Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 Stock Code: 200771 Stock ID: Hangqilun B Announcement No. 2016-62
二零一六年半年度报告
SEMIANNUAL REPORT 2016
Hangzhou Steam Turbine Co., Ltd.
August 13,2016
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 I. Important Remarks, Table of Contents, and Definitions
The Board of Directors, the Supervisory Committee, the directors, the supervisors, and executives of the
Company guarantee that there are no significant omissions, fictitious or misleading statements carried in the Report and we will accept individual and joint responsibilities for the truthfulness, accuracy and completeness of the Report.
All of the directors attended the board meeting on which this report was examined.
The Company will not distribute cash dividend or bonus shares, neither capitalizing of common reserves for the report period.
Chairman Mr. Zheng Bin, Chief Financial Officer Pu Yangshuo, and the Chief of Accounting Department Mr. Zhao Jiamao hereby declare: the Financial Statement in the report is guaranteed to be truthful and complete. This Annual Report contains prospective descriptions, whichdoesn’t constitute substantial commitment to investors. Investors are requested to be aware of the risks attached to their investment decisions.
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 Table of Contents
I..Important Notice, Table of contents and Definitions
II. Basic Information of the Company
III. Summary of Accounting Highlights and Business Highlights
IV. Report of the Board of Directors
V. Important Events
VI. Change of share capital and shareholding of Principal Shareholders
VII. Situation of the Preferred Shares
VIII. Information about Directors, Supervisors and Senior Executives
IX. Financial Report
X. Documents available for inspection
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 Definition
||||
|-|-|-|
||Defined||
|Terms to be defined||Definition|
||as||
|Company, the Company|Defined as|Hangzhou Steam Turbine Co., Ltd.|
|The Group, Hangqi Group|Defined as|Hangzhou Steam Turbine Power Group Co., Ltd.|
|The report period, In the report period|Defined as|January 1, 2016-June 30, 2016|
|||Hangzhou Zhongneng Steam Turbine Power Co., Ltd. – the holding|
|Zhongneng Co.|Defined as||
|||subsidiary of the Company|
|||Hangzhou Steam Turbine Casting Co., Ltd. – the holding subsidiary|
|Casting Co.|Defined as||
|||of the Company|
|||Zhejiang Steam Turbine Packaged Technology Development Co., Ltd.|
|Packaged Tech. Co.|Defined as||
|||– the holding subsidiary of the Company|
|||Hangzhou Steam Turbine Machinery Equipment Co., Ltd. - the|
|Machinery Co.|Defined as||
|||holding subsidiary of the Company|
|||Hangzhou Steam Turbine Auxiliary Machinery Co., Ltd. - the holding|
|Auxiliary Machine Co.|Defined as||
|||subsidiary of the Company|
|||Zhejiang Turbine Import & Export Co., Ltd. – the holding subsidiary|
|Turbine Co.|Defined as||
|||of the Company|
|||Hangzhou Steam Turbine Heavy Industry Co., Ltd. - the holding|
|Heavy Industry Co.|Defined as||
|||subsidiary of the Company|
|The Board of Directors|Defined as|The Board of Directors of Hangzhou Steam Turbine Co., Ltd.|
|The Supervisory Committee|Defined as|The Board of Directors of Hangzhou Steam Turbine Co., Ltd.|
|The Shareholders’ Meeting|Defined as|The Board of Directors of Hangzhou Steam Turbine Co., Ltd.|
|RMB, RMB0’000, RMB000’000’000|Defined as|RMB Yuan, RMB10 thousand Yuan, RMB100 million Yuan|
|MW|Defined as||
|||Unit of power: 1000KW|
|PLM|Defined as||
|||Product life circle management information system|
|BFPT|Defined||
|||Boiler Feeding Pump Turbine|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
||as||
||Defined||
|PTA|||
|||Pure Terephthalic Acid|
||as||
||Defined||
|MES|||
|||Manufacturing Execution System|
||as||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 II. Basic Information of the Company
1. Company Information
|||||
|-|-|-|-|
|Stock ID|Hangqilun B|Stock Code|200771|
|Stock Exchange Listed in|Shenzhen Stock Exchange|||
|Company Name in Chinese|杭州汽轮机股份有限公司|||
|Short form of Company Name in||||
||杭汽轮|||
|Chinese||||
|Name in English(if any)|HANGZHOU STEAM TURBINE CO.,LTD.|||
|Abbreviation in English(if any)|HTC|||
|Legal representative:|Zheng Bin|||

II. Contacts
||||
|-|-|-|
||Secretary of the Board|Representative of Stock Affairs|
|Name|Yu Changquan|Wang Caihua|
|Address|No. 357 Shiqiao Rd. Hangzhou|No. 357 Shiqiao Rd. Hangzhou|
|Tel.|0571-85780432|0571-85784758|
|Fax.|0571-85780433|0571-85780433|
|Email.|ychq@htc.cn|wangch@htc.cn|

III. Other info.
1. Contacts
No change to the registered address, office address, postal code, official website, and email address of the Company. For details please find the Annual Report 2015.
2. Information inquiry
None of the official presses, website, and place of enquiry has been changed in the semi report period. For details please find the Annual Report 2015.
3. Change of business registration
Whether the registration has changed during the report period
Applicable
|||||||
|-|-|-|-|-|-|
||Registration date|Registration place|Business license No.|Tax registration No.|Organization Code|
|Registration at the||||||
|||No. 357 Shiqiao Rd.||||
|beginning of the|April 23,1998||330000400001023|330165704202620|704202620|
|||Hangzhou||||
|period||||||
|Registration at the|May 5, 2016|No. 357 Shiqiao Rd.|913300007042026204|913300007042026204|913300007042026204|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||
|-|-|
|end of the period|Hangzhou|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 III. Summary of Accounting Data and Financial Index
I. Main accounting data and index
Are there any retrospective adjustment or restatement of financial information of previous year due to change of accounting policies or correcting of accounting errors?
No
|||||
|-|-|-|-|
||This report term|Same period last year|Increase/decrease (%)|
|Turnover (RMB)|1,367,423,771.88|1,054,996,326.24|29.61%|
|Net profit attributable to shareholders of the|-31,252,238.19|-10,282,333.32||
||||-203.94%|
|listed company (yuan)||||
|Net profit attributable to the shareholders of||||
|the listed company and after deducting of|-43,478,314.33|-22,164,040.35|-96.17%|
|non-recurring gain/loss(RMB)||||
|Net Cash flow generated by business|214,699,052.95|101,821,573.29||
||||110.86%|
|operation (RMB)||||
|Basic earnings per share (Yuan/share)|-0.04|-0.01|-300.00%|
|Diluted earnings per share (Yuan/share)|-0.04|-0.01|-300.00%|
|Net income on asset, weighted|-0.74%|-0.23%|-0.51%|
||As at the end of the|||
|||As at the end of last year|YoY+/-（%）|
||reporting period|||
|Gross assets (RMB)|8,117,183,672.84|7,683,777,005.63|5.64%|
|Shareholders’ equity attributable to|4,188,280,702.81|4,219,337,312.80||
||||-0.74%|
|shareholders of the listed company（RMB）||||

II.The differences between domestic and international accounting standards
1. Differences between the net profit and net asset in the financial reports prepared under IAS and Chinese Accounting Standard
Not applicable
2. Differences between the net profit and net asset in the financial reports prepared under IAS and Chinese Accounting Standard
Not applicable
III. Non-recurring gain/loss items and amounts
Applicable
In RMB
||||
|-|-|-|
|Items|Amount|Remarks|
|Gain/loss from disposal of non-current assets (includes the recovered part of asset|-163,899.82||
|impairment provision already provided)|||
|Gains and losses included in the current period of government subsidies, excluding those|318,530.00||
|government grants which are closely related to normal business and in line with national|||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
|policy , or in accordance with fixed standards or quantities|||
|Gain/loss from change of fair value of transactional asset and liabilities, and investment|11,457,674.92||
|gains from disposal of transactional financial assets and liabilities and sellable financial|||
|assets, other than valid period value instruments related to the Company’s common|||
|businesses|||
|Other non-business income and expenditures other than the above|6,338,781.73||
|Less: Influenced amount of income tax|3,485,076.88||
|Influence on minority shareholders’ equity (after tax)|2,239,933.81||
|Total|12,226,076.14|--|

None of non-recurring gain/loss items recognized as recurring gain/loss items as defined by the Information Disclosure Explanatory Announcement No.1– Non-recurring gain/loss in the report period.
IV. Board ofDirectors’ Report
I. Business overview
During the report period, as the economic development in China entered a new normal and economic growth gradually slowed down, the economy still faced relatively huge downward pressure. Driven by the technical progress and supply-side structural reform (with its emphasis put on removing capacity, inventory and leverage), the global energy structure witnessed profound changes. Under this background, industries closely related to thecompany’s main business, such as oil refining, chemical engineering, metallurgy, thermal power and building material, were undergoing profound adjustments, and fixed asset investment in relevant fields continued to slow down. The overcapacity, low demand and increasingly fierce market competition in the domestic turbine industry still prevailed, and the whole industry generally faced huge operating pressure.
Faced with the aforementioned economic situation, the company set out the annual economic workguideline—”Deepening Reform, Driving Innovation, Expanding market and Intensifying Risk Control”. On the one hand, it intensified the management by making more efforts to reform the internal management, strengthened the cost control for all parts included in the business process, accelerated the application of information technology and kept the company standing at a leading position in the industrial turbine market by many measures, such as product management, management innovation, market exploitation, resource integration and risk control; on the other hand, through external cooperation, the company entered the natural gas application market, expanded its cooperation with other fields both in width and depth, and further extended its industry chain.
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 In the report period, theCompany’s operating income of RMB 1,367,423,771.88, which Increased by29.61% year on year. Operating profit, total profit, net profit and the net profit for its shareholders were respectively RMB -33,998,228.28,RMB-29,111,160.91，RMB -26,277,229.57 and RMB -31,252,238.19，
, which respectively decreased by 331.34%,254.65% ,448.78% and203.94%year on year. Corporate profits dropped significantly mainly due to the increase in impairment losses , long aging accounts receivable increased bad debt led to a substantial increase .
II. Analysis of main business
Year-on-year changes in major financial statistics
In RMB
||||||
|-|-|-|-|-|
||||Change||
|||Same period last|over same||
||This report term|||Cause of change|
|||year|period last||
||||year||
||1,367,423,771.88|1,054,996,326.24||Mainly due to the current foreign trade unit sales|
|Turnover|||29.61%||
|||||grew|
||850,937,906.04|662,509,347.18||Mainly due to increased revenue shares|
|Operation cost|||28.44%||
|||||headquarters corresponding increase|
||75,867,593.98|67,934,574.09||Mainly due to maintain the company's main|
|Sales expense|||11.68%||
|||||market , stable sales efforts|
||355,106,918.55|315,169,862.90||Mainly due to Research and Development|
|Administrative expense|||12.67%||
|||||expenses increased|
||512,029.17|4,932,440.34||Mainly due to the exchange gain increases caused|
|Financial expenses|||-89.62%||
|||||by the dollar appreciation|
||-2,833,931.34|11,290,456.20||Mainly due to income tax expenses accordingly|
|||||reduced caused by current profit decline and|
|Income tax expenses|||-125.10%||
|||||impairment of the deferred income tax expenses|
|||||increased|
|||||Mainly due to the increase research investment for|
|Input to R&D|138,018,919.01|107,033,616.25|28.95%|the company maintaining the competitiveness of|
|||||their products.|
||214,699,052.95|101,821,573.29||Mainly due to the cash receipts in this period by|
|Cash flow generated by|||||
||||110.86%|selling goods collection rate increased|
|business operation, net|||||
|Net cash flow generated by|-160,303,138.04|-35,593,758.80||Mainly due to current spending on net wealth|
||||-350.37%||
|investment||||management products increases|
|Net cash flow generated by|-41,830,084.28|-124,431,470.02||Mainly due to the company dividend over the|
||||66.38%||
|financing||||same period last year, this year has not issued|
|Net increasing of cash and cash|16,763,311.05|-57,390,220.73|||
||||129.21%||
|equivalents|||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||||
|-|-|-|-|-|
|||||Mainly due to the aging of accounts receivable|
|Asset impairment loss|125,619,636.17|22,650,560.50|454.60%|increases, the corresponding provision for bad|
|||||loans increase|

Major changes in profit composition or sources during the report period.
No change in profit composition or sources in the report period.
Delay of future development and plan disclosed in theCompany’s IPO prospectus, fund raising prospectusand capital reorganization report into this report period.
No future development and plan disclosed in theCompany’s IPO prospectus, fund raising prospectusand capital reorganization report into this report period.
Implementation of business plans disclosed in previous periods in this period.
2016 is the first year of thecompany’s ” the
13th
Five-Year Strategic Plan”, and also a key year for the company for adapt to the new normal, boost transformation and upgrading and strive to turn losses into gains. During the report period, with its focus on promoting the execution of the
13th
Five-Year Strategic Plan, the company made more efforts to expand the market, continued to carry out management innovation, constantly put more investment inR&D, actively planned the market transformation and industry transformation, strictly controlled the operation risk, attached importance to brand culture construction and actively fostered its competitive edge in high-end equipment and service.
(1) With a development-first idea, boost the execution of the
13th
Five-Year Strategic Plan. During the report period, the board of directors in the company reviewed and passed the
13th
Five-Year Strategic Plan, and defined thecompany’s transformation direction, business layout and capability construction in the upcoming 5 years. To ensure the strategic orientation of thecompany’s business activities, the company further strengthened the strategy implementation and management, combined the medium and long-term planning target closely with short-term business plan and focused on the operability and measurability for executing key strategic measures.
(2) Adjust the organization to ensure the guarantee by the management organization. During the report period, the company adjusted and reorganized the management organization, set up an operation management department and capital& material management department, reinforced the management of external investment, cooperation and capital operation, intensified internal strategy management, risk control and budget management, and constructed a high-efficient functional management mode that adapts to the extension of industry chain in the company.
(3) Plan the market transformation and make a new breakthrough in gas turbine field. During the report period, subject to the influence of the national industry regulatory policies, the feed pump contract decreased sharply and the drive market continued to be sluggish. Comparatively speaking, the thermoelectricity market was still robust and the nuclear power market has lived up to expectation. The company further deepened its cooperation with Simens in gas turbine market. To be specific, in May, 2016, the company and Simens united and won the bidding for theGCL’s distributed energy project. On July 5, on the China Gas Distributed Generation Forum, the company signed a memorandum of understanding for strategic cooperation with GCL and joined hands to enter the distributed energy market and strengthened the development and application of natural gas-fuelled distributed energy. At the same time, the company won a long-term contract in natural gas turbine field for the first time. (4) Insist on technological innovation and improve its core competitiveness. During the report period, the company continued to make more scientific breakthroughs by improving the technical performance of products from various aspects, including structure, core part, basic design, manufacturing process, material, technology, etc.
On the other hand, targeted at thecustomers’ demand, the company made a study of turbine packaging technology
demonstration application project and promoted the development of intelligent, integrated product technologies.
In May, 2016, Zhejiang Equipment Manufacturing Industry& Gas Turbine Machinery Technology Alliance,
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 which was built by the company in conjunction with Zhejiang University and otherR&D institutes, was formally set up, which served as the new platform for university-industry-research cooperation of turbine technology. Under the development tendency of ”Made in China 2025”, the company accelerated the application of information technology, advanced the construction of intelligent and digitized workshops, and set up many scientific research subjects, such as discrete intelligent manufacturing mode research and digitized workshop construction, PLM system research and execution phase II project and MES phase I project. The key technology development and application project for 1000MW boiler feed pump turbine, a project developed the company, passed the sci-tech achievement evaluation hosted by China Machinery Industry Federation. The industrial steam turbine for the ancillary feed water pump of 1 Million KW pressurized water reactor, a key project in Hangzhou city, successfully passed the acceptance inspection. During the report period, the company acquired 2 authorized invention patents and 3 utility model patents.
(5)Manage and control operational risk and improve its management constantly. Faced with the severe market environment, the company set up its business principle of ”Risk Control First, Profit Second and Scale Third”. The company held risk management committee meetings on a regular basis, paid close attention to three risk factors, such as accounts receivable, inventory and articles being processed, managed and controlled the major operational risk through multiple channels and aspects, improved the asset turnover ratio and controlled the non-performing asset. Besides, the company constantly advanced quality projects and lean manufacturing, strengthened budget management and process control and deepened excellent performance management mode. Moreover, it constantly improved the supply chain management, gradually increased the bid-invitation-based purchasing and strove to revitalize overstocked products.
(6) Innovate the platform and strengthen the corporate brand culture propaganda. The company further enhanced its corporate culture construction and brand construction and improved its corporate image. Besides, it further gave play to the edges of many channels, such as network, wechat, situation briefing and broadcast, and put its emphasis on the thematic propaganda, such as a series of propaganda for model worker in the company; it also organized and carried out the appraisal of ”Excellent Turbine Worker”, further carried forward its enterprise spirit in the company, propagandized the outstanding workers, and guided workers to work hard to realize their own values and shape a correct cognition of public opinion and values.
III. Main business composition
In RMB
||||||||
|-|-|-|-|-|-|-|
||||||Change in||
||||Gross profit|Change in||Change in gross|
||Turnover|Operation cost|||operation cost||
||||ratio %|turnover YoY||profit YoY|
||||||YoY||
|On Industries|||||||
|Boiler and power|||||||
||1,156,542,146.25|740,395,471.03|35.98%|46.26%|45.34%|0.41%|
|machine manufacture|||||||
|Casting|26,873,817.30|19,508,748.47|27.41%|-28.42%|-37.77%|10.91%|
|Petrochemical and other|||||||
||17,869,999.23|13,916,569.28|22.12%|-68.33%|-66.24%|-4.83%|
|special machineries|||||||
|Complete|23,473,643.80|18,107,692.25|22.86%|100.00%|100.00%||
|Spare parts|132,412,284.33|55,591,848.74|58.02%|-12.83%|-20.12%|3.83%|
|Other|10,251,880.97|3,417,576.28|66.66%|-31.77%|-66.26%|12.48%|
|Subtotal|1,367,423,771.88|850,937,906.04|37.77%|29.61%|28.44%|0.57%|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||||||
|-|-|-|-|-|-|-|
|On Products|||||||
|Industrial steam turbine|1,156,542,146.25|740,395,471.03|35.98%|46.26%|45.34%|0.41%|
|Casting products|26,873,817.30|19,508,748.47|27.41%|-28.42%|-37.77%|10.91%|
|Auxiliary machinery|17,869,999.23|13,916,569.28|22.12%|-68.33%|-66.24%|-4.83%|
|Complete|23,473,643.80|18,107,692.25|22.86%|100.00%|100.00%||
|Spare parts|132,412,284.33|55,591,848.74|58.02%|-12.83%|-20.12%|3.83%|
|Other|10,251,880.97|3,417,576.28|66.66%|-31.77%|-66.26%|12.48%|
|Subtotal|1,367,423,771.88|850,937,906.04|37.77%|29.61%|28.44%|0.57%|
|District|||||||
|Domestic|1,139,012,321.23|690,161,502.25|39.41%|19.20%|19.63%|-0.22%|
|Overseas|228,411,450.65|160,776,403.79|29.61%|137.62%|89.57%|17.84%|
|Subtotal|1,367,423,771.88|850,937,906.04|37.77%|29.61%|28.44%|0.57%|

 IV. Analyze of competitive edge
As the largest developing and manufacturing base of industrial steam turbine throughout the country, the Company has been in the territory with years of experiences, which provided obvious advantages from technical research to production, from marketing to customer services.
First. A complete technical innovation system was established. The Company has under its possession of national, provincial, and municipal grade technical centers, a doctorial workstation, and an academician workstation. Close co-operations were carried out with institutions and universities from throughout the country. As the main drafter of national standard on industrial steam turbine, the Company has the newest technical trend under its close observation. The Company is now providing nearly 600 different models of steam turbines to the customers and hold the newest technical system covering the product lines up to 150 MW.
Secondly, the company production model of modular design, concurrent engineering, enabled the company to balance the production cost, delivery date and customer demands.
Thirdly, the Company has established strategic co-operations with main customers in the country. Further marketing approaches were carried on by involving itself in thecustomers’ value. A sound and steady image has been set up in the domestic steam turbine market. In the global market, the Company has acquired multiple important certifications and has established a primary global recognition.
Fourthly, the Company has its complete service providing system. The Company is not only capable to provide onsite 24-hour service for theCompany’s own products, but also accumulated rich experiences in technical maintenance and reengineering of othermanufacturers’ products.
Fifthly, the Company has cultivated a significant advantage in human resources. Great importance has been attached to construction of work teams with collection of high-end workforce in the areas of research& development, designing, technique, testing, and quality control. An excellent workforce provides a sound foundation to lift quality and services.
V. Analyzing of investment position
1. External equity investment
(1) External investment
The Company made no external investment in the report period.
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 (2) Shareholding in financial enterprises
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||Sharehold|||||||
|||||||||Gain/loss|||
|||||ing|Shares held at|Shareholding|||||
||Type of|Original investment|Opening amount||||Close balance of|in report||Source of|
|Name of companies||||percentag|the end of term|percentage at|||Accounting subject||
||company|cost (RMB)|of shares||||book value (RMB)|period||shares|
|||||e at|(shares)|closing|||||
|||||||||(RMB)|||
|||||beginning|||||||
||Commercial|390,954,040.00|138,711,840|6.92%|138,711,840|5.89%|390,954,040.00|0.00|||
|Bank of Hangzhou|||||||||Sellable financial asset|Own capital|
||Bank||||||||||
|Total||390,954,040.00|138,711,840|--|138,711,840|--|390,954,040.00|0.00|--|--|

（3）Securities investment
No securities investment in the report period.
（4） Statement of holding equities in other PLCs
The Company was not holding shares of any other PLC as of the end of report period.
2. Trusted financing, derivate instruments, and trusted loans
(1) Trusted financing
InRMB’0000
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Related||||||Principal||||
||||Type of||||Mean of||Impairment provision|Predicted|Actual gain/loss of|
|Title of entrusted|Relationship|transaction||Amount entrusted|Started on|Expired on||retrieved this||||
||||product||||reward||provided (if any)|income|the period|
|||or not||||||period||||
|Hangzhou Industrial & commercial Trust||||||||||||
||Non-related|No|Trust|5,300|||-|3,000||123.54|123.54|
|Co., Ltd.||||||||||||
|Hangzhou Bank|Non-related|No|Financing|15,000|||-|7,000||200.47|41.58|
|China Everbright Bank|Non-related|No|Financing|9,000|||-|6,000||76.36|32.86|
|CITIC Bank Co., Ltd.|Non-related|No|Financing|18,000|||-|10,000||119.59|55.15|
|Changan International Trust Co., Ltd.|Non-related|No|Trust|17,000|||-|12,000||825.7|638.47|
|Zhongrong International Trust Co., Ltd.|Non-related|No|Trust|15,000|||-|5,000||765.55|140.55|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Zhongrong International Trust Co., Ltd.|Non-related|No|Financing|17,600|||-|17,100|19.92|19.92|
|Hangzhou Union Bank|Non-related|No|Financing|4,000|||-|2,000|234.78|2.78|
|ICBC|Non-related|No|Financing|10,815|||-|10,815|56.57|56.57|
|Shenzhen Sidao Technology Investment|||||||||||
||Non-related|No|Trust|770|||-|300|7.8|7.8|
|Co., Ltd.|||||||||||
|Shanghai Bank|Non-related|No|Financing|2,000|||-|2,000|6.48|6.48|
|Bank of China|Non-related|No|Financing|6,000|||-|4,000|8.9|8.9|
|Beijing Hengtian Wealth Investment|||||||||||
||Non-related|No|Financing|13,000|||-|2,000|509.92|11.17|
|Management Co., Ltd.|||||||||||
|Caitong Securities Co., Ltd.|Non-related|No|Financing|3,000|||-||108.85||
|Total||||136,485|--|--|--|81,215|3,064.43|1,145.77|
|Source of fund||||Self fund|||||||
|Principal and return due but not covered||||0|||||||
|Lawsuit （If any）||||Not applicable|||||||
|Disclosure date of approval announcement (If any)||||Not applicable|||||||
|Disclosure date of shareholders’ Meeting approval announcement (If any)||||Not applicable|||||||

(2) Derivate instrument investment
No derivate instrument investment in the report period.
(3) Trusted loans
No trusted loans in the report period.
3. Using of proceeds from share placing.
No using of capital from public financing in the report period.
4. Analyze of main subsidiaries and affiliates
Profiles of main subsidiaries and affiliates
In RMB
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Type of|||||||||
|Name of companies||Industry|Major products or service|Registered capital|Gross Assets|Net asset|Turnover|Operation profit|Net profit|
||business|||||||||
|Zhejiang Steam Turbine||Trade of|Technological development|||||||
|Packaged Technology|Subsidiarie|packadged|of automatic control and|51,000,000.00|288,396,304.92|83,688,542.71|83,612,988.73|4,600,270.43|3,773,929.86|
||s|||||||||
|Development Co., Ltd.||equipment|instrument control|||||||
||||Designing and|||||||
|Hangzhou Zhongneng Steam|Subsidiarie|Manufactur|manufacturing of steam|92,500,000.00|920,205,596.88|321,789,963.99|341,837,358.58|-11,211,943.14|-5,746,192.61|
|Turbine Power Co., Ltd.|s|ing||||||||
||||turbines|||||||
|Hangzhou Steam Turbine|Subsidiarie|Casting|Iron and steel casting|22,000,000.00|439,132,668.34|171,713,876.07|154,101,020.08|3,413,049.84|3,014,779.43|
|Casting Co., Ltd.|s|||||||||
|Hangzhou Steam Turbine||||||||||
|Machinery & Equipment Co.,|Subsidiarie|Manufactur|Producing and processing of|30,000,000.00|210,380,678.77|123,210,489.03|87,048,057.73|25,335,397.84|20,374,232.88|
||s|ing|steam turbine parts|||||||
|Ltd.||||||||||
|Hangzhou Steam Turbine|Subsidiarie|Manufactur|Manufacturing of steam|80,000,000.00|508,485,936.00|210,447,796.30|170,532,221.25|14,154,979.95|12,008,146.90|
|Auxiliary Machine Co., Ltd.|s|ing|turbine auxiliary machines|||||||
|Zhejiang Turbine Import &|Subsidiarie|Commerce|International trade|20,000,000.00|243,159,491.62|65,231,602.15|69,164,118.54|-1,521,133.74|-1,782,986.07|
|Export Co., Ltd.|s|& trade||||||||
||||Designing and|||||||
|Hangzhou Steam Turbine Heavy|Subsidiarie|Manufactur|manufacturing of steam|360,000,000.00|378,307,416.93|376,449,204.19|0.00|6,020,665.55|4,515,497.91|
|Industry Co., Ltd.|s|ing||||||||
||||turbines|||||||

5. Major projects using non-raised capital
N/A
VI. Prospectus of business performance of January– September 2016
Prediction: Loss
Category of prediction data: periodic data
||||||||||
|-|-|-|-|-|-|-|-|-|
||From the beginning of year to the end of next|||Same period last year|Changed by||||
||report period||||||||
|Predicted number of accumulative net profit|-5,800|--|-3,800|-6,706|Increase|13.51%|--|43.33%|
|(RMB0,000)|||||||||
|Basic earnings per share (Yuan/share)|-0.09|--|-0.06|-0.1|Increase|10.00%|--|40.00%|
||Although long-term accounts receivable increased, but the company completed sales units increased over the same period last||||||||
|Remarks on the prediction|||||||||
||year, thereby reducing the amount of loss.||||||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 VII. Statement of the Board and Supervisory Committee on the “Non-standardauditors’ report” issued by the CPA on the current report period
Not applicable
VIII. Statement of the Board on the “Non-standardauditors’ report” of previous report period
Not applicable
IX. Profit distribution carried out in the report period
The Company will distribute no cash dividends or bonus shares and has no reserve capitalization plan.
X. Profit distribution for the report period.
None of cash dividend, bonus shares, or capitalizing of common reserves will be carried out for the first half of year.
XI. Reception of investigations, communications, or interviews
The Company has no reception of research, communication and interview occurred in the Period.
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 V. Important Events
I. Administrative Position
For the report period, theCompany’s actual administration practices were complying with the requirements of the Company Law and CSRC without any differences. II. Material lawsuit
In the report period, the Company had no material lawsuits or arbitrations.
Other lawsuit
|||||||||
|-|-|-|-|-|-|-|-|
|Basic situation of litigation|Involved amount|Whether to form|Progress of the|The outcome and effects of|Execution of litigation|Date of|Index of|
|(arbitration)|(RMB’0000)|expected liability|litigation(arbitration(arbitration)|litigation(arbitration)|(arbitration)judgement|disclosure|disclosure|
|||||The court made a verdict that the||||
|||||defendant should pay the accuser||||
||||Tangshan Intermediate People’s|||||
|lodged a complaint against||||the payment for the goods|The company had applied for|||
||||Court had made the final verdict,|||||
|Yanshan Tangshan Iron& Steel|626|No||6,260,000 yuan and pay the interest|compulsory execution, but the|||
||||with the case number being|||||
|Co., Ltd. defaulting on loans||||as well in accordance with the|defendant hadn’t paid yet.|||
||||No.341 of TMSZ(2015).|||||
|||||interest rate of the loan at the same||||
|||||period of People’s Bank of China.||||
||||Both sides reached a conciliation||The defendant paid the accuser|||
|The Company lodged a|||and People’s Court of Hangzhou||200,000 yuan, with 2,671,500|||
|||||The defendant paid the accuser||||
|complaint against Luan Tianji|||Xiacheng District issued the||yuan yet to be paid. The company|||
||287.15|No||2,871,500 yuan by installment||||
|Shanxi Chemical Co. ,|||mediation document, with the||had applied for compulsory|||
|||||before the end of July, 2015.||||
|Ltd .defaulting on loans|||case number being No. 2192 of||execution and the defendant|||
||||HXSCZ(2014).||hadn’t paid yet.|||
|The Company lodged a|||The People’s Court of Suzhou|The court made a verdict that the||||
||||||The defendant had paid the|||
|complaint against Qilianshan|||District, Jiuquan, Gansu province|defendant should pay the accuser||||
||6.2|No|||accuser 31,000 yuan, but the rest|||
|Gansu Pharmaceutical Co. ,|||had made the final verdict, with|31,000 yuan first, with the rest||||
||||||31,000 yuan wasn’t paid yet.|||
|Ltd .defaulting on loans|||the case number being No.2192|31,000 yuan to be paid later.||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||||
|-|-|-|-|-|-|
||||of JGMYCZ(2014).|||
|The Company lodged a||||||
|||||The defendant should pay the||
|complaint against Shenyang|||||The defendant hadn’t paid yet|
||69.8|No|Both sides reached a conciliation.|accuser by installments before the||
|Pump Co. , Ltd .defaulting on|||||(not due).|
|||||end of September, 2016.||
|loans||||||
|The company appealed to the||||||
||||Benxi Arbitration Committee|||
|arbitration, requesting Bengang||||Benggang Steel plates should pay|The company had applied for|
||||made its verdict, with the written|||
|Steel Plates Co., Ltd. To perform|12.18|No||the company before March 20,|compulsory execution, Benggang|
||||award number being No.11|||
|the contract and make the||||2016.|Steel plates hadn’t paid yet.|
||||document of BZCZ.|||
|payment.||||||
|Tangshan Yanshan Steel Co., Ltd.||||||
|(accuser) sued the company|||The final verdict hadn’t been|The final verdict hadn’t been made|The final verdict hadn’t been|
||246.67|No||||
|(defendant) for delaying the|||made yet.|yet.|made yet.|
|delivery of goods.||||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 III. Questioning by the media
No media queries raised in the report period.
IV. Bankruptcy and reconstruction
No bankruptcy or capital reorganizing issues occurred in the report period.
V. Asset transactions
1. Asset acquisition
No asset acquisition occurred in the report period.
2. Disposal of assets
No disposal of assets in the report period.
3. Merger of entities
No merger of entities occurred in the report period.
VI. Implementing of share incentive scheme and influence to the Company
No share incentive scheme was implemented in the report period
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 VII. Material related transactions
1. Related transactions related to daily operation
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Whether|||||
|||||||||Trading limit|over the||||Index of|
|||||Principle of|||||||Market price|||
||||Subjects of the||||||||||informati|
|||Type of||pricing the|Price of|Amount of trade|Ratio in similar|approved|approved|Way of|of similar|Date of||
|Related parties|Relationship||related||||||||||on|
|||trade||related|trade|RMB0’000|trades|||payment|trade|disclosure||
||||transactions||||||||||disclosur|
|||||transactions||||（RMB’0000）|limited or||available|||
||||||||||||||e|
||||||||||not (Y/N)|||||
|Hangzhou Steam||Accept|Freight, repairing,|||||||||||
|||||||||||||March||
|Turbine|Affiliate of the Group|||Fair and just|Market|2,202.5||7,500|No|Bank transfer|2300.00||2016-25|
|Automobile Sales||labor|etc.||price|||||||19,2016||
|Service Co., Ltd.||||||||||||||
|Hangzhou Hangfa||||||||||||||
|||||||||||||March||
|Power Generating|Affiliate of the Group|Purchase|Generators|Fair and just|Market|6,662||14,000|No|Bank transfer|6700.00||2016-25|
|Equipment Co.,||of goods|||price|||||||19,2016||
|Ltd.||||||||||||||
|Total||||--|--|8,864.5|--|21,500|--|--|--|--|--|
|Details of any sales return of a large amount||||N/A||||||||||
|Give the actual situation in the report period where a forecast had been||||||||||||||
|||||No more than expected||||||||||
|made for the total amounts of routine related-party transactions by type to||||||||||||||
|occur in the current period(if any)||||||||||||||
|Reason for any significant difference between the transaction price and the||||||||||||||
|||||N/A||||||||||
|market reference price (if applicable)||||||||||||||

2. Related transactions in terms of acquisition or disposal of assets:
No related transaction regarding asset purchase or disposal up to the end of report period.
3. Related transactions in term of collective external investment
No related transaction of joint external investment in the report period.
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 4. Debts and credits with related parties
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||||Balance at||||||
||||Whether has|||||||
|||||period-begi|Current newly|||||
||||non-business|||Current recovery||Current interest|Balance at period-end|
|Related|Relationship|Causes||n|added||Interest rate|||
||||capital occupying|||（RMB’0000）||（RMB’0000）|（RMB’0000）|
|||||（RMB’00|（RMB’0000）|||||
||||or not|||||||
|||||00）||||||
|Hangzhou Steam Turbine|Controlled|Disbursement|Yes|0|3,000|3,000|4.79%|37.08|0|
|Casting Co., Ltd.|subsidiaries|||||||||
|Influence on business performance and||||||||||
|financial status of the Company from||N/A||||||||
|related liabilities||||||||||

5. Other material related transactions
No other material related transactions.
VIII. Non-operational capital appropriation by holding shareholder and related parties
No non-operational capital appropriation by holding shareholder or related parties occurred in the report period.
IX. Material contracts and execution
1. Entrustment, contracting, and leasing issues
(1) Entrustment
No entrustment in the report period.
(2) Contracting
No contracting in the report period.
(3) Leasing
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 No leasing in the report period.
2. Guarantees
InRMB’0000
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|External Guarantee (Exclude controlled subsidiaries)||||||||||||
||||Actual date of|||||||||
||Amount of guarantee|Amount of||||||||Completed|Related|
|Guarantee provided to|||occurring (signing date|||Actual amount of guarantee|Type of guarantee||Term|||
||and date of disclosure|the guarantee||||||||or not|guarantee|
||||of agreements|||||||||
|Hangzhou Guoneng Steam Turbine||||||||||||
||April 7,2016|10,000|April 1,2016|||10,000|Joint liability guaranty||1 year|No|No|
|Engineering Co., Ltd.||||||||||||
|Total guarantee quota to the subsidiaries approved in the||||||Total amount of guarantee to the subsidiaries actually||||||
|||10,000|||||||8,660|||
|reporting period (C1)||||||incurred in the reporting period (C2)||||||
|Total guarantee quota to the subsidiaries approved at the end||||||）Total balance of actual guarantee to the subsidiaries at||||||
|||10,000|||||||8,660|||
|of the reporting period (C3)||||||the end of the reporting period (C4)||||||
|The Company’s total guarantee(i.e.total of the first three main items)||||||||||||
|Total guarantee quota approved in the reporting period|||||Total amount of guarantee actually incurred in the|||||||
|||10,000||||||8,660||||
|（A1+B1+C1）|||||reporting period（A2+B2+C2）|||||||
|Total guarantee quota already approved at the end of the|||||Total balance of the actual guarantee at the end of the|||||||
|||10,000||||||8,660||||
|reporting period（A3+B3+C3）|||||reporting period（A4+B4+C4）|||||||
|The proportion of the total amount of actually guarantee in the net assets of the Company (that is||||||||||||
||||||2.07%|||||||
|A4+B4+C4）%||||||||||||
|Including：||||||||||||
|Amount of guarantee for shareholders, actual controller and its related parties(D)||||0||||||||
|The debts guarantee amount provided for the guaranteed partieswhoseassets-liability ratio||||||||||||
|||||0||||||||
|exceed 70% directly or indirectly (E)||||||||||||
|Proportion of total amount of guarantee in net assets of the Company exceed 50%(F)||||0||||||||
|Total amount of the aforesaid three guarantees （D+E+F）||||0||||||||
|Explanations on possibly bearing joint and several liquidating responsibilities for undue||||||||||||
|||||N/A||||||||
|guarantees ( If any)||||||||||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||
|-|-|
|Explanations on external guarantee against regulated procedures(If any)|N/A|

（1）Illegal providing of external guarantees
No illegal providing of external guarantees in the report period.
3. Other material contracts
No other material contract in the report period.
4. Other material trades
No other material trade in the report period.
X. Commitment issues by shareholders with5% or over of shares in the report period or carried over to the report period from previous periods No commitment issues by shareholders with5% or over of shares in the report period or carried over to the report period from previous periods
XI. Engaging and dismissing of CPAs
The semi-annual financial report has not been audited.
XII. Punishment and improvement
No punishment or improving approach in the report period.
XIII. Disclosure of illegal action causing risk of delisting.
No such illegal action causes risk of delisting.
XIV. Statement on other material issues
1. According to the announcement listed on the website of China Securities Regulatory Commission, the IPO of Bank of Hangzhou Joint Stock Co,., Ltd., with some of shares held the company, was passed the review by the Main Board Issuance Examination Commission of China Securities Regulatory Committee on the 215th meeting in 2015(Announcement No:2016-01).
2. The Company shares Resumption：The Company since the controlling shareholders Hangzhou Steam Turbine Power Group Co., Ltd. According to the unified plan of the state-owned assets supervision and administration of Hangzhou , Planning to the reform of steam Turbine group mixed ownership, apply to the Shenzhen stock exchange to suspendcompany’s shares since May 29, 2015, On March 4, 2016, the company apply the company stock resumption based on the shareholders meeting. During the suspension period, the Company will fulfill the obligation of disclosing information according to the progress of the issue and relevant provisions.The Company disclosed progress on major issues of stock ResumptionAnnouncement（AnnouncementNo：2016-11）.
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 3. On March 30, 2016, the company received the controlling shareholder Hangzhou TurbineGroup’s written notice on Planning the Progress of Major Events, which clarified that the TurbineGroup’s mixed ownership reform was suspended(Announcement No:2016-42).
4. The general election for the board of directors and board of supervisors: the company held the annual general meeting of stockholders 2015 on May 18, 2016 to select the members for the
7th
board of directors and
7th
board of supervisors, as can be seen in the Notice on the Resolutions ofShareholders’ Meeting 2015(Announcement No:2016-54).
XV. Issuance of corporate bonds
Whether the company has corporate bonds that have been publicly issued and listed on the stock exchange, and not yet due or due but not folly cashed on the approval date of annual report
No.
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 VI. Change of share capital and shareholding of Principal Shareholders
1.Changes in share capital
In shares
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the change||Increase/decrease（+，-）|||||After the Change||
||Amount|Proportion|||Capitalization|||||
||||Share|Bonus|||Subtot|||
||||||of common|Other||Quantity|Proportion|
||||allotment|shares|||al|||
||||||reserve fund|||||
|I. Shares with trade||||||||||
||479,936,841|63.65%|0|0|0|0|0|479,936,841|63.65%|
|restriction conditions||||||||||
|1. State-owned shares|479,824,800|63.64%|0|0|0|0|0|479,824,800|63.64%|
|2. Other domestic shares|112,041|0.01%|0|0|0|0|0|112,041|0.01%|
|Domestic natural person||||||||||
||112,041|0.01%|0|0|0|0|0|112,041|0.01%|
|shares||||||||||
|II. Shares without trading||||||||||
||274,073,559|36.35%|0|0|0|0|0|274,073,559|36.35%|
|limited conditions||||||||||
|Foreign shares listed at||||||||||
||274,073,559|36.35%|0|0|0|0|0|274,073,559|36.35%|
|home||||||||||
|III. Total of capital shares|754,010,400|100.00%|0|0|0|0|0|754,010,400|100.00%|

 Causes of Change of shares
Not applicable
Approval of change of the shares
Not applicable
Transfer in change of shares
Not applicable
Influence of the change of the shares upon such financial indicators as the basic EPS and diluted EPS, net asset value per share attributable to the common stockholders in the past year and the latest period
Not applicable
Other information the Company considers it necessary or required by the securities regulatory authority to be disclosed
Not applicable
II. Number of shareholders and shareholding positions
In shares
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Total common shareholders at||||Total number of preferred shareholders that had restored the voting right|||||||
||16,158|||||||||0|
|he end of the report period||||at the end of the reporting period (if any)|||||||
|Shareholding of shareholders holding more than 5% shares|||||||||||
||||Proportion of||Number of|Changes in|Amount of|Amount of|||
|Shareholders||Nature of|||||||||
||||shares held||shares held at|reporting|restricted|un-restricted|Number of||
||||||||||share||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||||||pledged/froze||
||||||||||n||
||shareholder|（%）||period -end|period|shares held||shares held|State||
|||||||||||Amou|
||||||||||of||
|||||||||||nt|
||||||||||share||
|Hangzhou Steam Turbine Power GroupCo., Ltd.|State-ownedlegal person|63.64%||479,824,800|0|479,824,800||0|||
|GUOTAIJUNANSECURITIES(HONGKONG)LIMITED|Foreign legalperson|0.65%||4,909,489|-9374988|0||4,909,489|||
|NORGES BANK|Foreign legalperson|0.57%||4,303,675|0|0||4,303,675|||
|VANGUARD TOTALINTERNATIONAL STOCK INDEXFUND|Foreign legalperson|0.44%||3,308,246|1021910|0||3,308,246|||
|Shanwan Hongyuan Securities (HK)Co.,Ltd.|Foreign legalperson|0.39%||2,924,322|2390687|0||2,924,322|||
|China Merchants Secutities(HK)Co.,Ltd.|State-ownedlegal person|0.33%||2,468,865|848115|0||2,468,865|||
|AUSTRALIANSUPER PTY LTD|Foreign legalperson|0.28%||2,108,321|0|0||2,108,321|||
|Xia Zulin|DomesticNatural person|0.28%||2,100,000|0|0||2,100,000|||
|CHINA INT'L CAPITAL CORPHONG KONG SECURITIES LTD|Foreign legalperson|0.27%||2,046,860|-1019908|0||2,046,860|||
|CREDIT SUISSE (HONG KONG)LIMITED|Foreign legalperson|0.27%||2,033,703|998562|0||2,033,703|||
|Particulars about strategic investors or general|||||||||||
|corporations becoming among the top 10 shareholders||Not applicable|||||||||
|due to share placing (if any)|||||||||||
|||(1) Hangzhou Steam Turbine Power Group Co., Ltd. is the holder of state-shares of the|||||||||
|||Company, all other shareholders’ are holders of domestic listed foreign shares (B|||||||||
|||shares)|||||||||
|||(2) There is no relationship between Hangzhou Steam Turbine Power Group Co., Ltd.|||||||||
|Explanation on associated relationship among the|||||||||||
|||and other shareholders;|||||||||
|||(3) Hangzhou Steam Turbine Group Co., Ltd. is not an “action-in-concert” party with|||||||||
|aforesaid shareholders|||||||||||
|||any of other shareholders as described by the “Administration Rules of Informational|||||||||
|||Disclosure about Change of Shareholding Statues of PLCs”.|||||||||
|Top 10 holders of shares without trading limited conditions|||||||||||
||||Amount of unconditional shares held at end of||||Category of shares||||
|Name of the shareholder|||||||||||
||||period||||Category of shares||Amount||
|GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED|||4,909,489||||Foreign shares||||
||||||||placed in domestic||4,909,489||
||||||||exchange||||
|NORGES BANK|||4,303,675||||Foreign shares||4,909,489||
||||||||placed in domestic||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||
|-|-|-|-|
|||exchange||
|VANGUARD TOTAL INTERNATIONAL STOCK INDEXFUND|3,308,246|Foreign shares||
|||placed in domestic|3,308,246|
|||exchange||
|Shanwan Hongyuan Securities (HK) Co.,Ltd.|2,924,322|Foreign shares||
|||placed in domestic|2,924,322|
|||exchange||
|China Merchants Secutities(HK)Co., Ltd.|2,468,865|Foreign shares||
|||placed in domestic|2,468,865|
|||exchange||
|AUSTRALIANSUPER PTY LTD|2,108,321|Foreign shares||
|||placed in domestic|2,108,321|
|||exchange||
|Xia Zulin|2,100,000|Foreign shares||
|||placed in domestic|2,100,000|
|||exchange||
|CHINA INT'L CAPITAL CORP HONG KONGSECURITIES LTD|2,046,860|Foreign shares||
|||placed in domestic|2,046,860|
|||exchange||
|CREDIT SUISSE (HONG KONG) LIMITED|2,033,703|Foreign shares||
|||placed in domestic|2,033,703|
|||exchange||
|First Shanghai Secrutities Co., Ltd.|1,878,322|Foreign shares||
|||placed in domestic|1,878,322|
|||exchange||
||1）It is unknown to the Company if there is any relationship among the top 10|||
|Explanation on associated relationship or consistent action||||
||common share holders without restriction;|||
|among the top 10 shareholders of non-restricted negotiable||||
||(2) Hangzhou Steam Turbine Group Co., Ltd. is not an action-in-concert” party|||
|shares and that between the top 10 shareholders of||||
||with any of other shareholders as described by the “Administration Rules of|||
|non-restricted negotiable shares and top 10 shareholders||||
||Informational Disclosure about Change of Shareholding Statues of PLCs”.|||
|Notes to the shareholders involved in financing securities (if||||
||Not applicable|||
|any)||||

The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy–back agreement dealing in reporting period.
III. Change of the controlling shareholder in the Reporting Period.
There was no any change of the controlling shareholder of the Company in the report period.
Change of the actual controller in the report period.
There was no any change of the actual controller of the Company in the Reporting Period.
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 IV. Proposals raised by the shareholders or their action-in-concert parties about increasing of shareholding To the knowledge of the Company, there is not any proposal raised by the shareholders or their action-in-concert parties about increasing of shareholding.
VII. Situation of the Preferred Shares
No issue regarding preference shares in the report period.
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 VIII. Information about Directors, Supervisors and Senior Executives
I. Change of shareholding of directors, supervisors and senior executives
Share held by directors, supervisors and senior executive of the Company had no changes, more details can be seen in annual report 2015.
II. Changes of directors, supervisors and senior executive
||||||
|-|-|-|-|-|
|Name|Title|Type|Date|Reasons|
||Independent||||
|Xu Yongbin||Office leaving|May 18,2016|Office leaving, The board of director changed .|
||Director||||
||Independent||||
|Zhang Hejie||Office leaving|May 18,2016|Office leaving, The board of director changed .|
||Director||||
||Independent||||
|Tan Jianrong||Office leaving|May 18,2016|Office leaving, The board of director changed .|
||Director||||
||Independent|||The board of director changed .New has been|
|Ma Lihong||Be elected|May 18,2016||
||Director|||elected.|
||Independent|||The board of director changed .New has been|
|Chen Danhong||Be elected|May 18,2016||
||Director|||elected.|
||Independent|||The board of director changed .New has been|
|Gu Xinjian||Be elected|May 18,2016||
||Director|||elected.|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 IX. Financial Report
I.Auditors’ Report
The Semi-annual Financial Report is not audited.
II. The Financial Statements
All figures in the Notes to the Financial Statements are in RMB.
1. Consolidated Balance Sheet
Prepared by: Hangzhou Steam Turbine Co., Ltd
June 30,2016
In RMB
||||
|-|-|-|
|Items|At the end of term|Beginning of term|
|Current asset：|||
|Monetary fund|794,767,589.76|751,596,796.24|
|Settlement provision|||
|Outgoing call loan|||
|Financial assets measured at fair value with variations|||
|accounted into current income account|||
|Derivative financial assets|||
|Bill receivable|545,123,313.54|680,518,943.49|
|Account receivable|1,926,721,216.38|2,096,090,157.61|
|Prepayments|241,112,284.16|139,267,324.65|
|Insurance receivable|||
|Reinsurance receivable|||
|Provisions of Reinsurance contracts receivable|||
|Interest receivable|||
|Dividend receivable|||
|Other account receivable|27,087,825.30|25,574,057.29|
|Repurchasing of financial assets|||
|Inventories|2,235,683,051.12|1,826,869,838.60|
|Assets held for sales|||
|Non-current asset due in 1 year|||
|Other current asset|567,415,616.85|427,203,835.44|
|Total of current assets|6,337,910,897.11|5,947,120,953.32|
|Non-current assets：|||
|Loans and payment on other’s behalf disbursed|||
|Disposable financial asset|509,409,741.77|509,409,741.77|
|Expired investment in possess|||
|Long-term receivable|||
|Long term share equity investment|||
|Property investment|||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
|Fixed assets|620,876,192.67|642,155,636.34|
|Construction in progress|173,392,716.87|119,187,107.52|
|Engineering material|||
|Fixed asset disposal|||
|Production physical assets|||
|Gas & petrol|||
|Intangible assets|300,895,138.55|304,949,207.18|
|R & D petrol|||
|Goodwill|||
|Long-germ expenses to be amortized|1,824,637.17|2,029,471.80|
|Deferred income tax asset|172,874,348.70|158,924,887.70|
|Other non-current asset|||
|Total of non-current assets|1,779,272,775.73|1,736,656,052.31|
|Total of assets|8,117,183,672.84|7,683,777,005.63|
|Current liabilities|||
|Short-term loans|81,250,000.00|85,350,000.00|
|Loan from Central Bank|||
|Deposit received and hold for others|||
|Call loan received|||
|Financial liabilities measured at fair value with variations|||
|accounted into current income account|||
|Derivative financial liabilities|||
|Bill payable|198,065,752.08|194,226,049.73|
|Account payable|1,059,189,681.62|810,420,381.45|
|Advance payment|2,015,952,250.97|1,736,820,949.19|
|Selling of repurchased financial assets|||
|Fees and commissions receivable|||
|Employees’ wage payable|52,279,831.19|70,257,474.46|
|Tax payable|21,050,931.67|36,008,109.09|
|Interest payable|||
|Dividend payable|||
|Other account payable|24,853,931.26|29,705,125.51|
|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|200,000.00|300,000.00|
|Other current liability|||
|Total of current liability|3,452,842,378.79|2,963,088,089.43|
|Non-current liabilities：|||
|Long-term loan|123,400,000.00|123,400,000.00|
|Bond payable|||
|Including：preferred stock|||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
|Sustainable debt|||
|Long-term payable|330,000.00|330,000.00|
|Long-term payable employees’s remuneration|||
|Special payable|||
|Expected liabilities|||
|Deferred income|10,114,606.23|6,804,425.00|
|Deferred income tax liability|1,017,473.05|1,017,473.05|
|Other non-current liabilities|||
|Total non-current liabilities|134,862,079.28|131,551,898.05|
|Total of liability|3,587,704,458.07|3,094,639,987.48|
|Owners’ equity|||
|Share capital|754,010,400.00|754,010,400.00|
|Other equity instrument|||
|Including：preferred stock|||
|Sustainable debt|||
|Capital reserves|139,590,345.09|139,590,345.09|
|Less：Shares in stock|||
|Other comprehensive income|-477,425.64|-852,752.00|
|Special reserves|31,585,222.35|31,764,920.51|
|Surplus reserves|621,112,807.78|621,112,807.78|
|Common risk provision|||
|Undistributed profit|2,642,459,353.23|2,673,711,591.42|
|Total of owner’s equity belong to the parent company|4,188,280,702.81|4,219,337,312.80|
|Minority shareholders’ equity|341,198,511.96|369,799,705.35|
|Total of owners’ equity|4,529,479,214.77|4,589,137,018.15|
|Total of liabilities and owners’ equity|8,117,183,672.84|7,683,777,005.63|

Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 2.Parent Company Balance Sheet
In RMB
||||
|-|-|-|
|Items|At the end of term|Beginning of term|
|Current asset：|||
|Monetary fund|409,876,902.54|387,916,202.79|
|Financial assets measured at fair value with variations accounted|||
|into current income account|||
|Derivative financial assets|||
|Bill receivable|239,273,049.00|365,504,827.88|
|Account receivable|1,471,822,789.50|1,637,391,672.98|
|Prepayments|141,635,500.72|53,440,645.95|
|Interest receivable|||
|Dividend receivable|||
|Other account receivable|7,483,761.06|12,245,371.97|
|Inventories|1,810,124,761.92|1,454,420,457.64|
|Assets held for sales|||
|Non-current asset due in 1 year|||
|Other current asset|438,733,569.03|170,653,680.58|
|Total of current assets|4,518,950,333.77|4,081,572,859.79|
|Non-current assets：|||
|Disposable financial asset|465,604,378.26|465,604,378.26|
|Expired investment in possess|||
|Long-term receivable|||
|Long term share equity investment|502,919,378.03|502,919,378.03|
|Property investment|||
|Fixed assets|311,612,630.28|334,677,256.20|
|Construction in progress|86,034,126.55|79,982,551.34|
|Engineering material|||
|Fixed asset disposal|||
|Production physical assets|||
|Gas & petrol|||
|Intangible assets|175,849,280.03|177,872,266.49|
|R & D petrol|||
|Goodwill|||
|Long-germ expenses to be amortized|761,660.66|761,660.66|
|Deferred income tax asset|130,206,012.12|120,771,991.85|
|Other non-current asset|||
|Total of non-current assets|1,672,987,465.93|1,682,589,482.83|
|Total of assets|6,191,937,799.70|5,764,162,342.62|
|Current liabilities|||
|Short-term loans|||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
|Financial liabilities measured at fair value with variations|||
|accounted into current income account|||
|Derivative financial liabilities|||
|Bill payable||13,500,000.00|
|Account payable|673,453,072.14|436,004,535.90|
|Advance payment|1,636,815,174.84|1,428,724,224.76|
|Employees’ wage payable|24,010,757.66|51,373,858.57|
|Tax payable|4,696,110.56|3,538,126.39|
|Interest payable|||
|Dividend payable|||
|Other account payable|16,405,085.64|20,338,742.44|
|Classified as held for sale debt|||
|Non-current liability due in 1 year|||
|Other current liability|||
|Total of current liability|2,355,380,200.84|1,953,479,488.06|
|Non-current liabilities：|||
|Long-term loan|100,000,000.00|100,000,000.00|
|Bond payable|||
|Including：preferred stock|||
|Sustainable debt|||
|Long-term payable|||
|Long-term payable to employees|||
|Special payable|||
|Expected liabilities|||
|Deferred income|3,332,431.23|22,250.00|
|Deferred income tax liability|1,017,473.05|1,017,473.05|
|Other non-current liabilities|||
|Total of Non-current liabilities|104,349,904.28|101,039,723.05|
|Total of liability|2,459,730,105.12|2,054,519,211.11|
|Owners’ equity|||
|Share capital|754,010,400.00|754,010,400.00|
|Other equity instrument|||
|Including：preferred stock|||
|Sustainable debt|||
|Capital reserves|138,953,250.09|138,953,250.09|
|Less：Shares in stock|||
|Other comprehensive income|||
|Special reserves|13,098,989.67|13,098,989.67|
|Surplus reserves|602,356,402.65|602,356,402.65|
|Undistributed profit|2,223,788,652.17|2,201,224,089.10|
|Total of owners’ equity|3,732,207,694.58|3,709,643,131.51|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
|Total of liabilities and owners’ equity|6,191,937,799.70|5,764,162,342.62|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 3.Consolidated Income statement
In RMB
||||
|-|-|-|
|Items|Report period|Same period of the previous year|
|I. Income from the key business|1,367,423,771.88|1,054,996,326.24|
|Incl：Business income|||
||1,367,423,771.88|1,054,996,326.24|
|Interest income|||
|Insurance fee earned|||
|Fee and commission received|||
|II. Total business cost|1,416,467,334.78|1,079,531,378.43|
|Incl：Business cost|||
||850,937,906.04|662,509,347.18|
|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|8,423,250.87|6,334,593.42|
|Sales expense|75,867,593.98|67,934,574.09|
|Administrative expense|355,106,918.55|315,169,862.90|
|Financial expenses|512,029.17|4,932,440.34|
|Asset impairment loss|125,619,636.17|22,650,560.50|
|Add：Gains from change of fir value （“-”for loss）|||
|Investment gain（“-”for loss）|||
||15,045,334.62|39,231,462.05|
|Incl: investment gains from affiliates|||
|Gains from currency exchange（“-”for loss）|||
|III. Operational profit（“-”for loss）|||
||-33,998,228.28|14,696,409.86|
|Add ：Non-operational income|6,844,762.02|6,285,206.55|
|Including：Income from disposal of non-current assets|17,299.04|29,583.00|
|Less：Non business expenses|||
||1,957,694.65|2,157,162.89|
|Incl：Loss from disposal of non-current assets|||
||181,198.86|303,677.88|
|IV.Total profit(“-”for loss)|-29,111,160.91|18,824,453.52|
|Less：Income tax expenses|||
||-2,833,931.34|11,290,456.20|
|V. Net profit|-26,277,229.57|7,533,997.32|
|Net profit attributable to the owners of parent company|-31,252,238.19|-10,282,333.32|
|Minority shareholders’ equity|4,975,008.62|17,816,330.64|
|VI. Other comprehensive income|881,469.91|-373,143.88|
|Net of profit of other comprehensive income attributable to owners of the|||
||375,326.36|-158,883.17|
|parent company.|||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
|（I）Other comprehensive income items that will not be reclassified into|||
|gains/losses in the subsequent accounting period|||
|1.Re-measurement of defined benefit plans of changes in net debt or net a|||
|ssets|||
|2.Other comprehensive income under the equity method investee can not|||
|be reclassified into profit or loss.|||
|（II）|||
||375,326.36|-158,883.17|
|Other comprehensive income that will be reclassified into profit or loss.|||
|1.Other comprehensive income under the equity method investee can be r|||
|eclassified into profit or loss.|||
|2.Gains and losses from changes in fair value available for sale financial a|||
|ssets|||
|3.Held-to-maturity investments reclassified to gains and losses of availabl|||
|e for sale financial assets|||
|4.The effective portion of cash flow hedges and losses|||
|5.Translation differences in currency financial statements|375,326.36|-158,883.17|
|6.Other|||
|Net of profit of other comprehensive income attributable to Minority|||
||506,143.55|-214,260.71|
|shareholders’ equity|||
|VII. Total comprehensive income|-25,395,759.66|7,160,853.44|
|Total comprehensive income attributable to the owner of the parent|||
||-30,876,911.83|-10,441,216.49|
|company|||
|Total comprehensive income attributable minority shareholders|5,481,152.17|17,602,069.93|
|VIII. Earnings per share|||
|（I）Basic earnings per share|||
||-0.04|-0.01|
|(II)Diluted earnings per share|-0.04|-0.01|

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 rson in charge ofaccounting：Pu Yangshuo ccounting Dept Leader: Zhao Jiamao
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 4. Income statement of the Parent Company
In RMB
||||
|-|-|-|
|||Same period of the previous|
|Items|Report period||
|||year|
|I. Income from the key business|873,700,389.36|620,574,048.28|
|Incl：Business cost|546,117,341.96|425,237,391.19|
|Business tax and surcharge|4,800,667.41|1,398,211.91|
|Sales expense|47,863,806.18|45,577,385.16|
|Administrative expense|229,290,837.78|203,813,839.11|
|Financial expenses|-1,442,851.52|4,831,005.55|
|Asset impairment loss|112,015,979.74|25,190,173.12|
|Add：Gains from change of fir value （“-”for loss）|||
|Investment gain（“-”for loss）|78,813,819.71|146,889,193.96|
|Incl: investment gains from affiliates|||
|II. Operational profit（“-”for loss）|13,868,427.52|61,415,236.20|
|Add ：Non-operational income|17,813.04|2,885,613.95|
|Including：Income from disposal of non-current assets|17,299.04||
|Less：Non business expenses|755,697.76|704,659.95|
|Incl：Loss from disposal of non-current assets|10,000.00||
|III.Total profit(“-”for loss)|13,130,542.80|63,596,190.20|
|Less：Income tax expenses|-9,434,020.27|-3,648,682.83|
|IV. Net profit（“-”for net loss）|22,564,563.07|67,244,873.03|
|V.Net of profit of other comprehensive income|||
|（I）Other comprehensive income items that will not be|||
|reclassified into gains/losses in the subsequent accounting|||
|period|||
|1.Re-measurement of defined benefit plans of changes in net de|||
|bt or net assets|||
|2.Other comprehensive income under the equity method investe|||
|e can not be reclassified into profit or loss.|||
|（ II ）|||
|Other comprehensive income that will be reclassified into profit|||
|or loss.|||
|1.Other comprehensive income under the equity method investe|||
|e can be reclassified into profit or loss.|||
|2.Gains and losses from changes in fair value available for sale|||
|financial assets|||
|3.Held-to-maturity investments reclassified to gains and losses|||
|of available for sale financial assets|||
|4.The effective portion of cash flow hedges and losses|||
|5.Translation differences in currency financial statements|||
|6.Other|||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
|VI. Total comprehensive income|22,564,563.07|67,244,873.03|
|VII. Earnings per share：|||
|（I）Basic earnings per share|0.03|0.09|
|(II)Diluted earnings per share|0.03|0.09|

Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 5. Consolidated Cash flow statement
In RMB
||||
|-|-|-|
|||Same period of the previous|
|Items|Report period||
|||year|
|I.Cash flows from operating activities|||
|Cash received from sales of goods or rending of services|1,473,696,926.54|1,221,502,011.12|
|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|3,966,504.78|2,774,168.11|
|Other cash received from business operation|6,687,244.05|11,618,304.30|
|Sub-total of cash inflow|1,484,350,675.37|1,235,894,483.53|
|Cash paid for purchasing of merchandise and services|734,853,982.91|532,710,262.96|
|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|359,098,202.15|354,148,818.72|
|Taxes paid|96,854,083.68|179,449,049.67|
|Other cash paid for business activities|78,845,353.68|67,764,778.89|
|Sub-total of cash outflow from business activities|1,269,651,622.42|1,134,072,910.24|
|Cash flow generated by business operation, net|214,699,052.95|101,821,573.29|
|II.Cash flow generated by investing|||
|Cash received from investment retrieving|||
|Cash received as investment gains|15,045,334.62|39,231,462.05|
|Net cash retrieved from disposal of fixed assets, intangible assets, and|||
||16,900.00|147,758.20|
|other long-term assets|||
|Net cash received from disposal of subsidiaries or other operational|||
|units|||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
|Other investment-related cash received|812,150,000.00|718,855,999.95|
|Sub-total of cash inflow due to investment activities|827,212,234.62|758,235,220.20|
|Cash paid for construction of fixed assets, intangible assets and other|||
||48,665,372.66|33,297,388.80|
|long-term assets|||
|Cash paid as investment||5,975,590.25|
|Net increase of loan against pledge|||
|Net cash received from subsidiaries and other operational units|||
|Other cash paid for investment activities|938,850,000.00|754,555,999.95|
|Sub-total of cash outflow due to investment activities|987,515,372.66|793,828,979.00|
|Net cash flow generated by investment|-160,303,138.04|-35,593,758.80|
|III.Cash flow generated by financing|||
|Cash received as investment|706,350.00|11,340,000.00|
|Incl: Cash received as investment from minor shareholders|||
|Cash received as loans|69,000,000.00|75,400,000.00|
|Cash received from bond placing|||
|Other financing –related ash received|||
|Sub-total of cash inflow from financing activities|69,706,350.00|86,740,000.00|
|Cash to repay debts|73,200,000.00|75,500,000.00|
|Cash paid as dividend, profit, or interests|38,336,434.28|135,671,470.02|
|Incl: Dividend and profit paid by subsidiaries to minor shareholders|||
|Other cash paid for financing activities|||
|Sub-total of cash outflow due to financing activities|111,536,434.28|211,171,470.02|
|Net cash flow generated by financing|-41,830,084.28|-124,431,470.02|
|IV. Influence of exchange rate alternation on cash and cash equivalents|4,197,480.42|813,434.80|
|V.Net increase of cash and cash equivalents|16,763,311.05|-57,390,220.73|
|Add: balance of cash and cash equivalents at the beginning of term|751,596,796.24|613,958,063.91|
|VI ..Balance of cash and cash equivalents at the end of term|768,360,107.29|556,567,843.18|

Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 6. Cash Flow Statement of the Parent Company
In RMB
||||||||
|-|-|-|-|-|-|-|
||Amount in this|Amount in last|||||
|Items|||||||
||period|period|||||
|I.Cash flows from operating activities|||||||
|Cash received from sales of goods or rending of services|956,195,266.24|802,001,490.60|||||
|Tax returned|359,071.25|2,122,030.27|||||
|Other cash received from business operation|4,624,232.32|1,160,090.01|||||
|Sub-total of cash inflow|961,178,569.81|805,283,610.88|||||
|Cash paid for purchasing of merchandise and services|421,216,904.08|421,933,411.17|||||
|Cash paid to staffs or paid for staffs|252,191,310.76|247,730,407.99|||||
|Taxes paid|30,208,059.26|95,021,306.39|||||
|Other cash paid for business activities|21,407,844.59|||16,133,251.46|||
|Sub-total of cash outflow from business activities|725,024,118.69||780,818,377.01||||
|Cash flow generated by business operation, net|236,154,451.12|||24,465,233.87|||
|II.Cash flow generated by investing|||||||
|Cash received from investment retrieving|||||||
|Cash received as investment gains|78,813,819.71|146,889,193.96|||||
|Net cash retrieved from disposal of fixed assets, intangible assets, and other|||||||
||16,900.00|564.00|||||
|long-term assets|||||||
|Net cash received from disposal of subsidiaries or other operational units|||||||
|Other investment-related cash received|383,150,000.00|60,000,000.00|||||
|Sub-total of cash inflow due to investment activities|461,980,719.71|206,889,757.96|||||
|Cash paid for construction of fixed assets, intangible assets and other long-term|||||||
||33,856,128.76|20,231,766.66|||||
|assets|||||||
|Cash paid as investment||5,975,590.25|||||
|Net cash received from subsidiaries and other operational units|||||||
|Other cash paid for investment activities|643,150,000.00|120,000,000.00|||||
|Sub-total of cash outflow due to investment activities|677,006,128.76|146,207,356.91|||||
|Net cash flow generated by investment|-215,025,409.05|60,682,401.05|||||
|III.Cash flow generated by financing|||||||
|Cash received as investment|||||||
|Cash received as loans|||||||
|Cash received from bond placing|||||||
|Other financing –related ash received|||||||
|Sub-total of cash inflow from financing activities|||||||
|Cash to repay debts|||||||
|Cash paid as dividend, profit, or interests|1,702,916.67|||76,551,039.99|||
|Other cash paid for financing activities|||||||
|Sub-total of cash outflow due to financing activities|1,702,916.67|||76,551,039.99|||
|Net cash flow generated by financing|-1,702,916.67||-76,551,039.99||||
|IV. Influence of exchange rate alternation on cash and cash equivalents|2,534,574.35|||||109,733.33|
|V.Net increase of cash and cash equivalents|21,960,699.75||||8,706,328.26||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
|Add: balance of cash and cash equivalents at the beginning of term|387,916,202.79|248,509,410.84|
|VI ..Balance of cash and cash equivalents at the end of term|409,876,902.54|257,215,739.10|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 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||||||||||||
|||||||||||Com||||
|||instrument||||Less:||||||Minor|Total of|
|Items|||||||Other|||mon||||
||Share Capital|prefer|||Capital reserves|Share|Comprehensive|Specialized|Surplus reserves|risk|Attributable profit|shareholders’|owners’|
|||red|Sustai|Oth||s in|Income|reserve||provi||equity|equity|
||||nable|er||stock||||||||
|||stock||||||||sion||||
||||debt|||||||||||
||||||||||||||4,589,137,01|
|I.Balance at the end of last year|754,010,400.00||||139,590,345.09||-852,752.00|31,764,920.51|621,112,807.78||2,673,711,591.42|369,799,705.35||
||||||||||||||8.15|
|Add: Change of accounting||||||||||||||
|policy||||||||||||||
|Correcting of previous errors||||||||||||||
|Merger of entities under||||||||||||||
|common control||||||||||||||
|Other||||||||||||||
|II.Balance at the beginning of|||||||||||||4,589,137,01|
||754,010,400.00||||139,590,345.09||-852,752.00|31,764,920.51|621,112,807.78||2,673,711,591.42|369,799,705.35||
|current year|||||||||||||8.15|
||||||||||||||-59,657,803.|
|III.Changed in the current year|||||||375,326.36|-179,698.16|||-31,252,238.19|-28,601,193.39||
||||||||||||||38|
|（1）Total comprehensive|||||||||||||-25,395,759.|
||||||||375,326.36||||-31,252,238.19|5,481,152.16||
|income|||||||||||||67|
|（II）Investment or decreasing||||||||||||||
|of capital by owners||||||||||||||
|1．Ordinary Shares invested b||||||||||||||
|y Shareholders||||||||||||||
|2．Holders of other equity inst||||||||||||||
|ruments invested capital||||||||||||||
|3．Amount of shares paid and||||||||||||||
|accounted as owners’ equity||||||||||||||
|4．Other||||||||||||||
|（III）Profit allotment||||||||||||||
|||||||||||||-34,421,187.50|-34,421,187.|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||||||50|
|1.Providing of surplus reserves|||||||||
|2.Providing of common risk|||||||||
|provisions|||||||||
|3．Allotment to the owners (or||||||||-34,421,187.|
||||||||-34,421,187.50||
|shareholders)||||||||50|
|4．Other|||||||||
|(IV) Internal transferring of|||||||||
|owners’ equity|||||||||
|1. Capitalizing of capital|||||||||
|reserves (or to capital shares)|||||||||
|2. Capitalizing of surplus|||||||||
|reserves (or to capital shares)|||||||||
|3．Making up losses by surplus|||||||||
|reserves.|||||||||
|4. Other|||||||||
|(V). Special reserves||||-179,698.16|||338,841.95|159,143.79|
|1. Provided this year||||1,168,964.22|||570,903.32|1,739,867.54|
|2．Used this term|||||||||
|||||1,348,662.38|||232,061.37|1,580,723.75|
|（VI）Other|||||||||
|IV. Balance at the end of this||||||||4,529,479,214.77|
||754,010,400.00|139,590,345.09|-477,425.64|31,585,222.35|621,112,807.78|2,642,459,353.23|341,198,511.96||
|term|||||||||

 Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 Amount in last year
In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Amount in last year|||||||||||||
||Owner’s equity Attributable to the Parent Company|||||||||||||
|||Other Equity|||||Other|||||||
|||instrumentpref||||Less:||||Commo||Minorshareholders’|Total ofowners’|
|Items||||||||||||||
||Share Capital|erred|Sustai|Oth|Capital reserves|Shares in|Comprehensive Income|Specializedreserve|Surplusreserves|n riskprovisio|Attributable profit|equity|equity|
||||nable|er||stock||||n||||
|||stoc||||||||||||
|||k|debt|||||||||||
||||||||||||2,911,92||4,815,411,532|
|I.Balance at the end of last year|754,010,400.00||||139,590,345.09||-640,401.72|24,603,149.96|621,112,807.78|||364,813,287.98||
||||||||||||1,943.21||.30|
|Add: Change of accounting policy||||||||||||||
|Correcting of previous errors||||||||||||||
|Merger of entities under common||||||||||||||
|control||||||||||||||
|Other||||||||||||||
|II.Balance at the beginning of|||||||||||2,911,92||4,815,411,532|
||754,010,400.00||||139,590,345.09||-640,401.72|24,603,149.96|621,112,807.78|||364,813,287.98||
|current year|||||||||||1,943.21||.30|
||||||||||||-85,683,||-103,717,599.|
|III.Changed in the current year|||||||-158,883.17|350,952.04||||-18,226,294.80||
||||||||||||373.32||25|
||||||||||||-10,282,|||
|（1）Total comprehensive income|||||||-158,883.17|||||17,602,069.94|7,160,853.45|
||||||||||||333.32|||
|（II）Investment or decreasing of||||||||||||||
|||||||||||||19,340,000.00|19,340,000.00|
|capital by owners||||||||||||||
|1．Ordinary Shares invested by She||||||||||||||
|||||||||||||19,340,000.00|19,340,000.00|
|reholders||||||||||||||
|2．Holders of other equity instrume||||||||||||||
|nts invested capital||||||||||||||
|3．Allotment to the owners (or||||||||||||||
|shareholders)||||||||||||||
|4．Other||||||||||||||
|（III）Profit allotment|||||||||||-75,401,|-55,591,585.00|-130,992,625.|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||||040.00||00|
|1.Providing of surplus reserves|||||||||
|2.Providing of common risk|||||||||
|provisions|||||||||
|3．Allotment to the owners (or||||||-75,401,||-130,992,625.|
||||||||-55,591,585.00||
|shareholders)||||||040.00||00|
|4．Other|||||||||
|(IV) Internal transferring of owners’|||||||||
|equity|||||||||
|1. Capitalizing of capital reserves|||||||||
|(or to capital shares)|||||||||
|2. Capitalizing of surplus reserves|||||||||
|(or to capital shares)|||||||||
|3．Making up losses by surplus|||||||||
|reserves.|||||||||
|4. Other|||||||||
|(V). Special reserves||||350,952.04|||423,220.26|774,172.30|
|1. Provided this year||||1,239,471.57|||572,847.25|1,812,318.82|
|2．Used this term||||888,519.53|||149,626.99|1,038,146.52|
|（VI）Other|||||||||
|||||||2,826,23||4,711,693,933|
|IV. Balance at the end of this term|754,010,400.00|139,590,345.09|-799,284.89|24,954,102.00|621,112,807.78||346,586,993.18||
|||||||8,569.89||.05|

 Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 8.Statement of change inowner’s Equity of the Parent Company
Amount in this period
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Amount in this period|||||||||||
|||Other Equity||||||||||
|||instrument||||||||||
|||||||Less:|Other|||||
|Items|||||||||Common risk||Total of owners’|
||Share Capital|prefer|||Capital reserves|Shares|Comprehensi|Surplus reserves||Attributable profit||
||||Sustai||||||provision||equity|
|||red||Other||in stock|ve Income|||||
||||nable|||||||||
|||stock||||||||||
||||debt|||||||||
|I.Balance at the end of last year|754,010,400.00||||138,953,250.09|||13,098,989.67|602,356,402.65|2,201,224,089.10|3,709,643,131.51|
|Add: Change of accounting policy||||||||||||
|Correcting of previous errors||||||||||||
|Other||||||||||||
|II.Balance at the beginning of||||||||||||
||754,010,400.00||||138,953,250.09|||13,098,989.67|602,356,402.65|2,201,224,089.10|3,709,643,131.51|
|current year||||||||||||
|III.Changed in the current year||||||||||22,564,563.07|22,564,563.07|
|（I）Total comprehensive income||||||||||22,564,563.07|22,564,563.07|
|(II) Investment or decreasing of||||||||||||
|capital by owners||||||||||||
|1．Ordinary Shares invested by sha||||||||||||
|reholders||||||||||||
|2．Holders of other equity instrume||||||||||||
|nts invested capital||||||||||||
|3.Amount of shares paid and||||||||||||
|accounted as owners’ equity||||||||||||
|4．Other||||||||||||
|（III）Profit allotment||||||||||||
|1.Providing of surplus reserves||||||||||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||||||
|-|-|-|-|-|-|-|
|2．Allotment to the owners (or|||||||
|shareholders)|||||||
|3．Other|||||||
|(IV) Internal transferring of owners’|||||||
|equity|||||||
|1. Capitalizing of capital reserves|||||||
|(or to capital shares)|||||||
|2. Capitalizing of surplus reserves|||||||
|(or to capital shares)|||||||
|3．Making up losses by surplus|||||||
|reserves.|||||||
|4. Other|||||||
|(V). Special reserves|||||||
|1. Provided this year|||549,654.39|||549,654.39|
|2．Used this term|||||||
||||549,654.39|||549,654.39|
|（VI）Other|||||||
|IV. Balance at the end of this term|754,010,400.00|138,953,250.09|13,098,989.67|602,356,402.65|2,223,788,652.17|3,732,207,694.58|

 Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 Amount in last year
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Amount in last year|||||||||||
|||Other Equity||||||||||
|||instrument||||Less:|Other|||||
||||||||||Common risk||Total of owners’|
|Items|Share Capital||||Capital reserves|Shares|Comprehensi|Surplus reserves||Attributable profit||
|||prefer|||||||provision||equity|
|||red|Sustai|Othe||in stock|ve Income|||||
||||nable|r||||||||
|||stock||||||||||
||||debt|||||||||
|I.Balance at the end of last year|||||||||||3,896,145,293.|
||754,010,400.00||||138,953,250.09|||10,511,915.73|602,356,402.65|2,390,313,324.89||
||||||||||||36|
|Add: Change of accounting policy||||||||||||
|Correcting of previous errors||||||||||||
|Other||||||||||||
|II.Balance at the beginning of current||||||||||||
||||||||||||3,896,145,293.|
||754,010,400.00||||138,953,250.09|||10,511,915.73|602,356,402.65|2,390,313,324.89||
|year|||||||||||36|
|III.Changed in the current year||||||||||||
|||||||||||-8,156,166.97|-8,156,166.97|
|（I）Total comprehensive income||||||||||||
|||||||||||67,244,873.03|67,244,873.03|
|(II) Investment or decreasing of capital||||||||||||
|by owners||||||||||||
|1．Ordinary Shares invested by share||||||||||||
|holders||||||||||||
|2．Holders of other equity instrument||||||||||||
|s invested capital||||||||||||
|3.Amount of shares paid and||||||||||||
|accounted as owners’ equity||||||||||||
|4．Other||||||||||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||||||
|-|-|-|-|-|-|-|
|（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|||||||
|1. Provided this year|||||||
||||618,887.05|||618,887.05|
|2．Used this term|||||||
||||618,887.05|||618,887.05|
|（VI）Other|||||||
|IV. Balance at the end of this term||||||3,887,989,126.|
||754,010,400.00|138,953,250.09|10,511,915.73|602,356,402.65|2,382,157,157.92||
|||||||39|

 Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiama
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 III. Company Profile
Hangzhou Steam Turbine Co., Ltd. (the Company) was incorporated as a joint stock limited company exclusively promoted by Hangzhou Steam Turbine& Power Group Company Limited (“HSTG”) approved by the Securities Regulatory Commission of the State Council with the Document SRC[1998] No. 8 by offering domestically listed foreign currency ordinary shares (B Shares), with registration date: April 23, 1998, Registered address: No.357 Shiqiao Road, Hangzhou City, Zhijiang.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 3rd meeting of the 7th term of Board held on August 12, 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.
IV. Basis of compiling the finance report
(1) Basis of compiling
The Company adopts perpetual operation as the basis of financial statements.
(II) Assessment on perpetuation
No issue or situation, in 12 months since the end of report period, composes major doubt on the perpetuation assumption of the Company.
V. Principal Accounting Policies and Estimations
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
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 adjusted into capital reserves; when the capital reserves is not enough to reduce, it will be adjusted into retained profit.
2. Treatment of entities under different control
The difference of takeover cost over the fair value of recognizable net asset of the acquired entity is recognized as goodwill at the day of takeover; in case the takeover cost is lower than the fair value of recognizable net asset of the acquired entity, the measuring process over the recognizable asset, liabilities, contingent liabilities, and takeover cost, shall be repeated, if comes out the same result, the difference shall be recorded into current income account.
6. Method for preparing the consolidated financial statements
The parent company puts all of its subsidiaries under its control into the consolidated financial statements. The consolidated financial statements are prepared according to the “Enterprise Accounting Standard No. 33– Consolidated Financial Statements”, basing on the accounts of the parent company and the subsidiaries, and after adjusting the long-term investment equity in the subsidiary on equity basis.
7. Recognition of cash and cash equivalents
Cash equivalent refers to the investment held by the Company with short term, strong liquidity and lower risk of value fluctuation that is easy to be converted into cash of known amount.
8. Foreign currency trade and translation of foreign currencies
1. Translation of foreign currency
Foreign currency trades are translated into RMB at the rate of the day when the trades are made. Those balances of foreign currencies and monetary items in foreign currencies are accounted at the exchange rate of the balance sheet date. Exchange differences, other than special loans satisfying the conditions of capitalization, are accounted into current income account. Non-monetary items in foreign currencies and on historical cost are translated at the rate of the trade day. Non-monetary items in foreign currencies and on fair value are translated at the rate of the day when the fair value is recognized, where the differences are accounted as gain/loss from change of fair value. 2. Translation of foreign currency financial statements
Asset and liability items in the balance sheet are translated basing on the exchange rate of the balance sheet date;Owners’ equities other than Retained Profit are translated at the exchange rate of the date when the trade happened. Income and expense items in the income statement are translated at the similar rate of the date when the trade happened. Differences generated by the above translating of foreign currencies are demonstrated separately under theowners’ equity in the balance sheet.
9. Financial instruments
1. Type of finance asset and finance debt Finance assets fall into four categories at initial recognition: financial asset appointed to be measured at fair value with their changes are accounted into current gain/loss accounts(including transactional finance asset and financial asset appointed to be measured at fair value with their changes are accounted into current gain/loss accounts), transactional financial assets, debt and account receivable, finance asset saleable.
Finance debts fall into two types at initial recognition: financial debt appointed to be measured at fair value with their changes are accounted into current gain/loss accounts(including transactional finance debt and financial debt appointed to be measured at fair value with their changes are accounted into current gain/loss accounts), other finance debt.
2. Basis of recognition and accounting of finance asset and finance debt When the Company is one part of the finance instrument contract, one finance asset or debt is recognized. When on recognizing initially finance asset or debt, it is measured by fair value, for the finance asset or debt which appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, the related transaction expenses are directly accounted into current gain and loss; for other finance asset and debt, the related transaction expenses accounted into the
initial recognition account. The Company future measures finance asset by fair value without deducting future
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 possible transaction fee but with exception: (1) Due investment, debt and account receivable are measured by actual interest rate according to the amortized costs. (2) Equity instrument investment which have no quote in active market and which fair valuecan’t be measured reliably, and its derived finance assets which are connected with the equity instrument and which are summarized through the equity instrument, are measured by cost. The Company conduct successive measure of finance debt according to amortized cost by actual interest rate with exception as following: (1) finance debt which appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, is measured at fir value without deducting possible future transactional fee at settlement; (2) Equity instrument investment which have no quote in active market and which fair valuecan’t be measured reliably, and its derived finance assets which are connected with the equity instrument and which are closed off through the equity instrument, are measured by cost. (3) finance debt sponsorship contracts which are not appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, or debt agreements at rate lower than market rate and which are not appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, are measured at the higher value between the optimal estimated value payable according to current obligations and the surplus value from which the initial recognition value deduct the accumulated amortized amount according to the actual interest rate.
Gain or loss from fluctuation of financial assets or liabilities are handled at the following ways, except for relating to hedge instrument.
(1) Gain or loss from fluctuation of fair value of financial assets or liabilities and accounted into current gain/loss account, are accounted into gain/loss of fluctuation of fair value. Interests or cash dividend received in the period of holding these assets are recognized as investment gains. When they are disposed, the difference between the amount actually received and initially booked value is recognized as investment gains, and adjust the gain/loss from fair value fluctuation.
(2) Fluctuation of fair value of sellable financial assets accounted into capital reserves; interests gained at actual interest rate are accounting into investment gains; the cash dividend received from sellable instrument investment, are accounted into investment gains when distributed; At disposal of these investment, the difference between actual amount received and book value are recognized as investment gains after deducting of accumulated change of fair value which are originally accounted into capital reserves.
As soon as the contract rights of acquiring the cash flow of particular financial asset have been terminated or almost all of the risks and rewards attached to the financial asset have been transferred, recognition of the financial asset is terminated; as soon as the current liabilities attached to the financial liability have been completely or partially relieved, recognition of the financial liability or part of is terminated.
3. Basis of recognition and accounting of financial asset transferring
The Company stop recognizing the finance asset which risks and remuneration of ownership are transferred to the receiver; and continue to recognize the transferred finance asset which risks and remuneration of ownership are kept, and recognize the value as one finance debt. For the finance assets which risks and remuneration of ownership are not transferred or kept, the Company recognize them as following: (1) stop recognizing the finance asset which are given up the control; (2) continue to recognize the finance asset and related finance debt according to the extend which involved into the transferred finance asset for the finance asset which are not given up control. The Company measured the surplus between the following two values for the transferred finance assets which fulfill the stop recognition requirements into current gain or loss: (1) Account value of the transferred finance asset; (2) Consideration plus the accumulated fair value changes which were accounted directed into ownership rights. For the transferred finance assets which partly fulfill the stop recognition requirements the Company amortized the stopped recognition part and the not-stopped recognition part of the account value of the whole transferred finance asset, and account the surplus between the following two values into current gain or loss: (1) Account value of the stopped recognition part; (2) consideration plus the corresponding stopped recognition part of the accumulated fair value changes which were accounted directed into ownership rights.
4. Recognition of fair value of financial assets and liabilities
The Company utilizes evaluation technologies supported by sufficient data and information to recognize the fair values of financial assets and liabilities. Values inputted to the evaluation technology are divided into following levels and used in sequence:
(1) Level 1 input: unadjusted quotations obtained from an active market of the similar asset or liability at the date of measurement;
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 (2) Level 2 input: values of the asset or liability observable, directly or indirectly, other than level 1 input, including: quotation of similar asset or liability in an active market; quotation of similar asset or liability in an non-active market; other observable value other than quotations, i.e. observable interest or gain curves in normal intervals of quotations.
(3) Level 3 input: non-observable input value of the asset or liability, including interest rates which are not observable or not testified by observable market data, fluctuation of stock prices, future cash flow of disposal liabilities undertaken from merger of entities, or financial predictions upon data itself.
5. Impairment test and impairment reserves plan
(1) The Company conduct impairment test to the finance asset other than which appointed to be measured at fair value with their changes are accounted into current gain/loss accounts on balance sheet day. Impairment provision is provided as long as evidence showing that impairment has happened to the financial asset.
(2) In dealing with major financial assets such as investment hold-to-mature, loans, and receivables, the Company conduct independently impairment test for single finance asset. Impairment tests are conducted with those of the finance asset composition which have similar credit risk characteristics; for the non impairment assets which are tested independently, the Company conduct the impairment test with those of the finance asset composition which have similar credit risk characteristics. The balance of book value over current value of expected future cash flow is recognized as impairment loss.
(3) Objective evidences of impairment on sellable financial assets 1) Objective evidences supporting the impairment of investment on sellable liability instruments are: a. Material financial dilemma with the debtor; b. Violating of the contract by the debtor, e.g. overdue of payment for interests or principal; c. Compromise made to the debtor who is in financial crisis with consideration of financial or legal factors; d. Possible bankruptcy or financial restructuring of the debtor; e. The liability instrument is not able to be traded in an active market for the debtor is in material financial dilemma; f. Other circumstances that are showing that impairment has already occurred.
2) Objective evidence showing that impairment has already occurred on sellable equity instruments are: significant or non-temporary fall of fair value, the invested entities suffers from material negative situations in aspects of technical, market, economy, or legislation environment. The Company performs tests on investments on sellable equity instruments individually on the balance sheet day. For investment on equity instruments measured on fair value, if the fair value on the balance sheet day is lower than the cost by50% (included), or lower than the costs for successively 12 months (included), impairment is recognized; If the fair value is lower than the cost by more than20% (included), but higher than50%, or lower than the cost for successively 6 months (included) but not more than 12 months, the Company will determine if impairment occurred with consideration of other factors, e.g. fluctuation of prices. For those equity instruments on cost basis, the Company will decided about impairment with consideration of the investedentities’ situations in aspects of technical, market, economy, or legislation environment.
When impairment occurred with a sellable financial asset, the accumulated losses caused by decreasing of fair value which have originally been written intoowners’ equity shall be carried over to current gain/loss account. If practical evidence showing that the value of a particular financial asset has recovered in value after a impairment loss has been recognized and practically related to the issues occurred after recognition of the loss, the impairment loss recognized shall be restored and accounted into current gain/loss. Impairment loss of sellable equity investment instrument will be restored toowners’ equity when the fair value has increased afterward. When impairment occurs on sellable equity instrument on cost basis, the balance between its book value and the current value of the predictable future cash flow upon current market gain rate, is recognized as impairment loss and recorded to current gain/loss account. It will not be written back in subsequent years.
When impairment occurred with a sellable financial asset, the accumulated losses caused by decreasing of fair value which have originally been written intoowners’ equity shall be carried over to current gain/loss account. If practical evidence showing that the value of a particular financial asset has recovered in value after a impairment loss has been recognized and practically related to the issues occurred after recognition of the loss, the impairment loss recognized shall be restored and accounted into current gain/loss. Impairment loss of sellable equity investment instrument will be restored toowners’ equity when the fair value has increased afterward.
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 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 provisions are provided on age analyze basis in the group
√ Applicable□Not applicable
||||
|-|-|-|
||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 cash flow of|
|Basis of providing bad debt individually||
||the receivable account and the current value of future cash flow of the group|
||Impairment test performed individually, bad debt provision will be provided at the|
|Basis of bad debt provision||
||difference of expected cash flow lower than the book value.|

11.Inventories
(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
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 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.
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 (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
||||||
|-|-|-|-|-|
|||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||||
||Straight average on||||
|Equipment & machinery||8-15|4%|12%-6.4%|
||period||||
|Transportation|Straight average on||||
|||4-8|4%|24%-12%|
|equipment|period||||
|Office equipment|Straight average on|5|4%|19.2%|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||
|-|
|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.
15. Loan expenses
1. Capitalizing of loan expenses
Loan expenses occurred in the Company, which can be categorized to purchasing or construction of assets satisfying the conditions of capitalization, shall be capitalized and accounted into capital costs; while other loan expenses are recognized as expenses and recorded into current income account.
2. Capitalization period of loan expenses
(1) Capitalization started as soon as all of these conditions are satisfied: 1) Capital expenditures have occurred; 2) Loan expenses have occurred; 3) Necessary purchasing or construction processes have been started to make the asset usable or sellable.
(2) If irregular interruption occurred in the purchasing or construction process of the assets satisfying the capitalizing conditions, and suspended for over successive three months, capitalizing of loan expenses is suspended; loan expenses occurred during the suspension period are recognized as current expenses until the purchasing or construction process resumes.
(3) Capitalizing of loan expenses is terminated as soon as the asset satisfying the capitalizing conditions reaches the state of usable or sellable as expected.
3. Rates and amounts of loan expense capitalization
Special loans raised for purchasing or construction of assets satisfying the conditions of capitalization, interest to be capitalized will be the actual interest expenses occurred in the current period of loan (including the discount, premium, or amortizing decided on actual interest rate basis), less the interest income from the unused loans in bank account or provisional investment gains; common loans used for purchasing or construction of assets satisfying the conditions of capitalization, the interest to be capitalized will be the weighted average of balance over special loans multiply capitalization rate of common loans.
16. Intangible assets
（1）Pricing Method, service life and impairment test
1. Intangible assets are land using rights, patents, and non-patent technologies, which are measured at cost basis. 2. For intangible assets with limited useful life, during the use life it is amortized according to the anticipating implementation method of the economic benefit of the intangible asset systematically and reasonably. Ifcan’t recognize the anticipating implementation method, the straight basis is deployed.
|||
|-|-|
|Items|Amortiing years|
|Land using right|50|
|Other|5|

(2) Accounting policy for internal research and development expenditure
Expenditures of internal researching projects are accounted into current term gain and loss when happens. The development period expenditures are recognized as intangible assets when fulfill following conditions: (1) The intangible asset is completed and technically possible to be used or sold; (2) With intention to complete the intangible asset for purpose of use or sale; (3) Evidence showing that there are markets or the products produced with using of the intangible asset, or markets of the intangible asset itself, by which the intangible asset may produce financial benefits. Intangible assets used inside the Company must be approved for their usable characters. (4) Developing of the intangible assets are supported by sufficient technical, financial, and other resources, and the intangible assets can be used or sold. (5) Expenditures occurred in developing of the intangible asset may be reliably measured.
17. Impairment of partial long-term assets
For those long-term assets such as equity investment, fixed assets measured on cost basis, construction-in-process,
intangible assets with limited service life, their recoverable amount shall be evaluated as soon as there was
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 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.
(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. 3. Accounting of dismissing welfare
Welfares for employees who are dismissed, the earlier one of the following is recognized as employee wage liability, and recorded to current gain /loss:
(1) When the Company cannot, on its own call only, retrieve the dismissing welfare provided by dismissing of service plan or suggestion;
(2) When the costs or expenses related to restructuring involved in the dismissing welfare are recognized by the Company.
4. Accounting of other long-termemployees’ welfares
As of long-term welfares provided to the employees, those which satisfy conditions of the stipulated saving plan are treated according to related regulations of stipulated saving plan; those which other than the aforesaid, are treated according to the stipulated beneficiary plan. In viewing of simplifying accounting treatment, employee wage costs are recognized as service costs, the net amounts of interests of other long-term welfare net liability or asset, along with recalculated variations of the both are recorded to the related gain/loss or cost of related asset. 20. Expected liabilities
(1) When it is very much likely to cause economic interests which can be reliably calculated outflow from the company to fulfill the obligation which is due to giving security outside, contentious matter, quality guarantee of products, onerous contract and other contingency, the company will regard the obligation as anticipation liabilities.
(2) The company will make an initial measurement of anticipation liabilities according to needed expense of best estimation when fulfilling related obligations and check the book value of anticipation liabilities on the balance sheet date.
21.Revenue
1. Recognizing of revenue
(1) Sales of goods
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 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
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 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.
VI. Taxation
1. Main categories and rates of taxes
||||
|-|-|-|
|Category of taxes|Tax base|Tax rate|
||Sales of goods or providing of taxable||
|VAT||17%|
||labor service||
|Operational tax|Taxable turnover|5%|
|City maintenance and construction tax|Turnover tax payable|7%|
|Enterprise income tax|Amount of income taxable|15%、25%|
||For those on price basis, taxes are paid at||
|House tax||1.2%、12%|
||1.2% of the balance of original value of the||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
||property after deducting of 30%; for those||
||on rental basis, taxes are paid at 12% of the||
||rental.||
|Educational surcharge|Taxable turnover|3%|
|Local education additional|Taxable turnover|2%|

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., Hangzhou Steam Turbine||
||15%|
|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|313,693.52|391,106.17|
|Bank deposit|768,046,413.77|688,833,556.36|
|Other monetary fund|26,407,482.47|62,372,133.71|
|Total|794,767,589.76|751,596,796.24|
|Incl:Total of accounts saved overseas|7,337,985.88|9,182,145.32|

(2) Other statements
Other monetary fund composes of RMB25,755,592.47 of security for bank acceptance notes and RMB641,890.00
of security for bank guarantee letter. Other of RMB 10000.00.Both under limitation of using.
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 2. Bills receivable
(1) Notes receivable listed by category
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Bank acceptance|502,979,313.54|637,528,943.49|
|Commercial acceptance|42,144,000.00|42,990,000.00|
|Total|545,123,313.54|680,518,943.49|

(2) Notes receivable pledged by the Company at the period-end
In RMB
|||
|-|-|
|Items|Amount on pledge|
|Bank acceptance|69,210,000.00|
|Total|69,210,000.00|

（3）Notes receivable which had endorsed by the Company or had discounted and had not due on the balance sheet date at the period-end
In RMB
||||
|-|-|-|
||Amount of recognition termination|Amount of not terminated|
|Items|||
||at the period-end|recognition at the period -end|
|Bank acceptance|145,548,135.52||
|Total|145,548,135.52||

3. Account receivable
（1）Detailed categories
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||End of term|||||Beginning of term|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|||||Book||||||
|||Proportio||Proportio|||Proportio|||Book value|
||Amount||Amount||value|Amount||Amount|Proportion||
|||n||n|||n||||
|Account receivables|||||||||||
|||||||2,861,0|||||
|provided bad debt|2,816,58|98.95%|889,866,|31.59%|1,926,721|49,700.|98.97%|764,959,5|26.74%|2,096,090,1|
|provision in credit|7,421.03||204.65||,216.38|||43.12||57.61|
|||||||73|||||
|risk groups|||||||||||
|Account receivable|||||||||||
|with minor individual|29,819,6||29,819,6|||29,819,||29,819,60|||
|||1.05%||100.00%|||1.03%||100.00%||
|amount but bad debt|07.69||07.69|||607.69||7.69|||
|provision is provided|||||||||||
|||||32.31%|1,926,721,216.38|2,890,8||||2,096,090,157.61|
||2,846,40||919,685,|||||794,779,1|||
|Total||100.00%||||69,308.|100.00%||27.49%||
||7,028.72||812.34|||||50.81|||
|||||||42|||||

Receivables with individually significant amount and provision for bad and doubtful debts individually provided at the end of the reporting period.
□ Applicable√Not applicable
Receivable accounts in the group on which bad debt provisions are provided on age basis
√ Applicable□Not applicable
In RMB
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||
|-|-|-|-|
||End of term|||
|Age||||
||Other receivable account|Bad debt provision|Proportion%|
|Subitem within 1 year||||
|Within 1 year|839,983,392.07|42,040,985.31|5.00%|
|Subtotal within 1 year|839,983,392.07|42,040,985.31|5.00%|
|1-2 years|582,897,134.47|58,289,713.46|10.00%|
|2-3 years|606,296,568.64|181,888,970.62|30.00%|
|Over 3 years|787,410,325.85|607,646,535.26|77.17%|
|3-4 years|306,686,159.94|184,011,695.96|60.00%|
|4-5 years|285,446,633.00|228,357,306.39|80.00%|
|Over 5 years|195,277,532.91|195,277,532.91|100.00%|
|Total|2,816,587,421.03|889,866,204.65||

Notes：
Receivables with provision for bad and doubtful debts based on the balance percentage method in the portfolio□ Applicable√Not applicable
Receivables with provision for bad and doubtful debts based on the other method in the portfolio
（2）The ending balance of receivables owed by the imputation of the top five parties
|||||
|-|-|-|-|
|Name|Amount|Proportion(%)|Bad debt provision|
|Client 1|731,099,586.92|25.68%|248,033,881.74|
|Client 2|348,865,840.80|12.26%|155,544,016.80|
|Client 3|38,934,865.99|1.37%|2,179,009.80|
|Client 4|35,773,604.12|1.26%|1,788,680.21|
|Client 5|34,982,213.00|1.23%|3,302,601.05|
|Subtotal|1,189,656,110.83|41.80%|410,848,189.59|

4. Prepayments
（1）Age analysis
In RMB
||||||
|-|-|-|-|-|
||Balance in year-end||Balance in year-begin||
|Age|||||
||Amount|Proportion（%）|Amount|Proportion（%）|
|Within 1 year|209,505,588.85|86.89%|107,708,874.45|77.34%|
|1-2 years|17,312,679.02|7.18%|25,792,370.60|18.52%|
|2-3 years|819,746.06|0.34%|2,763,347.80|1.98%|
|Over 3 years|13,474,270.23|5.59%|3,002,731.80|2.16%|
|Total|241,112,284.16|--|139,267,324.65|--|

Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time:
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 (2) Top 5 of the closing balance of the prepayment colleted according to the prepayment target
||||
|-|-|-|
|Name|Amount|Proportion(%)|
|Simemens Industrial Turbomachinery AB|13,104,732.53|5.44%|
|GOTE BORG ELECTRICAL AND MECHANICAENGINEERING FAR EAST LIMITED|L 11,313,321.30|4.69%|
|Zhenjiang Xinhua Group Co., Ltd.|7,176,000.00|2.98%|
|Qingdao Shengdaxin Electric power Technology Co., Ltd.|6,336,000.00|2.63%|
|Hangzhou Boiler Group Co., Ltd.|5,393,500.00|2.24%|
|Total|43,323,553.83|17.97%|

Othernotes：
5. Other account receivable
(1) Detailed categories
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||End of term|||||Beginning of term|||||
||Book balance||Bad debt provisionProportiovAmountn|||Book balance||Bad debt provision|||
|Category|||||Book||||||
|||Proportio|||||Proportio|||Book value|
||Amount||Amount||alue|Amount||Amount|Proportion||
|||n|||||n||||
|Other Accounts||||215.89%8||30,117|||||
||32,205,||5,117,5||7,087,|||4,543,12||25,574,05|
|receivable portfolio|||||||||||
|||89.67%||||,186.1|89.03%||15.08%||
|subject to impairment|360.49||35.19||25.30|||8.83||7.29|
|||||||2|||||
|by credit risk|||||||||||
|Other Accounts||||100.00%|||||||
|receivable with|||||||||||
||3,710,||3,710,3|||3,710,||3,710,32|||
|minor individual||10.33%|||||10.97%||100.00%||
||320.94||20.94|||320.94||0.94|||
|amount and bad debt|||||||||||
|provision provided|||||||||||
|||||224.58%8|7,087,25.30|33,827||||25,574,057.29|
||35,915,|100.00|8,827,8||||100.00|8,253,44|||
|Total||||||,507.0|||24.40%||
||681.43|%|56.13||||%|9.77|||
|||||||6|||||

Other receivable accounts in the group on which bad debt provisions are provided on age basis
√ Applicable□ Not applicable
In RMB
|||||
|-|-|-|-|
||End of term|||
|Age||||
||Other receivable account|Bad debt provision|Proportion%|
|Within 1 year||||
|Subtotal within 1 year|15,425,864.79|771,202.79|5.00%|
|Subtotal within 1 year|15,425,864.79|771,202.79|5.00%|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||
|-|-|-|-|
|1-2 years|9,025,838.98|902,583.90|10.00%|
|2-3 years|5,631,234.32|1,689,370.30|30.00%|
|Over 3 years|2,122,422.40|1,754,378.20|82.66%|
|3-4 years|499,392.00|299,635.20|60.00%|
|4-5 years|841,737.00|673,389.60|80.00%|
|Over 5 years|781,293.40|781,353.40|100.00%|
|Total|32,205,360.49|5,117,535.19||

Notes：
Other receivables with provision for bad and doubtful debts based on the balance percentage method in the portfolio
□ Applicable√ Not applicable
Other receivables with provision for bad and doubtful debts based on the other method in the portfolio
□ Applicable√Not applicable
（2） Other accounts receivable classified by the nature of accounts
In RMB
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Deposit|13,816,415.30|21,439,653.49|
|Provisional payment receivable|5,900,249.47|5,862,759.48|
|Petty cash|7,236,680.11|1,371,901.86|
|Other|8,962,336.55|5,153,192.23|
|Total|35,915,681.43|33,827,507.06|

（3）Top 5 of the closing balance of Other accounts receivable collated according to the arrears party
In RMB
|||||||
|-|-|-|-|-|-|
|Name of the||||Percentage in total||
||Account property|Book balance|Age||Bad debt provision|
|company||||other receivable %||
|Shanghai Customs||||||
||Import CNC lathe|3,710,320.94|Over 5 years|10.33%|3,710,320.94|
|Waigaoqiao Office||||||
|Investment from||||||
|Indonesia Company|Investment|3,246,800.00|2-3 years|9.04%|974,040.00|
|receivable||||||
|Export drawback||||||
||Export Rebates|2,732,899.36|Within 1 year|7.61%|136,644.97|
|receivable||||||
|Shanghai Huiyi||||||
|International|Payment of customs|||||
|||2,132,201.18|Within 1 year|5.94%|106,610.06|
|Freight Agency|duties and VAT|||||
|Co., Ltd.||||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||||
|-|-|-|-|-|-|
|Jiangxi Baohuashan||||||
|Group Ningdu||||||
||Bidding deposit|650,000.00|1-2 years|1.81%|65,000.00|
|Hengfeng Mining||||||
|Co., Ltd.||||||
|Total|--|12,472,221.48|--|34.73%|4,992,615.97|

 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 materials|401,944,097.21||401,944,097.21|458,779,130.89||458,779,130.89|
|Product in|||||||
||722,446,356.62||722,446,356.62|564,392,004.76||564,392,004.76|
|process|||||||
|Products in stock|1,163,561,254.53|52,268,657.24|1,111,292,597.29|856,686,717.61|52,988,014.66|803,698,702.95|
|Total|2,287,951,708.36|52,268,657.24|2,235,683,051.12|1,879,857,853.26|52,988,014.66|1,826,869,838.60|

 (2) Inventory depreciation provision
In RMB
||||||||
|-|-|-|-|-|-|-|
|||Increased this period||Decreased this period|||
||Beginning of||||||
|Items||||Written back or||End of term|
||term|Provided|Others||Others||
|||||off|||
|Products in|52,988,014.66|||||52,268,657.24|
|||||719,357.42|||
|stock|||||||
|Total|52,988,014.66|||719,357.42||52,268,657.24|

 7. Other current asset
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Bank financing products|552,700,000.00|426,000,000.00|
|Input tax deductible|9,655,533.03|1,089,566.15|
|Prepaid income tax|68,658.61|113,279.98|
|Prepayment of other tax|4,991,425.21|989.31|
|Total|567,415,616.85|427,203,835.44|

Othernotes：
8. Sellable financial asset
(1) Details
In RMB
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||||||
|-|-|-|-|-|-|-|
||End of term|||Beginning of term|||
|Items||Impairment|Book value||Impairment||
||Book balance|||Book balance||Book value|
|||provision|||provision||
|Available-for-sale equity|||||||
||509,409,741.77||509,409,741.77|509,409,741.77||509,409,741.77|
|instruments|||||||
|On cost basis|509,409,741.77||509,409,741.77|509,409,741.77||509,409,741.77|
|Total|509,409,741.77||509,409,741.77|509,409,741.77||509,409,741.77|

 (2) Sellable financial assets on cost basis
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Book balance||||Impairment provision||||Shareholdi|Cash|
||Beginning|Increased|||Beginning|Increased|Decreased|End of|ng|bonus of|
|Company|||||||||||
||of term|this period|Decreased|End of|of term|this period|this period|term|proportion|the|
|invested in|||||||||||
||||this period|term|||||among the|reporting|
||||||||||investees|period|
|Bank of|||||||||||
||390,954,04|||390,954,04|||||||
|Hangzhou|||||||||5.89%||
||0.00|||0.00|||||||
|Co.,Ltd.|||||||||||
|Greenesol|5,534,773.|||5,534,773.|||||||
||||||||||37.00%||
|Co.(India)|22|||22|||||||
|Hangzhou|||||||||||
|Changdi|||||||||||
|Equity|||||||||||
||39,115,565|||39,115,565|||||||
|Investment|||||||||2.97%||
||.04|||.04|||||||
|Partnershi|||||||||||
|p(Limited|||||||||||
|liability)|||||||||||
|Hangzhou|||||||||||
|Steam|||||||||||
||30,000,000|||30,000,000|||||||
|Turbine|||||||||15.00%||
||.00|||.00|||||||
|Engineerin|||||||||||
|g Co., Ltd.|||||||||||
|Zhejiang|||||||||||
|Sanxin|||||||||||
|Automatic|600,000.00|||600,000.00|||||6.00%||
|Engineerin|||||||||||
|g Co., Ltd.|||||||||||
|Zhejiang|15,000,000|||15,000,000|||||||
||||||||||5.27%||
|Zhongkon|.00|||.00|||||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||
|-|-|-|-|
|g Solar||||
|Energy||||
|Technolog||||
|y Co., Ltd.||||
|Zhejiang||||
|Tianhang||||
|Steam||||
||10,000,000|10,000,000||
|Turbine|||33.33%|
||.00|.00||
|Auxiliary||||
|Machinery||||
|Co., Ltd.||||
|Wuxi||||
|Xinchang|18,205,363|18,205,363||
||||18.00%|
|Steel Tube|.51|.51||
|Co., Ltd.||||
||509,409,74|509,409,74||
|Total|||--|
||1.77|1.77||

9. Fixed assets
（1）Details
In RMB
|||||||
|-|-|-|-|-|-|
||Houses &|Machinery|Transportation|||
|Items||||Office equipment|Total|
||buildings|equipment|equipment|||
|I. Original value||||||
|1.Opening balance|430,839,912.93|969,905,790.70|29,785,975.08|99,549,945.71|1,530,081,624.42|
|2.Increased amount||||||
||11,336,962.90|5,214,475.58|70,997.00|3,172,297.96|19,794,733.44|
|of the period||||||
|（1）Outsourcing||3,492,019.44|70,997.00|831,250.73|4,394,267.17|
|（ 2 ） Inventory,||||||
|Fixed assets and||||||
||11,336,962.90|1,722,456.14||2,341,047.23|15,400,466.27|
|Construction||||||
|project into||||||
|（ 3 ） Enterprise||||||
|consolidation||||||
|3.Decreased||||||
|||44,945.00||260,336.00|305,281.00|
|amount of the||||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||||
|-|-|-|-|-|-|
|period||||||
|（1）Disposal||44,945.00|||44,945.00|
|||||260,336.00|260,336.00|
|4.Closing||||||
||442,176,875.83|975,075,321.28|29,856,972.08|102,461,907.67|1,549,571,076.86|
|balance||||||
|II.Accumulated||||||
|depreciation||||||
|accumulated||||||
|amortization||||||
|1.Opening balance|163,529,319.75|620,466,561.64|18,904,719.96|78,242,233.07|881,142,834.42|
|2.Increased amount||||||
||5,920,011.61|30,129,079.27|1,024,167.64|3,985,087.10|41,058,345.62|
|of the period||||||
|（1）Withdrawal|5,920,011.61|30,129,079.27|1,024,167.64|3,985,087.10|41,058,345.62|
|3.Decreased||||||
|||39,526.95||249,922.56|289,449.51|
|amount of the period||||||
|（1）Disposal||39,526.95|||39,526.95|
|||||249,922.56|249,922.56|
|4.Closing balance|169,449,331.36|650,556,113.96|19,928,887.60|81,977,397.61|921,911,730.53|
|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||||||
|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|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||||
|-|-|-|-|-|-|
|IV. Book value||||||
|1.Closing book value|271,222,616.23|320,444,348.89|9,928,084.48|19,281,143.07|620,876,192.67|
|2.Opening book|265,805,664.94|345,364,370.63|10,881,255.12|20,104,345.65|642,155,636.34|

 10. Project under construction
（1）Project under construction
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of term|||Beginning of term|||
|Items||Impairment|||Impairment|Book value|
||Book balance||Book value|Book balance|||
|||provision|||provision||
|Construction in|||||||
|process of parent|||||||
||86,034,126.55||86,034,126.55|79,982,551.34||79,982,551.34|
|Company （ 113|||||||
|projects）|||||||
|Tangxi Workshop|||||||
|PhaseII, Gouneng|14,592,961.69||14,592,961.69|19,540,353.62||19,540,353.62|
|Company|||||||
|Project of steam|||||||
|turbine heavy|69,422,380.30||69,422,380.30|18,177,025.86||18,177,025.86|
|industry|||||||
|Minor purchasing|||||||
|of equipment by|3,343,248.33||3,343,248.33||||
|subsidiaries|||||||
|Prepayment for|||||||
|equipment or||||1,487,176.70||1,487,176.70|
|projects|||||||
|Total|173,392,716.87||173,392,716.87|119,187,107.52||119,187,107.52|

 (2) Changes of significant construction in progress
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||Beginning of term|||||Accumul||Accumul|Interestcapitalized thisterm|Ratio of||
||||Increase|Transferr|Other||ated||ate of||interest||
|||||||End of||||||Fund|
|Project|Budget||d this|ed fixed|decrease||input on|Progress|interest||capitalizi||
|||||||term||||||recourse|
||||period|assets|s||budget||capitaliz||ng this||
||||||||%||ed||term %||
|Construc|||||||||||||
|||||||||Under|||||
||208,385,|76,494,8|9,539,30|||86,034,1|||||||
|tion in|||||||||||||
||||||||41.29%|Construc|||||
|process|880.00|25.13|1.42|||26.55|||||||
|||||||||tion|||||
|of parent|||||||||||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Compan||||||||||
|y （ 113||||||||||
|projects）||||||||||
|Complet||||||||||
|ed||||||||||
|project||||||||||
||5,071,10|3,487,72|575,543.|4,063,26||||Complet||
|of parent||||||||||
||0.00|6.21|70|9.91||||ed||
|Compan||||||||||
|y （ 55||||||||||
|projects）||||||||||
|Tangxi||||||||||
|Worksho||||||||||
|p||||||||Under||
||29,510,0|19,540,3|6,389,57|11,336,9||14,592,9||||
|PhaseII,|||||||49.45%|Construc||
||00.00|53.62|0.97|62.90||61.69||||
|Gouneng||||||||tion||
|Compan||||||||||
|y||||||||||
|Project||||||||||
|of steam||||||||Under||
||1,794,10|18,177,0|51,245,3|||69,422,3||||
|turbine|||||||3.87%|Construc||
||0,000.00|25.86|54.44|||80.30||||
|heavy||||||||tion||
|industry||||||||||
|Minor||||||||||
|purchasi||||||||||
|ng of||||||||Under||
||8,343,24||3,343,24|||3,343,24||||
|equipme|||||||40.07%|Construc||
||8.33||8.33|||8.33||||
|nt by||||||||tion||
|subsidiar||||||||||
|ies||||||||||
|Prepaym||||||||||
|ent for||||||||||
||2,604,19|1,487,17|||1,487,17|||Complet||
|equipme||||||||||
||5.84|6.70|||6.70|||ed||
|nt or||||||||||
|projects||||||||||
||2,048,01|119,187,|71,093,0|15,400,2|1,487,17|173,392,||||
|Total|||||||--|--|--|
||4,424.17|107.52|18.86|32.81|6.70|716.87||||

11. Intangible assets
（1）Details
In RMB
|||||||
|-|-|-|-|-|-|
|Items|Land using right|Patent|Non-patent right|Other|Total|
|I. Original price||||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||||
|-|-|-|-|-|-|
|1.Opening||||||
||332,298,312.33|200,000.00|8,000,000.00|328,376.07|340,826,688.40|
|balance||||||
|2.Increased amount||||||
|||9,433.96|||9,433.96|
|of the period||||||
|(1) Purchase||9,433.96|||9,433.96|
|(2)Internal||||||
|Developm||||||
|ent||||||
|(3)Increased of||||||
|Enterprise||||||
|Combination||||||
|3.Decreased||||||
|amount of the period||||||
|（1）Disposal||||||
|4.Closing balance|332,298,312.33|209,433.96|8,000,000.00|328,376.07|340,836,122.36|
|II.Accumulated||||||
|amortization||||||
|1.Opening balance|35,119,224.60|86,000.00|466,666.67|205,589.95|35,877,481.22|
|2.Increased amount||||||
||3,586,665.01|37,999.96|400,000.02|38,837.60|4,063,502.59|
|of the period||||||
|(1) Withdrawal|3,586,665.01|37,999.96|400,000.02|38,837.60|4,063,502.59|
|3.Decreased amount||||||
|of the period||||||
|（1）Disposal||||||
|4.Closing balance|38,705,889.61|123,999.96|866,666.69|244,427.55|39,940,983.81|
|III. Impairment||||||
|provision||||||
|1.Opening balance||||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||||
|-|-|-|-|-|-|
|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|293,592,422.72|85,434.00|7,133,333.31|83,948.52|300,895,138.55|
|2.Opening book||||||
||297,179,087.73|114,000.00|7,533,333.33|122,786.12|304,949,207.18|
|value||||||

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|Balance in|Increase in this||Other loss|Balance in year-end|
||year-begin|period||||
|Redecoration|1,781,295.80|51,377.11|132,123.74||1,700,549.17|
|Afforestation fees|248,176.00||124,088.00||124,088.00|
|Total|2,029,471.80|51,377.11|256,211.74||1,824,637.17|

 Other notes
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||
|Items|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|assets|difference|assets|
|Provision for Asset|||||
||988,021,920.95|153,518,142.89|862,665,829.01|134,087,883.30|
|Impairment|||||
|Internal trade profit not|||||
||64,032,268.73|9,604,840.31|51,540,875.71|7,731,131.35|
|realized|||||
|Deductible loss|60,288,265.27|9,073,150.16|109,318,315.61|16,427,657.71|
|Temporary difference|4,521,435.59|678,215.34|4,521,435.59|678,215.34|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||||
|-|-|-|-|-|
|such as amortizing of|||||
|software expense|||||
|Total|1,116,863,890.54|172,874,348.70|1,028,046,455.92|158,924,887.70|

(2) Deferred income tax liabilities had not been off-set
In RMB
||||||
|-|-|-|-|-|
||Balance in year-end||Balance in year-begin||
|Items|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|liabilities|difference|liabilities|
|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|
|Deductible provisional differences|262,915.84|137,939.89|
|Deductible loss|8,569,983.75|5,606,704.52|
|Total|8,832,899.59|5,744,644.41|

（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|
|2018|1,088,275.32|1,088,275.32||
|2019|903,272.74|903,272.74||
|2020|3,615,156.46|3,615,156.46||
|2021|2,963,279.23|||
|Total|8,569,983.75|5,606,704.52|--|

Othernotes：
14.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|71,250,000.00|75,350,000.00|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
|Total|81,250,000.00|85,350,000.00|

Notes：
15. Notes payable
In RMB
||||
|-|-|-|
|Category|Balance in year-end|Balance in year-begin|
|Bank acceptance|198,065,752.08|194,226,049.73|
|Total|198,065,752.08|194,226,049.73|

The amount payable at the end of this term is RMB 0.00.
16. Account payable
（1）Details
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Goods|1,050,191,962.10|796,106,637.10|
|Payment for equipment and projects|8,997,719.52|14,313,744.35|
|Total|1,059,189,681.62|810,420,381.45|

17. Advances received
（1）Details
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Goods|2,015,952,250.97|1,736,820,949.19|
|Total|2,015,952,250.97|1,736,820,949.19|

18.Employees’ wage payable
(1) Details
In RMB
||||||
|-|-|-|-|-|
|Items|Beginning of term|Increased this period|Decreased this period|End of term|
|I. Short-term wages|46,643,490.67|277,164,866.72|284,685,461.96|39,122,895.43|
|II. Welfare after leaving|||||
|of position-fixed|23,613,983.79|36,622,933.27|47,079,981.30|13,156,935.76|
|provision scheme|||||
|Total|70,257,474.46|313,787,799.99|331,765,443.26|52,279,831.19|

(2) Details of short term wages
In RMB
||||||
|-|-|-|-|-|
|Items|Beginning of term|Increased this period|Decreased this period|End of term|
|1.Wage, bonus,|||||
||34,671,757.54|196,907,397.75|216,190,193.64|15,388,961.65|
|allowance and subsidies|||||
|2. Employee welfare||26,083,209.59|16,941,272.87|9,141,936.72|
|3. Social insurance|5,385,672.93|22,815,971.83|23,444,293.77|4,757,350.99|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||||
|-|-|-|-|-|
|Incl. Medical insurance|4,746,884.21|20,247,907.48|20,621,235.24|4,373,556.45|
|Labor injury insurance|219,035.19|786,430.24|888,552.97|116,912.46|
|Maternity insurance|419,753.53|1,781,634.11|1,934,505.56|266,882.08|
|4. Housing fund|110,894.96|22,484,107.00|22,481,321.00|113,680.96|
|5. Labour union fee and|||||
||6,475,165.24|8,682,347.22|5,436,547.35|9,720,965.11|
|employee education fee|||||
|7.Short-term profit|||||
|||191,833.33|191,833.33||
|sharing scheme|||||
|Total|46,643,490.67|277,164,866.72|284,685,461.96|39,122,895.43|

(3) Details of fixed provision scheme
In RMB
||||||
|-|-|-|-|-|
|Items|Beginning of term|Increased this period|Decreased this period|End of term|
|1.Basic pension|||||
||4,967,070.01|24,462,875.84|25,663,360.42|3,766,585.43|
|insurance|||||
|2. Unemployment|||||
||532,115.91|2,330,359.71|2,582,745.30|279,730.32|
|insurance|||||
|3. Enterprise annual fee|18,114,797.87|9,829,697.72|18,833,875.58|9,110,620.01|
|Total|23,613,983.79|36,622,933.27|47,079,981.30|13,156,935.76|

Othernotes：
19. Tax Payable
In RMB
||||
|-|-|-|
|Items|Balance in year-end|Balance in year-begin|
|VAT|8,708,538.56|14,415,685.85|
|Business Tax|14,341.11|26,734.00|
|Enterprise Income tax|||
||6,014,563.60|13,503,170.56|
|Individual Income tax|1,714,381.25|2,576,708.03|
|City Construction tax|941,556.39|1,039,687.83|
|Land use tax|918,480.00|1,245,105.20|
|Property tax||39,647.76|
|Education subjoin|416,322.64|453,914.47|
|Locality Education subjoin|277,543.45|303,713.60|
|Stamp tax|13,402.28|19,236.84|
|Local water source foundation|2,029,462.39|2,382,364.75|
|Disabled security fund||2,140.20|
|Vehicles use fee|2,340.00||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
|Total|21,050,931.67|36,008,109.09|

Othernotes：
20. Other account payable
(1) Other accounts payable listed by nature of the account
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Deposit|1,074,845.10|1,462,038.45|
|Provisional account payable|8,917,962.69|22,729,311.10|
|Other|14,861,123.47|5,513,775.96|
|Total|24,853,931.26|29,705,125.51|

21. Non-current liabilities due within 1 year
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Long-term loans due within 1 year|200,000.00|300,000.00|
|Total|200,000.00|300,000.00|

Othernotes：
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|23,400,000.00|
|Guaranteed loans|100,000,000.00|100,000,000.00|
|Total|123,400,000.00|123,400,000.00|

Notes：
Othernotes，Include interest raterange：
23. Deferred income
In RMB
|||||||
|-|-|-|-|-|-|
|Items|||Decreased this|||
||Beginning of term|Increased this period||End of term|Cause|
||||period|||
|Government subsidy|6,804,425.00|3,310,181.23||10,114,606.23||
|Total|6,804,425.00|3,310,181.23||10,114,606.23|--|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 Details of government subsidies
In RMB
||||||||
|-|-|-|-|-|-|-|
||||Amount||||
|||New subsidy in|transferred to|Other||Asset-related or|
|Items|Beginning of term||||End of term||
|||current period|non-operational|changes||income-related|
||||income||||
|Financial allocation of advance||||||Asset-related|
||52,000.00||||52,000.00||
|manufacturing base|||||||
|Financial subsidy for Provincial||||||Asset-related|
|industrial transformation and|125,510.00||||125,510.00||
|upgrading|||||||
|Government subsidy for||||||Asset-related|
|industrial entities from Yuhang|||||||
||427,720.00||||427,720.00||
|District Government in the 2nd|||||||
|half of 2009|||||||
|Government finance for industrial||||||Asset-related|
||4,903,785.00||||4,903,785.00||
|project in the 2nd half of 2006|||||||
|Finance for casting project|640,000.00||||640,000.00|Asset-related|
|Government subsidy for||||||Asset-related|
||316,580.00||||316,580.00||
|recycling economy|||||||
|10K ton casting line enlarging||||||Asset-related|
||316,580.00||||316,580.00||
|project|||||||
|Government fund for advanced||||||Asset-related|
||22,250.00||||22,250.00||
|manufacturing enterprise|||||||
|Enterprise stable job subsidies||3,210,181.23|||3,210,181.23|Asset-related|
|MPT spectrometer for the first||||||Asset-related|
|time in the application of the|||||||
|project funding for the|||||||
|||100,000.00|||100,000.00||
|maintenance of the apparent|||||||
|condition of the steam turbine|||||||
|2013YQ47078106|||||||
|Total|6,804,425.00|3,310,181.23|||10,114,606.23|--|

Othernotes：
24. Stock capital
In RMB
||||||||
|-|-|-|-|-|-|-|
||Increase/decrease this time (+ , - )||||||
|Balance|||||||
||Issuing of new|Bonus shares|Transferred||Subtotal|Balance year-end|
|Year-beginning||||Other|||
||share||from reserves||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
|Total of capital|754,010,400.00|754,010,400.00|
|shares|||

Othernotes：
25. Capital reserves
In RMB
||||||
|-|-|-|-|-|
|Items|Year-beginning|Increase in the current|Decrease in the current|Year-end balance|
||balance|period|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|

Notes：
26. Other comprehensive income
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Occurred current term||||||
||||Less:|||||
|||Amount||||||
||||accounted as|||||
|||occurred|||Attributable|Attributable||
||Beginning of|||||||
||||other gains|Less:||||
|Items|||||||End of term|
|||before|||to the|to minority||
||term||previously but|Income tax||||
|||income tax|||parent co.|shareholders||
||||transferred to|expenses||||
|||of the|||after tax|after tax||
||||gain/loss this|||||
|||period||||||
||||period|||||
|II. Other Comprehensive income that|||||375,326.36|||
|will be reclassified subsequently to|-852,752.00|881,469.91||||506,143.55|-477,425.64|
|profit or loss||||||||
|Translation differences of financial|||||375,326.36|||
|statements denominated in foreign|-852,752.00|881,469.91||||506,143.55|-477,425.64|
|currencies||||||||
|Total|-852,752.00|881,469.91|||375,326.36|506,143.55|-477,425.64|

Notes：
28. Surplus reserve
In RMB
||||||
|-|-|-|-|-|
|Items|Year-beginning balance|Increase in the current|Decrease in the current|Year-end balance|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||||
|-|-|-|-|-|
|||period|period||
|Labor safety expenses|31,764,920.51|1,168,964.22|1,348,662.38|31,585,222.35|
|Total|31,764,920.51|1,168,964.22|1,348,662.38|31,585,222.35|

Other notes, including changes and reason ofchange:：
28. Surplus reserves
In RMB
||||||
|-|-|-|-|-|
|Items|Beginning of term|Increased this period|Decreased this period|End of term|
|Statutory surplus|||||
||621,112,807.78|||621,112,807.78|
|reserves|||||
|Total|621,112,807.78|||621,112,807.78|

Statement on surplus reserves. Please state the related resolutions of the Board on capitalizing of reserves, making up losses, anddividends：
29. Retained profits
In RMB
||||
|-|-|-|
|Items|Amount of this period|Amount of last period|
|Adjustment on retained profit at end of previousterm|2,673,711,591.42||
|||2,911,921,943.21|
|Plus: Net profit attributable to owners of theparent company|||
||-31,252,238.19|-10,282,333.32|
|Common share dividend payable||75,401,040.00|
|Retained profit at the end of term|2,642,459,353.23|2,826,238,569.89|

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 .
30. Business income and Business cost
In RMB
||||
|-|-|-|
||Occurred current term|Occurred in previous term|
|Items|||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||||
|-|-|-|-|-|
||Income|Cost|Income|Cost|
|Main Business|1,362,270,491.45|848,808,322.11|1,051,651,934.26|661,731,977.04|
|Other|5,153,280.43|2,129,583.93|3,344,391.98|777,370.14|
|Total|1,367,423,771.88|850,937,906.04|1,054,996,326.24|662,509,347.18|

31. Business tax and surcharge
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Business tax|36,467.22|76,064.57|
|City maintenance and construction tax|4,848,384.15|3,597,396.78|
|Education surtax|2,123,039.65|1,596,580.15|
|Local education surcharges|1,415,359.85|1,064,551.92|
|Total|8,423,250.87|6,334,593.42|

Othernotes：
32. Sales expenses
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Employees’ remunerations|24,144,838.68|27,276,709.31|
|Transportation|22,067,695.57|17,125,216.83|
|Business trips|9,321,130.31|8,118,609.81|
|Business reception expenses|3,856,181.75|3,388,749.62|
|Conferences|762,768.90|1,233,208.24|
|Consulting service fee|7,376,359.34|5,715,017.95|
|Insurance for turbine unit|115,012.33|132,272.45|
|Warranty expense|1,360,196.29|907,943.92|
|Product exhibition|879,035.70|475,420.96|
|Office expenses|290,453.85|398,913.10|
|Others|5,693,921.26|3,162,511.90|
|Total|75,867,593.98|67,934,574.09|

Othernotes：
33.Administrative expense
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Employees’ remunerations|154,766,064.42|150,393,259.60|
|R&D expenses|138,018,919.01|107,033,616.25|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
|Asset depreciation and amortizing|10,600,496.96|10,524,580.76|
|Business reception expenses|6,075,008.72|6,689,781.94|
|House rental, property management, water|||
||3,912,114.29|6,764,416.69|
|and power|||
|Traveling fees|3,693,110.12|2,928,486.47|
|Taxes|5,995,092.98|1,819,584.25|
|Material, low-value-consumable|1,179,867.75|1,517,319.57|
|Office expenses|1,529,414.33|1,867,126.81|
|Maintaining|1,393,232.10|1,516,499.13|
|Other|27,943,597.87|24,115,191.43|
|Total|355,106,918.55|315,169,862.90|

Othernotes：
34. Financial expenses
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Interest expense|4,856,082.74|6,368,172.77|
|Less: Incoming interests|2,276,735.92|3,258,526.77|
|Exchange gains/losses|-3,218,647.71|600,522.74|
|Commission|1,004,308.45|1,185,235.00|
|Other|147,021.61|37,036.60|
|Total|512,029.17|4,932,440.34|

Othernotes：
35. Asset impairment loss
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|I .Losses for bad debts|125,619,636.17|22,650,560.50|
|Total|125,619,636.17|22,650,560.50|

Othernotes：
36. Investment income
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
|Investment income gain from available for sale|||
||3,587,659.70|28,742,368.00|
|financial assets|||
|Reverse repurchase treasury investment incom|||
||11,457,674.92|10,489,094.05|
|e|||
|Total|15,045,334.62|39,231,462.05|

Othernotes：
37. Non-Operation income
In RMB
|||||
|-|-|-|-|
||||Recorded in the amount of the|
|Items|Occurred current term|Occurred in previous term||
||||non-recurring gains and losses|
|Total gains from disposal of|17,299.04|29,583.00||
||||17,299.04|
|non-current assets||||
|Including：Gains from disposal||||
||17,299.04|29,583.00|17,299.04|
|of fixed assets||||
|Government Subsidy|318,530.00|3,309,950.00|318,530.00|
|Compensation income|6,372,280.92|2,763,960.00|6,372,280.92|
|Other|136,652.06|181,713.55|136,652.06|
|Total|6,844,762.02|6,285,206.55|6,844,762.02|

Government subsidy reckoned into current gains/losses
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Whether the||||Asset-related|
|||||impact of||||or|
||||||Whether||||
|Subsidy|Issuing|||subsidies on||Amount of|Amount of|income-relate|
|||Release cause|Type||special||||
|items|subject|||the current||this period|last period|d|
||||||subsidies||||
|||||profit and|||||
|||||loss|||||
|Transferred|||||||||
|from deferred||||No|No||1,252,350.00|Assets related|
|income|||||||||
|Other|||||||||
|sporadic||||||||Income|
|||||No|No||||
|government||||||||related|
|subsidies|||||||||
|2014||||||||Income|
|||||No|No|4,000.00|||
|Provincial||||||||related|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||||
|-|-|-|-|-|-|
|Patent||||||
|Grant/Hangz||||||
|hou Yuhang||||||
|District||||||
|Science &||||||
|Technology||||||
|Bureau||||||
|Award for||||||
|Enterprise||||||
||||||Income|
|R&D|No|No|314,200.00|||
||||||related|
|Investment||||||
|2014||||||
|Transfer tax|||||Income|
||No|No|330.00|||
|service fee|||||related|
|Hangzhou||||||
|Xihu||||||
|Production|||||Income|
||No|No||5,000.00||
|Promotion|||||related|
|Center||||||
|Pattent Grant||||||
|Baiyang||||||
||||||Income|
|street Labor|No|No||5,600.00||
||||||related|
|grant||||||
|Award for||||||
|Enterprise||||||
||||||Income|
|R&D|No|||971,000.00||
||||||related|
|Investment||||||
|2013||||||
|2014||||||
|financial||||||
||||||Income|
|grants on|No|No||16,000.00||
||||||related|
|intellectual||||||
|property right||||||
|2014 Yuhang||||||
|industrial|||||Income|
||No|No||635,000.00||
|risk-pooling|||||related|
|funds||||||
|2014Hangzh||||||
|ou city grants||||||
||||||Income|
||No|No||100,000.00||
|on safety||||||
||||||related|
|production||||||
|standardizati||||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||||||||
|-|-|-|-|-|-|-|-|-|
|on|||||||||
|2014 Yuhang|||||||||
|District|||||||||
|||||||||Income|
|grants on||||No|No||200,000.00||
|||||||||related|
|Quality|||||||||
|Awards|||||||||
|Xiacheng|||||||||
|District|||||||||
|financial|||||||||
|subsidies|||||||||
|||||||||Income|
|granted for||||No|No||100,000.00||
|||||||||related|
|safety|||||||||
|production|||||||||
|financial|||||||||
|subsidies|||||||||
|Grants on|||||||||
|Deqing|||||||||
|||||||||Income|
|Finance||||No|No||25,000.00||
|||||||||related|
|Bureau|||||||||
|upgrading|||||||||
|Total|--|--|--|--|--|318,530.00|3,309,950.00|--|

Othernotes：
38. Non-operational expenditure
In RMB
|||||
|-|-|-|-|
||||Amount accounted into|
|Items|Current term|Same period of last term|non-recurring gain/loss of|
||||current term|
|Total of loss from disposal of|181,198.86|303,677.88||
|non-current assets||||
|Incl. Loss from disposal of||||
||181,198.86|303,677.88|181,198.86|
|fixed assets||||
|Donations||110,000.00||
|Penalty paid out|121,140.00|72,168.36|121,140.00|
|Local water source||||
||1,606,344.54|1,509,082.13||
|foundation||||
|Penalties|4,129.58|100.00|4,129.58|
|Other|44,881.67|162,134.52|44,973.39|
|Total|1,957,694.65|2,157,162.89|351,441.83|

Othernotes：
39. Income tax expenses
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 (1) Details
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
|Income tax of current term|10,258,830.52|15,455,703.13|
|Deferred income tax|-13,092,761.86|-4,165,246.93|
|Total|-2,833,931.34|11,290,456.20|

(2) Adjustment process of accounting profit and income tax expenses
In RMB
|||
|-|-|
|Items|Current term|
|Total profit|-29,111,160.91|
|Income tax expenses calculated on legal / applicable tax rate|-4,366,674.14|
|Impact of different tax rates of subsidiaries|-1,276,970.54|
|Impact of income tax adjustment in previous periods|791,497.21|
|Impact of non-taxable income|-288,155.00|
|Impact of un-deductible costs, expenses or losses|163,875.18|
|Impact of deductible temporary difference of un-recognized||
||2,142,495.94|
|deferred income tax asset of current period||
|Income tax expenses|-2,833,931.34|

Other notes
40. Other Comprehensive income
Please find the statement in the notes of consolidated balance sheet.
41. Notes Cash flow statement
(1) Other cash received from business operation
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Deposit interest|2,276,884.34|2,932,337.44|
|Government subsidies received|3,628,381.23|7,253,115.90|
|Deposit for bidding and other|-50,000.00|382,225.60|
|Compensation income|163,534.00||
|Other|668,444.48|1,050,625.36|
|Total|6,687,244.05|11,618,304.30|

Notes：
2. Other cash paid for business activities
In RMB
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Travel expenses|16,226,976.75|11,117,335.44|
|Transportation|3,272,653.84|2,241,434.65|
|Business trips|10,323,734.57|10,258,389.65|
|Maintaining|609,448.28|794,837.37|
|Property management and civil services|3,269,592.99|3,437,124.78|
|Deposit for bidding and others|3,788,086.28|6,037,215.36|
|Office expenses|2,915,351.76|3,460,947.30|
|Conferences|1,286,764.88|1,491,417.75|
|Consulting service fee|7,080,357.89|5,690,876.65|
|Transportation and vehicles|2,377,922.97|2,541,010.58|
|External donation||100,000.00|
|Other|27,694,463.47|20,594,189.36|
|Total|78,845,353.68|67,764,778.89|

Notes：
3. Other investment-related cash received
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Repurchasing of trusteeship|812,150,000.00|718,855,999.95|
|Total|812,150,000.00|718,855,999.95|

Notes：
4. Other cash paid for investment activities
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
|Purchasing of financial products|938,850,000.00|754,555,999.95|
|Total|938,850,000.00|754,555,999.95|

Notes：
42. Supplementary data of cash flow statement
(1) Supplementary data of cash flow statement
In RMB
||||
|-|-|-|
|Supplementary Info.|Amount of the Current Term|Amount of the Previous Term|
|I. Adjusting net profit to cash flow from|||
||--|--|
|operating activities|||
|Net profit|-26,277,229.57|7,533,997.32|
|Add: Impairment loss provision of assets|125,619,636.17|22,650,560.50|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||
|-|-|-|
|Depreciation of fixed assets, oil and gas|||
||41,159,790.67|43,264,971.82|
|assets and consumable biological assets|||
|Amortization of intangible assets|3,663,502.57|3,660,084.07|
|Loss on disposal of fixed assets, intangible|||
||5,418.05|17,462.55|
|assets and other long-term deferred assets|||
|Loss on scrap of fixed assets||286,215.33|
|Financial cost|9,053,563.16|7,181,607.57|
|Loss on investment|-15,045,334.62|-39,231,462.05|
|Decrease of deferred income tax assets|-13,949,461.00|-4,165,246.93|
|Decrease of deferred income tax Liabilities|0.00||
|Decrease of inventories|-408,813,212.52|-462,624,380.00|
|Decease of operating receivables|62,274,426.08|199,800,810.01|
|Increased of operating Payable|437,007,953.96|322,672,780.80|
|Other||774,172.30|
|Net cash flows arising from operating|214,699,052.95|101,821,573.29|
|activities|||
|II. Significant investment and financing|||
||--|--|
|activities that without cash flows:|||
|3．Movement of cash and cash equivalents：|--|--|
|Ending balance of cash|768,360,107.29|556,567,843.18|
|Less: Beginning balance of cash equivalents|751,596,796.24|613,958,063.91|
|Net increase of cash and cash equivalents|16,763,311.05|-57,390,220.73|

（2）Composition of cash and cash equivalents
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|1) Cash|768,360,107.29|751,596,796.24|
|Incl: Cash in stock|313,693.52|330,003.92|
|Bank savings could be used at any time|768,046,413.77|546,521,114.46|
|other monetary funds could be used at any|||
||26,407,482.47|9,716,724.80|
|time|||
|3) Balance of cash and cash equivalents at|768,360,107.29|751,596,796.24|
|end of term、|||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 Othernotes：
43. Foreign currency monetary items
(1) Foreign currency monetary items
In RMB
|||||
|-|-|-|-|
||||Translated to RMB at end of|
|Items|Balance at end of period|Exchange rate||
||||period|
|Monetary capital|--|--|147,859,399.00|
|Incl：USD|21,033,721.82|6.6312|139,478,816.13|
|Euro|141,207.74|7.3750|1,041,407.08|
|HKD|5.51|0.8547|4.71|
|JPY|9,031.00|0.0645|582.42|
|Rupiah|14,559,495,790.69|0.0005|7,337,985.88|
|Ruble|4,750.00|0.1269|602.78|
|Account receivable|--|--|209,639,064.80|
|Incl：USD|24,202,627.39|6.6312|160,492,462.75|
|Euro|6,577,007.51|7.3750|48,505,430.39|
|Rupiah|1,272,165,995.09|0.0005|641,171.66|
|Account payable|||11,138,861.03|
|Incl：USD|1,483,436.06|6.6312|9,836,961.20|
|Euro|34,265.14|7.3750|252,705.41|
|Rupiah|2,081,734,963.57|0.0005|1,049,194.42|

Other notes:
(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.
√ Applicable□Not applicable
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. Equities in Other Entities
(I) Equity in major subsidiaries
1. Composition of major subsidiaries
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||||||
|-|-|-|-|-|-|-|
|||||Share proportion %|||
|Name of the|Main business||||||
|||Reg. Add.|Business property|||Way of obtain|
|subsidiaries|location|||Direct|Indirect||
|Zhejiang Steam|||||||
|Trubine Packaged|||||||
||Hangzhou|Hangzhou|||||
|Technologies|||Manufacturing|70.86%||Incorporation|
||Zhejiang|Zhejiang|||||
|Development Co.,|||||||
|Ltd.|||||||
|Hangzhou|||||||
|Zhongneng Steam|||||||
||Hangzhou|Hangzhou|||||
|Turbine Power|||Manufacturing|60.83%||Incorporation|
||Zhejiang|Zhejiang|||||
|Co., Ltd.|||||||
|(Zhongneng Co.)|||||||
|Hangzhou Steam|||||||
||Hangzhou|Hangzhou|||||
|Turbine Casting|||Manufacturing|51.00%||Incorporation|
||Zhejiang|Zhejiang|||||
|Co., Ltd.|||||||
|Hangzhou Steam|||||||
|Turbine|||||||
||Hangzhou|Hangzhou|||||
|Machinery|||Manufacturing|52.00%||Incorporation|
||Zhejiang|Zhejiang|||||
|Equipment Co.,|||||||
|Ltd.|||||||
|Hangzhou Steam|||||||
|Turbine Auxiliary|||||||
||Hangzhou|Hangzhou|||||
|Machinery Co.,|||Manufacturing|87.53%||Incorporation|
||Zhejiang|Zhejiang|||||
|Ltd. (Auxiliary|||||||
|Machinery Co.)|||||||
|Zhejiang Turbine|||||||
|Import & Export|Hangzhou|Hangzhou|||||
||||Commerce|100.00%||Incorporation|
|Co., Ltd. (Turbine|Zhejiang|Zhejiang|||||
|Co.)|||||||
|Hangzhou Steam|||||||
|Turbine Heavy|||||||
||Hangzhou|Hangzhou|||||
|Industry Co., Ltd.|||Manufacturing|100.00%||Incorporation|
||Zhejiang|Zhejiang|||||
|(Steam Turbine|||||||
|Heavy Industry)|||||||
|Zhejiang|||||||
|Huayuan Steam|||||||
|Turbine|Hangzhou|Hangzhou|||||
||||Manufacturing||75.00%|Incorporation|
|Machinery Co.,|Zhejiang|Zhejiang|||||
|Ltd. (Huayuan|||||||
|Co.)|||||||
|Hangzhou|||||||
||Hangzhou|Hangzhou|||||
|Guoneng Steam|||Manufacturing||75.00%|Incorporation|
||Zhejiang|Zhejiang|||||
|Turbine|||||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||||
|-|-|-|-|-|-|
|Engineering Co.,||||||
|Ltd. (Guoneng||||||
|Co.)||||||
|Xinjiang Taifeng||||||
|Hangzhou Steam||||||
|Turbine Packaged||||||
||Xinjiang|Xinjiang|Manufacturing|51.00%|Incorporation|
|Technology||||||
|Development Co.,||||||
|Ltd.||||||
|Hangzhou Bypass||||||
|Mechanical &||||||
||Hangzhou|Hangzhou||||
|Electrical|||Manufacturing|70.00%|Incorporation|
||Zhejiang|Zhejiang||||
|Equipment Co.,||||||
|Ltd.||||||
|Shijiazhuang||||||
|Hangneng||||||
||Shijiazhuang|Shijiazhuang||||
|Steam Turbine|||Service|60.00%|Incorporation|
||Hebei|Hebei||||
|Technology||||||
|Service Co., Ltd.||||||
|Kunming||||||
|Hangzhong||||||
|Steam Turbine|Kunming Yunnan|Kunming Yunnan|Service|60.00%|Incorporation|
|Technology||||||
|Sevrvice Co., Ltd.||||||
|Wulumuqi||||||
|Hangzhongneng||||||
|Steam Turbine|Qulumuqi|Qulumuqi||||
||||Service|60.00%|Incorporation|
|Technology|Xingjiang|Xingjiang||||
|Sevrvice Co.,||||||
|Ltd.||||||
|Tangshan||||||
|Hangneng Steam||||||
|turbine|Tangshan Hebei|Tangshan Hebei|Service|60.00%|Incorporation|
|Technology||||||
|Sevrvice Co., Ltd.||||||
|Jilin||||||
|Hangzhongneng||||||
||Jilin|Jilin|Service|60.00%|Incorporation|
|Steam turbine||||||
|Technology||||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||||
|-|-|-|-|-|-|
|Sevrvice Co., Ltd.||||||
|Guangxi||||||
|Hangzhongneng||||||
|Steam turbine|Nanning Guangxi|Nanning Guangxi|Service|60.00%|Incorporation|
|Technology||||||
|Sevrvice Co., Ltd.||||||
|Chengdu||||||
|Hangzhongneng||||||
|Steam turbine|Chengdu Sichuan|Chengdu Sichuan|Service|60.00%|Incorporation|
|Technology||||||
|Sevrvice Co., Ltd.||||||
|Luoyang||||||
|Hangzhongneng||||||
|Steam turbine|Luoyang Henan|Luoyang Henan|Service|60.00%|Incorporation|
|Technology||||||
|Sevrvice Co., Ltd.||||||
|Hangzhou Steam||||||
||Hangzhou|Hangzhou||||
|turbine Boiler|||Manufacturing|50.00%|Incorporation|
||Zhejiang|Zhejiang||||
|Co., Ltd.||||||
|Hangzhou||||||
|Zhongneng Steam||||||
|turbine|Indonesia|Indonesia|Manufacturing|70.00%|Incorporation|
|(Indonesia) Co.,||||||
|Ltd.||||||
|Hangzhou||||||
||Hangzhou|Hangzhou||||
|Kaineng Casting|||Manufacturing|100.00%|Incorporation|
||Zhejiang|Zhejiang||||
|Co., Ltd.||||||
|Zhejiang||||||
|Runhong||||||
||Hangzhou|Hangzhou||||
|Burming Machine|||Manufacturing|58.00%|Incorporation|
||Zhejiang|Zhejiang||||
|Engineering Co.,||||||
|Ltd.||||||
|Zhejiang||||||
|Zhongrun||||||
|Burning machine|Huzhou Zhejiang|Huzhou Zhejiang|Manufacturing|55.55%|Incorporation|
|Technology Co.,||||||
|Ltd.||||||

Notes：
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 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.
Basis for holding half or less than half of the voting rights but still controlling the invested unit and basis for holding more than half of the voting rights but failing to control the investedunit：
Basis for control over the important structured entity incorporated in the mergerscope：
Basis for determining whether the Company is an agent or aclient：
（2）Major non-fully-Owned subsidiaries
In RMB
||||||
|-|-|-|-|-|
|||Gains/loss of the period|Dividend announced in|Balance of equity of|
||Share portion of minor||||
|Name of the subsidiaries||attributable to minor|the period to minor|minor shareholders at|
||shareholders||||
|||shareholders|shareholders|end of period|
|Zhejiang Steam Turbine|||||
|Packaged Technology|29.14%|962,856.79|3,715,987.50|30,269,113.29|
|Development Co., Ltd.|||||
|Hangzhou Zhongneng|||||
|Steam turbine Power Co.,|39.17%|-2,615,428.57|3,917,200.00|139,259,317.27|
|Ltd.|||||
|Hangzhou Steam Turbine|||||
||49.00%|1,477,241.92||84,139,799.27|
|Casting Co., Ltd.|||||
|Hangzhou Steam Turbine|||||
|Machinery Equipment|48.00%|9,779,631.78|21,600,000.00|59,141,034.73|
|Co., Ltd.|||||
|Hangzhou Steam Turbine|||||
|Auxiliary Machinery Co.,|12.47%|1,497,543.74|4,988,000.00|26,242,968.02|
|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.
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 (3 Material financial information of major non-fully-owned subsidiaries
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||End of term||||||Beginning of term||||||
|Subsidia|||||||||||||
|||Non-curr|||Non-curr|||Non-curr|||Non-curr||
|ries|Current||Total of|Current||Total of|Current||Total of|Current||Total of|
|||ent|||ent|||ent|||ent||
|Name|assets||assets|liabilities||liability|assets||assets|liabilities||liability|
|||assets|||liabilities|||assets|||liabilities||
|Zhejiang|||||||||||||
|Steam|||||||||||||
|Turbine|||||||||||||
|Package|||||||||||||
|d|265,814,|22,582,1|288,396,|204,707,||204,707,|260,227,|22,709,0|282,936,|190,272,||190,272,|
|Technolo|174.33|30.59|304.92|762.21||762.21|660.63|89.71|750.34|137.49||137.49|
|gy|||||||||||||
|Develop|||||||||||||
|ment|||||||||||||
|Co., Ltd.|||||||||||||
|Hangzho|||||||||||||
|u|||||||||||||
|Zhongne|||||||||||||
||841,582,|78,623,2|920,205,|598,085,|330,000.|598,415,|804,557,|81,590,2|886,147,|548,736,|330,000.|549,066,|
|ng Steam|||||||||||||
||345.96|50.92|596.88|632.89|00|632.89|533.77|68.49|802.26|452.55|00|452.55|
|Turbine|||||||||||||
|PowerCo|||||||||||||
|., Ltd.|||||||||||||
|Hangzho|||||||||||||
|u Steam|||||||||||||
||244,312,|194,819,|439,132,|237,664,|29,754,4|267,418,|223,797,|199,438,|423,235,|224,664,|29,754,4|254,419,|
|Turbine|||||||||||||
||746.07|922.27|668.34|337.27|55.00|792.27|190.85|595.78|786.63|623.52|55.00|078.52|
|Casting|||||||||||||
|Co., Ltd.|||||||||||||
|Hangzho|||||||||||||
|u Steam|||||||||||||
|Turbine|||||||||||||
|Machine|189,742,|20,637,7|210,380,|87,170,1||87,170,1|185,381,|21,333,2|206,715,|59,276,5||59,276,5|
|ry|963.43|15.34|678.77|89.74||89.74|983.06|75.97|259.03|95.83||95.83|
|Equipme|||||||||||||
|nt Co.,|||||||||||||
|Ltd.|||||||||||||
|Hangzho|||||||||||||
|u Steam|||||||||||||
||390,104,|118,381,|508,485,|297,610,|427,720.|298,038,|400,114,|112,067,|512,182,|272,629,|427,720.|273,057,|
|Turbine|||||||||||||
||636.87|299.13|936.00|419.70|00|139.70|948.24|629.68|577.92|536.63|00|256.63|
|Auxiliar|||||||||||||
|y|||||||||||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||
|-|
|Machine|
|ry Co.,|
|Ltd.|

In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Amount of current period||||Amount of previous period||||
|Subsidiaries|||||||||
|||||Cash flow for||||Cash flow for|
|Name|||Total Misc||||Total Misc||
||Turnover|Net profit||business|Turnover|Net profit||business|
||||Gains||||Gains||
|||||activities||||activities|
|Zhejiang|||||||||
|Steam|||||||||
|Turbine|||||||||
||83,612,988.7|||16,927,682.5|87,432,537.3|10,039,415.1|10,039,415.1|26,392,803.8|
|Packaged||3,773,929.86|3,773,929.86||||||
||3|||6|3|9|9|9|
|Technology|||||||||
|Development|||||||||
|Co., Ltd|||||||||
|Hangzhou|||||||||
|Zhongneng|||||||||
||341,837,358.|||24,130,671.6|250,704,039.|||26,860,273.9|
|Steam turbine||-5,746,192.61|-5,746,192.61|||5,081,221.70|5,081,221.70||
||58|||9|65|||7|
|Power Co.,|||||||||
|Ltd.|||||||||
|Hangzhou|||||||||
|Steam|||||||||
||154,101,020.||||130,950,701.|||29,891,575.9|
|Turbine||3,014,779.43|3,014,779.43|-7,002,715.11||-1,208,396.38|-1,208,396.38||
||08||||52|||7|
|Casting Co.,|||||||||
|Ltd.|||||||||
|Hangzhou|||||||||
|Steam|||||||||
|Turbine|87,048,057.7|20,374,232.8|20,374,232.8|20,967,344.3|91,266,078.2|22,850,938.2|22,850,938.2||
|||||||||4,760,780.86|
|Machinery|3|8|8|3|2|8|8||
|Equipment|||||||||
|Co., Ltd.|||||||||
|Hangzhou|||||||||
|Steam|||||||||
|Turbine|170,532,221.|12,008,146.9|12,008,146.9|20,063,610.0|198,271,553.|23,144,009.0|23,144,009.0||
|||||||||8,070,920.62|
|Auxiliary|25|0|0|4|26|0|0||
|Machinery|||||||||
|Co., Ltd.|||||||||

Notes：
IX. Risks related to financial instruments
X. Risks related to financial instruments
The objective of theCompany’s risk management is to achieve a balance between the risk and gains. Constrain
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 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 June 30,2016, the credit risks feature collectiveness within the Company.41.80% 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 notimpaired|||Total|
|||Within 1 year|1-2 years|Over 2years||
|Bill receivable|545,123,313.54||||545,123,313.54|
|Subtotal|545,123,313.54||||545,123,313.54|
|(Continue)||||||
|Items|Beginning of term|||||
|||Overdue but not impaired|||Total|
|||Within 1 year|1-2 years|Over 2years||
|Bill receivable|680,518,943.49||||680,518,943.49|
|Subtotal|680,518,943.49||||680,518,943.49|

Categorizing of financial liabilities on remained period to due
|||
|-|-|
|Items|Beginning of term|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||||
|-|-|-|-|-|-|
||Book value|Contract amount notdiscounted|within 1 year|1-3 years|Over 3years|
|Financial liabilities|81,|||||
|Short-term loans|81,250,000.00|84,615,643.58|84,615,643.58|||
|Notes payable|198,065,752.08|198,065,752.08|198,065,752.08|||
|Non-currentliabilities duewithin one year|200,000.00|204,158.00|204,158.00|||
|Long-term loans|123,400,000.00|131,010,268.00|211,718.00|130,798,550.00||
|Account payable|1,059,189,681.62|1,059,189,681.62|1,059,189,681.62|||
|Other accountpayable|24,571,382.36|24,571,382.36|24,571,382.36|||
|Sub-total|1,486,676,816.06|1,497,656,885.64|1,366,858,335.64|130,798,550.00||

（Continue）
|||||||
|-|-|-|-|-|-|
|Items|Beginning of term|||||
||Book value|Contract amount notdiscounted|within 1 year|1-3 years|Over 3years|
|Financial liabilities||||||
|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 duewithin one year|300,000.00|331,550.05|331,550.05|||
|Long-term loans|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|||
|Sub-total|1,243,401,556.69|1,266,958,449.94|1,124,285,644.58|142,672,805.36||

 (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
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 output.
Categorizing of financial liabilities on remained period to due
(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.
2. Foreign currency risks
Foreign currency risks (exchange rate risks) are those caused by change of fair value or expectable cash flow of financial instruments due to fluctuation of exchange rates. These risks are mainly related to foreign currency assets and liabilities. The Company operates in mainland China and mostly uses RMB as standard currency, therefore no major risks regarding exchange rates.
For details of foreign currency assets and liabilities, please go to the descriptions in the notes to the consolidated financial statements.
X. Related parties and related transactions
1.Parent company of the Company
|||||||
|-|-|-|-|-|-|
|Name of the parent||||Shareholding of the|Voting rights of the|
||Reg.Add|Business property|Registered capital|||
|Company||||parent company|parent Company %|
|Hangzhou Steam||||||
||Hangzhou China|Manufacturing|RMB 800 million|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,
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 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.。
Othernotes：
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., Ltd.|Affiliate of the Group|
|Hangzhou Hangfa Power Generating Equipment Co., Ltd.|Affiliate of the Group|
|Hangzhou Nanfangtongda Gears Co., Ltd.|Affiliate of the Group|
|Hangzhou Nanhua Wooden Packaging Co., Ltd.|Affiliate of the Group|
|Hangzhou Steam Turbine Industrial Co., Ltd.|Affiliate of the Group|
|Hangzhou Steam Turbine Power Technologies Co., Ltd.|Affiliate of the Group|
|HSTG Technology Association|Affiliate of the Group|
|Hangzhou Steam Turbine Engineering Co., Ltd.|Affiliate of the Group|
|Hangzhou Steam Turbine Power Group Complete Equipment||
||Affiliate of the Group|
|Engineering Co., Ltd.||
|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|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||
|-|-|
|Greenesol Co.(India)|Affiliates of the auxiliary Co|

Notes
4.Related transaction
(1) Sale of goods/rendering of labor services/labor service offering
Purchase of goods and service
In RMB
|||||||
|-|-|-|-|-|-|
||||Trading limit|Over the trading limit||
|Related parties|Content|Reporting period|||Prior period|
||||approved|or not||
|Hangzhou Steam||||||
|turbine Automobile|Transportation ,|||||
|||22,025,165.68|22,025,165.68|No|26,837,296.97|
|sales service Co.,|repair , etc.|||||
|Ltd.||||||
|Hangzhou Hangfa||||||
|Power Generating|Generators|66,620,352.11|66,620,352.11|No|38,940,170.91|
|Equipment Co., Ltd.||||||
|Hangzhou Nanhua||||||
|Wooden Packaging|Packaging|7,597,558.46|7,597,558.46|No|4,800,810.58|
|Co., Ltd.||||||
|Hangzhou Nanfang||||||
|Tongda Gears Co.,|Gear boxes|1,806,463.25|1,806,463.25|No|1,046,126.50|
|Ltd.||||||
|Hangzhou Steam|Law material,|||||
|Turbine Industrial|Industrial|640,102.34|640,102.34|No|973,521.04|
|Co., Ltd.|cooperation|||||
|Hangzhou Steam||||||
||Water and|||||
|Turbine Group Co.,||6,699,607.87|6,699,607.87|No|6,473,823.78|
||electricity|||||
|Ltd.||||||
|HSTG Technology|Industrial|||||
||||||169,230.76|
|Association|cooperation|||||
|Greenesol||||||
||Generators||||25,380,594.36|
|Co.(India)||||||
|HSTG (Hangzhou)||||||
|United Institutes|Technical service|277,500.00|277,500.00|No||
|Co., Ltd.||||||
|Hangzhou Steam||||||
|Turbine||||||
||Project design fee|2,420,773.08|2,420,773.08|No||
|Engineering Co.,||||||
|Ltd||||||
|Hangzhou Steam||||||
||Law material||||770,000.00|
|Turbine Electronic||||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||||
|-|-|-|-|-|-|
|Tube Co., Ltd||||||
|Hangzhou Wandong|Industrial|||||
|||13,333.33|13,333.33|No||
|Electric Co., Ltd|cooperation|||||
|Subtotal||108,100,856.11|108,100,856.11||105,391,574.90|

 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|Cast part, industrial|||
|||5,447,419.07|6,359,396.39|
|Generating Equipment Co.,Ltd.|cooperation|||
|Hangzhou Steam Turbine||||
||Steam turbine|136,752.14|3,447,863.25|
|Engineering Co., Ltd.||||
|Hangzhou Steam Turbine||||
|Automobile Sales Service Co.,|Small amount materials|376.09|250.03|
|Ltd.||||
|Hangzhou Nanhua Wooden||||
||Small amount materials||854.70|
|Packaging Co., Ltd||||
|Greenesol Co.(India)|Steam turbine|1,664,712.44|1,101,423.11|
|Hangzhou Steam Turbine|Compressor, Industrial|||
|||76,923.08|70,050.00|
|Compressor Co., Ltd.|cooperation|||
|HSTG Technology Association|Industrial cooperation||136,923.08|
|Hangzhou Steam Turbine||||
|Power Group Complete||||
||Steam Turbine||-531,623.94|
|Equipment Engineering Co.,||||
|Ltd.||||
|Subtotal||7,326,182.82|10,585,136.62|

Notes
（2）Information of related lease
The Company was lessor
In RMB
|||||
|-|-|-|-|
|||The lease income confirmed in|The lease income confirmed in|
|Name of lessee|Category of lease assets|||
|||this year|last year|
|Hangzhou Steam Turbine||||
||Office||70,050.00|
|Compressor Co., Ltd.||||

The company was lessee
In RMB
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||
|-|-|-|-|
|||The lease income confirmed in||
|Lessor|Category of leased assets||Category of leased assets|
|||this year||
|Hangzhou Steam Turbine||||
||House and Building|474,116.80|989,013.38|
|Power Group Co., Ltd.||||
|Hangzhou Steam Turbine||||
|Automobile Sales Service Co.,|Site leasing|782,514.62|3,611,046.39|
|Ltd.||||
|Subtotal||1,256,631.42|4,600,059.77|

Notes
（3）Related-party guarantee
The Company was secured party
In RMB
||||||
|-|-|-|-|-|
|The Company was|||||
|||||Execution accomplished|
|secured party|Guarantee amount|Start date|End date||
|||||or not|

The Company was guarantor
In RMB
||||||
|-|-|-|-|-|
|||||Execution accomplished|
|The Guarantor|Guarantee amount|Start date|End date||
|||||or not|
|Hangzhou Steam Turbine|||||
||100,000,000.00|December 18,2015|December 17,2017|No|
|Group|||||

Notes
（4）Remunerations of key managements
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
|Remunerations of key managements|||
||2,269,038.36|2,819,750.04|

(5) Other related transactions
(1) Service and power supply
HSTG supplies water and power to the Company and some of the subsidiaries amounted to RMB6,699,607.87 this period. Hangzhou Steam Turbine Automobile Sales& Service Co., Ltd. provided transportation to theCompany’s employees and RMB1,163,700 was paid this period. Hangzhou Steam Turbine Industry Co., Ltd. provided cleaning services to the Company and RMB649,999 was paid this period.
(2) Expenses paid on behalf the Company
Hangzhou Steam Turbine Automobile Sales& Service Co., Ltd. paid RMB3,273,754.06 of tarrif on behalf of
Turbine Co. during the period.
5. Receivables and payables of related parties
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016（1）Receivables
In RMB
|||||||
|-|-|-|-|-|-|
|||End of term||Beginning of term||
|Name|Related party|||||
|||Book balance|Bad debt provision|Book balance|Bad debt provision|
||Hangzhou Steam|||||
|Account receivable|Turbine Engineering|49,443,305.99|4,645,744.80|49,710,305.99|3,657,185.10|
||Co., Ltd.|||||
||Hangzhou Hangfa|||||
||Power Generating|18,158,771.60|1,219,227.16|16,174,291.35|972,428.47|
||Equipment Co., Ltd.|||||
||Hangzhou Steam|||||
||Turbine Power|||||
||Group Complete|||||
|||310,060.00|186,036.00|310,060.00|186,036.00|
||Equipment|||||
||Engineering Co.,|||||
||Ltd.|||||
||Hangzhou Steam|||||
||Turbine Compressor|59,000.00|2,950.00|236,000.00|11,800.00|
||Co., Ltd.|||||
||Hangzhou Steam|||||
||Turbine Power|158,500.00|158,500.00|258,500.00|163,500.00|
||Group Co., Ltd.|||||
||Hangzhou Steam|||||
||Turbine Automobile|||||
|||||16.48|0.82|
||Sales Service Co.,|||||
||Ltd.|||||
||Greenesol Co.(India)|9,787,366.91|1,317,871.44|14,642,682.67|8,785,609.60|
|Subtotal||77,917,004.50|7,530,329.40|81,331,356.49|13,776,059.99|
||Hangzhou Steam|||||
|Prepayment|Turbine Engineering|2,340,000.00||2,270,000.00||
||Co., Ltd.|||||
||Hangzhou Hangfa|||||
||Power Generating|23,444,325.00||26,834,825.00||
||Equipment Co., Ltd.|||||
||Hangzhou Nanfang|||||
||Tongda Gears Co.,|89,200.00||||
||Ltd.|||||
|Subtotal||25,873,525.00||29,104,825.00||

（2）Payables
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 In RMB
|||||
|-|-|-|-|
|Name|Related party|Amount at year|Amount at year beginning|
||Hangzhou Hangfa Power|||
|Account payable||110,977,555.02|100,434,643.05|
||Generating Equipment Co., Ltd.|||
||Greenesol Co.(India)|9,059,276.95|8,495,882.02|
||Hangzhou Steam Turbine|||
|||1,740,622.57|5,251,995.90|
||Power Group Co., Ltd.|||
||Hangzhou Steam Turbine|||
||Automobile Sales Service Co.,|895,770.30|2,737,416.93|
||Ltd|||
||Hangzhou Nanhua Wooden|||
|||1,983,010.17|404,433.00|
||Packaging Co., Ltd.|||
||Hangzhou Steam Turbine|||
|||1,860,000.00|380,000.00|
||Engineering Co., Ltd.|||
||HSTG (Hangzhou) United|||
|||101,175.00|153,000.00|
||Institutes Co., Ltd.|||
||Hangzhou Nanfang Tongda|||
|||1,704,800.00|112,273.00|
||Gears Co., Ltd.|||
||Hangzhou Steam Turbine|||
|||252,316.50|8,440.00|
||Industrial Co., Ltd.|||
|Subtotal||128,574,526.51|117,978,083.90|
||Hangzhou Steam Turbine|||
|Advances received||65,967,420.00|55,573,740.00|
||Engineering Co., Ltd.|||
||Hangzhou Steam Turbine|||
|||14,190,000.00|14,235,000.00|
||Compressor Co., Ltd.|||
||Greenesol Co.(India)|582,415.04||
|Subtotal||80,739,835.04|69,808,740.00|
||Hangzhou Steam Turbine|||
|Other account payable||6,828,737.55|6,050,024.82|
||Group|||
||Hangzhou Steam Turbine|||
||Automobile Sales Service Co.,|100,000.00||
||Ltd.|||
|Subtotal||6,928,737.55|6,050,024.82|

XI. Other Material Issues
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;
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 (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.
2..Other important impact on investor decision-making transactions and events
XII. Notes to the Financial Statements of the Parent Co.
1. Account receivable
（1）Detailed categories
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||End of term|||||Beginning of term|||||
||Book balance||Bad debt provisionProportioAmountn|||Book balance||Bad debt provision|||
|Category|||||Book||||||
||Amount|Proportio|||||Proportio|||Book value|
||||Amount||value|Amount||Amount|Proportion||
|||n|||||n||||
|Account receivables|2,183,248,730.63|||32.59%,|||||||
|||||||2,236,8|||||
|provided bad debt|||711,425,||1,471,822|||599,432,1||1,637,391,6|
|||98.65%||||23,799.|98.68%||26.80%||
|provision in credit|||941.13||789.50|||26.23||72.98|
|||||||21|||||
|risk groups|||||||||||
|Account receivable|29,819,607.69||||||||||
|with minor individual|||29,819,6|||29,819,||29,819,60|||
|||1.35%||100.00%|||1.32%||100.00%||
|amount but bad debt|||07.69|||607.69||7.69|||
|provision is provided|||||||||||
||2,213,068,338.32|||33.49%,|1,471,822789.50|2,266,6||||1,637,391,672.98|
||||741,245,|||||629,251,7|||
|Total||100.00%||||43,406.|100.00%||27.76%||
||||548.82|||||33.92|||
|||||||90|||||

Receivables with individually significant amount and provision for bad and doubtful debts individually provided at the end of the reporting period.
□ Applicable√Not applicable
Receivable accounts in the group on which bad debt provisions are provided on age basis
√ Applicable□Not applicable
In RMB
|||||
|-|-|-|-|
||End of term|||
|Aging||||
||Other receivable account|Bad debt provision|Proportion%|
|Subitem within 1 year||||
|Within 1 year|527,743,846.17|26,387,192.31|5.00%|
|Subtotal within 1 year|527,743,846.17|26,387,192.31|5.00%|
|1-2 years|406,874,447.40|40,687,444.74|10.00%|
|2-3 years|474,080,455.10|142,224,136.53|30.00%|
|Over 3 years|638,497,510.07|502,127,167.55|78.64%|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
|||||
|-|-|-|-|
|3-4 years|221,636,315.11|132,981,789.07|60.00%|
|4-5 years|238,579,082.35|190,863,265.87|80.00%|
|Over 5 years|178,282,112.61|178,282,112.61|100.00%|
|Total|2,047,196,258.74|711,425,941.13||

Receivable accounts combined within consolidating range for providing of bad debt provisions
|||||
|-|-|-|-|
|Name|End of termBook balance Bad debt provision Providing rate %|||
|||Bad debt provision|Providing rate %|
|Combinations of relatedtransactions in consolidationrange|136,052,471.89|||
|Subtotal|136,052,471.89|||

Remarks on deciding of combinations:
Receivable accounts and other receivable accounts within the consolidation range are tested for impairment individually. No bad debt provision is provided in case there is no impairment occurred.
Receivables with provision for bad and doubtful debts based on the balance percentage method in the portfolio Not applicable
Receivables with provision for bad and doubtful debts based on the other method in the portfolio
（2）Top 5 of the closing balance of the accounts receivable collated according to the arrears party
|||||||
|-|-|-|-|-|-|
||||||Provision for bad|
|Name|Nature|Book balance|Aging|Proportion%||
||||||debts|
|Clients 1|Goods|731,099,586.92|1-9 years|33.02%|248,033,881.74|
|Clients 2|Goods|348,865,840.80|1-9 years|15.76%|155,544,016.8|
|Clients 3|Goods|38,934,865.99|1-3 years|1.76%|2,179,9.80|
|Clients 4|Goods|35,773,604.12|1 year|1.62%|1,788,680.21|
|Clients 5|Goods|19,379,54.30|1 year|0.88%|968,975.22|
|Total||1,174,053,42.13||53.03%|408,514,563.75|

 2. Other account receivable
(1) Detailed categories
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||End of term|||||Beginning of term|||||
||Book balance||Bad debt provisionProportiovAmountn|||Book balance||Bad debt provision|||
|Category|||||Book||||||
||Amount|Proportion|||||Proportio|||Book value|
||||Amount||alue|Amount||Amount|Proportion||
||||||||n||||
|Other receivables|9,558,653.28|72.04%||721.71%.|||||||
|provided bad debt|||2,074,89||,483,761|14,390,||2,145,188||12,245,371.|
||||||||79.50%||14.91%||
|provision in credit|||2.22||06|560.25||.28||97|
|risk groups|||||||||||
|Other account|||||||||||
||3,710,32|27.96%|3,710,32|100.00%||3,710,3|20.50%|3,710,320|100.00%||
|receivable with|||||||||||

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|minor individual|0.94||0.94|||20.94||.94|||
|amount but bad debt|||||||||||
|provision is provided|||||||||||
||13,268,9174.22||5,785,21||7,483,761.06|18,100,||5,855,509||12,245,371.97|
|Total||00.00%||43.60%|||100.00%||32.35%||
||||3.16|||881.19||.22|||

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|2,726,390.34|136,319.51|5.00%|
|Subtotal within 1 year|2,726,390.34|136,319.51|5.00%|
|1-2 years|2,785,526.90|278,552.69|10.00%|
|2-3 years|1,439,004.72|431,701.42|30.00%|
|Over 3 years|1,518,355.40|1,228,318.60|80.90%|
|3-4 years|428,692.00|257,215.20|60.00%|
|4-5 years|592,800.00|474,240.00|80.00%|
|Over 5 years|496,863.40|496,863.40|100.00%|
|Total|8,469,277.36|2,074,892.22||

Receivable accounts combined within consolidating range for providing of bad debt provisions
|||||
|-|-|-|-|
|Name|End of term|||
||Book balance|Bad debt provision|Providing rate %|
|Combinations of relatedtransactions in consolidationrange|1,089,375.92|||
|Subtotal|1,089,375.92|||

Remarks on deciding of combinations:
Receivable accounts and other receivable accounts within the consolidation range are tested for impairment individually. No bad debt provision is provided in case there is no impairment occurred.
Other receivables with provision for bad and doubtful debts based on the balance percentage method in the portfolio
Not applicable
Other receivables with provision for bad and doubtful debts based on the other method in the portfolio
Not applicable
（2） Combination of other receivable accounts
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 In RMB
||||
|-|-|-|
|Account property|End of term|Beginning of term|
|Deposit|6,671,833.00|10,737,764.50|
|Provisional payment receivable|5,939,471.74|7,281,453.09|
|Petty cash|479,000.00|66,000.00|
|Other|178,669.48|15,663.60|
|Total|13,268,974.22|18,100,881.19|

（3）Top 5 of the closing balance of Other accounts receivable collated according to the arrears party
In RMB
|||||||
|-|-|-|-|-|-|
|||||Percentage in total||
|Name of the company|Account property|Book balance|Age||Bad debt provision|
|||||other receivable %||
|Shanghai Customs||||||
||Import CNC lathe|3,710,320.94|Over 5 years|27.96%|3,710,320.94|
|Waigaoqiao Office||||||
||Back pressure|||||
||turbine project of|||||
|Guodian Trust||||||
||Datang International|500,017.00|1 year|3.77%|25,000.85|
|Bidding Co., Ltd.||||||
||Zhangjiakou power|||||
||plant|||||
|Beijing Guodian||||||
|Engineering Bidding|Taizhou Project|500,000.00|5 years|3.77%|400,000.00|
|Co., Ltd.||||||
|Guodian Longyuan|Inner Mongolia|||||
|Power Technology|Wusitai Thermal|500,000.00|3 years|3.77%|150,000.00|
|Engineering Co., Ltd.|Power project|||||
||Jian2*50MWsteam|||||
|Jian Group Co., Ltd.||500,000.00|2 years|3.77%|50,000.00|
||Turbine Project|||||
|Total|--|5,710,337.94|--|43.04%|4,335,321.79|

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

（1）Investment to the subsidiary
In RMB
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||||||||
|-|-|-|-|-|-|-|
||||||Withdrawn||
|||||||Closing balance|
||||||impairment||
|Name|Opening balance|Increase|Decrease|Closing balance||of impairment|
||||||provision in the||
|||||||provision|
||||||reporting period||
|Touping Imports &|||||||
||20,000,000.00|||20,000,000.00|||
|Exports Co.|||||||
|Heavy Industry|||||||
||360,000,000.00|||360,000,000.00|||
|Co.|||||||
|Auxiliary Machine|||||||
||46,286,513.41|||46,286,513.41|||
|Co|||||||
|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|||||
||Revenue|Cost|Revenue|Cost|
|Main business|865,641,911.52|540,221,337.74|605,562,263.07|411,394,602.32|
|Other business|8,058,477.84|5,896,004.22|15,011,785.21|13,842,788.87|
|Total|873,700,389.36|546,117,341.96|620,574,048.28|425,237,391.19|

Othernotes：
5.Investment income
In RMB
||||
|-|-|-|
||Amount of current period|Amount of previous period|
|Items|||
|Investment income form holding|||
||2,587,659.70||
|available-for-sale equity instrument|||
|Long-term equity investment income by|||
||73,528,812.50|146,450,783.00|
|Cost method|||
|Investment income of financial products|2,697,347.51|438,410.96|
|Total|78,813,819.71|146,889,193.96|

6.Other
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 XIII. Supplement information
1. Particulars about current non-recurring gains and loss
In RMB
||||
|-|-|-|
|Items|Amount|Notes|
|Gains/losses from the disposal of|||
||-163,899.82||
|non-current asset|||
|Governmental subsidy calculated into|||
|current gains and loess（while closely related|||
|with the normal business of the Company,|||
||318,530.00||
|excluding the fixed-amount or|||
|fixed-proportion governmental subsidy|||
|according to the unified national standard）|||
|Gains and losses from change of fair values|||
|of held-for-transaction financial assets and|||
|financial liabilities except for the effective|||
|hedge business related to normal business of|||
||11,457,674.92||
|the Company, and investment income from|||
|disposal of transactional financial assets and|||
|liabilities and financial assets available for|||
|sale|||
|Other non-business income and expenditures|||
||6,338,781.73||
|other than the above|||
|Less: Influenced amount of income tax|3,485,076.88||
|Amount of influence of minority interests|2,239,933.81||
|Total|12,226,076.14|--|

For theCompany’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on
information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as recurring gains and losses, it is necessary to explain the reason.
Not applicable
2. Return on equity (ROE) and earnings per share (EPS)
|||||
|-|-|-|-|
|||EPS（Yuan/share）||
|Profit as of reporting period|Weighted average ROE (%)|||
|||EPS-basic|EPS-diluted|
|Net profit attributable to common||-0.04|-0.04|
||-0.74%|||
|shareholders of the Company||||
|Net profit attributable to common|-1.03%|-0.060|-0.060|

Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016
||
|-|
|shareholders of the Company after|
|deduction of non-recurring profit|
|and loss|

3.The differences between domestic and international accounting standards
(1) Differences between the net profit and net asset in the financial reports prepared under IAS and Chinese Accounting Standard
Not applicable
(2) Differences between the net profit and net asset in the financial reports prepared under IAS and Chinese Accounting Standard
Not applicable
4.Other
Hangzhou Steam Turbine Co., Ltd. Semi-Annual Report 2016 X. Documents for Reference
(I) Financial Statements signed and sealed by the Chairman of the Board , chief accountant and director of the financial division;
(II) All the originals of theCompany’s documents and public notices disclosed in the newspapers
designated by China Securities Regulatory Commission in the report period;
(III) Original copy of Resolutions of the 3rd Meeting of the 7th Term of Board.
Hangzhou Steam Turbine Co., Ltd.
Chairman of the Board: Zheng Bin
August 13, 2016