Stock Code: 200771 Stock ID: Hangqilun B Announcement No. 2018-15
Hangzhou Steam Turbine Co., Ltd.
Auditors’ Report 2017
Auditors’ Report
Tian Jian ShenNo.〔2018〕1268
To the entire shareholders of Hangzhou Steam Turbine Co., Ltd.
I. Opinion
We have audited the financial statements of Hangzhou Steam Turbine Co., Ltd.. (hereinafter referred to as "the Company"), which comprise the balance sheet as at December 31, 2017, and the income statement, the statement of cash flows and the statement of changes in owners' equity for the year then ended and notes to the financial statements.
In our opinion, the attached financial statements are prepared, in all material respects, in accordance with Accounting Standards for Business Enterprises and present fairly the financial position of the Company as at December 31, 2017 and its operating results and cash flows for the year then ended.
II. Basis for Our Opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants in China. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. According to the Code of Ethics for Chinese CPA, we are independent of the Company in accordance with the Code of Ethics for Chinese CPA and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III. KeyAudit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
(I) Bad debt provision for accounts receivable
1. Description of the matter
See Note 3 (X) and Note 5 (I) 3 of the financial report. As of December 31, 2017, the book balance of accounts receivable in the consolidated financial statements of Hangzhou Steam Turbine Co., Ltd. was RMB 2,725,387,736.93 and the balance of bad debt provisions was RMB 1,030,170,288.47. The management conducts the individual impairment test to the accounts receivable with a single significant amount and the accounts receivable with not significant amount but with objective-evidence demonstrated impairment, and the provision for bad debt is made according to the difference of the present value of the future cash flow lower than its book value; In addition to the receivables that have been separately accrued for bad debt provision, the accrued provision for bad debts shall, based on the actual loss rate of the same or similar receivables with similar credit risk characteristics in previous years, be determined by combining with the consideration of the current situation. The calculation of the recoverable amount of accounts receivable requires management's judgment and estimation. If there are bad debts caused by the accounts receivable that cannot be recovered on time or are unable to be recovered, then there will be a great impact on the financial report. Therefore, we make the bad debt provision for accounts receivable as a key audit matter.
2. Countermeasures in the audit
(1) Evaluate and test the design and operation effectiveness of the internal control related to the credit policy and accounts receivable management of Hangzhou Steam Turbine Co.,Ltd;
(2) Analyze the reasonableness of the accounting estimates for bad debts provision of accounts receivable of Hangzhou Steam Turbine Co., Ltd, including the judging of significant amount and the judgment of separate provision for bad debts;
(3) Through the analysis of the aging of accounts receivable of Hangzhou Steam Turbine Co., Ltd and the creditworthiness of customers and by the implementation of confirmation procedure for accounts receivable and the examination of the information of collection after the period, to assess the reasonableness of the bad debt provision for accounts receivable;
(4) Analyze and calculate the ratio of bad debt provision amount and the balance of accounts receivable on the balance sheet date of Hangzhou Steam Turbine Co., Ltd, compare the provision amount for bad debt and the actual occurrences in the previous period, and analyze whether the provision for bad debts of accounts receivable is sufficient;
(5) Acquire the statement of bad debts provision of Hangzhou Steam Turbine Co., Ltd and check whether the accrual method is implemented according to the bad debt policy and recalculate whether the amount of the provision for bad debt is accurate.
(II) Inventory falling prices
1. Description of the matter
See Note 3 (XI) and Note 5 (I) 7 to the financial report. As of December 31, 2017, the book value of inventories in the consolidated financial statements was RMB 2,092,575,691.92, and the provision for the inventory falling prices after deducting the already-accrued was RMB 113,473,653.11. The provision for inventory falling prices is determined based on the net realizable value of inventories, and for the suspended or postponed project requiring the possibility of termination of estimates, the recovered compensation for the terminated project is determined as the basis of net realizable value. The significant accounting estimates and judgments on the afore-said net realizable value will affect the book value of inventories. In view of that the determination of the book value of inventories at the end of the year requires the management to identify the items and objective evidence that have been impaired and assess the expected future cash flows available and determine its present value-which involves the significant accounting estimates and judgments by the management, therefore, we make the provision for inventory falling prices as a key audit matter.
2. Countermeasures in the audit
(1) Understand the progress of each project, and understand product characteristics, production and processing, warehousing, sales and delivery;
(2) Evaluate and test the effectiveness of the design and operation of internal controls related to the inventory management of Hangzhou Steam Turbine Co., Ltd.;
(3) Analyze the reasonableness of the accounting estimates of provision for the inventory falling prices of Hangzhou Steam Turbine Co.,Ltd, including the judgments of the depreciation items and the determination of the net realizable value;
(4) Perform the inventory overseeing and inventory age analysis for the inventory at the end of the period, understand the progress and status of the project, and evaluate the reasonableness of the provision for inventory falling prices by taking into account the collection status of the project after the period;
(5) Acquire the list and basis for the provision for inventory falling price for the item of the company of each year, and review and recalculate the provision for inventory falling prices according to the accounting policy for the provision for inventory falling prices.
(III) Recognition of income
1. Description of the matter
See Note 3 (XXI,), Note 5 (II) 1. The main business of Hangzhou Steam Turbine Co., Ltd is the production and sales of industrial steam turbines and other products. The operating income for 2017 was RMB 3,447,142,669.49. The identification for the transfer of the main risk and reward of the commodity ownership shall be at the time when the income from domestic sales products obtains the signing receipt confirmed by the purchaser and when the income of the exported products obtains the customs declaration or bill of lading. As the income is one of the key performance indicators of the Hangzhou Steam Turbine Co.,Ltd, thus there is inherent risk that the management will manipulate the timing of income recognition in order to achieve specific goals or expectations. Therefore, we recognize the income recognition of the Huangzhou Steam Turbine Co., Ltd as a key audit matter.
2. Countermeasures in the audit
Our audit procedures for the above key audit matter related to the income recognition mainly include:
(1) Evaluate and test the effectiveness of the design and operation of internal control related to income recognition of Hangzhou Steam Turbine Co.,Ltd;
(2) Analyze the income and gross profit information according to the product type and sales quantity, and judge whether there is any abnormal fluctuation in the income amount in the current period;
(3) Select samples from the accounting records and shipment records of sales income, cross-check the sales-related contracts, invoices, and receipts, customs declarations, and bills of lading confirmed by the purchaser, and pay particular attention to whether the samples before and after the balance sheet date are included in the
correct accounting period;
||
|-|
|(4) The income certification process is implemented to evaluate the reasonableness of the timing of revenue|
|recognition.|

IV. Other information
The management of the Company is responsible for the other information. The other information comprises information of the Company's annual report in 2017, but excludes the financial statements and our auditor's report. Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor's report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard
V. Responsibilities of Management and Those Charged with Governance for the Financial Statements The Company's management is responsible for preparing the financial statements in accordance with the requirements of Accounting Standards for Business Enterprises to achieve a fair presentation, and for designing, implementing and maintaining internal control that is necessary to ensure that the financial statements are free from material misstatements, whether due to frauds or errors.
In preparing the financial statements, management of the Company is responsible for assessing the Company's ability to continue as a going concern, disclosing matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process. VI. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the audit standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management of the Company.
(4) Conclude on the appropriateness of using the going concern assumption by the management of the Company, and conclude, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express an opinion on the financial statements and bear all liability for the opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit matters, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
II. The Financial Statements
All figures in the Notes to the Financial Statements are in RMB.
1. Consolidated Balance Sheet
Prepared by: Hangzhou Steam Turbine Co., Ltd
December 31,2017
In RMB
||||
|-|-|-|
|Items|At the end of term|Beginning of term|
|Current asset：|||
|Monetary fund|1,222,677,495.94|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|715,410,887.68|479,716,321.62|
|Account receivable|1,695,217,448.46|1,870,173,348.32|
|Prepayments|446,166,710.77|202,184,858.83|
|Insurance receivable|||
|Reinsurance receivable|||
|Provisions of Reinsurance contracts receivable|||
|Interest receivable|||
|Dividend receivable|6,900,000.00||
|Other account receivable|16,905,005.57|31,024,707.72|
|Repurchasing of financial assets|||
|Inventories|2,092,575,691.92|1,901,544,358.26|
|Assets held for sales|||
|Non-current asset due in 1 year|||
|Other current asset|904,426,265.79|863,018,479.59|
|Total of current assets|7,100,279,506.13|6,242,699,633.68|
|Non-current assets：|||
|Loans and payment on other’s behalf disbursed|||

||||
|-|-|-|
|Disposable financial asset|2,417,780,984.08|3,060,865,862.60|
|Expired investment in possess|||
|Long-term receivable|||
|Long term share equity investment|5,800,000.00||
|Property investment|||
|Fixed assets|566,710,937.10|615,922,109.91|
|Construction in progress|255,921,660.09|153,743,889.41|
|Engineering material|||
|Fixed asset disposal|||
|Production physical assets|||
|Gas & petrol|||
|Intangible assets|285,670,638.55|297,405,434.08|
|R & D petrol|||
|Goodwill|||
|Long-germ expenses to be amortized|253,886.90|1,430,968.81|
|Deferred income tax asset|198,179,569.53|178,831,809.85|
|Other non-current asset|||
|Total of non-current assets|3,730,317,676.25|4,308,200,074.66|
|Total of assets|10,830,597,182.38|10,550,899,708.34|
|Current liabilities|||
|Short-term loans|115,500,000.00|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|215,409,958.92|143,007,715.10|
|Account payable|882,715,465.65|853,452,589.51|
|Advance payment|2,419,751,405.08|1,827,959,793.62|
|Selling of repurchased financial assets|||
|Fees and commissions receivable|||
|Employees’ wage payable|79,525,773.69|71,224,634.03|
|Tax payable|34,920,073.37|90,239,673.16|
|Interest payable|268,860.77|134,376.32|
|Dividend payable|||
|Other account payable|27,859,617.33|30,820,980.80|
|Reinsurance fee payable|||
|Insurance contract provision|||
|Entrusted trading of securities|||
|Entrusted selling of securities|||
|Liabilities held for sales|||
|Non-current liability due in 1 year|4,900,000.00|18,500,000.00|
|Other current liability|||
|Total of current liability|3,780,851,154.81|3,208,339,762.54|
|Non-current liabilities：|||

||||
|-|-|-|
|Long-term loan|100,000,000.00|4,900,000.00|
|Bond payable|||
|Including：preferred stock|||
|Sustainable debt|||
|Long-term payable|209,633,466.66|208,357,733.33|
|Long-term payable employees’s remuneration|||
|Special payable|237,658,831.07||
|Expected liabilities|||
|Deferred income|4,063,615.00|5,422,895.00|
|Deferred income tax liability|278,217,667.94|378,256,646.95|
|Other non-current liabilities|||
|Total non-current liabilities|829,573,580.67|596,937,275.28|
|Total of liability|4,610,424,735.48|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|139,545,089.02|139,590,345.09|
|Less：Shares in stock|||
|Other comprehensive income|1,570,358,510.09|2,137,419,299.84|
|Special reserves|25,369,714.61|27,546,353.37|
|Surplus reserves|621,112,807.78|621,112,807.78|
|Common risk provision|||
|Undistributed profit|2,774,420,288.05|2,705,667,037.15|
|Total of owner’s equity belong to the parent company|5,884,816,809.55|6,385,346,243.23|
|Minority shareholders’ equity|335,355,637.35|360,276,427.29|
|Total of owners’ equity|6,220,172,446.90|6,745,622,670.52|
|Total of liabilities and owners’ equity|10,830,597,182.38|10,550,899,708.34|

 Legal Representative: Zheng Bin Person in charge ofaccounting：Zhao Jiamao 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|654,407,180.33|293,454,126.93|
|Financial assets measured at fair value with variations accounted into|||
|current income account|||
|Derivative financial assets|||
|Bill receivable|357,644,500.75|269,527,716.22|
|Account receivable|1,195,950,107.32|1,424,950,696.58|
|Prepayments|163,701,036.86|115,383,408.34|
|Interest receivable|||
|Dividend receivable|6,900,000.00||
|Other account receivable|4,311,538.86|68,004,706.24|
|Inventories|1,598,522,597.27|1,446,652,799.71|
|Assets held for sales|||
|Non-current asset due in 1 year|||
|Other current asset|737,474,571.12|600,000,000.00|
|Total of current assets|4,718,911,532.51|4,217,973,454.02|
|Non-current assets：|||
|Disposable financial asset|2,377,021,294.50|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|265,423,321.11|315,900,380.66|
|Construction in progress|151,569,540.89|94,170,909.99|
|Engineering material|||
|Fixed asset disposal|||
|Production physical assets|||
|Gas & petrol|||
|Intangible assets|169,780,320.65|173,826,293.57|
|R & D petrol|||
|Goodwill|||
|Long-germ expenses to be amortized|253,886.90|507,773.78|
|Deferred income tax asset|146,802,178.11|133,581,773.70|
|Other non-current asset|||
|Total of non-current assets|3,613,769,920.19|4,241,012,682.75|
|Total of assets|8,332,681,452.70|8,458,986,136.77|
|Current liabilities|||
|Short-term loans||100,000,000.00|

||||
|-|-|-|
|Financial liabilities measured at fair value with variations accounted into|||
|current income account|||
|Derivative financial liabilities|||
|Bill payable|5,400,000.00||
|Account payable|457,304,271.86|486,810,046.42|
|Advance payment|1,817,869,660.07|1,476,780,338.78|
|Employees’ wage payable|42,770,536.86|44,035,408.19|
|Tax payable|3,918,864.69|64,247,326.24|
|Interest payable|112,597.22||
|Dividend payable|||
|Other account payable|15,515,940.17|21,562,998.72|
|Classified as held for sale debt|||
|Non-current liability due in 1 year|||
|Other current liability|||
|Total of current liability|2,342,891,870.87|2,193,436,118.35|
|Non-current liabilities：|||
|Long-term loan|100,000,000.00||
|Bond payable|||
|Including：preferred stock|||
|Sustainable debt|||
|Long-term payable|||
|Long-term payable to employees|||
|Special payable|237,067,491.46||
|Expected liabilities|||
|Deferred income|||
|Deferred income tax liability|278,217,667.94|378,256,646.95|
|Other non-current liabilities|||
|Total of Non-current liabilities|615,285,159.40|378,256,646.95|
|Total of liability|2,958,177,030.27|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|1,570,912,609.09|2,137,800,156.80|
|Special reserves|9,629,800.19|10,874,033.85|
|Surplus reserves|602,356,402.65|602,356,402.65|
|Undistributed profit|2,298,641,960.41|2,243,299,128.08|
|Total of owners’ equity|5,374,504,422.43|5,887,293,371.47|
|Total of liabilities and owners’ equity|8,332,681,452.70|8,458,986,136.77|

Legal Representative: Zheng Bin Person in charge ofaccounting：Zhao Jiamao Accounting Dept Leader: Zhao Jiamao
3.Consolidated Income statement
In RMB
||||
|-|-|-|
|||Same period of the previous|
|Items|Report period||
|||year|
|I. Income from the key business|3,447,142,669.49|3,235,303,379.24|
|Incl：Business income|3,447,142,669.49|3,235,303,379.24|
|Interest income|||
|Insurance fee earned|||
|Fee and commission received|||
|II. Total business cost|3,454,428,905.88|3,211,913,936.08|
|Incl：Business cost|2,450,587,325.79|2,204,578,781.07|
|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|31,221,773.02|32,563,426.16|
|Sales expense|169,520,147.67|164,610,410.65|
|Administrative expense|644,178,931.78|623,684,537.46|
|Financial expenses|24,287,127.82|-14,837,853.07|
|Asset impairment loss|134,633,599.80|201,314,633.81|
|Add：Gains from change of fir value （“-”for loss）|||
|Investment gain（“-”for loss）|120,565,851.26|32,136,337.57|
|Incl: investment gains from affiliates|||
|Gains from currency exchange（“-”for loss）|||
|Assets disposal income|2,740,865.13|387,292.53|
|Other income|10,195,671.25||
|III. Operational profit（“-”for loss）|126,216,151.25|55,913,073.26|
|Add ：Non-operational income|8,075,659.19|25,780,924.16|
|Less：Non business expenses|1,635,679.94|4,274,955.35|
|IV.Total profit(“-”for loss)|132,656,130.50|77,419,042.07|
|Less：Income tax expenses|10,835,754.48|10,507,672.15|
|V. Net profit|121,820,376.02|66,911,369.92|
|(1) Categorized by going concern|121,820,376.02|66,911,369.92|
|(2) Termination of operating net profit|||
|Net profit attributable to the owners of parent company|68,753,250.90|31,955,445.73|
|Minority shareholders’ equity|53,067,125.12|34,955,924.19|
|VI. Other comprehensive income|-567,294,413.99|2,138,908,422.36|
|Net of profit of other comprehensive income attributable to owners of the|||
||-567,060,789.75|2,138,272,051.84|
|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 a|||
|ssets|||

||||
|-|-|-|
|2.Other comprehensive income under the equity method investee can not|||
|be reclassified into profit or loss.|||
|（II）|||
||-567,060,789.75|2,138,272,051.84|
|Other comprehensive income that will be reclassified into profit or loss.|||
|1.Other comprehensive income under the equity method investee can be r|||
|eclassified into profit or loss.|||
|2.Gains and losses from changes in fair value available for sale financial|||
||-566,887,547.71|2,137,800,156.80|
|assets|||
|3.Held-to-maturity investments reclassified to gains and losses of availabl|||
|e for sale financial assets|||
|4.The effective portion of cash flow hedges and losses|||
|5.Translation differences in currency financial statements|-173,242.04|471,895.04|
|6.Other|||
|Net of profit of other comprehensive income attributable to Minority|||
||-233,624.24|636,370.52|
|shareholders’ equity|||
|VII. Total comprehensive income|-445,474,037.97|2,205,819,792.28|
|Total comprehensive income attributable to the owner of the parent|||
||-498,307,538.85|2,170,227,497.57|
|company|||
|Total comprehensive income attributable minority shareholders|52,833,500.88|35,592,294.71|
|VIII. Earnings per share|||
|（I）Basic earnings per share|0.09|0.04|
|(II)Diluted earnings per share|0.09|0.04|

 Legal Representative: Zheng Bin Person in charge ofaccounting：Zhao Jiamao Accounting Dept Leader: Zhao Jiamao
4. Income statement of the Parent Company
In RMB
||||
|-|-|-|
|||Same period of the previous|
|Items|Report period||
|||year|
|I. Income from the key business|2,196,716,474.74|2,143,474,150.58|
|Less：Business cost|1,694,306,219.84|1,556,832,738.33|
|Business tax and surcharge|10,973,986.81|19,958,750.71|
|Sales expense|105,694,953.84|104,810,547.64|
|Administrative expense|409,162,136.78|387,271,046.69|
|Financial expenses|13,375,506.45|-12,303,571.04|
|Asset impairment loss|97,887,620.88|171,652,812.43|
|Add：Gains from change of fir value （“-”for loss）|||
|Investment gain（“-”for loss）|167,830,820.86|102,446,490.02|
|Incl: investment gains from affiliates|||
|Assets disposal income|2,555,740.94|353,762.44|
|Other income|3,890,400.53||
|II. Operational profit（“-”for loss）|39,593,012.47|18,052,078.28|
|Add ：Non-operational income|4,030,380.36|13,150,650.34|
|Less：Non business expenses|1,307,587.69|1,957,148.79|
|III.Total profit(“-”for loss)|42,315,805.14|29,245,579.83|
|Less：Income tax expenses|-13,027,027.19|-12,829,459.15|
|IV. Net profit|55,342,832.33|42,075,038.98|
|(1) Categorized by going concern|55,342,832.33|42,075,038.98|
|(2) Termination of operating net profit|||
|V.Net of profit of other comprehensive income|-566,887,547.71|2,137,800,156.80|
|（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 n|||
|ot be reclassified into profit or loss.|||
|（ II ）|||
||-566,887,547.71|2,137,800,156.80|
|Other comprehensive income that will be reclassified into profit or loss.|||
|1.Other comprehensive income under the equity method investee can b|||
|e reclassified into profit or loss.|||
|2.Gains and losses from changes in fair value available for sale financia|||
||-566,887,547.71|2,137,800,156.80|
|l assets|||
|3.Held-to-maturity investments reclassified to gains and losses of availa|||
|ble 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|-511,544,715.38|2,179,875,195.78|
|VII. Earnings per share：|||

||||
|-|-|-|
|（I）Basic earnings per share|0.07|0.06|
|(II)Diluted earnings per share|0.07|0.06|

 Legal Representative: Zheng Bin Person in charge ofaccounting：Zhao Jiamao Accounting Dept Leader: Zhao Jiamao
5. Consolidated Cash flow statement
In RMB
||||
|-|-|-|
|||Same period of the previous|
|Items|Report period||
|||year|
|I.Cash flows from operating activities|||
|Cash received from sales of goods or rending of services|3,494,692,256.02|3,117,828,975.19|
|Net increase of customer deposits and capital kept for brother company|||
|Net increase of loans from central bank|||
|Net increase of inter-bank loans from other financial bodies|||
|Cash received against original insurance contract|||
|Net cash received from reinsurance business|||
|Net increase of client deposit and investment|||
|Net increase of trade financial asset disposal|||
|Cash received as interest, processing fee and commission|||
|Net increase of inter-bank fund received|||
|Net increase of repurchasing business|||
|Tax returned|13,672,821.64|9,575,551.67|
|Other cash received from business operation|136,993,210.01|36,339,734.29|
|Sub-total of cash inflow|3,645,358,287.67|3,163,744,261.15|
|Cash paid for purchasing of merchandise and services|2,188,106,830.33|1,592,178,163.15|
|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|675,225,336.13|660,847,474.75|
|Taxes paid|237,999,779.64|186,151,888.55|
|Other cash paid for business activities|338,723,549.80|218,407,306.28|
|Sub-total of cash outflow from business activities|3,440,055,495.90|2,657,584,832.73|
|Cash flow generated by business operation, net|205,302,791.77|506,159,428.42|
|II.Cash flow generated by investing|||
|Cash received from investment retrieving|103,680,000.00|3,045,673.93|
|Cash received as investment gains|84,616,250.54|32,136,337.57|
|Net cash retrieved from disposal of fixed assets, intangible assets, and|||
||16,494,301.22|1,047,802.29|
|other long-term assets|||
|Net cash received from disposal of subsidiaries or other operational units|||
|Other investment-related cash received|4,135,806,169.07|1,765,932,662.00|

||||
|-|-|-|
|Sub-total of cash inflow due to investment activities|4,340,596,720.83|1,802,162,475.79|
|Cash paid for construction of fixed assets, intangible assets and other|||
||149,836,385.82|83,386,401.14|
|long-term assets|||
|Cash paid as investment|102,400,000.00|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|3,931,296,261.75|2,193,700,000.00|
|Sub-total of cash outflow due to investment activities|4,183,532,647.57|2,316,529,187.90|
|Net cash flow generated by investment|157,064,073.26|-514,366,712.11|
|III.Cash flow generated by financing|||
|Cash received as investment|||
|Incl: Cash received as investment from minor shareholders|||
|Cash received as loans|232,500,000.00|202,000,000.00|
|Cash received from bond placing|||
|Other financing –related ash received||208,000,000.00|
|Sub-total of cash inflow from financing activities|232,500,000.00|410,000,000.00|
|Cash to repay debts|208,500,000.00|214,650,000.00|
|Cash paid as dividend, profit, or interests|49,845,493.76|53,367,075.65|
|Incl: Dividend and profit paid by subsidiaries to minor shareholders|41,161,592.50|44,221,187.50|
|Other cash paid for financing activities|23,054,431.92||
|Sub-total of cash outflow due to financing activities|281,399,925.68|268,017,075.65|
|Net cash flow generated by financing|-48,899,925.68|141,982,924.35|
|IV. Influence of exchange rate alternation on cash and cash equivalents|-7,211,089.37|8,236,681.66|
|V.Net increase of cash and cash equivalents|306,255,849.98|142,012,322.32|
|Add: balance of cash and cash equivalents at the beginning of term|831,236,984.85|689,224,662.53|
|VI ..Balance of cash and cash equivalents at the end of term|1,137,492,834.83|831,236,984.85|

 Legal Representative: Zheng Bin Person in charge ofaccounting：Zhao Jiamao Accounting Dept Leader: Zhao Jiamao
6. Cash Flow Statement of the Parent Company
In RMB
||||
|-|-|-|
|Items|Amount in this period|Amount in last period|
|I.Cash flows from operating activities|||
|Cash received from sales of goods or rending of services|2,123,033,690.29|1,692,166,949.58|
|Tax returned|1,250,418.38|2,971,055.45|
|Other cash received from business operation|20,481,813.79|14,110,015.18|
|Sub-total of cash inflow|2,144,765,922.46|1,709,248,020.21|
|Cash paid for purchasing of merchandise and services|1,199,591,051.02|757,987,965.11|
|Cash paid to staffs or paid for staffs|457,506,060.50|450,219,508.05|
|Taxes paid|106,962,139.60|62,701,978.23|
|Other cash paid for business activities|123,920,412.74|112,929,726.69|
|Sub-total of cash outflow from business activities|1,887,979,663.86|1,383,839,178.08|
|Cash flow generated by business operation, net|256,786,258.60|325,408,842.13|
|II.Cash flow generated by investing|||
|Cash received from investment retrieving|103,680,000.00||
|Cash received as investment gains|135,809,172.66|102,446,490.02|
|Net cash retrieved from disposal of fixed assets, intangible assets, and other|||
||16,038,777.07|47,893,364.87|
|long-term assets|||
|Net cash received from disposal of subsidiaries or other operational units|||
|Other investment-related cash received|2,713,003,714.00|980,000,000.00|
|Sub-total of cash inflow due to investment activities|2,968,531,663.73|1,130,339,854.89|
|Cash paid for construction of fixed assets, intangible assets and other|||
||70,439,655.26|53,123,444.54|
|long-term assets|||
|Cash paid as investment|102,400,000.00|39,442,786.76|
|Net cash received from subsidiaries and other operational units|||
|Other cash paid for investment activities|2,676,530,440.00|1,470,000,000.00|
|Sub-total of cash outflow due to investment activities|2,849,370,095.26|1,562,566,231.30|
|Net cash flow generated by investment|119,161,568.47|-432,226,376.41|
|III.Cash flow generated by financing|||
|Cash received as investment|||
|Cash received as loans|100,000,000.00|100,000,000.00|
|Cash received from bond placing|||
|Other financing –related ash received|||
|Sub-total of cash inflow from financing activities|100,000,000.00|100,000,000.00|
|Cash to repay debts|100,000,000.00|100,000,000.00|
|Cash paid as dividend, profit, or interests|3,406,763.88|3,448,007.34|
|Other cash paid for financing activities|||
|Sub-total of cash outflow due to financing activities|103,406,763.88|103,448,007.34|
|Net cash flow generated by financing|-3,406,763.88|-3,448,007.34|
|IV. Influence of exchange rate alternation on cash and cash equivalents|-5,925,130.42|6,279,861.59|
|V.Net increase of cash and cash equivalents|366,615,932.77|-103,985,680.03|
|Add: balance of cash and cash equivalents at the beginning of term|283,930,522.76|387,916,202.79|
|VI ..Balance of cash and cash equivalents at the end of term|650,546,455.53|283,930,522.76|

Legal Representative: Zheng Bin Person in charge ofaccounting：Zhao Jiamao Accounting Dept Leader: Zhao Jiamao
7. Consolidated Statement on Change inOwners’ Equity
Amount in this period
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Amount in this period|||||||||||
||Owner’s equity Attributable to the Parent Company|||||||||||
|||Other Equity||Less||||||||
|||||||||Com||||
|||instrument||:||||||Minor||
||||||Other|||mon|||Total of|
|Items||prefe||Shar||Specialized|Surplus|||shareholders’||
||Share Capital||Capital reserves||Comprehensive|||risk|Attributable profit||owners’ equity|
|||rred||es in||reserve|reserves|||equity||
|||stoc||stoc|Income|||prov||||
|||||||||ision||||
|||k||k||||||||
|I.Balance at the end of last year|||||||621,112,807.7||||6,745,622,670.|
||754,010,400.00||139,590,345.09||2,137,419,299.84|27,546,353.37|||2,705,667,037.15|360,276,427.29||
||||||||8||||52|
|Add: Change of accounting policy||||||||||||
|Correcting of previous errors||||||||||||
|Merger of entities under common||||||||||||
|control||||||||||||
|Other||||||||||||
|II.Balance at the beginning of||||||||||||
||||||||621,112,807.7||||6,745,622,670.|
||754,010,400.00||139,590,345.09||2,137,419,299.84|27,546,353.37|||2,705,667,037.15|360,276,427.29||
|current year|||||||8||||52|
|III.Changed in the current year|||||||||||-525,450,223.|
||||-45,256.07||-567,060,789.75|-2,176,638.76|||68,753,250.90|-24,920,789.94||
||||||||||||62|
|（1）Total comprehensive income|||||||||||-445,474,037.|
||||||-567,060,789.75||||68,753,250.90|52,833,500.88||
||||||||||||97|
|（II）Investment or decreasing of||||||||||||
|capital by owners||||||||||||
|1．Ordinary Shares invested by Sh||||||||||||
|areholders||||||||||||

||||||
|-|-|-|-|-|
|2．Holders of other equity instrum|||||
|ents invested capital|||||
|3．Amount of shares paid and|||||
|accounted as owners’ equity|||||
|4．Other|||||
|（III）Profit allotment||||-41,161,592.5|
||||-41,161,592.50||
|||||0|
|1.Providing of surplus reserves|||||
|2.Providing of common risk|||||
|provisions|||||
|3．Allotment to the owners (or|||||
|||||-41,161,592.5|
||||-41,161,592.50||
|shareholders)||||0|
|4．Other|||||
|(IV) Internal transferring of|||||
|owners’ equity|||||
|1. Capitalizing of capital reserves|||||
|(or to capital shares)|||||
|2. Capitalizing of surplus reserves|||||
|(or to capital shares)|||||
|3．Making up losses by surplus|||||
|reserves.|||||
|4. Other|||||
|(V). Special reserves|||||
|||-2,176,638.76|-378,458.25|-2,555,097.01|
|1. Provided this year|||||
|2．Used this term|||||
|||-2,176,638.76|-378,458.25|-2,555,097.01|
|（VI）Other||||-36,259,496.1|
||-45,256.07||-36,214,240.07||
|||||4|

|||||||||
|-|-|-|-|-|-|-|-|
|IV. Balance at the end of this term|||||621,112,807.7|||
||754,010,400.00|139,545,089.02|1,570,358,510.09|25,369,714.61||2,774,420,288.05|335,355,637.35|
||||||8|||

 Legal Representative: Zheng Bin Person in charge ofaccounting：Zhao Jiamao Accounting Dept Leader: Zhao Jiamao
Amount in last year
In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Amount in last year|||||||||||||
|||Other Equity||||||||||||
|||||||Less||||||||
|||instrument||||||||Com||||
|||||||:||||||Minor||
||||||||Other|||mon|||Total of|
|Items||prefe||||Shar||Specialized|Surplus|||shareholders’||
||Share Capital||Sust||Capital reserves||Comprehensive|||risk|Attributable profit||owners’ equity|
|||rred||Othe||es in||reserve|reserves|||equity||
||||aina||||Income|||prov||||
|||stoc||r||stoc||||||||
||||ble|||||||ision||||
|||k||||k||||||||
||||debt|||||||||||
|I.Balance at the end of last year|||||||||621,112,807.7||||4,589,137,018.1|
||754,010,400.00||||139,590,345.09||-852,752.00|31,764,920.51|||2,673,711,591.42|369,799,705.35||
||||||||||8||||5|
|Add: Change of accounting policy||||||||||||||
|Correcting of previous errors||||||||||||||
|Merger of entities under common||||||||||||||
|control||||||||||||||
|Other||||||||||||||
|II.Balance at the beginning of||||||||||||||
||||||||||621,112,807.7||||4,589,137,018.1|
||754,010,400.00||||139,590,345.09||-852,752.00|31,764,920.51|||2,673,711,591.42|369,799,705.35||
|current year|||||||||8||||5|
|III.Changed in the current year|||||||||||||2,156,485,652.3|
||||||||2,138,272,051.84|-4,218,567.14|||31,955,445.73|-9,523,278.06||
||||||||||||||7|
|（1）Total comprehensive income|||||||||||||2,205,819,792.2|
||||||||2,138,272,051.84||||31,955,445.73|35,592,294.71||
||||||||||||||8|
|（II）Investment or decreasing of||||||||||||||

|||||
|-|-|-|-|
|capital by owners||||
|1．Ordinary Shares invested by Sh||||
|ereholders||||
|2．Holders of other equity instrum||||
|ents invested capital||||
|3．Allotment to the owners (or||||
|shareholders)||||
|4．Other||||
|（III）Profit allotment||||
|||-44,221,187.50|-44,221,187.50|
|1.Providing of surplus reserves||||
|2.Providing of common risk||||
|provisions||||
|3．Allotment to the owners (or||||
|||-44,221,187.50|-44,221,187.50|
|shareholders)||||
|4．Other||||
|(IV) Internal transferring of||||
|owners’ equity||||
|1. Capitalizing of capital reserves||||
|(or to capital shares)||||
|2. Capitalizing of surplus reserves||||
|(or to capital shares)||||
|3．Making up losses by surplus||||
|reserves.||||
|4. Other||||
|(V). Special reserves||||
||-4,218,567.14|-894,385.27|-5,112,952.41|

||||||||||
|-|-|-|-|-|-|-|-|-|
|1. Provided this year|||||||||
|||||160,572.72|||147,453.68|308,026.40|
|2．Used this term|||||||||
|||||-4,379,139.86|||-1,041,838.95|-5,420,978.81|
|（VI）Other|||||||||
|IV. Balance at the end of this term|||||621,112,807.7|||6,745,622,670.5|
||754,010,400.00|139,590,345.09|2,137,419,299.84|27,546,353.37||2,705,667,037.15|360,276,427.29||
||||||8|||2|

 Legal Representative: Zheng Bin Person in charge ofaccounting：Zhao Jiamao Accounting Dept Leader: Zhao Jiamao
8.Statement of change inowner’s Equity of the Parent Company
Amount in this period
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Amount in this period|||||||||||
|||Other Equity||||||||||
|||instrument|||||Other|||||
|||||||Less: Shares|||Common risk||Total of owners’|
|Items|Share Capital||||Capital reserves||Comprehensive|Surplus reserves||Attributable profit||
|||preferr||||in stock|||provision||equity|
|||ed|Sustai|Othe|||Income|||||
||||nable|r||||||||
|||stock||||||||||
||||debt|||||||||
|I.Balance at the end of last year||||||||||||
||754,010,400.00||||138,953,250.09||2,137,800,156.80|10,874,033.85|602,356,402.65|2,243,299,128.08|5,887,293,371.47|
|Add: Change of accounting policy||||||||||||
|Correcting of previous errors||||||||||||
|Other||||||||||||
|II.Balance at the beginning of current||||||||||||
||754,010,400.00||||138,953,250.09||2,137,800,156.80|10,874,033.85|602,356,402.65|2,243,299,128.08|5,887,293,371.47|
|year||||||||||||
|III.Changed in the current year||||||||||||
||||||||-566,887,547.71|-1,244,233.66||55,342,832.33|-512,788,949.04|
|（I）Total comprehensive income||||||||||||
||||||||-566,887,547.71|||55,342,832.33|-511,544,715.38|

||||
|-|-|-|
|(II) Investment or decreasing of|||
|capital by owners|||
|1．Ordinary Shares invested by share|||
|holders|||
|2．Holders of other equity instrument|||
|s invested capital|||
|3.Amount of shares paid and|||
|accounted as owners’ equity|||
|4．Other|||
|（III）Profit allotment|||
|1.Providing of surplus reserves|||
|2．Allotment to the owners (or|||
|shareholders)|||
|3．Other|||
|(IV) Internal transferring of owners’|||
|equity|||
|1. Capitalizing of capital reserves (or|||
|to capital shares)|||
|2. Capitalizing of surplus reserves (or|||
|to capital shares)|||
|3．Making up losses by surplus|||
|reserves.|||
|4. Other|||
|(V). Special reserves|||
||-1,244,233.66|-1,244,233.66|
|1. Provided this year|||

|||||||||
|-|-|-|-|-|-|-|-|
|．Used this term||||||||
|||||-1,244,233.66|||-1,244,233.66|
|（VI）Other||||||||
|V. Balance at the end of this term|754,010,400.00||||||5,374,504,422.43|
|||138,953,250.09|1,570,912,609.09|9,629,800.19|602,356,402.65|2,298,641,960.41||

 Legal Representative: Zheng Bin Person in charge ofaccounting：Zhao Jiamao Accounting Dept Leader: Zhao Jiamao
Amount in last year
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Amount in last year|||||||||||
|||Other Equity||||||||||
|||instrument|||||Other|||||
|||||||Less: Shares|||Common risk||Total of owners’|
|Items||||||||||||
||Share Capital||||Capital reserves||Comprehensive|Surplus reserves||Attributable profit||
|||preferr||||in stock|||provision||equity|
|||ed|Sustai|Othe|||Income|||||
||||nable|r||||||||
|||stock||||||||||
||||debt|||||||||
|I.Balance at the end of last year||||||||||||
||754,010,400.00||||138,953,250.09|||13,098,989.67|602,356,402.65|2,201,224,089.10|3,709,643,131.51|
|Add: Change of accounting policy||||||||||||
|Correcting of previous errors||||||||||||
|Other||||||||||||
|II.Balance at the beginning of||||||||||||
||754,010,400.00||||138,953,250.09|||13,098,989.67|602,356,402.65|2,201,224,089.10|3,709,643,131.51|
|current year||||||||||||
|III.Changed in the current year||||||||||||
||||||||2,137,800,156.80|-2,224,955.82||42,075,038.98|2,177,650,239.96|
|（I）Total comprehensive income||||||||||||
||||||||2,137,800,156.80|||42,075,038.98|2,179,875,195.78|
|(II) Investment or decreasing of||||||||||||
|capital by owners||||||||||||
|1．Ordinary Shares invested by sha||||||||||||
|reholders||||||||||||

|||||||||
|-|-|-|-|-|-|-|-|
|2．Holders of other equity instrum||||||||
|ents invested capital||||||||
|3.Amount of shares paid and||||||||
|accounted as owners’ equity||||||||
|4．Other||||||||
|（III）Profit allotment||||||||
|1.Providing of surplus reserves||||||||
|2．Allotment to the owners (or||||||||
|shareholders)||||||||
|3．Other||||||||
|(IV)Internal transferring of owners’||||||||
|equity||||||||
|1. Capitalizing of capital reserves||||||||
|(or to capital shares)||||||||
|2. Capitalizing of surplus reserves||||||||
|(or to capital shares)||||||||
|3．Making up losses by surplus||||||||
|reserves.||||||||
|4. Other||||||||
|(V) Special reserves||||||||
|||||-2,224,955.82|||-2,224,955.82|
|1. Provided this year||||||||
|2．Used this term||||||||
|||||-2,224,955.82|||-2,224,955.82|
|（VI）Other||||||||
|IV. Balance at the end of this term||||||||
||754,010,400.00|138,953,250.09|2,137,800,156.80|10,874,033.85|602,356,402.65|2,243,299,128.08|5,887,293,371.47|

Legal Representative: Zheng Bin Person in charge ofaccounting：Zhao Jiamao Accounting Dept Leader: Zhao Jiamao
III.Company Profile
Hangzhou Steam Turbine Co., Ltd. (the Company) was incorporated as a joint stock limited company exclusively promoted by Hangzhou Steam Turbine& Power Group Company Limited (“HSTG”) approved by the Securities Regulatory Commission of the State Council with the Document SRC[1998] No. 8 by offering domestically listed foreign currency ordinary shares (B Shares), with registration date: April 23, 1998, Headquartered in Hangzhou, Zhejiang Province. The company now holds a unified social credit code for the 913300007042026204 business license, TheCompany’s registered capital is increased to RMB754.0104 million with total capital share of 754.0104 million shares (face value RMB1.00). Among which state-owned legal person shares were 479.8248 million shares and 274.1856 million shares of current B shares. The shares were issued and listed for trading in Shenzhen Stock Exchange on April 28, 1998.
The design, manufacturing, Main Business Activities:R&D, Production and Sales of Industrial Steam Turbine. Main Products: Industrial Steam Turbine
These Financial Statements are released upon approval at the 20th meeting of the 7th term of Board held on March 26, 2018.
19 subsidiaries including Zhejiang Steam Turbine Packaged Technologies Co., Ltd., Hangzhou Zhongneng Steam Turbine Power Co., Ltd., Hangzhou Steam Turbine Casting Co., Hangzhou Steam Turbine Auxiliary Co., Ltd., Hangzhou Steam Turbine Machinery& Equipment Co., Ltd., Zhejiang Turbine Import& Export Co., Ltd., and Hangzhou Steam Turbine Industry Co., Ltd., were consolidated to the Financial Statements. For details of changing consolidation range and equity position please go to the Notes to the Financial Statements.
IV. Basis of compiling the finance report
(1) Basis of compiling
The Company adopts perpetual operation as the basis of financial statements.
(II) Assessment on perpetuation
No issue or situation, in 12 months since the end of report period, composes major doubt on the perpetuation assumption of the Company.
V. Principal Accounting Policies and Estimations
Whether the company needs to comply with the disclosure requirements of the particular industry
No
Important prompt: The Company utilized detailed accounting polices and estimations on providing of bad debt provisions, fixed asset depreciation, intangible asset amortization, recognition of revenue, and so forth, according to its business practices.
1. Statement of compliance to the Enterprise Accounting Standard
The finance report produced by the Company is accordance with the Enterprise Accounting Standard, and reflects theCompany’s financial state, business performance and cash flow frankly and completely.
2. Fiscal year
The Company uses the calendar year for its fiscal year. A fiscal year is from January 1 to December 31.
3. Operational period
TheCompany’s relatively shorter operational period, which is 12 months, and is used as division of liquidity of assets and liabilities.
4. Standard currency for bookkeeping
The Company uses Renminbi (RMB) as the standard currency for book keeping.
5. Accounting treatment of the entities under common control and different control
1. Treatment of entities under common control
Assets and liabilities acquired in merger of entities are measured at book values at the date of merger. The difference between the net book value of asset and the offered price (or total of face value of shares issued) will be adjusted into capital reserves; when the capital reserves is not enough to reduce, it will be adjusted into retained
profit.
2. Treatment of entities under different control
The difference of takeover cost over the fair value of recognizable net asset of the acquired entity is recognized as goodwill at the day of takeover; in case the takeover cost is lower than the fair value of recognizable net asset of the acquired entity, the measuring process over the recognizable asset, liabilities, contingent liabilities, and takeover cost, shall be repeated, if comes out the same result, the difference shall be recorded into current income account.
6. Method for preparing the consolidated financial statements
The parent company puts all of its subsidiaries under its control into the consolidated financial statements. The consolidated financial statements are prepared according to the “Enterprise Accounting Standard No. 33– Consolidated Financial Statements”, basing on the accounts of the parent company and the subsidiaries, and after adjusting the long-term investment equity in the subsidiary on equity basis.
7. Recognition of cash and cash equivalents
Cash equivalent refers to the investment held by the Company with short term, strong liquidity and lower risk of value fluctuation that is easy to be converted into cash of known amount.
8. Foreign currency trade and translation of foreign currencies
1. Translation of foreign currency
Foreign currency trades are translated into RMB at the rate of the day when the trades are made. Those balances of foreign currencies and monetary items in foreign currencies are accounted at the exchange rate of the balance sheet date. Exchange differences, other than special loans satisfying the conditions of capitalization, are accounted into current income account. Non-monetary items in foreign currencies and on historical cost are translated at the rate of the trade day. Non-monetary items in foreign currencies and on fair value are translated at the rate of the day when the fair value is recognized, where the differences are accounted as gain/loss from change of fair value. 2. Translation of foreign currency financial statements
Asset and liability items in the balance sheet are translated basing on the exchange rate of the balance sheet date;Owners’ equities other than Retained Profit are translated at the exchange rate of the date when the trade happened. Income and expense items in the income statement are translated at the similar rate of the date when the trade happened. Differences generated by the above translating of foreign currencies are demonstrated separately under theowners’ equity in the balance sheet.
9. Financial instruments
1. Type of finance asset and finance debt Finance assets fall into four categories at initial recognition: financial asset appointed to be measured at fair value with their changes are accounted into current gain/loss accounts(including transactional finance asset and financial asset appointed to be measured at fair value with their changes are accounted into current gain/loss accounts), transactional financial assets, debt and account receivable, finance asset saleable.
Finance debts fall into two types at initial recognition: financial debt appointed to be measured at fair value with their changes are accounted into current gain/loss accounts(including transactional finance debt and financial debt appointed to be measured at fair value with their changes are accounted into current gain/loss accounts), other finance debt.
2. Basis of recognition and accounting of finance asset and finance debt When the Company is one part of the finance instrument contract, one finance asset or debt is recognized. When on recognizing initially finance asset or debt, it is measured by fair value, for the finance asset or debt which appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, the related transaction expenses are directly accounted into current gain and loss; for other finance asset and debt, the related transaction expenses accounted into the initial recognition account. The Company future measures finance asset by fair value without deducting future
possible transaction fee but with exception: (1) Due investment, debt and account receivable are measured by
actual interest rate according to the amortized costs. (2) Equity instrument investment which have no quote in active market and which fair valuecan’t be measured reliably, and its derived finance assets which are connected with the equity instrument and which are summarized through the equity instrument, are measured by cost. 2. Basis of recognition and accounting of finance asset and finance debt When the Company is one part of the finance instrument contract, one finance asset or debt is recognized. When on recognizing initially finance asset or debt, it is measured by fair value, for the finance asset or debt which appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, the related transaction expenses are directly accounted into current gain and loss; for other finance asset and debt, the related transaction expenses accounted into the initial recognition account. The Company future measures finance asset by fair value without deducting future possible transaction fee but with exception: (1) Due investment, debt and account receivable are measured by actual interest rate according to the amortized costs. (2) Equity instrument investment which have no quote in active market and which fair valuecan’t be measured reliably, and its derived finance assets which are connected with the equity instrument and which are summarized through the equity instrument, are measured by cost. The Company conduct successive measure of finance debt according to amortized cost by actual interest rate with exception as following: (1) finance debt which appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, is measured at fir value without deducting possible future transactional fee at settlement; (2) Equity instrument investment which have no quote in active market and which fair valuecan’t be measured reliably, and its derived finance assets which are connected with the equity instrument and which are closed off through the equity instrument, are measured by cost. (3) finance debt sponsorship contracts which are not appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, or debt agreements at rate lower than market rate and which are not appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, are measured at the higher value between the optimal estimated value payable according to current obligations and the surplus value from which the initial recognition value deduct the accumulated amortized amount according to the actual interest rate.
Gain or loss from fluctuation of financial assets or liabilities are handled at the following ways, except for relating to hedge instrument.
(1) Gain or loss from fluctuation of fair value of financial assets or liabilities and accounted into current gain/loss account, are accounted into gain/loss of fluctuation of fair value. Interests or cash dividend received in the period of holding these assets are recognized as investment gains. When they are disposed, the difference between the amount actually received and initially booked value is recognized as investment gains, and adjust the gain/loss from fair value fluctuation.
(2) Fluctuation of fair value of sellable financial assets accounted into capital reserves; interests gained at actual interest rate are accounting into investment gains; the cash dividend received from sellable instrument investment, are accounted into investment gains when distributed; At disposal of these investment, the difference between actual amount received and book value are recognized as investment gains after deducting of accumulated change of fair value which are originally accounted into capital reserves.
As soon as the contract rights of acquiring the cash flow of particular financial asset have been terminated or almost all of the risks and rewards attached to the financial asset have been transferred, recognition of the financial asset is terminated; as soon as the current liabilities attached to the financial liability have been completely or partially relieved, recognition of the financial liability or part of is terminated.
3. Basis of recognition and accounting of financial asset transferring
The Company stop recognizing the finance asset which risks and remuneration of ownership are transferred to the receiver; and continue to recognize the transferred finance asset which risks and remuneration of ownership are kept, and recognize the value as one finance debt. For the finance assets which risks and remuneration of ownership are not transferred or kept, the Company recognize them as following: (1) stop recognizing the finance asset which are given up the control; (2) continue to recognize the finance asset and related finance debt according to the extend which involved into the transferred finance asset for the finance asset which are not given up control. The Company measured the surplus between the following two values for the transferred finance assets which fulfill the stop recognition requirements into current gain or loss: (1) Account value of the transferred finance asset; (2) Consideration plus the accumulated fair value changes which were accounted directed into ownership rights. For the transferred finance assets which partly fulfill the stop recognition requirements the Company amortized the stopped recognition part and the not-stopped recognition part of the account value of the whole transferred finance asset, and account the surplus between the following two values into current gain or loss: (1)
Account value of the stopped recognition part; (2) consideration plus the corresponding stopped recognition part
of the accumulated fair value changes which were accounted directed into ownership rights.
4. Recognition of fair value of financial assets and liabilities
The Company utilizes evaluation technologies supported by sufficient data and information to recognize the fair values of financial assets and liabilities. Values inputted to the evaluation technology are divided into following levels and used in sequence:
(1) Level 1 input: unadjusted quotations obtained from an active market of the similar asset or liability at the date of measurement;
(2) Level 2 input: values of the asset or liability observable, directly or indirectly, other than level 1 input, including: quotation of similar asset or liability in an active market; quotation of similar asset or liability in an non-active market; other observable value other than quotations, i.e. observable interest or gain curves in normal intervals of quotations.
(3) Level 3 input: non-observable input value of the asset or liability, including interest rates which are not observable or not testified by observable market data, fluctuation of stock prices, future cash flow of disposal liabilities undertaken from merger of entities, or financial predictions upon data itself.
5. Impairment test and impairment reserves plan
(1) The Company conduct impairment test to the finance asset other than which appointed to be measured at fair value with their changes are accounted into current gain/loss accounts on balance sheet day. Impairment provision is provided as long as evidence showing that impairment has happened to the financial asset.
(2) In dealing with major financial assets such as investment hold-to-mature, loans, and receivables, the Company conduct independently impairment test for single finance asset. Impairment tests are conducted with those of the finance asset composition which have similar credit risk characteristics; for the non impairment assets which are tested independently, the Company conduct the impairment test with those of the finance asset composition which have similar credit risk characteristics. The balance of book value over current value of expected future cash flow is recognized as impairment loss.
(3) Objective evidences of impairment on sellable financial assets 1) Objective evidences supporting the impairment of investment on sellable liability instruments are: a. Material financial dilemma with the debtor; b. Violating of the contract by the debtor, e.g. overdue of payment for interests or principal; c. Compromise made to the debtor who is in financial crisis with consideration of financial or legal factors; d. Possible bankruptcy or financial restructuring of the debtor; e. The liability instrument is not able to be traded in an active market for the debtor is in material financial dilemma; f. Other circumstances that are showing that impairment has already occurred.
2) Objective evidence showing that impairment has already occurred on sellable equity instruments are: significant or non-temporary fall of fair value, the invested entities suffers from material negative situations in aspects of technical, market, economy, or legislation environment. The Company performs tests on investments on sellable equity instruments individually on the balance sheet day. For investment on equity instruments measured on fair value, if the fair value on the balance sheet day is lower than the cost by50% (included), or lower than the costs for successively 12 months (included), impairment is recognized; If the fair value is lower than the cost by more than20% (included), but higher than50%, or lower than the cost for successively 6 months (included) but not more than 12 months, the Company will determine if impairment occurred with consideration of other factors, e.g. fluctuation of prices. For those equity instruments on cost basis, the Company will decided about impairment with consideration of the investedentities’ situations in aspects of technical, market, economy, or legislation environment.
When impairment occurred with a sellable financial asset, the accumulated losses caused by decreasing of fair value which have originally been written intoowners’ equity shall be carried over to current gain/loss account. If practical evidence showing that the value of a particular financial asset has recovered in value after a impairment loss has been recognized and practically related to the issues occurred after recognition of the loss, the impairment loss recognized shall be restored and accounted into current gain/loss. Impairment loss of sellable equity investment instrument will be restored toowners’ equity when the fair value has increased afterward. When impairment occurs on sellable equity instrument on cost basis, the balance between its book value and the current value of the predictable future cash flow upon current market gain rate, is recognized as impairment loss and recorded to current gain/loss account. It will not be written back in subsequent years.
When impairment occurred with a sellable financial asset, the accumulated losses caused by decreasing of fair
value which have originally been written intoowners’ equity shall be carried over to current gain/loss account. If practical evidence showing that the value of a particular financial asset has recovered in value after a impairment loss has been recognized and practically related to the issues occurred after recognition of the loss, the impairment loss recognized shall be restored and accounted into current gain/loss. Impairment loss of sellable equity investment instrument will be restored toowners’ equity when the fair value has increased afterward.
10. Receivable accounts
(1) Recognition and providing of bad debt provision on individual receivable account with large amount
Basis of recognition or standard amount of
Accounts take over10% of the book balance of receivable accounts
individual account with large amount
Impairment test performed individually, bad debt provision will be provided at Basis of bad debt provision
the difference of expected cash flow lower than the book value.
(2)Recognition and providing basis of bad debt reserves for group of receivable accounts with similar characteristics of credit risks
|||
|-|-|
|Name of the Group|Basis of bad debt provision|
|Group by age analysis|Age analysis method|
|The association unit within the scope of the merger is a credit risk f||
||Impairment test performed individually, bad debt provision|
|eature that is matched against the income from the related transacti||
||will be provided at the difference of expected cash flow lower|
||than the book value.|
|ons.||

Bad debt profisions are provided on age analyze basis in the protfolio
||||
|-|-|-|
|||Rate of provision on other receivable|
|Age|Rate of provision on receivable account||
|||account|
|Within 1 year)included)|5.00%|5.00%|
|1－2 years|10.00%|10.00%|
|2－3 years|30.00%|30.00%|
|3－4 years|60.00%|60.00%|
|4－5 years|80.00%|80.00%|
|Over 5 years|100.00%|100.00%|

 Bad debt provisions are provided on percentage basis in the portfolio
Not applicable
Bad debt provisions are provided on other basis in the portfolio
Not applicable
(3)Receivable accounts with minor amount but bad debt provisions are provided individually
|||
|-|-|
||When there is significant difference between the current value of future cash flow of|
|Basis of providing bad debt individually||
||the receivable account and the current value of future cash flow of the group|

|||
|-|-|
||Impairment test performed individually, bad debt provision will be provided at the|
|Basis of bad debt provision||
||difference of expected cash flow lower than the book value.|

11.Inventories
Whether the company needs to comply with the disclosure requirements of the particular industry
No
(1) Inventory classification
Inventories include saleable finished goods or merchandise, product-in-process , consumption material and goods in manufacturing procedure or working procedure.
(2) Pricing of inventory to be delivered
Pricing basis:
Delivered out materials are accounted by weighted average method, issued out finished products are accounted at individual price.
(3) Recognition of realizable net value of inventory and providing of inventory impairment provision
At the balance sheet day, inventories are measured at the lower of costs and cashable net values, the individual difference between the cashable net value and cost are provided as inventory impairment provision. For finished product, merchandise, saleable material and other saleable merchandise inventory, their cashable net values are recognized by their estimated sale price in normal operation deducting estimated sale expenses and related taxes; for material inventory which need processing, it cashable net value are recognized by the estimated sale prices of its finished products in normal operation deducting the estimated cost, sale expenses and related taxes due to the end of processing; At the balance sheet day, for inventory item which part has contract price and part has no contract price, the cashable net value is accounted separately, and recognize the inventory impairment provision or returnable cash..
(4) Inventory system
Inventory system: perpetual inventory system
(5) Amortization of low-value consumables and packaging materials
1.Low price consumable
Basis of amortizing: one-off
2.Packaging materials
Basis of amortizing: one-off
12. Long-term equity investment
1. Recognition of common control and substantial influence
According to the contract, if the investedenterprise’s main finance and operation policy need to be agreed by the other investing party, the investment is common control investment; if only have participating decision rights in investedenterprise’s main finance and operation policy but have no own control or common control with other investing part, the investment is investment with substantial influence.
2. Recognition of initial investment costs
(1) For the long-term equity investment formed by corporate merger under common control, if it is the long-term equity investment obtained from the corporate merger by paying cash, transferring non-cash asset, bear liability
and issuing equity securities, the share of book value of owner's equity of the merged party on the merger date
shall be taken as the initial investment cost. The asset reserve is adjusted according to the difference between the
initial investment cost of long-term equity investment and the book value of paid combined consideration or
issued securities; if the capital is not enough for deduction, the remain earnings are adjusted.
Recognition of “one-off” trade when long-term equity investment is composed by merger of entities under common control by multiple steps.
Transactions under an “one-off” trade are accounted as a common trade of ownership.
Transactions which are not “one-off” trades are recognized for their initial investment cost basing on the share of book value of net asset in the consolidated financial statement of the entities acquired. Balance between the initial investment cost and the book value of the long-term equity investment before merger and the premium paid for the new shares after merger, is adjusted to capital reserves; when the capital reserve is not enough to offset, retained profit shall be adjusted thereof.
(2) For the long-term equity investments formed by merger of enterprises under different control, the initial investment cost is recognized by the fair value of combined consideration on purchasing day and related expenses. Long-term equity investment formed by acquisition of entities under different control by trade in multiple stages are accounted separately in the financial statements and consolidated financial statements.
1) In individual financial account, the sum of book value of original equity investment plus new investment cost is recognized as the initial investment cost on cost basis.
2) Recognition of “one-off” trade in consolidated financial statements
Transactions under an “one-off” trade are accounted as a common trade of ownership. Transactions which are not “one-off” trades are re-measured for their fair value at the day of acquisition. Balance between the fair value and the book value of the long-term equity investment is adjusted to current investment gains; other gains from equity on equity basis before the acquisition day are written over to current gains of at the day of acquisition, but not the gains from re-calculating of changes in net liability or asset by the invested entity.
(3) Formed by means other than entity merger:
Acquired by cash payment– initial investment cost is the actual amount of payment;
Acquired by issuing of equity certificates– initial investment cost is the fair value of equity certificate issued; Acquired by debtor restructuring– initial cost recognized as according to the Enterprise Accounting Standard No.12– Debtor restructuring;
Acquired by trading of non-monetary asset - initial cost recognized as according to the Enterprise Accounting Standard No.7– Trade of non-monetary assets;
3. Subsequent measurement and recognition of gain/loss
Cost basis is adopted in accounting of long-term equity investment in entities under substantial control of the Company; while equity basis is adopted in accounting of investment in affiliates and joint-ventures.
4. Treatment of disposal of subsidiaries by stages till losing of control power
(1) Individual account
At disposal of equity shares, the balance between book value and actual consideration received is recorded to current gain/loss account.
When the retained share equity is composing major influence or joint control with other parties on the invested entity, accounting will be on equity basis;
When none of substantial control, joint control, or major influence on the entity, it will be recognized as sellable financial asset and accounted on fair value.
(2) Basis of Consolidated Financial Statements
1) Losing of controlling power on a subsidiary through disposal of equity by multiple trades, and not recognized as “one-off” trade:
Before losing of control power, the balance of disposal consideration and the share of net asset attributable to the Company on continued basis since purchasing or merger, is adjusted to capital reserves (capital premium), whereas if the capital premium is not enough to offset the amount, retained profit will be offset at corresponding
amount.
At losing of control power over a former subsidiary, the retained equity shares shall be re-calculated according to the fair value at the day of losing power. Sum of the consideration obtained from disposal and fair value of the retained equity shares, less the share of net asset attributable to the Company on continued basis since purchasing or merger, is accounted into investment gains of the period when the control power is disposed, and goodwill shall be offset meanwhile. Other gains related to the equities in formal subsidiary shall be written over to current investment gains at the period when control power was disposed.
2) Losing of controlling power on a subsidiary through disposal of equity by multiple trades, and recognized as “one-off” trade:
The multiple trades are treated as one trade that causes losing of control power on a subsidiary. However, the balance between the consideration received from each trade and corresponding share of net asset is recognized as other gains in the consolidated accounts, and transferred collectively to gain/loss account of the period in which the control power was lost.
13. Fixed assets
1. Conditions for fixed asset recognition
Fixed assets is defined as the tangible assets which are held for the purpose of producing goods, providing services, lease or for operation& management, and have more than one year of service life. Fixed assets are recognized at satisfying of great possibility of benefit inflow and costs are accountable.
2. Depreciation
||||||
|-|-|-|-|-|
|Categories|Basis of depreciation|Depreciation age (year)|Retain value rate|Annual depreciation ratio|
||Straight average on||||
|Houses & buildings||20-30|4|4.8-3.2|
||period||||
||Straight average on||||
|Equipment & machinery||8-15|4|12-6.4|
||period||||
|Transportation|Straight average on||||
|||4-8|4|24-12|
|equipment|period||||
||Straight average on||||
|Office equipment||5|4|19.2|
||period||||

14. Construction in process
Whether the company needs to comply with the disclosure requirements of the particular industry
No
1. Construction in process is recognized on the basis of characteristics: very possible economic benefit flow in, cost can be measured reliably. Since the date when the construction in process reaches its useful status as expected, the construction in process is measured by the happened cost Since the date when the construction in process reaches its useful status as expected.
2. When the construction in process reaches its useful status as expected, it is transferred into fixed asset at actual cost. If the construction in process has reached useful status but with completion of project settlement process, it is transferred to fixed asset at the value estimated, and adjustment will happen after completion of project settlement process but no adjustment on depreciation provided previously.
15. Loan expenses
1. Capitalizing of loan expenses
Loan expenses occurred in the Company, which can be categorized to purchasing or construction of assets
satisfying the conditions of capitalization, shall be capitalized and accounted into capital costs; while other loan
expenses are recognized as expenses and recorded into current income account.
2. Capitalization period of loan expenses
(1) Capitalization started as soon as all of these conditions are satisfied: 1) Capital expenditures have occurred; 2) Loan expenses have occurred; 3) Necessary purchasing or construction processes have been started to make the asset usable or sellable.
(2) If irregular interruption occurred in the purchasing or construction process of the assets satisfying the capitalizing conditions, and suspended for over successive three months, capitalizing of loan expenses is suspended; loan expenses occurred during the suspension period are recognized as current expenses until the purchasing or construction process resumes.
(3) Capitalizing of loan expenses is terminated as soon as the asset satisfying the capitalizing conditions reaches the state of usable or sellable as expected.
3. Rates and amounts of loan expense capitalization
Special loans raised for purchasing or construction of assets satisfying the conditions of capitalization, interest to be capitalized will be the actual interest expenses occurred in the current period of loan (including the discount, premium, or amortizing decided on actual interest rate basis), less the interest income from the unused loans in bank account or provisional investment gains; common loans used for purchasing or construction of assets satisfying the conditions of capitalization, the interest to be capitalized will be the weighted average of balance over special loans multiply capitalization rate of common loans.
16. Intangible assets
（1）Pricing Method, service life and impairment test
1. Intangible assets are land using rights, patents, and non-patent technologies, which are measured at cost basis. 2. For intangible assets with limited useful life, during the use life it is amortized according to the anticipating implementation method of the economic benefit of the intangible asset systematically and reasonably. Ifcan’t recognize the anticipating implementation method, the straight basis is deployed.
|||
|-|-|
|Items|Amortiing years|
|Land use right|50|
|Patent and Special technology|5-20|
|Unpatent technology|10|
|Softward|5|

(2) Accounting policy for internal research and development expenditure
Expenditures of internal researching projects are accounted into current term gain and loss when happens. The development period expenditures are recognized as intangible assets when fulfill following conditions: (1) The intangible asset is completed and technically possible to be used or sold; (2) With intention to complete the intangible asset for purpose of use or sale; (3) Evidence showing that there are markets or the products produced with using of the intangible asset, or markets of the intangible asset itself, by which the intangible asset may produce financial benefits. Intangible assets used inside the Company must be approved for their usable characters. (4) Developing of the intangible assets are supported by sufficient technical, financial, and other resources, and the intangible assets can be used or sold. (5) Expenditures occurred in developing of the intangible asset may be reliably measured.
17. Impairment of partial long-term assets
For those long-term assets such as equity investment, fixed assets measured on cost basis, construction-in-process,
intangible assets with limited service life, their recoverable amount shall be evaluated as soon as there was
evidence indicating impairment at the balance sheet day. For intangible assets such as goodwill from merger or
intangible assets with uncertain service lives, impairment test is performed each year whatever there is evidence
of impairment or not. Impairment test on goodwill is performed on combination of related assets.
When the result of prediction shows that the recoverable amount is lower than its book value, the balance shall be provided impairment provision and accounted into current gain/loss.
18. Long-term amortizable expenses
Long-term amortizable expenses which have been paid but with amortizing period over 1 year (not included). Long-term amortizable expenses are recorded at actual amount occurred, and straight amortized to stipulated periods. In case a long-term expense was not benefiting the succeeding periods, then the balance of the account shall be transferred over to current income account.
19.Employees’ wage
1. Accounting of short-term wages
In the fiscal period when an employee is providing services, short-term wages actually occurred is recognized as liability, and recorded into current gain/loss account or cost of related asset.
2.Accounting of stipulated beneficiary plan is on following steps:
1) On basis of expected accumulation of welfare, estimations on population variables and financial variables, calculating of liabilities from stipulated beneficiary plan, and recognition of the period of related liabilities, are performed on basis of non-bias and accordance actuary. Meanwhile, discount is performed on the liabilities from stipulated beneficiary plan to recognize the current value and service cost of the liabilities from the stipulated beneficiary plan.
2) When there is asset involved in the stipulated beneficiary asset, the deficit or premium from the balance of the current value of liabilities of stipulated beneficiary plan over their fair values is recognized as its net liability or net asset. When there is a premium with a stipulated beneficiary plan, the lower one between the premium and the upper limit of the asset is recognized as the net asset of such stipulated beneficiary asset;
3) At end of period,employees’ wages from stipulated beneficiary plan are recognized by three parts including service cost, net interest of net liability or net asset, and recalculated net asset or liability variation. The first two are recorded into current gain/loss or related asset cost, the third is recorded to other gains, which will not be written back to gain/loss in successive fiscal periods, but the amount can be transferred with the range of equity. 3. Accounting of dismissing welfare
Welfares for employees who are dismissed, the earlier one of the following is recognized as employee wage liability, and recorded to current gain /loss:
(1) When the Company cannot, on its own call only, retrieve the dismissing welfare provided by dismissing of service plan or suggestion;
(2) When the costs or expenses related to restructuring involved in the dismissing welfare are recognized by the Company.
4. Accounting of other long-termemployees’ welfares
As of long-term welfares provided to the employees, those which satisfy conditions of the stipulated saving plan are treated according to related regulations of stipulated saving plan; those which other than the aforesaid, are treated according to the stipulated beneficiary plan. In viewing of simplifying accounting treatment, employee wage costs are recognized as service costs, the net amounts of interests of other long-term welfare net liability or asset, along with recalculated variations of the both are recorded to the related gain/loss or cost of related asset. 20. Expected liabilities
(1) When it is very much likely to cause economic interests which can be reliably calculated outflow from the company to fulfill the obligation which is due to giving security outside, contentious matter, quality guarantee of products, onerous contract and other contingency, the company will regard the obligation as anticipation liabilities.
(2) The company will make an initial measurement of anticipation liabilities according to needed expense
of best estimation when fulfilling related obligations and check the book value of anticipation liabilities on the
balance sheet date.
21.Revenue
Whether the company needs to comply with the disclosure requirements of the particular industry
No
1. Recognizing of revenue
(1) Sales of goods
Sales income is recognized when all of these conditions are satisfied: (1) Major risks and rewards attached to the goods have been transferred to the purchaser; (2) The Company holds neither successive management power which is normally attached to ownership, nor effective control, over the goods which have been sold out; (4) Amount of income may be reliably measured; (5) when the costs, occurred or will occur, may be measured reliably.
(2) Providing of services
At balance sheet day, those service trades (simultaneously satisfying the requirements of those: income can be measured reliably, related economic benefit will flow in very possibly, transaction procedure can be confirmed reliably, happened and happening cost can be measured reliably) which can be reliably estimated are recognized at the percentage of completion, and progress of completion of service is decided by the portion of costs occurred over the estimated total costs. At balance sheet day, those service trades which can not be reliably estimated, if the happened services cost will be compensated, the services income are recognized according to happened service cost and transited to service cost according to same amount; if the happened services cost will not be compensated, the happened services cost are accounted into currentterm’s gain or loss and the services income will not be recognized.
(3) Giving of asset using rights
Income from giving of assets is recognized when satisfying requirements: related economic benefit flows in very possibly, income can be measured reliably. Amount of interest income is calculated according to the time and actual interest rate of the monetary capital is used by other party. Income of using fee is calculated upon the charge period and calculation provided by the related contract or agreement.
(4) Construction contracts
1) When the result of the construction contract is able to be evaluated reliably at the balance sheet date, the income and cost of the contract are recognized on completion percentage basis. If the result of the construction contract is not able to be evaluated reliably, but the contract cost may be recovered, the income is recognized at the cost actually recovered, and the cost of the contract is recognized as contract expenses of the current period when it is occurred.
2) When all of the following conditions were satisfied, the result of a fix-amount contract is regarded as can be evaluated reliably: the total income of the contract may be measured reliably, there is great possibility that the financial benefit in relation with the contract will inflow, the actual contract costs may be identified and measured clearly and reliably, the construction progress and the cost to occur are able to be measured reliably. When all of the following conditions are satisfied, the result of a cost-plus-commission contract is regarded as can be evaluated reliably: there is great possibility that the financial benefit in relation with the contract will inflow, the actual costs may be identified and measured clearly and reliably.
3) Contract progress is recognized at the ratio of accumulative actual cost on the predicted complete cost. 4) In case the expected total cost is greater than the total income, the expected loss will be recognized as expense of the current period. If the construction is in process, the balance is accounted as inventory impairment provision; if the contract is not executed, the balance is accounted as expected liability.
2. Practical basis for recognition of revenue
Particular methods for recognition of revenue. The Company is mainly engaged in designing, manufacturing, sales, and service of steam turbines and gas turbines falling in the range of rotating and reciprocating machinery, and parts. Recognition of sales in the country shall satisfy: products had been delivered to the buyer and the amount had been fixed. Payment was received or documents received with great possibility of cash inflow. And the cost of the products is able to be measured appropriately. Recognition of sales outside the country shall satisfy: The goods had been filed by the custom with bill of lading obtained. The amount had been fixed, and payment was received or documents received with great possibility of cash inflow. And the cost of the products is able to be measured appropriately.
22. Government subsidy
1. Recognition basis and accounting of asset-related government subsidy
Government subsidies to the Company for purchasing or acquiring by other means of long-term asset are asset-related government subsidies. For government subsidies related to assets, the book value of the relevant assets is deducted or the deferred income is recognized. Where such subsidies are recognized as deferred income, the relevant assets shall, within the useful life of the relevant assets, be reasonably recognized, The method of the system shall be recorded into profit and loss by stages. The government subsidy measured according to the nominal amount shall be directly accounted for in the profits and losses of the current period. Where the relevant assets are sold, transferred, scrapped or damaged before the end of their useful life, Transfer the undistributed balance of deferred income to the current profit or loss of asset disposal.
2. Recognition basis and accounting of income-related government subsidy
A government subsidy other than an asset-related government subsidy is divided into profit-related government subsidies. It is difficult to distinguish between asset-related and revenue-related government subsidies that include both asset-related and revenue-related components. Overall classification as government subvention related to income.Than
asset-related subsidies are recognized as income-related government subsidies. Those, which are used to cover costs or losses in subsequent periods, are recognized as deferred income and accounted to current gain/loss to the periods of related expenses. Those, which are used to makeup expenses or losses already occurred, are recorded to current gain/loss account.
23. Deferred income tax assets/ deferred income tax liabilities
1. Deferred income tax liabilities or assets are recognized at proper rate in the term of retrieving the assets or paying the liabilities according to difference (for not recognized assets and liabilities which tax basis can be recognized, the difference is between the tax basis and the book value) between book value of the assets or liabilities and the tax basis.
2. Deferred income tax assets are recognized limitedly by the income tax which very possibly deduct deductible temporary difference. At balance sheet day, the not-yet recognized deferred income tax assets in previous fiscal term are recognized if have evidence to prove there is enough income tax very possibly to deduct deductible temporary difference.
3. At the balance sheet day, verification will be performed on the book value of differed income tax assets. If it is not possible to obtain enough taxable income to neutralize the benefit of differed income tax assets, then the book value of the differed income tax assets shall be reduced. Whenever obtaining of taxable income became possible, the reduced amount shall be restored.
4. Current income tax and differed income tax are accounted into current gain/loss account as income tax expenditures or gains, but exclude the following income taxes: (1) Merger of enterprises; (2) Transactions or events recognized directly inowners’ equity.
24. Lease
(1)Accounting of operational lease
When the Company is the leasee, the amount is recorded to asset cost or recognized as gain/loss of current period
on straight basis to the periods of lease. Initial direct expenses are accounted into current gain/loss. Contingent
rentals are recorded to current gain/loss at actual occurrence.
When the Company is the leaser, the amount is recorded to current gain/loss at straight basis to the periods of lease. Initial direct expenses are recorded to current gain/loss other than those with greater amount which are capitalized and recorded to gain/loss of different periods. Contingent rentals are recorded to current gain/loss at actual occurrence.
25.Other important accounting policies and accounting estimates
The safety production cost collected by the Company in accordance with the provisions of the Measures for the Administration of the Collection and Use of Enterprise Safety Production Cost (Accounting[2012] No.16) jointly issued by the Ministry of Finance (MOF) and the State Administration of Work Safety (SAWS), shall be included in the costs of the relevant products or the current profit and loss, and also be included in the “special reserve” item. The use of the collection of safety production cost, belonging to the cost of expenditure, should be directly included in the special reserves, that, belonging to the fixed assets, the expenditure incurred through the “construction in progress” item, when the safety project is completed and reaches the usable status, should be identified as fixed assets;Meanwhile, the special reserve is deducted by the costs which compose part of the fixed asset, and accumulative depreciation is recognized at the same amount. This fixed asset is not subject to depreciation in successive periods.
26. Significant accounting policy and changes in accounting estimates
（1）Significant accounting policy changes
1. Since May 28, 2017, the company has implemented the “No. 42 Accounting Standards for Business Enterprises-Non-current assets for Sale, disposal Group, and termination of operation” formulated by the Ministry of Finance, and since June 12, 2017, the company has implemented the revised “No. 16 Accounting Standards for Enterprises-Government Grants”. The change of accounting policy is handled by the future applicable method. 2. The Company implemented the “Notice on the Issuance of the Revised Format of Financial Statements for General Enterprises (Caihui[2017] No. 30)” in the preparation of the 2017 annual statement, so that the gains and losses on the disposal of non-current assets and the gains and losses of non-monetary asset exchange previously stated in "Non-operating income" and "Non-operating expenses" were presented in the “Assets disposal income". This change in accounting policy adopted the retrospective adjustment method, which reduced the 2016 non-operating income by RMB 387,292.53 and increased the asset disposal income by RMB 387,292.53.
（2）Significant accounting estimates change
Not applicable
VI. Taxation
1. Main categories and rates of taxes
||||
|-|-|-|
|Category of taxes|Tax base|Tax rate|
|VAT|Sales of goods or providing of taxable labor service|17%|
|City maintenance and|||
||Turnover tax payable|5%、7%|
|construction tax|||
|Enterprise income tax|Amount of income taxable|15%、25%|
|Educational surcharge|Turnover tax payable||
|||3%|

||||
|-|-|-|
|Local education additional|Turnover tax payable||
|||2%|
||For those on price basis, taxes are paid at 1.2% of the balance of||
|House tax|original value of the property after deducting of 30%; for those on|1.2%、12%|
||rental basis, taxes are paid at 12% of the rental.||

Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
|||
|-|-|
|Name|Income tax rate|
|The Company , Zhongneng Company, Packaged Tech. Company,Casting||
|Company, Zhejiang Huayuan Steam Turbine Machinery Co.,Ltd. and|15%|
|Hangzhou Guoneng Steam Turbine Engineering Co.,Ltd.||
||Hangzhou Zhongneng Steam Turbine Power|
||(Indonesia) Co., Ltd. registered in Indonesia|
|Hangzhou Zhongneng Steam Turbine Power (Indonesia) Co., Ltd.|(Indonesia)|
||overseas subsidiaries, the applicable local relevant|
||overseas subsidiaries, the applicable local relevant|
||tax laws and regulations|
|Other Subsidiary（Domestic）|25%|

2. Preferential tax
1. According to the document “Notice for Qualification of High-tech Enterprises”(GKHZD〔2017〕No.201) issued by Department of Science and Technology High-tech Development Center, the Company along with Hangzhou Zhongneng Steam Turbine Power Co., Ltd. ,Zhejiang Packaged Technologies Development Co., Ltd., Zhejiang Huayuan Steam Turbine Machinery Co.,Ltd. and Hangzhou Guoneng Steam Turbine Engineering Co.,Ltd.– subsidies of the Company, were qualified as high-tech enterprises for term of three years. Therefore they enjoy15% of tax for 2017.
2. According to the document “Notice for Qualification of High-tech Enterprises”(GKHZD〔2016〕No.149) issued by Department of Science and Technology High-tech Development Center, Hangzhou Steam Turbine Casting Co.,Ltd– subsidies of the Company, were qualified as high-tech enterprises for term of three years. Therefore they enjoy15% of tax for 2017.
VII. Notes to the Consolidated Financial Statements
1.Monetary Capital
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Cash in stock|208,763.32|326,226.09|
|Bank deposit|1,137,284,071.51|830,910,758.76|
|Other monetary fund|85,184,661.11|63,800,574.49|
|Total|1,222,677,495.94|895,037,559.34|
|Incl:Total of accounts saved overseas|3,770,731.56|4,796,746.67|

Othernotes：
Other monetary fund composes of RMB74,446,322.46 of security for bank acceptance notes RMB3,860,724.80 of
security for Letter of credit, RMB6,877,613.85 of security for bank guarantee letter. Both under limitation of using.
2. Bills receivable
(1) Notes receivable listed by category
In RMB
||||
|-|-|-|
||End of term|Beginning of term|
|Items|||
|Bank acceptance|691,199,387.68|424,613,558.62|
|Commercial acceptance|24,211,500.00|55,102,763.00|
|Total|715,410,887.68|479,716,321.62|

 (2) Notes receivable pledged by the Company at the period-end
In RMB
|||
|-|-|
|Items|Amount on pledge|
|Bank acceptance|40,000,000.00|
|Total|40,000,000.00|

（3）Notes receivable which had endorsed by the Company or had discounted and had not due on the balance sheet date at the period-end
In RMB
||||
|-|-|-|
||Amount of recognition termination at the|Amount of not terminated recognition at|
|Items|||
||period-end|the preriod -end|
|Bank acceptance|490,980,239.67||
|Total|490,980,239.67||

（4）Bills
transferred to accounts receivable because drawer of the Bills fails to execute the contract or agreement, and undue Bills endorsed to other parties at the end of the period.
In RMB
|||
|-|-|
|Items|End of the period amounts derecognizing|
|Trade acceptance|3,200,000.00|
|Total|3,200,000.00|

3. Account receivable
（1）Detailed categories
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||End of term|||||Beginning of term|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|||||||||||
||||||Book value|||||Book value|
||Amount|Proportion|Amount|Proportion||Amount|Proportion|Amount|Proportion||
|Account receivables|||||||||||
|provided bad debt|||||||||||
||2,695,568,129.24|98.91%|1,000,350,680.78|37.11%|1,695,217,448.46|2,812,043,945.50|98.95%|941,870,597.18|33.49%|1,870,173,348.32|
|provision in credit|||||||||||
|risk groups|||||||||||
|Accounts receivable|||||||||||
|of individually|||||||||||
|withdrawing bad|||||||||||
||29,819,607.69|1.09%|29,819,607.69|100.00%||29,819,607.69|1.05%|29,819,607.69|100.00%||
|debt provision with|||||||||||
|non-significant|||||||||||
|individual amount|||||||||||
|Total|2,725,387,736.93|100.00%|1,030,170,288.47|37.80%|1,695,217,448.46|2,841,863,553.19|100.00%|971,690,204.87|34.19%|1,870,173,348.32|

 Receivable accounts with large amount individually and bad debt provisions were provided
Not applicable
Receivable accounts in the group on which bad debt provisions are provided on age basis
√ Applicable□Not applicable
In RMB
|||||
|-|-|-|-|
||End of term|||
|Age||||
||Book balance|Bad debt provision|Proportion|
|Subitem Within 1 year||||
|Subtotal within 1 year|819,351,925.82|40,967,596.30|5.00%|
|1-2 years|537,175,692.05|53,717,569.20|10.00%|
|2-3 years|359,554,782.76|107,866,434.84|30.00%|
|Over 3 years|979,485,728.61|797,799,080.44||
|3-4 years|322,567,118.79|193,540,271.27|60.00%|
|4-5 years|263,299,003.24|210,639,202.59|80.00%|
|Over 5 years|393,619,606.58|393,619,606.58|100.00%|
|Total|2,695,568,129.24|1,000,350,680.78|37.11%|

 In the groups, accounts receivable adopting balance percentage method to withdraw bad debtprovision： Not applicable
In the groups, accounts receivable adopting other methods to accrue bad debtprovision:：
（2）Accrual period, recovery or reversal of bad debts situation
The current amount of provision for bad debts is RMB68,484,778.81 ; recovery or payback for bad debts Amount is RMB0.00.
(3)The current accounts receivable write-offs situation
In RMB
|||
|-|-|
|Items|Amount|
|Uncollectible amount|10,004,695.21|

Of which the significant actual write-off accounts receivable:
In RMB
|||||||
|-|-|-|-|-|-|
||||||Arising from|
||Nature of|||||
||||Reason for||related|
|Name|account|Amount written off||Verification procedures||
||||written off||transactions|
||receivable|||||
||||||(Y/N)|
||||Uncollectible|The examined and adopted to||
|Shenyang Touping Mechanical Co., Ltd.|Goods|3,301,440.00|||No|
||||amount|Board of directors||
||||Uncollectible|The examined and adopted to||
|China Air Separation Engineering Co., Ltd.|Goods|1,674,643.00|||No|
||||amount|Board of directors||
|Huaneng Energy saving Powergeneration Co.,|Goods|760,000.00|Uncollectible|The examined and adopted to|No|

|||||||
|-|-|-|-|-|-|
|Ltd.|||amount|Board of directors||
|China Metallurgical Sadie Engineering &|||Uncollectible|The examined and adopted to||
||Goods|758,160.00|||No|
|Technology Co., Ltd.|||amount|Board of directors||
|Hebei Iron and Steel Group Yanshan Iron and|||Uncollectible|The examined and adopted to||
||Goods|623,280.00|||No|
|Steel Co., Ltd.|||amount|Board of directors||
||||Uncollectible|The examined and adopted to||
|Nei Monggol Runbang Biotechnology Co., Ltd.|Goods|620,000.00|||No|
||||amount|Board of directors||
||||Uncollectible|The examined and adopted to||
|Other|Goods|2,267,172.21|||No|
||||amount|Board of directors||
|Total|--|10,004,695.21|--|--|--|

（4）Receivables account of the top five parties
|||||
|-|-|-|-|
|Name|Amount|Proportion(%)|Bad debt provision|
|Client 1|644,733,586.92|23.66|316,242,613.17|
|Client 2|280,098,730.82|10.28|191,312,225.82|
|Client 3|60,048,003.87|2.20|12,214,467.99|
|Client 4|46,363,500.00|1.70|2,318,175.00|
|Client 5|43,680,000.00|1.60|2,184,000.00|
|Subtotal|1,074,923,821.61|39.44|524,271,481.98|

 4. Prepayments
（1）Age analysis
In RMB
||||||
|-|-|-|-|-|
||Balance in year-end||Balance in year-begin||
|Age|||||
||Book balance|Proportion(%)|Book balance|Proportion(%)|
|Within 1 year|414,480,174.64|92.90%|169,302,923.28|83.74%|
|1-2 years|10,312,288.25|2.31%|10,874,142.27|5.38%|
|2-3 years|4,033,538.38|0.90%|17,195,603.48|8.50%|
|Over 3 years|17,340,709.50|3.89%|4,812,189.80|2.38%|
|Total|446,166,710.77|--|202,184,858.83|--|

(2) Top 5 of the closing balance of the prepayment colleted according to the prepayment target
||||
|-|-|-|
|Name|Amount|Proportion(%)|

||||
|-|-|-|
|Xingji Aosen Iron & Steel Co., Ltd.|141,645,000.00|31.75|
|Hangzhou Hangfa Power generation Equipment Co., ltd.|43,741,785.00|9.80|
|Jinling International Co., Ltd.|34,540,113.23|7.74|
|Siemens Industrial Turbomachinery AB|23,853,360.13|5.35|
|Yizheng Haitian Aluminum co., Ltd.|12,566,426.27|2.82|
|Subtotal|256,346,684.63|57.46|

 5.Dividend receivable
（1）Dividend receivabl
In RMB
||||
|-|-|-|
|Items|Balance in year-end|Balance in year-begin|
|Hangzhou Bank|6,900,000.00||
|Total|6,900,000.00||

6. Other account receivable
1) Detailed categories
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||End of term|||||Beginning of term|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|||||||||||
|||||Proportion|Book value||Proportion|||Book value|
||Amount|Proportion %|Amount|||Amount||Amount|Proportion %||
|||||%|||%||||
|Other Accounts|||||||||||
|receivable portfolio|||||||||||
||28,165,573.86|100.00%|11,260,568.29|39.98%|16,905,005.57|42,152,338.08|100.00%|11,127,630.36|26.40%|31,024,707.72|
|subject to impairment|||||||||||
|by credit risk|||||||||||
|Total|28,165,573.86|100.00%|11,260,568.29|39.98%|16,905,005.57|42,152,338.08|100.00%|11,127,630.36|26.40%|31,024,707.72|

 Other Receivable accounts with large amount individually and bad debt provisions were provided
Not applicable
Other receivable accounts in the group on which bad debt provisions are provided on age basis
In RMB
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Other receivable|Bad debt provision|Proportion|
|Subitem within 1 year||||
|Subtotal within 1 year|10,792,930.67|539,646.56|5.00%|
|1-2 years|2,584,741.62|258,474.15|10.00%|
|2-3 years|3,363,340.73|1,009,002.22|30.00%|
|Over 3 years|11,424,560.84|9,453,445.36||
|3-4 years|2,947,427.90|1,768,456.74|60.00%|

|||||
|-|-|-|-|
|4-5 years|3,960,721.60|3,168,577.28|80.00%|
|Over 5 years||||
||4,516,411.34|4,516,411.34|100.00%|
|Total||||
||28,165,573.86|11,260,568.29|39.98%|

Other receivable account in Group on which bad debt provisions were provided on percentagebasis：
Not applicable
Other Receivable accounts on which bad debt provisions are provided by other ways in theportfolio：
Not applicable
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision during the reporting period was ofRMB136,024.61；the amount of the reversed or collected part during the reporting period was of RMB 0.00.
(3)The current accounts receivable write-offs situation
|||
|-|-|
|Items|Amount|
|Deposit|3,000.00|

(4)Other accounts receivable classified by the nature of accounts
In RMB
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Export tax refund receivable|465,230.69|13,234,170.89|
|Deposit|16,917,313.03|19,810,421.19|
|Provisional payment receivalbe|5,232,037.20|4,957,646.21|
|Petty cash|2,803,540.63|1,156,796.99|
|Other|2,747,452.31|2,993,302.80|
|Total|28,165,573.86|42,152,338.08|

（4）Top 5 of the closing balance of Other accounts receivable collated according to the arrears party
In RMB
|||||||
|-|-|-|-|-|-|
|||||Percentage in total other|Bad debt|
|Name of the company|Account property|Book balance|Age|||
|||||receivable %|provision|
|Shanghai Customs Waigaoqiao Office|Deposit|3,710,320.94|Over 5 years|13.17%|3,710,320.94|
|Investment from Indonesia Company||||||
||Investment|3,267,100.00|4-5 years|11.60%|2,613,680.00|
|receivable||||||
|Guoxin Bidding Group Co.,Ltd.|Bidding deposit|800,000.00|2-3 years|2.84%|240,000.00|
|Guodian Trust Bidding Co., Ltd.|Deposit|800,000.00|Within 1 year|2.84%|40,000.00|
|Shanghai Pujiang customs|Deposit|767,197.78|Within 1 year|2.72%|38,359.89|
|Total|--|9,344,618.72|--|33.17%|6,642,360.83|

 7. Inventories
Whether the company needs to comply with the disclosure requirements of the particular industry
No
(1) Details
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of term|||Beginning of term|||
|Items|||||||
|||Impairment|||Impairment||
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||
|Raw|||||||
||522,590,238.59|309,803.19|522,280,435.40|568,639,726.41|309,803.19|568,329,923.22|
|materials|||||||
|Product in|||||||
||584,647,307.67|15,617,324.99|569,029,982.68|400,195,046.11|10,345,866.48|389,849,179.63|
|process|||||||
|Products in|||||||
||1,098,811,798.77|97,546,524.93|1,001,265,273.84|998,661,308.19|55,296,052.78|943,365,255.41|
|stock|||||||
|Total|2,206,049,345.03|113,473,653.11|2,092,575,691.92|1,967,496,080.71|65,951,722.45|1,901,544,358.26|

 Whether the company is required to comply with the "Shenzhen Stock Exchange Industry Information Disclosure Guidelines No. 4 - listed companies engaged in seed industry, planting business" disclosure requirements
No
(2) Inventory depreciation provision
In RMB
||||||||
|-|-|-|-|-|-|-|
|||Increased this period||Decreased this period|||
|Items|Beginning of term|||||End of term|
|||Provided|Others|Written back or off|Others||
|Raw materials|309,803.19|309,803.19||||309,803.19|
|Product in|||||||
||10,345,866.48|11,731,845.24||6,460,386.73||15,617,324.99|
|process|||||||
|Products in|||||||
||55,296,052.78|54,280,951.14||12,030,478.99||97,546,524.93|
|stock|||||||
|Total|65,951,722.45|66,012,796.38||18,490,865.72||113,473,653.11|

 The specific basis for determining the net realizable value, and the reasons for the reversal of the inventory depreciation reserve for the current period
At the end of the period, for the finished products which are directly to be sold and the raw materials that need further process, the estimated selling price of the finished products after the completion of the production reduces the expected cost incurring at the time of completion, the estimated selling expenses and the relevant taxes and fees, which determines the amount of net realizable value. According to the balance between the net realizable value and the cost of single inventory, the inventory depreciation reserve is extracted. The reduction of the inventory depreciation reserve for the current period is RMB 18,490,865.72, which is the provision for the inventory depreciation reserve due to the use or sale of inventory.
（3）Statement of the capitalized amount of the borrowing costs included in the end of the inventory balance Nil
8. Other current asset
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Bank financing products[Notes]|886,732,329.00|853,767,338.00|

||||
|-|-|-|
|Input tax deductible|||
||16,473,990.55|6,410,137.62|
|To verify the input tax|261,538.46|995,153.86|
|Prepaid income tax|354,357.59|1,845,850.11|
|Rent charge|604,050.19||
|Total|904,426,265.79|863,018,479.59|

 Othernotes：
[Note]: Financial products are financial products and trust financial products, are in non-guaranteed
floating-income short-term (or short-term redeemable) financial products, and no active market price.
9 Sellable financial asset
(1) Details
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of term|||Beginning of term|||
|Items||Impairmentprovision|||Impairment||
||Book balance||Book value|Book balance||Book value|
||||||provision||
|Available-for-sale equity|||||||
||2,417,780,984.08||2,417,780,984.08|3,060,865,862.60||3,060,865,862.60|
|instruments|||||||
|Measured by fair value|2,239,086,521.28||2,239,086,521.28|2,906,013,048.00||2,906,013,048.00|
|Measured by cost|178,694,462.80||178,694,462.80|154,852,814.60||154,852,814.60|
|Total|2,417,780,984.08||2,417,780,984.08|3,060,865,862.60||3,060,865,862.60|

 (2) Available-for-sale financial assets measured by vair value at the period-end
In RMB
|||||
|-|-|-|-|
|Type|Available-for-sale equity instruments|Available-for –sale||
||||Total|
|||Liabilities instruments||
|Fair value|2,239,086,521.28||2,239,086,521.28|

(3)Available-for-sale financial assets measured by cost at the period-end
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Book balance||||Impairment provision||||||
|Investee|||||Period-b||||Proportion %|Cash dividend|
||Period-begin|Increase|Decrease|Period-end||Increase|Decrease|Period-end|||
||||||egin||||||
|Hangzhou Changdi|||||||||||
|Equity Investment|||||||||||
||48,558,351.80||48,558,351.80||||||||
|Partnership(Limited|||||||||||
|liability)|||||||||||
|Hangzhou Jushi|||||||||||
|Investment|||||||||||
||30,000,000.00|100,000,000.00|30,000,000.00|100,000,000.00|||||32.26%|9,810,990.23|
|Partnership（Limited|||||||||||
|partnership）|||||||||||
|Hangzhou Steam|||||||||||
|Turbine Engineering|30,000,000.00|||30,000,000.00|||||15.00%||
|Co., Ltd.|||||||||||
|Wuxi Xinchang Steel|||||||||||
||15,159,689.58|||15,159,689.58|||||18.00%||
|Bube Co., ltd.|||||||||||
|Zhejiang Zhongkong|||||||||||
|Solar Energy|15,000,000.00|||15,000,000.00|||||3.84%||
|Technology Co., Ltd.|||||||||||
|Zhejiang Tianhang|||||||||||
|Steam Turbine|||||||||||
||10,000,000.00|||10,000,000.00|||||33.33%|1,000,000.00|
|Auxiliary Machinery|||||||||||
|Co., Ltd.|||||||||||
|Greenesolpower|||||||||||
||5,534,773.22|||5,534,773.22|||||37.00%|1,590,356.24|
|systems PVT Ltd.|||||||||||

||||||||
|-|-|-|-|-|-|-|
|Zhejiang Hangzhou|||||||
|Steam Turbine Gas|||||||
|||2,400,000.00||2,400,000.00|48.00%||
|turbine machinery|||||||
|innovation center|||||||
|Zhejiang Sanxin|||||||
|AUTOMATION|600,000.00|||600,000.00|6.00%||
|Engineering Co., ltd.|||||||
|Total|154,852,814.60|102,400,000.00|78,558,351.80|178,694,462.80|--|12,401,346.47|

 Other notes:
The company, as an investor, does not have the power to participate in the decision-making of financial and operational policies of the invested units including Hangzhou Jushi Investment Partnership (Limited Partnership), Zhejiang Tianhang Steam Turbine Auxiliary Machinery Co., Ltd, Greenesol power systems PVT Ltd. Therefore, the cost method is used to make the accounting treatment on this kind of equity investment, with in accordance with the criteria for the recognition and measurement of financial instruments.
10. Long-term equity investments
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Increase /decrease||||||||||
|||||Investment||||||||
|||Additiona||gains and|Adjustment of||Cash bonus|Withdrawal||||
||Opening||Decrease|||||||Closing|Closing balance of impairment|
|Investees||l||losses|other|Changes of other|or profits|of||||
||balance||investmen||||||Other|balance|provision|
|||investmen||recognized|comprehensiv|equity|announced to|impairment||||
||||t|||||||||
|||t||under the|e income||issue|provision||||
|||||equity method||||||||
|I. Joint venture||||||||||||
|2. Affiliated Company||||||||||||
|Zhejiang|||5,800,000|||||||||
|||||||||||5,800,000.00||
|Zhongrun Gas|||.00|||||||||

||||
|-|-|-|
|turbine|||
|technology|||
|Co., Ltd.|||
||5,800,000||
|Subtotal||5,800,000.00|
||.00||
||5,800,000||
|Total||5,800,000.00|
||.00||

11. Fixed assets
(1) Details
In RMB
|||||||
|-|-|-|-|-|-|
||||Transportation|||
|Items|Houses & buildings|Machinery equipment||Office equipment|Total|
||||equipment|||
|I. Original price||||||
|1. Balance at||||||
||446,446,798.60|998,376,141.69|29,547,916.82|96,654,801.28|1,571,025,658.39|
|period-beginning||||||
|2.Increase in the current||||||
||17,550,203.26|21,156,629.93|807,058.66|2,808,557.83|42,322,449.68|
|period||||||
|(1) Purchase||937,406.53|576,555.80|1,257,414.12|2,771,376.45|
|（ 2 ）||||||
|Transferred from construct|17,550,203.26|20,219,223.40|230,502.86|1,551,143.71|39,551,073.23|
|ion in progress||||||
|(3)Increased of||||||
|Enterprise Combination||||||
|3.Decreased amount of the||||||
|||16,831,238.90|1,699,402.00|1,140,893.23|19,671,534.13|
|period||||||
|（1）Dispose||15,546,510.00|1,699,402.00|975,491.78|18,221,403.78|
|（2）Other decrease||1,284,728.90||165,401.45|1,450,130.35|
|4. Balance at period-end|463,997,001.86|1,002,701,532.72|28,655,573.48|98,322,465.88|1,593,676,573.94|
|II.Accumulated||||||
|amortization||||||
|1.Opening balance|176,390,042.92|672,647,889.34|20,536,349.06|78,877,295.49|948,451,576.81|
|2.Increased amount ofthe||||||
||14,488,022.18|55,469,475.82|1,830,809.30|4,767,231.67|76,555,538.97|
|period||||||
|(1) Withdrawal|14,488,022.18|55,469,475.82|1,830,809.30|4,767,231.67|76,555,538.97|
|3.Decrease in the reporting||||||
|||2,286,591.62|1,449,615.54|957,243.45|4,693,450.61|
|period||||||
|（1）Disposal||2,059,929.00|1,449,615.54|898,179.91|4,407,724.45|
|（2）Other decrease||226,662.62||59,063.54|285,726.16|
|4.Closing balance|190,878,065.10|725,830,773.54|20,917,542.82|82,687,283.71|1,020,313,665.17|
|III. Impairment provision||||||
|1.Opening balance|1,504,928.24|4,033,520.42||1,113,523.01|6,651,971.67|
|2.Increase in the reporting||||||
|period||||||

|||||||
|-|-|-|-|-|-|
|（1）Withdrawl||||||
|3.Decrease the reporting||||||
|period||||||
|（1）Disposal||||||
|4. Closing balance|1,504,928.24|4,033,520.42||1,113,523.01|6,651,971.67|
|IV. Book value||||||
|1.Book value ofthe||||||
||271,614,008.52|272,837,238.76|7,738,030.66|14,521,659.16|566,710,937.10|
|period-end||||||
|2.Book value of the||||||
||268,551,827.44|321,694,731.93|9,011,567.76|16,663,982.78|615,922,109.91|
|period-begin||||||

12. Construction in process
（1）Details
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of term|||Beginning of term|||
|Items||Impairment|||Impairment||
||Boook balance||Book value|Boook balance||Book value|
|||provision|||provision||
|Construction in process of|||||||
||151,569,540.89||151,569,540.89|94,170,909.99||94,170,909.99|
|parent Company|||||||
|Tangxi Workshop PhaseII,|||||||
||1,662,571.56||1,662,571.56|14,699,709.48||14,699,709.48|
|Gouneng Company|||||||
|Project of steam turbine heavy|||||||
||99,071,621.77||99,071,621.77|32,654,575.18||32,654,575.18|
|industry|||||||
|Casting companies to clean up|||||||
|||||5,011,998.64||5,011,998.64|
|cross project|||||||
|Casting company networking|||||||
||1,213,675.18||1,213,675.18|1,517,473.06||1,517,473.06|
|system project|||||||
|other project|3,285,135.25||3,285,135.25|1,547,268.67||1,547,268.67|
|Prepayment for equipment or|||||||
||781,687.00||781,687.00|4,141,954.39||4,141,954.39|
|projects|||||||
|Total|255,921,660.09||255,921,660.09|153,743,889.41||153,743,889.41|

(2) Changes of significant construction in progress
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||Includin|||
|||||||||||g:|||
||||||||||||Capitaliz|Source|
|||||||||Project|Capitaliz|capitaliz|||
|||||Transferred to|||||||ation of|of|
|Name of project|Budget|Opening balance|Increase||Other decrease|End balance|Proportion %|proces|ation of|ation of|||
|||||fixed assets|||||||interest|fundin|
|||||||||s|interest|interest|||
||||||||||||rate (%)|g|
|||||||||||this|||
|||||||||||period|||
|||||||||Under|||||
|Construction in process of|||||||||||||
||19,237.54|83,608,096.30|67,961,444.59|||151,569,540.89|78.79%|Constr||||Other|
|parent Company|||||||||||||
|||||||||uction|||||
|Completed project of parent|||||||||||||
|||||||||Compl|||||
||1,261.92|10,562,813.69|2,056,403.18|12,619,216.87|||100.00%|||||Other|
|Company||||||||eted|||||
|Tangxi Workshop PhaseII,|||||||100.00%||||||
|||||||||Compl|||||
||1,690.55|14,699,709.48|2,205,802.60|16,905,512.08||||||||Other|
|Gouneng Company||||||||eted|||||
|Project of steam turbine heavy||||||||Under|||||
||179,410.00|32,654,575.18|66,417,046.59|||99,071,621.77|5.52%|Constr|1,904,690.41|1,904,690.41|1.20%|Other|
|industry|||||||||||||
|||||||||uction|||||
|Casting companies to clean up|||||||||||||
|||||||||Compl|||||
||616.22|5,011,998.64|1,150,173.65|6,162,172.29|||100.00%|||||Other|
|cross project||||||||eted|||||
|Casting company networking|||||||||||||
|||||||||Compl|||||
||158.87|1,517,473.06|71,196.58||1,588,669.64||100.00%|||||Other|
|system project I||||||||eted|||||
|||||||||Under|||||
|Casting company networking|||||||||||||
||241.13||1,213,675.18|||1,213,675.18|50.33%|Constr||||Other|
|system project II|||||||||||||
|||||||||uction|||||

|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Under||||
|other project||1,547,268.67|4,884,848.571|3,146,981.99||3,285,135.25||Constr|||Other|
|||||||||uction||||
|Prepayment for equipment or||||||||Under||||
|||4,141,954.39|1,506,687.00|717,190.00|4,149,764.39|781,687.00||Constr|||Other|
|projects||||||||||||
|||||||||uction||||
|Total|202,616.23|153,743,889.41|147,467,277.94|39,551,073.23|5,738,434.03|255,921,660.09|--|--|1,904,690.41|1,904,690.41|--|

13 Intangible assets
（1）Details
In RMB
|||||||
|-|-|-|-|-|-|
||||Non patent|||
|Items|Landusing right|Patent||Software|Total|
||||technology|||
|I. Original price||||||
|1. Balance at||309,433.96|8,000,000.00|||
||332,298,312.33|||228,376.07|340,836,122.36|
|period-beginning||||||
|2.Increase in the current||||||
|||||1,750,966.04|1,750,966.04|
|period||||||
|(1) Purchase||||162,296.40|162,296.40|
|(2)Internal Development||||||
|(3)Increased of||||||
|Enterprise Combination||||||
|（ 4 ）||||||
|Transferred from constru||||1,588,669.64|1,588,669.64|
|ction in progress||||||
|3.Decreased amount of|||8,000,000.00|||
||||||8,000,000.00|
|the period||||||
|（1）Disposal||||||
|（2）Other decrease|||8,000,000.00||8,000,000.00|
|4.Closing balance|332,298,312.33|309,433.96||1,979,342.11|334,587,088.40|
|II.Accumulated||||||
|amortization||||||
|1.Opening balance|41,782,089.97|214,000.00|1,266,666.71|167,931.60|43,430,688.28|
|2.Increased amount of||28,000.00|800,000.04|||
||6,662,865.37|||61,562.91|7,552,428.32|
|the period||||||
|(1) Withdrawal|6,662,865.37|28,000.00|800,000.04|61,562.91|7,552,428.32|
|3.Decreased amount of|||2,066,666.75|||
||||||2,066,666.75|
|the period||||||
|（1）Disposal||||||
|（2）Other decrease|||2,066,666.75||2,066,666.75|
|4.Closing balance|48,444,955.34|242,000.00||229,494.51|48,916,449.85|
|III. Impairment||||||
|provision||||||

|||||||
|-|-|-|-|-|-|
|1.Opening balance||||||
|2.Increased amount of||||||
|the period||||||
|(1) Withdrawal||||||
|3.Decreased amount of||||||
|the period||||||
|（1）Disposal||||||
|4.Closing balance||||||
|IV. Book value||||||
|1.Closing book||67,433.96||||
||283,853,356.99|||1,749,847.60|285,670,638.55|
|value||||||
|2.Opening book||95,433.96|6,733,333.29|||
||290,516,222.36|||60,444.47|297,405,434.08|
|value||||||

14 Long-term amortize expenses
In RMB
|||||||
|-|-|-|-|-|-|
||||Amortized expenses|||
|Items|Balance in|Increase in this||Other loss|Balance in year-end|
||year-begin|period||||
|Redecoration|1,306,880.81||524,300.42|528,693.49|253,886.90|
|Afforestation fees|124,088.00||124,088.00|||
|Total|1,430,968.81||648,388.42|528,693.49|253,886.90|

 Other notes
Note: For RMB 528,693.49 of the long-term unamortized expenses transferred out at the end of period for no longer being consolidated with Zhejiang Zhongrun Gas Turbine Technology Co., Ltd.
15. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets had not been off-set
In RMB
||||||
|-|-|-|-|-|
||Balance in year-end||Balance in year-begin||
|Items|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|assets|difference|assets|
|Provision for Asset Impairment|1,160,614,665.91|179,875,205.01|1,053,944,950.81|164,268,265.49|
|Internal trade profit not realized|68,494,522.27|10,934,321.24|58,099,229.91|9,500,467.96|
|Deductible loss|46,151,636.66|6,922,745.50|30,002,132.26|4,500,319.84|
|Temporary difference such as|2,981,985.19|447,297.78|3,751,710.39|562,756.56|

||||||
|-|-|-|-|-|
|amortizing of software expense|||||
|Total|1,278,242,810.03|198,179,569.53|1,145,798,023.37|178,831,809.85|

 (2) Deferred income tax liabilities had not been off-set
In RMB
||||||
|-|-|-|-|-|
||Balance in year-end||Balance in year-begin||
|Items|||||
||Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|liabilities|difference|liabilities|
|Changes in fair value of|||||
||1,848,132,481.28|277,219,872.19|2,515,059,008.00|377,258,851.20|
|tradable financial assets|||||
|Accumulated depreciation|6,651,971.67|997,795.75|6,651,971.67|997,795.75|
|Total|1,854,784,452.95|278,217,667.94|2,521,710,979.67|378,256,646.95|

（3）Deferred income tax assets and liabilities are presented as net amount after neutralization
In RMB
||||||
|-|-|-|-|-|
||||Deferred Income Tax||
||Deferred Income Tax|Temporarily Deductable or||Temporarily Deductable or|
||||Assets or Liabilities at the||
|Items|Assets or Liabilities at the|Taxable Difference at the End||Taxable Difference at the|
||||Beginning of Report||
||End of Report Period|of Report Period||Beginning of Report Period|
||||Period||
|Deferred income tax||198,179,569.53||178,831,809.85|
|assets|||||
|Deferred income tax||278,217,667.94||378,256,646.95|
|liabilities|||||

(4)Details of income tax assets not recognized
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Deductible provisional differences|941,815.63|1,476,578.54|
|Deductible losses|9,998,963.52|12,315,626.29|
|Subtotal|10,940,779.15|13,792,204.83|

 (5) The un-recognized deductible losses of deferred income tax assets will due in the following years:
In RMB
|||||
|-|-|-|-|
|Year|End of term|Beginning of term|Remark|
|2018||684,308.39||
|2019||1,037,052.28||

|||||
|-|-|-|-|
|2020|579,693.92|3,113,580.77||
|2021|712,938.27|7,480,684.85||
|2022|8,706,331.33|||
|Total|9,998,963.52|12,315,626.29|--|

16.Short-term loans
（1）Category of short-term loans
In RMB
||||
|-|-|-|
|Items|Balance in year-end|Balance in year-begin|
|Mortgage loan|96,500,000.00|73,000,000.00|
|Guarantee loan|19,000,000.00|100,000,000.00|
|Total|115,500,000.00|173,000,000.00|

 17.Bill payable
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Bank acceptance|215,409,958.92|143,007,715.10|
|Total|215,409,958.92|143,007,715.10|

 18. Account payable
（1）Category of Account payable
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Goods|860,669,728.38|832,264,375.15|
|Equipment and projects|22,045,737.27|21,188,214.36|
|Total|882,715,465.65|853,452,589.51|

 19. Advances received
（1）Category of Advances received
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Goods|2,419,751,405.08|1,827,959,793.62|
|Total|2,419,751,405.08|1,827,959,793.62|

 20.Employees’ wage payable
(1) Details
In RMB
||||||
|-|-|-|-|-|
|Items|Beginning of term|Increased this period|Decreased this period|End of term|
|I. Short-term wages|48,273,561.62|610,078,774.60|601,486,185.66|56,866,150.56|
|II. Welfare after leaving of position-fixed|||||
||22,951,072.41|73,306,169.30|73,597,618.58|22,659,623.13|
|provision scheme|||||
|III.Termination benefits||115,910.73|115,910.73||
|Total|71,224,634.03|683,500,854.63|675,199,714.97|79,525,773.69|

 (2) Details of short term wages
In RMB
||||||
|-|-|-|-|-|
|Items|Beginning of term|Increased this period|Decreased this period|End of term|
|1.Wage, bonus, allowance and subsidies|35,531,106.94|473,188,038.39|465,004,954.59|43,714,190.74|
|2. Employee welfare||32,560,347.49|32,560,347.49||
|3. Social insurance|5,862,944.64|44,181,817.42|44,126,775.93|5,917,986.13|
|Incl. Medical insurance|5,423,894.94|38,852,729.35|38,770,773.50|5,505,850.79|
|Labor injury insurance|124,073.45|1,622,988.68|1,624,351.73|122,710.40|
|Maternity insurance|314,976.25|3,706,099.39|3,731,650.70|289,424.94|
|4. Housing fund|109,020.96|46,188,710.00|46,183,981.00|113,749.96|
|5. Labour union fee and employee|||||
||6,770,489.08|13,959,861.30|13,610,126.65|7,120,223.73|
|education fee|||||
|Total|48,273,561.62|610,078,774.60|601,486,185.66|56,866,150.56|

 (3) Details of fixed provision scheme
In RMB
||||||
|-|-|-|-|-|
|Items|Beginning of term|Increased this period|Decreased this period|End of term|
|1.Basic pension|||||
||4,430,334.68|52,193,407.26|52,638,210.18|3,985,531.76|
|insurance|||||
|2. Unemployment|||||
||314,118.76|2,416,111.33|2,589,786.17|140,443.92|
|insurance|||||
|3. Enterprise annual fee|18,206,618.97|18,696,650.71|18,369,622.23|18,533,647.45|
|Total|22,951,072.41|73,306,169.30|73,597,618.58|22,659,623.13|

 21. Tax Payable
In RMB
||||
|-|-|-|
|Items|Balance in year-end|Balance in year-begin|
|VAT|10,970,877.80|59,676,617.21|
|Enterprise Income tax|||
||14,396,733.29|16,338,759.59|
|Individual Income tax|2,150,480.36|2,035,807.07|
|City Construction tax|1,731,728.51|4,224,180.62|
|Property tax|2,123,319.46||

||||
|-|-|-|
|Land use tax|2,099,991.11|3,112,763.00|
|Education subjoin|745,239.69|1,822,362.43|
|Locality Education subjoin|496,821.48|1,202,457.87|
|Local water source foundation|172.38|1,767,814.88|
|Other|204,709.29|58,910.49|
|Total|34,920,073.37|90,239,673.16|

 22. Interest payable
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Long term interest on borrowings due in installments|121,172.22|41,750.63|
|Interest on short-term borrowings|147,688.55|92,625.69|
|Total|268,860.77|134,376.32|

 23.Other account payable
(1) Details
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Deposite|3,029,922.35|3,607,868.79|
|Provisional account payable|21,345,148.72|23,344,791.25|
|Other|3,484,546.26|3,868,320.76|
|Total|27,859,617.33|30,820,980.80|

 24. Non-current liabilities due within 1 year
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Long-term loans due within 1 year|4,900,000.00|18,500,000.00|
|Total|4,900,000.00|18,500,000.00|

 25.. Long-term loan
(1) Details
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Mortgage loan||4,900,000.00|
|Guarantee loan|100,000,000.00||

||||
|-|-|-|
|Total|100,000,000.00|4,900,000.00|

 26..Long term account payable
(1) Details
In RMN
||||
|-|-|-|
|Items|End of term|Beginning of term|
|CDB investment fund|208,000,000.00|208,000,000.00|
|Income payable of CDB|1,303,466.66|27,733.33|
|Drawing in administrative restructuring|330,000.00|330,000.00|
|Total|209,633,466.66|208,357,733.33|

 Othernotes：
According to the relevant agreement of the National Development Fund Investment Contract (hereinafter referred to as the Investment Contract) jointly signed by the Company, National Development Fund Co., Ltd. (hereinafter referred to as the NDF), Hangzhou Steam Turbine Industry Co., Ltd. and Hangzhou Steam Turbine Group, the NDF invested RMB 208,000,000.00 in Hangzhou Steam Turbine Industry Co., Ltd., the subsidiary, The NDF obtains1.2% of the proceeds through dividends or repurchasing premium each year for the above investment; under the investment contract, Hangzhou Steam Turbine Group will transfer its shares of Steam Turbine Industry Co., Ltd from 2019 to the NDF by installment. Hangzhou Steam Turbine Industry Co., Ltd has received the above investment on December 27, 2016, according to the agreement of the investment contract on the relevant investment returns, The Company reports it as a long-term payables,the current accrued income is RMB2,496,000.00.
Cumulative recognized income payable is RMB 2,523,733.33 yuan
27.Special Payable
In RMB
|||||||
|-|-|-|-|-|-|
||Beginning of||Decreased this|||
|Items||Increased this period||End of term|Reaseon|
||term||period|||
|Compensation for relocation of||||||
|||237,658,831.07||237,658,831.07||
|Shiqiao Road Factory area||||||
|Total||237,658,831.07||237,658,831.07|--|

Othernotes：
The Company and its subsidiary the Machinery Company received the first amount of compensation for the relocation due to planning to relocate the entire production base to Qianjiang Economic Development Zone Yuhang District Hangzhou City according to the planning of the Hangzhou Municipal Government. For details, please refer to note 13 (II) 2 of this financial statement.
28. Deferred income
In RMB
|||||||
|-|-|-|-|-|-|
||||Decreased this|||
|Items|Beginning of term|Increased this period||End of term|Reaseon|
||||period|||
||||||Receive government|
|Government Subsidy|5,422,895.00||1,359,280.00|4,063,615.00||
||||||subsidies|

||||||
|-|-|-|-|-|
|Total|5,422,895.00|1,359,280.00|4,063,615.00 -|-|

(2) Details of government subsidies
In RMB
||||||||
|-|-|-|-|-|-|-|
|||New subsidy|Amount transferred|Other|||
|||||||Asset-related or|
|Items|Beginning of term|in current|to non-operational|change|End of term||
|||||||income-related|
|||period|income|s|||
|Financial support for industrial|||||||
||287,800.00||28,780.00||259,020.00|Asset-related|
|projects|||||||
|Government subsidy for casting|||||||
||287,800.00||28,780.00||259,020.00|Asset-related|
|project|||||||
|Circular economy financial subsidy|||||||
||114,100.00||11,410.00||102,690.00|Asset-related|
|Projects of technological|||||||
||26,000.00||26,000.00|||Asset-related|
|transformation|||||||
|Subsidy for industrial upgrading by|||||||
||480,000.00||160,000.00||320,000.00|Asset-related|
|provincial government|||||||
|Finance for casting project|3,906,405.00||997,380.00||2,909,025.00|Asset-related|
|Government subsidy for industrial|||||||
|entities from Yuhang District|320,790.00||106,930.00||213,860.00|Asset-related|
|Government in the 2nd half of 2009|||||||
|Total|5,422,895.00||1,359,280.00||4,063,615.00|--|

Othernotes：
Notes：Note: For the government subsidy of this period counted into the current profit and loss, see details at government subsidy statements at additional notes of project notes annotated under of this combined financial statement
29. Stock capital
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Increase/decrease this time (+ , - )||||||
||||||||Balance|
||Balance Year-beginning|Issuing of new|Bonus|Transferred from||||
||||||Other|Subtotal|year-end|
|||share|shares|reserves||||
|Total of capital|754,010,400.00||||||754,010,400.00|
|shares||||||||

30. Capital reserves
In RMB
||||||
|-|-|-|-|-|
|Items|Year-beginning balance|Increase in the current|Decrease in the current|Year-end balance|
|||period|period||
|Share premium|81,815,220.00||45,256.07|81,769,963.93|
|Other capital reserves|57,775,125.09|||57,775,125.09|
|Total|139,590,345.09|||139,545,089.02|
||||45,256.07||

 Othernotes：
The decrease occurred at this period was for the subsidiary Chinen Company acquired40% of equity from minority shareholders of its subsidiary, Chengdu Hangzhou Chinen Science and Technology Co., Ltd, and the investment cost of the new long-term equity, counted according to new proportion of shareholding, shall be entitled to the balance among the fair value shares of thissubsidiary’s realizable net assets counted since date of purchase . When preparing the combined financial statement, share premium of RMB 45,265.07 in capital reserve was written down.
31. Other comprehensive income
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Occurred current term||||||
||||Less: accounted as other|||Attributable to||
|Items|Beginning of term|Amount occurred before|gains previously but|Less: Income tax|Attributable to the|minority|End of term|
|||income tax of the period|transferred to gain/loss|expenses|parent co. after tax|shareholders||
||||this period|||after tax||
|II. Other Comprehensive income that|||||-567,060,789.75|||
|will be reclassified subsequently to|2,137,419,299.84|-667,333,393.00||-100,038,979.01||-233,624.24|1,570,358,510.09|
|profit or loss||||||||
|Gains or losses on changes in fair|||||-566,887,547.71|||
|value of available-for-sale financial|2,137,800,156.80|-666,926,526.72||-100,038,979.01|||1,570,912,609.09|
|assets||||||||
|Difference of translating of foreign|||||-173,242.04|||
||-380,856.96|-406,866.28||||-233,624.24|-554,099.00|
|currency accounts||||||||
|Total of other comprehensive income|2,137,419,299.84|-667,333,393.00||-100,038,979.01|-567,060,789.75|-233,624.24|1,570,358,510.09|

 32.Special reserves
In RMB
||||||
|-|-|-|-|-|
|Items|Beginning of term|Increased this period|Decreased this period|End of term|
|Labor safety expenses|||||
||27,546,353.37||2,176,638.76|25,369,714.61|
|Total|27,546,353.37|||25,369,714.61|
||||2,176,638.76||

Othernotes：
On December 5, 2016, Upon the application of the Company and the approval of Hangzhou Safety Production Supervision and Administration Bureau (HSPSAB), the minimum reserved amount for the collection and use of the safety production cost of the Company and its subsidiaries is RMB 20 million. If the safety production costs that have been withdrawn in previous years have exceeded the minimum reserved amount, it will no longer be reduced; if the safety production costs for the subsequent years are less than the above-mentioned minimum reserved amount, withdraw in the current year to compensate up to the minimum reserved amount.
33. Surplus reserves
In RMB
||||||
|-|-|-|-|-|
||Beginning of term|Increased this period|Decreased this period|End of term|
|Items|||||
|Statutory surplus|||||
||621,112,807.78|||621,112,807.78|
|reserves|||||
|Total|621,112,807.78|||621,112,807.78|

 34. Retained profit
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
|Amount of retained profit at beginning of period|2,705,667,037.15|2,673,711,591.42|
|Add: Net profit attributable to owners of the paren|t||
||68,753,250.90|31,955,445.73|
|company|||
|Retained profit at the end of term|2,774,420,288.05|2,705,667,037.15|

 As regards the details of adjusted the beginning undistributed profits
(1)As the retroactive adjustment on Enterprise Accounting Standards and its related new regulations, the affected beginning undistributed profits are RMB 0.00.
(2) As the change of the accounting policy, the affected beginning undistributed profits are RMB 0.00.
(3) As the correction of significant accounting error, the affected beginning undistributed profits are RMB 0.00 . (4) As the change of consolidation scope caused by the same control, the affected beginning undistributed profits are RMB 0.00.
(5) Other adjustment of the total affected beginning undistributed profits are RMB 0.00 .
35. Business income and Business cost
In RMB
||||||
|-|-|-|-|-|
||Occurred current term||Occurred in previous term||
|Items|||||
||Income|Cost|Income|Cost|
|Main Business|3,309,136,671.06|2,358,901,850.83|3,230,906,525.12|2,203,424,343.46|
|Other|138,005,998.43|91,685,474.96|4,396,854.12|1,154,437.61|
|Total|3,447,142,669.49|2,450,587,325.79|3,235,303,379.24|2,204,578,781.07|

36. Business tax and surcharge
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|City maintenance and construction tax|10,155,742.58|14,706,240.33|
|Education surtax|4,439,101.66|6,398,546.53|
|House tax|6,993,445.59|2,434,567.60|
|Land use tax|4,501,181.12|3,303,802.70|
|vehicle and vessel tax|68,067.25|43,113.80|
|Stamp tax|2,104,891.99|1,374,990.22|
|Locality Education surcharge|2,959,342.83|4,265,697.76|
|Business tax||36,467.22|
|Total|31,221,773.02|32,563,426.16|

 Othernotes：
According to the interpretation on the accounting issues of the Value-added Tax Accounting Regulations (Accounting[2016] No. 22) and On the Value-added Tax Accounting Regulations of the Ministry of Finance, the amount of property tax, land use tax, stamp duty, and travel tax from May 1, 2016,, which are originally included in the management expense, are now listed and included in the "tax and additional tax", and the amount incurred before May 2016 is still listed and included in the "management expense".
37. Sales expense
In RMB
||||
|-|-|-|
|Items|Amount of this period|Amount of last period|
|Employees’ remunerations|63,636,827.69|55,699,101.44|
||35,709,099.81|48,927,596.36|
|Transportation|||
|Business trips|29,740,328.24|26,265,496.47|
|Business reception expenses|||
||6,357,490.28|6,849,411.37|
|Consulting service fee|15,791,855.22|13,131,824.03|
|Registration fee|3,319,154.10|2,108,171.81|
|Three charge|6,303,572.33|4,206,989.36|
|Advertising fee|2,096,391.38|2,306,256.87|
|Office expenses|1,138,787.78|525,955.82|
|Unit premium|912,304.99|363,654.18|
|Other|4,514,335.85|4,225,952.94|
|Total|169,520,147.67|164,610,410.65|

 38. Administrative expense
In RMB
||||
|-|-|-|
|Items|Amount of this period|Amount of last period|

||||
|-|-|-|
|Employees’ remunerations|317,730,349.96|307,082,891.10|
|R&D expenses|211,027,767.11|197,406,076.77|
|Asset depreciation and amortizing|18,290,071.64|23,492,146.53|
|Business reception expenses|13,882,376.16|14,669,707.28|
|Rental fee, House rental, property|||
||22,417,308.94|18,201,093.27|
|management, water and power|||
|Traveling fees|9,341,935.98|8,907,858.29|
|Material, low-value-consumable|4,214,778.82|4,484,248.27|
|Office expenses|8,034,059.34|6,540,689.49|
|Repair expenses|4,889,036.67|3,447,185.46|
|Taxes|2,145,713.01|3,946,865.23|
|Other|32,205,534.15|35,505,775.77|
|Total|644,178,931.78|623,684,537.46|

 Othernotes：
Note: See details at 2. Taxation Expense and Additional Statements at Part 2 of Note V in this financial statement 39. Financial expenses
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Interest expense|9,972,261.98|9,308,017.80|
|Less: Incoming interests|8,249,739.28|5,744,431.75|
|Exchange gains/losses|19,433,536.68|-20,850,372.53|
|Commission|3,131,068.44|2,448,933.41|
|Total|24,287,127.82|-14,837,853.07|

 40. Asset impairment loss
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|I .Losses for bad debts|68,620,803.42|187,468,454.06|
|II.Losses for falling price of inventory|||
||66,012,796.38|13,846,179.75|
|Total|134,633,599.80|201,314,633.81|

 41. Investment income
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Investment income from disposal of Long-term equity|3,927,952.52||

||||
|-|-|-|
|investment|||
|Investment gains from holding of sellable financial assets|54,014,898.47|3,587,659.70|
|Investment income from disposal of available for sale|||
||25,121,648.20||
|financial assets|||
|Gains from financing products|37,501,352.07|28,548,677.87|
|Total|120,565,851.26|32,136,337.57|

 42.Assets disposal income
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Income form disposal of fixed assets|2,752,651.04|387,292.53|
|Loss form disposal of fixed assets|-11,785.91||
|Total|2,740,865.13|387,292.53|

 43.Other income
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Government Subsidy|10,195,671.25||
|Total|10,195,671.25||

44.Non-Operation income
In RMB
|||||
|-|-|-|-|
||||Recorded in the amount of the|
|Items|Occurred current term|Occurred in previous term||
||||non-recurring gains and losses|
|Government Subsidy||16,968,792.22||
|Compensation income|7,101,662.20|7,706,669.41|7,101,662.20|
||254,099.61|96,487.12|254,099.61|
|Payment not to be paid||||
|Others|||719,897.38|
||719,897.38|1,008,975.41||
|Total|8,075,659.19|25,780,924.16|8,075,659.19|

- Government subsidy reckoned into current gains/losses
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|||Issuing||Whether the|Whhethe|Amount of|Amount of|Assets-related/in|
|Subsidy items|Issuing body||Nature||||||
|||reason||impact of|r special|current|previous period|come –related|

||||||||||
|-|-|-|-|-|-|-|-|-|
|||||subsidies on the|subsidie|period|||
|||||current profit and|s||||
|||||loss|||||
|Transferred from deferred|||||||||
||||||||1,381,530.00|Related to assets|
|income|||||||||
|Stable employment social|||||||||
|||||||||Related to|
||||||||6,208,662.99||
|security subsidies||||||||income|
|2016 provincial industrial|||||||||
|||||||||Related to|
|and information technology|||||||3,000,000.00||
|||||||||income|
|development special funds|||||||||
|Water Funds returned||||||||Related to|
||||||||2,853,493.64||
|||||||||income|
|Property tax return||||||||Related to|
||||||||1,362,413.59||
|||||||||income|
|Enterprise R & D|||||||||
|||||||||Related to|
||||||||714,200.00||
|investment subsidy||||||||income|
|Hangzhou "115" in 1995 to|||||||||
|||||||||Related to|
|introduce foreign|||||||600,000.00||
|||||||||income|
|intelligence program|||||||||
|Financial subsidy||||||||Related to|
||||||||366,930.00||
|||||||||income|
|Land use tax refund||||||||Related to|
||||||||153,244.00||
|||||||||income|
|Quality Award Financial|||||||||
|||||||||Related to|
||||||||131,600.00||
|Award||||||||income|
|Training subsidy||||||||Related to|
||||||||100,608.00||
|||||||||income|
|Other small amount||||||||Related to|
||||||||96,110.00||
|subsidies||||||||income|
|Total|--|--|--|--|--||16,968,792.22|--|

 45. Non-operational expenditure
In RMB
|||||
|-|-|-|-|
||||Amount accounted into non-recurring|
|Items|Current term|Same period of last term||
||||gain/loss of current term|
|Donations|160,000.00|270,000.00|160,000.00|

|||||
|-|-|-|-|
||1,017,449.18|383,192.05|1,017,449.18|
|Penalty paid out||||
||5,660.04|2,747,978.42|5,660.04|
|Local water source foundation||||
|Penalties|386,417.98|343,895.38|386,417.98|
|Loss damage||196,627.26||
|loss from disposal of non-current assets|60,243.24|60,839.23|60,243.24|
|Other|5,909.50|272,423.01|5,909.50|
|Total|1,635,679.94|4,274,955.35|1,630,019.90|

 46. Income tax expenses
(1) Details
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
|Income tax of current term|30,183,514.16|30,434,271.60|
|Deferred income tax|||
||-19,347,759.68|-19,926,599.45|
|Total|10,835,754.48|10,507,672.15|

 (2) Adjustment process of accounting profit and income tax expenses
In RMB
|||
|-|-|
|Items|Current term|
|Total profit|132,656,130.50|
|Income tax expense at statutory / applicable tax rates|19,898,419.58|
|Effect of different tax rates applicable to subsidiaries|2,362,974.46|
|Adjustment for income tax in prior year|498,194.56|
|Income not subject to tax|-6,730,586.23|
|Expenses not deductible for tax purposes|1,682,033.95|
|Changes in the balance of deferred income tax assets at the beginning of the tax rate adjustment||
||-499,495.29|
|Impact of deductible temporary difference of un-recognized deferred income tax asset of current||
||2,896,366.84|
|period||
|Super deduction of R&D expenses|-7,868,394.27|
|Impact of additional deductions for persons with disabilities|-195,000.00|
|Consolidation of the effect of offset profits|-1,208,759.12|
|Income tax expenses|10,835,754.48|

47.Other Comprehensive income
Please find the statement in the notes of consolidated balance sheet.
48. Notes Cash flow statement
(1) Other cash received from business operation
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Deposit interest(Notes)|8,841,048.87|5,744,431.75|
|Government subsidies received|7,585,972.87|11,218,110.99|
|Deposit for bidding and other|117,753,826.61|16,391,878.63|
|Compensation income|2,004,464.28|789,904.00|
|Other|807,897.38|2,195,408.92|
|Total|136,993,210.01|36,339,734.29|

Notes：Interest of deposit received from the sum invested of China Development Fund in the year of 2017 is included.
2. Other cash paid for business activities
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Transportation|46,333,097.00|57,287,872.01|
|Travel expenses|31,479,265.23|28,307,013.51|
|Business trips|20,239,866.44|21,519,087.20|
|Maintaining|4,889,036.67|3,447,165.85|
|Property management and civil services|26,288,452.59|16,621,718.05|
|Deposit for bidding and others|128,402,810.43|23,512,159.15|
|Office expenses|8,538,814.87|7,066,554.79|
|Conferences|3,953,186.35|2,401,978.53|
|Consulting service fee|13,960,995.20|13,131,824.03|
|Transportation and vehicles|7,132,162.29|4,823,801.30|
|Other|47,505,862.73|40,288,131.86|
|Total|338,723,549.80|218,407,306.28|

 3.Other investment-related cash received
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Repurchasing of trusteeship|3,898,147,338.00|1,765,932,662.00|
|Receipt of levy and relocation|237,658,831.07||

||||
|-|-|-|
|compensation|||
|Total|4,135,806,169.07|1,765,932,662.00|

 4. Other cash paid for investment activities
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
|Purchasing of financial products|3,931,112,329.00|2,193,700,000.00|
|Sales of subsidiary ending cash|183,932.75||
|Total|3,931,296,261.75|2,193,700,000.00|

 5. Other financing-related cash received
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|CDB investment fund||208,000,000.00|
|Total||208,000,000.00|

 6.Other Cash payable related to financing activities
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Return of minority investment funds to|||
||21,591,054.08||
|subsidiaries|||
|Payment of CDB investment interest|1,220,266.67||
|Purchase of minority shareholders|243,111.17||
|Total|23,054,431.92||

49. Supplementary data of cash flow statement
(1) Supplementary data of cash flow statement
In RMB
||||
|-|-|-|
|||Amount of the Previous|
|Supplementary Info.|Amount of the Current Term||
|||Term|
|I. Adjusting net profit to cash flow from operating activities|--|--|
|Net profit|121,820,376.02|66,911,369.92|
|Add: Impairment loss provision of assets|134,633,599.80|201,314,633.81|
|Depreciation of fixed assets, oil and gas assets and consumable biological|||
||76,555,538.97|82,918,520.91|
|assets|||
|Amortization of intangible assets|7,552,428.32|7,553,207.06|
|Amortization of Long-term deferred expenses|648,388.42|653,180.10|

||||
|-|-|-|
|Loss on disposal of fixed assets, intangible assets and other long-term deferred|||
||-2,740,865.13|-326,453.30|
|assets|||
|Loss on scrap of fixed assets|60,243.24||
|Financial cost|28,843,231.98|936,959.82|
|Loss on investment|-120,565,851.26|-32,136,337.57|
|Decrease of deferred income tax assets|-19,347,759.68|-19,906,922.15|
|Increased of deferred income tax liabilities||-19,677.30|
|Decrease of inventories|-257,216,765.22|-89,815,466.67|
|Decease of operating receivables|-411,587,570.47|118,336,896.84|
|Increased of operating Payable|649,202,893.79|174,852,469.36|
|Other|-2,555,097.01|-5,112,952.41|
|Net cash flows arising from operating activities|205,302,791.77|506,159,428.42|
|II. Significant investment and financing activities that without cash flows:|--|--|
|3．Movement of cash and cash equivalents：|||
||--|--|
|Ending balance of cash|1,137,492,834.83|831,236,984.85|
|Less: Beginning balance of cash equivalents|831,236,984.85|689,224,662.53|
|Net increase of cash and cash equivalents|306,255,849.98|142,012,322.32|

 (2) Net Cash paid of obtaining the subsidiary
In RMB
|||
|-|-|
||Amount|
|including：|--|
|Less：Cash and cash equivalents held by the company on the date of loss of||
||183,932.75|
|control||
|Including：|--|
|Zhejiang ZhongrunGas turbine technology Co., Ltd.|183,932.75|
|Including：|--|
|Disposal of net cash received by subsidiaries|-183,932.75|

 Othernotes：
Note: Cash amount reported for the payment for other related investment activities.
（3）Composition of cash and cash equivalents
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|I. Cash|1,137,492,834.83|831,236,984.85|
|Of which: Cash in stock|||
||208,763.32|326,226.09|
|Demand bank deposit|1,137,284,071.51|830,910,758.76|
|III. Balance of cash and cash equivalents at|1,137,492,834.83|831,236,984.85|
|the period end|||

50. Assets with limitation on ownership or using rights
In RMB
||||
|-|-|-|
|Items|Closing book value|Causation o limitation|
|Monetary capital|85,184,661.11|Used as security for issuing of acceptance drafts and bill of guarantees|
|Bill receivable|40,000,000.00|Used as security for issuing of acceptance drafts|
|Fixed assets|||
||112,955,316.32|Used to obtain bank loans|
|Intangible assets|||
||87,909,828.11|Collateral for obtaining bank loans and investment funds from CDB|
|Dividend receivable|6,900,000.00|Investment funds for the development of the State Fund|
|Available for sale financial|||
||371,266,000.00|Investment funds for the development of the State Fund|
|assets|||
|Total|||
||704,215,805.54|--|

51. Monetary items in foreign currencies
(1) Foreign currency monetary items
In RMB
|||||
|-|-|-|-|
||||Translated to RMB at end of|
|Items|Balance at end of period|Exchange rate||
||||period|
|Monetary capital|--|--|161,660,934.80|
|Incl：USD|24,019,443.75|6.5342|156,947,849.32|
|Euro|161,691.71|7.8023|1,261,567.23|
|HKD|5.51|0.83591|4.61|
|JPY|24,409,542.00|0.057883|1,412,897.52|
|Rupiah|4,229,494,022.10|0.000482|2,038,616.12|
|Account receivable|--|--|208,535,159.46|
|Incl：USD|28,063,668.87|6.5342|183,373,625.13|

|||||
|-|-|-|-|
|Euro|2,794,843.40|7.8023|21,806,206.66|
|Rupiah|6,477,751,550.00|0.000482|3,122,276.25|
|Rupiah||||
|Singapore dollar|47,726.12|4.8831|233,051.42|
|Other receivable|||3,556,660.53|
|Incl：USD|536,562.00|6.5342|3,506,003.42|
|JPY|1,500.00|0.057883|86.82|
|Won|388,000.00|0.006109|2,370.29|
|Rupiah|100,000,000.00|0.000482|48,200.00|
|Account receivable|||7,323,197.63|
|Incl：USD|741,579.96|6.5342|4,845,631.77|
|Euro|177,440.86|7.8023|1,384,446.82|
|Rupiah|2,267,881,822.97|0.000482|1,093,119.04|
|Other payable|||267,054.71|
|Incl：USD|40,870.30|6.5342|267,054.71|

VIII.Changes of consolidation scope
1.Disposal of subsidiary
There is a single disposition to invest in the subsidiary that is the case of loss of control
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||The amount of|
|||||||The difference||||||other|
||||||||||||Determination||
|||||||between the disposal||||||comprehensiv|
||||||||Proportion|||Regaining gains|of the fair||
|||||||price and the share of||The book|The fair value|||e income|
||||||||of|||or losses arising|value of the||
|||||||the subsidiary's net||value of the|of the|||related to the|
|||Equity|||||remaining|||from|remaining||
||||Disposal|||assets at the level of||remaining|remaining|||atomic|
|Name|Equity disposal price|disposal||Loss of control|Determining the basis||stocks at|||re-measurement|equity at the||
||||of equity|||the consolidated||equity at the|equity at the|||company's|
|||ratio||point|for the loss of control||the date of|||of the remaining|date of loss of||
|||||||financial statement||date of loss of|date of loss of|||equity|
||||||||loss of|||equity at fair|control rights||
|||||||corresponding to the||control|control|||investment|
||||||||control|||value|and its main||
|||||||disposal of the||||||transferred to|
||||||||||||assumptions||
|||||||investment||||||investment|
|||||||||||||profit and loss|
|Zhejiang|||||||||||||
|Zhongrun Gas|||||||||||||
|||||October|Complete business||||||||
|engine|10,000,000.00|55.55%|Sell|||3,927,952.52|||||||
|||||26,2017|change registration||||||||
|technology|||||||||||||
|co., Ltd.|||||||||||||

Othernotes：
Zhejiang Runhong Gas Turbine Project Co., Ltd.( hereinafter referred to as Run Hong Company ), the original secondary subsidiary of the Company, disposed its holding equity of its subsidiary, Zhanjiang Zhongrun Gas Turbine Technology Co., Ltd. After the above-mentioned equity was done being disposed, Run Hong Company completed the liquidation cancellation on December 22, 2017.
Whether there is a case where the investment is made to the subsidiary and the loss of control in the current period
No
2.Other reasons for the merger scope change
Merger scope decrease
||||||
|-|-|-|-|-|
|Name|Way of EquityDisposition|Time Point of EquityDisposition|Net Assets on theDate of Disposition|Net Profits from theBeginning of the Period tothe Date of Disposition|
|Xinjiang TaiFeng Hangzhou Steam TurbineComplete Technology Development Co., Ltd.|Chearing|April 25,2017|17,061,690.18|181,238.78|
|Hangzhou steam turbine Boiler Co.,Ltd.|Chearing|April 27,2017|19,665,256.43|1,130,995.08|
|Hangzhou Pangtong ElectromechanicalEquipment Co., Ltd.|Chearing|December 21,2017|1,086,391.89|-115,873.20|
|Zhejiang Runhong Gas Trubine Engineering Co.,Ltd.|Chearing|December 22,2017|34,953,788.30|2,813,561.91|

IX. Equities in Other Entities
(I) Equity in major subsidiaries
1. Composition of major subsidiaries
||||||||
|-|-|-|-|-|-|-|
|||||Share proportion %|||
||Main business||||||
|Name of the subsidiaries||Reg. Add.|Business property|||Way of obtain|
||location|||Direct|Indirect||
|Zhejiang Steam Trubine|||||||
|||Hangzhou|||||
|Packaged Technologies|Hangzhou Zhejiang||Manufacturing|70.86%||Incorporation|
|||Zhejiang|||||
|Development Co., Ltd.|||||||
|Hangzhou Zhongneng|||||||
|Steam Turbine Power||Hangzhou|||||
||Hangzhou Zhejiang||Manufacturing|60.83%||Incorporation|
|Co., Ltd. (Zhongneng||Zhejiang|||||
|Co.)|||||||
|Hangzhou Steam|||||||
|||Hangzhou|||||
|Turbine Casting Co.,|Hangzhou Zhejiang||Manufacturing|51.00%||Incorporation|
|||Zhejiang|||||
|Ltd.|||||||
|Hangzhou Steam|||||||
|||Hangzhou|||||
|Turbine Machinery|Hangzhou Zhejiang||Manufacturing|52.00%||Incorporation|
|||Zhejiang|||||
|Equipment Co., Ltd.|||||||
|Hangzhou Steam|||||||
|Turbine Auxiliary|||||||
|||Hangzhou|||||
|Machinery Co., Ltd.|Hangzhou Zhejiang||Manufacturing|87.53%||Incorporation|
|||Zhejiang|||||
|(Auxiliary Machinery|||||||
|Co.)|||||||

|||||||
|-|-|-|-|-|-|
|Zhejiang Turbine||||||
|||Hangzhou||||
|Import & Export Co.,|Hangzhou Zhejiang||Commerce|100.00%|Incorporation|
|||Zhejiang||||
|Ltd. (Turbine Co.)||||||
|Hangzhou Steam||||||
|Turbine Heavy Industry||Hangzhou||||
||Hangzhou Zhejiang||Manufacturing|100.00%|Incorporation|
|||Zhejiang||||
|Co., Ltd.||||||

（2）Major non-fully-Owned subsidiaries
In RMB
||||||
|-|-|-|-|-|
|||Gains/loss of the period|Dividend announced in|Balance of eqiuty of minor|
||Share protion of minor||||
|Name of the subsidiaries||attributable to minor|the period to minor|shareholders at end of|
||shareholders||||
|||shareholders|shareholders|period|
|Zhejiang Steam Trubine|||||
|Packaged Technologies|29.14%|3,174,590.24|2,229,592.50|24,217,276.70|
|Development Co., Ltd.|||||
|Hangzhou Zhongneng|||||
|Steam turbine PowerCo.,|39.17%|11,916,814.40|4,637,200.00|141,678,604.31|
|Ltd.|||||
|Hangzhou Steam Turbine|||||
||49.00%|13,586,682.59|9,702,000.00|72,216,942.99|
|Casting Co., Ltd.|||||
|Hangzhou Steam Turbine|||||
|Machinery Equipment|48.00%|22,095,692.13|21,600,000.00|71,260,459.07|
|Co., Ltd.|||||
|Hangzhou Steam Turbine|||||
|Auxiliary Machinery Co.,|12.47%|4,584,214.40|2,992,800.00|25,982,354.28|
|Ltd.|||||

(3) Material financial information of major non-fully-owned subsidiaries
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||End of term||||||Beginning of term||||||
|Subsidiaries|||||||||||||
||||||Non-current|||Non-current|||Non-current|Total of|
|Name|Current assets|Non-current assets|Total of assets|Current liabilities||Total of liability|Current assets||Total of assets|Current liabilities|||
||||||liabilities|||assets|||liabilities|liability|
|Zhejiang|||||||||||||
|Steam|||||||||||||
|trubine|||||||||||||
|||||||160,574,913.6|255,821,238.0||279,877,771.0|||191,451,594.|
|Packaged|219,292,216.34|24,375,146.44|243,667,362.78|160,574,913.68||||24,056,533.07||191,451,594.17|||
|||||||8|0||7|||17|
|Technology|||||||||||||
|Developmen|||||||||||||
|t Co., Ltd.|||||||||||||
|Hangzhou|||||||||||||
|Zhongneng|||||||||||||
|Steam|||||||||||||
|||||||772,640,062.7|884,998,690.4||960,130,000.9|||623,525,514.|
||1,037,373,643.65|75,190,430.57|1,112,564,074.22|772,310,062.79|330,000.00|||75,131,310.55||623,195,514.10|330,000.00||
|turbine||||||9|4||9|||10|
|PowerCo.,|||||||||||||
|Ltd.|||||||||||||
|Hangzhou|||||||||||||
|Steam|||||||||||||
||||||3,849,755.0|316,315,457.8|211,392,397.1|194,877,712.3|406,270,109.4||10,002,105.|240,710,393.|
|Turbine|304,833,240.88|184,619,003.14|489,452,244.02|312,465,702.87||||||230,708,288.79|||
||||||0|7|5|0|5||00|79|
|Casting Co.,|||||||||||||
|Ltd.|||||||||||||
|Hangzhou|||||||||||||
||||||||200,333,215.8||222,830,937.4|||75,404,339.6|
|Steam|205,163,731.11|21,782,104.60|226,945,835.71|77,895,206.35|591,339.61|78,486,545.96||22,497,721.65||75,404,339.67|||
||||||||4||9|||7|
|Turbine|||||||||||||

||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Machinery|||||||||||||
|Equipment|||||||||||||
|Co., Ltd.|||||||||||||
|Hangzhou|||||||||||||
|Steam|||||||||||||
|Turbine|||||||||||||
|||||||428,348,379.2|432,548,733.6|115,456,043.8|548,004,777.4|||324,919,126.|
||548,200,286.67|115,360,847.76|663,561,134.43|428,134,519.20|213,860.00|||||324,598,336.06|320,790.00||
|Auxiliary||||||0|4|2|6|||06|
|Machinery|||||||||||||
|Co., Ltd.|||||||||||||

In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Amount of current period||||Amount of previous period||||
|Subsidiaries Name|||||||||
|||||Cash flow for business||||Cash flow for business|
||Turnover|Net profit|Total Misc Gains||Turnover|Net profit|Total Misc Gains||
|||||activities||||activities|
|Zhejiang Steam|||||||||
|Turbine Packaged|||||||||
|Technology|241,699,214.69|10,676,500.39|10,676,500.39|-8,604,753.23|219,104,132.13|8,511,564.05|8,511,564.05|17,053,194.85|
|Development Co.,|||||||||
|Ltd|||||||||
|Hangzhou|||||||||
|Zhongneng Steam|||||||||
||833,201,191.68|25,173,217.92|24,766,351.64|24,579,646.69|726,019,174.47|9,061,166.79|10,169,432.35|57,021,017.72|
|turbine Power Co.,|||||||||
|Ltd.|||||||||
|Hangzhou Steam|||||||||
|Turbine Casting|357,558,102.11|27,727,923.66|27,727,923.66|18,380,178.48|286,947,144.79|17,095,623.20|17,095,623.20|44,737,383.72|
|Co., Ltd.|||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|Hangzhou Steam|||||||||
|Turbine Machinery|220,887,783.34|46,032,691.93|46,032,691.93|46,087,103.01|203,232,692.33|45,793,653.38|45,793,653.38|61,976,772.66|
|Equipment Co., Ltd.|||||||||
|Hangzhou Steam|||||||||
|Turbine Auxiliary|394,136,946.17|36,761,943.86|36,761,943.86|16,117,349.92|362,840,873.07|25,243,697.12|25,243,697.12|24,381,581.78|
|Machinery Co., Ltd.|||||||||

2. Rights and interests in joint venture arrangements or joint ventures
（1）Summary financial information of unimportant joint ventures and associated enterprises
In RMB
||||
|-|-|-|
||Year-end balance/ Amount of|Year-beginning balance/ Amount of|
||current period|previous period|
|Joint ventures|--|--|
|Total book value of investments|5,800,000.00||
|Total of the following by shareholding ratio|--|--|
|Associated enterprises|--|--|
|Total of the following by shareholding ratio|--|--|

Othernotes：
Zhejiang Runhong Gas Turbine Engineering Co., Ltd, which formerly was a second-tier holding subsidiary to the company, held55.55% stake of its subsidiary-Zhejiang Zhongrun Gas Turbine Technology Co., Ltd. However, after the equity transfer, Runhong transferred all its holding stake of Zhongrun to Turbo Company and Ningbo Daxie Development Zone Huashun Industry& Trade Co., Ltd-respectively acquired32.22% and23.33% by them, and the industrial and commercial change registration and the transfer of property rights were completed on December 26, 2017. Therefore, Runhong Company is no longer included in the scope of the consolidated financial statements from November 2017, and it is changed to an associated enterprise to the company.
X. Risks related to financial instruments
The objective of theCompany’s risk management is to achieve a balance between the risk and gains. Constrain the negative influence on business operation to the lowest limit, and maximum the interests of shareholders and other equity holders. With regard to this target, the basic policies of the Company are; locate and analyse the risks, set appropriate bottom line for risks, and manage and monitor on each risk and constrain them in a certain extent. Risks attached to financial instruments are mainly credit risks, liquidity risks, and market risks.
The following risk managing policies have been examined and approved by the management:
(I) Credit risks
Credit risks are introduced when one party of the financial instrument failed to exercise its liabilities and then caused financial loss to another.
The credit risks of the Company are mainly composed by bank savings and receivable accounts. Following measurements are adopted to control these risks:
1. Bank deposit
The Company puts its bank savings in financial institutions with higher credit ranks, therefore with lower risks. 2. Account receivable
The Company performs credit assessment on the clients on periodic and constant basis. Results suggested by the assessment are used by the Company to determine clients with higher ranks and to overlook the rest. This was conducted to avoid risks brought by material bad debts.
As the Company only does business with recognized and reputable third parties, so no collateral is needed. Credit risks are centralized managed in accordance with customers. As of December 31, 2017, the Company has a
characteristic of specific credit risk concentration.41.79% (December 31, 2016:41.79%) of the Company's
accounts receivable comes from the top five customers. The Company does not hold any collateral or other credit
enhancement for the balance of accounts receivable.
(1) Analyzing of receivable accounts neither due nor impaired, and those have due but not impaired:
|||||||
|-|-|-|-|-|-|
|Items|End of term|||||
||Not overdue and notimpaired|Overdue but not impaired|||Total|
|||Within 1 year|1-2 years|Over 2 years||
|Bill receivable|715,410,887.68||||715,410,887.68|
|Subtotal|715,410,887.68||||715,410,887.68|

 (Continued)
|||||||
|-|-|-|-|-|-|
|Items|Beginning of term|||||
||Not overdue and not impaired|Overdue but not impaired|||Total|
|||Within 1 year|1-2 years|Over 2 years||
|Bill receivable|479,716,321.62||||479,716,321.62|
|Subtotal|479,716,321.62||||479,716,321.62|

 (II) Liquidation risks
Liquidation risks are the possibilities of short in cash at fulfilling liabilities of payment or settlement for financial assets. They may be caused by failing to cash financial assets at fair value instantly;debtors’ failing of paying debts due; debts due before schedule; or failing of generating expected cash flow.
To handle these risks, the Company adopted multiple measures such as note clearance and bank loans. Long-term and short-term financing approaches were used to maintain balance between constancy and flexibility. The Company has obtained credit from multiple banks to satisfy the needs of business operation and capital output.
Categorizing of financial liabilities on remained period to due
|||||||
|-|-|-|-|-|-|
|Items|End of term|||||
||Book value|Contract amount notdiscounted|within 1 year|1-3 years|Over 3 years|
|Short-term loans|115,500,000.00|117,664,804.32|117,664,804.32|||
|Notes payable|215,409,958.92|215,409,958.92|215,409,958.92|||
|Non-current liabilities dueto 1 year|4,900,000.00|4,903,383.01|4,903,383.01|||
|Long-term loan|100,000,000.00|107,057,027.40|3,685,000.00|103,372,027.40||
|Long-term payable|209,633,466.66|222,751,733.33||53,000,000.00|169,751,733.33|
|Account payable|882,715,465.65|882,715,465.65|882,715,465.65|||
|Other account payable|27,859,617.33|27,859,617.33|27,859,617.33|||
|Subtotal|1,556,018,508.56|1,578,361,989.96|1,252,238,229.23|156,372,027.40|169,751,733.33|

(Continued)
|||||||
|-|-|-|-|-|-|
|Items|Beginning of term|||||
||Book value|Contract amount notdiscounted|within 1 year|1-3 years|Over 3 years|
|Short-term loans|173,000,000.00|177,681,933.75|177,681,933.75|||
|Notes payable|143,007,715.10|143,007,715.10|143,007,715.10|||
|Non-current liabilities dueto 1 year|18,500,000.00|19,583,120.86|19,583,120.86|||
|Long-term loan|4,900,000.00|5,145,034.03||5,145,034.03||
|Long-term payable|208,027,733.33|223,972,000.00||26,000,000.00|197,972,000.00|
|Account payable|853,452,589.51|853,452,589.51|853,452,589.51|||
|Other account payable|30,820,980.80|30,820,980.80|30,820,980.80|||
|Subtotal|1,431,709,018.74|1,453,663,374.05|1,224,546,340.02|31,145,034.03|197,972,000.00|

 (III) Market risks
Market risks are those brought by change of fair value or expectable cash flow of financial instruments due to change of market prices, mainly interest risks and exchange rate risks.
1. Interest risks
Interest risks are those brought by change of fair value or expectable cash flow of financial instruments due to change of interest rates, mainly regards the loans at floating interest rates.
As of December 31, 2017, the Company had raised RMB78,100,000.00 (Dec 31 2016: RMB83,850,000.00) on floating interest rates. In case of other variables remain unchanged, if the interest rates change, reasonably and possibly, for50% of the benchmark, the total profit andshareholders’ equity will be free of major impact.
2. Foreign currency risks
XI.Fair value disclosure
(I)Closing balance of assets and liabilities measured at fair value
In RMB
||||||
|-|-|-|-|-|
||December 31, 2017||||
|Items|||||
||Level 1|Level 2|Level 3|Total|
|I. Consistent fair value|||||
||--|--|--|--|
|measurement|||||
|（II）Available-for-sale Financial Assets|2,239,086,521.28|||2,239,086,521.28|

||||||
|-|-|-|-|-|
|（2）Equity instrument investment|2,239,086,521.28|||2,239,086,521.28|
|II.Non-continuous measurement fair|||||
||--|--|--|--|
|value|||||

(II) Market price basis at fair value by level 1 on a continued and non-continued basis
The shares of Hangzhou Bank Co., Ltd. held by the Company have active market quotations, so it is measured in accordance with the first level of fair value.
XII. Related parties and related transactions
1. Parent company of the Company
|||||||
|-|-|-|-|-|-|
|||||Shareholding of the|Voting rights of the parent|
|Name of the parent co.|Reg. Add.|Business property|Registered capital|||
|||||parent co.|co. %|
|Hangzhou Steam||||||
||Hangzhou China|Manufacturing|RMB 800 milllion|63.64%|63.64%|
|Turbine Group||||||

Notes :Hangzhou Municipal Government State-owned Asset Supervisory Committee is the ultimate controller of theCompany.。
2.Subsidiaries of the enterprise
For details of subsidiaries please go to the statement of equities in other entities.
3. Situation of joint ventures and associated enterprises
For details of the important joint venture or joint venture of the enterprise, see the description of the rights and interests in other parties in the notes
4. Other related parties
|||
|-|-|
|Name of the related parties|Relationship with the Company|
|Hangzhou Steam turbine Automobile sales service Co., Ltd.|Affiliate of the Group|
|Hangzhou Hangfa Power Generating Equipment Co., Ltd.|Affiliate of the Group|
|Hangzhou Nanfangtongda Gears Co., Ltd.|Affiliate of the Group|
|Hangzhou Nanhua Wooden Packaging Co., Ltd.|Affiliate of the Group|
|Hangzhou Steam Turbine Industrical Co., Ltd.|Affiliate of the Group|
|Hangzhou Steam Turbine Power Technologies Co., Ltd.|Affiliate of the Group|
|Hangzhou Steam Turbine Power Group Equipment Co., Ltd.|Affiliate of the Group|
|Hangzhou Steam Turbine Compressor Co., Ltd.|Affiliate of the Group|
|Hangzhou Wandong Electric Co., Ltd|Affiliate of the Group|
|China Electrical and Mechanical Institute-Hangzhou Turbine Group||
||Affiliate of the Group|
|(Hangzhou) United Research Institute Co., Ltd.||
|Hangzhou Steam Turbine Industry & Trade Co., Ltd.|Affiliate of the Group|

|||
|-|-|
|Zhejiang Juqing Investment Co., Ltd.|Affiliate of the Group|
|Greenesol power systems PVT Ltd.|Shareholding enterprise|
|Hangzhou Bank|Shareholding enterprise|

4.Related transaction
(1) Sale of goods/rendering of labor services/labor service offering
Purchase of goods and service
In RMB
|||||||
|-|-|-|-|-|-|
|||Amount of current|Amount of previous|Over the||
||Content of related||||Amount of last|
|Ralated parties||||trading limit||
||transaction|period|period||period|
|||||or not?||
|Hangzhou Steam turbine Automobile sales||||||
||Transportation , repair , etc.|49,793,145.26|67,900,000.00|No|51,271,023.35|
|service Co., Ltd.||||||
|Hangzhou Hangfa Power Generating||||||
||Generators|137,886,068.57|141,000,000.00|No|140,548,615.67|
|Equipment Co., Ltd.||||||
|Hangzhou Nanhua Wooden Packaging Co.,||||||
||Packaging|11,412,748.09|15,708,000.00|No|14,615,668.53|
|Ltd.||||||
|Hangzhou Nanfang Tongda Gears Co., Ltd.|Gear boxes|6,526,922.23|10,550,000.00|No|6,758,649.55|
|Hangzhou Steam Turbine Engineering Co.,||||||
||Technical service|5,815,284.38|6,000,000.00|No|6,539,280.97|
|Ltd.||||||
|Hangzhou Steam Turbine Industrial Co.,||||||
||Industrial cooperation|1,079,184.92|2,024,000.00|No|1,489,051.67|
|Ltd.||||||
|China Electrical and Mechanical||||||
|Institute-Hangzhou Turbine Group||||||
||Development ,design|1,521,264.63|1,500,000.00|Yes|1,377,742.72|
|(Hangzhou) United Research Institute Co.,||||||
|Ltd.||||||
|Hangzhou Wandong Electric Co., Ltd.|||||30,974.36|
|Greenesol power systems PVT Ltd.|Coupler|34,045.00||||
|Subtotal||214,068,663.08|||222,631,006.82|

 Related transactions regarding sales of goods or providing of services
In RMB
|||||
|-|-|-|-|
|Related parties|Subjects of the related transactions|Current term|Same period of last term|
||Steam turbine,compressor, Installation|||
|Hangzhou Steam Turbine Engineering Co., Ltd.||77,325,688.70|41,776,752.14|
||service|||
|Hangzhou Hangfa Power Generating Equipment|Cast parts|||
|||11,378,353.36|11,774,255.82|
|Co., Ltd.||||

|||||
|-|-|-|-|
|Hangzhou Steam Turbine Group|Infornation service|139,622.64|94,339.62|
|Hangzhou Steam Turbine Automobile Sales||||
||Small amount materials|24,393.29|841.62|
|Service Co., Ltd.||||
|Greenesol power systems PVT Ltd.|Part|984,273.41|2,472,014.43|
|Hangzhou Steam Turbine Compressor Co., Ltd.|Part, Industrial cooperation|382,017.01|115,384.62|
|Subtotal||90,234,348.41|56,233,588.25|

 Notes
（2）Information of related lease
The Company was lessor
In RMB
|||||
|-|-|-|-|
|||The lease income confirmed in|The lease income confirmed in|
|Name of lessee|Category of lease assets|||
|||this year|last year|
|Hangzhou Steam Turbine Compressor Co.,|House and Building|||
|||88,000.00||
|Ltd.||||

- The company waslessee：
In RMB
|||||
|-|-|-|-|
||Category of leased|The lease income confirmed in||
|Lessor|||Category of leased assets|
||assets|this year||
|HSTG|House and Building|||
|||3,725,637.47|3,394,797.92|
||Engineering|||
|HSTG||||
|||1,760,683.76|1,760,683.76|
||Equipment|||
|HSTG|Land use right|||
|||3,194,406.31|3,194,406.32|
|Hangzhou Steam Turbine Automobile Sales||||
||Site leasing|||
|||4,007,541.21|4,229,857.79|
|Service Co., Ltd.||||
|Subtotal||12,688,268.75|12,579,745.79|

（3）Related-party guarantee
The Company was guarantor
In RMB
||||||
|-|-|-|-|-|
|||||Execution accomplished or|
|Guarantor|Guarantee amount|Start date|End date||
|||||not|
|HSTG|100,000,000.00|November 30,2017|November 30,2019|No|

Notes
As stated in Note 5 (I) 26 of the financial statement, in accordance with the National Development Fund
Investment Contract, jointly signed by the Company, NDF, Turbine Industry Company and Hangzhou Steam
Turbine Group, the investment of the NDF on Turbine Industry Company, RMB 208,000,000.00, is repurchased
by the Hangzhou Steam Turbine Group, and the NDF asks the Company and Hangzhou Steam Turbine Group to provide guarantee for the fulfillment of Hangzhou Steam Turbine Group of the transferee equity obligations. The Company and Steam Turbine Company pledge to the NDF with a total of 32.2 million shares of Hangzhou Bank Co., Ltd. with book value of RMB 371,266,000.00,Dividend Receiviable of RMB 6,900,000.00 and the land use right with book value of RMB68,149,728.77.
（4）Related party asset transfer and debt restructuring
In RMB
|||||
|-|-|-|-|
|Related party|Content|Current term|Same period of last term|
|Hangzhou Steam Turbine Automobile Sales Service||||
||Purchase fixed assets|307,094.02||
|Co., Ltd.||||

（5）
Remunerations of key managements
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
|Remunerations of key managements|8,114,522.61|7,774,385.21|

 5. Other related transactions
(1) Service and power supply
(1)HSTG supplies water and power to the Company and some of the subsidiaries amounted to RMB13,218,180.11 this period.
(2)HSTG Group provided technical services to the company. The company paid technical service fees of RMB 1, 099,056.6 in the current period
（3）HSTG. provides property management services for its subsidiary which is Complete Technology Corporation, of which the fee of this period incurred in the property management is RMB54,104.78.
（4）Hangzhou Steam Turbine Automobile Sales& Service Co., Ltd. provided transportation to theCompany’s employees and RMB2,174,272.75 was paid this period.
(5) Hangzhou Steam Turbine Industry Co., Ltd. provided cleaning services to the Company and RMB1,100,628.92 was paid this period.
(2) Using of trademark
The Company pays RMB1,698,113.20 to HSTG for using of the registered trademark.
(3) Expenses paid on behalf the Company
1) During the current period, Hangzhou Steam Turbine Group advanced the payment of RMB 748,407.97 salaries for the company, and advanced the payment of RMB 2,250,793.32 for newspapers and magazines for the company.
2.Hangzhou Steam Turbine Automobile Sales& Service Co., Ltd. paid RMB6,456,212.32 of tarrif on behalf of
Turbine Co. during the period.
(4) Transfer of research and development projects
For details, please refer to Note XIII and (II) 1 of explanation in this financial statement.
(5) Transfer of external investment
In January 2017, the Company and Zhejiang JuQing Investment Co., Ltd signed the "Transfer Agreement", that the company transferred its entire holding equity of Hangzhou Changdi Equity Investment Partnership (Limited Partnership) to Zhejiang Juqiang at the price of RMB 73,680,000.00. Investment Co., Ltd. The confirmed investment gain was RMB 25,121,648.20.
(6) Bank credit and entrusted wealth-management
1) In the current period, the company applied for a credit line of RMB 300 million from the Shiqiao Sub-branch of Hangzhou Bank Co., Ltd to conduct business. As of December 31, 2017, the loan balance under this credit was nil.
2) In the current period, the company commissioned the wealth-management of RMB 1,125,000,000.00 to Bank of Hangzhou Co., Ltd. As of December 31, 2017, the balance of such wealth-management was RMB 230,000,000.00.
6. Receivables and payables of related parties
（1）Receivables
In RMB
|||||||
|-|-|-|-|-|-|
|||End of term||Beginning of term||
|Name|Related party|||||
|||Book balance|Bad debt provision|Book balance|Bad debt provision|
|Notes|Hangzhou Steam Turbine Engineering Co.,|||||
|||9,022,000.00||2,940,000.00||
|receivable|Ltd.|||||
||Hangzhou Hangfa Power Generating|||||
|||||2,000,000.00||
||Equipment Co., Ltd.|||||
|Subtotal||9,022,000.00||4,940,000.00||
|Account|Hangzhou Steam Turbine Engineering Co.,|||||
|||60,048,003.87|12,214,467.99|52,898,295.99|6,117,053.80|
|receivable|Ltd.|||||
||Hangzhou Hangfa Power Generating|||||
|||23,168,548.05|1,656,221.13|17,950,170.60|1,146,223.10|
||Equipment Co., Ltd.|||||
||Hangzhou Steam Turbine Power Group|||||
|||305,000.00|305,000.00|305,000.00|244,000.00|
||Complete Equipment Engineering Co., Ltd.|||||
||Hangzhou Steam Turbine Compressor Co.,|||||
|||59,000.00|17,700.00|59,000.00|5,900.00|
||Ltd.|||||
||Hangzhou Steam Turbine Group|158,500.00|158,500.00|158,500.00|158,500.00|
||Hangzhou Steam Turbine Automobile Sales|||||
|||||544.67|27.23|
||Service Co., Ltd.|||||
||Greenesol power systems PVT Ltd.|13,825,933.72|13,825,933.72|15,642,523.36|12,514,018.69|
|Subtotal||97,564,985.64|28,177,822.84|87,014,034.62|20,185,722.82|
||Hangzhou Hangfa Power Generating|||||
|Prepayment||43,741,785.00||21,515,346.37||
||Equipment Co., Ltd.|||||
||Hangzhou Steam Turbine Engineering Co.,|||||
|||2,022,000.00||||
||Ltd.|||||

||||||
|-|-|-|-|-|
||Zhejiang Zongrun Gas turbine technology||||
|||715,000.00|||
||Co., Ltd.||||
||Hangzhou Nanfang Tongda Gears Co., Ltd.|50,000.00|||
|Subtotal||46,528,785.00||21,515,346.37|
|Other|Hangzhou Steam Turbine Compressor Co.,||||
|||346,200.00|17,310.00||
|receivable|Ltd’||||
||Hangzhou Steam Turbine Group|39,105.34|1,955.27||
|Subtotal||385,305.34|19,265.27||

（2）Payables
In RMB
|||||
|-|-|-|-|
|Name|Related party|Amount at year|Amount at year beginning|
|Notes Payable|Hangzhou Steam Turbine Automobile Sales Service Co., Ltd|1,350,000.00|180,000.00|
||Hangzhou Steam Turbine Engineering Co., Ltd.|180,000.00||
||Hangzhou Nanhua Wooden Packaging Co., Ltd.||100,000.00|
|Subtotal||1,530,000.00|280,000.00|
|Account payable|Hangzhou Hangfa Power Generating Equipment Co., Ltd.|133,726,506.11|115,744,578.95|
||Greenesol power systems PVT Ltd.|3,219,116.49|3,595,145.76|
||Hangzhou Steam Turbine Group|79,982.49|3,395,546.79|
||Hangzhou Steam Turbine Automobile Sales Service Co., Ltd|8,809,544.81|7,504,708.74|
||Hangzhou Nanhua Wooden Packaging Co., Ltd.|1,667,167.51|963,509.03|
||Hangzhou Steam Turbine Engineering Co., Ltd.|3,510,000.00|1,780,566.04|
||HSTG (Hangzhou) United Institutes Co., Ltd.|542,775.00|597,075.00|
||Hangzhou Nanfang Tongda Gears Co., Ltd.|1,147,694.00|2,464,950.00|
||Hangzhou Steam Turbine Industrial Co., Ltd.|128,042.88|212,294.57|
||Hangzhou Wandong Electric Co., Ltd.||20,640.00|
|Subtotal||152,830,829.29|136,279,014.88|
|Advances||||
||Hangzhou Steam Turbine Engineering Co., Ltd.|31,613,190.00|38,972,720.00|
|received||||
||Hangzhou Steam Turbine Compressor Co., Ltd’|14,190,000.00|14,190,000.00|
||Greenesol power systems PVT Ltd.|51,968.30||
|Subtotal||45,855,158.30|53,162,720.00|
|Other account||||
||Hangzhou Steam Turbine Group|221,351.95|5,731,384.50|
|payable||||
||Hangzhou Steam Turbine Automobile Sales Service Co., Ltd|100,000.00|100,000.00|
|Subtotal||321,351.95|5,831,384.50|

XIII. Commitment and Contingency Issues
(I) Material commitment issues
1. External investment contracts engaged but not exercised or not fully exercised and related financial outflow As stated in Note 5 (I) 26 of the financial statement, Hangzhou Turbine Group will transfer its holding equity of Hangzhou Turbine Heavy Industry Co., Ltd. by stages to China Development Funds since 2019. After transfer, Hangzhou Turbine Group will transfer the transferred equity of Hangzhou Turbine Heavy Industry Co., Ltd to our Company at the same price.
2. Outsourcing contracts engaged with large amounts and are under processing or preparation
Capital commitment related to construction of workshops or purchasing of equipment by the Company or subsidiaries is amounted to RMB627.9077 million.
2. Contingency
(1) Material or contingent matters that exist at the date of the balance sheet
For details of guarantees provided for related parties, please refer to the notes for related parties and related transactions in the notes to this financial statement.
XIV. Enents after balance sheet date
(I) Important non-adjusting events
For details of that the company signed a relocation compensation agreement with Hangzhou Xiacheng District Urban Construction Investment Development Group Co., Ltd (hereinafter referred to as Xiacheng Urban Construction Investment Group) after the period, please refer to Note 13 (II) 2 of this financial statement.
(2) The Company have no significant contingency to disclose, also should be stated
1.Profit distribution
In RMB
|||
|-|-|
|Profit or dividend proposed to bedistributed|Based on the 2017 profit distribution plan reviewed and passed at the 20thmeeting of the 7th Board of Directors on March 26, 2018, and withoutdrawing up statutory surplus reserves, the company used a total of754,010,400 shares at the end of 2017 as the base to distribute cash to allshareholders for every 10 shares. The bonus is RMB 0.5 (including tax), and0 bonus shares will be sent to the company. Don't convert the public reservefund into share capital. The total profit distributed was RMB 37,700,520.00this time. The remaining undistributed profit was RMB 2,260,941,440.41.Theafore-said profit distribution plan still needs to be reviewed and approved bythe shareholders' general meeting.|

XV.Other significant events
1.Information of Division
(1) The companies,which have no report divisions or can not disclose the total assets and total liabilities of all
report divisions, shall give explanations.
The Company is single in its business, which is mainly for production and sales of steam turbines, gas turbines and auxiliary turbines. Thecompany’s management regard these businesses as a whole to implement management so as to evaluate the business performance, thus there will be no report divisions. According to the product classifications of main business income and main business cost, the Company will make details for them as follows:
||||
|-|-|-|
|Items|Main Business Income|Main Business Cost|
|Industrial Steam Turbine|2,692,843,753.69|1,989,579,236.24|
|Castings and Forging|91,384,682.32|68,739,724.43|
|Auxiliary Engines|118,292,027.16|91,269,179.11|
|Part|219,810,638.04|114,854,559.39|
|Other|186,805,569.85|94,459,151.66|
|Subtotal|3,309,136,671.06|2,358,901,850.83|

2．Other Significant Transactions and Matters influencing theInvestors’ Decisions
1. Matter of Transferring Gas Turbine Research and Development Project
From September 1, 2014 and by August 11, 2017, the actual investment amount of up-front cost for distributed-resource gas turbine research and development was invested with RMB 61,312,900 by the Company, The above-mentioned situations had been in special audit, whose audit report, Special Audit Report on Up-front Cost for Distributed-resource Gas Turbine Research and Development of Hangzhou Turbine Co., Ltd. (Pan-China Audit〔2017〕No.7796), was issued by Pan-China Certified Public Accountant(special general partner) on August 12, 2017
In September 2017, the Company signed Agreement of Transfer of Up-front Cost for Distributed-Resource Gas Turbine Research and Development with Hangzhou Turbine Group, where the Company transferred Project of Research and Development for 50MW Gas Turbine to Hangzhou Turbine Group, of which the transfer price was RMB 61,312,900.00 including tax.
2.Matter of Relocation Compensation for Factories in Shiqiao Road of Hangzhou Turbine Group
According to the planning of the Hangzhou Municipal Government, the property right bodies of 6 companies including Hangzhou Steam Turbine Group and Hangzhou Steam Turbine Company within the plant area of Hangzhou Steam Shiqiao Road factory area were included in the scope of the Expropriation and Relocation Planning. According to the Hangzhou Municipal People's Government's Minutes (Hangfu Minutes[2016] No. 87) on the relevant issues concerning the compensation for the relocation of the Steam Turbine Shiqiao road plant area and the spirit of the minutes (Hangfu Minutes[2016] No. 47)of the special meeting of Hangzhou Municipal people's Government on the relevant issues concerning speeding up the relocation of the Shiqiao Road Factory area of Hangzhou Steam Turbine and the Construction of the Hangzhou Steam Turbine Heavy Industry Project, Hangzhou Municipal Government, in accordance with the principle of "one factory, one policy", determines that the compensation for the overall relocation of the plant area of Hangzhou Steam Turbine Shiqiao road plant is RMB 1.815 billion, with the compensation contents include the compensation for physical assets such as
buildings, structures, housing renovations, equipment, and land within the area of relocation, as well as personnel
resettlement fees, compensation fees for shutdown loss and production stoppage loss and incentive fees, and the
compensation agreement shall be signed by the Xiacheng Urban Construction Investment Group-the land-making
main-body affiliated to Hangzhou Xiacheng District Municipal Government with each relocation unit. The
property rights bodies within the scope of the relocation shall complete the relocation by December 31, 2019, and evacuate the houses and hand them over to the land-making main-body of the government, the houses shall not be demolished or damaged without authorization, and the residual value of the houses after the handing over shall be possessed by the Urban Construction Investment Group.
On March 21, 2018, based on the evaluation opinion of Kunyuan Assets Appraisal Co., Ltd (No. 606-2017 Kunnyuan Appraisal Report, No. 609-2017 Kunnyuan Appraisal Report, No. 18-2018 Kunnyuan Appraisal Report,), the company signed the “Relocation Compensation Agreement for Non-residential Buildings on State-owned Land” with Xiacheng Urban Construction Investment Group, and determined that Xiacheng Urban Construction Investment Group shall make full monetary relocation compensation for the Company and its subsidiary the Machinery Company, with the total amount of compensation for various physical assets and expenses is RMB 1,305,950,300.00 (Including the incentive fee of RMB 34,892,770.00), and this aforementioned compensation shall be firstly collected by Hangzhou Steam Turbine Group and then Hangzhou Steam Turbine Group pays such amount to the Company and the Machinery Company. The company and its subsidiary the Machinery Company received the first compensation of 237,658,831.07 transferred from Hangzhou Steam Turbine Group in December 2017, which was listed in the special account payable.
XVI. Notes to the Financial Statements of the Parent Co.
(I) Notes to items of parent company financial statements
1. Account receivable
（1）Detailed categories
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||End of term|||||Beginning of term|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|||||||||||
|||Proportion||Proportion|Book value||Proportion||Proportion|Book value|
||Amount||Amount|||Amount||Amount|||
|||%||%|||%||%||
|Receivables provided bad|||||||||||
|debt provision in cridit|1,975,235,478.30|98.51%|779,285,370.98|39.45%|1,195,950,107.32|2,177,424,114.16|98.65%|752,473,417.58|34.56%|1,424,950,696.58|
|risk groups|||||||||||
|Account receivable with|||||||||||
|Not minor individual|||||||||||
||29,819,607.69|1.49%|29,819,607.69|100.00%||29,819,607.69|1.35%|29,819,607.69|100.00%||
|amount but bad debt|||||||||||
|provision is provided|||||||||||
|Total|2,005,055,085.99|100.00%|809,104,978.67|40.35%|1,195,950,107.32|2,207,243,721.85|100.00%|782,293,025.27|35.44%|1,424,950,696.58|

 Receivables with individually significant amount and provision for bad and doubtful debts individually provided at the end of the reporting period.
Not applicable
Receivable accounts in the group on which bad debt provisions are provided on age basis
In RMB
|||||
|-|-|-|-|
||End of term|||
|Aging||||
||Other receivable account|Bad debt provision|Proportion%|
|Subitem within 1 year||||
|Subtotal within 1 year|478,434,200.92|23,921,710.05|5.00%|
|1-2 years|374,762,394.59|37,476,239.46|10.00%|
|2-3 years|252,914,593.83|75,874,378.15|30.00%|
|Over 3 years|783,630,869.14|642,013,043.32||
|3-4 years|233,487,435.34|140,092,461.20|60.00%|
|4-5 years|241,114,258.39|192,891,406.71|80.00%|
|Over 5 years|309,029,175.41|309,029,175.41|100.00%|
|Total|1,889,742,058.48|779,285,370.98|41.24%|

 Receivable accounts combined within consolidating range for providing of bad debt provisions
|||||
|-|-|-|-|
|Name|End of term|||
||Book balance|Bad debt provision|Providing rate %|
|Combinations of related transactionsin consolidation range|85,493,419.82|||
|Subtotal|85,493,419.82|||

Remarks on deciding of combinations:
Receivable accounts and other receivable accounts within the consolidation range are tested for impairment individually. No bad debt provision is provided in case there is no impairment occurred.
Receivables with provision for bad and doubtful debts based on the balance percentage method in the portfolio Not applicable
(2) Provision of allowance for doubtful debts within this year is RMB35,924,444.57 and no recovery or reversal of provision during the year.
(3) Receivable accounts actually written off in the report period
In RMB
|||
|-|-|
|Items|Amount|
|Uncollectible amount|9,112,491.17|

The significant actual write-off accounts receivable:
In RMB
|||||||
|-|-|-|-|-|-|
||||||Arising from|
||Nature of|||||
||||Reason for||related|
|Name|account|Amount written off||Verification procedures||
||||written-off||transactions(Y/N|
||receivable|||||
||||||)|

|||||||
|-|-|-|-|-|-|
||||Uncollectible|The examined and adopted to||
|Shenyang Touping Machanical Co., Ltd.|Goods|3,301,440.00|||No|
||||amount|Board of directors||
||||Uncollectible|The examined and adopted to||
|China Air Separation Engineering Co., Ltd.|Goods|1,674,643.00|||No|
||||amount|Board of directors||
|Huaneng Energy saving Powergeneration Co.,|||Uncollectible|The examined and adopted to||
||Goods|760,000.00|||No|
|Ltd.|||amount|Board of directors||
|Zhongpye Saidi Engineering Technology Co.,|||Uncollectible|The examined and adopted to||
||Goods|758,160.00|||No|
|Ltd.|||amount|Board of directors||
|Hebei Iron and steel Group Yanshan Steel Co.,|||Uncollectible|The examined and adopted to||
||Goods|623,280.00|||No|
|Ltd.|||amount|Board of directors||
|Nei Monggol Runbang Biogechnology Co.,|||Uncollectible|The examined and adopted to||
||Goods|620,000.00|||No|
|Ltd.|||amount|Board of directors||
||||Uncollectible|The examined and adopted to||
|Other|Goods|1,374,968.17|||No|
||||amount|Board of directors||
|Total|--|9,112,491.17|--|--|--|

（4）Receivables account of the top five parties
|||||
|-|-|-|-|
|Name|Amount|Proportion(%)|Bad debt provision|
|Client 1|552,373,954.92|27.55|272,568,290.12|
|Client 2|278,524,230.82|13.89|190,839,875.82|
|Client 3|54,877,438.40|2.74|26,261,537.27|
|Client 4|46,363,500.00|2.31|2,318,175.00|
|Client 5|45,439,245.99|2.27|11,435,017.59|
|Subtotal|977,578,370.13|48.76|503,422,895.80|

2. Other account receivable
（1）Chassification
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||End of term|||||Beginning of term|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|||||||||||
|||Proportion|||Book value||Proportio|||Book value|
||Amount||Amount|Proportion %||Amount||Amount|Proportion %||
|||%|||||n %||||
|Other receivables provided bad|||||||||||
|debt provision in credit risk|9,976,732.52|100.00%|5,665,193.66|56.78%|4,311,538.86|74,189,903.93|100.00%|6,185,197.69|8.34%|68,004,706.24|
|groups|||||||||||
|Total|9,976,732.52|100.00%|5,665,193.66|56.78%|4,311,538.86|74,189,903.93|100.00%|6,185,197.69|8.34%|68,004,706.24|

 Other Receivable accounts with large amount individually and bad debt provisions were provided
Not applicable
Other receivable accounts in the group on which bad debt provisions are provided on age basis
In RMB
|||||
|-|-|-|-|
||End of term|||
|Age||||
||Other receivable account|Bad debt provision|Proportion%|
|Subitem within 1 year||||
|Subtotal within 1 year|1,930,445.58|96,522.28|5.00%|
|1-2 years|165,648.00|16,564.80|10.00%|
|2-3 years|937,097.00|281,129.10|30.00%|
|Over 3 years|5,982,942.24|5,270,977.48||
|3-4 years|1,543,565.90|926,139.54|60.00%|
|4-5 years|472,692.00|378,153.60|80.00%|

|||||
|-|-|-|-|
|Over 5 years|3,966,684.34|3,966,684.34|100.00%|
|Total|9,016,132.82|5,665,193.66|62.83%|

Notes：
Receivable accounts combined within consolidating range for providing of bad debt provisions
|||||
|-|-|-|-|
|Name|End of term|||
||Book balance|Bad debt provision|Providing rate %|
|Combinations of related transactionsin consolidation range|960,599.70|||
|Subtotal|960,599.70|||

Remarks on deciding of combinations:
Receivable accounts and other receivable accounts within the consolidation range are tested for impairment individually. No bad debt provision is provided in case there is no impairment occurred.
Other receivables with provision for bad and doubtful debts based on the balance percentage method in the portfolio
Not applicable
Other receivables with provision for bad and doubtful debts based on the other method in the portfolio
Not applicable
（2）Bad debt provision withdrawal, reversed or recovered in the report period.
Provision of allowance for doubtful debts within this year is RMB -520,004.03 and no recovery or reversal of provision during the year.
(3) Other accounts receivable classified by the nature of accounts
In RMB
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Related party funds||60,000,000.00|
|Deposit|8,081,489.08|13,039,563.14|
|Pretty cash|231,000.00|167,900.00|
|Provisional accounts receivable|1,006,799.70|982,440.79|
|Other|657,443.74||
|Total|9,976,732.52|74,189,903.93|

 (4) Top 5 of the closing balance of Other accounts receivable
In RMB
|||||||
|-|-|-|-|-|-|
|||||Percentage in total other||
|Name of the company|Account property|Book balance|Age||Bad debt provision|
|||||receivable %||
||Deposit in custom|||||
|Shanghai Customs Waigaoqiao Office||3,710,320.94|Over 5 years|37.19%|3,710,320.94|
|China Electric Power Complete||||||
||Deposit in custom|||||
|||800,000.00|Within 1 year|8.02%|40,000.00|
|Equipment Co., Ltd.||||||

|||||||
|-|-|-|-|-|-|
|Guoxin Bidding Group Co., Ltd.|Deposit in custom|800,000.00|2-3 years|8.02%|240,000.00|
|Hangzhou Steam Turbine Casting Co.,|Related party|||||
|||578,527.34|Within 1 year|5.80%||
|Ltd.|funds|||||
|Jian Group Co., Ltd.|Deposit in custom|500,000.00|3-4 years|5.01%|300,000.00|
|Total|--|6,388,848.28|--|64.04%|4,290,320.94|

 3. Long-term share equity investment
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of term|||Beginning of term|||
|Items||Impairment|||Impairment||
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||
|Investment on|||||||
||502,919,378.03||502,919,378.03|502,919,378.03||502,919,378.03|
|subsidiaries|||||||
|Total|502,919,378.03||502,919,378.03|502,919,378.03||502,919,378.03|

 (1) Investment on subsidiaries
In RMB
||||||||
|-|-|-|-|-|-|-|
||||||Provided||
|||||||Impairment|
|||Increased this|Current term||current term||
|Company invested in|Beginning of term|||End of term||provision|
|||period|decrease||Impairment||
|||||||End of term|
||||||provision||
|Touping Company|||||||
||20,000,000.00|||20,000,000.00|||
|Hangzhou Heavy|||||||
||360,000,000.00|||360,000,000.00|||
|Industry|||||||
|Hangzhou Auxiliary|||||||
||46,286,513.41|||46,286,513.41|||
|Machine Co.|||||||
|Zhejiang Turbine|||||||
||29,800,389.56|||29,800,389.56|||
|Packaged Co.|||||||
|Zhongneng Co.|27,644,475.06|||27,644,475.06|||
|Machinery Co.|7,968,000.00|||7,968,000.00|||
|Casting Co.|11,220,000.00|||11,220,000.00|||
|Subtotal|502,919,378.03|||502,919,378.03|||

4. Business income and Business cost
In RMB
||||
|-|-|-|
||Amount of current period|Amount of previous period|
|Items|||

||||||
|-|-|-|-|-|
||Income|Cost|Income|Cost|
|Main business|2,056,532,812.35|1,599,774,611.48|2,128,910,906.33|1,546,003,243.12|
|Other business|140,183,662.39|94,531,608.36|14,563,244.25|10,829,495.21|
|Total|2,196,716,474.74|1,694,306,219.84|2,143,474,150.58|1,556,832,738.33|

 5..Investment income
In RMB
||||
|-|-|-|
||Amount of current period|Amount of previous period|
|Items|||
|Long-term equity investment income by Cost method|66,008,407.50|83,728,812.50|
|Investment income received from holding of available-for –sale financial assets|53,014,898.47|2,587,659.70|
|Investment income from disposal of available for sale financial assets|25,121,648.20||
|Financing product investment inocme|23,685,866.69|16,130,017.82|
|Total|167,830,820.86|102,446,490.02|

 XVII. Supplementary Information
1. Particulars about current non-recurring gains and loss
In RMB
||||
|-|-|-|
|Items|Amount|Notes|
|Gains/losses from the disposal of non-current asset|6,608,574.41||
|Tax refund, deduction and exemption that is examined and approved by|||
||1,250,418.38||
|authority exceeding or has no official approval document.|||
|Governmental subsidy calculated into current gains and loess（while closely|||
|related with the normal business of the Company, excluding the fixed-amount|||
||8,945,252.87||
|or fixed-proportion governmental subsidy according to the unified national|||
|standard）|||
|Except the effective hedge business related to the normal operation business|||
|of the Company, the profit and loss in the changes of fair values caused by|||
|the holding of tradable financial assets and tradable financial liabilities as|62,623,000.27||
|well as the investment returns in disposal of tradable financial assets, tradable|||
|financial liabilities and saleable financial assets|||
|Other non-business income and expenditures other than the above|6,505,882.53||
|Less ：Influenced amount of income tax|11,777,992.62||
|Amount of influence of minority interests|3,941,380.48||
|Total|70,213,755.36|--|

For theCompany’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.
Not applicable
(II) Net income on asset ratio and earning per share
|||||
|-|-|-|-|
||Weighted|Earnings per share (yuan/share)||
||average net|||
|Profit of the report period||Basic earnings per||
||||Diluted earnings per|
||income on|||
|||share|share|
||asset %|||
|Net profit attributable to common shareholders of the Company|1.12%|0.09|0.09|
|Net profit attributable to the common owners of the PLC after deducting of|-0.02%|-0.002|-0.002|
|non-recurring gains/losses||||

 Hangzhou Steam Turbine Co., Ltd. March 28, 2018