Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 Guangdong Provincial Expressway Development Co.,Ltd. The First Quarterly Report 2016 April 2016 1 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 I. Important Notice The Board of Directors and the Supervisory Committee of the Company and its directors, supervisors and senior executives should guarantee the reality, accuracy and completion of the quarterly report, there are no any fictitious statements, misleading statements or important omissions carried in this report, and shall take legal responsibilities, individual and or joint. All of the directors presented the board meeting at which this Quarterly Report was examined. Mr.Zhu Zhanliang, Leader, Mr.Wang Chunhua,General Manager, Mr. Fang Zhi, Chief of the accounting work, Ms.Liu Xiaomei, Chief of the accounting organ (chief of accounting ) hereby confirm the authenticity and completeness of the financial report enclosed in this report. 2 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 II. Main financial data and changes of shareholders (1)Main financial data and financial index Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting error correction or not. □ Yes √ No Changes of this period over This period Same period of last year same period of last year (%) Operating income(RMB) 384,703,107.66 357,469,802.88 7.62% Net profit attributable to the shareholders 127,187,345.72 89,949,365.89 41.40% of the listed company(RMB) Net profit after deducting of non-recurring gain/loss attributable to the shareholders of 126,779,718.66 87,373,228.21 45.10% listed company(RMB) Cash flow generated by business operation, 274,943,372.62 240,651,340.48 14.25% net(RMB) Basic earning per share(RMB/Share) 0.10 0.07 42.86% Diluted gains per 0.10 0.07 42.86% share(RMB/Share)(RMB/Share) Weighted average return on equity 2.44% 1.78% 0.66% (%) Changes of this period-end End of this period End of last period over same period-end of last year(%) Gross assets(RMB) 12,131,854,608.39 12,107,767,967.86 0.20% Net assets attributable to the shareholders 5,222,375,592.56 5,209,289,822.59 0.25% of the listed company(RMB) Items and amount of non-current gains and losses √ Applicable □ Not applicable In RMB Amount (Year-beginning to Items Notes the end of the report period.) Other non-operating income and expenditure except for the 721,970.60 aforementioned items Less: Amount of influence of income tax 134,718.66 3 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 Amount of influence of minority interests(After tax) 179,624.88 Total 407,627.06 -- For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as recurring gains and losses, it is necessary to explain the reason. □ Applicable√ Not applicable None of Non-recurring gain /loss items recognized as recurring gain /loss/items as defined by the information disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period. 4 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 II. Total Shareholders and Shares Held by Top Ten Shareholders at the End of the Reporting Period 1. About Total Common Shareholders, Total Preference Shareholders with the Voting Power Recovered and the Shares Held by Top Ten Common Shareholders In shares Total preference shareholders Total number of common with the voting power 80,002 0 shareholders at the period-end recovered at the end of the reporting period(if any) Shares held by the top 10 shareholders Amount of Pledging or freezing Properties of Share tradable shares Shareholder name Quantity Status of the shareholder proportion % with Conditional Quantity shares held Guangdong State-owned legal Communication 40.84% 513,356,893 409,977,151 person Group Co., Ltd. Domestic Natural Feng Wuchu 1.71% 21,520,979 person Guangdong State-owned legal Expressway Co., 1.56% 19,582,228 19,582,228 person Ltd Haerbin Hali Domestic Natural 1.18% 14,850,682 Industry Co., Ltd person Overseas legal Xinyue Co., Ltd. 1.05% 13,201,086 person Guangdong Yuecai Trust State-owned legal 0.97% 12,174,345 Investment Co., person Ltd. Domestic Natural Li Zhuo 0.75% 9,458,390 person China Everbright Bank Co., Ltd- China Europe Domestic non new dynamic State-owned 0.53% 6,678,925 equity securities Legal person investment fund (LOF) China Securities Domestic non Finance 0.33% 4,144,500 State-owned Corporation 5 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 Limited. Legal person VANGUARD TOTAL Domestic non INTERNATION State-owned 0.28% 3,490,900 AL STOCK Legal person INDEX FUND Shares held by the Top 10 Shareholders of Non-restricted shares Share type Shareholders’ Names Number of the non-restricted shares held Share type Quantity Guangdong Communication Group RMB Common 103,379,742 103,379,742 Co., Ltd. shares RMB Common 19,655,709 shares Foreign shares Feng Wuchu 21,520,979 placed in 1,865,270 domestic exchange RMB Common Haerbin Hali Industry Co., Ltd 14,850,682 14,850,682 shares Foreign shares placed in Xinyue Co., Ltd. 13,201,086 13,201,086 domestic exchange Guangdong Yuecai Trust Investment RMB Common 12,174,345 12,174,345 Co., Ltd. shares RMB Common Li Zhuo 9,458,390 9,458,390 shares China Everbright Bank Co., Ltd- RMB Common China Europe new dynamic equity 6,678,925 6,678,925 shares securities investment fund(LOF) China Securities Finance RMB Common 4,144,500 4,144,500 Corporation Limited. shares Foreign shares VANGUARD TOTAL placed in INTERNATIONAL STOCK INDEX 3,490,900 3,490,900 domestic FUND exchange Foreign shares GUOTAI JUNAN placed in SECURITIES(HONGKONG) 3,388,866 3,388,866 domestic LIMITED exchange 6 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 Guangdong Communication Group Co., Ltd. is the parent company of Guangdong Explanation on associated Expressway Co., Ltd. and Xinyue Co., Ltd.. It is unknown whether there is relationship relationship or concerted action of between other shareholders and whether they are persons taking concerted action specified in the above shareholders the Regulations on Disclosure of Information about Change in Shareholding of Shareholders of Listed Companies. Harbin Hali Industry Co., Ltd. holds 14,849,774 A shares of the Company through stock Note to the top 10 common account with credit transaction and guarantee and holds 908 A shares through ordinary stock stockholders involved in margin account. hold 14,850,682 shares of the Company's stock totally;Li Zhuo holds 9,362,409 A financing & securities lending (If shares of the Company through stock account with credit transaction and guarantee and any) holds95,981 A shares through ordinary stock account, hold9,458,390 shares of the Company's stock totally. Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period. □ Yes √ No The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy –back agreement dealing in reporting period. 2.Total number of preferred shareholders and shareholding of top 10 preferred shareholders by the end of the report period □ Applicable √Not applicable 7 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 III. Significant Events I. Particular about large-margin change of main accounting statement item and financial index and its reason. √ Applicable □ Not applicable (I)Items of balance sheet as compared with the beginning of this year. 1.Monetary capital Increased by RMB 300.90 million and 30.49% over the beginning of the year, mainly due to net cash inflow of RMB 275 million from operating activities, net cash inflow of RMB 85 million from investing activities and net cash outflow of RMB59 million from financing activities. 2. Dividend receivable Increased by RMB 12.38 million and 100% o over the beginning of the year, Balance at the beginning of RMB 0, All are the accrued receivable dividends of Zhaoqing Yuezhao Highway Co.,Ltd. in the current period. 3. Deferred income tax assets Increased by RMB 2.2138 million and 2,122.83% over the beginning of the year, The main reason for the increase is the accounting depreciation of Guangfo Expressway Co. Ltd is more than the tax depreciation, confirming the deferred tax assets. 4. Tax payable Increased by RMB 11.21 million and 29.96% over the beginning of the year, The main reason for the increase is the increase in the total profits of the current period, which leads to the increase of the enterprise income tax in the current period 5. Interest payable Increased by RMB 16.66 million and 75.48% over the beginning of the year, The main reason for the increase is the provision of RMB 16.97 million for the interest of the medium-term notes by the parent company. (II) Items of Income statement as compared with the same period of the previous year 1.Operating income increased by RMB27.23 million and 7.62% year on year, The main reason is that Guangfo Expressway Co., Ltd and Fokai Expressway Co., Ltd have increased their incomes of toll due to the natural increase of traffic volume. 2.Operating cost increased by RMB 18.81 million and 10.88% year on year, The main reasons for the increase are due to the following combined effects of the factors: (1) the depreciation of the road assets of Guangdong Provincial Fokai Expressway Co., Ltd increased RMB 7.94 million and the depreciation of the road assets of Guangfo Expressway Co., Ltd increased RMB 3.80 million; (2) the operating costs of Guangdong Expressway Technology Investment Co., Ltd. increased RMB 5.13 million. 3.Business tax and surcharge increased by RMB0.54 million and 4.24% year on year, The main reason for the increase is that the increase in operating income leads to the increase of tax. 4. Administrative expense decreased by RMB 6.97 million and 18.83% year on year, Mainly due to the management strengthening and the cost-saving 5. Financial expenses decreased by RMB 23.60 million and 24.63% year on year, The main reasons for the reduction are: (1) the total amount of loans of Guangdong Provincial Fokai Expressway Co., Ltd decreased RMB 400 million compared with the previous period, resulted in a corresponding reduction of interest payments; (2) the effect of the lower interest rate of the loan. 6. Investment income Increased by RMB14.81 million and 16.55% year on year,The main reason for the increase is the confirming of the increase of the investment gains on the company's share-participating companies that participated in each section of the highway compared with the previous period. 7. Non-operating income Decreased by RMB 4.04 million and 82.89% year on year,The main reason for the decline is due to Guangfo Expressway Co. Ltd received claims of RMB 3.90 million in the previous period, but 8 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 none in the current period. 8. Income tax expenses increased by RMB 6.76million and 27.19% year on year, The reason for the increase is the increase in total profits resulting in the increase in the income tax expense. 9. The net profit for the owners of the parent company increased by RMB 37.24 million and 41.40% year on year due to the combined influence of the above factors. (III) Notes of main items of cash flow statement 1. Cash received from absorption of investment Mainly accounting the cash dividends gained due to the equity investments. This term increased by RMB 40.54 million and 44.82% year on year The reason is the increase on the cash dividends the company received in the current period. 2. Cash paid for purchase or construction of fixed assets, intangible assets and other long-term assets The amount of this item decreased by RMB 21.40 million and 31.52% year on year,The main reason for the reduction is that Guangdong Provincial Fokai Expressway Co., Ltd’s payments on the Fokai Expressway’s expansion and the major engineering repair decreased compared with the previous period. 3. Cash paid for investment The amount of this item decreased by RMB 10.43 million and 100% year on year,The main reason for the reduction is the company invested on the reverse repo bond products in the previous period, but none happened in the current period. 4. Cash paid for debt repayment decreased by RMB 150 million and 100% year on year, Guangdong Provincial Fokai Expressway Co., Ltd repaid the bank loans of RMB 150 million in the previous period, but none in the current period. II. The progress of significant events and influence, as well as the analysis and explanation on resolving proposal. √Applicable □Not applicable The Company received the Approval of the Share-Issuing to Parties such as Guangdong Provincial Expressway Co., Ltd to Purchase Assets and Raise Matching Funds by Guangdong Provincial Expressway Co., Ltd from the CSRC. (Zheng Jian Xu ke No.230-2016), which means the scheme of the Company’s share-issuing and paying cash to purchase assets and raise matching funds(hereinafter referred to as “the major asset restructuring”) was approved by CSRC. The company had disclosed the main contents of the approval on Feb 6, 2016. The company disclosed the announcement on the implementation of the major asset restructuring on April 6, 2016. The status of the implementation of the major asset restructuring is as follows: 1. The transaction parties of Guangdong Provincial Expressway Development Co., Ltd and Guangdong Provincial Highway Construction Co., Ltd have been actively promoting the prerequisite procedures for assets delivery. 2. The Proposal of the Annual Profit Distribution Plan of Year 2015 was examined and approved in the 26th board meeting of the company’s 7th session board of directors, of which per 10shares will gain cash dividends of RMB 1.50(Tax inclusive), and the plan still needs to be approved in the general shareholder meeting which will be convened on Apr 28, 2016. 3. According to the Related Transaction Report on Share Issuing and Paying Cash to purchase Assets and Raise Matching Funds by Guangdong Provincial Expressway Development Co., Ltd, if there are any share dividend or/and cash dividend distribution events such as dividend distribution, share-granting, capital reserve converted for increasing shares, newly issuing shares and share allotment occurred in the period commenced from the base 9 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 date of issuing shares and to the final completed date of issuing shares, there shall be corresponding adjustment in the quantity and the price of the share-issuing. Hence, after the completion of the annual cash dividends distribution of year 2015, the company shall adjust the quantity and the price of the share-issuing accordingly, then carry out the implementation work of the major asset restructuring, including but not limited to the works of the asset delivery and the share-issuing related to the major asset restructuring.The company will continuously impel the implementation of the major asset restructuring and timely disclose its implementation status according to the relevant provisions. Description of the website for Overview of material matters Date of disclosing disclosing provisional announcements The share-trading suspension announcement on the deliberation by January 8,2016 www.cninfo.com.cn CSRC’s M&A committee for the company’s major asset restructuring Announcement on the Company’s Significant Asset Reorganization Adopted January 15,2016 www.cninfo.com.cn by Mergers and Acquisitions Committee of CSRC and Trade Resumption Announcement on the acquirement of CSRC’s approval for the company’s major February 6,2016 www.cninfo.com.cn asset restructuring The revise explanation on the report of the related transaction and the issuance of February 6,2016 www.cninfo.com.cn shares and paying cash to purchase the assets and raise matching funds(Revised) The report of the related transaction and the issuance of shares and paying cash to February 6,2016 www.cninfo.com.cn purchase the assets and raise matching funds(Revised) Announcement on the Implementation April 6,2016 www.cninfo.com.cn Status of the Major Asset Restructuring III. Commitments finished in implementation by the Company, shareholders, actual controller, acquirer, directors, supervisors, senior executives or other related parties in the reporting period and commitments unfinished in implementation at the end of the reporting period □ Applicable √Not applicable During the reporting period, there is no commitment that the company, shareholders, actual controller, offeror, directors, supervisors, senior management or other related parties have fulfilled during the reporting period and have not yet fulfilled by the end of reporting period. IV. Anticipation of Business Performance from January to June, 2016 Alert of loss or significant change in net profit from the beginning of year to the end of next report period or comparing with the 10 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 same period of last year, and statement of causations. □ Applicable √Not applicable V. Investment in securities √ Applicable □Not applicable Number Sharehold Number of shares Sharehold Book ing of shares Initial held at ing balance at Gain. loss proportio held at investm the proportio the end of of the Security Security Short form n at the the end of Accounti Source of ent beginning n at the the reporting category code of security beginning the ng items the shares cost(RM of the end of the reporting period of the reporting B) reporting reporting period (RMB) reporting period period(sh period(%) (RMB) period(%) (shares) ares) Financial China 517,560, 235,254,9 235,254,9 assets Subscribe Stock 601818 Everbright 0.50% 0.50% 876.80 44 44 available on 2009 Bank for sale 517,560, 235,254,9 235,254,9 Total -- -- -- -- 876.80 44 44 Disclosure date for the notice of July , 2009 approval by the Board (If any) Disclosure date for the notice of approval by shareholders’ August 7, 2008 Meeting (If any) VI. Investment in derivatives □ Applicable √Not applicable The Company had no derivatives investment in Period. VII. Registration form of such Activities as Reception, Research, Communication, Interview in the Reporting Period √Applicable □Not applicable Reception time Way of reception Types of visitors Basic index The main contents of the research included: (1) the status of the company's daily operation; (2) the analysis of the company’s financial data; (3) the March 31,2016 Onsite investigation Organization company's development strategy; (4) the company’s analysis on its industry. (b) The main documents for the research: regular reports and other public information of the company 11 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 VIII. External guarantee get out of line □ Applicable √Not applicable The Company has no external guarantee get out of the line in the Period IX. Controlling shareholder and its related parties occupying non-business capital of the listed company □ Applicable √Not applicable There are no controlling shareholder and its related parties occupying non-business capital of the listed company in Period 12 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 IV. Financial Statement I. Financial statement 1. Consolidated balance sheet Prepared by:Guangdong Provincial Expressway Development Co., Ltd. In RMB Items At the end of term Beginning of term Current asset: Monetary fund 1,287,640,539.06 986,737,635.38 Settlement provision Outgoing call loan Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Bill receivable Account receivable 59,694,250.62 48,147,335.85 Prepayments 645,234.93 1,914,808.89 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Interest receivable Dividend receivable 12,376,405.10 Other account receivable 15,932,565.63 16,436,699.69 Repurchasing of financial assets Inventories 800,998.80 800,998.80 Assets held for sales Non-current asset due in 1 year Other current asset Total of current assets 1,377,089,994.14 1,054,037,478.61 Non-current assets: Loans and payment on other’s behalf disbursed Disposable financial asset 1,680,781,141.73 1,796,056,064.29 13 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 Expired investment in possess Long-term receivable Long term share equity investment 2,596,222,384.14 2,635,251,969.72 Property investment 3,568,131.13 3,684,184.48 Fixed assets 6,439,098,029.41 6,591,106,343.61 Construction in progress 23,302,184.20 17,125,070.14 Engineering material 1,549,556.00 1,549,556.00 Fixed asset disposal Production physical assets Gas & petrol Intangible assets 3,582,361.33 4,099,611.48 R & D petrol Goodwill Long-germ expenses to be amortized 3,123,719.10 3,576,970.11 Deferred income tax asset 2,318,114.66 104,286.87 Other non-current asset 1,218,992.55 1,176,432.55 Total of non-current assets 10,754,764,614.25 11,053,730,489.25 Total of assets 12,131,854,608.39 12,107,767,967.86 Current liabilities Short-term loans Loan from Central Bank Deposit received and hold for others Call loan received Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities Bill payable Account payable 129,364,999.39 154,217,021.14 Advance payment 5,307,842.88 4,709,312.20 Selling of repurchased financial assets Fees and commissions receivable Employees’ wage payable 3,239,224.99 3,105,804.37 Tax payable 48,620,525.97 37,412,104.25 Interest payable 38,744,054.18 22,079,344.97 14 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 Dividend payable 11,679,234.33 11,681,423.74 Other account payable 170,493,503.03 186,766,854.50 Reinsurance fee payable Insurance contract provision Entrusted trading of securities Entrusted selling of securities Liabilities held for sales Non-current liability due in 1 year 1,309,080,000.00 1,309,080,000.00 Other current liability Total of current liability 1,716,529,384.77 1,729,051,865.17 Non-current liabilities: Long-term loan 4,081,760,000.00 4,081,760,000.00 Bond payable Including:preferred stock Sustainable debt Long-term payable 52,022,210.11 52,022,210.11 Long-term payable employees’s remuneration Special payable Expected liabilities Deferred income Deferred income tax liability 116,322,792.69 116,526,766.79 Other non-current liabilities Total non-current liabilities 4,250,105,002.80 4,250,308,976.90 Total of liability 5,966,634,387.57 5,979,360,842.07 Owners’ equity Share capital 1,257,117,748.00 1,257,117,748.00 Other equity instrument Including:preferred stock Sustainable debt Capital reserves 1,534,777,775.55 1,534,772,601.74 Less:Shares in stock Other comprehensive income 364,645,163.20 479,920,085.76 Special reserves 15 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 Surplus reserves 279,797,987.31 279,797,987.31 Common risk provision Undistributed profit 1,786,036,918.50 1,657,681,399.78 Total of owner’s equity belong to the 5,222,375,592.56 5,209,289,822.59 parent company Minority shareholders’ equity 942,844,628.26 919,117,303.20 Total of owners’ equity 6,165,220,220.82 6,128,407,125.79 Total of liabilities and owners’ equity 12,131,854,608.39 12,107,767,967.86 Legal Representative: Zhu Zhanliang Person in charge of accounting:Fang Zhi Accounting Dept Leader: Liu Xiaomei 2.Parent Company Balance Sheet In RMB Items At the end of term Beginning of term Current asset: Monetary fund 1,058,067,291.20 822,286,507.11 Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Bill receivable Account receivable Prepayments 500,000.00 1,994,822.56 Interest receivable 128,791.66 137,958.34 Dividend receivable 12,376,405.10 Other account receivable 2,509,103.01 2,256,822.99 Inventories Assets held for sales Non-current asset due in 1 year Other current asset Total of current assets 1,073,581,590.97 826,676,111.00 Non-current assets: Disposable financial asset 1,680,781,141.73 1,796,056,064.29 Expired investment in possess Long-term receivable 16 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 Long term share equity investment 5,014,658,953.66 5,053,688,539.24 Property investment 3,315,992.88 3,432,046.23 Fixed assets 3,378,814.10 3,734,470.83 Construction in progress Engineering material Fixed asset disposal Production physical assets Gas & petrol Intangible assets 977,903.38 1,056,003.37 R & D petrol Goodwill Long-germ expenses to be amortized 2,836,135.37 3,261,555.68 Deferred income tax asset Other non-current asset 75,000,000.00 75,000,000.00 Total of non-current assets 6,780,948,941.12 6,936,228,679.64 Total of assets 7,854,530,532.09 7,762,904,790.64 Current liabilities Short-term loans Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities Bill payable Account payable Advance payment Employees’ wage payable 1,101,461.53 1,022,391.27 Tax payable 4,071,066.37 4,915,239.62 Interest payable 34,538,315.92 17,625,272.46 Dividend payable 11,679,234.33 11,681,423.74 Other account payable 15,671,140.48 6,378,723.77 Classified as held for sale debt Non-current liability due in 1 year 997,000,000.00 997,000,000.00 Other current liability 434,353,329.87 309,154,118.44 Total of current liability 1,498,414,548.50 1,347,777,169.30 Non-current liabilities: 17 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 Long-term loan 1,500,000,000.00 1,500,000,000.00 Bond payable Including:preferred stock Sustainable debt Long-term payable 52,022,210.11 52,022,210.11 Long-term payable to employees Special payable Expected liabilities Deferred income Deferred income tax liability Other non-current liabilities Total of Non-current liabilities 1,552,022,210.11 1,552,022,210.11 Total of liability 3,050,436,758.61 2,899,799,379.41 Owners’ equity Share capital 1,257,117,748.00 1,257,117,748.00 Other equity instrument Including:preferred stock Sustainable debt Capital reserves 1,534,925,916.30 1,534,920,742.49 Less:Shares in stock Other comprehensive income 364,645,163.20 479,920,085.76 Special reserves Surplus reserves 279,797,987.31 279,797,987.31 Undistributed profit 1,367,606,958.67 1,311,348,847.67 Total of owners’ equity 4,804,093,773.48 4,863,105,411.23 Total of liabilities and owners’ equity 7,854,530,532.09 7,762,904,790.64 3.Consolidated Income statement In RMB Items Amount in this period Amount in last period I. Income from the key business 384,703,107.66 357,469,802.88 Incl:Business income 384,703,107.66 357,469,802.88 Interest income Insurance fee earned 18 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 Fee and commission received II. Total business cost 307,231,221.67 318,457,896.36 Incl:Business cost 191,719,596.88 172,908,806.38 Interest expense Fee and commission paid Insurance discharge payment Net claim amount paid Insurance policy dividend paid Insurance policy dividend paid Reinsurance expenses Business tax and surcharge 13,214,271.44 12,676,975.39 Sales expense Administrative expense 30,064,936.93 37,040,337.40 Financial expenses 72,232,416.42 95,831,777.19 Asset impairment loss Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 104,346,091.82 89,529,756.25 Incl: investment gains from affiliates 103,346,819.52 89,100,075.80 Gains from currency exchange(“-”for loss) III. Operational profit(“-”for loss) 181,817,977.81 128,541,662.77 Add :Non-operational income 834,535.36 4,877,878.15 Including:Income from disposal of non-current assets Less:Non business expenses 112,564.76 292,090.94 Incl:Loss from disposal of non-current assets IV.Total profit(“-”for loss) 182,539,948.41 133,127,449.98 Less:Income tax expenses 31,625,277.63 24,865,313.61 V. Net profit 150,914,670.78 108,262,136.37 Net profit attributable to the owners of 127,187,345.72 89,949,365.89 parent company Minority shareholders’ equity 23,727,325.06 18,312,770.48 VI. Other comprehensive income -115,274,922.56 -35,288,241.60 19 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 Net of profit of other comprehensive inco me attributable to owners of the parent co -115,274,922.56 -35,288,241.60 mpany. (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 1.Re-measurement of defined benefit pla ns of changes in net debt or net assets 2.Other comprehensive income under the equity method investee can not be reclass ified into profit or loss. (II) Other comprehensive income that will be -115,274,922.56 -35,288,241.60 reclassified into profit or loss. 1.Other comprehensive income under the equity method investee can be reclassifie d into profit or loss. 2.Gains and losses from changes in fair v -115,274,922.56 -35,288,241.60 alue available for sale financial assets 3.Held-to-maturity investments reclassifi ed to gains and losses of available for sal e financial assets 4.The effective portion of cash flow hedg es and losses 5.Translation differences in currency fina ncial statements 6.Other Net of profit of other comprehensive inco me attributable to Minority shareholders’ equity VII. Total comprehensive income 35,639,748.22 72,973,894.77 Total comprehensive income attributable 11,912,423.16 54,661,124.29 to the owner of the parent company Total comprehensive income 23,727,325.06 18,312,770.48 attributable minority shareholders VIII. Earnings per share (I)Basic earnings per share 0.10 0.07 20 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 (II)Diluted earnings per share 0.10 0.07 If there are entities merged under common control, their net profit realized before the merger were totaled to RMB***. While it was RMB*** previous period. Legal Representative: Zhu Zhanliang Person in charge of accounting:Fang Zhi Accounting Dept Leader: Liu Xiaomei 4. Income statement of the Parent Company In RMB Items Amount in this period Amount in last period I. Income from the key business 2,165,724.61 5,028,239.96 Less:Business cost 116,053.35 116,053.35 Business tax and surcharge 121,280.31 306,989.04 Sales expense Administrative expense 13,076,357.09 20,606,795.44 Financial expenses 36,940,014.68 43,732,633.73 Asset impairment loss Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 104,346,091.82 90,453,462.46 Incl: investment gains from affiliates 103,346,819.52 90,023,782.01 II. Operational profit(“-”for loss) 56,258,111.00 30,719,230.86 Add :Non-operational income Including:Income from disposal of non-current assets Less:Non business expenses 7,697.44 Incl:Loss from disposal of non-current assets III.Total profit(“-”for loss) 56,258,111.00 30,711,533.42 Less:Income tax expenses IV. Net profit(“-”for net loss) 56,258,111.00 30,711,533.42 V.Net of profit of other comprehensive i -115,274,922.56 -35,288,241.60 ncome (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 21 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 1.Re-measurement of defined benefit pl ans of changes in net debt or net assets 2.Other comprehensive income under th e equity method investee can not be recl assified into profit or loss. ( II ) Other comprehensive income that will b -115,274,922.56 -35,288,241.60 e reclassified into profit or loss. 1.Other comprehensive income under th e equity method investee can be reclassi fied into profit or loss. 2.Gains and losses from changes in fair -115,274,922.56 -35,288,241.60 value available for sale financial assets 3.Held-to-maturity investments reclassif ied to gains and losses of available for s ale financial assets 4.The effective portion of cash flow hed ges and losses 5.Translation differences in currency fin ancial statements 6.Other VI. Total comprehensive income -59,016,811.56 -4,576,708.18 VII. Earnings per share: (I)Basic earnings per share 0.04 0.02 (II)Diluted earnings per share 0.04 0.02 5. Consolidated Cash flow statement In RMB Items Amount in this period Amount in last period I.Cash flows from operating activities Cash received from sales of goods or 371,262,765.70 317,519,096.15 rending of services Net increase of customer deposits and capital kept for brother company Net increase of loans from central bank Net increase of inter-bank loans from 22 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 other financial bodies Cash received against original insurance contract Net cash received from reinsurance business Net increase of client deposit and investment Net increase of the financial assets that are measured at fair value and whose movement is counted to the current gain and loss Cash received as interest, processing fee and commission Net increase of inter-bank fund received Net increase of repurchasing business Tax returned Other cash received from business 16,099,565.32 20,833,676.79 operation Sub-total of cash inflow 387,362,331.02 338,352,772.94 Cash paid for purchasing of 12,403,004.65 16,967,355.13 merchandise and services Net increase of client trade and advance Net increase of savings n central bank and brother company Cash paid for original contract claim Cash paid for interest, processing fee and commission Cash paid for policy dividend Cash paid to staffs or paid for staffs 52,008,190.07 56,500,358.92 Taxes paid 34,231,437.76 14,267,952.73 Other cash paid for business activities 13,776,325.92 9,965,765.68 Sub-total of cash outflow from 112,418,958.40 97,701,432.46 business activities Cash flow generated by business 274,943,372.62 240,651,340.48 operation, net II.Cash flow generated by investing 23 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 Cash received from investment retrieving Cash received as investment gains 130,999,272.30 90,453,685.45 Net cash retrieved from disposal of fixed assets, intangible assets, and 126,657.00 500.00 other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received Sub-total of cash inflow due to 131,125,929.30 90,454,185.45 investment activities Cash paid for construction of fixed assets, intangible assets and other 46,501,667.37 67,900,945.14 long-term assets Cash paid as investment 10,428,570.00 Net increase of loan against pledge Net cash received from subsidiaries and other operational units Other cash paid for investment activities Sub-total of cash outflow due to 46,501,667.37 78,329,515.14 investment activities Net cash flow generated by investment 84,624,261.93 12,124,670.31 III.Cash flow generated by financing Cash received as investment Incl: Cash received as investment from minor shareholders Cash received as loans Cash received from bond placing Other financing –related ash received 5,173.81 Sub-total of cash inflow from financing 5,173.81 activities Cash to repay debts 150,000,000.00 Cash paid as dividend, profit, or 58,218,904.68 76,521,124.54 interests Incl: Dividend and profit paid by subsidiaries to minor shareholders 24 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 Other cash paid for financing activities 451,000.00 3,000,000.00 Sub-total of cash outflow due to 58,669,904.68 229,521,124.54 financing activities Net cash flow generated by financing -58,664,730.87 -229,521,124.54 IV. Influence of exchange rate alternation on cash and cash 269.98 equivalents V.Net increase of cash and cash 300,902,903.68 23,255,156.23 equivalents Add: balance of cash and cash 986,737,635.38 561,800,403.72 equivalents at the beginning of term VI ..Balance of cash and cash 1,287,640,539.06 585,055,559.95 equivalents at the end of term 6. Cash Flow Statement of the Parent Company In RMB Items Amount in this period Amount in last period I.Cash flows from operating activities Cash received from sales of goods or 1,048,494.68 1,852,718.34 rending of services Tax returned Other cash received from business 137,956,058.57 843,838.72 operation Sub-total of cash inflow 139,004,553.25 2,696,557.06 Cash paid for purchasing of merchandise and services Cash paid to staffs or paid for staffs 10,038,866.36 15,423,043.56 Taxes paid 300,681.47 424,191.47 Other cash paid for business activities 2,099,374.84 12,031,758.75 Sub-total of cash outflow from 12,438,922.67 27,878,993.78 business activities Cash flow generated by business 126,565,630.58 -25,182,436.72 operation, net II.Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains 130,999,272.30 90,453,685.45 25 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 1,074,625.01 3,129,894.45 Sub-total of cash inflow due to 132,073,897.31 93,583,579.90 investment activities Cash paid for construction of fixed assets, intangible assets 229,745.41 and other long-term assets Cash paid as investment 10,428,570.00 Net cash received from subsidiaries and other operational units Other cash paid for investment activities Sub-total of cash outflow due to 10,658,315.41 investment activities Net cash flow generated by investment 132,073,897.31 82,925,264.49 III.Cash flow generated by financing Cash received as investment Cash received as loans Cash received from bond placing Other financing –related ash received 5,173.81 Sub-total of cash inflow from 5,173.81 financing activities Cash to repay debts Cash paid as dividend, profit, or 22,412,917.61 24,576,045.58 interests Other cash paid for financing activities 451,000.00 3,000,000.00 Sub-total of cash outflow due to 22,863,917.61 27,576,045.58 financing activities Net cash flow generated by financing -22,858,743.80 -27,576,045.58 IV. Influence of exchange rate alternation on cash and cash 269.98 equivalents V.Net increase of cash and cash 235,780,784.09 30,167,052.17 26 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2016 equivalents Add: balance of cash and cash 822,286,507.11 332,632,828.69 equivalents at the beginning of term VI ..Balance of cash and cash 1,058,067,291.20 362,799,880.86 equivalents at the end of term II. Auditor’ report Is the First Quarterly Report be audited? □ Yes √No The First Quarterly report is not audited. 27