Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Stock Code: 200771 Stock ID: Hangqilun B Announcement No.: 2022-18
Hangzhou Steam Turbine Co., Ltd.
2021 Annual Report
（Stock Code: 200771）
March 2022
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
I. Important Notice , Table of Contents, and Definitions
The Board of Directors, The Supervisory Committee, the supervisors 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.
Chairman Mr. Zheng Bin, Chief Financial Officer Zhao Jiamao, and the Chief of Accounting Department Mr.Jin
Can hereby declare: the Financial Statement in the report is guaranteed to be truthful and complete.
All of the directors attended the board meeting on which this report was examined.
This Report contains prospective descriptions, which doesn’t constitute substantial commitment to investors.
Investors are requested to be aware of the risks attached to their investment decisions. For the risks existing in the
Company's operation, please refer to the section "Prospects for the future development of the Company" in Section
III "Management Discussion & Analysis".
The company's designated information disclosure media are: Shanghai Securities News (Chinese), Securities
Times (Chinese), Hong Kong Commercial Daily (English), http://www.cninfo.com.cn (In English and Chinese),
all information of the company is subject to the information published in the above selected media. Investors are
advised to pay attention to investment risks.
The profit distribution proposal reviewed and approved by the boarding meeting was summarized as follows: In
2021, with the total share capital of 754,010,400 shares at the end of the year deducting 111,800 treasury shares
repurchased as of date of record by Company, that is, 753,898,600 shares, the Company would distribute cash
dividend to all the shareholders at the rate of CNY 4.0 for every 10 shares（including tax）, 3 bonus shares
（including tax），and no reserve would be converted into share capital.
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Table of Contents
I.Important Notice, Table of contents and Definitions
II. Basic Information of the Company and Financial index
III. Management Discussion & Analysis
IV. Corporate Governance
V. Environmental & Social Responsibility
VI. Important Events
VII. Change of share capital and shareholding of Principal Shareholders
VIII. Situation of the Preferred Shares
IX. Corporate Bond
X. Financial Report
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Documents available for inspection
(I) Financial Statements signed and sealed by the Chairman of the Board , chief accountant and director of
the financial division.
(II) All the originals of the Company’s documents and public notices disclosed in the newspapers
designated by China Securities Regulatory Commission in the report period;
(III) Original copy of Resolutions of the Meeting of Board.
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Definition
Terms to be defined Refers to Definition
Company, the Company Refers to Hangzhou Steam Turbine Co., Ltd.
The Group, Hangqi Group Refers to Hangzhou Steam Turbine Power Group Co., Ltd.
State-owned Assets Supervision and Administration Commission of
Hangzhou SASAC Refers to
Hangzhou Municipal People's Government
Hangzhou Capital Refers to Hangzhou State-owned Capital Investment and Operation Co., Ltd.
The report period, the current period, the
Refers to January 1,2021-December 31,2021
current year
Hangzhou Zhongneng Steam Turbine Power Co., Ltd. – the holding
Zhongneng Co. Refers to
subsidiary of the Company
Casting Co. Refers to Hangzhou Steam Turbine Casting Co., Ltd.
Packaged Tech. Co. Refers to Zhejiang Steam Turbine Packaged Technology Development Co., Ltd.
Machinery Co. Refers to Hangzhou Steam Turbine Machinery Equipment Co., Ltd.
Auxiliary Machine Co. Refers to Hangzhou Steam Turbine Auxiliary Machinery Co., Ltd.
Turbine Co. Refers to Zhejiang Turbine Import & Export Co., Ltd.
Heavy Industry Co. Refers to Hangzhou Steam Turbine Heavy Industry Co., Ltd.
Zhongrun Company Refers to Zhejiang Zhongrun Gas Turbine technology Co., Ltd.
New Energy Company Refers to Hangzhou Steam Turbine New Energy Co., Ltd.
Sales Company Refers to Hangzhou Steam Turbine Automobile Sales Service Co., Ltd.
China mechanical and Electrical Institute -HSTG (Hangzhou) United
China Mechanical Institute Company Refers to
Institutes Co., Ltd
Ranchuang Company Refers to Zhejiang Ranchuang Turbine mechanical Co., Ltd.
The Board of Directors Refers to The Board of Directors of Hangzhou Steam Turbine Co., Ltd.
The Supervisory Committee Refers to The Supervisory Committee of Hangzhou Steam Turbine Co., Ltd.
The Shareholders’ Meeting Refers to The Board of Directors of Hangzhou Steam Turbine Co., Ltd.
RMB, RMB0’000, RMB000’000’000 Refers to RMB Yuan, RMB10 thousand Yuan, RMB100 million Yuan
MW Refers to Unit of power: 1000KW
PLM Refers to Product life circle management information system
MES Refers to Manufacturing execution system
ERP Refers to Enterprise Resources Planning
WMS Refers to Warehouse management system
CRM Refers to customer relationship management
SRM Refers to Supplier relationship management
CNAS Refers to China National Accreditation Service For Conformlty Assessment
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
II. Basic Information of the Company and Financial index
I. Basic Information
Stock ID Hangqilun B Stock Code 200771
Stock Exchange Listed Shenzhen Stock Exchange
Company Name in Chinese 杭州汽轮机股份有限公司
Short form of Company Name
杭汽轮
in Chinese
Name in English HANGZHOU STEAM TURBINE CO.,LTD
Abbreviation in English HTC
Legal representative: Zheng Bin
Building 1, No.608, Kangxin Road, Economic & Technological Development Zone, Yuhang
Reg. Add.
District, Hangzhou City, Zhejiang
Post Code 311106
May 2021, The registered address of the company has been changed from No.357, Shiqiao Road,
Historical change of the
Hangzhou city, Zhejiang Province to Building 1, No.608, Kangxin Road, Economic and
company's registered address
Technological Development Zone, Yuhang District, Hangzhou City, Zhejiang
Office address No.1188, Dongxin Road, Hangzhou , Zhejiang
Post code of the office address 310022
Internet Web Site www.htc.cn
E-mail lgw@htc.cn
II. Contact person and contact manner
Board secretary Securities affairs Representative
Name Li Guiwen Li Xiaoyang
No.1188, Dongxin Road, Hangzhou , No.1188, Dongxin Road, Hangzhou ,
Address
Zhejiang Zhejiang
Tel. 0571-85780058 0571-85780438
Fax. 0571-85780433 0571-85780433
Email. lgw@htc.cn lixiaoyang@htc.cn
III. Place for information disclosure
Press media for information disclosure www.szse.cn
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Web address for the annual report as Securities Times, Shanghai Securities Daily, Hong Kong Commercial Daily and
assigned by CSRC. www.info.com.cn
The place where the Annual report is
Office of the Board of directors
prepared and placed
IV. Changes in Registration
Organization code 913300007042026204
The original scope of main businesses 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 providing of relevant after-sales service and import & export service.
In July 2008, the business scope was modified to: 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 providing
of relevant after-sales service; sales and import & export of power plant, industrial
driving, industrial turbine equipment and complete equipment. For those involve in
quota or licensing shall follow legal procedures.
Change of main business since listed In March 2009, the business scope was modified to: 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 providing of relevant after-sales service; sales and import & export of power plant,
industrial driving, industrial turbine equipment and complete equipment.
In December 2016, the business scope was modified to: 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 providing of relevant after-sales service; sales and import & export of power plant,
industrial driving, industrial turbine equipment ,complete equipment and Energy
conservation and environmental protection projects.
Hangzhou Steam Turbine Power Group Co., Ltd. is the controlling shareholder of the
Company, and the actual controller of the Company is the State-owned Assets
Supervision and Administration Commission of Hangzhou Municipal People's
Government. On December 2020, Hangzhou SASAC transferred 90% of the shares of
Change of holding shareholder (if any)
Hangzhou Steam Turbine Group held by itself to its wholly-owned company Hangzhou
State-owned Capital Investment and Operation Co., Ltd., thus Hangzhou Capital
became the indirect controlling shareholder of the company, and neither the direct
controlling shareholder nor the actual controller of the company changed.
V. Miscellaneous information
CPA hired by the Company
Name of the CPA Pan-China Certified Public Accountants (Special general partnership)
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Address of the CPA B Unit, Huarun Building, No.1366, Qianjiang Road, Jianggan District Hangzhou
Name of CPA signed on the
Sheng Weiming, Ye Xianbin
auditors’ report
The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.
□ Applicable √Not applicable
The Financial advisor performing persist ant supervision duties engaged by the Company in the reporting period
□ Applicable √Not applicable
VI.Summary of Accounting data and Financial index
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
√Yes □No
Retroactive adjustment or restatement of causes
Merger of enterprises under the same control
Changed over
2020 2019
last year（％）
2021
After
Before adjustment After adjustment Before adjustment After adjustment
adjustment
Operating revenue
5,788,288,588.91 4,496,445,244.55 4,762,315,089.10 21.54% 4,279,848,518.81 4,651,946,726.63
（Yuan）
Net profit attributable
to the shareholders of
649,992,474.56 459,345,443.38 476,268,110.63 36.48% 345,138,064.00 337,347,736.45
the listed company
（Yuan）
Net profit after
deducting of
non-recurring 14.87%
428,122,980.65 372,697,902.88 372,697,902.88 302,012,173.45 302,012,173.45
gain/loss attributable
to the shareholders of
listed company（Yuan）
Cash flow generated
by business operation, 71,809,489.02 454,416,600.69 628,885,775.12 -88.58% 432,255,831.23 478,743,410.42
net（Yuan）
Basic earning per
0.88 0.62 0.64 37.50% 0.46 0.45
share(Yuan/Share)
Diluted gains per
0.88 0.62 0.64 37.50% 0.46 0.45
share(Yuan/Share)
Net asset earning ratio
8.01% 6.24% 6.43% 1.58% 5.48% 5.31%
（%）
End of 2021 End of 2020 Changed over End of 2019
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
last year（％）
After
Before adjustment After adjustment Before adjustment After adjustment
adjustment
Gross assets（Yuan） 16,319,667,628.76 15,392,653,924.41 16,375,832,611.51 -0.34% 12,600,115,579.96 13,809,675,082.80
Net assets attributable
to shareholders of the 7,927,485,773.65 8,104,788,941.36 8,163,905,778.62 -2.90% 6,607,496,148.58 6,651,190,318.58
listed company（Yuan）
The lower of the company’s net profit before and after the deduction of non-recurring gains and losses in the last
three fiscal years is negative, and the auditor's report of the previous year shows that the Company’s going
concern ability is uncertain.
□ Yes √No
The lower of the net profit before and after the deduction of the non-recurring gains and losses is negative.
□ Yes √No
VII. The differences between domestic and international accounting standards
1. Differences between the net profit and net asset in the financial reports prepared under IAS and Chinese
Accounting Standard
□ Applicable √Not applicable
No difference in the reporting period.
2. Differences between the net profit and net asset in the financial reports prepared under IAS and Chinese
Accounting Standard
□ Applicable √Not applicable
No difference in the reporting period.
VIII. Main Financial Index by Quarters
In RMB
First quarter Second quarter Third quarter Fourth quarter
Operating revenue 1,181,683,010.42 1,784,337,440.65 1,114,367,481.21 1,707,900,656.63
Net profit attributable to the 72,625,454.70
shareholders of the listed 161,578,759.88 264,062,657.07 151,725,602.91
company
Net profit after deducting of 26,138,266.98
non-recurring gain/loss
54,440,724.84 204,072,408.44 143,471,580.39
attributable to the shareholders of
listed company
Net Cash flow generated by 206,249,050.18
157,547,348.48 19,533,664.23 -311,520,573.87
business operation
Any material difference between the financial indicators above or their summations and those which have been
disclosed in quarterly or semi-annual reports?
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
□ Yes √ No
IX. Items and amount of non-current gains and losses
√ Applicable □ Not applicable
In RMB
Amount
Items Amount (2021) Amount (2020) Notes
(2019)
It is mainly the
delivery loss of
relocated assets
Non-current asset disposal gain/loss(including the write-off part for due to the
-77,159,058.06 -20,964,286.32 -12,341,200.47
which assets impairment provision is made) relocation and
transfer of real
estate and land
in this period.
It is mainly the
net government
subsidies
recognized by
Governmental Subsidy accounted as current gain/loss, except for
the Company
those subsidies at with amount or quantity fixed by the national 129,850,767.59 38,013,637.22 44,701,311.40
for relocation
government and closely related to the Company’s business operation.
compensation
in the Shiqiao
Road factory
area.
Income from the exceeding part between investment cost of the
Company paid for obtaining subsidiaries, associates and
1,149,217.06
joint-ventures and recognizable net assets fair value attributable to the
Company when acquiring the investment
Debt restructuring profit or loss 1,617,382.00 3,350,920.00 -508,672.84
Net gain and loss of the subsidiary under the common control and
produced from enterprise consolidation from the beginning of the -29,001,203.15 27,026,646.93 -4,054,604.10
period to the consolidation date
Gain and loss arising from contingent matters irrelevant with the
32,202,504.57 -32,202,504.57
Company’s normal operation business
Gain and loss from change of the fair value arising from transactional It is mainly the
monetary assets, transactional financial liabilities as held as well as income of
the investment income arising from disposal of the transactional 75,295,281.43 53,211,692.31 74,013,529.88 main bank
monetary assets, transactional financial liabilities and financial assets wealth
available for sale excluding the effective hedging transaction in management
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
connection with the Company’s normal business products and
the net income
from the sale
of convertible
bonds of
Hangzhou
Bank.
Reverse of the provision for impairment of accounts receivable
3,600,000.00
undergoing impairment test individually
It is mainly due
to the
compensation
paid by
Sinosteel
Operating income and expenses other than the aforesaid items 123,214,403.44 -2,606,122.77 6,335,775.38
Equipment
Co., Ltd.
received by
Turbine
Company.
Other non-operating income and expenditure beside for the above
items
Less: Influenced amount of income tax 13,388,887.75 12,239,646.17 17,931,245.32
Amount of influence of minority interests（After tax） -7,840,808.41 15,574,355.08 22,676,826.36
Total 221,869,493.91 103,570,207.75 35,335,563.00 --
Details of other profit and loss items that meet the non-recurring profit and loss definition
□ Applicable√ Not applicable
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on
information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and
its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure
for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as
recurring gains and losses, it is necessary to explain the reason.
□ Applicable√ Not applicable
None of Non-recurring gain /loss items recorgnized as recurring gain /loss/items as defined by the information
disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period.
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
III. Management Discussion & Analysis
I. Industry information of the Company during the reporting period
2021 is the first year of the 14th Five-Year Plan, during which China's economy was gradually recovering and
growing steadily under the background of the continuous influence of the global epidemic and the increasingly
complicated international environment. The gross domestic product (GDP) increased by 8.1% over the previous
year, with an average growth rate of 5.1% in two years, ranking among the top economies in the world; The
economy reached RMB 114.4 trillion, ranking second in the world.
In terms of the main segments of the Company's products, in 2021, under the influence of the "dual control of
total energy consumption and intensity" policy, the price of energy products was increasing, the oil and chemical
industries generally recovered, and the economic performance of the whole industry exceeded expectations.
According to the data released by China Petroleum and Chemical Industry Federation, in 2021, the industrial added
value of enterprises above designated size in the whole industry increased by 5.3% year-on-year, of which the
accumulated revenue and profits of the oil refining industry were RMB 4.4 trillion and RMB 187.4 billion, up by
30.1% and 318.2% year-on-year, respectively; The accumulated revenues and profits of the chemical industry were
RMB 8.7 trillion and RMB 793.22 billion, respectively, up by 31.1% and 85.4% year-on-year, creating a record high.
In the chemical industry, except for coal chemical industry, all other sub-sectors were profitable. According to the
National Bureau of Statistics, in 2021, China's crude oil processing capacity reached 703 million tons, up 4.3%
year-on-year; The output of refined oil was 357 million tons, up 7.9% year on year. During the reporting period, the
investment in new projects in petrochemical industry decreased, but the large-scale integrated refining and chemical
projects were still in the growth stage, and the industry was progressing towards large-scale, integration, clustering
and large-scale development pattern. The coal chemical industry was gradually eliminated the industrial chain with
high energy consumption, and the market demand of traditional coal chemical equipment was shrinking. The new
coal chemical industry advocated the development in the direction of high-end, green, intelligent and integrated, and
strove to build a clean, low-carbon, safe and efficient energy system. However, under the control of the domestic
"double carbon" goal and "two-high" policy, new projects were strictly approved, with difficulty to continuously
expand production capacity.
In 2021, the power industry was running smoothly, and the annual power consumption growth rate achieved a
double-digit growth, with the power generation exceeding 8 trillion kWh. The installed power structure continued
its green and low-carbon development trend, and the power investment continued to increase. In 2021, the installed
power generation capacity in China was about 2.38 billion kilowatts, up by 7.9% year-on-year, including, 391
million kilowatts for hydropower, 328 million kilowatts for wind power, 306 million kilowatts for photovoltaic
power, and 37.98 million kilowatts for biomass, up by 5.6%, 16.6%, 20.9% and 28.7% respectively. During the
reporting period, with the promotion of the national "double carbon" policy and the implementation of targeted
policy details in each province in the second half of the year, the power industry continued to increase its efforts to
eliminate backward production capacity, encourage regional central heating and promote energy conservation and
consumption reduction.
In 2021, China entered the critical period and window period to realize the goal of double carbon. The Central
Committee of the Communist Party of China and the State Council issued the Opinions on Fully, Accurately and
Comprehensively Implementing the New Development Concept to Well Ensure Emission Peak and Carbon
Neutralization Goals, and the State Council issued the Peak Emission Action Plan by 2030, which together
constitute the top-level design that runs through the two stages of peak emission and carbon neutrality. The
promulgation of a series of policies will accelerate the pace of China's energy structure adjustment and scientific and
technological innovation, and force high-energy consumption industries to deeply study low-carbon ways and
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
promote industrial transformation.
II. Main Business the Company is Engaged in During the Report Period
As the leading provider of turbo machinery equipment and relevant service in China, our company is mainly
famous for designing and producing rotating turbo machinery like industrial steam turbines and gas turbines. Our
company, one of the major companies drafting the industrial standard in Chinese domestic industry of industrial
steam turbine, has developed into the biggest base to research, develop and produce industrial steam turbines in
China and ranks first among industrial steam turbine producers in terms of the market occupancy. Holding the
principle “our products should be based on clients’ demands” as our business mode and characteristic, our
company designs and produces in accordance with every client’s personal demands so as to meet personalized
needs in engineering projects to the utmost. To realize the fast research and development of our products, our
company has adopted the advanced modular design technique and, on the other hand, introduces information
technique to assist the collaborative production to achieve the resource saving and flexible production. In addition,
our company also provides our clients with relevant service such as engineering programs, general engineering
contracting, operation and maintenance of our products as well as remote control and so on.
Industrial steam turbines use the steam featuring high temperature and high pressure as their working medium so
as to convert the thermal energy into mechanical energy to drive various industrial equipments through the
rotating steam turbines. As for different objects driven by industrial steam turbines, the steam turbines could be
divided into industrial driving steam turbines and industrial power-generation steam turbines. Mainly driving
rotating machines like compressors, air blowers, pumps and squeezers, industrial driving steam turbines, as the
core power part in numerous large-scale industrial equipments, are always introduced into some industries like oil
refining, chemical engineering, chemical fertilizer, building materials, metallurgy, electric power, light industry
and environmental production. The industrial power-generation steam turbines, mainly utilized to drive electric
generators and provide thermal energy, are mainly adopted in private stations, regional projects of combined heat
and power generation, power generation by recycling waste heat in industrial production, urban waster power
plants and gas-steam combined cycle power stations in various industrial sectors. The gas turbines produced by
our company are mainly used by metallurgical industry to recycle the waste heat from the blast furnace exhaust to
generate power.
In the gas turbine business, the company cooperated with Siemens Energy on SGT-800, an advanced natural gas
turbine with high efficiency, high reliability and low emission, to enter the field of natural gas distributed energy,
with its models gradually expanded to SGT-300, SGT-700 and SGT-2000E. As the general supplier of Siemens
gas turbine in China, the company has carried out gas turbine business from two aspects of project procurement
and integrated implementation, and has the ability of selecting combined cycle projects for distributed energy, has
established the complete system supporting standards and material systems, and can complete the independent
processing and supporting work of equipment other than the gas turbine itself. In the industrial fields including the
cogeneration /combined cycle power plant and the oil & gas project with distributed energy projects that adopt the
small and medium gas turbines, the Company not only can provide gas turbine equipment for customers, but also
can provide customers with complete sets of equipment for gas turbine power plant and the efficient integrated
solutions. Especially, it can provide customers with operational support services throughout the product life, and
this service model is conductive for the establishment of long-term business cooperation relationships between the
company and its customers.
As the major producer of industrial equipments in China, our company is mainly benefited from the
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
following factors in terms of the elements driving our business performance:
1. On the basis of market demands. The relevant market demands fluctuate differently due to various business
condition and investment cycles in different industrial fields. The company further made more specified positions
toward the market for the products, implemented the differentiated marketing strategy, and integrated the business
sectors and tapped into the potential, According to different customers' needs, it has further consolidated the
original market position and broadened the market share in new fields through precise matching and precise
policies.
2. Innovation and further reform in difficult areas of product technology：Our company continuously improves
product technical performance and tackles hard issues in the scientific researches of product structure, core parts,
basic design, manufacturing technology, material technology, etc. In addition, basing on clients’ demands, To push
forward the intelligence of our products and the development of the integration technology. Meantime, the
company cooperated with universities, scientific research institutes to build the technological exchange and
cooperation platform.
3. Upgrading of industrial structure transformation：The company jointed with Siemens to enter the distributed
energy market and enhance the development and utilization of natural gas distributed energy. In the industrial
fields including the cogeneration /combined cycle power plant and the oil & gas project with distributed energy
projects that adopt the small and medium gas turbines, the Company not only can provide gas turbine equipment
for customers, but also can provide customers with complete sets of equipment for gas turbine power plant and the
efficient integrated solutions.
4. Brand and market position：The company’s products have a good reputation and extensive brand influence in
the domestic market, The company has maintained a leading market share in the domestic industrial drive. The
company's products have a high reputation and brand influence in the domestic market.
5.Cost controlling level：As domestic labor costs continue to rise and the price of industrial products continue
to decline, the product profitability is facing a severe test. In recent years, the company continuously improves
the level of costs controlling by improving the organizational structure, optimizing business processes, enhancing
the supply chain controlling, strengthening risk management, raising the efficiency of all the staff and so on.
6.Emphasis on quality engineering and services: promote the key project management, meticulously plan key
projects, implement dynamic quality supervision; attach importance to products’ after-sales service market,
integrate existing resources to increase after-sales service initiative, extend product value chain, and promote the
company’s transformation from manufacturing to service.
III. Analysis On core Competitiveness
Firstly. A complete technical innovation system was established. The Company has under its possession of
national, provincial, and municipal grade technical centers, a doctorial workstation, and an academician
workstation. Close co-operations were carried out with institutions and universities from throughout the country.
As the main drafter of national standard on industrial steam turbine, the Company has the newest technical trend
under its close observation. The Company is now providing nearly 600 different models of steam turbines to the
customers and hold the newest technical system covering the product lines up to 150 MW.Cooperating with
Siemens Energy in the field of gas turbine, our company has been capable of selecting the model of the
combined recycling project of distributed energy. In addition, our company has also been able to finish the
independent processing or supporting work which doesn’t need to depend on the gas turbine machine.
Secondly .The advantages of solutions. The modular design of industrial steam turbine and the production pattern
featuring parallelization production enable our company to give considerations to the cost, date of delivery and
clients’ demands in the process of production in accordance with clients’ personalized designs, thereby making
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
our company capable of advancing with the development trend of individual requirements. Our company has
always been devoting to the localization in terms of the gas turbine business so as to achieve the localized
one-stop service step by step including the sale, production, installation, debugging, operation, training and
after-sale service. Our company has always been striving to provide clients with the complete equipment of gas
turbine power station and the efficient total solutions.
Thirdly, the Company has established strategic co-operations with main customers in the country. Further
marketing approaches were carried on by involving itself in the customers’ value. A sound and steady image has
been set up in the domestic steam turbine market. In the global market, the Company has acquired multiple
important certifications and has established a primary global recognition.
Fourthly, the Company has its complete service providing system. The Company is not only capable to provide
onsite 24-hour service for the Company’s own products, but also accumulated rich experiences in technical
maintenance and reengineering of other manufacturers’ products.
Fifthly, the Company has cultivated a significant advantage in human resources. Great importance has been
attached to construction of work teams with collection of high-end workforce in the areas of research &
development, At the same time, our company values the cooperation with universities. “Zhejiang Technical
Association for Gas Turbines in Equipment Manufacturing Industry” was officially founded jointly by our
company and Zhejiang University and other scientific research institutions to build a new platform for
integration of production and research in terms of gas turbine technology. The Company has cultivated a
significant advantage in human resources. Great importance has been attached to construction of work teams
with collection of high-end workforce in the areas of research & development, designing, technique, testing, and
quality control. An excellent workforce provides a sound foundation to lift quality and services.
IV. Main business analysis
(1)General
During the reporting period, the Company focused on the annual work policy of "digital empowerment,
transformation and upgrading, strengthening enterprises with talents and high-quality development", while
continuously ensuring epidemic prevention and control, it steadily increased the production capacity of the
manufacturing base, and fully guaranteed the contract delivery; solidly promoted technology research and
development, and made fine products with craftsman spirit; explored the construction of key customer marketing
management system and consolidated the market competitive advantage; promoted the "14th Five-Year Plan" and
started the road of transformation, upgrading and high-quality development.
In 2021, the annual operating income was RMB 5,788,288,600, the total profit was RMB 832,547,500 and
the net profit was RMB 727,247,800, of which the net profit attributable to shareholders of listed companies was
RMB 649,992,500. Compared with the same period of last year, the operating income increased by 21.54%, the
total profit increased by 25.93%, the net profit increased by 25.49% and the net profit attributable to shareholders
of listed companies increased by 36.48%. Under the macro background of "double carbon" policy and slowing
economic growth, the operating data increased against the trend, and the 14th Five-Year Plan achieved a favorable
start.
1. Focus on market
During the reporting period, in the face of the severe market situation and fierce competition pattern under
15
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
the "double carbon" policy, the Company stabilized the industry-driven market by strengthening "sales around the
front" and deepening the plate linkage mechanism. Its typical projects included 7 sets of units in Ningxia Baofeng
Phase III coal-to-methanol project, caprolactam project of Sinopec Baling Petrochemical Company and the oil
refining to chemical supporting project of Sinopec Anqing Petrochemical. By seizing the investment opportunity
of thermal power generation, it strove to compete for the industrial power generation market, and the contract
undertaking in the power generation field increased compared with the same period of last year, and it was
successively awarded with the Smart Energy Center Project of Yiwu High-tech Zone of BR Energy, the 50MW
Back Pressure Power Generation Project of Jiahua Energy, the Low-voltage Waste Heat Power Generation Project
of Pengwei Petrochemical, etc. By accurately predicting the industry background of "refining control and chemical
increase", it found out the development direction of new material market and opened up new markets. It gained
gradual improvement in gas turbine market, and it successfully signed contract on Huadian Jiangdu Natural Gas
Distributed Energy Project, Haining Guangyao Natural Gas Distributed Energy Project and Asia Symbol Paper
Self-provided Power Station Project, etc.
2. Digital empowerment
During the reporting period, the Company continued to promote intelligent construction and digital
transformation of the enterprise, continuously optimized MES system to help refine production management,
promoted ERP construction in an all-round way, determined the ERP selection scheme according to the Company's
"tailor-made" single piece and small batch production characteristics, completed the blueprint of digital factory
construction in manufacturing base, completed the preliminary scheme of digital factory construction, put the
industrial internet platform and service management platform into trial operation, fully put the new OA system into
use, put the system flow and management platform online on a large scale, continuously optimized the rapid
collaborative development platform (BCP) with independent intellectual property rights, and deeply integrated with
OA to realize the integration of office flow and business flow.
3. Transformation and upgrading
During the reporting period, the implementation of the Company's "Key Account Management System Based
on Equipment Lifecycle Management" achieved a series of achievements, and it successively renewed the strategic
cooperation agreement with Shenyang Blower, signed the strategic and long-term cooperation agreement with
Hengli Petrochemical, further consolidated the relationship with various engineering general contracting companies,
preliminarily established the key account training system, and obtained good market feedback for the first round of
customer training. In order to realize the transition to service-oriented manufacturing and build the development
direction of "big service", during the reporting period, the Company completed the construction of "two-line"
service team, focusing on breaking through modules such as "O&M training, technical training, inspection and
diagnosis". It established Hangzhou Steam Turbine New Energy Co., Ltd., and set up the "Hangzhou Steam Turbine
and Siemens Energy Joint Technology Center" in cooperation with Siemens Energy, which marks its comprehensive
engagement in the field of distributed energy, thermoelectric transformation and new energy.
4. Strengthen enterprise with talents
During the reporting period, the Company promoted the implementation of the human resources promotion
project from three aspects: strengthening the human resources foundation, improving the efficiency of human
resources management and optimizing the human resources management mechanism. It gradually established a
performance-oriented talent evaluation model, strove to build a human resource management system based on value
creation, completed the evaluation work of eight "company-level skill master studios" such as "Leaf Installation
Skill Master Studio", and fully utilized the positive role of high-skilled talents in technological innovation, skill
inheritance and grass-roots management; successfully implemented the equity incentive plan, formulated
performance appraisal methods for the implementation of equity incentive targets, further established and improved
16
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
the long-term incentive mechanism, and attracted and retained outstanding talents.
5. High quality development
During the reporting period, the Company accelerated scientific research and achieved fruitful product
development. The Company emphasized product efficiency improvement, parameter improvement, technology
update and product development, and focused on difficult projects in the fields of large air separation, large ethylene,
subcritical, high back pressure and low-pressure waste heat utilization, etc., and accepted 29 key research projects
and completed the approval of 38 new product development and key research projects, including 15 new products,
creating a record high. The Company's two projects, namely "R&D and Application of Steam Turbine for Nuclear
Island Emergency Auxiliary Feed Water Pump" and "Low-quality Energy Efficient Utilization Technology and
Application", won the first prize of Zhejiang Machinery Industry Federation's 2021 Science and Technology Award;
"R&D and Application of Key Technologies for Efficient and Reliable Blades of Industrial Steam Turbines" won
the first prize of Provincial Scientific and Technological Progress; "The Last Blade of Low-pressure Stage Group of
Large-flow Air-cooled Steam Turbine" won the China Patent Excellence Award; "1.5 million tons/year Industrial
Steam Turbine for Driving Ethylene Plant" won the title of the First Set of International Equipment in Zhejiang
Manufacturing Industry. During the reporting period, the Company comprehensively promoted world-class
benchmarking in combination with management innovation, realized management improvement, and promoted the
decomposition and tracking of the strategic objectives of the 14th Five-Year Plan according to the requirements of
enterprise transformation and upgrading and high-quality development, so as to ensure the steady implementation
and optimization and improvement of the strategy.
(2) Revenue and cost
1. Component of Business Income
In RMB
2021 2020 Increase
Amount Proportion Amount Proportion /decrease
Total operating revenue 5,788,288,588.91 100% 4,762,315,089.10 100% 21.54%
On Industry
Boiler and power machine 5,310,076,826.69 91.74% 4,273,794,908.16 89.74% 24.25%
manufacture
Other 478,211,762.22 8.26% 488,520,180.94 10.26% -2.11%
On product
Industrial steam turbine 4,779,343,162.52 82.57% 3,857,031,725.18 80.99% 23.91%
and its accessories
Part 460,199,251.65 7.95% 361,838,901.92 7.60% 27.18%
Hydro-generator set 70,534,412.52 1.22% 54,924,281.06 1.15% 28.42%
Engineering service 149,654,313.59 2.59% 73,698,221.21 1.55% 103.06%
Other 328,557,448.63 5.67% 414,821,959.73 8.71% -20.80%
On Area
Domestic 5,542,046,290.01 95.75% 4,659,425,434.38 97.84% 18.94%
17
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Overseas 246,242,298.90 4.25% 102,889,654.72 2.16% 139.33%
Sub-sale model
Direct selling 5,788,288,588.91 100.00% 4,762,315,089.10 100.00% 21.54%
2.Situation of Industry, Product and District Occupying the Company’s Business Income and Operating Profit
with Profit over 10%
√ Applicable □ Not applicable
In RMB
Increase/decrease Increase/decrease Increase/decrease
of revenue in the of business cost of gross profit
Gross profit
Turnover Operation cost same period of over the same rate over the same
rate(%)
the previous period of period of the
year(%) previous year (%) previous year (%)
On Industry
Boiler and power 5,310,076,826.69 3,709,796,733.03 30.14% 24.25% 28.42% -2.27%
machine manufacture
On product
Industrial steam 4,779,343,162.52 3,369,080,526.65 29.51% 23.91% 27.90% -2.20%
turbine and its
accessories
On Area
Domestic 5,542,046,290.01 3,929,322,456.12 29.10% 18.94% 22.94% -2.31%
Sub-sale model
Direct selling 5,788,288,588.91 4,091,955,492.69 29.31% 21.54% 25.39% -2.17%
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main
business based on latest on year’s scope of period-end.
□ Applicable √ Not applicable
3.Whether the Company’s Physical Sales Income Exceeded Service Income
√ Yes □ No
Change over same
Business categories Items Unit 2021 2020
period last year
Sales Set/package 425 384 10.68%
Steam turbine Output Set/package 420 388 8.25%
Inventory Set/package 184 189 -2.65%
Sales Set/package 5 2 150.00%
Gas turbine,
Output Set/package 5 2 150.00%
compressor
Inventory Set/package 0 0
18
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Sales Set/package 7 4 75.00%
Compressor Output Set/package 8 4 100.00%
Inventory Set/package 8 7 14.29%
Sales Set/package 118 127 -7.09%
Electric generator Output Set/package 126 129 -2.33%
Inventory Set/package 73 65 12.31%
Reasons for y-o-y relevant data with over 30% changes
√ Applicable □ Not applicable
The gas turbine and compressor products have a small output and a low proportion in the total products of
our Company. Therefore, the slight change in the absolute production and sales and stock in the period caused a
large fluctuation in its relative increase and decrease.
4.Degree of Performance of the Significant Sales Contract Signed up to this Report Period
□Applicable √ Not applicable
5.Component of business cost
Products category
In RMB
2021 2020
Proportion in the Proportion in the Increase/Decrease
Products category Items
Amount operating costs Amount operating costs (%)
(%) (%)
Industrial steam ——
turbine and its 3,369,080,526.65 82.33% 2,634,136,189.72 80.72% 27.90%
accessories
Part —— 268,252,260.97 6.56% 204,409,114.97 6.26% 31.23%
Hydro-generator ——
72,463,945.41 1.77% 50,192,957.81 1.54% 44.37%
set
Engineering ——
144,392,125.53 3.53% 75,822,166.00 2.32% 90.44%
service
Other —— 237,766,634.13 5.81% 298,692,237.14 9.15% -20.40%
Subtotal 4,091,955,492.69 100.00% 3,263,252,665.64 100.00% 25.39%
Note:
After the company acquired the equity of related companies affiliated to Hangzhou Steam Turbine Group，the
relevant date are listed according to the same caliber data.t
6.Whether Changes Occurred in Consolidation Scope in the Report Period
√ Yes □ No
Please refer to Section VI(7) of this report for details. Explanation on the changes in the scope of the consolidated
19
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
statement compared with the financial report of the previous year.
7.Relevant Situation of Significant Changes or Adjustment of the Business, Product or Service in the Company’s
Report Period
□ Applicable √ Not applicable
8.Situation of Main Customers and Main Supplier
Information of Main sales customers
Total sales amount to top 5 customers (Yuan) 2,010,404,293.65
Proportion of sales to top 5 customers in the annual sales(%) 34.73%
Proportion of the sales volume to the top five customers in the total sales to the related
0.00%
parties in the year
Information of the Company’s top 5 sales customers
No Name Amount（RMB） Proportion
1 Customer 1 863,528,660.95 14.92%
2 Customer 2 535,852,774.32 9.26%
3 Customer 3 238,698,964.53 4.12%
4 Customer 4 204,182,300.88 3.53%
5 Customer 5 168,141,592.97 2.90%
Total -- 2,010,404,293.65 34.73%
Other notes
□ Applicable √ Not applicable
Principal suppliers
Total purchase of top 5 Suppliers（Yuan） 1,073,389,974.59
Percentage of total purchase of top 5 suppliers In total annual purchase(%) 20.72%
Proportion of purchase amount from the top 5 suppliers in the total purchase amount
0.00%
from the related parties in the year
Information about the top 5 suppliers
No Name Amount（RMB） Proportion
1 Supplier 1 565,892,014.16 10.92%
2 Supplier 2 198,224,188.50 3.83%
3 Supplier 3 187,109,004.60 3.61%
4 Supplier 4 65,850,671.04 1.27%
5 Supplier 5 56,314,096.29 1.09%
Total -- 1,073,389,974.59 20.72%
20
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Other notes
□ Applicable √ Not applicable
(3)Expenses
In RMB
Increase/Decrease(
2021 2020 Notes
%)
Sale expenses 202,868,557.82 234,574,261.47 -13.52% No major changes
Administration expenses It is mainly due to performance growth
and employee salary growth; In the
660,284,323.30 545,097,001.83 21.13%
same period last year, it is entitled to
social security relief due to "pandemic".
It is mainly due to the decrease of net
Financial expenses 9,748,924.22 49,179,344.24 -80.18%
exchange loss in the current period
It is mainly due to the increase of R&D
R & D cost 350,216,635.11 233,881,231.71 49.74%
investment in this period.
(4) Research and Development
√ Applicable □ Not applicable
Name of main Project Goal to be Expected impact on the future
Project purpose
R&D project progress achieved development of the Company
Improve the technical reserve of the
Improve the power generation of
Development of Company's models by developing
steam turbines, reduce energy
steam turbine EUNG80/63 model, which can increase the Currently Developed a new
consumption, improve the
with subcritical power generation and reduce the energy under EUNG80/63
competitiveness of the Company's
parameters consumption, which accords with the energy development. model.
products and enrich the technical
EUNG80/63 saving and emission reduction policy
reserves of the Company's models.
advocated by China.
Overcome the
Meet the needs of the market,
Overcome the industrial steam turbine used in industrial steam
conform to the market development
Development of the field of high-power and high-speed turbine used in
trend, broaden and supplement the
HNKS40/50 reaction large-scale syngas, conform to the Currently the field of
Company's design system, steadily
steam turbine for market development trend, further improve the under high-power and
enhance the Company's strength,
large syngas Company's design system and strengthen the development high-speed
and achieve a technological
compressor Company's competitiveness in the field of reaction
superiority position in the project
syngas. large-scale
competition in this field.
syngas.
Laboratory Through CNAS certification, improve the Improve the laboratory level of the
Currently
capacity ability level of the laboratory, which indicates Obtained CNAS Company, have the technical ability
being
improvement that the laboratory has the technical ability to certification. to provide testing services
certified.
and CNAS provide testing services according to according to internationally
21
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
certification internationally recognized standards. recognized standards, and be able to
better serve international customers
and gain recognition from
international customers.
With the help of the construction of
digital factory, Hangzhou Steam
Turbine can realize the
Through the digital transformation of digitalization and intelligence of
Construction of Currently
Hangzhou Steam Turbine Manufacturing Build a digital manufacturing process, and then
digital factory in under
Base, achieve the purpose of construction of factory. realize the intelligence of the whole
production base construction.
Hangzhou Steam Turbine Digital Factory. process of product design,
technology, manufacturing and
service, and progress towards the
era of intelligent manufacturing.
This series of high-speed power
Development of
generation steam turbines has high
NK50/1.7 steam The development of NK50/1.7 new model
Currently efficiency and low cost, which
turbine for high makes up the gap between high-speed power Developed a new
under greatly promotes the Company to
speed generation series GK1.3 and GK2.1, and NK50/1.7 model.
development. achieve business growth, increase
condensation enriches the Company's technical reserves.
profits and expand the power
power generation
generation market.
Company's research and development personnel situation
2021 2020 Increase /decrease
Number of Research and
762 949 -19.70%
Development persons (persons)
Proportion of Research and
19.01% 23.98% -4.97%
Development persons
Academic structure of R&D
—— —— ——
personnel
Bachelor 218 174 25.29%
Master 426 582 -26.80%
Other 118 193 -38.86%
Age composition of R&D
—— —— ——
personnel
Under 30 years old 88 104 -15.38%
30-40 years old 401 493 -18.66%
Over 40 years old 273 352 -22.44%
The Company's R & D investment situation
2021 2020 Increase /decrease
22
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Amount of Research and Development
350,216,635.11 233,881,231.71 49.74%
Investment (Yuan)
Proportion of Research and
Development Investment of Operation 6.05% 4.91% 1.14%
Revenue
Amount of Research and Development
0 0 0
Investment Capitalization (Yuan)
Proportion of Capitalization Research
and Development Investment of
Research and Development Investment
Reasons and influence of significant changes in R&D personnel composition of the Company
√Applicable□ Not applicable
The main reason for the change in the number and composition of R&D personnel is that the company will start to
reduce statistical auxiliary R&D personnel in 2021, highlighting the front-line R&D personnel.
The Reason of the Prominent Change in Total Amount of Research and Development Input Occupying the
Business Income Year on Year
□ Applicable √Not applicable
Reasons for the drastic change of capitalization rate of R&D investment and its rationality explanation
□ Applicable √Not applicable
（5）Cash Flow
In RMB
Items 2021 2020 Increase/Decrease(%)
Subtotal of cash inflow received
5,423,863,579.31 4,599,935,940.49 17.91%
from operation activities
Subtotal of cash outflow received
5,352,054,090.28 3,971,050,165.37 34.78%
from operation activities
Net cash flow arising from operating
71,809,489.03 628,885,775.12 -88.58%
activities
Subtotal of cash inflow received
4,670,633,768.49 3,882,568,833.97 20.30%
from investing activities
Subtotal of cash outflow for
4,863,666,686.48 3,942,727,996.47 23.36%
investment activities
Net cash flow arising from
-193,032,917.99 -60,159,162.50 -220.87%
investment activities
Subtotal cash inflow received from
540,815,995.86 410,800,000.00 31.65%
financing activities
Subtotal cash outflow for financing
799,379,929.92 829,790,258.00 -3.66%
activities
23
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Net cash flow arising from financing
-258,563,934.06 -418,990,258.00 38.29%
activities
Net increase in cash and cash
-382,815,680.03 126,841,422.98 -401.81%
equivalents
Notes to the year-on-year change of the relevant data
√Applicable □ Not applicable
In RMB
Items 2021 2020 Increase/Decrease(%) Reason
Mainly due to the
year-on-year increase in
Net cash generated from /used
71,809,489.02 628,885,775.12 -88.58% various taxes and fees paid in
in operating activities
the current period gas turbine
procurement
Mainly due to the increase in
cash paid for the acquisition
Net cash flow generated by
-193,032,917.99 -60,159,162.50 -220.87% of equity interests in several
investment
companies under the same
control in the current period.
Mainly due to the increase in
the net amount of bank loans
Net cash flow generated by in the current period and the
-258,563,934.06 -418,990,258.00 38.29%
financing repurchase of treasury shares
in the same period of the
previous year.
Mainly due to the increase in
Net increase of cash and cash net cash flow from operating
-382,815,680.03 126,841,422.98 -401.81%
equivalents activitiesh paid for
employees.
Explanation of significant difference between cash flow from operating activities and net profit during the
reporting period
√Applicable □ Not applicable
It is mainly due to the payment of various taxes and fees of RMB 415 million that do not affect the net profit of
the current period,and gas turbine procurement increased year on year.
V. Analysis of Non-core Business
√ Applicable □Not applicable
In RMB
Proportion in total Sustainable
Amount Explanation of cause
profit (yes or no)
Other income 202,548,518.03 24.33% Mainly due to the recognition of other ——
24
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
income in the relocation compensation
It is mainly due to the dividends of ——
Hangzhou Bank, convertible bond and the
Investment income 168,937,379.22 20.29%
investment income of wealth management
products this year
It is mainly due to the cancellation of the gas ——
turbine contract with Huoqiu project with
Non-operating income 134,352,975.28 16.14% Sinosteel Equipment & Engineering Co.,
Ltd., and confirmed loss compensation of
RMB 109 million.
It is mainly due to the relocation loss ——
Non-operating
88,887,299.33 10.68% recognized by the transfer of assets in the
expenses
current period.
VI. Condition of Asset and Liabilities
(1)Condition of Asset Causing Significant Change
In RMB
End of 2021 End of 2020
Notes to the
Proportion in Proportion
Proportion in the significant
Amount the total Amount increase/decrease
total assets(%) change
assets(%)
Monetary fund 1,622,883,247.79 9.94% 1,999,509,842.32 12.21% -2.27% ——
Accounts receivable 1,997,950,120.70 12.24% 1,668,235,154.01 10.19% 2.05% ——
Contract assets 583,026,649.99 3.57% 535,880,910.51 3.27% 0.30% ——
Inventories 3,041,643,747.35 18.64% 2,306,574,195.23 14.09% 4.55% ——
Investment real
6,903,986.07 0.04% 7,949,408.86 0.05% -0.01% ——
estate
Long-term equity
0.00% 11,899,308.84 0.07% -0.07% ——
investment
Fixed assets 1,658,423,191.83 10.16% 1,309,749,127.82 8.00% 2.16% ——
Construction in
517,835,956.11 3.17% 805,277,593.08 4.92% -1.75% ——
process
Use right assets 30,437,778.92 0.19% 28,461,441.04 0.17% 0.02% ——
Short-term
250,065,920.45 1.53% 252,777,667.03 1.54% -0.01% ——
borrowing
Contract liabilities 3,052,515,293.06 18.70% 2,949,234,639.55 18.01% 0.69% ——
Long-term
180,830,007.55 1.11% 21,623,520.00 0.13% 0.98% ——
borrowing
25
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Lease liabilities 22,575,754.77 0.14% 22,193,743.68 0.14% 0.00% ——
Overseas assets account for a relatively high proportion.
□ Applicable √ Not applicable
(2)Asset and Liabilities Measured by Fair Value
√Applicable □ Not applicable
In RMB
Impairme
Gain/Loss on Cumulative
nt Purchased
fair value fair value Sold amount in
Opening provision amount in the Other Closing
Items change in the change the reporting
amount s in the reporting changes amount
reporting recorded into period
reporting period
period equity
period
Financial
assets
Financial
assets
1.Transaction
al financial
assets
1,021,681,809. 4,383,572,000. 4,490,951,752. 960,645,259.8
（Excluding 46,343,202.48 45,155,792.02
34 00 00 2
Derivative
financial
assets）
2. Derivative
financial
assets
3.Other
creditor's
rights
investment
4.Other
Equity 4,056,378,073. -570,937,932. 3,094,486,100. 3,485,440,140.
Instrument 52 60 92 92
Investment
5.Other
non-current
16,046,102.59 -1,104,976.32 -7,331,407.69 148,592.31 14,792,533.96
financial
assets
6.Financing 823,598,830.5 -6,945,619.
816,653,211.21
of receivable 5 34
26
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Subtotal of
5,917,704,816. -525,699,706. 3,132,310,485. 4,383,572,000. 4,491,100,344. -6,945,619. 5,277,531,145.
financial
00 44 25 00 31 34 91
assets
5,917,704,816. -525,699,706. 3,132,310,485. 4,383,572,000. 4,491,100,344. -6,945,619. 5,277,531,145.
Total
00 44 25 00 31 34 91
Financial
0.00 0.00 0.00
Liability
Other changes
None
Did great change take place in measurement of the principal assets in the reporting period ?
□ Yes √ No
(3) Restricted asset rights as of the end of this Reporting Period
（1）Assets with restricted ownership or access rights
Items End of Book value Reason
Monetary fund 155,344,279.72 Utilized for issuing bank acceptance bill and L/G
Notes receivable 9,004,000.00 Utilized for issuing bank acceptance bill
Financing receivable 89,200,929.14 Utilized for issuing bank acceptance bill
Fixed assets 158,941,353.35 Utilized for pledging to obtain the bank loan
Intangible assets 53,001,884.15 Utilized for pledging to obtain the bank loan
Total 465,492,446.36
VII. Investment situation
1. General
√ Applicable □ Not applicable
Investment Amount in 2021(Yuan) Investment Amount in 2020(Yuan) Change rate
551,836,405.09 467,012,502.84 18.16%
2.Condition of Acquiring Significant Share Right Investment during the Report Period
√ Applicable □ Not applicable
In RMB
Progr
Gain or
ess up Whether
Name of Capit Invest Less or
Main Invest Investm Share to Antici to
the al ment Product the Date of Disclosure
Busines ment ent Proport Partner Balan pated Involve
Company Sourc Horiz Type Current Disclosure Index
s Way Amount ion % ce Incom in
Invested e on Invest
Sheet e Lawsuit
ment
Date
27
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Constru
New Enginee
ction Purch 21,686,4 100.00 Self Long- Comp 3,924,2
Energy ring No 2021-11-4
busines ase 89.39 % fund term leted 17.16
Company service
s
Other
Transpo Transpo
Sales Purch 28,200,0 30.00 Self Natura Long- Comp 728,88
rtation rtation No 2021-11-4
Company ase 00.00 % fund l term leted 2.57
industry services
person
Zhejia
ng
Branch
of
China Mecha
Steam
Mechanic nical
Comme Purch 1,390,09 55.00 Self Long- turbine Comp -2,460.
al Scienc No 2021-11-4
rce ase 3.91 % fund term R & D leted 18
Institute e
service
Company Resear
ch
Institut
e Co.,
http:/www.cni
Ltd
nfo.com.cn(An
Zhejia nouncement
ng No.:2021-95)
Branch
of
Mecha
nical
Scienc
e
Resear
ch Gas
Ranchuan
Comme Purch 10,139,1 85.60 Self Institut Long- turbine Comp -8,010.
g No 2021-11-4
rce ase 32.68 % fund e Co., term R & D leted 99
Company
Ltd,. services
Hunan
Chong
de
Industr
ial
Techno
logy
Co.,
Ltd.,
28
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Hengfe
ng
Tools
Co.,
Ltd.,
Zhejia
ng
Institut
e of
Mecha
nical
Scienc
e
Resear
ch
Institut
e
Branch
Co.,
Ltd.,
Zhejia
ng
Hengyi
ng
Power
Techno
logy
Co.,
Ltd.,
Hangz
hou
Bohua
Laser
Techno
logy
Co.,
Ltd
Self Hangz
fund hou
http://www.cni
and Xunen
Hangfa Manufa Purch 280,119, 100.00 Long- Generat Comp -5,329, nfo.com.cn(An
Loan g No 2021-11-4
Company cturing ase 027.01 % term or leted 140.93 nouncement
for Enterp
No.:2021-95)
financ rise
ial Manag
29
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
institu ement
tions Consul
ting
Partner
ship
(limite
d
partner
ship),
other
natural
person
s
Ningb
o
Huayi
Industr
Instrum
Capit y& http://www.cni
ent
Packaged Comme al 10,200,0 75.855 Self Trade Long- Comp 4,565,7 nfo.com.cn(An
control No 2021-11-4
Tech. Co. rce increa 00.00 % fund Co., term leted 36.84 nouncement
equipm
se Ltd., No.:2021-95)
ent
other
natural
person
s
351,734, 3,879,2
Total -- -- -- -- -- -- -- -- -- -- --
742.99 24.47
3.Situation of the Significant Non-equity Investment Undergoing in the Report Period
√ Applicable □ Not applicable
In RMB
Accrue Reasons
Accrued d for not
Investment Actual Realize Reaching
Industry Capit
Proje Investme Fixed amount in Investment Project Anticipat d the
involved in al Disclosu Disclosu
ct nt investme this Amount up to sched ed Income Planned re date re Index
investment Sourc
name method nts or not reporting the End of ule income up to Schedule
projects e
period Reporting the End and
Period of Anticipat
Reporti ed
30
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
ng Income
Period
New General
plant Self-buil equipment 184,947,417 1,463,689,994 Self 95.75
Yes No
.69 .06 fund %
proje t manufacturi
ct ng
184,947,417 1,463,689,994
Total -- -- -- -- -- -- -- --
.69 .06
4.Investment of Financial Asset
（1）Securities investment
√ Applicable □ Not applicable
In RMB
Book
Book
value
Cumulat Purchas value
Mode of balance Changes Sale
ive fair e Gain/los balance
Stock Initial accounti at the in fair amount Account Sauce of
Security Security value amount s of the at the
Abbrevi investm ng beginni value of in the ing the
category code changes in the reportin end of
ation: ent cost measure ng of the this this items shares
in this g period the
ment the period period
equity period reportin
reportin
g period
g period
Other
Domesti equity
4,056,3 -570,93 3,094,4 3,485,4
c and Hangzho 390,954 95,156, Instrum Self
600926 FVM 78,073. 7,932.6 86,100. 40,140.
foreign u Bank ,040.00 322.10 ent funds
52 0 92 92
stocks investm
ent
Domesti Financia
Debt
c and LUTIA 2,869,2 1,681,8 963,450 -223,95 963,450 2,645,2 l assets
000912 FVM restructu
foreign NHUA 19.80 09.34 .48 9.98 .48 59.82 transacti
ring
stocks on
Hangyin Financia
Convert
converti 687,572 45,379, 45,379, 687,572 732,951 45,379, l assets Self
ible 110079 FVM
ble ,000.00 752.00 752.00 ,000.00 ,752.00 752.00 transacti funds
bonds
bonds on
Other securities
investments held at the end -- -- --
of the term
Total 1,081,3 -- 4,058,0 -524,59 3,139,6 687,572 732,951 141,499 3,488,0 -- --
31
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
95,259. 59,882. 4,730.1 41,892. ,000.00 ,752.00 ,524.58 85,400.
80 86 2 94 74
Disclosure Date of
Announcement on
Securities Investment
Approved by the Board of
Directors
Disclosure Date of
Announcement on
Securities Investment
Approved by the
Shareholders Meeting(If
any)
（2）Investment in Derivatives
□ Applicable√ Not applicable
The Company had no investment in derivatives in the reporting period.
5.Application of the raised capital
□ Applicable√ Not applicable
None
VIII. Sales of major assets and equity
(1) Sales of major assets
□ Applicable √ Not applicable
The Company had no sales of major assets in the reporting period.
(2)Sales of major equity
□ Applicable √ Not applicable
IX. Analysis of the Main Share Holding Companies and Share Participating Companies
√ Applicable □ Not applicable
Situation of Main Subsidiaries and the Joint-stock Company with over 10% net profit influencing to the Company
In RMB
Company Registered Operating Net
Type Main business Total assets Net assets Turnover
name capital profit Profit
Auxiliary
Subsidiarie Manufacturin 320,335,328.7 95,281,126.3 84,567,1
Machine 80,000,000.00 811,891,149.20 604,581,929.89
s g 7 1 91.43
Co.
Packaged Subsidiarie Commerce & 125,769,770.5 22,578,126.8 19,607,5
51,000,000.00 302,392,408.49 275,556,715.10
Tech. Co. s trade 1 1 16.09
32
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Machinery Subsidiarie Manufacturin 196,903,072.0 90,121,564.6 74,265,9
30,000,000.00 312,057,989.48 305,270,504.99
Co. s g 9 7 64.44
Turbine Subsidiarie Commerce & -1,336,5
20,000,000.00 138,688,901.94 61,666,029.23 156,925,298.96 -2,224,947.55
Co. s trade 35.20
Zhongneng Subsidiarie Manufacturin 1,814,719,437.0 1,374,266,364.9 5,949,74
92,500,000.00 60,642,167.00 3,774,279.86
Company s g 7 1 4.78
Casting Subsidiarie Manufacturin 295,069,037.9 28,205,843.7 28,136,5
29,500,000.00 610,490,637.79 502,362,854.32
Company s g 4 5 43.47
New
Subsidiarie Construction 200,000,000.0 15,386,091.1 11,319,2
Energy 316,175,242.59 -23,848,678.47 177,979,557.45
s business 0 3 22.30
Company
Sales Subsidiarie Transportation 15,547,619.2 10,861,8
5,000,000.00 122,732,502.05 48,168,090.24 227,668,616.83
Company s industry 8 89.02
China
Mechanica Subsidiarie Commerce & 755,007.
1,000,000.00 2,793,081.72 2,784,196.58 3,614,549.00 494,458.19
l Institute s trade 44
Company
Ranchuang Subsidiarie Commerce & 588,572.
24,250,000.00 39,661,022.19 24,961,637.02 0.00 599,482.14
Company s trade 59
Subsidiaries obtained or disposed in the reporting period
√ Applicable □Not applicable
Means of acquisition and disposal of
Impact on overall production,
Company name subsidiaries during the reporting
operation and performance
period
Business consolidation under the
Zhongrun Company No significant impact
same control
Business consolidation under the
New Energy Company No significant impact
same control
Business consolidation under the
Sales Company No significant impact
same control
Business consolidation under the
China Mechanical Institute Company No significant impact
same control
Business consolidation under the
Ranchuang Company No significant impact
same control
Business consolidation under the
Hangfa Company No significant impact
same control
Anhui Casting Company Newly established No significant impact
Kunming Hangzhong Steam Turbine Technology
Cancelled No significant impact
Service Co., Ltd.
33
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Shijiazhuang Hangneng Steam Turbine Technology
Cancelled No significant impact
Service Co., Ltd.
Urumqi Hangzhong Steam Turbine Technology
Cancelled No significant impact
Service Co., Ltd.
Tangshan Hangzhongneng Steam Turbine Technology
Cancelled No significant impact
Service Co., Ltd.
Guangxi Hangzhongneng Steam Turbine Technology
Cancelled No significant impact
Service Co., Ltd.
Jilin Hangzhongneng Steam Turbine Technology
Cancelled No significant impact
Service Co., Ltd.
Chengdu Hangzhongneng Technology Co., Ltd. Cancelled No significant impact
Luoyang Hangqi Steam Turbine Technology Service
Cancelled No significant impact
Co., Ltd.
Heavy Industry Co. M &A No significant impact
Note
X. Structured subject situation controlled by the company
□ Applicable √ Not applicable
XI. Prospect for future development of the Company
(I) Development strategy and business plan for 2022
2022 is a crucial year for the Company to promote the reform of state-owned enterprises and implement the
"14th Five-Year Plan", and it is a vital year as a link between past and future and the future and to achieve
high-efficiency and high-quality development. In 2022, the Company will further consolidate the market, steadily
promote business transformation and resource integration, accelerate innovative development and digital
transformation, and strive to promote the high-quality development of the enterprise.
1. Consolidate the market
Strengthen the joint sales of drive power generation, realize the complementation and sharing of market
resources, strengthen the promotion of thermal power market, compete for the contract orders of small and
medium-sized drives, expand new fields such as waste heat power generation, tap the potential demand of thermal
power and coal chemical industry market, and progress on the road of coordinated development of traditional plate
and new energy plate.
Pay attention to the evolution direction of environmental protection policy and the trend of energy market,
seize the window period of carbon reduction and emission decrease in stock market, and actively expand the market
of complete works and services. Focus on the quality of contract performance, speed up inventory clearing,
34
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
strengthen the dynamic control of production and sales linkage, ensure the stability of sales revenue, and lay a solid
foundation for the Company's "14th Five-Year Plan" development.
2. Digital leading
Deepen data thinking, realize traditional business datamation, and make data the core resource and asset of
enterprises. Promote the hardware guarantee, transformation and upgrading of the Company's PLM, MES, CRM,
SRM and other information systems. Well ensure ERP project implementation, accelerate ERP application
integration, promote enterprise management innovation, and cultivate the Company's own ERP O&M team. Build a
production control system, realize digitalization and visualization of the whole process, carry out emerging projects
such as quality traceability and 5G+ technology, improve the inter-departmental administrative efficiency of the
enterprise and reduce operating costs.
Continue to promote the protection capability of information security system and the guarantee of information
infrastructure construction, and realize the general trend of O&M technology intelligence. Complete the selection
and application of the Company's cloud design platform, explore the application of the industrial Internet to
effectively reduce costs and increase efficiency, and speed up the challenge of digital visualization with high
requirements in industrial field. Accelerate the pace of intelligent manufacturing, continue to well ensure the wide
application of rotor intelligent manufacturing, explore intelligent manufacturing schemes for blades, shell parts and
toxic and harmful types of work, and promote the construction of intelligent factories.
3. Format transformation
Further promote the implementation of the key account management system and major service framework.
With the development of stock market and the expansion of new energy business as carriers, improve the quality of
full-cycle technical service of core users. Relying on the construction of "Joint Development Center for Innovation
and Efficiency Technology of Petrochemical Rotating Equipment", improve the enterprise-level database,
formulate an efficient inspection mechanism, optimize the online diagnosis system, strengthen the data analysis
function, provide targeted and personalized aggregation services for core users, effectively promote the digital
empowerment of marketing business and promote the process of business integration.
Explore the low-carbon blue ocean market and add green power. Make good use of the diversified
development of new energy company design and general contracting qualification, and gradually expand to EPC, so
as to further enrich the product line. Extend the after-sales service business from single product service to
diversified product set growth service, increase the added value of products and services, create value for customers,
and well build an ecosystem for O&M services.
4. Innovative development
Take design cost reduction as the major technical development direction in the future. Promote systematic,
integrated and complete R&D mode to meet personalized market demand, seize the market opportunities of large air
separation unit and large ethylene unit, attach importance to the market of thermoelectric transformation, optimize
35
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
the efficiency of back pressure generator unit, expand the high-efficiency utilization technology and application
demonstration for low-quality energy, and well ensure technology promotion and unit development for low-pressure
ultra-low-pressure waste heat steam utilization, as well as the coverage of practical application stage.
Continue to promote the development of supercritical carbon dioxide prototype, and promote the upgrade of
steam turbine unit container 2.0. Improve the digital delivery capacity building, carry out the three-dimensional
layout pilot, and complete the version change and update of the random data.
Complete implementation verification of technical improvement with low vibration index and CNAS
certification of physical and chemical laboratory. Continuously optimize and improve the control measures of
self-inspection and quality spot check in the processing and assembly stages, ensure the closed-loop verification of
quality problems, strictly implement the quality assessment system, and help the manufacturing capacity to step up.
(II) Possible risk factors
1. Market risk
Due to overcapacity of domestic steam turbine industry, market competition has intensified. The national goal
of "peak emission and carbon neutrality" will have a profound impact on high-emission industries such as
petrochemical, steel, electric power and building materials, and the Company's product sales will be further
impacted. The Company will rely on technological innovation, highlight core technological advantages, expand
marketing channels, innovate marketing working modes, improve product quality and terminal service capabilities,
strive to increase added value of products, actively tap potential demand, and actively respond to and resolve market
risks.
2. Contract execution risk
As the market volatility becomes more intensified, there are more frequent changes in the contract during the
execution of the contract for the company, and delays and suspensions of the project schedule happen from time to
time, which will have a large impact on the internal realization process of production of the company, and
meanwhile it also increases the cost of the company’s contract performance and the contract risk. The company
will further strengthen the connection between production and sales, improve the speed and level of the company's
response to the market, and well control the contract execution risk.
3. Accounts receivable risk
With the increasing risk in the business downturns and investment projects in some customers of the
downstream industry, the company's receivables recovery has more risk, and the average age of accounts tends to
increase, which will have a large impact on the company's operating results. The company will implement the
customer credit management, strengthen the contract signing and perform the risk control, increase the assessment
of accounts receivable, and reduce the adverse impact of overdue receivables.
4. Exchange rate risk
The expansion of the company's international procurement and international sales business will cause the
company's international balance of payments to be affected by exchange rate fluctuations, and there is a certain
risk of exchange loss. With the increase in the two-way volatility of the RMB exchange rate, the uncertainty of
foreign exchange gains and losses has been increased. The company will refer to the exchange rate volatility cycle
36
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
and adopt appropriate exchange rate risk management tools to minimize exchange loss.
5. The company's profitability decline risk
As domestic raw materials and labor costs continue to rise, while the prices of industrial products continue to
fall, the profitability of products is facing a severe test. The company will strive to improve internal management,
improve project cost management ability, reduce procurement costs and operation and management costs, improve
operational efficiency, and strive to resolve the risk of declining profitability.
6. Overseas market risk
During the "fourteenth Five-Year Plan" period, the company will vigorously implement the "go global"
strategy, further expand overseas target markets, and increase the company's share and influence in the
international market. However, at present, the overseas target market is affected by geopolitical conflicts,
unpredictable changes of internal political and economic situation and trade barrier policies in the region, thus
there is great uncertainty in the implementation of overseas market strategies. The company will increase market
research efforts, actively demonstrate countermeasures, and explore the development path of business localization.
7. Impact of pandemic
The threat of COVID-19 will continue, and there is uncertainty in economic development. If the pandemic
intensifies, the adverse impact on the Company's business development will correspondingly increase, and the
implementation of the contract projects that the Company has undertaken will also be affected to some extent. The
Company will constantly adapt to and reduce the adverse effects caused by the pandemic in combination with the
development and changes of the pandemic.
XII. Particulars about researches, visits and interviews received in this reporting period
1.Particulars about researches, visits and interviews received in this reporting period
√Applicable□ Not applicable
Reception Way of Types of Visitors Main contents discussed and
Place of reception Basic index
time reception visitors received information provided
No.204 Meeting Room, The company's acquisition of part Information on
November
2/F ,Turbine Power Field Individual of the equity assets of the research activities of
22, Individual
Building. of the research investor controlling shareholder's subsidiary Hangqilun B, No.
2021
Company company and related transactions 2021-01
37
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
IV. Corporate Governance
I. General situation
(1) Standardized operation of corporate governance structure
In accordance with the "company law" provisions, The Company has its executive, decision making and
supervisory bodies operated strictly according to the Articles of Association, Shareholders’ Meeting Criteria,
Board Meeting Criteria, and Supervisory Committee Criteria. Meetings were held by legal procedures, Corporate
governance in accordance with the relevant provisions of the laws and regulations of China Securities Regulatory
Commission and the Shenzhen Stock Exchange. During the reporting period, the company organized 12 meetings
of the board of directors, 8 meetings of the board of supervisors, 5 meetings of shareholders, 9 meetings of special
committees of the board of directors and 2 annual report communication Meetings. In strict accordance with the
Articles of Association of the Company and relevant laws and regulations, the Company deliberates and makes
decisions on major business matters. The Company insists on integrating the Party building work into the
economic work. When making administrative decisions, the opinions of the Party Committee meeting shall be
heard in advance, and the powers and responsibilities of the Party committee meeting, the general manager's
office meeting, the board of directors, the board of supervisors and the shareholders' meeting shall be clarified.
During the reporting period, the Company reviewed its periodic reports, internal control self-assessment reports,
appointment of accounting firms, foreign investment, guarantees, related party transactions, bank credit loans,
entrusted wealth management, asset impairment and write-off, absorption and merger of steam turbine heavy
industries, equity incentives, acquisition of equity of subsidiaries of the Group and other important business and
governance activities, went through the examination and approval procedures for important matters, supervised the
Company's business activities and ensured its compliance.
（2）Effectiveness of organization
The Board of Directors is the executive body of the decisions made by the Shareholders’ Meeting. The Board is
also responsible to establish and improve the internal control system of the Company, and make it works
effectively. Chairman of the Board is the caller of the Board. Strategy, Investment, Remuneration, and Auditing
Committees were established within the Board, and were supporting the decision-making of the Board. The
Supervisory Committee is responsible to report to the Shareholders’ Meeting and supervise the legal performance
of duties of directors, managers, and executives. The management is responsible to the Board, and take charge of
daily operation of the Company. Functional departments were deployed according to the needs of business with
clear responsibilities.
（3）Basis for material decisions
The Company has setup practical rules for all material aspects of management, including but not limited to,
external investment, trusteeship, related transactions, information disclosure, investors’ relationship, information
insider, executive shares, and management of controlled subsidiaries. These documents of rules were constantly
revised and improved to maintain effectiveness upon changing situation. In the report period,
According to the Company Law of the People's Republic of China, and other relevant regulations of China
Securities Regulatory Commission and Shenzhen Stock Exchange, and in combination with the actual situation of
the Company, it revised the Articles of Association and the Remuneration Management System for Directors and
Senior Managers.
（4）Establishing of internal control system
38
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
The Company kept close observation on the whole business process identifying risk points according to Enterprise
Internal Control Standards, Internal Control Guidelines, Internal Assessment Guidelines, and Internal Control
Guidelines for PLCs issued by Shenzhen Stock Exchange. Effective mechanisms on risk control and internal
auditing were conducted. The Auditing Committee of the Board was responsible to supervise the internal control
practices.
（5）Corporate Information Disclosure and Transparency
The company attaches great importance to the information disclosure and the investor relations management, and
it has designated Securities Times, Hong Kong Commercial Daily and http://www.cninfo.com.cn as its statutory
information disclosure media and website. With fair treatment to all investors, the company in a timely manner
discloses the information with truthfulness, accuracy and completeness, which well ensures the transparency of
the company and the legitimate rights and interests of all shareholders.
Does there exist any difference in compliance with the corporate governance , the PRC Company Law and the
relevant provisions of CSRC,
□ Yes √No
There exist no difference in compliance with the corporate governance , the PRC Company Law and the relevant
provisions of CSRC.
II. Independence and Completeness in business, personnel , assets, organization and finance
The Company kept independence and separated with holding shareholders on the aspects of business, human
resource, capital, organization, and accounting. And the Company established independent and complete business
operating systems.
1. On business operations
The Company’s majors of design, manufacture, sale business of industrial steam turbine was independent from the
holding company (Hangzhou Steam Turbine Power Group).
2. On personnel management
The Company kept independence with the holding shareholders on the aspects of human resource and
remuneration management. the Company’s management was employed and gotten salary exclusively in the
Company instead of any management duty in the holding-share share holders except the duty of chairman of the
Board. The Company’s accountant shad no part-time job in their parent company or related companies.
3. On capital operation
The property relationship between the Company and the holding-share shareholders was clear and explicit. The
capital and business injected by the holding-share shareholders was independent and complete. And at the same
time, the Company owned system of manufacturing and operation, sale, accessorial manufacturing and relevant
equipments which independent from holding shareholder.
4. On organization structure
The Company kept total independence from the controlling shareholder on the organization configuration. The
Company owned separate and independent manufacturing, supplying, and sales system, there was no horizontal
competition with the controlling shareholder, and the Company owned independent management and operation
systems. The Company signed related trading agreements with the subsidiaries of the share-holding company. The
Company’s intermediate managers are employed by the Company’s executives, and was evaluated under the
economic responsibility system.
5. On accounting management
The Company had independent accounting department, and established independent account re-calculation system
39
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
and accounting system; the Company also had the regulated and independent finance management on the
share-holding and subsidiaries; the Company had independent finance policies and bank account and its tax, there
was no joint account with controlling shareholder.
6. In legal aspect
The company has been approved by Zhejiang Provincial Department of Justice to carry out corporate lawyer work,
and perform legal affairs duties according to relevant regulations such as Opinions on Implementing the Legal
Adviser System and the Lawyers System of Public Lawyers Company and Measures for the Administration of
Legal Advisers in State-owned Enterprises. Along with Zhejiang Tianche Law Firm – the public legal consultancy
employed by the Company, the Department aims to regulate the legal affairs and day-to-day administrations .
III. Competition situations of the industry
□ Applicable √ Not applicable
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting Period
1.Annual General Meeting
Investor
Sessions Type participation Meeting Date Disclosure date Disclosure index
ratio
The meeting examined and
2020 Shareholders’ Shareholders’
71.29% May 10,2021 May 11,2021 adopted the Proposal of the 2020
general meeting Meeting annual report
The meeting examined and
adopted the Proposal on
The 1st Provisional
Provisional amending the Company’s Article
Shareholders’
Shareholders’ 70.14% July 23,2021 July 24,2021 of Association, the Proposal on
Meeting 2021
Supplementing the Supervisor of
Meeting
the Company's Eighth
Supervisory Committee
The meeting examined and
adopted the Proposal on the
Company's 2021 Restricted
Stock Incentive Plan and its
The 2nd Provisional summary, The Proposal on
Provisional
Shareholders’ Administrative Measures for the
Shareholders’ 74.24% August 27,2021 August 28,2021
Meeting 2021 Evaluation of the
Meeting Implementation of the
Company's 2021 Restricted
Stock Incentive Plan, The
Proposal on requesting the
general meeting of shareholders
40
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
to authorize the board of
directors to handle matters
related to the 2021 restricted
stock incentive plan
The 3rd Provisional The meeting examined and
Provisional
Shareholders’ adopted the Proposal on the
Shareholders’ 69.27% October 15,2021 October 16,2021
Meeting 2021 Absorption and merger of the
Meeting wholly-owned Subsidiaries
The 4th Provisional The meeting examined and
Provisional
Shareholders’ adopted the Proposal on provide
Shareholders’ 68.79% November 22,2021 November 23,2021
Meeting 2021 Credit guarantee for Zhongneng
Meeting Company
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
41
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
V. Information about Directors, Supervisors and Senior Executives
(1)Basic situation
Number of Reasons
The number Number of
Shares held at Number of shares for
Office Starting date of Expiry date of Stock of shares held Other shares held at
Name Positions Sex Age the restricted shares reduced in the increase or
status tenure tenure options in the current changes(shares) the end of the
year-begin(share) granted(shares) current decrease of
period(shares) period(shares)
period(shares) shares
December Equity
Zheng Bin Board chairman In office Male 57 May 18,2016 0 0 250,000 0 0 0 250,000
9,2022 incentive
December Equity
Ye Zhong Director, GM In office Male 53 June 19,2004 0 0 250,000 0 0 0 250,000
9,2022 incentive
Yang December Equity
Vice Chairman In office Male 57 June 24,2013 0 0 200,000 0 0 0 200,000
Yongming 9,2022 incentive
Director, Deputy December Equity
Wang Gang In office Male 49 June 30,2017 0 0 200,000 0 0 0 200,000
GM 9,2022 incentive
December
Pan Xiaohui Director In office Male 43 May 10,2021 0 0 0 0 0 0 0
9,2022
Independent December
Gu Xinjian In office Male 65 May 18,2016 0 0 0 0 0 0 0
Director 9,2022
Independent December December
ZhangXiaoyan Dimission Female 49 0 0 0 0 0 0 0
Director 4,2015 17,2021
Chen Independent December
In office Female 57 May 18,2016 0 0 0 0 0 0 0
Danhong Director 9,2022
Independent December December
Zhang Hejie In office Male 62 0 0 0 0 0 0 0
Director 10,2019 9,2022
42
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Chairman of the
Equity
Li Shijie Supervisory Dimission Male 52 June 24,2013 July 7, 9,2021 0 0 200,000 0 0 0 200,000
incentive
Committee
Equity
Wang Xiaohui Supervisor Dimission Male 54 June 24,2013 July 8,,2021 100,676 0 100,000 0 0 0 200,676
incentive
December Equity
Ying Gonghua Supervisor Dimission Male 56 July 8,2021 43,403 0 100,000 0 0 0 143,403
10,2019 incentive
Chairman of the
December
Zhang Weijie Supervisory In office Female 36 July 23,2021 0 0 0 0 0 0 0
9,2022
Committee
Employee December
Lu Jianhua In office Male 60 August 15,2004 0 0 0 0 0 0 0
Supervisor 9,2022
Employee February December
Fang Yin In office Male 60 0 0 0 0 0 0 0
Supervisor 16,2012 9,2022
Deputy General
Kong December Equity
Manager, Chief In office Male 51 June 24,2013 0 0 200,000 0 0 0 200,000
Jianqiang 9,2022 incentive
engineer
Deputy General December December Equity
Li Jiansheng In office Male 58 0 0 200,000 0 0 0 200,000
Manger 5,2014 9,2022 incentive
Wang Deputy General December Equity
In office Male 51 June 9,2017 0 0 200,000 0 0 0 200,000
Zhengrong Manger 9,2022 incentive
Deputy General
December Equity
Zhao Jiamao Manger, Chief In office Male 46 January 1,2018 0 0 200,000 0 0 0 200,000
9,2022 incentive
accountant
Deputy GM,
JANUARY December Equity
Li Guiwen secretary of the In office Female 51 0 0 200,000 0 0 0 200,000
9,2019 9,2022 incentive
board
Total -- -- -- -- -- -- 144,079 2,300,000 2,444,079 --
43
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
During the reporting period, whether there is dismissal of directors and supervisors and decruitment of senior
managers
□Yes √No
Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
Name Positions Types Date Reason
Kong Jianqiang Director Dimission July 8,2021 Due to company work needs
Li Guiwen Director Dimission July 8,2021 Due to company work needs
Li Guiwen Deputy GM Appointed February 6,2021 Due to company work needs
In order to improve the corporate governance
Pan Xiaohui Director Elected May 10,2021
structure
Served as an independent director of the company
Zhang Xiaoyan Director Dimission December 17,2021
for 6 consecutive years
Li Shijie Supervisor Dimission July 7,2021 Due to company work needs
Ying Gonghua Supervisor Dimission July 8,2021 Due to company work needs
Wang Xiaohui Supervisor Dimission July 8,2021 Due to company work needs
In order to improve the corporate governance
Zhang Weijie Supervisor Elected July 23,2021
structure
Wang Gang Deputy GM Appointment July 12,2021 Due to company work needs
(2) Posts holding
The professional background, working experience and main responsibilities of the current board members,
supervisors and senior managers in the company
（1）Director
Mr. Zheng Bin, born in November 1964, CCP member, university graduate, senior economics professional
certification. He served as vice chairman and Vice General Manager of Hangzhou Steam Turbine Power Group
Co., Ltd. He used to be chairman and General Manager of Hangzhou Dongfeng Shipyard Co., Ltd. He was
engaged the vice Chairman at the 4th term of Board on March 2009 ,Vice Chairman at the 5th term of Board on
June 2010, He was engaged the Director and General Manager of the Company on June 2013, He was engaged
the Chairman at the 6th term of Board on December 2014. He was elected as Chairman of the 7th term of board of
directors on May 2016. Currently is the 8th chairman of the company.
Mr. Ye Zhong: born in April 1968, CCP member; bachelor degree; professor and senior engineer. Started working
in July 1990. he was the director of the 2nd term of Board, Chief Engineer; director of the 3rd term of Board, Vice
General Manager; Director of the 4th and 5th terms of Board, Vice General Manager, and Chief Engineer. He’s the
Standing Vice General Manager, director and Chief Engineer of the 6th term of Board of the Company, and
General Manager of the 4 Company since December 2014. He was elected as director and General Manager of the
7th term of board of directors on May 2016. Currently is the 8th Director and General Manager of the company.
44
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Mr. Yang Yongming, born in November 1964, CCP member, university graduate, certified senior economist.
Currently he’s the vice general manager of Hangzhou Steam Turbine Power Group Co., Ltd. He used to be the
vice director and director of Sales Administration Departments of the Company; Since 2013, he served as vice
general manager, general manager, and vice chairman of Hangzhou Dongfeng Shipyard Ltd. Currently he’s the
vice general manager of Hangzhou Steam Turbine Power Group Co., Ltd . and the Vice Chairman of the 6th term
of Board of the Company. He was elected as Vice Chairman of the 7th term of board of directors on May 2016.
Currently is the 8th vice chairman of the company.
Mr. Wang Gang, born in February 1972, member of the Communist Party of China, postgraduate degree, Zhejiang
University MBA, senior engineer. In 1993 the company entered the company, served as the company organization
personnel, a steam shop, security, securities laws and regulations, operation and management department and
other department heads. The current party secretary of the party committee, discipline appoint secretary, trade
union chairman. He was engaged the secretary of the board and director of the Company on June 2017. He was
elected as director of the 7th term of board of directors on June 30, 2017. Currently is the 8th Director and Deputy
General Manager of the company.
Mr. Pan Xiaohui, born in November 1978, a member of the Communist Party of China, is a senior accountant
with a university degree. He joined the Hangzhou Municipal Finance Bureau in 2003 and served successively as a
section member, deputy division chief of Comprehensive Office and division chief of account of Bureau of
Financial Supervision and Inspection of Hangzhou Municipal Finance Bureau. From February 2021, Currently is
the 8th Director of the company.
Ms Chen Danhong, born in October 1964, was graduated from Hangzhou Business College, majoring statistics.
She was former assistant in Shanghai Economic Management College, section chief in accounting section of
financial department from Zhejiang Gongshang University, General Manager in Planning and Finance Department
and HR Manager of New China Life Insurance Co., Ltd.Zhejiang Branch, Executive Vice President of Zhejiang
Zhongye Holdings Group Co., Ltd., CEO of Daodao Group Co., Ltd., and Deputy General Manager and Chief
Financial Officer of Zhejiang Arch of Triumph Macao Doulao Holding Group Co., Ltd. She was special
professional ethos supervisor in Zhejiang Provincial Office,SAT, CPPCC member in West Lake District, and
Special Auditor of Audit Bureau in West Lake District.She served as Independent director of Hangzhou Cable Co.,
Ltd.(603618), On May 2016, she was elected as the seventh Board of Directors Independent Director of the
company. Currently is the 8th Independent director of the company.
Mr Gu Xinjian, born in July 1956, was doctor of engineering, as a professor in Modern Manufacturing
Technology Research Institute of Zhejiang University, and a doctoral supervisor. He was the Deputy Director in
Center for Innovation Management and Sustainable Competitiveness of Zhejiang University, and Director of
Patents And Standards Strategic Institute. He served as vice Chairman of the professional Committee of intelligent
Manufacturing of the Chiness Society of Artificial Intelligence and the Professional Committee of Group and
intelligent Integration technology of the Chinese society of Mechanical Engineering, Member of the National
Technical Committee for Automation Systems and Integration Standardization and Chairman of the Technical
Committee for Industrial Data Sub-Committee.From August 1987 until now, he devoted himself to research and
education work in Mechanical Engineering Department of Zhejiang University, primarily engaged in researching
45
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
manufacturing informatization, enterprise modeling, networked manufacturing, advanced manufacturing systems
mode, and mechanical manufacturing systems engineering. On May 18, 2016, he was elected as the seventh Board
of Directors Independent Director of the company. Currently is the 8th Independent director of the company.
Mr. Zhang Hejie, born in January 1958, holds a master's degree in philosophy, a doctorate in management, a
visiting scholar at the University of Cambridge, and a professor and doctoral tutor at the School of Economics and
Management of Zhejiang University of Technology. the Communication Review Expert of the National Natural
Science Foundation. Currently is the 8th Independent director of the company.
(II) The Supervisors
Ms. Zhang Weijie, senior accountant. Served as the Project Manager of Pan-China Certified Public Accountants;
Full-time Supervisor and Chief Financial Officer of the State-owned Assets Supervision and Administration
Commission of Hangzhou Municipal People's Government; Head of Financial Special Group of Hangzhou
State-owned Capital Investment and Operation Co., Ltd. She is currently the Employee Director and Director of
Finance Management Dept of Hangzhou Capital, the Chairman of Hangzhou Steam Turbine Power Group Co., Ltd,
and the Chairman of the Eighth Board of Supervisors of the Company.
Mr. Lu Jianhua, born in March 1962, CCP member, university graduate. Once he was the clerk and office manager
of the Trade Union, elected vice chairman of the Trade Union and supervisor; He assumed employees’ supervisor
for the 3rd, 4th, 5th ,6th and 7th term of the Supervisory Committee. Currently is the 8th Supervisor of the
company.
Mr. Fang Yin, born in December 1962, CCP member, senior engineer, master degree. Graduated from Zhejiang
University of Industry in February 1982, and started working in technical area in Hangzhou Steam Turbine Co.,
Ltd. (former Hangzhou Steam Turbine Factory); Since September 1988, he has been working on R&D in the
Industrial Turbine Research Institute of the Company; Mr. Fang was elected Employee supervisor of the 6th term
and 7th term of Supervisory Committee. Currently is the 8th Supervisor of the company.
(III) Senior Executives
Profiles of General Manager Ye Zhong, Deputy General manager Wang Gang are available among the directors
above.
Mr. Kong Jianqiang, born in May 1970, CCP member, Master of Engineering, certified senior engineer. Started
working in July 1992. He used to be technician, head of workshop, vice director, and director of Steam Turbine
Institute of the company. He’s the director of the 6th term of Board since June 2013, and Engineer General of the
Company since December 2014. He was elected as director of the 7th term of board of directors on May 18, 2016.
Appointed as deputy general manager and Chief engineer of the company. Currently is the 8th Director , Deputy
General Manager and Chief engineer of the company.
Mr. Li Jiansheng,born January 1963, CCP member, master of engineering, certified senior engineer of professor
level. Mr. Li started working for the Company in February 1982. He has been in the positions of chief of No.4
section, vice head of the Institution, and vice head of the Industrial Turbine Institute. He has been the assistant of
Deputy general manager and head of production unit of Hangzhou Steam Turbine Co., Ltd. Mr. Li was engaged
46
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
the Deputy general manager of the Company since December 2014.
Mr. Wang Zhengrong, born in October 1970, member of the Communist Party of China, university degree,
Bachelor of Engineering, Zhejiang University, senior engineer. In 1992 to enter the company work, served as
deputy director of the company sales, director, marketing party branch secretary. Since March 2010, he has been a
member of the Party Committee of the Company. He has been Assistant General Manager of the Company and
Director of Steam Turbine Marketing since June 2015. Mr. Wang was engaged the Deputy general manager of the
Company since June 2017.
Mr. Zhao Jiamao, born in March 1975, member of the Communist Party of China, university degree, certified
public accountant and senior accountant. He joined Hangzhou Steam Turbine Power Group Co., Ltd. Finance
Office in 1995 and was once the Vice Minister of Finance of Hangzhou Steam Turbine Power Group Co., Ltd.,
Chief Accountant, Deputy General Manager and General Manager of Hangzhou Steam Turbine Power
Technology Co., Ltd. In December 2014, he was the Deputy Chief Accountant and Chief Financial Officer of the
Company. Since March 2016, he has been the General Manager Assistant, the Director of Asset Management
Department and the Finance Department and the Contract Department. Mr. Zhao was engaged the Deputy general
manager and Chief accounting of the Company since January 2018.
Ms. Li Guiwen, born in September 1970, member of the Communist Party of China, postgraduate degree, senior
engineer. In 1992 the company entered the company, She served as Deputy director General office and Deputy
Minister of Economic Management of Hangzhou Steam turbine Power Group, Since August 2007, She Served as
Minister of Strategic Development of Hangzhou Steam turbine Power Group, Since November 2017,She served
as Secretary of the Board of Directors of Hangzhou Steam turbine Power Group. Since January 2019, She served
as director of the 7th term of board of directors of the Company. On February 2019, She served as director of the
8th term board of director of the Company, Currently is the 8th secretary and Deputy General Manager of the
board of the company.
Office taking in shareholder companies
√Applicable □Not applicable
Does he /she
Titles
Names of the receive
engaged in Sharing date of Expiry date of
persons in Names of the shareholders remuneration or
the office term office term
office allowance from the
shareholders
shareholder
Hangzhou Steam Turbine Power Group Board
Zhang Weijie 2021-12-31
Co., Ltd. chairman
Offices taken in other organizations
√Applicable □Not applicable
Does he/she
Titles engaged receive
Name of the Starting date of office Expiry date of
Name of other organizations in the other remuneration or
persons in office term office term
organizations allowance from
other organization
47
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Hangzhou Zhongneng Steam Turbine Board
Ye Zhong February 1,2010 No
Power Co., Ltd. chairman
Board
Ye Zhong New Energy Company December 23,2014 No
chairman
Board
Yang Yongming Sales Company June 29,2017 No
chairman
Yang Yongming Guangdong Huaxing Bank Co., Ltd. Director September 28,2017 No
Hangzhou Heat Group Limited by
Yang Yongming Director January 25,2022 No
Share Ltd.
Chairman of
Hangzhou Zhongneng Steam Turbine
Wang Gang Supervisory April 25,2018 No
Power Co., Ltd.
Committee
Hangzhou Steam Turbine Casting Co.,
Wang Gang Director June 21,2017 No
Ltd.
China mechanical and Electrical
Kong Jianqiang Institute -HSTG (Hangzhou) United Director December 8,2020 No
Institutes Co., Ltd.
Hangzhou Steam Turbine Auxiliary Board
Kong Jianqiang June 21,2017 No
Machine Co., Ltd. chairman
Hangzhou Steam Turbine Casting Board
Li Jiansheng April 1,2020 No
Co.,ltd. chairman
Hangzhou Steam Turbine Auxiliary
Li Jiansheng Director April 3,2014 No
Machine Co., Ltd.
Wang Hangzhou Steam Turbine Mechanical Board
June 21,2017 No
Zhengrong Equipment Co., Ltd chairman
Wang Hangzhou Zhongneng Steam Turbine
Director July 1,2013 No
Zhengrong Power Co., Ltd.
Wang Hangzhou Steam Turbine New
Director November 30,2021 No
Zhengrong Energy Co., Ltd.
Zhejiang Turbine Import & Export Executive
Zhao Jiamao June 2,2020 No
Co., Ltd. director
Hangzhou Zhongneng Steam Turbine
Zhao Jiamao Director March 12,2018 No
Power Co., Ltd.
Hangzhou Steam Turbine New
Zhao Jiamao Supervisor November 30,2021 No
Energy Co., Ltd.
Zhejiang Packaged Technology Board
Li Guiwen April 1,2020 No
Development Co., Ltd. chairman
Punishments to the current and leaving board directors, supervisors and senior managers during the report period
by securities regulators in the recent three years
48
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
□ Applicable √Not applicable
(3) Remuneration to directors, supervisors and senior executives
Decision-making procedures, basis for determination and actual payment of the remuneration to directors ,
supervisors and senior executives
The remuneration plan for directors and executives was examined at the meeting. The Remuneration and
Assessment Committee of the Board conducted assessment on the performances of the directors and executives,
Assessment principles and procedures determined in accordance with the executive compensation management
system of directors(revised in 2021), The plan is subject to examination of the meeting of the Board.
Allowances for independent directors and supervisors are subject to approval by the Board and the Shareholders’
Meeting thereafter. The proposal of allowances for the 8th term of independent directors and supervisors was
adopted at the 2nd Provisional Shareholders’ Meeting held on December 10, 2019, and the allowance for
independent directors is RMB150,000 (tax included) per year, while it is RMB36,000 for supervisors for the
period of three years (tax included). Non employee supervisors do not enjoy the allowance
Remuneration of directors, supervisors, and executives in the report period
In RMB10,000
Total of reward Actual reward in
Name Position Sex Age Statue of duty from the total at end of
Company(Pre-tax) report term
Zheng Bin Chairman Male 57 In Office 35.00 No
Ye Zhong Director, GM Male 53 In Office 64.63 No
Yang Yongming Vice Chairman Male 57 In Office 28.00 No
Wang Gang Director, Deputy GM Male 49 In Office 107.00 No
Pan Xiaohui Director Male 43 In Office Yes
Gu Xinjian Independent Director Male 65 In Office 15.00 No
Chen Danhong Independent Director Female 57 In Office 15.00 No
Zhang Xiaoyan Independent Director Female 49 Dimission 15.00 No
Zhang Hejie Independent Director Male 63 In Office 15.00 No
Chairman of the Supervisory
Li Shijie Male 52 Dimission Yes
Committee
Wang Xiaohui Supervisor Male 54 Dimission Yes
Chairman of the Supervisory
Zhang Weijie Female 36 In Office Yes
Committee
Ying Gonghua Supervisor Male 56 Dimission 49.68 No
Lu Jianhua Employee Supervisor Male 60 In Office 46.21 No
Fang Yin Employee Supervisor Male 60 In Office 39.11 No
49
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Kong Jianqiang Deputy GM, Chief engineer Male 51 In Office 107.00 No
Li Jiansheng Deputy GM Male 58 In Office 113.14 No
Wang Zhengrong Deputy GM, Male 51 In Office 107.00 No
Deputy General Manger,
Zhao Jiamao Male 46 In Office 106.50 No
Chief accountant
Deputy GM, secretary of the
Li Guiwen Female 51 In Office 106.90 No
board
Total 970.17
Note: From January to June 2021, Zheng Bin and Yang Yongming Will be paid in Hangzhou Steam Turbine
Group, and will be paid in the company from July 2021.During their tenure as supervisors, Li Shijie and Wang
Xiaohui both received remuneration from Hangzhou Steam Turbine Group.
VI. Performance of directors' duties during the reporting period
(1) Information of the board meetings during the reporting period
Session Convening date Disclosure date Meeting resolution
The meeting examined and adopted the proposal to engage
Ms. Li Guiwen the Deputy General Manager, the Proposal
The 9th meeting of the
February 5,2021 Febraury 6 ,2021 on Adjusting the Organizational Structure of the Company,
8th term of Board
the Proposal on the Estimated Amount of Related
Transactions of the Company of 2021
The meeting examined and adopted the Work Report of
the General Manager 2020, The Work Report of the Board
2020, The Company's "14th Five-Year" Development
Strategy Planning Outline, Annual Report 2020 and
Summary, The Financial Report 2020, The Internal
Control Introspective Report 2020, The Proposal of the
provision for impairment of assets of 2020, The Proposal
on the Write-offs Asset of 2020, The Dividend Plan 2020,
The Proposal to extend the service of Pan-China CPA as
The 10th meeting of
April 15,2021 April 16,2021 auditor of the Company for year 2021, The Proposal on
the 8th term of Board
Changes in Accounting Policies, The Proposal on the use
of idle funds for short-term and medium-term financial
management by the company in 2021, The Proposal of
Remunerations for Directors and Executives for Year
2020, The Proposal on Change of Registered Address and
Amending of Articles of Association, The Proposal of
calling the Shareholders’ Annual Meeting 2020, The
Proposal on Amending the "Remuneration Management
System for Directors and Senior Executives", The
50
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Proposal on Supplementing Non-Independent Directors of
the Company's Eighth Board of Directors.
The meeting examined and adopted the proposal on
The 11th meeting of
April 21,2021 April 22,2021 Authorizing managers to dispose of convertible bonds of
the 8th term of Board
Bank of Hangzhou
The 12th meeting of The meeting examined and adopted the Full Text and
April 26,2021 April 27,2021
the 8th term of Board Official Text of the First Quarterly Report 2021
TThe meeting examined and adopted the Proposal to adjust
The 13th meeting of the members of the special committees of the board of
July 6,2021 July 7,2021
the 8th term of Board directors, The Proposal on amending the articles of
association of the Company.
The meeting examined and adopted the Proposal on
Appointment of Deputy General Manager of the Company,
The Proposal on the Adjustment of the Company's
Organizational Structure,, The Company's 2021 Restricted
Stock Incentive Plan (Draft) and its summary,
The 14th meeting of
July 11,2021 July 12,2021 Administrative Measures for the Evaluation of the
the 8th term of Board
Implementation of the Company's 2021 Restricted Stock
Incentive Plan, The Proposal on requesting the general
meeting of shareholders to authorize the board of directors
to handle matters related to the 2021 restricted stock
incentive plan.
The meeting examined and adopted the Proposal of
The 15th meeting of
August 11,2021 August 12,2021 calling the Second provisional Shareholders’ General
the 8th term of Board
Meeting of 2021
The meeting examined and adopted the Semi-annual Report
The 16th meeting of 2021 and the Summary,The Proposal on Granting Restricted
August 30,2021 August 31,2021
the 8th term of Board Stocks to Incentive Objects for the First Time
The meeting examined and adopted the Proposal on Casting
Company's Investment in Fan’chang Casting Project,the
Proposal on the Absorption and merger of the
The 17th meeting of
September 27,2021 September 28,2021 wholly-owned Subsidiaries, the Proposal on the proposed
the 8th term of Board
purchase of liability insurance of directors, supervisors and
senior management personnel, the Proposal of calling the
Third Provisional Shareholders’ General Meeting 2021.
The 18th meeting of The meeting examined and adopted the Third Quarterly
October 20,2021 October 21,2021
the 8th term of Board Report 2021
The meeting examined and adopted the Proposal on the
The 19th meeting of
November 4,2021 November 5,2021 Acquisition of Some Equity Assets and Related
the 8th term of Board
Transactions of Subsidiaries of Controlling Shareholders
51
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
, the Proposal on provide Credit guarantee for Zhongneng
Company, the Proposal of calling the Fourth Provisional
Shareholders’ General Meeting of 2021
The meeting examined and adopted the Proposal on
Granting Reserved Restricted Shares to Incentive Objects,
the Proposal of Engaging the Company’s Securities affairs ,
The 20th meeting of
December 16,2021 December 17,2021 Proposal on Adding Li Hao as an Independent Director of
the 8th term of Board
the Eighth Board of Directors of the Company, the Proposal
of calling the First provisional Shareholders’ General
Meeting of 2022.
(2) Attendance of directors at the board meetings and the general meeting of shareholders
Attendance of directors at the board meetings and the general meeting of shareholders
Number of Number of
Whether to
board meetings Number of board meetings Number of General
Number of attend the
attended board meetings attended by board meetings meetings of
Name of director board meetings board meeting
during the attended in means of attended by shareholders
absent from in person twice
reporting person communicatio proxy attended
in a row
period n
Zheng Bin 12 6 6 0 0 No 5
Ye Zhong 12 6 6 0 0 No 5
Yang Yongming 12 6 6 0 0 No 5
Wang Gang 12 6 6 0 0 No 5
Pan Xiaohui 8 4 4 0 0 No 4
Gu Xinjian 12 6 6 0 0 No 5
Chen Danhong 12 6 6 0 0 No 5
Zhang Xiaoyan 11 6 5 0 0 No 5
Zhang Hejie 12 6 6 0 0 No 5
Explanation of failure to attend the board meeting in person twice in a row
(3) Directors' objections to related matters of the Company
Whether the director raises any objection to the relevant matters of the Company
□ Yes √ No
During the reporting period, the directors did not raise any objection to the relevant matters of the Company.
(4) Other descriptions of directors' performance of duties
Whether the directors' suggestions on the Company have been adopted
√Yes □ No
The director's statement on whether the relevant suggestions of the Company have been adopted or not
52
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
During the reporting period, according to the provisions of the Company Law, the Securities Law, the Articles of
Association and other laws and regulations, the directors paid attention to the standardization of the Company's
operation, and put forward reasonable suggestions based on the long-term development of the Company in the
process of periodic reports, equity incentives, acquisition of equity of subsidiaries of Hangzhou Steam Turbine
Group, etc. from the perspective of the Company's interests. The Company listened carefully to the suggestions of
directors, organized relevant personnel to evaluate and verify related matters, and fully utilized the leadership role of
directors in scientific decision-making and standardized management.
VII. Situation of special committees under the Board of Directors during the reporting period
Put
Number forward Other
Details of
Committee of Convening important information
Member information Meeting content objections
name meetings date opinions of duty
(if any)
convened and performance
suggestions
Communicated annual report audit
March matters in the Audit Committee,
No No
10,2021 Accounting Firm with independent
directors
To review and approve the full text and
abstract of the 2020 Annual Report, 2020
Financial Accounting Report, 2020
Report on Assets Impairment Provision
Chen Danhong and Bad Debt Provision, 2020 Write-off
Audit (Convenor）,Zhang of Assets Losses, 2020 Profit Distribution
2 Plan, Proposal on 2020 Work Evaluation
Committee Xiaoyan, Gu Xinjian,
Zhang Hejie, Ye Zhong and 2021 Re-employment of Pan-China
April
Certified Public Accountants, Proposal on No No
7,2021
Changing Accounting Policies of the
Company, and Proposal on 2021
Company Proposal for Subsidiaries to
Use Idle Funds for Short- and
Medium-term Financial Management,
2020 Internal Control Self-evaluation
Report, 2020 Internal Audit Work
Summary and 2021 Internal Audit Plan
Reviewed and approved the Proposal on
Zhang February
Nominating the Deputy General Manager No No
Nomination Xiaoyan(Convenor）,Gu 6,2021
4 of the Company
committee Xinjian, Chen Danhong,
April Reviewed and approved the Proposal on
Zhang Hejie, Zheng Bin No No
15,2021 Nominating Pan Xiaohui as a Candidate
53
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
for Director
Reviewed and approved the Proposal on
July
Nominating Wang Gang as the Deputy No No
10,2021
General Manager of the Company
Reviewed and approved the Proposal on
December
Nominating Li Hao as a Candidate for No No
16,2021
Independent Director of the Company
Zheng
Bin(Convenor）,Zhang
Strategy April Discussed the Outline of the 14th
Xiaoyan, Gu Xinjian, 1 No No
Committee 7,2021 Five-Year Development Strategic Plan
Chen Danhong, Zhng
Hejie
Discussed the 2020 Remuneration Plan
for Directors and Senior Managers and
April
revised the Remuneration Management No No
7,2021
Zhang System for Directors and Senior
Remuneration
Hejie(Convenor）,Zhang Managers
and
Xiaoyan, Gu Xinjian, 2 Discussed the 2021 Restricted Stock
Assessment
Chen Danhong, Pan Incentive Plan (Draft) and its summary
Committee
Xiaohui July and Administrative Measures for the
No No
11,2021 Evaluation of the Implementation of the
Company's 2021 Restricted Stock
Incentive Plan
VIII.The working status of the board of supervisors
The board of supervisors finds out whether the company has risks during the monitoring activities during the repo
rting period
□ Yes √ No
The Supervisory Committee has no objection to the supervision matters during the reporting period.
IX. Particulars about employees.
(1)Number of staff, professional structure and educational background
Number of in-service staff of the parent company(person) 2077
Number of in-service staff of the main subsidiaries(person) 1931
The total number of the in-service staff(person) 4008
The total number of staff receiving remuneration in the current
4008
period(person)
Retired staff with charges paid by the parent company and main 30
54
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
subsidiaries (person)
Professional
Category Number of persons（person）
Production 2260
Sales 342
Tech 889
Finance 83
Administration 434
Total 4008
Education
Category Number of persons（person）
Master’s Degree 319
Bachelor 1490
College diploma 813
High school and below 1386
Total 4008
2.Particulars about the employees:
Under the premise of considering the annual benefit, with the level of competition, the ability to pay of
enterprises, price levels and other factors, in 2021 the company adequate remuneration be adjusted according to
the value of the unpaid position, according to the performance of the performance fee, adhere to labor distribution,
taking into account efficiency and equity, the maximum level of protection of the interests of employees, to
achieve a win-win business and employees. Company on a monthly basis, full and timely payment of wages,
overtime pay in accordance with national regulations, on a monthly basis.
3. Educational training for employees:
In 2021, the staff education and training work strived for realize the goal of “Talents invigorate enterprises”,
and set the work objectives of training and optimizing the “the three teams namely the management team, the
professional and technical personnel team and the high-skilled personnel team”, and upon combining with the
company’s strategic goals and the departmental performance targets and the employees’ development goals, it
well did the annual training work, formulated the “2021 Company Education and training Plan”, implemented
various training programs in an orderly manner as required, continuously improved the staff's business level and
comprehensive capabilities and made contributions to the company’s stable operation. In terms of the funding, the
company drew 2.5% of the total salary as the staff education fund, which effectively guaranteed the expenditure of
the training program. According to statistics, 108 training classes were held in 2021, the person-time of staff
received trainings reached 4600. For 2022, the company plans to carry out 160 training programs in aspects of
management, engineering technology, operation skills, quality, environment and safety education.
55
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
4. Outsourcing situation
□ Applicable √ Not applicable
X. Specification of profit distribution and capitalizing of common reserves
Formulation, implementation or adjustment of the profit distribution policy, especially the cash dividend policy
during the reporting period
√ Applicable □ Not applicable
(1) Company dividend policy principle: The Company's profit distribution policy maintains its continuity and
stability, with full attention to the reasonable return on investment for investors, and consideration of the long-term
interests of the Company, the overall interests of all shareholders and the sustainable development of the Company;
(2) Cash dividend priority: The Company can distribute dividends by cash, stock or by combination of both. On the
premise that the Company is profitable and has sufficient cash flow to meet its sustainable operation and long-term
development, the Company will give priority to the profit distribution method of cash dividend;
(3) Listen to the opinions and demands of independent directors and minority shareholders: the Board of Directors
of the Company fully considers the development stage, profit scale, cash flow status and current capital demand of
the Company, and formulates a specific dividend plan based on the opinions of shareholders, especially minority
shareholders, which is submitted to the General Meeting of Shareholders of the Company for deliberation after the
independent directors express their independent opinions; When the General Meeting of Shareholders of the
Company deliberates the specific cash dividend plan, it shall actively communicate and exchange with shareholders,
especially minority shareholders, through various channels, fully listen to the opinions and demands of minority
shareholders, and timely address to their concerns;
(4) Dividend period: In principle, the Company implements profit distribution on an annual basis. The Company
announces the dividend plan within four months after each fiscal year, and implements the distribution plan within
two months after the General Meeting of Shareholders approves it;
(5) Dividend ratio: On the premise that the Company is profitable and the cash can meet its continuous operation
and long-term development, the accumulated profit distributed by the Company in cash in the last three years is not
less than 30% of the annual distributable profit realized in the last three years;
(6) Decision-making procedure of dividend plan: According to the Articles of Association, the dividend plan of the
Company is proposed by the Board of Directors, and submitted to the General Meeting of Shareholders of the
Company for deliberation after being reviewed and approved by the Board of Directors and expressed opinions on
by independent directors;
(7) Adjustment procedure of dividend policy: If the Company is required to adjust the profit distribution policy
according to the needs of production and operation, investment planning and long-term development, the adjusted
profit distribution policy shall not violate the relevant regulations of China Securities Regulatory Commission and
the stock exchange. Opinions of independent directors and the board of supervisors shall be solicited in advance for
the proposal for adjusting the profit distribution policy, which shall be submitted to the Company's General Meeting
of Shareholders after deliberation by the Company's Board of Directors, and be implemented only after more than
two-thirds of the voting rights held by shareholders present at the General Meeting of Shareholders.
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Special description of cash dividend policy
Whether it meets the requirements of the Articles of Association or the resolution of the
Yes
general meeting of shareholders:
Whether the dividend standard and proportion are explicit and clear: Yes
Whether the relevant decision-making procedures and mechanisms are complete: Yes
Whether the independent directors have performed their duties and played their due role: Yes
Whether the minority shareholders have the opportunity to fully express their opinions and
Yes
demands, and whether their legitimate rights and interests have been fully protected:
Whether the cash dividend policy is adjusted or changed, and whether the conditions and
Yes
procedures are compliant and transparent:
During the reporting period, the Company made a profit and the profit available to shareholders of the parent
company was positive, but no cash dividend distribution plan was put forward.
□ Applicable √ Not applicable
Profit distribution and capitalization of capital reserve during the reporting period
√ Applicable □ Not applicable
Bonus shares for every ten shares(Shares) 3
Cash dividend for every ten shares (Yuan)(Tax-included) 4.00
A total number of shares as the distribution basis(shares) 753,898,600
Cash dividend amount (yuan, including tax 301,559,440.00
Other means (such as repurchase of shares) cash dividend amount (yuan) 0.00
Total cash dividend (yuan, including tax) 301,559,440.00
Distributable profit (yuan) 3,493,193,115.19
Proportion of cash dividend in the distributable profit 57.14%
Cash dividend distribution policy
Where the distribution of profits is carried out in the company's development stage that belongs to a mature stage and there is
significant capital expenditure arrangement, the proportion of cash dividends in this profit distribution shall be at least 40%.
Details of profit distribution or reserve capitalization plan
In 2021, with the total share capital of 754,010,400 shares at the end of the year deducting 111,800,that is , the base is 753,898,600,
the Company would distribute cash dividend to all the shareholders at the rate of CNY 4.0 for every 10 shares (with tax inclusive) ,
3 bonus shares（including tax）and no reserve would be converted into share capital. The profit distribution does not involve
treasury shares repurchased by the Company.
XI. Implementation Situation of Stock Incentive Plan of the Company, Employee Stock Ownership Plan or
Other Employee Incentive Measures
√ Applicable □ Not applicable
(1) Equity incentive
(I) On July 11, 2021, the 14th Meeting of the Eighth Board of Directors reviewed and approved the Proposal
57
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
on the Company's Restricted Stock Incentive Plan (Draft) in 2021 and its Summary, the Proposal on the
Company's Implementation Assessment Management Measures for the Restricted Stock Incentive Plan in 2021,
and the Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors to
Handle Matters Related to the Restricted Stock Incentive Plan in 2021, and the Ninth Meeting of the Eighth
Supervisors of the Company reviewed and approved the above related proposals. The Company disclosed related
announcements such as the Restricted Stock Incentive Plan (Draft) and its Summary in 2021, the Implementation
Assessment Management Measures for the Restricted Stock Incentive Plan in 2021, the Incentive Object List of
the Restricted Stock Incentive Plan in 2021, the Self-inspection Form of Equity Incentive Plan, and the Legal
Opinions of Shanghai Allbright Law Offices on the 2021 Restricted Stock Incentive Plan of Hangzhou Steam
Turbine Co., Ltd.
Independent directors of the Company expressed their independent opinions on whether the equity
incentive plan is conducive to the sustainable development of the Company and whether there is any harm to the
interests of the Company and all shareholders.
(II) On August 12, 2021, the Company disclosed the Announcement on the Approval of Equity Incentive
Plan by Hangzhou SASAC. The Company received the Reply of Hangzhou Steam Turbine Co., Ltd. on
Implementing the Restricted Stock Incentive Plan in 2021 (HGZK [2021] No.45), and Hangzhou SASAC agreed
in principle that the Company should implement the restricted stock incentive plan in 2021.
On August 23, 2021, the Company disclosed the Publicity and Verification Opinions of the Board of
Supervisors of the Company on the List of Incentive Objects of Restricted Stock Incentive Plan. The Board of
Supervisors of the Company believes that the incentive objects listed in this incentive plan comply with the
Administrative Measures, Trial Measures, Notice and other laws, regulations, normative documents and the scope
and conditions of incentive objects stipulated in the Incentive Plan (Draft), and there is no circumstances that
forbids to be incentive objects, and its qualification as the incentive objects of this incentive plan is legal and
effective.
On August 23, 2021, the Company disclosed the Independent Financial Advisor's Report of CITIC
Securities Co., Ltd. on the Restricted Stock Incentive Plan (Draft) in 2021 of Hangzhou Steam Turbine Co., Ltd.
(IV) On August 27, 2021, the Company held the Second provisional Shareholders' General Meeting in 2021,
which reviewed and approved the Proposal on the Company's Restricted Stock Incentive Plan in 2021 and its
Summary, the Proposal on the Company's Implementation Assessment Management Measures for the Restricted
Stock Incentive Plan in 2021, and the Proposal on Requesting the General Meeting of Shareholders to Authorize
the Board of Directors to Handle Matters Related to the Restricted Stock Incentive Plan in 2021.
Meanwhile, the Company disclosed the Self-inspection Report on Insider Information of Restricted Stock
Incentive Plan in 2021 and Stock Trading of Incentive Objects.
(V) On August 30, 2021, the Company convened the 16th Meeting of the Eighth Board of Directors and the
11th Meeting of the Eighth Board of Supervisors, and respectively reviewed and approved the Proposal on
Granting Restricted Stocks to Incentive Objects for the First Time. The Board of Directors of the Company
considered that the granting conditions of restricted stocks stipulated in this incentive plan had been fulfilled, and
58
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
agreed to grant 18.17 million restricted stocks to 457 incentive objects who meet the granting conditions on
September 1, 2021 for the first time, at a price of HK$ 6.825 per share. The Board of Supervisors of the Company
verified the list of incentive objectives again and issued a clear consent opinion. Independent directors of the
Company expressed their agreed independent opinions on this.
(VI) On October 22, 2021, the Company completed the registration of granting restricted shares for the first
time, with 455 people registered for the first time and 18,060,000 shares registered.
(VII) On December 16, 2021, the 20th Meeting of the 8th Board of Directors and the 13th Meeting of 8th
Board of Supervisors of the Company reviewed and approved the Proposal on Granting Reserved Restricted
Shares to Incentive Objects.. it is agreed that December 16, 2021 will be reserved for granting restricted shares,
and 1,380,000 restricted shares will be granted to 37 eligible incentive objects at a grant price of HK$ 6.825 per
share. Independent directors of the Company expressed independent opinions on relevant proposals of the Board
of Directors
（VIII) On January 14, 2022, the Company completed the registration of reserved grant of restricted shares,
with 37 registered shareholders reserved and 1,380,000 registered shares.
Evaluation mechanism and incentives of senior managers
√ Applicable □ Not applicable
In shares
Number
Number Exercise
Number Number of newly Number
Number of of price of
Market price of of granted of
exercisable exercised exercised Grant price
at the end of restricted unlocked restricted restricted
shares shares shares of restricted
Name Position the reporting stocks shares in stocks stocks
during the during during the stock
period held at the during held at
reporting the reporting (RMB/share)
(RMB/share) the current the the end of
period reporting period
beginning period reporting the period
period (RMB/share)
period
Zheng Bin Board Chairman 0 0 13.2288 0 0 250,000 5.6764 250,000
Ye Zhong Director, GM 0 0 13.2288 0 0 250,000 5.6764 250,000
Yang Vice Board
0 0 13.2288 0 0 200,000 5.6764 200,000
Yongming Chairman
Wang Director, Deputy
0 0 13.2288 0 0 200,000 5.6764 200,000
Gang GM
Deputy GM,
Li Guiwen secretary of the 0 0 13.2288 0 0 200,000 5.6764 200,000
board
Kong Deputy GM,
0 0 13.2288 0 0 200,000 5.6764 200,000
Jianqiang Chief Engineer
Li Deputy GM 0 0 13.2288 0 0 200,000 5.6764 200,000
59
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Jiansheng
Wang
Deputy GM 0 0 13.2288 0 0 200,000 5.6764 200,000
Zhengrong
Zhao Deputy, GM,
0 0 13.2288 0 0 200,000 5.6764 200,000
Jiamao Chief accountant
Deputy
Secretary of the
Li Shijie Party Committee 0 0 13.2288 0 0 200,000 5.5660 200,000
and Chairman of
the Trade union
Secretary of the
Cai Commission for
0 0 13.2288 0 0 200,000 5.6764 200,000
Weijun discipline
inspection
Total -- 0 0 -- -- 0 0 2,300,000 -- 2,300,000
Evaluation mechanism and incentive situation of senior managers
The Company conducts performance appraisal for senior managers according to the Management Measures for the
Implementation of Restricted Stock Incentive Plan in 2021, Detailed Rules for Performance Appraisal of Restricted
Stock Incentive Objects of Hangzhou Steam Turbine Co., Ltd. (Trial) and the Remuneration Management System
for Directors and Senior Managers of the Company.
(2) Implementation of ESOP
□ Applicable √ Not applicable
(3) Other employee incentives
□ Applicable √Not applicable
XII. Construction and implementation of internal control system during the reporting period
(1) Construction and implementation of internal control
According to Basic Standards for Internal Control of Enterprises, Guidelines for Application of Internal
Control, Guidelines for Evaluation of Internal Control and Guidelines for Internal Control of Listed Companies
issued by Shenzhen Stock Exchange, the Company formulated the Internal Control Manual of the Company,
comprehensively combed the Company's business processes, identified key risk points, controlled the risk points
according to the Company's actual situation, and the internal audit organization of the Company regularly evaluated
the above control process and effect, and put forward rectification items and improvement suggestions. The Audit
Committee of the Company guided and supervised the internal control of the Company.
During the reporting period, according to the identification of major internal control defects in the Company's
financial report, there were no major internal control defects in the financial report on the base date of the internal
control evaluation report.
60
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
According to the identification of major defects in the internal control of the Company's non-financial reports, the
Company found no major defects in the internal control of non-financial reports on the base date of the internal
control evaluation report.
There were no factors influencing the evaluation conclusion of internal control effectiveness between the base
date of the internal control evaluation report and the date of issuance of the internal control evaluation report.
(2)Details of major internal control defects found during the reporting period
□ Yes √ No
XIII. Management and control of the Company's subsidiaries during the reporting period
Problems Subsequent
Integration Measures taken Solution
Company name Integration plan encountered in planned
progress for solution progress
integration solution
Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable
XIV. Internal control self-evaluation report or internal control audit report
(1)Self-evaluation report on internal control
Disclosure date of appraisal report on
March 31,2022
internal control
Disclosure index of appraisal report on
Disclosed by http://www.cninfo.com.cn dated March 31, 2022
internal control
Proportion of total unit assets covered by
appraisal in the total assets of the
100.00%
consolidated financial statements of the
company
Proportion of total unit incomes covered
by appraisal in the total business incomes
100.00%
of the consolidated financial statements of
the company
Standards of Defects Evaluation
Type Financial Report Non-financial Report
Deficiency characterized as below will be (1) Punishment received by governments
treated as fatal defects: To correct the fatal below provincial level ( including
errors already published in the financial provincial level) but no negative effects
report （ except for the retrospection and for our company’s periodic report
Standard
adjustments of previous years because of disclosure will be considered as a general
policies changing and other objective factors deficiency; (2) or punishments from
changing);fatal errors already discovered by national governments above provincial
auditor, unidentified in the current financial level but no negative effects for our
61
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
report; any fraud among top management; company’s periodic report disclosure will
invalid monitoring to the financial report be considered as a significant deficiency;
from audit committee and internal audit (3) external official disclosure has been
department. already carried out and brought certain
negative effects to our company’s
periodic report disclosure will be
considered as a fatal deficiency.
In accordance with the degree of importance 1) Losses < consolidating 3% of pre-tax
of deficiency that may cause financial profit, will be asserted as general
report errors, our company defined deficiencies; (2) 3% of combined pre-tax
quantitative identification standard of profit ≤ losses < 5% of combined pre-tax
financial report internal deficiency control as profit, will be asserted as significant
per the average of the last three-year total deficiencies; (3) losses ≥5% of combined
profit. 1) errors reported indicator < pre-tax profit, will be asserted as fatal
Standards of Quantization consolidating 3% of pre-tax profit, will be deficiencies.
asserted as general deficiencies; (2) 3% of
combined pre-tax profit ≤ errors reported
indicator < 5% of combined pre-tax profit,
will be asserted as significant deficiencies;
(3) errors reported indicator ≥5% of
combined pre-tax profit, will be asserted as
fatal deficiencies.
Number of major defects in financial
0
reporting（a）
Number of major defects in non financial
0
reporting (a)
Number of important defects in financial
0
reporting（a）
Number of important defects in non
0
financial reporting（a）
(2) Internal Control audit report
√ Applicable □Not applicable
Review opinions in the internal control audit report
As far as our best understanding, Hangzhou Steam Turbine Co., Ltd. has been conducting effective internal control over its
financial reporting system in all material aspects we observed as of December 31, 2021, and has been following with the Enterprise
Internal Control Criteria.
Disclosure of internal audit report Disclosure
Disclosure date of audit report
March 31,2022
of internal control (full-text)
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Index of audit report of
Disclosed by http://www.cninfo.com.cn dated March 31, 2022
internal control (full-text)
Internal audit report’s opinion Unqualified audit opinion
Non-financial reporting the existence of
No
significant deficiencies
Has the CPAs issued a qualified auditor’s report of internal control .
□ Yes √No
Does the internal control audit report issued by the CPAs agree with the self-assessment report of the Board of
Directors
√Yes □No
XV. Rectification of self-examination problems in special governance actions of listed companies
None
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
V. Environmental & Social Responsibility
I. Significant environmental issues
Whether the Company or any of its subsidiaries is identified as a key polluter by the environment authorities
√ Yes □ No
Administrative penalties for environmental problems during the reporting period
Impact on the
Company's
Name of company or Reasons for production and
Violation situation Penalty result rectification
subsidiary punishment operation of listed
measures
companies
Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable
Prevention and control of pollution facilities construction and operation
None
Administrative penalties for environmental problems during the reporting period
□Applicable √ Not applicable
Reasons for not disclosing other environmental information
（I）Environmental protection
The company has adopted cleaner production management in an all-round way and started cleaner
production audit, which not only reduces consumption and efficiency, but also reduces the pressure and cost of
end treatment. The company's environmental management system has been operating for many years, and has
strictly abided by the provisions of relevant national laws and regulations and the principle of continuous
improvement. The company formulates annual environmental protection targets and environmental management
plans every year. During the reporting period, there was no environmental pollution accident or over-emission
incident.
The company also continues to promote the awareness of social responsibility in the process of product
design and process design, and embodies the concept of green environmental protection in the design process. The
product design process fully considers the possibility of environmental pollution and the impact on occupational
health, meets the international environmental protection requirements, reduces noise, reduces emissions, and uses
harmless materials and processes. For example, by taking measures such as sound insulation enclosure, the
running noise of steam turbine can meet the standard. Set up thermal insulation layer to reduce its thermal
radiation to a safe level. In all kinds of nonmetallic materials used in steam turbines, components harmful to
human body are eliminated.
(II) Energy conservation and emission reduction
In recent years, the company has attached great importance to energy conservation and emission reduction
according to the overall arrangement and requirements of its superiors. It has strengthened its leadership and
carefully deployed various work measures to further promote energy conservation and emission reduction at
various levels to ensure solid results in energy conservation and emission reduction.
II. Social responsibilities
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
For details of the Company's social responsibility report, please refer to the Social Responsibility Report of
Hangzhou Steam Turbine Co., Ltd. for 2019-2021 published by the Company on CNINF
(http://www.cninfo.com.cn) on March 31, 2022.
III. Consolidate and expand the achievements of poverty alleviation and rural revitalization
The Company participated in the assistance activities of "Connecting Villages and Towns" in Hangzhou, and
from 2017 to 2021, it provided assistance activities to Zitong Town, Chun'an County with an annual fund of RMB
150,000.
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
VI. Important Events
I. The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the
reporting period made by the company, shareholder, actual controller, acquirer, director, supervisor,
senior management personnel and other related parities.
√Applicable□ Not applicable
Time of making
Period of
Commitment commitment Fulfillment
Commitment Type Contents commitment
maker
Hangzhou
Turbine Power Commitment
Group Co., to the transfer http://www.cn
Ltd., target info.com.cn
Other commitments made to minority Hangzhou company's (Announceme November Under
shareholders Turbine Power accounts nt No.: 16,2021 Fulfillment
Technology receivable 2021-101 and
Co., Ltd. and recovery and 2021-102)
other other matters
transferors
Executed timely or not? Yes
If the commitments failed to complete
the execution when expired, should
specifically explain the reasons of Not applicable
unfulfillment and the net stage of the
working plan
II. Particulars about the non-operating occupation of funds by the controlling shareholder
□ Applicable √ Not applicable
No such cases in the reporting period.
III. Illegal provision of guarantees for external parties
□ Applicable √ Not applicable
No such cases in the reporting period.
IV. Explanation of the Board of Directors on the latest "Non-standard Audit Report"
□ Applicable √ Not applicable
66
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
V. Notes for “non-standard audit report” of CPAs firm during the Reporting Period by board of directors
and supervisory board
□ Applicable √ Not applicable
VI. Explain change of the accounting policy, accounting estimate and measurement methods as compared
with the financial reporting of last year.
√Applicable □ Not applicable
1. The Company has implemented the revised Accounting Standards for Business Enterprises No.21-Leasing
(hereinafter referred to as the new leasing standards) from January 1, 2021 (hereinafter referred to as the first
implementation date).
(1) For the contracts existing before the first implementation date, the Company chooses not to re-evaluate whether
they are leases or include leases.
(2) For the lease contract in which the Company is the lessee, the Company adjusts the retained earnings at the
beginning of the reporting period and other related items in the financial statements according to the cumulative
impact of the new leasing standards and the original standard on the first implementation date, and does not adjust
the information in the comparable period. The specific treatment is as follows:
For the financial lease before the first implementation date, the Company measures the right-to-use assets and lease
liabilities respectively on the first implementation date according to the original book value of the financial lease
assets and the financial lease payments payable.
For the operating lease before the first implementation date, the Company measures the lease liabilities on the first
implementation date according to the present value of the remaining lease payment discounted at the incremental
borrowing rate on the first implementation date, and measures the right-to-use assets according to the amount equal
to the lease liabilities, and makes necessary adjustments according to the prepaid rent.
On the first implementation date, the Company conducts impairment test on the right-to-use assets and makes
corresponding accounting treatment according to the provisions of Note III (XVII) to this Financial Statement.
1) The main impacts of the implementation of the new leasing standards on the Company's financial statements on
January 1, 2021 are as follows:
In RMB
Balance Sheet
Itesm Impact of new leasing
December 31,2020 January 1,2021
standards adjustment
Other current assets 50,652,585.75 -635,765.86 50,016,819.89
Right-to-use assets 28,461,441.04 28,461,441.04
Non-current liabilities due within one year 1,001,088.89 5,631,931.50 6,633,020.39
Lease liabilities 22,193,743.68 22,193,743.68
2) The weighted average value of the Company's incremental borrowing interest rate adopted for the lease liabilities
included in the balance sheet on the first implementation date is 4.12%.
3) Simplification of operating lease before the first implementation date
① For lease contracts completed within 12 months after the first implementation date, the Company adopts
67
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
simplified method, and does not recognize the right-to-use assets and lease liabilities;
② When measuring lease liabilities, the Company adopts the same discount rate for lease contracts with similar
characteristics;
③ The measurement of the right-to-use assets does not include the initial direct cost;
④ The Company determines the lease term according to the actual exercise of the option to renew or terminate the
lease before the first implementation date and other latest information;
⑤ As an alternative to the impairment test of the right-to-use assets, the Company evaluates whether the contract
containing lease is a loss contract before the first implementation date according to the Accounting Standards for
Business Enterprises No.13-Contingencies, and adjusts the right-to-use assets according to the loss reserve amount
included in the balance sheet date before the first implementation date;
⑥ For the lease change before the first implementation date, the Company makes accounting treatment according to
the final arrangement of the lease change.
The above simplification has no significant impact on the Company's financial statements.
(3) For the operating lease contracts with low-value assets that existed before the first implementation date, the
Company adopts simplified methods, and does not recognize the right-to-use assets and lease liabilities, and treats
them according to the new leasing standards since the first implementation date.
(4) The lease contract of the Company as the lessor shall be accounted for according to the new leasing standards
from the first implementation date.
2. Since January 26, 2021, the Company has implemented the Interpretation No.14 of Accounting Standards for
Business Enterprises issued by the Ministry of Finance in 2021, and this change of accounting policy has no impact
on the Company's financial statements.
3. Since December 31, 2021, the Company has implemented the "Relevant Presentation of Centralized Fund
Management" in Interpretation No.15 of Accounting Standards for Business Enterprises promulgated by the
Ministry of Finance, and this change of accounting policy has no impact on the Company's financial statements.
VII. Explain change of the consolidation scope as compared with the financial reporting of last year.
√ Applicable □ Not applicable
(I) Business merger not under the same control
1. Business merger not under the same control in the current period
(1) Basic information
In RMB
Cost for equity
Time of equity Equity acquisition
Name of the acquiree acquisition Equity acquisition method
acquisition ratio (%)
Capital contribution, capital
Zhongrun Company [Note] 11,899,308.84 51.99
increase and equity transfer
(Continued)
Basis for Income of the Net profit of the acquiree from the
Name of the acquiree Acquisition date determining the acquiree from the date of purchase to the end of the
acquisition date acquisition date to period
68
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
the end of the period
Zhongrun Company 2021.1.4 Gained control 5,786,975.59 -2,951,633.70
[Note] On April 17, 2020, the subsidiary Turbine Company acquired 6.99% equity of Zhongrun Company through
equity transfer, and held 51.99% equity of Zhongrun Company in total as of that date.
(2) Other note
On January 4, 2021, Zhongrun Company's shareholders' meeting decided to amend the Articles of Association.
Before this amendment, Zhongrun Company had 3 board members, with its subsidiaries Turbine Company,
Zhejiang Tianquan Surface Technology Co., Ltd. and Ningbo Daxie Development Zone Huashun Industry & Trade
Co., Ltd. each recommending one. The resolution of the Board of Directors shall be unanimously approved by all
directors. After this revision, Zhongrun Company has 5 board members, 3 recommended by Turbine Company, 1
recommended by Zhejiang Tianquan Surface Technology Co., Ltd. and 1 by Ningbo Daxie Development Zone
Huashun Industry & Trade Co., Ltd., and the resolutions of the Board of Directors shall be approved by half of all
directors. Therefore, the Company has included it in the scope of consolidated financial statements since January
2021
2. Merger cost and goodwill
In RMB
Items Zhongrun Company
Merger cost 12,221,508.84
Fair value of equity held before the acquisition date at the acquisition date 12,221,508.84
Total merger cost 12,221,508.84
Less: fair value share of identifiable net assets obtained 5,729,813.25
Investment loss [Note] 6,491,695.59
[Note] Turbine Company, a subsidiary company, merged with Zhongrun Company under the same control in the
current period, and the difference between the cost of business merger and the fair value share of identifiable net
assets of the acquiree of RMB 6,491,695.59 was the investment loss, which was included in the current profits and
losses.
3. Identifiable assets and liabilities of the acquiree on the acquisition date
(1) Details
In RMB
Zhongrun Company
Items
Fair value at the acquisition date Book value at the acquisition date
Assets
Current assets 3,176,621.59 3,176,621.59
Non-current assets 9,372,055.51 9,372,055.51
Liabilities
Current liabilities 1,219,742.20 1,219,742.20
Net assets 11,328,934.90 11,328,934.90
Less：Minority shareholders’ equity 5,599,121.65 5,599,121.65
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Net assets obtained 5,729,813.25 5,729,813.25
The recognition method of the fair value of identifiable assets and liabilities
The fair values of identifiable assets and liabilities are assessed and determined by the Company's management
according to the asset assessment report (TYPB Zi [2022] No.0099).
4. Profits or losses arising from remeasurement of equity held before the acquisition date according to fair value
In RMB
Profits or losses
arising from Methods and main
The amount of other comprehensive
Book value of Book value of equity remeasurement assumptions for
income and other changes in owner's
equity originally originally held of equity determining the fair
Name of the equity related to the equity originally
held before the before the originally held value of the equity
acquiree held before the acquisition date
acquisition date at acquisition date at before the held before the
transferred to investment
the acquisition date the acquisition date acquisition date acquisition date on
income/retained income
according to fair the acquisition date
value
Zhongrun 12,221,508.84 5,729,813.25 -6,491,695.59 Asset Appraisal
Company Report (TYPB Zi
[2022] No.0099)
(II) Business merger under the same control
1. Business merger under the same control in the current period
In RMB
Proportion of equity
Basis for business
acquired in business
Name of the mergee merger under the same Merger date Basis for determining the merger date
merger
control
New Energy Company 80.775% [Note] Under the control by 2021-11-9
Sales Company 30.00% Hangzhou Steam 2021-11-11
China Mechanical Turbine Group before Complete the industrial and commercial
55.00% 2021-11-23
Institute Company and after the merger change registration
Ranchuang Company 40.00%[Note] and such control is not 2021-11-23
Hangfa Company 85.00% temporary 2021-11-9
(Continued)
In RMB
Income of the mergee Net profit of the
from the beginning of mergee from the
Income of the mergee Net profit of the mergee in the
the current beginning of the
Name of the mergere in the comparison comparison period
combination period to current combination
period
the merger date period to the merger
date
New Energy Company 149,458,863.67 7,395,005.14 103,653,434.98 1,078,850.05
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Sales Company 188,610,844.58 8,432,280.45 221,357,395.87 8,621,258.15
China Mechanical 3,614,549.00 759,480.49 2,575,133.31 344,026.48
Institute Company
Ranchuang Company 597,931.22 460,570.72
Hangfa Company 182,619,803.38 -46,185,900.45 290,563,893.08 7,873,048.96
[Note] (1) Before the merger date, the Company held 15% equity of New Energy Company, and in the current
period, 80.775% equity was acquired through enterprise merger under the same control, while 4.225% equity was
acquired through minority equity acquisition, and 100% equity of New Energy Company was held in total on the
merger date;
(2) Before the merger date, the Company held 45.60% equity of the Company, and in the current period, 40% equity
was acquired through enterprise merger under the same control. On the merger date, 85.60% equity of Ranchuang
Company was held in total;
(3) In the current period, Zhongneng Company, a subsidiary company, acquired 85% equity of Hangfa Company
through enterprise merger under the same control, and acquired 15% of minority equity at the same time. 100%
equity of Hangfa Company was held in total on the merger date.
2. Merger cost
In RMB
Items New Energy Sales Company China Ranchuang Hangfa Company
Company Mechanical Company
Institute
Company
Merger cost 20,608,543.31 28,200,000.00 1,390,093.91 21,867,906.69 238,101,172.96
Cash 20,608,543.31 28,200,000.00 1,390,093.91 10,139,132.68 238,101,172.96
Book value of equity acquired 11,728,774.01
before the merger date
3. Book value of the assets and liabilities of the mergee at the merger date
In RMB
New Energy Company Sales Company China Mechanical Institute
Company
Items
End of last
Merger date End of last period Merger date End of last period Merger date
period
Assets
Monetary fund 33,589,914.95 40,569,332.78 15,501,453.30 20,033,191.99 1,003,348.30 1,185,634.20
Notes receivable 488,000.00
Account receivable 56,243,377.98 35,098,137.82 54,812,233.58 43,427,205.04 1,961,924.08 242,457.32
Financing of 23,565,800.00 33,022,737.80 2,702,555.00 1,500,000.00
receivables
Prepayments 10,087,834.14 8,699,648.50 1,333,702.76 392,444.61 366,380.00
Other account 2,409,988.99 1,150,090.93 281,078.18 545,692.19
receivable
71
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Inventories 16,527,789.94 13,741,179.88 1,094,527.22 1,052,440.13
Contract assets
Other current asset 1,118,383.61 1,104,147.21 279,176.20 291,503.72 36,606.61
Long-term 167,541,093.21 242,241,093.20 -
receivable
Other
non-current
financial assets
Property 13,989,564.41 14,897,525.04
investment
Fixed assets 5,448,177.71 14,814,604.89 17,937,519.22 18,166,503.25 3,901.86 6,787.49
Construction in 656,954.01 355,883.13
progress
Intangible assets 424,106.34 467,221.39 4,797,285.32 4,891,873.62
Deferred income 15,261,735.86 20,035,173.46 846,472.47 560,115.12
tax asset
Liabilities
Short-term loans
Notes payable 46,963,029.38 31,791,800.73
Account payable 24,676,627.21 32,643,315.77 57,145,994.47 48,891,509.41 161,100.00 280,000.00
Advance receipts 40,361,031.90 64,774,760.16 1,227,930.22 1,061,520.22
Contract liabilities
Employees’ wage 302,650.49 3,716,383.27 942,334.02 831,364.51
payable
Tax payable 1,691,359.83 52,528.77 2,189,430.49 2,971,566.35 19,404.61 16,676.48
Other account 242,284,362.54 309,715,360.29 1,079,554.51 936,979.75
payable
Other current 3,827,183.32 3,532,265.95
liability
Long-term payable
Expected
liabilities
Deferred income 5,908,796.29 6,615,236.38
Net assets -27,888,041.94 -35,283,047.08 45,738,481.67 44,806,201.22 2,788,669.63 2,029,189.14
Less：Minority 32,016,937.17 31,364,340.85 1,254,901.33 913,135.11
shareholders’ -1,178,269.77 -1,490,708.74
equity
Net assets obtained -26,709,772.17 -33,792,338.34 13,721,544.50 13,441,860.37 1,533,768.30 1,116,054.03
(Continued)
72
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
In RMB
Ranchuang Company Hangfa Company
Items
Merger date End of last period Merger date End of last period
Assets
Monetary fund 40,563,903.64 47,896,082.84 40,752,363.53 60,344,413.02
Notes receivable
Account receivable 53,067,036.69 158,702,565.77
Financing of receivables 13,601,386.25 14,412,623.99
Prepayments 48,800.00 5,337,181.82 7,986,176.84
Other account receivable 855.00 12,862,762.67 4,416,041.94
Inventories 149,314,789.83 120,027,461.76
Contract assets 56,486,319.68
Other current asset 96,000.00 255,511.19
Long-term receivable
Other non-current financial 137,760.74 137,760.74
assets
Property investment 6,979,407.17 7,356,528.53
Fixed assets 50,317.99 54,583.23 158,287,888.57 167,896,233.80
Construction in progress
Intangible assets 35,928,778.95 36,753,683.25
Deferred income tax asset 11.25
Liabilities
Short-term loans 36,052,680.83 36,054,863.62
Notes payable 36,380,770.82 34,650,000.00
Account payable 189,733,165.45 193,512,312.79
Advance receipts 533,345.79 51,998,565.24
Contract liabilities 54,594,257.80
Employees’ wage payable 30,156.66 7,553,182.91 9,334,140.88
Tax payable 12,615.31 15,023.86 8,933,134.62 13,099,758.45
Other account payable 254,777.02 125,397.98 3,166,487.61 3,686,131.70
Other current liability 7,097,253.51
Long-term payable 2,023,928.32 2,023,928.32
Expected liabilities 6,366,270.01
Deferred income 15,375,833.65 23,456,689.39 128,333,278.75 135,659,479.90
Net assets 24,970,995.65 24,373,064.43 52,083,919.48 98,269,819.93
73
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Less：Minority shareholders’ 3,595,823.37 3,509,721.28
7,812,587.92 14,740,472.99
equity
Net assets obtained 21,375,172.28 20,863,343.15 44,271,331.56 83,529,346.94
(V) Changes in the scope of merger due to other reasons
1. Increase of merger Scope
Company name Equity acquisition method Time of equity acquisition Subscribed contribution Ratio of contributions
amount
Hanhui Casting Newly established 2021.11.25 67 million yuan 67.00%
Company
Note: On November 25, 2021, the subsidiary Casting and Forging Company and Wuhu Fanchang Chungu Industrial
Investment Fund Co., Ltd. jointly invested in the establishment of Anhui Casting Company. As of December 31,
2021, the investors have not paid their capital contributions, and Anhui Casting Company has not yet started
operations
2. Reduction of merger scope
In RMB
Equity
Time of equity Net assets at the Net profit from beginning of
Company name disposal
disposal disposal date the period to the disposal date
method
Kunming Hangzhong Steam Turbine Cancelled 2021.11.25 7,825,445.34 3,355,286.33
Technology Service Co., Ltd.
Shijiazhuang Hangneng Steam Turbine Cancelled 2021.12.15 6,224,126.00 1,136,869.87
Technology Service Co., Ltd.
Urumqi Hangzhong Steam Turbine Cancelled 2021.12.31 4,271,883.05 -90,645.42
Technology Service Co., Ltd.
Tangshan Hangzhongneng Steam Turbine Cancelled 2021.12.1 4,389,495.50 101,775.52
Technology Service Co., Ltd.
Guangxi Hangzhongneng Steam Turbine Cancelled 2021.12.28 2,520,015.55 23,134.73
Technology Service Co., Ltd.
Jilin Hangzhongneng Steam Turbine Cancelled 2021.12.31 3,775,367.90 1,108,026.30
Technology Service Co., Ltd.
Chengdu Hangzhongneng Technology Co., Cancelled 2021.12.29 570,141.94 -496,261.90
Ltd.
Luoyang Hangqi Steam Turbine Technology Cancelled 2021.12.31 4,516,655.94 940,047.48
Service Co., Ltd.
Heavy Industry Company(Note) M &A 2021.12.10 1,006,529,090.99 2,106,291.93
[Note] On September 29,2021,Due to the needs of business development, the Company signed a Merger Agreement
with its subsidiary Hangzhou Steam Turbine Heavy Industry Co., Ltd., which was absorbed and merged on
September 30, 2021 as the base date, and whose legal person status was cancelled.
74
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
VIII. Engagement/Disengagement of CPAs
CPAs currently engaged
Pan-China Certified Public Accountants (Special common
Name of the domestic CPAs
partnership)
Remuneration for domestic accounting firm（In RMB 10,000） 116
Successive years of the domestic CPAs offering auditing services 23
Names of the certified public accountants from the domestic
Sheng Weiming,Ye Xianbin
CPAs
Successive years of the domestic CPAs offering auditing
5
services
Has the CPAs been changed in the current period
□ Yes √No
Engaging of CPA for internal auditing, financial consultants or sponsors
√ Applicable □ Not applicable
Pan-China Certified Public Accountants is engaged the auditor of internal control system for the current year.
With payment of RMB 260,000 for its service.
IX.Situation of Facing Listing Suspension and Listing Termination after the Disclosure of the Yearly
Report
□Applicable √ Not applicable
X. Relevant Matters of Bankruptcy Reorganization
□Applicable √ Not applicable
No such cases in the reporting period.
XI. Matters of Important Lawsuit and Arbitration
□Applicable √ Not applicable
No such cases in the reporting period.
XII. Situation of Punishment and Rectification
□Applicable √ Not applicable
No such cases in the reporting period.
XIII. Credit Condition of the Company and its Controlling Shareholders and Actual Controllers
□Applicable √ Not applicable
XIV. Material related transactions
1. Related transactions in connection with daily operation
□Applicable √ Not applicable
75
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
No such cases in the reporting period.
2. Related-party transactions arising from asset acquisition or sale
√ Applicable □Not applicable
Content Pricing Book Evaluation Settlement
Type of Transf
of principle value of value of method of
Related related er Transaction
Related related of related transferred transferred related Disclosu Disclosure
associatio party price profit and
party party party assets assets party re date index
n transacti (RMB loss (RMB
transacti transaction (RMB (RMB transaction
on '0,000) '0,000)
on s '0,000) '0,000) s
The
compan
y
acquired
80.775%
equity of
Hangzho the new
u Steam energy
Turbine compan
Group, Holding y held http://www.c
Business
Hangzho subsidiarie by ninfo.com.cn
merger Assessed
u Guoyu s of the Hangzho 2,060. Cash 2021-11 (Announcem
under valuation -3,614.56 2,060.85 0.00
Property Group and u Steam 85 settlement -4 ent
the same value
Manage parent Turbine No.:2021-95
control
ment company Group )
Co., and its
Ltd(Note subsidiar
) y
Hangzho
u Guoyu
Property
Manage
ment
Co., Ltd.
The
compan
y http://www.c
Business
acquired ninfo.com.cn
merger Assessed
Group 30.00% 2,820. Cash 2021-11 (Announcem
HSTG under valuation 1,225.01 2,820.00 0.00
Company equity of 00 settlement -4 ent
the same value
the sales No.:2021-95
control
compan )
y held
by
76
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Hangzho
u Steam
Turbine
Group
Subsidia
ry
Zhongne
ng
Compan
y
http://www.c
Business acquired
ninfo.com.cn
merger 85.00% Assessed
Group 23,810 Cash 2021-11 (Announcem
HSTG under equity of valuation 5,223.93 23,810.12 0.00
Company .12 settlement -4 ent
the same Hangfa value
No.:2021-95
control Compan
)
y held
by
Hangzho
u Steam
Turbine
Group
The
compan
y
acquired
55.00%
equity of
http://www.c
Business China
ninfo.com.cn
merger Mechani Assessed
Group Cash 2021-11 (Announcem
HSTG under cal valuation 126.34 139.01 139.01 0.00
Company settlement -4 ent
the same Institute value
No.:2021-95
control Compan
)
y held
by
Hangzho
u Steam
Turbine
Group
Business The http://www.c
merger compan Assessed ninfo.com.cn
Group 1,013. Cash 2021-11
HSTG under y valuation 998.61 1,013.91 0.00 (Announcem
Company 91 settlement -4
the same acquired value ent
control 40.00% No.:2021-95
77
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
equity of )
Ranchua
ng
Compan
y held
by
Hangzho
u Steam
Turbine
Group
The
compan
y
acquired
5%
equity of
Hangzho Acquisit the http://www.c
u Guoyu Holding ion of complet ninfo.com.cn
Assessed
Property subsidiary minority e set 1,020. Cash 2021-11 (Announcem
valuation 557.75 1,020.00 0.00
Manage of parent sharehol compan 00 settlement -4 ent
value
ment company ders' y held No.:2021-95
Co., Ltd equity by )
Hangzho
u Guoyu
Property
Manage
ment
Co., Ltd.
Reasons for large difference between
transfer price and book value or There was no difference in the transfer price from the assessed value
evaluation value (if any)
Impact on the Company's operating
No significant impact
results and financial status
Performance realization during the
reporting period, if performance
\Not applicable
agreement is involved in related
transaction
[Note] Hangzhou Steam Turbine Power Technology group Co., Ltd. changed its company name to Hangzhou
Guoyu Property Management Co., Ltd. on January 13, 2022.
3. Related party transactions of joint outbound investment
□Applicable √ Not applicable
No such cases in the reporting period.
78
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
4. Credits and liabilities with related parties
√ Applicable □ Not applicable
Whether there is any non-operating related creditor's rights and debts
√ Yes □ No
Creditor's rights receivable from related parties
Whether New Amount
there is any Opening amount in recovered in Current Ending
Related Related occupation balance current the current interest balance
Cause Interest rate
party association of (RMB period period (RMB (RMB
non-operati '0,000) (RMB (RMB '0,000) '0,000)
ng funds '0,000) '0,000)
Debt payable to related parties
Repayment
New amount in Ending
Related Related Opening balance amount in current Interest Current interest
Cause current period balance (RMB
party association (RMB '0,000) period (RMB rate (RMB '0,000)
(RMB '0,000) '0,000)
'0,000)
Group Borrowing
HSTG 309,254,400.43 11,729,618.51 80,984,018.94 3.85% 11,729,618.51 240,000,000
Company funds
Influence of related
Due to the needs of production and operation, Hangzhou Steam Turbine Engineering Co., Ltd. (now renamed
debt on the Company's
as New Energy Company) began to borrow funds from Hangzhou Steam Turbine Group in 2016. The debt has
operating results and
no significant impact on the company's operating results and financial status.
financial status
5. Transactions with related finance company, especially one that is controlled by the Company
□Applicable √ Not applicable
No such cases in the reporting period.
6. Transactions between the financial company controlled by the Company and related parties
□ Applicable √Not applicable
There is no deposit, loan, credit or other financial business between the financial company controlled by the
Company and related parties.
7. Other significant related-party transactions
□Applicable √Not applicable
79
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
XV. Significant contracts and execution
1.Entrustments, contracting and leasing
（1）Entrustment
□Applicable √ Not applicable
No such cases in the reporting period.
（2）Contracting
□Applicable √ Not applicable
No such cases in the reporting period.
（3）Leasing
□Applicable √ Not applicable
No such cases in the reporting period.
2.Significant Guarantees
√ Applicable □ Not applicable
In RMB10,000
Outward guarantees offered by the Company and its subsidiaries (Excluding guarantee to the subsidiaries）
Relevant Compl
Date of Guarantee
disclosure Counter ete
Name of happening Actual for
date/No. of Amount of Guarantee Guaranty -guarant imple
the (Date of mount of Guarantee term associated
the Guarantee type （If any） ee（If mentat
Company signing guarantee parties
guaranteed any） ion
agreement) (Yes or no)
amount or not
Guarantee of the company for its subsidiaries
Relevant Compl
Date of Guarantee
disclosure Counter ete
Name of happening Actual for
date/No. of Amount of Guarantee Guaranty -guarant imple
the (Date of mount of Guarantee term associated
the Guarantee type （If any） ee（If mentat
Company signing guarantee parties
guaranteed any） ion
agreement) (Yes or no)
amount or not
Zhejiang
Steam
Three years from
Turbine The joint
April August the date of
Packaged 5,000 liability No No
24,2021 14,2021 expiration of the
Technolog guaranty
principal debt
y
Developm
80
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
ent Co.,
Ltd.
Hangzhou
Steam Three years from
The joint
May May the date of
Turbine 2,000 1,000 liability No No
27,2021 29,2021 expiration of the
Casting guaranty
principal debt
Co., Ltd.
Hangzhou
Zhongnen Two years from
The joint
g Steam November October the date of
16,800 16,800 liability No No
Turbine 4,2021 31,2021 expiration of the
guaranty
Power principal debt
Co., Ltd.
Total of guarantee for Total of actual guarantee
subsidiaries approved in 23,800 for subsidiaries in the 17,800
the period(B1) period (B2)
Total of guarantee for Total of actual guarantee
subsidiaries approved at 23,800 for subsidiaries at 17,800
period-end(B3) period-end(B4)
Guarantee of the subsidiaries for the controlling subsidiaries
Relevant Compl
Date of Guarantee
disclosure Counter ete
Name of happening Actual for
date/No. of Amount of Guarantee Guaranty -guarant imple
the (Date of mount of Guarantee term associated
the Guarantee type （If any） ee（If mentat
Company signing guarantee parties
guaranteed any） ion
agreement) (Yes or no)
amount or not
Hangzhou
Guoneng Three years from
The joint
Steam July the date of
July 20,2021 7,000 1,640 liability No No
Turbine 20,2021 expiration of the
Engineerin guaranty
principal debt
g Co., Ltd.
Hangzhou
Guoneng Three years from
The joint
Steam July the date of
July 20,2021 5,000 2,416.34 liability No No
Turbine 20,2021 expiration of the
Engineerin guaranty
principal debt
g Co., Ltd.
Hangzhou
Guoneng Two years from
The joint
Steam July the date of
July 20,2021 5,000 4,997.35 liability No No
Turbine 20,2021 expiration of the
Engineerin guaranty
principal debt
g Co., Ltd.
Total guarantee quota to 17,000 Total amount of 9,053.69
81
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
the subsidiaries guarantee to the
approved in the subsidiaries actually
reporting period (C1) incurred in the reporting
period (C2)
Total guarantee quota to
Total balance of actual
the subsidiaries
guarantee to the
approved at the end of 17,000 9,053.69
subsidiaries at the end of
the reporting period
the reporting period (C4)
(C3)
Total of Company’s guarantee（namely total of the large three aforementioned）
Total of actual guarantee
Total of guarantee in the Period
40,800 in the Period 26,853.69
（A1+B1+C1）
（A2+B2+C2）
Total of actual guarantee
Total of guarantee at Period-end
40,800 at Period-end 26,853.69
（A3+B3+C3）
A4+B4+C4）
The proportion of the total amount of actually
guarantee in the net assets of the Company(that is 3.39%
A4+B4+C4)
Including
Amount of guarantee for shareholders, actual
0
controller and its associated parties（D）
The debts guarantee amount provided for the
Guaranteed parties whose assets-liability ratio
16800
exceed
70% directly or indirectly（E）
Proportion of total amount of guarantee in net
0
assets of the company exceed 50%（F）
Total guarantee Amount of the abovementioned
16800
guarantees（D+E+F）
Explanations on possibly bearing joint and several
liquidating responsibilities for undue guarantees No
( If any)
Explanations on external guarantee against
No
regulated procedures(If any)
Description of the guarantee with complex method
3.Situation of Entrusting Others for Managing Spot Asset
(1)Situation of Entrusted Finance
82
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
√ Applicable □Not applicable
Overview of entrusted wealth-management during the reporting period
In RMB 10,000
Source of funds for The Occurred
Un-recovered of overdue
Specific type entrusted financial Amount of Entrusted Undue balance Amount overdue
amount
management Wealth-management
Bank financing
Self funds 152,000 95,800 0 0
product
Total 152,000 95,800 0 0
Specific Circumstance of Trust Investment which is large in single amount, low in security, poor in liquidity or
unguaranteed in high risk
□ Applicable √ Not applicable
Situation with the appearance of principals which cannot be recovered expectedly or other existing
situations which may lead to impairment
□ Applicable √ Not applicable
(2)Situation of Entrusted Loans
□ Applicable √ Not applicable
None
4. Other significant contract
□ Applicable √ Not applicable
None
XVI. Explanation on other significant events
□ Applicable √ Not applicable
XVII. Significant event of subsidiary of the Company
√ Applicable □Not applicable
1. Investment by Casting Company, The contents is detailed on September 28, 2021 at the website designated by
the Shenzhen Stock Exchange (http // www.cninfo.com.cn). (Announcement No. 2021-82)
2. Change of company name and business scope of engineering company，he contents is detailed on December 8,
2021 at the website designated by the Shenzhen Stock Exchange (http // www.cninfo.com.cn). (Announcement No.
2021-107)
3. Turbine heavy industry completed the cancellation. The contents is detailed on December 14,2021 at the
website designated by the Shenzhen Stock Exchange (http // www.cninfo.com.cn). (Announcement No.
2021-108)
83
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
VII. Change of share capital and shareholding of Principal Shareholders
1.Changes in share capital
1.Changes in share capital
In shares
Before the change Increase/decrease（+，-） After the Change
Amount Proportion Capitalization
Share Bonus
of common Other Subtotal Quantity Proportion
allotment shares
reserve fund
I. Unlisted shares 479,824,800 63.64% 0 0 0 0 0 479,824,800 63.64%
1. Founder's stock 479,824,800 63.64% 0 0 0 0 0 479,824,800 63.64%
Including ： State-owned
479,824,800 63.64% 0 0 0 0 0 479,824,800 63.64%
shares
II.Non-restricted shares 274,185,600 36.36% 0 0 0 0 0 274,185,600 36.36%
2. Overseas listed foreign
274,185,600 36.36% 0 0 0 0 0 274,185,600 36.36%
shares
III. Total of capital shares 754,010,400 100.00% 0 0 0 0 0 754,010,400 100.00%
Causes of Change of shares
□ Applicable √ Not applicable
Approval of change of the shares
□ Applicable √ Not applicable
Ownership transfer of share changes
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to
common shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose for the company or need to disclosed under requirement from security
regulators
□ Applicable √ Not applicable
2. Change of shares with limited sales condition
√Applicable □ Not applicable
In Shares
Initial Number of Number of Restricted
Shareholder Reason for Restricted
Restricted Unrestricted Increased Shares in Date of Restriction Removal
Name Shares
Shares Shares This Restricted the End of
84
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Term Shares the Term
This Term
The limitations are lifted according to the
Equity incentive
Zheng Bin 0 250,000 0 250,000 relevant provisions of the 2021 restricted
restricted stocks
stock incentive plan
The limitations are lifted according to the
Equity incentive
Ye Zhong 0 250,000 0 250,000 relevant provisions of the 2021 restricted
restricted stocks
stock incentive plan
The limitations are lifted according to the
Yang Equity incentive
0 200,000 0 200,000 relevant provisions of the 2021 restricted
Yongming restricted stocks
stock incentive plan
The limitations are lifted according to the
Equity incentive
Wang Gang 0 200,000 0 200,000 relevant provisions of the 2021 restricted
restricted stocks
stock incentive plan
The limitations are lifted according to the
Kong Equity incentive
0 200,000 0 200,000 relevant provisions of the 2021 restricted
Jianqiang restricted stocks
stock incentive plan
The limitations are lifted according to the
Li Equity incentive
0 200,000 0 200,000 relevant provisions of the 2021 restricted
Jiansheng restricted stocks
stock incentive plan
The limitations are lifted according to the
Wang Equity incentive
0 200,000 0 200,000 relevant provisions of the 2021 restricted
Zhengrong restricted stocks
stock incentive plan
The limitations are lifted according to the
Zhao Equity incentive
0 200,000 0 200,000 relevant provisions of the 2021 restricted
Jiamao restricted stocks
stock incentive plan
The limitations are lifted according to the
Equity incentive
Li Guiwen 0 200,000 0 200,000 relevant provisions of the 2021 restricted
restricted stocks
stock incentive plan
The limitations are lifted according to the
Equity incentive
Cai Weijun 0 200,000 0 200,000 relevant provisions of the 2021 restricted
restricted stocks
stock incentive plan
Equity incentive
The limitations are lifted according to the
restricted stocks and
Other 108,059 15,960,000 0 16,068,059 relevant provisions of the 2021 restricted
Senior executive
stock incentive plan
restricted stock
Total 108,059 18,060,000 0 18,168,059 -- --
II. Securities issue and listing
1.Explanation of the Situation of the Security Issue(No Preferred Shares) in the Report Period
85
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
□ Applicable √ Not applicable
2.Change of asset and liability structure caused by change of total capital shares and structure
□ Applicable √ Not applicable
3.About the existing employees’ shares
□ Applicable √ Not applicable
III. Particulars about the shareholders and substantial controller
1. Amount of shareholders and their shareholding position
In shares
Total
preference
Total
shareholders
shareholders
with
Total number of at the end of
voting rights
common the month
The total number of preferred shareholders voting recovered at
shareholders at 11,086 from the 11,034 0 0
rights restored at period-end (if any)(Note 8) end
the end of the date of
of last month
reporting period disclosing
before annual
the annual
report
report
disclosed(if
any)(Note8)
Particulars about shares held above 5% by shareholders or top ten shareholders
Number of
share
Proportion Amount of Amount of
Nature of Number of shares held Changes in reporting pledged/frozen
Shareholders of shares restricted un-restricted
shareholder at period -end period State
held（%） shares held shares held
of Amount
share
Hangzhou Steam Turbine State-owned
63.64% 479,824,800 0 479,824,800 0
Power Group Co., Ltd. legal person
GUOTAI JUNAN
Foreign
SECURITIES(HONGKONG) 1.02% 7,677,425 4997714 0 7,677,425
legal person
LIMITED
China Merchants Securities State-owned
0.74% 5,590,477 1473174 0 5,590,477
(HK)Co., Ltd. legal person
Domestic
Zhou Jie Natural 0.61% 4,622,700 281600 0 4,622,700
person
VANGUARD TOTAL
Foreign
INTERNATIONAL STOCK 0.59% 4,434,453 -931424 0 4,434,453
legal person
INDEX FUND
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
VANGUARD EMERGING
Foreign
MARKETS STOCK INDEX 0.57% 4,282,082 319878 0 4,282,082
legal person
FUND
ISHARES CORE MSCI
Foreign
EMERGING MARKETS 0.52% 3,898,263 666962 0 3,898,263
legal person
ETF
Foreign
NORGES BANK 0.33% 2,514,529 0 0 2,514,529
legal person
Domestic
Xia Zulin Natural 0.31% 2,320,000 0 0 2,320,000
person
Domestic
Gu Yang Natural 0.21% 1,568,324 63772 0 1,568,324
person
Particulars about strategic investors or
general corporations becoming among the Not applicable
top 10 shareholders due to share placing
(1) Hangzhou Steam Turbine Power Group Co., Ltd. is the holder of state-shares of the Company, all
other shareholders’ are holders of domestic listed foreign shares (B shares)
(2) There is no relationship between Hangzhou Steam Turbine Power Group Co., Ltd. and other
Explanation on associated relationship shareholders;
among the aforesaid shareholders (3) Hangzhou Steam Turbine Power Group Co., Ltd. is not an “action-in-concert” party with any of
other shareholders as described by the “Administration Rules of Informational Disclosure about Change
of Shareholding Statues of PLCs”.
Above shareholders entrusting or entrusted
Not applicable
with voting rights, or waiving voting rights
Top 10 shareholders including the special
account for repurchase (if any) (see note Not applicable
10)
Top 10 holders of shares without trading limited conditions
Category of shares
Name of the shareholder Amount of unconditional shares held at end of period
Category Amount
Foreign shares
GUOTAI JUNAN placed in
7,677,425 7,677,425
SECURITIES(HONGKONG) LIMITED domestic
exchange
Foreign shares
placed in
China Merchants Securities(HK)Co., Ltd. 5,590,477 5,590,477
domestic
exchange
Foreign shares
placed in
Zhou Jie 4,622,700 4,622,700
domestic
exchange
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Foreign shares
VANGUARD TOTAL INTERNATIONAL placed in
4,434,453 4,434,453
STOCK INDEX FUND domestic
exchange
Foreign shares
VANGUARD EMERGING MARKETS placed in
4,282,082 4,282,082
STOCK INDEX FUND domestic
exchange
Foreign shares
ISHARES CORE MSCI EMERGING placed in
3,898,263 3,898,263
MARKETS ETF domestic
exchange
Foreign shares
placed in
NORGES BANK 2,514,529 2,514,529
domestic
exchange
Foreign shares
placed in
Xia Zulin 2,320,000 2,320,000
domestic
exchange
Foreign shares
placed in
Gu Yang 1,568,324 1,568,324
domestic
exchange
Foreign shares
placed in
Wang Yihu 1,539,966 1,539,966
domestic
exchange
Explanation on associated relationship or
1）It is unknown to the Company if there is any relationship among the top 10 common share holders
consistent action among the top 10
without restriction;
shareholders of non-restricted negotiable
(2) Hangzhou Steam Turbine Group Co., Ltd. is not an action-in-concert” party with any of other
shares and that between the top 10
shareholders as described by the “Administration Rules of Informational Disclosure about Change of
shareholders of non-restricted negotiable
Shareholding Statues of PLCs”.
shares and top 10 shareholders
Notes to the shareholders involved in
Not applicable
financing securities (if any)(See Notes 4)
Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a
buy-back agreement dealing in reporting period.
□ Yes √ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company
have no buy –back agreement dealing in reporting period.
2.Controlling shareholder
Nature of Controlling Shareholders: Local state holding
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Type: Legal person
Name of
Legal Incorporated
the holding Organization code Registered capital
representative in
shareholder
Manufacturing and processing: textile machinery, Manufacturing
machines, 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
Hangzhou
Steam projects, export of above equipments and materials, provide labor
Turbine December services for above overseas projects. Thermal power plant
Zhang Weijie 91330100143071842L
Power 14,1992
project and equipment engineering; wholesale and retail: products
Group Co.,
and spare parts manufactured by members of the group, and
Ltd.
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.
Shareholding status of the holding shareholder in
other PLCs in the country and abroad during the None
report period
Change of holding shareholder
□ Applicable √ Not applicable
No change of holding shareholder in the report period.
3．Information about the controlling shareholder of the Company
Actual controller nature：Local state owned Assets Management
Actual controller type：Legal person
Name of the substantial Legal Date of
Organization code Principal business activities
controller representative incorporation
State-owned Assets Supervision
and Administration Commission Not applicable
Wang Xi 113301007766375272
of Hangzhou Municipal
Government
The equity of the controlling
Hangzhou Jiebai (SH.600814) held 68.26% shares， Digital Source Technology Co., Ltd.
shareholder in other domestic
（SZ.000909）held 45.33% shares and Hangyang Co., Ltd.(SZ.002430)held 54.45% shares.
and foreign listed companies
held or partly held by it in the
89
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
report period
Change of the actual controller in the reporting period
□ Applicable √ Not applicable
None
Block Diagram of the ownership and control relations between the company and the actual controller
The actual controller controls the company by means of trust or managing the assets in other way
□ Applicable √ Not applicable
4.The cumulative number of shares pledged by the controlling shareholder or the largest shareholder of the
company and its person acting in concert accounts for 80% of the number of shares held by the company
□Applicable √Not applicable
5.Particulars about other legal person shareholders with over 10% share held
□Applicable √Not applicable
6.Situation of Share Limitation Reduction of Controlling Shareholders, Actual Controllers, Restructuring Party
and Other Commitment Subjects
□Applicable √Not applicable
IV. Specific implementation of share repurchase during the reporting period
Progress in implementation of share repurchase
□ Applicable √Not applicable
Implementation progress of reducing repurchased shares by centralized bidding
□ Applicable √Not applicable
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
VIII. Situation of the Preferred Shares
□Applicable √Not applicable
The Company had no preferred shares in the reporting period.
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
IX. Corporate Bond
□ Applicable √ Not applicable
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
X. Financial Report
I. Auditors' Report
Type of auditing opinion Standard report without qualified opinion
Date of signature of audit report March 29,2022
Pan-China Certified Public Accountants (Special common
Name of the CPA
partnership)
Ref. No. of the Auditors’ Report Tian Jian Shen No.:〔2022〕1568
Name of the certified accountants Sheng Weiming, Ye Xianbin
Auditors’ Report
To the entire shareholders of Hangzhou Steam Turbine Co., Ltd.
I. Opinion
We have audited the financial statements of Hangzhou Steam Turbine Co., Ltd..(hereinafter referred to as "the
Company"), which comprise the balance sheet as at December 31, 2021, and the income statement, the statement
of cash flows and the statement of changes in owners' equity for the year then ended and notes to the financial
statements.
In our opinion, the attached financial statements are prepared, in all material respects, in accordance with
Accounting Standards for Business Enterprises and present fairly the financial position of the Company as at
December 31, 2021 and its operating results and cash flows for the year then ended.
II. Basis for Our Opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants in China. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the
Financial Statements section of our report. According to the Code of Ethics for Chinese CPA, we are independent
of the Company in accordance with the Code of Ethics for Chinese CPA and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
(1) Recognition of income
1.Description of the matter
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
For details of the relevant information disclosure, please refer to Note III (21) and Note V (2) 1 in the
financial statements.
The operating income of Hangzhou Steam Turbine Co., Ltd. mainly comes from the R&D, production and
sales of industrial steam turbines and other products. In 2021, the amount of operating income items shown in the
consolidated financial statements of Hangzhou Steam Turbine Co., Ltd. was RMB 5.788 billion, of which the
operating income of industrial steam turbine and accessories sales business was RMB 4.779 billion, accounting for
82.57% of the operating income.
The company has formulated specific revenue recognition methods according to different businesses.
Sales of industrial steam turbines and other products are considered the performance obligations performed at
a certain point in time, there may be inherent risks that the management of Hangzhou Steam Turbine Co., Ltd.
(hereinafter referred to as management) can achieve specific goals or expectations through improper income
recognition. Therefore, we have identified revenue recognition as a key audit matter.
2. Audit Countermeasures
For revenue recognition, the audit procedures we have implemented mainly include:
(1) Understand key internal controls related to revenue recognition, evaluate the design of these controls,
determine whether they are implemented, and test the operational effectiveness of relevant internal controls;
(2) Check the sales contract, understand the main contract terms or conditions, and evaluate whether the
revenue recognition method is appropriate;
(3) Implementing substantive analysis procedures for operating income and gross profit margin according to
products and customers to identify whether there are material or abnormal fluctuations, and to identify the causes
of such fluctuations;
(4) For domestic sales income, by sampling method check the supporting documents related to revenue
recognition, including sales contracts, sales invoices, shipment bills and receipts; for export income, by sampling
method check the supporting documents including sales contracts, export declarations, freight bills of lading and
sales invoices;
(5) In conjunction with the letter confirmation of accounts receivable, the sales amount of the current period
for major customers are letter confirmed by sampling method;
(6) Implement a cut-off test on the operating income recognized before and after the balance sheet date,
and evaluate whether the operating income is recognized within an appropriate period;
(7) Obtain the sales return record after the balance sheet date, and check whether there is any situation that
the income recognition conditions are not met on the balance sheet date;
(8) Check that the information related to the operating income whether has been properly presented and
disclosed in the financial statements.
(II) Impairment of accounts receivable
1. Description of the matter
For related information disclosure, please refer to Note III (9) and Note V (1) 4 of the financial statements.
As of December 31, 2021, the book balance of accounts receivable items shown in the consolidated financial
statements of Hangzhou Steam Turbine Co., Ltd. was RMB 3.057 billion, the bad debt provision was RMB 1.059
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
million, and the book value was RMB 1.998 billion.
According to the credit risk characteristics of each account receivable, the management measures its loss
reserves on the basis of individual accounts receivable or a combination of accounts receivable and according to
the expected credit loss amount equivalent to the whole duration. For accounts receivable that measure expected
credit losses on a single basis, the management comprehensively considers reasonable and reliable information
about past events, current status and future economic status forecasts, estimates the expected cash flow, and
determines the provision for bad debts to be accrued accordingly; For accounts receivable whose expected credit
losses are measured on the basis of combination, the management divides the combination based on aging, refers
to historical credit loss experience, and adjusts it according to forward-looking estimation, and compiles a
comparison table between the aging of accounts receivable and loss given default, thereby determining the bad
debt reserves to be accrued.
Due to the significant amount of accounts receivable and the impairment test of accounts receivable
involving significant management judgment, we determine the impairment of accounts receivable as a key audit
matter.
2. Audit Countermeasures
For the impairment of accounts receivable, the audit procedures we have implemented mainly include:
(1) Understand the key internal controls related to the impairment of accounts receivable, evaluate the design
of these controls, determine whether they have been implemented, and test the operational effectiveness of the
relevant internal controls;
(2) Review the subsequent actual write-off or reversal of accounts receivable with provision for bad debts in
previous years, and evaluate the accuracy of the management's past forecasts;
(3) Review the management's relevant considerations and the objective evidence for the impairment test of
the accounts receivable, and evaluate whether the management fully recognizes the accounts receivable that have
been impaired;
(4) For accounts receivable that are individually tested for impairment, obtain and examine the management's
forecast on the present value of future cash flows, evaluate the rationality of the key assumptions and the accuracy
of the data used in the forecast, and verify with the external evidence obtained;
(5) For the accounts receivable that are tested for impairment using the combination method, evaluate the
rationality of the management's combination dividing according to the credit risk characteristics; based on the
historical loss rate of a combination with similar credit risk characteristics and the relevant observable data
reflecting the current situation and so on to evaluate the rationality of the management's impairment test method
(including the proportion of the provision for bad debts of each combination); test the accuracy and completeness
of the data used by the management (including the accounts receivable combination with aging as the risk
characteristics, checking the accuracy of the ageing of accounts receivable by sampling method) and test whether
the calculation of the corresponding provision for bad debts is accurate;
(6) Checking the post-payments of accounts receivable and evaluating the reasonableness of the
management's provision for bad debts of accounts receivable;
(7) Check whether the information related to the impairment of accounts receivable has been properly
presented and disclosed in the financial statements.
(III) Net realizable value of inventories
1. Description of the matter
For details of relevant information disclosure, please refer to Note III (10) and Note V (1) 8 of the financial
statements.
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
As of December 31, 2021, the book balance of the inventory items shown in the consolidated financial
statements of Hangzhou Steam Turbine Co., Ltd. was RMB 3.353 billion, the provision for price falling was RMB
311 million, and the book value was RMB 3.042 billion.
On the balance sheet date, the inventories are measured at the lower of the cost and net realizable value, and
the provision for inventory falling price is made based on the difference that the cost of a single inventory
exceeding the net realizable value. On the basis of considering the purpose of holding the inventory, the
management determines the estimated selling price according to the contract price, the market price of the same or
similar products, the advance receipt, the estimated disposal income, etc., and determines the net realizable value
of the inventory by the estimated sales price subtracting the estimated occurrence cost will be happened at the
time of completion and subtracting the estimated sales expenses and related taxes and fees
Due to the significant amount of inventories and the determination of the net realizable value of inventories
involving significant management judgment, we determine the net realizable value of inventories as a key audit
item.
2. Audit Countermeasures
For the net realizable value of inventories, the audit procedures we have implemented mainly include:
(1) Understand the key internal controls related to the net realizable value of inventory, evaluate the design of
these controls, determine whether they have been implemented, and test the operational effectiveness of the
relevant internal controls;
(2) Review management's forecast of the net realizable value of inventory and the actual operating results in
previous years, and evaluate the accuracy of management's past forecasts;
(3) by sampling method review the management's forecast of the estimated selling price of the inventory, and
compare the estimated selling price with the post-event situation, the contracted selling price, the advance receipt,
and the valuation value;
(4) evaluate the management's reasonableness for the estimation on the costs, sales expenses and related
taxes and fees that will occur from the inventory to its completion sales;
(5) test the accuracy of the management's calculation on the net realizable value of inventory;
(6) In combination with the inventory monitoring, check whether the ending inventory has long storage age,
obsolete models, project suspension or termination situation, and evaluate whether the management has
reasonably estimated the net realizable value;
(7) Check whether the information related to the net realizable value of the inventory has been properly
presented and disclosed in the financial statements.
IV. Other information
The management of the Company is responsible for the other information. The other information comprises
information of the Company's annual report, but excludes the financial statements and our auditor's report.
Our opinion on the financial statements does not cover the other information and we do not and will not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor's report, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
V. Responsibilities of Management and Those Charged with Governance for the Financial Statements
The Company's management is responsible for preparing the financial statements in accordance with the
requirements of Accounting Standards for Business Enterprises to achieve a fair presentation, and for designing,
implementing and maintaining internal control that is necessary to ensure that the financial statements are free
from material misstatements, whether due to frauds or errors.
In preparing the financial statements, management of the Company is responsible for assessing the Company's
ability to continue as a going concern, disclosing matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
VI. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the audit standards will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, omissions,
misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management of the Company.
(4) Conclude on the appropriateness of using the going concern assumption by the management of the Company,
and conclude, based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures
in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may
cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express an opinion on the financial statements and bear all liability for the
opinion.
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit matters, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
II. The Financial Statements
Statement in Financial Notes are carried in RMB
1. Consolidated Balance Sheet
Prepared by: Hangzhou Steam Turbine Co., Ltd
In RMB
Items December 31,2021 December 31,2020
Current asset：
Monetary fund 1,622,883,247.79 1,999,509,842.32
Settlement provision
Outgoing call loan
Transactional financial assets 960,645,259.82 1,021,681,809.34
Derivative financial assets
Notes receivable 215,046,941.09 118,595,076.67
Account receivable 1,997,950,120.70 1,668,235,154.01
Financing of receivables 816,653,211.21 823,598,830.55
Prepayments 443,770,434.91 593,808,157.80
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance contracts
receivable
Other account receivable 44,163,396.56 70,327,633.84
Including：Interest receivable
Dividend receivable 43,605,292.60
Repurchasing of financial assets
Inventories 3,041,643,747.35 2,306,574,195.23
Contract assets 583,026,649.99 535,880,910.51
Assets held for sales
Non-current asset due within 1 year
Other current asset 66,174,951.42 50,652,585.75
Total of current assets 9,791,957,960.84 9,188,864,196.02
Non-current assets：
Non-current assets：
Loans and payment on other’s behalf
disbursed
Creditor's right investment
Long-term receivable 153,741,093.20 242,241,093.20
Long term share equity investment 11,899,308.84
Other equity instruments investment 3,485,440,140.92 4,056,378,073.52
Other non-current financial assets 14,792,533.96 16,046,102.59
Property investment 6,903,986.07 7,949,408.86
Fixed assets 1,658,423,191.83 1,309,749,127.82
Construction in progress 517,835,956.11 805,277,593.08
Production physical assets
Oil & gas assets
Use right assets 30,437,778.92
Intangible assets 277,469,707.24 315,925,092.55
Development expenses
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Goodwill
Long-germ expenses to be amortized
Deferred income tax asset 382,665,279.67 421,502,615.03
Other non-current asset
Total of non-current assets 6,527,709,667.92 7,186,968,415.49
Total of assets 16,319,667,628.76 16,375,832,611.51
Current liabilities
Short-term loans 250,065,920.45 252,777,667.03
Loan from Central Bank
Borrowing funds
Transactional financial liabilities
Derivative financial liabilities
Notes payable 309,404,319.27 297,166,104.48
Account payable 1,910,150,188.14 1,343,959,443.91
Advance receipts 812,701.37 509,302.46
Contract liabilities 3,052,515,293.06 2,949,234,639.55
Selling of repurchased financial assets
Deposit taking and interbank deposit
Entrusted trading of securities
Entrusted selling of securities
Employees’ wage payable 133,122,509.92 130,312,202.44
Tax payable 81,622,378.10 298,065,195.51
Other account payable 434,578,338.13 389,470,779.78
Including：Interest payable
Dividend payable
Fees and commissions payable
Reinsurance fee payable
Liabilities held for sales
Non-current liability due within 1 year 17,607,722.97 1,001,088.89
Other current liability 395,640,629.47 387,706,953.97
Total of current liability 6,585,520,000.88 6,050,203,378.02
Non-current liabilities：
Reserve fund for insurance contracts
Long-term loan 180,830,007.55 21,623,520.00
Bond payable
Including：preferred stock
Sustainable debt
Lease liability 22,575,754.77
Long-term payable 7,579,677.56 407,946,545.09
Long-term remuneration payable to
staff
Expected liabilities
Deferred income 729,438,751.74 655,147,696.41
Deferred income tax liability 464,172,915.14 550,540,278.99
Other non-current liabilities
Total non-current liabilities 1,404,597,106.76 1,635,258,040.49
Total of liability 7,990,117,107.64 7,685,461,418.51
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Owners’ equity
Share capital 754,010,400.00 754,010,400.00
Other equity instruments
Including：preferred stock
Sustainable debt
Capital reserves 282,946,030.50 379,906,466.92
Less：Shares in stock 144,078,948.09 144,078,948.09
Other comprehensive income 2,629,477,756.99 3,114,962,386.84
Special reserve 18,369,033.52 18,568,980.86
Surplus reserves 625,178,089.82 625,178,089.82
Common risk provision
Retained profit 3,761,583,410.91 3,415,358,402.27
Total of owner’s equity belong to the
7,927,485,773.65 8,163,905,778.62
parent company
Minority shareholders’ equity 402,064,747.47 526,465,414.38
Total of owners’ equity 8,329,550,521.12 8,690,371,193.00
Total of liabilities and owners’ equity 16,319,667,628.76 16,375,832,611.51
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin Can
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
2.Parent Company Balance Sheet
In RMB
Items December 31,2021 December 31,2020
Current asset：
Monetary fund 911,448,637.39 1,068,802,728.63
Transactional financial assets 870,645,259.82 901,681,809.34
Derivative financial assets
Notes receivable 6,961,501.77 2,386,000.00
Account receivable 1,580,364,876.72 1,233,324,781.52
Financing of receivables 521,567,126.16 560,214,105.19
Prepayments 362,130,094.32 435,233,928.27
Other account receivable 27,054,816.71 52,338,992.66
Including：Interest receivable
Dividend receivable 43,605,292.60
Inventories 1,972,162,485.26 1,504,591,192.03
Contract assets 336,771,206.36 298,440,051.27
Assets held for sales
Non-current asset due within 1 year
Other current asset 54,571,853.02
Total of current assets 6,643,677,857.53 6,057,013,588.91
Non-current assets：
Creditor's right investment
Other investment on bonds
Long-term receivable
Long term share equity investment 191,793,655.63 925,188,454.39
Other equity instruments investment 3,485,440,140.92 4,056,378,073.52
Other non-current financial assets 14,654,773.22 18,227,489.14
Property investment
Fixed assets 1,216,961,095.52 353,788,891.57
Construction in progress 510,746,977.12 495,409,362.19
Production physical assets
Oil & gas assets
Use right assets 5,718,846.89
Intangible assets 194,828,927.84 163,116,618.58
Development expenses
Goodwill
Long-germ expenses to be amortized
Deferred income tax asset 317,178,990.36 355,670,069.60
Other non-current asset
Total of non-current assets 5,937,323,407.50 6,367,778,958.99
Total of assets 12,581,001,265.03 12,424,792,547.90
Current liabilities
Short-term loans 150,136,986.30 150,136,986.30
Transactional financial liabilities
Derivative financial liabilities
Notes payable 6,955,000.00
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Account payable 1,225,766,343.67 820,258,129.08
Advance receipts
Contract Liabilities 2,144,268,617.09 2,077,614,427.93
Employees’ wage payable 76,018,039.12 67,025,966.88
Tax payable 11,130,803.71 240,368,823.36
Other account payable 177,365,722.18 56,602,697.52
Including：Interest payable
Dividend payable
Liabilities held for sales
Non-current liability due within 1 year 4,612,006.37
Other current liability 276,610,651.60 267,804,499.76
Total of current liability 4,065,909,170.04 3,686,766,530.83
Non-current liabilities：
Long-term loan
Bond payable
Including：preferred stock
Sustainable debt
Lease liability 2,799,027.12
Long-term payable 2,785,102.53 247,309,261.46
Long-term remuneration payable to
staff
Expected liabilities
Deferred income 582,083,796.03 489,002,470.74
Deferred income tax liability 464,172,915.14 550,540,278.99
Other non-current liabilities
Total non-current liabilities 1,051,840,840.82 1,286,852,011.19
Total of liability 5,117,750,010.86 4,973,618,542.02
Owners’ equity
Share capital 754,010,400.00 754,010,400.00
Other equity instruments
Including：preferred stock
Sustainable debt
Capital reserves 121,457,098.65 138,953,250.09
Less：Shares in stock 144,078,948.09 144,078,948.09
Other comprehensive income 2,630,313,185.77 3,115,610,428.47
Special reserve 6,000,000.00 6,000,000.00
Surplus reserves 602,356,402.65 602,356,402.65
Retained profit 3,493,193,115.19 2,978,322,472.76
Total of owners’ equity 7,463,251,254.17 7,451,174,005.88
Total of liabilities and owners’ equity 12,581,001,265.03 12,424,792,547.90
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin Can
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
3.Consolidated Income statement
In RMB
Items Year 2021 Year 2020
I. Income from the key business 5,788,288,588.91 4,762,315,089.10
Incl：Business income 5,788,288,588.91 4,762,315,089.10
Interest income
Insurance fee earned
Fee and commission received
II. Total business cost 5,360,902,963.39 4,364,334,353.63
Incl：Business cost 4,091,955,492.69 3,263,252,665.64
Interest expense
Fee and commission paid
Insurance discharge payment
Net claim amount paid
Net amount of withdrawal of insurance contract reserve
Insurance policy dividend paid
Reinsurance expenses
Business tax and surcharge 45,829,030.25 38,349,848.74
Sales expense 202,868,557.82 234,574,261.47
Administrative expense 660,284,323.30 545,097,001.83
R & D costs 350,216,635.11 233,881,231.71
Financial expenses 9,748,924.22 49,179,344.24
Including：Interest expense 23,435,810.36 37,389,700.85
Interest income 18,328,752.35 23,071,547.55
Add: Other income 202,548,518.03 135,781,367.15
Investment gain（“-”for loss） 168,937,379.22 145,274,860.15
Incl: investment gains from affiliates -2,137,796.92
Financial assets measured at amortized cost cease to be
recognized as income
Gains from currency exchange
Net exposure hedging income
Changing income of fair value -141,525.84 1,146,124.08
Credit impairment loss 15,768,143.94 41,085,509.51
Impairment loss of assets -28,511,019.43 -65,570,237.78
Assets disposal income 1,094,656.77 -8,094,327.80
III. Operational profit（“-”for loss） 787,081,778.21 647,604,030.78
Add ：Non-operational income 134,352,975.28 49,880,480.90
Less: Non-operating expense 88,887,299.33 36,372,334.92
IV. Total profit(“-”for loss) 832,547,454.16 661,112,176.76
Less：Income tax expenses 105,299,694.37 81,566,540.30
V. Net profit 727,247,759.79 579,545,636.46
(I) Classification by business continuity
1.Net continuing operating profit 727,247,759.79 579,545,636.46
2.Termination of operating net profit
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
(II) Classification by ownership
1.Net profit attributable to the owners of parent company 649,992,474.56 476,268,110.63
2.Minority shareholders’ equity 77,255,285.23 103,277,525.83
VI. Net after-tax of other comprehensive income -485,737,329.38 1,330,317,116.58
Net of profit of other comprehensive income attributable to o -485,484,629.85 1,330,767,230.50
wners of the parent company.
（I）Other comprehensive income items that will not be
reclassified into gains/losses in the subsequent accounting -485,297,242.70 1,331,101,008.56
period
1.Re-measurement of defined benefit plans of changes in net
debt or net assets
2.Other comprehensive income under the equity method inves
tee can not be reclassified into profit or loss.
3. Changes in the fair value of investments in other equity
-485,297,242.70 1,331,101,008.56
instruments
4. Changes in the fair value of the company’s credit risks
5.Other
（II）
Other comprehensive income that will be reclassified into pro -187,387.15 -333,778.06
fit or loss.
1.Other comprehensive income under the equity method inves
tee can be reclassified into profit or loss.
2. Changes in the fair value of investments in other debt
obligations
3. Other comprehensive income arising from the
reclassification of financial assets
4.Allowance for credit impairments in investments in other
debt obligations
5. Reserve for cash flow hedges
6.Translation differences in currency financial statements -187,387.15 -333,778.06
7.Other
Net of profit of other comprehensive income attributable to M
-252,699.53 -450,113.92
inority shareholders’ equity
VII. Total comprehensive income 241,510,430.41 1,909,862,753.04
Total comprehensive income attributable to the owner of the
164,507,844.71 1,807,035,341.13
parent company
Total comprehensive income attributable minority
77,002,585.70 102,827,411.91
shareholders
VIII. Earnings per share
（I）Basic earnings per share 0.88 0.64
(II)Diluted earnings per share 0.88 0.64
The current business combination under common control, the net profits of the combined party before achieved ne
t profit of RMB-29,001,203.15, last period the combined party realized RMB18,377,754.36.
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin Can
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
4. Income statement of the Parent Company
In RMB
Items Year 2021 Year 2020
I. Income from the key business 3,367,538,714.58 2,491,319,230.10
Incl：Business cost 2,420,764,986.89 1,724,460,420.79
Business tax and surcharge 20,873,235.49 17,627,107.30
Sales expense 93,124,353.76 118,991,535.78
Administrative expense 435,170,658.26 351,881,555.42
R & D expense 192,171,313.79 103,349,185.28
Financial expenses -5,277,760.85 15,463,238.65
Including：Interest expenses 4,788,907.66 2,150,321.19
Interest income 11,520,301.18 15,208,360.56
Add：Other income 174,266,374.76 95,626,075.56
Investment gain（“-”for loss） 321,333,915.33 246,508,123.09
Including: investment gains from affiliates 272,641.24 210,035.64
Financial assets measured at amortized cost cease to be
recognized as income
Net exposure hedging income
Changing income of fair value -2,609,265.44 3,048,442.30
Credit impairment loss 6,058,933.96 -18,781,277.30
Impairment loss of assets -11,163,889.45 -54,773,473.53
Assets disposal income 247,056.74
II. Operational profit（“-”for loss） 698,597,996.40 431,421,133.74
Add ：Non-operational income 120,301,778.59 40,238,894.78
Less：Non -operational expenses 87,148,771.55 26,784,001.84
III. Total profit(“-”for loss) 731,751,003.44 444,876,026.68
Less：Income tax expenses 61,521,858.42 27,489,485.35
IV. Net profit 670,229,145.02 417,386,541.33
1.Net continuing operating profit 670,229,145.02 417,386,541.33
2.Termination of operating net profit
V. Net after-tax of other comprehensive income -485,297,242.70 1,331,101,008.56
（I）Other comprehensive income items that will not be
reclassified into gains/losses in the subsequent accounting -485,297,242.70 1,331,101,008.56
period
1.Re-measurement of defined benefit plans of changes in net
debt or net assets
2.Other comprehensive income under the equity method inves
tee can not be reclassified into profit or loss.
3. Changes in the fair value of investments in other equity
-485,297,242.70 1,331,101,008.56
instruments
4. Changes in the fair value of the company’s credit risks
5.Other
(II)Other comprehensive income that will be reclassified into
profit or loss
1.Other comprehensive income under the equity method inves
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
tee can be reclassified into profit or loss.
2. Changes in the fair value of investments in other debt
obligations
3. Other comprehensive income arising from the
reclassification of financial assets
4.Allowance for credit impairments in investments in other
debt obligations
5. Reserve for cash flow hedges
6.Translation differences in currency financial statements
7.Other
VI. Total comprehensive income 184,931,902.32 1,748,487,549.89
VII. Earnings per share
（I）Basic earnings per share
(II)Diluted earnings per share
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin Can
5. Consolidated Cash flow statement
In RMB
Items Year 2021 Year 2020
I.Cash flows from operating activities
Cash received from sales of goods or rending of services 4,911,745,732.94 4,066,594,356.89
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
Cash received from interest, commission charge and commission
Net increase of inter-bank fund received
Net increase of repurchasing business
Net cash received by agent in securities trading
Tax returned 19,124,473.13 30,239,507.28
Other cash received from business operation 492,993,373.24 503,102,076.32
Sub-total of cash inflow 5,423,863,579.31 4,599,935,940.49
Cash paid for purchasing of merchandise and services 3,264,017,654.61 2,271,150,226.06
Net increase of client trade and advance
Net increase of savings in central bank and brother company
Cash paid for original contract claim
Net increase in financial assets held for trading purposes
Net increase for Outgoing call loan
Cash paid for interest, processing fee and commission
Cash paid to staffs or paid for staffs 995,048,140.94 871,910,891.21
Taxes paid 566,304,337.33 261,506,435.60
Other cash paid for business activities 526,683,957.41 566,482,612.50
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Sub-total of cash outflow from business activities 5,352,054,090.29 3,971,050,165.37
Net cash generated from /used in operating activities 71,809,489.02 628,885,775.12
II. Cash flow generated by investing
Cash received from investment retrieving 145,070,209.90
Cash received as investment gains 220,665,203.47 112,463,899.46
Net cash retrieved from disposal of fixed assets, intangible assets, and 685,022.19
2,303,476.87
other long-term assets
Net cash received from disposal of subsidiaries or other operational
units
Other investment-related cash received 4,447,665,088.15 3,624,349,702.42
Sub-total of cash inflow due to investment activities 4,670,633,768.49 3,882,568,833.97
Cash paid for construction of fixed assets, intangible assets and other 381,655,144.67
181,655,743.62
long-term assets
Cash paid as investment 1,360,000.00
Net increase of loan against pledge
Net cash received from subsidiaries and other operational units 298,438,942.86 -
Other cash paid for investment activities 4,383,572,000.00 3,559,712,851.80
Sub-total of cash outflow due to investment activities 4,863,666,686.48 3,942,727,996.47
Net cash flow generated by investment -193,032,917.99 -60,159,162.50
III.Cash flow generated by financing
Cash received as investment 320,000.00
Including: Cash received as investment from minor shareholders 320,000.00
Cash received as loans 422,800,000.00 318,300,000.00
Other financing –related cash received 117,695,995.86 92,500,000.00
Sub-total of cash inflow from financing activities 540,815,995.86 410,800,000.00
Cash to repay debts 258,500,000.00 208,500,000.00
Cash paid as dividend, profit, or interests 269,797,633.75 261,277,732.13
Including: Dividend and profit paid by subsidiaries to minor
76,080,370.00 103,216,380.00
shareholders
Other cash paid for financing activities 271,082,296.17 360,012,525.87
Sub-total of cash outflow due to financing activities 799,379,929.92 829,790,258.00
Net cash flow generated by financing -258,563,934.06 -418,990,258.00
IV. Influence of exchange rate alternation on cash and cash
-3,028,317.00 -22,894,931.64
equivalents
V.Net increase of cash and cash equivalents -382,815,680.03 126,841,422.98
Add: balance of cash and cash equivalents at the beginning of term 1,850,354,648.10 1,723,513,225.12
VI ..Balance of cash and cash equivalents at the end of term 1,467,538,968.07 1,850,354,648.10
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin Can
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
6. Cash Flow Statement of the Parent Company
In RMB
Items Year 2021 Year 2020
I.Cash flows from operating activities
Cash received from sales of goods or rending of services 2,515,049,261.36 1,923,339,387.85
Tax returned 3,177,679.96 2,569,038.00
Other cash received from business operation 85,083,996.83 125,812,064.56
Sub-total of cash inflow 2,603,310,938.15 2,051,720,490.41
Cash paid for purchasing of merchandise and services 1,620,710,170.84 1,041,504,256.96
Cash paid to staffs or paid for staffs 568,164,460.95 516,788,220.90
Taxes paid 394,260,109.04 90,229,706.75
Other cash paid for business activities 165,905,142.91 184,157,740.03
Sub-total of cash outflow from business activities 2,749,039,883.74 1,832,679,924.64
Net cash generated from /used in operating activities -145,728,945.59 219,040,565.77
II. Cash flow generated by investing
Cash received from investment retrieving 109,119,738.31
Cash received as investment gains 367,693,490.76 227,319,478.82
Net cash retrieved from disposal of fixed assets, intangible assets, and
260,108.20 218,580.57
other long-term assets
Net cash received from disposal of subsidiaries or other operational
units
Other investment-related cash received 2,580,396,347.51 1,453,552,142.55
Sub-total of cash inflow due to investment activities 2,948,349,946.47 1,790,209,940.25
Cash paid for construction of fixed assets, intangible assets and other
116,494,283.25 165,203,042.26
long-term assets
Cash paid as investment 279,075,715.98 27,000,000.00
Net cash received from subsidiaries and other operational units 0.00
Other cash paid for investment activities 2,476,000,000.00 1,595,000,000.00
Sub-total of cash outflow due to investment activities 2,871,569,999.23 1,787,203,042.26
Net cash flow generated by investment 76,779,947.24 3,006,897.99
III. Cash flow generated by financing
Cash received as investment
Cash received as loans 150,000,000.00 150,000,000.00
Other financing –related ash received 110,195,995.86
Sub-total of cash inflow from financing activities 260,195,995.86 150,000,000.00
Cash to repay debts 150,000,000.00
Cash paid as dividend, profit, or interests 188,403,557.65 150,773,829.89
Other cash paid for financing activities 1,103,760.00 144,078,948.09
Sub-total of cash outflow due to financing activities 339,507,317.65 294,852,777.98
Net cash flow generated by financing -79,311,321.79 -144,852,777.98
IV. Influence of exchange rate alternation on cash and cash
-2,217,274.76 -20,884,122.96
equivalents
V.Net increase of cash and cash equivalents -150,477,594.90 56,310,562.82
Add: balance of cash and cash equivalents at the beginning of term 1,023,812,557.30 967,501,994.48
VI ..Balance of cash and cash equivalents at the end of term 873,334,962.40 1,023,812,557.30
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin Can
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
7. Consolidated Statement on Change in Owners’ Equity
Amount in this period
In RMB
Year 2021
Owner’s equity Attributable to the Parent Company
Other Equity Comm Minor Total of
Items Less: Other
Share instrument Capital Specialize Surplus on risk Retained Oth shareholder owners’
Shares in Comprehens Subtotal
Capital Preferr Oth reserves d reserve reserves provisi profit er s’ equity equity
ed Sustaina stock ive Income
on
stock ble debt er
754,010,40 153,617,61 144,078,94 3,114,962,38 17,699,63 621,112,80 3,587,465,03 8,104,788,94 445,350,33 8,550,139,27
I.Balance at the end of last year
0.00 9.65 8.09 6.84 5.27 7.78 9.91 1.36 7.13 8.49
Add: Change of accounting policy
Correcting of previous errors
226,288,84 869,345.5 4,065,282. -172,106,63 59,116,837.2 81,115,077. 140,231,914.
Merger of entities under common control
7.27 9 04 7.64 6 25 51
Other
II.Balance at the beginning of current 754,010,40 379,906,46 144,078,94 3,114,962,38 18,568,98 625,178,08 3,415,358,40 8,163,905,77 526,465,41 8,690,371,19
year 0.00 6.92 8.09 6.84 0.86 9.82 2.27 8.62 4.38 3.00
-96,960,436 -485,484,62 -199,947. 346,225,008. -236,420,00 -124,400,66 -360,820,67
III.Changed in the current year
.42 9.85 34 64 4.97 6.91 1.88
-485,484,62 649,992,474. 164,507,844. 77,002,585. 241,510,430.
（1）Total comprehensive income
9.85 56 71 70 41
（II）Investment or decreasing of capital 17,297,907. 17,297,907.4 17,617,907.4
320,000.00
by owners 40 0 0
1 ． Ordinary Shares invested by sharehol
320,000.00 320,000.00
ders
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
2 ． Holders of other equity instruments i
nvested capital
3．Amount of shares paid and accounted 17,297,907. 17,297,907.4 17,297,907.4
as owners’ equity 40 0 0
4．Other
-185,864,64 -185,864,64 -73,830,370 -259,695,01
（III）Profit allotment
9.99 9.99 .00 9.99
1.Providing of surplus reserves
2.Providing of common risk provisions
3．Allotment to the owners (or -185,864,64 -185,864,64 -73,830,370 -259,695,01
shareholders) 9.99 9.99 .00 9.99
4．Other
(IV) 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.Change amount of defined benefit
plans that carry forward
Retained earnings
5．Other comprehensive income
carry-over retained earnings
6．Other
(V). Special reserves -238,297. -238,297.48 -793,099.20 -1,031,396.6
111
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
48 8
4,276,904.
1. Provided this year 4,276,904.10 696,449.70 4,973,353.80
10
-4,515,20 -4,515,201.5 -1,489,548. -6,004,750.4
2．Used this term
1.58 8 90 8
-114,258,34 -117,902,81 -232,122,80 -127,099,78 -359,222,59
（VI）Other 38,350.14
3.82 5.93 9.61 3.41 3.02
754,010,40 282,946,03 144,078,94 2,629,477,75 18,369,03 625,178,08 3,761,583,41 7,927,485,77 402,064,74 8,329,550,52
IV. Balance at the end of this term
0.00 0.50 8.09 6.99 3.52 9.82 0.91 3.65 7.47 1.12
Amount in last year
In RMB
Year 2021
Owner’s equity Attributable to the Parent Company
Other Equity Comm Minor Total of
Items Less: Other
Share instrument Capital Specialize Surplus on risk Retained Oth shareholder owners’
Shares in Comprehens Subtotal
Capital Preferr Oth reserves d reserve reserves provisi profit er s’ equity equity
ed Sustaina stock ive Income
on
stock ble debt er
754,010,40 152,973,21 1,784,195,15 18,324,47 621,112,80 3,276,880,09 6,607,496,14 451,479,49 8,550,139,27
I.Balance at the end of last year
0.00 9.65 6.34 3.28 7.78 1.53 8.58 3.03 8.49
Add: Change of accounting policy
Correcting of previous errors
226,288,84 869,345.5 4,035,826. -187,499,84 43,694,170.0 74,511,097. 140,231,914.
Merger of entities under common control
7.27 9 27 9.12 1 57 51
Other
II.Balance at the beginning of current 754,010,40 379,262,06 1,784,195,15 19,193,81 625,148,63 3,089,380,24 6,651,190,31 525,990,59 8,690,371,19
year 0.00 6.92 6.34 8.87 4.05 2.41 8.59 0.60 3.00
112
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
144,078,94 1,330,767,23 -624,838.0 325,978,159. 1,512,715,46 -360,820,67
III.Changed in the current year 644,400.00 29,455.77 474,823.78
8.09 0.50 1 86 0.03 1.88
1,330,767,23 476,268,110. 1,807,035,34 102,827,411 241,510,430.
（1）Total comprehensive income
0.50 63 1.13 .91 41
（II）Investment or decreasing of capital 17,617,907.4
by owners 0
1 ． Ordinary Shares invested by sharehol
320,000.00
ders
2．Holders of other equity instruments in
vested capital
3．Amount of shares paid and accounted 17,297,907.4
as owners’ equity 0
4．Other
-150,289,95 -150,260,49 -101,716,38 -259,695,01
（III）Profit allotment 29,455.77
0.77 5.00 0.00 9.99
1.Providing of surplus reserves 29,455.77 -29,455.77
2.Providing of common risk provisions
3．Allotment to the owners (or -150,260,49 -150,260,49 -101,716,38 -259,695,01
shareholders) 5.00 5.00 0.00 9.99
4．Other
(IV) Internal transferring of owners’
equity
1. Capitalizing of capital reserves (or to
capital shares)
2. Capitalizing of surplus reserves (or to
capital shares)
113
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
3．Making up losses by surplus reserves.
4.Change amount of defined benefit plans
that carry forward
Retained earnings
5．Other comprehensive income
carry-over retained earnings
6．Other
-624,838.0 -1,031,396.6
(V). Special reserves -624,838.01 -636,208.13
1 8
2,335,261.
1. Provided this year 2,335,261.60 56,631.07 4,973,353.80
60
-2,960,099 -2,960,099.6 -6,004,750.4
2．Used this term -692,839.20
.61 1 8
144,078,94 -143,434,54 -359,222,59
（VI）Other 644,400.00
8.09 8.09 3.02
754,010,40 379,906,46 144,078,94 3,114,962,38 18,568,98 625,178,08 3,415,358,40 8,163,905,77 526,465,41 8,329,550,52
IV. Balance at the end of this term
0.00 6.92 8.09 6.84 0.86 9.82 2.27 8.62 4.38 1.12
8.Statement of change in owner’s Equity of the Parent Company
Amount in this period
In RMB
Year 2021
Other Equity instrument
Other
Items Capital Less: Shares Specialized Surplus Othe Total of
Share capital Preferre Othe Comprehensive Retained profit
Sustainabl reserves in stock reserve reserves r owners’ equity
d stock r Income
e debt
114
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
754,010,400. 138,953,250. 144,078,948. 3,115,610,428. 6,000,000.0 602,356,402. 2,978,322,472. 7,451,174,005.
I.Balance at the end of last year
00 09 09 47 0 65 76 88
Add: Change of accounting policy
Correcting of previous errors
Other
754,010,400. 138,953,250. 144,078,948. 3,115,610,428. 6,000,000.0 602,356,402. 2,978,322,472. 7,451,174,005.
II.Balance at the beginning of current year
00 09 09 47 0 65 76 88
-17,496,151.4 -485,297,242.7
III.Changed in the current year 514,870,642.43 12,077,248.29
4 0
-485,297,242.7
（I）Total comprehensive income 670,229,145.02 184,931,902.32
0
17,297,907.4
(II) Investment or decreasing of capital by owners 17,297,907.40
0
1．Ordinary Shares invested by shareholders
2 ． Holders of other equity instruments invested c
apital
3.Amount of shares paid and accounted as 17,297,907.4
17,297,907.40
owners’ equity 0
4．Other
-183,614,649.9 -183,614,649.9
（III）Profit allotment
9 9
1.Providing of surplus reserves
-183,614,649.9 -183,614,649.9
2．Allotment to the owners (or shareholders)
9 9
3．Other
(IV) Internal transferring of owners’ equity
1. Capitalizing of capital reserves (or to capital
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
shares)
2. Capitalizing of surplus reserves (or to capital
shares)
3．Making up losses by surplus reserves.
4.Change amount of defined benefit plans that
carry forward
Retained earnings
5．Other comprehensive income carry-over
retained earnings
6．Other
(V) Special reserves
2,847,667.7
1. Provided this year 2,847,667.75
5
-2,847,667.7
2．Used this term -2,847,667.75
5
-34,794,058.8
（VI）Other 28,256,147.40 -6,537,911.44
4
754,010,400. 121,457,098. 144,078,948. 2,630,313,185. 6,000,000.0 602,356,402. 3,493,193,115. 7,463,251,254.
IV. Balance at the end of this term
00 65 09 77 0 65 19 17
Amount in last year
In RMB
Year 2020
Other Equity instrument
Other
Items Capital Less: Shares Specialized Surplus Othe Total of
Share Capital Preferre Othe Comprehensive Retained profit
Sustainabl reserves in stock reserve reserves r owners’ equity
d stock r Income
e debt
I.Balance at the end of last year 754,010,400. 138,953,250. 1,784,509,419. 6,000,000.0 602,356,402. 2,709,696,426. 5,995,525,899.
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
00 09 91 0 65 43 08
Add: Change of accounting policy
Correcting of previous errors
Other
754,010,400. 138,953,250. 1,784,509,419. 6,000,000.0 602,356,402. 2,709,696,426. 5,995,525,899.
II.Balance at the beginning of current year
00 09 91 0 65 43 08
144,078,948. 1,331,101,008. 1,455,648,106.
III.Changed in the current year 268,626,046.33
09 56 80
1,331,101,008. 1,748,487,549.
（I）Total comprehensive income 417,386,541.33
56 89
(II) Investment or decreasing of capital by owners
1．Ordinary Shares invested by shareholders
2 ． Holders of other equity instruments invested c
apital
3.Amount of shares paid and accounted as owners’
equity
4．Other
-148,760,495.0 -148,760,495.0
（III）Profit allotment
0 0
1.Providing of surplus reserves
-148,760,495.0 -148,760,495.0
2．Allotment to the owners (or shareholders)
0 0
3．Other
(IV) Internal transferring of owners’ equity
1. Capitalizing of capital reserves (or to capital
shares)
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
2. Capitalizing of surplus reserves (or to capital
shares)
3．Making up losses by surplus reserves.
4.Change amount of defined benefit plans that
carry forward
Retained earnings
5．Other comprehensive income carry-over
retained earnings
6．Other
(V) Special reserves
1,937,754.1
1. Provided this year 1,937,754.15
5
-1,937,754.1
2．Used this term -1,937,754.15
5
144,078,948. -144,078,948.0
（VI）Other
09 9
754,010,400. 138,953,250. 144,078,948. 3,115,610,428. 6,000,000.0 602,356,402. 2,978,322,472. 7,451,174,005.
IV. Balance at the end of this term
00 09 09 47 0 65 76 88
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
III．Basic Information of the Company
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, Headquartered in
Hangzhou, Zhejiang Province. The company now holds a unified social credit code for the 913300007042026204
business license, The Company’s registered capital is increased to RMB754.0104 million with total capital share
of 754.0104 million shares (face value RMB1.00). Among which state-owned legal person shares were 479.8248
million shares and 274.1856 million shares of current B shares. The shares were issued and listed for trading in
Shenzhen Stock Exchange on April 28, 1998. The design, manufacturing, Main Business Activities: R&D, Production and
Sales of Industrial Steam Turbine. Main Products: Industrial Steam Turbine and its accessories.
These Financial Statements are released upon approval at the 23rd meeting of the 8th term of Board held on
March 29, 2022.
As of March 29, 2022, the Company included the following 18 subsidiaries in the scope of the current
consolidated financial statements, as shown in Notes VI and VII to this financial statement.
No Names of subsidiaries included in the consolidated financial statements Abbreviation
of the current period
1 Hangzhou Steam Turbine Auxiliary Co., Ltd. Auxiliary Company
2 Zhongneng Steam Turbine Power Co., Ltd. Guoneng Company
3 Zhejiang Steam Turbine Packaged Technologies Co., Ltd., Packaged Technologies Co.
4 Hangzhou Steam Turbine Machinery & Equipment Co., Ltd Machinery Company
5 Zhyejiang Huayuan Steam Turbine Machinery Co., Ltd. Huayuan Company
6 Zhejiang Turbine Import & Export Co., Ltd. Turbine Company
7 Zhejiang Zhongrun Gas Turbine technology Co., Ltd. Zhongrun Company
8 Hangzhou Zhongneng Steam Turbine Power Co.,Ltd. Zhongneng Company
9 Hangzhou Zhongneng Steam Turbine Power（Indonesia）Co., Ltd. Indonesia Company
10 Hangzhou Hangfa Power Equipment Co., ltd. Hangfa Company
11 Hangzhou Steam Turbine Casing Co., ltd. Casing Company
12 Anhui Hangqi Casing Technology Co., Ltd. Anhui Casing Company
13 Hangzhou Steam Turbine New Energy Co., Ltd. New Energy Company
14 Hangzhou Steam Turbine Power Group Equipment Packaged Packaged Engineering Company
Engineering Co., Ltd.
15 Hangzhou Steam Turbine Automobile Sales Service Co., Ltd. Sales Company
16 Hangzhou Steam Tubine Industry and Trade Co., ltd. Industry and Trade Company
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
17 China mechanical and Electrical Institute -HSTG (Hangzhou) United China Mechanical Institute Company
Institutes Co., Ltd
18 Zhejiang Ranchuang Turbine mechanical Co., Ltd. Ranchuang Company
IV. Basis of compiling the financial statement
(1) Basis of compiling
The Company adopts perpetual operation as the basis of financial statements.
(II) Assessment on perpetuation
No issue or situation, in 12 months since the end of report period, composes major doubt on the
perpetuation assumption of the Company.
V. Principal Accounting Policies and Estimations
Principal Accounting Policies and Estimations
Important prompt: The Company utilized detailed accounting polices and estimations on providing of bad debt
provisions, fixed asset depreciation, intangible asset amortization, recognition of revenue, and so forth, according
to its business practices.
1. Statement of compliance to the Enterprise Accounting Standard
The finance report produced by the Company is accordance with the Enterprise Accounting Standard, and reflects
the Company’s financial state, business performance and cash flow frankly and completely.
2. Fiscal year
The Company uses the calendar year for its fiscal year. A fiscal year is from January 1 to December 31.
3. Operational period
The Company’s relatively shorter operational period, which is 12 months, and is used as division of liquidity of
assets and liabilities.
4. Standard currency for bookkeeping
The Company uses Renminbi (RMB) as the standard currency for book keeping.
5. Accounting treatment of the entities under common control and different control
1. Treatment of entities under common control
Assets 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
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
income
6. 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 “Enterprise Accounting Standard No. 33 –
Consolidated Financial Statements”, basing on the accounts of the parent company and the subsidiaries, and after
adjusting the long-term investment equity in the subsidiary on equity basis.
7. Joint venture arrangements classification and Co-operation accounting treatment
8. 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.
9. 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 basing on the exchange rate of the balance sheet date;
Owners’ equities other than Retained Profit are translated at the exchange rate of the date when the trade
happened. Income and expense items in the income statement are translated at the similar rate of the date when the
trade happened. Differences generated by the above translating of foreign currencies are demonstrated separately
under the owners’ equity in the balance sheet.
10.Financial instruments
(1) Classification of financial assets and financial liabilities
Financial assets are divided into the following three categories upon initial recognition: 1) Financial assets
measured in amortized cost; 2) Financial assets measured at fair value, whose changes are included in other
comprehensive income; 3) Financial assets measured at fair value, whose changes are included in current profits
and losses.
Financial liabilities are divided into the following four categories upon initial recognition: 1) Financial
liabilities measured at fair value, whose changes are included in current profits and losses; 2) Financial liabilities
resulting from the transfer of financial assets that do not meet the conditions for derecognition or continue to be
involved in the transferred financial assets; 3) Financial guarantee contracts that do not belong to the above 1) or
2), and loan commitments that do not belong to the above 1) and lend at a lower than market interest rate; 4)
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Financial liabilities measured in amortized cost.
(2) Recognition basis, measurement methods and conditions for derecognition of financial assets and financial
liabilities
However, if the accounts receivable initially recognized by the company do not contain significant financing
components or the company does not consider the financing components in the contract for less than one year, the
initial measurement shall be made according to the transaction price. The initial measurement is made according
to the transaction price defined in Accounting Standards for Business Enterprises No.14-Income.
2) Subsequent measurement methods of financial assets
①Financial assets measured at amortized cost
The actual interest rate method is adopted for subsequent measurement according to amortized cost. Gains or
losses arising from financial assets measured in amortized cost that are not part of any hedging relationship are
included in current profits and losses when derecognition, reclassification, amortization according to the effective
interest rate method, or impairment recognition.
② Debt instruments investment measured at fair value, whose changes are included in other comprehensive
income
Fair value is adopted for subsequent measurement. Interest, impairment losses or gains and exchange gains
and losses calculated by the effective interest rate method are included in the current profits and losses, while
other gains or losses are included in other comprehensive income. Upon termination of recognition, the
accumulated gains or losses previously included in other comprehensive income shall be transferred out of other
comprehensive income and included in current profits and losses.
③ Equity instrument investments measured at fair value, whose changes are included in other
comprehensive income
Fair value is adopted for subsequent measurement. Dividends received (except those that belong to the part
of investment cost recovery) are included in current profits and losses, and other gains or losses are included in
other comprehensive income. Upon termination of recognition, the accumulated gains or losses previously
included in other comprehensive income shall be transferred out of other comprehensive income and included in
retained income.
④ Financial assets measured at fair value and changes included in current profits and losses
The fair value is adopted for subsequent measurement, and the resulting gains or losses (including interest
and dividend income) are included in the current profits and losses unless the financial asset is part of the hedging
relationship.
3) Subsequent measurement methods of financial liabilities
① Financial liabilities measured at fair value, whose changes are included in current profits and losses
Such financial liabilities include transactional financial liabilities (including derivatives of financial liabilities)
and financial liabilities designated to be measured at fair value, whose changes are included in current profits and
losses. Such financial liabilities are subsequently measured at fair value. Changes in the fair value of financial
liabilities designated to be measured at fair value, whose changes are included in the profits and losses of the
current period due to changes in the company's own credit risk are included in other comprehensive income,
unless such treatment will cause or expand accounting mismatch in profits and losses. Other gains or losses
arising from such financial liabilities (including interest expenses and changes in fair value except for changes in
the company's own credit risk) are included in the current profits and losses unless the financial liabilities are part
of the hedging relationship. Upon termination of recognition, the accumulated gains or losses previously included
in other comprehensive income shall be transferred out of other comprehensive income and included in retained
income.
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
② Financial liabilities resulting from the transfer of financial assets that do not meet the conditions for
derecognition or continue to be involved in the transferred financial assets
B. Financial assets have been transferred, and the transfer meets the provisions of the Accounting Standards
for Business Enterprises No.23-Transfer of Financial Assets on the derecognition of financial assets.
② When the current obligation of a financial liability (or part thereof) has been discharged, the financial
liability (or part thereof) shall be derecognized accordingly.
(3) Recognition basis and measurement method of financial asset transfer
If the company has transferred almost all risks and rewards in the ownership of financial assets, it shall
terminate the recognition of the financial assets and separately recognize the rights and obligations arising from or
retained in the transfer as assets or liabilities; If almost all risks and rewards on the ownership of financial assets
are retained, the transferred financial assets shall continue to be recognized. If the company neither transfers nor
retains almost all risks and rewards in the ownership of the financial asset, the following situations shall be
handled respectively: 1) If the control over the financial asset is not retained, the recognition of the financial asset
shall be terminated, and the rights and obligations generated or retained in the transfer shall be separately
recognized as assets or liabilities; 2) If the control over the financial assets is retained, the relevant financial assets
shall be recognized according to the extent of continuing involvement in the transferred financial assets, and the
relevant liabilities shall be recognized accordingly.
If the overall transfer of financial assets meets the conditions for derecognition, the difference between the
following two amounts shall be included in the current profits and losses: 1) The book value of the transferred
financial assets on the derecognition date; 2) The sum of the consideration received for the transfer of financial
assets and the amount of the corresponding derecognized portion of the accumulated amount of changes in fair
value originally directly included in other comprehensive income (the financial assets involved in the transfer are
debt instrument investments measured at fair value, whose changes are included in other comprehensive income).
If a part of the financial asset is transferred and the transferred part meets the conditions for derecognition as a
whole, the book value of the financial asset before transfer shall be apportioned between the derecognition part
and the continuing recognition part according to their respective relative fair values on the transfer date, and the
difference between the following two amounts shall be included in the current profits and losses: 1) The book
value of the derecognition part; 2) The sum of the consideration of the derecognized portion and the amount of the
corresponding derecognized portion of the cumulative amount of changes in fair value originally directly included
in other comprehensive income (financial assets involved in transfer are debt instrument investments measured at
fair value, whose changes are included in other comprehensive income).
(4) Impairment of financial instruments
1) Impairment measurement and accounting treatment of financial instruments
On the basis of expected credit losses, the company carries out impairment treatment on financial assets
measured at amortized cost, debt instrument investments measured at fair value whose changes are included in
other comprehensive income, lease receivables, loan commitments other than financial liabilities classified as
financial liabilities measured at fair value, whose changes are included in current profits and losses, financial
liabilities not measured at fair value, whose changes are included in current profits and losses, or financial
guarantee contracts that are not financial asset transfers which do not meet the conditions for derecognition or
which continue to be involved in financial liabilities formed by transferred financial assets, and recognize loss
provisions.
Expected credit loss refers to the weighted average of the credit losses of financial instruments weighted by
the risk of default. Credit loss refers to the difference between the cash flow of all contracts discounted according
to the original real interest rate and the expected cash flow of all contracts receivable according to the contract,
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
that is, the present value of all cash shortages. Among them, the Company discounts the financial assets purchased
or originated with credit impairment at the actual interest rate adjusted by credit.
For financial assets purchased or originated that have suffered credit impairment, the company will only
recognize the accumulated changes in expected credit losses during the entire duration since initial recognition as
loss reserves on the balance sheet date.
For accounts receivable that do not contain significant financing components or that the company does not
consider financing components in contracts of not more than one year, the company uses simplified measurement
methods to measure the loss reserve according to the expected credit loss amount equivalent to the entire duration.
For lease receivables and receivables containing significant financing components, the company uses
simplified measurement methods to measure the loss reserve according to the expected credit loss amount
equivalent to the entire duration.
For financial assets other than the above measurement methods, the company evaluates whether its credit risk
has increased significantly since the initial recognition on each balance sheet date. If the credit risk has increased
significantly since the initial recognition, the company shall measure the loss reserve according to the amount of
expected credit loss during the whole duration. If the credit risk has not increased significantly since the initial
recognition, the company shall measure the loss reserve according to the expected credit loss amount of the
financial instrument within the next 12 months.
The company uses the available reasonable and reliable information, including forward-looking information,
to determine whether the credit risk of financial instruments has increased significantly since the initial
recognition by comparing the risk of default on the balance sheet date with the risk of default on the initial
recognition date.
The company evaluates expected credit risks and measures expected credit losses on the basis of individual
financial instruments or combinations of financial instruments. When based on the combination of financial
instruments, the company divides financial instruments into different combinations based on common risk
characteristics.
For financial assets measured in amortized cost, the loss reserve shall be offset against the book value of the
financial assets listed in the balance sheet; For creditor's rights investments measured at fair value, whose changes
are included in other comprehensive income, the company recognizes its loss reserve in other comprehensive
income, which does not offset the book value of the financial asset.
(2) Financial instruments for assessing expected credit risks and measuring expected credit losses by
combination
Items Basis for determining combination Methods of measuring expected credit loss
Other receivables-associated Taking related parties within the scope of
Refer to the historical credit loss experience,
transaction combinations within the consolidated financial statements as credit
combine the current situation with the forecast
scope of consolidated financial risk characteristics, other receivables are
of future economic situation, and calculate the
statements combined of the Company
expected credit loss through default risk
Taking aging as the credit risk characteristic,
exposure and the expected credit loss rate
combine other receivables except the related
Other receivables-aging combination within the next 12 months or the whole
party receivables within the scope of the
duration.
consolidated financial statements
(3) Expected credit risks and measuring expected credit losses by combination
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
1) Methods of specific combination and measurement of expected credit loss
Items Basis for determining combination Methods of measuring expected credit loss
Bank acceptance bills receivable Refer to the historical credit loss experience, combine
the current situation and the forecast of the future
economic situation, compile a comparison table
Commercial acceptance bills Bill type between the aging of accounts receivable and the
receivable expected credit loss rate during the whole duration,
and calculate the expected credit loss.
Refer to the historical credit loss experience, combine
Taking related parties within the
Accounts receivable-associated the current situation and the forecast of the future
scope of consolidated financial
transaction combinations within the economic situation, compile a comparison table
statements as credit risk
scope of consolidated financial between the aging of accounts receivable and the
characteristics, receivables are
statements expected credit loss rate during the whole duration,
combined of the company
and calculate the expected credit loss.
Refer to the historical credit loss experience, combine
Taking aging as the credit risk
the current situation and the forecast of the future
Accounts receivable-aging characteristic, combine receivables
economic situation, compile a comparison table
except the related party receivables
combination between the aging of accounts receivable and the
within the scope of the consolidated
expected credit loss rate during the whole duration,
financial statements
and calculate the expected credit loss.
Contract assets——associated Taking related parties within the Refer to the historical credit loss experience, combine
transaction combinations within the scope of consolidated financial the current situation and the forecast of the future
scope of consolidated financial statements as credit risk economic situation, compile a comparison table
statements characteristics, Costract assets are between the aging of accounts receivable and the
combined of the company expected credit loss rate during the whole duration,
and calculate the expected credit loss.
Contract assets——aging combination Taking aging as the credit risk Refer to the historical credit loss experience, combine
characteristic, combine receivables the current situation and the forecast of the future
except the related party contract economic situation, compile a comparison table
assets within the scope of the between the aging of accounts receivable and the
consolidated financial statements expected credit loss rate during the whole duration,
and calculate the expected credit loss.
Long-term receivable——aging Aging Refer to the historical credit loss experience, combine
combination the current situation and the forecast of the future
economic situation, compile a comparison table
between the aging of accounts receivable and the
expected credit loss rate during the whole duration,
and calculate the expected credit loss.
2) Account receivable、Contract assets——Table of Aging of Aging Combination and Expected Credit Loss
Rate for the Whole Duration
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Aging Receivable receivable/contract assets Expected credit
loss rate (%)
Within 1 year (inclusive, the same below) 5.00
1-2 years 10.00
2-3 years 30.00
3-4 years 60.00
4-5 years 80.00
Over 5 years 100.00
(5) Setoff of Financial Assets and Liabilities
The financial assets and liabilities of the company are shown separately in the balance sheet which do not
offset each other. However, when the following conditions are met at the same time, the net amount after mutual
offset is shown on the balance sheet. 1. The company has the legal right to offset the recognized amount, and this
legal right is currently enforceable. 2. The company plans to settle the financial assets or liquidate the financial
liabilities at the same time for netting settlement.
If the transfer of financial assets does not meet the conditions for the termination of recognition, the company
shall not set off the transferred financial assets and related liabilities.
11.Notes receivable
For details, please refer to Section X(5)-10 Financial instrument of this report.
12.Account receivable
For details, please refer to Section X(5)-10 Financial instrument of this report.
13. Financing of receivables
For details, please refer to Section X(5)-10 Financial instrument of this report.
14.Other account receivable
Methods for determining expected credit losses of other receivables and accounting treatment
For details, please refer to Section X(5)-10 Financial instrument of this report.
15.Inventories
(1) Inventory classification
Inventories include saleable finished goods or merchandise, product-in-process , consumption material and goods
in manufacturing procedure or working procedure.
(2) Pricing of inventory to be delivered
Delivered out raw materials are accounted by weighted average method, issued out finished products are
accounted at individual price.
(3) Recognition of realizable net value of inventory and providing of inventory impairment provision
At the balance sheet day, inventories are measured at the lower of costs and cashable net values, the individual
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
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 system: perpetual inventory system
(5) Amortization of low-value consumables and packaging materials
1.Low price consumable
Basis of amortizing: one-off
2.Packaging materials
Basis of amortizing: one-off
16.Contract assets
According to the relationship between performance obligation and customer payment, the company lists
contract assets or contract liabilities in the balance sheet. The company will offset the contractual assets and
contractual liabilities under the same contract and list them in net amount.
The company lists the right to receive consideration from customers unconditionally (that is, only depending
on the passage of time) as receivables, and lists the right to receive consideration after transferring goods to
customers (which depends on factors other than the passage of time) as contract assets.
The Company's obligation to transfer goods to customers for received or receivable consideration from
customers is listed as a contractual liability.
17.Constract cost
18.Held-for-sale asset
19.Creditor's rights investment
20.Other Creditor's rights investment
21.Long-term account receivable
For details, please refer to Section X(5)-10 Financial instrument of this report.
22. Long-term equity investment
1. Recognition of common control and substantial 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 substantial influence.
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
2. Recognition of initial investment costs
(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.
Recognition of “one-off” trade when long-term equity investment is composed by merger of entities under
common control by multiple steps.
Transactions under an “one-off” trade are accounted as a common trade of ownership.
Transactions which are not “one-off” trades are recognized for their initial investment cost basing on the share of
book value of net asset in the consolidated financial statement of the entities acquired. Balance between the initial
investment cost and the book value of the long-term equity investment before merger and the premium paid for
the new shares after merger, is adjusted to capital reserves; when the capital reserve is not enough to offset,
retained profit shall be adjusted thereof.
(2) For the long-term equity investments formed by merger of enterprises under different control, the initial
investment cost is recognized by the fair value of combined consideration on purchasing day and related expenses.
Long-term equity investment formed by acquisition of entities under different control by trade in multiple stages
are accounted separately in the financial statements and consolidated financial statements.
1) In individual financial account, the sum of book value of original equity investment plus new investment cost is
recognized as the initial investment cost on cost basis.
2) Recognition of “one-off” trade in consolidated financial statements
Transactions under an “one-off” trade are accounted as a common trade of ownership. Transactions which are not
“one-off” trades are re-measured for their fair value at the day of acquisition. Balance between the fair value and
the book value of the long-term equity investment is adjusted to current investment gains; other gains from equity
on equity basis before the acquisition day are written over to current gains of at the day of acquisition, but not the
gains from re-calculating of changes in net liability or asset by the invested entity.
(3) Formed by means other than entity merger:
Acquired by cash payment – initial investment cost is the actual amount of payment;
Acquired by issuing of equity certificates – initial investment cost is the fair value of equity certificate issued;
Acquired by debtor restructuring – initial cost recognized as according to the Enterprise Accounting Standard
No.12 – Debtor restructuring;
Acquired by trading of non-monetary asset - initial cost recognized as according to the Enterprise Accounting
Standard No.7 – Trade of non-monetary assets;
3. Subsequent measurement and recognition of gain/loss
Cost basis is adopted in accounting of long-term equity investment in entities under substantial control of the
Company; while equity basis is adopted in accounting of investment in affiliates and joint-ventures.
4. Treatment of disposal of subsidiaries by stages till losing of control power
(1) Individual account
The difference between the book value and the actual purchase price of the disposed equity is recorded into the
current profit and loss. With regard to the remaining equity, which still has a significant impact on the invested
entity or exercises joint control with other parties, it shall be converted to equity accounting; if the entity under
investment can no longer be controlled, jointly controlled or significantly affected, it shall be recognized as a
financial asset, Accounting shall be carried out in accordance with the relevant provisions of Accounting
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Standards for Enterprises No. 22-recognition and Measurement of Financial Instruments.
(2) Basis of Consolidated Financial Statements
1) Losing of controlling power on a subsidiary through disposal of equity by multiple trades, and not recognized
as “one-off” trade:
Before losing of control power, the balance of disposal consideration and the share of net asset attributable to the
Company on continued basis since purchasing or merger, is adjusted to capital reserves (capital premium),
whereas if the capital premium is not enough to offset the amount, retained profit will be offset at corresponding
amount.
At losing of control power over a former subsidiary, the retained equity shares shall be re-calculated according to
the fair value at the day of losing power. Sum of the consideration obtained from disposal and fair value of the
retained equity shares, less the share of net asset attributable to the Company on continued basis since purchasing
or merger, is accounted into investment gains of the period when the control power is disposed, and goodwill shall
be offset meanwhile. Other gains related to the equities in formal subsidiary shall be written over to current
investment gains at the period when control power was disposed.
2) Losing of controlling power on a subsidiary through disposal of equity by multiple trades, and recognized as
“one-off” trade:
The multiple trades are treated as one trade that causes losing of control power on a subsidiary. However, the
balance between the consideration received from each trade and corresponding share of net asset is recognized as
other gains in the consolidated accounts, and transferred collectively to gain/loss account of the period in which
the control power was lost.
23. Investment property
The measurement mode of investment property
Measurement cost method
Depreciation or amortization method
(1) Investment real estate includes leased land use rights, land use rights held and ready to be transferred after
appreciation, and leased buildings.
(2) Investment real estate is initially measured according to cost, followed by measurement by cost model,
and depreciated or amortized in the same way as fixed assets and intangible assets.
24. Fixed assets
1. Conditions for fixed asset recognition
Fixed assets is defined as the tangible assets which are held for the purpose of producing goods, providing
services, lease or for operation & management, and have more than one year of service life. Fixed assets are
recognized at satisfying of great possibility of benefit inflow and costs are accountable.
2. Depreciation
Categories Basis of depreciation Depreciation age (year) Retain value rate Annual depreciation ratio
Straight average on
Houses & buildings 20-40 4-5 4.8-2.35
period
Equipment & machinery Straight average on 5-15 4-5 19.2-6.27
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period
Straight average on
Transportation equipment 3-12 4-5 32-7.83
period
Straight average on
Office equipment 3-10 4-5 32-9.4
period
（3）Recognition basis, valuation and depreciation method for financing leased fixed assets
25. 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.
26. 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. Rates and amounts 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.
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27. Biological assets
28. Oil-gas assets
29. Assets of the right to use
For details, please refer to Section X （5）42 Lease.
30. Intangible assets
（1）Pricing Method, service life and impairment test
1. Intangible assets are land using rights, patents, and non-patent technologies, which are measured at 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 Amortiing years
Land using right 50
Patent 5-20
Non patent technology 10
Software 5-10
(2) Accounting policy for internal research and development expenditure
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.
31. Impairment of partial long-term assets
For those long-term assets such as equity investment, fixed assets measured on cost basis, construction-in-process,
intangible assets with limited service life, their recoverable amount shall be evaluated as soon as there was
evidence indicating impairment at the balance sheet day. For intangible assets such as goodwill from merger or
intangible assets with uncertain service lives, impairment test is performed each year whatever there is evidence of
impairment or not. Impairment test on goodwill is performed on combination of related assets.
When the result of prediction shows that the recoverable amount is lower than its book value, the balance shall be
provided impairment provision and accounted into current gain/loss.
32. Long-term amortizable expenses
33.Constract Liabilities
For details, please refer to Section X, V 16 Contract Assets of this report.
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34. Employees’ wage
1. Accounting of short-term wages
In the fiscal period when an employee is providing services, short-term wages actually occurred is recognized as
liability, and recorded into current gain/loss account or cost of related asset.
2.Accounting of stipulated beneficiary plan is on following steps:
1) On basis of expected accumulation of welfare, estimations on population variables and financial variables,
calculating of liabilities from stipulated beneficiary plan, and recognition of the period of related liabilities, are
performed on basis of non-bias and accordance actuary. Meanwhile, discount is performed on the liabilities from
stipulated beneficiary plan to recognize the current value and service cost of the liabilities from the stipulated
beneficiary plan.
2) When there is asset involved in the stipulated beneficiary asset, the deficit or premium from the balance of the
current value of liabilities of stipulated beneficiary plan over their fair values is recognized as its net liability or
net asset. When there is a premium with a stipulated beneficiary plan, the lower one between the premium and the
upper limit of the asset is recognized as the net asset of such stipulated beneficiary asset;
3) At end of period, employees’ wages from stipulated beneficiary plan are recognized by three parts including
service cost, net interest of net liability or net asset, and recalculated net asset or liability variation. The first two
are recorded into current gain/loss or related asset cost, the third is recorded to other gains, which will not be
written back to gain/loss in successive fiscal periods, but the amount can be transferred with the range of equity.
3. Accounting of dismissing welfare
Welfares for employees who are dismissed, the earlier one of the following is recognized as employee wage
liability, and recorded to current gain /loss:
(1) When the Company cannot, on its own call only, retrieve the dismissing welfare provided by dismissing of
service plan or suggestion;
(2) When the costs or expenses related to restructuring involved in the dismissing welfare are recognized by the
Company.
4. Accounting of other long-term employees’ welfares
As of long-term welfares provided to the employees, those which satisfy conditions of the stipulated saving plan
are treated according to related regulations of stipulated saving plan; those which other than the aforesaid, are
treated according to the stipulated beneficiary plan. In viewing of simplifying accounting treatment, employee
wage costs are recognized as service costs, the net amounts of interests of other long-term welfare net liability or
asset, along with recalculated variations of the both are recorded to the related gain/loss or cost of related asset.
35. Lease liabilities
For details, please refer to Section X （5）42 Lease.
36. Expected liabilities
(1) When it is very much likely to cause economic interests which can be reliably calculated outflow from
the company to fulfill the obligation which is due to giving security outside, contentious matter, quality guarantee
of products, onerous contract and other contingency, the company will regard the obligation as anticipation
liabilities.
(2) The company will make an initial measurement of anticipation liabilities according to needed expense
of best estimation when fulfilling related obligations and check the book value of anticipation liabilities on the
balance sheet date.
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37.Share-based Payment
(1) Types of share-based payment
Including equity-settled share-based payment and cash-settled share-based payment.
(2) Accounting treatment related to implementation, modification and termination of share-based payment
plan
1) Equity-settled share-based payment
Equity-settled share-based payment in exchange for employee services immediately after the grant, shall be
included in relevant costs or expenses according to the fair value of equity instruments on the grant date, and the
capital reserve shall be adjusted accordingly. For equity-settled share-based payment that can only be exchanged for
employee services if the service in the waiting period is completed or the specified performance conditions are met,
on each balance sheet date in the waiting period, based on the best estimation of the number of equity instruments
with the vesting right, the services obtained in the current period shall be included in relevant costs or expenses
according to the fair value of the equity instruments on the granting date, and the capital reserve shall be adjusted
accordingly.
Share-based payment for equity settlement of other parties' services, if the fair value of other parties' services
can be reliably measured, shall be measured according to the fair value of other parties' services on the acquisition
date; If the fair value of other parties' services cannot be measured reliably, but the fair value of equity instruments
can be measured reliably, it shall be measured according to the fair value of equity instruments on the service
acquisition date, and included in the related costs or expenses, and the owner's equity shall be increased accordingly.
2) Cash-settled share-based payment
Cash-settled share-based payment in exchange for employee services immediately after the grant, shall be
included in relevant costs or expenses according to the fair value of liabilities borne by the Company on the grant
date, and liabilities shall be increased accordingly. For cash-settled share-based payment in exchange for employee
services only after the service in the waiting period is completed or the specified performance conditions are met, on
each balance sheet date in the waiting period, based on the best estimation of the situation of the vesting right, the
services obtained in the current period shall be included in the relevant costs or expenses and corresponding
liabilities according to the fair value of the liabilities assumed by the Company.
3) Modification and termination of the share-based payment plan
If the modification increases the fair value of the granted equity instruments, the Company shall
correspondingly recognize the increase of the obtained services according to the increase of the fair value of the
equity instruments; If the modification increases the number of equity instruments granted, the fair value of the
increased equity instruments will be recognized as the increase of services by the Company; If the Company
modifies the vesting conditions in a way that is beneficial to employees, the Company will consider the modified
vesting conditions when dealing with the vesting conditions.
If the modification reduces the fair value of the granted equity instruments, the Company will continue to
recognize the amount of services obtained based on the fair value of the equity instruments on the granting date,
without considering the reduction of the fair value of the equity instruments; If the modification reduces the number
of granted equity instruments, the Company will treat the reduced part as the cancellation of the granted equity
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instruments; If the vesting conditions are modified in a way that is unfavorable to employees, the modified vesting
conditions will not be considered when dealing with the vesting conditions.
If the Company cancels the granted equity instruments or settles the granted equity instruments during the
waiting period (except those cancelled due to failure to meet the vesting right conditions), the cancellation or
settlement will be treated as accelerated vesting right, and the amount originally recognized during the remaining
waiting period will be immediately recognized.
38 . Other financial instruments such as preferred shares and perpetual capital securities
39.Revenues
Accounting policies used for revenue recognition and measurement
1. Recognizing of revenue
Since the starting date of the contract, the company shall evaluate the contract, identifies each individual
performance obligation contained in, and determines whether each individual performance obligation is
performed within a certain period of time or at a certain point of time.
The performance obligation is defined as fulfillment within a certain period of time if one of the following
conditions is met, otherwise, it is defined as fulfilled at a certain point in time: (1) The customer obtains and
consumes the economic benefits brought by the company's performance while the company performs the contract;
2) The customer can control the goods under manufacturing or services during the company's performance; (3)
The goods or services produced during the company's performance have irreplaceable uses, and the company has
the right to accumulate for the completed performances during the entire contract period.
For obligations performed within a certain period of time, the company recognizes revenue in accordance
with the performance progress in that period. If the performance progress cannot be reasonably determined, and
the cost incurred is expected to be compensated, the revenue shall be recognized according to the amount of the
cost incurred until the performance progress can be reasonably determined. For obligations performed at a certain
point in time, revenue shall be recognized at the point when the customer obtains control of the relevant goods or
services. When judging whether the customer has obtained control of the product, the company shall consider the
following points: (1) The company has the current right to receive payment for the product, that is, the customer
has the current payment obligation for the product; (2) The company has transferred the legal ownership of the
product to the customer, that is, the customer has the legal ownership of the product; (3) The company has
transferred the physical product to the customer, that is, the customer has physically taken possession of the
product; (4) The company has transferred the main risks and rewards on the ownership of the product to the
customer, that is, the customer has obtained the main risks and rewards on the ownership of the product; (5) the
customer has accepted the product; (6) other signs that the customer has obtained control of the product.
2. Principle of income measurement
(1) The company shall measure revenue based on the transaction price allocated to each individual
performance obligation. The transaction price is the amount of consideration that the company expects to be
entitled to receive due to the transfer of goods or services to customers, while does not include payments received
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on behalf of third parties and payments expected to be returned to customers.
(2) If there is variable consideration in the contract, the company shall determine its best estimate according to
the expected value or the most likely amount, but the transaction price including the variable consideration shall
not exceed the accumulated amount that, if relevant uncertainty is eliminated, will most likely have no significant
reversal.
(3) If there is any significant financing component in the contract, the company shall determine the
transaction price based on the amount payable in cash when the customer assumes control of the goods or services.
The difference between transaction price and contract consideration shall be amortized through effective interest
method during the contract period.
(4) If the contract contains two or more performance obligations, the company shall, on date of the contract,
allocate the transaction price to each individual obligation item in accordance with the relative proportion of the
separate selling price of promised goods.
3. Specific methods of revenue recognition
1) Industrial steam turbine and other products sales business
The company's selling of steam turbines, Recreciprocating mechanical equipment and its accessories ,
auxiliary equipment, spare parts and other products and provide after-sales service.
Domestic sales revenue is recognized when the Company has delivered the product in accordance with the co
ntract and obtained the receipt confirmed by the purchaser, with received the payment or obtained the right to rece
ive payment and the relevant economic benefits are likely to flow in. Export sales revenue is recognized when the
Company has declared the product in accordance with the contract and obtained the export goods declaration form
and the bill of lading, with received the payment or obtained the right to receive payment and the relevant econo
mic benefits are likely to flow in.
2) Hydro-generator set sales business and engineering service business (including EPC and other general
contracting projects)
The Company's business of selling hydro-generator sets and providing engineering services are the
performance obligations performed within a certain period of time. The performance progress is determined
according to the proportion of the incurred cost to the estimated total cost, and the revenue is recognized according
to the performance progress. When the performance progress cannot be reasonably recognized, if the cost already
incurred by the Company is expected to be compensated, the revenue will be recognized according to the cost
amount already incurred until the performance progress can be reasonably recognized.
The adoption of different business models in similar businesses leads to differences in accounting policies for
revenue recognition
40. Government subsidy
1. Government subsidies are recognized while they meet the following conditions at the same time: (1) the
Company can meet the conditions attached to the government subsidies; (2) the Company can receive government
subsidies. Where government subsidies are monetary assets, they shall be measured by the amount received or
receivable. Where government subsidies are non-monetary assets, they shall be measured by the fair value; if the
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fair value cannot be reliably obtained, they shall be measured by the nominal amount.
2. Recognition basis and accounting of asset-related government subsidy
Government subsidies used for formation of long-term assets through purchase, construction or any other
method as stipulated by government documents fall into the category of asset-related government subsidies. If
government subsidies are not defined in the government documents, a judgment shall be made on the ground of
essential conditions for obtaining the subsidies, among which, ones with an essential condition of formation of
long-term assets through purchase, construction or any other method shall be asset-related government subsidies.
For government subsidies related to assets, the book value of the relevant assets is deducted or the deferred
income is recognized. Where such subsidies are recognized as deferred income, the relevant assets shall, within
the useful life of the relevant assets, be reasonably recognized, The method of the system shall be recorded into
profit and loss by stages. The government subsidy measured according to the nominal amount shall be directly
accounted for in the profits and losses of the current period. Where the relevant assets are sold, transferred,
scrapped or damaged before the end of their useful life, Transfer the undistributed balance of deferred income to
the current profit or loss of asset disposal.
3. Recognition basis and accounting of income-related government subsidy
A government subsidy other than an asset-related government subsidy is divided into profit-related government
subsidies. It is difficult to distinguish between asset-related and revenue-related government subsidies that include
both asset-related and revenue-related components. Overall classification as government subvention related to
income. Than asset-related subsidies are recognized as income-related government subsidies. Those, which are
used to cover costs or losses in subsequent periods, are recognized as deferred income and accounted to current
gain/loss to the periods of related expenses. Those, which are used to makeup expenses or losses already occurred,
are recorded to current gain/loss account.
4. Government subsidies related to routine business activities of the Company shall be included into other incomes
or offset relevant costs and expenses by nature of economic business. Government subsidies irrelevant to routine
activities of the Company shall be included into the non-operating receipt and disbursement.
5. Accounting treatment method for interest subsidies for policy-based preferential loans
(1) If the finance allocates interest subsidy funds to a lending banks that serves a loan to the Company at a
policy-based preferential rate, the actual debit amount received shall be seen as the entry value of loan and relevant
loan costs shall be worked out pursuant to the loan principal and the policy-based preferential rate.
(2) If the finance directly allocates interest subsidy funds to the Company, corresponding interest subsidies
shall offset relevant loan costs.
41. Deferred income tax assets/ deferred income tax liabilities
1. Deferred 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. Deferred income tax assets are recognized limitedly by the income tax which very possibly deduct deductible
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temporary difference. At balance sheet day, the not-yet recognized deferred 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.
42. Lease
(1)Accounting of operational lease
1) Company as the Lessee
On the start date of the lease term, the company will recognize the lease with a lease term of no more than 12
months and without the purchase option as a short-term lease; and recognize the lease with lower value when a
single leased asset is a brand-new asset as a low-value asset lease. If the company subleases or expects to sublet
the leased assets, the original lease shall not be deemed as low-value asset lease.
For all short-term leases and low-value asset leases, the company will calculate the lease payment amount
into the relevant asset cost or current profits and losses according to the straight-line method in each period of the
lease term.
In addition to the above-mentioned short-term leases and low-value asset leases with simplified processing,
the company recognizes the right to use assets and lease liabilities for leases on the start date of the lease term.
① Right-to-use assets
The right-to-use assets are initially measured according to the cost, which includes: i. The initial
measurement amount of lease liabilities; ii. If there is lease incentive for the lease payment issued on or before the
start date of the lease term, the amount related to the lease incentive enjoyed shall be deducted; ⅲ. Initial direct
expenses incurred by the lessee; iv. The estimated costs that the lessee will incur for dismantling and removing the
leased assets, restoring the leased assets' site or restoring the leased assets to the state agreed in the lease terms.
The company depreciates the right-to-use assets according to the straight-line method. If it can be reasonably
determined that the ownership of the leased asset is acquired at the expiration of the lease term, the company shall
accrue depreciation within the remaining service life of the leased asset. If it is impossible to reasonably determine
that the ownership of the leased asset can be acquired at the expiration of the lease term, the company shall accrue
depreciation within the shorter of the lease term and the remaining service life of the leased asset.
② Lease liabilities
On the lease start date, the company recognizes the present value of the unpaid lease payment as the lease
liability. When calculating the present value of the lease payment amount, the lease inclusive interest rate is used
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as the discount rate. If the lease inclusive interest rate cannot be determined, the company's incremental loan
interest rate is used as the discount rate. The difference between the lease payment amount and its present value is
considered as unrecognized financing expense, and the interest expense is recognized according to the discount
rate for recognizing the present value of the lease payment amount in each period of the lease term, which is
included in the current profits and losses. The variable lease payments that are not included in the measurement of
lease liabilities are included in the current profits and losses when they actually occur.
After the start of the lease term, when the actual fixed payment amount changes, the estimated payable
amount of the guarantee residual value changes, the index or ratio used to determine the lease payment amount
changes, and the evaluation result or actual exercise situation of the purchase option, renewal option or
termination option changes, the company will re-measure the lease liability according to the present value of the
changed lease payment amount, and adjust the book value of the right-to-use assets accordingly. If the book value
of the right-to-use assets has been reduced to zero, but the lease liability still needs to be further reduced, the
remaining amount will be included in the current profits and losses.
2) Company as the Lessor
On the lease start date, the company classifies the lease with almost all risks and rewards related to the
ownership of leased assets transferred as financial lease, and all other leases as operating leases.
① Operating lease
During each period of the lease term, the company recognizes the lease receipts as lease income according to
the straight-line method, and the initial direct expenses incurred are capitalized and allocated on the same basis as
the lease income recognition, and are included in the current profits and losses by stages. The variable lease
payments related to operating leases that are not included in the lease receipts obtained by the company are
included in the current profits and losses when they actually occur.
② Financing lease
On the start date of the lease term, the company recognizes the receivable financing lease payments
according to the net lease investment (the sum of the unsecured residual value and the present value of the lease
receipts that have not been received at the start date of the lease term), and derecognizes the financing lease assets.
During each period of the lease term, the company calculates and recognizes the interest income according to the
interest rate included in the lease.
The variable lease payments obtained by the company that are not included in the measurement of net lease
investment are recorded into the current profits and losses when they actually occur.
3) After-sale leaseback
① Company as the Lessee
According to the Accounting Standards for Business Enterprises No.14-Income, the company evaluates and
determines whether the asset transfer in the after-sale leaseback transaction is a sale.
If the asset transfer in the after-sale leaseback transaction is a sale, the company shall measure the
right-to-use assets formed by the after-sale leaseback according to the part of the book value of the original assets
related to the right-to-use acquired by leaseback, and only recognize the related gains or losses for the rights
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transferred to the lessor.
If the asset transfer in the after-sale leaseback transaction is not a sale, the company will continue to
recognize the transferred asset, and at the same time recognize a financial liability equal to the transfer income,
and conduct accounting treatment on the financial liability in accordance with Accounting Standards for Business
Enterprises No.22-Recognition and Measurement of Financial Instruments.
② Company as the Lessor
According to the Accounting Standards for Business Enterprises No.14-Income, the company evaluates and
determines whether the asset transfer in the after-sale leaseback transaction is a sale.
If the asset transfer in the after-sale leaseback transaction is a sale, the company shall conduct accounting
treatment on asset purchase according to other applicable accounting standards for enterprises, and conduct
accounting treatment on asset lease according to Accounting Standards for Enterprises No.21-Lease.
If the asset transfer in the after-sale leaseback transaction is not a sale, the company will not recognize the
transferred asset, but recognize a financial asset equal to the transfer income, and conduct accounting treatment on
the financial asset in accordance with Accounting Standards for Business Enterprises No.22-Recognition and
Measurement of Financial Instruments.
(2) Accounting Method for Financing Leases
43. Other significant accounting policies and estimates
(1)Work safety costs
The Company withdraws and includes work safety costs into relevant product costs or current profits and loss and
the subject of "special reserve" as per Measures for Management of Enterprise Withdrawal and Use of Work Safety
Costs (Cai Qi [2012] No.16) jointly promulgated by Ministry of Finance and State Administration of Work Safety.
As work safety costs withdrawn are used, ones attributable to the cost disbursement shall directly offset special
reserve. To form fixed assets, the disbursement incurred for inclusion into the subject of "construction in progress"
shall be recognized as fixed assets when safety projects are completed and available for use as expected; meanwhile,
costs for forming fixed assets shall offset special reserve, cumulative depreciation in the corresponding amount shall
be recognized and depreciation shall no longer be withdrawn for the fixed assets in the following period.
（2）Accounting treatment methods related to repurchase of company shares
If the shares of the Company are acquired for reasons such as reducing the registered capital or rewarding
employees, they shall be treated as treasury shares according to the actual amount paid, and registered for future
reference. If the repurchased shares are cancelled, the difference between the total face value of the shares calculated
according to the face value of the cancelled shares and the number of cancelled shares and the amount actually paid
for the repurchase will be offset against the capital reserve; if the capital reserve is insufficient for offset, the
retained earnings will be offset; If rewarding of the repurchased shares to the employees of the Company is
equity-settled share-based payment, when the employees exercise their right to purchase the shares of the Company
and receive the price, the cost of the treasury stocks delivered to the employees and the accumulated amount of
capital reserves (other capital reserves) during the waiting period will be written off, and meanwhile, the capital
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reserves (equity premium) will be adjusted according to such difference.
44.Change of main accounting policies and estimations
(1)Change of main accounting policies
√ Applicable □ Not applicable
Contents and causes of changes in accounting policies Approval procedure Remarks
The Company has implemented the revised Accounting Standards
for Business Enterprises No.21-Leasing (hereinafter referred to as
the new leasing standards) from January 1, 2021 (hereinafter
referred to as the first implementation date). According to the
relevant provisions of the convergence between the old and new
Adopted at the 10 Meeting of the Eighth
standards, the information of comparable period will not be
Board of Directors
adjusted, and the accumulated impact of the implementation of the
new standards on the first implementation date will be
retrospected, and the retained earnings and other related items in
the financial statements at the beginning of the reporting period
will be adjusted.
Since January 26, 2021, the Company has implemented the
Interpretation No.14 of Accounting Standards for Business
Enterprises issued by the Ministry of Finance in 2021, and this
change of accounting policy has no impact on the Company's
financial statements.
Since December 31, 2021, the company has implemented the
"Relevant Presentation of Centralized Fund Management" in
Interpretation No.15 of Accounting Standards for Business
Enterprises promulgated by the Ministry of Finance, and this
change of accounting policy has no impact on the Company's
financial statements.
1. The Company has implemented the revised Accounting Standards for Business Enterprises No.21-Leasing
(hereinafter referred to as the new leasing standards) from January 1, 2021 (hereinafter referred to as the first
implementation date).
(1) For the contracts existing before the first implementation date, the Company chooses not to re-evaluate
whether they are leases or include leases.
(2) For the lease contract in which the Company is the lessee, the Company adjusts the retained earnings at the
beginning of the reporting period and other related items in the financial statements according to the cumulative
impact of the new leasing standards and the original standard on the first implementation date, and does not adjust
the information in the comparable period. The specific treatment is as follows:
For the financial lease before the first implementation date, the Company measures the right-to-use assets and
lease liabilities respectively on the first implementation date according to the original book value of the financial
140
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
lease assets and the financial lease payments payable.
For the operating lease before the first implementation date, the Company measures the lease liabilities on the
first implementation date according to the present value of the remaining lease payment discounted at the
incremental borrowing rate on the first implementation date, and measures the right-to-use assets according to the
amount equal to the lease liabilities, and makes necessary adjustments according to the prepaid rent.
On the first implementation date, the Company conducts impairment test on the right-to-use assets and makes
corresponding accounting treatment according to the provisions of Note III (XVII) to this Financial Statement.
1) The main impacts of the implementation of the new leasing standards on the Company's financial
statements on January 1, 2021 are as follows:
In RMB
Balance Sheet
Items New Leasing Standards
December 31,2020 January 1,2021
Adjustment influence
Other current asset 50,652,585.75 -635,765.86 50,016,819.89
Right-to-use assets 28,461,441.04 28,461,441.04
Non-current liabilities due within
1,001,088.89 5,631,931.50 6,633,020.39
one year
Lease liabilities 22,193,743.68 22,193,743.68
2) The weighted average value of the Company's incremental borrowing interest rate adopted for the lease
liabilities included in the balance sheet on the first implementation date is 4.12%.
3) Simplification of operating lease before the first implementation date
① For lease contracts completed within 12 months after the first implementation date, the Company adopts
simplified method, and does not recognize the right-to-use assets and lease liabilities;
② When measuring lease liabilities, the Company adopts the same discount rate for lease contracts with
similar characteristics;
③ The measurement of the right-to-use assets does not include the initial direct cost;
④ The Company determines the lease term according to the actual exercise of the option to renew or
terminate the lease before the first implementation date and other latest information;
⑤ As an alternative to the impairment test of the right-to-use assets, the Company evaluates whether the
contract containing lease is a loss contract before the first implementation date according to the Accounting
Standards for Business Enterprises No.13-Contingencies, and adjusts the right-to-use assets according to the loss
reserve amount included in the balance sheet date before the first implementation date;
⑥ For the lease change before the first implementation date, the Company makes accounting treatment
according to the final arrangement of the lease change.
The above simplification has no significant impact on the Company's financial statements.
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
(2) For the operating lease contracts with low-value assets that existed before the first implementation date, the
Company adopts simplified methods, and does not recognize the right-to-use assets and lease liabilities, and treats
them according to the new leasing standards since the first implementation date.
(3) The lease contract of the Company as the lessor shall be accounted for according to the new leasing standards
from the first implementation date.
1. Since January 26, 2021, the Company has implemented the Interpretation No.14 of Accounting Standards
for Business Enterprises issued by the Ministry of Finance in 2021, and this change of accounting policy has no
impact on the Company's financial statements.
2. Since December 31, 2021, the company has implemented the "Relevant Presentation of Centralized Fund
Management" in Interpretation No.15 of Accounting Standards for Business Enterprises promulgated by the
Ministry of Finance, and this change of accounting policy has no impact on the Company's financial statements.
(1) Change of main accounting estimations
□ Applicable √ Not applicable
（2）Adjustments to the Financial Statements at the Beginning of the First Execution Year of any New Standards
Governing Financial Instruments, Revenue or Leases from year 2021
□ Applicable √ Not applicable
Whether need to adjust the balance sheet account at the beginning of the year
√ Yes □ No
Consolidated balance sheet
In RMB
Amount involved in the
Items December 31,2020 January 1,2021
adjustment
Current asset：
Monetary fund 1,999,509,842.32 1,999,509,842.32
Settlement provision
Outgoing call loan
Transactional financial assets 1,021,681,809.34 1,021,681,809.34
Derivative financial assets
Notes receivable 118,595,076.67 118,595,076.67
Account receivable 1,668,235,154.01 1,668,235,154.01
Financing of receivables 823,598,830.55 823,598,830.55
Prepayments 593,808,157.80 593,808,157.80
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
contracts receivable
Other account receivable 70,327,633.84 70,327,633.84
Including：Interest receivable
Dividend receivable 43,605,292.60 43,605,292.60
Repurchasing of financial assets
Inventories 2,306,574,195.23 2,306,574,195.23
Contract assets 535,880,910.51 535,880,910.51
Assets held for sales
Non-current asset due within 1
year
Other current asset 50,652,585.75 50,016,819.89 -635,765.86
Total of current assets 9,188,864,196.02 9,188,228,430.16 -635,765.86
Non-current assets
Loans and payment on other’s
behalf disbursed
Creditor' rights investment
Other creditor's rights investment
Long-term receivable 242,241,093.20 242,241,093.20
Long term share equity
11,899,308.84 11,899,308.84
investment
Other equity instruments
4,056,378,073.52 4,056,378,073.52
investment
Other non-current financial assets 16,046,102.59 16,046,102.59
Property investment 7,949,408.86 7,949,408.86
Fixed assets 1,309,749,127.82 1,309,749,127.82
Construction in progress 805,277,593.08 805,277,593.08
Production physical assets
Oil & gas assets
Use right assets 28,461,441.04 28,461,441.04
Intangible assets 315,925,092.55 315,925,092.55
Development expenses
Goodwill
Long-germ expenses to be
amortized
Deferred income tax asset 421,502,615.03 421,502,615.03
Other non-current asset
Total of non-current assets 7,186,968,415.49 7,215,429,856.53 28,461,441.04
Total of assets 16,375,832,611.51 16,403,658,286.69 27,825,675.18
Current liabilities
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Short-term loans 252,777,667.03 252,777,667.03
Loan from Central Bank
Borrowing funds
Transactional financial liabilities
Derivative financial liabilities
Notes payable 297,166,104.48 297,166,104.48
Account payable 1,343,959,443.91 1,343,959,443.91
Advance receipts 509,302.46 509,302.46
Contract liabilities 2,949,234,639.55 2,949,234,639.55
Selling of repurchased financial
assets
Deposit taking and interbank
deposit
Entrusted trading of securities
Entrusted selling of securities
Employees’ wage payable 130,312,202.44 130,312,202.44
Tax payable 298,065,195.51 298,065,195.51
Other account payable 389,470,779.78 389,470,779.78
Including：Interest payable
Dividend payable
Fees and commissions payable
Reinsurance fee payable
Liabilities held for sales
Non-current liability due within 1 6,633,020.39 5,631,931.50
1,001,088.89
year
Other current liability 387,706,953.97 387,706,953.97
Total of current liability 6,050,203,378.02 6,055,297,948.26 5,094,570.24
Non-current liabilities：
Reserve fund for insurance
contracts
Long-term loan 21,623,520.00 21,623,520.00
Bond payable
Including：preferred stock
Sustainable debt
Lease liability 22,193,743.68 22,193,743.68
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Long-term payable 407,946,545.09 407,946,545.09
Long-term remuneration payable
to staff
Expected liabilities
Deferred income 655,147,696.41 655,147,696.41
Deferred income tax liability 550,540,278.99 550,540,278.99
Other non-current liabilities
Total non-current liabilities 1,635,258,040.49 1,657,989,145.43 22,731,104.94
Total of liability 7,685,461,418.51 7,713,287,093.69 27,825,675.18
Owners’ equity
Share capital 754,010,400.00 754,010,400.00
Other equity instruments
Including：preferred stock
Sustainable debt
Capital reserves 379,906,466.92 379,906,466.92
Less：Shares in stock 144,078,948.09 144,078,948.09
Other comprehensive income 3,114,962,386.84 3,114,962,386.84
Special reserve 18,568,980.86 18,568,980.86
Surplus reserves 625,178,089.82 625,178,089.82
Common risk provision
Retained profit 3,415,358,402.27 3,415,358,402.27
Total of owner’s equity belong to
8,163,905,778.62 8,163,905,778.62
the parent company
Minority shareholders’ equity 526,465,414.38 526,465,414.38
Total of owners’ equity 8,690,371,193.00 8,690,371,193.00
Total of liabilities and owners’
16,375,832,611.51 16,403,658,286.69 27,825,675.18
equity
Parent Company Balance Sheet
In RMB
Amount involved in the
Items December 31,2020 January 1,2021
adjustment
Current asset：
Monetary fund 1,068,802,728.63 1,068,802,728.63
Transactional financial assets 901,681,809.34 901,681,809.34
Derivative financial assets
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Notes receivable 2,386,000.00 2,386,000.00
Account receivable 1,233,324,781.52 1,233,324,781.52
Financing of receivables 560,214,105.19 560,214,105.19
Prepayments 435,233,928.27 435,233,928.27
Other account receivable 52,338,992.66 52,338,992.66
Including：Interest receivable
Dividend receivable 43,605,292.60 43,605,292.60
Inventories 1,504,591,192.03 1,504,591,192.03
Contract assets 298,440,051.27 298,440,051.27
Assets held for sales
Non-current asset due within 1
year
Other current asset
Total of current assets 6,057,013,588.91 6,057,013,588.91
Non-current assets：
Creditor's rights investment
Other Creditor's rights
investment
Long-term receivable
Long term share equity
925,188,454.39 925,188,454.39
investment
Other equity instruments
4,056,378,073.52 4,056,378,073.52
investment
Other non-current financial assets 18,227,489.14 18,227,489.14
Property investment
Fixed assets 353,788,891.57 353,788,891.57
Construction in progress 495,409,362.19 495,409,362.19
Production physical assets
Oil & gas assets
Use right assets 3,820,963.53 3,820,963.53
Intangible assets 163,116,618.58 163,116,618.58
Development expenses
Goodwill
Long-germ expenses to be
amortized
Deferred income tax asset 355,670,069.60 355,670,069.60
Other non-current asset
Total of non-current assets 6,367,778,958.99 6,371,599,922.52 3,820,963.53
Total of assets 12,424,792,547.90 12,428,613,511.43 3,820,963.53
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Current liabilities
Short-term loans 150,136,986.30 150,136,986.30
Transactional financial liabilities
Derivative financial liabilities
Notes payable 6,955,000.00 6,955,000.00
Account payable 820,258,129.08 820,258,129.08
Advance receipts
Contract Liabilities 2,077,614,427.93 2,077,614,427.93
Employees’ wage payable 67,025,966.88 67,025,966.88
Tax payable 240,368,823.36 240,368,823.36
Other account payable 56,602,697.52 56,602,697.52
Including：Interest payable
Dividend payable
Liabilities held for sales
Non-current liability due within 1
1,865,646.50 1,865,646.50
year
Other current liability 267,804,499.76 267,804,499.76
Total of current liability 3,686,766,530.83 3,688,632,177.33 1,865,646.50
Non-current liabilities：
Long-term loan
Bond payable
Including：preferred stock
Sustainable debt
Lease liability 1,955,317.03 1,955,317.03
Long-term payable 247,309,261.46 247,309,261.46
Long-term remuneration payable
to staff
Expected liabilities
Deferred income 489,002,470.74 489,002,470.74
Deferred income tax liability 550,540,278.99 550,540,278.99
Other non-current liabilities
Total non-current liabilities 1,286,852,011.19 1,288,807,328.22 1,955,317.03
Total of liability 4,973,618,542.02 4,977,439,505.55 3,820,963.53
Owners’ equity
Share capital 754,010,400.00 754,010,400.00
147
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Other equity instruments
Including：preferred stock
Sustainable debt
Capital reserves 138,953,250.09 138,953,250.09
Less：Shares in stock 144,078,948.09 144,078,948.09
Other comprehensive income 3,115,610,428.47 3,115,610,428.47
Special reserve 6,000,000.00 6,000,000.00
Surplus reserves 602,356,402.65 602,356,402.65
Retained profit 2,978,322,472.76 2,978,322,472.76
Total of owners’ equity 7,451,174,005.88 7,451,174,005.88
Total of liabilities and owners’
12,424,792,547.90 12,428,613,511.43 3,820,963.53
equity
（4）Retrospective Restatement of Previous Comparative Data due to the First Execution of any New Standards
Governing Financial Instruments or Leases from year 2021
□ Applicable √ Not applicable
45.Other
VI. Taxation
1. Main categories and rates of taxes
Category of taxes Tax base Tax rate
The output tax is calculated on the basis of the income from sales of goods
and taxable services calculated according to the provisions of the tax law.
VAT 13%，9%,6%
After deducting the input tax allowed to be deducted in the current period,
the difference is the VAT payable
For those on price basis, taxes are paid at 1.2% of the balance of original
House tax value of the property after deducting of 30%; for those on rental basis, 1.2%，12%
taxes are paid at 12% of the rental.
City maintenance and
Turnover tax payable 7%，5%
construction tax
Educational surcharge Turnover tax payable 3%
Local education additional Turnover tax payable 2%
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Enterprise income tax Amount of income taxable 15%，20%，25%
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Name Income tax rate
The Company , Guoneng Company, Packaged Tech.
Company,Huayuan Company, ,Zhongneng Company ,Hangfa 15%
Company and Casting Company
Ranchuang Company, China mechanical and Electrical Institute
20%
-HSTG (Hangzhou) United Institutes Co., Ltd
Hangzhou Zhongneng Steam Turbine Power (Indonesia) Co.,
Indonesia Company. Ltd. registered in Indonesia overseas subsidiaries, the applicable
local relevant tax laws and regulations.
Other Subsidiary（Domestic） 25%
2. Preferential tax
1). According to the document “Notice for Qualification of High-tech Enterprises” (GKHZD〔2020〕No.251)
issued by Department of Science and Technology High-tech Development Center, the Company along with
Guoneng Company , Packaged Tech Company, Huayuan Company, Zhongneng Company and Hangfa. – subsidies
of the Company, were qualified as high-tech enterprises for term of three years. As the result of the re-examination
on 2021 high-tech enterprises has not yet been determined, the corporate income tax is temporarily reduced at a
15% tax rate.
2). According to the document “Notice for Qualification of High-tech Enterprises” (GKHZD〔2020〕No.32) issued
by Department of Science and Technology High-tech Development Center, the Company along with The Casting
Company – subsidies of the Company, were qualified as high-tech enterprises for term of three years. Therefore
they enjoy 15% of tax for 2021.
3).According to the Announcement on the Implementation of Preferential Income Tax Policies for Small and Micro
Enterprises and Individual Industrial and Commercial Households (No.12, 2021) issued by the Ministry of Finance
and the State Administration of Taxation, the preferential tax policies for small and low-profit enterprises was
applicable to subsidiary Ranchuang Turbine and China mechanical and Electrical Institute -HSTG (Hangzhou)
United Institutes Co., Ltd in 2021. If the annual taxable income does not exceed RMB 1 million, it would be
included in the taxable income at a reduced rate of 12.5%, and the enterprise income tax would be paid at the rate of
20%.
3.Other
VII. Notes to the Consolidated Financial Statements
1.Monetary funds
In RMB
Items End of term Beginning of term
149
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Cash in stock 65,904.06 164,696.83
Bank deposit 1,467,327,722.30 1,850,651,755.50
Other monetary fund 155,489,621.43 148,693,389.99
Total 1,622,883,247.79 1,999,509,842.32
Incl: Total of accounts saved overseas 7,989,643.89 7,598,393.25
Other note
At the end of the period, bank deposits include RMB 17,000.00 of ETC deposit with restricted use. Other
monetary funds at the end of the period include RMB 151,092,217.21 of bank acceptance bill deposit with restricted
use, RMB4,235,062.51 of guarantee deposit, RMB 5,218.32 of balance of special account for repurchasing treasury
shares with unrestricted use, and RMB 110,949.97 of interest on unrestricted deposit which can be transferred at
any time.
2. Transactional financial assets
In RMB
Items End of term Beginning of term
Classified as Financial assets measured at fair value
960,645,259.82 1,021,681,809.34
through profit or loss
Of which ：
Equity instrument investment 2,645,259.82 1,681,809.34
Financing product 958,000,000.00 1,020,000,000.00
Of which：
Total 960,645,259.82 1,021,681,809.34
Other note：
3. Derivative financial assets
In RMB
Items End of term Beginning of term
Other note:
4. Notes receivable
(1) Notes receivable listed by category
In RMB
Items End of term Beginning of term
Bank acceptance bill 179,088,740.17 96,248,020.23
Trade acceptance bill 35,958,200.92 22,347,056.44
Total 215,046,941.09 118,595,076.67
In RMB
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
End of term Beginning of term
Book balance Bad debt provision Book balance Bad debt provision
Category
Proportion( Proportion( Book value Proportion( Proportion( Book value
Amount Amount Amount Amount
%) %)
%) %)
Notes
receivabl
e for
individual
bad debt
provision
Accrual
of bad
debt 218,390,231 3,343,290. 215,046,941 124,397,376 5,802,300. 118,595,076
100.00% 1.53% 100.00% 4.66%
.88 79 .09 .92 25 .67
provision
by
portfolio
Of
which：
Bank
179,088,740 179,088,740 96,248,020. 96,248,020.
acceptanc 82.00% 77.37%
.17 .17 23 23
e
Commerc
ial 39,301,491. 3,343,290. 35,958,200. 28,149,356. 5,802,300. 22,347,056.
18.00% 8.51% 22.63% 20.61%
71 79 92 69 25 44
acceptanc
e
218,390,231 3,343,290. 215,046,941 124,397,376 5,802,300. 118,595,076
Total 100.00% 1.53% 100.00% 4.66%
.88 79 .09 .92 25 .67
Accrual of bad debt provision by single item:
In RMB
Amount in year-end
Name
Book Balance Bad debt provision Proportion(%) Reason
Accrual of bad debt provision by portfolio: 3,343,290.79
In RMB
Amount in year-end
Name
Book balance Bad debt provision Proportion(%)
Bank acceptance bill portfolio 179,088,740.17
151
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Commercial acceptance bill
39,301,491.71 3,343,290.79 8.51%
portfolio
Total 218,390,231.88 3,343,290.79 --
Note：
Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of
other receivables if the provision for bad debts of bills receivable is accrued according to the general model of
expected credit loss:
□ Applicable √ Not applicable
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision：
In RMB
Amount of change in the current period
Reversed or
Category Opening balance Closing balance
Accrual collected Write-off Other
amount
Accrual of bad debt
5,802,300.25 -2,459,009.46 3,343,290.79
provision by portfolio
Total 5,802,300.25 -2,459,009.46 3,343,290.79
Of which the significant amount of the reversed or collected part during the reporting period
□ Applicable √ Not applicable
（3）Notes receivable pledged by the company at the end of the period
In RMB
Items Amount
Bank acceptance 9,004,000.00
Total 9,004,000.00
（4）Accounts receivable financing endorsed or discounted by the Company at the end of the period and not
expired yet on the date of balance sheet
In RMB
Amount derecognized at the end of the Amount not yet derecognized at the end of
Items
period the period
Bank acceptance 38,394,865.81
Commercial acceptance 15,708,890.65
Total 38,394,865.81 15,708,890.65
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
（5）Accounts receivable financing transferred to accounts receivable by the Company at the end of the period
due to failure of the drawer to perform
In RMB
Items Amount
Commercial acceptance 800,000.00
Total 800,000.00
Other note
（6） The actual write-off accounts receivable
In RMB
Items Amount
5. Accounts receivable
(1) Accounts receivable disclosed by category
In RMB
End of term Beginning of term
Book balance Bad debt provision Book balance Bad debt provision
Category Book
Proportio Proportio value Proportio Proportio Book value
Amount Amount Amount Amount
n% n% n% n%
Accrual of bad debt
77,191,5 77,191,5 25,349,87 25,349,87
provision by single 2.53% 100.00% 0.92% 100.00%
65.71 65.71 2.89 2.89
item
Including：
Accrual of bad debt 2,979,74 981,796, 1,997,950 2,716,066 1,047,831 1,668,235,1
97.47% 32.95% 99.08% 38.58%
provision by portfolio 6,652.43 531.73 ,120.70 ,760.40 ,606.39 54.01
Including：
3,056,93 1,058,98 1,997,950 2,741,416 1,073,181 1,668,235,1
Total 100.00% 34.64% 100.00% 39.15%
8,218.14 8,097.44 ,120.70 ,633.29 ,479.28 54.01
Accrual of bad debt provision by single item：77,191,565.71
In RMB
Closing balance
Name
Book balance Bad debt provision Proportion Reason
Xinjiang Altay Jinhao Iron Industry Not expected to be
26,010,242.82 26,010,242.82 100.00%
Co., Ltd recovered
Hangzhou New Concept Energy Saving Not expected to be
11,552,855.00 11,552,855.00 100.00%
Technology Co., Ltd recovered
Dezhou Jinghua Group Zhenhua Co., Not expected to be
10,980,000.00 10,980,000.00 100.00%
Ltd. recovered
153
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Qingdao Jieneng Steam Turbine Group Not expected to be
8,993,402.75 8,993,402.75 100.00%
Co., Ltd. recovered
Qingdong Jieneng Material Trade Co., Not expected to be
6,534,000.00 6,534,000.00 100.00%
Ltd. recovered
Qingdao Jieneng Steam Turbine Co., Not expected to be
5,287,000.00 5,287,000.00 100.00%
Ltd.Hangzhou Company recovered
Not expected to be
Dabi Oleo 2,713,808.18 2,713,808.18 100.00%
recovered
Sinosteel Tiancheng Environmental
Not expected to be
Protection Science & Technology Co., 2,459,550.00 2,459,550.00 100.00%
recovered
Ltd.
Minhe Jinxing Hydropower Not expected to be
1,468,751.96 1,468,751.96 100.00%
Development Co., Ltd. recovered
Diebu Axia Hydropower Development Not expected to be
1,132,000.00 1,132,000.00 100.00%
Co., Ltd. recovered
Weifang Leinuote Power Equipment Not expected to be
59,955.00 59,955.00 100.00%
Co., Ltd. recovered
Total 77,191,565.71 77,191,565.71 -- --
Accrual of bad debt provision by portfolio:981,796,531.73
In RMB
Closing balance
Name
Book balance Bad debt provision Proportion
Within 1 year 1,093,754,417.06 54,687,720.84 5.00%
1-2 years 585,691,526.51 58,569,152.66 10.00%
2-3 years 403,114,114.74 120,934,234.43 30.00%
3-4 years 312,274,348.45 187,364,609.08 60.00%
4-5 years 123,357,154.70 98,685,723.75 80.00%
Over 5 years 461,555,090.97 461,555,090.97 100.00%
Total 2,979,746,652.43 981,796,531.73 --
Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of
other receivables if the provision for bad debts of bills receivable is accrued according to the general model of
expected credit loss:
□ Applicable √ Not applicable
Disclosure by aging
In RMB
Aging Closing balance
Within 1 year（Including 1 year） 1,094,411,836.46
1-2 years 591,468,265.29
2-3 years 406,634,114.74
154
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Over 3 years 964,424,001.65
3-4 years 319,950,651.20
4-5 years 126,697,154.72
Over 5 years 517,776,195.73
Total 3,056,938,218.14
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision：
In RMB
Amount of change in the current period
Reversed or
Category Opening balance Closing balance
Accrual collected Write-off Other
amount
Accrual of bad debt
25,349,872.89 12,339,597.41 39,502,095.41 77,191,565.71
provision by single item
Accrual of bad debt
1,047,831,606.39 1,585,383.65 25,976,849.16 -41,643,609.15 981,796,531.73
provision by portfolio
Total 1,073,181,479.28 13,924,981.06 25,976,849.16 -2,141,513.74 1,058,988,097.44
Of which the significant amount of the reversed or collected part during the reporting period
In RMB
Name Amount Way
(3) The actual write-off accounts receivable
In RMB
Items Amount
Accrual of bad debt provision by portfolio 25,976,849.16
The significant actual write-off accounts receivable for the current period
In RMB
Nature of Arising from
Amount written Reason for
Name account Verification procedures related transactions
off written off
receivable (Y/N)
Beijing Lixin Jingtong Industrial Equipment Review by the Board of
Uncollectible
Goods 11,782,235.99 No
Co., Ltd directors
amount
Zhejiang Shengxin Energy Technology Review by the Board of
Uncollectible
Goods 2,630,000.00 No
Development Co., Ltd. directors
amount
Xian Shangu Power Co., Ltd. Goods 2,254,252.29 Uncollectible Review by the Board of No
155
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
amount directors
Zhejiang Taihe Textile Printing & dyeing Review by the Board of
Uncollectible
Goods 1,565,000.00 No
Clothing Co., Ltd. directors
amount
Guizhou Dejiang Baishuiquan Power Review by the Board of
Uncollectible
Goods 910,000.00 No
Generation Co., Ltd. directors
amount
Review by the Board of
Uncollectible
Jiangzi Huahui Industrial Co., Ltd. Goods 793,000.00 No
amount directors
Review by the Board of
Uncollectible
Lake Whitman Power Station, USA Goods 636,737.82 No
amount directors
Anhui Qianshan Jiujinggang Hydropower Review by the Board of
Uncollectible
Goods 630,000.00 No
Co., Ltd. directors
amount
Chongqing Kaixian Donglihe Hydropower Review by the Board of
Uncollectible
Goods 597,500.00 No
Co., Ltd. directors
amount
Shenyang Water Pump Petrochemical Pump Review by the Board of
Uncollectible
Goods 561,565.71 No
Co.,Ltd. directors
amount
Shanxi Guihua Dianhe Hydropower Review by the Board of
Uncollectible
Goods 531,600.00 No
Development Co., Ltd. directors
amount
Review by the Board of
Uncollectible
Guizhou Tianshengqiao Power station Goods 516,000.00 No
amount directors
Review by the Board of
Uncollectible
Gansu Diebukaba Banjiu Power station Goods 481,552.00 No
amount directors
Hubei Nanyin Scientific Research Review by the Board of
Uncollectible
Achievement Application and Material Trade Goods 400,500.00 No
Co., Ltd. amount directors
Yunnan Xingneng Natural Resources Review by the Board of
Uncollectible
Goods 210,650.00 No
Development Co., Ltd directors
amount
Guizhou Chishui Matan Guanyinyan Power Review by the Board of
Uncollectible
Goods 195,132.00 No
station directors
amount
156
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Hubei Zhuxi Hou River Basin Hydropower Review by the Board of
Uncollectible
Goods 160,000.00 No
Development Co., Ltd. director
amount
Sichuan Leshan City Jinkou River District Review by the Board of
Uncollectible
Goods 149,930.00 No
Shunshuihe Electric Power Company directors
amount
Review by the Board of
Uncollectible
Handan Bridge Cement Co., Ltd Goods 149,578.00 No
amount directors
Yunnan Honghe County Wenyuan Electric Review by the Board of
Uncollectible
Goods 119,000.00 No
Power Development Co., Ltd. directors
amount
Review by the Board of
Uncollectible
Other Goods 702,615.35 No
amount directors
Total -- 25,976,849.16 -- -- --
（4）The ending balance of account receivables owed by the imputation of the top five parties
In RMB
Name Amount Proportion(%) Bad debt provision
Client 1 885,087,885.25 28.95% 270,850,091.30
Client 2 210,363,970.49 6.88% 101,004,124.10
Client 3 207,077,063.35 6.77% 21,578,527.10
Client 4 58,494,080.87 1.91% 33,628,361.74
Client 5 56,450,682.40 1.85% 2,822,534.12
Total 1,417,473,682.36 46.36%
（5）Account receivable which terminate the recognition owning to the transfer of the financial assets
Other note：
(6)The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts
receivable
6. Financing of receivables
In RMB
Items End of term Beginning of term
Bank acceptance 816,653,211.21 823,598,830.55
Total 816,653,211.21 823,598,830.55
Changes in the current period of receivables financing and fair value
157
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
□ Applicable √ Not applicable
Relevant information of the financing provision for bad debts will be disclosed with reference to the disclosure
method of other receivables if the provision for bad debts of bills receivable is accrued according to the general
model of expected credit loss:
□ Applicable √ Not applicable
Other note：
(1) Notes receivable pledged by the Company at the end of the period.
In RMB
Items Pledged amount
Bank acceptance 89,200,929.14
Total 89,200,929.14
(2) Notes receivable which had endorsed by the Company or had discounted and had not due on the balance sheet
date at the period-end
In RMB
Items Amount of recognition termination at the period-end
Bank acceptance 659,394,548.94
Total 659,394,548.94
The acceptor of the bank acceptance bill is a commercial bank, because the commercial bank has high credit,
the possibility of the bank acceptance bill not being paid at maturity is low, so the company has endorsed or
discounted the bank acceptance bill to terminate the confirmation. However, if the bill is not paid at maturity, the
company shall remain jointly and severally liable to the holder under the provisions of the bill act.
7. Prepayments
（1）Age analysis
In RMB
End of term Beginning of term
Age
Book balance Proportion(%) Book balance Proportion(%)
Within 1 year 402,228,171.12 90.64% 519,861,557.80 87.55%
1-2 years 16,849,046.80 3.80% 48,123,838.50 8.10%
2-3 years 3,119,651.33 0.70% 17,342,607.96 2.92%
Over 3 years 21,573,565.66 4.86% 8,480,153.54 1.43%
Total 443,770,434.91 -- 593,808,157.80 --
Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time
(2) Top 5 of the closing balance of the prepayment collected according to the prepayment target
158
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
In RMB
Name Amount Proportion(%)
Siemens Industrial Turbomachinery AB 138,379,502.10 31.18
Hangzhou Boiler Group 31,750,000.00 7.15
FORMOSA ELECTRIC POWER SYSTEM CO.,LIMITED 25,626,244.81 5.77
Mitsubishi Hitachi Electric Gas Engine Service (Nanjing) Co., Ltd 22,059,560.89 4.97
Kailuowen thermal Power technology (Jiangsu) Co., Ltd. 19,828,627.00 4.47
Subtotal 237,643,934.80 53.54
Other note：
8. Other account receivable
In RMB
Nature Closing balance Opening balance
Dividend receivable 43,605,292.60
Other 44,163,396.56 26,722,341.24
Total 44,163,396.56 70,327,633.84
（1）Interest receivable
1）Classification of interest receivable
In RMB
Nature Closing balance Opening balance
2）Significant overdue interest
In RMB
Whether or not the
Unit Closing balance Time Reason impairment and the basis
for its determination
Other note：
3）Bad-debt provision
□ Applicable √ Not applicable
（2）Dividend receivable
2）Dividend receivable
In RMB
Items End of term Beginning of term
Hangzhou Bank 0.00 43,605,292.60
Total 43,605,292.60
159
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
2) Significant dividend receivable aged over 1 year
In RMB
Whether occurred
Closing
Items Aging Reason impairment and its
balance
judgment basis
3）Bad-debt provision
□ Applicable √ Not applicable
Other note：
（3） Other accounts receivable
1) Other accounts receivable classified by the nature of accounts
In RMB
Nature Closing book balance Opening book balance
Accrual of bad debt provision by single
term
Accrual of bad debt provision by portfolio: 60,464,968.77 44,872,571.32
Total 60,464,968.77 44,872,571.32
2）Bad-debt provision
In RMB
Stage 1 Stage 2 Stage 3
Expected credit Expected credit losses for
Bad Debt Reserves Expected credit loss over Total
losses over the next the entire duration (credit
life (no credit impairment)
12 months impairment occurred)
Balance as at January 1,
1,123,049.39 420,476.34 16,606,704.35 18,150,230.08
2021
Balance as at January 1,
—— —— —— ——
2021 in current
——Transfer to stage II -481,657.16 481,657.16
——Transfer to stage III -161,496.39 161,496.39
Provision in the current
1,153,170.62 222,177.20 -3,109,463.36 -1,734,115.54
period
Write - off in the current
116,441.00 116,441.00
period
Other 1,398.67 500.00 1,898.67
Balance as at December
1,795,961.52 963,314.31 13,542,296.38 16,301,572.21
31, 2021
Loss provision changes in current period, change in book balance with significant amount
160
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
□Applicable √ Not applicable
Disclosure by aging
In RMB
Aging Closing balance
Within 1 year(Including 1 year） 35,919,230.42
1-2 years 9,633,143.01
2-3 years 1,614,963.87
Over 3 years 13,297,631.47
3-4 years 351,902.88
4-5 years 495,315.49
Over 5 years 12,450,413.10
Total 60,464,968.77
3) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision：
In RMB
Amount of change in the current period
Opening
Category Reversed or Closing balance
balance Accrual
collected amount
Write-off Other
Accrual of bad
debt provision by 18,150,230.08 -1,734,115.54 116,441.00 1,898.67 16,301,572.21
portfolio:
Total 18,150,230.08 -1,734,115.54 116,441.00 1,898.67 16,301,572.21
Where the current bad debts back or recover significant amounts：
In RMB
Name Amount Way
4) The actual write-off accounts receivable
In RMB
Items Amount
Accrual of bad debt provision by portfolio: 116,441.00
The significant actual write-off other accounts receivable for the current period
In RMB
Nature of account Reason for written Arising from related
Name Amount written off Verification procedures
receivable off transactions (Y/N)
Zhuzhou High-tech Uncollectible Review by the Board of
Deposit 100,000.00 No
Thermal amount
161
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Power Construction Directors
Co.,Ltd.
Uncollectible Review by the Board of
Other Deposit 16,441.00 No
amount Directors
Total -- 116,441.00 -- -- --
Other note：
5) Top 5 of the closing balance of the other accounts receivable collated according to the arrears party
In RMB
Proportion of the total
Closing balance of
Name Nature Closing balance Aging year end balance of the
bad debt provision
accounts receivable
Within 1
Shanghai Customs Deposit 21,381,672.32 35.36% 1,069,083.62
year
Shanghai Customs Waigaoqiao Office Deposit 3,710,320.94 Over 5 years 6.14% 3,710,320.94
Hangzhou Chisu Trade Co., Ltd. Deposit 2,848,700.00 1-2 years 4.71% 284,870.00
Temporary
Wuhan Huazhong Automatic Control
payment 2,331,000.00 Over 5 years 3.86% 2,331,000.00
Technology Development Co., Ltd
receivable
Fuding Guanyangxi River Basin Within 1
Deposit 2,300,000.00 3.80% 115,000.00
Diversion Investment Co., Ltd. year
Total -- 32,571,693.26 -- 53.87% 7,510,274.56
6) Accounts receivable involved with government subsidies
7) Other account receivable which terminate the recognition owning to the transfer of the financial assets
8) The amount of the assets and liabilities formed by the transfer and the continues involvement of other accounts
receivable
Other note：
9. Inventories
Whether the company need to comply with the disclosure requirements of the real estate industry
No
（1）Category of Inventory
In RMB
Closing book balance Opening book balance
Items Provision for Provision for
Book balance inventory Book value Book balance inventory Book value
impairment impairment
162
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Raw materials 1,292,125,192.43 107,518,112.95 1,184,607,079.48 563,669,207.73 126,037,190.21 437,632,017.52
Goods in progress 871,173,637.50 62,010,483.80 809,163,153.70 948,587,668.24 109,394,872.84 839,192,795.40
Stock goods 1,189,125,044.23 141,251,530.06 1,047,873,514.17 1,179,185,615.69 149,436,233.38 1,029,749,382.31
Total 3,352,423,874.16 310,780,126.81 3,041,643,747.35 2,691,442,491.66 384,868,296.43 2,306,574,195.23
(2) Falling price reserves of inventory
In RMB
Increased amount Decreased amount
Items Opening balance Reverse or Reverse or Closing balance
Withdrawal Other
write-off write-off
Raw materials 126,037,190.20 5,953,029.37 24,472,106.62 107,518,112.95
Goods in progress 109,394,872.84 2,821,417.36 50,205,806.40 62,010,483.80
Stock goods 149,436,233.39 17,729,781.12 25,914,484.45 141,251,530.06
Total 384,868,296.43 26,504,227.85 100,592,397.47 310,780,126.81
The specific basis for determining the net realizable value, and the reasons for reversing or reselling the inventory
depreciation reserve in the current period
Items Current write-off Reason for provision
Specific basis for determining net realizable value
for inventory
The net realizable value shall be recognized by the amount of the
Raw materials estimated selling prices minus the estimated selling costs and relevant Used for current production and use
taxes and dues and sales realization
The net realizable value shall be recognized by the amount of the
estimated selling prices minus the estimated selling costs and relevant
Goods in process
taxes and dues, wherein regarding suspended projects expected not be to
and commodity Current realized sales
be recovered or projects whose sales agreements are released, the net
stocks
realizable value shall be recognized by the expected recoverable
compensation
(3) Notes of the closing balance of the inventory which includes capitalized borrowing expenses
(4) Completed unsettled assets formed from the construction contact at the period-end
10.Contact assets
In RMB
Year-end balance Year-beginning balance
Items
Bad debt Bad debt
Book balance Book value Book balance Book value
provision provision
Quality guarantee 564,548,403.36 53,513,171.70 511,035,231.66 559,480,659.70 60,733,149.70 498,747,510.00
163
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
The construction contract
79,560,175.93 7,568,757.60 71,991,418.33 44,503,655.62 7,370,255.11 37,133,400.51
forms the assets
Total 644,108,579.29 61,081,929.30 583,026,649.99 603,984,315.32 68,103,404.81 535,880,910.51
Amount and reason of material change of book value of contract assets in the current period
In RMB
Items Amount Reason
Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of
other receivables if the provision for bad debts of contract assets is accrued according to the general model of
expected credit loss:
□ Applicable √Not applicable
Provision for impairment of contract assets in the current period
In RMB
Reversal/write-off in
Items Current accrual Change amount Reason
current period
Accrual by single item 462,838.60
Accrual by portfolio -7,484,314.11 Accrual by aging
Total -7,021,475.51 --
Other note：
1) Contract assets with single provision for impairment at the end of the period
Unit name Book balance Impairment Accrual proportion Reasons for accrual
provision (%)
Qingdao Jieneng Steam 462,838.60 462,838.60 100.00 Uncollectible amount
Turbine Group Co., Ltd.
Subtotal 462,838.60 462,838.60 100.00
2) Contract assets with impairment provision in combination
Items End of term
Book balance Impairment provision Accrual proportion (%)
Aging portfolio 643,645,740.69 60,619,090.70 9.42
Subtotal 643,645,740.69 60,619,090.70 9.42
11. Assets divided as held-to-sold
In RMB
Book balance at
Impairment Closing book Estimated Estimated
Items the end of the fair value
provision value disposal cost disposal time
period
164
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
12. Non-current assets due within 1 year
In RMB
Items Closing balance Opening balance
Important creditor's rights Investment/other creditor's rights investment
In RMB
Closing balance Opening balance
Contract Contract
Creditor's rights item Expiration Expiration
Face value interest rate, Actual rate Face value interest rate, Actual rate
date date
stated rate stated rate
Other note:
13. Other current assets
In RMB
Items End of term Beginning of term
Input tax deductible 34,506,442.84 40,681,312.91
Prepaid income tax 30,524,440.80 6,967,102.56
Rent charge 1,144,067.78 1,553,552.62
Treasury bonds 814,851.80
Total 66,174,951.42 50,016,819.89
Other note：
14.Creditor's right investment
In RMB
Year-end balance Year-beginning balance
Items Bad debt Bad debt
Book balance Book value Book balance Book value
provision provision
Important creditor's rights Investment/
In RMB
Closing balance Opening balance
Contract Contract
Items Expiration Expiration
Face value interest rate, Actual rate Face value interest rate, Actual rate
date date
stated rate stated rate
Provision for bad debts
In RMB
Stage 1 Stage 2 Stage 3
Bad Debt Reserves Total
Expected credit Expected credit loss over Expected credit losses for
165
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
losses over the next life (no credit impairment) the entire duration (credit
12 months impairment occurred)
Balance as at January 1,
—— —— —— ——
2021 in current period
Loss provision changes in current period, change in book balance with significant amount
□ Applicable √ Not applicable
Other note：
15.Other creditor's rights investment
In RMB
Cumulative Remark
provision for
Change in
Change in losses
Opening Accrued fair value in Closing
Items Costs cumulative recognized in
balance interest the current balance
fair value other
period
consolidated
income
Important creditor's rights Investment/
In RMB
Closing balance Opening balance
Contract Contract
Items Expiration Expiration
Face value interest rate, Actual rate Face value interest rate, Actual rate
date date
stated rate stated rate
Provision for bad debts
In RMB
Stage 1 Stage 2 Stage 3
Expected credit Expected credit losses for
Bad Debt Reserves Expected credit loss over Total
losses over the next the entire duration (credit
life (no credit impairment)
12 months impairment occurred)
Balance as at January 1,
—— —— —— ——
2021 in current period
Loss provision changes in current period, change in book balance with significant amount
□ Applicable √ Not applicable
166
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Other note:
16. Long-term accounts receivable
(1) List of long-term accounts receivable
In RMB
Closing balance Opening balance
Provision for Provision for Discount rate
Items
Book balance inventory Book value Book balance inventory Book value interval
impairment impairment
Project item 205,022,203.37 51,281,110.17 153,741,093.20 319,022,203.37 76,781,110.17 242,241,093.20
Total 205,022,203.37 51,281,110.17 153,741,093.20 319,022,203.37 76,781,110.17 242,241,093.20 --
Provision for bad debts
In RMB
Stage 1 Stage 2 Stage 3
Expected credit Expected credit losses for
Bad Debt Reserves Expected credit loss over Total
losses over the next the entire duration (credit
life (no credit impairment)
12 months impairment occurred)
Balance as at January 1,
—— —— —— ——
2021 in current period
Loss provision changes in current period, change in book balance with significant amount
□ Applicable √ Not applicable
(2) Long-term accounts receivable which terminate the recognition owning to the transfer of the financial assets
(3) The amount of the assets and liabilities formed by the transfer and the continues involvement of long-term
accounts receivable
Other note
Changes in bad debt reserves
In RMB
Increased amount Decreased amount
Items Opening balance Closing balance
Withdraw recover Other他 Switch back write-off Other
Accrual by single item 66,360,000.00 21,600,000.00 44,760,000.00
Accrual by portfolio 10,421,110.17 -3,900,000.00 6,521,110.17
Total 76,781,110.17 -3,900,000.00 21,600,000.00 51,281,110.17
167
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
17. Long-term equity investment
In RMB
Increase /decrease
Closing
Profits
and losses Cash Withdraw Closin balance
Opening on Other g of
Addition Decrease Change bonus or al of
Investees investmen
balance al in comprehensi s in balanc impairme
ts profits impairme Other
investme investme ve other
nt Recognize equity announce nt e nt
nt income
d under
the equity d to issue provision provision
method
I. Joint venture
2. Affiliated Company
Zhejiang
Zhongrun
Gas
11,899,308. -11,899,308.
turbine 0.00
84 84
technolog
y Co.,
Ltd
11,899,308. -11,899,308.
Subtotal 0.00
84 84
11,899,308. -11,899,308.
Total 0.00
84 84
Other note
[Note] Other decreases are caused by the merger of the subsidiary, Turbine Company and Zhongrun Company
not under the same control. For details, please refer to Note VI (I) to this Financial Statement.
18. Other equity instruments investment
In RMB
Items End of term Beginning of term
Hangzhou Bank 3,485,440,140.92 4,056,378,073.52
Total 3,485,440,140.92 4,056,378,073.52
Itemized disclosure of the current non - trading equity instrument investment
In RMB
Amount of other Reasons for other
Reasons for being measured at fair
Recognized comprehensive comprehensive
Accumulating Accumulating value and whose changes are
Name dividend income transferred income transferred
profit profit included in other comprehensive
income to retained to retained
income
earnings earnings
168
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
The stocks of Hangzhou Bank Co.,
Ltd. held by the company cannot
pass the contract cash flow
characteristic test, but the company
Hangzhou does not hold the equity instrument
95,156,322.10
Bank for the purpose of trading, so it is
designated as a financial asset
measured at fair value and its
changes are included in other
comprehensive income.
Other note：
19.Other non-current Financing assets
In RMB
Items End of term Beginning of term
Classified as financial assets measured by f
air value and whose changes are included i 14,792,533.96 16,046,102.59
n the current profit and loss
Total 14,792,533.96 16,046,102.59
Other note: The project is invested in equity instruments
Detail
In RMB
Increase /decrease
Change in fair
Investees Opening balance Additional Decrease in Other comprehensive
value gains and
investment investment adjustment to revenue
losses
Actions Xinxing No.9 Private Equity 10,224,976.32 -1,104,976.32
Fund
Greenesol power systems PVT Ltd. 5,534,773.22
Zhejiang Sanxin Automation 148,592.31 148,592.31
Engineering Co., Ltd
Heilongjiang Multi-Power Hydropower 137,760.74
Development United Company
Total 16,046,102.59 148,592.31 -1,104,976.32
(Continued)
Investees Increase /decrease Closing
Declaration of Withdrawn balance of
Other equity Closing balance
cash dividends impairment Other impairment
changes
or profit provision provision
Actions Xinxing No.9 Private 9,120,000.00
169
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Equity Fund
Greenesol power systems PVT Ltd. 5,534,773.22
Zhejiang Sanxin Automation
Engineering Co., Ltd
Heilongjiang Multi-Power 137,760.74
Hydropower Development United
Company
Total 14,792,533.96
20. Investment real estate
(1) Investment real estate adopted the cost measurement mode
√Applicable □ Not applicable
In RMB
Construction in
Items House, Building Land use right Total
process
I. Original price
1. Balance at period-beginning 12,560,552.55 12,560,552.55
2.Increase in the current period
(1) Purchase
（2）Inventory \ fixed assets \ project under
construction transfer
(3)Increased of Enterprise Combination
3.Decreased amount of the period 2,391,552.00 2,391,552.00
（1）Dispose 2,391,552.00 2,391,552.00
（2）Other out
4. Balance at period-end 10,169,000.55 10,169,000.55
II.Accumulated amortization
1.Opening balance 4,611,143.69 4,611,143.69
2.Increased amount of the period 490,542.46 490,542.46
(1) Withdrawal 490,542.46 490,542.46
3.Decreased amount of the period 1,836,671.67 1,836,671.67
（1）Dispose 1,836,671.67 1,836,671.67
（2）Other out
170
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
4. Balance at period-end 3,265,014.48 3,265,014.48
III. Impairment provision
1. Balance at period-beginning
2.Increased amount of the period
(1) Withdrawal
3.Decreased amount of the period
（1）Dispose
（2）Other out
4. Balance at period-end
IV. Book value
1.Book value at period -end 6,903,986.07 6,903,986.07
2.Book value at period-beginning 7,949,408.86 7,949,408.86
(2) Investment property adopted fair value measurement mode
□Applicable√ Not applicable
(3) Investment real estate without certificate of ownership
In RMB
Items Book balance Reason
Other note
At the end of the this period, the book value of the investment real estate was RMB 6,889,998.71, which was due to
the housing reform to resettlement house: that is, when the family dormitory area of the subsidiary Hangfa Company
was demolished and renovated in 2011, part of the resettlement area could not be renovated because some residents
had received housing subsidies, enjoyed affordable housing, participated in the housing reform in other places,
failed to submit the housing reform information in time, etc., and the property rights belonged to the Company.
21. Fixed assets
In RMB
Items Year-end balance Year-beginning balance
Fixed assets 1,658,423,191.83 1,309,749,127.82
Total 1,658,423,191.83 1,309,749,127.82
(1) List of fixed assets
In RMB
171
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Houses & Machinery
Items Transportations Other equipment Total
buildings equipment
I. Original price
1.Opening balance 1,335,129,117.75 918,077,111.39 38,009,629.00 57,832,623.23 2,349,048,481.37
2.Increased amount of the period 119,092,341.01 291,589,025.45 2,646,939.15 94,702,813.97 508,031,119.58
(1) Purchase 808,103.68 10,684,596.91 1,997,116.14 1,968,960.88 15,458,777.61
(2) Transferred from construction in progress 118,284,237.33 273,488,338.87 649,823.01 92,554,758.28 484,977,157.49
(3)Increased of Enterprise Combination 7,416,089.67 179,094.81 7,595,184.48
3.Decreased amount of the period 181,399,807.73 24,382,099.09 5,025,973.36 10,153,797.40 220,961,677.58
（1）Disposal 23,826,182.60 5,025,973.36 9,839,697.40 38,691,853.36
(2) Relocation transfer 181,399,807.73 555,916.49 314,100.00 182,269,824.22
4. Balance at period-end 1,272,821,651.03 1,185,284,037.75 35,630,594.79 142,381,639.80 2,636,117,923.37
II. Accumulated depreciation
1.Opening balance 262,660,487.12 701,844,361.39 28,651,455.37 41,298,556.65 1,034,454,860.53
2.Increased amount of the period 42,426,825.30 56,382,566.12 2,201,655.50 4,519,648.05 105,530,694.97
(1) Withdrawal 42,426,825.30 54,780,486.58 2,201,655.50 4,361,745.49 103,770,712.87
（2) Increased of Enterprise Combination 1,602,079.54 157,902.56 1,759,982.10
3.Decreased amount of the period 138,092,408.51 23,215,345.12 4,570,172.92 8,677,233.77 174,555,160.32
（1）Disposal 22,690,628.33 4,570,172.92 8,363,588.77 35,624,390.02
(2) Relocation transfer 138,092,408.51 524,716.79 313,645.00 138,930,770.30
4.Closing balance 166,994,903.91 735,011,582.39 26,282,937.95 37,140,970.93 965,430,395.18
III. Impairment provision
1.Opening balance 1,504,928.24 3,263,331.46 76,233.32 4,844,493.02
2.Increase in the reporting period 9,028,267.09 9,028,267.09
（1）Withdrawal 9,028,267.09 9,028,267.09
3.Decreased amount of the period 1,504,928.24 27,977.35 75,518.16 1,608,423.75
（1）Disposal 27,977.35 75,518.16 103,495.51
(2) Relocation transfer 1,504,928.24 1,504,928.24
4. Closing balance 9,028,267.09 3,235,354.11 715.16 12,264,336.36
IV. Book value
1.Book value of the period-end 1,096,798,480.03 447,037,101.25 9,347,656.84 105,239,953.71 1,658,423,191.83
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2.Book value of the period-begin 1,070,963,702.39 212,969,418.54 9,358,173.63 16,457,833.26 1,309,749,127.82
(2) Fixed assets temporarily idled
In RMB
Accumulated Impairment
Items Original price Book value Remark
depreciation provision
⑶Fixed assets leased out through operating leases
In RMB
Items Book value
（4）Details of fixed assets failed to accomplish certification of property
In RMB
Items Book value Reason
Steam turbine power Building 201,448,624.87 In process
Steam Turbine Heavy Industry Plant In process
150,581,200.81
-Complete sets of factory
Steam Turbine Heavy Industry Plant In process
117,017,848.35
-Jingzi Large Workshop
Steam Turbine Heavy Industry Plant In process
95,081,797.43
-Rotor workshop
Steam Turbine Heavy Industry Plant In process
-Small and Medium Welding Heat 83,047,912.61
Treatment Workshop
Steam Turbine Heavy Industry Plant In process
44,391,450.62
-Complete Plant
Steam Turbine Heavy Industry Plant In process
41,406,815.15
-Distribution Centre
Steam Turbine Heavy Industry Plant In process
21,992,468.99
-Canteen and Staff Activity Centre
Steam Turbine Heavy Industry Plant -Joint In process
11,858,169.35
station
Other 9,785,145.47 In process
Institute Yaju community 4,995,566.79 In process
Industry and trade production complex In process
29,771,971.18
building
Subtotal 811,378,971.62
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Other note
（5）Liquidation of fixed assets
In RMB
Items End of term Beginning of term
Other note
22. Construction in progress
In RMB
Items End of term Beginning of term
Construction in progress 517,835,956.11 805,277,593.08
Total 517,835,956.11 805,277,593.08
(1) List of construction in progress
In RMB
End of term Beginning of term
Items Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
New Plant project 493,629,477.17 493,629,477.17 784,750,054.12 784,750,054.12
Software project 11,327,261.17 11,327,261.17 2,995,615.18 2,995,615.18
Other project 9,356,085.45 9,356,085.45 14,176,924.67 14,176,924.67
Prepayment for
equipment or 3,523,132.32 3,523,132.32 3,354,999.11 3,354,999.11
projects
Total 517,835,956.11 517,835,956.11 805,277,593.08 805,277,593.08
(2)Changes of significant construction in progress
In RMB
Includin Capita
g liz
Sourc
Budge g: ation
Transferred Capitaliz e
Name of (RMB Opening Other End Proportio Project capitaliz of
Increase to fixed ation of of
project '0,000) balance decrease balance n% process ation of interes
assets interest fundi
interest t
ng
this rate
period (%)
New 173,328 784,750,05 184,947,41 476,067,99 493,629,47 Under 9,819,48 849,085
95.75% 1.20% Other
.76 4.12 7.69 4.64 7.17 construct 2.47 .13
Plant
174
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
ion
project
Softwar 2,995,615. 10,897,787 2,566,14 11,327,261
Other
18 .56 1.57 .17
e project
Other 14,176,924 2,541,122. 7,361,961. 9,356,085.
Other
project .67 41 63 45
Prepaym
ent for
3,354,999. 1,715,334. 1,547,201. 3,523,132.
equipme Other
11 43 22 32
nt or
projects
173,328 805,277,59 200,101,66 484,977,15 2,566,14 517,835,95 9,819,48 849,085
Total -- -- --
.76 3.08 2.09 7.49 1.57 6.11 2.47 .13
(3) List of the withdrawal of the impairment provision of the construction in progress
In RMB
Items Amount Reason
Other note
（4）Engineering material
In RMB
Year-end balance Year-beginning balance
Items Book balance Provision for Book value Book balance Provision for Book value
devaluation devaluation
Other note
23. Productive biological assets
(1) Productive biological assets measured at cost methods
□ Applicable √ Not applicable
(2) Productive biological assets measured at fair value
□ Applicable √ Not applicable
24. Oil and gas assets
□ Applicable √ Not applicable
25. Right to use assets
In RMB
Items House and Building Total
1. Balance at period-beginning 28,461,441.04 28,461,441.04
2.Increase in the current period 9,646,511.69 9,646,511.69
（1）Rent 8,981,466.14 8,981,466.14
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
（2）Increased of Enterprise Combination 665,045.55 665,045.55
4. Balance at period-end 38,107,952.73 38,107,952.73
2.Increased amount of the period 7,670,173.81 7,670,173.81
(1) Withdrawal 7,670,173.81 7,670,173.81
4. Closing balance 7,670,173.81 7,670,173.81
1.Book value of the period-end 30,437,778.92 30,437,778.92
2.Book value of the period-begin 28,461,441.04 28,461,441.04
Other note
26. Intangible assets
(1) Information
In RMB
Non patent
Items Land using right Patent Software Total
technology
I. Original price
1. Balance at
383,365,712.33 309,433.96 14,820,918.92 398,496,065.21
period-beginning
2.Increase in the current
34,653.47 8,000,000.00 2,968,344.66 11,002,998.13
period
(1) Purchase 34,653.47 2,968,344.66 3,002,998.13
(2)Internal Development
(3)Increased of
8,000,000.00 8,000,000.00
Enterprise Combination
3.Decreased amount of
59,022,553.08 59,022,553.08
the period
（1）Disposal
（2）Relocation transfer 59,022,553.08 59,022,553.08
4.Closing balance 324,343,159.25 344,087.43 8,000,000.00 17,789,263.58 350,476,510.26
II.Accumulated
amortization
1.Opening balance 78,416,867.99 269,390.78 3,884,713.89 82,570,972.66
2.Increased amount of
6,897,970.71 6,829.16 5,266,666.91 2,777,851.31 14,949,318.09
the period
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(1) Withdrawal 6,897,970.71 6,829.16 800,000.04 2,777,851.31 10,482,651.22
（2）Increased of
4,466,666.87 4,466,666.87
Enterprise Combination
3.Decreased amount of
24,513,487.73 24,513,487.73
the period
（1）Disposal
（2）Relocation
24,513,487.73 24,513,487.73
transfer
4.Closing balance 60,801,350.97 276,219.94 5,266,666.91 6,662,565.20 73,006,803.02
III. Impairment
provision
1.Opening balance
2.Increased amount of
the period
(1) Withdrawal
3.Decreased amount of
the period
（1）Disposal
4.Closing balance
IV. Book value
1.Closing book value 263,541,808.28 67,867.49 2,733,333.09 11,126,698.38 277,469,707.24
2.Opening book value 304,948,844.34 40,043.18 10,936,205.03 315,925,092.55
The proportion the intangible assets formed from the internal R&D through the Company amount the balance of
the intangible assets at the period-end.
(2) Details of fixed assets failed to accomplish certification of land use right
In RMB
Items Book value Reason
Other note：
27. .Development expenses
In RMB
177
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Increase in this period Decrease in this period
Balance in Internal Recognized Transfer to Balance in
Items
year-begin development Other as intangible current profit year-end
expenditure assets and loss
Total
Other note
28. Goodwill
(1) Original book value of goodwill
In RMB
Name of the Increase Decrease
investees or the
Opening balance The merger of Closing balance
events formed disposition
enterprises
goodwill
Total
（2）Impairment of goodwill
In RMB
Balance in Increased at this period .Decreased at this period
Investee Closing balance
year-begin
Provision disposition
Total
Information about an asset group or asset group portfolio
Explain the goodwill impairment test process, key parameters (such as forecast period growth rate at expected
future cash flow, stable period growth rate, profit margin, discount rate, forecast period, etc.) and the confirmation
method of goodwill impairment loss
Impact of the goodwill impairment test
Other note
29. Long term amortize expenses
In RMB
Amortized
Balance in Increase in this Balance in
Items expenses Other loss
year-begin period year-end
Other note
178
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
30. Deferred income tax assets/deferred income tax liabilities
（1）Details of the un-recognized deferred income tax assets
In RMB
Balance in year-end Balance in year-begin
Items Deductible
Deferred income tax Deductible temporary Deferred income tax
temporary
assets difference assets
difference
Provision for Asset
1,356,205,463.61 215,697,910.21 1,462,795,044.91 233,844,217.10
Impairment
Internal trade profit not
58,598,289.97 8,789,743.49 53,583,539.53 8,037,530.93
realized
Revenue from changes in fair
value generated by financial
7,103,959.98 1,065,594.00 7,413,841.83 1,112,076.27
assets classified at fair value
through profit or loss
Temporary difference such as 708,010.51 106,201.58
amortizing of software 99,651.17 14,947.68
expense
Relocation compensation 1,041,307,329.87 157,097,084.29 1,187,246,121.02 178,402,589.15
Total 2,463,314,694.60 382,665,279.67 2,711,746,557.80 421,502,615.03
(2) Deferred income tax liabilities had not been off-set
In RMB
Balance in year-end Balance in year-begin
Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference liabilities difference liabilities
Changes in fair value of
investments in other 3,094,486,100.92 464,172,915.14 3,665,424,033.52 549,813,605.04
equity instruments
Accumulated
4,844,493.02 726,673.95
depreciation
Total 3,094,486,100.92 464,172,915.14 3,670,268,526.54 550,540,278.99
（3）Deferred income tax assets and liabilities are presented as net amount after neutralization
In RMB
Deferred Income Tax Temporarily Deductable
Deferred Income Tax Temporarily Deductable
Assets or Liabilities at or Taxable Difference at
Items Assets or Liabilities at or Taxable Difference at
the Beginning of Report the Beginning of Report
the End of Report Period the End of Report Period
Period Period
179
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Deferred income tax
382,665,279.67 421,502,615.03
assets
Deferred income tax
464,172,915.14 550,540,278.99
liabilities
(4)Details of income tax assets not recognized
In RMB
Items End of term Beginning of term
Deductible provisional differences 157,834,999.47 168,936,269.15
Deductible losses 166,619,930.21 59,419,906.08
Total 324,454,929.68 228,356,175.23
(5) The un-recognized deductible losses of deferred income tax assets will due in the following years:
In RMB
Year End of term Beginning of term Remark
2021 5,399,126.23
2022 10,928,264.99 10,939,685.88
2023 14,149,816.48 14,149,816.48
2024 23,524,220.73 23,713,687.70
2025 2,773,270.33 1,080,291.70
2026 44,870,965.65
2027 1,036,145.13
2028 1,545,297.07
2029 6,802,845.68 4,137,298.09
2030 3,914,057.03
2031 57,075,047.12
Total 166,619,930.21 59,419,906.08 --
Other note：
31 .Other non-current assets
In RMB
Balance in year-end Balance in year-begin
Items Book Provision Book value Book Provision Book value
balance for balance for
devaluation devaluation
Other note：
180
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
32. Short-term borrowings
（1）Categories of short-term loans
In RMB
Items End of term Beginning of term
Mortgage Borrowings 74,897,015.73 59,876,415.52
Guarantee Borrowing 170,163,630.75 192,901,251.51
Credit borrowing 5,005,273.97
Total 250,065,920.45 252,777,667.03
Note：
(2) List of the short-term borrowings overdue but not return
None
33. Transactional financial liabilities
None
34. Derivative financial liability
None
35.Notes payable
In RMB
Items End of term Beginning of term
Commercial acceptance bill 7,500,000.00 14,000,000.00
Bank acceptance bill 301,904,319.27 283,166,104.48
Total 309,404,319.27 297,166,104.48
The total amount of outstanding notes payable at the end of this period is RMB .
36. Accounts payable
(1) List of accounts payable
In RMB
Items End of term Beginning of term
Goods 1,709,868,854.24 1,167,825,479.31
Equipment and Engineering 186,363,724.44 164,099,118.70
Other 13,917,609.46 12,034,845.90
Total 1,910,150,188.14 1,343,959,443.91
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
(2) Notes of the accounts payable aging over one year
In RMB
Items Balance in year-end Reason
37. Advances received
(1) List of Advances received
In RMB
Items End of term Beginning of term
Rent 812,701.37 509,302.46
Total 812,701.37 509,302.46
(2) Notes of the accounts payable aging over one year
38.Contract liabilities
In RMB
Items End of term Beginning of term
Goods 3,052,515,293.06 2,949,234,639.55
Total 3,052,515,293.06 2,949,234,639.55
Amount and reasons for the significant change in the book value during the reporting period
In RMB
Items Amount Reason
39.Payable Employee wage
(1) List of Payroll payable
In RMB
Balance in Increase in this period Payable in this period Balance in year-end
Items
year-begin
I. Short-term compensation 103,291,818.04 883,662,446.67 887,677,607.97 99,276,656.74
II.Post-employment benefits - defi
27,020,384.40 111,259,674.22 104,434,205.44 33,845,853.18
ned contribution plans
III. Dismissal benefits 3,234,403.63 3,234,403.63
Total 130,312,202.44 998,156,524.52 995,346,217.04 133,122,509.92
（2）Short-term remuneration
In RMB
Balance in Increase in this period Decrease in this period Balance in year-end
Items
year-begin
182
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
(1) Salary, bonus, allowance
83,843,092.61 697,220,325.83 698,373,652.85 82,689,765.59
and subsidy
(2) Employee benefits 47,839,747.42 47,839,747.42
(3) Social insurance expenses 8,332,790.24 59,559,052.66 59,189,345.67 8,702,497.23
Including: medical insurance
8,264,053.61 57,905,036.77 57,612,432.61 8,556,657.77
premium
Work-related injury insurance
68,708.31 1,648,355.93 1,571,224.78 145,839.46
premium
Maternity insurance premium 28.32 5,659.96 5,688.28
(4) Housing fund 434,955.96 65,909,876.84 65,886,279.84 458,552.96
(5) Labor union expenditures
and employee education 10,680,979.23 13,133,443.92 16,388,582.19 7,425,840.96
expenses
Total 103,291,818.04 883,662,446.67 887,677,607.97 99,276,656.74
(3) List of drawing scheme
In RMB
Items Opening balance Increase Decrease Closing balance
1.Basic pension
3,194,283.71 80,787,716.32 76,616,786.40 7,365,213.63
insurance
2. Unemployment
114,116.96 2,866,425.90 2,717,501.04 263,041.82
insurance
3. Enterprise annual fee 23,711,983.73 27,605,532.00 25,099,918.00 26,217,597.73
Total 27,020,384.40 111,259,674.22 104,434,205.44 33,845,853.18
Other note：
40. Taxes Payable
In RMB
Items End of term Beginning of term
VAT 40,924,370.15 69,575,395.25
17,886,118.76 209,338,006.91
Enterprise Income tax
Individual Income tax 2,870,186.04 2,562,589.76
City Construction tax 5,687,507.47 6,210,382.62
Property tax 7,532,910.03 1,898,272.44
Land use tax 1,912,650.90 3,644,516.09
Education subjoin 2,485,447.07 2,660,982.39
Locality Education subjoin 1,666,388.01 1,773,988.26
Other 656,799.67 401,061.79
183
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Total 81,622,378.10 298,065,195.51
Other note：
41.Other account payable
In RMB
Items End of term Beginning of term
Other account payable 434,578,338.13 389,470,779.78
Total 434,578,338.13 389,470,779.78
（1) Interest payable
In RMB
Items Closing balance Opening balance
Particulars of significant overdue unpaid interest：
In RMB
Unit Overdue amount Overdue reason
Other note:
(2) Dividends payable
In RMB
Items Closing balance Unpaid/un-carry-over reason
Note: Including significant unpaid dividends payable over one year, the unpaid reason shall be disclosed:
(3) Other accounts payable
1) Other accounts payable listed by nature of the account
In RMB
Items End of term Beginning of term
Deposit 7,710,407.05 18,398,621.16
Provisional account payable 73,387,357.24 57,261,638.43
Related party demolition loan 240,000,000.00 309,254,400.43
Restricted stock subscription funds 110,195,995.86
Other 3,284,577.98 4,556,119.76
Total 434,578,338.13 389,470,779.78
2）Significant other payables for over 1 year
In RMB
Item Ending balance Reason for unreimbursed or transferred
184
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Other note
42. Liabilities classified as holding for sale
In RMB
Items Closing balance Opening balance
Other note:
43. Non-current liabilities due within 1 year
In RMB
Items End of term Beginning of term
Long-term loans due within 1 year 9,011,464.45 1,001,088.89
Lease liabilities due within 1 year 8,596,258.52 5,631,931.50
Total 17,607,722.97 6,633,020.39
Other note：
44. Other current liabilities
In RMB
Items End of term Beginning of term
Output tax to be transferred 394,535,629.47 384,174,688.02
Maintenance and renovation costs 1,105,000.00 3,532,265.95
Total 395,640,629.47 387,706,953.97
Changes on short term bonds payable:
In RMB
Overflow
The Withdraw Pay in
Name of Book Issue Opening discount Closing
Issue date period current interest at current
the bond value amount balance amortizati balance
issue par period
on
Other note:
45. Long-term borrowing
(1) Category of long-term loan
In RMB
Items End of term Beginning of term
Mortgage loan 20,624,674.22 21,623,520.00
Guarantee loan 160,205,333.33
Total 180,830,007.55 21,623,520.00
Note：
Other notes，including interest rate range：
185
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
46. Bonds payable
(1) Bonds payable
In RMB
Items Closing balance Opening balance
(2) Changes on bonds payable (not including other financial instrument classified as preferred stock and perpetual
capital securities of financial liabilities)
In RMB
The Withdraw Overflow Pay in
Name of Face Issue Opening Closing
Issue date Period current interest at discount current
the bonds value amount balance balance
issue par amount period
Total -- -- --
(3) Note to conditions and time of share transfer of convertible bonds
(4) Note to other financial instrument classified as financial liabilities
Basic information of preferred stock, perpetual capital securities and other financial instruments outstanding
issued at period-end Change list of preferred stock, perpetual capital securities and other financial instruments
outstanding issued at period-end
In RMB
Opening period Increase Decrease Closing period
Financial
instruments Provision for Provision for Provision for Provision for
Book balance Book balance Book balance Book balance
outstanding impairment impairment impairment impairment
issued Amount Book value Amount Book value Amount Book value Amount Book value
Note to the basis of other financial instrument classified as financial liabilities
Other note:
47. Lease liability
In RMB
Items End of term Beginning of term
Unpaid lease payments 24,310,879.76 24,260,853.39
Less：Financing charges are not recognized 1,735,124.99 2,067,109.71
Total 22,575,754.77 22,193,743.68
Other note
186
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
48. Long-term payable
In RMB
Items End of term Beginning of term
Long term account payable 330,000.00 156,493,666.66
Special Payable 7,249,677.56 251,452,878.43
Total 7,579,677.56 407,946,545.09
(1) Long-term payable listed by nature of the account
In RMB
Items End of term Beginning of term
CDB investment fund 155,000,000.00
Income payable of CDB 1,163,666.66
Drawing in administrative restructuring 330,000.00 330,000.00
Subtotal 330,000.00 156,493,666.66
Other note：
(2) Special Payable
In RMB
Items Opening balance Increase Decrease 期减少 End balance Reason
Compensation for
246,942,943.24 244,902,296.53 2,040,646.71
relocation
Funding for Personnel
2,486,006.87 2,843,140.00 2,144,044.34 3,185,102.53
Training
Resettlement 2,023,928.32 2,023,928.32
Total 251,452,878.43 2,843,140.00 247,046,340.87 7,249,677.56 --
Other note：
1.The reduction of compensation for land requisition and relocation in the current period is caused by the carry-over
of compensation for land requisition and relocation, in which the corresponding part of the relocation cost of RMB
130,550,011.93 in the current period is transferred to other income, and the corresponding part of the fixed assets of
RMB 114,352,284.60 in the new factory area put into use in the current period is transferred to deferred revenue, as
shown in Note XIV (III) to this Financial Statement.
2. Resettlement payment mainly refers to the compensation and resettlement transition fee saved during the
demolition and housing reform of the family dormitory area of the subsidiary, Hangfa Company.
49. Long term payroll payable
(1) List of long term payroll payable
In RMB
187
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Items Closing balance Opening balance
(2) Changes of defined benefit plans
Present worth of defined benefit plans obligation:
In RMB
Items Amount of the Current Term Amount of the Previous Term
Plan assets:
In RMB
Items Amount of the Current Term Amount of the Previous Term
Net liabilities (net assets) of defined benefit plans
In RMB
Items Amount of the Current Term Amount of the Previous Term
Notes to the influence of the content and related risk of defined benefit plans to the future cash flows, time and
uncertainty of the Company:
Notes to analysis results of major actuarial assumptions and sensibility of defined benefit plans
Other notes:
50. Estimated liabilities
In RMB
Items Closing balance Opening balance Formation reasons
Other notes, including related important assumptions and estimates of accrued liabilities:
51. Deferred income
In RMB
Decreased this
Items Beginning of term Increased this period End of term Reason
period
244,902,296.53 170,611,241.20 Receive government
Government Subsidy 655,147,696.41 729,438,751.74
subsidies
Total 655,147,696.41 244,902,296.53 170,611,241.20 729,438,751.74 --
Items involved in government subsidies:：
In RMB
Amount of newly Amount accrued Related to the
Items Opening balance Other changes Closing balance
subsidy in non-business assets/income
Other note:
Note：Please refer to Note V (5) 3 of the Financial Statements for details of the amount of government
subsidies included in the current profits and losses.
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
52. Other non-current liabilities
In RMB
Items Closing balance Opening balance
Other note：
53. Stock capital
In RMB
Increase/decrease this time (+ , - )
Balance Balance
Issuing of new Transferred
Year-beginning Bonus shares Other Subtotal year-end
share from reserves
Total of capital
754,010,400.00 754,010,400.00
shares
Other note：
54. Other equity instruments
(1) Basic information of preferred stock, perpetual capital securities and other financial instruments outstanding
issued at period-end
(2) Change list of preferred stock, perpetual capital securities and other financial instruments outstanding issued at
period-end
In RMB
Financial Opening balance Increase Decrease Closing balance
instruments
outstanding Amount Book value Amount Book value Amount Book value Amount Book value
issued
Changes, reason of change and basis of relevant accounting treatment of other equity instruments in reporting
period:
Other note：
55. Capital reserves
In RMB
Year-beginning balance Increase in the current Decrease in the current Year-end balance
Items
period period
Capital premium 319,231,541.83 230,525,542.81 345,106,086.63 204,650,998.01
Other capital reserves 60,674,925.09 17,620,107.40 78,295,032.49
Total 379,906,466.92 248,145,650.21 345,106,086.63 282,946,030.50
Other notes, including changes and reason of change:
1) The current increase of share capital premium includes:
① In 2021, after the Company completes the merger under the same control, the part of the retained earnings
realized by such mergee before the merger date attributable to the Company was limited to the Company's capital
189
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
reserve in the consolidated financial statements, which was transferred from the capital reserve to the retained
earnings, and the capital reserve-equity premium was adjusted and increased by RMB 230,196,768.80.
② Ranchuang Company was originally a joint venture of the Company. In 2021, after the Company merged with
Ranchuang Company under the same control, the investment profits and losses accumulated by the equity method
on the merger date were reversed in the consolidated financial statements, and the capital reserve-equity premium
was adjusted and increased by RMB 328,774.01.
2) The current decrease of share capital premium includes:
① In 2021, under the same control, the Company merged the New Energy Company, Sales Company, Ranchuang
company and China Mechanical Institute Company , The difference between the book value of the merger
consideration paid the share off the book value of the net assets obtained by the merged parties in the ultimate
controlling party's consolidated financial statements will be offset against the capital reserve-the share capital
premium of RMB 61,503,831.00.
② After the Company completed the merger under the same control in 2021, it shall be regarded as the existing
status of the merged company before the completion of the merger under the same control. However, in the
Company's previous comparative consolidated financial statements, the paid-in capital of the mergee and the part of
the capital reserve attributable to the Company were adjusted and turned back at the end of the period, and the
capital reserve-equity premium was adjusted and reduced by RMB 226,288,847.27.
③ In 2021, due to the purchase of minority shareholders' equity in subsidiaries, the Company adjusted and reduced
the capital reserve-equity premium by RMB 27,313,408.36 for the difference between the newly acquired long-term
equity investment cost and the identifiable net assets share of subsidiaries calculated since the merger date according
to the newly increased shareholding ratio.
④ In 2021, the company increased the special reserve due to the purchase of minority shareholder equity of the new
energy company, and adjust and reduce the capital reserve by 38,350.14 yuan.
⑤The equity of the New Energy Company originally held by the Company is classified as financial assets measured
at fair value and its changes are included in current profits and losses. In 2021, after the Company completed its
merger of the New Energy Company under the same control, the profits and losses of fair value changes recognized
during the investment holding period of the originally held equity were transferred to capital reserve, and the capital
reserve-equity premium was reduced by RMB 30,000,000.00.
2) The increase of other capital reserves in the current period includes:
① Zhongrun Company, a former affiliate of subsidiary Turbine Company, increased its registered capital by RMB
10,000,000.00 in 2018 (paid in by stages), of which RMB 680,000.00 was paid in this period. Turbine Company
calculated the fair value share of identifiable net assets of the investee according to the shareholding ratio, adjusted
and increased the book value of long-term equity investment, and included it in capital reserve-other capital reserve
of RMB 322,200.00.
② In 2021, the Company increased the capital reserve-other capital reserve by RMB 17,297,907.40 due to equity
settlement of share-based payment involving employees, as shown in Note XI to this Financial Statement.
56. Treasury stock
In RMB
Year-beginning balance Increase in the current Decrease in the current Year-end balance
Items
period period
190
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Treasury stock 144,078,948.09 144,078,948.09
Total 144,078,948.09 144,078,948.09
Other notes, including changes and reason of change:
It is the total 19,551,800 shares repurchased by the Company, of which 19,440,000 shares were used as equity
incentives to grant restricted shares to employees, as detailed in Note XI to this Financial Statement.
57. Other comprehensive income
In RMB
Occurred current term
Less：
Prior
Less：Amount period
transferred included
into profit and in other
After-tax
loss in the composit After-tax
Opening Amount attribute to
Items current period e income Less：Income attribute to the Closing balance
balance incurred before minority
that recognied transfer tax expenses parent
income tax shareholde
into other to company
r
comprehensiv retained
e income in income
prior period in the
current
period
1. Other
comprehensiv
e income that
cannot be 3,115,610,428.4 -570,937,932.6 -85,640,689.9 -485,297,242.7 2,630,313,185.7
7 0 0 0 7
reclassified in
the loss and
gain in the
future
Changes in
fair value of
3,115,610,428.4 -570,937,932.6 -85,640,689.9 -485,297,242.7 2,630,313,185.7
investments in
7 0 0 0 7
other equity
instruments
2.Other -252,699.5
-648,041.63 -440,086.68 -187,387.15 -835,428.78
comprehensiv 3
191
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
e income
reclassifiable
to profit or
loss in
subsequent
periods
Difference of
translating of
-252,699.5
foreign -648,041.63 -440,086.68 -187,387.15 -835,428.78
3
currency
accounts
Total of other
3,114,962,386.8 -571,378,019.2 -85,640,689.9 -485,484,629.8 -252,699.5 2,629,477,756.9
comprehensiv
4 8 0 5 3 9
e income
Other notes, including the adjustment of the recognition of initial amount of effective part of the cash flow
58. Special reserves
In RMB
Items Beginning of term Increased this period Decreased this period End of term
Labor safety expenses 18,568,980.86 4,315,254.24 4,515,201.58 18,369,033.52
Total 18,568,980.86 4,315,254.24 4,515,201.58 18,369,033.52
Other note, including changes and reason of change:
1) The increase in the current period includes the special reserve of RMB 38,350.14 increased due to the purchase of
minority shareholders' equity of the Packaged Company;
2)The decrease in the current period is due to the safety production expenses extracted by the company for the
purchase of safety protection articles and equipment.
3) On December 5, 2016, Upon the application of the Company and the approval of Hangzhou Safety Production
Supervision and Administration Bureau (HSPSAB), the minimum reserved amount for the collection and use of
the safety production cost of the Company and its subsidiaries is RMB 20 million. If the safety production costs
that have been withdrawn in previous years have exceeded the minimum reserved amount, it will no longer be
reduced; if the safety production costs for the subsequent years are less than the above-mentioned minimum
reserved amount, withdraw in the current year to compensate up to the minimum reserved amount. After adding
the work safety expenses attributable to minority shareholders, the total of the Company's work safety expenses at
the end of the period is RMB 27,565,460.88.
59. Surplus reserves
In RMB
Items Beginning of term Increased this period Decreased this period End of term
192
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Statutory surplus
625,178,089.82 625,178,089.82
reserves
Total 625,178,089.82 625,178,089.82
Other note, including changes and reason of change
60. Retained profits
In RMB
Items Amount of this period Amount of last period
Adjust the undistributed profits before and at the
3,587,465,039.91 3,276,880,091.53
end of the period
Retained profits at the period beginning -172,106,637.64 -187,499,849.12
After adjustments: Retained profits at the period
3,415,358,402.27 3,089,380,242.41
beginning
Add：Net profit belonging to the owner of the
649,992,474.56 476,268,110.63
parent company
Less: Appropriation to statutory surplus reserve 29,455.77
Common stock dividend payable 185,864,649.99 150,260,495.00
Other [Note] 117,902,815.93
Retained profits at the period end 3,761,583,410.91 3,415,358,402.27
[Note] It is the difference between the book value of the merger consideration paid for the merger of Hangfa
Company under the same control of the subsidiary Zhongneng Company in 2021 and the share of the book value
of the net assets of the merged party obtained in the consolidated financial statements of the ultimate controlling
party. The difference is due to the insufficient balance of the capital reserve-capital premium of Zhongneng
Company to offset the undistributed profit of RMB 117,902,815.93.
(2) As regards the details of adjusted the beginning undistributed profits
In the current period, Hangfa Company, New Energy Company, Sales Company, China Mechanical Institute
Company, and Ranchuang Company were consolidated under the same control, and retrospective adjustments
were made to the opening balance of the comparative statement, which affected the undistributed profit at the
beginning of the period RMB-172,106,637.64 .
As regards the details of adjusted the beginning undistributed profits
(1)As the retroactive adjustment on Enterprise Accounting Standards and its related new regulations, the affected
beginning undistributed profits are RMB 0.
(2) As the change of the accounting policy, the affected beginning undistributed profits are RMB 0.
(3) As the correction of significant accounting error, the affected beginning undistributed profits are RMB 0 .
193
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
(4) As the change of consolidation scope caused by the same control, the affected beginning undistributed profits
are RMB 0.
(5) Other adjustment of the total affected beginning undistributed profits are RMB 0 .
61. Business income and Business cost
In RMB
Amount of this period Amount of last period
Items
Income Cost Income Cost
Main Business 5,756,713,931.47 4,062,659,604.63 4,731,546,029.54 3,239,387,906.09
Other 31,574,657.44 29,295,888.06 30,769,059.56 23,864,759.55
Total 5,788,288,588.91 4,091,955,492.69 4,762,315,089.10 3,263,252,665.64
Whether the net profit before and after deducting non-recurring gains and losses is negative after audit
□ Yes √ No
Information related to performance obligations:
The Company’s sales link has entered into a legal and effective sales contract/order with the customer. The
contract/order clarifies the terms of the subject product, specification model, transaction quantity, unit price,
settlement method, delivery obligation, etc., and the performance obligation is clear, and it is the single
performance obligation at a single point in time. The transaction prices of the Company’s various product
contracts/orders are clear, and the Company will confirm revenue after fulfilling the relevant performance
obligations in accordance with the contract/order related agreements.
Information related to transaction value assigned to residual performance obligations:
The income corresponding to the performance obligations that have not been performed or have been performed
incompletely but the contract has been signed at the end of the reporting period is RMB 6,765,110,000.00, of which
RMB 0.00 is expected to be recognized as income in the year, RMB 0.00 is expected to be recognized as income
in the year, and RMB 0.00 is expected to be recognized as income in the year.
Other note
62.Taxes and surcharges
In RMB
Items Amount of this period Amount of last period
Urban maintenance and construction tax 15,477,429.38 17,345,752.21
Educational surtax 6,755,116.33 7,542,388.35
Locality Education surcharge 4,506,158.80 5,028,259.36
House tax 11,919,435.52 2,969,291.62
Land royalties 4,610,225.78 3,646,996.21
Stamp tax 2,477,515.63 1,735,364.16
vehicle and vessel tax 69,072.31 79,582.98
Other 14,076.50 2,213.85
194
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Total 45,829,030.25 38,349,848.74
Other note：
63. Sales expense
In RMB
Items Amount of this period Amount of last period
Employees’ remunerations 101,207,766.17 96,404,837.83
Transportation(Note) 1,130,417.68 59,142,581.52
Travel expenses 26,421,118.72 21,011,034.50
Business reception expenses 16,944,060.09 12,330,906.20
Consulting service fee 26,377,049.32 25,955,970.28
Conferences 1,732,483.74 2,032,611.43
Three charge 18,802,491.64 10,779,101.31
Advertising fee 1,841,852.03 638,338.45
Other 8,411,318.43 6,278,879.95
Total 202,868,557.82 234,574,261.47
Other note：
[Note] According to the requirements of Guidelines for the Application of Regulatory Rules-Accounting No.2
issued by China Securities Regulatory Commission in December 2021, the transportation fee was listed as operating
cost in this period.
64. Administrative expense
In RMB
Items Amount of this period Amount of last period
Employees’ remunerations 435,806,921.20 335,736,272.68
Asset depreciation and amortizing 33,173,062.19 31,134,307.36
Business reception expenses 3,845,444.19 3,422,610.45
Rental fee, House rental, property
38,197,856.49 20,385,354.04
management, water and power
Travel expenses and overseas travel
6,827,063.68 6,455,591.83
expenses
Agency fee 8,949,478.71 7,914,620.37
Office expenses 12,664,641.22 8,975,843.72
Repair costs 14,285,987.83 10,032,086.58
Enterprise relocation costs [Note] 31,652,234.54 66,131,057.32
Share payable 17,297,907.40
195
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Other 57,583,725.85 54,909,257.48
Total 660,284,323.30 545,097,001.83
Other note：
Note：Relocation expenses mainly include personnel placement expenses, rental expenses, transportation expenses,
etc. Other relocation expenses are listed in the following items: employee salaries and rental fees, property
management fees, utilities, etc.
65. R&D Expense
In RMB
Items Amount of this period Amount of last period
Labor cost 170,270,207.41 124,779,722.67
Direct materials 145,030,641.50 86,750,209.39
Depreciation expenses 9,953,767.74 10,203,852.94
Test and inspection fee 2,322,130.32 1,948,491.48
Commissioned research & development 8,013,059.40 3,299,186.60
Other 14,626,828.74 6,899,768.63
Total 350,216,635.11 233,881,231.71
Other note：
66. Financial expenses
In RMB
Items Amount of this period Amount of last period
Interest expense 23,435,810.36 37,389,700.85
Less: Incoming interests 18,328,752.35 23,071,547.55
Exchange gains/losses 1,903,566.98 32,362,229.77
Commission 2,738,299.23 2,498,961.17
Total 9,748,924.22 49,179,344.24
Other note：
67. Other income
In RMB
Items Amount of this period Amount of last period
Government subsidies related to assets 30,843,067.37 19,688,740.02
Government subsidies related to income 171,327,615.80 103,474,100.38
196
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Housing reform resettlement housing into 11,985,916.05
Individual tax commission refunds 377,834.86 632,610.70
Total 202,548,518.03 135,781,367.15
68. Investment income
In RMB
Items Amount of this period Amount of last period
Long-term equity investment income by equity
-2,137,796.92
method
Investment income of trading financial assets
716,981.13
during the holding period
Investment income obtained from the disposal
81,906,736.97 32,368,596.22
of trading financial assets
Dividend income from other equity instrument
95,156,322.10 95,156,322.10
investments during the holding period
Debt restructuring gains 1,617,382.00 3,350,920.00
Investment income obtained from the disposal
21,765.89 18,018,324.93
of other non-current financial assets
Receivables financing discount loss -3,273,132.15 -2,198,487.31
Other [Note] -6,491,695.59
Total 168,937,379.22 145,274,860.15
Other note：
It is the investment loss caused by the merger of the subsidiary Turbine Company with Zhongrun Company
under different control in the current period. See Note VI (I) 2 to this Financial Statement for details.
69.Net exposure hedging income
In RMB
Items Amount of the Current Term Amount of the Previous Term
Other note
70. Gains on the changes in the fair value
In RMB
Source Amount of this period Amount of last period
Transactional Financial assets 963,450.48 -359,181.10
Other non-current financial assets -1,104,976.32 1,505,305.18
Total -141,525.84 1,146,124.08
197
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
71. Credit impairment loss
In RMB
Source Amount of this period Amount of last period
Losses on bad debt 15,768,143.94 41,085,509.51
Total 15,768,143.94 41,085,509.51
72. Losses from asset impairment
In RMB
Items Amount of this period Amount of last period
II. Loss of inventory value and impairment
-26,504,227.85 -58,463,854.65
of contract performance costs
V. Impairment loss of fixed assets -9,028,267.09
XII. Loss of impairment of contract assets 7,021,475.51 -7,106,383.13
Total -28,511,019.43 -65,570,237.78
Other note：
73. Asset disposal income
In RMB
Source Amount of this period Amount of last period
Profits of disposal of fixed assets 1,094,656.77 418,137.70
Investment real estate disposal loss [Note] -8,512,465.50
Total 1,094,656.77 -8,094,327.80
74. Non-operating income
In RMB
Recorded in the amount of the
Items Amount of this period Amount of last period
non-recurring gains and losses
Loss of non-current assets:
102,213.90 94,219.18 102,213.90
obsolescence gain
Projected liabilities charged 32,202,504.57
Compensation income[Note] 131,153,708.15 15,176,182.79 131,153,708.15
No payment required 2,662,252.07 463,302.20 2,662,252.07
Equity gains 1,149,217.06
Other 434,801.16 795,055.10 434,801.16
Total 134,352,975.28 49,880,480.90 134,352,975.28
Government subsidies recorded into current profits and losses：
In RMB
198
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Whether the
impact of Amount of Amount of
Whether Assets-relate
Issuing subsidies on
Items Issuing body Nature special current previous d/income
Reason the current
subsidies -related
profit and period period
loss
Other note：
[Note] It is mainly based on the Supply Contract of M251S Gas Turbine Generator Set signed by the subsidiary
Turbine Company and Sinosteel Equipment & Engineering Co., Ltd. and the corresponding supply contract signed
by Turbine Company and the Company. In the current period, the compensation for this project has been settled, and
Sinosteel Equipment & Engineering Co., Ltd. paid compensation of RMB 109 million to the Turbine Company,
which was listed as non-operating income-compensation income; Meanwhile, the Company paid compensation of
RMB 6,240,900 to external suppliers, which was listed as non-operating expenses-compensation expenses.
75. Non-operational expenses
In RMB
Recorded in the amount of the
Items Amount of this period Amount of last period
non-recurring gains and losses
Non-current assets scrapping
78,963,545.45 21,466,096.04 78,963,545.45
loss[Note]
Compensation expenses 9,386,784.95 14,520,340.92 9,386,784.95
Donations 310,000.00 277,709.00 310,000.00
Fine, late payment 203,901.79 5,969.94 203,901.79
Other 23,067.14 102,219.02 23,067.14
Total 88,887,299.33 36,372,334.92 88,887,299.33
Other note：
[Note] This includes the loss of relocation assets caused by the transferred property and land in the current period,
which is RMB 76,898,071.36.
76. Income tax expenses
(1) Details
In RMB
Items Amount of this period Amount of last period
Income tax of current term 67,189,032.96 255,378,107.96
199
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Deferred income tax 38,110,661.41 -173,811,567.66
Total 105,299,694.37 81,566,540.30
(2) Adjustment process of accounting profit and income tax expenses
In RMB
Items Amount of this period
Total profit 832,547,454.16
Income tax expense at parent company's applicable tax rate 124,882,118.12
Effect of different tax rates applicable to subsidiaries 5,786,600.52
Adjustment for income tax in prior year 855,465.82
Income not subject to tax -14,273,448.32
Effects of non-deductible costs, expenses and losses 5,670,614.71
Super deduction of R&D expenses -28,427,394.32
Impact of additional deductions for persons with disabilities -420,913.25
The impact of share-based payments 2,615,556.13
Changes in tax rate adjustments to the balance of deferred tax
233,927.70
assets at the beginning of the period
Impact of temporary differences on the use of previously
-6,901,545.30
unrecognized deferred income tax assets
Impact of deductible losses on the use of previously
-4,736.67
unrecognized deferred income tax assets
The current period does not affect the deferred tax assets
15,283,449.23
recognized deductible temporary differences or deductible loss
Income tax expenses 105,299,694.37
Other note
77. Other Comprehensive income
For details, please refer to Note V(1)38 of the Financial statement
78. Notes Cash flow statement
(1) Other cash received from operating activities
In RMB
Items Amount of this period Amount of last period
200
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Recovery of operating bank deposits 398,801,063.82 427,768,344.88
Compensation income 35,240,999.31 843,880.36
Government subsidies received 31,902,074.30 44,709,531.82
Deposit interest 18,237,333.89 23,072,376.62
Receipt of operating current account 5,033,170.11 3,405,474.50
Lease income 2,966,095.79 2,156,551.34
Other 812,636.02 1,145,916.80
Total 492,993,373.24 503,102,076.32
Note：
(2) Other cash paid related to operation
In RMB
Items Amount of this period Amount of last period
Payment cash sales expenses 102,134,607.20 132,496,033.43
Payment cash Management expenses 148,934,743.59 139,281,169.34
Payment cash R & D cost 25,057,788.44 12,391,741.72
Payment cash financial expenses 2,738,299.23 2,492,606.17
Payment of operational bank deposits 223,049,919.64 254,420,646.90
Payment of business transactions 19,701,721.07 19,887,907.99
Pay compensation 4,529,909.30 5,127,630.77
Other 536,968.94 384,876.18
Total 526,683,957.41 566,482,612.50
（3）Other investment-related cash received
In RMB
Items Amount of this period Amount of last period
Repurchasing of trusteeship 3,758,818,000.00 3,391,068,000.00
Reduction of Hangzhou bank convertible
687,572,000.00
bond
Get the cash received by the subsidiaries 1,275,088.15
Receipt of levy and relocation
233,281,702.42
compensation
Total 4,447,665,088.15 3,624,349,702.42
（4）Other cash paid for investment activities
201
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
In RMB
Items Amount of this period Amount of last period
Purchasing of financial products 3,696,000,000.00 3,559,712,851.80
Purchasing of convertible bonds 687,572,000.00
Total 4,383,572,000.00 3,559,712,851.80
（5）Other cash paid for Financing activities
In RMB
Items Amount of this period Amount of last period
Received of restricted stock warrants 110,195,995.86
Discounting payment of financing bill 7,500,000.00
Related party funds demolition 92,500,000.00
Total 117,695,995.86 92,500,000.00
（6）Other cash paid relevant to financing activities
In RMB
Items Amount of this period Amount of last period
Payment of CDB investment interest 155,000,000.00 27,000,000.00
Return the related party's capital lending
40,373,179.58 186,491,911.11
and interest
Subsidiary cancels and returns minority
12,725,371.88
shareholders
Purchase of minority shareholders' equity 53,295,800.13
Lease Liability Payments 7,337,642.50
Pay interest on CDB Fund investment 2,021,333.33 2,441,666.67
Payment of discounted interest on
328,968.75
financing bills
Repurchase stocks 144,078,948.09
Total 271,082,296.17 360,012,525.87
79. Supplement Information for cash flow statement
（1）Supplement Information for cash flow statement
In RMB
Supplementary Info. Amount of this period Amount of last period
-- --
I. Adjusting net profit to cash flow from operating activities
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Net profit 727,247,759.79 579,545,636.46
Add: Impairment loss provision of assets 12,742,875.49 24,484,728.27
Depreciation of fixed assets, oil and gas assets and
104,261,255.33 82,178,067.16
consumable biological assets
Depreciation of Use right assets 7,670,173.81
Amortization of intangible assets 10,482,651.22 9,349,435.30
Amortization of Long-term deferred expenses 3,520.00
Loss on disposal of fixed assets, intangible assets and other
-1,094,656.77 8,094,327.80
long-term deferred assets
Fixed assets scrap loss 78,861,331.55 21,371,876.86
Loss on fair value changes 141,525.84 -1,146,124.08
Financial cost 25,227,104.80 69,637,344.98
Loss on investment -170,593,129.37 -145,271,644.52
Decrease of deferred income tax assets 38,837,335.36 -172,541,196.58
Increased of deferred income tax liabilities -726,673.95 -1,270,371.08
Decrease of inventories -764,962,478.57 -162,969,220.14
Decease of operating receivables -297,533,528.78 -361,597,447.26
Increased of operating Payable 284,977,912.55 692,267,324.14
Other 16,266,510.72 -13,246,962.19
Net cash flows arising from operating activities 71,809,489.02 628,885,775.12
II. Significant investment and financing activities that
-- --
without cash flows:
Conversion of debt into capital
Convertible corporate bonds maturing within one year
Financing of fixed assets leased
3．Movement of cash and cash equivalents： -- --
Ending balance of cash 1,467,538,968.07 1,850,354,648.10
Less: Beginning balance of cash equivalents 1,850,354,648.10 1,723,513,225.12
Add：End balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase of cash and cash equivalent -382,815,680.03 126,841,422.98
203
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
(2) Net Cash paid of obtaining the subsidiary
In RMB
Amount
Cash or cash equivalents paid in the current period for business
298,438,942.86
combinations that occurred in the current period
Of which --
New Energy Company 20,608,543.31
Sales Company 28,200,000.00
China Mechanical Institute Company 1,390,093.91
Ranchuang Company 10,139,132.68
Hangfa Company 238,101,172.96
Zhongrun Company
Less：Cash and cash equivalents held by the purchase day company 114,462,348.06
Of which： --
New Energy Company 33,589,914.95
Sales Company 15,501,453.30
China Mechanical Institute Company 1,003,348.30
Ranchuang Company 40,563,903.64
Hangfa Company 22,528,639.72
Zhongrun Company 1,275,088.15
Of which： --
Net cash paid to acquire subsidiaries 183,976,594.80
Other note：
(3) Net Cash receive of disposal of the subsidiary
In RMB
Amount
Of which --
Of which --
Of which --
Other note：
(4) Component of cash and cash equivalents
In RMB
Items Closing balance Opening balance
I. Cash 1,467,538,968.07 1,850,354,648.10
Including：Cash at hand 65,904.06 164,696.83
204
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Demand bank deposit 1,467,310,722.30 1,850,149,411.43
Demand other monetary funds 162,341.71 40,539.84
III. Balance of cash and cash equivalents at
1,467,538,968.07 1,850,354,648.10
the period end
Other note：
(1) Monetary funds that not attributable to cash and cash equivalents
Items Ending amount Opening amount
Bank acceptance bill deposit 151,092,217.21 136,253,144.15
L/G margin 4,235,062.51 12,399,706.00
Funds frozen upon certificate expiry 474,344.07
ETC business margin 17,000.00 28,000.00
Subtotal 155,344,279.72 149,155,194.22
(2) Endorsement transfer amount of commercial bills not involving cash receipts and payments
Items Current amount Amount of the same period last year
Amount of commercial bill endorsed and transferred 1,539,746,319.56 1,734,042,271.13
In which: payment for goods 1,486,046,319.56 1,521,043,084.13
Payment for the purchase of long-term assets such as fixed assets 12,700,000.00 10,843,300.00
Payment of loan 41,000,000.00 202,155,887.00
80. Note of statement of changes in the owner's equity
Explain "other" project name and adjustment amount of the adjustment of closing balance in previous year, etc.
(1) In 2021, the Company merged under the same control, and when preparing the comparative consolidated
financial statements, the related assets and liabilities of the mergee were simulated and consolidated, so the owner's
equity at the end of 2019 was retroactively adjusted, increasing the owner's equity by RMB 118,205,267.58.
Including: capital reserve increased by RMB 226,288,847.27, special reserve increased by RMB 869,345.59,
surplus reserve increased by RMB 4,035,826.27, undistributed profit decreased by RMB 187,499,849.12, and
minority shareholders' equity increased by RMB 74,511,097.57.
(2) In 2021, the Company merged under the same control. When the comparative consolidated financial
statements were prepared, the related assets and liabilities of the mergee were simulated and consolidated, so the
owner's equity at the end of 2020 was retroactively adjusted, increasing the owner's equity by RMB 140,231,914.51.
Including: capital reserve increased by RMB 226,288,847.27, special reserve increased by RMB 869,345.59,
surplus reserve increased by RMB 4,065,282.04, undistributed profit decreased by RMB 172,106,637.64, and
minority shareholders' equity increased by RMB 81,115,077.25.
81. Assets with limitation on ownership or using rights
In RMB
Items Closing book value Causation o limitation
Monetary capital 155,344,279.72 Used as security for issuing of acceptance
205
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
bill and bill of guarantees
Used as security for issuing of acceptance
Notes receivable 9,004,000.00
drafts and bill
Fixed assets 158,941,353.35 Collateral for obtaining bank loans
Intangible assets 53,001,884.15 Collateral for obtaining bank loans
Used as security for issuing of acceptance
Financing of receivable 89,200,929.14
drafts and bill
Total 465,492,446.36 --
Other note：
82. Monetary items in foreign currencies
(1) Foreign currency monetary items
In RMB
Translated to RMB at end of
Items Balance at end of period Exchange rate
period
Monetary capital -- -- 320,569,684.38
Incl：USD 48,576,055.61 6.3757 309,706,357.75
Euro 552,229.69 7.2197 3,986,932.69
Rupiah 15,365,105,394.00 0.000447 6,868,202.11
HKD 6,382.49 0.8176 5,218.32
JPY 53,659.00 0.055415 2,973.51
Account receivable 174,054,101.36
Incl：USD 26,100,687.58 6.3757 166,410,153.80
Euro 550,549.14 7.2197 3,974,799.62
Rupiah 7,704,655,205.00 0.000447 3,443,980.88
SGD 47,726.12 4.7179 225,167.06
Other receivable 3,187,850.00
Incl：USD 500,000.00 6.3757 3,187,850.00
Contract assets 7,360,914.16
Incl：USD 313,000.00 6.3757 1,995,594.10
Euro 743,150.00 7.2197 5,365,320.06
Account payable 12,392,066.71
Incl：USD 595,750.99 6.3757 3,798,329.59
Euro 741,588.86 7.2197 5,354,049.09
Rupiah 7,247,624,225.00 0.000447 3,239,688.03
206
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Other note：
(2) Note to overseas operating entities, including important overseas operating entities, which should be disclosed
about its principal business place, function currency for bookkeeping and basis for the choice. In case of any
change in function currency, the cause should be disclosed.
□ Applicable √ Not applicable
83. Arbitrage
Arbitrage According to arbitrage category to disclose arbitrage item, relevant arbitrage tools and the arbitraged
risk qualitative and quantitative information:
84. Government subsidy
1) Government subsidies related to assets
In RMB
Amount included in current
Items Amount Project
profit and loss
2）Government subsidy return
□ Applicable √ Not applicable
Other note：
(1) Detail
1) Asset-related government subsidies
Beginning Current subsidy Ending Current amortization
Items Current amortization
Deferred income increase Deferred income Item presentation
Relocation and
relocation
compensation 495,617,707.12 114,352,284.60 22,004,015.60 587,965,976.12 Other income
(Shiqiao Road
factory area)
Relocation and
relocation
135,659,479.90 8,770,081.77 126,889,398.13 Other income
compensation
(Hangfa factory area)
Financial subsidy for 172,680.00 28,780.00 143,900.00
Other income
industrial projects
Subsidy for casting 172,680.00 28,780.00 143,900.00
Other income
and forging projects
Financial subsidy for 68,460.00 11,410.00 57,050.00
Other income
recycling economy
207
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Subtotal 631,691,007.02 114,352,284.60 30,843,067.37 715,200,224.25
2) Income-related Government grants used to compensate for related costs or losses incurred by the company
Items At the beginning of the New subsidies This period of End-of-term deferred Amortize the items in
deferred income for this period amortization income this period
Supported by Zhejiang 23,456,689.39 9,218,161.90 14,238,527.49 Other income
Gas Turbine Machinery
Manufacturing Innovation
Center
Subtotal 23,456,689.39 9,218,161.90 14,238,527.49
3) Income-related government subsidies used for compensation of relevant costs and expenses or losses incurred in
the Company
Items Amount Item presentation
Relocation and relocation compensation (Shiqiao Road factory area) 130,550,011.93 Other income
Financial subsidies for enterprises in Linping District to use capital market 6,000,000.00 Other income
and strengthen financial security
The first (set) award in key areas of equipment manufacturing industry in 5,027,620.00 Other income
Zhejiang Province
Special fund for Hangzhou science and technology development 2,775,600.00 Other income
Funding for personnel training 2,244,044.34 Other income
Special fund for Hangzhou industrial and information development 2,000,000.00 Other income
Import discount subsidy 1,914,200.00 Other income
R&D investment subsidy 1,579,200.00 Other income
Backbone enterprise procurement reward and subsidy 1,252,000.00 Other income
Industrial promotion reward 1,000,000.00 Other income
Award fund for 2020 Science and Technology Progress Award in Hangzhou 1,000,000.00 Other income
Linping District
High-tech enterprise subsidy 944,000.00 Other income
Subsidy funds for major science and technology projects to be approved 800,000.00 Other income
Award fund for Provincial Science and Technology Progress Award 800,000.00 Other income
Awards for high-tech enterprises in key areas supported by the state 600,000.00 Other income
Social security refund 497,829.91 Other income
Subsidy for Hangzhou Manufacturing Digital Transformation Key Project 424,200.00 Other income
Funding for Hangzhou "115" Introduction of Foreign Intelligence Project 385,000.00 Other income
Property tax refund 356,157.80 Other income
208
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Work-for-training subsidy 275,000.00 Other income
Industry-University-Research cooperation subsidy fund 201,000.00 Other income
Provincial awards for new industrial products 200,000.00 Other income
Outstanding contribution award of "production benefit per mu" 200,000.00 Other income
New research and development center award 200,000.00 Other income
Zhejiang manufacturing certification subsidy 200,000.00 Other income
Patent subsidy 155,106.00 Other income
Other incidental government subsidies 528,483.92 Other income
Subtotal 162,109,453.90
(2) The current amount of government subsidies included into the current profits and loss is RMB 202,170,683.17.
85.Other
VIII. Changes of merge scope
1. Business merger not under same control
(1) Business merger not under same control in reporting period
In RMB
Income of Net profits of
Time and
Cost of Way to gain Recognition acquiree acquiree
place of Proportion of
Name gaining the the stock Purchase date basis of during the during the
gaining the stock rights
stock rights rights purchase date purchase date purchase date
stock right
to period-end to period-end
Capital
contribution
Zhongrun 11,899,308.8 and equity January Obtain
(Note) 51.99% 5,786,975.59 -2,951,633.70
Company 4 transfer of 4,2021 control
original
shares
On April 17, 2020, the subsidiary Turbine Company acquired 6.99% equity of Zhongrun Company through equity
transfer, and held 51.99% equity of Zhongrun Company in total as of that date.
Other note：
On January 4, 2021, Zhongrun Company's shareholders' meeting decided to amend the Articles of Association.
Before this amendment, Zhongrun Company had 3 board members, with its subsidiaries Turbine Company,
Zhejiang Tianquan Surface Technology Co., Ltd. and Ningbo Daxie Development Zone Huashun Industry & Trade
Co., Ltd. each recommending one. The resolution of the Board of Directors shall be unanimously approved by all
directors. After this revision, Zhongrun Company has 5 board members, 3 recommended by Turbine Company, 1
recommended by Zhejiang Tianquan Surface Technology Co., Ltd. and 1 by Ningbo Daxie Development Zone
209
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Huashun Industry & Trade Co., Ltd., and the resolutions of the Board of Directors shall be approved by half of all
directors. Therefore, the Company has included it in the scope of consolidated financial statements since early
January 2021.
（2）Merger cost and goodwill
In RMB
Items Zhongrun
Merger cost 12,221,508.84
Fair value of equity held before the acquisition date at the acquisition 12,221,508.84
date
Total merger cost 12,221,508.84
Less: fair value share of identifiable net assets obtained 5,729,813.25
Investment pricing loss [Note] 6,491,695.59
[Note] Turbine Company, a subsidiary company, merged with Zhongrun Company under the same control in the
current period, and the difference between the cost of business merger and the fair value share of identifiable net
assets of the acquiree of RMB 6,491,695.59 was the investment loss, which was included in the current profits and
losses.
(3) The identifiable assets and liabilities of acquiree at purchase date
In RMB
Zhongrun Company
Fair value on purchase date Book value on purchase date
Assets
Current assets 3,176,621.59 3,176,621.59
Non-current assets 9,372,055.51 9,372,055.51
Liabilities
Current liabilities 1,219,742.20 1,219,742.20
Net assets 11,328,934.90 11,328,934.90
Less：Minority shareholders’ equity 5,599,121.65 5,599,121.65
Net assets obtained 5,729,813.25 5,729,813.25
The recognition method of the fair value of identifiable assets and liabilities
The fair values of identifiable assets and liabilities are assessed and determined by the Company's management
according to the asset assessment report (TYPB Zi [2022] No.0099).
Contingent liability of acquiree undertaken by business merger
Other note:
(4) The profit or loss from equity held by the date before acquisition in accordance with the fair value measured
again、
Whether there is a transaction that through multiple transaction step by step to realize enterprises merger and
gaining the control during the reporting period
210
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
√Yes□ √ No
Profits or losses
arising from Methods and main
The amount of other comprehensive
Book value of Book value of equity remeasurement assumptions for
income and other changes in owner's
equity originally originally held of equity determining the fair
Name of the equity related to the equity originally
held before the before the originally held value of the equity
acquiree held before the acquisition date
acquisition date at acquisition date at before the held before the
transferred to investment
the acquisition date the acquisition date acquisition date acquisition date on
income/retained income
according to fair the acquisition date
value
Zhongrun 12,221,508.84 5,729,813.25 -6,491,695.59 Asset Appraisal
Company Report (TYPB Zi
﹝2022﹞No.0099)
Other note:
(5) Note to merger could not be determined reasonable consideration or Identifiable assets, Fair value of liabilities
of the acquiree at acquisition date or closing period of the merge
(6) Other note:
2. Business combination under the same control
(1) Business combination under the same control during the reporting period
In RMB
Income of the Net profit of the
Proportion Basis for mergee from the mergee from the Net profit of
Basis for Income of the
of equity business beginning of the beginning of the the mergee
Name of Merger determining mergee in the
acquired in merger under current current in the
the mergee date the merger comparison
business the same combination combination comparison
date period
merger control period to the period to the period
merger date merger date
Under the
control by Complete
Hangzhou the
New Steam Turbine industrial
November
Energy 80.775% Group before and 149,458,863.67 7,395,005.14 103,653,434.98 1,078,850.05
9,2021
Company and after the commercial
merger and change
such control is registration
not temporary
Sales 30.00% The same as November The same 188,610,844.58 8,432,280.45 221,357,395.87 8,621,258.15
211
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Company above 11,2021 as above
China
Mechanical The same as November The same
55.00% 3,614,549.00 759,480.49 2,575,133.31 344,026.48
Institute above 23,2021 as above
Company
Renchuang The same as November The same
40.00% 597,931.22 460,570.72
Company above 23,2021 as above
Hangfa The same as November The same
85.00% 182,619,803.38 -46,185,900.45 290,563,893.08 7,873,048.96
Company above 9,2021 as above
Other note：
[Note] (1) Before the merger date, the Company held 15% equity of New Energy Company, and in the current
period, 80.775% equity was acquired through enterprise merger under the same control, while 4.225% equity was
acquired through minority equity acquisition, and 100% equity of New Energy Company was held in total on the
merger date;
(2) Before the merger date, the Company held 45.60% equity of the Company, and in the current period, 40%
equity was acquired through enterprise merger under the same control. On the merger date, 85.60% equity of
Ranchuang Company was held in total;
(3) In the current period, Zhongneng Company, a subsidiary company, acquired 85% equity of Hangfa Company
through enterprise merger under the same control, and acquired 15% of minority equity at the same time. 100%
equity of Hangfa Company was held in total on the merger date.
（2）Combination cost
In RMB
Items New Energy Sales Company China Ranchuang Hangfa Company
Company Mechanical
Institute
Company
Merger cost 20,608,543.31 28,200,000.00 1,390,093.91 21,867,906.69 238,101,172.96
Cash 20,608,543.31 28,200,000.00 1,390,093.91 10,139,132.68 238,101,172.96
Book value of equity acquired 11,728,774.01
before the merger date
（3）Book value of the assets and liabilities of the mergee at the merger date
In RMB
Items New Energy Company Sales Comapny China Mechanical Institute
Company
Merger date End of last period Merger date End of last period Merger date End of last period
Assets
Monetary fund 33,589,914.95 40,569,332.78 15,501,453.30 20,033,191.99 1,003,348.30 1,185,634.20
Notes 488,000.00
receivable
Account 56,243,377.98 35,098,137.82 54,812,233.58 43,427,205.04 1,961,924.08 242,457.32
212
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
receivable
Financing 23,565,800.00 33,022,737.80 2,702,555.00 1,500,000.00
of receivables
Prepayments 10,087,834.14 8,699,648.50 1,333,702.76 392,444.61 366,380.00
Other account 2,409,988.99 1,150,090.93 281,078.18 545,692.19
receivable
Inventories 16,527,789.94 13,741,179.88 1,094,527.22 1,052,440.13
Contract assets
Other current 1,118,383.61 1,104,147.21 279,176.20 291,503.72 36,606.61
asset
Long-term 167,541,093.21 242,241,093.20 -
receivable
Other
non-current
financial assets
Property 13,989,564.41 14,897,525.04
investment
Fixed assets 5,448,177.71 14,814,604.89 17,937,519.22 18,166,503.25 3,901.86 6,787.49
Construction in 656,954.01 355,883.13
progress
Intangible assets 424,106.34 467,221.39 4,797,285.32 4,891,873.62
Deferred income 15,261,735.86 20,035,173.46 846,472.47 560,115.12
tax asset
Liabilities
Short-term loans
Notes payable 46,963,029.38 31,791,800.73
Account payable 24,676,627.21 32,643,315.77 57,145,994.47 48,891,509.41 161,100.00 280,000.00
Advance 40,361,031.90 64,774,760.16 1,227,930.22 1,061,520.22
receipts
Contract
liabilities
Employees’ 302,650.49 3,716,383.27 942,334.02 831,364.51
wage payable
Tax payable 1,691,359.83 52,528.77 2,189,430.49 2,971,566.35 19,404.61 16,676.48
Other 242,284,362.54 309,715,360.29 1,079,554.51 936,979.75
account payable
Other current 3,827,183.32 3,532,265.95
liability
Long-term
213
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
payable
Expected
liabilities
Deferred income 5,908,796.29 6,615,236.38
Net assets -27,888,041.94 -35,283,047.08 45,738,481.67 44,806,201.22 2,788,669.63 2,029,189.14
Less：Minority
shareholders’ -1,178,269.77 -1,490,708.74 32,016,937.17 31,364,340.85 1,254,901.33 913,135.11
equity
Net assets
-26,709,772.17 -33,792,338.34 13,721,544.50 13,441,860.37 1,533,768.30 1,116,054.03
obtained
（Continued）
Items Ranchuang Company Hangfa Company
Merger date End of last period Merger date End of last period
Assets
Monetary fund 40,563,903.64 47,896,082.84 40,752,363.53 60,344,413.02
Notes receivable
Account receivable 53,067,036.69 158,702,565.77
Financing of receivables 13,601,386.25 14,412,623.99
Prepayments 48,800.00 5,337,181.82 7,986,176.84
Other account receivable 855.00 12,862,762.67 4,416,041.94
Inventories 149,314,789.83 120,027,461.76
Contract assets 56,486,319.68
Other current asset 96,000.00 255,511.19
Long-term receivable
Other non-current financial 137,760.74 137,760.74
assets
Property investment 6,979,407.17 7,356,528.53
Fixed assets 50,317.99 54,583.23 158,287,888.57 167,896,233.80
Construction in progress
Intangible assets 35,928,778.95 36,753,683.25
Deferred income tax asset 11.25
Liabilities
Short-term loans 36,052,680.83 36,054,863.62
Notes payable 36,380,770.82 34,650,000.00
Account payable 189,733,165.45 193,512,312.79
Advance receipts 533,345.79 51,998,565.24
214
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Contract liabilities 54,594,257.80
Employees’ wage payable 30,156.66 7,553,182.91 9,334,140.88
Tax payable 12,615.31 15,023.86 8,933,134.62 13,099,758.45
Other account payable 254,777.02 125,397.98 3,166,487.61 3,686,131.70
Other current liability 7,097,253.51
Long-term payable 2,023,928.32 2,023,928.32
Expected liabilities 6,366,270.01
Deferred income 15,375,833.65 23,456,689.39 128,333,278.75 135,659,479.90
Net assets 24,970,995.65 24,373,064.43 52,083,919.48 98,269,819.93
Less：Minority shareholders’
3,595,823.37 3,509,721.28 7,812,587.92 14,740,472.99
equity
Net assets obtained
44,271,331.56 83,529,346.94
21,375,172.28 20,863,343.15
3. Counter purchase
Basic information of trading, the basis of transactions constitute counter purchase, the retain assets , liabilities of
the listed companies whether constituted a business and its basis, the determination of the combination costs, the
amount and calculation of adjusted rights and interests in accordance with the equity transaction process.
4. The disposal of subsidiary
Whether there is a single disposal of the investment to subsidiary and lost control
□ Yes √No
Whether there are multiple transactions step by step dispose the investment to subsidiary and lost control in
reporting period
□ Yes √ No
5. Other reasons for the changes in combination scope
Notes to reasons for the changes in combination scope (Newly established subsidiary and subsidiary of
liquidation) and relevant information:
（1）Increased scope of consolidation：
Name Ways to obtain Time of equity Subscribed capital Funded ratio
equity acquisition contribution
Anhui Casting Newly established 2021.11.25 67 million yuan 67.00%
Compay
Note: On November 25, 2021, the subsidiary Casting and Forging Company and Wuhu Fanchang Chungu Industrial
215
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Investment Fund Co., Ltd. jointly invested in the establishment of Anhui Casting Company. As of December 31,
2021, the investors have not paid their capital contributions, and Anhui Casting & Forging Company has not yet
started operations
Reduced scope of consolidation：
Equity disposal Equity disposal Net assets on disposal Net profit from opening to
Name
method point date disposal date
Kunming Hangzhong Steam Turbine Cancelled 2021.11.25 7,825,445.34 3,355,286.33
Technology Service Co., Ltd.
Shijiazhuang Hangneng Steam Turbine Cancelled 2021.12.15 6,224,126.00 1,136,869.87
Technology Service Co., Ltd.
Urumqi Hangzhongneng Steam Turbine Cancelled 2021.12.31 4,271,883.05 -90,645.42
Technology Service Co., Ltd.
Tangshan Hangneng Steam Turbine Cancelled 2021.12.1 4,389,495.50 101,775.52
Technology Service Co., Ltd.
Guangxi Hangzhongneng Steam Turbine Cancelled 2021.12.28 2,520,015.55 23,134.73
Technology Service Co., Ltd.
Jilin Hangzhongneng Steam Turbine Power Cancelled 2021.12.31 3,775,367.90 1,108,026.30
Technology Service Co., Ltd.
Chengdu Hangzhongneng Technology Co., Cancelled 2021.12.29 570,141.94 -496,261.90
Ltd.
Luoyang Hangqi Steam Turbine Technology Cancelled 2021.12.31 4,516,655.94 940,047.48
Service Co., Ltd.
Heavy Industry Co.[Note] M&A 2021.12.10 1,006,529,090.99 2,106,291.93
[Note] Due to the needs of business development, the Company signed a Merger Agreement with its subsidiary
Hangzhou Steam Turbine Heavy Industry Co., Ltd., which was absorbed and merged on September 30, 2021 as the
base date, and whose legal person status was cancelled.
6.Other
IX. Equity in other entities
1. Equity in subsidiary
(1) The structure of the enterprise group
Name of the Main business Share proportion %
Reg. Add. Business property Way of obtain
subsidiaries location
Direct Indirect
Auxiliary Hangzhou Hangzhou
Manufacturing 87.53% Incorporation
Machine Co. Zhejiang Zhejiang
Packaged Hangzhou Hangzhou
Technologies Co. Zhejiang Commerce 75.86% Incorporation
Zhejiang
216
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Hangzhou Hangzhou
Machinery Co. Manufacturing 52.00% Incorporation
Zhejiang Zhejiang
Hangzhou Hangzhou
Turbine Co. Commerce 100.00% Incorporation
Zhejiang Zhejiang
Zhongneng Hangzhou Hangzhou
Manufacturing 60.83% Incorporation
Company
Zhejiang Zhejiang
Hangzhou Hangzhou
Casing Company Manufacturing 38.03% Incorporation
Zhejiang Zhejiang
Business
New Energy Hangzhou Hangzhou Construction consolidation
100.00%
Company business under the same
Zhejiang Zhejiang
control
Business
Hangzhou Hangzhou consolidation
Sales Company Transportation 30.00%
under the same
Zhejiang Zhejiang industry
control
Business
China Mechanical
Hangzhou Hangzhou consolidation
Institute Commerce 55.00%
under the same
Company Zhejiang Zhejiang
control
Business
Ranchuang Hangzhou Hangzhou consolidation
Commerce 85.60%
Company under the same
Zhejiang Zhejiang
control
Notes: holding proportion in subsidiary different from voting proportion:
Basis of holding half or less voting rights but still been controlled investee and holding more than half of the
voting rights not been controlled investee:
1)In December 2018, the subsidiary Casting Company introduced external strategic investors, leading to a decrease
in the shareholding ratio of the Company from 51% to 38.03%. Since the Company still held more than 1/3 of shares
and took three seats in the board of five directors, it still had power of control over the Casting Company.
2)On November 11, 2021, the Company acquired 30% equity of the Sales Company. According to the Articles of
Association of the Sales Company and the resolution of the General Meeting of shareholders, the Board of Directors
of the Sales Company had five board seats, and all five directors were appointed by the Company and had control
over the Sales Company.
Significant structure entities and controlling basis in the scope of combination:
Basis of determine whether the Company is the agent or the principal:
Other note:
(2) Significant not wholly owned subsidiary
In RMB
217
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Gains/loss of the period Dividend announced in Balance of equity of
Share portion of minor
Name of the subsidiaries attributable to minor the period to minor minor shareholders at
shareholders
shareholders shareholders end of period
Auxiliary Machine Co. 12.47% 10,545,528.77 9,976,000.00 35,755,820.16
Packaged Technologies
24.14% 5,413,676.55 8,918,370.00 30,367,111.09
Co.
Machinery Co. 48.00% 35,647,662.93 28,800,000.00 94,513,474.59
Zhongneng Company 39.17% -235,636.95 20,886,000.00 25,050,979.21
Casing Company 61.97% 17,436,215.99 173,952,292.74
Sales Company 70.00% 7,603,322.32 7,500,000.00 33,717,663.17
China Mechanical
45.00% 339,753.35 1,252,888.46
Institute Company
Ranchuang Company 14.40% 84,754.46 2,952,475.74
Holding proportion of minority shareholder in subsidiary different from voting proportion:
Other note:
(3) The main financial information of significant not wholly owned subsidiary
In RMB
End of term Beginning of term
Subsidia
Non-curr Non-curr Non-curr Non-curr
ries Current Total of Current Total of Current Total of Current Total of
ent ent ent ent
Name assets assets liabilities liability assets assets liabilities liability
assets liabilities assets liabilities
Auxiliar
y 733,029, 78,861,8 811,891, 491,555, 491,555, 773,794, 78,925,5 852,720, 533,228, 3,723,41 536,951,
Machine 315.32 33.88 149.20 820.43 820.43 591.67 39.42 131.09 574.23 9.52 993.75
Co.
Package
d 295,135, 7,257,03 302,392, 176,622, 176,622, 335,835, 7,867,34 343,702, 206,940, 206,940,
Technolo 373.75 4.74 408.49 637.98 637.98 538.47 5.88 884.35 629.93 629.93
gies Co.
Machine 287,173, 24,884,2 312,057, 113,114, 2,040,64 115,154, 278,552, 27,278,0 305,830, 121,123, 2,069,68 123,192,
ry Co. 778.22 11.26 989.48 270.68 6.71 917.39 028.79 24.91 053.70 257.40 8.65 946.05
Zhongne
ng 1,543,40 271,311, 1,814,71 1,464,52 289,548, 1,754,07 1,421,40 281,914, 1,703,32 1,166,02 138,013, 1,304,03
Compan 8,288.89 148.18 9,437.07 8,610.29 659.78 7,270.07 7,711.35 204.52 1,915.87 3,046.44 408.22 6,454.66
y
Casing
447,032, 163,458, 610,490, 278,724, 36,696,7 315,421, 413,618, 148,061, 561,680, 271,003, 22,037,3 293,040,
Compan
301.14 336.65 637.79 887.30 12.55 599.85 493.18 570.82 064.00 586.47 40.00 926.47
y
218
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Sales
83,054,5 39,677,9 122,732, 68,682,2 5,882,18 74,564,4 67,242,4 38,871,9 106,114, 54,692,9 6,615,23 61,308,1
Compan
37.49 64.56 502.05 31.72 0.09 11.81 77.68 00.16 377.84 40.24 6.38 76.62
y
China
Mechani
cal 2,789,44 2,793,08 2,319,07 2,325,86 296,676. 296,676.
3,639.53 8,885.14 8,885.14 6,787.49
Institute 2.19 1.72 8.13 5.62 48 48
Compan
y
Ranchua
ng 39,613,1 47,917.4 39,661,0 160,857. 14,538,5 14,699,3 47,945,7 54,594.4 48,000,3 120,578. 23,506,6 23,627,2
Compan 04.79 0 22.19 68 27.49 85.17 37.84 8 32.32 50 89.39 67.89
y
In RMB
Amount of current period Amount of previous period
Subsidiaries
Cash flow for Cash flow
Name Total Misc Total Misc
Turnover Net profit business Turnover Net profit for business
Gains Gains
activities activities
Auxiliary
84,567,191.4 84,567,191.4 -24,601,989.6 73,412,199.7 73,412,199.7 69,737,086.3
Machine 604,581,929.89 641,491,513.58
3 3 4 1 1 1
Co.
Packaged
19,607,516.0 19,607,516.0 33,258,647.0 33,258,647.0 56,544,644.6
Technologie 275,556,715.10 -9,009,596.18 231,015,559.55
9 9 1 1 9
s Co.
Machinery 74,265,964.4 74,265,964.4 73,475,561.5 73,475,561.5 59,196,312.5
305,270,504.99 56,947,908.11 306,725,335.41
Co. 4 4 4 4 1
Zhongneng 1,374,266,364.9 138,098,467.8 1,295,383,862.8 65,058,832.5 64,510,108.1 31,575,303.7
5,949,744.78 5,641,684.11
Company 5 7 8 4
1 2
Casing 28,136,543.4 28,136,543.4 40,178,237.5 40,178,237.5 44,328,699.1
502,362,854.32 11,414,695.55 440,567,136.33
Company 7 7 4 4 1
Sales 10,861,889.0 10,861,889.0 20,611,704.1
227,668,616.83 30,147,532.45 221,357,395.87 8,621,258.15 8,621,258.15
Company 2 2 6
China
Mechanical
3,614,549.00 755,007.44 755,007.44 -57,796.60 2,575,133.31 344,026.48 344,026.48 -145,641.31
Institute
Company
Ranchuang 24,948,418.5
588,572.59 588,572.59 -8,264,828.05 460,570.72 460,570.72
Company 3
219
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Other note：
(4) Significant restrictions of using enterprise group assets and pay off enterprise group debt
(5) Provide financial support or other support for structure entities incorporate into the scope of
consolidated financial statements
Other note：
2. The transaction of the Company with its owner’s equity share changed but still controlling the subsidiary
(1) Note to owner’s equity share changed in subsidiary
Name Change time Shareholding ratio before Shareholding ratio after change
change
New Energy Company 2021.11.9 95.775% 100.00%
Hangfa Company 2021.11.9 85.00% 100.00%
Packaged Technologies Co 2021.11.12 70.86% 75.86%
(2) The transaction’s influence to equity of minority shareholders and attributable to the owner's equity of the
parent company
In RMB
New Energy Hangfa Company Packaged
Company [Note] Technologies Co
Cost/disposal consideration 1,077,946.08 42,017,854.05 10,200,000.00
--Cash 1,077,946.08 42,017,854.05 10,200,000.00
Total purchase cost/disposal consideration 1,077,946.08 42,017,854.05 10,200,000.00
Less: share of net assets of subsidiaries calculated according to the
-1,178,269.78 7,812,587.92 5,987,536.92
proportion of equity acquired/disposed of
2,256,215.86
Difference 34,205,266.13 4,212,463.08
2,256,215.86
Including: adjustment of capital reserve 20,806,379.28 4,212,463.08
Adjustment the minority shareholder equity 13,398,886.85
Note: It is due to the acquisition of minority shareholders' equity of Hangfa Company by the non-wholly-owned
subsidiary Zhongneng Company.
3. Equity in joint venture arrangement or associated enterprise
(1) Significant joint venture arrangement or associated enterprise
Shareholding ratio (%) Accounting
Name of joint treatment
Domicile of
venture or Registered place Business nature methods for the
primary operation Directly Indirect
associate investments in
joint ventures or
220
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
associates
Notes to holding proportion of joint venture or associated enterprise different from voting proportion:
Basis of holding less than 20% of the voting rights but has a significant impact or holding 20% or more voting
rights but does not have a significant impact:
（2）Major joint ventures and associates
In RMB
Closing balance/December 31 2021 Opening balance/December 31, 2020
Other note
(3) Main financial information of significant associated enterprise
In RMB
Amount of current period Amount of previous period
Other note
(4) Summary financial information of insignificant joint venture or associated enterprise
In RMB
Amount of current period Amount of previous period
Joint venture： -- --
The total of following items according to the
-- --
shareholding proportions
Associated enterprise: -- --
The total of following items according to the
-- --
shareholding proportions
Other note
(5) Provide financial support or other support for structure entities incorporate into the scope of consolidated
financial statements
(6) The excess loss of joint venture or associated enterprise
In RMB
The cumulative recognized The derecognized losses or the The no cumulative
Name losses in previous share of net profit in reporting unrecognized losses in reporting
accumulatively derecognized period period
Other note:
(7) The unrecognized commitment related to joint venture investment
(8) Contingent liabilities related to joint venture or associated enterprise investment
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
4. Significant common operation
Main operating place Proportion /share portion
Name Registration place Business nature
registration place Directly Indirectly
Note to holding proportion or share portion in common operation different from voting proportion:
Basis of common operation as a single entity, classify as common operation Other notes:
Other note
5. Equity of structure entity not including in the scope of consolidated financial statements
Related notes to structure entity not including in the scope of consolidated financial statements
6.Other
X. Risks related to financial instruments
The objective of the Company’s risk management is to achieve a balance between the risk and gains. Constrain
the negative influence on business operation to the lowest limit, and maximum the interests of shareholders and
other equity holders. With regard to this target, the basic policies of the Company are; locate and analyse the risks,
set appropriate bottom line for risks, and manage and monitor on each risk and constrain them in a certain extent.
Risks attached to financial instruments are mainly credit risks, liquidity risks, and market risks.
The following risk managing policies have been examined and approved by the management:
(I) Credit risks
Credit risks are introduced when one party of the financial instrument failed to exercise its liabilities and then
caused financial loss to another.
1. Credit risk management practice
(1) Evaluation method of credit risk
On each balance sheet date, the company evaluates whether the credit risk of relevant financial instruments
has increased significantly since the initial confirmation. When determining whether the credit risk has increased
significantly since the initial confirmation, the company considers to obtain reasonable and reliable information
without unnecessary extra costs or efforts, including qualitative and quantitative analysis based on historical data,
external credit risk rating and forward-looking information. Based on a single financial instrument or a
combination of financial instruments with similar credit risk characteristics, the company compares the risk of
default of financial instruments on the balance sheet date with the risk of default on the initial confirmation date to
determine the change of default risk of financial instruments during their expected duration.
When one or more of the following quantitative and qualitative criteria are triggered, the company believes
that the credit risk of financial instruments has increased significantly:
1) The quantitative standard is mainly that the probability of default for the remaining duration on the
balance sheet date rises by more than a certain proportion compared with the initial confirmation;
2) Qualitative criteria mainly include significant adverse changes in the debtor's operation or financial
situation, changes in existing or expected technology, market, economic or legal environment, and significant
adverse effects on the debtor's repayment ability of the company.
(2) Definition of default and credit impairment assets
When a financial instrument meets one or more of the following conditions, the company defines the
financial asset as having defaulted, and its criteria are consistent with the definition of having incurred credit
222
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
impairment:
1) The debtor has major financial difficulties;
2) The debtor violates the binding provisions on the debtor in the contract;
3) The debtor is likely to go bankrupt or undergo other financial restructuring;
4) The creditor gives concessions that the debtor will not make under any other circumstances due to
economic or contractual considerations related to the debtor's financial difficulties.
2. Measurement of expected credit loss
Key parameters of expected credit loss measurement include default probability, loss given default and
default risk exposure. The company considers the quantitative analysis and forward-looking information of
historical statistical data (such as counterparty rating, guarantee method, collateral type, repayment method, etc.)
to establish default probability, loss given default and default risk exposure models.
3. Please refer to Notes V (I)3, V (I)4，V (I)7 and V(I)9 of these financial statements for details of the
reconciliation statement of the opening balance and closing balance of the financial instrument loss reserve.
4. Credit risk exposure and credit risk concentration
The company's credit risk mainly comes from monetary funds and receivables. In order to control the
above-mentioned related risks, the company has taken the following measures respectively.
(1) Monetary fund
The company deposits bank deposits and other monetary funds in financial institutions with high credit rating,
so its credit risk is low.
(2) Account receivable
The Company performs credit assessment on the clients on periodic and constant basis. Results suggested by the
assessment are used by the Company to determine clients with higher ranks and to overlook the rest. This was
conducted to avoid risks brought by material bad debts.
As the Company only does business with recognized and reputable third parties, so no collateral is needed.
Credit risks are centralized managed in accordance with customers. As of December 31,2021, the Company has a
characteristic of specific credit risk concentration. 46.36% (December 31, 2020: 43.04%) of the Company's
accounts receivable comes from the top five customers. The Company does not hold any collateral or other credit
enhancement for the balance of accounts receivable.
The maximum credit risk exposure the company is subject to is the book value of each financial asset in the
balance sheet.
(II) Liquidation risks
Liquidation risks are the possibilities of short in cash at fulfilling liabilities of payment or settlement for financial
assets. They may be caused by failing to cash financial assets at fair value instantly; debtors’ failing of paying
debts due; debts due before schedule; or failing of generating expected cash flow.
To handle these risks, the Company adopted multiple measures such as note clearance and bank loans.
Long-term and short-term financing approaches were used to maintain balance between constancy and flexibility.
The Company has obtained credit from multiple banks to satisfy the needs of business operation and capital
output.
Categorizing of financial liabilities on remained period to due
Items End of term
Book value Contract amount not within 1 year 1-3 years Over 3 years
223
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
discounted
Bank loans 439,907,392.45 470,301,376.99 271,803,491.55 93,584,460.78 104,913,424.66
Notes payable 309,404,319.27 309,404,319.27 309,404,319.27
Account payable 1,910,150,188.14 1,910,150,188.14 1,910,150,188.14
Other payable 434,578,338.13 434,578,338.13 434,578,338.13
Lease liabilities[Note] 31,172,013.29 34,120,327.22 9,809,447.46 17,078,896.12 7,231,983.64
Long-term payable
[Note]
Subtotal 3,125,212,251.28 3,158,554,549.75 2,935,745,784.55 110,663,356.90 112,145,408.30
(Continued)
Items Beginning of term
Book value Contract amount not within 1 year 1-3 years Over 3 years
discounted
Bank loans 275,402,275.92 282,654,273.20 259,420,504.31 23,233,768.89
Notes payable 297,166,104.48 297,166,104.48 297,166,104.48
Account payable 1,343,959,443.91 1,343,959,443.91 1,343,959,443.91
Other payable 389,470,779.78 389,470,779.78 389,470,779.78
Lease liabilities[Note]
Long-term payable 156,163,666.66 161,300,000.00 28,860,000.00 56,748,000.00 75,692,000.00
[Note]
Subtotal 2,462,162,270.75 2,474,550,601.36 2,318,876,832.47 79,981,768.89 75,692,000.00
[Note] Lease liabilities include non-current liabilities within one year-lease liabilities due within one year.
(III) Market risks
Market risks are those brought by change of fair value or expectable cash flow of financial instruments due to
change of market prices, mainly interest risks and exchange rate risks.
1. Interest risks
Interest risks are those brought by change of fair value or expectable cash flow of financial instruments due to
change of interest rates, mainly regards the loans at floating interest rates.
Fixed-rate interest-bearing financial instruments expose the Company to fair value interest rate risks, while
floating-rate interest-bearing financial instruments expose the Company to cash flow interest rate risks. The
Company determines the ratio of fixed interest rate to floating interest rate financial instruments according to the
market environment, and maintains an appropriate portfolio of financial instruments through regular review and
monitoring. The cash flow interest rate risk faced by the Company is mainly related to the bank borrowings with
floating interest rates.
As of December 31, 2021, the company's bank borrowings with floating interest rate were RMB
189,600,000.00 (December 31, 2020: RMB22,600,000.00). Under the assumption that other variables remain
unchanged, assuming that the interest rate changes by 50 benchmark points, there will be no significant impact on
the company's total profits and shareholders' equity.
2. Foreign currency risks
224
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Foreign currency risks (exchange rate risks) are those caused by change of fair value or expectable cash flow
of financial instruments due to fluctuation of exchange rates. These risks are mainly related to foreign currency
assets and liabilities. The Company operates in mainland China and mostly uses RMB as standard currency,
therefore no major risks regarding exchange rates. For details of foreign currency assets and liabilities, please go
to the descriptions in the notes to the consolidated financial statements.
Details of the company's foreign currency monetary assets and liabilities at the end of the period are
described in note V (V) 2 to the Financial Statements.
XI. The disclosure of the fair value
1. Closing fair value of assets and liabilities calculated by fair value
In RMB
Closing fair value
Items Fair value measurement Fair value measurement Fair value measurement
Total
items at level 1 items at level 2 items at level 3
I. Consistent fair value
-- -- -- --
measurement
一Consistent fair value
measurement
1. Transactional
financial assets and other
2,645,259.82 972,792,533.96 975,437,793.78
non-current financial
assets
Financial assets
classified as fair value 2,645,259.82 972,792,533.96 975,437,793.78
through profit or loss
Financing product 958,000,000.00 958,000,000.00
Equity instrument
2,645,259.82 14,792,533.96 17,437,793.78
investment
2. Financing receivable 816,653,211.21 816,653,211.21
3. Other equipment
3,485,440,140.92 3,485,440,140.92
instrument investment
Total liabilities of
consistent fair value 3,488,085,400.74 1,789,445,745.17 5,277,531,145.91
measurement
II. Non-continuous fair
-- -- -- --
value measurement
225
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
2. Market price recognition basis for consistent and inconsistent fair value measurement items at level 1
The company adopts unadjusted quotations on active markets for the same assets that can be obtained on the
measurement date.
3. Continuous and non-continuous Second-level fair value measurement items, using valuation techniques and qua
litative and quantitative information on important parameters
4. Continuous and non-continuous third-level fair value measurement items, using valuation techniques and qualit
ative and quantitative information on important parameters
1). For held short-term wealth management products with floating income and equity instrument investments
, the company adopted valuation techniques for fair value measurement, mainly using a discounted future cash flo
w model.
2). Financing of receivables means that the measurement mode held by the company is bills receivable that ar
e measured at fair value and whose changes are included in other comprehensive income. Cost represents the best
estimate of fair value, so the cost is used to confirm its fair value .
5. Sensitiveness analysis on unobservable parameters and adjustment information between opening and closing
book value of consistent fair value measurement items at level 3
6. Explain the reason for conversion and the policy governing when the conversion happens if conversion happens
among consistent fair value measurement items at different levels
7. Changes in the valuation technique in the current period and the reason for change
8. Fair value of financial assets and liabilities not measured at fair value
9.Other
XII. Related party and related Transaction
1. Information related to parent company of the Company
Name of the parent Shareholding ratio in Voting ratio in the
Registered place Business nature Registered capital
company the Company (%) Company (%)
Hangzhou Steam
Hangzhou China Manufacturing 800 million yuan 63.64% 63.64%
Turbine Group
Notes
Hangzhou Municipal Government State-owned Asset Supervisory Committee is the ultimate controller of the
Company.
Other note：
2.Subsidiaries of the enterprise
For details of the subsidiary, see note VII to the financial statements.
226
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
3. Information on the joint ventures and associated enterprises of the Company
The details of significant joint venture and associated enterprise of the Company
Information on other joint venture and associated enterprise of occurring related party transactions with the
Company in reporting period, or form balance due to related party transactions in previous period:
Name of joint venture or associate Relationship with the company
Other note
4.Other related parties of the Company
Name of other related parties Relationship with the Company
Hangzhou Capital The parent company of Hangzhou Steam Turbine Group
Hangzhou Steam Turbine Compressor Co., Ltd. A subsidiary enterprise of Hangzhou Steam Turbine Group
Hangzhou Xiangjiang Technology Co., Ltd. A subsidiary enterprise of Hangzhou Steam Turbine Group
Hangzhou Guoyu Property Management Co., Ltd [Note 1] A subsidiary enterprise of Hangzhou Steam Turbine Group
Hangzhou Oxygen Machine Group Co., Ltd Affiliated enterprise of Hangzhou Capital
Hangzhou Oxygen Turbine Machinery Co., Ltd Affiliated enterprise of Hangzhou Oxygen
Zhumadian Hangzhou Oxygen Gas Co. Ltd Affiliated enterprise of Hangzhou Oxygen
Hangzhou Oxyen Expander Machine Co., Ltd. Affiliated enterprise of Hangzhou Oxygen
Hangzhou Guoyu International Trade Co., Ltd. Affiliated enterprise of Hangzhou Capital
Greenesol power systems PVT Ltd. The company's shareholding enterprises
Hangzhou Bank[Note 2] The company's shareholding enterprises
Hangzhou Heat Group Limited Yang Yongming serves as a director of the company
Other note
[Note 1] Formerly known as Hangzhou Steam Turbine Power Technology Co., Ltd., it was renamed on January 13,
2022.
[Note 2] On June 17, 2020, the Company withdrew from the Board of Directors of Hangzhou Bank Co., Ltd.
5.Related transaction
(1) Sale of goods/rendering of labor services/labor service offering
Purchase of goods and service
In RMB
Content of related Amount of current Amount of Over the trading Amount of last
Related parties
transaction limit or not? period
period previous period
Hangzhou Oxygen Turbine Parts, dynamic balance
3,948,672.19 Yes
Machinery Co., Ltd processing costs
227
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
HSTG Warehousing 764,983.49 No
Leaf maintenance and
Zhongrun Company [Note] 779,192.90
processing
Subtotal 4,713,655.68 779,192.90
[Note] Zhongrun Company, formerly a joint venture, has been included in the scope of the consolidated financial
statements of the Company since January 2021, the same below.
Related transactions regarding sales of goods or providing of services
In RMB
Same period of last
Related parties Subjects of the related transactions Current term
term
Hangzhou Oxygen Turbine
Turbine 8,654,867.26
Machinery Co., Ltd
Hangzhou Guoyu International Trade
Material sales 2,722,604.67
Co., Ltd.
Greenesol power systems PVT Ltd. Parts 1,588,105.14 2,132,934.52
Hangzhou Steam Turbine Group Training fees, labour insurance costs 460,725.47 29,867.66
Zhumadian Hangzhou Oxygen Gas
Technical service 11,320.75
Co. Ltd
Hangzhou Oxygen Machine Group
Parts 1,327.43
Co., Ltd
Subtotal 13,438,950.72 2,162,802.18
(2) Related trusteeship/contract
Lists of related trusteeship/contract
In RMB
Name of the Name of the Income
entruster/Contract entrustee/Contrac Type Initial date Due date Pricing basis recognized in the
ee tor reporting period
Note
Lists of entrust/contractee：
In RMB
Name of the Name of the Charge
entruster/Contract entrustee/Contrac Type Initial date Due date Pricing basis recognized in the
ee tor reporting period
Notes:
(3) Information of related lease
The Company was lessor:
228
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
In RMB
The lease income confirmed in The lease income confirmed in
Name of lessee Category of leased assets
this year last year
HSTG House and Building 1,077,902.81
Subtotal 1,077,902.81
The Company was lessee：
In RMB
The lease income confirmed in
Lessor Category of leased assets Category of leased assets
this year
The Company was lessee：
① Year 2021
Simplified rental expenses for
The rent paid (excluding the
short-term leases and
simplified rent for short-term
low-value asset leases and Increased Recognized
Types of leased leases and low-value asset leases
Name of lessor variable lease payments that right-to-use interest
assets and the variable lease payment
are not included in the assets expense
not included in the measurement
measurement of lease
of lease liabilities)
liabilities
House and
HSTG 2,601,743.42
Building
Hangzhou
Xiangjiang House and
668,205.53 130,795.52
Technology Co., Building
Ltd.
② Year 2020
Name Type Amount
HSTG Land use right 1,851,893.61
HSTG Engineering Equipment 1,823,008.85
HSTG House and Building 4,502,388.49
Hangzhou Xiangjiang Technology Co., Ltd. House and Building 95,457.93
Subtotal 8,272,748.88
（4）Related-party guarantee
The Company was guarantor
In RMB
Guarantor Guarantee amount Start date End date Execution
229
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
accomplished or not
The Company was secured party
In RMB
Execution
Guarantor Guarantee amount Start date End date
accomplished or not
The Company was secured party
(1) Loan guarantee
Guarantor The secured Execution accomplished or not
Guarantee amount Start date End date
party
HSTG The Company 100,000,000.00 2021.11.3 2022.11.1 No
HSTG The Company 50,000,000.00 2021.6.21 2022.6.4 No
HSTG Hangfa 10,000,000.00[注] 2021.5.24 2022.5.21 No
Company
[Note] This loan is counter-guaranteed by Hangfa Company with mechanical equipment as collateral
(2) Guarantee
Guarantor Issuer Bank Guarantee amount as Currency
of the end of the
period
HSTG Hangfa Company Ningbo Bank Hangzhou Chengdong 3,207,650.00 RMB
Sub-branch
(3) Inter-bank lending of capital of related parties
In RMB
Amount borrowed and
Related party Initial date Due date Notes
loaned
Borrowed
Loaned
（5）Inter-bank lending of capital of related parties
Related party Amount Year-beginning Increase Decrease Balance in year-end Including：Pay
interest
HSTG 309,254,400.43 11,729,618.51 80,984,018.94 240,000,000.00 11,729,618.51
（6）Related party asset transfer and debt restructuring
In RMB
Related party Content Current term Same period of last term
（7） Remunerations of key managements
In RMB
230
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Items Current term Same period of last term
Remunerations of key managements 11,055,298.35 7,318,444.28
(8) Other related transactions
(1) Service and power supply
1) HSTG. provides property management services for its subsidiary which is Complete Technology
Corporation, of which the fee of this period incurred in the property management is RMB3,176,465.50.
2) HSTG supplies water , power and newspaper service fees to the Company and some of the subsidiaries
amounted to RMB 9,561,517.13 this period. The Company and its subsidiaries paid RMB 211,717.59 for utilities
and newspaper service fees in the current period.
(2) Purchase of fixed assets
The Company purchased fixed assets such as machinery and office equipment from Hangzhou Steam Turbine
Group for RMB 125,771.56.
(3) Using of trademark
The Company pays RMB1,698,113.21 to HSTG for using of the registered trademark.
(4) Expenses paid on behalf the Company
During the current period, HSTG advanced the payment of RMB 1,678,935.35 salaries for the company.
(5) Equity purchase
1) Business merger under the same control
①In October 2021, the Company acquired 80.775% equity of New Energy Company held by Hangzhou Steam
Turbine Group and its subsidiary Hangzhou Guoyu Property Management Co., Ltd. at a price of RMB
20,608,543.31 and 30.00% equity of the Sales Company held by Hangzhou Steam Turbine Group at a price of RMB
28,200,000.00. The subsidiary Zhongneng Company acquired 85.00% equity of Hangfa Company held by
Hangzhou Steam Turbine Group at a price of RMB 238,101,172.96. Besides, because Zhongneng Company paid
the equity purchase in two phases, it paid the interest expense (including tax) of RMB 412,510.28 to Hangzhou
Steam Turbine Group in this period.
②In November 2021, the Company acquired 55.00% equity of China mechanical and Electrical Institute -HSTG
(Hangzhou) United Institutes Co., Ltd. held by Hangzhou Steam Turbine Group and 40.00% equity of Ranchuang
Company at the prices of RMB 1,390,093.91 and RMB 10,139,132.68 respectively.
2) Acquisition of minority shareholders' equity
In October 2021, the Company acquired 5% equity of the Packaged Company held by Hangzhou Guoyu
Property Management Co., Ltd. at a price of RMB 10,200,000.00.
(6) Entrusted financial management and other
1) In this period, the Company signed an entrusted financial management contract with Hangzhou Bank Co.,
Ltd., with an accumulated financial management amount of RMB 1,322,000.00.00 from January to June 2021,and
Received financial management income of RMB 20,678,311.90.
2) In this period, the Company applied to Hangzhou Bank Co., Ltd. for bill discount, with an accumulated
discount amount of RMB 198,770,549.60 and a discount interest of RMB 2,088,451.85 paid from January to June
2021.
231
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
3) From January to June 2021, the Company subscribed for and reduced 6,875,720 convertible bonds with a
value of RMB 687,572,000.00 from Hangzhou Bank Co., Ltd., and obtained an investment income of RMB
45,379,752.00.
6. Receivables and payables of related parties
（1）Receivables
In RMB
End of term Beginning of term
Name Related party Bad debt
Book balance Book balance Bad debt provision
provision
Account
Greenesol power systems PVT Ltd. 13,490,558.24 13,490,558.24 13,806,255.54 13,806,255.54
receivable
Hangzhou Oxygen Group Co., Ltd 2,460,000.00 2,460,000.00 5,385,000.00 5,385,000.00
Hangzhou Oxyen Turbine
9,225,000.00 9,225,000.00 9,550,500.00 9,485,400.00
Machinery Co., Ltd.
HSTG 835,349.87 486,348.07 830,013.67 600,569.44
Hangzhou Steam Turbine
59,000.00 59,000.00 59,000.00 59,000.00
Compressor Co., Ltd’
Zhumadian Hangzhou Oxygen Gas
14,800.00 740.00
Co. Ltd
Hangzhou Heat Group Limited 8,937.60 8,937.60 8,937.60 8,937.60
Subtotal 26,078,845.71 25,729,843.91 29,654,506.81 29,345,902.58
Financing Hangzhou Oxyen Turbine
3,000,000.00
receivable Machinery Co., Ltd.
Subtotal 3,000,000.00
Hangzhou Xiangjiang Technology
Other receivable 601,384.98 60,138.50 601,384.98 30,069.25
Co., Ltd.
HSTG 462,761.45 34,304.70 242,960.55 12,148.03
Subtotal 1,064,146.43 94,443.20 844,345.53 42,217.28
Hangzhou Oxyen Turbine
Contract assets 489,000.00 24,450.00
Machinery Co., Ltd.
Subtotal 489,000.00 24,450.00
（2）Payables
In RMB
Name Related party Amount at year Amount at year beginning
Account payable Greenesol power systems PVT Ltd. 1,835,287.07 1,878,235.27
HSTG 230,568.42 230,568.42
Hangzhou Oxyen Turbine Machinery 497,585.09
232
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Co., Ltd.
Zhongrun Company 243,311.12
Subtotal 2,563,440.58 2,352,114.81
Contract liabilities HSTG 29,652,336.28 16,378,000.00
Hangzhou Oxyen Group Co., Ltd. 7,404,000.00
Greenesol power systems PVT Ltd. 353,288.27 145,052.57
Hangzhou Oxyen Expander Machine
85,800.00
Co., Ltd.
Hangzhou Steam Turbine Compressor
700.00 700.00
Co., Ltd’
Subtotal 37,496,124.55 16,523,752.57
Other payable HSTG 240,448,987.71 309,736,234.05
Subtotal 240,448,987.71 309,736,234.05
7. Related party commitment
8.Other
XIII. Stock payment
1. The Stock payment overall situation
√ Applicable □ Not applicable
In RMB
Total amount of various equity instruments granted by the company
19.44 million shares
during the current period
Total amount of various equity instruments that the company exercises
0.00
during the period
Total amount of various equity instruments that have expired in the
0.00
current period
The scope of executive price of the company’s outstanding share options
[Note]
at the end of the period and the remaining term of the contract
The scope of executive price of the company’s other equity instruments at
0
the end of the period and the remaining term of the contract
Other note
[Note] The range of exercise price of other equity instruments issued by the Company at the end of the period and
the remaining term of the contract
Items Exercise price Remaining term of contract
The first restriction lifting period of restricted shares granted for the first time is
First grant of restricted stock in
HK$ 6.825 per share from the first trading day after 24 months from the date of registration of
2021
restricted shares granted for the first time to the last trading day within 36
233
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
months from the date of registration of some restricted shares granted for the
first time; The second restriction lifting period of restricted shares is from the
first trading day after 36 months after the registration of restricted shares
granted for the first time to the last trading day within 48 months after the
registration of some restricted shares granted accordingly; The third restriction
lifting period of the restricted shares is from the first trading day 48 months
after the registration of restricted shares granted for the first time to the last
trading day within 60 months after the registration of some restricted shares
granted accordingly.
The first restriction lifting period of restricted sales is from the first trading day
Partial grant of 2021 restricted after 24 months from the date when the registration the restricted shares is
HK$ 6.825 per share
stock reserved completed accordingly to the last trading day within 36 months from the date
when the registration of the restricted shares is completed accordingly;
2. Other note
(1) Restricted stock source
According to the Proposal on Repurchase of Company's Shares adopted at the 39th session of the 7th Board of
Directors of the Company, the Company plans to repurchase the Company's shares at a price of not more than
HK$ 9.50 per share by means of centralized bidding with self-raised funds, with the repurchase amount of not less
than HK$ 160 million (inclusive) and not more than HK$ 320 million (inclusive). The repurchased shares will all be
used for the Company's equity incentive or employee stock ownership plan.
In 2020, the Company has completed the share repurchase, with a total of 19,551,800 shares repurchased by means
of centralized bidding through the repurchase of special securities account, accounting for 2.59% of the Company's
total share capital. at the highest transaction price of RMB 9.17/share and the lowest transaction price of RMB
7.22/share, with the total accumulated payment amount of HK$ 160,734,718.28 (excluding transaction costs such as
stamp duty and transaction commission), i.e. RMB 144,078,948.09 used accumulatively.
(2) Performance procedure
According to the Proposal on the Company's Restricted Stock Incentive Plan (Draft) in 2020 and its Summary and
Proposal on the Company's , which were reviewed and approved at the 14th meeting of the 8th Board of Directors and the 9th meeting
of the 8th Board of Supervisors respectively, as well as the Proposal on the Company's and its Summary, the Proposal on the Company's and the Proposal on Requesting the General Meeting of Shareholders
to Authorize the Board of Directors to Handle Matters Related to the Restricted Stock Incentive Plan in 2021, which
were reviewed and approved at the 16th meeting of the 8th Board of Directors, the 11th meeting of the 8th Board of
Supervisors and the 2nd Extraordinary General Meeting of Shareholders in 2021 respectively, The employee stock
ownership plan intends to grant 19,551,800 restricted shares, accounting for 2.59% of the Company's total share
capital, of which 18.17 million shares will be granted first, accounting for 2.41% of the Company's total share
capital; 1,381,800 shares will be reserved, accounting for 0.18% of the Company's total share capital, and the
reserved part will account for 7.07% of the total rights granted this time. The incentive object can purchase the
restricted shares granted by the Company at the price of HK$ 6.825 per share.
According to the Proposal on Granting Partial Restricted Shares to Incentive Objects, which was reviewed and
approved at the 20th meeting of the 8th Board of Directors and the 13th meeting of the 8th Board of Supervisors, it
was determined that the granting date of restricted shares would be December 16, 2021, with 1,381,800 shares
234
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
reserved in the incentive plan and 1,380,000 shares actually granted this time.
(3) Incentive object
There are no more than 500 incentive objects in the incentive plan, specifically including: company directors
(excluding independent directors and external directors) and senior managers; Other members of the leading team,
middle managers of the Company and key personnel of the Company.
(4) Grant of restricted stock
1) First grant
The number of participants in the employee stock ownership plan is determined to be 455 based on the actual
signing of the subscription agreement and the final payment by the employees, at HK$6.825 per share,with a total
of 18.06 million shares transferred and a total transfer price of RMB 123,259,500.00. According to the Company's
2021 Restricted Stock Grant Agreement, the RMB subscription amount is calculated according to the central parity
of RMB exchange rate (HK$ 1=RMB 0.8317) announced by the People's Bank of China on September 1, 2021 (the
grant date approved by the board of directors), and the total transfer price is RMB 102,514,926.39.
2) Grant of reserved part
The number of participants in the restricted stock incentive plan is determined to be 37 according to the actual
subscription agreement signed by employees and the final payment at a price of HK$ 6.825 per share, with a total of
1.38 million shares transferred and a total transfer price of HK$ 9,418,500.00. According to the Company's 2021
Restricted Stock Grant Agreement, the RMB subscription amount is calculated according to the central parity of
RMB exchange rate (HK$ 1=RMB 0.81553) announced by the People's Bank of China on December 16, 2021 (the
grant date approved by the board of directors), and the total transfer price is RMB 7,681,069.47.
2. Equity-settled share-based payment
√ Applicable □Not applicable
In RMB
Determination method of the fair value of equity instruments on the The closing price of the company's stock on grant date - grant
grant date price
Determination basis of the number of vesting equity instruments Best estimate of unlocked quantity
Equity-settled share-based payment is included in the accumulated
17,297,907.40
amount of capital reserve
Total amount of fees confirmed by equity-settled share-based
17,297,907.40
payments in the current period
Other note
235
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
3. The Stock payment settled by cash
□ Applicable √ Not applicable
4. Modification and termination of the stock payment
5.Other
XIV. Commitments
1.Significant commitments
Significant commitments at balance sheet date
(1) Outsourcing contracts engaged with large amounts and are under processing or preparation
As of December 31, 2021, Construction contracts and contracts which are performed or ready for being
performed by the Company and its subsidiaries for the sake of plant construction are valued about RMB 7,734.19.
（2）With regard to bank letters of credit opened by the Company and its subsidiaries, the outstanding balance till
December 31, 2021 is as follows:
Name Bank Currency Amount Way of guarantee
The Company ICBC Banshan Branch Yen 34,100,000.00 Credit
The Company ICBC Banshan Branch Euro 14,066,200.00 Credit
The Company ICBC Banshan Branch Pound 7,950,375.00 Credit
The Company ICBC Hangzhou Branch Euro 5,960,000.00 Credit
The Company China CITIC Bank Hangzhou Branch Euro 12,667,129.00 Credit
The Company China CITIC Bank Hangzhou Branch USD 303,000.00 Credit
The Company China CITIC Bank Hangzhou Branch Swedish krona 270,000,000.00 Credit
The Company China Bank Hangzhou Branch Euro 1,624,000.00 Credit
The Company China Bank Hangzhou Branch USD 6,160,000.00 Credit
（3）With regard to bank letters of Guarantee opened by the Company and its subsidiaries, the outstanding balance
till December 31, 2021 is as follows:
Name Bank Currency Amount Way of guarantee
236
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
The Company ICBC Banshan Branch RMB 272,331,640.20 Credit
The Company ICBC Hangzhou Branch RMB 36,016,931.00 Credit
The Company China CITIC Bank Hangzhou Branch RMB 24,599,676.28 Credit
The Company China CITIC Bank Hangzhou Branch USD 1,754,270.00 Credit
The Company China Bank Hangzhou Branch RMB 36,327,836.96 Credit
The Company China Bank Hangzhou Branch USD 6,464,515.00 Credit
Hangfa Company ICBC Xiaoshan Subbranch RMB 6,711,168.00 Mortgage
Hangfa Company Ningbo Bank Hangzhou Chengdong Rmb 3,207,650.00 Guarantee
Subbranch
Hangfa Company Ningbo Bank Hangzhou Chengdong Rmb 3,002,564.00 Credit
Subbranch
Packaged Tech. ICBC Hangzhou Wulin Subbranch RMB 1,188,000.00 Credit
Co.
Auxiliary ICBC Banshan Branch RMB 26,627,517.50 Credit
Company
Guoneng ICBC Banshan Branch USD 1,845,700.00 Credit
Company
Guoneng ICBC Banshan Branch Euro 368,200.00 Credit
Company
Guoneng ICBC Banshan Branch RMB 1,526,279.00 Credit
Company
Machinery Co. ICBC Banshan Branch RMB 11,976,011.75 Credit
Machinery Agricultural bank of China Guangzhou RMB 1,143,707.35 Deposit
Co.Guangzhou Haizhu Branch
Office
New Energy Hangzhou Bank Xicheng Branch RMB 7,216,167.60 Credit
Company
Turbine Co. China CITIC Bank Hangzhou Branch RMB 3,804,879.31 Credit
Turbine Co. ICBC Banshan Branch RMB 6,850,000.00 Credit
Zhongneng China Bank Hangzhou Qiantang New RMB 109,349,446.12 Credit
Company area Branch
237
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Zhongneng China Bank Hangzhou Qiantang New USD 464,000.00 Credit
Company area Branch
(II). Contingency
(1) Significant contingency at balance sheet date
On December 19, 2019, subsidiary Zhongneng Company filed a lawsuit with the Shanshan County People's
Court of Xinjiang Uygur Autonomous Region, requesting that Hesheng Electric Power (Shanshan) Co., Ltd. be
ordered to pay the purchase price of4,470,000.00 yuan and pay compensation for overdue payment (from the
bank's benchmark loan interest rate for the same period to the actual date of payment and 159,642.00 yuan from
the date of the lawsuit temporarily), totaling 4,629,642.00 yuan. On December 28, 2020, the court ruled that
Hesheng Electric Power Company (Shanshan) Co., Ltd. should pay the payment of RMB 4,470,000.00 and bear the
compensation for overdue payment. Hesheng Electric Power Company (Shanshan) Co., Ltd. objects the judgment
and has appealed to the court. The second trial was held on November 6, 2021. On December 6, 2021, Turpan
Intermediate People's Court of Xinjiang Uygur Autonomous Region made a second-instance civil judgment,
revoking the first-instance civil judgment of the People's Court of Shanshan County in Xinjiang Uygur Autonomous
Region against Zhongneng Company and Hesheng Electric Power (Shanshan) Co., Ltd. ((2020) X 2122 MC
No.317), and the case remanded to the people of Shanshan County of Xinjiang Uygur Autonomous Region for
retrial. On the date of approval of this Financial Statement, the above case is still under trial.
(2) The Company have no significant contingency to disclose, also should be stated
There was no significant contingency in the Company.
3.Other
XV. Events after balance sheet date
1. Significant events had not adjusted
In RMB
Influence number to the
Reason of unable to estimate
Items Content Financial position and operating
influence number
results
2. Profit distribution
3. Sales return
4. Notes of other significant events
(1) Important non-adjusting matters
On January 13, 2022, Henan Junhua Development Co., Ltd. sued the Company to the People's Court of
238
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Yicheng District, Zhumadian City, Henan Province, claiming compensation for its loss of RMB 40 million, case
acceptance fees, property preservation fees and other expenses. On February 23, 2022, the Company received a
summons from Yicheng District People's Court, Zhumadian City, Henan Province ((2022) Y 1702 MC No.1573).
As of the date of approval of this Financial Statement, the above case is still under trial.
(2) Distribution of profits after balance sheet date
In 2021, with the total share capital of 754,010,400 shares at the end of the year deducting 111,800 treasury
shares repurchased as of date of record by Company, that is, 753,898,600 shares, the Company would distribute
cash dividend to all the shareholders at the rate of CNY 4.0 for every 10 shares (with tax inclusive) , 0 bonus
shares ，and no reserve would be converted into share capital.
According to the 2021 annual profit distribution plan reviewed and passed at the
23rd Meeting of the eighth board of directors of the Company on March 29,2022, In
2021, with the total share capital of 754,010,400 shares at the end of the year
Profit or dividend proposed to be distributed deducting 111,800 treasury shares repurchased as of date of record by Company,
that is, 753,898,600 shares, the Company would distribute cash dividend to all the
shareholders at the rate of CNY 4.0 for every 10 shares , 3 bonus shares ，and no
reserve would be converted into share capital. The afore-said profit distribution plan
still needs to be reviewed and approved by the shareholders' general meeting.
XVI. Other significant events
1. The accounting errors correction in previous period
（1）Retrospective restatement
In RMB
Name of the influenced report
Content Processing program Accumulative impact
items during comparison period
（2）Prospective application
Content Processing program Reason of adopting prospective application
2. Debt restructuring
3. Replacement of assets
(1) Non-monetary assets exchange
(2) Other assets replacement
4. Pension plan
5. Discontinuing operation
In RMB
Termination of
Income tax
Items Income Expenses Total profit Net profit the business
expenses
profits
239
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
attributable to the
parent company
owner
Other note
6. Segment information
(1) Recognition basis and accounting policies of reportable segment
(2) The financial information of reportable segment
In RMB
Items Offset during segments Total
(3) There was no reportable segment, or the total amount of assets and liabilities of each part of reportable
segment, shall disclose the reason.
The Company's main business is to produce and sell industrial steam turbines and its accessories , their
auxiliaries, accessories and other products. The Company regards such business as a whole to implement
management and evaluate the operating results. Therefore, the Company does not need to disclose segment
information. The operating income and operating costs of the Company by product/region are detailed in Note V (II)
1 of the Financial Statements.
（4）Other note
7. Other important transactions and events have an impact on investors’ decision-making
8. Other
(I) Lease
1. Company as lessee
(1) For information about the right-to-use assets, please refer to Note V (I) 18 to this Financial Statement;
(2) The Company's accounting policies for short-term leases and low-value asset leases are detailed in Note III
(25) to this Financial Statement. The amounts of short-term lease expenses and low-value asset lease expenses
included in the current profits and losses are as follows:
Items Current amount
Short-term lease expense 12,300,753.43
Low-value asset lease expense (except short-term lease) 4,866.90
Total 12,305,620.33
(3) Current profit and loss and cash flow related to leasing
Items Current amount
Interest expense of lease liabilities 559,478.09
Total cash outflow related to leasing 7,337,642.50
(3) The maturity analysis of the lease liabilities and the corresponding liquidity risk management are detailed
240
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
in Note VIII (II) of this Financial Statement.
2. Company as lessor
(1) Operating lease
1) Lease income
Items Current amount
Lease income 2,966,095.79
2) Operating lease assets
Items Ending amount
Real estate investment 6,903,986.07
Subtotal 6,903,986.07
3) According to the lease contract signed with the lessee, the undiscounted lease receipts that will be received in
the future for irrevocably lease
Remaining term Ending amount
Within 1 year 471,842.25
1-2 years 268,910.00
2-3 years 269,560.00
3-4 years 240,792.87
4-5 years 88,893.33
Over 5 years 13,040.00
Total 1,353,038.45
(II) Other
According to the planning of the Hangzhou Municipal Government, the property right bodies of 6 companies
including Hangzhou Steam Turbine Group and Hangzhou Steam Turbine Company within the plant area of
Hangzhou Steam Shiqiao Road factory area were included in the scope of the Expropriation and Relocation
Planning. According to the Hangzhou Municipal People's Government's Minutes (Hangfu Minutes [2016] No. 87)
on the relevant issues concerning the compensation for the relocation of the Steam Turbine Shiqiao road plant area
and the spirit of the minutes (Hangfu Minutes [2016] No. 47)of the special meeting of Hangzhou Municipal
people's Government on the relevant issues concerning speeding up the relocation of the Shiqiao Road Factory
area of Hangzhou Steam Turbine and the Construction of the Hangzhou Steam Turbine Heavy Industry Project,
Hangzhou Municipal Government, in accordance with the principle of "one factory, one policy", determines that
the compensation for the overall relocation of the plant area of Hangzhou Steam Turbine Shiqiao road plant is
RMB 1.815 billion, with the compensation contents include the compensation for physical assets such as
buildings, structures, housing renovations, equipment, and land within the area of relocation, as well as personnel
resettlement fees, compensation fees for shutdown loss and production stoppage loss and incentive fees, and the
compensation agreement shall be signed by the Xiacheng Urban Construction Investment Group-the land-making
main-body affiliated to Hangzhou Xiacheng District Municipal Government with each relocation unit.
241
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
On March 21, 2018, based on the evaluation opinion of Kunyuan Assets Appraisal Co., Ltd (No. 606-2017
Kunnyuan Appraisal Report, No. 609-2017 Kunnyuan Appraisal Report, No. 18-2018 Kunnyuan Appraisal
Report,), the company signed the “Relocation Compensation Agreement for Non-residential Buildings on
State-owned Land” with Xiacheng Urban Construction Investment Group, and determined that Xiacheng Urban
Construction Investment Group shall make full monetary relocation compensation for the Company and its
subsidiary the Machinery Company, with the total amount of compensation for various physical assets and
expenses is RMB 1,321,860,410.00 (Including the incentive fee of RMB 35,275,640.00), and this aforementioned
compensation shall be firstly collected by Hangzhou Steam Turbine Group.
The company and its subsidiaries have received a total of RMB 860,520,848.42 of relocation compensation;
the company and its subsidiaries incurred relocation expenses of RMB131,123,371.02 in the current period (the
loss of relocation assets delivery due to the relocation of the house and land in the current period of RMB
76,898,071.36), and the accumulated relocation expenses incurred RMB 243,846,591.15, RMB 114,352,284.60
was incurred for the acquisition and construction of assets by the company and its subsidiaries in the current
period, and RMB 614,633,610.56 was incurred accumulatively. The corresponding carry-over special payables in
the current period - compensation for relocation of RMB 244,902,296.53 was included in deferred income and
other income. At the end of the period, there was a balance of compensation for relocation of RMB 2,040,646.71
that was not transferred to deferred income.
XVII. Notes of main items in the financial statements of the Parent Company
1. Accounts receivable
(1) Accounts receivable classified by category
End of term Beginning of term
Categor Book balance Bad debt provision Book balance Bad debt provision
y
Proportio Proportio Book value Proportio Proportio Book value
Amount Amount Amount Amount
n% n% n% n%
Includin
g
Accrual
of bad
debt 2,347,791,6 767,426,73 1,580,364,8 2,028,542,0 795,217,22 1,233,324,7
100.00% 32.69% 100.00% 39.20%
provisio 12.01 5.29 76.72 02.24 0.72 81.52
n by
portfolio
Includin
242
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
g：
2,347,791,6 767,426,73 1,580,364,8 2,028,542,0 795,217,22 1,233,324,7
Total 100.00% 32.69% 100.00% 39.20%
12.01 5.29 76.72 02.24 0.72 81.52
Accrual of bad debt provision by single item
In RMB
Closing balance
Name
Book balance Bad debt provision Proportion
Accrual of bad debt provision by portfolio: 767,426,735.29 yuan
In RMB
Closing balance
Name
Book balance Bad debt provision Proportion
Associated transaction portfolio within
the scope of consolidated financial 64,353,267.93
statement
Aging portfolio 2,283,438,344.08 767,426,735.29 33.61%
Total 2,347,791,612.01 767,426,735.29 --
Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of
other receivables if the provision for bad debts of bills receivable is accrued according to the general model of
expected credit loss:
□ Applicable √ Not applicable
Disclosure by aging
In RMB
Aging Book balance
Within 1 year（Including 1 year） 804,010,333.82
1-2 years 475,555,467.48
2-3 years 338,870,488.31
Over 3 years 729,355,322.40
3-4 years 261,243,059.81
4-5 years 99,576,186.80
Over 5 years 368,536,075.79
Total 2,347,791,612.01
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision：
In RMB
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Amount of change in the current period
Reversed or
Category Opening balance Closing balance
Accrual collected Write-off Other
amount
Accrual of bad debt
provision by Single
term
Accrual of bad debt
795,217,220.72 -6,977,429.63 18,819,851.81 1,993,203.99 767,426,735.29
provision by portfolio
Total 795,217,220.72 -6,977,429.63 18,819,851.81 1,993,203.99 767,426,735.29
Of which the significant amount of the reversed or collected part during the reporting period
In RMB
Items Reversed or collected amount Method
(3) The actual write-off accounts receivable
In RMB
Items Amount
Accrual of bad debt provision by portfolio 18,819,851.81
The significant actual write-off accounts receivable
In RMB
Nature of accountAmount written Reason for Arising from related
Name Verification procedures
receivable off written off transactions (Y/N)
Beijing Lixin Jingtong Industrial Review by the Board of
Uncollectible
Goods 11,782,235.99 No
Equipment Co., Ltd Directors
amount
Zhejiang Shengxin Energy Review by the Board of
Uncollectible
Goods 2,630,000.00 No
Technology Development Co., Ltd. Directors
amount
Review by the Board of
Uncollectible
Xian Shangu Power Co., Ltd. Goods 2,254,252.29 No
amount Directors
Zhejiang Taihe Textile Printing & Review by the Board of
Uncollectible
Goods 1,565,000.00 No
dyeing Clothing Co., Ltd. Directors
amount
Review by the Board of
Shenyang Water Pump Uncollectible
Goods 561,565.71 No
Petrochemical Pump Co.,Ltd. amount Directors
Uncollectible Review by the Board of
Other Goods 26,797.82 No
amount
244
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Directors
Total -- 18,819,851.81 -- -- --
（4）The ending balance of account receivables owed by the imputation of the top five parties
In RMB
Name Amount Proportion(%) Bad debt provision
Client 1 846,929,471.96 36.07% 252,652,692.60
Client 2 209,029,142.89 8.90% 100,605,675.82
Client 3 203,158,987.19 8.65% 20,939,390.54
Client 4 61,117,062.00 2.60% 61,117,062.00
Client 5 56,450,682.40 2.40% 2,822,534.12
Total 1,376,685,346.44 58.62% --
（5）Account receivable which terminate the recognition owning to the transfer of the financial assets
Other note：
(6)The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts
receivable
2. Other account receivable
In RMB
Nature Closing balance Opening balance
Dividend receivable 43,605,292.60
Other 27,,054,816.71 8,733,700.06
Total 27,054,816.71 52,338,992.66
（1）Interest receivable
1）Classification of interest receivable
In RMB
Nature Closing balance Opening balance
2）Significant overdue interest
In RMB
Whether or not the
Unit Closing balance Time Reason impairment and the basis
for its determination
Other note：
3）Bad-debt provision
□ Applicable √ Not applicable
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
（2）Dividend receivable
1）Dividend receivable
In RMB
Items End of term Beginning of term
Hangzhou Bank 43,605,292.60
Total 43,605,292.60
2) Significant dividend receivable aged over 1 year
In RMB
Whether occurred
Closing
Items Aging Reason impairment and its
balance
judgment basis
3）Bad-debt provision
□ Applicable √ Not applicable
Other note：
（3） Other accounts receivable
1) Other accounts receivable classified by the nature of accounts
In RMB
Nature Closing book balance Opening book balance
Deposit 30,465,219.01 11,200,823.94
Provisional payment receivable 832,087.45 612,831.32
Other 1,999,123.61 1,703,075.58
Total 33,296,430.07 13,516,730.84
2）Bad-debt provision
In RMB
Stage 1 Stage 2 Stage 3
Expected credit Expected credit losses for
Bad Debt Reserves Expected credit loss over Total
losses over the next the entire duration (credit
life (no credit impairment)
12 months impairment occurred)
Balance as at January 1, 2021 404,506.46 36,300.59 4,342,223.73 4,783,030.78
Balance as at January 1, 2021 in
—— —— —— ——
current
——Transfer to stage II -106,562.82 106,562.82
——Transfer to stage III -6,864.40 6,864.40
Provision in the current period 253,295.01 77,126.63 407,679.20 738,100.84
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Other 720,481.74 720,481.74
Balance as at December 31, 2021 1,271,720.39 213,125.64 4,756,767.33 6,241,613.36
Loss provision changes in current period, change in book balance with significant amount
□ Applicable √ Not applicable
Disclosure by aging
In RMB
Aging Book balance
Within 1 year(Including 1 year） 26,266,495.19
1-2 years 2,131,256.35
2-3 years 68,644.00
Over 3 years 4,830,034.53
3-4 years 122,938.00
4-5 years 223,425.99
Over 5 years 4,483,670.54
Total 33,296,430.07
3) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision：
In RMB
Amount of change in the current period
Opening
Category Reversed or Closing balance
balance Accrual Write-off Other
collected amount
Accrual of bad debt
4,783,030.78 738,100.84 720,481.74 6,241,613.36
provision by portfolio
Total 4,783,030.78 738,100.84 720,481.74 6,241,613.36
Of which the significant amount of the reversed or collected part during the reporting period
In RMB
Items Reversed or collected amount Method
(4) The actual write-off accounts receivable
In RMB
Items Amount
Of which the significant actual write-off accounts receivable:
In RMB
Whether occurred
Name Nature Amount Reason Process from the related
transactions
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Notes of the write-off other accounts receivable:
(5) Top 5 of the closing balance of the other accounts receivable collected according to the arrears party
In RMB
Proportion of the total
year end balance of Closing balance of
Name Nature Closing balance Aging
the accounts bad debt provision
receivable
Shanghai Customs Deposit 21,381,672.32 Within 1 year 64.22% 1,069,083.62
Shanghai Customs Waigaoqiao
Deposit 3,710,320.94 Over 5 years 11.14% 3,710,320.94
Office
Hangzhou Ganghua Gas Co., Ltd. Deposit 900,000.00 [Note] 2.70% 140,000.00
Suzhou Weicheng Bidding
Deposit 751,000.00 Within 1 year 2.26% 37,550.00
Services Co., Ltd.
Nantong Jiaxing Thermoelectric
Deposit 700,000.00 1- 2 years 2.10% 70,000.00
Co., Ltd.
Total -- 27,442,993.26 -- 82.42% 5,026,954.56
[Note] 1-2 years: 800,000.00 yuan, 3-4 years: 100,000.00 yuan.
(6) Accounts receivable involved with government subsidies
In RMB
Estimated received time,
Name Project of government Opening balance Closing balance
amount and basis
(7) Other account receivable which terminate the recognition owning to the transfer of the financial assets
(8) The amount of the assets and liabilities formed by the transfer and the continues involvement of other accounts
receivable
Other note:
3. Long-term equity investment
In RMB
Closing balance Opening balance
Items Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investments in
191,793,655.63 191,793,655.63 913,732,321.62 913,732,321.62
subsidiaries
Investments in
associates and 11,456,132.77 11,456,132.77
joint ventures
Total 191,793,655.63 191,793,655.63 925,188,454.39 925,188,454.39
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
(1)Investments in subsidiaries
In RMB
Increase /decrease
Closing balance of
Opening Withdrawn Closing
Investees Add Decreased impairment
balance impairment Other balance
investment investment provision
provision
Turbine Company 20,000,000.00 208,700.14 20,208,700.14
Hangzhou Heavy
770,812,943.59 207,460,000.00 978,272,943.59
Industry
Hangzhou
Auxiliary 46,286,513.41 46,286,513.41
Machine Co.
Zhejiang Turbine
29,800,389.56 10,200,000.00 40,000,389.56
Packaged Co.
Zhongneng Co. 27,644,475.06 27,644,475.06
Zhejiang Turbine
7,968,000.00 7,968,000.00
Packaged Co.
Zhongneng Co. 11,220,000.00 11,220,000.00
New Energy
1,193,092.39 1,193,092.39
Company
Sales Company 13,721,544.50 13,721,544.50
China Mechanical
Institute 1,533,768.30 1,533,768.30
Company
Ranchuang
22,017,172.27 22,017,172.27
Company[Note]
Total 913,732,321.62 256,334,277.60 978,272,943.59 191,793,655.63
（2）Investments in associates and joint ventures
In RMB
Increase /decrease in reporting period
Adjustme
Withdraw Closing
Decrease Gain/loss nt of Declarati
Opening Add Other n Closing balance of
Name d of other on of cash
balance investmen equity impairme Other balance impairmen
investmen Investme comprehe dividends
t changes nt t provision
t nt nsive or profit
provision
income
I. Joint ventures
249
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
II. Associated enterprises
Associate
d
enterprise
s
Ranchuan
11,456,13 272,641.2 11,728,77
g 0.00
2.77 4 4.01
Company
11,456,13 272,641.2 11,728,77
Total
2.77 4 4.01
11,456,13 272,641.2 11,728,77
2.77 4 4.01
（3）Other note
4. Business income and Business cost
In RMB
Items Amount of current period Amount of previous period
Income Cost Income Cost
Main business 3,346,432,079.14 2,393,749,908.61 2,480,402,944.88 1,718,757,777.75
Other 21,106,635.44 27,015,078.28 10,916,285.22 5,702,643.04
Total 3,367,538,714.58 2,420,764,986.89 2,491,319,230.10 1,724,460,420.79
Information related to performance obligations:
The Company’s sales link has entered into a legal and effective sales contract/order with the customer. The
contract/order clarifies the terms of the subject product, specification model, transaction quantity, unit price,
settlement method, delivery obligation, etc., and the performance obligation is clear, and it is the single
performance obligation at a single point in time. The transaction prices of the Company’s various product
contracts/orders are clear, and the Company will confirm revenue after fulfilling the relevant performance
obligations in accordance with the contract/order related agreements.
Information related to transaction value assigned to residual performance obligations:
The income corresponding to the performance obligations that have not been performed or have been performed
incompletely but the contract has been signed at the end of the reporting period is RMB 5,190,510,000.00, of which
RMB 0.00 is expected to be recognized as income in the year, RMB 0.00 is expected to be recognized as income
in the year, and RMB0.00 is expected to be recognized as income in the year.
Other note：
5. Investment income
In RMB
Items Occurred current term Occurred in previous term
250
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Long-term equity investment income by equity
272,641.24 210,035.64
method
Long-term equity investment income by Cost
153,319,630.00 128,543,620.00
method
Receivables financing discount loss -2,924,174.07 -1,518,602.29
Investment income obtained from the disposal of
75,612,246.06 23,991,247.64
trading financial assets
Dividend income from other equity instrument
95,156,322.10 95,156,322.10
investments during the holding period
Debt restructuring gains -102,750.00 125,500.00
Total 321,333,915.33 246,508,123.09
6.Other
XVIII. Supplement information
1. Particulars about current non-recurring gains and loss
√ Applicable □Not applicable
In RMB
Items Amount Notes
It is mainly the
delivery loss of
relocated assets
Non-current asset disposal gain/loss(including the write-off part for which assets impairment due to the
-77,159,058.06
provision is made) relocation and
transfer of real
estate and land
in this period.
Tax refund, deduction and exemption that is examined and approved by authority exceeding
or has no official approval document.
It is mainly the
net government
subsidies
recognized by
Governmental Subsidy accounted as current gain/loss, except for those subsidies at with
the Company
amount or quantity fixed by the national government and closely related to the Company’s 129,850,767.59
for relocation
business operation.
compensation
in the Shiqiao
Road factory
area.
Debt restructuring profit or loss 1,617,382.00
251
Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
Net gain and loss of the subsidiary under the common control and produced from enterprise
-29,001,203.15
consolidation from the beginning of the period to the consolidation date
It is mainly the
income of
main bank
wealth
Gain and loss from change of the fair value arising from transactional monetary assets,
management
transactional financial liabilities as held as well as the investment income arising from
products and
disposal of the transactional monetary assets, transactional financial liabilities and financial 75,295,281.43
the net income
assets available for sale excluding the effective hedging transaction in connection with the
from the sale
Company’s normal business
of convertible
bonds of
Hangzhou
Bank.
Reverse of the provision for impairment of accounts receivable undergoing impairment test
3,600,000.00
individually
It is mainly due
to the
compensation
paid by
Sinosteel
Operating income and expenses other than the aforesaid items 123,214,403.44
Equipment
Co., Ltd.
received by
Turbine
Company.
Other non-operating income and expenditure beside for the above items 0.00
Less: Influenced amount of income tax 13,388,887.75
Amount of influence of minority interests（After tax） -7,840,808.41
Total 221,869,493.91 --
Details of other profit and loss items that meet the non-recurring profit and loss definition
□ Applicable√ Not applicable
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in
the Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the
Public-Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said
explanatory announcement as a recurrent gain/loss item.
□ Applicable √Not applicable
2. Return on net asset and earnings per share
Profit of report period Weighted Earnings per share
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Hangzhou Steam Turbine Co.,Ltd. 2021 Annual Report
average returns Basic earnings per Diluted earnings per
equity(%) share(RMB/share） share(RMB/share)
Net profit attributable to the Common stock shareholders of
8.01% 0.88 0.88
Company.
Net profit attributable to the Common stock shareholders of 5.31% 0.58 0.58
Company after deducting of non-recurring gain/loss.
3. Differences between accounting data under domestic and overseas accounting standards
（1）Simultaneously pursuant to both Chinese accounting standards and international accounting standards
disclosed in the financial reports of differences in net income and net assets.
□ Applicable□√ Not applicable
（2）Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese
accounting standards.
□ Applicable□√ Not applicable
(3)Explanation of the reasons for the differences in accounting data under domestic and foreign accounting standa
rds. If the data that has been audited by an overseas audit institution is adjusted for differences, the name of the ov
erseas institution should be indicated
4.Other
253
