Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Guangdong Provincial Expressway Development Co., Ltd. The Semi-Annual Report 2017 August 2017 1 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 I. Important Notice, Table of Contents and Definitions The Board of Directors and the directors, Supervisory Committee and supervisors and Senior Executives of the Company hereby warrant that at the year , there are no misstatement, misleading representation or important omissions in this report and shall assume joint and several liability for the authenticity, accuracy and completeness of the contents hereof. Mr.Zhen Renfa, Compant principal , Mr. Wang Chunhua, General Manager ,Mr.Fang Zhi, Chief of the accounting owrk, Ms.Zhou Fang, Chief of the accounting organ (chief of accounting ) hereby confirm the authenticity and completeness of the financial report enclosed in this Semi-annual report. All the directors have attended the meeting of the board meeting at which this report was examined. The toll revenues of Expressway is main source of the major business income of the company , The charge standard of vehicle toll must be submitted to the same level people's government for review and approval after the transport regulatory department of province, autonomous region or municipality directly under the central government in conjunction with the price regulatory department at the same level consented upon examination. Therefore, the adjustment trend of the charge price and the charge price if has the corresponding adjustment in the future price level when the cost of the company rises still depend on the approval of relevant national policies and government departments, and the company isn't able to make timely adjustment to the charge standard in accordance with the its own operation cost or the change of market supply demand. So, the change of charge policy and the adjustment of charge standard also have influence on the expressways operated by the company to some extent. So, the charging policy changes and charges adjustment will affect the highways operation of the company. The Company has no plan of cash dividends carried out, bonus issued and capitalizing of common reserves either. 2 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Table of Contents I. Important Notice, Table of Contents and Definitions II. Corporate Profile and Key Financial Indicators III. Business Profile IV. Performance Discussion and Analysis V. Important Events VI. Change of share capital and shareholding of Principal Shareholders VII. Situation of the Preferred Shares VIII .Information about Directors, Supervisors and Senior Executives IX. Corporate Bonds X. Financial Report XI. Documents available for inspection 3 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Definition Refers Terms to be defined Definition to Refers January 1, 2017 to June 30,2017 Reporting period, This year to Refers The semi annual report of the company was approved by the board of Reporting date to directors on 2017, that is, August 28, 2017 Refers YOY Compared with January-June 2016 to Refers The Company /This Company Guangdong Provincial Expressway Development Co.,Ltd. to Refers Province Expressway Guangdong Province Expressway Co., Ltd. to Refers Construction Company Guangdong Highway Construction Co., Ltd. to Refers Technology Company Guangdong Expressway Technology Investment Co., Ltd to Refers Fokai Company Guangdong Fokai Expressway Co., Ltd. to Refers Guangfo Company Guangdong Guangfo Expressway Co., Ltd. to Refers Guangzhu East Company Jingzhu Expressway Guangzhu Section Co., Ltd. to Guangdong Provincial Expressway Development Co., Ltd. (2015-2016) Refers Major assets restructuring issued shares and paid cash to purchase assets and raise matching funds to and related transactions 4 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 II. Corporate Profile and Key Financial Indicators 1.Company Information Stock abbreviation: Expressway A, Expressway B Stock code: 000429、200429 Stock exchange for listing Shenzhen Stock Exchange Name in Chinese 广东省高速公路发展股份有限公司 Abbreviation of Registered 粤高速 Company (if any) English name (If any) Guangdong Provincial Expressway Development Co.Ltd. English abbreviation (If any) GPED Legal Representative \Zhen Renfa 2. Contact person and contact manner Board secretary Securities affairs Representative Zhen Name Renfa(Chairman of the Board of Directors Liang Jirong acting on behalf of the Secretary) 46/F, Litong Plaza, No.32, Zhujiang East 45/F, Litong Plaza, No.32, Zhujiang East Contact address Road, Zhujiang New City, Tihe Disrtict , Road, Zhujiang New City, Tihe Disrtict , Guangzhou Guangzhou Tel 020-29004619 020-29004523 Fax 020-38787002 020-38787002 E-mail zhengrenfa0429@sina.com 139221590@qq.com 3. Other 1. Way of contact Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or not □ Applicable √ Not applicable Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period, found more details in annual report 2016. 2. Information inquiry Whether information disclosure and preparation place changed in reporting period or not □ Applicable √ Not applicable None of the official presses, website, and place of enquiry has been changed in the semi report period. For details please find the Annual Report 2016. 5 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 4. Summary of Accounting Data and Financial Indicators Indicate by tick mark whether the Company needs to retroactively restate any of its accounting data. □ Yes √No Same period of last Reporting period YoY+/-(%) year Operating income(RMB) 1,440,222,563.74 1,333,492,179.77 8.00% Net profit attributable to the shareholders of the 892,848,012.53 505,899,144.29 76.49% listed company(RMB) Net profit after deducting of non-recurring gain/loss attributable to the shareholders of 641,933,600.43 356,881,714.84 79.87% listed company(RMB) Cash flow generated by business operation, net 1,022,392,235.37 932,882,829.38 9.59% (RMB) Basic earning per share(RMB/Share) 0.43 0.29 48.28% Diluted gains per 0.43 0.29 48.28% share(RMB/Share)(RMB/Share) Weighted average income/asset ratio(%) 10.55% 8.39% 2.16% As at the end of the As at the end of last YoY+/-(%) reporting period year Gross assets(RMB) 16,073,707,033.01 16,072,445,216.59 0.01% Shareholders’ equity attributable to shareholders 8,403,487,736.14 8,289,020,301.39 1.38% of the listed company(RMB) 5. Differences between accounting data under domestic and overseas accounting standards 1.Simultaneously pursuant to both Chinese accounting standards and international accounting standards disclosed in the financial reports of differences in net income and net assets. □ Applicable□√ Not applicable Nil 2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards. □ Applicable √Not applicable Nil 6.Items and amount of non-current gains and losses √Applicable □Not applicable 6 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 In RMB Items Amount Notes Non-current asset disposal gain/loss(including the write-off part -2,629,016.43 for which assets impairment provision is made) It receives the compensation 59,995,667.68 yuan for early termination Other non-business income and expenditures other than the above 61,828,620.75 of charging for Jiujiang Bridge in the current period. The department confirms the deferred income tax totaling 206,421,769.46 yuan Less: Amount of influence of income tax -191,689,368.44 for losses of previous years in the current period. Amount of influence of minority interests(after tax) -25,439.34 Total 250,914,412.10 -- 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 recorgnized as recurring gain /loss/items as defined by the information disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period. 7 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 III. Business Profile Ⅰ.Main Business the Company is Engaged in During the Report Period Whether the company needs to comply with the disclosure requirements of the particular industry No The Company is an infrastructure industry, with main business in developing and operating expressway and big bridges. It is one of the main institutions of developing expressway and big bridge in Guangdong Expressway System. The expressway industry is the industry helped by government. The Company is mainly engaged in tolling and maintenance of Guangfo Expressway, Fokai Expressway and Jingzhu Expressway Guangzhu Section investment in technological industries and provision of relevant consultation while investing in Shenzhen Huiyan Expressway Co., Ltd., Guangzhou Guanghui Expressway Co., Ltd.,Guangdong Jiangzhong Expressway Co., Ltd., Zhaoqing Yuezhao Expressway Co., Ltd.,Ganzhou Kangda Ex pressway , Ganzhou Gankang Expressway Co., Ltd.,Guangdong Yueke Technology Micro Loan Co., Ltd.and Guangdong Guangle Expressway Co.,Ltd. As of the end of the reporting period, the company’s share-controlled expressway is 158.12 km, and the share-participation expressway is 684.20 km, and according to the equity ratio, after the conversion calculation, the total mileage is 273.05 km. Ⅱ.Major Changes in Main Assets 1. Major Changes in Main Assets Main assets Major changes The increase of 2.84% by the end of the period compared with that of the beginning is Equity assets mainly due to the comprehensive influence of the operation accumulation and profits distribution of participant companies. The decrease of 4.43% by the end of the period compared with that of the beginning is Fixed assets mainly due to the influence of the company depreciation accrual mainly. The decrease of 29.58% by the end of the period compared with that of the beginning is Intangible assets mainly due to the influence of the intangible assets amortization mainly. The increase of 35.71% by the end of the period compared with that of the beginning is Construction in process mainly due to the influence of the Southern section expansion of Fokai company mainly. The increase of 1960.95% by the end of the period compared with that of the beginning is mainly due to that the parent company confirms the deferred income tax assets through Deferred income tax assets prediction of using the taxable income for coverage of previous years’ losses in the future. 2. Main Conditions of Overseas Assets □ Applicable √ Not applicable 8 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Ⅲ.Analysis On core Competitiveness Whether the company needs to comply with the disclosure requirements of the particular industry No The toll revenue of expressway industry mainly depends on the regional economic development. The regional economy is the critical factor that influences the traffic volume. The Guangfo expressway and the Fokai expressway, controlled by the company, are part of the National Expressway Network Planning-“Five vertical and seven horizontal”, The share-controlled Beijing-Zhuhai Guangzhu Section Expressway is a fast and convenient expressway.and many of the company’s equity-participation expressways that are part of the main skeleton of the Guangdong Provincial Expressway Planning-“Ten vertical and five horizontal”, which provides a strong guarantee for stable traffic volume. Meanwhile, the regional economy is the critical factor that influences the traffic volume, as Guangdong province is the economically developed region, with years’ continuous high growth of GDP, so that provides the stable rising demand for the company. 9 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 IV. Performance Discussion and Analysis Ⅰ.General In the first half of 2017, the company, according to the annual business plan established by the board of directors, soundly did a good job of each work: 1. Continuously deepened the operation and management, simultaneously adopted many measures, and ensured the completion of the work goal of ensuring the smooth traffic, ensuring security and ensuring income. In the first half of 2017, the main business income was RMB 1.44 billion, up by 8.03% over the same period of last year, meaning 46.68% of the annual plan was completed; and the operating costs was RMB 534 million, a decrease of 4.47% from the same period last year, representing completed 42.72% of the annual plan. 2. Steadily advancing the merger and consolidation matter of Fokai Company, and as of the date of this report, Guangdong Provincial Expressway Development Co., Ltd Fokai Branch Company had been set up and the relevant industrial and commercial registration procedures were completed, hence the management work of Fokai Expressway was formally transferred to the Fokai Branch Company from the Fokai Company. 3. Approved by the 11th meeting (provisional) of the 8th term Board of Directors, the Company invested RMB 4.5 million to set up the wholly-owned subsidiary to carry out the equity investment business, thus to prominently strength the cooperation with the strategic investors and to seek new equity investment projects, with a goal of share-control, so as to grasp the good equity investment opportunities and to gradually perfect the company's asset layout in financial and similar financial filed. 4. Guangdong Provincial Expressway Development Co., Ltd Resource Development Branch Company was incorporated and registered by the company in order to promote the development of commercial resources such as lands along the highways under share-control by the company. II.Main business analysis General The Company is an infrastructure industry, with main business in developing and operating expressway and big bridges. It is one of the main institutions of developing expressway and big bridge in Guangdong Expressway System. The expressway industry is the industry helped by government. In the report period, the vehicle traffic and toll income of the controlled subsidiaries and joint ventures of the Company are as follows: Volume of vehicle Increase Toll income in the first Increase traffic in the first /Decrease(%) half year of 2017 /Decrease(%) half year of (RMB’0000) 2017( vehicles) Guangfo Expressway 29,100,569 9.50% 19,879.86 4.17% Fokai Expressway 27,969,945 16.70% 58,924.50 3.51% Jingzhu Expressway 35,362,654 17.21% 62,042.30 14.56% Guangzhu East Section Huiyan Expressway 18,279,214 7.24% 11,154.81 5.08% 10 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Guanghui Expressway 25,119,239 17.10% 84,633.89 5.69% Yuezhao Expressway 13,540,362 -5.42% 24,529.10 -15.41% Jiangzhong Expressway 25,033,807 22.53% 21,684.65 10.49% Kangda Expressway 1,269,793 6.92% 12,120.85 4.91% Gangkang Expressway 1,379,527 19.12% 6,458.55 -11.83% Overall situation: except the Yue Zhao Expressway and Gan Kang Expressway recorded a negative growth, the rest maintained various extents of growth compared to the same period last year, thereinto GuangZhudong and Jiang Zhong section had a growth rate more than 10%, and Guangfo, Fokai, Guanghui, Huiyan and Kangda had a growth rate around 5%. 1. For Guangfo area, the personnel and materials transportation are more closely related, the surrounding real estate supporting was good, and the demand for logistics and transportation has been increased, thus the vehicle flow increased. 2. Since the completion of expansion of Fokai Expressway in 2012, it has entered a stable growth period, and the small vehicle flow maintained a sustained growth momentum, with a relatively fast growth of short-distance vehicles. 3. Due to the impact of Bridge Closure of Hong Qili bridge of Fan Zhong Highway (S111), the vehicle flow of the section between the Xiang Lingshan station to the Sanjiao Station of Guuang-Zhu-Dong Expressway increased, thus it had an obvious increase of toll revenue. Furthermore, the opening of Jiangluo Expressway has a positive impact on its vehicle flow growth. 4. The completion of the Extension of Huizhou section of Hui Yan Expressway-that is connected to Hui Yan Expressway-and it's opening to traffic had a positive impact on the vehicle flow of Hui Yan Expressway, plus the natural growth of the traffic volume, so those had a positive impact on the toll revenue. 5. Guanghui Expressway has been benefiting from the surrounding road network connectivity, so several toll stations in Lianhui, Huiwan and Boshen had large percentage increase of traffic flow, but there was an increasing obvious tendency that the growth of traffic flow and the revenue growth did not grow in same pace, which indicated that the short distance traffic increased. 6. The Jangzhong Expressway's traffic flow and toll revenue growth were mainly caused by the positive impact brought by the opening to traffic of Zhongjiang phase 1 and Jiang Luo Expressway and the second phase maintenance of Shakou Bridge and Shijiao Bridge of 105 State Road of February 25, 2017. 7. The YueZhao Expressway had a decrease in toll revenue that caused by the following reasons: (1) affecting by the opening of the periphery Jiang Luo Expressway and Guangfo Expressway, the toll revenue decreased; (2) The implementation of temporary traffic control measures-namely restricting the passage of large trucks-at Baitu toll station exit at Zhaoqing Bridge and the expansion and relocation project of Ziyun road had a negative impact. 8. Affecting by the full opening to traffic of Xunquan Expressway from the end of October 2015 and connection between Jiangxi Ruixun section and Guangdong Ping Xing section from the end of 2015, the traffic flow of Gan Kang Expressway was affected, resulting in a decrease in toll revenue compared to the same period last year. Year-on-year change of main financial data In RMB This report Same period last year YOY Cause change 11 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 period change (%) Mainly due to the growth of Guangfo, Fokai and Operating income 1,440,222,563.74 1,333,492,179.77 8.00% Guangzhu East Company Toll revenue It is due to the comprehensive influence of the following factors mainly: (1) Guangfo company accrues the depreciation of the road property Operating cost 533,689,845.16 558,947,473.08 -4.52% sufficiently and the depreciation decreases on year-on-year basis; (2) the depreciation cost increases due to the toll revenue increase. Administrative expenses 77,693,914.84 79,766,582.60 -2.60% Reducing interest-bearing debt led to an decrease Financial expenses 133,804,359.02 190,618,235.21 -29.81% in interest expense It is due to the comprehensive influence of the following factors mainly: (1) the parent company confirms the deferred income tax assets through Income tax expenses -19,940,081.98 157,332,820.43 -112.67% prediction of using the taxable income for coverage of previous years’ losses in the future and reduces the income tax; (2) the current period income tax is increased due to the total profits. The R&D Blue Channel project of the scientific R & D Investment 3,249,337.10 790,927.27 310.83% and technical company increases the R&D input. Cash flow generated by Mainly due to toll revenue increase brought the 1,022,392,235.37 932,882,829.38 9.59% business operation, net increased cash flow from operating activities It is mainly due to the purchase in cash of 25% stock rights of Fokai company possessed by the Net cash flow generated provincial expressway and Guangzhudong’s debt -3,331,892.02 -1,656,094,323.59 -99.80% by investment obligations for the construction company upon execution of the major assets reorganization scheme in the previous period. It is due to the comprehensive influence of the following factors mainly:(1)The implementation Net cash flow generated -1,027,513,171.7 1,201,696,913.84 -185.51% of major asset restructuring and increase raise by financing 2 funds On the previous period;(2)Repayment of interest bearing debt increased this year. Net cash from operating activities by the inflow Net increasing of cash -7,005,743.86 477,962,215.77 -101.47% and outflow from investing activities due to the and cash equivalents combined effects Major changes to the profit structure or sources of the Company in the reporting period □ Applicable √Not applicable Nil 12 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Breakdown of main business In RMB Increase/decrease Increase/decrease Increase/decrease of principal of gross profit of reverse in the Operating Gross profit business cost over rate over the operating costs same period of revenue rate(%) the same period same period of the previous of previous year the previous year year(%) (%) (%) Industry Highway 1,408,466,588.54 517,959,767.95 63.23% 8.20% -4.15% 4.74% transportations Other 10,253,399.72 5,496,516.45 46.39% 16.27% -25.28% 29.81% Product Highway 1,408,466,588.54 517,959,767.95 63.23% 8.20% -4.15% 4.74% transportations Other 10,253,399.72 5,496,516.45 46.39% 16.27% -25.28% 29.81% Area Guangfo 198,798,562.69 59,781,669.06 69.93% 4.17% -49.62% 32.10% Expressway Fokai 589,245,049.58 291,140,555.41 50.59% 3.51% 10.78% -3.25% Expressway Jingzhu Expressway 620,422,976.27 167,037,543.48 73.08% 14.56% 5.11% 2.42% Guangzhu section Other 10,253,399.72 5,496,516.45 46.39% 16.27% -25.28% 29.81% III.Non-core business analysis √ Applicable □Not applicable In RMB Whether be Amount Ratio in total profit Note sustainable It is due to the operation accumulation of Investment income 223,430,364.44 23.02% Yes participant companies Changes in fair 0.00% value It is due to the provision of impairment for Asset impairment 196,581.08 0.02% No receivables surplus and aging changes 13 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 It is due to the receiving of the compensation Non-operating 59,995,667.68 yuan for early termination of 62,299,078.58 6.42% No income charging for National Highway No. 325 Jiujiang Bridge mainly Non-operating 3,099,474.26 0.32% It is due to the asset scrapping mainly No expenses IV.Analysis of assets and liabilities 1.Significant changes in asset composition In RMB End of Reporting period End of same period of last year As a Change in percentage of percentag Reason for significant change Amount total e(%) assets(%) Monetary fund 2,596,273,900.39 16.15% 2,603,279,644.25 16.20% -0.05% Accounts 81,861,655.16 0.51% 40,681,197.01 0.25% 0.26% receivable Inventories 323,888.89 0.004% 323,888.89 0.004% 0.00% Real estate 2,987,864.38 0.02% 3,219,971.08 0.02% 0.00% Investment mainly due to the comprehensive Long-term equity influence of the operation 2,283,902,186.05 14.21% 2,220,805,130.31 13.82% 0.39% investment accumulation and profits distribution of participant companies It’s due to the influence of the Fixed assets 8,874,578,467.58 55.21% 9,285,823,302.77 57.77% -2.56% company depreciation accrual mainly Construction in It’s due to the influence of Foai to 202,539,473.20 1.26% 149,244,110.30 0.93% 0.33% process Shukou section expansion mainly Short-term loans 0.00% 0.00% 0.00% Long-term loans 5,110,950,000.00 31.80% 5,402,780,000.00 33.62% -1.82% It is due to the repayment of debts 2.Asset and Liabilities Measured by Fair Value √ Applicable □Not applicable In RMB Opening Gain/Loss on Cumulative fair Impairment Purchanased Sold amount in Items Closing mount amount fair value value change provisions in amount in the the reporting 14 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 change in the recorded into the repoting reporting period reporting equity period period period Financial assets 3.Available-for -sale financial 919,846,831.04 32,935,692.16 326,416,234.80 952,782,523.20 assets Subtotal of 919,846,831.04 32,935,692.16 326,416,234.80 952,782,523.20 financial assets Total of the 919,846,831.04 32,935,692.16 326,416,234.80 952,782,523.20 above Financial 0.00 0.00 liabilities Did any significant change occur to the attribute of the Company’s main asset measurement during the reporting period? □ Yes √No 15 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 3. Assets right restriction till end of reporting period As of June 30, 2017, the Company's holding subsidiary- Beijing-Zhuhai Expressway Guangzhu Section Co., Ltd made the expressway toll right of Panyu Tang Keng to Zhuhai Jinding section project of Beijing-Zhuhai Expressway as the pledge for a pledge guarantee to the loan of RMB 729,000,000.00 (thereinto, the balance of non-current liabilities due within one year was RMB 280,000,000.00 and the balance of long-term borrowings was RMB 449,000,000.00) from Commercial Bank of China Guangzhou Wuyang Sub-branch. V.Investment situation 1. General √ Applicable □ Not applicable Investments made in same period of last Investments made in the reporting period +/- % year 51,617,786.58 3,271,920,597.80 -98.42% 2.Condition of Acquiring Significant Share Right Investment during the Report Period □ Applicable √ Not applicable 3.Situation of the Significant Non-equity Investment Undergoing in the Report Period √ Applicable □ Not applicable In RMB Accum Reasons Industry in Fixed Investment Accumulated actual ulated for Form of which the Estimat Date of assets amount during amount invested as Progres realized failure Disclosure Index(If Name investme investment Source of und ed Disclosure(If investme the reporting of the end of s return in any) nt project return any) nt or not period reporting period as of meeting operates the end schedul 16 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 of the ed end of progres the s and reportin estimate g period d return Announcement of the Sanbao To 29th Shuikou (Provisional) Meeting Section Self Yes Expressway 51,617,786.58 559,681,317.58 elf and Borrowing 16.34% Nil June 17,2016 of the seventh Board Extension of Directors, project Announcement of External Investment Total -- -- -- 51,617,786.58 559,681,317.58 -- -- 0.00 0.00 -- -- -- 4.Investment of Financial Asset (1)Securities investment √ Applicable □ Not applicable Purchas Mode of Sale Book value e Book value Stock accounti Changes in fair Cumulative fair amount Sauce of Security Security Initial balance at the amount Gain/loss of the balance at the end Accounting Abbreviati ng value of the value changes in in the the category code investment cost beginning of the in the reporting period of the reporting items on: measure this period equity this shares reporting period this period ment period period Domesti Financial Domestic c and assets 601818 and foreign 517,560,876.80 FVM 919,846,831.04 32,935,692.16 326,416,234.80 23,054,984.51 952,782,523.20 Self foreign available for stocks stocks sale 17 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Total 517,560,876.80 -- 919,846,831.04 32,935,692.16 326,416,234.80 0.00 0.00 23,054,984.51 952,782,523.20 -- -- Disclosure Date of Announcement on Securities July 22, 2009 Investment Approved by the Board of Directors Disclosure Date of Announcement on Securities August 7,2009 Investment Approved by the Shareholders Meeting(If any) (2)Investment in Derivatives □ Applicable √ Not applicable The Company had no investment in derivatives in the reporting period. 18 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 VI. Sales of major assets and equity 1. Sales of major assets □ Applicable √ Not applicable The Company had no sales of major assets in the reporting period. 2.Sales of major equity □ Applicable √ Not applicable 19 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Ⅶ.Analysis of the Main Share Holding Companies and Share Participating Companies √ Applicable □ Not applicable Situation of Main Subsidiaries and the Joint-stock Company with over 10% net profit influencing to the Company In RMB Company Company Sectors Registered Total Operating Income Operating profit Leading products and services Net assets (RMB) Net Profit (RMB) Name type engaged in capital assets(RMB) (RMB) (RMB) Management of the Fokai Expressway and its matching salvation, maintenance cleaning, auto parts supply services; the maintenance and management of Jiujiang Bridge of Guangzhan Expressway and car Guangdong salvation and maintenance (operated by RMB 6,861,865,596 Fokai Subsidiary its subsidiaries); sales of industrial Expressway 1.108 3,861,467,719.99 593,321,339.10 221,137,015.06 209,763,661.11 .10 Expresswa production materials (not containing gold, billion silver, automobile and dangerous chemicals), building materials, department stores, needles, textiles, hardware, alternating current; parking services. Operating Guangfo Expressway Co., Ltd.(starts Guangfo RMB 200 487,137,113.1 Subsidiary from Hengsha, Guangzhou, ends in Xiebian, Expressway 453,427,169.62 201,131,785.00 129,551,750.04 98,378,474.42 Expressway million 4 Foshan. Total length 15.7 kilometers Guangzhu Traffic Highway investment management and RMB 3 3,546,576,488 Investment Subsidiary Expressway 1,604,701,175.74 631,857,976.08 392,201,443.64 293,273,313.76 consultation; highway maintenance million .62 Managemen t Co., Ltd. 20 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Jingzhu The operation and management of Expressway Guangzhou-Zhuhai Expressway and provision of RMB 580 3,540,907,882 Guangzhu Subsidiary Expressway 1,599,205,894.74 631,857,976.08 391,032,837.78 292,278,032.76 supporting services including fueling, salvage million .76 Section Co., and supply of parts and components Ltd. Investment in and construction of Guanghui Expressway Co., Ltd. and supporting facilities, Guangdong the toll collection and maintenance management RMB Guanghui Sharing of Guanghui Expressway, The Guanghui 4,937,552,137 Expressway 2.352 3,369,966,511.06 856,966,099.09 566,457,964.33 427,632,054.17 Expressway company Expressway's supporting gas station, .54 million Co., Ltd. salvation, vehicle maintenance, vehicle transport, catering, warehousing investment and development Subsidiaries obtained or disposed in the reporting period □ Applicable √ Not applicable 21 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Particulars about the Mutual holding companies 1. Guangdong Provincial Fokai Expressway Co. Ltd which is one of the subsidiaries majority-controlled by the company and the subsidiary mainly engaged in operating and managing the Fokai Expressway and the related matching businesses such as rescue, maintenance, cleaning and spare parts supply service. The net profits in the current period increased RMB 10.6103 million compared with the last period, computed in percentage as an increase of 5.33%. The main reason for the increase was the combined effect of the natural increase of the toll revenue and the reduction of the financial costs. 2. The main reason for the increase was the combined effect of the natural increase of the toll revenue and the reduction of the financial costs. The net profits in the current period increased RMB 65.0501 million and 28.63% compared with the last period, The main reason for the increase is the following factors: (1) Due to the impact of some vehicle circumventing to take the way of Guang-Zhu Section of Beijing-Zhuhai 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 of Guuang-Zhu-Dong Expressway increased; (2) the natural growth of toll income; (3) the interest-bearing debt repayment led to reduced financial costs. 3.The Company holds a 75% equity interest in the Guangfo company, the construction and operation of the Guangzhou-Foshan Expressway, including road maintenance, charges, signs, marking and other transport facilities maintenance, Vehicle rescue and other business. The current net profit increased by RMB57.2987 million, an increase of 139.48%, the increasing is due to natural income growth and financial costs to reduce the combined impact. The main reason for the increase is the combined effect of the following factors: (1)the natural growth of toll income; (2) The depreciation of Guangfo Expressway has been fully drawn in the current reporting period, so that led to a decrease in depreciation. 22 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 VIII.Structured vehicle controlled by the Company □ Applicable √ Not applicable IX. Prediction of business performance for January -September 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. X.Risks facing the Company and countermeasures The company’s profits mainly come from the expressway tolls revenue and the toll charging standards shall be examined by the traffic authority of the provincial, autonomous region and the direct-controlled municipality people’s governments together with the same-level pricing authority and then submitted to the same-level people’s government for approval. Therefore, the charging price adjustment trend and the possibility of the charging price adjustment upon rising of the commodity price and the company cost in the future are still subject to relevant national policies and the approval of the governmental department. And the company can’t adjust the charging standards promptly based on its own operation cost or the market supply-demand changes. In conclusion, the charging policies change and the charging standards adjustment have the influence on the expressway business of the company to some extent. 23 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 V. Important Events I. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting Period 1.Annual General Meeting Investor Index to disclosed Meeting Type participati Convened date Disclosure date information on ratio Annual 2016 Shareholders’ general Shareholders’ 68.94% April 28,2017 April 29,2017 www.cninfo.com.cn meeting General Meeting 2. Preferred stockholders restored voting rights to request to convene Provisional Shareholders’ Meeting. □Applicable√Not applicable II. Proposal for profit distribution and converting capital Reserve into share actual for the reporting period □ Applicable √Not applicable For the reporting period, the Company plans not to distribute cash dividends or bonus shares or convert capital reserve into share capital. 24 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 III. The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the reporting period made by the company, shareholder, actual controller, acquirer, director, supervisor, senior management personnel and other related parities. √ Applicable □ Not applicable Time of Commitment Period of Commitment Type Contents making Fulfillment maker commitment commitment Commitment on share reform Commitment in the acquisition report or the report on equity changes Guangdong Provincial Traffic Group Co., Ltd committed: Within 1 year Change the Within 1 year Guangdong from the date of completion of the assets restructuring, it shall hire time limit for from the date Commitment made upon the assets Communicati Other professional institutions to sort out, prepare documents required for January 19, the of completion replacement on Group Co., commitment registration of ownership and complete the registration procedure of 2016 completion of of the assets Ltd. ownership of the relevant lands of Beijing Zhuhai Expressway Guang Zhu the restructuring Section Co., Ltd-that are located in Guangzhou City and Zhuhai city. undertaking Commitments made upon first issuance or refinance Equity incentive commitment Other commitments for medium andsmall shareholders Implemented or not(Y/N) No Where the commitment is overdue Through the deliberation and approval of the 11th temporary meeting of the 8th Board of Directors and the 1st temporary general meeting of and has not been fulfilled, then the shareholders in 2017, it agrees on the change of Guangdong Traffic Group Co., Ltd. commitments about relevant land and housing handling the specific reasons for the failure to ownership registration procedures of the asset reorganization subject Guangdong Fokai Expressway Co., Ltd. and Jingzhu Expressway Guangzhu Section complete and the next work plan shall Co., Ltd. among major assets reorganization for which, the company issues shares, pay for assets purchase in cash and collect the supporting capital in be specified 2016. The same above is changed into that to speed up the certificate handling and to complete handling of relevant ownership registration procedures 25 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 related to the land and housing within 3 years after such major assets reorganization, among which, the ownership registration procedures of the relevant land and housing (excluded by relevant governmental confirmation letters) of Guangzhudong company in Guangzhou and Zhuhai administrative regions, which are not equipped with the ownership certificates, shall also be completed within the same time above. Refer to the Announcement on the Completion Progress Condition of the Major Assets Reorganization Commitments and the Completion Period of the Dominant Shareholder’s Application for Changing Partial Commitments and Announcement of the Resolution of the 11th Session (Temporary) of the 8th Board of Directors on July 4, 2017 and the Announcement of the Resolution of the 1st Temporary General Meeting of Shareholders on July 20, 2017 of the company on Securities Times, China Securities Journal and Shanghai Securities News for details about the partial commitments change. 26 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 IV. Particulars about engagement and disengagement of CPAs firm Whether the semi-annual financial report had been audited? □ Yes √ No Not been audited. V.Explanations given by board of directors and supervisory board regarding “ Modified auditor’s” Issued by CPAs firm for the reporting period □ Applicable √ Not applicable VI. Explanations given by Board of Directors regarding “ Modified auditor’s Report” Issued for last year □ Applicable √ Not applicable VII. Bankruptcy and restructuring □ Applicable √ Not applicable No such cases in the reporting period. 27 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 VIII. Legal matters Signifieant lawsuits or arbitrations □ Applicable √ Not applicable No such cases in the reporting period. Other legal matters √ Applicable □ Not applicable Litigation Amount Litigation Litigation (arbitration) involved Forming of the (arbitration) Date of Index of Basic conditions of litigation (arbitration) (arbitration) judgement (RMB’0000 predicted debt judgement result disclosure disclosure progress execution ) and influence condition On August 22, 2007, Guangdong Fokai Expressway Co., Ltd. filed a lawsuit with Guangzhou Maritime Court officially requiring Foshan Nanhai Yuhang Shipping Co., Ltd. and Yang Xiong to undertake the joint and several liabilities for the toll losses of Fokai company due to the Jiujiang collapse. On March 7, No major 2014, the court made the first instance judgement requiring the defendants Waiting for influence on the Foshan Nanhai Yuhang Shipping Co., Ltd. and Yang Xiong to compensate the the court 1,935.75 No company asset None defendant Guangdong Fokai Expressway Co., Ltd. jointly for the vehicle toll judgement conditions and the revenue loss totaling 19,357,500.96 yuan. Guangdong Higher People's Court result operation results. entered a judgement on June 5, 2014 and the lawsuit terminated. By the end of the report period, the abatement of action causes are already removed and the provincial higher court restores the hearing and conducts the investigation on April 21, 2017. Now it’s still the time waiting for the court judgement. On June 12, 2009, the 6.15 accident-causing boat owner Yang Xiong filed a During No major lawsuit with Guangzhou Maritime Court requiring Fokai company to abatement influence on the compensate for the boat loss and interest totaling 7.28 million yuan. On 728.00 No of action by company asset None December 20, 2013, the court made the first instance judgement rejecting all the second conditions and the litigation claims of Yang Xiong. He filed a lawsuit with Guangdong Higher instance operation results. 28 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 People's Court against such sentence above, and the second instance terminated the lawsuit in May 2015. By the end of the report period, the lawsuit is still suspended without any notice from the provincial higher court. No major In August 2016, Tang Jiannan filed a lawsuit with the People’s Court in Yuexiu Waiting for influence on the District of Guangzhou city requiring the court to verify the ownership of about the court 6.5 No company asset None 7,734 shares of YGS Share A and corresponding interest under the name of judgement conditions and the Yang Yiming. result operation results. 29 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 IX. Punishments and rectifications □ Applicable √ Not applicable No such cases in the reporting period. X. Credit conditions of the Company as well as its Controlling shareholder and actual Controller □ Applicable √ Not applicable XI.Equity incentive plans, employee stock ownership plans or other incentive measures for employees □ Applicable √ Not applicable No such cases in the reporting period. XII.Material related transactions 1. Related transactions in connection with daily operation □ Applicable √ Not applicable No such cases in the reporting period. 2. Related-party transactions arising from asset acquisition or sold □Applicable √ Not applicable No such cases in the reporting period. 3. Related-party transitions with joint investments □Applicable √ Not applicable No such cases in the reporting period. 4. Credits and liabilities with related parties √ Applicable □Not applicable Whether has non-operational contact of related liability and debts or not □ Yes √ No No such cases in the reporting period. 5. Other significant related-party transactions √ Applicable □Not applicable (1)The 7th meeting of the Eighth board of directors of the Company examined and adopted the Proposal for Renewing the Lease of Litong Plaza as Office Building. Agreed to continue to leasing the full floor of 44th floor and the full floor unit of 43th floor (self-directed the full floor of 46th floor and the full floor unit of 45th floor) 30 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 of Litong Plaza planning floor of Guangdong Litong Property Investment Co., Ltd as the office use, with the time from May 5, 2017 to May 4, 2020. The monthly rent standard in the period from May 5, 2017 to May 4, 2018 is RMB 735,092, and the monthly rent standard in the period from May 5, 2018 to May 4, 2020 is RMB 771,847. During the lease period, RMB 147,387 will be paid to the Guangzhou branch of Beijing Shibang Property Management Service Co., Ltd every month. 2. The Proposal about the Daily Related Transaction of 2017 of the Company was examined and approved in the 7th meeting of the 8th session of the Board of Directors, agreed that the company and its wholly-owned subsidiaries and holding subsidiaries had the total transaction amount of RMB 58.6903 million. The website to disclose the interim announcements on significant related-party transactions Date of disclosing provisional Description of the website for disclosing Description of provisional announcement announcement provisional announcements Related transaction announcement March 31,2017 www.cninfo.com.cn Announcement of related party transactions of March 31,2017 www.cninfo.com.cn 2017 XIII. Particulars about the non-operating occupation of funds by the Controlling shareholder and other related parties of the Company □Applicable √ Not applicable The company was not involved in the non-operating occupation of funds by the controlling shareholder and other related parties during the reporting period. XIV. Significant contracts and execution 1.Entrustments, contracting and leasing (1)Entrustment □Applicable √ Not applicable No such cases in the reporting period. (2)Contracting □Applicable √ Not applicable No such cases in the reporting period. (3)Leasing □Applicable √ Not applicable No such cases in the reporting period. 31 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 2.Contracting □Applicable √ Not applicable No such cases in the reporting period. 3. Other significant contracts □Applicable √ Not applicable No such cases in the reporting period. XV.Social responsibilities 1.Overview of the annual targeted poverty alleviation The Company has no precision poverty alleviation temporary I nhte year, and no subsequent program either. 2.Major environmental protection The Listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department No XVI.Other material events √ 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 eighth meeting(Temporary) of the eighth session board of directors of the company and was approved in the 2016 annual shareholders' general meeting , agreed to the company's merger and consolidation of the wholly-owned subsidiary-Guangdong Fokai Expressway Co., Ltd. In May 2017, the company set up the Guangdong Provincial Expressway Development Co., Ltd Foshan Branch Company, and completed the relevant industrial and commercial registration procedures. On August 1, 2017, the operation and management of the Fokai Expressway was officially transferred to Fokai Branch Company from Fokai Company. Description of the website for Date of disclosing Description of provisional announcement disclosing provisional provisional announcement announcements th Announcement of Resolutions of the 8 (Provisional) Meeting of April 8,2017 www.cninfo.com.cn the Eighth Board of Directors Announcement of Merger April 8,2017 www.cninfo.com.cn Notice of Holding 2016 Annual Shareholders' General Meeting April 29,2017 www.cninfo.com.cn Announcement on the progress of major Events May 4,2017 www.cninfo.com.cn 32 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 XVII. Material events of subsidiaries □ Applicable √ Not applicable VI. Change of share capital and shareholding of Principal Shareholders I.Changes in share capital 1. Changes in share capital In shares Before the change Increase/decrease(+,-) After the Change Amount Proportion Capitalization Share Bonus Proportio of common Other Subtotal Quantity allotment shares n reserve fund 1.Shares with conditional 1,273,392,897 60.90% -222,595 -222,595 1,273,170,302 60.89% subscription 1.State-owned shares 409,977,151 19.61% 25,702 25,702 410,002,853 19.61% 2.State-owned legal person 521,393,021 24.94% 521,393,021 24.94% shares 3.Other domestic shares 342,022,725 16.35% -248,297 -248,297 341,774,428 16.34% Including :Domestic 341,260,941 16.32% -35,155 -35,155 341,225,786 16.32% Legal person shares Domestic natural person 761,784 0.03% -213,142 -213,142 548,642 0.02% shares II.Shares with 817,413,229 39.10% 222,595 222,595 817,635,824 39.11% unconditional subscription 1.Common shares in RMB 468,663,229 22.42% 222,595 222,595 468,885,824 22.43% 2.Foreign shares in 348,750,000 16.68% 348,750,000 16.68% domestic market III. Total of capital shares 2,090,806,126 100.00% 0 0 2,090,806,126 100.00% Reasons for share changed √ Applicable □Not applicable Note 1: within the report period, 40 shareholders repay the 25,702 consideration shares of the equity division reform prepaid by Guangdong Traffic Group Co., Ltd. and such shares transfer into the “state holdings” from the “domestic legal person holdings” and “domestic natural person holdings”. 33 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Note 2: within the report period, “domestic legal person holdings” totaling 35,155 shares and “domestic natural person holdings” totaling 156,255 shares are released from the sales restriction and listed for circulation on April 26, 2017 and transferred into the “unlimited tradable shares”. Notes 3:Ms. Tu Hui Ling resigned from the supervisors of the Company for six months due to retirement,56,887 conditional shares held by him were transferred into frozen shares for unrestricted negotiable shares . Approval of Change of Shares □ Applicable √ Not applicable Ownership transfer of share changes □ Applicable √ Not applicable Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period □ Applicable √ Not applicable Other information necessary to disclose for the company or need to disclosed under requirement from security regulators □ Applicable √ Not applicable 2. Change of shares with limited sales condition √ Applicable □Not applicable In RMB Number of Number of Increased Restricted Date of Shareholder Initial Restricted Reason for Restricted Unrestricted Restricted Shares in the Restriction Name Shares Shares Shares This Term Shares End of the Term Removal This Term the commitment and special ones 40 shareholders repay and have been Guangdong prepay shares of the fulfilled and the Communication 409,977,151 0 25,702 410,002,853 equity division reform date releasing the Group Co.,Ltd consideration sales restriction has not been determined yet On January 23, 2017, 40 40 shareholders shareholders repaid the of Taoyuan Real 25,702 consideration Estate shares of the equity 191,410 165,708 -25,702 0 April, 28,2017 Development division reform prepaid company in by Guangdong Traffic Heshan city, etc. Group Co., Ltd. due to the equity division reform Total 410,168,561 165,708 0 410,002,853 -- -- 34 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 II.Issuing and listing □ Applicable √ Not applicable III. Shareholders and shareholding In Shares Total number of preferred Total number of common shareholders that had restored the shareholders at the end of the 76,384 0 voting right at the end of the reporting period reporting period (if any) (note 8) Particulars about shares held above 5% by shareholders or top ten shareholders Changes Number of share pledged/frozen Proportion Number of Amount of Amount of Nature of in Shareholders of shares shares held at restricted un-restricted shareholder reportin State of share Amount held(%) period -end shares held shares held g period Guangdong State-owned Communication 24.55% 513,382,595 410,002,853 103,379,742 legal person Group Co.,Ltd Guangdong Highway State-owned 22.30% 466,325,020 466,325,020 Construction legal person Co., Ltd, Yadong Fuxing Domestic non Yalian State-own 9.68% 202,429,149 202,429,149 Pledge 202,429,000 Investment Co., ed Ltd. Legal person Tibet Yingyue Domestic non Investment State-own 4.84% 101,214,574 101,214,574 Management ed Co., Ltd. Legal person Guangdong State-owned Expressway 2.53% 52,937,491 52,937,491 legal person Co., Ltd. Domestic non Guangfa State-own Securities Co., 1.45% 30,364,372 30,364,372 ed Ltd. Legal person Domestic Feng Wuchu 1.04% 21,724,797 natural person 35 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 shares PERSHING Foreign legal 0.90% 18,744,850 LLC person Xinyue Co., Foreign legal 0.63% 13,201,086 Ltd. person Bank of Communication s-Hybrid securities Other 0.54% 11,222,170 investment fund in Huaan strategy optimization Guangdong Provincial Highway Construction Co., Ltd., Guangdong Province Expressway Co., Ltd., Strategy investors or general Guangdong Provincial Highway Construction Co., Ltd., Yadong Fosun Asia Investment Co., Ltd., legal person becomes top 10 Tibet Yingyue Investment Management Co., Ltd., Guangfa Securities Co., Ltd. Due to additional shareholders due to rights issued holdings, The shares were 466,325,020 shares, 202,429,149 shares, 101,214,574 shares, 33,355,263 (if any)(Notes 3) shares, 30,364,372 shares, totaling 833,688,378 shares. The holding period is: July 8, 2016 to July 8, 2019. Guangdong Communication Group Co., Ltd. is the parent company of Guangdong Expressway Co., Explanation on associated Ltd. and Guangdong Highway Construction Co., Ltd.. It is unknown whether there is relationship relationship among the between other shareholders and whether they are persons taking concerted action specified in the aforesaid shareholders Regulations on Disclosure of Information about Change in Shareholding of Shareholders of Listed Companies. Shareholding of top 10 shareholders of unrestricted shares Quantity of unrestricted shares held at the end Share type Name of the shareholder of the reporting period Share type Quantity RMB Common Guangdong Communication Group Co.,Ltd 103,379,742 103,379,742 shares RMB Common 19,808,890 shares Feng Wuchu 21,724,797 Foreign shares placed in domestic 1,915,907 exchange Foreign shares PERSHING LLC 18,744,850 placed in domestic 18,744,850 exchange Foreign shares Xinyue Co., Ltd. 13,201,086 placed in domestic 13,201,086 exchange 36 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Bank of Communications-Hybrid securities RMB Common investment fund in Huaan strategy 11,222,170 11,222,170 shares optimization Foreign shares GUOTAI JUNAN 9,058,001 placed in domestic 9,058,001 SECURITIES(HONGKONG) LIMITED exchange RMB Common Khazanah Nasional Berhad-self fund 8,844,250 8,844,250 shares Foreign shares MATTHEWS CHINA DIVIDEND FUND 8,325,006 placed in domestic 8,325,006 exchange Foreign shares BBH A/C VANGUARD EMERGING 6,541,331 placed in domestic 6,541,331 MARKETS STOCK INDEX FUND exchange Foreign shares DBS VICKERS (HONG KONG) LTD A/C 5,641,654 placed in domestic 5,641,654 CLIENTS exchange Explanation on associated relationship or consistent action among the top 10 Explanation on associated relationship or consistent action among the top 10 shareholders of non-restricted negotiable shareholders of non-restricted negotiable shares and that between the top 10 shares and that between the top 10 shareholders of non-restricted negotiable shares and top 10 shareholders shareholders of non-restricted negotiable shares and top 10 shareholders 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. IV. Change of the controlling shareholder or the actual controller Change of the controlling shareholder in the reporting period □ Applicable √ Not Applicable There was no any change of the controlling shareholder of the Company in the reporting period. Change of the actual controller in the reporting period □ Applicable √ Not applicable There was no any change of the actual controller of the Company in the reporting period. 37 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 VII. Situation of the Preferred Shares □Applicable √Not applicable The Company had no preferred shares in the reporting period 38 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 VIII. Information about Directors, Supervisors and Senior Executives I. Change in shares held by directors, supervisors and senior executives √ Applicable □Not applicable Amount of Amount of Number of Number of shares shares Number of Shares Shares restricted restricted increased decreased restricted stock Office held at the held at the stock granted stock granted Name Position at the at the granted at the status year-begin year-endin at the at the reporting reporting year-ending(shar (share) g(share) year-begin . reporting period(sha period(sha e) share) period(share) re) re) Director, Wang In General 0 135,100 0 135,100 0 0 0 Chunhua office Manager Total -- -- 0 135,100 0 135,100 0 0 0 II. Change in shares held by directors, supervisors and senior executives √ Appicable □Not applicable Name Positions Types Date Reason Zheng Renfa Board chairman Elected January 4,2017 Elected Chen Wenmian Deputy GM Dismiss April 11,2017 Job change Director, Liu Xiaomei Dismiss July 19,2017 Resignation Board secretary 39 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 IX. Corporate Bond Whether the company has corporate bonds that have been publicly issued and listed on the stock exchange, and not yet due or due but not folly cashed on the approval date of annual report No X. Financial Report I. Audit report Has this semi-annual report been audited? □Yes √No The semi-annual report was not audited. II. Financial statements Currency unit for the statements in the notes to these financial statements: RMB 1. Consolidated balance sheet Prepared by::Guangdong Provincial Expressway Development Co., Ltd. June 30, 2017 In RMB Items At the end of term Beginning of term Current asset: Monetary fund 2,596,273,900.39 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 81,861,655.16 40,681,197.01 Prepayments 2,090,098.10 2,860,130.35 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable 40 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Items At the end of term Beginning of term Interest receivable Dividend receivable 23,054,984.51 Other account receivable 23,067,768.72 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 2,726,728,014.91 2,672,368,459.17 Non-current assets: Loans and payment on other’s behalf disbursed Disposable financial asset 1,751,357,624.93 1,718,421,932.77 Expired investment in possess Long-term receivable Long term share equity investment 2,283,902,186.05 2,220,805,130.31 Property investment 2,987,864.38 3,219,971.08 Fixed assets 8,874,578,467.58 9,285,823,302.77 Construction in progress 202,539,473.20 149,244,110.30 Engineering material 1,549,556.00 1,549,556.00 Fixed asset disposal Production physical assets Gas & petrol Intangible assets 4,322,609.82 6,138,294.90 R & D petrol Goodwill Long-germ expenses to be amortized 857,464.05 1,763,966.07 Differed income tax asset 222,795,171.12 10,810,322.94 Other non-current asset 2,088,600.97 2,300,170.28 Total of non-current assets 13,346,979,018.10 13,400,076,757.42 Total of assets 16,073,707,033.01 16,072,445,216.59 Current liabilities Short-term loans Loan from Central Bank 41 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Items At the end of term Beginning of term 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 207,563,438.89 299,414,047.07 Advance payment 16,485,866.82 17,440,023.40 Selling of repurchased financial assets Fees and commissions receivable Employees’ wage payable 14,518,023.53 8,840,599.13 Tax payable 115,032,413.48 106,370,898.31 Interest payable 7,986,358.47 8,945,283.52 Dividend payable 14,772,372.03 12,506,777.92 Other account payable 82,099,926.52 134,266,141.34 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 1,070,610,000.00 957,880,000.00 Other current liability Total of current liability 1,529,068,399.74 1,545,663,770.69 Non-current liabilities: Long-term loan 5,110,950,000.00 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 42 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Items At the end of term Beginning of term Deferred income tax liability 376,019,272.83 278,463,647.00 Other non-current liabilities Total non-current liabilities 5,488,991,482.94 5,683,265,857.11 Total of liability 7,018,059,882.68 7,228,929,627.80 Owners’ equity Share capital 2,090,806,126.00 2,090,806,126.00 Other equity instruments Including:preferred stock Sustainable debt Capital reserves 2,508,408,342.99 2,508,408,342.99 Less:Shares in stock Other comprehensive income 326,416,234.80 402,285,954.24 Special reserves Surplus reserves 366,956,549.89 366,956,549.89 Common risk provision Undistributed profit 3,110,900,482.46 2,920,563,328.27 Total of owner’s equity belong to the parent company 8,403,487,736.14 8,289,020,301.39 Minority shareholders’ equity 652,159,414.19 554,495,287.40 Total of owners’ equity 9,055,647,150.33 8,843,515,588.79 Total of liabilities and owners’ equity 16,073,707,033.01 16,072,445,216.59 Legal Representative:Zheng Renfa General Manager: Wang Chunhua Person in charge of accounting:Fang Zhi Accounting Dept Leader: Zhou Fang 43 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 2.Parent Company Balance Sheet In RMB Items At the end of term Beginning of term Current asset: Monetary fund 2,326,758,717.75 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 2,059,362.84 Interest receivable 36,446,037.51 34,833.33 Dividend receivable 172,639,943.31 24,000,000.00 Other account receivable 6,543,347.81 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 Total of current assets 2,627,388,046.38 1,918,899,585.29 Non-current assets: Disposable financial asset 1,751,357,624.93 1,718,421,932.77 Expired investment in possess Long-term receivable Long term share equity investment 7,449,064,405.71 7,385,967,349.97 Property investment 2,735,726.13 2,967,832.83 Fixed assets 2,202,541.47 2,744,611.16 Construction in progress Engineering material Fixed asset disposal Production physical assets Gas & petrol Intangible assets 571,909.42 725,234.38 R & D petrol Goodwill 44 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Items At the end of term Beginning of term Long-germ expenses to be amortized 709,033.82 1,559,874.44 Differed income tax asset 220,270,567.14 Other non-current asset 857,903,684.98 847,903,684.98 Total of non-current assets 10,284,815,493.60 9,960,290,520.53 Total of assets 12,912,203,539.98 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 1,442,385.54 1,347,078.47 Tax payable 1,994,399.01 1,986,670.18 Interest payable 4,103,929.11 4,469,288.30 Dividend payable 14,772,372.03 12,506,777.92 Other account payable 63,350,110.41 1,989,088.70 Liabilities held for sales Non-current liability due in 1 year 200,000.00 50,200,000.00 Other current liability 1,430,077,397.33 836,363,256.69 Total of current liability 1,515,940,593.43 908,862,160.26 Non-current liabilities: Long-term loan 2,999,600,000.00 2,999,700,000.00 Bond payable Including:preferred stock Sustainable debt Long-term payable 2,022,210.11 2,022,210.11 Employees’ wage payable Special payable Expected liabilities Deferred income Deferred income tax liability 108,805,411.60 45 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Items At the end of term Beginning of term Other non-current liabilities Total of Non-current liabilities 3,110,427,621.71 3,001,722,210.11 Total of liability 4,626,368,215.14 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 326,416,234.80 402,285,954.24 Special reserves Surplus reserves 351,112,266.24 351,112,266.24 Undistributed profit 2,157,709,004.68 1,764,609,695.85 Total of owners’ equity 8,285,835,324.84 7,968,605,735.45 Total of liabilities and owners’ equity 12,912,203,539.98 11,879,190,105.82 Legal Representative:Zheng Renfa General Manager: Wang Chunhua Person in charge of accounting:Fang Zhi Accounting Dept Leader: Zhou Fang 3.Consolidated Income statement In RMB Items Report period Same period of the previous year I. Income from the key business 1,440,222,563.74 1,333,492,179.77 Incl:Business income 1,440,222,563.74 1,333,492,179.77 Interest income Insurance fee earned Fee and commission received II. Total business cost 752,280,475.16 862,251,224.53 Incl:Business cost 533,689,845.16 558,947,473.08 46 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Items Report period Same period of the previous year 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 6,895,775.06 33,096,380.69 Sales expense Administrative expense 77,693,914.84 79,766,582.60 Financial expenses 133,804,359.02 190,618,235.21 Asset impairment loss 196,581.08 -177,447.05 Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 223,430,364.44 227,430,687.32 Incl: investment gains from affiliates 199,376,107.62 181,732,975.66 Gains from currency exchange(“-”for loss) Other income III. Operational profit(“-”for loss) 911,372,453.02 698,671,642.56 Add :Non-operational income 62,299,078.58 63,681,145.14 Including:Income from disposal of non-current 111,175.47 assets Less:Non business expenses 3,099,474.26 878,328.59 Incl:Loss from disposal of non-current assets 2,629,016.43 102,453.65 IV.Total profit(“-”for loss) 970,572,057.34 761,474,459.11 Less:Income tax expenses -19,940,081.98 157,332,820.43 V. Net profit 990,512,139.32 604,141,638.68 Net profit attributable to the owners of parent 892,848,012.53 505,899,144.29 company Minority shareholders’ equity 97,664,126.79 98,242,494.39 VI. Other comprehensive income -75,869,719.44 -112,922,373.12 Net of profit of other comprehensive income attributa -75,869,719.44 -112,922,373.12 ble to owners of the parent company. (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent 47 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Items Report period Same period of the previous year accounting period 1.Re-measurement of defined benefit plans of change s in net debt or net assets 2.Other comprehensive income under the equity meth od investee can not be reclassified into profit or loss. (II) Other comprehensive income that will be reclassified -75,869,719.44 -112,922,373.12 into profit or loss. 1.Other comprehensive income under the equity meth od investee can be reclassified into profit or loss. 2.Gains and losses from changes in fair value availabl -75,869,719.44 -112,922,373.12 e for sale financial assets 3.Held-to-maturity investments reclassified to gains a nd losses of available for sale financial assets 4.The effective portion of cash flow hedges and losse s 5.Translation differences in currency financial statem ents 6.Other 7.Net of profit of other comprehensive income attribu table to Minority shareholders’ equity VII. Total comprehensive income 914,642,419.88 491,219,265.56 Total comprehensive income attributable to the owner 816,978,293.09 392,976,771.17 of the parent company Total comprehensive income attributable minority 97,664,126.79 98,242,494.39 shareholders VIII. Earnings per share (I)Basic earnings per share 0.43 0.29 (II)Diluted earnings per share 0.43 0.29 The current business combination under common control, the net profits of the combined party before achieved ne t profit of RMB 0.00, last period the combined party realized RMB0.00. Legal Representative:Zheng Renfa General Manager: Wang Chunhua Person in charge of accounting:Fang Zhi 48 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Accounting Dept Leader: Zhou Fang 4. Income statement of the Parent Company In RMB Items Report period Same period of the previous year I. Income from the key business 38,224,276.41 10,505,002.81 Incl:Business cost 232,106.70 232,106.70 Business tax and surcharge 45,569.27 361,458.40 Sales expense Administrative expense 26,557,947.35 30,982,635.92 Financial expenses 66,857,722.21 73,447,382.17 Asset impairment loss Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 930,734,790.73 292,397,437.40 Incl: investment gains from affiliates 199,376,107.62 215,901,030.71 Other income II. Operational profit(“-”for loss) 875,265,721.61 197,878,857.02 Add :Non-operational income 73,878.42 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) 875,339,600.03 197,878,857.02 Less:Income tax expenses -220,270,567.14 IV. Net profit(“-”for net loss) 1,095,610,167.17 197,878,857.02 V.Net of profit of other comprehensive income -75,869,719.44 -112,922,373.12 (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 1.Re-measurement of defined benefit plans of changes i n net debt or net assets 2.Other comprehensive income under the equity method investee can not be reclassified into profit or loss. ( II ) Other comprehensive income that will be reclassified in -75,869,719.44 -112,922,373.12 to profit or loss. 49 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Items Report period Same period of the previous year 1.Other comprehensive income under the equity method investee can be reclassified into profit or loss. 2.Gains and losses from changes in fair value available -75,869,719.44 -112,922,373.12 for sale financial assets 3.Held-to-maturity investments reclassified to gains and losses of available for sale financial assets 4.The effective portion of cash flow hedges and losses 5.Translation differences in currency financial statemen ts 6.Other VI. Total comprehensive income 1,019,740,447.73 84,956,483.90 VII. Earnings per share: (I)Basic earnings per share (II)Diluted earnings per share Legal Representative:Zheng 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 Report period Same period of the previous year I.Cash flows from operating activities Cash received from sales of goods or rending of services 1,437,384,420.88 1,332,381,201.70 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 trade financial asset disposal 50 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Items Report period Same period of the previous year 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 operation 60,818,976.35 42,007,100.90 Sub-total of cash inflow 1,498,203,397.23 1,374,388,302.60 Cash paid for purchasing of merchandise and services 65,216,674.54 47,639,137.85 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 132,850,018.53 138,780,053.43 Taxes paid 241,335,946.56 191,444,172.08 Other cash paid for business activities 36,408,522.23 63,642,109.86 Sub-total of cash outflow from business activities 475,811,161.86 441,505,473.22 Cash flow generated by business operation, net 1,022,392,235.37 932,882,829.38 II.Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains 137,278,324.19 143,375,677.40 Net cash retrieved from disposal of fixed assets, intangible 6,250.00 606,975.00 assets, and other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 59,995,667.68 60,770,000.00 Sub-total of cash inflow due to investment activities 197,280,241.87 204,752,652.40 Cash paid for construction of fixed assets, intangible assets 200,612,133.89 69,443,291.01 and other long-term assets Cash paid as investment 803,500,000.00 Net increase of loan against pledge Net cash received from subsidiaries and other operational units Other cash paid for investment activities 987,903,684.98 Sub-total of cash outflow due to investment activities 200,612,133.89 1,860,846,975.99 51 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Items Report period Same period of the previous year Net cash flow generated by investment -3,331,892.02 -1,656,094,323.59 III.Cash flow generated by financing Cash received as investment 1,633,499,989.30 Incl: Cash received as investment from minor shareholders Cash received as loans 499,000,000.00 499,000,000.00 Cash received from bond placing Other financing –related ash received 5,173.81 Sub-total of cash inflow from financing activities 499,000,000.00 2,132,505,163.11 Cash to repay debts 678,100,000.00 596,400,000.00 Cash paid as dividend, profit, or interests 848,413,171.72 330,423,880.43 Incl: Dividend and profit paid by subsidiaries to minor 10,266,231.67 shareholders Other cash paid for financing activities 3,984,368.84 Sub-total of cash outflow due to financing activities 1,526,513,171.72 930,808,249.27 Net cash flow generated by financing -1,027,513,171.72 1,201,696,913.84 IV. Influence of exchange rate alternation on cash and cash 1,447,084.51 -523,203.86 equivalents V.Net increase of cash and cash equivalents -7,005,743.86 477,962,215.77 Add: balance of cash and cash equivalents at the beginning of 2,603,279,644.25 1,199,629,276.85 term VI ..Balance of cash and cash equivalents at the end of term 2,596,273,900.39 1,677,591,492.62 Legal Representative:Zheng Renfa General Manager: Wang Chunhua Person in charge of accounting:Fang Zhi Accounting Dept Leader: Zhou Fang 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 rending of services 3,621,896.95 6,683,948.58 52 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Items Amount in this period Amount in last period Tax returned Other cash received from business operation 616,912,385.89 377,038,257.24 Sub-total of cash inflow 620,534,282.84 383,722,205.82 Cash paid for purchasing of merchandise and services Cash paid to staffs or paid for staffs 16,270,436.06 18,319,723.15 Taxes paid 550,122.41 695,332.37 Other cash paid for business activities 27,384,975.76 23,791,412.76 Sub-total of cash outflow from business activities 44,205,534.23 42,806,468.28 Cash flow generated by business operation, net 576,328,748.61 340,915,737.54 II.Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains 718,997,791.68 174,174,372.43 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 70,491,251.01 22,151,791.67 Sub-total of cash inflow due to investment activities 789,489,042.69 196,326,164.10 Cash paid for construction of fixed assets, intangible assets and other long-term assets Cash paid as investment 803,500,000.00 Net cash received from subsidiaries and other operational units Other cash paid for investment activities 10,000,000.00 987,903,684.98 Sub-total of cash outflow due to investment activities 10,000,000.00 1,791,403,684.98 Net cash flow generated by investment 779,489,042.69 -1,595,077,520.88 III.Cash flow generated by financing Cash received as investment 1,633,499,989.30 Cash received as loans Cash received from bond placing Other financing –related ash received 5,173.81 Sub-total of cash inflow from financing activities 1,633,505,163.11 Cash to repay debts 50,100,000.00 Cash paid as dividend, profit, or interests 775,861,281.94 232,245,858.07 53 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Items Amount in this period Amount in last period Other cash paid for financing activities 3,984,368.84 Sub-total of cash outflow due to financing activities 825,961,281.94 236,230,226.91 Net cash flow generated by financing -825,961,281.94 1,397,274,936.20 IV. Influence of exchange rate alternation on cash and cash 1,447,084.51 -523,203.86 equivalents V.Net increase of cash and cash equivalents 531,303,593.87 142,589,949.00 Add: balance of cash and cash equivalents at the beginning of term 1,795,455,123.88 822,286,507.11 VI ..Balance of cash and cash equivalents at the end of term 2,326,758,717.75 964,876,456.11 Legal Representative:Zheng Renfa General Manager: Wang Chunhua Person in charge of accounting:Fang Zhi Accounting Dept Leader: Zhou Fang 54 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 7. Consolidated Statement on Change in Owners’ Equity Amount in this period In RMB Amount in this period Owner’s equity Attributable to the Parent Company Other Equity instrument Minor Items Commo Less: Other Speciali Total of owners’ n risk shareholders’ Share Capital prefer Capital reserves Shares Comprehensive zed Surplus reserves Attributable profit equity Sustai provisio equity red Other in stock Income reserve nable n stock debt I.Balance at the 2,090,806,126.00 2,508,408,342.99 402,285,954.24 366,956,549.89 2,920,563,328.27 554,495,287.40 8,843,515,588.79 end of last year Add: Change of accounting policy Correcting of previous errors Merger of entities under common control Other II.Balance at the beginning of 2,090,806,126.00 2,508,408,342.99 402,285,954.24 366,956,549.89 2,920,563,328.27 554,495,287.40 8,843,515,588.79 current year III.Changed in the -75,869,719.44 190,337,154.19 97,664,126.79 212,131,561.54 current year 55 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount in this period Owner’s equity Attributable to the Parent Company Other Equity instrument Minor Items Commo Less: Other Speciali Total of owners’ n risk shareholders’ Share Capital prefer Capital reserves Shares Comprehensive zed Surplus reserves Attributable profit equity Sustai provisio equity red Other in stock Income reserve nable n stock debt (1)Total comprehensive -75,869,719.44 892,848,012.53 97,664,126.79 914,642,419.88 income (II)Investment or decreasing of capital by owners 1.Ordinary Share s invested by share holders 2 . Holders of oth er equity instrume nts invested capital 3.Amount of shares paid and accounted as owners’ equity 4.Other (III)Profit -702,510,858.34 -702,510,858.34 allotment 56 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount in this period Owner’s equity Attributable to the Parent Company Other Equity instrument Minor Items Commo Less: Other Speciali Total of owners’ n risk shareholders’ Share Capital prefer Capital reserves Shares Comprehensive zed Surplus reserves Attributable profit equity Sustai provisio equity red Other in stock Income reserve nable n stock debt 1.Providing of surplus reserves 2.Providing of common risk provisions 3.Allotment to the owners (or -702,510,858.34 -702,510,858.34 shareholders) 4.Other (IV) Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 57 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount in this period Owner’s equity Attributable to the Parent Company Other Equity instrument Minor Items Commo Less: Other Speciali Total of owners’ n risk shareholders’ Share Capital prefer Capital reserves Shares Comprehensive zed Surplus reserves Attributable profit equity Sustai provisio equity red Other in stock Income reserve nable n stock debt 3.Making up losses by surplus reserves. 4. Other (V). Special reserves 1. Provided this year 2.Used this term (VI)Other IV. Balance at the 2,090,806,126.00 2,508,408,342.99 326,416,234.80 366,956,549.89 3,110,900,482.46 652,159,414.19 9,055,647,150.33 end of this term 58 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount in last year In RMB Amount in last year Owner’s equity Attributable to the Parent Company Other Equity instrument Commo Minor Items Total of owners’ Less: Other Speciali n risk shareholders’ Share Capital Capital reserves Shares Comprehensive zed Surplus reserves Attributable profit equity prefer equity Sustai provisio red Other in stock Income reserve nable n stock debt I.Balance at the 1,257,117,748.00 1,643,484,871.70 479,920,085.76 295,642,270.96 2,179,239,324.01 1,261,282,480.94 7,116,686,781.37 end of last year Add: Change of accounting policy Correcting of previous errors Merger of entities under common control Other II.Balance at the beginning of 1,257,117,748.00 1,643,484,871.70 479,920,085.76 295,642,270.96 2,179,239,324.01 1,261,282,480.94 7,116,686,781.37 current year III.Changed in the 833,688,378.00 864,923,471.29 -77,634,131.52 71,314,278.93 741,324,004.26 -706,787,193.54 1,726,828,807.42 current year 59 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (1)Total comprehensive -77,634,131.52 1,001,205,945.39 171,151,762.05 1,094,723,575.92 income (II)Investment or decreasing of 833,688,378.00 1,824,865,776.82 2,658,554,154.82 capital by owners 1.Ordinary Share s invested by share 833,688,378.00 1,824,865,776.82 2,658,554,154.82 holders 2 . Holders of oth er equity instrume nts invested capital 3.Allotment to the owners (or shareholders) 4.Other (IV) Internal transferring of 71,314,278.93 -259,881,941.13 -10,266,231.67 -198,833,893.87 owners’ equity 1. Capitalizing of capital reserves (or 71,314,278.93 -71,314,278.93 to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up -188,567,662.20 -10,266,231.67 -198,833,893.87 60 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 losses by surplus reserves. 4. Other (VI )Special reserves 1. Provided this year 2.Used this term (VII)Other IV. Balance at the end of this term (V) Special reserves 1. Provided this year 2.Used this term -1,827,615,029.4 (VI)Other -959,942,305.53 -867,672,723.92 5 IV. Balance at the 2,090,806,126.00 2,508,408,342.99 402,285,954.24 366,956,549.89 2,920,563,328.27 554,495,287.40 8,843,515,588.79 end of this term Legal Representative:Zheng Renfa General Manager: Wang Chunhua Person in charge of accounting:Fang Zhi Accounting Dept Leader: Zhou Fang 8.Statement of change in owner’s Equity of the Parent Company Amount in this period 61 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount in this period Other Equity instrument Less: Other Items Specialize Total of owners’ Share Capital preferre Sustain Capital reserves Shares in Comprehensive Surplus reserves Attributable profit Other d reserve equity d stock able stock Income debt I.Balance at the 2,090,806,126.00 3,359,791,693.12 402,285,954.24 351,112,266.24 1,764,609,695.85 7,968,605,735.45 end of last year Add: Change of accounting policy Correcting of previous errors Other II.Balance at the beginning of 2,090,806,126.00 3,359,791,693.12 402,285,954.24 351,112,266.24 1,764,609,695.85 7,968,605,735.45 current year III.Changed in the -75,869,719.44 393,099,308.83 317,229,589.39 current year (I)Total comprehensive -75,869,719.44 1,095,610,167.17 1,019,740,447.73 income (II) Investment or decreasing of capital by owners 1.Ordinary Share 62 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount in this period Other Equity instrument Less: Other Items Specialize Total of owners’ Share Capital preferre Sustain Capital reserves Shares in Comprehensive Surplus reserves Attributable profit Other d reserve equity d stock able stock Income debt s invested by share holders 2 . Holders of oth er equity instrume nts invested capital 3.Amount of shares paid and accounted as owners’ equity 4.Other (III)Profit -702,510,858.34 -702,510,858.34 allotment 1.Providing of surplus reserves 2.Allotment to the owners (or -702,510,858.34 -702,510,858.34 shareholders) 3.Other (IV)Internal transferring of owners’ equity 63 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount in this period Other Equity instrument Less: Other Items Specialize Total of owners’ Share Capital preferre Sustain Capital reserves Shares in Comprehensive Surplus reserves Attributable profit Other d reserve equity d stock able stock Income debt 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4. Other (V) Special reserves 1. Provided this year 2.Used this term (VI)Other IV. Balance at the 2,090,806,126.00 3,359,791,693.12 326,416,234.80 351,112,266.24 2,157,709,004.68 8,285,835,324.84 end of this term 64 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount in last year In RMB Amount in last year Other Equity instrument Less: Other Items Specialize Total of owners’ Share Capital preferre Sustain Capital reserves Shares in Comprehensive Surplus reserves Attributable profit Other d reserve equity d stock able stock Income debt I.Balance at the 1,257,117,748.00 1,534,920,742.49 479,920,085.76 279,797,987.31 1,311,348,847.67 4,863,105,411.23 end of last year Add: Change of accounting policy Correcting of previous errors Other II.Balance at the beginning of 1,257,117,748.00 1,534,920,742.49 479,920,085.76 279,797,987.31 1,311,348,847.67 4,863,105,411.23 current year III.Changed in the 833,688,378.00 1,824,870,950.63 -77,634,131.52 71,314,278.93 453,260,848.18 3,105,500,324.22 current year (I)Total comprehensive -77,634,131.52 713,142,789.31 635,508,657.79 income 65 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount in last year Other Equity instrument Less: Other Items Specialize Total of owners’ Share Capital preferre Sustain Capital reserves Shares in Comprehensive Surplus reserves Attributable profit Other d reserve equity d stock able stock Income debt (II) Investment or decreasing of 833,688,378.00 1,824,865,776.82 2,658,554,154.82 capital by owners 1.Ordinary Share s invested by share 833,688,378.00 1,824,865,776.82 2,658,554,154.82 holders 2 . Holders of oth er equity instrume nts invested capital 3.Amount of shares paid and accounted as owners’ equity 4.Other (III)Profit 71,314,278.93 -259,881,941.13 -188,567,662.20 allotment 1.Providing of 71,314,278.93 -71,314,278.93 surplus reserves 2.Allotment to the owners (or -188,567,662.20 -188,567,662.20 shareholders) 66 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount in last year Other Equity instrument Less: Other Items Specialize Total of owners’ Share Capital preferre Sustain Capital reserves Shares in Comprehensive Surplus reserves Attributable profit Other d reserve equity d stock able stock Income debt 3.Other (IV)Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus reserves. 4. Other (V) Special reserves 1. Provided this year 2.Used this term 67 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount in last year Other Equity instrument Less: Other Items Specialize Total of owners’ Share Capital preferre Sustain Capital reserves Shares in Comprehensive Surplus reserves Attributable profit Other d reserve equity d stock able stock Income debt (VI)Other 5,173.81 5,173.81 IV. Balance at the 2,090,806,126.00 3,359,791,693.12 402,285,954.24 351,112,266.24 1,764,609,695.85 7,968,605,735.45 end of this term 68 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 III.Company Profile (1)History The Company was established in February 1993, which was originally named as Guangdong Fokai Expressway Co., Ltd. On June 30, 1993, it was renamed as Guangdong Provincial Expressway Development Co., Ltd. after reorganization pursuant to the approval of the Office of Joint Examination Group of Experimental Units of Share Holding System with YLSB (1993)No. 68 document. The share capital structure after reorganization is as follows: Composition of state-owned shares: The appraised net value of state-owned assets of Guangdong Jiujiang Bridge Co. and Guangfo Expressway Co., Ltd. as of January 31, 1993 confirmed by Guangdong State-owned Asset Management Dept., i.e.,RMB 418.2136 million, was converted into 155.025 million shares. Guangdong Expressway Co. invested cash of RMB 115 million to subscribe for 35.9375 million shares. Other legal persons invested cash of RMB 286.992 million to subscribe for 89.685 million shares. Staff of the Company invested RMB 87.008 million to subscribe for 27.19 million shares. The total is RMB 307.8375 million shares. 2. Pursuant to the approval of Guangdong Economic System Reform Committee and Guangdong Securities Regulatory Commission with YTG (1996) No. 67 document, part of the shareholders of non-state-owned legal person shares transferred 20 million non-state-owned legal person shares to Malaysia Yibao Engineering Co., Ltd. in June 1996. 3. Pursuant to the approval of Securities Commission under the State Council with WF (1996) No. 24 approval document and that of Guangdong Economic System Reform Committee with YTG (1996) No. 68 document, the Company issued 135 million domestically listed foreign investment shares (B shares) to overseas investors at the price of HKD 3.54 (equivalent to RMB 3.8) with the par value of each share being RMB 1 during June to July 1996. 4. Pursuant to the reply of the Ministry of Foreign Trade and Economic Cooperation of the People’ s Republic of China with (1996) WJMZYHZ No. 606 document, the Company was approved to be a foreign-invested joint stock company limited. 5.The Company distributed dividends and capitalized capital common reserve for the year 1996 in the following manner: The Company paid 1.7 bonus shares f or each 10 shares and capitalized capital common reserve on 3.3-for-10 basis. 6. Pursuant to the approval of China Securities Regulatory Committee (CSRC) with ZJFZ (1997) No. 486 and No. 487 document, the Company issued 100 million public shares (A shares) at the price of RMB 5.41 in term of “payable in full on application, pro-rate placing and subject to refund” with the par value of each share being RMB 1 in January 1998. 7.In accordance with the Resolutions of the 1999 Shareholders’ General Meeting of the Company and pursuant to the approval of Guangzhou Securities Regulatory Office under CSRC with GZZJH (2000) No. 99 and that of CSRC with ZJGSZ (2000) No. 98, the Company offered 3 Rights for every 10 shares of 764.256249 million shares at the price of RMB 11 per Right.73,822,250 ordinary shares were actually placed to all . 8. Pursuant to the reply of the General Office of the People’ s Government of Guangdong Province with YBH (2000) No. 574 document, the state-owned shares were transferred to Guangdong Communication Group Co., Ltd. (Group Co.) for holding and management without compensation. 9.Pursuant to the approval of Shenzhen Stock Exchange, 53.0205 million staff shares of the Company (132,722 shares held by directors, supervisors and senior executives are temporarily frozen) were listed on February 5, 2001.As of Ju 呢 30,2017, the quantity of the shares subject to sale restriction held by senior executives is 92,404. 10.In accordance with the resolutions of 2000 annual shareholders’ general meeting, the Company capitalized capital common reserve into 419,039,249 shares on 5-for-10 basis with the total share capital as of the end of 2000, i.e., 838,078,499 shares as base. The date of stock right registration was May 21, 2001. The ex-right date was May 69 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 22, 2001. 11 . On March 8, 2004,As approved by China Securities Regulatory Commission by document Zheng-Jian-Gong-Si-Zi [2003]No.3, the 45,000,000 non-negotiable foreign shares were placed in Shenzhen Stock 12. On December 21, 2005, the Company's plan for share holding structure reform was voted through at the shareholders' meeting concerning A shares. On January 26 2006, The Ministry of Commerce of PRC issued “The approval on share converting of Guangdong Provincial Expressway Development Co., Ltd.” to approve the share equity relocation and transformation. On October 9 2006, according to the “Circular about implementing of share equity relocation and relative trading” issued by Shenzhen Stock Exchange, the abbreviation ID of the Company’s A shares was restored from “G-Expressway” “Expressway A”. 13. Upon the approval document of CSRC No.230-2016 Zheng Jian Xu ke-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 Development Co., Ltd, in June 2016 the company issued 33,355,263 shares and paid RMB 803.50 million to Guangdong Provincial Expressway Co., Ltd for purchasing the 25% stake of Guangdong Provincial Fokai Expressway Co., Ltd held by Guangdong Provincial Expressway Co., Ltd; and issued 466,325,020 shares to Guangdong Provincial Highway Construction Co., Ltd for purchasing the 100% stake of Guangzhou Guangzhu Traffic Investment Management Co., Ltd held by Guangdong Provincial Highway Construction Co., Ltd. On June 21, 2016, the company directionally issued 334,008,095 A-shares to Yadong Fuxing Yalian Investment Co.,Ltd, Tibet Yinyue Investment Management Co.,Ltd and GF Securities Co.,Ltd. The issuance of shares have been registered on July 7, 2016, the new shares will be listed on July 8, 2016. (2)Organization structure and the actual controller of the Company As of June 30, 2017,Registration capital:RMB2,090,806,126,Legal representative:Zheng Renfa,Registration place:No.85, Baiyun Road, Guangzhou, Headquarters Office: 45-46/F, Litong Plaza, No.32, Zhujiang East Road, Zhujiang New City, Tihe Disrtict , Guangzhou,The company has set up: Investment Development Dept, Security Affairs Department, Management Department, Financial Management Department, Base construction Department, Audit and Supervise Department, Affairs Department, Personnel Department , Party Work Department, Law affairs Department , Project Office and Labour union etc. Guangdong Communication Group Co., Ltd. is the largest shareholder of the Company. legal representative: Deng Xiaohua. Date of establishment: June 23, 2000. As of June 30, 2017,Registered capital: RMB 26.8 billion. It is a solely state-owned limited company. Business scope:equity management, organization of asset reorganization and optimized allocation, raising funds by means including mortgage, transfer of property rights and joint stock system transformation, project investment, operation and management, traffic infrastructure construction, highway and railway project operation and relevant industries, technological development, application, consultation and services, highway and railway passenger and cargo transport, ship industry, relevant overseas businesses; The value-added communication business. (3)The company’s main business and share ,Holding company The company operated the construction of the highway construction, grading roads, bridges;Management fees and maintenance of roads, bridges, and car rescue, maintenance, cleaning, concurrently with the company's business s upporting motor transport, warehousing operations. The Company is mainly engaged in tolling and maintenance of Guangfo Expressway, Fokai Expressway, investm ent in technological industries and provision of relevant consultation while investing in Shenzhen Huiyan Express way Co., Ltd., Guangzhou Guanghui Expressway Co., Ltd.,Jingzhu Expressway Guangzhu Co., Ltd.,Guangdong J iangzhong Expressway Co., Ltd., Zhaoqing Yuezhao Expressway Co., Ltd.,Ganzhou Kangda Expressway , Ganzh ou Gankang Expressway Co., Ltd.,Guangdong Yueke Technology Micro Loan Co., Ltd.and Guangdong Guangle 70 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Expressway Co.,Ltd. (4)Scope of consolidated financial statements The company's 2017(Jan-June) annual consolidated subsidiaries of total 5 companies, The scope of consolidated financial statements is consistent with the previous period. Refer to Notes VI, Notes of financial statements ,Change of consolidation scope and Notes IX, Notes of financial statements, Equity in other entities for more details. (5)Approval of the financial statements reported The financial statements have been authorized for issuance by the Board of Directors of the Group on August 28,2017. IV. Basis for the preparation of financial statements 1.Preparation basis The company prepares the financial statements on the basis of a continuous operation, the actual transactions, “Accounting Standards for Enterprises – Basic Standards”, other accounting standards & related regulations. Furthermore, all the materials of financial statements of the company meet the relevant disclosure requirements of financial statements and notes on the “Editing and Reporting Rules Regarding Information Disclosure for Companies Publicly Issuing Securities No. 15 – General Regulations for Financial Reporting (revised in 2014) by China Securities Regulatory Commission. 2.Continuation There will be no such events or situations in the 12 months from the end of the reporting period that will cause material doubts as to the continuation capability of the Company. V. Significant Accounting Policies and Accounting Estimates Specific accounting policies and accounting estimates are indicated as follows: Nil 1. Statement of Compliance with the Accounting Standards for Business Enterprises The financial statements prepared by the Company comply with the requirements of corporate accounting standards. They truly and completely reflect the financial situations, operating results, equity changes and cash flow, and other relevant information of the company. 2.Fiscal Year The Company adopts the Gregorian calendar year commencing on January 1 and ending on December 31 as the fiscal year. 3.Operating cycle An operating cycle for the Company is 12 months, which is also the classification criteria for the liquidity of its 71 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 assets and liabilities. 4.Standard currency for bookkeeping The Company takes RMB as the standard currency for bookkeeping. 5.Accountings for Business Combinations under the Same Control & Business Combinations not under the Same Control 1.Business Combinations under the Same Control The assets and liabilities acquired by the company in the business combination shall be measured as per the obtained book value of owner’s equity of the combined party in the consolidated financial statements. As for the balance between the carrying amount of the net assets obtained by the combining party & the carrying amount of the consideration paid by it (or the total par value of the shares issued), the additional paid-in capital shall be adjusted. If the additional paid-in capital is not sufficient to be offset, the retained earnings shall be adjusted. The direct costs for the business combination of the company, including the expenses for audit, assessment and legal services, shall be recorded into the profits & losses at the current period. The handling fees, commissions & other expenses for the issuance of equity securities for the business combination shall be credited against the surplus of equity securities; if the surplus is not sufficient, the retained earnings shall be offset. Where the accounting policies adopted by the combined parties are different from those adopted by the company, the company shall adjust them on the combining date according to the accounting policy it adopts, and shall, pursuant to the Accounting Standards for Enterprises, recognize them on the basis of such adjustments. 2. Business Combinations not under the Same Control The assets paid as the consideration for the business combination & the liabilities assumed on the acquisition date shall be measured in accordance with the fair value. The difference between the fair value & its carrying amount shall be recorded into the profits & losses at the current period. The company will distribute the combination costs on the acquisition date. The company shall recognize the positive balance between the combination costs & the fair value of the identifiable net assets it obtains from the acquire as Goodwill while it shall record the negative balance between the combination costs & the fair value of the identifiable net assets it obtains from the acquire into the profits & losses of the current period. As for the assets other than intangible assets acquired from the acquire in a business combination (not limited to the assets which have been recognized by the acquire), if the economic benefits brought by them are likely to flow into the enterprise and their fair values can be measured reliably, they shall be separately recognized and measured in light of their fair values. As for any intangible asset acquired in a combination, if its fair value can be measured reliably, it shall be separately recognized as an intangible asset and shall measured in light of its fair value. As for the liabilities other than contingent liabilities acquired from the acquire, if the performances of the relevant obligations are likely to result in any out-flow of economic benefits from the enterprise, and their fair values can be measured reliably, they shall be separately recognized and measured in light of their fair values. As for the contingent liabilities of the acquire obtained in a combination, if their fair values can be measured reliably, they 72 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 shall be separately recognized as liabilities and shall be measured in light of their fair values. 6.Methods for Preparing the Consolidated Financial Statements The scope of the consolidated financial statements will be recognized on the basis of controlling. All the subsidiaries will be included into the consolidated financial statements. The accounting policies & accounting periods adopted by all the subsidiaries that have been included into the scope of the consolidated financial statements should be consistent with those adopted by the company. If the accounting policies & accounting periods adopted by the subsidiaries are different from those adopted by the company, the company shall make necessary adjustments according to the accounting policies & accounting periods it adopts when preparing the consolidated financial statements. After adjusting the long-term equity investments on its subsidiaries according to the equity method, the company shall prepare the consolidated financial statements based on the financial statements of the company & its subsidiaries, and other related documents. The influences of the internal transactions between the company & its subsidiaries, and its subsidiaries themselves on the consolidated balance sheet, consolidated profit statement, consolidated cash flow statement & consolidated statement of changes in owner’s equity will be counteracted at the preparation of the consolidated financial statements. The portion of a subsidiary’s equity that is not attributable to the parent is treated as minority shareholders’ interest and presented as “minority interest” in the consolidated balance sheet within owners’ equity. The portion of net profits or losses of subsidiaries for the period attributable to minority interest is presented in the consolidated income statement below the “net profit” line item as “minority interest”. In the consolidated financial statements, when the amount of loss for the period attributable to the minority shareholders of a subsidiary exceeds the minority shareholders’ portion of the opening balance of owners’ equity of the subsidiary, the excess amount should be still allocated against minority interest. In the report period, If the subsidiary is added through the business combination under the same control, the beginning balance of the consolidated balance sheet shall be adjusted. The incomes, expenses & profits of the subsidiary incurred from the beginning of the current period to the end of the reporting period shall be included into the consolidated profit statement. The cash flow from the beginning of the current period to the end of the reporting period shall be included into the consolidated cash flow statement. For purchase of minority interests held by the minority shareholders of a subsidiary, when preparing the consolidated financial statements, the difference between the long-term equity investment newly gained by buying minority interests and the portion of net assets consistently calculated from the acquisition date (or the consolidation date) pursuant to newly added shareholding percentage entitled by the subsidiary should be adjusted to the owners’ equity (the capital reserve). If the capital reserve is not sufficient to absorb the difference, any excess is adjusted against retained earnings. In the report period, If the company disposes its subsidiary, the incomes, expenses & profits incurred from the beginning of the subsidiary to the disposal date shall be included into the consolidated profit statement. The cash flow from the beginning of the subsidiary to the disposal date shall be included into the consolidated cash flow 73 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 statement. 7.Joint venture arrangements classification and Co-operation accounting treatment ⑴A joint arrangement refers to an arrangement jointly controlled by two participants or above.,the joint venture arrangements include co-operation and joint ventures. (2)When the joint venture company for joint operations, confirm the following items and share common business interests related to: (1)Confirm individual assets and common assets held based on shareholdings; (2)Confirm individual liabilities and shared liabilities held based on shareholdings; (3)Confirm the income from the sales revenue of co-operate business output (4)Confirm the income from the sales of the co-operate business output based on shareholdings; (5)Confirm the individual expenditure and co-operate business cost based on shareholdings. ⑶When a company is a joint ventures, joint venture investment will be recognized as long-term equity investment s and long-term equity investments are accounted for in accordance with the method of the Notes to Financial Stat ements. 8.Recognition Standard of Cash & Cash Equivalents The company recognizes its cash in vault & the deposits that are ready for payment at any time as cash when preparing the cash flow statement.which are featured with short term (expire within 3 months since purchased), high liquidity, easy to convert to know cash, low in risk of value change, could be recognized as cash equivalents. Equity investment are not recognized as cash equivalents. 9.Foreign Currency Transaction (1)Foreign Currency Transaction For the company with non-functional currency business, the middle rate of the market exchange rate published by People’s Bank of China on the date of occurrence of business are recorded as the functional currency, and the balances of foreign currency shall be adjusted by the end of the month according to the middle rate of the market exchange rate published by People’s Bank of China at the end of period. The differences between the recording currency amount converted by the exchange rate at the end of period and the carrying currency amount are as “Finance Costs – Exchange Gains and Losses” and recorded into the current profits or losses. The exchange gains and losses related to borrowings on the fixed assets shall be made treatment according to the principles of borrowing costs capitalization. (2)Conversion of Foreign Financial statement If overseas subsidiaries, cooperative enterprises, joint ventures, branches of the company adopt the different functional recording currency and record the overseas business of the company into the financial statements through the consolidated statements and the accounting by the equity method, the overseas financial statements shall be translated as the recording functional currency. Before the translation, the company shall adjust the accounting period and policy of overseas business in order to make the consistent adjustment, and translate the 74 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 overseas financial statements according to the financial statements of the preparation of corresponding currency after the accounting policy and period adjusted and as per the following methods: ① For the assets and liabilities in the balance sheet, the shot exchange rate on the balance sheet date is adopted as the translation exchange rate. For the owner’s equity, the shot exchange rate on the transaction date is adopted as the translation exchange rate, with the exception of “undistributed profits”. ② The incomes and expenses in the income statement shall be translated at the spot exchange rate or the approximate exchange rate on the transaction date. ③ The translation gap of financial statement of foreign currency shall be listed under the owner’s equity in the consolidated balance sheet in the preparation of the consolidated financial statements. 10.Financial tools 1. Categories of financial Tools The Company divides the financial assets into four categories: financial assets measured at fair value and their variations are recognized as current gain/loss, including trade financial assets or financial liabilities and recognized directly as financial assets measured at fair value and their variations are recognized as current gain/loss; Investment hold till expiration; loans and account receivable; saleable financial assets .The company divides the financial liabilities into two categories: financial liabilities measured at fair value and their variations are recognized as current gain/loss; other financial liabilities. 2. Recognition and measurement of financial tools (1) Financial assets and liabilities measured at fair value and their variations are recognized as current gain/loss The fair value (after deducting of announced but not distributed cash dividend or due but not obtained bond interests) is recognized as initial amount when obtained. Interests or cash dividends during the period of holding are recognized as investment gains. The fair value will be adjusted and accounted as current gain/loss. When disposed, the differences between fair value and initial amount are recognized as investment gains, and thus adjust the gain/loss of fair value. (2) Investment hold till expiration The fair value (after deducting of due but not obtained bond interests) plus the related trade expenses is recognized as initial amount when obtained. Interest gains will be calculated at amortizing of costs and actual interest rate (the face rate is adopted when the difference between the actual rate and face rate is minor) during the period of holding, and accounted as investment gains. Actual rate is recognized when obtained, and is not changed in the predictable holding period or applicable shorter period. When disposed, the difference between the obtained price and book value is accounted as investment gains. If the company sells or reclassifies large-amount due investments before the expired date (large amount refers to comparing with the amount before the selling or reclassifying the investments), the company will reclassify the rest of the investments as financial assets for sale, and in the current accounting period or within two complete accounting years, no financial assets will be classified as holding due assets, except for the following situations: 75 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 the sale date or reclassification date is close to the expired date of the investment (such as three months before the expired), and the change of interest rate has no significant influence on the fair value of the investment; after all the initial principal is mostly recovered according to periodic payments or repay in advance regulated in the contract, the rest part will be sold or reclassified; the sale and reclassification is caused by the independent events which are uncontrollable and unexpected and will not happen any more. (3) Account receivable The receivable debts of selling goods or providing services, and the credits of other company hold by the company not including the debt which has price in active market, including accounts receivable, notes receivable, prepaid accounts, other receivables, long-term receivables, etc. The contract or agreement price charging from purchaser should be taken as the initial confirmation amount; if it has the nature of financing, it should be confirmed according its current value. When retrieved or disposed of, the difference between the actual received amount and the book value is accounted as current gain/loss. (4) Saleable financial assets The fair value (after deducting of announced but not distributed cash dividend or due but not obtained bond interests) plus the related trade expenses is recognized as initial amount when obtained. Interest or cash dividend occurred during the period of holding is recognized as investment gains. Change of fair value is accounted as capital reserves (other capital reserves) at the end of term. When disposed, the difference between the obtained price and book value is accounted as investment gains. Meanwhile, the corresponding part of accumulated change of fair value accounted as owners’ equity is transferred into investment gain/loss. (5) Other financial liabilities Other financial liabilities are recognized initially at the sum of fair value and related trade expenses. Successive measurement will be on the basis of amortized costs. 3. Recognition and measurement basis of financial asset transposition When financial asset transposition occurred, the recognition of this particular financial asset is terminated if almost all risks and rewards attached to the asset have been transferred to the acceptor. If retain all the risks and rewards of ownership of financial assets, the financial assets can be confirmed. When determine whether the transfer of financial assets meet the conditions of confirmation of the above financial assets, the principle of substance being more important than form should be adopted. The transfer of financial assets can be divided into overall transfer and part transfer of financial assets. If the transfer of financial assets meet the conditions of terminating confirmation, the following the difference of the two amounts will be included in the current profit and loss: (1) Book value of the financial asset to be transposed; (2) The sum of price received due to the transposition, and the accumulation of change in fair value originally accounted as owners’ equity (when the asset to be transposed is saleable financial asset). If part transfer of financial assets meet the conditions of terminating confirmation, the book value of the transferred financial assts, the difference between the confirmed part and the unconfirmed part (in this case, the 76 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 service assets retained should be deemed as the part of unconfirmed financial assets), should be amortized in accordance with their relative fair value, and the difference between the following two amount should be included current profit and loss: ① Book value of the confirmed part; ②All fair values of financial assets and financial liabilities are recognized with reference to the price in the active market. If the transfer of financial assets does not meet the conditions of terminating confirmation, the financial assets should be confirmed again, the prices received will recognized as financial liabilities. 4.The conditions to stopping the financial liabilities The obligation of financial liabilities are already cancelled which should be stopped confirming the financial liability or the part of it. Our company could stop confirming the currently financial liability and begin to confirm the newly financial liability if the loaner made an agreement that they would assume the new way of financial liability which replace the current one, and make sure the newly financial liability is totally different from the old one in contract with our company. Stop admitting the financial liability or a part of it, and at mean time we could admit the newly financial liability which is in new insertions of contract as the newly financial liability if the current financial liability has been revised. Stop admitting the balance of value of financial liability and consideration (Including the roll-out of non-cash assets or financial liabilities) which could be consider as current profits and losses. Stop and continue admitting a part of value, and distribute the value of financial liability, if our company repurchased the part of financial liability. And the balance of value of which distributed to the part of stopping admitting and paid (Including the roll-out of non-cash assets or financial liabilities) which could be consider as current profits and losses. 5.Recognition basis of financial assets and financial liabilities All fair values of financial assets and financial liabilities are recognized with reference to the price in the active market(Using valuation technique, etc). 6. Impairment provision for financial assets ①Impairment provision for financial assets for sale: If the fair value of financial assets for sale greatly drops at the end of the period, or after considering all the relevant factors and expecting decrease trend is non-temporary, the impairment should be confirmed, and the accumulative loss formed by the decrease of fair value of owner’s equity originally included should be transferred out altogether and confirmed as impairment loss. ②Holding the impairment provision of expired investments: The measurement of holding the impairment provision of expired investment will be according to the method of the measurement of impairment provision for receivables. 11.Accounts Receivable (1)Accounts receivable with material specific amount and specific provisioned bad debt preparation. Judgment criteria or amount standard of material specific amount The accounts receivable whose single amount is over RMB 1 77 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 or amount criterial: million & accounts for over 10% of the accounts receivable amount. Conduct the devalue test separately. Set up the bad debt reserve Provision method with material specific amount and provision of according to the shortfall of the present value of expected future specific bad debt preparation: cash flows against its carrying amount and record it into the profits & losses at the current period. (2)The accounts receivable of bad debt provisions made by credit risk Group Name Method for recognition of impairment allowances The adopting aging analysis method In the Groups, adopting aging analysis method to withdraw bad debt provision √ Applicable □ Not applicable Aging Rate for receivables(%) Rate for other receivables(%) Within 1 year(Included 1 year) 0.00% 0.00% 1-2 years 10.00% 10.00% 2-3 years 30.00% 30.00% 3-4 years 50.00% 50.00% 4-5 years 90.00% 90.00% Over 5 years 100.00% 100.00% Accounts on percentage basis in group: □ applicable √not applicable Accounts on other basis in group: □ applicable √not applicable (3)Account receivable with non-material specific amount but specific bad debt preparation The accounts receivable under 5 years of age which are not Reason of individually withdrawing bad debt provision significant without any business connections any more. Conduct the devalue test separately. Set up the bad debt reserve according to the shortfall of the present value of expected Witharawal method for boad debt provision future cash flows against its carrying amount and record it into the profits & losses at the current period. 12.Inventory Whether the Company needs to comply with the disclosure requirements for specific industrie No 1.Investories class: The company’s stocks can be classified as: raw materials, inventory goods, low-value consumables & other materials, etc. 78 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 2. Valuation method of inventory issued :The company calculates the prices of its inventories according to the weighted averages method or the first-in first-out method. 3. Recognition Basis of Inventories’ Net Realizable Values and Counting & Drawing Method of Obsolete Inventory Reserves:After taking stock at the end of the period, 4. Inventory System:Adopts the Perpetual Inventory System 13. Divided as assets held for sale In the presence of the following conditions are satisfied when non-current assets or a part of the company is classi fied as held for sale: (1) The components should be immediately sold under the current condition only according to the usual terms of the parts sold. (2) The enterprise has made resolution for the disposal of the components, the approval of shareholders’ meeting or relevant authority agency if the shareholder’s approval is requested by the rules. (3) The enterprise has signed the irrevocable transfer agreement with the transferee. (4) The transfer shall be completed within one year. For the non-current assets held for sale (excluding the financial assets and the deferred income tax assets), the less amount after the book value and fair value respectively minus the disposal costs shall be presented as Divided as assets held for sale assets. If the amount of the fair value minus the disposal costs is less than that of the original book value, the assets impairment loss shall be recognized. 14. Long-term equity investment (1) The Classification of Long-term Equity Investments The long-term equity investments of the company should include the investments in the subsidiaries and the investments in cooperative enterprises and joint ventures. (2) The Recognition of Investment Cost ① For the business combination under common control and the combining party paying in cash, transferring non-monetary assets, bearing debts or issuing the equity securities as the consideration, the initial investment cost shall be recognized according to the shares of the book value in the consolidated financial statement of the ultimate controlling party that acquired by the combined party on the combination date. The capital reserves shall be adjusted for the difference between the initial investment cost of long-term equity investment and the book value of the paid cash, the transferred non-monetary assets and the borne debts. The retained earnings shall be adjusted if the capital reserves are insufficient to offset. For the long-term equity investment after the business combination under common control realized step-by-step through multiple transactions, the shares of the book value of the owner’s equity of the combined party shall be as the initial investment cost in the individual financial statements and the consolidated financial statements as per the shareholding proportion. The capital reserves shall be adjusted for the balance between the sums of the book value of the equity investment of the combined party held on the combination date and the new investment cost increased on the combination date minus the initial investment cost of long-term equity investment. The retained earnings shall be adjusted if the capital reserves are insufficient to offset. ②For the business combination under non-common control, the initial investment cost shall be recognized 79 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 according to the fair value of the merger consideration paid on the purchase date. For the long-term equity investment after the business combination under non-common control realized step-by-step through multiple transactions, the relevant accounting treatment should be respectively conducted for the individual financial statement and the consolidated financial statements: 1) In the individual financial statements, the sum of the book value of equity investment from the purchased party held before the purchase date and the new investment cost at the purchase date shall be as the initial investment cost of the investment. Other comprehensive incomes related to the equity of the purchased party held before the purchase date shall be transferred into the current investment incomes in the disposal of the investment. 2) In the consolidated financial statements, the equity of the purchased party held before the purchase date should be measured again according to the fair value of the equity on the purchase date, and the gap of the fair value and the book value should be recorded into the current investment incomes. Other comprehensive incomes related to the equity of the purchased party held before the purchase date shall be transferred into the current investment incomes on the purchase date. ③With the exception of the business combination: The long-term equity investment acquired by the payment in cash should be as the investment cost as per the actual purchase payment. The investment costs include fees, taxes and other necessary expenses directly related to the achieved long-term equity investment. The long-term equity investment acquired by the issuance of equity securities should be as the investment cost as per the fair value of the issued equity securities. The long-term equity investment acquired by the non-monetary assets exchange (the exchange with the commercial substance) should be as the investment cost as per the fair value of the investment and the payable taxes. For the long-term equity investment acquired by the debt reorganization, the creditors shall recognize the fair value of the enjoyed shares as the investment of the debtors. (3) Subsequent Measurement and Recognition Method of Profit and Loss The cost method shall be adopted to account the long-term equity investment controlled by the invested party and the equity method shall be adopted to account the long-term equity investment with joint control or significant influence. (4) Recognition Criteria for the Invested Party with Joint Control or Significant Influence The joint control on the economic activity appointed as per the contract shall exist when the major finance and the operating decision related to the economic activity are agreed by the invested party sharing the control right, which shall be regarded as the joint control on the invested party implemented by other parties. The decision power to participate in the finance and operating decision on the enterprise, but without control or joint control with other parties to formulate these policies, shall be regarded as the significant influence on the invested party implemented by the investment enterprise. (5) Impairment Test Method and Withdrawing Method For the impairment test method and the withdrawing method of the long-term equity investment, please refer to “Long-term Assets Impairment in Article 11 of Important Accounting Policies and Accounting Estimates in Notes 5 of Financial Statements”. 15. Entrusted Loans The entrusted loans shall be made bookkeeping according to the actually entrusted loan amount. The receivable interests shall be withdrawn according to the interest rate stated in the entrusted loans. For the impairment test method and the impairment provision withdrawing method of the entrusted loans, please refer to “Long-term Assets Impairment of Important Accounting Policies and Accounting Estimates in Notes 5 of 80 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Financial Statements”. 16..Investment Real Estates The measurement mode of investment property The measurement by the cost method Depreciation or amortization method The term “Investment real estates” refers to the real estates held for generating rentand/orcapital appreciation, including the right to use any land which has already been rented, the right to use any land which is held and prepared for transfer after appreciation & the right to use any building which has already been rented. The company shall make a measurement to the investment real estate through the cost pattern.The company shall adopt the same depreciation policy as its fixed assets for the investment real estates measured by the cost pattern-buildings for renting & the same amortization policy as its intangible assets for the right to use any land for renting. For the impairment test method and the impairment provision withdrawing method of the .Investment Real Estates, please refer to “Long-term Assets Impairment of Important Accounting Policies and Accounting Estimates in Notes 5 of Financial Statements”. 17.Fixed assets (1)Confirmation conditions of fixed assets Fixed assets refer to physical assets owned for purpose of production, service providing, leasing or management, and operation with service life of more than one year. Fixed assets are recognized when all of the following conditions are satisfied:Financial benefits attached to the fixed asset is possibly inflowing to the Company;(2) The cost of the fixed asset can be reliable measured. (2)Depreciation method Evpected useful Annual depreciation Type Depreciation methnod Residual rate(%) life(Year) rate(%) Guangfo Expressway Working flow basis 28 years 0% Working flow basis Fokai Expressway-Xiebian to Working flow basis 40 years 0% Working flow basis Sanbao Section Fokai Expressway-Sanbao to Working flow basis 30 years 0% Working flow basis Shuikou Section Jingzhu Expressway Guangzhu Working flow basis 30 years 0% Working flow basis Section House Building The straight-line 20-30 years 3%-10% 3%-4.85% 81 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 method Machine Equipment The straight-line 10 years 3%-10% 9%-9.7% method Transportation Equipment The straight-line 5-8 years 3%-10% 11.25%-19.4% method Electric Equipment and other The straight-line 5-15 years 3%-10% 6 %-19.4% method Provision for depreciation of highways and bridges is made with work amount method. Estimatednet residual value rate is zero. Estimated useful life is determined according to the period of peration right in respect of charge collection. The concrete calculation method is as follows: The amount of provision for depreciation per standard vehicle traffic volume is to be calculated based on the estimated total standard vehicle traffic volume within expected useful life of highways and bridges and the original value or book value of highways and Bridges. Then provision for depreciation is made according to the actual standard vehicle traffic volume in each fiscal period. The company regularly rechecks the estimate total standard vehicle traffc volume withintheremaining operation period of highways and bridges. When there is big difference between actual standard vehicle traffic volume and estimated standard vehicle traffic volume, the Company will re-estimate future total standard vehicle traffic volume and adjust the provision for depreciation per standard vehicle traffic volume to ensure that the book value of relevant highways and bridges will be completely amortized within useful life. The company adopts the straight line method for the depreciation of fixed assets excepthighways & bridges, and recognizes the depreciation rate according to the fixed asset group, expected useful life & the expected net salvage value rate. (3) Test Method for Fixed Asset Impairment and Counting & Drawing Method for Fixed Asset Impairment Reserves For the impairment test method and the impairment provision withdrawing method of the Fixed assets, please refer to “Long-term Assets Impairment in Article 11 of Important Accounting Policies and Accounting Estimates in Notes 5 of Financial Statements”. 18.Construction-in process 1. Calculation of Construction-in-process:The constructions in process are classified & accounted according to the established projects. 2. Standard & Time Point for Carrying Constructions in Process Forward to Fixed Assets All the expenditures that bring the construction in process to the expected condition for use shall be the credit value of the fixed asset. If the fixed asset construction in process has already reached the expected condition for use, but hasn’t been made the final account; it shall be carried forward to a fixed asset according to its estimated value based on the budget, cost or actual cost of the construction starting from the date when it reaches the expected condition for use, and the fixed asset shall be depreciated according to the company’s depreciation policy for fixed assets. After the final account has been made, the original provisional estimated value shall be adjusted according to the actual cost, but the depreciation which has originally been counted & drawn shall not be adjusted. 82 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 3.Test Method for Construction-in-Process Impairment and Counting & Drawing Method For the impairment test method and the impairment provision withdrawing method of the Construction-in process , please refer to “Long-term Assets Impairment in Article 11 of Important Accounting Policies and Accounting Estimates in Notes 5 of Financial Statements”. 19.Loan expenses 1. Recognition principles for capitalizing of loan expenses Borrowing expenses occurred to the Company that can be accounted as purchasing or production of asset satisfying the conditions of capitalizing, are capitalized and accounted as cost of related asset. Other borrowing expenses are recognized as expenses according to the occurred amount, and accounted into gain/loss of current term. The assets meeting capital conditions refer to the fixed assets, investment real estates and inventories which are constructed or produced in a long time to reach the predicted use or sale state. When a loan expense satisfies all of the following conditions, it is capitalized: 1. Expenditures on assets have taken place, asset expenditures include the assets used to construct or produce the assets which meet the capitalization conditions, and expend by cash or transferring non-cash assets or bearing interest debt; 2. Loan costs have taken place; 3. The construction or production activities to make assets to reach the intended use or sale of state have begun. 2. Duration of capitalization of Loan costs The capitalization period refers to the period from starting capitalization of loan costs to the stop of capitalization, the period of the break of capitalization of Loan costs is not included. When the construction or production meets the intended use or sale of state of capitalization conditions, the Loan costs should stop capitalization. When the construction or production meets the conditions of capitalization and can be used individually, the capitalization of the loan costs of the assets should be stopped. Where each part of a asset under acquisition and construction or production is completed separately and is ready for use or sale during the continuing construction of other parts, but it can not be used or sold until the asset is entirely completed, the capitalization of the borrowing costs shall be ceased when the asset is completed entirely. 3.Capitalization Suspension Period Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended. If the interruption is a necessary step for making the qualified asset under acquisition and construction or production ready for the intended use or sale, the capitalization of the borrowing costs shall continue. The borrowing costs incurred during such period shall be recorded into the profits & losses at the current period, till the acquisition and construction or production of the asset restarts. 4. Calculation of the amount of capitalization of Loan costs Interest expense due to specialized Loan and its auxiliary expenses shall be capitalized before the asset which satisfies the capitalizing conditions reaches its useable or saleable status. Interest amount of common Loan to be capitalized equals to accumulated asset expense less weighted average of specialized loan part of asset expense multiplies capitalizing rate of common Loan occupied. Capitalizing rate is determined according to weighted average interest of common Loan. If the Loan has discount or premium, the discount or premium amount should be determined according to actual interests in each accounting period. The interest amount should be adjusted in each period. 83 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 20.Intangible assets (1) Pricing method, useful life and impairment test 1. The valuation methods of intangible assets (1)The initial measurement is conducted according to the actual cost when the intangible assets are acquired The cost of the purchased intangible assets includes its buying price, relevant tax and the othe expenses that are directly attributed to this assets meeting its predetermined objective and other expenses that occur. The buying price of intangible assets is over the deferred payment under normal credit conditions, which has the nature of financing materially, the cost of intangible assets is determined on the basis of the present value of its buying price. We acquire the mortgaged intangible assets from debtors through debt restructuring and determine the entry value on the basis of the fair value of the intangible assets,we have the balance between the book value of debt restructuring and the fair value of intangible assets used for mortgage charged to the current profit and loss. The entry value of the non-monetary assets exchanged into by the non-monetary assets are determined on the basis of the fair value of the assets exchanged out if the exchange of non-monetary assets has commercial nature and the assets exchanged into or out can be reliably measured, unless there is authentic evidence indicating that the fair value of assets exchanged into are more reliable; if the non-monetary assets that cannot meet the above prerequisite use the book value of the assets exchanged out and relevant taxes payable as the cost of the non-monetary assets, the profit and loss is not confirmed. The entry value of the intangible assets acquired by the absorption merger under the control of one company is determined by the book value of the merged party;the entry value of the intangible assets acquired by the absorption merger that is not under the control of one company is determined by the fair value. The cost of the intangible assets developed internally includes the materials consumed in developing the assets, cost of service, registration fees, other patent used in developing, amortization of concession and interest charges meeting the capitalization conditions and othe direct costs that occur before the intangible assets meeting the predetermined objective. (2)Subsequent measurement The Company analyses and makes judgment of its serviceable life when acquiring the intangible assets. The intangible assets that have limited serviceable life are amortized by the straight-line method during the period when the assets can bring about economic interests;The intangible assets are deemed as uncertain serviceable life and are not amortized if it is impossible to expect the period when the assets could bring about economic interests. At the end of period, the Group shall check the service life and amortization method of intangible assets with finite service life, if there is any change, it shall be regarded as a change of the accounting estimates. Besides, the Group shall check the service life of intangible assets without certain service life, if there is any evidence showing that the period of intangible assets to bring the economic benefits to the enterprise can be prospected, it shall be estimated the service life and amortized in accordance with the amortization policies for intangible assets with finite service life. (2)Internal research and development expenditure accounting policy For the internal self developed intangible assets, the costs include: the consumption of materials used in the development of the intangible assets, labor costs, registration fees, the amortization of other patents and concessions used in the development process and the interest expenses for meeting the capitalization conditions, and other direct costs incurred before the intangible asset reaches its intended purpose. 84 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (3) Provision for the depreciation of value of the intangible assets For the impairment test method and the impairment provision withdrawing method of the Intangible assets, please refer to “Long-term Assets Impairment of Important Accounting Policies and Accounting Estimates in Notes 5 of Financial Statements”. 21.Impairment of Long-term assets (1) Scope The assets Impairment main includes long-term equity investment, investment property (the investment property measured by the fair value excluded), fixed assets, projects under construction, engineering material, intangible assets (the capitalized development expenditure included), asset group, combination of asset group, business reputation, etc.. (2) Recognition of Possible Impairment Assets The company makes judgment of the assets if there exists the possible impairment at the balance sheet date. The intangible assets with indefinite goodwill and service life due to the combination of enterprise, shall be conducted the impairment test every year regardless of the impairment. The impairment may occurs for the assets if there is the following status: ① The market price of assets fall sharply in the current period, and the decline is obviously beyond that estimated due to the passage of time or normal use. ② The significant changes in the economy, technology or legal environment operated by the company and the assets market in the current or the near future adversely affect the company. ③ The improvement of the market interest rates or other market investment returns in the current period, influence the company to calculate assets estimating the discount rate of the present value of future cash flow and result in the sharp drop of the recoverable amount of the assets. ④ There is evidence that shows the assets have become obsolete or the entities have been damaged. ⑤ The assets have been or will be idle, terminated the use or planned to dispose in advance. ⑥ The evidence in the internal report of the company shows that the economic performance of assets has been less than or lower than the expected, such as the net cash flow created by assets or the achieved operating profit (or loss) is far below (or above) the estimated amount. ⑦ Other evidences indicate the impairment of assets may have occurred. (3) Measurement of the Recoverable Amount of the Assets The recoverable amount shall be estimated if there exists the impairment for the assets. The recoverable amount should be recognized according to the higher one between the net amount of the fair value minus the disposal costs and the present value of the cash flow of assets expected in the future. (4) Determination of Asset Impairment Loss The measurement results of the recoverable amount show that the book value of assets shall be reduced to the recoverable amount and the reduced amount shall be recognized as the impairment loss of assets and recorded into the current profits and losses, and the impairment provisions of the relevant assets are withdrawn if the recoverable amount of the assets is less than the book value. After the recognition of the assets impairment loss, the depreciation or amortization costs of the impairment assets should be made adjustment accordingly in the future period in order to make the assets to systematically amortize the book value of the assets after adjusted within the remaining service life (the estimated residual value deducted). The impairment loss of assets after recognized shouldn’t be reversed in the future accounting period. 85 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (5) Recognition and Impairment Treatment of Assets Group If there is the impairment for one asset, the company shall estimate the recoverable amount based on the individual asset. If it is difficult for the company to estimate the recoverable amount of the individual asset, the recoverable amount of asset group shall be recognized on the basis of the asset group which the asset is belong to. The recognition of the asset group should be made on the basis of the main cash inflow generated by the assets group that if is independent to the cash inflow of other assets or assets group. The corresponding impairment loss shall be recognized if the recoverable amount of the assets group or the assets group combination is less the book value (the book value of the assets group or the assets group combination should include the amortization quota relevant to corporate assets and goodwill for the assets group or the assets group combination amortized by the corporate assets and the goodwill). The book value of goodwill in the amortized assets group or assets group combination shall be firstly offset for the impairment losses, and the book value of other assets shall be offset in proportion according to the proportion of the book value of other assets in the assets group or the assets group combination, with the exception of the goodwill. (6) The Goodwill Impairment The company has conducted the impairment test at least every year for the goodwill established by the business combination. The book value of the goodwill generated by the combination shall be amortized into the related asset group from the purchase date. If difficult to amortize into the relevant asset group, the book value shall be amortized into the relevant asset group combination. The relevant asset group or asset group combination refers to that benefitting from the synergistic effect of the business combination and is not more than the report portion recognized by the company. When the relevant asset group or the asset group combination including the goodwill are conducted the impairment test, the impairment test should be firstly conducted for the asset group without the goodwill or the asset group combination, the recoverable amount shall be calculated and the corresponding impairment loss shall be recognized by comparison with the relevant book value if there exists the impairment for the asset group relevant to the goodwill or the asset group combination. Then the impairment test should be conducted for the asset group with the goodwill or the asset group combination, the impairment loss of the goodwill shall be recognized and made the treatment according to the provisions of the asset group impairment stated in the notes if the recoverable amount of the relevant asset group or the asset group combination is less than the book value by comparison of the book value of these relevant asset group or the asset group combination (including the book value of the goodwill amortized) with the recoverable amount. 22.Long-term amortizable expenses Long-term prepaid expenses refer to that enterprises have already spent, and amortization periods of all expenses are more than one year (excluding 1 year), they should be amortized in the regulated years. 23.Remuneration (1)Accounting treatment of short-term remuneration Remuneration refers to all kinds of rewards or compensation that the Company gives to get in return for the services its employees provide or employment termination. It includes short-term compensation, post-employment benefits, demission benefits and other long-term employee benefits. Enterprises to provide employees spouse, child welfare, dependents, survivors and other beneficiaries of deceased employees, etc., also belong to payroll. 86 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 During the company's accounting staff to provide services, the actual wages, bonuses, allowances and subsidies, w elfare, medical insurance, work injury insurance and maternity insurance and other social insurance, housing fund confirmed, labor union funds, employee education funds and as a liability profit or loss or costs related assets. If t he debt is expected to provide services after the end of the annual reporting period in which an employee can not b e fully paid within twelve months, and the financial impact is material, the amount will be discounted liabilities m easured after. (2) Accounting methods for post-employment benefits Post-employment benefits refer to the compensation and benefits that the Company gives to get in return for employees’ services for their retirement or employment termination, excluding short-term compensation and demission benefits. It falls into two categories, defined contribution plans and defined benefit plans. ① The defined contribution plan: the company shall no longer bear the further obligation to pay severance benefit plans after the company deposits the fixed costs to the independent funds. The basic pension insurance and the unemployment insurance shall be recognized as the liability according to the payable amount accounted by the defined contribution plans and recorded onto the current profits and losses or the relevant asset costs during the accounting period of the services provided by the staffs. ② The defined benefit plan: the severance benefit plans with the exception of the defined contribution plans. (3) Accounting Treatment Method of Demission Welfare The Company offers compensation to terminate employment with its employees before it expires or encourage them to accept lay-off. Such compensation is demission benefits and counted in current profit and loss. The employee compensation liabilities generated by the demission welfare shall be recognized on the early date and recorded into the current profits and losses: (1) when the company can’t withdraw the demission welfare provided due to the rundown suggestion or the termination of labor relations plans. (2) when the enterprise recognizes the costs or the expenses related to the reorganization of demission welfare payment. The economic compensation before the official retirement date shall be belong to the demission welfare when the implementation of the internal retirement plan for workers. During the period from the termination of service date to the normal retirement date, the paid internal retirement payroll and social insurance charges shall be once recorded into the current profits and losses. The economic compensation after the official retirement date (such as the normal retirement pension) should be handled according to the welfares after the demission. 24.Estimated liabilities The company should recognize the related obligation as a provision for liability when the obligation meets the following conditions: (1) That obligation is a present obligation of the enterprise; (2) It is probable that an outflow of economic benefits from the enterprise will be required to settle the obligation; (3) A reliable estimate can be made of the amount of the obligation.On the balance sheet date, an enterprise shall take into full consideration of the risks, uncertainty, time value of money, and other factors pertinent to the Contingencies to measure the estimated liabilities in accordance with the best estimate of the necessary expenses for the performance of the current obligation. When all or some of the expenses necessary for the liquidation of an estimated liabilities of an enterprise is expected to be compensated by a third party, the compensation should be separately recognized as an asset only when it is virtually certain that the reimbursement will be obtained. Besides, the amount recognized for the reimbursement should not exceed the book value of the estimated liabilities 87 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 25.Bond payable When the company is issuing bonds, the total price issued should be included in the “Payable bonds” subject. The difference between bond issuance total amount and the total amount of bond face valueshould be worked as bond premium or discount and be amortized within the bond period according to actual interest rate and vertical line method, and be treated according to borrowing costs described below. 26.Other Comprehensive Incomes Other comprehensive incomes refer to the profits and losses unrecognized in the current profits and losses according to other provisions of accounting standards. There are two reports: (1) Other comprehensive incomes that unable to be reclassified into the profits and losses in the future accounting period, mainly including the changes caused by the net liabilities and the net assets of the defined benefit plan that re-measured and the shares of other comprehensive incomes that accounted and unable to be reclassified into the profits and losses for the invested party in the future accounting period according to the equity method. (2) Other comprehensive incomes that reclassified into the profits and losses in the future accounting period when the requirements are met, the shares of other comprehensive incomes that accounted and reclassified into the profits and losses for the invested party in the future accounting period according to the equity method when the requirements are met, the profits or losses caused by the fair value changes of the sellable financial assets, the profits or losses generated by the sellable financial assets reclassified for the held-to-maturity investment, the effective hedging portion of the profits and losses issued by the cash flow hedging instruments, and the translation differences of foreign financial statements. 27. Revenues Whether the Company needs to comply with the disclosure requirements for specific industrie No The company’s incomes mainly include the toll service revenues and the services provision. (1) The recognition principle of the toll service revenues is that the toll revenues refer to the charges of operating the toll roads and shall be recognized in the actual charge. (2) The recognition principle of the services provision is as follows: The labor services started and completed within the same fiscal year shall be recognized as the revenues when the labor services finished. If the labor services started and completed in the different fiscal year and under the reliable estimation of the provided services transaction results, the company shall recognize the relevant service incomes according to the completion percentage method at the balance sheet date. The results of the transaction can be estimated reliably when the following requirements are all met: (1) total revenues and total labor costs can be measured reliably. (2) the economic benefits relevant to the transaction will flow into the enterprise. (3) the competition degree of the labor services can be reliably determined. 28. Government Grants 88 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (1)Government Grants Government grants means that the Company obtains monetary or non monetary assets free of charge from the government, excluding the capital invested by the government as an owner. The company recognizes the government grants when the company can meet the conditions of government grants and be able to receive the government grants. Thereinto: (1) If the government grant is a monetary asset, it shall be measured according to the amount received or receivable; If the government grant is a non-monetary asset, it shall be measured at fair value, and if the fair value cannot be obtained reliably, it shall be measured according to the nominal amount. ⑵The government grants pertinent to assets are used to write down the carrying value of the underlying assets or are recognized as deferred income. If the government grants pertinent to assets are recognized as deferred gains, it shall be included in the profits and losses in a reasonable and systematic manner within the useful life of the underlying asset. The Government grants, measured in nominal amounts, are directly included in current profits and losses. The government grants pertinent to income that are used to compensate the relevant costs or losses of the subsequent period of the enterprise are recognized as deferred income and are credited to the current profit or loss or are written down to offset the costs for the period when the relevant expenses are recognized; those government grants used for compensating the related expenses or losses incurred shall be directly included in the current profits and losses. ⑶ Government grants related to the daily activities of the enterprise are included in other income or are written down to offset costs in accordance with the economic business nature. Government grants that are not related to the day-to-day activities of the enterprise are included in non-operating income and expenditure. Where the recognized government grant needs to be refunded, then the accounting treatment shall be carried out in the period that it needs to be refunded according to the following stipulations: (1) Where it was written down the book value of the underlying assets at the time of initial recognition, then the book value of the assets shall be adjusted; (2) Where there is a related deferred income, it shall write-down the book balance of related deferred income and the excess part shall be included in the current profit and loss; (3) Where belongs to other cases, that shall be directly included in the current profits and losses. 29.Deferred income tax assets and deferred income tax liabilities The company is likely to determine the deferred income tax assets produced from deductible temporary differences with the limit of offsetting the taxable income of temporary difference. The Company confirms the temporary differences of the taxable that is not paid in the current and prior periods as the deferred income tax liabilities. However, the goodwill, the transactions formed from non-business merger and those will affect either accounting profit or the temporary differences of the taxable income when the transactions occur are not included in the deferred income tax liabilities. 30.Accounting Methods of Income tax The company’s income tax is accounted in Balance sheet liability approach. The company recognizes the sum of current income tax and deferred tax as the income tax expenses(or income) in the income statement on the basis of calculating and determining the income tax of the current period(namely the current taxes payable) and the deferred tax (the deferred tax expenses or income ), but excluding the 89 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 effects of the business combination and the income taxes related to the transactions or events directly recorded in the owner’s rights and interests. 31.Change of main accounting policies and estimations ⑴Change of accounting policies √ Applicable □Not applicable In accordance with requirements of the Notice Concerning Printing of the Revised Accounting Standards for Business Enterprises No. 16- Governmental Subsidies (CK[2017] No.15), the company shall include the governmental subsidies related to the enterprise daily activities into the other income or offset relevant costs subject to the economic business property; and include those irrelevant to the enterprise daily activities into the non-business income. Therefore, the company shall adopt the prospective application for such accounting policy change, which will not produce any influence on profits and losses, total assets and net assets listed in the current and previous periods. ⑵Change of accounting estimations □ Applicable √ Not applicable VI. Taxation 1. Major category of taxes and tax rates Tax category Tax basis Tax rate Toll income, Rent income and Labour VAT 3%、5%、6%、11%、17% income City maintenance and construction tax The actual payment of turnover tax 7%、5% Enterprise income tax Taxable income 25% Toll income, Rent income and Labour Business tax 3%、5% income .Education surcharges The actual payment of turnover tax 3% Local Education surcharges The actual payment of turnover tax 2% 2.Preferential tax Nil VII. Notes to the major items of consolidated financial statement 1.Monetary Capital 90 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 In RMB Items Amount in year-end Amount in year-begin Cash 105,172.19 50,695.89 Bank deposit 2,595,366,192.64 2,602,516,079.26 Other 802,535.56 712,869.10 Total 2,596,273,900.39 2,603,279,644.25 Other notes 91 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 2. Account receivable 1.Classification account receivables. In RMB Amount in year-end Amount in year- begin Book Balance Bad debt provision Book Balance Bad debt provision Classification Book value Book value Amount Proportio Amount Proportio Amount Proportio Amount Proportion( n(%) n(%) n(%) %) Account receivable with single major amount and 61,523,003.15 74.89% 61,523,003.15 32,054,176.60 78.46% 32,054,176.60 withdrawal bad debt provision for single item Account receivable withdrawalbad debt provision by group 20,626,473.24 25.11% 287,821.23 1.40% 20,338,652.01 8,800,188.07 21.54% 173,167.66 1.97% 8,627,020.41 of credit risk characterstics Total 82,149,476.39 100.00% 287,821.23 0.35% 81,861,655.16 40,854,364.67 100.00% 173,167.66 0.42% 40,681,197.01 92 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Receivable accounts with large amount individually and bad debt provisions were provided √ Applicable □Not applicable In RMB Amount in year-end Receivable accounts(Unit) Receivable accounts Bad debt provision Proportion Reason Guangdong Union Electronic Services 39,152,724.42 Co., Ltd. Guangdong Humen Bridge Co., Ltd. 22,370,278.73 Total 61,523,003.15 -- -- Account receivable on which bad debt provisions are provided on age basis in the group: √ Applicable □Not applicable In RMB Balance in year-end Aging Receivable accounts Bad debt provision Withdrawal proportion Subitem within 1 year Within 1 yeaar 18,258,616.00 Subtotal within 1 year 18,258,616.00 1-2 years 2,222,679.73 222,267.98 10.00% 2-3 years 35,177.51 10,553.25 30.00% 3-4 years 110,000.00 55,000.00 50.00% 4-5 years 90.00% Over 5 years 100.00% Total 20,626,473.24 287,821.23 1.40% Notes of the basis of recognizing the group: Refer to "Notes 5 the financial statements of the important accounting policies and accounting estimates No. 11 R ecognition and withdrawal method of bad debts. In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision: □ Applicable √ Not applicable In the groups, accounts receivable adopting other methods to accrue bad debt provision:: Nil (2)Accrual period, recovery or reversal of bad debts situation The current amount of provision for bad debts is RMB114,653.57 ; recovery or payback for bad debts Amount is RMB0.00. Where the current bad debts back or recover significant amounts:Nil 93 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (3)The current accounts receivable write-offs situation Nil (4)The ending balance of other receivables owed by the imputation of the top five parties In RMB Name Amount Aging Proportion(%) Bad debt provision Guangdong Union Electronic Services Co., Ltd. 39,152,724.42 Within 1 year 47.66 Guangdong Humen Bridge Co., Ltd. 22,370,278.73 Within 1 year 27.23 Guangdong Jingzhu Expressway Guangzhu 4,195,124.99 Within 1 year 5.11 North Section Co., Ltd. Guangdong Xinyue Traffic Investment Co.,Ltd. 4,025,036.61 Within 2 years 4.90 90,962.37 Guangdong Expressway Co., Ltd. 2,250,650.00 Within 2 years 2.70 2,937.50 Total 71,993,814.75 -- 87.60 93,899.87 (5)Account receivable which terminate the recognition owning to the transfer of the financial assets Nil (6)The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts receivable Nil Other notes Nil 3. Prepayments (1)Age analysis In RMB Balance in year-end Balance in year-begin Age Amount Proportion(%) Amount Proportion(%) Within 1 year 1,654,104.83 79.14% 2,655,392.35 92.84% 1-2 years 231,255.27 11.06% 35,000.00 1.22% 2-3 years 35,000.00 1.67% Over 3 years 169,738.00 8.13% 169,738.00 5.94% Total 2,090,098.10 -- 2,860,130.35 -- 94 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time: Nil (2) Top 5 of the closing balance of the prepayment colleted according to the prepayment target Name Amount Time Proportion(%) Shanghai Zexuan Network Technology Co., Ltd. 603,310.00 Within 1 year 28.87 Ping An Insurance 469,204.50 Within 1 year 22.45 Guangdong Guanyue Luqiao Co., Ltd. 242,256.40 Within 1 year 11.59 Dongguan Yongyao Optoelectronic Technology Co., 173,100.00 Within 1 year 8.28 Ltd. Guangzhou Maritime Court 169,738.00 Over 5 years 8.12 Total 1,657,608.90 79.31 Other notes: 4.Dividend receivable (1)Dividend receivable In RMB Items Balance in year-end Balance in year-begin China Everbright Bank Co., Ltd. 23,054,984.51 Total 23,054,984.51 (2)Significant dividend receivable aged over 1 year Nil 95 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 5.Other accounts receivable (1) Other accounts receivable disclosed by category In RMB Balance in year-end Balance in year-begin Category Book Balance Bad debt provision Book Balance Bad debt provision Amount Proportio Amount Proportio Book value Amount Proportio Amount Proportion( Book value n(%) n(%) n(%) %) Other Account receivable with single major amount and withdrawal bad debt 53,351,565.01 68.28% 53,351,565.01 100.00% 53,351,565.01 66.56% 53,351,565.01 100.00% provision for single item Other Account receivable withdrawal bad debt provision by group of credit risk 24,705,411.14 31.62% 1,637,642.42 6.63% 23,067,768.72 26,807,191.45 33.44% 1,639,311.92 6.12% 25,167,879.53 characteristics Other Account receivable with minor individual amount but bad debt provision 83,597.01 0.10% 83,597.01 100.00% is provided Total 78,140,573.16 100.00% 55,072,804.44 70.48% 23,067,768.72 80,158,756.46 100.00% 54,990,876.93 68.60% 25,167,879.53 - Other receivable accounts with large amount and were provided had debt provisions individually at end of period. √ Applicable □Not applicable In RMB Balance in year-end Other receivable(Unit) Bad debt Other receivable Proportion Reason provision 96 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Balance in year-end Other receivable(Unit) Bad debt Other receivable Proportion Reason provision The parent company once paid RMB 33,683,774.79 into Kunlun Securities Co., Ltd, Guangdong Expressway technology investment Co., Ltd once paid RMB 18,000,000.00 into Kunlun Securities Co., Ltd. Qinghai Province Xining City’s intermediate people’s court made a adjudication under law declared that Kunlun Securities Co., Ltd went bankrupt and repaid debt in November 11, 2006. On March 2007, The Company and Guangdong Expressway 49,343,885.10 49,343,885.10 100.00% Technology Investment Co., Ltd had switched the money that paid into Kunlun Securities Co., Ltd to other account receivable, and follow the careful principle to doubtful debts provision. The RMB 710,349.92 Credit was Recovered in 2008, and the provision for bad debt is deducted, The RMB977,527.77 credit was recovered in 2011, and the Kunlun Securities provision for had debt is deducted. The RMB 652,012.00 Credit was recovered in 2014, and the provision for had Co.,Ltd. debt is deducted. Guangdong Expressway Technology investment Co., Ltd .should charge Beijing Gelin Enze Organic Fertilizer Co., Ltd.for RMB12,220,079.91. Eight millions of it was entrust loan, three million was temporary borrowing RMB 12,400.00 is the commission loan interest, the rest of it was advance money for another, Beijing Gelin Enze Organic Fertilizer Co., Ltd’s operating status was had and had already ceased producing, Accordingly, the controlling 4,007,679.91 4,007,679.91 100.00% subsidiary of the company Guangdong Expressway Investment Co., Ltd. accounted full provision for Bad debt RMB 12,220,079.91 provision. Beijing Gelin Enze The company in 2014 recovered arrears of RMB 8,000,000.00, rushed back to the provision for bad debts and write o Organic Fertilizer Co., ff uncollected interest entrusted loans according to the settlement agreement of RMB 212,400.00. Ltd. Total 53,351,565.01 53,351,565.01 -- -- 97 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Other receivable accounts in Group on which bad debt provisions were provided on age analyze basis: √ Applicable □Not applicable In RMB Amount in year-end Age Other receivable Bad debt provision Withdrawal proportion Subitem Withn 1 year Within 1 year 13,931,246.56 Subtotal within 1 year 13,931,246.56 1-2 years 98,403.98 9,840.40 10.00% 2-3 years 312,715.87 93,814.76 30.00% 3-4 years 50.00% 4-5 years 90.00% Over 5 years 1,533,987.26 1,533,987.26 100.00% Total 15,876,353.67 1,637,642.42 10.31% Notes of the basis of recognizing the group: Refer to "Notes 5 the financial statements of the important accounting policies and accounting estimates . In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision:N/A □ Applicable √Not applicable In the groups, other accounts receivable adopting other methods to accrue bad debt provision: √ Applicable □Not applicable Amount in year-end Name Other account Bad debt Withdrawal Reason receivable provision proportion(%) Beijing Gongke Feida Transportation Engineering 4,140.00 Quality guarantees Development Co., Ltd. fund Beijing Shibang Weilishi Property Management 393,331.00 Deposit Services Co., Ltd. Chengdu Shuguang Fibre-optical Metwork Co., ltd. 59,758.09 Quality guarantees fund Foshan Nanhai Jiangyi Bottled water stores 700.00 Deposit Guangdong Boda Expressway Co., Ltd. 45,480.00 Quality guarantees fund Guangdong Feida Transportation Engineering 50,799.25 Quality guarantees Development Co., Ltd. fund Guangdong Gaoda Property Development Co.,ltd. 9,940.70 Deposit Guangdong Guanghui Expressway Co., ltd. 1,112,967.45 Quality guarantees 98 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 fund,Deposit Guangdong Guangle Expressway Co., Ltd. 4,832.00 Quality guarantees fund Guangdong Guangzhu West Expressway Co., Ltd. 100,639.00 Quality guarantees fund Guangdong Humen Bridge Co., Ltd. 8,338.00 Quality guarantees fund Guangdong Jiangzhong Expressway Co., Ltd. 19,708.00 Quality guarantees fund Guangdong Jingzhu Expressway Guangzhu North 55,694.00 Quality guarantees Section Co., Ltd. fund Guangdong Litong Real Estate Investment Co.,Ltd. 35,680.00 Deposit Guangdong Expressway Co., Ltd. 656,754.05 Administration expenses,Quality guarantees fund Guangdong Highway Construction Co., Ltd. 76,563.00 Quality guarantees fund Guangdong Road & Bridge Construction 3,762.70 Quality guarantees Development Co., Ltd. fund Guangdong West Coastal Expressway Xinhui 3,790.00 Quality guarantees Section Co., Ltd. fund Guangdong Weishi Highway Engineering Co., Ltd. 146.30 Quality guarantees fund Guangdong West Coastal Expressway Zhuhai 31,945.45 Quality guarantees Section Co., ltd. fund Guangdong Xinyue Traffic Investment Co.,Ltd. 168,562.60 Quality guarantees fund Guangdong Yueyun Traffic Co., Ltd. 3,032.00 Quality guarantees fund Guangdong Zhonglin Electrical Installation 8,820.00 Quality guarantees Engineering Co., Ltd. fund Guang-Shen-Zhu Expressway Co., Ltd. 121,280.00 Quality guarantees fund Guangzhou Dingrong Information Technology Co., 10,950.00 Quality guarantees Ltd. fund Guangzhou Saitisi Electromechanical Installation 15,875.00 Quality guarantees Engineering Co., Ltd. fund Guangzhou Chengcheng Auto Leasing Service Co., 30,000.00 Deposit ltd. Guangzhou Tuzhiling Compoter technology Co., 21,330.00 Quality guarantees Ltd. fund Guangdong Litong Technology Investment Co.,Ltd. 5,273.00 Quality guarantees 99 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 fund Hunan Tendering Co., Ltd. 5,000,000.00 Deposit Shanxi Sihe Communication Engineering Co., ltd. 1,600.00 Quality guarantees fund Shanxi Hantang Computer Co., Ltd. 14,250.00 Quality guarantees fund Deposit 5,000.00 Deposit Zhaoqing Guanghe Expressway Co., Ltd. 163,620.63 Quality guarantees fund Zhaoqing Yuezao Highway Co., Ltd. 419,326.00 Guarantees fund,Deposit China Port Railway Bureau Group Co., Ltd. 165,169.25 Quality guarantees fund Total 8,829,057.47 (2)Accrual period, recovery or reversal of bad debts situation The current amount of provision for bad debts is RMB81,927.51; recovery or payback for bad debts Amount is RM B 0.00. Where the current bad debts back or recover significant amounts:Nil (3) The actual write-off other accounts receivable (4) Other accounts receivable classified by the nature of accounts In RMB Nature Closing book balance Opening book balance Securities trading settlement funds balance 49,343,885.10 49,343,885.10 Guarantee deposit 8,405,764.42 4,641,268.72 Current account of gelin enze 4,007,679.91 4,007,679.91 Pretty cash 3,950,100.00 3,850,100.00 Advertising and service fee 2,166,299.62 2,818,648.03 Other 10,266,844.11 15,497,174.70 Total 78,140,573.16 80,158,756.46 (5) Top 5 of the closing balance of the other accounts receivable colleted according to the arrears party In RMB Proportion of the total Closing Name Nature Closing balance Aging year end balance of balance of bad the accounts debt provision 100 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 receivable(%) Securities trading settl Kunlun Securities Co.,Ltd 49,343,885.10 Over 5 years 63.15% 49,343,885.10 ement funds Hunan Tendering Co., Ltd. Guarantees fund 5,000,000.00 Within 1 year 6.40% Beijing Gelin Enze Current account 4,007,679.91 Over 5 years 5.13% 4,007,679.91 Heshan Communication Real Current account 1,470,000.00 Over 5 years 1.88% 1,470,000.00 estate Development Company Advertising and servic Guangdong Xinlu Advertising e fee 1,353,005.67 Within 1 year 1.73% Co.,ltd. Total -- 61,174,570.68 -- 78.29% 54,821,565.01 (6) Accounts receivable involved with government subsidies Nil (7) Other account receivable which terminate the recognition owning to the transfer of the financial assets Nil (8) The amount of the assets and liabilities formed by the transfer and the continues involvement of other accounts receivable Nil Other notes 5.Inventory Whether the Company needs to comply with the disclosure requirements for specific industrie No (1)Inventory types In RMB Year-end balance Year-beginning balance Items Provision for bad Provision for bad Book Balance Book value Book Balance Book value debts debts Inventory 323,888.89 323,888.89 323,888.89 323,888.89 Total 323,888.89 323,888.89 323,888.89 323,888.89 Whether the company is required to comply with the "Shenzhen Stock Exchange Industry Information Disclosure Guidelines No. 4 - listed companies engaged in seed industry, planting business" disclosure requirements 101 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 No (2)Inventory falling price reserves Nil (3) Description of The closing balance of inventories contain the amount of borrowing costs capitalized (4) Completed unsettled assets formed from the construction contact at the period-end Nil 6.Non-current asset due within 1 year In RMB Items Year-end balance Year-beginning balance Advance business tax 55,719.14 55,719.14 Total 55,719.14 55,719.14 Other notes Nil 7. Available-for-sale financial assets (1) List of available-for-sale financial assets In RMB Amount in year-end Amount in year- begin Items Bad debt Bad debt Book balance Book value Book balance Book value provision provision Available-for-sale equity 1,788,150,824.93 36,793,200.00 1,751,357,624.93 1,755,215,132.77 36,793,200.00 1,718,421,932.77 Instruments Measured by fair value 952,782,523.20 952,782,523.20 919,846,831.04 919,846,831.04 Measured by cost 835,368,301.73 36,793,200.00 798,575,101.73 835,368,301.73 36,793,200.00 798,575,101.73 Total 1,788,150,824.93 36,793,200.00 1,751,357,624.93 1,755,215,132.77 36,793,200.00 1,718,421,932.77 (2) Available-for-sale financial assets measured by fair value at the period-end In RMB Available-for-sale equity Available-for-sale Debt Type Total instruments instruments 102 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Cost of the equity instruments/amortized 517,560,876.80 517,560,876.80 cost of the liabilities instruments Fair value 952,782,523.20 952,782,523.20 Changed amount of the fair value accumulatively 435,221,646.40 435,221,646.40 included in other comprehensive income 103 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (3) Available-for-sale financial assets measured by cost at the period-end In RMB Book balance Impairment provision Shareholdi Cash ng bonus of Investee proportion the Period-begin Period-begin Increase Decrease Period -end Increase Decrease Period -end among the reporting investees period Guangdong Radio and Television Networks investment No.1 Limited 50,000,000.00 50,000,000.00 3.11% 999,272.31 partnership enterprise Kunlun Securities Co., Ltd.(Notes1) 30,000,000.00 30,000,000.00 30,000,000.00 30,000,000.00 5.74% 5,400,000.00 5,400,000.00 5,400,000.00 5,400,000.00 0.27% Huaxia Securities Co., Ltd.(Notes 2) Huazheng Assets Management 1,620,000.00 1,620,000.00 1,393,200.00 1,393,200.00 0.54% Co. Ltd.(Notes3) Guangdong Guangle Expressway Co., 748,348,301.73 748,348,301.73 9.00% Ltd.(Notes 4) Total 835,368,301.73 835,368,301.73 36,793,200.00 36,793,200.00 -- 999,272.31 104 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (4) Changes of the impairment of the available-for-sale financial assets during the reporting period In RMB Available-for-sale Available-for-sale Type Total Equity instruments Debt instruments Balance of the withdrawn impairment at the 36,793,200.00 36,793,200.00 period-begin Withdrawn at the period 36,793,200.00 36,793,200.00 ⑸Relevant description of the end of the fair value of the equity instruments at the end of a serious decline in fair value or non temporary decline but not related to impairment provision Nil 105 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 9. Long-term equity investment In RMB Increase/decrease Closing Adjustme Withdraw balance Additiona nt of Negative Investment profit and loss Changes al of of Investees Opening balance l other Cash bonus or profits Closing balance of other impairme Other impairme investmen recognized under the equity comprehe announced to issue investmen equity nt nt t method nsive t provision provision income I. Joint venture Guangdong Guanghui 963,806,710.36 128,289,616.25 81,106,373.29 1,010,989,953.32 Expressway Co., Ltd. Zhaoqing Yuezhao 298,347,974.37 25,096,297.33 55,172,678.59 268,271,593.11 Highway Co., Ltd. Subtotal 1,262,154,684.73 153,385,913.58 136,279,051.88 1,279,261,546.43 2. Affiliated Company Shenzhen Huiyan 162,435,484.69 16,281,377.27 178,716,861.96 Expressway Guangdong Jiangzhong 173,505,923.37 6,842,458.37 180,348,381.74 Expressway Co.,. Ltd. Ganzhou Kangda 204,137,265.86 14,905,386.55 219,042,652.41 Expressway Gan Ganzhou Gankang 210,007,188.89 1,179,367.37 211,186,556.26 106 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Expressway Guangdong Yueke Technology Petty Loan 208,564,582.77 6,781,604.48 215,346,187.25 Co., Ltd. Subtotal 958,650,445.58 45,990,194.04 1,004,640,639.62 Total 2,220,805,130.31 199,376,107.62 136,279,051.88 2,283,902,186.05 Other notes 107 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 10. Investment property (1) Investment property adopted the cost measurement mode √ Applicable □Not applicable In RMB Items Houses and buildings Land use right Construction in progress Total I.Original value 1.Opening balance 12,664,698.25 12,664,698.25 2.Increased amount of the period (1)Outsourcing (2)Inventory, Fixed assets and Construction project into (3)Enterprise consolidation 3.Decreased amount of the period (1)Disposal (2)Other Out 4.Closing balance 12,664,698.25 12,664,698.25 II.Accumulated depreciation accumulated amortization 1.Opening balance 9,444,727.17 9,444,727.17 2.Increased amount of 232,106.70 232,106.70 the period (1)Withdrawal or 232,106.70 232,106.70 amortization 108 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Items Houses and buildings Land use right Construction in progress Total 3.Decreased amount of the period (1)Disposal (2)Other Out 4.Closing balance 9,676,833.87 9,676,833.87 III. Impairment provision 1.Opening balance 2.Increased amount of the period (1)Withdrawal 3.Decreased amount of the period (1)Disposal (2)Other Out 4.Closing balance IV. Book value 1.Closing book value 2,987,864.38 2,987,864.38 2.Opening book 3,219,971.08 3,219,971.08 (2) Investment property adopted fair value measurement mode □Applicable√ Not applicable (3) Details of investment property failed to accomplish certification of property In RMB Items Book balue Reason Transportation and other ancillary Transportation and other ancillary facilities 1,809,168.66 facilities, Not accreditation Other notes 109 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 11. Fixed assets (1) List of fixed assets In RMB Guangfo Jingzhu Expressway House and Machinery Transportation Electricity equipment Items Fokai Expressway Total buildings equipment equipment Expressway Guangzhu section and other I. Original price 1.Opening balance 1,460,270,190.66 8,955,187,667.08 5,120,405,509.44 350,137,770.35 126,710,600.83 64,871,708.40 613,998,510.08 16,691,581,956.84 2.Increased amount 580,085.69 580,085.69 of the period (1)Purchase 287,864.26 287,864.26 (2)Transfer of project under 292,221.43 292,221.43 construction (3)Increased of Enterprise consolidation 3.Decreased amount 7,891,796.28 216,000.00 2,232,955.62 1,771,272.90 12,112,024.80 of the period (1)Disposal or scrap 7,891,796.28 216,000.00 2,232,955.62 1,771,272.90 12,112,024.80 4.Closing balance 1,460,270,190.66 8,947,295,870.80 5,120,405,509.44 350,137,770.35 126,494,600.83 62,638,752.78 612,807,322.87 16,680,050,017.73 110 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Guangfo Jingzhu Expressway House and Machinery Transportation Electricity equipment Items Fokai Expressway Total buildings equipment equipment Expressway Guangzhu section and other II. Accumulated depreciation 1.Opening balance 1,438,198,286.26 2,961,877,190.13 2,310,553,044.84 207,381,103.40 48,853,742.40 49,709,577.10 389,185,709.94 7,405,758,654.07 2.Increased amount 22,071,904.40 228,639,727.72 118,282,767.88 9,512,202.38 6,043,421.84 1,889,497.53 22,645,752.23 409,085,273.98 of the period (1)Withdrawal 22,071,904.40 228,639,727.72 118,282,767.88 9,512,202.38 6,043,421.84 1,889,497.53 22,645,752.23 409,085,273.98 3.Decreased amount 5,531,877.31 194,400.00 2,009,659.80 1,636,440.79 9,372,377.90 of the period (1)Disposal or 5,531,877.31 194,400.00 2,009,659.80 1,636,440.79 9,372,377.90 scrap 4.Closing balance 1,460,270,190.66 3,184,985,040.54 2,428,835,812.72 216,893,305.78 54,702,764.24 49,589,414.83 410,195,021.38 7,805,471,550.15 III. Impairment provision 1.Opening balance 2.Increased amount ofthe period (1)Withdrawal 3.Decreased amount of the period 111 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Guangfo Jingzhu Expressway House and Machinery Transportation Electricity equipment Items Fokai Expressway Total buildings equipment equipment Expressway Guangzhu section and other (1)Disposal or scrap 4.Closing balance IV. Book value 1.Closing book 5,762,310,830.26 2,691,569,696.72 133,244,464.57 71,791,836.59 13,049,337.95 202,612,301.49 8,874,578,467.58 value 2.Opening book 22,071,904.40 5,993,310,476.95 2,809,852,464.60 142,756,666.95 77,856,858.43 15,162,131.30 224,812,800.14 9,285,823,302.77 value 112 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 ⑵Temporarily idle fixed assets Nil ⑶Fixed assets through financial leasing Nil ⑷Tenancy of fixed assets through operating lease Nil ⑸Details of fixed assets failed to accomplish certification of property In RMB Items Book value Reason Transportation and other ancillary Transportation and other ancillary facilities 97,733,106.51 facilities, Not accreditation Other notes 12. Project under construction (1)Project under construction In RMB Year-end balance Year-beginning balance Book balance Provision Book value Book balance Provision Book value Items for for devaluation devaluation Sanbao To Shuikou 180,327,023.60 180,327,023.60 128,709,237.02 128,709,237.02 Expansion project Odd project 22,212,449.60 22,212,449.60 20,534,873.28 20,534,873.28 Total 202,539,473.20 202,539,473.20 149,244,110.30 149,244,110.30 113 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (2) Changes of significant construction in progress In RMB Includin g: Capitaliz Capitaliz capitaliz Source Name of Other Proporti Project ation of Budget Opening balance Increase Transferred to fixed assets End balance ation of ation of of project decrease on % process interest interest interest funding rate (%) this period Sanbao To Shuikou 3,426,206,66 128,709,237.02 51,617,786.58 180,327,023.60 16.34% 16.34% 126,434.47 Other Expansion 0.00 project Odd project 20,534,873.28 1,969,797.75 292,221.43 22,212,449.60 Other 3,426,206,66 Total 149,244,110.30 53,587,584.33 292,221.43 202,539,473.20 -- -- 126,434.47 -- 0.00 ⑶Provision for impairment of construction projects in the current period Nil 114 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 13. Engineering material In RMB Items Balance in year-end Balance in year-begin Signpost 1,549,556.00 1,549,556.00 Total 1,549,556.00 1,549,556.00 Other notes 14. Intangible assets (1) List of intangible assets In RMB Non-patent Items Land use right Patent right Software Logo Total right I. Original price 1.Opening balance 1,311,658.00 23,183,107.63 24,494,765.63 2.Increased amount of the period (1) Purchase (2)Internal Development (3)Increased of Enterprise Combination 3.Decreased amount of the period (1)Disposal 4.Closing balance 1,311,658.00 23,183,107.63 24,494,765.63 II.Accumulated amortization 1.Opening balance 1,223,373.70 17,133,097.03 18,356,470.73 2.Increased amount of the 75,672.60 1,740,012.48 1,815,685.08 period (1) Withdrawal 75,672.60 1,740,012.48 1,815,685.08 115 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Non-patent Items Land use right Patent right Software Logo Total right 3.Decreased amount of the period (1)Disposal 4.Closing balance 1,299,046.30 18,873,109.51 20,172,155.81 III. Impairment provision 1.Opening balance 2.Increased amount of the period (1) Withdrawal 3.Decreased amount of the period (1)Disposal 4.Closing balance IV. Book value 1.Closing book value 12,611.70 4,309,998.12 4,322,609.82 2.Opening book value 88,284.30 6,050,010.60 6,138,294.90 The intangible assets by the end of the formation of the company's internal R & D accounted of the proportion of the balance of intangible assets ⑵Details of Land use right failed to accomplish certification of property Nil 15. Long-term amortize expenses In RMB Amortized expenses Balance in Increase in this Items year-begin period Other loss Balance in year-end Renovation fee 1,559,874.44 850,840.62 709,033.82 Property Insurance 204,091.63 55,661.40 148,430.23 Total 1,763,966.07 906,502.02 857,464.05 116 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Other notes 16. Deferred income tax assets/deferred income tax liabilities (1) Deferred income tax assets had not been off-set In RMB Balance in year-end Balance in year-begin Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax difference assets difference assets Asset impairment provision 86,597.01 21,649.25 3,000.00 750.00 Deductible loss 881,082,268.51 220,270,567.14 Amortization of intangible 1,228,407.79 307,101.95 1,298,590.36 324,647.59 assets Timing difference between 8,783,411.12 2,195,852.78 41,939,701.40 10,484,925.35 accumulated depreciation Total 891,180,684.43 222,795,171.12 43,241,291.76 10,810,322.94 (2) Deferred income tax liabilities had not been off-set In RMB Balance in year-end Balance in year-begin Items Deductible Deferred income tax Deductible Deferred income tax temporary difference liabilities temporary difference liabilities Changes in fair value of available for sale 435,221,646.40 108,805,411.60 financial assets Deductible temporary differences in the 1,068,855,444.92 267,213,861.23 1,113,854,587.99 278,463,647.00 formation of asset impairment Total 1,504,077,091.32 376,019,272.83 1,113,854,587.99 278,463,647.00 (3)Details of the un-recognized deferred income tax assets In RMB Items Balance in year-end Balance in year-begin Deductible loss 11,836,032.09 977,316,303.49 Deductible temporary differences in the 92,067,228.66 91,954,244.59 formation of asset impairment Total 103,903,260.75 1,069,270,548.08 117 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (4)Deductible losses of the un-recognized deferred income tax asset will expire in the following years In RMB Year Balance in year-end Balance in year-begin Remark 2017 3,446,980.57 218,901,780.38 2018 4,932,481.22 160,481,639.35 2019 3,456,570.30 227,972,299.53 2020 200,645,733.66 2021 169,314,850.57 2022 Total 11,836,032.09 977,316,303.49 -- Other notes 17. Other Non-current assets In RMB Items Balance in year-end Balance in year-begin Prepaid land occupation tax 1,176,432.55 1,176,432.55 Income tax deductible 250,113.52 Prepaid business tax 592,429.74 618,339.90 Prepaid fixed assets engineering fees 69,625.16 505,397.83 Total 2,088,600.97 2,300,170.28 Other notes 18. Account payable (1)List of Account payable In RMB Items Balance in year-end Balance in year-begin Within 1 year(Including 1 year) 178,816,375.03 259,955,112.29 1-2 year (Including 2 years) 13,748,279.04 20,004,237.58 2-3 year(Including 3 years) 2,198,105.84 9,038,060.80 Over 3 years 12,800,678.98 10,416,636.40 Total 207,563,438.89 299,414,047.07 (2) Notes of the accounts payable aging over one year In RMB Items Balance in year-end Unpaid reason 118 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Foshan Land and resources Bureau 10,996,790.40 Unsettled Guangdong Expressway Co., Ltd. 8,746,491.18 Unsettled Guangdong Changda Highway 2,938,837.63 Unsettled Engineering Co., Ltd Jinan Jinzhong Electronic Weighing 1,996,541.55 Unsettled Instrument Co., Ltd. Total 24,678,660.76 -- Other notes:Nil 19. Advance from customers (1) List of advance from customers In RMB Items Balance in year-end Balance in year-begin Within 1 year(Including 1 year) 753,681.34 1,004,503.09 1-2 years(Including 2 years) 3,504.11 51,000.00 2-3 years(Including 3 years) 50,250.00 Over 3 years 15,678,431.37 16,384,520.31 Total 16,485,866.82 17,440,023.40 (2) Significant advance from customers aging over one year In RMB Items Closing balance Unpaid/Uncarry over reason Guangzhou Huanlong Expressway Co., 10,920,179.90 Land rent is not in the settlement period Ltd. Guangdong Province Telecommunications The rental of the communication channel is 3,166,668.30 Engineering Management Center not in the settlement period Guanghdong Xinle Technology 1,442,462.77 The Rental is not in the settlement period Development Co., Ltd. Total 15,529,310.97 -- ⑶The completion of the final construction contract has been completed and the project is not completed Nil 20. Payable Employee wage (1)Payable Employee wage In RMB 119 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Items Year-beginning balance Increase in the current Decrease in the current Year-end balance period period I. Short-term 8,840,599.13 123,011,764.59 118,290,375.74 13,561,987.98 compensation II.Post-employment bene fits - defined contribution 13,438,196.60 12,482,161.05 956,035.55 plans III. Dismiss welfare 240,123.65 240,123.65 Total 8,840,599.13 136,690,084.84 131,012,660.44 14,518,023.53 (2)Short-term Remuneration In RMB Items Year-beginning Increase in the current Decrease in the current Year-end balance balance period period 1.Wages, bonuses, allowances and 1,202,663.49 89,124,282.08 85,359,347.67 4,967,597.90 subsidies 2.Employee welfare 8,283,512.55 8,097,132.55 186,380.00 3. Social insurance premiums 7,635,125.16 7,628,474.30 6,650.86 Including :Medical insurance 5,560,734.00 5,554,946.75 5,787.25 Work injury insurance 228,896.36 228,702.30 194.06 Maternity insurance 633,978.23 633,308.68 669.55 Supplementary medical insurance 1,211,516.57 1,211,516.57 4.Public reserves for housing 12,769,431.00 12,758,234.00 11,197.00 5.Union funds and staff education 7,637,935.64 3,638,479.65 2,887,573.07 8,388,842.22 fee 8.Other 1,560,934.15 1,559,614.15 1,320.00 Total 8,840,599.13 123,011,764.59 118,290,375.74 13,561,987.98 (3)List of drawing scheme In RMB Items Balance in year-begin Increase in this period Payable in this period Balance in year-end 1. Basic old-age 10,747,565.92 10,737,863.47 9,702.45 insurance premiums 2.Unemployment 367,100.49 366,722.39 378.10 120 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 insurance 3.Enterprise annuity 2,323,530.19 1,377,575.19 945,955.00 payment Total 13,438,196.60 12,482,161.05 956,035.55 Other notes 21. Tax Payable In RMB Items Balance in year-end Balance in year-begin VAT 9,748,721.40 10,107,421.05 102,481,321.92 86,569,385.59 Enterprise Income tax Individual Income tax 304,812.04 4,955,473.49 City Construction tax 555,490.16 694,432.76 Land use tax 761,295.31 983,920.72 Property tax 672,979.54 2,303,583.10 Education subjoin 262,766.54 323,432.09 Locality Education subjoin 161,390.29 202,594.86 Stamp tax 15,995.78 132,488.16 Other 67,640.50 98,166.49 Total 115,032,413.48 106,370,898.31 Other notes: 22.Interest payable In RMB Items Balance in year-end Balance in year-begin Pay the interest for long-term loans by 7,986,358.47 8,873,911.85 installments. Interest payable on entrusted loans 71,371.67 Total 7,986,358.47 8,945,283.52 - Particulars of significant overdue unpaid interest Nil 23. Dividends payable In RMB Items Year-end balance Year-Beginning balance 121 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Common stock dividends 14,772,372.03 12,506,777.92 Total 14,772,372.03 12,506,777.92 Note: Including significant unpaid dividends payable over one year, the unpaid reason shall be disclosed: Final dividend payable RMB12,506,777.92 for more than a year in unpaid dividends to shareholders over the yea r was mainly due to non-payment of shareholder dividends did not provide information on interest-bearing bank, d id not share reform of shareholders to receive dividends or provide application to receive dividends the bank infor mation is incorrect, resulting in failure to pay a dividend or refund. 24.Other accounts payable (1) Other accounts payable listed by nature of the account In RMB Items Year-end balance Year-Beginning balance Quality guarantee fund 55,887,508.64 105,901,434.85 Deposit 1,764,567.00 1,819,863.15 Other 24,447,850.88 26,544,843.34 Total 82,099,926.52 134,266,141.34 (2) Other significant accounts payable with aging over one year In RMB Items Closing balance Unpaid/un-carry over reason Project Quality guarantees/ Bid Guangdong Changda Engineering Co., Ltd 6,828,403.12 Gruarantees/Deposit Guangdong Nengda Grade Highway Project Quality guarantees/ Bid 3,203,152.91 Maintenance Co., Ltd. Guarantees/ Performance Guarantees Project Quality guarantees/ Bid Guangdong Guanyue luqiao Co., Ltd. 1,848,160.51 Guarantees/ Performance Guarantees Guangdong Xinyue Traffic Investment Project Quality guarantees/ Bid 1,241,574.70 Co., Ltd. Guarantees/ Performance Guarantees Total 13,121,291.24 -- Other notes 25. Non-current liabilities due within 1 year In RMB Items Balance year-end Year-beginning balance Long-term loans due within 1 year 1,070,610,000.00 907,880,000.00 122 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Long-term payable account due within 1 50,000,000.00 year Total 1,070,610,000.00 957,880,000.00 Other notes: Long-term borrowing rate is due within one year benchmark lending rate over the same period or the same period the benchmark lending rate to fall 10%, The balance of the long-term payables due within 1 year is the principal amount of the entrusted loan of Ganzhou Gangkang Expressway Co., Ltd., the interest rate is 4.6716%. 26. Long-term loan (1) Category of long-term loan In RMB Items Balance year-end Year-beginning balance Pledge loan 449,000,000.00 449,000,000.00 Guaranteed loans 1,500,000,000.00 1,500,000,000.00 Credit loans 3,161,950,000.00 3,453,780,000.00 Total 5,110,950,000.00 5,402,780,000.00 Notes : The borrowing interest rate is 4.35% -4.75%; the guaranteed loan interest rate is 5.6%; the credit interest rate is 10% lower for the same benchmark lending rate or the benchmark loan interest rate for the same period. 27. Long-term payable (1) Long-term payable listed by nature of the account In RMB Items Balance year-end Year-beginning balance Non-operating asset payable 2,022,210.11 2,022,210.11 Other notes: 28. Stock capital In RMB Increase/decrease this time (+ , - ) Balance Issuing of Transferred Balance year-end Year-beginning Bonus shares Other Subtotal new share from reserves Total of capital 2,090,806,126.00 2,090,806,126.00 shares Other notes: 123 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 29. Capital reserves In RMB Items Year-beginning balance Increase in the current Decrease in the current Year-end balance period period Share premium 2,508,401,790.51 2,508,401,790.51 Other capital reserves 6,552.48 6,552.48 Total 2,508,408,342.99 2,508,408,342.99 Notes: 30. Other comprehensive income In RMB Amount of current period Less : Previously recog After - tax att Year-beginning Amount for the After - tax attri Year-end Items nized in profit or Less:Income ributable to balance period before in loss in other co butable to the p balance tax minority shar come tax mprehensive inc arent company eholders ome 2.Other comprehensive income reclassifiable to 402,285,954.24 32,935,692.16 108,805,411.60 -75,869,719.44 326,416,234.80 profit or loss in subsequent periods Gains and losses from cha nges in fair value of availa 402,285,954.24 32,935,692.16 108,805,411.60 -75,869,719.44 326,416,234.80 ble for sale financial asset s Total of other 402,285,954.24 32,935,692.16 108,805,411.60 -75,869,719.44 326,416,234.80 comprehensive income Other notes, including the adjustment of the recognition of initial amount of effective part of the cash flow hedging gains and losses transfer into arbitraged items: Notes 1. The initial balance and the ending balance refer to other comprehensive incomes in the balance sheet. The initial balance + other comprehensive incomes belong to the parent company after taxes = the ending balance. The occurrence amount in the period refers to other comprehensive incomes in the profit statement, and the occurrence amount before income tax in the period – Other comprehensive income recorded in the earlier stage and transferred into the profits and losses in the current period – income taxes = other comprehensive incomes belong to the parent company after taxes + other comprehensive incomes belong to the minority shareholders after taxes. Notes 2:In accordance with the company strategical planning and operation decisions in the future, the 124 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 company shall pay the income tax incurred due to the sale of the available-for-sale financial assets and begin to calculate the deferred income tax influence corresponding to the fair value thereof from the current period. 31. Surplus reserve In RMB Items Year-beginning balance Increase in the current Decrease in the current Year-end balance period period Statutory surplus 366,956,549.89 366,956,549.89 reserve Total 366,956,549.89 366,956,549.89 Statement on surplus reserves. Please state the related resolutions of the Board on capitalizing of reserves, making up losses, and dividends: 32. Retained profits In RMB Items Amount of this period Amount of last period Before adjustments: Retained profits in last period 2,920,563,328.27 2,179,239,324.01 end After adjustments: Retained profits at the period 2,920,563,328.27 2,179,239,324.01 beginning Add:Net profit belonging to the owner of the 892,848,012.53 1,001,205,945.39 parent company Less: Statutory surplus reserve 71,314,278.93 Common stock dividend payable 702,510,858.34 188,567,662.20 Retained profit at the end of this term 3,110,900,482.46 2,920,563,328.27 33.Operation income and operation cost In RMB Amount of this period Amount of last period Items Income Cost Income Cost Main operation 1,418,719,988.26 523,456,284.40 1,310,524,908.77 547,729,063.75 Other operation 21,502,575.48 10,233,560.76 22,967,271.00 11,218,409.33 Total 1,440,222,563.74 533,689,845.16 1,333,492,179.77 558,947,473.08 34. Business tax and subjoin 125 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 In RMB Items Amount of this period Amount of last period Urban construction tax 2,760,207.40 2,657,718.23 Education surcharge 1,290,500.11 1,233,888.92 Property tax 677,877.95 328,030.91 Land use tax 767,994.64 461,274.26 Stamp tax 358,071.25 5,065.41 Business tax 26,341.89 26,938,514.91 Land Value added tax 860,324.55 821,904.47 Defend expense 384.04 505,754.16 Other 154,073.23 144,229.42 Total 6,895,775.06 33,096,380.69 Other notes: 35. Administrative expenses In RMB Items Amount of this period Amount of last period Wage 49,157,515.03 53,433,060.50 Depreciation and Amortization 7,247,599.37 6,862,171.67 R & D expenses 3,249,337.10 790,927.27 Low consumables amortization 245,247.83 340,720.10 Travel expenses 128,401.26 256,792.05 Office expenses 2,541,048.21 2,407,928.04 Leased expenses 5,778,380.50 5,602,580.99 The fee for hiring agency 2,396,071.67 1,688,829.24 Consultation expenses 1,524,000.00 337,026.84 Directorate expenses 9,376.00 32,606.00 Expenses of taxation 1,300,956.33 Listing fee 11,320.76 11,057.40 Information cost and maintenance fee 505,424.13 513,040.25 Other 4,900,192.98 6,188,885.92 Total 77,693,914.84 79,766,582.60 Other notes: 126 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 36.Financial expenses In RMB Items Amount of this period Amount of last period Interest expenses 147,292,451.79 202,465,249.45 Deposit interest income(-) -15,653,886.22 -12,693,925.94 Exchange Income and loss(Gain-) -1,522,372.61 533,974.57 Bank commission charge 3,688,166.06 312,937.13 Total 133,804,359.02 190,618,235.21 Other notes: 37. Asset impairment loss In RMB Items Amount of this period Amount of last period I. Bad debt loss 196,581.08 -177,447.05 Total 196,581.08 -177,447.05 Other notes: 38. Investment income In RMB Items Amount of this period Amount of last period Long-term equity investment income by equity 199,376,107.62 181,732,975.66 method Hold the investment income during from 24,054,256.82 45,697,711.66 available-for-sale financial assets Total 223,430,364.44 227,430,687.32 Other notes: 39. Non-Operation income In RMB Recorded in the amount of the Items Amount of this period Amount of last period non-recurring gains and losses Total gains from disposal of 111,175.47 non-current assets Including:Gains from disposal 111,175.47 127 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 of fixed assets Government Subsidy 197,210.65 197,210.65 Road property claim income 822,425.45 1,683,499.20 822,425.45 Other income(Notes) 61,279,442.48 61,886,470.47 61,279,442.48 Total 62,299,078.58 63,681,145.14 62,299,078.58 Government subsidy reckoned into current gains/losses In RMB Whether the impact of Whhether Amount of Amount of Assets-relate Subsidy Issuing subsidies on Issuing body Nature special current previous d/income items reason the current subsidies period period –related profit and loss Stable job Related to 197,210.65 subsidies income Total -- -- -- -- -- 197,210.65 -- Other notes: Other gains in this period include the receipt of the national highway 325 Jiujiang Bridge in advance of the termination fee of RMB 59,995,667.68, and included in the cash flow statement "received other cash related to investment activities." 40. Income tax expense (1) Lists of income tax expense In RMB Items Amount of current period Amount of previous period Current income tax expense 203,294,551.97 167,401,247.46 Deferred income tax expense -223,234,633.95 -10,068,427.03 Total -19,940,081.98 157,332,820.43 (2) Adjustment process of accounting profit and income tax expense In RMB Items Amount of current period Total profits 970,572,057.34 Current income tax expense accounted by tax and relevant 242,643,014.32 regulations 128 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Influence of income tax before adjustment -372,764.24 Influence of non taxable income -55,857,591.11 Impact of non-deductible costs, expenses and losses 385,592.41 Affect the use of deferred tax assets early unconfirmed -206,597,349.43 deductible losses The current period does not affect the deferred tax assets -140,983.93 recognized deductible temporary differences or deductible loss Income tax expense -19,940,081.98 Other notes 42. Items of Cash flow statement (1) Other cash received from business operation In RMB Items Amount of current period Amount of previous period Newwork received toll income 38,176,722.70 Interest income 15,653,886.22 12,693,925.94 Unit current account 6,988,367.43 29,313,174.96 Total 60,818,976.35 42,007,100.90 Notes: (2)Other cash paid related to oprating activities In RMB Items Amount of current period Amount of previous period Management expense 22,338,978.13 16,481,079.48 Unit current account 11,909,230.86 30,486,151.38 Network received toll incom 2,160,313.24 16,674,879.00 Total 36,408,522.23 63,642,109.86 Notes : (3)Other Cash received related to investment activities In RMB Items Amount of current period Amount of previous period Jiujiang bridge to receive compensation 59,995,667.68 60,770,000.00 Total 59,995,667.68 60,770,000.00 Notes : 129 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (4)Other Cash payable related to investment activities In RMB Items Amount of current period Amount of previous period Acquisition and construction company 987,903,684.98 creditor's rights Total 987,903,684.98 Notes: (5)Other Cash received related to Financing activities In RMB Items Amount of current period Amount of previous period Piecemeal dividend 5,173.81 Total 5,173.81 Notes : ⑹Other Cash payable related to financing activities In RMB Items Amount of current period Amount of previous period Recombination fee 3,451,000.00 Issue registration fee 533,368.84 Total 3,984,368.84 Notes : 43. Supplement Information for cash flow statement (1)Supplement Information for cash flow statement In RMB Supplement Information Amount of current period Amount of previous period I. Adjusting net profit to cash flow from -- -- operating activities Net profit 990,512,139.32 604,141,638.68 Add: Impairment loss provision of assets 196,581.08 -177,447.05 Depreciation of fixed assets, oil and gas 409,188,339.82 424,901,934.49 130 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 assets and consumable biological assets Amortization of intangible assets 1,772,083.08 1,976,826.39 Amortization of Long-term deferred 906,502.02 906,502.01 expenses Loss on disposal of fixed assets, intangible 2,629,016.43 -8,721.82 assets and other long-term deferred assets Financial cost 145,770,079.18 202,999,224.02 Loss on investment -223,430,364.44 -227,430,687.32 Decrease of deferred income tax assets -211,984,848.18 -4,510,173.19 Increased of deferred income tax liabilities -11,249,785.77 -5,558,253.84 Decease of operating receivables -40,231,085.00 -9,440,469.79 Increased of operating Payable -41,686,422.17 -54,917,543.20 Net cash flows arising from operating 1,022,392,235.37 932,882,829.38 activities II. Significant investment and financing -- -- activities that without cash flows: 3.Movement of cash and cash equivalents: -- -- Ending balance of cash 2,596,273,900.39 1,677,591,492.62 Less: Beginning balance of cash equivalents 2,603,279,644.25 1,199,629,276.85 Net increase of cash and cash equivalents -7,005,743.86 477,962,215.77 (2) Net Cash paid of obtaining the subsidiary Nil (3) Net Cash receive of disposal of the subsidiary Nil (4)Composition of cash and cash equivalents In RMB Items Balance in year-end Balance in year-Beginning I. Cash 2,596,273,900.39 2,603,279,644.25 Of which: Cash in stock 105,172.19 50,695.89 Bank savings could be used at any time 2,595,366,192.64 2,602,516,079.26 Other monetary capital could be used at any 802,535.56 712,869.10 time 131 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 III. Balance of cash and cash equivalents at 2,596,273,900.39 2,603,279,644.25 the period end Other notes: 44. Note of statement of changes in the owner's equity Explain "other" project name and adjustment amount of the adjustment of closing balance in previous year, etc Nil 45. The assets with the ownership or use right restricted Other notes: Up to June 30, 2017, Jingzhu Expressway Guangzhu Section Co., Ltd., the controlling grandchildren company of the Company, with the toll collection right of Panyu Tangkeng-Zhuhai Jinding section project in Jingzhu expressway, asked for RMB 729,000,000.00 of loan from Guangzhou Wuyang Branch of ICBC to provide pledge guarantee(of which the non-current debt balance with 1-year expiration was RMB 280,000,000.00 and the long-term loan balance was RMB 449,000,000.00). 46. Foreign currency monetary items (1) Foreign currency monetary items Nil (2) Note to oversea entities including: for significant oversea entities, shall disclose main operating place, recording currency and selection basis, if there are changes into recording currency, shall also disclose the reason. □ Applicable √ Not applicable VIII.Changes of consolidation scope 1.Enterprise consolidation not under the same control Nil 2. Enterprise consolidation ont under the same control Nil 3. Counter purchase Nil 4. The disposal of subsidiary Nil 132 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 5. Other reasons for the changes in combination scope Nil 6.Other Nil IX. Equity in other entities 1. Equity in subsidiary (1) The structure of the enterprise group Name of Main Places of Registration Nature of Shareholding Ratio (%) Obtaining Subsidiary Operation Place Business direct indirect Method Guangdong Fokai Under the same Expressway Expressway Co., 100.00% control business Foshan Guangzhou Management Ltd. combination Under the same Guangfo Expressway Expressway Co., 75.00% control business Guangzhou Guangzhou Management Ltd. combination Investment in Guangdong Expressway technical Technology Guangzhou Guangzhou industries and 100.00% Investment Investment Co., provision of Ltd. relevant Guangzhuo Guangzhu Traffic Under the same Investment control business Investment Guangzhou Guangzhou 100.00% management Management Co., combination Ltd. Jingzhu Expressway Under the same Expressway Guangzhu Zhongshan Guangzhou 20.00% 55.00% control business Management Section Co.,Ltd. combination (Notes) Notes: holding proportion in subsidiary different from voting proportion: Nil 133 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Basis of holding half or less voting rights but still been controlled investee and holding more than half of the voting rights not been controlled investee: Nil Significant structure entities and controlling basis in the scope of combination: Nil Other notes: Nil (2) Important Non-wholly-owned Subsidiary In RMB Profit or Loss Owned by Dividends Distributed to Shareholding Ratio of Equity Balance of the the Minority the Minority Name of Subsidiary Minority Shareholders Minority Shareholders in Shareholders in the Shareholders in the (%) the End of the Period Current Period Current Period Guangfo Expressway 25.00% 24,594,618.60 113,356,792.40 Co., Ltd. Jingzhu Expressway Guangzhu Section 25.00% 73,069,508.19 538,802,621.79 Co.,Ltd. Holding proportion of minority shareholder in subsidiary different from voting proportion: Nil Other notes: Nil 134 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (3) The main financial information of significant not wholly owned subsidiary In RMB Year-end balance Year-beginning balance Name Non current Current Non current Non current Current Non current Current assets Total assets Total liabilities Current assets Total assets Total liabilities assets Liabilities liabilities assets Liabilities liabilities Guangfo Expressway 467,866,940.87 19,270,172.27 487,137,113.14 33,709,943.52 33,709,943.52 338,006,190.88 59,194,753.95 397,200,944.83 42,152,249.63 42,152,249.63 Co., Ltd. Jingzhu Expressway Guangzhu 732,295,794.14 2,808,612,088.62 3,540,907,882.76 483,878,583.91 1,457,823,404.11 1,941,701,988.02 385,446,003.69 2,934,252,031.69 3,319,698,035.38 547,397,234.64 1,465,372,938.76 2,012,770,173.40 Section Co.,Ltd. In RMB Amount of current period Amount of previous period Total Total Name Cash flows from Cash flows from Business income Net profit Comprehensive Business income Net profit Comprehensive operating activities operating activities income income Guangfo Expressway 201,131,785.00 98,378,474.42 98,378,474.42 129,165,512.93 192,164,999.38 41,079,773.35 41,079,773.35 135,089,476.99 Co., Ltd. Jingzhu Expressway 631,857,976.08 292,278,032.76 292,278,032.76 443,338,931.03 553,201,818.43 227,227,929.93 227,227,929.93 383,888,033.30 Guangzhu 135 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Section Co.,Ltd. Other notes: 136 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (4) Significant restrictions of using enterprise group assets and pay off enterprise group debt Nil (5) Provide financial support or other support for structure entities incorporate into the scope of consolidated financial statements Nil 2. The transaction of the Company with its owner’s equity share changed but still controlling the subsidiary Nil。 3. Equity in joint venture arrangement or associated enterprise (1) Significant joint venture arrangement or associated enterprise Proportion Accounting treatment of the Main operating investment of Name Registration place Business nature place Directly Indirectly joint venture or associated enterprise Guangdong Guanghui Guangzhou, Guangzhou, Expressway 30.00% Equity method Expressway Co., Guangdong Guangdong Management Ltd. Zhaoqing Yuezhao Zhaoqing, Zhaoqing, Expressway 25.00% Equity method Highway Co., Management Guangdong Guangdong Ltd. Shenzhen Huiyan Shenzhen Shenzhen Expressway Expressway Co., 33.33% Equity method Guangdong Guangdong Management Ltd. Guangdong Jiangzhong Zhongshan , Guangzhou,Guan Expressway 15.00% Equity method Expressway Co., Guangdong gdong Management Ltd. Ganzhou kangda Gangzhou, Gangzhou, Expressway Expressway Co., 30.00% Equity method Jiangxi Jiangxi Management Ltd. Ganzhou Gankang Gangzhou, Gangzhou, Expressway 30.00% Equity method Expressway Co., Jiangxi Jiangxi Management Ltd. Guangdong Guangzhou, Guangzhou, Hande all kinds 20.00% Equity method 137 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Yueke Guangdong Guangdong of small loans Technology Petty Loan Co., Ltd. Notes to holding proportion of joint venture or associated enterprise different from voting proportion: Nil Basis of holding less than 20% of the voting rights but has a significant impact or holding 20% or more voting rights but does not have a significant impact: Guangdong, Jiangzhong Expressway Co., Ltd and Asian Kitchen & Bath City Co., Ltd.. holds 20% of the voting rights, but has the power to participate in making decisions on their financial and op erating decisions, and therefore deemed to be able to exert significant influence over the investee. (2) Main financial information of significant joint venture In RMB Year-end balance/ Amount of current period Year-beginning balance/ Amount of previous period Guangdong Guanghui Zhaoqing Yuezhao Guangdong Guanghui Zhaoqing Yuezhao Expressway Co., Ltd. Highway Co., Ltd. Expressway Co., Ltd. Highway Co., Ltd. Current assets 688,266,473.00 108,846,373.49 398,201,907.66 217,772,715.63 Including:Cash and cash 632,592,085.76 91,418,506.13 119,447,466.86 199,426,500.59 equivalent Non-current assets 4,249,285,664.54 1,723,857,530.48 4,288,934,082.82 1,780,232,314.01 Total assets 4,937,552,137.54 1,832,703,903.97 4,687,135,990.48 1,998,005,029.64 Current liabilities 394,585,555.48 131,636,738.67 330,054,720.57 178,262,191.50 Non-current liabilities 1,173,000,071.00 627,980,792.85 1,144,392,235.39 626,350,940.66 Total liabilities 1,567,585,626.48 759,617,531.52 1,474,446,955.96 804,613,132.16 Attributable to shareholders of the 3,369,966,511.06 1,073,086,372.45 3,212,689,034.52 1,193,391,897.48 parent company Share of net assets 1,010,989,953.32 268,271,593.11 963,806,710.36 298,347,974.37 calculated by stake Book value of equity investment in joint 1,010,989,953.32 268,271,593.11 963,806,710.36 298,347,974.37 ventures Operating income 856,966,099.09 247,342,570.61 812,080,255.90 291,189,867.43 Financial expenses 24,124,233.53 14,270,879.40 24,546,983.30 17,627,552.31 Income tax expenses 142,913,805.63 34,089,839.29 127,408,913.87 40,562,875.14 Net profit 427,632,054.17 100,385,189.33 381,440,117.48 126,554,442.44 138 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Total comprehensive 427,632,054.17 100,385,189.33 381,440,117.48 126,554,442.44 income Dividends received fromjoint ventures this 81,106,373.29 55,172,678.59 105,000,000.00 37,376,405.10 year Other notes 139 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (3) Main financial information of significant associated enterprise In RMB Year-end balance/ Amount of current period Year-beginning balance/ Amount of previous period Shenzhen Guangdong Ganzhou Shenzhen Guangdong Ganzhou Guangdong Yueke Guangdong Yueke Huiyan Jiangzhong Ganzhou Kangda Gankang Huiyan Jiangzhong Ganzhou Kangda Gankang Technology Petty Technology Petty Expressway Expressway Co., Expressway Expressway Co., Expressway Co., Expressway Co., Expressway Expressway Co., Loan Co., Ltd Loan Co., Ltd Co., Ltd. Ltd. Ltd. Ltd. Ltd. Ltd. Current assets 421,432,200.56 82,676,516.31 60,901,360.51 403,102,026.06 1,475,791,832.65 361,323,243.16 70,211,690.33 23,183,297.78 379,477,241.75 1,631,773,621.73 Non-current assets 148,133,020.62 1,815,515,502.50 1,526,047,687.53 1,460,261,506.40 40,444,328.46 160,643,504.53 1,923,663,451.58 1,549,188,958.89 1,487,207,118.19 40,580,700.27 Total assets 569,565,221.18 1,898,192,018.81 1,586,949,048.04 1,863,363,532.46 1,516,236,161.11 521,966,747.69 1,993,875,141.91 1,572,372,256.67 1,866,684,359.94 1,672,354,322.00 Current liabilities 33,414,635.29 99,369,473.85 52,035,306.87 111,203,826.38 143,606,180.96 34,660,293.62 512,668,986.06 68,710,800.33 118,070,797.51 336,978,730.26 Non-current 596,500,000.00 804,771,566.48 1,048,204,518.54 2,006,250.00 324,500,000.00 823,203,903.47 1,048,589,599.46 20,757.29 Liabilities Total liabilities 33,414,635.29 695,869,473.85 856,806,873.35 1,159,408,344.92 145,612,430.96 34,660,293.62 837,168,986.06 891,914,703.80 1,166,660,396.97 336,999,487.55 Minority Shareholders’ 293,892,793.89 292,531,920.59 Equity hareholders’ equity attributable to shareholders of 536,150,585.89 1,202,322,544.96 730,142,174.69 703,955,187.54 1,076,730,936.26 487,306,454.07 1,156,706,155.85 680,457,552.87 700,023,962.97 1,042,822,913.86 the parent company Pro rata share of th e net assets calcula 178,716,861.96 180,348,381.74 219,042,652.41 211,186,556.26 215,346,187.25 162,435,484.69 173,505,923.37 204,137,265.86 210,007,188.89 208,564,582.77 ted The book value of 178,716,861.96 180,348,381.74 219,042,652.41 211,186,556.26 215,346,187.25 162,435,484.69 173,505,923.37 204,137,265.86 210,007,188.89 208,564,582.77 140 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 equity investments in joint ventures Buinsess incme 111,790,599.41 230,951,536.63 124,080,732.78 71,517,295.42 82,267,976.87 106,414,977.95 205,492,811.90 118,131,984.73 81,660,482.24 46,518,656.73 Net profit 48,844,131.82 45,616,389.11 49,684,621.82 3,931,224.57 44,169,388.24 40,699,196.38 23,496,720.59 39,904,996.63 12,866,914.80 27,503,000.00 Total comprehensive 48,844,131.82 45,616,389.11 49,684,621.82 3,931,224.57 44,169,388.24 40,699,196.38 23,496,720.59 39,904,996.63 12,866,914.80 27,503,000.00 income Other notes The project amount for the balance sheet in the previous period is the timing indicator on December 31, 2016, and the project amount in the income statement is that from January to June, 2016. 141 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (4) Summary financial information of insignificant joint venture or associated enterprise Nil (5) Note to the significant restrictions of the ability of joint venture or associated enterprise transfer funds to the Company Nil (6)The excess loss of joint venture or associated enterprise Nil (7) The unrecognized commitment related to joint venture investment Nil (8) Contingent liabilities related to joint venture or associated enterprise investment Nil 4. Significant common operation Nil 5. Equity of structure entity not including in the scope of consolidated financial statements Notes: Nil 6.Other Nil X. Risks Related to Financial Instruments The major financial instruments of the company include monetary capital, accounts receivable and accounts payable. These financial instruments are primarily related to operating and financing. For the details of the financial instruments, please refer to the related projects in Notes 5. The risk relevant to these financial instruments and the risk management policy adopted by the company for reducing these risks are described as below: 1. Credit Risk The credit risk means that the party of the financial instrument fails to perform the obligations, and the risk of the financial loss is caused for the other party. The company is mainly facing the customer credit risk due to the credit sale. In order to reduce the credit risk, the company only makes transactions with the recognized and reputable customers, and carries out the continuous monitoring of accounts receivable through monitoring the credit of the existing customers and the aging analysis, in order to ensure the company not facing the risk of bad debts and control the overall credit risk within the controllable range. 2. Interest Rate Risk 142 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 The interest rate risk refers to the fluctuation risk appearing for the fair value of financial instruments or future cash flows due to the changes in market interest rate. The interest rate risk faced by the company is mainly from the bank borrowings. Through the establishment of good relations between banks and enterprises, the company makes the reasonable design of credit range, credit variety and credit limit to guarantee the sufficient credit range of the banks and meet the financing demands. Shortening the duration of single borrowings and especially stating the prepayment terms is to reasonably reduce the risk of the interest rate fluctuations. 3. Foreign Exchange Risk The foreign exchange risk refers to the fluctuation risk appearing for the fair value of financial instruments or future cash flows due to the changes in foreign exchange rate. The company matches the income and expenditure of foreign currency as far as possible in order to reduce the foreign exchange risk. During the reporting period, the company has little effect on the foreign exchange risk due to the short credit term of revenue and expenditure related to the foreign currency. 4. Liquidity Risk The liquidity risk means that the risk of the shortage of funds occurs when the settlement obligations by the delivery of the cash or other financial assets are fulfilled by the company. The policy of the company is to ensure the sufficient cash for repaying the matured debts. The liquidity risk is under the centralized control of Finance department of the company, and Finance department shall guarantee the company having the sufficient funds to repay the debts under any reasonable forecast through monitoring the cash balance, the marketable securities available to be cash and the rolling forecast for the cash flow of the next six months. 5. Other Price Risk The company holds the equity investment of other listed companies, and the management believes that these investments facing the market price risk is acceptable. For the equity investment of other listed companies held by the company, please refer to “Available-for-Sale Financial Assets in Article 8 of Consolidated Financial Statement in Notes 5 of Financial Statements”. XI. The disclosure of the fair value 1. Closing fair value of assets and liabilities calculated by fair value In RMB Closing fair value Items Fir value measurement Fir value measurement Fir value measurement Total items at level 1 items at level 2 items at level 3 I. Consistent fair value -- -- -- -- measurement (II)Available-for-sale Financial 952,782,523.20 952,782,523.20 Assets (2)Equity instrument investment 952,782,523.20 952,782,523.20 Total of Consistent fair value 952,782,523.20 952,782,523.20 measurement II.Non-continuous measurement fair -- -- -- -- 143 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 value 2. Market price recognition basis for consistent and inconsistent fair value measurement items at level 1. As at the end of the period, the company holds shares 235,254,944 shares of China Everbright Bank According to the closing price of June 30, 2017 of RMB 4.05, the final calculation of fair value was RMB952,782,523.20. 3. Valuation technique adopted and nature and amount determination of important parameters for consistent and inconsistent fair value measurement items at level 2. Nil 5. Sensitiveness analysis on unobservable parameters and adjustment information between opening and closing book value of consistent fair value measurement items at level 3. Nil 5. Sensitiveness analysis on unobservable parameters and adjustment information between opening and closing book value of consistent fair value measurement items at level 3. Nil 6. Explain the reason for conversion and the policy governing when the conversion happens if conversion happens among consistent fair value measurement items at different levels Nil 7. Changes in the valuation technique in the current period and the reason for change Nil 8. Fair value of financial assets and liabilities not measured at fair value Nil 9.Other Nil XII. Related parties and related-party transactions 1. Parent company information of the enterprise The parent company Name Registered address Nature Redistricted The parent company of the Company's 144 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 capital(RMB’0000) shareholding ratio of the Company’s vote ratio Equity management, No. 27, Guangdong traffic infrastructure communication Baiyun Road,Yuexiu construction and 26,800 million 24.55% 50.11% Group Co., Ltd District , railway project Guangzhou. operation Notes : Guangdong Communication Group Co., Ltd. is the largest shareholder of the Company. legal representative: Deng Xiaohua. Date of establishment: June 23, 2000. As of June 30, 2017,Registered capital: RMB 26.8 billion. It is a solely state-owned limited company. Business scope:equity management, organization of asset reorganization and optimized allocation, raising funds by means including mortgage, transfer of property rights and joint stock system transformation, project investment, operation and management, traffic infrastructure construction, highway and railway project operation and relevant industries, technological development, application, consultation and services, highway and railway passenger and cargo transport, ship industry, relevant overseas businesses (if the above mentioned business scope requires licenses to operate, then operation licenses are required). The finial control of the Company was State owned assets supervision and Administration Commission of Guangdong Provincial People's Government. Other notes: 2.Subsidiaries of the Company Subsidiaries of this enterprise, see Note IX the rights of other entity 3. Information on the joint ventures and associated enterprises of the Company The details Notes IX of significant joint venture and associated enterprise of the Company Information on other joint venture and associated enterprise of occurring related party transactions with the Company in reporting period, or form balance due to related party transactions in previous period: Nil 4. Other Related parties Name Relation with the Company Guangdong Changda highway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Maozhan Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Xinyue Traffic Investment Co., Ltd. Fully owned subsidiary of the parent company Guangdong Highway Construction Co., Ltd. Fully owned subsidiary of the parent company Guangdong East Thinking Management Technology Fully owned subsidiary of the parent company Development Co., Ltd. 145 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Name Relation with the Company Controlled by the same parent company and equity participation Jingzhu Expressway Guangzhu Section Co., Ltd. unit Guangdong Kaiyang Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Guangle Expressway Co.,Ltd. Fully owned subsidiary of the parent company Guangdong Guanghui Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Shenshan west Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Yangmao Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Yunwu Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Taishan Coastal Expressway Co., Ltd. Fully owned subsidiary of the parent company Yunfu Guangyun Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Yuzhan Expressway Co., Ltd. Fully owned subsidiary of the parent company Zhaoqing Guanghe Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong West coastal Expressway Taoshan Section Co., Fully owned subsidiary of the parent company Ltd. Guangdong West coastal Expressway Yangjiang Section Co., Fully owned subsidiary of the parent company Ltd. Guangdong Zhaoyang Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Zhanxu Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Baomao Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Boda Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Chaohui Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Guangfozhao Expressway Co., Ltd. Fully owned subsidiary of the parent company Controlled by the same parent company and equity participation Guangdong Guangzhu West Expressway Co., Ltd. unit Controlled by the same parent company and equity participation Guangdong Humen Bridge Co., Ltd. unit Guangdong Jiangzhong Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Litong Technology Investment Co., Ltd. Fully owned subsidiary of the parent company Guangdong West coastal Expressway Xinhui Section Co., Ltd. Fully owned subsidiary of the parent company Guangdong West coastal Expressway Zhuhai Section Co., Ltd. Fully owned subsidiary of the parent company Guangdong Yueyun Communication Co., Ltd. Fully owned subsidiary of the parent company Guang –Shen-Zhu Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Xinlu Adverting Co., Ltd. Fully owned subsidiary of the parent company Guangdong Tongyi Expressway Service Area Co., Ltd Fully owned subsidiary of the parent company 146 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Name Relation with the Company Guangdong Litong Real Estate Co., Ltd. Fully owned subsidiary of the parent company Guangdong Road & Bridge Construction Development Co., Ltd. Fully owned subsidiary of the parent company Guangdong Meihe Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Two Guang Expressway Co., Ltd. Fully owned subsidiary of the parent company Heyuan Helong Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Yuedong Expressway Industry Development Co., Fully owned subsidiary of the parent company Ltd. Guangdong Hehui Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Pingxing Expressway Co., Ltd. Fully owned subsidiary of the parent company Guangdong Gaoda Property Development Co., Ltd. Fully owned subsidiary of the parent company Other notes 5. List of related-party transactions (1)Information on acquisition of goods and reception of labor service Acquisition of goods and reception of labor service In RMB Content of related Amount of Amount of previous Over the trading Amount of last Related parties transaction limit or not? period current period period Guangdong Changda highway Project fund 4,238,698.53 5,106,838.40 Co., Ltd. Guangdong Expressway Co., Expansion 922,029.51 Ltd. management fee Calculate the Guangdong Maozhan weight of car 50,750.00 Expressway Co., Ltd. rental Guangdong Litong Technology Project fund 203,850.00 158,850.00 Investment Co., Ltd. Guangdong Xinyue Project fund 55,800.00 36,000.00 Communication Investment Co., Ltd. Guangdong Highway Interest 37,356,795.08 Construction Co., Ltd. Ganzhou Gankang Expressway Interest 1,051,109.99 1,180,876.67 147 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Content of related Amount of Amount of previous Over the trading Amount of last Related parties transaction limit or not? period current period period Co.,Ltd. Guangdong Changda highway Project fund 1,924,312.81 Co., Ltd. Guangdong Xinyue Communication Investment Co., Project fund 36,761.81 Ltd Guangdong East Thinking Management Technology Service 178,066.11 Development Co., Ltd. Guangdong Changda highway Project fund 634,217.37 338,293.60 Co., Ltd. Related transactions on sale goods and receiving services In RMB Amount of current period Amount of previous Related party Content period Jingzhu Expressway Guangzhu North section Co., Commission 7,852,830.20 8,190,490.55 Ltd. management fee Guangdong Expressway Co., Ltd. Project fund 2,094,489.63 2,062,650.00 Guangdong Kaiyang Expressway Co., Ltd. Project fund 235,922.47 224,035.68 Guangdong Guangle Expressway Co., Ltd. Project fund 200,943.40 Guangdong Guanghui Expressway Co., Ltd. Project fund 147,169.81 303,890.00 Guangdong Shenshan West Expressway Co., Ltd. Project fund 75,000.00 Guangdong Yangmao Expressway Co., Ltd. Project fund 51,000.00 Guangdong Maozhan Expressway Co., Ltd. Project fund 91,500.00 Guangdong Yunwu Expressway Co., Ltd. Project fund 108,962.26 66,000.00 Guangodng Taishan Coastal Expressway Co., Ltd. Project fund Guangyun Expressway Co., Ltd. Project fund 28,301.89 13,500.00 Guangdong Yuzhan Expressway Co., Ltd. Project fund 85,500.00 Zhaoqing Guangmao Expressway Co., Ltd. Project fund 53,773.58 Zhaoqing Yuezhao Highway Co., Ltd. Project fund 192,452.83 52,500.00 Guangdong West coastal Expressway Taishan Project fund 84,000.00 Section Co., Ltd. 148 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount of current period Amount of previous Related party Content period Guangdong West coastal Expressway Yangjiang Project fund 30,000.00 Section Co., Ltd. Guangdong Zhaoyang Expressway Co., Ltd. Project fund 60,000.00 Guangdong Zhanxu Expressway Co., Ltd. Project fund 91,500.00 Guangdong Baomao Expressway Co., Ltd. Project fund 90,000.00 Guangdong Boda Expressway Co., Ltd. Project fund 106,132.08 Guangdong Chaohui Expressway Co., Ltd. Project fund 192,452.83 Guangdong Guangfozhao Expressway Co., Ltd. Project fund 141,509.43 Guangdong Guangzhu west Expressway Co., Ltd. Project fund 449,056.61 Guangdong Humen Bridge Co., Ltd. Project fund 19,811.32 Guangdong Jiangzhong Expressway Co., Ltd. Project fund 83,490.57 Guangdong Litong Technology Investment Co., Project fund 95,000.00 Ltd. Guangdong West coastal Expressway Xinhui Project fund 7,075.47 Section Co., Ltd. Guangdong West coastal Expressway Zhuhai Project fund 107,547.17 Section Co., Ltd. Guangdong Xinyue Communication Investment Project fund 259,260.13 Co., Ltd Guangdong Yueyun Conunication Co., ltd. Project fund 51,415.10 Guang-Shen-Zhu Expressway Co., Ltd. Project fund 594,339.64 Shenzhen Huiyan Expressway Co., Ltd. Project fund 64,622.64 Notes (2)Related trusteeship/contract Nil (3)Information of related lease The Company was lessor: In RMB The lease income confirmed in The lease income confirmed in Name of lessee Category of lease assets this year last year Guangdong Xinlu Advertising Co., Ltd. Advertising lease 1,151,248.50 73,843.20 149 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Guangdong Tongyi Expressway Service Service Area Lease 1,689,033.25 1,857,376.40 Area Co., Ltd. The company was lessee: In RMB The lease income confirmed in Lessor Category of leased assets Category of leased assets this year Guangdong Litong Property Office space 4,900,613.34 4,410,552.00 Investment Co., Ltd Guangdong Guanghui Advertising column lease 696,800.00 Expressway Co., Ltd. Guangdong Highway Office space 109,182.36 77,631.84 Construction Co., Ltd. Notes (4)Related-party guarantee The Company was Guarantor Nil The Company was secured party In RMB Execution accomplished Guarantor Guarantee amount Start date End date or not Guangdong Communication Group 1,500,000,000.00 September 25,2012 July 25,2021 No Co., Ltd. Notes: Controlling shareholder Guangdong Communication Group Co., Ltd. accepted Pacific Asset Management Co., Ltd. insurance debt investment plan to provide joint liability guarantee of principal and interest in full and unconditional irrevocable. The company held Fokai Expressway Co., Ltd. 75% stake in Guangdong Communication Group Co., Ltd. to provide a counter-guarantee. (5) Inter-bank lending of capital of related parties Nil 150 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (6) Related party asset transfer and debt restructuring Nil (7) Rewards for the key management personnel In RMB Items Amount of current period Amount of previous period Rewards for the key management 2,058,400.00 1,908,000.00 (8) Other related-party transactions Items Amount of current period Amount of previous period Balance of Deposit Interest Income 1,864,277.66 Refer to deposit interest rate at the corresponding period of Bank of China Pricing Principle The Company's subsidiary, Jingzhu Expressway Guangzhu Section Co., Ltd. signed a cancellation agreement with Guangdong Communications Group Finance Co., Ltd. on June 29, 2016, and transferred out the balance of funds deposited with Guangdong Communications Group Finance Co., Ltd. - Approved by the “Reply on Approving Guangdong Provincial Expressway Development Co., Ltd Issue of Share and Cash to Buy Assets and Raise Matching Funds to Guangdong Provincial Expressway Co., Ltd. ”of CSRC’s Permission [2016] No.230, the Company purchased the creditor’s rights with RMB 987,903,684.98 in Jingzhu Expressway Guangzhu Section Co., Ltd. from Guangdong Provincial Expressway Co., Ltd. on June 2016 -On June 15, 2016,The company’s 29th meeting (Provisional) of the seventh board of directors was convened. The Proposal on Entrustment of Construction Management of the Renovation and Expansion Project of Sanbao-to-Shuikou Section of Shengyang-to-Haikou National Expressway was deliberated in the meeting, agreed that Guangdong Provincial Fokai Expressway Co., Ltd entrusts Guangdong Provincial Highway Construction Co., Ltd with the construction management of the renovation and expansion project of Sanbao-to-Shuikou Section of Shengyang-to-Haikou National Expressway, and handling the related matters of the entrustment of the construction management. 6. Receivables and payables of related parties (1)Receivables In RMB 151 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount at year end Amount at year beginning Name Related party Balance of Book Bad debt Provision Balance of Book Bad debt Provision Guangdong Xinyue Account receivable Communication Co., 4,025,036.61 90,962.37 5,333,036.61 Ltd. Guangdong Humen Account receivable 22,370,278.73 5,095,878.42 Bridge Co., Ltd. Jingzhu Expressway Account receivable Guangzhu Section 4,195,124.99 4,812,500.02 Co., Ltd. Guangdong Litong Account receivable Technology 100,177.00 813,200.00 Investment Co., Ltd. Guangdong West coastal Expressway Account receivable 298,194.00 18,419.40 259,194.00 18,419.40 Zhuhai Section Co., Ltd. Guangdong Kaiyang Account receivable Expressway Co., 420,449.97 4,425.00 178,414.29 Ltd. Guangdong Account receivable Expressway Co., 2,250,650.00 2,937.50 117,500.00 Ltd. Guangdong Account receivable Expressway Co., 41,610.00 3,411.00 50,610.00 3,411.00 Ltd. Guangdong Guanghui Account receivable 155,999.00 Expressway Co., Ltd. Guang-Shen-Zhu Account receivable Expressway Co., 189,000.00 Ltd. Guangdong Boda Account receivable Expressway Co., 112,500.00 Ltd. Guangdong Jiangzhong Account receivable 88,500.00 Expressway Co., Ltd. 152 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount at year end Amount at year beginning Name Related party Balance of Book Bad debt Provision Balance of Book Bad debt Provision Guangdong Yueyun Account receivable Communication Co., 21,500.00 Ltd. Guangdong Guangzhu West Account receivable 248,000.00 Expressway Co., Ltd. Guangdong Guangle Account receivable Expressway Co., 213,000.00 Ltd. Zhaoqing Yuezhao Account receivable 204,000.00 Highway Co., Ltd. Guangdong Chaohui Account receivable Expressway Co., 204,000.00 Ltd. Guangdong Guangfozhao Account receivable 150,000.00 Expressway Co., Ltd. Guangdong Yunwu Account receivable Expressway Co., 115,500.00 Ltd. Shenzhen Huiyan Account receivable Expressway Co., 68,500.00 Ltd. Zhaoqing Guanghe Account receivable Expressway Co., 57,000.00 Ltd. Yunfu Guangyun Account receivable Expressway Co., 30,000.00 Ltd. Guangdong Litong Prepayable account Property Investment 700,087.62 Co., Ltd. Zhaoqing Yuezhao Prepayable account 131,250.00 131,250.00 Highway Co., Ltd. Guangdong Tongyi Other Account 9,170,589.80 Expressway Service 153 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount at year end Amount at year beginning Name Related party Balance of Book Bad debt Provision Balance of Book Bad debt Provision receivable Area Co., ltd. Other Account Guangdong Xinlu 1,589,781.22 1,589,781.22 receivable Advertising Co., Ltd Guangdong Litong Other Account Property Investment 35,680.00 1,435,856.00 receivable Co., Ltd. Guangdong Other Account Guanghui 1,112,967.45 1,140,901.90 receivable Expressway Co., Ltd. Other Account Guangdong 656,754.05 821,759.56 receivable Expressway Co., ltd. Guangdong Other Account Expressway Co., ltd. 419,326.00 419,326.00 receivable Zhaoqing Guanghe Other Account Expressway Co., 163,620.63 202,257.23 receivable Ltd. Guangdong Xinyue Other Account Communication 168,562.60 168,562.60 receivable Investment Co., Ltd. Guang-Shen-Zhu Other Account Expressway Co., 121,280.00 146,737.75 receivable Ltd. Guangdong Kaiyang Other Account Expressway Co., 109,943.37 receivable Ltd. Guangdong Other Account Highway 76,563.00 84,575.88 receivable Construction Co., Ltd. Guangdong Jingzhu Other Account Expressway 55,694.00 55,694.00 receivable Guangzhu North Section Co., Ltd. Other Account Guangdong Guangle 4,832.00 51,029.05 receivable Expressway Co., 154 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount at year end Amount at year beginning Name Related party Balance of Book Bad debt Provision Balance of Book Bad debt Provision Ltd. Guangdong Boda Other Account Expressway Co., 45,480.00 45,735.46 receivable Ltd. Guangdong Other Account Yangmao 35,214.28 receivable Expressway Co., Ltd. Guangdong West Other Account Coastal Expressway 31,945.45 31,945.45 receivable Zhuhai section Co., Ltd. Guangdong Other Account Jiangzhong 19,708.00 20,607.68 receivable Expressway Co., Ltd. Guangdong Road & Other Account Bridge Construction 9,327.70 12,669.38 receivable Development Co., Ltd. Guangdong Other Account Maozhan 11,402.00 receivable Expressway Co., Ltd. Yunfu Guangyun Other Account Expressway Co., 9,269.17 receivable Ltd. Other Account Guangdong Humen 8,338.00 8,692.22 receivable Bridge Co., Ltd. Guangdong Yunwu Other Account Expressway Co., 6,811.45 receivable Ltd. Guangdong West Other Account Coastal Expressway 3,790.00 3,790.00 receivable Xinhui Section Co., Ltd. Other Account Guangdong Yueyun 3,032.00 3,032.00 receivable Communication Co., 155 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount at year end Amount at year beginning Name Related party Balance of Book Bad debt Provision Balance of Book Bad debt Provision Ltd. Guangdong Meihe Other Account Expressway Co., 1,780.00 receivable Ltd. Guangdong Two Other Account Guang Expressway 1,585.66 receivable Co., Ltd. Heyuan Helong Other Account Expressway Co., 1,180.74 receivable Ltd. Guangdong Yuedong Other Account Expressway Industry 367.45 receivable Development Co., Ltd. Guangdong Chaohui Other Account Expressway Co., 342.29 receivable Ltd. Guangdong Hehui Other Account Expressway Co., 188.53 receivable Ltd. Guangdong Other Account Zhaoyang 186.11 receivable Expressway Co., Ltd. Guangdong Pingxing Other Account Expressway Co., 111.05 receivable Ltd. Guangdong Other Account Guangzhu West 166,585.00 6,594.60 receivable Expressway Co., Ltd. Guangdong Gaoda Other Account Property 9,940.70 receivable Development Co., Ltd. Guangdong Changda Other Account Highway 7,748.00 receivable Engineering Co., 156 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount at year end Amount at year beginning Name Related party Balance of Book Bad debt Provision Balance of Book Bad debt Provision Ltd. Guangdong Litong Other Account Technology 5,273.00 receivable Investment Co., Ltd. Guangdong Changda Other Non-Current Highway 65,037.01 455,259.04 Assets Engineering Co., Ltd. Guangdong Xinyue Other Non-Current Communication 4,588.15 4,588.15 Assets Investment Co., Ltd (2)Payables In RMB Amount at year end Amount at year beginning Name Related party Guangdong Highway Construction Co., Account payable 75,980,021.00 133,928,111.00 Ltd. Guangdong Changda Highway Account payable 3,940,228.29 21,464,454.62 Engineering Co.,Ltd. Account payable Guangdong Expressway Co., Ltd. 8,746,491.18 8,746,491.18 Guangdong Xinyue Communication Account payable 3,478,650.65 4,342,684.85 Investment Co., Ltd uangdong Hualu communication Account payable 572,189.89 2,492,830.89 Technology Co., Ltd. Account payable Guangdong Lulutong Co., Ltd. 136,500.00 Account payable Zhaoqing Yuezhao Highway Co., Ltd. 19,500.00 Guangdong Litong Technology Account payable 158,850.00 Investment Co., Ltd. Interest payable Ganzhou Gankang Expressway Co., Ltd. 71,371.67 Guangdong Xinyue Communication Advances account 160,000.00 Investment Co., Ltd. Guangdong Changda Highway Other Payable account 12,050,680.14 42,399,234.18 Engineering Co.,Ltd. Guangdong Xinyue Communication Other Payable account 1,241,574.70 2,036,630.68 Investment Co., Ltd. 157 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount at year end Amount at year beginning Name Related party Guangdong Litong Technology Other Payable account 448,542.95 448,542.95 Investment Co., Ltd. Guangdong Hualu Communication Other Payable account 62,894.40 207,736.40 Technology Co., Ltd. Guangdong Hualu Communication Other Payable account 224,674.26 140,100.65 Technology Co., Ltd. Other Payable account Guangdong Xinlu Adverting Co., Ltd. 70,000.00 70,000.00 Other Payable account Guangdong Expressway Co., Ltd. 63,398.31 Guangdong Tongyi Expressway Service Other Payable account 120,000.00 20,000.00 Area Co., Ltd. Other Payable account Guangdong Lulutong Co., Ltd. 17,249.80 17,249.80 Guangdong Litong Information Other Payable account 16,376.20 16,376.20 Technology Investment Co., Ltd. Guangdong West Coastal Expressway Other Payable account 2,667.96 Co., Ltd. Guangdong Jingzhu Expressway Other Payable account 93,575.00 1,172.00 Guangzhu North Section Co., Ltd. Guangdong Baomao Expressway Co., Other Payable account 662.16 Ltd. Guangdong Jiangzhong Expressway Co., Other Payable account x 289.81 Ltd. Guangdong Road & Bridge Construction Other Payable account 270.72 Development Co., Ltd. Guangdong Highway Construction Co., Other Payable account 14,951.83 176.02 Ltd. Guangdong Shanfen Expressway Co., Other Payable account 110.35 Ltd. Non current liabilities due Ganzhou Gankang Expressway Co., Ltd. 50,000,000.00 within one year Non current liabilities due Subtotal 50,000,000.00 within one year 158 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 7. Related party commitment See XIV Commitments and Contingency XIII. Stock payment 1. The Stock payment overall situation □ Applicable √ Not applicable 2. The Stock payment settled by equity □ Applicable √ Not applicable 3. The Stock payment settled by cash □ Applicable √ Not applicable 4. Modification and termination of the stock payment Nil 5.Other XIV. Commitments 1. Significant commitments Significant commitments at balance sheet date (1)On June 15, 2016, the Company’s 29th meeting (Provisional) of the seventh board of directors was convened. In the meeting, the Proposal on Increasing Funding for Guangdong Fokai Expressway Co., Ltd pertaining to the Renovation and Expansion Project of Sanbao-to-Shuikou Section of Shengyang-to-Haikou National Expressway was examined and approved, agreed that based on the approved total investment amount by relevant government department, then the company’s subsidiary- Guangdong Fokai Expressway Co., Ltd carries out the investment and construction of the renovation and expansion project of Sanbao-to-Shuikou Section of Shengyang-to-Haikou National Expressway; the company increases funding for Guangdong Provincial Fokai Expressway Co., Ltd pertaining to the renovation and expansion project of Sanbao-to-Shuikou Section of Shengyang-to-Haikou National Expressway, with the contributed funds as a proportion of 35% of the total investment amount approved by relevant government department. The afore-said item had been examined and approved in the first extraordinary general shareholder meeting, The Company had received the approval of the National Development and Reform comission about the uandongProvincial Santbao-Shuikou Expressway Section Rebubuilding and Expansion Project(NO.187-2016-NDRC Infrastructure Document)from Guangdong Provincel Development and reform Commission On October 11, 2016, agreed with the implementation of the Guangdong Provincial Sanbao-Shuikou Expressway Section Rebuilding and Expansion Project. It’s estimated that the total investment of 159 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 this project is about RMB 3.513 billion(the static investment is about RMB 3.289 billion), of which the project capital is RMB 1.23 billion that accounts for 35% of the total investment and such amount of the project capital will be provided by Guangdong Provincial Fokai Expressway Co., Ltd, and the rest amount of RMB 2,283 billion will be solved by using bank loans. According to the "Official Reply to the preliminary design of reconstruction and extension project of Guangdong Sanbao to Shuikou Road by Ministry of Transport" (No.73-2017 Transport Road Document) issued by Guangdong Provincial Department of Transport, the Ministry of Transport checked and ratified that the general estimate of the preliminary design of reconstruction and extension project of Guangdong Sanbao to Shuikou Road is RMB 3.426 billion. As of June 30, 2017, The accumulated expenses occurred of Guangdong Fokai Expressway Co.,Ltd was RMB 559,681,300. ⑵On July 7, 2016, the Company’s 31st meeting (Provisional) of the seventh board of directors was convened. In the meeting, the Proposal on the Company’s Subscription of the Non-publicly Issued A-shares by Guoyuan Securities Co.,Ltd was examined and approved, agreed that the company shall not invest more than RMB 0.8 billion for the subscription of the non-publicly issued A-shares by Guoyuan Securities Co.,Ltd. The matter was examined and approved at the Third provisional shareholders' general meeting in 2016 on August 4, 2016. As of June 30,2017, the company has not yet invested. 2. Contingency (1) Significant contingency at balance sheet date This matter. did not occur in this accounting period. (2) The Company have no significant contingency to disclose, also should be stated There was no significant contingency in the Company. 3.Other XV. Enents after balance sheet date 1. Significant events had not adjusted The 8th session (temporary) of the 8th Board of Directors for the company is convoked in April 7, 2017, which deliberates and approves the Program on the Acquisition and Merger of Guangdong Fokai Expressway Co., Ltd. by Guangdong Expressway Development Co., Ltd., agrees on such company acquisition and merger of the wholly-owned subsidiary Guangdong Fokai Expressway Co., Ltd.; and authorizes the management team to handle all issues related to such acquisition and merger including but not limited to signing on the acquisition and merger agreement, handling of relevant assets and personnel transfer and handling of the industrial and commercial registration of changes, etc. Such authority is valid for the long term before completion of all relevant issues for the acquisition and merger. Such issue is already approved by the general meeting of shareholders in 2016. Until the end of the report date, the company has already established Fokai company as a subsidiary of Guangdong Expressway Development Co., Ltd. and received assets and business of Guangdong Fokai Expressway Co., Ltd. 160 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 2.Profit distribution Nil 3.Sales return Nil 4.Notes of other significant event after balance sheet date Nil l XVI.Other significant events 1.The accounting errors correction in previous period This matter. did not occur in this accounting period. During the reporting period. 2.Debt restructuring This matter. did not occur in this accounting period. During the reporting period. 3.Replacement of assets This matter. did not occur in this accounting period. During the reporting period. 4.Pension plan The company does not disclose the pension plan undisclosed matter should exist. 5.Discontinuing operation This matter. did not occur in this accounting period. During the reporting period,. 6. Segment information (1) Recognition basis and accounting policies of reportable segment The company's business for the Guangfo Expressway , the Fokai Expressway and Jingzhu Expressway Guangzhu Section toll collection and maintenance work, the technology industry and provide investment advice, no other nature of the business, no reportable segment. 2.Other important transactions and events have an impact on investors decision-making (1)The toll collection period of Jiujiang Bridge of No. 325 National Highway owned by Jiujiang Bridge 161 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Branch of Guangdong Fokai Expressway Co., Ltd., a controlled subsidiary of the Company, which was approved by Ministry of Communications, is 30 years. Up to the present, the accumulative toll collection period is 25 years. According to the Notice of Relevant Matters Concerning Quickening Special Clearing of Toll Highways in Guangdong Province (Yue Jiao Ming Dian (2013) No. 56 Document), the rectification measure proposed for Jiujiang Bridge is "toll collection period shall be no more than 20 years". The result of rectification is "toll collection shall be cancelled due to the expiration of toll collection period." As required by this document, Jiujiang Bridge will stop toll collection from 24:00 of June 30, 2013. Jiujiang Bridge is a construction project in which an enterprise under provincial administration invested. As for relevant problems occurred after rectification, the Provincial State-owned Assets Commission shall coordinate in handling such problems according to the requirements of the document. In view of the cancellation of tolls, the relevant assets on Jiujiang Bridge are neither owned or controlled by the company, nor brings any economic benefits to enterprise in future. According to the provision of Accounting Standards, the company has made disposal of the assets at the end of 2013, and the relevant losses have been recorded into the annual expenses outside of operation in 2013. In May 2014, the company received Guangdong Provincial People's Government Office documents on the opinions of the compensation for cancellation fee of Jiujiang Bridge as follow. The loss to the company resulted from the early cancellation of Jiujiang Bridge toll fee will be compensated by Guangdong Communication Group. The provincial SASAC conjunction with relevant units will examine the compensation amount base on Provincial Legal Office; work with Provincial Department of Finance to make the compensation arrangements for provincial government to approve. Approved by the Jiujiang Bridge early termination fee the amount of loss caused to 140,765,667.68 yuan, to be divided from 2015 included three years of state-owned capital management budget arrangements. In view of the recovery period is not yet clear, the company intends to recognized operating income when received. Fokai Expressway Co., Ltd. had received in advance of Jiujiang Bridge cancellation fees compensate for the loss of funds RMB 20 million, 60.77 million and 59.9957 million on August 7, 2015 , June 16, 2016 and June 29,2017, the extra operating income the company has confirmed. (2)June 15,2007 early in the morning, The 325 Jiujiang Bridge collapsed on # 23 pier for ―Nanguijii 035# collision owned by the controlling subsidiary of the company Guangdong Fokai Expressway Company leads the collapse and the traffic jam of 200 meters long of the Jiujiang Bridge. On June 10, 2009, Jiujiang Bridge opened to traffic has been restored. On June 19,2007, The Ministry of Communications, the State Production Safety Supervision and Administration Commission issued the JiaoAnWeiming File [2007] No. 8 "Notification on the Guangdong"6.15 "Jiujiang Bridge Collision Accident", initially determined the causes of the accident are: the incident ship suddenly met heavy fog on the way from Foshan Gaoming to Sunde, the captain neglected looking out, did not take proper measures and deviated from the main channel, touched the 325 National Road Jiujiang Bridge the non-navigation bridge pier and caused the collapsion of part of the Jiujiang bridge. The accident was an uNilateral responsibility of the ship. On July 19,2007,Fokai Company applied preservation of property to Guangzhou Maritime Court.On August 22,2007,Fokai Company officially prosecuted to Guangzhou Maritime Court, asking Foshan South Sea Shipping Company Limited and Yang Xiong to undertake the conpensation 25,587,684 yuan for the loss caused by 162 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 collapsion of Jiujiang Bridge. On August 28, 2007, Guangzhou Maritime Court accepted the case. According to the (2007)-Canton Haifa No. 332 ruling book issued by Guangzhou Maritime Court, the proceeding of the case was suspended. After the court accepted the case, the incident investigation team of Guangdong Provincial Government had not made the final report of Jiujiang Bridge accident. The Court, on November 5, 2007, decided to suspend the proceeding. In September 2008, Jiujiang Bridge accident investigation report was officially reported and resumed the proceedings. On December 5, 2008, Guangzhou Marine Court opened a court trial to procceeded the case. Currently, Guangzhou Haizhu prosecutorial office was intend to prosecute the accident captain Shi Guide, therefore, on January 5, 2009, Guangzhou Maritime Court ruled the suspension of the case. On September 17, 2013, the Guangzhou Maritime Court issued a notice of civil and eliminate the cause of suspension of proceedings, the court decided to resume the trial. On December 19, 2013, the Guangzhou Maritime Court opened a court session, has not yet made the first-instance judgment. On March 7, 2014 the Court made the first instance verdict: the defendant Foshan Nanhai Yuhang ship Services Co., Ltd. and Yang Xiong compensated the plaintiff Fokai Expressway Co., Ltd. toll revenue losses of RMB 19,357,500.96; the court dismissed the plaintiff other aspirations. The defendant appealed to the Higher People's Court of Guangdong Province, the Guangdong Provincial Higher People's Court ruled on June 5, 2014, the case discontinued proceedings. By the end of the report period, the abatement of action causes are already removed and the provincial higher court restores the hearing and conducts the investigation on April 21, 2017. (3)The 26th (Provisional)Meeting of the sixth board of directors of Guangdong Provincial Expressway Development Co., Ltd. was held of May 10, 2012. The meeting examined and adopted the proposal Concerning the Company’s Accepting the insurance Bond Investment Plan of Pacific Asset Management Co., Ltd. The Company was approved to accept the insurance bond investment plan made by Pacific Asset Management Co., Ltd. The amount of proceeds to be raised is not more than RMB 1.5 billion . Floating interest rate plus guaranteed base interest rate applies as the interest rate. The Floaing interest rate shall not exceed the basic interest rate of RMB loan with a term of over five years on the day when the investment fund of the insureance company is transferred into the Company’s account and the corresponding days of the future years, which shall be adjusted once each year. The guaranteed base interest rate is 5.6%. The concrete amount of raised proceeds shall be within maximum limit of investment fund filed with CIRC. The actual amount wholly transferred to the Company shall apply. The final interest rate is subject to investment Contract for Bond Investment Plan between Pacific and Guangdong Expressway Filed with CIRC. It was approved to authorize the management of the Company to implement the above-mentioned matters. The Company was approved to provide counter guarantee to Guangdong Communication Group Co.,Ltd.with 75% equity of Guangdong Fokai Expressway Co., Ltd. Held by it . as of December 31, 2016, the company has borrowed RMB 1.5 billion. ⑷In accordance with YWJMZZ [2001] No. 547 Reply about the Guangfo Expressway Co., Ltd. Capital Increase and Change into Chinese-Foreign Cooperative Enterprise and Others issued by Department of Foreign Trade and Economic Cooperation of Guangdong, the cooperation term for Guangfo will terminate on July 31, 2017. Guangdong People’s Government issued Guangdong People’s Government’s Reply on the Charging Period for Guangfo Expressway Reconstruction and Expansion Project (YFH [2016] No.156) on June 3, 2016, and agreed to approve that the charging period for Guangfo Expressway reconstruction and expansion project would be from the date completion and opening for traffic to December 7, 2021. In accordance with the Reply to Foreign Shareholders’ Proposal on Extending the Cooperation Period with Guangfo Expressway Co., Ltd. 163 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (YJJT[2017]No. 50) by Guangdong Traffic Group Co., Ltd. on April 7, 2017, it agrees on the cooperation period extent to December 7, 2019 of Guangfo Expressway Co., Ltd. subject to the existed shareholder’s structure. On June 27, 2017, Guangfo Expressway Co., Ltd. makes a resolution in the 9th Session of the 8th Board of Directors, which specifies the cooperation period extent to December 7, 2019 subject to the existed shareholder’s structure. Guangfo Expressway Co., Ltd. handles the industrial and commercial registration of changes on July 6, 2017 and the road property with the depreciation subject to the traffic flow is accrued sufficiently in February 2017. The cooperation period change of Guangfo Expressway Co., Ltd. has non influence on the company business performance. ⑸On February 5, 2016, 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 Development Co., Ltd(CSRC No.230-2016 Zheng Jian Xu ke) issued from CSRC; the company’s scheme on share-issuance for purchasing assets and raising matching funds had been examined and approved by the Audit Committee of CSRC on Verifying and Approving Mergers, Acquisitions and Restructuring of Listed Companies. The company has completed asset restructuring in June 2016. During the profit compensation period, in the case that the actual profits of the underlying company were less than the committed profits, respectively the counterparts of Guangdong Provincial Expressway Co., Ltd and Guangdong Provincial Highway Construction Co., Ltd shall assume the obligation of compensation for the profit difference according to their equity proportion of Guangdong Provincial Fokai Expressway Co., Ltd and Guangzhou Guangzhu Traffic Investment Management Co., Ltd. The profit compensation period is three years from 2016-2018. Agreed by the company and Guangdong Provincial Expressway Co., Ltd, the profits of Fokai Expressway Co., Ltd in year-2016, year-2017 and year-2018 by estimation shall accordingly be RMB 250.6973 million, RMB 260.0802 million and RMB 403.1197 million, with the aggregated non-recurring gains and losses were expected to be RMB 105.5743 million. During the compensation period, in the case that the cumulative net profits of Fokai Expressway Co., Ltd in a certain year realized at the end of the year are less than the estimated cumulative net profits of the year, the company will, at the price of RMB1.0 per share, buy-back the shares calculated in accordance with the agreement for the purpose of compensation and those shares will be written off, and if the amount of compensation exceeds the consideration of those shares being bought-back, Guangdong Provincial Expressway Co., Ltd will compensate that part in cash. At the expiration of the compensation period, if the accumulative actual non-recurring gains and losses (referring to the government’s compensation to Guangdong Provincial Fokai Expressway Co., Ltd due to the cancellation of toll charge of Jiujiang bridge, hereinafter shortly named as “Jiujiang Bridge Compensation”) of Fokai Expressway Co., Ltd were less than the estimated accumulative non-recurring gains and losses, Guangdong Provincial Expressway Co., Ltd will, upon the basis of the stake proportion held by G Fokai Expressway Co., Ltd before the major asset restructuring, compensate in cash to the company in accordance with the agreement; If it is after the expiration of the compensation period, every time when Fokai Expressway Co., Ltd received Jiujiang Bridge Compensation, the company should refund the corresponding part which had been paid by Guangdong Provincial Expressway Co., Ltd for the compensation in accordance with the agreement to Guangdong Provincial Expressway Co., Ltd within 30 working days started from the date G Fokai Expressway Co., Ltd received such compensation. Agreed by the company and Guangdong Provincial Highway Construction Co., Ltd, the profits of Guangzhou Guangzhu Traffic Investment Management Co., Ltd in year-2016, year-2017 and year-2018 by estimation shall accordingly be RMB 230.3606 million, RMB 263.2329 million and RMB 286.5018 million. During the compensation period, in the case that the cumulative net profits of Guangzhou Guangzhu Traffic Investment Management Co., Ltd realized at the end of the year are less than the estimated cumulative net profits 164 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 of the year, the company will, at the price of RMB1.0 per share, buy-back the shares held by Guangdong Provincial Highway Construction Co., Ltd with the quantity being calculated upon the agreement for compensation and those shares will be written off. Guangdong Fokai Expressway Co., Ltd. in 2016 the actual profit (excluding non-) by RMB 286.1655 million, more than the commitment to profit more than RMB 35.4682 million; Guangzhou Guangzhu Traffic Investment Management Co., Ltd. 2016 annual profit of RMB 271.7759 million, More than the commitment to profit more than RMB 41.4153 million. ⑹On July 15, 2016, the company received the writing notice from Yadong Fuxing Investment Co.,Ltd-one of the company’s shareholders. Yadong Fuxing had signed the Financing Agreement by Pledging A-shares of Guangdong Provincial Expressway Development Co.,Ltd with Guotai Junan Securities Co., Ltd, of which Yadong Fuxing pledged 202,429,000 shares that account for 9.68% of the company’s total share capital to Guotai Junan Securities Co., Ltd, which was mainly for the enterprise financing, with the pledge period started from July 13, 2016. As of the date this financial report was approved for disclosure, Yadong Fuxing Company holds 202,429,149 A-shares of the company that account for 9.68% of the company’s total share capital, of which 202,429, 000 shares-9.68% of the company’s total share capital were pledged, and the pledged shares account for 99.99993% of the total shares of the company held by Yadong Fuxing. 165 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 XVII..Notes s of main items in financial reports of parent company 1.Other account receivable (1)Other account receivable classified by category In RMB Year-end balance Year-beginning Book balance Provision for bad debts Book balance Provision for bad debts Classification Proporti Proporti Proportio Proportio Amount Proportio Proportion( Amount Amount Amount on(%) Amount Amount on(%) n(%) n(%) n(%) %) Other Account receivable with single major amount and withdrawal bad debt provision 32,084,893.35 79.89% 32,084,893.35 100.00% 32,084,893.35 89.20% 32,084,893.35 100.00% for single item Other Account receivable withdrawal bad debt provision by group of credit risk 8,077,335.07 20.11% 1,533,987.26 18.99% 6,543,347.81 3,884,252.50 10.80% 1,533,987.26 39.49% 2,350,265.24 characteristics Total 40,162,228.42 100.00% 33,618,880.61 83.71% 6,543,347.81 35,969,145.85 100.00% 33,618,880.61 93.47% 2,350,265.24 Other Receivable accounts with large amount individually and bad debt provisions were provided √Applicable □Not applicable In RMB Balance at year-end Name Other Provision for Proportion Reason receivable bad debts % Kunlun Securities 32,084,893.35 32,084,893.35 100.00% For the balance amount of our company’s secutity trading settlement funds RMB 33,683,774.79 deposited in Kunlun Securities Co., Ltd., The 166 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Co., Ltd. Xin’Ning Municipal intermediate People’s Court of Qinghai Province had made the judgment in accordance with the law and declared on November 11, 2006. that Kunlun Securities Co., ltd. was bankrupted for debt payment . In March of 2007, the liquidating group of Kunlun Securities preliminary judged the relationship between our company and Kunlun Securities Co., Ltd.is debtor creditor relationship . as Kunlun Securities Co., Ltd.was bankrupted for debt payment and it is in serious insolvency. Our company had moved the security trading settlement funds deposited in Kunlun Securities Co., Ltd, to other receivables account for reflection, we also have made full amount provision for had debts based on conservatism principle. The recovered debt amount in 2008 is RMB485,392.67 which had been offset from the provision for bad debts. The recovered debt amount in 2011 is RMB 667,959.27 which had been offset from the provision for bad, The recovered debt amount in 2014 is RMB 445,529.50 which had been offset from the provision for bad debts.debts. Total 32,084,893.35 32,084,893.35 -- -- 167 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision: √Applicable □Not applicable In RMB Balance at year-end Aging Other receivable Provision for bad debts Proportion% Subitem within 1 year Within 1 year 1,104,396.11 Subtotal within 1 year 1,104,396.11 1-2 years 10.00% 2-3 years 30.00% 3-4 years 50.00% 4-5 years 90.00% Over 5 years 1,533,987.26 1,533,987.26 100.00% Total 2,638,383.37 1,533,987.26 58.14% Notes Refer to "Notes 5 the financial statements of the important accounting policies and accounting estimates In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision: □ Applicable √ Not applicable In the groups, other accounts receivable adopting other methods to withdraw bad debt provision: √ Applicable □Not applicable Balance at year-end Name Other receivable Bad debt Proportion(%) Reason provision Beijing Shibang Weilishi Property Management 393,331.00 Deposit Services Co., Ltd. Guangdong Gaoda Property Development 9,940.70 Deposit Development Co., Ltd. Guangdong Litong Real estate Investment Co., 35,680.00 Deposit Ltd. Hunan Tendering Co., Ltd. 5,000,000.00 Guarantee Total 5,438,951.70 (2)Bad debt provision withdrawal, reversed or recovered in the report period Nil 168 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (3)Particulars of the actual verification of other accounts receivable during the reporting period Nil (4)Other receivables nature of fund classification information In RMB Nature Book balance at year end Book balance at year beginning Securities trading settlement funds balance 32,084,893.35 32,084,893.35 Guarantee deposit 5,438,951.70 1,829,187.00 Other 2,638,383.37 2,055,065.50 Total 40,162,228.42 35,969,145.85 (5)The top five other account receivable classified by debtor at period end In RMB Closing balance of Name Nature Closing balance Aging Proportion% bad debt provision Securities trading se Over 5 Kunlun Securities Co., Ltd. 32,084,893.35 79.88% 32,084,893.35 years ttlement funds Within 1 Hunan Tendering Co., Ltd. Deposit 5,000,000.00 12.45% year Heshan Communication Real Over 5 Current accounts 1,470,000.00 3.66% 1,470,000.00 estate Development Co., Ltd. years Beijing Shibang Weilishi Property Deposit 393,331.00 4-5 years 0.98% Managerment Servises Co., Ltd. Guangdong Xiangfeng Within 1 International Travel Service Co., Current accounts 147,289.00 0.37% year Ltd. Total -- 39,095,513.35 -- 97.34% 33,554,893.35 (6)Account receivable involving government subsidies Nil (7)Other account receivable derecognized due to the transfer of financial assets Nil 169 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (8)Amount of transfer other account receivable and assets and liabilities formed by its continuous involvement. Nil Other notes: 2. Long- term s equity investment In RMB Year-end balance Year-beginning balance Items Bad debt Bad debt Book balance Book value Book balance Book value provision provision Investment to the 5,165,162,219.66 5,165,162,219.66 5,165,162,219.66 5,165,162,219.66 subsidiary Investment to joint ventures and 2,283,902,186.05 2,283,902,186.05 2,220,805,130.31 2,220,805,130.31 associated enterprises Total 7,449,064,405.71 7,449,064,405.71 7,385,967,349.97 7,385,967,349.97 (1)Investment to the subsidiary In RMB Withdrawn Closing balance impairment Name Opening balance Increase Decrease Closing balance of impairment provision in the provision reporting period Guangfo Expressway Co., 154,982,475.25 154,982,475.25 ltd. Guangdong Expressway Technology 95,731,882.42 95,731,882.42 Investment Co., Ltd. Guangdong Fokai Expressway Co., 3,635,997,210.85 3,635,997,210.85 Ltd. Guangzhou Guangzhu Communication 859,345,204.26 859,345,204.26 Investment Management Co., 170 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Ltd. Jingzhu Expressway 419,105,446.88 419,105,446.88 Guangzhu Section Co., Ltd. Total 5,165,162,219.66 5,165,162,219.66 171 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (2)Investment to joint ventures and associated enterprises In RMB Increase /decrease in reporting period Closing Adjustme Withdraw balance Decrease nt of Add Other n of Name Opening balance d other Declaration of cash dividends Closing balance investmen Gain/loss of Investment equity impairme Other impairme investmen comprehe or profit t changes nt nt t nsive provision provision income I. Joint ventures Guangdong Guanghui 963,806,710.36 128,289,616.25 81,106,373.29 1,010,989,953.32 Expressway Co., Ltd. ZhaoqingYuezhao 298,347,974.37 25,096,297.33 55,172,678.59 268,271,593.11 Highway Co., Ltd. Subtotal 1,262,154,684.73 153,385,913.58 136,279,051.88 1,279,261,546.43 II. Associated enterprises ShenzhenHuiyan 162,435,484.69 16,281,377.27 178,716,861.96 Expressway Co., Ltd. Guangdong Jiangzhong 173,505,923.37 6,842,458.37 180,348,381.74 Expressway Co., Ltd. Ganzhou Kangda 204,137,265.86 14,905,386.55 219,042,652.41 Expressway Co., Ltd. Ganzhou Gankang 210,007,188.89 1,179,367.37 211,186,556.26 Expressway Co., Ltd. 172 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Guangdong Yueke Technology Petty Loan 208,564,582.77 6,781,604.48 215,346,187.25 Co., Ltd. Subtotal 958,650,445.58 45,990,194.04 1,004,640,639.62 Total 2,220,805,130.31 199,376,107.62 136,279,051.88 2,283,902,186.05 173 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 (3)Other notes 3. Business income and Business cost In RMB Amount of current period Amount of previous period Items Revenue Cost Revenue Cost Other business 38,224,276.41 232,106.70 10,505,002.81 232,106.70 Total 38,224,276.41 232,106.70 10,505,002.81 232,106.70 Other notes: 4.Investment income In RMB Items Amount of current period Amount of previous period Long-term equity investment income 707,304,426.29 30,798,695.03 accounted by cost method Long-term equity investment income 199,376,107.62 215,901,030.71 accounted by equity method Investment income received from holding of 24,054,256.82 45,697,711.66 available-for –sale financial assets Total 930,734,790.73 292,397,437.40 XVIII. Supplement information 1. Particulars about current non-recurring gains and loss √ Applicable □Not applicable In RMB Items Amount Notes Gains/losses from the disposal of -2,629,016.43 non-current asset It receives the compensation Other non-business income and expenditures 59,995,667.68 yuan for early termination 61,828,620.75 other than the above of charging for Jiujiang Bridge in the current period The department confirms the deferred income tax totaling 206,421,769.46 yuan Less :Influenced amount of income tax -191,689,368.44 for losses of previous years in the current period 174 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 Amount of influence of minority interests -25,439.34 Total 250,914,412.10 -- 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 2. Return on equity (ROE) and earnings per share (EPS) EPS(Yuan/share) Profit as of reporting period Weighted average ROE (%) EPS-basic EPS-diluted Net profit attributable to common 10.55% 0.43 0.43 shareholders of the Company Net profit attributable to common shareholders of the Company after 7.58% 0.31 0.31 deduction of non-recurring profit and loss 3. Differences between accounting data under domestic and overseas accounting standards (1) Differences of net profit and net assets disclosed in financial reports prepared under international and Chinese accounting standards □ Applicable √Not applicable (2) Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards □ Applicable √Not applicable (3) Explain reasons for the differences between accounting data under domestic and overseas accounting standards, for audit data adjusting differences had been foreign audited, should indicate the name of the foreign institutions Nil 4.Other Nil 175 Guangdong Provincial Expressway Development Co.., Ltd. The Semi-Annual Report 2017 XI. Documents available for inspection I. Financial Statements signed by and under the seal of the legal representative, chief accountant and accounting supervisors; II. All the manuscripts of the Company’s documents and announcements disclosed in the newspapers designated by China Securities Regulatory Commission. 176