GOLDWIND SCIENCE&TECHNOLOGY CO., LTD. - Interim / Quarterly Report 2018

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(A joint stock limited liability company incorporated in the People's Republic of China)

Stock Code: 2208

Innovating for a Brighter Tomorrow

Interim Report 2018

Definitions	02
Corporate Information	06
Management Discussion and Analysis	07
Other Information	30
Report on Review of Interim Condensed Consolidated Financial Statements	35
Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income	36
Interim Condensed Consolidated Statement of Financial Position	38
Interim Condensed Consolidated Statement of Changes in Equity	40
Interim Condensed Consolidated Statement of Cash Flows	41
Notes to Interim Condensed Consolidated Financial Statements	44

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Definitions

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

“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 2018

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 Energy” China Three Gorges New Energy Co., Ltd.（中國三峽新能源有限公司）, a 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;

“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 2018, prepared in accordance with IFRSs; “gearing ratio” net debt divided by the sum of capital and net debt; “Group”, “Goldwind”, “us” or “we” the Company and its subsidiaries; “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 2018

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” 10 September 2018, 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）; “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（中國國務院）;

04 Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Definitions

“Stock Exchange”

“subsidiary”

“Supervisors”

“Supervisory Committee”

“SZSE”

“Three-North region”

“Wind Farm Investment and Development”

“Wind Power Services”

“WTG”

“WTG Manufacturing”

“Xinjiang”

“Xinjiang Wind Power”

“YoY”

“%”

The Stock Exchange of Hong Kong Limited;

has the meaning as ascribed in the Listing Rules;

the supervisors of the Company;

the supervisory committee of the Company;

Shenzhen Stock Exchange;

China’s Three-North region, which includes northeast, northwest and northern China;

the Group’s Wind Farm Investment and Development segment, one of the three primary business segments of the Group;

the Group’s Wind Power Services business segment, one of the three primary business segments of the Group;

wind turbine generator;

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;

the Xinjiang Uyghur Autonomous Region of the PRC;

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;

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 2018

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（Resigned on 10 August 2018） 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

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

COMPANY SECRETARY

PRINCIPAL BANKS

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

China Development Bank Corporation Export-Import Bank of China, Xinjiang Branch 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 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 China Everbright Bank Co., Ltd., Urumqi 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 2018

Management Discussion and Analysis

After a global economic recovery in 2016-17, the momentum of macroeconomic rejuvenation has gradually slowed down in 2018. The overall revival of developed economies is stable: United States economy alone is in good shape under the effect of an expansionary fiscal policy; the economic downturn in the Eurozone has not been reversed; and Japan’s economy continues to record volatile, low-level growth. Emerging economies are still the engine of worldwide economic growth. In the context of weakening economic revival, the escalation of global trade disputes has further increased the uncertainty of economic outlook. The International Monetary Fund (IMF) estimated that global economic growth rate is expected to remain 3.9% this year and the next, with emerging markets and developing economies growing 4.9% and 5.1% respectively, and China’s economic growth rate is expected to be 6.6% and 6.4% respectively.

China’s domestic economy was steady in the first half of this year, showing characteristics including endogenous stability and structural coordination. The country has been reforming the supply side, upgrading consumption structure, embracing active market players, and sharing economic development achievements. Benefitting from dividends provided by the reform, the supply-side structural reform was solidly performed. It has offered favorable conditions for the cultivation and maturity of the new developing dynamic. China’s economic operation has been maintained at a medium-to-high-speed growth level at the first half of this year, with GDP increasing by 6.8% YoY and staying at a growth range of 6.7-6.9% for 12 consecutive quarters.

According to data published by the National Bureau of Statistics, the national total electricity consumption in the first half of this year grew by 9.4% YoY, and the growth rate increased by 3.1 percentage points YoY. The power supply structure and layout continued their optimization: new energy power generation accounted for 10.8% of the total power generation through January to June, and the portion increased by 1.0 percentage points over the same period of last year. Cumulative wind power generation through January to June was 191.7 billion kWh, an increase of 28.7% YoY, and the average utilization of wind power increased by 159 hours.

I. MAIN POLICY REVIEW

The Thirteenth Five-Year Plan period is a crucial timing for China’s transformation to a low-carbon energy mode, also an important era to develop energy development strategy. In order to ensure the completion of the non-fossil energy proportion target, to drive the upgrade and transformation of the energy structure, and to boost sustainable and healthy development of renewable energy represented by wind power, the state has successively issued a number of policies in the first half of 2018, regarding industry supervision, installation planning, subsidy mechanism, etc., to consolidate the stable development of the wind power industry.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Management Discussion and Analysis

1. Reinforce policy guiding on renewable energy constructions & Encourage orderly and sustainable industrial development

On 26 February 2018, the NEA issued the “Guidelines for Energy Implementation in 2018” (《2018年能源工作指導意見》), proposing to stimulate the construction of wind power projects steadily. During the year, the planned construction of new projects is 25 million KW, and the newly installed capacity is around 20 million KW. The Guidelines also proposes to push forward the preliminary work of wind power projects in some areas, the project scale is about 20 million KW; and to promote the construction of offshore wind power actively and steadily, through exploring offshore wind power model project in Shanghai’s far-reaching seas and accelerating the development of distributed wind power.

The State Council issued the “Opinions on Strengthening Ecological and Environmental Protection and Resolutely Fighting Pollution” (《關於全面加強生態環境保護堅決打好污染防治攻堅戰的意見》) and the “Notice on Printing the Three-Year Action Plan of Winning the Blue Sky Defense War” (《關於印發打贏藍天保衛戰三年行動計畫的通知》) successively in June and July 2018. The policy demands increased use of clean energy, broadened channels for clean energy consumption, and the implementation of full-guaranteed purchase of renewable energy power, under the framework of ecological and environmental protection and on the basis of energy structure optimization. The policy also reaffirms the goal that by 2020 non-fossil energy consumption takes up to 15% of total energy consumption, and proposes to optimize the layout of wind energy and solar energy and to solve curtailment of hydro, wind and solar power fundamentally.

2. Advance renewable energy consumption multi-prongedly & Settle power subsidies and fullguaranteed power purchase

On 5 March 2018, the NEA issued the “Notice on Announcing the 2018 Annual Monitoring and Alert Results of Wind Power Investment” (《關於發佈 2018 年度風電投資監測預警結果的通知》). Gansu, Xinjiang (including Xinjiang Construction and Production Corps) and Jilin provinces are marked as red warning areas. Approval, development and grid connection of wind power projects are suspended in the above areas unless specially stipulated. The focus is to solve the problem of wind power stock consumption.

On 23 March 2018, the NEA issued the “Letter to Solicit Opinions on Renewable Energy Power Quotas and Assessment Methods (Draft for Comments)” (《關於徵求<可再生能源電力配額及考核辦法（徵求意見稿）> 意見的函》). The Letter proposes 2018-2020 renewable energy power quota and the non-hydro renewable energy power quota target in provincial-level administrative regions, and explains market subjects for carrying out quota obligation, the means of compliance, and the supervision and assessment methods.

On 3 April 2018, the NEA issued the “Interim Measures for the Development and Construction of Distributed Wind Power Projects” (《分散式風電項目開發建設暫行管理辦法》), to simplify wind power project approval process under the guidance of relevant national plans, guarantee grid connection conditions and subsidies, and encourage innovation in the business model of distributed wind power projects.

On 15 June 2018, the Treasury,the NDRC and NEA jointly issued the “Notice on Announcing the Catalogue of Additional Financial Subsidy for Renewable Energy Prices (7th Batch)” (《關於公佈可再生能源電價附加資金補助目錄（第七批）的通知》). A total scale of more than 55GW is included in the scope of subsidy grants, covering renewable energy power generation projects across wind, photovoltaic, and biomass power and so on.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Management Discussion and Analysis

3. Enhance market competitiveness of renewable energy with the support of marketization reform of power market

On 20 March 2018, the NEA issued the “Letter to Solicit Opinions on the Measures for Distributed Power (Draft for Comments)” (《關於徵求<分散式發電管理辦法（徵求意見稿）>意見的函》) to encourage all types of power users to invest in the construction and operation of distributed power projects, exempt business license for distributed power projects, and stipulate grid connection conditions, consumption methods and operational supervision requirements on these projects.

On 27 April 2018, the NEA issued the “Notice on Prompting Power Generation Right Trading” (《關於進一步促進發電權交易有關工作的通知》). On 16 July 2018, The NDRC and the NEA jointly issued the “Notice on Further Promoting the Marketization of Power Market Transactions and Completing Trading Mechanism” (《關於積極推進電力市場化交易進一步完善交易機制的通知》). The policies above explicitly require to increase the volume of market-based power trade; to firmly establish a clean energy quota system to support power users to conduct market-oriented transactions with clean energy power enterprises such as hydro, wind, solar, and nuclear power firms; and to further promote cross-provincial and cross-regional power transactions and other means to increase the consumption of clean energy.

On 18 May 2018, the NEA issued the “Notice on Relevant Requirements for the Management of Wind Power Construction in 2018” (《關於 2018 年度風電建設管理有關要求的通知》), stating that since the date of issuance of the Notice, in provinces (autonomous regions and municipalities directly under the Central Government) that have not yet issued the 2018 annual wind power construction plan, centralized onshore wind power projects, as well as offshore wind power projects with undetermined investment entities, shall be configured and determined grid-connection prices through competition. Provinces (autonomous regions and municipalities directly under the Central Government) that have issued the 2018 wind power construction plan, as well as offshore wind power projects that have already determined investment entities, may continue to advance the original plan in 2018. Distributed power projects may not participate in competitive bidding. The policy document regulates requirements on the implementation of power transmission and consumption conditions, the optimization of investment environment for wind power construction, and the promotion of full power consumption by the nearest users.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Management Discussion and Analysis

II. INDUSTRY REVIEW

Under the influence of the policies above, the national wind power industry continued to develop stably in the first half of 2018. The proportion of wind power consumption continued to increase, and both the amount and ratio of wind curtailment dropped significantly. The offshore wind power market continuously expanded, and the layout of wind power construction continued to be optimized.

1. Steady Development of the Wind Power Industry

The wind power industry continues to develop steadily in the first half of 2018. Data from the NEA showed that the newly grid-connected national wind power capacity reached 7.94 GW in the first half of the year, the cumulative grid-connected wind power capacity in China reached 171.6 GW. By the end of June 2018, the national wind power generation capacity was 191.7 billion kWh, a year-on-year increase of 28.7%. The proportion of wind power on-grid electric consumption in the first half of the year was 5.9%, an increase of 0.9 percentage points year-on-year.

2. Remarkable Improvement of Wind Curtailment

With the NDRC and the NEA successively issuing a number of policies to ensure that wind power is given priority to connect to the grid and to improve wind power consumption, the situation of wind curtailment in the first half of this year has been improved remarkably. According to the National Energy Administration, the average utilization of wind power in the first half of the year was 1,143 hours, an increase of 159 hours yearon-year. Utilization hours in Yunnan and Liaoning provinces were the highest in the country, reaching 1,592 hours and 1,335 hours respectively, far exceeding the national average. In the first half year of the year, wind curtailment was 18.2 billion kWh, a year-on-year decrease of 5.3 billion kWh. The national average curtailment rate was 8.7%, dropping 4.9 percentage points year-on-year. Wind curtailment rate in all other provinces and municipalities has declined year-on-year except in Guizhou and Inner Mongolia provinces. In Shanxi, Jilin, Heilongjiang and Gansu provinces the rate fell more than 10 percentage points.

3. Diversified Incremental Market

The “Thirteenth Five-Year Plan for Wind Power Development” (《風電發展“十三五”規劃》) guides the change of center of wind power construction layout from the “Three North” region to the central-eastern region and South China, where consumption capacity is bigger. At the same time, “Interim Measures for the Development and Construction of Distributed Wind Power Projects” (《分散式風電項目開發建設暫行管理辦法》) further specified policies related to flexible development of wind power and power consumption by the nearest users. With effective guidance of the policy, the newly installed market maintained steady growth in the first half of 2018. Citing the NEA, the provinces with the most grid-connected capacity in the first half of this year were Jiangsu, Inner Mongolia, Qinghai, Henan, Shanxi and Ningxia, and their installed capacity were 920MW, 910MW, 850MW, 660MW, 590MW and 540MW respectively. More than 71% of newly installed grid-connected capacity was in the central-eastern regions and South China where there is no power limit. The installed capacity in Inner Mongolia and Ningxia provinces has prominently increased after they were removed from the red warning list.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Management Discussion and Analysis

4. Continuous Expansion of Offshore and Distributed Wind Power

According to the Thirteenth Five-Year Plan for wind power development, by the end of 2020 the offshore wind power grid-connected installed capacity will be more than 5GW, with constructing capacity over 10GW. In the first half of 2018 China’s offshore wind power construction activities have notably accelerated expansion, with 20% increase year-on-year of the scale of offshore wind power project public tender. Bidding market in Guangdong, Fujian and Jiangsu provinces was quite active. With the continuous perfection of offshore wind power policies and the further decline of construction cost caused by technological advancement, the offshore wind power market is expected to continue to expand during the Thirteenth Five-Year Plan period. Meanwhile, since November 2017 Henan, Hebei, Shanxi, Shaanxi and other provinces have successively released distributed wind power construction plans. Explicitly announced planned installed capacity has been over 7GW, likely generating more motive to the follow-on incremental market.

III. BUSINESS REVIEW

In 2018, while the growth of wind power industry maintained an upward trend, the introduction of policies related to subsidies reduction and competitive bidding of grid-connection also put forward higher requirements on the sustainable development of wind power enterprises. Facing both the opportunities and challenges brought by the industry, Goldwind realizes differentiated competitiveness in the market with wind power life cycle solutions. It has also been actively searching for value-adding for customers with technological innovation and product quality improvement. The “Two-Sea Strategy” continues to advance and the service market is growing fast. The effectiveness of the layout of expansion to environmental protection has initially added to the Company’s profitability. During the Reporting Period, the Company’s various businesses progressed smoothly, business performance improved steadily, and backlog of orders continued to add.

During the Reporting Period, revenue for the Group was RMB10,961.17 million, representing an increase of 12.08% compared with RMB9,779.77 million for the corresponding period in 2017. Net profit attributable to owners of the Company was RMB1,529.98 million, representing an increase of 35.05% compared with RMB1,132.92 million for the corresponding period in 2017.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

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 2018, the Group’s revenue from the sales of WTGs and components was RMB7,988.17 million, representing an increase of 9.97% YoY. Total sales capacity was 2,094.00 MW, an increase of 11.71% YoY, among which the sales volume of 2.0MW WTGs increased significantly from 37.56% in the first half of 2017 to 72.97%. The following table sets out the details of products sold by the Group in the first half of 2018 and 2017:

	Six months ended 30 June 2018 2017 Units Sold Capacity Sold (MW) Units Sold Capacity Sold (MW) Change in Capacity Sold
6.0MW 3.0MW 2.5MW 2.0MW 1.5MW Total	2 12.00 – – – 39 117.00 9 27.00 333.33% 95 237.50 341 852.50 –72.14% 764 1,528.00 352 704.00 117.05% 133 199.50 194 291.00 –31.44%
	1,033 2,094.00 896 1,874.50 11.71%

During the Reporting Period, the Group’s backlog of orders improved steadily. As at 30 June 2018, the Group’s external backlog of orders under contract totaled 10,849.7MW, including 267MW of 1.5MW WTGs, 5,742MW of 2.0MW WTGs, 1,183.6MW of 2.2MW WTGs,282.9MW of 2.3MW WTGs, 2,460MW of 2.5MW WTGs, 90MW of 3.0MW WTGs, 379.5MW of 3.3MW WTGs, 78.2MW of 3.4MW WTGs, 108.5MW of 3.5MW WTGs, and 258MW of 6.45MW WTGs. There were 6,651.3MW of additional external orders awaiting contract, including 51MW of 1.5MW WTGs, 3,114MW of 2.0MW WTGs, 1,148.4MW of 2.2MW WTGs, 450.8MW of 2.3MW WTGs, 920MW of 2.5MW WTGs, 741MW of 3.0MW WTGs, and 226.1MW of 6.65MW WTGs. In total, the combined external backlog orders was 17,501MW. In addition, the Group had a total of 1,155.1MW internal orders.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Management Discussion and Analysis

2. Technology R&D and Product Certification

Goldwind’s continually-improving R&D capabilities laid a solid foundation for the Group’s ability to realize optimal value for customers. The Group combined optimizing existing products and researching into new products, and continually enriched the product portfolio. There has also been progress in reinforcing technological advancement, promoting key technologies and applications, and upgrading software and hardware along product line, in order to enhance comprehensive competitiveness of products.

During the Reporting Period, the Group continued R&D into GW2S, GW2.5S and GW3S serial units. Goldwind’s 2.5S platform “Double140” model has obtained the type certificate. The certificate marked recognition of the world’s first 2.5MW product with impeller diameter and tower height of 140 meters from a third party, authoritative institute. It meant products with higher adaptability for resource exploitation for low wind speed and higher wind shear. GW140/2500 is a high-capacity, low-speed product launched by the 2.5S platform following the GW130/2500, expanding the coverage of the 2.5S product line to the market segment.

In order to ensure the continued competitive advantage of Goldwind in the low wind speed market, the 2S platform unit GW131/2.2 was made the first in the industry to complete the high voltage ridethrough test, which fully reflected excellent grid-connection performance and grid adaptability of the unit. During the Reporting Period, the unit obtained type certificate and began mass supply, which was widely praised by the market. The design and development concept of the new model platform entitled the series with technical merits including multi-impeller diameter, multi-tower height (form), multiple variable power, and multiple control modes, which can respond to the complex and diverse needs of the market.

In 2018, the Company officially launched the GW3S model to the market. The GW140/3400 unit of the platform has obtained the DNV type certificate. The unit design of GW136/4200 product has been completed. It is expected that the prototype will be connected to the grid in the second half of the year. The 3S platform has been upgraded and optimized from the aspects of flexible capacity, life management strategy, tower serial configuration strategy, unit intelligence, and power generation.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Management Discussion and Analysis

a) Product Certification

In 2018, the Company’s continued to add its product certificate portfolio. In addition to the routine product certificate work, platform development and innovative technologies were certified in both domestic and international aspects. In terms of product certificate, GW2S series and GW2.5 series have obtained 18 domestic and international design evaluation certificates, 19 type certificates and 3 technical certificates. In addition, Goldwind has received a number of platform certificates covering a variety of configurations to ensure back-end product delivery. Goldwind prioritizes its customers and makes platforms, and innovative technologies go hand in hand and integrate with each other, to ensure unit safety and power optimization, also to continuously enhance the competitiveness of the units.

b) Intellectual Property and Standardization

In recent years, Goldwind has continued to emphasize R&D investment and actively protected its core technologies through intellectual property protection. The number of patent applications at home and abroad has gradually increased, and the patent application structure has been continuously optimized. Among domestic peers, the total number of patent applications and patent licenses is at the leading position.

In the first half of 2018, Goldwind submitted 416 new patent applications, 122 overseas patent applications, 75 new software copyright applications, and 77 new domestic trademark applications. 215 new patents were granted in China, 12 new patents were granted overseas, 21 newly registered trademarks were approved, and 4 overseas newly registered trademarks were approved.

The Company actively participated in the policy-making and revision of international and domestic standards in the field of wind power technology. In terms of international standards, it has participated in the revision and revision of 11 IEC standards, and 13 technicians have become registered experts of IEC/TC88. At home, Goldwind participated in the revision of 160 standards (including 79 national standards, 62 industrial standards, and 19 standards for local governments and industrial associations).

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Management Discussion and Analysis

3. Quality Management

In 2018, Goldwind focused its quality management on the vision of becoming an “internationalized solution provider of clean energy and energy-saving environmental protection” and adhered to the quality management concept of “wind power long-distance race”. The Company continued to promote the quality of the entire chain with the goal of improving the end customer experience and optimizing the quality of life cycle. At the same time, Goldwind escalated the library of quality indicators of the entire chain, kept up with the pace of customer demand. It established a customer feedback management mechanism to improve the response speed for clients and to form a closed loop of management. In-depth construction of the entire industrial chain to secondary suppliers have effectively promoted and fostered the growth of the supply chain. Through comprehensive quality management of R&D, manufacturing, sales, operation and maintenance, after-sales and customer experience, the Company will bring a win-win situation for all parties involved in the chain.

ii. Wind Power Services

The development of China’s wind power industry has gradually matured, and the number of WTGs with expired warranty is increasing year by year. The huge post-service market that will be born will also be a new kinetic energy to promote industrial development. With the continuous innovation and development of wind power technology, the value-added space of operation and maintenance services has also been expanding, and the connotation of wind power operation and maintenance has also produced new changes, that is, the idea of fulllife cycle. This idea has promoted the digitization, specialization and systemization of wind power operation and maintenance services.

In terms of digital products, the Company’s wind farm macro location product FreeMeso mobile version 1.0 was released, which greatly improves data accuracy, operation experience, and diversified resource collection. It has been applied to macro site selection of more than 500 projects, involving 20 provinces and 370 counties. The wind farm planning and design platform GoldFarm1.0 was released, which combines the UAV survey technology and self-developed simulation algorithm to model the topographic map with up to 10cm accuracy in 3D. The platform has helped with precise engineering design, and has completed the planning and design tasks of dozens of projects.

The intelligent operation system SOAM and intelligent equipment health management system used by Goldwind cover multiple functions including energy control platform, centralized power forecasting, asset management system, equipment health management, and wind power intelligent business. Through the management of assets, data and technology to achieve standardization of technology, work order and process, and to export standardization recommendations to developers. Those systems also generate intelligent fault diagnosis, locate site problems automatically, and provide specialized solutions swiftly. On the basis of the original version, the newly launched SOAM Server V2.1 increased the functions of supervising substations, monitoring and alarming and so on, and is now undergoing formal commercial pre-testing. Through the WFM field group monitoring and management system, the wind farm can be unattended and operated by few people, making operation and maintenance personnel and costs reduced.

During the Reporting Period, revenue from the Wind Power Services business segment amounted to approximately RMB619.91 million.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Management Discussion and Analysis

iii. Wind Farm Investment and Development

In 2018, China’s wind curtailment situation has been significantly improved, and red warnings in some powerlimit provinces have been relieved. Both wind curtailment rate and power curtailment rate have declined. During the Reporting Period, the Company’s wind farm investment and development business progressed smoothly, and at the same time the Company accelerated the improvement of asset management capabilities, promoted the quality and efficiency of storage assets, and continued to increase power generation and power generation revenue.

During the Reporting Period, the company leveraged its industrial chain advantage to provide full life cycle system solutions, continuously improved asset quality and accumulated superior resources. Under the bidding policy, Goldwind supported the acquisition of incremental project resources by providing fast and accurate technical solutions with optimal levelized cost of energy (LCOE). In the stage of project design and equipment selection, Goldwind used its own technical advantages to ensure asset optimization through design, unit selection and configuration, procurement and engineering quality, investment process management and other measures. In the procedure of asset operation, Goldwind improved equipment reliability, reduced equipment failure frequency and increased power generation revenue through technical supervision, efficiency improvement programs and other services.

In view of reducing cost, improving quality and enhancing efficiency current storage, Goldwind planned to strengthen fault warning and monitoring, undergo lean management of operation and maintenance and reduce power generation losses through technological innovation and product upgrade.

During the Reporting Period, Goldwind reported that its domestic newly grid-connected installed capacity was 165.5MW, newly attributable grid-connected installed capacity was 165.5MW. As at 30 June 2018, cumulative installed wind farm capacity was 4,879MW, of which 4,033.44MW was attributable installed capacity. The installed capacity of projects still under construction was 3,326.9MW, of which 3.053.40MW was attributable capacity.

During the Reporting Period, the company’s total power generation was 4,059,244 MWh, representing an increase of 25% YoY, revenue from power generation of wind power projects amounted to approximately RMB2,012.15 million, representing an increase of 21.40% YoY.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Management Discussion and Analysis

iv. “Two Sea” Strategy

In the context of accelerated development of offshore wind power in China, the Company has continuously strengthened the construction of offshore wind power technology, engineering, and teams to provide customers with high-reliability units, accurate wind farm resource assessment, intelligent lifting and operation and maintenance solutions. In the first half of 2018, the Company’s independently-developed, largest capacity offshore wind turbine in the Asia-Pacific region, GW154/6700 offshore unit was successfully commissioned. The impeller has a diameter of 154m and a wind-swept area of 18,615 square meters. It adopts integrated transportation and lifting scheme and is equipped with Goldwind’s iGO (Intelligent Goldwind Offshore) system, which is an intelligent management system based on lean operation and lean delivery of offshore wind power projects. It realizes intelligent operation and maintenance and lean delivery capability of offshore projects; this symbolizes that Goldwind has taken solid steps towards the industrialization of high-capacity offshore wind power equipment.

In terms of overseas business, the Company’s GW3.0MW(S) unit has gradually entered the international market. Goldwind’s first overseas GW3.0MW(S) unit was successfully commissioned and connected to grid with full capacity in Canyon, Texas, USA. The height of the center of wheel hub is 130 meters, and the top of the blade is nearly 200 meters, making it the highest wind turbine in the United States. 66 Goldwind’s 1.5MW high-temperature units were tested and connected to the grid successfully at their trial in Pakistan. 32 Goldwind’s 2.5MW units were all commissioned in Chile, Punta Sierra project.

During the reporting period, the Company’s international service business achieved breakthroughs in Brazil and received 315MW generator service orders; 3S units received their first orders in Turkey. As of the end of the Reporting Period, the amount of orders of international projects totaled 742.7MW; the capacity of wind farms under construction totaled 1,511.4MW, of which attributable capacity was 1,392.68MW.

During the Reporting Period, revenue from the international business amounted to approximately RMB696.07 million.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Management Discussion and Analysis

v. Water Treatment Business

As a strategic business of the Company in the field of energy saving and environmental protection, during the Reporting Period, the Company’s water treatment business expanded rapidly, and the scale of water treatment and technology continued to improve, with outstanding performance in profitability and business operation.

The precise aeration control system independently developed by the Company is based on the calculation method of the activated sludge dynamics model. The system can not only reduce the energy consumption of the sewage plant, but also improve the quality of the effluent, and at the same time greatly reduce the labor intensity of the operators. It has been tested and operated on site in Hannan Phase II project. The processing scale is 50,000 tons per day. From September 2017 to June 2018, the system has been running for 100 days, saving 424,000 kWh and reducing the power consumption per ton of water of the blower by 17.6%. Power consumption per ton of water of the entire water plant was reduced by 4.2%.

As of smart water business, the Company is committed to building smart, eco-friendly, low-carbon water plants and smart water energy solutions for customers. The solution covers the entire energy consumption process of a water plant, from power generation side to power supply and load side, and energy operation and maintenance. It helps to realize visual monitoring and high-efficiency management of water plant energy consumption, and clean energy utilization and intelligent management of water plant energy in a more precise and dynamic manner.

The Hannan Shamao Wastewater Treatment Plant Phase II expansion and upgrade project, which was carried out by Jiangsu Yancheng Jinda Municipal Engineering Co., Ltd., a wholly-owned engineering company affiliated to Goldwind Environmental Protection, won the Wuhan Municipal Engineering Gold Award.

As at 30 June 2018, the Company operated a total of 43 water plants, designed a scale of 2.38 million ton of water treatment per day，which covered 30 cities throughout the country. During the Reporting Period, revenue from the water treatment business amounted to approximately RMB215.81 million, representing an increase of 222.12% YoY.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Management Discussion and Analysis

vi. Major Subsidiaries

As at 30 June 2018, the Group had 310 subsidiaries, among which 36 were directly owned subsidiaries and 274 were indirectly owned subsidiaries. In addition, the Group had 17 joint ventures, 23 associate companies and 24 equity investments at fair value. 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 2018 Unit: RMB

		Registered Capital			Revenue from
No	Company Name	(RMB ten thousand)	Total Assets	Net Assets	Operations	Net Profits
1	Beijing Goldwind Science & Creation Wind Power Equipment Co., Ltd.	99,300.00	6,314,876,581.72	1,313,747,134.54	1,710,228,949.23	–119,822,118.94
2	Vensys Energy AG	€5 million	1,155,319,105.01	622,542,280.74	239,563,275.96	–53,138,774.39
3	Jiangsu Goldwind Technology Co., Ltd.	75,961.00	3,834,966,148.86	1,616,508,757.56	1,120,652,482.58	10,000,439.64
4	Beijing Techwin Electric Co., Ltd.	10,000.00	3,305,576,307.89	1,549,146,825.04	954,058,496.39	78,354,663.75
5	Beijing Tianrun New Energy Investment Co., Ltd.	555,000.00	29,124,124,556.68	9,931,165,661.15	1,936,048,839.79	930,715,792.96
6	Goldwind Investment Holding Co., Ltd.	100,000.00	1,808,393,471.71	1,770,019,096.70	–	160,443,625.50
7	Tianxin International Finance Lease Co., Ltd.	USD30 million	4,038,264,506.58	556,718,415.15	127,776,197.71	65,491,045.30
8	Goldwind Environmental Science & Technology Co., Ltd.	100,000.00	4,213,815,170.62	1,157,179,736.52	190,198,717.93	25,163,598.01

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 announcement.

Summary

During the six months ended 30 June 2018, revenue for the Group was RMB10,961.17 million, representing an increase of 12.08% compared with RMB9,779.77 million for the corresponding period in 2017. Net profit attributable to owners of the Company was RMB1,529.98 million, representing an increase of 35.05% compared with RMB1,132.92 million for the corresponding period in 2017. The Company reported basic earnings per share of RMB0.42.

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 2018

Management Discussion and Analysis

Unit: RMB thousand

	Six months ended 30 June Amount Change Percentage Change 2018 2017
WTG Manufacturing Wind Power Services Wind Farm Investment and Development Others Total	7,988,165 7,264,258 723,907 9.97% 619,909 709,831 (89,922) –12.67% 2,012,154 1,657,481 354,673 21.40% 340,940 148,198 192,742 130.06%
	10,961,168 9,779,768 1,181,400 12.08%

Revenue increased due to: (i) the steady development of China’s wind power industry in the first half of 2018 and the high market recognition of the Group’s products drive the sales volume of WTGs growth; (ii) with the increase of wind farms capacity of the Group officially entering the operation stage, and the situation of curtailment of wind power is improved, the revenue produced from power generation increased significantly; (iii) as this Group’s investment in the field of innovation business continued to increase, the investment effect had been initially apparent. The sales revenue of water business increased significantly during the reporting period.

Cost of Sales

Unit: RMB thousand

	Six months ended 30 June Amount Change Percentage Change 2018 2017
WTG Manufacturing Wind Power Services Wind Farm Investment and Development Others Total	6,283,874 5,486,348 797,526 14.54% 497,949 538,995 (41,046) –7.62% 568,825 565,620 3,205 0.57% 185,799 52,287 133,512 255.34%
	7,536,447 6,643,250 893,197 13.45%

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

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Management Discussion and Analysis

Gross Profit

Unit: RMB thousand

	Six months ended 30 June Amount Change Percentage Change 2018 2017
WTG Manufacturing Wind Power Services Wind Farm Investment and Development Others Total	1,704,291 1,777,910 (73,619) –4.14% 121,960 170,836 (48,876) –28.61% 1,443,329 1,091,861 351,468 32.19% 155,141 95,911 59,230 61.76%
	3,424,721 3,136,518 288,203 9.19%

The Group’s gross profit increased mainly due to increased gross profits from wind farm investment and development and other business YoY.

For the six months ended 30 June 2018 and 2017, our comprehensive gross profit margin was 31.24% and 32.07%, respectively, and the gross profit margin for WTG Manufacturing business segment was 21.34% and 24.47%, 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 and 6.0MW series (prepared in accordance with CASBE):

	Six months ended	Six months ended	Change
	30 June		(percentage
Gross Profit Margin	2018	2017	points)
6.0MW	–6.02%	–	–
3.0MW	13.73%	16.44%	–2.71%
2.5MW	20.17%	23.34%	–3.17%
2.0MW	22.95%	25.68%	–2.73%
1.5MW	20.86%	26.73%	–5.87%

During the Reporting Period, gross profit margin of 1.5MW series, 2.0MW series, 2.5MWseries and 3.0MW series of WTGs had a certain degree of decrease, 6.0MW WTGs is the newly added product series of the Group, which is in the market development stage at present, with negative gross profit margin.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

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), bank interest income, insurance compensation on product warranty expenditures, gross rental income, government grants received for the Group’s R&D projects and upgrades of our production facilities, and etc.

Other income and gains of the Group for the six months ended 30 June 2018 was RMB424.66 million, representing a 14.60% increase compared with RMB370.57 million for the corresponding period in 2017.This was mainly attributed to the increase of bank interest income, insurance compensation on product warranty expenditures, gain on disposal of financial assets at fair value through profit or loss, fair value net gains from equity investments at fair value, and etc, which was partially offset by the decrease of gain on disposal of subsidiaries, gain on remeasurement of fair value of the previously held interest in a subsidiary, and etc.

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 2018 was RMB612.32 million, representing a 16.77% decrease compared with RMB735.69 million for the corresponding period in 2017. This was mainly attributed to the decrease of product warranty provisions caused by increased number of WTGs beyond warranty, which was offset by the increase of transport costs, travel expenses, loading and unloading fees, and etc.

Administrative Expenses

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

Administrative expenses of the Group for the six months ended 30 June 2018 was RMB928.92 million, which is essentially flat compared with RMB913.33 million for the corresponding period in 2017.

Other Expenses

The Group’s other expenses primarily consisted of bank charges, impairment provisions accrued in connection with trade receivables and fair value losses of derivative financial instruments, and etc.

Other expenses of the Group for the six months ended 30 June 2018 was RMB264.65 million, representing a 26.49% increase compared with RMB209.22 million for the corresponding period in 2017. This was mainly attributed to the increased provision for trade and bills receivables, the increased bank charges, the increased exchange loss, and etc, which was offset by the decreased losses of derivative financial instruments.

Finance Costs

Finance costs of the Group for the six months ended 30 June 2018 was RMB523.97 million, representing a 32.46% increase compared with RMB395.57 million for the corresponding period in 2017. This was mainly attributed to the Group had an increase of current average amount borrowed on year-on-year basis, resulting in the increase of interest charges.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Management Discussion and Analysis

Income Tax Expenses

Income tax expenses of the Group for the six months ended 30 June 2018 was RMB189.45 million, representing a 27.58% increase compared with RMB148.49 million for the corresponding period in 2017. This was mainly attributed to the increase of pre-tax profit.

Financial Position

As at 30 June 2018 and 31 December 2017, total assets of the Group were RMB74,820.93 million and RMB72,787.84 million, respectively, current assets of the Group were RMB31,661.18 million and RMB33,081.33 million, respectively, percentages of current assets to total assets of the Group were 42.32% and 45.45%, respectively. The Group’s current assets decreased mainly due to the decreased cash and cash equivalents, the decreased investment of corporate wealth management products, the decreased pledged deposits, the decreased financial receivables, and etc, which were offset by the increased trade and bills receivables, the increased prepayments deposits and other receivables, and etc.

As at 30 June 2018 and 31 December 2017, total non-current assets of the Group were RMB43,159.75 million and RMB39,706.51 million. The Group’s non-current assets increased mainly due to the increase in financial receivables caused by the increase in financing lease receivables and the right to charge water franchise, the increase of property, plant and equipment caused by the increase in operating wind power plants and wind power plants under construction, the increase of other intangible assets caused by the increase in water treatment operating concession, and etc.

As at 30 June 2018 and 31 December 2017, total liabilities of the Group were RMB50,938.76 million and RMB49,312.84 million, respectively, current liabilities of the Group were RMB28,199.62 million and RMB29,600.32 million, respectively. The Group’s current liabilities decreased mainly due to the decreased other payables, advance from customers and accruals, the decreased trade and bills payables, the decreased interest-bearing bank and other borrowings repaid within one year, and etc, which were offset by the increased contract liabilities, and etc.

As at 30 June 2018 and 31 December 2017, total non-current liabilities of the Group were RMB22,739.15 million and RMB19,712.52 million, respectively. The Group’s non-current liabilities increased mainly due to the increased long-term interest-bearing bank and other borrowings, and etc.

As at 30 June 2018 and 31 December 2017, net current assets of the Group were RMB3,461.57 million and RMB3,481.01 million, respectively, and net assets of the Group were RMB23,882.17 million and RMB23,475.00 million, respectively.

As at 30 June 2018 and 31 December 2017, cash and cash equivalents of the Group were RMB4,240.36 million and RMB6,756.11 million, respectively, and total interest-bearing bank loans and other borrowings of the Group were RMB24,414.27 million and RMB21,884.83 million, respectively.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Management Discussion and Analysis

Financial Resources and Liquidity

Unit: RMB thousand

Cash Flow Statements	Six months ended 30 June 2018 2017
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	(2,681,162) (1,551,531) (1,387,091) (3,325,696) 1,595,254 1,230,136
	(2,472,999) (3,647,091)
	6,746,183 7,526,463 (43,382) 23,749
	4,229,802 3,903,121

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 2018, the Group reported net cash flows used in operating activities of RMB2,681.16 million. Cash outflows were principally comprised of a RMB1,353.30 million decrease in trade and bills payables, a RMB1,417.38 million increase in financial receivables, a RMB1,216.74 million increase in trade and bills receivables, a RMB698.63 million decrease in provision, a RMB506.05 million increase in prepayments, deposits and other receivables, income tax paid of RMB283.47 million. Such cash outflows were offset by profit before tax of RMB1,794.36 million, adjusted for a RMB570.95 million increase in depreciation, a RMB523.97 million increase in finance costs, and etc.

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, and etc.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

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 2018, the Group reported net cash flows used in investment activities of RMB1,387.09 million. Cash outflows were principally due to the purchases of items of property, plant and equipment in the amount of RMB2,502.24 million, the acquisition of subsidiaries in the amount of RMB477.70 million (net of cash). Such cash outflows were offset by the disposal of financial assets at fair value through profit or loss of RMB1,071.69 million, decrease in pledged time deposits of RMB500.00 million, 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, and etc.

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 2018, the Group reported net cash flows from financing activities of RMB1,595.25 million. Cash inflows were principally contributed by new bank loans and other borrowings of RMB4,847.30 million. These cash inflows were offset by repayment of bank loans and other borrowings of RMB2,736.30 million, interest paid of RMB495.23 million, and etc.

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, and etc.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Management Discussion and Analysis

Capital Expenditure

Capital expenditures of the Group for the six months ended 30 June 2018 were RMB2,613.63 million, representing an increase of 1.57% from RMB2,573.11 million for the six months ended 30 June 2017. 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 2018, the total amount of interest-bearing bank loans of the Group was RMB21,520.40 million, including amounts due within one year of RMB3,241.57 million, in the second year of RMB2,319.46 million, in the third to fifth year of RMB5,915.07 million, and above five years of RMB10,044.30 million. In addition, as at 30 June 2018, the Group had issued a corporate bond repayable with a book value of RMB2,893.87 million, including amounts due within one year of RMB2,224.65 million, in the second year of RMB255.94 million, in the third to fifth year of RMB413.28 million. Details are set out in Note 25 to the Financial Statements. During the Reporting Period, the Group does not have any interest rate hedging.

Restricted Assets

As at 30 June 2018, the following assets of the Group with a total carrying value of RMB16,835.98 million were restricted as security for certain bank loans and other banking facilities. Such assets included bank deposits of RMB118.12 million, trade and bills receivables of RMB4,663.54 million, property, plant and equipment of RMB11,410.80 million, financial receivables of RMB488.60 million and prepaid land lease payments of RMB154.92 million.

As at 31 December 2017, the following assets of the Group with a total carrying value of RMB16,672.03 million were restricted as security for certain bank loans and other banking facilities. Such assets included bank deposits of RMB1,086.55 million, trade and bills receivables of RMB3,400.33million, property, plant and equipment of RMB11,638.83 million, financial receivables of RMB380.72 million and prepaid land lease payments of RMB165.60 million.

Gearing Ratio

As at 30 June 2018 and 31 December 2017, the Group’s gearing ratios, defined as net liabilities divided by total capital, were 62.23% and 57.96%, 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 did not have a significant impact on the Group’s businesses. For the six months ended 30 June 2018, the Group’s foreign exchange exposure associated with such transactions (except 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 longterm equity investment by our subsidiaries incorporated outside China was recorded under the exchange reserve.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

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 2018 and 31 December 2017, contingent liabilities of the Group were RMB17,567.92 million and RMB15,770.26 million, respectively. Details are set out in Note 29 to the Financial Statements.

V. OUTLOOK FOR THE SECOND HALF OF 2018

In recent years, in the face of the new scenario of energy reform, the renewable energy development strategy has been effectively implemented, and the process of converting renewable energy from alternative energy to main energy has been gradually accelerated. China’s wind power industry has maintained rapid development, not only has its scale ranked the first in the world, but its technological innovation capability has also reached an international-leading level.

The center of China’s wind power development has moved to the Central-Southeast of China. This is in line with the principle of “accelerating the development of onshore wind energy resources in the central and eastern regions” established by the Thirteenth Five-Year Plan. The plan proposes to actively and steadily promote the construction of offshore wind power, as well as the exploration of overseas wind power market. The Plan has also provided favorable policy support for the development of offshore wind power, industrial technology upgrades and manufacturers’ participation in international market competition. At the same time, the NEA has successively introduced policies related to demonstration projects on affordable grid-connection, burden reduction, distributed and offshore wind power development, etc., providing robust support for the healthy development of the industry.

This year, distributed wind power has become the new “blue ocean” of the industry. With merits such as high utilization efficiency, low environmental impact, improved energy supply reliability and good economic benefits, distributed wind power has become a core direction of development the world’s energy technology. As China continues to promote structural reforms in the energy supply side, and promotes the transformation of energy development mode from extensive to qualitative and efficient, renewable energy including wind energy has become an important part of China’s response to climate change and energy security. Distributed wind power has entered its “golden age” in China.

According to BNEF’s (Bloomberg New Energy Finance) latest global power system long-term analysis report, “2018 New Energy Market Long-Term Outlook (NEO)”, by the middle of this century, coal-fired power will account for 11%, reducing from the current 38%; and by 2050, photovoltaic and wind power will account for about 50% of the world’s total power generation. Between 2018 and 2050, global investment in power generation will be US$11.5 trillion, of which US$8.4 trillion (about 73%) will be used for wind power and photovoltaics. These investments will increase global wind power installed capacity by 6 times. The LCOE of onshore wind power will be reduced by 58%.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Management Discussion and Analysis

Potential Risk Factors

(1) Political Risk

The development of wind power industry is closely related to national policies. In order to foster and encourage the development of renewable energy and wind power industry, China’s industry authorities have promulgated a series of laws, regulations and policies, involving industrial planning, financial subsidies, tax incentives, and promoting wind power dispatch and power consumption, etc.; but if the industry policy is adversely changed in the future, policy fluctuations may have a negative impact on developers’ investment enthusiasm, manufacturer revenue recognition, and operator resource reserves.

(2) Wind Curtailment

Wind curtailment is mainly affected by grid consumption. China’s relevant policies require grid companies to formulate plans for the construction of renewable energy power generation supporting power grid facilities, and incorporate them into national and provincial power grid development plans, but industry development still is constrained by grid construction speed, which will also affect the development of wind power industry. Although the wind curtailment situation has been greatly improved in the first half of 2018, it still has certain impact on the development of the industry and will still be an important factor restricting the development of wind power.

(3) Declined Customer Demand

The Company’s customers include large and medium-sized power companies and wind farm investors. The sales income from the top five customers account for nearly 40% of the total annual sales. Due to factors such as industry development and policies, the Company’s performance will be negatively affected if the Company’s customers decide to adjust investment strategies or slow down the growth rate of investment in wind power generation, or if the Company’s customers’ profitability descend.

In view of the above possible risks, the Company will strengthen its principal activities, and take technology innovation and product upgrading as important engines for development. We will actively expand postservice market and the reserve superior resources to promote the quality and efficiency of storage assets, and to continuously enhance the ability of asset management throughout the full life cycle. The Company will extensively participate in the international market competition, speed up the expansion of the offshore market, continue to cultivate business development in the field of energy saving and environmental protection and improve the profitability of diversification, so as to achieve the sustainable development of the Company.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Management Discussion and Analysis

Corporate Competitive Advantages

i. Market Position

Goldwind is one of the earliest enterprises to enter into the field of WTG manufacturing in China. During more than ten years of development, we have matured into a leading domestic and global comprehensive wind power solutions provider. Our 1.5MW, 2S, 2.5S, 3S and 6S 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 industry for seven years and ranked among the top three in the world wind power market for three 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, gridfriendly 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 6S 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 aftersales services. After years of sedimentation, we have received excellent praise from the public and gained substantial recognition from government agencies, our customers, our business partners, and investors.

iv. Comprehensive Profit Model

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 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. In the field of energy saving and protection, Goldwind quickly accumulates water treatment and environmental protection assets and nurtures smart treatment service solutions. We are committed to becoming an international leader in providing clean energy and energy-saving environmental protection solutions.

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 2018

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 2018, 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	52,217,152	1.80%	1.47%
Mr. Wang Haibo	Beneficial owner	A Shares	715,000	0.02%	0.02%
Mr. Cao Zhigang	Beneficial owner	A Shares	12,893,431	0.44%	0.36%

Other than as disclosed above, as at 30 June 2018, as far as known to the Company, none of the Directors, Supervisors or chief executive of the Company had any interests and 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.

PURCHASE, SALE AND REDEMPTION OF SHARES

During the six months ended 30 June 2018, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of its securities.

INTERIM DIVIDENDS

The Board of the Company has decided not to declare payment of interim dividends for the six months ended 30 June 2018.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Other Information

SHARE CAPITAL STRUCTURE

The particulars of the issued share capital of the Company as at 30 June 2018 are set out as follows:

Share Category	Number of Shares As a Percentage of Total Shares
A Shares H Shares Total	2,906,142,460 81.72% 650,060,840 18.28%
	3,556,203,300 100%

SUBSTANTIAL SHAREHOLDERS

As at 30 June 2018, 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

		Number of	As a Percentage	As a Percentage
Name of Shareholder	Capacity	Shares	of H Shares	of Total Shares
Anbang Insurance Group Co., Ltd.1	Interest of controlled corporation	53,591,200 (L)	8.24%	1.51%
Anbang Life Insurance Co., Ltd.1	Interest of controlled corporation	53,591,200 (L)	8.24%	1.51%
Anbang Wealth Insurance Co., Ltd.1	Interest of controlled corporation	53,591,200 (L)	8.24%	1.51%
Anbang Assets Management	Beneficial owner	53,591,200 (L)	8.24%	1.51%
(Hong Kong) Co., Ltd.1
BlackRock, Inc.	Beneficial owner	34,364,835 (L)	5.29%	0.97%
		108,800 (S)	0.02%	0.00%

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 Anbang Group, Anbang Life and Anbang Wealth is deemed to be interested in the 53,591,200 H Shares held by Anbang Assets Management (Hong Kong) Co., Ltd.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Other Information

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	488,696,502	488,696,502	16.82%	13.74%
China Three Gorges New Energy1	Beneficial owner	373,957,073	862,653,575	29.68%	24.26%
	Interest in controlled corporation	488,696,502
China Three Gorges2	Interest in controlled corporation	862,653,575	862,653,575	29.68%	24.26%
Anbang Insurance Group Co., Ltd.3	Beneficial owner	22,247,680	479,483,649	16.50%	13.48%
	Interest in controlled corporation	457,235,969
Anbang Life Insurance Co., Ltd.3	Beneficial owner	278,904,260	278,904,260	9.60%	7.84%
Hexie Health Insurance Co., Ltd.3	Beneficial owner	147,222,544	147,222,544	5.07%	4.14%
Anbang Annuity Insurance Co., Ltd.3	Beneficial owner	31,109,165	31,109,165	1.07%	0.87%

Notes:

China Three Gorges New Energy directly holds 373,957,073 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 488,696,502 A Shares held by Xinjiang Wind Power.
China Three Gorges is the holding company of China Three Gorges New Energy. Under the SFO, the 488,696,502 A Shares held by Xinjiang Wind Power in which China Three Gorges New Energy is deemed to be interested, and the 373,957,073 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 278,904,260 A Shares held by Anbang Life.

Anbang Group holds 99.99% of the equity interests of Anbang Annuity Insurance Co., Ltd. (“Anbang Annuity”). Under the SFO, Anbang Group is deemed to be interested in the 31,109,165 A Shares held by Anbang Annuity.

Anbang Group hold 98.04% of the equity interests of Hexie Health Insurance Co., Ltd. (“Hexie Health”). Under the SFO, Anbang Group is deemed to be interested in the 147,222,544 A Shares held by Hexie Health.

Accordingly, aside from directly holding interest in the Company, Anbang Group is deemed to be interested in the 278,904,260 A Shares, the 31,109,165 A Shares and the 147,222,544 A Shares held by Anbang Life, Anbang Annuity, and Hexie Health, respectively.

Other than as disclosed above, as at 30 June 2018, 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.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Other Information

NUMBER OF SHAREHOLDERS

As at 30 June 2018, the total of the Shareholders was 110,690, among which the numbers of holders of A Shares and H Shares were 109,404 and 1,286, 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.

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 2018 and up to the Latest Practicable Date.

REVIEW OF INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As at 30 June 2018, 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 2018.

CHANGES TO INFORMATION ON DIRECTORS, SUPERVISORS AND CHIEF EXECUTIVE

On 7 February 2018, Mr. Huo Changbao resigned as chief financial officer of the Company.

Aside from disclosed above, as far as is known to the Company, during the six months ended 30 June 2018, 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.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Other Information

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 arrange 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 in line 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 rental discounts.

As at 30 June 2018, the Group had a total of 8,506 employees.

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 2018, 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 three results announcement telephone conferences, and one online Q&A investor interactive session, accommodated a total of 965 investors in such events. In addition, the Company organized 38 investor receptions, attended two analyst conferences during the reporting period, hosted a total of 380 investors in such events.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Report on Review of Interim Condensed Consolidated Financial Statements

==> picture [62 x 50] intentionally omitted <==

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 2018 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 24 August 2018

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

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

For the six months ended 30 June 2018

Notes	For the six months ended 30 June
	2018 2017
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

REVENUE 3 Cost of sales Gross profit Other income and gains 5 Selling and distribution expenses Administrative expenses Other expenses Finance costs 7 Share of profits of: Joint ventures Associates PROFIT BEFORE TAX 6 Income tax expense 8 PROFIT FOR THE PERIOD Profit attributable to: Owners of the parent Non-controlling interests
	10,961,168 9,779,768 (7,536,447) (6,643,250)
	3,424,721 3,136,518 424,658 370,572 (612,324) (735,689) (928,915) (913,331) (264,652) (209,217) (523,965) (395,571) 240,883 68,049 33,956 14,616
	1,794,362 1,335,947 (189,451) (148,493)
	1,604,911 1,187,454
	1,529,979 1,132,919 74,932 54,535
	1,604,911 1,187,454

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

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

For the six months ended 30 June 2018

Notes	For the six months ended 30 June
	2018 2017
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

OTHER COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD, NET OF TAX Other comprehensive income/(loss) not to be reclassified to profit or loss in subsequent periods (net of tax): Changes in fair value of financial assets designated at fair value through other comprehensive income, net of tax Other comprehensive income/(loss) to be reclassified to profit or loss in subsequent periods (net of tax): Exchange differences on translation of foreign operations Cash flow hedges, net of tax 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/(loss) to be reclassified to profit or loss in subsequent periods, 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) 10
	(240,466) 99,258 (189,321) –
	(108,628) 77,809 57,206 – 277 43,808 – (22,359)
	(51,145) 99,258
	1,364,445 1,286,712
	1,289,513 1,232,177 74,932 54,535
	1,364,445 1,286,712
	0.42 0.31

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Interim Condensed Consolidated Statement of Financial Position

30 June 2018

Notes	30 June 31 December
	2018 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

NON-CURRENT ASSETS Property, plant and equipment 11 Investment properties Prepaid land lease payments Goodwill Other intangible assets Investments in joint ventures Investments in associates Available-for-sale investments Financial assets at fair value through other comprehensive income 12 Financial assets at fair value through profit or loss 13 Other non-current financial assets 14 Held-to-maturity investments Deferred tax assets 15 Trade receivables 16 Financial receivables 17 Contract assets Prepayments, deposits and other receivables 18 Derivative financial instruments 19 Pledged deposits 21 Total non-current assets CURRENT ASSETS Inventories 20 Contract assets Trade and bills receivables 16 Financial receivables 17 Prepayments, deposits and other receivables 18 Available-for-sale investments Financial assets at fair value through profit or loss 13 Derivative financial instruments 19 Pledged deposits 21 Cash and cash equivalents 21 Total current assets
	24,002,820 22,838,479 122,151 67,904 298,327 302,092 490,644 497,601 3,007,662 2,254,558 2,018,056 1,802,594 631,130 588,151 – 1,168,210 558,419 – 530,153 – 275,299 – – 49,996 1,616,375 1,601,385 1,872,307 2,324,143 5,842,193 4,536,746 390,153 – 1,321,376 1,555,448 78,744 16,070 103,936 103,136
	43,159,745 39,706,513
	3,663,941 4,083,012 176,573 – 19,957,423 17,048,220 213,045 497,481 3,357,018 2,650,442 – 1,050,000 26,000 – 12,640 12,640 14,186 983,419 4,240,358 6,756,114
	31,661,184 33,081,328

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Interim Condensed Consolidated Statement of Financial Position

30 June 2018

Notes	30 June 31 December
	2018 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

CURRENT LIABILITIES Trade and bills payables 22 Contract liabilities 23 Other payables, advance from customers and acruals 24 Interest-bearing bank loans and other borrowings 25 Tax payable Provision Total current liabilities NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES NON-CURRENT LIABILITIES Trade payables 22 Other payables 24 Interest-bearing bank loans and other borrowings 25 Deferred tax liabilities 15 Derivative financial instruments 19 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
	14,330,937 15,256,882 3,964,526 – 2,796,962 6,359,880 5,466,212 5,999,023 144,145 211,244 1,496,835 1,773,288
	28,199,617 29,600,317
	3,461,567 3,481,011
	46,621,312 43,187,524
	940,494 884,593 206,528 38,541 18,948,059 15,885,810 645,562 452,420 3,275 – 1,674,714 2,096,893 295,156 339,109 25,358 15,157
	22,739,146 19,712,523
	23,882,166 23,475,001
	3,556,203 3,556,203 19,439,257 19,130,490
	22,995,460 22,686,693 886,706 788,308
	23,882,166 23,475,001

Wu Gang Director

Wang Haibo

Director

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Interim Condensed Consolidated Statement of Changes in Equity

For the six months ended 30 June 2018

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

As at 31 December 2017 Adjustment of adoption of IFRS 9, net of tax (note 2.2) As at 1 January 2018 Profit for the period Other comprehensive (loss)/income for the period: Changes in fair value of financial assets, net of tax Cash flow hedges, net of tax Share of other comprehensive income of associates Exchange differences on translation of foreign operations Total comprehensive (loss)/income for the period Capital contributions from non-controlling shareholders Acquisition of subsidiaries 27 Disposal to non-controlling shareholders Final 2017 dividend declared Dividends declared to non-controlling shareholders Transfer to special reserve Utilisation of special reserve Distribution of other equity instruments At 30 June 2018
	3,556,203 8,374,759 – 1,197,319 106,611 (151,365) 1,495,118 16,052 8,091,996 22,686,693 788,308 23,475,001
	– (179,424) – – (78,645) – – – 63,183 (194,886) – (194,886)

	3,556,203 8,195,335 – 1,197,319 27,966 (151,365) 1,495,118 16,052 8,155,179 22,491,807 788,308 23,280,115
	– – – – – – – – 1,529,979 1,529,979 74,932 1,604,911

	– – – – (189,321) – – – – (189,321) – (189,321)
	– – – – – – – 57,206 – 57,206 – 57,206
	– 277 – – – – – – – 277 – 277
	– – – – – (108,628) – – – (108,628) – (108,628)

	– 277 – – (189,321) (108,628) – 57,206 1,529,979 1,289,513 74,932 1,364,445
	– – – – – – – – – – 19,575 19,575
	– – – – – – – – – – 1,131 1,131
	– (3,619) – – – – – – – (3,619) 3,619 –
	– – – – – – – – (711,241) (711,241) – (711,241)
	– – – – – – – – – – (859) (859)
	– – (8,165) – – – – – 8,165 – – –
	– – 8,165 – – – – – (8,165) – – –
	– – – – – – – – (71,000) (71,000) – (71,000)

	3,556,203 *8,191,993 – 1,197,319 (161,355)*** (259,993) 1,495,118 *73,258** 8,902,917 22,995,460 886,706 23,882,166*

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 Disposal to non-controlling shareholders Final 2016 dividend declared Dividends declared to non-controlling shareholders Disposal of a subsidiary Transfer to special reserve Utilisation of special reserve Other equity instruments’ distribution At 30 June 2017
	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

As at 30 June 2018, these reserve accounts comprised the consolidated reserves of RMB19,439,257,000 (unaudited) in the interim condensed consolidated statement of financial position.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Interim Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2018

Notes	For the six months ended 30 June
	2018 2017
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments for: Finance costs 7 Bank interest income 5 Share of profits of joint ventures Share of profits of associates Depreciation 6 Amortisation of prepaid land lease payments 6 Amortisation of other intangible assets 6 Gain on disposal of items of property, plant and equipment 6 Loss on disposal of items of property, plant and equipment 6 Gain on disposal of subsidiaries, including wind farm project companies 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 Gain on disposal of available-for-sale investments 5 Gain on disposal of financial assets at fair value through profit or loss 5 Dividend income from available-for-sale investments 5 Dividend income from financial assets at fair value through other comprehensive income 5 Dividend income from other non-current financial assets 5 Gain 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 5 Interests from other investments Fair value losses/(gains), net: Derivative financial instruments – transactions not qualifying as hedges 6 Unlisted equity investments 6 Listed equity investments 6 Impairment of property, plant and equipment 6 Impairment of trade and other receivables 6 Impairment of contract assets 6 Reversal of other non-current financial assets 6 Impairment of financial receivables 6 Reversal of write-down of inventories to net realisable value 6 Government grants and deferred revenue

	1,794,362 1,335,947


	523,965 395,571
	(87,524) (39,972)
	(240,883) (68,049)
	(33,956) (14,616)
	570,947 512,704
	3,765 3,076
	40,813 28,995
	(227) (149)
	4,878 633
	– (56,075)
	– (37,240)
	– (26,840)
	(45,876) –
	– (9,441)
	(8,683) –
	(7,511) –
	(5,212) (5,367)
	– (4,297)
	(8,811) (3,369)

	(128) 33,161
	(37,069) –
	22,159 –
	17,378 –
	146,561 132,863
	291 –
	(30) –
	1,241 –
	(38,674) (19,098)
	(49,170) (38,619)

	2,562,606 2,119,818

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Interim Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2018

Notes	For the six months ended 30 June
	2018 2017
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Decrease/(Increase) in inventories Increase in trade and bills receivables Increase in prepayments, deposits and other receivables Increase in financial receivables Decrease in trade and bills payables (Decrease)/Increase in other payables, advances from customers and accruals Decrease in provision Increase in government grants and deferred revenue Cash generated used in operations Interest received Income tax paid Net cash flows used in operating activities 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 27 Purchases of interests in joint ventures Purchases of interests in associates Purchases of available-for-sale investments Purchases of financial assets at fair value through other comprehensive income Purchases of financial assets at fair value through profit or loss Purchases of other non-current financial assets Proceeds from disposal of available-for-sale investments Proceeds from disposal of items of property, plant and equipment and other intangible assets Disposal of subsidiaries, net of cash disposed of 28 Cash and cash equivalents included in assets held for sale Increase in non-pledged time deposits with original maturity of three months or more when acquired Decrease in pledged time deposits Decrease in advances to joint ventures entities Dividends received from joint ventures and associates Disposal of shareholding in joint ventures and associates Disposal of financial assets at fair value through profit or loss Gain on disposal of financial assets at fair value through profit or loss Cash from other investments Net cash flows used in investing activities
	283,958 (775,604)
	(1,216,739) (143,009)
	(506,049) (669,359)
	(1,417,381) (741,578)
	(1,353,303) (1,887,183)
	(113,854) 777,667
	(698,632) (49,200)
	3,668 30,433

	(2,455,726) (1,338,015)
	58,037 29,001
	(283,473) (242,517)

	(2,681,162) (1,551,531)



	(2,502,236) (2,292,358)
	(12,113) (25,584)
	– (14,283)
	(477,704) (840,764)
	– (500)
	(63,252) (27,225)
	– (196,183)
	(52,000) –
	(50,000) –
	(95,000) –
	– 76,840
	1,752 574
	(49) (43,838)
	– (704)
	(820) (1,298)
	500,000 –
	2,010 5,000
	16,757 22,974
	218,698 –
	1,071,686 –
	47,460 –
	7,720 11,653

	(1,387,091) (3,325,696)

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Interim Condensed Consolidated Statement of Cash Flows

For the six months ended 30 June 2018

Notes	For the six months ended 30 June
	2018 2017
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

CASH FLOWS FROM FINANCING ACTIVITIES New bank loans and other borrowings Repayment of bank loans and other borrowings Interest paid Capital contributions from non-controlling shareholders Increase in loans to joint-controlled entities and associates 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 21

	4,847,296 2,409,736
	(2,736,302) (731,730)
	(495,230) (409,159)
	19,575 30,800
	10,774 –
	– 8,515
	(50,000) (50,000)
	(859) (23,523)
	– (4,503)

	1,595,254 1,230,136

	(2,472,999) (3,647,091)
	6,746,183 7,526,463
	(43,382) 23,749

	4,229,802 3,903,121

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

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 2018 have been prepared in accordance with IAS 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 2017.

The interim condensed consolidated financial statements have been prepared under the historical cost convention, except for equity investments, derivative financial instruments and corporate wealth management products which have been measured at fair value.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

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

2.2 Impact of new and amended International Financial Reporting Standards

The accounting policies adopted in the preparation of the 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 2017, except for the adoption of the amendments effective as of 1 January 2018. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

The Group applies, for the first time, IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments that did not restate previous financial statements and recognise transition adjustments against the opening balance of equity at 1 January 2018. The nature and the effect of these changes are disclosed below.

Several other amendments and interpretations have been applied for the first time in 2018, but do not have an impact on the interim condensed consolidated financial statements of the Group.

IFRS 15 Revenue from Contracts with Customers

IFRS 15 supersedes IAS 11 Construction Contracts, IAS 18 Revenue and related interpretations and it applies to all revenue arising from contracts with customers, unless those contracts are in the scope of other standards. The new standard establishes a five-step model to account for revenue arising from contracts with customers. Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer.

The standard requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract.

The Group adopted IFRS 15 using the modified retrospective method which recognised the cumulative effect of initial adoption as an adjustment to the opening balance of retained earnings as at 1 January 2018. In addition, the Group applied the new requirements only to contracts that are not completed before 1 January 2018. After processing five-step model to contracts, as further explained below, the Group determined that there is no material impact on the opening balance of retained earnings as at 1 January 2018 upon initial adoption of IFRS 15.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

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

2.2 Impact of new and amended International Financial Reporting Standards (continued)

IFRS 15 Revenue from Contracts with Customers (continued)

However, the reclassification was made as at 1 January 2018 to be consistent with the terminology used under IFRS 15:

Contract assets recognised in relation to construct activities were previously presented as inventory.
Contract assets recognised in relation to service concession were previously presented as financial receivables.
Contract liabilities recognised in relation to sales of wind turbine generators and construct activities were previously presented as other payables, advance from customers and accruals.

The impact on the Group’s financial position by application of IFRS 15 is as follows:

	As at 1 January 2018 As previously Reclassifications stated under IFRS 15 Restated RMB’000 RMB’000 RMB’000	As at 1 January 2018 As previously Reclassifications stated under IFRS 15 Restated RMB’000 RMB’000 RMB’000	As at 1 January 2018 As previously Reclassifications stated under IFRS 15 Restated RMB’000 RMB’000 RMB’000
Consolidated statement of financial position (extract) Inventories Financial receivables Contract assets Other payables, advance from customers and accruals Contract liabilities	4,083,012 5,034,227 – 6,398,421 –	(56,693) (161,681) 218,374 (4,640,917) 4,640,917	4,026,319 4,872,546 218,374 1,757,504 4,640,917

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

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

2.2 Impact of new and amended International Financial Reporting Standards (continued)

IFRS 15 Revenue from Contracts with Customers (continued)

The Group’s principal activities consist of manufacture and sale of wind turbine generators, wind power generation and other wind power services. The impacts arising from the adoption of IFRS 15 on the Group are summarised as follows:

(a) The Group sales wind turbine generators and promises to provide warranties to the wind turbine generators. Under IFRS 15, the warranties will be considered as service-type warranties which are separate performance obligations. Revenue allocated to the service-type warranties will be recognised over the period during which the services are provided. The accounting treatment under IFRS 15 is generally consistent with the current practice of the Group, since the Group has accounted the wind turbine generators and service-type warranties revenue separately and deferred the recognition of the revenue allocated to the service-type warranties.
(b) The Group develops and operates wind farms to generate wind power, and sales to external electricity power grid companies. The contracts with customers for the sales of electricity generally include one performance obligation. Revenue is recognised upon power transmission, and measured based on the volume of wind power transmitted and the applicable fixed tariff rates. The accounting treatment under IFRS 15 is generally consistent with the current practice of the Group. Therefore, the adoption of IFRS 15 did not have an impact on the timing and amount of revenue recognition.
(c) Presentation and disclosure

As required for the condensed interim financial statements, the Group disaggregated revenue recognised from contracts with customers into categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The Group also disclosed information about the relationship between the disclosure of disaggregated revenue and revenue information disclosed for each reportable segment. Refer to Note 3 for the disaggregated revenue.

IFRS 9 Financial Instruments

IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments: Recognition and Measurement for annual periods beginning on or after 1 January 2018, bringing together all three aspects of the accounting for financial instruments: classification and measurement; impairment; and hedge accounting.

With the exception of hedge accounting, which the Group applied prospectively, IFRS 9 retrospectively, with the initial application date of 1 January 2018 and did not restate the comparative information for the period beginning 1 January 2017.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

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

2.2 Impact of new and amended International Financial Reporting Standards (continued)

IFRS 9 Financial Instruments (continued)

The effect of adopting IFRS 9 is, as follows:

(a) Classification and measurement

Except for certain trade receivables and other receivables, an entity initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.

Under IFRS9, debt instruments are subsequently measured at fair value through profit or loss (FVPL), amortised cost, or fair value through other comprehensive income (FVOCI). The classification is based on two criteria: the Group’s business model for managing the assets; and whether the instruments’ contractual cash flows represent “solely payments of principal and interests” on the principal amount outstanding (the “SPPI criterion”)

The new classification and measurement of the Group’s financial assets are, as follows:

Debt instruments at amortised cost for financial assets that are held within a business model with the objective to hold the financial assets in order to collect contractual cash flows that meet the SPPI criterion. This category includes the Group’s trade and bill receivables, financial receivables, financial assets included in prepayments, deposits and other receivables and corporate bonds included under other non-current financial assets.
Equity instruments at FVOCI, with no recycling of gains or losses to profit or loss on derecognition. This category only includes equity instruments, which the Group intends to hold for the foreseeable future and which the Group has irrevocable elected to so classify upon initial recognition or transition. The Group classified some of its equity instruments as equity instruments at FVOCI. Equity instruments at FVOCI are not subject to an impairment assessment under IFRS 9. Under IAS 39, the Group’s unquoted equity instruments were classified as available-for-sale financial assets.
Financial assets at FVPL comprise derivative instruments and some equity instruments which the Group had not irrevocably elected, at initial recognition or transition, to classify at FVOCI. This category would also include debt instruments whose cash flow characteristics fail the SPPI criterion or are not held within a business model whose objective is either to collect contractual cash flows, or to both collect contractual cash flows and sell.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

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

2.2 Impact of new and amended International Financial Reporting Standards (continued)

IFRS 9 Financial Instruments (continued)

(a) Classification and measurement (continued)

The assessment of the Group’s business models was made as of the date of initial application, 1 January 2018, and then applied retrospectively to those financial assets that were not derecognised before 1 January 2018. The assessment of whether contractual cash flows on debt instruments are solely comprised of principal and interest was made based on the facts and circumstances as at the initial recognition of the assets. The main effects resulting from this reclassification are as follows:

Measurement category Financial asset Original (IAS 39) New (IFRS 9)	Carrying amount Original (IAS 39) New (IFRS 9) Difference RMB’000 RMB’000 RMB’000
Available-for-sale investments Listed equity investments Available-for-sale at fair value FVPL Listed equity investments Available-for-sale at fair value FVOCI Corporate wealth management products Available-for-sale at fair value FVPL Unlisted equity investments Available-for-sale at cost FVPL Unlisted equity investments Available-for-sale at cost FVOCI Held-to-maturity investments Corporate bonds Held-to-maturity investments Financial assets at amortised cost Derivative financial instruments Contingent consideration FVPL FVPL Interest rate swap FVPL FVPL Loans and receivables Trade and bills receivables Loans and receivables Financial assets at amortised cost Financial receivables Loans and receivables Financial assets at amortised cost Financial assets included in prepayments, deposits and other receivables Loans and receivables Financial assets at amortised cost Pledged deposits Loans and receivables Financial assets at amortised cost Cash and cash equivalents Loans and receivables Financial assets at amortised cost	154,766 154,766 – 284,352 284,352 – 1,050,000 1,050,000 – 318,176 320,200 2,024 410,916 354,531 (56,385)
	2,218,210 2,163,849 (54,361)
	49,996 49,996 –
	12,640 12,640 – 18 18 –
	12,658 12,658 –
	19,372,363 19,372,363 – 5,034,227 5,034,227 – 1,241,939 1,241,939 – 1,086,555 1,086,555 – 6,756,114 6,756,114 –
	33,491,198 33,491,198 –
	35,772,062 35,717,701 (54,361)

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

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

2.2 Impact of new and amended International Financial Reporting Standards (continued)

IFRS 9 Financial Instruments (continued)

(a) Classification and measurement (continued)

The accounting of the Group’s financial liabilities remains largely the same as it was under IAS 39. Similar to the requirements of IAS 39, IFRS 9 requires contingent consideration liabilities to be treated as financial instruments measured at fair value, with the changes in fair value recognised through the statement of profit or loss.

Under IFRS 9, embedded derivatives are no longer separated from a host financial asset. Instead, financial assets are classified based on their contractual terms and the Group’s business model.

The accounting for derivatives embedded in financial liabilities and in non-financial host contracts has not changed from that required by IAS 39.

(b) Impairment

The adoption of IFRS 9 has fundamentally changed the Group’s accounting for impairment losses for financial assets by replacing IAS 39’s incurred loss approach with a forward-looking expected loss (ECL) approach.

IFRS 9 requires the Group to record an allowance for ECLs for all other debt financial assets not held at FVPL.

ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive. The shortfall is then discounted at an approximation to the asset’s original effective interest rate.

For contract assets, trade receivables, other receivables and other non-current financial assets, the Group has applied the standard’s simplified approach and has calculated ECLs based on lifetime expected credit losses. The Group has established a provision matrix that is based on the Group’s historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

The Group considers a financial asset in default when contractual payment are 90 days past due. However, in certain cases, the Group may also consider a financial asset to be in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

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

2.2 Impact of new and amended International Financial Reporting Standards (continued)

IFRS 9 Financial Instruments (continued)

(b) Impairment (continued)

The total impact on the Group’s reserves due to adoption of IFRS 9 as at 1 January 2018 is as follows:

	RMB’000

Opening reserves – IAS 39 Increase in provision for trade receivables, net of tax Increase in provision for other receivables, net of tax Increase in provision for contract assets, net of tax Increase in provision for financial receivables, net of tax Increase in provision for other non-current financial assets, net of tax Reclassification and remeasurement of unlisted equity investments Adjustment to reserves from adoption of IFRS 9 Opening reserves – IFRS 9
	22,686,693
	(110,916)
	(24,699)
	(596)
	(4,061)
	(253)
	(54,361)

	(194,886)

	22,491,807

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

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

2.2 Impact of new and amended International Financial Reporting Standards (continued)

IFRS 9 Financial Instruments (continued)

(b) Impairment (continued)

The impact on the Group’s financial position by application of IFRS 9 is as follows:

	As previously stated RMB’000	As at 1 January 2018 Reclassifications Adjustments under IFRS 9 under IFRS 9 RMB’000 RMB’000	As at 1 January 2018 Reclassifications Adjustments under IFRS 9 under IFRS 9 RMB’000 RMB’000	Restated RMB’000
Consolidated statement of financial position
(extract)
Available-for-sale investments Held-to-maturity investments	2,218,210 49,996	(2,218,210) (49,996)	– –	– –
Financial assets at fair value through
other comprehensive income	–	695,268	(56,385)	638,883
Financial assets at fair value through
profit or loss	–	1,522,942	2,024	1,524,966
Other non-current financial assets	–	305,111	(305)	304,806
Deferred tax assets	1,601,385	–	28,900	1,630,285
Contract assets	–	218,374	(596)	217,778
Trade and bill receivables	19,372,363	–	(132,386)	19,239,977
Prepayments, deposits and other receivables	4,205,890	(255,115)	(31,162)	3,919,613
Inventories	4,083,012	(56,693)	–	4,026,319
Financial receivables Other payables, advance	5,034,227	(161,681)	(4,976)	4,867,570
from customers and accruals	6,398,421	(4,640,917)	–	1,757,504
Contract liabilities	–	4,640,917	–	4,640,917
Reserves	19,130,490	–	(194,886)	18,935,604

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

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

2.2 Impact of new and amended International Financial Reporting Standards (continued)

IFRIC Interpretation 22 Foreign Currency Transactions and Advance Consideration

The interpretation clarifies that, in determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which an entity initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, then the entity must determine a date of the transactions for each payment or receipt of advance consideration. The interpretation does not have any impact on the Group’s consolidated financial statements.

Amendments to IAS 40 Transfers of Investment Property

The amendments clarify when an entity should transfer property, including property under construction or development, into or out of investment property. The amendments state that a change in use occurs when the property meets, or ceases to meet, the definition of investment property and there is evidence of the change in use. These amendments do not have any impact on the Group’s consolidated financial statements.

Amendments to IFRS 2 Classification and Measurement of Share-based Payment Transactions

The IASB issued amendments to IFRS 2 Share-based Payment that address three main areas: the effects of vesting conditions on the measurement of a cash-settled share-based payment transaction; the classification of a share-based payment transaction with net settlement features for withholding tax obligation; and accounting where a modification to the terms and conditions of a share-based payment transaction changes its classification from cash settled to equity settled. On adoption, entities are required to apply the amendments without restating prior periods, but retrospective application is permitted if they elect to adopt for all three amendments and other criteria are met. The Group has no share-based payment transaction. Therefore, these amendments do not have any impact on the Group’s consolidated financial statements.

Amendments to IAS 28 Investments in Associates and Joint Ventures – Clarification that measuring investees at fair value through profit or loss is an investment-by-investment choice

The amendments clarify that an entity that is a venture capital organisation, or other qualifying entity, may elect, an initial recognition on an investment-by-investment basis, to measure its investments in associates and joint ventures at fair value through profit or loss. If an entity, that is not itself an investment entity, has an interest in an associate or joint venture that is an investment entity, the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment entity associate or joint venture to the investment entity associate’s or joint venture’s interests in subsidiaries. This election is made separately for each investment entity associate or joint venture, at the later of the date on which: (a) the investment entity associate or joint venture is initially recognised; (b) the associate or joint venture becomes an investment entity; and (c) the investment entity associate or joint venture first becomes a parent. These amendments do not have any impact on the Group’s consolidated financial statements.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

30 June 2018

Notes to the Interim Condensed Consolidated Financial Statements

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

2.2 Impact of new and amended International Financial Reporting Standards (continued)

Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards – Deletion of short-term exemptions for first-time adopters

Short-term exemptions in paragraphs E3-E7 of IFRS 1 were deleted because they have now served their intended purpose. These amendments do not have any impact on the Group’s consolidated financial statements.

2.3 Issued but not yet effective International Financial Reporting Standards

The Group has not applied the following new and revised IFRSs, which have been issued but are not yet effective, in these financial statements.

IFRS 16 Leases[1] IFRIC Interpretation 23 Uncertainty over Income Tax Treatments[1] Amendments to IFRS 9 Prepayment Features with Negative Compensation[1] Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures[1] Amendments to IAS 19 Plan Amendment, Curtailment or Settlement[1] IFRS 17 Insurance Contracts[2] Amendments to IFRS 10 Sale or Contribution of Assets between an Investor and and IAS 28 its Associate or Joint Venture[3] Annual Improvements Amendments to IFRS 3, IFRS 11, IAS 12 and IAS 23[1] 2015-2017 Cycle

1 Effective for annual periods beginning on or after 1 January 2019
2 Effective for annual periods beginning on or after 1 January 2021
3 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 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

3. REVENUE

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 2018 and 2017.

	For the six months ended 30 June
	2018 2017
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Revenue Sale of wind turbine generators and wind power components Wind power services Wind farm generation Others Revenue from contracts with customers Goods transferred at a point in time Service transferred over time Revenue from other sources: rental income
	7,988,165 7,264,258 619,909 709,831 2,012,154 1,657,481 340,940 148,198
	10,961,168 9,779,768
	10,094,668 8,989,246 747,931 709,831 118,569 80,691
	10,961,168 9,779,768

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

30 June 2018

Notes to the Interim Condensed Consolidated Financial Statements

4. 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 other 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 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

4. 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 2018 and 2017:

For the six months ended 30 June 2018

	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: Revenue from external customers 7,988,165 619,909 2,012,154 340,940 – 10,961,168 Intersegment sales 578,427 244,623 – 10,019 (833,069) – Total revenue 8,566,592 864,532 2,012,154 350,959 (833,069) 10,961,168 Segment results: 620,416 39,359 1,331,319 275,675 (35,966) 2,230,803 Interest income 136,364 3,748 15,805 26,397 (94,790) 87,524 Finance costs (53,241) – (487,631) (12,613) 29,520 (523,965) Profit before tax 703,539 43,107 859,493 289,459 (101,236) 1,794,362 Other segment information: Share of profits and losses of: Joint ventures – – 137,199 103,684 – 240,883 Associates – (839) 20,791 14,004 – 33,956 Depreciation and amortisation 106,739 10,353 554,864 9,824 (66,255) 615,525 Impairment of property, plant and equipment – – 17,378 – – 17,378 Reversal of write-down of inventories, net (38,674) – – – – (38,674) Impairment of trade and other receivables, net 151,843 (6,393) 1,584 (473) – 146,561 Impairment of financial receivables, net – – – 1,241 – 1,241 Impairment of contract assets, net – 291 – – – 291 Reversal of other non-current financial assets, net – – (30) – – (30) Product warranty provision 101,490 – – – 11,868 113,358 Capital expenditure(1) 165,757 2,013 1,815,659 656,253 (26,057) 2,613,625

	7,988,165 619,909 2,012,154 340,940 – 10,961,168
	578,427 244,623 – 10,019 (833,069) –

	8,566,592 864,532 2,012,154 350,959 (833,069) 10,961,168


	620,416 39,359 1,331,319 275,675 (35,966) 2,230,803
	136,364 3,748 15,805 26,397 (94,790) 87,524
	(53,241) – (487,631) (12,613) 29,520 (523,965)

	703,539 43,107 859,493 289,459 (101,236) 1,794,362




	– – 137,199 103,684 – 240,883
	– (839) 20,791 14,004 – 33,956
	106,739 10,353 554,864 9,824 (66,255) 615,525
	– – 17,378 – – 17,378
	(38,674) – – – – (38,674)

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

30 June 2018

Notes to the Interim Condensed Consolidated Financial Statements

4. OPERATING SEGMENT INFORMATION (continued)

For the six months ended 30 June 2017

==> 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: Revenue from 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

(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 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

4. OPERATING SEGMENT INFORMATION (continued)

The following table presents segment assets and liabilities of the Group’s operating segments as at 30 June 2018 and 31 December 2017:

==> 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 2018 (Unaudited)	47,874,265	3,038,621	40,524,491	10,203,368	(26,819,816)	74,820,929

31 December 2017 (Audited)	49,618,994	3,178,156	42,568,078	7,966,214	(30,543,601)	72,787,841

Segment liabilities
30 June 2018 (Unaudited)	27,352,328	1,508,992	28,970,564	6,590,355	(13,483,476)	50,938,763

31 December 2017 (Audited)	28,794,241	1,674,328	31,593,463	4,413,564	(17,162,756)	49,312,840

Investments in joint ventures
30 June 2018 (Unaudited)	3,572	–	1,502,220	615,631	(103,367)	2,018,056

31 December 2017 (Audited)	3,589	–	1,325,635	555,507	(82,137)	1,802,594

Investments in associates
30 June 2018 (Unaudited)	24,958	7,727	399,822	206,681	(8,058)	631,130

31 December 2017 (Audited)	113,193	8,567	308,810	199,956	(42,375)	588,151

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

4. OPERATING SEGMENT INFORMATION (continued)

Geographical information

(a) Revenue from external customers

	For the six months ended 30 June
	2018 2017
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Mainland China Overseas
	10,265,096 8,716,771 696,072 1,062,997
	10,961,168 9,779,768

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

(b) Non-current assets

	As at 30 June 2018 As at 31 December 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

Mainland China United States of America Australia Panama Germany Other countries/regions
	27,987,353 25,917,724 1,811,495 1,398,614 1,322,109 1,177,692 677,606 656,476 456,402 478,808 27,354 22,397
	32,282,319 29,651,711

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 2018, revenues of RMB1,937,374,000 and RMB1,444,722,000 (six months ended 30 June 2017: RMB1,392,665,000 and RMB1,304,259,000) 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 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

5. OTHER INCOME AND GAINS

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

	For the six months ended 30 June
	2018 2017
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Bank interest income Dividend income from available-for-sale investments Dividend income from financial assets at fair value through other comprehensive income Dividend income from other non-current financial assets 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 financial assets at fair value through profit or loss 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 Fair value gains/(losses), net: Derivative financial instruments – transactions not qualifying as hedges Unlisted equity investments Listed equity investments Gain on foreign exchange differences Others
	87,524 39,972 – 9,441 8,683 – 7,511 – 2,982 4,859 61,918 58,401 43,634 36,938 106,830 61,613 5,212 5,367 – 56,075 – 37,240 – 26,840 45,876 – 227 149 – 4,297 128 – 37,069 – (22,159) – – 5,475 39,223 23,905
	424,658 370,572

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

6. PROFIT BEFORE TAX

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

Notes	For the six months ended 30 June
	2018 2017
	(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 11 Investment properties Amortisation of prepaid land lease payments Amortisation of other intangible assets Impairment of property, plant and equipment Impairment of trade receivables 16 Reversal of impairment of trade receivables 16
	6,283,874 5,486,348 497,949 538,995 568,825 565,620 185,799 52,287
	7,536,447 6,643,250
	568,778 511,256 2,169 1,448
	570,947 512,704
	3,765 3,076 40,813 28,995
	44,578 32,071
	17,378 – 292,453 203,032 (147,039) (70,269)
	145,414 132,763

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

6. PROFIT BEFORE TAX (continued)

Notes	For the six months ended 30 June
	2018 2017
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Impairment of other receivables 18 Impairment of contract assets Reversal of impairment of other non-current financial assets Impairment of financial receivables Impairment of write-down of inventories Reversal of write-down inventories 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
	1,147 100 291 – (30) – 1,241 – 2,251 5,526 (40,925) (24,624)
	(38,674) (19,098)
	(227) (149) 4,878 633
	4,651 484
	18,610 6,928 1,651 1,651 557,427 567,527 32,188 50,489 183,781 105,175
	773,396 723,191
	213,735 203,177 30,107 36,965 131,528 158,735
	375,370 398,877

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

6. PROFIT BEFORE TAX (continued)

Notes	For the six months ended 30 June
	2018 2017
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Government grants and deferred revenue Value-added tax refund Product warranty provision: Additional provision Reversals of unutilised provision Insurance compensation on product warranty expenditures Foreign exchange differences, net Fair value losses/(gains), net: Derivative financial instruments – transactions not qualifying as hedges Unlisted equity investments Listed equity investments Dividend income from available-for-sale investments Dividend income from financial assets at fair value through other comprehensive income Dividend income from other non-current financial assets Bank interest income Rental income 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 financial assets at fair value through profit or loss 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 disposal of investment in an associate
	(61,918) (58,401) (43,634) (36,938) 447,468 417,041 (334,110) (92,257)
	113,358 324,784
	(106,830) (61,613) 24,626 (5,475) (128) 33,161 (37,069) – 22,159 – – (9,441) (8,683) – (7,511) – (87,524) (39,972) (2,982) (4,859) – (56,075) – (37,240) – (26,840) (45,876) – – (4,297) (5,212) (5,367)

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

7. FINANCE COSTS

FINANCE COSTS
	For the six months ended 30 June
	2018 2017
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Interest on bank loans and other borrowings Less: Interest capitalised
	537,666 400,118 (13,701) (4,547)
	523,965 395,571

8. INCOME TAX EXPENSE

The Company and four subsidiaries of the Company have been identified as “high and new technology enterprise” and were entitled to a preferential income tax at a rate of 15% for the years ended 30 June 2018 and 2017 in accordance with the PRC Corporate Income Tax Law.

Certain subsidiaries of the Company in Mainland China, which were established after 1 January 2008 and are engaged in public infrastructure projects including wind farm and urban water treatment projects, are each entitled to a tax holiday of a three-year full exemption followed by a three-year 50% exemption commencing from the respective years when operating income is generated for the first time.

Certain subsidiaries of the Company in Mainland China, which were established after 1 January 2010 are each entitled to a tax holiday of a five-year full exemption until 31 December 2020 commencing from the respective years when operating income is generated for the first time, primarily due to their status as entities engaging in development projects supported by the government in Kashgar and Horgos of the PRC.

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%.

Certain subsidiaries of the Company in overseas are subject to corporate income tax at a rate vary from 15% to 35%.

Hong Kong profits tax has been provided at the rate of 16.5% (for the six months ended 30 June 2017: 16.5%) on the estimated assessable profits arising in Hong Kong during the year.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

8. INCOME TAX EXPENSE (continued)

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.

	For the six months ended 30 June
	2018 2017
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Current – Hong Kong – Mainland China – Elsewhere Deferred (note 15) Tax charge for the period
	– 572 124,088 134,511 31,687 38,546
	155,775 173,629 33,676 (25,136)
	189,451 148,493

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
	2018 2017
	(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
	1,794,362 1,335,947 448,590 333,987 (10,824) 4,870 (245,172) (187,999) 56,293 19,603 (1,053) (7,589) 1,416 14 (2,987) (3,262) 13,644 1,611 (60,221) (17,012) (8,489) (3,654) (1,746) 7,924
	189,451 148,493

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

9. DIVIDENDS

The proposed final cash dividends of RMB2.00 (tax included) per each 10 shares, which amounted to RMB711,241,000 of cash dividends for the year ended 31 December 2017, were approved by the Company’s shareholders on 12 June 2018.

The board of directors of the Company does not recommend the payment of any interim dividend for the six months ended 30 June 2018 (six months ended 30 June 2017: Nil).

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

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 2018 and 2017.

The calculation of basic and diluted earnings per share is based on:

	For the six months ended 30 June
	2018 2017
	(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 (’000) Basic and diluted earnings per shares (expressed in RMB per share)
	1,529,979 1,132,919 (35,208) (35,208)
	1,494,771 1,097,711
	3,556,203 3,556,203
	0.42 0.31

(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 interest from Perpetual Medium-term Notes which has been generated but not yet declared, from 1 January 2018 to 30 June 2018 and from 1 January 2017 to 30 June 2017, was deducted from earnings when calculating the earnings per share for the six months ended 30 June 2018 and 2017.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

30 June 2018

Notes to the Interim Condensed Consolidated Financial Statements

11. PROPERTY, PLANT AND EQUIPMENT

	For the six months ended 30 June 2018
	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 2018 Additions Disposals Acquisition of subsidiaries (note 27) Disposals of subsidiaries (note 28) Transfers Transfer to investment properties Exchange realignment At 30 June 2018 Accumulated depreciation and impairment: At 1 January 2018 Depreciation provided during the year (note 6) Impairment Disposals Acquisition of subsidiaries (note 27) Disposals of subsidiaries (note 28) Transfer to investment properties Exchange realignment At 30 June 2018 Net carrying amount: At 30 June 2018 At 1 January 2018

	1,229,289 19,060,546 122,675 662,200 4,796,574 25,871,284
	21,024 71,325 10,766 17,438 1,769,678 1,890,231
	– (5,477) (2,428) (35,135) (6,760) (49,800)
	– 2,355 – – – 2,355
	– (224) – – (24,738) (24,962)
	– 1,642,642 – 566 (1,643,208) –
	(63,666) – – – – (63,666)
	(3,756) 9,499 (151) (1,285) (36,420) (32,113)

	1,182,891 20,780,666 130,862 643,784 4,855,126 27,593,329


	(175,894) (2,487,251) (46,723) (285,166) (37,771) (3,032,805)
	(17,582) (499,374) (6,914) (44,908) – (568,778)
	– (10,022) – – (7,356) (17,378)
	– 2,548 1,195 14,564 6,760 25,067
	– (1,122) – – – (1,122)
	– 18 – – – 18
	7,250 – – – – 7,250
	372 (3,831) 70 628 – (2,761)

	(185,854) (2,999,034) (52,372) (314,882) (38,367) (3,590,509)


	997,037 17,781,632 78,490 328,902 4,816,759 24,002,820


	1,053,395 16,573,295 75,952 377,034 4,758,803 22,838,479

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

11. PROPERTY, PLANT AND EQUIPMENT (continued)

	For the six months ended 31 December 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 Disposal of subsidiaries Transfers Transfer to prepaid land lease payments Exchange realignment At 31 December 2017 Accumulated depreciation and impairment: At 1 January 2017 Depreciation provided during the year Impairment Disposals Acquisition of subsidiaries Disposal of subsidiaries Exchange realignment At 31 December 2017 Net carrying amount: At 31 December 2017 At 1 January 2017

	895,748 17,667,432 126,664 499,378 2,411,717 21,600,939
	13,423 85,487 13,923 177,194 4,430,168 4,720,195
	(1,479) (36,012) (16,849) (24,829) – (79,169)
	– 6,679 – 4,578 297,201 308,458
	– (558,756) (821) (3,919) (4,477) (567,973)
	313,986 1,960,146 – 8,259 (2,282,391) –
	– – – – (7,514) (7,514)
	7,611 (64,430) (242) 1,539 (48,130) (103,652)

	1,229,289 19,060,546 122,675 662,200 4,796,574 25,871,284


	(145,091) (1,686,485) (41,954) (222,133) (26,585) (2,122,248)
	(30,210) (939,499) (12,923) (81,172) – (1,063,804)
	– – – – (11,186) (11,186)
	324 25,207 8,426 18,790 – 52,747
	– (3,511) – (2,410) – (5,921)
	– 103,780 164 2,949 – 106,893
	(917) 13,257 (436) (1,190) – 10,714

	(175,894) (2,487,251) (46,723) (285,166) (37,771) (3,032,805)


	1,053,395 16,573,295 75,952 377,034 4,758,803 22,838,479


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

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

12. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

INCOME
	As at 30 June 2018
	(Unaudited)
	RMB’000

Listed equity investments Unlisted equity investments
	112,701
	445,718

	558,419

13. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS

	As at 30 June 2018
	(Unaudited)
	RMB’000

Listed equity investments Unlisted equity investments Corporate wealth management products Portion classified as non-current portion Current portion
	122,884
	407,269
	26,000

	556,153
	(530,153)

	26,000

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

14. OTHER NON-CURRENT FINANCIAL ASSETS

OTHER NON-CURRENT FINANCIAL ASSETS
	As at 30 June 2018
	(Unaudited)
	RMB’000

Corporate bonds Debt investments Provision for other non-current financial assets
	49,980
	225,594

	275,574
	(275)

	275,299

15. DEFERRED TAX

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

For the six months ended 30 June 2018

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 31 December 2017 Deferred tax generated from the adjustment of adoption of IFRS 9 At 1 January 2018 Deferred tax charged/(credited) to profit or loss during the period (note 8) Deferred tax generated from acquisition of subsidiaries (note 27) Deferred tax generated from disposal of subsidiaries (note 28) At 30 June 2018
	202,230 43,424 706,043 18,523 599,296 31,869 1,601,385
	28,900 – – – – – 28,900

	231,130 43,424 706,043 18,523 599,296 31,869 1,630,285
	33,935 47,162 (114,689) 2,371 8,578 8,553 (14,090)
	– – – – – 182 182
	– – – – – (2) (2)

	265,065 90,586 591,354 20,894 607,874 40,602 1,616,375

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

15. 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 2018 Deferred tax (charged)/credited to profit or loss during the period (note 8) Deferred tax generated from acquisition of subsidiaries (note 27) Exchange realignment At 30 June 2018
	352,185 28,167 14,569 57,499 452,420
	(22,768) 6,579 (429) 36,204 19,586
	171,237 – – – 171,237
	1,605 – 714 – 2,319

	502,259 34,746 14,854 93,703 645,562

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

For the year ended 31 December 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
	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 year Deferred tax generated from acquisition of subsidiaries At 31 December 2017
	166,258 33,492 692,349 11,246 584,553 29,493 1,517,391
	35,972 9,932 13,694 7,277 14,743 (1,582) 80,036
	– – – – – 3,958 3,958

	202,230 43,424 706,043 18,523 599,296 31,869 1,601,385

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

15. 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
	RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

At 1 January 2017 Deferred tax (charged)/credited to profit or loss during the year Deferred tax generated from acquisition of subsidiaries Exchange realignment At 31 December 2017
	57,309 21,108 14,569 7,880 100,866
	(9,803) 7,059 898 2,348 502
	309,650 – – 47,271 356,921
	(4,971) – (898) – (5,869)

	352,185 28,167 14,569 57,499 452,420

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

30 June 2018

Notes to the Interim Condensed Consolidated Financial Statements

16. TRADE AND BILLS RECEIVABLES

TRADE AND BILLS RECEIVABLES
	As at 30 June 2018 As at 31 December 2017
	(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
	17,132,515 14,540,687 1,037,425 2,046,938 4,995,887 3,842,951 (1,336,097) (1,058,213)
	21,829,730 19,372,363 (1,872,307) (2,324,143)
	19,957,423 17,048,220

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 2018 and 31 December 2017.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

16. 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 2018 As at 31 December 2017
	(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
	7,737,155 7,822,649 2,139,692 3,330,321 4,268,208 2,296,535 3,834,620 2,316,191 1,860,779 1,863,915 1,989,276 1,742,752
	21,829,730 19,372,363

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 2018 31 December 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

As at 31 December 2017 Adjustment of adoption of IFRS 9 As at 1 January 2018 Impairment losses recognised (note 6) Impairment losses reversed (note 6) Amounts written off as uncollectible Acquisition of a subsidiary Disposal of a subsidiary Exchange realignment At end of the period/year
	1,058,213 808,014 132,386 –
	1,190,599 808,014 292,453 448,430 (147,039) (195,151) – (5,556) 332 4,339 – (693) (248) (1,170)
	1,336,097 1,058,213

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

16. TRADE AND BILLS RECEIVABLES (continued)

The Group applies the simplified approach to provide for expected credit losses prescribed by IFRS 9. As at 30 June 2018, a provision of RMB1,336,097,000 was made against the gross amounts of trade receivables. Included in the above provision for impairment of trade receivables is a provision for individually impaired trade receivables of RMB250,345,000 (31 December 2017: RMB222,912,000) with a carrying amount before provision of RMB284,306,000 (31 December 2017: RMB278,080,000).

Receivables that were neither past 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.

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 2018 As at 31 December 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

A shareholder holding a 13.74% interest in the Company Joint ventures Associates
	919 739 566,547 75,489 10,979 131,313
	578,445 207,541

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

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

17. FINANCIAL RECEIVABLES

FINANCIAL RECEIVABLES
	As at 30 June 2018 As at 31 December 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

Receivables for service concession agreements Receivables for finance lease services Provision for impairment Portion classified as non-current assets Current portion
	2,448,060 1,611,967 3,613,394 3,422,260 (6,216) –
	6,055,238 5,034,227 (5,842,193) (4,536,746)
	213,045 497,481

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.

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, The Group applies the simplified approach to provide for expected credit losses prescribed by IFRS 9. As at 30 June 2018, a provision of RMB6,216,000 was made against the gross amounts of financial receivables.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

18. PREPAYMENTS, DEPOSITS AND OTHER RECEIVABLES

	As at 30 June 2018 As at 31 December 2017
	(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
	1,417,555 734,513 227,910 210,915 2,003,517 2,018,523 1,071,964 1,252,131 (42,552) (10,192)
	4,678,394 4,205,890 (1,321,376) (1,555,448)
	3,357,018 2,650,442

(i) The non-current portion of deposits and other receivables mainly represented advances to suppliers and noncurrent deductible input value-added tax at 30 June 2018 and 31 December 2017.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

18. 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 2018 31 December 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

At as December 2017 Adjustment of adoption of IFRS 9 At beginning of the period/year Impairment losses recognised (note 6) Amounts written off as uncollectible Exchange realignment At end of the period/year
	10,192 6,696 31,161 –
	41,353 6,696 1,147 4,654 – (1,020) 52 (138)
	42,552 10,192

The amounts due from a shareholder holding a 13.74% interest in the Company, the Group’s joint ventures and associates included in the prepayments, deposits and other receivables are as follows:

	As at 30 June 2018 As at 31 December 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

13.74%-owned shareholder of the Company Joint ventures Associates
	4 – 22,440 17,394 59,455 34,659
	81,899 52,053

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 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

19. DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS
	As at 30 June 2018 As at 31 December 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

Assets Current portion Contingent consideration Non-current portion Interest rate swap Power price swap contract Liabilities Non-current portion Interest rate swap
	12,640 12,640
	146 18 78,598 16,052
	78,744 16,070
	3,275 –

20. INVENTORIES

	As at 30 June 2018 As at 31 December 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

Raw materials Work in progress, finished and semi-finished goods Low-value consumables and others
	1,611,257 1,166,360 2,049,542 2,857,965 3,142 58,687
	3,663,941 4,083,012

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

21. CASH AND CASH EQUIVALENTS AND PLEDGED DEPOSITS

	As at 30 June 2018 As at 31 December 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

Cash and bank balances Time deposits Less: Pledged time deposits: – Bank loans – Letters of credit – Bills 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
	4,033,782 5,431,994 324,698 2,410,675
	4,358,480 7,842,669 (3,449) (3,387) (10,737) (10,032) – (470,000) (103,936) (103,136) – (500,000)
	(118,122) (1,086,555)
	4,240,358 6,756,114 (10,556) (9,931)
	4,229,802 6,746,183
	118,122 1,086,555 (103,936) (103,136)
	14,186 983,419
	1,409,076 4,938,940 2,093,467 2,266,629 250,587 313,967 26,597 109,336 537,677 177,929 41,076 35,868
	4,358,480 7,842,669

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

22. TRADE AND BILLS PAYABLES

TRADE AND BILLS PAYABLES
	As at 30 June 2018 As at 31 December 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

Trade payables Bills payable Portion classified as non-current liabilities (i) Current portion
	10,955,546 11,475,753 4,315,885 4,665,722
	15,271,431 16,141,475 (940,494) (884,593)
	14,330,937 15,256,882

(i) The non-current portion of trade payables mainly represented retention amounts held by the Group as at 30 June 2018 and 31 December 2017.

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 six years after the completion of the preliminary acceptance of goods.

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 2018 As at 31 December 2017
	(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
	8,332,862 10,909,780 3,678,665 3,038,854 1,512,986 461,290 806,494 807,451 461,788 489,493 478,636 434,607
	15,271,431 16,141,475

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

22. TRADE AND BILLS PAYABLES (continued)

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

	As at 30 June 2018 As at 31 December 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

Joint ventures Associates
	1,892 – 202,504 213,289
	204,396 213,289

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.

23. CONTRACT LIABILITIES

CONTRACT LIABILITIES
	As at 30 June 2018 (Unaudited) RMB’000
Advance receipt	3,964,526

The amounts due to the Group’s joint ventures and associates included in contract liabilities are as follows:

	As at 30 June 2018
	(Unaudited)
	RMB’000

Joint ventures Associates
	5,293
	684

	5,977

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

24. OTHER PAYABLES, ADVANCES FROM CUSTOMERS AND ACCRUALS

	As at 30 June 2018 As at 31 December 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

Advances from customers Accrued salaries, wages and benefits Other taxes payable Interest payable Dividends payable Others Portion classified as non-current liabilities (i) Current portion
	16,534 4,658,157 285,606 629,000 249,046 124,163 102,904 95,577 809,209 76,388 1,540,191 815,136
	3,003,490 6,398,421 (206,528) (38,541)
	2,796,962 6,359,880

(i) The non-current portion of other payables mainly represented guarantee amounts held by the Group as at 30 June 2018 and 31 December 2017.

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

	As at 30 June 2018 As at 31 December 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

Joint ventures Associates
	10,755 12,293 781 642
	11,536 12,935

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

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

25. INTEREST-BEARING BANK AND OTHER BORROWINGS

	As at 30 June 2018 (Unaudited) As at 31 December 2017 (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: – Secured Interest-bearing bank and other borrowings are denominated in: – RMB – Euro – United States dollar – Australian dollar
	2.65 – 6 months LIBOR+1.85 2018-2019 1,275,609 2.65 – 1 month LIBOR+1.5 2018 1,524,767 4.16-5.22 2018-2019 814,042 4.20-5.22 2018 530,159 1.20 – 6 months LIBOR+3.5 2018-2019 106,814 1.20 – 6 months LIBOR+3.5 2018 76,631 2.85-9.28 2018-2019 1,045,102 2.85-6.00 2018 1,214,551 2.50-4.98 2018-2019 1,980,981 2.50-4.98 2018 2,440,957 3.60 2018-2019 243,664 3.60 2018 211,958
	5,466,212 5,999,023
	1.20-5.00 2019-2030 4,411,589 1.20-5.94 2019-2030 2,072,881 1.68-5.94 2019-2035 13,867,245 1.68-6.00 2019-2035 13,003,160 3.90-4.50 2019-2021 669,225 3.90-4.50 2019-2021 809,769
	18,948,059 15,885,810
	24,414,271 21,884,833
	18,300,115 17,192,819 74,892 81,009 5,958,535 4,603,090 80,729 7,915
	24,414,271 21,884,833

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

25. INTEREST-BEARING BANK AND OTHER BORROWINGS (continued)

The maturity profile of the interest-bearing bank and other borrowings as at 30 June 2018 and 31 December 2017 is as follows:

	As at 30 June 2018 As at 31 December 2017
	(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
	3,241,567 3,346,108 2,319,461 1,364,409 5,915,069 5,537,493 10,044,304 8,174,139
	21,520,401 18,422,149
	2,224,645 2,652,915 255,943 249,828 413,282 559,941
	2,893,870 3,462,684
	24,414,271 21,884,833

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

26. 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.

27. BUSINESS COMBINATIONS

For the six months ended 30 June 2018, 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
Jingzhou Fengheyuan biotechnology Co., Ltd.	February 2018	85%	RMB6,409,000
Zhejiang Ronghuai environment engineering Co., Ltd.	April 2018	100%	RMB222,800,000
Jinhua Jinxi HaiYuan Water Service Co., Ltd.	May 2018	100%	RMB114,675,000
Zhuji Haidong Water Service Co., Ltd.	May 2018	100%	RMB146,991,000
Zhuji Lejiatan Water Service Co., Ltd.	May 2018	100%	RMB126,815,000
Zhuji Haiyuan Water Service Co., Ltd.	May 2018	100%	RMB65,266,000
Longquan Haiyuan Water Service Co., Ltd.	May 2018	100%	RMB30,844,000

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

27. 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 11 Other intangible assets Financial assets at fair value through other comprehensive income Inventories Deferred tax assets 15 Financial receivable Trade receivables Prepayments, deposits and other receivables Cash and cash equivalents Trade and bills payables Other payables, advance from customer and accruals Interest-bearing bank loans Deferred tax liabilities 15 Total identifiable net assets at fair value Non-controlling interests Total consideration Satisfied by cash
	1,233
	648,557
	5,817
	509
	182
	1,065,733
	50,505
	155,429
	22,550
	(219,763)
	(705,293)
	(139,291)
	(171,237)

	714,931
	(1,131)

	713,800


	713,800

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 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

27. 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
	(713,800)
	306,570

	(407,230)
	(93,024)
	22,550

	(477,704)

Since the acquisitions, the acquired companies contributed RMB11,431,000 to the Group’s revenue and RMB5,575,000 to the Group’s profit for the six months ended 30 June 2018.

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 2018 would have been RMB11,016,541,000 and RMB1,603,354,000, respectively.

28. DISPOSAL OF SUBSIDIARIES

On 29 June 2018, the Group disposed of its 80% equity interests in Wild Cattle Hill Pty Ltd to a third party for a cash consideration of AUD 9,600,000, according to the articles of association, the Group lost control of Wild Cattle Hill Pty Ltd.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

28. DISPOSAL OF SUBSIDIARIES (continued)

The net assets/liabilities of the subsidiaries disposed of during the six months ended 30 June 2018 were as follows:

Notes	(Unaudited)
	RMB’000

Net assets disposed of: Property, plant and equipment 11 Other intangible assets Deferred tax assets 15 Cash and cash equivalents Other payables and accruals Investment in an associate Total consideration Satisfied by cash

	24,944
	58,140
	2
	49
	(24,775)

	58,360

	(11,672)

	46,688


	46,688

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 received during the period Cash and cash equivalents disposed of Net outflow of cash and cash equivalents in respect of the disposal of subsidiaries
	–
	(49)

	(49)

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

29. CONTINGENT LIABILITIES

As at 30 June 2018 and 31 December 2017, contingent liabilities not provided for in the interim condensed consolidated financial statements were as follows:

	As at 30 June 2018 As at 31 December 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

Letters of credit issued Letters of guarantee issued Guarantees given to banks in connection with bank loans granted to: An associate A third party
	67,950 55,400 16,882,687 15,102,615 337,999 315,754 279,280 296,487
	17,567,916 15,770,256

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, in the case where Chifeng Xinneng fails to repay the bank loans on schedule, Beijing Tianrun shall repurchase the entire share interest in Chifeng Xinneng, and the consideration equals a certain percentage of the net assets of Chifeng Xinneng at that time. Up to 30 June 2018, Chifeng Xinneng operated well, and the risk exposure from the above repurchase clause was insignificant.

The Group was involved in a number of legal proceedings and claims against it in the ordinary course of business. Provision has been made for the probable losses to the Group on those legal proceedings and claims when the management can reasonably estimate the outcome of the legal proceedings and claims taking into account the legal advice. No provision has been made for pending legal proceedings and claims when the outcome of the legal proceedings and claims cannot be reasonably estimated or management believes that the probability of loss is remote.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

30. 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 five years.

As at 30 June 2018 and 31 December 2017, the Group had total future minimum lease receivables under non-cancellable operating leases with its tenants falling due as follows:

	As at 30 June 2018 As at 31 December 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

Within one year In the second to fifth years, inclusive
	3,460 3,842 8,375 8,375
	11,835 12,217

(b) As lessee

As at 30 June 2018 and 31 December 2017, 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 2018 As at 31 December 2017
	(Unaudited) (Audited)
	RMB’000 RMB’000

Within one year In the second to fifth years, inclusive After five years
	31,564 9,831 95,898 9,061 – 446
	127,462 19,338

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

31. COMMITMENTS

In addition to the operating lease commitments detailed in note 30(b) above, the Group had the following capital commitments as at the end of the reporting period:

		As at 30 June 2018 (Unaudited) RMB’000	As at 31 December 2017 (Audited) RMB’000
Contracted, property,	but not provided for plant and equipment and land use rights	3,556,535	3,134,131

32. RELATED PARTY TRANSACTIONS

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

	For the six months ended 30 June
	2018 2017
	(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 Purchases of spare parts Provision of technical services Others
	784 315
	6,625 353,476 68,844 716,895 71,326 69,700 302 383,758 1,964 36
	149,061 1,523,865
	212,026 194 2,802 – 1,126 566 28,142 –
	244,096 760

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 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

32. RELATED PARTY TRANSACTIONS (continued)

(b) Commitments with related parties

The amount of total transactions with related parties for the period is included in note 32(a) to the interim condensed consolidated financial statements. The Group expects the total transactions with related parties as follows:

	The second half of 2018
	(Unaudited)
	RMB’000

Continuing transactions Associates: Provision of technical services Purchases of spare parts


	5,238
	285,468

	290,706

(c) Outstanding balances with related parties

Details of the outstanding balances with related parties are set out in notes 16, 18, 22,23 and 24 to these interim condensed consolidated financial statements.

(d) Compensation of key management personnel of the Group

	For the six months ended 30 June
	2018 2017
	(Unaudited) (Unaudited)
	RMB’000 RMB’000

Short term employee benefits Pension scheme contributions Total compensation paid to key management personnel
	7,708 6,137 238 214
	7,946 6,351

(e) Guarantee for a related party

Guarantee for a related party
	As at 30 June 2018
	(Unaudited)
Guarantee	RMB’000	Guarantee period
An associate	337,999	24 months after the financing closure

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

33. 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 2018

ASSETS	Financial assets at amortised cost	Fair value through other comprehensive income Fair value through profit or loss Total
	RMB’000	RMB’000 RMB’000 RMB’000

Financial assets at fair value through other comprehensive income Financial assets at fair value through profit or loss Other non-current financial assets Trade and bills receivables Financial receivables Prepayments, deposits and other receivables Derivative financial instruments Pledged deposits Cash and cash equivalents LIABILITIES
	–	558,419 – 558,419
	–	– 556,153 556,153
	275,299	– – 275,299
	21,829,730	– – 21,829,730
	6,055,238	– – 6,055,238
	1,029,412	– – 1,029,412
	–	78,598 12,786 91,384
	118,122	– – 118,122
	4,240,358	– – 4,240,358

	33,548,159	637,017 568,939 34,754,115


		Financial liabilities at amortised cost Fair value through profit or loss Total
		RMB’000 RMB’000 RMB’000

Trade and bills payables Other payables, advance from customers and accruals Derivative financial instruments Interest-bearing bank loans
		15,271,431 – 15,271,431
		2,452,304 – 2,452,304
		– 3,275 3,275
		24,414,271 – 24,414,271

		42,138,006 3,275 42,141,281

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

33. FINANCIAL INSTRUMENTS BY CATEGORY (continued)

As at 31 December 2017

ASSETS	Loans and receivables Held-to- maturity investments Available- for-sale investments Fair value through profit or loss Total	Loans and receivables Held-to- maturity investments Available- for-sale investments Fair value through profit or loss Total
	RMB’000 RMB’000 RMB’000 RMB’000 RMB’000

Derivative financial instruments Held-to-maturity investments Trade and bills receivables Financial receivables Prepayments, deposits and other receivables Available-for-sale financial assets Pledged deposits Cash and cash equivalents LIABILITIES
	– – 16,052	12,658 28,710
	– 49,996 –	– 49,996
	19,372,363 – –	– 19,372,363
	5,034,227 – –	– 5,034,227
	1,241,939 – –	– 1,241,939
	– – 2,218,210	– 2,218,210
	1,086,555 – –	– 1,086,555
	6,756,114 – –	– 6,756,114

	33,491,198 49,996 2,234,262	12,658 35,788,114


		Financial liabilities at
		amortised cost
		RMB’000

Trade and bills payables Other payables, advance from customers and accruals Interest-bearing bank loans
		16,141,475
		987,101
		21,884,833

		39,013,409

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

34. 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 As at 31 December As at 30 June As at 31 December
	2018 2017 2018 2017
	(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 Other non-current financial assets Trade and bills receivables, non-current portion Financial receivables, non-current portion Equity investment at fair value through other comprehensive income Financial assets at fair value through profit or loss 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

	103,936 103,136 103,936 103,136
	– 1,489,118 – 1,489,118
	91,384 28,710 91,384 28,710
	– 49,996 – 49,996
	275,299 – 275,299 –
	1,872,307 2,324,143 1,963,018 3,111,298
	5,842,193 4,536,746 5,842,193 4,536,746
	558,419 – 558,419 –
	556,153 – 556,153 –
	– 255,115 – 255,115

	9,299,691 8,786,964 9,390,402 9,574,119



	3,275 – 3,275 –
	18,948,059 15,885,810 18,940,016 15,871,023
	940,494 884,593 954,909 899,002
	206,528 38,541 196,528 30,337

	20,098,356 16,808,944 20,094,728 16,800,362

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

30 June 2018

Notes to the Interim Condensed Consolidated Financial Statements

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

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.

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 2018 was assessed to be insignificant.

The fair values of listed equity investments are based on quoted market prices. The fair value of non-listed equity instruments are derived from Market Approach (Guideline Public Company Method).

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 2018, 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 2018

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

34. 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 2018

	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

Financial assets at fair value through other comprehensive income： Listed equity investments Unlisted equity investments Financial assets at fair value through profit or loss： Listed equity investments Unlisted equity investments Other financial assets Derivative financial instruments： Power price swap contract Interest rate swap Contingent consideration

	112,701 – – 112,701
	– 445,718 – 445,718

	112,701 445,718 – 558,419


	122,884 – – 122,884
	– 407,269 – 407,269
	– 26,000 – 26,000

	122,884 433,269 – 556,153


	– 78,598 – 78,598
	– 146 – 146
	– – 12,640 12,640

	– 78,744 12,640 91,384

	235,585 957,731 12,640 1,205,956

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

30 June 2018

Notes to the Interim Condensed Consolidated Financial Statements

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

Fair value hierarchy (continued)

Assets measured at fair value: (continued)

As at 31 December 2017

	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 Power price swap contract Contingent consideration

	439,118 – – 439,118
	– 1,050,000 – 1,050,000

	439,118 1,050,000 – 1,489,118


	– 18 – 18
	– 16,052 – 16,052
	– – 12,640 12,640

	– 16,070 12,640 28,710

	439,118 1,066,070 12,640 1,517,828

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

100

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

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

Fair value hierarchy (continued)

Liabilities measured at fair value:

As at 30 June 2018

	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: Interest rate swap	–	3,275 –	3,275

The Group did not have any financial liabilities measured at fair value as at 31 December 2017.

During the six months ended 30 June 2018, 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 2017: Nil).

Assets for which fair values are disclosed:

As at 30 June 2018

As at 30 June 2018
	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 Trade and bills receivables, non-current portion Financial receivables, non-current portion Other non-current financial asset
	– 103,936 – 103,936
	– 1,963,018 – 1,963,018
	– 5,842,193 – 5,842,193
	– 275,299 – 275,299

	– 8,184,446 – 8,184,446

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

101

30 June 2018

Notes to the Interim Condensed Consolidated Financial Statements

34. 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 2017

	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 investment Trade and bills receivables, non-current portion Financial receivables, non-current portion Financial assets included in prepayments, deposits and other receivables, non-current portion
	– 103,136 – 103,136
	– 49,996 – 49,996
	– 3,111,298 – 3,111,298
	– 4,536,746 – 4,536,746
	– 255,115 – 255,115

	– 8,056,291 – 8,056,291

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

102

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

34. 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 2018

	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
	– 18,940,016 – 18,940,016
	– 954,909 – 954,909
	– 196,528 – 196,528

	– 20,091,453 – 20,091,453

As at 31 December 2017
	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 Trade and bills payables,non-current portion Financial liabilities included in other payables and accruals, non-current portion
	– 15,871,023 – 15,871,023
	– 899,002 – 899,002
	– 30,337 – 30,337

	– 16,800,362 – 16,800,362

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

103

Notes to the Interim Condensed Consolidated Financial Statements

30 June 2018

35. EVENTS AFTER THE REPORTING PERIOD

As at the date of this report, there was not any significant subsequent event since 30 June 2018.

36. 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 24 August 2018.

Xinjiang Goldwind Science & Technology Co., Ltd. Interim Report 2018

104

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GOLDWIND SCIENCE&TECHNOLOGY CO., LTD. — Interim / Quarterly Report 2018

50446_rns_2018-09-18_693d6396-3e6b-413b-a9e1-769b2e5bd942.pdf

Innovating for a Brighter Tomorrow

Contents

Definitions

Definitions

Definitions

“Stock Exchange”

“subsidiary”

“Supervisors”

“Supervisory Committee”

“SZSE”

“Wind Farm Investment and Development”

“Wind Power Services”

“WTG”

“WTG Manufacturing”

“YoY”

“%”

Corporate Information

BOARD OF DIRECTORS

Executive Directors

AUDITORS

International Auditors

PRC Auditors

Non-executive Directors

Independent Non-executive Directors

SUPERVISORS

LISTING PLACES

SHARE REGISTRARS

COMPANY SECRETARY

PRINCIPAL BANKS

PLACE OF BUSINESS

In the PRC

In Hong Kong

LEGAL COUNSEL

COMPANY WEBSITE

Management Discussion and Analysis

I. MAIN POLICY REVIEW

Management Discussion and Analysis

1. Reinforce policy guiding on renewable energy constructions & Encourage orderly and sustainable industrial development

2. Advance renewable energy consumption multi-prongedly & Settle power subsidies and fullguaranteed power purchase

Management Discussion and Analysis

3. Enhance market competitiveness of renewable energy with the support of marketization reform of power market

Management Discussion and Analysis

II. INDUSTRY REVIEW

1. Steady Development of the Wind Power Industry

2. Remarkable Improvement of Wind Curtailment

3. Diversified Incremental Market

Management Discussion and Analysis

4. Continuous Expansion of Offshore and Distributed Wind Power

III. BUSINESS REVIEW

Management Discussion and Analysis

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

1. Product Manufacturing and Sales

Management Discussion and Analysis

2. Technology R&D and Product Certification

Management Discussion and Analysis

a) Product Certification

b) Intellectual Property and Standardization

Management Discussion and Analysis

3. Quality Management

ii. Wind Power Services

Management Discussion and Analysis

iii. Wind Farm Investment and Development

Management Discussion and Analysis

iv. “Two Sea” Strategy

Management Discussion and Analysis

v. Water Treatment Business

Management Discussion and Analysis

vi. Major Subsidiaries

IV. OPERATIONS PERFORMANCE AND ANALYSIS

Summary

Revenue

Management Discussion and Analysis

Cost of Sales

Management Discussion and Analysis

Gross Profit

Management Discussion and Analysis

Other Income and Gains

GOLDWIND SCIENCE&TECHNOLOGY CO., LTD. Interim / Quarterly Report 2018