GOLDWIND SCIENCE&TECHNOLOGY CO., LTD. - Interim / Quarterly Report 2017

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Innovating for a Brighter Tomorrow

INTERIM REPORT 2017

Definitions	02
Corporate Information	06
Management Discussion and Analysis	07
Other Information	28
Report on Review of Interim Condensed Consolidated Financial Statements	34
Interim Condensed Consolidated Statement of Comprehensive Income	35
Interim Condensed Consolidated Statement of Financial Position	37
Interim Condensed Consolidated Statement of Changes in Equity	39
Interim Condensed Consolidated Statement of Cash Flows	40
Notes to Interim Condensed Consolidated Financial Statements	42

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Definitions

In this interim report, the following expressions have the following meanings unless the context requires otherwise:

“2016 AGM” annual general meeting of the Company for the year of 2016 held on 28 June 2017; “A Shares” ordinary shares issued by the Company, with RMB-denominated par value of RMB1.00 each, which are listed on the SZSE and traded in RMB; “ A Shareholders” the holders of the A Shares; “Articles” the Articles of Association of the Company, as amended, modified or otherwise supplemented from time to time; “associate” has the meaning as ascribed in the Listing Rules; “attributable capacity” represents the capacity attributed to the Group calculated by multiplying the Group’s percentage ownership in a power project by the total capacity of such power project; “Audit Committee” the audit committee of the Board of the Company; “availability rate” a percentage calculated by dividing the amount of time a WTG is not experiencing technical defaults over a certain period by the amount of time in such period; “Beijing Tianrun” Beijing Tianrun New Energy Investment Co., Ltd.（北京天潤新能投資有限公司）, a company incorporated under the laws of the PRC on 11 April 2007 and a wholly owned subsidiary of the Company; “Beijing Tianyuan” Beijing Tianyuan Science & Creation Wind Power Technology Co., Ltd.（北京天源科創風電技術有限責任公司）, a company incorporated under the laws of the PRC on 29 September 2005 and a wholly owned subsidiary of the Company; “Board” the board of directors of the Company; “Board Committees” specialised committees of the Board established by the Board and include members of the Board, namely the Audit Committee, Nomination Committee, Remuneration and Assessment Committee, and Strategic Committee; “CASBE” China Accounting Standards for Business Enterprises; “Chairman” the chairman of the Board; “chief executive” has the meaning as ascribed in the Listing Rules;

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Definitions

“China” or “PRC” the People’s Republic of China. References in this interim report to the PRC exclude Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan; “China Three Gorges” China Three Gorges Corporation（中國長江三峽集團公司）, a company incorporated under the laws of the PRC and the parent company of China Three Gorges New Energy; “China Three Gorges New China Three Gorges New Energy Co., Ltd.（中國三峽新能源有限公司）, a Energy” company incorporated under the laws of the PRC, a wholly-owned subsidiary of China Three Gorges, and a substantial shareholder of the Company; “Company” Xinjiang Goldwind Science & Technology Co., Ltd.（新疆金風科技股份有限公司）; “connected person” has the meaning as ascribed in the Listing Rules; “Connected Persons Group” a group of connected persons of the Company comprising China Three Gorges New Energy, Xinjiang Wind Power, and their respective associates; “Corporate Governance Code” Corporate Governance Code and Corporate Governance Report, as set out in Appendix 14 of the Listing Rules; “CSRC” China Securities Regulatory Commission（中國證券監督管理委員會）; “DDPM” direct-drive permanent magnet, a technology that combines a) a drive-train concept in which the need for a gearbox is eliminated and the turbine rotor directly drives the generator rotor; and b) a synchronous generator in which permanent magnet is used on the generator; “Directors” the directors of the Company; “Financial Statements” the condensed consolidated financial statements of the Group for the six months ended 30 June 2017, prepared in accordance with IFRSs; “gearing ratio” net debt divided by the sum of capital and net debt; “Group”, “Goldwind”, the Company and its subsidiaries; “us” or “we” “GW” gigawatt, a unit of power, 1GW equals 1,000MW; “H Shares” ordinary shares issued by the Company, with RMB-denominated par value of RMB1.00 each, which are listed on the Stock Exchange and traded in HKD; “H Shareholders” the holders of the H Shares;

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Definitions

“HKD” Hong Kong dollars, the lawful currency of Hong Kong; “Hong Kong” the Hong Kong Special Administrative Region of the PRC; “IFRSs” International Financial Reporting Standards; “kW” kilowatt, a unit of power, 1kW equals 1,000 watts; “kWh” kilowatt hour, the unit of measurement for calculating the quantity of power production output. 1kWh is the work completed by a kilowatt generator running continuously for one hour at the rated output capacity; “Latest Practicable Date” 9 September 2017, being the latest practicable date prior to the publication of this interim report for ascertaining certain information contained in this report; “Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited; “Model Code” the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules; “MW” megawatt, a unit of power, 1MW equals 1,000kW; “NEA” National Energy Administration of the PRC（中國國家能源局）; “NDRC” National Development and Reform Commission of the PRC（中國國家發展和改革委員會）; “President” the president of the Company; “R&D” research and development; “RMB” Renminbi, the lawful currency of the PRC; “Senior Management” the members of the senior management of the Company; “SFC” the Securities and Futures Commission of Hong Kong; “SFO” the Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong, as amended, supplemented or otherwise modified from time to time; “Shareholders” shareholders of the Company; “State Council” the State Council of the PRC（中華人民共和國國務院）;

04 Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Definitions

“Stock Exchange” The Stock Exchange of Hong Kong Limited; “subsidiary” has the meaning as ascribed in the Listing Rules; “Supervisors” the supervisors of the Company; “Supervisory Committee” the supervisory committee of the Company; “SZSE” Shenzhen Stock Exchange; “Three-North region” China’s Three-North region, which includes northeast, northwest and northern China; “Wind Farm Investment and the Group’s Wind Farm Investment and Development segment, one of the three Development” primary business segments of the Group; “Wind Power Services” the Group’s Wind Power Services business segment, one of the three primary business segments of the Group; “WTG” wind turbine generator; “WTG Manufacturing” the Group’s WTG R&D, Manufacturing and Sales business segment, the core business of the Group and one of the three primary business segments of the Group; “Xinjiang” the Xinjiang Uyghur Autonomous Region of the PRC; “Xinjiang Wind Power” Xinjiang Wind Power Co., Ltd.（新疆風能有限責任公司）, a state-owned enterprise incorporated under the laws of the PRC and a substantial shareholder of the Company; “YoY” year-over-year, a method of evaluating two or more measured events to compare the results at one time period with those from another time period on an annualised basis; and “%” percent, in this interim report, calculations of percentage shall be based on the financial data contained in the Financial Statements including the relevant notes (where applicable).

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Corporate Information

BOARD OF DIRECTORS

Executive Directors

Mr. Wu Gang (Chairman) Mr. Wang Haibo Mr. Cao Zhigang

AUDITORS

International Auditors

Ernst & Young

PRC Auditors

Ernst & Young Hua Ming LLP

Non-executive Directors

Mr. Zhao Guoqing Mr. Feng Wei Mr. Gao Jianjun

Independent Non-executive Directors

Mr. Yang Xiaosheng Mr. Luo Zhenbang Dr. Tin Yau Kelvin Wong

SUPERVISORS

Mr. Wang Mengqiu (Chairman of the Supervisory Committee) Mr. Luo Jun Ms. Xiao Hong Mr. Lu Min Ms. Ji Tian

COMPANY SECRETARY

Ms. Ma Jinru

PLACE OF BUSINESS

In the PRC

No. 107 Shanghai Road Economic & Technological Development District Urumqi, Xinjiang

In Hong Kong

Edinburgh Tower, 33/F The Landmark 15 Queen’s Road Central Hong Kong

LEGAL COUNSEL

Morrison & Foerster

LISTING PLACES

H Shares: The Stock Exchange of Hong Kong Limited Stock name: Goldwind Stock code: 2208

A Shares: Shenzhen Stock Exchange Stock name: Goldwind Stock code: 002202

SHARE REGISTRARS

H Shares: Computershare Hong Kong Investor Services Limited A Shares: China Securities Depository and Clearing Corporation Limited, Shenzhen Branch

PRINCIPAL BANKS

China Development Bank Corporation Bank of China Limited, Xinjiang Branch China Construction Bank Corporation, Xinjiang Branch Agricultural Bank of China Limited, Xinjiang Branch Industrial and Commercial Bank of China Limited, Xinjiang Branch Export-Import Bank of China, Xinjiang Branch Postal Savings Bank of China, Xinjiang Branch Bank of Communications Co., Ltd., Xinjiang Branch Industrial Bank Co., Ltd., Urumqi Branch China Merchants Bank Co., Ltd., Urumqi Branch, Jiefang North Road Sub-Branch HSBC Bank (China) Co., Ltd., Beijing Branch Deutsche Bank (China) Co., Ltd., Beijing Branch China CITIC Bank Corporation Limited, Urumqi Branch Shanghai Pudong Development Bank Co., Ltd., Urumqi Branch

COMPANY WEBSITE

www.goldwindglobal.com

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

During the first half of 2017, the global economy kept being in a state of modest recovery: developed economies grew steadily; American, Eurozone and Japanese economies as a whole began to rebound; and emerging markets remained as the driving force for the world’s economic growth. According to the International Monetary Fund (IMF), driven by economic growth in China and India, emerging economies were expected to contribute more than three quarters of global economic growth in 2017; the global economic growth projected for 2017 is expected to increase by 0.1 percentage point from the original forecast to 3.5%.

During the Reporting Period, mainly due to stronger new driving forces cultivated by deepening supply-side structural reform, the national economy continued to be stable whilst improving, featuring rising employment, basic price stability and optimized balance of payments. In the first half of 2017 China’s economy maintained mid to high level growth rate with its GDP increased by 6.9% YoY.

According to “The Analysis and Forecast Report on the Situation of Electricity Supply and Demand in China in the First Half of 2017” (《2017年上半年全國電力供需形勢分析預測報告》), published by the China Electricity Council, the national electricity consumption increased by 6.3% YoY, with growth rate increased by 3.6 percentage points YoY. Along with the optimization of power mix and market layout, newly added non-fossil fuel energy accounted for 73.4% of newly installed capacity, representing an increase of 20 percentage points YoY. Newly installed wind power capacity in China’s east and central region represented 57.9% of nationwide newly installed wind power capacity. Wind power utilization rate increased by 67 hours YoY.

I. MAIN POLICY REVIEW

The “Thirteenth Five-Year Plan” period is crucial for China’s shifting to low-carbon power and critical for the implementation of the energy development strategy. In order to meet the target proportion of non-fossil energy, push forward the transformation and upgrade of energy structure, and facilitate the sustainable and healthy development of renewable energy represented by wind power, the PRC implemented various policies in the first half of 2017 to consolidate the steady growth of the wind power industry through industry regulations, installation planning and subsidy scheme.

1. Launch the long term plan for the energy system and promote clean energy as the main incremental capacity of energy supply

On 25 April 2017, NDRC and NEA jointly announced “Revolution Strategy for Energy Generation and Usage (2016-2030)”. According the plan, non-fossil energy will account for 50% of total power consumption by 2030, with higher penetration of wind and solar energy by technical improvement of power generation efficiency and lowering cost, which will make renewable energy compatible with traditional energy.

The strategic plan also mentioned China’s long term energy generation layout. For renewable power, eastern area will develop more distributed renewable power and offshore wind power, middle area will develop distributed renewable power, southwestern area will actively build up hydro power base and biomass, and northwestern area will develop comprehensive renewable power bases, while northeastern area will retire its coal power projects and develop renewable energy aggressively.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

2. Strengthen support towards the renewable energy development plan to facilitate orderly and healthy growth of the industry

On 28 July 2017, the NEA published the “Guiding Opinions on Implementing the Thirteenth Five-Year Plan on Renewable Energy Development” (《關於可再生能源發展「十三五」規劃實施的指導意見》) to encourage the sustainable, healthy and orderly development of the renewable energy sector. The document required all competent energy authorities at the provincial, regional and municipal level to prioritise the transmission and consumption of renewable energy in making regional plans on the construction scale and layout of renewable energy facility, with the view of boosting renewable energy consumption through cross-provincial and crossregional UHV transmission channels.

The NEA also issued the “Proposal on Scale of New Wind Power Construction (2017-2020)” (《2017-2020年風電新增建設規模方案》), and proposed to increase installed wind power capacity by 110.41GW for 2017 to 2020 in total, which is 30.65GW, 28.84GW, 26.6GW and 24.31GW respectively. It will result in a cumulative installed capacity of 126 GW in 2020.

3. Optimise the encouraging policies for renewable energy to strengthen competitiveness in the market

On 3 February 2017, the NDRC, Treasury and NEA jointly published the “Notice on Trial Implementation of Renewable Energy Green Certificate Issuance and Voluntary Transaction” (《關於試行可再生能源綠色電力證書核發及自願認購交易制度的通知》). Onshore wind and solar (distributed projects are excluded) could receive green certificates based on their power generation. Volunteered purchase started on 1 July 2017, and portfolio and mandate transaction will be implemented from 2018.

On 28 June 2017, the China National Renewable Energy Centre issued the “Implementation Rules for Voluntary Purchase Trading of Green Certificate (Trial)” (《綠色電力證書自願認購交易實施細則（試行）》), which further clarified the implementation rules relating to green certification, markets for green certificate trading, methods of trading, capital settlement and green certificate delivery, information disclosure of transactions, termination of trading and dispute resolution.

On 17 May 2017, the Comprehensive Division of the NEA published the “Notice on Approval Works for GridParity Demonstration Wind Power Projects” (《關於開展風電平價上網示範工作的通知》), which required all administrative energy authorities at provincial, regional and municipal level and of the Xinjiang Production and Construction Corps to organise wind power development enterprises to apply for the grid-parity demonstration wind power projects and select one to two projects to be submitted to the NEA. The notice also stated that the construction scale of the demonstration projects is to be negotiated and determined by the competent provincial, regional and municipal energy authorities and the Xinjiang Production and Construction Corps together with the power grid enterprises, and shall not be subject to the annual cap.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

4. Encourage enterprises to implement effective supervision and control for the reasonable planning, distribution and development of the industry

On 17 February 2017, the NEA published the “Notice on the Results of Wind Power Construction Monitoring and Warning” (《關於發佈2017年度風電投資監測預警結果的通知》), which categorized Inner Mongolia, Heilongjiang, Jilin, Ningxia, Gansu, and Xinjiang (including Xinjiang Production and Construction Corps) as red warning zones for wind power development and construction in 2017. Newly connection and installation is suspended. This policy is aiming to guide wind investment in regional layout and reduce curtailment.

On 1 June 2017, the Northwest Energy Bureau of the NEA published the “Northwestern China New Energy Development Plan and Implementation Regulatory Report”. It pointed out that the main two reasons for wind power and solar power curtailment in Northwestern China were insufficient capacity of peak load regulation and the limited transmission capacity of the system. Cross-regional delivery of new energy in the form of direct current will be an important way to enhance the utilisation rate of new energy in Northwestern provinces and promote the consumption of new energy.

II. INDUSTRY REVIEW

Supported by policies mentioned above, China’s wind power sector kept steady growth in the first half of 2017. Wind consumption ratio gradually improved while curtailment reduced significantly. Offshore wind market also accelerated. Wind power construction layout improved gradually.

1. Stable industry development

China’s wind power sector kept steady growth in the first half of 2017. According to data from NEA, newly connected capacity in the first half of 2017 was 6.01GW, and cumulative connected wind capacity was 154 GW as of end of June 2017, taking 9.4% of power mix in China. Wind power generation at the same period was 149 Terawatt hours, indicating 5% of penetration ratio, which is 0.7 percentage point higher compared to same period last year.

2. Improved wind curtailment

Wind curtailment improved significantly thanks to supporting policies issued by NDRC and NEA last year regarding wind power purchase priority. For the first half of the year, national wind utilization rate was 984 hours, representing 67 hours increase YoY. Utilization rate in Yunnan Province was 1,592 hours and in Sichuan Province was 1,498 hours respectively, remaining at the highest level national wide. Curtailed wind power was 23.5 Terawatt hours, and curtailment ratio was 14%, decreased by 7 percentage points compared with the same period last year. All provinces except for Shaanxi and Yunnan have experienced better wind power consumption in this year. The curtailment in Xinjiang, Gansu, Liaoning, Jilin, Ningxia and Inner Mongolia has improved by over 10 percentage points YoY.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

3. Accelerating wind installation in middle, eastern and southern area

According to China’s Thirteenth Five Year Plan, the majority of China newly installation will be located in middle, eastern and southern area in the next several years. In the first half of this year, newly connected capacity in middle, eastern and southern area with curtailment ratio of zero or at a reasonable low level has taken over 80%. Among which, Qinghai Province connected 640 MW, Hebei Province connected 580 MW, same as Henan, and Jiangxi Province connected 520 MW. In those area with severe curtailment, newly connected capacity decreased significantly. For example, there was no newly connection in Gansu Province and Jilin Province. There was only 300MW and 140MW newly connected capacity in Xinjiang and Inner Mongolia, respectively, showing a clear geographic shift.

4. Offshore wind power gained momentum

According to China’s Thirteenth Five Year Plan, China will achieve more than 5 GW of cumulative offshore connected capacity by 2020. And there will be over 10 GW of offshore projects that have start construction by then. Based on CWEA’s statistics, there was only 1.63 GW of connected offshore wind power by the end of 2016, indicating that there will be an acceleration of offshore wind power development in 2017. Therefore, in the first half of 2017, the public tendering for offshore wind projects was very active. Local governments such as Jiangsu, Guangdong and Shandong also announced their ambitious planning on offshore wind power development. Benefited by amended offshore wind policies, and reduction on constriction cost contributed by technology improvements, China’s offshore wind power market will realize a higher annual installation during the period of Thirteenth Five Year Plan.

III. BUSINESS REVIEW

In 2017, the Group adhered to the “customer-oriented” approach and adopted R&D and innovation as the major driving forces for enhancing competitiveness. Focusing on the upgrade and transformation of product and management, it introduced innovative products to lower costs, boost efficiency and increase value. Meanwhile, it provided total life-cycle protection for products through smart and digitalized operation and maintenance solutions, thereby supporting sustainable corporate development with a diversified profit model. During the Reporting Period, all businesses of the Group progressed well, as it carried out promotion of new products in an orderly manner, recorded steady growth of backlog orders and achieved outstanding results in exploring the international market.

During the Reporting Period, revenue for the Group was RMB9,779.77 million, representing a decrease of 9.78% compared with RMB10,839.59 million for the corresponding period in 2016. Net profit attributable to owners of the Company was RMB1,132.92 million, representing a decrease of 21.87% compared with RMB1,450.12 million for the corresponding period in 2016.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

i. Wind Turbine Generator R&D, Manufacturing and Sales

1. Product Manufacturing and Sales

For the six months ended 30 June 2017, the Group’s revenue from the sales of WTGs and components was RMB7,264.26 million, representing a decrease of 20.48% YoY. Total sales capacity was 1,874.50MW, a decrease of 21.01% YoY, among which the sales volume of 2.5MW WTGs increased significantly from 18.33% in the first half of 2016 to 45.48%. The following table sets out the details of products sold by the Group in the first half of 2017 and 2016:

	Six months ended 30 June 2017 2016 Units Sold Capacity Sold (MW) Units Sold Capacity Sold (MW) Change in Capacity Sold
3.0MW 2.5MW 2.0MW 1.5MW Total	9 27.00 9 27.00 0.00% 341 852.50 174 435.00 95.98% 352 704.00 396 792.00 –11.11% 194 291.00 746 1,119.00 –73.99%
	896 1,874.50 1,325 2,373.00 –21.01%

During the Reporting Period, domestic onshore public tenders capacity was 13,214MW, of which 5,636MW has awarded bidding. The Group newly onshore backlog orders were 2,349MW. As at 30 June 2017, the Group’s backlog of orders under final contracts totaled 9,093.2MW, including 6MW of 750 KW WTGs, 1,405.5MW of 1.5MW WTGs, 4,748MW of 2.0MW WTGs, 294.8MW of 2.2MW WTGs, 2,622.5MW of 2.5MW WTGs, 3.0MW of 3.0MW WTGs, 13.4MW of 6.7MW WTGs. There were 5,971.45MW of successful bid, including 375MW of 1.5MW WTGs, 3,428MW of 2.0MW WTGs, 250.8MW of 2.2MW WTGs, 1,205MW of 2.5MW WTGs, 228MW of 3.0MW WTGs, 323.4MW of 3.3MW WTGs and 161.25MW of 6.45MW WTGs. The Group had 15,064.65MW of combined backlog orders.

2. Technology R&D and Product Certification

The continual improvement of R&D capabilities provides the solid foundation for customer value maximization. Goldwind is committed to meeting market and customer demands and strengthens its overall product competitiveness by combining product optimisation and upgrade with new product development. It continuously enriches the product lines while consolidating and strengthening its technical advantages, with the view of integrating the key technology applications in various fields of WTGs and the full optimisation and upgrade of product hardware and software.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

a) Product Research and Development

For the purposes of enhancing the overall competitiveness of products and meeting the needs of industry development and market expansion, the Group launched the GW3.0MW(S) WTGs to the market in 2017. This model has superior functionality performance, adopts modular design and has highly intelligent features. It is also equipped with innovative and exclusive dual cable design and flexible power rectification technology. Since its debut, the model has gained acceptance and recognition all over the world.

During the Reporting Period, the Group continued to push forward the R&D of the 2.0MW and 2.5MW WTGs series. Based on the well-established 2.5MW WTGs series, the Group released the extreme low-wind speed WTG GW130/2500 to meet the market demand. In the meantime, it strengthened product adaptability and completed the development of the 2.0MW and 2.5MW series towers.

b) Product Certification

In the first half of 2017, Goldwind was granted six type certificates and six design assessment certificates, of which two models of the 2.0MW platform (GW115/2200; GW121/2000) and the 121/3000 model of the 3.0MW platform received the model certificates from China General Certification Center; the GW121/2500_120mHH model of the 2.5MW platform obtained the type certificate from DNV-GL, an internationally recognised certification agency; and the GW136/3400 and GW140/3400 models, as well as the GW154/6700 model of the 6MW platform received the design assessment certificates from China General Certification Center.

Furthermore, the GW121/2500 high altitude WTGs also received the IECRE certificate from China General Certification Center. As a result, Goldwind is one of the three earliest WTGs manufacturers with the certificate since China General Certification Center became IECRE member. This not only serves as an example of how the assessment capability of domestic third party certification body gained international recognition, but also demonstrates the ability of Goldwind’s units in meeting new international standards.

In terms of innovative technology certification, the GW121/2500 Lidar Assisted Control technology obtained the design assessment certificate issued by DNV-GL. The control technology, which is recognized by third parties, effectively enhances the adaptability of WTGs to complex environment.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

c) Intellectual property protection and standardization

Goldwind has attached importance to the development of core R&D capability, as evident by the steady growth of patent application at home and abroad, as well as the continuous optimisation of patent application structure. During the first half of 2017, Goldwind added 259 authorized patents in China, including 77 new authorised inventions. It also had 24 software copyrights newly registered, 23 new registered trademarks in China, and 4 new registered trademarks approved in overseas.

The Group has actively participated in the formulation of international, national and industrial standards. As at 30 June 2017, Goldwind has took part in the formulation of 135 standards in the PRC, including 71 national standards, 48 industrial standards, six regional standards and 10 association standards, of which 67 national and industrial standards were implemented. In the international arena, it joined the working groups of four international standards, including the IEC 61400-1 and IEC 6400-15 standards, in which it contributed the application experience of itself and the PRC by putting forward opinions and proposals. The first committee draft (1CD) of IEC/TS 62898-3-1 “Microgrids-Technical Requirements-Protection Requirements”, of which the Company was the leading drafter, was submitted to the Secretariat of IEC/TC 8 in June 2017 and the solicitation of opinions has commenced among member states.

3. Quality Management

The Group believes that product quality is the foundation of business growth. As improvement of product quality is integral to all aspects of the industry chain, it strives to establish an excellent industry chain in the wind power sector. During the Reporting Period, the quality management works aimed at both prevention and in-process control. The Group designed and promoted internal quality prevention courses for further optimisation of quality standards and system. In order to ensure product quality from the source, it encouraged suppliers in enhancing product quality management. The Group organised nine professional training sessions for over 200 participants from 86 suppliers, covering application of quality tools, qualification accreditation, position certification, lean management and other topics.

ii. Wind Power Services

Following over a decade of rapid growth of the wind power sector, the warranty of an increasing number of WTGs has expired and competition in the industry is no longer limited to product manufacturing. While market competition shifts from the front end of the industry chain to downstream industries, the after-sales service market is opening up room for development.

Adhering to the core principle of “prompt reaction”, Goldwind constantly satisfies the market demand for aftersale services. It invested in and constructed the smart service support platforms including the Goldwind Big Data Platform, Goldwind New Energy Meteorological Statistics Assets Management Platform, Goldwind Global Monitoring Center, Full Lifecycle Asset Management System and Big Data Early Warning System. Leveraging leading information technology, Group combined its operating statistics of WTGs in the past 20 years, the professional technical capability and resources to provide comprehensive smart operation and maintenance service.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

During the Reporting Period, the Company developed business expansion plan for the “Energy Nest” system. The plan aims to optimise the control strategy of existing projects and carry out upgrade of intelligent wind farm control, hence offering modular solutions to wind farms for the future development of the energy internet in the PRC. Currently, the Company has contracts amounted to 1.44GW. It will provide innovative technology for enhancing the economic benefits of China’s existing wind power projects and promoting green energy consumption.

As at the end of the Reporting Period, the operation and maintenance team of the Company had provided construction, operation and maintenance services and technical support for more than 25,000 WTGs globally. Over 19,000 WTGs and 389 wind farms all over the world are connected with Goldwind Global Monitoring Center. During the first half of 2017, revenue from the Wind Power Services business segment was RMB709.83 million, representing for an increase of 59.34% YoY.

iii. Wind Farm Investment and Development

The Group actively develops the domestic market to gain advantages and resources for sustainable business growth. During the Reporting Period, the wind farm investment and development business segment took initiatives in exploring a better cooperation model to give full play to its strengths in terms of branding, product and technology and capital. It also established the resources integration platform to offer integrated solutions through combining the advantages of local government and private enterprises. Besides, the Group promoted the power sales business and completed the business registration of Shanxi and Western Inner Mongolia power sales companies. To support the sustainable development of power sales business, it also sought cooperation with enterprises in provincial and cross-regional direct power purchase.

During the Reporting Period, the domestic newly installed connected capacity of the Group was 93.5MW and newly installed attributable connected capacity was 88.6MW. As at the end of the Reporting Period, the installed wind farm connected capacity of the Group was 4,491MW, of which 3,769MW was attributable capacity. The capacity of wind farm projects still under construction was 796.75MW, of which 614MW was attributable capacity.

During the Reporting Period, revenue from power generation of wind power projects was RMB1,657.48 million, representing for an increase of 45.57% YoY. The gain on investment from sale of wind farms was RMB93.31 million, representing for an increase of 81.08% YoY.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

iv. International Business

Backed by its forward-looking strategy and well-established presence in the target market, Goldwind has made steady progress in internationalization and accomplished significant achievements in international business expansion during the Reporting Period. As at the end of the Reporting Period, the total capacity of projects pending development and reserved reached 1,770.3MW; of which 231MW was from United States, Philippines, Cuba and etc. As the end of the Reporting Period, the Group’s overseas backlog orders have been over 1GW, reaching 1,017MW, mainly including GW121/2.5MW and 82/1.5MW.

In the first half of 2017, the wholly-owned subsidiary of Goldwind entered into the tax investment agreement with MidAmerican Wind Tax Equity Holdings (a fund under Berkshire Hathaway) of the USA and Citi, pursuant to which the parties will jointly invest in the 160MW Rattlesnake Wind Farm Project which is developed by Goldwind in the USA, with a total investment of approximately US$250 million. The project has a total capacity of 160MW and 64 units of Goldwind’s GW109/2.5MW DDPM WTGs are planned to be installed. Upon completion, the project will be Goldwind’s largest wind farm project in America. The Company also acquired the Stockyard Hill Wind Farm Project in Victoria, Australia with a capacity of 536.4MW. It will install the GW3.0MW(S) DDPM WTGs and, upon completion, become the largest wind farm in Australia thus far. The Group acquired the Loma Blanca Wind Power Project, Site I, II and III, in Argentina with the capacity of 150MW, which is Goldwind’s first wind power project in Argentina. It laid the foundation for our following business development in Argentina and South America.

In the first half of 2017, revenue from the international business amounted to approximately RMB1,063.00 million, representing for an increase of 62.76% YoY.

v.

Offshore Wind Power Development

In order to fully implement the offshore wind power strategy and expedite the development of the relevant business, the Group actively expanded and explored the offshore wind power market and made steady progress in various initiatives. Based on its global R&D technology and resources, Goldwind combined the advantages of the offshore wind power market in Jiangsu and the resources of Dafeng Port to establish the offshore wind power industrialization base in Dafeng, Jiangsu, which served as the key WTG R&D and manufacture base of the Group along the coast of China. The Group also successfully developed the offshore product platform comprising mainly 3.X(MW) and 6.X(MW) products, which included the GW121/2.5, GW140/3.X, GW154/6.X, GW164/6.X and GW171/6.X models. The Goldwind 6MW Beta direct-drive offshore WTG project is planned to complete the installation of prototype in Fujian Province in the second half of 2017. Based on the development needs of offshore wind power, Goldwind has developed the customizable totalsolution plan for offshore wind farms, which covered an integrated support structure design, integrated tower layout, integrated transport and installation, as well as integrated smart operation and maintenance plan.

During the first half of 2017, 2,066MW of offshore wind power capacity was tendered in the PRC, accounting for 13.5% of the total capacity tendered nationwide. Of which, the Group won the bid for 503MW of offshore wind power projects. As of the end of the Reporting Period, the Group had 825MW of backlog orders of offshore wind power projects, comprising primarily 3.X and 6.X.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

vi. Water Treatment Business Expansion

Goldwind has become a global leader in manufacturing WTGs and providing comprehensive wind power solutions. In addition, it has penetrated the energy saving and environmental protection sectors which offer more room for development and value enhancement.

As of the first half of 2017, the Company has established water projects in 17 cities and owned 13 operating water plants as well as two plants under construction. It has achieved a consolidated operating scale of 750,000 tonnes/day and a water tariff collection rate of 90.7% while maintaining the operating standards in all water plants.

The Company invested in NanoSun, a Singapore company with the world’s leading 3D printing technology for water treatment membrane that outperforms major PRC enterprises in terms of functionality and cost. The Company will progressively develop into a smart water solution provider in design and planning, project construction, manufacture of key equipment and operation of water plants.

vii. Major Subsidiaries

As at 30 June 2017, the Company had 238 subsidiaries, among which 26 were directly owned subsidiaries and 212 were indirectly owned subsidiaries. In addition, we had 12 joint ventures, 15 associate companies and 17 available-for-sale unlisted equity investments. These subsidiaries included WTG R&D and manufacturing companies, wind power investment companies, wind power services companies, water treatment and finance lease. The following table sets out major financial information of the principal subsidiaries of the Company (reported in accordance with CASBE):

As at 30 June 2017 Unit: RMB

				Net Assets		Net Profits
		Registered Capital		Attributable to	Revenue from	Attributable
No	Company Name	(RMB ten thousand)	Total Assets	the Company	Operations	to the Company
1	Beijing Goldwind Science & Creation Wind Power Equipment Co., Ltd.	99,000.00	5,250,756,222.63	1,351,043,478.39	1,795,900,961.79	–50,476,437.91
2	Vensys Energy AG	€5 million	1,310,294,998.84	665,388,123.97	408,967,690.48	23,457,782.17
3	Jiangsu Goldwind Technology Co., Ltd.	75,961.00	3,548,936,115.65	1,320,856,627.36	1,420,946,484.04	191,607,294.94
4	Beijing Techwin Electric Co., Ltd.	10,000.00	2,673,831,778.54	1,632,112,486.24	1,185,934,494.10	178,545,362.81
5	Beijing Tianrun New Energy Investment Co., Ltd.	555,000.00	26,914,920,843.14	7,837,281,873.32	1,558,915,550.67	618,403,088.62
6	Goldwind Investment Holding Co., Ltd.	100,000.00	1,642,031,896.33	1,603,379,903.82	–	19,004,522.87
7	Beijing Tianyuan Science & Creation Wind Power Technology Co., Ltd.	20,000.00	2,672,015,450.83	206,187,447.49	580,985,455.65	–22,139,178.76
8	Tianxin International Finance Lease Co., Ltd.	USD30 million	2,762,566,804.25	448,700,349.96	83,675,117.29	40,663,154.82
9	Goldwind Environmental Science & Technology Co., Ltd.	100,000.00	1,865,654,645.48	1,036,721,638.50	68,129,422.07	24,049,365.30

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

viii. Use of H Shares Proceeds

The Company conducted the initial public offering of its H shares and listed its H shares on the main board of the Hong Kong Stock Exchange in October 2010. According to the Capital Verification Report issued by Ernst & Young Hua Ming LLP, the net proceeds of the H shares offering were the equivalent of RMB6.754 billion in HKD. According to the proposed use of the H shares offering proceeds, approximately 64.8% of the proceeds shall be used in the domestic market, and approximately 35.2% shall be used in the international market. As at 30 June 2017, the accumulated used proceeds were the equivalent of RMB6,754 million in HKD. All the proceeds have been used up. The use of the Company’s H share proceeds is as follows:

As at 30 June 2017 Unit: RMB million

Proceeds Projects	Planned Investment Actual Investment Unused Amount
Construction of production base and optimisation of business operations R&D of WTGs and components International business Bank loan repayment General working capital Total	2,715 2,715 – 986 986 – 1,972 1,972 – 411 411 – 670 670 –
	6,754 6,754 –

IV. OPERATIONS PERFORMANCE AND ANALYSIS

The contents of this section should be read in conjunction with the Financial Statements, including the relevant notes, set out in this interim report.

Summary

During the six months ended 30 June 2017, revenue for the Group was RMB9,779.77 million, representing a decrease of 9.78% compared with RMB10,839.59 million for the corresponding period in 2016. Net profit attributable to owners of the Company was RMB1,132.92 million, representing a decrease of 21.87% compared with RMB1,450.12 million for the corresponding period in 2016. The Company reported basic earnings per share of RMB0.31.

Revenue

The Group’s revenue was generated mainly from (i) WTG Manufacturing, (ii) Wind Power Services, (iii) Wind Farm Investment and Development and (iv) Others. Revenue from WTG Manufacturing includes the sales of WTGs and components. Revenue from Wind Power Services was mainly generated through services such as wind farm EPC, maintenance and other services. Revenue from Wind Farm Investment and Development was mainly generated from the sale of power produced by our operating wind farms. Revenue from other business segments included revenue from the Group’s finance lease activities and water treatment.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

Unit: RMB thousand

	Six months ended 30 June Amount Change Percentage Change 2017 2016
WTG Manufacturing Wind Power Services Wind Farm Investment and Development Others Total	7,264,258 9,134,944 (1,870,686) –20.48% 709,831 445,494 264,337 59.34% 1,657,481 1,138,642 518,839 45.57% 148,198 120,508 27,690 22.98%
	9,779,768 10,839,588 (1,059,820) –9.78%

Revenue decreased due to: (i) the wind power industry in the first half of 2017 continuing low speed development, the Group’s sales revenue from WTGs declined; (ii) the revenue from EPC increased significantly YoY due to the Group’s aggressive expansion; (iii) with the increase of the capacity of entering into operational wind farms, generating revenue increased significantly; (iv) the Group greatly enhanced its ability to withstand risk and actively developed a diversified profit model, as a result, lease financing business and water treatment business sales revenue significantly increased during the Reporting Period.

Cost of Sales

Unit: RMB thousand

	Six months ended 30 June Amount Change Percentage Change 2017 2016
WTG Manufacturing Wind Power Services Wind Farm Investment and Development Others Total	5,486,348 6,747,268 (1,260,920) –18.69% 538,995 357,319 181,676 50.84% 565,620 402,901 162,719 40.39% 52,287 11,258 41,029 364.44%
	6,643,250 7,518,746 (875,496) –11.64%

The Group’s cost of sales decreased mainly due to decreased revenue during the Reporting Period.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

Gross Profit

Unit: RMB thousand

	Six months ended 30 June Amount Change Percentage Change 2017 2016
WTG Manufacturing Wind Power Services Wind Farm Investment and Development Others Total	1,777,910 2,387,676 (609,766) –25.54% 170,836 88,175 82,661 93.75% 1,091,861 735,741 356,120 48.40% 95,911 109,250 (13,339) –12.21%
	3,136,518 3,320,842 (184,324) –5.55%

The Group’s gross profit decreased mainly due to a decrease in the gross profit from WTG manufacturing YoY.

For the six months ended 30 June 2017 and 2016, our comprehensive gross profit margin was 32.07% and 30.64%, respectively, and the gross profit margin for WTG Manufacturing business segment was 24.47% and 26.14%, respectively.

The following table sets out the gross profit margins for the Group’s WTGs by unit capacity including the 1.5MW series, 2.0MW series, 2.5MW series and 3.0MW series (prepared in accordance with CASBE):

	Six months ended	Six months ended	Change
	30 June		(percentage
Gross Profit Margin	2017	2016	points)
3.0MW	16.44%	33.15%	–16.71
2.5MW	23.34%	27.75%	–4.41
2.0MW	25.68%	24.21%	1.47
1.5MW	26.73%	27.69%	–0.96

During the Reporting Period, the Group continued to promote lean and value-added management, eliminate inefficiencies, and strive to achieve the best overall costs. During the Reporting Period, gross profit margin of 1.5MW WTGs had a certain degree of decrease, decreased to 26.73% from 27.69% in the corresponding period of 2016. There was greater efficiency in the scale of 2.0MW WTGs as it entered into mass production, increasing the gross profit margin to 25.68% from 24.21% in the corresponding period of 2016. Due to the intensifying market competition, the bidding price declined more than the cost improvement range, the gross profit margin of 2.5MW WTGs decreased to 23.34% from 27.75% in the corresponding period of 2016. Our 3.0MW WTGs are still in the market development stage. The adjustment of product market adaptability resulted in that the gross profit margin of 3.0MW WTGs decreased to 16.44% from 33.15%.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

Other Income and Gains

The Group’s other income and gains primarily consisted of gains from the sale of wind farms (including gains from the sale of WTGs installed at our wind farms), insurance compensation on product warranty expenditures, government grants received for our R&D projects and upgrades of our production facilities, bank interest income, gross rental income and etc.

Other income and gains of the Group for the six months ended 30 June 2017 was RMB370.57 million, which was essentially flat compared the corresponding period in 2016.

Selling and Distribution Costs

The Group’s selling and distribution costs primarily consisted of product warranty provisions, transportation costs, insurance expenses, bidding service fees, labour costs, loading and unloading fees, and travel expenses and etc.

Selling and distribution costs of the Group for the six months ended 30 June 2017 was RMB735.69 million, representing a 11.56% decrease compared with RMB831.84 million for the corresponding period in 2016. This was mainly attributed to a decrease in the sales volume of WTGs which led to decreased product warranty provisions and transportation fees.

Administrative Expenses

The Group’s administrative expenses primarily consisted of R&D expenses, staff costs, taxes, depreciation, consultation fees, travel expenses and etc.

Administrative expenses of the Group for the six months ended 30 June 2017 was RMB913.33 million, representing a 16.01% increase compared with RMB787.26 million for the corresponding period in 2016. This was mainly attributed to the increasing R&D expenses gradually for the Group’s enhancing core competitiveness, and increasing consulting expenses for the improvement of the Group’s whole informational degree.

Other Expenses

The Group’s other expenses primarily consisted of bank charges, foreign exchange losses, and impairment provisions accrued in connection with our trade receivables and etc.

Other expenses of the Group for the six months ended 30 June 2017 was RMB209.22 million, representing a 30.37% increase compared with RMB160.48 million for the corresponding period in 2016. This was mainly attributed to the increased impairment provision for trade receivables, loss from fair value change of derivative instrument and bank charges offset by decreased exchange earning.

Finance Costs

Finance costs of the Group for the six months ended 30 June 2017 was RMB395.57 million, representing a 29.53% increase compared with RMB305.38 million for the corresponding period in 2016. This was mainly attributed to an increase in interest on bank loans and other borrowings resulting from increased average loan balance, and increased operational wind farms which led to interest payments for associated project bank loans re-categorised as interest expense rather than capital expenditure.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

Income Tax Expenses

Income tax expenses of the Group for the six months ended 30 June 2017 was RMB148.49 million, representing a 25.53% decrease compared with RMB199.39 million for the corresponding period in 2016. This was mainly attributed to decreased pre-tax profit.

Financial Position

As at 30 June 2017 and 31 December 2016, total assets of the Group were RMB64,953.94 million and RMB64,437.17 million, respectively, current assets of the Group were RMB31,113.20 million and RMB33,096.62 million, respectively, percentages of current assets to total assets of the Group were 47.90% and 51.36%, respectively. The Group’s current assets decreased mainly due to the decrease of the Group’s cash and cash equivalents.

As at 30 June 2017 and 31 December 2016, total non-current assets of the Group were RMB33,840.74 million and RMB31,340.55 million. The Group’s non-current assets increased mainly due to increased financial receivables resulting from increased financial lease receivables and water concession rights, increased property, plant and equipment resulting from increased operating and under-construction wind farms, increased other intangible assets, increased investments in joint ventures resulting from the outside investment, increased prepayments, deposits and other receivables.

As at 30 June 2017 and 31 December 2016, total liabilities of the Group were RMB43,638.10 million and RMB43,738.37 million, respectively, current liabilities of the Group were RMB25,157.71 million and RMB24,662.98 million, respectively. The Group’s current liabilities increased mainly due to increased interest-bearing bank loans repayable within a year, increased other payables, increased liabilities directly associated with the assets classified as held for sale resulting from disposal of wind farms, and increased provisions offset by decreased trade payables.

As at 30 June 2017 and 31 December 2016, total non-current liabilities of the Group were RMB18,480.40 million and RMB19,075.39 million, respectively. The Group’s non-current liabilities decreased mainly due to decreased long-term bank loans, and decreased provisions offset by increased trade and bills payables.

As at 30 June 2017 and 31 December 2016, net current assets of the Group were RMB5,955.49 million and RMB8,433.64 million, respectively, and net assets of the Group were RMB21,315.84 million and RMB20,698.79 million, respectively.

As at 30 June 2017 and 31 December 2016, cash and cash equivalents of the Group were RMB3,912.13 million and RMB7,534.17 million, respectively, and total interest-bearing bank loans and other borrowings of the Group were RMB18,762.08 million and RMB18,091.11 million, respectively.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

Financial Resources and Liquidity

Unit: RMB thousand

Cash Flow Statements	Six months ended 30 June 2017 2016
Net cash flows used in operating activities Net cash flows used in investment activities Net cash flows from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of Reporting Period Net effect of foreign exchange rate changes Cash and cash equivalents at end of Reporting Period	(1,551,531) (2,101,223) (3,325,696) (3,003,649) 1,230,136 4,407,961
	(3,647,091) (696,911)
	7,526,463 6,141,430 23,749 11,777
	3,903,121 5,456,296

1. Net cash flows used in operating activities

Net cash flows of the Group used in operating activities primarily represent profit before tax adjusted for noncash items, movements in working capital, and other income and gains.

For the six months ended 30 June 2017, the Group reported net cash flows used in operating activities of RMB1,551.53 million. Cash outflows were principally comprised of a RMB1,887.18 million decrease in trade and bills payables, a RMB775.60 million increase in inventory (in preparation of anticipated deliveries scheduled during the second half of 2017), a RMB741.58 million increase in financial receivables, a RMB669.36 million increase in prepayments, deposits and other receivables, income tax paid of RMB242.52 million. Such cash outflows were offset by profit before tax of RMB1,335.95 million, adjusted for a RMB777.67 million increase in other payables, advances from customers and accruals, a RMB512.70 million increase in depreciation and a RMB395.57 million increase in finance costs.

For the six months ended 30 June 2016, the Group reported net cash flows used in operating activities of RMB2,101.22 million. Cash outflows were principally comprised of a RMB3,235.25 million increase in trade and bills receivables, a RMB873.85 million increase in inventory (in preparation of anticipated deliveries scheduled during the second half of 2016) and a RMB425.23 million increase in prepayment, deposit and other receivables, income tax paid of RMB485.30 million. Such cash outflows were offset by profit before tax of RMB1,705.91 million, adjusted for a RMB554.66 million increase in other payables and accruals, a RMB461.91 million increase in trade and bills payable, a RMB383.46 million increase in depreciation and a RMB305.38 million increase in finance costs.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

2. Net cash flow used in investment activities

The Group’s net cash flows used in investing activities primarily consist of the purchases of items of property, plant and equipment, the acquisition of subsidiaries, the purchases of available-for-sale investments, pledged deposits, and non-pledged time deposits with original maturity of three months or more when acquired and etc.

For the six months ended 30 June 2017, the Group reported net cash flows used in investment activities of RMB3,325.70 million. Cash outflows were principally due to the purchases of items of property, plant and equipment and additions to other intangible assets in the amount of RMB2,317.94 million, the acquisition of subsidiaries in the amount of RMB840.76 million (net of cash) and the purchases of available-for-sale investments in the amount of RMB196.18 million. Such cash outflows were offset by the proceeds from disposal of available-for-sale investments in the amount of RMB76.84 million and dividend received from joint ventures and associated and dividend received from available-for-sale investments in the amount of RMB31.42 million.

For the six months ended 30 June 2016, the Group reported net cash flows used in investment activities of RMB3,003.65 million. Cash outflows were principally due to the purchases of items of property, plant and equipment and additions to other intangible assets in the amount of RMB2,540.78 million and the purchases of available-for-sale investments in the amount of RMB659.35 million. Such cash outflows were offset by the proceeds from disposal of available-for-sale investment in the amount of RMB234.72 million and dividend from joint ventures and associated companies and dividend received from available-for-sale investments in the amount of RMB94.27 million.

3. Net cash flows from financing activities

The Group’s net cash flows used in financing activities primarily consist of repayments of corporate bonds, bank loans and interests. The Group’s net cash flows from financing activities primarily consist of new bank loans.

For the six months ended 30 June 2017, the Group reported net cash flows from financing activities of RMB1,230.14 million. Cash inflows were principally contributed by new bank loans and other borrowings of RMB2,409.74 million. These cash inflows were offset by repayment of bank loans and other borrowings of RMB731.73 million and interest paid of RMB409.16 million.

For the six months ended 30 June 2016, the Group reported net cash flows from financing activities of RMB4,407.96 million. Cash inflows were principally contributed by new bank loans and other borrowings of RMB4,025.15 million and issuance of perpetual medium-term notes of RMB996.55 million. These cash inflows were offset by repayment of bank loans and other borrowings of RMB297.63 million and interest paid of RMB320.83 million.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

Capital Expenditure

Capital expenditures of the Group for the six months ended 30 June 2017 were RMB2,573.11 million, representing an increase of 10.98% from RMB2,318.60 million for the six months ended 30 June 2016. The Group’s primary financing resources for capital expenditure included bank loans and cash flows from operations of the Group.

Bank Loans and Other Borrowings

As at 30 June 2017, the total amount of interest-bearing bank loans of the Group was RMB15,119.40 million, including amounts due within one year of RMB3,095.03 million, in the second year of RMB944.45 million, in the third to fifth year of RMB3,770.07 million, and above five years of RMB7,309.85 million. In addition, as at 30 June 2017, the Group had issued a corporate bond repayable with a book value of RMB3,642.69 million, including amounts due within one year of RMB728.60 million, in the second year of RMB2,243.71 million, in the third to fifth year of RMB670.38 million. Details are set out in Note 21 to the Financial Statements. During the Reporting Period, the Group does not have any interest rate hedging.

Restricted Assets

As at 30 June 2017, the following assets of the Group with a total carrying value of RMB14,557.98 million were restricted as security for certain bank loans and other banking facilities. Such assets included bank deposits of RMB323.58 million, trade and bills receivables of RMB1,833.57 million, property, plant and equipment of RMB11,736.34 million, financial receivables of RMB515.72 million and prepaid land lease payments of RMB148.77 million.

As at 31 December 2016, the following assets of the Group with a total carrying value of RMB15,084.19 million were restricted as security for certain bank loans and other banking facilities. Such assets included bank deposits of RMB1,016.81 million, trade and bills receivables of RMB1,324.52 million, property, plant and equipment of RMB12,100.28 million, financial receivables of RMB487.43 million and prepaid land lease payments of RMB155.15 million.

Gearing Ratio

As at 30 June 2017 and 31 December 2016, the Group’s gearing ratios, defined as net liabilities divided by total capital, were 59.00% and 56.48%, respectively.

Exposure to Fluctuations in Exchange Rates and any Related Hedges

The Group primarily operates its businesses in China. Over 80% of the Group’s revenue, expenditure, financial assets and liabilities are denominated in RMB. The exchange rate of the RMB against foreign currencies does not have a significant impact on the Group’s businesses. For the six months ended 30 June 2017, the Group signed a few forward foreign exchange agreements with ANZ Bank, Citibank, and Societe Generale to avoid foreign currency exchange risks. The Group’s foreign exchange exposure associated with such transactions (expect for the functional currency of the relevant operating entities) maintained at a relatively low level. The currency exchange difference incurred by the Group in respect of the long-term equity investment by our subsidiaries incorporated outside China was recorded under the exchange reserve.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

Contingent Liabilities

The Group’s contingent liabilities primarily consist of issued letters of credit, letters of guarantee, guarantees provided to third parties, and compensation arrangements.

As at 30 June 2017 and 31 December 2016, contingent liabilities of the Group were RMB12,798.01 million and RMB12,181.46 million, respectively. Details are set out in Note 25 to the Financial Statements.

V. OUTLOOK FOR THE SECOND HALF OF 2017

Following the adjustment of the overall wind power construction strategy and the technological advancement in the PRC, the wind power market extended from the Three-North region to mid-eastern and southern China with higher power consumption and no power curtailment. In the first half of 2017, mid-eastern and southern China contributed over 50% of China’s newly installed wind power capacity, surpassing the Three-North region for the first time. As planned by the NEA, the newly installed wind power capacity (including offshore wind power) in mid-eastern and southern China will exceed 47 million kW, accounting for 57% of the newly installed capacity in China during the “Thirteenth Five-Year Plan” period.

Wind resources are rich in offshore China. The vast sea area in the east coast of China which is 2 to 15 meters in depth has great potential for wind power development, especially the coast, tidal flats and offshore area in Jiangsu. Due to the decline in wind resources available for development on land, the construction of wind farms is gradually shifting from onshore to offshore. According to the Thirteenth Five-Year Plan on Wind Power Development (《風電發展「十三五」規劃》) published by the NEA, the cumulative installed wind power capacity shall exceed 210 million kW by the end of 2020. Among which, the installed capacity of offshore wind power shall be above 5 million kW and the annual power generation shall reach 420 billion kWh, accounting for approximately 6% of the domestic power generation in aggregate. The NDRC and the State Oceanic Administration of the PRC jointly issued the Thirteenth Five-Year Plan on National Marine Economic Development (《全國海洋經濟發展「十三五」規劃》), which proposed the site-specific and reasonable development of offshore wind power industry. It also encouraged the construction of offshore wind farm in distant water, adjustment of the grid connection policy for wind power, and optimisation of the technical standard systems and standards for marine use in the offshore wind power industry. In addition, it also planned to strengthen the R&D of 5MW, 6MW and above high power offshore wind power equipment, achieve breakthrough in key technology of offshore substantiation and submarine power transmission, and extend to auxiliary offshore wind power industries such as energy storage devices and smart grid.

The New Energy Outlook 2017 Report published by Bloomberg New Energy Finance predicted that wind power and solar power will take up 60% of the total investment in power generation technology from 2017 to 2040, hence wind power will become the most important new energy investment. Furthermore, the cost of offshore wind power technology will drop faster than the rapid decline in the cost of onshore wind power technology. It is expected that global wind power generation will steadily increase from 2017 and the installed wind power capacity in China will exceed 200GW in 2020. Looking ahead to 2030, there will be a new round of growth in the global and PRC wind power industry.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

Potential Risk Factors

(1) Wind curtailment

The wind curtailment still affected the growth of the industry during the Reporting Period and will continue to be the key restraint to wind power development in the near term, despite the significant improvement in the PRC during the first half of 2017.

(2) Political Risks

The development of the wind power industry is inextricably linked to the national policy. Due to the national tariff reduction policy which will become effective in 2018, the competition for market share and resources between wind power enterprises will intensify in 2017, which may create challenges to market expansion and resources reservation.

(3) Declining demand from customers

As sales to major customers accounted for a high proportion of total annual sales of the Company, changes in the demand from major customers or their investment plan due to the macroeconomic environment or their development may affect the production and operation of the Company.

(4) Economic environment and change in exchange rate

The uneven growth across major economies in the world, uncertainty in globalisation due to geopolitical factors, the potential rise of trade protectionism and fluctuation of Renminbi exchange rate may affect the profitability of the Company and the expansion of the international business.

In view of the above risks, the Company will strengthen its principal activities while penetrating the well-established sectors in the wind power value chain that offer more room for value enhancement. By providing comprehensive wind power solutions comprising wind power equipment manufacturing and smart energy services and clean power to customers, it will continue to consolidate and enhance its leading position in the global wind power industry. Given the opportunities and challenges ushered in by industry policy and market development, the Company will adopt the customer-oriented strategy, increase R&D investment, boost innovation capability, strive for technology upgrade and improve product functionality, so as to keep creating value for customers. In the meantime, it will closely monitor the change of exchange rate and interest rate and strengthen capital management to reduce exchange risk.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Management Discussion and Analysis

Corporate Competitive Advantages

i. Market Position

Goldwind is one of the longest-established WTG manufacturers in China. During more than ten years of development, we have matured into a leading domestic manufacturer and global comprehensive wind power solutions provider. Our 1.5MW, 2.5MW, 3.0MW and 6.0MW DDPM WTG series represent the most promising technology in the global wind power industry. Goldwind has consistently ranked first in China’s wind power manufacturing market for six years. We have sustained our market leadership for many years.

ii. Products and Technology

Goldwind’s DDPM WTGs are known for their superior performance, including high efficiency, low operations and maintenance costs, grid-friendly features and high availability. Our products are widely recognised by our customers and represent a leading global wind power technology. We have seven R&D centres in the world and more than two thousand seasoned R&D personnel with extensive industry experience, contributing to the advancement of our new products and technology. We have developed a diversified and serialized product portfolio, including specialised WTGs for different terrains and climate conditions to satisfy the diverse demands of our customers. Furthermore, we have reserved the 6MW offshore DDPM WTG for the development of the offshore wind power market. Our diversified products have improved our market position. We currently have a substantial backlog of WTG orders, providing enhanced revenue visibility and demonstrating that our customers value the superior quality of our products and services.

iii. Brand Awareness

Goldwind has successfully established its brand and continues to improve awareness of its products’ advanced technology, superior quality, high efficiency, and excellent after-sales services. We have received excellent praise from the public and gained substantial recognition from government agencies, our customers, our business partners, and investors.

iv. Comprehensive Wind Power Solutions

Goldwind continued to consolidate its position as a leading comprehensive wind power solutions provider, thanks to its advanced technology, products, and extensive experience in wind farm development, operations and maintenance. In addition to sales of WTGs, we continued to expand alternative sources of profit such as wind farm development and sales and wind power services. Over the past years, these businesses have become highly profitable and an important complement to our core business. We have successfully overcome the challenges posed by the market, strengthened our overall competitiveness, and improved our diversified competitive advantages.

v. Internationalisation

Goldwind was one of China’s first wind power manufacturers to expand overseas and we have continued to promote a strategy of internationalisation. By following a principle of “internationalisation through localisation”, we achieved breakthroughs in key target markets in the Americas, Australia and Europe. We continued to make progress in emerging markets in Africa and Asia. Our overseas projects are distributed across six continents.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Other Information

INTERESTS AND SHORT POSITIONS IN SHARES OF THE COMPANY AND ITS ASSOCIATED CORPORATIONS BY DIRECTORS, SUPERVISORS AND CHIEF EXECUTIVE

Based on information known to the Directors, as at 30 June 2017, the interests and short positions of the Directors, Supervisors and the Chief Executive in shares of the Company are set out as follows:

Long position:

			Number of	As a Percentage	As a Percentage
Name	Capacity	Share Category	Shares	of A Shares	of Total Shares
Mr. Wu Gang	Beneficial owner	A Shares	40,167,040	1.80%	1.47%
Mr. Wang Haibo	Beneficial owner	A Shares	550,000	0.02%	0.02%
Mr. Cao Zhigang	Beneficial owner	A Shares	9,918,024	0.44%	0.36%

Other than as disclosed above, as at 30 June 2017, as far as is known to the Directors, none of the Directors, Supervisors or the Chief Executive had any interests or short positions in shares, underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO), or as recorded in the register required to be kept under Section 352 of the SFO, or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code, as set out in Appendix 10 of the Listing Rules.

PURCHASE, SALE AND REDEMPTION OF SHARES

During the six months ended 30 June 2017, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of its securities.

INTERIM DIVIDEND

The Board of the Company has decided not to declare payment of interim dividend for the six months ended 30 June 2017.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Other Information

SHARE CAPITAL STRUCTURE

The particulars of the issued share capital of the Company as at 30 June 2017 are set out as follows:

Share Category	Number of Shares As a Percentage of Total Shares
A Shares H Shares Total	2,235,494,200 81.72% 500,046,800 18.28%
	2,735,541,000 100%

SUBSTANTIAL SHAREHOLDERS

As at 30 June 2017, as far as known to the Directors, the following persons (not being the Directors, the Supervisors and the Chief Executive) had an interest or short position in shares of the Company which would require disclosure under the provisions of Divisions 2 and 3 of Part XV of the SFO:

H Shares:

(L) – Long position, (S) – Short position, (P) – Lending pool

			Number of		As a Percentage	As a Percentage
Name of Shareholder	Capacity		Shares	Total	of H Shares	of Total Shares
Anbang Insurance Group Co., Ltd.1	Interest of controlled corporation		41,224,000 (L)	41,224,000 (L)	8.24%	1.51%
Anbang Life Insurance Co., Ltd.1	Interest of controlled corporation		41,224,000 (L)	41,224,000 (L)	8.24%	1.51%
Anbang Wealth Insurance Co., Ltd.1	Interest of controlled corporation		41,224,000 (L)	41,224,000 (L)	8.24%	1.51%
Anbang Assets Management	Beneficial owner		41,224,000 (L)	41,224,000 (L)	8.24%	1.51%
(Hong Kong) Co., Ltd.1
Value Partners Group Limited2	Interest of controlled corporation		40,936,800 (L)	40,936,800 (L)	8.19%	1.50%
Value Partners Hong Kong Limited2	Interest of controlled corporation		40,936,800 (L)	40,936,800 (L)	8.19%	1.50%
Value Partners Limited2	Beneficial owner		40,936,800 (L)	40,936,800 (L)	8.19%	1.50%
東方證券股份有限公司(DFZQ)3	Beneficial owner		11,318,600 (L)
	Interest of controlled corporation		25,001,800 (L)	36,320,400 (L)	7.26%	1.33%
Value Partners High-Dividend	Beneficial owner		35,414,600 (L)	35,414,600 (L)	7.08%	1.30%
Stocks Fund
International Finance Corporation	Beneficial owner		32,044,600 (L)	32,044,600 (L)	6.41%	1.17%
JP Morgan Chase & Co4	Beneficial owner		2,210,484 (L)	25,895,358 (L)	5.18%	0.95%
	Beneficial owner		944,100 (S)	944,100 (S)	0.19%	0.03%
	Investment manager		12,400 (L)	23,672,474 (P)	4.73%	0.87%
	Custodian corporation/		23,672,474 (L)
		approved lending agent
Value Partners High-Dividend	Beneficial owner		25,400,600 (L)	25,400,600 (L)	5.08%	0.93%
Stocks Fund

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Other Information

Notes:

Anbang Insurance Group Co. Ltd. (“Anbang Group”) holds 99.98% of the equity interests of Anbang Life Insurance Co., Ltd. (“Anbang Life”). Anbang Group and Anbang Life hold 48.92% and 48.65%, respectively, of the equity interests of Anbang Wealth Insurance Co., Ltd. (“Anbang Wealth”). Anbang Wealth holds 100% of the equity interests of Anbang Assets Management (Hong Kong) Co., Ltd. Under the SFO, each of the Anbang Group, Anbang Life and Anbang Wealth is deemed to be interested in the 41,224,000 H Shares held by Anbang Assets Management (Hong Kong) Co., Ltd.
Value Partners Group Limited holds 100% interest in Value Partners Hong Kong Limited, which in turn holds 100% interests in Value Partners Limited. Under the SFO, each of Value Partner Group Limited and Value Partners Hong Kong Limited is deemed to be interested in the 40,936,800 H Shares held by Value Partners Limited.
東方證券股份有限公司(DFZQ) holds 100% interest in 上海東方證券資產管理有限公司. Under the SFO, in addition to the 11,318,600 H Shares directly held by itself, 東方證券股份有限公司(DFZQ) is deemed to be interested in the 25,001,800 H Shares held by 上海東方證券資產管理有限公司.
Among the aggregate interests of JP Morgan Chase & Co, 32,200 shares (short position) were held through listed cash settled derivatives, 538,600 shares (long position) were held though unlisted cash settled derivatives and 180,000 shares (both long and short position) were held through unlisted physical settled derivatives. JP Morgan Chase & Co also had 23,672,474 shares in a lending pool.

A Shares (Long Position):

A Shares (Long Position):
		Number of		As a Percentage	As a Percentage
Name of Shareholder	Capacity	Shares	Total	of A Shares	of Total Shares
Xinjiang Wind Power	Beneficial owner	375,920,386	375,920,386	16.82%	13.74%
China Three Gorges New Energy1	Beneficial owner	276,137,055	663,579,673	29.68%	24.26%
	Interest in controlled corporation	375,920,386
China Three Gorges2	Interest in controlled corporation	663,579,673	663,579,673	29.68%	24.26%
Anbang Insurance Group Co., Ltd.3,4	Beneficial owner	17,113,600	368,833,576	16.50%	13.48%
	Interest in controlled corporation	351,719,976
Anbang Life Insurance Co., Ltd.3,4	Beneficial owner	214,541,738	351,719,976	15.73%	12.86%
	Interest in controlled corporation	137,178,238
Anbang Wealth Insurance Co., Ltd.4	Interest in controlled corporation	113,248,111	113,248,111	5.07%	4.14%
Hexie Health Insurance Co., Ltd.	Beneficial owner	113,248,111	113,248,111	5.07%	4.14%
Anbang Annuity Insurance Co., Ltd.	Beneficial owner	23,930,127	23,930,127	1.07%	0.87%

Notes:

China Three Gorges New Energy directly holds 287,659,287 A Shares. China Three Gorges New Energy and China Three Gorges hold 43.33% of the issued share capital of Xinjiang Wind Power. Under the SFO, besides directly holding interests in our Company, China Three Gorges New Energy is deemed to be interested in the 375,920,386 A Shares held by Xinjiang Wind Power.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Other Information

China Three Gorges is the holding company of China Three Gorges New Energy. Under the SFO, the 375,920,386 A Shares held by Xinjiang Wind Power in which China Three Gorges New Energy is deemed to be interested, and the 287,659,287 A Shares directly held by China Three Gorges New Energy are deemed to be the interests of China Three Gorges in our Company.
Anbang Group holds 99.98% of the equity interests of Anbang Life. Under the SFO, Anbang Group is deemed to be interested in the 214,541,738 A Shares held by Anbang Life.

Anbang Life also holds 86.36% of the equity interests of Anbang Annuity Insurance Co., Ltd. (“Anbang Annuity”). Under the SFO, Anbang Group is deemed to be interested in the 23,930,127 A Shares held by Anbang Annuity.

Anbang Group and Anbang Wealth hold 34.73% and 65.17%, respectively, of the equity interests of Hexie Health Insurance Co., Ltd. (“Hexie Health”). Under the SFO, Anbang Group is deemed to be interested in the 113,248,111 A Shares held by Hexie Health.

Accordingly, aside from directly holding interest in the Company, Anbang Group is deemed to be interested in the 214,541,738 A Shares, the 23,930,127 A Shares and the 113,248,111 A Shares held by Anbang Life, Anbang Annuity, and Hexie Health, respectively.

Under the SFO, aside from the directly holding interests in the Company, Anbang Life is deemed to be interested in the 113,248,111 A Shares and the 23,930,127 A Shares held by Hexie Health and Anbang Annuity, respectively Anbang Wealth is also deemed to be interested in the 113,248,111 A Shares by Hexie Health.

Other than as disclosed above, as at 30 June 2017, as far as is known to the Directors, no other persons (excluding Directors, Supervisors, and the Chief Executive) had an interest or short position in shares of the Company which would require disclosure under the provisions of Divisions 2 and 3 of Part XV of the SFO.

NUMBER OF SHAREHOLDERS

As at 30 June 2017, the total of the Shareholders was 147,132, among which the numbers of holders of A Shares and H Shares were 145,740 and 1,392, respectively.

COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE

The Company has complied with all applicable code provisions under the Corporate Governance Code as set out in Appendix 14 to the Listing Rules.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Other Information

COMPLIANCE WITH THE MODEL CODE

The Company has adopted a code of conduct governing directors’ and supervisors’ dealings in the Company’s securities transactions on terms no less exacting than the required standard set out in the Model Code. Upon specific enquiries by the Company, all Directors and Supervisors have confirmed that they had complied with the provisions of the Model Code during the six months ended 30 June 2017 and up to the Latest Practicable Date.

REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As at 30 June 2017, the Audit Committee consisted of two independent non-executive Directors, namely Mr. Luo Zhenbang and Dr. Tin Yau Kelvin Wong, and one non-executive Director, namely Mr. Zhao Guoqing. The chairman of the Audit Committee was Mr. Luo Zhenbang. The Audit Committee and the Company’s auditors, Ernst & Young, have reviewed the unaudited interim condensed consolidated financial statements of the Group for the six months ended 30 June 2017.

CHANGES TO INFORMATION ON DIRECTORS, SUPERVISORS AND CHIEF EXECUTIVE

On 28 February 2017, Mr. Gao Jianjun was elected as a non-executive Director. On 29 March 2017, Mr. Gao was elected by the Board as a member of the strategic committee of the Company.

On 24 March 2017, Mr. Wang Shiwei resigned as supervisor of the Company. On 28 June 2017, Ms. Xiao Hong was elected as supervisor of the Company at the 2016 AGM.

Aside from disclosed above, as far as is known to the Company, during the six months ended 30 June 2017, there were no changes to information that were required to be disclosed by the Directors, Supervisors and Chief Executive pursuant to paragraphs (a) to (e) and (g) of Rule 13.51(2) of the Listing Rules.

HUMAN RESOURCES

The Company provides management personnel and employees with on-the-job education, training and other opportunities to improve their skills and knowledge. We sign individual employment contracts with our employees, covering, among other items, salaries, benefits, training, workplace health and safety, confidentiality obligations relating to trade secrets, and grounds for termination. Remuneration packages offered to our employees are consistent with the prevailing market terms and reviewed on a regular basis. Discretionary bonuses may be rewarded to employees taking into consideration the Group’s performance and performance of individual employees. The Company provides pension to its employees as a certain percentage of their applicable salary in accordance with relevant laws and regulations of the PRC and abroad, as well as other benefits such as medical insurance and rent discounts.

As at 30 June 2017, the Group had a total of 7,512 employees.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Other Information

INVESTOR RELATIONS

The Company is committed to protecting the interests of its investors. The Company adheres to strict disclosure principles and strives to ensure that the information disclosed in its announcements, circulars and periodic reports are true, accurate and complete, and disclosures are made in a timely manner. In addition, the Company encourages regular communication and interaction with its investors and potential investors in order to allow them to better understand the wind power industry, the Company, and its long-term development strategies. The Company had established the Investor Relations division within its Office of Secretary of the Board which is responsible for organizing investor visits and conferences, responding to queries from the Investor Relations Hotline, attending to the Investor Relations email inbox and SZSE’s investor interactive platform, analyzing information contained in the Company’s disclosure documents and assisting investors with related queries, and updating the “Investor Relations” section on the Company’s website in a timely manner.

During the six months ended 30 June 2017, the Company strictly complied with its disclosure obligations, improved its communications with investors, and strived to provide investors with a fair and transparent investment environment. During the same period, the Company’s Investor Relations division organized two results announcement telephone conferences, and one online Q&A investor interactive session, accommodated a total of 390 investors in such events. In addition, the Company organized 40 investor receptions, attended six analyst conferences during the reporting period, hosted a total of 649 investors in such events.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Report on Review of Interim Condensed Consolidated Financial Statements

Ernst & Young �� Tel ��: +852 2846 9888 22/F, CITIC Tower ��1� Fax ��: +852 2868 4432 1 Tim Mei Avenue ��22� ey.com Central, Hong Kong

To the shareholders of Xinjiang Goldwind Science & Technology Co., Ltd.

(Established in the People’s Republic of China with limited liability)

INTRODUCTION

We have reviewed the accompanying interim condensed consolidated statement of financial position of Xinjiang Goldwind Science & Technology Co., Ltd. (the “Company”) and its subsidiaries (together, the “Group”) as at 30 June 2017 and the related interim condensed consolidated statements of profit or loss and other comprehensive income, changes in equity and cash flows for the six months then ended and explanatory notes. The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim condensed consolidated financial statements to be in compliance with the relevant provisions thereof and International Accounting Standard 34 Interim Financial Reporting (“IAS 34”) issued by the International Accounting Standards Board. The directors of the Company are responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with IAS 34. Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review. Our report is made solely to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.

SCOPE OF REVIEW

We conducted our review in accordance with International Standard on Review Engagements 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the International Auditing and Assurance Standards Board. A review of interim condensed consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

CONCLUSION

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34.

Ernst & Young

Certified Public Accountants Hong Kong 25 August 2017

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the six months ended 30 June 2017

Notes	For the six months ended 30 June
	2017 2016
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

REVENUE 4 Cost of sales Gross profit Other income and gains 4 Selling and distribution expenses Administrative expenses Other expenses Finance costs 6 Share of profits of: Joint ventures Associates PROFIT BEFORE TAX 5 Income tax expense 7 PROFIT FOR THE PERIOD Profit attributable to: Owners of the parent Non-controlling interests
	9,779,768 10,839,588 (6,643,250) (7,518,746)
	3,136,518 3,320,842 370,572 384,881 (735,689) (831,835) (913,331) (787,262) (209,217) (160,477) (395,571) (305,382) 68,049 58,071 14,616 27,076
	1,335,947 1,705,914 (148,493) (199,387)
	1,187,454 1,506,527
	1,132,919 1,450,116 54,535 56,411
	1,187,454 1,506,527

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the six months ended 30 June 2017

Notes	For the six months ended 30 June
	2017 2016
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

OTHER COMPREHENSIVE INCOME/(LOSS) Other comprehensive income/(loss) to be reclassified to profit or loss in subsequent periods (net of tax): Exchange differences on translation of foreign operations Share of other comprehensive income of associates and a joint venture Changes in fair value of available-for-sale investment, net of tax Net other comprehensive income to be reclassified to profit or loss in subsequent periods, net of tax OTHER COMPREHENSIVE INCOME FOR THE PERIOD, NET OF TAX TOTAL COMPREHENSIVE INCOME FOR THE PERIOD, NET OF TAX Total comprehensive income attributable to: Owners of the parent Non-controlling interests EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT Basic and diluted (expressed in RMB per share) 9
	77,809 123,397 43,808 – (22,359) (27,109)
	99,258 96,288
	99,258 96,288
	1,286,712 1,602,815
	1,232,177 1,546,404 54,535 56,411
	1,286,712 1,602,815
	0.31 0.41

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Interim Condensed Consolidated Statement of Financial Position

30 June 2017

Notes	30 June 31 December
	2017 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

NON-CURRENT ASSETS Property, plant and equipment 10 Investment properties Prepaid land lease payments Goodwill Other intangible assets Investments in joint ventures Investments in associates Available-for-sale investments 11 Deferred tax assets 12 Held-to-maturity investments Trade receivables 13 Financial receivables 14 Prepayments, deposits and other receivables 15 Derivative financial instruments 16 Pledged deposits 18 Total non-current assets CURRENT ASSETS Inventories 17 Trade and bills receivables 13 Financial receivables 14 Prepayments, deposits and other receivables 15 Available-for-sale investments 11 Derivative financial instruments 16 Pledged deposits 18 Cash and cash equivalents 18 Assets of disposal groups classified as held for sale Total current assets
	20,071,779 19,478,691 69,352 70,801 306,031 292,332 498,265 474,429 1,507,090 775,804 1,033,259 814,130 468,079 493,832 1,204,287 1,191,325 1,544,675 1,517,391 49,980 49,995 1,878,899 1,857,030 3,158,623 2,451,312 1,773,013 1,594,871 – 1,986 277,405 276,618
	33,840,737 31,340,547
	3,985,277 3,192,280 17,691,913 16,746,456 370,649 336,382 2,337,860 1,977,549 860,000 750,000 31 25,937 46,176 740,196 3,912,127 7,534,171
	29,204,033 31,302,971 1,909,169 1,793,649
	31,113,202 33,096,620

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Interim Condensed Consolidated Statement of Financial Position

30 June 2017 Notes
	30 June 31 December
	2017 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

CURRENT LIABILITIES Trade and bills payables 19 Other payables, advance from customers and acruals 20 Derivative financial instruments 16 Interest-bearing bank and other borrowings 21 Tax payable Provision Liabilities directly associated with the assets classified as held for sale Total current liabilities NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES NON-CURRENT LIABILITIES Trade payables 19 Other payables 20 Interest-bearing bank and other borrowings 21 Deferred tax liabilities 12 Provision Government grants Deferred revenue Total non-current liabilities Net assets EQUITY Equity attributable to owners of the parent Share capital Reserves Non-controlling interests Total equity
	12,645,024 14,472,721 5,576,805 5,026,219 4,324 – 3,823,631 2,672,069 162,452 242,759 1,829,916 1,599,111
	24,042,152 24,012,879 1,115,557 650,100
	25,157,709 24,662,979
	5,955,493 8,433,641
	39,796,230 39,774,188
	808,665 754,661 80,523 109,638 14,938,453 15,419,038 241,754 100,866 2,086,765 2,366,770 303,739 304,770 20,496 19,651
	18,480,395 19,075,394
	21,315,835 20,698,794
	2,735,541 2,735,541 17,850,633 17,240,611
	20,586,174 19,976,152 729,661 722,642
	21,315,835 20,698,794

Wu Gang Director

Wang Haibo Director

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Interim Condensed Consolidated Statement of Changes in Equity

For the six months ended 30 June 2017

Notes	Attributable to owners of the parent
	Share capital Capital reserve Special Reserve Statutory surplus reserve Available- for-sale investment revaluation reserve Exchange fluctuation reserve Other equity instruments Retained profits Total Non- controlling interests Total equity
	(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
	RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

As at 1 January 2017 Profit for the period Other comprehensive income/(loss) for the period: Changes in fair value of available-for-sale investment, net of tax Share of other comprehensive income of associates and a joint venture Exchange differences on translation of foreign operations Total comprehensive income/(loss) for the period Capital contributions from non-controlling shareholders Acquisition of subsidiaries 23 Disposal to non-controlling shareholders Final 2016 dividend declared Dividends declared to non-controlling shareholders Disposal of a subsidiary 24 Transfer to special reserve Utilisation of special reserve Other equity instruments’ distribution At 30 June 2017 As at 1 January 2016 Profit for the period Other comprehensive (loss)/income for the period: Changes in fair value of available-for-sale investment, net of tax Exchange differences on translation of foreign operations Total comprehensive (loss)/income for the period Capital contributions from non-controlling shareholders Acquisition of subsidiaries Disposal to non-controlling shareholders Final 2015 dividend declared Dividends declared to non-controlling shareholders Transfer to special reserve Utilisation of special reserve Issuance of perpetual medium-term notes 22 At 30 June 2016
	2,735,541 8,167,993 – 1,094,426 78,548 (174,476) 1,495,118 6,579,002 19,976,152 722,642 20,698,794
	– – – – – – – 1,132,919 1,132,919 54,535 1,187,454

	– – – – (22,359) – – – (22,359) – (22,359)
	– 43,808 – – – – – – 43,808 – 43,808
	– – – – – 77,809 – – 77,809 – 77,809

	– 43,808 – – (22,359) 77,809 – 1,132,919 1,232,177 54,535 1,286,712
	– – – – – – – – – 30,800 30,800
	– – – – – – – – – 9,831 9,831
	– (4,047) – – – – – – (4,047) 4,047 –
	– – – – – – – (547,108) (547,108) – (547,108)
	– – – – – – – – – (23,523) (23,523)
	– – – – – – – – – (68,671) (68,671)
	– – 14,970 – – – – (14,970) – – –
	– – (14,970) – – – – 14,970 – – –
	– – – – – – – (71,000) (71,000) – (71,000)

	2,735,541 *8,207,754 – 1,094,426 56,189*** (96,667) 1,495,118 *7,093,813 20,586,174 729,661 21,315,835


	2,735,541 8,215,117 – 816,177 119,314 (342,032) – 5,217,329 16,761,446 629,158 17,390,604
	– – – – – – – 1,450,116 1,450,116 56,411 1,506,527

	– – – – (27,109) – – – (27,109) – (27,109)
	– – – – – 123,397 – – 123,397 – 123,397

	– – – – (27,109) 123,397 – 1,450,116 1,546,404 56,411 1,602,815
	– – – – – – – – – 5,126 5,126
	– – – – – – – – – 7,709 7,709
	– (1,265) – – – – – – (1,265) 368 (897)
	– – – – – – – (1,313,060) (1,313,060) – (1,313,060)
	– – – – – – – – – (13,743) (13,743)
	– – 21,221 – – – – (21,221) – – –
	– – (21,221) – – – – 21,221 – – –
	– – – – – – 996,547 – 996,547 – 996,547

	2,735,541 8,213,852 – 816,177 92,205 (218,635) 996,547 5,354,385 17,990,072 685,029 18,675,101

As at 30 June 2017, these reserve accounts comprised the consolidated reserves of RMB17,850,633,000 (unaudited) in the interim condensed consolidated statement of financial position.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Interim Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2017

Notes	For the six months ended 30 June
	2017 2016
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments for: Finance costs 6 Bank interest income 4 Share of profits of joint ventures Share of profits of associates Depreciation 5 Amortisation of prepaid land lease payments 5 Amortisation of other intangible assets 5 Gain on disposal of items of property, plant and equipment 5 Loss on disposal of items of property, plant and equipment 5 Gain on disposal of subsidiaries, including wind farm project companies 4 Gain on remeasurement of fair value of the previously held interest in a subsidiary at its disposal-date fair value in a disposal of a subsidiary 4 Gain on disposal of available-for-sale investments 4 Dividend income from available-for-sale investments 4 (Gain)/loss on disposal of investment in an associate 5 Gain on remeasurement of fair value of the previously held interest in an acquiree at its acquisition-date fair value in a step acquisition of a subsidiary 4 Interests from other investments Fair value losses, net: Derivative financial instruments 5 Impairment of trade and other receivables 5 Reversal of write-down of inventories to net realisable value 5 Government grants and deferred revenue Increase in inventories Increase in trade and bills receivables Increase in prepayments, deposits and other receivables Increase in financial receivables (Decrease)/increase in trade and bills payables Increase in other payables, advances from customers and accruals (Decrease)/increase in provision Increase/(decrease) in government grants and deferred revenue Cash generated used in operations Interest received Income tax paid Net cash flows used in operating activities

	1,335,947 1,705,914


	395,571 305,382
	(39,972) (26,228)
	(68,049) (58,071)
	(14,616) (27,076)
	512,704 383,459
	3,076 3,217
	28,995 32,633
	(149) (692)
	633 2,285
	(56,075) (51,527)
	(37,240) –
	(26,840) (98,680)
	(9,441) (52,075)
	(5,367) 4,701
	(4,297) –
	(3,369) –

	33,161 845
	132,863 93,619
	(19,098) (2,827)
	(38,619) (4,060)

	2,119,818 2,210,819

	(775,604) (873,846)
	(143,009) (3,235,253)
	(669,359) (425,228)
	(741,578) (422,158)
	(1,887,183) 461,906
	777,667 554,662
	(49,200) 92,753
	30,433 (3,090)

	(1,338,015) (1,639,435)
	29,001 23,515
	(242,517) (485,303)

	(1,551,531) (2,101,223)

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Interim Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2017

Notes	For the six months ended 30 June
	2017 2016
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

CASH FLOWS FROM INVESTING ACTIVITIES Purchases of items of property, plant and equipment Additions to other intangible assets Additions to prepaid land lease payments Acquisition of subsidiaries, net of cash acquired 23 Purchases of interests in joint ventures Purchases of interests in associates Purchases of available-for-sale investments Proceeds from disposal of available-for-sale investments Proceeds from disposal of interests in associates Proceeds from disposal of items of property, plant and equipment and other intangible assets Disposal of subsidiaries, net of cash disposed of 24 Cash and cash equivalents included in assets held for sale Increase in pledged deposits Increase in non-pledged time deposits with original maturity of three months or more when acquired Decrease in advances to joint ventures entities Interest received Dividends received from available-for-sale investments Dividends received from joint ventures and associates Cash from other investments Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES New bank loans and other borrowings Proceeds from issuance of perpetual securities, net of issuance costs Repayment of bank loans and other borrowings Increase in amounts to the non-controlling shareholders of subsidiaries Interest paid Capital contributions from non-controlling shareholders Receipt of government grants Distribution paid relating to the perpetual medium-term notes Dividends paid to non-controlling shareholders Payments of corporate bonds issue expense Net cash flows from financing activities NET DECREASE IN CASH AND CASH EQUIVALENTS Cash and cash equivalents at beginning of the period Effect of foreign exchange rate changes, net CASH AND CASH EQUIVALENTS AT END OF THE PERIOD 18

	(2,292,358) (2,423,329)
	(25,584) (117,453)
	(14,283) (5,516)
	(840,764) (55,896)
	(500) –
	(27,225) (12,500)
	(196,183) (659,350)
	76,840 234,722
	– 38,475
	574 28,774
	(43,838) (240)
	(704) –
	– (158,717)
	(1,298) –
	5,000 –
	– 2,375
	8,441 50,389
	22,974 43,877
	3,212 30,740

	(3,325,696) (3,003,649)


	2,409,736 4,025,154
	– 996,547
	(731,730) (297,630)
	– 6,198
	(409,159) (320,834)
	30,800 5,126
	8,515 –
	(50,000) –
	(23,523) (6,600)
	(4,503) –

	1,230,136 4,407,961

	(3,647,091) (696,911)
	7,526,463 6,141,430
	23,749 11,777

	3,903,121 5,456,296

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

1. CORPORATE AND GROUP INFORMATION

Xinjiang Goldwind Science & Technology Co., Ltd. is a joint stock company with limited liability registered in Xinjiang in the People’s Republic of China (the “PRC”), which was established on 26 March 2001. The Company’s shares have been listed on The Shenzhen Stock Exchange from 26 December 2007 and The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”) from 8 October 2010. The registered office of the Company is located at 107 Shanghai Road, Economic & Technology Development District, Urumqi, Xinjiang, the PRC.

The Group is involved in the following principal activities:

Manufacture and sale of wind turbine generators and wind power components;
Provision of wind power related consultancy, wind farm construction and maintenance services;
Development and operation of wind farms, consisting of wind power generation service provided by the Group’s wind farms as well as the sale of wind farms, if appropriate; and
Development and operation of water treatment plants and finance lease services.

In the opinion of the directors of the Company, the Company has no controlling shareholder.

2. BASIS OF PREPARATION AND CHANGES IN THE ACCOUNTING POLICIES

2.1 Basis of preparation

The interim condensed consolidated financial statements for the six months ended 30 June 2017 have been prepared in accordance with International Accounting Standards 34 Interim Financial Reporting (“IASs 34”) issued by the International Accounting Standards Board (“IASB”) and compliance with the applicable disclosure requirements of the Rules Governing the Listing of Securities on the Hong Kong Stock Exchange (the “Listing Rules”).

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s annual financial statements for the year ended 31 December 2016.

The interim condensed consolidated financial statements have been prepared under the historical cost convention, except for available-for-sale investments, derivative financial instruments and equity investments which have been measured at fair value. Disposal groups held for sale are stated at the lower of their carrying amounts and fair values less costs to sell.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

2. BASIS OF PREPARATION AND CHANGES IN THE ACCOUNTING POLICIES (continued)

2.2 New standards, interpretations and amendments adopted by the Group

The accounting policies adopted in the preparation of the unaudited interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended 31 December 2016, except for the adoption of revised International Financial Reporting Standards (“IFRSs”) effective as of 1 January 2017. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

The nature and the effect of these changes are disclosed below. Although these amendments apply for the first time in 2017, they do not have a material impact on the interim condensed consolidated financial statements of the Group. The nature and the impact of the amendments are described below:

Amendments to IAS 7 Statement of Cash Flows: Disclosure Initiative

The amendments require entities to provide disclosures about changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). On initial application of the amendment, entities are not required to provide comparative information for preceding periods. The Group is not required to provide additional disclosures in its interim condensed consolidated financial statements, but will disclose additional information in its annual consolidated financial statements for the year ended 31 December 2017.

Amendments to IAS 12 Income Taxes: Recognition of Deferred Tax Assets for Unrealised Losses

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how an entity should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.

Entities are required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. Entities applying this relief must disclose that fact.

The Group applied the amendment retrospectively. However, the application has no effect on the Group’s financial position and performance as the Group has no deductible temporary differences or assets that are in the scope of the amendments.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

2. BASIS OF PREPARATION AND CHANGES IN THE ACCOUNTING POLICIES (continued)

2.2 New standards, interpretations and amendments adopted by the Group (continued)

Amendments to IFRS 12 included in Annual Improvements Cycle – 2014-2016 Disclosure of Interests in Other Entities: Clarification of the scope of disclosure requirements in IFRS 12

The amendments clarify that the disclosure requirements in IFRS 12, other than those in paragraphs B10 to B16, apply to an entity’s interest in a subsidiary, a joint venture or an associate (or a portion of its interest in a joint venture or an associate) that is classified (or included in a disposal group that is classified) as held for sale.

The amendment is not expected to have any significant impact on the Group’s interim condensed consolidated financial statements.

2.3 Issued but not yet effective IFRSs

The Group has not applied the following new and revised IFRSs, that have been issued but are not yet effective, in the interim condensed consolidated financial statements.

Amendments to IFRS 2	Classification and Measurement of Share-based Payment Transactions 1
Amendments to IFRS 4	Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts 1
IFRS 9	Financial Instruments 1
Amendments to IFRS 10 and	Sale or Contribution of Assets between an Investor and its Associate or Joint
IAS 28	Venture 4
IFRS 15	Revenue from Contracts with Customers 1
Amendments to IFRS 15	Clarifications to IFRS 15 Revenue from Contracts with Customers 1
IFRS 16	Leases 2
Amendments to IAS 40	Transfers of Investment Property 1
IFRIC 22	Foreign Currency Transactions and Advance consideration 1
IFRIC 23	Uncertainty over Income Tax Treatments 2
IFRS 17	Insurance Contracts 3
Annual Improvements	Amendments to IFRS 1 and Amendments to IAS 281
2014-2016 Cycle

1 Effective for annual periods beginning on or after 1 January 2018
2 Effective for annual periods beginning on or after 1 January 2019
3 Effective for annual periods beginning on or after 1 January 2021
4 No mandatory effective date yet determined but available for adoption

The Group is in the process of making an assessment of the impact of these new and revised IFRSs upon initial application.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

3. OPERATING SEGMENT INFORMATION

For management purposes, the Group is organised into business units based on their products and services and has four reportable operating segments as follows:

(a) the wind turbine generator manufacturing and sale segment engages in the research and development, manufacture and sale of wind turbine generators and wind power components;
(b) the wind power services segment provides wind power related consultancy, wind farm construction and maintenance services;
(c) the wind farm development segment engages in the development of wind farms, which consists of wind power generation service provided by the Group’s wind farms as well as the sale of wind farms, if appropriate; and
(d) the others segment mainly engages in the operation of water treatment plants under the service concession arrangement and finance leasing services, which are comprised of direct finance leasing and sale-lease back.

Management monitors the results of the Group’s operating segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on reportable segment profit or loss, which is a measure of adjusted profit or loss before tax. The adjusted profit or loss before tax is measured consistently with the Group’s profit before tax.

Intersegment sales and transfers are transacted with reference to the selling prices used for sales made to third parties at the then prevailing market prices.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

3. OPERATING SEGMENT INFORMATION (continued)

The following tables present revenue and profit information about the Group’s operating segments for the six months ended 30 June 2017 and 2016:

For the six months ended 30 June 2017

	Wind turbine generator manufacturing and sale Wind power services Wind farm development Others Eliminations Total
	(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
	RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Segment revenue: Sales to external customers Intersegment sales Total revenue Segment results: Interest income Finance costs Profit before tax Other segment information: Share of profits and losses of: Joint ventures Associates Depreciation and amortisation Reversal of write-down of inventories Impairment of trade and other receivables Product warranty provision Capital expenditure(1)

	7,264,258 709,831 1,657,481 148,198 – 9,779,768
	786,224 135,975 – 2,981 (925,180) –

	8,050,482 845,806 1,657,481 151,179 (925,180) 9,779,768


	466,753 53,771 1,094,581 122,901 (46,460) 1,691,546
	124,249 4,609 48,466 25,183 (162,535) 39,972
	(56,434) – (450,774) (12,831) 124,468 (395,571)

	534,568 58,380 692,273 135,253 (84,527) 1,335,947




	– – 69,778 (1,729) – 68,049
	2 (845) 6,704 8,755 – 14,616
	85,656 4,774 535,872 7,599 (89,126) 544,775
	(19,098) – – – – (19,098)
	123,389 9,374 100 – – 132,863
	329,974 – – – (5,190) 324,784
	196,168 22,132 2,560,319 2,707 (208,215) 2,573,111

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

3. OPERATING SEGMENT INFORMATION (continued)

For the six months ended 30 June 2016

==> picture [486 x 81] intentionally omitted <==

----- Start of picture text -----

Wind turbine
generator
manufacturing Wind power Wind farm
and sale services development Others Eliminations Total
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
----- End of picture text -----

	generator manufacturing and sale Wind power services Wind farm development Others Eliminations Total (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Segment revenue: Sales to external customers Intersegment sales Total revenue Segment results: Interest income Finance costs Profit before tax Other segment information: Share of profits and losses of: Joint ventures Associates Depreciation and amortisation Reversal of write-down of inventories Impairment of trade and other receivables Reversal of impairment of trade and other receivables Product warranty provision Capital expenditure(1)	9,134,944 445,494 1,138,642 120,508 – 10,839,588 1,112,687 140,979 – 2,984 (1,256,650) –
	10,247,631 586,473 1,138,642 123,492 (1,256,650) 10,839,588
	1,155,377 16,288 694,099 268,946 (149,642) 1,985,068 150,694 83 69,851 6,571 (200,971) 26,228 (108,000) – (327,180) (3,536) 133,334 (305,382)
	1,198,071 16,371 436,770 271,981 (217,279) 1,705,914
	– – 58,071 – – 58,071 2,523 (1,141) 5,695 19,999 – 27,076 89,447 3,756 355,940 5,403 (35,237) 419,309 (2,827) – – – – (2,827) 96,831 6,185 5,475 208 – 108,699 (14,911) – – (169) – (15,080) 473,820 – – – (52,015) 421,805 150,797 5,765 2,283,154 145,629 (266,741) 2,318,604

(1) Capital expenditure mainly consists of additions to property, plant and equipment, other intangible assets and prepaid land lease payments, including assets from the acquisition of subsidiaries.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

3. OPERATING SEGMENT INFORMATION (continued)

The following table presents segment assets and liabilities of the Group’s operating segments as at 30 June 2017 and 31 December 2016:

==> picture [486 x 68] intentionally omitted <==

----- Start of picture text -----

Wind turbine
generator
manufacturing Wind power Wind farm
and sale services development Others Eliminations Total
RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000
----- End of picture text -----

	Wind turbine generator manufacturing and sale RMB’000	Wind power services RMB’000	Wind farm development RMB’000	Others RMB’000	Eliminations RMB’000	Total RMB’000
Segment assets
30 June 2017 (Unaudited)	47,106,766	2,330,157	34,074,393	6,357,631	(24,915,008)	64,953,939

31 December 2016 (Audited)	48,080,216	2,704,230	31,715,355	5,712,495	(23,775,129)	64,437,167

Segment liabilities
30 June 2017 (Unaudited)	26,898,072	923,600	24,124,064	3,140,618	(11,448,250)	43,638,104

31 December 2016 (Audited)	27,742,645	1,366,314	22,338,464	2,683,221	(10,392,271)	43,738,373

Investments in joint ventures
30 June 2017 (Unaudited)	1,403	–	767,021	388,577	(123,742)	1,033,259

31 December 2016 (Audited)	852	–	599,498	337,524	(123,744)	814,130

Investments in associates
30 June 2017 (Unaudited)	49,332	7,381	270,146	183,594	(42,374)	468,079

31 December 2016 (Audited)	82,480	9,428	280,874	179,804	(58,754)	493,832

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

3. OPERATING SEGMENT INFORMATION (continued)

Geographical information

(a) Revenue from external customers

	For the six months ended 30 June
	2017 2016
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Mainland China Overseas
	8,716,771 10,186,494 1,062,997 653,094
	9,779,768 10,839,588

The revenue information above is based on the locations of the customers.

(b) Non-current assets

	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

Mainland China United States of America Germany Panama Australia Others
	22,426,803 21,836,370 530,671 531,583 539,111 451,801 622,501 741,942 969,566 284,384 366,427 17,190
	25,455,079 23,863,270

The non-current asset information above is based on the locations of the assets and excludes financial instruments and deferred tax assets.

Information about major customers

For the six months ended 30 June 2017, revenues of RMB1,392,665,000 and RMB1,304,259,000 (six months ended 30 June 2016: RMB1,391,612,000 and RMB1,308,146,000) were derived from sales by the wind turbine generator manufacturing and sale segment to two customers, which individually accounted for over 10% of the Group’s total revenue, including sales to a group of entities which are known to be under common control with those customers.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

4. REVENUE, OTHER INCOME AND GAINS

Revenue represents the net invoiced value of goods sold, after allowances for returns and trade discounts; an appropriate proportion of contract revenue of construction contracts; and the value of services rendered; and gross rental income received and receivable from investment properties during the six months ended 30 June 2017 and 2016.

An analysis of the Group’s revenue, other income and gains is as follows:

	For the six months ended 30 June
	2017 2016
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Revenue Sale of wind turbine generators and wind power components Wind power services Wind farm generation Others Other income and gains Bank interest income Dividend income from available-for-sale investments Gross rental income Government grants and deferred revenue Value-added tax refund Insurance compensation on product warranty expenditures Gain on disposal of investment in an associate Gain on disposal of subsidiaries, including wind farm project companies Gain on remeasurement of fair value of the previously held interest in a subsidiary at its disposal-date fair value in a disposal of a subsidiary Gain on disposal of available-for-sale investments Gain on disposal of items of property, plant and equipment Gain on remeasurement of fair value of the previously held interest in an acquiree at its acquisition-date fair value in a step acquisition of a subsidiary Gain on bargain purchase Gain on foreign exchange differences Others
	7,264,258 9,134,944 709,831 445,494 1,657,481 1,138,642 148,198 120,508
	9,779,768 10,839,588
	39,972 26,228 9,441 52,075 4,859 3,767 58,401 18,463 36,938 29,022 61,613 80,764 5,367 – 56,075 51,527 37,240 – 26,840 98,680 149 692 4,297 – – 344 5,475 – 23,905 23,319
	370,572 384,881

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

5. PROFIT BEFORE TAX

The Group’s profit before tax is arrived at after charging/(crediting):

Notes	For the six months ended 30 June
	2017 2016
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Cost of inventories sold Cost of services provided Cost of wind power generation Cost of others Depreciation provided for: Property, plant and equipment 10 Investment properties Amortisation of prepaid land lease payments Amortisation of other intangible assets Impairment of trade receivables 13 Reversal of impairment of trade receivables 13 Impairment of other receivables 15 Reversal of impairment of other receivables 15 Impairment of write-down of inventories Reversal of write-down inventories
	5,486,348 6,747,268 538,995 357,319 565,620 402,901 52,287 11,258
	6,643,250 7,518,746
	511,256 382,011 1,448 1,448
	512,704 383,459
	3,076 3,217 28,995 32,633
	32,071 35,850
	203,032 108,699 (70,269) (7,044)
	132,763 101,655
	100 – – (8,036)
	100 (8,036)
	5,526 – (24,624) (2,827)
	(19,098) (2,827)

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

5. PROFIT BEFORE TAX (continued)

Notes	For the six months ended 30 June
	2017 2016
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Gain on disposal of items of property, plant and equipment Loss on disposal of items of property, plant and equipment Lease expenses under operating leases of land and buildings Auditors’ remuneration Employee benefit expenses (including directors’, supervisors’ and the chief executive’s remuneration): Wages and salaries Pension scheme contributions (defined contribution scheme) Welfare and other expenses Research and development costs: Staff costs Amortisation and depreciation Materials expenditure and others Government grants and deferred revenue Value-added tax refund Product warranty provision: Additional provision Reversals of unutilised provision
	(149) (692) 633 2,285
	484 1,593
	6,928 11,199 1,651 1,651 567,527 631,161 50,489 59,377 105,175 101,708
	723,191 792,246
	203,177 151,626 36,965 27,591 158,735 110,285
	398,877 289,502
	(58,401) (18,463) (36,938) (29,022) 417,041 441,686 (92,257) (19,881)
	324,784 421,805

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

5. PROFIT BEFORE TAX (continued)

PROFIT BEFORE TAX(continued)
	Notes	For the six months 2017 (Unaudited) RMB’000	ended 30 June 2016 (Unaudited) RMB’000
Insurance compensation on product warranty expenditures		(61,613)	(80,764)
Foreign exchange differences, net		(5,475)	28,463
Fair value losses, net:
Derivative financial instruments
– transactions not qualifying as hedges		33,161	845
Dividend income from available-for-sale investments		(9,441)	(52,075)
Bank interest income		(39,972)	(26,228)
Gain on disposal of subsidiaries,
including wind farm project companies		(56,075)	(51,527)
Gain on remeasurement of fair value of the previously
held interest in a subsidiary at its disposal-date fair value
in a disposal of a subsidiary		(37,240)	–
Gain on disposal of available-for-sale investments		(26,840)	(98,680)
Gain on remeasurement of fair value of the previously
held interest in an acquiree at its acquisition-date fair value
in a step acquisition of a subsidiary		(4,297)	–
Gain on bargain purchase		–	(344)
(Gain)/loss on disposal of investment in an associate		(5,367)	4,701

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

6. FINANCE COSTS

FINANCE COSTS
	For the six months ended 30 June
	2017 2016
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Interest on bank loans and other borrowings Less: Interest capitalised
	400,118 318,392 (4,547) (13,010)
	395,571 305,382

7. INCOME TAX EXPENSE

The Company and four subsidiaries of the Company have been identified as “high and new technology enterprise” and are entitled to a preferential income tax at a rate of 15% for the six months ended 30 June 2017 and 2016 in accordance with the PRC Corporate Income Tax Law.

The certain subsidiaries of the Company in Mainland China, which were set up after 1 January 2008 and are engaged in public infrastructure projects and urban water treatment projects, are each entitled to a tax holiday of a threeyear full exemption followed by a three-year 50% exemption commencing from their respective first year generating operating income.

The certain subsidiaries of the Company in Mainland China were taxed at a preferential rate of 15% primarily due to their status as entities engaging in development projects supported by the government in the western region of the PRC.

Except for certain preferential treatment available to certain subsidiaries of the Company and the Company as mentioned above, the entities within the Group in Mainland China were subject to corporate income tax at a rate of 25%.

The certain subsidiaries of the Company in Overseas are subject to corporate income tax at a rate vary from 15% to 35%. Taxes on profits assessable elsewhere have been calculated at the rate of tax prevailing in the jurisdictions in which the Group operates, based on existing legislation, interpretations and practices in respect thereof.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

7. INCOME TAX EXPENSE (continued)

Hong Kong profits tax has been provided at the rate of 16.5% (six month ended 30 June 2016: 16.5%) on the estimated assessable profits arising in Hong Kong during the year.

	For the six months ended 30 June
	2017 2016
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Current – Hong Kong – Mainland China – Elsewhere Deferred (note 12) Tax charge for the period
	572 14,176 134,511 247,313 38,546 9,798
	173,629 271,287 (25,136) (71,900)
	148,493 199,387

A reconciliation of the tax expense applicable to profit before tax at the statutory rate applicable to the Company to the tax expense at the Group’s effective tax rate is as follows:

	For the six months ended 30 June
	2017 2016
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Profit before tax Tax at the statutory tax rate of 25% Effect of different income tax rates for overseas entities Effect of the preferential income tax rates for domestic entities Tax losses not recognised Tax losses utilised from previous periods Effect of not recognised deferred tax assets due to asset impairment Income not subject to tax Expenses not deductible for tax Profits and losses attributable to joint ventures Profits and losses attributable to associates Others Tax charge for the period at the effective rate
	1,335,947 1,705,914 333,987 426,479 4,870 (6,031) (187,999) (183,709) 19,603 10,457 (7,589) (12,996) 14 68 (3,262) (13,019) 1,611 1,215 (17,012) (14,518) (3,654) (6,769) 7,924 (1,790)
	148,493 199,387

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

8. DIVIDENDS

The proposed final stock dividends 3 shares (tax included) and cash dividends of RMB2.00 (tax included) per each 10 shares, which amounted to RMB547,108,000 of cash dividends for the year ended 31 December 2016, were approved by the Company’s shareholders on 28 June 2017.

The board of directors of the Company does not recommend the payment of any interim dividend for the six months ended 30 June 2017 (six months ended 30 June 2016: Nil).

9. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT

On 24 August 2017, the Company has paid 3 shares of stock dividends to all ordinary equity holders per each 10 shares on the basis of the ordinary shares of 2,735,541,000 at the end of 2016. The dividend distribution of the above shares happened after the balance sheet date but before the approval of the financial statements, and the earnings per share shall be retrospective adjusted for all such events that happen in the reporting period. The adjusted number of ordinary shares was 3,556,203,300 shares. Basic earnings per share for the same period last year should be calculated based on the adjusted ordinary shares. The calculation of the basic earnings per share amount for the period is based on the number of the adjusted ordinary shares of 3,556,203,300 (six months ended 30 June 2016: 3,556,203,300) during the period.

For those financial instruments classified as equity, if the distributions are cumulative, the undeclared amounts of the cumulative distributions were deducted in arriving at earnings for the purposes of the basic earnings per share calculation. On the other hand, if the distributions are non-cumulative, only the amount of dividends declared in respect of the year should be deducted in arriving at the profit attributable to ordinary equity holders.

The Group had no potentially dilutive ordinary shares in issue during the six months ended 30 June 2017 and 2016.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

9. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT (continued)

The calculation of basic earnings per share is based on:

	For the six months ended 30 June
	2017 2016
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Profit attributable to ordinary equity holders of the parent Less: Distribution relating to the perpetual medium-term notes (i) Profit used to determine basic earnings per share Weighted average number of ordinary shares in issue Basic earnings per shares (expressed in RMB per share)
	1,132,919 1,450,116 (35,208) –
	1,097,711 1,450,116
	3,556,203 3,556,203
	0.31 0.41

(i) The long-term option-embedded medium-term notes (the “Perpetual Medium-term Notes”) issued by the Company in May 2016 and September 2016 were classified as other equity instruments with deferrable cumulative interest distributions and payments. The Perpetual Medium-term Notes interests which have been generated but not yet declared, from 1 January 2017 to 30 June 2017, were deducted from earnings when calculating the earnings per share for the six months ended 30 June 2017.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

10. PROPERTY, PLANT AND EQUIPMENT

	For the six months ended 30 June 2017
	Buildings Machinery Vehicles Electronic equipment and others Construction in progress Total
	(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
	RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Cost: At 1 January 2017 Additions Disposals Acquisition of subsidiaries (note 23) Disposal of subsidiaries (note 24) Transfers Transfer to prepaid land lease payments Exchange realignment At 30 June 2017 Accumulated depreciation and impairment: At 1 January 2017 Depreciation provided during the year (note 5) Disposals Disposal of subsidiaries (note 24) Exchange realignment At 30 June 2017 Net carrying amount: At 30 June 2017 At 1 January 2017

	895,748 17,667,432 126,664 499,378 2,411,717 21,600,939
	197 55,820 7,687 49,693 1,180,555 1,293,952
	(1,479) (6,826) (5,074) (11,026) – (24,405)
	– 5,901 – 34 297,201 303,136
	– (555,641) (821) (3,545) (4,477) (564,484)
	– 1,430,501 – – (1,430,501) –
	– – – – (7,514) (7,514)
	4,948 (20,409) 644 2,929 (2,404) (14,292)

	899,414 18,576,778 129,100 537,463 2,444,577 22,587,332


	(145,091) (1,686,485) (41,954) (222,133) (26,585) (2,122,248)
	(13,526) (450,771) (6,866) (40,093) – (511,256)
	324 4,883 3,433 8,077 – 16,717
	– 100,352 164 2,832 – 103,348
	(952) 480 (253) (1,389) – (2,114)

	(159,245) (2,031,541) (45,476) (252,706) (26,585) (2,515,553)


	740,169 16,545,237 83,624 284,757 2,417,992 20,071,779


	750,657 15,980,947 84,710 277,245 2,385,132 19,478,691

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

10. PROPERTY, PLANT AND EQUIPMENT (continued)

	Year ended 31 December 2016
	Buildings Machinery Vehicles Electronic equipment and others Construction in progress Total
	(Audited) (Audited) (Audited) (Audited) (Audited) (Audited)
	RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Cost: At 1 January 2016 Additions Disposals Acquisition of subsidiaries Disposal of subsidiaries Transfers Transfer to prepaid land lease payments Disposal groups classified as held for sale Exchange realignment At 31 December 2016 Accumulated depreciation and impairment: At 1 January 2016 Depreciation provided during the year Disposals Acquisition of subsidiaries Disposal of subsidiaries Disposal groups classified as held for sale Exchange realignment At 31 December 2016 Net carrying amount: At 31 December 2016 At 1 January 2016

	839,452 9,509,701 92,019 361,222 7,502,255 18,304,649
	16,432 50,503 40,960 127,728 4,803,394 5,039,017
	(3,191) (7,355) (5,992) (12,377) – (28,915)
	– – – 2,677 1,230 3,907
	– (80) (293) – (164,186) (164,559)
	40,979 8,919,397 – 18,829 (8,979,205) –
	– – – – (95,856) (95,856)
	– (878,382) (653) (535) (655,915) (1,535,485)
	2,076 73,648 623 1,834 – 78,181

	895,748 17,667,432 126,664 499,378 2,411,717 21,600,939


	(119,064) (939,192) (34,243) (170,453) (26,585) (1,289,537)
	(25,804) (764,592) (10,455) (57,619) – (858,470)
	170 6,486 2,969 6,699 – 16,324
	– – – (109) – (109)
	– 9 45 – – 54
	– 22,331 93 69 – 22,493
	(393) (11,527) (363) (720) – (13,003)

	(145,091) (1,686,485) (41,954) (222,133) (26,585) (2,122,248)


	750,657 15,980,947 84,710 277,245 2,385,132 19,478,691


	720,388 8,570,509 57,776 190,769 7,475,670 17,015,112

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

11. AVAILABLE-FOR-SALE INVESTMENTS

	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

Listed equity investment, at fair value Unlisted equity investments, at cost Other financial assets Portion classified as non-current assets Current portion
	479,700 502,059 724,587 689,266 860,000 750,000
	2,064,287 1,941,325 (1,204,287) (1,191,325)
	860,000 750,000

12. DEFERRED TAX

The movements in deferred tax assets and liabilities during the period are as follows:

For the six months ended 30 June 2017

Deferred tax assets

	Provision for impairment of assets Tax losses Provisions and accruals Government grants received not yet recognised as income Unrealised gains arising from intra-group sales Others Total
	(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
	RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

At 1 January 2017 Deferred tax charged/(credited) to profit or loss during the period (note 7) At 30 June 2017
	166,258 33,492 692,349 11,246 584,553 29,493 1,517,391
	12,250 47,627 (37,034) (2,309) 4,811 1,939 27,284

	178,508 81,119 655,315 8,937 589,364 31,432 1,544,675

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

12. DEFERRED TAX (continued)

Deferred tax liabilities

	Excess of fair values of identifiable assets over carrying values arising from acquisition of subsidiaries Dividend withholding tax Depreciation of assets Others Total
	(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
	RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

At 1 January 2017 Deferred tax (credited)/charged to profit or loss during the period (note 7) Deferred tax generated from acquisition of subsidiaries (note 23) Exchange realignment At 30 June 2017
	57,309 21,108 14,569 7,880 100,866
	(955) 3,438 536 (871) 2,148
	138,570 – – – 138,570
	170 – – – 170

	195,094 24,546 15,105 7,009 241,754

For the year ended 31 December 2016

Deferred tax assets

	Provision for impairment of assets Tax losses Provisions and accruals Government grants received not yet recognised as income Unrealised gains arising from intra-group sales Others Total
	(Audited) (Audited) (Audited) (Audited) (Audited) (Audited) (Audited)
	RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

At 1 January 2016 Deferred tax charged/(credited) to profit or loss during the year Deferred tax generated from acquisition of subsidiaries At 31 December 2016
	140,502 48,064 611,688 8,660 495,558 33,964 1,338,436
	25,756 (14,572) 80,661 2,586 88,995 (4,658) 178,768
	– – – – – 187 187

	166,258 33,492 692,349 11,246 584,553 29,493 1,517,391

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

12. DEFERRED TAX (continued)

Deferred tax liabilities

	Excess of fair values of identifiable assets and liabilities over carrying values arising from acquisition of subsidiaries Dividend withholding tax Depreciation of assets Others Total
	(Audited) (Audited) (Audited) (Audited) (Audited)
	RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

At 1 January 2016 Deferred tax (credited)/charged to profit or loss during the year Deferred tax generated from acquisition of subsidiaries Exchange realignment At 31 December 2016
	38,341 12,187 837 6,724 58,089
	(2,600) 8,921 13,732 1,156 21,209
	24,461 – – – 24,461
	(2,893) – – – (2,893)

	57,309 21,108 14,569 7,880 100,866

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

13. TRADE AND BILLS RECEIVABLES

TRADE AND BILLS RECEIVABLES
	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

Trade receivables Bills receivable Retention money receivables Provision for impairment Portion classified as non-current assets (i) Current portion
	15,212,257 13,613,120 1,573,693 2,198,844 3,721,112 3,599,536 (936,250) (808,014)
	19,570,812 18,603,486 (1,878,899) (1,857,030)
	17,691,913 16,746,456

The Group normally allows a credit period of not more than three months to its customers. For retention money receivables, the due dates usually range from two to five years after the completion of commissioning for wind turbines. The Group seeks to maintain strict control over its outstanding receivables. Overdue balances are reviewed regularly by senior management. In view of the aforementioned and the fact that the Group’s trade and bills receivables relate to a large number of diversified customers, there is no significant concentration of credit risk. The Group does not hold any collateral or other credit enhancements over its trade receivable balances. Trade and bills receivables are non-interest-bearing.

(i) The non-current portion of trade receivables mainly represented the amount of receivables for retentions held by customers at 30 June 2017 and 31 December 2016.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

13. TRADE AND BILLS RECEIVABLES (continued)

An ageing analysis of trade and bills receivables as at the end of the reporting period, based on the invoice date and net of provisions, is as follows:

	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

Within 3 months 3 to 6 months 6 months to 1 year 1 to 2 years 2 to 3 years Over 3 years
	6,113,338 6,200,020 2,628,089 1,966,881 3,569,500 2,747,218 3,889,348 4,674,265 2,169,135 1,500,497 1,201,402 1,514,605
	19,570,812 18,603,486

The movements in the provision for impairment of trade and bills receivables are as follows:

	For the six months ended For the year ended
	30 June 2017 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

At beginning of the period/year Impairment losses recognised (note 5) Impairment losses reversed (note 5) Amounts written off as uncollectible Exchange realignment At end of the period/year
	808,014 605,386 203,032 353,094 (70,269) (140,977) (4,500) (11,700) (27) 2,211
	936,250 808,014

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

13. TRADE AND BILLS RECEIVABLES (continued)

Included in the above provision for impairment of trade receivables is a provision for individually impaired trade receivables of RMB170,087,000 (31 December 2016: RMB186,381,000) with a carrying amount before provision of RMB261,891,000 (31 December 2016: RMB273,019,000).

The individually impaired trade receivables relate to customers that were in default in principal payments and only a portion of the receivables is expected to be recovered.

The ageing analysis of the trade receivables that are not considered to be impaired is as follows:

	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

Neither past due nor impaired Less than 6 months past due
	10,790,343 8,810,463 3,223,805 4,413,572
	14,014,148 13,224,035

Receivables that were neither past due nor impaired relate to a large number of diversified customers for whom there was no recent history of default.

Receivables that were past due but not impaired relate to a number of independent customers that have a good track record with the Group. Based on past experience, the directors are of the opinion that no provision for impairment is necessary in respect of these balances as there has not been a significant change in credit quality and the balances are still considered fully recoverable.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

13. TRADE AND BILLS RECEIVABLES (continued)

The amount due from Xinjiang Wind Power Company Limited (“Xinjiang Wind Power”)（新疆風能有限責任公司）, a shareholder holding a 13.74% interest in the Company, and the amounts due from the Group’s joint ventures and associates included in the Group’s trade and bills receivables are as follows:

	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

A shareholder holding a 13.74% interest in the Company Joint ventures Associates
	504 504 18,346 36,130 318,026 284,040
	336,876 320,674

The above balances are unsecured, non-interest-bearing and repayable on credit terms similar to those offered to the independent customers of the Group.

14. FINANCIAL RECEIVABLES

FINANCIAL RECEIVABLES
	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

Receivables for service concession agreements Receivables for finance lease services Portion classified as non-current assets Current portion
	986,640 878,041 2,542,632 1,909,653
	3,529,272 2,787,694 (3,158,623) (2,451,312)
	370,649 336,382

Receivables for service concession agreements arose from service concession contracts to build and operate water treatment plants and were recognised to the extent that the Group has an unconditional right to receive cash from or at the direction of the designees.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

14. FINANCIAL RECEIVABLES (continued)

Receivables for finance lease services arose from finance lease contracts to lease equipment to clients and were recognised to the extent that the Group has the right to collect rental income from clients.

Financial receivables were unbilled receivables, and were neither past due nor impaired. Financial receivables were mainly due from governmental authorities in Mainland China or several clients which have good credit records. The directors are of the opinion that no provision for impairment is necessary in respect of these balances as there has not been a significant change in credit quality and the balances are still considered fully recoverable. The Group does not hold any collateral or other credit enhancements over these balances.

15. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES

	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

Advances to suppliers Prepayments Deductible VAT Deposits and other receivables Provision for impairment of deposits and other receivables Portion classified as non-current assets (i) Current portion
	919,833 677,776 104,499 196,593 1,807,336 1,749,497 1,285,912 955,250 (6,707) (6,696)
	4,110,873 3,572,420 (1,773,013) (1,594,871)
	2,337,860 1,977,549

(i) The non-current portion of deposits and other receivables mainly represented advances to suppliers and non-current deductible input value-added tax at 30 June 2017 and 31 December 2016.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

15. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES (continued)

Movements in the provision for impairment of other receivables are as follows:

	For the six months ended For the year ended
	30 June 2017 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

At beginning of the period/year Impairment losses recognised (note 5) Impairment losses reversed (note 5) Amounts written off as uncollectible Exchange realignment At end of the period/year
	6,696 21,422 100 5,920 – (15,651) (100) (5,000) 11 5
	6,707 6,696

The amounts due from the Group’s joint ventures and associates included in the prepayments, deposits and other receivables are as follows:

	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

Joint ventures Associates
	4,104 23,819 4,736 24,481
	8,840 48,300

The above amounts are unsecured, non-interest-bearing and repayable on credit terms similar to those offered to the independent third parties.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

16. DERIVATIVE FINANCIAL INSTRUMENTS

17.	Assets Interest rate swap, current portion Forward currency contracts, current portion Interest rate swap, non-current portion Liabilities Forward currency contracts, current portion INVENTORIES	As at 30 June 2017 As at 31 December 2016
		(Unaudited) (Audited)
		RMB’000 RMB’000


		31 –
		– 25,937
		– 1,986
		4,324 –

		As at 30 June 2017 As at 31 December 2016
		(Unaudited) (Audited)
		RMB’000 RMB’000

	Raw materials Work in progress, finished and semi-finished goods Low-value consumables and others
		1,429,956 1,130,342 2,521,701 2,058,015 33,620 3,923
		3,985,277 3,192,280

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

18. CASH AND CASH EQUIVALENTS AND PLEDGED DEPOSITS

	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

Cash and bank balances Time deposits Less: Pledged time deposits: – Bank loans – Letters of credit – Guarantee issued – Provision for risk – Others Cash and cash equivalents in the interim condensed consolidated statement of financial position Less: Non-pledged time deposits with original maturity of more than three months when acquired Cash and cash equivalents in the interim condensed consolidated statement of cash flows Pledged deposits Portion classified as non-current assets Current portion Cash and cash equivalents and pledged deposits denominated in: – RMB – United States dollar – Euro – Hong Kong dollar – Australian dollar – Other currencies
	3,355,729 5,848,561 879,979 2,702,424
	4,235,708 8,550,985 (3,770) (136,915) (7,510) (12,102) (2,852) (590,148) (277,405) (276,618) (32,044) (1,031)
	(323,581) (1,016,814)
	3,912,127 7,534,171 (9,006) (7,708)
	3,903,121 7,526,463
	323,581 1,016,814 (277,405) (276,618)
	46,176 740,196
	3,091,554 6,271,906 526,121 1,766,550 367,390 313,817 22,939 48,465 203,193 136,453 24,511 13,794
	4,235,708 8,550,985

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

19. TRADE AND BILLS PAYABLES

TRADE AND BILLS PAYABLES
	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

Trade payables Bills payable Portion classified as non-current liabilities (i) Current portion
	9,494,737 10,348,261 3,958,952 4,879,121
	13,453,689 15,227,382 (808,665) (754,661)
	12,645,024 14,472,721

(i) The non-current portion of trade payables mainly represented retention amounts held by the Group as at 30 June 2017 and 31 December 2016.

Trade and bills payables are non-interest-bearing and are normally settled in 180 days. For the retention payables in respect of warranties granted by the suppliers, the due dates usually range from three to five years after the completion of the preliminary acceptance of goods.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

19. TRADE AND BILLS PAYABLES (continued)

An ageing analysis of trade and bills payables as at the end of the reporting period, based on the invoice date, is as follows:

	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

Within 3 months 3 to 6 months 6 months to 1 year 1 to 2 years 2 to 3 years Over 3 years
	7,203,883 10,382,690 3,388,011 2,351,574 1,011,902 799,971 1,015,936 913,097 410,269 370,553 423,688 409,497
	13,453,689 15,227,382

The amounts due to the Group’s associates included in the trade and bills payables are as follows:

	As at 30 June 2017 (Unaudited) RMB’000	As at 31 December 2016 (Audited) RMB’000
Associates	222,351	1,191,540

The above amounts are repayable on credit terms similar to those offered by the Group’s related parties to their major customers.

The above amounts are unsecured, non-interest-bearing and have no fixed terms of settlement.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

20. OTHER PAYABLES, ADVANCES FROM CUSTOMERS AND ACCRUALS

	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

Advances from customers Accrued salaries, wages and benefits Other taxes payable Others Portion classified as non-current liabilities (i) Current portion
	3,687,305 3,225,053 346,535 667,335 261,645 367,296 1,361,843 876,173
	5,657,328 5,135,857 (80,523) (109,638)
	5,576,805 5,026,219

(i) The non-current portion of other payables mainly represented guarantee amounts held by the Group as at 30 June 2017 and 31 December 2016.

The amounts due to the Group’s joint ventures and associates included in other payables and accruals are as follows:

	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

Joint ventures Associates
	2,852 2,927 11,874 5,360
	14,726 8,287

The above balances are unsecured, non-interest-bearing and have no fixed terms of settlement.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

21. INTEREST-BEARING BANK LOANS AND OTHER BORROWINGS

	As at 30 June 2017 (Unaudited) As at 31 December 2016 (Audited)
	Effective interest rate (%) Maturity RMB’000 Effective interest rate (%) Maturity RMB’000

Current Short-term bank loans: – Unsecured – Secured Current portion of long-term bank loans: – Unsecured – Secured Corporate bonds: – Unsecured – Secured Non-current Long-term bank loans: – Unsecured – Secured Corporate bonds: – Unsecured – Secured Interest-bearing bank and other borrowings are denominated in: – RMB – Euro – United States dollar
	2.65 – 1 month Libor+1.5 2018 1,741,237 2.65-3.70 2017 1,565,000 4.20-4.65 2018 221,828 4.20-4.65 2017 238,654 1.20 – 6 months Libor+3.5 2018 73,595 1.20-4.90 2017 23,162 3.25-5.15 2018 1,058,370 1.68-6.15 2017 662,016 4.98 2018 498,338 – – – 3.40-3.60 2018 230,263 3.40 2017 183,237
	3,823,631 2,672,069
	1.20 – 6 months libor+3.5 2018-2026 528,255 1.20-4.90 2018-2026 543,427 1.68-5.15 2018-2035 11,496,110 1.68-6.15 2018-2035 11,323,118 2.50 2018 2,000,156 2.50-4.98 2018 2,530,536 3.60-4.50 2018-2021 913,932 3.60-4.50 2018-2021 1,021,957
	14,938,453 15,419,038
	18,762,084 18,091,107
	16,119,058 15,015,587 84,660 83,733 2,558,366 2,991,787
	18,762,084 18,091,107

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

21. INTEREST-BEARING BANK LOANS AND OTHER BORROWINGS (continued)

The maturity profile of the interest-bearing bank and other borrowings as at 30 June 2017 and 31 December 2016 is as follows:

	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

Analysed into: Bank loans repayable: Within one year In the second year In the third to fifth years, inclusive Above five years Corporate bonds repayable: Within one year In the second year In the third to fifth years, inclusive
	3,095,030 2,488,832 944,449 1,737,118 3,770,066 3,330,554 7,309,850 6,798,874
	15,119,395 14,355,378
	728,601 183,237 2,243,709 2,742,494 670,379 809,998
	3,642,689 3,735,729
	18,762,084 18,091,107

22. OTHER EQUITY INSTRUMENTS

In May 2016, the Company received an approval from National Association of Financial Market Institutional Investors (“中國銀行間交易商協會”) to issue the Perpetual Medium-term Notes of RMB3 billion, which shall be effective for two years commencing from the date of the approval. In May 2016 and September 2016, the Company issued the first portion and the second portion of the Perpetual Medium-term Notes in an aggregate amount of RMB1 billion at the initial distribution rate of 5% and an aggregate amount of RMB500 million at the initial distribution rate of 4.2%, respectively. The proceeds from issuance of the Perpetual Medium-term Notes after the issuance costs were RMB996,547,000 and RMB498,571,000, respectively. The issue price for each of the Perpetual Medium-term Notes is RMB100.

Pursuant to the terms of the Perpetual Medium-term Notes, the Company has no contractual obligation to repay their principal or to pay any coupon distribution. The Perpetual Medium-term Notes are classified as equity and subsequent distribution declared will be treated as distribution to equity owners.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

23. BUSINESS COMBINATIONS

For the six months ended 30 June 2017, the following entities were acquired from third parties for the purpose of expanding business. Acquisitions of equity interests in these entities have been accounted for using the acquisition method of accounting effective from the dates when the entities were controlled by the Group. Details are as follows:

		Percentage of
		equity interests	Cash
Company name	Acquisition date	acquired	consideration
Janshan Green Energy Co., Ltd	January 2017	80%	KRW480,000,000
Yass Valley Wind Farm Pty Ltd	February 2017	100%	AUD7,700,000
Si Chuan Haixinneng Electric Power Design Co. Ltd	March 2017	100%	RMB9,075,000
PARQUE EóLICO LOMA BLANCA S.A	May 2017	100%	USD33,000,000
Stockyard Hill Wind Farm Pty Ltd	June 2017	100%	AUD110,000,000

On 31 May 2017, the Group entered into a share purchase agreement with a third party to acquire an additional 25% equity interests in Best Blades GmbH, a joint venture of the Group, at a cash consolidation of EUR2,000,000. The articles of association of Best Blades GmbH were revised accordingly upon the completion of the acquisition, and the Group has total 75% equity interests in Best Blades GmbH and has the power to govern the relevant activities of Best Blades GmbH. Therefore, On 31 May 2017, Best Blades GmbH was accounted for as a subsidiary of the Group. The Group recognised a gain of RMB4,297,000 in profit or loss as a result of remeasuring its original interest in Best Blades GmbH of RMB14,691,000 at the date of obtaining control to its acquisition-date fair value of RMB18,988,000.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

23. BUSINESS COMBINATIONS (continued)

The fair values of the identifiable assets and liabilities of these companies as at the dates of acquisitions were as follows:

Notes	Fair value recognised on acquisition
	(Unaudited)
	RMB’000

Property, plant and equipment 10 Other intangible assets Inventories Trade receivables Prepayments, deposits and other receivables Cash and cash equivalents Trade payables Other payables, advance from customer and accruals Interest-bearing bank loans Deferred tax liabilities 12 Total identifiable net assets at fair value Non-controlling interests Goodwill on acquisition Investment in a joint venture before the step acquisition of subsidiary Gain on remeasurement of the previously held interest in an acquiree at its acquisition-date fair value in a step acquisition of a subsidiary 4 Total consideration Satisfied by cash
	303,136
	729,093
	1,644
	79
	5,719
	1,615
	(605)
	(17,724)
	(2,477)
	(138,570)

	881,910
	(9,831)

	872,079

	11,437
	(14,691)
	(4,297)

	864,528


	864,528

The initial accounting for certain a business combination is incomplete by the end of the reporting period. The provisional amounts for the items are reported as above. During the measurement period, the Group will retrospectively adjust the provisional amounts recognised at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

23. BUSINESS COMBINATIONS (continued)

An analysis of the cash flows in respect of the acquisitions of subsidiaries is as follows:

	(Unaudited)
	RMB’000

Cash consideration Other payable due to certain equity sellers Cash and cash equivalents paid Cash and cash equivalents paid for prior year transactions Cash and cash equivalents acquired Net outflow of cash and cash equivalents included in cash flows from investing activities
	(864,528)
	31,699

	(832,829)
	(9,550)
	1,615

	(840,764)

Since the acquisitions, the acquired companies didn’t generate any revenue and only contributed RMB1,154,000 to the consolidated loss for the six months ended 30 June 2017.

Had the acquisitions taken place at the beginning of the period, the revenue of the Group and the profit after tax of the Group for the six months ended 30 June 2017 would have been RMB9,779,805,000 and RMB1,185,291,000, respectively.

24. DISPOSAL OF SUBSIDIARIES

On 31 January 2017, the Group lost control of the Inner Mongolia Jieyuan Wind Energy Electricity Co., Ltd., by the capital injection from the non-controlling shareholder with an amount of RMB5,000,000 in this entity, according to the articles of association. After the capital injection, the Group’s equity interests decreased to 51%.

On 30 April 2017, the Group disposed of its 100% equity interests in Leishan Tianlei Wind Power Co., Ltd to a third party for a cash consideration of RMB7,000,000.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

24. DISPOSAL OF SUBSIDIARIES (continued)

The net assets/liabilities of the subsidiaries disposed of during the six months ended 30 June 2017 were as follows:

Notes	(Unaudited)
	RMB’000

Net assets disposed of: Property, plant and equipment 10 Prepaid land lease payments Trade and bills receivables Prepayments, deposits and other receivables Cash and cash equivalents Trade payables Other payables and accruals Interest-bearing bank loans Non-controlling interests Net assets belong to the parent company Investment in a joint venture Gain on disposal of subsidiaries 5 Gain on remeasurement of fair value of the previously held interest in a subsidiary at its disposal-date fair value in a disposal of a subsidiary 5 Total consideration Satisfied by cash

	461,136
	5,021
	61,736
	22,785
	51,738
	(39,884)
	(4,604)
	(462,600)

	95,328
	(68,671)

	26,657
	(112,972)
	56,075
	37,240

	7,000


	7,000

An analysis of the net inflow of cash and cash equivalents in respect of the disposal of subsidiaries is as follows:

	(Unaudited)
	RMB’000

Cash consideration Cash and cash equivalents received for prior year transactions Cash and cash equivalents disposed of Net outflow of cash and cash equivalents in respect of the disposal of subsidiaries
	7,000
	900
	(51,738)

	(43,838)

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

25. CONTINGENT LIABILITIES

As at 30 June 2017 and 31 December 2016, contingent liabilities not provided for in the interim condensed consolidated financial statements were as follows:

	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

Letters of credit issued Letters of guarantee issued Guarantees given to a bank in connection with a bank loan granted to: An associate A third party Compensation arrangement in connection with the bank loans of the Group’s customers (i)
	151,330 199,438 11,971,609 11,320,064 56,658 30,094 306,109 299,579 312,300 332,282
	12,798,006 12,181,457

The directors were of the view that the fair value of the guarantees was not significant and therefore no provision for financial guarantees was made.

(i) Pursuant to the agreement entered into between the Company and a bank (“Bank”), a risk compensation arrangement in connection with the loans of the Group’s overseas customers, i.e., the wind farm project companies, was made as follows: (1) the Company deposited with the Bank the provisions in cash as a risk compensation fund at 10% of the loan borrowings provided by the Bank to the wind farm project companies. If the wind farm project companies fail to make due payments to the Bank, the Bank is entitled to deduct the amounts from the provisions made by the Company in the designated account. If the wind farm project companies subsequently repay the amounts due, the Bank will transfer the amounts to the Company’s risk compensation fund account; (2) If the wind farm project companies fail to make due payments to the Bank for two consecutive interest periods, the Company shall repay all the outstanding borrowings to the Bank on behalf of the wind farm project companies, and then the Bank will transfer its receivables due from the wind farm project companies to the Company.

Up to 30 June 2017, the above risk compensation arrangement covering for bank loans of one overseas wind farm project company amounted to RMB312,300,000.

The bank loans of these overseas wind farm project companies were secured by mortgages over the property, plant and equipment of these overseas wind farm project companies and by the pledge of the electricity charge rights, and/ or their shareholders’ equity interests in them.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

30 June 2017

Notes to the Interim Condensed Consolidated Financial Statements

25. CONTINGENT LIABILITIES (continued)

In 2015, Beijing Tianrun entered into an agreement with the creditor bank, Chifeng Jinneng New Energy Investment Co., Ltd. and Chifeng Xinneng. According to the agreement, when Chifeng Xinneng fails to repay the bank loans on schedule, Beijing Tianrun shall repurchase the entire share interests in Chifeng Xinneng, and the consideration equals a certain percentage of the net assets of Chifeng Xinneng at that time. Up to 30 June 2017, Chifeng Xinneng operated well, and the risk exposure from the above repurchase clause was insignificant.

26. OPERATING LEASE ARRANGEMENTS

(a) As lessor

The Group leases its investment properties under operating lease arrangements, with leases negotiated for terms ranging from one to two years.

As at 30 June 2017 and 31 December 2016, the Group had total future minimum lease receivables under non-cancellable operating leases with its tenants falling due as follows:

	As at 30 June 2017 (Unaudited) RMB’000	As at 31 December 2016 (Audited) RMB’000
Within one year	704	1,809

(b) As lessee

As at 30 June 2017 and 31 December 2016, the Group had the following total future minimum lease payments under non-cancellable operating leases in respect of land and buildings:

	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

Within one year In the second to fifth years, inclusive After five years
	14,406 17,455 9,784 6,620 187 421
	24,377 24,496

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

27. COMMITMENTS

In addition to the operating lease commitments detailed in note 26(b) above, the Group had the following capital commitments as at the end of the reporting period:

		As at 30 June 2017 (Unaudited) RMB’000	As at 31 December 2016 (Audited) RMB’000
Contracted, Property,	but not provided for plant and equipment and land use rights	2,110,160	2,167,479

28. RELATED PARTY TRANSACTIONS

(a) The Group had the following significant transactions with related parties during the period:

	For the six months ended 30 June
	2017 2016
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Continuing transactions A shareholder holding a 13.74% interest in the Company: Sales of spare parts Associates: Sales of wind turbine generators and spare parts Purchases of spare parts Purchases of processing services Provision of technical services Others Joint ventures: Sales of wind turbine generators and spare parts Provision of technical services
	315 –
	353,476 1,819 716,895 1,012,577 69,700 76,326 383,758 44,276 36 –
	1,523,865 1,134,998
	194 574 566 1,887
	760 2,461

In the opinion of the directors, the transactions between the Group and the related parties were based on prices mutually agreed between the parties.

In the opinion of the directors, the above related party transactions were conducted in the ordinary course of business.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

30 June 2017

Notes to the Interim Condensed Consolidated Financial Statements

28. RELATED PARTY TRANSACTIONS (continued)

(b) Commitments with related parties

The amount of total transactions with related parties for the period is included in note 28(a) to the interim condensed consolidated financial statements. The Group expects the total transactions with related parties as follows:

	The second half of 2017
	(Unaudited)
	RMB’000

Continuing transactions Associates: Purchases of spare parts Others


	174,967
	4,800

	179,767

(c) Outstanding balances with related parties

Details of the outstanding balances with related parties are set out in notes 13, 15, 19 and 20 to these interim condensed consolidated financial statements.

(d) Compensation of key management personnel of the Group

	For the six months ended 30 June
	2017 2016
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Short term employee benefits Pension scheme contributions Total compensation paid to key management personnel
	6,137 6,126 214 256
	6,351 6,382

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

29. FINANCIAL INSTRUMENTS BY CATEGORY

The carrying amounts of each of the categories of financial instruments as at the end of the reporting period are as follows:

	As at 30 June 2017 As at 31 December 2016
	(Unaudited) (Audited)
	RMB’000 RMB’000

Financial assets Financial assets at fair value through profit or loss: Held-for-trading: Derivative financial instruments Held-to-maturity investments Loans and receivables: Trade and bills receivables Financial receivables Financial assets included in prepayments, deposits and other receivables Pledged deposits Cash and cash equivalents Available-for-sale investments Financial liabilities Financial liabilities at fair value through profit or loss: Held-for-trading: Derivative financial instruments Financial liabilities at amortised cost: Trade and bills payables Financial liabilities included in other payables, advance from customers and accruals Interest-bearing bank and other borrowings
	31 27,923
	49,980 49,995
	19,570,812 18,603,486 3,529,272 2,787,694 1,279,205 948,554 323,581 1,016,814 3,912,127 7,534,171
	28,614,997 30,890,719
	2,064,287 1,941,325
	30,729,295 32,909,962
	4,324 –
	13,453,689 15,227,382 1,361,843 876,173 18,762,084 18,091,107
	33,581,940 34,194,662

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

30. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS

The carrying amounts and fair values of the Group’s financial instruments, other than those with carrying amounts that reasonably approximate to fair values, are as follows:

	Carrying mounts Fair values As at 30 June 2017 As at 31 December 2016 As at 30 June 2017 As at 31 December 2016 (Unaudited) (Audited) (Unaudited) (Audited) RMB’000 RMB’000 RMB’000 RMB’000
Financial assets Pledged deposits, non-current portion Available-for-sale investments Derivative financial instruments Held to maturity investments Trade and bills receivables, non-current portion Financial receivables, non-current portion Financial assets included in prepayments, deposits and other receivables, non-current portion Financial liabilities Derivative financial instruments Interest-bearing bank and other borrowings, non-current portion Trade and bills payables, non-current portion Financial liabilities included in other payables, advance from customers and accruals, non-current portion	277,405 276,618 277,405 276,618 1,339,700 1,252,059 1,339,700 1,252,059 31 27,923 31 27,923 49,980 49,995 49,980 49,995 1,878,899 1,857,030 1,941,334 1,972,837 3,158,623 2,451,312 3,158,623 2,451,312 271,789 131,620 271,789 131,620
	6,976,427 6,046,557 7,038,862 6,162,364
	4,324 – 4,324 – 14,938,453 15,419,038 14,999,319 15,629,502 808,665 754,661 825,089 794,435 80,523 109,638 82,558 108,138
	15,831,965 16,283,337 15,911,290 16,532,075

Management has assessed that the fair values of cash and cash equivalents, the current portion of pledged deposits, the current portion of trade and bills receivables, the current portion of financial receivables, the current portion of trade and bills payables, the current portion of financial assets included in prepayments, deposits and other receivables, the current portion of financial liabilities included in other payables, advance from customers and accruals, the current portion of interest-bearing bank and other borrowings approximate to their carrying amounts largely due to the short term maturities of these instruments.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

30. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS (continued)

The Group’s corporate finance team headed by the finance manager is responsible for determining the policies and procedures for the fair value measurement of financial instruments. The corporate finance team reports directly to the chief financial officer and the audit committee. At each reporting date, the corporate finance team analyses the movements in the values of financial instruments and determines the major inputs applied in the valuation. The valuation is reviewed and approved by the chief financial officer. The valuation process and results are discussed with the audit committee twice a year for interim and annual financial reporting.

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

The fair values of the non-current portions of the pledged deposits, trade and bills receivables, financial receivables, trade and bills payables, financial assets included in prepayments, deposits and other receivables, financial liabilities included in other payables, advance from customers and accruals and interest-bearing bank and other borrowings have been calculated by discounting the expected future cash flows using rates currently available for instruments with similar terms, credit risk and remaining maturities. The Group’s own non-performance risk for the non-current portion of interest-bearing bank and other borrowings as at 30 June 2017 was assessed to be insignificant.

The fair values of listed equity investments are based on quoted market prices. The fair value of unlisted availablefor-sale equity investments cannot be measured reliably because they do not have quoted market prices in an active market and the range of reasonable fair value estimate is so significant.

The Group enters into derivative financial instruments with the financial institutions. Derivative financial instruments, including forward currency contracts and an interest rate swap, are measured using valuation techniques similar to forward currency and swap models, using present value calculations. The models incorporate various market observable inputs including the credit quality of counterparties, foreign exchange spot and forward rate and interest rate curves. The carrying amounts of forward currency contracts and the interest rate swap are the same as their fair values.

As at 30 June 2017, the marked to market value of the derivatives was net of a credit/debit valuation adjustment attributable to derivative counterparty default risk.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

30. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS (continued)

Fair value hierarchy

The following tables illustrate the fair value measurement hierarchy of the Group’s financial instruments:

Assets measured at fair value:

As at 30 June 2017

	Fair value measurement using
	Quoted prices in active markets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Total
	(Unaudited) (Unaudited) (Unaudited) (Unaudited)
	RMB’000 RMB’000 RMB’000 RMB’000

Available-for-sale investments: Listed equity investments Other financial assets Derivative financial instrument: Interest rate swap

	479,700 – – 479,700
	– 860,000 – 860,000

	479,700 860,000 – 1,339,700



	– 31 – 31

	479,700 860,031 – 1,339,731

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

30. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS (continued)

Fair value hierarchy (continued)

Assets measured at fair value: (continued)

As at 31 December 2016

	Fair value measurement using
	Quoted prices in active markets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Total
	(Audited) (Audited) (Audited) (Audited)
	RMB’000 RMB’000 RMB’000 RMB’000

Available-for-sale investments: Listed equity investments Other financial assets Derivative financial instruments: Interest rate swap Forward currency contracts

	502,059 – – 502,059
	– 750,000 – 750,000

	502,059 750,000 – 1,252,059


	– 1,986 – 1,986
	– 25,937 – 25,937

	– 27,923 – 27,923

	502,059 777,923 – 1,279,982

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

30. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS (continued)

Fair value hierarchy (continued)

Liabilities measured at fair value:

As at 30 June 2017

	Quoted prices in active markets (Level 1) (Unaudited) RMB’000	Fair value measurement using Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) (Unaudited) (Unaudited) RMB’000 RMB’000	Total (Unaudited) RMB’000
Derivative financial instruments: Forward currency forwards	–	4,324 –	4,324

The Group did not have any financial liabilities measured at fair value as at 31 December 2016.

During the six months ended 30 June 2017, there were no transfers of fair value measurement between Level 1 and Level 2 and no transfers into or out of Level 3 (the six months ended 30 June 2016: Nil).

Assets for which fair values are disclosed:

As at 30 June 2017

As at 30 June 2017
	Fair value measurement using
	Quoted prices in active markets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Total
	(Unaudited) (Unaudited) (Unaudited) (Unaudited)
	RMB’000 RMB’000 RMB’000 RMB’000

Pledged deposits, non-current portion Held-to-maturity investments Trade and bills receivables, non-current portion Financial receivables, non-current portion Financial assets included in prepayments, deposits and other receivables, non-current portion
	– 277,405 – 277,405
	– 49,980 – 49,980
	– 1,941,334 – 1,941,334
	– 3,158,623 – 3,158,623
	– 271,789 – 271,789

	– 5,699,131 – 5,699,131

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

30. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS (continued)

Fair value hierarchy (continued)

Assets for which fair values are disclosed: (continued)

As at 31 December 2016

	Fair value measurement using
	Quoted prices in active markets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Total
	(Audited) (Audited) (Audited) (Audited)
	RMB’000 RMB’000 RMB’000 RMB’000

Pledged deposits, non-current portion Held-to-maturity investments Trade and bills receivables, non-current portion Financial receivables, non-current portion Financial assets included in prepayments, deposits and other receivables, non-current portion
	– 276,618 – 276,618
	– 49,995 – 49,995
	– 1,972,837 – 1,972,837
	– 2,451,312 – 2,451,312
	– 131,620 – 131,620

	– 4,882,382 – 4,882,382

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

30. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS (continued)

Fair value hierarchy (continued)

Liabilities for which fair values are disclosed:

As at 30 June 2017

	Fair value measurement using
	Quoted prices in active markets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Total
	(Unaudited) (Unaudited) (Unaudited) (Unaudited)
	RMB’000 RMB’000 RMB’000 RMB’000

Interest-bearing bank and other borrowings, non-current portion Trade and bills payables, non-current portion Financial liabilities included in other payables and advance from customers and accruals, non-current portion As at 31 December 2016
	– 14,999,319 – 14,999,319
	– 825,089 – 825,089
	– 82,588 – 82,588

	– 15,906,996 – 15,906,996


	Fair value measurement using
	Quoted prices in active markets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Total
	(Audited) (Audited) (Audited) (Audited)
	RMB’000 RMB’000 RMB’000 RMB’000

Interest-bearing bank and other borrowings, non-current portion Trade and bills payables, non-current portion Financial liabilities included in other payables and advance from customers and accruals, non-current portion
	– 15,629,502 – 15,629,502
	– 794,435 – 794,435
	– 108,138 – 108,138

	– 16,532,075 – 16,532,075

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2017

31. EVENTS AFTER THE REPORTING PERIOD

As at the date of this report, there was no any significant subsequent event since 30 June 2017.

32. APPROVAL OF THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The interim condensed consolidated financial statements were approved and authorised for issue by the board of directors on 25 August 2017.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2017

AI assistant

GOLDWIND SCIENCE&TECHNOLOGY CO., LTD. — Interim / Quarterly Report 2017

50446_rns_2017-09-20_71269c6d-6b0e-494a-a185-18ddce17728b.pdf

Contents

Definitions

Definitions

Corporate Information

BOARD OF DIRECTORS

Executive Directors

AUDITORS

International Auditors

PRC Auditors

Non-executive Directors

Independent Non-executive Directors

SUPERVISORS

COMPANY SECRETARY

PLACE OF BUSINESS

In the PRC

In Hong Kong

LEGAL COUNSEL

LISTING PLACES

SHARE REGISTRARS

PRINCIPAL BANKS

COMPANY WEBSITE

I. MAIN POLICY REVIEW

Management Discussion and Analysis

2. Strengthen support towards the renewable energy development plan to facilitate orderly and healthy growth of the industry

3. Optimise the encouraging policies for renewable energy to strengthen competitiveness in the market

4. Encourage enterprises to implement effective supervision and control for the reasonable planning, distribution and development of the industry

II. INDUSTRY REVIEW

1. Stable industry development

2.

Improved wind curtailment

3. Accelerating wind installation in middle, eastern and southern area

4. Offshore wind power gained momentum

III. BUSINESS REVIEW

i. Wind Turbine Generator R&D, Manufacturing and Sales

1. Product Manufacturing and Sales

2. Technology R&D and Product Certification

a) Product Research and Development

b) Product Certification

Management Discussion and Analysis

c) Intellectual property protection and standardization

3. Quality Management

ii. Wind Power Services

iii. Wind Farm Investment and Development

iv. International Business

v.

Offshore Wind Power Development

vi. Water Treatment Business Expansion

vii. Major Subsidiaries

viii. Use of H Shares Proceeds

IV. OPERATIONS PERFORMANCE AND ANALYSIS

Summary

Revenue

Cost of Sales

Management Discussion and Analysis

Gross Profit

Management Discussion and Analysis

Other Income and Gains

Selling and Distribution Costs

Administrative Expenses

Other Expenses

Finance Costs

Income Tax Expenses

Financial Position

Management Discussion and Analysis

Financial Resources and Liquidity

1. Net cash flows used in operating activities

2. Net cash flow used in investment activities

3. Net cash flows from financing activities

Capital Expenditure

Bank Loans and Other Borrowings

Restricted Assets

Gearing Ratio

Exposure to Fluctuations in Exchange Rates and any Related Hedges

Contingent Liabilities

V. OUTLOOK FOR THE SECOND HALF OF 2017

Management Discussion and Analysis

Potential Risk Factors

GOLDWIND SCIENCE&TECHNOLOGY CO., LTD. Interim / Quarterly Report 2017