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杭汽轮B:关于确认2019年度日常关联交易发生额及2020年度日常关联交易预计额的公告(英文版)2020-03-13  

						Stock Code: 200771      Stock ID: Hangqilun B        Announcement No. 2020-06



                               Hangzhou Steam Turbine Co., Ltd.

 Announce ment on Confirming Occurre nce of Daily Related Transactions of
 2019 and the Estimated Amount of Related Transactions of the Company of
                                             2020


The members of the Board and the Company acknowledge being responsible for the truthfulness,

accuracy, and completeness of the announcement. Not any false record, misleading statement or

significant omission carried in this announcement.

I. Profiles of the routine related transactions

(I) Introduction of the related transaction

Routine related transactions of the Company are mainly purchasing of materials and fuel from
related parties; sales of products to related parties; and receiving or providing of servic es to the
related parties. For profiles of the related parties please go to part II of this report.

The actual amount of daily related transactions of 2020 was 419.1119 million yuan. The

 Accumulative actual amount of daily related transactions of 2019 was 353.9915 million

 yuan( Unaudited), The Accumulative actual amount of daily related transactions of January to

 February 2020 was 34.3735 million yuan( Unaudited),

     The 3rd meeting of the 8th term of Board was held on March 12, 2020. The meeting

examined the Proposal on Confirming Occurrence of Daily Related Transactions of 2019 and

the Estimated Amount of Related Transactions of the Company of 2020. Director Zheng Bin, Yang

Yongming,Ye Zhong and Li Guiwen waived from the voting. As the resolution, the proposal was

passed with all 6 votes in favor, 0 objection and 0 waive.
 This proposal is subject to examination of the Shareholders’ Meeting and Hangzhou Steam
Turbine Power Group Co., Ltd. shall waive from voting of this proposal.
(II) Category and amount of daily related party transactions
                                                               In RMB
                                                                                                                                                 Amount incurred
Type of related                                                                                                        Estimated amount in                in
                                        Related parties                                                                                                                 Occurred amount
transaction                                                                             Content                 Fair         2020                January-February       2019( Unaudited)

                                                                                                                                                   2020 ( Unaudited)
                     Hangzhou Nanhua Wooden Packaging Co., Ltd.                       Packing box               Fair                         -                      -         7,475,985.95
                     Hangzhou Steam Turbine Automobile Sales Service Co.,             Packing box
                                                                                                                Fair          16,300,000.00              1,184,678.06         6,967,168.11
                     Ltd.
                     Hangzhou Hangfa Power Generating Equipment Co.,
                                                                                       Generator                Fair         175,890,266.00             13,961,946.89       170,649,393.49
                     Ltd.
                     Hangzhou Steam Turbine Engineering Co., Ltd.                    Turbine parts              Fair                                                -         9,699,115.04
                     China mechanical and Electrical Institute -HSTG
                                                                                     Raw material               Fair           2,000,000.00                         -           633,256.21
                     (Hangzhou) United Institutes Co., Ltd.
                     Subtotal                                                                                                194,190,266.00             15,146,624.95       195,424,918.80
  Purchasing of                                                                                                 Fair
                     Hangzhou Steam Turbine Power Group Co., Ltd.                Water and electricity                         9,590,000.00              1,229,789.96        13,748,828.97
 fuel and power
from the related     Subtotal                                                                                                  9,590,000.00              1,229,789.96        13,748,828.97
      parties
                     Hangzhou Steam Turbine Engineering Co., Ltd.                Turbine, compressor            Fair          86,725,664.00              8,043,103.54        17,019,217.28
Sales of products    Hangzhou Hangfa Power Generating Equipment Co.,
                                                                                        Forging                 Fair           7,600,000.00              1,024,490.62         6,868,272.76
or merchandises      Ltd.
of the Company       India greenesol Company                                         Turbine parts              Fair           1,500,000.00                         -         1,391,458.89
to related parties   Hangzhou Steam Turbine Power Group Co., Ltd..                   Odd materials              Fair                         -                      -               230.34
                     Hangzhou Steam Turbine Power Group Co., Ltd..                labour protection             Fair                         -                      -             1,405.80
                     Subtotal                                                                                                 95,825,664.00              9,067,594.16        25,280,585.07
                     Hangzhou Steam Turbine Power Group Co., Ltd..            Information service charge,
Labor service to                                                                                                Fair          30,920,000.00                         -                 0.00
                                                                                process design fee, etc.
related parties
                     Hangzhou Steam Turbine Engineering Co., Ltd.                  Technical services           Fair                         -                      -        18,309,214.14
                     Subtotal                                                                                                 30,920,000.00                         -        18,309,214.14
Labour         &     Hangzhou Steam Turbine Engineering Co., Ltd.                  Technical services           Fair             860,000.00                28,301.89            861,320.75
services accepted    Hangzhou Steam Turbine Power Group Co., Ltd.           Rental fees, trademark fees, etc.   Fair          10,261,943.00               349,855.62         14,144,314.83
from the related     Hangzhou Steam Turbine Automobile Sales Service Co.,                                       Fair
parties                                                                          Freight, repair, rental                      77,463,982.00              8,551,313.09        86,222,354.57
                     Ltd.
                     Subtotal                                                                                                 88,585,925.00              8,929,470.60       101,227,990.15
                     Total                                                                                                   419,111,855.00             34,373,479.67       353,991,537.13
  (III)Daily Related transactions actually situations of 2019(As of December 31, 2019 Unaudited ).
                                                                                                                                                                   In RM B


                                                                                                                                               Percentage   in
Type      of     related
                                        Related parties                                                                 Estimated amount       similar              Difference
transaction                                                                     Content              Actual amount
                                                                                                                              2019             business %        proportion(%)

                           Hangzhou Nanhua Wooden Packaging Co.,
                           Ltd.                                              Packing box                 7,475,985.95       18,060,000.00               0.32%           -20.03%
                           Hangzhou Steam Turbine Automobile Sales
                           Service Co., Ltd.
                                                                             Packing box                 6,967,168.11                      -            0.30%                  -
                           Hangzhou Hangfa Power Generating
Purchasing of material     Equipment Co., Ltd.                                 Generator               170,649,393.49      176,724,137.93               7.32%            -3.44%
from related party
                           Hangzhou Steam Turbine Engineering Co.,
                           Ltd.
                                                                             Turbine parts               9,699,115.04          900,000.00               0.42%           977.68%
                           China mechanical and Electrical Institute
                           -HSTG (Hangzhou) United Institutes Co.,           Raw material                  633,256.21        2,000,000.00               0.03%           -68.34%
                           Ltd.
                           Subtotal                                                                    195,424,918.80      197,684,137.93                   -                  -
Purchasing of fuel and     Hangzhou Steam Turbine Power Group Co.,
                                                                         Water and electricity          13,748,828.97       16,337,931.03             22.44%            -15.85%
power from the related     Ltd.
parties
                           Subtotal                                                                     13,748,828.97       16,337,931.03                   -                  -
                           Hangzhou Steam Turbine Engineering Co.,
                                                                       Steam turbine, compressor        17,019,217.28        8,189,655.17               0.40%           107.81%
                           Ltd.
                           Hangzhou Hangfa Power          Generating
                                                                                Forging                  6,868,272.76       12,500,000.00               0.16%           -45.05%
Sales of products or       Equipment Co., Ltd.
merchandises of the        India greenesol Company                           Steam turbine               1,391,458.89        1,000,000.00               0.03%            39.15%
Company to related         Hangzhou Steam Turbine Automobile Sales
parties                                                                      Odd M aterial                     230.34                      -            0.00%                  -
                           Service Co., Ltd.
                           Hangzhou Steam Turbine Power Group Co.,         Labour protection
                           Ltd.
                                                                                                             1,405.80                      -            0.00%                  -
                           Subtotal                                                                     25,280,585.07       21,689,655.17                   -                  -
                           Hangzhou Steam Turbine Power Group Co.,        Information service
Labor service to related
                           Ltd.
                                                                                                                 0.00       35,000,000.00               0.00%             -100%
parties
                           Hangzhou Steam Turbine Engineering Co.,     Installation services, etc.
                           Ltd.
                                                                                                        18,309,214.14                      -          26.74%                   -
                    Subtotal                                                                       18,309,214.14    35,000,000.00        -         -
                    Hangzhou Steam Turbine Engineering Co.,          Technical services
                    Ltd.
                                                                                                     861,320.75      3,000,000.00   0.25%    -71.29%
                    Hangzhou Steam Turbine Power Group Co.,
                                                              Rental fees, trademark fees, etc.    14,144,314.83    12,173,289.23   4.10%    16.19%
Labour & services   Ltd.
accepted from the   Hangzhou Steam Turbine Automobile Sales
related parties                                                    Freight, repair, rental         86,222,354.57    45,560,000.00   25.02%   89.25%
                    Service Co., Ltd.
                    Hangzhou Steam Turbine Compressor Co.,           Technical services
                    Ltd.                                                                                    0.00      340,000.00    0.00%     -100%

                    Subtotal                                                                      101,227,990.15    61,073,289.23        -         -
                    Total                                                                         353,991,537.13   331,785,013.36        -         -
         (Continued)
Supplementary notes:                                     (1) Hangzhou Nanhua Wooden Packaging Co., Ltd., Hangzhou Hangfa

                                                         Power Generating Equipment Co., Ltd., Hangzhou Steam Turbine

                                                         Engineering Co., Ltd., China mechanical and Electrical Institute

                                                         -HSTG (Hangzhou) United Institutes Co., Ltd., Hangzhou Steam

                                                         Turbine Automobile Sales Service Co., Ltd and Hangzhou Hang Steam

                                                         Turbine Compressor Co., Ltd are both controlled by Hangzhou Steam

                                                         Turbine Power Group Co., Ltd (hereinafter referred to as Hangzhou

                                                         Steam Turbine Group") or have the actual control relationship as

                                                         "associated person under the same control”.

                                                         (2) In accordance with the Stock Listing Rules, The total amount of

                                                         related transactions actually incurred by the Company and its related

                                                         parties in 2019 was 353.9915 million yuan (unaudited), accounting for

                                                         5.51% of the Company's latest audited net assets, which shall be

                                                         submitted to the shareholders' general meeting for deliberation.
Date and index of disclosure                             For more details, please refer to the relevant announcement of Juchao

                                                         Information Network on January 9,2019, announcement No (2019-03)

An explanation by the board of directors for the          The company estimates the daily connected transaction

relatively big difference between the actual occurred
                                                         quota in 2019 based on market demand and business
                                                         development progress , The amount of daily related party
amount of daily related transactions and the estimated
                                                         transactions estimated by the company is the upper limit that may
amount
                                                         occur between the transaction parties, including: the amount expected

                                                         to occur in a signed contract, the amount of a supplementary agreement

                                                         that may be signed for a signed contract, and the amount that may be

                                                         expected to be signed in not-yet-signed contract. The actually occurred

                                                         amount is determined according to the actual contract amount signed

                                                         by both parties and the progress of implementation, which has a big

                                                         uncertainty, resulting in a big difference between the actual occurred

                                                         amount and the expected amount.

An explanation by the independent directors for the      After verification, the actual amount of the daily connected
                                                         transactions of the company in 2019 differed from the
relatively big difference between the actual occurred
                                                         estimated amount, which was based on the needs of the
amount of daily related transactions and the expected
                                                         company's business development and in line with the
amount
                                                         company's actual production and operation. the transaction is
                                                         priced according to market principles, fair and reasonable, and does not

                                                         harm the interests of the company and small-and-medium sized

                                                         shareholders, which is conducive to the company's sustained and

                                                         steady development.
           II. Introduction of related parties and relationship

           (I) Hangzhou Steam Turbine Power Group Co., Ltd.

           1. Profiles
           (1) Date of incorporation: December 14, 1992
           (2) Registered address: No. 357 Shiqiao Road Hangzhou City
           (3) Office address: Block A, 68 Qingchun Road East, Hangzhou
           (4) Enterprise property: Sole state-owned corporation
           (5) Legal representative: Mr. Zheng Bin
           (6) Registered capital: RMB 800 million
           (7) Business scope: Manufacturing and processing: textile machinery, paper-making machinery,
           pump, casting products, electrical tools, gear box, thermal transmitter, digital controlling device,
           and spare parts of the above (limited to the subsidiaries); Contracting of domestic and overseas
           machinery engineering projects, export of above equipments and materials, provide labor services
           for above overseas projects. Thermal power plant project and equipment engineering; wholesale
           and retail: products and spare parts manufactured by members of the group, and technical research,
           consulting, and service of above products; Provide materials, equipments, and spare parts to
           members of the Group, water and power supply (other than installation and maintaining of power
           supply equipment); Including the business scope of subsidiaries.
           (8) Actual holder: Hangzhou State-owned Asset Administration Committee
           2. Recent financial information (on consolidated range)

                                                                                                       In RMB

 Periods                      Turnover                  Net profit              Gross Assets                  Net asset

Year 2018                     95,325,960,513.78           741,067,094.12           35,036,880,100.64              9,956,434,936.57

Year 2019                     14,876,451,577.35           224,194,054.19           18,956,262,115.71              8,922,199,947.66

           3. Relationship with the Company

           3、Hangzhou Steam Turbine Power Group Co., Ltd. (“HSTG” or “the Group”) is holding
           479,824,800 state-owned shares account for 63.64% of the capital shares of the Company, and is
           the holding shareholder of the Company. It is complying with Artic le 10.1.3 (I) of Share Listing
           Rules of Shenzhen Stock Exchange. HSTG is the related legal person of the Company. This is a
           related transaction.
           4. Description of related transactions and their necessity
           The Company rents lands, office spaces, workshops, warehouses from HSTG; the water and
           power supply were provided by HSTG; the trade mark was authorized by HSTG. For these have
           been the basic conditions the Company needs for production and operation, these transactions will
           exist constantly.

              (II) Hangzhou Hangfa Generator Equipment Co., Ltd.

           1. Profiles
           (1) Incorporated on: March 22, 1993
           (2) Registered address: Tentong No.2 Village, Linpu, Xiaoshan
      (3) Office address: 128 Shixinzhong Road, Xiaosha
      (4) Enterprise property: State-owned shareholding corporation
      (5) Legal representative: Zhou Yifei
      (6) Registered capital: RMB 80 million
      (7) Business scope: Design, production and sale of hydroelectric power plant, turbine generator,
      motor, water pump, power station and mining accessories, mechanical electrical equipment,
      automation original; General contract of power station project, import and export of goods and
      technology , Rental of owner-owned houses. (Projects subject to approval in accordance with the
      law shall be approved by the relevant departments before they can carry out business activities)
       (8) The controlling shareholder: Hangzhou Steam Turbine Power Group Co., Ltd.
      2. Recent financial information
                                                                                          In RMB

 Periods                      Turnover                  Net profit         Gross Assets                 Net asset

Year 2018                        331,864,253.38           39,216,336.55         631,953,017.93               112,539,473.81


Year 2019                        342,594,925.02             2,419,208.41        566,680,676.13               111,735,123.79

      3. Relationship with the Company
      Hangzhou Hangfa Generator Equipment Co., Ltd. is a holding subsidiary of HSTG, in which
      HSTG is holding 85% of share equity. For Hangfa is under the common control with the Company,
      it is regarded as related legal person according to Article 10.1.3 (II) – “Entity or other
      organizations directly or indirectly controlled by aforesaid legal entity other than the PLC and its
      holding subsidiaries;” of the Share Listing Rules of Shenzhen Stock Exchange. Therefore it is
      recognized as the related entity of the Company. This is a related transaction.
           4. Description of related transactions and their necessity
      The major related transactions with Hangzhou Hangfa Generator Equipment Co., Ltd. were
      purchasing of steam turbine generators. It was to satisfy the demand of customers. Some
      customers require the Company to provide generators along with the steam turbines. Hangfa has
      been providing products to the Company since long before it was given to HSTG.

      (III) Hangzhou Steam Turbine Automobile Sales & Service Co., Ltd.

      1. Profiles
      (1) Date of incorporation: September 2, 1998
      (2) Registered address: No. 357 Shiqiao Road Hangzhou City
      (3) Office address: No. 357 Shiqiao Road Hangzhou City
      (4) Enterprise property: State-participated limited company
      (5) Legal representative: Yang Yongming
      (6) Registered capital: RMB5 million

       (7) Business scope: Service: Maintenance (one type of motor vehicle maintenance: large and

      medium-sized bus maintenance, large and medium-sized truck maintenance, small vehicle

      maintenance) (only within the validity period); Wholesale, retail: commercial vehicles and more
            than nine passenger cars, auto parts, Metal materials, building materials, decorative materials,

            general machinery, electrical machinery and equipment; import and export of goods (except as

            prohibited by laws and administrative regulations, projects subject to laws and administrative

            regulations may obtain business licenses before they can engage in business activities); services:

            at sea, Aviation and land international freight forwarding; warehousing services (except dangerous

            goods); including the business scope of subordinate branches; other legal items that do not need to

            be approved.


            (8) The controlling shareholder: Hangzhou Steam Turbine Power Group Co., Ltd.

            2. Recent financial information
                                                                                                In RMB

       Periods                  Turnover               Net profit           Gross Assets            Net asset

Year 2018                        148,680,813.73          6,559,482.23           67,312,718.92        35,481,905.27

Year 2019                        193,175,037.68          7,855,350.44           68,092,635.79        40,837,255.71

            3. Relationship with the Company
            Hangzhou Steam Turbine Automobile Sales Co., Ltd. is a holding subsidiary of HSTG, in which
            HSTG is holding 30% of share equity. For it is under the common control with the Company, it is
            regarded as related legal person according to Artic le 10.1.3 (II) – “Entity or other organizations
            directly or indirectly controlled by aforesaid legal entity other than the PLC and its holding
            subsidiaries;” of the Share Listing Rules of Shenzhen Stock Exchange. Therefore it is recognized
            as the related entity of the Company, and this is a related transaction.
            4. Description of related transactions and their necessity
            Related transactions with Hangzhou Steam Turbine Automobile Sales & Service Co., Ltd. are
            mainly cargo transportation, international cargo agency, employee transportation, and vehicle
            repairing services.The Company does not have transportation divis ion, therefore accepting of
            these services are necessary.

            (IV) Hangzhou Steam Turbine Engineering Co., Ltd.

            1. Profiles
            (1) Date of incorporation: September 30, 2011
            (2) Registered address: 18 Street No. 22, Technical Development Zone, Hangzhou
            (3) Office address: 18 Street No. 22, Technical Development Zone, Hangzhou
             (4) Enterprise property: State-controlled company limited
            (5) Legal representative: Ye Zhong
            (6) Registered capital: RMB200 million.
            (7) Main business scope: general contracting of power supply projects; design and installation of:
            electro-mechanical equipment, mid-small scale thermal power plant, energy saving technical
     reconstruction and services, technical consultancy; import and export of goods; whole selling of:
     packaged equipment, metal material, electronic installations, wires, cables, instruments,
     fire-resistance materials. (as stipulated by the authority)
     (8) The controlling shareholder: Hangzhou Steam Turbine Power Group Co., Ltd.
     2. Recent financial information

                                                                                                              In RMB
 Periods                   Turnover                 Net profit                Gross Assets                Net asset

Year 2018                   160,354,629.95           -41,121,132.98             783,600,830.93               31,855,483.34

Year 2019                   156,530,024.50           -26,872,716.56             719,222,348.84                4,982,766.78

     3. Relationship with the Company

     Hangzhou Steam Turbine Engineering Co., Ltd. is a holding subsidiary of HSTG, in which HSTG

     is holding 74.275% of share equity. For it is under the common control with the Company, it is

     regarded as related legal person according to Artic le 10.1.3 (II) – “Entity or other organizations

     directly or indirectly controlled by aforesaid legal entity other than the PLC and its holding

     subsidiaries;” of the Share Listing Rules of Shenzhen Stock Exchange. Therefore it is recognized

     as the related entity of the Company, and this is a related transaction.

     4. Description of related transactions and their necessity

     To satisfy the needs of business operation of both parties, sales of steam turbines to Hangzhou

     Steam Turbine Engineering Co., Ltd. is a support to the Company’s shares force.

     (V)(India) greenesol power equipment private Co., Ltd.
            1.Profiles:
            (1)Date of incorporation:October 19,2005
            (2)Registered address:Bangalore, India
            (3)Registered capital:USD 2.20 million
            (4)Main business scope:Turbine engaged in power generation equipment supply, installation
             and commissioning.
            (5)The main shareholder : Hangzhou Steam Turbine Co.,Ltd: 35.62%; the foreign
             shareholders: 64.38%.

     2. Recent financial information

                                                                                                       In Indian rupee
           Periods                      Turnover                 Net profit             Gross Assets              Net asset

M arch 2018-M arch-2019                      1,210,851,831            37,356,892             1,398,531,811            591,454,852
M arch 2019-December 2019                 876,448,259                13,222,877           1,301,064,368          617,469,098

      3. Relationship with the Company

      As the senior management of the company acts as director of that company and conforms to the

      10.1.5 clause of Listing Rules of Shenzhen Stock Exchange-"a natural person associated with a

      listed company directly or indirectly controls, or is a director or senior manager, a legal person or

      other organization other than a listed company and its controlling subsidiary", is an associated

      legal person of a listed company.

      4. Description of related transactions and their necessity The Company’s related party transaction

      with (India) greenesol power equipment private Co., Ltd. is mainly related to the purchase of raw

      materials and the sales of products or commodity.

      (VI) China mechanical and Electrical Institute -HSTG (Hangzhou) United Institutes Co.,

      Ltd.
      1. Profiles:

      (1) Date of incorporation: October 22,2008
      (2) Registered address: Room 1501, No.68-1 Qingchun East Road,Jianggan District,Hangzhou
      City
      (3) Office address: No.68-1 Qingchun East Road,Jianggan District,Hangzhou City
      (4) Type of enterprise: State-owned limited company
      (5) Legal representative: Kong Jianqiang
      (6) Registered capital: RMB1 million

      (7) Main business scope: Services: Technology development, consulting, service and transfer of
      products, new materials, new products, new technology, new equipment, technology development,
      consulting, services and transfer of benefits, electronic computers and automation, environmental
      protection products and resource utilization products. (Including pre-approval projects); wholesale
      and retail: mechanical and electrical equipment and spare parts, metal materials, monitoring
      equipment and other non-cultural training, The import and export of goods, the import and export
      of goods, the import and export of goods (except for projects prohibited by laws and
      administrative regulations, except when the items subject to legal and administrative regulations
      are restricted); the business scope of the subordinate branches; Law project.

      (8) The main shareholder: Hangzhou Steam Turbine Power Group Co., Ltd.
      2. Recent financial information
                                                                                                     In RMB

     Periods                 Turnover                   Net profit                Gross Assets            Net asset

    Year 2018                    1,471,664.28                104,594.32               2,276,228.40            1,483,010.65
Year 2019                       585,468.59                47,743.78             2,286,216.43           1,230,754.43

  3. Relationship with the Company
  Hangzhou steam turbine group holds 50% stake in China mechanical and Electrical Institute -HSTG
  (Hangzhou) United Institutes Co., Ltd ,For Compressor Company is under the common control with the
  Company, it is regarded as related legal person according to Article 10.1.3 (II) – “Entity or other
  organizations directly or indirectly controlled by aforesaid legal entity other than the PLC and its
  holding subsidiaries;” of the Share Listing Rules of Shenzhen Stock Exchange. Therefore it is
  recognized as the related entity of the Company. This is a related transaction.
  4. Description of related transactions and their necessity
  Related transactions with China mechanical and Electrical Institute -HSTG (Hangzhou) United Institutes Co.,
  Ltd . were mainly purchasing of raw material.

  III. Analysis of the contract-performance ability of related parties
       The above related parties have formed a stable and efficient business operation mode in the
  long-term business cooperation relationship with the company since the company was listed,
  having strong contract-performance ability. The board of directors reckoned that the above all
  related parties can fulfill the contract and carry out the related business with the company.


  IV. The purpose of related transactions and the impact on the listed company
  1. The impact of related party transactions on the company
      Due to the need to produce and sell the company's products, the company sells some of its
      products to the related party and entrusts the related party to sell the company's products,
      accepting the related party service of transportation and packing related to the company's
      products in the course of sales, and the related party transaction optimizes the allocation of
      production resources, effectively improves the efficiency of the company's production and
      operation and is conducive to the main business of the company. The price of related party
      transactions between the company and the related party is fair and, the transaction does not
      harm the interests of the company.
      2. The procedural legality of the related party transaction
       The company has a pricing mechanism of related party transaction for daily related party
  transactions. All the related transactions are examined by the board of directors of the company in
  accordance with relevant regulations and are submitted to the shareholders' general meeting of the
  company for consideration in accordance with the standards. In the course of deliberation, the
  associated directors and associated shareholders withdraw from the voting, so the procedure is
  legal.
  3.Pricing basis of related party transaction
  Where the company and its holding subsidiaries carry out the above related party transaction, the
  price of related transaction is determined according to the market price and follows the principles
of fairness, voluntariness and consensus in the pricing process.

V. The Consent of independent directors in advance and their opinions

The Consent of independent directors in advance:The Company’ Proposal to Confirming

Occurrence of Daily Related Transactions of 2019 and the Estimated Amount of Related
Transactions of the Company of 2020, Strictly performing the examination and approval
procedures belongs to the normal business needs of the company and will not affect the
independence of the company. The transaction price follows the fair and reasonable pricing
principle. The above-mentioned daily related transactions are in the interest of the company and
all shareholders. There is no harm to the interests of the company's small and medium
shareholders. We recognize the above related contents of the daily connected transactions and
agree to submit the proposal to the company's board of directors for review.
The Independent Directors' Opinion:The total amount of related transactions actually incurred by
the Company and its related parties in 2019 was 353.9915 million yuan (unaudited), accounting
for 5.51% of the company's latest audited net assets, which shall be submitted to the shareholders'
general meeting for reviewing.Although the actual amount incurred in 2019 exceeded the
estimated amount for the current year, the excess only accounted for 0.357% of the company's
audited net assets in the latest period, and there was no need to perform relevant review
procedures and disclosure obligations. The related transactions of the company in relation to daily
operations are in line with the company's actual production and operation conditions and future
development needs. The transaction is priced according to market principles, fair and reasonable,
and does not harm the interests of the company and small and medium shareholders, and is
conducive to the company's continued steady development.

This announcement is hereby made.



The Board of Directors of Hangzhou Steam Turbine Co., Ltd.
     March 12, 2020