Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) Stock Code:200771 Stcok ID: Hangqilun B Announcement No.2016-51 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016 April 2016 1 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) I. Important Prompt The Board of Directors, The Supervisory Committee, the supervisors and the directors 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 presented the board meeting at which this Quarterly Report was examined. Chairman Mr. Zheng Bin, Chief Financial Officer Pu Yangshuo, and the Chief of Accounting Department Ms. Zhao Jiamao hereby declare: the Financial Statement in the report is guaranteed to be truthful and complete. 2 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) II. Main financial data and changes of shareholders I. Main financial data and indices Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting error correction or not. No Changes of this period over This period Same period of last year same period of last year(%) Operating income(RMB) 687,834,749.02 492,164,586.38 39.76% Net profit attributable to the shareholders 6,620,245.62 7,698,917.29 -14.01% of the listed company(RMB) Net profit after deducting of non-recurring gain/loss attributable to the shareholders of 2,908,791.39 2,401,000.86 21.15% listed company(RMB) Cash flow generated by business operation, 18,550,921.62 -49,305,018.54 137.62% net(RMB) Basic earning per share(RMB/Share) 0.01 0.01 Diluted gains per 0.01 0.01 share(RMB/Share)(RMB/Share) Weighted average return on equity 0.16% 0.18% -0.02% (%) Changes of this period-end End of this period End of last period over same period-end of last year(%) Gross assets(RMB) 7,831,657,292.38 7,683,777,005.63 1.92% Net assets attributable to the shareholders 4,225,792,870.27 4,219,337,312.80 0.15% of the listed company(RMB) Items and amount of non-current gains and losses √ Applicable □ Not applicable In RMB Amount (Year-beginning to Non-recurring gain and loss items Notes the end of the report period.) Non-current asset disposal gain/loss(including the write-off part -2,286.95 for which assets impairment provision is made) Govemment subsidy recognized in current gain and 314,200.00 3 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) loss(excluding those closely related to the Company’s business and granted under the state’s policies) Gain/loss from change of fair value of transactional financial asset and liabilities, and investment gains from disposal of transactional financial assets and liabilities and sellable financial 4,321,846.55 assets other than valid period value instruments related to the Company’s common businesses. Other non-operating income and expenditure except for the 29,495.30 aforementioned items Less: Amount of influence of income tax 810,718.47 Amount of influence of minority interests(After tax) 141,082.20 Total 3,711,454.23 -- None of Non-recurring gain /loss items recorgnized as recurring gain /loss/items as defined by the information disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period. 4 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) II. Total Shareholders and Shares Held by Top Ten Shareholders at the End of the Reporting Period 1. About Total Common Shareholders, Total Preference Shareholders with the Voting Power Recovered and the Shares Held by Top Ten Common Shareholders In shares Total preference shareholders with the voting power Total number of common shareholders at the period-end 15,963 0 recovered at the end of the reporting period(if any) Shares held by the top 10 shareholders Amount of Pledging or Share tradable shares freezing Properties of Shareholder name proportion Quantity with shareholder Status of Quant % Conditional the shares ity held State-owned Hangzhou Steam Turbine Power Group Co., Ltd. 63.64% 479,824,800 479,824,800 legal person Overseas GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED legal person 4.88% 13,388,185 0 Overseas NORGES BANK legal person 1.57% 4,303,675 0 Overseas VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND legal person 1.04% 2,861,636 0 Overseas GIC PRIVATE LIMITED legal person 0.97% 2,665,330 0 Overseas CHINA INT'L CAPITAL CORP HONG KONG SECURITIES LTD legal person 0.93% 2,546,768 0 Overseas First Shanghai Securities Co., Ltd. legal person 0.83% 2,278,901 0 Overseas BOCHK INVESTMENT FUNDS-BOCHK CHINA GOLDEN DRAGON FUND legal person 0.83% 2,273,227 0 Overseas AUSTRALIANSUPER PTY LTD legal person 0.77% 2,108,321 0 Domestic Xia Zulin Natural 0.77% 2,100,000 0 person Shares held by the Top 10 Shareholders of Non-restricted shares Number of the Share type Shareholders’ Names non-restricted Share type Quantity shares held Foreign shares GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 13,388,185 placed in domestic 13,388,185 exchange Foreign shares NORGES BANK 4,303,675 placed in domestic 4,303,675 exchange 5 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) Foreign shares VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND 2,861,636 placed in domestic 2,861,636 exchange Foreign shares GIC PRIVATE LIMITED 2,665,330 placed in domestic 2,665,330 exchange Foreign shares CHINA INT'L CAPITAL CORP HONG KONG SECURITIES LTD 2,546,768 placed in domestic 2,546,768 exchange Foreign shares First Shanghai Securities Co., Ltd. 2,278,901 placed in domestic 2,278,901 exchange Foreign shares BOCHK INVESTMENT FUNDS-BOCHK CHINA GOLDEN DRAGON FUND 2,273,227 placed in domestic 2,273,227 exchange Foreign shares AUSTRALIANSUPER PTY LTD 2,108,321 placed in domestic 2,108,321 exchange Foreign shares Xia Zulin 2,100,000 placed in domestic 2,100,000 exchange Foreign shares CREDIT SUISSE (HONG KONG) LIMITED 2,040,503 placed in domestic 2,040,503 exchange (1) There is not any relationship between Hangzhou Steam Turbine Group Power Group Co., Ltd. and other shareholders; (2) It is unknown to the Company if there is any relationship among the top 10 common share Explanation on associated relationship or concerted action of the above shareholders holders without restriction; (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”. Note to the top 10 common stockholders involved in margin financing & securities Not applicable lending (If any) The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company 6 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) have no buy –back agreement dealing in reporting period. 2.Total number of preferred shareholders and shareholding of top 10 preferred shareholders by the end of the report period Not applicable III. Significant Events I. Changes in the principal accounting statement items and financial indications and the causes Balance sheet items Ending balance in Opening balance Proportion Causes of change CNY in CNY of the change Monetary funds 617,412,115.04 751,596,796.24 -17.85% Mainly caused by the purchase of financial product at the current period Short-term loans 55,250,000.00 85,350,000.00 -35.27% Mainly caused by the casting subsidiary’s repayment of bank debt at the current period Account receivable 1,023,941,174.17 810,420,381.45 26.35% Mainly caused by the increase in the payable with tentative estimation of the head office Profit statement items Amount in the Same period of Proportion Causes of change reporting period the previous n f the year , CNY change Turnover 687,834,749.02 492,164,586.38 39.76% Mainly caused by the sales incomes realized according to the contract’s progress at the current period Administrative expense 179,385,377.44 162,410,760.41 10.45% Mainly caused by the increase in the Company’s research and development expenditure year on year Asset impairment loss 65,049,476.00 -44,831,478.70 245.10% Mainly caused by the increase in long-aging receivables and in bad-debt provision with large corresponding withdrawal Total profit 12,921,893.35 22,910,055.62 -43.60% Mainly caused by large increase in the assets impairment loss withdrawn form the current receivables Cash flow statement Amount in the Same period of Proportion Causes of change Items reporting period the previous n f the year , CNY change Cash flow generated by 18,550,921.62 -49,305,018.54 137.62% Mainly caused by that the sales of 2015 business operation, net substantially decreased the corresponding tax carried over the this year’s payment year on year 7 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) Net cash flow generated -118,577,325.06 111,725,212.49 -206.13% Mainly caused by the increase in the net amount of by investment financial product expense at the current period Net cash flow generated -34,422,806.47 -10,925,944.80 -215.06% Mainly caused by the decrease in the current bank by Financing debt year on year II. Progress of Significant Events, their Influences and Analytical Notice on the Solutions For Hangzhou Steam Turbine Group Co., Ltd., the holding shareholder of the Company, is according with the unified deployment of Hangzhou State-owned Asset Commission, the Company is arranging Turbine Group Mixed Ownership Reform. After the Company’s application to Shenzhen Stock Exchange, the Company’s shares suspended trading as of May 29, 2015. During the suspension, the Company will fulfill the obligation of disclosing information according to the reform progress and relevant provisions. On March 4, 2016, the Company disclosed the progress of major issues and the announcement of resumption of trading(2016-11). Inquiry index of the website for disclosing Description of Significant Events Date of Disclosure provisional reports The company’s application submitted to Shenzhen Stock Exchange, the company’s share March 4,2016 http://www.cninfo.com.cn(2016-11) trading shall be resumed on the morning of the day of March 4, 2016. Hangzhou Stream Turbine Group, the controlling shareholder’s the Company, made a April 1,2016 http://www.cninfo.com.cn(2016-41) pause in the mixed ownership reform. III. Commitments finished in implementation by the Company, shareholders, actual controller, acquirer, directors, supervisors, senior executives or other related parties in the reporting period and commitments unfinished in implementation at the end of the reporting period Non-existence IV. Anticipation of Business Performance from January to June, 2016 Alert of loss or significant change in net profit from the beginning of year to the end of next report period or comparing with the same period of last year, and statement of causations. Not applicable V. Investment in securities Non-existence VI. Investment in derivatives Non-existence VII. Registration form of such Activities as Reception, Research, Communication, Interview in the Reporting Period Reception time Way of reception Types of visitors Basic index 8 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) March 25,2016 Onsite investigation Organization 2016-01 VIII. Outward Guarantee against the Regulations Not applicable IX. Non-operational Occupancy of the Company’s Capital by the Controlling Shareholder and its Related Parties Non-existence IV.Financial Statement I. Financial statement 1. Consolidated balance sheet Prepared by::Hangzhou Steam Turbine Co., Ltd. March 31, 2016 In RMB Items At the end of term Beginning of term Current asset: Monetary fund 617,412,115.04 751,596,796.24 Settlement provision Outgoing call loan Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Bill receivable 594,834,359.13 680,518,943.49 Account receivable 2,040,361,691.48 2,096,090,157.61 Prepayments 200,783,587.26 139,267,324.65 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Interest receivable Dividend receivable Other account receivable 29,516,586.03 25,574,057.29 Repurchasing of financial assets Inventories 2,107,366,923.14 1,826,869,838.60 Assets held for sales 9 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) Non-current asset due in 1 year Other current asset 523,708,432.72 427,203,835.44 Total of current assets 6,113,983,694.80 5,947,120,953.32 Non-current assets: Loans and payment on other’s behalf disbursed Disposable financial asset 509,409,741.77 509,409,741.77 Expired investment in possess Long-term receivable Long term share equity investment Property investment Fixed assets 621,839,340.63 642,155,636.34 Construction in progress 123,915,505.02 119,187,107.52 Engineering material Fixed asset disposal Production physical assets Gas & petrol Intangible assets 302,658,403.15 304,949,207.18 R & D petrol Goodwill Long-germ expenses to be amortized 1,890,730.11 2,029,471.80 Deferred income tax asset 157,959,876.90 158,924,887.70 Other non-current asset Total of non-current assets 1,717,673,597.58 1,736,656,052.31 Total of assets 7,831,657,292.38 7,683,777,005.63 Current liabilities Short-term loans 55,250,000.00 85,350,000.00 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 179,925,130.35 194,226,049.73 Account payable 1,023,941,174.17 810,420,381.45 10 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) Advance payment 1,740,931,262.70 1,736,820,949.19 Selling of repurchased financial assets Fees and commissions receivable Employees’ wage payable 49,716,277.33 70,257,474.46 Tax payable 20,071,907.42 36,008,109.09 Interest payable Dividend payable Other account payable 33,918,873.15 29,705,125.51 Reinsurance fee payable 300,000.00 300,000.00 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 3,104,054,625.12 2,963,088,089.43 Non-current liabilities: Long-term loan 123,400,000.00 123,400,000.00 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 Deferred income 10,297,155.13 6,804,425.00 Deferred income tax liability 1,017,473.05 1,017,473.05 Other non-current liabilities 147,000.00 Total non-current liabilities 135,191,628.18 131,551,898.05 Total of liability 3,239,246,253.30 3,094,639,987.48 Owners’ equity Share capital 754,010,400.00 754,010,400.00 Other equity instrument Including:preferred stock Sustainable debt Capital reserves 139,590,345.09 139,590,345.09 11 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) Less:Shares in stock Other comprehensive income -940,745.67 -852,752.00 Special reserves 31,688,226.03 31,764,920.51 Surplus reserves 621,112,807.78 621,112,807.78 Common risk provision Undistributed profit 2,680,331,837.04 2,673,711,591.42 Total of owner’s equity belong to the parent company 4,225,792,870.27 4,219,337,312.80 Minority shareholders’ equity 366,618,168.81 369,799,705.35 Total of owners’ equity 4,592,411,039.08 4,589,137,018.15 Total of liabilities and owners’ equity 7,831,657,292.38 7,683,777,005.63 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 202,977,385.03 387,916,202.79 Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Bill receivable 245,173,422.33 365,504,827.88 Account receivable 1,568,349,222.00 1,637,391,672.98 Prepayments 91,866,300.52 53,440,645.95 Interest receivable Dividend receivable Other account receivable 39,994,141.93 12,245,371.97 Inventories 1,709,815,843.44 1,454,420,457.64 Assets held for sales Non-current asset due in 1 year Other current asset 340,498,476.72 170,653,680.58 Total of current assets 4,198,674,791.97 4,081,572,859.79 Non-current assets: Disposable financial asset 465,604,378.26 465,604,378.26 Expired investment in possess 12 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) Long-term receivable Long term share equity investment 502,919,378.03 502,919,378.03 Property investment Fixed assets 318,881,804.93 334,677,256.20 Construction in progress 83,069,302.75 79,982,551.34 Engineering material Fixed asset disposal Production physical assets Gas & petrol Intangible assets 176,860,773.26 177,872,266.49 R & D petrol Goodwill Long-germ expenses to be amortized 761,660.66 761,660.66 Deferred income tax asset 120,771,991.85 120,771,991.85 Other non-current asset Total of non-current assets 1,668,869,289.74 1,682,589,482.83 Total of assets 5,867,544,081.71 5,764,162,342.62 Current liabilities Short-term loans Financial liabilities measured at fair value with variations accounted into current income account Derivative financial liabilities Bill payable 13,500,000.00 Account payable 590,701,193.65 436,004,535.90 Advance payment 1,402,737,749.73 1,428,724,224.76 Employees’ wage payable 30,602,543.02 51,373,858.57 Tax payable 2,965,692.91 3,538,126.39 Interest payable Dividend payable Other account payable 22,951,394.44 20,338,742.44 Classified as held for sale debt Non-current liability due in 1 year Other current liability Total of current liability 2,049,958,573.75 1,953,479,488.06 13 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) Non-current liabilities: Long-term loan 100,000,000.00 100,000,000.00 Bond payable Including:preferred stock Sustainable debt Long-term payable Long-term payable to employees Special payable Expected liabilities Deferred income 3,514,980.13 22,250.00 Deferred income tax liability 1,017,473.05 1,017,473.05 Other non-current liabilities Total of Non-current liabilities 104,532,453.18 101,039,723.05 Total of liability 2,154,491,026.93 2,054,519,211.11 Owners’ equity Share capital 754,010,400.00 754,010,400.00 Other equity instrument Including:preferred stock Sustainable debt Capital reserves 138,953,250.09 138,953,250.09 Less:Shares in stock Other comprehensive income Special reserves 13,098,989.67 13,098,989.67 Surplus reserves 602,356,402.65 602,356,402.65 Undistributed profit 2,204,634,012.37 2,201,224,089.10 Total of owners’ equity 3,713,053,054.78 3,709,643,131.51 Total of liabilities and owners’ equity 5,867,544,081.71 5,764,162,342.62 Legal Representative: Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 3.Consolidated Income statement In RMB Items Amount in this period Amount in last period I. Income from the key business 687,834,749.02 492,164,586.38 Incl:Business income 687,834,749.02 492,164,586.38 14 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) Interest income Insurance fee earned Fee and commission received II. Total business cost 678,666,814.16 475,487,480.86 Incl:Business cost 393,516,347.50 323,494,418.80 Interest expense Fee and commission paid Insurance discharge payment Net claim amount paid Insurance policy dividend paid Insurance policy dividend paid Reinsurance expenses Business tax and surcharge 3,928,086.05 2,790,342.25 Sales expense 35,428,813.22 33,169,650.97 Administrative expense 179,385,377.44 162,410,760.41 Financial expenses 1,358,713.95 -1,546,212.87 Asset impairment loss 65,049,476.00 -44,831,478.70 Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 4,321,846.55 2,705,961.44 Incl: investment gains from affiliates Gains from currency exchange(“-”for loss) III. Operational profit(“-”for loss) 13,489,781.41 19,383,066.96 Add :Non-operational income 427,545.14 4,764,884.00 Including:Income from disposal of non-current assets Less:Non business expenses 995,433.20 1,237,895.34 Incl:Loss from disposal of non-current assets 2,286.95 IV.Total profit(“-”for loss) 12,921,893.35 22,910,055.62 Less:Income tax expenses 5,488,846.31 8,797,005.43 V. Net profit 7,433,047.04 14,113,050.19 Net profit attributable to the owners of parent company 6,620,245.62 7,698,917.29 Minority shareholders’ equity 812,801.42 6,414,132.90 VI. Other comprehensive income -206,656.87 -78,978.29 Net of profit of other comprehensive income attributable to owners of the parent co -87,993.67 -33,628.64 mpany. (I)Other comprehensive income items that will not be reclassified into 15 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) gains/losses in the subsequent accounting period 1.Re-measurement of defined benefit plans of changes in net debt or net assets 2.Other comprehensive income under the equity method investee can not be reclassi fied into profit or loss. (II) -87,993.67 -33,628.64 Other comprehensive income that will be reclassified into profit or loss. 1.Other comprehensive income under the equity method investee can be reclassified into profit or loss. 2.Gains and losses from changes in fair value available for sale financial assets 3.Held-to-maturity investments reclassified to gains and losses of available for sale financial assets 4.The effective portion of cash flow hedges and losses 5.Translation differences in currency financial statements 6.Other Net of profit of other comprehensive income attributable to Minority -118,663.20 -45,349.65 shareholders’ equity VII. Total comprehensive income 7,226,390.17 14,034,071.90 Total comprehensive income attributable to the owner of the parent company 6,532,251.95 7,665,288.65 Total comprehensive income attributable minority shareholders 694,138.22 6,368,783.25 VIII. Earnings per share (I)Basic earnings per share 0.01 0.01 (II)Diluted earnings per share 0.01 0.01 Legal Representative: Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 4. Income statement of the Parent Company In RMB Items Amount in this period Amount in last period I. Income from the key business 444,691,641.41 341,346,099.84 Less:Business cost 249,624,442.47 257,152,480.22 Business tax and surcharge 2,196,050.90 369,162.31 Sales expense 22,321,192.89 22,736,698.67 Administrative expense 122,056,468.72 106,269,020.69 Financial expenses -22,425.04 1,724,356.87 Asset impairment loss 53,718,028.56 -28,650,041.06 Add:Gains from change of fir value (“-”for loss) 16 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) Investment gain(“-”for loss) 9,066,918.00 56,348,295.89 Incl: investment gains from affiliates II. Operational profit(“-”for loss) 3,864,800.91 38,092,718.03 Add :Non-operational income 514.00 2,700,000.00 Including:Income from disposal of non-current assets Less:Non business expenses 455,391.64 368,782.00 Incl:Loss from disposal of non-current assets III.Total profit(“-”for loss) 3,409,923.27 40,423,936.03 Less:Income tax expenses IV. Net profit(“-”for net loss) 3,409,923.27 40,423,936.03 V.Net of profit of other comprehensive income (I)Other comprehensive income items that will not be reclassified into gains/losses in the subsequent accounting period 1.Re-measurement of defined benefit plans of changes in net debt or net assets 2.Other comprehensive income under the equity method investee can not be reclassified into profit or loss. ( II ) Other comprehensive income that will be reclassified into profit or l oss. 1.Other comprehensive income under the equity method investee can be reclassified into profit or loss. 2.Gains and losses from changes in fair value available for sale finan cial assets 3.Held-to-maturity investments reclassified to gains and losses of av ailable for sale financial assets 4.The effective portion of cash flow hedges and losses 5.Translation differences in currency financial statements 6.Other VI. Total comprehensive income 3,409,923.27 40,423,936.03 VII. Earnings per share: (I)Basic earnings per share 0.0045 0.05 (II)Diluted earnings per share 0.0045 0.05 Legal Representative: Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 17 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) 5. Consolidated Cash flow statement In RMB Items Amount in this period Amount in last period I.Cash flows from operating activities Cash received from sales of goods or rending of services 634,119,438.95 545,839,862.44 Net increase of customer deposits and capital kept for brother company Net increase of loans from central bank Net increase of inter-bank loans from other financial bodies Cash received against original insurance contract Net cash received from reinsurance business Net increase of client deposit and investment Net increase of the financial assets that are measured at fair value and whose movement is counted to the current gain and loss Cash received as interest, processing fee and commission Net increase of inter-bank fund received Net increase of repurchasing business Tax returned 206,444.13 2,243,631.99 Other cash received from business operation 4,527,768.44 8,738,087.71 Sub-total of cash inflow 638,853,651.52 556,821,582.14 Cash paid for purchasing of merchandise and services 352,945,569.94 269,085,899.39 Net increase of client trade and advance Net increase of savings n central bank and brother company Cash paid for original contract claim Cash paid for interest, processing fee and commission Cash paid for policy dividend Cash paid to staffs or paid for staffs 179,244,664.51 174,687,085.20 Taxes paid 51,177,497.74 124,021,842.68 Other cash paid for business activities 36,934,997.71 38,331,773.41 Sub-total of cash outflow from business activities 620,302,729.90 606,126,600.68 Cash flow generated by business operation, net 18,550,921.62 -49,305,018.54 II.Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains 5,321,846.55 5,301,195.26 18 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) Net cash retrieved from disposal of fixed assets, intangible assets, and 24,250.00 other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 282,000,000.00 383,999,999.98 Sub-total of cash inflow due to investment activities 287,321,846.55 389,325,445.24 Cash paid for construction of fixed assets, intangible assets and other 27,199,171.61 14,568,642.55 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 378,700,000.00 257,055,999.95 Sub-total of cash outflow due to investment activities 405,899,171.61 277,600,232.75 Net cash flow generated by investment -118,577,325.06 111,725,212.49 III.Cash flow generated by financing Cash received as investment Incl: Cash received as investment from minor shareholders Cash received as loans 20,000,000.00 55,400,000.00 Cash received from bond placing Other financing –related ash received Sub-total of cash inflow from financing activities 20,000,000.00 55,400,000.00 Cash to repay debts 50,100,000.00 55,400,000.00 Cash paid as dividend, profit, or interests 4,322,806.47 10,925,944.80 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 54,422,806.47 66,325,944.80 Net cash flow generated by financing -34,422,806.47 -10,925,944.80 IV. Influence of exchange rate alternation on cash and cash equivalents 264,528.71 1,669,114.22 V.Net increase of cash and cash equivalents -134,184,681.20 53,163,363.37 Add: balance of cash and cash equivalents at the beginning of term 751,596,796.24 613,958,063.91 VI ..Balance of cash and cash equivalents at the end of term 617,412,115.04 667,121,427.28 Legal Representative: Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 19 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) 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 384,359,061.84 329,122,942.49 Tax returned 2,122,030.27 Other cash received from business operation 3,837,208.00 526,913.71 Sub-total of cash inflow 388,196,269.84 331,771,886.47 Cash paid for purchasing of merchandise and services 209,390,179.45 212,838,807.91 Cash paid to staffs or paid for staffs 124,656,555.17 123,377,161.90 Taxes paid 13,782,902.84 80,459,433.07 Other cash paid for business activities 40,683,952.46 10,909,165.95 Sub-total of cash outflow from business activities 388,513,589.92 427,584,568.83 Cash flow generated by business operation, net -317,320.08 -95,812,682.36 II.Cash flow generated by investing Cash received from investment retrieving Cash received as investment gains 9,066,918.00 56,348,295.89 Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 120,000,000.00 30,000,000.00 Sub-total of cash inflow due to investment activities 129,066,918.00 86,348,295.89 Cash paid for construction of fixed assets, intangible assets 23,359,420.46 5,779,711.97 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 290,000,000.00 Sub-total of cash outflow due to investment activities 313,359,420.46 11,755,302.22 Net cash flow generated by investment -184,292,502.46 74,592,993.67 III.Cash flow generated by financing Cash received as investment Cash received as loans Cash received from bond placing 20 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2016(Full text) Other financing –related ash received Sub-total of cash inflow from financing activities Cash to repay debts Cash paid as dividend, profit, or interests 1,150,000.00 Other cash paid for financing activities Sub-total of cash outflow due to financing activities 1,150,000.00 Net cash flow generated by financing -1,150,000.00 IV. Influence of exchange rate alternation on cash and cash -328,995.22 756,465.27 equivalents V.Net increase of cash and cash equivalents -184,938,817.76 -21,613,223.42 Add: balance of cash and cash equivalents at the beginning of 387,916,202.79 248,509,410.84 term VI ..Balance of cash and cash equivalents at the end of term 202,977,385.03 226,896,187.42 Legal Representative:Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao II. Auditors’ Report The first Quarterly Report not audited Hangzhou Steam Turbine Co., Ltd. Chairman of the Board: Zheng Bin April 21,2016 21