杭汽轮机股份有限公司 2015 年半年度报告 Stock Code: 200771 Stock ID: Hangqilun B Announcement No. 2015-50 二零一五年半年度报告 SEMIANNUAL REPORT 2015 Hangzhou Steam Turbine Co., Ltd. August 25,2015 1 杭汽轮机股份有限公司 2015 年半年度报告 I. Important Remarks, Table of Contents, and Glossaries The Board of Directors, the Supervisory Committee, the directors, the supervisors, and executives of the Company guarantee that there are no significant omissions, fictitious or misleading statements carried in the Report and we will accept individual and joint responsibilities for the truthfulness, accuracy and completeness of the Report. All of the directors attended the board meeting on which this report was examined. Diirector Yan Jianhua , Director Ye Zhong and Indepement Director Tan Jianrong Voted by Telecommunication and the others voted onsite. The Company will not distribute cash dividend or bonus shares, neither capitalizing of common reserves for the report period. Chairman Mr. Zheng Bin, Chief Financial Officer Pu Yangshuo, and the Chief of Accounting Department Mr. Zhao Jiamao hereby declare: the Financial Statement in the report is guaranteed to be truthful and complete. 2 杭汽轮机股份有限公司 2015 年半年度报告 Table of Contents 2015 Semi-Annual Report I..Important Notice, Table of contents and Definitions II. Basic Information of the Company III. Summary of Accounting Highlights and Business Highlights IV. Report of the Board of Directors 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. Financial Report X. Documents available for inspection 3 杭汽轮机股份有限公司 2015 年半年度报告 Definition Define Terms to be defined Definition d as Define Company, the Company Hangzhou Steam Turbine Co., Ltd. d as Define The Group, Hangqi Group Hangzhou Steam Turbine Power Group Co., Ltd. d as Define The report period, In the report period January 1, 2015-June 30,2015 d as Define Hangzhou Zhongneng Steam Turbine Power Co., Ltd. – the Zhongneng Co. d as holding subsidiary of the Company Define Hangzhou Steam Turbine Casting Co., Ltd. – the holding Casting Co. d as subsidiary of the Company Define Zhejiang Steam Turbine Packaged Technology Development Co., Packaged Tech. Co. d as Ltd. – the holding subsidiary of the Company Define Hangzhou Steam Turbine Machinery Equipment Co., Ltd. - the Machinery Co. d as holding subsidiary of the Company Define Hangzhou Steam Turbine Auxiliary Machinery Co., Ltd. - the Auxiliary Machine Co. d as holding subsidiary of the Company Define Zhejiang Turbine Import & Export Co., Ltd. – the holding Turbine Co. d as subsidiary of the Company Define Hangzhou Steam Turbine Heavy Industry Co., Ltd. - the holding Heavy Industry Co. d as subsidiary of the Company Define The Board of Directors The Board of Directors of Hangzhou Steam Turbine Co., Ltd. d as Define The Supervisory Committee The Board of Directors of Hangzhou Steam Turbine Co., Ltd. d as The Shareholders’ Meeting Define The Board of Directors of Hangzhou Steam Turbine Co., Ltd. 4 杭汽轮机股份有限公司 2015 年半年度报告 d as Define RMB, RMB0’000, RMB000’000’000 RMB Yuan, RMB10 thousand Yuan, RMB100 million Yuan d as 5 杭汽轮机股份有限公司 2015 年半年度报告 II. Basic Information of the Company 1. Company Information Stock ID Hangqilun B Stock Code 200771 Stock ID changed(if any) Stock Exchange Listed in Shenzhen Stock Exchange Company Name in Chinese 杭州汽轮机股份有限公司 Short form of Company Name in 杭汽轮 Chinese Name in English(if any) HANGZHOU STEAM TURBINE CO.,LTD. Abbreviation in English(if any) HTC Legal representative: Zheng Bin Note: if the Company's stock ID changed during the period from the end of the report to the disclosure of the biannual report, the Company should disclose the changed stock ID. II. Contacts Secretary of the Board Representative of Stock Affairs Name Yu Changquan Wang Gang Address No. 357 Shiqiao Rd. Hangzhou No. 357 Shiqiao Rd. Hangzhou Tel. 0571-85780432 0571-85780198 Fax. 0571-85780433 0571-85780433 Email. ychq@htc.cn wg@htc.cn III. Other info. 1. Contacts No change to the registered address, office address, postal code, official website, and email address of the Company. For details please find the Annual Report 2014. 2. Information inquiry None of the official presses, website, and place of enquiry has been changed in the report period. For details please find the Annual Report 2014. 3. Change of business registration None of the registration date and place, the license number, tax number, organization number has been changed in the report period. For details please find Annual Report 2014. 6 杭汽轮机股份有限公司 2015 年半年度报告 III. Summary of Accounting Data and Financial Indicators I. Main accounting data and indices Are there any retrospective adjustment or restatement of financial information of previous year due to change of accounting policies or correcting of accounting errors? No This report term Same period last year Increase/decrease (%) Turnover (RMB) 1,054,996,326.24 1,743,362,642.27 -39.48% Net profit attributable to shareholders of the -10,282,333.32 196,174,851.01 -105.24% listed company (yuan) Net profit attributable to the shareholders of the listed company and after deducting of -22,164,040.35 181,414,092.36 -112.22% non-recurring gain/loss(RMB) Net Cash flow generated by business 101,821,573.29 119,786,983.72 -15.00% operation (RMB) Basic earnings per share (Yuan/share) -0.01 0.26 -103.85% Diluted earnings per share (Yuan/share) -0.01 0.26 -103.85% Net income on asset, weighted -0.23% 4.53% -4.76% As at the end of the As at the end of last year YoY+/-(%) reporting period Gross assets (RMB) 7,772,378,806.31 7,552,058,947.02 2.92% Shareholders’ equity attributable to 4,365,106,939.87 4,450,598,244.32 -1.92% shareholders of the listed company(RMB) Total share capital of the Company up to a trading day before disclosure: Total share capital of the Company up to a trading day before 754,010,400 disclosure (Share) II.The differences between domestic and international accounting standards 1. Differences between the net profit and net asset in the financial reports prepared under IAS and Chinese Accounting Standard Not applicable In RMB Net profit attributable to the shareholders of the Net asset attributable to the shareholders of the listed listed company company Current term Amount of last term End of term Beginning of term On Chinese accounting -10,282,333.32 196,174,851.01 4,365,106,939.87 4,450,598,244.32 standard No difference . 7 杭汽轮机股份有限公司 2015 年半年度报告 2. Differences between the net profit and net asset in the financial reports prepared under IAS and Chinese Accounting Standard Not applicable In RMB Net profit attributable to the shareholders of the Net asset attributable to the shareholders of the listed listed company company Current term Amount of last term End of term Beginning of term On Chinese Accounting -10,282,333.32 196,174,851.01 4,365,106,939.87 4,450,598,244.32 Standard No difference . 3. Statement on the differences of accounting information on IAS and domestic accounting standard Not applicable III. Non-recurring gain/loss items and amounts In RMB Items Amount Remarks Gain/loss from disposal of non-current assets (includes the recovered part of -293,394.88 asset impairment provision already provided) Gains and losses included in the current period of government subsidies, excluding those government grants which are closely related to normal 3,309,950.00 business and in line with national policy , or in accordance with fixed standards or quantities Gain/loss from change of fair value of transactional asset and liabilities, and investment gains from disposal of transactional financial assets and 10,489,094.59 liabilities and sellable financial assets, other than valid period value instruments related to the Company’s common businesses Other non-business income and expenditures other than the above 2,620,570.67 Less: Influenced amount of income tax 3,247,782.47 Influence on minority shareholders’ equity (after tax) 996,730.88 Total 11,881,707.03 -- None of non-recurring gain/loss items recognized as recurring gain/loss items as defined by the Information Disclosure Explanatory Announcement No.1 – Non-recurring gain/loss in the report period. 8 杭汽轮机股份有限公司 2015 年半年度报告 IV. Board of Directors’ Report I. Business overview In the report period, the Chinese economy was still facing great downward pressure. Growth of industrial investment were slowing down; manufacturing demands were depressed; the price index of industrial products had seen negative growth for 40 months continuously; the Company was struggling to operate and manage. Caused by the market, the steam turbine industry was obsessed by overcapacity of industry, depressed demands of the downstream industry, intensified market competition and increased operating cost and other problems. The whole industry economic indicators were still showing negative growth. Facing with the economic situation, the Company put forward the working policy" managing strictly, grasping the market, reducing costs and controlling risk". On the one hand, it accelerated technological progress, improved the management, cost control and information technology application and made the Company keep ahead in the industrial Steam Turbine market. On the other hand, the Company actively responded to the national energy development strategy, researched on the natural gas distributed energy market deeply. Entering into the natural gas application market, extending the industry chain, promoting industrial upgrading and reducing the huge impact of macroeconomic downturn by carrying out external cooperation. In the report period, the Company’s operating income, operating profit, total profit ,net profit and the net profit for its shareholders were respectively RMB 1,054,996,326.24,RMB 14,696,409.86,RMB 18,824,453.52, RMB 7,533,997.32 and RMB -10,282,333.32, which respectively decreased by 39.48%,94.34%,92.96%,96.69% a nd 105.24%year on year. II. Analysis of main business (I) General Information Turnover of the report period has decreased sharply. This was mainly caused by the market environment. Net profit decreased obviously comparing with the 1st half of last year caused by the market environment and product composition, which made net profit fall sharply. The Company's operating profit of RMB 1054.9963 million,which decreased by 39.48% year on year.Net et profit of RMB 7.534 million, and net profit attributable to owners of the listed Company of RMB -10.2823 million , which decreased by 105.24% year on year. Year-on-year changes in major financial statistics In RMB Change over This report term Same period last year same period last Cause of change year Decrease of sales due to industrial Turnover 1,054,996,326.24 1,743,362,642.27 -39.48% decline Decrease of sales expense along with Operation cost 662,509,347.18 1,074,446,850.16 -38.34% sales Sales expense 67,934,574.09 68,197,974.19 -0.39% Administrative expense 315,169,862.90 298,799,463.80 5.48% Decrease of interest expense due to Financial expenses 4,932,440.34 9,202,486.72 -46.40% decrease of bank loan balance in general 9 杭汽轮机股份有限公司 2015 年半年度报告 Mainly profit in the period decrease and Income tax expenses 11,290,456.20 39,673,928.67 -71.54% income tax expense decrease relatively. Input to R&D 107,033,616.25 80,416,519.61 33.1% Cash flow generated by business 101,821,573.29 119,786,983.72 -15.00% operation, net Net cash flow Mainly decrease of Steam Turbine’s generated by -35,593,758.80 -58,390,584.46 39.04% investment fixed asset for the heavy construction Net cash flow Mainly caused by returning bank loans generated by -124,431,470.02 -173,780,354.77 28.40% financing and distributing dividends Net increasing of Mainly greater increase of net cash flow cash and cash -57,390,220.73 -111,810,766.61 48.67% from financing activities in the report equivalents period Mainly changes on the accounting Asset impairment evaluation of provision for bad debts set 22,650,560.50 55,223,094.46 -58.98% loss up on accounts receivable in the report period No change in profit composition or sources in the report period. (II) Progress reviewing of the business plans disclosed in previous periodic report In the report period, impacts on the Company's financial indicators of the operation failing to achieve the plan drew up at the beginning of the year, great changes of the macroeconomic environment and the continuous adjustment of the economic structure were far more than expectation and more highlighted the urgency of the current enterprise transformation and upgrading. Therefore, the Company actively promoted each key work on the development of enterprises according to the plan for the beginning of the year in the 1st half of the year. 1.Strategic plan seeking transformation. In the report period, facing with continuous and profound impacts on industrial pattern brought by China's economic new normal, the Company actively organized special investigations and assessments, grasped the development trend of the industry and laid out enterprises “13th five-year-plan’’ transformation of the road. The Company would seek innovation-driven development, increase integration efforts to the industrialization and information , promote the manufacturing process as digital ,networked and intelligent and promote the production-oriented manufacturing industry to turn to service-oriented manufacturing industry combing with the requirements of China's industrial manufacturing 2025.Aiming at future application of the natural gas in China's vast market, the Company carried out the extensive market research, ensured to deepen the implementation of the gas turbine business strategy in the“13th five-year-plan”period and realized the transition upgrading of Company’s products technology. In the report period, the Company's major construction projects on steam turbine heavy industry and R & D center had started construction one after another and the project was going smoothly. 2. Technological innovation stores kinetic energy. In the report period, the domestic first set of one hundred thousand air separation device stepped into in the final acceptance stage; the projects put into operation 10 杭汽轮机股份有限公司 2015 年半年度报告 successfully would have demonstration effects on the follow-up of domestic large coal chemical projects and also marked the Company's industrial Steam Turbine design and manufacturing capacity had entered advanced ranks in the world. The Company's first design of the axial exhaust steam turbine test run was successful and exported overseas markets. Company's “ NLNK series of low quality and high efficient use of waste heat of industrial steam turbine project ”wins the China Machinery Industry Science and Technology Award, the project “1000MW supercritical thermal power generating unit boiler induced-draft fan driven by steam turbine” won the 2014 Annual Zhejiang Machinery Industry Science and Technology Award; “steam waste heat, pressure recovery steam turbine” and “petrochemical industry waste heat utilization steam turbine” two major products as efficient energy-saving equipment and products , identified jointly by Provincial Economic and information technology Committee, Provincial Development and Reform Commission and Provincial Department of Finance as 2014 Annual “Zhejiang manufacturing quality”. Research on the project of "800,000 T / Y ethylene plant ethylene refrigeration compressor unit" is approved by the Department of China Petroleum & Chemical Corporation supplies and equipment. In the report period, the Company filed for 2 technical patents and 8 utility model patents in the 1st half of the year and 1 technical patents and 6 utility model patents had been authorized. 3.Responding to the market breakout actively. In the report period, the industrial steam turbine market showed overall downward trend. With the exchange rate of euro and yen continuing downward, foreign products enhanced competition in the domestic high-end market; domestic manufactures market competition continued to intensify and product prices continued to decline. Facing with the market structure limited by the internal and external, the Company actively changed the marketing organization structure; fully integrated domestic and foreign two market, industrial drive and industrial power two areas, equipment sales and supply two models; fully tapped the market potential and developed the user values deeply. The Company had achieved good results in the high power generator units, large capacity power station feed water pump and induced draft fan units and other markets in the 1st half of the year. With the restart of domestic nuclear power projects construction, the Company got new orders for nuclear power projects this year. Through unremitting efforts, the Company successfully obtained gas turbine sets projects in Tiantie Group project. The Company was carrying out market cooperation through a variety of ways currently and strived to enter into the natural gas distributed energy and cogeneration market which is nascent at home. 11 杭汽轮机股份有限公司 2015 年半年度报告 4.Management upgrading promoted reform. In the report period, the Company had been carrying out and implementing process optimization and management reforms in scientific research, marketing, manufacturing, finance, management and other fields, breaking through the original management model boldly to meet with the urgent requirements of reducing costs, improving efficiency and controlling the risk .The Company accelerated the construction of information technology and implemented the PLM project which would go online. Hangzhou Steam Turbine Design - production process refinement management system construction was listed as the 2015 provincial deep integration of two socialization planning project; carrying forward centralized procurement, warehousing upgrading, financial business integration and other management projects continuously. Great efforts had been paid on controlling the risks of receivable accounts, inventory goods, the process of fulfilling the contract and the establishment of shared risk-taking mechanism. III. Main business composition In RMB Gross Change in Change in Change in Turnover Operation cost profit ratio operation cost gross profit turnover YoY % YoY YoY On Industries Boiler and power machine 790,748,409.49 509,438,875.99 35.58% -42.76% -40.30% -2.65% manufacture Casting 37,544,132.47 31,350,755.93 16.50% 8.58% 25.48% -11.24% Petrochemical and other 56,432,075.30 41,221,480.07 26.95% 14.34% 65.94% -22.72% special machineries Other 166,927,317.00 79,720,865.04 52.24% -39.04% -52.77% 13.85% Subtotal 1,051,651,934.26 661,731,977.04 37.08% -39.53% -38.27% -1.29% On Products Industrial steam 790,748,409.49 509,438,875.99 35.58% -42.76% -40.30% -2.65% turbine Casting 37,544,132.47 31,350,755.93 16.50% 8.58% 25.48% -11.24% products Auxiliary 56,432,075.30 41,221,480.07 26.95% 14.34% 65.94% -22.72% machinery Other 166,927,317.00 79,720,865.04 52.24% -39.04% -52.77% 13.85% Subtotal 1,051,651,934.26 661,731,977.04 37.08% -39.53% -38.27% -1.29% District Domestic 955,526,784.01 576,919,978.08 39.62% -42.30% -43.54% 1.33% Overseas 96,125,150.25 84,811,998.96 11.77% 15.49% 69.33% -28.06% Subtotal 1,051,651,934.26 661,731,977.04 37.08% -39.53% -38.27% -1.29% IV. Analyze of competitive edge As the largest developing and manufacturing base of industrial steam turbine throughout the country, the Company has been in the territory with years of experiences, which provided obvious advantages from technical 12 杭汽轮机股份有限公司 2015 年半年度报告 research to production, from marketing to customer services. First. A complete technical innovation system was established. The Company has under its possession of national, provincial, and municipal grade technical centers, a doctorial workstation, and an academician workstation. Close co-operations were carried out with institutions and universities from throughout the country. As the main drafter of national standard on industrial steam turbine, the Company has the newest technical trend under its close observation. The Company is now providing nearly 600 different models of steam turbines to the customers and hold the newest technical system covering the product lines up to 150 MW. Secondly, the company production model of modular design, concurrent engineering, enabled the company to balance the production cost, delivery date and customer demands. Thirdly, the Company has established strategic co-operations with main customers in the country. Further marketing approaches were carried on by involving itself in the customers’ value. A sound and steady image has been set up in the domestic steam turbine market. In the global market, the Company has acquired multiple important certifications and has established a primary global recognition. Fourthly, the Company has its complete service providing system. The Company is not only capable to provide onsite 24-hour service for the Company’s own products, but also accumulated rich experiences in technical maintenance and reengineering of other manufacturers’ products. Fifthly, the Company has cultivated a significant advantage in human resources. Great importance has been attached to construction of work teams with collection of high-end workforce in the areas of research & development, designing, technique, testing, and quality control. An excellent workforce provides a sound foundation to lift quality and services. 13 杭汽轮机股份有限公司 2015 年半年度报告 V. Analyzing of investment position 1. External equity investment (1) External investment External Investment Investment of the period (RMB) Investment of same period of last year (RMB) Scale of change 15,975,590.25 100.00% Particulars of the invested company Name of companies Main Business Share of equity in invested entity Hangzhou Changdi Equity Investment Partnership (limited External investment 2.97% liability) Shejiang Zhongrun Fuel Engine Technology Co.,Ltd. Fuel Engine repair and related materials Development 55.55% (2) Shareholding in financial enterprises √ applicable □ not applicable Sharehol Sharehol Type ding Opening Shares held at ding of Original investment percenta Close balance of Gain/loss in report Source of Name of companies amount of the end of term percenta Accounting subject compa cost (RMB) ge at book value (RMB) period (RMB) shares shares (shares) ge at ny beginnin closing g Com merci Bank of Hangzhou Co., Ltd. 390,954,040.00 138,711,840 6.92% 138,711,840 5.89% 390,954,040.00 27,742,368.00 Sellable financial asset Own capital al Bank Total 390,954,040.00 138,711,840 -- 138,711,840 -- 390,954,040.00 27,742,368.00 -- -- (3) Stock investment 14 杭汽轮机股份有限公司 2015 年半年度报告 No securities investment in the report period. (4) Statement of holding equities in other PLCs The Company was not holding shares of any other PLC as of the end of report period. 2. Trusted financing, derivate instruments, and trusted loans (1) Trusted financing In RMB’0000 Impairment Related Mean of Principal retrieved provision Predicted Actual gain/loss Title of entrustee Relationship transaction Type of product Amount entrusted Started on Expired on reward this period provided (if income of the period or not any) Financial Ping An Bank of China Non-related No instruments of 16,800 12,200 181.6 90.5 banks Industrial & Commercial Bank of Financial Non-related No instruments of 7,080 7,080 48.83 49.19 China banks Financial Shanghai Bank Non-related No instruments of 2,000 24.43 banks Financial Citic Bank Co., Ltd. Non-related No instruments of 19,106 11,106 168.54 74.78 banks Financial Bank of China Non-related No instruments of 6,500 3,500 6.86 7.07 banks Financial Hangzhou Bank Non-related No instruments of 10,000 5,000 86.04 33.68 banks Financial China Minsheng Bank Non-related No instruments of 4,000 4,000 15.45 15.45 banks Financial China Everbright Bank Non-related No instruments of 2,000 2,000 7.39 7.39 banks Financial URCB Non-related No instruments of 6,000 2,000 72.54 43.7 banks 15 杭汽轮机股份有限公司 2015 年半年度报告 Changan International Trust Co., Non-related No Trust products 12,000 5,000 674.64 162.25 Ltd. Zhongrong International Trust Co., Non-related No Trust products 3,000 88.77 Ltd. Hangzhou Industrial & Commercial Non-related No Trust products 23,800 19,000 1,259.71 548.95 Trust Co., Ltd. Ping’an Trust Co., Ltd. Non-related No Trust products 1,000 1,000 15.95 15.95 Total 113,286 -- -- -- 71,886 2,650.75 1,048.91 Resource of capital trusted Independent (2) Derivate instrument investment No derivate instrument investment in the report period. (3) Trusted loans No trusted loans in the report period. 3. Using of proceeds from share placing. No using of capital from public financing in the report period. 4. Analyze of main subsidiaries and affiliates Profiles of main subsidiaries and affiliates In RMB Type of Name of companies Industry Major products or service Registered capital Gross Assets Net asset Turnover Operation profit Net profit business Trade of Technological development Zhejiang Steam Turbine Packaged Subsidiarie packadged of automatic control and 51,000,000.00 286,524,386.31 92,192,230.44 87,432,537.33 12,214,314.92 10,039,415.19 Technology Development Co., Ltd. s equipment instrument control Designing and Hangzhou Zhongneng Steam Turbine Subsidiarie Manufactur manufacturing of steam 92,500,000.00 835,247,199.68 319,399,264.40 250,704,039.65 8,525,656.26 5,081,221.70 Power Co., Ltd. s ing turbines Hangzhou Steam Turbine Casting Co., Subsidiarie Casting Iron and steel casting 22,000,000.00 419,775,531.36 159,206,890.86 130,950,701.52 -3,003,996.42 -1,208,396.38 Ltd. s 16 杭汽轮机股份有限公司 2015 年半年度报告 Hangzhou Steam Turbine Machinery Subsidiarie Manufactur Producing and processing of & Equipment Co., Ltd. s ing steam turbine parts 30,000,000.00 187,338,758.22 121,887,377.13 91,266,078.22 27,734,512.03 22,850,938.28 Hangzhou Steam Turbine Auxiliary Subsidiarie Manufactur Manufacturing of steam Machine Co., Ltd. s ing turbine auxiliary machines 80,000,000.00 442,656,182.84 227,252,800.13 198,271,553.26 26,848,703.98 23,144,009.00 Zhejiang Turbine Import & Export Subsidiarie Commerce International trade 20,000,000.00 334,148,966.62 66,520,988.21 45,868,149.38 674,876.37 433,272.95 Co., Ltd. s & trade Designing and Hangzhou Steam Turbine Heavy Subsidiarie Manufactur manufacturing of steam 360,000,000.00 372,243,593.98 371,739,775.19 5,659,274.60 4,244,455.95 Industry Co., Ltd. s ing turbines 5. Major projects using non-raised capital In RMB’0000 Investment Planned Amount invested this Accumulation of actual input at end of Turnover of the Date of disclosure (if Index of information Projects progress of investment report term period project any) disclosed the project Project of Steam Turbine Heavy 208,400 365.76 9,033.49 4.33% Industry Total 208,400 365.76 9,033.49 -- -- -- -- VI. Prospectus of business performance of January – September 2015 Prediction: Loss Category of prediction data: periodic data From the beginning of year to the end of next Same period last year Changed by report period Predicted number of accumulative net profit (RMB0,000) -9500 -- -4500 18,396.51 Decrease 124.46% -- 151.64% Net profit attributable to the shareholders of listed company RMB0’000 -0.11 -- -0.05 0.244 Decrease 120.49% -- 145.08% Net profit attributable to the shareholders of the listed company was decreasing significantly,This is mainly caused by changes of market economic environment and suspension or revocation of parts of the Company's customer projects. Sales income of the report period had Basic earnings per share (Yuan/share) decreased sharply. At the same time, net profit fell sharply comparing with the 1st half of last year caused by the above reasons and product composition. Remarks on the prediction VII. Statement of the Board and Supervisory Committee on the “Non-standard auditors’ report” issued by the CPA on the current report period Not applicable VIII. Statement of the Board on the “Non-standard auditors’ report” of previous report period 17 杭汽轮机股份有限公司 2015 年半年度报告 Not applicable 18 杭汽轮机股份有限公司 2015 年半年度报告 IX. Profit distribution carried out in the report period Particulars about the execution or adjustment of profit distribution, especially cash dividend and capitalizing of capital reserves. The profit distribution preplan of year 2014, which was proposed by the Board, was: basing on the total capital share in 2014, namely 754,010,400 shares, RMB1.00 and no bonus share(tax included) will be distributed to each 10 shares. No capitalizing of common reserves will be implemented.Totally RMB75,401,040 will be distributed. This plan was approved by the Shareholders’ Meeting 2014 held on May 15, 2015. The Company disclosed the “Announcement of Dividend Distribution for Year 2014” (Announcement No. 2015-35), by which the final trading day of B stocks were June 17, 2015; the ex-dividend day was June 18, 2015; and the shareholding registration day was June 23, 2015. The Company entrusted China Securities Registration and Clearance Co., Ltd. Shenzhen Branch to carry out the dividend plan on June 23, 2015. Income taxes payable by the shareholders were deducted and paid by China Securities Registration and Clearance Co., Ltd. Shenzhen Branch on behalf. Particulars about Cash Dividend Policy Whether satisfying the requirements of the Articles of Association or resolutions of the shareholders’ Yes meeting Are standard and rate of dividend definite and clear Yes Complete decision making process Yes Independent directors fulfilling their responsibilities Yes Whether the minority shareholders were given opportunities to express their claims or opinions, Yes whether their legal rights are safeguarded Whether the conditions and procedures of adjusting cash dividend policy legal and transparent Yes X. Profit distribution for the report period. None of cash dividend, bonus shares, or capitalizing of common reserves will be carried out for the first half of year. XI. Reception of investigations, communications, or interviews Main content involved and material Time/date Place Way Type of visitors Visitors provided The Company's main business, performance situation; the Company gas turbine project; the Company shares of Hangzhou Bank; the The Field British Schroder Group . May 21,2015 Individual Company’s building projects Company research Shanghai Office situation; the Company's attitude towards the reform of B shares; export business situation and overseas cooperation in the future. 19 杭汽轮机股份有限公司 2015 年半年度报告 V. Important Events I. Administrative Position For the report period, the Company’s actual administration practices were complying with the requirements of the Company Law and CSRC without any differences. II. Material lawsuit In the report period, the Company had no material lawsuits or arbitrations. Other lawsuit Inde Involved Whether to Date x of Basic situation of litigation amount form The oucome and effects of Execution of litigation of Progress of the litigation(arbitration(arbitration) discl (arbitration) (RMB’00 expected litigation(arbitration) (arbitration)judgement disclo osur 00) liability sure e The Company sued to Qianan District People's Court for Yanshan Tangshan Iron& Steel Co., Ltd. (ID: Yanshan Iron& Steel), requiring Yanshan Iron& Steel to pay the remain RMB6,260,000 loans of the Steam Turbine contract. After As of June 30, 2015, Yanshan Qianan People's Court opened a court session heard this case The court made effective lodged a complaint against Iron& Steel hadn’t paid the loans and made judgements in September, October, November 2014 judgements that Yanshan Iron& Yanshan Tangshan Iron& Steel 626 No and the Company applied for respectively which required Yanshan Iron& Steel to pay the Steel paid RMB6,260,000 and Co., Ltd. defaulting on loans Qianan People's Court to enforce loans and overdue interests. Yanshan Iron& Steel didn’t obey overdue interests. execution in August 2015. the first trial judgement and lodged an appeal to The Tangshan intermediate People's Court. The Tangshan intermediate People's Court opened a court session heard this case in April, 2015 and confirmed the first trial judgement. 20 杭汽轮机股份有限公司 2015 年半年度报告 After both sides reached an The Company sued to Xiacheng District Hangzhou People's agreement, the court made Court for Tianji Shanxi Chemical Co., Ltd. (ID: Luan The Company lodged a mediation agreement which Chemical) on June, 2014, requiring Luan Chemical to pay the Luan Chemical had paid RMB complaint against Luan Tianji required 287.15 No remains RMB 2.8715 million loans of the contract and overdue 200,000 and owed RMB 2.6715 Shanxi Chemical Co. , Luan Chemical to pay RMB interests. Both sides reached an agreement after mediation and million on June 30, 2015. Ltd .defaulting on loans 2.8715 million in instalments and the court made mediation agreement. finish the payments by September 30, 2015. Yanshan Tangshan Iron& Steel Yanshan Iron& Steel sued to Qianan District People's Court for The case came on for trial on Co., Ltd. lodged a complaint The court didn’t make effective 377.2 No the Company’s late shipment contract according to the June 8, 2015 and the court didn’t against the Company late shipment judgements. “memorandum” sighed with the Company. make judgements currently. contract The Company sued to Suzhou District People's Court for The Company lodged a Qilianshan Gansu Pharmaceutical Co., Ltd. (ID: Qilianshan The court made judgement which Qilianshan Pharmaceutical had complaint against Qilianshan Pharmaceutical), requiring Qilianshan Pharmaceutical to pay required Qilianshan paid RMB 31,000 on June30, 6.2 No Gansu Pharmaceutical Co. , the remains RMB 62,000 loans of the contract and overdue Pharmaceutical to pay RMB 2015 and the remains will be paid Ltd .defaulting on loans interests. The court opened a court session heard this case on 62,000 on two instalments. later. June, 2015. 21 杭汽轮机股份有限公司 2015 年半年度报告 III. Questioning by the media No media queries raised in the report period. IV. Bankruptcy and reconstruction No bankruptcy or capital reorganizing issues occurred in the report period. V. Asset transactions 1. Asset acquisition No asset acquisition occurred in the report period. 2. Disposal of assets No disposal of assets in the report period. 3. Merger of entities No merger of entities occurred in the report period. VI. Implementing of share incentive scheme and influence to the Company No share incentive scheme was implemented in the report period 22 杭汽轮机股份有限公司 2015 年半年度报告 VII. Material related transactions 1. Related transactions related to daily operation Whether Index Trading limit over the Market of Principle of Subjects of the Ratio in price of infor Type of pricing the Price of Amount of trade Way of Date of Related parties Relationship related similar approved approved similar matio trade related trade RMB0’000 payment disclosure transactions trades trade n transactions (RMB’0000) limited or available disclo sure not (Y/N) Hangzhou Steam Accept Freight, Bank March 2015- Market Turbine Automobile Affiliate of the Group Fair and just 2,683.73 6400 No price Sales Service Co., Ltd. labor repairing, etc. transfer 26,2015 13 Hangzhou Hangfa Bank March 2015- Purchase Market Power Generating Affiliate of the Group Generators Fair and just 3,894.02 13000 No of goods price Equipment Co., Ltd. transfer 26,2015 13 Shares held by the Purchase Market Bank March 2015- Greenesol Co. (India) Generators Fair and just 2,538.06 5200 No Company of goods price transfer 26,2015 13 Total -- -- 9,115.81 -- 24600 -- -- -- -- 2. Related transactions in terms of acquisition or disposal of assets: No related transaction regarding asset purchase or disposal up to the end of report period. 3. Related transactions in term of collective external investment No related transaction of joint external investment in the report period. 4. Debts and credits with related parties Debts receivable from related party Whether has Balance at Current newly Balance at non-business period-begin Current recovery Current interest Related Relationship Causes added Interest rate period-end capital occupying (RMB’000 (RMB’0000) (RMB’0000) (RMB’0000) (RMB’0000) or not 0) 23 杭汽轮机股份有限公司 2015 年半年度报告 Hangzhou Steam Turbine Controlled Casting Co., Ltd. subsidiaries Disbursement Yes 0 1,458.34 5.61% 40.91 1,458.34 Influence on business performance and financial status of the Company from related liabilities 5. Other material related transactions No other material related transactions. VIII. Non-operational capital appropriation by holding shareholder and related parties No non-operational capital appropriation by holding shareholder or related parties occurred in the report period. IX. Material contracts and execution 1. Entrustment, contracting, and leasing issues (1) Entrustment No entrustment in the report period. (2) Contracting No contracting in the report period. (3) Leasing No leasing in the report period. 2. Guarantees In RMB’0000 External Guarantee (Exclude controlled subsidiaries) Amount of Actual date of Amount of guarantee and Complet Related Guarantee provided to the occurring (signing date Actual amount of guarantee Type of guarantee Term date of disclosure ed or not guarantee guarantee of agreements 24 杭汽轮机股份有限公司 2015 年半年度报告 Hangzhou Guoneng Steam Joint liability Fubruary 14,2015 10,000 Fubruary 11, 2015 10,000 1 year No No TurbineEngineering Co., Ltd. quaranty Total guarantee quota to the subsidiaries approved in the reporting Total amount of guarantee to the subsidiaries actually 10,000 0 period (C1) incurred in the reporting period (C2) Total guarantee quota to the subsidiaries approved at the end of )otal balance of actual guarantee to the subsidiaries at 10,000 0 the reporting period (C3) the end of the reporting period (C4) The Company’s total guarantee(i.e.total of the first three main items) Total guarantee quota approved in the reportingperiod Total amount of guarantee actually incurred in the 10,000 0 (A1+B1+C1) reporting period(A2+B2+C2) Total guarantee quota already approved at theendof the reporting Total balance of the actual guarantee at the end of the 10,000 0 period(A3+B3+C3) reporting period(A4+B4+C4) Description of the possibility of bearing joint repayment liability due to undue guarantee (if any) N/A Description of external guarantee against the specified procedures (if any) N/A (1) Illegal providing of external guarantees No illegal providing of external guarantees in the report period. 3. Other material contracts No other material contract in the report period. 4. Other material trades No other material trade in the report period. 25 杭汽轮机股份有限公司 2015 年半年度报告 X. Commitment issues by shareholders with 5% or over of shares in the report period or carried over to the report period from previous periods No commitment issues by shareholders with 5% or over of shares in the report period or carried over to the report period from previous periods XI. Engaging and dismissing of CPAs The semi-annual financial report has not been audited. XII. Punishment and improvement No punishment or improving approach in the report period. XIII. Disclosure of illegal action causing risk of delisting. No such illegal action causes risk of delisting. XIV. Statement on other material issues 1. The Company applied for suspension as the controlling shareholder Hangzhou Steam Turbine Engineering Co., Ltd. was planning major issues.The Company’s stock was suspending trading from May 29, 2015. Please see detailed information on Company’s announcement. (Announcement No:2015-33,2015-34,2015-36,2015-37 and 2015-38) 26 杭汽轮机股份有限公司 2015 年半年度报告 27 杭汽轮机股份有限公司 2015 年半年度报告 VI. Change of share capital and shareholding of Principal Shareholders 1.Changes in share capital In shares Before the change Increase/decrease(+,-) After the Change Amount Proportion Capitaliz Share ation of Bonus allotmen common Other Subtotal Quantity Proportion shares t reserve fund I. Shares with trade 479,919,891 63.65% 0 0 0 16,950 16,950 479,936,841 63.65% restriction conditions 1. State-owned shares 479,824,800 63.64% 0 0 0 0 0 479,824,800 63.64% 2. Other domestic shares 95,091 0.01% 0 0 0 16,950 16,950 112,041 0.01% Domestic natural person 95,091 0.01% 0 0 0 16,950 16,950 112,041 0.01% shares II. Shares without trading 274,090,509 36.35% 0 0 0 -16,950 -16,950 274,073,559 36.35% limited conditions Foreign shares listed at 274,090,509 36.35% 0 0 0 -16,950 -16,950 274,073,559 36.35% home III. Total of capital shares 754,010,400 100.00% 0 0 0 0 0 754,010,400 100.00% II. Number of shareholders and shareholding positions In shares Total number of preferred Total common shareholders at the end shareholders that had restored the 15,540 voting right at the end of the 0 of the report period reporting period (if any) (note 8) Shareholding of shareholders holding more than 5% shares Number os share Proporti pledged/froze Number of Changes in Amount of Amount of Nuture of on of n Shareholders shares held at reporting restricted shares un-restricted shareholder shares period -end period held shares held State held(%) Amou of nt share Hangzhou Steam Turbine Power Group State-owned Co., Ltd. legal person 63.64% 479,824,800 0 479,824,800 0 GUOTAI JUNAN Foreign legal 1.89% 14,284,477 11162299 0 14,284,477 SECURITIES(HONGKONG) LIMITED person Foreign legal First Shanghai Secrutities Co., Ltd. 0.68% 5,095,921 5095921 0 5,095,921 person Foreign legal NORGES BANK 0.57% 4,303,675 1845100 0 4,303,675 person 28 杭汽轮机股份有限公司 2015 年半年度报告 CHINA INT'L CAPITAL CORP HONG Foreign legal 0.41% 3,066,768 3066768 0 3,066,768 KONG SECURITIES LTD person Foreign legal GIC PRIVATE LIMITED 0.35% 2,665,330 0 0 2,665,330 person VANGUARD TOTAL Foreign legal INTERNATIONAL STOCK INDEX 0.30% 2,286,336 257500 0 2,286,336 person FUND BOCHK INVESTMENT Foreign legal FUNDS-BOCHK CHINA GOLDEN 0.30% 2,273,227 1235227 0 2,273,227 person DRAGON FUND Foreign legal AUSTRALIANSUPER PTY LTD 0.28% 2,108,321 0 0 2,108,321 person Domestic Xia Zulin 0.28% 2,100,000 42000 0 2,100,000 Natural person Particulars about strategic investors or general corporations becoming among the top 10 shareholders due Not applicable to share placing (if any) (See Note 3) (1) Hangzhou Steam Turbine Power Group Co., Ltd. is the holder of state-shares of the Company, all other shareholders’ are holders of domestic listed foreign shares (B shares) (2) There is no relationship between Hangzhou Steam Turbine Power Group Co., Ltd. Notes to relationship or “action in concert” among the top and other shareholders; ten shareholders. (3) Hangzhou Steam Turbine Group Co., Ltd. is not an “action-in-concert” party with any of other shareholders as described by the “Administration Rules of Informational Disclosure about Change of Shareholding Statues of PLCs”. Top 10 holders of shares without trading limited conditions Amount of unconditional Category of shares Name of the shareholder shares held at end of Category of shares Amount period Foreign shares placed in GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 14,284,477 14,284,477 domestic exchange Foreign shares placed in First Shanghai Secrutities Co., Ltd. 5,095,921 5,095,921 domestic exchange Foreign shares placed in NORGES BANK 4,303,675 4,303,675 domestic exchange Foreign shares placed in CHINA INT'L CAPITAL CORP HONG KONG SECURITIES LTD 3,066,768 3,066,768 domestic exchange Foreign shares placed in GIC PRIVATE LIMITED 2,665,330 2,665,330 domestic exchange Foreign shares placed in VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND 2,286,336 2,286,336 domestic exchange BOCHK INVESTMENT FUNDS-BOCHK CHINA GOLDEN Foreign shares placed in 2,273,227 2,273,227 DRAGON FUND domestic exchange AUSTRALIANSUPER PTY LTD 2,108,321 Foreign shares placed in 2,108,321 29 杭汽轮机股份有限公司 2015 年半年度报告 domestic exchange Foreign shares placed in Xia Zulin 2,100,000 2,100,000 domestic exchange Foreign shares placed in Taifook Securities Company Limited-Account Client 1,753,655 1,753,655 domestic exchange 1)It is unknown to the Company if there is any relationship among the top 10 common share holders without restriction; Explanation on associated relationship or consistent action among the top (2) Hangzhou Steam Turbine Group Co., Ltd. is not an action-in-concert” 10 shareholders of non-restricted negotiable shares and that between the party with any of other shareholders as described by the “Administration top 10 shareholders of non-restricted negotiable shares and top 10 Rules of Informational Disclosure about Change of Shareholding Statues shareholders of PLCs”. Notes to the shareholders involved in financing securities (if any)(See Not applicable Notes 4) No agreed repurchasing trade by shareholders in the report period III. Change of holding shareholder or substantial controller No changes in holding shareholder or substantial controller in the report period. IV. Proposals raised by the shareholders or their action-in-concert parties about increasing of shareholding To the knowledge of the Company, there is not any proposal raised by the shareholders or their action-in-concert parties about increasing of shareholding. 30 杭汽轮机股份有限公司 2015 年半年度报告 VII. Situation of the Preferred Shares No issue regarding preference shares in the report period. VIII. Information about Directors, Supervisors and Senior Executives I. Change of shareholding of directors, supervisors and senior executives Shares holding at Shares Shares Shares under Shares put Shares Shares under Status of the increased decreased restriction at under Name Position held at the restriction at end service beginning this term this term beginning of restriction in end of term of period of term (shares) (shares) period the period (shares) Wang Supervisor On duty 37,556 22,600 0 60,156 0 0 0 Xiaohui Total -- -- 37,556 22,600 0 60,156 0 0 0 II. Replacing of directors, supervisors, and executives No changes happened to any of the directors, supervisors, or executives in the report period. For details please refer to the Annual Report 2014. 31 杭汽轮机股份有限公司 2015 年半年度报告 IX. Financial Report I. Auditors’ Report The Semi-annual Financial Report is not audited. II. The Financial Statements All figures in the Notes to the Financial Statements are in RMB. 1. Consolidated Balance Sheet Prepared by: Hangzhou Steam Turbine Co., Ltd June 30,2015 In RMB Items At the end of term Beginning of term Current asset: Monetary fund 556,567,843.18 613,958,063.91 Settlement provision Outgoing call loan Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Bill receivable 680,533,170.35 701,109,938.01 Account receivable 2,155,076,664.91 2,388,919,641.98 Prepayments 192,415,265.82 172,022,768.39 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Interest receivable Dividend receivable Other account receivable 26,855,901.45 25,382,223.32 Repurchasing of financial assets Inventories 2,056,698,608.69 1,594,074,228.69 Assets held for sales Non-current asset due in 1 year Other current asset 432,903,394.85 382,070,235.56 Total of current assets 6,101,050,849.25 5,877,537,099.86 32 杭汽轮机股份有限公司 2015 年半年度报告 Non-current assets: Loans and payment on other’s behalf disbursed Disposable financial asset 504,966,453.19 498,990,862.94 Expired investment in possess Long-term receivable Long term share equity investment Property investment Fixed assets 643,577,368.14 678,033,380.86 Construction in progress 106,182,252.58 89,469,259.14 Engineering material Fixed asset disposal Production physical assets Gas & petrol Intangible assets 308,508,911.77 304,100,619.77 R & D petrol Goodwill Long-germ expenses to be amortized 1,041,796.52 1,041,796.52 Differed income tax asset 107,051,174.86 102,885,927.93 Other non-current asset Total of non-current assets 1,671,327,957.06 1,674,521,847.16 Total of assets 7,772,378,806.31 7,552,058,947.02 Current liabilities Short-term loans 193,300,000.00 198,600,000.00 Loan from Central Bank Deposit received and hold for others Call loan received Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities Bill payable 123,907,495.41 150,763,452.14 Account payable 962,111,122.36 763,085,718.92 Advance payment 1,656,586,126.69 1,374,736,209.67 Selling of repurchased financial assets Fees and commissions receivable Employees’ wage payable 41,557,798.81 65,672,706.09 Tax payable 19,622,641.69 126,091,260.73 33 杭汽轮机股份有限公司 2015 年半年度报告 Interest payable Dividend payable Other account payable 26,359,396.25 29,597,889.12 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 Other current liability Total of current liability 3,023,444,581.21 2,708,547,236.67 Non-current liabilities: Long-term loan 23,700,000.00 18,500,000.00 Bond payable Including:preferred stock Sustainable debt Long-term payable 330,000.00 330,000.00 Long-term payable employees’s remuneration Special payable Expected liabilities Differed income 7,108,355.00 8,252,705.00 Differed income tax liability 1,017,473.05 1,017,473.05 Other non-current liabilities 5,084,464.00 Total non-current liabilities 37,240,292.05 28,100,178.05 Total of liability 3,060,684,873.26 2,736,647,414.72 Owners’ equity Share capital 754,010,400.00 754,010,400.00 Capital reserves 139,590,345.09 139,590,345.09 Less:Shares in stock Other comprehensive income -799,284.89 -640,401.72 Special reserves 24,954,102.00 24,603,149.96 Surplus reserves 621,112,807.78 621,112,807.78 Common risk provision Undistributed profit 2,826,238,569.89 2,911,921,943.21 Total of owner’s equity belong to the parent company 4,365,106,939.87 4,450,598,244.32 Minority shareholders’ equity 346,586,993.18 364,813,287.98 34 杭汽轮机股份有限公司 2015 年半年度报告 Total of owners’ equity 4,711,693,933.05 4,815,411,532.30 Total of liabilities and owners’ equity 7,772,378,806.31 7,552,058,947.02 Legal Representative:Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 2.Parent Company Balance Sheet In RMB Items At the end of term Beginning of term Current asset: Monetary fund 257,164,117.40 248,509,410.84 Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Bill receivable 440,980,570.67 385,543,218.94 Account receivable 1,704,877,619.52 2,010,980,253.99 Prepayments 77,807,950.85 72,514,421.98 Interest receivable Dividend receivable Other account receivable 24,935,426.35 33,537,812.35 Inventories 1,634,702,407.73 1,159,102,793.67 Assets held for sales Non-current asset due in 1 year Other current asset 108,833,703.95 30,000,000.00 Total of current assets 4,249,301,796.47 3,940,187,911.77 Non-current assets: Disposable financial asset 459,986,453.19 454,010,862.94 Expired investment in possess Long-term receivable Long term share equity investment 502,919,378.03 502,919,378.03 Property investment Fixed assets 327,923,082.97 354,282,465.72 Construction in progress 79,921,470.83 67,302,264.59 Engineering material Fixed asset disposal Production physical assets Gas & petrol Intangible assets 179,895,252.95 181,918,239.41 R & D petrol Goodwill 35 杭汽轮机股份有限公司 2015 年半年度报告 Long-germ expenses to be amortized 1,015,547.54 1,015,547.54 Differed income tax asset 77,252,961.40 74,164,090.15 Other non-current asset Total of non-current assets 1,628,914,146.91 1,635,612,848.38 Total of assets 5,878,215,943.38 5,575,800,760.15 Current liabilities Short-term loans 100,000,000.00 100,000,000.00 Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities Bill payable Account payable 616,514,772.31 448,755,575.94 Advance payment 1,230,819,214.41 977,630,617.45 Employees’ wage payable 22,305,845.76 44,164,067.67 Tax payable 3,662,291.73 88,238,458.17 Interest payable Dividend payable Other account payable 15,687,969.73 19,738,024.51 Non-current liability due in 1 year Other current liability Total of current liability 1,988,990,093.94 1,678,526,743.74 Non-current liabilities: Long-term loan Bond payable Long-term payable Special payable Expected liabilities Differed income 219,250.00 111,250.00 Differed income tax liability 1,017,473.05 1,017,473.05 Other non-current liabilities Total of Non-current liabilities 1,236,723.05 1,128,723.05 Total of liability 1,990,226,816.99 1,679,655,466.79 Owners’ equity Share capital 754,010,400.00 754,010,400.00 Other equity instrument Capital reserves 138,953,250.09 138,953,250.09 Less:Shares in stock Special reserves 10,511,915.73 10,511,915.73 36 杭汽轮机股份有限公司 2015 年半年度报告 Surplus reserves 602,356,402.65 602,356,402.65 Undistributed profit 2,382,157,157.92 2,390,313,324.89 Total of owners’ equity 3,887,989,126.39 3,896,145,293.36 Total of liabilities and owners’ equity 5,878,215,943.38 5,575,800,760.15 Legal Representative:Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 3.Consolidated Profit statement In RMB Item Report period Same period of the previous year I. Income from the key business 1,054,996,326.24 1,743,362,642.27 Incl:Business income 1,054,996,326.24 1,743,362,642.27 Interest income Insurance fee earned Fee and commission received II. Total business cost 1,079,531,378.43 1,517,296,543.27 Incl:Business cost 662,509,347.18 1,074,446,850.16 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 6,334,593.42 11,426,673.94 Sales expense 67,934,574.09 68,197,974.19 Administrative expense 315,169,862.90 298,799,463.80 Financial expenses 4,932,440.34 9,202,486.72 Asset impairment loss 22,650,560.50 55,223,094.46 Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 39,231,462.05 33,668,236.76 Incl: investment gains from affiliates Gains from currency exchange(“-”for loss) III. Operational profit(“-”for loss) 14,696,409.86 259,734,335.76 37 杭汽轮机股份有限公司 2015 年半年度报告 Add :Non-operational income 6,285,206.55 12,194,329.71 Including:Income from disposal of non-current assets 29,583.00 347,012.69 Less:Non business expenses 2,157,162.89 4,552,652.16 Incl:Loss from disposal of non-current assets 303,677.88 120,844.93 IV.Total profit(“-”for loss) 18,824,453.52 267,376,013.31 Less:Income tax expenses 11,290,456.20 39,673,928.67 V. Net profit 7,533,997.32 227,702,084.64 Net profit attributable to the owners of parent company -10,282,333.32 196,174,851.01 Minority shareholders’ equity 17,816,330.64 31,527,233.63 VI. Other comprehensive income -373,143.88 751,350.27 Net of profit of other comprehensive inco me attributable to owners of the parent co -158,883.17 319,921.94 mpany. (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 1.Re-measurement of defined benefit pla ns of changes in net debt or net assets 2.Other comprehensive income under the equity method investee can not be reclass ified into profit or loss. (II) Other comprehensive income that will be -158,883.17 319,921.94 reclassified into profit or loss. 1.Other comprehensive income under the equity method investee can be reclassifie d into profit or loss. 2.Gains and losses from changes in fair v alue available for sale financial assets 3.Held-to-maturity investments reclassifi ed to gains and losses of available for sal e financial assets 4.The effective portion of cash flow hedg es and losses 5.Translation differences in currency fina ncial statements -158,883.17 319,921.94 6.Other 7.Net of profit of other comprehensive in come attributable to Minority -214,260.71 431,428.33 shareholders’ equity VII. Total comprehensive income 7,160,853.44 228,453,434.91 Total comprehensive income attributable to the owner of the parent company -10,441,216.49 196,494,772.95 Total comprehensive income attributable minority shareholders 17,602,069.93 31,958,661.96 VIII. Earnings per share 38 杭汽轮机股份有限公司 2015 年半年度报告 (I)Basic earnings per share -0.01 0.26 (II)Diluted earnings per share -0.01 0.26 Legal Representative:Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 4. Profit statement of the Parent Company In RMB Items Report period Same period of the previous year I. Income from the key business 620,574,048.28 1,201,478,303.95 Incl:Business cost 425,237,391.19 781,172,768.01 Business tax and surcharge 1,398,211.91 6,040,737.39 Sales expense 45,577,385.16 42,538,296.57 Administrative expense 203,813,839.11 186,037,313.75 Financial expenses 4,831,005.55 8,086,889.06 Asset impairment loss 25,190,173.12 49,149,559.39 Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 146,889,193.96 195,852,809.48 Incl: investment gains from affiliates II. Operational profit(“-”for loss) 61,415,236.20 324,305,549.26 Add :Non-operational income 2,885,613.95 1,044,088.00 Including:Income from disposal of non-current assets Less:Non business expenses 704,659.95 2,487,972.76 Incl:Loss from disposal of non-current assets III.Total profit(“-”for loss) 63,596,190.20 322,861,664.50 Less:Income tax expenses -3,648,682.83 21,559,787.22 IV. Net profit(“-”for net loss) 67,244,873.03 301,301,877.28 V.Net of profit of other comprehensive income 39 杭汽轮机股份有限公司 2015 年半年度报告 VI. Total comprehensive income 67,244,873.03 301,301,877.28 VII. Earnings per share: (I)Basic earnings per share 0.09 0.40 (II)Diluted earnings per share 0.09 0.40 Legal Representative:Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 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 1,221,502,011.12 1,494,144,550.03 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 Cash received as interest, processing fee and commission Net increase of inter-bank fund received Net increase of repurchasing business Tax returned 2,774,168.11 230,602.76 Other cash received from business operation 11,618,304.30 2,670,915.77 Sub-total of cash inflow 1,235,894,483.53 1,497,046,068.56 Cash paid for purchasing of merchandise and services 532,710,262.96 784,127,440.61 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 40 杭汽轮机股份有限公司 2015 年半年度报告 Cash paid to staffs or paid for staffs 354,148,818.72 323,206,406.63 Taxes paid 179,449,049.67 173,868,146.85 Other cash paid for business activities 67,764,778.89 96,057,090.75 Sub-total of cash outflow from business activities 1,134,072,910.24 1,377,259,084.84 Cash flow generated by business operation, net 101,821,573.29 119,786,983.72 II.Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains 39,231,462.05 33,668,236.76 Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets 147,758.20 1,142,941.52 Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 718,855,999.95 1,063,000,000.00 Sub-total of cash inflow due to investment activities 758,235,220.20 1,097,811,178.28 Cash paid for construction of fixed assets, intangible assets 33,297,388.80 51,200,201.74 and other long-term assets Cash paid as investment 5,975,590.25 Net increase of loan against pledge Net cash received from subsidiaries and other operational units Other cash paid for investment activities 754,555,999.95 1,105,001,561.00 Sub-total of cash outflow due to investment activities 793,828,979.00 1,156,201,762.74 Net cash flow generated by investment -35,593,758.80 -58,390,584.46 III.Cash flow generated by financing Cash received as investment 11,340,000.00 729,626.40 Incl: Cash received as investment from minor shareholders Cash received as loans 75,400,000.00 68,100,000.00 Cash received from bond placing Other financing –related ash received Sub-total of cash inflow from financing activities 86,740,000.00 68,829,626.40 Cash to repay debts 75,500,000.00 154,040,000.00 Cash paid as dividend, profit, or interests 135,671,470.02 88,569,981.17 41 杭汽轮机股份有限公司 2015 年半年度报告 Incl: Dividend and profit paid by subsidiaries to minor shareholders Other cash paid for financing activities Sub-total of cash outflow due to financing activities 211,171,470.02 242,609,981.17 Net cash flow generated by financing -124,431,470.02 -173,780,354.77 IV. Influence of exchange rate alternation on cash and cash equivalents 813,434.80 573,188.90 V.Net increase of cash and cash equivalents -57,390,220.73 -111,810,766.61 Add: balance of cash and cash equivalents at the beginning of term 613,958,063.91 883,141,568.17 VI ..Balance of cash and cash equivalents at the end of term 556,567,843.18 771,330,801.56 Legal Representative:Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 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 802,001,490.60 995,027,205.44 Tax returned 2,122,030.27 Other cash received from business operation 1,160,090.01 2,446,973.54 Sub-total of cash inflow 805,283,610.88 997,474,178.98 Cash paid for purchasing of merchandise and services 421,933,411.17 516,126,399.41 Cash paid to staffs or paid for staffs 247,730,407.99 227,071,963.41 Taxes paid 95,021,306.39 92,848,391.75 Other cash paid for business activities 16,133,251.46 52,823,344.01 Sub-total of cash outflow from business activities 780,818,377.01 888,870,098.58 42 杭汽轮机股份有限公司 2015 年半年度报告 Cash flow generated by business operation, net 24,465,233.87 108,604,080.40 II.Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains 146,889,193.96 195,852,809.48 Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets 564.00 Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 60,000,000.00 334,000,000.00 Sub-total of cash inflow due to investment activities 206,889,757.96 529,852,809.48 Cash paid for construction of fixed assets, intangible assets 20,231,766.66 25,752,130.39 and other long-term assets Cash paid as investment 5,975,590.25 Net cash received from subsidiaries and other operational units Other cash paid for investment activities 120,000,000.00 398,000,000.00 Sub-total of cash outflow due to investment activities 146,207,356.91 423,752,130.39 Net cash flow generated by investment 60,682,401.05 106,100,679.09 III.Cash flow generated by financing Cash received as investment Cash received as loans Cash received from bond placing Other financing –related ash received Sub-total of cash inflow from financing activities 43 杭汽轮机股份有限公司 2015 年半年度报告 Cash to repay debts 80,000,000.00 Cash paid as dividend, profit, or interests 76,551,039.99 6,972,000.01 Other cash paid for financing activities Sub-total of cash outflow due to financing activities 76,551,039.99 86,972,000.01 Net cash flow generated by financing -76,551,039.99 -86,972,000.01 IV. Influence of exchange rate alternation on cash and cash 109,733.33 399,302.95 equivalents V.Net increase of cash and cash equivalents 8,706,328.26 128,132,062.43 Add: balance of cash and cash equivalents at the beginning 248,509,410.84 295,292,983.14 of term VI ..Balance of cash and cash equivalents at the end of 257,215,739.10 423,425,045.57 term Legal Representative:Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 44 杭汽轮机股份有限公司 2015 年半年度报告 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 Items Minor Other Total of owners’ Specialized Common risk shareholders’ Share Capital Capital reserves Comprehensive Surplus reserves Attributable profit equity Income reserve provision equity I.Balance at the end of last year 754,010,400.00 139,590,345.09 -640,401.72 24,603,149.96 621,112,807.78 2,911,921,943.21 364,813,287.98 4,815,411,532.30 Add: Change of accounting policy Correcting of previous errors Merger of entities under common control Other II.Balance at the beginning of current year 754,010,400.00 139,590,345.09 -640,401.72 24,603,149.96 621,112,807.78 2,911,921,943.21 364,813,287.98 4,815,411,532.30 III.Changed in the current year -158,883.17 350,952.04 -85,683,373.32 -18,226,294.80 -103,717,599.25 (1)Total comprehensive income -158,883.17 -10,282,333.32 17,602,069.94 7,160,853.45 (II)Investment or decreasing of 19,340,000.00 19,340,000.00 capital by owners 1 . Ordinary Shares invested by hareh 19,340,000.00 19,340,000.00 olders 2 . Holders of other equity instrument s invested capital 3.Amount of shares paid and accounted as owners’ equity 4.Other (III)Profit allotment -75,401,040.00 -55,591,585.00 -130,992,625.00 1.Providing of surplus reserves 2.Providing of common risk provisions 45 杭汽轮机股份有限公司 2015 年半年度报告 3.Allotment to the owners (or -75,401,040.00 -55,591,585.00 -130,992,625.00 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) 3.Making up losses by surplus reserves. 4. Other (V). Special reserves 350,952.04 423,220.26 774,172.30 1. Provided this year 1,239,471.57 572,847.25 1,812,318.82 2.Used this term 888,519.53 149,626.99 1,038,146.52 (VI)Other IV. Balance at the end of this term 754,010,400.00 139,590,345.09 -799,284.89 24,954,102.00 621,112,807.78 2,826,238,569.89 346,586,993.18 4,711,693,933.05 Amount in last year In RMB Amount in last year Owner’s equity Attributable to the Parent Company Minor Items Total of owners’ Specialized Common risk shareholders’ Share Capital Surplus reserves Attributable profit equity reserve provision equity I.Balance at the end of last year 754,010,400.00 139,590,345.09 -562,143.85 17,276,201.15 583,824,678.05 2,736,802,630.30 380,677,958.00 4,611,620,068.74 Add: Change of accounting policy Correcting of previous errors Merger of entities under common control Other II.Balance at the beginning of current 754,010,400.00 139,590,345.09 -562,143.85 17,276,201.15 583,824,678.05 2,736,802,630.30 380,677,958.00 4,611,620,068.74 year III.Changed in the current year 319,921.94 251,527.38 45,372,268.92 -48,321,539.02 -2,377,820.78 46 杭汽轮机股份有限公司 2015 年半年度报告 (1)Total comprehensive income 319,921.94 196,174,851.01 31,958,661.96 228,453,434.91 (II)Investment or decreasing of capital by owners 1 . Ordinary Shares invested by hareh olders 2 . Holders of other equity instrument s invested capital 3.Allotment to the owners (or shareholders) 4.Other (IV) Internal transferring of owners’ equity -150,802,080.00 -80,581,307.97 -231,383,387.97 1. Capitalizing of capital reserves (or to capital shares) 2. Capitalizing of surplus reserves (or to capital shares) 3.Making up losses by surplus -150,802,080.00 -80,581,307.97 -231,383,387.97 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 251,527.38 301,430.33 552,957.71 1. Provided this year 1,689,177.58 563,714.86 2,252,892.44 2.Used this term 1,437,650.20 262,284.53 1,699,934.73 (VI)Other -502.09 -323.34 -825.43 IV. Balance at the end of this term 754,010,400.00 139,590,345.09 -242,221.91 17,527,728.53 583,824,678.05 2,782,174,899.22 332,356,418.98 4,609,242,247.96 Legal Representative:Zheng Bin Person in charge of accounting:Pu Yangshuo 47 杭汽轮机股份有限公司 2015 年半年度报告 Accounting Dept Leader: Zhao Jiamao 8.Statement of change in owner’s Equity of the Parent Company Amount in this period In RMB Amount in this period Other Items Less: Shares Specialized Share Capital Capital reserves Comprehensive Surplus reserves Attributable profit Total of owners’ equity in stock reserve Income I.Balance at the end of last year 754,010,400.00 138,953,250.09 10,511,915.73 602,356,402.65 2,390,313,324.89 3,896,145,293.36 Add: Change of accounting policy Correcting of previous errors Other II.Balance at the beginning of current year 754,010,400.00 138,953,250.09 10,511,915.73 602,356,402.65 2,390,313,324.89 3,896,145,293.36 III.Changed in the current year -8,156,166.97 -8,156,166.97 (I)Total comprehensive income 67,244,873.03 67,244,873.03 (II) Investment or decreasing of capital by owners 1.Ordinary Shares invested by hareholders 2.Holders of other equity instruments invested capital 3.Amount of shares paid and accounted as owners’ equity 4.Other (III)Profit allotment -75,401,040.00 -75,401,040.00 1.Providing of surplus reserves 2.Allotment to the owners (or shareholders) -75,401,040.00 -75,401,040.00 3.Other (IV)Internal transferring of owners’ equity 1. Capitalizing of capital reserves (or to capital shares) 48 杭汽轮机股份有限公司 2015 年半年度报告 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 618,887.05 618,887.05 2.Used this term 618,887.05 618,887.05 (VI)Other IV. Balance at the end of this term 754,010,400.00 138,953,250.09 10,511,915.73 602,356,402.65 2,382,157,157.92 3,887,989,126.39 Amount in last year In RMB Amount in last year Other Items Less: Shares in Specialized Share Capital Capital reserves Comprehensive Surplus reserves Attributable profit Total of owners’ equity stock reserve Income I.Balance at the end of last year 754,010,400.00 138,953,250.09 7,295,765.20 565,068,272.92 2,205,522,237.31 3,670,849,925.52 Add: Change of accounting policy Correcting of previous errors Other II.Balance at the beginning of current year 754,010,400.00 138,953,250.09 7,295,765.20 565,068,272.92 2,205,522,237.31 3,670,849,925.52 III.Changed in the current year 150,499,797.28 150,499,797.28 (I)Total comprehensive income 301,301,877.28 301,301,877.28 (II) Investment or decreasing of capital by owners 1.Ordinary Shares invested by hareholders 2.Holders of other equity instruments invested capital 3.Amount of shares paid and accounted as owners’ equity 4.Other (III)Profit allotment -150,802,080.00 -150,802,080.00 1.Providing of surplus reserves 2.Allotment to the owners (or shareholders) -150,802,080.00 -150,802,080.00 49 杭汽轮机股份有限公司 2015 年半年度报告 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 1,078,331.01 1,078,331.01 2.Used this term 1,078,331.01 1,078,331.01 (VI)Other IV. Balance at the end of this term 754,010,400.00 138,953,250.09 7,295,765.20 565,068,272.92 2,356,022,034.59 3,821,349,722.80 Legal Representative:Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 50 杭汽轮机股份有限公司 2015 年半年度报告 (1) Basis of compiling The Company adopts perpetual operation as the basis of financial statements. (II) Assessment on perpetuation No issue or situation, in 12 months since the end of report period, composes major doubt on the perpetuation assumption of the Company. V. Principal Accounting Policies and Estimations Important prompt: The Company utilized detailed accounting polices and estimations on providing of bad debt provisions, fixed asset depreciation, intangible asset amortization, recognition of revenue, and so forth, according to its business practices. (I) Statement of compliance to the Enterprise Accounting Standard The finance report produced by the Company is accordance with the Enterprise Accounting Standard, and reflects the Company’s financial state, business performance and cash flow frankly and completely. (II) Fiscal year The Company uses the calendar year for its fiscal year. A fiscal year is from January 1 to December 31. (III) Operational period The Company’s relatively shorter operational period, which is 12 months, and is used as division of liquidity of assets and liabilities. (IV) Standard currency for bookkeeping The Company uses Renminbi (RMB) as the standard currency for book keeping. (V) Accounting treatment of the entities under common control and different control 1. Treatment of entities under common control Assets and liabilities acquired in merger of entities are measured at book values at the date of merger. The difference between the net book value of asset and the offered price (or total of face value of shares issued) will be adjusted into capital reserves; when the capital reserves is not enough to reduce, it will be adjusted into retained profit. 2. Treatment of entities under different control The difference of takeover cost over the fair value of recognizable net asset of the acquired entity is recognized as goodwill at the day of takeover; in case the takeover cost is lower than the fair value of recognizable net asset of the acquired entity, the measuring process over the recognizable asset, liabilities, contingent liabilities, and takeover cost, shall be repeated, if comes out the same result, the difference shall be recorded into current income account. (VI) Method for preparing the consolidated financial statements The parent company puts all of its subsidiaries under its control into the consolidated financial statements. The consolidated financial statements are prepared according to the “Enterprise Accounting Standard No. 33 – Consolidated Financial Statements”, basing on the accounts of the parent company and the subsidiaries, and after adjusting the long-term investment equity in the subsidiary on equity basis. (VII) Recognition of cash and cash equivalents Cash equivalent refers to the investment held by the Company with short term, strong liquidity and lower risk of value fluctuation that is easy to be converted into cash of known amount. (VIII) Foreign currency trade and translation of foreign currencies 1. Translation of foreign currency Foreign currency trades are translated into RMB at the rate of the day when the trades are made. Those balances of foreign currencies and monetary items in foreign currencies are accounted at the exchange rate of the balance sheet date. Exchange differences, other than special loans satisfying the conditions of capitalization, are accounted into current income account. Non-monetary items in foreign currencies and on historical cost are translated at the rate of the trade day. Non-monetary items in foreign currencies and on fair value are translated at the rate of the 51 杭汽轮机股份有限公司 2015 年半年度报告 day when the fair value is recognized, where the differences are accounted as gain/loss from change of fair value. 2. Translation of foreign currency financial statements Asset and liability items in the balance sheet are translated basing on the exchange rate of the balance sheet date; Owners’ equities other than Retained Profit are translated at the exchange rate of the date when the trade happened. Income and expense items in the income statement are translated at the similar rate of the date when the trade happened. Differences generated by the above translating of foreign currencies are demonstrated separately under the owners’ equity in the balance sheet. (IX) Financial instruments 1. Type of finance asset and finance debt Finance assets are divided initially into four types of financial asset appointed to be measured at fair value with their changes are accounted into current gain/loss accounts(including transactional finance asset and financial asset appointed to be measured at fair value with their changes are accounted into current gain/loss accounts), transactional financial assets, debt and account receivable, finance asset saleable. Finance debts are divided initially into two types of financial debt appointed to be measured at fair value with their changes are accounted into current gain/loss accounts(including transactional finance debt and financial debt appointed to be measured at fair value with their changes are accounted into current gain/loss accounts), other finance debt. 2. Basis of recognition and accounting of finance asset and finance debt When the Company is one part of the finance instrument contract, one finance asset or debt is recognized. When on recognizing initially finance asset or debt, it is measured by fair value, for the finance asset or debt which appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, the related transaction expenses are directly accounted into current gain and loss; for other finance asset and debt, the related transaction expenses accounted into the initial recognition account. The Company future measures finance asset by fair value without deducting future possible transaction fee but with exception: (1) Due investment, debt and account receivable are measured by actual interest rate according to the amortized costs. (2) Equity instrument investment which have no quote in active market and which fair value can’t be measured reliably, and its derived finance assets which are connected with the equity instrument and which are summarized through the equity instrument, are measured by cost. The Company conduct successive measure of finance debt according to amortized cost by actual interest rate with exception as following: (1) finance debt which appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, is measured at fir value without deducting possible future transactional fee at settlement; (2) Equity instrument investment which have no quote in active market and which fair value can’t be measured reliably, and its derived finance assets which are connected with the equity instrument and which are closed off through the equity instrument, are measured by cost. (3) finance debt sponsorship contracts which are not appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, or debt agreements at rate lower than market rate and which are not appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, are measured at the higher value between the optimal estimated value payable according to current obligations and the surplus value from which the initial recognition value deduct the accumulated amortized amount according to the actual interest rate. Gain or loss from fluctuation of financial assets or liabilities are handled at the following ways, except for relating to hedge instrument. (1) Gain or loss from fluctuation of fair value of financial assets or liabilities and accounted into current gain/loss account, are accounted into gain/loss of fluctuation of fair value. Interests or cash dividend received in the period of holding these assets are recognized as investment gains. When they are disposed, the difference between the amount actually received and initially booked value is recognized as investment gains, and adjust the gain/loss from fair value fluctuation. (2) Fluctuation of fair value of sellable financial assets accounted into capital reserves; interests gained at actual interest rate are accounting into investment gains; the cash dividend received from sellable instrument investment, are accounted into investment gains when distributed; At disposal of these investment, the difference between actual amount received and book value are recognized as investment gains after deducting of accumulated change 52 杭汽轮机股份有限公司 2015 年半年度报告 of fair value which are originally accounted into capital reserves. As soon as the contract rights of acquiring the cash flow of particular financial asset have been terminated or almost all of the risks and rewards attached to the financial asset have been transferred, recognition of the financial asset is terminated; as soon as the current liabilities attached to the financial liability have been completely or partially relieved, recognition of the financial liability or part of is terminated. 3. Basis of recognition and accounting of financial asset transferring The Company stop recognizing the finance asset which risks and remuneration of ownership are transferred to the receiver; and continue to recognize the transferred finance asset which risks and remuneration of ownership are kept, and recognize the value as one finance debt. For the finance assets which risks and remuneration of ownership are not transferred or kept, the Company recognize them as following: (1) stop recognizing the finance asset which are given up the control; (2) continue to recognize the finance asset and related finance debt according to the extend which involved into the transferred finance asset for the finance asset which are not given up control. The Company measured the surplus between the following two values for the transferred finance assets which fulfill the stop recognition requirements into current gain or loss: (1) Account value of the transferred finance asset; (2) Consideration plus the accumulated fair value changes which were accounted directed into ownership rights. For the transferred finance assets which partly fulfill the stop recognition requirements the Company amortized the stopped recognition part and the not-stopped recognition part of the account value of the whole transferred finance asset, and account the surplus between the following two values into current gain or loss: (1) Account value of the stopped recognition part; (2) consideration plus the corresponding stopped recognition part of the accumulated fair value changes which were accounted directed into ownership rights. 4. Basis of recognition and accounting of fair value for the main finance asset and finance debt For the finance asset or debt which active market exists, the Company recognize the fair value according to the quote on the active market; for the finance asset or debt which active market not exists, the Company recognized the fair value using estimation technology (including reference of the latest market prices from freewill transactions by persons familiar with conditions, reference of the current fair value of other similar finance instrument in characteristics, discounted cash flow models and Option Pricing Model); for the initially acquired or initial finance asset or finance debt, the Company recognize the fair value basis on the market trading price. 5. Impairment test and impairment reserves plan (1) The Company conduct impairment test to the finance asset other than which appointed to be measured at fair value with their changes are accounted into current gain/loss accounts on balance sheet day. Impairment provision is provided as long as evidence showing that impairment has happened to the financial asset. (2) The Company conduct independently impairment test for single finance asset with large value for single finance asset with little value the Company conduct the impairment test with those of the finance asset composition which have similar credit risk characteristics; for the non impairment assets which are tested independently, the Company conduct the impairment test with those of the finance asset composition which have similar credit risk characteristics. (3) For the finance asset accounted by amortized cost which have subject impairment evidence at the end term, the impairment loss was recognized according to the difference between the account value and the anticipating future cash flow, for the finance asset which have little difference between its short term account receivable anticipating future cash flow and its current value, the Company don’t discount the future cash flow when recognizing related impairment loss. When there is impairment loss for the Equity instrument investment which have no quote in active market and which fair value can’t be measured reliably and its derived finance assets which are connected with the equity instrument and which are calculated through the equity instrument, are measured by cost, the difference is recognized as impairment loss between the account value of the equity instrument investment and its derived finance asset and the current value discounted by the future cash flow according to the market profit rate of the similar finance asset. The Company recognize the impairment loss for the saleable finance asset which fair value have sharp decreasing and the anticipating decreasing trend is not temporary, and account it into impairment loss together with the accumulated fair vale loss which was accounted into owner’s equity directly. When impairment occurred with a sellable financial asset, the accumulated losses caused by decreasing of fair value which have originally been written into owners’ equity shall be carried over to current gain/loss account. If practical evidence showing that the value of a particular financial asset has recovered in value after a impairment loss has been recognized and practically related to the issues occurred after recognition of the loss, the impairment 53 杭汽轮机股份有限公司 2015 年半年度报告 loss recognized shall be restored and accounted into current gain/loss. Impairment loss of sellable equity inves tment instrument will be restored to owners’ equity when the fair value has increased afterward. (X) Receivable accounts 1. Recognition and providing of bad debt provision on individual receivable account with large amount Basis of recognition or standard amount Accounts take over 10% of the book balance of receivable accounts of individual account with large amount Impairment test performed individually, bad debt provision will be Basis of bad debt provision provided at the difference of expected cash flow lower than the book value. 2. Recognition and providing basis of bad debt reserves for group of receivable accounts with similar characteristics of credit risks Name of the porfolio Basis of bad debt provision Group by age analysis Age analysis method Bad debt profisions are provided on age analyze basis in the protfolio Rate of provision on receivable Rate of provision on other receivable Age account account Within 1 year)included) 5.00% 5.00% 1-2 years 10.00% 10.00% 2-3 years 30.00% 30.00% Over 3 years 3-4 years 60.00% 60.00% 4-5 years 80.00% 80.00% Over 5 years 100.00% 100.00% Bad debt provisions are provided on percentage basis in the portfolio Not applicable Bad debt provisions are provided on other basis in the portfolio Not applicable (3) Receivable accounts with minor amount but bad debt provisions are provided individually When there is significant difference between the current value of future cash flow of Basis of providing bad debt individually the receivable account and the current value of future cash flow of the group Impairment test performed individually, bad debt provision will be provided at the Basis of bad debt provision difference of expected cash flow lower than the book value. (XI)Inventories (1) Inventory classification Inventories include saleable finished goods or merchandise, product-in-process , consumption material and goods in manufacturing procedure or working procedure. 54 杭汽轮机股份有限公司 2015 年半年度报告 (2) Pricing of inventory to be delivered Pricing basis: Delivered out materials are accounted by weighted average method, issued out finished products are accounted at individual price. (3) Recognition of realizable net value of inventory and providing of inventory impairment provision At the balance sheet day, inventories are measured at the lower of costs and cashable net values, the individual difference between the cashable net value and cost are provided as inventory impairment provision. For finished product, merchandise, saleable material and other saleable merchandise inventory, their cashable net values are recognized by their estimated sale price in normal operation deducting estimated sale expenses and related taxes; for material inventory which need processing, it cashable net value are recognized by the estimated sale prices of its finished products in normal operation deducting the estimated cost, sale expenses and related taxes due to the end of processing; At the balance sheet day, for inventory item which part has contract price and part has no contract price, the cashable net value is accounted separately, and recognize the inventory impairment provision or returnable cash.. (4) Inventory system Inventory system: perpetual inventory system (5) Amortization of low-value consumables and packaging materials Low price consumable Basis of amortizing: one-off Packaging materials Basis of amortizing: one-off (XII) Long-term equity investment 1. Recognition of common control and substantial influence According to the contract, if the invested enterprise’s main finance and operation policy need to be agreed by the other investing party, the investment is common control investment; if only have participating decision rights in invested enterprise’s main finance and operation policy but have no own control or common control with other investing part, the investment is investment with substantial influence. 2. Recognition of initial investment costs (1) For the long-term equity investment formed by corporate merger under common control, if it is the long-term equity investment obtained from the corporate merger by paying cash, transferring non-cash asset, bear liability and issuing equity securities, the share of book value of owner's equity of the merged party on the merger date shall be taken as the initial investment cost. The asset reserve is adjusted according to the difference between the initial investment cost of long-term equity investment and the book value of paid combined consideration or issued securities; if the capital is not enough for deduction, the remain earnings are adjusted. Recognition of “one-off” trade when long-term equity investment is composed by merger of entities under common control by multiple steps. Transactions under an “one-off” trade are accounted as a common trade of ownership. Transactions which are not “one-off” trades are recognized for their initial investment cost basing on the share of book value of net asset in the consolidated financial statement of the entities acquired. Balance between the initial investment cost and the book value of the long-term equity investment before merger and the premium paid for the new shares after merger, is adjusted to capital reserves; when the capital reserve is not enough to offset, retained profit shall be adjusted thereof. (2) For the long-term equity investments formed by merger of enterprises under different control, the initial investment cost is recognized by the fair value of combined consideration on purchasing day and related expenses. Long-term equity investment formed by acquisition of entities under different control by trade in multiple stages are accounted separately in the financial statements and consolidated financial statements. 1) In individual financial account, the sum of book value of original equity investment plus new investment cost is recognized as the initial investment cost on cost basis. 55 杭汽轮机股份有限公司 2015 年半年度报告 2) Recognition of “one-off” trade in consolidated financial statements Transactions under an “one-off” trade are accounted as a common trade of ownership. Transactions which are not “one-off” trades are re-measured for their fair value at the day of acquisition. Balance between the fair value and the book value of the long-term equity investment is adjusted to current investment gains; other gains from equity on equity basis before the acquisition day are written over to current gains of at the day of acquisition, but not the gains from re-calculating of changes in net liability or asset by the invested entity. (3) Formed by means other than entity merger: Acquired by cash payment – initial investment cost is the actual amount of payment; Acquired by issuing of equity certificates – initial investment cost is the fair value of equity certificate issued; Acquired by debtor restructuring – initial cost recognized as according to the Enterprise Accounting Standard No.12 – Debtor restructuring; Acquired by trading of non-monetary asset - initial cost recognized as according to the Enterprise Accounting Standard No.12 – Trade of non-monetary assets; 3. Subsequent measurement and recognition of gain/loss Cost basis is adopted in accounting of long-term equity investment in entities under substantial control of the Company; while equity basis is adopted in accounting of investment in affiliates and joint-ventures. 4. Treatment of disposal of subsidiaries by stages till losing of control power (1) Individual account At disposal of equity shares, the balance between book value and actual consideration received is recorded to current gain/loss account. When the retained share equity is composing major influence or joint control with other parties on the invested entity, accounting will be on equity basis; When none of substantial control, joint control, or major influence on the entity, it will be recognized as sellable financial asset and accounted on fair value. (2) Basis of Consolidated Financial Statements 1) Losing of controlling power on a subsidiary through disposal of equity by multiple trades, and not recognized as “one-off” trade: Before losing of control power, the balance of disposal consideration and the share of net asset attributable to the Company on continuous basis since purchasing or merger, is adjusted to capital reserves (capital premium), whereas if the capital premium is not enough to offset the amount, retained profit will be offset at corresponding amount. At losing of control power over a former subsidiary, the retained equity shares shall be re-calculated according to the fair value at the day of losing power. Sum of the consideration obtained from disposal and fair value of the retained equity shares, less the share of net asset attributable to the Company on continuous basis since purchasing or merger, is accounted into investment gains of the period when the control power is disposed, and goodwill shall be offset meanwhile. Other gains related to the equities in formal subsidiary shall be written over to current investment gains at the period when control power was disposed. 2) Losing of controlling power on a subsidiary through disposal of equity by multiple trades, and recognized as “one-off” trade: The multiple trades are treated as one trade that causes losing of control power on a subsidiary. However, the balance between the consideration received from each trade and corresponding share of net asset is recognized as other gains in the consolidated accounts, and transferred collectively to gain/loss account of the period in which the control power was lost. (XIII) Fixed assets 1. Conditions for fixed asset recognition Fixed assets is defined as the tangible assets which are held for the purpose of producing goods, providing services, lease or for operation & management, and have more than one year of service life. Fixed assets are recognized at satisfying of great possibility of benefit inflow and costs are accountable. 2. Depreciation of fixed assets Depreciation age Annual depreciation Categories Basis of depreciation Retain value rate (year) ratio Straight average on Houses & buildings 20-30 4.00% 4.8-3.2 period 56 杭汽轮机股份有限公司 2015 年半年度报告 Equipment & Straight average on 8-15 4.00% 12-6.4 machinery period Transportation Straight average on 4-8 4.00% 24-12 equipment period Straight average on Office equipment 5 4.00% 19.2 period (3) Basis for recognizing the fixed assets under financing lease, Pricing and Depreciation Methods Inapplicable (XIV) Construction in process 1. Construction in process is recognized on the basis of characteristics: very possible economic benefit flow in, cost can be measured reliably. Since the date when the construction in process reaches its useful status as expected, the construction in process is measured by the happened cost Since the date when the construction in process reaches its useful status as expected. 2. When the construction in process reaches its useful status as expected, it is transferred into fixed asset at actual cost. If the construction in process has reached useful status but with completion of project settlement process, it is transferred to fixed asset at the value estimated, and adjustment will happen after completion of project settlement process but no adjustment on depreciation provided previously. Notes :Construction in progress is transferred to fixed assets when the asset is ready for its intended use. (XV) Loan expenses 1. Capitalizing of loan expenses Loan expenses occurred in the Company, which can be categorized to purchasing or construction of assets satisfying the conditions of capitalization, shall be capitalized and accounted into capital costs; while other loan expenses are recognized as expenses and recorded into current income account. 2. Capitalization period of loan expenses (1) Capitalization started as soon as all of these conditions are satisfied: 1) Capital expenditures have occurred; 2) Loan expenses have occurred; 3) Necessary purchasing or construction processes have been started to make the asset usable or sellable. (2) If irregular interruption occurred in the purchasing or construction process of the assets satisfying the capitalizing conditions, and suspended for over successive three months, capitalizing of loan expenses is suspended; loan expenses occurred during the suspension period are recognized as current expenses until the purchasing or construction process resumes. (3) Capitalizing of loan expenses is terminated as soon as the asset satisfying the capitalizing conditions reaches the state of usable or sellable as expected. 3. Rates and amounts of loan expense capitalization Special loans raised for purchasing or construction of assets satisfying the conditions of capitalization, interest to be capitalized will be the actual interest expenses occurred in the current period of loan (including the discount, premium, or amortizing decided on actual interest rate basis), less the interest income from the unused loans in bank account or provisional investment gains; common loans used for purchasing or construction of assets satisfying the conditions of capitalization, the interest to be capitalized will be the weighted average of balance over special loans multiply capitalization rate of common loans. (XVI) Intangible assets (1)Pricing Method, service life and impairment test 1. Intangible assets are land using rights, patents, and non-patent technologies, which are measured at cost basis. 2. For intangible assets with limited useful life, during the use life it is amortized according to the anticipating implementation method of the economic benefit of the intangible asset systematically and reasonably. If can’t recognize the anticipating implementation method, the straight basis is deployed. Items Amortiing years Land using right 50 Other 5 (2) Accounting policy for internal research and development expenditure Expenditures of internal researching projects are accounted into current term gain and loss when happens. The development period expenditures are recognized as intangible assets when fulfill following conditions: (1) The intangible asset is completed and technically possible to be used or sold; (2) With intention to complete the 57 杭汽轮机股份有限公司 2015 年半年度报告 intangible asset for purpose of use or sale; (3) Evidence showing that there are markets or the products produced with using of the intangible asset, or markets of the intangible asset itself, by which the intangible asset may produce financial benefits. Intangible assets used inside the Company must be approved for their usable characters. (4) Developing of the intangible assets are supported by sufficient technical, financial, and other resources, and the intangible assets can be used or sold. (5) Expenditures occurred in developing of the intangible asset may be reliably measured. (XVII) Impairment of partial long-term assets For those long-term assets such as equity investment, fixed assets measured on cost basis, construction-in-process, intangible assets with limited service life, their recoverable amount shall be evaluated as soon as there was evidence indicating impairment at the balance sheet day. For intangible assets such as goodwill from merger or intangible assets with uncertain service lives, impairment test is performed each year whatever there is evidence of impairment or not. Impairment test on goodwill is performed on combination of related assets. When the result of prediction shows that the recoverable amount is lower than its book value, the balance shall be provided impairment provision and accounted into current gain/loss. (XVIII) Long-term amortizable expenses Long-term amortizable expenses which have been paid but with amortizing period over 1 year (not included). Long-term amortizable expenses are recorded at actual amount occurred, and straight amortized to stipulated periods. In case a long-term expense was not benefiting the succeeding periods, then the balance of the account shall be transferred over to current income account. (XIX) Employees’ wage 1. Employees’ wage composes of short-term wages, after-job welfare, dismiss welfare, and other long-term welfares. 2. Accounting of short-term wages In the fiscal period when an employee is providing services, short-term wages actually occurred is recognized as liability, and recorded into current gain/loss account or cost of related asset. 3. Accounting of after-job welfare After-job welfare composes of stipulated saving plan and stipulated beneficiary plan. (1) In the fiscal period when an employee is providing service, the payable amount calculated by the stipulated saving plan is recognized as liability and recorded into current gain/loss or cost of related asset. (2) Accounting of stipulated beneficiary plan is on following steps: 1) On basis of expected accumulation of welfare, estimations on population variables and financial variables, calculating of liabilities from stipulated beneficiary plan, and recognition of the period of related liabilities, are performed on basis of non-bias and accordance actuary. Meanwhile, discount is performed on the liabilities from stipulated beneficiary plan to recognize the current value and service cost of the liabilities from the stipulated beneficiary plan. 2) When there is asset involved in the stipulated beneficiary asset, the deficit or premium from the balance of the current value of liabilities of stipulated beneficiary plan over their fair values is recognized as its net liability or net asset. When there is a premium with a stipulated beneficiary plan, the lower one between the premium and the upper limit of the asset is recognized as the net asset of such stipulated beneficiary asset; 3) At end of period, employees’ wages from stipulated beneficiary plan are recognized by three parts including service cost, net interest of net liability or net asset, and recalculated net asset or liability variation. The first two are recorded into current gain/loss or related asset cost, the third is recorded to other gains, which will not be written back to gain/loss in successive fiscal periods, but the amount can be transferred with the range of equity. 4. Accounting of dismissing welfare Welfares for employees who are dismissed, the earlier one of the following is recognized as employee wage liability, and recorded to current gain /loss: (1) When the Company cannot, on its own call only, retrieve the dismissing welfare provided by dismissing of service plan or suggestion; (2) When the costs or expenses related to restructuring involved in the dismissing welfare are recognized by the Company. 5. Accounting of other long-term employees’ welfares As of long-term welfares provided to the employees, those which satisfy conditions of the stipulated saving plan are treated according to related regulations of stipulated saving plan; those which other than the aforesaid, are treated according to the stipulated beneficiary plan. In viewing of simplifying accounting treatment, employee wage costs are recognized as service costs, the net amounts of interests of other long-term welfare net liability or 58 杭汽轮机股份有限公司 2015 年半年度报告 asset, along with recalculated variations of the both are recorded to the related gain/loss or cost of related asset. (XX) Revenue 1. Recognizing of revenue (1) Sales of goods Sales income is recognized when all of these conditions are satisfied: (1) Major risks and rewards attached to the goods have been transferred to the purchaser; (2) The Company holds neither successive management power which is normally attached to ownership, nor effective control, over the goods which have been sold out; (4) Amount of income may be reliably measured; (5) when the costs, occurred or will occur, may be measured reliably. (2) Providing of services At balance sheet day, those service trades (simultaneously satisfying the requirements of those: income can be measured reliably, related economic benefit will flow in very possibly, transaction procedure can be confirmed reliably, happened and happening cost can be measured reliably) which can be reliably estimated are recognized at the percentage of completion, and progress of completion of service is decided by the portion of costs occurred over the estimated total costs. At balance sheet day, those service trades which can not be reliably estimated, if the happened services cost will be compensated, the services income are recognized according to happened service cost and transited to service cost according to same amount; if the happened services cost will not be compensated, the happened services cost are accounted into current term’s gain or loss and the services income will not be recognized. (3) Giving of asset using rights Income from giving of assets is recognized when satisfying requirements: related economic benefit flows in very possibly, income can be measured reliably. Amount of interest income is calculated according to the time and actual interest rate of the monetary capital is used by other party. Income of using fee is calculated upon the charge period and calculation provided by the related contract or agreement. (4) Construction contracts 1) When the result of the construction contract is able to be evaluated reliably at the balance sheet date, the income and cost of the contract are recognized on completion percentage basis. If the result of the construction contract is not able to be evaluated reliably, but the contract cost may be recovered, the income is recognized at the cost actually recovered, and the cost of the contract is recognized as contract expenses of the current period when it is occurred. 2) When all of the following conditions were satisfied, the result of a fix-amount contract is regarded as can be evaluated reliably: the total income of the contract may be measured reliably, there is great possibility that the financial benefit in relation with the contract will inflow, the actual contract costs may be identified and measured clearly and reliably, the construction progress and the cost to occur are able to be measured reliably. When all of the following conditions are satisfied, the result of a cost-plus-commission contract is regarded as can be evaluated reliably: there is great possibility that the financial benefit in relation with the contract will inflow, the actual costs may be identified and measured clearly and reliably. 3) Contract progress is recognized at the ratio of accumulative actual cost on the predicted complete cost. 4) In case the expected total cost is greater than the total income, the expected loss will be recognized as expense of the current period. If the construction is in process, the balance is accounted as inventory impairment provision; if the contract is not executed, the balance is accounted as expected liability. 2. Practical basis for recognition of revenue Particular methods for recognition of revenue. The Company is mainly engaged in designing, manufacturing, sales, and service of steam turbines and gas turbines falling in the range of rotating and reciprocating machinery, and parts. Recognition of sales in the country shall satisfy: products had been delivered to the buyer and the amount had been fixed. Payment was received or documents received with great possibility of cash inflow. And the cost of the products is able to be measured appropriately. Recognition of sales outside the country shall satisfy: The goods had been filed by the custom and departed with bill of lading obtained. The amount had been fixed, and payment was received or documents received with great possibility of cash inflow. And the cost of the products is able to be measured appropriately. (XXI) Government subsidy 1. Recognition basis and accounting of asset-related government subsidy Government subsidies to the Company for purchasing or acquiring by other means of long-term asset are asset-related government subsidies. They are recognized as deferred income and amortized straightly to their service lives and accounted in current gain/loss. Whereas government subsidy measured by nominal amount are 59 杭汽轮机股份有限公司 2015 年半年度报告 recorded to current gain/loss account. 2. Recognition basis and accounting of income-related government subsidy Government subsidies other than asset-related subsidies are recognized as income-related government subsidies. Those, which are used to cover costs or losses in subsequent periods, are recognized as deferred income and accounted to current gain/loss to the periods of related expenses. Those, which are used to makeup expenses or losses already occurred, are recorded to current gain/loss account. (XXII) Deferred income tax assets/ deferred income tax liabilities 1. Deferred income tax liabilities or assets are recognized at proper rate in the term of retrieving the assets or paying the liabilities according to difference (for not recognized assets and liabilities which tax basis can be recognized, the difference is between the tax basis and the book value) between book value of the assets or liabilities and the tax basis. 2. Deferred income tax assets are recognized limitedly by the income tax which very possibly deduct deductible temporary difference. At balance sheet day, the not-yet recognized deferred income tax assets in previous fiscal term are recognized if have evidence to prove there is enough income tax very possibly to deduct deductible temporary difference. 3. At the balance sheet day, verification will be performed on the book value of differed income tax assets. If it is not possible to obtain enough taxable income to neutralize the benefit of differed income tax assets, then the book value of the differed income tax assets shall be reduced. Whenever obtaining of taxable income became possible, the reduced amount shall be restored. 4. Current income tax and differed income tax are accounted into current gain/loss account as income tax expenditures or gains, but exclude the following income taxes: (1) Merger of enterprises; (2) Transactions or events recognized directly in owners’ equity. (XXIII) Lease Accounting of operational lease When the Company is the leasee, the amount is recorded to asset cost or recognized as gain/loss of current period on straight basis to the periods of lease. Initial direct expenses are accounted into current gain/loss. Contingent rentals are recorded to current gain/loss at actual occurrence. When the Company is the leaser, the amount is recorded to current gain/loss at straight basis to the periods of lease. Initial direct expenses are recorded to current gain/loss other than those with greater amount which are capitalized and recorded to gain/loss of different periods. Contingent rentals are recorded to current gain/loss at actual occurrence. (XXIV). Change of main accounting policies and estimations (1)Change of main accounting policie Remar Content and Reason Vetting process Suitable Time k In order to adapt to the change of market environment, better prevent and The above changes control accounts receivable risks and make Company’s receivable accounts have been accord with relevant risks situation and the proportion of actual loss. The examined and Company decided to change the accounting evaluation of provision for bad adopted at the 19th March 26,2015 debts set up on accounts receivable, reduce and raise the percentage it in 3 meeting of the 6th years and over 3 years respectively and make devaluation provision for full term of Board accounts receivable in line with cautious and objective principle. 2015. (XXV).Other Expenses for workplace safety According to document CQ〔2012〕No.16 issued by National Department of Finance and National Safety Inspection Bureau General, the Company was categorized as machinery production enterprise. Providing of workplace safety funds are to be provided on monthly basis according to the following schedule: 2% provided on the turnover less than RMB10 million; 1% on the amount over RMB10 million and less than RMB100 million; 0.2% on the amount over RMB100 million and less than RMB1 billion; 0.1% on the amount over RMB1 billion and less than RMB5 billion; 0.05% on the amount over RMB5 billion. The above safety expenses are drawn according to national regulations and accounted to costs of related products 60 杭汽轮机股份有限公司 2015 年半年度报告 and recorded to “special reserves” at the same tine. At providing of safety expenses, expense-related costs are deducted from the special reserves. When a safety fund was drawn and composes part of a fixed asset, they are collected under construction-in-process, and recognized to fixed asset when the asset reaches usable status. Meanwhile, the special reserve is deducted by the costs which compose part of the fixed asset, and accumulative depreciation is recognized at the same amount. This fixed asset is not subject to depreciation in successive periods. VI. Taxation 1. Main categories and rates of taxes Category of taxes Tax base Tax rate Sales of goods or providing of taxable VAT 17% labor service Consumption tax Operational tax Taxable turnover 5% City maintenance and construction tax Turnover tax payable 7% Enterprise income tax Amount of income taxable 15%、25% Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate Name Income tax rate The Company 15% Hangzhou Zhongneng Steam Turbine Power Co., Ltd. 15% Zhejiang Steam Turbine Packaged Technology Development Co., 15% Ltd. Hangzhou Steam Turbine Casting Co., Ltd. 15% Zhejiang Huayuan Steam Turbine Machinery Co.,Ltd. 15% Hangzhou Guoneng Steam Turbine Engineering Co.,Ltd. 15% Other Subsidiary(Domestic) 25% (II) Preferential tax 1. According to the document “Notice for Qualification of High-tech Enterprises” (GKHZD〔2015〕No.29) issued by Department of Science and Technology High-tech Development Center, the Company along with Hangzhou Zhongneng Steam Turbine Power Co., Ltd. and Zhejiang Packaged Technologies Development Co., Ltd. – subsidies of the Company, were qualified as high-tech enterprises for term of three years. Therefore they enjoy 15% of tax for 2014-2016. 2. According to the document ZKFGD〔2013〕No.294 titled “Notice for Recognition of 491 High-tech Enterprises” issued jointly by Zhejiang Bureau of Science and Technology, Zhejiang Bureau of Finance, Zhejiang National Tax Bureau, and Zhenjiang Local Tax Bureau, Hangzhou Steam Turbine Casting Co., Ltd. was recognized as a High-Tech Enterprise, therefore enjoys 15% of income tax rate from 2013 to 2015. 3. According to the document “Notice for Qualification of High-tech Enterprises” (GKHZD〔2015〕No.36) issued by Department of Science and Technology High-tech Development Center, Zhejiang Huayuan Steam Turbine Machinery Co., Ltd. and Hangzhou Guoneng Steam Turbine Engineering Co., Ltd. – subsidies of the Company, were renewed or their qualifications as high-tech enterprises. Therefore they enjoy 15% of tax for 2014-2016. 3. Other Hangzhou Zhongneng Steam Turbine Power (Indonesia) Co., Ltd. registered in Indonesia overseas subsidiaries, the applicable local relevant tax laws and regulations. 61 杭汽轮机股份有限公司 2015 年半年度报告 VII. Notes to the Consolidated Financial Statements 1. Monetary capital In RMB Items End of term Beginning of term Cash in stock 330,003.92 307,654.85 Bank deposit 546,521,114.46 562,455,906.65 Other monetary fund 9,716,724.80 51,194,502.41 Total 556,567,843.18 613,958,063.91 Incl:Total of accounts saved overseas 7,498,892.65 9,198,137.90 (2) Other statements Other monetary fund composes of RMB9,516,724.8 of security for bank acceptance notes and RMB200,000.00 of security for bank guarantee letter. Both under limitation of using. 2. Bills receivable (1) Notes receivable listed by category In RMB Items End of term Beginning of term Bank acceptance 680,403,170.35 689,241,938.01 Commercial acceptance 130,000.00 11,868,000.00 Total 680,533,170.35 701,109,938.01 (2) Notes receivable pledged by the Company at the period-end In RMB Items Amount on pledge Bank acceptance 86,660,069.47 Commercial acceptance Total 86,660,069.47 (3) Notes receivable which had endorsed by the Company or had discounted and had not due on the balance sheet date at the period-end In RMB Amount of recognition termination Amount of not terminated Items at the period-end recognition at the preriod -end Bank acceptance 404,692,563.77 Commercial acceptance Total 404,692,563.77 62 杭汽轮机股份有限公司 2015 年半年度报告 4. Accounts receivable (1) Accounts receivable disclosed by category In RMB Closing balance Opening balance Bad debt Book balance Book balance Bad debt provision provision Categoty Withdra Book Withdraw Book Proporti wal value Amou Proporti al value Amount Amount Amount on proporti nt on proportio on n Receivables with major individual amount and bad debt provision provided individually receivables with major individual amount and bad debt provision provided individually Account receivable 2,969,4 with minor individual 2,754,22 599,147, 2,155,076 580,487,9 2,388,919,6 amount but bad debt 98.93% 21.75% 07,602. 99.01% 19.55% 4,453.66 788.75 ,664.91 60.59 41.98 provision is provided 57 Receivables with major individual amount and bad debt provision provided individually 29,819,6 29,819,6 29,819, 29,819,60 1.07% 100.00% 0.99% 100.00% receivables with not 07.69 07.69 607.69 7.69 major individual amount and bad debt provision provided individually 2,999,2 2,784,04 628,967, 2,155,076 610,307,5 2,388,919,6 Total 100.00% 22.59% 27,210. 100.00% 20.35% 4,061.35 396.44 ,664.91 68.28 41.98 26 Receivable accounts with large amount individually and bad debt provisions were provided Not applicable Account receivable in the portfolio which are provided bad debt provision on age basis In RMB End of term Age Book balance Bad debt provision Providing rate% Subitem within 1 year Within 1 year 1,073,018,085.92 53,650,904.32 5.00% 63 杭汽轮机股份有限公司 2015 年半年度报告 Subtotal within 1 year 1,073,018,085.92 53,650,904.32 5.00% 1-2 years 785,763,881.43 78,576,388.16 10.00% 2-3 years 419,854,720.90 125,956,416.29 30.00% Over 3 years 475,587,765.41 340,964,079.98 3-4 years 299,324,161.24 179,594,496.75 60.00% 4-5 years 74,470,104.72 59,576,083.78 80.00% Over 5 years 101,793,499.45 101,793,499.45 100.00% Total 2,754,224,453.66 599,147,788.75 (2) Receivable accounts written back or retrieved in the report period Bad dept provision of RMB23,258,342.99 provided current period with no written back or retrieving of bad debt. (3) Receivable accounts actually written off in the report period In RMB Items Amount Zhejiang Jiahua Energy Chemical Co., Ltd. 1,920,000.00 Oriental Electrical Group .Beijing Company 1,599,316.10 Other 1,078,382.00 Of which the significant actual write-off accounts receivable: In RMB Whether occurred from the Name of the units Nature Amount Reason Process related transactio ns The examined and adopted to Zhejiang Jiahua Energy Chemical Co., Difficult to Goods 1,920,000.00 General manager of the office No Ltd. recover meeting The examined and adopted to Oriental Electrical Group .Beijing Difficult to Goods 1,599,316.10 General manager of the office No Company recover meeting The examined and adopted to Difficult to Other Goods 1,078,382.00 General manager of the office No recover meeting Total -- 4,597,698.10 -- -- -- (4) Top 5 of the closing balance of the accounts receivable colleted according to the arrears party Total accounts receivable due from the top five debtors of the Group in the current period is RMB 1,350,142,518.35, accounting for 49.02% of the total accounts receivable as at the end of the current period and the total provision for bad and doubtful debts made as at the end of the current period is RMB 254,211,430.02. 4. Prepayment (1) Age analysis 64 杭汽轮机股份有限公司 2015 年半年度报告 In RMB End of term Beginning of term Age Amount Proportion% Amount Proportion% Within 1 year 158,806,017.77 82.53% 145,672,687.02 84.68% 1-2 years 17,286,433.54 8.98% 23,007,830.11 13.37% 2-3 years 4,683,313.01 2.43% 2,055,629.60 1.20% Over 3 years 11,639,501.50 6.05% 1,286,621.66 0.75% Total 192,415,265.82 -- 172,022,768.39 -- (2) Advance payment to the top five payees of the ending balance collected based on the payees of the advance payment The total amount of advance payment to the top five payees of the ending balance collected based on the payees of the advance payment was RMB41,284,344.85, taking 21.46% of the toal ending balance of the advance payment. 65 杭汽轮机股份有限公司 2015 年半年度报告 5. Other account receivable (1) Detailed categories In RMB End of term Beginning of term Book balance Bad debt provision Book balance Bad debt provision Category Proporti Book value Proporti Book value Amount Amount Proportion Amount Amount Proportion on on Other receivables with major individual amount and had debt provision provided individually Other receivables provided bad debt provision in cridit risk groups 31,141,322.19 89.35% 4,285,420.74 13.76% 26,855,901.45 30,275,426.55 89.08% 4,893,203.23 16.16% 25,382,223.32 Other account receivable with minor individual amount but bad debt provision is provided 3,710,320.94 10.65% 3,710,320.94 100.00% 3,710,320.94 10.92% 3,710,320.94 100.00% Total 34,851,643.13 100.00% 7,995,741.68 25.32% 26,855,901.45 33,985,747.49 100.00% 8,603,524.17 25.32% 25,382,223.32 Other receivables with individually significant amount and provision for bad and doubtful debts individually provided at the end of the reporting period. Not applicable 2) Other receivable accounts in the group on which bad debt provisions are provided on age basis In RMB End of term Age Other receivable account Bad debt provision Providing rate % Subitem within 1 year Within 1 year 19,455,067.16 972,753.35 5.00% Subtotal within 1 year 19,455,067.16 972,753.35 5.00% 1-2 years 7,195,863.80 719,586.38 10.00% 2-3 years 1,601,341.90 480,402.57 30.00% Over 3 years 2,889,049.33 2,112,678.44 3-4 years 1,886,458.73 1,131,875.24 60.00% 4-5 years 108,937.00 87,149.60 80.00% Over 5 years 893,653.60 893,653.60 100.00% 66 杭汽轮机股份有限公司 2015 年半年度报告 Total 31,141,322.19 4,285,420.74 Other receivables with provision for bad and doubtful debts based on the balance percentage method in the portfolio Not applicable Other receivables with provision for bad and doubtful debts based on the other method in the portfolio Not applicable (2) Bad debt provision accrual, received or reversed in current period Bad debt provision of RMB-607,782.49 was provided this period without recovering or writing back of provisions. (3) Combination of other receivable accounts In RMB Account property End of term Beginning of term Deposit 16,394,327.53 23,526,521.57 Provisional payment receivalbe 5,224,904.77 4,720,051.08 Petty cash 7,695,144.07 920,428.38 Other 5,537,266.76 4,818,746.46 Total 34,851,643.13 33,985,747.49 (4) Top 5 of the closing balance of the accounts receivable colleted according to the arrears party In RMB Account Percentage in total other Name of the company Book balance Age Bad debt provision property receivable % Deposit in Shanghai Customs Waigaoqiao Office 3,710,320.94 Over 3 years 10.65% 3,710,320.94 custom Guodian Trust Bidding Co., Ltd. Bidding deposit 3,188,750.00 0-4 years 9.15% 520,597.50 Investment from indonesia Investment 3,059,500.00 1-2 years 8.78% 305,950.00 companyreceivable Inner Mongolia Bidding Co., Ltd. Bidding deposit 550,000.00 Over 3 years 1.58% 330,000.00 Guodian Longyuan Power Technology Bidding deposit 500,000.00 1-2 years 1.43% 50,000.00 Engineering Co., Ltd. 67 杭汽轮机股份有限公司 2015 年半年度报告 Jian Group Co., Ltd. Bidding deposit 500,000.00 Within 1 year 1.43% 25,000.00 Total -- 11,508,570.94 -- 33.02% 4,941,868.44 6. Inventories (1)Details In RMB End of term Beginning of term Items Impairment Impairment Book balance Book value Book balance Book value provision provision Raw materials 425,070,428.08 425,070,428.08 461,117,423.30 461,117,423.30 Product in process 614,444,364.92 614,444,364.92 539,174,718.21 539,174,718.21 Products in stock 1,017,342,060.27 158,244.58 1,017,183,815.69 593,940,331.76 158,244.58 593,782,087.18 Turnover materials Consumable biological assets Unsettled assets formed from the construction contact Total 2,056,856,853.27 158,244.58 2,056,698,608.69 1,594,232,473.27 158,244.58 1,594,074,228.69 (2)Inventory depreciation provision In RMB Increased this period Decreased this period Items Beginning of term End of term Provided Other Written back or off Other Raw materials Product in process Products in stock 158,244.58 158,244.58 Turnover materials 68 杭汽轮机股份有限公司 2015 年半年度报告 Consumable biological assets Unsettled assets formed from the construction contact Total 158,244.58 158,244.58 7. Other current asset In RMB Items End of term Beginning of term Bank financing products 414,000,000.00 378,800,000.00 Input tax deductible 18,903,394.85 2,385,481.70 Prepaid income tax 884,753.86 Total 432,903,394.85 382,070,235.56 8. Sellable financial asset (1)Details In RMB End of term Beginning of term Items Book balance Impairment provision Book value Book balance Impairment provision Book value Available-for –sale Liabilities instruments Available-for –sale equity instruments 504,966,453.19 504,966,453.19 498,990,862.94 498,990,862.94 Measured by fair value Measured by cost 504,966,453.19 504,966,453.19 498,990,862.94 498,990,862.94 69 杭汽轮机股份有限公司 2015 年半年度报告 Total 504,966,453.19 504,966,453.19 498,990,862.94 498,990,862.94 Amount of impairment (2) Available-for-sale financial assets measured by cost at the period-end In RMB Book balance Impairment provision Shareholding proportion Cash bonus of the Investee Period-B Period Period-begin Increase Decrease Period-end Increase Decrease among the reporting period egin -end investees Bank of Hangzhou Co.,Ltd. 390,954,040.00 390,954,040.00 6.92% 27,742,368.00 Greenesol Co.(India) 5,534,773.22 5,534,773.22 37.00% Hangzhou Changdi Equity Investment 27,522,049.72 5,975,590.25 33,497,639.97 2.97% Partnership(Limited liability) Hangzhou Steam Turbine 30,000,000.00 30,000,000.00 15.00% Engineering Co., Ltd. Zhejiang Sanxin Automatic 600,000.00 600,000.00 6.00% Engineering Co., Ltd. Zhejiang Zhongkong Solar 15,000,000.00 15,000,000.00 5.27% Energy Technology Co., Ltd. Zhejiang Tianhang Steam Turbine Auxiliary 10,000,000.00 10,000,000.00 33.33% 1,000,000.00 Machinery Co., Ltd. 70 杭汽轮机股份有限公司 2015 年半年度报告 Wuxi Xinchang Steel Tube 19,380,000.00 19,380,000.00 18.00% Co., Ltd. Total 498,990,862.94 5,975,590.25 504,966,453.19 -- 28,742,368.00 71 杭汽轮机股份有限公司 2015 年半年度报告 9. Fixed assets (1)Details In RMB Transportation Items Houses & buildings Machinery equipment Other Total equipment 1. Original book value 1.Beginning of term 426,487,329.57 931,262,735.06 33,152,494.69 96,116,812.56 1,487,019,371.88 2.Increased currentperiod 80,000.00 7,201,360.99 61,965.81 1,903,148.11 9,246,474.91 (1)Purchase 4,677,422.22 61,965.81 1,494,536.33 6,233,924.36 (2)Transferredinfrom 80,000.00 2,523,938.77 408,611.78 3,012,550.55 construction in process (3)Increase ofenterprise consolidation 3.Decreased currentperiod 1,799,267.00 38,000.00 162,205.00 1,999,472.00 (1)Disposal 1,799,267.00 38,000.00 5,180.00 1,842,447.00 (2)Other 157,025.00 157,025.00 4.End of term 426,567,329.57 936,664,829.05 33,176,460.50 97,857,755.67 1,494,266,374.79 II. Accumulated depreciation 1.Beginning of term 151,139,947.58 560,699,909.96 19,348,619.55 71,014,360.27 802,202,837.36 2.Increased currentof term 6,229,569.97 31,312,518.22 1,919,158.60 3,803,725.03 43,264,971.82 (1)Provision 6,229,569.97 31,312,518.22 1,919,158.60 3,803,725.03 43,264,971.82 3.Decreased current period 1,392,494.74 13,537.45 155,924.00 1,561,956.19 (1)Disposal 1,392,494.74 13,537.45 5,180.00 1,411,212.19 (2)Other 150,744.00 150,744.00 4.End of term 157,369,517.55 590,619,933.44 21,254,240.70 74,662,161.30 843,905,852.99 III. Impairment provision 1,504,928.24 4,074,858.43 1,203,366.99 6,783,153.66 1.Beginning of term 1,504,928.24 4,074,858.43 1,203,366.99 6,783,153.66 2.Increased current period (1)Provision 3.Decreased current period (1)Disposal 4.End of term 1,504,928.24 4,074,858.43 1,203,366.99 6,783,153.66 IV. Book value 1.Closing book value 267,692,883.78 341,970,037.18 11,922,219.80 21,992,227.38 643,577,368.14 2.Opening book value 273,842,453.75 366,487,966.67 13,803,538.74 23,899,085.30 678,033,380.86 10. Construction in process 72 杭汽轮机股份有限公司 2015 年半年度报告 (1)Details In RMB End of term Beginning of term Impairme Impairme Items Boook balance nt Book value Boook balance nt Book value provision provision Construction in process of 79,261,494.76 79,261,494.76 60,805,346.48 60,805,346.48 parent Company(185 projects) Completed project of parent 659,976.07 659,976.07 6,496,918.11 6,496,918.11 Company(10 projects) Tangxi Workshop PhaseII, 15,433,217.90 15,433,217.90 13,036,376.35 13,036,376.35 Gouneng Company Project of steam turbine heavy 9,349,575.83 9,349,575.83 5,718,626.32 5,718,626.32 industry Minor purchasing of 1,477,988.02 1,477,988.02 1,780,341.88 1,780,341.88 equipment by subsidiaries Prepayment for equipment or 0.00 0.00 1,631,650.00 1,631,650.00 projects Total 106,182,252.58 106,182,252.58 89,469,259.14 89,469,259.14 (2) Variation of costs of major construction-in-process 73 杭汽轮机股份有限公司 2015 年半年度报告 In RMB Interest Other Accumulated Ratio of interest Beginning of Increased this Transferred Accumulate of interest capitaliz Fund Project Budget decrease End of term input on budget Progress capitalizing this term period fixed assets capitalized ed this recourse s % term % term Construction in process of Under parent 229,649,322.00 60,805,346.48 18,456,148.28 0.00 79,261,494.76 34.51% Construc Other Company tion (185 projects) Completed project of Complet parent 8,150,000.00 6,496,918.11 279,367.54 6,116,309.58 0.00 659,976.07 83.14% Other ed Company(10 projects) Tangxi Workshop Under PhaseII, 29,510,000.00 13,036,376.35 2,396,841.55 0.00 0.00 15,433,217.90 52.30% Construc Other Gouneng tion Company Project of Under steam turbine 2,084,000,000.00 5,718,626.32 3,647,171.73 16,222.22 9,349,575.83 0.45% Construc Other heavy tion industry 74 杭汽轮机股份有限公司 2015 年半年度报告 Minor Under purchasing of 1,780,341.88 2,228,202.55 2,530,556.41 1,477,988.02 Construc Other equipment by tion subsidiaries Prepayment 1,631,65 Complet for equipment 1,631,650.00 0.00 Other 0.00 ed or projects 1,631,65 Total 2,351,309,322.00 89,469,259.14 27,007,731.65 8,663,088.21 106,182,252.58 -- -- -- 0.00 75 杭汽轮机股份有限公司 2015 年半年度报告 11. Intangible assets (1)Details In RMB Not patent Items Land using right Patent Other Total technology I. Original book value 1.Beginning of term 332,298,312.33 200,000.00 260,000.00 332,758,312.33 2.Increased current period 8,000,000.00 68,376.07 8,068,376.07 (1)Purchase 68,376.07 68,376.07 (2)Internal research and development (3)Increased 8,000,000.00 8,000,000.00 fromenterprise merger 3.Decreased amountof the period (1)Disposal 4.End of term 332,298,312.33 200,000.00 8,000,000.00 328,376.07 340,826,688.40 II. Accumulative depreciation 1.Beginning of term 28,456,359.23 58,000.00 143,333.33 28,657,692.56 2.Increased amount of the 3,586,665.01 28,000.00 45,419.06 3,660,084.07 period (1)Provision 3,586,665.01 28,000.00 45,419.06 3,660,084.07 3.Decreased current period (1)Disposal 4.End of term 32,043,024.24 86,000.00 188,752.39 32,317,776.63 III. Impairment provision 1.Beginning of term 2.Increased amount of the period (1)Provision 3.Decreased current period (1)Disposal 4.End of term IV. Book value 1.Closing book value 300,255,288.09 114,000.00 8,000,000.00 139,623.68 308,508,911.77 2.Opening book value 303,841,953.10 142,000.00 116,666.67 304,100,619.77 76 杭汽轮机股份有限公司 2015 年半年度报告 12. Long-term amortizable expenses In RMB Items Beginning of term Increased this period Amortized this term Other decrease End of term Redecoration 1,041,796.52 1,041,796.52 Total 1,041,796.52 1,041,796.52 13. Deferred income tax asset and deferred income tax liabilities (1) Deferred income tax assets not neutralized yet In RMB End of term Beginnin gof term Items Deductible provisional Deferred income tax Deductible provisional Deferred income tax differences asset differences asset Bad debt provision 643,871,901.60 100,282,203.75 625,774,885.64 97,116,519.78 Internal trade profit not 38,030,586.68 5,783,887.33 31,366,833.60 4,784,324.37 realized Deductible losses Temporary difference such as amortizing of 6,567,225.16 985,083.78 6,567,225.16 985,083.78 software expense Total 688,469,713.44 107,051,174.86 663,708,944.40 102,885,927.93 (2) Details of taxable differences and deductible differences In RMB End of term Beginning of term Items Taxable provisional Deferred income tax Taxable provisional Deferred income tax difference liability difference liability Revaluation surplus in business combination not under common control Changes in fair value of tradable financial assets Accumulated 6,783,153.66 1,017,473.05 6,783,153.66 1,017,473.05 depreciation Total 6,783,153.66 1,017,473.05 6,783,153.66 1,017,473.05 (3)Deferred income tax assets and liabilities are presented as net amount after neutralization In RMB Deferred income tax Deductible or taxable Deferred income tax Deductible or taxable asset or liability after provisional difference asset or liability after provisional difference Items neutralizing at end of after neutralizing at end neutralizing at end of after neutralizing at end report period of report period report period of report period 77 杭汽轮机股份有限公司 2015 年半年度报告 Deferred income tax 107,051,174.86 102,885,927.93 asset Deferred income tax 1,017,473.05 1,017,473.05 liability (3) Details of income tax assets not recognized In RMB Items End of term Beginning of term Deductible provisional differences 20,578.50 77,605.05 Recoverable losses 8,184,275.62 2,086,222.26 Total 8,204,854.12 2,163,827.31 (4) The un-recognized deductible losses of deferred income tax assets will due in the following years: In RMB Year End of term Beginning of term Remark 2017 873,013.84 873,013.84 2018 744,962.67 744,962.67 2019 468,245.75 468,245.75 2020 6,098,053.36 Total 8,184,275.62 2,086,222.26 -- 14.Short-term loans (1)Details In RMB Year End of term Beginning of term Loan by pledge 10,000,000.00 10,000,000.00 Mortgage loan 83,300,000.00 88,600,000.00 Guarantee loan 100,000,000.00 100,000,000.00 Credit loan Total 193,300,000.00 198,600,000.00 15.Bill payable In RMB Type End of term Beginning of term Tcommercial acceptance bill Bank acceptance 123,907,495.41 150,763,452.14 Total 123,907,495.41 150,763,452.14 16. Account payable (1)Details In RMB 78 杭汽轮机股份有限公司 2015 年半年度报告 Items End of term Beginning of term Goods 923,983,584.00 689,452,672.67 Payment for equipment and projects 38,127,538.36 73,633,046.25 Total 962,111,122.36 763,085,718.92 17. Advances received (1)Details In RMB Items End of term Beginning of term Goods 1,656,586,126.69 1,374,736,209.67 Total 1,656,586,126.69 1,374,736,209.67 18. Employees’ wage payable (1) Details In RMB Items Beginning of term Increased this period Decreased this period End of term I. Short-term wages 43,878,015.68 284,703,727.36 300,962,743.66 27,618,999.38 II. Welfare afterleaving of position-fixed 21,794,690.41 36,738,467.55 44,594,358.53 13,938,799.43 provision scheme III. Dismissing welfare 40,618.10 40,618.10 IV.Other welfare within 1 year Total 65,672,706.09 321,482,813.01 345,597,720.29 41,557,798.81 (2) Details of short term wages In RMB Items Beginning of term Increased this period Decreased this period End of term 1.Wage, bonus, 28,767,519.81 200,038,146.02 222,915,191.64 5,890,474.19 allowance and subsidies 2. Employee welfare 26,682,218.34 22,034,521.34 4,647,697.00 3. Social insurance 7,648,459.07 23,185,036.24 23,256,811.23 7,576,684.08 Incl. Medical insurance 7,056,425.03 20,171,096.11 20,127,422.86 7,100,098.88 Labor injury insurance 194,756.44 1,011,155.62 1,042,189.71 163,722.35 Maternity insurance 397,277.00 2,002,784.51 2,087,198.66 312,862.85 4. Housing fund 220,900.96 26,151,501.00 26,145,995.00 226,406.96 5. Labour union fee and 6,606,703.84 8,646,825.76 5,975,792.45 9,277,737.15 employee education fee 6.Short –term compensated absences 7.Short-term profit 634,432.00 634,432.00 79 杭汽轮机股份有限公司 2015 年半年度报告 shareing scheme Total 43,878,015.68 284,703,727.36 300,962,743.66 27,618,999.38 (3) Details of fixed provision scheme In RMB Items Beginning of term Increased this period Decreased this period End of term 1.Basic pension 4,681,929.48 24,076,008.98 25,045,828.38 3,712,110.08 insurance 2. Unemployment 664,347.08 2,541,744.59 2,803,025.91 403,065.76 insurance 3. Enterprise annual fee 16,448,413.85 10,120,713.98 16,745,504.24 9,823,623.59 Total 21,794,690.41 36,738,467.55 44,594,358.53 13,938,799.43 19. Tax payable In RMB Items End of term Beginning of term VAT 6,803,669.36 64,272,374.25 Consumption tax Operational tax 43,540.60 5,570.00 Enterprise income tax 5,873,676.66 48,371,910.29 Individual income tax 2,918,354.05 2,395,496.64 City maintenance and construction tax 619,621.39 4,901,454.49 Property tax 39,647.76 1,944.00 Education surtax 276,363.87 2,113,092.00 Local water source foundation 175,984.25 1,398,939.85 Stamp tax 9,541.85 43,704.27 Local water source construction funds 1,941,765.02 2,584,778.06 Price adjustment foundation 1,996.88 Disabled persons 1,996.88 Land use tax 918,480.00 Total 19,622,641.69 126,091,260.73 20.Other account payable (1)Details In RMB Items End of term Beginning of term Deposite 851,060.10 2,424,372.25 Provisional account payable 18,346,517.77 26,127,465.27 Other 7,161,818.38 1,046,051.60 80 杭汽轮机股份有限公司 2015 年半年度报告 Total 26,359,396.25 29,597,889.12 22.Differed income In RMB Increased this Decreased this Items Beginning of term End of term Cause period period Government subsidy 8,252,705.00 108,000.00 1,252,350.00 7,108,355.00 Total 8,252,705.00 108,000.00 1,252,350.00 7,108,355.00 -- Details of government subsidies In RMB Amount New subsidy Other transferred to Asset-related or Items Beginning of term in current chang End of term non-operational income-related period es income 2014 Hangzhou Grants on 100,000.00 100,000.00 Income-related safetypro Subsidy for Intellectual Patent 2013 8,000.00 8,000.00 Income-related Financial allocation of advance 111,250.00 111,250.00 Asset-related manufacturing base Finance subsidy for casting 5,901,165.00 997,380.00 4,903,785.00 Asset-related project Financial subsidy for Provincial industrial transformation and 800,000.00 160,000.00 640,000.00 Asset-related upgrading Financial subsidy of Industry 345,360.00 57,560.00 287,800.00 Asset-related project Subsidy for casting project 345,360.00 345,360.00 Asset-related Financial subsidy for Circular 136,920.00 11,410.00 125,510.00 Asset-related economy The renovation project Subsidy 78,000.00 26,000.00 52,000.00 Asset-related Government subsidy for industrial entities from Yuhang 534,650.00 534,650.00 Asset-related District Government in the 2nd half of 2009 Total 8,252,705.00 108,000.00 1,252,350.00 7,108,355.00 -- 23.Other non-current Liability 81 杭汽轮机股份有限公司 2015 年半年度报告 In RMB Items End of term Beginning of term Special payable 5,084,464.00 Total 5,084,464.00 24.Share capital In RMB Change of current period(+、—) Beginning of Issuing of new Transferred End of term term Bonus shares Other Subtotal shares from reserves Total of capital 754,010,400.00 754,010,400.00 shares 25. Capital reserves In RMB Items Beginning of term Increased this period Decreased this period End of term Capital premium 81,815,220.00 81,815,220.00 Other capital reserves 57,775,125.09 57,775,125.09 26.Other Comprehensive income In RMB Occurred current term Less:Accounted Amount Less: as other gains Attributable Attributable Beginning of occurred Incom Items previously but to the parent to minority End of term term before income e tax transferred to Company shareholders tax of the expen gain/loss this after tax after tax period ses period 1.Other comprehensive income that will not be reclassified subsequently to profit or loss Indluding : Change as a result of remeasurement of the net defined benefit plan liability or asset Share of other comprehensive income of the investee underthe equity method that will not be reclassified to profit or loss II. Other Comprehensive income that will -640,401.72 -373,143.88 -158,883.17 -214,260.71 -799,284.89 be reclassified subsequently to profit or 82 杭汽轮机股份有限公司 2015 年半年度报告 loss Indluding:Share of other comprehensive income of the investee under the equity method that w8ill be reclassified to profit or loss Gains or losses on changes in fair value of available-for-sale financial assets Gains or losses on reclassification of held-to-maturityinvestments to available-for –sale financial assets Effective portion of gains or losses on cash flow hedges Translation differences of financial statements denominated in foreign -640,401.72 -373,143.88 -158,883.17 -214,260.71 -799,284.89 currencies Total -640,401.72 -373,143.88 -158,883.17 -214,260.71 -799,284.89 27.Special reserves In RMB Items Beginning of term Increased this period Decreased this period End of term Labor safety expenses 24,603,149.96 1,239,471.57 888,519.53 24,954,102.00 Total 24,603,149.96 1,239,471.57 888,519.53 24,954,102.00 Notes: According to the “Notice for Provision of Labor Safety Fund” (CQD〔2012〕No.16) issued by the Department of Finance and Safety Inspection Bureau General on February 14, 2012, the labor safety fund provided this period was RMB1,239,471.57, and RMB888,519.53was used. 28. Surplus reserves In RMB Items Beginning of term Increased this period Decreased this period End of term Statutory surplus 621,112,807.78 621,112,807.78 reserves Arbitrarily surplus reserve Reserve funds Enterprise development funds 83 杭汽轮机股份有限公司 2015 年半年度报告 Other Total 621,112,807.78 621,112,807.78 29. Retained profit In RMB Items Current term Same period of last term Before adjustment: Retained profits at the end of priodyear Adjustment: Total retained profits at the beginning of year After adjustment: Retained profits at the beginning of 2,911,921,943.21 2,736,802,630.30 year Add:Net profit attributable to shareholders of the -10,282,333.32 196,174,851.01 parent Company for the period Less:Appropriation to statutory surplus reserve Appropriation to discretionary surplus reserve Appropriation to general risk reserve Ordinary shares’ dividends payable 75,401,040.00 150,802,080.00 Ordinary shares’ dividends converted into share capital Other 502.09 Retained profits at the end of the period 2,826,238,569.89 2,782,174,899.22 As regards the details of adjusted the beginning undistributed profits (1)As the retroactive adjustment on Enterprise Accounting Standards and its related new regulations, the affected beginning undistributed profits are RMB 0.00. (2) As the change of the accounting policy, the affected beginning undistributed profits are RMB 0.00. (3) As the correction of significant accounting error, the affected beginning undistributed profits are RMB 0.00 . (4) As the change of consolidation scope caused by the same control, the affected beginning undistributed profits are RMB 0.00. (5) Other adjustment of the total affected beginning undistributed profits are RMB 0.00 . 30. Business income and Business cost In RMB Occurred current term Occurred in previous term Items Income Cost Income Cost 84 杭汽轮机股份有限公司 2015 年半年度报告 Main Business 1,051,651,934.26 661,731,977.04 1,739,190,751.12 1,071,939,995.03 Other 3,344,391.98 777,370.14 4,171,891.15 2,506,855.13 Total 1,054,996,326.24 662,509,347.18 1,743,362,642.27 1,074,446,850.16 31. Business tax and surcharge In RMB Items Occurred current term Occurred in previous term Consumption tax Business tax 76,064.57 488,987.28 City maintenance and construction tax 3,597,396.78 6,332,862.90 Education surtax 1,596,580.15 2,898,601.19 Resource tax Local education surcharges 1,064,551.92 1,706,222.57 Total 6,334,593.42 11,426,673.94 32. Sales expenses In RMB Items Occurred current term Occurred in previous term Employees’ remunerations 27,276,709.31 26,190,370.61 Transportation 17,125,216.83 15,768,193.46 Business trips 8,118,609.81 9,946,751.67 Business reception expenses 3,388,749.62 3,083,101.34 Conferences 1,233,208.24 1,471,227.51 Consulting service fee 5,715,017.95 5,576,202.81 Insurance for turbine unit 132,272.45 446,352.77 Warranty expense 907,943.92 97,254.34 Product exhibition 475,420.96 521,582.74 Office expenses 398,913.10 259,147.19 Others 3,162,511.90 4,837,789.75 Total 67,934,574.09 68,197,974.19 33.Administrative expense In RMB Items Occurred current term Occurred in previous term Employees’ remunerations 150,393,259.60 161,065,363.45 R&D expenses 107,033,616.25 77,853,332.85 Asset depreciation and amortizing 10,524,580.76 7,032,780.50 Business reception expenses 6,689,781.94 6,166,377.83 House rental, property management, water and power 6,764,416.69 4,951,988.06 85 杭汽轮机股份有限公司 2015 年半年度报告 Traveling fees 2,928,486.47 2,492,300.79 Taxes 1,819,584.25 5,464,108.25 Material, low-value-consumable 1,517,319.57 1,971,131.66 Office expenses 1,867,126.81 1,632,507.20 Maintaining 1,516,499.13 1,583,476.71 Others 24,115,191.43 28,586,096.50 Total 315,169,862.90 298,799,463.80 34. Financial expenses In RMB Items Occurred current term Occurred in previous term Interest expense 6,368,172.77 10,430,724.17 Less: Incoming interests 3,258,526.77 4,439,655.78 Exchange gains/losses 600,522.74 2,268,764.67 Commission 1,185,235.00 726,302.24 Other 37,036.60 216,351.42 Total 4,932,440.34 9,202,486.72 35. Asset impairment loss In RMB Items Occurred current term Occurred in previous term 22,650,560.50 55,223,094.46 I .Losses for bad debts II. Losses for falling price of inventory III. Losses of available for sale financial assets impairment IV.Impairment on held-to-mathurity investments V.Impairment on long-term equity investment VI.Impairment on investment properties VII.Impairment on fixed assets VIII. Impairment on construction materials IX. Impairment on construction in progress 86 杭汽轮机股份有限公司 2015 年半年度报告 X. Impairment on bearer biological assets XI. Impairment on oil and gas assets XII. Impairment on intangible assets XIII. Impairment on goodwill XIV.Other Total 22,650,560.50 55,223,094.46 36. Investment income In RMB Occurred in previous Items Occurred current term term Long-term equity investment income by equity method Investment income from the disposal of long-term equity investment Investment income from holding the financialasset of which fair value recognized in profit or loss Investment income from disposal of financialassets measured by fair value with changes in fair value recognised in profit or loss Hold the investment income during from available-for-sale financial assets Investment income gain from available for sale financial assets 28,742,368.00 24,118,640.00 Investment income from the disposal of available-for-sale financial assets Investment income from disposal of financialassets available for sale Reverse repurchase treasury investment income 10,489,094.05 9,549,596.76 Total 39,231,462.05 33,668,236.76 37. Non-Operation income In RMB Recorded in the amount of the Items Occurred current term Occurred in previous term non-recurring gains and losses Total gains from disposal of 29,583.00 347,012.69 29,583.00 non-current assets 87 杭汽轮机股份有限公司 2015 年半年度报告 Including:Gains from disposal 29,583.00 347,012.69 29,583.00 of fixed assets Gains from disposal of intangible assets Gains from debt restructuting Non-monetary assets exchangegains Accepting donations Government Subsidy 3,309,950.00 4,003,211.00 3,309,950.00 Compensation income 2,763,960.00 7,693,940.02 63,960.00 Payment not to be paid 150,000.00 Other 181,713.55 2,881,713.55 Total 6,285,206.55 12,194,329.71 6,285,206.55 Government subsidy reckoned into current gains/losses In RMB Amount of last Assets-related/income Items Amount of this period period -related Transferred from deferrecd income 1,252,350.00 Related to the income Hangzhou Xihu Production Promotion Center Pattent 5,000.00 Related to the income Grant Baiyang street Labor grant 5,600.00 Related to the income 2014 financial grants on intellectual property right 971,000.00 Related to the income 2014 financial grants on intellectual property 16,000.00 Related to the income right 2014 Yuhang industrial risk-pooling funds 635,000.00 Related to the income 2014Hangzhou city grants on safety production 100,000.00 Related to the income standardization 2014 Yuhang District grants on Quality Awards 200,000.00 Related to the income Xiacheng District financial subsidies granted for 100,000.00 Related to the income safety production financial subsidies Grants on Deqing Finance Bureau upgrading 25,000.00 Related to the income Subsidy for R&D Hangzhou Economy & Technology 206,400.00 Related to the income Development Zone 2012 Enterprise Funding by Hangzhou Economy & 1,866,200.00 Related to the income Technology Development Zone Finance office Hangzhou Human Resource and Social security Bureau in 2013 College student enterprise training 21,671.00 Related to the income Subsidies Award for Technology of Tangqia tax advanced 110,000.00 Related to the income Subsidy for Technology Patent 27,500.00 Related to the income Award for Technical Projects 2014 100,000.00 Related to the income 88 杭汽轮机股份有限公司 2015 年半年度报告 Subsidy for enter prise R & D 2012 630,000.00 Related to the income Subsidy for innovative industrial projects 2013 of 540,000.00 Related to the income Hangzhou Award for technical standard 2013 500,000.00 Related to the income Other small amount subsidies 1,440.00 Related to the income Total 3,309,950.00 4,003,211.00 -- 38. Non-business expenditures In RMB Carried to current Items Occurred current term Occurred in previous term contingent gain/loss Total of non-current asset 303,677.88 120,844.93 303,677.88 Disposition loss Incl : loss of fixed assets 303,677.88 120,844.93 303,677.88 disposition Loss of intangible assets disposition Loss of Debt restructuring disposition Non-monetary assets exchange loss Foreign donation 110,000.00 310,000.00 110,000.00 Penalty paid out 72,168.36 649,434.40 72,168.36 water conservancy special fund 1,509,082.13 2,353,054.95 Penalty paid 100.00 100.00 Other 162,134.52 1,119,317.88 162,134.52 Total 2,157,162.89 4,552,652.16 648,080.76 39. Income tax expenses (1) Lists of income tax expense In RMB Items Occurred current term Occurred in previous term Income tax calculated according to the law and regulations of current term 15,455,703.13 44,486,881.81 -4,165,246.93 -4,812,953.14 Deferred income tax In RMB 89 杭汽轮机股份有限公司 2015 年半年度报告 Items Amount of current period Total profits 18,824,453.52 Income tax expenses calculated on legal / applicable tax 2,823,668.03 rate Impact of different tax rates of subsidiaries 1,698,121.64 Impact of income tax adjustment in previous periods -559,811.58 Impact of non-taxable income -4,561,355.20 Impact of un-deductible costs, epenses or losses\ 3,088,871.25 Impact of deductible loss of un-recognized deferred income taxassets of previous periods Impact of deductible temporary difference of un-recognized 8,446,515.32 deferred income tax asset of current period Impact of consolidated duduction of profit 354,446.74 Income tax expenses 11,290,456.20 40.Other Comprehensive income Please find the statement in the notes of consolidated balance sheet. 41. Notes Cash flow statement (1) Other cash received from business operation In RMB Items Occurred current term Occurred in previous term Deeposit interest 2,932,337.44 4,073,827.69 Government subsidies received 7,253,115.90 4,679,042.27 Deposit for bidding and other 382,225.60 320,000.00 Compensation income 6,434.94 Other 1,050,625.36 -6,408,389.13 Total 11,618,304.30 2,670,915.77 2. Other cash paid for business activities In RMB Items Occurred current term Occurred in previous term Travel expenses 11,117,335.44 12,061,008.28 Transportation 2,241,434.65 2,065,151.60 Business trips 10,258,389.65 9,434,011.17 Maintaining 794,837.37 692,095.29 Property management and civil services 3,437,124.78 5,354,362.72 Deposit for bidding and others 6,037,215.36 3,490,184.58 Office expenses 3,460,947.30 6,077,175.02 Conferences 1,491,417.75 1,813,704.93 90 杭汽轮机股份有限公司 2015 年半年度报告 Consulting service fee 5,690,876.65 9,370,140.22 Transportation and vehicles 2,541,010.58 2,810,707.20 Donations 100,000.00 210,000.00 Other 20,594,189.36 42,678,549.74 Total 67,764,778.89 96,057,090.75 3. Other investment-related cash received In RMB Items Occurred current term Occurred in previous term Repurchasing of trusteeship 718,855,999.95 1,063,000,000.00 Total 718,855,999.95 1,063,000,000.00 4. Other cash paid for investment activities In RMB Items Occurred current term Occurred in previous term Purchasing of financial products 754,555,999.95 1,105,001,561.00 Total 754,555,999.95 1,105,001,561.00 5. Other financing-related cash received Not applicable 6. Other cash paid for financing activities Not applicable 42. Supplementary data of cash flow statement (1) Supplementary data of cash flow statement In RMB Supplementary Info. Amount of the Current Term Amount of the Previous Term I. Adjusting net profit to cash flow from operating activities -- -- Net profit 7,533,997.32 227,702,084.64 Add: Impairment loss provision of assets 22,650,560.50 55,223,919.89 Depreciation of fixed assets, oil and gas assets and 43,264,971.82 40,989,166.35 consumable biological assets Amortization of intangible assets 3,660,084.07 2,381,540.21 Amortization of Long-term deferred expenses Loss on disposal of fixed assets, intangible assets and other 17,462.55 226,573.76 long-term deferred assets Loss on scrap of fixed assets 286,215.33 Losson fair value changes Financial cost 7,181,607.57 12,699,488.84 Loss on investment -39,231,462.05 -33,668,236.76 91 杭汽轮机股份有限公司 2015 年半年度报告 Decrease of deferred income tax assets -4,165,246.93 -4,362,015.98 Increased of deferred income tax liabilities Decrease of inventories -462,624,380.00 -260,721,690.77 Decease of operating receivables 199,800,810.01 52,127,359.71 Increased of operating Payable 322,672,780.80 27,188,793.83 Other 774,172.30 Net cash flows arising from operating activities 101,821,573.29 119,786,983.72 II. Significant investment and financing activities that -- -- without cash flows: Debt-to-capital conversion Convertible loan due within 1 year Fixed assets acquired under fianancial lease 3.Movement of cash and cash equivalents: -- -- Ending balance of cash 556,567,843.18 771,330,801.56 Less: Beginning balance of cash equivalents 613,958,063.91 883,141,568.17 Add:Ending balance of cash equivalents Less: Beginning balance of cash equivalents Net increase of cash and cash equivalents -57,390,220.73 -111,810,766.61 (2) Net Cash paid of obtaining the subsidiary Not applicalbe (3) Net Cash receive of disposal of the subsidiary Not applicalbe (2)Composition of cash and cash equivalents In RMB Items Amount of current period Amount of previous period 556,567,843.18 613,958,063.91 I. Cash 92 杭汽轮机股份有限公司 2015 年半年度报告 330,003.92 307,654.85 Of which: Cash in stock Demand bank deposit 546,521,114.46 562,455,906.65 Demand other monetary funds Demanddeposit in the Central Bank Depositin peerfirms Loan to peerfirms II. Cash equivalents Including:Debt instrument maturedwithin three months III. Balance of cash and cash equivalents at 556,567,843.18 613,958,063.91 the period end Including: The parent company and the group holding owned subsidiary use the confined cash and cash equivalents. 43. Assets with limitation on ownership or using rights In RMB Items Closing book value Causation o limitation Used as security for issuing ofacceptance Monetary capital 9,716,724.80 drafts and bill of guarantees Bill receivable 86,660,069.47 Usedassecurity for bank acceptance Inventory Securities for loan Fixed assets 100,003,058.65 Securities for loan Intangible assets 21,141,028.64 Securities for loan Account receivable 11,000,000.00 Securities for loan Total 228,520,881.56 -- 44. Foreign currency monetary items (1) Foreign currency monetary items In RMB Translated to RMB AT END OF Items Balance at end of period Exchange rate PERIOD Monetary capital -- -- 74,043,939.24 Incl:USD 10,924,171.40 6.1136 66,786,014.27 93 杭汽轮机股份有限公司 2015 年半年度报告 Euro 350,020.78 6.8699 2,404,607.76 HKD 5.51 0.7886 4.35 JPY 3,460.00 0.0501 173.18 Indonesia rubi 10,238,691,329.10 0.0005 4,853,139.69 Account receibable -- -- Incl:USD 21,627,219.73 6.1136 132,220,170.54 Euro 1,238,408.74 6.8699 8,507,744.20 HKD Indonesia rubi 487,702,367.75 0.0005 231,170.92 Long-term loan -- -- Incl:USD Euro HKD (2) Note to overseas operating entities, including important overseas operating entities, wich should be disclosed about its principal business place, function currency for bookkeeping and basis for the choice. In case of any change in function currency, the cause should be disclosed. Hangzhou Zhongneng Steam Turbine Power (Indonesia) Co., Ltd. has its business located in Indonesia Rupee is the pricing and booking currency of business operation. VIII. Change in consolidation scope 1. Consolidation of enterprises not under common control (1) Consolidation of enterprises not under common control occurred in the current period Not applicable (2) Consolidation cost and goodwill Not applicable (3) Distinguishable assets/liabilities of the acquiree as at the date of acquisition Not applicable (4) Gain or loss from remeasurement of the equity held before the date of acquisition based on the fair value Not applicable (5) Note to failure in reasonable determination of consolidation consideration or the fair value of the fair value of distinguishable assets and liabilities of the acquiree as at the date of acquisiton or the very period of consolidation. Not applicable 2. Consolidation of enterprises under the common control. (1) Consolidation of enterprises under common control incurred in the reporting period Not applicable (2) Consolidation cost Not applicable (3) Book value of the assets and liabilities of the consolidatee as at the date of consolidation Not applicable 3.Disposal of subsidiaries Not applicable Change in consolidation scope due to other cause Description of consolidation scope changes and other causes (eg, the new subsidiary, the subsidiary liquidation, et c.) and related conditions: Way of Increased of Consolidationscope Date of acquiring Captial input Proportion % acquiring equity Zhejiang Zhongrun Fuel Engine Newly May 22, 2015 10,000,000 55.55% 94 杭汽轮机股份有限公司 2015 年半年度报告 Technology Co., Ltd. incorporated IX. Equity in major subsidiaries 1. Equity in major subsidiaries (1)Composition of enterprise group Shareholding ratio Way of Plance of Nature of Subsidiaries Main business acquisiti registration business Directr Hidirect on Zhejiang Steam trubine Packaged Technology Hangzhou Hangzhou Manufacturin Incorpor 70.86% Development Co., Ltd. Zhejiang Zhejiang g ation Hangzhou Hangzhou Manufacturin Incorpor Hangzhou Zhongneng Steam turbine PowerCo., Ltd. 60.83% Zhejiang Zhejiang g ation Hangzhou Hangzhou Manufacturin Incorpor Hangzhou Steam Turbine Casting Co., Ltd. 51.00% Zhejiang Zhejiang g ation Hangzhou Steam Turbine Machinery Equipment Co., Hangzhou Hangzhou Manufacturin Incorpor 52.00% Ltd. Zhejiang Zhejiang g ation Hangzhou Steam Turbine Auxiliary Machinery Co., Hangzhou Hangzhou Manufacturin Incorpor 87.53% Ltd. Zhejiang Zhejiang g ation Hangzhou Hangzhou Incorpor Zhejiang Tubine Import & Export Co.,Ltd. Commerce 100.00% Zhejiang Zhejiang ation Hangzhou Hangzhou Manufacturin Incorpor Hangzhou Steam Turbine Heavy Industry Co., Ltd. 100.00% Zhejiang Zhejiang g ation Zhejiang Huayuan Steam Turbine Machinery Co., Hangzhou Manufacturin Incorpor Deqing Zhejiang 75.00% Ltd. Zhejiang g ation Hangzhou Guoneng Steam Turbine Engineering Co., Hangzhou Hangzhou Manufacturin Incorpor 75.00% Ltd. Zhejiang Zhejiang g ation Xinjiang Taifeng Hangzhou Steam Turbine Packaged Manufacturin Incorpor Xinjiang Xinjiang 51.00% Technology Development Co., Ltd. g ation Hangzhou Bypass Mechanical & Electrical Hangzhou Hangzhou Manufacturin Incorpor 70.00% Equipment Co., Ltd. Zhejiang Zhejiang g ation Shijiazhuang Hangneng Steam Turbine Technology Shijiazhuang Shijiazhuang Incorpor Service 60.00% Service Co., Ltd. Hebei Hebei ation Kunming Hangzhong Steam Turbine Technology Incorpor Kunming Yunnan Kunming Yunnan Service 60.00% Sevrvice Co., Ltd. ation Wulumuqi Hangzhongneng Steam Turbine Qulumuqi Qulumuqi Incorpor Service 60.00% Technology Sevrvice Co., Ltd. Xingjiang Xingjiang ation Tangshan Hangneng Steam turbine Technology Incorpor Tangshan Hebei Tangshan Hebei Service 60.00% Sevrvice Co., Ltd. ation Jilin Hangzhongneng Steam turbine Technology Incorpor Jilin Jilin Service 60.00% Sevrvice Co., Ltd. ation Guangxi Hangzhongneng Steam turbine Technology Nanning Guangxi Nanning Guangxi Service 60.00% Incorpor 95 杭汽轮机股份有限公司 2015 年半年度报告 Sevrvice Co., Ltd. ation Chengdu Hangzhongneng Steam turbine Technology Incorpor Chengdu Sichuan Chengdu Sichuan Service 60.00% Sevrvice Co., Ltd. ation Luoyang Hangzhongneng Steam turbine Technology Incorpor Luoyang Henan Luoyang Henan Service 60.00% Sevrvice Co., Ltd. ation Hangzhou Hangzhou Manufacturin Incorpor Hangzhou Steam turbine Boiler Co., Ltd. 50.00% Zhejiang Zhejiang g ation Hangzhou Zhongneng Steam turbine (Indonesia) Co., Manufacturin Incorpor Indonesia Indonesia 70.00% Ltd. g ation Hangzhou Hangzhou Manufacturin Incorpor Hangzhou Kaineng Casting Co., Ltd. 100.00% Zhejiang Zhejiang g ation Zhejiang Runhong Burming Machine Engineering Hangzhou Hangzhou Incorpor S 58.00% Co., Ltd. Zhejiang Zhejiang ation Zhejiang Zhongrun Burning machine Technology Manufacturin Incorpor Huzhou Zhejiang Huzhou Zhejiang 55.55% Co., Ltd. g ation (2)Major non-fully-Owned subsidiaries In RMB Share protion Gains/loss of the period Dividend announced in Balance of eqiuty of minor Name of the subsidiaries of minor attributable to minor the period to minor shareholders at end of period shareholders shareholders shareholders Zhejiang Steam trubine Packaged 29.14% 2,988,783.06 4,459,185.00 24,305,347.51 Technology Development Co., Ltd. Hangzhou Zhongneng Steam turbine 39.17% 2,900,386.98 11,751,600.00 117,702,363.00 PowerCo., Ltd. Hangzhou Steam Turbine Casting Co., Ltd. 49.00% -592,114.23 9,800,000.00 78,011,376.52 Hangzhou Steam Turbine Machinery 48.00% 10,968,450.37 21,600,000.00 58,505,941.02 Equipment Co., Ltd. Hangzhou Steam Turbine Auxiliary 12.47% 2,886,057.92 7,980,800.00 28,338,424.18 Machinery Co., Ltd. Zhejiang Huayuan Steam Turbine 25.00% Machinery Co., Ltd. Hangzhou Guoneng Steam Turbine 25.00% Engineering Co., Ltd. Notes: According to the articles of association of Huayuan Co., Hong Kong Ruiyun Enterprise Co., Ltd. – the overseas investor – will no longer enjoy the equity of the joint-venture as soon as the return reaches RMB10.50 million. As of December 31, 2012, Hong Kong Ruiyun Enterprise Co., Ltd. had received RMB10.50 million of dividend, therefore the minority shareholder’s equity is neutralized to zero. According to the articles of association of Guoneng Co., Hong Kong Ruiyun Enterprise Co., Ltd. – the overseas investor – will no longer enjoy the equity of the joint-venture as soon as the return reaches RMB20 million. As of December 31, 2011, Hong Kong Ruiyun Enterprise Co., Ltd. had received RMB20 million of dividend, therefore 96 杭汽轮机股份有限公司 2015 年半年度报告 the minority shareholder’s equity is neutralized to zero. 97 杭汽轮机股份有限公司 2015 年半年度报告 (3 Material financial information of major non-fully-owned subsidiaries In RMB End of term Beginning of term Subsidiaries Current Non-current Non-curren Current Non-current Total of Name Total of assets Current liabilities Total of liability Current assets Non-current assets Total of assets assets assets t liabilities liabilities liabilities liability Zhejiang Steam trubine Packaged 248,025, 242,916,104. 184,460,725. 184,460,72 30,772,561.61 278,797,599.16 194,330,574.55 194,330,574.55 30,828,926.61 273,745,031.39 Technology 037.55 78 05 5.05 Development Co., Ltd. Hangzhou Zhongneng 701,247, 5,414,464. 654,074,224. 442,218,457. 442,548,45 Steam turbine 111,354,261.57 812,602,176.09 501,518,999.15 506,933,463.15 114,095,212.10 768,169,437.01 330,000.00 914.52 00 91 32 7.32 PowerCo., Ltd. Hangzhou Steam 215,157, 30,054,455 249,835,889. 257,496,967. 283,603,77 Turbine 206,353,517.37 421,511,208.51 233,257,010.41 263,311,465.41 212,563,075.49 462,398,964.61 26,106,805.00 691.14 .00 12 62 2.62 Casting Co., Ltd. Hangzhou Steam Turbine 136,093, 138,628,223. 76,377,497.0 76,377,497 20,120,768.90 156,213,970.61 71,260,772.19 71,260,772.19 20,941,588.24 159,569,811.80 Machinery 201.71 56 4 .04 Equipment Co., Ltd. 98 杭汽轮机股份有限公司 2015 年半年度报告 Hangzhou Steam Turbine 108,249, 135,991,610. 49,629,812.1 49,629,812 62,449,966.72 170,699,625.17 33,662,555.09 33,662,555.09 62,538,428.35 198,530,038.54 Auxiliary 658.45 19 1 .11 Machinery Co., Ltd. Zhejiang Huayuan Steam 75,442,9 91,042,867.3 32,295,367.8 32,295,367 16,167,123.78 91,610,042.05 33,059,129.49 33,059,129.49 16,653,192.84 107,696,060.16 Turbine 18.27 2 4 .84 Machinery Co., Ltd. Hangzhou Guoneng Steam 285,613, 302,097,628. 226,870,725. 227,405,37 76,549,971.57 362,163,840.82 241,413,460.77 534,650.00 241,948,110.77 74,614,838.31 376,712,466.72 534,650.00 Turbine 869.25 41 33 5.33 Engineering Co., Ltd. In RMB: 元 Amount of current period Amount of previous period Subsidiaries Name Cash flow for Cash flow for Turnover Net profit Total Misc Gains Turnover Net profit Total Misc Gains business activities business activities 99 杭汽轮机股份有限公司 2015 年半年度报告 Zhejiang Steam trubine Packaged 87,432,537.33 10,482,718.27 10,482,718.27 33,589,568.13 110,761,508.75 88,919,156.86 88,919,156.86 16,378,793.87 Technology Development Co., Ltd. Hangzhou Zhongneng Steam 240,412,407.45 10,375,173.77 10,375,173.77 30,147,920.45 365,627,789.07 33,572,063.79 33,572,063.79 30,147,920.45 turbine PowerCo., Ltd. Hangzhou Steam Turbine Casting 130,950,701.52 -476,368.10 -476,368.10 29,971,613.39 152,915,382.21 6,661,654.49 6,661,654.49 7,961,196.57 Co., Ltd. Hangzhou Steam Turbine 77,342,694.24 40,492,049.42 40,492,049.42 -124,069.76 77,796,566.20 45,648,297.22 45,648,297.22 1,063,553.77 Machinery Equipment Co., Ltd. Hangzhou Steam Turbine Auxiliary 61,537,320.08 52,136,843.65 52,136,843.65 -26,176,905.93 81,069,606.25 49,693,413.51 49,693,413.51 -14,480,315.66 Machinery Co., Ltd. Zhejiang Huayuan Steam Turbine 45,142,364.93 19,145,261.19 19,145,261.19 3,968,911.01 43,169,239.60 19,065,567.83 19,065,567.83 27,988,750.01 Machinery Co., Ltd. Hangzhou Guoneng Steam Turbine 191,568,130.71 21,007,165.35 21,007,165.35 34,247,826.55 219,182,613.76 20,932,753.99 20,932,753.99 19,619,086.15 Engineering Co., Ltd. 100 杭汽轮机股份有限公司 2015 年半年度报告 X. Risks related to financial instruments The objective of the Company’s risk management is to achieve a balance between the risk and gains. Constrain the negative influence on business operation to the lowest limit, and maximum the interests of shareholders and other equity holders. With regard to this target, the basic policies of the Company are; locate and analyse the risks, set appropriate bottom line for risks, and manage and monitor on each risk and constrain them in a certain extent. Risks attached to financial instruments are mainly credit risks, liquidity risks, and market risks. The following risk managing policies have been examined and approved by the management: (I) Credit risks Credit risks are introduced when one party of the financial instrument failed to exercise its liabilities and then caused financial loss to another. The credit risks of the Company are mainly composed by bank savings and receivable accounts. Following measurements are adopted to control these risks: 1. Bank deposit The Company puts its bank savings in financial institutions with higher credit ranks, therefore with lower risks. 2. Account receivable The Company performs credit assessment on the clients on periodic and constant basis. Results suggested by the assessment are used by the Company to determine clients with higher ranks and to overlook the rest. This was conducted to avoid risks brought by material bad debts. (1) Keep constant awareness on risks and supervising receivable accounts. (2) Keep tracking every detail of business and accounting practices. Trade payment records are maintained as important references to the ranking of client credit. Dynamic management is performed on the clients latest situation and policies are made relatively. (3) Keep on with direct sales and ensure every contract is followed by corresponding personnel. For the Company only trade with parties with good credit ranks, no security property is needed. As of June 30,2015, the credit risks feature collectiveness within the Company. 49.02% of the receivable accounts were attributable to top 5 clients. The Company holds no property as pledge or other credit ranking up. Analyzing of receivable accounts neither due nor impaired, and those have due but not impaired: End of term Overdue but not impaired Not overdue and not Within 1 year 1-2 years Over 2 Items impaired years Total Bill receivable 680,533,170.35 680,533,170.35 Subtotal 680,533,170.35 680,533,170.35 (Continue) End of term Overdue but not impaired Total Within 1 year 1-2 years Over 2 Items years Bill receivable 701,109,938.01 701,109,938.01 Subtotal 701,109,938.01 701,109,938.01 Categorizing of financial liabilities on remained period to due End of term Items Contract amount not Over 3 Book value Within 1 year 1-3 years discounted years Financial liabilities Short-term loans 193,300,000.00 198,433,402.27 198,433,402.27 Bill payable 123,907,495.41 123,907,495.41 123,907,495.41 Long-term loan 23,700,000.00 27,264,332.88 105,523.29 27,158,809.59 Account payable 962,111,122.36 962,111,122.36 962,111,122.36 101 杭汽轮机股份有限公司 2015 年半年度报告 Other account 26,359,396.25 26,359,396.25 26,359,396.25 payable Subtotal 1,329,378,014.02 1,338,075,749.17 1,310,916,939.58 27,158,809.59 - (Continue) Beginning of term Items Contract amount not Over 3 Book value Within 1 year 1-3 years discounted years Financial liabilities Short-term loans 198,600,000.00 205,225,558.91 205,225,558.91 Bill payable 150,763,452.14 150,763,452.14 150,763,452.14 Long-term loan 18,500,000.00 21,917,202.85 21,917,202.85 Account payable 763,085,718.92 763,085,718.92 763,085,718.92 Other account 29,597,889.12 29,597,889.12 29,597,889.12 payable Subtotal 1,160,547,060.18 1,170,589,821.94 1,148,672,619.09 21,917,202.85 (II) Liquidation risks Liquidation risks are the possibilities of short in cash at fulfilling liabilities of payment or settlement for financial assets. They may be caused by failing to cash financial assets at fair value instantly; debtors’ failing of paying debts due; debts due before schedule; or failing of generating expected cash flow. To handle these risks, the Company adopted multiple measures such as note clearance and bank loans. Long-term and short-term financing approaches were used to maintain balance between constancy and flexibility. The Company has obtained credit from multiple banks to satisfy the needs of business operation and capital output. Categorizing of financial liabilities on remained period to due (III) Market risks Market risks are those brought by change of fair value or expectable cash flow of financial instruments due to change of market prices, mainly interest risks and exchange rate risks. 1. Interest risks Interest risks are those brought by change of fair value or expectable cash flow of financial instruments due to change of interest rates, mainly regards the loans at floating interest rates. 2. Foreign currency risks Foreign currency risks (exchange rate risks) are those caused by change of fair value or expectable cash flow of financial instruments due to fluctuation of exchange rates. These risks are mainly related to foreign currency assets and liabilities. The Company operates in mainland China and mostly uses RMB as standard currency, therefore no major risks regarding exchange rates. For details of foreign currency assets and liabilities, please go to the descriptions in the notes to the consolidated financial statements. The disclosure of the fair value 1.Closing fair value of assets and liabilities calculated by fair value Not applicable XI. Related parties and related transactions 1.Parent company of the Compnay Name of the parent Shareholding of the Voting rights of the Reg.Add Business property Registered capital Company parent company parent Company % Hangzhou Steam Hangzhou China Manufacturing RMB 800 million 63.64% 63.64% Turbine Group 102 杭汽轮机股份有限公司 2015 年半年度报告 Notes: Hangzhou Municipal Government State-owned Asset Supervisory Committee is the ultimate controller of the Company.。 2.Subsidiaries For details of subsidiaries please go to the statement of equities in other entities. 3. Joint ventures and associated enterprises of the Company Not applicable 4. Other related parties Name of the related parties Relationship with the Company Hangzhou Steam turbine Automobile sales service Co., Ltd. Affiliate of the Group Hangzhou Hangfa Power Generating Equipment Co., Ltd. Affiliate of the Group Hangzhou Nanfangtongda Gears Co., Ltd. Affiliate of the Group Hangzhou Nanhua Wooden Packaging Co., Ltd. Affiliate of the Group Hangzhou Steam Turbine Industrical Co., Ltd. Affiliate of the Group Hangzhou Steam Turbine Power Technologies Co., Ltd. Affiliate of the Group HSTG Technology Association Affiliate of the Group Hangzhou Steam Turbine Engineering Co., Ltd. Affiliate of the Group Hangzhou Relian Group Co., Ltd. Affiliate of the Group Zhejiang Hanglian Steel & Iron Co., Ltd. Affiliate of the Group Hangzhou Steam Turbine Electronic Valve Co., Ltd. Affiliate of the Group Hangzhou Steam Turbine Compressor Co., Ltd. Affiliate of the Group HSTG(Hangzhou) United Institutes Co., Ltd. Affiliate of the Group Hangzhou Steam Turbine Power Group Equipment Co., Ltd. Affiliate of the Group Greenesol Co.(India) Affiliates of the auxiliary Co Zhejiang Tianhang Steam Turbine Auxiliary Machinery Co., Ltd. Affiliates of the auxiliary Co 4.Related transaction (1) Sale of goods/rendering of labor services/labor service offering Purchase of goods and service In RMB Over the Trading limit Ralated parties Content Reporting period trading Prior period approved limit or not Hangzhou Hangfa Power Generating Generators 38,940,170.91 38,940,170.91 No 79,987,800.43 Equipment Co., Ltd. Hangzhou Steam turbine Automobile Transportation , repair , etc. 26,837,296.97 26,837,296.97 No 26,300,402.48 sales service Co., Ltd. Greenesol Co.(India) Generators 25,380,594.36 25,380,594.36 No 21,433,795.50 Hangzhou Steam Turbine Group Co., Water and electricity 6,473,823.78 6,473,823.78 No 8,259,161.07 Ltd. 103 杭汽轮机股份有限公司 2015 年半年度报告 Hangzhou Nanhua Wooden Packaging Packaging 4,800,810.58 4,800,810.58 No 5,937,357.17 Co., Ltd. Hangzhou Nanfang Tongda Gears Co., Gear boxes 1,046,126.50 1,046,126.50 No 8,619,991.46 Ltd. Hangzhou Steam Turbine Industrial Co., Raw materials processing , 973,521.04 973,521.04 No 1,867,077.55 Ltd. cleaning fees, etc. Hangzhou Steam TurbineValve Co., Ltd. Part 770,000.00 770,000.00 No HSTG Technology Association Industrial cooperation 169,230.76 169,230.76 No 599,145.24 Subtotal 105,391,574.90 105,391,574.90 No 153,004,730.90 Related transactions regarding sales of goods or providing of services In RMB Subjects of the related Realted parties Current term Same period of last term traqnsactions Hangzhou Hangfa Power Generating Equipment Cast part, industrial 6,359,396.39 5,948,399.41 Co.,Ltd. cooperation Hangzhou Steam Turbine Engineering Co., Ltd. Steam turbine 3,447,863.25 7,963,148.72 Hangzhou Steam Turbine Power Group Steam turbine -531,623.94 Equipment Co., Ltd. HSTG Technology Association Industrial cooperation 136,923.08 206,153.84 Greenesol Co.(India) Steam turbine 1,101,423.11 257,008.38 Hangzhou Steam Turbine Automobile Sales Service Co., Ltd. Small amount materials 250.03 207.82 Hangzhou Nanhua Wooden Packaging Co., Ltd. Waste bin packing 854.70 Hangzhou Steam Turbine Compressor Co., Ltd. Rent 70,050.00 Subtotal 10,585,136.62 14,374,918.17 (1)Related trusteeship/contract Not applicable (2)Information of related lease The Company was lessor In RMB Category of lease The lease income confirmed in The lease income confirmed in Name of lessee assets this year last year Hangzhou Steam Turbine Compressor Office 70,050.00 Co., Ltd. Subtotal 70,050.00 The company was lessee In RMB 104 杭汽轮机股份有限公司 2015 年半年度报告 Category of leased The lease income cnfirmed in Lessor Gategory of leased assets assets this year Hangzhou Steam Turbine Power Group Co., Ltd. House and Building 989,013.38 711,175.20 Hangzhou Steam Turbine Automobile Sales Service Co., Ltd. Site leasing 3,611,046.39 2,892,592.00 Subtotal 4,600,059.77 3,603,767.20 (3)Related-party guarantee The Company was guarantor In RMB Execution accomplished The Guarantor Guarantee amunt Start date End date or not Hangzhou Steam Turbine December 19, December 17, 100,000,000.00 No Group 2014 2015 Notes (4)Remunerations of key managements In RMB Items Current term Same period of last term Remunerations of key managements 2,819,750.04 5,529,472.49 5. Receivables and payables of related parties (1)Receivables In RMB End of term Beginning of term Name Related party Book balance Bad debt provision Book balance Bad debt provision Account Hangzhou Hangfa Power Generating Equipment Co., 15,264,771.71 886,557.62 10,824,277.96 541,213.90 receivable Ltd. Hangzhou Steam Turbine Engineering Co., Ltd. 8,070,505.99 1,462,061.10 8,351,855.99 1,693,436.30 Hangzhou Steam Turbine Power Group Engineering 310,060.00 93,018.00 1,017,560.00 447,753.00 Co., Ltd. Hangzhou Steam Turbine 258,500.00 163,500.00 258,500.00 115,100.00 Power Group Co., Ltd. Hangzhou Nanfangtongda Gears Co., Ltd. 4,434.00 2,660.40 Hangzhou Steam Turbine Automobile Sales Service Co., 1,441.84 72.09 1,149.30 57.47 Ltd. Subtotal 23,905,279.54 2,605,208.81 20,457,777.25 2,800,221.07 Hangzhou Hangfa Power Prepayment Generating Equipment Co., 33,805,625.00 22,009,425.00 Ltd. Hangzhou Steam Turbine Engineering Co., Ltd. 540,000.00 HSTG (Hangzhou) United Institutes Co., Ltd. 80,000.00 105 杭汽轮机股份有限公司 2015 年半年度报告 Hangzhou Steam Turbine 49,244.66 107,715.92 Power Group Co., Ltd. Hangzhou Steam 900,900.00 TurbineValve Co., Ltd. Subtotal 34,474,869.66 23,018,040.92 (2)Payables In RMB Name Related party Amount at year Amount at year beginning Hangzhou Hangfa Power Generating Equipment Account payable Co., Ltd. 82,404,560.15 79,049,778.95 Hangzhou Steam Turbine Power Group Co., Ltd. 8,535,691.05 1,134,000.82 Greenesol Co.(India) 8,495,882.02 11,133,713.63 Hangzhou Steam Turbine Automobile Sales 6,114,232.76 1,458,189.74 Service Co., Ltd Hangzhou Nanhua Wooden Packaging Co., Ltd. 380,511.90 313,983.80 Hangzhou Nanfang Tongda Gears Co., Ltd. 129,011.00 982,000.00 Hangzhou Steam Turbine Industrial Co., Ltd. 91,592.87 203,484.86 Subtotal 106,151,481.75 94,275,151.80 Advances received Hangzhou Steam Turbine Engineering Co., Ltd. 56,329,840.00 15,979,200.00 Hangzhou Steam Turbine Compressor Co., Ltd. 14,589,000.00 14,190,000.00 Greenesol Co.(India) 481,337.18 Subtotal 71,400,177.18 30,169,200.00 Other account Hangzhou Steam Turbine Group 6,437,767.21 5,688,406.79 payable Hangzhou Steam Turbine Automobile Sales Service Co., Ltd. 101,000.00 Subtotal 6,538,767.21 5,688,406.79 XII. Commitment and Contingency Issues (I) Material commitment issues 1. External investment contracts engaged but not exercised or not fully exercised and related financial outflow The Company invested RMB10 million to be one of the partners of Hangzhou Changdi Share Investment Partnership (with limited liabilities) in 2011. This was the initial input of capital, and the Company committed to input supplementary capital when necessary according to the portion of interests, but not greater than RMB50 million accumulative in 8-11 years during the existing period of the firm. Extra RMB5.9756 million was inputted in , accumulated to RMB33.4976 million thereof. 2. Outsourcing contracts engaged with large amounts and are under processing or preparation Capital commitment related to construction of workshops or purchasing of equipment by the Company or subsidiaries is amounted to RMB144.7080 million. Contingent issues (1) Major contingencies on balance sheet date Note: Please see "Note IX, legal rights in other subjects" the relevant content for searching for the contents which were related to the joint venture or relevant investment and debts of it. (2) For no major contingencies disclosed, explain reasons The Company has no major contingencies should be disclosed 106 杭汽轮机股份有限公司 2015 年半年度报告 XIII. Other Material Issues Segment information 1. Recognition of segments and accounting policies Business segments are determined according to the administration structure, management requirement, and internal reporting mechanism. Segments are parts of the Company’s business satisfying all of the following conditions: (1) Generate revenue and expenses in daily operations; (2) Operational results can be assessed by the management to decide the resources to be allocated; (3) Financial position, business results, and cash flow of the part is accessible through analyzing. 2. Reasons of not being able to report about the segments The Company’s business range is relatively narrow and mainly involved in producing and selling of steam turbines, gas turbines and auxiliary machinery and parts. It is regarded as an integral business by the management. Therefore segment report is not included in this report. 107 杭汽轮机股份有限公司 2015 年半年度报告 XIV. Notes to the Financial Statements of the Parent Co. (I) Notes to items of parent company financial statements 1. Account receivable (1)Detailed categories In RMB End of term Beginning of term Book balance Bad debt provision Book balance Bad debt provision Category Proporti Providin Book value Proporti Providing Book value Amount Amount Amount Amount on % g rate% on % rate% Receivables with major individual amount and had debt provision provided individually Receivables provided bad debt provision in cridit risk groups 2,170,510,438.82 100.00% 465,632,819.30 21.45% 1,704,877,619.52 2,455,949,951.86 98.80% 444,969,697.87 18.12% 2,010,980,253.99 Account receivable with minor individual amount but bad debt 29,819,607.69 1.37% 29,819,607.69 100.00% 29,819,607.69 1.20% 29,819,607.69 100.00% provision is provided Total 2,200,330,046.51 100.00% 495,452,426.99 21.45% 1,704,877,619.52 2,485,769,559.55 100.00% 474,789,305.56 19.10% 2,010,980,253.99 Other receivable accounts with large amount and were provided had debt provisions individually at end of period. Not applicable Account reveivable on which bad debt proisions are provided on age basis in the group In RMB End of term Age Account receivable Bad debt provision Proportion% Subitem within 1 year Within 1 year 627,217,036.88 31,360,851.84 5.00% Subwithin 1 year 627,217,036.88 31,360,851.84 5.00% 1-2 years 639,374,216.28 63,937,421.63 10.00% 2-3 years 306,645,757.10 91,993,727.13 30.00% Over 3 years 383,064,191.10 278,340,818.70 3-4 years 233,046,782.17 139,828,069.30 60.00% 4-5 years 57,523,297.63 46,018,638.10 80.00% 108 杭汽轮机股份有限公司 2015 年半年度报告 Over 5 years 92,494,111.30 92,494,111.30 100.00% Total 1,956,301,201.36 465,632,819.30 109 杭汽轮机股份有限公司 2015 年半年度报告 Receivable accounts in the portfolio on which bad debt provisions are provided on percentage basis Not applicable (2)Accrual period, recovery or reversal of bad debts situation The current amount of provision for bad debts is RMB25,260,819.53; recovery or payback for bad debts Amount is RMB 0.00. (3)The current accounts receivable write-offs situation In RMB Items Amount written off Zhejiang Jiahua Energy Chemical Co., Ltd. 1,920,000.00 Oriental electrical Group Beijing Company 1,599,316.10 Other 1,078,382.00 Account receivables actually written-off during the reporting period: In RMB Nature of account Reason for Verification Arising from related Name Amount written off receivable written-off procedures transactions(Y/N) The examined and ad Zhejiang Jiahua opted to General Energy Chemical Co., Goods 1,920,000.00 Difficult to recover No manager of the office Ltd. meeting The examined and ad Oriental Electrical opted to General Group .Beijing Goods 1,599,316.10 Difficult to recover No manager of the office Company meeting The examined and ad opted to General Other Goods 1,078,382.00 Difficult to recover No manager of the office meeting Total -- 4,597,698.10 -- -- -- (4) Top 5 of the closing balance of the accounts receivable colleted according to the arrears party Total accounts receivable due from the top five debtors of the Group in the current period is RMB 1,171,206, 702.14, accounting for 53.23% of the total accounts receivable as at the end of the current period and the total provision for bad and doubtful debts made as at the end of the current period is RMB 234,841,090.21. (5)Other account receivable derecognied due to the transfer of financial assets Not applicable 110 杭汽轮机股份有限公司 2015 年半年度报告 (6)Amount of transfer other account receivable and assets and liabilities formed by its continuous invovement. Not applicable 111 杭汽轮机股份有限公司 2015 年半年度报告 5. Other account receivable (1) Detailed categories In RMB End of term Beginning of term Book balance Bad debt provision Book balance Bad debt provision Category Book value Proporti Book value Amount Proportion Amount Proportion Amount Proportion Amount on Other receivables with major individual amount and had debt provision provided individually Other receivables provided bad debt provision in cridit risk 27,283,797.68 88.03% 2,348,371.33 8.61% 24,935,426.35 35,956,830.09 90.65% 2,419,017.74 6.73% 33,537,812.35 groups Other account receivable with minor individual amount but bad 3,710,320.94 11.97% 3,710,320.94 100.00% 3,710,320.94 9.35% 3,710,320.94 100.00% debt provision is provided Total 30,994,118.62 100.00% 6,058,692.27 19.55% 24,935,426.35 39,667,151.03 100.00% 6,129,338.68 15.45% 33,537,812.35 Other receivables with individually significant amount and provision for bad and doubtful debts individually provided at the end of the reporting period. Not applicable Other receivable accounts in the group on which bad debt provisions are provided on age basis In RMB End of term Age Other receivable account Bad debt provision Proportion% Subitem within 1 year Within 1 year 6,457,836.69 322,891.83 5.00% Subtotal within 1 year 6,457,836.69 322,891.83 5.00% 1-2 years 1,827,434.20 182,743.42 10.00% 2-3 years 862,242.00 258,672.60 30.00% Over 3 years 2,217,163.40 1,584,063.48 112 杭汽轮机股份有限公司 2015 年半年度报告 3-4 years 1,557,999.80 934,799.88 60.00% 4-5 years 49,500.00 39,600.00 80.00% Over 5 years 609,663.60 609,663.60 100.00% Total 11,364,676.29 2,348,371.33 113 杭汽轮机股份有限公司 2015 年半年度报告 Other receivables with provision for bad and doubtful debts based on the balance percentage method in the portfolio Not applicable Other receivables with provision for bad and doubtful debts based on the other method in the portfolio Not applicable (2) Bad debt provision accrual, received or reversed in current period Bad debt provision of RMB-70,646.41 was provided this period without recovering or writing back of provisions. (3) Combination of other receivable accounts In RMB Account property End of term Beginnin gof term Deposit 9,752,744.00 17,537,246.23 Provisional payment receivalbe 20,859,813.45 21,438,383.99 Petty cash 365,000.00 237,970.00 Other 16,561.17 453,550.81 Total 30,994,118.62 39,667,151.03 (4) Top 5 of the closing balance of the accounts receivable colleted according to the arrears party In RMB Percentage in total other Name of the company Account property Book balance Age Bad debt provision receivable % Over 3 Shanghai Customs Waigaoqiao Office Deposit in custom 3,710,320.94 11.97% 3,710,320.94 years Guodian Trust Bidding Co., Ltd. Bidding deposit 3,188,750.00 0-4 years 10.29% 520,597.50 Over 3 Inner Mongolia Bidding Co., Ltd. Bidding deposit 550,000.00 1.77% 330,000.00 years Guodian Longyuan Power Technology Bidding deposit 500,000.00 1-2 years 1.61% 50,000.00 Engineering Co., Ltd. Within 1 Jian Group Co., Ltd. Bidding deposit 500,000.00 1.61% 25,000.00 year Total -- 8,449,070.94 -- 27.26% 4,635,918.44 (5)Account receivable involving government subsidies Not applicable (6)Other account receivable derecognied due to the transfer of financial assets Not applicable (7)Amount of transfer other account receivable and assets and liabilities formed by its continuous invovement. Not applicable 114 杭汽轮机股份有限公司 2015 年半年度报告 3. Long-term share equity investment (1) Details In RMB End of term Beginning of term Items Impairment Impairment Book balance Book value Book balance Book value provision provision Investment on subsidiaries 502,919,378.03 502,919,378.03 502,919,378.03 502,919,378.03 Investment to joint ventures and associated enterprises Total 502,919,378.03 502,919,378.03 502,919,378.03 502,919,378.03 (1)Investment to the subsidiary In RMB Withdrawn impairment Closing balance of Name Opening balance Increase Decrease Closing balance provision in the impairment provision reporting period Turbine Co 20,000,000.00 20,000,000.00 Heavy Industry Co. 360,000,000.00 360,000,000.00 Auxiliary Machine Co 46,286,513.41 46,286,513.41 Packaged Co. 29,800,389.56 29,800,389.56 Zhongneng Co. 27,644,475.06 27,644,475.06 Machinery Co. 7,968,000.00 7,968,000.00 Casting Co. 11,220,000.00 11,220,000.00 Total 502,919,378.03 502,919,378.03 4. Business income and Business cost In RMB Items Amount of current period Amount of previous period Revenue Cost Revenue Cost Main business 605,562,263.07 411,394,602.32 1,188,528,375.95 770,843,032.46 Other business 15,011,785.21 13,842,788.87 12,949,928.00 10,329,735.55 Total 620,574,048.28 425,237,391.19 1,201,478,303.95 781,172,768.01 5.Investment income In RMB Items Amount of current period Amount of previous period Long-term equity investment income by Cost method 146,450,783.00 194,102,225.00 115 杭汽轮机股份有限公司 2015 年半年度报告 Long-term equity investment income by equity method Investment income from the disposal of long-term equity investment Investment income from holding the financialasset of which fair value recognized in profit or loss Investment income from disposal of financialassets measured by fair value with changes in fair value recognised in profit or loss Hold the investment income during from available-for-sale financial assets Investment income gain from available for sale financial assets Investment income from the disposal of available-for-sale financial assets Investment income from disposal of financialassets available for sale Reverse repurchase treasury investment income 438,410.96 1,750,584.48 Total 146,889,193.96 195,852,809.48 XV. Supplement information 1. Particulars about current non-recurring gains and loss In RMB Items Amount Notes Gains/losses from the disposal of non-current asset -293,394.88 Tax refund or mitigate due to examination-and –approvalbeyond power or without official approval document Governmental subsidy calculated into current gains and loess(while closely related with the normal business of the Company, excluding the fixed-amount or fixed-proportion governmental subsidy according to the unified 3,309,950.00 national standard) Capital occupancy expense, collected from non-financialenterprises and recorded in current gains and losses. Income from the exceeding part between investment costofthe Company paid for obtaining subsidiaries , associates and joint-ventures and recognizable net assets fair value attributable to the Company when acquiring the investment Gains and losses from exchange of non-monetary assets Gains and losses from assets under trusted investment or management 116 杭汽轮机股份有限公司 2015 年半年度报告 Various provision for impairment of assets withdrew duetoact of God, such as nutural disaster Gains and losses from debt restructuring Enterprise reorganization expense(eg.expenditure of staffreplacement and integration change) Gains and losses of the part arising from transaction in which price is not fair and exceeding fair value Current net gains and losses occurred from period-begin tocombination day by subsidiaries resulting from business combination under common control Gains and losses arising from contingent proceedings irrelevant to normal operation of the Company Gains and losses from change of fair values of held-for-transaction financial assets and financial liabilities except for the effective hedge business related to normal business of the Company, and investment income 10,489,094.59 from disposal of transactional financial assets and liabilities and financial assets available for sale Switch-back of provision of impairment of account receivable which are treated with separate depreciation test Gains and losses obtained from external trusted loans Gains and losses arising from change of fair value of investment real estate whose follow-up measurement are conducted according to fair value pattern. Affect on current gains and losses after an one-time adjustment according to requirements of laws and regulations regarding to taxation and accounting Trust fee obtained from trust operation Other non-operating income and expenditure except for the aforementioned items 2,620,570.67 Other non-business income and expenditures other than the above Less: Influenced amount of income tax 3,247,782.47 Amount of influence of minority interests 996,730.88 Total 11,881,707.03 -- 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 shareholders of the Company -0.23% -0.01 -0.01 Net profit attributable to common shareholders of the Company after deduction of non-recurring profit -0.51% -0.03 -0.03 and loss 3.The differences between domestic and international accounting standards 117 杭汽轮机股份有限公司 2015 年半年度报告 1. Differences between the net profit and net asset in the financial reports prepared under IAS and Chinese Accounting Standard Not applicable In RMB Net profit Net asset Current term Amount of last term End of term Beginning of term On Chinese -10,282,333.32 196,174,851.01 4,365,106,939.87 4,450,598,244.32 accounting standard Items and amounts adjusted on IAS On International accounting standard 2. Differences between the net profit and net asset in the financial reports prepared under IAS and Chinese Accounting Standard Not applicable In RMB Net profit Net assets Current term Amount of last term End of term Beginning of term On Chinese Accounting -10,282,333.32 196,174,851.01 4,365,106,939.87 4,450,598,244.32 Standard Accounts and amounts adjusted according to overseas accounting standard On International accounting standard 3. Statement on the differences of accounting information on IAS and domestic accounting standard Not applicable 118 杭汽轮机股份有限公司 2015 年半年度报告 X. Documents for Reference (I) Financial Statements signed and sealed by the Chairman of the Board , chief accountant and director of the financial division; (II) All the originals of the Company’s documents and public notices disclosed in the newspapers designated by China Securities Regulatory Commission in the report period; (III) Original copy of Resolutions of the 22th Meeting of the 6th Term of Board. Hangzhou Steam Turbine Co., Ltd. Chairman of the Board: Zheng Bin August 25, 2015 119