999.77 receivable Ltd. Other Account Guangdong Jingzhu Expressway 6,064.00 6,202.46 receivable Guangzhu Section Co., Ltd. Other Account Yunfu Guangyun Expressway Co., Ltd. 5,831.32 receivable Other Account Guangdong Litong Technology 5,273.00 5,273.00 receivable Investment Co., Ltd. Other Account Guangdong Guangfo Expressway Co., 3,619.10 receivable Ltd. Other Account Hongkong Zhuhai Macao Bridge 3,000.00 3,000.00 receivable Connection line management center Other Account Guangdong Chaohui Expressway Co., 2,819.90 receivable Ltd. Other Account Guangdong Two Guang Expressway 1,656.69 receivable Co., Ltd. Other Account Guangdong Meihe Expressway Co., Ltd. 574.17 receivable Other Account Heyuan Helong Expressway Co., Ltd. 467.14 receivable Other Account Guangdong Ninghua Expressway Co., 271.81 receivable Ltd. Other Account Guangdong Hehui Expressway Co., Ltd. 90.20 receivable Dividend Ganzhou Kangda Expressway Co., Ltd. 21,000,000.00 receivable Dividend Guiyuan Securities Co., Ltd. 11,940,297.90 receivable Other Non-Current Baoli Changda Engineering Co., Ltd. 18,380,900.94 4,216,292.57 Assets Other Guangdong Xinyue Traffic Investment Non-Current 823,423.25 Co., Ltd. Assets Other Guangdong Hualu Traffic Technology 796,711.00 178 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Amount at year end Amount at year beginning Name Related party Balance of Bad debt Balance of Bad debt Book Provision Book Provision Non-Current Co., Ltd. Assets Long-term Guangdong Jingzhu Expressway 1,168,273.16 1,221,781.88 amortization costs Guangzhu North Section Co., Ltd. (2)Payables In RMB Amount at year Amount at year Name Related party end beginning Account payable Baoli Changda Engineering Co., Ltd. 25,350,090.00 12,166,883.00 Account payable Guangdong Highway Construction Co., Ltd. 25,630,651.00 25,630,651.00 Account payable Guangdong Expressway Co., Ltd. 8,746,491.18 8,746,491.18 Account payable Guangdong Xinyue Traffic Investment Co., Ltd. 1,829,141.32 1,829,141.32 Account payable Guangdong Union Electron Service Co.,Ltd. 914,439.52 Account payable Guangdong Litong Technology Investment Co., Ltd. 772,350.00 1,631,800.00 Account payable Guangdong Guanghui Expressway Co., ltd. 551,400.00 551,400.00 Account payable Guangdong Hualu Traffic Technology Co., Ltd. 89,540.00 2,913,206.00 Account payable Guangzhou Xinyue Asphalt Co., Ltd. 2,537,848.10 Account payable Guangdong Maozhen Expressway Co., Ltd. 124,012.02 120,000.00 Interest payable Guangdong Guanghui Expressway Co., Ltd. 1,324,575.00 1,096,200.00 Interest payable Guangdong Jiangzhong Expressway Co., Ltd. 39,150.00 43,065.00 Other Payable account Guangdong Guanghui Expressway Co., Ltd. 134,979,941.98 45,000,000.00 Guangdong Zhongjiang Expressway Project Management Other Payable account 28,200,000.00 200,491.55 Dept Other Payable account Baoli Changda Engineering Co., Ltd. 14,612,208.16 11,346,061.22 Other Payable account Guangdong Union Electron Service Co.,Ltd. 5,033,004.70 3,800,226.36 Other Payable account Guangdong Xinyue Traffic Investment Co., Ltd. 1,679,918.51 1,779,918.51 Other Payable account Guangdong LHualu Traffic Technology Co., Ltd. 370,887.88 786,185.88 Other Payable account Guangdong Kaiyang Expressway Co., Ltd. 264,132.19 Other Payable account Guangdong Litong Technology Investment Co., Ltd. 232,127.70 203,655.20 Guangdong East Thinking Management Technology Other Payable account 210,188.00 531,573.69 Development Co., Ltd. 179 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Amount at year Amount at year Name Related party end beginning Other Payable account Guangdong Jiangzhong Expressway Co., Ltd. 149,269.03 Other Payable account Guangdong Maozhan Expressway Co., Ltd. 124,012.02 Other Payable account Guangdong Xintai Expressway Co., Ltd. 122,659.13 Other Payable account Guangdong Tongyi Expressway Service Area Co., Ltd. 120,000.00 120,000.00 Other Payable account Guangdong Expressway Media Co., Ltd. 70,000.00 70,000.00 Guangdong Jingzhu Expressway Guangzhu North Section Other Payable account 68,454.90 9,327.00 Co., Ltd. Other Payable account Guangdong Jiangzhao Expressway Management Center 59,092.11 7,217.12 Other Payable account Guangdong Lulutong Co., Ltd. 48,000.00 165,249.80 Other Payable account Guangdong Zhaoyang Expressway Co., Ltd. 32,513.24 2,145.78 Other Payable account Guangdong Traffic Industry Investment Co., Ltd. 23,026.67 2,347.68 Other Payable account Guangdong Yangmao Expressway Co., Ltd. 21,402.56 Other Payable account Guangdong Guangzhu West Line Expressway Co., Ltd. 16,226.72 Other Payable account Guangdong Expressway Co., Ltd. 257,336.62 15,342.09 Other Payable account Guangdong Shenfen Expressway Co., Ltd. 2,660.62 751.35 Other Payable account Guangshenzhu Expressway Co., Ltd. 2,395.56 Guangdong Yuedong Expressway Industry Development Other Payable account 1,838.56 1,018.37 Co., Ltd. Other Payable account Guangdong Yunwu Expressway Co., Ltd. 1,497.93 Other Payable account Guangdong Tianshan Expressway Co., Ltd. 640.96 Other Payable account Guangdong Lluoyang Expressway Co., Ltd. 500.75 319.21 Other Payable account Heyuan Helong Expressway Co., Ltd. 352.54 Other Payable account Guangdong Boda Expressway Co., Ltd. 219.13 100.97 Other Payable account Guangdong Hehui Expressway Co., Ltd. 32.93 Guangdong Road & Bridge Construction Development Co., Other Payable account 5,572.94 551.99 Ltd. Other Payable account Guangdong Highway Construction Co., Ltd. 20,973.36 689.83 Other Payable account Guangdong Baomao Expressway Co., Ltd. 3,206.11 Guangdong Nanyue Traffic Yunzhan Expressway Other Payable account 821.38 Management Center Guangdong Nanyue Traffic Shaogan Expressway Other Payable account 546.89 Management Center Other Payable account Shenzhen Huiyan Expressway Co., Ltd. 391.36 180 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Amount at year Amount at year Name Related party end beginning Guangdong Nanyue Traffic Chaozhang Expressway Other Payable account 282.67 Management Center Guangdong Nanyue Traffic Renbo Expressway Other Payable account 225.79 Management Center Other Payable account Guangdong Pingxing Expressway Co., LTD. 45.41 Other Payable account Guangdong Jiangzhong Expressway Co., Ltd. 36,000,000.00 36,000,000.00 7. Related party commitment Nil XIII. Stock payment 1. The Stock payment overall situation □ Applicable √ Not applicable 2. The Stock payment settled by equity □ Applicable √ Not applicable 3. The Stock payment settled by cash □ Applicable √ Not applicable 4. Modification and termination of the stock payment Nil 5.Other XIV. Commitments 1. Significant commitments Significant commitments at balance sheet date On June 15, 2016, the Company’ 29th meeting (Provisional) of the seventh board of directors was convened. In the meeting, the Proposal on Increasing Funding for Guangdong Fokai Expressway Co., Ltd pertaining to the Renovation and Expansion Project of Sanbao-to-Shuikou Section of Shengyang-to-Haikou National Expressway was examined and approved, agreed that based on the approved total investment amount by relevant government department, then the company’s subsidiary- Guangdong Fokai Expressway Co., Ltd carries out the investment 181 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 and construction of the renovation and expansion project of Sanbao-to-Shuikou Section of Shengyang-to-Haikou National Expressway; the company increases funding for Guangdong Provincial Fokai Expressway Co., Ltd pertaining to the renovation and expansion project of Sanbao-to-Shuikou Section of Shengyang-to-Haikou National Expressway, with the contributed funds as a proportion of 35% of the total investment amount approved by relevant government department. The afore-said item had been examined and approved in the first extraordinary general shareholder meeting, The Company had received the approval of the National Development and Reform comission about the uandongProvincial Santbao-Shuikou Expressway Section Rebubuilding and Expansion Project(NO.1874-2016-NDRC Infrastructure Document)from Guangdong Provincel Development and reform Commission On October 11, 2016, agreed with the implementation of the Guangdong Provincial Sanbao-Shuikou Expressway Section Rebuilding and Expansion Project. It’s estimated that the total investment of this project is about 3.513 billion yuan(the static investment is about 3.289 billion yuan), of which the project capital is 1.23 billion yuan that accounts for 35% of the total investment and such amount of the project capital will be provided by Guangdong Provincial Fokai Expressway Co., Ltd, and the rest amount of 2,283 billion yuan will be solved by using bank loans. According to the "Official Reply to the preliminary design of reconstruction and extension project of Guangdong Sanbao to Shuikou Road by Ministry of Transport" (No.73-2017 Transport Road Document) issued by Guangdong Provincial Department of Transport, the Ministry of Transport checked and ratified that the general estimate of the preliminary design of reconstruction and extension project of Guangdong Sanbao to Shuikou Road is RMB 3.426 billion. As of June 30,2019, The accumulated expenses occurred of Sanboto Shuikou Highway extension project was 1.945 billion yuan. No Contract Counterparty Economic Content Contract Amount Fulfilled as of June 30, 2019 1 China Railway Tunnel Group Co., Ltd. Civil Engineering 251,026,485.00 220,694,631.00 2 Boli Changda Engineering Co., Ltd. Civil Engineering 624,878,240.00 422,197,236.40 3 China Railway 18th Bureau Group Co., 219,974,609.00 174,338,854.20 Civil Engineering Ltd. 4 CCCC First Navigation Engineering 355,014,108.00 256,524,868.12 Civil Engineering Bureau Co., Ltd 2. Contingency (1) Significant contingency at balance sheet date Nil (2) The Company have no significant contingency to disclose, also should be stated Nil (3) Contingent liabilities relating to investments in joint ventures or associated enterprises See Section 9, Rights and Interests in Other Subjects. (4) Other contingent liabilities and their financial impact As of June 30,2019,The company does not disclose the pension plan undisclosed matter should exist. 182 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 XV. Events after balance sheet date 1. Significant events had not adjusted Nil 2.Profit distribution Nil 3.Sales return Nil 4.Notes of other significant event after balance sheet date Nil XVI. Other significant events 1.The accounting errors correction in previous period Nil 2.Debt restructuring Nil 3.Replacement of assets Nil 4.Pension plan Nil 5.Discontinuing operation Nil 6. Segment information The company's business for the Guangfo Expressway , the Fokai Expressway and Jingzhu Expressway Guangzhu Section toll collection and maintenance work, the technology industry and provide investment advice, no other 183 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 nature of the business, no reportable segment. 7.Other important transactions and events have an impact on investors decision-making 8.Other (1)June 15,2007 early in the morning, The 325 Jiujiang Bridge collapsed on # 23 pier for ―Nanguijii 035# collision owned by the controlling subsidiary of the company Guangdong Fokai Expressway Company leads the collapse and the traffic jam of 200 meters long of the Jiujiang Bridge. On June 10, 2009, Jiujiang Bridge opened to traffic has been restored. On June 19,2007 , The Ministry of Communications, the State Production Safety Supervision and Administration Commission issued the JiaoAnWeiming File [2007] No. 8 "Notification on the Guangdong"6.15 "Jiujiang Bridge Collision Accident", initially determined the causes of the accident are: the incident ship suddenly met heavy fog on the way from Foshan Gaoming to Sunde, the captain neglected looking out, did not take proper measures and deviated from the main channel, touched the 325 National Road Jiujiang Bridge the non-navigation bridge pier and caused the collapsion of part of the Jiujiang bridge. The accident was an unilateral On July 19,2007,Fokai Company applied preservation of property to Guangzhou Maritime Court.On August 22,2007,Fokai Company officially prosecuted to Guangzhou Maritime Court, asking Foshan South Sea Shipping Company Limited and Yang Xiong to undertake the compensation 25,587,684 yuan for the loss caused by collapsing of Jiujiang Bridge. On August 28, 2007, Guangzhou Maritime Court accepted the case. According to the (2007)-Canton Haifa No. 332 ruling book issued by Guangzhou Maritime Court, the proceeding of the case was suspended. After the court accepted the case, the incident investigation team of Guangdong Provincial Government had not made the final report of Jiujiang Bridge accident. The Court, on November 5, 2007, decided to suspend the proceeding. In September 2008, Jiujiang Bridge accident investigation report was officially reported and resumed the proceedings. On December 5, 2008, Guangzhou Marine Court opened a court trial to procceeded the case. Currently, Guangzhou Haizhu prosecutorial office was intend to prosecute the accident captain Shi Guide, therefore, on January 5, 2009, Guangzhou Maritime Court ruled the suspension of the case. On September 17, 2013, the Guangzhou Maritime Court issued a notice of civil and eliminate the cause of suspension of proceedings, the court decided to resume the trial. On December 19, 2013, the Guangzhou Maritime Court opened a court session, has not yet made the first-instance judgment. On March 7, 2014 the Court made the first instance verdict: the defendant Foshan Nanhai Yuhang ship Services Co., Ltd. and Yang Xiong compensated the plaintiff Fokai Expressway Co., Ltd. toll revenue losses of 19,357,500.96 yuan; the court dismissed the plaintiff other aspirations. The defendant appealed to the Higher People's Court of Guangdong Province, the Guangdong Provincial Higher People's Court ruled on June 5, 2014, the case discontinued proceedings. By the end of the report period, the abatement of action causes are already removed and the provincial higher court restores the hearing and conducts the investigation on April 21, 2017. (2)The 26th (Provisional)Meeting of the sixth board of directors of Guangdong Provincial Expressway Development Co., Ltd. was held of May 10, 2012. The meeting examined and adopted the proposal Concerning the Company ’ s Accepting the insurance Bond Investment Plan of Pacific Asset Management Co., Ltd. The Company was approved to accept the insurance bond investment plan made by Pacific Asset Management Co., Ltd. The amount of proceeds to be raised is not more than 1.5 billion yuan . Floating interest rate plus guaranteed 184 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 base interest rate applies as the interest rate. The Floaing interest rate shall not exceed the basic interest rate of RMB loan with a term of over five years on the day when the investment fund of the insureance company is transferred into the Company’s account and the corresponding days of the future years, which shall be adjusted once each year. The guaranteed base interest rate is 5.6%. The concrete amount of raised proceeds shall be within maximum limit of investment fund filed with CIRC. The actual amount wholly transferred to the Company shall apply. The final interest rate is subject to investment Contract for Bond Investment Plan between Pacific and Guangdong Expressway Filed with CIRC. It was approved to authorize the management of the Company to implement the above-mentioned matters. The Company was approved to provide counter guarantee to Guangdong Communication Group Co.,Ltd.with 75% equity of Guangdong Fokai Expressway Co., Ltd. Held by it . as of December 31, 2016, the company has borrowed 1.5 billion yuan. (3)The 19th (Provisional)Meeting of the Eighth board of directors of Guangdong Provincial Expressway Development Co., Ltd. was held of August 7, 2018. The meeting examined and approved the Proposal on Issuing Medium-Term Notes , Agree that the company intends to register in the China Interbank Market Dealers Association with a quota of not more than 3.4 billion yuan (inclusive), which is within 40% of the company's latest audited net assets. Apply for a one-time or installment in a timely manner, with a term of no less than 5 years (including 5 years), and raise funds to repay the loan and replenish working capital; The matter has been passed by the resolution of the first interim shareholders' meeting in 2018. On January 4, 2019, the dealers association issued a Notice of Acceptance of Registration (ZSXZ [2019] MTN 9). The amount of acceptance of the company's medium-term notes is 3.4 billion yuan, and the amount of registration is valid for 2 years from the date of receipt of the notice of acceptance, and it is jointly underwritten by Industrial and Commercial Bank of China Limited and China Construction Bank Limited. The company borrowed 680 million yuan on March 1, 2019. (4) According to the Implementation Plan for Accelerating the Electronic Non-stop Quick Toll Application Services on Expressways (Development and Reform Foundation [2019] No. 935) issued by the National Development and Reform Commission and the Ministry of Transport and the Notice on Vigorously Promoting the Development and Application of ETC on Expressways issued by the General Office of the Ministry of Transport, ETC users of expressway traffic vehicles shall strictly implement the basic preferential policies of not less than 5% of the vehicle tolls since July 1, 2019, and at the same time, from January 1, 2020, adjust the mode of freight toll charging, and uniformly charge by vehicle (axle) type. The above policies are expected to have an adverse impact on the Company's operating income, but the specific impact has not yet determined. 185 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 XVII..Notes of main items in financial reports of parent company 1. Account receivable 1.Classification account receivables. In RMB Amount in year-end Balance Year-beginning Book Balance Bad debt provision Book Balance Bad debt provision Category Amount Proporti Amount Proportion( Book value Amount Proportio Amount Proportion( Book value on(%) %) n(%) %) Accrual of bad debt provision by single item Of which: Accrual of bad debt provision by 17,585,263.17 17,585,263.17 18,405,847.15 100.00% 18,405,847.15 portfolio Of which: Total 17,585,263.17 17,585,263.17 18,405,847.15 100.00% 18,405,847.15 186 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Accrual of bad debt provision by single item: Nil Accrual of bad debt provision by portfolio: Account receivable on which bad debt provisions are provided on age basis in the group: In RMB Balance in year-end Name Receivable accounts Bad debt provision Withdrawal proportion Within 1 year 17,585,263.17 Total 17,585,263.17 - Notes of the basis of recognizing the portfolio: Provision for bad debts according to the age portfolio . Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of other receivables if the provision for bad debts of bills receivable is accrued according to the general model of expected credit loss: □ Applicable √Not applicable Disclosure by aging In RMB Aging Closing balance Within 1 year(Including 1 year) 17,585,263.17 Within 1 year 17,585,263.17 Total 17,585,263.17 (2) Accounts receivable withdraw, reversed or collected during the reporting period Nil (3)The current accounts receivable write-offs situation Nil (4)The ending balance of other receivables owed by the imputation of the top five parties Name Amount Proportion(%) Bad debt provision Guangdong Union Electronic Services 17,585,263.17 100.00 Co., Ltd. Total 17,585,263.17 100.00 187 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (5)Account receivable which terminate the recognition owning to the transfer of the financial assets Nil (6)The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts receivable Nil 2.Other accounts receivable In RMB Items Balance in year-end Balance Year-beginning Interest receivable 32,460,868.78 1,880,148.12 Dividend receivable 34,145,770.80 1,205,472.90 Other receivable 6,077,481.50 6,238,161.64 Total 72,684,121.08 9,323,782.66 (1)Interest receivable 1)Interest receivable In RMB Items Balance in year-end Balance Year-beginning Entrusted loan 32,460,868.78 1,880,148.12 Total 32,460,868.78 1,880,148.12 2)Significant dividend receivable aged over 1 year Nil 3)Bad-debt provision □ Applicable √ Not applicable (2)Dividend receivable 1)Dividend receivable In RMB Items Balance in year-end Balance Year-beginning Guangdong Radio and Television Networks investment 1,205,472.90 1,205,472.90 No.1 Limited partnership enterprise Ganzhou Kangda Expressway Co., Ltd. 21,000,000.00 Gluoyuan Securities Co., Ltd. 11,940,297.90 Total 34,145,770.80 1,205,472.90 188 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (2)Significant dividend receivable aged over 1 year Nil 3)Bad-debt provision □ Applicable √ Not applicable (3) Other accounts receivable 1) Other accounts receivable classified by the nature of accounts In RMB Nature Closing book balance Opening book balance Balance of settlement funds for 30,844,110.43 30,844,110.43 securities transactions Cash deposit 1,953,995.00 1,930,943.00 Petty cash 1,581,352.00 1,605,100.00 Other 2,542,134.50 2,051,718.64 Current account 650,400.00 Total 36,921,591.93 37,082,272.07 2)Bad-debt provision In RMB Stage 1 Stage 2 Stage 3 Expected credit Expected credit loss over Expected credit losses for Bad Debt Reserves Total losses over the next life (no credit the entire duration (credit 12 months impairment) impairment occurred) Balance as at January 30,844,110.43 30,844,110.43 1, 2019 Balance as at January —— —— —— —— 1, 2019 in current Banlance as at June 30,844,110.43 30,844,110.43 30,2019 Loss provision changes in current period, change in book balance with significant amount □ Applicable √Not applicable Disclosure by aging In RMB Aging Closing balance Within 1 year(Including 1 year) 3,277,275.23 189 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Within 1 year 3,277,275.23 1-2 years 1,045,544.39 2-3 years 897,839.00 Over 3 years 31,700,933.31 4-5 years 463,491.88 Over 5 years 31,237,441.43 Total 36,921,591.93 3) Accounts receivable withdraw, reversed or collected during the reporting period The withdrawal amount of the bad debt provision: In RMB Amount of change in the current period Category Opening balance Reversed or collected Closing balance Accrual amount Account receivable with single major amount and 30,844,110.43 30,844,110.43 withdrawal bad debt provision for single item Total 30,844,110.43 30,844,110.43 Of which the significant amount of the reversed or collected part during the reporting period :Nil 4)The actual write-off other accounts receivable: Nil 5) Top 5 of the closing balance of the other accounts receivable collected according to the arrears party In RMB Proportion of the total year end Closing Name Nature Closing balance Aging balance of the balance of bad accounts debt provision receivable(%) Securities trading Over 5 Kunlun Securities Co.,Ltd 30,844,110.43 83.54% 30,844,110.43 settlement funds years Guangdong Litong Real Deposit 1,505,864.00 2-3 years 4.08% Estates Investment Co., Ltd. Petty cash Petty cash 1,340,000.00 Within 1 3.63% 190 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 year Guangdong Expressway Entrustment 463,491.88 4-5 years 1.26% Co.,Ltd. management fee Beijing Shibang Weilishi Over 5 Property Management Service Deposit 393,331.00 1.07% years Co., Ltd. Guangzhou Branch Total -- 34,546,797.31 -- 93.57% 30,844,110.43 (6) Accounts receivable involved with government subsidies Nil (7) Other account receivable which terminate the recognition owning to the transfer of the financial assets Nil (8) The amount of the assets and liabilities formed by the transfer and the continues involvement of other accounts receivable Nil Other notes: 3. Long-term equity investment In RMB End of term Beginning of term Impairme Impairme Items Book Balance nt Book value Book Balance nt Book value provision provision Investment in 1,533,665,008.81 1,533,665,008.81 1,533,665,008.81 1,533,665,008.81 subsidiaries Investment in joint ventures 3,237,607,137.38 3,237,607,137.38 3,145,355,906.88 3,145,355,906.88 and associates Total 4,771,272,146.19 4,771,272,146.19 4,679,020,915.69 4,679,020,915.69 191 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (1)Investment to the subsidiary In RMB Withdrawn impairmen Closing Increa Decr t provision balance of Name Opening balance Closing balance se ease in the impairment reporting provision period Guangfo Expressway Co., ltd. 154,982,475.25 154,982,475.25 Guangdong Expressway Technology 95,731,882.42 95,731,882.42 Investment Co., Ltd. Guangzhou Guangzhu Traffic 859,345,204.26 859,345,204.26 Investment Management Co., Ltd. Jingzhu Expressway Guangzhu 419,105,446.88 419,105,446.88 Section Co., Ltd. Yuegao Capital Investment (Hengqin) 4,500,000.00 4,500,000.00 Co., Ltd. Total 1,533,665,008.81 1,533,665,008.81 192 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 (2)Investment to joint ventures and associated enterprises In RMB Increase /decrease in reporting period Withdraw O Closing Decre Adjustment Add Declaration of n t balance of Name Opening balance ased Gain/loss of of other Other equity Closing balance invest cash dividends impairme h impairmen invest Investment comprehensi changes ment or profit nt e t provision ment ve income provision r I. Joint ventures Guangdong Guanghui Expressway Co., 992,521,223.58 143,481,952.02 25,795,500.00 84,638,655.14 1,077,160,020.46 Ltd. ZhaoqingYuezhao Highway Co., Ltd. 307,172,338.10 27,819,228.16 53,207,865.41 281,783,700.85 Subtotal 1,299,693,561.68 171,301,180.18 25,795,500.00 137,846,520.55 1,358,943,721.31 II. Associated enterprises ShenzhenHuiyan Expressway Co., Ltd. 230,553,756.87 16,104,358.08 246,658,114.95 Guangdong Jiangzhong Expressway Co., 175,324,643.76 10,932,203.70 186,256,847.46 Ltd. Ganzhou Kangda Expressway Co., Ltd. 219,985,018.52 17,339,428.35 21,000,000.00 216,324,446.87 Ganzhou Gankang Expressway Co., Ltd. 209,995,910.71 4,937,249.59 214,933,160.30 Guangdong Yueke Technology Petty Loan 219,693,558.27 7,188,376.76 226,881,935.03 Co., Ltd. Guoyuan Securities Co.,Ltd. 790,109,457.07 9,910,201.43 -470,449.14 11,940,297.90 787,608,911.46 Subtotal 1,845,662,345.20 66,411,817.91 -470,449.14 32,940,297.90 1,878,663,416.07 Total 3,145,355,906.88 237,712,998.09 -470,449.14 25,795,500.00 170,786,818.45 3,237,607,137.38 193 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 4. Business income and Business cost In RMB Amount of current period Amount of previous period Items Revenue Cost Revenue Cost Main business 617,314,121.48 325,665,097.11 638,591,636.62 306,898,726.06 Other 5,812,395.87 3,525,577.41 37,302,631.12 3,411,961.26 Total 623,126,517.35 329,190,674.52 675,894,267.74 310,310,687.32 Whether implemented new revenue guidelines? □ Yes √ No Other notes: 5.Investment income In RMB Items Amount of current period Amount of previous period Long-term equity investment income accounted by 670,160,115.89 621,221,266.51 cost method Long-term equity investment income accounted by 237,712,998.09 216,777,157.34 equity method Dividend income from investments in other equity 38,528,868.23 instruments during the holding period Investment return on investments held to maturity 42,581,144.86 during the holding period Interest income from debt investment during 29,257,519.49 holding period. Total 975,659,501.70 880,579,568.71 XVIII. Supplementary Information 1.Current non-recurring gains/losses √ Applicable □Not applicable In RMB Items Amount Notes Gains/Losses on the disposal of non-current assets 10,537,743.77 Government grants recognized in the current period, except for those acquired in the ordinary course of business or granted at certain quotas or amounts according to the 420,227.62 country’s unified standards 194 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 Net amount of non-operating income and expense except the aforesaid items -904,697.67 Less: .Amount of influence of income tax -796,580.71 Amount of influence of minority interests -597,222.81 Total 11,447,077.24 -- 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 2. Return on equity (ROE) and earnings per share (EPS) Weighted EPS(Yuan/share) Profit as of reporting period average ROE EPS-basic EPS-diluted (%) Net profit attributable to common 7.53% 0.35 0.35 shareholders of the Company Net profit attributable to common shareholders of the Company after 7.41% 0.35 0.35 deduction of non-recurring profit and loss 3. Differences between accounting data under domestic and overseas accounting standards (1) Differences of net profit and net assets disclosed in financial reports prepared under international and Chinese accounting standards □ Applicable √Not applicable (2) Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards □ Applicable √Not applicable 195 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2019 XII. Documents Available for Inspection 1. Accounting statements carried with personal signatures and seals of legal representative, Chief Financial officer and Financial Principal. 2. Original of Auditors’ Report carried with the seal of Certified Public Accountants as well as personal signatures of certified Public accountants. 3. The texts of all the Company's documents publicly disclosed on the newspapers and periodicals designated by China Securities Regulatory Commission in the report period. 196