Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(Full text) Stock Code: 20077 Stock ID: Hangqilun B Announcement No. 2017-34 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017 April 2017 1 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(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 2017(Full text) II. Basic information about the company 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 same This period Same period of last year period of last year(%) Operating income(RMB) 748,344,237.44 687,834,749.02 8.80% Net profit attributable to the shareholders of 16,752,601.64 6,620,245.62 153.05% the listed company(RMB) Net profit after deducting of non-recurring gain/loss attributable to the shareholders of -15,980,860.17 2,908,791.39 -649.40% listed company(RMB) Cash flow generated by business operation, -200,738,208.12 18,550,921.62 -1,182.09% net(RMB) Basic earning per share(RMB/Share) 0.02 0.01 100.00% Diluted gains per 0.02 0.01 100.00% share(RMB/Share)(RMB/Share) Weighted average return on equity(%) 0.24% 0.16% 0.08% Changes of this period-end over End of this period End of last period same period-end of last year(%) Gross assets(RMB) 10,966,970,527.59 10,550,899,708.34 3.94% Net assets attributable to the shareholders 6,608,363,192.44 6,385,346,243.23 3.49% of the listed company(RMB) Items and amount of non-current gains and losses In RMB Amount (Year-beginning to the Non-recurring gain and loss items Notes end of the report period.) Non-current asset disposal gain/loss(including the write-off part for which assets impairment provision -2,499.60 is made) Govemment subsidy recognized in current gain and loss(excluding those closely related to the Company’s 2,486,351.20 business and granted under the state’s policies) Gain/loss from change of fair value of transactional financial asset and liabilities, and investment gains 35,686,339.58 from disposal of transactional financial assets and 3 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(Full text) liabilities and sellable financial assets other than valid period value instruments related to the Company’s common businesses. Other non-operating income and expenditure except 1,554,852.88 for the aforementioned items Less: Amount of influence of income tax 6,479,408.00 Amount of influence of minority interests(After tax) 512,174.25 Total 32,733,461.81 -- 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. 4 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(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 Total number of common shareholders at the 15,314 power recovered at the end of the reporting 0 period-end period(if any) Shares held by the top 10 shareholders Amount of Pledging or freezing tradable Properties of Share Shareholder name Quantity shares with Status of shareholder proportion % Quantity Conditional the shares held State-owned legal Hangzhou Steam Turbine Power Group Co., Ltd. 63.64% 479,824,800 479,824,800 person Foreign legal Shanwan Hongyuan Securities (HK) Co.,Ltd. 0.71% 5,325,166 0 person BBH A/C VANGUARD EMERGING MARKETS Foreign legal 0.63% 4,722,804 0 STOCK INDEX FUND person Foreign legal NORGES BANK 0.57% 4,303,675 0 person GUOTAIJUNAN SECURITIES(HONGKONG) Foreign legal 0.45% 3,411,781 0 LIMITED person VANGUARD TOTAL INTERNATIONAL STOCK Foreign legal 0.45% 3,370,146 0 INDEX FUND person CHINA INT'L CAPITAL CORP HONG KONG Foreign legal 0.32% 2,425,960 0 SECURITIES LTD person State-owned legal China Merchants Secutities(HK)Co., Ltd. 0.31% 2,318,344 0 person Domestic Natural Xia Zulin 0.28% 2,100,000 0 person Foreign legal ISHARES CORE MSCI EMERGING MARKETS ETF 0.26% 1,988,800 0 person Shares held by the Top 10 Shareholders of Non-restricted shares Number of the non-restricted Share type Shareholders’ Names shares held Share type Quantity Foreign shares Shanwan Hongyuan Securities (HK) Co.,Ltd. 5,325,166 placed in domestic 5,325,166 exchange Foreign shares BBH A/C VANGUARD EMERGING MARKETS STOCK INDEX FUND 4,722,804 4,722,804 placed in domestic 5 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(Full text) exchange Foreign shares NORGES BANK 4,303,675 placed in domestic 4,303,675 exchange Foreign shares GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 3,411,781 placed in domestic 3,411,781 exchange Foreign shares VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND 3,370,146 placed in domestic 3,370,146 exchange Foreign shares CHINA INT'L CAPITAL CORP HONG KONG SECURITIES LTD 2,425,960 placed in domestic 2,425,960 exchange Foreign shares China Merchants Secutities(HK)Co., Ltd. 2,318,344 placed in domestic 2,318,344 exchange Foreign shares Xia Zulin 2,100,000 placed in domestic 2,100,000 exchange Foreign shares ISHARES CORE MSCI EMERGING MARKETS ETF 1,988,800 placed in domestic 1,988,800 exchange Foreign shares CREDIT SUISSE AG HONG KONG BRANCH 1,729,759 placed in domestic 1,729,759 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 holders Explanation on associated relationship or concerted action of the above without restriction; (3) Hangzhou Steam Turbine Group Co., Ltd. is not an shareholders “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 & Not applicable securities lending (If any) The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy –back agreement dealing in reporting period. 6 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(Full text) 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 In RMB Balance sheet items Ending balance in Opening balance in Proportion of Causes of change CNY CNY the change Mainly due to the current repayment of the bill Bill receivable 598,481,186.07 479,716,321.62 24.76% more due Mainly due to the current period in accordance Advance account 500,527,501.83 202,184,858.83 147.56% with the provisions of the purchase contract prepaid to the supplier due to the increase Mainly due to the current purchase of financial Other current assets 642,270,509.40 863,018,479.59 -25.58% products due to reduced year on year Profit statement items Amount in the Same period of the Proportion n f Causes of change reporting period previous year , CNY the change Mainly due to the long-term accounts receivable Asset impairment loss -250,837.45 65,049,476.00 -100.39% with a long aging, aging structure changes are not obvious, less provision for bad debts due Which was mainly due to the investment income Investment income 35,686,339.58 4,321,846.55 725.72% of the Changdi equity investment partnership of the Company Mainly due to the impairment loss of assets of the current period, while the company transferred Total profit 30,423,182.05 12,921,893.35 135.44% Changdi equity investment partnership formed investment income Cash flow statement Items Amount in the Same period of the Proportion n f Causes of change reporting period previous year , CNY the change Cash flow generated by Mainly due to the increase in taxes paid in the business operation, net -200,738,208.12 18,550,921.62 -1182.09% current period, the number of acceptance bills in the quarter due to more Net cash flow generated by Mainly due to the current period due to increase 264,097,295.53 -118,577,325.06 322.72% investment in wealth management products 7 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(Full text) Net cash flow generated by Mainly due to the decrease in the amount of bank 5,613,901.44 -34,422,806.47 116.31% Financing repayment in the current period II. Progress of Significant Events, their Influences and Analytical Notice on the Solutions The optimize the company's capital structure and meet the needs of the company’s operating funds, the company made the transfer of the Company’s Share of Property of Changdi Equity Investment. The Content is available as The Announcement No. 2016-76,2016-78 and 2016-89 released by Securities Times, Shanghai Securities Daily, Hong Kong Commercial Daily and http://www.cninfo.com.cn dated October 23, 2016,November 17,2016 and December 26, 2016 respectively . On January 3, 2017, the Company formally signed an agreement on the transfer of the shares of Hangzhou Changdi Equity Investment Partnership Firm (limited partnership) with Zhejiang Juqing Investment Co., Ltd. and received the announcement from Zhejiang Juqing Investment Co., Ltd. on Jan. 17 Of the transfer of 73.68 million yuan. 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, 2017 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 Nil VIII. Outward Guarantee against the Regulations Nil 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. 8 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(Full text) March 31, 2017 In RMB Items At the end of term Beginning of term Current asset: Monetary fund 963,520,330.47 895,037,559.34 Settlement provision Outgoing call loan Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Bill receivable 598,481,186.07 479,716,321.62 Account receivable 1,850,030,050.66 1,870,173,348.32 Prepayments 500,527,501.83 202,184,858.83 Insurance receivable Reinsurance receivable Provisions of Reinsurance contracts receivable Interest receivable Dividend receivable Other account receivable 33,995,911.23 31,024,707.72 Repurchasing of financial assets Inventories 1,875,368,114.41 1,901,544,358.26 Assets held for sales Non-current asset due in 1 year Other current asset 642,270,509.40 863,018,479.59 Total of current assets 6,464,193,604.07 6,242,699,633.68 Non-current assets: Loans and payment on other’s behalf disbursed Disposable financial asset 3,275,053,230.80 3,060,865,862.60 Expired investment in possess Long-term receivable Long term share equity investment Property investment Fixed assets 619,751,044.63 615,922,109.91 Construction in progress 135,498,725.71 153,743,889.41 Engineering material 9 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(Full text) Fixed asset disposal Production physical assets Gas & petrol Intangible assets 295,093,450.44 297,405,434.08 R & D petrol Goodwill Long-germ expenses to be amortized 1,364,677.87 1,430,968.81 Deferred income tax asset 176,015,794.07 178,831,809.85 Other non-current asset Total of non-current assets 4,502,776,923.52 4,308,200,074.66 Total of assets 10,966,970,527.59 10,550,899,708.34 Current liabilities Short-term loans 189,000,000.00 173,000,000.00 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 103,937,144.69 143,007,715.10 Account payable 985,133,211.04 853,452,589.51 Advance payment 1,938,382,883.42 1,827,959,793.62 Selling of repurchased financial assets Fees and commissions receivable Employees’ wage payable 57,236,993.90 71,224,634.03 Tax payable 44,503,432.18 90,239,673.16 Interest payable 134,376.32 Dividend payable Other account payable 28,030,927.57 30,820,980.80 Reinsurance fee payable Insurance contract provision Entrusted trading of securities Entrusted selling of securities Liabilities held for sales 10 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(Full text) Non-current liability due in 1 year 18,400,000.00 18,500,000.00 Other current liability Total of current liability 3,364,624,592.80 3,208,339,762.54 Non-current liabilities: Long-term loan 4,900,000.00 4,900,000.00 Bond payable Including:preferred stock Sustainable debt Long-term payable 208,330,000.00 208,357,733.33 Long-term payable employees’s remuneration Special payable Expected liabilities Deferred income 5,845,868.90 5,422,895.00 Deferred income tax liability 414,668,504.95 378,256,646.95 Other non-current liabilities 1,206,800.00 Total non-current liabilities 634,951,173.85 596,937,275.28 Total of liability 3,999,575,766.65 3,805,277,037.82 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 Less:Shares in stock Other comprehensive income 2,343,744,645.93 2,137,419,299.84 Special reserves 27,485,354.85 27,546,353.37 Surplus reserves 621,112,807.78 621,112,807.78 Common risk provision Undistributed profit 2,722,419,638.79 2,705,667,037.15 Total of owner’s equity belong to the parent company 6,608,363,192.44 6,385,346,243.23 Minority shareholders’ equity 359,031,568.50 360,276,427.29 Total of owners’ equity 6,967,394,760.94 6,745,622,670.52 Total of liabilities and owners’ equity 10,966,970,527.59 10,550,899,708.34 11 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(Full text) 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 369,257,687.80 293,454,126.93 Financial assets measured at fair value with variations accounted into current income account Derivative financial assets Bill receivable 382,706,768.83 269,527,716.22 Account receivable 1,363,790,459.95 1,424,950,696.58 Prepayments 395,928,522.54 115,383,408.34 Interest receivable Dividend receivable Other account receivable 66,758,184.15 68,004,706.24 Inventories 1,452,691,612.12 1,446,652,799.71 Assets held for sales Non-current asset due in 1 year Other current asset 455,297,660.50 600,000,000.00 Total of current assets 4,486,430,895.89 4,217,973,454.02 Non-current assets: Disposable financial asset 3,234,293,541.22 3,020,106,173.02 Expired investment in possess Long-term receivable Long term share equity investment 502,919,378.03 502,919,378.03 Property investment Fixed assets 308,939,367.77 315,900,380.66 Construction in progress 89,029,121.20 94,170,909.99 Engineering material Fixed asset disposal Production physical assets Gas & petrol Intangible assets 172,814,800.34 173,826,293.57 12 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(Full text) R & D petrol Goodwill Long-germ expenses to be amortized 507,773.78 507,773.78 Deferred income tax asset 128,131,953.86 133,581,773.70 Other non-current asset Total of non-current assets 4,436,635,936.20 4,241,012,682.75 Total of assets 8,923,066,832.09 8,458,986,136.77 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 668,997,858.64 486,810,046.42 Advance payment 1,562,572,026.28 1,476,780,338.78 Employees’ wage payable 34,306,740.86 44,035,408.19 Tax payable 25,023,298.55 64,247,326.24 Interest payable Dividend payable Other account payable 18,426,830.40 21,562,998.72 Classified as held for sale debt Non-current liability due in 1 year Other current liability Total of current liability 2,409,326,754.73 2,193,436,118.35 Non-current liabilities: Long-term loan Bond payable Including:preferred stock Sustainable debt Long-term payable Long-term payable to employees Special payable Expected liabilities Deferred income 422,973.90 Deferred income tax liability 414,668,504.95 378,256,646.95 Other non-current liabilities 13 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(Full text) Total of Non-current liabilities 415,091,478.85 378,256,646.95 Total of liability 2,824,418,233.58 2,571,692,765.30 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 2,344,134,018.80 2,137,800,156.80 Special reserves 10,870,071.58 10,874,033.85 Surplus reserves 602,356,402.65 602,356,402.65 Undistributed profit 2,248,324,455.39 2,243,299,128.08 Total of owners’ equity 6,098,648,598.51 5,887,293,371.47 Total of liabilities and owners’ equity 8,923,066,832.09 8,458,986,136.77 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 748,344,237.44 687,834,749.02 Incl:Business income 748,344,237.44 687,834,749.02 Interest income Insurance fee earned Fee and commission received II. Total business cost 757,643,833.76 678,666,814.16 Incl:Business cost 525,196,208.66 393,516,347.50 Interest expense Fee and commission paid Insurance discharge payment Net claim amount paid Net amount provided as insurance contract reserves 14 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(Full text) Insurance policy dividend paid Reinsurance expenses Business tax and surcharge 8,821,742.95 3,928,086.05 Sales expense 41,648,800.76 35,428,813.22 Administrative expense 179,175,254.56 179,385,377.44 Financial expenses 3,052,664.28 1,358,713.95 Asset impairment loss -250,837.45 65,049,476.00 Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 35,686,339.58 4,321,846.55 Incl: investment gains from affiliates Gains from currency exchange(“-”for loss) III. Operational profit(“-”for loss) 26,386,743.26 13,489,781.41 Add :Non-operational income 4,284,015.39 427,545.14 Including:Income from disposal of non-current assets Less:Non business expenses 247,576.60 995,433.20 Incl:Loss from disposal of non-current assets 2,499.60 2,286.95 IV.Total profit(“-”for loss) 30,423,182.05 12,921,893.35 Less:Income tax expenses 6,592,924.19 5,488,846.31 V. Net profit 23,830,257.86 7,433,047.04 Net profit attributable to the owners of parent company 16,752,601.64 6,620,245.62 Minority shareholders’ equity 7,077,656.22 812,801.42 VI. Other comprehensive income 206,313,862.01 -206,656.87 Net of profit of other comprehensive income attributable to owner 206,325,346.09 -87,993.67 s of the parent company. (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 206,325,346.09 -87,993.67 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 fin 206,333,862.00 15 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(Full text) ancial 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 -8,515.91 -87,993.67 6.Other Net of profit of other comprehensive income attributable to Minor -11,484.08 -118,663.20 ity shareholders’ equity VII. Total comprehensive income 230,144,119.87 7,226,390.17 Total comprehensive income attributable to the owner of the 223,077,947.73 6,532,251.95 parent company Total comprehensive income attributable minority shareholders 7,066,172.14 694,138.22 VIII. Earnings per share (I)Basic earnings per share 0.02 0.01 (II)Diluted earnings per share 0.02 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 518,830,806.22 444,691,641.41 Less:Business cost 377,206,922.31 249,624,442.47 Business tax and surcharge 4,229,839.47 2,196,050.90 Sales expense 25,219,505.56 22,321,192.89 Administrative expense 133,291,786.10 122,056,468.72 Financial expenses 2,450,317.94 -22,425.04 Asset impairment loss -3,268,417.23 53,718,028.56 Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 29,484,295.08 9,066,918.00 Incl: investment gains from affiliates 16 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(Full text) II. Operational profit(“-”for loss) 9,185,147.15 3,864,800.91 Add :Non-operational income 1,300,000.00 514.00 Including:Income from disposal of non-current assets Less:Non business expenses 10,000.00 455,391.64 Incl:Loss from disposal of non-current assets III.Total profit(“-”for loss) 10,475,147.15 3,409,923.27 Less:Income tax expenses 5,449,819.84 IV. Net profit(“-”for net loss) 5,025,327.31 3,409,923.27 V.Net of profit of other comprehensive income 206,333,862.00 (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 206,333,862.00 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 fin 206,333,862.00 ancial 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 VI. Total comprehensive income 211,359,189.31 3,409,923.27 VII. Earnings per share: (I)Basic earnings per share 0.007 0.0045 (II)Diluted earnings per share 0.007 0.0045 17 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(Full text) Legal Representative: Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 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 558,114,951.23 634,119,438.95 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 Other cash received from business operation 5,675,366.23 4,527,768.44 Sub-total of cash inflow 563,790,317.46 638,853,651.52 Cash paid for purchasing of merchandise and services 439,261,241.07 352,945,569.94 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 181,268,694.01 179,244,664.51 Taxes paid 105,253,360.58 51,177,497.74 Other cash paid for business activities 38,745,229.92 36,934,997.71 Sub-total of cash outflow from business activities 764,528,525.58 620,302,729.90 Cash flow generated by business operation, net -200,738,208.12 18,550,921.62 II.Cash flow generated by investing 18 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(Full text) Cash received from investment retrieving 48,558,351.80 Cash received as investment gains 35,686,339.58 5,321,846.55 Net cash retrieved from disposal of fixed assets, intangible assets, and 407,144.18 other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 845,700,000.00 282,000,000.00 Sub-total of cash inflow due to investment activities 930,351,835.56 287,321,846.55 Cash paid for construction of fixed assets, intangible assets and other 20,254,540.03 27,199,171.61 long-term assets Cash paid as investment 20,000,000.00 Net increase of loan against pledge Net cash received from subsidiaries and other operational units Other cash paid for investment activities 626,000,000.00 378,700,000.00 Sub-total of cash outflow due to investment activities 666,254,540.03 405,899,171.61 Net cash flow generated by investment 264,097,295.53 -118,577,325.06 III.Cash flow generated by financing Cash received as investment Incl: Cash received as investment from minor shareholders Cash received as loans 36,000,000.00 20,000,000.00 Cash received from bond placing Other financing –related ash received Sub-total of cash inflow from financing activities 36,000,000.00 20,000,000.00 Cash to repay debts 20,100,000.00 50,100,000.00 Cash paid as dividend, profit, or interests 1,926,513.37 4,322,806.47 Incl: Dividend and profit paid by subsidiaries to minor shareholders Other cash paid for financing activities 8,359,585.19 Sub-total of cash outflow due to financing activities 30,386,098.56 54,422,806.47 Net cash flow generated by financing 5,613,901.44 -34,422,806.47 IV. Influence of exchange rate alternation on cash and cash equivalents -490,217.72 264,528.71 V.Net increase of cash and cash equivalents 68,482,771.13 -134,184,681.20 Add: balance of cash and cash equivalents at the beginning of term 895,037,559.34 751,596,796.24 VI ..Balance of cash and cash equivalents at the end of term 963,520,330.47 617,412,115.04 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 2017(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 431,634,661.29 384,359,061.84 Tax returned Other cash received from business operation 812,899.66 3,837,208.00 Sub-total of cash inflow 432,447,560.95 388,196,269.84 Cash paid for purchasing of merchandise and services 338,102,954.16 209,390,179.45 Cash paid to staffs or paid for staffs 124,416,505.09 124,656,555.17 Taxes paid 71,346,176.98 13,782,902.84 Other cash paid for business activities 11,779,176.90 40,683,952.46 Sub-total of cash outflow from business activities 545,644,813.13 388,513,589.92 Cash flow generated by business operation, net -113,197,252.18 -317,320.08 II.Cash flow generated by investing Cash received from investment retrieving 48,558,351.80 Cash received as investment gains 29,484,295.08 9,066,918.00 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 430,000,000.00 120,000,000.00 Sub-total of cash inflow due to investment activities 508,042,646.88 129,066,918.00 Cash paid for construction of fixed assets, intangible assets 12,874,611.09 23,359,420.46 and other long-term assets Cash paid as investment 20,000,000.00 Net cash received from subsidiaries and other operational units Other cash paid for investment activities 285,000,000.00 290,000,000.00 Sub-total of cash outflow due to investment activities 317,874,611.09 313,359,420.46 Net cash flow generated by investment 190,168,035.79 -184,292,502.46 III.Cash flow generated by financing Cash received as investment Cash received as loans Cash received from bond placing Other financing –related ash received 20 Hangzhou Steam Turbine Co., Ltd. The 1st Quarterly Report 2017(Full text) Sub-total of cash inflow from financing activities Cash to repay debts Cash paid as dividend, profit, or interests 837,500.00 Other cash paid for financing activities Sub-total of cash outflow due to financing activities 837,500.00 Net cash flow generated by financing -837,500.00 IV. Influence of exchange rate alternation on cash and cash equivalents -329,722.74 -328,995.22 V.Net increase of cash and cash equivalents 75,803,560.87 -184,938,817.76 Add: balance of cash and cash equivalents at the beginning of term 293,454,126.93 387,916,202.79 VI ..Balance of cash and cash equivalents at the end of term 369,257,687.80 202,977,385.03 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 26,2017 21