Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
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Stock Code: 200771 Stock ID: Hangqilun B Announcement No. 2009-17
二零零九年半年度报告
INTERIM REPORT 2009
August 21, 2009
杭州汽轮机股份有限公司
HANGZHOU STEAM TURBINE C O . , LTD.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
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Table of Contents
Chapter I. Important Statement................................................................................................................................. 3
Chapter II. Company Profile..................................................................................................................................... 4
Chapter III. Changes in Share Capital & Particulars about Shareholders.................................................................. 7
Chapter IV. Directors, Supervisors, and Executives ................................................................................................ 10
Chapter V. Board of Director’s Report .................................................................................................................... 11
Chapter VI. Important Events................................................................................................................................. 16
Chapter VII. Financial Report (Not Audited) .......................................................................................................... 20
Chapter VIII. Documents for Reference.................................................................................................................. 98Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
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Chapter I. Important Statement
1. The Board of Directors and the directors of the Company guarantee that there are no significant omissions,
fictitious or misleading statements carried in the Report and we will accept individual and joint responsibilities for
the truthfulness, accuracy and completeness of the Report.
2. The Interim Report 2009 was examined at the 11th meeting of the 4th term of Board and was passed
unanimously by the directors at the meeting. Director Nie Zhonghai absented the meeting for he’s on business trip.
He empowered Director Wang Hongkang to present the meeting and vote on his behalf. None of the directors,
supervisors, or senior managements is not able to guarantee or disagree with the accuracy, authentic and
completeness.
3 This report is prepared both in English and Chinese. When there is any conflict in understanding, the Chinese
version shall prevail.
4. The financial statements carried in this report are not audited.
5. Chairman Mr. Nie Zhonghai, General Manager Mr. Yan Jianhuan, Chief Financial Officer Mr. Bo Ronghua, and
the Chief of Accounting Department Mr. Wu Guomei hereby declares: the Financial Statement in the report is
guaranteed to be truthful and complete.
The Board of Directors of
Hangzhou Steam Turbine Co., Ltd.
August 21, 2009Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
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Chapter II. Company Profile
(I) Company Profile
(I) Legal Name of the Company
Name in Chinese: 杭州汽轮机股份有限公司
Name in English: HANGZHOU STEAM TURBINE CO., LTD
Abbreviation in English: HTC
(II) Legal Representative: Mr. Nie Zhonghai
(III) Secretary of the Board: Mr. Yu Changquan
Tel: (0571)85780432
E-mail: ychq@htc.net.cn
Stock affair representative: Wang Gang
Tel: (0571)85780198
Email: wg@htc.net.cn
Board of Directors’ Office: (0571)85780198
Fax: (0571)85780433
(IV) Registered Address and Office Address:
357 Shiqiao Rd., Hangzhou City, Zhejiang, China
Post Code: 310022
Website: http://www.htc.cn
(V) Shares Listed in: Shenzhen Stock Exchange
Stock Abbreviation: Hangqilun B Stock Code: 200771
(VI) Presses Assigned by National Security Supervisory Committee for Information Disclosure:
Website: http://www.cninfo.com.cn
Press media: Securities Times, Shanghai Securities Daily, Hong Kong Commercial Daily
Report prepared and ready for inquire at: Securities Office, Hangzhou Steam Turbine Co., Ltd.
(VII) The primary business range of the Company is: designing, manufacturing, selling and service providing of steam turbine
and its supplementary equipments, elements and accessories. Providing related services such as equipment integration,
after-sales, import and export services.
(VIII) Supplementary information:
1. Primary business registration of the company was on April 23, 1998 at Zhejiang Provincial Business Administration.
The latest renewing of registration was on May 6, 2009 at Zhejiang Provincial Business Administration.
2. Business license No. 330000400001023.
3. Tax registration No. 330165704202620
4. Public accountants employed:
Certified public accountant: Pan-China (Zhejiang) Certified Public Accountants
Office address: 6-10/F Xihu Business Building, 128 Xixi Road, Hangzhou
Post office: 310007 Email: info@orients.cn
Tel: (0571)88216888 Fax: （0571）88216999Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
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(II) Financial highlights
1. Main accounting data in RMB Yuan
Ended this report
term
Ended previous
year
Increase/decrease
(%)
Gross Assets 4,674,750,853.03 4,569,605,900.83 2.30%
Owners’ equity to shareholders of the listed
company 1,991,350,454.60 1,901,311,875.65 4.74%
Share capital 371,800,000.00 371,800,000.00 0.00%
Net asset per share attributable to the shareholders of
the listed company (Yuan/share) 5.36 5.11 4.89%
Report term
(Jan-Jun)
Same period last
year
Increase/decrease
(%)
Turnover 1,646,527,768.37 1,398,242,002.19 17.76%
Operation profit 337,811,535.69 299,452,369.46 12.81%
Total profit 338,432,212.27 295,542,154.01 14.51%
Net profit attributable to the shareholders of the
listed company 238,780,981.80 194,278,048.82 22.91%
Net profit after deducting of non-recurring gain/loss
attributable to the shareholders of the listed company 239,412,809.45 196,998,624.36 21.53%
Basic earnings per share (Yuan/share) 0.6422 0.5225 22.91%
Diluted earnings per share (Yuan/share) 0.6422 0.5225 22.91%
Net return on equity (%) 11.99% 12.77% -0.78%
Cash flow generated by business operation, net -9,773,984.93 240,119,339.52 -104.07%
Net Cash flow per share generated by business
operation (yuan/share) -0.03 0.6458 -104.65%
2. Non-recurring gain/loss accounts in RMB yuan
Non-recurring gain and loss items Amount Note (if
applicable)
Gain/loss of non-current assets 174,984.39
Government subsidies accounted into current gain/loss account, other than those
closely related to the Company’s common business, comply with the national policy
and continues to enjoy at certain fixed rate or amount.
3,214,040.20
Other non-business income and expenditures other than the above -2,768,348.01
Influenced amount of minority shareholders’ equity -892,822.91
Influenced amount of income tax -359,681.32
Total -631,827.65 -Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
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3. Difference between domestic and international accounting standard RMB Yuan
Net profit attributable to the
shareholders of the listed company
Owners’ equity to shareholders of the
listed company
Current term Amount of last term End of term Beginning of term
On IAS 238,780,981.80 194,278,048.82 1,991,350,454.60 1,901,311,875.65
On domestic accounting
standard 238,780,981.80 194,278,048.82 1,991,350,454.60 1,901,311,875.65
Individual and total of adjustment according to IAS
Total of differences between
the IAS and domestic
accounting standard
0.00 0.00 0.00 0.00
Statement on differences
between the IAS and Chinese
Accounting Standard
NoneHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
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Chapter III. Changes in Share Capital & Particulars about
Shareholders
(I) Change of share capital
1. None of bonus share distribution, capitalizing of common reserves, issuing of new shares, converting of
convertible bonds, or other caused change in share capital and structure in the report term.
2. Total of share capital and structure in shares
Before the change Changed (+,-) After the change
Amount Proportion Issuing of
new shares
Bonus
shares
Transferred
from reserves Others Sub-total Amount Proportion
I. Shares with conditional
subscription 236,600,000 236,600,000 63.64%
1. State-owned shares
2. State-owned legal person
shares 236,600,000 63.64% 236,600,000 63.64%
3. Other domestic shares
Incl. Non-government
domestic legal person
shares
Domestic natural person
shares
4. Share held by foreign
investors
Incl. Shares held by foreign
legal persons
Foreign natural person
shares
5. Management shares
II. Shares with
unconditional subscription
1. Common shares in RMB
2. Foreign shares in
domestic market 135,200,000 36.36% 135,200,000 36.36%
3. Foreign shares in
overseas market
4. Others
III. Total of capital shares 371,800,000 100% 371,800,000 100%Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
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(II) Particulars about the top 10 shareholders and top 10 unconditional share holders in
shares
Total of shareholders 14,808
Top 10 Shareholders
Name of the shareholder Properties of shareholder
Share
proportion
%
Total shares Conditional
shares
Pledged or
frozen
Hangzhou Steam Turbine Power Group
Co., Ltd.
State-owned legal
person 63.64% 236,600,000 236,600,000 91,000,000
SCHRODER INTL SELECTION
FD-GREATER CN FD GRI 25287 Overseas legal person 1.69% 6,287,474 0 N/A
NORGES BANK Overseas legal person 0.92% 3,406,614 0 N/A
SCHRODER INTERNARIONAL
SELECTION FUND Overseas legal person 0.78% 2,916,350 0 N/A
TOYO SECURITIES ASIA LINITED-A/C
CLIENT. Overseas legal person 0.73% 2,729,991 0 N/A
Gong Xihua Domestic natural person 0.40% 1,491,059 0 N/A
BOCHK INVESTMENT FUNDS-BOCHK
CHINA GOLDEN DRAGON FUND Overseas legal person 0.36% 1,327,835 0 N/A
HTHK-VALUE PARTNERS
INTELLIGENT FD-CHINA B SHS FD Overseas legal person 0.34% 1,276,797 0 N/A
LAU YAM HOI Domestic natural person 0.32% 1,172,597 0 N/A
INVESTRINGSFORENINGEN DANSKE
INVEST Overseas legal person 0.31% 1,154,600 0 N/A
Top 10 holders of unconditional shares
Name of the shareholder Unconditional shares Category of shares
SCHRODER INTL SELECTION
FD-GREATER CN FD GTI 25287 6,287,474 Foreign shares placed in domestic exchange
NORGES BANK 3,406,614 Foreign shares placed in domestic exchange
SCHRODER INTERNATIONAL
SELECTION FUND 2,916,350 Foreign shares placed in domestic exchange
TOYO SECURITIES ASIA
LIMITED-A/C CLIENT. 2,729,991 Foreign shares placed in domestic exchange
Gong Xihua 1,491,059 Foreign shares placed in domestic exchange
BOCHK INVESTMENT
FUNDS-BOCHK CHINA GOLDEN
DRAGON FUND
1,327,835 Foreign shares placed in domestic exchange
HTHK-VALUE PARTNERS
INTELLIGENT FD-CHINA B SHS FD 1,276,797 Foreign shares placed in domestic exchange
LAU YAM HOI 1,172,597 Foreign shares placed in domestic exchange
INVESTRINGSFORENINGEN
DANSKE INVEST 1,154,600 Foreign shares placed in domestic exchange
內藤证券株式会社 1,044,595 Foreign shares placed in domestic exchange
Notes to relationship or “action in
concert” among the top ten shareholders.
(1) Of top ten shareholders, Hangzhou Steam Turbine Group Co., Ltd. holds shares on
behalf of the State and the others are to B-Share shareholders.
(2) Hangzhou Steam Turbine Group Co., Ltd. is not related to any of the other 9
shareholders. It is unknown whether there is any relationship among the 9 shareholders.
(3) None of the other shareholders are regarded as Act in Concert relationship according to
the Administrative Regulations of Information Disclosing of Public Companies.
(4) Since September 2007, Hangzhou Steam Turbine Group Co., Ltd. has put 91 million
shares of promoter’s state-owned shares (takes 38.46% of the total shares it is holding in
the Company, and takes 24.48% of the total share capital of the Company) into pledge to
Communication Bank Ltd. for the loan credit up to RMB640 million. The pledge term will
commence at October 21, 2007 and expire at the end of September 2009.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
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(III) Change of controlling shareholder and substantial controller
No change happened to the controlling shareholder and substantial controller.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
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Chapter IV. Directors, Supervisors, and Executives
(I) Change of shareholding by directors, supervisors, and executives
Name Position
Shares held
at the
beginning
of term
Amount of
shares
increased
in the
report term
Amount of
shares
decreased
in the
report term
Shares held
at the end
of term
Incl.
Conditional
shares
Share option
held at end of
term
Cause of
change
Zhang
Shutan
Vice General
Manager 58587 0 18587 40000 40000 0 Offer for
bidding
(II) Change of directors, supervisors and senior executives
(1) Directors, supervisors or senior executives left from their positions
Name Position Date of
leaving
Reason Document for reference Announcement
No.
Jin Fujuan Vice Chairman February 16,
2009
Retired
legally
Resolutions of the 1st Provisional Board
Meeting 2009
(Voted via telecommunication)
Lin 2009-02
Li Lie Director
Vice General
Manager
February 16,
2009
Retired
legally
Resolutions of the 1st Provisional Board
Meeting 2009
(Voted via telecommunication)
Lin 2009-02
Shao Linna Supervisor April 3, 2009 Retired
legally
Announcement on Ms. Shao Linna’s retiring
from the Supervisory Committee
Lin 2009-09
Liu
Guoqiang
Vice General
Manager
February 16,
2009
Change of
job
Resolutions of the 1st Provisional Board
Meeting 2009
(Voted via telecommunication)
Lin 2009-02
(2) Engaging or employing of new directors, supervisors and executives
Name Position Date of
engaging
Way of engaging Document for reference Announcement
No.
Zheng Bin Vice Chairman March 25,
2009
Elected at
shareholders’ meeting
Resolutions of the 1st Provisional
Shareholders’ Meeting 2009
Lin 2009-07
Liu
Guoqiang
Director March 25,
2009
Elected at
shareholders’ meeting
Resolutions of the 1st Provisional
Shareholders’ Meeting 2009
Lin 2009-07
Pu
Yangshuo
Supervisor May 20,
2009
Elected at
shareholders’ meeting
The Resolutions of Shareholders’
Annual Meeting 2008
2009-14
Zhang
Shutan
Vice General
Manager
February 16,
2009
Engaged by Board Resolutions of the 1st Provisional
Board Meeting 2009
(Voted via telecommunication)
Lin 2009-02
Yu
Changquan
Vice General
Manager
February 16,
2009
Engaged by Board Resolutions of the 1st Provisional
Board Meeting 2009
(Voted via telecommunication)
Lin 2009-02Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
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Chapter V. Board of Director’s Report
(I) Business review
1. Overall business operation in the report term
Under impact of the global and national economy, the industrial steam turbine market was still in low situation in
the 1st half of 2009. It has been a great challenge to the Company’s capability in marketing, innovation, and
confidence of developing. Though the Company has managed to keep a good business in the first half of year, and
steady confidence on overcoming difficulties and development.
In the report term, the Company realized turnover of RMB1.64652 billion with total profit of RMB338.43 million
and net profit of RMB288.13 million, which increased by 17.76%, 14.51%, 17.29% respectively over the same
period of last year.
In the report term, facing the severe market situation, the Company adopted new marketing strategy, reinforced
the marketing effort on key projects including PTA, China Petrol, and China Petrol Chemical. In overseas market,
the Company fully developed the advantages of overseas factories and engineering companies to invade in new
market territories, and gain power in South East Asia, Turkey, East Europe, and Central America. Meanwhile, the
Company engaged with compressor manufacturers such as Hitachi and Siemens for long-term co-operations, and
laid a good foundation for future invading of high-end international markets. In gas turbine area, we have won the
bidding competition for Heavy Steel project with contract of over RMB400 million.
In the report term, the Company kept promoting technical innovation and product development to support the
marketing effort. The 150MW product featured high pressure, reheating, dual cylinder, dual axis, and dual exhaust
has passed the feasibility and technical examination. Along with the LNG (Liquid Natural Gass) Project,
designing of low pressure vane was completed. Sample project for mega level nuclear power plant water pump
was fully accelerated. Gas turbine for heavy steel project was under designing. PTA project has achieved great
breakthrough. Through implementation of American projects and South Korean projects, the Company has
upgraded in technologies, production, and especially quality control.
The Company undertook product structure adjustment and further improved quality control. The overall
production has decreased but there still a number of difficulties in the production process. Production of key
projects such as gas turbine and American project have been raising new technical demands. The Company
established an administration mechanism specially for key projects including 7 turbine sets in America. In
production administration, the Company paid further effort in cost control. Through cost optimizing process and
redesigning, cost control has achieved great effect in the report term. Great attention was paid on quality and
process control. Exported products to Turkey and Poland have been awarded CE certificates, and products to
America has passed the port inspection and awarded band 1 of inspection certificates. Supply chain management
was reinforced to shorten deliver circle and reduce purchasing costs. Information technologies were adopted to
improve cost control.
In the report term, for adjustment of product structure, the packaged business of the Company and the subsidiaries
were declining. Though the Auxiliary Co., Casting Co., Zhongneng Co., and Machinery Co., were facing the
difficulties and achieved growth in other business areas and did great job in obtaining orders.
2. Countermeasures for problems and difficulties
Impacted by the global financial crisis, the Company has suffered from declining of orders. Business situation in
the 2nd half of 2009 is still not clear along with the domestic economy. On the other side, some of the contracts
have been rescheduled frequently due to change of investment schedules, which caused great uncertainty to the
production and sales arrangement.
Severe competition caused declining of sales price. Along with the large investment of national government in
infrastructure construction, the raw material market may be restored, which may bring pressure to the cost of
products.
Clients have been requiring higher standard in performance, service, price, and production circle. Demand in
customized products is increasing, which provided higher requirement on the Company’s designing andHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
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production processes.
In the report term, the Company’s receivable accounts kept increasing, which may cause increase in financial
expenses in the 2nd half of year.
Countermeasures and strategies for the 2nd half of year:
a) Reinforce market planning, integrate sales resources, reinforce existing target markets.
b) Accelerate innovation and production upgrading, set foot in high-end products.
c) Accelerate co-operations, expanding production chain, explore new markets.
d) Promote refined production management, increase flexibility of product structures.
e) Reinforce cost management, promote process management and improve fundamental
administrations.
f) Limit contract risks, reinforce project follow-up, reduce receivable accounts and
inventories.
(II) Business indices of the report term
1. Productions RMB0’000
No. Items Jan-Jun
2009
Jan-Jun
2008
Increase/decrease
(%)
1 Turnover 164,652.78 139,824.20 17.76
2 Investment gains (“-“ for loss) 2,989.81 3,015.93 -0.87
3 Operative profit (“-“ for loss) 33,781.15 29,945.24 12.81
4 Non-business income 347.90 102.47 240.49
5 Non-operational expenditure 286.83 493.49 -41.88
6 Gross profit (“-“ for loss) 33,843.22 29,554.22 14.51
7 Net profit (attributable to the owners’ equity of the parent
company) 23,878.10 19,427.80 22.91
8 Net increasing of cash and cash equivalents -2，374.32 18,018.12 -113.18
In the first half of year, financial indices such as major productions and sales income have increased at certain
level, the causations are as the followings:
(1) Turnover increased by 17.76% over the same period of last year, which was caused by increasing of waste heat
power station and auxiliary machinery businesses.
(2) Investment gains decreased by 0.87%, which was caused by transferring of shares of Zhejiang Tianyu
Shareholding Co., Ltd. in 2008.
(3) Operational profit has increased by 12.81%, which was caused by increasing of operation income.
(4) Non-business income incrased by 240.49%, which was caused by refunding of VAT to Casting Co., and
government subsiday of RMB100 thousand. Package Engineering Co. the subsidiary of Zhongneng Co., received
RMB1,163,100.00 from Hangzhou Xiacheng District Bureau as government subsidy; (2) According to 杭财企
2008(1211) – “Awarding Subsidy to the Second Lot of Technical Innovation Projects”, Auxiliary Co. received
RMB600 thousand.
(5) Non-business expenditures decreased by 41.88%, which was caused by decrease of donation from the same
period of last year by RMB1.763 million.
(6) Total profit increased by 14.51%, which was caused by increasing of turnover.
(7) Net profit (attributable to the owners of the parent company) increased by 22.91%, which was caused byHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
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increase of turnover. On the other hand, the income tax applicable to the Company and Zhongneng Co. was 25%
and it was 15% for the current term.
(8) Cash and cash equivalents decreased by 113.18%, which was caused by decrease of capital received from sales
of goods and providing of services decreased by RMB267.8498 million.
2. Capital structure and change of expenses
2.1 In the report term, the change of the data of the same items in the same statements in the accounting
statements exceeding 30% (including 30%) is detailed as follows: RMB0’000
Items
End of
term
Beginning of
term
Ratio of change
(%)
Cause of change
Construction in process 6,663.55 3,708.39 79.69 Details in VII(I)9 of the Financial Report
Notes receivable 19,848.75 29,820.32 -33.44 Details in VII(I)14 of the Financial
Report
Account payable 39,596.04 28,386.16 39.49 Details in VII(I)15 of the Financial
Report
Employees’ wage
payable 12,297.74 1,995.24 516.35 Details in VII(I)17 of the Financial
Report
Tax payable 3,749.92 2,236.13 67.70 Details in VII(I)18 of the Financial
Report
Other account payable 5,050.32 3,617.44 39.61 Details in VII(I)19 of the Financial
Report
Other current liability 100.00 1,470.00 -93.20 Details in VII(I)20 of the Financial
Report
2.2 Change of main expenses in the report term RMB0’000
No. Items Jan-Jun 2009 Jan-Jun 2008 Increase/decrease (%)
1 Sales expense 4,545.87 5,168.79 -12.05
2 Administrative expense 24,992.21 15,788,71 58.29
3 Financial expenses -636.83 7.90 -8,161.14
For the first half, along with the achieving of merit performance, the sales and administrative expenses have
increased, while the sales expenses and financial expenses have decreased from the same period of last year.
(1) Sales expenses decreased by 12.05%, which was caused by decrease of freight.
(2) Administrative expenses increased by 58.29%, caused by drawing of partial wages.
(3) Financial expenses decreased by 8,161.14%, which was caused by significant increase of foreign currency
exchange income from the same period of last year. For details please go to VII(II)3 of the Notes to Financial
Statements.
3. Change of cash flow in the report term in RMB0’000
Items Jan-Jun 2009 Jan-Jun 2008 Ratio of change
Cash flow generated by business operation,
net -977.40 24,011.93 -104.07
Net cash flow generated by investment 430.43 -1,066.34 140.37
Net cash flow generated by financing -3,131.65 -4,904.50 36.15
Causations:
(1) Net cash flow from business operation decreased by 104.07%, which was caused by decrease of product and
service revenue;
(2) Net cash flow from investment activities increased by 140.37%, which was caused by retrieving of share
transferring payment of RMB30 million regarding Zhejiang Tianyu Shareholding Co., Ltd. in the same period of
last year.
(3) Net cash flow from financing increased by 36.15%, which was caused by increasing of cash from loans.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
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4. Main business distribution based on industries and products RMB0’000
Distribution on industries
On industry or product Turnover Operation cost Gross profit ratio
(%)
Increase/decreas
e of turnover
over the same
period of last
year (%)
Increase/decreas
e of operation
cost over the
same period of
last year (%)
Increase/decrease
of gross profit
ratio over the
same period of
last year (%)
Boiler and power
machine manufacture 136,008.75 83,188.08 38.84% 12.32% 13.72% -0.75%
Casting 3,612.10 2,272.12 37.10% 0.37% 12.19% -6.63%
Petrochemical and other
special machineries 6,735.48 4,764.83 29.26% 440.46% 430.37% 1.36%
Packaged equipment for
waste heat power plant 10,275.60 6,423.67 37.49% 100.00% 100.00% 100.00%
Other special equipment 6,161.83 2,978.03 51.67% 33.23% -4.25% 18.97%
Total 162,793.76 99,626.72 38.80% 24.68% 25.82% -0.55%
Distribution on products
Industrial steam turbine 136,008.75 83,188.08 38.84% 12.32% 13.72% -0.75%
Casting products 3,612.10 2,272.12 37.10% 0.37% 12.19% -6.63%
Auxiliary machinery 6,735.48 4,764.83 29.26% 440.46% 430.37% 1.36%
Packaged equipment for
waste heat power plant 10,275.60 6,423.67 37.49% 100.00% 100.00% 100.00%
Others 6,161.83 2,978.03 51.67% 33.23% -4.24% 18.97%
Total 162,793.76 99,626.72 38.80% 24.68% 25.82% -0.55%
Including: The related transactions of selling products and providing services to the controlling shareholder and its
subsidiaries in the report term were amounted to RMB82.7666 million.
5. Distribution of major business on territories
In RMB 10 thousand
Yuan
Regions Turnover Increase/decrease of turnover
over the last year (%)
Domestic 149,269.71 33.13
Overseas 13,524.05 -26.68
Total 162,793.76 24.68
6. No major change happened to the profit composition, main business structure, and
profitability of the main businesses in the report term.
7. The Company conducted no other business operation which caused major influence on the
profit in the report term.
8. In the report term, no influence on the net profit for over 10% from individual affiliate of
the Company.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
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(III) Investment
1. Use of financing proceeds
No financing proceeds in the report term or carried over from previous report term.
2. Use of non-financing proceeds
No major investment by non-financing proceeds in the report term.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
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Chapter VI. Important Events
(I) Company Administration
In the report period，the Company constantly improved its corporate administration structure, strengthened
standardized operation and internal controlling system strictly according to the Company Law, the Securities Law,
and the Administration Standards of Listed Companies, aiming to guard the interests of the shareholders.
In the report term, followed with the regulations of the Company Law and Articles of Association, the Company
replaced the directors, supervisors and executives who had reached the legal retiring ages, and added members to
each professional committee of the Board.
The Company was completely independent from the controlling shareholder in aspects of business, personnel,
asset, organization and accounting. Decision-making and information disclosing procedures concerning major
investment and related transactions have been carried out according to the laws and regulations. No
non-operational capital adoption happened in relation to the controlling shareholder and its subsidiaries.
(II) Dividend plan implemented in the report term
The Dividend Plan 2008 raised by the Board of Directors was approved by the Annual General Meeting 2008 held
on May 20, 2009. Which was: basing on 371.8 million of total capital shares at present, RMB4.00 would be
distributed to each 10 shares by the distributable profit. Totally RMB148.72 million would be distributed, and the
retained will be carried over to the next fiscal year.
The above dividend plan has been implemented in the report term. The final trading day of B shares was June 15,
2009, the ex-dividend day was June 16, 009, the registration day for B shares was June 18, 2009. All of the
dividends have been transferred to the shareholders’ capital account through the stockbroker on June 18, 2009.
(For details please see Announcement 2009-15 released on Shanghai Securities Daily, Securities Times, Hong
Kong Commercial Daily and Http://www.cninfo.com.cn dated June 9, 2009.)
(III) Profit distribution plan for the first half of 2009
Neither profit distribution nor capitalizing of common reserves will be carried out for the first half of 2009.
(IV) The Company conducted no asset acquisition, disposing, or major reorganizing events in
the report term
(V) No external guarantee happened in the report term, nor carried over from previous report
term
(VI) Related transactions
1. No major related transactions in the report term.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
17
2. Operational credits and debts with related parties in the report term:
In RMB 10 thousand
Yuan
Fund provided to the related
parties
Accept money from the related
Related parties parties
Amount occurred Balance Amount occurred Balance
Hangzhou Steam Turbine Power Group Co., Ltd. 761.80 94.40 983.01 2,821.61
Hangzhou Steam Turbine Power Sales Co., Ltd. 8,005.34 6,738.83 6,527.99 6,742.02
HSTG Nanfang Sales Co. 0.00 2.00 0.00 0.00
Hangzhou Nanfangtongda Gears Co., Ltd. 39.20 39.20 741.90 43.07
HSTG Energy Tech Co., Ltd. 0.00 7.50 0.00 0.00
Hangzhou Hangfa Power Generating Equipment Co., Ltd. 4,997.98 1,722.09 660.00 643.80
Hangzhou Relian International Trading Co. 9.89 9.89 9.89 0.00
Hangzhou Hangfa Group 42.40 19.20 0.00 0.00
Hangzhou Steam Turbine Automobile Sales Service Co.,
Ltd. 0.00 0.00 620.63 721.88
Hangzhou Nanhua Wooden Packaging Co., Ltd. 0.00 0.00 531.29 9.96
Hangzhou Dongfeng Shipyard Co., Ltd. 0.00 0.00 82.88 39.84
Hangzhou Steam Turbine Industrial Co. 0.00 0.00 0.62 12.55
HSTG Technology Association 0.00 0.00 5.13 0.00
Total 13,856.61 8,633.11 10,163.34 11,034.73
3. No non-operational credit or debt or guarantees with related parties occurred in the report term.
(VII) No major lawsuit in the report term.
(VIII) No major contract in the report term.
(IX) No investment in securities or other company’s shares in the report term.
(X) No holding shares of unlisted shares of financial institutions in the report term.
As of June 30, 2009, the Company was holding shares of Bank of Hangzhou as the following, in RMB Yuan
Name Accumulated
investment
Accumulated
amount of shares Share portion
Bank of Hangzhou Co., Ltd. 390.95404 mil 115.5932 mil 8.75%
(XI) Independent Directors’ Special Statement and Independent Opinion on the Capital
Adoption and External Guarantee
According to Announcement 证监发[2003]56 号 issued by CSRC, 证监发[2005]120 号 issued by CSRC and
CBRC, and 上市部函[2006]25 号 issued by CSRC, as the independent directors of Hangzhou Steam Turbine
Co., Ltd., we have observed and verified the situations about capital adoption and providing of external
guarantees, and issued the following independent opinions
1.As of June 30, 2009, all of the capital trades between the Company and the holding shareholder were due to
business operation without illegal capital adoption. We found no capital adoption by controlling shareholder or
other related parties.
2. As of June 30, 2009, the Company never conducted any external guarantee and no such guarantee happened in
previous terms and carried over to the current term.
The independent directors: Zhang Mingguang, Zhou Zhaoxue, Hua Xiaoning, Qi GuoningHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
18
August 5, 2009
(XII) No commitment issues happened in the report term or carried over from previous terms
due to the Company or shareholders of the Company with 5% or over of shares in the report
term, which may cause major influences on the business performance or financial positions.
(XIII) In the report term, none of the directors, supervisors, executives, shareholders,
substantial dominators, buyer of the Company was investigated by relative departments,
executed by legal & discipline departments, delivered to legal departments, appeared for
crime, investigated or punished by China Securities Regulatory Commission, restricted to
security market, criticized publicly, regarded as improper person, punished by other executive
departments, or publicly condemned by the Stock Exchange.
(XIV) Particulars about reception of investigations, communications, and visiting in the
report term
Time/date Place Way Visitors Main content involved and material provided
Jan 04
2009
The
Company
Onsite
investigation
Individual
shareholder
Application of the products, B share’s way out,
market environment of year 2009
Feb 12
2009
The
Company
Onsite
investigation Boshi Fund Market share, annual remuneration, sate of personnel
and sales
Feb 16,
2009
The
Company
Onsite
investigation
Individual
shareholder
Market trend of 09, relationship between the share
price and the Company’s performance
Jun 03
2009
The
Company
Onsite
investigation
Beijing
University
Industry competition, dividend strategy, equipment
manufacturing
June 11,
2009
The
Company
Onsite
investigation Yongjin Assets Industrial trend, product prospect, portion of private
enterprises in clients, gas turbine
June 23,
2009
The
Company
Onsite
investigation
Individual
shareholder
Profit and order prospect, Bank of Hangzhou, moving
of the Company
June 25,
2009
The
Company
Telephone
conference
Huili
Foundation
Profitability of 2008, profitability and productivity
prospect, comparing of business situation with 2009
(XV) Provisional announcements released in the report term
Announcement
No. Date Content Official media Official website
Lin 2009-01 January 6, 2009 Announcement on change of
name of the auditing agent
Securities Time
Shanghai Securities Daily http://www.cninfo.com.cn
Lin 2009-01 February 7, 2009
Announcement on adjusting of
income tax rate upon entitling of
high-tech enterprise
Securities Time
Shanghai Securities Daily http://www.cninfo.com.cn
Lin 2009-02 February 17, 2009
Resolutions of the 1st Provisional
Board Meeting 2009
(Voted via telecommunication)
Securities Time
Shanghai Securities Daily http://www.cninfo.com.cn
Lin 2009-03 February 24, 2009
Announcement on illegal trading
of the Company’s shares by
executive of the Company
Securities Time
Shanghai Securities Daily http://www.cninfo.com.cn
Lin 2009-04 March 6, 2009
Resolutions of the 2nd
Provisional Board Meeting of
2009 (Telecommunication)
Securities Time
Shanghai Securities Daily http://www.cninfo.com.cnHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
19
Lin 2009-05 March 6, 2009
Announcement for the 1st
Provisional Shareholders’
Meeting 2009
Securities Time
Shanghai Securities Daily,
Hong Kong Commercial
Daily
http://www.cninfo.com.cn
Lin 2009-06 March 17, 2009
Announcement about
independent director Zhang
Mingguang and Zhou Zhaoxue
are not taking wages from the
Company
Securities Time
Shanghai Securities Daily http://www.cninfo.com.cn
Lin 2009-07 March 26, 2009
Resolutions of the 1st Provisional
Shareholders’ Meeting 2009
Securities Time
Shanghai Securities Daily,
Hong Kong Commercial
Daily
http://www.cninfo.com.cn
Lin 2009-08 March 26, 2009 Resolutions of the 7th Meeting of
the 4th Term of Board
Securities Time
Shanghai Securities Daily http://www.cninfo.com.cn
Lin 2009-09 April 4, 2009
Announcement on Ms. Shao
Linna’s retiring from the
Supervisory Committee
Securities Time
Shanghai Securities Daily http://www.cninfo.com.cn
Lin 2009-10 April 9, 2009 Announcement of performance
increasing prospect
Securities Time
Shanghai Securities Daily http://www.cninfo.com.cn
Lin 2009-11 April 30, 2009
Announcement on extending of
job terms of Lu Jianhua and Zhao
Ying for the positions of
employees’ supervisors
Securities Time
Shanghai Securities Daily http://www.cninfo.com.cn
2009-01 April 27, 2009 Annual Report 2008 Summary
Securities Time
Shanghai Securities Daily
Hong Kong Commercial
Daily
http://www.cninfo.com.cn
2009-02 April 27, 2009 Annual Report 2008 http://www.cninfo.com.cn
2009-03 April 27, 2009 Financial Report 2008 http://www.cninfo.com.cn
2009-04 April 27, 2009 Resolutions of the 8th Meeting of
the 4th Term of Board
Securities Time
Shanghai Securities Daily http://www.cninfo.com.cn
2009-05 April 27, 2009
Announcement for the
Shareholders’ Annual Meeting
2008
Securities Time
Shanghai Securities Daily
Hong Kong Commercial
Daily
http://www.cninfo.com.cn
2009-06 April 27, 2009
Resolutions of the 5th meeting of
the 4th term of Supervisory
Committee
Securities Time
Shanghai Securities Daily
http://www.cninfo.com.cn
2009-07 April 27, 2009 Self-inspection report on internal
controlling system 2008 http://www.cninfo.com.cn
2009-08 April 27, 2009 Financial Report 2008 (Excel) http://www.cninfo.com.cn
2009-09 April 27, 2009 Capital adoption report 2008 http://www.cninfo.com.cn
2009-11 April 27, 2009 Related transactions occurred in
2008 and expected for 2009 http://www.cninfo.com.cn
2009-12 April 30, 2009 The 1st Quarterly Report 2009
Full Text http://www.cninfo.com.cn
2009-13 April 30, 2009 The 1st Quarterly Report 2009
Official Text
Securities Time
Shanghai Securities Daily
Hong Kong Commercial
Daily
http://www.cninfo.com.cn
2009-14 May 21, 2009 The Resolutions of Shareholders’
Annual Meeting 2008
Securities Time
Shanghai Securities Daily
Hong Kong Commercial
Daily
http://www.cninfo.com.cn
2009-15 June 9, 2009 Announcement of dividend for
2008
Securities Time
Shanghai Securities Daily
Hong Kong Commercial
Daily
http://www.cninfo.com.cnHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
20
Chapter VII. Financial Report (Not Audited)
(I) Financial Statements
Balance Sheet
Prepared by: Hangzhou Steam Turbine Co., Ltd. Ended June 30, 2009 in
RMB Yuan
Balance at the Items Consolidated P eanrde notf ctoemrmp any BCaolnansoclei daat ttehde begPianrneinntg c oomf ypeaanry
Current asset:
Monetary capital 426,359,868.41 85,653,797.48 450,103,030.94 158,711,304.02
Settlement provision
Outgoing call loan
Transactional financial assets
Notes receivable 345,172,163.58 251,132,764.88 374,122,522.90 279,142,200.00
Account receivable 1,273,082,540.71 1,073,413,196.07 1,184,421,641.17 1,045,972,821.97
Prepayment 230,488,371.99 131,431,694.48 230,097,109.65 84,096,664.49
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance contracts
receivable
Interest receivable
Dividend receivable 17,212,500.00
Other account receivable 22,269,953.45 28,467,453.23 17,241,574.65 13,786,223.02
Repurchasing of financial assets
Inventories 1,278,146,088.17 1,004,317,409.85 1,192,643,294.30 850,043,203.46
Non-current asset due in 1 year
Other current asset 266,754.17 236,603.00
Total of current asset 3,575,785,740.48 2,574,416,315.99 3,448,865,776.61 2,448,964,916.96
Non-current assets
Loans and payment on other’s behalf
disbursed
Disposable financial asset
Expired investment in possess
Long-term receivable
Long-term share equity investment 408,093,320.85 457,786,968.70 408,093,320.85 455,849,320.85
Investment properties
Fixed assets 503,827,490.33 378,218,006.35 523,475,639.79 397,301,612.80
Construction in process 66,635,499.22 12,613,594.51 37,083,938.18 11,299,250.13
Engineering goods
Fixed asset disposal
Production physical assets
Gas & petrol
Intangible assets 73,057,613.87 47,902,806.89 102,596,697.16 49,081,454.61
R&D expense
Goodwill
Long-term amortizable expenses 10,140,110.37 9,467,565.08 10,370,103.45 9,467,565.08
Differed income tax asset 37,211,077.91 30,966,989.05 39,120,424.79 30,966,989.05
Other non-current asset
Total of non-current assets 1,098,965,112.55 936,955,930.58 1,120,740,124.22 953,966,192.52
Total of assets 4,674,750,853.03 3,511,372,246.57 4,569,605,900.83 3,402,931,109.48
Current liabilities
Short-term loans 216,000,000.00 150,000,000.00 181,000,000.00 100,000,000.00Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
21
Loan from Central Bank
Deposit received and hold for others
Call loan received
Trade off financial liabilities
Notes payable 198,487,455.22 251,764,133.22 298,203,241.55 366,981,929.55
Account payable 395,960,425.94 311,249,782.41 283,861,630.55 221,991,259.71
Prepayment received 1,196,727,532.39 858,573,292.05 1,497,363,927.16 1,056,118,723.46
Selling of repurchased financial assets
Fees and commissions receivable
Employees’ wage payable 122,977,444.19 112,981,574.92 19,952,410.05 12,844,851.17
Tax payable 37,499,197.30 19,081,585.10 22,361,297.05 13,811,247.32
Interest payable
Dividend payable 114,125.00
Other account payable 50,503,174.32 36,958,870.08 36,174,381.34 26,661,061.72
Reinsurance fee payable
Insurance contract provision
Entrusted trading of securities
Entrusted selling of securities
Non-current liability due in 1 year
Other current liability 1,000,000.00 14,700,000.00
Total of current liability 2,219,155,229.36 1,740,609,237.78 2,353,731,012.70 1,798,409,072.93
Non-current liabilities
Long-term borrowings 147,463,800.00 90,463,800.00
Bond payable
Long-term payable 330,000.00 330,000.00
Special payable 177,150.00
Expected liabilities
Differed income tax liability 1,225,374.71 1,225,374.71 1,225,374.71 1,225,374.71
Other non-recurring liabilities 7,663,710.00 6,188,250.00 6,523,710.00 5,048,250.00
Total of non-current liabilities 156,860,034.71 97,877,424.71 8,079,084.71 6,273,624.71
Total of liability 2,376,015,264.07 1,838,486,662.49 2,361,810,097.41 1,804,682,697.64
Owners’ equity (or shareholders’ equity)
Capital paid in (or share capital) 371,800,000.00 371,800,000.00 371,800,000.00 371,800,000.00
Capital reserves 138,930,847.24 138,953,250.09 138,953,250.09 138,953,250.09
Less: Shares in stock
Special reserves
Surplus reserves 279,205,827.20 260,449,422.07 279,205,827.20 260,449,422.07
Common risk provision
Retained profit 1,201,413,780.16 901,682,911.92 1,111,352,798.36 827,045,739.68
Different of foreign currency
translation
Total of owner’s equity belong to the
parent company 1,991,350,454.60 1,672,885,584.08 1,901,311,875.65 1,598,248,411.84
Minor shareholders’ equity 307,385,134.36 306,483,927.77
Total of owners’ equity 2,298,735,588.96 1,672,885,584.08 2,207,795,803.42 1,598,248,411.84
Total of liabilities and owners’ equity 4,674,750,853.03 3,511,372,246.57 4,569,605,900.83 3,402,931,109.48Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
22
Income Statement
Prepared by: Hangzhou Steam Turbine Co., Ltd. Jan - Jun 2009 in RMB Yuan
Amount of Items Consolidatedt he CPaurrernent tc oTmerpma ny CAomnsooulnidt aotef dth e PPraerveinotu cs oTmerpman y
I. Total revenue 1,646,527,768.37 1,073,162,456.36 1,398,242,002.19 1,075,545,052.24
Incl. Business income 1,646,527,768.37 1,073,162,456.36 1,398,242,002.19 1,075,545,052.24
Interest income
Insurance fee earned
Fee and commission received
II. Total business cost 1,338,614,316.66 897,083,253.50 1,128,948,898.21 920,071,519.53
Incl. Business cost 1,012,507,507.68 647,775,737.01 879,583,933.66 736,759,885.33
Interest expense
Fee and commission paid
Insurance discharge payment
Net claim amount paid
Net insurance policy reserves
provided
Insurance policy dividend paid
Reinsurance expenses
Business tax and surcharge 5,160,353.50 1,470,364.64 3,627,209.98 827,326.25
Sales expense 45,458,660.63 31,560,637.45 51,687,921.69 36,446,471.91
Administrative expense 249,922,132.65 201,008,922.60 157,887,065.50 111,741,110.18
Financial expenses -6,368,268.96 -8,223,147.20 79,033.09 162,584.10
Asset impairment loss 31,933,931.16 23,490,739.00 36,083,734.29 34,134,141.76
Plus: Gains from change of fair value
(“-“ for loss)
Investment gain (“-“ for loss) 29,898,083.98 74,878,300.00 30,159,265.48 59,221,057.99
Incl. Investment gains from
affiliates
Gains from currency exchange
(“-“ for loss)
III. Operational profit (“-“ for loss) 337,811,535.69 250,957,502.86 299,452,369.46 214,694,590.70
Plus: Non business income 3,489,025.96 274,985.76 1,024,711.00 435,111.00
Less: Non-business expenses 2,868,349.38 1,673,162.45 4,934,926.45 2,152,321.84
Incl. Loss from disposal of
non-current assets
IV. Gross profit (“-“ for loss) 338,432,212.27 249,559,326.17 295,542,154.01 212,977,379.86
Less: Income tax expenses 50,301,587.28 26,202,153.93 49,893,324.37 38,439,080.47
V. Net profit (“-“ for net loss) 288,130,624.99 223,357,172.24 245,648,829.64 174,538,299.39
Net profit attributable to the owners
of parent company 238,780,981.80 223,357,172.24 194,278,048.82 174,538,299.39
Minor shareholders’ equity 49,349,643.19 51,370,780.82
VI. Earnings per share:
(I) Basic earnings per share 0.6422 0.5225
(II) Diluted earnings per share 0.6422 0.5225Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
23
Cash Flow Statement
Prepared by: Hangzhou Steam Turbine Co., Ltd. Jan - Jun 2009 in RMB
Yuan
Items CAonmsooulindta toefd the CPaurrerennt tc Tomerpma ny CAomnsooulindta otef dth e PPraerveinotu cs oTmerpman y
I. Net cash flow from business operation
Cash received from sales of products and providing of
services 1,406,430,485.49 938,720,443.94 1,674,280,258.24 1,192,274,441.36
Net increase of customer deposits and capital kept for
brother company
Net increase of loans from central bank
Net increase of inter-bank loans from other financial
bodies
Cash received against original insurance contract
Net cash received from reinsurance business
Net increase of client deposit and investment
Net increase of trade financial asset disposal
Cash received as interest, processing fee, and
commission
Net increase of inter-bank fund received
Net increase of repurchasing business
Tax returned 15,999,725.87 14,407,182.93
Other cash received from business operation 20,064,437.32 2,191,871.00 14,866,167.13 2,125,991.38
Sub-total of cash inflow from business activities 1,442,494,648.68 955,319,497.87 1,689,146,425.37 1,194,400,432.74
Cash paid for purchasing of merchandise and services 1,042,124,631.51 839,332,022.58 1,032,421,732.59 793,880,152.18
Net increase of client trade and advance
Net increase of savings in central bank and brother
company
Cash paid for original contract claim
Cash paid for interest, processing fee and commission
Cash paid for policy dividend
Cash paid to staffs or paid for staffs 191,294,908.68 152,196,676.51 171,668,235.27 146,476,221.39
Taxes paid 160,723,076.96 100,812,561.79 175,777,108.88 125,529,583.03
Other cash paid for business activities 58,126,016.46 20,394,180.04 69,160,009.11 35,350,916.42
Sub-total of cash outflow from business activities 1,452,268,633.61 1,112,735,440.92 1,449,027,085.85 1,101,236,873.02
Cash flow generated by business operation, net -9,773,984.93 -157,415,943.05 240,119,339.52 93,163,559.72
II. Cash flow generated by investing
Cash received from investment retrieving 30,000,000.00 30,000,000.00
Cash received as investment gains 30,114,561.65 92,090,800.00 28,771,057.99 59,221,057.99
Net cash retrieved from disposal of fixed assets,
intangible assets, and other long-term assets 146,400.00 146,400.00 169,505.00 127,505.00
Net cash received from disposal of subsidiaries or other
operational units
Other investment-related cash received
Sub-total of cash inflow due to investment activities 30,260,961.65 92,237,200.00 58,940,562.99 89,348,562.99
Cash paid for construction of fixed assets, intangible
assets and other long-term assets 24,019,009.01 7,944,707.66 69,003,970.65 27,509,099.75
Cash paid as investment 1,937,647.85 1,937,647.85 600,000.00
Net increase of loan against pledge
Net cash received from subsidiaries and other
operational units
Other cash paid for investment activities
Sub-total of cash outflow due to investment
activities 25,956,656.86 9,882,355.51 69,603,970.65 27,509,099.75
Net cash flow generated by investment 4,304,304.79 82,354,844.49 -10,663,407.66 61,839,463.24
III. Cash flow generated by financing
Cash received as investment
Incl. Cash received as investment from minor
shareholders
Cash received as loans 287,463,800.00 140,463,800.00 120,000,000.00 100,000,000.00
Cash received from bond placingHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
24
Other financing-related cash received
Subtotal of cash inflow from financing activities 287,463,800.00 140,463,800.00 120,000,000.00 100,000,000.00
Cash to repay debts 105,000,000.00
Cash paid as dividend, profit, or interests 210,780,258.38 151,503,175.10 169,044,950.00 148,720,000.00
Incl. Dividend and profit paid by subsidiaries to minor
shareholders
Other cash paid for financing activities 3,000,000.00
Subtotal of cash outflow due to financing activities 318,780,258.38 151,503,175.10 169,044,950.00 148,720,000.00
Net cash flow generated by financing -31,316,458.38 -11,039,375.10 -49,044,950.00 -48,720,000.00
IV. Influence of exchange rate alternation on cash and cash
equivalents 13,042,975.99 13,042,967.12 -229,809.25 -229,300.07
V. Net increase of cash and cash equivalents -23,743,162.53 -73,057,506.54 180,181,172.61 106,053,722.89
Plus: Balance of cash and cash equivalents at the
beginning of term 450,103,030.94 158,711,304.02 296,605,363.48 125,110,310.08
VI. Balance of cash and cash equivalents at the end of term 426,359,868.41 85,653,797.48 476,786,536.09 231,164,032.97Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
25
Consolidated Statement of Change in Owners’ Equity
Prepared by: Hangzhou Steam Turbine Co., Ltd. Interim Term 2009 in RMB Yuan
Amount of the Current Term Amount of Last Year
Owners’ Equity Attributable to the Parent Company Owners’ Equity Attributable to the Parent Company
Items Capital paid in
(or share
capital)
Capital
reserves
Less:
Shares
in
stock
Special
reserves
Surplus
reserves
Common
risk
provision
Retained profit Others
Minor
shareholders’
equity
Total of owners’
equity
Capital paid in
(or share
capital)
Capital
reserves
Less:
Shares
in
stock
Special
reserves
Surplus
reserves
Common
risk
provision
Retained profit Others
Minor
shareholders’
equity
Total of owners’
equity
I. Balance at
the end of
last year
371,800,000.00 138,953,250.09 279,205,827.20 1,111,352,798.36 306,483,927.77 2,207,795,803.42 371,800,000.00 138,953,250.09 233,666,771.29 731,962,827.31 226,269,752.75 1,702,652,601.44
Plus:
Change of
accounting
policy
Correcting
of previous
errors
Others
II. Balance at
the
beginning of
current year
371,800,000.00 138,953,250.09 279,205,827.20 1,111,352,798.36 306,483,927.77 2,207,795,803.42 371,800,000.00 138,953,250.09 233,666,771.29 731,962,827.31 226,269,752.75 1,702,652,601.44
III. Changed
in the current
year (“-“ for
decrease)
-22,402.85 90,060,981.80 901,206.59 90,939,785.54 45,539,055.91 379,389,971.05 80,214,175.02 505,143,201.98
(I) Net
profit 238,780,981.80 49,349,643.19 288,130,624.99 573,649,026.96 129,502,736.14 703,151,763.10
(II)
Gains/losses
accounted
into owners’
equity
directly
-20,128,380.54 -20,128,380.54
1.
Change in
fair value of
sellable
financial
assets, net
2.
Influence of
change in
other
owners’
equity of
investedHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
26
enterprises
on equity
basis
3.
Influence of
income tax
related to
owners’
equity items
4.
Others -20,128,380.54 -20,128,380.54
Total of (I)
and (II) 238,780,981.80 49,349,643.19 288,130,624.99 573,649,026.96 109,374,355.60 683,023,382.56
(III)
Investment
or decreasing
of capital by
owners
-22,402.85 -22,402.85 17,578,195.42 17,578,195.42
1.
Capital
inputted by
owners
6,300,000.00 6,300,000.00
2.
Amount of
shares paid
and
accounted as
owners’
equity
-22,402.85 -22,402.85
3.
Others 11,278,195.42 11,278,195.42
(IV) Profit
allotment -148,720,000.00 -48,448,436.60 -197,168,436.60 45,539,055.91 -194,259,055.91 -46,738,376.00 -195,458,376.00
1.
Providing of
surplus
reserves
45,539,055.91 -45,539,055.91
2.
Common
risk
provision
3.
Allotment to
the owners
(or
shareholders)
-148,720,000.00 -48,448,436.60 -197,168,436.60 -148,720,000.00 -46,738,376.00 -195,458,376.00
4.
Others
(V)
Internal
transferring
of owners’
equity
1.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
27
Capitalizing
of capital
reserves (or
to capital
shares)
2.
Capitalizing
of surplus
reserves (or
to capital
shares)
3.
Making up
losses by
surplus
reserves
4.
Others
IV. Balance
at the end of
this term
371,800,000.00 138,930,847.24 279,205,827.20 1,201,413,780.16 307,385,134.36 2,298,735,588.96 371,800,000.00 138,953,250.09 279,205,827.20 1,111,352,798.36 306,483,927.77 2,207,795,803.42Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
28
Change in Owners’ Equity (Parent Co.)
Prepared by: Hangzhou Steam Turbine Co., Ltd. Interim Term 2009 in RMB Yuan
Amount of the Current Term Amount of Last Year
Items Capital paid in (or
share capital)
Capital
reserves
Less:
Shares in
stock
Special
reserves
Surplus
reserves Retained profit Total of owners’
equity
Capital paid in (or
share capital)
Capital
reserves
Less:
Shares in
stock
Special
reserves
Surplus
reserves Retained profit Total of owners’
equity
I. Balance at the end of last year 371,800,000.00 138,953,250.09 260,449,422.07 827,045,739.68 1,598,248,411.84 371,800,000.00 138,953,250.09 214,910,366.16 565,914,236.47 1,291,577,852.72
Plus: Change of accounting policy
Correcting of previous errors
Others
II. Balance at the beginning of current
year 371,800,000.00 138,953,250.09 260,449,422.07 827,045,739.68 1,598,248,411.84 371,800,000.00 138,953,250.09 214,910,366.16 565,914,236.47 1,291,577,852.72
III. Changed in the current year (“-“ for
decrease) 74,637,172.24 74,637,172.24 45,539,055.91 261,131,503.21 306,670,559.12
(I) Net profit 223,357,172.24 223,357,172.24 455,390,559.12 455,390,559.12
(II) Gains/losses accounted into
owners’ equity directly
1. Change in fair value of sellable
financial assets, net
2. Influence of change in other
owners’ equity of invested enterprises
on equity basis
3. Influence of income tax related
to owners’ equity items
4. Others
Total of (I) and (II) 223,357,172.24 223,357,172.24 455,390,559.12 455,390,559.12
(III) Investment or decreasing of
capital by owners
1. Capital inputted by owners
2. Amount of shares paid and
accounted as owners’ equity
3. Others
(IV) Profit allotment -148,720,000.00 -148,720,000.00 45,539,055.91 -194,259,055.91 -148,720,000.00
1. Providing of surplus reserves 45,539,055.91 -45,539,055.91
2.Allotment to the owners (or
shareholders -148,720,000.00 -148,720,000.00 -148,720,000.00 -148,720,000.00
3. Others
(V) Internal transferring of owners’
equity
1. Capitalizing of capital reserves
(or to capital shares)
2. Capitalizing of surplus reserves
(or to capital shares)
3. Making up losses by surplus
reserves
4. Others
IV. Balance at the end of this term 371,800,000.00 138,953,250.09 260,449,422.07 901,682,911.92 1,672,885,584.08 371,800,000.00 138,953,250.09 260,449,422.07 827,045,739.68 1,598,248,411.84Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
29
(II) Notes to Financial Statements
I. Company Profile
Hangzhou Steam Turbine Co., Ltd. (the Company) was incorporated as a joint stock limited company exclusively promoted by
Hangzhou Steam Turbine & Power Group Company Limited (“HSTG”) approved by the Securities Regulatory Commission of the
State Council with the Document SRC [1998] No. 8 by offering domestically listed foreign currency ordinary shares (B Shares),
with registration date: April 23, 1998, legal entity business license No.: QGZZ Zi No. 002150, current registered capital RMB
220,000,000. The Company has issued 80,000,000 B Shares which have been listed for trading with Shenzhen Stock Exchange
commencing from April 28, 1998. On December 2, 1998, the Company became a joint stock enterprise with foreign investment
through approval by the State Ministry of Foreign Trade and Economic Cooperation with the document [1998]外经贸资二函字第
745 号.
On June 8th 2006, as approved at the Shareholders’ Annual Meeting 2005, the Company capitalized the common reserves upon the
total capital shares of 220 million shares at December 31, 2005, namely 3 new shares to each 10 shares. After that, the total of
capital shares was changed to 286 million shares, and the registered capital was changed to RMB286 million thereof. Registration
alternation procedures have been accomplished on December 31, 2006.
On June 15th 2006, as approved at the Shareholders’ Annual Meeting 2006, the Company capitalized the common reserves upon the
total capital shares of 286 million shares at December 31, 2006, namely 3 new shares to each 10 shares (tax included). After that,
the total of capital shares was changed to 371.8 million shares, and the registered capital was changed to RMB371.8 million thereof.
Registration alternation procedures have been accomplished in December, 2007.
The scope of key business of the Company: The design and manufacturing of steam turbine, gas turbine, other rotating and
to-and-fro machinery and auxiliary equipment, and spare parts and components, sales of self-manufactured products and the
provision of relevant after-sales service and import & export service.
II. Basis and method adopted in preparing of the Financial Statements
The finance report compiled by the Company is accordance with the Enterprise Accounting Standard released by Department of
Finance in February 2006, namely the accounting policies and estimations described in Note 3 – “Major accounting policies and
estimations adopted by the Company”.
III. The main accounting policies and accounting estimations adopted
(I) Statement of compliance to the Enterprise Accounting Standard
The finance report compiled by the Company is accordance with the enterprise accounting standard, it reflects the Company’s
finance state, achievements and cash flow fairly and entirely.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
30
(II) Basis for preparing the financial statements
The Company adopts perpetual operation as the basis of financial statements.
(III) Accounting period
The Company uses the calendar year for its fiscal year. A fiscal year is from January 1 to December 31.
(IV) Standard currency for bookkeeping
The Company uses Renminbi (RMB) as the standard currency for book keeping.
(V) Accounting measurement attributes
Finance asset, finance debt, finance asset capable of sale, derived finance tools were calculated by fair value; delayed stock products,
fixed asset caused by exceeding normal credit when purchasing were calculated by current value of purchasing price; stock products
which subtracted value were calculated by real value, other assets which subtracted value were calculated by returnable value (the
higher between fair value and current value); Asset inventory surplus was calculated by replacement cost.
(VI) Recognition of cash and cash equivalents
Cash equivalent refers to the investment held by the Company with short term (due within 3 months from the purchase date), strong
liquidity and low risk of value fluctuation that is easy to be converted into cash of known amount.
(VII) Foreign currency translating
Foreign currency business occurred was translated by reasonably defined, similar rate of RMB to the rate on the business happened
date. The foreign end term balances of all foreign currency accounts, foreign currency projects were calculated by the rate on the
due date of balance sheet, the difference value was added into current term gain or loss; the non-currency foreign projects which
had calculated by historical cost were recalculated by the rate of the transaction date; the non-currency foreign projects which had
calculated by fair value were calculated by the rate of the date of defining fair value, the difference value was added into current
term fair value gain or loss
(VIII) Financial instruments recognition and accounting
1. Type of finance asset and finance debt
Finance assets are divided initially into four types of financial asset appointed to be measured at fair value with their changes are
accounted into current gain/loss accounts(including transactional finance asset and financial asset appointed to be measured at fair
value with their changes are accounted into current gain/loss accounts), transactional financial assets, debt and account receivable,
finance asset saleable.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
31
Finance debts are divided initially into two types of financial debt appointed to be measured at fair value with their changes are
accounted into current gain/loss accounts(including transactional finance debt and financial debt appointed to be measured at fair
value with their changes are accounted into current gain/loss accounts), other finance debt.
2. Basis of recognition and accounting of finance asset and finance debt
When the Company is one part of the finance instrument contract, one finance asset or debt is recognized. When on recognizing
initially finance asset or debt, it is measured by fair value, for the finance asset or debt which appointed to be measured at fair value
with their changes are accounted into current gain/loss accounts, the related transaction expenses are directly accounted into current
gain and loss; for other finance asset and debt, the related transaction expenses accounted into the initial recognition account.
The Company future measures finance asset by fair value without deducting future possible transaction fee but with exception: (1)
Due investment, debt and account receivable are measured by actual interest rate according to the amortized costs. (2) Equity
instrument investment which have no quote in active market and which fair value can’t be measured reliably, and its derived finance
assets which are connected with the equity instrument and which are summarized through the equity instrument, are measured by
cost.
The Company conduct successive measure of finance debt according to amortized cost by actual interest rate with exception as
following: (1) finance debt which appointed to be measured at fair value with their changes are accounted into current gain/loss
accounts, is measured at fir value without deducting possible future transactional fee at settlement; (2) Equity instrument investment
which have no quote in active market and which fair value can’t be measured reliably, and its derived finance assets which are
connected with the equity instrument and which are closed off through the equity instrument, are measured by cost. (3) finance debt
sponsorship contracts which are not appointed to be measured at fair value with their changes are accounted into current gain/loss
accounts, or debt agreements at rate lower than market rate and which are not appointed to be measured at fair value with their
changes are accounted into current gain/loss accounts, are measured at the higher value between the optimal estimated value
payable according to current obligations and the surplus value from which the initial recognition value deduct the accumulated
amortized amount according to the actual interest rate.
Gain or loss from fluctuation of financial assets or liabilities are handled at the following ways, except for relating to hedge
instrument.
(1) Gain or loss from fluctuation of fair value of financial assets or liabilities and accounted into current gain/loss account, are
accounted into gain/loss of fluctuation of fair value. Interests or cash dividend received in the period of holding these assets are
recognized as investment gains. When they are disposed, the difference between the amount actually received and initially booked
value is recognized as investment gains, and adjust the gain/loss from fair value fluctuation.
(2) Fluctuation of fair value of sellable financial assets accounted into capital reserves; interests gained at actual interest rate are
accounting into investment gains; the cash dividend received from sellable instrument investment, are accounted into investment
gains when distributed; At disposal of these investment, the difference between actual amount received and book value are
recognized as investment gains after deducting of accumulated change of fair value which are originally accounted into capital
reserves.
3. Basis of recognition and accounting of finance asset transfer
The Company stop recognizing the finance asset which risks and remuneration of ownership are transferred to the receiver; and
continue to recognize the transferred finance asset which risks and remuneration of ownership are kept, and recognize the value as
one finance debt. For the finance assets which risks and remuneration of ownership are not transferred or kept, the Company
recognize them as following: (1) stop recognizing the finance asset which are given up the control; (2) continue to recognize the
finance asset and related finance debt according to the extend which involved into the transferred finance asset for the finance assetHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
32
which are not given up control.
The Company measured the surplus between the following two values for the transferred finance assets which fulfill the stop
recognition requirements into current gain or loss: (1) Book value of the transferred finance asset; (2) Consideration plus the
accumulated fair value changes which were accounted directed into owner’s equity. For the transferred finance assets which partly
fulfill the stop recognition requirements the Company amortized the stopped recognition part and the not-stopped recognition part
of the book value of the whole transferred finance asset, and account the surplus between the following two values into current
gain or loss: (1) Book value of the stopped recognition part; (2) consideration plus the corresponding stopped recognition part of the
accumulated fair value changes which were accounted directed into owner’s equity.
4. Basis of recognition and accounting of fair value for the main finance asset and finance debt
For the finance asset or debt which active market exists, the Company recognize the fair value according to the quote on the active
market; for the finance asset or debt which active market not exists, the Company recognized the fair value using estimation
technology (including reference of the latest market prices from freewill transactions by persons familiar with conditions, reference
of the current fair value of other similar finance instrument in characteristics, discounted cash flow models and Option Pricing
Model); for the initially acquired or initial finance asset or finance debt, the Company recognize the fair value basis on the market
trading price.
5. Impairment test and impairment reserves plan
The Company conduct impairment test to the finance asset other than which appointed to be measured at fair value with their
changes are accounted into current gain/loss accounts on balance sheet day.
The Company conduct independently impairment test for single finance asset with large value for single finance asset with little
value the Company conduct the impairment test with those of the finance asset composition which have similar credit risk
characteristics; for the non impairment assets which are tested independently, the Company conduct the impairment test with those
of the finance asset composition which have similar credit risk characteristics.
For the finance asset accounted by amortized cost which have subject impairment evidence at the end term, the impairment loss was
recognized according to the difference between the book value and the anticipating future cash flow, for the finance asset which
have little difference between its short term account receivable anticipating future cash flow and its current value, the Company
don’t discount the future cash flow when recognizing related impairment loss. When there is impairment loss for the Equity
instrument investment which have no quote in active market and which fair value can’t be measured reliably and its derived finance
assets which are connected with the equity instrument and which are calculated through the equity instrument, are measured by cost,
the difference is recognized as impairment loss between the book value of the equity instrument investment and its derived finance
asset and the current value discounted by the future cash flow according to the market profit rate of the similar finance asset. The
Company recognize the impairment loss for the saleable finance asset which fair value have sharp decreasing and the anticipating
decreasing trend is not temporary, and account it into impairment loss together with the accumulated fair vale loss which was
accounted into owner’s equity directly.
(IX) Bad debts reserves of account receivable.
For receivables and other receivables among the companies in the consolidation range, no bad debt provision will be provided. For
the individual major amount account receivable with subject evidence proving impairment loss(include account receivable and
other capital receivable), the Company conduct bad debt provisions according to the difference between its future cash flow and its
book value; For individual account receivable with minor amount, and those with major amount but suggested no impairment when
separate test was performed (include account receivable and other capital receivable), the Company conduct the proportion of all theHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
33
compositions’ bad debt provisions according to the actual loss rate of the similar account receivable composition with same account
age together with the current conditions.
At the following schedule:
Age of account receivable Bad debt provisions rate
Within 1 year (include 1 year) 5%
1-2 years (include 2 years) 20%
2-3 years (include 3 years) 40%
over 3 years 60%
For receivables with physical evidence showing that there is obvious difference with the recoverable value, the Company will
perform individual impairment test, and provide bad debt reserves at the difference between the future cash flow lower than the
book value.
For other account receivable (including bill receivable, interest receivable, long term account receivable and etc), the Company
conduct the bad debt provisions according to individual recognition. The Company don’t conduct bad debt provisions for the
account receivable and other account receivable which combined into finance report and between companies.
(X) Inventory recognition and accounting
1. Inventories include saleable finished goods or merchandise, product-in-process , consumption material and goods in
manufacturing procedure or working procedure.
2. Inventories are initially measured at their actual costs.
3. Accounting of inventories delivered out:
Delivered out materials are accounted by weighted average method, issued out finished products are accounted at individual price.
Consumables are accounted by once only amortization method. Packing materials for manufacturing are accounted directly into
manufacturing cost.
4. At the balance sheet day, inventories are measured at the lower of costs and cashable net values, the individual difference
between the cashable net value and cost are provided as inventory impairment provision. For finished product, merchandise,
saleable material and other saleable merchandise inventory, their cashable net values are recognized by their estimated sale price in
normal operation deducting estimated sale expenses and related taxes; for material inventory which need processing, it cashable net
value are recognized by the estimated sale prices of its finished products in normal operation deducting the estimated cost, sale
expenses and related taxes due to the end of processing; At the balance sheet day, for inventory item which part has contract price
and part has no contract price, the cashable net value is accounted separately, and recognize the inventory impairment provision or
returnable cash.
5. Inventory is inventoried by perpetual inventory system
(XI) Long-term equity investment recognition.
1. Initial investment cost recognition of long-term equity investmentHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
34
(1) For the long-term equity investment formed by corporate merger under common control, if it is the long-term equity investment
obtained from the corporate merger by paying cash, transferring non-cash asset, bear liability and issuing equity securities, the share
of book value of owner's equity of the merged party on the merger date shall be taken as the initial investment cost. The asset
reserve is adjusted according to the difference between the initial investment cost of long-term equity investment and the book value
of paid combined consideration or issued securities; if the capital is not enough for deduction, the remain earnings are adjusted.
(2) For the long-term equity investments formed by merger of enterprises under different control, the initial investment cost is
recognized by the paid fair value of combined consideration on purchasing day and related expenses.
(3) For the long-term equity investments formed by other than merger of enterprises: if it is gotten by paying cash, the initial
investment cost is recognized by purchasing price when buy; if it is gotten by issuing equity securities, the initial investment cost is
recognized by the fair value of the securities; if it is gotten by investor’s investment, the initial investment cost is recognized by
investment contract or agreed value in contract (except the not fair contract value).
2. Cost basis is adopted in accounting of those long-term equity investments by which the Company has substantial control, and is
adjusted in composing combined finance report according to equity basis; and those has no common control or major influence
without quotation in an active market and the fair value cannot be reliably measured is also recalculated by cost basis. And equity
basis is adopted in accounting of those long-term equity investments by which the Company has joint control or major influence on
the invested enterprise.
3. At balance sheet day, for the long term equity investment which recalculated on cost basis and has no quotation in an active
market and the fair value cannot be reliably measured, if has subject evidence of deducting value, conduct the long term investment
depreciation plan according to the difference between discounted cash flow of similar market investment and its fair value; for other
investment has value deducting phenomenon, conduct the long term investment depreciation plan according to the appendix three
(fifteen) in this finance report.
4. the basis for recognizing common control and major influence on invested enterprise is: if the invested enterprise’s main finance
and operation policy need to be agreed by the other investing part, the investment is common control investment; if only have
participating decision rights in invested enterprise’s main finance and operation policy but have no own control or common control
with other investing part, the investment is investment with major influence.
(XII) Fixed assets recognition and accounting.
1. Fixed assets are defined as the tangible assets which have following characteristics: (1) for the purpose of producing goods,
providing services, lease or for operation & management; (2) have more than one fiscal year of service life.
2. Fixed assets also have following conditions: (1) Economic benefit flow into enterprise very possibly; (2) cost can be measured
reliably. The successive expensed related fixed assets are accounted into fixed assets cost if it is in accordance with above
conditions; if not, accounted into current term gain or loss when happens.
3. Fixed assets are accounted initially by cost basis.
4. Depreciation of fixed assets is on age average basis. Depreciation age, estimated net residue rate and annual rates are as the
followings:
Category of fixed assets
Useful age (yrs)
Expected retain value Annual depreciation
ratio (%)Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
35
Houses & buildings 20-30 4% of original value 3.2-4.8
Equipment & machinery 8-15 4% of original value 6.4-12
Office equipment 5 4% of original value 19.2
5. Fixed assets which stop using over three month for absence manufacturing or natural crisis are cognized as idle fixed assets
(except seasonal suspend). Same depreciation method is deployed for idle fixed assets as other similar fixed assets.
6. At the balance sheet day, if there is clue of fixed assets depreciation, depreciation plan preparation is conducted according to Note
III (XV) 3.
(XIII) Recognition and measuring of 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 t he 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 depreciation renew.
3. At the balance sheet day, if there is clue of construction in process depreciation, depreciation plan preparation is conducted
according to appendix three (fifteen) section three.
(XIV) Recognition and measuring of intangible assets
1. Intangible assets are accounted initially by cost basis.
2. According to the contract rights or other legal rights, industry environment, historical experience, related expert verification and
other comprehensive facts, if can define the economic benefit time limit, the intangible assets are the Intangible assets with limited
useful life; if can’t define the economic benefit time limit, the intangible assets are the Intangible assets without limited useful life.
3. For intangible assets with limited useful life, have to consider the following fact when estimate the useful life time limit: (1) The
normal useful life of products manufactured from the intangible assets, useful life of available similar assets. (2) Current
environment of technology and techniques and future development trend; (3) Market requirements of the products manufactured
from the intangible assets or supplied service from the intangible assets; (4) Future deployed activities of the current and potential
competitors; (5) Anticipating maintenance expense to the economic benefit capacity of the intangible assets, and the Company’s
payable capacity for the expenses; (6) related law regulations or similar limitation for the time of the intangible assets, such as
special permission period, rent period; (7) Relationship with other the Company owned assets’ useful life.
4. 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. Intangible assets without limited useful life are not amortized. But have to
review the useful life of the intangible assets and conduct the depreciation test.
5. At the balance sheet day, to check the future economic benefit capacity to the Company of the intangible assets, depreciation plan
preparation is conducted according to Note III (XV) 3.
6. Expenditures of internal researching projects are accounted into current term gain and loss when happens. The developmentHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
36
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.
(XV) Asset impairment
1. 1. At the balance sheet day, assets (except inventory, equity investment without quote at active market and which fair value can’t
be reliably measured, investing property deployed fair value measurement, consuming biology asset, ) are evaluated to show if there
is depreciation clue .If there is clue to show asset depreciation, estimate its returnable amount by individual asset; if it’s hard to
estimate the individual asset, estimate it on the basis of its asset composition or composition group.
2. The returnable amount is the higher value of net value of individual asset, asset composition, asset composition group’s fair value
deduct dealing expenditures and anticipating future cash flow net value of the individual asset, asset composition, asset composition
group.
3. If the individual asset’s returnable amount is lower than its book value, asset depreciation preparation is conducted according to
the deference between the individual asset book value and returnable amount. If the returnable value of the asset composition or the
asset composition group is lower than its book value, when recognizing the depreciation loss, the depreciation loss amount firstly
compensate the amortized book value of goodwill of the asset composition or asset composition group, secondly proportionally
compensate the other assets’ book value according to the proportion of other asset other than goodwill; the above book value
compensations are recognized as separate individual asset’s depreciation loss and separate depreciation loss preparation plan are
conducted.
4. Once impairment losses are confirmed upon the above assets, they won’t be restored in successive accounting periods.
(XVI) Loan and loan expenses recognition and accounting
1. Recognition criteria for loan expense capitalization.
The loan and loan expenses which satisfying capitalization conditions for construction or manufacturing are capitalized and
accounted into asset cost; for other loan expense, if is recognized as expense when happens, is accounted into current term gain or
loss. Asset which satisfying capitalization conditions refer to fixed asset, investing property asset or inventory which need long time
construction or manufacturing activity to reach expected status of using or sale.
2. During the loan expense capitalization.
(1) When simultaneously satisfying the following conditions, capitalization begins: 1) Asset expense has happened; 2) Loan
expense has happened; 3) Necessary construction or manufacturing activity has began for asset reach the expected status of using or
sale.
(2) Suspending capitalization: if asset which satisfying capitalization conditions has suspended unexpected during construction or
manufacturing, and the suspend time exceed three months, the capitalization will suspend; the loan expense during the suspending
period are recognized as current term expenditure till the reopen of the construction or manufacturing.
(3) Stopping capitalization: if asset which satisfying capitalization conditions has reached the status of using or sale, theHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
37
capitalization stop.
3. Loan expense capitalization amount.
Loans borrowed particularly for purchasing or construction of assets which satisfies the conditions of capitalization, the expenses to
be capitalized shall be decided by actual interest occurred for the particular loan, less interest obtained from saving of the unused
fund saving in bank or temporary investment gains. If common loans have been used in purchasing or construction of assets
satisfies the conditions of capitalization, the interest to be capitalized shall be calculated according to the weighted average of
balance of accumulated capital expense over capital expense of the particular loan multiply the capitalization ratio of common loans
used. Capitalization ratio is calculated at the weighted average interest of common loans. During the capitalization, the interest
capitalization amount in each fiscal period don’t exceed the actual interest of loan of that period.
The exchange difference of special foreign currency loan and interest are capitalized during the capitalized period. For other
expenses of special loan, if happens before the asset which satisfying capitalization conditions for construction or manufacturing
reaching the using or sale status, capitalize it; if happens after reaching the status, account it into current term gain or loss. For other
expenses of common loan, are accounted into current term gain or loss.
(XVII) Recognition of income
1. Sale of goods
Major risks and rewards attached to the goods have been transferred to the purchaser; The Company holds neither successive
management power which is normally attached to ownership, nor effective control, over the goods which have been sold out;
Amount of income may be reliably measured; when the costs, occurred or will occur, may be measured reliably, confirm the sale
income implementation.
2. Providing of services
At balance sheet day, those service trades (simultaneously satisfying the requirements of those: income can be measured reliably,
related economic benefit will flow in very possibly, transaction procedure can be confirmed reliably, happened and happening cost
can be measured reliably) which can be reliably estimated are recognized at the percentage of completion, and progress of
completion of service is decided by the portion of costs occurred over the estimated total costs. At balance sheet day, those service
trades which can not be reliably estimated, if the happened services cost will be compensated, the services income are recognized
according to happened service cost and transited to service cost according to same amount; if the happened services cost will not be
compensated, the happened services cost are accounted into current term’s gain or loss and the services income will not be
recognized.
3. Giving of assets
Income from giving of assets is recognized when satisfying requirements: related economic benefit flows in very possibly, income
can be measured reliably. Amount of interest income is calculated according to the time and actual interest rate of the monetary
capital is used by other party. Income of using fee is calculated upon the charge period and calculation provided by the related
contract or agreement.
(XVIII) Enterprise income tax recognition and accounting.
1. Differed income tax liabilities or assets are recognized at proper rate in the term of retrieving the assets or paying the liabilities
according to difference (for not recognized assets and liabilities which tax basis can be recognized, the difference is between the tax
basis and the book value) between book value of the assets or liabilities and the tax basis.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
38
2. Differed income tax assets are recognized limitedly by the income tax which very possibly deduct deductible temporary
difference. At balance sheet day, the not-yet recognized differed income tax assets in previous fiscal term are recognized if have
evidence to prove there is enough income tax very possibly to deduct deductible temporary difference.
3. At balance sheet day, the book value of differed income tax assets are recalculated, if there is not enough possible tax income to
deduct deductible temporary difference, the book value will be deducted. When there is enough income tax, recover the book value
which deducted.
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.
(XIX) Consolidated financial statements
The Company takes all subsidiaries under the Company’s substantial control in the consolidation range. The consolidated financial
statements are based on the finance report of parent company and its subsidiaries. And are composed according to Enterprise
Account Criteria No.33- Consolidated Financial Statements after adjusting the long equity investment to subsidiaries according to
Equity Law and other related documents.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
39
IV. Taxes
(I) VAT
Paid at 17%.
(II) City maintenance and construction tax
The Company, Zhejiang Huayuan Steam Turbine Mechanism Co., Ltd, Hangzhou Guonenng Steam Turbine Co’,Ltd are foreign
investment enterprises which are free of city maintenance tax. The other subsidiaries are subject to pay city maintenance tax with
amount of 7% turnover tax.
(III) Education surtax
The Company, Zhejiang Huayuan Steam Turbine Mechanism Co., Ltd, Hangzhou Guonenng Steam Turbine Co’,Ltd are foreign
investment enterprises which are free of education surtax. The other subsidiaries are subject to education surtax at 3% of turnover
tax.
(IV) Local education surcharges
Paid at 2% of turnover tax payable.
(V) Enterprise income tax
1. According to the document 浙科发高[2008]314 titled “Notification of Awarding the Second Lot of High-Tech Enterprises of
Year 2008” issued jointly by Zhejiang Bureau of Science and Technology, Zhejiang Bureau of Finance, Zhejiang National Tax
Bureau, and Zhenjiang Local Tax Bureau, the Company was certified the High-Tech Enterprise of 2008, therefore enjoys 15% of
income tax rate. According to “Notice about preferential tax policies for high and new technology enterprises” (国税函[2009]203
号), the income tax rate applicable to the Company for year 2009 is subject to the confirmation of the tax authority before filing.
2. According to the document 浙科发高[2008]250 titled “Notification of Awarding the First Lot of High-Tech Enterprises of Year
2008” issued jointly by Zhejiang Bureau of Science and Technology, Zhejiang Bureau of Finance, Zhejiang National Tax Bureau,
and Zhenjiang Local Tax Bureau, the Company was certified the High-Tech Enterprise of 2008, therefore enjoys 15% of income tax
rate. According to “Notice about preferential tax policies for high and new technology enterprises” (国税函[2009]203 号), the
income tax rate applicable to the Company for year 2009 is subject to the confirmation of the tax authority before filing.
3. According to “Approval to Hangzhou Guoneng Steam Turbine Engineering Co., Ltd. for remitting of taxes at fixed period” (余国
税外〔2008〕290 号) issued by Zhejiang Hangzhou National Tax Bureau, Hangzhou Guoneng Steam Turbine Engineering Co., Ltd.
is enjoying preferable taxation policies at fixed period, namely, 2007 was the year the company started to make profit, it was free
of tax for 2007-2008, and 12.5% of tax rate for 2009-2011.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
40
4. According to “Notification of certifying Zhejiang Huayuan Steam Turbine Machinery Co., Ltd. and other three foreign invested
manufacturers to enjoy tax remitting policies at fixed period” (德国税法[2007]19 号) issued by Zhejiang Deqing County National
Tax Bureau, Zhejiang Huayuan Steam Turbine Machinery Co., Ltd. was qualified to enjoy income tax remitting policies at fixed
periods, namely, 2007 was the year the company started to make profit, it was free of tax for 2007-2008, and 12.5% of tax rate for
2009-2011.
5. Other subsidiaries are subject to 25% of corporation income tax.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
41
V. Enterprise consolidation and consolidated financial statements
(I) Main subsidiaries under control
Subsidiaries obtained through other ways
Subsidiary
(Full name)
Reg. Add. Business
property
Registered
capital
Business Scope
Zhejiang Steam Trubine Packaged
Technologies Development Co., Ltd.
(the Packaged Tech Co.)
Hangzhou
Zhejiang
Manufact
uring
30 mil
Development of electrical &
mechanical equipment control unit and
technical consulting service
Hangzhou Zhongneng Steam Turbine
Power Co., Ltd. (Zhongneng Co.)
Hangzhou
Zhejiang
Manufact
uring
92.5 mil
Designing and manufacturing of steam
turbines and supplementary equipment
and parts; sales of the Company’s
products; contracting and consulting of
mid-small size power plants
Hangzhou Steam Turbine Casting
Co., Ltd. (Casting Co.)
Hangzhou
Zhejiang
Manufact
uring
RM22 million
Manufacturing of cast iron and steel
products; installation and maintenance
of casting equipments; sales of the
Company’s products
Hangzhou Steam Turbine Auxiliary
Machinery Co., Ltd. (Auxiliary
Machinery Co.)
Hangzhou
Zhejiang
Manufact
uring
40 mil
Manufacturing of auxiliary equipment
of steam turbine
Hangzhou Steam Turbine Machinery
Equipment Co., Ltd. (Machinery
Equipment Co.)
Hangzhou
Zhejiang
Manufact
uring
15 mil
Manufacturing and processing of
steam turbine auxiliary parts and other
machinery auxiliary parts
Zhejiang Huayuan Steam Turbine
Machinery Co., Ltd. (Huayuan Co.)
Huzhou
Zhejiang
Manufact
uring
21 mil
Manufacturing and processing of
steam turbine parts
Hangzhou Guoneng Steam Turbine
Engineering Co., Ltd. (Guoneng Co.)
Hangzhou
Zhejiang
Manufact
uring
40 mil
Steam turbine periphery; service:
design, installation, consultation,
technology service of steam turbine
system and related equipments.
Hangzhou Steam Turbine Group
Equipment System Engineering Co.,
Ltd. (Group System Co.)
Hangzhou
Zhejiang
Manufact
uring
20 mil
Steam turbine and auxiliary equipment
designing and installation, equipment
system engineering
Hangzhou Pangtong Electronic
Equipment Co., Ltd. (Pangtong Co.)
Hangzhou
Zhejiang
Manufact
uring
1 mil
Designing of cooling and
depressurizing equipment and
accessories; manufacturing
(assembling only): cooling and
depressurizing equipment; wholesale
and retailing: cooling and
depressurizing equipment and relatedHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
42
equipment
Hangzhou Tongneng Turbine
Machinery Co., Ltd.
Hangzhou
Zhejiang
Manufact
uring 3 mil
Designing, installation of steam
turbine and auxiliary equipment
Changshan Qijin Equipment &
Engineering Co., Ltd. (Qijin Co.)
Quzhou
Zhejiang
Manufact
uring RM10 million
Designing, installation of steam
turbine and auxiliary equipmentHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
43
(Continue)
Subsidiary
(Full name)
Practical amount of
investment to end of
report term
Balance of net investment
practically made in subsidiaries
Share
proportion
%
Voting
power %
Zhejiang Steam Turbine Packaged
Technology Development Co., Ltd.
16,260,174.60 16,260,174.60 51.84 51.84
Hangzhou Zhongneng Steam
Turbine Power Co., Ltd.
5,600,853.25 5,600,853.25 51.603 51.603
Hangzhou Steam Turbine Casting
Co., Ltd.
11,220,000.00 11,220,000.00 51 51
Hangzhou Steam Turbine Auxiliary
Machine Co., Ltd.
19,244,620.00 19,244,620.00 76.495 76.495
Hangzhou Steam Turbine
Machinery & Equipment Co., Ltd.
7,968,000.00 7,968,000.00 52 52
Zhejiang Huayuan Steam Turbine
Co., Ltd. (Note 1)
15,750,000.00 15,750,000.00 75 75
Hangzhou Guoneng Steam Turbine
Engineering Co., Ltd. (Note 2)
30,000,000.00 30,000,000.00 75 75
HSTG Equipment & Engineering
Co., Ltd. (Note 3)
8,000,000.00 8,000,000.00 40 40
Hangzhou Pangtong Electronic
Equipment Co., Ltd. (Note 4)
700,000.00 700,000.00 70 70
Hangzhou Tongneng Turbine
Machinery Co., Ltd. [Note 5]
3,000,000.00 3,000,000.00 100 100
Changshan Qijin Equipment &
Engineering Co., Ltd. (Note 6)
7,000,000.00 7,000,000.00 70 70
[Note 1]: Huayuan Co. is the subsidiary of Machinery Co.
[Note 2]: Guoneng Co. is a subsidiary of Auxiliary Equipment Co.
[Note 3]: HSTG Equipment & Engineering Co. is under controlling of Zhongneng Co.
[Note 4]: Pangtong Co. is a subsidiary of Zhongneng Co.
[Note 5]: Hangzhou Tongneng Turbine Machinery Co., Ltd. is a fully-owned subsidiary of Zhongneng Co.
[Note 6]” Qijin Co. is a subsidiary of Packaged Equipment Co. under the Group.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
44
VII. Notes to Consolidated Financial Statements
(I) Notes to Consolidated Balance Sheet
1. Monetary capital End of term 426,359,868.41
(1) Details
Items End of term Beginning of term
Cash in stock 85,150.34 149,943.17
Bank deposit 417,658,502.07 442,221,100.77
Other monetary fund 8,616,216.00 7,731,987.00
Total 426,359,868.41 450,103,030.94
(2) Statement on accounts which are pledged, frozen, limited to use, or stored in overseas place, or with potential risk in retrieving.
Other balance of cash at the end of term were mostly the deposite for issuing of L/C and secure letter.
(3) Monetary capital – foreign currency capital
Balance at the end of term Balance at the beginning of year
Original currency Exchange rate Translated to RMB Original currency Exchange rate Translated to RMB
Bank deposit USD 1,099,253.94 6.8319 7,509,993.31 USD 1,479,139.02 6.8346 10,109,323.55
Bank deposit JPY18,245,577.00 0.071117 1,297,570.70 JPY 23,591,639.92 0.07565 1,784,707.56
Bank deposit EUR279,171.79 9.6408 2,691,439.39 EUR 530,979.28 9.6590 5,128,728.87
Total 11,499,003.40 17,022,759.98
(4) Statement on the assets changed by over 30% (included) or 5% (included) of the total assets
The amount at end of term has decreased by 5.28%, which was caused by distribution of dividends.
(5) Particulars about frozen capital:
Shangdong Shanxian Tianyuan Paper Co., Ltd. appealed to Shandong Shanxian People’s Court on April 22, 2009 for property
preservation against the Company. According to “Civil judgment and property frozen notification” （2009）单民保字第8 号, the
Company’s bank deposit of RMB2 million was frozen by the court on April 28, 2009 (expire from April 28, 2009 to October 27,Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
45
2009). This case is now under trial.
2. Notes receivable End of term 345,172,163.58
(1) Details
Balance at the end of term Balance at the beginning of year
Items
Book balance
Bad debt
provision
Book value Book balance
Bad debt
provision
Book value
Bank
acceptance
345,172,163.58 374,122,522.90 345,172,163.58 374,122,522.90
Total 345,172,163.58 374,122,522.90 345,172,163.58 374,122,522.90
(2) No shareholders’ notes payable to shareholders with 5% or over of the Company’s voting shares.
(3) No evidence shows that any of the notes receivable has impaired, thus no bad debt reserve was provided.
3. Account receivable End of term 1,273,082,540.71
(1) Details
Balance at the end of term Balance at the beginning of year
Items
Book balance
Proportion
%
Bad debt
provision
Book value Book balance
Proport
ion %
Bad debt
provision
Book value
Major single
amount
581,951,218.98
38.61
69,383,105.61 512,568,113.37 543,010,515.29 39.16
68,783,062.2
474,227,453.0
Minor single
amount but
greater risk after
combined in a
character group
60,252,235.12 4.00 37,061,618.67 23,190,616.45 47,497,098.52 3.43 29,408,536.7 18,088,561.8
Other minors 864,786,983.95
57.39
127,463,173.06 737,323,810.89 795,997,253.47 57.41
103,891,627.1
692,105,626.2
Total 1,506,990,438.05
100.00
233,907,897.34 1,273,082,540.71 1,386,504,867.28 100.00
202,083,226.1
1,184,421,641.1
(2) Age analysis
Items Balance at the end of term Balance at the beginning of yearHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
46
Book balance
Proportion
%
Bad debt
provision
Book value
Book
balance
Proportion
%
Bad debt
provision
Book value
within
1 year
909,429,988.67
60.35
45,471,499.44 863,958,489.23 50,786,900.32 61.36
42,539,345.03
808,247,555.29
1-2
years
338,864,387.54
22.49
67,772,877.51 271,091,510.03 40,623,484.21 24.57
68,124,696.84
272,498,787.37
2-3
years
177,321,971.50
11.77
70,928,788.59 106,393,182.91 32,738,915.01 9.57
53,095,566.00
79,643,349.01
Over
3
years
81,374,090.34
5.39
49,734,731.80 31,639,358.54 62,355,567.74 4.50
38,323,618.24
24,031,949.50
Total 1,506,990,438.05
100.00
233,907,897.34 1,273,082,540.71 ,386,504,867.28 100.00
202,083,226.11
1,184,421,641.17
(3) Debts due from top 5 debtors were amounted to RMB695,870,488.36, accounted for 46.18% of the booked balance of account
receivable, their age analysis are as the followings:
Account age End of term
within 1 yr 495,453,127.88
1-2 yrs 139,126,762.74
2-3 yrs 38,010,242.52
Over 3 yrs 23,280,355.22
Sub-total
695,870,488.36
(4) Debts due from shareholders with 5% or over of the Company’s shares
Name of the shareholder End of term Beginning of term
Hangzhou Steam Turbine Group 944,000.00 246,000.00
Sub-total
944,000.00 246,000.00
(5) Other statementsHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
47
1) Statement on providing of bad debt on major account receivables
Single major account receivables with major amount and tested no impairment at the end term, the bad debt reserves are provided at
the practical impairment rate after combined with receivables with similar age.
2) Statement on determine of combination of accounts without major amount but with great credit risks after combined with other
similar receivable accounts.
According to the analysis on the retrieving of receivables, greater risks are attached to receivables with over 3 years of age. Thus
bad debt provisions were provided upon receivables with over 3 years of age at 60%. Account receivables with part of amount over
10% (included) are determined as minor amount, but with greater credit risks after combined, are deducted from the above
applicable receivables.
3) Account receivable (aged over 3 years) amounted to RMB2,275,694.00 at end of term was provided bad debt provisions in full
due to long-term debt or payment refused.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
48
4. Prepayment End of term 230,488,371.99
(1) Age analysis
End of term Beginning of term
Account age Book balance Proportion Bad debt
provision
Book value Book balance Propor
tion %
Bad debt
provision
Book value
within 1 yr 212,447,806.53 92.17 212,447,806.53 222,342,120.49 96.62 222,342,120.49
1-2 yrs 17,818,144.46 7.73 17,818,144.46 6,068,588.39 2.64 6,068,588.39
2-3 yrs 104,336.00 0.05 104,336.00 57,576.00 0.03 57,576.00
Over 3 yrs 118,085.00 0.05 118,085.00 1,628,824.77 0.71 1,628,824.77
Total 230,488,371.99 100.00 230,488,371.99 230,097,109.65 100.00 230,097,109.65
(2) Statement on material unsettled prepayment due over one year
Prepayment over one year are outstanding purchasing payments.
(3) No debts due from shareholders with 5% or over of the Company’s shares
(4) No evidence shows that impairment occurred to the prepayments at the end of term, thus no bad debt provision was provided.
5. Other account receivable End of term 22,269,953.45
(1) Details
Balance at the end of term Balance at the beginning of year
Items
Book
balance
Proportion
%
Bad debt
provision Book value
Book
balance
Proportion
%
Bad debt
provision Book value
Major single
amount
10,010,320.94 37.47 2,706,192.56 7,304,128.38 7,010,320.94 32.50 2,556,192.56 4,454,128.38
Minor single
amount but
greater risk
after
combined in
a character
group
1,069,981.28 4.01 641,988.77 427,992.51 377,471.28 1.75 226,482.77 150,988.51
Other
minors
15,633,688.19 58.52 1,095,855.63 14,537,832.56 14,184,809.46 65.75 1,548,351.70 12,636,457.76
Total 26,713,990.41 100.00 4,444,036.96 22,269,953.45 21,572,601.68 100.00 4,331,027.03 17,241,574.65Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
49Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
50
(2) Age analysis
End of term Beginning of term
Account
age
Book balance Proportion Bad debt
provision
Book value Book balance Proportion
%
Bad debt
provision
Book value
within 1
yr 20,179,884.69 75.54 1,008,994.23 19,170,890.46 13,923,005.96 64.54 696,150.30 13,226,855.66
1-2 yrs 973,300.00 3.64 194,660.00 778,640.00 1,512,600.00 7.01 302,520.00 1,210,080.00
2-3 yrs 480,503.50 1.80 192,201.40 288,302.10 1,749,203.50 8.11 699,681.40 1,049,522.10
3-5 yrs 5,080,302.22 19.02 3,048,181.33 2,032,120.89 4,387,792.22 20.34 2,632,675.33 1,755,116.89
Total 26,713,990.41 100.00 4,444,036.96 22,269,953.45 21,572,601.68 100.00 4,331,027.03 17,241,574.65
The outstanding accounts due from top 5 debtors are amounted to RMB13,010,549.39, accounted for 48.70% of the total booked
balance of other receivables. Their ages are:
Account age End of term
within 1 yr 8,998,628.45
2-3 yrs 1,600.00
Over 3 yrs 4,010,320.94
Sub-total 13,010,549.39
(4) No debts due from shareholders with 5% or over of the Company’s shares
(5) Other statements
1) Statement on providing of bad debt on major account receivables
Bad debt provisions are provided at the practical rate after combined with other similar accounts on other receivables with single
major amounts which are not impaired.
2) Statement on the combination of other receivables with minor single amount but with great credit risks after combined with
similar accounts.
According to the analysis on the retrieving of other receivables, greater risks are attached to receivables with over 3 years of age.
Thus bad debt provisions were provided upon other receivables with over 3 years of age at 60%. Other account receivables with
part of amount over 10% (included) are determined as minor amount, but with greater credit risks after combined, are deducted
from the above applicable other receivables.
6. Inventories End of term 1,278,146,088.17
(1) Details
Balance at the end of term Balance at the beginning of year
Items
Book balance
Impairment
provision
Book value Book balance
Impairment
provision
Book value
Stock materials 311,495,099.97 311,495,099.97 310,088,684.93 310,088,684.93
Product in 545,588,440.30 545,588,440.30 541,972,221.45 541,972,221.45Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
51
process
Stock products 423,857,081.71 2,794,533.81 421,062,547.90 343,376,921.73 2,794,533.81 340,582,387.92
Total 1,280,940,621.98 2,794,533.81 1,278,146,088.17 1,195,437,828.11 2,794,533.81 1,192,643,294.30
(2) Basis of providing inventory impairment provisions
Inventory impairment provisions were provided according to the balance of cost of single inventory item over the realizable net
value, which is determined according to the latest sales price less related expenses. Impairment provisions of part of the products
disposed have been carried back in the report term.
(3) No inventory has been used as pledge.
7. Long-term share equity investment End of term 408,093,320.85
(1) Details
Balance at the end of term Balance at the beginning of year
Items
Book balance
Impairment
provision
Book value Book balance
Impairment
provision
Book value
Investment in affiliates 5,506,869.23 5,506,869.23 13,311,366.27 13,311,366.27
Other equity
investment
402,586,451.62 402,586,451.62 280,782,411.62
280,782,411.62
Total 408,093,320.85 408,093,320.85 294,093,777.89 294,093,777.89
(2) Long-term equity investment on equity basis
1) Composition of balances at the end of term
Name of the
Companies
Share
portion %
Investment
term
Cost
Adjustment of
gain/loss
Other equity
change
Balance at the end
of term
Hangzhou Steam
Turbine
Environmental
Engineering Co., Ltd. 45 20 yrs 9,000,000.00 -4,029,173.27 536,042.50 5,506,869.23
Sub-total 9,000,000.00 -4,029,173.27 536,042.50 5,506,869.23
2) Details of changes in the report term
Name of the Companies
Initial
amount
Balance at the
beginning of
year
Change of
costs in the
term
Change of
adjustment on
gain/loss of the
term
Dividend
received in
the term
Change of
other
equities in
the term
Balance at the
end of term
Hangzhou Steam 9,000,000.00 5,506,869.23 5,506,869.23Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
52
Turbine Environmental
Engineering Co., Ltd.
Total 9,000,000.00 5,506,869.23 5,506,869.23Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
53
(3) Long-term equity investment on cost basis
Details
Name of the
Companies
Share
portion
%
Investment
term
Initial amount
Balance at the
beginning of year
Increased
this term
Decreased
this term
Balance at the
end of term
Greenesol Co.
(India)
37 Not stated 1,032,411.62 1,032,411.62 1,032,411.62
Zhejiang
Tianhang Steam
Turbine Auxiliary
Machinery Co.,
Ltd.
33.33 50 yrs 10,000,000.00 10,000,000.00 10,000,000.00
Hangzhou Bank 8.75 Not stated 390,954,040.00 390,954,040.00 390,954,040.00
Zhejiang Sanxin
Automatic
Engineering Co.,
Ltd.
6.00 30 yrs 600,000.00 600,000.00 600,000.00
Sub-total 402,586,451.62 402,586,451.62 402,586,451.62
(4) The Auxiliary Machine Co. – the controlled subsidiary of the Company has invested RMB10,000,000 in Zhejiang Tianhang
Steam Turbine Auxiliary Machinery Co., Ltd. and take 33.33% of the share equities. According to the agreement, the Company
adopts fixed return in accounting of this long-term equity investment. In case of the revenue of the company is lower than RMB80
million, the return rate after tax will be 10%, ie. RMB1,000,000; in case of the revenue is over RMB80 million, the return rate after
tax will be 12%, ie. RMB1,200,000. For the above long-term equity investment adopts agreement rewarding scheme, the Auxiliary
Machinery Co. accounts the long-term equity investment on cost basis.
(5) Long-term equity investment impairment provisions
No obvious impairment evidence appears at the end of term, thus no impairment provision was provided.
8. Fixed assets End of term 503,827,490.33
(1) Details
Original value
Category Beginning of term Increased this term Decreased this term End of term
Houses & buildings 254,703,982.07 254,703,982.07
Equipment & machinery 535,946,804.67 53，526，267.13 1，088，086.00 588,384,985.80
Office equipment 136,527,229.27 1,785,101.52 42,540,254.52 95,772,076.27
Total 927,178,016.01 55,311,368.65 43,628,340.52 938,861,044.14
Accumulated depreciation:
Category Beginning of term Increased this term Decreased this End of termHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
54
term
Houses & buildings 86,535,956.08 4,138,895.34 90,674,851.42
Equipment &
machinery 263,652,422.51 22,735,427.79 1,017,200.34 285,370,649.96
Office equipment 45,344,832.93 5,637,497.17 163,442.37 50,818,887.73
Total 395,533,211.52 32,511,820.30 1,180,642.71 426,864,389.11Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
55
Impairment provision
Category
Beginning of term Increased this term
Decreased this
term End of term
Houses & buildings 1,505,077.02 148.78 1,504,928.24
Equipment & machinery 4,472,648.36 288.80 4,472,359.56
Office equipment 2,200,854.93 8,978.03 2,191,876.90
Total 8,178,580.31 9,415.61 8,169,164.70
Book value
Category Beginning of term Increased this term
Houses & buildings 166,663,097.75 162,524,202.41
Equipment &
machinery 267,822,022.60 298,541,976.28
Office equipment 88,990,519.44 42,761,311.64
Total 523,475,639.79 503,827,490.33
(2) Increasing in current term includes RMB10,915,676.38 transferred from construction in process.
(3) No external guarantee issues in fixed assets.
(4) No temporary idle fixed assets at the end of report term.
(5) No fixed assets rent in by financing or operational rent out in the amount at the end of term.
(6) Impairment provision of RMB8,169,164.70 was provided according to the difference between the book value and retrievable
value of single fixed asset.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
56
9. Construction in process End of term 66,635,499.22
(1) Details
End of term Beginning of term
Project
Book
balance
Impairment
provision Book value
Book
balance
Impairment
provision Book value
TK6916 Digital Flat Boring 7,062,520.53 7,062,520.53 1,437,432.62 1,437,432.62
TK6113 Digital Flat Boring - - 2,582,264.71 2,582,264.71
Renewing of vane lathe - - 553,030.70 553,030.70
Flat drill - - 372,387.55 372,387.55
C61100 lathe - - 323,741.00 323,741.00
D1000/L5000 Digital flat lathe 679,596.85 679,596.85 630,558.96 630,558.96
D1000/L3000 grating digital lathe 541,439.96 541,439.96
Plane grinder 344,538.99 344,538.99
Construction of Machinery Co. - - 83,800.00 83,800.00
Guoneng Co. New Factory Construction 27,614,172.22 27,614,172.22 17,434,701.85 17,434,701.85
Casting workshop and equipment 26,407,732.49 26,407,732.49 8,266,186.20 8,266,186.20
Other small projects 3,985,498.18 3,985,498.18 5,399,834.59 5,399,834.59
Total 66,635,499.22 66,635,499.22 37,083,938.18 37,083,938.18Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
57
(2) Change of constructions in process
Project Beginning of
term
Increased this
term
Transferred
to fixed
asset this
term
Other
decrease
this term
End of term Financial
source
Budget Investment
on budget
TK6916 Digital
Flat Boring
1,437,432.62 5,625,087.91 - - 7,062,520.53 Independent 700 100.89%
TK6113 Digital
Flat Boring
2,582,264.71 - 2,582,264.71 - - Independent 260 99%
Renewing of
vane lathe
553,030.70 102,425.01 655,455.71 - - Independent 60 109.24%
Flat drill 372,387.55 - 372,387.55 - - Independent 60 62%
C61100 lathe 323,741.00 - 323,741.00 - - Independent 45 72%
D1000/L5000
Digital flat lathe
630,558.96 49,037.89 - - 679,596.85
D1000/L3000
grating digital
lathe
- 541,439.96 - - 541,439.96
Plane grinder - 344,538.99 - - 344,538.99
Construction of
Machinery Co.
83,800.00 83,800.00 - Independent
Guoneng Co.
New Factory
Construction
17,434,701.85 10,179,470.37 27,614,172.22 Independent 3,981 69.36%
Casting
workshop and
equipment
8,266,186.20 20,221,546.29 2,080,000.00 26,407,732.49 Independent 13,120 20.13%
Other small
projects
5,399,834.59 5,276,053.64 4,818,027.41 1,872,362.64 3,985,498.18 Independent
Total 37,083,938.18 42,339,600.06 10,915,676.38 1,872,362.64 66,635,499.22
(3) No evidence shows that impairment occurred to the construction in process, therefore no impairment provision was provided.
(4) Statement on the assets changed by over 30% (included) or 5% (included) of the total assets
Increased by 79.69%, which was caused by implementing of construction projects of Casting Co. and Guoneng Co.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
58
10. Intangible assets End of term 73,057,613.87
(1) Details
Original value
Category Beginning of term Increased this term Decreased this term End of term
Land using right 85,609,548.25 85,609,548.25
Residue heat power plant operation right 28,000,000.00 - 28,000,000.00 -
Sub-total 113,609,548.25 28,000,000.00 85,609,548.25
Accumulated amortizing
Category Beginning of term Increased this term Decreased this term End of term
Land using right 11,012,851.09 1,539,083.29 12,551,934.38
Residue heat power plant operation right
Sub-total 11,012,851.09 1,539,083.29 12,551,934.38
Book value
Category Beginning of term Increased this term
Land using right 74,596,697.16 73,057,613.87
Residue heat power plant operation right 28,000,000.00
Total 102,596,697.16 73,057,613.87
(2) No intangible asset was under pledge, for details please go to Note XI (II).
(3) Residue heat power plant operation right are described in Note XIV(I).
11. Long-term amortizable expenses End of term 10,140,110.37
(1) Details
Items End of term Beginning of term
Decoration expenses 10,140,110.37 10,370,103.45
Total 10,140,110.37 10,370,103.45Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
59
12. Differed income tax asset End of term 37,211,077.91
Differed income tax assets recognized
Category Balance at the end of termBalance at the beginning of year
Differed income tax asset 37,211,077.91 39,120,424.79
Note: Balance of differed income tax asset was accounted at the deductible temporary difference of the the balance of book
value lower than the tax basis.
13. Short-term loans End of term 216,000,000.00
(1) Details
Condition End of term Beginning of term
Guarantee loan 150,000,000.00
Pledged loan 31,000,000.00
Total 181,000,000.00
(2) No overdue borrowing.
14. Notes payable End of term 198,487,455.22
(1) Details
Category End of term Beginning of term
Bank acceptance 198,487,455.22 298,203,241.55
Total 198,487,455.22 298,203,241.55
(2) No shareholders’ notes payable to shareholders with 5% or over of the Company’s voting shares.
(3) Statement on the assets changed by over 30% (included) or 5% (included) of the total assets
Book value at end of term decreased by RMB99,715,786.33 and 33.44% from the beginning of term, which was caused by change
of clearing basis of company notes.
15. Account payable End of term 395,960,425.94
(1) Account of shareholders’ with 5% or above of the Company’s voting shares.
Name of the shareholder End of term Beginning of term
Hangzhou Steam Turbine Group 115,226.95 305,446.91Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
60
Sub-total 115,226.95 305,446.91
(2) No major overdue payable for more than 1 year.
16. Prepayment received End of term 1,196,727,532.39
(1) Account of shareholders’ with 5% or above of the Company’s voting shares.
Name of the shareholder End of term Beginning of term
Hangzhou Steam Turbine Group - 2,752,000.00
Sub-total - 2,752,000.00
(2) No major prepayment received over 1 year was not transferred.
(3) Decreasing of 20.08% was caused by decreasing of sales orders.
17. Employees’ wage payable End of term 19,952,410.05
(1) Details
Items Beginning of
term
Increased this
term
Decreased this
term End of term
Wage, bonus, allowance and
subsidies
3,830,482.70 224,562,035.64 131,764,586.24 96,629,129.10
Employees’ welfare 0.00 18,262,753.12 13,162,043.48 5,100,709.64
Social insurance 13,750,460.68 35,258,506.52 31,747,972.99 17,260,994.21
Housing fund 62,213.00 15,912,496.00 15,911,126.24 63,582.76
Trade Union finance 859,530.11 2,783,281.72 2,796,229.42 846,581.62
Training expenses 1,388,784.56 3,299,409.10 1,610,547.59 3,076,449.86
Other – dismissing welfare 60,939.00 3,697.00 64,636.00
Total 19,952,410.05 300,082,179.10 197,057,141.96 122,977,447.19
(2) No delayed employees’ salary and performance remunerations.
(3) Statement on the assets changed by over 30% (included) or 5% (included) of the total assets
Increasing of 516.35% was caused by drawing of salaries, and drawing of employees’ welfare have increased by RMB5.1007
million.
18. Tax payable End of term 37,499,197.30
(1) Details
Category End of term Beginning of term
VAT 10,450,993.98 -7,127,689.28
City maintenance and construction tax 364,790.24 89,537.46Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
61
Business tax 55,900.59 -920,980.80
Enterprise income tax 21,751,192.72 24,135,042.00
Paying of individual income tax on behalf 1,326,856.34 3,844,593.34
Property tax - 135,371.88
Education surtax 385,349.22 34,696.31
Local education surcharges 156,829.29 195,863.80
Stamp tax 4,099.10 93,214.08
Water conservancy fund 2,126,580.82 1,866,827.15
Flood controlling expenditure - 14,821.11
Land using rights 876,605.00 -
Total 37,499,197.30 22,361,297.05
(2) Statement on the assets changed by over 30% (included) or 5% (included) of the total assets
Increase of 67.70% was caused by: 1. Increasing of VAT payable, 2. Increasing of land using tax.
19. Other account payable End of term 50,503,174.32
Account of shareholders’ with 5% or above of the Company’s voting shares.
Name of the shareholder End of term Beginning of term
Hangzhou Steam Turbine Group 28,100,844.35 18,775,326.66
Sub-total 28,100,844.35 18,775,326.66
(1) Statement on the assets changed by over 30% (included) or 5% (included) of the total assets
Increasing of 39.61% was caused by increasing of account payable to the Hangzhou Steam Turbine Power Group.
20. Other current liabilities End of term 1,000,000.00
Name of the shareholder End of term Beginning of term
Dividend payable [Note 1]
14,700,000.00
Pre-drawn expenses [Note 2] 1,000,000.00
Total 1,000,000.00 14,700,000.00
[Note 1]: Decreasing of 93.20% was caused by disbursing of dividend by Zhongneng Co. to its shareholders which caused
decreasing of 100.00% in dividend payable.
[Note 2] Increasing of pre-dawn expenses by RMB1.00 million, which was mainly the pre-drawing of Changshan Qijin project.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
62
21. Long-term loans Ended the report term: 147,463,800.00
Items End of term Beginning of term
Guarantee loan 90,463,800.00 -
Guarantee loan 17,000,000.00
Pledged loan 40,000,000.00 -
Total 147,463,800.00 -
Note: 1) According to document 经贸委[2009]144 号, the Company have the loan of RMB90.4638 million for the “1 million KW
super water pump steam turbine and 1 million ton / year ethene technical reformation project”. Financial institution was China
Construction Bank Zhejiang Branch, and the term was from March 24, 2009 to March 23, 2015.
2) RMB17 million was the guaranteed loan raised by Casting Co. from Pudong Development Bank Yuhang Branch with term from
June 12, 2009 to June 11, 2011.
3) RMB40 million was the guaranteed loan raised by Casting Co. from Construction Bank Yuhang Branch with term from June 24,
2009 to June 23, 2011.
22. Long-term payable End of term 330,000.00
Details
Items End of term Beginning of term
Drawing in administrative restructuring 330,000.00 330,000.00
Total 330,000.00 330,000.00
23. Differed income tax liability End of term 1,225,374.71
(1) Details
Items End of term Beginning of term
Other temporary differences of tax payable 1,225,374.71 1,225,374.71
Total 1,225,374.71 1,225,374.71
23. Other non-recurring liabilities End of term 7,840,860.00
(1) Details
Items End of term Beginning of term
Differed income 7,840,860.00 6,523,710.00
Total 7,840,860.00 6,523,710.00
(2) Increasing of 17.47% was caused by receiving of special fund of RMB1.14 million from Hangzhou Xiacheng District Trade and
Turism Bureau as the subsidy for appropriate heavy industry.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
63
25. Capital shares End of term 371,800,000.00
(1) Details
Changed this term (+,-)
Items Beginning of term End of term
Amount Proportion
Issuing
of new
shares
Bonus
shares
Transferred
from
reserves
Others Sub-total
Amount Proportion
1.
State-owned
shares
2. State
legal person
shares
236,600,000 63.64 236,600,000 63.64
3. Other
domestic
shares
Including:
Domestic
legal person
shares
Domestic
natural
person
shares
4. Foreign
shares
Including:
Foreign
legal person
shares
(I)
Conditional
Shares
Foreign
natural
person
shares
Total of
conditional
shares
236,600,000 63.64 236,600,000 63.64
(II)
Unconditional
shares
1. RMB
common
sharesHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
64
2. Foreign
currency
shares listed
domstic
135,200,000 36.36
135,200,000 36.36
3. Foreign
shares listed
overseas
4. Others
Total of
negotiable
shares
135,200,000 36.36 135,200,000 36.36
(III) Total of shares 371,800,000 100.00 371,800,000 100.00Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
65
26. Capital reserves End of term 138,930,847.24
Details
Items
Beginning of term
Increased this
term
Decreased this
term End of term
Share capital
premium
81,815,220.00 81,815,220.00
Other capital
reserves
57,138,030.09 22,402.85 57,115,627.24
Total 138,953,250.09 22,402.85 138,930,847.24
27. Surplus reserves End of term 279,205,827.20
(1) Details
Items
Beginning of term Increased this term
Decreased
this term End of term
Statutory surplus
reserves
233,666,771.29 45,539,055.91 279,205,827.20
Total 233,666,771.29 45,539,055.91 279,205,827.20
28. Retained profit End of term 1,201,413,780.16
(1) Details
Items
Beginning of term 1,111,352,798.36
Increased this term 238,780,981.80
Decreased this term 148,720,000.00
End of term 1,201,413,780.16
(2) Statement on change of retained profit and profit distribution proportion
1) Increasing of RMB238,780,981.80 was caused by transferring in of net profit attributable to the shareholders of the parent
company.
2) According to the Profit Distribution Plan 2008 decided by the Shareholders’ Annual Meeting 2008, RMB4.00 (tax included) of
cash dividend was distributed to each 10 shares on the basis of total capital shares of 371,800,000. And totally RMB148,720,000
were distributed. This plan has been accomplished in the report term.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
66
(II) Notes to consolidated income statement
1. Turnover / cost Current term 1,646,527,768.37/1,012,507,507.68
(1) Details
Turnover
Items Current term Same period of last term
Major business turnover 1,627,937,615.84 1,305,647,220.10
Other business income 18,590,152.53 92,594,782.09
Total 1,646,527,768.37 1,398,242,002.19
Operation cost
Items Current term Same period of last term
Major business cost 996,267,248.40 791,830,931.65
Other business cost 16,240,259.28 87,753,002.01
Total 1,012,507,507.68 879,583,933.66
(2) Main business turnover / cost
Items Current term Same period of last term
Income Cost Profit Income Cost Profit
Industrial steam
turbine
1,360,087,455.05 831,880,755.22 528,206,699.83 1,210,946,840.04 731,491,200.27 479,455,639.77
Casting products 36,121,030.64 22,721,216.13 13,399,814.51 35,987,192.85 20,251,704.12 15,735,488.73
Auxiliary
machinery
67,354,751.49 47,648,281.33 19,706,470.16 12,462,572.68 8,985,861.99 3,476,710.69
Residue Thermal
Power Plant
102,756,024.88 64,236,701.30 38,519,323.58
Others 61,618,353.78 29,780,294.42 31,838,059.36 46,250,614.53 31,102,165.27 15,148,449.26
Total 1,627,937,615.84 996,267,248.40 631,670,367.44 1,305,647,220.10 791,830,931.65 513,816,288.45
(3) Top 5 sales income
Items Current term Same period of last term
Total of sales to top 5 clients 664,771,878.53 461,693,119.92
Portion in turnover of the year 40.38% 33.02%
2. Business tax and surcharge Current term 5,160,353.50
Details
Items Current term Same period of last term
Business tax 801,986.00 8,920.00Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
67
City maintenance and construction tax 2,990,090.84 1,525,982.37
Education surtax 681,006.98 653,992.44
Local education surcharges 687,270.58 1,438,315.17
Total 5,160,353.50 3,627,209.98
3. Financial expenses Current term -6,368,268.96
Decreasing of 8,157.72 times was caused by increasing of exchange gains in the report term.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
68
4. Asset impairment loss Current term 31,933,931.16
Details
Items Current term Same period of last term
Bad debt losses 31,933,931.16 36,083,734.29
Inventory impairment losses -
Fixed assets impairment losses -
Total 31,933,931.16 36,083,734.29
5. Investment income Current term 29,898,083.98
(1) Details
Items Current term Same period of last term
Profit gained from invested entities on cost basis 29,898,083.98 28,771,057.99
Amount of net change of gains from invested entities adjusted on equity basis 1,388,207.49
Others - -
Total 29,898,083.98 30,159,265.48
(2) There was no major limitation on retrieving of investment gains.
6. Non-business income Current term 3,489,025.96
Details
Items Current term Same period of last term
Government subsidy 3,214,040.20 585,600.00
Gains from disposal of fixed assets 174,985.76 84,246.80
Compensation income - 82,864.20
Others 100,000.00 272,000.00
Total 3,489,025.96 1,024,711.00
(1) Statement on changes for over 30% (included) or 10% (included) of the total profit.
Non-business income has increased by 2.40 times over the same period of last year, which was caused by increasing of government
subsidies.
7. Non-operational expenditure Current term 2,868,349.38
Details
Items Current term Same period of last term
Outgoing donations 905,000.00 2,668,000.00
Penalty paid 13,890.00 900.00Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
69
Loss from disposal of fixed assets 1.37 66,834.77
Compensation paid 57,501.00
Water conservancy fund 1,946,789.92 1,917,458.60
Others 2,668.09 224,232.08
Total 2,868,349.38 4,934,926.45
(1) Statement on changes for over 30% (included) or 10% (included) of the total profit.
Non-business expenditure decreased by 41.88%, which was caused by decreasing of donations.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
70
8. Income tax expenses Current term 50,301,587.28
Details
Items
Current term
Same period of last
term
Income tax of current term 48,512,516.75 53,886,085.75
Deferred income tax 1,789,070.53 -3,992,761.38
Total 50,301,587.28 49,893,324.37
(III) Notes to consolidated cash flow statement
1. Other large amount cash received related to business operation
Items Jan-Jun 2009 Jan-Jun 2008
Gains from bank interests 2,333,855.19 2,247,192.05
Retrieving of other payment
temporarily paid or for others 17,730,582.13 12,618,975.08
Total 20,064,437.32 14,866,167.13
2. Other large amount cash paid in relating to business operations
Items Jan-Jun 2009 Jan-Jun 2008
Expenditures paid 58,126,016.46 69,160,009.11
Total 58,126,016.46 69,160,009.11Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
71
2. Supplementary information to the cash flow statement
Supplementary Info. Jan-Jun 2009 Jan-Jun 2008
(1) Net profit adjusted to cash flow of operation:
Net profit 288,130,624.99 245,648,829.64
Plus: Asset impairment provision 31,933,931.16 36,083,734.29
Fixed asset depreciation, gas and petrol depreciation, production goods depreciation 32,511,820.30 26,990,719.01
Amortizing of intangible assets 29,539,093.29 1,524,172.61
Amortizing of long-term expenses 229,993.08 19,027.68
Loss from fixed assets, intangible assets and other long-term assets disposal (“-“ for
gains) -174,985.76 -17,412.03
Loss from fixed assets discarding (“-“ for gains) 1.37
Loss from fluctuate of fair value (“-“ for gains)
Financial expenese (“-“ for gains) -6,368,268.96 79,033.09
Investment loss (“-“ for gains) -29,898,083.98 -30,159,265.48
Decrease of deferred income tax asset (“-“ for increase) 1,909,346.88 -160,638.85
Increase of deferred income tax liabilities (“-“ for decrease)
Decrease of inventory (“-“ for increase) -85,502,793.87 -402,023,058.95
Decrease of operational receivables (“-“ for increase) -65,251,259.59 -272,141,366.21
Increase of operational payables (“-“ for decrease) -206,999,403.59 634,354,597.81
Others 165,999.75 -79,033.09
Cash flow generated by business operation, net -9,773,984.93 240,119,339.52
(2) Material investment and financing without involving in cash flow
Liabilities converted to capital
Convertible bond expire in 1 year
Fixed assets leased through financing
(3) Change of cash and cash equivalents
Balance of cash at period end 426,359,868.41 476,786,536.09
Less: Initial balance of cash 450,103,030.94 296,605,363.48
Plus: Balance of cash equivalents at the period end
Less: Initial balance of cash equivalents
Net increasing of cash and cash equivalents -23,743,162.53 180,181,172.61Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
72
4. Cash and cash equivalents
Items Jan-Jun 2009 Jan-Jun 2008
(1) Cash 426,359,868.41 476,786,536.09
Incl: Cash in stock 85,150.34 128,748.70
Bank savings could be used at any time 417,658,502.07 461,451,451.21
Other monetary capital could be used at any time 8,616,216.00 15,206,336.18
(2) Cash equivalents
Incl. Bond investment due in 3 months
(3) Balance of cash and cash equivalents at end of term 426,359,868.41 476,786,536.09
Incl. Cash and cash equivalents in the parent company
or internal subsidies with limitation to useHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
73
VIII. Notes to parent company financial statements
(I) Notes to items of parent company balance sheet
1. Account receivable End of term 1,073,413,196.07
(1) Details
End of term Beginning of term
Book Balance
Portion
%
Bad debt
provision
Book value Book Balance
Portion
%
Bad debt
provision
Book value
Major
single
amount
560,352,576.24 43.58 89,234,119.57 471,118,456.67 529,348,807.54 42.87 67,058,924.42 462,289,883.1
Minor
single
amount
but
greater
risk after
combined
in a
character
group
56,500,938.82 4.40 35,691,940.89 20,808,997.93 45,469,644.22 3.68 28,192,064.13 17,277,580.09
Other
minors
668,837,996.78 52.02 87,352,255.31 581,485,741.47 659,948,038.90 53.45 93,542,680.14 566,405,358.76
Total 1,285,691,511.84 100.00 212,278,315.77 1,073,413,196.07 1,234,766,490.66 100.00 188,793,668.69 1,045,972,821.97
(2) Age analysis
End of term Beginning of term
Age
Book Balance
Portion
%
Bad debt
provision
Book value Book Balance
Portion
%
Bad debt
provision
Book value
within
1 yr
728,830,444.53 56.69 36,284032.23 692,546,412.30 723,253,959.24 58.57 35,977,057.96 687,276,901.28
1-2
yrs
315,981,398.91 24.58 63,196,279.78 252,785,119.13 322,409,510.57 26.11 64,481,902.11 257,927,608.46
2-3
yrs
161,788,374.36 12.58 64,432,949.74 97,355,424.62 128,774,907.41 10.43 51,227,562.96 77,547,344.45
Over
3 yrs
79,091,294.04 6.15 48,365,054.02 30,726,240.02 60,328,113.44 4.89 37,107,145.66 23,220,967.78Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
74
Total 1,285,691,511.84 100.00 212,278,315.77 1,073,413,196.07 1,234,766,490.66 100.00 188,793,668.69 1,045,972,821.97Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
75
(3) Debts due from top 5 debtors were amounted to RMB663,478,845.62, accounted for 51.60% of the booked balance of account
receivable, their age analysis are as the followings:
Account age End of term
within 1 yr 471,125,217.88
1-2 yrs 133,051,730.00
2-3 yrs 36,711,542.52
Over 3 yrs 22,590,355.22
Sub-total 663,478,845.62
(4) Account of shareholders’ with 5% or above of the Company’s voting shares.
Name of the shareholder End of term Beginning of term
Hangzhou Steam Turbine Group - -
Sub-total - -
(5) Other statements
1) Statement on providing of bad debt on major account receivables
Single major account receivables with major amount and tested no impairment at the end term, the bad debt reserves are provided at
the practical impairment rate after combined with receivables with similar age.
2) Statement on determine of combination of accounts without major amount but with great credit risks after combined with other
similar receivable accounts.
According to the analysis on the retrieving of receivables, greater risks are attached to receivables with over 3 years of age. Thus
bad debt provisions were provided by 60% upon receivables with over 3 years of age. Account receivables with part of amount over
10% (included) are determined as minor amount, but with greater credit risks after combined, are deducted from the above
applicable receivables.
3) Account receivable (aged over 3 years) amounted to RMB2,275,694.00 at end of term, was providing of bad debt provisions for
long-term debits and refused payments.
2. Other account receivable End of term 28,467,453.23
(1) Details
End of term Beginning of term
Major single
amount
Book Balance Portion
%
Bad debt
provision
Book value Book Balance
Portion
%
Bad debt
provision
Book value
Minor single
amount but greater
risk after combined
in a character group 17,088,422.51 53.37 2,406,192.56 14,682,229.95 8,444,374.53 48.72 2,627,895.24 5,816,479.29
Other minors 779,981.28 2.44 467,988.77 311,992.51 70,471.28 0.41 42,282.77 28,188.51
Total 14,150,913.76 44.19 677,682.99 13,473,230.77 8,817,149.61 50.87 875,594.39 7,941,555.22
Major single
amount 32,019,317.55 100 3,551,864.32 28,467,453.23 17,331,995.42 100.00 3,545,772.40 13,786,223.02
(2) Age analysisHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
76
End of term Beginning of term
Age
Book Balance
Portion
%
Bad debt
provision
Book value Book Balance
Portion
%
Bad debt
provision
Book value
within 1 yr 26,113,615.33 71.45 374,282.99 25,739,332.34 10,987,803.20 63.40 309,897.07 10,677,906.13
1-2 yrs 713,800.00 10.11 142,760.00 571,040.00 589,800.00 3.40 117,960.00 471,840.00
2-3 yrs 401,600.00 2.23 160,640.00 240,960.00 1,673,600.00 9.66 669,440.00 1,004,160.00
Over 3 yrs 4,790,302.22 16.21 2,874,181.33 1,916,120.89 4,080,792.22 23.54 2,448,475.33 1,632,316.89
Total 32,019,317.55 100 3,551,864.32 28,467,453.23 17,331,995.42 100.00 3,545,772.40 13,786,223.02
(3) Debt due from top 5 debtors in other receivable account were totaled to RMB22,146,709.89, account for 69.17% of book
balance of other receivable account. Ages are as the followings:
Account age End of term
within 1 yr 18,136,388.95
2-3 yrs 0
Over 3 yrs 4,010,320.94
Sub-total 22,146,709.89
(4) Statement on the assets changed by over 30% (included) or 5% (included) of the total assets
Other receivables at end of term has decreased by 43.63%, which was causd by incrasing of account retrieving than the previous
term.
(5) Other statements
1) Statement on providing of bad debt on major account receivables
Bad debt provisions are provided at the practical rate after combined with other similar accounts on other receivables with single
major amounts which are not impaired.
2) Statement on the combination of other receivables with minor single amount but with great credit risks after combined with
similar accounts.
According to the analysis on the retrieving of receivables, greater risks are attached to receivables with over 3 years of age. Thus
bad debt provisions were provided by 60% upon receivables with over 3 years of age. Account receivables with part of amount over
10% (included) are determined as minor amount, but with greater credit risks after combined, are deducted from the above
applicable receivables.
3. Long-term share equity investment End of term 457,786,968.70
(1) Details
End of term Beginning of term
Book balance
Impairment
provision Book value Book balance
Impairment
provision Book value
Investment on
subsidiaries 60,293,647.85 60,293,647.85 58,356,000.00 58,356,000.00Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
77
Investment in
partnerships 5,506,869.23 5,506,869.23 5,506,869.23 5,506,869.23
Other equity
investment 391,986,451.62 391,986,451.62 391,986,451.62 391,986,451.62
Total 457,786,968.70 457,786,968.70 455,849,320.85 455,849,320.85
(2) Investment on subsidiaries
Name of company
invested
Share
portion
Investment
term
Initial amount
Beginning of
term
Increased this
term
Decreased
this term
End of term
Packaged Tech. Co. 51 20 yrs 15,828,000.00 15,828,000.00 432,174.60 16,260,174.60
Zhongneng Co. 51 30 yrs 5,100,000.00 5,100,000.00 500,853.25 5,600,853.25
Casting Co. 51 30 yrs 11,220,000.00 11,220,000.00 11,220,000.00
Auxiliary Machine
Co.
76 20 yrs 18,240,000.00 18,240,000.00
1,004,620.00
19,244,620.00
Machinery Co. 52 20 yrs 7,968,000.00 7,968,000.00 7,968,000.00
Sub-total 58,356,000.00 58,356,000.00 1,937,647.85 60,293,647.85Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
78
(3) Investment in joint ventures and affiliates
1) Composition of balances at the end of term
Company invested in
Share
portion
Investment
term
Cost
Gain/loss
adjustment
Other
change in
equity
End of term
Hangzhou Steam
Turbine
Environmental
Engineering Co.,
Ltd.
45 20 yrs 9,000,000.00 -4.029,173.27 536,042.50 5,506,869.23
Sub-total 9,000,000.00 -4,029,173.27 536,042.50 5,506,869.23
2) Details of changes in the report term
Company
invested in
Initial amount
Beginning of
term
Change of
cost in
current
term
Adjustment
of gain/loss
in current
term
Cash
dividend
received
this
term
Other
change
in
equity
End of term
Hangzhou
Steam Turbine
Environmental
Engineering
Co., Ltd.
9,000,000.00 5,506,869.23 5,506,869.23
Sub-total 9,000,000.00 5,506,869.23 5,506,869.23
(4) Other equity investments
Details
Name of company
invested
Share
portion
Investment
term
Initial amount
Beginning of
term
Increased
this term
Decreased
this term
End of term
Greenesol Co. (India) 37 Not stated 1,032,411.62 1,032,411.62 1,032,411.62
Hangzhou Bank 8.75 Not stated 239,700,000.00 390,954,040.00 390,954,040.00
Subtotal 240,732,411.62 391,986,451.62 391,986,451.62
(5) Long-term equity investment impairment provisions
No obvious impairment evidence appears at the end of term, thus no impairment provision was provided.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
79
(II) Notes to items of parent company income statements
1. Turnover / cost Current term 1,073,162,456.36/647,775,737.01
(1) Details
Turnover
Items Current term Same period of last term
Major business turnover 1,064,823,034.65 1,059,352,546.68
Other business income 8,339,421.71 16,192,505.56
Total 1,073,162,456.36 1,075,545,052.24
Operation cost
Items Current term Same period of last term
Major business cost 639,718,259.06 721,827,272.25
Other business cost 8,057,477.95 14,932,613.08
Total 647,775,737.01 736,759,885.33
(2) Main business turnover / cost
Current term Same period of last year
Items Income Cost Profit Income Cost Profit
Industrial
steam turbine
1,055,102,412.28 633,925,811.86 421,176,600.42 1,055,045,405.02 720,002,010.59 335,043,094.43
Others 9,720,622.37 5,792,447.20 3,928,175.17 4,307,141.66 1,825,261.66 2,481,880.00
Sub-total 1,064,823,034.65 639,718,259.06 425,104,775.59 1,059,352,546.68 721,827,272.25 337,524,974.43
(3) Top 5 sales income
Items Current term Same period of last term
Total of sales to top 5 clients 623,087,703.40 419,741,995.74
Portion in turnover of the year 58.06% 39.03%
2. Investment income Current term 74,878,300.00
(1) Details
Items
Current
term
Same period of last term
Profit gained from invested entities on cost basis 74,878,300.00 59,221,057.99
Amount of net change of gains from invested entities adjusted on
equity basis
- -
Total 74,878,300.00 59,221,057.99
(2) There was no major limitation on retrieving of investment gains.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
80
IX. Asset impairment provisions
(I) Details
Decreased this term
Items Beginning of term
Provided current
term
Written
back
Transferred
End of term
Bad debt provision 206,414,253.14 31,933,931.16 -3,750.00 238,351,934.30
Inventory impairment
provision
2,794,533.81 2,794,533.81
Fixed asset impairment
provision
8,169,164.70 8,169,164.70
Total 217,377,951.65 31,933,931.16 -3,750.00 249,315,632.81
(II) Statement on reasons and basis of providing
Reasons and basis of provisions provided for bad debt, inventory impairment, and fixed asset impairment are provided in Note VII
(I) 3, 5, 6, and 8.
X. Related parties and transactions
(I) Statement on recognition of related parties
Pursuant to “Enterprise accounting standard No.36 – disclosure of related parties”, related parties are those parties solely control,
jointly control the other party, or with major influence on the other party, and over two parties under common control of a party or
under major influence of this party.
Pursuant to “PLC Information Disclosure Regulations” (Order No. 40, China Securities Regulatory Commission), related legal
persons and natural persons with particular situation are recognized as related parties.
(II) Related party relations
1. Parent company and ultimate controlling party
Name of
companies
Reg. Add.
Organization
code
Business
property
Relation
with the
Company
Registered
capital
Share
portion in
the
Company
(%)
Voting
power in
the
Company
%
Hangzhou
Steam
Turbine
Group
Hangzhou
China
143071842 Limited
liability
Parent
company
500 mil
63.64 63.64Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
81
2. Details about the subsidiaries are available with Note V (I).
3. Affiliates
(1) Profiles
Name of the Companies Reg. Add.
Organization
code
Business
property
Registered
capital
Total
share
portion %
Total
voting
power %
Hangzhou Steam Turbine
Environmental Engineering Co.,
Ltd.
Hangzhou
China
72106627X Manufacturing 20 mil
45 45
4. Other related parties
Name of the parties Relation with the Company
HSTG Technology Association Affiliate of the Group
HSTG Nanfang Sales Co. Affiliate of the Group
Hangzhou Steam Turbine Automobile Sales Service Co., Ltd. Subsidiary of the Group
HSTG Technology Association Affiliate of the Group
HSTG Sales Co., Ltd. Subsidiary of the Group
Hangzhou Steam Turbine Industrial Co. Subsidiary of the Group
Hangzhou Hangfa Group Subsidiary of the Group
Hangzhou Relian International Trading Co. Subsidiary of the Group
Hangzhou Steam Turbine Wooden Packaging Co., Ltd. Subsidiary of the Group
Hangzhou Nanfangtongda Gears Co., Ltd. Subsidiary of the Group
Hangzhou Dongfeng Shipyard Co., Ltd. Subsidiary of the Group
(III) Related transactions
1. Purchasing of goods
Current term Same period of last term
Related parties
Name Amount Pricing Amount Pricing
HSTG Technology Association 51,315.00 Price on agreement
Hangzhou Steam Turbine Automobile Sales
Service Co., Ltd.
6,206,310.22
Price on agreement
12,308,025.66
Price on agreement
Hangzhou Steam Turbine Industrial Co. 940,893.80 Price on agreement 1,703,079.33 Price on agreement
Hangzhou Hangfa Group 70,939,000.00 Price on agreement 23,445,128.21 Price on agreement
Hangzhou Relian International Trading Co. 98,932.00 Price on agreement 95,455,710.34 Price on agreement
Hangzhou Steam Turbine Wooden Packaging
Co., Ltd.
5,312,865.75
Price on agreement
8,144,347.63
Price on agreement
Hangzhou Nanfangtongda Gears Co., Ltd. 7,419,000.00 Price on agreement 5,984,000.00 Price on agreement
Hangzhou Dongfeng Shipyard Co., Ltd. 828,800.00 Price on agreement 1,000,000.00 Price on agreement
HSTG Sales Co., Ltd. 6,200.75 Price on agreementHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
82
Sub-total 91,803,317.52 148,040,291.17
2. Sales of goods
Related parties Current term Same period of last term
Name Amount Pricing Amount Pricing
HSTG Technology Association
8,863,247.84
Price on
agreement
Price on
agreement
HSTG Sales Co., Ltd.
Price on
agreement
123,504.27
Price on
agreement
Hangzhou Hangfa Group
73,316,752.16
Price on
agreement
71,676,495.76
Price on
agreement
Hangzhou Relian International Trading Co.
362,393.16 123,076.92
Price on
agreement
Hangzhou Steam Turbine Automobile Sales
Service Co., Ltd.
26,821.48
Price on
agreement
19,876.01
Price on
agreement
HSTG Technology Association 161,324.79 Price on
agreement
Hangzhou Nanfangtongda Gears Co., Ltd.
Price on
agreement
11,965.81
Price on
agreement
HSTG Energy Tech Co., Ltd.
36,072.65
Price on
agreement
Sub-total 82,766,612.08 71,954,918.77Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
83
3. Outstanding payment with related parties
End of term Beginning of term
Items and name of related parties
Balance
Bad debt
provision
Balance
Bad debt
provision
(1) Accountin receivable
Hangzhou Steam Turbine Group 944,000.00 182,500.00 246,000.00 147,600.00
HSTG Nanfang Sales Co. 20,000.00 12,000.00 20,000.00 12,000.00
Hangzhou Steam Turbine Power Sales Co., Ltd. 67,388,269.38 10,060,663.47 87,771,307.38 10,479,112.97
Hangzhou Hangfa Power Generating Equipment
Co., Ltd.
192,000.00 9,600.00
HSTG Energy Tech Co., Ltd. 75,000.00 3,750.00 75,000.00 3,750.00
Hangzhou Nanfangtongda Gears Co., Ltd. 370,000.00 18,500.00
Sub-total 68,989,269.38 10,287,013.47 88,112,307.38 10,642,462.97
(2) Prepaid account
Hangzhou Hangfa Power Generating Equipment
Co., Ltd.
17,220,946.38 34,212,652.92
Hangzhou Nanfangtongda Gears Co., Ltd. 22,000.00
Hangzhou Relian International Trading Co. 98,932.00
Sub-total 17,341,878.38 34,212,652.92
(3) Account payable
Hangzhou Nanfangtongda Gears Co., Ltd. 430,650.00 1,637,250.00
Hangzhou Steam Turbine Group 115,226.95 305,446.91
Hangzhou Steam Turbine Automobile Sales
Service Co., Ltd.
1,418,992.12 463,731.27
Hangzhou Steam Turbine Industrial Co. 125,491.29 386,429.99
Hangzhou Hangfa Power Generating Equipment
Co., Ltd.
6,438,000.00 5,802,000.00
Hangzhou Relian International Trading Co. 1,202,446.65
Hangzhou Steam Turbine Wooden Packaging
Co., Ltd.
99,567.00 37,395.00
Hangzhou Dongfeng Shipyard Co., Ltd. 398,400.00
Sub-total 9,026,327.36 9,834,699.82
(4) Pre-collected account
Hangzhou Steam Turbine Power Sales Co., Ltd. 67,420,221.16 46,802,280.00
Hangzhou Hangfa Power Generating Equipment
Co., Ltd.
724,412.99Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
84
Hangzhou Steam Turbine Group 2,752,000.00
Sub-total 67,420,221.16 50,278,692.99
(5) Other payable
Hangzhou Steam Turbine Automobile Sales
Service Co., Ltd.
5,799,786.87 5,889,116.02
Hangzhou Steam Turbine Group 28,100,844.35 18,775,326.66
Sub-total 33,900,631.22 24,664,442.68Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
85
4. Other related transactions
(1) Guarantees
Guarantees provided by HSTG to the Company and its subsidiaries, ended December 31, 2008 (RMB0’000)
Guarantee acceptor Loan provider
Balance of guaranteed
loans
Due date
Note
The Company China Imp.& Exp. Bank 10,000.00
Aug 15,
2009
The Company Bank of China Zhejiang Branch 5,000.00
Dec 17,
2009
Packaged Equipment Co. of the
Group
Yan’an Road Branch of Hangzhou
Bank
2,000.00
Apr 16,
2010
Packaged Equipment Co. of the
Group
Yan’an Road Branch of Hangzhou
Bank
3,000.00 Jan 15, 2010
Sub-total 20,000.00
(2) Supplying agreement on services, raw materials, energy, and telecommunication
HSTG provide civil services, property management, and employee training to the Company. The fees payable to HSTG was
RMB2,213,490.00 in the current term. HSTG supplies water and power to the Company and some of the subsidiaries amounted to
RMB6,569,881.65 this term.
(3) Rental
The Company rent the land using right from HSTG by RMB670,430.00 at this term. Office buildings rented from HSTG was
RMB97,674.00 for this term.
(4) Expenses paid on behalf the Company
The basic medical insurance was paid by HSTG on behalf of the Company. For the current term, the Company had paid
RMB278,663.45 under this item.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
86
XI. Contingent Events
(1) Ended June 30, 2009, the Company provided no guarantee to parties other than related parties.
(II) Property in pledging ended June 30, 2009
Pledge
Receiver of
guarantee
Pledge Creditor Original book
value
Net book
value
Guarantee
Total
Amount
Loans
Expired
on
Remark
1,600.00 2010-6-3
Short-term
loans
Casting Co.
Land using
rights and
houses
Construction Bank
Yuhang Branch
44,315,399.83 41,029,547.77
4,000.00 2011-6.23
Long-term
borrowings
Sub-total 44,315,399.83 41,029,547.77 5,600.00
XII. Commitment events
The Company, Casting Co. and Guoneng Co. have made capital commitment amounted to RMB147.2572 million for construction
of new workshops and purchasing of equipment.
XIII. Non-adjustment issues occurred in post-balance sheet issues
No such non-adjustment issues occurred in post-balance sheet issues to be disclosed.
XIV. Other material events
N/AHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
87
XV. Supplementary information
(I) Non-recurring gain/loss
1. (I) According to “PLC Information Disclosure Q&A No.1 – Non-recurring gain/loss (revised 2008)”, the non-recurring gain/loss
of the Company are as the followings (“+” for gain, “-“ for loss):
Items Current term
Gain/loss from disposal of non-working capital, including the neutralized part of the impairment provision provided
already
174,984.39
Refunding and exemption of taxes in excess of authority or without official approval documents
Government subsidies accounted into current income account (except for those government subsidies closely related
to the Company’s business, and received at national statutory standard and amount)
3,214,040.20
Capital adoption fee collected from non-financial organizations and accounted into current gain/loss
Gain/loss from differences between the cost of enterprise merger and the fair value of recognizable net asset of the
invested entities
Gain/loss from non-monetary assets
Gain/loss from commissioned investment or assets
Asset impairment provisions provided for force-majeur
Gain/loss from debt reorganization
Enterprise reorganizing expenses, such as employee placement fee and integration fee
Gain/loss from trade departing from fair value
Current net gain/loss of subsidiaries under same control from beginning of term till date of consolidation
Gain/loss generated by contingent liabilities without connection with main businesses
Gain/loss from change of fair value of transactional asset and liabilities, and investment gains from disposal of
transactional financial assets and liabilities and sellable financial assets, other than valid period value instruments
related to the Company’s common businesses
Restoring of receivable account impairment provision tested individually
Gain/loss from commissioned loans
Gain/loss from change of fair value of investment property measured at fair value in follow-up measurement
Influence of one-time adjustment made on current gain/loss account according to the laws and regulations regarding
tax and accounting
Consigning fee received for cosigned operation
Other non-business income and expenditures other than the above -2,768,348.01
Other gain/loss items satisfying the definition of non-recurring gain/loss account
Sub-total 620,676.58
Less: Influence of enterprise income tax (“-“ for decrease of income tax) -359,681.32
Portion of minor shareholders -892,822.91
Net amount of non-recurring gain/loss attributable to the shareholders of the parent company -631,827.365Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
88
(II) According to “PLC Information Disclosure Regulations No.9 – Disclosure of net
income on asset and earnings per share (Revised in 2007)” the net income on asset
calculated on fully amortizing and weight average and basic and diluted earnings per
share are as the followings:
1. Details
Net return on equity (%) Earnings per share (yuan/share)
On full amortizing
basis weighted average
Basic gains per
share
Diluted gains per
share
Profit of the report period
Current
term
Same
period
of last
term
Current
term
Same
period
of last
term
Current
term
Same
period
of last
term
Current
term
Same
period
of last
term
Net profit attributable to common
shareholders of the Company
11.99 12.77 12.27 12.96 0.6422 0.5225 0.64 0.5225
Net profit attributable to the common
owners of the PLC after deducting of
non-recurring gains/losses
12.02 12.94 12.30 13.14 0.6439 0.5299 0.6439 0.5299
2. Formula of earnings per share
① Basic earnings per share = P÷S
S=S0＋S1＋Si×Mi÷M0－Sj×Mj÷M0－Sk
Including:
P = net profit attributable to common shareholders of the Company, or net profit attributable to common shareholders after
deducting of non-recurring gain/loss
S = weighted average of common shares placed in the market
S0 = Total shares at the beginning of term
S1 = increased shares due to capitalizing of common reserves or dividend
Si = shares increased due to placing of new shares or transferred from debt in the report term
Sj = shares decreased due to actions such as repurchasing in the report term
SK = the amount of shares reduced
M0 = number of months of the report term
Mi = number of months from month next to the share increasing to the end of report term
Mj = number of months from month next to the share decreasing to the end of report termHangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
89
② Diluted earning per share=[P+（Diluting prospective common share interest recognized as expense －transfer expense）×
（1-income tax rate）]/（S0 ＋ S1 ＋ Si×Mi÷M0 － Sj×Mj÷M0—Sk+ weighted average of common shares increased by
term of subscription certificates, share future options, or convertible bonds）
P = net profit attributable to common shareholders of the Company, or net profit attributable to common shareholders after
deducting of non-recurring gain/loss
At calculating of diluted earnings per share, company shall consider the influences of all diluting potential common shares, till the
diluted earnings per share was minimized.
③ On the other hand, when the amount of common shares has increased due to distribution of dividend in shares, capitalizing of
common reserves, and share division, or decreased due to share combination, the enterprise shall recalculate and present the
earnings per share of each period.Hangzhou Steam Turbine Co., Ltd. Interim Report 2009 Full Text
90
Chapter VIII. Documents for Reference
(I) Interim Report 2009 with signature of the Chairman
(II) Financial Report bearing the signatures of the legal representative, financial superior and head of
accounting department.
(III) All documents that have been disclosed on statutory presses assigned by CSRC.
(IV) Other related documents.
The Board of Directors of
Hangzhou Steam Turbine Co., Ltd.
August 21, 2009
