Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

中國能源建設股份有限公司 ENERGY ENGINEERING CORPORATION LIMITED* (A joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 3996)

ANNOUNCEMENT INSIDE INFORMATION

The announcement is made by China Energy Engineering Corporation Limited (the “Company”) pursuant to Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the provisions of inside information under Part XIVA of the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

Pursuant to the Listing Rules of the Shanghai Stock Exchange, China Gezhouba Group Stock Company Limited (中國葛洲壩集團股份有限公司) (the “CGGC”), a subsidiary of the Company, published a summary of its 2016 annual report for the year ended December 31, 2016 (the “CGGC Summary Annual Report”) on the website of the Shanghai Stock Exchange, a reproduction of which is enclosed to this announcement. For the avoidance of doubt, the “Company” contained in the CGGC Summary Annual Report refers to CGGC.

The CGGC Summary Annual Report set out below has been prepared in accordance with the People’s Republic of China Generally Accepted Accounting Principles and has been audited by, BDO China Shu Lun Pan Certified Public Accountants LLP, the auditors of CGGC.

Shareholders of the Company and potential investors should exercise caution when dealing in the shares of the Company.

By Order of the Board CHINA ENERGY ENGINEERING CORPORATION LIMITED* Wang Jianping Chairman

Beijing, the PRC March 29, 2017

As at the date of this announcement, the executive directors of the Company are Mr. Wang Jianping, Mr. Ding Yanzhang and Mr. Zhang Xianchong; the non-executive director is Mr. Ma Chuanjing; and the independent non-executive directors are Mr. Ding Yuanchen, Mr. Wang Bin, Mr. Zheng Qiyu and Mr. Cheung Yuk Ming.

* for identification purpose only

- 1 - Stock Code: 600068 Company abbreviation: CGGC

China Gezhouba Group Stock Company Limited Summary of 2016 Annual Report

- 2 - I. IMPORTANT NOTICE

1. The summary of annual report is a simplification of the annual report. To comprehensively understand the Company’s operating results, financial position and future development plans, investors shall refer to the website of the Shanghai Stock Exchange and other designated media of the China Securities Regulatory Commission to carefully read the full text of the annual report.

2. The board of directors, the board of supervisors, the directors, the supervisors and senior management of the Company guarantee the authenticity, accuracy and completeness of the contents of annual report, in which there are no false representations, misleading statements contained, or material omissions, and the several and joint responsibilities are assumed as well.

3. All the directors of the Company attended the board meeting.

4. BDO Shu Lun Pan Certified Public Accountants LLP has issued a standard and unqualified auditor’s report for the Company.

5. The proposal of distribution of profit for the reporting period or the transfer of capital reserve to equity considered by the board of directors:

Based on the total capital of 4,604,777,412 shares, the cash dividend of RMB2.06 (tax included) for every 10 shares, i.e. a total of RMB948,584,146.87 in cash, will be distributed to all shareholders and the remaining profit will be transferred to the following year. The Company does not transfer capital reserve to equity in the current year.

II. BASIC INFORMATION OF THE COMPANY

1. About the Company

Company stock profile Stock type Listed on Stock Stock code Former stock abbreviation abbreviation A share the Shanghai CGGC 600068 / Stock Exchange

Contact person Secretary of the Board Securities affairs and contact methods representative Name Peng Liquan Ding Xianyun Office address Gezhouba Tower, 558 Jiefang Gezhouba Tower, 558 Jiefang Road, Qiaokou District, Road, Qiaokou District, Wuhan, Hubei Province Wuhan, Hubei Province Telephone 027-59270353 027-59270353 Email [email protected] [email protected]

- 3 - 2. Main businesses of the Company in the reporting period

The business scope of the Company covers investment, construction, environmental protection, real estate, cement, civil blasting, equipment manufacturing and finance. In the reporting period, the ideas and methods of the big 8 businesses had been actively adjusted, business structure had been optimized, transformation and upgrading had been accelerated, and professionalism, excellence and integrated development had been achieved.

1) Investment

In the reporting period, the investment business of the Company in environmental protection, water treatment, transportation, energy, infrastructure and other sectors had made a significant breakthrough and won a number of investment and construction projects and operating projects such as highways and sewage treatment through investment and construction, merger and acquisition and reorganization, while maintaining the integrated development with other businesses.

At present, the capacity of water treatment projects invested, operated and under construction by the Company reaches 2.4 million tons/day; total mileage of highway is 937 km, including 452 km in operation and 485 km under construction; and 5 hydropower stations in operation possess installed capacity of 0.2585 million kW. The completed investment in the year increased by 13.3% compared with last year.

2) Construction

Mainly under the project implementing mode of PPP and general construction contracting, the construction business is still an important source of the Company’s operating revenue. The main mode of domestic projects under construction includes PPP and construction contracting; and that of overseas projects under construction includes projects contracting and EPC. Types of projects include infrastructure projects such as highway, hydropower station, housing construction, railway, water treatment, municipal engineering and underground pipeline network, etc.

In the reporting period, the operating revenue and signed contracts of international and domestic construction business had grown continuously and steadily. By vigorously developing high-end businesses such as PPP, EPC and projects contracting, the Company successfully signed 19 PPP projects, the contractual amount of which reached RMB71.926 billion, and continued to lead the domestic PPP industry. As for international business, branches in 99 countries had been established to cover 142 countries and regions, in which 33 branches were in the countries along “One Belt and One Road” to cover 57 markets of individual country. Among more than 4,000 “Going Global” enterprises, the Company had been ranked No. 5 and No. 9 in international contracts and operating revenue respectively. In 2016, the Company had been ranked No. 45 and No. 31 in the “Top 250 International Contractors” and “Top 250 Global Contractors” issued by Engineering News Record (ENR) of the USA, No. 70 in the “Top 500 China Enterprises” issued by Fortune magazine, and No. 3 in the “Top 200 Competitive Enterprises of Construction Industry of China” issued by China Construction Industry Association.

- 4 - 3) Environmental protection

In the reporting period, the environmental protection business of the Company mainly included recycling of renewable resources, sludge treatment, sewage treatment, solid waste disposal and new paving materials production, which had been operated by Green Park Company, Cement Company, etc.

Recycling of renewable resources: Dalian Huanjia Company and Hubei Industrial Company, both held by Green Park Company, are mainly engaged in the recycling processing and cyclic utilization of waste materials, such as waste steel, plastic, paper, glass, and nonferrous metals, etc.

Sludge treatment: China Curing Company, held by Green Park Company and possessing advanced technology and processing capacity in soil curing treatment, sludge pollution control and solid waste treatment, is engaged in the R&D and production of soil curing agent and sludge modifier and is capable of undertaking environmental protection construction such as soil treatment and sludge control.

Solid waste disposal: Clean & New Technology Company, held by Cement Company, is engaged in the disposal of solid waste and municipal household refuse, using the technology of “zero- emission” waste-to-power incineration and collaborating with the cement kiln. In the reporting period, one municipal household refuse disposal production line had been operated normally and copied to other cement production lines successfully, while three production lines had been under construction as planned and two production lines had been in early preparations.

New paving materials: Paving Materials Company, held by Cement Company, possessing patented technology for production of asphalt concrete slag aggregate from steelmaking residue, is engaged in the processing, production and sales of steel slag aggregate.

In the reporting period, investing in the environmental protection industry chain, including watershed management, municipal sewage treatment and solid waste treatment, the Company had rapidly increased the scale of water treatment through aggressive investment and mergers and acquisitions, continuously improved the influence and appeal in the industry and had been known as the leading and benchmarking enterprise in environmental protection industry. The new technologies of elastic alloy material and technology of “zero-emission” waste-to-power incineration had been developed successfully, thus a set of core technologies of environmental protection with independent intellectual property rights had been defined. The water treatment business had been ranked among the well-known domestic enterprises, renewable resources business had leapt to Top 3 of the domestic industry, and Green Park Company had been rewarded the “Top 10 Green Responsibilities Enterprises in China” issued by China Green Development Summit Forum Organizing Committee.

- 5 - 4) Real estate

As one of the 16 state-owned central enterprises approved by the State Council in the first batch to be mainly engaged in real estate, the Company has level I qualification of real estate development. The real estate business has been operated by the real estate company, which is engaged in high-end property development and management, including boutique residential, urban complex, tourism real estate and high-end office buildings, etc.

In the reporting period, the real estate company had improved the green technology residential system and had been rewarded the “2016 Top 10 Chinese Real Estate Company with Brand Value” for the first time and “Star of Top 100 Chinese Real Estate Enterprises 2016”, ranking No. 68 in “Top 100 List of Chinese Real Estate Enterprises 2016”, rising 14 positions compared with last year.

5) Cement

Operated by Cement Company, the cement business of the Company mainly includes production and sales of cement, clinker, commercial concrete and related products.

In the reporting period, the Company had possessed an annual capacity of 24.3 million tons of cement and 16.47 million tons of clinker, which had been ranked No. 13 in the domestic cement industry, and the comprehensive strength of the cement business had been ranked No. 4 in Chinese listed cement companies in 2016.

6) Civil blasting

Operated by Yipuli Company, the civil blasting business of the Company mainly includes the production and sales of civil blasting products, construction of blasting projects, general contracting services for mining projects construction, and raw materials production and equipment manufacturing of civil blasting materials, etc.

In the reporting period, the Company had been ranked No. 3 of China for its production capacity of industrial explosives of civil blasting business, possessing a number of core leading technologies. The comprehensive strength of the civil blasting business had been at the forefront of the industry.

7) Equipment manufacturing

Operated by the equipment industrial company and ship machinery company, the equipment manufacturing business mainly includes the design, manufacture and sales of distributed energy equipments, environmental protection equipments and other equipments, and integrated services of construction, operation and maintenance for relating projects.

- 6 - In the reporting period, the Company had vigorously expanded the distributed energy business and doubled the contracts signed compared with last year. The air energy storage system, researched and developed together with the Chinese Academy of Sciences, was awarded “Top 10 Energy Equipment Products with Excellent Performance of China”.

8) Finance

Operated by the finance leasing company, the finance business of the Company mainly includes finance leasing and industry fund.

In the reporting period, the finance leasing company had enhanced business innovation and been the first in the Shanghai Free Trade Zone to implement trans-border factoring business, of which the capital utilization had achieved the best level.

For the detailed analysis of the Company’s businesses, please refer to relating contents in Section 4, “Operation Discussion and Analysis”.

3. Significant accounting data and financial indicators of the Company

3.1 Significant accounting data and financial indicators in the last 3 years

Unit: Yuan Currency: RMB Increase/Decrease (%) compared to Year 2016 Year 2015 last year Year 2014 Total assets 151,228,830,823.89 127,629,770,969.22 18.49 104,900,254,980.52 Operating revenue 100,254,150,416.16 82,274,932,384.27 21.85 71,605,390,347.11 Net profit attributed to shareholders of the listed company 3,395,312,602.05 2,683,050,048.93 26.55 2,129,072,245.46 Net profit net of non-recurring profit and loss attributed to shareholders of the listed company 2,970,733,902.91 2,432,998,247.10 22.10 1,868,682,899.30 Net assets attributed to shareholders of the listed company 38,522,416,103.38 20,240,565,026.16 90.32 18,598,246,476.44 Net cash flow from operating activities -3,428,476,233.72 -4,749,521,515.68 Not applicable 1,146,315,792.39 Basic earnings per share (Yuan/share) 0.686 0.583 17.67 0.492 Diluted earnings per share (Yuan/share) 0.686 0.583 17.67 0.492 Weighted average return on equity (%) 14.782 13.816 Increased by 0.97 13.185 percentage point

- 7 - 3.2 Significant quarterly accounting data in the reporting period

Unit: Yuan Currency: RMB The 4th Quarter The 1st Quarter The 2nd Quarter The 3rd Quarter (October to (January to March) (April to June) (July to September) December) Operating revenue 16,816,977,780.65 22,459,225,025.26 24,050,494,986.19 36,927,452,624.06 Net profit attributed to shareholders of the listed company 645,762,107.68 795,807,056.09 801,287,870.04 1,152,455,568.24 Net profit net of non-recurring profit and loss attributed to shareholders of the listed company 617,091,847.51 750,522,787.85 666,429,112.52 936,690,155.03 Net cash flow from operating activities -3,340,660,304.65 -2,672,505,632.15 1,183,313,986.45 1,401,375,716.63

Notes to the differences between the quarterly data and disclosed data in the regular reports

□ Applicable 3 Not Applicable

- 8 - 4 Share capital and shareholders

4.1 Number of ordinary shareholders and preferred shareholders with recovered voting rights and the list of shareholding of Top 10 shareholders

Unit: Share Total number of ordinary shareholders as at the end of reporting period (individual) 277,931 Total number of ordinary shareholders at the end of the month before annual report disclosure date (individual) 244,840 Total number of preferred shareholders with recovered voting rights as at the end of reporting period (individual) 0 Total number of preferred shareholders with recovered voting rights at the end of the month before annual report disclosure date (individual) 0 Shareholdings of Top 10 shareholders Number of Increase/ shares held at Pledge or freeze decrease in the end of Number of status Name of the shareholder the reporting reporting restricted Nature of the (full name) period period Ratio (%) shares held Status Number shareholder China Gezhouba Group Co., State-owned Ltd. 0 1,949,448,239 42.34 456,201,118 None 0 legal person Central Huijin Asset State-owned Management Co. Ltd. 0 70,785,800 1.54 0 None 0 legal person Portfolio 106 of National Social Security Fund 58,969,695 58,969,695 1.28 0 None 0 Others Portfolio 103 of National Social Security Fund 7,999,896 55,999,100 1.22 0 None 0 Others China Securities Finance Co. State-owned Ltd. -32,304,793 45,590,181 0.99 0 None 0 legal person Hong Kong Securities Clearing Company Limited 22,015,687 32,393,806 0.70 0 None 0 Others Portfolio 116 of National Social Security Fund 22,878,897 22,878,897 0.50 0 None 0 Others Bank of China – Jiashi Growth and Income Securities Investment Fund 21,691,000 21,691,000 0.47 0 None 0 Others Agricultural Bank of China Co. Ltd. – Jiashi Leading and Growth Hybrid Securities Investment Fund 17,860,900 17,860,900 0.39 0 None 0 Others China Construction Bank Co. Ltd. – Huabao Industrial Picks Hybrid Securities Investment Fund 16,548,261 16,548,261 0.36 0 None 0 Others Note to the association or concerted action of In the Top 10 shareholders, the first shareholder has no association with the others; the shareholders above the Company has no information about the association or concerted action of the others. Note to the number of preferred shareholders None with recovered voting rights and shares held by such shareholders

- 9 - 4.2 Chart of equity and control relationship between the Company and the controlling shareholder

3 Applicable □ Not Applicable

China Gezhouba Group Co., Ltd.

42.34%

China Gezhouba Group Stock Company Limited

4.3 Chart of equity and control relationship between the Company and the actual controller

3 Applicable □ Not Applicable

The State-owned Assets Supervision and Administration Commission of the State Council 100%

China Energy Construction Group Co., Ltd.

68.90%

China Energy Construction Co., Ltd.

100%

China Gezhouba Group Co., Ltd.

42.34%

China Gezhouba Group Stock Company Limited

- 10 - 5 Corporate Bonds

5.1 Basic information of corporate bonds

Unit: 100 million Yuan Currency: RMB Outstanding Interest Name of the bonds Abbr. Code Issue date Maturity date balance (%) Repayment method Marketplace Corporate Bonds of 16GZ01 136130 Jan. 19 2016 Jan. 19 2021 30 3.14 The interests of the corporate bond are paid Shanghai China Gezhouba in installments annually and the final Stock Group Stock phase will be paid with the principal, Exchange Company Limited in which is due at maturity. 2016 (Issue 1) Corporate Bonds of 16GZ02 136427 May 4 2016 May 4 2021 30 3.27 The interests of the corporate bond are paid Shanghai China Gezhouba in installments annually and the final Stock Group Stock phase will be paid with the principal, Exchange Company Limited in which is due at maturity. 2016 (Issue 2) Corporate Bonds of 16GZ03 136434 May 13 2016 May 13 2021 40 3.45 The interests of the corporate bond are paid Shanghai China Gezhouba in installments annually and the final Stock Group Stock phase will be paid with the principal, Exchange Company Limited in which is due at maturity. 2016 (Issue 3) Publicly Offered 16GZY1 136994 July 21 2016 – 25 3.24 The interests of the corporate bond are paid Shanghai Corporate Bonds in installments annually if the issuer does Stock of China Gezhouba not exercise the right of deferred payment Exchange Group Stock of interest. If the issuer chooses to repay Company Limited in the bonds in full in a year of exercising 2016 (Issue 1) the renewal option, the interest payment date shall be the repayment date of the bonds. Publicly Offered 16GZY2 136995 July 21 2016 – 25 3.48 The interests of the corporate bond are paid Shanghai Corporate Bonds in installments annually if the issuer does Stock of China Gezhouba not exercise the right of deferred payment Exchange Group Stock of interest. If the issuer chooses to repay Company Limited in the bonds in full in a year of exercising 2016 (Issue 1) the renewal option, the interest payment date shall be the repayment date of the bonds. Publicly Offered 16GZY3 136992 Aug. 3 2016 – 20 3.15 The interests of the corporate bond are paid Shanghai Corporate Bonds in installments annually if the issuer does Stock of China Gezhouba not exercise the right of deferred payment Exchange Group Stock of interest. If the issuer chooses to repay Company Limited in the bonds in full in a year of exercising 2016 (Issue 2) the renewal option, the interest payment date shall be the repayment date of the bonds. Publicly Offered 16GZY4 136993 Aug. 3 2016 – 30 3.43 The interests of the corporate bond are paid Shanghai Corporate Bonds in installments annually if the issuer does Stock of China Gezhouba not exercise the right of deferred payment Exchange Group Stock of interest. If the issuer chooses to repay Company Limited in the bonds in full in a year of exercising 2016 (Issue 2) the renewal option, the interest payment date shall be the repayment date of the bonds.

- 11 - 5.2 Interests payment and bonds repayment of the Company

3 Applicable □ Not Applicable

The Company paid the interest of corporate bonds (issue 1) during the period from January 19, 2016 to January 18, 2017 on January 19, 2017.

5.3 Bond rating of the Company

3 Applicable □ Not Applicable

During the reporting period, Shanghai Brilliance Credit Rating & Investors Service Co., Ltd. and United Credit Ratings Co., Ltd. carried out credit rating on the corporate and corporate bonds proposed to be issued prior to the issuance and determined the long-term credit rating of the corporate to be AAA with stable prospect. The credit ratings of “16GZ01”, “16GZ02”, “16GZ03”, “16GZY1”, “16GZY2”, “16GZY3” and “16GZY4” were AAA.

Shanghai Brilliance Credit Rating & Investors Service Co., Ltd. and United Credit Ratings Co., Ltd. will issue a regular follow-up rating report within 2 months after the disclosure of the Company’s audited annual report, and conduct irregular track ratings during the duration of the bond according to the relating matters.

During the reporting period, there is no rating differential in the corporate rating of other bonds and debt financing instruments issued by the Company in the PRC.

5.4 Accounting data and financial indicators in the last 2 years of the Company

3 Applicable □ Not Applicable

Unit: Yuan Currency: RMB Increase/ decrease (%) compared to Reason for Key indicator Year 2016 Year 2015 last year the variations Decreased by 10.34 Mainly resulted from the percentage issuance of other equity Liabilities to assets ratio 67.64% 77.98% point instruments EBITDA to total liabilities Mainly resulted from the ratio 9.57 12.15 -21.23 increase of EBITDA Mainly resulted from the increase of interests Interest coverage ratio 2.71 3.08 -12.01 expense

- 12 - III. OPERATION DISCUSSION AND ANALYSIS

(I) Market review of the businesses

1. Investment

In 2016, China continued to improve the national highway network, focused on improving the national highway network, and promoted the connected construction of the Midwest highways, the inter-provincial roads and the roads between the national central cities and the surrounding cities. The prevention and treatment of the atmosphere, water and soil pollution and the golden waterway regulation and watershed planning management of Yangtze River had been deepened and enhanced, while ecological protection and restoration had been strengthened, so the overall ecological protection and environmental treatment had been developed well, but the partial problems were still serious. The investment and construction of water conservancy, railways, municipal facilities, urban rail transit and urban underground pipeline network were continuously increased and improved. Chinese enterprises are supposed to increase international investment and production capacity cooperation, especially in the interconnection and other infrastructure constructions in “One Belt and One Road” neighboring countries.

2. Construction

In 2016, the national fixed asset investment had slowed down, the construction industry had gone out of the downturn, support from infrastructure construction to the economy had been continuously enhanced, the construction industry output value increased by 7.1%, of which the water conservancy, public facilities and road transport investments had increased substantially, real estate investment growth had been further narrowed, hydropower investment had decreased for the fourth consecutive years, and railway investment had decreased slightly. The PPP, EPC and project contracting mode in the infrastructure construction had been promoted by the state actively, the traditional competitive construction business had fallen sharply. The implementation of PPP mode had presented a serious test to the construction enterprises in the management and operation ability, professional core competitiveness, business model innovation, resource integration ability, financing ability and risk control ability throughout the full life cycle of projects. The differentiation of construction enterprises was obvious. The central and local large- scale construction enterprises had become the main competitive power and the main force of the implementation of PPP projects, and the market competition was heatened.

- 13 - 3. Environmental protection

A number of environmental protection policies had been released in recent years and created an important support to the development of environmental protection industry and a solid foundation of the long-term development of the industry. In 2016, the central government had put forward the development of environmental protection industry to an unprecedented height by an unprecedented strength. “Ten Policies for Water” and “Ten Policies for Atmosphere” had been implemented deeply, and the following releasing of “Thirteenth Five Years Plan in Environmental Protection”, “Ten Policies for Soil” and the trial implementation of mandatory PPP model in environmental treatment by the Ministry of Finance had been a huge boost to the market. Based on the relating statistics, in investments in infrastructure from January to October, investments of eco-protection and environmental management industry enjoyed a high growth rate of 45.3% and promoted the rapid development of environmental protection related industries. Environmental protection industry had a trend of huge market, huge projects and huge demand, and been in an era of huge mergers and acquisitions and huge integration.

4. Real estate

In 2016, effected by the increase of US dollar interest rate and the expectation of depreciation of RMB, the real estate market volume and price in first level cities and core second level cities had both increased, showing the finance characteristics of real estate, and the annual turnover had presented a record high and the trend of urban differentiation continued. Real estate market in other second level cities and third or fourth level cities had continued the stagflation, the real estate policies had experienced a transition from comprehensive easing to the continuous tightening in hot cities, and the market trend had become more smoothly.

5. Cement

In 2016, driven by the infrastructure and real estate market, cement demand had maintained the low growth, while the concentration of cement industry had been further improved. National cement production had grown modestly as compared to last year while the production capacity had continued to shrink, and cement companies had laid out the environmental protection businesses such as garbage disposal in cement kilns, which had been the highlight of the industry.

6. Civil blasting

In 2016, the national utilization rate of explosive production capacity had been less than 65%, and the market competition environment had further deteriorated; facing the weak market demand, the lower prices from project owners and the increase of operating costs, profit margins of civil blasting enterprises had been squeezed; clean energy had gradually replaced traditional energy, and the new mining equipment technology had promoted the transformation of mining methods, so civil blasting market had been exposed to more shocks.

- 14 - 7. Equipment manufacturing

In 2016, the traditional hydraulic machinery, hoisting machinery, shipbuilding and other equipment business market had become saturated with an intensive competition. Meanwhile, the distributed energy, new energy and environmental protection equipments in the international and domestic markets had a broad prospect for development.

8. Finance

In the first three quarters of 2016, China had continued to implement a proactive fiscal policy and a prudent monetary policy. Generally the financial operation and the increase of currency credit had been stable, and the exchange rate of RMB had basically remained stable. Bond market had been opened more widely and trading volume continued to increase, and the investor structure in the market had been further diversified. From October 2016, the currency market interest rates had fluctuated within a narrow range and the Central Bank had “tightened up the short and eased the long”, the liquidity had been tight and the currency market interest rates had risen higher quickly.

(II) Significant operating results in the reporting period

In 2016, facing the complex international and domestic economic situation and arduous missions in reforming and development, the Company had calmly responded to challenges and struggled to seize the opportunities and actively promoted the structural adjustment, transformation and upgrading, reforming and innovation, and scientific and technological progress. For the first time, the operating revenue of the Company had exceeded RMB100 billion, the signed contracts had increased steadily, the profitability had been enhanced continuously, the assets structure had been further optimized, the position in the industry had risen, and the businesses of the Company had achieved the associated and coordinated development.

In the reporting period, the operating revenue was RMB100.254 billion, increased by 21.85% compared with the same period of last year, the operating profit was RMB4.561 billion, increased by 14.15% compared with the same period of last year, and the net profit attributed to the owners of parent company was RMB3.395 billion, increased by 26.55% compared with the same period of last year. As at the end of the reporting period, the total assets of the Company was RMB151.229 billion, increased by 18.49% compared with that in the beginning of the year.

The significant operating results are as follows:

1. Investment

In the reporting period, insisting on the investment system of “being led by the platform, sharing the information, complementing each other’s advantages and implementing accordingly”, the investments of the Company had fully covered domestic and international areas. Through the aggressive investments, mergers and acquisitions in the fields of environmental protection, roads, water treatment and energy, the industrial layout had been optimized, the advanced technology had been introduced, and the scale development had been achieved. - 15 - Water treatment: In the reporting period, the Company had been holding 100% equity of three companies, namely Kaidan Water, Haichuanda and Beijing Zhongkai. Kaidan Water has 10 water treatment plants in Tianjin, Dingzhou, Zibo, Xuanhua and Dazhou, etc., including 9 sewage treatment plants with total treatment capacity of 425,000 tons/day and a water supply plant with industrial water supply capacity of 100,000 tons/day; Hunan Haichuanda has seven sewage treatment plants in Anxiang County, Jinshi City, , County, County, and City of Hunan Province with total treatment capacity of 285,000 tons/day; and Beijing Zhongkai has eight water treatment plants in Binzhou, Laiwu, Qinyang, Lingbao, Danjiang and Huanggang etc., including seven sewage treatment plants with total treatment capacity of 400,000 tons/day and a reclaimed water plant with the processing capacity of 20,000 tons/day. In the reporting period, the investment & construction and operation & management rights of water projects in Haikou, Jingmen, Wenling and Tongzhou, etc., had been obtained in PPP mode. Now these investment projects are implemented successfully as planned. The Company possesses 45 water plants at present with total water treatment capacity of 2.40 million tons/day in operating and under construction. In the reporting period, a professional subsidiary of water treatment operation and management, China Gezhouba Group Water Operation Co., Ltd., had been established. Operation and management of water treatment are moving towards the standardization, specialization, unification, informatization and intelligentization targets. Meanwhile, production operation management had been enhanced, “Three Zero” of quality, safety and environmental protection had been achieved, and the water quality of every water plant had met the relating standards. The overall operation of water treatment business throughout the year had been stable and generated operating revenue of RMB276 million, increased by 125.90% compared with the same period of last year.

Transportation: In order to meet the requirements of reform and reorganization of state-owned enterprises and the development of the industry, the Company has carried out large-scale reorganization and integration of the businesses according to “intensification, specialization and standardization”, and China Gezhouba Group Roads Operation Co., Ltd. had been established as a professional subsidiary of highway operation and management. In the reporting period, Hubei Xiangjing Highway, Hubei Daguangbei Highway and Sichuan Neisui Highway, which were invested and controlled by the Company, generated operating revenue of RMB1.279 billion and profit at RMB258 million, increased by 11.74% and 216.67% respectively compared with the same period of last year. In the reporting period, the highway from Bazhong to Wanyuan in Sichuan Province had been invested and constructed by the Company in PPP mode. In January 2017, 3 highways including the highway from Jinan to Taian, the section from Juye to Shanxian (at the provincial boundaries of Shandong and Anhui) of national highway Deshang Line, and the section from Zaozhuang to Heze of highway from Rizhao (Lanshan) to Heze, had been invested and constructed by the Company in BOT mode. The mileage of highway under construction of the Company had been increased by 485km and the transportation industry layout had been further improved.

- 16 - Energy: In the reporting period, Overseas Investment Company, the subsidiary of the Company, acquired 78% equity of Suki Kinari Hydropower Project Company in Pakistan and will obtain the investment and development rights of SK Hydropower Station. In the reporting period, the operating revenue of hydropower station held and invested by the Company was RMB249 million, decreased by 1.66% compared with the same period of last year.

2. Construction

In the reporting period, the construction subsidiaries of the Company had further promoted the upgrading of business and achieved remarkable results. The total amount of contracts signed in 2016 was RMB213.599 billion, increased by 17.62% compared with last year. The total amount of domestic and international construction contracts newly signed was RMB143.037 billion and RMB70.562 billion, increased by 27.62% and 1.51% respectively compared with last year, in which the total amount of domestic and international hydropower construction contracts newly signed was RMB34.041 billion, accounted for 15.94% of total newly signed contracts.

1) The competitive advantage of PPP business had been further enhanced. In domestic market, facing more fierce competition and more restrictive supervision in the PPP market, the Company had insisted on enhancing the capacities of financing, business model design, resource integration, business negotiation and risk control, to further enhance the competitive advantage. The “Gezhouba model”, which had a greater impact in the industry and made the operation of PPP business more efficient and more stable, had been created through the improvements of PPP business responsibility system, operational processes and operating guidelines, and the design of a set of PPP business rules, processes and models. Therefore 19 PPP projects had been signed in this year at total amount of RMB71.926 billion, accounted for 50.28% of domestic newly signed contracts.

- 17 - 2) The international business had been developed stably. In the international market, following the national policies and showing the leadership in the enterprises of “Going out” and involved in “One Belt and One Road”, the Company had seized the international opportunities of “One Belt and One Road” for production cooperation to carry out the interconnection and cooperation with “Three Networks and One Modernization” in Africa and strengthen the international influence, while 3A credit rating awarded by China International Contractors Association and CCCME had been continuously maintained. The Company had strengthened the market layout and the project operation in “One Belt and One Road” markets, of which the policies had been researched intensively, and completed the specific research on the interconnection and the current situation of the power resources of 10 countries and the market research on 22 key countries to provide the marketing development with a large number of policy situation analysis and business guidance. In the reporting period, the international contracts signing had achieved a remarkable result, including Pakistan DASU- MW-01 dam and metal structure project at the amount of about RMB7.6 billion, Pakistan DASU-MW-02 underground plant and metal structure project at the amount of about RMB4.295 billion, Pakistan KAPCO 660MW coal power station project at the amount of about RMB3.47 billion, Egyptian rural health project with the agreement of conditions at the amount of about RMB6.6 billion, Kenya coffee plantation irrigation system construction project at the amount of about RMB4.3 billion, Pakistan M-4-IIIA highway project and Bangladesh Gazipur to Dhaka Airport BRT road upgrade project.

- 18 - 3) The project governance had been innovated to improve fulfillment performance and profitability. Facing the increase of investment projects and PPP projects, the Company has strengthened the project management and actively changed its role in the project construction from investor, general contractor to operator, and studied the corresponding project management to clarify the management responsibilities of headquarters, subsidiaries and project management departments, in order to make the responsibility system of project management more clear and the project operation more coordinated. In the investment projects and PPP projects, the rational definition of responsibilities in the decision-making level, management level, project management company, general contracting project department had been formulated, and the management mechanism based on the separation of duty, cooperation and effective mutual check and balance had been established gradually, so the project management had become more standardized.

4) Management of projects under construction had achieved remarkable results. The Company was awarded AAA enterprise credit rating of water conservancy project. The first unit of Ecuador Sopradora hydropower station had been on-grid and commenced in generating electricity; Liupanshui Airport highway had past the final acceptance; the ship lift in the Three Gorges Dam had past the acceptance before trial operation, thus the project had been transferred from construction to trial operation as well; the entire project of Suzhou Central Expressway Wuzhong section had past the final acceptance successfully; Yunnan Lancang River Xiaowan 6×700 MW hydropower project, Huaneng southeastern Hami Yandun 4th wind farm 201 MW project, State Grid Ningxia Shibanquan 99 MW wind farm project, Xinjiang Kaidu River Liushugou 2×90 MW Hydropower Station Project had been awarded the “Quality Power Project Award”; Pakistan N-J hydropower station TBM2 # section and the left diversion tunnel had been completed; Monkey Rock hydropower station flood discharge project B, i.e. the flood discharge hole project had discharged the flood formally; Hanxiao railway project had been officially opened to traffic; Bengbu Changhuaiwei Town Huaihe River bridge had been officially opened to traffic as well; and Longkaikou hydropower station project won the “Gold Award of National Quality Project 2016-2017”. The Company had received 285 awards throughout the year, increased by 8% is numbers compared with year 2015.

In the reporting period, the operation income and profit of construction business was RMB60.95 billion and RMB3.218 billion, increased by 10.17% and 45.59% respectively compared with last year, and the income margin was 5.28%.

- 19 - 3. Environmental protection

In the reporting period, the Company had actively practiced the “Green” development concept raised by central government and defined the environmental protection business as an important direction for transformation and upgrading. Green Park Company had completed the renewable resources business layout in central plains region through the increase of investment, mergers and acquisitions and the fusion of management, and further promoted the national business layout, while part of the investment, merger and acquisition projects had been steadily implemented as well. Seizing the national strategy and full playing the Company’s technological advantages, the Company had made major breakthrough in market development and won some environmental protection projects of sludge treatment and soil and water conservation, including Ci Lake dredging phase II project and Qinggang Lake (including Yaer pond) dredging civil works in Yellowstone water pollution comprehensive treatment project based on ADB loan. Meanwhile, assisted by the Company’s PPP business platform, the Company had actively participated in the PPP project of water environment comprehensive management in the watershed of Jinmen City Bamboo River, the basic treatment project of Lingang Economic Development Zone in Tangshan Fengnan PPP project, of which the management technology solution had been recognized by the government and the project owners.

1) The renewable resources business

In the reporting period, Huanjia Company, held by Green Park Company, had speeded up the layout of renewable resources business by the establishment of 6 branches, and resulted in the operating revenue at RMB12.34 billion and profit at RMB322 million. Xingye Company had actively seize market share by the establishment of 3 subsidiaries and achieved operating revenue at RMB1.347 billion and profits at RMB73.7121 million.

2) Sewage and sludge treatment business

In the reporting period, China Curing Company, held by the Company, had rapidly expanded the business scale by focusing on the market, strengthening management and innovation of technology, and won the following projects: water environment comprehensive management project in the watershed of Jinmen City Bamboo River at the total contract amount of RMB750 million with duration of 15 months, sea mud curing project in Fengnan Tangshan at the total contract amount of RMB600 million with duration of 12 months, and ecological dredging project phase 4 at Kunming Dianchi grass sea and the lake estuary at the contract amount of RMB73.83 million with duration of 36 months. Meanwhile 8 patents had been obtained, including: a kind of cement hardener, a kind of integrated ecological disposal system for high pollution load sewage treatment, a kind of spiral device for contaminated soil curing and stabilization, a kind of integrated system for continuous and efficient sludge mechanical dehydration and chemical modification, a kind of decentralized integrated corridor interception system, a kind of intensive ecological treatment system for high turbidity sewage and rainwater, a kind of construction mud dewatering and curing device, and an energy-storable wind aerator. The operating income was RMB140 million and the profit was RMB13.0918 million.

- 20 - 3) Paving materials business

Insisting on giving priority to technologies and focusing on the R&D and application of new materials and new technology, the Company had been committed to develop itself as an integrated service provider of product, technology, inspection and construction in respect of paving materials. In 2016, Gezhouba Wuhan Paving Materials Co., Ltd., held by Cement Company, obtained high- tech enterprises certification and two patents, applied for three science and technology projects above municipal level, and vigorously expanded the construction project market to achieve the mutual complement between product market and construction project market. In 2016, the operation income was RMB31.26 million and the profit was RMB5.2145 million, while the total amount of signed contracts was RMB140 million.

4) Solid waste disposal business

Gezhouba Zhongcaijiexin (Wuhan) Technology Co., Ltd., held by Cement Company, has been committed to become the leading domestic integrated service provider of urban and rural solid waste disposal. The completed demonstration line of household refuse disposal in Laohekou cement kiln (500 tons/day) had disposed 74,900 tons garbage in 2016 at the industrial output value of RMB10.8693 million and obtained one patent, to which the national ministries, local governments and industry associations had given a high praise. The household refuse disposal projects in Songzi City and Yicheng City, and polluted soil control project in Jiayu County had been kicked off.

In the reporting period, the environmental protection business generated the total operation income at RMB13.873 billion and profit at RMB385 million, representing a year-on-year increase of 111.49% and 176.88% respectively.

4. Real estate

In the reporting period, the real estate company had insisted on quality improvement to create high-end real estate brands and improve the competitiveness in the industry. The Company had obtained 8 new land reserves, areas with interests of which amounted to 197,400 square meters by the investment of RMB8.499 billion in land interests, and the corresponding total gross floor area was 450,700 square meters.

- 21 - In the reporting period, the real estate company had developed the first level cities, positioned in high-end market, and continuously innovated development model and concept to define the Guofu series, Fu series, Gongguan series and Lanyuan series of products to lay a good foundation for the intensive, standardized implementation of development and operation. At the same time, the real estate company identified the product strategic direction of “5G Technology”, i.e. GREEN, GERMAN, GATHER, GRASP and GAIN, to show the characteristics of “green, healthy, science & technology and intelligent” in the construction technology system, improved the industry green technology residential theory system, and established the 5G Science and Technology Committee led by the academician from Chinese Academy of Sciences to be the strongest and most influential international team in domestic real estate industry, thus the corporate brand position had risen sharply. Hainan Haitangfu Bay project was awarded the “World-class Quality Destination for Celebrities”, “High-end Residential Demonstration Project” issued by Xinhua Net, and “The Most Expected New Landmark Award of 2016 in Chinese Cultural Tourism Business”; Yichang Jinxiuhuafu project won the “Excellent Landscape Gold Award Project of National Gardening Cup”.

In the reporting period, the new construction area was 963,700 square meters, the completed construction area was 1.0663 million square meters, the equity construction area of the projects under construction was 2.2677 million square meters, and the sold area was 521,100 square meters at total sales amount of RMB10.2 billion. As at the end of the reporting period, the available for sale area launched by the Company was 513,600 square meters.

In the reporting period, the real estate business generated the total operation income at RMB9.899 billion, increased by 53.18% compared with last year.

5. Cement

In 2016, the Cement Company had speeded up the structural adjustment, transformation and upgrading to overcome the complex economic situation and the industry overcapacity and other adverse effects, and achieved industry-leading results.

1) Marketing had achieved excellent results. Cement Company had further promoted the market share of the core market of central and western regions of Hubei Province to maintain the position of key supplier for significant projects in Hubei Province, expanded the regional cement market around the core market and the market space for civil cement, and enhanced the radiation capacity of special cement to consolidate the leading position in special cement industry. Cement Company had further strengthened the management and control of marketing system, continued to carry out the training for marketing system at all levels and strengthen assessment to improve the overall quality of marketing system. In 2016, the total sales of cement and clinker was 24.46 million tons (including 22.4 million tons of cement and 2.06 million tons of clinker), representing a year-on-year increase of 11.65%, and the key project development and services had achieved good results.

- 22 - 2) Cost control had obvious effects. Cement Company had strengthened technological innovation and deepened the management upgrading to ensure that the production costs had continued to decline. In 2016, the cost of clinker decreased by 3.66% and the cost of cement decreased by 5.35%, compared with last year.

3) Industry chain had been continued to expand. Cement Company had speeded up the commercial concrete production capacity layout in core regional market, while the total number of commercial concrete companies in operating was 10, with the total commercial concrete production capacity was 5.7 million cubic meters, increased by 17.52% compared with last year. The self-owned mine resources had been fully used to accelerate the pace of construction of aggregate production line, and Zhongxiang production line with annual capacity of 1.2 million tons of aggregate had been put into trial operation, thus the aggregate annual production capacity had exceeded 7.7 million tons, increased by 18.46% compared with last year.

4) Breakthrough in international business. The cement clinker production line project of Cement Company with daily production capacity of 2,500 tons in Kazakhstan had held a groundbreaking ceremony, completed the site geological exploration and technology process design, and implemented pre-construction works as planned. At the same time, the Cement Company had carried out regional market analysis and field visits in a number of countries.

5) Investment projects had been implemented in an orderly manner. Three cement clinker production line of the production capacity replacement projects in Hubei Zhongxiang, Dangyang, Songzi had been put into operation, Hunan Shimen white cement production line project had been under construction, two commercial concrete production enterprises in Yingcheng City and Honghu City of Hubei Province had been acquired, and the cement kiln collaboration disposal of municipal solid waste projects and disposal of contaminated soils project had been actively promoted.

In the reporting period, Cement Company had generated the operating revenue at RMB5.55 billion and profit at RMB1.076 billion, increased by 8.08% and 9.96% respectively compared with last year.

6. Civil blasting

In the reporting period, Yipuli Company had played its advantages of full industrial chain, actively responded to the continuous downward pressure on the mining economy, carried out various measures to promote growth and improve profit in the double down of production and price in civil explosive industry, and maintained the leading position in profitability in the industry. In the reporting period, the production capacity of industrial explosive in civil blasting had reached 310,500 tons, increased by 21.76% compared with last year, and been ranked No.3 of China, while the production of industrial explosive and industrial detonator was 178,300 tons and 26.17 million pieces respectively.

- 23 - 1) The acquisitions had been implemented moderately. In the reporting period, Yipuli Company had innovated trading model and further strengthened the position in northeast civil explosive market by the reorganization of civilian explosive assets of Heilongjiang Overseas Real Estate Group, which had been introduced by its wholly owned subsidiary in Sichuan as a strategic investor. In order to achieve the transformation and upgrading of enterprises, Yipuli Company had actively set up cooperation intention with many high-quality enterprises, steadily developed new business, and actively sought new business growth opportunities to lay a solid foundation for the leading position in domestic market.

2) Going abroad had been accelerated. In the reporting period, Yipuli Company insisted on giving priority to the development of international business and signed new contracts at the total amount of RMB340 million in the global downturn of the mining economy. Through the establishment of blasting company and production company, Yipuli had speeded up the landing of Pakistani civil explosive investment project; the operation and management of Hong Kong trade platform company had been standardized; by cooperation with the international well-known civil explosive enterprises and ammonium nitrate enterprises, Yipuli Company had speeded up to develop the international trade business.

3) Active transformation and upgrading. In the reporting period, Yipuli Company had moderately contracted the projects of coal and iron mine according to the terminal market changes, gradually transited to the hydropower, infrastructure and non-ferrous metal mining market, and resulted in 70 newly-signed projects with total signed contracts amount of about RMB5 billion. At the same time, relying on the deep development of the stock market, Yipuli Company had promoted the business to upgrade from single blasting construction to the general contractor of mine construction to optimize the business structure and further consolidate the core business of the integration of civil blasting, while the revenue of general contracting of mine construction had increased to 30%.

4) The technology improvement had been promoted. In the reporting period, Yipuli Company had improved scientific and technological innovation and successfully applied for post- doctoral research station in Chongqing to create an introducing and training platform for high-level technical talents. The technology project “the underground all-round loading robot for mixed emulsion explosives and the complete sets of automated production system research” had past the expert group’s inspection and acceptance; 13 national authorized patents and one first prize and one second prize of scientific and technological progress issued by China Blasting Industry Association had been obtained. Yipuli Company had become the leading domestic civil explosive enterprise with core leading technology advantages in China.

- 24 - 5) Management innovation had been promoted. In the reporting period, Yipuli Company had innovated the contract management system to create a platform of contract management system to achieve the classification of contracts and authorization, information integration and warning upon analysis; The financing methods had been innovated, and funds with small risk and low cost had been obtained twice by leaseback, in which the first one had saved financial costs more than RMB4 million. The safety management standardization team had been created, and Xilinhaote branch blasting team, Miyi branch ground station was rated as TOP100 teams of China Safety Production Association.

In the reporting period, Civil blasting business had generated the operating revenue at RMB2.779 billion and profit at RMB306 million, while the total amount of signed contracts was RMB6.2 billion.

7. Equipment Manufacturing

In the reporting period, the ship machinery company had implemented the enterprise development strategy, accelerated the development of new business, expanded the industrial chain, and speeded up the transformation and upgrading.

In the market development, ship machinery company had actively implemented the Company’s international business priority development strategy, vigorously developed the distributed energy business, set up the global market layout relying on international marketing strategy, and won a series of International major projects including Chad N’Djamena 100MW crude oil power plant construction, operation and maintenance project successfully at contract amount of USD305 million and Ghana 400MW heavy oil power plant construction project at contract amount of USD550 million, thus the international contracts had exceeded RMB10 billion and been doubled compared with last year. International key projects including Pakistan wind power EPC general contracting project and Indonesia Upper West Suokan pumped storage power station project had been kicked off successively to promote the revenue growth of equipment manufacturing business. At the same time, the ship machinery company had signed consignment, authorization, technology and other strategic cooperation agreements with many well-known international companies to expand horizon of development vision.

In early 2017, China Gezhouba Group Equipment Industry Co., Ltd. had been established to promote the distributed energy, energy storage and other high-end equipment business development. At the same time, the Company intends to plan and build the “Gezhouba High-end Equipment Industrial Park” in Wuhan East-West Lake District, which will be built to be a leading and influential demonstration industrial park in China with intelligent and green manufacturing in 3 to 5 years.

In the reporting period, equipment manufacturing business had generated the operating revenue at RMB1.102 billion and the international operating revenue at RMB257 million, increased by 148.52% and 483.73% respectively compared with last year, while the total amount of signed contracts was RMB12.95 billion.

- 25 - 8. Finance

In the reporting period, financial leasing company had actively carried out financial leasing business, leasing consulting business and entrusted loan business, innovated the development and optimized the business structure; at the same time, it had actively cooperated with the Company’s main business transformation and upgrading and raised funds through multi-channel to satisfy the funds needs in business operation, of which the capital utilization and business promoting speed was at the forefront of the finance leasing enterprises in Free Trade Zone. It had jointly funded the establishment of Gezhouba Jianxin Investment Fund Management Co., Ltd. with Jianxin (Beijing) Investment Fund Management Co., Ltd., the establishment of Gezhouba Agricultural Bank Investment Fund Management Co., Ltd. with Agricultural Bank of China International Enterprise Management Co., Ltd., and the establishment of China Securities Gezhouba City Development (Shenzhen) Industrial Investment Fund Management Co., Ltd. with China Securities City Development (Shenzhen) Industrial Investment Fund Management Co., Ltd. to provide financial support for the development of high-end and new businesses.

(III) The reason for the suspension of listing

□ Applicable 3 Not Applicable

(IV) The reason for the termination of listing

□ Applicable 3 Not Applicable

(V) Analysis and explanation of reasons and the relating impacts for the change of accounting policies and accounting estimations

3 Applicable □ Not Applicable

- 26 - 1. Significant change in accounting policy

The implementation of Value-added Tax Accounting Regulations

On December 3 2016, Ministry of Finance issued the Value-added Tax Accounting Regulations (Caikuai [2016] No.22), which applied for the relevant transactions incurred from May 1 2016. The main impacts of implementing the regulation in 2016 are as follow:

Contents and reasons for the change in accounting Name and amount of policy impacted reporting item (1) Adjust the “business tax and surcharges” tax and surcharges item in the income statement to “tax and surcharges”. (2) The property tax, land use tax, vehicle and Increase the amount of taxes and vessel use tax and stamp duty incurred in the surcharges at RMB47,590,692.83 enterprise operating activities from May 1 in current year, and reduce the 2016 are reclassified from the “management amount of management expense at expense” item to the “tax and surcharges” RMB47,590,692.83 in current year. item. The taxes that occurred before May 1 2016 are not adjusted. The comparison data will not be adjusted. (3) The VAT generated by recognized revenue Increase the balance of other current (or income) but the VAT tax liability has not liabilities at the end of the year at yet occurred so that the VAT is recognized RMB486,418.42, reduce the tax as output tax in the following period are payable at the end of the year at reclassified from “tax payable” to “other RMB486,418.42. current liabilities” (or “other non-current liabilities”). The comparison data will not be adjusted.

- 27 - (VI) Analysis and explanation of the reasons for the correction of significant accounting errors.

□ Applicable 3 Not Applicable

(VII) Compared with the previous annual financial report, the company should make a specific description for the changes in the scope of consolidated financial statements.

3 Applicable □ Not Applicable

1. Mergers between companies under non-common control

1) Mergers between companies under non-common control in current period

Unit: Yuan Currency: RMB Revenue of the Net profit of the Basis for acquiree from acquiree from Date of determining acquisition date acquisition date Equity Acquisition Acquisition the acquisition to the end of the to the end of the Name of acquiree Acquisition Acquisition cost ratio method Acquisition date date reporting period reporting period Beijing Zhongkai Xingye Investment July 1 2016 561,000,000.00 100% Cash July 1 2016 Refer to 79,646,286.02 13,986,720.51 Management Co., Ltd. Note 1 Hunan Haichuanda Investment Management July 1 2016 165,000,000.00 100% Cash July 1 2016 Refer to 23,140,488.68 3,352,256.40 Co., Ltd. Note 2 Beijing Gezhouba Longfor Property September 1 50% Control rights September 1 Refer to 4,524,394,747.67 817,608,021.64 Co., Ltd. 2016 obtained 2016 Note 3

Note: 1. The Company’s wholly-owned subsidiary, China Gezhouba Group Investment Holding Co., Ltd., acquired 100% equity in Beijing Zhongkai Xingye Investment Management Co., Ltd. on July 1 2016, the acquisition date, by the payment amount of RMB561 million. The basis for determining the acquisition date: (1) The equity acquisition agreement has been approved and signed; (2) Most of the equity transfer consideration has been paid; and (3) Industrial and commercial registration of change is completed.

2. The Company’s wholly-owned subsidiary, China Gezhouba Group Investment Holding Co., Ltd., acquired 100% equity in Hunan Haichuanda Investment Management Co., Ltd. on July 1 2016, the acquisition date by the payment amount of RMB165 million. The basis for determining the acquisition date: (1) The equity acquisition agreement has been approved and signed; (2) Most of the equity transfer consideration has been paid; and (3) Industrial and commercial registration of change is completed.

3. The Company’s wholly-owned subsidiary, China Gezhouba Group Real Estate Development Co., Ltd., held 50% equity of Beijing Gezhouba Longfor Property Co., Ltd (the “Longfor Property”), which has been accounted as a joint venture by equity method. In September 2016, according to the resolution of the Longfor Property shareholders’ meeting, China Gezhouba Group Real Estate Development Co., Ltd. had the right to control Longfor Property and make decisions in the operation and management. Therefore, Longfor Property will be included in the consolidated financial statements.

- 28 - 2) Merger cost and goodwill

Unit: Yuan Currency: RMB Beijing Hunan Zhongkai Xingye Haichuanda Investment Investment Management Management Item Co., Ltd. Co., Ltd. Merger cost – Cash 392,700,000.00 157,000,000.00 – Fair value of non-cash assets 168,300,000.00 8,000,000.00 Total merger cost 561,000,000.00 165,000,000.00 Less: share of fair value of identifiable net assets acquired 96,223,423.67 121,817,111.24 Goodwill/amount of merger cost less than share of fair value of identifiable net assets acquired 464,776,576.33 43,182,888.76

2. Disposal of a subsidiary

1) Single disposal of investment to a subsidiary with loss of control

Difference between Amount consideration of of other disposal and the comprehensive share of net assets income of the subsidiary transferred into on the level of Method of gains or losses consolidated Profit or determination and of investment financial Percentage of Carrying amount loss from key assumptions related Basis of statements remaining equity of remaining Fair value of re-measurement for the fair value to equity Consideration Percentage determination of corresponding on the day of equity on the remaining equity of remaining of remaining investment of of equity of equity Method of Timing of timing of losing to disposal losing control day of losing on the day of equity based equity on the day the original Name of subsidiary disposal disposal (%) equity disposal losing control control investment (%) control losing control on fair value of losing control subsidiary China Energy 14.19 Equity diluted 31 July 2016 Capital increase 36.81 899,422,737.19 906,508,393.88 7,085,656.69 Method of Engineering Group with loss of agreement signed, evaluation: Finance Co., Ltd. control industrial and Future income commercial method registration of Key assumption: change passed and cash flow and loss of control discount rate

- 29 -