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
