Stock Code: 200771 Stock ID: Hangqilun B Announcement No. 2010-34
INTERIM REPORT 2010
August 28, 2010
杭州汽轮机股份有限公司
HANGZHOU STEAM TURBINE CO., LTD. 1Table of Contents
Table of Contents....................................................................................................................................................................................2
Chapter I. Important Statement...............................................................................................................................................................3
Chapter II. Company Profile..................................................................................................................................................................4
Chapter III. Changes in Share Capital & Particulars about Shareholders................................................................................................7
Chapter IV. Directors, Supervisors, and Executives...............................................................................................................................9
Chapter V. Board of Director’s Report.................................................................................................................................................11
Chapter VI. Important Events...............................................................................................................................................................15
Chapter VII. Financial Report..............................................................................................................................................................21
Chapter VIII. Documents Ready for Inquiring.....................................................................................................................................81
2Chapter I. Important Statement
Chapter I. Important Statement
1. The Board of Directors and the directors of the Company guarantee that there are no significant omissions, fictitious or misleading statements carried in the Report and we will accept individual and joint responsibilities for the truthfulness, accuracy and completeness of the Report.
2. The Interim Report 2010 was examined at the 3rd meeting of the 5th term of Board and was passed unanimously by the directors at the meeting. None of the directors, supervisors, or senior managements is not able to guarantee or disagree with the accuracy, authentic and completeness.
3. Director Zhen Bin was out on business trip and entrusted Director Wanghongkang to vote on his behalf. All of the other directors attended the meeting.
4 This report is prepared both in English and Chinese. When there is any conflict in understanding, the Chinese version shall prevail.
5. The financial statements carried in this report are not audited.
6. Chairman Mr. Nie Zhonghai, General Manager Mr. Yan Jianhuan, Chief Financial Officer Mr. Bai Ronghua, and the Chief of Accounting Department Mr. Wu Guomei hereby declares: the Financial Statement in the report is guaranteed to be truthful and complete.
The Board of Directors of
Hangzhou Steam Turbine Co., Ltd.
August 28, 2010
3Chapter II. Company Profile
(I) Company Profile
1)
Legal Name of the Company Name in Chinese: 杭州汽轮机股份有限公司 Name in English: HANGZHOU STEAM TURBINE CO., LTD Abbreviation in English: HTC
2)
Legal Representative: Mr. Nie Zhonghai
3)
Secretary of the Board: Mr. Yu Changquan Tel: (0571)85780432 E-mail: ychq@htc.net.cn Stock affair representative: Wang Gang Tel: (0571)85780198 Email: wg@htc.net.cn Board of Directors’ Office: (0571)85780198, 85784758 Fax: (0571)85780433
4)
Registered Address and Office Address: 357 Shiqiao Rd., Hangzhou City, Zhejiang, China Post Code: 310022 Website: http://www.htc.cn
5)
Shares Listed in: Shenzhen Stock Exchange Stock Abbreviation: Hangqilun B Stock Code: 200771
6)
Presses Assigned by National Security Supervisory Committee for Information Disclosure: Website: http://www.cninfo.com.cn Press media: Securities Times, Shanghai Securities Daily, Hong Kong Commercial Daily Report prepared and ready for inquire at: Securities Office, Hangzhou Steam Turbine Co., Ltd.
7)
Supplementary information: 1. Primary business registration of the company was on April 23, 1998 at Zhejiang Provincial Business Administration. The latest renewing of registration was on May 6, 2009 at Zhejiang Provincial Business Administration. 2. Business license No. 330000400001023. 3. Tax registration No. 330165704202620 4. Organization code: 704202620 5. Public accountants employed: Certified public accountant: Pan-China (Zhejiang) Certified Public Accountants Office address: 6-10/F Xihu Business Building, 128 Xixi Road, Hangzhou Post office: 310007 Email: info@orients.cn Tel: (0571)88216888 Fax: （0571）88216999
4(II) Financial highlights
1. Main accounting data and indices
In RMB Yuan
Ended this report term
Ended previous year
Increase/decrease (%)
Gross Assets
5,473,877,595.45
4,910,772,244.30
11.47%
Owners’ equity to shareholders of the listed company
2,443,214,287.92
2,336,109,466.46
4.58%
Share capital
483,340,000.00
371,800,000.00
30.00%
Net asset per share attributable to the shareholders of the listed company (Yuan/share)
5.05
6.28
-19.59%
Report term (Jan-Jun)
Same period last year
Increase/decrease (%)
Turnover
1,840,515,550.97
1,646,527,768.37
11.78%
Operation profit
364,532,652.81
337,811,535.69
7.91%
Total profit
361,682,077.81
338,432,212.27
6.87%
Net profit attributable to the shareholders of the listed company
255,824,821.46
238,780,981.80
7.14%
Net profit after deducting of non-recurring gain/loss attributable to the shareholders of the listed company
257,610,164.37
239,412,809.45
7.60%
Basic earnings per share (Yuan/share)
0.5293
0.6422
-17.58%
Diluted earnings per share (Yuan/share)
0.5293
0.6422
-17.58%
Net return on equity (%)
10.47%
11.99%
-1.52%
Cash flow generated by business operation, net
209,974,963.27
-9,773,984.93
-2,248.30%
Net Cash flow per share generated by business operation (yuan/share)
0.43
-0.03
-1,533.33%
Note: The basic earnings per share of the report term was RMB0.5293 per share. Upon the 483.34 million capital shares after the capitalizing of common reserves, the basic earnings per share would be RMB0.6422 per share. Where the figure provided for same period of last year was on total capital share of 371.80 million.
2. Non-recurring profit/loss items
In RMB Yuan
Non-recurring gain and loss items
Amount
Note (if applicable)
Gain/loss of non-current assets
48,907.71
Government subsidies accounted into current gain/loss account, other than those closely related to the Company’s common business, comply with the national policy and continues to enjoy at certain fixed rate or amount.
1,300,412.00
Other non-business income and expenditures other than the above
-4,199,894.71
Influenced amount of minority shareholders’ equity
508,618.57
Influenced amount of income tax
556,613.52
Total
-1,785,342.91
-
53. Difference between domestic and international accounting standard
In RMB Yuan
Net profit attributable to the shareholders of the listed company
Owners’equity to shareholders of the listed company
Current term
Amount of last term
End of term
Beginning of term
On IAS
255,824,821.46
238,780,981.80
2,443,214,287.92
2,336,109,466.46
On domestic accounting standard
255,824,821.46
238,780,981.80
2,443,214,287.92
2,336,109,466.46
Individual and total of adjustment according to IAS
Total of differences between the IAS and domestic accounting standard
0.00
0.00
0.00
0.00
Statement on differences between the IAS and Chinese Accounting Standard
None
6Chapter III. Changes in Share Capital & Particulars about Shareholders
I. Change of capital shares
According to the resolutions adopted at the Shareholders’ Annual Meeting 2009 held on June 2, 2010, the dividend plan for year 2009 was: basing on the total capital share of 371,800,000 at end of 2009, 3 bonus shares will be distributed to each 10 shares (tax included) as capitalizing of retained profit, upon completion of this plan, the total capital share will be increased to 483,340,000 shares.
II. Change of shareholding position
In shares
Before the change
Changed (+,-)
After the change
Amount
Proportion
Issuing of new shares
Bonus shares
Transferred from reserves
Others
Sub-total
Amount
Proportion
I. None negotiable shares
23,600,000
63.64%
0
70,980,000
0
0
70,980,000
307,580,000
63.64%
1. Promoter’s shares
23,600,000
63.64%
0
70,980,000
0
0
70,980,000
307,580,000
63.64%
Including: State-owned shares
23,600,000
63.64%
0
70,980,000
0
0
70,980,000
307,580,000
63.64%
Domestic legal person shares
Overseas legal person shares
Others
2. Legal person shares placed
3. Employees’ shares
4. Preference shares or others
II. Negotiable shares
135,200,000
36.36%
0
40,560,000
0
0
40,560,000
175,760,000
36.36%
1. Common shares in RMB
2. Foreign shares in domestic market
135,200,000
36.36%
0
40,560,000
0
0
40,560,000
175,760,000
36.36%
3. Foreign shares in overseas market
4. Others
III. Total of capital shares
371,800,000
100.00%
0
111,540,000
0
0
111,540,000
483,340,000
100.00%
III. Top 10 shareholders and current-share holders
in shares
Total of shareholders
15,783
7Top 10 Shareholders
Name of the shareholder
Properties of shareholder
Share proportion %
Total shares
Non-negotiable shares held
Pledged or frozen
Hangzhou Steam Turbine Power Group Co., Ltd.
State-owned legal person
63.64%
307,580,000
307,580,000
91,000,000
SCHRODER INTL SELECTION FD-GREATER CN FD GTI 25287
Overseas legal person
1.69%
8,173,716
0
0
NORGES BANK
Overseas legal person
0.72%
3,470,039
0
0
TOYO SECURITIES ASIA LIMITED-A/C CLIENT.
Overseas legal person
0.37%
1,787,326
0
0
Xia Zulin
Domestic natural person
0.35%
1,673,000
0
0
BOCHK INVESTMENT FUNDS-BOCHK CHINA GOLDEN DRAGON FUND
Overseas legal person
0.34%
1,659,836
0
0
AUSTRALIANSUPER PTY LTD
Overseas legal person
0.28%
1,351,488
0
0
Natio Securities Co.,Ltd.
Overseas legal person
0.24%
1,186,909
0
0
INVESTERINGSFORENINGEN DANSKE INVEST
Overseas legal person
0.22%
1,067,033
0
0
Hu Xiaofeng
Domestic natural person
0..21%
1,004,127
0
0
Top 10 Negotiable Share Holders
Name of the shareholder
Current shares held
Category of shares
SCHRODER INTL SELECTION FD-GREATER CN FD GTI 2528
8,173,716
Foreign shares placed in domestic exchange
NORGES BANK
3,470,039
Foreign shares placed in domestic exchange
TOYO SECURITIES ASIA LIMITED-A/C CLIENT.
1,787,326
Foreign shares placed in domestic exchange
Xia Zulin
1,673,000
Foreign shares placed in domestic exchange
BOCHK INVESTMENT FUNDS-BOCHK CHINA GOLDEN DRAGON FUND
1,659,836
Foreign shares placed in domestic exchange
AUSTRALIANSUPER PTY LTD
1,351,488
Foreign shares placed in domestic exchange
Natio Securities Co.,Ltd.
1,186,909
Foreign shares placed in domestic exchange
INVESTERINGSFORENINGEN DANSKE INVEST
1,067,033
Foreign shares placed in domestic exchange
Hu Xiaofeng
1,004,127
Foreign shares placed in domestic exchange
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED
737,504
Foreign shares placed in domestic exchange
Notes to relationship or “action in concert” among the top ten shareholders.
(1) Of top ten shareholders, Hangzhou Steam Turbine Group Co., Ltd. holds shares on behalf of the State and the others are to B-Share shareholders.
(2) Hangzhou Steam Turbine Group Co., Ltd. is not related to any of the other 9 shareholders. It is unknown whether there is any relationship among the 9 shareholders.
(3) None of the other shareholders are regarded as Act in Concert relationship according to the Administrative Regulations of Information Disclosing of Public Companies.
(4) Hangzhou Steam Turbine Group Co., Ltd. (HSTG) entered the share equity collateral contract with Communication Bank Zhejiang Branch on April 30, 2010. Basing on the original “Highest Value Pledge Contract”, the collateral subject will stay unchanged at 91 million shares. In return, HSTG will have the annual credit up to RMB300 million. The collateral term will start from April 30, 2010 and ended at March 31, 2012. As of the report date, the total of capital shares of the Company was 483.34 million shares, 307.58 were held by HSTG, the 91 million shares were state-owned promoter’s shares, accounted for 29.60% of the shares held by HSTG, and 18.83% of the Company’s total capital shares.
IV. Change of holding shareholder and substantial controller
No change happened to the controlling shareholder and substantial controller.
8Chapter IV. Directors, Supervisors, and Executives
I. Change of shareholding of directors, supervisors and senior executives
Name
Position
Shares held at the beginning of term
Amount of shares increased in the report term
Amount of shares decreased in the report term
Shares held at the end of term
Incl. Conditional shares
Share option held at end of term
Cause of change
Zhang Shutan
Vice General Manager
44,000
13,200
0
57,200
0
0
3 bonus shares to each 10 shares
II. Change of directors, supervisors and senior executives
1. Leaving of directors in the report term
Name
Position
Date of leaving
Reason
Document for reference
Announcement No.
Zhang Mingguang
Independent Director
June 2, 2010
Job term of 6 years expired
Resolutions of the Shareholders’ Annual Meeting 2009
2010-25
Zhou Zhaoxue
Independent Director
June 2, 2010
Job term of 6 years expired
Resolutions of the Shareholders’ Annual Meeting 2009
2010-25
Qi Guoning
Independent Director
June 2, 2010
Job term of 6 years expired
Resolutions of the Shareholders’ Annual Meeting 2009
2010-25
Hua Xiaoning
Independent Director
June 2, 2010
Job term of 6 years expired
Resolutions of the Shareholders’ Annual Meeting 2009
2010-25
2. New directors engaged in the report term
Name
Position
Date of engaging
Way of engaging
Document for reference
Announcement No.
Xu Yongbin
Independent Director
June 2, 2010
Elected at shareholders’ meeting
Resolutions of the Shareholders’ Annual Meeting 2009
2010-25
Lv Fan
Independent Director
June 2, 2010
Elected at shareholders’ meeting
Resolutions of the Shareholders’ Annual Meeting 2009
2010-25
Zhang Hejie
Independent Director
June 2, 2010
Elected at shareholders’ meeting
Resolutions of the Shareholders’ Annual Meeting 2009
2010-25
3. Engaging and dismissing of directors, supervisors and executives.
The Company held the Shareholders’ Annual Meeting 2009, the 1st meeting of the 5th term of Board, and the 1st
9meeting of the 5th term of Supervisory Committee on the same day on June 2, 2010. One the shareholders’ meeting, Nie Zhonghai, Wang Hongkang, Zhen Bin, Yan Jianhua, Bai Ronghua, Ye Zhong, Liu Guoqiang, Xu Yongbin, Lv Fan, and Zhang Hejie were elected the directors and independent directors of the Company respectively; Chu Shuilong, Pu Yangshuo, and Zhang Yougen were elected the supervisors of the 5th term of Supervisory Committee. Supervisor Lu Jianhua, and Zhao Ying, were elected the employee supervisor by the Employees’ Congress on April 23, 2009. Their job term was from April 23, 2009 to April 22, 2012, till reelected by the Union. Mr. Nie Zhonghai was elected by the Board as Chairman, and Mr. Wang Hongkang and Zhen Bin were elected the Vice Chairman. Yan Jianhua, Bai Ronghua, Ye Zhong, Yu Changquan, Ye Yongzhong, and Zhang Shutan were engaged as Vice General Managers. Bai Ronghua, Ye Zhong and Yu Changquan were engaged the Chief Accountant, Chief Engineer, and Secretary of the Board respectively. Chu Shuilong was elected the Chairman of the Supervisory Committee.
Except for all of the independent directors, who are changed, none of the directors, supervisors and executives was changed. 10Chapter V. Board of Director’s Report
I. Business discussion
1. Business overview
In the first half of 210, the national economy continued to grow while the global economy was recovering slowly. The government kept promoting the strategic economic shifting and structural adjustment. Development of the whole country was facing a wilder and deeper reformation. Meanwhile, the Company was using its best effort to consolidate its market share in industrial steam turbine, to reinforce product and technical development, and extend its products to energy-saving and low-carbon area. In the report term, the Company kept growing steadily and realized operational income of RMB1,840.5156 million, gross profit of RMB361.6821 million, net profit attributable to the shareholders of the PLC of RMB255.8248 million, which have increased by 11.78%, 6.87%, and 7.14% respectively over the same period of last year.
In the report term, the Company achieved great increase both in production and sales. As of end of June, the Company has engaged the ordering contracts with total value of RMB1.256 billion, increased by 9.3% over the same period of last year. In which there were 138 units of industrial steam turbine, increased by 39.4%. The headquarter of the Company has realized the total output of RMB1.466 billion, increased by 29.3% over the same period of last year, including 153 units of industrial steam turbine, increased by 19.5% over the same period of last year.
In the report term, the Company kept exploring in the markets. Firstly, our sales in international market were increasing significantly. In the first half of year, the headquarter engaged the contracts valued over RMB357 million, increased by 112.75% over the same period of last year. The export contracts accounted for nearly 30% of the total contracts. This further improved the Company’s market layout both in the country and abroad. Secondly, the leading position in high-end products was consolidated. We won in a number of bidding competition for large scale projects such as large PTA, large ethylene, large water pump for power plant, large air fan, and large thermal power plant equipment. Thirdly, the Company was exploring the energy-saving equipment market. For instance, the Company won the contract with Huaneng International Haimen Power Plant to reengineering its air driver from electronic driving to steam turbine driving. This will reduce the energy consuming of the power plant, and stand a good example for energy-saving reconstruction of power plant industry.
In the report term, the Company kept reinforcing technical development. Since the beginning of 2010, the Company launched R&D on 4 new products and 19 technical programs. The sample unit of auxiliary water pumps for million KW class nuclear power plant has passed the national verification. This will fill up another technical vacancy of the nuclear industry of the country and will provide opportunities for the Company to set its foot into nuclear industry. Through cooperating with researching institutions, universities, and other enterprises, the Company successfully adopted a number of key technologies in the products and production process. In the report term, the Company filed for 14 technical patents, including 5 invention patents.
In the report term, the Company further reinforced its internal management. Along with the implementing of the 12th 5-Year-Plan, the Company conducted discussion and researching in future company structure, market construction, operation control, business upgrading, product planning, technical innovation, and trademark management. At entering of the global market, the Company was flowing national trade routines and kept concentrating in quality management. The quality management system, environment management system, and labor health management system were integrated in the Company. Through holding of the grand meeting with suppliers, the Company reinforced the strategic cooperation with the suppliers. Products provided to major projects were operating at the international standard and won great remark by major clients such as China Petroleum.
In the report term, the performances of holding subsidiaries were increasing. Zhejiang Steam Turbine Packaged Technologies Co., Ltd. has realized sales income of RMB126.0941 million, increased by 153.5% over the same period of last year, and profit of RMB16.1041 million. Hangzhou Steam Turbine Auxiliary Machinery Co., Ltd. has realized sales income of RMB222.7150 million, increased by 12.22% over the same period of last year, and profit of RMB43.5857 million, increased by 23.94%. Hangzhou Steam Turbine Machinery Equipment Co., Ltd. has realized sales income of RMB92.1187 million, increased by 80.02%, and profit of RMB29.8015 million, increased by 88.04%. Hangzhou Steam Turbine Casting Co., Ltd. has realized sales income of RMB139.5253 million, increased by 84.64%, and profit of RMB9.8596 million, increased by 2,012.22%. Hangzhou Zhongneng Steam Turbine Power Co., Ltd. has realized the sales income of RMB344.4547 million, and profit of
11RMB46.9896 million.
2. Business indices and analysis
1) Business performance of the 1st half of year RMB0’000
No.
Items
Jan-Jun 2010
Jan-Jun 2009
Increase/decrease (%)
1
Turnover
184,051.56
164,652.78
11.78
2
Investment gains (“-“ for loss)
110.07
2,989.81
-96.32
3
Operative profit (“-“ for loss)
36,453.27
33,781.15
7.91
4
Non-operational income
220.77
348.90
-36.72
5
Non-operational expenditure
505.83
286.83
76.35
6
Gross profit (“-“ for loss)
36,168.21
33,843.22
6.87
7
Net profit (attributable to the owners’ equity of the parent company)
25,582.48
23,878.10
7.14
8
Net increasing of cash and cash equivalents
-1,790.60
-2,374.32
-24.58
Notes:
(1) Sales income increased by 11.78% over the same period of last year, which was caused by increase of sales of industrial steam turbine.
(2) Investment gains decreased by 96.32%, it was because the dividend of Bank of Hangzhou for year 2009 was received in July 2010.
(3) Operational profit increased by 7.91%, which was caused by increase of operational income.
(4) Non-operational income decreased by 36.72%, which was caused by decreased government subsidy.
(5) Non-operational expenditures increased by 76.35%, which was caused by increase of donation from the same period of last year by RMB1.7783 million, and the hydraulic fund has increased by RMB353.2 thousand.
(6) Total profit has increased by 6.87%, which was caused by increase of operational income.
(7) Net profit (attributable to the owners’ of the parent co.) has increased by 7.14%, which was caused by increase of operational income.
(8) Cash and cash equivalents increased by 24.58%, which was caused by increase of money received from sales of goods and providing of services increased by RMB355.957 million.
2) Business and product segments
In RMB10 thousand
Segments on industries
On industry or product
Turnover
Operation cost
Gross profit ratio (%)
Increase/decrease of turnover over the same period of last year (%)
Increase/decrease of operation cost over the same period of last year (%)
Increase/decrease of gross profit ratio over the same period of last year (%)
Boiler and power machine manufacture
151,592.38
94,798.54
37.46%
11.46%
13.96%
-1.38%
Casting
2,799.84
2,237.01
20.10%
-22.49%
-1.55%
-17.00%
Petrochemical and other special machineries
3,651.03
3,528.72
3.35%
-45.79%
-25.94%
-25.91%
Packaged
5,799.90
4,730.90
18.43%
-43.56%
-26.35%
-19.06%
12equipment for waste heat power plant
Other special equipment
19,182.17
11,980.24
37.54%
211.31%
302.29%
-14.13%
Total
183,025.32
117,275.41
35.92%
12.43%
17.71%
-2.88%
Segments on products
Industrial steam turbine
151,592.38
94,798.54
37.46%
11.46%
13.96%
-1.38%
Casting products
2,799.84
2,237.01
20.10%
-22.49%
-1.55%
-17.00%
Auxiliary machinery
3,651.03
3,528.72
3.35%
-45.79%
-25.94%
-25.91%
Packaged equipment for waste heat power plant
5,799.90
4,730.90
18.43%
-43.56%
-26.35%
-19.06%
Others
19,182.17
11,980.24
37.54%
211.31%
302.29%
-14.13%
Total
183,025.32
117,275.41
35.92%
12.43%
17.71%
-2.88%
3) Main business geographic segment
In RMB10 thousand
Regions
Turnover
Change of income over last year %
Domestic
158,919.54
6.46%
Overseas
24,105.77
78.24%
Total
183,025.32
12.43%
3. Statement on the changes occurred with the major business and its structure
No major change happened to main business and its structure in the report term.
4. Statement on the major change of profitability (gross profit ratio) of major business comparing with last year.
No major change happened to the profitability of the main businesses.
5. Statement on the major changes occurred with the profit structure comparing with last year
No major change happened to the composition of profit structure.
6. Problems and difficulties in the report term
1) In the report term, the Company’s orders were more concentrated in large scale units and with shorter delivery terms. The weakness in productivity of larger scale products was becoming more and more severe. The Company has been doing its best effort to balance internal and external resources to achieve best efficiency of production and overcome the difficulties.
2) Along with increasing of international orders, the Company is facing different technical standards, delivery terms, production process, and difficulties in communicating with overseas customers. The Company is working on standardizing the production process and improve its capacity in organize international operation.
13II. Investment
1. Using of proceeds from share placing.
No financing proceeds in the report term or carried over from previous report term.
2. Using of major non-raised capital
No using of major non-raised capital occurred in the report term.
III. Prospect of the 2nd half
Refer to the business plan of 2010, the Company is facing a tough test in the 2nd half of the year. The Company will further reinforce investment in construction of infrastructures and key equipment, refine internal and external resources, ensure delivering of high-quality products to the clients, and accomplishing of the business target set at the beginning of year. The Company will keep promoting fine production, optimizing cost control, and following with the market trend. Close attention will be paid on national policies and the 12th 5-Year-Plan. The Company will keep following with the national strategies in energy structure upgrading and key equipment manufacturing industry, reinforcing technical innovation, and expand product application area, and reinforce the marketing effort in internal national market.
14Chapter VI. Important Events
I. Administrative Position
In the report period，the Company constantly improved its corporate administration structure, strengthened standardized operation and internal controlling system strictly according to the Company Law, the Securities Law, and the Administration Standards of Listed Companies, aiming to guard the interests of the shareholders. According to the laws and regulations, the Company produced the “Administration rules of shareholding by directors, supervisors, and executives”, “Responsibility tracking rules of major error in annual reports”, and “Administration rules of information insiders”.
In the report term, the Company has conducted term-shifting of the directors, supervisors and executives according to the Articles of Association, and adjusted the members of professional committees in the Board.
The Company was completely independent from the controlling shareholder in aspects of business, personnel, asset, organization and accounting. Decision-making and information disclosing procedures concerning major investment and related transactions have been carried out according to the laws and regulations. No non-operational capital adoption happened in relation to the controlling shareholder and its subsidiaries.
II. Acquiring, disposing and reorganizing of capital
No major acquiring, disposing, or reorganizing of capital occurred in the report term.
III. Non-operational transaction of credits and debts with related parties
In the report term, Hangzhou Steam Turbine Packaged Equipment Engineering Co., Ltd. – the holding subsidiary of Hangzhou Zhongneng Steam Turbine Co., Ltd., borrowed RMB50 million from Hangzhou Relian Import & Export Co., Ltd. – a related party of the Company. The loan term was one year, and was used as working capital of the Packaged Equipment Co.
IV. Major lawsuit issues
The Company has not involved in any material lawsuit or arbitration in the report period.
V. Major contracts
No other material contract engaged in the report term.
VI. Securities investment
The Company made no investment in external securities and hold no shares of other PLCs in the report term.
VII. Shareholding in non-listed financial entities
In RMB Yuan
Name of the enterprises
Initial investment
Shares held
Share portion
Book value at the end of term
Gain/loss of the report term
Change of owners’equity in the report term
Accounting subject
Source of shares
Hangzhou Bank
390,954,040.00
115,593,200
6.92%
390,954,040.00
0
0.00
Long-term share equity investment
Own capital
Total
390,954,040.00
115,593,200
6.92%
390,954,040.00
0
0.00
-
-
VIII. Related transactions
1. No major related transactions in the report term.
2. Operational credits and debts with related parties in the report term: 15In RMB 10 thousand Yuan
Fund provided to the related parties
Accept money from the related parties
Related parties
Amount occurred
Balance
Amount occurred
Balance
Hangzhou Steam Turbine Power Group Co., Ltd.
111.00
87.65
117.75
2,391.37
Hangzhou Steam Turbine Power Sales Co., Ltd.
4,954.64
10,464.69
3,618.36
2,653.48
HSTG Nanfang Sales Co.
0
2.00
0
0
Hangzhou Nanfangtongda Gears Co., Ltd.
0
0
644.97
193.40
Hangzhou Hangfa Power Generating Equipment Co., Ltd.
5,096.34
422.31
5,796.13
845.32
Hangzhou Steam Turbine Automobile Sales Service Co., Ltd.
0
0
1,197.10
589.34
Hangzhou Nanhua Wooden Packaging Co., Ltd.
0
0
628.08
17.65
Hangzhou Steam Turbine Industrial Co.
0
0
106.24
28.96
Hangzhou Steam Turbine Power Technologies Co., Ltd.
1,443.80
836.80
607.00
376.24
Total
11,605.78
11,813.45
12,715.63
7,095.76
IX. Non-operational capital adoption and settlement with the holding shareholder and its subsidiaries
In the report term, no such non-operation capital adoption or settlement with the holding shareholder or its affiliates
X. Special statement and independent opinion of the independent directors on capital adoption by the holding shareholder and providing of external guarantees
According to Announcement 证监发[2003]56 号 issued by CSRC, 证监发[2005]120 号 issued by CSRC and CBRC, and 上市部函[2006]25 号 issued by CSRC, as the independent directors of Hangzhou Steam Turbine Co., Ltd., we have observed and verified the situations about capital adoption and providing of external guarantees in the interim term of 2010, and issued the following independent opinions
1.As of June 30, 2010, all of the capital trades between the Company and the holding shareholder were due to business operation without illegal capital adoption. We found no capital adoption by controlling shareholder or other related parties.
2. As of June 30, 2010, the Company never conducted any external guarantee and no such guarantee happened in previous terms and carried over to the current term.
Independent director: Xu Yongbin, Lv Fan, Zhang Hejie
August 25, 2010
XI. Guarantees provided to holding subsidiaries in the report term
The Company provided Hangzhou Zhongneng Steam Turbine Power Co., Ltd. (Zhongneng Co.) guarantee for RMB60 million of loan with term of one year: July 1, 2010 to June 30, 2011. The guarantee was provided by way of: Zhongneng Co. applied the credit of RMB60 million to Bank of China Hangzhou Technologies Development Zone Branch, the Company resume the joint liabilities. For details please go to The Announcement of Providing Guarantee to Zhongneng Co. for the Bank Credit of RMB60 million (Announcement No. 2010-31).
The 10th meeting of the 4th term of Board held on July 15, 2009 approved the guarantee provided to Hangzhou Steam Turbine Casting Co., Ltd. – one of the holding subsidiaries, for RMB40.80 million of bank loans for three years: July 15, 2009 to July 14, 2012. For details please go to The announcement of providing guarantee to the Casting Co. for the bank loan of RMB40.80 million (Announcement No. Lin2009-16). As of the date of this report, the loan was not raised yet.
Except for the above, the Company provided no guarantees to any of the holding shareholder, its related parties, any legal persons, or non-legal-person organizations, or individuals as of the date of this report. No such guarantees provided in previous terms and carried over to the report term either.
16Independent directors’ opinion on the guarantees: The Company provided RMB60 million of guarantee to Zhongneng Co., which was to support the contract warrant deposit and working capital of the construction of the new workshops, which were rational operation of the Company. The guarantee was provided upon legal procedures and didn’t impair the interests of the mid-small shareholders. (For details please see “The independent directors’ opinions on providing of RMB60 million of guarantee to Zhongneng Co.” (Announcement No. 2010-32).
XII. Fulfilling of commitments made by the Company, the shareholder, or substantial controlling party
No commitment issues with any of the Company, the shareholders, or substantial controlling party of the Company in the report term.
XIII. Dividend distribution or capitalizing of reserves proposed by the Board
No dividend distribution or capitalizing of reserves will be carried out for the first half of 2010.
XIV. Execution of dividend distribution or capitalizing of common reserves in the report term
As proposed by the shareholders’ general meeting, basing on the total capital shares of 371,800,000 shares at the end of 2009, 3 bonus shares will be distributed to each 10 shares, the total capital shares will increase to 483,340,000 shares; and RMB4.00 (tax inclusive) of cash dividend will be allocated to each 10 shares. Totally RMB148,720,000.00 of profit will be distributed. Dividend for B share holders will be translated to Hong Kong Dollar at the middle rate released by People’s Bank of China at the first bank day after the profit distribution plan was approved by the Shareholders’ Annual Meeting 2009 (June 3, 2010).
According to the laws and regulations, income tax of 10% will be paid by the Company on behalf of the corporation shareholders. After deducting of taxes, the corporation shareholders actually receive 3 bonus shares and RMB3.30 of cash upon each 10 shares. Income tax of non-corporation B-share holders is not paid by the Company.
The above dividend plan has been accomplished in the report term. The final trading day of B shares will be June 22, 2010, where the ex-dividend date will be June 23, 2010. B share registration date will be June 25, 2010, and the bonus shares may be traded since June 28, 2010. Dividend for state-owned shareholders were distributed by the Company directly; Dividend for B-share holders were transferred to their account through the broker or bank on June 25, 2010; Dividend were recorded to the shareholders’ account on June 25, 2010. (For details of the above dividend distribution please go to Announcement Lin 2010-29 published on Securities Times, Shanghai Securities Daily, Hong Kong Commercial Daily and http://www.cninfo.com.cn dated June 12, 2010.
XV. Reception of investigations, communications, or interviews
Time/date
Place
Way
Visitors
Main content involved and material provided
Feb 04, 2010
HTC
Face to face talk
Dahe Securities
Capital expenditure of recent years, possibility of issuing H shares
Mar 15, 2010
HTC
Face to face talk
Zhongjin Co. Hong Kong
Hangzhou Bank Share, order trend, influence of financial crisis, productivity, competitors, share equity reformation
April 17, 2010
HTC
Telephone communication
Huale Investment
Production circle, order source, influence of material price, financing resource
Apr 1, 2010
HTC
Face to face talk
Orient Securities
Product introduction, industry profile, route of B shares, orders, future development
Apr 21, 2010
HTC
Face to face talk
Individual shareholder
Business structure, employee wages, residue heat power plant, investor relationship, preferable policies
May 13, 2010
HTC
Face to face talk
J.P. Morgan
Growth point of 2010, competitions, advantages of the Company, price comparison, energy-saving advantage, employees, market share, overseas market, productivity
May 14 2010
HTC
Face to face talk
China Fund
Raw material, orders, 3-year expectation, advantages, overseas market
Jun 25, 2010
HTC
Face to face talk
Haitong Securities
Industrial and international trend, the holding shareholder, services, residue heat recycling products
17XVI. No commitment issues made by shareholders with 5% or above share equities in the report term or carried down from previous terms, which could made major influence on the business performance or financial situation of the Company.
XVII. In the report term, none of the directors, supervisors, and executives was under investigation by the authorities, under force execution of law departments, turned to legal process, investigated or punished by China Securities Regulatory Commission, prohibited or criticized by the Stock Exchange, regarded as inappropriate person, or under punishment of other authorities.
XVIII. Information disclosure in the report term
Announcement No.
Date
Content
Official media
Official website
2010-01
April 23, 2010
Annual Report 2009, summary
Securities Time
Shanghai Securities Daily
Hong Kong Commercial Daily
2010-02
April 23, 2010
Annual Report 2009, full text
http://www.cninfo.com.cn
2010-03
April 23, 2010
Financial Report 2009
http://www.cninfo.com.cn
2010-04
April 23, 2010
Auditors’ Report 2009
http://www.cninfo.com.cn
2010-05
April 23, 2010
Resolutions of the 13th Meeting of the 4th Term of Board
Securities Time
Shanghai Securities Daily, Hong Kong Commercial Daily
http://www.cninfo.com.cn
2010-06
April 23, 2010
Resolutions of the 10th meeting of the 4th term of Board
Securities Time
Shanghai Securities Daily
Hong Kong Commercial Daily
http://www.cninfo.com.cn
2010-07
April 23, 2010
Specific statement and independent opinions on capital adoption by related parties, external guarantees, related transactions, and wages of executives
Securities Time
Shanghai Securities Daily
http://www.cninfo.com.cn
2010-08
April 23, 2010
Report of self-assessment on internal control system 2009
Securities Time
Shanghai Securities Daily
http://www.cninfo.com.cn
2010-09
April 23, 2010
Independent directors’ comments on the ‘Report of self-assessment on internal control system 2009’
Securities Time
Shanghai Securities Daily
http://www.cninfo.com.cn
2010-10
April 23, 2010
Independent Directors’ Work Report 2009
Securities Time
Shanghai Securities Daily
http://www.cninfo.com.cn
2010-11
April 23, 2010
Statement on the special auditing on non-operational capital adoption and trade with related parties in 2009 by the CPA
Securities Time
Shanghai Securities Daily
http://www.cninfo.com.cn
182010-12
April 23, 2010
Amount of related transactions in 2009 and expected for 2010
Securities Time
Shanghai Securities Daily
http://www.cninfo.com.cn
2010-13
April 23, 2010
Assessment report on the performance of CPA of year 2009, and announcement of extending the services of the CPA for year 2010
Securities Time
Shanghai Securities Daily
http://www.cninfo.com.cn
2010-14
April 23, 2010
Information Insider Administration Rules
http://www.cninfo.com.cn
2010-15
April 23, 2010
Responsibility tracking rules for major error in annual reports
http://www.cninfo.com.cn
2010-16
April 23, 2010
Rules of Shareholding of the Directors, Supervisors and Senior Executives
http://www.cninfo.com.cn
2010-17
April 23, 2010
Securities Administration Rules
http://www.cninfo.com.cn
2010-18
April 23, 2010
The social responsibility report 2009 of the Company
http://www.cninfo.com.cn
2010-19
April 23, 2010
Announcement of Calling the Shareholders’ Annual Meeting 2009
Securities Time
Shanghai Securities Daily, Hong Kong Commercial Daily
http://www.cninfo.com.cn
2010-20
April 28, 2010
The 1st Quarterly Report 2010, official text
Securities Time
Shanghai Securities Daily
Hong Kong Commercial Daily
2010-21
April 28, 2010
The 1st Quarterly Report 2010, full text
http://www.cninfo.com.cn
2010-22
May 15, 2010
Resolutions of the 15th Meeting of the 4th Term of Board
Securities Time
Shanghai Securities Daily
Hong Kong Commercial Daily
http://www.cninfo.com.cn
2010-23
May 15, 2010
Notice on adding provisional proposals to the agenda of the Shareholders’ Annual Meeting 2009
Securities Time
Shanghai Securities Daily, Hong Kong Commercial Daily
http://www.cninfo.com.cn
2010-24
May 20, 2010
Announcement of accepting Mr. Qi Guoning’s application to give up the qualification as nominee of independent director
Securities Time
Shanghai Securities Daily
Hong Kong Commercial Daily
http://www.cninfo.com.cn
2010-25
June 3, 2010
The Resolutions of Shareholders’ Annual Meeting 2009
Securities Time
Shanghai Securities Daily
Hong Kong Commercial Daily
http://www.cninfo.com.cn
192010-26
June 3, 2010
Resolutions of the 1st meeting of the 5th term of Board
Securities Time
Shanghai Securities Daily
Hong Kong Commercial Daily
http://www.cninfo.com.cn
2010-27
June 3, 2010
Resolutions of the 1st meeting of the 5th term of Supervisory Committee
Securities Time
Shanghai Securities Daily
Hong Kong Commercial Daily
http://www.cninfo.com.cn
2010-28
June 3, 2010
Independent directors’ comments on engagement of executives
Securities Time
Shanghai Securities Daily
http://www.cninfo.com.cn
2010-29
June 12, 2010
Announcement of Dividend for Year 2009
Securities Time
Shanghai Securities Daily
Hong Kong Commercial Daily
http://www.cninfo.com.cn
2010-30
June 30, 2010
Resolutions of the 2nd meeting of the 5th term of Board
Securities Time
Shanghai Securities Daily
Hong Kong Commercial Daily
http://www.cninfo.com.cn
2010-31
June 30, 2010
Announcement of providing guarantee for the loan of RMB60 million to Zhongneng Co., - the holding subsidiary of the Company.
Securities Time
Shanghai Securities Daily
http://www.cninfo.com.cn
2010-32
June 30, 2010
Independent directors’ opinion on providing guarantee for the loan of RMB60 million to Zhongneng Co.
Securities Time
Shanghai Securities Daily
http://www.cninfo.com.cn
20Chapter VII. Financial Report
(Not Audited)
(I) Financial Statements
Balance Sheet
Prepared by: Hangzhou Steam Turbine Co., Ltd. Ended June 30, 2010 in RMB Yuan
Balance at the end of term
Balance at the beginning of year
Items
Consolidated
Parent company
Consolidated
Parent company
Current asset:
Monetary capital
468,533,578.69
149,989,673.29
486,439,602.82
100,717,329.17
Settlement provision
Outgoing call loan
Transactional financial assets
Notes receivable
569,736,165.06
363,217,504.37
585,510,190.21
434,620,525.22
Account receivable
1,589,408,947.69
1,322,963,582.45
1,329,433,302.65
1,115,063,042.90
Prepayment
318,739,151.06
123,948,075.50
219,791,399.56
78,676,643.13
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance contracts receivable
Interest receivable
Dividend receivable
Other account receivable
29,050,437.43
24,249,125.64
17,333,756.04
16,869,617.12
Repurchasing of financial assets
Inventories
1,174,826,940.07
869,692,814.01
1,009,100,047.12
774,155,875.55
Non-current asset due in 1 year
Other current asset
108,275.80
Total of current asset
4,150,295,220.00
2,854,060,775.26
3,647,716,574.20
2,520,103,033.09
Non-current assets
Loans and payment on other’s behalf disbursed
Disposable financial asset
Expired investment in possess
Long-term receivable
Long-term share equity investment
402,586,451.62
472,280,099.47
402,586,451.62
472,280,099.47
Investment properties
Fixed assets
516,774,651.56
336,300,049.36
528,315,267.49
350,458,537.59
Construction in process
181,058,362.57
39,587,413.97
133,993,100.65
14,507,898.96
Engineering goods
411,981.80
Fixed asset disposal
Production physical assets
Gas & petrol
Intangible assets
160,138,182.23
46,724,159.17
141,444,716.26
47,902,806.89
R&D expense
Goodwill
187,501.55
Long-term amortizable expenses
9,716,028.93
7,438,801.13
8,092,318.74
7,438,801.13
Differed income tax asset
52,709,215.19
39,114,576.96
48,623,815.34
39,114,576.96
Other non-current asset
Total of non-current assets
1,323,582,375.45
941,445,100.06
1,263,055,670.10
931,702,721.00
Total of assets
5,473,877,595.45
3,795,505,875.32
4,910,772,244.30
3,451,805,754.09
Current liabilities
Short-term loans
195,000,000.00
136,000,000.00
Loan from Central Bank
Deposit received and hold for others
Call loan received
Trade off financial liabilities
Notes payable
70,004,809.92
47,141,782.92
103,656,815.22
155,170,592.22
Account payable
536,270,437.77
387,235,375.67
320,766,161.48
202,453,257.90
21Prepayment received
1,387,427,722.19
961,417,044.87
1,233,884,154.03
872,137,702.04
Selling of repurchased financial assets
Fees and commissions receivable
Employees’ wage payable
35,749,491.69
23,286,688.39
23,241,197.54
14,713,270.72
Tax payable
76,686,730.39
66,942,907.15
89,484,573.70
62,319,098.96
Interest payable
195,250.00
Dividend payable
Other account payable
88,031,611.00
31,969,193.39
24,231,372.13
14,582,847.36
Reinsurance fee payable
Insurance contract provision
Entrusted trading of securities
Entrusted selling of securities
Non-current liability due in 1 year
Other current liability
Total of current liability
2,389,170,802.96
1,517,992,992.39
1,931,459,524.10
1,321,376,769.20
Non-current liabilities
Long-term borrowings
260,463,800.00
190,463,800.00
247,463,800.00
190,463,800.00
Bond payable
Long-term payable
330,000.00
330,000.00
Special payable
Contingent liabilities
Differed income tax liability
1,225,366.39
1,225,366.39
1,225,366.39
1,225,366.39
Other non-recurring liabilities
8,004,440.00
6,362,250.00
3,322,740.00
1,942,250.00
Total of non-current liabilities
270,023,606.39
198,051,416.39
252,341,906.39
193,631,416.39
Total of liability
2,659,194,409.35
1,716,044,408.78
2,183,801,430.49
1,515,008,185.59
Owners’ equity (or shareholders’ equity)
Capital paid in (or share capital)
483,340,000.00
483,340,000.00
371,800,000.00
371,800,000.00
Capital reserves
138,953,250.09
138,953,250.09
138,953,250.09
138,953,250.09
Less: Shares in stock
Special reserves
Surplus reserves
327,932,742.87
309,176,337.74
327,932,742.87
309,176,337.74
Common risk provision
Retained profit
1,492,988,294.96
1,147,991,878.71
1,497,423,473.50
1,116,867,980.67
Different of foreign currency translation
Total of owner’s equity belong to the parent company
2,443,214,287.92
2,079,461,466.54
2,336,109,466.46
1,936,797,568.50
Minor shareholders’ equity
371,468,898.18
390,861,347.35
Total of owners’ equity
2,814,683,186.10
2,079,461,466.54
2,726,970,813.81
1,936,797,568.50
Total of liabilities and owners’ equity
5,473,877,595.45
3,795,505,875.32
4,910,772,244.30
3,451,805,754.09
22Income Statement
Prepared by: Hangzhou Steam Turbine Co., Ltd. Jan - Jun 2010 in RMB Yuan
Amount of the Current Term
Amount of the Previous Term
Items
Consolidated
Parent company
Consolidated
Parent company
I. Total revenue
1,840,515,550.97
1,315,034,718.53
1,646,527,768.37
1,073,162,456.36
Incl. Business income
1,840,515,550.97
1,315,034,718.53
1,646,527,768.37
1,073,162,456.36
Interest income
Insurance fee earned
Fee and commission received
II. Total business cost
1,477,083,633.93
1,086,383,790.37
1,338,614,316.66
897,083,253.50
Incl. Business cost
1,180,414,236.98
882,879,318.32
1,012,507,507.68
647,775,737.01
Interest expense
Fee and commission paid
Insurance discharge payment
Net claim amount paid
Net insurance policy reserves provided
Insurance policy dividend paid
Reinsurance expenses
Business tax and surcharge
5,129,818.23
1,947,356.38
5,160,353.50
1,470,364.64
Sales expense
54,567,107.05
35,616,211.64
45,458,660.63
31,560,637.45
Administrative expense
177,912,362.66
122,113,732.45
249,922,132.65
201,008,922.60
Financial expenses
9,719,615.00
4,603,057.83
-6,368,268.96
-8,223,147.20
Asset impairment loss
49,340,494.01
39,224,113.75
31,933,931.16
23,490,739.00
Plus: Gains from change of fair value (“-“ for loss)
Investment gain (“-“ for loss)
1,100,735.77
98,297,793.27
29,898,083.98
74,878,300.00
Incl. Investment gains from affiliates
Gains from currency exchange (“-“ for loss)
III. Operational profit (“-“ for loss)
364,532,652.81
326,948,721.43
337,811,535.69
250,957,502.86
Plus: Non business income
2,207,680.04
891,907.71
3,489,025.96
274,985.76
Less: Non-business expenses
5,058,255.04
2,382,712.61
2,868,349.38
1,673,162.45
Incl. Loss from disposal of non-current assets
IV. Gross profit (“-“ for loss)
361,682,077.81
325,457,916.53
338,432,212.27
249,559,326.17
Less: Income tax expenses
55,770,552.85
34,074,018.49
50,301,587.28
26,202,153.93
V. Net profit (“-“ for net loss)
305,911,524.96
291,383,898.04
288,130,624.99
223,357,172.24
Net profit attributable to the owners of parent company
255,824,821.46
291,383,898.04
238,780,981.80
223,357,172.24
Minor shareholders’ equity
50,086,703.50
49,349,643.19
VI. Earnings per share:
(I) Basic earnings per share
0.5293
0.6422
(II) Diluted earnings per share
0.5293
0.6422
VII. Other misc. incomes
VIII. Total of misc. incomes
305,911,524.96
291,383,898.04
288,130,624.99
223,357,172.24
Total of misc. incomes attributable to the owners of the parent company
255,824,821.46
291,383,898.04
238,780,981.80
223,357,172.24
Total misc gains attributable to the minor shareholders
50,086,703.50
49,349,643.19
23Cash Flow Statement
Prepared by: Hangzhou Steam Turbine Co., Ltd. Jan - Jun 2010 in RMB Yuan
Amount of the Current Term
Amount of the Previous Term
Items
Consolidated
Parent company
Consolidated
Parent company
I. Net cash flow from business operation
Cash received from sales of products and providing of services
1,762,387,472.25
1,107,857,783.61
1,406,430,485.49
938,720,443.94
Net increase of customer deposits and capital kept for brother company
Net increase of loans from central bank
Net increase of inter-bank loans from other financial bodies
Cash received against original insurance contract
Net cash received from reinsurance business
Net increase of client deposit and investment
Net increase of trade financial asset disposal
Cash received as interest, processing fee, and commission
Net increase of inter-bank fund received
Net increase of repurchasing business
Tax returned
1,069,300.00
15,999,725.87
14,407,182.93
Other cash received from business operation
28,631,978.56
5,500,330.14
20,064,437.32
2,191,871.00
Sub-total of cash inflow from business activities
1,792,088,750.81
1,113,358,113.75
1,442,494,648.68
955,319,497.87
Cash paid for purchasing of merchandise and services
1,074,285,012.58
665,615,592.59
1,042,124,631.51
839,332,022.58
Net increase of client trade and advance
Net increase of savings in central bank and brother company
Cash paid for original contract claim
Cash paid for interest, processing fee and commission
Cash paid for policy dividend
Cash paid to staffs or paid for staffs
207,469,163.90
164,121,586.78
191,294,908.68
152,196,676.51
Taxes paid
191,337,679.45
115,386,353.49
160,723,076.96
100,812,561.79
Other cash paid for business activities
109,021,931.61
35,380,449.46
58,126,016.46
20,394,180.04
Sub-total of cash outflow from business activities
1,582,113,787.54
980,503,982.32
1,452,268,633.61 1,1
12,735,440.92
Cash flow generated by business operation, net
209,974,963.27
132,854,131.43
-9,773,984.93
-157,415,943.05
II. Cash flow generated by investing
Cash received from investment retrieving
Cash received as investment gains
1,100,735.77
98,197,057.50
30,114,561.65
92,090,800.00
Net cash retrieved from disposal of fixed assets, intangible assets, and other long-term assets
92,900.00
72,950.00
146,400.00
146,400.00
Net cash received from disposal of subsidiaries or other operational units
Other investment-related cash received
90,868.96
100,735.77
Sub-total of cash inflow due to investment activities
1,284,504.73
98,370,743.27
30,260,961.65
92,237,200.00
Cash paid for construction of fixed assets, intangible assets and other long-term assets
123,511,525.92
28,680,728.15
24,019,009.01
7,944,707.66
Cash paid as investment
700,000.00
1,937,647.85
1,937,647.85
Net increase of loan against pledge
2425
Net cash received from subsidiaries and other operational units
Other cash paid for investment activities
Sub-total of cash outflow due to investment activities
124,211,525.92
28,680,728.15
25,956,656.86
9,882,355.51
Net cash flow generated by investment
-122,927,021.19
69,690,015.12
4,304,304.79
82,354,844.49
III. Cash flow generated by financing
Cash received as investment
Incl. Cash received as investment from minor shareholders
Cash received as loans
193,000,000.00
287,463,800.00
140,463,800.00
Cash received from bond placing
Other financing-related cash received
Subtotal of cash inflow from financing activities
193,000,000.00
287,463,800.00
140,463,800.00
Cash to repay debts
71,000,000.00
105,000,000.00
Cash paid as dividend, profit, or interests
226,621,543.69
152,939,465.11
210,780,258.38
151,503,175.10
Incl. Dividend and profit paid by subsidiaries to minor shareholders
Other cash paid for financing activities
3,000,000.00
Subtotal of cash outflow due to financing activities
297,621,543.69
152,939,465.11
318,780,258.38
151,503,175.10
Net cash flow generated by financing
-104,621,543.69
-152,939,465.11
-31,316,458.38
-11,039,375.10
IV. Influence of exchange rate alternation on cash and cash equivalents
-332,422.52
-332,337.32
13,042,975.99
13,042,967.12
V. Net increase of cash and cash equivalents
-17,906,024.13
49,272,344.12
-23,743,162.53
-73,057,506.54
Plus: Balance of cash and cash equivalents at the beginning of term
486,439,602.82
100,717,329.17
450,103,030.94
158,711,304.02
VI. Balance of cash and cash equivalents at the end of term
468,533,578.69
149,989,673.29
426,359,868.41
85,653,797.48Consolidated Statement of Change in Owners’ Equity
Prepared by: Hangzhou Steam Turbine Co., Ltd. The 1st Half of 2010 in RMB Yuan
Amount of the Current Term
Amount of Last Year
Owners’ Equity Attributable to the Parent Company
Owners’ Equity Attributable to the Parent Company
Items
Capital paid in (or share capital)
Capital reserves
Less: Shares in stock
Special reserves
Surplus reserves
Common risk provision
Retained profit
Minor shareholders’equity
Total of owners’ equity
Others
Capital paid in (or share capital)
Capital reserves
Less: Shares in stock
Special reserves
Surplus reserves
Common risk provision
Retained profit
Minor shareholders’ equity
Total of owners’ equity
Others
I. Balance at the end of last year
371,800,000.00
138,953,250.09
327,932,742.87
1,497,423,473.50
390,861,347.35
2,726,970,813.81
371,800,000.00
138,953,250.09
279,205,827.20
1,111,352,798.36
306,483,927.77
2,207,795,803.42
Plus: Change of accounting policy
Correcting of previous errors
Others
II. Balance at the beginning of current year
371,800,000.00
138,953,250.09
327,932,742.87
1,497,423,473.50
390,861,347.35
2,726,970,813.81
371,800,000.00
138,953,250.09
279,205,827.20
1,111,352,798.36
306,483,927.77
2,207,795,803.42
III. Changed in the current year (“-“ for decrease)
111,540,000.00
-4,435,178.54
-19,392,449.17
87,712,372.29
48,726,915.67
386,070,675.14
84,377,419.58
519,175,010.39
(I) Net profit
255,824,821.46
50,086,703.50
305,911,524.96
583,517,590.81
121,356,241.00
704,873,831.81
(II) Other misc. income
Total of (I) and (II)
255,824,821.46
50,086,703.50
305,911,524.96
583,517,590.81
121,356,241.00
704,873,831.81
(III) Investment or decreasing of capital by owners
6,585,711.86
6,585,711.86
1. Capital inputted by owners
18,067,564.86
18,067,564.86
2. Amount of shares paid and accounted as owners’ equity
3. O
-11,481,853.00
-11,481,853.00
(IV) Profit allotment
111,540,000.00
260,260,000.00
-69,479,152.67
-218,199,152.67
48,726,915.67
-197,446,915.67
-43,564,533.28
-192,284,533.28
1. Providing of surplus reserves
48,726,915.67
-48,726,915.67
2. Common risk provision
3. Allotment to the
111,540,000.
260,260,000.0
-69,479,152.6
-218,199,152.
-148,720,000.
-43,564,533.2
-192,284,533.
26owners (or shareholders)
00
0
7
67
00
8
28
4. Other
(V) Internal transferring of owners’ equity
1. Capitalizing of capital reserves (or to capital shares)
2. Capitalizing of surplus reserves (or to capital shares)
3. Making up losses by surplus reserves
4. Others
(VI) Special reserves
1. Provided this year
2. Used this
er
IV. Balance at the end of this term
483,340,000.00
138,953,250.09
327,932,742.87
1,492,988,294.96
371,468,898.18
2,814,683,186.10
371,800,000.00
138,953,250.09
327,932,742.87
1,497,423,473.50
390,861,347.35
2,726,970,813.81
Change in Owners’ Equity (Parent Co.)
Prepared by: Hangzhou Steam Turbine Co., Ltd. The 1st Half of 2010 in RMB Yuan
Amount of the Current Term
Amount of Last Year
Items
Capital paid in (or share capital)
Capital reserves
Less: Shares in stock
Special reserves
Surplus reserves
Common risk provision
Retained profit
Total of owners’ equity
Capital paid in (or share capital)
Capital reserves
Less: Shares in stock
Special reserves
Surplus reserves
Common risk provision
Retained profit
Total of owners’ equity
I. Balance at the end of last year
371,800,000.00
138,953,250.09
309,176,337.74
1,116,867,980.67
1,936,797,568.50
371,800,000.00
138,953,250.09
260,449,422.07
827,045,739.68
1,598,248,411.84
Plus: Change of accounting policy
Correcting of previous errors
II. Balance at the beginning of current year
371,800,000.00
138,953,250.09
309,176,337.74
1,116,867,980.67
1,936,797,568.50
371,800,000.00
138,953,250.09
260,449,422.07
827,045,739.68
1,598,248,411.84
III. Changed in the current year (“-“ for decrease)
111,540,000.00
31,123,898.04
142,663,898.04
48,726,915.67
289,822,240.99
338,549,156.66 2728
(I) Net profit
291,383,898.04
291,383,898.04
487,269,156.66
487,269,156.66
(II) Other misc. income
Total of (I) and (II)
291,383,898.04
291,383,898.04
487,269,156.66
487,269,156.66
(III) Investment or decreasing of capital by owners
1. Capital inputted by owners
2. Amount of shares paid and accounted as owners’ equity
3.
(IV) Profit allotment
111,540,000.00
-260,260,000.00
-148,720,000.00
48,726,915.67
-197,446,915.67
-148,720,000.00
1. Providing of surplus reserves
48,726,915.67
-48,726,915.67
2. Common risk provision
3. Allotment to the owners (or shareholders)
111,540,000.00
-260,260,000.00
-148,720,000.00
-148,720,000.00
-148,720,000.00
4. Others
(V) Internal transferring of owners’ equity
1. Capitalizing of capital reserves (or to capital shares)
2. Capitalizing of surplus reserves (or to capital shares)
3. Making up losses by surplus reserves
4. Others
(VI) Special reserves
1. Provided this year
2. Used thi ster
IV. Balance at the end of this term
483,340,000.00
138,953,250.09
309,176,337.74
1,147,991,878.71
2,079,461,466.54
371,800,000.00
138,953,250.09
309,176,337.74
1,116,867,980.67
1,936,797,568.50(II) Notes to Financial Statements (the 1st half of 2010)
In RMB
I. Company Profile
Hangzhou Steam Turbine Co., Ltd. (the Company) was incorporated as a joint stock limited company exclusively promoted by Hangzhou Steam Turbine & Power Group Company Limited (“HSTG”) approved by the Securities Regulatory Commission of the State Council with the Document SRC [1998] No. 8 by offering domestically listed foreign currency ordinary shares (B Shares), with registration date: April 23, 1998, legal entity business license No.: QGZZ Zi No. 002150, current registered capital RMB 220,000,000. The Company has issued 80,000,000 B Shares which have been listed for trading with Shenzhen Stock Exchange commencing from April 28, 1998. On December 2, 1998, the Company became a joint stock enterprise with foreign investment through approval by the State Ministry of Foreign Trade and Economic Cooperation with the document [1998]外经贸资二函字第745号. The number of Business License was changed to 330000400001023 on May 6, 2009.
On June 8th 2006, as approved at the Shareholders’ Annual Meeting 2005, the Company capitalized the common reserves upon the total capital shares of 220 million shares at December 31, 2005, namely 3 new shares to each 10 shares. After that, the total of capital shares was changed to 286 million shares, and the registered capital was changed to RMB286 million thereof. Registration alternation procedures have been accomplished on December 31, 2006.
On June 15th 2006, as approved at the Shareholders’ Annual Meeting 2006, the Company capitalized the common reserves upon the total capital shares of 286 million shares at December 31, 2006, namely 3 new shares to each 10 shares (tax included). After that, the total of capital shares was changed to 371.8 million shares, and the registered capital was changed to RMB371.8 million thereof. Registration alternation procedures have been accomplished in December, 2007.
On June 2, 2010, as approved at the Shareholders’ Annual Meeting 2009, the Company capitalized the common reserves upon the total capital shares of 371.8 million shares at December 31, 2009, namely 3 new shares to each 10 shares (tax included). After that, the total of capital shares was changed to 483.34 million shares, and the registered capital was changed to RMB483.34 million thereof. Among the capital shares, 307.58 million shares are non-negotiable state-owned legal person shares, and 175.76 million are current B-shares. Registration alternation procedures are in process.
The scope of key business of the Company: The design and manufacturing of steam turbine, gas turbine, other rotating and to-and-fro machinery and auxiliary equipment, and spare parts and components, sales of self-manufactured products and the provision of relevant after-sales service and import & export service.
II. The main accounting policies and accounting estimations adopted
(I) Basis of compiling the finance report
The Company adopts perpetual operation as the basis of financial statements.
(II) Statement of compliance to the Enterprise Accounting Standard
The finance report compiled by the Company is accordance with the enterprise accounting standard taken effect in February 2006, it reflects the Company’s finance state, achievements and cash flow fairly and entirely.
(III) Accounting period
The Company uses the calendar year for its fiscal year. A fiscal year is from January 1 to December 31.
(IV) Standard currency for bookkeeping
The Company uses Renminbi (RMB) as the standard currency for book keeping.
(V) Accounting treatment of the entities under common control and different control as well
1. Treatment of entities under common control
29Assets and liabilities acquired in merger of entities are measured at book values at the date of merger. The difference between the net book value of asset and the offered price (or total of face value of shares issued) will be adjusted into capital reserves; when the capital reserves is not enough to reduce, it will be adjusted into retained profit.
2. Treatment of entities under different control
The difference of takeover cost over the fair value of recognizable net asset of the acquired entity is recognized as goodwill at the day of takeover; in case the takeover cost is lower than the fair value of recognizable net asset of the acquired entity, the measuring process over the recognizable asset, liabilities,contingent liabilities, and takeover cost, shall be repeated, if comes out the same result, the difference shall be recorded into current income account.
(VI) Method for preparing the consolidated financial statements
The parent company puts all of its subsidiaries under its control into the consolidated financial statements. The consolidated financial statements are prepared according to the 揈nterprise Accounting Standard No. 33 – Consolidated Financial Statements”, basing on the accounts of the parent company and the subisidiaries, and after adjusting the long-term investment equity in the subsidiary on equity basis.
(VII) Recognition of cash and cash equivalents
Cash equivalent refers to the investment held by the Company with short term, strong liquidity and lower risk of value fluctuation that is easy to be converted into cash of known amount.
(VIII) Foreign currency trade and translation of foreign currencies
1. Translation of foreign currency
Foreign currency trades are translated into RMB at the rate of the day when the trades are made. Those balances of foreign currencies and monetary items in foreign currencies are accounted at the exchange rate of the balance sheet date. Exchange differences, other than special loans satisfying the conditions of capitalization, are accounted into current income account. Non-monetary items in foreign currencies and on historical cost are translated at the rate of the trade day. Non-monetary items in foreign currencies and on fair value are translated at the rate of the day when the fair value is recognized, where the differences are accounted as gain/loss from change of fair value.
2. Translation of foreign currency financial statements
Asset and liability items in the balance sheet are translated at the rate of the balance sheet day; Owners’ equity, other than “retained profit”, are translated at the rate when occurred; income and expense items in the income statement are translated at the rate of the trade date. Differences raised from aforesaid translations are presented individually under the owners’ equity in the balance sheet. Items in the cash flow statement are translated at the rate when the particular item was occurred. Influence of the changing of exchange rate are presented in the cash flow statement individually.
(IX) Financial instruments
1. Type of finance asset and finance debt
Finance assets are divided initially into four types of financial asset appointed to be measured at fair value with their changes are accounted into current gain/loss accounts(including transactional finance asset and financial asset appointed to be measured at fair value with their changes are accounted into current gain/loss accounts), transactional financial assets, debt and account receivable, finance asset saleable.
Finance debts are divided initially into two types of financial debt appointed to be measured at fair value with their changes are accounted into current gain/loss accounts(including transactional finance debt and financial debt appointed to be measured at fair value with their changes are accounted into current gain/loss accounts), other finance debt.
2. Basis of recognition and accounting of finance asset and finance debt
When the Company is one part of the finance instrument contract, one finance asset or debt is recognized. When on recognizing initially finance asset or debt, it is measured by fair value, for the
30finance asset or debt which appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, the related transaction expenses are directly accounted into current gain and loss; for other finance asset and debt, the related transaction expenses accounted into the initial recognition account.
The Company future measures finance asset by fair value without deducting future possible transaction fee but with exception: (1) Due investment, debt and account receivable are measured by actual interest rate according to the amortized costs. (2) Equity instrument investment which have no quote in active market and which fair value can’t be measured reliably, and its derived finance assets which are connected with the equity instrument and which are summarized through the equity instrument, are measured by cost.
The Company conduct successive measure of finance debt according to amortized cost by actual interest rate with exception as following: (1) finance debt which appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, is measured at fir value without deducting possible future transactional fee at settlement; (2) Equity instrument investment which have no quote in active market and which fair value can’t be measured reliably, and its derived finance assets which are connected with the equity instrument and which are closed off through the equity instrument, are measured by cost. (3) finance debt sponship contracts which are not appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, or debt agreements at rate lower than market rate and which are not appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, are measured at the higher value between the optimal estimated value payable according to current obligations and the surplus value from which the initial recognition value deduct the accumulated amortized amount according to the actual interest rate.
Gain or loss from fluctuation of financial assets or liabilities are handled at the following ways, except for relating to hedge instrument. (1) Gain or loss from fluctuation of fair value of financial assets or liabilities and accounted into current gain/loss account, are accounted into gain/loss of fluctuation of fair value. Interests or cash dividend received in the period of holding these assets are recognized as investment gains. When they are disposed, the difference between the amount actually received and initially booked value is recognized as investment gains, and adjust the gain/loss from fair value fluctuation. (2) Fluctuation of fair value of sellable financial assets accounted into capital reserves; interests gained at actual interest rate are accounting into investment gains; the cash dividend received from sellable instrument investment, are accounted into investment gains when distributed; At disposal of these investment, the difference between actual amount received and book value are recognized as investment gains after deducting of accumulated change of fair value which are originally accounted into capital reserves.
As soon as the contract rights of acquiring the cash flow of particular financial asset have been terminated or almost all of the risks and rewards attached to the financial asset have been transferred, recognition of the financial asset is terminated; as soon as the current liabilities attached to the financial liability have been completely or partially relieved, recognition of the financial liability or part of is terminated.
3. Basis of recognition and accounting of financial asset transferring
The Company stop recognizing the finance asset which risks and remuneration of ownership are transferred to the receiver; and continue to recognize the transferred finance asset which risks and remuneration of ownership are kept, and recognize the value as one finance debt. For the finance assets which risks and remuneration of ownership are not transferred or kept, the Company recognize them as following: (1) stop recognizing the finance asset which are given up the control; (2) continue to recognize the finance asset and related finance debt according to the extend which involved into the transferred finance asset for the finance asset which are not given up control.
The Company measured the surplus between the following two values for the transferred finance assets which fulfill the stop recognition requirements into current gain or loss: (1) Account value of the transferred finance asset; (2) Consideration plus the accumulated fair value changes which were accounted directed into ownership rights. For the transferred finance assets which partly fulfill the stop recognition requirements the Company amortized the stopped recognition part and the not-stopped recognition part of the account value of the whole transferred finance asset, and account the surplus between the following two values into current gain or loss: (1) Account value of the stopped recognition
31part; (2) consideration plus the corresponding stopped recognition part of the accumulated fair value changes which were accounted directed into ownership rights.
4. Basis of recognition and accounting of fair value for the main finance asset and finance debt
For the finance asset or debt which active market exists, the Company recognize the fair value according to the quote on the active market; for the finance asset or debt which active market not exists, the Company recognized the fair value using estimation technology (including reference of the latest market prices from freewill transactions by persons familiar with conditions, reference of the current fair value of other similar finance instrument in characteristics, discounted cash flow models and Option Pricing Model); for the initially acquired or initial finance asset or finance debt, the Company recognize the fair value basis on the market trading price.
5. Impairment test and impairment reserves plan
The Company conduct impairment test to the finance asset other than which appointed to be measured at fair value with their changes are accounted into current gain/loss accounts on balance sheet day.
The Company conduct independently impairment test for single finance asset with large value for single finance asset with little value the Company conduct the impairment test with those of the finance asset composition which have similar credit risk characteristics; for the non impairment assets which are tested independently, the Company conduct the impairment test with those of the finance asset composition which have similar credit risk characteristics.
For the finance asset accounted by amortized cost which have subject impairment evidence at the end term, the impairment loss was recognized according to the difference between the account value and the anticipating future cash flow, for the finance asset which have little difference between its short term account receivable anticipating future cash flow and its current value, the Company don’t discount the future cash flow when recognizing related impairment loss. When there is impairment loss for the Equity instrument investment which have no quote in active market and which fair value can’t be measured reliably and its derived finance assets which are connected with the equity instrument and which are calculated through the equity instrument, are measured by cost, the difference is recognized as impairment loss between the account value of the equity instrument investment and its derived finance asset and the current value discounted by the future cash flow according to the market profit rate of the similar finance asset. The Company recognize the impairment loss for the saleable finance asset which fair value have sharp decreasing and the anticipating decreasing trend is not temporary, and account it into impairment loss together with the accumulated fair vale loss which was accounted into owner’s equity directly.
(X) Receivable accounts
1. Recognition and providing of bad debt provision on individual receivable account with large amount
Condition of recognition
Accounts count for over 10% of the book balance of receivable accounts or other receivable accounts
Basis of bad debt provision
Impairment test performed individually, bad debt provision will be provided at the difference of expected cash flow lower than the book value; If no impairment found in individual testing, bade debt provision will be provided along with the group of similar risks. For details please see the recognition and providing methods of receivable account with minor amount and not under individual impairment test.
2. Recognition and providing methods of receivable account with minor amount and under individual impairment test
Condition of recognition
Account with minor individual amount and aged over three years
Basis of bad debt provision
Impairment test performed individually, bad debt provision will be provided at the difference of expected cash flow lower than the book value; If no impairment found in individual testing, bade debt provision will be provided along with the group of similar risks. For details please see the recognition and providing methods of receivable account with minor amount and not under individual impairment 32test.
3. Recognition and providing basis of bad debt reserves for group of receivable accounts with similar characteristics of credit risks
(1) Age analysis
Age
Provision rate for receivables (%)
Rate for other receivables (%)
Within 1 yr, (included, same for the followings)
5
5
1-2 years
20
20
2-3 years
40
40
Over 3 years
60
60
Remarks for bad debt provisions
Grouped by age characteristics, and bad debt provision rate of the group decided with consideration of practical rate of loss
(2) Other methods of provision and statement
For those receivables and other receivables with obvious differences in recovering possibility, bad debt provisions are recognized individually.
As for other receivable accounts such as notes, prepayments, interests, and long-term receivables, bad debt provisions will be provided upon the differences of expectable cash flow lower than the booked value.
No bad debt provision is provided for receivables and other receivables occurred between the companies within the consolidated financial statements.
(XI) Inventories
1. Categorizing of inventories
Inventories include saleable finished goods or merchandise, product-in-process , consumption material and goods in manufacturing procedure or working procedure.
2. Pricing of delivering inventory
Delivered out materials are accounted by weighted average method, issued out finished products are accounted at individual price.
3. Recognition of inventory realizable value and providing of impairment provision
At the balance sheet day, inventories are measured at the lower of costs and cashable net values, the individual difference between the cashable net value and cost are provided as inventory impairment provision. For finished product, merchandise, saleable material and other saleable merchandise inventory, their cashable net values are recognized by their estimated sale price in normal operation deducting estimated sale expenses and related taxes; for material inventory which need processing, it cashable net value are recognized by the estimated sale prices of its finished products in normal operation deducting the estimated cost, sale expenses and related taxes due to the end of processing; At the balance sheet day, for inventory item which part has contract price and part has no contract price, the cashable net value is accounted separately, and recognize the inventory impairment provision or returnable cash..
4. Inventory system
Inventory is inventoried by perpetual inventory system
5. Amortizing of low-value consumables and packaging materials
Consumables are amortized on one-off basis. Packing materials for manufacturing are accounted directly into manufacturing cost.
(XII) Long-term equity investment
1. Recognition of initial investment costs 33(1) For the long-term equity investment formed by corporate merger under common control, if it is the long-term equity investment obtained from the corporate merger by paying cash, transferring non-cash asset, bear liability and issuing equity securities, the share of book value of owner's equity of the merged party on the merger date shall be taken as the initial investment cost. The asset reserve is adjusted according to the difference between the initial investment cost of long-term equity investment and the book value of paid combined consideration or issued securities; if the capital is not enough for deduction, the remain earnings are adjusted.
(2) For the long-term equity investments formed by merger of enterprises under different control, the initial investment cost is recognized by the paid fair value of combined consideration on purchasing day and related expenses.
(3) For the long-term equity investments formed by other than merger of enterprises: if it is gotten by paying cash, the initial investment cost is recognized by purchasing price when buy; if it is gotten by issuing equity securities, the initial investment cost is recognized by the fair value of the securities; if it is gotten by investor’s investment, the initial investment cost is recognized by investment contract or agreed value in contract (except the not fair contract value).
2. Subsequent measurement and recognition of gain/loss
Cost basis is adopted in accounting of those long-term equity investments by which the Company has substantial control, and is adjusted in composing combined finance report according to equity basis; and those has no common control or major influence without quotation in an active market and the fair value cannot be reliably measured is also recalculated by cost basis. And equity basis is adopted in accounting of those long-term equity investments by which the Company has joint control or major influence on the invested enterprise.
3. Basis of recognizing common control and significant influence
According to the contract, if the invested enterprise’s main finance and operation policy need to be agreed by the other investing party, the investment is common control investment; if only have participating decision rights in invested enterprise’s main finance and operation policy but have no own control or common control with other investing part, the investment is investment with major influence.
4. Impairment examination and providing of impairment provision
At balance sheet day, for the long term equity investment which recalculated on cost basis and has no quotation in an active market and the fair value cannot be reliably measured, if has subject evidence of impairment, long-term investment impairment provision will be provided according to the difference between discounted cash flow of similar market investment and its fair value; for other investment has value deducting phenomenon, provide the long term investment impairment provision according to the Note II. in this finance report.
(XIII) Fixed assets
1. Recognition conditions
Fixed assets also have following conditions: (1) Economic benefit flow into enterprise very possibly; (2) cost can be measured reliably. The successive expensed related fixed assets are accounted into fixed assets cost if it is in accordance with above conditions; if not, accounted into current term gain or loss when happens. Initial accounting is on cost basis.
2. Depreciation of fixed assets
Depreciation of fixed assets is on age average basis. Depreciation age, estimated net residue rate and annual rates are as the followings
Category of fixed assets
Useful age (yrs)
Expected retain value
Annual depreciation
ratio (%)
Houses & buildings
20-30
4% of original value
3.2-4.8
Equipment & machinery
8-15
4% of original value
6.4-12
Office equipment
5
4% of original value
19.2
3. Impairment examination and providing of impairment provision
At balance sheet day, when evidence showing that impairment has occurred to fixed asset, impairment
34provision shall be provided as described in Note II. of this report.
(XIV) Construction in process
1. Construction in process is recognized on the basis of characteristics: very possible economic benefit flow in, cost can be measured reliably. Since the date when the construction in process reaches its useful status as expected, the construction in process is measured by the happened cost Since the date when the construction in process reaches its useful status as expected.
2. When the construction in process reaches its useful status as expected, it is transferred into fixed asset at actual cost. If the construction in process has reached useful status but with completion of project settlement process, it is transferred to fixed asset at the value estimated, and adjustment will happen after completion of project settlement process but no adjustment on depreciation provided previously.
3. At the balance sheet day, if there is evidence of impairment occurred to the construction in process, impairment provision shall be provided as described in Note II. of this report.
(XV) Loan expenses
1. Capitalizing of loan expenses
Loan expenses occurred in the Company, which can be categorized to purchasing or construction of assets satisfying the conditions of capitalization, shall be capitalized and accounted into capital costs; while other loan expenses are recognized as expenses and recorded into current income account.
2. Capitalization period of loan expenses
(1) Capitalization started as soon as all of these conditions are satisfied: 1) Capital expenditures have occurred; 2) Loan expenses have occurred; 3) Necessary purchasing or construction processes have been started to make the asset usable or sellable.
(2) If irregular interruption occurred in the purchasing or construction process of the assets satisfying the capitalizing conditions, and suspended for over successive three months, capitalizing of loan expenses is suspended; loan expenses occurred during the suspension period are recognized as current expenses until the purchasing or construction process resumes.
(3) Capitalizing of loan expenses is terminated as soon as the asset satisfying the capitalizing conditions reaches the state of usable or sellable as expected.
3. Amount of loan expense capitalization
Special loans raised for purchasing or construction of assets satisfying the conditions of capitalization, interest to be capitalized will be the actual interest expenses occurred in the current period of loan (including the discount, premium, or amortizing decided on actual interest rate basis), less the interest income from the unused loans in bank account or provisional investment gains; common loans used for purchasing or construction of assets satisfying the conditions of capitalization, the interest to be capitalized will be the weighted average of balance over special loans multiply capitalization rate of common loans.
(XVI) Intangible assets
1. Intangible assets are including franchiseeship, land using rights, patents, and non-patent technologies, which are measured initially on cost basis.
2. For intangible assets with limited useful life, during the use life it is amortized according to the anticipating implementation method of the economic benefit of the intangible asset systematically and reasonably. If can’t recognize the anticipating implementation method, the straight basis is deployed.
Items
Amortizing years
Land using right
50
Operation rights of waste heat power plant
on actual operation term 353. At the balance sheet day, to check the future economic benefit capacity to the Company of the intangible assets, asset impairment provision is provided according to Note II
4. 4. Expenditures of internal researching projects are accounted into current term gain and loss when happens. The development period expenditures are recognized as intangible assets when fulfill following conditions: (1) The intangible asset is completed and technically possible to be used or sold; (2) With intention to complete the intangible asset for purpose of use or sale; (3) Evidence showing that there are markets or the products produced with using of the intangible asset, or markets of the intangible asset itself, by which the intangible asset may produce financial benefits. Intangible assets used inside the Company must be approved for their usable characters. (4) Developing of the intangible assets are supported by sufficient technical, financial, and other resources, and the intangible assets can be used or sold. (5) Expenditures occurred in developing of the intangible asset may be reliably measured.
(XVII) Long-term amortizable expenses
Long-term amortizable expenses are recorded at actual amount occurred, and straight amortized to stipulated periods. In case a long-term expense was not benefiting the succeeding periods, then the balance of the account shall be transferred over to current income account.
(XVIII) Expected liabilities
1. Liabilities caused by contingent issues such as providing of guarantee, lawsuit, quality warranty, and loss contract are regarded as current liabilities of the Company. Executing of these liabilities may cause benefit outflow. These are recognized as expectable liabilities when they can be measured reliably.
2. The best prediction is used in initial measurement when the relative liability is excercised, and revised at balance sheet day.
(XIX) Turnover
1. Sales of goods
Sales income is recognized when all of these conditions are satisfied: Major risks and rewards attached to the goods have been transferred to the purchaser; The Company holds neither successive management power which is normally attached to ownership, nor effective control, over the goods which have been sold out; Amount of income may be reliably measured; when the costs, occurred or will occur, may be measured reliably.
2. Providing of labor service
At balance sheet day, those service trades (simultaneously satisfying the requirements of those: income can be measured reliably, related economic benefit will flow in very possibly, transaction procedure can be confirmed reliably, happened and happening cost can be measured reliably) which can be reliably estimated are recognized at the percentage of completion, and progress of completion of service is decided by the portion of costs occurred over the estimated total costs. At balance sheet day, those service trades which can not be reliably estimated, if the happened services cost will be compensated, the services income are recognized according to happened service cost and transited to service cost according to same amount; if the happened services cost will not be compensated, the happened services cost are accounted into current term’s gain or loss and the services income will not be recognized.
3. Demising of asset using rights
Income from giving of assets is recognized when satisfying requirements: related economic benefit flows in very possibly, income can be measured reliably. Amount of interest income is calculated according to the time and actual interest rate of the monetary capital is used by other party. Income of using fee is calculated upon the charge period and calculation provided by the related contract or agreement.
(XX) Government subsidy
1. Government subsidies are divided into asset-related subsidies and income-related subsidies.
2. Monetary government subsidies are measured on actual amount or receivable amount; non-monetary 36subsidies are measured at fair value; when no fair value is available, measured at named amount.
3. Asset-related government subsidies are recognized as differed income, amortized straight to its useful life and recorded into current income account. Those income-related government subsidies used to makeup expenses or losses in succeeding periods are recognized as differed income and recorded in current income account at the related expenses is recognized; those used to makeup expenses or losses already occurred are recorded into current income account instantly.
(XXI) Differed income tax assets/ differed income tax liabilities
1. Differed income tax liabilities or assets are recognized at proper rate in the term of retrieving the assets or paying the liabilities according to difference (for not recognized assets and liabilities which tax basis can be recognized, the difference is between the tax basis and the book value) between book value of the assets or liabilities and the tax basis.
2. Differed income tax assets are recognized limitedly by the income tax which very possibly deduct deductible temporary difference. At balance sheet day, the not-yet recognized differed income tax assets in previous fiscal term are recognized if have evidence to prove there is enough income tax very possibly to deduct deductible temporary difference.
3. At the balance sheet day, verification will be performed on the book value of differed income tax assets. If it is not possible to obtain enough taxable income to neutralize the benefit of differed income tax assets, then the book value of the differed income tax assets shall be reduced. Whenever obtaining of taxable income became possible, the reduced amount shall be restored.
4. Current income tax and differed income tax are accounted into current gain/loss account as income tax expenditures or gains, but exclude the following income taxes: (1) Merger of enterprises; (2) Transactions or events recognized directly in owners’ equity.
(XXII) Asset impairment
1. 1. At the balance sheet day, assets (except inventory, equity investment without quote at active market and which fair value can’t be reliably measured, investing property deployed fair value measurement, consuming biology asset, ) are evaluated to show if there is depreciation clue .If there is clue to show asset depreciation, estimate its returnable amount by individual asset; if it’s hard to estimate the individual asset, estimate it on the basis of its asset composition or composition group. For goodwill and intangible asset without certain useful life, impairment test is performed each year whether or not there is clue of impairment.
2. The returnable amount is the higher value of net value of individual asset, asset composition, asset composition group’s fair value deduct dealing expenditures and anticipating future cash flow net value of the individual asset, asset composition, asset composition group.
3. If the individual asset’s recoverable amount is lower than its book value, asset impairment provision is conducted according to the deference between the individual asset book value and recoverable amount. If the recoverable value of the asset composition or the asset composition group is lower than its book value, when recognizing the depreciation loss, the depreciation loss amount firstly compensate the amortized book value of goodwill of the asset composition or asset composition group, secondly proportionally compensate the other assets’ book value according to the proportion of other asset other than goodwill; the above book value compensations are recognized as separate individual asset’s impairment loss and separate asset impairment provisions are provided.
4. Once impairment losses are confirmed upon the above assets, they won’t be restored in successive accounting periods.
III. Taxations
(I) VAT
Paid at 17%.
City maintenance and construction tax
The Company, Zhejiang Huayuan Steam Turbine Mechanism Co., Ltd, Hangzhou Guonenng Steam 37Turbine Co’,Ltd are foreign investment enterprises which are free of city maintenance tax. The other subsidiaries are subject to pay city maintenance tax with amount of 7% turnover tax.
(III) Education surtax
The Company, Zhejiang Huayuan Steam Turbine Mechanism Co., Ltd, Hangzhou Guonenng Steam Turbine Co’,Ltd are foreign investment enterprises which are free of education surtax. The other subsidiaries are subject to education surtax at 3% of turnover tax.
(IV) Local education surcharges
Paid at 2% of turnover tax payable.
(V) Corporation income tax
1. According to the document 浙科发高[2008]314 titled “Notification of Awarding the Second Lot of High-Tech Enterprises of Year 2008” issued jointly by Zhejiang Bureau of Science and Technology, Zhejiang Bureau of Finance, Zhejiang National Tax Bureau, and Zhenjiang Local Tax Bureau, the Company was certified the High-Tech Enterprise of 2008, therefore enjoys 15% of income tax rate from 2008 to 2010.
2. According to the document 浙科发高[2008]250 titled “Notification of Awarding the First Lot of High-Tech Enterprises of Year 2008” issued jointly by Zhejiang Bureau of Science and Technology, Zhejiang Bureau of Finance, Zhejiang National Tax Bureau, and Zhenjiang Local Tax Bureau, the Company was certified the High-Tech Enterprise of 2008, therefore enjoys 15% of income tax rate from 2008 to 2010.
3. According to “Approval to Hangzhou Guoneng Steam Turbine Engineering Co., Ltd. for remitting of taxes at fixed period” (余国税外〔2008〕290号) issued by Zhejiang Hangzhou National Tax Bureau, Hangzhou Guoneng Steam Turbine Engineering Co., Ltd. is enjoying preferable taxation policies at fixed period, namely, 2007 was the year the company started to make profit, it was free of tax for 2007-2008, and 12.5% of tax rate for 2009-2011.
4. According to “Notification of certifying Zhejiang Huayuan Steam Turbine Machinery Co., Ltd. and other three foreign invested manufacturers to enjoy tax remitting policies at fixed period” (德国税法[2007]19号) issued by Zhejiang Deqing County National Tax Bureau, Zhejiang Huayuan Steam Turbine Machinery Co., Ltd. was qualified to enjoy income tax remitting policies at fixed periods, namely, 2007 was the year the company started to make profit, it was free of tax for 2007-2008, and 12.5% of tax rate for 2009-2011.
5. Other subsidiaries are subject to 25% of corporation income tax.
IV. Enterprise consolidation and consolidated financial statements
(I) Profiles of subsidiaries
1. Subsidiaries acquired through incorporation or investment
Subsidiary
(Full name)
Ownership of the subsidiary
Reg. Add.
Business
Property
Registered capital
Business Scope
Zhejiang Steam Trubine Packaged Technologies Development Co., Ltd. (the Packaged Tech Co.)
Controlled subsidiaries
Hangzhou Zhejiang
Manufacturing
30 mil
Development of electrical & mechanical equipment cotrol unit and technical consulting service
Hangzhou Zhongneng Steam Turbine Power Co., Ltd. (Zhongneng Co.)
Controlled subsidiaries
Hangzhou Zhejiang
Manufacturing
92.5 mil
Designing and manufacturing of steam turbines and supplementary equipment and parts; sales of the Company’s products; contracting and consulting of mid-small size power plants
Hangzhou Steam Turbine Casting Co.,
Controlled subsidiaries
Hangzhou Zhejiang
Manufacturing
22 mil
Manufacturing of cast iron and steel products; installation and maintenance
38Ltd. (Casting Co.)
of casting equipments; sales of the Company’s products
Hangzhou Steam Turbine Auxiliary Machinery Co., Ltd. (Auxiliary Machinery Co.)
Controlled subsidiaries
Hangzhou Zhejiang
Manufacturing
40 mil
Manufacturing of auxiliary equipment of steam turbine
Hangzhou Steam Turbine Machinery Equipment Co., Ltd. (Machinery Equipment Co.)
Controlled subsidiaries
Hangzhou Zhejiang
Manufacturing
30 mil
Manufacturing and processing of steam turbine auxiliary parts and other machinery auxiliary parts
Zhejiang Huayuan Steam Turbine Machinery Co., Ltd. (Huayuan Co.)
Holding subsidiary of the Machinery Co.
Huzhou Zhejiang
Manufacturing
21 mil
Manufacturing and processing of steam turbine parts
Hangzhou Guoneng Steam Turbine Engineering Co., Ltd. (Guoneng Co.)
Holding subsidiary of the Auxiliary Machine Co.
Hangzhou Zhejiang
Manufacturing
80 mil
Steam turbine periphery; service: design, installation, consultation, technology service of steam turbine system and related equipments.
Hangzhou Steam Turbine Group Equipment System Engineering Co., Ltd. (Group System Co.)
Holding subsidiary of Zhongneng Co.
Hangzhou Zhejiang
Manufacturing
20 mil
Steam turbine and auxiliary equipment designing and installation, equipment system engineering
Hangzhou Pangtong Electronic Equipment Co., Ltd. (Pangtong Co.)
Holding subsidiary of Zhongneng Co.
Hangzhou Zhejiang
Manufacturing
1 mil
Designing of cooling and depressurizing equipment and accessories; manufacturing (assembling only): cooling and depressurizing equipment; wholesale and retailing: cooling and depressurizing equipment and related equipment
Hangzhou Kaineng Forge Co., Ltd. (Kaineng Co.)
Holding subsidiary of Casting Co.
Hangzhou Zhejiang
Manufacturing
2 mil
Forging and casting materials
Hangzhou Tongneng Turbine Machinery Co., Ltd. (Tongneng Co.)
Full-holding subsidiary of Zhongneng Co.
Hangzhou Zhejiang
Manufacturing
3 mil
Manufacturing of single pole steam turbine; technical service, development, and consulting, designing of turbine equipment
Guizhou Zhongcheng Concrete Co., Ltd. (Zhongcheng Co.)
Holding subsidiary of Zhongneng Co.
Dushan Guizhou
Manufacturing
50 mil
chamotte and concrete manufacturing
Zhejiang Turbine Import & Export Co., Ltd. (Turbine Co.)
Fully-owned subsidiary
Hangzhou Zhejiang
Commerce
20 mil
Steam turbine, gass turbine, generator, gear box, boiler, air cooler, condensator, power plant auxiliary equipment, water turbine, air compressor, fan, controlling equipment, spare parts, and materials. Sales and assembling of the above, import and export.
Hangzhou Energy-saving Technologies and Design Institute Ltd.
Controlled subsidiary of the Packaged Tech Ltd. of HSTG
Hangzhou Zhejiang
1 mil
R&D of energy-saving and environment protection technologies, promotion and sales of products, technical consultancy.
(Continue)
Subsidiary
(Full name)
Actual investment at end of term
(RMB0’000)
Balance of other items actually formed net investment in the subsidiaries
Share proportion %
Voting power %
Consolidated?
Zhejiang Steam Turbine Packaged Technology Development Co.,
1,626.02
51.84
51.84
Yes
39Ltd.
Hangzhou Zhongneng Steam Turbine Power Co., Ltd.
560.09
51.60
51.60
Yes
Hangzhou Steam Turbine Casting Co., Ltd.
1,122
51
51
Yes
Hangzhou Steam Turbine Auxiliary Machine Co., Ltd.
1,924.46
76.50
76.50
Yes
Hangzhou Steam Turbine Machinery & Equipment Co., Ltd.
796.80
52
52
Yes
Zhejiang Huayuan Steam Turbine Machinery Co., Ltd.
1,575
75
75
Yes
Hangzhou Guoneng Steam Turbine Engineering Co., Ltd.
3,000
75
75
Yes
Hangzhou Steam Turbine Power Group Packaged Project Engineering Co., Ltd.
800
40
40
Yes
Hangzhou Pangtong Electronic Equipment Co., Ltd.
70
70
70
Yes
Hangzhou Kaineng Forge Co., Ltd.
200
100
100
Yes
Hangzhou Tongneng Turbine Machinery Co., Ltd.
300
100
100
Yes
Guizhou Zhongcheng Concrete Co., Ltd.
3,000
60
60
Yes
Zhejiang Turbine Import & Export Co., Ltd.
2,000
100
100
Yes
Hangzhou Energy-saving Technologies and Design Institute Ltd.
70
70
70
Yes
(Continue)
Subsidiary
(Full name)
Minor shareholders’ equity
Amount for deducting minor shareholder’s equity in the minor shareholder’s equity
Balance of owners’ equity of parent co. less minor shareholders’ share of current loss over the share of minor shareholder’s equity at beginning of term
Zhejiang Steam Turbine Packaged Technology Development Co., Ltd.
27,352,341.44
Hangzhou Zhongneng Steam Turbine Power Co., Ltd.
86,655,247.19
Hangzhou Steam Turbine Casting Co., Ltd.
70,831,822.52
Hangzhou Steam Turbine Auxiliary Machine Co., Ltd.
59,488,991.91
Hangzhou Steam Turbine Machinery & Equipment Co., Ltd.
56,900,586.10
Zhejiang Huayuan Steam Turbine Machinery Co., Ltd.
3,221,819.72
Hangzhou Guoneng Steam Turbine Engineering Co., Ltd.
1,986,918.64
Hangzhou Steam Turbine Power Group Packaged Project Engineering Co., Ltd.
45,140,951.61
Hangzhou Pangtong Electronic Equipment Co., Ltd.
255,231.35
Hangzhou Kaineng Forge Co., Ltd.
0
Hangzhou Tongneng Turbine
0
40Machinery Co., Ltd.
Guizhou Zhongcheng Concrete Co., Ltd.
19,580,423.16
Zhejiang Turbine Import & Export Co., Ltd.
0
Hangzhou Energy-saving Technologies and Design Institute Ltd.
54,564.54
371,468,898.18
2. Subsidiaries in which the parent company is holding half or over of shares, and reasons to be included in the consolidated financial statements
HSTG Equipment & Engineering Co. was incorporated in October 2007 and Zhongneng Co. was holding 40% of its share equity. It’s business practice started in the report term, and Zhongneng Co. is practically controlling the business operation. Therefore it was included in the consolidated financial statements since January 2008.
(II) Change on scope of consolidated financial statements.
1. Subsidiaries newly included in the consolidated financial statements
(1) In January 2010, the Packaged Technologies Co., Ltd. acquired Hangzhou Energy Saving Technologies Institute Ltd. This company was registered with capital of RMB1 million. The Packaged Tech Co. invested RMB700 thousand to take 70% of its equity and hold substantial control power. Thus this company is included in the consolidated financial statements.
(III) Entities newly included and excluded in the consolidated accounts
1. Subsidiaries newly included in the consolidated accounts
Names
Net asset at end of current term
Net profit of current term
(From the date of merger till end of current term)
Hangzhou Energy-saving Technologies and Design Institute Ltd.
181,881.80
-550,258.84
41V. Notes to the Consolidated Financial Statements
(I) Notes to Consolidated Balance Sheet
1. Monetary capital
(1) Details
End of term
Beginning of term
Items
Original currency
Exchange rate
Translated to RMB
Original currency
Exchange rate
Translated to RMB
Cash in stock
RMB
309,771.34
197,212.66
Sub-total
309,771.34
197,212.66
Bank account:
RMB
458,632,077.50
451,704,022.58
USD
797,999.83
6.79091
5,419,141.61
4,037,995.96
6.8282
27,572,244.00
JPY
6,493.00
0.76686
497.92
9,767.00
0.073782
720.63
EURO
10.92
8.27106
90.32
0.31
9.7971
3.04
HKD
8,874.10
0.88048
7,813.47
Sub-total
464,051,807.35
479,284,803.72
Other monetary fund
RMB
4,172,000.00
6,246,525.00
USD
104,136.00
6.8282
711,061.44
Sub-total
4,172,000.00
6,957,586.44
Total
468,533,578.69
486,439,602.82
2. Notes receivable
(1) Details
End of term
Beginning of term
Category
Book balance
Bad debt rovision
Book value
Book balance
Bad debt rovision
Book
Bank acceptance
569,736,165.06
569,736,165.06
585,510,190.21
585,510,190.21
Total
569,736,165.06
569,736,165.06
585,510,190.21
585,510,190.21
423. Account receivable
(1) Details
1) Detailed categories
End of term
Beginning of term
Book balance
Bad debt provision
Book balance
Bad debt provision
Category
Amount
Proportion %
Amount
Proportion %
Amount
Proportion %
Amount
Proportion %
Major single amount
867,361,730.25
45.41
130,455,331.27
15.04
570,247,250.59
35.62
95,609,541.87
16.77
Minor single amount but greater risk after combined in a character group
101,702,372.01
5.32
61,931,700.80
60.90
75,484,953.53
4.71
46,201,249.72
61.21
Other minors
941,064,050.75
49.27
128,332,173.25
13.64
955,435,641.42
59.67
129,923,751.30
13.60
Total
1,910,128,153.01
100.00
320,719,205.32
16.79
1,601,167,845.54
100.00
271,734,542.89
16.97
2) Detailed on ages
End of term
Beginning of term
Book balance
Book balance
Age
Amount
Proportion %
Bad debt provision
Amount
Proportion %
Bad debt provision
within 1 yr
1,124,361,483.24
58.86
56,218,074.16
901,443,591.76
56.30
45,072,179.60
1-2 yrs
400,049,819.58
20.94
80,009,963.92
371,511,261.38
23.20
74,302,252.28
2-3 yrs
239,246,102.34
12.53
95,698,440.93
227,389,810.13
14.20
90,955,924.05
over 3 yrs
146,470,747.85
7.67
88,792,726.31
100,823,182.27
6.30
61,404,186.96
Total
1,910,128,153.01
100.00
320,719,205.32
1,601,167,845.54
100.00
271,734,542.89
(2) Further remarks on bad debt provisions at end of term
1) Bad debt provision provided according to the result of individual impairment testing on major single account or minor single account but tested individually
Description of the receivable accounts
Book balance
Bad debt provision
Rate
Reason
Ningxia Meili Paper Co., Ltd.
1,011,694.00
1,011,694.00
100%
Hard to recover
Jinxi Chemical Machinery Factory
1,264,000.00
1,264,000.00
100%
Hard to recover
43Sub-total
2,275,694.00
2,275,694.00
2) Bad debt provisions provided on individual tested items without impairment and not tested individually
Individual tested items without impairment and not tested individually are included in the group of similar risks, and bad debt provisions are provided along with the group. For details please refer to Note II.
(3) Receivable accounts due from shareholders with 5% of shares or over
End of term
Beginning of term
Name of the companies
Book balance
Bad debt provision
Book balance
Bad debt provision
Hangzhou Steam Turbine Group
876,500.00
148,525.00
944,000.00
182,500.00
Sub-total
876,500.00
148,525.00
944,000.00
182,500.00
(4) Receivable accounts top 5 on amounts
Name of the companies
Relation with the Company
Book balance
Age
Portion in balance of receivable accounts (%)
Shenyang Turbine Machinery Co., Ltd.
Non-related
397,922,667.90
[Note 1]
20.83
Xi’an Shanggu Power Co., Ltd.
Non-related
256,337,062.35
[Note 2]
13.42
Chongqing Zhongjieneng Sanfeng Energy Co., Ltd.
Non-related
213,102,000.00
within 1 year
11.16
Hangzhou Steam Turbine Power Sales Co., Ltd.
Related parties
104,646,943.69
[Note 3]
5.48
Lianyuan Steel Group Co., Ltd.
Non-related
72,509,871.00
within 1 year
3.80
Sub-total
1,044,518,544.94
54.69
[Note 1] Shenyang Turbine Machinery Co., Ltd. has a balance of receivable within 1 year of RMB219,712,413.50, 1-2 years of RMB102,173,102.40, 2-3 years of RMB43,511,270.00, over 3 years of RMB32,525,882.00.
[Note 2] Xi’an Shangu Power Co., Ltd. has a balance of receivable within 1 year of RMB103,729,441.91, 1-2 years of RMB86,090,330.60, 2-3 years of RMB54,274,796.00, and over 3 years of RMB12,242,493.84.
[Note 3] Hangzhou Steam Turbine Power Sales Co., Ltd. has a balance of receivable within 1 year of RMB56,771,974.31, 1-2 years of RMB20,767,910.00, 2-3 years of RMB 24,242,559.38, and over 3 years of RMB2,864,500.00.
(5) Other receivable accounts of related parties
Name of the companies
Relation with the Company
Book balance
Portion in balance of receivable accounts (%)
Hangzhou Steam Turbine Power Group Co., Ltd.
Controlling shareholder
876,500.00
0.05
HSTG Nanfang Sales Co.
Affiliate of the Group
20,000.00
Hangzhou Steam Turbine Power
Affiliate of the Group
104,646,943.69
5.48
44Sales Co., Ltd.
Hangzhou Steam Turbine Power Technologies Co., Ltd.
Affiliate of the Group
8,368,000.00
0.44
Sub-total
113,911,443.69
5.97
4. Prepayment
(1) Age analysis
End of term
Beginning of term
Age
Book balance
Proportion %
Bad debt provision
Book value
Book balance
Proportion %
Bad debt provision
Book value
within 1 yr
310,084,546.30
97.28
310,084,546.30
190,709,889.50
86.76
190,709,889.50
1-2 yrs
8,233,838.76
2.58
8,233,838.76
28,590,064.06
13.01
28,590,064.06
2-3 yrs
309,881.00
0.10
309,881.00
258,681.00
0.12
258,681.00
over 3 yrs
110,885.00
0.04
110,885.00
232,765.00
0.11
232,765.00
Total
318,739,151.06
100.00
318,739,151.06
219,791,399.56
100
219,791,399.56
(2) Top 5 prepayment account in amount
Name of the companies
Relation with the Company
End of term
Age
Reason of unsettled
Mitsubishi
Non-related
51,893,590.17
within 1 year
In schedule as the contract
Ha’erbin Steam Turbine Factory Ltd.
Non-related
14,520,000.00
within 1 year
In schedule as the contract
Zhejiang Southern Boiler Co., Ltd.
Non-related
14,380,000.00
within 1 year
In schedule as the contract
Zhejiang Chuangsheng Construction Engineering Co., Ltd.
Non-related
11,560,000.00
within 1 year
In schedule as the contract
DST Ltd. Germany
Non-related
10,830,822.80
1-2 years
In schedule as the contract
Sub-total
103,184,412.97
(3) Prepayment with large amount and aged over 1 year, and reason for overdue
Name of the companies
End of term
Reason of unsettled
DST Ltd. Germany
10,830,822.80
Goods not arrived yet
Sub-total
10,830,822.80
5. Other account receivable
(1) Details
1) Detailed categories
End of term
Beginning of term
Book balance
Bad debt provision
Book balance
Bad debt provision
Category
Amount
Proportion %
Amount
Proportion %
Amount
Proportion %
Amount
Proportion %
Major single amount
4,010,320.94
11.62
2,406,192.56
60.00
7,010,320.94
31.25
3,006,192.56
42.88
Minor single amount but
1,344,571.28
3.90
806,742.77
60.00
1,217,574.78
5.43
730,544.87
60.00
45greater risk after combined in a character group
Other minors
29,151,106.24
84.48
2,242,625.70
7.69
14,205,589.77
63.32
1,362,992.02
9.59
Total
34,505,998.46
100.00
5,455,561.03
15.81
22,433,485.49
100.00
5,099,729.45
22.73
2) Detailed on ages
End of term
Beginning of term
Book balance
Book balance
Age
Amount
Proportion %
Bad debt provision
Amount
Proportion %
Bad debt provision
within 1 yr
25,661,703.74
74.37
1,283,085.20
10,596,706.24
47.24
529,835.31
1-2 yrs
2,181,102.50
6.32
436,220.50
6,051,983.53
26.98
1,210,396.71
2-3 yrs
1,308,300.00
3.79
523,320.00
556,900.00
2.48
222,760.00
over 3 yrs
5,354,892.22
15.52
3,212,935.33
5,227,895.72
23.30
3,136,737.43
Total
34,505,998.46
100.00
5,455,561.03
22,433,485.49
100.00
5,099,729.45
(2) Further remarks on bad debt provisions at end of term
Bad debt provisions provided on individual tested items without impairment and not tested individually
Individual tested other receivable items without impairment and not tested individually are included in the group of similar risks, and bad debt provisions are provided along with the group. For details please refer to Note II.
(3) No receivable account due from shareholding parties holding over 5% of the Company’s shares.
(4) Top 5 other receivables
Name of the companies
Relation with the Company
Book balance
Age
Percentage in total other receivable %
Property of the account
Customs deposit receivable
Non-related
4,010,320.94
Over 3 years
11.62
Deposit
Guodian Trust Bidding Co., Ltd.
Non-related
2,436,000.00
within 1 year
7.06
Bidding deposit
Beijing Guodian Trust Bidding Agency Co., Ltd.
Non-related
535,000.00
within 1 year
1.55
Bidding deposit
Yunnan Yunchuang Bidding Co., Ltd.
Non-related
660,000.00
within 1 year
1.91
Bidding deposit
Hangzhou National Tax Bureau, Export Tax Refunding Office
Non-related
9,153,846.18
within 1 year
26.53
Tax refunding
Sub-total
16,795,167.12
48.67
(5) No other receivable due from related parties
6. Inventories
(1) Details
Items
End of term
Beginning of term 46Book balance
Impairment
Book value
Book balance
Impairment
Book value
Stock materials
307,346,615.89
307,346,615.89
297,160,684.51
297,160,684.51
Product in process
455,339,194.65
455,339,194.65
434,608,594.31
434,608,594.31
Products in stock
413,623,495.11
1,482,365.58
412,141,129.53
278,813,133.88
1,482,365.58
277,330,768.30
Total
1,176,309,305.65
1,482,365.58
1,174,826,940.07
1,010,582,412.7
1,482,365.58
1,009,100,047.12
(2) Inventory depreciation provision
1) Details
Decreased this term
Items
Beginning of term
Increased this term
Written back
Transferred
End of term
Products in stock
1,482,365.58
1,482,365.58
Sub-total
1,482,365.58
1,482,365.58
7. Long-term share equity investment
(1) Details
Company invested in
Calculating basis
Initial costs
Beginning of term
Changed by
End of term
Zhejiang Tianhang Steam Turbine Auxiliary Machinery Co., Ltd.
Cost basis
10,000,000.00
10,000,000.00
10,000,000.00
Zhejiang Sanxin Automatic Engineering Co., Ltd.
Cost basis
600,000.00
600,000.00
600,000.00
Greenesol Co. (India)
Cost basis
1,032,411.62
1,032,411.62
1,032,411.62
Hangzhou Bank
Cost basis
390,954,040.00
390,954,040.00
390,954,040.00
Total
402,586,451.62
402,586,451.62
402,586,451.62
(Continue)
Company invested in
Share proportion %
Voting power %
Statement on differences between the shareholding and voting rights
Impairment provision
Impairment provision provided this term
Cash dividend of the current term
Zhejiang Tianhang Steam Turbine Auxiliary Machinery Co., Ltd.
33.33
33.33
1,000,000.00
Zhejiang Sanxin Automatic Engineering
6.00
6.00
0
47Co., Ltd.
Greenesol Co. (India)
37.00
37.00
0
Hangzhou Bank
6.92
6.92
0
Hangzhou Steam Turbine Environmental Engineering Co., Ltd.
Note (2)
100,735.77
Total
1,100,735.77
(2) Other statements
Note 1) The Auxiliary Machine Co. – the controlled subsidiary of the Company has invested RMB10,000,000 in Zhejiang Tianhang Steam Turbine Auxiliary Machinery Co., Ltd. and take 33.33% of the share equities. According to the agreement, the Company adopts fixed return in accounting of this long-term equity investment. In case of the revenue of the company is lower than RMB80 million, the return rate after tax will be 10%, ie. RMB1,000,000; in case of the revenue is over RMB80 million, the return rate after tax will be 12%, ie. RMB1,200,000. For the above long-term equity investment adopts agreement rewarding scheme, the Auxiliary Machinery Co. accounts the long-term equity investment on cost basis.
Note 2) Hangzhou Steam Turbine Environment Engineering Co., Ltd. filed for deregistration to Hangzhou Bureau of Commerce Binjiang Office, and was approved on December 12, 2009. The account was the interest settlement received in the report term.
8. Fixed assets
(1) Details
Items
Beginning of term
Increased this term
Decreased this term
End of term
1) Subtotal of original book value
991,664,635.89
23,662,559.66
1,971,839.26
1,013,355,356.29
Houses & buildings
295,678,088.90
5,348,876.42
670,593.55
300,356,371.77
Equipment & machinery
595,983,929.23
14,317,914.80
274,984.56
610,026,859.47
Office equipment
100,002,617.76
3,995,768.44
1,026,261.15
102,972,125.05
2) Subtotal of accumulated depreciation
455,180,259.16
33,959,030.37
727,694.04
488,411,595.49
Houses & buildings
95,842,898.54
4,721,370.89
100,564,269.43
Equipment & machinery
302,997,871.16
23,299,623.75
259,757.19
326,037,737.72
Office equipment
56,339,489.46
5,938,035.73
467,936.85
61,809,588.34
3) Subtotal of net book value
536,484,376.73
23,662,559.66
35,203,175.59
524,943,760.8
Houses & buildings
199,835,190.36
5,348,876.42
5,391,964.44
199,792,102.34
Equipment & machinery
292,986,058.07
14,317,914.80
23,314,851.12
283,989,121.75
Office equipment
43,663,128.30
3,995,768.44
6,496,360.03
41,162,536.71
4) Subtotal of impairment provision
8,169,109.24
8,169,109.24
Houses & buildings
1,504,928.24
1,504,928.24
Equipment & machinery
4,472,304.10
4,472,304.10
Office equipment
2,191,876.90
2,191,876.90
485) Total of book value
528,315,267.49
23,662,559.66
35,203,175.59
516,774,651.56
Houses & buildings
198,330,262.12
5,348,876.42
5,391,964.44
198,287,174.10
Equipment & machinery
288,513,753.97
14,317,914.80
23,314,851.12
279,516,817.65
Office equipment
41,471,251.40
3,995,768.44
6,496,360.03
38,970,659.81
Depreciation of the report term was RMB33,959,030.37; the original value of construction in process transferred to fixed asset was RMB12,147,637.67.
(2) Fixed assets not granted property license
Items
Reason for not granted
Expected date of grant
Houses and buildings of Guoneng Co.
Completion settlement not finished yet
In process
(3) At end of the term, there was RMB35,259,414.38 of fixed assets provided as guarantee.
9. Construction in process
(1) Details
End of term
Beginning of term
Project
Book balance
Impairment provision
Book value
Book balance
Impairment provision
Book value
TK6916 Digital Flat Boring
0
0
7,063,388.53
7,063,388.53
6.3 m vertical lathe
1,424,673.00
1,424,673.00
70,000.00
70,000.00
Toyota business car
653,452.00
653,452.00
0
0
D260 digital boring
27,815,984.22
27,815,984.22
261,000.00
261,000.00
Renewing of D1000/L3000 digital lathe
0
0
606,583.86
606,583.86
Gas turbine cylinder equipment of general assembling
1,098,324.28
1,098,324.28
716,828.77
716,828.77
27m assembling platform of general assembling
366,598.00
366,598.00
365,336.00
365,336.00
Upgrading of painting lift
1,591,864.88
1,591,864.88
796,977.01
796,977.01
Environment project of temporary yard
868,642.60
868,642.60
464,928.34
464,928.34
Casting workshop and equipment
108,984,107.05
108,984,107.05
116,367,550.30
116,367,550.30
Guoneng Co. New Factory Construction
0
0
0
0
Construction of Zhongcheng Co.
32,192,509.55
32,192,509.55
3,117,651.39
3,117,651.39
Zhongneng Headquarter
294,332.00
294,332.00
0
0
Other small projects
5,767,874.99
5,767,874.99
4,162,856.45
4,162,856.45
Total
181,058,362.57
181,058,362.57
133,993,100.65
133,993,100.65
(2) Changes and alternations
1) Details
Project
Budget amount RMB0’000
Beginning of term
Increased this term
Transferred into fixed assets
Other decreases
Investment on budget (%)
TK6916 Digital Flat Boring
700
7,063,388.53
7,063,388.53
0
101
496.3 m vertical lathe
70,000.00
1,354,673.00
0
0
Toyota business car
66
0
653,452.00
0
0
99
D260 digital boring
3,500
261,000.00
27,554,984.22
0
0
79.47
Renewing of D1000/L3000 digital lathe
65
606,583.86
0
606,583.86
0
93
Gas turbine cylinder equipment of general assembling
120
716,828.77
381,495.51
0
0
91.53
27m assembling platform of general assembling
66
365,336.00
1,262.00
0
0
55.55
Upgrading of painting lift
120
796,977.01
794,887.87
0
0
132.66
Environment project of temporary yard
464,928.34
403,714.26
0
0
Casting workshop and equipment
13,120
116,367,550.30
0
0
7,383,443.25
83.07
Guoneng Co. New Factory Construction
0
1,554,848.49
0
1,554,848.49
Construction of Zhongcheng Co.
7,500
3,117,651.39
29,074,858.16
0
0
42.92
Zhongneng Headquarter
0
294,332.00
0
0
Other small projects
4,162,856.45
6,082,683.82
4,477,665.28
0
Total
133,993,100.65
68,151,191.33
12,147,637.67
8,938,291.74
(Continue)
Project
Progress
Accumulate of interest capitalized
Interest capitalized this term
Interest capitalized rate of this term %
Fund recourse
End of term
TK6916 Digital Flat Boring
Completed
Independent
0
6.3 m vertical lathe
under construction
Independent
1,424,673.00
Toyota business car
under construction
Independent
653,452.00
D260 digital boring
under construction
Independent
27,815,984.22
Renewing of D1000/L3000 digital lathe
Completed
Independent
0
Gas turbine cylinder equipment of general assembling
under construction
Independent
1,098,324.28
27m assembling platform of general assembling
under construction
Independent
366,598.00
Upgrading of painting lift
under construction
Independent
1,591,864.88
Environment project of temporary yard
under construction
Independent
868,642.60
Casting workshop and equipment
under construction
2,794,617.50
0
0
Independent
108,984,107.05
Guoneng Co. New Factory Construction
Completed
Independent
0
Construction of Zhongcheng Co.
under construction
Independent
32,192,509.55
Zhongneng Headquarter
under construction
Independent
294,332.00
Other small projects
under construction
Independent
5,767,874.99
Total
181,058,362.57
5010. Intangible assets
(1) Details
Items
Beginning of term
Increased this term
Decreased this term
End of term
1) Subtotal of original book value
155,609,548.25
22,661,314.62
0
178,270,862.87
Land using right
85,609,548.25
22,581,314.62
0
108,190,862.87
Operation rights of waste heat power plant
70,000,000.00
0
0
70,000,000.00
Product patent
80,000.00
0
80,000.00
2) Subtotal of accumulated amortizing
14,164,831.99
3,967,848.65
0
18,132,680.64
Land using right
12,736,261.99
1,586,898.65
0
14,323,160.64
Operation rights of waste heat power plant
1,428,570.00
2,380,950.00
0
3,809,520.00
3) Subtotal of net book value
141,444,716.26
22,661,314.62
3,967,848.65
160,138,182.23
Land using right
72,873,286.26
22,581,314.62
1,586,898.65
93,867,702.23
Operation rights of waste heat power plant
68,571,430.00
0
2,380,950.00
66,190,480.00
Product patent
0
80,000.00
0
80,000.00
4) Subtotal of impairment provision
Land using right
Operation rights of waste heat power plant
5) Total of book value
141,444,716.26
22,661,314.62
3,967,848.65
160,138,182.23
Land using right
72,873,286.26
22,581,314.62
1,586,898.65
93,867,702.23
Operation rights of waste heat power plant
68,571,430.00
0
2,380,950.00
66,190,480.00
Product patent
80,000.00
80,000.00
RMB3,967,848.65 amortized this term.
(2) Particulars about the property not granted license
Items
Reason for not granted
Expected date of grant
Land using rights of Huayuan Co.
Under normal procedures
In process
11. Long-term amortizable expenses
Items
Beginning of term
Increased this term
Amortized this term
Other decreases
End of term
Decoration fee
8,092,318.74
1,853,703.27
229,993.08
9,716,028.93
Total
8,092,318.74
1,853,703.27
229,993.08
9,716,028.93
12. Differed income tax assets/ differed income tax liabilities
(1) Details
Items
End of term
Beginning of term
Differed income tax asset
Bad debt provision
42,653,028.70
42,653,028.70
Inventory impairment provision
222,354.84
222,354.84
Fixed asset impairment provision
1,225,366.39
1,225,366.39
Unrealised profit in consolidated accounts
8,346,759.66
4,261,359.81
Tax remitting for home-made equipment
0
Other deductible provisional difference
261,705.60
261,705.60
Total
52,709,215.19
48,623,815.34
Differed income tax liability
Temporary differences of other tax payables
1,225,366.39
1,225,366.39
Total
1,225,366.39
1,225,366.39 51(2) Provisional differences correspondent to the asset or liability items
Items
Amount of temporary differences
Deductible provisional differences
Bad debt provision
276,834,272.34
Inventory impairment provision
1,482,365.58
Fixed asset impairment provision
8,169,109.24
Unrealised profit in consolidated accounts
46,225,017.48
Other deductible provisional difference
1,512,592.01
Sub-total
334,223,356.65
Taxable provisional difference
Temporary differences of other tax payables
8,169,109.24
Sub-total
8,169,109.24
13. Short-term loans
Details
Items
End of term
Beginning of term
Guarantee loan
180,000,000.00
100,000,000.00
Pledged loan
15,000,000.00
31,000,000.00
Loan by pledge
5,000,000.00
Total
195,000,000.00
136,000,000.00
14. Notes payable
Category
End of term
Beginning of term
Bank acceptance
70,004,809.92
103,656,815.22
Total
70,004,809.92
103,656,815.22
15. Account payable
(1) Details
Items
End of term
Beginning of term
Trade
522,638,029.77
288,160,209.73
Payment for equipment and projects
13,632,408.00
32,605,951.75
Total
536,270,437.77
320,766,161.48
(2) Account payable to shareholders with 5% or over of the Company’s voting shares and other related parties
Name of the companies
End of term
Beginning of term
Hangzhou Steam Turbine Group
448,149.55
333,711.37
Hangzhou Steam Turbine Automobile Sales Service Co., Ltd.
2,571,696.17
590,390.33
Hangzhou Steam Turbine Industrial Co.
289,554.51
122,763.43
Hangzhou Hangfa Power Generating Equipment Co., Ltd.
8,453,150.20
2,339,600.00
Hangzhou Steam Turbine Wooden Packaging Co., Ltd.
176,457.00
71,040.00
Hangzhou Nanfangtongda Gears Co., Ltd.
1,934,025.00
66,000.00
Sub-total
13,873,032.43
3,523,505.13
(3) No large amount payable account aged over one year
16. Prepayment received
(1) Details
Items
End of term
Beginning of term
Trade
1,387,427,722.19
1,233,884,154.03
Total
1,387,427,722.19
1,233,884,154.03 52(2) Account received in advance from shareholders with 5% or over of the Company’s voting shares and other related parties
Name of the companies
End of term
Beginning of term
Hangzhou Steam Turbine Power Sales Co., Ltd.
26,534,823.54
36,763,556.54
Hangzhou Steam Turbine Power Technologies Co., Ltd.
3,762,400.00
Sub-total
30,297,223.54
36,763,556.54
(3) No large amount account received in advance aged over one year.
17. Employees’ wage payable
(1) Details
Items
Beginning of term
Increased this term
Decreased this term
End of term
Wage, bonus, allowance and subsidies
3,502,519.27
160,996,319.02
157,475,446.99
7,023,391.30
Employee welfare
0.00
20,465,931.98
15,211,125.65
5,254,806.33
Social insurance
16,478,500.78
36,166,990.41
35,828,705.28
16,816,785.91
Housing fund
89,638.76
16,771,042.42
16,778,282.30
82,398.88
Trade Union finance
1,025,704.18
3,080,180.85
3,195,328.11
910,556.92
Training expenses
2,144,834.55
3,828,666.77
311,448.97
5,662,052.35
Dismissing policy
0.00
28,002.10
28,502.10
-500.00
Total
23,241,197.54
241,337,133.55
228,828,839.40
35,749,491.69
No invalid delay of payment in the wage payable.
18. Tax payable
Items
End of term
Beginning of term
VAT
29,301,950.81
24,620,872.92
City maintenance and construction tax
477,379.79
255,642.82
Business tax
487,090.11
212,846.48
Enterprise income tax
40,223,690.56
57,851,854.03
Personal income tax
1,851,723.19
3,930,411.71
Property tax
46,607.04
184,227.72
Education surtax
272,169.22
109,561.18
Local education surcharges
1,034,904.88
816,356.62
Stamp tax
28,555.68
93,602.03
water conservancy special fund
2,086,054.11
1,409,198.19
Land using tax
876,605.00
Total
76,686,730.39
89,484,573.70
19. Interest payable
Items
End of term
Beginning of term
Loan interests
0
195,250.00
Total
0
195,250.00
20. Other account payable 53(1) Details
Items
End of term
Beginning of term
Deposit
1,360,000.00
6,147,115.90
Payable to other company
76,906,708.23
17,883,468.09
Others
9,764,902.77
200,788.14
Total
88,031,611.00
24,231,372.13
(2) Account payable to shareholders with 5% or over of the Company’s voting shares and other related parties
Name of the companies
End of term
Beginning of term
Hangzhou Steam Turbine Group
23,465,523.29
10,340,876.00
Hangzhou Steam Turbine Automobile Sales Service Co., Ltd.
3,321,702.81
1,928,039.57
Hangzhou Relian International Trading Co.
50,000,000.00
0
Sub-total
76,787,226.10
12,268,915.57
(3) No large amount other payable aged over 1 year.
(4) Remarks on other payable accounts with large amount
Name of the companies
End of term
Property of the account
Hangzhou Relian International Trading Co.
50,000,000.00
Packaged Tech of the Group borrowed from the Company
Hangzhou Steam Turbine Group
23,465,523.29
Power and land rental
Hangzhou Steam Turbine Automobile Sales Service Co., Ltd.
3,321,702.81
Freight and repairing
Sub-total
76,787,226.10
21. Long-term borrowings
(1) Particulars of long-term borrowings
1) Details
Items
End of term
Beginning of term
Pledged loan
40,000,000.00
40,000,000.00
Guarantee loan
130,000,000.00
117,000,000.00
Credit loan
90,463,800.00
90,463,800.00
Total
260,463,800.00
247,463,800.00
(2) Details of long-term borrowings
Loan provided by
Loans
Start date
Loans
Expired on
Currency
Annual interest rate
(%)
End of term
Beginning of term
China Construction Bank, Zhejiang Branch
2009-3-24
2015-3-23
RMB
Float rates
90,463,800.00
90,463,800.00
China Import & Export Bank, Zhejiang Branch
2009-8-17
2011-2-16
RMB
Float rates
100,000,000.00
100,000,000.00
China Construction Bank, Tangxi Office
2009-6-24
2011-6-23
RMB
Float rates
40,000,000.00
40,000,000.00
54Pudong Development Bank, Yuhang Branch
2009-6-12
2011-6-11
RMB
5.40
17,000,000.00
17,000,000.00
Pudong Development Bank, Yuhang Branch
2010-5-24
2012-5-23
RMB
5.40
13,000,000.00
Sub-total
260,463,800.00
247,463,800.00
22. Long-term payable
Items
End of term
Beginning of term
Drawing in administrative restructuring
330,000.00
330,000.00
Total
330,000.00
330,000.00
23. Other non-recurring liabilities
(1) Details
Items
End of term
Beginning of term
Differed income
8,004,440.00
3,322,740.00
Total
8,004,440.00
3,322,740.00
(2) Balance at end of term increased by 140.90% over the beginning of term, which was caused by receiving of a) Technical reforming subsidy of 2009 from Hangzhou Xiacheng Government of RMB2,580,000.00; b) Award for key equipment of 2009 from Hangzhou Xiacheng Government of RMB1,080,000.00.
5524. Share capital
Changed this term (+,-)
Items
Beginning of term
End of term
Amount
Proportion %
Issuing of new shares
Bonus shares
Transferred from reserves
Others
Sub-total
Amount
Proportion %
1. State-owned shares
2. State legal person shares
236,600,000
63.64
70,980,000
307,580,000
63.64
3. Other domestic shares
In which:
Domestic legal person shares
Domestic natural person shares
4. Foreign shares
In which:
Foreign legal person shares
(I) Shares with condition of restricted to sell
Foreign natural person shares
Total of conditional shares
236,600,000
63.64
70,980,000
307,580,000
63.64
1. RMB common shares
2. Foreign currency shares listed domestic
135,200,000
36.36
40,560,000
175,760,000
36.36
3. Foreign shares listed overseas
4. Others
(II) Unconditional shares
Total of negotiable shares
135,200,000
36.36
40,560,000
175,760,000
36.36
(III) Total of shares
371,800,000
100.00
111,540,000
483,340,000
100.00
5625. Capital reserves
Items
Beginning of term
Increased this term
Decreased this term
End of term
Share capital premium
81,815,220.00
81,815,220.00
Other capital reserves
57,138,030.09
57,138,030.09
Total
138,953,250.09
138,953,250.09
26. Surplus reserves
(1) Details
Items
Beginning of term
Increased this term
Decreased this term
End of term
Statutory surplus reserves
327,932,742.87
327,932,742.87
Total
327,932,742.87
327,932,742.87
(2) Reason and basis of change on surplus reserves.
27. Retained profit
(1)
Details
Items
Amount
Percentage of drawing or allocation
Adjustment on retained profit at end of previous term
1,497,423,473.50
——
Adjustment on the total of retained profit at beginning of term (+ for increase, - for decrease)
——
Retained profit at beginning of term after adjustment
1,497,423,473.50
——
Plus: Net profit attributable to owners of the parent company
255,824,821.46
——
Less: Statutory surplus reserves
0
10%
Dividend payable to common shares (to shareholders)
260,260,000.00
RMB4 (tax included) of cash dividend to each 10 shares, 3 bonus shares (tax included) to each 10 shares
Retained profit at the end of term
1,492,988,294.96
——
(2) Other statements
1) According to the profit distribution plan 2009, upon the total capital shares of 371,800,000 at end of 2009, RMB4 (tax included) was distributed to each 10 shares. Totally RMB148,720,000.00 was distributed. 3 bonus shares (tax included) were distributed to each 10 shares, totally RMB111,540,000.00 was distributed. This plan has been implemented in June 2010.
57(II) Notes to consolidated income statement
1. Turnover / cost
(1) Details
Items
Current term
Same period of last term
Major business turnover
1,830,253,159.97
1,627,937,615.84
Other business income
10,262,391.00
18,590,152.53
Operation cost
1,180,414,236.98
1,012,507,507.68
(2)
Main business turnover / cost (categorized on products)
Current term
Same period of last term
Name of industry
Revenue
Cost
Revenue
Cost
Industrial steam turbine
1,515,923,802.17
947,985,439.00
1,360,087,455.05
831,880,755.22
Casting products
27,998,388.10
22,370,089.03
36,121,030.64
22,721,216.13
Auxiliary machinery
36,510,320.49
35,287,211.12
67,354,751.49
47,648,281.33
Packaged equipment for
57,998,974.36
47,309,044.89
102,756,024.88
64,236,701.30
Others
191,821,674.85
119,802,394.05
61,618,353.78
29,780,294.42
Sub-total
1,830,253,159.97
1,172,754,178.09
1,627,937,615.84
996,267,248.40
(3) Main business turnover / cost (on territories)
Current term
Same period of last term
Name of districts
Revenue
Cost
Revenue
Cost
Domestic
1,589,195,419.48
994,025,770.27
1,492,697,124.71
886,163,390.60
Overseas
241,057,740.49
178,728,407.82
135,240,491.13
110,103,857.80
Sub-total
1,830,253,159.97
1,172,754,178.09
1,627,937,615.84
996,267,248.40
(4) Business turnover from top 5 clients
Name of clients
Turnover
Percentage in total turnover of the Company
Chongqing Zhongjieneng Sanfeng Energy Co., Ltd.
368,752,136.92
20.04
Shenyang Turbine Machinery Co., Ltd.
236,265,034.13
12.83
Xi’an Shanggu Power Co., Ltd.
87,379,487.21
4.75
Hangzhou Steam Turbine Power Sales Co., Ltd.
56,675,678.62
3.08
BMM Power plant in India
33,995,970.00
1.85
Sub-total
783,068,306.88
42.55
582. Business tax and surcharge
Items
Current term
Same period of last term
Rate
Business tax
541,665.95
801,986.00
City maintenance and construction tax
1,274,082.70
2,990,090.84
Education surtax
556,850.14
681,006.98
Local education surcharges
2,757,219.44
687,270.58
For details please see Notes to the Financial Statements.
Total
5,129,818.23
5,160,353.50
3. Asset impairment loss
Items
Current term
Same period of last term
Bad debt losses
49,340,494.01
31,933,931.16
Total
49,340,494.01
31,933,931.16
4. Investment income
(1) Details
Items
Current term
Same period of last term
Long-term equity investment gains on cost basis
1,000,000.00
29,898,083.98
Long-term equity investment gains on equity basis
100,735.77
Investment gains from disposal of long-term equity investment
Others
Total
1,100,735.77
29,898,083.98
(2) Long-term investment income on cost basis
Company invested in
Current term
Same period of last term
Causation of change
Hangzhou Commercial Bank
28,898,300.00
Zhejiang Tianhang Steam Turbine Auxiliary Machinery Co., Ltd.
1,000,000.00
1,200,000.00
Sub-total
1,000,000.00
30,098,300.00
(3) Long-term investment income on equity basis
Company invested in
Current term
Same period of last term
Causation of change
Hangzhou Steam Turbine Environmental Engineering Co., Ltd.
100,735.77
Canceled in previous term
Sub-total
100,735.77
(4) There was no major limitation on retrieving of investment gains. 595. Non-operational income
(1) Details
Items
Current term
Same period of last term
Total of gains from disposal of non-current assets
48,907.71
174,985.76
Incl. Gains from disposal of fixed assets
48,907.71
174,985.76
Government subsidy
1,300,412.00
3,214,040.20
Compensation income
841,925.00
0
Others
16,435.33
100,000.00
Total
2,207,680.04
3,489,025.96
(1) Statement on changes for over 30% (included) or 10% (included) of the total profit.
Non-operational income decreased by 36.73%, which was caused by decrease of government subsidy.
6. Non-operational expenditure
Items
Current term
Same period of last term
Total of loss from disposal of non-current assets
1.37
Incl. Loss from disposal of fixed assets
1.37
Donations
2,683,337.00
905,000.00
Penalty paid
58,128.74
13,890.00
water conservancy special fund
2,300,045.06
1,946,789.92
Others
16,744.24
2,668.09
Total
5,058,255.04
2,868,349.38
7. Income tax expenses
Items
Current term
Same period of last term
Income tax calculated according to the law and regulations of current term
57,396,622.68
48,512,516.75
Adjustment of differed income tax
-1,626,069.83
1,789,070.53
Total
55,770,552.85
50,301,587.28
60(III) Notes to consolidated cash flow statement
1. Other operational cash received
Items
Current term
Gains from bank interests
3,055,870.71
Government subsidies received
6,256,112.00
Bidding deposit
7,165,370.00
Others
12,154,625.85
Total
28,631,978.56
2. Other operational cash paid
Items
Current term
Business trips
12,034,496.75
Transportation
19,603,711.77
Business reception expenses
9,639,494.68
International travelling
2,090,208.08
Property management and civil services
3,750,358.95
Rental
4,528,582.29
Bidding deposit
16,121,850.00
Others
41,253,229.09
Total
109,021,931.61
3. Cash received as borrowing
Items
Current term
Loans from bank
143,000,000.00
Borrowings received from other units
50,000,000.00
Total
193,000,000.00
615. Appendix of Cash Flow Statement
(1) Supplementary cash flow statement
Supplementary Info.
Current term
Same period of last term
1) Net profit adjusted to cash flow of operation:
Net profit
305,911,524.96
288,130,624.99
Plus: Asset impairment provision
49,340,494.01
31,933,931.16
Fixed asset depreciation, gas and petrol depreciation, production goods depreciation
33,959,030.37
32,511,820.30
Amortizing of intangible assets
3,967,848.65
29,539,093.29
Amortizing of long-term expenses
229,993.08
229,993.08
Loss from fixed assets, intangible assets and other long-term assets disposal (“-“ for gains)
-48,907.71
-174,985.76
Loss from fixed assets discarding (“-“ for gains)
0
1.37
Loss from fluctuate of fair value (“-“ for gains)
0
0
Financial expenese (“-“ for gains)
9,719,615.00
-6,368,268.96
Investment loss (“-“ for gains)
-1,100,735.77
-29,898,083.98
Decrease of deferred income tax asset (“-“ for increase)
-4,085,399.85
1,909,346.88
Increase of deferred income tax liabilities (“-“ for decrease)
0
0
Decrease of inventory (“-“ for increase)
-165,726,892.95
-85,502,793.87
Decrease of operational receivables (“-“ for increase)
-371,086,225.38
-65,251,259.59
Increase of operational payables (“-“ for decrease)
348,894,618.86
-206,999,403.59
Others
165,999.75
Cash flow generated by business operation, net
209,974,963.27
-9,773,984.93
2) Major investment and financing activities not involved in cash
Liabilities converted to capital
Convertible bond expire in 1 year
Fixed assets leased through financing
3) Net change of cash and cash equivalents:
Balance of cash at period end
468,533,578.69
426,359,868.41
Less: Initial balance of cash
484,391,142.82
450,103,030.94
Plus: Balance of cash equivalents at the period end
Less: Initial balance of cash equivalents
Net increasing of cash and cash equivalents
-15,857,564.13
-23,743,162.53
(2) Composition of cash and cash equivalents
62Items
End of term
Beginning of term
1) Cash
468,533,578.69
484,391,142.82
Incl: Cash in stock
309,771.34
197,212.66
Bank savings could be used at any time
464,051,807.35
477,236,343.72
Other monetary capital could be used at any time
4,172,000.00
6,957,586.44
2) Cash equivalents
Incl. Bond investment due in 3 months
3) Balance of cash and cash equivalents at end of term
468,533,578.69
484,391,142.82
(3) Remarks on supplementary cash flow statement
There is a sum of USD300 thousand (RMB2,048,460.00) frozen by the bank at beginning of term, which was not included in the cash and cash equivalent.
(IV) Details of asset impairment provision
Details
Decreased this term
Items
Beginning of term
Provided current term
Written
Transferred
End of term
Bad debt provision
276,834,272.34
49,340,494.01
326,174,766.35
Inventory impairment provision
1,482,365.58
0
1,482,365.58
Fixed asset impairment provision
8,169,109.24
0
8,169,109.24
Total
286,485,747.16
49,340,494.01
335,826,241.17
VI. Related parties and transactions
(I) Related parties
1. The parent company of the Company
Name of the parent co.
Relationship
Ownership type
Reg. Add.
Legal representative
Business property
Hangzhou Steam Turbine Group
Controlling shareholder
Solely national owned
Hangzhou China
Nie Zhonghai
Limited liability
(Continue)
Name of the parent co.
Registered capital
Shareholding of the parent co.
Voting rights of the parent co. %
Substantial holder of the Company
Organization code
Hangzhou Steam Turbine Group
RMB500 million
63.64
63.64
Hangzhou State Asset Committee
143071842
2. Details of the subsidiaries are available with the Notes to the Consolidated Financial Statements
3. Other related parties
(1) Other related parties
63Name of the related parties
Relationship with the Company
Organization code
Hangzhou Steam Turbine Automobile Sales Service Co., Ltd.
Affiliate of the Group
710976614
Hangzhou Steam Turbine Power Sales Co., Ltd.
Affiliate of the Group
757214932
HSTG Nanfang Sales Co.
Affiliate of the Group
YA3715443
Hangzhou Hangfa Power Generating Equipment Co., Ltd.
Affiliate of the Group
70427611X
Hangzhou Nanfangtongda Gears Co., Ltd.
Affiliate of the Group
770809041
Hangzhou Steam Turbine Wooden Packaging Co., Ltd.
Affiliate of the Group
143326331
Hangzhou Dongfeng Shipyard Co., Ltd.
Affiliate of the Group
721062009
HSTG Energy Tech Co., Ltd.
Affiliate of the Group
790940629
Hangzhou Steam Turbine Industrial Co.
Affiliate of the Group
757237210
Tangshan Thermal Union Trade Co., Ltd.
Affiliate of the Group
727606636
Hangzhou Relian International Trading Co.
Affiliate of the Group
710976614
Hangzhou Steam Turbine Power Technologies Co., Ltd.
Affiliate of the Group
143039674
HSTG Technology Association
Affiliate of the Group
501900023
HSTG Technology Association
Affiliate of the Group
(II) Related transactions
1. Trade of goods and services
(1) Details
1) Purchase of goods and services
Current term
Same period of last term
Related parties
Type of trade
Subjects of the related transactions
Amount
Pricing and decision making process
Amount
Pricing and decision making process
Hangzhou Steam Turbine Automobile Sales Service Co., Ltd.
Accept labor
freight, repairing fee
11,970,961.58
Price on agreement
6,206,310.22
Price on agreement
Hangzhou Steam Turbine Industrial Co.
Purchase of goods
Raw materials
1,062,351.52
Price on agreement
940,893.80
Price on agreement
Hangzhou Hangfa Power Generating Equipment Co., Ltd.
Purchase of goods
Generators
86,616,180.00
Price on agreement
70,939,000.00
Price on agreement
64Hangzhou Relian International Trading Co.
Purchase of goods
Raw materials
0
Price on agreement
98,932.00
Price on agreement
Hangzhou Steam Turbine Wooden Packaging Co., Ltd.
Purchase of goods
Packaging materials
6,280,827.70
Price on agreement
5,312,865.75
Price on agreement
Hangzhou Nanfangtongda Gears Co., Ltd.
Purchase of goods
Gear boxes
6,449,700.00
Price on agreement
7,419,000.00
Price on agreement
Hangzhou Dongfeng Shipyard Co., Ltd.
Accept labor
Process fee
0
828,800.00
Price on agreement
HSTG Technology Association
Accept labor
Process fee
0
51,315.00
Price on agreement
Hangzhou Steam Turbine Power Sales Co., Ltd.
Purchase of goods
Raw materials
0
6,200.75
Price on agreement
Sub-total
112,380,020.80
91,803,317.52
2) Sales of goods and providing of services
Current term
Same period of last term
Related parties
Type of trade
Subjects of the related transactions
Amount
Pricing and decision making process
Amount
Pricing and decision making process
Hangzhou Steam Turbine Group
Sales of goods
Steam turbine
5,435,897.42
Price on agreement
8,863,247.84
Price on agreement
Hangzhou Steam Turbine Power Sales Co., Ltd.
Sales of goods
Steam turbine
56,453,456.40
Price on agreement
73,316,752.16
Price on agreement
Hangzhou Hangfa Power Generating Equipment Co., Ltd.
Providing of labor service
Industrial cooperation
362,393.16
Price on agreement
HSTG Energy Tech Co., Ltd.
Sales of goods
Spare parts
36,072.65
Price on agreement
Hangzhou Steam Turbine Automobile Sales Service Co., Ltd.
Sales of goods
Spare parts
376.09
协议价
26,821.48
Price on agreement
Hangzhou Steam Turbine Power Technologies Co.,
Sales of goods
Steam turbine
12,981,196.58
Price on agreement
0
65Ltd.
HSTG Technology Association
Providing of labor service
Industrial co-operation
0
161,324.79
Price on agreement
Sub-total
74,870,926.49
82,766,612.08
662. Rental payment in the report term
Name of the owner
Name of the tenant
Description of the property
Annual rental as contract
Starting date
Stop date
Hangzhou Steam Turbine Group
The Company
Houses & buildings
390,696.00
2010.1.1
2010.12.31
Hangzhou Steam Turbine Group
The Company
Land using right
1,340,860.00
2010.1.1
2010.12.31
Sub-total
1,731,556.00
3. Guarantees among the related parties
The guarantor
The beneficiary party
Amount guaranteed
Start date
Due date
Completed or not
Hangzhou Steam Turbine Group
Packaged Equipment Co. of the Group
20,000,000.00
2009-9-21
2010-7-14
No
Hangzhou Steam Turbine Group
Packaged Equipment Co. of the Group
30,000,000.00
2009-8-28
2010-7-14
No
Hangzhou Steam Turbine Group
Packaged Equipment Co. of the Group
30,000,000.00
2010-1-20
2011-1-19
No
Hangzhou Steam Turbine Group
Packaged Equipment Co. of the Group
30,000,000.00
2010-3-26
2011-3-21
No
Hangzhou Steam Turbine Group
Packaged Equipment Co. of the Group
20,000,000.00
2010-4-20
2011-4-18
No
Sub-total
130,000,000.00
4. Other related transactions
(1) Supplying agreement on services, raw materials, energy, and telecommunication
HSTG provide civil services, property management, and employee training to the Company. The fees payable to HSTG was RMB2,233,770.00 in the current term. HSTG supplies water and power to the Company and some of the subsidiaries amounted to RMB6,708,708.27 this term.
HSTG provide cleaning services to the Company and the fee was RMB334,299.48 for this term.
(2) Using of trademark
The Company pays RMB1,500,000.00 to HSTG for using of the registered trademark.
(3) Expenses paid on behalf the Company
The basic and supplementary medical insurance was paid by HSTG on behalf of the Company. For the current term, the Company had paid RMB751,511.53 under this item.
(4) Capital interchange with related parties
HSTG Packaged Tech Co., Ltd. borrowed working capital of RMB50 million from Hangzhou Relian Import & Export Co. on March 4, 2010. The term was March 4, 2010 to March 3, 2011. The interest was 90% discount on the bank loans of 5.31% per annum (namely 4.779%). The borrowing was used by the Packaged Tech Co., Ltd. as working capital.
(III) Payable and receivable accounts with the related parties
67Projects
Related parties
End of term
Beginning of term
Account receivable
Hangzhou Steam Turbine Group
876,500.00
944,000.00
HSTG Nanfang Sales Co.
20,000.00
20,000.00
Hangzhou Steam Turbine Power Sales Co., Ltd.
104,646,943.69
91,284,168.38
Hangzhou Steam Turbine Power Technologies Co., Ltd.
8,368,000.00
Sub-total
113,911,443.69
92,248,168.38
Prepayment
Hangzhou Hangfa Power Generating Equipment Co., Ltd.
4,223,025.00
11,220,825.00
Sub-total
4,223,025.00
11,220,825.00
Account payable
Hangzhou Steam Turbine Group
448,149.55
333,711.37
Hangzhou Steam Turbine Automobile Sales Service Co., Ltd.
2,571,696.17
590,390.33
Hangzhou Steam Turbine Industrial Co.
289,554.51
122,763.43
Hangzhou Hangfa Power Generating Equipment Co., Ltd.
8,453,150.20
2,339,600.00
Hangzhou Steam Turbine Wooden Packaging Co., Ltd.
176,457.00
71,040.00
Hangzhou Nanfangtongda Gears Co., Ltd.
1,934,025.00
66,000.00
Sub-total
13,873,032.43
3,523,505.13
Prepayment received
Hangzhou Steam Turbine Power Sales Co., Ltd.
26,534,823.54
36,763,556.54
Hangzhou Steam Turbine Power Technologies Co., Ltd.
3,762,400.00
Sub-total
30,297,223.54
36,763,556.54
Other account payable
Hangzhou Steam Turbine Group
23,465,523.29
10,340,876.00
Hangzhou Steam Turbine Automobile Sales Service Co., Ltd.
3,321,702.81
1,928,039.57
Hangzhou Relian International Trading Co.
50,000,000.00
Sub-total
76,787,226.10
12,268,915.57
VII. Contingent Events
No major contingent event to be disclosed.
VIII. Commitment Events
The Company, the Casting Co., Guoneng Co., Zhongcheng Co., and subsidiary of Zhongneng Co. have made capital commitment amounted to RMB161.6159 million for construction of new workshops and purchasing of equipment.
68IX. Post-balance sheet issues
No such post-balance sheet issues to be disclosed.
X. Other significant issues
None
XI. Notes to Financial Statements of the Parent Company
(I) Notes to items of parent company financial statements
1. Account receivable
(1) Details
1) Detailed categories
End of term
Beginning of term
Book balance
Bad debt provision
Book balance
Bad debt provision
Category
Amount
Proportion %
Amount
Proportion %
Amount
Proportion %
Amount
Proportion %
Major single amount
833,348,258.64
51.82
125,576,145.19
15.07
547,961,555.58
40.25
92,749,134.62
16.93
Minor single amount but greater risk after combined in a character group
96,992,511.31
6.03
58,817,184.39
60.64
72,838,779.83
5.35
44,324,945.50
60.85
Other minors
677,786,533.41
42.15
100,770,391.33
14.87
740,685,655.24
54.40
109,348,867.63
14.76
Total
1,608,127,303.36
100.00
285,163,720.91
17.73
1,361,485,990.65
100
246,422,947.75
18.10
2) Detailed on ages
End of term
Beginning of term
Book balance
Book balance
Age
Amount
Proportion %
Bad debt provision
Amount
Proportion %
Bad debt provision
within 1 yr
908,537,157.53
56.50
45,359,005.37
716,741,793.50
52.64
35,827,739.68
1-2 yrs
341,351,189.07
21.23
68,270,237.81
336,252,250.50
24.70
66,963,890.10
2-3 yrs
218,113,269.61
13.56
86,837,387.84
210,427,638.08
15.46
84,171,055.23
over 3 yrs
140,125,687.15
8.71
84,697,089.89
98,064,308.57
7.20
59,460,262.74
Total
1,608,127,303.36
100
285,163,720.91
1,361,485,990.65
100
246,422,947.75
(2) Further remarks on bad debt provisions at end of term
1) Bad debt provision provided according to the result of individual impairment testing on major single account or minor single account but tested individually 69Description of the receivable accounts
Book balance
Bad debt provision
Rate
Reason
Ningxia Meili Paper Co., Ltd.
1,011,694.00
1,011,694.00
100%
Hard to recover
Jinxi Chemical Machinery Factory
1,264,000.00
1,264,000.00
100%
Hard to recover
Sub-total
2,275,694.00
2,275,694.00
2) Bad debt provisions provided on individual tested items without impairment and not tested individually
Individual tested items without impairment and not tested individually are included in the group of similar risks, and bad debt provisions are provided along with the group. For details please refer to Note II.
(4) Receivable accounts due from shareholders with 5% of shares or over
End of term
Beginning of term
Name of the companies
Book balance
Bad debt provision
Book balance
Bad debt provision
Hangzhou Steam Turbine Group
178,500.00
8,925.00
178,500.00
8,925.00
Sub-total
178,500.00
8,925.00
178,500.00
8,925.00
(5) Receivable accounts top 5 on amounts
Name of the companies
Relation with the Company
Book balance
Age
Portion in balance of receivable accounts (%)
Shenyang Turbine Machinery Co., Ltd.
Non-related
365,669,527.90
[Note 1]
22.74
Xi’an Shanggu Power Co., Ltd.
Non-related
254,576,730.74
[Note 2]
15.83
Chongqing Zhongjieneng Sanfeng Energy Co., Ltd.
Non-related
213,102,000.00
within 1 year
13.25
Hangzhou Steam Turbine Power Sales Co., Ltd.
Related parties
97,510,934.69
[Note 3]
6.06
Lianyuan Steel Group Co., Ltd.
Non-related
72,509,871.00
within 1 year
4.51
Sub-total
1,003,369,064.33
62.39
[Note 1]: Balance of receivable from Shenyang Turbine Machinery Co., Ltd. due within 1 year was RMB198,686,723.50, between 1 and 2 years was RMB94,921,802.40, between 2-3 years was RMB40,477,820.00, and over 3 years was RMB198,686,723.50.
[Note 2] Xi’an Shanggu Power Co., Ltd., has a balance of receivable within 1 year of RMB103,526,610.30, 1-2 years of RMB85,225,330.60, 2-3 years of RMB54,274,796.00, and over 3 years of RMB11,549,993.8.
[Note 3] HSTG Sales Co., has a balance of receivable within 1 year of RMB54,928,965.31, 1-2 years of RMB19,157,910.00, 2-3 years of RMB 20,949,559.38, and over 3 years of RMB 2,474,500.00.
70(6) Other receivable accounts of related parties
Name of the companies
Relation with the Company
Book balance
Portion in balance of receivable accounts (%)
Hangzhou Steam Turbine Packaged Technologies Co., Ltd.
Parent co.
2,376,850.00
0.15
Hangzhou Steam Turbine Power Technologies Co., Ltd.
Parent co.
8,368,000.00
0.52
Hangzhou Zhongneng Steam Turbine Power Co., Ltd.
Parent co.
481,000.00
0.03
Hangzhou Steam Turbine Power Sales Co., Ltd.
Affiliate of the Group
97,510,934.69
6.06
Sub-total
108,736,784.69
6.76
2. Other account receivable
(1) Details
1) Detailed categories
End of term
Beginning of term
Book balance
Bad debt provision
Book balance
Bad debt provision
Category
Amount
Proportion %
Amount
Proportion %
Amount
Proportion %
Amount
Proportion %
Major single amount
11,902,332.97
42.12
2,406,192.56
20.22
9,669,162.67
47.41
2,406,192.56
24.89
Minor single amount but greater risk after combined in a character group
1,778,381.28
6.29
1,067,028.77
60.00
859,981.28
4.22
515,988.77
60.00
Other minors
14,576,751.72
51.59
535,119.00
3.67
9,865,472.91
48.37
602,818.41
6.11
Total
28,257,465.97
100
4,008,340.33
14.19
20,394,616.86
100
3,524,999.74
17.28
2) Detailed on ages
End of term
Beginning of term
Book balance
Book balance
Age
Amount
Proportion %
Bad debt provision
Amount
Proportion %
Bad debt provision
within 1 yr
21,670,061.25
76.69
418,138.50
14,100,524.64
69.14
226,780.41
1-2 yrs
298,702.50
1.05
59,740.50
967,390.00
4.74
193,478.00
712-3 yrs
1,213,800.00
4.30
485,520.00
456,400.00
2.24
182,560.00
over 3 yrs
5,074,902.22
17.96
3,044,941.33
4,870,302.22
23.88
2,922,181.33
Total
28,257,465.97
100.00
4,008,340.33
20,394,616.86
100.00
3,524,999.74
(2) Further remarks on bad debt provisions at end of term
Bad debt provisions provided on individual tested items without impairment and not tested individually
Individual tested other receivable items without impairment and not tested individually are included in the group of similar risks, and bad debt provisions are provided along with the group. For details please refer to Note II.
(3) No receivable account due from shareholding parties holding over 5% of the Company’s shares.
(4)
Other receivable accounts top 5 on amounts
Name of the companies
Relation with the Company
Book balance
Age
Percentage in total other receivable %
Property of the account
Hangzhou Steam Turbine Casting Co., Ltd.
Parent co.
7,892,012.03
Within 1 year
27.93
Paid in behalf
Customs deposit receivable
Non-related
4,010,320.94
Over five years
14.19
Deposit
Hangzhou Steam Turbine Auxiliary Machine Co., Ltd.
Parent co.
1,931,004.79
Within 1 year
6.83
Paid in behalf
Hangzhou Guoneng Steam Turbine Engineering Co., Ltd.
Parent co.
1,921,738.46
Within 1 year
6.80
Paid in behalf
Hangzhou Steam Turbine Packaged Technologies Co., Ltd.
Parent co.
1,198,526.91
Within 1 year
4.24
Paid in behalf
Sub-total
16,953,603.13
59.99
(5) Other related party receivable account
Name of the companies
Relation with the Company
Book balance
Portion in balance of receivable accounts (%)
Hangzhou Steam Turbine Packaged Technologies Co., Ltd.
Parent co.
1,198,526.91
4.24
Hangzhou Steam Turbine Casting Co., Ltd.
Parent co.
7,892,012.03
27.93
Hangzhou Steam Turbine Machinery & Equipment Co., Ltd.
Parent co.
364,009.14
1.29
Hangzhou Steam Turbine Auxiliary Machine Co., Ltd.
Parent co.
1,931,004.79
6.83
Hangzhou Guoneng Steam Turbine Engineering Co., Ltd.
Parent co.
1,921,738.46
6.80
Sub-total
13,307,291.33
47.09
723. Long-term share equity investment
(1) Details
Company invested in
Calculating basis
Initial costs
Beginning of term
Changed by
End of term
Zhejiang Steam Turbine Packaged Technology Development Co., Ltd.
Cost basis
16,260,174.60
16,260,174.60
16,260,174.60
Hangzhou Zhongneng Steam Turbine Power Co., Ltd.
Cost basis
5,600,853.25
5,600,853.25
5,600,853.25
Hangzhou Steam Turbine Casting Co., Ltd.
Cost basis
11,220,000.00
11,220,000.00
11,220,000.00
Hangzhou Steam Turbine Auxiliary Machine Co., Ltd.
Cost basis
19,244,620.00
19,244,620.00
19,244,620.00
Hangzhou Steam Turbine Machinery & Equipment Co., Ltd.
Cost basis
7,968,000.00
7,968,000.00
7,968,000.00
Greenesol Co. (India)
Cost basis
1,032,411.62
1,032,411.62
1,032,411.62
Hangzhou Bank
Cost basis
390,954,040.00
390,954,040.00
390,954,040.00
Zhejiang Turbine Import & Export Co., Ltd.
Cost basis
20,000,000.00
20,000,000.00
20,000,000.00
Total
472,280,099.47
472,280,099.47
472,280,099.47
(Continue)
Company invested in
Share proportion %
Voting power %
Statement on differences between the shareholding and voting rights
Impairment provision
Impairment provision provided this term
Cash dividend of the current term
Zhejiang Steam Turbine Packaged Technology Development Co., Ltd.
51.84
51.84
6,998,332.50
Hangzhou Zhongneng Steam Turbine Power Co., Ltd.
51.60
51.60
25,801,500.00
Hangzhou Steam Turbine Casting Co., Ltd.
51.00
51.00
0
Hangzhou Steam Turbine Auxiliary Machine Co., Ltd.
76.50
76.50
45,897,225.00
Hangzhou Steam Turbine Machinery & Equipment Co., Ltd.
52.00
52.00
19,500,000.00
73Greenesol Co. (India)
37.00
37.00
0
Hangzhou Bank
6.92
6.92
0
Zhejiang Turbine Import & Export Co., Ltd.
100.00
100.00
0
Hangzhou Steam Turbine Environmental Engineering Co., Ltd.
100,735.77
Total
98,297,793.27
(II) Notes to items of parent company income statements
1. Turnover / cost
(1) Details
Items
Current term
Same period of last term
Major business turnover
1,305,234,415.66
1,064,823,034.65
Other business income
9,800302.87
8,339,421.71
Operation cost
882,879,318.32
647,775,737.01
(2) Main business turnover/ cost (categorized by products)
Current term
Same period of last term
Products or services
Revenue
Cost
Revenue
Cost
Industrial
1,297,625,430.53
871,201,321.15
1,055,102,412.28
633,925,811.86
Others
7,608,985.13
2,357,667.98
9,720,622.37
5,792,447.20
Sub-total
1,305,234,415.66
873,558,989.13
1,064,823,034.65
639,718,259.06
(4) Main business turnover / cost (on territories)
Current term
Same period of last term Name of districts
Revenue
Cost
Revenue
Cost
Domestic
1,135,731,795.37
756,327,162.81
929,582,843.52
529,614,401.26
Overseas
169,502,620.29
117,231,826.32
135,240,191.13
110,103,857.80
Sub-total
1,305,234,415.66
873,558,989.13
1,064,823,034.65
639,718,259.06
(3) Business turnover from top 5 clients
Name of clients
Turnover
Percentage in total turnover of the Company
Chongqing Zhongjieneng Sanfeng Energy Co., Ltd.
368,752,136.90
28.04
Shenyang Turbine Machinery Co., Ltd.
208,362,213.70
15.84
Xi’an Shanggu Power Co., Ltd.
87,379,487.21
6.64
74Hangzhou Steam Turbine Power Sales Co., Ltd.
55,958,485.47
4.26
BMM Power Plant in India
33,995,970.00
2.59
Sub-total
754,448,293.28
57.37
752. Investment income
(1) Details
Items
Current term
Same period of last term
Long-term equity investment gains on cost basis
98,197,057.50
74,878,300.00
Long-term equity investment gains on equity basis
100,735.77
Total
98,297,793.27
74,878,300.00
(2) Long-term investment income on cost basis
Company invested in
Current term
Same period of last term
Causation of change
Hangzhou Zhongneng Steam Turbine Power Co., Ltd.
25,801,500.00
Hangzhou Steam Turbine Auxiliary Machine Co., Ltd.
45,897,225.00
24,320,000.00
Zhejiang Steam Turbine Packaged Technology Development Co., Ltd.
6,998,332.50
9,180,000.00
Hangzhou Steam Turbine Machinery & Equipment Co., Ltd.
19,500,000.00
12,480,000.00
Hangzhou Bank
28,898,300.00
Dividend of year 2009 received in July 2010
Greenesol Co. (India)
0
Sub-total
98,197,057.50
74,878,300.00
(3) Long-term investment income on equity basis
Company invested in
Current term
Same period of last term
Causation of change
Hangzhou Steam Turbine Environmental Engineering Co., Ltd.
100,735.77
Canceled in last term, clearing of deposit interests
Sub-total
100,735.77
(4) No major limitation on retrieving of investment gains.
76XII. Supplementary information
(I) Non-recurring gain/loss
1. Details of non-recurring gain/loss of current term
Items
Amount
Remarks
Gain/loss from disposal of non-working capital, including the neutralized part of the impairment provision provided already
48,907.71
Refunding and exemption of taxes in excess of authority or without official approval documents
0
Government subsidies accounted into current income account (except for those government subsidies closely related to the Company’s business, and received at national statutory standard and amount)
1,300,412.00
Capital adoption fee collected from non-financial organizations and accounted into current gain/loss
0
Gain/loss from differences between the cost of enterprise merger and the fair value of recognizable net asset of the invested entities
0
Gain/loss from non-monetary assets
0
Gain/loss from commissioned investment or assets
0
Asset impairment provisions provided for force-majeur
0
Gain/loss from debt reorganization
0
Enterprise reorganizing expenses, such as employee placement fee and integration fee
0
Gain/loss from trade departing from fair value
0
Current net gain/loss of subsidiaries under same control from beginning of term till date of consolidation
0
Gain/loss generated by contingent liabilities without connection with main businesses
0
Gain/loss from change of fair value of transactional asset and liabilities, and investment gains from disposal of transactional financial assets and liabilities and sellable financial assets, other than valid period value instruments related to the Company’s common businesses
0
Restoring of receivable account impairment provision tested individually
0
Gain/loss from commissioned loans
0
Gain/loss from change of fair value of investment property measured at fair value in follow-up measurement
0
Influence of one-time adjustment made on current gain/loss account according to the laws and regulations regarding tax and accounting
0
Consigning fee received for cosigned operation
0
Other non-business income and expenditures other than the above
-4,199,894.71
Other gain/loss items satisfying the definition of non-recurring gain/loss account
Sub-total
-2,850,575.00
Less: Influence of enterprise income tax (??for decrease of income tax)
556,613.52
Influence on minority shareholders’ equity (after tax)
508,618.57
Net non-recurring gain/loss attributable to the owners of the parent company
-1,785,342.91
(III) Net income on asset and earnings per share
1. Details
Earnings per share (yuan/share)
Profit of the report period
Weighted average net income on asset %
Basic earnings per share
Diluted earnings per share
Net profit attributable to common shareholders of the Company
10.38%
0.5293
0.5293
Net profit attributable to the common owners of the PLC after deducting of non-recurring gains/losses
10.45%
0.5330
0.5330
772. Calculation process of weighted average net income on asset
Items
No.
Current term
Net profit attributable to common shareholders of the Company
A
255,824,821.46
Non-recurring gain/loss
B
-1,785,342.91
Net profit attributable to common shareholders of the Company after deducting of non-recurring gain/loss
C=A-B
257,610,164.37
Net asset attributable to the common shareholders of the Company at beginning of term
D
2,336,109,466.46
Net asset increased by issuing of new shares or converting of debt to shares, and attributable to the common shareholders of the Company
E
Total number of months from the next month of when the asset was newly added to the end of report term
F
Net asset decreased by repurchasing or cash dividend and attributable to common shareholders of the Company
G
148,720,000.00
Total number of months from the next month of when the asset is decreased to the end of report term
H
0
Change of net asset caused by other trade or event and attributable to the common shareholders of the Company
I
Total number of months from the next month when the change of net asset caused by other trade to the end of report term
J
Number of months in the report term
K
6
Weighted average net asset
L= D+A/2
+ E×F/K-G×H/K±I
2,464,021,877.19
Net income on asset, weighted
M=A/L
10.38%
Weighted average net income on asset after deducting of non-recurring gain/loss
N=C/L
10.45%
3. Calculation of basic earnings per share
Items
No.
Year 2009
Net profit attributable to common shareholders of the Company
A
255,824,821.46
Non-recurring gain/loss
B
-1,785,342.91
Net profit attributable to common shareholders of the Company after deducting of non-recurring gain/loss
C=A-B
257,610,164.37
Total of shares at beginning of shares
D
371,800,000
Shares increased due to capitalizing of reserves or share dividend
E
111,540,000
Increasing of shares by issuing of new shares or converting of debt to shares
F
Total number of months from the next month of when the shares are increased to the end of report term
G
Decrease of shares caused by repurchasing
H
78Total number of months from the next month of when the shares are decreased to the end of report term
I
Amount of shares reduced
J
Number of months in the report term
K
6
Weighted average of common shares issued to the outside
L=D+E+F×G/K-H
483,340,000
Basic earnings per share
M=A/L
0.5293
Basic earning per share after deducting of non-recurring gain/loss
N=C/L
0.5330
4. Calculation process of diluted earning per share
Same as the calculating method of basic earning per share.
(IV) Irregular situation in the financial statements and remarks
Balance Sheet Items
End of term
Beginning of term
Scale of change
Remarks on the change
Prepayments
318,739,151.06
219,791,399.56
45.02%
Mainly caused by increasing of prepayment made by the Packaged Tech Co. for purchasing of equipment parts and materials.
Other account receivable
29,050,437.43
17,333,756.04
67.59%
Mainly caused by tax refunding of India project.
Other current asset
108,275.80
-100.00%
Construction in process
181,058,362.57
133,993,100.65
35.13%
Mainly caused by increasing of project and equipment payment for the 2nd phase of workshop of Casting Co..
Short-term loans
195,000,000.00
136,000,000.00
43.38%
Packaged Tech Co. increased the loan by RMB80 million, and the Casting Co. decreased by RMB21 million.
Notes payable
70,004,809.92
103,656,815.22
-32.46%
Caused by significant decreasing of bank accepted draft issued by the Company
Account payable
536,270,437.77
320,766,161.48
67.18%
Mainly caused by increasing of inventory to meet the demand of increasing orders
Employees’ wage payable
35,749,491.69
23,241,197.54
53.82%
For details please see Note V(I)17
Interest payable
195,250.00
-100.00%
Bank interests
Other account payable
88,031,611.00
24,231,372.13
263.30%
For details please see Note V. (I), 20-(2)
Other non-current asset
8,004,440.00
3,322,740.00
140.90%
Please see Note V(I)23 – (2)
Practical capital input
483,340,000.00
371,800,000.00
30.00%
According to the resolution of the Shareholders’ Annual Meeting 2009, 3 bonus shares for each 10 shares.
79Income Statement Items
Current term
Same period of last term
Scale of change
Remarks on the change
Financial expenses
9,719,615.00
-6,368,268.96
-252.63%
Mainly caused by decrease of exchange gains and increase of interests
Asset impairment loss
49,340,494.01
31,933,931.16
54.51%
Mainly caused by increasing of receivable, extending of account ages, and therefore increase of bad debt provisions
Investment income
1,100,735.77
29,898,083.98
-96.32%
Dividend of 2009 from Bank of Hangzhou, received in July 2010
Non-operational income
2,207,680.04
3,489,025.96
-36.72%
Mainly caused by decrease of government subsidy accounted into non-operation income
Non-operational expenditure
5,058,255.04
2,868,349.38
76.35%
Mainly caused by increase of external donations
8081
Chapter VIII. Documents Ready for Inquiring
(I) Original copy of Interim Report 2010 in full text and summary with signature of the Chairman.
(II) Financial Report bearing the signatures of the legal representative, financial superior and head of accounting department.
(III) All documents that have been disclosed on statutory presses assigned by CSRC.
(IV) Other related documents.
Hangzhou Steam Turbine Co., Ltd. (Stamp)
Chairman of Board: Nie Zhonghai
August 28, 2010
