2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. ZHEJIANG DAHUA TECHNOLOGY CO., LTD. 2019 Q1 Report April 2019 1 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Section I Important Notes The Board of Directors, Board of Supervisors, Directors, Supervisors and Senior Management of the Company hereby warrant that the information presented in this quarterly report shall be authentic, accurate, complete and free of any false records, misleading statements or material omissions, and they shall assume joint and several liabilities for such information. All directors have attended the board meeting for the deliberation of this quarterly report. Fu Liquan, the Company's principal, Wei Meizhong, the person in charge of accounting, and Xu Qiaofen, the person in charge of the accounting institutions (accounting supervisor) hereby represent and warrant that the financial statements contained in this quarterly report are authentic, accurate and complete. 2 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Section II Corporate Information I. Key Accounting Data and Financial Indicators Whether the Company needs to adjust or restate the accounting data of previous years retrospectively □ Yes √ No This period Same period of last year Change (%) Operating income (RMB) 4,347,918,104.26 3,617,652,691.40 20.19% Net profit attributable to shareholders of 316,343,906.02 295,523,140.67 7.05% the listed company (RMB) Net profit attributable to shareholders of the listed company, excluding 286,016,593.97 290,656,854.31 -1.60% non-recurring profit and loss (RMB) Net cash flow from operational activities -1,728,487,212.91 -1,286,295,160.14 -34.38% (RMB) Basic earnings per share (RMB/share) 0.11 0.10 10.00% Diluted earnings per share (RMB/share) 0.11 0.10 10.00% Weighted average ROE 2.47% 2.78% -0.31% End of this period End of last year Change (%) Total assets (RMB) 25,249,751,298.42 26,350,599,778.15 -4.18% Net assets attributable to shareholders of 12,992,582,839.54 12,618,758,918.48 2.96% the listed company (RMB) Non-recurring profit and loss items and amounts √ Applicable □ Not applicable Unit: RMB Amount from the beginning Item of the year to the end of this Note period Profit and loss from disposal of non-current assets (including the 9,128,384.28 write-off for the accrued impairment of assets) The government subsidies included in current profits and losses (excluding the government subsidies closely related to regular 11,417,827.04 businesses of the Company and issued in quota or quantity based on the national standards) Profits and losses from changes at fair value of trading financial assets, derivative financial assets, trading financial liabilities and 16,288,059.40 derivative financial liabilities, and investment income gained 3 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. from disposal of trading financial assets, derivative financial assets, trading financial liabilities, derivative financial liabilities and other investments on creditor's rights, excluding effective hedging businesses related to the normal business operation of the Company Non-operating revenue and expenses other than the above 1,579,646.02 Less: Impact of income tax 5,432,794.47 Impact of minority equity (after-tax) 2,653,810.22 Total 30,327,312.05 -- As to the non-recurring profit and loss items defined by the Company according to Explanatory Announcement No.1 on Information Disclosure for Companies Offering Securities to the Public - Non-recurring Profit and Loss, or non-recurring profit and loss items listed in the said document defined as recurring ones, the Company shall specify the reason. □ Applicable √ Not applicable In this reporting period, the Company did not have any non-recurring profit and loss items listed in Explanatory Announcement No.1 on Information Disclosure for Companies Offering Securities to the Public - Non-recurring Profit and Loss defined as recurring ones. II. Total Number of Shareholders and Holdings of the Top 10 Shareholders at the End of the Reporting Period 1. Total number of common shareholders, number of preferred shareholders with voting rights recovered and holdings of the Top 10 shareholders Unit: share Total number of preferred Total number of common shareholders with voting rights shareholders at the end of the 124,488 0 recovered at the end of the reporting reporting period period (if any) Holdings of the Top 10 shareholders Nature of Shareholding Number of shares Number of Pledged or frozen Shareholder name shareholder percentage held restricted shares Status Amount Domestic natural Fu Liquan 36.10% 1,082,081,880 834,736,410 Pledged 157,192,000 person Domestic natural Zhu Jiangming 6.22% 186,461,490 139,846,117 Pledged 36,504,000 person Hong Kong Overseas legal Securities 2.63% 78,796,029 0 person Clearing Co., Ltd. Domestic natural Chen Ailing 2.38% 71,262,813 53,447,110 person Wu Jun Domestic natural 2.31% 69,250,886 51,938,164 4 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. person National Social Security Fund Others 1.47% 44,039,310 0 Portfolio 102 Domestic China Securities non-state-owned 1.32% 39,611,241 0 Finance Co., Ltd. legal person Central Huijin Asset State-owned legal 1.05% 31,448,750 0 Management Co., person Ltd. Zhejiang Dahua Technology Co., Ltd. - Phase III Others 0.88% 26,247,928 0 Employee Stock Ownership Plan Shanghai Greenwoods Asset Others 0.66% 19,904,829 0 Management Ltd. - Greenwoods Global Fund Holdings of the Top 10 unrestricted shareholders Type of shares Shareholder name Number of unrestricted shares Type of shares Amount RMB common Fu Liquan 247,345,470 247,345,470 stock Hong Kong Securities Clearing Co., RMB common 78,796,029 78,796,029 Ltd. stock RMB common Zhu Jiangming 46,615,373 46,615,373 stock National Social Security Fund RMB common 44,039,310 44,039,310 Portfolio 102 stock RMB common China Securities Finance Co., Ltd. 39,611,241 39,611,241 stock Central Huijin Asset Management RMB common 31,448,750 31,448,750 Co., Ltd. stock Zhejiang Dahua Technology Co., RMB common Ltd. - Phase III Employee Stock 26,247,928 26,247,928 stock Ownership Plan 5 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Shanghai Greenwoods Asset RMB common Management Ltd. - Greenwoods 19,904,829 19,904,829 stock Global Fund Shanghai Greenwoods Asset RMB common Management Co., Ltd. - 18,821,078 18,821,078 stock Greenwoods Value Fund RMB common Chen Ailing 17,815,703 17,815,703 stock Association or concerted action of Mr. Fu Liquan and Ms. Chen Ailing are husband and wife. The Company is unaware of above-mentioned shareholders whether other shareholders have associated relationship or are persons acting in concert. Participation of Top 10 common shareholders in securities margin N/A trading businesses (if any) Whether the Company's Top 10 common shareholders or Top 10 unrestricted common shareholders have agreed upon any repurchase transaction in the reporting period □ Yes √ No None of the Company's Top 10 common shareholders or Top 10 unrestricted common shareholders have agreed upon any repurchases transaction in the reporting period. 2. Total number of preferred shareholders and holdings of the Top 10 preferred shareholders □ Applicable √ Not applicable 6 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Section III Important Matters I. Major changes in key financial data and indicators in the reporting period and reasons √ Applicable □ Not applicable (I) Changes in assets and liabilities and reasons 1. Available-for-sale financial assets decreased by 100% compared with the end of last year, which was mainly caused by the application of the New Accounting Standards for Financial Instruments starting from 2019 and that the Company adjusted the items previously listed as available-for-sale financial assets to other non-current financial assets; 2. Other non-current financial assets increased by 100% compared with the end of last year, which was mainly caused by the application of the New Accounting Standards for Financial Instruments starting from 2019 and that the Company adjusted the items previously listed as available-for-sale financial assets to other non-current financial assets; 3. Long-term receivables increased by 33.25% compared with the end of last year, which was mainly caused by the confirmed increase of installments in the acceptance inspection in this reporting period; 4. Other non-current assets increased by 87.18% compared with the end of last year, which was mainly caused by the increase of pre-payments for the manufacturing equipment in this reporting period; 5. Short-term borrowings increased by 57.09% compared with the end of last year, which was mainly caused by the increase of bank loans in this reporting period; 6. Trading financial liabilities increased by 100% compared with the end of last year, which was mainly caused by the application of the New Accounting Standards for Financial Instruments starting from 2019 and that the Company adjusted the items measured at fair value with their changes previously listed as financial liabilities through profit and loss of the current period to trading financial liabilities; 7. Financial liabilities measured at fair value through profit and loss of the current period decreased by 100% compared with the end of last year, which was mainly caused by the application of the New Accounting Standards for Financial Instruments starting from 2019 and that the Company adjusted the items measured at fair value with their changes previously listed as financial liabilities through profit and loss of the current period to trading financial liabilities; 8. Received pre-payments increased by 37.53% compared with the end of last year, which was mainly caused by the business growth of the Company and the increase of received pre-payments; 9. Employee compensation payable decreased by 56.75% compared with the end of last year, which was mainly caused by the payment of year-end bonus in this reporting period; 10. Taxes payable decreased by 43.09% compared with the end of last year, which was mainly caused by the payment of value-added taxes and corporate income taxes which were not paid at the start of the period; 11. Interests payable increased by 54.69% compared with the end of last year, which was mainly caused by the increase of bank loans resulting in the increase of corresponding interest expenses; 12. Other comprehensive incomes increased by 108.34% compared with the end of last year, which was mainly caused by the increased difference from the conversion of foreign currency statements; (II) Changes in income statement items and reasons 1. Management fee increased by 48.86% compared with the same period of last year, which was mainly caused by the business growth of the Company and the impact of equity incentive fees in this reporting period; 2. R&D fee increased by 47.45% compared with the same period of last year, which was mainly caused by the increased 7 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. investment in R&D by the Company; 3. Loss from impairment of assets increased by 67.73% compared with the same period of last year, which was mainly caused by the increase of the accrued bad debt provision in this reporting period compared with the same period of last year; 4. Other income increased by 50.18% compared with the same period of last year, which was mainly caused by the increase of returned part of the value-added taxes due to excess burden compared with the same period of last year; 5. Profit and loss resulting from the changes in fair value increased by 1179.13% compared with the same period of last year, which was mainly caused by the changes in the fair value of the Company's financial derivatives; 6. Non-operating income increased by 214.71% compared with the same period of last year, which was mainly caused by the increase of received government subsidies in this reporting period compared with the same period of last year; 7. Non-operating expense decreased by 58.50% compared with the same period of last year, which was mainly caused by the decrease of the losses resulting from disposal of fixed assets in this reporting period compared with the same period of last year; 8. Income tax expense decreased by 57.75% compared with the same period of last year, which was mainly caused by the increase in the weighted deduction ratio of R&D fees compared with the same period of last year; (III) Changes in cash flow statement items and reasons 1. Net cash flow from operational activities decreased by 34.38% compared with the same period of last year, which was mainly caused by the scale expansion of the Company resulting in the increase of cash payment for businesses; 2. Net cash flow from investment activities increased by 45.38% compared with the same period of last year, which was mainly caused by the acquisition activities in the same period of last year; 3. Net cash flow from financing activities increased by 254.44% compared with the same period of last year, which was mainly caused by the increase of bank loans in this reporting period; II. Progress and Impact of Important Matters and Solutions √ Applicable □ Not applicable 1. On January 24, 2017, the Company's holding sub-subsidiary, Nanbei United Information Technology Co., Ltd. and its wholly-owned subsidiary, Zhejiang Dahua System Engineering Co., Ltd. signed a Cooperation Agreement on PPP Investment in Safe City Project of Shache County with the People's Government of Shache County in Kashgar, Xinjiang, which was just a framework agreement on the PPP project. The agreement stipulated that the service content was the pre-feasibility study of the project and the design of the project, etc. For the implementation of the specific project, related decision-making and approval procedures, such as government procurement, shall still be fulfilled. On July 21, 2017, the Company received the Notification of Award issued by the project purchasing unit, which confirmed that the wholly-owned subsidiary Zhejiang Dahua System Engineering Co., Ltd. (the consortium leader), with the holding sub-subsidiary Nanbei United Information Technology Co., Ltd. (member of the consortium) was the winning bidder for the Safe City Construction Project (PPP) in Shache County. The winning bid amount of the project was RMB 4.31479 billion (the final amount shall be subject to the signed contract), which was the total amount for construction and operation within a 10-year project cooperation period. On August 4, 2017, the Company's 34th session of the 5th Board of Directors' meeting reviewed and approved the Proposal on Investing to Establish A PPP Project Company in Shache County, Xinjiang, and the Company submitted a bid based on the requirements for the Shache County City Construction Project (PPP), and the winning consortium jointly funded the establishment of the project company, with a registered capital of RMB 335,567,200. Among them, Zhejiang Dahua System Engineering Co., Ltd. contributed RMB 234,897,040, accounted for 70% of the total contribution; Nanbei United Information Technology Co., Ltd. contributed RMB 100,670,160, accounted for 30%. In August 2017, the project company was established and the name of the company approved by the industrial and commercial bureau was Xinjiang Dahua Xinzhi Information Technology Co., Ltd. 8 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. On April 18, 2018, the winning bidder received the notice from the Public Security Bureau of Shache County to stop the implementation of the Safe City Construction Project of Shache County (PPP). Nearly half of the project was completed, and no subsequent expenses for equipment replacement, operation and maintenance were incurred. The actual investment amount during the construction period shall be further calculated and confirmed with the government. The winning bidder's project participation and construction was in compliance with the requirements of relevant laws and regulations of PPP, but there exists the risk that the project would not be continued and lead to the decrease of the Company's future recognizable income. The Company would actively cooperate with relevant government departments in their work, and timely perform the obligation of information disclosure based on subsequent progression of the project and the provisions in relevant laws and regulations and the Articles of Association. 2. On May 16, 2017, the Company's 2016 Annual General Meeting of Shareholders reviewed and approved the Zhejiang Dahua Technology Co., Ltd. Phase III Employee Stock Ownership Plan (Draft) and its summary, and decided to implement the Phase III Employee Stock Ownership Plan. On June 1, 2017, the Company's Phase III Employee Stock Ownership Plan completed the stock purchase through DAHUA No. 3 Directed Asset Management Plan of Caitong Securities Asset Management, with an average purchase price of RMB 16.83 per share and a total purchase volume of 47,000,000 shares. On November 12, 2018, the Company's 18th session of the 6th Board of Directors' meeting reviewed and approved the "Suggestive Proposal on Extension of the Company's Phase III Employee Stock Ownership Plan's Duration at the Time of Expiration". The Board of Directors agreed to extend the Company's Phase III Employee Stock Ownership Plan for one year based on the voting results of the shareholders' meeting. That is, the duration was extended for one additional year on the basis of the original termination date, until May 15, 2020. 3. On December 27, 2018, the Company's 5th interim shareholders' meeting in 2018 reviewed and approved the "Proposal on Repurchase and Cancellation of Some Granted but Unlocked Restricted Shares", and agreed to repurchase and cancel 44,200 granted but unlocked restricted shares held by the incentive targets who have left the Company and one deceased personnel. The repurchase price was RMB 8.17 per share, same as the granting price of the restricted shares, and the registered capital was reduced accordingly. The above repurchase and cancellation matters were completed on March 4, 2019, and the modification procedures at the Bureau of Industry and Commerce were completed on April 15, 2019. Important matters Date of disclosure Interim report disclosure search website Announcement on the Signing of A Framework Agreement Juchao Information Website January 26, 2017 for A PPP Project by A Subsidiary http://www.cninfo.com.cn/ Suggestive Announcement on the Pre-winning Publicity for Juchao Information Website July 18, 2017 the PPP Project of the Subsidiary http://www.cninfo.com.cn/ Announcement on Investing in and Establishing A PPP Juchao Information Website August 7, 2017 Project Company in Shache County, Xinjiang http://www.cninfo.com.cn/ Announcement on the Progress of the Subsidiary's PPP Juchao Information Website April 18, 2018 Project http://www.cninfo.com.cn/ Announcement on the Resolution of the Annual Shareholders' Juchao Information Website May 17, 2017 Meeting in 2016 http://www.cninfo.com.cn/ Announcement on the Completion of Purchase for the Phase Juchao Information Website June 2, 2017 III Employee Stock Ownership Plan http://www.cninfo.com.cn/ Suggestive Proposal on Extension of the Company's Phase III Juchao Information Website Employee Stock Ownership Plan's Duration at the Time of November 13, 2018 http://www.cninfo.com.cn/ Expiration 9 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Announcement on the Resolution of the 5th Interim Juchao Information Website December 28, 2018 Shareholders' Meeting in 2018 http://www.cninfo.com.cn/ Announcement on the Completion of Repurchase and Juchao Information Website March 6, 2019 Cancellation of Some Restricted Shares http://www.cninfo.com.cn/ The Progress on Share Repurchase □ Applicable √ Not applicable The Progress on Reducing Share Repurchase by Means of Centralized Bidding □ Applicable √ Not applicable III. Commitments of the Company's de facto Controllers, Shareholders, Related Parties, Buyers, the Company and Other Parties related to the Commitments not Fulfilled in the Reporting Period □ Applicable √ Not applicable All of the commitments of the Company's de facto controllers, shareholders, related parties, buyers, the Company and other parties related to the commitments have been fulfilled in the reporting period. IV. Estimation on Business Performance from January to June of 2019 Estimated business performance from January to June of 2019: the net profit attributable to shareholders of the listed company is a positive value and it's not a turn from loss to profit. Changes in the net profit attributable to shareholders of the listed 0.00% to 15.00% company from January to June of 2019 Range of changes in the net profit attributable to shareholders of the 108,191.69 to 124,420.44 listed company from January to June of 2019 (in RMB 10,000) Net profit attributable to shareholders of the listed company from 108,191.69 January to June of 2018 (in RMB 10,000) The sales scale of the Company has expanded and the operating income has increased. It's estimated that the net Reasons for the performance changes profit attributable to the owners of the parent company will increase by 0%-15% compared with the same period of last year. V. Financial Assets Measured at Fair Value √ Applicable □ Not applicable Unit: RMB Profit and loss Cumulative Amount of Amount of Initial Cumulative Amount at the resulting from changes in purchase sales in Capital Type of assets investment investment end of the the changes in fair value in the the source cost income period fair value in recognized reporting reporting 10 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. this period in equity period period Financial Own 34,436,817.76 -19,529,927.20 387,573.16 derivatives fund Equity Own 82,970,227.00 82,970,227.00 investment fund Total 82,970,227.00 34,436,817.76 0.00 0.00 0.00 -19,529,927.20 83,357,800.16 -- VI. Rule-violating External Guarantee □ Applicable √ Not applicable No rule-violating external guarantee was provided by the Company in the reporting period. VII. Occupation of the Listed Company's Fund by the Controlling Shareholders or Other Related Parties for Non-operating Purposes □ Applicable √ Not applicable During the reporting period, there is no occupation of the listed company's fund by the controlling shareholders or other related parties for non-operating purposes. VIII. Registration Form for Received Researches, Communications, Interviews in the Reporting Period √ Applicable □ Not applicable Time Method Target type Basic information search website For more information, please see the investor relations activity list at January 29, 2019 Field research Organization http://www.cninfo.com.cn Telephone For more information, please see the investor relations activity list at January 29, 2019 Organization communication http://www.cninfo.com.cn For more information, please see the investor relations activity list at January 30, 2019 Field research Organization http://www.cninfo.com.cn Telephone For more information, please see the investor relations activity list at January 30, 2019 Organization communication http://www.cninfo.com.cn 11 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Section IV Financial Statements I. Financial Statements 1. Consolidated Balance Sheet Prepared by: Zhejiang Dahua Technology Co., Ltd. Unit: RMB Item March 31, 2019 December 31, 2018 Current assets: Monetary fund 3,388,154,787.00 4,160,153,847.06 Deposit reservation for balance Loans to banks and other financial institutions Trading financial assets 387,573.16 Financial assets measured at fair value with changes recognized into current profit and loss Derivative financial assets Notes receivable and accounts 11,636,044,122.03 12,577,066,194.44 receivable Including: notes receivable 1,734,839,459.26 2,385,693,417.06 Accounts receivable 9,901,204,662.77 10,191,372,777.38 Pre-payments 161,293,518.30 126,891,259.00 Premium receivable Reinsurance accounts receivable Reinsurance contract reserves receivable Other receivables 338,563,516.18 398,170,769.40 Including: interests receivable 5,807,523.44 6,754,941.00 Dividends receivable Buying back the sale of financial assets Inventory 2,996,728,364.05 3,035,579,709.14 Contractual assets 12 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Held-for-sale assets Non-current assets due within 1 year 574,701,552.44 578,733,057.27 Other current assets 405,106,796.33 402,255,078.05 Subtotal of current assets 19,500,980,229.49 21,278,849,914.36 Non-current assets: Granting of loans and advances Investments on creditor's rights Financial assets available for sale 82,970,227.00 Other investments on creditor's rights Held-to-maturity investments Long-term receivables 2,480,468,764.43 1,861,485,568.28 Long-term equity investment 181,978,072.22 185,872,021.58 Other equity instrument investments Other non-current financial assets 82,970,227.00 Investment properties 347,900,181.69 346,831,376.55 Fixed assets 1,401,032,946.90 1,407,471,330.83 Projects under construction 231,711,748.22 226,191,587.11 Productive biological assets Oil and gas assets Right-of-use assets Intangible assets 368,037,008.04 372,467,409.09 Development expense Goodwill 109,745,412.21 109,745,412.21 Long-term prepaid expenses 39,031,771.45 37,117,918.55 Deferred income tax assets 475,426,712.53 425,319,406.98 Other non-current assets 30,468,224.24 16,277,605.61 Subtotal of non-current assets 5,748,771,068.93 5,071,749,863.79 Total assets 25,249,751,298.42 26,350,599,778.15 Current liabilities: Short-term loan 2,908,880,172.39 1,851,709,561.83 Borrowings from the Central Bank Borrowings from banks and other financial institutions Trading financial liabilities 4,314,915.55 13 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Financial liabilities measured at fair value with changes recognized into current 38,602,602.30 profit and loss Derivative financial liabilities Notes payable and accounts payable 5,647,489,443.82 7,461,315,698.99 Received pre-payments 472,153,342.43 343,297,891.20 Financial assets sold for repurchase Deposit taking and interbank deposit Receiving from vicariously traded securities Receiving from vicariously sold securities Payroll payable 486,255,924.62 1,124,358,611.94 Tax payable 341,186,897.43 599,478,049.81 Other payables 1,013,706,211.94 1,051,537,094.97 Including: interests payable 7,340,553.07 4,745,203.31 Dividends payable Service charge and commission payable Reinsurance accounts payable Contractual liabilities Held-for-sale liabilities Non-current liabilities due within 1 25,500,000.00 25,500,000.00 year Other current liabilities 78,959,310.21 70,845,639.51 Subtotal of current liabilities 10,978,446,218.39 12,566,645,150.55 Non-current liabilities: Insurance contract reserves Long-term loan 179,000,000.00 179,000,000.00 Bonds payable Including: preferred stocks Perpetual bonds Lease liabilities Long-term payables Long-term payroll payable Expected liabilities 243,421,368.96 193,761,170.12 14 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Deferred income 57,900,377.53 58,693,533.40 Deferred income tax liabilities 49,635,458.14 50,137,969.76 Other non-current liabilities 456,775,480.73 399,096,280.89 Subtotal of non-current liabilities 986,732,685.36 880,688,954.17 Total liabilities 11,965,178,903.75 13,447,334,104.72 Shareholders' equity: Share capital 2,997,577,730.00 2,997,621,930.00 Other equity instruments Including: preferred stocks Perpetual bonds Capital reserves 1,547,144,808.22 1,501,180,862.83 Less: treasury share 807,372,472.00 807,733,586.00 Other comprehensive incomes 21,536,320.06 10,337,164.41 Special reserves Surplus reserves 1,246,369,430.91 1,246,369,430.91 General risk reserves Undistributed profits 7,987,327,022.35 7,670,983,116.33 Total shareholders' equity attributable to 12,992,582,839.54 12,618,758,918.48 the parent company Minority shareholders' equity 291,989,555.13 284,506,754.95 Total shareholders' equity 13,284,572,394.67 12,903,265,673.43 Total liabilities and shareholders' equity 25,249,751,298.42 26,350,599,778.15 Legal representative: Fu Liquan Person in charge of accounting: Wei Meizhong Person in charge of the accounting institution: Xu Qiaofen 2. Balance Sheet of the Parent Company Unit: RMB Item March 31, 2019 December 31, 2018 Current assets: Monetary fund 152,724,456.67 611,190,236.01 Trading financial assets Financial assets measured at fair value with changes recognized into current profit and loss 15 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Derivative financial assets Notes receivable and accounts 4,944,891,210.90 5,551,148,625.96 receivable Including: notes receivable 1,070,445,568.17 952,572,702.92 Accounts receivable 3,874,445,642.73 4,598,575,923.04 Pre-payments 26,904,344.76 26,772,044.53 Other receivables 7,503,145,920.62 6,954,655,863.03 Including: interests receivable 42,500.00 Dividends receivable Inventory 172,681,553.68 120,181,267.85 Contractual assets Held-for-sale assets Non-current assets due within 1 year 52,015,403.28 50,793,137.80 Other current assets 5,768,760.74 24,858,982.78 Subtotal of current assets 12,858,131,650.65 13,339,600,157.96 Non-current assets: Investments on creditor's rights Financial assets available for sale 80,496,000.00 Other investments on creditor's rights Held-to-maturity investments Long-term receivables 164,850,489.71 160,299,143.83 Long-term equity investment 3,085,368,105.84 3,001,639,428.55 Other equity instrument investments Other non-current financial assets 80,496,000.00 Investment properties 180,963,770.22 183,321,198.72 Fixed assets 479,817,819.21 496,363,638.38 Projects under construction 152,575,924.51 151,072,585.67 Productive biological assets Oil and gas assets Right-of-use assets Intangible assets 170,256,158.63 170,879,747.04 Development expense Goodwill Long-term prepaid expenses 30,436,564.49 28,927,258.54 16 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Deferred income tax assets 61,990,058.11 40,821,902.57 Other non-current assets 129,584.70 929,380.00 Subtotal of non-current assets 4,406,884,475.42 4,314,750,283.30 Total assets 17,265,016,126.07 17,654,350,441.26 Current liabilities: Short-term loan 2,046,841,815.43 1,380,000,000.00 Trading financial liabilities Financial liabilities measured at fair value with changes recognized into current profit and loss Derivative financial liabilities Notes payable and accounts payable 331,422,612.56 1,065,528,900.01 Received pre-payments 63,522,498.49 80,361,211.04 Contractual liabilities Payroll payable 318,529,714.36 817,723,936.19 Tax payable 188,386,974.21 351,294,836.50 Other payables 1,038,112,767.76 1,060,909,330.56 Including: interests payable 3,670,702.11 2,416,340.30 Dividends payable Held-for-sale liabilities Non-current liabilities due within 1 year Other current liabilities 6,809,092.48 6,464,333.12 Subtotal of current liabilities 3,993,625,475.29 4,762,282,547.42 Non-current liabilities: Long-term loan Bonds payable Including: preferred stocks Perpetual bonds Lease liabilities Long-term payables Long-term payroll payable Expected liabilities 1,387,820.00 3,396,100.00 Deferred income Deferred income tax liabilities 17 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Other non-current liabilities 23,568,083.39 23,684,423.74 Subtotal of non-current liabilities 24,955,903.39 27,080,523.74 Total liabilities 4,018,581,378.68 4,789,363,071.16 Shareholders' equity: Share capital 2,997,577,730.00 2,997,621,930.00 Other equity instruments Including: preferred stocks Perpetual bonds Capital reserves 1,541,000,010.41 1,497,801,068.88 Less: treasury share 807,372,472.00 807,733,586.00 Other comprehensive incomes Special reserves Surplus reserves 1,246,369,430.91 1,246,369,430.91 Undistributed profits 8,268,860,048.07 7,930,928,526.31 Total shareholders' equity 13,246,434,747.39 12,864,987,370.10 Total liabilities and shareholders' equity 17,265,016,126.07 17,654,350,441.26 3. Consolidated Income Statement Unit: RMB Item This period's amount of occurrence Previous period's amount of occurrence I. Total operating income 4,347,918,104.26 3,617,652,691.40 Including: operating income 4,347,918,104.26 3,617,652,691.40 Interest income Earned premiums Service charge and commission income II. Total operating cost 4,251,849,773.85 3,408,142,945.83 Including: operating cost 2,719,715,306.27 2,207,716,754.78 Interest expenses Service charge and commission expenses Surrender value Net claims paid Net amount withdrawn for insurance contract reserves 18 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Policyholder dividend expense Reinsurance cost Taxes and surcharges 23,874,799.92 20,096,268.10 Sales cost 655,869,241.60 565,570,425.04 Administration cost 148,771,651.74 99,939,115.39 R&D cost 541,327,378.49 367,136,026.47 Financial cost 117,284,844.28 120,852,117.44 Including: interest cost 35,426,066.33 18,433,356.21 Interest income 39,467,635.58 26,376,191.13 Loss from impairment of assets 45,006,551.55 26,832,238.61 Loss from impairment of credit Add: other incomes 193,253,518.07 128,684,631.99 Investment income (Mark "-" for loss) -9,778,727.73 -10,440,741.57 Including: investment gains from -782,168.13 -11,061,652.58 affiliates and joint ventures Exchange gains (Mark "-" for loss) Net hedging gains from exposures (Mark "-" for loss) Gains from changes in fair value 34,436,817.76 2,692,200.00 (Mark "-" for loss) Asset disposal gains (Mark "-" for loss) -13,523.79 III. Operating profit (Mark "-" for loss) 313,979,938.51 330,432,312.20 Add: non-operating income 6,715,442.18 2,133,831.13 Less: non-operating expense 512,570.47 1,235,146.38 IV. Total profit (Mark "-" for total loss) 320,182,810.22 331,330,996.95 Less: income tax cost 14,762,513.41 34,942,391.53 V. Net profit (Mark "-" for net loss) 305,420,296.81 296,388,605.42 (I) Classified by operation continuity 1. Net profit from continuing operation 305,420,296.81 296,388,605.42 (Mark "-" for net loss) 2. Net profit from discontinued operation (Mark "-" for net loss) (II) Classified by ownership 1. Net profit attributable to the owners of 316,343,906.02 295,523,140.67 the parent company 2. Minority shareholders' profit and loss -10,923,609.21 865,464.75 19 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. VI. Net amount of other comprehensive incomes 11,199,155.65 5,546,042.67 after taxes Net amount of other comprehensive incomes after taxes attributable to the owners of the 11,199,155.65 5,546,042.67 parent company (I) Other comprehensive incomes that cannot be reclassified as profit and loss 1. Changes resulting from re-measurement of the defined benefit plan 2. Other comprehensive incomes that cannot be transferred to profit and loss under the equity method 3. Changes in fair value of other equity instrument investments 4. Changes in fair value of enterprise's own credit risk 5. Others (II) Other comprehensive incomes that will 11,199,155.65 5,546,042.67 be reclassified as profit and loss 1. Other comprehensive incomes that can be transferred to profit and loss under the equity method 2. Changes in fair value of other investments on creditor's rights 3. Profits and losses from changes in fair value of available-for-sale financial assets 4. Amount of financial assets reclassified as other comprehensive incomes 5. Profits and losses from held-to-maturity investments reclassified as available-for-sale financial assets 6. Other provisions for the impairment of credit in investments on creditor's rights 7. Hedging reserves for cash flow 8. Difference from the conversion of 11,199,155.65 5,546,042.67 foreign currency statements 9. Others Net amount of other comprehensive incomes 20 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. after taxes attributable to minority shareholders VII. Total comprehensive income 316,619,452.46 301,934,648.09 Total comprehensive income attributable to 327,543,061.67 301,069,183.34 the owners of the parent company Total comprehensive income attributable to -10,923,609.21 865,464.75 minority shareholders VIII. Earnings per share: (I) Basic earnings per share 0.11 0.10 (II) Diluted earnings per share 0.11 0.10 For statement consolidation for the enterprises under the same control in this period, the net profit realized by the consolidated party before the consolidation is: RMB. The net profit realized by the consolidated party in previous period is: RMB. Legal representative: Fu Liquan Person in charge of accounting: Wei Meizhong Person in charge of the accounting institution: Xu Qiaofen 4. Income Statement of the Parent Company Unit: RMB Item This period's amount of occurrence Previous period's amount of occurrence I. Operating income 1,160,709,728.28 1,458,256,770.27 Less: operating cost 111,231,656.05 415,219,943.24 Taxes and surcharges 13,406,573.12 15,120,966.67 Sales cost 327,870,861.50 309,704,200.14 Administration cost 81,251,635.80 44,795,649.77 R&D cost 456,283,172.66 318,585,135.77 Financial cost 15,403,187.19 -17,699,076.75 Including: interest cost 25,906,898.88 6,101,362.80 Interest income 10,767,232.85 23,796,931.31 Loss from impairment of -5,848,611.97 2,264,906.05 assets Loss from impairment of credit Add: other incomes 182,806,535.54 121,175,350.16 Investment income (Mark "-" 1,320,536.95 -10,475,553.89 for loss) Including: investment gains -60,631.89 -11,061,652.58 from affiliates and joint ventures Net hedging gains from 21 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. exposures (Mark "-" for loss) Gains from changes in fair value (Mark "-" for loss) Asset disposal gains (Mark -13,523.79 "-" for loss) II. Operating profit (Mark "-" for loss) 345,238,326.42 480,951,317.86 Add: non-operating income 1,881,023.83 1,866,412.07 Less: non-operating expense 282,834.14 70,622.62 III. Total profit (Mark "-" for total loss) 346,836,516.11 482,747,107.31 Less: income tax cost 8,904,994.35 55,047,331.08 IV. Net profit (Mark "-" for net loss) 337,931,521.76 427,699,776.23 (I) Net profit from continuing 337,931,521.76 427,699,776.23 operation (Mark "-" for net loss) (II) Net profit from discontinued operation (Mark "-" for net loss) V. Net amount of other comprehensive incomes after taxes (I) Other comprehensive incomes that cannot be reclassified as profit and loss 1. Changes resulting from re-measurement of the defined benefit plan 2. Other comprehensive incomes that cannot be transferred to profit and loss under the equity method 3. Changes in fair value of other equity instrument investments 4. Changes in fair value of enterprise's own credit risk 5. Others (II) Other comprehensive incomes that will be reclassified as profit and loss 1. Other comprehensive incomes that can be transferred to profit and loss under the equity method 2. Changes in fair value of 22 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. other investments on creditor's rights 3. Profits and losses from changes in fair value of available-for-sale financial assets 4. Amount of financial assets reclassified as other comprehensive incomes 5. Profits and losses from held-to-maturity investments reclassified as available-for-sale financial assets 6. Other provisions for the impairment of credit in investments on creditor's rights 7. Hedging reserves for cash flow 8. Difference from the conversion of foreign currency statements 9. Others VI. Total comprehensive income 337,931,521.76 427,699,776.23 VII. Earnings per share: (I) Basic earnings per share 0.12 0.15 (II) Diluted earnings per share 0.12 0.15 5. Consolidated Cash Flow Statement Unit: RMB Item This period's amount of occurrence Previous period's amount of occurrence I. Cash flow from operational activities: Cash from sales of merchandise 5,084,524,142.75 4,211,360,373.46 and provision of services Net increase in customer's bank deposit and interbank deposit Net increase in borrowings from the Central Bank Net increase in borrowings from other financial institutions 23 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Cash from receiving premiums for the original insurance contract Net amount from reinsurance business Net increase in deposits and investments from policyholders Net increase in financial assets measured at fair value with changes recognized into current profit and loss Cash from interests, service charges and commissions Net increase in borrowings from banks and other financial institutions Net increase in repurchase business fund Net cash from receiving from vicariously traded securities Tax refund 458,798,417.38 415,701,884.80 Other received cashes related to 38,953,212.45 40,712,592.60 operational activities Subtotal of cash inflow from 5,582,275,772.58 4,667,774,850.86 operational activities Cash paid for merchandise and 4,827,278,072.02 3,781,495,185.28 services Net increase in loans and advances to customers Net increase in deposits with the Central Bank and other financial institutions Cash paid for original insurance contract claims Net increase in financial assets held for trading purpose Net increase in loans to banks and other financial institutions Cash paid for interests, service charges and commissions Cash paid for policy dividends 24 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Cash paid to and for employees 1,591,249,215.21 1,247,603,790.17 Cash paid for taxes and surcharges 517,455,490.85 392,555,916.83 Other cashes paid for operational 374,780,207.41 532,415,118.72 activities Subtotal of cash outflow from 7,310,762,985.49 5,954,070,011.00 operational activities Net cash flow from operational -1,728,487,212.91 -1,286,295,160.14 activities II. Cash flow from investment activities: Cash from disposal of investments 106,300,000.00 Cash from investment gains 21,168.84 620,911.02 Net cash from disposal of fixed assets, intangible assets and other 3,514,007.57 164,288.72 long-term assets Net cash from disposal of subsidiaries and other business units Other received cashes related to 2,853,407.03 investment activities Subtotal of cash inflow from 6,388,583.44 107,085,199.74 investment activities Cash paid for purchase and construction of fixed assets, intangible 134,928,482.99 101,042,468.25 assets and other long-term assets Cash paid for investments 12,200,000.00 126,300,000.00 Net increase in pledge loans Net cash paid for acquisition of 93,019,565.77 subsidiaries and other business units Other cashes paid for investment 19,920,975.30 80,892,025.18 activities Subtotal of cash outflow from 167,049,458.29 401,254,059.20 investment activities Net cash flow from investment -160,660,874.85 -294,168,859.46 activities III. Cash flow from financing activities: Cash from absorbing investments 15,949,250.00 4,400,000.00 Including: cash from subsidiaries 15,949,250.00 4,400,000.00 25 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. absorbing investments by minority shareholders Cash from borrowings 2,694,932,981.06 1,723,234,241.10 Cash from bond issue Other received cashes related to 705,446,141.85 223,726,180.00 financing activities Subtotal of cash inflow from financing 3,416,328,372.91 1,951,360,421.10 activities Cash paid for debts repayment 1,536,335,296.99 1,073,430,976.54 Cash paid for distribution of dividends and profits or payment of 25,649,072.19 16,748,941.37 interests Including: dividends and profits paid to minority shareholders by subsidiaries Other cashes paid for financing 741,523,904.02 547,214,999.99 activities Subtotal of cash outflow from 2,303,508,273.20 1,637,394,917.90 financing activities Net cash flow from financing activities 1,112,820,099.71 313,965,503.20 IV. Impact of fluctuation in exchange -38,821,971.01 -10,211,961.36 rates on cash and cash equivalents V. Net increase in cash and cash -815,149,959.06 -1,276,710,477.76 equivalents Add: cash and cash equivalents at 3,702,283,803.54 3,062,678,993.88 the start of the period VI. Cash and cash equivalents at the 2,887,133,844.48 1,785,968,516.12 end of the period 6. Cash Flow Statement of the Parent Company Unit: RMB Item This period's amount of occurrence Previous period's amount of occurrence I. Cash flow from operational activities: Cash from sales of merchandise 1,237,857,022.90 2,898,163,592.45 and provision of services Tax refund 178,394,009.37 119,875,350.16 26 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Other received cashes related to 11,635,775.73 4,401,729.41 operational activities Subtotal of cash inflow from 1,427,886,808.00 3,022,440,672.02 operational activities Cash paid for merchandise and 238,102,377.98 475,265,943.57 services Cash paid to and for employees 1,085,112,295.39 850,389,026.13 Cash paid for taxes and surcharges 296,316,540.83 248,509,633.49 Other cashes paid for operational 224,380,235.96 256,284,196.59 activities Subtotal of cash outflow from 1,843,911,450.16 1,830,448,799.78 operational activities Net cash flow from operational -416,024,642.16 1,191,991,872.24 activities II. Cash flow from investment activities: Cash from disposal of investments 100,300,000.00 Cash from investment gains 21,168.84 586,098.69 Net cash from disposal of fixed assets, intangible assets and other 11,510,391.55 1,774,332.18 long-term assets Net cash from disposal of subsidiaries and other business units Other received cashes related to 8,041,013.16 investment activities Subtotal of cash inflow from 19,572,573.55 102,660,430.87 investment activities Cash paid for purchase and construction of fixed assets, intangible 57,245,412.46 15,115,419.84 assets and other long-term assets Cash paid for investments 89,195,750.00 314,992,000.00 Net cash paid for acquisition of subsidiaries and other business units Other cashes paid for investment activities Subtotal of cash outflow from 146,441,162.46 330,107,419.84 investment activities Net cash flow from investment -126,868,588.91 -227,446,988.97 27 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. activities III. Cash flow from financing activities: Cash from absorbing investments Cash from borrowings 1,213,811,815.43 400,000,000.00 Cash from bond issue Other received cashes related to 360,369,553.55 99,088,354.50 financing activities Subtotal of cash inflow from financing 1,574,181,368.98 499,088,354.50 activities Cash paid for debts repayment 546,970,000.00 200,000,000.00 Cash paid for distribution of dividends and profits or payment of 16,701,289.76 5,127,142.86 interests Other cashes paid for financing 928,248,678.61 1,691,125,187.17 activities Subtotal of cash outflow from 1,491,919,968.37 1,896,252,330.03 financing activities Net cash flow from financing activities 82,261,400.61 -1,397,163,975.53 IV. Impact of fluctuation in exchange -155,662.94 -315,485.45 rates on cash and cash equivalents V. Net increase in cash and cash -460,787,493.40 -432,934,577.71 equivalents Add: cash and cash equivalents at 603,430,209.42 524,670,812.68 the start of the period VI. Cash and cash equivalents at the 142,642,716.02 91,736,234.97 end of the period II. Adjustments to Financial Statements 1. Adjustment to financial statements at the beginning of the year during the implementation of new accounting standards for financial instruments, new income standards or new lease standards for the first time √ Applicable □ Not applicable Consolidated Balance Sheet Unit: RMB Item December 31, 2018 January 1, 2019 Adjusted amount Current assets: 28 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Monetary fund 4,160,153,847.06 4,160,153,847.06 Notes receivable and 12,577,066,194.44 12,577,066,194.44 accounts receivable Including: notes 2,385,693,417.06 2,385,693,417.06 receivable Accounts 10,191,372,777.38 10,191,372,777.38 receivable Pre-payments 126,891,259.00 126,891,259.00 Other receivables 398,170,769.40 398,170,769.40 Including: interests 6,754,941.00 6,754,941.00 receivable Inventory 3,035,579,709.14 3,035,579,709.14 Non-current assets due 578,733,057.27 578,733,057.27 within 1 year Other current assets 402,255,078.05 402,255,078.05 Subtotal of current assets 21,278,849,914.36 21,278,849,914.36 Non-current assets: Financial assets 82,970,227.00 NA -82,970,227.00 available for sale Long-term receivables 1,861,485,568.28 1,861,485,568.28 Long-term equity 185,872,021.58 185,872,021.58 investment Other non-current NA 82,970,227.00 82,970,227.00 financial assets Investment properties 346,831,376.55 346,831,376.55 Fixed assets 1,407,471,330.83 1,407,471,330.83 Projects under 226,191,587.11 226,191,587.11 construction Intangible assets 372,467,409.09 372,467,409.09 Goodwill 109,745,412.21 109,745,412.21 Long-term prepaid 37,117,918.55 37,117,918.55 expenses Deferred income tax 425,319,406.98 425,319,406.98 assets Other non-current assets 16,277,605.61 16,277,605.61 Subtotal of non-current assets 5,071,749,863.79 5,071,749,863.79 Total assets 26,350,599,778.15 26,350,599,778.15 29 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Current liabilities: Short-term loan 1,851,709,561.83 1,851,709,561.83 Trading financial NA 38,602,602.30 38,602,602.30 liabilities Financial liabilities measured at fair value with 38,602,602.30 NA -38,602,602.30 changes recognized into current profit and loss Notes payable and 7,461,315,698.99 7,461,315,698.99 accounts payable Received pre-payments 343,297,891.20 343,297,891.20 Payroll payable 1,124,358,611.94 1,124,358,611.94 Tax payable 599,478,049.81 599,478,049.81 Other payables 1,051,537,094.97 1,051,537,094.97 Including: interests 4,745,203.31 4,745,203.31 payable Non-current liabilities 25,500,000.00 25,500,000.00 due within 1 year Other current liabilities 70,845,639.51 70,845,639.51 Subtotal of current liabilities 12,566,645,150.55 12,566,645,150.55 Non-current liabilities: Long-term loan 179,000,000.00 179,000,000.00 Expected liabilities 193,761,170.12 193,761,170.12 Deferred income 58,693,533.40 58,693,533.40 Deferred income tax 50,137,969.76 50,137,969.76 liabilities Other non-current 399,096,280.89 399,096,280.89 liabilities Subtotal of non-current 880,688,954.17 880,688,954.17 liabilities Total liabilities 13,447,334,104.72 13,447,334,104.72 Shareholders' equity: Share capital 2,997,621,930.00 2,997,621,930.00 Capital reserves 1,501,180,862.83 1,501,180,862.83 Less: treasury share 807,733,586.00 807,733,586.00 Other comprehensive 10,337,164.41 10,337,164.41 incomes 30 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Surplus reserves 1,246,369,430.91 1,246,369,430.91 Undistributed profits 7,670,983,116.33 7,670,983,116.33 Total shareholders' equity attributable to the parent 12,618,758,918.48 12,618,758,918.48 company Minority shareholders' 284,506,754.95 284,506,754.95 equity Total shareholders' equity 12,903,265,673.43 12,903,265,673.43 Total liabilities and 26,350,599,778.15 26,350,599,778.15 shareholders' equity Notes In accordance with Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments, Accounting Standards for Business Enterprises No. 23 - Transfer of Financial Assets and Accounting Standards for Business Enterprises No. 24 - Hedge Accounting promulgated by the Ministry of Finance on March 31, 2017 and the Accounting Standard for Business Enterprises No. 37 - Presentation of Financial Instruments revised and published by the Ministry of Finance on May 2, 2017 (collectively referred to as the "New Accounting Standards for Financial Instruments"), domestic listed companies are required to implement accordingly starting from January 1, 2019. According to the requirements in the above revised accounting standards, the Company started to implement the new standards since January 1, 2019. The Company adjusted the items previously listed as financial liabilities measured at fair value with changes recognized into current profit and loss to trading financial liabilities; the equity investment measured using cost method and listed as available-for-sale financial assets to other non-current financial assets. Balance Sheet of the Parent Company Unit: RMB Item December 31, 2018 January 1, 2019 Adjusted amount Current assets: Monetary fund 611,190,236.01 611,190,236.01 Notes receivable and 5,551,148,625.96 5,551,148,625.96 accounts receivable Including: notes 952,572,702.92 952,572,702.92 receivable Accounts 4,598,575,923.04 4,598,575,923.04 receivable Pre-payments 26,772,044.53 26,772,044.53 Other receivables 6,954,655,863.03 6,954,655,863.03 Including: interests 42,500.00 42,500.00 receivable Inventory 120,181,267.85 120,181,267.85 31 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Non-current assets due 50,793,137.80 50,793,137.80 within 1 year Other current assets 24,858,982.78 24,858,982.78 Subtotal of current assets 13,339,600,157.96 13,339,600,157.96 Non-current assets: Financial assets 80,496,000.00 NA -80,496,000.00 available for sale Long-term receivables 160,299,143.83 160,299,143.83 Long-term equity 3,001,639,428.55 3,001,639,428.55 investment Other non-current NA 80,496,000.00 80,496,000.00 financial assets Investment properties 183,321,198.72 183,321,198.72 Fixed assets 496,363,638.38 496,363,638.38 Projects under 151,072,585.67 151,072,585.67 construction Intangible assets 170,879,747.04 170,879,747.04 Long-term prepaid 28,927,258.54 28,927,258.54 expenses Deferred income tax 40,821,902.57 40,821,902.57 assets Other non-current assets 929,380.00 929,380.00 Subtotal of non-current assets 4,314,750,283.30 4,314,750,283.30 Total assets 17,654,350,441.26 17,654,350,441.26 Current liabilities: Short-term loan 1,380,000,000.00 1,380,000,000.00 Notes payable and 1,065,528,900.01 1,065,528,900.01 accounts payable Received pre-payments 80,361,211.04 80,361,211.04 Payroll payable 817,723,936.19 817,723,936.19 Tax payable 351,294,836.50 351,294,836.50 Other payables 1,060,909,330.56 1,060,909,330.56 Including: interests 2,416,340.30 2,416,340.30 payable Other current liabilities 6,464,333.12 6,464,333.12 Subtotal of current liabilities 4,762,282,547.42 4,762,282,547.42 32 2019 Q1 Report of Zhejiang Dahua Technology Co., Ltd. Non-current liabilities: Expected liabilities 3,396,100.00 3,396,100.00 Other non-current 23,684,423.74 23,684,423.74 liabilities Subtotal of non-current 27,080,523.74 27,080,523.74 liabilities Total liabilities 4,789,363,071.16 4,789,363,071.16 Shareholders' equity: Share capital 2,997,621,930.00 2,997,621,930.00 Capital reserves 1,497,801,068.88 1,497,801,068.88 Less: treasury share 807,733,586.00 807,733,586.00 Surplus reserves 1,246,369,430.91 1,246,369,430.91 Undistributed profits 7,930,928,526.31 7,930,928,526.31 Total shareholders' equity 12,864,987,370.10 12,864,987,370.10 Total liabilities and 17,654,350,441.26 17,654,350,441.26 shareholders' equity Notes 2. Explanation on the retroactive adjustment to previous comparative data during the implementation of new accounting standards for financial instruments and new lease standards for the first time □ Applicable √ Not applicable III. Audit Report Whether the Q1 report has been audited □ Yes √ No The Q1 report of the Company has not been audited yet. Board of Directors of Zhejiang Dahua Technology Co., Ltd. Chairman: Fu Liquan April 26, 2019 33