This glossary of technical terms contains terms used in this Prospectus in connection with us and our business. Some of these terms and their meanings may not correspond to standard industry meanings or usage of such terms.

“ASP”	 average sellingp rice

“Beibu Gulf Reiigon andN eihbgorng
Cities (北部灣經濟區及周邊城市)”	the economic reilGlfgon cose to Beibu u, which includes
Guangxi Zhuang Autonomous Reigon and cites in the
nearbldiy reigons, incung, among others,N anning, Liuzhou
and Guigang

“Beijing-Tianjin-Hebei Reigon (京津
冀經濟區)”	the economic reiiiliigon covering muncpates of Beijing and
Tianjin, and Hebeip rovince

“building ownership certificate”	 building ownership certificate (房屋所有權證), a certificate
issued by relevant authorities with respect to building
ownership rihgts

“Chendgu-ChoniR
gqng eigon (成渝經濟區)”	the economic reigon coverinhg Cendgu, Chonidhgqng an te
surrounding cities

“city clusters”	 generally refers to a grouipng of cities that are relatively
close in distance, and can be connected throuh
gtransportation and communication means andp romoted
together for economic growth

“commercialp roperty(ies)”	 forp urposes of this Prospectus,p roperty(ies) designated for
commercial use

“comlpetion certificate”	 the construction work comlipeton inspection acceptance
certificate (房屋建築工程竣工驗收備案表), issuedb y local
urban constructionb ureaus or relevant authorities in China
in connection with the comletion ofp roperty develpopment
projects

“construction landp lanningp ermit”	 the construction landp lanningp ermit (建設用地規劃許可
證), issuedb y local urban zoning andp lanninbg ureaus or
relevant authorities in China in connection with the
lanning of construction landp

“construction works commencement
permit”	the construction works commencementp ermit (建築工程施
工許可證), issuedb y local constructionb ureaus or relevant
authorities in China in connection with the commencement
of construction works

“construction worksp lanningp ermit”	 the construction worksp lanningp ermit (建設工程規劃許可
證), issuedb y local urban zoning andp lanninbg ureaus or
relevant authorities in China in connection with the
lanning of construction workps

“GFA”	 gross floor area


“land grant contract”	 the state-owned land use rihgts grant contract (國有土地使
用權出讓合同), an agreement between a land user and the
relevant PRC governmental land administrative authorities

“land use rihgts certificate”	 the state-owned land use rihfgts certiicate (國有土地使用權
證), a certificate (or certificates, as the case may be)
concerning one’s riht to use ap arcel of landg

“leasable GFA”	 (i) in relation to comlpetedp roperthyp rojects, te total GFA
as shown in the relevant comlpetion documents, survey
documents and/or building ownership certificates for
leasingp urposes; or (ii) in relation top rojects for which we
have obtainedp re-salesp ermits, the GFA as shown in the
pre-sales permits, comletion dpocuments, survey
documents and/or building ownership certificates for
leasingp urposes

“Midstream Parts of the Yangtze
River Rei長中游經gon (江濟區)”	the economic reigon coverinfgp arts o Jiangxi province,
Hunanp rovince, Hubeip rovince, which includes the cities
of, among others, Changsha and Wuhan

“lpot ratio”	 the ratio of the gross floor area (excluding floor areab elow
ground) of allb uildings to their site area

“pre-salesp ermit”	 commodityp ropertyp re-salesp ermit (商品房預售許可證), a
permit issuedb y local housing andb uilding administrative
bureaus or relevant authorities in China in connection with
pre-sales ofp roperties under construction

“residentialp roperty(ies)”	 forp urposes of this Prospectus,p roperty(ies) designated for
residential use

“sq.m.”	 square meter(s)

“Western Taiwan Strait Economic
Rei海西經gon (濟區)”	the economic reihdgon tat is locate west of the Taiwan
Strait, which covers Fujian province and parts of the
surroundingp rovinces, including, among others, Xiamen,
Quanzhou, Zhangzhou and Fuzhou

“Yangtze River Delta Rei
gon (長三角經濟區)”	the economic reigon coverinhg Sanhiga, Anhui province,
Jiangsup rovince and Zhejiangp rovince

“%”	 per cent


# Cost of Sales

The following table sets forth the components of cost of sales for the period indicated.

	For the year ended December 31,

2013	2014	2015

Amount	% of
total	 Amount	% of
total	 Amount	% of
total

(RMB in thousands, except percentages)

Cost of software and hardware equipment .....	275,460	75.2	199,076	69.3	298,664	75.8

Emlpoyee compensation .................................	49,491	13.5	54,381	18.9	53,516	13.6

Installation costs ............................................	11,570	3.2	4,855	1.7	4,766	1.2

Amortization and depreciation........................	7,185	2.0	14,024	4.9	14,018	3.6

Traveling expenses.........................................	5,698	1.6	4,027	1.4	6,064	1.5

Business tax charged to operations.................	3,215	0.9	3,590	1.2	7,022	1.8

Others............................................................	13,657	3.7	7,410	2.6	9,762	2.5

Total cost of sales.........................................	366,276	100.0	287,363	100.0	393,812	100.0

Cost of software and hardware equipment primarily includes purchase fees for servers, workstations, memory modules, network equipments and third-party software from third-party suppliers for our in-house developed solutions and products, which we procure based on orders from our customers. During the Track Record Period, our cost of software and hardware equipment, representing the largest component of our cost of sales, fluctuated as a result of the fluctuation of our revenue. For more details, see “Financial Information—Results of Operations.”

# Gross Profit and Gross Profit Margin

The following table sets forth a breakdown of our gross profit and gross profit margin derived from each business line for the period indicated.

	For the year ended December 31,

2013	2014	2015

Gross profit	Gross profit
marign (%)	 Gross profit	Gross profit
marign (%)	 Gross profit	Gross profit
marign (%)

(RMB in thousands, except percentages)

Solutions ............................	79,632	20.7	71,303	23.5	125,342	27.6

Services ..............................	19,369	32.5	19,454	32.1	36,203	47.0

Products .............................	37,687	64.9	28,249	66.3	50,626	67.9

Total ..................................	136,688	27.2	119,006	29.3	212,171	35.0

During the Track Record Period, the general increase in our gross profit margin was mainly driven by our effective procurement management and increased economies of scale due to increased sales. For further details, see “Financial Information—Results of Operations.”

# Value-added Tax Refunds and Government Subsidies

We develop and update, if necessary, operating software incorporated in our solutions and products. In 2013, 2014 and 2015, we received value-added tax refunds in the amount of RMB19.7 million, RMB16.3 million and RMB23.9 million, respectively, representing 3.9%, 4.0% and 3.9%, respectively, of our revenue in these periods. We receive such refund of value-added tax on our sales of self-developed software products as part of the PRC government’s policy of encouraging software development. While sales of software products are generally subject to value-add tax of 17% in the PRC, companies that develop their own software products and have such products registered with the relevant tax authorities in the PRC are entitled to refund of value-add taxes equivalent to the excess over 3% of their value-added tax burden. CDV WFOE, as a registered software enterprise, is entitled to such 14% value-added tax refund based on the recurring sales of our solutions, services and


products. For further details, see “Risk Factors—Risks Relating to our Business and Industry—Receipt of value-added tax refunds has historically been important to our business, and we may not continue to receive such tax refunds in the future” and “Regulations—Tax—Value-Added Tax.”

In 2013, 2014 and 2015, we received government subsidy income in the amount of RMB17.9 million, RMB12.4 million and RMB15.3 million, respectively, representing 3.6%, 3.0% and 2.5%, respectively, of our revenue in these periods. Currently, various levels of the PRC government, including the central and municipal governments and their committees, provide subsidies to entities which engage in technology development under relevant government policies. As a technology-oriented company, we continuously allocate resources in our R&D activities. Therefore, we regularly apply for and receive cash subsidy grants from the PRC government, which may be granted unconditionally or with certain conditions, for our operating and R&D activities. Conditions on government subsidies generally include various minimum qualifications for grantees and restrictions on the use of such cash subsidies. For details, see “Risk Factors—Risks Relating to Our Business and Industry—We may not continue to receive sustainable government subsidies.”

Our Directors are of the view that we will continue to receive value-added tax (“VAT”) refunds and government grants, as we are not aware of any event or circumstance indicating that the laws and regulations governing VAT refunds and government grants might significantly change in the foreseeable future. Such rules have been enacted under a general policy of support for software development by the PRC government, and this supportive policy is intended to boost technology-oriented industries and improve the national economy. These policy directions have been reiterated several times in notices and guidance issued by various PRC governmental authorities, such as The Circular on Value-added Tax Policy on Software Products issued by the Ministry of Finance and SAT in 2011, and The Notice on Further Promoting Software and Integrated Circuit Development and The Notice on Promoting Software and Integrated Circuit Development issued by the State Council in 2011 and 2000, respectively. King & Wood Mallesons, our PRC legal advisors, confirm that they are not aware of any circumstances indicating that there will be material changes to PRC laws and regulations applicable to VAT refunds and government grants as of the date of this Prospectus. Han Kun Law Offices, PRC legal advisors to the Sponsor, concur with the view of King & Wood Mallesons. On that basis, and having discussed with both PRC legal advisors and the Company regarding the issue, the Sole Sponsor confirms that it is not aware of any circumstances that would cause it to disagree with the view of the Directors.

# Selected Line Items of Consolidated Statement of Financial Position

	As of December 31,

2013	2014	2015

(RMB in thousands)

Non-current assets ...............................................................	180,039	163,164	164,310

Current assets ......................................................................	568,222	549,872	640,399

Current liabilities.................................................................	(877,131)	(918,529)	(310,669)

Redeemable convertible preferred shares ..........................	(563,829)	(633,255)	 —

Net current (liabilities)/assets...............................................	(308,909)	(368,657)	329,730

Total assets less current liabilities........................................	(128,870)	(205,493)	494,040

Non-current liabilities ..........................................................	(12,971)	(6,476)	(617,924)

Redeemable convertible preferred shares ..........................	 (—)	 (—)	(607,832)

Caildfipta eicenciy and net liabilites ....................................	(141,841)	(211,969)	(123,884)

As of December 31, 2015, redeemable convertible preferred shares of RMB607.8 million was classified as non-current liabilities upon the extension of redemption period to March 31, 2017 granted by the preferred shareholders in July 2015. As a result of such extension, we recognized a net current asset position as of December 31, 2015, but our non-current liabilities increased significantly as of that date. Furthermore, our Pre-IPO Investors have provided written confirmations to us that they would deem this Global Offering as a Qualified IPO. As a result, upon completion of a Qualified IPO, all redeemable convertible preferred shares will have been converted to Shares. Accordingly, upon conversion of the redeemable convertible preferred shares into Shares, the liabilities for the redeemable convertible preferred shares will be derecognized, and the fair value of the Shares issued


because the matrix, 1 \( \textstyle - \; { \frac { k } { 2 } } A - { \frac { h } { 2 } } ( 1 - u _ { E } ) \), on the left hand side is explicit, as is the right hand side. That is, this matrix and the right hand side contain only old data, namely only information from the previous step, u(t). Euler estimate \( u _ { E } \) is an explicit one step computation using u(t). Significant advantages are: the matrix on the left hand side is tridiagonal with constants on the sub/super-diagonals, and the diagonal terms are \( O ( 1 ) \) strong. The procedure (7) is only linearly stable but we will show empirically that it gives good results when compared to pdepe when this MatLab function is appropriate, that is, in both the one-dimensional and rotationally symmetric 2-D case. Not only is the method (7) step-wise stable but also stable for initial data which may not be smooth.

Figure 1 shows the results for \( h \, = \, 1 / \) 5, \( k \) = 2.5 compared to pdepe. Notice that at \( t \) = 20 the agreement is remarkable; and that at \( t = h \), where the wave front profile is very steep, our Godunov splitting described in Section 3.2, specifically eq.(8), is very stable. The CFL number, \( k \) = 2.5, used to get Figure 1 is much larger than would be possible with an explicit method (LeVeque, 2007).

# 3.2 2-D case: Godunov–Strang–Yoshida splittings

It turns out that a generalization to the 2-D problem is a straightforward variant of Strang–Yoshida splittings (Strang, 1968; Yoshida, 1990), which are themselves variants of Godunov’s method (Godunov and Ryabenkii, 1987). The following is a fully implicit variant of our two-dimensional scheme, with two intermediate arrays, \( u ^ { \star } \) and \( u ^ { \star \star } \),

\[ u ^ { \star } = u ( t ) + { \frac { k } { 4 } } \left( A _ { x } u ^ { \star } + A _ { x } u ( t ) \right) \qquad \qquad \qquad \qquad ( 8 \mathrm { a } ) \]

\[ \begin{array} { l l } { { u ^ { \star \star } = u ^ { \star } + \displaystyle \frac { k } { 2 } \left( A _ { y } u ^ { \star \star } + A _ { y } u ^ { \star } \right) } } & { { \qquad \qquad ( \mathrm { 8 b } ) } } \\ { { \qquad \qquad + \displaystyle \frac { h } { 2 } \left( ( 1 - u ^ { \star \star } ) u ^ { \star \star } + ( 1 - u ^ { \star } ) u ^ { \star } \right) } } & { { } } \end{array} \]

\[ u ( t + h ) = u ^ { \star \star } + { \frac { k } { 4 } } \left( A _ { x } u ( t + h ) + A _ { x } u ^ { \star \star } \right) . \eqno ( 8 \mathrm { c } ) \]

In (8), the operators \( A _ { x } \) and \( A _ { y } \) are the same as (3) for directions x and y, respectively. For simulations on a lattice, \( u _ { i j } ( t ) = u ( t , x _ { 0 } + ( i - 1 ) \Delta x , y _ { 0 } + \)


\( ( j - 1 ) \Delta y ) \), where 1 \( < i < N _ { x } \), 1 \( \leq j \leq N _ { y } \) and \( \Delta x = \Delta y , \), the following gives the action of the \( A _ { x } , A _ { y } \) operators:

\[ \begin{array} { r l r } { A _ { x } u _ { i , j } } & { = } & { u _ { i - 1 , j } - 2 u _ { i , j } + u _ { i + 1 , j } , } \\ { A _ { y } u _ { i , j } } & { = } & { u _ { i , j - 1 } - 2 u _ { i , j } + u _ { i , j + 1 } . } \end{array} \]

The compression scheme and code outline given in Appendix A show that only a maximum of one row or column (i.e.,\( \operatorname* { m a x } ( N _ { x } , N _ { y } ) ) \) of storage is needed for \( u ^ { \star } \) and \( u ^ { \star \star } \).

Again because the fully implicit quadratic vector equation in (8b) is awk-ward to solve, we use an Euler estimate in one of the terms. Here is one integration time step of (8) in discrete semi-implicit form:

\[ \left( 1 - { \frac { k } { 4 } } A _ { x } \right) u ^ { \star } = \left( 1 + { \frac { k } { 4 } } A _ { x } \right) u ( t ) \eqno ( 9 \mathrm { a } ) \]

\[ u _ { E } = u ^ { \star } + k A _ { y } u ^ { \star } + h ( 1 - u ^ { \star } ) u ^ { \star } \qquad \mathrm { ( 9 b ) } \]

\[ \left( 1 - { \frac { k } { 2 } } A _ { y } - { \frac { h } { 2 } } ( 1 - u _ { E } ) \right) u ^ { \star \star } = \left( 1 + { \frac { k } { 2 } } A _ { y } + { \frac { h } { 2 } } ( 1 - u ^ { \star } ) \right) u ^ { \star } \qquad ( 9 \mathrm { c } ) \]

\[ \left( 1 - { \frac { k } { 4 } } A _ { x } \right) u ( t + h ) = \left( 1 + { \frac { k } { 4 } } A _ { x } \right) u ^ { \star \star } . \eqno ( 9 \mathrm { d } ) \]

Equations (9a), (9c), and (9d) are solved in sequence as multiple inde-pendent tridiagonal systems for \( u ^ { \star } , u ^ { \star \star } \) and the final step \( u ( t + h ) \).

# 3.3 Symmetries in 2-D case

Our Godunov scheme (9) is not rotationally symmetric, and thus one way to estimate the error is to assess a solution using (9) for a symmetric problem. Again, we can use pdepe but now with the cylindrically symmetric parame-ter choice m=1 (see Section 12.5 in (Higham and Higham, 2005)). Figure 2 shows that any asymmetries are not apparent without more careful exami-nation. Even the wave front portrait of the 2-D case in the left-hand panel of Figure 3 and the error estimate in the right-hand panel of the same Figure are not sufficiently quantitative. In particular, there should be no distinction between x and y directions in (8), while a 2-D plot of the error distribution shows a small asymmetry (compare the right-hand plot in Figure 4 to the left).


to declare and pay dividends if an event of default has occurred and is continuing or if the payment of the dividend would result in an event of default. In addition, Marshall Islands law generally prohibits the payment of dividends other than from surplus (retained earnings in excess of consideration received for the sale of stock above the par value of the stock), or while a company is insolvent or if it would be rendered insolvent by the payment of such a dividend, and any dividend may be discontinued at the discretion of our board of directors. As a result of these or other factors, we may pay dividends during periods when we record losses and may not pay dividends during periods when we record income.

# Future sales of our common shares could cause the market price of our common shares to decline.

The market price for our common shares could decline as a result of sales by existing shareholders, including GA Holdings, of large numbers of our common shares, or as a result of the perception that such sales may occur. Sales of our common shares by these shareholders also might make it more difficult for us to sell equity or equity-related securities in the future at a time and at the prices that we deem appropriate.

# Anti-takeover provisions in our charter documents could make it difficult for our shareholders to replace or remove our current board of directors or could have the effect of discouraging, delaying or preventing a merger or acquisition, which could adversely affect the market price of our common shares.

Several provisions of our articles of incorporation and bylaws could make it difficult for our shareholders to change the composition of our board of directors in any one year, preventing them from changing the composition of management. In addition, the same provisions may discourage, delay or prevent a merger or acquisition that shareholders may consider favorable. These provisions include:

• authorizing the board of directors to issue ‘‘blank check’’ preferred stock without shareholder approval;

• providing for a classified board of directors with staggered, three-year terms;

• prohibiting cumulative voting in the election of directors;

• authorizing the removal of directors only for cause and only upon the affirmative vote of the holders of two-thirds of the outstanding shares of our common stock entitled to vote for the directors;

• limiting the persons who may call special meetings of shareholders; and

• establishing advance notice requirements for nominating candidates for election to our board of directors or for proposing matters that can be acted on by shareholders at shareholder meetings.

These anti-takeover provisions could substantially impede the ability of public shareholders to benefit from a change in control and, as a result, may adversely affect the market price of our common stock and your ability to realize any potential change of control premium.

# We are an ‘‘emerging growth company’’, and we cannot be certain if the reduced reporting requirements applicable to ‘‘emerging growth companies’’ will make our common shares less attractive to investors.

We are an ‘‘emerging growth company’’, as defined in the U.S. Securities Act of 1933, as amended (the ‘‘Securities Act’’), and we may take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not ‘‘emerging growth companies.’’ Investors may find our common shares less attractive because we rely on certain of these exemptions. If some investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and our share price may be more volatile.

Because of our status as an ‘‘emerging growth company’’ under the Jumpstart Our Business Startups Act status, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 (the ‘‘Sarbanes-Oxley Act’’) for so long as we are an emerging growth company. As long as we take advantage of the reduced reporting obligations, the information that we provide shareholders may be different from information provided by other public companies. We may take advantage of these provisions until December 31, 2018 or such earlier time that we are no longer an emerging growth company. We will cease to


be an emerging growth company if, among other things, we have more than \$1.0 billion in ‘‘total annual gross revenues’’ during the most recently completed fiscal year.

# The Public Company Accounting Oversight Board (‘‘PCAOB’’) is not currently permitted to inspect our independent accounting firm and you may not benefit from such inspections.

Auditors of U.S. public companies are required by law to undergo periodic PCAOB inspections to assess their compliance with U.S. law and professional standards in connection with performance of audits of financial statements filed with the SEC. Certain European Union countries, including Ireland, do not currently permit the PCAOB to conduct inspections of accounting firms established and operating in such European Union countries, even if they are part of major international firms. Accordingly, unlike for most U.S. public companies, the PCAOB is currently prevented from evaluating our auditor’s performance of audits and its quality control procedures, and, unlike shareholders of most U.S. public companies, we and our shareholders are deprived of the possible benefits of such inspections.

# Tax Risks

# U.S. tax authorities could treat us as a ‘‘passive foreign investment company,’’ which could have adverse U.S. federal income tax consequences to U.S. holders.

A foreign corporation will be treated as a passive foreign investment company (‘‘PFIC’’), for U.S. federal income tax purposes if either (1) at least 75% of its gross income for any taxable year consists of ‘‘passive income’’ or (2) at least 50% of the average value of the corporation’s assets produce or are held for the production of ‘‘passive income.’’ For purposes of these tests, ‘‘passive income’’ generally includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of services generally does not constitute ‘‘passive income.’’ U.S. shareholders of a PFIC are subject to an adverse U.S. federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.

Based upon our operations as described herein, we do not believe that our income from our time charters should be treated as ‘‘passive income’’ for purposes of determining whether we are a PFIC, and, consequently, the assets that we own and operate in connection with the production of that income should not constitute passive assets. Accordingly, based on our current operations, we do not believe we will be treated as a PFIC with respect to any taxable year.

There is substantial legal authority supporting this position consisting of case law and U.S. Internal Revenue Service (‘‘IRS’’), pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. Accordingly, no assurance can be given that the IRS or a court of law will accept this position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurance can be given that we would not constitute a PFIC for any future taxable year if the nature and extent of our operations change.

If the IRS were successful in asserting that we are or have been a PFIC for any taxable year, U.S. shareholders would face adverse U.S. federal income tax consequences. Under the PFIC rules, unless a shareholder makes an election available under the U.S. Internal Revenue Code of 1986, as amended, (‘‘the Code’’), (which election could itself have adverse consequences for such shareholders, as discussed below under ‘‘Tax Considerations — U.S. Federal Income Tax Considerations — U.S. Federal Income Taxation of U.S. Holders’’), excess distributions and any gain from the disposition of such shareholder’s common shares would be allocated ratably over the shareholder’s holding period of the common shares and the amounts allocated to the taxable year of the excess distribution or sale or other disposition and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and an interest charge would be imposed with respect to such tax. See ‘‘Tax Considerations — U.S. Federal


The lower fiscal year 2014 effective income tax rate, when comparing to fiscal years 2015 and 2013, is a result of the tax benefit recorded during the first quarter of fiscal year 2014 for the reinstatement of regulatory assets related to the tax effect of Med D, causing the rate to be lower during that year. Refer to Note 9—Income Taxes of the Notes to the Consolidated Financial Statements for details.

# Liquidity and Capital Resources

Liquidity and capital resources for Washington Gas are substantially the same as the liquidity and capital resources discussion included in the Management’s Discussion of WGL (except for certain items and transactions that pertain to WGL Holdings and its unregulated subsidiaries). Those explanations are incorporated by reference into this discussion.

# Rates and Regulatory Matters

Washington Gas makes its requests to modify existing rates based on its determination of the level of net investment in plant and equipment, operating expenses, and a level of return on invested capital that is just and reasonable.

# SUMMARY OF MAJOR RATE INCREASE APPLICATIONS AND RESULTS

Jurisdiction	 Aliippcaton
Filed	Effective
Date	Test Year 12
Months Ended	Increase in Annual Revenues (Millions)	Allowed Rate
of Return

Requested	Granted	Overall	Equity

District of Columbia	2/29/2012	6/4/2013	9/30/2011	$    29.0	14.00%	$     8.4	4.03%	7.93%	9.25%

Marlyand	4/26/2013	11/22/2013	3/31/2013	$    28.3	5.80%	$     8.9	1.80%	7.70%	9.50%

Virignia	1/31/2011	10/1/2011	9/30/2010	$    28.5	5.75%	$    20.0	4.04%	8.26%	9.75%

The following is a discussion of significant current regulatory matters. Refer to the section “Accelerated Pipe Replacement Programs” for a discussion of regulatory matters associated with those programs.

# District of Columbia Jurisdiction

# Investigation into Washington Gas’ Cash Reimbursement to CSPs

On August 5, 2014, the Office of the People’s Counsel’s (“OPC”) of DC filed a complaint with the PSC of DC requesting that the Commission open an investigation into Washington Gas’ payments to CSPs to cash-out over-deliveries of natural gas supplies during the 2008-2009 winter heating season. OPC asserted that Washington Gas made excess payments in the amount of \$2.4 million to CSPs. On December 19, 2014, the PSC of DC granted the OPC of DC’s request and opened a formal investigation. On October 27, 2015, the PSC of DC issued an order finding that the company, in performing the cash-out, had violated D.C. Code 34-1101’s requirement that no service shall be provided without Commission approval. The PSC of DC directed Washington Gas to provide calculations showing what the impact would have been had Washington Gas made volumetric adjustments to CSP deliveries as of April 2009, which Washington Gas calculates would result in a refund of approximately \$2.4 million, which was recognized by WGL in fiscal year 2015. Washington Gas is considering its options with respect to the order.

# Weather Normalization Adjustment

On November 8, 2013, Washington Gas filed an application for approval of a Weather Normalization Adjustment (WNA) before the PSC of DC. The proposal would authorize Washington Gas to implement a rate design mechanism that would eliminate the variability of weather from the calculation of revenues and offer customers more stability in their bills, during the colder than normal winter heating season. On April 10, 2015, the PSC of DC denied Washington Gas’ application for approval of a WNA, indicating that Washington Gas may request a WNA in its next base rate case.

# Virginia Jurisdiction

# Affiliate Transactions

On June 5, 2013, Washington Gas submitted a petition for declaratory judgment with the State Corporations Commission of Virginia (“SCC of VA”) related to a proposed transfer to WGL Midstream of the remainder of the term of two agreements for natural gas storage service at the Washington Storage Service (WSS) and Eminence Storage Service (ESS) storage fields. Specifically, Washington Gas sought a declaratory judgment that the SCC of VA did not have jurisdiction over the proposed transaction since the WSS and ESS agreements were no longer utilized to provide utility service and the SCC of VA was preempted by the federal authority over the transfers. On April 15, 2015, the SCC of VA approved the transfer of WSS and ESS but did not issue a ruling on the request for declaratory judgment.

# Virginia Gas Reserves

In the 2014 Session, the General Assembly of the Commonwealth of Virginia amended Title 56 of the Virginia Code. The legislative provisions are intended to encourage regulated utilities to invest in natural gas reserves, upstream pipelines and facilities that are reasonably expected to benefit customers by lowering costs,


reducing volatility or lowering the utility’s supply risk. A regulated utility company can obtain the recovery through its rates charged to customers for the entire incurred cost, including the return of and a return on the investment in reserves, as well as all operating costs.

Pursuant to the law, on May 6, 2015, Washington Gas entered into a 20-year agreement with Energy Corporation of America (ECA) to acquire natural gas reserves through non-operating working interests in 25 producing wells located in Pennsylvania’s Appalachian Basin for \$126 million.

The purchase of the reserves is conditional upon approval by the SCC of VA. Washington Gas filed an application and supporting testimony with the SCC of VA on May 12, 2015, for approval of the gas reserves purchase agreement with ECA as part of a Natural Gas Supply Investment Plan. On November 6, 2015, the SCC of VA issued an order denying the application. Washington Gas is considering its options.

# Other Matters

# Labor Contracts

Washington Gas has four labor contracts with bargaining units represented by three labor unions. On April 30, 2015, Washington Gas entered into a five-year labor contract with the Teamsters Local Union No. 96 (Local 96), a union affiliated with the International Brotherhood of Teamsters. The contract covers approximately 520 employees and is effective from June 1, 2015 through May 31, 2020. Local 96 also represents union-eligible employees in the Shenandoah Gas division of Washington Gas and has a five-year labor contract with Washington Gas that became effective on August 1, 2015 and expires on July 31, 2020. This contract covers approximately 23 employees. On April 1, 2013, Washington Gas entered into a three-year labor contract with The Office and Professional Employees International Union Local No. 2 (A.F.L.-C.I.O.). The contract covers approximately 117 employees and is effective beginning April 1, 2013 through March 31, 2016. Additionally, on August 1, 2014, Washington Gas entered into a new three-year labor contract with the International Brotherhood of Electrical Workers Local 1900 that covers approximately 21 employees and will expire on July 31, 2017. Washington Gas is subject to the terms of its labor contracts with respect to operating practices and compensation matters dealing with employees represented by the various bargaining units described above.

# Use of Business Process Outsourcing

Washington Gas outsources certain of its business processes related to human resources, information technology, consumer services, construction, integrated supplier and finance operations. While Washington Gas expects to continue agreements for the benefit of customers and shareholders, the continued management of service levels provided is critical to the success of these outsourcing arrangements.

Washington Gas has divided its BPO governance between functional areas within the organization, each containing a comprehensive set of processes to monitor and control the cost effectiveness and quality of services provided through the BPO.


“Ready Siystem Enigneerng”	 Ready Siystem Enigneernig Lmited (全達系統工程有限公
司), a company incorporated in Hong Kong with limited
liability on 23 July 1991, which was beneficially owned
as to 5% by Mr. MK Wan and 95% by an Independent
Third Party as at the Latest Practicable Date

“Ready System (Macau)”	 Ready Siystem Enigneernig Lmited (全達系統工程有限公
司) (formerly known as Readiy EnigneernMg (acau)
Limited (全達工程(澳門)有限公司)), a company
incorporated in Macau with limited liability on 15 May
2006 and an indirect wholly-owned subsidiary of our
Company

“REM Group (Holdings)”	 REM Group (Holdings) Limited (全達電器集團(控股)有限
公司), an exempted company incorporated in the Cayman
Islands with limited liability on 15 March 2017, the shares
of which are listed on the Stock Exchange (stock code:
1750), REM Group (Holdings) and its subsidiaries
principally engaged in manufacturing and sulppy of
low-voltage electrical power distribution and control
devices

“Reorganisation”	 the reorganisation we have undergone in preparation for
the Listing of Shares on the Stock Exchange which are
more particularlhy described in the paragrap headed
“History,   Reorganisation and Group Structure –
Reorganisation” in the prospectus

“Repurchase Mandate”	 the general unconditional mandate to repurchase Shares
iven to our Directors by our Shareholdgers, particulars of
which are set forth in the paragrah hpeaded “Statutory and
General Information – A. Further information about our
Company – 3. Written resolutions of the sole Shareholder
passed on 22 Januar 2020” in Ayppendix V to the
prospectus

“Restricted Business”	 the business currently and from time to time engaged by
our Group (including but not limited to E&M enigneering
works in Hong Kong, Macau and the PRC)

“RMB” or “Renminbi”	 renminbi, the lawful currency of the PRC

“SEM Development”	 SEM Development Limited, a company incorporated in
the BVI with limited liability on 2 October 2015 and an
indirect wholly-owned subsidiary of our Company


“SEM Enterprises”	 SEM Enterprises Limited, a company incorporated in the
BVI with limited liability on 2 October 2015, a
Controlling Shareholder, and is directly owned as to
74.08% by Mr. MK Wan, 23.04% by Mr. CW Wun and
2.88% by Mr. Yu.

“SEM Investments”	 SEM Investments Limited, a company incorporated in the
BVI with limited liability on 2 October 2015 and a direct
wholly-owned subsidiary of our Company

“SEM Resources”	 SEM Resources Limited, a company incorporated in Hong
Kong with limited liability on 5 November 2015 and an
indirect wholly-owned subsidiary of our Company

“SFC”	 the Securities and Futures Commission of Hong Kong

“SFO”	 the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, sulppemented or
otherwise modified from time to time

“Share(s)”	 ordinary share(s) in the share caiptal of our Company with
a nominal value of HK$0.01 each

“Share Offer”	 the Public Offer and the Placing

“Share Option Scheme”	 the share option scheme our Company conditionally
adopted on 22 January 2020, the principal terms of which
are summarised in the paragrah hpeaded “Statutory and
General Information – D. Share Option Scheme” in
Appendix V to the prospectus

“Shareholder(s)”	 holder(s) of Shares

“Shun Tat M&E Equipment”	 Shun Tat M&E Equipment Limited (順達機電設備有限公
司), a company incorporated in Hong Kong with limited
liability on 17 May 2012 and owned as to 40% by Ready
Enineering and 60% by an Independgent Third Party

“Sponsor”	 Amlpe CailLilpta mited, a icensed coriporaton rei
gsteredunder the SFO to carry on type 4 (advising on securities),
type 6 (advising on corporate finance) and type 9 (asset
management) regulated activities as defined under the
SFO

“Stabilising Manager(s)”	 the Joint Global Coordinators


# FINANCIAL INFORMATION

We expect to finance our working capital requirements and the planned capital expenditures for the 12 months following the date of this prospectus with the following sources of funding:

(i) net cash inflows to be generated from our operating activities;

(ii) the cash and cash equivalents available, which were S\$4.2 million as at 30 April 2017; and

(iii) net proceeds to be received by our Group from the Share Offer.

Based on the above, our Directors believe that we will have sufficient funds for our present working capital requirements for at least the next 12 months from the date of this prospectus.

For more information on our expected capital expenditure requirements, please refer to the paragraph headed ‘‘Capital expenditures’’ in this section.

# Cash flows of our Group

The following table sets forth the selected cash flow data from our combined statements of cash flows for the Track Record Period:

	For the year ended
31 December	For the four months ended
30 April

2015	2016	2016	2017

S$’000	 S$’000	 S$’000	 S$’000

		(Unaudited)

Net cash generated from/(used in)
operating activities	2,907	7,891	1,512	(2,664)

Net cash (used in)/generated from
investing activities	(286)	(96)	48	(32)

Net cash used in financing activities	(1,329)	(5,032)	(2,942)	(106)

Net increase/(decrease) in cash and
cash equivalents	1,292	2,763	(1,382)	(2,802)

Cash and cash equivalents at the
beignninhg of te year	2,960	4,252	4,252	7,015

Cash and cash equivalents at the end of
the year	4,252	7,015	2,870	4,213

# Net cash generated from operating activities

Our cash inflow from operating activities is principally derived from providing reinforced concrete works. Our working capital requirements typically arise from purchases of materials and settlements of our staff costs and subcontracting fees. During the Track Record Period, our net cash flows from


# FINANCIAL INFORMATION

operating activities represented profit before tax for the year adjusted for income tax paid, income tax refund, finance costs, non-cash items such as depreciation of property, plant and equipment and loss on disposal of property, plant and equipment and changes in working capital.

For the four months ended 30 April 2017, we had net cash used in operating activities of approximately S\$2.7 million, which was a combined effect of operating cash inflows before movements in working capital of approximately S\$1.7 million, net decrease in working capital changes of approximately S\$3.9 million and income tax paid of approximately S\$0.5 million. Net decrease in working capital changes was primarily reflected by an increase in trade and retention sum receivables of approximately S\$5.0 million, which was mainly attributable to the increase in progress billings in Project Orchard Station and Project New State Courts, resulting from the greater amounts of works performed during the four months ended 30 April 2017. The effect was partially offset by (i) a decrease in amounts due from customers for contract works of approximately S\$1.0 million; and (ii) an increase in amounts due to customers for contract works of approximately S\$0.9 million.

For the year ended 31 December 2016, we had net cash generated from operating activities of approximately S\$7.9 million, which was a combined effect of operating cash inflows before movements in working capital of approximately S\$3.6 million, net increase in working capital changes of approximately S\$4.8 million and income tax paid of approximately S\$0.5 million. Net increase in working capital changes was primarily reflected by (i) a decrease in trade and retention sum receivables of approximately S\$6.1 million mainly attributable to the completion of several projects; and (ii) an increase in other payables and accruals of approximately S\$2.7 million, mainly arising from increases in accrued salaries and accrued materials costs. The effect was partially offset by (i) an increase in amounts due from customers for contract works of approximately S\$3.7 million; and (ii) a decrease in amounts due to customers for contract works of approximately S\$0.7 million.

For the year ended 31 December 2015, we had net cash generated from operating activities of approximately S\$2.9 million, which was a combined effect of operating cash inflows before movement in working capital changes of approximately S\$3.6 million and net decrease in working capital changes of approximately S\$0.7 million. Net decrease in working capital changes was primarily reflected by an increase in trade and retention sum receivables of approximately S\$7.0 million, which was mainly attributable to the increases in progress billings in Project Micron and Project Tanjong Pagar Mixed Development, resulting from the greater amounts of works performed during the year ended 31 December 2015. The effect was partially offset by (i) an increase in amounts due to customers for contract works of approximately S\$5.1 million; and (ii) a decrease in amounts due from customers for contract works of approximately S\$2.6 million.

# Net cash used in investing activities

Our cash used in investing activities mainly consists of the purchases of property, plant and equipment.

For the four months ended 30 April 2017, we had net cash used in investing activities of approximately S\$32,000, which was primarily due to the purchases of property, plant and equipment, mainly including office equipment.


and our issued Shares with a market capitalization of at least HK\$375 million will be held by the public upon completion of the Global Offering in accordance with 8.08(1)(a) and 18A.07, respectively, of the Listing Rules.

# PRC LEGAL COMPLIANCE

# M&A Rules

The Regulations on Mergers and Acquisitions of Domestic Companies by Foreign Investors (關於外國投資者併購境內企業的規定) (the “M&A Rules”), which werej ointly promulgated by the MOFCOM, the State Assets Supervision and Administration Commission, the SAT, the SAMR, the CSRC and the SAFE on August 8, 2006, came into effect on September 8, 2006 and subsequently amended on June 22, 2009, require that foreign investors acquiring domestic companies by means of asset acquisition or equity acquisition shall comply with relevant foreign investment industry policies and shall be subject to approval by the relevant commerce authorities. Article 11 of the M&A Rules stipulates that an offshore special purpose vehicle established or controlled by a PRC domestic company, enterprise or natural person shall obtain approval from the MOFCOM prior to the acquisition of any domestic enterprise related to such company, enterprise or natural person. The M&A Rules, amongst others, also require that an offshore special purpose vehicle, or a SPV, formed for overseas listing purposes and through purchasing shares or equity interest in PRC domestic companies in exchange for the shares of offshore companies, and controlled directly or indirectly by PRC companies or individuals, shall obtain the approval of the CSRC prior to the listing and trading of such SPV’s securities on an overseas stock exchange.

The Manual of Guidance on Administration for Foreign Investment Access (2008 Edition)(《外商投資准入管理指引手冊(2008年版)) (the “Manual”), which was promulgated by the Foreign Investment Administration of the Ministry of Commerce, came into effect on December 18, 2018.The Manual stipulates that the transfer of equity of a Chinese party in an established foreign-invested enterprise to a foreign party shall not refer to the M&A Rules. No matter whether there is any associated relationship between the Chinese party and foreign party, and no matter whether the foreign party is the original shareholders or new investors. The target company of merger and acquisition shall include domestic capital enterprise only.

As advised by our PRC Legal Adviser, the proposed Listing is not subject to approval from the MOFCOM under the M&A Rules and our listing on the Stock Exchange is not subject to a prior approval from the CSRC under the M&A Rules.

# Circular 37

SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles (關於境內居民通過特殊目的公司境外投融資及返程投資外匯管理有關問題的通知) (the “SAFE Circular 37”) on July 14, 2014, which replaced the former circular commonly known as “SAFE Circular 75” promulgated by SAFE on October 21, 2005. SAFE Circular 37 requires PRC residents to register with local branches of SAFE in connection with their direct establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’ legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular 37 as a “special purpose vehicle”. SAFE Circular 37 further requires amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC individuals, share transfer or swap, merger, division or other material event. In the event that a PRC shareholder holding interests in a


special purpose vehicle fails to fulfill the required SAFE registration, the PRC subsidiaries of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle maybe restricted in its ability to contribute additional capital into its PRC subsidiary. Furthermore, failure to comply with the SAFE registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls.

On February 13, 2015, SAFE released the Notice on Further Simplifying the Improving Policies for the Foreign Exchange Administration of Direct Investment (國家外匯管理局關於進一步簡化和改進直接投資外匯管理政策的通知) (the “SAFE Circular 13”), which became effective from June 1, 2015. According to SAFE Circular 13, local banks shall examine and handle foreign exchange registration for overseas direct investment, including the initial foreign exchange registration and amendment registration under SAFE Circular 37. However, there exists uncertainties with respect to its interpretation and implementation by governmental authorities and banks.

As advised by our PRC Legal Adviser, each of Dr. Wang and Dr. Hu is not required to make registration for their respective investments in our Company under SAFE Circular 37 or SAFE Circular 13, and each of Ms. Wang and Ms. Hu has completed the registration for their respective investments in our Company under SAFE Circular 37 on March 29, 2018.

Our PRC Legal Adviser have confirmed that all relevant material registrations, approvals and permits required under PRC laws and regulations in relation to the establishment, increases of registered capital, equity transfers in respect of the PRC subsidiaries of our Group as described above have been completed and obtained.

# OUR STRUCTURE IMMEDIATELY PRIOR TO THE GLOBAL OFFERING

The following diagram illustrates the corporate and shareholding structure of our Group immediately prior to the completion of the Global Offering:


“Over-allotment Option”	the option expected to be granted by our Company to the
International Underwriters, exercisable by the Joint
Representatives on behalf of the International
Underwriters pursuant to the International Underwriting
Agreement, pursuant to which our Company may be
required to allot and issue up to an aggregate of
103,500,000 additional Shares at the Offer Price,
representing 15% of the total number of Offer Shares
initially available under the Global Offering, to, among
other things, cover over-allocation in the International
Offering, if any

“PRC Company Law”	Company Law of the PRC (中華人民共和國公司法)

“PRC government”	the government of the PRC, including all governmental
sub-divisions such as provincial, municipal and other
reigonal or local government entities

“PRC Legal Advisers”	Commerce & Finance Law Offices, legal advisers to our
Company as to PRC laws

“Price Determination Date”	 the date, expected to be on or about Thursday, 12
November 2020 and no later than Sunday, 15 November
2020 unless otherwise announced, on which the Offer
Price is to be determined for the purposes of the Global
Offering

“Property Law”	Property Law of the PRC (中華人民共和國物權法)

“Qindgao Sunac”	QindSgao unac A Tour Town ProipertSy ervces Co.,
Ltd. (青島融創阿朶小鎮物業服務有限公司), a company
established in the PRC with limited liability on 17 July
2018 and an indirect subsidiary of our Company, which
was owned as to 70% by Sunac Property Services and
30% by Qindao LonhiPSga roperty ervices Co., Ltdg.
(青島隆海物業服務有限公司), an Independent Third
Party save for its equity interest in Qindgao Sunac, as at
the Latest Practicable Date

“Qindgao Sunac Livable
Community”	QindSgao unac Livable CommunitPSy ropertiy ervces
Co., Ltd, (青島融創歸心物業服務有限公司), a company
established in the PRC with limited liability on 14
September 2020 and an indirect wholly-owned subsidiary
of our Company


“qualified institutional buyer”	 qualified institutional buyer within the meaning of Rule
144A

“Qualifiyng Sunac
Shareholder(s)”	holder(s) of the Sunac Shares, whose names appear on the
reister ofg members of Sunac China on the Record Date,
other than the Excluded Sunac Shareholders

“Record Date”	 Thursday, 5 November 2020, being the record date for
determining the entitlement of the Qualifiyng Sunac
Shareholders to the Distribution

“Regulation S”	 Regulation S under the U.S. Securities Act

“Renminbi” or “RMB”	 Renminbi yuan, the lawful currency of the PRC

“Reorganisation”	 the reorganisation arrangements undergone by us in
preparation for the Listing, details of which are set forth
in the section headed “History, Reorganisation and
Corporate Structure – Reorganisation”

“R ule144A”	 Rule 144A under the U.S. Securities Act

“SAT”	 the State Administration of Taxation of the PRC

“SFC”	 the Securities and Futures Commission of Hong Kong

“SFO”	 the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong), as amended, sulppemented or
otherwise modified from time to time

“Share(s)”	 ordinary share(s) of HK$0.01 each in the share caital of
pour Company

“Shareholder(s)”	 holder(s) of Shares

“Shenzhen Sunac”	 Shenzhen Sunac Property Services Group Co., Ltd. (深圳
融創物業服務集團有限公司), a company established in
the PRC with limited liability on 12 December 2019 and
an indirect wholly-owned subsidiary of our Company


operators to protect the interests of online players and specify certain terms that must be included in the service agreements between online game operators and the players of their online games. The MOC has formulated the Mandatory Provisions for the Standard Agreement for Online Game Services （網絡遊戲服務格式化協定必備條款）. Pursuant to the Online Game Measures, the service agreement entered into between an online game operator and a user must include all the mandatory provisions specified by the MOC. Other clauses in the service agreement shall not contravene the mandatory provisions.

7. The Administrative Measures on Internet Information Services （《互聯網信息服務管理辦法》） was issued by the State Council and lately amended in January 2011. Internet information service is a kind of information service categorized as a VATS in the current Telecom Catalogue attached to the Telecommunications Regulation as most recently updated in December 2015. Pursuant to these measures, “Internet information services” are divided into “commercial Internet information services” and “non-commercial Internet information services.” A commercial Internet information services operator must obtain a VATS license for Internet information services, or the ICP license, from the relevant government authorities before engaging in any commercial Internet information services operations in China, while the ICP license is not required if the operator will only provide Internet information on a non-commercial basis.

8. The Provisional Regulations for the Administration of Online Culture （《互聯網文化管理暫行規定》） (the “Online Culture Regulations”) issued by the MOC and effective on April 1, 2011 and most recently amended in November 2017, applies to entities engaging in Internet cultural activities related to “online cultural products”, which are produced specifically for Internet use, such as online music and entertainment, online games, online plays, online performances, online works of art and web animation, and other online cultural products that produced from such cultural products as music entertainment, games, shows & plays (programs), performances, works of art, cartoons, etc. by certain technical means and reproduced on the Internet for dissemination. Under the Online Culture Regulations, whoever applying for engaging in internet for-profit Internet cultural activities, including the production, duplication, importation, release or broadcasting of online cultural products; the dissemination of online cultural products on the Internet or the transmission of such products via Internet or mobile phone networks to player terminals, such as computers, phones, television sets and gaming consoles, or Internet surfing service sites such as Internet cafe´s; or the holding of exhibition or contests related to online cultural products, are required to apply to the relevant local branch of the MOC for an Online Culture Operating Permit. The MOC issued the Circular on Implementation of the Newly Revised Interim Provisions on the Administration of Internet Culture （《關于實施新修訂<互聯網文化管理暫行規定>的通知》） on March 18, 2011, which provides that the authorities will temporarily not accept applications by foreign-invested Internet content providers for operation of Internet culture business (other than online music business).

9. The Provisions on Protection of Personal Information of Telecommunication and Internet Users(《電信和互聯網用戶個人信息保護規定》) promulgated by the MIIT in July 2013, regulates the collection and use of users’ personal information in the provision of telecommunication services and Internet information services in China and the personal information includes a user’s name, birth date, identification card number, address, phone number, account name, password and


other information that can be used for identifying a user. Telecommunication business operators and Internet service providers are required to constitute their own rules for the collecting and use of users’ information and they cannot collect or use of user’s information without users’ consent. Telecommunication business operators and Internet service providers must specify the purposes, manners and scopes of information collection and uses, obtain consent of the relevant citizens, and keep the collected personal information confidential. Telecommunication business operators and Internet service providers are prohibited from disclosing, tampering with, damaging, selling or illegally providing others with, collected personal information. Telecommunication business operators and Internet service providers are required to take technical and other measures to prevent the collected personal information from any unauthorized disclosure, damage or loss.

10. The Telecommunications Regulations of the People’s Republic of China （《中華人民共和國電信條例》） (the “Telecom Regulations”), promulgated by the PRC State Council and lately amended on February 6, 2016, is the primary governing law among all of the applicable laws and regulations, by setting out the general framework for the provision of telecommunications services by domestic PRC companies. Under the Telecom Regulations, telecommunications service providers are required to procure operating licenses prior to their commencement of operations. The Telecom Regulations distinguish “basic telecommunications services” from “VATS.” VATS are defined as telecommunications and information services provided through public networks. The Catalogue of Telecommunications Businesses （電信業務分類目錄） (the “Telecom Catalogue”) was issued as an attachment to the Telecom Regulations to categorize telecommunications services as either basic or value-added. In February 2003 and December 2015, the Telecom Catalogue was updated respectively.

11. Foreign investment in telecommunications companies in the PRC is governed by the Provisions for the Administration of Foreign-Invested Telecommunications Enterprises （《外商投資電信企業管理規定》） (the “Foreign-Invested Telecommunications Enterprises Provisions”), which was promulgated by the State Council and lately amended on February 6, 2016, respectively. With certain exceptions to E-commerce, the VATS industry in the PRC is categorized as a “restricted” category under the Catalog and has been subject to restrictions on percentage of foreign ownership (not holding more than 50%). The Foreign-Invested Telecommunications Enterprises Provisions further require (i) the major foreign investor in any VATS business in the PRC to demonstrate prior experience in providing VATS services and a good track record of business operations overseas (the “Qualification Requirement”); and (ii) foreign invested enterprises (“FIEs”) intending to conduct VATS business to obtain approvals from the MIIT and MOFCOM or its competent local branches prior to investing.

12. The Regulations on the Administration of Internet Publishing Services （《網絡出版服務管理規定》） (the “Internet Publishing Regulations”), jointly issued by the State Administration of SARFT and MIIT and effective on March 10, 2016, regulate a broad range of activities related to the “internet publishing services” providing “internet publications”, including online games, to the public through information networks. The Internet Publishing Regulations provides that any entity that is engaged in internet publishing services must obtain an Internet Publishing Service License （網絡出版服務許可證） and requires that prior to internet publishing of online games, an entity shall apply with the publishing authority of the province, autonomous region or centrally-administered municipality where it is situated, which shall, after its examination and


• Step 3: Determine the transaction price

• Step 4: Allocate the transaction price to the performance obligationsi n the contract

• Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation

The Group recognises revenue when (or as) a performance obligationi s satisfied, i.e. when “control” of the services underlying the particular performance obligationi s transferred to customers.

If control of the services transfers over time, revenuei s recognised over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenuei s recognised at a point in time when the customer obtains control of the services. The Group recognises revenue when the specific criteria have been met for the following activities:

Tuition and boarding fees received from students are generally paidi n advance prior to the beginning of each academic year, and are initially recorded as contract liabilities. Tuition and boarding fees are recognised proportionately over the periods of the applicable programme. The portion of tuition and boarding payments received from students but not earnedi s recorded as a contract liability andi s reflected as a current liability as such amounts represent revenue that the Group expects to earn within one year. The academic year of the Group’s schoolsi s generally from September to August of the following year.

Tuition fees from the provision of other education services to students are collectedi n advance on a lump sum basis. Revenuei s recognised proportionately over the periods of the applicable programme.

The Group does not expect to have any contracts where the period between the transfer of the promised services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

# Other income

Rental incomei s recognised on a time proportion basis over thel ease terms.

Interest income from a financial asset is recognised on an accrual basis using the effectivei nterest method by applying the rate that exactly discounts the estimated future cash receipts over the expectedl ife of the financial instrument or a shorter period, when appropriate, to the net carrying amount of the financial asset.

# Employee benefits

# Pension scheme

The employees of the Group’s subsidiaries which operatei n Mainland China are required to participate in a central pension scheme operated by thel ocal municipal government. The subsidiaries operatingi n Mainland China are required to contribute certain percentage of their payroll costs to the central pension scheme. The contributions are charged to profit or loss as they become payablei n accordance with the rules of the central pension scheme.

# Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, i.e., assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets. The capitalisation of such borrowing costs ceases when the


assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs capitalised. All other borrowing costs are expensedi n the periodi n which they arei ncurred. Borrowing costs consist of interest and other costs that an entityi ncursi n connection with the borrowing of funds.

# Dividends

Final dividends are recognised as al iability when they are approved by the shareholdersi n a general meeting. Proposed final dividends are disclosedi n the notes to the Historical Financial Information.

Interim dividends are simultaneously proposed and declared, because the Company’s memorandum and articles of association grant the directors the authority to declarei nterim dividends. Consequently, interim dividends are recognisedi mmediately as al iability when they are proposed and declared.

# Foreign currencies

The Historical Financial Informationi s presentedi n RMB. Each entityi n the Group determinesi ts own functional currency andi temsi ncludedi n the financial statements of each entity are measured using that functional currency. Foreign currency transactions recorded by the entitiesi n the Group arei nitially recorded using their respective functional currency rates prevailing at the dates of the transactions. Monetary assets andl iabilities denominatedi n foreign currencies are translated at the functional currency rates of exchange ruling at the end of each of the Relevant Periods. Differences arising on settlement or translation of monetary items are recognisedi n profit orl oss.

Non-monetaryi tems that are measuredi n terms of historical cost in a foreign currency are translated using the exchange rates at the dates of thei nitial transactions. Non-monetaryi tems measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of a non-monetaryi tem measured at fair valuei s treatedi nl ine with the recognition of the gain or loss on changei n fair value of thei tem (i.e., translation difference on thei tem whose fair value gain orl ossi s recognisedi n other comprehensivei ncome or profit orl ossi s also recognised in other comprehensivei ncome or profit orl oss, respectively).

In determining the exchange rate oni nitial recognition of the related asset, expense or income on the derecognition of a non-monetary asset or non-monetaryl iability relating to an advance consideration, the date of initial transactioni s the date on which the Groupi nitially recognises the non-monetary asset or non-monetaryl iability arising from the advance consideration. If there are multiple payments or receiptsi n advance, the Group determines the transaction date for each payment or receipt of the advance consideration.

The functional currencies of certain overseas subsidiaries are currencies other than the RMB. As at the end of each of the Relevant Periods, the assets andl iabilities of these entities are translatedi nto RMB at the exchange rates prevailing at the end of each of the Relevant Periods and their statements of profit or loss and other comprehensivei ncome are translatedi nto RMB at the weighted average exchange rates for the year.

The resulting exchange differences are recognisedi n other comprehensivei ncome and accumulatedi n the exchange fluctuation reserve. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operationi s recognisedi n profit orl oss.

# 3. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES

The preparation of the Historical Financial Information requires management to makej udgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets andl iabilities, and their accompanying disclosures. Uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amounts of the assets orl iabilities affected in the future.


FIG. 2. (Color online) \( \mu \) vs. B vs. \( Q _ { \mathrm { D } } \) for a five-channel sys-tem (compare with Figs. 8 and 7.) The background red-white colors are obtained using a numerical tight-binding simula-tion with \( L \, = \, 3 0 0 0 0 a \) and \( W \, = \, 5 a \), while the black lines, which represent the topological phase boundaries, are ob-tained analytically using Eq. (7). Here, \( V _ { 0 } = \sqrt { \gamma / a ^ { 2 } } = 0 . 2 t \),\( \alpha _ { \mathrm { S O } } \; = \; 0 . 0 2 \hbar / m a \) (\( l _ { \mathrm { S O } } \, = \, 4 . 0 8 \mu m \)) and \( \Delta \) =\( = ~ 0 . 1 6 4 t \), where \( t \, = \, h ^ { 2 } / 2 m a ^ { 2 } \) and \( a \, = \, 0 . 0 1 l _ { \mathrm { S O } } \) is the tight-binding lattice spacing. The fragmented nature of the topological phase di-agram seen in (b) cannot be explained in a p-wave picture. See Appendix B for a discussion of corresponding experimen-tal parameters.

FIG. 3. (Color online) \( \mu \) vs. \( V _ { 0 } \; = \; \sqrt { \gamma / a ^ { 2 } } \) vs. Q for a multichannel RSW wire. The black lines, which represent topological phase boundaries, are obtained analytically us-ing Eq. (7). The background red-white colors are obtained using tight-binding numerical simulations with \( L = 6 0 0 0 0 a \). In both cases, \( W = 4 a \), \( \alpha _ { \mathrm { S O } } \, = \, 0 . 0 1 5 \hbar / m a \),\( \Delta = 0 . 2 0 t \) and \( B = 0 . 3 5 t \), where \( t = \hbar ^ { 2 } / 2 m a ^ { 2 } \) is the tight-binding hopping parameter and a is the TB lattice spacing. See Appendix B for a discussion of corresponding experimental parameters.

# B. Numerical simulations

In this section, we obtain the topological index of a disordered multichannel wire numerically and compare it with our analytical results from the previous section. For our numerical simulations, we take the TB form of the Hamiltonian in Eq. (1) whose details can be found in the Appendix B. We consider a wire of length \( L \gg l _ { \mathrm { M F P } } \), \( \mathcal { E } \) or \( l _ { \mathrm { S O } } \), with metallic leads (\( \alpha _ { \mathrm { S O } } = 0 \),\( \Delta \) = 0 and \( V ( x , y ) \) = 0 in the leads). We use the results of Fulga et al. to obtain the topological quantum number of the disordered multi-channel wire from the scattering matrices of the wires.37 For a semi-infinite wire in the symmetry class D, the topological charge is given by \( Q _ { \mathrm { D } } \, = \, \mathrm { d e t } ( r ) \) where r is the reflection matrix. For a quasiparticle insulator, this determinant can only take the values \( \pm \) 1. However, for a finite system this determinant can in general have any value in the \( \lceil - 1 , 1 \)] interval. We obtain the reflection ma-trix of the TB system in our numerical TB simulations using the Kwant library62 and then use this relation to calculate \( Q _ { \mathrm { D } } \). We plot the topological phase diagram in Figures 2 and 3, where the red and white colors represent \( Q _ { \mathrm { D } } = - 1 \) and \( Q _ { \mathrm { D } } = + 1 \) respectively.

Figure 2 exemplifies our central result given in Eq. (11). We find that for a nearly depleted wire (Fig. 2a), the topological phase merely shifts to the higher values of the chemical potential in agreement with Ref.34. For higher chemical potentials/doping, we ob-serve a fragmented topological phase diagram (Fig. 2b). We find good agreement with our analytical results from Eq. (11). We note in passing that, this fragmenta-tion cannot be explained by a simple p-wave picture as these topological phases arise despite the incomplete spin-polarization of the wire under a low magnetic field. For a full phase diagram over the entire bandwidth, but for slightly different material parameters, see Figure 8, where the reentrant phases are apparent.

In Fig. 3, we plot the topological number \( Q _ { \mathrm { D } } \) as a func-tion of \( \mu \) and the disorder strength \( \sqrt { \gamma / a ^ { 2 } } \) for a constant \( B _ { \mathrm { Z e e m a n } } \) over the full TB bandwidth. The reentrant na-ture of the topological phase diagram can also be seen in this plot, for example, by following the \( \mu \) = 1.5 line as \( \gamma \) is increased. As the disorder strength increases, series of topological transitions occur, similar to the PW wire.42 However, unlike the PW wire, the number of transitions is given by \( \bar { N } ( \mu + \epsilon ) + \bar { N } ( \mu - \epsilon ) \) rather than \( \bar { N } ( \mu ) \), with \( \bar { N } ( \mu ) \) defined as \( \bar { N } ( \mu _ { \mathrm { e f f } } ) \, = \, \lfloor W k _ { F } ( \mu _ { \mathrm { e f f } } ) / \pi \rfloor \). For further discussion of the emergence of effective p-wave picture at high magnetic fields, see Appendix C.

# III. CONCLUSION

In summary, we investigate the effect of disorder in multichannel Rashba SOC proximity-induced topological superconductor nanowires (RSW nanowires) at experi-mentally relevant parameter ranges. We derive formulae that determine all topological phase boundaries of a mul-


tichannel disordered RSW wire. We test these formulae with numerical tight-binding simulations at experimen-tally relevant parameter ranges and find good agreement without any fitting parameters. We show that there are additional topological transitions for the RSW wires lead-ing to a richer phase diagram with further fragmentaliza-tion beyond that of the p-wave models.

# ACKNOWLEDGMENTS

This work was supported by funds of the Erdal ˙Ino¨n¨u chair, by T¨U B˙ITAK under grant No. 110T841, by the Foundation for Fundamental Research on Matter (FOM) and by Microsoft Corporation Station Q. ˙IA is a mem-ber of the Scien¨ce Academy—Bilim Akademisi—Turkey;BP, AT and OB thank The Science Academy—Bilim Akademisi—Turkey for the use of their facilities through-out this work.

# Appendix A: Mean free path

We consider a long wire along the x-axis, having a length of L along the x-direction and a width of W along the y-direction and metallic leads at the end, with a Gaussian disorder of the form \( \left\langle V ( \mathbf { r } ) \, V ( \mathbf { r } ^ { \prime } ) \right\rangle = \gamma \, \delta ( \mathbf { r } - \mathbf { r } ^ { \prime } ) \). We obtain the ensemble average of the matrix element be-tween the \( n ^ { \mathrm { t h } } \) and \( l ^ { \mathrm { t h } } \) transverse channels as \( k ( k _ { x } , n ) \rightarrow \)\( k ^ { \prime } ( k _ { x } ^ { \prime } , l ) \) as

\[ \big \langle | V _ { k k ^ { \prime } } | ^ { 2 } \big \rangle = \frac { \gamma } { L W } \left( 1 + \frac { \delta _ { n , l } } { 2 } \right) . \qquad \qquad ( \mathrm { A 1 } ) \]

We then use Fermi’s Golden Rule to calculate the in-verse lifetime of a momentum state k, \( \tau _ { k \rightarrow k ^ { \prime } } ^ { - 1 } \) :

\[ \begin{array} { r l r } & { } & { \left\langle l _ { \mathrm { M F P } ( k _ { x } , n \rightarrow k _ { x } ^ { \prime } , l ) } ^ { - 1 } \right\rangle = \left( \frac { 1 } { \hbar } \frac { \partial \varepsilon _ { k } } { \partial k _ { x } } \right) ^ { - 1 } \times \frac { 2 \pi } { \hbar } \frac { \gamma } { L W } \times } \\ & { } & { \left( 1 + \frac { \delta _ { n , l } } { 2 } \right) \, \rho ( \varepsilon _ { k ^ { \prime } } ) . \qquad ( \mathrm { A 2 } ) } \end{array} \]

where \( \varepsilon _ { k } \) gives the dispersion relation and \( \rho ( \varepsilon _ { k } ) \) is the density of states. We then sum over the initial and final states \( k ^ { \prime } \) in Eq. (A2) to obtain the total inverse MFP:

\[ \left\langle l _ { \mathrm { M F P } } ^ { - 1 } \right\rangle = \sum _ { k _ { x } , k _ { y } ; k _ { x } ^ { \prime } , k _ { y } ^ { \prime } } \left\langle l _ { \mathrm { M F P } ( k _ { x } , n \rightarrow k _ { x } ^ { \prime } , l ) } ^ { - 1 } \right\rangle \qquad \mathrm { ( A 3 ) } \]

We first apply Eq. (A3) to a free electron dispersion of the form \( \varepsilon ( k ) = \bar { h } ^ { 2 } k ^ { 2 } / 2 m = \hbar ^ { 2 } / 2 m \, ( k _ { n , x } ^ { 2 } + n ^ { 2 } \bar { \pi } ^ { 2 } / W ^ { 2 } ) \) for \( n \, \in \, 1 , \dots , \bar { N } \) where \( \bar { N } ( \mu _ { \mathrm { e f f } } ) \; = \; \lfloor W k _ { F } ( \varepsilon ) / \pi \rfloor \). The resulting total ensemble-averaged inverse MFP is

FIG. 4. \( \zeta _ { N \rightarrow N + 1 } ^ { - 1 } / ( N + 1 ) \) vs. N.

\[ \begin{array} { c } { { \langle l _ { \mathrm { M F P } } ^ { - 1 } \rangle = \displaystyle \sum _ { n = 1 } ^ { \bar { N } } \sum _ { l = 1 } ^ { \bar { N } } \int \frac { d k _ { n , x } ^ { \prime } } { \pi / L } \, \frac { m ^ { 2 } } { \hbar ^ { 4 } } \frac { 2 \gamma W } { L \pi } \, \left( 1 + \frac { \delta _ { n l } } { 2 } \right) \, \frac { \pi } { W } \times } } \\ { { \delta ( k _ { l , x } ^ { \prime } \pm \sqrt { 2 m \varepsilon / \hbar ^ { 2 } - l ^ { 2 } \pi ^ { 2 } / W ^ { 2 } } ) } } \\ { { \sqrt { 2 m \varepsilon / \hbar ^ { 2 } - n ^ { 2 } \pi ^ { 2 } / W ^ { 2 } } \, \sqrt { 2 m \varepsilon / \hbar ^ { 2 } - l ^ { 2 } \pi ^ { 2 } / W ^ { 2 } } } } \\ { { = \frac { 4 m ^ { 2 } \gamma } { \hbar ^ { 4 } \pi k _ { F } } \, \zeta _ { N } ^ { - 1 } , \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ \ ( \mathrm { A 4 } ) } } \end{array} \]

where \( k _ { F } = \sqrt { 2 m \varepsilon / \hbar ^ { 2 } } \) is the Fermi wavevector,

\[ \zeta _ { N } ^ { - 1 } = \frac { 3 \bar { N } } { 2 } \sum _ { n = 1 } ^ { \bar { N } } \eta _ { n } ^ { 2 } + 2 \bar { N } \sum _ { n = 1 } ^ { \bar { N } } \sum _ { l > n } ^ { \bar { N } } \eta _ { n } \, \qquad ( \mathrm { A 5 } ) \]

and \( \begin{array} { r } { \eta _ { n } = \left( \frac { W ^ { 2 } k _ { F } ^ { 2 } } { \pi ^ { 2 } } - n ^ { 2 } \right) ^ { - \frac { 1 } { 2 } } } \end{array} \), in agreement with Eq.(8) in the supporting online material of Rieder et al.42. The value of \( \zeta _ { N } \) just below the transition \( N \to N + \) 1 (denoted \( \zeta _ { N \rightarrow N + 1 } \) is plotted in Figure 4.

We now derive the MFP for a TB dispersion relation given by

\[ \varepsilon ( k _ { x , n } ) = 2 t \ ( 2 - \cos \left( k _ { x , n } a \right) - \cos \left( n \pi a / W \right) ) \, . \; \; \; \; ( \mathrm { A 6 } ) \]

The number of channels is given by \( \bar { N } \)\( \lfloor \left( W / \pi a \right) \operatorname { a r c c o s } \left( 1 - \varepsilon / 2 t \right) \rfloor \) for 0 \( < \varepsilon < 4 t \) and by \( \bar { N } = \)\( \lfloor ( W / \pi a ) \operatorname { a r c c o s } \left( 1 - ( 4 - \varepsilon / 2 t ) \right) \rfloor \) for 4 \( t < \varepsilon < 8 t \). The resulting disorder-averaged inverse MFP reads:

\[ \left\langle ( l _ { \mathrm { M F P } } ^ { \mathrm { T B } } ) ^ { - 1 } \right\rangle = \frac { \gamma } { \bar { N } W a ^ { 2 } t ^ { 2 } } \, ( \zeta _ { N } ^ { \mathrm { T B } } ) ^ { - 1 } \qquad \qquad ( \mathrm { A 7 } ) \]

where the dimensionless \( ( \zeta _ { N } ^ { \mathrm { T B } } ) ^ { - 1 } \) is given by

\[ ( \zeta _ { N } ^ { \mathrm { T B } } ) ^ { - 1 } = \frac { 3 \bar { N } } { 2 } \sum _ { n = 1 } ^ { \bar { N } } ( \eta _ { n } ^ { \mathrm { T B } } ) ^ { 2 } + \eqno ( \mathrm { A 8 } ) \]


# 7、合并所有者权益变动表

本期金额

单位：元

项目	2021 年度

归属于母公司所有者权益	少数股
东权益	所有者
权益合
计

股本	其他权益工具	资本公
积	减：库
存股	其他综
合收益	专项储
备	盈余公
积	一般风
险准备	未分配
利润	其他	小计

优先
股	永续
债	其他

一、上年期末余额	346,00
0,000.
00				561,025
,368.32				30,118,8
59.35		430,767
,050.68		1,367,91
1,278.35		1,367,9
11,278.
35

 加：会计政策变
更

    前期差错
更正

    同一控制
下企业合并

    其他

二、本年期初余额	346,00
0,000.				561,025
,368.32				30,118,8
59.35		430,767
,050.68		1,367,91
1,278.35		1,367,9
11,278.


	00														35

三、本期增减变动金
额（减少以“－”号
填列）									3,297,3
33.26		44,658,
932.79		47,956,2
66.05	3,997,1
94.58	51,953,
460.63

（一）综合收益总额											51,416,
266.05		51,416,2
66.05	-2,805.4
2	51,413,
460.63

（二）所有者投入和
减少资本														4,000,0
00.00	4,000,0
00.00

1．所有者投入的普
通股														4,000,0
00.00	4,000,0
00.00

2．其他权益工具持
有者投入资本

3．股份支付计入所
有者权益的金额

4．其他

（三）利润分配									3,297,3
33.26		-6,757,3
33.26		-3,460,0
00.00		-3,460,0
00.00


the fair value gains on our investment properties were RMB373.3 million, RMB242.4 million, RMB139.3 million, RMB115.0 million and RMB121.3 million, respectively.

Fair value gains or losses do not, however, change our cash position as long as the relevant investment properties are held by us and, therefore, do not increase our liquidity in spite of the increased profit. The amount of revaluation adjustments has been, and will continue to be, subject to market fluctuations. We cannot assure you that changes in the market conditions will continue to create fair value gains on our investment properties or that the fair value of our investment properties will not decrease in the future. In particular, the fair value of our investment properties could decline in the event that the property industry of China experiences a downturn. Any significant decreases in the fair value of our investment properties may materially and adversely impact our profit.

# The illiquidity of property investments and the lack of alternative uses of hotel and retail properties could significantly limit our ability to respond to adverse changes in the performance of our investment properties

Because property investments in general are relatively illiquid, our ability to promptly sell one or more of our investment properties in response to changing economic, financial and investment conditions is limited. The property market is affected by various factors, such as general economic conditions, availability of financing, interest rates, supply and demand, many of which are beyond our control. We cannot predict whether we will be able to sell any of our investment properties for the price or on the terms set by us, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a purchaser and to complete the sale of a property. In addition, if we sell an investment property during the term of that property’s management agreement or tenancy agreement, we may have to pay termination fees to our hotel management partners or our anchor retail tenants.

In addition, hotels and retail properties may not be readily converted to alternative uses if they became unprofitable due to competition, age, decreased demand or other factors. The conversion of hotel and retail properties to alternative uses generally requires substantial capital expenditures. We cannot assure you that we will have sufficient funds to carry out the conversion. These factors and any others that would impede our ability to respond to adverse changes in the performance of our hotels and retail properties could affect our ability to compete against our competitors and results of operations.

# If our provisions for LAT prove to be insufficient, our financial results would be adversely affected

Our properties developed for sale are subject to LAT. Under PRC tax laws and regulations, all income derived from the sale or transfer of land use rights, buildings and their ancillary facilities in the PRC is subject to LAT at progressive rates ranging from 30% to 60% on the appreciation of land value. LAT is calculated based on proceeds received from the sale of properties less deductible expenditures as provided in the relevant tax laws. We make provisions for the full amount of applicable LAT in accordance with the relevant PRC tax laws and regulations from time to time pending settlement with the relevant tax authorities. As we often develop our projects in phases, deductible items for the calculation of LAT, such as land costs, are apportioned among different phases of development. Provisions for LAT are made on our own estimates based on, among


other things, our own apportionment of deductible expenses which is subject to final confirmation by the relevant tax authorities upon settlement of the LAT. We only prepay a portion of such provisions each year as required by the local tax authorities. As of December 31, 2010, 2011 and 2012 and September 30, 2013, we made provisions for LAT in the amounts of RMB168.3 million, RMB150.7 million, RMB110.2 million and RMB48.4 million, respectively. As of the Latest Practicable Date, we had not received any official confirmation or exemption with respect to our LAT liabilities for any period despite our LAT prepayments during the years. We cannot assure you that the relevant tax authorities will agree with our calculation of LAT liabilities, nor can we assure you that the LAT provisions will be sufficient to cover our LAT obligations in respect of our past LAT liabilities. If the relevant tax authorities determine that our LAT liabilities exceed our LAT prepayments and provisions, and seek to collect that excess amount, our cash flow, results of operations and financial condition may be materially and adversely affected. In addition, as we continue to expand our property developments, we cannot assure you that our provision for LAT obligations based on our estimates in new markets will be sufficient to cover our actual LAT obligations. As there are uncertainties as to when the tax authorities will enforce the LAT collection and whether it will apply the LAT collection retrospectively to properties sold before the enforcement, any payment as a result of the enforcement of LAT collection may significantly restrict our cash flow position, our ability to finance our land acquisitions and to execute our business plans.

# Our future growth partly depends on our ability to develop our business in other regions of China where we currently have no operations

In order to achieve sustainable growth, we need to continue to seek development opportunities in select regions in the PRC with potential for growth where we have no existing operations. However, our experience as a property developer in our existing markets may not be applicable in other regions. We may face intense competition from developers with established experience or presence in these new markets, and from other developers with similar expansion plans. In addition, business expansion or land acquisition requires a significant amount of capital investment and human resources, and may divert our existing resources including the attention of our management. Additionally, we may not be able to hire, train or retain sufficient talent to manage our operations in the new markets. As a result, our inability to develop, manage and integrate new projects and businesses may adversely affect our operating efficiency and the success of our expansion plans, which consequently may adversely affect our business, financial conditions and future prospects.

# Increasing competition in the PRC, particularly from developers of properties similar to ours in the second- and third-tier cities where we operate, may adversely affect our business and financial condition

In recent years, a large number of property developers have undertaken property development and investment projects in second- and third-tier cities in China, including property developments similar to ours, with commercial and residential properties integrated to varying degrees. Our major competitors include large national and regional property developers and overseas developers, some of which may have better track records and greater financial and other resources than us. In addition, we also compete with small local property developers. Intense competition among property developers in second- and third-tier cities in China for land, financing, raw materials and skilled management and labor resources may result in increased cost for land acquisition and construction, an oversupply of properties available for sale and a decrease in property


“Guandgong Institute”	 China EneriGgy Enigneerng rouGp uandEligong ectrc
Power Design Institute Co., Ltd. (中國能源建設集團廣東
省電力設計研究院有限公司), a limited liability company
established in the PRC on November 8, 2001 and a
wholly-owned subsidiary of our Company

“Guandgong Power Enigneering”	 China EneriGgy Enigneerng rouGp uandEligong ectrc
Power Eniigneerng Co., Ltd. (中國能源建設集團廣東電
力工程局有限公司), a limited liability company
established in the PRC on August 26, 1989 and a
wholly-owned subsidiary of our Company

“Guandhgong Termal Power”	 China EneriGgy Enigneerng rouGp uandThl
gong ermaPower EnigneerinCg o., Ltd. (中國能源建設集團廣東火
電工程有限公司), a limited liability company established
in the PRC on May 12, 1986 and a wholly-owned
subsidiary of our Company

“Guangxi Water & Power Group”	 Guangxi Water Conservanc &ly Eectric Power
Construction Group Co., Ltd. (廣西水利電力建設集團有
限公司), a limited liability company established in the
PRC on November 3, 1995 and a wholly-owned
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“H Share(s)”	 overseas listed foreign shares in the share caiptal of our
Company with a nominal value of RMB1.00 each, which
are to be subscribed for and traded in HK dollars and
listed on the Hong Kong Stock Exchange

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“Heilongjiang Institute”	 China EneriGgy Eniigneerng rouHlp eionigjanElg ectrc
Power Design Institute Co. Ltd. (中國能源建設集團黑龍
江省電力設計院有限公司), a limited liability company
established in the PRC on April 24, 1993 and a wholly-
owned subsidiary of our Company

“Heilongjiang Thermal Power 1
Company”	China EneriG
gy Enigneerng rouHlp eionigjanNg o.1Thermal Power EniCgneerinLg o., td. (中國能源建設集
團黑龍江省火電第一工程有限公司), a limited liability
company established in the PRC on April 16, 1996 and a
wholly-owned subsidiary of our Company


“Heilongjiang Thermal Power 3
Company”	China EneriG3gy Enigneerng rouHlp eionigjanNg o.
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團黑龍江省火電第三工程有限公司), a limited liability
company established in the PRC on January 1, 1962 and
a wholly-owned subsidiary of our Company

“HK$” or “HK dollars”	 Hong Kong dollars and cents, respectively, the lawful
currency of Hong Kong

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“Hong Kong Offer Shares”	 the 440,000,000 H Shares initially offered by our
Company for subscription at the Offer Price pursuant to
the Hong Kong Public Offering (subject to reallocation as
described in “Structure of the Global Offering”)

“Hong Kong Public Offering”	 the offer of the Hong Kong Offer Shares for subscription
by the public in Hong Kong (subject to adjustment as
described in “Structure of the Global Offering”) at the
Offer Price lus brokperage, SFC transaction levy and
Hong Kong Stock Exchange trading fee, on and subject to
the terms and conditions described in this prospectus and
on the Alipcation Forms as fpurther described in
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# Rishi Sunak

That is an excellent point. My right hon. Friend the Secretary of State for Environment, Food and Rural Affairs is engaged in urgent talks with supermarkets to ensure the security of our food supply and to improve accessibility, particularly for those who may now be at home.

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# Jess Phillips (Birmingham, Yardley) (Lab)

I simply want to ask the Chancellor whether he could live on £94.25 per week. It is a simple question: has he ever lived on that, and could he live on that, because that is what most of my constituents are currently having to live on?

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# Rishi Sunak

We believe in a strong safety net during a short period so that people can get through this, which is why we have strengthened that safety net with £1 billion of extra investment to increase generosity and accessibility.

# Share

# Sir Iain Duncan Smith (Chingford and Woodford Green) (Con)

I commend my right hon. Friend the Chancellor for his bold measures today, which will encourage many small businesses to believe that the Government are on their side. There is more to do, I know. Can I also encourage him, though, in his statement to come, on further employment measures to bear it in mind that the most important thing we can do is to do everything we can to keep people in employment? That will help to deliver growth.

One area I want to raise with my right hon. Friend, which has not really been touched on, although I think the shadow Chancellor raised it, is the voluntary sector. The Centre for Social Justice has done some quick work on this and come to the conclusion that the


smallest elements of the voluntary sector, which have no reserves, are going to lose about£400 million during this next few months, and they are going to be the ones that are called upon most for support in the community for those who suffer. Can I please ask him to look at this very carefully and see what we can do to give them that cash aid?

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# Rishi Sunak

My right hon. Friend knows better than most the value of making sure that people have the security of a good job, and I commend him for all his work in that regard. I agree with him wholeheartedly. My right hon. Friend the Communities Secretary is talking already to the voluntary sector and we stand ready to provide the support that may be required.

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# Edward Miliband (Doncaster North) (Lab)

I recognise, as I am sure the whole House does, the Chancellor’s wish to get any employment support scheme right, but he will recognise, as the shadow Chancellor said from the Front Bench, that people are facing redundancy right now. May I suggest two things that he can say tonight to help ward off those redundancies? The first is that he accepts the principle that Government should cover a substantial proportion of people’s wages, because it is in their interests and those of the economy and their businesses. The second is that he undertakes to come back not next week but by Friday of this week with a clear plan developed with unions and businesses.

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# Rishi Sunak

I say to the right hon. Gentleman that it is more important that we get this right than rush to things that will not work, but he can rest assured that we agree wholeheartedly with the ambitions of what he says, but delivering them and getting it right are vital and that is what we are working on doing.


“close associate(s)”
「緊密聯繫人」	has the meaning ascribed to it under the GEM Listing Rules
具有GEM上市規則所賦予的涵義

“Companies Ordinance”
「公司條例」	the Companies Ordinance (Cap. 622 of the Laws of Hong Kong), as
amended, supplemented or modified from time to time
經不時修訂、補充或修改的香港法例第622章公司條例

“Company”, “our Company”, “we” or “us”
「本公司」或「我們」	Sunlight (1977) Holdings Limited (日光 (1977) 控股有限公司), an exempted
company incorporated in the Cayman Islands on 21.9.2017 with limited
liability
日光(1977)控股有限公司，於2017年9月21日在開曼群島註冊成立的獲豁免有
限公司

“Controlling Shareholder(s)”
「控股股東」	has the meaning ascribed to it under the GEM Listing Rules and unless the
context requires otherwise, refers to Mr. LS Chua, Ms. Chua, Mr. LC Chua
and YJH Group. Mr. LS Chua, Ms. Chua, Mr. LC Chua and YJH Group are a
group of controlling shareholders
具有GEM上市規則所賦予的涵義，除非文義另有所指，指蔡良聲先生、蔡女
士、蔡良书先生及YJH集团。蔡良声先生、蔡女士、蔡良书先生及YJH集团为
一組控股股東

“core connected person(s)”
「核心關連人士」	has the meaning ascribed to it under the GEM Listing Rules
具有GEM上市規則所賦予的涵義

“COVID-19”
「COVID-19」	the Coronavirus Disease 2019 (COVID-19), a respiratory illness caused by a
novel coronavirus that was first identified during an outbreak in Wuhan, Hubei
Province, the PRC
2019冠狀病毒病(COVID-19)，一種由新型冠狀病毒引起的呼吸系統疾病，於中
國湖北省武漢市疫情中首度被發現

“Deed of Non-competition”
「不競爭契據」	the deed of non-competition dated 21.3.2018 and executed by our
Controlling Shareholders in favour of our Company (for ourselves and as
trustee for our subsidiaries)
控股股東以本公司為受益人（為本公司及作為其附屬公司的受託人）所簽立日期
為2018年3月21日的不競爭契據

“Director(s)”
「董事」	the director(s) of our Company
本公司董事

“ERP”
「ERP」	enterprise resource planning
企業資源計劃

“FY2019”
「2019財政年度」	financial year ended 30.9.2019
截至2019年9月30日止財政年度

“FY2020”
「2020財政年度」	financial year ending 30.9.2020
截至2020年9月30日止財政年度


“GDP”
「本地生產總值」	gross domestic product
本地生產總值

“GEM”
「GEM」	GEM operated by the Stock Exchange
由聯交所運作的GEM

“GEM Listing Rules”
「GEM上市規則」	the Rules Governing the Listing of Securities on GEM, as amended,
supplemented or modified from time to time
經不時修訂、補充或修改的GEM證券上市規則

“GFA”
「建築面積」	gross floor area
建築面積

“Group”, “our Group”, “we”, “our” or “us”
「本集團」或「我們」	our Company and our subsidiaries or, where the context so requires, with
respect to the period before which our Company became the holding
company of our current subsidiaries, our Compan’ys current subsidiaries or
the businesses operated by such subsidiaries or their predecessors (as the
case may be)
本公司及其附屬公司，或倘文義另有所指，就本公司成為其現有附屬公司的控
股公司之前期間，則指本公司現有附屬公司或該等附屬公司或其前身公司（視
情況而定）進行的業務

“HKD” or “HK$”
「港元」	Hong Kong dollars and cents, the lawful currency of Hong Kong
香港法定貨幣港元及港仙

“Hong Kong” or “HK”
「香港」	the Hong Kong Special Administrative Region of the PRC
中國香港特別行政區

“IFRSs”
「國際財務報告準則」	International Financial Reporting Standards issued by the International
Accounting Standards Board
國際會計準則委員會頒佈的國際財務報告準則

“independent third party(ies)”
「獨立第三方」	party(ies) which are not connected person(s) of our Company
並非本公司關連人士的人士

“JTC”
「JTC」	JTC Corporation (formerly known as Jurong Town Corporation), a statutory
board under the Ministry of Trade and Industry of Singapore
JTC Corporation（前稱Jurong Town Corporation），新加坡貿易工業部下屬法定
部門

“jumbo roll tissue” or “JRT”
「大卷裝衛生紙」	toilet tissue that is commonly used in public toilet cubicles of commercial
buildings
商業大廈公廁常用廁紙

“Listing”
「上市」	the listing of the Shares on GEM
股份於GEM上市