2019 One of the Annual General Meeting documents

2019 Annual Work Report of the Company’s Board of Directors

Dear Shareholders:

In 2019, the Company’s Board of Directors conscientiously fulfilled its duties as prescribed by the Company Law and other relevant laws and regulations, as well as by the Company Charter, thereby fully exercising the Board’s due functions. Each director demonstrated diligence and accountability, rigorously performing their duties to ensure sound decision-making and compliant operations. The following is a report on the relevant work:

I. Board of Directors’ Work in 2019

1. Meetings of the Board of Directors and the contents of their resolutions during the reporting period

During the reporting period, the Company’s Board of Directors held seven meetings.

(1) First Meeting of the Eighth Board of Directors

On January 17, 2019, the Eighth Board of Directors of the Company convened its first meeting through a combination of in-person and remote voting. At this meeting, the following resolutions were adopted: election of the Chairman and Vice Chairmen of the Board; election of members of the Audit Committee of the Board; election of members of the Compensation and Assessment Committee of the Board; appointment of the General Manager; appointment of the Deputy General Managers and the Chief Financial Officer; appointment of the Company Secretary; and appointment of the Securities Affairs Representative. The announcement regarding the resolutions passed at this Board meeting was published on January 18, 2019, in the China Securities Journal, the Hong Kong Commercial Daily, and the Cninfo website.

(2) Second Meeting of the Eighth Board of Directors

On March 20, 2019, the Eighth Board of Directors of the Company held its second meeting by way of written resolution. At this meeting, the following resolutions were reviewed and adopted: a report on the Company’s routine related-party transactions. The announcement of the resolutions passed at this board meeting was published in the China Securities Journal, the Hong Kong Commercial Daily, and the Cninfo website on March 22, 2019.

(3) Third Meeting of the Eighth Board of Directors

On April 19, 2019, the Eighth Session of the Company’s Board of Directors held its third meeting in the Company’s Third-Floor Conference Room. The following resolutions were reviewed and adopted at the meeting: the General Manager’s Report on Work for 2018; the Board of Directors’ Report on Work for 2018; the Company’s 2018 Financial Final Accounts Report; the Proposed Plan for Profit Distribution for 2018; the Company’s 2018 Annual Report; the Company’s First-Quarter Report for 2019; the Special Report on the Deposit and Use of Funds Raised in 2018; the Company’s 2018 Internal Control Evaluation Report; the Company’s 2018 Corporate Social Responsibility Report; the Independent Directors’ 2018 Performance Report; the Report on Making Provisions for Asset Impairment in 2018; the Report on Authorizing the Chairman of the Board and the Management Team to Apply for Bank Credit Lines and Loan Limits for 2019; the Report on the Estimated Amount of Routine Related-Party Transactions for 2019; the Report on Engaging an Audit Firm for 2019; the Report on Amending the Company’s Articles of Association; the Report on Changes in Accounting Policies; and the Report on the Basic Matters Pertaining to the Convening of the 2018 Annual General Meeting of Shareholders. The announcement of the resolutions passed at this Board meeting was published in the China Securities Journal, the Hong Kong Commercial Daily, and the Cninfo website on April 20, 2019.

(4) Fourth Meeting of the Eighth Board of Directors

On May 17, 2019, the Eighth Board of Directors of the Company convened its fourth meeting in the Company’s Third-Floor Conference Room. At this meeting, the following resolutions were reviewed and adopted: a report on the release of part of the share pledge of Guotai Junan Securities held by Dajialeng EB; a report on candidates for the Eighth Board of Directors; and a report on the basic matters pertaining to the convening of the Second Extraordinary General Meeting of Shareholders for 2019. The announcement of the resolutions passed at this board meeting was published on May 18, 2019, in the China Securities Journal, the Hong Kong Commercial Daily, and the Cninfo website.

(5) Fifth Meeting of the Eighth Board of Directors

On August 23, 2019, the Eighth Board of Directors of the Company held its fifth meeting by way of written resolution. At this meeting, the following resolutions were reviewed and adopted: the Company’s 2019 Semi-Annual Report and its Summary; and the Report on Changes in Accounting Policies. The announcement regarding the resolutions passed at this board meeting was published on August 24, 2019, in the China Securities Journal, the Hong Kong Commercial Daily, and the Cninfo website.

(6) Sixth Meeting of the Eighth Board of Directors

On October 25, 2019, the Eighth Board of Directors of the Company held its sixth meeting by way of written resolution. At this meeting, the following resolution was reviewed and adopted: the Company’s Third Quarter Report for 2019. The announcement regarding the resolutions passed at this board meeting was published on October 26, 2019, in China Securities Journal, Hong Kong Commercial Daily, and the Cninfo website.

(7) The 7th Meeting of the 8th Board of Directors

On December 20, 2019, the Eighth Session of the Company’s Board of Directors held its seventh meeting by way of written resolution. At this meeting, the following resolutions were reviewed and adopted: a report on the change of the Company’s name; a report on the change of the Company’s business scope; a report on the amendment of the Company’s Articles of Association; and a report on matters relating to the convening of the First Extraordinary General Meeting of Shareholders for 2020. The announcement of the resolutions passed at this Board meeting was published in the China Securities Journal, the Hong Kong Commercial Daily, and the Cninfo website on December 21, 2019.

2. Implementation of Resolutions Adopted by the Shareholders’ Meeting by the Board of Directors

The Company’s Board of Directors has effectively implemented all resolutions passed at the 2018 Annual General Meeting.

The Company’s 2018 dividend distribution plan was fully implemented by the Board of Directors in July 2019.

3. Performance of the Board Audit Committee

The Audit Committee under the Company’s Board of Directors performs its duties in accordance with the Company’s “Detailed Rules for the Implementation of the Board of Directors’ Audit Committee” and the “Annual Report Working Procedures of the Audit Committee,” overseeing the Company’s internal audit system and its implementation, reviewing the Company’s financial information and disclosures, and evaluating the work of external auditing firms.

In the course of the company’s internal control evaluation, the Audit Committee has actively fulfilled its organizational, leadership, and oversight responsibilities. In accordance with the company’s criteria for identifying internal control deficiencies, the Committee reviewed and validated the consolidated table of internal control deficiency identifications prepared by the Internal Control Evaluation Working Group, examined the Company’s 2019 Internal Control Evaluation Report, and engaged Shinewing Zhonghe Certified Public Accountants to conduct an internal control audit. The audit concluded that the current state of the Company’s internal control system complies with applicable requirements, is aligned with the Company’s actual operations, and has been effectively implemented; moreover, the Company’s 2019 Internal Control Evaluation Report accurately reflects these findings.

During the Company’s 2019 audit engagement, the Audit Committee maintained active communication and effective coordination with the auditing firm, Shinewing Zhonghe Certified Public Accountants. Prior to the auditors’ on-site engagement, the Committee discussed and reached consensus with the engagement partner of the auditing firm on matters such as the audit plan, the schedule, and key issues requiring attention during the audit period. Throughout the audit process, the Committee kept abreast of progress and repeatedly urged the auditing firm to carry out the audit in a timely manner while maintaining high quality and ensuring that all deliverables met the required standards. Upon completion of the audit, the Committee thoroughly reviewed the Company’s annual financial statements and annual report, concluding that the financial statements are comprehensive and accurate, and that the financial information and other disclosures made by the Company are objective, truthful, and faithfully reflect the Company’s annual financial performance.

The Audit Committee is of the view that, in providing audit services for the Company for the year 2019, Shinewing Zhonghe Certified Public Accountants has adhered to the professional standards of independence, objectivity, and impartiality; conducted the audit in strict accordance with the new accounting standards; developed a rigorous and well-structured audit plan; ensured adequate staffing; proactively communicated with the Audit Committee and the independent directors; exercised due diligence and responsibility; and thereby successfully completed the Company’s 2019 audit engagement. The Committee therefore proposes that the Company re-engage Shinewing Zhonghe Certified Public Accountants as its auditor for the year 2020.

4. Performance of the Board’s Compensation and Assessment Committee

The Compensation and Assessment Committee under the Company’s Board of Directors has performed its duties in accordance with the Company’s Implementing Rules for the Board of Directors’ Compensation and Assessment Committee, reviewing the annual compensation of the Company’s directors, supervisors, and senior management. The Committee concludes that the decision-making procedures and remuneration standards for the aforementioned personnel are in compliance with applicable laws and regulations as well as the Company’s internal policies, and that the compensation information disclosed in the Company’s 2019 Annual Report is true and accurate.

II. 2020 Board of Directors Work Plan

In 2020, the Company’s Board of Directors will continue to focus on the transformation and upgrading of existing businesses and the incubation and development of new ventures. The Board will intensify efforts to deepen its presence in key niche markets such as petrochemicals, cold-chain logistics, beer and dairy products, and marine refrigeration, while accelerating the cultivation of emerging businesses including Bingshan Wisdom Valley, financial leasing, industrial big-data applications, and smart energy management. At the same time, the Board will further strengthen execution by emphasizing market exploration, pragmatism, collaboration, and decisive action, ensuring the achievement of the 2020 revenue and profit targets and laying a solid foundation for sustainable growth in the years ahead.

Please review the above report.

May 15, 2020