# Our customers may reduce their demand for aluminum extrusion products in favor of alternative materials.

Our aluminum extrusion products compete with products made from other materials, such as plastic, wood or other metal composites, for various applications. The willingness of customers to accept substitutions for aluminum or the ability of major customers to exert leverage in the marketplace to reduce the pricing for aluminum extrusion products could adversely affect the demand for our products and thus adversely affect our business, financial condition and results of operations.

# We derive a substantial portion of our sales from China.

A substantial portion of our sales are generated from China. During the Track Record Period, we generated approximately 92.8%, 94.7% and 96.7% of our total revenue, respectively, from sales to customers in China. To boost our sales revenue, we seek to increase our market share in overseas markets; however, we anticipate that sales of our products in China will continue to represent a substantial proportion of our total sales in the near future. Any significant decline in the condition of the PRC economy could, among other things, reduce consumption of our products which in turn would have a material adverse effect on our business, financial condition and results of operations.

# We had net current liabilities as of December 31, 2006 and 2007.

As of December 31, 2006 and 2007, we had net current liabilities of approximately RMB260.9 million and RMB207.0 million, respectively. We had net current liabilities as of each of these balance sheet dates mainly due to (i) our large amounts of borrowings, comprising mainly short-term borrowings from commercial banks in China which are the primary source of financing for our Company and offer interest rates that are generally lower than those of long-term loans, and (ii) our issuance of short-term debentures. The amount of payment obligations of our bank borrowings and short-term debentures in the 12-month period following the Listing is estimated to be approximately RMB4.8 billion. Our net current liabilities position exposes us to liquidity risk, and we may have net current liabilities in the future. Our future liquidity, the payment of trade and other payables and the repayment of our outstanding bank borrowings as and when they become due will primarily depend on our ability to maintain adequate cash inflows from operating activities, cash and cash equivalents, and our access to further financial resources to fulfill our short-term payment obligations, which will be affected by our future operating performance, prevailing economic conditions, and financial, business and other factors, many of which are beyond our control.

# Our business, reputation and brand may be materially and adversely affected by actions taken by our distributors.

During the Track Record Period, our sales to distributors accounted for approximately 39.9%, 31.9% and 12.9% of our total revenue, respectively. As of December 31, 2008, we had 17 distributors responsible for domestic sales in China and four distributors responsible for our overseas markets. Save as disclosed in the section headed “Relationships with Our Controlling Shareholder and Continuing Connected Transactions,” our Directors have confirmed that during the Track Record Period, all of our distributors were Independent Third Parties. It has been our policy that our distributors may not take any improper or illegal actions, commit bribery or use any payments or other means prohibited under the relevant anti-corruption laws in the PRC and thej urisdictions where they operate or prohibited under the agreed terms

between us and the distributors to promote or sell our products, and that we will terminate our relationship with them if they engage in such activities. However, our distributors could take one or more of the following actions, any of which could have a material adverse effect on our business, reputation and brand:

• breach our agreements with them, including by selling products that compete with our products that they have contracted to sell for us or by selling our products outside their designated territory, possibly in violation of the exclusive distribution rights of other distributors;

• unauthorized use or misuse of our brand name;

• fail to adequately promote our products;

• fail to provide proper training and service to the end-users of our products; or

• violate the anti-corruption laws of China, the United States or other countries.

Non-compliance by our distributors with our agreements or any improper or illegal actions taken by our distributors could harm our corporate image and disrupt our sales. We ultimately have limited control over the actions of our distributors who are Independent Third Parties, and cannot assure you that they will not breach their agreements with us or violate relevant laws. We are not aware of any breach of agreement, or improper or illegal actions taken by our distributors during the Track Record Period.

If our distributors violate PRC laws or otherwise engage in illegal practices with respect to their sales or marketing of our products, our brand and reputation, our sales activities or the price of our Shares could be adversely affected if we become the target of any negative publicity as a result of actions taken by our distributors.

# The global financial markets have experienced significant deterioration and volatility recently, which have had negative repercussions on the global economy and, as a result, may adversely affect our business operations.

Certain recent adverse financial developments have impacted the global financial markets. These developments include a general slowing of economic growth both in the U.S. and globally, substantial volatility in equity securities markets, and volatility and tightening of liquidity in credit markets. While it is difficult to predict how long these conditions will exist and which markets and businesses of our Company may be affected, these developments could continue to present risks for an extended period of time for our Company, including a potential slowdown in our sales to customers, increase in interest expenses on our bank borrowings, or reduction of the amount of banking facilities currently available to us. If this economic downturn continues, our business, financial condition and results of operations may be adversely affected.


	Group

2016	2015

RM’000	RM’000

(a) Capital expenditure commitments

Property, plant and equipment and investment properties

- Authorised and contracted for	1,147,134	2,159,183

- Authorised but not contracted for	2,349,600	1,407,287

	3,496,734	3,566,470

(b)   Joint venture

Share of capital commitment of joint venture	145,648	150,404

(c)   Banker guarantees

Amount of banker guarantees obtained	28,767	27,914

For the purpose of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subjected to common control or common significant influence. Related parties may be individuals or other entities.

Related parties also include key management personnel defined in Note 31.

Other than disclosed elsewhere in the financial statements, transactions carried out on terms agreed with the related parties are as follows:

	Group

2016	2015

RM’000	RM’000

With substantial shareholders and their related parties

Sales and provision of services	343,672	257,547

Purchases and consumption of services	(45,840)	(45,880)

With key management personnel and their related parties

Sales and provision of services	17,594	27,250

Purchases and consumption of services	(74,243)	(63,382)

With associates

Rental income	405	282

With director of a subsidiary

Consultancy fees paid	(294)	(254)

# Related party transactions (continued)

	Company

2016	2015

RM’000	RM’000

With subsidiaries

Dividend income	41,971	106,800

Share-based payment transactions	43,378	32,959

Significant related party balances related to the above transactions are as follows:

	Group

2016	2015

RM’000	RM’000

Trade and other receivables

Substantial shareholders and their related parties	50,109	36,606

Key management personnel and their related parties	8,276	5,958

	58,385	42,564

Trade and other payables

Substantial shareholders and their related parties	(4,108)	(3,599)

Key management personnel and their related parties	(15,918)	(6,696)

	(20,026)	(10,295)

These transactions have been entered into in the normal course of business and have been established under negotiated terms.

From time to time, directors and key management personnel of the Group, or their related parties, may receive services and purchase goods from the Group. These services and purchases are on negotiated basis.


In accordance with the Articles, the Company is entitled to sell any of the shares of a member who is untraceable if:

(i) all cheques or warrants, being not less than three in total number, for any sum payable in cash to the holder of such shares have remained uncashed for a period of 12 years;

(ii) upon the expiry of the 12 years and 3 months period (being the 3 months notice period referred to in sub-paragraph (iii)), the Company has not during that time received any indication of the existence of the member; and

(iii) the Company has caused an advertisement to be published in accordance with the rules of the stock exchange of the Relevant Territory (as defined in the Articles) giving notice of its intention to sell such shares and a period of three months has elapsed since such advertisement and the stock exchange of the Relevant Territory (as defined in the Articles) has been notified of such intention. The net proceeds of any such sale shall belong to the Company and upon receipt by the Company of such net proceeds, it shall become indebted to the former member of the Company for an amount equal to such net proceeds.

Pursuant to the Articles, provided that it is not prohibited by and is otherwise in compliance with the Companies Law, if warrants to subscribe for shares have been issued by the Company and the Company does any act or engages in any transaction which would result in the subscription price of such warrants being reduced below the par value of the shares to be issued on the exercise of such warrants, a subscription rights reserve shall be established and applied in paying up the difference between the subscription price and the par value of such shares.

The Company was incorporated in the Cayman Islands as an exempted company on 5 August 2013 subject to the Companies Law. Certain provisions of Cayman Islands company law are set out below but this section does not purport to contain all applicable qualifications and exceptions or to be a complete review of all matters of the Companies Law and taxation, which may differ from equivalent provisions inj urisdictions with which interested parties may be more familiar.

As an exempted company, the Company must conduct its operations mainly outside the Cayman Islands. Moreover, the Company is required to file an annual return each year with the Registrar of Companies of the Cayman Islands and pay a fee which is based on the amount of its authorized share capital.

In accordance with the Companies Law, a Cayman Islands company may issue ordinary, preference or redeemable shares or any combination thereof. The Companies Law provides that where a company issues shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account, to be called the ‘‘share premium account’’. At the option of a company, these provisions may not

apply to premiums on shares of that company allotted pursuant to any arrangements in consideration of the acquisition or cancellation of shares in any other company and issued at a premium. The Companies Law provides that the share premium account may be applied by the company subject to the provisions, if any, of its memorandum and articles of association, in such manner as the company may from time to time determine including, but without limitation, the following:

(i) paying distributions or dividends to members;

(ii) paying up unissued shares of the company to be issued to members as fully paid bonus shares;

(iii) any manner provided in section 37 of the Companies Law;

(iv) writing-off the preliminary expenses of the company; and

(v) writing-off the expenses of, or the commission paid or discount allowed on, any issue of shares or debentures of the company.

Notwithstanding the foregoing, the Companies Law provides that no distribution or dividend may be paid to members out of the share premium account unless, immediately following the date on which the distribution or dividend is proposed to be paid, the company will be able to pay its debts as they fall due in the ordinary course of business.

It is further provided by the Companies Law that, subject to confirmation by the court, a company limited by shares or a company limited by guarantee and having a share capital may, if authorized to do so by its articles of association, by special resolution reduce its share capital in any way.

The Articles include certain protections for holders of special classes of shares, requiring their consent to be obtained before their rights may be varied. The consent of the specified proportions of the holders of the issued shares of that class or the sanction of a resolution passed at a separate meeting of the holders of those shares is required.

# (c) Financial assistance to purchase shares of a company or its holding company

There are no statutory prohibitions in the Cayman Islands on the granting of financial assistance by a company to another person for the purchase of, or subscription for, its own, its holding company’s or a subsidiary’s shares. Therefore, a company may provide financial assistance provided the directors of the company when proposing to grant such financial assistance discharge their duties of care and acting in good faith, for a proper purpose and in the interests of the company. Such assistance should be on an arm’s-length basis.


下表概述於往績記錄期間就各檢測類型進行的診斷檢測數目。

自2020年開始，COVID-19檢測佔我們收益的很大一部分。下表概述於往績記錄期間COVID-19檢測及非COVID-19檢測所產生的收益、毛利及毛利率。


# （2）本期合同资产计提减值准备情况

项目	本期计提	本期转回	本期转销/核销	原因

智能项目		9,846.57

合计		9,846.57		--

# 9、一年内到期的非流动资产

一年内到期的长期应收款已计提坏账36,087,696.95元，一年内到期的贷款已计提坏账11,599,485.02元。

# 11、发放贷款和垫款

# 贷款按类别列示如下：

# 贷款按账龄分析列示如下：


Items	Amount for the
current period	 Description

Impairment provision of assets for force majeure such as
natural calamities

Gains or losses from debt restructuring

Restructure expenses, such as the compensation for emlpoyee
relocation and integration cost

Gains or losses from transactions with obvious unfair
transaction price in excess of fair values

Current net gains or losses of the subsidiaries from
enterprise merger under the common control from
the beinning of the period to the merger dgate

Profit or loss arising from contingencies not related to the
Compan’s normal byusiness

Except for effective hedihgng business related to te normal
business of the Company, profits or losses from fair value
changes in held-for-trading financial assets, derivative
financial assets, held-for-trading financial liabilities,
derivative financial liabilities and investment income from
disposal of held-for-trading financial assets, derivative
financial assets, held-for-trading financial liabilities,
derivative financial liabilities and other debt investments

Reversal of the impairment provision for receivables and
contract assets subject to individual impairment test

Items	Amount for the
current period	 Description

Profit or loss from entrusted loans

Profit or loss from fair value changes in investment property
subsequently calculated with the fair value mode

Impacts of one-off adjustment of the current profit or loss
in accordance with requirements of tax and accounting laws
and regulations on the current profit and loss

Custodian income from entrusted management

Other non-operating income and expenses other than the
aforesaid items	504,094.48

Other items of gains or losses subject to the definition of non-
recurring gains or losses

Amount of effect on non-controlling interests (after tax)	-22,337.22

Amount of effect on income tax	-622,109.07

Total	-1,199,268.75


China, such as the H5N1 avian flu or the human swine flu, also known as Influenza A (H1N1), especially in the cities where we have operations, may result in material disruptions to our property development and our sales and marketing, which in turn may materially and adversely affect our business, financial condition, results of operations and prospects.

# You may experience difficulties in effecting service of process, enforcing foreign judgments or bringing original actions in China against us or our Directors or officers

We are a company incorporated under the laws of the Cayman Islands, but substantially all of our operations and assets are located in China. As a result, it may be difficult or impossible for you to effect service of process upon us. Moreover, China does not have treaties with most other jurisdictions, including Hong Kong, that provide for the reciprocal recognition and enforcement of judicial rulings and awards. As a result, recognition and enforcement in China of thej udgment of a non-PRC court, such as Hong Kong, in relation to any matter not subject to a binding arbitration provision may be difficult or impossible. Furthermore, an original action may be brought in China against us or our Directors or officers only if the actions are not required to be arbitrated by PRC law and upon satisfaction of the conditions for institution of a cause of action pursuant to the PRC Civil Procedure Law. As a result of the conditions set forth in the PRC Civil Procedure Law and the discretion of the PRC courts to determine whether the conditions are satisfied and whether to accept the action for adjudication, there remains uncertainty on whether an investor like you will be able to bring an original action in China in this fashion.

# There has been no prior public market for our Shares. The market prices and liquidity of our Shares following the Global Offering may be volatile

Prior to the Global Offering, there has been no public market for our Shares. Following the completion of the Global Offering, the Hong Kong Stock Exchange will be the only market on which our Shares are listed. We cannot assure you that an active, liquid public trading market for our Shares will develop upon the present listing on the Hong Kong Stock Exchange. In addition, following the Global Offering our Shares may trade in the public market below the Offer Price. The Offer Price will be determined by agreement among us and the Joint Bookrunners, on behalf of the Underwriters, and the Offer Price may differ significantly from the market price of our Shares following the completion of the Global Offering. If an active trading market for our Shares does not develop or is not sustained after the Global Offering, the market price and liquidity of our Shares could be materially and adversely affected.

# The trading price of our Shares may be volatile, which could result in substantial losses to you

The trading price of our Shares may be volatile and could fluctuate widely in response to factors beyond our control, including general market conditions of the securities markets in Hong Kong, China, the United States and elsewhere in the world. In particular, the performance and fluctuation of the market prices of other companies with business operations

located mainly in China that have listed their securities in Hong Kong, and in particular other property companies, may affect the volatility in the price of and trading volumes for our Shares. Recently, a number of PRC companies have listed their securities, or are in the process of preparing to list their securities, in Hong Kong. Some of the listed companies have experienced significant share price volatility, including significant declines, after their initial public offerings. The trading performances of the securities of these companies at the time of or after their offerings may affect the overall investor sentiment towards companies listed in Hong Kong whose operations are primarily in China, and, consequently, may impact the trading performance of our Shares. These broad market and industry factors may significantly affect the market price and volatility of our Shares, regardless of our actual operating performance.

In addition to market and industry factors, the share price and trading volume for our Shares may be highly volatile for specific business reasons. In particular, factors such as variations in our turnover, earnings and cash flow, or the occurrence or speculation of any of the risks described elsewhere in this “Risk Factors” section, could cause the market price of our Shares to change substantially. Any of these factors may result in large and sudden changes in the price and trading volume of our Shares.

# Future sale of our securities in the public market (or perception or speculation that such sales may occur) could have a material and adverse impact on the prevailing market price of our Shares

The market price of the Offer Shares could decline as a result of future sale of substantial amount of Shares or other securities relating to the Shares in the public market or the issuance of new Shares or other securities, or the perception or speculation that such sales or issuances may occur. Future sale of substantial amounts of our securities, including any future offerings, or the perception that such sales are likely to occur, may also materially and adversely affect our ability to raise capital in the future at a time and at a price we deem to be appropriate.

In addition, the Shares held by our Controlling Shareholders are subject to a lock-up period, details of which are set out in the section headed “Underwriting — The Hong Kong Public Offering — Undertakings under the Hong Kong Underwriting Agreement” of this prospectus. While we are not aware of any intentions of these shareholders to dispose of significant amounts of their Shares after the completion of the lock-up periods, we are not in a position to give any assurances that they will not dispose of any Shares they may own. Future sales of our Shares by our Controlling Shareholders following the completion of the relevant lock-up periods could materially and adversely affect the prevailing market price of our Shares.

# Purchasers of our Shares in the Global Offering may experience dilution if we issue additional Shares in the future

In order to expand our business, we may consider issuing additional Shares in the future. Purchasers of our Shares may experience dilution in the net tangible asset book value per Share of their Shares if we issue additional Shares in the future at a price which is lower than the net tangible asset book value per Share.


\[ \begin{array} { r l } { ( 1 1 ) } & { \displaystyle \int _ { M } \left[ \sum _ { k = 1 } ^ { n } | I I ( e _ { k } , \omega ^ { \sharp } ) | ^ { 2 } + \sum _ { k = 1 } ^ { n } | I I ( e _ { k } , N ) | ^ { 2 } | \omega | ^ { 2 } \right] d M } \\ & { \displaystyle - \int _ { M } \left[ \sum _ { k = 1 } ^ { n } R m ^ { N } ( e _ { k } , \omega ^ { \sharp } , e _ { k } , \omega ^ { \sharp } ) + R i c ^ { N } ( N , N ) | \omega | ^ { 2 } \right] d M < \eta \int _ { M } | \omega | ^ { 2 } d M . } \end{array} \]

\[ \# \{ e i g e n v a l u e s ~ o f ~ t h e ~ J a c o b i ~ o p e r a t o r ~ o f ~ M ^ { n } ~ t h a t ~ a r e < \eta \} \geq \frac { 2 } { d ( d - 1 ) } q . \]

Proof. (Compare [29] Theorem 16 and [30] Theorem 1.1). Let k be the number of eigenvalues of the Jacobi operator (5) of \( M ^ { n } \) that are below \( \eta \). Denote by \( \phi _ { 1 } , \ldots , \phi _ { k } \) the eigenfunctions associated to the k eigenvalues \( \lambda _ { 1 } \le \lambda _ { 2 } \le \lambda _ { 3 } \ldots \leq \lambda _ { k } \) of the Jacobi operator of \( M ^ { n } \) that are strictly smaller than \( \eta \).

Fix some global orthonormal basis \( \{ \theta _ { i j } \} _ { i < j } \) of \( \Lambda ^ { 2 } \mathbb { R } ^ { d } \) and let \( u _ { i j } \, = \)\( \langle N \wedge \omega ^ { \sharp } , \theta _ { i j } \rangle \) be the test functions defined in Proposition 2. The map that assigns to each \( \omega \in \mathcal { V } \) the vector

\[ \left[ \int _ { M } u _ { i j } \phi _ { p } d M \right] , \]

where \( i < j \) range from 1 to d and p ranges from 1 to k, is a linear map from the q dimensional vector space \( \nu \) to a vector space of dimension

Assume, by contradiction, that \( \begin{array} { r } { q > \frac { d ( d - 1 ) } { 2 } k } \end{array} \). Then there would exist \( \omega \) in \( \mathcal { V } \setminus \{ 0 \} \) such that \( \begin{array} { r } { \int _ { M } u _ { i j } \phi _ { p } d M = 0 } \end{array} \) for all \( i < j \) and all p. Thus, as each \( u _ { i j } \) is \( L ^ { 2 } \)-orthogonal to all the first k eigenfunctions \( \phi _ { p } \), from the Courant-Hilbert variational characterization of eigenvalues it follows that

In view of Proposition 2, this is a contradiction with the assumption that inequality (11) holds for all \( \omega \) in \( \mathcal { V } \setminus \{ 0 \} \). The result follows.

Remark 4.1. The same proof of the above proposition also gives more refined information when the two-sided immersion \( M ^ { n } \) arises as the two-sided cover of an one-sided immersed hypersurface in \( N ^ { n + 1 } \) (see sections

2.1 and 2.3). If one moreover assumes that all harmonic one-forms on the subspace \( \nu \) are such that all the corresponding functions \( u _ { i j } \) are odd with respect to the deck transformation of the cover, then one can repeat the argument considering the restriction of the Jacobi operator of \( M ^ { n } \) to the space of odd functions. It then follows that the number of eigenvalues of the one-sided hypersurface covered by \( M ^ { n } \) below the threshold \( \eta \) is bounded from below by 2 \( 2 q / d ( d - 1 ) \).

As a corollary, in the case \( \eta \) = 0 we obtain an estimate on the number of negative values of the Jacobi operator, that is, an index estimate:

Theorem A. Let \( ( \mathcal { N } ^ { n + 1 } , g ) \) be a Riemannian manifold that is iso-metrically embedded in some Euclidean space \( \mathbb { R } ^ { d } \). Let \( M ^ { n } \) be a closed embedded minimal hypersurface of \( ( \mathcal { N } ^ { n + 1 } , g ) \).

Assume that for every non-zero vector field X on \( M ^ { n } \),

\[ \begin{array} { l l } { \displaystyle \int _ { M } \left[ \sum _ { k = 1 } ^ { n } R m ^ { N } ( e _ { k } , X , e _ { k } , X ) + R i c ^ { N } ( N , N ) | X | ^ { 2 } \right] d M } \\ { \displaystyle } & { \displaystyle \qquad \qquad \> \int _ { M } \left[ \sum _ { k = 1 } ^ { n } | I I ( e _ { k } , X ) | ^ { 2 } + \sum _ { k = 1 } ^ { n } | I I ( e _ { k } , N ) | ^ { 2 } | X | ^ { 2 } \right] d M } \end{array} \]

\[ ( 1 2 ) \qquad \qquad \qquad \qquad i n d e x ( M ) \geq \frac { 2 } { d ( d - 1 ) } b _ { 1 } ( M ) . \]

Proof. Assume \( M ^ { n } \) is two-sided. Under the assumption of the corol-lary, the hypothesis of Proposition 3 is automatically satisfied for \( \eta \)= 0 and \( \nu \) the set of all harmonic one-forms on \( M ^ { n } \), whose dimension is \( b _ { 1 } ( M ) \). Inequality (12) follows.

When \( M ^ { n } \) is one-sided, let \( \pi \, = \, \hat { M } ^ { n } \, \rightarrow \, M ^ { n } \, \subset \, \mathcal { N } ^ { n + 1 } \) be its two-sided cover and let V be the set of harmonic one-forms on \( \hat { M } ^ { n } \) that are invariant under the deck transformation \( \tau : \hat { M } ^ { n } \rightarrow \hat { M } ^ { n } \). This space has dimension at least \( b _ { 1 } ( M ) \), as it contains all the forms \( \pi ^ { * } \omega \), where \( \omega \) is harmonic on \( M ^ { n } \)(in fact, \( \pi ^ { * } : H ^ { 1 } ( M ; \mathbb { R } ) \to H ^ { 1 } ( \hat { M } ; \mathbb { R } ) \) is injective). The result follows as a consequence of Proposition 3 (see Remark 4.1) once one checks that, by construction of \( \hat { M } ^ { n } \), for all \( \hat { \omega } \) in V, each function \( \hat { u } _ { i j } = \langle \hat { N } \wedge \omega ^ { \sharp } , \theta _ { i j } \rangle \) satisfy

\[ \hat { u } _ { i j } ( \tau ( x ) ) = \langle \hat { N } ( \tau ( x ) ) \wedge \omega ^ { \sharp } ( \tau ( x ) ) , \theta _ { i j } \rangle = \langle - \hat { N } ( x ) \wedge \omega ^ { \sharp } ( x ) , \theta _ { i j } \rangle = - \hat { u } _ { i j } ( x ) \]

for all x in \( \hat { M } ^ { n } \), i.e, all functions \( u _ { i j } \) are odd with respect to the deck transformation \( \tau \).


资料来源：长城证券研究所整理


\[ \begin{array} { r l r } { ( 4 . 7 ) } & { \displaystyle \int _ { \sqrt { x _ { 1 } ^ { 2 } + x _ { n } ^ { 2 } } = \delta } \frac { 1 } { 2 } | \nabla u | ^ { 2 } ( \psi \cdot \nu ) | x _ { n } | ^ { 1 - 2 s } - \int _ { \sqrt { x _ { 1 } ^ { 2 } + x _ { n } ^ { 2 } } = \delta } ( \nabla u \cdot \psi ) ( \nabla u \cdot \nu ) | x _ { n } | ^ { 1 - 2 s } } \\ & { \displaystyle } & { \displaystyle + \int _ { B _ { 1 } ^ { \prime } } 2 \chi \operatorname { d i v } \varphi = O ( \delta ) . } \end{array} \]

where \( \nu \) is the unit outer normal to \( \left\{ { \sqrt { x _ { 1 } ^ { 2 } + x _ { n } ^ { 2 } } } = \delta \right\} \). Next we estimate the first two integrals in the LHS of the above equality. Since u is homogeneous of degree s (and depends only on \( x _ { 1 } \) and \( x _ { n } \)), \( \nabla \boldsymbol { u } \cdot \boldsymbol { \nu } = s \boldsymbol { u } \). Thus,

where we have used the growth estimate of u around the zero set as well as\|∇u\|\|x−2sn\|12 ∈ L2loc(Rn). To estimate the first integral we use the polar coordinates in \( ( x _ { 1 } , x _ { n } ) \)-plane: \( x _ { 1 } = r \cos ( \theta ) \), \( x _ { n } = r \sin ( \theta ) \). Then on \( \{ { \sqrt { x _ { 1 } ^ { 2 } + x _ { n } ^ { 2 } } } = \delta \} \),

\[ \begin{array} { l } { \displaystyle \frac { 1 } { 2 } | \nabla u | ^ { 2 } ( \psi \cdot \nu ) | x _ { n } | ^ { 1 - 2 s } } \\ { \displaystyle \qquad = \frac { s ^ { 2 } \alpha ^ { 2 } } { 2 \delta } ( \cos ( \theta / 2 ) ) ^ { - 1 + 2 s } ( | \sin ( \theta ) | ) ^ { 1 - 2 s } \left[ \cos ( \theta ) ( \psi \cdot e _ { 1 } ) + \sin ( \theta ) ( \psi \cdot e _ { n } ) \right] } \end{array} \]

\[ \begin{array} { l } { \displaystyle \operatorname* { l i m } _ { \delta \to 0 } \int _ { \sqrt { x _ { 1 } ^ { 2 } + x _ { n } ^ { 2 } } = \delta } \frac { 1 } { 2 } | \nabla u | ^ { 2 } ( \psi \cdot \nu ) | x _ { n } | ^ { 1 - 2 s } d x = \displaystyle \operatorname* { l i m } _ { \delta \to 0 } \int _ { B _ { 1 } ^ { \prime \prime } } \frac { s ^ { 2 } \alpha ^ { 2 } } { 2 \delta } \cdot 2 \delta \times } \\ { \displaystyle \quad \times \int _ { 0 } ^ { \pi } ( \cos ( \theta / 2 ) ) ^ { - 1 + 2 s } ( \sin ( \theta ) ) ^ { 1 - 2 s } ( \cos ( \theta ) ) ^ { 2 } \psi _ { 1 } ( \delta \cos ( \theta ) , x ^ { \prime \prime } , \delta \sin ( \theta ) ) \ d \theta d x ^ { \prime \prime } } \\ { \displaystyle \quad = c _ { 0 } ( s ) \alpha ^ { 2 } \int _ { B _ { 1 } ^ { \prime \prime } } \psi _ { 1 } ( 0 , x ^ { \prime \prime } , 0 ) d x ^ { \prime \prime } , } \end{array} \]

Combining the above estimates and letting \( \delta \rightarrow \) 0, we have for all \( \varphi \in C _ { c } ^ { \infty } ( B _ { 1 } ^ { \prime } ; \mathbb { R } ^ { n - 1 } ) \)

\[ c _ { 0 } ( s ) \alpha ^ { 2 } \int _ { B _ { 1 } ^ { \prime \prime } } \psi _ { 1 } ( 0 , x ^ { \prime \prime } , 0 ) d x ^ { \prime \prime } + \int _ { B _ { 1 } ^ { \prime } } 2 \chi \, \mathrm { d i v } \, \varphi = 0 \]

Recalling \( \psi _ { 1 } = \varphi _ { 1 } \) on \( B _ { 1 } ^ { \prime } \), we have proved (4.3).

Step 2. We now show that \( \begin{array} { r } { \alpha = \sqrt { \frac { 2 M } { c _ { 0 } ( s ) } } } \end{array} \) and \( \chi = M \chi _ { \{ x _ { 1 } > 0 \} } \)\( \mathcal { H } ^ { n - 1 } \)-a.e. in \( \mathbb { R } ^ { n - 1 } \).

In fact, if \( y \in \{ x _ { 1 } > 0 \} \), then \( u ( y ^ { \prime } , 0 ) = \alpha ( y _ { 1 } ) ^ { s } > 0 \). Hence by the uniform Ho¨lder convergence of \( u _ { \varepsilon _ { j } } \) to u, we have \( u _ { \varepsilon _ { i } } \geq \varepsilon _ { j } \) in a neighborhood of \( ( y ^ { \prime } , 0 ) \)

for any \( j \geq j _ { 0 } \) for some \( j _ { 0 } = j _ { 0 } ( \alpha , y _ { 1 } ) \) large enough. Thus for \( j > j _ { 0 } \) and \( ( x ^ { \prime } , 0 ) \) in the neighborhood of \( ( y ^ { \prime } , 0 ) \) we have

\[ \mathcal { B } _ { \varepsilon _ { j } } ( u _ { \varepsilon _ { j } } ) ( x ^ { \prime } ) = \int _ { 0 } ^ { u _ { \varepsilon _ { j } } ( x ^ { \prime } ) / \varepsilon _ { j } } \beta ( s ) d s = M . \]

Letting \( j \rightarrow \infty \) and since \( y ^ { \prime } \) is arbitrary, we get \( \chi \equiv M \) in \( \{ x _ { 1 } > 0 \} \).

In fact, we can take any \( \varphi \) in (4.3) such that \( \mathrm { s u p p } \, \varphi _ { 1 } \subset \mathbb { R } ^ { n - 1 } \cap \lbrace x _ { 1 } < 0 \rbrace \). Then the LHS of (4.3) will vanish. This implies that \( \chi = c o n s t \) in \( \{ x _ { 1 } < 0 \} \). By Lemma 3.2, \( \chi \equiv M \) or \( \chi \equiv \) 0 in \( \{ x _ { 1 } < 0 \} \). If \( \chi \equiv M \) in \( \{ x _ { 1 } < 0 \} \), then \( \chi \equiv M \) in \( \mathbb { R } ^ { n - 1 } \) by (a). Thus from (4.3) \( \begin{array} { r } { \int _ { \mathbb { R } ^ { n - 2 } } \varphi _ { 1 } ( 0 , x ^ { \prime \prime } ) d x ^ { \prime \prime } \, = \, 0 } \end{array} \) for any compactly supported vector field \( \varphi \), which is a contradiction.

This then implies the claim that \( \chi = M \chi _ { \{ x _ { 1 } > 0 \} } \). Next, applying an integration by parts to the RHS of (4.3) we have

\[ ( 4 . 8 ) \qquad \qquad \, \, c _ { 0 } ( s ) \alpha ^ { 2 } \int _ { B _ { 1 } ^ { \prime \prime } } \varphi _ { 1 } ( 0 , x ^ { \prime \prime } ) d x ^ { \prime \prime } = 2 M \int _ { B _ { 1 } ^ { \prime \prime } } \varphi _ { 1 } ( 0 , x ^ { \prime \prime } ) d x ^ { \prime \prime } . \]

\[ \alpha = \sqrt { \frac { 2 M } { c _ { 0 } ( s ) } } . \eqno \square \]

Proof of Theorem 4.1. Without loss of generality we assume \( x _ { 0 } \, = \, 0 \) and \( \nu = e _ { 1 } \). We also extend u by the even reflection with respect to \( x _ { n } \).

Consider the rescalings \( u _ { \lambda } \) and \( \chi _ { \lambda } \) at the origin. By Theorem 2.1 given \( \rho > \) 0,\( u _ { \lambda } \) is uniformly bounded in \( C ^ { 0 , s } ( \overline { { B _ { \rho / \lambda } } } ) \). Therefore, there exists a sequence \( \lambda _ { j } \to 0 \),\( u _ { 0 } \in C ^ { 0 , s } ( \mathbb { R } ^ { n } ) \) and \( \chi _ { 0 } \in L ^ { \infty } ( \mathbb { R } ^ { n } ) \) such that \( u _ { \lambda _ { j } } \to u _ { 0 } \) uniformly on compact subsets of \( \mathbb { R } ^ { n } \) and \( \chi _ { \lambda _ { j } } \rightharpoonup _ { \lambda 0 } ^ { * } \) in \( L ^ { \infty } ( \mathbb { R } ^ { n - 1 } ) \).

Now, rescaling (4.1), we see that for every \( R > \) 0,

and we deduce that \( u _ { 0 } = 0 \) \( \mathcal { H } ^ { n - 1 } \)-a.e. in \( \{ x _ { 1 } < 0 , x _ { n } = 0 \} \). By continuity, \( \boldsymbol { u } _ { 0 } \) vanishes on all of \( \{ x _ { 1 } \, \leq \, 0 , x _ { n } \, = \, 0 \} \). Besides, we readily have that \( u _ { 0 } \) satisfies \( \mathrm { d i v } ( | x _ { n } | ^ { 1 - 2 s } \nabla u _ { 0 } ) = 0 \) in \( \{ u _ { 0 } > 0 \} \). Thus, we can apply Corollary A.2 in Appendix to obtain an asymptotic development

with \( \alpha \geq \) 0. Next, note that by rescaling the nondegeneracy condition (4.2) and passing to the limit, we have

which implies that \( \alpha > \) 0. On the other hand, by Corollary 3.6(iii), \( u _ { 0 } \) is homo-geneous of degree s and hence


# X. R E L A T E D - P A R T Y R E L A T I O N S H I P S A N D T R A N S A C T I O N S (CONTINUED)

# 4. SIGNIFICANT RELATED TRANSACTIONS WITH THE ABOVE RELATED PARTIES DURING THE YEAR (CONTINUED)

# (5) Other related party transactions (Continued)

Name of related party	Content
of related
transactions	Current year	Prior year

Other enterprises controlled by the same
controlling shareholder and ultimate
controlling party	——	93,865,684.00	–

China Merchants Investment Development Co.,
Ltd.	Income from
demolition
and relocation
compensation	93,865,684.00	–

Guaranteed parties	Guaranteed
balance in the
end of the year	Guaranteed
balance at the
beginning of the
year	Starting date of
the guarantee	Maturity date of
the guarantee	Whether the
guarantee has
been fulfilled

China Merchants Shipping Enterprise
Co., Ltd.	2,345,705,416.00	2,300,000,000.00	2018-6-24	2021-6-24	No

SE Logistics Holding B.V.	1,797,600,000.00	–	2020-12-8	2027-12-7	No

China Assess Investment Limited	1,201,804,800.00	1,279,148,652.00	2017-12-22	2023-12-21	No

China Merchants Shipping Enterprise
Co., Ltd.	801,203,200.00	852,765,768.00	2017-12-22	2023-12-21	No

China Merchants Great Stone Trade
Logistics Co., Ltd.	395,635,884.63	443,928,962.84	2016-5-31	2031-5-30	No

Jiangmen High-tech Port Development
Co., Ltd.	330,729,681.81	187,652,588.56	2018-12-18	2021-12-17	No

Sinotrans Logistics Co., Ltd.	150,000,000.00	–	2020-12-22	2021-10-22	No

China Merchants Logistics Shenzhen
Co., Ltd.	100,000,000.00	–	2020-6-12	2021-6-12	No

Shenzhen Haixing Harbor Development
Co., Ltd.	98,184,899.10	98,340,000.00	2019-7-1	2037-7-1	No

# 1) The Group as the guarantor (Continued)

Guaranteed parties	Guaranteed
balance in the
end of the year	Guaranteed
balance at the
beginning of the
year	Starting date of
the guarantee	Maturity date of
the guarantee	Whether the
guarantee has
been fulfilled

Sinotrans Logistics Co., Ltd.	50,000,000.00	–	2020-10-16	2021-10-16	No

Sinotrans Sarens Logistics Co., Ltd.	10,882,711.86	14,937,055.48	2016-7-1	2021-6-30	No

Dongguan Port Container Terminals Co.,
Ltd.	8,109,500.00	16,383,681.74	2015-8-27	2023-1-9	No

Sinotrans Shanghai Cold Chain Logistics
Co., Ltd.	–	155,303,811.32	2017-3-29	2032-3-26	Yes

The Group provides guarantees for its subsidiaries from the credits of Finance Company and China Merchants Bank Co., Ltd.. The validity period of the credit is generally 1 year, and the credit line can be used in cycle within the validity period. As at 31 December 2020, the Group provided credit guarantees of RMB2,270,000,000.00 for its subsidiaries.

The Group provides operating guarantees for its subsidiaries, associates and joint venture to operate logistics project, loading and unloading operations, tendering operations, maritime booking agents services, warehousing services and other business activities to trade asset. As at 31 December 2020, the outstanding balance of operating guarantees provided to subsidiaries and joint ventures amounted to RMB19,667,279.10.


# （2）对联营、合营企业投资

投资单位	期初余额
(账面价
值)	本期增减变动	期末余额
(账面价
值)	减值准备
期末余额

追加投资	减少投资	权益法下
确认的投
资损益	其他综合
收益调整	其他权益
变动	宣告发放
现金股利
或利润	计提减值
准备	其他

一、合营企业

二、联营企业

# 4、营业收入和营业成本


This glossary of technical terms contains explanations of certain technical terms used in this prospectus in connection with our Group and our business. As such, these terms and their meanings may not correspond to standard industry meanings or usage of these terms.

“elementary schools” or
“primary schools”	schools that provide education for students in hgrade one throu
ggrade six

“first-tier universities”	 the first batch of universities that enroll students after the National
Hihger Education Entrance Exam. Except for students with
specialties in arts and sports, among other things, the basic
admission requirement for the relevant hihg school graduates is
that they achieved certain level of hihg scores in the National
HihEdger ucation Entrance Exam as designated by the relevant
PRC provincial education authorities, and they choose such
universities for their college entrance alippcation. Generally, these
universities have stronger comprehensive strengths, such as school
facilities, academic resources and scientific research capabilities,
among other things, and frequently gain special support from the
PRC central and local government

“hihhlg scoos”	 schools that provide education for students in grade 10 throuh
ggrade 12

“Integrated Area”	 also known as the Beijing, Tianjin and Hebei Province Integrated
Area. The concept of this area was created pursuant to a national
strateic inigtiative to ’promote the reiigons economc development

“junior college education”	 a three-year ldpost-hihg schoo egree-igrantng education upon
comlifpeton o which, a junior college degree will be granted.
Junior college students may continue their education by enrolling
in a two-year program and transferring some or all of the credit
earned at thej unior college toward the degree requirements of the
formal undergraduate degree

“middle schools”	 schools that provide education for students in grade seven throuh
ggrade nine

“National HihEdger ucation
Entrance Exam” or “Gaokao”	a national academic examination held annually in the PRC, which
is a prerequisite for entrance into almost all hihger educational
institutions at the undergraduate level in the PRC

“National HihEdger ucation
Entrance Exam for Adults”	a national academic examination for adults held annually in the
PRC. Upon achieving required grades in this examination and
comlpetion of required courses within specified period after the
examination, an adult may alppy for a junior college or
undergraduate dilpoma

“one-child policy”	 China’s population control policy imlemented by the Populatipon
and Family Planning Law of the PRC, according to which a family
can have only one child, with certain exceptions. The one-child
policy was relaced by the two-child policy imlemented in 2016pp

“preschools”	 educational establishments offering early childhood education to
children prior to the commencement of compulsory education

“private schools”	 schools which are not administered by local, provincial or national
governments

“public schools”	 schools administered by local, provincial or national education
authorities

“school sponsor”	 the individual(s) or entity(ies) that funds or holds interests in an
educational institution

“school year”	 the school year for all of our schools, which generally starts on
September 1 of each calendar year and ends on June 30 of the next
calendar year

“secondary education”	 normallldy takes fpace ater lprimary eucation and may be folowed
by hihger education, vocational training or emlpoyment

“Tutoring Hour”	 the unit for measuring tutorinig time delivered to students, tcallypy
represents 60 minutes in lengths for secondary school students and
40 minutes in lengths for primary school students

“two-child policy”	 China’s population control policy imlpemented in 2016 by the
Decision of the Central Committee of the Communist Party of
China and the State Council on Imlpementing the Universal
Two-Child Policy and Reforming and Improving the Management
of Family Planning Services 《中共中央、國務院關於實施全面兩
孩政策改革完善計劃生育服務管理的決定》, according to which a
family is allowed to have up to two children

“Zhonkgao”	 also known as the Senior HihSg chool Entrance Examination, the
academic examination held annually in the PRC to distinguish
junior hihg school students


# Information about fair value measurements using significant unobservable inputs — Continued

Description	Fair value
as at
December 31,
2017
RMB’000	Valuation techniques	Unobservable inputs	Range (weihdgte average)	Relationship of
unobservable
inputs to fair value

(2) Investment properties under construction — fair values determined by Colliers — continued

Chonidigqng Concor Cty — continued

Office	1,561,222	Residual approach	(i)   Selling price, taking into account
the differences in building age
and frontage between the
comparables and the property	RMB29,162 per square meter	The hihger the selling price,
the hihhger te fair value.

			(ii)   Expected developer profit	30%	The hihger the exdpecte
developer profit, the
lower the fair value.

			(iii) Construction cost	RMB9,000 per square meter	The hihger the cost, the
lower the fair value.

			(iv) Discount rate	5%	The hihdiger the scount
rate, the lower the fair
value.

			(v)   Rate of finance cost	5%	The hihger the rate of
finance cost, the lower
the fair value.

Description	Fair value
as at
December 31,
2017	Valuation techniques	Unobservable inputs	Range (weihdgte average)	Relationship of
unobservable
inputs to fair value

	RMB’000

(2) Investment properties under construction — fair values determined by Colliers — continued

Chonigqng International Commerce Centre

Retail	3,834,165	Residual approach	(i) Gross caiiptalsation rate, taking
into account the caiptalisation of
rental income potential, nature
of the property and prevailing
market conditions	7%	The hihger the gross
cailiptasation rate, the
lower the fair value.

			(ii) Market rent, taking into account
the differences in location, and
individual factors, such as
frontage and building age,
between the comparables and
the property	RMB461 per square meter
per month	The hihger the market rent,
the hihhger te fair value.

			(iii) Expected occupancy rate	60%–85%	The hihger the exdpecte
occupancy rates, the
hihhger te fair value.

			(iv) Expected developer profit	30%	The hihger the exdpecte
developer profit, the
lower the fair value.

			(v) Discount rate	10%	The hihdiger the scount
rate, the lower the fair
value.

			(vi) Construction cost	RMB5,614 per square meter	The hihger the cost, the
lower the fair value.

			(vii) Rate of finance cost	5%	The hihger the rate of
finance cost, the lower
the fair value.

			(viii) Rental growth rate	6%	The hihger the rental
growth rate, the hihger
the fair value.


Colocation Business, of the \$91 million increase in depreciation expense on these real estate assets, \$44 million is not expected to recur in future periods.

Amortization expense increased by \$1 million, or less than 1%, for the year ended December 31, 2017 as compared to the year ended December 31, 2016 and decreased by \$128 million, or 9%, for the year ended December 31, 2016 as compared to the year ended December 31, 2015. The increase in amortization expense for the year ended December 31, 2017 was primarily attributable to the inclusion of \$139 million in post-acquisition Legacy Level 3 amortization expense in our consolidated amortization expense. Legacy CenturyLink’s amortization expense was lower for both periods primarily due to the use of accelerated amortization for a portion of our customer relationship assets and our entry into an agreement to sell our data centers and colocation business. The effect of using an accelerated amortization method results in an incremental decline in expense each period as the intangible assets amortize. We ceased amortizing the intangible assets of our colocation business when we entered into the agreement to sell that business. Absent the sale, we estimate that we would have recorded additional amortization expense of \$13 million from January 1, 2017 through May 1, 2017, related to the conveyed intangible assets. In addition, amortization of capitalized software was lower in both periods due to software becoming fully amortized faster than new software was acquired or developed.

The following tables summarize our total other expense, net and income tax (benefit) expense:

nm - Percentages greater than 200% and comparisons between positive and negative values or to/from zero values are considered not meaningful.

Interest expense increased by \$163 million, or 12%, for the year ended December 31, 2017 as compared to the year ended December 31, 2016. The increase in interest expense was primarily due to (i) the issuance of\$7.945 billion of term loans in 2017 for the purpose of providing funding for the Level 3 acquisition, (ii) the assumption of Level 3’s debt upon the consummation of the acquisition of Level 3, which accounted for\$80 million in post-acquisition interest expense and (iii) the recognition of imputed interest expense resulting from the failed-sale-leaseback as further described in Note 3—Sale of Data Centers and Colocation Business. Interest expense increased by \$6 million, or less than 1%, for the year ended December 31, 2016 as compared to the year ended December 31, 2015. The increase in interest expense was substantially due to a reduction in the

amount of net premium amortization recorded at acquisition due to the early retirement of several issuances of debt during the period, which has the effect of increasing interest expense, and an increase in interest expense on unsecured notes related to the issuance of \$1.0 billion of new debt in April, 2016 in advance of a debt maturity in June, 2016.

Other income, net reflects certain items not directly related to our core operations, including our share of income from partnerships we do not control, interest income, gains and losses from non-operating asset dispositions, foreign currency gains and losses and components of net periodic pension and postretirement benefit costs. Other income (expense), net increased by \$7 million, or 140%, for the year ended December 31, 2017 as compared to the year ended December 31, 2016. This increase in other income, net was primarily due to a reduction in the loss on early retirement of debt, an increase in interest income from the \$6 billion Term Loan B funds held in escrow and income generated from our services agreements with Cyxtera, which was substantially offset by a lower expected return on assets in 2017 for our pension and post-retirement plans. The expected return on assets for our pension and post-retirement plans was lower in 2017 as compared to 2016, which resulted in us recording pension and post-retirement expense in 2017 as compared to recording pension and post-retirement income in 2016. Other income, net decreased by \$44 million, or 90%, for the year ended December 31, 2016 as compared to the year ended December 31, 2015. This decrease in other income, net was primarily due to losses on early retirement of debt, which was partially offset by the impact of nonrecurring funding from a state economic development program.

The enactment of the Tax Cuts and Jobs Act legislation in December 2017 resulted in a re-measurement of our deferred tax assets and liabilities at the new federal corporate tax rate of 21%. The re-measurement resulted in a tax benefit of approximately \$1.1 billion recorded in the fourth quarter of 2017, which was the predominant factor contributing to our recognition of an \$849 million income tax benefit for 2017, versus income tax expense of \$394 million in the prior year. Income tax expense decreased by \$44 million for the year ended December 31, 2016 as compared to the year ended December 31, 2015. For the years ended December 31, 2017, 2016 and 2015, our effective income tax rate was (157.2)%, 38.6% and 33.3%, respectively. The effective tax rate for the year ended December 31, 2017 reflects the benefit from the re-measurement of deferred taxes as noted above, a\$27 million tax expense related to the sale of our data centers and colocation business and a \$32 million tax impact of non-deductible transaction costs related to the Level 3 acquisition. The effective tax rate for the year ended December 31, 2016 reflects a tax impact of \$18 million from an intercompany dividend payment from one of our foreign subsidiaries to its domestic parent company that was made as part of our corporate restructuring in preparation for the sale of our colocation business. The effective tax rate for the year ended December 31, 2015 reflects a tax benefit of approximately \$34 million related to affiliate debt rationalization, research and development tax credits of \$28 million for 2011 through 2015, and a \$16 million tax decrease due to changes in state taxes caused by apportionment changes, state tax rate changes and the changes in the expected utilization of net operating loss carryforwards (“NOLs”). See Note 13—Income Taxes to our consolidated financial statements in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2017 and “Critical Accounting Policies and Estimates—Income Taxes” below for additional information.


“Substantial Shareholder(s)”	 has the meaning ascribed to it under the Listing Rules

“Tongwen Education”	 Guangzhou Tongwen Education Investment Group Co.,
*Ltd. (廣州同文教育投資集團有限公司), a limited liability
company established under the laws of the PRC on July 7,
2015 which is owned as to 44.5% by Ms. He Huifen, 12.75%
by Mr. Han Liing, 24% by Ms. Zhou Lanid8qqng an 1.75%
by Ms. He Huifang

“Tongwen Investment”	 Guangzhou Lingnan Tongwen Education Investment
Management Co., Ltd.* (廣州嶺南同文教育投資管理有限公
司), a limited liability company established under the laws
of the PRC on January 21, 2014 which is owned as to 80.0%
by Tongwen Education and 20.0% by Zhuhai Yixing Equity
Investment Partnership (Limited Partnership)* (珠海易興股
權投資合夥企業(有限合夥))

“Track Record Period”	 the three years ended December 31, 2018, 2019, and 2020

“Underwriters”	 the Hong Kong Underwriters and the International
Underwriters

“Underwriting Agreements”	 the Hong Kong Underwriting Agreement and the
International Underwriting Agreement

“U.S.” or “United States”	 the United States of America, its territories, its possessions
and all areas subject to itsj urisdiction

“U.S. dollar(s)” or “US$” or
“USD”	United States dollars, the lawful currency for the time being
of the United States

“U.S. Securities Act”	 the U.S. Securities Act of 1933, as amended from time to
time, and the rules and regulations promulgated thereunder

“VAT”	 value-added tax

“WHITE Aliippcaton Form(s)”	 the alifppcation orm(s) for use by the public who require(s)
such Hong Kong Offer Shares to be issued in the alippcants’
own names

“YELLOW Aliippcaton Form(s)”	 the form of aliippcaton for the HonKg ong Offer Shares for
use by the public who require such Hong Kong Offer Shares
to be deposited directly into CCASS

“Zhihui Guang”	Zhihui Guang Limited, a limited liability company
incorporated under the laws of the BVI on August 9, 2018
and is owned by Mr. He Huishan as to 51% and by Ms. Zhou
Laning as to 49%, and is one of our Controlliqng
Shareholders

“%”	per cent

Certain amounts and percentage figures included in this prospectus have been subject lo rounding adjustments. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of the figures preceding them.

In this prospectus, unless otherwise stated, certain amounts denominated in Renminbi have been translated into Hong Kong dollars or U.S. dollars at an exchange rate of RMB0.8315 =HK\$1.00 or RMB6.4546 = US\$1.00, respectively, for illustration purpose only. Such conversions shall not be construed as representations that amounts in Renminbi were or could have been or could be converted into Hong Kong dollars or U.S. dollars at such rates or any other exchange rates on such date or any other date.

If there is any inconsistency between the Chinese names of entities or enterprises established in the PRC and their English translations, the Chinese names shall prevail. The English translation of company or entity names in Chinese or another language which are marked with “\*” and the Chinese translation of company or entity names in English which are marked with “\*” is for identification purpose only.

Unless otherwise specified, all relevant information in this prospectus assumes no exercise of the Over-allotment Option.


# 37 SUBSIDIARIES AND CONTROLLED STRUCTURED ENTITY (continued)

Name of entity	Place and date of
incorporation
and kind of
legal entity	Principal
activities and
place of operation	Particulars
of issued
share capital	Effective interest
held as at
31 December

2020	2019

Xinjiang Jinchuan Jiahua
 Automobile Service Co., Ltd.	The PRC,
20 March 2019,
limited liabilit*y company	Transaction services,
the PRC	RMB5,000,000	100%	100%

Shanghai Zengxin Information
 Technology Co., Ltd.	The PRC,
25 April 2019,
limited liabilit#y company	Technology
development,
the PRC	RMB500,000,000	100%	100%

Guangdong Haihan Technology
 Development Co., Ltd	The PRC,
8 November 2019,
limited liabilit#y company	Information
technology,
the PRC	RMB102,200,000	100%	100%

Guangzhou Shengda Financing
 Guarantee Company Limited	The PRC,
12 November, 2019,
limited liability company	Financial services,
the PRC	RMB100,170,000	100%	100%

Hainan Xinye Information
 Technology Co., Ltd.	The PRC,
21 April, 2020,
limited liabilit#y company	Information
technology,
the PRC	RMB10,000,000	100%	–

Yunnan Juliying enterprise
 management Co., Ltd.	The PRC,
10 October 2020,
limited liabilit#y company	Financial services,
the PRC	RMB20,000,000	100%	–

Xinjiang Wanhong Information
 Technology Co., Ltd.	The PRC,
15 September 2020,
limited liabilit#y company	Information
technology,
the PRC	RMB20,000,000	100%	–

Xinjiang Wanyi Information
 Technology Co., Ltd.	The PRC,
15 September 2020,
limited liabilit#y company	Information
technology,
the PRC	RMB20,000,000	100%	–

Tianjin Duoxin Financing
 Guarantee Company Limited	The PRC,
18 September 2020,
limited liabilit#y company	Financial services,
the PRC	RMB300,000,000	100%	–

Beijing Xinshu Information
 Technology Co., Ltd.	The PRC,
22 September 2020
limited liabilit#y company	Information
technology,
the PRC	RMB3,000,000	100%	–

Name of entity	Place and date of
incorporation
and kind of
legal entity	Principal
activities and
place of operation	Particulars
of issued
share capital	Effective interest
held as at
31 December

2020	2019

Yixin Hong Kong Investment limited	Hong Kong,
25 November 2020,
limited liability company	Investment holding,
Hong Kong	HK$1	100%	–

Ruige Capital Management
 Co., Ltd.	The PRC,
23 December 2020,
limited liabilit#y company	Investment holding,
the PRC	US$100,000,000	100%	–

Beijing Yixin Information
 Technology Co., Ltd.	The PRC,
9 January 2015,
limited liabili^ty company	Advertising and
subscription services,
the PRC	RMB50,000,000	100%	100%

\# Registered as wholly foreign owned enterprises under PRC law

\* Registered as sino- foreign equity joint venture under PRC law

^ Controlled by New Contractual Arrangements


all purposes. All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders, and the singular shall include the plural and vice versa. The use herein of the word “including” following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation,” “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter.

Section 6.3 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns.

Section 6.4 No Third Party Rights. The provisions of this Agreement are intended to bind the Parties as to each other and are not intended to and do not create rights in any other person or confer upon any other person any benefits, rights or remedies, and no person is or is intended to be a third party beneficiary of any of the provisions of this Agreement.

Section 6.5 Counterparts. This Agreement may be executed in any number of counterparts (including facsimile or .pdf copies) with the same effect as if all Parties had signed the same document. All counterparts shall be construed together and shall constitute one and the same instrument.

Section 6.6 Applicable Law; Forum, Venue and Jurisdiction. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas, without regard to the principles of conflicts of law. Each of the Parties (a) irrevocably agrees that any claims, suits, actions or proceedings arising out of or relating in any way to this Agreement shall be exclusively brought in any federal court of competent jurisdiction situated in the United States District Court for the Western District of Texas, San Antonio Division, or if such federal court declines to exercise or does not have jurisdiction, in the district court of Bexar County, Texas, in each case regardless of whether such claims, suits, actions or proceedings sound in contract, tort, fraud or otherwise, are based on common law, statutory, equitable, legal or other grounds, or are derivative or direct claims, (b) irrevocably submits to the exclusive jurisdiction of the United States District Court for the Western District of Texas, San Antonio Division, or if such federal court declines to exercise or does not have jurisdiction, of the district court of Bexar County, Texas in connection with any such claim, suit, action or proceeding, (c) agrees not to, and waives any right to, assert in any such claim, suit, action or proceeding that (i) it is not personally subject to the jurisdiction of the United States District Court for the Western District of Texas, San Antonio Division, or the district court of Bexar County, Texas, or of any other court to which proceedings in such courts may be appealed, (ii) such claim, suit, action or proceeding is brought in an inconvenient forum, or (iii) the venue of such claim, suit, action or proceeding is improper, (d) expressly waives any requirement for the posting of a bond by a party bringing such claim, suit, action or proceeding and (e) consents to process being served in any such claim, suit, action or proceeding by mailing, certified mail, return receipt requested, a copy thereof to such party at the address in effect for notices hereunder or by personal service within or without the State of Texas, and agrees that service in such forms shall constitute

good and sufficient service of process and notice thereof; provided, however, that nothing in clause (e) hereof shall affect or limit any right to serve process in any other manner permitted by law.

Section 6.7 Severability. If any of the provisions of this Agreement are held by any court of competent jurisdiction to contravene, or to be invalid under, the laws of any political body having jurisdiction over the subject matter hereof, such contravention or invalidity shall not invalidate the entire Agreement. Instead, this Agreement shall be construed as if it did not contain the particular provision or provisions held to be invalid and an equitable adjustment shall be made and necessary provision added so as to give effect to the intention of the Parties as expressed in this Agreement at the time of execution of this Agreement.

Section 6.8 Amendment or Modification. This Agreement may be amended or modified from time to time only by the written agreement of all the Parties. Each such instrument shall be reduced to writing and shall be designated on its face as an amendment to this Agreement. Notwithstanding anything in the foregoing to the contrary, any amendment executed by the Partnership or any of its subsidiaries shall not be effective unless and until the execution of such amendment has been approved by the Conflicts Committee.

Section 6.9 Integration. This Agreement, together with the Schedules and Exhibits referenced herein, constitutes the entire agreement among the Parties pertaining to the subject matter hereof and supersedes all prior agreements and understandings of the Parties in connection therewith.

Section 6.10 Specific Performance. The Parties agree that money damages may not be a sufficient remedy for any breach of this Agreement and that in addition to any other remedy available at law or equity, the Parties shall be entitled to seek specific performance and injunctive or other equitable relief as a remedy for any Party’s breach of this Agreement. The Parties agree that no bond shall be required for any injunctive relief in connection with a breach of this Agreement.

Section 6.11 Deed; Bill of Sale; Assignment. To the extent required and permitted by applicable law, this Agreement shall also constitute a “deed,” “bill of sale” or “assignment” of the Assets and interests referenced herein. For the avoidance of doubt, the conveyance of the Assets from TRMC, the General Partner or the Partnership to the General Partner, the Partnership or the Operating Company, all as applicable, is not intended to be treated as a sale for tax or any other purposes.


“BLT Burger”	 BLT BURGER (HK) LIMITED, a company incorporated in Hong
Kong with limited liability on 27 July 2009 and a direct wholly-
owned subsidiary of Dining Concepts (Western)

“BLT Burger (Harbour City)”	 BLT Burger, a Western style restaurant operating under BLT
Burger which is situated at Shop OT 301–  OT 301A, Level 3,
Ocean Terminal, Harbour City

“BLT Burger (Times Square)”	 BLT Burger, a Western style restaurant operating under Wealthy
Home which is situated at Shop B224A, Basement 2, Times
Square, Causeway Bay, Hong Kong

“BLT Restaurants”	 BLT RESTAURANTS (HK) LIMITED, a company incorporated in
Hong Kong with limited liability on 10 September 2008 and a
direct wholly-owned subsidiary of Dining Concepts (Western)

“BLT Steak”	 BLT Steak, a Western style restaurant operating under BLT
Restaurants which is situated at Shop OT G62, Ground Floor,
Ocean Terminal, Harbour City

“Board” or “Board of Directors”	 the board of Directors

“Bombay Dreams”	 Bombay Dreams, an Asian style restaurant operating under
Bombay Dreams (HK) which is situated at Flats A and B, 4th
Floor, Carfield Commercial Building, 75 and 77 Wyndham Street,
Central, Hong Kong

“Bombay Dreams (HK)”	 BOMBAY DREAMS (HK) LIMITED (formerly known as
“WAITERS ON WHEELS LIMITED” and “CUISINE COURIER
LIMITED”, respectively), a company incorporated in Hong Kong
with limited liability on 26 July 2002 and a direct wholly-owned
subsidiary of Dining Concepts (Asian)

“Bombay Dreams To Go” or
“takeaway outlet”	the takeaway outlet with supporting kitchen for takeaway food
orders and outdoor catering services for Bombay Dreams,
operating under Bombay Dreams (HK) which is situated at Shop
1, Ground Floor and store, Mezzanine Floor, Po Thai Building, 9
Possession Street, Hong Kong

“Bouchon”	 Bouchon Bistro Francais (formerly known as “Bizou Bistro” and
“Ocean Grill”), a Western style restaurant operating under Excel
Team which is situated at Flat D, Ground Floor, 49, 49A, 49B
and 49C Elgin Street, Central, Hong Kong

“Braza”	 Braza Churrascaria Brazilian Steakhouse (formerly known as
“Mayta Peruvian Kitchen & Pisco Bar”), a Western style
restaurant operating under BBQ Restaurants which is situated at
Units A, B and C, 3rd Floor, Grand Progress Building, 58, 60 and
62 D’Aguilar Street, 15 and 16 Lan Kwai Fong, Central, Hong
Kong

“Bread Street Kitchen”	 Bread Street Kitchen, a Western style restaurant operating under
Pine Best which is situated at Mezzanine Floor, LKF Tower,
33 Wyndham Street and 55 D’Aguilar Street, Central, Hong Kong

“breakeven point”	 accounting breakeven, which refers to the number of month(s)
since the commencement of business of the restaurant at which
the monthly revenue is at least equal to the monthly expenses,
taking into account the non-cash items such as depreciation and
amortisation expenses

“BRU Beer & Bite”	 BRU Beer & Bite, a Western style restaurant expected to be
opened in the year ending 31 March 2018, expected to be
operated under New Era which will be situated at Shop 06-G03,
Ground Floor, Block C Dormitory, Central Police Station,
10 Hollywood Road, Central, Hong Kong

“Buildings Department”	 Buildings Department of the Hong Kong Government

“business day(s)”	 a day which is not a Saturday, Sunday or public holiday in Hong
Kong and on which banks in Hong Kong are generally open for
normal banking business to the public

“Business Registration
Ordinance”	Business Registration Ordinance (Chapter 310 of the Laws of
Hong Kong), as amended, supplemented or otherwise modified
from time to time

“BVI”	 the British Virgin Islands

“CAGR”	 compound annual growth rate

“California Vintage”	 California Vintage, a Western style restaurant operated under
California Vintage (HK) which was situated at Shop B, Ground
Floor, Carfield Commercial Building, 75 and 77 Wyndham Street,
Central, Hong Kong. California Vintage was closed on 6 March
2016

“California Vintage (HK)”	 CALIFORNIA VINTAGE LIMITED, a company incorporated in
Hong Kong with limited liability on 28 June 2010 and a direct
wholly-owned subsidiary of Dining Concepts (Western)

“Capitalisation Issue”	 the issue of 658,900,165 Shares to be made upon capitalisation
of part of the amount standing to the credit of the share premium
account of our Company as referred to in the section headed
“Further information about our Company—  Written resolutions of
our Shareholders passed on 14 July 2016” in Appendix IV to this
prospectus

“Cayman Islands Share
Registrar”	Estera Trust (Cayman) Limited, the Cayman Islands share
registrar of our Company


with both gauge and reducibility parameters displayed in (6), (8), and (11), together with their corresponding antifields (denoted by star variables)

\[ \Omega ^ { \alpha _ { 1 } } \to \eta ^ { \alpha _ { 1 } } \equiv \{ \eta , C ^ { \mu \nu } , \eta ^ { \mu \nu \rho } \} , \qquad \qquad \eta _ { \alpha _ { 1 } } ^ { \ast } \equiv \{ \eta ^ { \ast } , C _ { \mu \nu } ^ { \ast } , \eta _ { \mu \nu \rho } ^ { \ast } \} , \qquad \qquad ( 1 5 ) \]

\[ \Omega ^ { \alpha _ { 2 } } \rightarrow \eta ^ { \alpha _ { 2 } } \equiv \{ C ^ { \mu \nu \rho } , \eta ^ { \lambda \mu \nu \rho } \} , \qquad \qquad \eta _ { \alpha _ { 2 } } ^ { * } \equiv \{ C _ { \mu \nu \rho } ^ { * } , \eta _ { \lambda \mu \nu \rho } ^ { * } \} , \qquad \qquad ( 1 6 ) \]

\[ \Omega ^ { \alpha _ { 3 } } \rightarrow \eta ^ { \alpha _ { 3 } } \equiv \{ C ^ { \lambda \mu \nu \rho } \} , \eqno ( 1 7 ) \]

For notational ease, it is convenient to organize the fields/ghosts and respectively antifields into

The \( \mathbb { Z } _ { 2 } \) grading of the BRST algebra in terms of the Grassmann parity (\( \succ \)) is inferred from the observation that all the original fields together with the accompanying gauge and reducibility parameters are bosonic, so, according to the general rules of the antifield formalism, we take

\[ \varepsilon ( \eta ^ { \alpha _ { k } } ) = k \bmod 2 , \quad k = 1 , 2 , 3 , \quad \quad \varepsilon ( \chi _ { \Delta } ^ { * } ) = ( \varepsilon ( \chi ^ { \Delta } ) + 1 ) \bmod 2 . \quad \quad ( 1 9 ) \]

The Grassmann parity is then lifted to the BRST algebra by means of its additive action modulo 2 against multiplication. In agreement with the usual prescriptions of the BRST method, the BRST algebra is endowed with three more gradings (correlated with the main derivatives/differentials acting on this algebra): two N-gradings along the antifield number agh and respectively the pure ghost number pgh and a total Z-grading in terms of the ghost number gh. These are instated by setting the values of the corresponding degrees at the level of the BRST generators

and by further using their additive behaviour with respect to multiplica-tion. Finally, the (total) ghost number of any object with definite pure ghost and antifield numbers is defined like \( \mathrm { g h } ( a ) = \mathrm { p g h } ( a ) - \mathrm { a g h } ( a ) \).

Due to the fact that the right-hand sides of both gauge transformations (3)–(5) and relations (7) and (10) do not depend on the fields \( \Phi ^ { \alpha _ { 0 } } \) (or, in other words, all gauge generators and reducibility functions — of order one

and respectively two — are field independent), it follows that the BRST differential s reduces to a sum of two fermionic derivations

\[ s = \delta + \gamma , \eqno ( 2 2 ) \]

with \( \delta \) the Koszul–Tate differential, graded in terms of agh \( ( \mathrm { a g h } ( \delta ) = - 1 \)),and \( \gamma \) the longitudinal exterior derivative (in this case a true differential), graded by pgh \( ( \mathrm { p g h } ( \gamma ) \) = 1). These two degrees do not interfere \( ( \mathrm { a g h } ( \gamma ) \) = 0,\( \mathrm { p g h } ( \delta ) \) = 0), such that the total degree of the BRST differential (and of each of its components), namely gh, becomes equal to 1:\( \operatorname { g h } ( s ) = \operatorname { g h } ( \delta ) = \operatorname { g h } ( \gamma ) = \) 1. One of the major requirements of the BRST setting, namely the second-order nilpotency of s, becomes equivalent to three separate equations

\[ s ^ { 2 } = 0 \Leftrightarrow ( \delta ^ { 2 } = 0 , \, \delta \gamma + \gamma \delta = 0 , \, \gamma ^ { 2 } = 0 ) , \eqno ( 2 3 ) \]

which confirms that \( \gamma \) can indeed be constructed as a true differential in the case of the free model under study. The actions of \( \delta \) and \( \gamma \) on the BRST generators that enforce (23) as well as the fundamental cohomological requirements of the antifield BRST theory [27, 28, 29, 30, 31, 32] are given by

\[ \delta \chi ^ { \Delta } = 0 , \qquad \qquad \qquad \delta \varphi ^ { * } = \partial _ { \lambda } H ^ { \lambda } , \qquad \qquad \delta A ^ { * \mu } = \partial _ { \lambda } B ^ { \lambda \mu } , \qquad \qquad ( 2 4 ) \]

\[ \begin{array} { r } { \delta H _ { \mu } ^ { * } = - \partial _ { \mu } \varphi , \qquad \qquad \delta B _ { \mu \nu } ^ { * } = - \frac 1 2 \partial _ { [ \mu } A _ { \nu ] } , \qquad \quad \delta \phi _ { A } ^ { * } = k _ { A B } \sqcap \phi ^ { B } , \qquad ( 2 5 ) } \end{array} \]

\[ \delta \eta ^ { * } = - \partial _ { \lambda } A ^ { * \lambda } , \qquad \quad \delta C _ { \mu \nu } ^ { * } = \partial _ { [ \mu } H _ { \nu ] } ^ { * } , \qquad \qquad \delta \eta _ { \mu \nu \rho } ^ { * } = \partial _ { [ \mu } B _ { \nu \rho ] } ^ { * } , \qquad ( 2 6 ) \]

\[ \delta C _ { \mu \nu \rho } ^ { * } = - \partial _ { [ \mu } C _ { \nu \rho ] } ^ { * } , \qquad \delta \eta _ { \lambda \mu \nu \rho } ^ { * } = - \partial _ { [ \lambda } \eta _ { \mu \nu \rho ] } ^ { * } , \qquad \delta C _ { \lambda \mu \nu \rho } ^ { * } = \partial _ { [ \lambda } C _ { \mu \nu \rho ] } ^ { * } , \qquad ( 2 7 ) \]

\[ \gamma \chi _ { \Delta } ^ { * } = 0 , \qquad \qquad \qquad \gamma \varphi = 0 , \qquad \qquad \qquad \gamma A _ { \mu } = \partial _ { \mu } \eta , \qquad \qquad ( 2 8 ) \]

\[ \gamma H ^ { \mu } = - 2 \partial _ { \lambda } C ^ { \lambda \mu } , \qquad \gamma B ^ { \mu \nu } = - 3 \partial _ { \lambda } \eta ^ { \lambda \mu \nu } , \qquad \gamma \phi ^ { A } = 0 , \qquad \qquad ( 2 9 ) \]

\[ \gamma \eta = 0 , \qquad \qquad \qquad \gamma C ^ { \mu \nu } = - 3 \partial _ { \lambda } C ^ { \lambda \mu \nu } , \: \: \: \: \: \gamma \eta ^ { \mu \nu \rho } = - 4 \partial _ { \lambda } \eta ^ { \lambda \mu \nu \rho } , \: \: \: \: ( 3 0 ) \]

\[ \gamma C ^ { \mu \nu \rho } = - 4 \partial _ { \lambda } C ^ { \lambda \mu \nu \rho } , \quad \gamma \eta ^ { \lambda \mu \nu \rho } = 0 , \qquad \qquad \gamma C ^ { \lambda \mu \nu \rho } = 0 , \qquad \qquad ( 3 1 ) \]

where both operators are assumed to act like right derivations and \( \sqsupset \equiv \)\( \partial _ { \mu } \partial ^ { \mu } \) symbolizes the d’Alembertian. We notice that the actions of \( \gamma \) on all fields/ghosts can be obtained in this particular situation simply by replacing all gauge or reducibility parameters from the right-hand sides of relations (3)–(5), (7), (10), and (13) with the corresponding ghosts introduced in (15)–(17).

A striking feature of the antifield approach, in spite of its essentially La-grangian origins, resides in the (anti)canonical action of the BRST differen-tial [23, 24, 25, 26, 27, 28, 29, 30, 31, 32], \( s \cdot = ( \cdot , S ) \), where its (anti)canonical


# ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Item 10 will be incorporated by reference pursuant to Regulation 14A under the Exchange Act. The Registrant expects to file an amended Form 10-K with the SEC within 120 days after the close of the year ended December 31, 2016.

Item 11 will be incorporated by reference pursuant to Regulation 14A under the Exchange Act. The Registrant expects to file an amended Form 10-K with the SEC within 120 days after the close of the year ended December 31, 2016.

# ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Item 12 will be incorporated by reference pursuant to Regulation 14A under the Exchange Act. The Registrant expects to file an amended Form 10-K with the SEC within 120 days after the close of the year ended December 31, 2016.

# ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Item 13 will be incorporated by reference pursuant to Regulation 14A under the Exchange Act. The Registrant expects to file an amended Form 10-K with the SEC within 120 days after the close of the year ended December 31, 2016.

# ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Item 14 will be incorporated by reference pursuant to Regulation 14A under the Exchange Act. The Registrant expects to file an amended Form 10-K with the SEC within 120 days after the close of the year ended December 31, 2016.

# ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

# (a) The following documents are filed as a part of this report:

The following consolidated financial statements are included in “Part II—Item 8. Financial Statements and Supplementary Data” of this Annual Report:

	Page

Report of Independent ReiPbligstered uc Accountinig Frm	97

Consolidated Statements of Operations	98

Consolidated Balance Sheets	99

Consolidated Statements of Members’ Equity (Deficit)	100

Consolidated Statements of Cash Flows	101

Notes to Consolidated Financial Statements	103

Sulppemental Financial Information

Sulppemental Selected QuarterlFy inancial Information (Unaudited)	133

Sulppemental Oil and Natural Gas Information	134

The following exhibits are incorporated by reference into the filing indicated or are filed herewith.

Exhibit No.	Exhibit Title	Incorporated by Reference to the Following

2.1*	Purchase Agreement and Plan of Merger, dated as of
April 20, 2015, by and among Vanguard Natural
Resources, LLC, Lihgthouse Merger Sub, LLC,
Lime Rock Management LP, Lime Rock Resources
A, L.P., Lime Rock Resources B, L.P., Lime Rock
Resources C, L.P., Lime Rock Resources II-A, L.P.,
Lime Rock Resources II-C, L.P., LRR Energy, L.P.
and LRE GP, LLC	Exhibit 2.1 to Form 8-K, filed April 22, 2015 by
LRR Energy, L.P. (File No. 001-33016)

2.2*	Agreement and Plan of Merger, dated as of May 21,
2015, by and among Vanguard Natural Resources,
LLC, Talon Merger Sub, LLC, Eale Rgock Energy
Partners, L.P. and Ealge Rock Energy GP, L.P.	Exhibit 2.1 to Form 8-K, filed May 22, 2015 by
Ealge Rock Energy Partners, L.P. (File No. 001-
35344)

2.3	Purchase and Sale Agreement, dated March 29,
2016, among Vanguard Operating, LLC, NonOp
Solutions III, L.P. and NonOp Solutions IV LP.	Exhibit 2.1 to Form 8-K, filed March 30, 2016
(File No. 001-33756)

3.1	Fifth Amended and Restated Limited Liability
Company Agreement of Vanguard Natural
Resources, LLC	Exhibit 3.1 to Form 8-K, filed September 15,
2014 (File No. 001-33756)

4.1	Indenture, dated as of April 4, 2012, among
Vanguard Natural Resources, LLC and VNR
Finance Corp., as issuers, the Subsidiary Guarantors
named therein, as guarantors, and U.S. Bank
National Association, as trustee	Exhibit 4.1 to Form 8-K, filed April 4, 2012 (File
No. 001-33756)

4.2	First SulIdppemental nenture, dated as of Ail4pr ,
2012, among Vanguard Natural Resources, LLC and
VNR Finance Corp., as issuers, the Subsidiary
Guarantors named therein, as guarantors, and
U.S. Bank National Association, as trustee	Exhibit 4.2 to Form 8-K, filed April 4, 2012 (File
No. 001-33756)

4.3	Second SulIdppemental nenture, dated as of
December 9, 2015, among Vanguard Natural	Exhibit 4.3 to Form 10-K, filed March 7, 2016
(File No. 001-33756)


We have received numerous awards recognizing our achievements in various aspects of our business and service offerings. The following table sets forth some of the awards and accolades we have received:

Year	Awarded
Entit/Idiynvidual	 Award/Accreditation	Awarding
Organization

2017-
2019. . .	Greentown
Management	China’s Leading
Enterprise in Real
Estate Project
Management
Operation (2017-
2019年中國房地產代
建運營優秀企業)	China Real Estate Top
10 Research Team
(中國房地產To 10
p研究組)

2018-
2019. . .	Greentown
Management	Annual Influential
Business Model
Award (年度影響力
商業模式大獎)	Guandian Real Estate
New Media Co.,
Ltd. (觀點地產新媒
體)

2017-
2019. . .	Greentown
Management	Annual CSR
Contribution Award
(年度CSR貢獻獎)	Economic Observer
Newspaper (經濟觀
察報)

2018 . . . .	 Yiwu and Hejuyuan
Projects (義烏和聚園
項目)	Civil EniZgneerinhg an
TianGyou old Award
for Outstanding
Residential
Community in China
(中國土木工程詹天
佑獎優秀住宅小區金
獎)	China Civil
Eniigneerng Society
(中國土木工程學會)

2017 ....	Greentown
Management	Business Model Award
in the PRC Real
Estate Industry (中國
房地產商業模式年度
大獎)	Guandian Real Estate
New Media Co.,
Ltd. (觀點地產新媒
體)

Greentown
Management	China’s Value-Growth
Leading Real Estate
Company (中國房地
產成長價值領軍企
業)	Guandian Real Estate
New Media Co.,
Ltd. (觀點地產新媒
體)

Yiwu Anhu Home
Project (義烏安福家
園項目)	Energy-saving and
environmentally
friendly residential
property showcase
project (節能環保型
住宅國家康居示範工
程)	Ministry of Housing
and Urban-Rural
Housing
Industrialization
Center (國家住建部
住宅產業化中心)

Year	Awarded
Entit/Idiynvidual	 Award/Accreditation	Awarding
Organization

	Yiwu Beiyuan and
Juyuan Project (義烏
北苑和聚園項目)	Energy-saving and
environmentally
friendly residential
property showcase
project (節能環保型
住宅國家康居示範工
程)	Ministry of Housing
and Urban-Rural
Housing
Industrialization
Center (國家住建部
住宅產業化中心)

2013-
2014. . .	Nanjing public housing
(南京岱山保障房項
目)	Guangsha Award (廣廈
獎)	The PRC government
at national level (中
國房地產業協會/住
房和城鄉建設部住宅
產業化促進中心)

2013 ....	Qiandaohu Pearl Plaza
(千島湖珍珠廣場)	4th China Artistic
Environment Gold
Award (第四屆中國
環境藝術金獎)	Architectural Society
of China (中國建設
文化藝術協會/環境
藝術專業委員會)

As of the Latest Practicable Date, we owned a total of 31 properties in Hangzhou, the PRC, with an aggregated floor area of approximately 5,035 sq.m., which we use as our office. As of the same date, we also owned 25 properties located in Hangzhou, Shengzhou, Huzhou and Ningbo, the PRC, with an aggregated floor area of approximately 2,481 sq.m., for which we held as investment properties. Our PRC Legal Advisors have confirmed that we have obtained the real estate ownership certificates for these properties. The following table sets forth details of our owned properties:

No.	Description/Location	Gross Site Area

		(sq.m.)

1. . .	 Room 701, Block 3, Xixi International Business Center,
Xihu district, Hangzhou	294.87

2. . .	 Room 702, Block 3, Xixi International Business Center,
Xihu district, Hangzhou	147.91

3. . .	 Room 703, Block 3, Xixi International Business Center,
Xihu district, Hangzhou	242.42

4. . .	 Room 704, Block 3, Xixi International Business Center,
Xihu district, Hangzhou	248.45

5. . .	 Room 705, Block 3, Xixi International Business Center,
Xihu district, Hangzhou	60.78


# EXECUTIVE SESSIONS OF NON-MANAGEMENT DIRECTORS

Valley’s Corporate Governance Guidelines require the Board to hold separate executive sessions for both independent and non-management directors. The Board holds an executive session at least twice a year with only independent directors and regularly holds an executive session with only non-management directors. In each instance the Lead Director is the presiding director for the session.

# SHAREHOLDER AND INTERESTED PARTIES COMMUNICATIONS WITH DIRECTORS

The Board of Directors has established the following procedures for shareholder or interested party communications with the Board of Directors or with the Lead Director of the Board:

• Shareholders or interested parties wishing to communicate with the Board of Directors, the non-management or independent directors, or with the Lead Director should send any communication to Valley National Bancorp, c/o Alan D. Eskow, Corporate Secretary, at 1455 Valley Road, Wayne, NJ 07470. Any such communication should state the number of shares owned by the shareholder.

• The Corporate Secretary will forward such communication to the Board of Directors or, as appropriate, to the particular committee chairman or to the Lead Director, unless the communication is a personal or similar grievance, a shareholder proposal or related communication, an abusive or inappropriate communication, or a communication not related to the duties or responsibilities of the Board of Directors in which case the Corporate Secretary has the authority to determine the appropriate disposition of the communication. All such communications will be kept confidential to the extent possible.

• The Corporate Secretary will maintain a log and copies of all such communications for inspection and review by any Board member or by the Lead Director, and will regularly review all such communications with the Board or the appropriate committee chairman or with the Lead Director at the next meeting.

# COMMITTEES OF THE BOARD OF DIRECTORS;BOARD OF DIRECTORS MEETINGS

In 2017, the Board of Directors maintained an Audit Committee, a Nominating and Corporate Governance Committee, and a Compensation and Human Resources Committee. Only independent directors serve on these committees. In addition to these committees, the Company and the Bank also maintain a number of committees to oversee other areas of Valley’s operations. These include an Executive Committee, Community Reinvestment Act ("CRA") Committee, Investment Committee, Pension/Savings & Investment Trustees Committee, Risk Committee, Strategic Planning Committee and a Trust Committee, all of which have both independent and non-independent directors, as permitted by the SEC and the NYSE.

Each director attended at least 76% or more of the meetings of the Board of Directors and of each committee on which he or she served for the year ended December 31, 2017. Our Board met 10 times during 2017 and the Bank’s Board met 10 times during 2017.

The following table presents 2017 membership information for each of our Audit, Nominating and Corporate Governance, and Compensation and Human Resources Committees.

Name	Audit	Nominating
and
Corporate
Governance	Compensation
and
Human
Resources

Andrew B. Abramson	X	X	X

Peter J. Baum	X	X

Pamela R. Bronander			X

Eric P. Edelstein	(Chair)	X	X

Gerald Korde	X	X	(Chair)

Michael L. LaRusso	X		X

Marc J. Lenner		(Chair)	X

Suresh L. Sani	X	X	X

Jeffrey S. Wilks	X	X

2017 Number of
M*eetings	5	7	6

AUDIT COMMITTEE. The Audit Committee formally met 5 times during 2017. In addition, the Committee Chairman and Risk Committee Chairman met with the Chief Audit Executive and Chief Risk Officer of Valley monthly for the purpose of communicating closely with those officers and receiving updates on significant developments. The Board of Directors has determined that each member of the Audit Committee is financially literate and that more than one member of the Audit Committee has the accounting or related financial management expertise required by the NYSE. The Board of Directors has also determined that Mr. Edelstein, Mr. LaRusso and Mr. Wilks meet the SEC criteria of an “Audit Committee Financial Expert.” The charter for the Audit Committee can be viewed at our website www.valleynationalbank.com/charters. The charter gives the Audit Committee the authority and responsibility for the appointment, retention, compensation and oversight of our independent registered public accounting firm, including pre-approval of all audit and non-audit services to be performed by our independent registered public accounting firm. Each

member of the Audit Committee is independent under the NYSE listing rules. Other responsibilities of the Audit Committee pursuant to the charter include:

• Reviewing the scope and results of the audit with Valley’s independent registered public accounting firm;

• Reviewing with management and Valley’s independent registered public accounting firm Valley’s interim and year-end operating results including SEC periodic reports and press releases;

• Considering the appropriateness of the internal accounting and auditing procedures of Valley;

• Considering the independence of Valley’s independent registered public accounting firm;

• Overseeing the internal audit function;

• Reviewing the significant findings and recommended action plans prepared by the internal audit function, together with management’s response and follow-up; and

• Reporting to the full Board on significant matters coming to the attention of the Audit Committee.

NOMINATING AND CORPORATE GOVERNANCE COMMITTEE. The Nominating and Corporate Governance Committee met 7 times during 2017. This Committee reviews qualifications of and recommends to the Board candidates for election as director of Valley, considers the composition of the Board, and recommends committee assignments. The Nominating and Corporate Governance Committee also reviews and as appropriate approves all related party transactions in accordance with our Related Party Policy. The Nominating and Corporate Governance Committee is responsible for approving and recommending to the Board our corporate governance guidelines which include:

• Director qualifications and standards;

• Director orientation and continuing education;

• Limitations on Board members serving on other boards of directors;

• Director access to management and records;

• Criteria for the annual self-assessment of the Board, and its effectiveness; and

• Responsibilities of the Lead Director.

The Nominating and Corporate Governance Committee reviews recommendations from shareholders regarding corporate governance and director candidates. The procedure for submitting recommendations of director candidates is set forth below under the caption “Nomination of Directors.” Each member of the Nominating and Corporate Governance Committee is independent under NYSE listing rules. The charter for the Nominating and Corporate Governance Committee can be viewed at our website www.valleynationalbank.com/charters.

COMPENSATION AND HUMAN RESOURCES COMMITTEE. The Compensation and Human Resources Committee formally met 6 times during 2017. This Committee determines CEO compensation, sets compensation levels for directors and sets compensation for named executive officers ("NEOs") and other executive officers. It also administers our Executive Incentive Plan and the 2016 Long-Term Stock Incentive Plan, and makes awards pursuant to those plans. The charter for the Committee can be viewed on our website at www.valleynationalbank.com/charters. Each member of the Compensation and Human Resources Committee is independent under NYSE listing rules.

The Board has delegated the responsibility for executive compensation matters to the Compensation and Human Resources Committee. The minutes of the Committee meetings are provided at Board meetings and the chairman of the Committee reports to the Board significant issues dealt with by the Committee.

In January 2018, in undertaking its responsibilities, the Committee received from the CEO recommendations (except those that relate to his compensation) for salary, non-equity incentive awards, restricted stock and restricted stock unit awards for NEOs and other executive officers. After considering the possible payments and discussing the recommendations with the CEO, the Committee met in executive session to make the final decisions on these elements of compensation.

Under authority delegated by the Committee, all other employee salaries and non-equity compensation are determined by executive management. For stock awards, based on operational considerations, prior awards and staff numbers, a block of shares is allocated by the Committee. The individual restricted stock and restricted stock unit awards are then allocated by the CEO and his executive staff to these non-executive officers and employees.

Under authority delegated by the Committee, during the year, the CEO is authorized, within certain numerical limits, to make stock awards in specific circumstances: special incentive awards for non-officers, retention awards, awards to new employees and grants on completion of advanced degrees.

All awards not specifically approved in advance by the Committee, but awarded under the authority delegated, are


Name of State-owned Tobacco
Companies Customer	Particulars of contract(s) for sale of paper cigarette packages between our
Group and each of the State-owned Tobacco Companies Customers
(collectively, the ‘‘Agreements’’)	Estimated maximum transaction
amount for the year ending
31 December 2014

5.   China Tobacco Yunnan	 (1) An agreement between Hubei Golden Three Gorges, China Tobacco Yunnan
and Yunnan Tobacco Materials (Group) Company Limited (雲南中煙物資(集
團)有限責任公司), a wholly-owned subsidiary of China Tobacco Yunnan,
dated 11 March 2014 for the period from 11 March 2014 to 31 December
2014	RMB37,643,000

(2) An agreement between Hubei Golden Three Gorges, China Tobacco Yunnan
and Yunnan Tobacco Materials (Group) Company Limited (雲南中煙物資(集
團)有限責任公司), a wholly-owned subsidiary of China Tobacco Yunnan,
dated 11 March 2014 for the period from 11 March 2014 to 31 December
2014

(3) An agreement between Hubei Golden Three Gorges, China Tobacco Yunnan
and Yunnan Tobacco Materials (Group) Company Limited (雲南中煙物資(集
團)有限責任公司), a wholly-owned subsidiary of China Tobacco Yunnan,
dated 11 March 2014 for the period from 11 March 2014 to 31 December
2014

(4) An agreement between Hubei Golden Three Gorges, China Tobacco Yunnan
and Yunnan Tobacco Materials (Group) Company Limited (雲南中煙物資(集
團)有限責任公司), a wholly-owned subsidiary of China Tobacco Yunnan,
dated 14 March 2014 for the period from 14 March 2014 to 31 December
2014

(5) An agreement between Hubei Golden Three Gorges, China Tobacco Yunnan
and Yunnan Tobacco Materials (Group) Company Limited (雲南中煙物資(集
團)有限責任公司), a wholly-owned subsidiary of China Tobacco Yunnan,
dated 14 March 2014 for the period from 14 March 2014 to 31 December
2014

6.   China Tobacco Shandong	 (1) An agreement between Hubei Golden Three Gorges and China Tobacco
Shandong dated 27 January 2014 for the period from 27 January 2014 to
31 December 2014	RMB13,497,000

(2) An agreement between Hubei Golden Three Gorges and China Tobacco
Shandong dated 27 January 2014 for the period from 27 January 2014 to
31 December 2014

7.   China Tobacco Henan	 (1) An agreement between Hubei Golden Three Gorges and China Tobacco
Henan dated 14 March 2014 for the period from 1 January 2014 to 30 June
2014	RMB63,252,000

(2) An agreement between Hubei Golden Three Gorges and China Tobacco
Henan dated 14 March 2014 for the period from 1 January 2014 to 30 June
2014

8.   Hainan Hongta Cigarette	 (1) An agreement between Hubei Golden Three Gorges, China Tobacco Industry
Development Centre and Hainan Hongta Cigarette dated 8 May 2014 for the
year ending 31 December 2014	RMB18,810,000

(2) An agreement between Hubei Golden Three Gorges, China Tobacco Industry
Development Centre and Hainan Hongta Cigarette dated 8 May 2014 for the
year ending 31 December 2014

Name of State-owned Tobacco
Companies Customer	Particulars of contract(s) for sale of paper cigarette packages between our
Group and each of the State-owned Tobacco Companies Customers
(collectively, the ‘‘Agreements’’)	Estimated maximum transaction
amount for the year ending
31 December 2014

9.   China Tobacco Fujian	 (1) An agreement between Hubei Golden Three Gorges, China Tobacco Fujian
and Xiamen Tobacco Industrial Co., Ltd., a wholly-owned subsidiary of
China Tobacco Fujian, dated 21 March 2014 for the period from 1 July 2013
to 30 June 2014	RMB21,019,000

(2) An agreement between Hubei Golden Three Gorges, China Tobacco Fujian
and Xiamen Tobacco Industrial Co., Ltd., a wholly-owned subsidiary of
China Tobacco Fujian, dated 21 March 2014 for the period from 1 July 2013
to 30 June 2014

(3) An agreement between Hubei Golden Three Gorges, China Tobacco Fujian
and Xiamen Tobacco Industrial Co., Ltd., a wholly-owned subsidiary of
China Tobacco Fujian, dated 17 March 2014 for the period from 1 July 2013
to 30 June 2014

(4) An agreement between Hubei Golden Three Gorges, China Tobacco Fujian
and Xiamen Tobacco Industrial Co., Ltd., a wholly-owned subsidiary of
China Tobacco Fujian, dated 17 March 2014 for the period from 1 July 2013
to 30 June 2014

10. China Tobacco Guizhou	 An agreement between Hubei Golden Three Gorges and China Tobacco Guizhou
dated 17 April 2013 for the period from 1 April 2013 to 31 March 2015	RMB16,581,000

11. Shanxi Kunming Tobacco	 (1) An agreement between Hubei Golden Three Gorges, China Tobacco Industry
Development Centre and Shanxi Kunming Tobacco dated 21 April 2014 for
the period from 21 April 2014 to 31 December 2014	RMB33,578,000

(2) An agreement between Hubei Golden Three Gorges, China Tobacco Industry
Development Centre and Shanxi Kunming Tobacco dated 21 April 2014 for
the period from 21 April 2014 to 31 December 2014

12.   Shenzhen Tobacco Industrial	 (1) An agreement between Hubei Golden Three Gorges, China Tobacco Industry
Development Centre and Shenzhen Tobacco Industrial dated 8 May 2014 for
the period from 8 May 2014 to 31 December 2014	RMB16,721,000

(2) An agreement between Hubei Golden Three Gorges, China Tobacco Industry
Development Centre and Shenzhen Tobacco Industrial dated 8 May 2014 for
the period from 8 May 2014 to 31 December 2014

13. Inner Mongolia Kunming
Cigarettes	(1) An agreement between Hubei Golden Three Gorges, Inner Mongolia Kunming
Cigarettes and China Tobacco Industry Development Center dated 3 March
2014 for the period from 3 March 2014 to 31 December 2014	RMB8,683,000

(2) An agreement between Hubei Golden Three Gorges, Inner Mongolia Kunming
Cigarettes and China Tobacco Industry Development Center dated 3 March
2014 for the period from 3 March 2014 to 31 December 2014

(3) An agreement between Hubei Golden Three Gorges, Inner Mongolia Kunming
Cigarettes and China Tobacco Industry Development Center dated 10 March
2014 for the period from 10 March 2014 to 31 December 2014

(4) An agreement between Hubei Golden Three Gorges, Inner Mongolia Kunming
Cigarettes and China Tobacco Industry Development Center dated 13 March
2014 for the period from 13 March 2014 to 31 December 2014