Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 Guangdong Provincial Expressway Development Co.,Ltd. The First Quarterly Report 2017 April 2017 1 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 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.Zheng Renfa, Leader, Mr.Wang Chunhua,General Manager, Mr. Fang Zhi, Chief of the accounting work, Ms.Zhou Fang, Chief of the accounting organ (chief of accounting ) hereby confirm the authenticity and completeness of the financial report enclosed in this report. II. Basic information about the company I.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 same Same period of last year This period period of last year (%) Before adjustment After adjustment After adjustment Operating income(RMB) 708,861,624.37 384,703,107.66 656,556,265.87 7.97% Net profit attributable to the shareholders 286,719,172.39 127,187,345.72 189,257,712.78 51.50% of the listed company(RMB) Net profit after deducting of non-recurring gain/loss attributable to the shareholders of 286,448,939.47 126,779,718.66 128,692,184.78 122.58% listed company(RMB) Cash flow generated by business operation, 479,844,717.92 274,943,372.62 445,375,345.51 7.74% net(RMB) Basic earning per share(RMB/Share) 0.14 0.10 0.11 27.27% Diluted gains per 0.14 0.10 0.11 27.27% share(RMB/Share)(RMB/Share) 2 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 Weighted average return on equity 3.39% 2.44% 3.21% 0.18% (%) Changes of this period-end over End of last period End of this period same period-end of last year(%) Before adjustment After adjustment After adjustment Gross assets(RMB) 16,371,491,963.52 16,072,445,216.59 16,072,445,216.59 1.86% Net assets attributable to the shareholders 8,622,790,462.58 8,289,020,301.39 8,289,020,301.39 4.03% of the listed company(RMB) The causes of accounting policy changes and the correction of accounting errors Nil 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.) Non-current asset disposal gain/loss(including the write-off part -16,609.06 for which assets impairment provision is made) Govemment subsidies recognized in current gain and loss(excluding those closely related to the Company’s business 197,210.65 and granted under the state’s policies) Other non-business income and expenditures other than the above 223,716.48 Less: Amount of influence of income tax 108,579.48 Amount of influence of minority interests(after tax) 25,505.67 Total 270,232.92 -- 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. 3 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 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 61,784 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 proportion tradable shares Shareholder name Quantity Status of the shareholder % with Conditional Quantity shares held Guangdong State-owned legal Communication 24.55% 513,382,595 410,002,853 person Group Co., Ltd. Guangdong Highway State-owned legal 22.30% 466,325,020 466,325,020 Construction Co., person Ltd, Yadong Fuxing Domestic non Yalian Investment State-owned 9.68% 202,429,149 202,429,149 Pledge 202,429,000 Co., Ltd. Legal person Tibet Yingyue Domestic non Investment State-owned 4.84% 101,214,574 101,214,574 Management Co., Legal person Ltd. Guangdong State-owned legal Expressway Co., 2.53% 52,937,491 52,937,491 person Ltd. Guangfa Domestic non Securities Co., State-owned 1.45% 30,364,372 30,364,372 Ltd. Legal person Domestic natural Feng Wuchu 0.97% 20,384,965 person shares Foreign legal PERSHING LLC 0.90% 18,744,850 person Overseas legal Xinyue Co., Ltd. 0.63% 13,201,086 person Bank of Other 0.61% 12,722,170 4 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 Communications -Hybrid securities investment fund in Huaan strategy optimization 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 19,976,565 shares Foreign shares Feng Wuchu 20,384,965 placed in 408,400 domestic exchange Foreign shares placed in PERSHING LLC 18,744,850 18,744,850 domestic exchange Foreign shares placed in Xinyue Co., Ltd. 13,201,086 13,201,086 domestic exchange Bank of Communications-Hybrid RMB Common securities investment fund in Huaan 12,722,170 12,722,170 shares strategy optimization ICBC-CCB preferred growth RMB Common 11,781,833 11,781,833 hybrid securities investment fund shares Foreign shares GUOTAI JUNAN placed in SECURITIES(HONGKONG) 10,971,862 10,971,862 domestic LIMITED exchange Foreign shares MATTHEWS CHINA DIVIDEND placed in 8,198,481 8,198,481 FUND domestic exchange Truvalue Asset Management-China RMB Common Merchants Bank-China Resources 8,180,310 8,180,310 shares SZITIC Trust Co.,Ltd.-Xin Rui 2 5 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 single fund trust Foreign shares BBH A/C VANGUARD placed in EMERGING MARKETS STOCK 6,541,331 6,541,331 domestic INDEX FUND exchange Guangdong Communication Group Co., Ltd. is the parent company of Guangdong Highway Explanation on associated Construction Co., Ltd, Guangdong Expressway Co., Ltd. and Xinyue Co., Ltd.. It is unknown relationship or concerted action of whether there is relationship between other shareholders and whether they are persons taking the above shareholders concerted action specified in the Regulations on Disclosure of Information about Change in Shareholding of Shareholders of Listed Companies. 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 6 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 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 348.46 million and 13.39% over the beginning of the year, mainly due to net cash inflow of RMB 479.84 million from operating activities, net cash inflow of RMB 57.56 million from investing activities and net cash outflow of RMB73.82 million from financing activities. 2.Acount receivable inreased by RMB 77.14 million and 189.62% over the beginning of the year, Mainly in Guangdong Province, Fokai Expressway Co., Ltd. to pay the Fokai Expressway Xiebian to Sanbao section of the expansion of the project due to warranty. 3.Other account receivable decreased by RMB 8.71 million and 34.61% over the beginning of the year, Mainly in Guangdong Province, Fokai Expressway Co., Ltd. to recover Yaoyao service area rent.. 4. Taxes payable increased by RMB38.45 million and 36.15% over the beginning of the year, The main reason is that the increase in total profit in the current period resulted in an increase in corporate income tax payable in the current period. 5.Other account payable decreased by RMB60.10 million and 44.76% over the beginning of the year, Mainly in Guangdong Province, Fokai Expressway Co., Ltd. to pay the Fokai Expressway Xiebian to Sanbao section of the expansion of the project due to warranty. (II) Items of Income statement as compared with the same period of the previous year 1.Operating income increased by RMB52.31 million and 7.97% year on year, The main reason for the increase (1) Due to the impact of some vehicle circumventing Guangzhu Section of Jingzhu Expressway because of Bridge Closure of Hong Qili bridge of Fan Zhong Highway (S111), that section of the highway got an increase of traffic volume, so the toll revenue increased by RMB 32.38 million; (2) The natural growth of the traffic flow leads to that the toll revenue of Guangfo Expressway Co. Ltd., Guangdong Fokai Expressway Co. Ltd and Jingzhu Expressway Guangzhu Section Co. Ltd increased by RMB 16.7 million. (2)Operating cost decreased by RMB2.35 million and 0.867% year on year, The main reason for the decrease(1) Due to the natural growth of the traffic volume, the depreciation of road asset of Guangdong Fokai Expressway Co. Ltd and Jingzhu Expressway Guangzhu Section Co. Ltd increased by about RMB 23.19 million; (2) The cooperation period with Guangfo Expressway Co. Ltd will be terminated on July 31, 2017, and Guangfo Expressway adopts the vehicle flow method to draw depreciation, and the depreciation has been fully drawn in the current reporting period, with a decrease of RMB 17.5 million compared to the same period last year; (3) The upkeep costs and labor costs decreased RMB 8.04 million compared to the same period last year. (3) Business tax and surcharge decreased by RMB19.11 million and 84.73% year on year, The main reason for the decrease: Since the full implementation of “replacing business tax with value-added tax” from May 1, 2016, the company’s toll revenue and the relevant income are no longer pay business tax but pay VAT. However, the VAT is not accounted in this accounting item. (4) Financial expenses decreased by RMB 31.49 million and 31.52% year on year, It’s mainly due to the comprehensive impact of repayment of interest-bearing debt, lower interest and the increase in interest income from bank deposits. (5) Investment income Increased by RMB13.8 million and 15.49% year on year,The main reason for the 7 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 increase:Due to the increase in toll revenue caused by the natural growth of the traffic volume and the decrease in the financial expenses, the profit of the company’s share-participation highway sections of Guangdong Guanghui Expressway Co.,Ltd, Ganzhou Kangda Expressway Co., Ltd and Shenzhen Huiyan Expressway Co., Ltd etc increased, thus the investment income from them increased RMB 13.52 million compared to the same period last year. (6) Income tax expenses increased by RMB 27.69million and 40.66% year on year, Mainly due to the increase in the total profit of Guangfo Expressway Co., Ltd., Guangdong Fokai Expressway Co., Ltd. and Jingzhu Expressway Guangzhu Section Co., Ltd. (7) The net profit for the owners of the parent company increased by RMB 97.46 million and 51.50% 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 sales of goods or rending of services Mainly calculates the toll revenue received by Guangfo Expressway Co., Ltd, Guangdong Fokai Expressway Co., Ltd and Jingzhu Expressway Guangzhu Section Co. Ltd. It increased RMB 43.02 million compared to the same period last year, an increase of 7.04%, which is mainly due to the increase in the toll revenue. 2. Other cash received from business operation Mainly calculates the net inflow-that the cash toll income to be split is larger than the split part being drawn-and others such as cash flow of come-and-go money and cash received from the rental income of investment real estate received in the settlement account of Guangfo Expressway Co., Ltd, Guangdong Fokai Expressway Co., Ltd and Jingzhu Expressway Guangzhu Section Co. Ltd. In the current period, it increased RMB 15.13 million compared to the same period last year, an increase of 77.52%, which is mainly due to the increase in highway networking-collected toll to-be-split of each share-controlled highway sections. 3. Cash paid for purchasing of merchandise and services Mainly calculates the payment of special projects, upkeep costs and service fee of networking charge-collection etc. The current period increased RMB 19.28 million compared to the same period, an increase of 110.85%, which is mainly due to the increase of payment for projects by Guangfo Expressway Co., Ltd, Guangdong Fokai Expressway Co., Ltd and Jingzhu Expressway Guangzji Section Co. Ltd in the current period. 4. Taxes paid Mainly calculates the actual payment of income tax, value-added tax and surcharges etc in the current period. In the current period, it increased RMB 12.29 million compared to the same period, an increase of 16.50%, which is mainly due to the increase in paying corporate income tax. 5. Cash received from investment retrieving Mainly calculates the obtained cash dividends due to the equity investment. In the current period, it decreased RMB 74.83 million compared to the same period last year, a decrease of 57.12%, which is mainly due to that Guangdong Guanghui Expressway Co. Ltd carried out dividends distribution in the same period last year but did not carried out dividends distribution in the current period. The company received the cash dividends of RMB 55.17 million from Zhaoqing Yuezhao Highway Co., Ltd and received the cash dividends of RMB 1 million from Guangdong No.1 Network Partnership Firm (limited partnership). 6. Cash paid for construction of fixed assets, intangible assets and other long-term assets increased by RMB 56.16 million and 97.55% year on year,It’s mainly due to Guangdong Fokai Expressway Co., Ltd’s paying of guarantee money for the reconstruction and extension project of Fokai expressway to Xiebian-Sanbao section and the increase in the payment for the reconstruction and extension project of Fokai expressway to Xiebian-Sanbao section. 7. Cash received as loans increased by RMB 499 million year on year, but none in the previous period. 8 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 The reason is that the Jingzhu Expressway Guangzhu Section Co., Ltd. current loans RMB 499 million. 8. Cash to repay debts increased by RMB 499 million year on year, but none in the previous period. The reason is that the Jingzhu Expressway Guangzhu Section Co., Ltd. current loans RMB 499 million. II. The progress of significant events and influence, as well as the analysis and explanation on resolving proposal. √Applicable □Not applicable The Proposal about Guangdong Provincial Expressway Development Co., Ltd’s Merger of Guangdong Fokai Expressway Co., Ltd was examined an approved in the 8 provisional meeting of the eighth board of directors of the company. The company, as the acquirer, will absorb and merge the whole assets, liabilities and business of Fokai Company. After the merger, the company continues to operate, and the independent legal person qualification of Fokai Company shall be cancelled; after the completion of the merger, all the assets of Fokai Company will be consolidated into the company, and the whole creditor's rights and debts of Fokai Company shall be inherited by the company; it planned to set up a new company to take over and manage the assets, liabilities, business and staff of Fokai Company. The gains and losses arising from the period-from the base date of the merger to the completion date of the merger-shall be borne by the company. Purpose and impact of the Merger: (1) The merger by consolidation will be conducive to the integration of the company's assets, business, human resource, finance and other resources, and it’s conducive for optimizing the management structure, improving operational efficiency and reducing management costs. (2) The tax treatment of this merger will be carried out according to the general asset reorganization. In the light of that there was not-yet-made-up tax losses existed in the company itself during 2012 to 2016, after the completion of the merger, it will produce the corresponding taxable income to make up, and with the consideration of the impact of the company’s integration, after the preliminary estimates, this merger by consolidation will increase the 2017-annual net profit attributable to shareholders of the listed company by about RMB 240.29 million to RMB 290.35 million, which will account for about 24%-29% of the 2016-annual net profit attributable to shareholders of the listed company-which is RMB 1001.2059 million. The above-said data are the results of the company’s preliminary calculation, but there is a time limitation for the make-up of the not-yet-made-up losses according to the income tax law and there is impact of the changes of factors of earnings forecasts, so the above-said estimates of the data may have some changes. Description of the website for disclosing Overview of material matters Date of disclosing provisional announcements The Announcement of Guangdong Provincial Expressway Development Co., April 8,2017 www.cninfo.com.cn Ltd. Merging of wholly-owned subsidiary. 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 The company has no commitments completed in period and those without completed till lend of the period from 9 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 actual controller, shareholders, related parties, purchaser and companies. IV.Prediction of Business performance for January- June 2017 Estimation of accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warning of its material change compared with the corresponding period of the last year and explanation of reason. □ Applicable √ Not applicable V. Investment in securities √ Applicable □Not applicable Shareho Sharehol lding Number of ding Number of proporti Gain. shares held proporti Securi shares held on at Book balance at loss of Initial at the on at the ty Security Short form at the end of the end the end of the the Accountin Source of investment beginning of beginnin catego code of security the reporting of the reporting period reporting g items the shares cost(RMB) the reporting g of the ry period reportin (RMB) period period(share reporting (shares) g (RMB) s) period( period( %) %) Financial China assets Subscribe Stock 601818 Everbright 517,560,876.80 235,254,944 0.50% 235,254,944 0.50% 966,897,819.84 0.00 available on 2009 Bank for sale Total 517,560,876.80 235,254,944 -- 235,254,944 -- 966,897,819.84 0.00 -- -- Disclosure date for the notice of approval by the July 22,2009 Board (If any) Disclosure date for the notice of approval by August 7, 2008 shareholders’ 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 February 15,2017 Onsite investigation Organization I.The main contents of the research included: (1) the 10 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 Reception time Way of reception Types of visitors Basic index status of the company's daily operation; (2) the analysis of the company’s financial data; (3) the company's development strategy; (4) the company’s analysis on its industry. II. The main documents for the research: regular reports and other public information of the company. I.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 company's March 30,2017 Onsite investigation Organization development strategy; (4) the company’s analysis on its industry. II. The main documents for the research: regular reports and other public information of the company. 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 11 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 IV. Financial Statement I. Financial statement 1. Consolidated balance sheet Prepared by:Guangdong Provincial Expressway Development Co., Ltd. April 28,2017 In RMB Items At the end of term Beginning of term Current asset: Monetary fund 2,951,743,797.84 2,603,279,644.25 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 117,818,969.61 40,681,197.01 Prepayments 1,394,688.22 2,860,130.35 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Interest receivable Dividend receivable Other account receivable 16,456,512.87 25,167,879.53 Repurchasing of financial assets Inventories 323,888.89 323,888.89 Assets held for sales Non-current asset due in 1 year 55,719.14 55,719.14 Other current asset Total of current assets 3,087,793,576.57 2,672,368,459.17 Non-current assets: Loans and payment on other’s behalf disbursed 12 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 Items At the end of term Beginning of term Disposable financial asset 1,765,472,921.57 1,718,421,932.77 Expired investment in possess Long-term receivable Long term share equity investment 2,262,104,332.21 2,220,805,130.31 Property investment 3,103,917.73 3,219,971.08 Fixed assets 9,069,979,957.72 9,285,823,302.77 Construction in progress 159,192,341.07 149,244,110.30 Engineering material 1,549,556.00 1,549,556.00 Fixed asset disposal Production physical assets Gas & petrol Intangible assets 5,211,508.07 6,138,294.90 R & D petrol Goodwill Long-germ expenses to be amortized 1,310,715.06 1,763,966.07 Deferred income tax asset 13,531,472.96 10,810,322.94 Other non-current asset 2,241,664.56 2,300,170.28 Total of non-current assets 13,283,698,386.95 13,400,076,757.42 Total of assets 16,371,491,963.52 16,072,445,216.59 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 247,130,091.75 299,414,047.07 Advance payment 18,510,163.76 17,440,023.40 Selling of repurchased financial assets Fees and commissions receivable Employees’ wage payable 9,398,000.36 8,840,599.13 13 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 Items At the end of term Beginning of term Tax payable 144,825,659.69 106,370,898.31 Interest payable 9,028,437.59 8,945,283.52 Dividend payable 12,474,136.38 12,506,777.92 Other account payable 74,163,473.20 134,266,141.34 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 1,006,610,000.00 957,880,000.00 Other current liability Total of current liability 1,522,139,962.73 1,545,663,770.69 Non-current liabilities: Long-term loan 5,354,050,000.00 5,402,780,000.00 Bond payable Including:preferred stock Sustainable debt Long-term payable 2,022,210.11 2,022,210.11 Long-term payable employees’s remuneration Special payable Expected liabilities Deferred income Deferred income tax liability 272,935,673.70 278,463,647.00 Other non-current liabilities Total non-current liabilities 5,629,007,883.81 5,683,265,857.11 Total of liability 7,151,147,846.54 7,228,929,627.80 Owners’ equity Share capital 2,090,806,126.00 2,090,806,126.00 Other equity instrument Including:preferred stock Sustainable debt Capital reserves 2,508,408,342.99 2,508,408,342.99 14 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 Items At the end of term Beginning of term Less:Shares in stock Other comprehensive income 449,336,943.04 402,285,954.24 Special reserves Surplus reserves 366,956,549.89 366,956,549.89 Common risk provision Undistributed profit 3,207,282,500.66 2,920,563,328.27 Total of owner’s equity belong to the 8,622,790,462.58 8,289,020,301.39 parent company Minority shareholders’ equity 597,553,654.40 554,495,287.40 Total of owners’ equity 9,220,344,116.98 8,843,515,588.79 Total of liabilities and owners’ equity 16,371,491,963.52 16,072,445,216.59 Legal Representative: Zhen Renfa General Manager : Wang Chunhua Person in charge of accounting:Fang Zhi Accounting Dept Leader: Zhou Fang 2.Parent Company Balance Sheet In RMB Items At the end of term Beginning of term Current asset: Monetary fund 2,531,248,393.73 1,795,455,123.88 Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Bill receivable Account receivable Prepayments 471,698.10 2,059,362.84 Interest receivable 18,128,364.07 34,833.33 Dividend receivable 24,000,000.00 Other account receivable 2,910,069.40 2,350,265.24 Inventories Assets held for sales Non-current asset due in 1 year 85,000,000.00 95,000,000.00 Other current asset 15 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 Items At the end of term Beginning of term Total of current assets 2,637,758,525.30 1,918,899,585.29 Non-current assets: Disposable financial asset 1,765,472,921.57 1,718,421,932.77 Expired investment in possess Long-term receivable Long term share equity investment 7,427,266,551.87 7,385,967,349.97 Property investment 2,851,779.48 2,967,832.83 Fixed assets 2,437,481.44 2,744,611.16 Construction in progress Engineering material Fixed asset disposal Production physical assets Gas & petrol Intangible assets 648,571.90 725,234.38 R & D petrol Goodwill Long-germ expenses to be amortized 1,134,454.13 1,559,874.44 Deferred income tax asset Other non-current asset 847,903,684.98 847,903,684.98 Total of non-current assets 10,047,715,445.37 9,960,290,520.53 Total of assets 12,685,473,970.67 11,879,190,105.82 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 1,335,322.71 1,347,078.47 Tax payable 1,299,808.59 1,986,670.18 Interest payable 4,585,824.32 4,469,288.30 Dividend payable 12,474,136.38 12,506,777.92 16 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 Items At the end of term Beginning of term Other account payable 3,322,347.31 1,989,088.70 Classified as held for sale debt Non-current liability due in 1 year 50,200,000.00 50,200,000.00 Other current liability 1,116,978,894.48 836,363,256.69 Total of current liability 1,190,196,333.79 908,862,160.26 Non-current liabilities: Long-term loan 2,999,700,000.00 2,999,700,000.00 Bond payable Including:preferred stock Sustainable debt Long-term payable 2,022,210.11 2,022,210.11 Long-term payable to employees Special payable Expected liabilities Deferred income Deferred income tax liability Other non-current liabilities Total of Non-current liabilities 3,001,722,210.11 3,001,722,210.11 Total of liability 4,191,918,543.90 3,910,584,370.37 Owners’ equity Share capital 2,090,806,126.00 2,090,806,126.00 Other equity instrument Including:preferred stock Sustainable debt Capital reserves 3,359,791,693.12 3,359,791,693.12 Less:Shares in stock Other comprehensive income 449,336,943.04 402,285,954.24 Special reserves Surplus reserves 351,112,266.24 351,112,266.24 Undistributed profit 2,242,508,398.37 1,764,609,695.85 Total of owners’ equity 8,493,555,426.77 7,968,605,735.45 Total of liabilities and owners’ equity 12,685,473,970.67 11,879,190,105.82 Legal Representative: Zhen Renfa General Manager : Wang Chunhua 17 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 Person in charge of accounting:Fang Zhi Accounting Dept Leader: Zhou Fang 3.Consolidated Income statement In RMB Items Amount in this period Amount in last period I. Income from the key business 708,861,624.37 656,556,265.87 Incl:Business income 708,861,624.37 656,556,265.87 Interest income Insurance fee earned Fee and commission received II. Total business cost 381,174,667.38 433,158,879.19 Incl:Business cost 271,049,367.90 273,397,575.90 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 3,443,510.59 22,557,096.31 Sales expense Administrative expense 38,257,241.20 37,284,987.45 Financial expenses 68,424,547.69 99,919,219.53 Asset impairment loss Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 97,471,152.80 84,395,832.55 Incl: investment gains from affiliates 96,471,880.49 83,396,560.25 Gains from currency exchange(“-”for loss) III. Operational profit(“-”for loss) 425,158,109.79 307,793,219.23 Add :Non-operational income 583,642.64 978,831.12 Including:Income from disposal of 7,417.07 non-current assets Less:Non business expenses 179,324.57 335,207.81 18 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 Items Amount in this period Amount in last period Incl:Loss from disposal of non-current 16,609.06 59,156.93 assets IV.Total profit(“-”for loss) 425,562,427.86 308,436,842.54 Less:Income tax expenses 95,784,888.47 68,097,578.81 V. Net profit 329,777,539.39 240,339,263.73 Net profit attributable to the owners of 286,719,172.39 189,257,712.78 parent company Minority shareholders’ equity 43,058,367.00 51,081,550.95 VI. Other comprehensive income 47,050,988.80 -115,274,922.56 Net of profit of other comprehensive inco me attributable to owners of the parent co 47,050,988.80 -115,274,922.56 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 47,050,988.80 -115,274,922.56 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 47,050,988.80 -115,274,922.56 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 19 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 Items Amount in this period Amount in last period Net of profit of other comprehensive inco me attributable to Minority shareholders’ equity VII. Total comprehensive income 376,828,528.19 125,064,341.17 Total comprehensive income attributable 333,770,161.19 73,982,790.22 to the owner of the parent company Total comprehensive income 43,058,367.00 51,081,550.95 attributable minority shareholders VIII. Earnings per share (I)Basic earnings per share 0.14 0.11 (II)Diluted earnings per share 0.14 0.11 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: Zhen Renfa General Manager : Wang Chunhua Person in charge of accounting:Fang Zhi Accounting Dept Leader: Zhou Fang 4. Income statement of the Parent Company In RMB Items Amount in this period Amount in last period I. Income from the key business 19,955,682.04 2,165,724.61 Less:Business cost 116,053.35 116,053.35 Business tax and surcharge 28,965.70 121,280.31 Sales expense Administrative expense 12,781,201.64 13,076,357.09 Financial expenses 34,321,379.12 36,940,014.68 Asset impairment loss Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 505,190,620.29 104,346,091.82 Incl: investment gains from affiliates 96,471,880.49 103,346,819.52 II. Operational profit(“-”for loss) 477,898,702.52 56,258,111.00 Add :Non-operational income 20 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 Items Amount in this period Amount in last period Including:Income from disposal of non-current assets Less:Non business expenses Incl:Loss from disposal of non-current assets III.Total profit(“-”for loss) 477,898,702.52 56,258,111.00 Less:Income tax expenses IV. Net profit(“-”for net loss) 477,898,702.52 56,258,111.00 V.Net of profit of other comprehensive i 47,050,988.80 -115,274,922.56 ncome (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 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 47,050,988.80 -115,274,922.56 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 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 524,949,691.32 -59,016,811.56 VII. Earnings per share: 21 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 Items Amount in this period Amount in last period (I)Basic earnings per share (II)Diluted earnings per share Legal Representative: Zhen Renfa General Manager : Wang Chunhua Person in charge of accounting:Fang Zhi Accounting Dept Leader: Zhou Fang 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 654,396,443.21 611,378,742.24 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 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 34,657,581.68 19,522,969.85 operation Sub-total of cash inflow 689,054,024.89 630,901,712.09 22 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 Items Amount in this period Amount in last period Cash paid for purchasing of 36,673,740.77 17,393,510.10 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 70,894,980.53 74,696,344.15 Taxes paid 86,763,105.47 74,472,575.93 Other cash paid for business activities 14,877,480.20 18,963,936.40 Sub-total of cash outflow from 209,209,306.97 185,526,366.58 business activities Cash flow generated by business 479,844,717.92 445,375,345.51 operation, net II.Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains 56,171,950.90 130,999,272.30 Net cash retrieved from disposal of fixed assets, intangible assets, and 3,800.00 419,007.00 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 56,175,750.90 131,418,279.30 investment activities Cash paid for construction of fixed assets, intangible assets and other 113,731,853.71 57,570,411.79 long-term assets Cash paid as investment Net increase of loan against pledge Net cash received from subsidiaries and other operational units 23 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 Items Amount in this period Amount in last period Other cash paid for investment activities Sub-total of cash outflow due to 113,731,853.71 57,570,411.79 investment activities Net cash flow generated by investment -57,556,102.81 73,847,867.51 III.Cash flow generated by financing Cash received as investment Incl: Cash received as investment from minor shareholders Cash received as loans 499,000,000.00 Cash received from bond placing Other financing –related ash received 5,173.81 Sub-total of cash inflow from financing 499,000,000.00 5,173.81 activities Cash to repay debts 499,000,000.00 Cash paid as dividend, profit, or 73,824,461.52 66,974,388.02 interests Incl: Dividend and profit paid by subsidiaries to minor shareholders Other cash paid for financing activities 451,000.00 Sub-total of cash outflow due to 572,824,461.52 67,425,388.02 financing activities Net cash flow generated by financing -73,824,461.52 -67,420,214.21 IV. Influence of exchange rate alternation on cash and cash equivalents V.Net increase of cash and cash 348,464,153.59 451,802,998.81 equivalents Add: balance of cash and cash 2,603,279,644.25 1,199,629,276.85 equivalents at the beginning of term VI ..Balance of cash and cash 2,951,743,797.84 1,651,432,275.66 equivalents at the end of term Legal Representative: Zhen Renfa General Manager : Wang Chunhua Person in charge of accounting:Fang Zhi Accounting Dept Leader: Zhou Fang 24 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 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 2,732,392.40 1,048,494.68 rending of services Tax returned Other cash received from business 286,775,467.69 257,413,660.63 operation Sub-total of cash inflow 289,507,860.09 258,462,155.31 Cash paid for purchasing of merchandise and services Cash paid to staffs or paid for staffs 8,786,519.48 10,038,866.36 Taxes paid 523,115.02 300,681.47 Other cash paid for business activities 5,143,830.51 121,556,976.90 Sub-total of cash outflow from 14,453,465.01 131,896,524.73 business activities Cash flow generated by business 275,054,395.08 126,565,630.58 operation, net II.Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains 487,891,418.39 130,999,272.30 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 10,283,812.50 1,074,625.01 Sub-total of cash inflow due to 498,175,230.89 132,073,897.31 investment activities Cash paid for construction of fixed assets, intangible assets and other long-term assets Cash paid as investment Net cash received from subsidiaries and other operational units 25 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 Items Amount in this period Amount in last period Other cash paid for investment activities Sub-total of cash outflow due to investment activities Net cash flow generated by investment 498,175,230.89 132,073,897.31 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 37,436,356.12 22,412,917.61 interests Other cash paid for financing activities 451,000.00 Sub-total of cash outflow due to 37,436,356.12 22,863,917.61 financing activities Net cash flow generated by financing -37,436,356.12 -22,858,743.80 IV. Influence of exchange rate alternation on cash and cash equivalents V.Net increase of cash and cash 735,793,269.85 235,780,784.09 equivalents Add: balance of cash and cash 1,795,455,123.88 822,286,507.11 equivalents at the beginning of term VI ..Balance of cash and cash 2,531,248,393.73 1,058,067,291.20 equivalents at the end of term Legal Representative: Zhen Renfa General Manager : Wang Chunhua Person in charge of accounting:Fang Zhi Accounting Dept Leader: Zhou Fang II. Auditor’ report Is the First Quarterly Report be audited? □ Yes √No 26 Guangdong Provincial Expressway Development Co., Ltd. The First Quarterly Report 2017 The First Quarterly report is not audited. 27