Lomon Billions Group Co., Ltd 1H 2019 Report 20190820 Full Text of 2019 semi-annual report of Lomon Billions Group Co., Ltd Table of Contents 1 SECTION I: IMPORTANT NOTES, CONTENTS AND DEFINITIONS .......................................... 1 2 SECTION II: COMPANY PROFILE AND MAJOR FINANCIAL INDICATORS ............................. 3 2.1 COMPANY PROFILE .................................................................................................................... 3 2.2 CONTACT PERSON AND CONTACT INFORMATION ......................................................................... 3 2.3 OTHER INFORMATION ................................................................................................................. 4 2.3.1 contact information .......................................................................................................... 4 2.3.2 information disclosure and preparation location ............................................................. 4 2.4 MAJOR ACCOUNTING DATA AND FINANCIAL INDICATIORS ............................................................... 4 2.5 DIFFERENCES IN ACCOUNTING DATA UNDER THE DOMESTIC AND FOREIGN ACCOUNTING STANDARDS .......................................................................................................................................... 5 2.5.1 Differences in net profit and net assets in financial reports disclosed in accordance with international accounting standards and Chinese accounting standards, respectively ................... 5 2.5.2 Differences in net profit and net asset in financial reports disclosed in accordance with overseas accounting standards and Chinese accounting standards, respectively ........................ 6 2.6 ITEMS AND AMOUNT OF NON-RECURRING PROFIT AND LOSS........................................................ 6 3 SECTION III: BUSINESS OVERVIEW OF THE COMPANY ......................................................... 7 3.1 MAIN BUSINESS OF THE COMPANY DURING THE REPORTING PERIOD ............................................. 7 3.1.1 Major changes in main assets ....................................................................................... 11 3.1.2 major overseas assets .................................................................................................. 11 3.2 ANALYSIS OF CORE COMPETITIVENESS ...................................................................................... 11 4 SECTION IV:DISCUSSION AND ANALYSIS OF BUSINESS CONDITIONS ............................. 17 4.1 OVERVIEW ............................................................................................................................... 17 4.2 ANALYSIS OF MAIN BUSINESS ................................................................................................... 19 4.3 ANALYSIS OF NON-MAIN BUSINESS ........................................................................................... 22 4.4 ANALYSIS OF ASSET AND LIABILITY ............................................................................................ 22 4.4.1 major changes in asset composition ............................................................................. 22 4.4.2 Assets and liabilities measured at fair value ................................................................. 23 4.4.3 Restricted rights to assets at the end of the reporting period ....................................... 24 4.5 ANALYSIS OF INVESTMENT STATUS ........................................................................................... 24 4.5.1 Overall situation............................................................................................................. 24 4.5.2 Significant equity investment obtained during the reporting period .............................. 24 4.5.3 Significant non-equity investment in progress during the reporting period ................... 25 4.5.4 Financial assets measured at fair value ........................................................................ 25 4.5.5 Portfolio investment ....................................................................................................... 25 4.5.6 Derivatives investments ................................................................................................ 25 ii Full Text of 2019 semi-annual report of Lomon Billions Group Co., Ltd 4.5.7 Use of raised funds ....................................................................................................... 25 4.6 SALE OF MAJOR ASSETS AND EQUITY ...................................................................................... 25 4.6.1 Sale of major assets ...................................................................................................... 25 4.6.2 Sale of major equity ...................................................................................................... 25 4.7 VII、ANALYSIS OF MAJOR HOLDING AND PARTICIPATING COMPANIES ........................................ 25 4.8 STRUCTURED SUBJECTS CONTROLLED BY THE COMPANY ......................................................... 27 4.9 FORECAST OF OPERATING PERFORMANCE FROM JAN TO SEP 2019 ........................................... 27 4.10 RISKS FACED BY THE COMPANY AND COUNTERMEASURES .......................................................... 27 5 SECTION V: IMPORTANT PARTICULARS ................................................................................ 30 5.1 INFORMATION ABOUT THE ANNUAL GENERAL MEETING AND EXTRAODINARY GENERAL MEETING HELD DURING THE REPORTING PERIOD .......................................................................................................... 30 5.1.1 Information about the annual general meeting ............................................................. 30 5.1.2 The preferred shareholders whose voting rights were restored requested an extraordinary general meeting ...................................................................................................... 30 5.2 PROFIT DISTRIBUTION OR CAPITAL ACCUMULATION FUND CONVERTED TO THE SHARE CAPITAL PLAN IN THE REPORTING PERIOD ................................................................................................................... 30 5.3 COMMITMENTS THAT ARE FULFILLED DURING THE REPORTING PERIOD AND NOT FULFILLED AT THE END OF THE REPORTING PERIOD BY ACTUAL CONTROLLERS, SHAREHOLDERS, AFFILIATES OR ACQUIRERS OF THE COMPANY, THE COMPANY AND OTHER RELEVANT PARTIES .............................................................. 31 5.4 APPOINTMENT AND DISMISSAL OF ACCOUNTING FIRM ............................................................... 31 5.5 EXPLANATION OF THE BOARD OF DIRECTORS, THE BOARD OF SUPERVISORS AND INDEPENDENT DIRECTORS (IF ANY) ON THE “NON-STANDARD AUDIT REPORT” ISSUED BY THE ACCOUNTING FIRM FOR THE REPORTING PERIOD ............................................................................................................................ 31 5.6 EXPLANATION OF THE BOARD OF DIRECTORS, ON THE “NON-STANDARD AUDIT REPORT” ISSUED BY THE ACCOUNTING FIRM FOR THE REPORTING PERIOD ........................................................................... 31 5.7 MATTERS CONCERNING BANKRUPTCY REORGANIZATION .......................................................... 31 5.8 MAJOR LAWSUITS AND ARBITRATIONS ...................................................................................... 31 5.9 QUESTIONING BY MEDIA .......................................................................................................... 32 5.10 PUNISHMENT AND RECTIFICATION ............................................................................................. 32 5.11 DESCRIPTION ON INTEGRITY OF THE COMPANY AND ITS CONTROLLING SHAREHOLDER AND ACTUAL CONTROLLER ...................................................................................................................................... 32 5.12 DESCRIPTION ON IMPLEMENTATION OF THE COMPANY’S EQUITY INCENTIVES PLAN, EMPLOYEE STOCK OWNERSHIP PLAN OR OTHER EMPLOYEE INCENTIVES................................................................ 32 5.13 MAJOR RELATED PARTY TRANSACTIONS .................................................................................. 33 5.13.1 Related party transactions related to daily operations .................................................. 33 5.13.2 2、Related party transactions arising from acquisition and sale of assets or equity .... 33 5.13.3 Related party transactions involving joint foreign investment ....................................... 33 5.13.4 Related creditor’s rights and debts ................................................................................ 34 5.13.5 Other major related party transactions .......................................................................... 34 | Table of Contents iii Full Text of 2019 semi-annual report of Lomon Billions Group Co., Ltd 5.14 MAJOR CONTRACTS AND THEIR PERFORMANCE ........................................................................ 34 5.14.1 Description of Trusteeship, Contracting and Lease ...................................................... 34 5.14.2 Major guarantees .......................................................................................................... 35 5.14.3 Other major contract ..................................................................................................... 44 5.15 SOCIAL RESPONSIBILITY .......................................................................................................... 44 5.16 XVI、DESCRIPTION OF OTHER IMPORTANT MATTERS