The 3rd Quarterly Report 2017(Full Text) Stock code:200771 Stock ID:Hangqilun B Announcement No.2017-68 Hangzhou Steam Turbine Co., Ltd. The Third Quarterly Report 2017(Full Text) (Stock code:200771) 2017 年 08 月 October 2017 1 The 3rd Quarterly Report 2017(Full Text) 1 Important notes 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 Quarterly Report and we will accept individual and joint responsibilities for the truthfulness, accuracy and completeness of the Quarterly Report. All of the directors presented the board meeting at which this Quarterly Report was examined. Mr. Zheng Bin, The Company Leader, Mr. Pu Yangshuo, Chief financial officer and the Mr.Zhao Jiamao, the person in charge of the accounting department (the person in charge of the accounting )hereby confirm the authenticity and completeness of the financial report enclosed in the report. 2 The 3rd Quarterly Report 2017(Full Text) II.Main financial data and changes of shareholders (1)Main accounting data and financial Index Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting error correction or not. No As at the end of the As at the end of last year Changed (%)over end of prev. year reporting period Gross assets(RMB) 11,224,208,951.10 10,550,899,708.34 6.38% Net assets attributable to the shareholders of 6,278,110,666.11 6,385,346,243.23 -1.68% the listed company(RMB) Increase/decrease over Between beginning of Changed (%)over Reporting period the same period of last the year to the end of end of prev. year year(%) the report period Operating income(RMB) 925,501,518.37 5.84% 2,589,226,220.63 15.50% Net profit attributable to the shareholders of 19,997,776.79 168.75% 63,993,581.17 206.05% the listed company(RMB) Net profit after deducting of non-recurring gain/loss attributable to the shareholders of 9,699,270.59 126.56% 13,259,488.98 116.58% listed company(RMB) Cash flow generated by business operation, -- -- 199,924,781.38 -44.63% net(RMB) Basic earning per share(RMB/Share) 0.027 169.23% 0.085 206.25% Diluted gains per 0.027 169.23% 0.085 206.25% share(RMB/Share)(RMB/Share) Weighted average income/asset ratio(%) 0.32% 1.02% 1.01% 2.45% 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 2,724,203.46 assets impairment provision is made) Govemment subsidy recognized in current gain and loss(excluding those closely related to the Company’s business and granted under the state’s 3,158,099.85 policies) Gain/loss from change of fair value of transactional financial asset and 52,715,774.41 3 The 3rd Quarterly Report 2017(Full Text) liabilities, and investment gains from disposal of transactional financial assets and 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 3,384,963.82 Less:Amount of influence of income tax 10,147,425.90 Influence on minority shareholders’ equity (after tax) 1,101,523.45 Total 50,734,092.19 -- For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as recurring gains and losses, it is necessary to explain the reason. 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 The 3rd 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 Total number of common shareholders at 14,916 voting power recovered at the end of the 0 the period-end reporting period(if any) Shares held by the top 10 shareholders Pledging or Amount of Share freezing Properties of tradable shares Shareholder name proportion Quantity Status shareholder with Conditional Qua % of the held ntity shares State-owned Hangzhou Steam Turbine Power Group Co., Ltd. 63.64% 479,824,800 479,824,800 legal person BBH A/C VANGUARD EMERGING MARKETS STOCK INDEX Foreign legal 0.63% 4,722,804 0 FUND person Foreign legal NORGES BANK 0.57% 4,303,675 0 person Foreign legal VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND 0.46% 3,454,046 0 person Foreign legal GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 0.35% 2,670,262 0 person Foreign legal ISHARES CORE MSCI EMERGING MARKETS ETF 0.34% 2,546,600 0 person State-owned China Merchants Secutities(HK)Co., Ltd. 0.31% 2,319,872 0 legal person Domestic Xia Zulin 0.28% 2,147,400 0 Natural person Foreign legal CHINA INT'L CAPITAL CORP HONG KONG SECURITIES LTD 0.25% 1,905,960 0 person Foreign legal CREDIT SUISSE AG HONG KONG BRANCH 0.23% 1,729,759 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 5 The 3rd Quarterly Report 2017(Full Text) BBH A/C VANGUARD EMERGING MARKETS STOCK INDEX Foreign shares placed 4,722,804 4,722,804 FUND in domestic exchange Foreign shares placed NORGES BANK 4,303,675 4,303,675 in domestic exchange Foreign shares placed VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND 3,454,046 3,454,046 in domestic exchange Foreign shares placed GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 2,670,262 2,670,262 in domestic exchange Foreign shares placed ISHARES CORE MSCI EMERGING MARKETS ETF 2,546,600 2,546,600 in domestic exchange Foreign shares placed China Merchants Secutities(HK)Co., Ltd. 2,319,872 2,319,872 in domestic exchange Foreign shares placed Xia Zulin 2,147,400 2,147,400 in domestic exchange CHINA INT'L CAPITAL CORP HONG KONG SECURITIES Foreign shares placed 1,905,960 1,905,960 LTD in domestic exchange Foreign shares placed CREDIT SUISSE AG HONG KONG BRANCH 1,729,759 1,729,759 in domestic exchange Foreign shares placed Shenwan Hongyuan Securities(H.K)Co., Ltd. 1,368,900 1,368,900 in domestic exchange (1)It is unknown to the Company if there is any relationship among the top 10 common share holders without restriction; (2) Hangzhou Steam Turbine Explanation on associated relationship or concerted action of the Group Co., Ltd. is not an action-in-concert” party with any of other above shareholders 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 Not applicable financing & securities lending (If any) Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period. 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. 2.Total number of preferred shareholders and shareholding of top 10 preferred shareholders by the end of the report period Not applicable 6 The 3rd Quarterly Report 2017(Full Text) 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 Causes of change CNY CNY of the change Note receivable Mainly due to the notes receivable received in 631,626,005.81 479,716,321.62 31.67% the current period increased Advance payments Mainly due to current advances to raw 359,433,917.88 202,184,858.83 77.77% materials increased Note payable Mainly due to increase in acceptance of current 195,415,523.63 143,007,715.10 36.65% period Advances from Mainly due to the current increase in the new 2,396,631,380.02 1,827,959,793.62 31.11% customers contract Taxes and surcharges Mainly due to there is no value-added tax at the 18,561,605.50 90,239,673.16 -79.43% payable beginning of this period Deferred income Mainly due to increase in financial subsidies 9,357,937.15 5,422,895.00 72.56% received in the current period Income statement End of term Same period of last Scale of Remarks on the change items term change Operation income Mainly due to this issue will further strengthen 2,589,226,220.63 2,241,834,391.89 15.50% the market development efforts, increase the number of sales units Operation cost Mainly due to the current operating income 1,828,109,215.33 1,487,970,320.21 22.86% increased year on year, the corresponding increase in operating costs Mainly due to the accounts receivable with long Impairment loss on 95,749,825.99 166,025,332.68 -42.33% aging accounts are better recovered and bad assets debts are reduced Mainly due to the current sale of Long Beach Investment income 106,730,672.88 21,938,936.95 386.49% shares and received the formation of Hangzhou Bank dividend income increased Cash flow statement Amount in the Same period of the Proportion Causes of change Items reporting period previous year , CNY n f the change Cash flow generated Mainly due to cash paid for the purchase of by business 199,924,781.38 361,060,410.70 -44.63% goods in the current period increased year on operation, net year Net cash flow -60,830,933.81 -460,559,408.37 86.79% Mainly due to the net redemption and 7 The 3rd Quarterly Report 2017(Full Text) generated by investment income of the current financial investment products increased year on year Net increasing of Mainly due to the net cash flow from investing cash and cash 89,725,778.97 -155,001,766.35 157.89% activities increased during the current period equivalents II. Progress of Significant Events, their Influences and Analytical Notice on the Solutions Not applicable 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 of 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 Reception time Way of reception Types of visitors Basic index August 31, Onsite Details are the relevant information disclosure Individual 2017 investigation (http://www.cninfo.com.cn/) 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 X. Implementation of the social Responsibility of taking targeted measures to alleviate poverty in light of local Conditions. In The report third quarter, the company neither carried out the work of taking targeted measures to alleviate poverty in light of local conditions nor has such a plan. 8 The 3rd Quarterly Report 2017(Full Text) IV. Financial Statement I. Financial statement 1. Consolidated balance sheet Prepared by::Hangzhou Steam Turbine Co., Ltd. September 30, 2017 In RMB Items At the end of term Beginning of term Current asset: Cash and bank balances 984,763,338.31 895,037,559.34 Settlement provision Due from banks and other financial institutions Financial assets at fair value through profit or loss Derivative financial assets Notes receivable 631,626,005.81 479,716,321.62 Account receivable 1,890,911,988.49 1,870,173,348.32 Advance payments 359,433,917.88 202,184,858.83 Premium receivable Reinsurance receivable Reserve for reinsurance receivable Interest receivable Dividend receivable 6,900,000.00 Other receivable 22,579,000.09 31,024,707.72 Securities purchased under agreements to resell Inventories 2,157,037,005.13 1,901,544,358.26 Held-for-sale assets Current portion of non-current assets Other current asset 1,051,506,201.41 863,018,479.59 Total of current assets 7,104,757,457.12 6,242,699,633.68 Non-current assets: Loans and advances Available-for-sale financial assets 2,881,452,766.48 3,060,865,862.60 Held-to-maturity investments Long-term receivable Long term share equity investment Property investment 9 The 3rd Quarterly Report 2017(Full Text) Fixed assets 581,548,823.90 615,922,109.91 Construction in progress 174,101,684.00 153,743,889.41 Construction materials Fixed assets pending for disposal Productive biological assets Gas & petrol Intangible assets 292,973,318.92 297,405,434.08 Research and Development Expenditures Goodwill Long-term prepaid expenses 1,108,007.99 1,430,968.81 Deferred income tax 188,266,892.69 178,831,809.85 Other non-current asset Total of non-current assets 4,119,451,493.98 4,308,200,074.66 Total of assets 11,224,208,951.10 10,550,899,708.34 Current liabilities Short-term bank loan facilities 197,500,000.00 173,000,000.00 Borrowings from central bank Deposits and placements from other financial institutions Placement from banks and other financial institution Financial liabilities at fair value through profit and loss Derivative financial liabilities Notes payable 195,415,523.63 143,007,715.10 Account payable 1,105,169,157.59 853,452,589.51 Advances from customers 2,396,631,380.02 1,827,959,793.62 Securities sold under agreement to repurchase Fees and commissions payable Payroll payable 75,799,733.03 71,224,634.03 Taxes and surcharges payable 18,561,605.50 90,239,673.16 Interest payable 134,376.32 Dividend payable Other payable 30,637,671.56 30,820,980.80 Reinsurance amounts payable Provision of insurance contract Securities brokering Securities underwriting 10 The 3rd Quarterly Report 2017(Full Text) Held-for-sale liabilities Current portion of non-current liabilities 18,200,000.00 18,500,000.00 Other current liability Total of current liability 4,037,915,071.33 3,208,339,762.54 Non-current liabilities: Long-term bank loan facilities 4,900,000.00 4,900,000.00 Bond payable Including:preferred stock Perpetual capital securities Long-term payable 208,330,000.00 208,357,733.33 Long-term employee benefits payable Grants payable Provisions Deferred income 9,357,937.15 5,422,895.00 Deferred tax liabilities 348,128,435.30 378,256,646.95 Other non-current liabilities Total non-current liabilities 570,716,372.45 596,937,275.28 Total of liability 4,608,631,443.78 3,805,277,037.82 Equity Share capital 754,010,400.00 754,010,400.00 Other equity instrument Including:preferred stock Perpetual capital securities Reserves 139,540,528.72 139,590,345.09 Less: treasury shares Other comprehensive income 1,966,732,271.08 2,137,419,299.84 Specialized reserve 27,054,040.21 27,546,353.37 Surplus reserves 621,112,807.78 621,112,807.78 General risk reserve Retained earnings 2,769,660,618.32 2,705,667,037.15 Equity contributable to parent company 6,278,110,666.11 6,385,346,243.23 Minority interests 337,466,841.21 360,276,427.29 Total equity 6,615,577,507.32 6,745,622,670.52 Total liabilities and equity 11,224,208,951.10 10,550,899,708.34 Legal Representative: Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 11 The 3rd Quarterly Report 2017(Full Text) 2.Parent Company Balance Sheet In RMB Items At the end of term Beginning of term Current asset: Cash and bank balances 421,340,324.19 293,454,126.93 Financial assets at fair value through profit or loss Derivative financial assets Notes receivable 350,159,893.86 269,527,716.22 Account receivable 1,359,168,529.95 1,424,950,696.58 Advance payments 194,016,464.86 115,383,408.34 Interest receivable Dividend receivable 6,900,000.00 Other receivable 6,607,402.36 68,004,706.24 Inventories 1,678,989,682.85 1,446,652,799.71 Held-for-sale assets Current portion of non-current assets Other current asset 705,331,300.24 600,000,000.00 Total of current assets 4,722,513,598.31 4,217,973,454.02 Non-current assets: Available-for-sale financial assets 2,840,693,076.90 3,020,106,173.02 Held-to-maturity investments Long-term receivable Long term share equity investment 502,919,378.03 502,919,378.03 Property investment Fixed assets 274,298,601.26 315,900,380.66 Construction in progress 103,519,757.21 94,170,909.99 Construction materials Fixed assets pending for disposal Productive biological assets Gas & petrol Intangible assets 172,814,800.34 173,826,293.57 Research and Development Expenditures Goodwill Long-term prepaid expenses 507,773.78 507,773.78 12 The 3rd Quarterly Report 2017(Full Text) Deferred income tax 141,860,065.82 133,581,773.70 Other non-current asset Total of non-current assets 4,036,613,453.34 4,241,012,682.75 Total of assets 8,759,127,051.65 8,458,986,136.77 Current liabilities Short-term bank loan facilities 100,000,000.00 100,000,000.00 Financial liabilities at fair value through profit and loss Derivative financial liabilities Notes payable 5,000,000.00 Account payable 677,239,078.34 486,810,046.42 Advances from customers 1,786,049,944.76 1,476,780,338.78 Payroll payable 41,888,478.82 44,035,408.19 Taxes and surcharges payable 2,876,061.30 64,247,326.24 Interest payable Dividend payable Other payable 14,438,407.90 21,562,998.72 Held-for-sale liabilities Current portion of non-current liabilities Other current liability Total of current liability 2,627,491,971.12 2,193,436,118.35 Non-current liabilities: Long-term bank loan facilities Bond payable Including:preferred stock Perpetual capital securities Long-term payable Long-term employee benefits payable Grants payable Provisions Deferred income 2,547,016.05 Deferred income tax 348,128,435.30 378,256,646.95 Other non-current liabilities Total of Non-current liabilities 350,675,451.35 378,256,646.95 Total liability 2,978,167,422.47 2,571,692,765.30 Equity Share capital 754,010,400.00 754,010,400.00 13 The 3rd Quarterly Report 2017(Full Text) Other equity instrument Including:preferred stock Perpetual capital securities Reserves 138,953,250.09 138,953,250.09 Less: treasury shares Other comprehensive income 1,967,073,624.13 2,137,800,156.80 Specialized reserve 10,820,835.88 10,874,033.85 Surplus reserves 602,356,402.65 602,356,402.65 Retained earnings 2,307,745,116.43 2,243,299,128.08 Total equity 5,780,959,629.18 5,887,293,371.47 Total liabilities and equity 8,759,127,051.65 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 of the Report period In RMB Items Amount in this period Amount in last period I. Revenue 925,501,518.37 874,410,620.01 Including: business revenue 925,501,518.37 874,410,620.01 Interest income Premiums earned Fees and commissions income II. Total operating cost 912,082,177.92 898,062,001.19 Including: Cost of sales 635,724,163.85 637,032,414.17 Interest expense Fees and commissions expense Cash surrender amount Net expenses of claim settlement Net provisions for insurance contract reserves Policy dividend expenses Reinsurance expenses Business taxes and surcharges 2,186,397.87 8,329,543.14 Selling expenses 39,315,517.86 36,730,806.87 Administrative expense 170,150,543.55 173,854,590.33 Financial expenses 4,334,132.88 1,708,950.17 14 The 3rd Quarterly Report 2017(Full Text) Impairment loss on assets 60,371,421.91 40,405,696.51 Add: Gain from fair-value changes(“-“for loss) Investment income(“-“for loss) 17,742,166.35 6,893,602.33 Including: investment income from associates and joint ventures Gain on foreign exchange(“-“for loss) Other income III. Operating profit(“-”for loss) 31,161,506.80 -16,757,778.85 Add:Non-operating income 5,218,527.80 3,051,550.49 Including:Gains from disposal of non-current assets 2,555,740.94 100.00 Less:Non business expenses -1,537,490.37 1,480,307.99 Incl:Loss from disposal of non-current assets 12,090.90 470.20 IV. Profit before tax(“-“for loss) 37,917,524.97 -15,186,536.35 Less: Income tax expense -668,029.80 3,171,756.19 V. Net profit (“-“for net loss) 38,585,554.77 -18,358,292.54 Net profit attributable to the owners of parent company 19,997,776.79 -29,088,489.63 Minority interests 18,587,777.98 10,730,197.09 VI. Other comprehensive income after tax -152,355,402.50 18,461.17 Net of profit of other comprehensive income attributable to -152,071,929.42 7,860.70 owners 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 de bt or net assets 2.Other comprehensive income under the equity method investe e can not be reclassified into profit or loss. (II) Other comprehensive income that will be reclassified into profit -152,071,929.42 7,860.70 or loss. 1.Other comprehensive income under the equity method investe e can be reclassified into profit or loss. 2.Gains and losses from changes in fair value available for sale -151,861,722.43 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 15 The 3rd Quarterly Report 2017(Full Text) 5.Translation differences in currency financial statements -210,206.99 7,860.70 6.Other Net after-tax of other comprehensive income attributable to Minorit -283,473.08 10,600.47 y shareholders’ equity VII. Total comprehensive income -113,769,847.73 -18,339,831.37 Total comprehensive income attributable to the owner of the -132,074,152.63 -29,080,628.93 parent company Total comprehensive income attributable minority 18,304,304.90 10,740,797.56 shareholders VIII. Earnings per share (I)Basic earnings per share 0.027 -0.039 (II)Diluted earnings per share 0.027 -0.039 Legal Representative:Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 4.Income statement of the Parent Company of the Report period In RMB Items Amount in this period Amount in last period I.Revenue 621,115,493.86 562,290,961.03 Less:Business cost 469,564,314.90 469,793,908.17 Business tax and surcharge -1,059,866.18 5,993,416.83 Selling expenses 24,919,849.58 21,188,962.01 Administrative expense 103,779,136.81 105,829,118.79 Financial expenses 2,694,873.23 166,594.21 Impairment loss on assets 56,967,035.94 40,004,378.53 Add: Gain from fair-value changes(“-“for loss) Investment income(“-“for loss) 17,628,312.14 15,582,740.93 Including: investment income from associates and joint ventures Other income II. Operational profit(“-”for loss) -18,121,538.28 -65,102,676.58 Add:Non-operating income 4,448,135.30 1,622,587.10 Including:Gains from disposal of non-current assets 2,555,740.94 Less:Non-operating expenses -1,618,696.05 714,604.52 16 The 3rd Quarterly Report 2017(Full Text) Incl:Loss from disposal of non-current assets IV. Profit before tax(“-“for loss) -12,054,706.93 -64,194,694.00 Less: Income tax expense -3,501,175.09 -11,099,901.06 V. Net profit (“-“for net loss) -8,553,531.84 -53,094,792.94 VI.Net of profit of other comprehensive income -151,861,722.43 (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 o -151,861,722.43 r 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 fi -151,861,722.43 nancial 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 -160,415,254.27 -53,094,792.94 VII. Earnings per share: (I)Basic earnings per share -0.011 -0.070 (II)Diluted earnings per share -0.011 -0.070 Legal Representative: Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 5. Consolidated Income statement between the beginning of the year and end of the report period In RMB Items Amount in this period Amount in last period I. Revenue 2,589,226,220.63 2,241,834,391.89 Including:Operating income 2,589,226,220.63 2,241,834,391.89 Interest income 17 The 3rd Quarterly Report 2017(Full Text) Insurance gained Commission charge and commission income II. Total operating cost 2,602,813,222.01 2,314,529,335.97 Including:Operating cost 1,828,109,215.33 1,487,970,320.21 Interest expense Commission chare and commission expense Insurance discharge payment Net claim amount paid Insurance policy dividend paid Insurance policy dividend paid Reinsurance expenses Business tax and surcharge 20,922,948.45 16,752,794.01 Selling expenses 121,189,533.71 112,598,400.85 Administrative expense 524,562,321.36 528,961,508.88 Financial expenses 12,279,377.17 2,220,979.34 Asset impairment loss 95,749,825.99 166,025,332.68 Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 106,730,672.88 21,938,936.95 Incl: investment gains from affiliates Gains from currency exchange(“-”for loss) Other income III. Operational profit(“-”for loss 93,143,671.50 -50,756,007.13 Add:Non-business income 9,773,377.68 9,896,312.51 Incl:Gains from disposal of non-current assets 2,752,651.04 17,399.04 Less:Non business expenses -1,257,699.24 3,438,002.64 Incl:Loss from disposal of non-current assets 28,447.58 181,669.06 IV.Total profit(“-”for loss) 104,174,748.42 -44,297,697.26 Less:Income tax expenses 5,860,337.77 337,824.85 V. Net profit(“-”for net loss 98,314,410.65 -44,635,522.11 Net profit attributable to the owners of parent company 63,993,581.17 -60,340,727.82 Minority shareholders’ equity 34,320,829.48 15,705,205.71 VI. Net after-tax of Other comprehensive income -170,633,756.07 899,931.08 Net after-tax -170,687,028.76 383,187.06 of other comprehensive income attributable to owners of the pa 18 The 3rd Quarterly Report 2017(Full Text) rent 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 de bt or net assets 2.Other comprehensive income under the equity method investe e can not be reclassified into profit or loss. (II) Other comprehensive income that will be reclassified into profit -170,687,028.76 383,187.06 or loss. 1.Other comprehensive income under the equity method investe e can be reclassified into profit or loss. 2.Gains and losses from changes in fair value available for sale -170,726,532.67 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 39,503.91 383,187.06 6.Other Net after-tax of other comprehensive income attributable to Minorit 53,272.69 516,744.02 y shareholders’ equity VII. Total comprehensive income -72,319,345.42 -43,735,591.03 Total comprehensive income attributable to the owner of the -106,693,447.59 -59,957,540.76 parent company Total comprehensive income attributable minority 34,374,102.17 16,221,949.73 shareholders VIII. Earnings per share (I)Basic earnings per share 0.085 -0.080 (II)Diluted earnings per share 0.085 -0.080 Legal Representative:Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 6.Profit Statement of the Parent Between the Beginning of the Year and End of the Report Period In RMB Items Amount in this period Amount in last period 19 The 3rd Quarterly Report 2017(Full Text) I.Revenue 1,737,260,574.47 1,435,991,350.39 Less:Business cost 1,318,546,461.50 1,015,911,250.13 Business tax and surcharge 7,296,536.20 10,794,084.24 Selling expenses 74,276,730.74 69,052,768.19 Administrative expense 353,927,864.76 335,119,956.57 Financial expenses 8,841,881.84 -1,276,257.31 Asset impairment loss 84,610,943.77 152,020,358.27 Add:Gains from change of fir value (“-”for loss) Investment gain(“-”for loss) 158,941,964.67 94,396,560.64 Incl: investment gains from affiliates Other income II. Operational profit 48,702,120.33 -51,234,249.06 Add:Non-business income 5,860,749.25 1,640,400.14 Incl:Gains from disposal of non-current assets 2,555,740.94 17,299.04 Less:Non business expenses -1,604,826.65 1,470,302.28 Incl:Loss from disposal of non-current assets 1,824.00 10,000.00 III.Total profit 56,167,696.23 -51,064,151.20 Less:Income tax expenses -8,278,292.12 -20,533,921.33 IV. Net profit 64,445,988.35 -30,530,229.87 V. Net after-tax of Other comprehensive income -170,726,532.67 ( 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 de bt or net assets 2.Other comprehensive income under the equity method investe e can not be reclassified into profit or loss. (II) Other comprehensive income that will be reclassified into profit -170,726,532.67 or loss. 1.Other comprehensive income under the equity method investe e can be reclassified into profit or loss. 2.Gains and losses from changes in fair value available for sale -170,726,532.67 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 20 The 3rd Quarterly Report 2017(Full Text) 5.Translation differences in currency financial statements 6.Other VI.Total comprehensive income -106,280,544.32 -30,530,229.87 VII.Earnings per share (I)Basic earnings per share 0.085 -0.040 (II)Diluted earnings per share 0.085 -0.040 Legal Representative:Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 7. Consolidated Cash Flow Statement Between the Beginning of the Year and End of the Report Period 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 2,568,093,696.92 2,205,347,661.82 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 14,404,590.75 6,238,100.28 Other cash received from business operation 17,353,241.43 20,878,728.24 Sub-total of cash inflow 2,599,851,529.10 2,232,464,490.34 Cash paid for purchasing of merchandise and services 1,552,659,985.01 1,092,177,371.39 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 21 The 3rd Quarterly Report 2017(Full Text) Cash paid to staffs or paid for staffs 516,677,860.36 503,817,181.35 Taxes paid 204,017,110.68 144,485,145.93 Other cash paid for business activities 126,571,791.67 130,924,380.97 Sub-total of cash outflow from business activities 2,399,926,747.72 1,871,404,079.64 Cash flow generated by business operation, net 199,924,781.38 361,060,410.70 II.Cash flow generated by investing Cash received from investment retrieving 87,259,813.79 Cash received as investment gains 99,830,672.88 21,938,936.95 Net cash retrieved from disposal of fixed assets, intangible assets, and other 16,449,715.72 17,000.00 long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 2,862,767,338.00 988,800,000.00 Sub-total of cash inflow due to investment activities 3,066,307,540.39 1,010,755,936.95 Cash paid for construction of fixed assets, intangible assets and other long-term -19,054,636.97 63,172,558.56 assets Cash paid as investment 100,243,111.17 39,442,786.76 Net increase of loan against pledge Net cash received from subsidiaries and other operational units Other cash paid for investment activities 3,045,950,000.00 1,368,700,000.00 Sub-total of cash outflow due to investment activities 3,127,138,474.20 1,471,315,345.32 Net cash flow generated by investment -60,830,933.81 -460,559,408.37 III.Cash flow generated by financing Cash received as investment 706,350.00 Incl: Cash received as investment from minor shareholders Cash received as loans 114,500,000.00 121,402,502.11 Cash received from bond placing Other financing –related ash received Sub-total of cash inflow from financing activities 114,500,000.00 122,108,852.11 Cash to repay debts 90,300,000.00 134,036,536.05 Cash paid as dividend, profit, or interests 46,822,775.75 48,316,260.75 Incl: Dividend and profit paid by subsidiaries to minor shareholders Other cash paid for financing activities 20,928,500.18 Sub-total of cash outflow due to financing activities 158,051,275.93 182,352,796.80 Net cash flow generated by financing -43,551,275.93 -60,243,944.69 IV. Influence of exchange rate alternation on cash and cash equivalents -5,816,792.67 4,741,176.01 22 The 3rd Quarterly Report 2017(Full Text) V.Net increase of cash and cash equivalents 89,725,778.97 -155,001,766.35 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 984,763,338.31 596,595,029.89 Legal Representative:Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 8. Cash Flow Statement of the Parent Between the Beginning of the Year and End of the Report Period 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 1,571,897,429.24 1,323,738,157.07 Tax returned 1,250,418.38 359,071.25 Other cash received from business operation 7,165,542.91 10,169,189.04 Sub-total of cash inflow 1,580,313,390.53 1,334,266,417.36 Cash paid for purchasing of merchandise and services 1,003,979,797.77 633,403,646.46 Cash paid to staffs or paid for staffs 355,704,642.77 350,255,025.51 Taxes paid 104,637,532.52 49,736,744.31 Other cash paid for business activities 44,601,771.76 41,745,681.57 Sub-total of cash outflow from business activities 1,508,923,744.82 1,075,141,097.85 Cash flow generated by business operation, net 71,389,645.71 259,125,319.51 II.Cash flow generated by investing Cash received from investment retrieving 78,558,351.80 Cash received as investment gains 152,041,964.67 94,396,560.64 Net cash retrieved from disposal of fixed assets, intangible assets, 16,038,461.54 16,900.00 and other long-term assets Net cash received from disposal of subsidiaries or other operational units Other investment-related cash received 1,815,992,395.89 430,000,000.00 Sub-total of cash inflow due to investment activities 2,062,631,173.90 524,413,460.64 Cash paid for construction of fixed assets, intangible assets 42,300,701.68 46,790,472.41 and other long-term assets Cash paid as investment 100,000,000.00 39,442,786.76 Net cash received from subsidiaries and other operational units Other cash paid for investment activities 1,855,000,000.00 820,000,000.00 Sub-total of cash outflow due to investment activities 1,997,300,701.68 906,233,259.17 23 The 3rd Quarterly Report 2017(Full Text) Net cash flow generated by investment 65,330,472.22 -381,819,798.53 III.Cash flow generated by financing Cash received as investment Cash received as loans 19,402,502.11 Cash received from bond placing Other financing –related ash received Sub-total of cash inflow from financing activities 19,402,502.11 Cash to repay debts 19,486,536.05 Cash paid as dividend, profit, or interests 2,549,722.22 2,610,507.34 Other cash paid for financing activities Sub-total of cash outflow due to financing activities 2,549,722.22 22,097,043.39 Net cash flow generated by financing -2,549,722.22 -2,694,541.28 IV. Influence of exchange rate alternation on cash and cash -6,284,198.45 3,130,773.23 equivalents V.Net increase of cash and cash equivalents 127,886,197.26 -122,258,247.07 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 421,340,324.19 265,657,955.72 Legal Representative:Zheng Bin Person in charge of accounting:Pu Yangshuo Accounting Dept Leader: Zhao Jiamao II. Auditor‘s report Whether the Q3 report is audited The Q3 Report is not audited. Hangzhou Steam Turbine Co., Ltd. Chairman of the Board: Zheng Bin October 25, 2017 24 The 3rd Quarterly Report 2017(Full Text) 25