THIRD QUARTER REPORT 2019 October 2019 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Part I Important Notes The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors, supervisors and senior manage ment of BOE Technology Group Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee the factuality, accuracy and completeness of the contents of this Report and its summary, and shall be jointly and severally liable for any misrepresentations, misleading statements or mate rial omissions therein. All the Company’s directors have attended the Board meeting for the review of this Report and its summary. Mr. Chen Yanshun, the Company’s legal representative, Mr. Liu Xiaodong, president of the Company’s Execution Committee (Chief Executive Officer), Ms. Sun Yun, the Company’s Chief Financial Officer, and Ms. Yang Xiaoping, head of the Company’s financial departme nt (equivalent to financial manager) hereby guarantee that the Financial Statements carried in this Report are factual, accurate and complete. This Report has been prepared in both Chinese and English. Should there be any discrepancies or misunderstandings between the two versions, the Chinese version shall prevail. 2 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Part II Key Corporate Information I Key Consolidated Financial Information Indicate by tick mark whether there is any retrospectively restated datum in the table below. √ Yes □ No Reasons for the retrospective restatements: Changes to the accounting policies. 31 December 2018 Change (%) Item 30 September 2019 Before Restated Restated Total assets (RMB) 324,400,678,094.00 304,028,491,385.00 304,028,491,385.00 6.70% Equity attributable to the listed 86,762,736,301.00 85,856,748,703.00 85,856,748,703.00 1.06% company’s shareholders (RM B) Item Q3 2019 YoY change (%) Q1-Q3 2019 YoY change (%) Operating revenue (RM B) 30,682,823,546.00 18.05% 85,722,032,233.00 23.40% Net profit attributable to the listed 183,791,110.00 -54.49% 1,852,239,559.00 -45.18% company’s shareholders (RM B) Net profit attributable to the listed company’s shareholders before -840,490,839.00 -332.16% -189,000,405.00 -110.13% exceptional items (RM B) Net cash generated from/used in -- -- 16,526,989,409.00 -10.37% operating activities (RM B) Basic earnings per share (RM B/share) 0.005 -58.33% 0.053 -45.36% Diluted earnings per share (RM B/share) 0.005 -58.33% 0.053 -45.36% Weighted average return on equity (%) 0.21% -55.32% 2.14% -45.41% Notes: In the 2018 Annual Report, the net profit attributable to the listed company’s shareholders before exceptional gains and losses was restated according to the audit results. According to the interpretations of the regulatory document CK [2018] No.15, government subsidies received, whether related to assets or income, shall be presented as cash generated from operating activities” in the cash flow statements. Above adjustment has no influence on total assets and equity attributable to the listed company ’s shareholders for the end of last year. Exceptional gains and losses: √ Applicable □ Not applicable Unit: RM B Item Q1-Q3 2019 Note Gain or loss on disposal of non-current assets (inclusive of impairment allowance write-offs) -10,469,354.00 N/A 3 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Tax rebates, reductions and exemptions with ultra vires approval or in lack of duly approved 0.00 N/A document Government subsidies charged to current profit and loss (exclusive of government subsidies given in the Company’s ordinary course of business at fixed quotas or amounts as per 1,433,252,399.00 N/A government’s uniform standards ) Capital occupation charges on non-financial enterprises that are charged to current gains and 0.00 N/A losses Income equal to the amount by which investment costs for the Company to obtain subsidiaries, associates and joint ventures are lower than the Company’s enjoyable fair value 0.00 N/A of identifiable net assets of investees when making investments Gains and losses on non-monetary asset swap 0.00 N/A Gains and losses on investment or asset management entrustments to other entities 0.00 N/A Allowance for asset impairments due to acts of God such as natural disasters 0.00 N/A Gains and losses on debt restructuring 0.00 N/A Restructuring costs in staff arrangement, integration, etc. 0.00 N/A Gains and losses on over-fair value amount as a result of transactions with distinctly unfair 0.00 N/A prices Current gains and losses on subsidiaries acquired through business mergers under same 0.00 N/A control from period-beginning to merger dates, net Gains and losses on contingencies that do not arise in the Company’s ordinary course of 0.00 N/A business Gain or loss on fair-value changes in trading financial assets and liabilities and derivative financial assets and liabilities & investment income from disposal of trading financial assets and liabilities and derivative financial assets and liabilities, and other creditors’ investment 86,944,711.00 N/A (exclusive of effective portion of hedges that arise in the Company’s ordinary course of business) Reversed portion of impairment allowance for accounts receivable and contract assets which 393,516.00 N/A are tested individually for impairment Gains and losses on loan entrustment 0.00 N/A Gains and losses on fair value changes in investment property of which subsequent 0.00 N/A measurement is carried out using fair value method Effects of all adjustments required by taxation, accounting and other applicable laws and 0.00 N/A regulations on current gains and losses Income from charges on entrusted management 0.00 N/A Non-operating income and expense other than above 63,888,377.00 N/A Other gains and losses that meet definition of nonrecurring gain/loss 795,126,980.00 N/A Less: Income tax effects 87,489,641.00 N/A Non-controlling interests effects (net of tax) 240,407,024.00 N/A 4 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Total 2,041,239,964.00 -- Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss Items: √Applicable □ Not applicable Item Amount Reason The Company undertook the transfer and share swap obligations for investments from non-controlling interests of the Company ’s subsidiary Hefei Xinsheng Optoelectronics Technology Co., Ltd. (hereinafter referred to as “Hefei Xinsheng”), which was recorded into financial liabilities as applicable accounting standards related to financial instruments. During the Reporting Period, the Company signed Other gains and losses that the Equity Transfer Agreement with Hefei Heping Investment Company Limited meet definition of 795,126,980.00 (hereinafter referred to as “Hefei Heping”), in which the Company was agreed to be nonrecurring gain/loss transferred the 15.3846% shares in Hefei Xinsheng h eld by Hefei Heping. Once upon completion of this transfer, Hefei Xinsheng will be a wholly -owned subsidiary of the Company. The difference of RM B795,126,980.00 between the cash payment and carrying financial liabilities was recorded into the current profit or loss as required by standards. II Total Numbe r of Shareholde rs and Holdings of Top 10 Shareholde rs at 30 September 2019 1. Numbers of Ordinary Shareholders and Preferred Shareholders with Resumed Voting Rights as well as Holdings of Top 10 Shareholders Unit: share Number of ordinary shareholders 1,434,390 (including 1,394,366 A-shareholders and 40,024 B-shareholders) Top 10 shareholders Shares in pledge or Shareholding Number of Restricted Name of shareholder Nature of shareholder frozen percentage shares shares Status Shares Beijing State-owned Capital State-owned legal 11.68% 4,063,333,333 0 N/A 0 Operation and M anagement Center person Chongqing Capital Opto-electronic State-owned legal 7.60% 2,643,863,541 0 N/A 0 Industry Investment Co., Ltd. person Hefei Jianxiang Investment Co., State-owned legal 7.21% 2,510,142,953 0 N/A 0 Ltd. person Beijing Yizhuang Investment State-owned legal 3.36% 1,168,209,006 0 N/A 0 Holdings Co., Ltd person Beijing BOE Investment & State-owned legal 2.36% 822,092,180 0 N/A 0 Development Co., Ltd. person 5 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Hong Kong Securities Clearing Foreign legal person 1.37% 477,597,769 0 N/A 0 Company Ltd. Beijing Electronics Holdings Co., State-owned legal 0.79% 273,735,583 0 N/A 0 Ltd. person Central Huijin Assets M anagement State-owned legal 0.71% 248,305,300 0 N/A 0 Co., Ltd person Domestic Xiamen Hengxing Group Co., Ltd. non-state-owned legal 0.47% 163,345,478 0 N/A 0 person Domestic China Securities Finance non-state-owned legal 0.38% 132,480,249 0 N/A 0 Corporation Limited person Top 10 unrestricted shareholders Shares by type Name of shareholder Unrestricted shares Type Shares Beijing State-owned Capital 4,063,333,333 RM B-denominated ordinary stock 4,063,333,333 Operation and M anagement Center Chongqing Capital Opto-electronic 2,643,863,541 RM B-denominated ordinary stock 2,643,863,541 Industry Investment Co., Ltd. Hefei Jianxiang Investment Co., 2,510,142,953 RM B-denominated ordinary stock 2,510,142,953 Ltd. Beijing Yizhuang Investment 1,168,209,006 RM B-denominated ordinary stock 1,168,209,006 Holdings Co., Ltd Beijing BOE Investment & 822,092,180 RM B-denominated ordinary stock 822,092,180 Development Co., Ltd. Hong Kong Securities Clearing 477,597,769 RM B-denominated ordinary stock 477,597,769 Company Ltd. Beijing Electronics Holdings Co., 273,735,583 RM B-denominated ordinary stock 273,735,583 Ltd. Central Huijin Assets M anagement 248,305,300 RM B-denominated ordinary stock 248,305,300 Co., Ltd Xiamen Hengxing Group Co., Ltd. 163,345,478 RM B-denominated ordinary stock 163,345,478 China Securities Finance 132,480,249 RM B-denominated ordinary stock 132,480,249 Corporation Limited 1. Beijing State-owned Capital Operation and M anagement Center held 100% equities of Beijing Electronics Holdings Co., Ltd. Related or acting-in-concert parties 2. Beijing Electronics Holdings Co., Ltd. held 66.25% equities of Beijing BOE Investment & among shareholders above Development Co., Ltd. and was its controlling shareholder. 3. After the non-public issuing of BOE in 2014, Hefei Jianxiang Investment Co., Ltd. and 6 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Chongqing Capital Opto-electronic Industry Investment Co., Ltd., by entering into Implementation Protocol of Voting Right respectively, agreed to maintain all of the shares held by them respectively unanimous with Beijing BOE Investment & Development Co., Ltd. when executing the voting rights of the shareholders. 4. After the non-public issuing of the Company in 2014, Beijing State-owned Capital Operation and M anagement Center handed over 70% of the shares directly held by it to Beijing Electronics Holdings Co., Ltd. for management through Stock M anagement Protocol, and Beijing Electronics Holdings Co., Ltd. gained the incidental shareholders’ rights except for disposing right and usufruct of the shares, of which the rest 30% voting right maintained unanimous with Beijing Electronics Holdings Co., Ltd. through the agreement according to Implementation Protocol of Voting Right. 5. Except for the above relationships, the Company does not know any other connected party or acting-in-concert party among the top 10 shareholders. The Company’s shareholder Beijing Yizhuang Investment Holdings Co., Ltd. decreased its Top 10 ordinary shareholders shareholding in the Company of 30,709,600 shares for involved in refinancing business. involved in securities margin The Company’s shareholder Xiamen Hengxing Group Co., Ltd. holds 42,926,898 shares trading through the securities margin trading account. Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company conducted any promissory repo during the Rep orting Period. □ Yes √ No No such cases in the Reporting Period. 2. Number of Preferred Shareholders and Shareholdings of Top 10 of Them □ Applicable √ Not applicable 7 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Part III Significant Events I Changes in Key Financial State ment Line Items and Explanation of why √ Applicable □ Not applicable 1. The Construction in progress as at 30 September 2019 rose 35% compared to 31 December 2018, primarily driven by increase with the progress of new projects in the Reporting Period. 2. Short-term borrowings as at 30 September 2019 rose 75% compared to 31 December 2018, primarily driven by optimization of debt structure and reduction of finance costs in the Reporting Period. 3. The current portion of non-current liabilities as at 30 Sep tember 2019 rose 88% compared to 31 December 2018, primarily driven by the transfer of the current portion of long-term borrowings into this item in the Reporting Period. 4. Bonds payable as at 30 September 2019 declined 96% compared to 31 December 2018, p rimarily driven by the advance cashing of corporate bonds in the Reporting period. 5. R&D expense went up 75% during the Reporting Period compared to the same period of last year, primarily driven by a higher amount of R&D investment in the Reporting Period. 6. Finance costs went down 38% during the Reporting Period compared to the same period of last year, primarily driven by reduction of finance costs arising from repayments of carrying convertible creditor’s rights by the Company during the Reporting Period. 7. Asset impairment loss went up 51% during the Reporting Period compared to the same period of last year, primarily driven by an increase in the inventory valuation allowance recorded in the Reporting Period according to the lower of cost and net realizable value. 8. Return on investment went down 71% during the Reporting Period compared to the same period of last year, primarily driven by a decrease in mature wealth management products in the Reporting Period. 9. Net cash generated from/used in financing activities went up 38% during the Reporting Period compared to the same period of last year, primarily driven by the putting in place of the project company ’s investment funds as the progress of the new project. II Progress, Influence and Solutions with regard to Significant Events √ Applicable □ Not applicable 1. The wholly-owned subsidiary, BOE Technology (Hong Kong) Co., Ltd., filed lawsuits to Beijing M unicipal Higher People's Court against following Defendants: Letv M obile Intelligent Information Technology (Beijing) Co., Ltd. (referred to as “Letv M obile hereinafter”) , TV Plus Holdings (Beijing) Limited, Leseil M obile Technology (Beijing) Co., Ltd. and Jia Yueting, with the total amount of claims being about US$41.84 million. Beijing M unicipal Higher People's Court issued Notice of Case Acceptance and Civil Ruling Paper for property preservation on 6 July 2017 and 31 July 2017 respectively. Letv M obile raised the jurisdiction objection to Beijing M unicipal Higher People's Court, which was rejected, and also instituted an appeal to the Supreme People's Court for verdict on jurisdiction objection. The final verdict of the Supreme People's Court is that the appeal of Letv M obile is rejected and the original verdict is maintained. On 8 M arch 2019, the case was first heard in the Beijing M unicipal Higher People’s Court and the next step for the Company is to wait for notice or judgment from the court . For receivables corresp onding to aforementioned amount of claims, the Company has counted provision for bad debts as per regulations in accounting standard accordingly; therefore, it has uncertain influences on the Company. 8 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Index to the related Summary of the significant event Disclosure date announcement Announcement on Signing Supplementary Agreement of Cooperation 8 September 2019 www.cninfo.com.cn Agreement on Life Science and Technology Industrial Base Project (II) Progress of any share repurchases: □ Applicable √ Not applicable Progress of any reduction of the repurchased shares through centralized bidding: □ Applicable √ Not applicable III Commitments that the Company’s Actual Controller, Shareholders, Related Parties, Acquirers, the Company Itself or Other Parties, Failed to Fulfill on Time during the Reporting Period □ Applicable √ Not applicable No such cases in the Reporting Period. 9 BOE Technology Group Co., Ltd. Third Quarter Report 2019 IV Securities Investments √ Applicable □ Not applicable Unit: RM B Gain/loss of Accumulative Purchased Sold in Variety Accounting changes in fair Gain/loss in Symbol of Name of Initial Beginning changes in fair in the the Ending Accounting Capital of measurement value in the Reporting security security investment cost carrying value value recorded Reporting Reporting carrying value title source security model Reporting Period into equities Period Period Period Domestic Other and TPV Fair value equity Self-owned HK00903 134,658,158.00 25,613,279.00 -24,470,177.00 -133,515,055.00 0.00 0.00 471,354.00 1,143,103.00 overseas Technology method instruments funds stock investment Domestic Other and Electronic Fair value equity Self-owned SH600658 90,160,428.00 83,995,943.00 56,125,880.00 49,961,395.00 0.00 0.00 1,883,379.00 140,121,823.00 overseas Zone method instruments funds stock investment Domestic Other and Bank of Fair value equity Self-owned HK01963 120,084,375.00 98,705,065.00 -4,000,184.00 -40,472,517.00 0.00 0.00 3,859,812.00 98,835,126.00 overseas Chongqing method instruments funds stock investment Domestic Other and China Fair value equity Self-owned HK06066 70,041,364.00 44,412,577.00 12,415,268.00 -12,468,379.00 0.00 0.00 2,044,411.00 58,945,138.00 overseas Securities method instruments funds stock investment Domestic New Fair value Other Self-owned HK01518 140,848,850.00 125,909,253.00 -72,588,144.00 -87,705,450.00 0.00 0.00 0.00 57,630,071.00 and Century method equity funds 10 BOE Technology Group Co., Ltd. Third Quarter Report 2019 overseas Healthcare instruments stock investment Other securities investments held 0.00 -- 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -- -- at the period-end Total 555,793,175.00 -- 378,636,117.00 -32,517,357.00 -224,200,006.00 0.00 0.00 8,258,956.00 356,675,261.00 -- -- Disclosure date of the announcement about the board’s N/A consent for the securities investment Disclosure date of the announcement about the general N/A meeting’s consent for the securities investment (if any) V Wealth Manage ment Entrustment √ Applicable □ Not applicable Unit: RM B’0,000 (in RM B ten thousand yuan) Type of wealth management Funding source Principal Outstanding amount before maturity Overdue amount Wealth management product purchased from bank and Self-funded 674,150 455,750 0 structural deposits total 674,150 455,750 0 High-risk wealth management entrustments with amounts that are individually significant, or with low security, low liquidity, or no protection of the principal: □ Applicable √ Not applicable Wealth management entrustments with possible impairments including an expectedly unrecoverable principal: □ Applicable √ Not applicable 11 BOE Technology Group Co., Ltd. Third Quarter Report 2019 VI Investments in Derivative Financial Instruments □ Applicable √ Not applicable No such cases in the Reporting Period. VII Communications with the Investment Community such as Researches, Inquiries and Inte rvie ws during the Reporting Period √ Applicable □ Not applicable Date Way of communication Type of communication party Index to main information communicated 24 July 2019 One-on-one meeting Institution 1. the main situations of the industry 27 August 2019 By phone Institution 2. main operating information of the 4 September 2019 One-on-one meeting Institution Company 12 September 2019 One-on-one meeting Institution 3. innovations of technology and products 25 September 2019 One-on-one meeting Institution 4. future strategy layout 25 September 2019 One-on-one meeting Institution For details, see www.cninfo.com.cn 26 September 2019 One-on-one meeting Individual VIII Irregularities in the Provision of Guarantees □ Applicable √ Not applicable No such cases in the Reporting Period. IX Occupation of the Company’s Capital by the Controlling Shareholder or Its Related Parties for Non-Operating Purposes □ Applicable √ Not applicable No such cases in the Reporting Period. 12 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Part IV Financial Statements I Financial Statements 1. Consolidated Balance Sheet Prepared by BOE Technology Group Co., Ltd. Unit: RM B Item 30 September 2019 31 December 2018 Current assets: M onetary capital 48,537,145,034.00 51,481,539,711.00 Settlement reserve 0.00 0.00 Interbank loans granted 0.00 0.00 Trading financial assets 3,868,390,729.00 0.00 Financial assets at fair value through profit or loss 0.00 0.00 Derivative financial assets 0.00 0.00 Notes receivable 178,506,526.00 656,781,577.00 Accounts receivable 20,394,423,858.00 19,880,680,518.00 Accounts receivable financing 0.00 0.00 Prepayments 1,150,697,091.00 770,633,448.00 Premiums receivable 0.00 0.00 Reinsurance receivables 0.00 0.00 Receivable reinsurance contract reserve 0.00 0.00 Other receivables 1,306,620,088.00 2,454,174,971.00 Including: Interests receivable 199,832,235.00 140,597,317.00 Dividends receivable 0.00 3,711,768.00 Financial assets purchased under resale agreements 0.00 0.00 Inventories 12,276,290,821.00 11,985,398,172.00 Contractual assets 0.00 0.00 Assets classified as held for sale 0.00 0.00 Current portion of non-current assets 0.00 0.00 Other current assets 9,932,441,785.00 12,463,073,779.00 Total current assets 97,644,515,932.00 99,692,282,176.00 Non-current assets: 13 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Loans and advances to customers 0.00 0.00 Investments in debt obligations 0.00 0.00 Available-for-sale financial assets 0.00 734,022,359.00 Investments in other debt obligations 0.00 0.00 Held-to-maturity investments 0.00 0.00 Long-term receivables 0.00 0.00 Long-term equity investments 2,533,559,094.00 2,389,166,886.00 Investments in other equity instruments 699,346,221.00 0.00 Other non-current financial assets 2,066,450.00 0.00 Investment property 1,251,323,201.00 1,283,867,651.00 Fixed assets 127,361,926,032.00 128,157,730,995.00 Construction in progress 76,098,791,074.00 56,423,354,887.00 Productive living assets 0.00 0.00 Oil and gas assets 0.00 0.00 Right-of-use assets 0.00 0.00 Intangible assets 6,961,496,297.00 5,937,679,394.00 R&D expense 0.00 0.00 Goodwill 904,370,509.00 904,370,509.00 Long-term prepaid expense 391,205,648.00 360,640,853.00 Deferred income tax assets 230,327,653.00 252,373,622.00 Other non-current assets 10,321,749,983.00 7,893,002,053.00 Total non-current assets 226,756,162,162.00 204,336,209,209.00 Total assets 324,400,678,094.00 304,028,491,385.00 Current liabilities: Short-term borrowings 9,510,291,178.00 5,449,954,885.00 Borrowings from central bank 0.00 0.00 Interbank loans obtained 0.00 0.00 Trading financial liabilities 0.00 0.00 Financial liabilities at fair value through profit or loss 0.00 0.00 Derivative financial liabilities 0.00 0.00 Notes payable 1,247,223,048.00 591,109,272.00 Accounts payable 19,207,745,420.00 22,213,956,616.00 Advances from customers 1,461,459,542.00 1,218,934,743.00 Contractual liabilities 0.00 0.00 14 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Financial assets sold under repurchase agreements 0.00 0.00 Customer deposits and interbank deposits 0.00 0.00 Payables for acting trading of securities 0.00 0.00 Payables for underwriting of securities 0.00 0.00 Payroll payable 1,582,501,516.00 2,224,931,171.00 Taxes payable 585,637,520.00 970,108,298.00 Other payables 27,455,003,339.00 22,956,979,828.00 Including: Interest payable 369,070,169.00 1,016,761,921.00 Dividends payable 8,051,171.00 23,648,778.00 Handling charges and commissions payable 0.00 0.00 Reinsurance payable 0.00 0.00 Liabilities directly associated with assets classified as held for sale 0.00 0.00 Current portion of non-current liabilities 10,509,608,124.00 5,597,563,204.00 Other current liabilities 1,241,583,180.00 1,004,557,061.00 Total current liabilities 72,801,052,867.00 62,228,095,078.00 Non-current liabilities: Insurance contract reserve 0.00 0.00 Long-term borrowings 109,410,456,896.00 94,780,077,864.00 Bonds payable 384,965,694.00 10,288,666,233.00 Including: Preferred shares 0.00 0.00 Perpetual bonds 0.00 0.00 Lease liabilities 0.00 0.00 Long-term payables 1,123,611,940.00 1,416,092,239.00 Long-term payroll payable 0.00 0.00 Provisions 16,457,010.00 16,457,010.00 Deferred income 2,352,999,803.00 2,187,558,533.00 Deferred income tax liabilities 1,515,592,979.00 1,419,373,545.00 Other non-current liabilities 7,705,969,476.00 11,334,873,322.00 Total non-current liabilities 122,510,053,798.00 121,443,098,746.00 Total liabilities 195,311,106,665.00 183,671,193,824.00 Owners’ equity: Share capital 34,798,398,763.00 34,798,398,763.00 Other equity instruments 0.00 0.00 Including: Preferred shares 0.00 0.00 15 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Perpetual bonds 0.00 0.00 Capital reserves 38,240,644,938.00 38,213,100,596.00 Less: Treasury stock 0.00 0.00 Other comprehensive income -255,541,230.00 -125,258,252.00 Special reserves 0.00 0.00 Surplus reserves 1,152,625,429.00 1,152,626,310.00 General reserve 0.00 0.00 Retained earnings 12,826,608,401.00 11,817,881,286.00 Total equity attributable to owners of the Company as the parent 86,762,736,301.00 85,856,748,703.00 Non-controlling interests 42,326,835,128.00 34,500,548,858.00 Total owners’ equity 129,089,571,429.00 120,357,297,561.00 Total liabilities and owners’ equity 324,400,678,094.00 304,028,491,385.00 Legal representative: Chen Yanshun President of the Company ’s Execution Committee: Liu Xiaodong Chief Financial Officer: Sun Yun Head of the Company’s Financial Department: Yang Xiaoping 2. Balance Sheet of the Company as the Parent Unit: RM B Item 30 September 2019 31 December 2018 Current assets: M onetary capital 1,382,345,299.00 3,829,814,050.00 Trading financial assets 0.00 0.00 Financial assets at fair value through profit or loss 0.00 0.00 Derivative financial assets 0.00 0.00 Notes receivable 0.00 1,500,000.00 Accounts receivable 1,141,481,714.00 36,952,623.00 Accounts receivable financing 0.00 0.00 Prepayments 66,494,516.00 25,020,734.00 Other receivables 3,273,800,460.00 2,015,828,460.00 Including: Interest receivable 11,375,624.00 9,659,279.00 Dividends receivable 10,404,147.00 14,115,915.00 Inventories 12,851,513.00 9,289,141.00 Contractual assets 0.00 0.00 Assets classified as held for sale 0.00 0.00 16 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Current portion of non-current assets 150,000,000.00 450,000,000.00 Other current assets 16,676,131.00 47,805,096.00 Total current assets 6,043,649,633.00 6,416,210,104.00 Non-current assets: Investments in debt obligations 0.00 0.00 Available-for-sale financial assets 0.00 128,297,254.00 Investments in other debt obligations 0.00 0.00 Held-to-maturity investments 0.00 0.00 Long-term receivables 0.00 0.00 Long-term equity investments 149,524,795,210.00 143,499,733,485.00 Investments in other equity instruments 159,952,958.00 0.00 Other non-current financial assets 0.00 0.00 Investment property 282,935,963.00 290,253,475.00 Fixed assets 946,496,644.00 969,371,352.00 Construction in progress 301,483,939.00 251,314,313.00 Productive living assets 0.00 0.00 Oil and gas assets 0.00 0.00 Right-of-use assets 0.00 0.00 Intangible assets 1,522,170,424.00 514,186,496.00 R&D expense 0.00 0.00 Goodwill 0.00 0.00 Long-term prepaid expense 107,306,817.00 99,701,797.00 Deferred income tax assets 224,671,813.00 290,794,548.00 Other non-current assets 82,216,747.00 284,243,667.00 Total non-current assets 153,152,030,515.00 146,327,896,387.00 Total assets 159,195,680,148.00 152,744,106,491.00 Current liabilities: Short-term borrowings 4,660,000,000.00 1,000,000,000.00 Trading financial liabilities 0.00 0.00 Financial liabilities at fair value through profit or loss 0.00 0.00 Derivative financial liabilities 0.00 0.00 Notes payable 0.00 0.00 Accounts payable 81,092,199.00 35,322,286.00 Advances from customers 1,427,418,603.00 1,577,035,515.00 17 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Contractual liabilities 0.00 0.00 Payroll payable 132,962,108.00 201,139,261.00 Taxes payable 39,814,864.00 250,558,556.00 Other payables 5,361,530,234.00 8,209,736,090.00 Including: Interest payable 252,600,302.00 330,964,989.00 Dividends payable 6,451,171.00 6,451,171.00 Liabilities directly associated with assets classified as held for sale 0.00 0.00 Current portion of non-current liabilities 2,263,400,000.00 2,590,000,000.00 Other current liabilities 15,060,807.00 0.00 Total current liabilities 13,981,278,815.00 13,863,791,708.00 Non-current liabilities: Long-term borrowings 33,237,742,361.00 26,520,000,000.00 Bonds payable 0.00 9,976,533,425.00 Including: Preferred shares 0.00 0.00 Perpetual bonds 0.00 0.00 Lease liabilities 0.00 0.00 Long-term payables 0.00 0.00 Long-term payroll payable 0.00 0.00 Provisions 0.00 0.00 Deferred income 4,848,876,487.00 5,523,949,841.00 Deferred income tax liabilities 0.00 0.00 Other non-current liabilities 29,897,240,829.00 20,954,104,125.00 Total non-current liabilities 67,983,859,677.00 62,974,587,391.00 Total liabilities 81,965,138,492.00 76,838,379,099.00 Owners’ equity: Share capital 34,798,398,763.00 34,798,398,763.00 Other equity instruments 0.00 0.00 Including: Preferred shares 0.00 0.00 Perpetual bonds 0.00 0.00 Capital reserves 37,599,121,411.00 37,590,966,191.00 Less: Treasury stock 0.00 0.00 Other comprehensive income -82,341,718.00 -28,507,585.00 Special reserves 0.00 0.00 Surplus reserves 1,152,625,429.00 1,152,626,310.00 18 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Retained earnings 3,762,737,771.00 2,392,243,713.00 Total owners’ equity 77,230,541,656.00 75,905,727,392.00 Total liabilities and owners’ equity 159,195,680,148.00 152,744,106,491.00 3. Consolidated Income Statement for Q3 Unit: RM B Item Q3 2019 Q3 2018 1. Revenue 30,682,823,546.00 25,990,508,323.00 Including: Operating revenue 30,682,823,546.00 25,990,508,323.00 Interest income 0.00 0.00 Premium income 0.00 0.00 Handling charge and commission income 0.00 0.00 2. Costs and expenses 31,097,785,874.00 25,699,006,841.00 Including: Cost of sales 27,057,692,052.00 21,245,420,721.00 Interest expense 0.00 0.00 Handling charge and commission expense 0.00 0.00 Surrenders 0.00 0.00 Net claims paid 0.00 0.00 Net amount provided as policy reserve 0.00 0.00 Expenditure on policy dividends 0.00 0.00 Reinsurance premium expense 0.00 0.00 Taxes and surcharges 214,937,325.00 200,057,483.00 Selling expense 631,659,702.00 751,560,070.00 Administrative expense 1,371,592,653.00 1,471,377,632.00 R&D expense 1,607,788,491.00 989,103,251.00 Finance costs 214,115,651.00 1,041,487,684.00 Including: Interest expense 64,529,664.00 852,142,227.00 Interest income 238,386,295.00 195,757,126.00 Add: Other income 274,484,937.00 357,114,751.00 Return on investment (“-” for loss) 62,422,694.00 91,641,762.00 Including: Share of profit or loss of joint ventures and 40,210,928.00 -2,412,689.00 associates Derecognition income of financial assets measured at 0.00 0.00 amortized cost 19 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Foreign exchange gain (“-” for loss) 0.00 0.00 Net gain on exposure hedges (“-” for loss) 0.00 0.00 Gain on changes in fair value (“-” for loss) 75,790,778.00 0.00 Credit impairment loss (“-” for loss) -811,324.00 0.00 Assets impairment loss (“-” for loss) -584,698,398.00 -325,305,398.00 Asset disposal income (“-” for loss) -599,481.00 -431,247.00 3. Operating profit (“-” for loss) -588,373,122.00 414,521,350.00 Add: Non-operating income 28,303,377.00 32,215,068.00 Less: Non-operating expense 18,339,210.00 25,909,519.00 4. Profit before tax (“-” for loss) -578,408,955.00 420,826,899.00 Less: Income tax expense 218,461,783.00 279,701,576.00 5. Net profit (“-” for net loss) -796,870,738.00 141,125,323.00 5.1 By operating continuity 5.1.1 Net profit from continuing operations (“-” for net loss) -796,870,738.00 141,125,323.00 5.1.2 Net profit from discontinued operations (“-” for net loss) 0.00 0.00 5.2 By ownership 5.2.1 Net profit attributable to owners of the Company as the 183,791,110.00 403,860,235.00 parent 5.2.2 Net profit attributable to non-controlling interests -980,661,848.00 -262,734,912.00 6. Other comprehensive income, net of tax 40,095,872.00 -19,565,137.00 Attributable to owners of the Company as the parent 27,776,614.00 -68,881,892.00 6.1 Items that will not be reclassified to profit or loss -23,120,769.00 0.00 6.1.1 Changes caused by remeasurements on defined benefit 0.00 0.00 pension schemes 6.1.2 Other comprehensive income that will not be reclassified 0.00 0.00 to profit or loss under the equity method 6.1.3 Changes in the fair value of investments in other equity -23,120,769.00 0.00 instruments 6.1.4 Changes in the fair value of the company’s credit risks 0.00 0.00 6.1.5 Other 0.00 0.00 6.2 Items that will be reclassified to profit or loss 50,897,383.00 -68,881,892.00 6.2.1 Other comprehensive income that will be reclassified to 0.00 0.00 profit or loss under the equity method 6.2.2 Changes in the fair value of investments in other debt 0.00 0.00 obligations 6.2.3 Gain/Loss on changes in the fair value of available-for-sale 0.00 -51,328,248.00 20 BOE Technology Group Co., Ltd. Third Quarter Report 2019 financial assets 6.2.4 Other comprehensive income arising from the 0.00 0.00 reclassification of financial assets 6.2.5 Gain/Loss arising from the reclassification of 0.00 0.00 held-to-maturity investments to available-for-sale financial assets 6.2.6 Allowance for credit impairments in investments in other 0.00 0.00 debt obligations 6.2.7 Reserve for cash flow hedges 0.00 0.00 6.2.8 Differences arising from the translation of foreign 50,897,383.00 -17,553,644.00 currency-denominated financial statements 6.2.9 Other 0.00 0.00 Attributable to non-controlling interests 12,319,258.00 49,316,755.00 7. Total comprehensive income -756,774,866.00 121,560,186.00 Attributable to owners of the Company as the parent 211,567,724.00 334,978,343.00 Attributable to non-controlling interests -968,342,590.00 -213,418,157.00 8. Earnings per share 8.1 Basic earnings per share 0.005 0.012 8.2 Diluted earnings per share 0.005 0.012 Where business combinations under common control occurred in the current period, the net profit achieved by the acquirees bef ore the combinations was RM B0.00, with the amount for the same period of last year being RM B0.00. Legal representative: Chen Yanshun President of the Company ’s Execution Committee: Liu Xiaodong Chief Financial Officer: Sun Yun Head of the Company’s Financial Department: Yang Xiaoping 4. Income Statement of the Company as the Parent for Q3 Unit: RM B Item Q3 2019 Q3 2018 1. Operating revenue 804,092,949.00 880,896,282.00 Less: Cost of sales 4,639,853.00 11,375,516.00 Taxes and surcharges 13,328,825.00 10,756,707.00 Selling expense 0.00 114,342.00 Administrative expense 177,461,557.00 208,556,956.00 R&D expense 562,250,371.00 333,106,008.00 Finance costs 247,532,655.00 287,967,713.00 Including: Interest expense 241,987,314.00 296,503,529.00 Interest income 6,493,528.00 10,680,666.00 21 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Add: Other income 234,796,640.00 230,746,114.00 Return on investment (“-” for loss) 40,393,087.00 -2,272,624.00 Including: Share of profit or loss of joint ventures and 40,210,928.00 -2,281,972.00 associates Derecognition income of financial assets measured at 0.00 0.00 amortized cost Net gain on exposure hedges (“-” for loss) 0.00 0.00 Gain on changes in fair value (“-” for loss) 0.00 0.00 Credit impairment loss (“-” for loss) 0.00 0.00 Assets impairment loss (“-” for loss) 0.00 0.00 Asset disposal income (“-” for loss) 0.00 0.00 2. Operating profit (“-” for loss) 74,069,415.00 257,492,530.00 Add: Non-operating income 127,852.00 1,026,267.00 Less: Non-operating expense 126,852.00 1,532,297.00 3. Profit before tax (“-” for loss) 74,070,415.00 256,986,500.00 Less: Income tax expense 20,460,727.00 30,344,396.00 4. Net profit (“-” for net loss) 53,609,688.00 226,642,104.00 4.1 Net profit from continuing operations (“-” for net loss) 53,609,688.00 226,642,104.00 4.2 Net profit from discontinued operations (“-” for net loss) 0.00 0.00 5. Other comprehensive income, net of tax 17,375,934.00 -4,076,480.00 5.1 Items that will not be reclassified to profit or loss 17,375,934.00 0.00 5.1.1 Changes caused by remeasurements on defined benefit 0.00 0.00 pension schemes 5.1.2 Other comprehensive income that will not be reclassified 0.00 0.00 to profit or loss under the equity method 5.1.3 Changes in the fair value of investments in other equity 17,375,934.00 0.00 instruments 5.1.4 Changes in the fair value of the company’s credit risks 0.00 0.00 5.1.5 Other 0.00 0.00 5.2 Items that will be reclassified to profit or loss 0.00 -4,076,480.00 5.2.1 Other comprehensive income that will be reclassified to 0.00 0.00 profit or loss under the equity method 5.2.2 Changes in the fair value of investments in other debt 0.00 0.00 obligations 5.2.3 Gain/Loss on changes in the fair value of available-for-sale 0.00 -4,076,480.00 financial assets 22 BOE Technology Group Co., Ltd. Third Quarter Report 2019 5.2.4 Other comprehensive income arising from the 0.00 0.00 reclassification of financial assets 5.2.5 Gain/Loss arising from the reclassification of 0.00 0.00 held-to-maturity investments to available-for-sale financial assets 5.2.6 Allowance for credit impairments in investments in other 0.00 0.00 debt obligations 5.2.7 Reserve for cash flow hedges 0.00 0.00 5.2.8 Differences arising from the translation of foreign 0.00 0.00 currency-denominated financial statements 5.2.9 Other 0.00 0.00 6. Total comprehensive income 70,985,622.00 222,565,624.00 7. Earnings per share 7.1 Basic earnings per share 0.0015 0.0065 7.2 Diluted earnings per share 0.0015 0.0065 5. Consolidated Income Statement for Q1~Q3 Unit: RM B Item Q1~Q3 2019 Q1~Q3 2018 1. Revenue 85,722,032,233.00 69,464,413,289.00 Including: Operating revenue 85,722,032,233.00 69,464,413,289.00 Interest income 0.00 0.00 Premium income 0.00 0.00 Handling charge and commission income 0.00 0.00 2. Operating costs and expenses 84,988,854,900.00 67,386,014,248.00 Including: Cost of sales 72,870,025,283.00 56,390,002,852.00 Interest expense 0.00 0.00 Handling charge and commission expense 0.00 0.00 Surrenders 0.00 0.00 Net claims paid 0.00 0.00 Net amount provided as policy reserve 0.00 0.00 Expenditure on policy dividends 0.00 0.00 Reinsurance premium expense 0.00 0.00 Taxes and surcharges 639,790,732.00 502,623,237.00 Selling expense 1,996,946,988.00 2,046,342,664.00 Administrative expense 3,568,776,147.00 3,615,086,182.00 23 BOE Technology Group Co., Ltd. Third Quarter Report 2019 R&D expense 4,532,446,727.00 2,589,297,974.00 Finance costs 1,380,869,023.00 2,242,661,339.00 Including: Interest expense 1,600,091,473.00 2,279,883,467.00 Interest income 637,209,152.00 541,745,812.00 Add: Other income 1,392,437,864.00 2,261,274,910.00 Investment income (“-” for loss) 75,988,065.00 258,565,775.00 Including: Share of profit or loss of joint ventures and 23,638,967.00 -31,991,268.00 associates Derecognition income of financial assets measured 0.00 0.00 at amortized cost Foreign exchange gain (“-” for loss) 0.00 0.00 Net gain on exposure hedges (“-” for loss) 0.00 0.00 Gain on changes in fair value (“-” for loss) 131,456,933.00 0.00 Credit impairment loss (“-” for loss) -21,041,769.00 0.00 Assets impairment loss (“-” for loss) -1,182,805,265.00 -783,454,658.00 Asset disposal income (“-” for loss) -225,802.00 -589,758.00 3. Operating profit (“-” for loss) 1,128,987,359.00 3,814,195,310.00 Add: Non-operating income 124,646,909.00 128,856,936.00 Less: Non-operating expense 30,187,550.00 33,563,330.00 4. Profit before tax (“-” for loss) 1,223,446,718.00 3,909,488,916.00 Less: Income tax expense 892,236,824.00 939,270,136.00 5. Net profit (“-” for net loss) 331,209,894.00 2,970,218,780.00 5.1 By operating continuity (“-” for net loss) 5.1.1 Net profit from continuing operations (“-” for net loss) 331,209,894.00 2,970,218,780.00 5.1.2 Net profit from discontinued operations (“-” for net loss) 0.00 0.00 5.2 By ownership 5.2.1 Net profit attributable to owners of the Company as the 1,852,239,559.00 3,379,066,735.00 parent 5.2 2. Net profit attributable to non-controlling interests -1,521,029,665.00 -408,847,955.00 6. Other comprehensive income, net of tax 88,992,377.00 -242,834,533.00 Attributable to owners of the Company as the parent 75,908,403.00 -307,168,409.00 6.1 Items that will not be reclassified to profit or loss -46,727,821.00 0.00 6.1.1 Changes in net liabilities or assets caused by 0.00 0.00 remeasurements on defined benefit pension schemes 6.1.2 Share of other comprehensive income of investees that will 0.00 0.00 24 BOE Technology Group Co., Ltd. Third Quarter Report 2019 not be reclassified to profit or loss under equity method 6.1.3 Changes in the fair value of investments in other equity -46,727,821.00 0.00 instruments 6.1.4 Changes in the fair value of the company’s credit risks 0.00 0.00 6.1.5 Other 0.00 0.00 6.2 Items that may subsequently be reclassified to profit or loss 122,636,224.00 -307,168,409.00 6.2.1 Share of other comprehensive income of investees that will 0.00 175,359,777.00 be reclassified to profit or loss under equity method 6.2.2 Changes in the fair value of investments in other debt 0.00 0.00 obligations 6.2.3 Gain/Loss on changes in fair value of available-for-sale -142,383,300.00 0.00 financial assets 6.2.4. Other comprehensive income arising from the 0.00 0.00 reclassification of financial assets 6.2.5 Gain/Loss arising from reclassification of held-to-maturity 0.00 0.00 investments to available-for-sale financial assets 6.2.6 Allowance for credit impairments in investments in other 0.00 0.00 debt obligations 6.2.7 Reserve for cash flow hedges 0.00 0.00 6.2.8 Differences arising from translation of foreign -164,785,109.00 -52,723,553.00 currency-denominated financial statements 6.2.9 Other 0.00 0.00 Attributable to non-controlling interests 13,083,974.00 64,333,876.00 7. Total comprehensive income 420,202,271.00 2,727,384,247.00 Attributable to owners of the Company as the parent 1,928,147,962.00 3,071,898,326.00 Attributable to non-controlling interests -1,507,945,691.00 -344,514,079.00 8. Earnings per share 8.1 Basic earnings per share 0.053 0.097 8.2 Diluted earnings per share 0.053 0.097 Where business combinations under common control occurred in the current period, the net profit achieved by the acquirees bef ore the combinations was RM B0.00, with the amount for the same period of last year being RM B0.00. Legal representative: Chen Yanshun President of the Company ’s Execution Committee: Liu Xiaodong Chief Financial Officer: Sun Yun Head of the Company’s Financial Department: Yang Xiaoping 6. Income Statement of the Company as the Parent for Q1~Q3 Unit: RM B 25 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Item Q1~Q3 2019 Q1~Q3 2018 1. Operating revenue 3,693,788,781.00 3,027,757,238.00 Less: Cost of sales 13,866,441.00 24,162,249.00 Taxes and surcharges 32,091,950.00 34,788,558.00 Selling expense 0.00 547,948.00 Administrative expense 480,568,050.00 535,278,413.00 R&D expense 1,496,046,336.00 826,657,662.00 Finance costs 737,047,649.00 666,905,601.00 Including: Interest expense 746,772,224.00 696,539,636.00 Interest income 24,854,626.00 31,590,749.00 Add: Other income 702,776,927.00 763,173,779.00 Investment income (“-” for loss) 832,587,366.00 882,196,406.00 Including: Share of profit or loss of joint ventures and 23,691,240.00 -19,884,534.00 associates Derecognition income of financial assets 0.00 0.00 measured at amortized cost Net gain on exposure hedges (“-” for loss) 0.00 0.00 Gain on changes in fair value (“-” for loss) 0.00 0.00 Credit impairment loss (“-” for loss) -7,044,401.00 0.00 Assets impairment loss (“-” for loss) 0.00 0.00 Asset disposal income (“-” for loss) 0.00 0.00 2. Operating profit (“-” for loss) 2,462,488,247.00 2,584,786,992.00 Add: Non-operating income 2,575,137.00 4,344,115.00 Less: Non-operating expense 975,890.00 2,108,640.00 3. Profit before tax (“-” for loss) 2,464,087,494.00 2,587,022,467.00 Less: Income tax expense 305,734,696.00 244,757,659.00 4. Net profit (“-” for net loss) 2,158,352,798.00 2,342,264,808.00 4.1 Net profit from continuing operations (“-” for net loss) 2,158,352,798.00 2,342,264,808.00 4.2 Net profit from discontinued operations (“-” for net loss) 0.00 0.00 5. Other comprehensive income, net of tax 202,267,125.00 -38,943,481.00 5.1 Items that will not be reclassified to profit or loss 26,907,348.00 0.00 5.1.1 Changes in net liabilities or assets caused by 0.00 0.00 remeasurements on defined benefit pension schemes 5.1.2 Share of other comprehensive income of investees that will 0.00 0.00 not be reclassified to profit or loss under equity method 26 BOE Technology Group Co., Ltd. Third Quarter Report 2019 5.1.3 Changes in the fair value of investments in other debt 26,907,348.00 0.00 obligations 5.1.4 Changes in the fair value of the company’s credit 0.00 0.00 risks 5.1.5 Other 0.00 0.00 5.2 Items that may subsequently be reclassified to profit or loss 175,359,777.00 -38,943,481.00 5.2.1 Share of other comprehensive income of investees that will 175,359,777.00 0.00 be reclassified to profit or loss under equity method 5.2.2 Changes in the fair value of investments in other debt 0.00 0.00 obligations 5.2.3 Gain/Loss on changes in fair value of available-for-sale 0.00 -38,943,481.00 financial assets 5.2.4 Other comprehensive income arising from the 0.00 0.00 reclassification of financial assets 5.2.5 Gain/Loss arising from reclassification of held-to-maturity 0.00 0.00 investments to available-for-sale financial assets 5.2.6 Allowance for credit impairments in investments in other 0.00 0.00 debt obligations 5.2.7 Reserve for cash flow hedges 0.00 0.00 5.2.8 Differences arising from translation of foreign 0.00 0.00 currency-denominated financial statements 5.2.9 Other 0.00 0.00 6. Total comprehensive income 2,360,619,923.00 2,303,321,327.00 7. Earnings per share 7.1 Basic earnings per share 0.0620 0.0673 7.2 Diluted earnings per share 0.0620 0.0673 7. Consolidated Cash Flow Statement for Q1~Q3 Unit: RM B Item Q1~Q3 2019 Q1~Q3 2018 1. Cash flows from operating activities: Proceeds from sale of commodities and rendering of services 90,795,247,871.00 60,772,530,957.00 Net increase in customer deposits and interbank deposits 0.00 0.00 Net increase in borrowings from central bank 0.00 0.00 Net increase in loans from other financial institutions 0.00 0.00 Premiums received on original insurance contracts 0.00 0.00 27 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Net proceeds from reinsurance 0.00 0.00 Net increase in deposits and investments of policy holders 0.00 0.00 Interest, handling charges and commissions received 0.00 0.00 Net increase in interbank loans obtained 0.00 0.00 Net increase in proceeds from repurchase transactions 0.00 0.00 Net proceeds from acting trading of securities 0.00 0.00 Tax rebates 5,540,874,958.00 6,005,591,808.00 Cash generated from other operating activities 5,004,310,777.00 4,658,687,543.00 Subtotal of cash generated from operating activities 101,340,433,606.00 71,436,810,308.00 Payments for commodities and services 68,399,418,986.00 38,239,152,251.00 Net increase in loans and advances to customers 0.00 0.00 Net increase in deposits in central bank and in interbank loans 0.00 0.00 granted Payments for claims on original insurance contracts 0.00 0.00 Net increase in interbank loans granted 0.00 0.00 Interest, handling charges and commissions paid 0.00 0.00 Policy dividends paid 0.00 0.00 Cash paid to and for employees 8,056,691,079.00 7,486,983,925.00 Taxes paid 2,790,851,592.00 2,335,162,753.00 Cash used in other operating activities 5,566,482,540.00 4,935,757,639.00 Subtotal of cash used in operating activities 84,813,444,197.00 52,997,056,568.00 Net cash generated from/used in operating activities 16,526,989,409.00 18,439,753,740.00 2. Cash flows from investing activities: Proceeds from disinvestment 26,937,918,625.00 56,395,382,400.00 Return on investment 341,466,867.00 640,439,103.00 Net proceeds from the disposal of fixed assets, intangible assets 33,905,351.00 24,665,452.00 and other long-lived assets Net proceeds from the disposal of subsidiaries and other business 0.00 0.00 units Cash generated from other investing activities 1,110,244,320.00 3,274,861,792.00 Subtotal of cash generated from investing activities 28,423,535,163.00 60,335,348,747.00 Payments for the acquisition of fixed assets, intangible assets and 37,854,619,360.00 37,753,522,657.00 other long-lived assets Payments for investments 24,285,645,875.00 54,265,549,688.00 Net increase in pledged loans granted 0.00 0.00 28 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Net payments for the acquisition of subsidiaries and other business 0.00 0.00 units Cash used in other investing activities 81,359,067.00 505,424,898.00 Subtotal of cash used in investing activities 62,221,624,302.00 92,524,497,243.00 Net cash generated from/used in investing activities -33,798,089,139.00 -32,189,148,496.00 3. Cash flows from financing activities: Capital contributions received 9,396,220,000.00 4,212,024,400.00 Including: Capital contributions by non-controlling interests to 9,396,220,000.00 4,212,024,400.00 subsidiaries Borrowings obtained 37,923,426,290.00 28,080,875,769.00 Cash generated from other financing activities 357,634,475.00 1,831,147,947.00 Subtotal of cash generated from financing activities 47,677,280,765.00 34,124,048,116.00 Repayments of borrowings 25,867,488,701.00 16,354,302,160.00 Payments for interest and dividends 5,442,071,700.00 5,874,569,087.00 Including: Dividends paid by subsidiaries to non-controlling 36,394,420.00 0.00 interests Cash used in other financing activities 259,564,952.00 213,480,875.00 Subtotal of cash used in financing activities 31,569,125,353.00 22,442,352,122.00 Net cash generated from/used in financing activities 16,108,155,412.00 11,681,695,994.00 4. Effect of foreign exchange rate changes on cash and cash 457,359,826.00 827,974,389.00 equivalents 5. Net increase in cash and cash equivalents -705,584,492.00 -1,239,724,373.00 Add: Cash and cash equivalents, beginning of the period 43,350,696,520.00 47,913,287,583.00 6. Cash and cash equivalents, end of the period 42,645,112,028.00 46,673,563,210.00 8. Cash Flow Statement of the Company as the Parent for Q1~Q3 Unit: RM B Item Q1~Q3 2019 Q1~Q3 2018 1. Cash flows from operating activities: Proceeds from sale of commodities and rendering of services 3,672,204,949.00 3,396,625,349.00 Tax rebates 0.00 25,803,518.00 Cash generated from other operating activities 348,439,553.00 624,672,967.00 Subtotal of cash generated from operating activities 4,020,644,502.00 4,047,101,834.00 Payments for commodities and services 2,417,299,531.00 398,673,820.00 Cash paid to and for employees 911,369,102.00 699,458,250.00 29 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Taxes paid 662,913,180.00 367,901,747.00 Cash used in other operating activities 430,459,939.00 234,107,331.00 Subtotal of cash used in operating activities 4,422,041,752.00 1,700,141,148.00 Net cash generated from/used in operating activities -401,397,250.00 2,346,960,686.00 2. Cash flows from investing activities: Proceeds from disinvestment 366,360,000.00 506,160,000.00 Return on investment 638,155,513.00 785,144,132.00 Net proceeds from the disposal of fixed assets, intangible assets 740.00 232,676.00 and other long-lived assets Net proceeds from the disposal of subsidiaries and other business 0.00 0.00 units Cash generated from other investing activities 568,637,974.00 3,516,832,697.00 Subtotal of cash generated from investing activities 1,573,154,227.00 4,808,369,505.00 Payments for the acquisition of fixed assets, intangible assets and 986,386,306.00 221,434,709.00 other long-lived assets Payments for investments 6,011,944,700.00 18,757,457,360.00 Net payments for the acquisition of subsidiaries and other business 0.00 0.00 units Cash used in other investing activities 2,317,224,712.00 200,000,400.00 Subtotal of cash used in investing activities 9,315,555,718.00 19,178,892,469.00 Net cash generated from/used in investing activities -7,742,401,491.00 -14,370,522,964.00 3. Cash flows from financing activities: Capital contributions received 0.00 0.00 Borrowings obtained 15,791,142,361.00 10,367,000,000.00 Cash generated from other financing activities 9,161,162,232.00 16,993,246,939.00 Subtotal of cash generated from financing activities 24,952,304,593.00 27,360,246,939.00 Repayments of borrowings 14,143,195,075.00 3,932,732,992.00 Payments for interest and dividends 1,912,890,527.00 2,255,848,689.00 Cash used in other financing activities 3,201,796,768.00 7,500,000,000.00 Subtotal of cash used in financing activities 19,257,882,370.00 13,688,581,681.00 Net cash generated from/used in financing activities 5,694,422,223.00 13,671,665,258.00 4. Effect of foreign exchange rate changes on cash and cash 1,907,767.00 98,891,103.00 equivalents 5. Net increase in cash and cash equivalents -2,447,468,751.00 1,746,994,083.00 Add: Cash and cash equivalents, beginning of the period 3,829,814,050.00 2,990,801,501.00 30 BOE Technology Group Co., Ltd. Third Quarter Report 2019 6. Cash and cash equivalents, end of the period 1,382,345,299.00 4,737,795,584.00 II Adjustments to the Financial Statements 1. Adjustments to the Financial Statements at the Beginning of the Execution of any New Standards Governing Financial Instruments, Revenue or Leases from 2019 √ Applicable □ Not applicable Consolidated Balance Sheet Unit: RM B Item 31 December 2018 1 January 2019 Adjusted Current assets: M onetary capital 51,481,539,711.00 51,481,539,711.00 0.00 Settlement reserve 0.00 0.00 0.00 Interbank loans granted 0.00 0.00 0.00 Trading financial assets 0.00 5,534,413,566.00 5,534,413,566.00 Financial assets at fair value through profit 0.00 0.00 0.00 or loss Derivative financial assets 0.00 0.00 0.00 Notes receivable 656,781,577.00 656,781,577.00 0.00 Accounts receivable 19,880,680,518.00 19,874,667,809.00 -6,012,709.00 Accounts receivable financing 0.00 0.00 0.00 Prepayments 770,633,448.00 770,633,448.00 0.00 Premiums receivable 0.00 0.00 0.00 Reinsurance receivables 0.00 0.00 0.00 Receivable reinsurance contract reserve 0.00 0.00 0.00 Other receivables 2,454,174,971.00 2,453,289,708.00 -885,263.00 Including: Interest receivable 140,597,317.00 140,597,317.00 0.00 Dividends receivable 3,711,768.00 3,711,768.00 0.00 Financial assets purchased under resale 0.00 0.00 0.00 agreements Inventories 11,985,398,172.00 11,985,398,172.00 0.00 Contractual assets 0.00 0.00 0.00 Assets classified as held for sale 0.00 0.00 0.00 Current portion of non-current assets 0.00 0.00 0.00 Other current assets 12,463,073,779.00 6,928,660,213.00 -5,534,413,566.00 31 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Total current assets 99,692,282,176.00 99,685,384,204.00 -6,897,972.00 Non-current assets: Loans and advances to customers 0.00 0.00 0.00 Investments in debt obligations 0.00 0.00 0.00 Available-for-sale financial assets 734,022,359.00 0.00 -734,022,359.00 Investments in other debt obligations 0.00 0.00 0.00 Held-to-maturity investments 0.00 0.00 0.00 Long-term receivables 0.00 0.00 0.00 Long-term equity investments 2,389,166,886.00 2,389,166,886.00 0.00 Investments in other equity instruments 0.00 721,155,927.00 721,155,927.00 Other non-current financial assets 0.00 12,866,432.00 12,866,432.00 Investment property 1,283,867,651.00 1,283,867,651.00 0.00 Fixed assets 128,157,730,995.00 128,157,730,995.00 0.00 Construction in progress 56,423,354,887.00 56,423,354,887.00 0.00 Productive living assets 0.00 0.00 0.00 Oil and gas assets 0.00 0.00 0.00 Right-of-use assets 0.00 0.00 0.00 Intangible assets 5,937,679,394.00 5,937,679,394.00 0.00 R&D expense 0.00 0.00 0.00 Goodwill 904,370,509.00 904,370,509.00 0.00 Long-term prepaid expense 360,640,853.00 360,640,853.00 0.00 Deferred income tax assets 252,373,622.00 252,373,622.00 0.00 Other non-current assets 7,893,002,053.00 7,893,002,053.00 0.00 Total non-current assets 204,336,209,209.00 204,336,209,209.00 0.00 Total assets 304,028,491,385.00 304,021,593,413.00 -6,897,972.00 Current liabilities: Short-term borrowings 5,449,954,885.00 5,449,954,885.00 0.00 Borrowings from central bank 0.00 0.00 0.00 Interbank loans obtained 0.00 0.00 0.00 Trading financial liabilities 0.00 0.00 0.00 Financial liabilities at fair value through 0.00 0.00 0.00 profit or loss Derivative financial liabilities 0.00 0.00 0.00 Notes payable 591,109,272.00 591,109,272.00 0.00 32 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Accounts payable 22,213,956,616.00 22,213,956,616.00 0.00 Advances from customers 1,218,934,743.00 1,218,934,743.00 0.00 Contractual liabilities 0.00 0.00 0.00 Financial assets sold under repurchase 0.00 0.00 0.00 agreements Customer deposits and interbank deposits 0.00 0.00 0.00 Payables for acting trading of securities 0.00 0.00 0.00 Payables for underwriting of securities 0.00 0.00 0.00 Payroll payable 2,224,931,171.00 2,224,931,171.00 0.00 Taxes payable 970,108,298.00 970,108,298.00 0.00 Other payables 22,956,979,828.00 22,956,979,828.00 0.00 Including: Interest payable 1,016,761,921.00 1,016,761,921.00 0.00 Dividends payable 23,648,778.00 23,648,778.00 0.00 Handling charges and commissions payable 0.00 0.00 0.00 Reinsurance payables 0.00 0.00 0.00 Liabilities directly associated with assets 0.00 0.00 0.00 classified as held for sale Current portion of non-current liabilities 5,597,563,204.00 5,597,563,204.00 0.00 Other current liabilities 1,004,557,061.00 1,004,557,061.00 0.00 Total current liabilities 62,228,095,078.00 62,228,095,078.00 0.00 Non-current liabilities: Insurance contract reserve 0.00 0.00 0.00 Long-term borrowings 94,780,077,864.00 94,780,077,864.00 0.00 Bonds payable 10,288,666,233.00 10,288,666,233.00 0.00 Including: Preferred shares 0.00 0.00 0.00 Perpetual bonds 0.00 0.00 0.00 Lease liabilities 0.00 0.00 0.00 Long-term payables 1,416,092,239.00 1,416,092,239.00 0.00 Long-term payroll payable 0.00 0.00 0.00 Provisions 16,457,010.00 16,457,010.00 0.00 Deferred income 2,187,558,533.00 2,187,558,533.00 0.00 Deferred income tax liabilities 1,419,373,545.00 1,419,373,545.00 0.00 Other non-current liabilities 11,334,873,322.00 11,334,873,322.00 0.00 Total non-current liabilities 121,443,098,746.00 121,443,098,746.00 0.00 Total liabilities 183,671,193,824.00 183,671,193,824.00 0.00 33 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Owners’ equity: Share capital 34,798,398,763.00 34,798,398,763.00 0.00 Other equity instruments 0.00 0.00 0.00 Including: Preferred shares 0.00 0.00 0.00 Perpetual bonds 0.00 0.00 0.00 Capital reserves 38,213,100,596.00 38,213,100,596.00 0.00 Less: Treasury stock 0.00 0.00 0.00 Other comprehensive income -125,258,252.00 -331,449,633.00 -206,191,381.00 Specific reserve 0.00 0.00 0.00 Surplus reserves 1,152,626,310.00 1,152,625,429.00 -881.00 General reserve 0.00 0.00 0.00 Retained earnings 11,817,881,286.00 12,018,320,805.00 200,439,519.00 Total equity attributable to owners of the 85,856,748,703.00 85,850,995,960.00 -5,752,743.00 Company as the parent Non-controlling interests 34,500,548,858.00 34,499,403,629.00 -1,145,229.00 Total owners’ equity 120,357,297,561.00 120,350,399,589.00 -6,897,972.00 Total liabilities and owners’ equity 304,028,491,385.00 304,021,593,413.00 -6,897,972.00 Note for adjustment: The Group began to implement the Accounting Standards for Business Enterprises No. 22 - Recognition and M easurement of Financial Instruments, the Accounting Standards for Business Enterprises No. 23 – Transfer of Financial Assets, the Accounting Standards for Business Enterprises No. 24 – Hedging Accounting, and the Accounting Standards for Business Enterprises No. 37 – Presentation of Financial Instruments revised in 2017 from 1 January 2019. The Company adjusted related items of the Financial Statements at the Beginning of the First Execution Year according to the requirements of the standards. Balance Sheet of the Company as the Parent Unit: RM B Item 31 December 2018 1 January 2019 Adjusted Current assets: M onetary capital 3,829,814,050.00 3,829,814,050.00 0.00 Trading financial assets 0.00 0.00 0.00 Financial assets at fair value through profit 0.00 0.00 0.00 or loss Derivative financial assets 0.00 0.00 0.00 Notes receivable 1,500,000.00 1,500,000.00 0.00 Accounts receivable 36,952,623.00 36,952,623.00 0.00 Accounts receivable financing 0.00 0.00 0.00 Prepayments 25,020,734.00 25,020,734.00 0.00 34 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Other receivables 2,015,828,460.00 2,015,819,544.00 -8,916.00 Including: Interest receivable 9,659,279.00 9,659,279.00 0.00 Dividends receivable 14,115,915.00 14,115,915.00 0.00 Inventories 9,289,141.00 9,289,141.00 0.00 Contractual assets 0.00 0.00 0.00 Assets classified as held for sale 0.00 0.00 0.00 Current portion of non-current assets 450,000,000.00 450,000,000.00 0.00 Other current assets 47,805,096.00 47,805,096.00 0.00 Total current assets 6,416,210,104.00 6,416,201,188.00 -8,916.00 Non-current assets: Investments in debt obligations 0.00 0.00 0.00 Available-for-sale financial assets 128,297,254.00 0.00 -128,297,254.00 Investments in other debt obligations 0.00 0.00 0.00 Held-to-maturity investments 0.00 0.00 0.00 Long-term receivables 0.00 0.00 0.00 Long-term equity investments 143,499,733,485.00 143,499,733,485.00 0.00 Investments in other equity instruments 0.00 128,297,254.00 128,297,254.00 Other non-current financial assets 0.00 0.00 0.00 Investment property 290,253,475.00 290,253,475.00 0.00 Fixed assets 969,371,352.00 969,371,352.00 0.00 Construction in progress 251,314,313.00 251,314,313.00 0.00 Productive living assets 0.00 0.00 0.00 Oil and gas assets 0.00 0.00 0.00 Right-of-use assets 0.00 0.00 0.00 Intangible assets 514,186,496.00 514,186,496.00 0.00 R&D expense 0.00 0.00 0.00 Goodwill 0.00 0.00 0.00 Long-term prepaid expense 99,701,797.00 99,701,797.00 0.00 Deferred income tax assets 290,794,548.00 290,794,548.00 0.00 Other non-current assets 284,243,667.00 284,243,667.00 0.00 Total non-current assets 146,327,896,387.00 146,327,896,387.00 0.00 Total assets 152,744,106,491.00 152,744,097,575.00 -8,916.00 Current liabilities: Short-term borrowings 1,000,000,000.00 1,000,000,000.00 0.00 35 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Trading financial liabilities 0.00 0.00 0.00 Financial liabilities at fair value through 0.00 0.00 0.00 profit or loss Derivative financial liabilities 0.00 0.00 0.00 Notes payable 0.00 0.00 0.00 Accounts payable 35,322,286.00 35,322,286.00 0.00 Advances from customers 1,577,035,515.00 1,577,035,515.00 0.00 Contractual liabilities 0.00 0.00 0.00 Payroll payable 201,139,261.00 201,139,261.00 0.00 Taxes payable 250,558,556.00 250,558,556.00 0.00 Other payables 8,209,736,090.00 8,209,736,090.00 0.00 Including: Interest payable 330,964,989.00 330,964,989.00 0.00 Dividends payable 6,451,171.00 6,451,171.00 0.00 Liabilities directly associated with assets 0.00 0.00 0.00 classified as held for sale Current portion of non-current liabilities 2,590,000,000.00 2,590,000,000.00 0.00 Other current liabilities 0.00 0.00 0.00 Total current liabilities 13,863,791,708.00 13,863,791,708.00 0.00 Non-current liabilities: Long-term borrowings 26,520,000,000.00 26,520,000,000.00 0.00 Bonds payable 9,976,533,425.00 9,976,533,425.00 0.00 Including: Preferred shares 0.00 0.00 0.00 Perpetual bonds 0.00 0.00 0.00 Lease liabilities 0.00 0.00 0.00 Long-term payables 0.00 0.00 0.00 Long-term payroll payable 0.00 0.00 0.00 Provisions 0.00 0.00 0.00 Deferred income 5,523,949,841.00 5,523,949,841.00 0.00 Deferred income tax liabilities 0.00 0.00 0.00 Other non-current liabilities 20,954,104,125.00 20,954,104,125.00 0.00 Total non-current liabilities 62,974,587,391.00 62,974,587,391.00 0.00 Total liabilities 76,838,379,099.00 76,838,379,099.00 0.00 Owners’ equity: Share capital 34,798,398,763.00 34,798,398,763.00 0.00 Other equity instruments 0.00 0.00 0.00 36 BOE Technology Group Co., Ltd. Third Quarter Report 2019 Including: Preferred shares 0.00 0.00 0.00 Perpetual bonds 0.00 0.00 0.00 Capital reserves 37,590,966,191.00 37,590,966,191.00 0.00 Less: Treasury stock 0.00 0.00 0.00 Other comprehensive income -28,507,585.00 -284,608,843.00 -256,101,258.00 Specific reserve 0.00 0.00 0.00 Surplus reserves 1,152,626,310.00 1,152,625,429.00 -881.00 Retained earnings 2,392,243,713.00 2,648,336,936.00 256,093,223.00 Total owners’ equity 75,905,727,392.00 75,905,718,476.00 -8,916.00 Total liabilities and owners’ equity 152,744,106,491.00 152,744,097,575.00 -8,916.00 Note for adjustment: The Group began to implement the Accounting Standards for Business Enterprises No. 22 - Recognition and M easurement of Financial Instruments, the Accounting Standards for Business Enterprises No. 23 – Transfer of Financial Assets, the Accounting Standards for Business Enterprises No. 24 – Hedging Accounting, and the Accounting Standards for Business Enterprises No. 37 – Presentation of Financial Instruments revised in 2017 from 1 January 2019. The Company adjusted related items of the Financial Statements at the Beginning of the First Execution Year according to the requirements of the standards. 2. Retrospective Restatement of Previous Comparative Data due to the Execution of any New Standards Governing Financial Instruments or Leases from 2019 □ Applicable √ Not applicable III Independent Auditor’s Report Indicate by tick mark whether the financial statements above have been audited by an independent auditor. □Yes √ No These financial statements have not been audited by such an auditor. Chairman of the Board (signature):Chen Yanshun Date of the Board’s approval of this Report: 30th October 2019 37