Stock Code: 200771 Stock ID: Hangqilun B Announcement No. 2016-22 Hangzhou Steam Turbine Co., Ltd.
Auditors’ Report 2015
Table of Contents
I. TheAuditors’ Report
II. Financial Statements
(I) Consolidated Balance Sheet
(II) Balance Sheet of the Parent Co.
(III) Consolidated Income Statement
(IV) Income Statement of the Parent Co.
(V) Consolidated Cash Flow Statement
(VI) Cash Flow Statement of the Parent Co.
(VII) Consolidated Statement of Change inShareholders’ Equity
(VIII) Statement of Change inShareholders’ Equity (Parent Co.)
III. Notes to the Financial Statements
Auditors’ Report
Tian Jian ShenNo.〔2016〕978
To the entire shareholders of Hangzhou Steam Turbine Co., Ltd.
We have audited the Financial Statements of Hangzhou Steam Turbine Co., Ltd. (the Company) attached hereafter, including the Balance Sheet and Consolidated Balance Sheet ended December 31, 2015, Income Statement and Consolidated Income Statement, Cash Flow Statement and Consolidated Cash Flow Statement, Statement of Change in Share Equities and Consolidated Statement of Change in Share Equities of year 2015, as well as the notes to the Financial Statements.
I.Executives’ responsibilities on the Financial Statements
Preparing and appropriately presenting of the Financial Statements are the responsibilities of the management of The Company. This responsibilities are including: (1) Preparing the financial statements according to Enterprise Accounting Standards and make them reflecting a fair basis. (2) Design, implement and maintain the internal control system related to producing of the Financial Statements, to prevent the Financial Statements from major false presentation due to cheating or error.
II. Responsibilities of the CPA
Our responsibilities are to issue auditing opinions on the Financial Statements basing on the auditing workswe’ve done on them. We carried out the auditing works with compliance to Chinese CPA Auditing Standard, which requires us to plan and implement our works on the basis of professional ethic standards, and obtain reasonable guarantee that the Financial Statements are free of major false statements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider the internal control relevant to theentity’s preparation of financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting polices used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III.Auditors’ Opinions
We believe that the Company has been following with the Enterprise Accounting Standard in preparing of the Financial Statements. The Financial Statements is reflecting, both of the Company and the consolidated, in all important aspects, the financial situation of Hangzhou Steam Turbine Co., Ltd. as of December 31, 2015 and the business performance and cash flow of year 2015 both of the Company and the consolidated.
Pan-China Certified Public Accountants (Special common partnership) CPA China Jiang Xiaodong: Hangzhou China CPA China : Zhu Guogang
March 17, 2016
II. Financial statements
Currency unit for the statements in the notes to these financial statements:RMB
1. Consolidated balance sheet
Preparedby:：Hangzhou Steam Turbine Co., Ltd.
December 31,2016
In RMB
||||
|-|-|-|
|Items|At the end of term|Beginning of term|
|Current asset：|||

||||
|-|-|-|
|Monetary fund|751,596,796.24|613,958,063.91|
|Settlement provision|||
|Outgoing call loan|||
|Financial assets measured at fair value with variations|||
|accounted into current income account|||
|Derivative financial assets|||
|Bill receivable|680,518,943.49|701,109,938.01|
|Account receivable|2,096,090,157.61|2,388,919,641.98|
|Prepayments|139,267,324.65|172,022,768.39|
|Insurance receivable|||
|Reinsurance receivable|||
|Provisions of Reinsurance contracts receivable|||
|Interest receivable|||
|Dividend receivable|||
|Other account receivable|25,574,057.29|25,382,223.32|
|Repurchasing of financial assets|||
|Inventories|1,826,869,838.60|1,594,074,228.69|
|Assets held for sales|||
|Non-current asset due in 1 year|||
|Other current asset|427,203,835.44|382,070,235.56|
|Total of current assets|5,947,120,953.32|5,877,537,099.86|
|Non-current assets：|||
|Loans and payment on other’s behalf disbursed|||
|Disposable financial asset|509,409,741.77|498,990,862.94|
|Expired investment in possess|||
|Long-term receivable|||
|Long term share equity investment|||
|Property investment|||
|Fixed assets|642,155,636.34|678,033,380.86|
|Construction in progress|119,187,107.52|89,469,259.14|
|Engineering material|||
|Fixed asset disposal|||
|Production physical assets|||
|Gas & petrol|||
|Intangible assets|304,949,207.18|304,100,619.77|
|R & D petrol|||
|Goodwill|||
|Long-germ expenses to be amortized|2,029,471.80|1,041,796.52|
|Differed income tax asset|158,924,887.70|102,885,927.93|
|Other non-current asset|||
|Total of non-current assets|1,736,656,052.31|1,674,521,847.16|
|Total of assets|7,683,777,005.63|7,552,058,947.02|
|Current liabilities|||
|Short-term loans|85,350,000.00|198,600,000.00|
|Loan from Central Bank|||
|Deposit received and hold for others|||
|Call loan received|||
|Financial liabilities measured at fair value with variations|||
|accounted into current income account|||
|Derivative financial liabilities|||
|Bill payable|194,226,049.73|150,763,452.14|
|Account payable|810,420,381.45|763,085,718.92|
|Advance payment|1,736,820,949.19|1,374,736,209.67|

||||
|-|-|-|
|Selling of repurchased financial assets|||
|Fees and commissions receivable|||
|Employees’ wage payable|70,257,474.46|65,672,706.09|
|Tax payable|36,008,109.09|126,091,260.73|
|Interest payable|||
|Dividend payable|||
|Other account payable|29,705,125.51|29,597,889.12|
|Reinsurance fee payable|||
|Insurance contract provision|||
|Entrusted trading of securities|||
|Entrusted selling of securities|||
|Liabilities held for sales|||
|Non-current liability due in 1 year|300,000.00||
|Other current liability|||
|Total of current liability|2,963,088,089.43|2,708,547,236.67|
|Non-current liabilities：|||
|Long-term loan|123,400,000.00|18,500,000.00|
|Bond payable|||
|Including：preferred stock|||
|Sustainable debt|||
|Long-term payable|330,000.00|330,000.00|
|Long-term payable employees’s remuneration|||
|Special payable|||
|Expected liabilities|||
|Deferred income|6,804,425.00|8,252,705.00|
|Deferred income tax liability|1,017,473.05|1,017,473.05|
|Other non-current liabilities|||
|Total non-current liabilities|131,551,898.05|28,100,178.05|
|Total of liability|3,094,639,987.48|2,736,647,414.72|
|Owners’ equity|||
|Share capital|754,010,400.00|754,010,400.00|
|Other equity instrument|||
|Including：preferred stock|||
|Sustainable debt|||
|Capital reserves|139,590,345.09|139,590,345.09|
|Less：Shares in stock|||
|Other comprehensive income|-852,752.00|-640,401.72|
|Special reserves|31,764,920.51|24,603,149.96|
|Surplus reserves|621,112,807.78|621,112,807.78|
|Common risk provision|||
|Undistributed profit|2,673,711,591.42|2,911,921,943.21|
|Total of owner’s equity belong to the parent company|4,219,337,312.80|4,450,598,244.32|
|Minority shareholders’ equity|369,799,705.35|364,813,287.98|
|Total of owners’ equity|4,589,137,018.15|4,815,411,532.30|
|Total of liabilities and owners’ equity|7,683,777,005.63|7,552,058,947.02|

 Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao
2.Parent Company Balance Sheet
In RMB
||||
|-|-|-|
|Items|At the end of term|Beginning of term|
|Current asset：|||
|Monetary fund|387,916,202.79|248,509,410.84|
|Financial assets measured at fair|||
|value with variations accounted|||
|into current income account|||
|Derivative financial assets|||
|Bill receivable|365,504,827.88|385,543,218.94|
|Account receivable|1,637,391,672.98|2,010,980,253.99|
|Prepayments|53,440,645.95|72,514,421.98|
|Interest receivable|||
|Dividend receivable|||
|Other account receivable|12,245,371.97|33,537,812.35|
|Inventories|1,454,420,457.64|1,159,102,793.67|
|Assets held for sales|||
|Non-current asset due in 1 year|||
|Other current asset|170,653,680.58|30,000,000.00|
|Total of current assets|4,081,572,859.79|3,940,187,911.77|
|Non-current assets：|||
|Disposable financial asset|465,604,378.26|454,010,862.94|
|Expired investment in possess|||
|Long-term receivable|||
|Long term share equity|||
||502,919,378.03|502,919,378.03|
|investment|||
|Property investment|||
|Fixed assets|334,677,256.20|354,282,465.72|
|Construction in progress|79,982,551.34|67,302,264.59|
|Engineering material|||
|Fixed asset disposal|||
|Production physical assets|||
|Gas & petrol|||
|Intangible assets|177,872,266.49|181,918,239.41|
|R & D petrol|||
|Goodwill|||
|Long-germ expenses to be|||
||761,660.66|1,015,547.54|
|amortized|||
|Differed income tax asset|120,771,991.85|74,164,090.15|
|Other non-current asset|||
|Total of non-current assets|1,682,589,482.83|1,635,612,848.38|
|Total of assets|5,764,162,342.62|5,575,800,760.15|
|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|13,500,000.00||
|Account payable|436,004,535.90|448,755,575.94|
|Advance payment|1,428,724,224.76|977,630,617.45|
|Employees’ wage payable|51,373,858.57|44,164,067.67|
|Tax payable|3,538,126.39|88,238,458.17|
|Interest payable|||
|Dividend payable|||
|Other account payable|20,338,742.44|19,738,024.51|
|Classified as held for sale debt|||
|Non-current liability due in 1|||
|year|||
|Other current liability|||
|Total of current liability|1,953,479,488.06|1,678,526,743.74|
|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|||
|Expected liabilities|||
|Deferred income|22,250.00|111,250.00|
|Deferred income tax liability|1,017,473.05|1,017,473.05|
|Other non-current liabilities|||
|Total of Non-current liabilities|101,039,723.05|1,128,723.05|
|Total of liability|2,054,519,211.11|1,679,655,466.79|
|Owners’ equity|||
|Share capital|754,010,400.00|754,010,400.00|
|Other equity instrument|||
|Including：preferred stock|||
|Sustainable debt|||
|Capital reserves|138,953,250.09|138,953,250.09|
|Less：Shares in stock|||
|Other comprehensive income|||
|Special reserves|13,098,989.67|10,511,915.73|
|Surplus reserves|602,356,402.65|602,356,402.65|
|Undistributed profit|2,201,224,089.10|2,390,313,324.89|
|Total of owners’ equity|3,709,643,131.51|3,896,145,293.36|
|Total of liabilities and owners’|||
||5,764,162,342.62|5,575,800,760.15|
|equity|||

Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao
3.Consolidated Profit statement
In RMB
||||
|-|-|-|
|||Same period of the previous|
|Items|Report period||
|||year|
|I. Income from the key business|2,600,072,151.63|3,722,331,920.13|
|Incl：Business income|2,600,072,151.63|3,722,331,920.13|
|Interest income|||
|Insurance fee earned|||
|Fee and commission received|||
|II. Total business cost|2,820,446,852.60|3,280,418,813.78|
|Incl：Business cost|1,805,941,522.77|2,363,125,652.50|
|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|12,014,265.08|30,181,499.93|
|Sales expense|156,702,806.61|158,590,899.44|
|Administrative expense|608,221,129.48|592,118,584.23|
|Financial expenses|-7,563,749.45|15,255,789.99|
|Asset impairment loss|245,130,878.11|121,146,387.69|
|Add：Gains from change of fir value （“-”for loss）|||
|Investment gain（“-”for loss）|48,366,797.30|44,749,895.58|
|Incl: investment gains from affiliates|||
|Gains from currency exchange（“-”for loss）|||
|III. Operational profit（“-”for loss）|-172,007,903.67|486,663,001.93|
|Add ：Non-operational income|29,025,777.14|24,073,116.78|
|Including：Income from disposal of non-current|||
|assets|||
|Less：Non business expenses|5,206,380.51|9,404,298.16|
|Incl：Loss from disposal of non-current assets|||
|IV.Total profit(“-”for loss)|-148,188,507.04|501,331,820.55|
|Less：Income tax expenses|-24,157,778.85|77,385,100.71|

||||
|-|-|-|
|V. Net profit|-124,030,728.19|423,946,719.84|
|Net profit attributable to the owners of parent|||
||-162,809,311.79|352,077,352.23|
|company|||
|Minority shareholders’ equity|38,778,583.60|71,869,367.61|
|VI. Other comprehensive income|-498,713.66|-183,791.92|
|Net of profit of other comprehensive income attributab|||
||-212,350.28|-78,257.87|
|le to owners of the parent company.|||
|（I）Other comprehensive income items that will not|||
|be reclassified into gains/losses in the subsequent|||
|accounting period|||
|1.Re-measurement of defined benefit plans of changes|||
|in net debt or net assets|||
|2.Other comprehensive income under the equity meth|||
|od investee can not be reclassified into profit or loss.|||
|（II）|||
||-212,350.28|-78,257.87|
|Other comprehensive income that will be reclassified i|||
|nto profit or loss.|||
|1.Other comprehensive income under the equity meth|||
|od investee can be reclassified into profit or loss.|||
|2.Gains and losses from changes in fair value availabl|||
|e for sale financial assets|||
|3.Held-to-maturity investments reclassified to gains an|||
|d losses of available for sale financial assets|||
|4.The effective portion of cash flow hedges and losses|||
|5.Translation differences in currency financial stateme|||
||-212,350.28|-78,257.87|
|nts|||
|6.Other|||
||-286,363.38|-105,534.05|
|Net of profit of other comprehensive income attributab|||
|le to Minority shareholders’ equity|||
|VII. Total comprehensive income|-124,529,441.85|423,762,927.92|
|Total comprehensive income attributable to the owner|||
||-163,021,662.07|351,999,094.36|
|of the parent company|||
|Total comprehensive income attributable minority|||
||38,492,220.22|71,763,833.56|
|shareholders|||
|VIII. Earnings per share|||
|（I）Basic earnings per share|-0.22|0.47|
|(II)Diluted earnings per share|-0.22|0.47|

 If there are entities merged under common control, their net profit realized before the merger were totaled toRMB***. While it wasRMB*** previous period.
Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao
4. Profit statement of the Parent Company
In RMB
||||
|-|-|-|
|Items|Report period|Same period of the|

||||
|-|-|-|
|||previous year|
|I. Income from the key business|1,555,496,371.53|2,584,209,968.34|
|Incl：Business cost|1,178,553,025.63|1,799,938,721.33|
|Business tax and surcharge|1,398,294.87|17,427,285.87|
|Sales expense|106,769,296.56|105,371,526.65|
|Administrative expense|381,197,193.85|356,505,227.23|
|Financial expenses|-2,524,709.34|14,178,027.98|
|Asset impairment loss|210,969,678.28|89,634,090.49|
|Add：Gains from change of fir value （“-”for loss）|||
|Investment gain（“-”for loss）|149,604,635.99|196,903,483.48|
|Incl: investment gains from affiliates|||
|II. Operational profit（“-”for loss）|-171,261,772.33|398,058,572.27|
|Add ：Non-operational income|12,361,410.34|9,768,097.16|
|Including：Income from disposal of non-current assets|10,283.00||
|Less：Non business expenses|1,955,547.08|4,565,898.06|
|Incl：Loss from disposal of non-current assets|41,138.39|10,307.63|
|III.Total profit(“-”for loss)|-160,855,909.07|403,260,771.37|
|Less：Income tax expenses|-47,167,713.28|30,379,474.06|
|IV. Net profit（“-”for net loss）|-113,688,195.79|372,881,297.31|
|V.Net of profit of other comprehensive income|||
|（I）Other comprehensive income items that will not be|||
|reclassified into gains/losses in the subsequent|||
|accounting period|||
|1.Re-measurement of defined benefit plans of changes in|||
|net debt or net assets|||
|2.Other comprehensive income under the equity method|||
|investee can not be reclassified into profit or loss.|||
|（ II ）|||
|Other comprehensive income that will be reclassified int|||
|o profit or loss.|||
|1.Other comprehensive income under the equity method|||
|investee can be reclassified into profit or loss.|||
|2.Gains and losses from changes in fair value available f|||
|or sale financial assets|||
|3.Held-to-maturity investments reclassified to gains and|||
|losses of available for sale financial assets|||
|4.The effective portion of cash flow hedges and losses|||
|5.Translation differences in currency financial statement|||
|s|||
|6.Other|||
|VI. Total comprehensive income|-113,688,195.79|372,881,297.31|
|VII. Earnings per share：|||
|（I）Basic earnings per share|-0.15|0.49|
|(II)Diluted earnings per share|-0.15|0.49|

Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo 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|||
||2,631,164,968.80|3,095,800,715.65|
|services|||
|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|11,497,951.32|1,578,096.69|
|Other cash received from business operation|30,394,059.57|24,600,078.90|
|Sub-total of cash inflow|2,673,056,979.69|3,121,978,891.24|
|Cash paid for purchasing of merchandise and|||
||1,231,551,085.85|1,650,151,599.93|
|services|||
|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|667,800,831.48|669,696,270.69|
|Taxes paid|235,921,800.21|332,251,371.45|
|Other cash paid for business activities|182,105,489.10|186,150,677.25|
|Sub-total of cash outflow from business activities|2,317,379,206.64|2,838,249,919.32|
|Cash flow generated by business operation, net|355,677,773.05|283,728,971.92|
|II.Cash flow generated by investing|||
|Cash received from investment retrieving|1,174,636.49||
|Cash received as investment gains|48,366,797.30|44,749,895.58|
|Net cash retrieved from disposal of fixed assets,|||
||478,632.20|927,320.02|
|intangible assets, and other long-term assets|||
|Net cash received from disposal of subsidiaries or|||
|other operational units|||
|Other investment-related cash received|1,744,905,999.95|1,813,194,104.88|
|Sub-total of cash inflow due to investment|||
||1,794,926,065.94|1,858,871,320.48|
|activities|||
|Cash paid for construction of|||
|fixed assets, intangible assets|87,236,497.77|86,598,823.54|
|and other long-term assets|||
|Cash paid as investment|11,593,515.32|26,641,036.07|

||||
|-|-|-|
|Net increase of loan against pledge|||
|Net cash received from subsidiaries and other|||
|operational units|||
|Other cash paid for investment activities|1,792,105,999.95|1,871,400,000.00|
|Sub-total of cash outflow due to investment|||
||1,890,936,013.04|1,984,639,859.61|
|activities|||
|Net cash flow generated by investment|-96,009,947.10|-125,768,539.13|
|III.Cash flow generated by financing|||
|Cash received as investment|11,740,000.00|1,260,000.00|
|Incl: Cash received as investment from minor|||
||11,740,000.00|1,260,000.00|
|shareholders|||
|Cash received as loans|200,650,000.00|249,800,000.00|
|Cash received from bond placing|||
|Other financing –related ash received||300,000,000.00|
|Sub-total of cash inflow from financing activities|212,390,000.00|551,060,000.00|
|Cash to repay debts|208,700,000.00|409,600,000.00|
|Cash paid as dividend, profit, or interests|143,465,665.55|247,818,256.90|
|Incl: Dividend and profit paid by subsidiaries to|||
||56,211,585.00|80,461,415.00|
|minor shareholders|||
|Other cash paid for financing activities||300,000,000.00|
|Sub-total of cash outflow due to financing|||
||352,165,665.55|957,418,256.90|
|activities|||
|Net cash flow generated by financing|-139,775,665.55|-406,358,256.90|
|IV. Influence of exchange rate alternation on cash|||
||6,568,940.63|232,741.14|
|and cash equivalents|||
|V.Net increase of cash and cash equivalents|126,461,101.03|-248,165,082.97|
|Add: balance of cash and cash equivalents at the|||
||562,763,561.50|810,928,644.47|
|beginning of term|||
|VI ..Balance of cash and cash equivalents at the|||
||689,224,662.53|562,763,561.50|
|end of term|||

Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao
6. Cash Flow Statement of the Parent Company
In RMB
||||
|-|-|-|
|Items|Amount in this period|Amount in last period|
|I.Cash flows from operating activities|||
|Cash received from sales of goods or rending of services|1,635,853,743.22|1,900,714,754.53|
|Tax returned|9,328,982.41||
|Other cash received from business operation|3,889,695.82|8,818,961.35|
|Sub-total of cash inflow|1,649,072,421.45|1,909,533,715.88|
|Cash paid for purchasing of merchandise and services|703,949,384.41|1,013,159,494.53|
|Cash paid to staffs or paid for staffs|458,460,020.00|469,600,583.04|
|Taxes paid|97,136,615.44|163,533,253.01|
|Other cash paid for business activities|113,710,360.58|105,859,510.42|
|Sub-total of cash outflow from business activities|1,373,256,380.43|1,752,152,841.00|
|Cash flow generated by business operation, net|275,816,041.02|157,380,874.88|
|II.Cash flow generated by investing|||

||||
|-|-|-|
|Cash received from investment retrieving|||
|Cash received as investment gains|149,604,635.99|196,903,483.48|
|Net cash retrieved from disposal of fixed assets, intangible|||
||296,808.00||
|assets, and other long-term assets|||
|Net cash received from disposal of subsidiaries or other|||
|operational units|||
|Other investment-related cash received|440,000,000.00|510,357,990.86|
|Sub-total of cash inflow due to investment activities|589,901,443.99|707,261,474.34|
|Cash paid for construction of|||
|fixed assets, intangible assets|58,565,139.10|45,567,613.80|
|and other long-term assets|||
|Cash paid as investment|11,593,515.32|7,261,036.07|
|Net cash received from subsidiaries and other operational|||
|units|||
|Other cash paid for investment activities|580,000,000.00|538,000,000.00|
|Sub-total of cash outflow due to investment activities|650,158,654.42|590,828,649.87|
|Net cash flow generated by investment|-60,257,210.43|116,432,824.47|
|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||300,000,000.00|
|Sub-total of cash inflow from financing activities|100,000,000.00|400,000,000.00|
|Cash to repay debts|100,000,000.00|260,000,000.00|
|Cash paid as dividend, profit, or interests|80,041,734.46|160,324,080.00|
|Other cash paid for financing activities||300,000,000.00|
|Sub-total of cash outflow due to financing activities|180,041,734.46|720,324,080.00|
|Net cash flow generated by financing|-80,041,734.46|-320,324,080.00|
|IV. Influence of exchange rate alternation on cash and cash|||
||3,889,695.82|-273,191.65|
|equivalents|||
|V.Net increase of cash and cash equivalents|139,406,791.95|-46,783,572.30|
|Add: balance of cash and cash equivalents at the beginning|||
||248,509,410.84|295,292,983.14|
|of term|||
|VI ..Balance of cash and cash equivalents at the end of term|387,916,202.79|248,509,410.84|

 Legal Representative:Zheng Bin Person in charge ofaccounting：Pu Yangshuo 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||||||||||||
|Items||instrument||||||||||Minor||
|||||||Less:||||Comm|||Total of owners’|
||||||||Other|||||shareholders’||
||||||Capital|Share||Specialized|Surplus|on risk|Attributable||equity|
||Share Capital|prefe|Susta||||Comprehen|||||equity||
|||||Ot|reserves|s in||reserve|reserves|provisi|profit|||
|||rred|inabl||||sive Income|||||||
|||||her||stock||||on||||
|||stock|e|||||||||||
||||debt|||||||||||
||754,010,400.0||||139,590,345.|||24,603,149.9|621,112,807.7||2,911,921,943.|364,813,287.|4,815,411,532.3|
||||||||-640,401.72|||||||
|I.Balance at the end of last year||||||||||||||
||0||||09|||6|8||21|98|0|
|Add: Change of accounting policy||||||||||||||
|Correcting of previous errors||||||||||||||
|Merger of entities under common||||||||||||||
|control||||||||||||||
|Other||||||||||||||
||754,010,400.0||||139,590,345.|||24,603,149.9|621,112,807.7||2,911,921,943.|364,813,287.|4,815,411,532.3|
|II.Balance at the beginning of|||||||-640,401.72|||||||
|current year|0||||09|||6|8||21|98|0|
||||||||||||-238,210,351.7|||
||||||||-212,350.28|7,161,770.55||||4,986,417.37|-226,274,514.15|
|III.Changed in the current year||||||||||||||
||||||||||||9|||
||||||||||||-162,809,311.7|38,492,220.2||
||||||||-212,350.28||||||-124,529,441.85|
|（1）Total comprehensive income||||||||||||||
||||||||||||9|2||
|||||||||||||19,740,000.0||
|（II）Investment or decreasing of|||||||||||||19,740,000.00|
|capital by owners||||||||||||0||

||||||
|-|-|-|-|-|
||||19,740,000.0||
|1．Ordinary Shares invested by S||||19,740,000.00|
|hareholders|||0||
|2 ． Holders of other equity instru|||||
|ments invested capital|||||
|3．Amount of shares paid and|||||
|accounted as owners’ equity|||||
|4．Other|||||
||||-56,211,585.0||
|||-75,401,040.00||-131,612,625.00|
|（III）Profit allotment|||||
||||0||
|1.Providing of surplus reserves|||||
|2.Providing of common risk|||||
|provisions|||||
||||-56,211,585.0||
|3．Allotment to the owners (or||-75,401,040.00||-131,612,625.00|
|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|||||
||7,161,770.55||2,965,782.15|10,127,552.70|
|(V). Special reserves|||||
||10,038,758.6||||
||||3,591,976.18|13,630,734.81|
|1. Provided this year|||||
||3||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|||||2,876,988.08|||626,194.03|3,503,182.11|
|2．Used this term|||||||||
|（VI）Other|||||||||
||754,010,400.0|139,590,345.||31,764,920.5|621,112,807.7|2,673,711,591.|369,799,705.|4,589,137,018.15|
||||-852,752.00||||||
|IV. Balance at the end of this term|||||||||
||0|09||1|8|42|35||

 Amount in last year
In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Amount in last year|||||||||||||
||Owner’s equity Attributable to the Parent Company|||||||||||||
|||Other Equity||||||||||||
|Items||instrument||||||||||Minor||
|||||||Less:||||Comm|||Total of owners’|
||||||||Other|||||shareholders’||
||||||Capital|Share||Specialized|Surplus|on risk|Attributable||equity|
||Share Capital|prefe|Susta||||Comprehen|||||equity||
||||||reserves|s in||reserve|reserves|provis|profit|||
|||rred|inabl|Other|||sive Income|||||||
|||||||stock||||ion||||
|||stock|e|||||||||||
||||debt|||||||||||
||||||139,590,34|||17,276,201.1|583,824,678.0||2,736,802,630.|380,677,958.0|4,611,620,068.7|
|I.Balance at the end of last|754,010,400.00||||||-562,143.85|||||||
|year|||||5.09|||5|5||30|0|4|
|Add: Change of accounting|||||||||||11,132,170.41|-11,132,170.41||
|policy||||||||||||||
|Correcting of previous errors||||||||||||||
|Merger of entities under||||||||||||||
|common control||||||||||||||
|Other||||||||||||||
|II.Balance at the beginning of|754,010,400.00||||139,590,34||-562,143.85|17,276,201.1|583,824,678.0||2,747,934,800.|369,545,787.5|4,611,620,068.7|
|current year||||||||||||||

|||||||||
|-|-|-|-|-|-|-|-|
||5.09||5|5|71|9|4|
||||||163,987,142.5|||
|||-78,257.87|7,326,948.81|37,288,129.73||-4,732,499.61|203,791,463.56|
|III.Changed in the current year||||||||
||||||0|||
||||||352,077,352.2|||
|（1）Total comprehensive||-78,257.87||||71,763,833.56|423,762,927.92|
|income|||||3|||
|（II）Investment or decreasing||||||1,260,000.00|1,260,000.00|
|of capital by owners||||||||
|1．Ordinary Shares invested b||||||1,260,000.00|1,260,000.00|
|y Shereholders||||||||
|2．Holders of other equity inst||||||||
|ruments invested capital||||||||
|3．Allotment to the owners (or||||||||
|shareholders)||||||||
|4．Other||||||||
||||||-188,090,209.7|||
|(IV) Internal transferring of||||37,288,129.73||-80,461,415.00|-231,263,495.00|
|owners’ equity|||||3|||
|1. Capitalizing of capital||||37,288,129.73|-37,288,129.73|||
|reserves (or to capital shares)||||||||
|2. Capitalizing of surplus||||||||
|reserves (or to capital shares)||||||||
||||||-150,802,080.0|||
|3．Making up losses by surplus||||||-80,461,415.00|-231,263,495.00|
|reserves.|||||0|||
|4. Other||||||||
|(VI )Special reserves||||||||
|1. Provided this year||||||||
|2．Used this term||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|（VII）Other|||||||||
|IV. Balance at the end of this|||||||||
|term|||||||||
|||||7,326,948.81|||2,705,081.83|10,032,030.64|
|(V) Special reserves|||||||||
|||||11,060,486.26|||3,721,068.19|14,781,554.45|
|1. Provided this year|||||||||
|||||3,733,537.45|||1,015,986.36|4,749,523.81|
|2．Used this term|||||||||
|（VI）Other|||||||||
|||139,590,34||24,603,149.9|621,112,807.7|2,911,921,943.|364,813,287.9|4,815,411,532.3|
|IV. Balance at the end of this|754,010,400.00||-640,401.72||||||
|term||5.09||6|8|21|8|0|

 Legal Representative:Zheng Bin Person in charge ofaccounting：Pu Yangshuo 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|||||
||||||||Compr|||||
|Items|||||Capital|Less: Shares||Surplus|Common risk|Attributable|Total of owners’|
||Share Capital|preferredstock|||||ehensiv|||||
||||Sustainabl|Other|reserves|in stock||reserves|provision|profit|equity|
||||||||e|||||
||||e debt|||||||||
||||||||Income|||||
||754,010,400.||||138,953,250.||||602,356,402.|2,390,313,324.8|3,896,145,293.3|
|I.Balance at the end of last year||||||||10,511,915.73||||
||00||||09||||65|9|6|
|Add: Change of accounting||||||||||||
|policy||||||||||||
|Correcting of previous errors||||||||||||

||||||||
|-|-|-|-|-|-|-|
|Other|||||||
|II.Balance at the beginning of|754,010,400.|138,953,250.||602,356,402.|2,390,313,324.8|3,896,145,293.3|
||||10,511,915.73||||
|current year|00|09||65|9|6|
|III.Changed in the current year|||2,587,073.94||-189,089,235.79|-186,502,161.85|
|（I）Total comprehensive income|||||-113,688,195.79|-113,688,195.79|
|(II) Investment or decreasing of|||||||
|capital by owners|||||||
|1．Ordinary Shares invested by|||||||
|shareholders|||||||
|2．Holders of other equity instru|||||||
|ments invested capital|||||||
|3.Amount of shares paid and|||||||
|accounted as owners’ equity|||||||
|4．Other|||||||
|（III）Profit allotment|||||-75,401,040.00|-75,401,040.00|
|1.Providing of surplus reserves|||||||
|2．Allotment to the owners (or|||||||
||||||-75,401,040.00|-75,401,040.00|
|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|||2,587,073.94|||2,587,073.94|
|1. Provided this year|||4,484,209.97|||4,484,209.97|
|2．Used this term|||1,897,136.03|||1,897,136.03|
|（VI）Other|||||||
|IV. Balance at the end of this|754,010,400.|138,953,250.|13,098,989.6|602,356,402.|2,201,224,089.1|3,709,643,131.51|
|term|00|09|7|65|0||

Amount in last year
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Amount in last year|||||||||||
|||Other Equity instrument||||||||||
||||||||Other|||||
|||||||Less:||||||
|Items||prefe|||||Compreh|Surplus|Common risk|Attributable|Total of owners’|
||Share Capital||Sustain||Capital reserves|Shares in||||||
|||rred||Other|||ensive|reserves|provision|profit|equity|
||||able|||stock||||||
|||stock|||||Income|||||
||||debt|||||||||
||754,010,400.|||||||7,295,765.2||2,205,522,237.3|3,670,849,925.5|
|I.Balance at the end of last year|||||138,953,250.09||||565,068,272.92|||
||00|||||||0||1|2|
|Add: Change of accounting policy||||||||||||
|Correcting of previous errors||||||||||||
|Other||||||||||||
|II.Balance at the beginning of current|754,010,400.|||||||7,295,765.2||2,205,522,237.3|3,670,849,925.5|
||||||138,953,250.09||||565,068,272.92|||
|year|00|||||||0||1|2|
|||||||||3,216,150.5||||
|III.Changed in the current year|||||||||37,288,129.73|184,791,087.58|225,295,367.84|
|||||||||3||||
|（I）Total comprehensive income||||||||||372,881,297.31|372,881,297.31|
|(II) Investment or decreasing of||||||||||||
|capital by owners||||||||||||
|1．Ordinary Shares invested by shar||||||||||||
|eholders||||||||||||
|2．Holders of other equity instrumen||||||||||||
|ts invested capital||||||||||||
|3.Amount of shares paid and||||||||||||
|accounted as owners’ equity||||||||||||
|4．Other||||||||||||
|（III）Profit allotment|||||||||37,288,129.73|-188,090,209.73|-150,802,080.00|
|1.Providing of surplus reserves|||||||||37,288,129.73|-37,288,129.73||
|2．Allotment to the owners (or||||||||||||
|||||||||||-150,802,080.00|-150,802,080.00|
|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|||||||
||||3,216,150.5||||
|(V) Special reserves||||||3,216,150.53|
||||3||||
||||5,330,910.9||||
|1. Provided this year||||||5,330,910.95|
||||5||||
|2．Used this term|||2,114,760.42|||2,114,760.42|
|（VI）Other|||||||
||754,010,400.||10,511,915.7||2,390,313,324.8|3,896,145,293.3|
|IV. Balance at the end of this term||138,953,250.09||602,356,402.65|||
||00||3||9|6|

 Legal Representative:Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao
Hangzhou Steam Turbine Co., Ltd.
Notes to the Financial Statements
Year 2015
In RMB
I.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, legal entity business license No.: QGZZZD No.002150. The number of Business License was changed to 330000400001023 on May 6, 2009. TheCompany’s registered capital is now 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 scope of main businesses of the Company: The design, manufacturing, and service of steam turbine, gas turbine, other rotating and reciprocate machinery and auxiliary equipment, and spare parts and components. Wholesale, import& export, and service of packaged equipment in electric power supply, industrial driving, and industrial turbine.
These Financial Statements are released upon approval at the 28th meeting of the 6th term of Board held on March 17, 2016.
24 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.
II. 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.
III. Principal Accounting Policies and Estimations
Important prompt: The Company utilized detailed accounting polices and estimations on providing of bad debt provisions, fixed asset depreciation, intangible asset amortization, recognition of revenue, and so forth, according to its business practices.
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 are divided initially into four types of financial asset appointed to be measured at fair value with their changes are accounted into current gain/loss accounts(including transactional finance asset and financial asset appointed to be measured at fair value with their changes are accounted into current gain/loss accounts), transactional financial assets, debt and account receivable, finance asset saleable.
Finance debts are divided initially into two types of financial debt appointed to be measured at fair value with their changes are accounted into current gain/loss accounts(including transactional finance debt and financial debt appointed to be measured at fair value with their changes are accounted into current gain/loss accounts), other finance debt.
2. Basis of recognition and accounting of finance asset and finance debt
When the Company is one part of the finance instrument contract, one finance asset or debt is recognized. When on recognizing initially finance asset or debt, it is measured by fair value, for the finance asset or debt which appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, the related transaction expenses are directly accounted into current gain and loss; for other finance asset and debt, the related transaction expenses accounted into the initial recognition account.
The Company future measures finance asset by fair value without deducting future possible transaction fee but with exception: (1) Due investment, debt and account receivable are measured by actual interest rate according to the amortized costs. (2) Equity instrument investment which have no quote in active market and which fair 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. Basis of recognition and accounting of fair value for the main finance asset and finance debt
For the finance asset or debt which active market exists, the Company recognize the fair value according to the quote on the active market; for the finance asset or debt which active market not exists, the Company recognized the fair value using estimation technology (including reference of the latest market prices from freewill transactions by persons familiar with conditions, reference of the current fair value of other similar finance instrument in characteristics, discounted cash flow models and Option Pricing Model); for the initially acquired or initial finance asset or finance debt, the Company recognize the fair value basis on the market trading price. 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) The Company conduct independently impairment test for single finance asset with large value for single finance asset with little value the Company conduct the impairment test with those of the finance asset composition which have similar credit risk characteristics; for the non impairment assets which are tested independently, the Company conduct the impairment test with those of the finance asset composition which have similar credit risk characteristics.
(3) For the finance asset accounted by amortized cost which have subject impairment evidence at the end term, the impairment loss was recognized according to the difference between the account value and the anticipating future cash flow, for the finance asset which have little difference between its short term account receivable anticipating future cash flow and its current value, the Companydon’t discount the future cash flow when recognizing related impairment loss. When there is impairment loss for the Equity instrument investment which have no quote in active market and which fair valuecan’t be measured reliably and its derived finance assets which are connected with the equity instrument and which are calculated through the equity instrument, are measured by cost, the difference is recognized as impairment loss between the account value of the equity instrument investment and its derived finance asset and the current value discounted by the future cash flow according to the market profit rate of the similar finance asset. The Company recognize the impairment loss for the saleable finance asset which fair value have sharp decreasing and the anticipating decreasing trend is not temporary, and account it into impairment loss together with the accumulated fair vale loss which was accounted intoowner’s equity directly.
When impairment occurred with a sellable financial asset, the accumulated losses caused by decreasing of fair value which have originally been written 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 inves tment 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|
|Combined range of association|Other method|

Bad debt profisions are provided on age analyze basis in the group
||||
|-|-|-|
||Rate of provision on receivable|Rate of provision on other receivable|
|Age|||
||account|account|
|Within 1 year)included)|5.00%|5.00%|
|1－2 years|10.00%|10.00%|
|2－3 years|30.00%|30.00%|
|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 group
□ Applicable√ Not applicable
Bad debt provisions are provided on other basis in the group
□ Applicable√ 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|
|Basis of providing bad debt||
||cash flow of the receivable account and the current value of future cash|
|individually||
||flow of the group|
||Impairment test performed individually, bad debt provision will be|
|Basis of bad debt provision|provided at the difference of expected cash flow lower than the book|
||value.|

11.Inventories
(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.12– Trade of non-monetary assets;
3. Subsequent measurement and recognition of gain/loss
Cost basis is adopted in accounting of long-term equity investment in entities under substantial control of the Company; while equity basis is adopted in accounting of investment in affiliates and joint-ventures.
4. Treatment of disposal of subsidiaries by stages till losing of control power
(1) Individual account
At disposal of equity shares, the balance between book value and actual consideration received is recorded to current gain/loss account.
When the retained share equity is composing major influence or joint control with other parties on the invested entity, accounting will be on equity basis;
When none of substantial control, joint control, or major influence on the entity, it will be recognized as sellable financial asset and accounted on fair value.
(2) Basis of Consolidated Financial Statements
1) Losing of controlling power on a subsidiary through disposal of equity by multiple trades, and not recognized as “one-off” trade:
Before losing of control power, the balance of disposal consideration and the share of net asset attributable to the Company on continuous basis since purchasing or merger, is adjusted to capital reserves (capital premium), whereas if the capital premium is not enough to offset the amount, retained profit will be offset at corresponding amount.
At losing of control power over a former subsidiary, the retained equity shares shall be re-calculated according to the fair value at the day of losing power. Sum of the consideration obtained from disposal and fair value of the retained equity shares, less the share of net asset attributable to the Company on continuous basis since purchasing or merger, is accounted into investment gains of the period when the control power is disposed, and goodwill shall be offset meanwhile. Other gains related to the equities in formal subsidiary shall be written over to current investment gains at the period when control power was disposed.
2) Losing of controlling power on a subsidiary through disposal of equity by multiple trades, and recognized as “one-off” trade:
The multiple trades are treated as one trade that causes losing of control power on a subsidiary. However, the balance between the consideration received from each trade and corresponding share of net asset is recognized as other gains in the consolidated accounts, and transferred collectively to gain/loss account of the period in which the control power was lost.
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 of fixed assets
||||||
|-|-|-|-|-|
|||Depreciation age||Annual depreciation|
|Categories|Basis of depreciation||Retain value rate||
|||(year)||ratio|
||Straight average on||||
|Houses & buildings||20-30|4%|4.8%-3.2%|
||period||||
|Equipment &|Straight average on||||
|||8-15|4%|12%-6.4%|
|machinery|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
1. Construction in process is recognized on the basis of characteristics: very possible economic benefit flow in, cost can be measured reliably. Since the date when the construction in process reaches its useful status as expected, the construction in process is measured by the happened cost Since the date when the construction in process reaches its useful status as expected.
2. When the construction in process reaches its useful status as expected, it is transferred into fixed asset at actual cost. If the construction in process has reached useful status but with completion of project settlement process, it is transferred to fixed asset at the value estimated, and adjustment will happen after completion of project settlement process but no adjustment on depreciation provided previously.
Notes：Construction in progress is transferred to fixed assets when the asset is ready for its intended use. 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|
|Land using right|
|Other|

(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.Employees’ wage composes of short-term wages, after-job welfare, dismiss welfare, and other long-term welfares.
2. Accounting of short-term wages
In the fiscal period when an employee is providing services, short-term wages actually occurred is recognized as liability, and recorded into current gain/loss account or cost of related asset.
3. Accounting of after-job welfare
After-job welfare composes of stipulated saving plan and stipulated beneficiary plan.
(1) In the fiscal period when an employee is providing service, the payable amount calculated by the stipulated saving plan is recognized as liability and recorded into current gain/loss or cost of related asset.
(2) Accounting of stipulated beneficiary plan is on following steps:
1) On basis of expected accumulation of welfare, estimations on population variables and financial variables, calculating of liabilities from stipulated beneficiary plan, and recognition of the period of related liabilities, are performed on basis of non-bias and accordance actuary. Meanwhile, discount is performed on the liabilities from stipulated beneficiary plan to recognize the current value and service cost of the liabilities from the stipulated beneficiary plan.
2) When there is asset involved in the stipulated beneficiary asset, the deficit or premium from the balance of the current value of liabilities of stipulated beneficiary plan over their fair values is recognized as its net liability or net asset. When there is a premium with a stipulated beneficiary plan, the lower one between the premium and the upper limit of the asset is recognized as the net asset of such stipulated beneficiary asset;
3) At end of period,employees’ wages from stipulated beneficiary plan are recognized by three parts including service cost, net interest of net liability or net asset, and recalculated net asset or liability variation. The first two are recorded into current gain/loss or related asset cost, the third is recorded to other gains, which will not be written back to gain/loss in successive fiscal periods, but the amount can be transferred with the range of equity. 4. Accounting of dismissing welfare
Welfares for employees who are dismissed, the earlier one of the following is recognized as employee wage liability, and recorded to current gain /loss:
(1) When the Company cannot, on its own call only, retrieve the dismissing welfare provided by dismissing of service plan or suggestion;
(2) When the costs or expenses related to restructuring involved in the dismissing welfare are recognized by the Company.
5. Accounting of other long-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
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 and departed with bill of lading obtained. The amount had been fixed, and payment was received or documents received with great possibility of cash inflow. And the cost of the products is able to be measured appropriately.
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. They are recognized as deferred income and amortized straightly to their service lives and accounted in current gain/loss. Whereas government subsidy measured by nominal amount are recorded to current gain/loss account.
2. Recognition basis and accounting of income-related government subsidy
Government subsidies other than asset-related subsidies are recognized as income-related government subsidies.
Those, which are used to cover costs or losses in subsequent periods, are recognized as deferred income and accounted to current gain/loss to the periods of related expenses. Those, which are used to makeup expenses or losses already occurred, are recorded to current gain/loss account.
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
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
According to documentCQ〔2012〕No.16 issued by National Department of Finance and National Safety Inspection Bureau General, the Company was categorized as machinery production enterprise. Providing of workplace safety funds are to be provided on monthly basis according to the following schedule:2% provided on the turnover less than RMB10 million;1% on the amount over RMB10 million and less than RMB100 million;0.2% on the amount over RMB100 million and less than RMB1 billion;0.1% on the amount over RMB1 billion and less than RMB5 billion;0.05% on the amount over RMB5 billion.
The above safety expenses are drawn according to national regulations and accounted to costs of related products and recorded to “special reserves” at the same tine. At providing of safety expenses, expense-related costs are deducted from the special reserves. When a safety fund was drawn and composes part of a fixed asset, they are collected under construction-in-process, and recognized to fixed asset when the asset reaches usable status. Meanwhile, the special reserve is deducted by the costs which compose part of the fixed asset, and accumulative depreciation is recognized at the same amount. This fixed asset is not subject to depreciation in successive periods.
26. Change of main accounting policies and estimations
（1）Change of main accounting policies
|||||
|-|-|-|-|
||||Remar|
|Content and Reason|Vetting process|Suitable Time||
||||k|
|In order to adapt to the change of market||||
|environment, better prevent and control accounts|The above changes have been|||
|receivable risks and make Company’s receivable|examined and adopted at the 19th|||
|||March 26,2015||
|accounts accord with relevant risks situation and|meeting of the 6th term of Board|||
|the proportion of actual loss. The Company|2015.|||
|decided to change the accounting evaluation of||||

||
|-|
|provision for bad debts set up on accounts|
|receivable, reduce and raise the percentage it in 3|
|years and over 3 years respectively and make|
|devaluation provision for full accounts receivable|
|in line with cautious and objective principle.|

1) The use of an aged analysis of bad debts of accounts receivable for the changes in accounting estimates before and aftercomparison：
||||
|-|-|-|
|Aging|Proportion（%）|Proportion of change（%）|
|Within 1 year|5|5|
|1-2 years|20|10|
|2-3 years|40|30|
|3-4 years|60|60|
|4-5 years|60|80|
|Over 5 years|60|100|

2) Report items and amounts affected
|||
|-|-|
|Report items subject to significant impact|Amount|
|Balance sheet ites (December 31, 2015)||
|Account receivable|46,087,385.33|
|Other receivable|-744,443.85|
|Undistributed profit|36,582,571.20|
|Profit statement items in 2015||
|Assets impairment loss|-45,342,941.48|
|Income tax expenses|8,760,370.28|

 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%|
|Operational tax|Taxable turnover|5%|
|City maintenance and|||
||Turnover tax payable|7%|
|construction tax|||
|Enterprise income tax|Amount of income taxable|15%、25%|
||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.||
|Educational surcharge|Taxable turnover|3%|
|Local education|||
||Taxable turnover|2%|
|additional|||

Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
|||
|-|-|
|Name|Income tax rate|
|The company and the subsidiary of Hangzhou Zhongneng Steam Turbine Power||
|Co., Ltd., Zhejiang Steam Turbine Packaged Technology Development Co., Ltd.,||
||15%|
|Hangzhou Steam Turbine Casting Co., Ltd., Zhejiang Huayuan Steam Turbine||
|Machinery Co.,Ltd. and Hangzhou Guoneng Steam Turbine Engineering Co.,Ltd.||
|Other Subsidiary（Domestic）|25%|

(II) Preferential tax
1. According to the document “Notice for Qualification of High-tech Enterprises”(GKHZD〔2015〕No.29) issued by Department of Science and Technology High-tech Development Center, the Company along with Hangzhou Zhongneng Steam Turbine Power Co., Ltd. and Zhejiang Packaged Technologies Development Co., Ltd.– subsidies of the Company, were qualified as high-tech enterprises for term of three years. Therefore they enjoy15% of tax for 2014-2016.
2. According to the documentZKFGD〔2013〕No.294 titled “Notice for Recognition of 491 High-tech Enterprises” issued jointly by Zhejiang Bureau of Science and Technology, Zhejiang Bureau of Finance, Zhejiang National Tax Bureau, and Zhenjiang Local Tax Bureau, Hangzhou Steam Turbine Casting Co., Ltd. was recognized as a High-Tech Enterprise, therefore enjoys15% of income tax rate from 2013 to 2015.
3. According to the document “Notice for Qualification of High-tech Enterprises”(GKHZD〔2015〕No.36) issued by Department of Science and Technology High-tech Development Center, Zhejiang Huayuan Steam Turbine Machinery Co., Ltd. and Hangzhou Guoneng Steam Turbine Engineering Co., Ltd.– subsidies of the Company, were renewed or their qualifications as high-tech enterprises. Therefore they enjoy15% of tax for 2014-2016. 3. Other
Hangzhou Zhongneng Steam Turbine Power (Indonesia) Co., Ltd. registered in Indonesia overseas subsidiaries, the applicable local relevant tax laws and regulations.
VII. Notes to the Consolidated Financial Statements
1. Monetary capital
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Cash in stock|391,106.17|307,654.85|
|Bank deposit|688,833,556.36|562,455,906.65|
|Other monetary fund|62,372,133.71|51,194,502.41|
|Total|751,596,796.24|613,958,063.91|
|Incl:Total of accounts saved overseas|9,182,145.32|9,198,137.90|

 Other statements
Other monetary fund composes of RMB59,872,133.71 of security for bank acceptance notes and
RMB2,500,000.00 of security for bank guarantee letter. Both under limitation of using.
2. Bills receivable
(1) Notes receivable listed by category
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|

||||
|-|-|-|
|Bank acceptance|637,528,943.49|689,241,938.01|
|Total|680,518,943.49|701,109,938.01|

 (2) Notes receivable which had endorsed by the Company or had discounted and had not due on the balance sheet date at the period-end
In RMB
||||
|-|-|-|
||Amount of recognition termination|Amount of not terminated|
|Items|||
||at the period-end|recognition at the preriod -end|
|Bank acceptance|400,375,131.86||
|Total|400,375,131.86||

3. Accounts receivable
(1) Accounts receivable disclosed by category
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|||||||||||
|||Proportio||Proportio|Book value||Proportio||Proportio|Book value|
||Amount||Amount|||Amount||Amount|||
|||n||n|||n||n||
|Accounts|||||||||||
|receivable|||||||||||
|||||Proportio|||||||
|portfolio subject|2,861,049,700.73|98.97%|Amount||2,096,090,157.61|2,969,407,602.57|99.01%|580,487,960.59|19.55%|2,388,919,641.98|
|||||n|||||||
|to impairment by|||||||||||
|credit risk|||||||||||
|Account|||||||||||
|receivable of|||||||||||
|individual not|||||||||||
|significance|||||||||||
||29,819,607.69|1.03%|29,819,607.69|100.00%||29,819,607.69|0.99%|29,819,607.69|100.00%||
|subject to|||||||||||
|individually|||||||||||
|assessment for|||||||||||
|impairment|||||||||||
|Total|2,890,869,308.42|100.00%|794,779,150.81|27.49%|2,096,090,157.61|2,999,227,210.26|100.00%|610,307,568.28|20.35%|2,388,919,641.98|

 Receivable accounts with large amount individually and bad debt provisions were provided
Not applicable
Account receivable in the portfolio which are provided bad debt provision on age basis
In RMB
|||||
|-|-|-|-|
||End of term|||
|Age||||
||Book balance|Bad debt provision|Providing rate%|
|Subitem within 1 year||||
|Within 1 year|780,946,769.51|39,047,338.50|5.00%|

|||||
|-|-|-|-|
|Subtotal within 1 year|780,946,769.51|39,047,338.50|5.00%|
|1-2 years|852,535,246.15|85,253,524.61|10.00%|
|2-3 years|615,601,136.27|184,680,340.89|30.00%|
|Over 3 years|310,992,707.13|186,595,624.29|60.00%|
|3-4 years|157,955,634.19|126,364,507.35|80.00%|
|4-5 years|172,837,815.17|172,837,815.17|100.00%|
|Over 5 years|2,890,869,308.42|794,779,150.81|27.49%|
|Total||||

（2）Accrual period, recovery or reversal of bad debts situation
The current amount of provision for bad debts is RMB190,166,947.80 ; recovery or payback for bad debts Amount is RMB0.00.
Where the current bad debts back or recover significant amounts:
(3) Receivable accounts actually written off in the report period
In RMB
|||
|-|-|
|Items|Amount|
|Difficult to recover|5,695,365.27|

 Of which the significant actual write-off accounts receivable:
In RMB
|||||||
|-|-|-|-|-|-|
||||||Arising from|
||Nature of account|Amount written|Reason for|Verification|related|
|Name||||||
||receivables|off|write-off|procedures|transactions|
||||||(Y/N)|
|||||The examined an||
|Zhejiang Jiahua|||Difficult to|||
|Energy Chemical|Goods|1,920,000.00||d adopted to|No|
||||recover|||
|Co., Ltd.||||Board of directors||
|Oriental||||The examined an||
||||Difficult to|||
|Electrical||||||
||Goods|1,599,316.10||d adopted to|No|
|Group .Beijing|||recover|||
|||||Board of directors||
|Company||||||
|China||||||
|||||The examined an||
|Petrochemical|||Difficult to|||
|Group Sichuan|Goods|290,000.00||d adopted to|No|
||||recover|||
|Vigny Lun||||Board of directors||
|factory||||||
|||||The examined an||
||||Difficult to|||
|Other|Goods|1,886,049.17||d adopted to|No|
||||recover|||
|||||Board of directors||
|Total|--|5,695,365.27||||

Explanation for write-off of account receivables:
The amount of the account receivable actually written off in this period was of RMB
5,695,365.27.
（4）The ending balance of other receivables owed by the imputation of the top five parties
|||||
|-|-|-|-|
|Name|Amount|Proportion(%)|Bad debt provision|
|Client 1|767,883,553.92|26.56|218,791,022.90|
|Client 2|338,964,890.80|11.73|128,687,041.80|

|||||
|-|-|-|-|
|Client 3|118,867,104.21|4.11|11,886,710.42|
|Client 4|49,710,305.99|1.72|3,657,185.10|
|Client 5|40,110,000.00|1.39|4,011,000.00|
|Subtotal|1,315,535,854.92|45.51|367,532,960.22|

4. Prepayments
（1）Age analysis
In RMB
||||||
|-|-|-|-|-|
||Balance in year-end||Balance in year-begin||
|Age|Amount|Proportion（%）|Amount|Proportion（%）|
|Within 1 year|107,708,874.45|77.34%|145,672,687.02|84.68%|
|1-2 years|25,792,370.60|18.52%|23,007,830.11|13.37%|
|2-3 years|2,763,347.80|1.98%|2,055,629.60|1.20%|
|Over 3 years|3,002,731.80|2.16%|1,286,621.66|0.75%|
|Total|139,267,324.65|--|172,022,768.39|--|

Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time:
(2) Top 5 of the closing balance of the prepayment colleted according to the prepayment target
||||
|-|-|-|
|Name|Amount|Proportion(%)|
|GOTE BORG ELECTRICAL AND MECHANICALENGINEERING FAR EAST LIMITED|7,553,044.90|5.42|
|Hangzhuo Xuesong Electric Equipment Co., Ltd.|7,120,000.00|5.11|
|Shanghai Jiebiao Energy Technology Co., Ltd.|5,941,642.66|4.27|
|Beijing Jingcheng Zeyu Energy Protection EngineeringTechnology Co., Ltd.|5,370,000.00|3.86|
|Zhongguang International Engineering Co., Ltd.|4,918,271.09|3.53|
|Subtotal|30,902,958.65|22.19|

5. Other account receivable
1) Detailed categories
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||End of term|||||Beginning of term|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|||||||||||
|||Proportio||Proportio|||Providing||Proporti||
||||||Book value|||||Book value|
||Amount||Amount|||Amount||Amount|||
|||n %||n %|||rate %||on %||
|Major single amount and bad|||||||||||
|||||||3,710,320.94|10.92%|3,710,320.94|100.00%||
|debt provision provided|3,710,320.94|10.97%|3,710,320.94|100.00%|||||||
|individually|||||||||||
|Bad debt provision provided on||||||30,275,426.55|89.08%|4,893,203.23|16.16%|25,382,223.32|
||30,117,186.12|89.03%|4,543,128.83|15.08%|25,574,057.29||||||
|risk groups|||||||||||
|Total|33,827,507.06|100.00%|8,253,449.77|24.40%|25,574,057.29|33,985,747.49|100.00%|8,603,524.17|25.32%|25,382,223.32|

 Other receivables with individually significant amount and provision for bad and doubtful debts individually provided at the end of the reporting period.
||||||
|-|-|-|-|-|
||End of term||||
|Other account receivable（Other Unit）|||||
||Other receivable account|Bad debt provision|Providing rate%|Reason|
|Shanghai Customs Waigaoqiao Office|3,710,320.94|3,710,320.94|100.00%|Difficult to recover|
|Total|3,710,320.94|3,710,320.94|--|--|

Other receivable accounts in the group on which bad debt provisions are provided on age basis
In RMB
|||||
|-|-|-|-|
||End of term|||
|Age||||
||Other receivable account|Bad debt provision|Providing rate %|
|Subitem within 1 year||||
|Within 1 year|16,866,162.42|843,308.14|5.00%|
|Subtotal within 1 year|16,866,162.42|843,308.14|5.00%|
|1-2 years|6,449,811.70|644,981.17|10.00%|
|2-3 years|4,655,921.60|1,396,776.48|30.00%|
|Over 3 years|910,500.00|546,300.00|60.00%|
|3-4 years|615,136.80|492,109.44|80.00%|
|4-5 years|4,329,974.54|4,329,974.54|100.00%|
|Over 5 years|33,827,507.06|8,253,449.77|24.40%|
|Total||||

(2)The current amount of provision for bad debts is RMB -64,824.40; recovery or payback for bad debts Amount is RMB 0.00.
(3) The actual write-off other accounts receivable
In RMB
|||
|-|-|
|Items|Amount|
|Difficult to recover|285,250.00|

Of which the significant write-off other accounts receivable:
In RMB
|||||||
|-|-|-|-|-|-|
||||||Whether occurred|
|Name|Nature|Amount|Reason|Process|from the related|
||||||transactions|
|Luoyang Jinlong||||||
|||||The examined||
|Electric Power|||Difficult to|||
||Deposit|200,000.00||and approved of|No|
|extension|||recover|||
|||||board of directors||
|command||||||
|Total||200,000.00||||

(4) Other accounts receivable classified by the nature of accounts
In RMB
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Deposit|21,439,653.49|23,526,521.57|
|Provisional payment receivalbe|5,862,759.48|4,720,051.08|
|Petty cash|1,371,901.86|920,428.38|
|Other|5,153,192.23|4,818,746.46|
|Total|33,827,507.06|33,985,747.49|

(5) Top 5 of the closing balance of the other accounts receivable colleted according to the arrears party
In RMB
|||||||
|-|-|-|-|-|-|
|||||Proportion of the total||
||||||Closing balance|
|||||year end balance of||
|Name|Nature|Closing balance|Aging||of bad debt|
|||||the accounts||
||||||provision|
|||||receivable(%)||
||||Over 5|||
|Shanghai Customs Waigaoqiao|Deposit in|||||
|||3,710,320.94||10.97%|3,710,320.94|
|Office|custom||years|||
|Investment from Indonesia||||||
||Investment|3,246,800.00|2-3 years|9.60%|974,040.00|
|Company receivable||||||

|||||||
|-|-|-|-|-|-|
||||Within 13year|||
|Export drawback receivable|Export Rebates|2,581,750.0||7.63%|129,087.50|
|Guoxin Bidding Group Co.,Ltd.|Bidding deposit|1,659,500.0|0 0-5 years|4.91%|120,100.00|
|Guodian Trust Bidding Co., Ltd.|Bidding deposit|1,455,150.0|0 0-4 years|4.30%|365,115.00|
|Total|--|12,653,520.9|7 --|37.41%|5,298,663.44|

6. Inventories
(1) Details
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of term|||Beginning of term|||
|Items||Impairment|||Impairment||
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||
|Raw|||||||
||458,779,130.89||458,779,130.89|461,117,423.30||461,117,423.30|
|materials|||||||
|Product in|564,392,004.76||564,392,004.76|539,174,718.21||539,174,718.21|
|process|||||||
|Products in|856,686,717.61|52,988,014.66|803,698,702.95|593,940,331.76|158,244.58|593,782,087.18|
|stock|||||||
||1,879,857,853.26|52,988,014.66|1,826,869,838.60|1,594,232,473.27|158,244.58|1,594,074,228.69|
|Total|||||||

(2) Inventory depreciation provision
In RMB
||||||||
|-|-|-|-|-|-|-|
||Beginning of|Increased this period||Decreased this period|||
|Items||||Written back or||End of term|
||term|Provided|Others||Others||
|||||off|||
|Product in||2,198,984.63||2,198,984.63|||
|process|||||||
|Products in|158,244.58|52,829,770.08||||52,988,014.66|
|stock|||||||
||158,244.58|55,028,754.71||2,198,984.63||52,988,014.66|
|Total|||||||

The rotary pin for inventories of the company for the period due to the disposal of suspension units, corresponding to marketing costs and inventory provision have occurred.
7. Other current asset
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Bank financing products [note]|426,000,000.00|378,800,000.00|
|Input tax deductible|1,089,566.15|2,385,481.70|
|Prepaid income tax|113,279.98|884,753.86|
|Prepayment of other tax|989.31||
|Total|427,203,835.44|382,070,235.56|

[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.
8. Sellable financial asset
(1) Details
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of term|||Beginning of term|||
|Items||Impairment|||Impairment||
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||
|Available-for-sale equity|||||||
||509,409,741.77||509,409,741.77|498,990,862.94||498,990,862.94|
|instruments|||||||
|On cost basis|509,409,741.77||509,409,741.77|498,990,862.94||498,990,862.94|
||509,409,741.77||509,409,741.77|498,990,862.94||498,990,862.94|
|Total|||||||

 (2) Sellable financial assets on cost basis
In RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Book balance|||Impairment provision||||Shareholding||
||Beginning of|Increased this period||Beginning ofterm|Increased this|Decreas|End|proportion|Cash bonus of the|
|Company invested in|term||||period|ed this|of|||
|||||||period|term|among the|reporting period|
|||||||||investees||
|Bank of Hangzhou Co.,Ltd.|390,954,040.00||390,954,040.00|||||6.92%|27,742,368.00|
|Greenesol Co.(India)|5,534,773.22||5,534,773.22|||||37.00%||

||||||||
|-|-|-|-|-|-|-|
|Hangzhou Changdi Equity Investment|||||||
||27,522,049.72|11,593,515.32||39,115,565.04|2.97%||
|Partnership(Limited liability)|||||||
|Hangzhou Steam Turbine Engineering Co.,|||||||
||30,000,000.00|||30,000,000.00|15.00%||
|Ltd.|||||||
|Zhejiang Sanxin Automatic Engineering|||||||
||600,000.00|||600,000.00|6.00%||
|Co., Ltd.|||||||
|Zhejiang Zhongkong Solar Energy|||||||
||15,000,000.00|||15,000,000.00|5.27%||
|Technology Co., Ltd.|||||||
|Zhejiang Tianhang Steam Turbine Auxiliary|||||||
||10,000,000.00|||10,000,000.00|33.33%|1,000,000.00|
|Machinery Co., Ltd.|||||||
||||1,174,636.||||
|Wuxi Xinchang Steel Tube Co., Ltd.|19,380,000.00|||18,205,363.51|18.00%||
||||49||||
||||1,174,636.||||
|Total|498,990,862.94|11,593,515.32||509,409,741.77|--|28,742,368.00|
||||49||||

9. Fixed assets
（1）Details
In RMB
|||||||
|-|-|-|-|-|-|
|Items|Houses & buildings|Machinery equipment|Transportation equipment|Office equipment|Total|
|I.Original value||||||
|1.Opening balance||||||
||426,487,329.57|931,262,735.0|6 33,152,494.69|96,116,812.56|1,487,019,371.88|

|||||||
|-|-|-|-|-|-|
|2.Increased amount of the||||||
||4,352,583.36|41,537,856.16|1,046,145.39|4,020,784.69|50,957,369.60|
|period||||||
|（1）Outsourcing||||||
|||3,222,341.23|866,427.74|1,478,306.75|5,618,357.77|
|（2）Inventory, Fixed assetsand||||||
||4,352,583.36|38,221,497.84|179,717.65|2,542,477.94|45,339,011.83|
|Construction project into||||||
|（ 3 ） Enterprise||||||
|consolidation||||||
|3.Decreased amount ofthe||||||
|||2,800,783.43|4,412,665.00|587,651.54|7,801,099.97|
|period||||||
|（1）Disposal||||||
|||2,795,603.43|4,412,665.00|587,651.54|7,795,919.97|
|Other||5,180.00|||5,180.00|
|4.Closing balance|430,839,912.93|969,999,807.79|29,785,975.08|99,549,945.71|1,530,175,641.51|
|II.Accumulated depreciation||||||
|accumulated amortization||||||
|1.Opening balance||||||
||151,139,947.58|560,699,909.96|19,348,619.55|71,014,360.27|802,202,837.36|
|2.Increased amount of the||||||
||12,389,372.17|62,046,111.40|2,340,792.98|9,052,764.56|85,829,041.11|
|period||||||
|（1）Withdrawal|12,389,372.17|62,046,111.40|2,340,792.98|9,052,764.56|85,829,041.11|
|3.Decreased amount ofthe||||||
|||2,279,459.72|2,784,692.57|1,824,891.76|6,889,044.05|
|period||||||
|（1）Disposal||||||
|||2,279,459.72|2,784,692.57|1,824,891.76|6,889,044.05|
|4.Closing balance|163,529,319.75|620,466,561.64|18,904,719.96|78,242,233.07|881,142,834.42|
|III. Impairment provision||||||
|1.Opening balance||||||
||1,504,928.24|4,074,858.43||1,203,366.99|6,783,153.66|

|||||||
|-|-|-|-|-|-|
|2.Increased amount of the||||||
|period||||||
|（1）Withdrawal||||||
|3.Decreased amount of the||||||
|period||||||
|（1）Disposal||||||
|4.Closing balance||||||
||1,504,928.24|4,074,858.43||1,203,366.99|6,783,153.66|
|IV. Book value||||||
|1.Closing book value|265,805,664.94|345,458,387.72|10,881,255.12|20,104,345.65|642,249,653.43|
|2.Opening book|273,842,453.75|366,487,966.67|13,803,875.14|23,899,085.30|678,033,380.86|

 10. Project under construction
（1）Project under construction
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of term|||Beginning of term|||
|Items||Impairment|||||
||Book balance||Book value|Book balance|Impairment provision|Book value|
|||provision|||||
|Construction in process of parent|||||||
||79,982,551.34||79,982,551.34|31,563,732.35||31,563,732.35|
|Company（127 projects）|||||||
|Completed project of parent|||||||
|||||35,738,532.24||35,738,532.24|
|Company（109 projects）|||||||
|Tangxi Workshop PhaseII,|||||||
||19,540,353.62||19,540,353.62|13,036,376.35||13,036,376.35|
|Gouneng Company|||||||
|Project of steam turbine heavy|||||||
||18,177,025.86||18,177,025.86|5,718,626.32||5,718,626.32|
|industry|||||||
|Minor purchasing of equipment|||||||
|||||1,780,341.88||1,780,341.88|
|by subsidiaries|||||||

||||||
|-|-|-|-|-|
|Prepayment for equipment or|||||
||1,487,176.70|1,487,176.70|1,631,650.00|1,631,650.00|
|projects|||||
|Total|119,187,107.52|119,187,107.52|89,469,259.14|89,469,259.14|

 (2) Changes of significant construction in progress
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Capital|Including|||
||||||||||||Capital||
||||||||||isation|：Current|||
||||||||||||isation||
|||Beginning of|Increased this|Transferred into|Other||Proportion(|Progre|of|amount|of|Sour|
|Project|Budget RMB x10000|||||End of term||ss of|interest|of||ce of|
|||term|period|fixed assets|decreases||%)||||interest||
|||||||||work|accumu|capitaliza||funds|
||||||||||||ratio||
||||||||||lated|tion of|||
||||||||||||（%)||
||||||||||balance|interest|||
|||||||||Under|||||
|Construction in process of||||||||||||Othe|
||180,359,400.00|31,563,732.35|48,418,818.99|||79,982,551.34|44.35%|Constr|||||
|parent Company（127 projects）||||||||||||r|
|||||||||uction|||||
|||||||||Com|||||
|Completed project of parent||||||||||||Othe|
||42,710,600.00|35,738,532.24|2,441,502.30|38,180,034.54|||89.61%|plete|||||
|Company（109 projects）||||||||||||r|
|||||||||d|||||
|||||||||Unde|||||
|||||||||r|||||
|Tangxi Workshop PhaseII,||||||||||||Othe|
||30,000,000.00|13,036,376.35|9,743,979.74|3,240,002.47||19,540,353.62|75.93%|Cons|||||
|Gouneng Company||||||||||||r|
|||||||||tructi|||||
|||||||||on|||||
|||||||||Unde|||||
|||||||||r|||||
|Project of steam turbine heavy||||||||||||Othe|
||1,794,100,000.00|5,718,626.32|12,458,399.54|||18,177,025.86|1.01%|Cons|||||
|industry||||||||||||r|
|||||||||tructi|||||
|||||||||on|||||

||||||||||
|-|-|-|-|-|-|-|-|-|
||||||||Com||
|Minor purchasing of||||||||Othe|
||3,331,551.41|1,780,341.88|1,551,209.53|3,331,551.41||100.00%|plete||
|equipment by subsidiaries||||||||r|
||||||||d||
||||||||Unde||
||||||||r||
|Prepayment for equipment or||||||||Othe|
||2,604,195.84|1,631,650.00|972,545.84|1,117,019.14|1,487,176.70||Cons||
|projects||||||||r|
||||||||tructi||
||||||||on||
|Total|2,053,105,747.25|89,469,259.14|75,586,455.94|45,868,607.56|119,187,107.52|--|--|--|

11. Intangible assets
（1）Details
In RMB
|||||||
|-|-|-|-|-|-|
|Items|Land using right|Patent|Non-patent right|Software|Total|
|I. Original price||||||
||332,298,312.33|200,000.00||260,000.00|332,758,312.33|
|1.Opening balance||||||
|2.Increased amount ofthe|||8,000,000.00|68,376.07|8,068,376.07|
|period||||||
|(1) Purchase||||68,376.07|68,376.07|
|(2)Internal Development||||||
|(3)Increased of Enterprise||||||
|Combination||||||
|Capital invested by stockholder|||8,000,000.00||8,000,000.00|
|3.Decreased amount of the||||||
|period||||||
|（1）Disposal||||||
|4.Closing balance|332,298,312.33|||328,376.07|340,826,688.40|
|||200,000.00|8,000,000.00|||
|II.Accumulated amortization||||||
||28,456,359.23|||143,333.33|28,657,692.56|
|1.Opening balance||58,000.00||||
|2.Increased amount of the|6,662,865.37|||62,256.62|7,219,788.66|
|||28,000.00|466,666.67|||
|period||||||
|(1) Withdrawal|6,662,865.37|||62,256.62|7,219,788.66|
|||28,000.00|466,666.67|||
|3.Decreased amount of the||||||
|period||||||
|（1）Disposal||||||
|4.Closing balance|35,119,224.60|||205,589.95|35,877,481.22|
|||86,000.00|466,666.67|||
|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 value|297,179,087.73|||122,786.12|304,949,207.18|
|||114,000.00|7,533,333.33|||
|2.Opening book value|303,841,953.10|142,000.00||116,666.67|304,100,619.77|

 The intangible assets by the end of the formation of the company's internal R& D accounted for0.00% of the proportion of the balance of intangible assets
12. Long-term amortize expenses
In RMB
|||||||
|-|-|-|-|-|-|
||||Amortized expenses|||
|Items||||Other loss|Balance in year-end|
||Balance in year-begin|Increase in this period||||
|Redecoration|1,041,796.52|1,050,172.00|310,672.72||1,781,295.80|
|Afforestation fees||372,263.00|124,087.00||248,176.00|
|Total|1,041,796.52|1,422,435.00|434,759.72||2,029,471.80|

 13. 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||
||Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
|Items|||||
||difference|assets|difference|assets|
|Provision for Asset|||||
||||6,783,153.66|1,017,473.05|
||862,665,829.01|134,087,883.30|||
|Impairment|||||
|Internal trade profit not|||31,366,833.60|4,784,324.37|
||51,540,875.71|7,731,131.35|||
|realized|||||
|Deductible loss|||0.00|0.00|
||109,318,315.61|16,427,657.71|||
||||6,567,225.16|985,083.78|
|Bad debt provision|4,521,435.59|678,215.34|||
|Inventory impairment|||||
||||663,708,944.40|102,885,927.93|
||1,028,046,455.92|158,924,887.70|||
|provision|||||
|Temporary difference|||||
||4,521,435.59|678,215.34|6,567,225.16|985,083.78|
|such as amortizing of|||||
|software expense|||||
|Total|1,025,181,586.07|158,924,887.70|663,708,944.40|102,885,927.93|

 (2) Deferred income tax liabilities had not been off-set
In RMB
||||||
|-|-|-|-|-|
||Balance in year-end||Balance in year-begin||
||Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
|Items|||||
||difference|liabilities|difference|liabilities|
|Accumulated|6,783,153.66|1,017,473.05|6,783,153.66|1,017,473.05|
|depreciation:|||||

||||||
|-|-|-|-|-|
|Total|6,783,153.66|1,017,473.05|6,783,153.66|1,017,473.05|

（3）Details of the un-recognized deferred income tax assets
In RMB
||||
|-|-|-|
|Items|Balance in year-end|Balance in year-begin|
||137,939.89|77,605.05|
|Deductible provisional differences|||
||5,606,704.52|2,086,222.26|
|Recoverable losses|||
|Sub-total|5,744,644.41|2,163,827.31|

（4）Deductible losses of the un-recognized deferred income tax asset will expire in the following years
In RMB
|||||
|-|-|-|-|
|Year|Balance in year-end|Balance in year-begin|Remark|
|2017||873,013.84||
|2018|1,088,275.32|744,962.67||
|2019|903,272.74|468,245.75||
|2020|3,615,156.46|||
|Total|5,606,704.52|2,086,222.26|--|

17.Short-term loans
（1）Category of short-term loans
In RMB
||||
|-|-|-|
|Items|Balance in year-end|Balance in year-begin|
|Loan by pledge|10,000,000.00|10,000,000.00|
|Mortgage loan|75,350,000.00|88,600,000.00|
|Guarantee loan||100,000,000.00|
|Total|85,350,000.00|198,600,000.00|

 15. Notes payable
In RMB
||||
|-|-|-|
|Category|Balance in year-end|Balance in year-begin|
|Bank acceptance|194,226,049.73|150,763,452.14|
|Total|194,226,049.73|150,763,452.14|

 The amount payable at the end of this term is RMB 0.00.
16. Account payable
（1）List of Account payable
In RMB
||||
|-|-|-|
|Items|Balance in year-end|Balance in year-begin|
|Goods|796,106,637.10|689,452,672.67|

||||
|-|-|-|
|Payment for equipment and projects|14,313,744.35|73,633,046.25|
|Total|810,420,381.45|763,085,718.92|

 17. Advance from customers
(1) List of advance from customers
In RMB
||||
|-|-|-|
|Items|Balance in year-end|Balance in year-begin|
|Goods|1,736,820,949.19|1,374,736,209.67|
|Total|1,736,820,949.19|1,374,736,209.67|

 18. Payable Employee wage
（1）Payable Employee wage
In RMB
||||||
|-|-|-|-|-|
|Items|Year-beginning|Increase in the|Decrease in the||
|||||Year-end balance|
||balance|current period|current period||
|I. Short-term|||||
||43,878,015.68|593,701,438.73|590,935,963.73|46,643,490.68|
|compensation|||||
|II.Post-employment b|||||
|enefits - defined contr|21,794,690.41|72,391,638.02|70,572,344.65|23,613,983.78|
|ibution plans|||||
|Total|65,672,706.09|666,093,076.75|661,508,308.38|70,257,474.46|

（2）Short-term compensation
In RMB
||||||
|-|-|-|-|-|
|Items|Year-beginning|Increase in the|Decrease in the||
|||||Year-end balance|
||balance|current period|current period||
|1.Wages, bonuses,|||||
||28,767,519.81|443,703,113.87|437,798,876.14|34,671,757.54|
|allowances and subsidies|||||
|2.Employee welfare||45,687,602.76|45,687,602.76||
|3. Social insurance|||||
||7,648,459.07|42,249,920.56|44,512,706.69|5,385,672.94|
|premiums|||||
|Inlduding ：Medical|||||
||7,056,425.63|35,725,121.71|38,034,663.13|4,746,884.21|
|insurance|||||
|Work injury insurance|194,756.44|2,233,265.14|2,208,986.39|219,035.19|
|Maternity insurance|397,277.00|4,291,533.71|4,269,057.17|419,753.54|
|4.Public reserves for housing|220,900.96|50,275,861.00|50,385,867.00|110,894.96|
|5.Union funds and staff|||||
||6,606,703.84|11,784,940.54|11,916,479.14|6,475,165.24|
|education fee|||||
|7.Short-term profit shareing|||||
||634,432.00||634,432.00||
|scheme|||||
|Total|43,878,015.68|593,701,438.73|590,935,963.73|46,643,490.68|

(3) Details of fixed provision scheme
In RMB
||||||
|-|-|-|-|-|
|||Increase in this|Payable in this period|Balance in year-end|
|Items|Balance in year-begin||||
|||period|||
|1. Basic old-age|||||
||4,681,929.48|48,045,727.87|47,760,587.35|4,967,070.00|
|insurance premiums|||||
|2.Unemployment|||||
||664,347.08|5,439,117.17|5,571,348.34|532,115.91|
|insurance|||||
|3.Enterprise annuity|||||
||16,448,413.85|18,906,792.98|17,240,408.96|18,114,797.87|
|payment|||||
|Total|21,794,690.41|72,391,638.02|70,572,344.65|23,613,983.78|

 19. Tax Payable
In RMB
||||
|-|-|-|
|Items|Balance in year-end|Balance in year-begin|
|VAT|14,415,685.85|64,272,374.25|
|Business Tax|26,734.00|5,570.00|
|Enterprise Income tax|||
||13,503,170.56|48,371,910.29|
|Individual Income tax|2,576,708.03|2,395,496.64|
|City Construction tax|1,039,687.83|4,901,454.49|
|Property tax|39,647.76|1,944.00|
|Education subjoin|453,914.47|2,113,092.00|
|Locality Education subjoin|303,713.60|1,398,939.85|
|Stamp tax|19,236.84|43,704.27|
|Local water source foundation|2,382,364.75|2,584,778.06|
|Land use tax|1,245,105.20||
|Disabled security fund|2,140.20||
|Price adjustment foundation||1,996.88|
|Total|36,008,109.09|126,091,260.73|

 20. Other account payable
(1) Other accounts payable listed by nature of the account
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Deposit|1,462,038.45|2,424,372.25|

||||
|-|-|-|
||22,729,311.10|26,127,465.27|
|Provisional account payable|||
||5,513,775.96|1,046,051.60|
|Others|||
|Total|29,705,125.51|29,597,889.12|

 21. Non-current liabilities due within 1 year
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Long-term loans due within 1 year|300,000.00||
|Total|300,000.00||

Other explanation：
22. Long-term loan
(1) Category of long-term loan
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Mortgage loan|23,400,000.00|18,500,000.00|
|Guaranteed loans|100,000,000.00||
|Total|123,400,000.00|18,500,000.00|

 23.Long term payroll payable
（1）List of long term payroll payable
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Drawing in administrative|||
||330,000.00|330,000.00|
|restructuring|||

23. Deferred income
(1) Details
In RMB
|||||||
|-|-|-|-|-|-|
|Items|Beginning of|Increased this|Decreased this|||
|||||End of term|Cause|
||term|period|period|||
|Government|||||Government|
||8,252,705.00||1,448,280.00|6,804,425.00||
|subsidy|||||subsidy|
|Total|8,252,705.00||1,448,280.00|6,804,425.00|--|

(2) Details of government subsidies
In RMB
||||||||
|-|-|-|-|-|-|-|
|||New|Amount||||
|||||Other||Asset-related|
|||subsidy in|transferred to||||
|Items|Beginning of term|||change|End of term|or|
|||current|non-operational||||
|||||s||income-related|
|||period|income||||

||||||
|-|-|-|-|-|
|Government subsidy||||Asset-related|
||5,901,165.00|997,380.00|4,903,785.00||
|for casting project|||||
|Subsidy for industrial||||Asset-related|
|upgrading by|800,000.00|160,000.00|640,000.00||
|provincial government|||||
|Government subsidy||||Asset-related|
|for industrial entities|||||
|from Yuhang District|534,650.00|106,930.00|427,720.00||
|Government in the|||||
|2nd half of 2009|||||
|Government finance||||Asset-related|
|for industrial project|345,360.00|28,780.00|316,580.00||
|in the 2nd half of 2006|||||
|Finance for casting||||Asset-related|
||345,360.00|28,780.00|316,580.00||
|project|||||
|Government subsidy||||Asset-related|
||136,920.00|11,410.00|125,510.00||
|for recycling economy|||||
|10K ton casting line||||Asset-related|
||78,000.00|26,000.00|52,000.00||
|enlarging project|||||
|Government fund for||||Asset-related|
|advanced|||||
||111,250.00|89,000.00|22,250.00||
|manufacturing|||||
|enterprise|||||
|Total|8,252,705.00|1,448,280.00|6,804,425.00|--|

 25. Stock capital
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Increase/decrease this time (+ , - )||||||
||Balance|||||||
|||||Transferr|||Balance year-end|
|||Issuing of|Bonus|||Subtota||
||Year-beginning|||ed from|Other|||
|||new share|shares|||l||
|||||reserves||||
|Total of|754,010,400.00||||||754,010,400.00|
|capital shares||||||||

26. Capital reserves
In RMB
||||||
|-|-|-|-|-|
|Items|Year-beginning|Increase in the|Decrease in the|Year-end balance|
||balance|current period|current period||
|Share premium|81,815,220.00|||81,815,220.00|
|Other capital reserves|57,775,125.09|||57,775,125.09|

||||
|-|-|-|
|Total|139,590,345.09|139,590,345.09|

 27. Other comprehensive income
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Occurred current term||||||
||||Less: accounted|||||
|||Amount||Less:||||
|Items|Beginning of|occurred|as other gains|Income|Attributable tothe parent co.after tax|Attributable to|End of term|
||term||previously but|||minority||
|||before income||tax||||
||||transferred to|||shareholders||
|||tax of the||expense||||
||||gain/loss this|||after tax||
|||period||s||||
||||period|||||
|II.|||||-212,350.28|||
|Later reclassified into profit an||||||||
||-640,401.72|-498,713.66||||-286,363.38|-852,752.00|
|d loss of other comprehensive i||||||||
|ncome||||||||
|Difference of translating of|||||-212,350.28|||
||-640,401.72|-498,713.66||||-286,363.38|-852,752.00|
|foreign currency accounts||||||||
|Total of other comprehensive|-640,401.72||||-212,350.28|-286,363.38|-852,752.00|
|||-498,713.66||||||
|income||||||||

28. Surplus reserve
In RMB
||||||
|-|-|-|-|-|
|Items|Year-beginning|Increase in the|Decrease in the|Year-end balance|
||balance|current period|current period||
|Labor safety|||||
||24,603,149.96|10,038,758.63|2,876,988.08|31,764,920.51|
|expenses|||||
|Total|24,603,149.96|10,038,758.63|2,876,988.08|31,764,920.51|

 Other notes, including changes and reason ofchange:：
(2) According to the “Notice for Provision of Labor Safety Fund”(〔.2012〕CQ No 16) issued by the Department of Finance and Safety Inspection Bureau General on February 14, 2012, the labor safety fund provided this period was RMB10,038,758.63, and RMB2,876,988.08 was used.
29. Surplus reserves
In RMB
||||||
|-|-|-|-|-|
||Beginning of term|Increased this|Decreased this|End of term|
|Items|||||
|||period|period||
|Statutory surplus|||||
||621,112,807.78|||621,112,807.78|
|reserves|||||
||621,112,807.78|||621,112,807.78|
|Total|||||

 Statement on surplus reserves. Please state the related resolutions of the Board on capitalizing of reserves, making up losses, anddividends：
30. Retained profits
In RMB
||||
|-|-|-|
|Items|Amount of this period|Amount of last period|
|Adjustment on retained profit at end of previous|||
||2,911,921,943.21|2,736,802,630.30|
|term|||
|Amount of retained profit at beginning of period|||
|||11,132,170.41|
|adjusted (+,-)|||
|Retained profit at beginning of term after|2,911,921,943.21||
|||2,747,934,800.71|
|adjustment|||
|Plus: Net profit attributable to owners of the|||
||-162,809,311.79|352,077,352.23|
|parent company|||
|Less: Statutory surplus reserves||37,288,129.73|
|Common share dividend payable|75,401,040.00|150,802,080.00|
|Retained profit at the end of term|2,673,711,591.42|2,911,921,943.21|

 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 .
31.Operation income and operation cost
In RMB
||||||
|-|-|-|-|-|
|Items|Amount of this period||Amount of last period||
||Income|Cost|Income|Cost|
|Main|2,590,940,234.32|1,801,566,917.72|3,712,245,023.30|2,356,223,787.76|
|operation|||||
|Other|9,131,917.31|4,374,605.05|10,086,896.83|6,901,864.74|
|operation|||||
||2,600,072,151.63|1,805,941,522.77|3,722,331,920.13|2,363,125,652.50|
|Total|||||

 32. Business tax and subjoin
In RMB
||||
|-|-|-|
|Items|Amount of this period|Amount of last period|
|usiness tax|168,455.47|395,605.17|
|rban construction tax|6,811,793.17|17,274,570.78|
||3,020,314.16|7,506,915.80|
|Education surcharge|||
|Locality Education surcharge|2,013,702.28|5,004,408.18|
|Total|12,014,265.08|30,181,499.93|

33. Sales expense
In RMB
||||
|-|-|-|
|Items|Amount of this period|Amount of last period|
||55,578,994.47|59,145,939.95|
|Employees’ remunerations|||
||46,831,719.53|36,715,265.29|
|Transportation|||
||21,738,647.26|23,629,326.46|
|Business trips|||
||6,581,264.62|7,147,501.90|
|Business reception expenses|||
||3,090,197.44|4,657,261.07|
|Conferences|||
||12,052,251.77|12,069,902.23|
|Consulting service fee|||
||513,268.74|808,458.03|
|Insurance for turbine unit|||
||3,092,751.43|7,713,784.14|
|Warranty expense|||
||1,262,003.93|887,305.80|
|Product exhibition|||
||887,755.72|476,111.80|
|Office expenses|||
||5,073,951.70|5,340,042.77|
|Others|||
||156,702,806.61|158,590,899.44|
|Total|||

 34. Administrative expense
In RMB
||||
|-|-|-|
|Items|Amount of this period|Amount of last period|
||310,949,457.62|315,672,788.11|
|Employees’ remunerations|||
||179,039,951.91|160,360,992.99|
|R&D|||
||21,438,092.85|19,576,145.22|
|Asset depreciation and amortizing|||
||14,480,442.18|15,642,585.41|
|Business reception expenses|||
|House rental, property management, water|14,901,746.04|18,319,231.84|
|and power|||
||7,094,343.92|6,262,888.00|
|Traveling fees|||
||9,623,889.66|8,356,544.03|
|Tax|||
||4,181,569.01|4,192,567.96|
|Material, low-value-consumable|||
||4,877,897.81|3,790,444.45|
|Office expenses|||
||2,811,447.33|4,167,891.59|
|Maintaining|||
||38,822,291.15|35,776,504.63|
|Others|||
||608,221,129.48|592,118,584.23|
|Total|||

 35.Financial expenses
In RMB
||||
|-|-|-|
|Items|Amount of this period|Amount of last period|
|Interest expense|11,853,040.55|16,566,219.27|
|Less: Incoming interests|7,263,343.36|8,389,049.84|
|Exchange gains/losses|-14,356,533.14|5,179,576.54|

||||
|-|-|-|
|Commission|2,203,086.50|1,899,044.02|
|Total|-7,563,749.45|15,255,789.99|

 36. Asset impairment loss
In RMB
||||
|-|-|-|
|Items|Amount of this period|Amount of last period|
|Bad debt losses|190,102,123.40|121,146,387.69|
|Fixed assets impairment losses|55,028,754.71||
|Total|245,130,878.11|121,146,387.69|

 37. Investment income
In RMB
||||
|-|-|-|
|Items|Amount of this period|Amount of last period|
|Investment gains from holding of|||
||28,742,368.00|24,118,640.00|
|sellable financial assets|||
|Gains from financing products|19,624,429.30|20,631,255.58|
|Total|48,366,797.30|44,749,895.58|

 38. Non-operational income
In RMB
|||||
|-|-|-|-|
||||Amount accounted into|
|Items|Current term|Same period of last term|non-recurring gain/loss of|
||||current term|
|Total of gains from disposal of||||
||||55,683.00|
|non-current assets||||
|Incl. Gains from disposal of||||
||55,683.00|510,865.15|55,683.00|
|fixed assets||||
|Government subsidy|15,752,977.27|12,268,275.22|15,752,977.27|
||11,181,491.50|10,791,741.62|11,181,491.50|
|Compensation income||||
||1,462,564.00|404,380.80|1,462,564.00|
|Payment not to be paid||||
||573,061.37|97,853.99|573,061.37|
|Others||||
|Total|29,025,777.14|24,073,116.78|29,025,777.14|

 Government subsidy reckoned into current gains/losses
In RMB
|||||||
|-|-|-|-|-|-|
||Whether the||||Asset-related or|
||||||income-related|
||impact of|Whether||||
|Subsidy items|subsidies on the|special|Amount of this|Amount of last||
||||period|period||
||current profit|subsidies||||
||and loss|||||
|Transferred from deferred income|No|No|1,448,280.00||Asset-related|
|Coal chemical industry, iron and steel industry COGEN||||||
||No|No|5,060,000.00||Income related|
|50MW steam turbine series development level||||||
|Enterprise Funding by Hangzhou Economy &|No|No|1,330,900.00||Income related|

|||||||
|-|-|-|-|-|-|
|Technology Development Zone Finance office||||||
|Refunding of property tax|No|No|1,253,825.27||Income related|
|Award for Enterprise R&D Investment 2011|No|No|971,000.00||Income related|
|Land use tax return|No|No|868,205.00||Income related|
|Water fund return|No|No|786,093.91|||
|Science and technology overall plan fund robot project|No|No|635,000.00||Income related|
|Financial support fund|No|No|635,000.00||Income related|
|2015 FINANCIAL Subsidy|No|No|500,000.00||Income related|
|Hangzhou Industrial and fiscal 2015 financial||||||
||No|No|500,000.00||Income related|
|information development funding||||||
|2015 Quality and Technical Supervision grant funds|No|No|300,000.00||Income related|
|Yuhang District 2013 annual enterprise training the first||||||
||No|No|287,700.00||Income related|
|batch of financial support fund||||||
|Quality award financial incentives|No|No|200,000.00||Income related|
|2013 second batch of quality and technical supervision||||||
||No|No|120,000.00||Income related|
|grants||||||
|Stable employment social securitysubsidies|No|No|116,589.42||Income related|
|Hangzhou Xiacheng District financial subsidies granted||||||
||No|No|100,000.00||Income related|
|for safety production financial subsidies||||||
|Production safety standards of financial reward fund|No|No|100,000.00||Income related|
|2014 The first safety standardization standards||||||
||No|No|100,000.00||Income related|
|(re-evaluation) enterprise financial assistance||||||
|Other small amount subsidies|No|No|440,383.67||Income related|
|Deferred revenue transfer|No|No||1,448,280.00|Asset-related|
|Exemption of local water preservation found 2013|No|No||3,536,744.90|Income related|
|Subsidies to Major Innovative Projects from Hangzhou||||||
||No|No||1,122,000.00|Income related|
|Industrial Fund 2013||||||
|Award for Technical Innovative Enterprise 2013|No|No||1,115,000.00|Income related|
|Government subsidy for 1st production of special|No|No||1,000,000.00|Income related|
|equipment manufacturing of strategic new industry||||||
|Subsidy for industrializing of technologies, Hangzhou|No|No||800,000.00|Income related|
|Economy and Technology Development Zone||||||
|Subsidy for enterprise R&D 2012|No|No||630,000.00|Income related|
|Award for technical standard 2013|No|No||540,000.00|Income related|
|Subsidy for innovative industrial projects 2013 of|No|No||500,000.00|Income related|
|Hangzhou||||||
|Property tax exemption 2013|No|No||358,486.06|Income related|
|Subsidy for R&D from Hangzhou Economy &|No|No||206,400.00|Income related|
|Technology Development Zone 2012||||||
|Exemption of Land-using Tax 2013|No|No||117,059.68|Income related|
|Award for the Enterprise of Year 2013|No|No||110,000.00|Income related|
|Special fund for international trading 2013 from||||||
||No|No||100,000.00|Income related|
|Zhejiang Provincial Government||||||
|Award for Technical Projects|No|No||100,000.00|Income related|

|||||||
|-|-|-|-|-|-|
|Other small amount subsidies|No|No||584,304.58|Income related|
|Total|--|--|15,752,977.27|12,268,275.22|--|

 39. Non-operational expenditure
In RMB
|||||
|-|-|-|-|
||||Amount accounted into|
|||Same period of||
|Items|Current term||non-recurring gain/loss of current|
|||last term||
||||term|
|Total of loss from disposal of||||
||||497,599.66|
|non-current assets||||
|Incl. Loss from disposal of fixed||||
||497,599.66|427,820.27|497,599.66|
|assets||||
|Donations|370,000.00|610,000.00|370,000.00|
||506,973.23|1,495,921.10|506,973.23|
|Penalty paid out||||
||3,656,045.61|5,084,356.89||
|Local water source foundation||||
||37,457.69|317,968.45|37,457.69|
|Penalties||||
||138,304.32|1,468,231.45|172,239.32|
|Others||||
|Total|5,206,380.51|9,404,298.16|1,550,334.90|

 40. Income tax expenses
(1) Details
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
|Income tax of current term|31,881,180.92|89,793,577.50|
|Deferred income tax|-56,038,959.77|-12,408,476.79|
|Total|-24,157,778.85|77,385,100.71|

 (2) Adjustment process of accounting profit and income tax expenses
In RMB
|||
|-|-|
|Items|Current term|
|Total profit|-148,188,507.04|
|Income tax expenses calculated on legal / applicable tax rate|-22,228,276.06|
|Impact of different tax rates of subsidiaries|3,160,197.56|
|Impact of income tax adjustment in previous periods|1,235,288.54|
|Impact of non-taxable income|-4,411,355.20|
|Impact of un-deductible costs, expenses or losses|2,978,439.52|
|Change on open balance of deferred income tax asset by change of||
||-116,838.71|
|tax rate||
|Impact of provisional differences by using unrecognized deferred||
||895,204.27|
|income tax asset of previous period||
|Impact of extra deduction of R&D expenses|-5,665,533.49|
|Impact of deductible temporary difference of un-recognized||
||-4,905.28|
|deferred income tax asset of current period||

|||
|-|-|
|Income tax expenses|-24,157,778.85|

 41. Other Comprehensive income
Please find the statement in the notes of consolidated balance sheet.
42. Notes Cash flow statement
(1) Other cash received from business operation
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Deposit interest|7,263,343.36|8,389,049.84|
|Government subsidies received|11,396,573.09|10,849,995.22|
|Deposit for bidding and other|9,164,486.54|3,669,590.00|
|Compensation income|204,038.50|1,594,307.63|
|Other|2,365,618.08|97,136.21|
|Total|30,394,059.57|24,600,078.90|

 2. Other cash paid for business activities
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Travel expenses|48,696,007.83|38,445,727.11|
|Transportation|27,665,861.80|28,646,346.08|
|Business trips|21,637,189.33|22,417,855.72|
|Maintaining|2,824,225.05|4,191,987.22|
|Property management and civil|||
||15,113,839.76|25,466,837.10|
|services|||
|Deposit for bidding and others|1,086,259.96|7,277,860.47|
|Office expenses|5,767,669.91|6,754,541.50|
|Conferences|3,308,152.54|4,473,984.77|
|Consulting service fee|12,970,940.60|12,316,585.78|
|Transportation and vehicles|7,467,278.69|6,970,905.17|
|Other|35,568,063.63|29,188,046.33|
|Total|182,105,489.10|186,150,677.25|

 3. Other investment-related cash received
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Repurchasing of trusteeship|1,744,905,999.95|1,810,600,000.00|
|Principal and interest of loans|||
|retrieved from Hangzhou Hengsheng||2,594,104.88|
|Thermal Power Equipment Co., Ltd.|||
||1,744,905,999.95|1,813,194,104.88|
|Total|||

4. Other cash paid for investment activities
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
|Purchasing of financial products|1,792,105,999.95|1,871,400,000.00|
||1,792,105,999.95|1,871,400,000.00|
|Total|||

 5. Other financing-related cash received
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
|Financing notes received from|||
|||300,000,000.00|
|HSTG|||
|||300,000,000.00|
|Total|||

 6. Other cash paid for financing activities
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
|Repayment of financing notes to|||
|||300,000,000.00|
|HSTG|||
|||300,000,000.00|
|Total|||

 43. Supplementary data of cash flow statement
(1) Supplementary data of cash flow statement
In RMB
In RMB
||||
|-|-|-|
||Amount of the Current|Amount of the Previous|
|Supplementary Info.|||
||Term|Term|
|I. Adjusting net profit to cash flow from operating|||
||--|--|
|activities|||
|Net profit|-124,030,728.19|423,946,719.84|
|Add: Impairment loss provision of assets|245,130,878.11|121,146,387.69|
|Depreciation of fixed assets, oil and gas assets and|||
||85,829,041.11|82,042,922.86|
|consumable biological assets|||
|Amortization of intangible assets|7,219,788.66|6,742,865.49|
|Amortization of Long-term deferred expenses|434,759.72|264,386.48|
|Loss on disposal of fixed assets, intangible assets and other|||
||435,942.14|-83,044.88|
|long-term deferred assets|||
|Loss on scrap of fixed assets|5,974.52||
|Financial cost|5,284,099.92|16,322,020.76|
|Loss on investment|-48,366,797.30|-44,749,895.58|
|Decrease of deferred income tax assets|-56,038,959.77|-12,408,476.79|
|Decrease of inventories|-287,824,364.62|-71,411,960.25|

||||
|-|-|-|
|Decease of operating receivables|135,158,915.99|-98,723,280.79|
|Increased of operating Payable|382,311,670.05|-149,391,703.55|
|Other|10,127,552.71|10,032,030.64|
|Net cash flows arising from operating activities|355,677,773.05|283,728,971.92|
|II. Significant investment and financing activities that|||
||--|--|
|without cash flows:|||
|3．Movement of cash and cash equivalents：|--|--|
|Ending balance of cash|689,224,662.53|562,763,561.50|
|Less: Beginning balance of cash equivalents|562,763,561.50|810,928,644.47|
|Net increase of cash and cash equivalents|126,461,101.03|-248,165,082.97|

（2）Composition of cash and cash equivalents
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
||689,224,662.53|562,763,561.50|
|1) Cash|||
||391,106.17|307,654.85|
|Incl: Cash in stock|||
|Bank savings could be used at any time|688,833,556.36|562,455,906.65|
|3) Balance of cash and cash equivalents at end of|689,224,662.53|562,763,561.50|
|term|||

(3) Monetary capital not categorized as cash or cash equivalents
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Security deposit not attributable as cash or cash equivalent|62,372,133.71|51,194,502.41|
|Sub-total|62,372,133.71|51,194,502.41|

44. Assets with limitation on ownership or using rights
In RMB
||||
|-|-|-|
|Items|Closing book value|Causation of limitation|
|||Used as security for issuing of acceptance|
|Monetary capital|62,372,133.71||
|||drafts and bill of guarantees|
|Fixed assets|126,746,585.06|Securities for loans|
|Intangible assets|20,781,028.64|Securities for loans|
|Total|209,899,747.41|--|

45. Monetary items in foreign currencies
(1) Details
In RMB
|||||
|-|-|-|-|
|Items|Balance at end of period|Exchange rate|Translated to RMB at|
||||end of period|

|||||
|-|-|-|-|
|Monetary capital|--|--|119,133,836.90|
|Incl. USD|16,745,776.61|6.4936|108,740,375.00|
|EURO|1,167,219.44|7.0952|8,281,655.37|
|HKD|5.51|0.8378|4.62|
|JPY|3,531.00|0.0539|190.22|
|Indonesia Rubi|4,505,170,987.00|0.000469|2,110,878.30|
|SWF|114.56|6.4018|733.39|
|Account receivable|--|--|167,308,082.78|
|Incl：USD|24,131,152.87|6.4936|156,698,054.27|
|Euro|1,334,724.51|7.0952|9,470,137.34|
|Indonesia Rubi|1,965,545,080.00|0.000469|920,947.60|
|SGD|47,726.12|4.5875|218,943.57|
|Account payable|||9,835,665.12|
|Incl：USD|1,395,108.56|6.4936|9,059,276.95|
|Euro|4,150.86|7.0952|29,451.18|
|Indonesia Rubi|1,594,160,546.00|0.000469|746,936.99|
|Other receivable|||3,246,800.00|
|Incl：USD|500,000.00|6.4936|3,246,800.00|
|Other payable|||253,156.40|
|Indl：Indonesia Rubi|540,302,517.00|0.000469|253,156.40|

 (2) Note to overseas operating entities, including important overseas operating entities, which should be disclosed about its principal business place, function currency for bookkeeping and basis for the choice. In case of any change in function currency, the cause should be disclosed.
Hangzhou Zhongneng Steam Turbine Power (Indonesia) Co., Ltd. has its business located in Indonesia Rupee is the pricing and booking currency of business operation.
VIII. Change in consolidation scope
1.Change in consolidation scope due to other cause
Description of consolidation scope changes and other causes (eg, the new subsidiary, the subsidiary liquidation, et c.) and related conditions:
||||||
|-|-|-|-|-|
||Way of||||
|Increased of Consolidation scope||Date of acquiring|Capital input|Proportion %|
||acquiring equity||||
|Zhejiang Zhongrun Fuel Engine|Newly||||
|||May 22, 2015|10,000,000|55.55%|
|Technology Co., Ltd.|incorporated||||

IX. Equities in Other Entities
(I) Equity in major subsidiaries
1. Composition of major subsidiaries
||||||||
|-|-|-|-|-|-|-|
|||||Share proportion %||Way|
|Name of the subsidiaries|Main busines|sReg. Add.|Business|Direct|Indirect||
||location||property|||of|

||||||||
|-|-|-|-|-|-|-|
|||||||obtain|
|Zhejiang Steam Trubine Packaged Technologies||||||Incorp|
||Hangzhou|Hangzhou||70.86%|||
|Development Co., Ltd.|||Manufacturing|||oratio|
||Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
|Hangzhou Zhongneng Steam Turbine Power Co., Ltd.|Hangzhou|Hangzhou||60.83%||oratio|
||||Manufacturing||||
|(Zhongneng Co.)|Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
||Hangzhou|Hangzhou||51.00%||oratio|
|Hangzhou Steam Turbine Casting Co., Ltd.|||Manufacturing||||
||Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
|Hangzhou Steam Turbine Machinery Equipment Co.,|Hangzhou|Hangzhou||52.00%||oratio|
||||Manufacturing||||
|Ltd.|Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
|Hangzhou Steam Turbine Auxiliary Machinery Co.,|Hangzhou|Hangzhou||87.53%||oratio|
||||Manufacturing||||
|Ltd. (Auxiliary Machinery Co.)|Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
|Zhejiang Turbine Import & Export Co., Ltd. (Turbine|Hangzhou|Hangzhou||100.00%||oratio|
||||Commerce||||
|Co.)|Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
|Hangzhou Steam Turbine Heavy Industry Co., Ltd.|Hangzhou|Hangzhou||100.00%||oratio|
||||Manufacturing||||
|(Steam Turbine Heavy Industry)|Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
|Zhejiang Huayuan Steam Turbine Machinery Co.,|Hangzhou|Hangzhou|||75.00%|oratio|
||||Manufacturing||||
|Ltd. (Huayuan Co.)|Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
|Hangzhou Guoneng Steam Turbine Engineering Co.,|Hangzhou|Hangzhou|||75.00%|oratio|
||||Manufacturing||||
|Ltd. (Guoneng Co.)|Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
|Xinjiang Taifeng Hangzhou Steam Turbine Packaged|||||||
||Xinjiang|Xinjiang|Manufacturing||51.00%|oratio|
|Technology Development Co., Ltd.|||||||
|||||||n|
|||||||Incorp|
|Hangzhou Bypass Mechanical & Electrical|Hangzhou|Hangzhou|||||
||||Manufacturing||70.00%|oratio|
|Equipment Co., Ltd.|Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
|Shijiazhuang Hangneng Steam Turbine Technology|Shijiazhuang|Shijiazhuang|||||
||||Service||60.00%|oratio|
|Service Co., Ltd.|Hebei|Hebei|||||
|||||||n|
|Kunming Hangzhong Steam Turbine Technology||||||Incorp|
||Kunming Yunnan|Kunming Yunnan|Service||60.00%||
|Sevrvice Co., Ltd.||||||oratio|

|||||||
|-|-|-|-|-|-|
||||||n|
||||||Incorp|
|Wulumuqi Hangzhongneng Steam Turbine|Qulumuqi|Qulumuqi||||
||||Service|60.00%|oratio|
|Technology Sevrvice Co., Ltd.|Xingjiang|Xingjiang||||
||||||n|
||||||Incorp|
|Tangshan Hangneng Steam turbine Technology||||||
||Tangshan Hebei|Tangshan Hebei|Service|60.00%|oratio|
|Sevrvice Co., Ltd.||||||
||||||n|
||||||Incorp|
|Jilin Hangzhongneng Steam turbine Technology||||||
||Jilin|Jilin|Service|60.00%|oratio|
|Sevrvice Co., Ltd.||||||
||||||n|
||||||Incorp|
|Guangxi Hangzhongneng Steam turbine Technology||||||
||Nanning Guangxi|Nanning Guangxi|Service|60.00%|oratio|
|Sevrvice Co., Ltd.||||||
||||||n|
||||||Incorp|
|Chengdu Hangzhongneng Steam turbine Technology||||||
||Chengdu Sichuan|Chengdu Sichuan|Service|60.00%|oratio|
|Sevrvice Co., Ltd.||||||
||||||n|
||||||Incorp|
|Luoyang Hangzhongneng Steam turbine Technology||||||
||Luoyang Henan|Luoyang Henan|Service|60.00%|oratio|
|Sevrvice Co., Ltd.||||||
||||||n|
||||||Incorp|
||Hangzhou|Hangzhou||||
|Hangzhou Steam turbine Boiler Co., Ltd.|||Manufacturing|50.00%|oratio|
||Zhejiang|Zhejiang||||
||||||n|
||||||Incorp|
|Hangzhou Zhongneng Steam turbine (Indonesia) Co.,||||||
||Indonesia|Indonesia|Manufacturing|70.00%|oratio|
|Ltd.||||||
||||||n|
||||||Incorp|
||Hangzhou|Hangzhou||||
|Hangzhou Kaineng Casting Co., Ltd.|||Manufacturing|100.00%|oratio|
||Zhejiang|Zhejiang||||
||||||n|
||||||Incorp|
|Zhejiang Runhong Burming Machine Engineering|Hangzhou|Hangzhou||||
||||Manufacturing|58.00%|oratio|
|Co., Ltd.|Zhejiang|Zhejiang||||
||||||n|
||||||Incorp|
|Zhejiang Zhongrun Burning machine Technology||||||
||Huzhou Zhejiang|Huzhou Zhejiang|Manufacturing|55.55%|oratio|
|Co., Ltd.||||||
||||||n|

（2）Major non-fully-Owned subsidiaries
In RMB
||||||
|-|-|-|-|-|
||Share protion|Gains/loss of the|Dividend announced|Balance of eqiuty of|
|Name of the subsidiaries|||||
||of minor|period attributable to|in the period to mino|r minor shareholders at|

||||||
|-|-|-|-|-|
||shareholders|minor shareholders|shareholders|end of period|
|Zhejiang Steam trubine Packaged|||||
||29.14%|2,701,452.58|4,459,185.00|33,022,226.42|
|Technology Development Co., Ltd.|||||
|Hangzhou Zhongneng Steam|||||
||39.17%|8,947,688.57|11,751,600.00|145,574,590.73|
|turbine PowerCo., Ltd.|||||
|Hangzhou Steam Turbine Casting|||||
||49.00%|2,777,180.98|9,800,000.00|74,254,700.04|
|Co., Ltd.|||||
|Hangzhou Steam Turbine|||||
||48.00%|22,960,442.64|21,600,000.00|70,770,558.32|
|Machinery Equipment Co., Ltd.|||||
|Hangzhou Steam Turbine Auxiliary|||||
||12.47%|2,589,696.45|7,980,800.00|26,789,819.41|
|Machinery Co., Ltd.|||||

Notes：
According to the articles of association of Huayuan Co., Hong Kong Ruiyun Enterprise Co., Ltd.– the overseas investor– will no longer enjoy the equity of the joint-venture as soon as the return reaches RMB10.50 million. As of December 31, 2012, Hong Kong Ruiyun Enterprise Co., Ltd. had received RMB10.50 million of dividend, therefore the minorityshareholder’s equity is neutralized to zero.
According to the articles of association of Guoneng Co., Hong Kong Ruiyun Enterprise Co., Ltd.– the overseas investor– will no longer enjoy the equity of the joint-venture as soon as the return reaches RMB20 million. As of December 31, 2011, Hong Kong Ruiyun Enterprise Co., Ltd. had received RMB20 million of dividend, therefore the minorityshareholder’s equity is neutralized to zero.
3 Material financial information of major non-fully-owned subsidiaries
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||End of term||||||Beginning of term||||||
|Subsidiaries Name||Non-current||Current|Non-current|Total of||Non-current|||Non-current|Total of|
||Current assets||Total of assets||||Current assets||Total of assets|Current liabilities|||
|||assets||liabilities|liabilities|liability||assets|||liabilities|liability|
|Zhejiang Steam trubine|||||||||||||
||||||||242,916,104.7|||||184,460,725.|
|Packaged Technology|260,227,660.6|22,709,089.71|282,936,750.3|190,272,137.4||190,272,137.4||30,828,926.61|273,745,031.39|184,460,725.05|||
||3||4|9||9|8|||||05|
|Development Co., Ltd.|||||||||||||
|Hangzhou Zhongneng Steam|||||||||||||
||||||||654,074,224.9|114,095,212.1||||442,548,457.|
||804,557,533.7||886,147,802.2|548,736,452.5||549,066,452.5|||||||
|||81,590,268.49|||330,000.00||||768,169,437.01|442,218,457.32|330,000.00||
|turbine PowerCo., Ltd.|7||6|5||5|1|0||||32|
|Hangzhou Steam Turbine|||||||||||||
||||||||249,835,889.1|212,563,075.4|||26,106,805.0|283,603,772.|
||223,797,190.8|199,438,595.7|423,235,786.6|224,664,623.5||254,419,078.5|||||||
||||||29,754,455.00||||462,398,964.61|257,496,967.62|||
|Casting Co., Ltd.|5|8|3|2||2|2|9|||0|62|
|Hangzhou Steam Turbine|||||||||||||
||||||||138,628,223.5|||||76,377,497.0|
|Machinery Equipment Co.,|185,381,983.0|21,333,275.97|206,715,259.0|59,276,595.83||59,276,595.83||20,941,588.24|159,569,811.80|76,377,497.04|||
||6||3||||6|||||4|
|Ltd.|||||||||||||
|Hangzhou Steam Turbine|||||||||||||
||||||||135,991,610.1|||||49,629,812.1|
|Auxiliary Machinery Co.,|400,114,948.2|112,067,629.6|512,182,577.9|272,629,536.6|427,720.00|273,057,256.6||62,538,428.35|198,530,038.54|49,629,812.11|||
||4|8|2|3||3|9|||||1|
|Ltd.|||||||||||||

In RMB元
||||||||||
|-|-|-|-|-|-|-|-|-|
||Amount of current period||||Amount of previous period||||
||||Total Misc Gains|Cash flow for business||||Cash flow for business|
|Subsidiaries Name|Turnover|Net profit|||Turnover|Net profit|Total Misc Gains||
|||||activities||||activities|
|Zhejiang Steam trubine Packaged|||||||||
||216,220,744.25|10,511,797.60|10,511,797.60|16,070,589.71|231,731,289.67|18,414,619.99|18,414,619.99|23,432,599.74|
|Technology Development Co., Ltd.|||||||||
|Hangzhou Zhongneng Steam turbine|||||||||
||704,991,946.83|20,863,372.38|19,240,043.27|39,621,832.18|713,411,107.53|81,996,808.93|81,996,808.93|-21,698,214.35|
|PowerCo., Ltd.|||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|Hangzhou Steam Turbine Casting Co.,|||||||||
||293,407,553.21|5,944,783.76|5,944,783.76|36,007,460.88|307,664,308.13|12,028,805.45|12,028,805.45|6,568,378.24|
|Ltd.|||||||||
|Hangzhou Steam Turbine Machinery|||||||||
||190,469,672.28|47,834,255.49|47,834,255.49|26,726,329.69|193,261,167.91|46,709,357.68|46,709,357.68|13,968,622.41|
|Equipment Co., Ltd.|||||||||
|Hangzhou Steam Turbine Auxiliary|||||||||
||393,879,695.72|33,520,334.09|33,520,334.09|78,733,368.09|152,984,962.37|52,105,904.36|52,105,904.36|18,621,347.18|
|Machinery Co., Ltd.|||||||||

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.
(1) Keep constant awareness on risks and supervising receivable accounts.
(2) Keep tracking every detail of business and accounting practices. Trade payment records are maintained as important references to the ranking of client credit. Dynamic management is performed on the clients latest situation and policies are made relatively.
(3) Keep on with direct sales and ensure every contract is followed by corresponding personnel.
For the Company only trade with parties with good credit ranks, no security property is needed. As of December 31,2015, the credit risks feature collectiveness within the Company.45.07%(48.95%,December 31, 2014) of the receivable accounts were attributable to top 5 clients. The Company holds no property as pledge or other credit ranking up.
Analyzing of receivable accounts neither due nor impaired, and those have due but not impaired:
|||||||
|-|-|-|-|-|-|
|Items|End of term|||||
||Not overdue and notimpaired|Overdue but not impaired|||Total|
|||Within 1year|1-2 year|Over 2 years||
|Bill receivable|680,518,943.49||||680,518,943.49|
|Subtotal|680,518,943.49||||680,518,943.49|

 (Continue)
|||||||
|-|-|-|-|-|-|
|Items|Beinning of term|||||
||Not overdue and notimpaired|Overdue but not impaired|||Total|
|||Within 1year|1-2 year|Over 2 years||
|Bill receivable|701,109,938.01||||701,109,938.01|
|Subtotal|701,109,938.01||||701,109,938.01|

 (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 3years|
|Financialliabilities||||||
|Short-term loans|85,350,000.00|89,602,537.84|89,602,537.84|||
|Notes payable|194,226,049.73|194,226,049.73|194,226,049.73|||
|Non-currentliabilities due to 1year|300,000.00|331,550.05|331,550.05|||
|Long-term loan|123,400,000.00|142,672,805.36||142,672,805.36||
|Account payable|810,420,381.45|810,420,381.45|810,420,381.45|||
|Other accountpayable|29,705,125.51|29,705,125.51|29,705,125.51|||
|Subtotal|1,243,401,556.69|1,266,958,449.94|1,124,285,644.58|142,672,805.36||

(Continue)
|||||||
|-|-|-|-|-|-|
|Items|Beginning of term|||||
||Book value|Contract amount notdiscounted|within 1 year|1-3 years|Over 3years|
|Financialliabilities||||||
|Short-termloans|198,600,000.00|205,225,558.91|205,225,558.91|||
|Notes payable|150,763,452.14|150,763,452.14|150,763,452.14|||
|Long-termloans|18,500,000.00|21,917,202.85||21,917,202.85||
|Accountpayable|763,085,718.92|763,085,718.92|763,085,718.92|||

||||||
|-|-|-|-|-|
|Other accountpayable|29,597,889.12|29,597,889.12|29,597,889.12||
|Sub-total|1,160,547,060.18|1,170,589,821.94|1,148,672,619.09|21,917,202.85|

 (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, 2015, the Company had raised RMB83,850,000.00 (Dec 31 2014: RMB58,700,000.00) 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. Related parties and related transactions
(I) Related parties
1. Parent company of the Company
|||||||
|-|-|-|-|-|-|
|Name of the||||Shareholding of|Voting rights of the|
||Reg. Add.|Business property|Registered capital|||
|parent co.||||the parent co.|parent co. %|
|Hangzhou Steam||||||
||Hangzhou China|Manufacturing|800 mil|63.64%|63.64%|
|Turbine Group||||||

Notes
(1) Place of registration, organizational form and address of headquarters.
Hangzhou Steam Turbine Power Group Co. Ltd., is a solely state-owned limited liability company approved by Hangzhou government. It was registered in Hangzhou administrative bureau for industry and commerce on May 7, 1998, with the License of The Business Corporation now numbered 330100000031779. Place of registration: Hangzhou. Legal representative: Zhonghai Nie. Registered capital of the company is 800 million Yuan, fully contributed by State-owned Assets Supervision and Administration Commission of Hangzhou government.
The predecessor of Hangzhou Steam Turbine Power Group Co. Ltd., is turbine factory, and it was built to be Hangzhou Steam Turbine Group Power Co. Ltd., on Dec. 14, 1992, officially replied and approved by files numbered[1992]68 by Hangzhou Commission for Structural Reforms, numbered[1992]883 by Hangzhou planning commission and numbered[1992]705 by Hangzhou economic committee. In June, 1995, Hangzhou Steam Turbine (Group) corporation reorganized to be Hangzhou Steam Turbine Group Co. Ltd., according to file No.[1995]61 published by Hangzhou government and fileNo.[1995]112 published by the government of Zhejiang province and state economic and trade commission, becoming solely state-owned corporation with registered capital 156.85 million authorized by Hangzhou government. In Jan. 2008, according to decisions of the second-session 32nd board meeting and the brief response note of the official document processing issued by the Hangzhou government State-owned Assets Supervision and Administration Commission “SASACJF[2008] No. 2 ”, and respond opinion and revised regulation of No.4 Hangzhou government State-owned Assets Supervision and Administration Commission, the registered capital of the Group increased by 343.15 million. In Feb. 2008,
the Group completed industrial and commercial change procedure, with registered capital 500 million after
change. In Sept. 2012, according to theGroup’s board decision and the brief response note of the official
document processing issued by and revised regulation received from the Hangzhou government State-owned
Assets Supervision and Administration Commission “SASACJF[2008] No. 33 ” , the Group increased by 300
million in registered capital. In Nov. 2012, the Group settled the industry and commercial change procedure, with registered capital of 800 million after change.
(2) Nature of business and main business scope
Hangzhou Steam Turbine Group is a group company, whose business covers manufacture, process and textile machine, paper manufacturing machine, pump, casting, electric tool, variable gear devices, heat exchanger, numerical control and digital display devices and spare part of above equipment. It undertakes overseas machinery industry and domestic international bidding projects and equipment, material export, appointing contract workers needed by above foreign projects. It also involves thermoelectric project contracting and whole set of equipment, wholesale and retail products, spare parts and technology development, consulting, service of products mentioned above produced by group member enterprises. It provides raw materials, equipment, spare parts needed by group member enterprises for production and water, electricity and gas supply for subordinate companies.
Hangzhou Municipal Government State-owned Asset Supervisory Committee is the ultimate controller of theCompany.。
2.Subsidiaries
For details of subsidiaries please go to the statement of equities in other entities.
3. Other related parties
|||
|-|-|
|Name of the related parties|Relationship with the Company|
|Hangzhou Steam turbine Automobile sales service Co.,||
||Affiliate of the Group|
|Ltd.||
|Hangzhou Hangfa Power Generating Equipment Co.,||
||Affiliate of the Group|
|Ltd.||
|Hangzhou Nanfangtongda Gears Co., Ltd.|Affiliate of the Group|
|Hangzhou Nanhua Wooden Packaging Co., Ltd.|Affiliate of the Group|
|Hangzhou Steam Turbine Industrical Co., Ltd.|Affiliate of the Group|
|Hangzhou Steam Turbine Power Technologies Co., Ltd.|Affiliate of the Group|
|HSTG Technology Association|Affiliate of the Group|
|angzhou Steam Turbine Engineering Co., Ltd.|Affiliate of the Group|
|HSTG Equipment Engineering Co., Ltd.|Affiliate of the Group|
|Hangzhou Relian Group Co., Ltd.|Affiliate of the Group|
|Zhejiang Hanglian Steel & Iron Co., Ltd.|Affiliate of the Group|
|Hangzhou Steam Turbine Electronic Valve Co., Ltd.|Affiliate of the Group|
|Hangzhou Steam Turbine Compressor Co., Ltd.|Affiliate of the Group|
|HSTG(Hangzhou) United Institutes Co., Ltd.|Affiliate of the Group|
|Hangzhou Wandong Electric Co., Ltd|Affiliate of the Group|
|Greenesol Co.(India)|Affiliates of the auxiliary Co|

Other explanation
4.Related transaction
(1) Sale of goods/rendering of labor services/labor service offering
Purchase of goods and service
In RMB
|||||||
|-|-|-|-|-|-|
|Related parties|Content|Reporting period|Trading limit|Over the|Prior period|

|||||||
|-|-|-|-|-|-|
||||approved|trading||
|||||limit or not||
|Hangzhou Steam Turbine Automobile|freight,|||||
|||58,984,034.85|64,000,000.00|No|59,249,879.59|
|Sales Service Co., Ltd.|repairing fee|||||
|Hangzhou Hangfa Power Generating|Generators|||||
|||126,685,952.21|120,000,000.00|Yes|119,833,954.27|
|Equipment Co., Ltd.||||||
|Hangzhou Nanhua Wooden Packaging|Packaging|||||
|||11,948,339.94|12,000,000.00|No|12,526,915.52|
|Co., Ltd.|materials|||||
|Hangzhou Nanfang Tongda Gears Co.,|Gear boxes|||||
|||5,421,380.35|16,000,000.00|No|16,252,887.19|
|Ltd.||||||
|Hangzhou Steam Turbine Industrial Co.|Raw|||||
||materials,|||||
|||1,286,863.61|||945,078.92|
||Industrial|||||
||cooperation|||||
|Hangzhou Steam Turbine Group|Equipment|||||
|||331,131.48|||182,857.89|
||maintenance|||||
|HSTG Technology Association|Industrial|||||
|||16,923.08|||3,760.68|
||cooperation|||||
|Greenesol Co. (India)|Generators|25,924,364.86|50,000,000.00|No|49,868,293.64|
|HSTG (Hangzhou) United Institutes Co.,|Technical|||||
|||200,000.00|||11,400.00|
|Ltd.|service|||||
|Hangzhou Steam Turbine Engineering||||||
||Law material|1,538,461.54||||
|Co., Ltd.||||||
|Hangzhou Steam Turbine Electronic Tube||||||
||Law material|770,000.03||||
|Co., Ltd.||||||
||Industrial|||||
|Hangzhou Wandong Electric Co., Ltd.||13,743.59||||
||cooperation|||||
|Subtotal||233,121,195.54||No|258,875,027.70|

 Related transactions regarding sales of goods or providing of services
In RMB
|||||
|-|-|-|-|
||Subjects of the related|||
|Related parties||Current term|Same period of last term|
||transactions|||
|Hangzhou Hangfa Power Generating|Cast parts, industrial|||
|||11,111,122.55|10,527,798.78|
|Equipment Co., Ltd.|co-operation|||
|Hangzhou Steam Turbine|Steam turbine|||
|||188,034,438.04|25,040,660.40|
|Engineering Co., Ltd.||||
|Hangzhou Steam Turbine Group|Industrial cooperation|94,339.62|94,339.62|
|Hangzhou Steam TurbineAutomobile Sales Service Co., Ltd.||||
||Small amount materials|408.87|982.30|
|Hangzhou Nanhua WoodenPackaging Co., Ltd.||||
||Small amount materials|854.70||
|Greenesol Co.(India)|Steam turbine|1,885,925.23|2,198,986.74|
|Hangzhou Steam Turbine|Compressor,Industrial|||
|||620,733.76||
|Compressor Co., Ltd.|cooperation|||
|Subtotal||201,747,822.77|37,862,767.84|

2. Rental with related parties
The Company as leasee
In RMB
|||||
|-|-|-|-|
||Category of asset|Rental recognized this|Rental recognized|
|Name of the owner||||
||for rent|period|previous period|
|Hangzhou Steam Turbine Group|Houses & plants|3,241,447.16|6,433,118.75|
||Engineering|||
|Hangzhou Steam Turbine Group||1,760,683.76||
||Equipment|||
|Hangzhou Steam Turbine Group|Land using right|3,545,791.00|3,545,791.00|
|Hangzhou Steam Turbine Automobile||||
||Site leasing|5,464,123.22|5,242,213.66|
|Sales Service Co., Ltd.||||
|Subtotal||14,012,045.14|15,221,123.41|

 Notes
3. Guarantees among the related parties
The Company as the provider
In RMB
||||||
|-|-|-|-|-|
|||Guarantee|Guarantee|Completed or|
|The beneficiary|Amount guaranteed||||
|||Start date|Expired on|not|
|Hangzhou Steam|||||
||100,000,000.00|December 18,2017|December 18,2019|No|
|Turbine Group|||||

4. Remunerations of key managements
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
|Remunerations of key managements||8,825,900.72|

 5. Other related transactions
(1) Service and power supply
HSTG supplies water and power to the Company and some of the subsidiaries amounted to RMB15,348,844.59 this period.
Hangzhou Steam Turbine Automobile Sales& Service Co., Ltd. provided transportation to theCompany’s employees and RMB2,475,553.85 was paid this period.
Hangzhou Steam Turbine Industry Co., Ltd. provided cleaning services to the Company and RMB1,166,665.00 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
Hangzhou Steam Turbine Automobile Sales& Service Co., Ltd. paid RMB9,797,655.09 of tarrif on behalf of Turbine Co. during the period.
5.Payables and receivables of the related party
（1）Receivable
In RMB
|||||
|-|-|-|-|
|Projects|Related parties|End of term|Beginning of term|

|||||||
|-|-|-|-|-|-|
||||Bad debt||Bad debt|
|||Book balance||Book balance||
||||provision||provision|
|Account|Hangzhou Steam Turbine|||||
|||49,710,305.99|3,657,185.10|8,351,855.99|1,693,436.30|
|payable|Engineering Co., Ltd.|||||
||Hangzhou Hangfa Power|||||
|||16,174,291.35|972,428.47|10,824,277.96|541,213.90|
||Generating Equipment Co., Ltd.|||||
||Hangzhou Nanhua Wooden|||||
|||310,060.00|186,036.00|1,017,560.00|447,753.00|
||Packaging Co., Ltd.|||||
||Hangzhou Steam Turbine Group|236,000.00|11,800.00|||
||Hangzhou Steam Turbine Group|258,500.00|163,500.00|258,500.00|115,100.00|
||Hangzhou Nanfangtongda Gears|||||
|||16.48|0.82|1,149.30|57.47|
||Co., Ltd.|||||
||Hangzhou Nanfangtongda Gears|||||
|||||4,434.00|2,660.40|
||Co., Ltd.|||||
||Greenesol Co. (India)|14,642,682.67|8,785,609.60|13,797,981.90|5,519,192.76|
|Subtotal||81,331,356.49|13,776,059.99|34,255,759.15|8,319,413.83|
||Hangzhou Steam Turbine|||||
|Prepayment||2,270,000.00||||
||Engineering Co., Ltd.|||||
||Hangzhou Steam Turbine|||||
|||26,834,825.00||22,009,425.00||
||Electronic Valve Co., Ltd.|||||
||Hangzhou Steam Turbine|||||
|||||900,900.00||
||Electronic Valve Co., Ltd.|||||
||Hangzhou Steam Turbine Group|||107,715.92||
|Subtotal||29,104,825.00||23,018,040.92||

（2）Payables
In RMB
|||||
|-|-|-|-|
|Projects|Related parties|End of term|Beginning of term|
|Account|Hangzhou Hangfa Power Generating Equipment|||
|||100,434,643.05|79,049,778.95|
|payable|Co., Ltd.|||
||Greenesol Co. (India)|8,495,882.02|11,133,713.63|
||Hangzhou Steam Turbine Group|5,251,995.90|1,134,000.82|
||Hangzhou Steam Turbine Automobile Sales|||
|||2,737,416.93|1,458,189.74|
||Service Co., Ltd.|||
||Hangzhou Nanhua Wooden Packaging Co., Ltd.|404,433.00|313,983.80|
||Hangzhou Steam Turbine Engineering Co., Ltd.|380,000.00||
||HSTG (Hangzhou) United Institutes Co., Ltd.|153,000.00||
||Hangzhou Nanfangtongda Gears Co., Ltd.|112,273.00|982,000.00|
||Hangzhou Steam Turbine Industrial Co.|8,440.00|203,484.86|

|||||
|-|-|-|-|
||Hangzhou Steam Turbine Group||1,134,000.82|
|Subtotal||117,978,083.90|94,275,151.80|
|Advances||||
||Hangzhou Steam Turbine Engineering Co., Ltd.|55,573,740.00|15,979,200.00|
|received||||
||Hangzhou Steam Turbine Compressor Co., Ltd.|14,235,000.00|14,190,000.00|
|Subtotal||69,808,740.00|30,169,200.00|
|Other account||||
||Hangzhou Steam Turbine Group|6,050,024.82|5,688,406.79|
|payable||||
|Subtotal||6,050,024.82|5,688,406.79|

 6. Related party commitment
XII. Commitment and Contingency Issues
(I) Material commitment issues
Significant contingency at balance sheet date
1. External investment contracts engaged but not exercised or not fully exercised and related financial outflow The Company invested RMB10 million to be one of the partners of Hangzhou Changdi Share Investment Partnership (with limited liabilities) in 2011. This was the initial input of capital, and the Company committed to input supplementary capital when necessary according to the portion of interests, but not greater than RMB50 million accumulative in 8-11 years during the existing period of the firm. Extra RMB11.5935 million was inputted in , accumulated to RMB39.1155 million thereof.
2. Outsourcing contracts engaged with large amounts and are under processing or preparation
Capital commitment related to construction of workshops or purchasing of equipment by the Company or subsidiaries is amounted to RMB25. 138 million.
XIII. Major contingencies on balance sheet date
1.Major non adjusting events
In RMB
|||||
|-|-|-|-|
|Items|Content|Influence|Reason|
||To improve the return on investment of|||
||company funds, the company intends to use|||
||its own funds of RMB 50 million to invest|||
||in Hangzhou Jushi investment partnership|||
|Major overseas|(limited partnership), the company as a|||
||limited partner, in order to limit the amount||Yet the actual contribution|
|investment||||
||of capital subscribed by foreign limited|||
||liability. The 26th session of the 6th matter|||
||by the company Board of Directors. As|||
||financial report, the company has not yet|||
||actual contribution to the partnership.|||

1. Profit distribution
N/A
XIV. Other Material Issues
A.Segment information
1. Recognition of segments and accounting policies
Business segments are determined according to the administration structure, management requirement, and internal reporting mechanism. Segments are parts of theCompany’s business satisfying all of the following
conditions:
(1) Generate revenue and expenses in daily operations;
(2) Operational results can be assessed by the management to decide the resources to be allocated;
(3) Financial position, business results, and cash flow of the part is accessible through analyzing.
2. Reasons of not being able to report about the segments
TheCompany’s business range is relatively narrow and mainly involved in producing and selling of steam turbines, gas turbines and auxiliary machinery and parts. It is regarded as an integral business by the management. Therefore segment report is not included in this report.
B.Other important impact on investor decision-making transactions and events
Controlling shareholder of the company, Hangzhou Steam Turbine Group, is planning mixed ownership reform. We are the biggest shareholding subsidiary corporation in manufacturing industry of subordinate company of the Hangzhou Steam Turbine Group . In this mixed ownership reform, it will be involved into reform range as the core business and property taking-in company of the Hangzhou Steam Turbine Group industry plate. If the ownership structure of Hangzhou Steam Turbine Group changes significantly, it will have a profound influence on the government structure and operational mechanism for thecompany’s future. But that matter is now being pushed on, and there is still pretty much uncertainty in mixed ownership reforms.
XV. Notes s of main items in financial reports of parent company
. Accounts receivable
(1) Accounts receivable disclosed by category
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Bad debt provision|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|||||||||||
||||||Book value||||Proportio|Book value|
||Amount|Proportion|Amount|Proportion||Amount|Proportion|Amount|||
||||||||||n||
|Accounts receivable|||||||||||
|portfolio subject to|||||||||||
|||||||2,455,949,951.86|98.80%|444,969,697.87|18.12%|2,010,980,253.99|
||2,236,823,799.21|98.68%|599,432,126.23|26.80%|1,637,391,672.98||||||
|impairment by credit|||||||||||
|risk|||||||||||
|Account receivable|||||||||||
|of individual not|||||||||||
|significance subject|||||||||||
|||||||29,819,607.69|1.20%|29,819,607.69|100.00%||
||29,819,607.69|1.32%|29,819,607.69|100.00%|||||||
|to individually|||||||||||
|assessment for|||||||||||
|impairment|||||||||||
|Total|2,266,643,406.90|100.00%|629,251,733.92|100.00%|1,637,391,672.98|2,485,769,559.55|100.00%|474,789,305.56|19.10%|2,010,980,253.99|

 Receivable accounts with large amount individually and bad debt provisions were provided
Not applicable
Account receivable in the group which are provided bad debt provision on age basis
In RMB
|||||
|-|-|-|-|
||End of term|||
|Age||||
||Book balance|Bad debt provision|Providing rate%|
|Subitem within 1 year||||
|Within 1 year|488,212,821.42|24,410,641.07|5.00%|
|Subtotal within 1 year|478,212,821.42|23,910,641.07|5.00%|
|1-2 years|526,046,749.31|52,604,674.93|10.00%|
|2-3 years|517,304,017.26|155,191,205.18|30.00%|
|3-4 years|243,626,138.33|146,175,683.00|60.00%|
|4-5 years|118,292,313.95|94,633,851.16|80.00%|
|Over 5 years|156,235,678.58|156,235,678.58|100.00%|
|Total|2,049,717,718.85|629,251,733.92|30.70%|

 Receivable accounts combined within consolidating range for providing of bad debt provisions
|||||
|-|-|-|-|
|Name of the Group|End of term|||
||Book balance|Bad debt provision|Providingrate %|
|Combinations of relatedtransactions in consolidationrange|216,925,688.0|5||
|Sub-total|216,925,688.0|5||

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.
（2）Accrual period, recovery or reversal of bad debts situation
The current amount of provision for bad debts is RMB159,201,949.70 ; recovery or payback for bad debts Amount is RMB0.00.
(3) Receivable accounts actually written off in the report period
In RMB
|||
|-|-|
|Items|Amount|
|Difficult to recover|4,739,521.34|

 Of which the significant actual write-off accounts receivable:
In RMB
|||||||
|-|-|-|-|-|-|
||Nature of|||||
||||Reason for||Arising from related|
|Name|account|Amount written off||Verification procedures||
||||write-off||transactions (Y/N)|
||receivables|||||
||||Difficult to|The examined and adopted to||
|Zhejiang Jiahua Energy Chemical Co., Ltd.|Goods|1,920,000.00|||No|
||||recover|Board of directors||
||||Difficult to|The examined and adopted to||
|Oriental Electrical Group .Beijing|Goods|1,599,316.10|||No|
|Company|||recover|Board of directors||

|||||||
|-|-|-|-|-|-|
||||Difficult to|The examined and adopted to||
|China Petrochemical Group Sichuan Vigny|Goods|290,000.00|||No|
|Lun factory|||recover|Board of directors||
||||Difficult to|The examined and adopted to||
|Other|Goods|930,205.24|||No|
||||recover|Board of directors||
|Total|--|4,739,521.34|--|--|--|

 Explanation for write-off of account receivables:
（4）The ending balance of other receivables owed by the imputation of the top five parties
|||||
|-|-|-|-|
|Name of the companies|Book balance|Portion in balance of receivableaccounts (%)|Bad debt provision|
|Client 1|710,533,035.92|31.35|199,807,870.90|
|Client 2|338,964,890.80|14.95|128,687,041.80|
|Xiuping Company|142,218,190.42|6.27||
|Complete company|68,455,845.24|3.02||
|Client 5|77,454,736.96|3.42|56,802,786.87|
|Subtotal l|1,337,626,699.34|59.01|385,297,699.57|

3. Accounts receivable
(1) Accounts receivable disclosed by category
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|||||||||||
|||Proportio||Proportio|Book value||Proportio|||Book value|
||Amount||Amount|||Amount||Amount|Proportion||
|||n||n|||n||||
|Accounts receivable|||||||||||
|portfolio subject to|||||||||||
||18,100,881.19|100.00%|5,855,509.22|32.35%|12,245,371.97|35,956,830.09|90.65%|2,419,017.74|6.73%|33,537,812.35|
|impairment by credit|||||||||||
|risk|||||||||||
|Account receivable of|||||||||||
|individual not|||||||||||
|significance subject to|||||||||||
|||||||3,710,320.94|9.35%|3,710,320.94|100.00%||
|individually|||||||||||
|assessment for|||||||||||
|impairment|||||||||||
|Total|18,100,881.19|100.00%|5,855,509.22|32.35%|12,245,371.97|39,667,151.03|100.00%|6,129,338.68|15.45%|33,537,812.35|

 Other receivables with individually significant amount and provision for bad and doubtful debts individually provided at the end of the reporting period. Not applicable
Other receivable accounts in the group on which bad debt provisions are provided on age basis
In RMB
|||||
|-|-|-|-|
||End of term|||
|Age||||
||Other receivable account|Bad debt provision|Proportion%|
|Subitem within 1 year||||
|Within 1 year|5,874,981.66|293,749.08|5.00%|
|Subtotal within 1 year|5,874,981.66|293,749.08|5.00%|
|1-2 years|3,432,681.62|343,268.16|10.00%|
|2-3 years|1,031,692.00|309,507.60|30.00%|
|3-4 years|700,000.00|420,000.00|60.00%|
|4-5 years|554,999.80|443,999.84|80.00%|
|Over 5 years|4,044,984.54|4,044,984.54|100.00%|
|Total|15,639,339.62|5,855,509.22|37.44%|

Other receivable accounts combined within consolidating range for providing of bad debt provisions
|||||
|-|-|-|-|
|Name|End of term|||
||Book balance|Bad debtprovision|Providing rate %|
|Combinations of relatedtransactions in consolidationrange|2,461,541.57|||
|Subtotal|2,461,541.57|||

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.
（2）Accrual period, recovery or reversal of bad debts situation
The current amount of provision for bad debts is RMB11,420.54 ; recovery or payback for bad debts Amount is RMB0.00.
(3) Receivable accounts actually written off in the report period
In RMB
|||
|-|-|
|Items|Amount|
|Difficult to recover|285,250.00|

Of which the significant actual write-off accounts receivable:
In RMB
|||||||
|-|-|-|-|-|-|
||Nature of||||Arising from|
|||Amount written|Reason for|Verification||
|Name|account||||related|
|||off|write-off|procedures||
||receivables||||transactions (Y/N)|
|Luoyang Jinlong||||||
|||||The examined and||
|Electric Power|||Difficult to|||
||Deposit|200,000.00||adopted to Board|No|
|Extension|||recover|||
|||||of directors||
|Command||||||
|Total|--|200,000.00|--|--|--|

（4）Other account receivable classified by account nature
In RMB
||||
|-|-|-|
|Nature|Closing book value|Opening book value|
|Deposit|15,557,676.02|17,537,246.23|
|Pretty cash|66,000.00|237,970.00|
|Provisional payment receivable|2,461,541.57|21,438,383.99|
|Other|15,663.60|453,550.81|
|Total|18,100,881.19|39,667,151.03|

(5) Top 5 of the closing balance of the accounts receivable collected according to the arrears party
In RMB
|||||||
|-|-|-|-|-|-|
|||||Percentage in||
||Account||||Bad debt|
|Name of the company||Book balance|Age|total other||
||property||||provision|
|||||receivable %||
|Shanghai Customs Waigaoqiao|||Over 5|||
||Deposit|3,710,320.94||20.50%|3,710,320.94|
|Office|||years|||
||Advance|||||
||||With in 1|||
|Casting Company||2,124,732.77||11.74%||
||in cash||year|||
|Guoxin Bidding Group Co., Ltd.|Deposit|1,659,500.00|0-5 years|9.17%|120,100.00|
|Guodian Trust Bidding Co., Ltd.|Deposit|1,455,150.00|0-4 years|8.04%|365,115.00|
|Jiangsu International Bidding Co.,|||Within 1|||
||Deposit|800,000.00||4.42%|40,000.00|
|Ltd.|||year|||
|Inner Mongolia Bidding Co., Ltd.|Deposit|550,000.00|1-2 years|3.04%|55,000.00|
|Total|--|9,749,703.71|--|53.86%|4,235,535.94|

3. Long-term share equity investment
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of term|||Beginning of term|||
|||Impair|||Impair||
|Items||ment|||ment||
||Book balance||Book value|Book balance||Book value|
|||provisi|||provisi||
|||on|||on||
|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
||||||||
|-|-|-|-|-|-|-|
||||Curr||Provided||
|||||||Impairmen|
|||Increas|ent||current||
|||||||t provision|
|Company invested in|Beginning of term|ed this|term|End of term|term||
|||||||End of|
|||period|decr||Impairmen||
|||||||term|
||||ease||t provision||
|Zhejiang Xiuping Import and export|||||||
||20,000,000.00|||20,000,000.00|||
|trade Co., Ltd.|||||||
|Hangzhou Heavy Industry|360,000,000.00|||360,000,000.00|||
|Hangzhou Auxiliary Machine Co.|46,286,513.41|||46,286,513.41|||
|Zhejiang Turbine Packaged Co.|29,800,389.56|||29,800,389.56|||
|Zhongneng Co.|27,644,475.06|||27,644,475.06|||
|Machinery Co.|7,968,000.00|||7,968,000.00|||
|Casting Co.|11,220,000.00|||11,220,000.00|||
|Total|502,919,378.03|||502,919,378.03|||

4.Business income and Business cost
In RMB
||||||
|-|-|-|-|-|
||Amount of current period||Amount of previous period||
|Items|||||
||Income|Cost|Income|Cost|
|Main|||||
||1,530,893,344.10|1,156,539,776.01|2,562,005,959.74|1,781,188,582.14|
|business|||||
|Other|||||
||24,603,027.43|22,488,463.30|22,204,008.60|18,750,139.19|
|business|||||
|Total|1,555,496,371.53|1,179,028,239.31|2,584,209,968.34|1,799,938,721.33|

5. Investment income
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|

||||
|-|-|-|
|Long-term equity investment gains on cost basis|118,708,415.00|170,983,585.00|
|Investment income received from holding of|||
||27,742,368.00|23,118,640.00|
|available-for –sale financial assets|||
|Gains from financing products|3,153,852.99|2,801,258.48|
|Total|149,604,635.99|196,903,483.48|

XIV. Supplementary Information
(I) Non-recurring gain/loss
||
|-|
|Amount|
|-441,916.66|
|15,752,977.27|
|19,624,429.30|

||
|-|
|12,164,381.63|
|47,099,871.54|
|8,553,255.35|
|5,191,956.32|
|33,354,659.87|

(II) Net income on asset ratio and earning per share
1. Details
|||
|-|-|
|Weighted average netincome on asset %||
||Basic earnings pershare|
|-3.77|-0.22|
|-4.53|-0.26|

2. Calculation process of weighted average net income on asset
||
|-|
|No.|
|A|

|||
|-|-|
||B|
||C=A-B|
||D|
||E|
||F|
||G|
||H|
|Change of other misc. gains|I1|
|Accumulative number of months fromthe next month when the change of netasset to the end of report term|J1|
|Change of special reserves|I2|
|Accumulative number of months fromthe next month when the change of netasset to the end of report term|J2|
||K|
||L= D+A/2+E×F/K-G×H/K±I×J/K|
||M=A/L|
||N=C/L|

3. Calculation formula of basic earnings per share and diluted earnings per share
(1) Calculation process of basic earning per share
||
|-|
|No.|
|A|
|B|
|C=A-B|

||
|-|
|D|
|E|
|F|
|G|
|H|
|I|
|J|
|K|
|L=D+E+F×G/K-H×I/K-J|
|M=A/L|
|N=C/L|

(2) Calculation process of diluted earnings per share is the same as that of the earnings per share.
Hangzhou Steam Turbine Co., Ltd.
March 17, 2016