2019Annual Report

Guangdong Provincial Expressway Development Co. Ltd.2019 Annual Report

April 2020

2019Annual Report

I. Important Notice Table of Contents and Definitions

The Board of Directors and the directors Supervisory Committee and supervisors and Senior Executives of the

Company hereby warrant that at the year there are no misstatement misleading representation or important

omissions in this report and shall assume joint and several liability for the authenticity accuracy and completeness

of the contents hereof.Mr.Zheng Renfa The Company leader Mr. Wang Chunhua General Manager Mr. Fang Zhi Chief financial

officer and the Ms.Zhou Fang the person in charge of the accounting department (the person in charge of the

accounting )hereby confirm the authenticity and completeness of the financial report enclosed in this annual

report.

All the directors attended the board meeting for reviewing the Annual Report.

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 profit distribution proposal reviewed and approved by the boarding meeting was summarized as follows:

2090806126 for the base the Company would distribute cash dividend to all the shareholders at the rate of

CNY4.22 for every 10 shares (with tax inclusive) 0 bonus shares（ including tax）and no reserve would be

converted into share capital.

2019Annual Report

Table of Contents

I. Important Notice Table of contents and Definitions

II. Basic Information of the Company and Financial index

III. Outline of Company Business

IV. Discussion and Analysis of Operation

V. Important Events

VI. Change of share capital and shareholding of Principal Shareholders

VII. Situation of the Preferred Shares

VIII. Information about convertible corporate bonds

IX. Information about Directors Supervisors and Senior Executives

X. Administrative structure

XI. Corporate Bond

XII. Financial Report

XIII. Documents available for inspection

2019Annual Report

Definition

Terms to be defined Refers to Definition

Reporting period This year Refers to January 1 2019 to December 31 2019

Reporting date Refers to

The annual report of the company was approved by the board of

directors on 2019 that is April 3 2020

YOY Refers to Compared with 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

Expressway Technology

Refers to Guangdong Expressway Technology Investment Co. Ltd

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

South Section of Fokai Expressway

Refers to

Reconstruction and Expansion Project of Sanbao-Shuikou Section

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.Major assets restructuring Refers to

Guangdong Provincial Expressway Development Co.Ltd. issues

shares and uses cash to purchase assets and raise counterpart funds

and Related transaction

2019Annual Report

II. Basic Information of the Company and Financial index

1．Company Information

Stock abbreviation: Guangdong Expressway AB Stock code： 000429200429

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

Chinese Abbreviation 粤高速

English name (If any) Guangdong Provincial Expressway Development Co.Ltd.

English Abbreviation (If any) GPED

Legal Representative Zheng Renfa

Registered address 85 Baiyun Road Guangzhou Guangdong Province

Postal code of the Registered

Address

510100

Office Address

45-46/F Litong Plaza No.32 Zhujiang East Road Zhujiang New City Tianhe Disrtict

Guangzhou

Postal code of the office address 510623

Internet Web Site www.gpedcl.com

E-mail ygs@gdcg.cn

2. Contact person and contact manner

Board secretary Securities affairs Representative

Name Yang Hanming Liang Jirong

Contact address

46/F Litong Plaza No.32 Zhujiang East Road

Zhujiang New City Tianhe District Guangzhou

45/F Litong Plaza No.32 Zhujiang East Road

Zhujiang New City Tianhe District Guangzhou

Tel 020-29004619 020-29004523

Fax 020-38787002 020-38787002

E-mail Hmy69@126.com 139221590@qq.com

3. Information disclosure and placed

Newspapers selected by the Company for information disclosure

Securities Times China Securities Shanghai Securities

Daily and Hongkong Commercial Daily.

Internet website designated by CSRC for publishing the Annual

report of the Company

www.cninfo.com.cn

The place where the Annual report is prepared and placed Securities affair Dept of the Company

2019Annual Report

4.Changes in Registration

Organization Code 91440000190352102M

Changes in principal

business activities

since listing (if any)

No change

Changes is the

controlling

shareholder in the

past (is any)

On November 2000 In accordance with Cai Guan Zi (2008) No. 109 Document of Ministry of Finance

and Yue Ban Han (2000) No. 574 Document of General Office of Guangdong People's Government the

state-owned shares of Guangdong Expressway originally entrusted to Guangdong Expressway Company

(now renamed as "Guangdong Provincial Expressway Co. Ltd.") for management were transferred to

Guangdong Communication Group Co. Ltd. for holding and management. After the transfer of

state-owned shares Guangdong Communication Group Co. Ltd. became the largest shareholder of the

Company. The nature of equity was defined as state-owned shares.

5. Other Relevant Information

CPAs engaged

Name of the CPAs Ruihua Cerified Public Accountants(Special General Partnership)

Office address： 11F West Tower China Overseas Property Plaza Yongding Men Dongcheng District Beijing

Names of the Certified Public

Accountants as the signatories

Qin Yanlin Huang Zhiyan

The sponsor performing persistent supervision duties engaged by the Company in the reporting period.

□ Applicable√ Not applicable

The Financial advisor performing persistent supervision duties engaged by the Company in the reporting period

□ Applicable√ Not applicable

6.Summary of Accounting data and Financial index

Whether it has retroactive adjustment or re-statement on previous accounting data

□Yes √ No

2019 2018

Changed over

last year（％）

2017

Operating income（RMB） 3057935584.43 3218694083.94 -4.99% 3089055399.21

Net profit attributable to the shareholders

of the listed company（RMB）

1258628101.71 1677028179.18 -24.95% 1509922398.70

Net profit after deducting of non-recurring

gain/loss attributable to the shareholders of

listed company（RMB）

1249576930.75 1395441391.82 -10.45% 1271993450.05

Cash flow generated by business

operation net（RMB）

1988551897.83 1915985578.04 3.79% 2194989925.35

2019Annual Report

2019 2018

Changed over

last year（％）

2017

Basic earning per share(RMB/Share) 0.60 0.80 -25.00% 0.72

Diluted gains per

share(RMB/Share)(RMB/Share)

0.60 0.80 -25.00% 0.72

Weighted average ROE(%) 13.09% 18.37% -5.28% 17.69%

End of 2019

End of

2018

Changed over

last year（％）

End of 2017

Gross assets（RMB） 17674545340.78 16295910774.45 8.46% 16523315093.72

Net assets attributable to shareholders of

the listed company（RMB）

9823426849.75 9586701904.06 2.47% 9023071118.45

7.The differences between domestic and international accounting standards

1．Simultaneously pursuant to both Chinese accounting standards and international accounting standards disclosed

in the financial reports of differences in net income and net assets.

□ Applicable□√ Not applicable

Nil

2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese

accounting standards.

□ Applicable √Not applicable

Nil

8.Main Financial Index by Quarters

In RMB

First quarter Second quarter Third quarter Fourth quarter

Operating income 736437257.60 747235987.61 796831081.45 777431257.77

Net profit attributable to the

shareholders of the listed company

354064646.18 382421466.12 371244455.76 150897533.65

Net profit after deducting of

non-recurring gain/loss attributable

to the shareholders of listed

company

353871455.69 371167579.37 372502498.79 152035396.90

Net Cash flow generated by

business operation

518337607.13 532473490.10 583972506.76 353768293.84

Whether significant variances exist between the above financial index or the index with its sum and the financial

index of the quarterly report as well as semi-annual report index disclosed by the Company.□ Yes √No

2019Annual Report

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

√Applicable □Not applicable

In RMB

Items Amount (2019) Amount (2018) Amount (2017) Notes

Non-current asset disposal

gain/loss(including the write-off part for

which assets impairment provision is made)

7607268.21 63173138.25 -2745683.68

Govemment subsidies recognized in current

gain and loss(excluding those closely related

to the Company’s business and granted

under the state’s policies)

87937.00 1113228.32 385932.17

Net amount of non-operating income and

expense except the aforesaid items

-1393149.65 -1545368.05 61458075.96

Other non-recurring Gains/loss items 1652603.05

Less :Influenced amount of income tax 1130270.54 -230679518.30 -178668186.37

Influenced amount of minor shareholders’

equity (after tax)

-2226782.89 11833729.46 -162437.83

Total 9051170.96 281586787.36 237928948.65 --

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.

2019Annual Report

III. Business Profile

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

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 Expressway Co. Ltd.Ganzhou Kangda Ex

pressway Ganzhou Gankang Expressway Co. Ltd.Guangdong Yueke Technology Petty Loan Co. Ltd. Guangdong

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 the share-participation expressway is 263.41 km.Ⅱ.Major Changes in Main Assets

1. Major Changes in Main Assets

Main assets Major changes

Equity assets

An increased by 109.65 million yuan and 3.49% over the beginning of the year Mainly due to the

combined influence of the operation accumulation and profit distribution of the participating units.

Fixed assets

An increased by 1325.65 million yuan and 17.44% over the beginning of the year，It was mainly

influenced by the completion and opening of the expansion project of southern section of Fokai

Expressway and carry-forward of fixed assets. Fixed assets increased by 2.121 billion yuan while fixed

assets decreased by 787 million yuan due to increased depreciation of road property of Fokai

Expressway and Guangzhu East Company.

Intangible assets No significant change.

Construction in

process

A decreased by 860.37 million yuan and 78.97% over the beginning of the year， mainly due to the

completion and opening of the main line of the reconstruction and expansion project of southern section

of Fokai Expressway and the carry-forward of fixed assets.

Monetary funds

An increased by 693.4 million yuan and 32.641% over the beginning of the year，mainly due to

increased borrowing in fund-raising activities.Other eqiuty

instrument Investment

An increased by 167.03 million yuan and 10.01% over the beginning of the year，mainly due to the

increase in the company's share price of Everbright Bank and the increase in the value of other equity

instruments measured at fair value.

Deferred income tax

assets

A decreased by 61.99 million yuan and 13.85% over the beginning of the year，mainly due to that after

the absorption and merger of the original wholly-owned 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.

2019Annual Report

2. Main Conditions of Overseas Assets

□ Applicable √Not applicable

III. Analysis On core Competitiveness

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 Fokaiexpressway controlled by the company are part of the National Expressway Network Planning-“Five vertical andseven 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.

2019Annual Report

IV. Discussion andAnalysis of Operation

I. General

In 2019 the board of directors of the company actively implemented the resolutions of the shareholders' meeting

conscientiously performed its duties led the company's management team made solid progress in key work

continuously optimized the structure of the core main business achieved phased results and better completed

various tasks.

1. In 2019 the company's main road production was affected by the diversion of the surrounding road

network and ETC preferential policies. The company realized operating income of 3.058 billion yuan reaching

94.91% of the target of 3.222 billion yuan and operating cost at 1.356 billion yuan and completed the target value

of "controlled within 1.422 billion yuan."

2. It completed the task of canceling the construction of expressway provincial toll station. According to the

Ministry of Communications's plan to cancel the overall work of the provincial boundary stations of expressways

the company successfully completed the construction of ETC portal system ETC special lanes ETC mixed lanes

entrance overload control system and the construction and renovation of toll station level systems.

3. The reconstruction and expansion project for the southern section of Fokai Expressway was completed and

opened to traffic ahead of schedule. Under the scientific construction organization and schedule management the

entire reconstruction and expansion project in the southern section of Fokai Expressway was completed and

opened to traffic on November 7 2019 one and a half years ahead of the approved construction deadline marking

the successful completion of the first reconstruction and expansion project after the implementation of the

development planning outline for the Great Bay Area of Guangdong Hong Kong Macao and Taiwan. The

reconstruction and expansion project for the southern section of Fokai Expressway was successfully completed

and opened to traffic further optimizing and expanding the company's core business. The reconstruction and

expansion project of Shenzhen Huiyan Expressway invested by the company is also progressing steadily as

planned.

4. The land resources along the line are optimized and revitalized. The company insisted on the

comprehensive development of land resources along the line as the main direction and paid close attention to the

preliminary work of the project in 2019. The land resources along the Fokai Expressway including

ZhishanChenshan Xinjitian and Yanshan service areas have made phased progress in their revitalization.

5. The fee adjustment for the reconstruction and expansion project in the southern section of Fokai

Expressway was completed and the re-verification of the fee operation period was promoted. From zero o'clock

on November 8 2019 the southern section of Fokai Expressway implemented the adjusted charging standard

approved by the government; Meanwhile the company promptly organized materials to report to the relevant

government departments for re-approval of the operation period and strived to obtain the approval of the

provincial government for implementation as soon as possible.

6. The screening of high-quality project sources was strengthened. Firstly the company actively seized the

development opportunities and investment opportunities of the main business. The company’s investment team

was focusing on following up a number of expressway projects in and outside the province collecting analyzing

and calculating relevant data through a wide range of channels and accumulating experience for accurately

2019Annual Report

selecting expressway investment targets; Secondly it concentrated on mining the group's five major

industry-related projects actively reserved projects and carried out in-depth research and investigation on key

projects to lay the foundation for further promotion.II. Main business analysis

1. General

Volume of vehicle traffic in

2019（Ten thousands vehicles）

Increase

/Decrease(%)Toll income in 2019（Tenthousands）

Increase /Decrease(%

Guangfo Expressway 7596.92 15.60% 47134.57 -0.68%

Fokai Expressway 7668.46 1.72% 127661.44 -3.84%

Jingzhu Expressway

Guangzhu East Section

7330.12 -9.84% 118742.52 -9.65%

Huiyan Expressway 4234.94 2.42% 24667.08 0.56%

Guangzhao Expressway 3506.46 7.62% 55550.74 0.86%

Guanghui Expressway 7033.28 12.38% 191770.96 4.71%

Jiangzhong Expressway 6134.67 6.67% 45633.10 -4.82%

Kangda Expressway 324.21 7.20% 25677.24 7.05%

Gangkang Expressway 517.41 29.38% 18438.04 10.97%

Guangle Expressway 3039.42 13.20% 318505.70 2.74%

1. Guangfo Expressway: The increase in traffic volume is higher than the increase in toll revenue which is

mainly affected by the following factors: (1) From July 1 2018 traffic restrictions was imposed on trucks with a

capacity of more than 15 tons (7:00-22:00) towards Guangzhou (Yayao-Hengsha section) so as to guide trucks to

adjust the time period for running in Guangfo section; (2) Foshan First Ring Road completed high-speed

renovation and opened to traffic at the beginning of the year. Restriction on goods was cancelled and free passage

was allowed resulting in a decrease in the proportion of trucks traveling in Guangzhou-Foshan Expressway; (3)

From July 2019 a new preferential policy for Guangdong Pass Card was implemented (from a discount of 2% to a

discount of 5%) resulting in a drop in tolls. (4) Guangfo Area featured a intensive transportation of personnel and

materials complete supporting of surrounding buildings and continuous growth of cars flow.

2. Fokai Expressway: Toll revenue fell year on year mainly due to the following factors: (1) Foshan First

Ring Road completed high-speed renovation and opened to traffic at the beginning of the year; Restriction on

goods was cancelled and free passage was allowed which diverted some traffic; (2) From July 2019 a new

preferential policy for Guangdong Pass Card was implemented (from a discount of 2% to a discount of 5%)

resulting in a drop in tolls. (3) After the opening of Yuzhan Expressway Phase II the diversion effect appeared.

3. Guangzhu Section of Jingzhu Expressway: Main reasons for decrease of traffic flow and toll revenue year

on year: (1) Nansha Bridge and Dongguan-Panyu Expressway Phase II completed and opened to traffic resulting

in divergence of vehicles. (2) From August 2019 Humen Bridge was closed to trucks and buses with more than 40

seats for 24 hours resuting in diversion effect on trucks and buses. (3) From July 2019 a new preferential policy

for Guangdong Pass Card was implemented (from a discount of 2% to a discount of 5%) resulting in a drop in

tolls.

4. Huiyan Expressway: The continuous increase in traffic volume of small passenger cars strict enforcement

2019Annual Report

of truck overload control and the change of original overloaded vehicles to multi-vehicle transportation offset the

adverse impact on road traffic during the construction of reconstruction and expansion project of

Huizhou-Shenzhen Expressway and toll revenue was even.

5. Guanghui Expressway: The growth of traffic volume and toll revenue is mainly due to the natural growth

of traffic volume on the road section and the additional traffic volume brought about by the opening of

Fenghuangshan Tunnel on the adjacent road section.

6. Guangle Expressway: It was the main reason for the year-on-year growth in traffic volume and toll

revenue. Toll revenue in the first half of 2019 was basically the same as that of last year. The newly opened

Renhua-Shenzhen Expressway diverted some car traffic volume during the Spring Festival but it had little impact

after the Spring Festival; Toll revenue increased slightly in the second half of the year. The larger increase in toll

revenue in November was mainly due to the return of vehicles diverted from airport high-speed construction to

Jingzhou South Expressway in the same period last year; The relatively large increase in toll revenue in December

was due to the early start of the spring festival transportation in 2020 and the relatively large demand for freight

logistics and the relatively large increase in truck toll revenue at the end of the year under the marketing stimulus

of major e-commerce companies; In the second half of the year toll revenue increased slightly year on year driven

by toll revenue growth.

7. Gankang Expressway: The year-on-year increase in traffic volume and toll revenue was mainly due to the

combined effects of multiple factors such as drainage of fruit and vegetable markets in East China City poor

condition of national roads and over-regulation of national roads restriction on the passage of some trucks and

backflow of vehicles.

8. Kangda Expressway: The main reasons for the increase in traffic volume and toll revenue were: (1) Traffic

volume on Nankang-Dayu Expressway increased due to traffic restrictions in Nankang region and the construction

of Qinglong and Xincheng sections of National Highway 323. (2) Traffic volume on road sections kept growing

naturally and the logistics industry was steadily improving which stimulated the growth of freight vehicles. (3)

The opening of the Wuhan-Shenzhen Expressway and Shantou-Kunming Expressway in Guangdong has

narrowed the distance between Ganzhou and Shenzhen Dongguan and the eastern part of Guangzhou attracting a

large number of small buses for the kangda Expressway.

2. Revenue and cost

(1)Component of Business Income

In RMB

2019 2018

Increase /decrease

Amount Proportion Amount Proportion

Total operating

revenue

3057935584.43 100% 3218694083.94 100% -4.99%

Industry

Highway

transportations

2935385249.67 95.99% 3116441804.18 96.82% -5.81%

Other 122550334.76 4.01% 102252279.76 3.18% 19.85%

Product

2019Annual Report

2019 2018

Increase /decrease

Amount Proportion Amount Proportion

Highway

transportations

2935385249.67 95.99% 3116441804.18 96.82% -5.81%

Other 122550334.76 4.01% 102252279.76 3.18% 19.85%

Area

Guangfo

Expressway

471345653.88 15.41% 474591734.35 14.74% -0.68%

Fokai Expressway 1276614430.61 41.75% 1327567186.19 41.25% -3.84%

Jingzhu

Expressway

Guangzhu Section

1187425165.18 38.83% 1314282883.64 40.83% -9.65%

Other 122550334.76 4.01% 102252279.76 3.18% 19.85%

(2)Situation of Industry Product and District Occupying the Company’s Business Income and Operating

Profit with Profit over 10%

√ Applicable □Not applicable

In RMB

Under circumstances of adjustment in reporting period for statistic scope of main business data adjusted main

Turnover Operation cost

Gross

profit

rate(%)

Increase/decrea

se of revenue in

the same period

of the previous

year(%)

Increase/decrea

se of business

cost over the

same period of

previous year

(%)

Increase/decrea

se of gross

profit rate over

the same period

of the previous

year (%)

Industry

Highway

transportations

2935385249.67 1258716527.73 57.12% -5.81% 4.69% -4.30%

Product

Highway

transportations

2935385249.67 1258716527.73 57.12% -5.81% 4.69% -4.30%

Area

Guangfo

Expressway

471345653.88 113805926.37 75.86% -0.68% 11.34% -2.60%

Fokai Expressway 1276614430.61 779246352.00 38.96% -3.84% 10.69% -8.01%

Jingzhu

Expressway

Guangzhu Section

1187425165.18 365664249.36 69.21% -9.65% -7.69% -0.65%

2019Annual Report

business based on latest on year’s scope of period-end.

□ Applicable √Not applicable

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

□ Yes √ No

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

□ Applicable √Not applicable

(5)Component of business cost

Industry category

In RMB

Industry

category Items

2019 2018

Increase/

Decrease (%)Amount

Proportion in

the operating

costs (%)

Amount

Proportion in

the operating

costs (%)

Highway

transportations

Depreciation

andAmortized

827637925.95 61.02% 795052567.72 62.16% 4.10%

Highway

transportations

Out of pocket

expenses

431078601.78 31.78% 407293840.94 31.84% 5.84%

Other Other 97696326.04 7.20% 76748662.66 6.00% 27.29%

Note

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

□ Yes √ No

(7)Relevant Situation of Significant Changes or Adjustment of the Business Product or Service in the

Company’s Report Period

□ Applicable √Not applicable

(8)Situation of Main Customers and Main Supplier

□ Applicable √Not applicable

3.Expenses

In RMB

2019 2018

Increase/

Decrease(%)

Notes

Administrative expenses 192182962.68 183392148.68 4.79%

Financial expenses 213705131.87 212592783.74 0.52%

2019Annual Report

R & d expenses 1318344.01 -100.00%

In 2018 Yuegaoke incurred research

and development costs for the "Blue

Channel" project but not in 2019.

4. Research and Development

√ Applicable □Not applicable

No R & D projects in 2019 .R & D investment

2019 2018 Increase /decrease

Number of Research and Development persons (persons) 0 17 -100.00%

Proportion of Research and Development persons 0.00% 0.77% -0.77%

Amount of Research and Development Investment (In RMB) 0.00 1318344.01 -100.00%

Proportion of Research and Development Investment of Operation Revenue 0.00% 0.04% -0.04%

Amount of Research and Development Investment Capitalization (In RMB) 0.00 0.00 0.00%

Proportion of Capitalization Research and Development Investment of

Research and Development Investment

0.00% 0.00% 0.00%

The Reason of the Prominent Change in Total Amount of Research and Development Input Occupying the

Business Income Year on Year

□ Applicable √Not applicable

Explanation of the Reason for Substantial Changes in the Research and Development Input’s Capitalization Rate

and Its Reasonableness

□ Applicable √ Not applicable

5.Cash Flow

In RMB

Items 2019 2018

Increase/

Decrease(%)

Subtotal of cash inflow received from operation activities 3169520869.81 3384347808.21 -6.35%

Subtotal of cash outflow received from operation activities 1180968971.98 1468362230.17 -19.57%

Net cash flow arising from operating activities 1988551897.83 1915985578.04 3.79%

Subtotal of cash inflow received from investing activities 440203871.09 642611742.49 -31.50%

Subtotal of cash outflow for investment activities 823074417.73 845371278.92 -2.64%

Net cash flow arising from investment activities -382870546.64 -202759536.43 88.83%

Subtotal cash inflow received from financing activities 3756700000.00 1385000000.00 171.24%

Subtotal cash outflow for financing activities 4667450932.28 3335697061.08 39.92%

Net cash flow arising from financing activities -910750932.28 -1950697061.08 -53.31%

Net increase in cash and cash equivalents 693395898.18 -239738904.10 -389.23%

2019Annual Report

Notes to the year-on-year change of the relevant data

√Applicable □ Not applicable

1. Cash inflow from investment activities was 440 million yuan of which 420 million yuan was received as cash

dividends from equity investments and 20 million yuan was received from the disposal of intellectual property

rights related to "Blue Channel"; The year-on-year decrease of 202 million yuan was mainly due to the disposal of

the Zhuhai section of Guangzhou-Macao Expressway by 227 million yuan in the same period last year.

2. Cash inflow from fund-raising activities was 3.757 billion yuan which was loans obtained; The year-on-year

increase of 2.372 billion yuan was due to increased borrowing.

3. Cash outflow from fund-raising activities amounted to 4.667 billion yuan of which 3.017 billion yuan was paid

for debt 1.649 billion yuan was paid for dividends and interest; The year-on-year increase of 1.332 billion yuan w

Reasons of major difference between the cash flow of operation activity in report period and net profit of the

Company

□ Applicable √ Not applicable

III.Analysis of Non-core Business

√ Applicable □Not applicable

In RMB

Amount

Proportion

in total

profit

Explanation of cause Sustainable (yes or no)

Investment

Income

508416135.27 28.43%

It is due to the operation accumulation of

participant companies

Sustainable

Asset impairment -7238195.84 -0.40%

Fokai Expressway Branch accrued impairment

reserve for fixed assets

Not sustainable

Non-operating

income

2965674.12 0.17%

Mainly the compensation income of road

property

Not sustainable

Non-operating

expenses

15783456.02 0.88%

Mainly non-current asset disposal losses and

road property repair expenses

Not sustainable

Assets disposal

earnings

19031900.46 1.06%

The subsidiary Yuegaoke disposed the

intellectual property rights related to "Blue

Channel" and confirmed the income from asset

disposal

Not sustainable

2019 Annual Report

IV. Condition of Asset and Liabilities

1.Condition of Asset Causing Significant Change

In RMB

End of 2019 End of 2018

Proportion

increase/decrease

Notes to the significant change

Amount

Proportion in the

total assets(%)

Amount

Proportion in the

total assets(%)

Monetary fund 2817920894.50 15.94% 2124524996.32 13.04% 2.90%

It was mainly due to increased borrowing in investment

activities.

Accounts receivable 125343724.66 0.71% 91076995.07 0.56% 0.15% It was mainly due to the increase in tolls to be split.

Inventories 111683.22 0.00% 81017.91 0.00% 0.00%

Investment real estate 3331500.37 0.02% 3579007.54 0.02% 0.00%

Long-term equity

investment

3255739898.36 18.42% 3146092065.25 19.31% -0.89%

Fixed assets 8925700473.65 50.50% 7600046319.91 46.64% 3.86%

It was mainly due to the completion and opening of the

main line of the reconstruction and expansion project

from the southern section of the Fokai Expressway and

the carry-forward of fixed assets.

Construction in

process

229098299.48 1.30% 1089473425.63 6.69% -5.39%

It was mainly due to the completion and opening of the

main line of the reconstruction and expansion project

from the southern section of the Fokai Expressway and

the carry-forward of fixed assets.Long-term loans 4640425000.00 26.25% 2983040000.00 18.30% 7.95% Borrowing increased in the current period.

2019 Annual Report

2.Asset and Liabilities Measured by Fair Value

√Applicable □ Not applicable

In RMB

Items Opening amount

Gain/Loss on

fair value

change in the

reporting period

Cumulative fair

value change

recorded into

equity

Impairment

provisions

in the

reporting

period

Purchased

amount in the

reporting

period

Sold amount

in the

reporting

period

Other

changes

Closing amount

Financial assets

4.Other equity instrument

investment

1668791594.53 519913426.24 1835822604.77

Subtotal of financial assets 1668791594.53 519913426.24 1835822604.77

Total of the above 1668791594.53 519913426.24 1835822604.77

Financial liabilities 0.00 0.00

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 1221200.00 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.V. Investment situation

1. General

√ Applicable □ Not applicable

Investment Amount in 2019(Yuan) Investment Amount in 2018(Yuan) Change rate

1140508126.36 824811091.23 38.28%

2019 Annual Report

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

√Applicable □Not applicable

In RMB

Name of

the

Company

Invested

Main

Business

Investment

Way

Investment

Amount

Share

Proportion

%

Capital

Source

Partner

Investment

Horizon

Product

Type

Progress up

to Balance

Sheet Date

Anticipated

Income

Gain or

Less or the

Current

Investment

Whether

to Involve

in Lawsuit

Date of

Disclosure

Disclosure Index

Shenzhen

Huiyan

Express

way

Co.

Ltd.

Express

way

Increase

capital

56717650.00 33.33%

Huiyan Co.Ltd.Unallocated

profit

conversion

Capital

Yantian

Port Co.ltd.On the basis

of the term

of operation

approved by

the

government

Limited

Company

Completed 0.00 0.00 No

October

312017

Announcement of

Resolutions of the

13th (Provisional)

Meeting of the

Eighth Board of

Directors

Announcement of

External Investment

Total -- -- 56717650.00 -- -- -- -- -- -- 0.00 0.00 -- -- --

2019 Annual Report

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

√ Applicable □Not applicable

In RMB

Name

Form of

investme

nt

Fixed

assets

investmen

t or not

Industry in

which the

investment

project

operates

Investment

amount during the

reporting period

Accumulated

actual amount

invested as of the

end of reporting

period

Source of

und

Progress

Estimated

return

Accumulated

realized return

as of the end of

the end of the

reporting period

Reasons for failure

in meeting

scheduled progress

and estimated

return

Date of

Disclosure(If

any)Disclosure index（Ifany）

Fokai

Expressway

southern

section

Extension

project

Self Yes Expressway 1083790476.36 2582255320.52

Self and

Borrowing

75.37% 0.00 0.00 Not applicable June 172016

Announcement of

the 19th

(Provisional)

Meeting of the

Seventh Board of

Directors

Announcement of

External Investment

Total -- -- -- 1083790476.36 2582255320.52 -- -- 0.00 0.00 -- -- --

2019 Annual Report

4.Investment of Financial Asset

（1）Securities investment

√ Applicable □ Not applicable

In RMB

Security

category

Security

code

Stock

Abbreviati

on:

Initial

investment cost

Mode of

accounting

measurement

Book value

balance at the

beginning of

the reporting

period

Changes in

fair value

of the this

period

Cumulative fair

value changes in

equity

Purchase

amount

in the

this

period

Sale

amount

in the

this

period

Gain/loss of

the reporting

period

Book value

balance at the end

of the reporting

period

Accountin

g items

Sauce of

the

shares

Domestic and

foreign stocks

601818

Everbright

Bank

517560876.80 FVM 870443292.80 0.00 519913426.24 0.00 0.00 37876045.98 1037474303.04

Other

equity

instrument

investment

Self

Total 517560876.80 -- 870443292.80 0.00 519913426.24 0.00 0.00 37876045.98 1037474303.04 -- --

Disclosure Date of Announcement on

Securities Investment Approved by the

Board of Directors

July 222009

Disclosure Date of Announcement on

Securities Investment Approved by the

Shareholders Meeting(If any)

August 72009

2019Annual Report

（2）Investment in Derivatives

□ Applicable √ Not applicable

The Company had no investment in derivatives in the reporting period.

5.Application of the raised capital

□ Applicable √ Not applicable

The Company had no application of the raised capital in the reporting period.VI. Sales of major assets and equity

1. Sales of major assets

□ Applicable √ Not applicable

The Company had no sales of major assets in the reporting period.

2.Sales of major equity

□ Applicable √ Not applicable

2019 Annual Report

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

Company Name

Company

type

Leading products and services Registered capital Total assets Net assets Operating Income Operating profit Net Profit

Guangfo

Expressway

Subsidiary

Operating Guangfo Expressway Co.Ltd.(starts from Hengsha Guangzhou

ends in Xiebian Foshan. Total length 15.7

kilometers

RMB 200 million 608138986.47 551120287.05 475502565.03 334196250.90 250762288.30

Jingzhu Expressway

Guangzhu Section

Co. Ltd.

Subsidiary

The operation and management of

Guangzhu Expressway and provision of

supporting services including fueling

salvage and supply of parts and

components

RMB 580 million 2558550808.94 1157559905.51 1218734018.60 715153192.22 513065829.93

Guangdong

Guanghui

Expressway Co.

Ltd.Sharing

company

Investment in and construction of

Guanghui Expressway Co. Ltd. and

supporting facilities the toll collection

and maintenance management of

Guanghui Expressway The Guanghui

Expressway's supporting gas station

salvation vehicle maintenance vehicle

transport catering warehousing

investment and development

RMB 2.352 million 4228022472.12 3494911911.72 1943745753.48 1333700987.33 1002651683.59

Guangzhu Traffic

Investment

Management Co.Ltd.Subsidiary

Highway investment management and

consultation; highway maintenance

RMB 3 million 2563460714.81 641567853.91 1218734018.60 715103887.59 282136901.83

2019 Annual Report

Subsidiaries obtained or disposed in the reporting period

□ Applicable √ Not applicable

Particulars about the Mutual holding companies

1.Guangfo Expressway Co. Ltd. a subsidiary of the company the company owns 75% of Guangfo Expressway's equity. It builds and operates Guangzhou-Foshan

Expressway. Its management includes road maintenance toll collection signs marking and other transportation facilities maintenance vehicle rescue and other

business. The net profit of the current period decreased by 14.1911 million yuan 5.36% decrease compared with the same period last year. The main reasons for the

decrease are: the diversion of surrounding roads and the implementation of new preferential policies of Yuetong card since July 2019 (from 2% discount to5%

discount)

2.Beijing-Zhuhai Expressway Guangzhu Section Co. Ltd. a subsidiary of the company the company owns 75% of Guangzhu Section's equity directly and indirectly.

It operates Guangzhou-Zhuhai Expressway and provides the service of refueling rescuing and spare parts supplying with the expressway. The net profit of this period

decreased by 127.2247 million yuan 19.87% decrease compared with the same period last year mainly due to the diversion of surrounding roads; from August 2019

Humen Bridge will be banned from trucks and more than 40 passenger cars for 24 hours which will affect the diversion of trucks and buses.; the implementation of

new preferential policies of Yuetong card since July 2019 (from 2% discount to5% discount)

3.Guangdong Guanghui Expressway Co. Ltd. is a joint-stock company of the company. The company holds 30% of Guanghui Expressway's equity invests in and

builds Guanghui Expressway and its supporting facilities; charges and maintenance management of Guanghui Expressway; invests and develops gas stations rescues

automobile maintenance automobile transportation catering and warehousing for Guanghui Expressway. Net profit for the period increased by RMB 36361600 or

3.47% increase compared with the same period last year mainly due to the natural increase in traffic flow on road sections and the increase in toll income due to

the increase in traffic flow caused by the opening of the Phoenix Mountain Tunnel on adjacent road sections.

2019Annual Report

VIII. Special purpose vehicle controlled by the Company

□ Applicable √ Not applicable

IX. Prospect for future development of the Company

In order to better serve the New Coronavirus Pneumonia epidemic promote the resumption of production

and production of enterprises and ensure the sustainable and healthy development of the economy. With the

consent of the State Council the Ministry of Transport issued the Notice of the Ministry of Transport on Toll Free

Highway Vehicle Tolls During the New Crown Epidemic Prevention and Control Period (hereinafter referred to as

the "Notice") on February 15 2020. According to the requirements of the Notice from 00: 00 on February 17

2020 until the end of the epidemic prevention and control all expressways controlled and shared by the company

will be free of vehicle tolls for all vehicles that pass through these sections according to law and the specific

deadline will be notified separately. Suspension of vehicle tolls is expected to adversely affect the company's

short-term operating results. As of the disclosure date of this report the time for resuming the collection of vehicle

tolls has not yet been determined and the company has not been able to estimate the specific impact on the

company's operating performance in 2020 nor is it able to set an operating target for the whole year.The company will actively respond and do its best to mitigate the adverse impact of the epidemic on the

company. On the basis of strict epidemic prevention and control and ensuring smooth traffic flow the company

strictly controlled the cost and actively strived for reasonable policy support. In fact the company has done the

following work well to make sufficient preparations for restarting the charging business and accelerating the

development after the epidemic prevention and control work is completed.

1. Stabilize and expand the main business of expressway. It continued to push forward the phase inspection

of Southern Section of Fokai Expressway Project and strive to get the approval of the government as soon as

possible; Assisted in accelerating the reconstruction and expansion of Huiyan Expressway; Through various

channels such as property rights trading platforms and other intermediary organizations inside and outside the

province it widely collected the information on expressway projects inside and outside the system steadily

promoted investment and merger of expressway quality projects integrated resources for participating in

expressway projects optimized asset structure and made efforts to increase the number of expressway projects

controlled.

2. Accelerate the development of stock resources along the expressway. To build innovative service areas . It

fully promoted the implementation of the pilot project of the innovative service area in Zhushan; Continued to

revitalize the plots of land in Chenshan Xinjitian Nanzhuang and Hengsha to obtain incremental benefits through

land transfer development and construction and investment promotion.

3.Explore and study the layout of intelligent transportation industry. In order to better grasp the opportunity

of intelligent transportation development accelerate the research on the development planning of the company's

intelligent transportation industry and expand the company's intelligent transportation business and market.

4. It strived to give full play to the platform advantages of listed companie. It paid close attention to the

development trend of the domestic capital market actively research in the planning of the company's capital

operation plan gave full play to the role of investment and financing platform.

5. It broadened financing channels and optimized financial management. It continued to maintain close ties

with banks securities dealers and other financial institutions strived for favorable financing conditions and low

financing costs and ensured all aspects of the company's capital needs during the special period of epidemic

prevention and control.

2019Annual Report

6. It accelerated the implementation of optimization plans for market-based incentives and assessment

mechanisms focused on the decomposition of high-quality development assessment indicators and formed a

quantitative assessment indicator system to ensure the smooth implementation of salary assessment optimization

plans.X. List of the received researches visits and interviews

1.Particulars about researches visits and interviews received in this reporting period

√ Applicable □Not applicable

Reception time

Way of

reception

Types of

visitors

Basic index

January 92019

Onsite

investigation

Organization

1. The main content of research:1. the daily operation; 2. the company's

financial data analysis;3. development strategy; 4. analysis on the industry.

2.Primary data investigation: Public information company regularly reports

January 162019

Onsite

investigation

Organization

1. The main content of research:1. the daily operation; 2. the company's

financial data analysis;3. development strategy; 4. analysis on the industry.

2.Primary data investigation: Public information company regularly reports

March 292019 By Phone Organization

1. The main content of research:1. the daily operation; 2. the company's

financial data analysis;3. development strategy; 4. analysis on the industry.

2.Primary data investigation: Public information company regularly reports

May 82019 By Phone Organization

1. The main content of research:1. the daily operation; 2. the company's

financial data analysis;3. development strategy; 4. analysis on the industry.

2.Primary data investigation: Public information company regularly reports

July 92019

Onsite

investigation

Organization

1. The main content of research:1. the daily operation; 2. the company's

financial data analysis;3. development strategy; 4. analysis on the industry.

2.Primary data investigation: Public information company regularly reports

August 302019 By Phone Organization

1. The main content of research:1. the daily operation; 2. the company's

financial data analysis;3. development strategy; 4. analysis on the industry.

2.Primary data investigation: Public information company regularly reports

November

52019

By Phone Organization

1. The main content of research:1. the daily operation; 2. the company's

financial data analysis;3. development strategy; 4. analysis on the industry.

2.Primary data investigation: Public information company regularly reports

Reception times 7

Reception agency amount 66

Reception personal number 0

Others 0

Whether to disclose reveal or disclose non-public

material information

No

2019Annual Report

V. Important Events

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

Formulation implementation and adjustment of profit distribution policy of common shares especially cash

dividend policy during the reporting period

□Applicable√ Not applicable

The profit distribution preplan or proposal and the Plan(preplan) or proposal of conversion of the capital reserve

into share capital in the past three years(with the reporting period inclusive:

1.The Company's profit distribution plan for 2017 is as follows:

(1).10% of the net profit of the company i.e. 177864580.14 yuan is to be allocated for statutory common

reserve fund.

(2).The profit for 2017 is to be distributed as follows:1057947899.76 yuan. is to be allocated as the fund for

dividend distribution for 2017. with the total shares at the end of 2017 i.e. 2090806126 shares as the base cash

dividend of 5.06 yuan (including tax) is to be distributed for every 10 shares .The remaining undistributed profits

are to be carried forward to the next year. The foreign exchange translation of the cash dividends for shareholders

holding B share and overseas corporate shares will be determined according to HKD:RMB bank’s Middle rate

quoted by People’s Bank of China on the first working day after 2017 annual shareholders’ general meeting

makes resolution on dividend distribution.

2. The Company's profit distribution plan for 2018 is as follows:

(1) 10% of the net profit of the company i.e. 230581431.32 yuan is to be allocated for statutory common

reserve fund.

(2) The profit for 2018 is to be distributed as follows:1175033042.81 yuan. is to be allocated as the fund for

dividend distribution for 2018. with the total shares at the end of 2018 i.e. 2090806126 shares as the base cash

dividend of 5.62 yuan (including tax) is to be distributed for every 10 shares .The remaining undistributed profits

are to be carried forward to the next year. The foreign exchange translation of the cash dividends for shareholders

holding B share and overseas corporate shares will be determined according to HKD:RMB bank’s Middle rate

quoted by People’s Bank of China on the first working day after 2018 annual shareholders’ general meeting

makes resolution on dividend distribution.

3. The Company's profit distribution preplan for 2019 is as follows:

(1) 10% of the net profit of the company i.e. 135022507.55 yuan is to be allocated for statutory common

reserve fund.

(2) The profit for 2019 is to be distributed as follows: 882320185.17 yuan. is to be allocated as the fund for

dividend distribution for 2018. with the total shares at the end of 2019 i.e. 2090806126 shares as the base cash

dividend of 4.22 yuan (including tax) is to be distributed for every 10 shares .The remaining undistributed profits

are to be carried forward to the next year. The foreign exchange translation of the cash dividends for shareholders

holding B share and overseas corporate shares will be determined according to HKD:RMB bank’s Middle rate

quoted by People’s Bank of China on the first working day after 2019 annual shareholders’ general meeting makes

2019Annual Report

resolution on dividend distribution.

Dividend distribution of the latest three years

In RMB

Year

for

bonus

shares

Amount for cash

bonus(tax

included)

Net profit

attributable to

common stock

shareholders of

listed company in

consolidation

statement for

bonus year

Ratio of the

cash bonus in

net profit

attributable

to common

stock

shareholders

of listed

company

contained in

consolidation

statement

Proportio

n for cash

bonus by

other

ways(i.e.share

buy-backs

)

Ratio of the

cash bonus

by other

ways in net

profit

attributable

to common

stock

shareholders

of listed

company

contained in

consolidation

statement

Total cash

bonus(other

ways

included)

Ratio of the

total cash

bonus (other

ways

included) in

net profit

attributable

to common

stock

shareholders

of listed

company

contained in

consolidation

statement

2019 882320185.17 1258628101.71 70.10% 0.00 0.00% 882320185.17 70.10%

2018 1175033042.81 1677028179.18 70.07% 0.00 0.00% 1175033042.81 70.07%

2017 1057947899.76 1509922398.70 70.07% 0.00 0.00% 1057947899.76 70.07%

In the reporting period both the Company’s profit and the parent company’s retained earnings were positive

however not cash dividend distribution proposal has been put forward.

□Applicable √ Not applicable

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

√ Applicable □ Not applicable

Bonus shares for every ten shares(Shares) 0

Cash dividend for every ten shares (Yuan)(Tax-included) 4.22

Distribute additional (shares)for 10 shares 0

A total number of shares as the distribution basis(shares) 2090806126

Cash dividend amount (yuan including tax 882320185.17

Other means (such as repurchase of shares) cash dividend amount (yuan) 0.00

Total cash dividend (yuan including tax) 882320185.17

Distributable profit (yuan) 3710584722.68

Proportion of cash dividend in the distributable profit 100%

Cash dividend distribution policy

The Company is in a fast growth stage there fore the cash dividend will reach 80% of the profit distribution at least. Cash

dividend distribution policy.

2019Annual Report

Details of profit distribution or reserve capitalization Preplan

1.10% of the net profit of the company i.e. 135022507.55 yuan is to be allocated for statutory common reserve fund.

2.The profit for 2019 is to be distributed as follows: 882320185.17 yuan. is to be allocated as the fund for dividend distribution

for 2018. with the total shares at the end of 2019 i.e. 2090806126 shares as the base cash dividend of 4.22 yuan (including

tax) is to be distributed for every 10 shares .The remaining undistributed profits are to be carried forward to the next year. The

foreign exchange translation of the cash dividends for shareholders holding B share and overseas corporate shares will be

determined according to HKD:RMB bank’s Middle rate quoted by People’s Bank of China on the first working day after 2019

annual shareholders’ general meeting makes resolution on dividend distribution.

2019 Annual Report

III. Commitments to fulfill the situation

1.The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the reporting period made by the company

shareholder actual controller acquirer director supervisor senior management personnel and other related parities.

√Applicable □Not applicable

Commitment

Commitment

maker

Type

Contents

Time of

making

commitm

ent

Period of

commitment

Fulfillment

Commitment on share reform

Commitment in the acquisition

report or the report on equity

changes

Commitment made upon the

assets replacement

Guangfa

Securities

Co. Ltd.

Tibet

Yingyue

Investment

Management

Co. Ltd.

Yadong

Fuxing

Yalian

Investment

Co. Ltd.

Share

limited

commitment

Guangdong Expressway A shares acquired by the Company through subscription in this major asset reorganization cannot be transferred or

listed for transaction within thirty-six months from the date of the completion of the shares issuance in this major asset reorganization. Upon

the expiry of the lock-up period the transfer and transaction of these shares will be made in accordance with the effective laws and

regulations and relevant provisions of CSRS and Shenzhen Stock Exchange (SSE).June

182015

The date of the

expiration of the

share lock.

Completed

2019 Annual Report

Commitment

Commitment

maker

Type

Contents

Time of

making

commitm

ent

Period of

commitment

Fulfillment

Guangdong

Expressway

Co. Ltd.

Guangdong

Highway

Construction

Co. Ltd.

Guangdong

Communicati

on Group

Co. Ltd.

Share

limited

commitment

Guangdong Expressway A shares acquired by the Company through subscription in this major asset reorganization cannot be transferred or

listed for transaction within thirty-six months from the date of the completion of the shares issuance in this major asset reorganization. Upon

the expiry of the lock-up period the transfer and transaction of these shares will be made in accordance with the effective laws and

regulations and relevant provisions of CSRS and Shenzhen Stock Exchange (SSE). Upon the completion of this major asset reorganization

if the closing price of the A-share of Guangdong Expressway is below the issue price for 20 consecutive trading days within six months or at

the end of six months after the completion of the transaction the closing price is below the issue price the lock-up period of the A-share of

Guangdong Expressway acquired by the Company through this major asset reorganization will be automatically extended for six months.June

262015

The date of the

expiration of the

share lock.

Completed

2019 Annual Report

Commitment

Commitment

maker

Type

Contents

Time of

making

commitm

ent

Period of

commitment

Fulfillment

Guangdong

Expressway

Co. Ltd.

Guangdong

Highway

Construction

Co. Ltd.

Guangdong

Communicati

on Group

Co. Ltd.

Commitmen

ts on

horizontal

competition

related

transaction

and capital

occupation

The commitment to avoid horizontal competition: 1. the Company and the companies that are under direct or indirect control of the

Company except Guangdong Expressway and its subsidiaries will not use the controlling shareholders to damage the legitimate interests of

the business activities of Guangdong Expressway and its medium and small shareholders and its subsidiaries. 2. The Company and the

companies that are under direct or indirect control of the Company except Guangdong Expressway and its subsidiaries will not use the

information acquired from Guangdong Expressway and its subsidiaries to engage in core business which competes with Guangdong

Expressway and its subsidiaries and will not conduct any activity that damages or may damage the legitimate interests of Guangdong

Expressway and its medium and small shareholders and its subsidiaries. 3. As for the transfer of toll roads bridges tunnels and related

ancillary facilities or equity invested constructed or managed by the Company or companies that are under direct or indirect control of the

Company except Guangdong Expressway and its subsidiaries to the Company or any company that is under direct or indirect control of the

company unless it is a transferee expressly designated by the relevant government departments to the extent permitted by relevant laws and

regulations Guangdong Expressway has the right of preemption under the same conditions. 4. In the future if the Company and the

companies that are under direct or indirect control of the Company except Guangdong Expressway and its subsidiaries invest and construct

a parallel highway or a highway in the same direction on either side of the Highway within 20 km to the extent permitted by relevant laws

and regulations except in the project whose investors have been expressly specified by the relevant government departments Guangdong

Expressway has the priority right to invest ahead of the Company and the companies that are under direct or indirect control of the Company

except Guangdong Expressway and its subsidiaries. This commitment when signed constitutes the irrevocable legal obligations of the

Company. If the circumstances arise that cause damage to Guangdong Expressway because of the Company’s breach of the commitment the

Company will bear the corresponding liability according to laws. The commitment to reduce and regulate the connected transactions: 1.

After the completion of this major asset reorganization the Company and the companies that are under direct or indirect control of the

Company except Guangdong Expressway and its subsidiaries and other related parties will try to avoid the connected transaction with

Guangdong Expressway and its subsidiaries; the necessary and unavoidable connected transactions shall be conducted in accordance with the

principles of fairness and compensation of equal value the transaction prices shall be determined according to the reasonable market price

the transaction approval procedures and the disclosure obligations should be conducted in accordance with relevant laws regulations and

regulatory documents to effectively protect the interests of medium and small hareholders of Guangdong Expressway . 2. The Company

guarantees to be in strict accordance with relevant laws and regulations the regulations and regulatory documents promulgated by CSRC the

June

262015

This commitment is

valid from the date of

signing this letter of

commitment to the

date on which the

shares of Company is

no longer controlled

by the controlling

shareholder of the

Guangdong

Expressway.

Fulfill the

commitmen

t normally

2019 Annual Report

Commitment

Commitment

maker

Type

Contents

Time of

making

commitm

ent

Period of

commitment

Fulfillment

Guangdong

Communicati

on Group

Co. Ltd.

Other

commitment

(1) The commitment to the authenticity accuracy and completeness of the information provided: 1. The Company guarantees to provide the

information related to the major asset reorganization for Guangdong Expressway and ensures its authenticity accuracy and completeness; if

there is false misleading statement or major omission in the information provided which causes losses to Guangdong Expressway or the

investors the Company will assume the compensation liabilities in accordance with laws. If it is suspected that there is false misleading

statement or major omission in the information disclosed or provided for the major asset reorganization and it is investigated by the

judiciary authorities or by CSRC before the clear conclusion of the case is reached the Company will suspend the transfer of shares of

Guangdong Expressway held by the Company and within two business days upon receipt of the notice of filing a case and inspection the

written application for suspending the transfer and the stock account should be submitted to the Board of Directors of Guangdong

Expressway and the Board of Directors of Guangdong Expressway shall on behalf of the Company apply for the lockout towards

Shenzhen Securities Exchange (SSE) and Registration and Clearing Company; if the application for the lockout is not submitted in two

business days after verification the Board of Directors authorized by the Company will directly submits the Company’s identity and

account information to the Registration and Clearing Company and apply for the lockout; if the Board of Directors fails to do so the

Securities Exchange and the Registration and Clearing Company will be authorized to directly lock the related shares. If it is found that the

Company has illegal circumstances the company promises that the lockout shares should be automatically used for the compensation for

the relevant investors. (2) The commitment to maintain the independence of the listed company. The Company and the companies that are

under direct or indirect control of the Company except Guangdong Expressway and its holding subsidiaries have increased their shares of

Guangdong Expressway after the completion of the major asset reorganization; however they will not damage the independence of

Guangdong Expressway . They will continue to be separated from Guangdong Expressway in assets personnel finance organization and

business and strictly abide by the relevant provisions on the independence of listed companies of CSRC. They don’t illegally use

Guangdong Expressway to provide guarantee or occupy its capital so as to keep and maintain its independence and safeguard the

legitimate rights and interests of other shareholders of Guangdong Expressway . All losses will be borne by the Company if it breaks the

above commitments and causes losses to Guangdong Expressway .June

182015

(1) a promise without

a commitment period.

(2) the date of the

validity of the term

commitment from the

date of this letter of

commitment to the

date of the company

no longer is the date

of the controlling

shareholder of

Guangdong.

Fulfill the

commitmen

t normally

2019 Annual Report

Commitment

Commitment

maker

Type

Contents

Time of

making

commitm

ent

Period of

commitment

Fulfillment

Guangdong

Highway

Construction

Co.

Ltd.Guangdo

ng

Expressway

Co. Ltd.

Other

commitment

(1) The commitment to the authenticity accuracy and completeness of the information provided: The Company guarantees that there is no false

misleading statement or major omission in the information disclosure and application documents for the major asset reorganization. If it is

suspected that there is false misleading statement or major omission in the information disclosed or provided for the major asset reorganization

and it is investigated by the judiciary authorities or by CSRC before the clear conclusion of the case is reached the Company will suspend the

transfer of shares of Guangdong Expressway held by the Company and within two business days upon receipt of the notice of filing a case and

inspection the written application for suspending the transfer and the stock account should be submitted to the Board of Directors of Guangdong

Expressway and the Board of Directors of Guangdong Expressway shall on behalf of the Company apply for the lockout towards Shenzhen

Securities Exchange (SSE) and Registration and Clearing Company; if the application for the lockout is not submitted within two business days

after verification the Board of Directors authorized by the Company will directly submits the Company’s identity and account information to the

Registration and Clearing Company and apply for the lockout; if the Board of Directors fails to do so the Securities Exchange and the

Registration and Clearing Company will be authorized to directly lock the related shares. If it is found that the Company has illegal circumstances

the Company promises that the lockout shares should be automatically used for the compensation for the relevant investors. (2) The commitment

to maintain the independence of the listed company. The Company and the companies that are under direct or indirect control of the Company

except Guangdong Expressway and its subsidiaries have increased their shares of Guangdong Expressway after the completion of the major asset

reorganization; however they will not damage the independence of Guangdong Expressway. They will continue to be separated from Guangdong

Expressway in assets personnel finance organization and business and strictly abide by the relevant provisions on the independence of listed

companies of CSRC. They will not illegally use Guangdong Expressway to provide guarantee or occupy its capital and they will keep and

maintain the its independence and safeguard the legitimate rights and interests of other shareholders of it. (3)The company confirmed and

guaranteed: 1 the company set up and effectively exist in accordance with the law of the enterprise the company has an independent legal

personality independent of the ability to assume legal responsibility. 2 as the commitment letter issued by the Japanese the company does not

exist in the listed company acquisition management approach "the provisions of Article 6 of the acquisition of a listed company may not be under

any of the following circumstances: (1) bears a relatively large amount of debt due and outstanding and in persistent state; (2) in recent 3 years

have major violations or suspected of major violations; (3) in recent 3 years have severe stock market acts of dishonesty; (4) the laws

administrative regulations and recognized by the CSRC shall not purchase of Listed Companies in other circumstances. This commitment is

issued to the completion of the reorganization before if the company does not conform to the fact that these commitments the company that will

June

262015

(1) a promise without

a commitment period.

(2) the date of the

validity of the term

commitment from the

date of this letter of

commitment to the

date of the company

no longer is the date

of the controlling

shareholder of

Guangdong.

(3) the date of the

validity of the term

commitment to the

completion of the

completion of

the completion of the

major asset

restructuring.

Fulfill the

commitmen

t normally

2019 Annual Report

Commitment

Commitment

maker

Type

Contents

Time of

making

commitm

ent

Period of

commitment

Fulfillment

Guangdong

Communicati

on Group

Co. Ltd.

Other

commitment

In order to promote the smooth progress of the issue of shares the cash purchase of assets and the raising of matching funds (hereinafter

referred to as "the major asset restructuring") approved by Guangdong Expressway Development Co. Ltd. at its second extraordinary

shareholders' meeting in 2015 with regard to all the land and real estate (hereinafter referred to as "relevant land and real estate") owned by

Guangdong Fokai Expressway Co. Ltd. (hereinafter referred to as "Fokai Company") and Jingzhu Expressway Guangzhu Section Co. Ltd.(hereinafter referred to as "Guangzhu East Company") without ownership certificates (hereinafter referred to as "relevant land and real

estate") disclosed in the report of Guangdong Expressway Development Co. Ltd. on issuing shares and paying cash to purchase assets and

raising matching funds and related transactions the company undertook to urge Fokai Company and Guangzhu East Company to go through

the ownership registration formalities according to the following plan under the condition that it is conducive to safeguarding the rights and

interests of listed companies; Continued to push forward the progress of accreditation and completed the registration procedures of relevant

land and real estate ownership within three years after the relevant policies were clear and the relevant land and real estate met the conditions

for handling the registration procedures of ownership in accordance with the relevant laws and regulations and the requirements of the

competent government departments.

April

272019

It continued to push

forward the progress

of accreditation and

completed the

registration

procedures of

relevant land and real

estate ownership

within three years

after the relevant

policies were clear

and the relevant land

and real estate met

the conditions for

handling the

registration

procedures of

ownership in

accordance with the

relevant laws and

regulations and the

requirements of the

competent overnment

departments.

Fulfill the

commitmen

t normally

2019 Annual Report

Commitment

Commitment

maker

Type

Contents

Time of

making

commitm

ent

Period of

commitment

Fulfillment

Commitments made upon first

issuance or refinance

Equity incentive commitment

Other commitments made to

minority shareholders

Completed on time(Y/N) Yes

2019Annual Report

2.The existence of the company's assets or projects earnings forecasts and earnings reporting period is still

in the forecast period the company has assets or projects meet the original profit forecast made and the

reasons explained

□Applicable √Not applicable

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

□ Applicable √ Not applicable

Nil

V. Explanation of the Supervisory Committee and Independent Directors (If applicable)on the Qualified

Auditor’s Report Issued by the CPAs.

VI. Explain change of the accounting policy accounting estimate and measurement methods as compared

with the financial reporting of last year.

√Applicable □ Not applicable

The Ministry of Finance issued the "New Financial Instrument Guidelines" in 2017 requiring domestic listed

enterprises to implement the new financial instrument guidelines from January 1 2019. Through the resolution of

the 25th (provisional) meeting of the eighth board of directors of the Company on April 26 2019 the Group

began to implement the aforementioned new financial instrument guidelines on January 1 2019. The Group

retroactively applied the new financial instrument standard. For the cumulative impact of the first implementation

of the standard the Group adjusted the amount of retained earnings or other comprehensive income at the

beginning of 2019 and other related items in the financial statements. The 2018 financial statements were not

restated.

In April and September 2019 the Ministry of Finance respectively issued the Notice on Revising and Issuing

the Format of General Enterprise Financial Statements for 2019 (CK [2019] No.6) and the Notice on Revising and

Issuing the Format of Consolidated Financial Statements (2019 Edition) (CK [2019] No.16) revising the format

of general enterprise financial statements and consolidated financial statements. The Group has prepared financial

statements in accordance with the format of general enterprise financial statements and consolidated financial

statements according to its requirements.VII.Explain retrospective restatement due to correction of significant accounting errors in the reporting

period

□Applicable √ Not applicable

Nil

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

□Applicable √ Not applicable

2019Annual Report

Nil

IX. Engagement/Disengagement of CPAs

CPAs currently engaged

Name of the domestic CPAs

Ruihua Certified Public Accountants (Special General

Partnership)

Remuneration for domestic accounting firm (Ten thousands yuan) 120

Successive years of the domestic CPAs offering auditing services 1

Name of domestic CPA Qin Yanlin Huang Zhiyan

Continuous fixed number of year for the auditing service

provided by CPA in domestic CPA Firms

Has the CPAs been changed in the current period

√ Yes □ No

Whether to change the employment of accounting firm during the audit period

□ Yes √No

Whether to perform the examination and approval procedures for change of accounting firm

√ Yes □ No

A detailed explanation of the change of employment and accounting firm

In order to better meet the needs of the company's future business development after comprehensive

evaluation the company plans to employ Ruihua Certified Public Accountants (Special General Partnership) as

the company's 2019 audit institution to be responsible for the audit of the company's financial report.The 27th meeting of the 8th Board of Directors held on June 6 2019 deliberated and passed the Proposal on

Hiring Audit Institution for Financial Report in 2019 agreeing that the Company would hire Ruihua Certified

Public Accountants (Special General Partnership) as the audit institution for the Company's financial report in

2019. It is estimated that the audit fee for the annual financial report will be controlled within 1.2 million yuan.

On June 25 2019 the company's first extraordinary shareholders' meeting in 2019 deliberated and passed the

Proposal on Hiring Audit Institution for Financial Report in 2019.

Description of the CPAs financial adviser or sponsor engaged for internal control auditing

√ Applicable □ Not applicable

On June 6 2019 the 27th meeting of the 8th board of directors reviewed and passed the proposal on hiring

the internal control audit institution in 2019 and agreed to hire Ruihua Certified Public Accountants (special

general partnership) as the audit institution of the company's internal control in 2019. It is estimated that the audit

cost of the annual financial report shall be controlled within 1.2 million yuan. On June 25 2019 the company's

first extraordinary general meeting of shareholders deliberated and passed the proposal on hiring an internal

control audit institution in 2019.X. Situation of Facing Listing Suspension and Listing Termination after the Disclosure of the Yearly

Report

□Applicable √ Not applicable

2019Annual Report

XI. Relevant Matters of Bankruptcy Reorganization

□Applicable √ Not applicable

Nil

XII. Matters of Important Lawsuit and Arbitration

□Applicable √ Not applicable

Nil

XIII. Situation of Punishment and Rectification

□Applicable √ Not applicable

Nil

XIV. Credit Condition of the Company and its Controlling Shareholders and Actual Controllers

□Applicable √ Not applicable

XV. Implementation Situation of Stock Incentive Plan of the Company Employee Stock Ownership Plan or

Other Employee Incentive Measures

□Applicable √ Not applicable

Nil

XVI. Material related transactions

1. Related transactions in connection with daily operation

□Applicable √ Not applicable

Nil

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

□Applicable √ Not applicable

Nil

3. Related-party transitions with joint investments

□Applicable √ Not applicable

Nil

4. Credits and liabilities with related parties

□Applicable √ Not applicable

Nil

2019Annual Report

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 19881200.00 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 .

3. The 28th (provisional) meeting of the Eighth Board of Directors deliberated and passed the Proposal on

Renewal of Entrusted Loan from Guangdong Guanghui Expressway Co. Ltd. It agreed that the company should

renew the entrusted loan from Guangdong Guanghui Expressway Co. Ltd. with a total loan amount of 180

million yuan which would be withdrawn according to the actual needs of the company for a period of 1 year

with an interest rate reduced by 10% according to the benchmark lending rate of the People's Bank of China for

the same period and which would be used to supplement the working capital. After the expiration of the entrusted

loan it could be renewed according to the original conditions.The website to disclose the interim announcements on significant related-party transactions

Description of provisional announcement

Date of disclosing provisional

announcement

Description of the website for disclosing

provisional announcements

Announcement of related party transaction January 232019 www.cninfo.com.cn

Estimates announcement of the Daily

Related Party Transaction of 2019

March 292019 www.cninfo.com.cn

Announcement of related party transaction August 29.2019 www.cninfo.com.cn

XVII. Particulars about significant contracts and their fulfillment

1. Particulars about trusteeship contract and lease

(1) Trusteeship

□Applicable √ Not applicable

Nil

(2) Contract

□ Applicable √ Not applicable

Nil

(3) Lease

□Applicable √ Not applicable

Nil

2019Annual Report

2.Guarantees

√ Applicable □Not applicable

（1）Guarantees

Guarantee of the Company for the controlling subsidiaries (Exclude controlled subsidiaries)

Name of the

Company

Relevant

disclosure

date/No. of

the

guaranteed

amount

Amount of

Guarantee

Date of

happening

(Date of

signing

agreement)

Actual

mount of

guarantee

Guarantee

type

Guarantee

term

Complete

implemen

tation or

not

Guarantee

for

associated

parties (Yes

or no)

Guangdong

Communication

Group Co.Ltd

May 112012 172500 May 312013 172500 Pledge

2012.9.25-

2020.3.25

No Yes

Total of external guarantee

approved at Period-end(A3)

172500

Total balance of actual

external guarantee at

Period-end(A4)

172500

Guarantee of the Company for the controlling subsidiaries

Name of the

Company

guaranteed

Relevant disclosure

date/No. of the

guaranteed amount

Amount

of

guarantee

Date of

happening(Date of

signing agreement)

Actual

mount of

guarantee

Guara

ntee

type

Guarantee

term

Comple

te

implem

entation

or not

Guaran

tee for

associa

ted

parties

(Yes or

no)

Guarantee of the subsidiaries for the controlling subsidiaries

Name of the

Company

guaranteed

Relevant disclosure

date/No. of the

guaranteed amount

Amount

of

guarantee

Date of

happening(Date of

signingagreement)

Actual

mount

of

guaran

tee

Guaranteet

ype

Guarantee

term

Comple

te

implem

entatio

n or not

Guaran

tee for

associat

ed

parties

(Yes or

no)

Total of Company’s guarantee（namely total of the large three aforementioned）

Total of guarantee at Period-end

（A3+B3+C3）

172500

Total of actual guarantee at

Period-end

（A4+B4+C4）

172500

The proportion of the total amount of actually guarantee in the net assets of the

Company(that is A4+B4+C4)

17.56%

Including

2019Annual Report

Note

（2）Illegal external guarantee

□ Applicable √ Not applicable

Nil

3.Situation of Entrusting Others for Managing Spot Asset

(1)Situation of Entrusted Finance

□ Applicable √ Not applicable

Nil

(2)Situation of Entrusted Loans

□ Applicable √ Not applicable

Nil

4. Other significant contract

□ Applicable √ Not applicable

Nil

XVIII. Social responsibility

1. Execution of social responsibility of targeted poverty alleviation

In 2019 the expressway toll-free policy for small-sized passenger cars with less than 7 seats for main

holidays intermittent free-charge release and green-channel preferential policy were still executed Guangfo

company Fokai company and Guangzhudong company have completed each safety and smooth traffic task

successfully based on the thorough understanding complete personnel dispatching duties performance and

measures implementation.

1. Several measures are implemented synchronously to provide drivers and the public with the smooth

convenient comfortable and safe driving environment and build the harmonious relationship between vehicles

and roads jointly. The company is located in Guangfo and Fokai sections among Pearl River Delta developed zone

in which the traffic flow is large and the charging squares and lanes resources are limited due to the limitation of

the previous infrastructure construction scale. Then with the influence of the north-ring expressway as well as

Gonghe-Siqian bottleneck-type section the congestion and slow traffic become normal. The traffic flow peak in

holidays lasts long with strong directionality and plenty of emergencies and therefore the vehicle free toll in

Amount of guarantee for shareholders actual controller and its associated

parties（D）

172500

Total guarantee Amount of the abovementioned guarantees（D+E+F） 172500

2019Annual Report

holidays catches high social attention. Each toll-station lanes are reconstructed with the whole-weighing-platform

weighing equipment which results in the larger pressure of the smooth traffic guarantee by stations. In light of

such condition the company motivated through organization the section companies to perfect and detail the

smooth traffic guarantee working schemes continuously summarize previous experience conduct emergency

exercises and make the production line exercise various smooth-traffic measures skillfully on one hand; on the

other hand strengthen the service consciousness and conduct the business and civilized service trainings. Through

efforts of all parties the section for the company is free from artificial vehicle congestion and mass incidents for

the whole year with the complaints limited to zero through which the safety and reliability of the expressway

traffic environment were guaranteed.

2. Respond positively to the governmental policies provide preferential deduction and exemption policies

per laws and reduce the cost of enterprise transportation and the masses travel.

3. It earnestly implemented the government's tasks and completed the transformation and switching of ETC

toll collection system at provincial toll stations on time.

4. The South Section Reconstruction and Extension Project of Fokai Expressway opened to traffic. On

November 7 2019 the reconstruction and expansion project of the southern section of Fokai Expressway opened

to traffic. The project officially started construction on May 7 2017. Under the condition of opening to traffic

while construction is in progress the reconstruction and expansion management office of the southern section of

Fokai Expressway overcame all difficulties and completed the project about one and a half years ahead of the

approved construction period (four years) with remarkable results setting a both fast and good benchmark for the

expansion project in the province. The opening of the project has realized the two-way and 8-lane operation of the

entire Fokai Expressway reduced the transportation time cost and economic cost eased the traffic pressure to the

west of Guangdong further promoted the function of Fokai Expressway as a major transportation artery between

the west of Guangdong and the core area of the Pearl River Delta promoted the economic development of the

areas along the line provided strong support for the construction of the Great Bay Area of Guangdong Hong

Kong and Macao and better met the people's demand for a better life brought by transportation.

2.Overview of the targeted poverty alleviation

The company has no precise social responsibility for poverty alleviation in the period and bas no follow-up plan

either.

3.Major environmental protection

The Listed Company and its subsidiary whether belongs to the key sewage units released from environmental

protection department

No

XIX. Explanation on other significant events

□ Applicable √Not applicable

Nil

2019Annual Report

XX. Significant event of subsidiary of the Company

√ 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 19881200.00 as the transfer price.The website to disclose the interim announcements

Description of provisional announcement

Date of disclosing

provisional announcement

Description of the website for

disclosing provisional

announcements

Announcement of Resolutions of the 23th (Provisional) Meeting of

the Eighth Board of Directors

January 232019 www.cninfo.com.cn

Announcement of related party transaction January 232019 www.cninfo.com.cn

2019Annual Report

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

Proportio

n

Share

allotme

nt

Bonus

shares

Capitaliz

ation of

common

reserve

fund

Other Subtotal Quantity Proportion

1.Shares with

conditional

subscription

1273271627 60.90% -833886969 -833886969 439384658 21.02%

1.State-owned shares 410002853 19.61% 29912 29912 410032765 19.61%

2.State-owned legal

person shares

652971967 31.23% -631259229 -631259229 21712738 1.04%

3.Other domestic

shares

210293994 10.06% -202654839 -202654839 7639155 0.37%

Including ：

Domestic Legal

person shares

209498275 10.02% -202469920 -202469920 7028355 0.34%

Domestic natural

person shares

795719 0.04% -184919 -184919 610800 0.03%

4.Foreign shares 2813 0.00% -2813 -2813 0 0.00%

Including：Foreign

legal person shares

0 0.00% 0 0 0 0.00%

Foreign natural

person shares

2813 0.00% -2813 -2813 0 0.00%

II.Shares with

unconditional

subscription

817534499 39.10% 833886969 833886969 1651421468 78.98%

1.Common shares in

RMB

468885824 22.43% 833886969 833886969 1302772793 62.31%

2.Foreign shares in

domestic market

348648675 16.67% 0 0 348648675 16.68%

3.Foreign shares in

foreign market

0 0.00% 0 0 0 0.00%

2019Annual Report

4.Other 0 0.00% 0 0 0 0.00%

III. Total of capital

shares

2090806126 100.00% 0 0 2090806126 100.00%

Reasons for share changed

√ Applicable □Not applicable

1.During the report period 65 shareholders reimbursed 29912 shares of Guangdong Provincial

Communication Group Company Limited which were converted from 29534 shares of "shareholding of

domestic natural person" and 378 shares of "shareholding of overseas natural person" to "national shareholding".

2.During the reporting period 631259229 shares were "held by state-owned legal persons" 202429149

shares were "held by domestic legal persons" 190381 shares were "held by domestic natural persons" and 2435

shares were "held by overseas natural persons" and changed to "unlimited conditional shares".

3. During the report period5775 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

2. Change of shares with limited sales condition

√ Applicable □Not applicable

2019Annual Report

In shares

Shareholder

Name

Initial

Restricted

Shares

Number of

Unrestricted

Shares This

Term

Number of

Increased

Restricted Shares

This Term

Restricted

Shares in the

End of the Term

Reason for

Restricted Shares

Date of

Restriction

Removal

Guangdong

Communication

Group Co. Ltd.

410002853 29912 410032765

The shares for

restricted sales by

share reform has

not yet be subject

to the procedures

for lifting the

restriction.Unknown

Zhang Xiuling

and other 65

shareholders

222728 192816 0

Release of

restrictions on

sales

April

262019

Total 410225581 29912 192816 410032765 -- --

II. Securities issue and listing

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

□ Applicable √ Not applicable

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

□ Applicable √ Not applicable

3.About the existing employees’ shares

□Applicable √Not applicable

2019Annual Report

III. Shareholders and actual controlling shareholder

1. Number of shareholders and shareholding

In Shares

Total number of

common

shareholders at the end

of the reporting period

53746 Total shareholders at the

end of the month from the

date of disclosing the

annual report

54195 The total number of pre

ferred shareholders voti

ng rights restored at per

iod-end (if any)(Note 8)

0 Total preference shareholders

with voting rights recovered at

end of last month before annual

report disclosed(if any)(Note8)

0

Particulars about shares held above 5% by shareholders or top ten shareholders

Shareholders Nature of

shareholder

Proporti

on of

shares

held（%）

Number of

shares held

at period

-end

Changes

in

reporting

period

Amount of

restricted

shares held

Amount of

un-restricted

shares held

Number of share

pledged/frozen

State of

share

Amount

Guangdong Communication

Group Co.Ltd

State-owned

legal person

24.56% 513412507 29912 410032765 103379742

Guangdong Highway

Construction Co. Ltd

State-owned

legal person

22.30% 466325020 466325020

Yadong Fuxing Yalian Investment

Co. Ltd.

Domestic

non

State-owned

Legal person

9.68% 202429149 202429149

Tibet Yingyue Investment

Management Co. Ltd.State-owned

legal person

4.84% 101214574 101214574

Guangdong Expressway Co. Ltd. State-owned

legal person

2.53% 52937491 19582228 33355263

China Life Insurance Co. Ltd.－

Dividend －Personal dividend

-005L-FH002 Shen

Other 1.66% 34775553 34775553

China Life Insurance Co. Ltd.－

Traditional－Common insurance

products-005L-CT001Shen

Other 1.50% 31312620 31312620

Guangfa Securities Co. Ltd. State-owned

legal person

1.45% 30364372 30364372

Orient Securities Co. Ltd. State-owned

legal person

1.05% 21915393 21915393

Feng Wuchu Domestic

natural

person shares

0.79% 16464447 16464447

Strategic investor or general legal person

becoming top-10 ordinary shareholder due to

rights issue (if any)

None

Related or acting-in-concert parties among

shareholders above

Guangdong Communication Group Co. Ltd. is the parent company of Guangdong Highway

Construction Co. Ltd. and Guangdong Expressway Co. Ltd. It is unknown whether there

is relationship between other shareholders and whether they are persons taking concerted

action specified in the Regulations on Disclosure of Information about Change in

Shareholding of Shareholders of Listed Companies.

2019Annual Report

Shareholding of top 10 shareholders of unrestricted shares

Name of the shareholder Quantity of unrestricted shares held

at the end of the reporting period

Share type

Share type Quantity

Guangdong Highway Construction Co. Ltd 466325020 RMB Common shares

Yadong Fuxing Yalian Investment Co. Ltd. 202429149 RMB Common shares

Guangdong Communication Group Co.Ltd 103379742 RMB Common shares

Tibet Yingyue Investment Management Co. Ltd. 101214574 RMB Common shares

China Life Insurance Co. Ltd.－Dividend －

Personal dividend -005L-FH002 Shen

34775553 RMB Common shares

Guangdong Expressway Co. Ltd. 33355263 RMB Common shares

China Life Insurance Co. Ltd.－Traditional－

Common insurance products-005L-CT001Shen

31312620 RMB Common shares

Guangfa Securities Co. Ltd. 30364372 RMB Common shares

Orient Securities Co. Ltd. 21915393 RMB Common shares

Feng Wuchu 16464447 RMB Common shares 14363984

Foreign shares placed in

domestic exchange

2100463

Explanation on associated relationship or consistent

action among the top 10 shareholders of

non-restricted negotiable shares and that between

the top 10 shareholders of non-restricted negotiable

shares and top 10 shareholders

Guangdong Communication Group Co. Ltd. is the parent company of Guangdong

Highway Construction Co. Ltd. and Guangdong Expressway Co. Ltd. It is unknown

whether there is relationship between other shareholders and whether they are persons

taking concerted action specified in the Regulations on Disclosure of Information about

Change in Shareholding of Shareholders of Listed Companies.

Top 10 ordinary shareholders conducting securities

margin trading (if any) (see note 4)

Nil

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.

2019Annual Report

2.Controlling shareholder

Nature of Controlling Shareholders: Local state holding

Type of Controlling Shareholders: Legal person

Changes of controlling shareholder in reporting period

□ Applicable √ Not applicable

No changes of controlling shareholder for the Company in reporting period.

3．Information about the controlling shareholder of the Company

Actual controller nature：Local state owned assets management

Actual controller type：Legal person

Name of the

Controlling

shareholder

Legal

representative/

Leader

Date of

incorporation

Organization code Principal business activities

Guangdong

Communication

Group Co. Ltd.

Deng Xiaohua June 232000 91440000723838552J

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; Value

added telecommunication services.

Equity in other

domestic and

foreign listed

companies held by

the controlling

shareholder by

means of control

and mutual

shareholding in

the reporting

period

Guangdong Communication Group Co. Ltd. holds 74.12% equity of Guangdong Nanyue Logistics Co. Ltd. a

company listing H shares.

2019Annual Report

Name of the actual controller

Legal

representative

/Leader

Date of

incorpor

ation

Organization code Principal business activities

State-owned Assets

supervision and

administration Commission

of Guangdong Provincial

People’s Government

Li Cheng

June

262004

114400007583361658

As an ad hoc body directly under the

Guangdong Provincial People's

Government commissioned by the

provincial government to fulfill the

State-owned asset investor regulatory

enterprises to implement the rights

obligations and responsibilities pipe

asset control and people management.

Equity of other

domestic/foreign listed

company with share

controlling and share

participation by

controlling shareholder in

reporting period

As an ad hoc body directly under the Guangdong Provincial People's Government

commissioned by the provincial government to fulfill the State-owned asset investor regulatory

enterprises to implement the rights obligations and responsibilities pipe asset control and

people management.

Changes of controlling shareholder in reporting period

□ Applicable √ Not applicable

No changes of controlling shareholder for the Company in reporting period

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

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

□Applicable √Not applicable

2019Annual Report

4.Particulars about other legal person shareholders with over 10% shareheld

√ Applicable □Not applicable

Legal person

shareholder

Legal

person/pers

on in charge

of the unit

Date of

foundation

Register capital

Main operation business or management

activities

Guangdong Highway

Construction Co. Ltd.

Wang

Kangchen

April

161987

8827.36846696

million yuan

Highway bridge tunnel bridge traffic

infrastructure construction investment and

management technical consulting leasing of

road construction machinery; sales of

construction materials construction machinery

equipment; vehicle rescue services

(operated by the branch).(for projects subject to approval according to

law business activities can only be carried out

with the approval of relevant departments.)

5.Situation of Share Limitation Reduction of Controlling Shareholders Actual Controllers Restructuring Party

and Other Commitment Subjects

□Applicable √Not applicable

2019Annual Report

VII. Situation of the Preferred Shares

□Applicable √Not applicable

The Company had no preferred shares in the reporting period.

2019Annual Report

VIII Information about convertible corporate bonds

□ Applicable √Not applicable

During the reporting period the company did not have convertible corporate bonds.

2019Annual Report

IX. Information about Directors Supervisors and Senior Executives

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

Name Positions

Office

status

Sex Age

Starting

date of

tenure

Expiry

date of

tenure

Shares

held at the

year-begin(

share)

Amount of

shares

increased at the

reporting

period(share)

Amount of

shares

decreased at the

reporting

period(share)

Other

changes

increase/

decrease

Shares

held at the

year-begin(

share)

Zheng

Renfa

Board

Chairman

In

office

Male 50

January

42017

September

202022

Wang

Chun

hua

Director

General

Manager

In

office

Male 55

October

192015

September

202022

135100 135100

Wang

Ping

Director

Chief

Engineer

In

office

Fema

le

55

April

212014

January

82020

3500 3500

Fang

Zhi

Director

CFO

In

office

Male 56

December

312015

September

202022

Chen

Min

Director

In

office

Male 56

July

192017

September

202022

Zeng

Zhijun

Director

In

office

Male 49

December

42017

September

202022

Du Jun Director

In

office

Male 54

July

212016

September

202022

Zhuo

Wei

heng

Director

In

office

Male 48

December

42017

September

202022

Cao

Yu

Director

In

office

Male 34

July

212016

September

202022

150000 150000

Huang

Hai

Director

In

office

Male 44

July

212016

September

202022

Gu Nai

kang

Independe

nt director

In

office

Male 54

July

212016

September

202022

Bao

Fang

zhou

Independe

nt director

In

office

Male 41

July

212016

September

202022

2019Annual Report

Name Positions

Office

status

Sex Age

Starting

date of

tenure

Expiry

date of

tenure

Shares

held at the

year-begin(

share)

Amount of

shares

increased at the

reporting

period(share)

Amount of

shares

decreased at the

reporting

period(share)

Other

changes

increase/

decrease

Shares

held at the

year-begin(

share)

Zhang

Hua

Independe

nt director

In

office

Male 54

December

42017

September

202022

Liu

Zhong

hua

Independe

nt director

In

office

Male 54

December

42017

September

202022

Zeng

Xiao

qing

Independe

nt director

In

office

Fema

le

50

May

202019

September

202022

Jiang

Chang

wen

Chairman

of the

Supervisor

y

Committee

In

office

Male 52

May

202019

September

202022

Li Hai

hong

Supervisor

In

office

Fema

le

48

July

212016

September

202022

Ke Lin Supervisor

In

office

Fema

le

50

Septembe

r 152017

September

202022

Feng

Yuan

Supervisor

In

office

Male 55

Septembe

r 92019

September

202022

Zhou

Yisan

Supervisor

In

office

Male 39

Septembe

r 92019

September

202022

Zuo

Jiang

Deputy

General

Manager

In

office

Fema

le

47

October

192015

September

202022

Cheng

Rui

Deputy

General

Manager

In

office

Male 45

August

282017

September

202022

He

Bing

legal

counsel

In

office

Fema

le

52

July

232012

September

202022

Yang

Han

ming

Secretary

to the

Board

In

office

Male 50

August

282017

September

202022

Xiao

Duan

Independe

nt director

Dimis

sion

Fema

le

61

April

162013

May

202019

2019Annual Report

Name Positions

Office

status

Sex Age

Starting

date of

tenure

Expiry

date of

tenure

Shares

held at the

year-begin(

share)

Amount of

shares

increased at the

reporting

period(share)

Amount of

shares

decreased at the

reporting

period(share)

Other

changes

increase/

decrease

Shares

held at the

year-begin(

share)

Ling

Ping

Chairman

of the

Supervisor

y

Committee

Dimis

sion

Fema

le

56

March

232015

April

262019

Cao

Xiaoyi

ng

Supervisor

Dimis

sion

Fema

le

51

July

212016

September

82019

Yang

Tiansh

u

Supervisor

Dimis

sion

Male 37

March

302018

September

82019

Total -- -- -- -- -- -- 288600 0 0 0 288600

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

√ Applicable □Not applicable

Name Positions Types Date Reason

Xiao Duan Independent director The term of office expires. May 192019 The term of office expires.Ling Ping

Chairman of the

Supervisory Committee

Dimission April 82019 Retired

Cao Xiaoying Supervisor Dimission September 82019 Job change

Yang Tianshu Supervisor Dimission September 82019 Job change

III.Posts holding

Work Experience in the past five years of Directors supervisors and senior Executives in Current office

Mr. Zheng Renfa，He served as Chairman Master DegreeSenior economic engineer.Since December 2005，He served as Deputy Minister of Investment Management Department of Guangdong Communication Group，Since April 21 2014，He served as director Since August 15 2016 the implementation of the duties of the Board

of Directors and the legal representative of the duties. Since January 4 2017 he was the chairman of the board of

directors of the Company and hold a concurrent post of vice chairman of Guangdong Guanghui Expressway Co.Ltd.Mr. Wang Chunhua He served as Director and General Manager of the Company Master Degree senior

engineer and senior economic engineer Since September 2006 he served as Deputy General Manager of the

Company.From March 2013 to October 2015 He served as director and Deputy General Manager of the Company

Since October 2015 He served as Director and General director of the Company and hold a concurrent post of

2019Annual Report

vice chairman of Gankang Expressway Co. Ltd Ganzhou Kangda Expressway Co. Ltd.and Shenzhen Huiyan

Expressway Co. Ltd.

Ms. Wang Ping She served as Director and Chief Engineer of the Company bachelor's degree professor of

Engineering National registered cost engineer Senior Economist. From February 2001 to April 2012 she

served as Minister of Infrastructure Management Department. From April 2012 she served as chief engineer of

the Company Since April 21 2014 She served as Director of the Company and hold a concurrent post of

Chairman of Zhaoqing Highway Co. Ltd.and Vice Chairman of Guangdong Jiangzhong Expressway Co. Ltd. Ms.

Wang Ping resigned as a director and chief engineer on January 8 2020 and did not hold any other positions in the

Company.

Mr. Fangzhi He serves as Director Master Degree and Senior Accountant He served as associate director

and Deputy General Manager of Finance Center of Guangdong Communication Group Since May 2015 He

served as Chief accountant of the Company Since December 2015 He served as director and chief accountant of

the Company and hold a concurrent post of Chairman of the board of supervisors of Guanghui Expressway Co.Ltd and Direcotr of Yueke Technology Petty Loan Co. Ltd

Mr. Chin Min He serves as Director undergraduate degree senior economist corporate legal adviser cost

engineer. From September 2001 to August 2009 He served as Senior economist Director and General Manager

of Guangdong Jingtong Highway Engineering Construction Group Co. Ltd.From August 2009 to April 2011 He

served as Deputy General Manager of Guangdong Nanyue Logistics Co. Ltd.Form April 2011 to December 2014

He served as Duputy Minister of Legal Affairs of Guangdong Communications Group Co. Ltd. Since December

2014 He served as Minister of Legal Affairs of Guangdong Communications Group Co. Ltd.Since July 19

2017 He served as Director of the Company.

Mr. Zeng Zhijun economist is a director of the Company with master degree. Since June 2010 he has served

as the deputy chief economist of Guangdong Provincial Expressway Co. Ltd. From January 2015 to September

2015 he served as Minister of Investment Planning Department of Guangdong Provincial Expressway Co. Ltd;

since September 2015 he has served as Minister of Legal Affairs Department of Guangdong Provincial

Expressway Co. Ltd. Since December 4 2017 he serves as Director of the Company.

Mr. Du Jun He serves as Director Master's degree and bachelor's degree senior engineer He serves as

Deputy General Manager director and member of party committee of Guangdong Luqiao Construction

Development Co. Ltd.Since April 2016 He served as Deputy General Manager of Guangdong Highway

Construction Co. Ltd. Since July 212016 He served as Director of the Company.

Mr. Zhuo Weiheng is a senior accountant with bachelor degree. From January 2008 to May 2009 he served

as the minister of the financial audit department of Guangdong Provincial Highway Construction Co. Ltd. Since

May 2009 he has served as the Minister of Finance Management Department of Guangdong Provincial Highway

Construction Co. Ltd.Since December 4 2017 he served as Director of the Company.

Mr. Cao Yu Master of Business Administration since 2011 has served as Shanghai Fuxin high-tech (Group)

Co. Ltd. investment manager deputy director of investment investment director. From July 21 2016 he served

as director of the Company.Mr. Huang Hai Master of Business Administration. Used to be Zhongshan Public Technology Co. Ltd.securities manager and securities affairs representative. He is currently the Secretary of the Board of Directors of

Poly Real Estate the Director of the Office of the Board of Directors and the Executive Director of Tibet Yinyue

Investment Management Co. Ltd. From July 21 2016 he served as director of the Company.

2019Annual Report

Mr. Bao Fangzhou Independent director of the Company Master of Law. Shanghai Jin Tiancheng Law Firm

Senior Partner 2008 - 2014 Former Independent Director of New Nanyang Co. Ltd. Since 2013 he has been an

independent director of Hubei Wushi Pharmaceutical Co. Ltd. since June 2016 Power Co. Ltd. Independent

Director. From July 21 2016He is an independent director of the Company.

Gu Naikang Independent directors and doctorate degree of the Company. Since June 2004 he has been a

professor and doctoral tutor of Finance and Investment Department of Zhongshan University School of

Management. He is currently an independent director of Guangxi Guitang (Group) Co. Ltd. an independent

director of Dongguan Yuqiu Electronics Co. Ltd. and an independent director of Guangzhou Zhujiang Industrial

Development Co. Ltd. From July 21 2016 he is an independent director of the Company.

Mr. Liu Zhonghua professor of accounting is an independent director of the Company with master degree.In September 2005 he was transferred to the School of Management of Guangdong University of Foreign Studies

to teach. He is currently a professor at the School of Accounting of Guangdong University of Foreign Studies he

is a master tutor concurrently serves as member of Accounting Society of China executive member of China

Association of Foreign Trade and Economic Accounting vice chairman of Guangdong Province Management

Accounting Association executive member of Guangdong Provincial Accounting Association and member of

Guangdong Audit Society. Since December 4 2017 he is an independent director of the Company.Mr. Zhang Hua economist is an independent director of the Company with Master Degree. From May 2006

to May 2012 he served as deputy general manager and chief investment director of Guangzhou Yingzhi Caihua

Investment Co. Ltd. From June 2012 to September 2016 he served as the deputy general manager of Guangzhou

De’rui Investment Co. Ltd and concurrently served as Deputy General Manager of Shenzhen Dongying Ruitong

Investment Management Partnership (Limited Partnership); since October 2016 he has served as general manager

of Shanghai Er Luo Investment Management Service Center (General Partnership). From November 2010 to

January 2017 he served as an independent director of Guangzhou Yu Yin Technology Co. Ltd. From December

2011 to September 2017 he served as an independent director of Guangdong Electric Power Development Co.

Ltd. In September 2017 he was an independent director of Zhuhai Taichuan Cloud Community Technology Co.Ltd. Since December 4 2017 he is an independent director of the Company.Ms. Zeng Xiaoqing an independent director of the Company with doctor's degrees. She began to work in

Tongji University in 1993. From February 2000 to October 2002 she conducted post-doctoral research and study

in Tokyo Institute of Technology Japan. She began to work in Tongji University in 1993 served as assistant

director of Shanghai Municipal Government's Expo Science and Technology Promotion Center from 2005 to 2012

and served as vice-chairman and secretary-general of Shanghai Creative Studies Institute from 2012; She is

currently the director of Tongji University's Joint Experimental Center for Traffic Information Control professor

and doctoral supervisor of Tongji University's School of Transportation Engineering. From May 20 2019 she

served as the independent director of the Company.Mr. Jiang Changwen male is 52 years old master of management senior accountant senior economist.

From July 1999 to November 2006 he worked in Guangshenzhu Expressway Co. Ltd. and served as the

supervisor deputy manager and manager of the accounting department. From November 2006 to January 2009 he

worked in the Jiangzhong Expressway Company and served as the finance department manager; since January

2009 he has worked in the Guangdong Provincial Transportation Group Co. Ltd and has served as a supervisor.

From May 202019 he is the assigned chairman of the supervisory board of Guangdong Communication Group

Co. Ltd.

Ms. Li Haihong Supervisors of the Company bachelor degree senior economist and road and bridge

engineer. Since October 2008 she has been working as a supervisory and auditing department of the Guangdong

2019Annual Report

Provincial Communications Group. From October 2008 to September 2012 she was appointed full-time

supervisor of Guangdong Expressway Co. Ltd. FromOctober 2012 to March 2016 she was appointed full-time

supervisor of Guangdong Yueyun Traffic Co. Ltd. and Guangdong Communications Industrial Investment Co.Ltd.Form March 2016 to December 2017 she was appointed full-time supervisor of Guangdong Litong Real

Estate Investment Co. Ltd.Since December 2017 she was appointed full-time supervisor of Guangdong Nanyue

Traffic Investment Construction Co. Ltd. Since March 2016 she was appointed full-time supervisor of

Guangdong Traffic Industry Investment Co. Ltd. from December 2018 to present is the first secretary of the

party organization of Guangdong Kaiyang Expressway Co. Ltd. From July 21 2016 she has served as supervisor

of the Supervisory Committee of the Company.Ms.Ke Lin bachelor degree Bachelor of Science assistant researcher. She began to take a job in July 1991.She had successively served as cadre of personnel department deputy head head of the personnel department

section chief rank cadre of discipline inspection and supervision department director of the commission for

discipline Inspection (deputy-director level). In November 2008 she was transferred to work in Provincial

Transportation Group successively served as member of party committee union chairman and discipline

inspection commission secretary. From January 2013 to August 2017 she has served as party committee member

discipline inspection commission secretary and chairman of the union in Yueyun Transportation. .Since September

15 2017 She served as supervisor of Board of supervisor of the Company.

Mr. Feng Yuan supervisor of the Company bachelor of science associate professor. From October 2009 to

October 2014 he served as deputy general manager of Guangdong Jiangzhong Expressway Co. Ltd. and director

and deputy general manager of Beijing-Zhuhai Expressway Guangzhu Section Co. Ltd. From October 2014 to

December 2018 he served as director general manager and deputy secretary of the Party Committee of

Guangdong-Foshan Expressway Co. Ltd. and he has been deputy economist of the Company since December

2018. From September 9 2019 he served as the employee supervisor of the 9th Supervisory Committee of the

Company.

Mr. Zhou Yisan supervisor of the Company postgraduate degree master of law enterprise legal consultant

with national legal professional qualification board secretary qualification and securities fund and futures

practitioner qualification. From February 2014 to April 2016 he was the deputy supervisor of the Legal Affairs

Department of Guangdong Transportation Group Co. Ltd. From April 2016 to September 2017 he was the deputy

head of the Investment Development Department and Legal Affairs Department of the Company and he has been

the head of Legal Affairs Department of the Company since September 2017. From September 9 2019 he served

as the employee supervisor of the 9th Supervisory Committee of the Company.Ms. Zuo Jiang Deputy General Manager of the Company Master of Economics Senior Economist Qualified

as Legal Adviser of the Enterprise Secretary of the Board of Directors. He has been working in the Company

since 1994. He has been the Minister of Securities Affairs of the Company since 1999. He has been the Secretary

of the Board of Directors and Director of Securities Affairs Department since March 2006. From October 2015 to

July 2016 he was the Deputy General Manager and Secretary of the Board of Directors And Minister of

Securities Affairs. Since October 2015 he has been the Deputy General Manager of the Company and hold a

concurrent post of Director of Yueke Technology Petty Loan Co. Ltd. and director of Guoyuan Securities Co.Ltd.Mr. Cheng RuiOn-job postgraduate master of business administration with a lawyer qualification. He began

to take a job in July 1997. He had successively served as development department staff deputy manager of

investment management department and manager of investment management department in Xinyue Co.Ltd

served as Deputy General Manager of Xinyue Company in August 2015 and served as deputy minister of

2019Annual Report

strategic development department from April 2016 to August 2017. Since August 2017 he served as Deputy

General Manager of the Company. During this period starting from May 2019 she was assigned as the first

secretary of the Party organization in Shanhu Village Jinhe Town Jiexi County Jieyang City.Ms. He Bing general counsel master's degree in law enterprise legal adviser from August 2005 to July 2012

she served as Deputy chief economic engineer of the Company Since July 2012 she served as Chief legal adviser

of the Company. and hold a concurrent post of Director of Huiyan Expressway Co. Ltd. and supervisor of Jiangzhong

Expressway Co. Ltd.

Mr. Yang Hanming he has been the Secretary of the Board， bachelor's degree senior economist corporatelegal adviser with the board secretary qualifications. Since March 2000 he has been successively served as

deputy minister of investment planning and minister of legal affairs in Guangdong Provincial Expressway

Development Co. Ltd. Since August 2014 he has been concurrently served as minister of investment and

development. Since August 2017 he has been the Secretary of the Board of the Company and hold a concurrent

post of Supervisor of Yueke Technology Petty Loan Co. Ltd. and supervisor of Ganzhou Kangda Expressway Co.Ltd.Director of Guangdong Jiangzhong Expressway Co. ltd. Since September 2019 he served as Minister of

Development Dept of the Company.

Office taking in shareholder companies

√Applicable □Not applicable

Names of the

persons in office

Names of the shareholders

Titles engaged in the

shareholders

Sharting date of

office term

Expiry

date of

office

term

Does he /she receive

remuneration or

allowance from the

shareholder

Chen Min

Guangdong Communication

Group

Minister of Investment

Management Dept.

December 12014 Yes

Du Jun

Guangdong Highway

Construction Co. Ltd.

Deputy General Manager March 82016 Yes

Zhuo Weiheng

Guangdong Highway

Construction Co. Ltd.

Deputy Chief Accountant March 262018 Yes

Zeng Zhijun

Guangdong Expressway Co.Ltd

Minister of legal affairs

Dept

September 12015 Yes

Huang Hai

Tibet Yinyue Investment

Management Co. Ltd.

Executive director June 12015 No

Jiang Changwen

Guangdong Communication

Group Co. Ltd.

Dispatched chairman of

the supervisory

committee

January 12009 Yes

Li Haihong

Guangdong Communication

Group Co. Ltd.

Full-time field

supervisors

July 212016 Yes

Offices taken in other organizations

√Applicable □Not applicable

2019Annual Report

Name of the

persons in

office

Name of other organizations

Titles engaged in the

other organizations

Starting date of

office term

Expiry

date of

office

term

Does he/she receive

remuneration or

allowance from other

organization

Bao Fangzhou Shanghai Allbright law firm Lawyer Senior partner January 12000 Yes

Bao Fangzhou Laurel Power Co. Ltd. Independent director Jne 12016 Yes

Gu Naikang

Finance and Investment School of

Business Sun YAT-SEN University

Professor doctoral

supervisor

January 12004 Yes

Gu Naikang

Guangzhou Zhujiang Industry

Development Co. Ltd.

Independent director May 12014 Yes

Gu Naikang

Mingyang Intelligent Energy Group

Co. Ltd.

Independent director July 12017 Yes

Gu Naikang Zhubo Design Co. Ltd. Independent director December 12019 Yes

Gu Naikang Guangfa Securities Co. Ltd. Supervisor July 12016 Yes

Zhang Hua

Shanghai Erro Investment Management

Service Centre(General partnership)

General Manager October 12016 Yes

Zhang Hua

Zhuhai Taichuan Community

Technology Co. Ltd .Independent director September 12017 Yes

Zhang Hua Guangzhou Yuyin Technology Co. Ltd. Independent director November 12018 Yes

Liu Zhonghua

College of Accounting Guangdong

University of Foreign Studies

Professor Master’s

supervisor

September 1

2005

Yes

Liu Zhonghua Gelinmei Co. Ltd. Independent Director March 202019 Yes

Liu Zhonghua

Guangdong Shaogang Songshan Co.Ltd.Independent Director June 252019 Yes

Cao Yu

Shanghai Fuxin high-tech (Group) Co.Ltd.

ECD May 12008 Yes

Cao Yu

Zhongshan Public Utilies Group Co.Ltd.

Director July 82019 No

Huang Hai

Poly Developments and Holdings

Group Co. Ltd.Secretary to the Board April 262012 Yes

Huang Hai Poly Property Development Co. Ltd. Board chairman April 222019 No

Zeng

Xiaoqing

Tongji University's School of

Transportation Engineering

Professor and doctoral

supervisor

June 12007 Yes

Zeng

Xiaoqing

Tongji University's Joint Experimental

Center for Traffic Information Control

Director June 302003 No

Punishments to the current and leaving board directors supervisors and senior managers during the report period

by securities regulators in the recent three years

□ Applicable √Not applicable

2019Annual Report

IV. Remuneration to directors supervisors and senior executives

Decision-making procedures basis for determination and actual payment of the remuneration to directors

supervisors and senior executives

The remuneration of members of the Eighth board of directors and supervisory committee was examined and

determined at the second provisional shareholders’ general meeting in 2019The remuneration of the senior

executives is determined by the assets operation responsibility system in that year.

1. The directors of the Company and the controlling shareholder of the Company and its related parties as

well as the directors of the Company shall not receive the remuneration of the directors.

2. Directors who have not held other positions in the Company and the controlling shareholder of the

Company and its related parties are remunerated by the directors of the Company and the standard is RMB 6000

(tax included) per person per month. In addition the expenses incurred by the independent directors at the board

of directors and the shareholders' general meeting and the expenses incurred in exercising their functions and

powers in accordance with the articles of association may be reimbursed in the company.Remuneration to directors supervisors and senior executives in the reporting period

Ten Thousands yuan

Name Positions Sex Age

Office

status

Total remuneration

received from the

Company

Whether to get paid in

the company related

party

Zheng Renfa Board Chairman Male 50 In Office 68.66 No

Wang Chunhua DirectorGeneral Manager Male 55 In Office 65.11 No

Wang Ping Director Chief Engineer Female 55 In Office 60.89 No

Fang Zhi Director Chief Accountant Male 56 In Office 61.05 No

Chen Min Director Male 56 In Office 0 Yes

Zeng Zhijun Director Male 49 In Office 0 Yes

Du Jun Director Male 54 In Office 0 Yes

Zhuo Weiheng Director Male 48 In Office 0 Yes

Cao Yu Director Male 34 In Office 6.3 No

Huang Hai Director Male 44 In Office 6.3 No

Xiao Duan Independent director Female 61 Dimission 3 No

Gu Naikang Independent director Male 54 In Office 6.3 No

Bao Fangzhou Independent director Male 41 In Office 6.3 No

Zhang Hua Independent director Male 54 In Office 6.3 No

Liu Zhonghua Independent director Male 54 In Office 6.3 No

Zeng Xiaoqing Independent director Female 50 In Office 3.3 No

Jiang

Changwen

Chairman of the

Supervisory Committee

Male 52 In Office 0 Yes

2019Annual Report

Name Positions Sex Age

Office

status

Total remuneration

received from the

Company

Whether to get paid in

the company related

party

Ling Ping

Chairman of the

Supervisory Committee

Female 56 Dimission 0 Yes

Li Haihong Supervisor Female 48 In Office 0 Yes

Ke Lin Supervisor Female 50 In Office 61.22 No

Cao Xiaoying Supervisor Female 51 Dimission 47.8 No

Yang Tianshu Supervisor Male 37 Dimission 34.89 No

Feng Yuan Supervisor Male 55 In Office 47.35 No

Zhou Yisan Supervisor Male 39 In Office 46.12 No

Zuo Jiang Deputy General Manager Female 47 In Office 61.22 No

Cheng Rui Deputy General Manager Male 45 In Office 62.34 No

He Bing Chief legal adviser Female 52 In Office 49.12 No

Yang Hanming Secretary to the Board Male 50 In Office 50.54 No

Total -- -- -- -- 760.41 --

Incentive equity to directors supervisors or/and senior executives in the reporting period

□ Applicable √Not applicable

V. Particulars about employees.

1.Number of staff professional structure and educational background

Number of in-service staff of the parent company(person) 99

Number of in-service staff of the main subsidiaries(person) 2055

The total number of the in-service staff(person) 2154

The total number of staff receiving remuneration in the current

period(person)

2154

Retired staff with charges paid by the parent company and

main subsidiaries (person)

98

Professional

Category Number of persons（person）

Management personnel 462

Toll collectors 1280

Road service personnedl 131

Logistical personnedl 281

Total 2154

2019Annual Report

Education

Category Number of persons（person）

Holders of master’s degree or above 50

Graduates of regular university 421

Graduates of junior colleges 1407

Other 276

Total 2154

2. Remuneration policies

According to the company's overall development plan to further establish and improve a variety of human

resource management system strengthen the macro salary management to maintain the level of salary market

competitiveness. Advocate salary and performance related and constantly improve the performance appraisal

mechanism personal performance appraisal approach staff promotion system to develop both incentive and

restrictive salary performance policy. Think highly of the establishment and perfection of welfare system in

accordance with the relevant provisions of the state on time and in full for the full pay pension insurance medical

insurance work-related injury insurance unemployment insurance maternity insurance housing provident fund

and other statutory benefits comply with the provisions on working hours rest and vacations the establishment of

supplementary medical insurance enterprise annuity and welfare system.

3.Training plan

Nil

4.Outsourcing situation

□ Applicable √ No Applicable

2019Annual Report

X. Administrative structure

I. General situation

The Company strictly followed the requirement of laws and regulations in < the Securities

Law>< Code of Corporate Governance for Listed Companies in China> etc. and kept on

improving corporate governance structures improving normative operation level. Company had stipulated rules

such as rules of procedures in three meetings working guide of special committee in

board of directors working guide of general manager etc. and internal control system basically covering all

operating management such as company financial management investment management information disclosure

related transaction external guarantee fund raising etc. All rules are well implemented.In the report period strictly following the relevant provisions of “Company Law”and “Regulations” the

shareholder’s meeting of our bank effectively performed the functions. The board of directors is to be responsible

for the shareholder’s meeting to take the ultimate responsibility for the bank’s operation and management and to

convene a meeting as well as performing the function and power according to legal procedure. In line with the

attitude which is responsible for all shareholders and keeping in close contact and communication with the board

of directors and the management the board of supervisors carries out the assessment work on duty exercising for

the board of directors and the board of supervisors effectively performing functions and obligations of

supervision.

Does there exist any difference in compliance with the corporate governance the PRC Company Law and the

relevant provisions of CSRC

□ Yes √No

There exist no difference in compliance with the corporate governance the PRC Company Law and the relevant

provisions of CSRC.II. Independence and Completeness in business personnel assets organization and finance

1. Independent business

The company mainly engaged in business is Guangfo Expressway Fokai Expressway and Beijing-Zhuhai

Expressway Guangzhu section of the charges and maintenance work investment in science and technology

industry and provide relevant advice.it has invested in or holds Shenzhen Huiyan Expressway Co. Ltd. Guanghui Expressway Co. Ltd. Jiangzhong

Expressway Co. Ltd. Zhaoqing Yuezhao Highway Co. Ltd. Ganzhou Kangda Expressway Co. Ltd Ganzhou

Gankang Expressway Co. Ltd. Guangdong Yueke Technology Micro Loan Co. Ltd. and Guangdong Guangle

Expressway Co. Ltd.

The Company has outstanding main operation independent and complete business and the ability of independent

operation. All business decisions of the Company were made independently being completely separated from the

shareholder with actual control. Related transactions were carried out in light of the principle of fair transaction

which did not harm the interests of the Company and other shareholders of the Company. The content of related

transactions was fully timely and accurately disclosed which did not have negative influence on the Company.

2019Annual Report

2. Complete assets

The relationship of the Company's property right is clear. The assets injected by shareholders in the Company

are independent and complete and have clear property right. All capital was paid up and relevant formalities of

property right change were settled.

3. Independent personnel

As for personnel relationship the general manager deputy general managers the secretary to the board of

directors and financial controller of the Company were full-time employees and received salary from the

Company who did not concurrently hold positions at the parent company.

All directors and supervisors of the Company were elected through legal procedure. The general manager

deputy general managers chief accountant chief economic engineer and chief engineer were directly appointed

by the board of directors. Other managerial personnel of all levels were directly appointed by the general manager.The Company owns independent power of personnel appointment and removal.

4. Independent finance

The Company including subsidiaries established independent accounting department，independent accountingsystem and regulations on financial management.The Company independently opened bank account and did not deposit funds in the accounts of the finance

company or settlement center of the majority shareholder. The Company independently paid tax. The Company's

financial decisions were independently made. The majority shareholder did not interfere with the use of funds by

listed companies.

5. Independent organization

The board of directors the supervisory committee and other internal organs of the Company operated

independently. Its organs are complete and independent.III. Horizontal Competitions

□Applicable √ Not applicable

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

1.Annual General Meeting

Sessions Meeting Date

Description

of proposals

Resolution Disclosure date Disclosure index

2018

Shareholders’

general meeting

Annual

Shareholders’

General Meeting

67.59% May 202019 May 212019

Announcement of Resolutions of the

shareholders' general meeting in

2018.www.cninfo.com.cn

The First

provisional

shareholders’

General meeting

of 2019

Provisional

shareholders’

General meeting

66.75% June 252019 June 262019

Announcement of Resolutions of the

First provisional shareholders' general

meeting of 2019. www.cninfo.com.cn

2019Annual Report

The Second

provisional

shareholders’

General meeting

of 2019

Provisional

shareholders’

General meeting

67.02%

September

202019

September

212019

Announcement of Resolutions of the

Second provisional shareholders'

general meeting of 2019.www.cninfo.com.cn

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

□Applicable √Not applicable

V. Responsibility performance of independent directors in report period

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

The attending of independent directors

Independent

Directors

Number of Board

meetings

necessary to be

attended in the

reporting period

Number of

spot

attendances

Number of

meetings

attended by

Communication

Number of

attendances

by

representative

Number of

absence

Failure to personally

attend board meetings

successively twice

(Yes/No)

Attendance

of the

shareholder

s' general

meeting

Gu Naikang 9 3 6 0 0 No 3

Gao Fangzhou 9 3 6 0 0 No 3

Liu Zhonghua 9 3 6 0 0 No 3

Zhang Hua 9 3 6 0 0 No 3

Zeng Xiaoqing 6 2 4 0 0 No 3

Xiao Duan 3 1 2 0 0 No 3

Notes to failure to personally attend Board Meetings Successively Twice

Nil

2. Objection for relevant events from independent directors

Independent directors come up with objection about Company’s relevant matters

□Yes √No

No objections arising from the independent directors on relevant events of the Company during the Period

3. Other notes to duty performance of independent directors

Has an independent director’s advice to the Company been accepted

√Yes □No

Explanation on acceptance of or failure to accept an independent director’s advice to the Company.

Independent directors seriously exercise the rights conferred by law keep abreast of the company's production and

management information concerned about the company's comprehensive development actively attend relevant

2019Annual Report

meetings held by the company in 2019 published an independent and objective advice on relevant matters for

consideration by the Board of Directors of the Company. Faithfully perform their duties give full play to the

independent role of the independent directors to safeguard the interests of the company as a whole and to

safeguard the legitimate rights and interests of all shareholders especially minority shareholders. The advices on

business development and corporate governance given by independent directors can be adopted.VI. Duty Performance of Special Committees under the Board of Directors in the Reporting Period

1. The board of directors has an audit committee composed of three directors. i.e. Mr. Liu Zhonghua Mr.Zhang

Hua and Mr.Fang Zhi. The particulars of the work of the audit committee in the report period are as follows:

According to the Rules of Procedure of Audit Committee of the Board of Directors and Working Regulations

of Audit Committee of the Board of Directors on Annual Report and the work requirements of CSRC and

Shenzhen Stock Exchange on annual report for 2018 the audit committee carried out a series of work for the

annual audit of the Company for 2018 including deciding the working schedule for the audit of financial report

for the report year after consultation with the certified public accountants in charge reviewing the financial report

prepared by the Company and forming written opinions issuing the Urging Letter for Audit to certified public

accountants and requiring certified public accountants to carry out overall work plan for audit and submit relevant

progress report to the audit committee reviewing the financial report for 2018 submitted by the Finance Dept. of

the Company (on which the certified public accountants in charge of annual audit issued standard unqualified

opinions) and giving written auditing opinions.

2. The board of directors has a remuneration committee composed of three directors i.e. Mr. Bao Fangzhou Mr.

Gu Naikang and Mr Huang Hai. The particulars of the work of the remuneration committee in the report period

are as follows:

According to the Company's Regulations on Performance Appraisal and Remuneration Management of Senior

Executives the remuneration and appraisal committee audited the remuneration disclosed by the Company's

directors and senior executives for 2018 and expressed auditing opinions and examined and adopted the

remuneration scheme and appraisal scheme for senior executives of the Company for 2018.

3.In the report period The board of directors has an strategy committee composed of five directors. i.e. Mr.

Zheng Renfa Mr.Wang Chunhua Mr.Gu Naikang Mr.Bao Fangzhou Mr.Zhang Hua and Ms.Zeng Xiaoqing.Strategy Committee will strengthen the company's strategic direction strategic planning research and supervise

the implementation of corporate strategies provide timely advice to the Board decisions on strategic development.

4.The board of directors has set up a Risk Management Committee composed of three directors including

chairman Mr. Zheng Renfa members Mr. Gu Naikang and Mr. Bao Fangzhou.The Risk Management Committee will work in accordance with the Company's Measures for the

Management of Risk Management and Internal Control and the Rules of Procedure of the Risk Management

Committee of the Board of Directors.

VII. Work of the supervisory Committee

Did the supervisory Committee find any risk existing in performing the supervision activities in the reporting

period

□Yes √No

The supervisory Committee has no objection against any matters under supervision in the reporting period

2019Annual Report

VIII. Assessment and incentive Mechanism for Senior executives

The Company implemented position responsibility to every senior management and made clear regulations

on job standards appraisal standards. The senior management staff shall report to worker representatives and

accept comments.IX. Internal Control

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

□ Yes √ No

II. Self-evaluation report on internal control

2019 Annual Report

Disclosure date of appraisal report on internal control April 72020

Disclosure index of appraisal report on internal control www.cninfo.com.cn

The ratio of the total assets of units included in the scope of evaluation accounting for the total assets on the company's consolidated financial statements 100.00%

The ratio of the operating income of units included in the scope of evaluation accounting for the operating income on the company's consolidated financial statements 100.00%

Standards of Defects Evaluation

Type Financial Report Non-financial Report

2019 Annual Report

Qualitative standard

The qualitative criteria for the evaluation of internal control deficiencies in

financial reports confirmed by the Company is as follows: The following situations

(including but not limited to) shall be deemed as “material deficiencies” in the

internal control of the financial report. (1) There are major frauds made by the

directors or supervisors or senior management personnel in the company’s

management activities; (2)There are material misstatements in the current financial

report but the internal control failed to find the misstatements during its operation;

(3) The supervisions made by the company's audit committee and the internal audit

organization on the internal control are invalid; (4) The control environment is

invalid; (5)The material deficiencies found and reported to the management but are

not corrected within a reasonable time; (6)There is an administrative punishment

from the securities regulatory

institution due to accounting errors.The following situations (including but not limited to) shall be deemed as

“significant deficiencies” in the internal control of the financial report and

there are intense signs for the situations becoming “material deficiencies”: (1)

Frauds made by staff in key positions; (2)The supervisory function on compliance

is invalid and the violations of regulations may have a significant impact on the

reliability of the financial report; (3)The significant deficiencies reported to the

management but are not

corrected within a reasonable period.The following situations (including but not limited to) shall be deemed as“generaldeficiencies” in the internal control of the financial report. (1) Frauds made by

staff in non key positions or business operators execute the implementation

procedures not strictly conforming to the company’s policy but resulted in no

significant impact on the reliability of the financial report. (2)The supervisory

function on compliance is invalid and the violations of regulations may not have a

significant impact on the reliability of the financial report; (3)The general

deficiencies reported to the management but are not corrected within a reasonable

period.The qualitative criteria for the evaluation of internal control deficiencies in

non-financial reports confirmed by the Company is as follows: Material deficiencies:

serious violations and being sentenced to heavy fines or need taking criminal

responsibility; utterly disregard the rules of law illegal behaviors in the operation

and management are particularly severe and the circumstance is very bad which

leads to the suspension or cessation to the company's daily operation and

management activities and leads to the audit report with a disclaimer of opinion or a

negative opinion issued by the CPA; the negative news spread all over the country

which caused severe damage to the company’s reputation; resulted in decease of a

number of workers or citizens or resulted in damages that are unable to recover to

workers or citizens; reached the circumstance(grade II) of major environmental

event. Significant deficiencies: illegal and being punished; disregard the

requirements of the company’s management system and the relevant rules of law

there are illegal acts of using the authority to seek illegal interests in the work which

significantly affect the efficiency and the result of daily operation and management

activities and lead to the audit report with qualified opinion issued by the CPA; the

negative news spread in a region which caused the large-extent damage to the

company’s reputation; resulted in decease of a worker or a citizen or resulted in

damages that need long time to recover to workers or citizens;

reached the circumstance(grade Ⅲ) of big environmental event. General

deficiencies: minor violations; the awareness of management under in compliance

with laws and regulations is weak lacking of business and management knowledge

and there are phenomena such as being slack in performing management duties

being passive and poorly execute the institution in the work which shall affect the

efficiency and the result of daily operation and management activities and lead to

small effects to the company’s management goal; the negative news spread within

the company which caused the little-extent damage to the company’s

reputation; shortly affected the health of the workers or citizens and the workers or

citizens can be recovered in a short time; reached the circumstance(grade Ⅳ) of

general environmental event.

2019 Annual Report

Standards of

Quantization

The qualitative criteria for the evaluation of internal control deficiencies in

financial reports confirmed by the Company is as follows: Material deficiencies:

potential misstatement≧1% of the total amount of the

owner’s equity or RMB 200 million; significant deficiencies: 0.5% of the total

amount of the owner’s equity or RMB 100 million≤potential misstatement＜1%

of the total amount of the owner’s equity or RMB 200 million; general

deficiencies: potential misstatement＜0.5% of the total amount of the owner’s

equity or RMB 100 million Standards of Quantization

The qualitative criteria for the evaluation of internal control deficiencies in financial

reports confirmed by the Company is as follows: Material deficiencies: potential

misstatement≧1% of the total amount of the

owner’s equity or RMB 200 million; significant deficiencies: 0.5% of the total

amount of the owner’s equity or RMB 100 million≤potential misstatement＜1% of

the total amount of the owner’s equity or RMB 200 million; general deficiencies:

potential misstatement＜0.5% of the total amount of the owner’s equity or RMB

100 million Standards of Quantization

Number of major

defects in financial

reporting（a）

0

Number of major

defects in non

financial reporting (a)

0

Number of important

defects in financial

reporting（a）

0

Number of important

defects in non

financial reporting（a）

0

2019Annual Report

X. Internal Control audit report

√ Applicable □Not applicable

Review opinions in the internal control audit report

In our opinion Guangdong Expressway has maintained effective financial report internal control in all material aspects according

to the basic standards for Enterprise internal control and relevant regulations ended December 31 2019.

Disclosure of internal audit report Disclosure

Disclosure date of audit report

of internal control (full-text)

April 72020

Disclosure index of audit report

of internal control (full-text)

www.cninfo.com.cn

Internal audit report’s opinion Unqualified audit opinion

Non-financial reporting the existence

of significant deficiencies

No

Has the CPAs issued a qualified auditor’s report of internal control .□ Yes √No

Does the internal control audit report issued by the CPAs agree with the self-assessment report of the Board of

Directors

√Yes □No

XI. Corporation bonds

Whether or not the Company public offering corporation bonds in stock exchange which undue or without

payment in full at maturity on the approval date for annual report disclosed

No

2019Annual Report

XII. Financial Report

I. Audit report

Type of audit opinion Standard Unqualified audit opinion

Type of audit opinion April 32020

Name of audit firm

Ruihua Certified Public Accountants (special general

partnership)

Audit report NO. Ruihua 【2020】4402001

Name of Certified public Accountant Qin Yanlin Huang Zhiyan

Auditors’ Report

To all shareholders of Guangdong Provincial Expressway Development Co. Ltd.I. Opinion

We have audited the financial statements of Guangdong Provincial Expressway Development Co. Ltd.(hereinafter referred to as "the Company") which comprise the balance sheet as at December 31 2019 and the

income statement the statement of cash flows and the statement of changes in owners' equity for the year then

ended and notes to the financial statements.In our opinion the attached financial statements are prepared in all material respects in accordance with

Accounting Standards for Business Enterprises and present fairly the financial position of the Company as at

December 31 2019 and its operating results and cash flows for the year then ended.

II. Basis for Our Opinion

We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants in China. Our

responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the

Financial Statements section of our report. According to the Code of Ethics for Chinese CPA we are independent

of the Company in accordance with the Code of Ethics for Chinese CPA and we have fulfilled our other ethical

responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is

sufficient and appropriate to provide a basis for our audit opinion.III. Key Audit Matters

Key audit matters are those matters that in our professional judgment were of most significance in our audit

of the financial statements of the current period. These matters were addressed in the context of our audit of the

financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on

these matters. We have identified the following items as key audit items that need to be communicated in the audit

report.(I) Depreciation of fixed assets toll roads

1. Item description

As mentioned in "Section 5.15 Fixed Assets" and "Section 7.10 Fixed Assets" the book value of the

Guangdong Expressway at the end of 2019 was RMB8415370425.02 accounting for 47.61% of the

2019Annual Report

consolidated total assets; the depreciation provided for the toll road in 2019 was RMB770040553.89 accounting

for 56.77% of the consolidated operating costs. GX toll roads are depreciated according to the traffic flow method

which calculates depreciation for the current period based on the ratio of the actual traffic flow to the expected

total remaining traffic flow during the operating period. Total traffic volume over the operating period is the

forecast of total traffic volume over the operating period of GDHC and is a significant accounting estimate.Therefore we determine the pricing and depreciation of toll roads of Guangdong Expressway Company as

the key audit items.

2. Audit response

In response to the above key audit matter we have implemented the following main audit procedures:

(1)Understand evaluate and test the internal control of the management of the Company on the daily

management and accounting treatment of toll roads;

(2)Check whether the actual traffic flow data applied by Guangdong Expressway Company in the

depreciation calculation of toll roads is consistent with the actual traffic flow data obtained by Guangdong

Expressway Company from external service units;

(3)Evaluate the independence and professional competence of the third-party organization employed by the

Company that carries out traffic flow forecast;

(4) Understand the methods used in traffic flow forecast reports issued by third-party organizations to

forecast the traffic flow in the future and evaluate the reliability of traffic flow forecast reports by comparing the

predicted traffic flow for the past year with the actual traffic flow for that period;

(5) Recalculate the depreciation of roads and bridges to verify the accuracy of the depreciation amount of

roads and bridges in the financial statements.(II) Equity investment

1. Item description

As described in " Section7-7 Long-term equity investments" “Section 7-8 Investments in other equityinstruments" and "Section 7-37 Investment income" the total year-end equity investments of Yuehighway

Company in 2019 amounted to RMB5091562503.13 of which RMB3255739898.36 in long-term equity

investments and RMB1835822604.77 in other equity instruments accounted for 28.81% of the total consolidated

assets of which RMB508416135.27 in total investment income from equity investments in 2019 accounted for

35.07% of the consolidated net profit in 2019. Equity investments have a significant impact on the 2019 financial

statements.Therefore we have determined the recognition and measurement of equity investment of Guangdong

Expressway Company as the key audit matter.

2. Audit response

In response to the above key audit matter we have implemented the following main audit procedures:

(1) Obtain investment agreement articles of association and other documents of equity investment and

understand the purpose business model and cash flow characteristics of investment contract of Guangdong

Expressway Company;

(2)Through examination of relevant documents and records understand the joint control or major impact of

Guangdong Expressway Company on the joint venture company including appointing representatives to the board

of directors of the joint venture company to participate in the formulation of financial and operating policies;

(3) Communicate and discuss with the management of Guangdong Expressway Company to evaluate the

actual impact of Guangdong Expressway Company on the major decisions of the joint venture company and

related operations and to evaluate whether there has been any significant change compared with the previous

year;

2019Annual Report

(4) Check the audit report of the important joint venture and associate company and implement on-site audit

procedures for the important financial statement items of the important joint venture and associate company that

have influence on the equity method accounting of Guangdong Expressway Company; implement review

procedures for the financial statements of other joint venture and associate company;

(5) Pay attention to whether there are differences between the accounting policies of joint venture and

affiliated company and Guangdong Expressway Company and check whether the accounting policies of equity

method of Guangdong Expressway Company have been adjusted;

(6) Recalculate the accuracy of equity measurement;

I.Other Matter

The consolidated and company balance sheet on December 31 2018 the consolidated and company income

statement the consolidated and company cash flow statement the consolidated and company shareholders' equity

statement and the notes to the relevant financial statements were audited by other accounting firms and an

unqualified opinion was issued on March 28 2019.II. Other information

The management of Guangdong Expressway Company is responsible for other information. Other

information includes the information covered in the 2019 annual report of Guangdong Expressway Company but

does not include the financial statement and our audit report.Our audit opinion on the financial statements does not cover other information and we do not issue any form

of verification conclusion on other information.In combination with our audit of the financial statements our responsibility is to read other information and

consider in such process whether other information is materially inconsistent with the financial statements or the

information we learned during the audit or whether there appears to be a material misstatement.

Based on the work that we have already performed if we determine that other information contains material

misstatements we should report such fact. In this regard we have nothing to report.III. Responsibilities of Management and Those Charged with Governance for the Financial Statements

The Company's management is responsible for preparing the financial statements in accordance with the

requirements of Accounting Standards for Business Enterprises to achieve a fair presentation and for designing

implementing and maintaining internal control that is necessary to ensure that the financial statements are free

from material misstatements whether due to frauds or errors.In preparing the financial statements management of the Company is responsible for assessing the Company's

ability to continue as a going concern disclosing matters related to going concern and using the going concern

basis of accounting unless management either intends to liquidate the Company or to cease operations or has no

realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company's financial reporting process.IV. Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement whether due to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance

with the audit standards will always detect a material misstatement when it exists. Misstatements can arise from

fraud or error and are considered material if individually or in the aggregate they could reasonably be expected to

influence the economic decisions of users taken on the basis of these financial statements.

2019Annual Report

As part of an audit in accordance with ISAs we exercise professional judgment and maintain professional

scepticism throughout the audit. We also:

(1) Identify and assess the risks of material misstatement of the financial statements whether due to fraud or

error design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient

and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from

fraud is higher than for one resulting from error as fraud may involve collusion forgery omissions

misrepresentations or the override of internal control.

(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are

appropriate in the circumstances.

(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates

and related disclosures made by management of the Company.

(4) Conclude on the appropriateness of using the going concern assumption by the management of the

Company and conclude based on the audit evidence obtained whether a material uncertainty exists related to

events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we

conclude that a material uncertainty exists we are required to draw attention in our auditor's report to the related

disclosures in the financial statements or if such disclosures are inadequate to modify our opinion. Our

conclusions are based on the audit evidence obtained up to the date of our auditor's report. However future events

or conditions may cause the Company to cease to continue as a going concern.

(5) Evaluate the overall presentation structure and content of the financial statements including the

disclosures and whether the financial statements represent the underlying transactions and events in a manner that

achieves fair presentation.

(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business

activities within the Company to express an opinion on the financial statements and bear all liability for the

opinion.We communicate with those charged with governance regarding among other matters the planned scope and

timing of the audit and significant audit matters including any significant deficiencies in internal control that we

identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical

requirements regarding independence and to communicate with them all relationships and other matters that may

reasonably be thought to bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine those matters that were of

most significance in the audit of the financial statements of the current period and are therefore the key audit

matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure

about the matter or when in extremely rare circumstances we determine that a matter should not be

communicated in our report because the adverse consequences of doing so would reasonably be expected to

outweigh the public interest benefits of such communication.Ruihua Certified Public Accountants Co. Ltd.(Special General Partnership)

Certified Public Accountant of China:

(project partner) Qin Yanlin

Certified Public Accountant of China: Huang Zhiyan

Beijing China

April 3 2020

2019Annual Report

II. Financial Statement

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.

December 312019

In RMB

Items December 312019 December 312018

Current asset：

Monetary fund 2817920894.50 2124524996.32

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 125343724.66 91076995.07

Financing of receivables

Prepayments 10894246.41 1912943.40

Insurance receivable

Reinsurance receivable

Provisions of Reinsurance contracts

receivable

Other account receivable 26618178.57 16487256.02

Including：Interest receivable

Dividend receivable 7205472.90 1205472.90

Repurchasing of financial assets

Inventories 111683.22 81017.91

Contract assets

Assets held for sales

Non-current asset due within 1 year 51745.32 51745.32

Other current asset

2019Annual Report

Items December 312019 December 312018

Total of current assets 2980940472.68 2234134954.04

Non-current assets：

Loans and payment on other’s behalf

disbursed

Debt investment

Available for sale of financial assets 1668791594.53

Other investment on bonds

Expired investment in possess

Long-term receivable

Long term share equity investment 3255739898.36 3145644970.07

Other equity instruments investment 1835822604.77

Other non-current financial assets

Property investment 3331500.37 3579007.54

Fixed assets 8925700473.65 7600046319.91

Construction in progress 229098299.48 1089473425.63

Production physical assets

Oil & gas assets

Use right assets

Intangible assets 6393895.17 5739020.48

Development expenses

Goodwill

Long-germ expenses to be amortized 1114764.44 1221781.88

Deferred income tax asset 385494106.13 447485034.79

Other non-current asset 50909325.73 99794665.58

Total of non-current assets 14693604868.10 14061775820.41

Total of assets 17674545340.78 16295910774.45

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

2019Annual Report

Items December 312019 December 312018

Derivative financial liabilities

Notes payable

Account payable 290657734.31 203779190.74

Advance receipts 15605094.69 12039708.01

Contract liabilities

Selling of repurchased financial assets

Deposit taking and interbank deposit

Entrusted trading of securities

Entrusted selling of securities

Employees’ wage payable 14822524.70 13122437.17

Tax payable 84257586.94 104198746.06

Other account payable 626180586.92 191254464.84

Including：Interest payable 8971576.57

Dividend payable 20020119.31 17191142.23

Fees and commissions payable

Reinsurance fee payable

Liabilities held for sales

Non-current liability due within 1 year 795861958.07 2498480000.00

Other current liability 189628.17

Total of current liability 1827575113.80 3022874546.82

Non-current liabilities：

Reserve fund for insurance contracts

Long-term loan 4640425000.00 2983040000.00

Bond payable 678124972.89

Including：preferred stock

Sustainable debt

Lease liability

Long-term payable 39369379.91 38022210.11

Long-term remuneration payable to staff

Expected liabilities

Deferred income

Deferred income tax liability 238453976.29 205672389.59

Other non-current liabilities

2019Annual Report

Items December 312019 December 312018

Total non-current liabilities 5596373329.09 3226734599.70

Total of liability 7423948442.89 6249609146.52

Owners’ equity

Share capital 2090806126.00 2090806126.00

Other equity instruments

Including：preferred stock

Sustainable debt

Capital reserves 2562570465.31 2536774965.31

Less：Shares in stock

Other comprehensive income 382193344.90 245109114.81

Special reserve

Surplus reserves 910425068.90 775402561.35

Common risk provision

Retained profit 3877431844.64 3938609136.59

Total of owner’s equity belong to the parent

company

9823426849.75 9586701904.06

Minority shareholders’ equity 427170048.14 459599723.87

Total of owners’ equity 10250596897.89 10046301627.93

Total of liabilities and owners’ equity 17674545340.78 16295910774.45

Legal Representative: Zheng Renfa

General Manager: Wang Chunhua

Person in charge of accounting：Fang Zhi

Accounting Dept Leader: Zhou Fang

2019Annual Report

2.Parent Company Balance Sheet

In RMB

Items December 312019 December 312018

Current asset：

Monetary fund 2791384501.78 2096597568.04

Transactional financial assets

Financial assets measured at fair value

with variations accounted into current

income account

Derivative financial assets

Notes receivable

Account receivable 21864051.27 18405847.15

Financing of receivables

Prepayments 1737598.88 1532057.82

Other account receivable 13435651.19 9323782.66

Including：Interest receivable 1880148.12

Dividend receivable 7205472.90 1205472.90

Inventories

Contract assets

Assets held for sales

Non-current asset due within 1 year 151637139.08 100000000.00

Other current asset

Total of current assets 2980058942.20 2225859255.67

Non-current assets：

Debt investment 537903684.98

Available for sale of financial assets 1668791594.53

Other investment on bonds

Expired investment in possess

Long-term receivable

Long term share equity investment 4789404907.17 4679309978.88

Other equity instruments investment 1835822604.77

Other non-current financial assets

Property investment 3079362.12 3326869.29

Fixed assets 6818701482.08 5292898635.00

2019Annual Report

Items December 312019 December 312018

Construction in progress 46952925.08 1060230773.10

Production physical assets

Oil & gas assets

Use right assets

Intangible assets 2533878.12 1741277.53

Development expenses

Goodwill

Long-germ expenses to be amortized

Deferred income tax asset 385296935.33 447328530.77

Other non-current asset 36901029.57 790720727.48

Total of non-current assets 14456596809.22 13944348386.58

Total of assets 17436655751.42 16170207642.25

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 129930285.56 124833335.72

Advance receipts

Contract Liabilities

Employees’ wage payable 6340740.61 5669203.37

Tax payable 8704510.83 10297144.52

Other account payable 582131356.01 142457135.79

Including：Interest payable 8373096.36

Dividend payable 20020119.31 17191142.23

Liabilities held for sales

Non-current liability due within 1 year 744589133.72 2327180000.00

Other current liability 821133339.57 977236252.44

Total of current liability 2292829366.30 3587673071.84

Non-current liabilities：

Long-term loan 4243730000.00 2731990000.00

2019Annual Report

Items December 312019 December 312018

Bond payable 678124972.89

Including：preferred stock

Sustainable debt

Lease liability

Long-term payable 39369379.91 38022210.11

Long-term remuneration payable to

staff

Expected liabilities

Deferred income

Deferred income tax liability 129978356.56 88220604.00

Other non-current liabilities

Total non-current liabilities 5091202709.36 2858232814.11

Total of liability 7384032075.66 6445905885.95

Owners’ equity

Share capital 2090806126.00 2090806126.00

Other equity instruments

Including：preferred stock

Sustainable debt

Capital reserves 2974458696.93 2948663196.93

Less：Shares in stock

Other comprehensive income 382193344.90 245109114.81

Special reserve

Surplus reserves 894580785.25 759558277.70

Retained profit 3710584722.68 3680165040.86

Total of owners’ equity 10052623675.76 9724301756.30

Total of liabilities and owners’ equity 17436655751.42 16170207642.25

Legal Representative :Zheng Renfa

General Manager: Wang Chunhua

Person in charge of accounting：Fang Zhi

Accounting Dept Leader: Zhou Fang

2019Annual Report

3.Consolidated Income statement

In RMB

Items Year 2019 Year 2018

I. Income from the key business 3057935584.43 3218694083.94

Incl：Business income 3057935584.43 3218694083.94

Interest income

Insurance fee earned

Fee and commission received

II. Total business cost 1778450564.64 1692385614.14

Incl：Business cost 1356412853.77 1279095071.32

Interest expense

Fee and commission paid

Insurance discharge payment

Net claim amount paid

Net amount of withdrawal of insurance

contract reserve

Insurance policy dividend paid

Reinsurance expenses

Business tax and surcharge 16149616.32 15987266.39

Sales expense

Administrative expense 192182962.68 183392148.68

R & D costs 1318344.01

Financial expenses 213705131.87 212592783.74

Including：Interest expense 236273431.67 237334325.27

Interest income 28663756.79 31889543.71

Add: Other income 1740540.05 1113228.32

Investment gain（“-”for loss） 508416135.27 507659683.96

Incl: investment gains from affiliates 469503736.12 463873066.20

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

2019Annual Report

Items Year 2019 Year 2018

Credit impairment loss -191096.49

Impairment loss of assets -7238195.84 1006155.42

Assets disposal income 19031900.46 66431966.75

III. Operational profit（“-”for loss） 1801244303.24 2102519504.25

Add ：Non-operational income 2965674.12 4175801.94

Less: Non-operating expense 15783456.02 8979998.49

IV. Total profit(“-”for loss) 1788426521.34 2097715307.70

Less：Income tax expenses 338841390.07 194374904.99

V. Net profit 1449585131.27 1903340402.71

(I) Classification by business

continuity

1.Net continuing operating profit 1449585131.27 1903340402.71

2.Termination of operating net profit

(II) Classification by ownership

1.Net profit attributable to the owners

of parent company

1258628101.71 1677028179.18

2.Minority shareholders’ equity 190957029.56 226312223.53

VI. Net after-tax of other

comprehensive income

126887291.61 -82154709.36

Net of profit of other comprehensive in

come attributable to owners of the pare

nt company.

126887291.61 -82154709.36

（I）Other comprehensive income

items that will not be reclassified into

gains/losses in the subsequent

accounting period

125273257.68

1.Re-measurement of defined benefit pl

ans of changes in net debt or net assets

2.Other comprehensive income under t

he equity method investee can not be re

classified into profit or loss.

3. Changes in the fair value of

investments in other equity instruments

125273257.68

4. Changes in the fair value of the

company’s credit risks

2019Annual Report

Items Year 2019 Year 2018

5.Other（II）

Other comprehensive income that will

be reclassified into profit or loss.

1614033.93 -82154709.36

1.Other comprehensive income under t

he equity method investee can be reclas

sified into profit or loss.

1614033.93 -20400286.56

2. Changes in the fair value of

investments in other debt obligations

3.Gains and losses from changes in fair

value available for sale financial assets

-61754422.80

4. Other comprehensive income arising

from the reclassification of financial

assets

5.Held-to-maturity investments reclassi

fied to gains and losses 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 fi

nancial statements

9.Other

Net of profit of other comprehensive in

come attributable to Minority

shareholders’ equity

VII. Total comprehensive income 1576472422.88 1821185693.35

Total comprehensive income

attributable to the owner of the parent

company

1385515393.32 1594873469.82

Total comprehensive income

attributable minority shareholders

190957029.56 226312223.53

VIII. Earnings per share

（I）Basic earnings per share 0.60 0.80

(II)Diluted earnings per share 0.60 0.80

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.

2019Annual Report

Legal Representative: Zheng Renfa

General Manager: Wang Chunhua

Person in charge of accounting：Fang Zhi

Accounting Dept Leader: Zhou Fang

2019Annual Report

4. Income statement of the Parent Company

In RMB

Items Year 2019 Year 2018

I. Income from the key business 1290289841.76 1407552753.41

Incl：Business cost 783821932.19 715167422.95

Business tax and surcharge 7618743.78 7835359.08

Sales expense

Administrative expense 118364771.13 110081131.38

R & D expense

Financial expenses 198989995.09 195110213.09

Including：Interest expenses 224948208.12 223418837.71

Interest income 28519844.52 31556863.82

Add：Other income 483367.72 396608.55

Investment gain（“-”for loss） 1236812045.82 1814856174.83

Including: investment gains from

affiliates

469503736.12 463873066.20

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 -7238195.84 1013982.92

Assets disposal income 276051.47 200494.75

II. Operational profit（“-”for loss） 1411827668.74 2195825887.96

Add ：Non-operational income 1856765.81 1131640.33

Less：Non -operational expenses 1427763.63 3421654.59

III. Total profit(“-”for loss) 1412256670.92 2193535873.70

Less：Income tax expenses 62031595.44 -112278439.46

IV. Net profit 1350225075.48 2305814313.16

1.Net continuing operating profit

2.Termination of operating net profit

V. Net after-tax of other

comprehensive income

126887291.61 -82154709.36

2019Annual Report

Items Year 2019 Year 2018

（I）Other comprehensive income

items that will not be reclassified into

gains/losses in the subsequent

accounting period

125273257.68

1.Re-measurement of defined benefit

plans of changes in net debt or net ass

ets

2.Other comprehensive income under

the equity method investee can not b

e reclassified into profit or loss.

3. Changes in the fair value of

investments in other equity

instruments

125273257.68

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 loss.

1614033.93 -82154709.36

1.Other comprehensive income under

the equity method investee can be re

classified into profit or loss.

1614033.93 -20400286.56

2. Changes in the fair value of

investments in other debt obligations

3.Gains and losses from changes in fa

ir value available for sale financial as

sets

-61754422.80

4. Other comprehensive income

arising from the reclassification of

financial assets

5.Held-to-maturity investments reclas

sified to gains and losses 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

2019Annual Report

Items Year 2019 Year 2018

9.Other

VI. Total comprehensive income 1477112367.09 2223659603.80

VII. Earnings per share

（I）Basic earnings per share

(II)Diluted earnings per share

Legal Representative: Zheng Renfa

General Manager: Wang Chunhua

Person in charge of accounting：Fang Zhi

Accounting Dept Leader: Zhou Fang

5. Consolidated Cash flow statement

In RMB

Items Year 2019 Year 2018

I.Cash flows from operating activities

Cash received from sales of goods or

rending of services

3106889139.80 3287727513.56

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

2019Annual Report

Items Year 2019 Year 2018

Other cash received from business

operation

62631730.01 96620294.65

Sub-total of cash inflow 3169520869.81 3384347808.21

Cash paid for purchasing of

merchandise and services

337822067.09 282911012.21

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 to staffs or paid for staffs 353578371.44 331709871.16

Taxes paid 417125959.47 778835419.88

Other cash paid for business activities 72442573.98 74905926.92

Sub-total of cash outflow from

business activities

1180968971.98 1468362230.17

Net cash generated from /used in

operating activities

1988551897.83 1915985578.04

II. Cash flow generated by investing

Cash received from investment

retrieving

Cash received as investment gains 420177836.09 414389169.98

Net cash retrieved from disposal of

fixed assets intangible assets and

other long-term assets

20026035.00 228222572.51

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

440203871.09 642611742.49

2019Annual Report

Items Year 2019 Year 2018

Cash paid for construction of fixed

assets intangible assets and

other long-term assets

823074417.73 845371278.92

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

823074417.73 845371278.92

Net cash flow generated by

investment

-382870546.64 -202759536.43

III.Cash flow generated by financing

Cash received as investment

Including: Cash received as

investment from minor shareholders

Cash received as loans 3756700000.00 1385000000.00

Other financing –related cash

received

Sub-total of cash inflow from

financing activities

3756700000.00 1385000000.00

Cash to repay debts 3017350000.00 1785260000.00

Cash paid as dividend profit or

interests

1649309548.28 1550437061.08

Including: Dividend and profit paid

by subsidiaries to minor shareholders

223386705.29 210252062.66

Other cash paid for financing

activities

791384.00

Sub-total of cash outflow due to

financing activities

4667450932.28 3335697061.08

Net cash flow generated by financing -910750932.28 -1950697061.08

IV. Influence of exchange rate

alternation on cash and cash

equivalents

-1534520.73 -2267884.63

V.Net increase of cash and cash

equivalents

693395898.18 -239738904.10

2019Annual Report

Items Year 2019 Year 2018

Add: balance of cash and cash

equivalents at the beginning of term

2123303796.32 2363042700.42

VI ..Balance of cash and cash

equivalents at the end of term

2816699694.50 2123303796.32

Legal Representative: Zheng Renfa

General Manager: Wang Chunhua

Person in charge of accounting：Fang Zhi

Accounting Dept Leader: Zhou Fang

6. Cash Flow Statement of the Parent Company

In RMB

Items Year 2019 Year 2018

I.Cash flows from operating activities

Cash received from sales of goods or

rending of services

1319322493.90 1376638206.96

Tax returned

Other cash received from business

operation

77128413.98 451033420.59

Sub-total of cash inflow 1396450907.88 1827671627.55

Cash paid for purchasing of

merchandise and services

127357495.28 129341285.43

Cash paid to staffs or paid for staffs 147473541.71 140700012.09

Taxes paid 49562069.12 51584160.49

Other cash paid for business activities 235160213.53 380472347.82

Sub-total of cash outflow from

business activities

559553319.64 702097805.83

Net cash generated from /used in

operating activities

836897588.24 1125573821.72

II. Cash flow generated by investing

Cash received from investment

retrieving

105000000.00

Cash received as investment gains 1152310903.36 1045610436.49

Net cash retrieved from disposal of

fixed assets intangible assets and

other long-term assets

4900.00 313375.00

2019Annual Report

Items Year 2019 Year 2018

Net cash received from disposal of

subsidiaries or other operational units

Other investment-related cash

received

148330950.62

Sub-total of cash inflow due to

investment activities

1257315803.36 1194254762.11

Cash paid for construction of fixed

assets intangible assets and

other long-term assets

704297796.17 803184034.08

Cash paid as investment

Net cash received from subsidiaries

and other operational units

Other cash paid for investment

activities

5000000.00

Sub-total of cash outflow due to

investment activities

704297796.17 808184034.08

Net cash flow generated by

investment

553018007.19 386070728.03

III. Cash flow generated by financing

Cash received as investment

Cash received as loans 3290000000.00 636000000.00

Other financing –related ash

received

291000000.00

Sub-total of cash inflow from

financing activities

3290000000.00 927000000.00

Cash to repay debts 2575665000.00 821880000.00

Cash paid as dividend profit or

interests

1407137756.96 1275396189.75

Other cash paid for financing

activities

791384.00 374200000.00

Sub-total of cash outflow due to

financing activities

3983594140.96 2471476189.75

Net cash flow generated by financing -693594140.96 -1544476189.75

IV. Influence of exchange rate

alternation on cash and cash

equivalents

-1534520.73 -2267884.63

2019Annual Report

Items Year 2019 Year 2018

V.Net increase of cash and cash

equivalents

694786933.74 -35099524.63

Add: balance of cash and cash

equivalents at the beginning of term

2095376368.04 2130475892.67

VI ..Balance of cash and cash

equivalents at the end of term

2790163301.78 2095376368.04

Legal Representative: Zheng Renfa

General Manager: Wang Chunhua

Person in charge of accounting：Fang Zhi

Accounting Dept Leader: Zhou Fang

2019 Annual Report

7. Consolidated Statement on Change in Owners’ Equity

Amount in this period

In RMB

Items

Year 2019

Owner’s equity Attributable to the Parent Company

Minor

shareholders’

equity

Total of owners’

equity

Share

Capital

Other Equity instrument

Capital reserves

Less:

Shares

in stock

Other

Comprehensive

Income

Speciali

zed

reserve

Surplus

reserves

Comm

on risk

provis

ion

Retained profit

Ot

her

Subtotalpreferre

d stock

Sustainable

debt

Other

I.Balance at the end of

last year

2090806

126.00

2536774965.31 245109114.81 775402561.35 3938609136.59 9586701904.06 459599723.87 10046301627.93

Add:

Change of accounting

policy

10196938.48 -9749843.30 447095.18 447095.18

Correcting of previous

errors

Merger of entities

under common control

Other

II.Balance at the

beginning of current

year

2090806

126.00

2536774965.31 255306053.29 775402561.35 3928859293.29 9587148999.24 459599723.87 10046748723.11

III.Changed in the

current year

25795500.00 126887291.61 135022507.55 -51427448.65 236277850.51 -32429675.73 203848174.78

（1）Total

comprehensive income

126887291.61 1258628101.71 1385515393.32 190957029.56 1576472422.88

2019 Annual Report

Items

Year 2019

Owner’s equity Attributable to the Parent Company

Minor

shareholders’

equity

Total of owners’

equity

Share

Capital

Other Equity instrument

Capital reserves

Less:

Shares

in stock

Other

Comprehensive

Income

Speciali

zed

reserve

Surplus

reserves

Comm

on risk

provis

ion

Retained profit

Ot

her

Subtotalpreferre

d stock

Sustainable

debt

Other（II）Investment or

decreasing of capital by

owners

1Ordinary Shares inves

ted by shareholders

2Holders of other equit

y instruments invested

capital

3．Amount of shares

paid and accounted as

owners’ equity

4．Other（III）Profit allotment 135022507.55 -1310055550.36 -1175033042.81 -223386705.29 -1398419748.10

1.Providing of surplus

reserves

135022507.55 -135022507.55

2.Providing of

common risk

provisions

3．Allotment to the

owners (or

shareholders)

-1175033042.81 -1175033042.81 -223386705.29 -1398419748.10

2019 Annual Report

Items

Year 2019

Owner’s equity Attributable to the Parent Company

Minor

shareholders’

equity

Total of owners’

equity

Share

Capital

Other Equity instrument

Capital reserves

Less:

Shares

in stock

Other

Comprehensive

Income

Speciali

zed

reserve

Surplus

reserves

Comm

on risk

provis

ion

Retained profit

Ot

her

Subtotalpreferre

d stock

Sustainable

debt

Other

4．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

5．Other comprehensive

income carry-over

retained earnings

6．Other

(V). Special reserves

2019 Annual Report

Items

Year 2019

Owner’s equity Attributable to the Parent Company

Minor

shareholders’

equity

Total of owners’

equity

Share

Capital

Other Equity instrument

Capital reserves

Less:

Shares

in stock

Other

Comprehensive

Income

Speciali

zed

reserve

Surplus

reserves

Comm

on risk

provis

ion

Retained profit

Ot

her

Subtotalpreferre

d stock

Sustainable

debt

Other

1. Provided this year

2．Used this term（VI）Other 25795500.00 25795500.00 25795500.00

IV. Balance at the end

of this term

2090806

126.00

2562570465.31 382193344.90 910425068.90 3877431844.64 9823426849.75 427170048.14 10250596897.89

2019 Annual Report

Amount in last year

In RMB

Items

Year 2018

Owner’s equity Attributable to the Parent Company

Minor

shareholders’

equity

Total of owners’

equityshare Capita

Other Equity instrument

Capital reserves

Less:

Shares

in

stock

Other

Comprehensive

Income

Speci

alized

reserv

e

Surplus

reserves

Comm

on risk

provis

ion

Retained profit

Ot

he

r

Subtotalpreferre

d stock

Sustainab

le debt

Ot

he

r

I.Balance at the end of last year

2090806126.0

0

2510069749.76 327263824.17 544821130.03 3550110288.49 9023071118.45 431039563.00 9454110681.45

Add: Change of accounting

policy

Correcting of previous errors

Merger of entities under

common control

Other

II.Balance at the beginning of

current year

2090806126.0

0

2510069749.76 327263824.17 544821130.03 3550110288.49 9023071118.45 431039563.00 9454110681.45

III.Changed in the current year 26705215.55 -82154709.36 230581431.32 388498848.10 563630785.61 28560160.87 592190946.48

（1）Total comprehensive

income

-82154709.36 1677028179.18 1594873469.82 226312223.53 1821185693.35（II）Investment or decreasing

of capital by owners

1Ordinary Shares invested by s

hareholders

2019 Annual Report

Items

Year 2018

Owner’s equity Attributable to the Parent Company

Minor

shareholders’

equity

Total of owners’

equityshare Capita

Other Equity instrument

Capital reserves

Less:

Shares

in

stock

Other

Comprehensive

Income

Speci

alized

reserv

e

Surplus

reserves

Comm

on risk

provis

ion

Retained profit

Ot

he

r

Subtotalpreferre

d stock

Sustainab

le debt

Ot

he

r

2Holders of other equity instru

ments invested capital

3．Amount of shares paid and

accounted as owners’ equity

4．Other（III）Profit allotment 230581431.32 -1288529331.08

-1057947899.7

6

-197752062.6

6

-1255699962.42

1.Providing of surplus reserves 230581431.32 -230581431.32

2.Providing of common risk

provisions

3．Allotment to the owners (or

shareholders)

-1057947899.76

-1057947899.7

6

-197752062.6

6

-1255699962.42

4．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)

2019 Annual Report

Items

Year 2018

Owner’s equity Attributable to the Parent Company

Minor

shareholders’

equity

Total of owners’

equityshare Capita

Other Equity instrument

Capital reserves

Less:

Shares

in

stock

Other

Comprehensive

Income

Speci

alized

reserv

e

Surplus

reserves

Comm

on risk

provis

ion

Retained profit

Ot

he

r

Subtotalpreferre

d stock

Sustainab

le debt

Ot

he

r

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（VI）Other 26705215.55 26705215.55 26705215.55

IV. Balance at the end of this

term

2090806126.0

0

2536774965.31 245109114.81 775402561.35 3938609136.59 9586701904.06 459599723.87 10046301627.93

Legal Representative: Zheng Renfa General Manager: Wang Chunhua Person in charge of accounting：Fang Zhi Accounting Dept Leader: Zhou Fang

2019 Annual Report

8.Statement of change in owner’s Equity of the Parent Company

Amount in this period

In RMB

Items

Year 2019

Share capital

Other Equity instrument

Capital reserves

Less:

Shares

in stock

Other

Comprehensiv

e Income

Specializ

ed

reserve

Surplus

reserves

Retained profit

Othe

r

Total of owners’

equity

preferred

stock

Sustainabl

e debt

Othe

r

I.Balance at the end of last year 2090806126.00 2948663196.93 245109114.81 759558277.70 3680165040.86 9724301756.30

Add: Change of accounting policy 10196938.48 -9749843.30 447095.18

Correcting of previous errors

Other

II.Balance at the beginning of current year 2090806126.00 2948663196.93 255306053.29 759558277.70 3670415197.56 9724748851.48

III.Changed in the current year 25795500.00 126887291.61 135022507.55 40169525.12 327874824.28

（I）Total comprehensive income 126887291.61 1350225075.48 1477112367.09

(II) Investment or decreasing of capital by

owners

1．Ordinary Shares invested by shareholders

2Holders of other equity instruments invested ca

pital

3.Amount of shares paid and accounted as

owners’ equity

4．Other（III）Profit allotment 135022507.55

-1310055550.3

6

-1175033042.81

2019 Annual Report

Items

Year 2019

Share capital

Other Equity instrument

Capital reserves

Less:

Shares

in stock

Other

Comprehensiv

e Income

Specializ

ed

reserve

Surplus

reserves

Retained profit

Othe

r

Total of owners’

equity

preferred

stock

Sustainabl

e debt

Othe

r

1.Providing of surplus reserves 135022507.55 -135022507.55

2．Allotment to the owners (or shareholders)

-1175033042.8

1

-1175033042.81

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

5．Other comprehensive income carry-over

retained earnings

6．Other

(V) Special reserves

1. Provided this year

2．Used this term（VI）Other 25795500.00 25795500.00

IV. Balance at the end of this term 2090806126.00 2974458696.93 382193344.90 894580785.25 3710584722.68 10052623675.76

2019 Annual Report

Amount in last year

In RMB

Items

Year 2018

Share Capital

Other Equity instrument

Capital reserves

Less:

Shares

in stock

Other

Comprehensive

Income

Specia

lized

reserv

e

Surplus reserves Retained profit Other

Total of owners’

equity

prefer

red

stock

Sustai

nable

debt

Other

I.Balance at the end of last year 2090806126 2921957981.38 327263824.17 528976846.38 2662880058.78 8531884836.71

Add: Change of accounting

policy

Correcting of previous errors

Other

II.Balance at the beginning of

current year

2090806126 2921957981.38 327263824.17 528976846.38 2662880058.78 8531884836.71

III.Changed in the current year 26705215.55 -82154709.36 230581431.32 1017284982.08 1192416919.59

（I）Total comprehensive income -82154709.36 2305814313.16 2223659603.80

(II) Investment or decreasing of

capital by owners

1Ordinary Shares invested by sha

reholders

2Holders of other equity instrum

ents invested capital

3.Amount of shares paid and

accounted as owners’ equity

4．Other

2019 Annual Report

Items

Year 2018

Share Capital

Other Equity instrument

Capital reserves

Less:

Shares

in stock

Other

Comprehensive

Income

Specia

lized

reserv

e

Surplus reserves Retained profit Other

Total of owners’

equity

prefer

red

stock

Sustai

nable

debt

Other（III）Profit allotment 230581431.32 -1288529331.08 -1057947899.76

1.Providing of surplus reserves 230581431.32 -230581431.32

2．Allotment to the owners (or

shareholders)

-1057947899.76 -1057947899.76

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.

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

2019 Annual Report

Items

Year 2018

Share Capital

Other Equity instrument

Capital reserves

Less:

Shares

in stock

Other

Comprehensive

Income

Specia

lized

reserv

e

Surplus reserves Retained profit Other

Total of owners’

equity

prefer

red

stock

Sustai

nable

debt

Other

1. Provided this year

2．Used this term（VI）Other 26705215.55 26705215.55

IV. Balance at the end of this

term

2090806126 2948663196.93 245109114.81 759558277.70 3680165040.86 9724301756.30

Legal Representative: Zheng Renfa General Manager: Wang Chunhua Person in charge of accounting：Fang Zhi Accounting Dept Leader: Zhou Fang

2019Annual Report

III. Company Profile

(I)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.RMB 418.2136 million was converted into 155.025 million shares. Guangdong

Expressway Co. invested cash of RMB 115 million to subscribe for 35.9375 million shares. Other legal persons

invested cash of RMB 286.992 million to subscribe for 89.685 million shares. Staff of the Company invested

RMB 87.008 million to subscribe for 27.19 million shares. The total is RMB 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 RMB 3.8) with the par value of each share being RMB 1 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.

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.

6. Pursuant to the approval of China Securities Regulatory Committee (CSRC) with ZJFZ (1997) No. 486

and No. 487 document the Company issued 100 million public shares (A shares) at the price of RMB 5.41 in term

of “payable in full on application pro-rate placing and subject to refund” with the par value of each share being

RMB 1 in January 1998.

7． In accordance with the Resolutions of the 1999 Shareholders’ General Meeting of the Company and

pursuant to the approval of Guangzhou Securities Regulatory Office under CSRC with GZZJH (2000) No. 99 and

that of CSRC with ZJGSZ (2000) No. 98 the Company offered 3 Rights for every 10 shares of 764.256249

million shares at the price of RMB 11 per Right.73822250 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

(132722 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 419039249 shares on 5-for-10 basis with the total share capital as of the end of 2000

2019Annual Report

i.e. 838078499 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 2004As approved by China Securities Regulatory Commission by document

Zheng-Jian-Gong-Si-Zi [2003]No.3 the 45000000 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 theshareholders' meeting concerning A shares. On January 26 2006 The Ministry of Commerce of PRC issued “Theapproval on share converting of Guangdong Provincial Expressway Development Co. Ltd.” to approve the shareequity relocation and transformation. On October 9 2006 according to the “Circular about implementing of shareequity 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 33355263 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 466325020 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 334008095 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.

As of December 31 2019 ， Registration capital:RMB2090806126 ， Legal representative ： Zheng

RenfaRegistration 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 December 31 2018Registered 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.(II)Organization structure and the actual controller of the Company

The State-owned assets Supervision and Administration Committee of the Guangdong Provincial people's

Government shall be the final controlling shareholder of the company.（III）The company’s main business and share Holding company

The company operated the construction of the highway construction grading roads bridges;Management fee

s and maintenance of roads bridges and car rescue maintenance cleaning concurrently with the company's busi

ness supporting motor transport warehousing operations.The Company is mainly engaged in tolling and maintenance of Guangfo Expressway Fokai Expressway and

JingzhuExpresswayGuangzhuSection investment in technological industries and provision of relevant consultatio

n while investing in Shenzhen Huiyan Expressway Co. Ltd. Guangzhou Guanghui Expressway Co. Ltd.Jingzhu

2019Annual Report

Expressway Guangzhu Co. Ltd.Guangdong Jiangzhong Expressway Co. Ltd. Zhaoqing Yuezhao Expressway C

o. Ltd.Ganzhou Kangda Expressway Ganzhou Gankang Expressway Co. Ltd.Guangdong Yueke Technology

Micro Loan Co. Ltd.Guangdong 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 April

3 2020.

As of December 312019The company's consolidated subsidiaries of total 5 companies Refer to financial

statements VIII Equity in other entities for more 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.V. Significant Accounting Policies and Accounting Estimates

Specific accounting policies and accounting estimates are indicated as follows:

According to the actual production and operation characteristics and the provisions of relevant accounting

standards for enterprises the Group has formulated a number of specific accounting policies and accounting

estimates for revenue recognition and other transactions and events. For details see "24 Revenue" in V of this

section. Please refer to "29 Significant Accounting Judgments and Estimates" in V of this section for explanations

of significant accounting judgements and estimates made by management.

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

2019Annual Report

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 operating cycle refers to the period from the time when the Group purchases assets for

processing to the time when cash or cash equivalents are realized. 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.

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

2019Annual Report

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

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 thatinvolves 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 “packagedeal” in reference to the preceding paragraphs of this section and the Notes described in 4.13 “long-terminvestment” accounting treatment if it does not belong to the “package deal” to distinguish the individualfinancial 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

2019Annual Report

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 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

2019Annual Report

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

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

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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.

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 ① those

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 ③

available-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

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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

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.If there are foreign currency monetary items that constitute a net investment in overseas operations the

exchange differences arising from exchange rate changes in the consolidated financial statements shall be

recognized as other comprehensive income as "translation differences in foreign currency statements"; The

disposal of overseas operations shall be included in the profits and losses of the current period.

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

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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

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

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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; ②The 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; ③The 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

degree for continued involvement of financial assets transferred and relevant liabilities shall be recognized

correspondingly. west bank 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.

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(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

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

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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

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

the related party's receivables the 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

①Account receivable

In regard to receivables without significant financing components the Company shall measure loss

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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 （%）

Within 1 year（Including 1 year） 0

1-2 years 10

2-3 years 30

3-4 years 50

4-5 years 90

Over 5 years 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

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.

Combination of deposit quality assurance fund and deposit and reserve fund combination except for

objective evidence that the Group will not be able to recover the amount according to the original terms of

receivables will not normally be accrued for bad debt reserves. The measurement method of bad debt reserves for

other combinations is aging analysis and the accrual proportion is the same as accounts receivable.

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

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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.

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

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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

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

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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

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

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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

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

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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

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

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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

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.Type Depreciation method

Expected useful

life(Year)

Residual

rate（%）

Annual depreciation

rate(%)

Highway and bridge：

Including：Guangfo Expressway Working flow basis 28 years 0%

Fokai Expressway-Xiebian to Sanbao

Section

Working flow basis 40 years 0%

Fokai Expressway-Sanbao to Shuikou

Section

Working flow basis 30 years 0%

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%

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Electric Equipment and other The straight-line method 5-15 years 3%-10% 6%-19.4%

(2) 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 assetsplease refer to “Long-term Assets Impairment in Article 20 of Important Accounting Policies and Accounting

Estimates in Notes 5 of Financial Statements”.

（3）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.

（4） 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 5.20 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

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

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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.See Note 5.20 for details of assessment for impairment of construction in progress and impairment

allowance for construction in progress.

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 5.20 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

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;

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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.

（3） Provision for the depreciation of value of the intangible assets

For the impairment test method and the impairment provision withdrawing method of the Intangible assetsplease refer to “Long-term Assets Impairment of Important Accounting Policies and Accounting Estimates inNotes V(20)”.

20.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

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.

21. Long-term amortizable expenses

An item of deferred charges is an expense incurred which brings economic benefits to the Company for a

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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.

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.

（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

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

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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 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

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

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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

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

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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 here above

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 here above 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

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 in profit

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

2019Annual Report

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.Lease

(1) Accounting methods for operating leases

The Group records the operation lease business as a lessee

Rental expenditures for operating leases are included in the relevant asset costs or current profits and losses

on a straight-line basis in each period of the lease term. Initial direct expenses are included in current profits and

losses. Contingent rentals are included in current profits and losses when they actually occur.The Group records the operation lease business as a lessor

Rental income from operating leases is recognized as current profits and losses on a straight-line basis during

each period of the lease term. The initial direct expenses with large amount shall be capitalized when incurred and

shall be included in the current profits and losses during the whole lease period on the same basis as the

recognized rental income; Other initial direct expenses with smaller amount shall be included in current profits

and losses when incurred. Contingent rentals are included in current profits and losses when they actually occur.

(2) Accounting methods for financial leasing

The Group records the financial lease business as a lessee

On the start date of the lease period the lower of the fair value of the leased asset and the present value of

the minimum lease payment on the lease start date is taken as the recorded value of the leased asset the minimum

lease payment is taken as the recorded value of the long-term payables and the difference is taken as the

unrecognized financing expense. In addition the initial direct expenses that can be attributed to the lease items

incurred during the lease negotiation and signing of the lease contract are also included in the value of the leased

assets. The balance of the minimum lease payment after deducting unrecognized financing expenses is listed as

long-term liabilities and long-term liabilities due within one year respectively.Unrecognized financing expenses shall be calculated and recognized by the effective interest rate method

during the lease period. Contingent rentals are included in current profits and losses when they actually occur.The Group records the financial lease business as a lessor?

On the starting date of the lease period the sum of the minimum lease receipts and the initial direct expenses

on the lease start date shall be taken as the entry value of the finance lease receivables and the unsecured residual

value shall be recorded at the same time; The difference between the sum of the minimum lease receipts initial

direct expenses and unsecured residual value and its present value shall be recognized as unrealized financing

income. The balance of finance lease receivables after deducting unrealized finance income is listed as long-term

creditor's rights and long-term creditor's rights due within one year respectively.Unrealized financing income is calculated and recognized by the effective interest rate method during the

lease period. Contingent rentals are included in current profits and losses when they actually occur.

2019Annual Report

28.Change of main accounting policies and estimations

(1)Change of main accounting policies

√ Applicable □ Not applicable

Contents and causes for changes of accounting

policy

Approval

procedures

Remarks

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.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

2019Annual Report

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

financial assets

Measured at fair value

and included in other

comprehensive

benefits (equity

instruments)

1668791594.53 Investment in

other equity

instruments

Measured at fair value

and included in other

comprehensive

earnings

1668791594.53

long-term equity

investments

Cost method/equity

method

3145644970.07 long-term equity

investments

Cost method/equity

method

3146092065.25

b. Impact on the financial statement

December 31 2018 (before change) January 1 2019 (after the change)

Items Measurement

category

Book value Items Measurement

category

Book value

Available-for-sales

financial assets

Measured at fair

value and included in

other comprehensive

benefits (equity

instruments)

1668791594.53Investment in other

equity instruments

Measured at fair

value and included

in other

comprehensive

earnings

1668791594.53

long-term equity

investments

Cost method/equity

method

4679309978.88long-term equity

investments

Cost

method/equity

method

4679757074.06

Other non-current

assets

amortized cost 692903684.98 Creditor's right

investment

amortized cost 692903684.98

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

(before change) Re-Class

Re-measurement January 12019

(after change)

Measured at fair value and included in

other comprehensive earnings:

Available-for-sale financial assets

(original guidelines)

1668791594.53

Less transfer to other creditor's rights

investment

Less: transfer to other non-current

financial assets

Less: transfer to other equity

instruments

1668791594.53

Balances shown in accordance with the

new financial instrument guidelines

Investment in other equity instruments 1668791594.53

2019Annual Report

Add: transfer from available-for-sale

financial assets (original criteria)

1668791594.53

Re-measurement: re-measurement at

fair value

Balances shown in accordance with the

new financial instrument guidelines

1668791594.53

b. Impact on the Company's financial statements

Items December 31 2018

(before change)

Re-Class Re-measurement January 12019

(after change)

Amortized cost

Other non-current assets (original criteria) 692903684.98

Less: transfer to creditor's rights

investment

692903684.98

Balances shown in accordance with the

new financial instrument guidelines

Creditor's rights investment 692903684.98

Add: transfer from other non-current

assets (original criteria)

692903684.98

Re-measurement: expected credit loss

preparation

Balances shown in accordance with the

new financial instrument guidelines

692903684.98

Measured at fair value and included in

other comprehensive earnings:

Available-for-sale financial assets

(original guidelines)

1668791594.53

Less: transfer to other creditor's rights

investment

Less: transfer to other non-current

financial assets

Less: transfer to other equity instruments 1668791594.53

Balances shown in accordance with the

new financial instrument guidelines

Investment in other equity instruments 1668791594.53

Add ： transfer from available-for-sale

financial assets (original criteria)

1668791594.53

Re-measurement: re-measurement at fair

value

Balances shown in accordance with the

new financial instrument guidelines

1668791594.53

C. Financial assets impairment provision adjustment table on the first implementation date

2019Annual Report

a. Impact on consolidated statements

Measurement category December 31 2018

(before change)

Re-Class Re-measurement January 1 2019

(after change)

Measured at fair value and

included in other comprehensive

benefits

Provision for impairment of

available-for-sale financial assets

37020000.00 -37020000.00

Investment in other equity

instruments

37020000.00 37020000.00

b. Impact on the Company's financial statements

Measurement category December 31 2018

(before change)

Re-Class Re-measurement January 1 2019

(after change)

Measured at fair value and

included in other comprehensive

benefits (debt instruments)

Provision for impairment of

available-for-sale financial assets

7020000.00 -7020000.00

Investment in other equity

instruments

7020000.00 7020000.00

D. Impact on retained earnings and other comprehensive earnings as of January 1 2019

December 31 2018 Consolidated retained

earnings

Consolidated surplus

reserve

Consolidation of other

comprehensive benefits

December 312018 3938609136.59 245109114.81

1. Re-measurement of long-term equity

investment

-9749843.30 10196938.48

January 1 2019 3928859293.29 255306053.29

(1）Other accounting policy changes

In April and September 2019 the Ministry of Finance respectively issued the Notice on Revising and Issuing

the Format of General Enterprise Financial Statements for 2019 (CK [2019] No.6) and the Notice on Revising and

Issuing the Format of Consolidated Financial Statements (2019 Edition) (CK [2019] No.16) revising the format

of general enterprise financial statements and consolidated financial statements. The Group has prepared financial

statements in accordance with the format of general enterprise financial statements and consolidated financial

statements according to its requirements and restated the comparative statements retroactively according to the

above presentation requirements.

A、Impact on consolidated statements

Items

December 31 2018

(before change)

Re-Class

January 12019

(after change)

Other payables 191254464.84 -7875376.57 183379088.27

Including: interest payable 8971576.57 -8971576.57

2019Annual Report

Non current liabilities due within one

year

2498480000.00 7875376.57 2506355376.57

B、Impact on the company's financial statements

Items

December 31 2018

(before change)

Re-Class

January 12019

(after change)

Other receivables 9323782.66 -1880148.12 7443634.54

Including: interest receivable 1880148.12 -1880148.12

Non current assets due within one year 100000000.00 1880148.12 101880148.12

Other payables 142457135.79 -7276896.36 135180239.43

Including:interest payable 8373096.36 -8373096.36

Non current liabilities due within one year 2327180000.00 7276896.36 2334456896.36

(2）Change 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 from year 2019

√ Applicable □Not applicable

Consolidated balance sheet

In RMB

Items December 312018 January 12019

Amount involved in the

adjustment

Current asset：

Monetary fund 2124524996.32 2124524996.32

Settlement provision

Outgoing call loan

Transactional financial

assets

Financial assets

measured at fair value with

variations accounted into

current income account

2019Annual Report

Items December 312018 January 12019

Amount involved in the

adjustment

Derivative financial

assets

Notes receivable

Account receivable 91076995.07 91076995.07

Financing of

receivables

Prepayments 1912943.40 1912943.40

Insurance receivable

Reinsurance receivable

Provisions of Reinsurance

contracts receivable

Other account receivable 16487256.02 16487256.02

Including：Interest

receivable

Dividend receivable 1205472.90 1205472.90

Repurchasing of financial

assets

Inventories 81017.91 81017.91

Contract assets

Assets held for sales

Non-current asset due

within 1 year

51745.32 51745.32

Other current asset

Total of current assets 2234134954.04 2234134954.04

Non-current assets：

Loans and payment on

other’s behalf disbursed

Debt investment

Available for sale of

financial assets

1668791594.53 -1668791594.53

Other investment on

bonds

Expired investment in

possess

Long-term receivable

Long term share equity

investment

3145644970.07 3146092065.25 447095.18

2019Annual Report

Items December 312018 January 12019

Amount involved in the

adjustment

Other equity instruments

investment

1668791594.53 1668791594.53

Other non-current financial

assets

Property investment 3579007.54 3579007.54

Fixed assets 7600046319.91 7600046319.91

Construction in progress 1089473425.63 1089473425.63

Production physical

assets

Oil & gas assets

Use right assets

Intangible assets 5739020.48 5739020.48

Development expenses

Goodwill

Long-germ expenses to be

amortized

1221781.88 1221781.88

Deferred income tax

asset

447485034.79 447485034.79

Other non-current asset 99794665.58 99794665.58

Total of non-current assets 14061775820.41 14062222915.59 447095.18

Total of assets 16295910774.45 16296357869.63 447095.18

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 203779190.74 203779190.74

Advance receipts 12039708.01 12039708.01

2019Annual Report

Items December 312018 January 12019

Amount involved in the

adjustment

Contract liabilities

Selling of repurchased

financial assets

Deposit taking and

interbank deposit

Entrusted trading of

securities

Entrusted selling of

securities

Employees’ wage

payable

13122437.17 13122437.17

Tax payable 104198746.06 104198746.06

Other account payable 191254464.84 183379088.27 -7875376.57

Including：Interest

payable

8971576.57 -8971576.57

Dividend payable 17191142.23 17191142.23

Fees and commissions

payable

Reinsurance fee

payable

Liabilities held for sales

Non-current liability due

within 1 year

2498480000.00 2506355376.57 7875376.57

Other current liability

Total of current liability 3022874546.82 3022874546.82

Non-current liabilities：

Reserve fund for insurance

contracts

Long-term loan 2983040000.00 2983040000.00

Bond payable

Including：preferred stock

Sustainable debt

Lease liability

Long-term payable 38022210.11 38022210.11

2019Annual Report

Items December 312018 January 12019

Amount involved in the

adjustment

Long-term remuneration

payable to staff

Expected liabilities

Deferred income

Deferred income tax

liability

205672389.59 205672389.59

Other non-current

liabilities

Total non-current liabilities 3226734599.70 3226734599.70

Total of liability 6249609146.52 6249609146.52

Owners’ equity

Share capital 2090806126.00 2090806126.00

Other equity instruments

Including：preferred stock

Sustainable debt

Capital reserves 2536774965.31 2536774965.31

Less：Shares in stock

Other comprehensive

income

245109114.81 255306053.29 10196938.48

Special reserve

Surplus reserves 775402561.35 775402561.35

Common risk provision

Retained profit 3938609136.59 3928859293.29 -9749843.30

Total of owner’s equity

belong to the parent

company

9586701904.06 9587148999.24 447095.18

Minority shareholders’

equity

459599723.87 459599723.87

Total of owners’ equity 10046301627.93 10046748723.11 447095.18

Total of liabilities and

owners’ equity

16295910774.45 16296357869.63 447095.18

Adjustment statement

2019Annual Report

Parent Company Balance Sheet

In RMB

Items December 312018 January 12019

Amount involved in the

adjustment

Current asset：

Monetary fund 2096597568.04 2096597568.04

Transactional financial

assets

Financial assets

measured at fair value with

variations accounted into

current income account

Derivative financial

assets

Notes receivable

Account receivable 18405847.15 18405847.15

Financing of receivables

Prepayments 1532057.82 1532057.82

Other account receivable 9323782.66 7443634.54 -1880148.12

Including：Interest

receivable

1880148.12 -1880148.12

Dividend receivable 1205472.90 1205472.90

Inventories

Contract assets

Assets held for sales

Non-current asset due

within 1 year

100000000.00 101880148.12 1880148.12

Other current asset

Total of current assets 2225859255.67 2225859255.67

Non-current assets：

Debt investment 692903684.98 692903684.98

Available for sale of

financial assets

1668791594.53 -1668791594.53

Other investment on bonds

Expired investment in

possess

Long-term receivable

2019Annual Report

Items December 312018 January 12019

Amount involved in the

adjustment

Long term share equity

investment

4679309978.88 4679757074.06 447095.18

Other equity instruments

investment

1668791594.53 1668791594.53

Other non-current financial

assets

Property investment 3326869.29 3326869.29

Fixed assets 5292898635.00 5292898635.00

Construction in

progress

1060230773.10 1060230773.10

Production physical assets

Oil & gas assets

Use right assets

Intangible assets 1741277.53 1741277.53

Development expenses

Goodwill

Long-germ expenses to

be amortized

Deferred income tax

asset

447328530.77 447328530.77

Other non-current asset 790720727.48 97817042.50 -692903684.98

Total of non-current assets 13944348386.58 13944795481.76 447095.18

Total of assets 16170207642.25 16170654737.43 447095.18

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 124833335.72 124833335.72

Advance receipts

2019Annual Report

Items December 312018 January 12019

Amount involved in the

adjustment

Contract Liabilities

Employees’ wage

payable

5669203.37 5669203.37

Tax payable 10297144.52 10297144.52

Other account payable 142457135.79 135180239.43 7276896.36

Including：Interest

payable

8373096.36 -8373096.36

Dividend payable 17191142.23 17191142.23

Liabilities held for sales

Non-current liability due

within 1 year

2327180000.00 2334456896.36 7276896.36

Other current liability 977236252.44 977236252.44

Total of current liability 3587673071.84 3587673071.84

Non-current liabilities：

Long-term loan 2731990000.00 2731990000.00

Bond payable

Including：preferred stock

Sustainable debt

Lease liability

Long-term payable 38022210.11 38022210.11

Long-term remuneration

payable to staff

Expected liabilities

Deferred income

Deferred income tax

liability

88220604.00 88220604.00

Other non-current

liabilities

Total non-current liabilities 2858232814.11 2858232814.11

Total of liability 6445905885.95 6445905885.95

Owners’ equity

Share capital 2090806126.00 2090806126.00

Other equity instruments

2019Annual Report

Items December 312018 January 12019

Amount involved in the

adjustment

Including：preferred

stock

Sustainable debt

Capital reserves 2948663196.93 2948663196.93

Less：Shares in stock

Other comprehensive

income

245109114.81 255306053.29 10196938.48

Special reserve

Surplus reserves 759558277.70 759558277.70

Retained profit 3680165040.86 3670415197.56 -9749843.30

Total of owners’ equity 9724301756.30 9724748851.48 447095.18

Total of liabilities and

owners’ equity

16170207642.25 16170654737.43 447095.18

Note

（4）Retrospective Restatement of Previous Comparative Data due to the First Execution of any New Standards

Governing Financial Instruments or Leases from year 2019

□ Applicable √ Not applicable

29. 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

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

2019Annual Report

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) Fair value of financial instruments

For financial instruments with no active trading markets the Group determines their fair values through

various valuation methods. These valuation methods include discounted cash flow model analysis etc. During the

valuation the Group needs to estimate the future cash flow credit risk market volatility and correlation and

select an appropriate discount rate. These related assumptions are uncertain and their changes will affect the fair

value of financial instruments. If there is a public quotation for equity instrument investment or contract the

Group does not use cost as the best estimate of its fair value.

（3）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.

（4）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.

（5）Deferred tax assets

All unutilized tax loss is recognized as deferred tax assets to the extent it is probable that taxable profit will

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.

2019Annual Report

VI. Taxation

1. Major category of taxes and tax rates

Tax category Tax basis Tax rate

VAT Taxable income 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%

2.Preferential tax

According to the Notice of the Ministry of Finance and the State Administration of Taxation on Fully

Opening the Pilot of Changing Business Tax to VAT (CS [2016] No.36) the qualified contract energy

management services of the subsidiary Guangdong High-speed Technology Investment Co. Ltd. are exempt from

VAT.

According to the Notice of the Ministry of Finance and the State Administration of Taxation on Promoting

the Development of Value-added Tax Business Tax and Enterprise Income Tax Policies for Energy-Saving

Service Industries (CK [2010] No.110) if the contract energy management project implemented by the subsidiary

Guangdong Expressway Technology Investment Co. Ltd. complies with the relevant provisions of the enterprise

income tax law the enterprise income tax shall be exempted from the first to the third year from the tax year in

which the project obtains the first production and operation income and the enterprise income tax shall be halved

from the fourth to the sixth year according to the statutory tax rate of 25%. This year is the sixth year for the

entitlement of tax concessions.

3.Other

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.VII. Notes to the major items of consolidated financial statement

1.Monetary Capital

In RMB

Items Amount in year-end Balance Year-beginning

Cash 20587.32 53211.49

Bank deposit 2817384626.65 2123807010.07

Other 515680.53 664774.76

Total 2817920894.50 2124524996.32

2019Annual Report

Other note

Note：On December 312019The balance of restricted bank deposits at the end of the period was 1221200.00

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.

2019 Annual Report

2. Account receivable

1.Classification account receivables.

In RMB

Category

Amount in year-end Balance Year-beginning

Book Balance Bad debt provision

Book value

Proportion(%)

Book Balance Bad debt provision

Book valueAmount Proportio

n(%)

Amount Amount Amount Proportio

n(%)

Amount Proportio

n(%)

Of which：

Accrual of bad debt provision by

portfolio

126698717.95 100.00% 1354993.29 1.07% 125343724.66 92253875.06 100.00% 1176879.99 1.28% 91076995.07

Of which：

Aging portfolio 126698717.95 100.00% 1354993.29 1.07% 125343724.66 92253875.06 100.00% 1176879.99 1.28% 91076995.07

Total 126698717.95 100.00% 1354993.29 1.07% 125343724.66 92253875.06 100.00% 1176879.99 1.28% 91076995.07

2019Annual Report

Accrual of bad debt provision by portfolio：Accrual of bad debt provision by aging portfolio

In RMB 元

Name

Balance in year-end

Receivable accounts Bad debt provision Withdrawal proportion

Within 1 year 116958715.56

1-2 years 8993839.40 899383.94 10.00%

2-3 years 75000.00 22500.00 30.00%

3-4 years 439843.39 219921.70 50.00%

4-5 years 181319.60 163187.65 90.00%

Over 5 years 50000.00 50000.00 100.00%

Total 126698717.95 1354993.29 --

Disclosure by aging

In RMB

Aging Book balance

Within 1 year（Including 1 year） 116958715.56

1-2 years 8993839.40

2-3 years 75000.00

Over 3 years 671162.99

3-4 years 439843.39

4-5 years 181319.60

Over 5 years 50000.00

Total 126698717.95

(2) Accounts receivable withdraw reversed or collected during the reporting period

The withdrawal amount of the bad debt provision：

In RMB

Category Opening balance

Amount of change in the current period

Closing balance

Accrual

Reversed or

collected amount

Write-off

Aging portfolio 1176879.99 178113.30 1354993.29

Total 1176879.99 178113.30 1354993.29

（3）The ending balance of other receivables owed by the imputation of the top five parties

In RMB

2019Annual Report

Name Amount Proportion(%) Bad debt provision

Guangdong Union Electronic Services Co.Ltd.

57172014.20 45.12%

Guangdong Humen Bridge Co. Ltd. 16693904.73 13.18%

Guangzhou Lingte Electronic cO. lTD. 8505000.00 6.71%

Shandong Boan Intelligent Technology

Co. Ltd

7409966.25 5.85% 740996.63

Guangdong Jingzhu Expressway Guangzhu

North Section Co. Ltd.

6168200.00 4.87%

Total 95949085.18 75.73%

3. Prepayments

（1）Age analysis

In RMB

Age

Balance in year-end Balance Year-beginning

Amount Proportion（%） Amount Proportion（%）

Within 1 year 10724508.41 98.44% 1708205.40 89.30%

Over 3 years 169738.00 1.56% 204738.00 10.70%

Total 10894246.41 -- 1912943.40 --

(2) Top 5 of the closing balance of the prepayment collected according to the prepayment target

Name Amount Proportion %

Third Institute of Public Security 8230088.50 75.55

Guangdong Litong Real estate Investment Co. Ltd. 735092.38 6.75

China Pacific Property Insurance Co. Ltd. Guangdong Branch 598831.50 5.50

China Ping An Property Insurance Co. Ltd. Guangdong Branch 534184.50 4.90

Guangdong Transmission & Transformation Engineering

Company

235695.00 2.16

Total 10333891.88 94.86

4.Other accounts receivable

In RMB

Items Balance in year-end Balance Year-beginning

Dividend receivable 7205472.90 1205472.90

2019Annual Report

Other receivable 19412705.67 15281783.12

Total 26618178.57 16487256.02

（2）Dividend receivable

1)Dividend receivable

In RMB

Items Balance in year-end Balance Year-beginning

Guangdong Radio and Television Networks investment

No.1 Limited partnership enterprise

1205472.90 1205472.90

Guangdong Yueke Technology Petty Loan Co. Ltd. 6000000.00

Total 7205472.90 1205472.90

（2）Significant dividend receivable aged over 1 year

Nil

3）Bad-debt provision

□Applicable √ Not applicable

Other note：

（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

securities transactions

47528056.18 47528056.18

Cash deposit 10881564.39 7813222.94

Gelin Enze Account 4007679.91 4007679.91

Petty cash 3580634.57 3800100.00

Transfer of long-term assets receivable 935820.00

Other 4043898.89 3684689.17

Less：Bad-debt provision -51564948.27 -51551965.08

Total 19412705.67 15281783.12

Disclosure by aging

2019Annual Report

In RMB

Aging Closing balance

Within 1 year 10848432.72

1-2 years 3059557.82

2-3 years 2325969.50

3-4 years 978158.33

4-5 years 540755.98

Over 5 years 53224779.59

Subtotal 70977653.94

Less：Bad-debt provision 51564948.27

Total 19412705.67

3）The withdrawal amount of the bad debt provision：

In RMB

Bad Debt Reserves

Stage 1 Stage 2 Stage 3

TotalExpected credit

losses over the next

12 months

Expected credit loss over

life (no credit

impairment)

Expected credit losses for

the entire duration (credit

impairment occurred)

Balance as at January

1 2019

16228.99 51535736.09 51551965.08

Balance as at January

1 2019 in current

—— —— —— ——

Provision in the current

period

12983.19 12983.19

Balance as at

December 31 2019

29212.18 51535736.09 51564948.27

Changes in significant book balances for loss preparation current period

□ Applicable √ Not applicable

4) Accounts receivable withdraw reversed or collected during the reporting period

The withdrawal amount of the bad debt provision：

In RMB

Category

Opening

balance

Amount of change in the current period

Closing balance

Accrual

Reversed or

collected amount

Write - off

2019Annual Report

Category

Opening

balance

Amount of change in the current period

Closing balance

Accrual

Reversed or

collected amount

Write - off

Financial assets with

significantly

different credit risks

51535736.09 51535736.09

Other Portfolio 16228.99 12983.19 29212.18

Total 51551965.08 12983.19 51564948.27

Note 1:The parent company once paid 33683774.79 yuan into Kunlun Securities Co. Ltd Guangdong

Expressway technology investment Co. Ltd once paid 18000000.00 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 710349.92

yuan Credit was Recovered in 2008 The 977527.77 yuan credit was recovered in 2011 The 652012.00 yuan

Credit was recovered in 2014 The 1815828.92 yuan Credit was recovered in 2018 and the provision for had

debt is deducted.Note2：Guangdong Expressway Technology investment Co. Ltd .should charge Beijing Gelin Enze Organic

Fertilizer Co. Ltd.for 12220079.91 yuan. Eight millions of it was entrust loan three million was temporary

borrowing 12400.00 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 12220079.91yuan provision. The company in 2014 recovered arrears of 8000000.00

yuan rushed back to the provision for bad debts and write off uncollected interest entrusted loans according to tTh

e settlement agreement of 212400.00 yuan.

5) Top 5 of the closing balance of the other accounts receivable collected according to the arrears party

In RMB

Name Nature Closing balance Aging

Proportion of

the total year

end balance of

the accounts

receivable(%)

Closing balance of

bad debt provision

Kunlun Securities

Co.Ltd

Securities trading set

tlement funds

47528056.18 Over 5 years 66.96% 47528056.18

Beijing Gelin

Enze

Current account 4007679.91 Over 5 years 5.65% 4007679.91

Shandong Boan

Intelligent

Technology Co.Ltd.

Deposit 1725155.40 1-2 years 2.43%

2019Annual Report

Guangdong Litong

Real Estates

Investment Co.Ltd.

Deposit 1505864.00 2-3 years 2.12%

Guangdong

Guanghui

Expressway Co.

Ltd.

Deposit 1462587.90 1-5 years 2.06%

Total -- 56229343.39 -- 79.22% 51535736.09

5. Inventories

Whether implemented new revenue guidelines?

□ Yes √No

（1）Category of Inventory

In RMB

Items

Closing book balance Opening book balance

Book balance

Provision for

inventory

impairment

Book value Book balance

Provision for

inventory

impairment

Book value

Raw materials 111683.22 111683.22 81017.91 81017.91

Total 111683.22 111683.22 81017.91 81017.91

(2)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

Pre-payment of business tax before

replacing business tax with VAT

51745.32 51745.32

Total 51745.32 51745.32

2019 Annual Report

7. Long-term equity investment In RMB

Investees Opening balance

Increase/decrease

Closing balance

Closing

balance

of

impairme

nt

provision

Addit

ional

invest

ment

Negative

investmen

t

Investment profit

and loss

recognized under

the equity method

Adjustme

nt of other

comprehe

nsive

income

Changes of

other equity

Cash bonus or

profits

announced to

issue

Withdraw

al of

impairme

nt

provision

O

th

er

I. Joint venture

Guangdong Guanghui

Expressway Co. Ltd.

992521223.58 300795505.08 25795500.00 270638655.14 1048473573.52

Subtotal 992521223.58 300795505.08 25795500.00 270638655.14 1048473573.52

2. Affiliated Company

Zhaoqing Yuezhao Highway Co. Ltd. 307172338.10 54157587.00 53207865.41 308122059.69

Shenzhen Huiyan Expressway 230553756.87 32128670.57 262682427.44

Guangdong Jiangzhong Expressway

Co.. Ltd.

175324643.76 17985293.11 13818419.89 179491516.98

Ganzhou Kangda Expressway 219985018.52 35748508.34 21000000.00 234733526.86

Gan Ganzhou Gankang Expressway 209995910.71 6376740.19 2700000.00 213672650.90

Guangdong Yueke Technology Petty

Loan Co. Ltd.

219693558.27 943777.18 6000000.00 214637335.45

Guoyuan Securities Co. Ltd. 790845615.44 21367654.65 1614033.93 19900496.50 793926807.52

Subtotal 2153570841.67 168708231.04 1614033.93 116626781.80 2207266324.84

Total 3146092065.25 469503736.12 1614033.93 25795500.00 387265436.94 3255739898.36

Other note

2019Annual Report

8.Other Equity instrument investment

In RMB

Items Closing balance Opening balance

Guangle Expressway Co. Ltd. 748348301.73 748348301.73

China Everbright Bank Co. Ltd. 50000000.00 50000000.00

Huaxia Securities Co. Ltd.（Notes1） 1037474303.04 870443292.80

Huazheng Asset Management Co. Ltd.（Notes2）

Kunlun Securities Co. Ltd.（Notes3）

Total 1835822604.77 1668791594.53

Breakdown disclosure of investment in non-tradable equity instruments in the current period

In RMB

Items

Dividend

income

recognized

Cumulative

gain

Cumulative

loss

Amount of

other

consolidated

income

transferred

to retained

earnings

Reasons for

designation as

measured at fair

value and changes

included in other

comprehensive

income

Reasons

for other

consolidate

d income

transferred

to retained

earnings

Guangle

Expressway Co.

Ltd.Non-transactional

purpose for

shareholding

Guangdong Radio

and Television

Networks

investment No.1

Limited partnership

enterprise

1036353.17 7362129.13

Non-transactional

purpose for

shareholding

China Everbright

Bank Co. Ltd.

37876045.98 519913426.24

Non-transactional

purpose for

shareholding

Huaxia Securities

Co. Ltd.

5400000.00

Non-transactional

purpose for

shareholding

Huazheng Asset

Management Co.Ltd.

1620000.00

Non-transactional

purpose for

shareholding

2019Annual Report

Kunlun Securities

Co. Ltd.

30000000.00

Non-transactional

purpose for

shareholding

Total 38912399.15 527275555.37 37020000.00

Other note：

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.

9. Investment property

(1) Investment property adopted the cost measurement mode

√ Applicable □Not applicable

In RMB

Items

Houses and

buildings

Land use right

Construction in

progress

Total

I. Original value

1.Opening balance 12664698.25 2971831.10 15636529.35

2.Increased amount of the period

（1）Outsourcing

(2)Inventory Fixed assets and Construction project

into

(3) )Increased of Enterprise consolidation

3.Decreased amount of the period

2019Annual Report

Items

Houses and

buildings

Land use right

Construction in

progress

Total

（1）Disposal

（2）Other Out

4.Closing balance 12664698.25 2971831.10 15636529.35

II.Accumulated depreciation accumulated

amortization

1.Opening balance 10373153.97 1684367.84 12057521.81

2.Increased amount of the period 173937.81 73569.36 247507.17

(1)Withdrawal or amortization 173937.81 73569.36 247507.17

3.Decreased amount of the period

（1）Disposal

（2）Other Out

4.Closing balance 10547091.78 1757937.20 12305028.98

III. Impairment provision

1.Opening balance

2.Increased amount of the period

（1）Withdrawal

3.Decreased amount of the period

（1）Disposal

（2）Other Out

4.Closing balance

IV. Book value

1.Closing book value 2117606.47 1213893.90 3331500.37

2.Opening book 2291544.28 1287463.26 3579007.54

2019Annual Report

(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

Houses and Building 1440295.86 Transportation and other ancillary facilities Not accreditation

Total 1440295.86

Other note

10. Fixed assets

In RMB

Items Year-end balance Year-beginning balance

Fixed assets 8925700473.65 7600046319.91

Total 8925700473.65 7600046319.91

2019 Annual Report

(1) List of fixed assets

In RMB

Items

Guangfo

Expressway

Fokai Expressway

Jingzhu

Expressway

Guangzhu section

House and

buildings

Machinery

equipment

Transportation

equipment

Electricity

equipment and

other

Total

I. Original price

1.Opening balance 1460270190.66 8988726518.80 4798270209.11 342597957.59 122698641.11 48745472.07 659423683.35 16420732672.69

2.Increased amount of the period 1946332090.86 17886407.34 22600884.86 139103522.87 2018560.77 57478635.10 2185420101.80

（1）Purchase 189000.00 2018560.77 14665709.97 16873270.74

（2）Transfer of project under

construction

1946327170.86 17886407.34 12127161.89 138641218.60 48198313.24 2163180271.93

(3)Increased of Enterprise

consolidation

（4）Other 4920.00 10473722.97 273304.27 -5385388.11 5366559.13

3.Decreased amount of the period 3005947.81 1241560.00 2120018.00 58789027.81 65156553.62

（1）Disposal or scrap 3005947.81 1241560.00 2120018.00 56517622.81 62885148.62

（2）Other Out 2271405.00 2271405.00

4.Closing balance 1460270190.66 10935058609.66 4816156616.45 362192894.64 260560603.98 48644014.84 658113290.64 18540996220.87

II. Accumulated depreciation

1.Opening balance 1460270190.66 3940158837.04 2625645410.16 232333164.38 71147743.72 38419504.01 452711502.81 8820686352.78

2.Increased amount of the period 554046378.54 215994175.35 22593138.77 14846035.69 2679865.44 30106584.89 840266178.68

（1）Withdrawal 554046378.54 215994175.35 14107525.37 14773299.92 2679865.44 38664934.06 840266178.68

（2）Other 8485613.40 72735.77 -8558349.17

2019 Annual Report

Items

Guangfo

Expressway

Fokai Expressway

Jingzhu

Expressway

Guangzhu section

House and

buildings

Machinery

equipment

Transportation

equipment

Electricity

equipment and

other

Total

3.Decreased amount of the period 2042517.39 1179482.00 1924922.05 47748058.64 52894980.08

（1）Disposal or scrap 2042517.39 1179482.00 1924922.05 47748058.64 52894980.08

4.Closing balance 1460270190.66 4494205215.58 2841639585.51 252883785.76 84814297.41 39174447.40 435070029.06 9608057551.38

II. Accumulated depreciation

1.Opening balance

2.Increased amount of the period 7238195.84 7238195.84

（1）Withdrawal 7238195.84 7238195.84

3.Decreased amount of the period

（1）Disposal or scrap

4.Closing balance 7238195.84 7238195.84

IV. Book value

1.Closing book value 6440853394.08 1974517030.94 109309108.88 175746306.57 9469567.44 215805065.74 8925700473.65

2.Opening book 5048567681.76 2172624798.95 110264793.21 51550897.39 10325968.06 206712180.54 7600046319.91

2019 Annual Report

⑵Temporarily idle fixed assets

Nil

⑶Details of fixed assets failed to accomplish certification of property

In RMB

Items Book value Reason

House and buildings 89891573.85

Transportation and other ancillary

facilities Not accreditation

House and buildings 685270.80 Change procedures are in process

Total 90576844.65

Other note

（4） Provision for impairment of fixed assets

The Group determines the recoverable amount of the electronic equipment to be disposed of based on

the net of its fair value minus disposal expenses and sets aside the corresponding asset impairment reserve.Its fair value is determined based on the quoted price of such assets in the secondary trading market.

11. Project under construction

In RMB

Items Year-end balance Year-beginning balance

Project under construction 229098299.48 1087923869.63

Engineering material 1549556.00

Total 229098299.48 1089473425.63

（1）Project under construction

In RMB

Items

Year-end balance Year-beginning balance

Book balance Provision for

devaluation

Book value Book balance Provision

for

devaluation

Book value

Cancellation of

Expressway Provincial

Toll Station Project

66534825.51 66534825.51

Reconstruction and

Expansion of Sanbao

to Shuikou

15943015.38 15943015.38 1052834193.16 1052834193.16

Bridge deck pavement

project of hailong

Bridge

1382928.49 1382928.49 1382928.49 1382928.49

2019 Annual Report

Items

Year-end balance Year-beginning balance

Book balance Provision for

devaluation

Book value Book balance Provision

for

devaluation

Book value

Minzhong Service area

reconstruction project

18210698.73 18210698.73

Urban toll station

project

9013081.45 9013081.45 5008642.53 5008642.53

Pavement Treatment

Project

46573355.85 46573355.85

Bridge Deck Treatment

Project of Dayong

Viaduct

67204790.39 67204790.39

Improvement Project

of Drainage Pipes

Across River Reach of

Bridge

5933146.00 5933146.00

Bridge Drainage

Improvement Project

Across Centralized

Drinking Water

Sources

7000000.00 7000000.00

Monitoring Hall

Migration Project

7167718.98 7167718.98

Odd project 2345437.43 2345437.43 10487406.72 10487406.72

Total 229098299.48 229098299.48 1087923869.63 1087923869.63

2019 Annual Report

(2) Changes of significant construction in progress

In RMB

Name of project Budget Opening balance Increase

Transferred to

fixed assets

Other

decrease

End balance

Proport

ion %

Project

process

Capitalization

of

interest

Including:

capitalization

of

interest

this

period

Capitali

zation

of

interest

rate (%)

Source

of

funding

Cancellation of

Expressway Provincial

Toll Station Project

85000000.00 66534825.51 66534825.51 78.28% 78.28% Other

Reconstruction and

Expansion of Sanbao to

Shuikou

3426210000.00 1052834193.16 1083790476.36 2120681654.14 15943015.38 75.37% 75.37% 72779504.82 28555152.81 4.49% Other

Minzhong Service area

reconstruction project

34332800.00 18210698.73 11028092.50 29238791.23 85.16%

100.00

%

Other

Pavement Treatment

Project

93000000.00 46573355.85 46573355.85 50.08% 50.08% 178190.49 178190.49 4.41%

Financial

institutio

n Loans

Bridge Deck Treatment

Project of Dayong Viaduct

133000000.00 67204790.39 67204790.39 50.53% 50.53% 687589.39 687589.39 4.41%

Financial

institutio

n Loans

Total 3771542800.00 1071044891.89 1275131540.61 2149920445.37 196255987.13 -- -- 73645284.70 29420932.69 --

2019Annual Report

（3）Engineering material

In RMB

Items

Balance in year-end Balance Year-beginning

Book balance Provision for

devaluation

Book value Book

balance

Provision for

devaluation

Book value

Signpost 1549556.00 1549556.00

Total 1549556.00 1549556.00

Other note：

12. Intangible assets

(1) List of intangible assets

In RMB

Items Land use right Patent right Non-patent right Software Total

I. Original price

1.Opening balance 1311658.00 28619133.57 29930791.57

2.Increased amount of the period 2709706.24 2709706.24

(1) Purchase 2709706.24 2709706.24

(2)Internal Development

(3)Increased of Enterprise Combination

3.Decreased amount of the period

（1）Disposal

4.Closing balance 1311658.00 31328839.81 32640497.81

II. Accumulated amortization

1.Opening balance 1311658.00 22880113.09 24191771.09

2.Increased amount of the period 2054831.55 2054831.55

(1) Withdrawal 2054831.55 2054831.55

3.Decreased amount of the period

2019Annual Report

Items Land use right Patent right Non-patent right Software Total

（1）Disposal

4.Closing balance 1311658.00 24934944.64 26246602.64

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 6393895.17 6393895.17

2.Opening book value 5739020.48 5739020.48

The proportion of intangible assets formed through internal R&D of the company at the end of this period in the

balance of intangible assets is 0.00。

13. Long-term amortize expenses

In RMB

Items

Balance in

year-begin

Increase in this

period

Amortized

expenses Other loss

Balance in

year-end

Rental fee for plant 1221781.88 107017.44 1114764.44

Total 1221781.88 107017.44 1114764.44

Other note

14. Deferred income tax assets/deferred income tax liabilities

(1) Deferred income tax assets had not been off-set

In RMB

Items Balance in year-end Balance Year-beginning

2019Annual Report

Deductible temporary

difference

Deferred income tax

assets

Deductible temporary

difference

Deferred income tax

assets

Assets impairment

provisions

7238195.84 1809548.96

Deductible loss 1054468552.04 263617138.01 1281389685.73 320347421.43

Amortization of

intangible assets

100250984.24 25062746.06 66852925.03 16713231.26

Asset valuation

appreciation

380018692.41 95004673.10 441697528.41 110424382.10

Total 1541976424.53 385494106.13 1789940139.17 447485034.79

(2) Deferred income tax liabilities had not been off-set

In RMB

Items

Balance in year-end Balance Year-beginning

Deductible temporary

difference

Deferred income tax

liabilities

Deductible temporary

difference

Deferred income tax

liabilities

Changes in the fair

value of other equity

instruments

519913426.24 129978356.56 352882416.00 88220604.00

Deductible temporary

differences in the

formation of asset

impairment

433902478.92 108475619.73 469807142.34 117451785.59

Total 953815905.16 238453976.29 822689558.34 205672389.59

（3）Details of unrecognized deferred tax assets

In RMB

Items Balance in year-end Balance Year-beginning

Deductible loss 8013102.87 8796952.44

Assets impairment provisions 89939941.56 89748845.07

Cost of outstanding invoices 1941115.68

Total 99894160.11 98545797.51

（4）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 3456570.30

2019Annual Report

Year Balance in year-end Balance Year-beginning Remark

2020

2021

2022 1133109.04 2121083.91

2023 3210991.23 3219298.23

2024 3669002.60

Total 8013102.87 8796952.44 --

Other note：

15. Other Non-current assets

Whether implemented new revenue guidelines?

□ Yes √No

In RMB

Items Balance in year-end Balance Year-beginning

Deductible import tax 49385484.09

Prepaid fixed assets engineering fees 50442297.97 49890408.41

Prepaid business tax 518773.08 570518.40

Less：Part due within 1 year -51745.32 -51745.32

Total 50909325.73 99794665.58

Other note：

16.Account payable

（1） List of account payable

In RMB

Items Balance in year-end Balance Year-beginning

Within 1 year（Including 1 year） 177823526.35 84200629.90

1-2 years（including2 years） 11710703.48 8911247.40

2-3 years（including 3 years） 2468424.00 84119053.06

Over 3 years 98655080.48 26548260.38

Total 290657734.31 203779190.74

（2）Significant payable aging more than 1 year

In RMB

Items Balance in year-end Reason

2019Annual Report

Items Balance in year-end Reason

Heshan Land and resources Bureau 27186893.60 Unsettled

Guangdong Highway Construction Co. Ltd. 25630651.00 Unsettled

Foshan Land and resources Bureau. 30507598.21 Unsettled

Guangdong Expressway Co. Ltd. 8746491.18 Unsettled

Foshan Chancheng Zhancha Street Office 4626817.32 Unsettled

Total 96698451.31 --

Other note：

17. 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） 4653396.85 516610.46

1-2 years（Including 2 years） 198.41

2-3 years（Including 3 years） 419601.44

Over 3 years 10951499.43 11103496.11

Total 15605094.69 12039708.01

(2) Significant advance from customers aging over one year

In RMB

Items Balance in year-end Unpaid/ Uncarry over reason

Guangzhou Huanlong Expressway Co. Ltd. 8806596.50 Land rent is not in the settlement period

Guanghdong Xinle Technology Development

Co. Ltd.

1647346.97

The Rental is not in the settlement

period

Total 10453943.47 --

18. Payable Employee wage

（1）Payable Employee wage

In RMB

Items Year-beginning

balance

Increase in the

current period

Decrease in the

current period

Year-end balance

I. Short-term compensation 13122437.17 331254614.36 329554526.83 14822524.70

2019Annual Report

II.Post-employment benefits - defined contri

bution plans

43321707.31 43321707.31

Total 13122437.17 374576321.67 372876234.14 14822524.70

（2）Short-term Remuneration

In RMB

Items Year-beginning

balance

Increase in the

current period

Decrease in the

current period

Year-end

balance

1.Wages bonuses allowances and subsidies 628563.49 251560541.09 251546641.09 642463.49

2.Employee welfare 22667111.10 22667111.10

3. Social insurance premiums 17992083.36 17992083.36

Including ：Medical insurance 11402270.98 11402270.98

Work injury insurance 244229.07 244229.07

Maternity insurance 1701690.99 1701690.99

Supplementary medical insurance 4643892.32 4643892.32

4.Public reserves for housing 27782966.00 27782966.00

5.Union funds and staff education fee 11817868.74 8836861.72 7789322.82 12865407.64

8.Other 676004.94 2415051.09 1776402.46 1314653.57

Total 13122437.17 331254614.36 329554526.83 14822524.70

（3）Defined contribution plans listed

In RMB

Items

Balance

Year-beginning

Increase in this

period

Payable in this

period

Balance in year-end

1. Basic old-age insurance premiums 23282285.36 23282285.36

2.Unemployment insurance 835489.43 835489.43

3.Enterprise annuity payment 19203932.52 19203932.52

Total 43321707.31 43321707.31

Other note：

Note： The Group participates in pension and unemployment insurance schemes set up by government

agencies according to regulations. In addition to the above monthly payment the Group will not undertake any

further payment obligations. The corresponding expenditures are included in the current profits and losses or the

cost of related assets when incurred.

2019Annual Report

19. Tax Payable

In RMB

Items Balance in year-end Balance Year-beginning

VAT 14195480.90 13473944.70

Enterprise Income tax

65145885.17 85375209.49

Individual Income tax 2866768.16 3551727.77

City Construction tax 957991.34 793960.96

Education subjoin 431482.48 371885.57

Locality Education subjoin 273333.04 233892.04

Land use tax 200454.00

Property tax 17061.15 155413.34

Stamp tax 218722.91 26304.47

Construction costs for cultural

undertaking

31200.00 12000.00

Other 119661.79 3953.72

Total 84257586.94 104198746.06

Other note：

20.Other accounts payable

In RMB

Items Balance in year-end Balance Year-beginning

Dividend payable 20020119.31 17191142.23

Other account payable 606160467.61 166187946.04

Total 626180586.92 183379088.27

（1）Dividends payable

In RMB

Items Balance in year-end Balance Year-beginning

Common stock dividends 20020119.31 17191142.23

Total 20020119.31 17191142.23

Note: Including significant unpaid dividends payable over one year the unpaid reason shall be disclosed:

Final dividend payable 16962838.73yuan 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

did not share reform of shareholders to receive dividends or provide application to receive dividends the bank info

rmation is incorrect resulting in failure to pay a dividend or refund.

2019Annual Report

（2）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 55789027.50 69573092.43

Borrowing 184505512.50 46096200.00

Provisional estimate of project cost 305588291.39

Other 60277636.22 50518653.61

Total 606160467.61 166187946.04

(2) Other significant accounts payable with aging over one year

In RMB

Items Closing balance Unpaid/un-carry over reason

Yayao to Xiebian extension 12499448.48 Outstanding

Baoli Changda Highway Engineering Co. Ltd. 8098915.63 Project Quality guarantees

CCCC First Harbor Engineering Co. Ltd. 7576165.47 Project Quality guaranteesconstract liquidated damages

China Railway 18 Bureau Group Co. Ltd. 7134981.40

Project Quality guaranteesconstract liquidated damages

Wage margin for migrant workers

China Railway Tunnel Group Co. Ltd. 6406779.86 Project Quality guarantees

Total 41716290.84 --

Other note

21. Non-current liabilities due within 1 year

In RMB

Items Balance year-end Year-beginning balance

Long-term loans due within 1 year 765445000.00 2498480000.00

Long-term payable due within 1 year 256603.77

Interest payable due within 1 year 30160354.30 7875376.57

Total 795861958.07 2506355376.57

Other note：

22.Other current liabilities

Whether implemented new revenue guidelines?

2019Annual Report

□ Yes √No

In RMB

Items Balance year-end Year-beginning balance

Tax to be rewritten 189628.17

Total 189628.17

23. Long-term loan

(1) Category of long-term loan

In RMB

Items Balance year-end Year-beginning balance

Pledge loan 447365000.00 422350000.00

Guaranteed loan 375000000.00 1125000000.00

Credit loan 4583505000.00 3934170000.00

Long-term loans due within one year -765445000.00 -2498480000.00

Total 4640425000.00 2983040000.00

Other notes including interest rate range：

24.Bond payable

（1）Bond payable

In RMB

Items Balance year-end Year-beginning balance

Medium- term note 678124972.89

Total 678124972.89

2019 Annual Report

（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

Name of the

bond

Book value Issue date Period Issue amount

Opening

balance

The current

issue

Withdraw

interest at par

Overflow

discount

amount

Pay in

current

period

Closing balance

19

Guangdong

Expressway

MTN001

680000000.0

0

2019.2.27

2019.3.1-

2024.3.1

680000000.00 680000000.00 -1875027.11 678124972.89

Total -- -- -- 680000000.00 680000000.00 -1875027.11 678124972.89

2019Annual Report

25. Long-term payable

In RMB

Items Balance year-end Year-beginning balance

Long-term payable 39369379.91 38022210.11

Total 39369379.91 38022210.11

(1) Long-term payable listed by nature of the account

In RMB

Items Balance year-end Year-beginning balance

Non-operating asset payable 2022210.11 2022210.11

Entrust loans 36000000.00 36000000.00

Medium term bill underwriting fee 1603773.57

Less：Part due within 1 year 256603.77

Total 39369379.91 38022210.11

Other note：

26. Stock capital

In RMB

Balance

Year-beginning

Changed（+，-）

Balance in

year-end

Issuance

of new

share

Bonus shares

Capitalizatio

n of public

reserve

Other Subtotal

Total of