Boyuan Construction Group, Inc.

NOTICE OF

SPECIAL MEETING OF COMMON SHAREHOLDERS

TO BE HELD ON AUGUST 21, 2020

and

MANAGEMENT INFORMATION CIRCULAR

THIS NOTICE OF MEETING AND MANAGEMENT INFORMATION CIRCULAR IS FURNISHED IN CONNECTION WITH THE SOLICITATION BY THE MANAGEMENT OF BOYUAN CONSTRUCTION GROUP, INC. OF PROXIES TO BE VOTED AT THE SPECIAL MEETING OF SHAREHOLDERS OF BOYUAN CONSTRUCTION GROUP, INC. TO BE HELD ON FRIDAY, AUGUST 21, 2020.

TO BE HELD:

By Virtual Meeting Only, accessible online at:

https://zoom.us/j/8166872833?pwd=QXBZR2Fia3RiQkNpa29JaVlNall2QT09

Meeting ID: 816 687 2833 Password: 8BbXJx

Or by Phone:

Canada: +1 778 907 2071 or +1 204 272 7920 or +1 438 809 7799 or +1 587 328 1099 or +1 647 374 4685 or +1 647 558 0588
Hong Kong: +852 5808 6088 or +852 5803 3730 or +852 5803 3731 Meeting ID: 816 687 2833 Password: 610782
Find your local number: https://zoom.us/u/acTGFOnn9g

Friday, August 21, 2020 10:00 a.m. (Toronto Time)

This document requires your immediate attention. If you are in doubt as to how to deal with it, you should consult your investment dealer, broker, bank manager or other professional advisor.

Dated: July 20, 2020

July 20, 2020

To the Shareholders of Boyuan Construction Group, Inc.:

On behalf of the Board of Directors (the “ Board ”) of Boyuan Construction Group, Inc. (the “ Company ” or “ Boyuan ”), we would like to invite you to the special meeting of the holders (the “ Shareholders ”) of common shares (the “ Common Shares ”) in the capital of the Company to be held at 10:00 a.m. (Toronto time) (the “ Meeting ”) by virtual meeting only. You may attend the meeting electronically by joining our Zoom meeting by following the instructions on the Notice of Meeting.

You will be asked to consider and to vote upon a special resolution which would enable the Company to proceed with a going private transaction (the “ Going Private Transaction ”) proposed by Mainway Management Limited (the “ Majority Shareholder ”), a company controlled by Mr. Shou Cailiang, President, Chief Executive Officer and a director of the Company, pursuant to the terms and conditions of an insider support agreement dated June 23, 2020 (the “ Support Agreement ”), entered into between the Company and the Majority Shareholder, who controls 17,056,144 Common Shares or approximately 53.67% of the total issued and outstanding Common Shares. A copy of the Insider Support Agreement is attached as Schedule “E” to the Circular.

The Support Agreement provides that the Going Private Transaction is to be carried out by way of the consolidation of all Common Shares (the “ Consolidation ”) on the basis of 8,000,000 pre-Consolidation Common Shares for one (1) post-Consolidation Common Share. All fractional Common Shares after the Consolidation will be redeemed by the Company (the “ Redemption ”) at a price of C$0.50 per each pre-Consolidation Common Share (other than a Common Share for which a dissent right has been exercised). As a result of the Consolidation and the Redemption, the only remaining Shareholder of the Company would be the Majority Shareholder, and all other parties who are currently Shareholders of the Company would be paid C$0.50 share for each of their pre-Consolidation Common Shares. The Company has applied to delist its Common Shares from the Toronto Stock Exchange (“ TSX ”) and will apply to cease to be a reporting issuer in those jurisdictions in which it currently holds such status. The Going Private Transaction is subject to approval of the TSX.

Any Shareholder participating in the Redemption will be entitled to receive a cash payment of C$0.50 for each preConsolidation Common Share. The cash payment for each pre-Consolidation Common Share represents a premium of approximately 59.42% to the volume weighted average trading price of the Common Shares for the thirty (30) trading days ended June 22, 2020, the last trading day prior to the announcement of the Support Agreement.

In order to complete the Going Private Transaction as contemplated in the Support Agreement, the Company is required to complete certain pre-Redemption steps, including amending the Company's Articles (the “ PreConsolidation Amendment ”) to permit the Consolidation and the Redemption. Shareholders entitled to vote at the Meeting are being asked to approve a special resolution authorizing the Pre-Consolidation Amendment (the “ Transaction Resolution ”) that must be passed by: (a) at least two-thirds of the votes cast by Shareholders present in person or represented by proxy at the Meeting; and (b) for the purposes of Multilateral Instrument 61-101 Protection of Minority Shareholders in Special Transactions, a majority of the votes cast by all Shareholders, other than the Majority Shareholder, its associates and affiliates, and all persons acting jointly or in concert with it, (collectively, the “ Minority Shareholder ”), present in person or represented by proxy at the Meeting.

The Board has determined, on the recommendation of the Special Committee (as defined below) that the Going Private Transaction is in the best interests of the Company and that the consideration to be received by the Minority Shareholders pursuant to the Going Private Transaction is fair, from a financial point of view, to Minority Shareholders and is unanimously recommending that all Shareholders vote in favour of the Transaction Resolution. Accompanying this letter, among other things, are a notice of meeting, Instrument of Proxy and a management information circular of the Company for the Meeting (the “ Circular ”) containing important information relating to the Going Private Transaction, including the reasons why the Board is recommending that you vote FOR the Transaction Resolution relating to the Going Private Transaction. A special committee (the “ Special Committee ”) composed of all of the four independent directors of the Company was constituted and has recommended that the Board approve the Going Private Transaction based, in part, upon a formal valuation and fairness opinion (the “ BDO Valuation ”), which was provided by BDO Canada LLP (“ BDO ”), the independent financial advisor to the

Special Committee. The BDO Valuation opined as to the fair market value of the Common Shares as of June 22, 2020. A copy of the BDO Valuation is attached as Schedule “ B ” to the Circular.

In addition to any other rights a Shareholder may have, a Registered Shareholder who complies with the dissent procedure under Section 190 of the CBCA is entitled to be paid the fair value (as determined by an applicable court) of the Common Shares held by such Registered Shareholder in respect of which it dissents, determined as at the close of business on the day before the Transaction Resolution is approved and adopted. The dissent procedure provided by Section 190 of the CBCA is summarized in Schedule “C” to the Circular, and the full text of Section 190 of the CBCA is set forth in Schedule “D” to the Circular. Registered Shareholders who wish to exercise dissent rights are referred to these Schedules. A Registered Shareholder wishing to exercise a right of dissent should consider seeking legal advice in advance of the Meeting, as failure to strictly comply with the relevant provisions of Section 190 of the CBCA may result in the loss or unavailability of the right of dissent.

Shareholders are urged to read the Circular carefully and in its entirety. If you are in doubt as to how to deal with the matters described in these materials, you should consult your legal, tax, financial or professional advisors.

You will also find accompanying the Circular a letter of transmittal which provides information concerning the procedure you must follow in order to receive your cash entitlement if the Redemption is completed. You may request copies of the Company's annual and/or interim financial statements and management's discussion and analysis related thereto by contacting Paul Law, Chief Financial Officer, at (852) 9329-5088 or you may access such documents on the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) website at www.sedar.com.

You are invited to attend the Meeting. However, if you are unable to attend, we would appreciate your signing and returning the accompanying Instrument of Proxy so that your vote is recorded. In the meantime, if you have any questions, please contact Paul Law, Chief Financial Officer of the Company at (852) 9329-5088.

Sincerely,

(signed) “ Francis Leong ” Chair of the Special Committee

BOYUAN CONSTRUCTION GROUP, INC.

NOTICE OF SPECIAL MEETING OF COMMON SHAREHOLDERS

TAKE NOTICE that the special meeting (the “ Meeting ”) of the holders (the “ Shareholders ”) of common shares (the “ Common Shares ”) in the capital of Boyuan Construction Group, Inc. (the “ Company ” or “ Boyuan ”) will be held by virtual meeting only on Friday, August 21, 2020 at 10:00 a.m. (Toronto time) for the following purposes:

to consider and, if thought fit, pass, with or without variation, a special resolution (the “ Transaction Resolution ”) authorizing an amendment (the “ Pre-Consolidation Amendment ”) to the Company's articles (the “ Articles ”) to consolidate all common shares of the Company (the “ Common Shares ”) on the basis of 8,000,000 pre-Consolidation Common Shares for one (1) post-Consolidation Common Share (the “ Consolidation ”) and to permit the Company to redeem all fractional post-Consolidation Common Shares (the “ Redemption ”), all as more particularly described in the accompanying management information circular (the “ Circular ”) of the Company dated July 20, 2020; and
to transact such other business as may properly come before the Meeting or any adjournments or postponements thereof.

The Meeting will be held by Virtual Meeting only, accessible online at:

https://zoom.us/j/8166872833?pwd=QXBZR2Fia3RiQkNpa29JaVlNall2QT09

Meeting ID: 816 687 2833 Password: 8BbXJx

Or by Phone:

Canada: +1 778 907 2071 or +1 204 272 7920 or +1 438 809 7799 or +1 587 328 1099 or +1 647 374 4685 or +1 647 558 0588
Hong Kong: +852 5808 6088 or +852 5803 3730 or +852 5803 3731

Meeting ID: 816 687 2833 Password: 610782

Find your local number: https://zoom.us/u/acTGFOnn9g

In addition, the Transaction Resolution requires the majority approval of a “minority” of the Shareholders ( i.e. the number of Common Shares which excludes Common Shares beneficially owned or over which control or direction is exercised by a person whose votes may not be included in determining minority approval pursuant to Multilateral Instrument 61-101 Protection of Minority Securityholders in Special Transactions ) . Additional information relating to the Transaction Resolution and the proposed Going Private Transaction to which the approval of the Transaction Resolution is a pre-requisite is set forth in the Circular. A copy of the text of the Transaction Resolution is set out in Schedule “A” of the Circular.

The board of directors of the Company (the “ Board ”) has by resolution fixed the close of business on July 20, 2020 as the record date for the determination of those Shareholders (the “ Registered Shareholders ”) entitled to notice of and to vote at the Meeting, and any adjournment or postponement thereof.

Under Section 190 of the Canada Business Corporations Act (the “ CBCA ”), a Shareholder may dissent in the manner described in Schedule “C” and Schedule “D” in the accompanying Circular in respect of the PreConsolidation Amendment. If the Pre-Consolidation Amendment becomes effective, dissenting Shareholders who comply with procedures set forth in Section 190 of the CBCA will be entitled to be paid the fair value (as determined by an applicable court) for their Common Shares. Each Registered Shareholder who intends to exercise rights of dissent should carefully consider and comply with Section 190 of the CBCA, and should in advance of

the Meeting, consult a legal advisor. Failure to strictly comply with the requirements set forth in Section 190 of the CBCA may result in the loss or unavailability of any right of dissent. Persons who are beneficial owners of Common Shares registered in the name of a broker, custodian, nominee or other intermediary who wish to dissent should be aware that only the Registered Shareholders are entitled to dissent. Accordingly, if you are such a beneficial owner of Common Shares desiring to exercise your right of dissent, you must make arrangements for the Common Shares beneficially owned by you to be registered in your name prior to the time that the written objection to the PreConsolidation Amendment is required to be received by the Company or, alternatively, make arrangements for the Registered Shareholder of your Common Shares to dissent on your behalf.

It is desirable that as many Common Shares as possible be represented at the Meeting. If you do not expect to attend the Meeting, we urge you to ensure that your shares are represented at the Meeting by completing the enclosed instrument of proxy and returning it as soon as possible in the envelope provided for that purpose. All proxies, to be valid, must be received by Computershare Investor Services Inc., Proxy Department, 100 University Avenue, 9th Floor, Toronto, Ontario, M5J 2Y1, at least forty-eight (48) hours, excluding Saturdays, Sundays and holidays, before the Meeting or any adjournment thereof. Late proxies may be accepted or rejected by the Chairman of the Meeting in his discretion, and the Chairman is under no obligation to accept or reject any particular late proxy. Shareholders who are not Registered Shareholders but plan to attend the Meeting must follow the instructions set forth in the voting instruction form or proxy form sent to them. If you hold your Common Shares in a brokerage account, you are not a Registered Shareholder.

Dated : July 20, 2020.

BY ORDER OF THE BOARD

(signed) “Shou Cailiang ” Shou Cailiang President and Chief Executive Officer

As part of our priority to protect the health and safety of the public and our team members in light of the COVID-19 situation, we will hold a virtual 2020 Special Shareholder meeting, accessible online at 10:00 a.m. (Toronto time) on Friday, August 21, 2020. As a shareholder, you have the right to vote your shares on all items that come before the meeting. Your vote is important and we facilitate voting by enabling you to vote by proxy prior to the meeting. We encourage you to do so and have arranged for voting on the Internet, by phone, by fax or by mail. You can also vote by attending the virtual meeting.

Page

GLOSSARY OF TERMS .......................................................................................................................................................1 SUMMARY ............................................................................................................................................................................4 Date, Time and Place of Meeting.............................................................................................................................4 Record Date..............................................................................................................................................................4 Purpose of Meeting ..................................................................................................................................................4 Going Private Transaction - The Pre-Consolidation Amendment, the Consolidation, the Redemption and the Post-Redemption Steps ............................................................................................................................................4 The Consolidation ............................................................................................................................................ 4 The Redemption ............................................................................................................................................... 4 The Post-Redemption Steps.............................................................................................................................. 6 Special Committee ...................................................................................................................................................6 Shareholder Approvals Required .............................................................................................................................6 Certain Canadian Federal Income Tax Considerations ............................................................................................7 Right of Dissent........................................................................................................................................................7 Effect of the Going Private Transaction on Markets and Listings............................................................................7 Recommendation of the Board.................................................................................................................................7 Forward-Looking Statements...................................................................................................................................8 The Company...........................................................................................................................................................9 Solicitation of Proxies..............................................................................................................................................9 Appointment and Revocation of Proxies................................................................................................................10 Advice to Beneficial Shareholders .........................................................................................................................10 Voting of Proxies ...................................................................................................................................................11 Quorum .................................................................................................................................................................11 VOTING SHARES AND PRINCIPAL HOLDERS THEREOF ..........................................................................................12 INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS................................................................................12 INTERESTS OF INFORMED PERSONS IN MATERIAL TRANSACTIONS..................................................................13 MANAGEMENT CONTRACTS .........................................................................................................................................13 INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON ..................................................................14 PARTICULARS OF MATTERS TO BE ACTED UPON....................................................................................................14 Approval of Going Private Transaction..................................................................................................................14 Going Private Transaction - The Pre-Consolidation Amendment, the Redemption and the Post-Redemption Steps ............................................................................................................................................................... 14 Background and Special Committee Matters ................................................................................................. 15 Price Range and Trading Volumes of the Common Shares............................................................................ 19 Dividend Policy.............................................................................................................................................. 19 Previous Distributions of Common Shares..................................................................................................... 20 Recommendation of the Board....................................................................................................................... 20 Engagement of BDO ...................................................................................................................................... 20 Prior Valuations and Offers............................................................................................................................ 21 Summary of the Support Agreement .............................................................................................................. 21 Shareholder Approvals Required.................................................................................................................... 25 Surrender of Share Certificates for the Consideration.................................................................................... 26 Effect of the Consolidation and Redemption on Markets and Listing............................................................ 28

Right of Dissent.............................................................................................................................................. 28 Tax Considerations......................................................................................................................................... 28 Ownership of Securities of the Company....................................................................................................... 32 REGISTRAR, TRANSFER AGENT AND DEPOSITARY.................................................................................................33 RISK FACTORS...................................................................................................................................................................33 OTHER BUSINESS..............................................................................................................................................................34 GENERAL............................................................................................................................................................................34 ADDITIONAL INFORMATION .........................................................................................................................................34 BOARD APPROVAL...........................................................................................................................................................35 CONSENT ............................................................................................................................................................................36 SCHEDULE “A” TRANSACTION RESOLUTION...........................................................................................................A1 SCHEDULE “B” BDO VALUATION REPORT................................................................................................................B1 SCHEDULE “C” SUMMARY OF DISSENT RIGHTS......................................................................................................C1 SCHEDULE “D” TEXT OF SECTION 190 OF THE CBCA .............................................................................................D1 SCHEDULE “E” SUPPORT AGREEMENT ...................................................................................................................... E1 SCHEDULE “F” BOYUAN CONSTRUCTION GROUP, INC. ........................................................................................ F1

ii -

The following is a glossary of certain terms used in this Circular, including Schedule “A” hereto.

GLOSSARY OF TERMS

“ Articles ” means the articles of incorporation of the Company, including all amendments thereto;

“ Audit Committee ” means the Audit Committee of the Board;

“ BDO ” means BDO Canada LLP;

“ BDO Valuation ” means the formal valuation and fairness opinion dated as of June 22, 2020 prepared by BDO and setting out a range of values for the fair market value of the Company as at June 22, 2020;

“ Beneficial Shareholders ” means Shareholders who do not hold Common Shares in their own name;

“ Board ” means the board of directors of the Company;

“ Business Day ” means any day on which commercial banks are generally open for business in Toronto or Beijing, other than a Saturday, Sunday or a day observed as a holiday in Toronto or Beijing, under applicable laws;

“ CBCA ” means the Canada Business Corporations Act ;

“ Circular ” means this management information circular of the Company, dated July 20, 2020 prepared for the purposes of the Meeting;

“ Common Shares ” means common shares in the capital of the Company;

“ Company ” or “ Boyuan ” means Boyuan Construction Group, Inc.;

“ Completion Date ” means the date on which the Redemption Funds have been forwarded to the Depositary and the Depositary has been instructed or caused by the Company in accordance with the terms of the Support Agreement, to deliver the Consideration to the Minority Shareholders;

“ Consideration ” means the payment which any Minority Shareholder will be entitled to on the Redemption, the amount of which is equal to C$0.50 for each pre-Consolidation Common Share held by the Minority Shareholder (other than a Dissenting Shareholder);

“ Consolidation ” means the consolidation of the Common Shares on the basis of 8,000,000 pre-consolidation Common Shares for one (1) post-Consolidation common Share;

“ Depositary ” means Computershare Investor Services Inc., or such other person as the parties may agree to in writing;

“ Dissenting Common Shares ” means Common Shares held by Registered Shareholders and on behalf of Beneficial Shareholders who in each case wish to exercise dissent rights under the CBCA;

“ Dissenting Shareholder ” means a Registered Shareholder who has validly exercised his, her or its dissent rights in respect of the Redemption, under, and strictly in accordance with provisions of, Section 190 of the CBCA;

“ Effective Date ” means the date shown on the certificate of amendment to be issued in respect of the PreConsolidation Amendment;

“ Effective Time ” means the time a certificate of amendment is issued for the Pre-Consolidation Amendment;

“ Fractional Share ” means a fraction of Common Share equal to the fraction obtained when the number of preConsolidated Common Shares held by a Fractional Shareholder immediately prior to the Effective Time of the Consolidation is divided by 8,000,000;

“ Fractional Shareholder ” means a Shareholder holding less than 8,000,000 pre-Consolidation Common Shares immediately prior to the Effective Time of the Consolidation;

“ Going Private Transaction ” means the transaction set forth in this Circular to take the Company private, including the Pre-Consolidation Amendment, the Redemption and the applications to delist the Common Shares from the TSX and to cease to be a reporting issuer in those jurisdictions where the Company currently holds such status. The Going Private Transaction is subject to approval of the TSX ;

“ Instrument of Proxy ” means the form of proxy enclosed with this Circular;

“ intermediaries ” means brokers, investment firms, clearing houses and similar entities that hold Common Shares on behalf of Beneficial Shareholders;

“ Letter of Transmittal ” means the letter of transmittal to be delivered to holders of Common Shares on the Record Date, in connection with the Meeting;

“ Majority Shareholder ” means Mainway Management Limited, its affiliates and all those acting jointly or in concert therewith for the purposes of the Going Private Transaction;

“ Management Designees ” means the persons named in the enclosed Instrument of Proxy selected by the directors of the Company to represent as proxy the Shareholder who appoints them;

“ Meeting Date ” means August 21, 2020, unless the Meeting is adjourned, delayed or postponed, in which case “Meeting Date” shall refer to the date on which the Meeting is held;

“ Meeting Materials ” means, collectively, the Notice of Meeting, the Circular, the Letter of Transmittal and the form of proxy;

“ Meeting ” means the special meeting of the Shareholders to be held on the Meeting Date by virtual meeting only at 10:00 a.m. (Toronto time) or any postponements or adjournments thereof;

“ MI 61-101 ” means Multilateral Instrument 61-101 — Protection of Minority Security Holders in Special Transactions ;

“ Minority Shareholders ” means all Shareholders other than the Majority Shareholder;

“ NI 52-110 ” means Canadian Securities Administrators' National Instrument 52-110 Audit Committees ;

“ Notice of Meeting ” means the notice of the Meeting accompanying the Circular;

“ Pre-Consolidation Amendment ” means the amendment of the Articles which, among other things, implements the Consolidation and to permit the Redemption;

“ Transaction Resolution ” means the special resolution of the Shareholders of the Company to approve the PreConsolidation Amendment in the form set out in Schedule “A” to this Circular;

“ Record Date ” means July 20, 2020, the record date of the Meeting;

“ Redemption ” means the redemption of the fractional post-Consolidation Common Shares at the Completion Date and for the Consideration;

“ Redemption Funds ” means an amount equal to the aggregate Consideration to be paid to the Minority Shareholders in accordance with the Redemption;

“ Redemption Resolution ” means the resolution adopted by the Board authorizing the Redemption;

“ Registered Shareholder ” means a holder of Common Shares, as noted in the records of the Transfer Agent, as of the Record Date;

“ Remaining Shareholder ” means a Shareholder, being the Majority Shareholder, who will hold all Common Shares following the Redemption;

“ Shareholder ” means a holder of Common Shares;

“ Special Committee ” means the special committee of the Board comprised of Francis Leong (Chair), John Jack Duffy, Fang Lixin and Liu Manhong, which was established on June 2, 2020, to consider the proposed Going Private Transaction;

“ Subject Shares ” means the 17,056,144 Common Shares beneficially owned by the Majority Shareholder;

“ Support Agreement ” means the insider support agreement dated June 23, 2020 between the Company and the Majority Shareholder;

“ Transfer Agent ” means Computershare Investor Services Inc., the registrar and transfer agent of the Company; and

“ TSX ” means the Toronto Stock Exchange.

SUMMARY

The following is a summary of certain significant information appearing elsewhere in this Circular. Certain capitalized terms used in this summary are defined in the Glossary of Terms. This summary is qualified in its entirety by the more detailed information appearing elsewhere in this Circular. Shareholders are urged to read this Circular and the attached schedules in their entirety.

DATE, TIME AND PLACE OF MEETING

The Meeting will be held on August 21, 2020 at 10:00 a.m. (Toronto time) by virtual meeting only, by Zoom conference at coordinates set out in the Notice of Meeting

RECORD DATE

The record date for the determination of Registered Shareholders entitled to notice of and to vote at the Meeting is July 20, 2020.

PURPOSE OF MEETING

At the Meeting, Registered Shareholders will be asked to consider and, if thought advisable, approve, with or without variation, a special resolution approving the Pre-Consolidation Amendment, the text of which is set out in Schedule “A” to this Circular, which if passed, will result in the Company completing the Going Private Transaction in accordance with the terms and conditions set forth in the Support Agreement.

GOING PRIVATE TRANSACTION - THE PRE-CONSOLIDATION AMENDMENT, THE CONSOLIDATION, THE REDEMPTION AND THE POST-REDEMPTION STEPS

The Pre-Consolidation Amendment

Assuming the Transaction Resolution receives the requisite approvals by Shareholders and Minority Shareholders at the Meeting and all other terms and conditions of the Support Agreement are satisfied or waived (if capable of being waived), the Pre-Consolidation Amendment will be effected as soon as practicable following the Meeting.

If adopted, the Pre-Consolidation Amendment will amend the Articles to consolidate all Common Shares of the Company (the “ Consolidation ”) on the basis of 8,000,000 pre-Consolidation Common Shares for one (1) postConsolidation Common Share and to permit the Company to redeem all fractional post-Consolidation Common Shares (the “ Redemption ”) without prior notice, at any time prior to the second anniversary of the Effective Date, at a redemption price of C$0.50 for each pre-Consolidation Common Share (other than Dissenting Common Shares).

A copy of the full text of the Transaction Resolution is set out in Schedule “A” to this Circular.

The Consolidation

The Consolidation will be effected by filing the Pre-Consolidation Amendment with the Director under the CBCA. Assuming the requisite Shareholder approvals are received and other conditions precedent are satisfied or waived under the Support Agreement, the Consolidation will be effected as soon as practicable after the receipt of such approvals. The Company has 31,778,830 pre-Consolidation Common Shares currently outstanding. Upon the Consolidation taking effect, there will be two (2) full post-Consolidation Common Shares outstanding, both to be held by the Majority Shareholder.

The Redemption

Upon the Pre-Consolidation Amendment becoming effective, the Board will redeem all fractional Common Shares after the Consolidation by causing the Company to pay to the Depositary, on behalf of each Minority Shareholder, the Consideration of C$0.50 per pre-Consolidation Common Share (other than Dissenting Common Shares) held by

such Minority Shareholder. Based on the current shareholder list, it is expected there will be only one (1) Remaining Shareholder after the Redemption, being the Majority Shareholder.

Assuming the requisite Shareholder approvals are received and other conditions precedent are satisfied or waived under the Support Agreement, the Redemption will be effected as soon as practicable after the receipt of such approvals and after the Consolidation taking effect.

Dissenting Shareholders

Each Common Share outstanding immediately prior to the Effective Time held by a Shareholder who has properly exercised his, her or its dissent rights (a “ Dissenting Shareholder ”) shall be deemed to have been transferred by the holder thereof to the Company and such Dissenting Shareholder shall be afforded the rights prescribed to him, her or it under the CBCA.

Consideration

Pursuant to the Redemption, each Minority Shareholder (other than Dissenting Shareholders) will be entitled to receive a cash payment of C$0.50 for each pre-Consolidation Common Share held by that Minority Shareholder.

Source of Funds

For purposes of the Redemption, the Consideration to be paid to Minority Shareholders and the amount to be paid to any Dissenting Shareholder will be provided by the Company from available cash on hand and available credit facilities. In addition thereto, under the terms of the Support Agreement the Majority Shareholder has agreed to provide the Consideration or such portion thereof, as may be required by the Company to complete the Redemption. Assuming that all the Common Shares held by the Minority Shareholders are redeemed, the aggregate amount to be paid by the Company to all Minority Shareholders for their pre-Consolidation Common Shares will be C$7,361,343.

Notice of Redemption

Should the Redemption become effective as described in this Circular, the Company shall immediately issue a news release to such effect, and Minority Shareholders will not receive any further notice with respect to the Redemption of their Common Shares.

Letter of Transmittal

In order to receive the Consideration to which they are entitled pursuant to the Redemption, Minority Shareholders will be required to complete and deliver to the Depositary, the Letter of Transmittal accompanying this Circular, together with the certificates representing their Common Shares and all other documents as may be requested by the Depositary. Provided that a Minority Shareholder has delivered to the Depositary the above referenced documentation, duly and properly completed as required, the Depositary will forward to such Minority Shareholder the cheque(s) representing the Consideration to which such Minority Shareholder may be entitled, unless such Minority Shareholder has provided alternative directions in accordance with the instructions set out in the Letter of Transmittal. See “Surrender of Share Certificates for the Consideration”.

Deadline for Redemption

The deadline by which a Minority Shareholder must submit to deliver a Letter of Transmittal to the Depositary will be two (2) years after the Effective Date. After that deadline, the Company will not be required to redeem any fractional post-Consolidation Common Shares, and the entitlement of a holder of such a fractional interest shall lapse with the result that the holder will be deemed to have donated and forfeited to the Company or its successor any amount that would otherwise be due to be paid by the Company in connection with the Redemption.

The Post-Redemption Steps

The Consolidation and the Redemption will, in effect, “privatize” the Company. The Common Shares are currently listed for trading on the TSX. As part of the Going Private Transaction, the Company has applied to have its Common Shares delisted from the TSX after the completion of the Redemption. The Company also intends to apply to the applicable securities regulatory authorities to cease to be a reporting issuer in each province in which it is currently a reporting issuer after the completion of the Redemption. The Going Private Transaction is subject to approval of the TSX.

In the event Shareholder approval is not given to the Transaction Resolution, neither the Consolidation nor the Redemption will be effected and the Going Private Transaction will not be completed. In such a case, any Letter of Transmittal completed by a Registered Shareholder will be of no effect and the Depositary will return all surrendered certificates representing Common Shares to the holders thereof as soon as practicable.

SPECIAL COMMITTEE

On June 2, 2020, the Board established the Special Committee of independent directors comprised of Francis Leong (Chair), John Jack Duffy, Fang Lixin and Liu Manhong, four of four “independent” directors (within the meaning of MI 61-101), of the Company, in response to communication from the management of the Company to the Board setting out the parameters of the proposed Going Private Transaction.

The Company, on recommendation of the Special Committee, retained BDO as its independent financial advisor in connection with the Going Private Transaction. The Special Committee then received a draft BDO Valuation on June 18, 2020.

Based on the Special Committee's review of the BDO Valuation and consideration of other relevant facts and issues, the Special Committee concluded that the Going Private Transaction is in the best interests of the Company and the Consideration to be received by the Minority Shareholders pursuant to the Redemption is fair, from a financial point of view, to the Minority Shareholders and it unanimously recommended that the Board approve the Going Private Transaction and recommend to Shareholders that they vote FOR the Transaction Resolution required to effect the proposed Going Private Transaction. See “Background and Special Committee Matters — Reasons for the Going Private Transaction; Special Committee Recommendation”.

SHAREHOLDER APPROVALS REQUIRED

In order to complete the Consolidation and the Redemption, the Transaction Resolution must be approved by: (a) at least two-thirds of the votes cast by Shareholders present in person or represented by proxy at the Meeting; and (b) for the purposes of MI 61-101, a majority of the votes cast by all Minority Shareholders present in person or represented by proxy at the Meeting.

The full text of the Transaction Resolution is set out in Schedule “A” to this Circular. Since the Going Private Transaction is considered to be a “business combination” (and may also be considered an “issuer bid”) for the purposes of MI 61-101, the Transaction Resolution must be approved by a majority of the votes cast in respect thereof by the Minority Shareholders present in person or represented by proxy at the Meeting. To the knowledge of the management of the Company as at the date of the Circular, for the purposes of minority voting under MI 61-101, a total of 17,056,144 Common Shares held by the Majority Shareholder, its associates, affiliates and joint actors, will be excluded from the minority vote in respect of the Transaction Resolution.

The Majority Shareholder entered into lock up agreements with seven Minority Shareholders holding in aggregate 6,778,785 Common Shares representing 21.33% of all outstanding Common Shares or 46.04% of Common Shares held by all Minority Shareholders under which the Minority Shareholders agreed to vote for the Transaction Resolution at the Meeting.

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

A Minority Shareholder who is resident in Canada and holds its Common Shares as capital property should realize a capital gain (or capital loss) in the amount by which the Consideration received pursuant to the Redemption exceeds (or is less than) the holder's adjusted cost base of the Common Shares.

A summary of the principal Canadian federal income tax considerations in respect of the Redemption is included under “Certain Canadian Federal Income Tax Considerations” and the foregoing is qualified in full by the information in such section. This summary is of a general nature only and it is not exhaustive of all possible Canadian federal income tax considerations applicable to Shareholders who are not the Majority Shareholder.

Notwithstanding this description and in the further summary in the Circular, Shareholders are encouraged to seek independent legal and accounting advice regarding the tax and accounting repercussions of the Redemption.

RIGHT OF DISSENT

The Pre-Consolidation Amendment, the Consolidation and Redemption are being carried out to effect the implementation of the Going Private Transaction. A Registered Shareholder is entitled to exercise dissent rights as provided for in Section 190 of the CBCA in respect of the Pre-Consolidation Amendment.

The dissent procedure provided by Section 190 of the CBCA is summarized in Schedule “C” to this Circular, and the full text of Section 190 of the CBCA is set forth in Schedule “D” to this Circular. Registered Shareholders who wish to exercise dissent rights are referred to these Schedules. A Registered Shareholder may exercise the right of dissent under Section 190 of the CBCA only in respect of the Common Shares which are registered in that Registered Shareholder's name. The execution or exercise of a proxy or voting instruction form does not constitute a written objection for the purposes of exercising dissent rights under Section 190 of the CBCA. A Registered Shareholder wishing to exercise a right of dissent should consider seeking legal advice in advance of the Meeting, as failure to strictly comply with the relevant provisions of Section 190 of the CBCA may result in the loss or unavailability of the right of dissent.

EFFECT OF THE GOING PRIVATE TRANSACTION ON MARKETS AND LISTINGS

The Redemption will, in effect, “privatize” the Company. The Common Shares are currently listed for trading on the TSX. As part of the Going Private Transaction, the Company has applied to have its Common Shares delisted from the TSX after the completion of the Redemption. The Company also intends to apply to the applicable securities regulatory authorities to cease to be a reporting issuer in each province in which it is currently a reporting issuer after the completion of the Redemption. The Going Private Transaction is subject to approval of the TSX.

RECOMMENDATION OF THE BOARD

After the unanimous recommendation by the Special Committee that the Board approve the proposed Going Private Transaction, the Board, with Messrs. Shou Cailiang and Tang Wei as interested directors abstaining from voting, resolved that the Consideration being offered to the Minority Shareholders pursuant to the Redemption is fair and that the proposed Going Private Transaction as a whole is in the best interests of the Company. The Board therefore recommends that all Shareholders vote FOR the Transaction Resolution. The text of the Transaction Resolution is set out in Schedule “A” to this Circular. Unless instructed otherwise, the Management Designees in the accompanying Instrument of Proxy intend to vote FOR the Transaction Resolution in order to give effect to the Going Private Transaction.

BOYUAN CONSTRUCTION GROUP, INC. MANAGEMENT INFORMATION CIRCULAR

This Circular is furnished in connection with the solicitation of proxies by the management of Boyuan Construction Group, Inc. for use at the special meeting (the “Meeting”) of its holders of Common Shares to be held on August 21, 2020, at the time and means and for the purposes set forth in the accompanying notice of the Meeting.

As part of our priority to protect the health and safety of the public and our team members in light of the COVID-19 situation, we will hold a virtual special Shareholder meeting only (particulars noted below). As a shareholder, you have the right to vote your shares on all items that come before the meeting. Your vote is important and we facilitate voting by enabling you to vote by proxy prior to the meeting. We encourage you to do so and have arranged for voting on the Internet, by phone, by fax or by mail. You can also vote by attending the virtual meeting.

FORWARD-LOOKING STATEMENTS

All statements, other than statements of historical fact, contained or incorporated by reference in this Circular, including, but not limited to, any information as to the future financial or operating performance of the Company, constitute “forward-looking information” or “forward-looking statements” within the meaning of applicable securities laws, including the provisions of the Securities Act (Ontario) are based on expectations, estimates and projections as of the date of this Circular. This forward-looking information includes, but is not limited to, statements and information concerning: the Going Private Transaction; the intentions, plans and future actions of Boyuan; the timing for the implementation of the Going Private Transaction and the potential benefits of the Going Private Transaction; the likelihood of the Going Private Transaction being completed; principal steps of the Going Private Transaction; statements made in, and based upon, the BDO Valuation; statements relating to the business and future activities of the Company after the date of this Circular and prior to the Effective Time and after the Effective Time; shareholder and regulatory approval of the Going Private Transaction; approval of the Going Private Transaction by the TSX; and other statements that are not historical facts. To the extent any forward- looking information constitutes future-oriented financial information or financial outlook, as those terms are defined under applicable Canadian securities laws, such statements are being provided to describe the current anticipated effect of the Going Private Transaction, and readers are cautioned that these statements may not be appropriate for any other purpose, including investment decisions.

The words “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “guidance”, “targets”, “models”, “intends”, “anticipates”, or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “should”, “might”, or “will be taken”, “occur” or “be achieved” and similar expressions often, but not always, identify forward-looking statements. Forward-looking statements are necessarily based upon a number of factors and assumptions that, while considered reasonable by Boyuan as of the date of such statements, are inherently subject to significant business, political, economic and competitive uncertainties and contingencies. The factors and assumptions of Boyuan relied on in making the forward-looking statements contained or incorporated by reference in this Circular, which may prove to be incorrect, include, but are not limited to, the various assumptions set forth herein, or as otherwise expressly incorporated herein by reference, including the approval of the Going Private Transaction by shareholders and the receipt of any required TSX, governmental and regulatory approvals and consents.

Known and unknown risk factors could cause actual results to differ materially from those projected in the forwardlooking statements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management's expectations and plans relating to the future. All of the forward-looking statements made in this Circular are qualified by these cautionary statements and those made in our other filings with the securities regulators of Canada including, but not limited to, the cautionary statements made in the “Risk Factors” section of this Circular and in the “Risk Factors” section of the

Company's most recent annual information form, dated September 30, 2019, a copy of which is available on the Company's issuer profile at www.sedar.com. These factors are not intended to represent a complete list of the factors that could affect the Company. Boyuan disclaims any intention or obligation to update or revise any forward-looking statements or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law.

THE COMPANY

The Company was incorporated under the CBCA on May 4, 2007 as “SND Energy Ltd.” On February 20, 2009, the Company changed its name to “Boyuan Construction Inc.”, effected a share consolidation on the basis that every 1258.0342 common shares outstanding consolidated into one common share and created an unlimited number of Class A preferred shares. On February 24, 2009, the Company changed its name to “Boyuan Construction Group, Inc.”

The Company’s Boyuan's registered office is located at Suite 802, 235 Yorkland Blvd., Toronto, Ontario M2J 4Y8. The Company's corporate head office is located at Jin Hui Plaza, No. 500 Matang Road, Jiaxing City, Zhejiang PRC 314000.

In this Circular, references to the “ Company ”, “ we ” and “ our ” refer to Boyuan Construction Group, Inc. All dollar amounts referred to in the Circular are stated in Canadian dollars, unless otherwise indicated.

GENERAL PROXY INFORMATION

SOLICITATION OF PROXIES

This management information circular (the “ Circular ”) is furnished in connection with the solicitation of proxies by the management of Boyuan Construction Group, Inc. (the “ Company ” or “ Boyuan ”) for use at the special Meeting of the holders (the “ Shareholders ”) of common shares (the “ Common Shares ”) of the Corporation to be held via virtual meeting only at 10:00 a.m. (Toronto time) on August 21, 2020, and at any adjournment thereof (the “ Meeting ”), for the purposes set forth in the Notice of Meeting accompanying this Circular.

Solicitation of proxies will be primarily by mail, but may also be undertaken by way of telephone, facsimile or oral communication by the directors, officers and regular employees of the Corporation, at no additional compensation. Costs associated with the solicitation of proxies will be borne by the Corporation.

The virtual meeting can be accessed online at:

https://zoom.us/j/8166872833?pwd=QXBZR2Fia3RiQkNpa29JaVlNall2QT09

Meeting ID: 816 687 2833 Password: 8BbXJx

Or by Phone:

Canada: +1 778 907 2071 or +1 204 272 7920 or +1 438 809 7799 or +1 587 328 1099 or +1 647 374 4685 or +1 647 558 0588
Hong Kong: +852 5808 6088 or +852 5803 3730 or +852 5803 3731

Meeting ID: 816 687 2833 Password: 610782

Find your local number: https://zoom.us/u/acTGFOnn9g

Although it is expected that the solicitation of proxies will be primarily by mail, proxies may also be solicited personally or by telephone, facsimile or other proxy solicitation services. In accordance with National Instrument 54 -101 Communication with Beneficial Owners of Securities of a Reporting Issuer , arrangements have been made

with brokerage houses and other intermediaries, clearing agencies, custodians, nominees and fiduciaries to forward solicitation materials to the beneficial owners of the Common Shares held of record by such persons and the Company may reimburse such persons for reasonable fees and disbursements incurred by them in doing so. The costs thereof will be borne by the Company.

APPOINTMENT AND REVOCATION OF PROXIES

The Management Designees in the enclosed Instrument of Proxy have been selected by the Board and have indicated their willingness to represent as proxy the Shareholder who appoints them. A Shareholder has the right to designate a person (whom need not be a Shareholder) other than the Management Designees to represent him or her at the Meeting. Such right may be exercised by inserting in the space provided for that purpose on the Instrument of Proxy the name of the person to be designated and by deleting there from the names of the Management Designees, or by completing another proper form of proxy and delivering the same to the Transfer Agent. Such shareholder should notify the nominee of the appointment, obtain the nominee's consent to act as proxy and should provide instructions on how the shareholder's shares are to be voted. The nominee should bring personal identification with him to the Meeting. In any case, the Instrument of Proxy should be dated and executed by the Shareholder or an attorney authorized in writing, with proof of such authorization attached (where an attorney executed the proxy form). In addition, a proxy may be revoked by a Shareholder personally attending at the Meeting and voting his shares.

An Instrument of Proxy will not be valid for the Meeting or any adjournment thereof unless it is completed and delivered to the Company's transfer agent, Computershare Trust Company of Canada, Proxy Department, 100 University Avenue, 9th Floor, Toronto, Ontario, M5J 2Y1, at least forty-eight (48) hours, excluding Saturdays, Sundays and holidays, before the Meeting or any adjournment thereof. Late proxies may be accepted or rejected by the Chairman of the Meeting in his discretion, and the Chairman is under no obligation to accept or reject any particular late proxy.

A Shareholder who has given a proxy may revoke it as to any matter upon which a vote has not already been cast pursuant to the authority conferred by the proxy. In addition to revocation in any other manner permitted by law, a proxy may be revoked by depositing an instrument in writing executed by the Shareholder or by his authorized attorney in writing, or, if the Shareholder is a corporation, under its corporate seal by an officer or attorney thereof duly authorized, either at the registered office of the Company or with Computershare Trust Company of Canada, Proxy Department, 100 University Avenue, 9th Floor, Toronto, Ontario, M5J 2Y1, at any time up to and including the last business day preceding the date of the Meeting, or any adjournment thereof at which the proxy is to be used, or by depositing the instrument in writing with the Chairman of such Meeting on the day of the Meeting, or at any adjournment thereof. In addition, a proxy may be revoked by the Shareholder personally attending the Meeting and voting his shares.

ADVICE TO BENEFICIAL SHAREHOLDERS

The information set forth in this section is of significant importance to many Shareholders, as a substantial number of Shareholders do not hold Common Shares in their own name. Shareholders who hold their Common Shares through their brokers, intermediaries, trustees or other persons, or who otherwise do not hold their Common Shares in their own name (referred to in this Circular as “ Beneficial Shareholders ”) should note that only proxies deposited by Shareholders who appear on the records maintained by the Company's Transfer Agent as registered holders of Common Shares will be recognized and acted upon at the Meeting. If Common Shares are listed in an account statement provided to a Beneficial Shareholder by a broker, those Common Shares will, in all likelihood, not be registered in the Shareholder's name. Such Common Shares will more likely be registered under the name of the Shareholder's broker or an agent of that broker. In Canada, the vast majority of such shares are registered under the name of CDS & Co. (the registration name for The Canadian Depositary for Securities, which acts as nominee for many Canadian brokerage firms). Common Shares held by brokers (or their agents or nominees) on behalf of a broker's client can only be voted (for or against resolutions) at the direction of the Beneficial Shareholder. Without specific instructions, brokers and their agents and nominees are prohibited from voting shares for the broker's clients. Therefore, each Beneficial Shareholder should ensure that voting instructions are communicated to the appropriate person well in advance of the Meeting.

Existing regulatory policy requires brokers and other intermediaries to seek voting instructions from Beneficial Shareholders in advance of shareholders' meetings. The various brokers and other intermediaries have their own mailing procedures and provide their own return instructions to clients, which should be carefully followed by Beneficial Shareholders in order to ensure that their Common Shares are voted at the Meeting. The form of proxy supplied to a Beneficial Shareholder by its broker (or the agent of the broker) is substantially similar to the Instrument of Proxy provided directly to Registered Shareholders by the Company. However, its purpose is limited to instructing the Registered Shareholder (i.e., the broker or agent of the broker) how to vote on behalf of the Beneficial Shareholder. The vast majority of brokers now delegate responsibility for obtaining instructions from clients to Broadridge Financial Solutions, Inc. (“ Broadridge ”) in Canada. Broadridge typically prepares a machine-readable voting instruction form, mails those forms to Beneficial Shareholders and asks Beneficial Shareholders to return the forms to Broadridge, or otherwise communicate voting instructions to Broadridge (by way of the Internet or telephone, for example). Broadridge then tabulates the results of all instructions received and provides appropriate instructions respecting the voting of shares to be represented at the Meeting. A Beneficial Shareholder who receives a Broadridge voting instruction form cannot use that form to vote Common Shares directly at the Meeting. The voting instruction forms must be returned to Broadridge (or instructions respecting the voting of Common Shares must otherwise be communicated to Broadridge) well in advance of the Meeting in order to have the Common Shares voted. If you have any questions respecting the voting of Common Shares held through a broker or other intermediary, please contact that broker or other intermediary for assistance.

Although a Beneficial Shareholder may not be recognized directly at the Meeting for the purposes of voting Common Shares registered in the name of his broker, a Beneficial Shareholder may attend the Meeting as proxyholder for the Registered Shareholder and vote the Common Shares in that capacity. Beneficial Shareholders who wish to attend the Meeting and indirectly vote their Common Shares as proxyholder for the Registered Shareholder, should enter their own names in the blank space on the form of proxy provided to them and return the same to their broker (or the broker's agent) in accordance with the instructions provided by such broker.

All references to Shareholders in this Circular and the accompanying Instrument of Proxy and Notice of Meeting are to Registered Shareholders unless specifically stated otherwise.

VOTING OF PROXIES

Each Shareholder may instruct his proxy how to vote his Common Shares by completing the blanks on the Instrument of Proxy. All Common Shares represented at the Meeting by properly executed proxies will be voted or withheld from voting (including the voting on any ballot), and where a choice with respect to any matter to be acted upon has been specified in the Instrument of Proxy, the Common Shares represented by the proxy will be voted in accordance with such specification. In the absence of any such specification as to voting on the Instrument of Proxy, the Management Designees, if named as proxy, will vote in favour of the matters set out therein. In the absence of any specification as to voting on any other form of proxy, the Common Shares represented by such form of proxy will be voted in favour of the matters set out therein.

The enclosed Instrument of Proxy confers discretionary authority upon the Management Designees, or other persons named as proxy, with respect to amendments to or variations of matters identified in the Notice of Meeting and any other matters which may properly come before the Meeting. As of the date hereof, the Company is not aware of any amendments to, variations of or other matters which may come before the Meeting. In the event that other matters come before the Meeting, then the Management Designees intend to vote in accordance with the judgment of management of the Company.

QUORUM

The by-laws of the Company provide that a quorum at any meeting of shareholders shall be one person present holding or representing not less than five (5%) percent of the outstanding shares of the Company entitled to vote at a meeting.

VOTING SHARES AND PRINCIPAL HOLDERS THEREOF

The authorized capital of the Company consists of an unlimited number of common shares (the “ Common Shares ”), an unlimited number of common non-voting shares and an unlimited number of class A preferred shares issuable in series of which the class A preferred shares - series 1 have been created.

As at the date of July 20, 2020 (the “ Record Date ”), 31,778,830 Common Shares were issued and outstanding as fully paid and non-assessable and no first preferred shares were issued or outstanding. No other shares of any other class are authorized or issued or outstanding. The Common Shares are the only shares entitled to be voted at the Meeting and holders of Common Shares are entitled to one vote for each Common Share held.

Holders of Common Shares of record at the close of business on the Record Date are entitled to vote such Common Shares at the Meeting on the basis of one vote for each Common Share held.

To the knowledge of the Board and the executive officers of the Company, as at the date hereof, no person or company beneficially owns, directly or indirectly, or controls or directs, voting securities carrying 10% or more of the voting rights attached to any class of voting securities of the Company, other than as follows:

Name	Type of Ownership	Number of Common Shares Owned or Controlled at the the Date Hereof	Percent of Outstanding Common Shares
Shou Cailiang (1) Zhejiang, China	Indirect ownership through Mainway Management Limited	17,056,144	53.67%

Note:

(1) 15,735,269 Common Shares are owned by Mr. Shou Cailiang and his wife through their interest in Mainway Management Limited. In addition, Mr. Hong Yongxiang, brother of Mrs. Shou, owns 1,320,875 Common Shares through his interest in Mainway Management Limited.

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

Other than (i) for ordinary travel and expense advances where repayment arrangements are in accord with usual commercial practice, (ii) indebtedness that has been fully repaid as of the date of this Circular, and (iii) other than disclosed below, no directors, executive officers or their respective associates or affiliates, or other management of the Company are indebted to the Company as of the date hereof or were indebted to the Company at any time during the financial year ended June 30, 2020, and no indebtedness of such individuals to another entity is the subject of a guarantee, support agreement, letter of credit or other similar arrangement or understanding provided by the Company.

Aggregate Indebtedness

AGGREGATE INDEBTEDNESS AS AT JUNE 30, 2020	AGGREGATE INDEBTEDNESS AS AT JUNE 30, 2020	AGGREGATE INDEBTEDNESS AS AT JUNE 30, 2020
Purpose	To the Company or its Controlled Entities (US$)	To Another Entity (US$)
(a)	(b)	(c)
Share purchases	Nil	Nil
Other	4,297,084	Nil

Indebtedness of Directors and Executive Officers under (1) Securities Purchase and (2) Other Programs

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS UNDER (1) SECURITIES PURCHASE AND (2) OTHER PROGRAMS	INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS UNDER (1) SECURITIES PURCHASE AND (2) OTHER PROGRAMS	INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS UNDER (1) SECURITIES PURCHASE AND (2) OTHER PROGRAMS	INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS UNDER (1) SECURITIES PURCHASE AND (2) OTHER PROGRAMS	INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS UNDER (1) SECURITIES PURCHASE AND (2) OTHER PROGRAMS	INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS UNDER (1) SECURITIES PURCHASE AND (2) OTHER PROGRAMS
		(1) SECURITIES PURCHASE AND (2) OTHER PROGRAMS
Name and Principal Position	Involvement of Corporation or its Controlled Entities	Largest Amount Outstanding During Fiscal year Ended June 30, 2020 (US$)	Amount Outstanding as at June 30, 2020 (US$)	Financially Assisted Securities Purchases During Fiscal Year Ended June 30, 2020 (#)	Security for Indebtedness	Amount Forgiven During Fiscal year Ended June 30, 2020 (US$)
(a)	(b)	(c)	(d)	(e)	(f)	(g)
Securities Purchase Programs
Nil	Nil	Nil	Nil	Nil	Nil	Nil
Other Programs
Mr. Shou Cailiang and his wife Ms. Hong Yong Zhen,	Mr. Shou is President and Chairman of the Company	53,657	52,864	Nil	Nil	Nil
		5,170,463	4,244,220
	Total	5,224,120	4,297,084

The US$52,864 (RMB¥373,669) indebtedness was incurred by Sanya Ziyuan Trading Co., Ltd., a company controlled by a relative of Mr. Shou Cailiang, Chairman, President and CEO of the Company. The loan is unsecured, does not bear interest and has no specific payment term.

The US$4,244,220 indebtedness was incurred by Mr. and Mrs. Shou Cailiang in connection with bank loans (RMB¥15 million or approx. US$2,122,110) and bank notes (RMB¥15 million or approx. US$2,122,110) obtained by Zhejiang Boyuan Construction Co., Ltd. (" Boyuan China "), the operating company controlled by the Company, from local banks. The banks required as part of the collateral for the loans and bank notes granted to Boyuan China that Mr. and Mrs. Shou maintain cash collateral by depositing to an account at the banks in Mr. and Mrs. Shou’s names. The cash deposits were made by Boyuan China to the bank accounts in Mr. and Mrs. Shou’s names and the Company has accounted for the cash deposited as a loan to Mr. and Mrs. Shou. As at June 30, 2020, the balance of the cash collateral was RMB¥30 million (approx. US$4,244,220). The cash deposited in Mr. and Mrs. Shou’s bank accounts acts solely as cash collateral for the bank loan and bank notes to Boyuan China and not for Mr. and Mrs. Shou’s personal use. Boyuan China does not charge any interest to Mr. and Mrs. Shou for the cash collateral nor is there any security provided for the cash collateral.

INTERESTS OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

Other than as set forth herein and below, or as previously disclosed, the Company is not aware of any material interests, direct or indirect, by way of beneficial ownership of securities or otherwise, of any director or executive officer or any shareholder holding more than 10% of the voting rights attached to the Common Shares or any associate or affiliate of any of the foregoing in any transaction in the preceding financial year or any proposed or ongoing transaction of the Company which has or will materially affect the Company.

Mr. Shou Cailiang and Mr. Tang Wei are executive officers and directors of the Company. Mr. Shou is the owner and controlling person of the Majority Shareholder. Mr. Tang is a director of the Majority Shareholder.

MANAGEMENT CONTRACTS

During the financial year ended June 30, 2020, no management functions of the Company were to any substantial degree performed by a person or company other than the directors or executive officers (or private companies controlled by them, either directly or indirectly) of the Company.

INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON

Except as otherwise set out herein and below, no director or executive officer of the Company or any proposed nominee of management of the Company for election as a director of the Company, nor any associate or affiliate of the foregoing persons has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in matters to be acted upon at the Meeting.

PARTICULARS OF MATTERS TO BE ACTED UPON

To the knowledge of the Board, the only matters to be brought before the Meeting are those matters set forth in the accompanying Notice of Meeting.

APPROVAL OF GOING PRIVATE TRANSACTION

Going Private Transaction - The Pre-Consolidation Amendment, the Redemption and the Post-Redemption Steps

The Pre-Consolidation Amendment

At the Meeting, Shareholders will be asked to consider and, if thought advisable, approve, with or without variation, the Transaction Resolution, the text of which is set out in Schedule “A” to this Circular, which if passed, will result in the Company carrying out the Consolidation and the Redemption (and thereby being taken private) in accordance with the terms and conditions set forth in the Support Agreement.

Assuming the Transaction Resolution receives the requisite approvals by the Shareholders and Minority Shareholders at the Meeting, and all other terms and conditions of the Support Agreement are satisfied or waived (if capable of being waived), the Pre-Consolidation Amendment will be effected following such approval by the Company filing the articles of amendment to effect the Pre-Consolidation Amendment.

The Consolidation and the Redemption

It is intended that prior to the Meeting, a meeting of the Board will be convened to pass a resolution to carry out the Redemption which resolution shall specify that the Redemption shall be effected as soon as practicable after, and only in the case where: (i) the requisite Shareholder and Minority Shareholder approvals to the Transaction Resolution are obtained; and (ii) the Company and/or the Majority Shareholder shall have remitted to the Depositary the funds for the Redemption. The Company has 31,778,830 pre-Consolidation Common Shares currently outstanding. Based on the current shareholder list, it is expected that upon the Consolidation taking effect, there will be two (2) full post-Consolidation Common Shares outstanding, both to be held by the Majority Shareholder, and there will be one (1) Remaining Shareholder after the Redemption, being the Majority Shareholder.

Assuming the requisite Shareholder approvals are received, the Pre-Consolidation Amendment, the Consolidation and the Redemption will be effected as soon as practicable after such approvals.

The Consideration

Pursuant to the Redemption, each Minority Shareholder (other than a Dissenting Shareholder) will be entitled to receive a cash payment of C$0.50 for each pre-Consolidation Common Share held by that Minority Shareholder.

Dissenting Shareholders

Source of Funds

For purposes of the Going Private Transaction, the Consideration to be paid to Minority Shareholders and the amount to be paid to any Dissenting Shareholder will be provided by the Company from available cash on hand and/or from available credit facilities. In addition thereto, the Majority Shareholder has agreed to provide the Consideration, or a portion thereof, as may be required by the Company to complete the Redemption. Assuming that all the Common Shares held by the Minority Shareholders are redeemed, the aggregate amount to be paid by the Company to all Minority Shareholders for their pre-Consolidation Common Shares is C$7,361,343, exclusive of related fees and expenses payable by the Company (Depositary, legal and other advisory fees, insurance costs together with printing and mailing costs) which managements estimates to be in the range of C$400,000 to C$500,000).

Notice of Redemption

Should the Redemption be effected in compliance with the terms of the Support Agreement as further described in this Circular, the Company shall immediately issue a news release to such effect, and Minority Shareholders will not receive any further notice with respect to the Redemption of their Common Shares.

Post-Redemption Steps

In the event Shareholder approval is not given to the Transaction Resolution, neither the Consolidation nor the Redemption will become effective. If either the Consolidation or the Redemption is not implemented, the Going Private Transaction will not be completed. In such a case, any Letter of Transmittal completed by a Registered Shareholder will be of no effect and the Depositary will return all surrendered certificates representing Common Shares to the holders thereof as soon as practicable.

Deadline for Redemption

Background and Special Committee Matters

Background

The nature of the Company's business requires a significant amount of working capital to maintain its ongoing operations. The Company's capital has been recently strained due to its reporting issuer status; the consequence of which necessitates the employment of independent accountants, financial consultants, lawyers, and other skilled

personnel which pose a severe drain on the Company's already limited cash flows. Management believes that the significant time and costs associated with meeting such obligations to shareholders is unjustifiable in view of the Company's current financial position.

Accordingly, in December 2018, informal internal discussions began with regard to the possibility of taking the Company private due to a number or reasons, including the significant expense of being listed on the TSX and subject to the reporting issuer obligations, the lack of liquidity of the Common Shares, and the lack of access to capital notwithstanding the Company's listing on the TSX. As discussions continued it was determined that the Majority Shareholder who held approximately 53.67% of the Company's issued and outstanding Common Shares, would consider a Going Private Transaction by the Company. However, the Company did not take steps to further the Going Private Transaction at the time for various reasons, including a lack of agreement on structure of the transaction and on costs and expenses affiliated with the transaction.

In April 2020, management re-ignited the conversation for the Going Private Transaction and began to discuss with legal counsel and financial advisors on advising the Company in the potential transaction, particularly due to the impact of the COVID-19 pandemic and the deteriorating relationship between Canada and China due to the arrest of Huawei CFO, Ms. Meng Wanzhou. Additionally, the Company considered its financial circumstances and that it continued to struggle with many of the same issues articulated in December 2018.

The Appointment of the Special Committee

On June 2, 2020 the Board of Directors determined that it was in the best interests of the Company if it formed an independent special committee to help the Company contemplate the effects of the Going Private Transaction to stakeholders (including minority shareholders). During this meeting, the following Special Committee members were appointed Messrs. Francis Leong, John Jack Duffy and Fang Lixin and Ms. Liu Manhong. Each member was considered to be an “independent” director within the meaning of MI 61-101 and none of the special committee members held any Common Shares of the Company. During this meeting, the following responsibilities of the Committee were also approved and ratified in the mandate:

The responsibilities of the Special Committee are:

(a) to consider, evaluate and make a recommendation to the Board concerning the proposed Going Private Transaction or other strategic alternatives that may be open to the Corporation;
(b) to oversee:
(i) the review of the Going Private Transaction or other strategic opportunities,
(ii) any negotiations with Mr. Shou or potentially interested parties,
(iii) the preparation of any legal agreements or other documentation, and
(iv) the provision of confidential information to third parties under cover of an appropriate confidentiality agreement;
(c) to consider and advise the Board whether, in the opinion of the members of the Special Committee, the proposed Going Private Transaction or other strategic alternative is in the best interests of the Corporation and/or its shareholders;
(d) to issue such press releases or other information as the Special Committee considers appropriate; and
(e) to consider such other matters as the Special Committee considers relevant in connection with the foregoing.

In furtherance of its responsibilities, the Special Committee was authorized and empowered to take such action as it considered appropriate, including engaging such professional advisors and to pursue such other matters as the Special Committee considers appropriate. The Board of Directors also resolved to remunerate the Special Committee members for their services.

Summary of Proceedings of the Special Committee

The Special Committee considered whether the Going Private Transaction was in the best interests of the Company. Included in its discussions were concerns relating to the significant expense of being a reporting issuer, the lack of liquidity of the Common Shares, and the lack of access to capital. The Special Committee also discussed the availability of alternative transactions available to the Company, including the potential to maintain the status quo in light of the present market circumstances, and how the Majority Shareholder had indicated that it was not interested in selling its shares or giving up control of the Company. Accordingly, and since the Majority Shareholder could effectively use its control block to prohibit any alternative transactions (including but not limited to a public auction) from proceeding, the Special Committee determined that it would be in the best interests of the Company to engage in dialogue regarding the proposed Going Private Transaction. In connection with this conclusion, the Special Committee decided that it would retain independent advisors to help guide it throughout the negotiations.

The Special Committee's Retention of Legal and Financial Advisors

Following its appointment, the Special Committee retained its own independent legal counsel, Fogler, Rubinoff LLP. The Special Committee members had several meetings regarding the proposed Going Private Transaction and the reasonable alternatives available to it. Additionally it explored the likelihood that the proposed Consolidation and Going Private Transaction would be considered to be a “business combination” under MI 61-101. The Special Committee concluded that it likely would be, because the interests of the holders of the Common Shares, other than the Majority Shareholder, may be terminated without the holder's consent as a consequence of the Consolidation. As a result of this, and pursuant to MI 61-101 the Special Committee determined that if the proposed Going Private Transaction were to proceed, the Company would be required to engage an independent valuator to prepare a formal valuation if, among other things, an interested party would, as a consequence of the transaction, directly or indirectly, acquire the issuer or the business of the issuer.

Accordingly, between June 3 and June 5, 2020, the Special Committee interviewed several independent accounting firms before recommending the engagement of BDO. BDO is a recognized and respected accounting firm with extensive experience offering advice during transactions for both public and private companies. The Company was required to pay BDO a cash fee for rendering its services, no portion of which was conditional upon the result of the Valuation Report and/or the fairness opinion.

At the request of the Special Committee, BDO prepared and delivered the BDO Valuation, upon which the Special Committee placed particular attention in making their recommendation as set out herein. The Special Committee reviewed the draft valuation report received from BDO and deliberated on its findings. In particular, this valuation report concluded that based upon, and subject to the considerations of BDO and such other factors that BDO considered relevant, a range of C$0.31 to C$0.52 was the fair value for the Company’s Common Shares.

The Special Committee consulted with BDO and independent counsel regarding this valuation report as well as factors including how no other offers had been received, the impact of the current economic, political and market conditions on the Company's business, how the majority of its operations were based in China, the Company's lack of market liquidity and difficulty in raising capital, and the significant costs related to being a reporting issuer, before concluding that the Going Private Transaction was in the best interests of the Company.

The Special Committee's Conclusion Following Deliberations

With the guidance of counsel, the Special Committee carefully considered the following non-exhaustive items: (a) the responsibilities of the Special Committee to the Board; (b) the regulatory requirements applicable to the Going Private Transaction; (c) relevant issues arising from the structure of the Going Private Transaction, including the fact that the Going Private Transaction may be considered to be both a “business combination” and an “issuer bid” under

the provisions of MI 61-101; (d) the BDO Valuation; (e) the merits of the proposed Going Private Transaction and other possible alternatives; and (f) the terms of the Support Agreement. Following its deliberations, the Special Committee unanimously (with no abstentions and with no variation of opinion) determined that the Going Private Transaction is in the best interests of the Company and accordingly negotiations for price were pursued.

The Majority Shareholder made an initial offer of C$0.45 per share to the Special Committee on June 20, 2020, and the Special Committee counter-offered at C$0.52. The Majority Shareholder made a second offer of C$0.50 per share on June 21, 2020, which was accepted by the Special Committee on June 21, 2020. The Special Committee determined that the Consideration to be received by the Minority Shareholders pursuant to the Redemption is fair, from a financial point of view, to Minority Shareholders and resolved to recommend to the Board that it approve the Going Private Transaction and recommend to the Shareholders that they vote in favour of the Transaction Resolution.

Reasons for the Going Private Transaction; Special Committee Recommendation

On June 22, 2020, the Special Committee concluded that the Going Private Transaction is in the best interests of the Company and that the Consideration to be received by the Minority Shareholders pursuant to the Redemption is fair, from a financial point of view, to the Minority Shareholders and it unanimously recommended that the Board approve the Going Private Transaction and recommend to the Shareholders that they vote FOR the Transaction Resolution. In reaching its conclusions with respect to the Going Private Transaction, the Special Committee considered a number of factors, including, but not limited to the receipt of the BDO Valuation, which is reproduced in Schedule “B” this Circular.

The Special Committee considered the BDO Valuation carefully, and paid particular attention to BDO's conclusion that the market value of the Common Shares was between C$0.31 to C$0.52, that the Consideration to be received by the Minority Shareholders pursuant to the Redemption was within this range, and that BDO was of the opinion that the Consideration under the Going Private Transaction is fair, from a financial point of view, to the Shareholders (other than the Majority Shareholder). Based on the BDO Valuation, the Special Committee determined that Consideration is fair, from a financial point of view, to the Minority Shareholders. In addition to the BDO Valuation, the Special Committee considered the following factors:

in light of the low trading volume in the Common Shares, the Company is of the view that, were it not for the Redemption, it would be difficult for Minority Shareholders to dispose of their Common Shares and realize a return on their investment;
the range of values presented in the BDO Valuation;
historically the market for the Common Shares has been illiquid;
the Redemption will provide the Minority Shareholders an opportunity to sell their Common Shares for cash with no brokerage fees or commissions;
the completion of the Redemption, accompanied by the delisting from the TSX and the receipt of an order to cease to be a reporting issuer in each province of Canada, is expected to enable the Company to significantly reduce its annual expenses associated with being listed and holding reporting issuer status;
the Minority Shareholders will realize, in respect of their Common Shares for a premium to the 30 day weighted average trading price for the Common Shares on the TSX; and
the Company has limited access to capital at non-dilutive levels which has significantly impaired the Company's prospects for growth.

In its review of the proposed terms of the Redemption, the Special Committee and the Board also considered a number of elements of the Going Private Transaction that provide protection to the Shareholders:

the Transaction Resolution must be approved by at least two-thirds of the votes cast by Shareholders, voting together as a single class, present in person or represented by proxy at the Meeting;
pursuant to MI 61-101, the Transaction Resolution must also be approved by a majority of the Minority Shareholders; and
the Shareholders will be granted the right to dissent with respect to the Transaction Resolution and receive the fair value of their Common Shares through a court proceeding in which a court could determine that the fair value is more than, equal to, or less than the Consideration from the Redemption.

The foregoing discussion of the information and factors considered by the Special Committee and the Board is not intended to be exhaustive, but includes the material factors that were considered in its decision. In view of the variety of factors considered in connection with its evaluation of the Going Private Transaction, the Special Committee did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its recommendation. In addition, individual members of the Special Committee and the Board may have given differing weights to different factors.

Price Range and Trading Volumes of the Common Shares

The Common Shares are currently listed on the TSX under the symbol “BOY”. The following table sets forth the high and low prices and aggregate volume of sales of the Common Shares traded on the TSX for the past 12 months:

Month	High	(C$)	Low	(C$)	Volume
2020/06	$	0.50	$	0.31	2,758,524
2020/05	$	0.32	$	0.29	143,740
2020/04	$	0.31	$	0.30	39,282
2020/03	$	0.39	$	0.20	2,665,050
2020/02	$	0.40	$	0.32	84,960
2020/01	$	0.37	$	0.31	99,435
2019/12	$	0.44	$	0.35	120,700
2019/11	$	0.48	$	0.42	57,635
2019/10	$	0.48	$	0.34	133,725
2019/09	$	0.34	$	0.29	45,705
2019/08	$	0.35	$	0.31	17,650
2019/07	$	0.35	$	0.27	109,718
2019/06	$	0.40	$	0.33	102,225
2019/05	$	0.43	$	0.39	37,602

Note:

(1) The Company publicly announced the Going Private Transaction on June 23, 2020. The closing price for the Common Shares on the TSX on June 22, 2020 was C$0.36 per share.

Dividend Policy

The Company has not declared or paid any dividends with respect to the Common Shares during the two years prior to the date of this Circular. There is currently no restriction on the ability of the Company to pay dividends.

Previous Distributions of Common Shares

During the five years prior to the date of this Circular, the Company distributed Common Shares as indicated in the table below:

	Number of
Date of			Issuance Price per
	Common Shares	Nature of Distribution		Gross Proceeds
Distribution	Distributed		Common Share
December 5, 2019	5,255,765	Private Placement	C$0.31	C$1,629,287
December 31, 2019	1,100,000	Private placement	C$0.31	C$341,000

Recommendation of the Board

After due consideration of the report of the Special Committee and the unanimous recommendation by the Special Committee, the Board, with Messrs. Shou Cailiang and Tang Wei as interested directors abstaining from voting, resolved that the Going Private Transaction is in the best interests of the Company and the Consideration to be received by the Minority Shareholders pursuant to the Redemption is fair, from a financial point of view to the Minority Shareholders. The Board therefore recommends that all Shareholders vote FOR the Transaction Resolution. The text of the Transaction Resolution is set out in Schedule “A” to this Circular. Unless instructed otherwise, the Management Designees in the accompanying Instrument of Proxy intend to vote FOR the Transaction Resolution in order to give effect to the Going Private Transaction.

Engagement of BDO

Pursuant to an engagement agreement executed June 5, 2020 (the “ Engagement Agreement ”), the Company, on recommendation of the Special Committee, engaged BDO to act as its exclusive independent financial advisor in connection with the Going Private Transaction. BDO advised the Special Committee that it is a financial advisory firm offering a range of advisory services, including the preparation of valuations. Among other things, this engagement contemplated that BDO would provide a formal valuation with respect to the fair market value of the issued and outstanding Common Shares and a fairness opinion on the Redemption Price.

The Special Committee has been advised by BDO that neither itself, nor any of its affiliates, is an insider or associate or affiliate (as those terms or similar terms are defined in the Securities Act (Ontario) or MI 61-101, as applicable) of the Company, the Majority Shareholder or any of their respective associates or affiliates. BDO has not been engaged to provide any financial advisory services, nor has it participated in any financings involving the Company, the Majority Shareholder or any of their respective associates or affiliates. There are no understandings, agreements or commitments between BDO, the Company, the Majority Shareholder or any of their respective associates or affiliates with respect to any future business dealings. BDO may, in the future, in the ordinary course of its business, perform financial advisory or investment banking services for the Company, the Majority Shareholder or any of their respective associates or affiliates.

Having reviewed all such circumstances, the Special Committee concluded that BDO is a qualified valuator and independent within the meaning of MI 61-101 in the preparation of the BDO Valuation.

The terms of the Engagement Agreement provide that BDO be paid a fixed cash fee (plus applicable taxes) for its services as financial advisor for delivery of the BDO Valuation. In addition, BDO is to be reimbursed for its reasonable out-of-pocket expenses, including legal fees and the out-of-pocket expenses of its counsel. The fees and expenses of BDO are not contingent in whole or in part upon the outcome of the Going Private Transaction and BDO has no financial interest in the Company or in any of its affiliates that may be affected by the Going Private Transaction. The Special Committee has determined that that the compensation to be paid to BDO for its services under the Engagement Agreement has not in any way interfered with the independence of BDO.

BDO Valuation

On June 22, 2020, BDO delivered the BDO Valuation to the Special Committee, in which BDO determined, on the basis of its review and the factors and considerations reflected in the BDO Valuation and the assumptions necessary to the formulation of the conclusions reached, it is of the opinion that the en bloc fair market value of the Common Shares of the Company as at June 22, 2020, falls in a range of C$0.31 to C$0.52 on a per Common Share basis, and BDO was of the opinion that the Consideration under the Going Private Transaction is fair, from a financial point of view, to the Shareholders (other than the Majority Shareholder). A copy of the BDO Valuation is attached as Schedule “B” to this Circular. Shareholders should read the BDO Valuation in its entirety. Additional copies of the BDO Valuation are available at the office of the Company’s counsel, Hong Wilkin Business Law Professional Corporation, at 235 Yorkland Blvd, Suite 802, Toronto, Ontario M2J 4Y8, during normal business hours.

Prior Valuations and Offers

To the knowledge of the Company or any director or senior officer of the Company, after reasonable inquiry, no “prior valuations” (as defined in MI 61-101) regarding the Company have been prepared within the two years preceding the date hereof. To the knowledge of the Company or to any director or senior officer of the Company, after reasonable inquiry, no bona fide prior offers relating to outstanding Common Shares has been received by the Company or the Majority Shareholder within the two years preceding the date the Going Private Transaction was publicly announced.

Summary of the Support Agreement

The Support Agreement contains various covenants, representations and warranties and conditions precedent to the obligations, of each of the Company and the Majority Shareholder in respect of the Going Private Transaction. The following summary of the Support Agreement is not exhaustive and is qualified in its entirety by reference to the full text of the Support Agreement, a copy of which is attached hereto as Schedule “E” .

Covenants

Pursuant to the Support Agreement, the Company has covenanted and agreed (among other covenants and agreements contained in the Support Agreement) from the date of the Support Agreement until the earlier of the Completion Date and the termination of the Support Agreement, except as otherwise expressly permitted or specifically provided by the Support Agreement:

(a) not to take any action that would render, or may reasonably be expected to render, any representation or warranty made by it in the Support Agreement untrue in any material respect at any time prior to the Completion Date;
(b) not to adjourn, delay or postpone the Meeting or the Meeting Date without the Majority Shareholder's prior written consent unless (i) required by applicable law or the rules of the TSX; or (ii) required by a court of competent jurisdiction or required by or as a result of any requirements imposed by any securities regulatory authority having jurisdiction over the Company, provided that any adjournment, delay or postponement permitted pursuant to (i) and (ii) above shall be limited to the minimum length of time necessary; and
(c) not to issue any additional Common Shares or any securities which may be exercised for or converted into Shares (other than Common Shares issuable pursuant to the exercise of previously issued convertible securities of the Company).

The Company has also covenanted and agreed pursuant to the Support Agreement to use its commercially reasonable efforts to perform all obligations required to be performed by it under the Support Agreement and to perform all such other acts as may be necessary in order to consummate the transactions contemplated thereby, and without limiting the generality of the foregoing, the Company has agreed to:

(a) prior to the date of mailing of this Circular, appoint the Depositary and enter into the Depositary Agreement;
(b) make all necessary filings and applications under Canadian federal and provincial laws and regulations required to be made on the part of the Company in connection with the Going Private Transaction and the Meeting and take all commercially reasonable action necessary to be in compliance with such laws and regulations;
(c) do all things necessary to implement the Pre-Consolidation Amendment, the Consolidation and the Redemption and cooperate with all reasonable requests of the Majority Shareholder in respect thereof;
(d) do all things necessary to obtain the approval of the Going Private Transaction from the TSX including applying to the TSX to delist the Common Shares from the TSX and obtaining TSX conditional approval prior to the Effective Date;
(e) not less than ten (10) Business Days prior to the Meeting Date, either notify the Majority Shareholder that the Company has sufficient funds set aside for payment of the Redemption Consideration; or make a written request to the Majority Shareholder for delivery of the Consideration or a portion thereof, if required, in each case to ensure the Company has sufficient funds to pay for the Redemption in accordance with the terms contemplated therein;
(f) not less than two (2) Business Days prior to the Meeting Date, convene a meeting of the Board to consider, and if thought fit, pass the Redemption Resolution;
(g) prior to the Effective Date, deliver the Redemption Funds to the Depositary and cause the Depositary to as soon as practicable after the Effective Date: (i) make payment of the Consideration (in accordance with the terms of the Depositary Agreement) to the Minority Shareholders who tender their Shares to the Depositary through the Letter of Transmittal; and (ii) remove all such Minority Shareholders (including relevant Dissenting Shareholders) from the Register of Shareholders; and
(h) as soon as practicable after the Completion Date: (i) satisfy the conditions set out in the TSX conditional approval to complete the delisting of its Common Shares from the TSX in accordance with the Going Private Transaction; and (ii) make application to cease to be a reporting issuer in all the provinces of Canada.

Pursuant to the Support Agreement, the Majority Shareholder covenanted and agreed (among other covenants and agreements contained in the Support Agreement) that from the date of the Support Agreement until the earlier of the Completion Date or termination of the Support Agreement, except as otherwise expressly permitted or specifically provided by the Support Agreement:

(a) not to take or permit any action that would render, or may reasonably be expected to render, any representation or warranty made by each of them in the Support Agreement untrue in any material respect at any time prior to the Completion Date;
(b) to provide the Company with immediate notice of any additional Common Shares that the Majority Shareholder may hereafter become the beneficial owner of or exercise control or direction over; and
(c) use its commercially reasonable efforts not to permit the sale or gifting of any of the Subject Shares.

The Majority Shareholder also covenanted and agreed pursuant to the Support Agreement to use its commercially reasonable efforts to perform all obligations required to be performed by it under the Support Agreement and to

perform all such other acts as may be necessary in order to consummate the transactions contemplated by the Support Agreement, and without limiting the generality of the foregoing, the Majority Shareholder agreed to:

(a) cause all of the Subject Shares to be voted in favour of the Transaction Resolution at the Meeting;
(b) not withdraw any proxies (if any) delivered to the Company, the Transfer Agent of the Depositary in connection with the Meeting;
(c) provide the Company with all relevant information concerning them for inclusion in the Circular to enable to Company to comply with applicable laws; and
(d) subject to receiving a written request of the Company, deliver the Consideration or a portion thereof, to the Company, or if directed by the Company, to the Depositary, not less than two (2) Business Days prior to the Meeting Date.

Representations and Warranties

Pursuant to the Support Agreement the Company has represented and warranted to and with the Majority Shareholder as follows and acknowledged that the Majority Shareholder is relying upon such representations and warranties in connection with the matters contemplated by the Support Agreement:

(a) the Board, upon consultation with its legal and financial advisors and having considered the favourable recommendation of the Special Committee, has, subject to the disclosure of interests and abstentions by all interested directors, unanimously determined that the Consideration offered to the Minority Shareholders pursuant to the Redemption is fair and that the Going Private Transaction as a whole is in the best interests of the Company and its Minority Shareholders, and has, subject to the disclosure of interests and abstentions by all interested directors, unanimously approved the Pre-Consolidation Amendment and the entering into of the Support Agreement, and has resolved to unanimously recommend that the Shareholders vote in favour of the Transaction Resolution;
(b) the Company has sufficient funds, or adequate arrangements are in place to ensure that it will have sufficient funds, to deliver the Redemption Funds to the Depositary not less than two Business Days prior to the meeting date;
(c) the payment of the aggregate Consideration payable in connection with the Redemption is, and on the Effective Date and on the Completion Date shall be, permitted by all applicable laws, including Section 36(2) of the CBCA;
(d) the payment of the aggregate Consideration payable in connection with the Redemption is, and on the Effective Date and on the Completion Date shall be, permitted by all applicable laws;
(e) the Company has, in respect of the Going Private Transaction, filed, or will file prior to the Completion Date, all documents required to be filed under applicable laws and has filed with securities regulators in each such jurisdiction all documents required to be filed under applicable Canadian securities laws (it being understood that no representation or warranty is being given as to the timeliness of any such filing);
(f) the Company has the corporate power and authority to enter into the Support Agreement and to perform its obligations thereunder;
(g) the Company has been duly incorporated, formed and organized and is a validly existing company under the laws of the jurisdiction of its incorporation or formation, as applicable and has the corporate power and authority to own or lease its property and assets and to carry on any business currently conducted by it; and

(h) other than as contemplated herein, no consent, waiver, approval, authorization, order, exemption, registration, license or declaration of or by, or filing with, or notification to any governmental authority which has not been made or obtained, is required to be made or obtained by the Company in connection with the execution, delivery and performance of the Support Agreement or the completion of the Going Private Transaction.

Pursuant to the Support Agreement, the Majority Shareholder has represented and warranted to and with the Company as follows and acknowledged that the Company is relying upon such representations and warranties in connection with the matters contemplated by the Support Agreement:

(a) as of the date thereof, the Subject Shares represent all of the Common Shares beneficially owned, or over which control and direction is exercised, by the Majority Shareholder;
(b) the Majority Shareholder has the sole right to vote, or direct the voting of, the Subject Shares;
(c) no individual, corporation or other legal entity has any agreement to which the Majority Shareholder is a party, or any right or privilege capable of becoming an agreement or option to which the Majority Shareholder is a party, for the purchase, acquisition or transfer of any of the Subject Shares or any interest therein or right thereto;
(d) the Majority Shareholder has the requisite power and authority to enter into the Support Agreement and perform its obligations thereunder;
(e) the execution and delivery of the Support Agreement and each and every agreement or document to be executed and delivered hereunder by the Majority Shareholder and the consummation of transactions contemplated herein will not, as a result of its involvement, violate nor be in conflict with any provision of any material agreement or instrument to which it is a party or is bound or, to the best of its knowledge, information and belief, any judgment, decree, order, statute, rule or regulation applicable to it;
(f) the Support Agreement has been duly executed and delivered by the Majority Shareholder and all documents required hereunder to be executed and delivered by the Majority Shareholder shall have been duly executed and delivered and the Support Agreement does, and such documents will, constitute legal, valid and binding obligations of the Majority Shareholder enforceable in accordance with its terms; and
(g) no consent, waiver, approval, authorization, order, exemption, registration, license or declaration of or by, or filing with, or notification to any governmental authority which has not been made or obtained is required to be made or obtained by any of the Majority Shareholder in connection with the execution, delivery and performance of the Support Agreement or the completion of the Going Private Transaction.

Conditions Precedent

The obligations of the Company to complete the transactions as contemplated by the Support Agreement, are subject to the satisfaction, at or before the applicable time of the following conditions:

(a) the Transaction Resolution shall have been approved by:
(i) not less than two-thirds of the votes cast in respect thereof by Shareholders attending the Meeting in person or represented by proxy; and
(ii) a “majority of the minority” of the votes cast in respect thereof, for the purposes of MI 61-101, by Minority Shareholders attending the Meeting in person or represented by proxy;

(b) the Depositary shall have received the Consideration required to redeem the fractional Common Shares;
(c) each of the acts and undertakings of the Majority Shareholder to be performed pursuant to the terms of the Support Agreement shall have been duly and timely performed in all material respects;
(d) except as affected by the transactions contemplated by the Support Agreement, the representations and warranties of the Majority Shareholder contained in the Support Agreement shall be true in all material respects immediately prior to the Completion Date with the same effect as though such representations and warranties had been made at and as of such date; and
(e) the Company having received all necessary regulatory approvals and/or third party consents to complete the Going Private Transaction, including the approval of TSX.

The conditions above are for the exclusive benefit of the Company and may be asserted by the Company regardless of the circumstances or may be waived by the Company in its sole discretion, in whole or in part, at any time and from time to time without prejudice to any other rights which the Company may have.

The obligations of the Majority Shareholder to complete the transactions as contemplated by the Support Agreement, are subject to the satisfaction, at or before applicable time of the following conditions:

(a) each of the acts and undertakings of the Company to be performed pursuant to the terms of the Support Agreement shall have been duly performed in all material respects; and
(b) except as affected by the transactions contemplated by the Support Agreement, the representations and warranties of the Company contained in the Support Agreement shall be true in all material respects immediately prior to the Completion Date, with the same effect as though such representations and warranties had been made at and as of such date.

The conditions above are for the exclusive benefit of the Majority Shareholder and may be asserted by the Majority Shareholder regardless of the circumstances or may be waived by the Majority Shareholder in its sole discretion, in whole or in part, at any time and from time to time without prejudice to any other rights which the Majority Shareholder may have.

Termination

The Support Agreement may, prior to the Effective Time, be terminated by mutual written agreement of the parties to the Support Agreement without further action on the part of the Shareholders.

The Support Agreement shall terminate automatically if the Transaction Resolution is not approved by the Registered Shareholders at the Meeting in the manner described above.

The Support Agreement may be terminated by either party upon written notice to the other party if a condition precedent to the obligations of the party terminating the Support Agreement have not been satisfied on or before the date required for the performance thereof, provided that the failure to so satisfy is not caused by the fault of the party terminating the Support Agreement.

The Support Agreement may be terminated by the Majority Shareholder if the Completion Date does not occur on or before December 31, 2020, provided that the Majority Shareholder is not in default under the Support Agreement.

Shareholder Approvals Required

for the purposes of MI 61-101, a majority of the votes cast by all Minority Shareholders present in person or represented by proxy at the Meeting.

The full text of the Transaction Resolution is set out in Schedule “A” to this Circular. Since the Going Private Transaction is considered to be a “business combination” and an “issuer bid” for the purposes of MI 61-101, the Transaction Resolution must be approved by a majority of the votes cast in respect thereof by the Minority Shareholders present in person or represented by proxy at the Meeting. To the knowledge of the management of the Company, as at the date of the Circular, for the purposes of minority voting under MI 61-101, a total of 17,056,144 Common Shares held by the Majority Shareholder will be excluded from the minority vote in respect of the Transaction Resolution.

Pursuant to Section 4.2 of MI 61-101, the following table provides the votes attached to the Common Shares that, to the knowledge of the Company after reasonable inquiry, will be excluded in determining whether minority approval for the Pre-Consolidation Amendment is obtained, and includes the identity of the relevant Shareholders and the number of Common Shares held:

Shareholder	Type of Ownership	No. of Votes Attaching to Common Shares	Percentage of Outstanding Common Shares
Mainway Management Limited(1)	Beneficial	17,056,144	53.67%

Note:

(1) Mainway Management Limited is controlled by Mr. Shou Cailiang, a director and the President and CEO of the Company.

To the knowledge of the Company, after reasonable inquiry, other than Mr. Shou Cailiang, none of the directors and officer of the Company, holds any Common Shares. To the knowledge of the Company, after reasonable inquiry, other than Mr. Shou Cailiang and Mr. Tang Wei, none of the directors and officer of the Company is an associate, affiliate or joint actor of the Majority Shareholder.

Surrender of Share Certificates for the Consideration

Letter of Transmittal

Accompanying this Circular is the Letter of Transmittal for use by Minority Shareholders in surrendering their Common Shares to the Depositary in exchange for the Consideration. The Letter of Transmittal contains complete instructions on how Minority Shareholders are to surrender share certificates representing their Common Shares in exchange for the Consideration. Minority Shareholders shall read and follow these instructions. The Letter of Transmittal when properly completed and delivered together with certificates representing the applicable Common Shares, and all other documents as may be requested by the Depositary, will enable Minority Shareholders to obtain the Consideration to which they are entitled pursuant to the Redemption.

Delivery Requirements

The method of delivery of certificates representing Common Shares, the Letter of Transmittal and all other required documents is at the option and risk of the person surrendering them. The Company recommends that such documents be delivered by hand to the Depositary, at its office noted in the Letter of Transmittal, and a receipt

obtained therefor, or if mailed, that registered mail, with return receipt requested, be used, and that proper insurance be obtained.

Minority Shareholders holding Common Shares which are registered in the name of a broker, investment dealer, bank, trust company or other nominee must contact the Registered Shareholders of such Common Shares to arrange for surrender of those Common Shares.

Payment and Delivery of Consideration

As soon as practicable after the Effective Date, assuming due delivery of the certificates representing the Common Shares, the Letter of Transmittal and all other required documentation, the Company will cause the Depositary to forward any cheques representing the Consideration to which a Minority Shareholder may be entitled by first class mail to the address of the Minority Shareholder as shown on the register of shareholders maintained by the Transfer Agent (or such other alternate address as may be specified in the Letter of Transmittal), unless the Minority Shareholder indicates to the Company that it wishes to pick up the cheque representing the aggregate Consideration, in which case the cheque will be available for a limited period of time at the office of the Depositary for pick up by such holder. The mailing or delivery by the Depositary of any cheques shall satisfy and discharge the payment obligations of the Company and the Depositary.

The payments to Minority Shareholders will be denominated in Canadian dollars.

Under no circumstances will interest accrue or be paid on the Consideration payable in respect of any Common Shares deposited in connection with the Redemption.

The Depositary will act as the agent of persons who have deposited Common Shares for the purpose of receiving payment from the Company and transmitting payment from the Company to such persons, and receipt of payment by the Depositary will be deemed to constitute receipt of payment by persons depositing Common Shares.

Prescription Period

Each Minority Shareholder, following the Effective Date, will be removed from the register of shareholders maintained by the Transfer Agent, and until validly surrendered, the certificate(s) for Common Shares held by such former holder will represent only the right to receive the Consideration upon surrender in strict accordance with the instructions set forth in the Letter of Transmittal or, to the extent such Minority Shareholder is a Dissenting Shareholder that has maintained his right of to be paid fair value (as determined by an applicable court) in accordance with Section 190 of the CBCA, the right to be paid fair value in accordance with and subject to Section 190 of the CBCA.

Any certificate which prior to the Effective Date represented issued and outstanding Common Shares of Minority Shareholders which has not been surrendered in strict accordance with the instructions set forth in the Letter of Transmittal, on or prior to the date which is two years after the Effective Date, will cease to represent any right, claim or interest of any nature or kind against or in the Company or the Depositary, and shall be forfeited to the Company.

Lost Certificates

A Minority Shareholder who has lost or misplaced a certificate representing Common Shares held by such Minority Shareholder should contact the Depositary as soon as possible. The Depositary will assist in making arrangements for necessary affidavits (which may include a bonding requirement) to permit surrender of the share certificates in exchange for payment of the Consideration.

Non-Registered Holders

Shareholders holding Common Shares which are registered in the name of a broker, investment dealer, bank, trust company or other nominee must contact their nominee holder to arrange for the surrender of their Common Shares.

Withholding Rights

The Company and the Depositary are entitled to deduct and withhold from any Consideration otherwise payable to a Fractional Shareholder pursuant to the Going Private Transaction any amounts that they or any one of them is required or permitted to deduct and withhold with respect to such payment under the Income Tax Act (Canada), as amended, including the regulations made thereunder (the “ Tax Act ”) or any provision of federal, provincial, state, local or foreign tax law. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of the Going Private Transaction as having been paid to the former holder of the Common Shares in respect of which such deduction and withholding was made, provided that such withheld amounts are actually remitted to the appropriate taxing authority within the time required and in accordance with applicable laws.

Effect of the Consolidation and Redemption on Markets and Listing

The Common Shares are listed for trading on the TSX under the symbol “BOY”. The Consolidation and the Redemption as contemplated under the Going Private Transaction will, in effect, “privatize” the Company. As part of the Going Private Transaction, the Company has applied to have its Common Shares de-listed from the TSX after the completion of the Consolidation and the Redemption. The Going Private Transaction is subject to approval of the TSX. The Company also intends to apply to the applicable securities regulatory authorities to cease to be a reporting issuer in each province in which it is currently a reporting issuer after the completion of the Consolidation and Redemption. If such application is accepted, the Company will no longer be subject to the continuous disclosure requirements and other obligations currently imposed upon it as a reporting issuer under securities legislation.

Right of Dissent

The Pre-Consolidation Amendment and Redemption are to effect the Going Private Transaction. A Registered Shareholder is entitled to exercise dissent rights as provided for in Section 190 of the CBCA in respect of the PreConsolidation Amendment.

In addition to any other rights a Shareholder may have, if the Transaction Resolution is approved and adopted, a Registered Shareholder who complies with the dissent procedure under Section 190 of the CBCA is entitled to be paid the fair value of the Common Shares (as determined by a court) held by such Registered Shareholder in respect of which it dissents, determined as at the close of business on the day before the Transaction Resolution is approved and adopted.

Tax Considerations

The following is a summary of the principal Canadian federal income tax considerations under the Tax Act, as of the date hereof, of the Going Private Transaction generally applicable to a Shareholder who, at all relevant times and for purposes of the Tax Act, holds their Common Shares as capital property and deals at arm's length and is not affiliated with the Company. The Common Shares will generally constitute capital property to a holder thereof unless the holder holds such securities in the course of carrying on a business, or the holder has acquired such securities in a transaction or transactions considered to be an adventure or concern in the nature of trade.

This summary does not apply to a Shareholder (a) that is a “financial institution” as defined in the Tax Act for purposes of the mark-to-market provisions of the Tax Act; (b) that is a “specified financial institution” as defined in the Tax Act; (c) an interest in which would be a “tax shelter investment” for purposes of the Tax Act; (d) that has made a functional currency reporting election for purposes of the Tax Act; (e) that has entered or will enter into a “derivative forward agreement” (as that term is defined in the Tax Act) with respect to the Common Shares; or (f) who acquired Common Shares pursuant to an employee incentive plan. Such Shareholders should consult their own tax advisors.

This summary is based upon the current provisions of the Tax Act, specific proposals to amend the Tax Act which have been publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “ Proposed Amendments ”), and the Company’s understanding of the current administrative policies and assessing practices of the Canada Revenue Agency (the “ CRA ”) published in writing and publicly available as of the date hereof. This summary assumes that the Proposed Amendments will be enacted in the form proposed and does not take into account or anticipate any other changes in law, whether by way of judicial, legislative or governmental decision or action, nor does it take into account other federal or any provincial, territorial or foreign tax legislation or considerations, which may differ from the Canadian federal income tax considerations discussed herein. No assurances can be given that such Proposed Amendments will be enacted as proposed or at all, or that legislative, judicial or administrative changes will not modify or change the statements expressed herein.

This summary is of a general nature only and is not intended to be, nor should it be construed to be, legal or tax advice to any particular Shareholder, and no representations with respect to the income tax consequences to any particular Shareholder are made. Accordingly, Shareholders should consult their own tax advisors for advice with respect to the tax consequences to them of the Going Private Transaction in their particular circumstances, including the application and effect of the income and other tax laws of any country, province, state or local tax authority.

Residents of Canada

The following summary is only applicable to Shareholders who are resident in Canada for purposes of the Tax Act (a “ Resident Shareholder ”).

Certain Resident Shareholders to whom the Common Shares might not constitute capital property may, in certain circumstances, make the irrevocable election under subsection 39(4) of the Tax Act to deem the Common Shares, and every other “ Canadian security ” (as defined in the Tax Act), held by such Resident Shareholder in the taxation year of the election and all subsequent taxation years, to be capital property. Resident Shareholders should consult their own tax advisors regarding this election.

Taxation of Dividends on Receipt of Consideration

A Resident Shareholder who receives a cash payment from the Company as consideration for the cancellation of a Fractional Share resulting from the Going Private Transaction will be deemed to have received a taxable dividend (subject to the potential application of subsection 55(2) of the Tax Act to Shareholders that are corporations, as discussed below) equal to the amount, if any, by which such payment exceeds the paid-up capital for purposes of the Tax Act attributable to the Fractional Share for which such Resident Shareholder receives such payment. The Company estimates the amount of the deemed dividend per pre-Consolidation Common Share to be C$0.13.

In the case of a Resident Shareholder who is an individual, any deemed dividend, as described above, will be included in computing the Resident Shareholder's income and will be subject to the gross-up and dividend tax credit rules normally applicable to taxable dividends received from a taxable Canadian corporation.

Dividends deemed to be received in respect of a Common Share by a Resident Shareholder that is a corporation will be included in computing its income and will generally be deductible in computing taxable income. In certain circumstances, subsection 55(2) of the Tax Act may treat a taxable dividend received by a Resident Shareholder that is a corporation as proceeds of a disposition or a capital gain. Resident Shareholders should consult their own advisors regarding the potential application of subsection 55(2) of the Tax Act to them in their particular circumstances.

A Resident Shareholder that is a “ private corporation ” (as defined in the Tax Act), or any other corporation controlled, whether because of a beneficial interest in one or more trusts or otherwise, by or for the benefit of an individual (other than a trust) or related group of individuals (other than trusts), will generally be liable to pay a refundable tax under Part IV of the Tax Act on dividends deemed to be received in respect of a Common Share to the extent such dividends are deductible in computing the Resident Shareholder's taxable income for the taxation year.

A Resident Shareholder that is throughout the taxation year a “ Canadian-controlled private corporation ” (as defined in the Tax Act) will be liable to pay tax, a portion of which may be refundable, on its “aggregate investment income” for the year, including dividends deemed to be received in respect of the Common Shares, but not dividends that are deductible in computing taxable income.

Taxation of Capital Gains and Losses

In addition to any deemed dividend described above, a Resident Shareholder who receives a cash payment from the Company under the Going Private Transaction as consideration for the cancellation of a Fractional Share will be considered to have disposed of such Fractional Share and may realize a capital gain or capital loss from such disposition. For the purpose of calculating the Resident Shareholder's capital gain or capital loss with respect to this disposition, the proceeds of disposition will be equal to the amount by which the cash payment received from the Company as consideration for the cancellation of such Fractional Share exceeds the amount of any resulting deemed dividend, as described above.

A Resident Shareholder will be required to include in computing income for the year of the disposition one-half of the amount of any capital gain (a “ taxable capital gain ”) resulting from such disposition of a Fractional Share, and will be required to deduct one-half of the amount of any capital loss (an “ allowable capital loss ”) resulting from such disposition of a Fractional Share against taxable capital gains realized by the Resident Shareholder in the year of disposition. Allowable capital losses in excess of taxable capital gains may be carried back and deducted in any of the three preceding years or carried forward and deducted in any following year against taxable capital gains realized in such years to the extent and under the circumstances described in the Tax Act.

A capital loss realized on the disposition of a Fractional Share by a Resident Shareholder that is a corporation may in certain circumstances be reduced by the amount of dividends that have been previously received or deemed to have been received by the Resident Shareholder on such share or on Common Shares substituted for such share to the extent and in the circumstances described in the Tax Act. Similar rules may apply where a Resident Shareholder that is a corporation is a member of a partnership or a beneficiary of a trust that owns Fractional Shares directly or indirectly through a partnership or trust.

A Resident Shareholder that is throughout the year a “Canadian-controlled private corporation” (as defined in the Tax Act) is liable to pay tax, a portion of which may be refundable, on certain investment income, including taxable capital gains.

Alternative Minimum Tax

Capital gains realized and taxable dividends deemed to be received by a Resident Shareholder that is an individual (including certain trusts) may affect the Resident Shareholder's liability to pay alternative minimum tax under the Tax Act. Resident Shareholders should consult their own tax advisors with respect to the application of alternative minimum tax.

Non-Residents of Canada

The following section applies to Shareholders who, at all relevant times, for the purposes of the Tax Act, (i) are not, and are not deemed to be, resident in Canada; and (ii) do not, and are not deemed to, use or hold the Common Shares in carrying on a business in Canada (a “ Non-Resident Shareholder ”). Special rules, which are not discussed in this summary, may apply to a Non-Resident Shareholder that is an insurer carrying on business in Canada and elsewhere. Such Non-Resident Shareholders should consult their own tax advisors.

Taxation of Dividends on Receipt of Consideration

A Non-Resident Shareholder who receives a cash payment from the Company under the Going Private Transaction as consideration for the cancellation of a Fractional Share will be deemed to have received a taxable dividend equal to the amount, if any, by which such payment exceeds the paid-up capital for purposes of the Tax Act attributable to the Fractional Share for which such Non-Resident Shareholder receives such payment. The Company estimates the amount of the deemed dividend per pre-Consolidation Common Share to be C$0.13.

Withholding tax under the Tax Act at the rate of 25% will apply to the gross amount of any such deemed dividend, subject to reduction under the provisions of an applicable income tax treaty. For example, in the case of a NonResident Shareholder who is a resident of the United States and fully entitled to benefits under the Canada-United States Tax Convention (1980), as amended, the rate of withholding tax on such dividends beneficially owned by such Non-Resident Shareholder will generally be reduced to 15%.

Taxation of Capital Gains and Losses

In addition to any deemed dividend described above, a Non-Resident Shareholder who receives a cash payment from the Company under the Going Private Transaction as consideration for the cancellation of a Fractional Share will be considered to have disposed of such Fractional Share and may realize a capital gain or capital loss from such disposition. For the purpose of calculating the Non-Resident Shareholder's capital gain or capital loss with respect to this disposition, the proceeds of disposition will be equal to the amount by which the cash payment received from the Company as consideration for the cancellation of such Fractional Share exceeds the amount of any resulting deemed dividend, as described above.

A Non-Resident Shareholder will not be subject to tax under the Tax Act on any capital gain realized on the payment received by such Non-Resident Shareholder in respect of such Non-Resident Shareholder's Fractional Share unless the Fractional Share constitutes “taxable Canadian property”, as defined in the Tax Act, to the NonResident Shareholder for purposes of the Tax Act and the gain is not exempt from tax pursuant to the terms of an applicable tax treaty or convention.

Provided the Common Shares are listed on a “ designated stock exchange ” (as defined in the Tax Act, which currently includes the TSX) at the time of disposition, a Fractional Share generally will not constitute taxable Canadian property of a Non-Resident Shareholder at the time of disposition unless at any time during the 60-month period immediately preceding the disposition: (a) one or any combination of (i) the Non-Resident Shareholder, (ii) persons with whom the Non-Resident Shareholder did not deal at arm's length, or (iii) partnerships in which the Non-Resident Shareholder or a person with whom the Non-Resident Shareholder did not deal at arm's length held a membership interest directly or indirectly through one or more partnerships, owned 25% or more of the issued shares of any class or series of the capital stock of the Company; and (b) more than 50% of the fair market value of the Common Shares was derived directly or indirectly from one or any combination of real or immovable property situated in Canada, Canadian resource properties (as defined in the Tax Act), timber resource properties (as defined in the Tax Act) or an option in respect of, an interest in, or for civil law a right in, any such property, whether or not such property exists. The Common Shares may also be deemed to be taxable Canadian property of a Non- Resident Shareholder in certain other circumstances.

Non-Resident Shareholders should consult their own tax advisors as to whether any Fractional Share to which they are entitled under the Going Private Transaction constitutes taxable Canadian property.

If a Fractional Share constitutes taxable Canadian property to a Non-Resident Shareholder and the gain is not exempt from tax pursuant to the terms of an applicable tax treaty or convention, the tax consequences under the Tax Act to such Non-Resident Shareholder in respect of the payment received as consideration for the cancellation of such Non- Resident Shareholder's Fractional Share will be similar to those described above under “ Residents of Canada — Taxation of Capital Gains and Losses ”.

Dissenting Shareholders

Dissenting Shareholders who receive a payment from the Company on the acquisition of their Common Shares pursuant to the Dissent Rights will generally be subject to the same tax treatment as described above for Resident Shareholders and Non-Resident Shareholders, as the case may be. Dissenting Shareholders should discuss the particular tax consequences of the Going Private Transaction to them in their own particular circumstances with their own tax advisors.

Ownership of Securities of the Company

MI 61-101 requires, in addition to the various other disclosure set forth in this Circular, that the Company to provide the following disclosure:

(a) Number of Votes Excluded – In the event that the votes of Majority Shareholder are excluded from voting with respect to the Consolidation, 17,056,144 votes, out of a total number of 31,778,830 possible votes, would be excluded from voting on this item of business.

(b) Identity of Persons whose Votes may be Excluded – The following chart sets forth the persons who would be considered “interested parties” for purposes of MI 61-101, together with the number of votes of each that may be excluded from voting on this item of business.

m voting on this item of business.
Related Party	Number of Votes Excluded
Shou Cailiang (1)	17,056,144
President, CEO and Chairman
Tang Wei	Nil
Director, Vice President and Secretary

Note:

(1) 15,735,269 Common Shares are owned by Mr. Shou Cailiang and his wife through their interest in Mainway Management Limited, the Majority Shareholder. In addition, Mr. Hong Yongxiang, brother of Mrs. Shou, owns 1,320,875 Common Shares through his interest in Mainway Management Limited, the Majority Shareholder.

Mr. Shou Cailiang, through the Majority Shareholder, currently owns in excess of 10% of the issued and outstanding Common Shares and each is therefore considered a “related party” of the Company as defined in MI 61-101.

Mr. Tang Wei, a director, Vice President and Secretary of the Company, is also a “related party” party of the Company by virtue of being a director of the Majority Shareholder. Each of Mr. Shou, the Majority Shareholder and Mr. Tang are additionally “interested parties” to the Consolidation as they would, as a consequence of the Consolidation, indirectly acquire the Company.

Mr. Shou, through the Majority Shareholder, is currently a control person of the Company by virtue of the fact that he holds more than 20% of the issued and outstanding Common Shares of the Company. Currently Mr. Shou through the Majority Shareholder holds 53.67% of the issued and outstanding Common Shares of the Company.

The following table sets forth the number of Common Shares, and the percentage ownership, beneficially owned or controlled by all of the Company's directors and officers and, upon reasonable inquiry, any of the Company's associates, affiliates and insiders, including any associates or affiliates of such insiders.

		% Ownership of Issued and
Individual or Entity	Common Shares Held	Outstanding Common Shares
Shou Cailiang(1) President, CEO and Chairman	17,056,144	53.67%

Individual or Entity

% Ownership of Issued and Common Shares Held Outstanding Common Shares

Francis Leong	Nil	Nil
Lead Director
John Jack Duffy	Nil	Nil
Director
Fang Lixin	Nil	Nil
Director
Liu Manhong	Nil	Nil
Director
Ren Shu	Nil	Nil
Director
Tang Wei	Nil	Nil
Director, Vice President and Secretary
Paul Law	Nil	Nil
CFO

Note:

(1) 15,735,269 Common Shares are owned by Mr. Shou Cailiang and his wife through their interest in Mainway Management Limited, the Majority Shareholder. In addition, Mr. Hong Yongxiang, brother of Mrs. Shou, owns 1,320,875 Common Shares through his interest in Mainway Management Limited, the Majority Shareholder.

The Company's most recently available interim financial statements are not included with this Circular; however, any Shareholder may request the Company's interim financial statements, as the same may be available, and upon receipt of such request, the Company shall send such statements to the Shareholder free of charge.

REGISTRAR, TRANSFER AGENT AND DEPOSITARY

The registrar, transfer agent for the Common Shares is Computershare Investor Services Inc. at its principal office in Calgary, Alberta. The Depositary (in respect of the Going Private Transaction) for the Common Shares is Computershare Investor Services Inc. at its principal office in Toronto, Ontario.

RISK FACTORS

Completion of the Going Private Transaction is subject to certain risks, including, but not limited to, the following:

If the Going Private Transaction is not completed, the future business and operations could be harmed.

If the Going Private Transaction is not completed, the Company may be subject to a number of material risks, including the fact that the Company may have foregone other opportunities which would have otherwise been available had the Support Agreement not been executed. Furthermore, the Company may be unable to obtain additional sources of financing or conclude another sale, merger or arrangement on as favourable terms, in a timely manner, or at all.

The completion of the Going Private Transaction is subject to the satisfaction of conditions.

Completion of the Going Private Transaction is subject to the receipt of all necessary regulatory and Shareholder approvals (including the approval of Minority Shareholders). The failure to obtain any such approvals will prevent

the Company from completing the Going Private Transaction and may have a material adverse effect on the business and affairs of the Company and the trading price of the Common Shares of the Company.

Some of the conditions to the Going Private Transaction may be waived by the Company without re-soliciting shareholder approval.

Some of the conditions set forth in the Support Agreement may be waived by the Company. If those conditions are waived, the Company will evaluate whether an amendment to the Circular and a re-solicitation of proxies is warranted. In the event the Board determines that re-solicitation of proxies is not warranted, the Company will have the discretion to complete the Going Private Transaction without seeking further shareholder approval.

Members of management and the Board of the Company have interests in the Going Private Transaction that may present them with actual or potential conflicts of interest in connection with the Going Private Transaction.

In considering whether to approve the Going Private Transaction, Shareholders should recognize that some of the members of management and the Board may have interests in the Going Private Transaction that differ from, or are in addition to, their interests as Shareholders.

Other risks relating to the affairs, business, operations and future prospects of the Company are set forth and described in the continuous disclosure documents of the Company on the SEDAR website at www.sedar.com.

OTHER BUSINESS

While there is no other business other than that business mentioned in the Notice of Meeting to be presented for action by the shareholders at the Meeting, it is intended that the proxies hereby solicited will be exercised upon any other matters and proposals that may properly come before the Meeting or any adjournment or adjournments thereof, in accordance with the discretion of the persons authorized to act thereunder.

GENERAL

Unless otherwise directed, it is management's intention to vote proxies in favour of the resolutions set forth herein. All special resolutions to be brought before the Meeting require, for the passing of the same, a two-thirds majority of the votes cast at the Meeting by the holders of Common Shares. All ordinary resolutions require, for the passing of the same, a simple majority of the votes cast at the Meeting by the holders of Common Shares. All approvals by disinterested shareholders require the approval of the shareholders not affected by, or interested in, the matter to be approved.

ADDITIONAL INFORMATION

Additional information relating to the Company is available on SEDAR at www.sedar.com. Financial information of the Company's most recently completed financial year is provided, or will be provided, in the Company's comparative financial statements and management's discussion and analysis available on SEDAR. A shareholder may contact the Company at:

Boyuan Construction Group, Inc. Jin Hui Plaza, No. 500 Matang Road Jiaxing City, Zhejiang P.R.C. 314000 Attention: Paul Law, CFO Email: [email protected] Phone: (852) 9329-5088

to obtain a copy of the Company's most recent financial statements and management's discussion and analysis.

BOARD APPROVAL

The contents and the sending of this Circular have been approved by the Board of Directors of the Company.

CONSENT

To: The Board of Directors of Boyuan Construction Group, Inc. (the “ Company ”)

We refer to the valuation and fairness opinion dated June 22, 2020 of our firm as set forth in Schedule “B” (the “ BDO Valuation ”), which we prepared for the Special Committee of the Company and the Company in connection with share consolidation and subsequent redemption (the “ Going Private Transaction ”) under the Canada Business Corporations Act . We refer also to the management information circular of the Company dated July 20, 2020 (the “ Circular ”) relating to the special meeting of shareholders to approve the Going Private Transaction.

We hereby consent to the filing of the BDO Valuation with the applicable securities regulatory authorities, the reference to the BDO Valuation in the Circular, the inclusion of a summary of the BDO Valuation in the Circular and the inclusion of the full text of the BDO Valuation in the Circular.

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(signed) “ “ Per : BDO CANADA LLP

July 20, 2020

SCHEDULE “A” TRANSACTION RESOLUTION

BE IT RESOLVED AS A SPECIAL RESOLUTION THAT the Company is hereby authorized and directed to amend its articles as follows:

(a) The articles of the Company are amended to change each issued and outstanding eight million (8,000,000) common shares of the Company into one (1) issued and outstanding common share of the Company (the “ Consolidation ”), effective on the date (the “ Consolidation Date ”) on which the articles of amendment is filed with the Director under the Canada Business Corporations Act .
(b) If the Consolidation would otherwise result in the issuance of a fractional share, no fractional share will be issued but rather the shareholder holding less than one (1) whole common share following the Consolidation shall be entitled to receive from the Company a redemption proceeds of C$0.50 per each pre-Consolidation common share and all such fractional shares shall be redeemed by the Company and cancelled (the “ Redemption ”).
(c) The Redemption in paragraph (b) above will be deemed effective at the time and on the date the Directors may determine (the “ Redemption Date ”) provided that such Redemption Date shall not be earlier than the date the relevant resolution of the board of directors is passed.
(d) As and from the Consolidation Date on which the Consolidation of any common shares of the Company is effected, each common shareholder holding less than one whole post-Consolidation common share shall cease to be entitled to any rights in respect of such common shares, including any right to participate in the profits of the Company, other than his, her or its right to receive redemption proceeds from the Company in the Redemption (or his, her or its right as a dissenting shareholder under and subject to Section 190 of the Canada Business Corporations Act , to receive fair value for his, her or its redeemed common shares) and accordingly his, her or its name shall be removed as a shareholder from the records of the Company with respect to the fractional postConsolidation common shares so redeemed on and from the Consolidation Date.
(e) Subject to the Directors' discretion to determine the terms and manner of Redemption, Redemption proceeds shall be paid without interest as soon as reasonably practicable following the Consolidation Date.
(f) If a common shareholder who is entitled to receive Redemption proceeds pursuant to subparagraph (b) hereof fails to satisfy any relevant requirements (including without limitation, providing evidence of ownership and completed letters of transmittal) of the board of directors, his entitlement shall lapse on the second anniversary of the Consolidation Date. Upon a shareholder's entitlement having lapsed in accordance with this paragraph (d), such shareholder will be deemed to have donated and forfeited to the Company or its successor any such Redemption proceeds, net of any applicable withholding or other taxes, held in trust for such shareholder and any certificate representing the common shares formerly held by such shareholder will cease to represent a claim of any nature whatsoever and will be deemed to have been surrendered to the Company and cancelled.
(g) Any officer or director of the Company is authorized and directed on behalf of the Company to file articles of amendment pursuant to the Canada Business Corporations Act and to execute all documents and to take any action which, in the opinion of that person, is necessary or desirable to give effect to this special resolution.
(h) Notwithstanding the foregoing, the directors are hereby authorized in their sole direction to revoke this special resolution before it is acted upon without further approval of the shareholders of the Company.

SCHEDULE “B” BDO VALUATION REPORT

Tel: 416 865 0200 BDO Canada LLP Fax: 416 865 0887 222 Bay Street, Suite 2200 www.bdo.ca Toronto, ON M5K 1H1

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June 22, 2020

The Board of Directors Boyuan Construction Group, Inc. Jing Hui Plaza, No. 500 Matang Road, Changshui Street, Economic Development Zone, Jiaxing City, Zhejiang Province People's Republic of China

Attention : Special Committee of the Board of Directors:

INTRODUCTION AND PURPOSE

BDO Canada LLP ("BDO") understands that Mainway Management Limited (“Majority Shareholder”), a company controlled by Mr. Shou Cailiang, President, Chief Executive Officer and a director of Boyuan Construction Group, Inc. (“Boyuan” or “Company”), has proposed a going private transaction (“Proposed Transaction”), pursuant to the terms and conditions of an insider support agreement dated June 23, 2020 (“Support Agreement”), entered into between the Company and the Majority Shareholder, who controls 17,056,144 of the common shares (“Common Shares”) in the capital of the Company or approximately 53.67% of the total issued and outstanding Common Shares held by all holders (“Shareholders”) of the Common Shares.

The Support Agreement provides that the Proposed Transaction is to be carried out by way of the consolidation of all Common Shares (“Consolidation”) on the basis of 8,000,000 pre-Consolidation Common Shares for one (1) postConsolidation Common Share. All fractional Common Shares after the Consolidation will be redeemed by the Company at a price of C$0.50 ("Cash Consideration") per each pre-Consolidation Common Share ("Redemption"). As a result of the Consolidation and the Redemption, the only remaining Shareholder of the Company would be the Majority Shareholder, and all other parties who are currently Shareholders of the Common Shares would be paid C$0.50 share for each of their pre-Consolidation Common Shares. The Company will then proceed to apply to delist its Common Shares from the Toronto Stock Exchange (“TSX”) and apply to cease to be a reporting issuer in those jurisdictions in which it currently holds such status.

The above description is summary in nature. BDO understands that additional details regarding the Proposed Transaction will be provided in the information circular (“Circular”) to be filed in accordance with the applicable Canadian securities legislation and mailed to the Shareholders.

BDO understands that a special committee of independent directors (“Special Committee”) of the Board of Directors (“Board”) of the Company, who are independent within the meaning of Ontario Securities Commission (“OSC”) Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”), has been formed to review and consider the Proposed Transaction and to supervise the preparation of a formal Valuation & Fairness Opinion report to the Board of Directors of the Company.

BDO has been retained to prepare and deliver to the Special Committee a formal valuation (“Valuation”) of the Company and an opinion (“Fairness Opinion”, and together with the Valuation, “Valuation & Fairness Opinion”) as to whether the Cash Consideration to be paid pursuant to the Proposed Transaction is fair from a financial point of view to the Shareholders (other than the Majority Shareholder) (“Minority Shareholders”).

BDO has been advised by counsel to the Special Committee that the Proposed Transaction constitutes a "business combination" and “related party transaction”, as defined in MI 61-101. In connection with the Proposed Transaction, BDO has been requested by the Special Committee to prepare the Valuation & Fairness Opinion in accordance with the standards set out in MI 61-101 and the practice standards of the Canadian Institute of Chartered Business Valuators (“CBV Institute”), as at June 22, 2020 (“Valuation Date”).

The Valuation & Fairness Opinion are to be included as part of the details regarding the Proposed Transaction that will be provided in the Circular.

All values contained herein, unless otherwise indicated, are expressed in Canadian dollars.

BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

ENGAGEMENT OF BDO CANADA LLP

The Special Committee initially contacted BDO regarding a potential assignment in connection with the Proposed Transaction on June 3, 2020. BDO was formally engaged by the Company on recommendation of the Special Committee pursuant to an agreement dated as of June 5, 2020 (“Engagement Agreement”).

Under the terms of the Engagement Agreement, BDO will receive a fixed fee of $100,000, including a $75,000 retainer upon signing of the Engagement Agreement, plus 6% for internal charges for rendering the Valuation & Fairness Opinion. In addition, BDO will be reimbursed for its reasonable out-of-pocket expenses incurred in respect of carrying out its obligations under the Engagement Agreement, and BDO will be indemnified against certain liabilities. The fee payable to BDO under the Engagement Agreement is not contingent upon the conclusions reached by BDO in the Valuation & Fairness Opinion, or upon the successful completion of the Proposed Transaction. The Company will pay for the Valuation & Fairness Opinion.

CREDENTIALS OF BDO CANADA LLP

The firms of the BDO global network provide industry-focused assurance, tax, and specialist advisory services to enhance value for clients and their stakeholders. More than 80,000 people in 167 countries across our network share their expertise and thought leadership to develop practical solutions for clients. In Canada, BDO and its related entities have more than 4,000 partners and staff in over 125 offices across the country. The firm’s specialist advisory capabilities include significant experience advising on mergers & acquisitions and valuation matters for both public and privately held businesses.

BDO’s specialist advisory capabilities include significant experience advising on mergers & acquisitions and valuation matters for both public and privately held businesses. BDO’s financial advisory services group includes finance professionals, many of whom have earned professional designations, such as Chartered Business Valuator (CBV), Chartered Financial Analyst (CFA), Chartered Professional Accountant (CPA), Chartered Accountant (CA), Certified Public Accountant (CPA) and Accredited Senior Appraiser (ASA).

BDO’s Valuation & Fairness Opinion expressed herein represent the opinion of BDO, and the form and content thereof have been approved by a group of BDO partners, each of whom is a member of the Chartered Professional Accountants of Canada and the CBV Institute, and have experience in mergers, acquisitions, divestitures, valuations, fairness opinions, and related matters.

INDEPENDENCE OF BDO

BDO does not have any present or contemplated interest in the business, assets, liabilities, or ownership interests being valued. The fees quoted for the Valuation & Fairness Opinion are not contingent upon the BDO’s conclusion, findings, or any other event.

BDO is independent of Boyuan and the Majority Shareholder, as determined in accordance with applicable Canadian securities laws.

Prior to accepting the Engagement Agreement and performing the Valuation & Fairness Opinion hereunder, an internal search of BDO records was performed to identify any potential client conflicts based on the names of the parties that the Company provided, which are listed below:

Boyuan Construction Group, Inc.;
Mainway Management Limited;
Shou Cai Liang;
Zhejiang Jianyou Trading Co., Ltd.;
Zhejiang Boyuan Trading Co., Limited;
Zhejiang Boyuan Construction Co., Ltd.;
Hainan Boxiang Construction Co., Ltd.;
� Zhejiang Jianyou Co., Ltd.;
Zhejiang Boyuan;
Hong Kong Wealthy Holdings Limited;
Hong Yongzhen; and
Hong Yongxiang.
Jiaxing Ziyuan Labour Services Co., Ltd.;

Based on our conflicts search, we are not aware of any conflicts that would affect our ability to act impartially.

Page 2 of 26

The principal preparer and other staff involved in the preparation of the Valuation & Fairness Opinion are all independent of Boyuan and the Majority Shareholder. Neither BDO nor any of its affiliates is an “insider”, “associate” or “affiliate” of Boyuan, the Majority Shareholder or any of their affiliates.

BDO and its affiliates are not the auditor of Boyuan or the Majority Shareholder. BDO has no present or contemplated interest in Boyuan or the Majority Shareholder that could impair its independence with regard to the Valuation or Fairness Opinion.

BDO and its affiliates have not previously provided, but in the future may provide, in the ordinary course of their business, financial advisory, tax or other professional services to Boyuan, the Majority Shareholder or any of their respective associates or affiliates. While not currently being contemplated, we believe that such services will not impair our objectivity in the performance of the Valuation or Fairness Opinion and we do not believe that our compensation structure affects our ability to act independently and impartially in this matter. We are not aware of any conflict that would affect our ability to act impartially.

BDO did not act as a financial advisor to Boyuan, the Majority Shareholder or any of their respective associates or affiliates in connection with any aspect of the Proposed Transaction other than the preparation of this Valuation & Fairness Opinion and BDO did not participate in the negotiation of the Support Agreement.

BDO confirmed to the Special Committee that it is of the view that we are independent within the meaning of MI 61101 of Boyuan and the Majority Shareholder and any “interested party” (as defined in MI 61-101) in the Proposed Transaction and that it has the appropriate qualifications to prepare the Valuation & Fairness Opinion.

DEFINITIONS

For the purpose of the Valuation & Fairness Opinion, fair market value (“FMV”), as defined by MI 61-101, is the monetary consideration that, in an open and unrestricted market, a prudent and informed buyer would pay to a prudent and informed seller, each acting at arm’s length with the other and under no compulsion to act. In accordance with MI 61-101, BDO has made no downward adjustment to the FMV of the Common Shares to reflect the liquidity of the Common Shares or the effect of the Proposed Transaction on the Common Shares.

FMV as defined above is a concept of value, which may or may not equal the purchase or sale price in an actual market transaction. Within the marketplace, there may exist “special purchasers” who may be willing to pay higher prices, as a result of reduced or eliminated competition, ensured source of sales, cost savings arising on business combinations following acquisitions, or other strategic advantages that could be realized by the purchaser.

Given the nature and stated purpose of this engagement, we will not expose any of the Common Shares to the marketplace to determine whether some special purchasers, for their own reasons, might perceive a value different from that considered by us in arriving at our Valuation & Fairness Opinion.

We have not considered the potential value to the Shareholders of any other transaction that might be undertaken as an alternative to the Proposed Transaction. In arriving at our Valuation & Fairness Opinion conclusions, BDO considered whether the FMV of the Cash Consideration to be received as part of the Proposed Transaction is greater than or equal to the FMV of the Common Shares.

With respect to the Fairness Opinion, BDO has defined fair, from a financial point of view to the Minority Shareholders, as whether the Cash Consideration to be received as part of the Proposed Transaction is equal to or greater than the FMV of the Common Shares.

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MAJOR ASSUMPTIONS

In arriving at our conclusions, we have relied on the following major assumptions:

(a) All assets and liabilities of the Company as at June 30, 2018, June 30, 2019 and June 30, 2020 (forecast) were recorded in accordance with generally accepted accounting principles in its respective financial statements;
(b) All revenues and expenses of the Company were recorded, in accordance with generally accepted accounting principles in its respective financial statements for the fiscal years ended June 30, 2018, June 30, 2019 and June 30, 2020 (forecast);
(c) The reported earnings of the Company contain no material non-recurring or unusual items of sales and expenses, except as noted therein;
(d) There were no significant non-arm’s length transactions (at other than FMV) during the period under review, except as noted therein;
(e) The balance sheets of the Company as at June 30, 2018, June 30, 2019 and June 30, 2020 (forecast) contained no material unrecorded, undisclosed or contingent assets, liabilities or commitments in accordance with applicable generally accepted accounting principles;
(f) The balance sheet of the Company as at June 30, 2020 (forecast) contained no redundant assets (liabilities), except as noted herein;
(g) The unaudited consolidated forecast financial statements of the Company as of June 30, 2020 were materially representative of its unaudited consolidated forecast financial statements as of June 22, 2020;
(h) There are no tax loss carry-forwards (“LCFs”) balances as of the Valuation Date that can be used to offset future tax liabilities and any LCFs disclosed in the Company’s historical financial statements are for accounting purposes only and have a FMV of $Nil;
(i) The market values of the tangible assets owned by the Company were not materially different at the Valuation Date than the amounts as indicated in this Valuation & Fairness Opinion, except as noted herein;
(j) The financial projections, including estimates for working capital requirements and capital expenditures,
represent the Company’s best estimate of future results as at the Valuation Date;
(k) There are no strategic initiatives or contemplated transactions that have not been disclosed to us, which would reasonably be expected to impact our conclusions; and
(l) No prior valuations (as defined in MI 61-101) regarding the Company have been prepared within the two years preceding the Valuation Date and to the knowledge of the Company or to any director or senior officer of the Company, after reasonable inquiry, no bona fide prior offers relating to the Common Shares has been received within the two years preceding the Valuation Date.

Should any of the above major assumptions not be accurate or should any of the information provided to us not be factual or correct, our conclusions could be significantly different.

BDO’s work consisted primarily of inquiry, consideration, analysis and discussion of this information. Our reliance on this information is based, in part, on representations by the management (“Management”) of the Company as to the completeness and accuracy of the information provided by the Company.

RESTRICTIONS AND LIMITATIONS

BDO relied on certain assumptions, including in respect of the assets, liabilities, revenues, expenses, balance sheet, market value and tangible assets and reporting earnings of the Company; the lack of significant non-arm’s length transactions (at other than FMV) during the period under review, except as noted in the Valuation & Fairness Opinion; financial projections; and that other material transactions, strategic initiatives and offers have been disclosed to BDO.

BDO has relied upon and assumed the completeness, accuracy and fair presentation of all financial and other information, data, advice, opinions, representations and other material relating to the Company, or any of its subsidiaries or associates provided to BDO by or on behalf of the Company, or otherwise obtained by BDO in connection

Page 4 of 26

with the engagement of BDO (collectively, “Information”). The Valuation & Fairness Opinion are conditional upon such completeness, accuracy and fair presentation. BDO has not been requested to, and has not assumed any obligation to, independently verify the completeness, accuracy or fair presentation of any such Information.

BDO has assumed that all financial budgets, forecasts, projections, and estimates provided to or otherwise obtained by BDO in connection with its engagement and used in its analyses were reasonably prepared on bases reflecting the best currently available information.

The Chief Financial Officer of the Company has, on behalf of Boyuan and not in his personal capacity, represented to BDO, among other things, that, in respect of Information relating to the Company: (i) such Information was at the date such Information was provided to BDO, and is as of the date hereof, complete, true and correct in all material respects, and did not and does not contain a misrepresentation (as defined in the Securities Act (Ontario) (“Securities Act”), except in each case where BDO has been advised that such Information has been superseded by Information subsequently provided by or on behalf of the Company, to BDO; and (ii) since the dates on which such Information was provided to BDO, except as disclosed publicly or to BDO, there has been no material change, financial or otherwise, in the financial condition, assets, liabilities (contingent or otherwise), business, operations or prospects of the Company, and no change has occurred in such Information or any part thereof which would have or which would reasonably be expected to have a material effect on the Valuation & Fairness Opinion.

In preparing the Valuation & Fairness Opinion, BDO has assumed that the executed Support Agreement will not differ in any material respect from the drafts that we reviewed, and that: (i) the Proposed Transaction will be consummated in accordance with the terms and conditions of the Support Agreement without waiver of, or amendment to, any term or condition that is in any way material to BDO’s analyses; and (ii) the representations and warranties in the Support Agreement are true and correct as of the date hereof.

The Valuation & Fairness Opinion are rendered on the basis of securities markets, economic, financial and general business conditions prevailing as of the date hereof and the condition and prospects, financial and otherwise, of the Company as they are reflected in the Information and as they have been represented to BDO in discussions with Management and its representatives. In BDO’s analyses and in preparing the Valuation & Fairness Opinion, BDO made numerous judgments and assumptions with respect to industry performance, general business, market and economic conditions and other matters, many of which are beyond BDO’s control or that of any party involved in the Proposed Transaction.

The Valuation & Fairness Opinion are provided to the Special Committee, the Board and the Company for their exclusive use only in considering the Proposed Transaction and may not be used or relied upon by any other person or for any other purpose without BDO’s prior written consent. The Valuation & Fairness Opinion do not constitute a recommendation to the Special Committee as to whether they should approve, or recommend approval of, the Proposed Transaction. Except for the inclusion in the Circular, the Valuation & Fairness Opinion in entirety or a summary thereof (in a form acceptable to BDO), are not to be reproduced, disseminated, quoted from or referred to (in whole or in part) without the prior written consent of BDO.

The Valuation & Fairness Opinion are not, and should not be construed as, advice as to the price at which the Common Shares may be sold at any time and no recommendation is made by BDO to the Minority Shareholders with respect to the Proposed Transaction, including how they should vote in respect of the Proposed Transaction. BDO has not been engaged to review, and does not express any view or opinion on, any legal, tax, accounting or regulatory aspects of the Proposed Transaction and the Valuation & Fairness Opinion do not address any such matters. BDO has relied upon, without independent verification, the assessment of the Company and its legal counsel with respect to such matters. In addition, the Valuation & Fairness Opinion do not address the relative merits of the Proposed Transaction as compared to any other strategic alternatives that may be available to the Company or the Majority Shareholder. The Fairness Opinion is limited solely to the Cash Consideration to be paid pursuant to the Proposed Transaction and does not address any other aspect of the Proposed Transaction.

The Valuation & Fairness Opinion are rendered as of the date hereof and BDO disclaims any undertaking or obligation to advise any person of any change in any fact or matter affecting the Valuation & Fairness Opinion which may come or be brought to the attention of BDO after the date hereof. Without limiting the foregoing, if BDO learns that any of the information it relied upon in preparing the Valuation & Fairness Opinion was inaccurate, incomplete or misleading

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in any material respect, BDO reserves the right to, but shall not be under and obligation to, change or withdraw the Valuation & Fairness Opinion.

BDO has based the Valuation & Fairness Opinion upon a variety of factors considered in aggregate. Accordingly, BDO believes that its analyses must be considered as a whole. Selecting portions of its analyses or the factors considered by BDO, without considering all factors and analyses together, could create a misleading view of the process underlying the Valuation & Fairness Opinion. The preparation of a formal valuation and a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Any attempt to do so could lead to undue emphasis on any particular factor or analysis.

BDO has relied upon and assumed the completeness, accuracy and fair presentation of all the financial and other information, data, advice opinions, presentation and other material obtained by it from public sources or provided to it by, on behalf of, or at the request of the Company and the Valuation & Fairness Opinion are conditional upon the completeness, accuracy or fair presentation of any of the information.

In connection with the preparation of the Valuation & Fairness Opinion, BDO’s mandate did not include the solicitation of interest from any other party with respect to any other extraordinary transaction involving the Company or the Majority Shareholder to evaluate alternatives to the Proposed Transaction. Furthermore, the Majority Shareholder advised the Special Committee that it had no interest in selling its Common Shares, which made searching for alternatives impracticable in these circumstances.

In preparing the Valuation & Fairness Opinion, BDO has made important assumptions, including that all final versions of all agreements and documents to be executed and delivered in respect of or in connection with the Proposed Transaction will conform in all material respects to the drafts and summaries provided to BDO, that all conditions precedent to the Proposed Transaction can be satisfied, that all approvals, authorizations, consents, permissions, exemptions or orders of relevant regulatory authorities required in respect of or in connection with the Proposed Transaction will be obtained, without adverse condition or qualification, that all steps or procedures being followed to implement the Proposed Transaction are valid and effective, that the Circular will be distributed to the Shareholders in accordance with applicable laws, and that the disclosure in the Circular will be accurate in all material respects and will comply, in all material respects, with the requirements of all applicable laws or regulations.

SCOPE OF REVIEW

In connection with preparing and rendering the Valuation & Fairness Opinion, BDO has reviewed, and where it considered appropriate, relied upon information obtained from the Company and certain external sources, as follows:

(a) Draft of the definitive Support Agreement;
(b) Corporate and management organizational charts provided by Management;
(c) The Company’s internal management financial budgets, forecasts, projections or estimates prepared by Management for the fiscal years ending June 30, 2020 to 2025;
(d) Certain internal financial, operating, corporate and other information prepared by Management;
(e) Consolidated financial statements of the Company, as audited by Deloitte Touche Tohmatsu (Hong Kong ) for the fiscal years ended June 30, 2018 and June 30, 2019;
(f) Unaudited interim consolidated financial statements of the Company for the 9 months ended March 31, 2019 and March 31, 2020 prepared by Management;
(g) Unaudited interim consolidated financial statements of the Company for the 11 months ended May 31, 2020 prepared by Management;
(h) Unaudited interim consolidated forecast financial statements of the Company for the fiscal year ending June 30, 2020 prepared by Management;
(i) Summary of the Company’s financial liabilities and weighted-average cost of debt, as at May 31, 2020 and forecast June 30, 2020 prepared Management;
(j) Corporate tax return of the Company for the fiscal and taxation year ended June 30, 2019;
(k) Annual information form of the Company, as prepared by Management for the fiscal year ended June 30, 2019.
(l) Certain publicly available information on the Company;

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(m) Summary of public company costs for the fiscal years ended June 30, 2018 and 2019, and forecast for the fiscal year ending June 30, 2020, as prepared by Management;
(n) Internal controls documentation related to financial reporting policies, processes and procedures used by the Company and developed by Management;
(o) Discussions with the Chief Financial Officer concerning the strategic, financial, and operational plans for the
Company;
(p) Discussions with the Special Committee regarding, among other matters, the process undertaken by the Board with respect to the Proposed Transaction;
(q) Certain publicly available financial information and stock market data relating to selected public companies that we considered might have relevance to our Valuation & Fairness Opinion;
(r) Financial terms, to the extent publicly available, of certain corporate merger or acquisition transactions that we considered might have relevance to our Valuation & Fairness Opinion;
(s) Independent research concerning the construction industry in the People’s Republic of China (“PRC” or “China”);
(t) Independent research concerning the current economic conditions and outlook for the Chinese economy;
(u) Review of public market data and research reports pertaining to the construction industry in China;
(v) Public information with respect to selected comparable public companies and precedent transactions BDO considered relevant;
(w) Various reports published by equity research analysts and industry sources BDO considered relevant;
(x) A letter of representation from the Company as to certain factual matters and the completeness and accuracy of certain information upon which the Valuation & Fairness Opinion are based on;
(y) Other industry, financial, and market information and analyses considered necessary or appropriate in the circumstances;
(z) Conducted other studies, analyses, and inquiries as we deemed necessary or appropriate; and
(aa) A draft of the Circular.

BDO has not, to the best of its knowledge, been denied access by the Company or the Majority Shareholder to any information that we have requested.

BDO has not audited or otherwise verified the information listed above.

PRIOR VALUATIONS

The Chief Financial Officer of the Company has, on behalf of the Company and not in his personal capacity, represented to BDO that, to the best of his knowledge, information and belief after due inquiry, no prior valuations (as defined in MI 61-101) regarding the Company have been prepared within the two years preceding the Valuation Date and to the knowledge of the Company or to any director or senior officer of the Company, after reasonable inquiry, no bona fide prior offers relating to outstanding Common Shares has been received by the Company or the Majority Shareholder within the two years preceding the Valuation Date.

CORPORATE OVERVIEW[1]

Business Description

Boyuan (TSX:BOY) is a publicly-traded construction company with operations based out of Zhejiang, China, which is located approximately 100 kilometers from Shanghai, China. The Company constructs residential and commercial buildings, municipal infrastructure and engineering projects primarily in the Yangtze River Delta Area and Hainan Island. Those two regions are among the fastest growing in China due to ongoing urbanization and an emerging middle class.

The Company has a Class I General Contractor Qualification that allows it to participate in construction projects with individual contract amounts exceeding CNY¥30 million and building height of up to 200 meters. Additionally, the

1 From the Company’s Annual Information Form (“AIF”) for the fiscal year ended June 30, 2019 and dated September 30, 2019.

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Company has a reputation for building quality projects on time and budget that has resulted in invitations to bid on projects on a regular basis.

The Company has a senior management team with extensive experience in the construction industry in China, an effective monitoring and control system that ensures engineering quality and safety of operations, and a strong sales and marketing network consisting of staff with technical background and an extensive business network in the market in which the Company operates.

As at the Valuation Date, the Company had approximately 560 employees.

Corporate Structure

The Company’s corporate structure is summarized below:

==> picture [217 x 242] intentionally omitted <==

----- Start of picture text -----

Boyuan Construction
Group Inc.
(“Boyuan”)
(Canada)
100%
Hong Kong Wealthy Shou Hong Hong
Holdings Limited
Cailiang Yongzhen Yongxiang
(“HKCo”)
(PRC) (PRC) (PRC)
(Hong Kong)
90% 5% 5%
100%
Zhejiang Jianyou Trading Zhejiang
Co., Ltd SPE Boyuan
Relationship Construction
(formerly Zhejiang Boyuan
Trading Co., Ltd.) Co. Ltd.
(“WFOE”) (“Boyuan China”)
(PRC) (PRC)
100% 100%
Hainan Boxiang Jiaxing Ziyuan Labour
Construction Co., Ltd. Services Co., Ltd.
(“Boxiang”) (“Ziyuan”)
(PRC) (PRC)
----- End of picture text -----

The Company has two wholly-owned subsidiaries as follows: (i) a direct subsidiary, Hong Kong Wealthy Holding Limited (“HKCo”), which was incorporated in Hong Kong; and (ii) an indirect subsidiary, Zhejiang Jianyou Trading Co., Ltd (“WFOE”). Both of these subsidiaries are non-public companies with nominal net non-monetary assets. HKCo's organizational structure was developed to effectively hold and operate businesses in China, while ensuring compliance with local governmental and regulatory requirements and providing shareholder liability protection. In addition, the Company has an indirect special purpose entity interest over Boyuan China, Ziyuan, and Boxiang.

WFOE entered into a series of agreements dated January 10, 2009 with Boyuan China and each of the shareholders of Boyuan China (“SPE Agreements”), whereby Boyuan China entrusts WFOE to manage and operate the business of Boyuan China under a special purpose entity (“SPE”) structure. This structure enables WFOE to have control over the equity and business of Boyuan China and enables 100% consolidation of Boyuan China's financial statements into Boyuan under IFRS 10.

Construction Projects

The Company’s primary construction projects include the following:

(i) Residential, consisting of housing projects for multi-home neighborhoods and condominium projects;
(ii) Customized factories, for the purpose of production, manufacturing, and processing activities;
(iii) Business and residential buildings, for the purpose of tourism, restaurants, entertainment, offices, and mixed use office/residential; and

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(iv) Public infrastructure, consisting of projects such as bus stations, squares, traffic hubs, nursing homes, and government institutions for urban development. The Company also constructs bridges and roads and plans to expand into skyscrapers that are more complex, public construction projects and general construction projects.

For the fiscal years ended June 30, 2018 and 2019, the Company finished 7 and 14 material projects, respectively, with annual revenues of CNY¥2.2 billion and CNY¥2.7 billion, respectively. As of the Valuation Date, the Company had approximately 35 material projects in process. The majority of these projects are located in the Yantze River Delta and Hainan Island and the duration of these projects ranges from one to three years. The three largest construction contracts announced during the last twelve months (and currently in progress) are as follows:

On January 13, 2020, the Company announced that it had initiated construction of a commercial project in Jiaxing City, Zhejiang with a contract value of CNY¥263 million and a construction area of 62,850 square meters. The expected completion is second half of 2021.
On January 13, 2020, the Company announced that it had initiated construction of a residential project in Jiaxing City, Zhejiang with a contract value of CNY¥392 million and a construction area of 158,754 square meters. The expected duration of the project is approximately two years.
On March 16, 2020, the Company announced that it had initiated construction of a residential project in Jiaxing City, Zhejiang with a contract value of CNY¥475 million and a construction area of 118,788 square meters. The expected duration of the project is approximately three years.

The Company also has a number of other potential projects in its business development and sales pipeline, which have been reflected in the financial projections prepared by Management and used as the basis for the Valuation & Fairness Opinion.

ECONOMIC AND INDUSTRY CONDITIONS

Economic Overview of China

China’s real GDP grew 6.1% in 2019[2] , compared to 6.6% in 2018[2] . While 2019 GDP growth was in-line with the official target range of 6.0% to 6.5% for 2019 as announced at the annual parliamentary gathering, it is China’s slowest rate of growth since 1990. China’s growth in 2019 was affected considerably by US-China trade tensions, which lowered exports because of weakened sentiment and confidence.

The country’s economic growth is expected to further decrease in 2020 due to the impact of the COVID-19 pandemic on the economy. More specifically, China’s real GDP decreased 6.8% in Q1 2020 amid coronavirus shutdowns. According to a recent Bloomberg survey in May 2020, economists project a full-year GDP growth of 1.8% for 2020. The government has pledged a record amount of funding to help boost domestic demand, and required banks to extend credit to businesses and offer interest-payment holidays. While industrial outputs and fixed-asset investments are expected to recover in the second half of the year, consumer demand is expected to remain low due to concerns about job stability and the resurgence of COVID-19 cases in Beijing or other jurisdictions across the country. Economists expect implementation of more monetary easing policies to shore up demand.

Oxford Economics projects a long-term nominal GDP growth of 5.9% and CPI of 2.8%, which is generally consistent with other economic sources we reviewed.

Business Environment in China

China’s business environment has evolved over the years to support its ongoing economic expansion, foreign investment, and positive balance of trade. To encourage direct foreign investment in certain priority industry sectors while restricting or prohibiting investment in other sectors, China classifies all foreign investment projects into four categories: “encouraged”, “permitted”, “restricted” and “prohibited”. As per real estate section under 2019 Catalogue and 2019 Negative List, foreign owned real estate enterprise are permitted in China. Foreign investment

2 Source: National Bureau of Statistics.

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entities (“FIEs”) are subject to enterprise income tax calculated at the rate of 25% levied on the FIEs’ net profits. In addition to the tax policy, several other regulations exist which may apply to the Company’s real estate business in China.

The government regulation of the construction industry includes three aspects: supervision of the certificate and qualification of the players in the market; supervision of the whole process of construction building; and supervision of the technical standards of the construction project. Ministry of Housing and Urban-Rural Development of China (“HURD’) is at the top of the regulatory framework and plays a leading role in guiding and administering the industry. The HURD oversees the development of the real estate market and the construction market in China. It also has the responsibility of ensuring construction quality and safety.

Overview of Construction Industry in China

Historical Performance

The construction industry in China has experienced significant growth over the past decade. The China National Bureau of Statistics has reported that the compound annual growth rate (“CAGR”) for the construction industry’s gross output value from 2013 to 2018 was 7.1%. The industry has benefited from the rapid urbanization and the insurgence of the middle class. Trends such as continued economic growth backed by industry-friendly government policies, improved regulatory environment, new business models that narrow the gap between domestic and international standards, and an increasing number of market participants that possess better technology and equipment and higher level of expertise have provided the industry with a platform for robust growth.

The construction industry in China is highly fragmented as state-owned and private enterprises are both qualified to conduct construction business. The competition from the large numbers of market participants intensified industry reforms where large-scale construction companies are developing new business model and raising the overall quality of construction management to enhance investment returns. However, the industry is gradually consolidating whereby smaller enterprises are being acquired by larger companies. Given this trend, participation in the large-scale infrastructure construction projects is mostly limited to a small number of large construction enterprise groups.

Furthermore, the measures introduced by the Chinese central government in the recent years to cool down the real estate market, including restrictions on buying residential building and tightening of liquidity in the real estate market, have put downward pressure on gross margins and payment terms for new construction projects.

Competitive Landscape

Key factors in the competitive landscape of the construction industry in China are discussed below:

Free competition environment — the barrier to entry is relatively low for the labour-intensive segment of the construction market that does not require advanced equipment and technology, contributing to a lag in the growth in profit as a result of insufficient regulation and intense competition among the low complexity constructors. However, the barrier to entry remains high for the segment that requires more advanced technology and equipment, evidenced by the small number of constructors possessing super construction qualifications in China.

Low specialization level — the number of specialized companies in the China construction industry is relatively much smaller than developed countries and the competitive environment is mainly comprised of general contractors.

Size of construction companies and highly fragmented industry — while large construction companies have competitive advantages due to size, scale, scope, breadth and diversification of operations and normally have much larger market share as compared to smaller competitors, the construction industry in China is highly fragmented, with a large number of smaller players that still comprise a significant portion of the market.

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Future Outlook [3] [,4]

COVID-19 and US-China trade tensions are expected to have an adverse impact on growth of the construction industry in China, particularly in the short-to-medium term. More specifically, due to the mandatory shutdowns in China to combat the COVID-19 pandemic, its construction industry is experiencing higher costs and lower margins due to rising labor, materials, logistic costs and additional costs to purchase epidemic protective gear. The mandatory lockdowns during the COVID-19 pandemic have also resulted in project and payment delays or impairments, as well as fewer new construction projects in the industry. Both COVID-19 and US-China trade tensions are expected to impair consumer and investor confidence and put downward pressure on housing prices given the weaker economic prospects in China and globally. At the same time, increased demand for green housing and healthcare facilities is expected to help offset some of these negative factors and help drive growth in the industry.

FINANCIAL OVERVIEW

Historical Results

The following table summarizes certain financial results of the Company for the fiscal years ended June 30, 2018, June 30, 2019 and June 30, 2020 (forecast).

==> picture [460 x 315] intentionally omitted <==

----- Start of picture text -----

(USD 000’s) (CNY 000’s)
Fiscal Year Ended June 30 Fiscal Year Ended June 30
(CNY 000’s) 2018A 2019A 2020F 2018A 2019A 2020F
[1] [1] [3] [2] [2] [3]
Revenue 325,926 395,172 409,172 2,119,115 2,695,750 2,876,231
% growth n/a 21.2% 3.5% n/a 27.2% 6.7%
Gross profit 24,401 26,349 16,492 158,650 179,744 115,925
% revenue 7.5% 6.7% 4.0% 7.5% 6.7% 4.0%
EBITDA 19,913 31,756 9,272 129,470 216,629 65,177
% revenue 6.1% 8.0% 2.3% 6.1% 8.0% 2.3%
Normalization Adjustment
Impairment losses recognized on unbilled 1,788 - - 11,626 - -
revenue, net
- -
Impairment losses recognized (reversed) on (5,321) 4,143 (36,297) 29,125
contract assets, net
Impairment losses recognized on accounts 4,973 181 6,121 32,331 1,233 43,028
receivable, net
Impairment losses recognized (reversed) on (692) (220) 30 (4,496) (1,499) 208
deposits, net
Public company costs 450 450 450 2,926 3,070 3,163
Other income (4,790) (4,568) (3,865) (31,146) (31,159) (27,167)
Other gains and losses (1,332) (36) (3,674) (8,658) (244) (25,825)
Normalized EBITDA 20,310 22,242 12,477 132,053 151,733 87,709
% revenue 6.2% 5.6% 3.0% 6.2% 5.6% 3.0%
----- End of picture text -----*

* Represents earnings before interest, taxes, depreciation, and amortization (“EBITDA”), before normalization adjustments.

[1] Source: Consolidated financial statements of Boyuan Construction Group, Inc. as audited by Deloitte Touche Tohmatsu (Hong Kong).

[2] Source: FY2018 and FY2019 consolidated income statements of Boyuan Construction Group, Inc. in USD audited by Deloitte Touche Tohmatsu (Hong Kong) and converted by BDO to Chinese Yuan at average FX rates of 0.1538 and 0.1463 for FY2018 and FY2019, respectively.

[3] Source: Unaudited interim consolidated forecast financial statements of Boyuan Construction Group, Inc. in Chinese Yuan as prepared by Management. BDO converted the statements to USD at an average FX rate of 0.1423. Management informed BDO that Boyuan Construction Group, Inc.'s unaudited forecast financial statements as of June 30, 2020 were materially representative of its unaudited forecast financial statements as of June 22, 2020.

3 Deloitte China (May 2020). Impact of COVID-19 on the Capital and Operations in the Chinese real-estate industry.

4 PwC China (2018). What China-US Trade Tensions mean for Chinese Economy and Business.

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Revenues increased 27.2% from CNY¥2.1 billion in 2018 to CNY¥2.7 billion in 2019, mainly driven by the robust real estate market in Jiaxing, Zhejiang Province, which led to a number of new projects leading up to and during this period. However, measures introduced by the Chinese central government to cool the real estate market have had a negative impact on the Company’s new business activities, resulting in slower new revenue growth and lower margins over the past three years, as the Company has become more selective in taking on new projects under the new policy. Also, the current uncertain economic environment has resulted in increased competition, lower pricing and downward pressure on both gross and EBITDA margins over the past three years.

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Financial Position

The following table summarizes the Company’s balance sheet for the fiscal years ended as at June 30, 2018 and June 30, 2019 and for the fiscal year ending June 30, 2020 (forecast).

==> picture [477 x 530] intentionally omitted <==

----- Start of picture text -----

(USD 000’s) (CNY 000’s)
As at June 30 As at June 30
2018A 2019A 2020F 2018A 2019A 2020F
[1] [1] [3] [2] [2] [3]
Assets
Current assets
Unbilled revenue 110,930 - - 734,293 - -
Contract assets - 131,605 121,549 - 903,755 859,062
Accounts receivable 49,899 49,616 59,677 330,302 340,720 421,778
Bank notes receivable 9,751 4,155 5,446 64,545 28,534 38,488
Deposits 13,708 15,462 13,779 90,737 106,182 97,385
Advances and prepaid expenses 6,735 1,533 31,449 44,583 10,527 222,273
Other receivables 1,556 2,261 4,053 10,298 15,526 28,648
Income taxes receivable 938 6,008 4,283 6,211 41,257 30,269
Inventory 223 895 2,925 1,474 6,148 20,674
Due from related parties 812 3,259 3,715 5,373 22,377 26,259
Prepaid lease payments 2 2 - 16 16 -
Restricted cash 8,546 6,730 1,893 56,571 46,216 13,378
Cash and cash equivalents 7,237 18,956 10,923 47,905 130,172 77,199
Total current assets 210,336 240,481 259,693 1,392,308 1,651,431 1,835,413
Unbilled revenue 28,853 - - 190,994 - -
Contract assets - 27,150 30,194 - 186,446 213,397
Accounts receivable 20,413 29,395 29,053 135,123 201,859 205,334
Property and equipment 5,547 4,590 2,881 36,715 31,521 20,360
Prepaid lease payments 86 80 - 568 552 -
Right-of-use assets - - 626 - - 4,424
Deferred tax assets 7,382 8,471 7,777 48,863 58,172 54,966
Total assets 272,617 310,168 330,223 1,804,571 2,129,982 2,333,894
Liabilities
Current liabilities
Borrowings 75,300 72,704 69,492 498,443 499,270 491,147
Accounts and other payables and accrued liabilities 51,044 88,193 94,875 337,886 605,637 670,542
Bank notes payable 24,421 15,897 12,560 161,655 109,165 88,769
Other loans 644 7,883 2,723 4,261 54,131 19,242
Lease liabilities - - 335 - - 2,370
Convertible debentures 5,262 - - 34,835 - -
Other financial liabilities designated at fair value through P/L 350 - - 2,320 - -
Financial guarantee contracts liabilities - 351 64 - 2,409 450
Total current liabilities 157,022 185,027 180,049 1,039,399 1,270,613 1,272,520
- - - -
Borrowings 21,353 150,917
Lease liabilities - - 148 - - 1,047
Total liabilities 157,022 185,027 201,550 1,039,399 1,270,613 1,424,484
Shareholders' equity
Share capital 7,159 7,159 8,676 47,390 49,163 61,320
Reserves 108,435 117,982 119,996 717,782 810,205 848,090
Total shareholders' equity 115,595 125,141 128,672 765,172 859,369 909,410
Total liabilities and shareholders' equity 272,617 310,168 330,223 1,804,571 2,129,982 2,333,894
----- End of picture text -----

[1] Source: Consolidated financial statements of Boyuan Construction Group, Inc. as audited by Deloitte Touche Tohmatsu (Hong Kong).

[2] Source: Consolidated balance sheets of Boyuan Construction Group, Inc. in USD audited by Deloitte Touche Tohmatsu (Hong Kong) and converted by BDO to Chinese Yuan based on FX rates of 0.1511 and 0.1456 as at June 30, 2018 and June 30, 2019, respectively.

[3] Source: Unaudited interim consolidated forecast financial statements of Boyuan Construction Group, Inc in USD were converted by BDO to Chinese Yuan based on an FX rate of 0.1415 as at June 22, 2020. Management informed BDO that Boyuan Construction Group, Inc.'s unaudited consolidated forecast financial statements as of June 30, 2020 were materially representative of its unaudited consolidated forecast financial statements as of June 22, 2020.

Page 13 of 26

Income Tax Position

There were no tax LCFs as at the Valuation Date. Management has informed us that the LCFs disclosed in the historical financial statements are for accounting purposes only and have a FMV of $Nil. This is consistent with our review of the Company corporate tax returns.

FINANCIAL PROJECTIONS

For the purposes of the Valuation & Fairness Opinion, Management has provided financial projections for the Company. In the table below, BDO has summarized Management’s financial projections for the Company for the fiscal years ending June 30, 2021 to June 30, 2025.

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Fiscal Year Ending June 30,
(CNY 000’s) 2021P 2022P 2023P 2024P 2025P
Existing projects 2,316,500 1,225,500 302,000 115,000 84,000
New projects 171,000 779,000 1,491,000 1,763,500 1,890,500
Revenue 2,487,500 2,004,500 1,793,000 1,878,500 1,974,500
% growth (13.5%) (19.4%) (10.6%) 4.8% 5.1%
EBITDA 67,935 40,968 42,487 53,022 64,143
% revenue 2.7% 2.0% 2.4% 2.8% 3.2%
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Revenue

Management expects revenue to decrease by 13.5% in 2021, 19.4% in 2022, and 10.6% in 2023. These projected decreases are due to fewer new projects currently in the project pipeline and an expected delay in the execution or completion of existing projects due to the negative impact of the COVID-19 pandemic and US-China trade tensions on the economy and construction industry in China. Management expects revenue growth of 4.8% and 5.1% in 2024 and 2025, respectively, as real-estate and construction activity is projected to gradually recover back to pre-COVID-19 levels.

EBITDA

The Company operates within a relatively low margin industry and its operating margins have been declining over the past few years leading up the Valuation Date, as discussed earlier. This trend is expected to continue, as EBITDA margins are projected to decrease from 2.7% in 2021 to 2.0% in 2022, and gradually recover to 3.2% by 2025, as the negative impact of the COVID-19 pandemic and US-China trade tensions are expected to ultimately improve, albeit gradually over the latter part of the projection period.

The financial projections provided by Management included public company costs, which had a current annual runrate of approximately US$450,000 or CNY¥3.2 million. BDO excluded these costs from the financial projections provided by Management based on its understanding that these costs could be avoided by a potential purchaser in a going private transaction.

BDO Assessment

There is significant uncertainty with respect to Management’s revenue and profitability financial projections. Achievement of these financial projections requires overcoming significant risks and challenges, including (among others): (i) realization of existing projects at declining margins; (ii) likely delays in the execution or completion of existing or new projects; (iii) increased pressure on operating margins due to lower expected growth and increased competition in the construction industry in China; and (iv) increased risk or delay in the collection or realization of accounts receivable, contract assets and unbilled revenue due to the potential continued negative impact of both the COVID-19 pandemic and the US-China trade tensions on the Chinese economy and the Company’s industry, market and customers.

These risks and challenges are also expected to impact the Company’s ability to acquire new projects. As a result, in our view, the financial projections have significant risk as at the Valuation Date.

Page 14 of 26

VALUATION PRINCIPLES AND APPROACHES

There are three generally acceptable approaches to determining FMV: Income, Market, and Asset Approaches:

The income approach ascribes value to the interest in the company based on its ability to generate future discretionary cash flow and earn a reasonable return on investment after consideration of risks related thereto. Examples of the income approach include the capitalized earnings/cash flow and the discounted cash flow methods;
The empirical or market approach involves determining the FMV of a company based on value relationships or activity ratios derived or implied from the analysis of guideline public trading prices and market transactions that can be applied to the company in question. Both merger and acquisition activity and stock market activity are considered in deriving various value measures to apply; and
The asset-based approach considers the current value of a company’s net assets as the prime determinant of value. This approach is generally used where a company is properly valued as a going concern but where the going concern value is closely related to the value of its underlying assets (i.e. limited goodwill and intangible assets) or where a business is not viable as a going concern and it, therefore, maximized value under liquidation.

For purposes of determining the FMV of the Common Shares, BDO considered the following methodologies: (a) discounted cash flow (“DCF”) analysis; (b) comparable public trading analysis; and (c) precedent M&A transactions analysis.

The FMV of the Common Shares is determined based on the sum of the following components:

Business enterprise value (“BEV”) of the Company using the methodologies above
Plus: Cash and cash equivalents of CNY¥115,700,000
Minus: Financial liabilities of CNY¥740,600,000
Equals: FMV of the Common Shares

A summary of the FMV of the Common Shares as compared to the Cash Consideration is provided in the table below, as at the Valuation Date.

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Discounted Cash Comparable Public Precedent M&A
Flow Method Companies Method Transactions Method
(CAD 000’s) Low High Low High Low High
Cash Consideration 15,900 15,900 15,900 15,900 15,900 15,900
Common Shares [5] 10,000 16,500 9,700 16,400 9,700 16,400
Premium / (Discount) ($) 5,900 (600) 6,200 (500) 6,200 (500)
Premium / (Discount) (%) 59.0% (3.6%) 63.9% (3.0%) 63.9% (3.0%)
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DISCOUNTED CASH FLOW METHOD

Overview

BDO used the DCF analysis as the primary method for determining the FMV of the Common Shares. In our view, this approach would most likely be employed by a prospective purchaser of the Common Shares given the cash flow profile of the Company as projected by Management.

The DCF methodology reflects the growth prospects and risks inherent in the Company’s business by taking into account the amount, timing, and relative certainty of projected unlevered after-tax free cash flows expected to be generated by the Company. The DCF analysis requires certain assumptions to be made, among other things, regarding the future unlevered after-tax free cash flows, discount rates and terminal values.

5 Common Shares converted to $CAD at a FX rate of 0.1917, as at the Valuation Date.

Page 15 of 26

In addition, we have assessed the reasonableness of our conclusions under the DCF analysis in light of revenue and EBITDA multiples implied by the stock market capitalization of publicly-traded companies, as well as prices paid in recent transactions involving companies operating in the construction industry in China. In performing this assessment, we have considered the similarities and differences between the Company and the public/target companies, including jurisdiction, size, scale, scope, breadth and diversification of operations, market segment and competition.

Under the DCF method, unlevered free cash flows are discounted at a specific rate to determine the present value. The present value of a terminal value, representing the value of unlevered free cash flows beyond the end of the projection period, is added to arrive at the BEV. Net cash and cash equivalents are added, and financial liabilities are deducted to arrive at equity value. The equity value is then divided by the number of Common Shares outstanding to arrive at an implied price per Common Share.

EBITDA

Management’s financial projections form the basis for estimating the Company’s anticipated future cash flow streams.

In applying the DCF method, BDO reviewed and relied upon the financial projections of the Company, as prepared and provided by Management for the years ending June 30, 2021 to 2025. These financial projections included public company costs, which had a current annual run-rate of approximately US$450,000 or CNY¥3.2 million. As discussed earlier, BDO excluded these costs from the financial projections provided by Management based on its understanding that these costs could be avoided by a potential purchaser in a going private transaction.

Cash Taxes

BDO calculated taxes based on a 25% tax rate, consistent with the relevant corporate income tax rate in China.

Capital Expenditures

Management has estimated annual capital expenditures to be CNY¥1.4 million from 2021 to 2025, which is consistent with the Company’s historical results. Also, the Company typically rents construction equipment for the execution of its projects, so it requires relatively minimal capital expenditures on a ongoing basis.

Working Capital

BDO estimated the level of working capital necessary to support the financial projections. We note that the Company has significant working capital requirements, which have averaged close to 50% of revenues historically, as it is typical in the construction industry in China to have long collection cycles for accounts receivable and contracts assets. More specifically, collection cycles can range from six-to-eighteen months or longer due to the lag between project launch, billing and collection, given the nature of the construction industry in China. As a result, we assumed ongoing working capital requirements of 50% of revenues based on a review of historical results, discussions with Management regarding future expectations and target working capital and an analysis of comparable public companies.

Terminal Value

To account for the value of the unlevered after-tax free cash flows after the discrete projection period ending June 30, 2025, BDO developed terminal enterprise value by applying a terminal growth rate of 2.8% to the cash flows in the terminal year. BDO selected a terminal growth rate of 2.8% based on review of long-term CPI estimates for China, including Oxford Economics and other well-established third-party economists.

Capital expenditures and working capital requirements are applied to the terminal period, consistent with the discrete projection period.

For purposes of calculating the terminal year cash flow, we have separately considered and added the present value of the existing undepreciated tax balance benefits in arriving at the BEV of the Company. Given that the Company’s operations are not capital-intensive and its investment in property and equipment is relatively small, we assumed the existing undepreciated tax basis to be the same as the accounting basis.

Page 16 of 26

Unlevered After-Tax Free Cash Flows

The following table is a summary of the unlevered after-tax free cash flow projections used in the DCF analysis of the Company, as at the Valuation Date:

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Fiscal Year Ending June 30,
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	Fiscal Year Ending June 30,
(CNY 000’s) Reference 2021P		2025P Terminal Year
	2022P 2023P 2024P
Existing projects 2,316,500 New projects 171,000	1,225,500 302,000 115,000 779,000 1,491,000 1,763,500	84,000 1,890,500 2,029,786
Revenue Schedule C4 2,487,500 2,004,500 1,793,000 1,878,500 1,974,500 2,029,786 Growth (13.5%) (19.4%) (10.6%) 4.8% 5.1% 2.8%
EBITDA Schedule C4 71,116 44,148 45,668 56,202 67,323 69,208 EBITDA (%) 2.9% 2.2% 2.5% 3.0% 3.4% 3.4% Income taxes (17,779) (11,037) (11,417) (14,050) (16,831) (17,302)
Net operating income 53,337 33,111 34,251 42,151 50,493 51,906 Free cash flow adjustments: Incremental net working capital requirements 184,528 241,500 105,750 (42,750) (48,000) (27,643) Capital expenditures, net of tax shield (low) (1,275) (1,275) (1,275) (1,275) (1,275) (1,311) Capital expenditures, net of tax shield (high) (1,267) (1,267) (1,267) (1,267) (1,267) (1,302)
Debt free cash flow (low) 236,590 273,336 138,725 (1,874) 1,217 22,952
Debt free cash flow (high) 236,598 273,344 138,734 (1,865) 1,226 22,961

Terminal multiple (low) 9.6X
Terminal value (low) 219,639

Terminal multiple (high) 10.9X
Terminal value (high) 250,943

Page 17 of 26

Weighted-Average Cost of Capital (WACC)

A description of the weighted-average cost of capital (“WACC”) and its components is discussed below.

Description of WACC

The cash flow stream for the discrete projection period and the terminal value are discounted to their present value by applying an appropriate discount rate. The WACC is the implied rate of return an investor would require for an investment in a company with similar risk and business characteristics to the Company. The WACC is determined by examining market information for comparable companies and using this information to estimate an equity cost of capital using the Capital Asset Pricing Model (“CAPM”). The applicable cost of debt is determined, and a weightedaverage of the rate is calculated.

The Company’s assumed optimal capital structures of 55% debt-to-capital was determined based on BDO's assessment of the optimal capital structure for the Company, as at the Valuation Date. This included a review of the median debt-to-capital ratio of the selected comparable public companies, as at the Valuation Date.

Components of WACC

The following is a summary of the assumptions and calculations BDO used to estimate the cost of equity and WACC, as at the Valuation Date:

WACC	Low High
Cost of equity Systematic risk factors: Risk free rate Levered equity beta Equity risk premium Country risk premium	3.47% 3.47% 0.64 0.64 6.50% 6.50% 0.80% 0.80%
Cost of equity (before unsystematic risk) Unsystematic risk factors: Size premium Company specific risk premium	8.45% 8.45% 10.91% 10.91% 2.08% 5.00%
Cost of equity	21.44% 24.36%
Cost of debt Pre-tax cost of debt Tax rate	5.57% 5.57% 25.00% 25.00%
After-tax cost of debt	4.18% 4.18%
Weight Debt-to-capital Equity-to-capital	55.00% 55.00% 45.00% 45.00%
Weighted-average cost of capital (WACC) (Rounded)	11.95% 13.25%

Assumptions applied in the foregoing analysis are described below:

Page 18 of 26

Risk Free Rate of Return — at the Valuation Date, the risk-free return, as measured by the yield on long-term (20-year) China government bonds, was 3.47%.
Beta — we have examined the rates of return demanded by investors in public companies that are in the construction industry in China. An unlevered beta of 0.34 for the Company was calculated based on the beta of a pool of comparable public companies. This beta was then levered based on the Company’s target debt-tocapital ratio.
Equity Risk Premium — an equity risk premium of 6.50% was applied based on BDO's review of recently published articles, academic studies, and surveys that attempt to quantify the expected equity risk premium for US common stocks, as well as the range of equity risk premiums used by other major accounting or valuations firms in the marketplace .
Country Risk Premium — a country risk premium of 0.80% was selected for China, based on the Duff & Phelps International Valuation Handbook for a company operating in China.
Size Premium — the size premium is based on the Duff & Phelps Valuation Handbook (decile 10z) of 10.91%.
Company Specific Risk Premium — In addition to the risk reflected through the beta and equity risk premium we added a specific risk premium of approximately 2.1% to 5.0% to account for the following positive and negative factors specific to the Company:

Positive Factors :

The Company is well-established and has a good reputation, with the majority of its projects in the Yangtze River and Hainan districts of China, which are among the fastest growing regions in China due to ongoing urbanization and an emerging middle class;
The Company successfully completed 37 material projects in the past three years; and
The Company has a considerable project backlog, including both residential and commercial projects which will be predominantly completed by the end of 2025.

Negative Factors:

The Company operates within a low margin industry and its financial performance can be significantly impacted by small changes in key factors such as signing of new projects, cost of labour or materials, highly competitive project pricing or issues with the collection or realization of accounts receivable, contract assets or unbilled revenue;
The Company has high dependence on a small number of large customers for its revenues, with the Company's top five customer comprising between 25% to 45% of its revenues, accounts receivable and contract assets over the past three years;
The Company has been experiencing a decline in new projects and lower gross and EBITDA margins over the past five years and this trend is expected to continue due to the current state of the economy and the related lower expected growth prospects and increased competition in the construction industry in China;
While the Company has a considerable project backlog as at the Valuation Date, it is expected to be predominantly realized by the end of 2025. As a result, close to 100% of the Company’s projected revenues for 2025 and beyond represent revenues to be generated through future projects or sales, which are unknown as at the Valuation Date; and
In addition to the items above, there is significant projection risk or risk of impairment loss related to the Company’s accounts receivable, contract assets and unbilled revenue due to the potential continued negative economic impact of both the COVID-19 pandemic and the US-China trade tensions on the Chinese economy and the Company’s industry, market and customers.
Cost of Debt — A pre-tax cost of debt of 5.57% was determined based on the actual cost of debt of the Company.

Page 19 of 26

Summary of WACC Computation

Based on the foregoing factors, we determined the WACC to be in the range of 11.95% to 13.25%. This range appears reasonable based on our experience in valuing similar companies.

Summary of FMV of the Common Shares (DCF)

The following table provides a summary of the FMV range of the Company’s BEV resulting from the DCF analysis. Cash and cash equivalents are added, and financial liabilities are deducted to arrive at the FMV of the Common Shares.

The FMV of the Common Shares is then divided by the number of Common Shares outstanding to arrive at an implied price per Common Share.

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Fair Market Value
(CNY 000’s) Low High
Unlevered after-tax free cash flows 549,033 557,372
Terminal value 125,085 150,577
Tax shield on existing assets 2,900 3,100
Business enterprise value (BEV) (Rounded) 677,000 711,000
Plus: Cash and cash equivalents 115,700 115,700
Minus: Financial liabilities (740,600) (740,600)
Common Shares 52,100 86,100
FX rate at valuation date 0.1917 0.1917
Common Shares (CAD, Rounded) 10,000 16,500
Number of Common Shares outstanding 31,778,830 31,778,830
FMV per common share (CAD) 0.31 0.52
Implied BEV/LTM revenue multiple 0.2X 0.2X
Implied BEV/LTM EBITDA multiple 7.7X 8.1X
WACC 13.25% 11.95%
Terminal growth rate 2.8% 2.8%
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Sensitivity Analysis (DCF)

As part of the DCF analysis, BDO performed sensitivity analyses on the value of the Common Shares for changes in several key factors, as shown below:

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Change in Valuation of the Common Shares
(CNY 000’s) (CAD 000’s)
DCF Sensitivity Analysis Sensitivity Low High Low High
+1.0% (21,700) (26,700) (4,159) (5,117)
WACC
-1.0% 25,600 32,400 4,906 6,210
+2.8% (18,300) (17,500) (3,507) (3,354)
Revenue (FY 2021 to FY 2025)
-2.8% 18,300 17,600 3,507 3,373
+5.0% 22,100 25,200 4,236 4,830
EBITDA margin (FY 2021 to FY 2025)
-5.0% (22,000) (25,100) (4,217) (4,811)
Impairment of contract assets and -25.0% (147,803) (147,803) (28,328) (28,328)
accounts receivable -50.0% (295,606) (295,606) (56,656) (56,656)
Economic recovery 6 months sooner 43,457 41,284 8,329 7,912
(COVID-19 & US-China Trade Tensions) 12 months longer (79,208) (75,895) (15,181) (14,546)
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Page 20 of 26

COMPARABLE PUBLIC COMPANIES METHOD

BDO also considered comparable trading analysis in assessing the reasonableness of our conclusion under the DCF method. BDO identified, reviewed and compared public companies in China and Hong Kong (“Comparable Public Companies”) across a variety of factors including, among others, industry, size, enterprise value, revenue, EBITDA, business description, and geographic location of operations. Specifically, BDO considered the market multiples of BEV-to-revenue and BEV-to-EBITDA over the last twelve months (“LTM”), as appropriate.

The market multiples were based on the closing share prices of the Comparable Companies on June 22, 2020 and on other publicly available information. For illustrative purposes, BDO applied a discount of 50.0% to the median of the unadjusted market multiples based on its review of the selected companies and in consideration of significant differences in size, scale, scope, breadth and diversification of operations as compared to the Company (e.g., on average, the Comparable Companies were approximately 20 times larger in terms of BEV, earnings or profitability versus the Company). The following table represents the results of this analysis.

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Company BEV / LTM EBITDA
Companies Listed in China
Anhui Construction Engineering Group Co., Ltd. 12.6X
ARTS Group Co., Ltd 11.5X
Chongqing Construction Engineering Group Corporation Limited 14.2X
Hongrun Construction Group Co., Ltd. 7.6X
Long Yuan Construction Group Co., Ltd NMF
Ningbo Construction Co., Ltd. 11.0X
Shanghai Construction Group Co., Ltd. 5.0X
Shenzhen Ruihe Construction Decoration Co., Ltd. 10.2X
Tibet Tianlu Co., Ltd. 7.6X
Changjiang & Jinggong Steel Building (Group) Co., Ltd 10.1X
Hang Xiao Steel Structure Co., Ltd 16.0X
Zhejiang Reclaim Construction Group Co., Ltd. NMF
Average 10.6X
Median 10.6X
Median @ 50% Discount 5.3X
Companies Listed in Hong Kong
Hebei Construction Group Corporation Limited 8.5X
Inner Mongolia Energy Engineering Co., Ltd. 12.7X
Jujiang Construction Group Co., Ltd. 3.1X
Average 8.1X
Median 8.5X
Median @ 50% Discount 4.3X
All Companies
Average 10.0X
Median 10.2X
Median @ 50% Discount 5.1X
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*NMF = Not meaningful

Page 21 of 26

Based on our review of the results of the DCF method, the range of market multiples of the Comparable Public Companies and in consideration of the factors discussed earlier, we selected EBITDA market multiples in the range of 7.7X to 8.1X in arriving at the BEV of the Company under the comparable public companies method.

The BEV of the Company was then adjusted for cash and cash equivalents and financial liabilities in arriving at the FMV of the Common Shares.

A summary of the FMV of the Common Shares as determined based on the comparable public companies method is shown in the table below.

Summary of FMV of the Common Shares (Comparable Public Companies Method)

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Fair Market Value
(CNY 000’s) Low High
Business enterprise value (BEV) 675,300 710,400
Plus: Cash and cash equivalents 115,700 115,700
Minus: Financial liabilities (740,600) (740,600)
Common Shares 50,400 85,500
FX rate at valuation date 0.1917 0.1917
Common Shares (CAD, Rounded) 9,700 16,400
Number of Common Shares outstanding 31,778,830 31,778,830
FMV per Common Share (CAD) 0.31 0.52
BEV/LTM revenue multiple 0.2X 0.2X
BEV/LTM EBITDA multiple 7.7X 8.1X
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PRECEDENT M&A TRANSACTIONS METHOD

BDO reviewed precedent M&A transactions (“Precedent Transactions”) in the construction industry in Hong Kong and China that provided sufficient public information to derive precedent transaction multiples.

In assessing the comparability of the Precedent Transactions, BDO considered the following key factors (among others): (a) industry; (b) size; (c) revenue; (d) EBITDA; (e) business descriptions of the target company; (f) geographic location of operations; (g) profitability of the target business; (h) condition of the financial markets at the time of the transaction; and (i) other factors affecting the target company.

BDO also reviewed the implied valuation of two recent private placements (“Private Placements”) involving the Common Shares of the Company, which occurred in December 2019.

For each of the Precedent Transactions and Private Placements, BDO calculated the multiple of BEV-to-revenue and BEV-to-EBITDA over LTM, as appropriate. The multiples were based on the implied BEV and other publicly available information as at the closing date of each transaction. For illustrative purposes, BDO applied a discount of 50.0% to the median of the unadjusted market multiples of the Precedent Transactions in consideration of the factors discussed earlier as compared to the Company (e.g., on average, the Precedent Transactions were approximately 10 times larger in terms of BEV and approximately 7X larger in terms of earnings or profitability versus the Company).

The following table represents the results of this analysis:

Page 22 of 26

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Target Purchaser Close Date BEV/LTM EBITDA
Precedent M&A Transactions
Suzhou Kelida Building& Decoration N/A 4-Mar-20 25.6X
Co.,Ltd.
Suzhou Kelida Building& Decoration N/A 22-Jan-20 25.8X
Co.,Ltd.
Shenzhen Bauing Construction Holding Zhuhai Aviation Industrial 21-Jan-20 16.5X
Group Co., Ltd. Development Group Co., Ltd.
Ningbo Construction Co., Ltd. Ningbo Communications Investment 24-Oct-19 10.2X
Holdings Co., Ltd
Changsha Broad Homes Industrial Hunan Jiuyi Tongfu Private Placement 15-Aug-19 26.3X
Group Co., Ltd. Equity Fund Partnership Enterprise
(Limited Partnership)
Chongqing Construction Engineering Chongqing Expressway Group Co., Ltd. 14-May-19 N/A
Group Corporation Limited
Palm Eco-Town Development Co., Ltd Henan Yuzi Affordable Housing 21-Mar-19 NMF
Management and Operation Co., Ltd.
Palm Eco-Town Development Co., Ltd Nanjing Chixia Development Co., Ltd. 29-Mar-19 NMF
Zhengzhou Water Conservancy Flower King Eco-Engineering Inc. 17-Oct-17 16.6X
Construction Project Co.,Ltd
China Railway NO.2 Engineering Group China Railway Group Limited 11-Sep-19 15.8X
Co.,Ltd
Average 19.5X
Median 16.6X
Median @ 50% Discount 8.3X
Precedent Private Placements
Boyuan Construction Group, Inc. Private Placement 31-Dec-19 4.8X
Boyuan Construction Group, Inc. Private Placement 5-Dec-19 3.1X
Average 4.0X
Median 4.0X
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*NMF = Not meaningful

Based on our review of the results of the DCF method, the range of market multiples of the Precedent Transactions and in consideration of differences in size, scale, scope, breadth and diversification of operations of the Precedent Transactions and Private Placements as compared to the Company, we selected EBITDA market multiples in the range of 7.7X to 8.1X in arriving at the BEV of the Company under the precedent M&A transactions method.

The BEV of the Company was then adjusted for cash and cash equivalents and financial liabilities in arriving at the FMV of the Common Shares.

A summary of the FMV of the Common Shares as determined based on the precedent M&A transactions method is shown in the table below.

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Summary of FMV of the Common Shares (Precedent M&A Transactions Method)

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(CNY 000’s) Low High
Business enterprise value (BEV) 675,300 710,400
Plus: Cash and cash equivalents 115,700 115,700
Minus: Financial liabilities (740,600) (740,600)
Common Shares 50,400 85,500
FX rate at valuation date 0.1917 0.1917
Common Shares (CAD, Rounded) 9,700 16,400
Number of Common Shares outstanding 31,778,830 31,778,830
FMV per Common Share (CAD) 0.31 0.52
BEV/LTM revenue multiple 0.2X 0.2X
BEV/LTM EBITDA multiple 7.7X 8.1X
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MARKET CAPITALIZATION

On a market basis, the Cash Consideration represents a premium of approximately 39.0% to the Company’s market capitalization as at June 22, 2020 (“Pre-Announcement Date”). A summary of the market capitalization is provided in the table below.

(CAD 000’s)	Low	High
Cash Consideration	15,900	15,900
Common Shares (Pre-Announcement Date)	11,440	11,440
Premium ($) *Premium (%)*	4,460 *39.0%*	4,460 *39.0%*

INTERNAL RATE OF RETURN

Based on the financial projections of the Company provided by Management, the BEV implied by the Cash Consideration of CNY¥707.8 million (midpoint) resulted in an IRR of 12.1%. In assessing the reasonableness of the IRR, we considered the following factors, some of which were discussed earlier:

(a) The historical and projected profitability of the Company, new project pipeline and the fact that the Company operates within a low margin industry and has high dependence in a small number of large customers;
(b) The Company’s is well-known and has a good reputation in China’s construction industry;
(c) The Company has a considerable project backlog, which is expected to be predominantly realized by the end of 2025. As a result, close to 100% of the Company’s projected revenues for 2025 and beyond represent revenues to be generated through future projects or sales, which are unknown as at the Valuation Date;
(d) There is significant projection risk or risk of impairment loss related to the Company’s accounts receivable, contract assets and unbilled revenue due to the potential continued negative economic impact of both the COVID19 pandemic and the US-China trade tensions on the Chinese economy and the Company’s industry, market and customers; and
(e) The prevailing rates of return for alternative and comparable investments.

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OTHER CONSIDERATIONS

In addition to the aforementioned business valuation methodologies, BDO also considered the following:

(a) The process undertaken by the Board related to the Proposed Transaction;
(b) The proposed terms of the Proposed Transaction;
(c) The price performance of the Common Shares; and
(d) The relative liquidity of the Common Shares.

THE PROPOSED TERMS OF THE PROPOSED TRANSACTION

The Proposed Transaction is an all cash offer, subject to the terms and conditions as discussed earlier and as stated in the Support Agreement. Consequently, by accepting the Proposed Transaction, the Minority Shareholders do not incur any additional risk associated with future stock market fluctuations.

THE PRICE PERFORMANCE OF THE SHARES

During the past twelve months leading up to the Pre-Announcement Date (June 22, 2020), approximately 100% of the Common Shares that traded did so at a price below the Cash Consideration, with a 52-week high of $0.49 and a 52week low of $0.20.

During the past six months leading up the Pre-Announcement Date, approximately 100% of the Common Shares that traded did so at a price below the Cash Consideration, with a 26-week high of $0.40 and a 26-week low of $0.20.

The average 1-month, 3-months, and 6-months Share price were $0.34, $0.32, and $0.32, respectively. The Common Share price increased by 33.33% to $0.48 on the June 23, 2020 announcement date (“Announcement Date”), whereby it is reasonable to assume that predominantly all of this increase was related to the Proposed Transaction.

THE RELATIVE LIQUIDITY OF THE SHARES

In our view, the Common Shares are relatively thinly traded as compared to the Comparable Public Companies. The total volume of Common Shares traded in the past twelve months to June 22, 2020 was approximately 3.6 million shares, which represents approximately 26.1% of the public float. Further, the Common Shares are not covered by any nationally recognized investment banking equity analysts, which likely has a negative impact on liquidity, extent, and strength of momentum and general market perception.

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VALUATION

Summary of Value

In arriving at its opinion as to the FMV of Common Shares, BDO did not attribute any particular weight to the any of the value ranges or sensitivities set out herein, but rather, BDO made qualitative judgments based upon its professional judgement and experience in rendering such opinions. The following is a summary of the selected range of FMV for the Common Shares.

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Fair Market Value
Common Shares
(CAD 000’s) Low High
Discounted cash flow method 10,000 16,500
Comparable public companies method 9,700 16,400
Precedent M&A transactions method 9,700 16,400
Range of FMV of the Common Shares 9,700 16,500
Range of FMV per Common Share 0.31 0.52
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Valuation Conclusion

Subject to the assumptions, limitations and qualifications set out herein, BDO is of the opinion that the FMV of the Common Shares is between $9.7 million to $16.5 million, as at the Valuation Date.

FAIRNESS OPINION

Approach to Fairness

In arriving at its opinion as to whether the Cash Consideration to be received by the Company pursuant to the Proposed Transaction is fair from a financial point of view to the Minority Shareholders, BDO considered a number of factors including, but not limited to, the fact that the Cash Consideration to be received by the Company pursuant to the Proposed Transaction, in respect of the Common Shares, falls within the range of FMV of the Common Shares

Fairness Opinion Conclusion

Subject to the assumptions, limitations and qualifications set out herein, BDO is of the opinion that, as of the date hereof, the Cash Consideration to be received by the Company pursuant to the Proposed Transaction is fair from a financial point of view to the Minority Shareholders.

Yours very truly,

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BDO Canada LLP

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SCHEDULE “C” SUMMARY OF DISSENT RIGHTS

This section summarizes the provisions of section 190 of the CBCA. This summary is not a comprehensive statement of the procedures to be followed by a dissenting Shareholder (a “ Dissenting Shareholder ”) who seeks payment of the fair value of such Shareholder's Common Shares and is qualified in its entirety by the reference to the full text of Section 190 of the CBCA, which is attached to this Circular as Schedule “D”.

Registered Shareholders who wish to dissent should obtain legal advice and carefully read the provisions of the provisions of section 190 of the CBCA, which are appended hereto at Schedule “D”. Failure to strictly comply with the provisions of Section 190 of the CBCA and to adhere to the procedures established therein may result in the loss of all rights thereunder.

Only registered holders of Common Shares may dissent. Anyone who is a beneficial owner of Common Shares registered in the name of an intermediary (“ Intermediary ”) and who wishes to dissent should be aware that only Registered Shareholders are entitled to exercise Dissent Rights. A Registered Shareholder who holds Common Shares as an Intermediary for one or more beneficial owners, one or more of whom wish to exercise Dissent Rights, must exercise such Dissent Rights on behalf of such holder(s). In such case, the notice of such Shareholder's dissent (a “ Dissent Notice ”) should specify the number of Common Shares held by the Intermediary for such beneficial owner. A Dissenting Shareholder may dissent only with respect to all the Common Shares held on behalf of any one beneficial owner and registered in the name of the Dissenting Shareholder.

Each Registered Shareholder who properly exercises Dissent Rights will be deemed to have transferred his, her or its Common Shares or, in the event that the Registered Shareholder is an Intermediary, the number of Common Shares held on behalf of the Beneficial Shareholder who wishes to exercise Dissent Rights (the “ Dissenting Common Shares ”), to the Company free and clear of any liens, claims and encumbrances, as of the Effective Date, and if it:

(a) ultimately is entitled to be paid fair value for its Dissenting Common Shares, will be entitled to be paid the fair value of such Dissenting Common Shares and will not be entitled to any other payment or consideration (including any payment that would be payable under the Going Private Transaction had it not exercised its Dissent Rights). There can be no assurance that a Dissenting Shareholder will receive consideration for its Dissenting Common Shares of equal value to the Consideration that such Dissenting Shareholder would have received under the Going Private Transaction; or
(b) is ultimately not entitled, for any reason, to be paid fair value for its Dissenting Common Shares, its Common Shares will be subject to the Going Private Transaction, assuming the required Shareholder and regulatory approvals are obtained.

All written objections to the Transaction Resolution (each a “ Dissent Notice ”) must be delivered to the Company do its counsel at the offices of Hong Wilkin Business Law Professional Corporation, Suite 802, 235 Yorkland Blvd., Toronto, Ontario M2J 4Y8, at or prior to the Meeting (as it may be adjourned or postponed from time to time).

The filing of a Dissent Notice does not deprive a Registered Shareholder of the right to vote at the Meeting; however, a Registered Shareholder who has submitted a Dissent Notice and who votes in favour of the Transaction Resolution will no longer be considered a Dissenting Shareholder with respect to Dissenting Common Shares voted in favour of the Transaction Resolution. If such Dissenting Shareholder votes in favour of the Transaction Resolution in respect of a portion of the Common Shares he, she or it holds as an Intermediary on behalf of any one beneficial owner, such vote approving the Transaction Resolution will be deemed to apply to the entirety of the Dissenting Common Shares held in the name of that beneficial owner, given that section 190 of the CBCA provides there is no right of partial dissent. A vote against the Transaction Resolution will not constitute a Dissent Notice.

Within 10 days after the approval of the Transaction Resolution, the Company is required to notify each Dissenting Shareholder that the Transaction Resolution has been approved. Such notice is not required to be sent to a

Registered Shareholder who voted for the Transaction Resolution or who has withdrawn a Dissent Notice previously filed.

A Dissenting Shareholder must, within 20 days after the Dissenting Shareholder receives notice that the Transaction Resolution has been approved or, if the Dissenting Shareholder does not receive such notice, within 20 days after the Dissenting Shareholder learns that the Transaction Resolution has been approved, send a written demand for payment (a “ Demand for Payment ”) containing the Dissenting Shareholder's name and address, the number of Dissenting Common Shares held by the Dissenting Shareholder, and a demand for payment of the fair value of the Dissenting Common Shares. Within 30 days after sending a Demand for Payment, the Dissenting Shareholder must send to the Company c/o its counsel at the offices of Hong Wilkin Business Law Professional Corporation, Suite 802, 235 Yorkland Blvd., Toronto, Ontario M2J 4Y8, the certificates representing the Dissenting Common Shares or to the Depositary by mail at Computershare Investor Services Inc., P.O. Box 7021, 31 Adelaide St E., Toronto, ON M5C 3H2 Attention: Corporate Actions, or by hand or by courier at Computershare Investor Services Inc., 100 University Avenue, 8th Floor, North Tower, Toronto, Ontario M5J 2Y1, Attention: Corporate Actions. Dissenting Shareholders who fail to send the share certificates representing the Dissenting Common Shares forfeit their right to make a claim under section 190 of the CBCA. The Company or the Depositary will endorse on share certificates received from Dissenting Shareholders a notice that the holder is a Dissenting Shareholder under section 190 of the CBCA and will forthwith return the share certificates to the Dissenting Shareholder.

On the filing of a Demand for Payment (and in any event upon the Effective Date), a Dissenting Shareholder ceases to have any rights in respect of its Dissenting Common Shares, other than the right to be paid the fair value of its Dissenting Common Shares as determined pursuant to section 190 of the CBCA, except where, prior to the Effective Date: (i) the Dissenting Shareholder withdraws its Demand for Payment before the Company makes a written offer to pay (an “ Offer to Pay ”) to the Dissenting Shareholder; (ii) an Offer to Pay is not made and the Dissenting Shareholder withdraws its Demand for Payment; or (iii) the Board revokes the Transaction Resolution, in which case the Company will reinstate the Dissenting Shareholder's rights in respect of its Dissenting Common Shares as of the date the Demand for Payment was sent. Pursuant to the Going Private Transaction, in no case will the Company or any other person be required to recognize any Dissenting Shareholder as a Shareholder after the Effective Date, and the names of such Shareholders will be deleted from the list of Registered Shareholders at the Effective Date. In addition to any other restrictions under Section 190 of the CBCA, (i) holders of securities convertible or exercisable for Common Shares; and (ii) Shareholders who voted (or have instructed a proxyholder to vote) in favour of the Transaction Resolution, shall not be entitled to exercise Dissent Rights.

No later than seven (7) days after the later of the Effective Date and the date on which a Demand for Payment of a Dissenting Shareholder is received, as applicable, each Dissenting Shareholder who has sent a Demand for Payment must be sent an Offer to Pay for its Dissenting Common Shares in an amount considered by the Board to be the fair value thereof, accompanied by a statement showing how the fair value was determined. Every Offer to Pay in respect of Dissenting Common Shares must be on the same terms as every other offer to pay in respect of Dissenting Common Shares.

Payment for the Dissenting Common Shares held by a Dissenting Shareholder must be made within 10 days after an Offer to Pay has been accepted by a Dissenting Shareholder, but any such Offer to Pay lapses if an acceptance thereof is not received within 30 days after the Offer to Pay has been made. If an Offer to Pay for the Dissenting Common Shares held by a Dissenting Shareholder is not made, or if a Dissenting Shareholder fails to accept an Offer to Pay that has been made, an application to the Court to fix a fair value for the Dissenting Common Shares held by a Dissenting Shareholder may be made within 50 days after the Effective Date or within such further period as a court may allow.

If no such application is made, a Dissenting Shareholder may apply to the Court for the same purpose within a further period of 20 days or within such further period as a court may allow. A Dissenting Shareholder is not required to give security for costs in such an application.

Upon an application to the Court, all Dissenting Shareholders whose Common Shares have not been purchased will be joined as parties and bound by the decision of the Court, and each affected Dissenting Shareholder shall be notified of the date, place and consequences of the application and of their right to appear and be heard in person or by counsel. Upon any such application to the Court, the Court may determine whether any other person is a

Dissenting Shareholder who should be joined as a party, and the court will then fix a fair value for the Dissenting Common Shares of all such Dissenting Shareholders. The final order of the Court will be rendered against the Company in favour of each Dissenting Shareholder joined as a party and for the amount of the Common Shares held by Dissenting Shareholders as fixed by the Court.

The Court may, in its discretion, allow a reasonable rate of interest on the amount payable to each such Dissenting Shareholder from the Effective Date until the date of payment. Any judicial determination of fair value will result in delay of receipt by a Dissenting Shareholder of consideration for such Dissenting Shareholder's Dissenting Common Shares.

The above is only a summary of the provisions of the CBCA pertaining to Dissent Rights, which are technical and complex. If you are a Shareholder and wish to directly or indirectly exercise Dissent Rights, you should seek your own legal advice as failure to strictly comply with the provisions of the CBCA may prejudice your Dissent Rights.

SCHEDULE “D” TEXT OF SECTION 190 OF THE CBCA

Right to dissent

190 (1) Subject to sections 191 and 241, a holder of shares of any class of a corporation may dissent if the corporation is subject to an order under paragraph 192(4)(d) that affects the holder or if the corporation resolves to:

(a) amend its articles under section 173 or 174 to add, change or remove any provisions restricting or constraining the issue, transfer or ownership of shares of that class;
(b) amend its articles under section 173 to add, change or remove any restriction on the business or businesses that the corporation may carry on;
(c) amalgamate otherwise than under section 184;
(d) be continued under section 188;
(e) sell, lease or exchange all or substantially all its property under subsection 189(3); or
(f) carry out a going-private transaction or a squeeze-out transaction.

Further right

(2) A holder of shares of any class or series of shares entitled to vote under section 176 may dissent if the corporation resolves to amend its articles in a manner described in that section.

If one class of shares

(2.1) The right to dissent described in subsection (2) applies even if there is only one class of shares.

Payment for shares

(3) In addition to any other right the shareholder may have, but subject to subsection (26), a shareholder who complies with this section is entitled, when the action approved by the resolution from which the shareholder dissents or an order made under subsection 192(4) becomes effective, to be paid by the corporation the fair value of the shares in respect of which the shareholder dissents, determined as of the close of business on the day before the resolution was adopted or the order was made.

No partial dissent

(4) A dissenting shareholder may only claim under this section with respect to all the shares of a class held on behalf of any one beneficial owner and registered in the name of the dissenting shareholder.

Objection

(5) A dissenting shareholder shall send to the corporation, at or before any meeting of shareholders at which a resolution referred to in subsection (1) or (2) is to be voted on, a written objection to the resolution, unless the corporation did not give notice to the shareholder of the purpose of the meeting and of their right to dissent.

Notice of resolution

(6) The corporation shall, within ten days after the shareholders adopt the resolution, send to each shareholder who has filed the objection referred to in subsection (5) notice that the resolution has been adopted, but such notice is not required to be sent to any shareholder who voted for the resolution or who has withdrawn their objection.

Demand for payment

(7) A dissenting shareholder shall, within twenty days after receiving a notice under subsection (6) or, if the shareholder does not receive such notice, within twenty days after learning that the resolution has been adopted, send to the corporation a written notice containing

(a) the shareholder’s name and address;
(b) the number and class of shares in respect of which the shareholder dissents; and
(c) a demand for payment of the fair value of such shares.

Share certificate

(8) A dissenting shareholder shall, within thirty days after sending a notice under subsection (7), send the certificates representing the shares in respect of which the shareholder dissents to the corporation or its transfer agent.

Forfeiture

(9) A dissenting shareholder who fails to comply with subsection (8) has no right to make a claim under this section.

Endorsing certificate

(10) A corporation or its transfer agent shall endorse on any share certificate received under subsection (8) a notice that the holder is a dissenting shareholder under this section and shall forthwith return the share certificates to the dissenting shareholder.

Suspension of rights

(11) On sending a notice under subsection (7), a dissenting shareholder ceases to have any rights as a shareholder other than to be paid the fair value of their shares as determined under this section except where

(a) the shareholder withdraws that notice before the corporation makes an offer under subsection (12),
(b) the corporation fails to make an offer in accordance with subsection (12) and the shareholder withdraws the notice, or
(c) the directors revoke a resolution to amend the articles under subsection 173(2) or 174(5), terminate an amalgamation agreement under subsection 183(6) or an application for continuance under subsection 188(6), or abandon a sale, lease or exchange under subsection 189(9),

in which case the shareholder’s rights are reinstated as of the date the notice was sent.

Offer to pay

(12) A corporation shall, not later than seven days after the later of the day on which the action approved by the resolution is effective or the day the corporation received the notice referred to in subsection (7), send to each dissenting shareholder who has sent such notice

(a) a written offer to pay for their shares in an amount considered by the directors of the corporation to be the fair value, accompanied by a statement showing how the fair value was determined; or
(b) if subsection (26) applies, a notification that it is unable lawfully to pay dissenting shareholders for their shares.

Same terms

(13) Every offer made under subsection (12) for shares of the same class or series shall be on the same terms.

Payment

(14) Subject to subsection (26), a corporation shall pay for the shares of a dissenting shareholder within ten days after an offer made under subsection (12) has been accepted, but any such offer lapses if the corporation does not receive an acceptance thereof within thirty days after the offer has been made.

Corporation may apply to court

(15) Where a corporation fails to make an offer under subsection (12), or if a dissenting shareholder fails to accept an offer, the corporation may, within fifty days after the action approved by the resolution is effective or within such further period as a court may allow, apply to a court to fix a fair value for the shares of any dissenting shareholder.

Shareholder application to court

(16) If a corporation fails to apply to a court under subsection (15), a dissenting shareholder may apply to a court for the same purpose within a further period of twenty days or within such further period as a court may allow.

Venue

(17) An application under subsection (15) or (16) shall be made to a court having jurisdiction in the place where the corporation has its registered office or in the province where the dissenting shareholder resides if the corporation carries on business in that province.

No security for costs

(18) A dissenting shareholder is not required to give security for costs in an application made under subsection (15) or (16).

Parties

(19) On an application to a court under subsection (15) or (16),
(a) all dissenting shareholders whose shares have not been purchased by the corporation shall be joined as parties and are bound by the decision of the court; and

(b) the corporation shall notify each affected dissenting shareholder of the date, place and consequences of the application and of their right to appear and be heard in person or by counsel.

Powers of court

(20) On an application to a court under subsection (15) or (16), the court may determine whether any other person is a dissenting shareholder who should be joined as a party, and the court shall then fix a fair value for the shares of all dissenting shareholders.

Appraisers

(21) A court may in its discretion appoint one or more appraisers to assist the court to fix a fair value for the shares of the dissenting shareholders.

Final order

(22) The final order of a court shall be rendered against the corporation in favour of each dissenting shareholder and for the amount of the shares as fixed by the court.

Interest

(23) A court may in its discretion allow a reasonable rate of interest on the amount payable to each dissenting shareholder from the date the action approved by the resolution is effective until the date of payment.

Notice that subsection (26) applies

(24) If subsection (26) applies, the corporation shall, within ten days after the pronouncement of an order under subsection (22), notify each dissenting shareholder that it is unable lawfully to pay dissenting shareholders for their shares.

Effect where subsection (26) applies

(25) If subsection (26) applies, a dissenting shareholder, by written notice delivered to the corporation within thirty days after receiving a notice under subsection (24), may

(a) withdraw their notice of dissent, in which case the corporation is deemed to consent to the withdrawal and the shareholder is reinstated to their full rights as a shareholder; or
(b) retain a status as a claimant against the corporation, to be paid as soon as the corporation is lawfully able to do so or, in a liquidation, to be ranked subordinate to the rights of creditors of the corporation but in priority to its shareholders

Limitation

(26) A corporation shall not make a payment to a dissenting shareholder under this section if there are reasonable grounds for believing that

(a) the corporation is or would after the payment be unable to pay its liabilities as they become due; or
(b) the realizable value of the corporation’s assets would thereby be less than the aggregate of its liabilities.

SCHEDULE “E” SUPPORT AGREEMENT

THIS INSIDER SUPPORT AGREEMENT is made this 23[rd] day of June, 2020.

BETWEEN:

BOYUAN CONSTRUCTION GROUP, INC., a corporation governed under the provisions of the Canada Business Corporations Act (hereinafter referred to as the " Corporation ")

- AND -

MAINWAY MANAGEMENT LIMITED , a corporation incorporated pursuant to the laws of the British Virgin Islands (hereinafter referred to as the " Interested Shareholder ")

(each of the Corporation and Interested Shareholder are referred to as a " Party " and collectively, the " Parties ")

RECITALS:

A. Defined terms in these recitals have the meaning ascribed to them in the body of this Agreement;
B. The Corporation wishes to proceed with the Going Private Transaction, which transaction is intended to be carried out by way of the Consolidation;
C. In order to proceed with the Consolidation the Corporation requires the approval of its Shareholders (including the approval of its Minority Shareholders) to the Amendment Resolution.
D. The Corporation has agreed, pursuant to this Agreement, to call the Meeting in order for Shareholders to consider and, if deemed advisable, approve the Amendment Resolution.
E. It is intended that as soon as practicable following the Effective Time, the Redemption will proceed and immediately following the Redemption the Interested Shareholder will be the only remaining Shareholder.
F. The Parties desire to enter into this Agreement in order to establish, among other things, the terms upon which the Interested Shareholder will support the Amendment, the Consolidation and the Going Private Transaction.

NOW THEREFORE in consideration of the mutual covenants and agreements contained herein and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Parties agree as follows:

1. INTERPRETATION

In this Agreement, unless there is something in the context or subject matter inconsistent therewith, the following defined terms shall have the meanings hereinafter set forth:

" affiliate " has the meaning ascribed to that term in the Securities Act (Ontario);

" Agreement " means this support agreement, and the expressions " hereof ", " herein ", " hereto ", " hereunder ", " hereby " and similar expressions refer to this support agreement;

" Amendment " has the meaning ascribed thereto in Section 2.1(a);

" Amendment Resolution " has the meaning ascribed thereto in Section 2.1(b);

" Articles of Incorporation " means the articles of incorporation of the Corporation filed on May 4, 2007, including any amendments thereto;

" associate " has the meaning ascribed to that term in the Securities Act (Ontario);

" Board " means the board of directors of the Corporation;

" Business Day " means any day on which commercial banks are generally open for business in Beijing, China and Toronto, Ontario, other than a Saturday, Sunday or a day observed as a holiday in Beijing, China or Toronto, Ontario under applicable laws;

" CBCA " means the Canada Business Corporations Act ;

" Circular " means the management information circular of the Corporation to be prepared and delivered to Shareholders in connection with the Meeting and all amendments or supplements thereto, if any, together with any other required documents;

" Completion Date " means the date on which the Redemption Funds have been forwarded to the Depositary and the Depositary has been instructed or caused by the Corporation, in accordance with Sections 2.2(a)(iii) and 3.1(b)(i) to deliver the Consideration to the Minority Shareholders;

" Consideration " means C$0.50 per pre-Consolidation Share, to be paid by the Corporation to the Minority Shareholders (other than a Dissenting Shareholder) pursuant to the Redemption;

" Consolidation " has the meaning ascribed thereto in Section 2.1(a);

" Corporation " means Boyuan Construction Group, Inc.;

" Depositary " means Computershare Trust Company of Canada or such other person to act as depositary for the Shares that the Parties may agree in writing;

" Depositary Agreement " has the meaning ascribed thereto in Section 3.1(b)(v);

" Dissent Rights " means the rights of dissent in respect of the Amendment set out in Section 190 of the CBCA;

" Dissenting Shareholder " means a registered Shareholder who has validly exercised his, her or its dissent rights in respect of the Amendment, under and strictly in accordance with the provisions of Section 190 of the CBCA;

" Effective Date " means, with respect to both the Amendment and the Consolidation, the date that the Amendment is filed with the Director under the CBCA;

" Effective Time " means, with respect to both the Amendment and the Consolidation the time on the Effective Date when the Amendment is filed with the Director under the CBCA;

" Going Private Transaction " means the going private transaction contemplated by this Agreement which includes the Amendment, the Consolidation and the Redemption, and after the Completion Date, the applications to delist the Shares on the TSX and to cease to be a reporting issuer in all of the provinces;

" Interested Shareholder " has the meaning ascribed to it in the recitals;

" Letter of Transmittal " means the letter of transmittal to be delivered to holders of Shares on the Record Date, together with the Circular, in connection with the Meeting;

" Meeting " means the annual general and special meeting of Shareholders of the Corporation called for the purposes of, inter alia , considering and voting on the Amendment Resolution;

" Meeting Date " means August 21, 2020, unless the Meeting is adjourned, delayed or postponed in accordance with Section 3.1(a)(ii) in which case " Meeting Date " shall refer to the date on which the Meeting is held;

" Minority Shareholders " means all of the holders of Shares, other than the Interested Shareholder;

" MI 61-101 " means Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ;

" Non-Dissenting Minority Shareholders " has the meaning ascribed thereto in Section 2.2(a)(iv)(1);

" Outside Date " means December 31, 2020;

" Record Date " means the record date for the Meeting, such date to be not later than July 20, 2020;

" Redemption " has the meaning ascribed thereto in Section 2.1(a);

" Redemption Funds " means an amount equal to the aggregate Consideration to be paid to the Minority Shareholders in accordance with the Redemption;

" Redemption Resolution " has the meaning ascribed thereto in Section 2.2(a)(ii);

" Register of Shareholders " means the register of Shareholders kept by the Registrar and Transfer Agent;

" Registrar and Transfer Agent " means Computershare Trust Company of Canada;

" Shares " means common shares in the capital of the Corporation;

" Shareholders " means persons listed in the Register of Shareholders as the holders of Shares;

" Special Committee " means the special committee of the Board comprised of Messrs. Francis Leong, Jack Duffy, Lixin Fang and Ms. Manhong Liu, which was established on June 2, 2020, in order to consider, inter alia, the proposed Going Private Transaction;

" Subject Shares " means the aggregate of 17,056,144 Shares beneficially owned or over which control or direction is exercised, directly or indirectly, by the Interested Shareholder; and

“ TSX ” means the Toronto Stock Exchange.

2. THE AMENDMENT, THE CONSOLIDATION, THE REDEMPTION AND THE POST-CONSOLIDATION STEPS

2.1 Terms of the Amendment

(a) Subject to satisfaction or, if capable of waiver, waiver of the terms and conditions set out in this Agreement, as at the Effective Time of the Amendment, the Articles of Incorporation will be amended (the " Amendment ") so as to consolidate the Corporation's issued and outstanding Shares at a rate of 8,000,000 preConsolidation Shares for each one (1) post-Consolidation Share (the " Consolidation "), and Minority Shareholders are entitled to receive from the Corporation cash compensation for all fractional Shares resulting from the Consolidation at C$0.50 per each pre-Consolidation Share held (the " Redemption ").
(b) The Parties acknowledge that the resolution required to approve the Amendment and the Consolidation (the " Amendment Resolution ") must be approved by:
(i) not less than two-thirds of the votes cast in favour thereof by Shareholders attending the Meeting in person or represented by proxy; and

(ii) a "majority of the minority" of the votes cast in favour thereof, for the purposes of MI 61-101, by Minority Shareholders attending the Meeting in person or represented by proxy.
(c) The text of the Amendment Resolution to be voted on at the Meeting is set out in Schedule "A" attached hereto.

2.2 Terms of the Redemption

(a) Subject to satisfaction or, if capable of waiver, waiver of the terms and conditions set out in this Agreement:
(i) not less than ten (10) Business Days prior to the Meeting Date, the Corporation shall:
- (1) notify the Interested Shareholder that the Corporation has sufficient funds to set aside not less than two (2) Business Days prior to the Meeting Date specifically to pay the full Redemption Funds; or
- (2) make a written request to the Interested Shareholder for delivery of the Redemption Funds or a portion thereof, if any, required by the Corporation to ensure it has sufficient funds to pay for the payment of fractional Shares resulting from the Redemption held by Minority Shareholders in accordance with the terms contemplated herein, and not less than two (2) Business Days prior to the Meeting Date, the Interested Shareholder shall deliver the Redemption Funds or such portion thereof, if any (by way of loan repayable in cash on the terms and conditions to be determined by the Corporation and the Interested Shareholder) to Corporation or, if directed by the Corporation, to the Depository;
(ii) not less than two Business Days prior to the Meeting Date the Board shall pass a resolution to approve the Redemption (the " Redemption Resolution "), which Redemption Resolution shall specify that the Redemption shall become effective after, and only in the case where: (1) the Amendment Resolution is approved by the Shareholders and Minority Shareholders at the Meeting;
(iii) as soon as practicable prior to the Effective Date the Corporation will forward, or cause to be forwarded, the Redemption Funds to the Depositary and cause the Depositary to: (1) deliver the Consideration, in accordance with the terms of the Depositary Agreement (less all applicable withholding tax, if any), to the Minority Shareholders who tender their Shares to the Depositary accompanied by a duly executed Letter of Transmittal; and (2) remove all such Minority Shareholders (including relevant Dissenting Shareholders) from the Register of Shareholders, with the result that the

Interested Shareholder shall as of the Completion Date be the only holders of Shares; and

(iv) as and from the Effective Time, no Minority Shareholder shall be entitled to, or exercise, any of the rights of a Shareholder in respect of any Share other than:
(1) in the case of Minority Shareholders (the " Non-Dissenting Minority Shareholders ") that are not Dissenting Shareholders, the right to receive an amount determined by multiplying the Consideration by the number of Shares held by such Shareholders immediately prior to the Effective Time (less all applicable withholding tax, if any), such payment to be made without interest or deduction by the Depositary as soon as practicable following the Effective Time and the performance by the Corporation of its required obligations contemplated under Section 2.2(a)(iii). Such Non-Dissenting Minority Shareholders shall be entitled to receive payment of the relevant amount referred to above following the presentation and surrender to the Depositary for cancellation of the certificate(s) representing the Shares held by them immediately prior to the Effective Time of the Amendment, along with a properly executed Letter of Transmittal; and
(2) in the case of a Dissenting Shareholder, such Shareholder shall only have the right to be paid the fair value for their Shares in accordance with the provisions of Section 190 of the CBCA.

2.3 Post-Consolidation Steps

(a) Should the Amendment and the Consolidation become effective, as soon as practicable after the Completion Date, the Corporation shall:
(i) make application to the TSX to delist its Shares; and
(ii) make application to cease to be a reporting issuer in all of the provinces of Canada.

3. COVENANTS

3.1 Covenants of the Corporation

(a) The Corporation covenants and agrees that from the date hereof until the earlier of the Completion Date and termination of this Agreement, except as otherwise expressly permitted or specifically provided by this Agreement or as is otherwise required by applicable law:

(i) not to take any action that would render, or may reasonably be expected to render, any representation or warranty made by it in this Agreement untrue in any material respect at any time prior to the Completion Date;
(ii) not to adjourn, delay or postpone the Meeting or the Meeting Date without the prior written consent of the Interested Shareholder unless: (i) required by applicable law or the rules of the TSX; (ii) required by a court of competent jurisdiction or required by or as a result of any requirements imposed by any securities regulatory authority having jurisdiction over the Corporation; or (iii) the postponement is due to delay in regulatory review, provided that any adjournment, delay or postponement permitted pursuant to (i) and (ii) above shall be limited to the minimum length of time necessary; and
(iii) not to issue any additional Shares or any securities which may be exercised for or converted into Shares (other than Shares issuable pursuant to the exercise of previously issued convertible securities of the Corporation outstanding on the date hereof).
(b) The Corporation shall use its commercially reasonable efforts to perform all obligations required to be performed by it under this Agreement and to perform all such other acts as may be necessary in order to consummate the transactions contemplated by this Agreement, and without limiting the generality of the foregoing, the Corporation shall:
(i) if not already done so, as promptly as possible after the execution of this Agreement (i) set and publish notice of the Record Date; and (ii) in compliance with all applicable laws, prepare the Circular and provide the Interested Shareholder with reasonable opportunity to review and comment on drafts thereof, shall include all of the Interested Shareholder's reasonable comments thereon, and shall ensure that the Circular provides the Shareholders (including the Minority Shareholders) with information in sufficient detail to permit them to form a reasoned judgment concerning the matters before them, and the Circular shall include the unanimous determination of the Special Committee that the Consolidation is fair to the Minority Shareholders, that the Going Private Transaction as a whole is in the best interests of the Corporation and the Minority Shareholders, and include the unanimous recommendation of the Board, subject to the disclosure of interests and abstentions by all interested directors, that the Shareholders and Minority Shareholders vote in favour of the Amendment Resolution;
(ii) use its commercially reasonable efforts to mail to the Shareholders the Circular and such other documentation required in order to convene and hold the Meeting by the Meeting Date in compliance with all applicable laws;

(iii) use its commercially reasonable efforts to fulfill or cause to be fulfilled the conditions relating to it set forth in Section 5 as soon as reasonably practicable;
(iv) conduct and hold the Meeting in accordance with the by-laws of the Corporation and as required by law;
(v) prior to the date of mailing of the Circular, appoint the Depositary and enter into a depositary agreement with the Depositary in form and substance satisfactory to the Interested Shareholder acting reasonably (the " Depositary Agreement ");
(vi) make all necessary filings and applications under Canadian federal and provincial laws and regulations required to be made on the part of the Corporation in connection with the Going Private Transaction and the Meeting and take all commercially reasonable action necessary to be in compliance with such laws and regulations;
(vii) do all things necessary to implement the Amendment, the Consolidation and the Redemption, and cooperate with all reasonable requests of the Interested Shareholder in respect thereof;
(viii) do all things necessary to obtain the approval of the Going Private Transaction from the TSX;
(ix) consult with the Interested Shareholder on all correspondence and dealings with the TSX and securities regulators;
(x) not less than ten (10) Business Days prior to the Meeting Date, either notify the Interested Shareholder that the Corporation has sufficient funds to set aside not less than two (2) Business Days prior to the Meeting Date specifically to pay the full Redemption Funds, or make a written request to the Interested Shareholder for delivery of the Redemption Funds or a portion thereof, if required, in each case to ensure the Corporation has sufficient funds to pay for the Redemption in accordance with the terms contemplated herein;
(xi) not less than two Business Days prior to the Meeting Date, convene a meeting of the Board to consider, and if thought fit, pass the Redemption Resolution;
(xii) as soon as practicable prior to the Effective Date, forward, or cause to be forwarded, the Redemption Funds to the Depositary and cause the Depositary to: (1) deliver the Consideration, in accordance with the terms of the Depositary Agreement (less applicable withholding tax, if any), to the Minority Shareholders who tender their Shares to the Depositary

accompanied by a duly executed Letter of Transmittal; and (2) remove all such Minority Shareholders from the Register of Shareholders;

(xiii) take such steps as are necessary to ensure that the Corporation has sufficient funds to enable the Corporation to (i) deliver the Redemption Funds required by Section 3.1(b)(xi) hereof, and (ii) satisfy the tests in Section 36(2) of the CBCA; and
(xiv) as soon as practicable after the Completion Date, the Corporation shall: (i) make application to the TSX to (i) delist its Shares, and (ii) make application to cease to be a reporting issuer in all of the provinces of Canada.

3.2 Covenants of the Interested Shareholder

(a) The Interested Shareholder covenants and agrees that from the date hereof until the earlier of the Completion Date or termination of this Agreement, except as otherwise expressly permitted or specifically provided by this Agreement:
(i) not to take or permit any action that would render, or may reasonably be expected to render, any representation or warranty made by it in this Agreement untrue in any material respect at any time prior to the Completion Date;
(ii) to provide the Corporation immediate notice of any additional Shares that the Interested Shareholder may hereafter become the beneficial owner of or exercise control or direction over; and
(iii) use its commercially reasonable efforts not to permit the sale or gifting of any of the Subject Shares.
(b) The Interested Shareholder shall use commercially reasonable efforts to perform all obligations required to be performed by it under this Agreement and to perform all such other acts as may be necessary in order to consummate the transactions contemplated by this Agreement, and without limiting the generality of the foregoing, the Interested Shareholder shall:
(i) use commercially reasonable efforts to fulfill or cause to be fulfilled of the conditions relating to it set forth in Section 5 herein as soon as reasonably practicable;
(ii) cause all of the Subject Shares to be voted in favour of the Amendment Resolution at the Meeting;
(iii) not to withdraw any proxies (if any) delivered to the Corporation, the Registrar and Transfer Agent or the Depositary in connection with the Meeting;

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(iv) provide the Corporation with all relevant information concerning it for inclusion in the Circular to enable the Corporation to comply with applicable laws; and
(v) subject to receiving a written request of the Corporation as contemplated under Section 3.1(b)(x), deliver the Redemption Funds or a portion thereof, to the Corporation or, if directed by the Corporation, to the Depository, not less than two (2) Business Days prior to the Meeting Date.

4. REPRESENTATIONS AND WARRANTIES

4.1 Representations and Warranties of the Corporation

The Corporation represents and warrants to and with the Interested Shareholder as follows and acknowledges that the Interested Shareholder is relying upon such representations and warranties in connection with the matters contemplated by this Agreement:

(a) the Board, having considered the favourable recommendation of the Special Committee, has, subject to the disclosure of interests and abstentions by all interested directors, unanimously determined that the Consideration offered to the Minority Shareholders pursuant to the Consolidation is fair and that the Going Private Transaction as a whole is in the best interests of the Corporation and its Minority Shareholders, and has, subject to the disclosure of interests and abstentions by all interested directors, unanimously approved the Going Private Transaction and the entering into of this Agreement, and has resolved to unanimously recommend that the Shareholders and Minority Shareholders vote in favour of the Amendment;
(b) the Corporation has sufficient funds, or adequate arrangements for financing are in place to ensure that it will have sufficient funds, to deliver the Redemption Funds to the Registrar and Transfer Agent not less than two Business Days prior to the Meeting Date;
(c) the payment of the aggregate Consideration payable in connection with the Redemption is, and on the Effective Date and on the Completion Date shall be, permitted by all applicable laws, including Section 36(2) of the CBCA;
(d) the Corporation has, in respect of the Going Private Transaction contemplated hereunder, filed, or will file prior to the Completion Date, all documents required to be filed under applicable laws and has filed with securities regulators in each such jurisdiction all documents required to be filed under applicable Canadian securities laws (it being understood that no representation or warranty is being given as to the timeliness of any such filing);
(e) the Corporation has the corporate power and authority to enter into this Agreement and to perform its obligations hereunder;

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(f) the Corporation has been duly incorporated, formed and organized and is a validly existing company under the laws of the jurisdiction of its incorporation or formation, as applicable and has the corporate power and authority to own or lease its property and assets and to carry on any business currently conducted by it; and
(g) other than as contemplated herein, no consent, waiver, approval, authorization, order, exemption, registration, license or declaration of or by, or filing with, or notification to any governmental authority which has not been made or obtained, is required to be made or obtained by the Corporation in connection with the execution, delivery and performance of this Agreement or the completion of the Going Private Transaction.

4.2 Representations and Warranties of the Interested Shareholder

The Interested Shareholder hereby represents and warrants to and with the Corporation as follows and acknowledges that the Corporation is relying upon such representations and warranties in connection with the matters contemplated by this Agreement:

(a) as of the date hereof, the Subject Shares represent all of the Shares beneficially owned, or over which control and direction is exercised, by the Interested Shareholder;
(b) the Interested Shareholder has the sole right to vote, or direct the sale and voting of the Subject Shares;
(c) no individual, corporation or other legal entity has any agreement to which any Interested Shareholder is a party, or any right or privilege capable of becoming an agreement or option to which any Interested Shareholder is a party, for the purchase, acquisition or transfer of any of the Subject Shares or any interest therein or right thereto;
(d) the Interested Shareholder has the requisite power and authority to enter into this Agreement and to perform its obligations hereunder;
(e) the execution and delivery of this Agreement and each and every agreement or document to be executed and delivered hereunder by the Interested Shareholder, and the consummation of transactions contemplated herein will not, as a result of its involvement, violate nor be in conflict with any provision of any material agreement or instrument to which the Interested Shareholder is a party or is bound or, to the best of their respective knowledge, information and belief, any judgment, decree, order, statute, rule or regulation applicable to such Party;
(f) this Agreement has been duly executed and delivered by the Interested Shareholder and all documents required hereunder to be executed and delivered by the Interested Shareholder shall have been duly executed and delivered and this Agreement does,

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and such documents will, constitute legal, valid and binding obligations of the Interested Shareholder enforceable in accordance with their respective terms; and

(g) no consent, waiver, approval, authorization, order, exemption, registration, license or declaration of or by, or filing with, or notification to any governmental authority which has not been made or obtained is required to be made or obtained by the Interested Shareholder in connection with the execution, delivery and performance of this Agreement or the completion of the Going Private Transaction.

5. CONDITIONS PRECEDENT

5.1 Conditions to Obligations of the Corporation

The obligations of the Corporation to complete the transactions as contemplated by this Agreement, are subject to the satisfaction, at or before the applicable time of the following conditions:

(a) the Amendment Resolution shall have been approved by:
(i) not less than two-thirds of the votes cast in respect thereof by Shareholders attending the Meeting in person or represented by proxy; and
(ii) a "majority of the minority" of the votes cast in respect thereof, for the purposes of MI 61-101, by Minority Shareholders attending the Meeting in person or represented by proxy;
(b) each of the acts and undertakings of the Interested Shareholder to be performed pursuant to the terms of this Agreement shall have been duly and timely performed in all material respects;
(c) except as affected by the transactions contemplated by this Agreement, the representations and warranties of the Interested Shareholder contained in this Agreement shall be true in all material respects immediately prior to the Completion Date with the same effect as though such representations and warranties had been made at and as of such date; and
(d) the Corporation has received all necessary regulatory approvals and/or third party consents to complete the Going Private Transaction, including the approval of the Going Private Transaction from the TSX.

The conditions in this Section 5.1 are for the exclusive benefit of the Corporation and may be asserted by the Corporation regardless of the circumstances or may be waived by the Corporation in its sole discretion, in whole or in part, at any time and from time to time without prejudice to any other rights which the Corporation may have.

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5.2 Conditions to Obligations of the Interested Shareholder

The obligations of the Interested Shareholder to complete the transactions as contemplated by this Agreement, are subject to the satisfaction, at or before applicable time of the following conditions:

(a) each of the acts and undertakings of the Corporation to be performed pursuant to the terms of this Agreement shall have been duly performed in all material respects; and
(b) except as affected by the transactions contemplated by this Agreement, the representations and warranties of the Corporation contained in this Agreement shall be true in all material respects immediately prior to the Completion Date, with the same effect as though such representations and warranties had been made at and as of such date.

The conditions in this Section 5.2 are for the exclusive benefit of the Interested Shareholder and may be asserted by the Interested Shareholder regardless of the circumstances or may be waived by the Interested Shareholder in their sole discretion, in whole or in part, at any time and from time to time without prejudice to any other rights which the Interested Shareholder may have.

6. MISCELLANEOUS

6.1 Amendment

This Agreement may, at any time and from time to time before or after the holding of the Meeting, be amended by written agreement of the Parties hereto without, subject to applicable law, further notice to or authorization on the part of the Shareholders, and any such amendment may, without limitation:

(a) change the time for performance of any of the obligations or acts of the Parties hereto;
(b) waive any inaccuracies or modify any representation or warranty contained herein or in any document delivered pursuant hereto;
(c) waive compliance with or modify any of the covenants herein contained and waive or modify performance of any of the obligations of the Parties hereto; or
(d) waive compliance with or modify any other conditions precedent contained herein,

provided that no amendment shall be made to the amount of Consideration without further authorization of the Shareholders in accordance with applicable law.

6.2 Termination

(a) This Agreement may, prior to the Effective Time, be terminated by mutual written agreement of the Parties without further action on the part of the Shareholders;

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(b) This Agreement shall terminate automatically if the Amendment is not approved by the Shareholders at the Meeting in the manner set forth in Section 5.1;
(c) Notwithstanding any other rights contained herein, this Agreement may be terminated by either Party (the " Terminating Party ") upon written notice to the other Party if a condition precedent of the Terminating Party’s obligations set forth in Section 5 shall not have been satisfied on or before the date required for the satisfaction thereof, provided that the failure to so satisfy is not caused by the fault of the Terminating Party;
(d) This Agreement may be terminated by the Interested Shareholder if the Meeting is adjourned, delayed or postponed to a date that is on or after the Outside Date or the Completion Date does not occur on or before the Outside Date, provided that the Interested Shareholder are not in default under this Agreement; or
(e) This Agreement may be terminated by either Party if the Completion Date does not occur on or before the Outside Date.

The Parties hereto acknowledge and agree that Section 6.2 shall survive the termination and expiration of this Agreement and continue in full force and effect following any termination or expiration of this Agreement.

6.3 Expenses

Each Party shall pay all fees, costs and expenses incurred by such Party in connection with this Agreement, the Consolidation and the Redemption and all related matters.

6.4 Fiduciary Duties of Directors

No provision of this Agreement shall require the Corporation to cause any of its directors to take any action, or refrain from taking any action, that would prevent such individual from fulfilling his fiduciary obligations as a director of the Corporation. The foregoing shall not be interpreted to diminish, limit, restrict or otherwise affect in any way any covenant or agreement of the Corporation under this Agreement or be construed as a forgiveness or waiver of any breach.

6.5 Governing Laws

This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein.

6.6 Further Assurances

Each Party hereto shall, from time to time, and at all times hereafter, at the request of the other Party hereto, but without further consideration, do all such further acts and execute and deliver all such further documents and instruments as shall be reasonably required in order to fully perform and carry out the terms and intent hereof.

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6.7 Entire Agreement

This Agreement constitutes the entire agreement among the Parties and supersedes all prior agreements, representations, and understandings, whether oral or written, between such Parties with respect to the subject matter hereof. This Agreement may be amended only by written instrument executed by all of the Parties hereto.

6.8 Currency

All sums of money referred to in this Agreement, unless otherwise specified herein, are expressed in Canadian dollars.

6.9 No Assignment

This Agreement may not be assigned by either Party without the prior written consent of the other Party. Subject to the foregoing, this Agreement shall enure to the benefit of and be binding upon the Parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.

6.10 Waiver

The failure of any Party to enforce at any time any of the provisions of this Agreement or any of its rights in respect thereto or to insist upon strict adherence to any term of this Agreement shall not be considered to be a waiver of such provision, right or term or in any way to affect the validity of this Agreement or deprive the applicable Party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement. The exercise by any Party of any of its rights provided by this Agreement shall not preclude or prejudice such Party from exercising any other right it may have under this Agreement, notwithstanding any previous action or proceeding taken by it hereunder. Any waiver by any Party of any of the provisions of this Agreement shall be effective only if in writing and signed by a duly authorized representative of such Party.

6.11 Notices

All notices and other communications which may or are required to be given pursuant to any provision of this Agreement shall be given or made in writing and shall be deemed to be validly given if served personally or by telecopy, in each case addressed to the particular party at:

(a) If to the Corporation:

Boyuan Construction Group, Inc. Jin Hui Plaza, No. 500 Matang Road Jiaxing City, Zhejiang P.R.C. 314000

Attention: Paul Law Email: [email protected]

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with a copy to:

Hong Wilkin Business Law Professional Corporation 235 Yorkland Blvd., Suite 802 Toronto, Ontario, Canada M2J 4Y8

Attention: Judith Hong Wilkin Email : [email protected]

(b) If to the Interested Shareholder: Mainway Management Limited Jin Hui Plaza, No. 500 Matang Road Jiaxing City, Zhejiang P.R.C. 314000 Attention: Tang Wei Email: [email protected]

[Remainder of Page Intentionally Left Blank]

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6.12 Execution and Counterparts

This Agreement may be executed by the Parties in counterpart and may be executed and delivered by email and all such counterparts and electronically signed copies shall together constitute one and the same agreement.

IN WITNESS WHEREOF , this Agreement been executed as of the date first above written.

BOYUAN CONSTRUCTION GROUP, INC.

Per: Signed “Paul Law” Paul Law, CFO

MAINWAY MANAGEMENT LTD.

Per: Signed “Tang Wei” Tang Wei, Director

SCHEDULE “E” SUPPORT AGREEMENT

SCHEDULE A

Special Resolution

BE IT RESOLVED AS A SPECIAL RESOLUTION THAT the Corporation is hereby authorized and directed to amend its articles as follows:

(a) The articles of the Corporation are amended to change each issued and outstanding 8,000,000 common shares of the Corporation into one (1) issued and outstanding common share of the Corporation (the " Consolidation "), effective on the date (the " Consolidation Date ") on which the articles of amendment is filed with the Director under the Canada Business Corporations Act (the " CBCA ").
(b) If the Consolidation would otherwise result in the issuance of a fractional share, no fractional share will be issued but rather the shareholder holding less than one (1) whole common share following the Consolidation shall be entitled to receive from the Corporation redemption proceeds of C$0.50 per each pre-Consolidation common share (" Redemption Proceeds ") and all such fractional shares shall be redeemed by the Corporation and cancelled (the " Redemption ").
(c) The Redemption in paragraph (b) above will be deemed effective at the time and on the date the Directors may determine (the " Redemption Date "), provided that such Redemption Date shall not be earlier than the date the relevant resolution of the Directors is passed.
(d) As and from the Consolidation Date on which the Consolidation of any common shares of the Corporation is effected, each common shareholder holding less than one (1) whole post-Consolidation common share shall cease to be entitled to any rights in respect of such common shares, including any right to participate in the profits of the Corporation, other than his, her or its right to receive Redemption Proceeds from the Corporation in the Redemption (or his, her or its right as a dissenting shareholder under and subject to section 190 of the CBCA, to receive fair value for his, her or its redeemed common shares) and accordingly his, her or its name shall be removed as a shareholder from the records of the Corporation with respect to the fractional post-Consolidation common shares so redeemed on and from the Consolidation Date.
(e) Subject to the Directors’ discretion to determine the terms and manner of Redemption, Redemption Proceeds shall be paid without interest, as soon as reasonably practicable following the Consolidation Date.
(f) If a common shareholder who is entitled to receive Redemption Proceeds pursuant to subparagraph (b) hereof fails to satisfy any relevant requirements (including without limitation, providing evidence of ownership and completed letters of transmittal) of the Directors, his entitlement shall lapse on the second anniversary of the Consolidation Date. Upon a shareholder’s entitlement having lapsed in

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accordance with this paragraph (d), such shareholder will be deemed to have donated and forfeited to the Corporation or its successor any such Redemption Proceeds, net of any applicable withholding or other taxes, held in trust for such shareholder and any certificate representing the common shares formerly held by such shareholder will cease to represent a claim of any nature whatsoever and will be deemed to have been surrendered to the Corporation and cancelled.

(g) Any officer or director of the Corporation is authorized and directed on behalf of the Corporation to file articles of amendment pursuant to the CBCA and to execute all documents and to take any action which, in the opinion of that person, is necessary or desirable to give effect to this special resolution.
(h) Notwithstanding the foregoing, the Directors are hereby authorized in their sole direction to revoke this special resolution before it is acted upon without further approval of the shareholders of the Corporation.

SCHEDULE “F” BOYUAN CONSTRUCTION GROUP, INC.

AMENDED AUDIT COMMITTEE CHARTER

(Amended as of December 15, 2017)

General

The Audit Committee is a committee of the Board of Directors (the “ Board ”) of Boyuan Construction Group, Inc. (the “ Corporation ”) to which the Board delegates its responsibility for oversight of the financial reporting process.

Responsibilities of the Audit Committee include:

Oversee the financial reporting process to ensure reliable, clear, and accurate financial reporting to the shareholders;
Assist the Board to properly and fully discharge its responsibilities;
Strengthen the role of the Board by facilitating in depth discussions between directors, management and external auditors;
Evaluate the independent auditor's qualifications, performance and independence;
Facilitate the independence of the independent auditor by pre-approving all auditing and permitted non-audit services performed by the Corporation’s external audit firm;
Resolve any disagreements between management and the independent auditor regarding financial reporting and internal control related matter;
Oversee all aspects of the internal audit function and receive ongoing reports from the internal audit department of the Corporation;
Oversee the Whistleblower Policy of the Corporation and report any legal or regulatory noncompliance to Company management and ensure that management takes corrective action.
Assess the processes relating to the determination and mitigation of risks and the maintenance of an effective control environment; and
Review the processes to monitor compliance with laws and regulations.

The Audit Committee will provide communication between the independent auditor, senior management of the Corporation and the Board. The Audit Committee has the sole authority to approve any non-audit engagement by the Corporation's independent auditors and to approve all audit engagement fees and terms.

Responsibilities of the Audit Committee

1. Financial Reporting

(a) Review of Financial Statements and Financial Disclosure
(i) Annual Financial Statements. Before the release of the Corporation's annual financial statements and related Management Discussion & Analysis (MD&A), press release and Annual Information Form (AIF), the Committee shall meet with management and the external auditors to review and discuss the contents of those documents. The Committee shall then present a report (including their recommendation) to the Board based

on this review.

. (ii) Interim Financial Statements. Before the release of the Corporation's interim financial statements and related MD&A and press release to the public, the Committee shall review and approve those documents.
. (iii) Review of Other Disclosure Documents. The Committee shall review all other public disclosure documents containing audited or unaudited financial information before �release, including any prospectus and annual report, as well as financial information and earnings guidance (if any) provided to analysts and rating agencies.
. (b) If the independent auditor is engaged for any limited scope review of the interim reports, the Audit Committee Chair, as a representative of the Committee, shall consult directly with the independent auditor to obtain their comments with respect to interim reports including related “Management's Discussion and Analysis”.
. (c) Review information sufficient to provide reasonable grounds for believing that the financial statements and reports referred to in a) above are complete in all material respects and consistent with the information known to Committee members, and assess whether the financial statements reflect appropriate accounting principles.
(d) Review with senior management of the Corporation and the independent auditor, management's handling of any proposed audit adjustments identified by the independent auditors, the presentation and impact of signification risks and uncertainties, and key estimates and judgments of management that may be material to financial reporting.
(e) Meet with the independent auditor to review the results of the annual audit, their judgments about the quality and appropriateness of the Corporation's accounting principles, and any audit problems or difficulties and management's response.
(f) Review and resolve any significant disagreement among the Corporation's management and the independent auditors in the financial reporting process.
(g) Review the effectiveness of the integrity of the Corporation's internal and external financial reporting process, and any comments of same made by the independent auditors.
(h) Review any evaluation of internal controls of the Corporation made by the external auditor, together with management's response, verbal or written.
(i) Review the post-audit or management letter, containing the recommendations of the external auditor, and management's response and subsequent follow up to any identified weakness.
(j) Consider, evaluate and recommend to the Board such changes as are appropriate to the Corporation's auditing and accounting principles and practices as suggested by the independent auditors or the Corporation's senior management.
(k) Review with independent auditors and the Corporation senior management the extent to which changes and improvements in financial and accounting practices, as approved by the Audit Committee, have been implemented.

2. Independent Auditor

. (a) External auditors shall report directly to the Committee, and provide to them an annual audit plan for approval.
. (b) The Committee shall (i) make recommendations to the Board as to the selection of the firm of independent public accountants to be nominated for the purpose of preparing or issuing an auditor's report or performing other audit, review or attest services for the Corporation; (ii) review and approve the Corporation's

independent auditors' annual engagement letter and audit plan, including the proposed fees contained therein, and make recommendations thereon to the Board; and (iii) review the performance of the Corporation's independent auditors and make recommendations to the Board regarding the replacement or termination of the independent auditors when circumstances warrant.

(c) At least annually, obtain and review any report by the independent auditor describing:
. (i) the firm's internal quality-control procedures, and
. (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the independent auditor, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues.
(d) Confirm the independence of the independent auditor by discussing and reviewing all significant relationships that the independent auditors have with the Corporation and obtaining their assertion of independence in accordance with professional standards.
(e) Approve in advance of the Corporation's final commitment all consulting arrangements and any other non- audit service with the Corporation's independent auditors other than services related to reviews of interim reports and tax services.
(f) Approve all audit fees and terms.
(g) When there is to be a change in the auditor, review all issues relating to the change including any reportable events.
(h) Review any engagements for non-audit services to be provided by the independent auditor's firm or affiliates, together with estimated fees and consider the independence of the auditor.

3. Risk Assessment and Risk Management

. (a) Discuss with Corporation management guidelines and policies governing the risk assessment and risk management processes.
. (b) Review with Corporation management and the independent auditors, significant risks and exposures. Review management's plans and processes to minimize such risks, including insurance coverage.
. (c) Evaluate whether Corporation management is adequately communicating the importance of internal control to all relevant personnel.
. (d) Periodically privately consult with the independent auditor about internal controls and the completeness and accuracy of the Corporation's financial statements.
. (e) Communicate with the Corporation’s internal audit department and review whether the internal control recommendations made by the internal auditors and the independent auditor are being implemented by Corporation management and, if not, why not.

4. Compliance with Relevant laws and regulations

. (a) Oversee the system for monitoring compliance with applicable laws and regulations and the results of management’s investigation and follow-up of any instances of noncompliance (including but not limited to, securities, tax and environmental matters).
. (b) Review, assess and determine the validity of each Whistleblower complaint and fashion the

appropriate corrective action; report any legal or regulatory noncompliance to Company management and ensure that management takes corrective action including, where appropriate, �reporting any violation to relevant governmental authorities.

5. Other Responsibilities

. (a) Meet at least four times annually with senior management (for review of Q1, Q2 and Q3 interim reports and the year-end financial report). Meet with the independent auditor at least two times a year to discuss audit planning and the review the year-end audit results and the independent auditors report thereon.
. (b) Institute special investigations, if necessary, and hire special counsel or experts, at the cost of the Corporation, to assist, if appropriate.
. (c) Review and update this Charter at least annually or as otherwise determined by the Committee, and obtain approval of changes from the Board.
.
(d) Set clear hiring policies for employees or former employees of the independent auditors.
.
(e) Oversee the procedures established for the receipt, retention, and treatment of complaints received by the Corporation regarding accounting, internal accounting controls, or auditing matters.
. (f) Oversee the procedures established allowing the confidential, anonymous submission by Corporation employees of concerns regarding questionable accounting or auditing matters and resolution of such concerns, if any.
. (g) Review with the Board, any issues that arise with respect to the quality or accuracy of the Corporation's financial statements, the Corporation's compliance with legal or regulatory requirements and the performance and independence of the Corporation's independent auditors.
. (h) Review all “related party” or non-arm's length transactions of the Corporation and provide a reporting, including any recommendation, to the Board.
.
(i) Perform other oversight functions as requested by the Board.
. (j) Report after each meeting to the Board regarding actions taken and matters discussed by the Committee.

6. Organization of the Audit Committee

. (a) The Audit Committee shall be comprised of a minimum of 3 Directors including a Committee Chair. All of the Audit Committee members shall, in the opinion of the Board, be independent directors under NI 52-110.
. (b) Each member of the Committee shall have a working knowledge of basic finance and accounting practices, and shall be “financially literate” as defined in NI 52-110.
.
(c) The Chair of the Committee must have accounting or related financial management experience.
. (d) The members of the Committee and its Chair shall be appointed by the Board of Directors. Appointments shall be made in accordance with procedures established by the Corporate Governance, Nomination and Compensation Committee of the Board of Directors from time to time.
. (e) The Corporation will adequately fund the budget of the Audit Committee. The budget will include, at a minimum, payments to the independent auditors for audit services and, if necessary, other

professionals retained by the Audit Committee from time to time.

7. Procedure Governing Errors or Misstatements in Financial Statements

In the event a director or an officer of the Corporation has reason to believe, after discussion with management, that a material error or misstatement exists in financial statements of the Corporation, that director or officer shall forthwith notify the Audit Committee and the auditor of the error or misstatement of which the director or officer becomes aware in a financial statement that the auditor or a former auditor has reported on.

If the auditor or a former auditor of the Corporation is notified or becomes aware of an error or misstatement in a financial statement on which the auditor or former auditor has reported, and if in the auditor's or former auditor's opinion the error or misstatement is material, the auditor or former auditor shall inform each director accordingly.

When the Audit Committee or the Board is made aware of an error or misstatement in a financial statement, the Board shall prepare and issue revised financial statements or otherwise inform the shareholders and file such revised financial statements as required.

8. Independent Advice

As considered necessary in the course of fulfilling Audit Committee duties, the Committee may obtain advice and assistance from outside legal, accounting or other advisors. at the cost of the Corporation.

9. Complaint Procedure

The Committee shall put in place procedures to deal with:

. (a) the receipt, retention and treatment of complaints received by the Corporation regarding accounting, internal accounting controls or auditing matters.
. (b) the confidential, anonymous submission by employees of the Corporation of concerns regarding questionable accounting or auditing matters.
. (c) The Committee shall support the auditor, when appropriate, when issues arise, and management and the auditor disagree.

10. Hiring Policies

. ( a) The Committee shall review and approve the Corporation's hiring policies regarding partners, employees and former partners and employees of the present and any former external auditors of the Corporation.
. (b) The Committee shall ensure that there are sufficient resources and skills to undertake the internal audit.

11. Review and Amendments to Charter:

. (a) By the Committee. On an annual basis, the Committee shall report to the Board on the Committee's performance against its charter and the goals established annually by the Committee for itself, and recommend to the Board any amendments to its charter it considers appropriate or desirable.
. (b) By the Board. The Board shall review and reassess the adequacy of this Charter annually or whenever necessary and shall consider all recommendations received by it from the Committee.

12. Limitation on Audit Committee Members' Duties

Nothing in this Charter is intended, or may be construed, to impose on any member of the Audit Committee a standard of care or diligence that is in any way more onerous or extensive than the standard required by law.

AI assistant

Boyuan Construction Group, Inc. — Proxy Solicitation & Information Statement 2020

46205_rns_2020-07-27_b4f009f1-de5c-4ebf-8bc5-6d5d760a6540.pdf

BOYUAN CONSTRUCTION GROUP, INC.

NOTICE OF

SPECIAL MEETING OF COMMON SHAREHOLDERS

and

MANAGEMENT INFORMATION CIRCULAR

TO BE HELD:

To the Shareholders of Boyuan Construction Group, Inc.:

BOYUAN CONSTRUCTION GROUP, INC.

NOTICE OF SPECIAL MEETING OF COMMON SHAREHOLDERS

The Meeting will be held by Virtual Meeting only, accessible online at:

BY ORDER OF THE BOARD

TABLE OF CONTENTS

GLOSSARY OF TERMS

“ CBCA ” means the Canada Business Corporations Act ;

SUMMARY

DATE, TIME AND PLACE OF MEETING

RECORD DATE

PURPOSE OF MEETING

GOING PRIVATE TRANSACTION - THE PRE-CONSOLIDATION AMENDMENT, THE CONSOLIDATION, THE REDEMPTION AND THE POST-REDEMPTION STEPS

The Pre-Consolidation Amendment

The Consolidation

The Redemption

Dissenting Shareholders

Consideration

Source of Funds

Notice of Redemption

Letter of Transmittal

Deadline for Redemption

The Post-Redemption Steps

SPECIAL COMMITTEE

SHAREHOLDER APPROVALS REQUIRED

CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS

RIGHT OF DISSENT

EFFECT OF THE GOING PRIVATE TRANSACTION ON MARKETS AND LISTINGS

RECOMMENDATION OF THE BOARD

BOYUAN CONSTRUCTION GROUP, INC. MANAGEMENT INFORMATION CIRCULAR

FORWARD-LOOKING STATEMENTS

THE COMPANY

GENERAL PROXY INFORMATION

SOLICITATION OF PROXIES

APPOINTMENT AND REVOCATION OF PROXIES

ADVICE TO BENEFICIAL SHAREHOLDERS

VOTING OF PROXIES

QUORUM

VOTING SHARES AND PRINCIPAL HOLDERS THEREOF

Note:

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

Aggregate Indebtedness

Indebtedness of Directors and Executive Officers under (1) Securities Purchase and (2) Other Programs

INTERESTS OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

MANAGEMENT CONTRACTS

INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON

PARTICULARS OF MATTERS TO BE ACTED UPON

APPROVAL OF GOING PRIVATE TRANSACTION

Going Private Transaction - The Pre-Consolidation Amendment, the Redemption and the Post-Redemption Steps

The Pre-Consolidation Amendment

The Consolidation and the Redemption

The Consideration

Dissenting Shareholders

Source of Funds

Notice of Redemption

Post-Redemption Steps

Deadline for Redemption

Background and Special Committee Matters

Background

The Appointment of the Special Committee

Summary of Proceedings of the Special Committee

The Special Committee's Retention of Legal and Financial Advisors

The Special Committee's Conclusion Following Deliberations

Reasons for the Going Private Transaction; Special Committee Recommendation

Price Range and Trading Volumes of the Common Shares

Note:

Dividend Policy

Previous Distributions of Common Shares

Recommendation of the Board

Engagement of BDO

BDO Valuation

Boyuan Construction Group, Inc. Proxy Solicitation & Information Statement 2020