Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Stock Code: 200771 Stock ID: Hangqilun B Announcement No.: 2021-15
Hangzhou Steam Turbine Co., Ltd.
2020 Annual Report
（Stock Code: 200771）
April 2021
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
I. Important Remarks, Table of Contents, and Definitions
The Board of Directors, The Supervisory Committee, the supervisors and the directors of the Company guarantee
that there are no significant omissions, fictitious or misleading statements carried in the Report and we will accept
individual and joint responsibilities for the truthfulness, accuracy and completeness of the Report.
Chairman Mr. Zheng Bin, Chief Financial Officer Zhao Jiamao, and the Chief of Accounting Department Mr.Jin
Can hereby declare: the Financial Statement in the report is guaranteed to be truthful and complete.
All of the directors attended the board meeting on which this report was examined.
This Report contains prospective descriptions, which doesn’t constitute substantial commitment to investors.
Investors are requested to be aware of the risks attached to their investment decisions.
Please refer to the prospects for the future development of the company in Section 4 for the risks in the company's
operations. The company's designated information disclosure media are: Shanghai Securities News (Chinese),
Securities Times (Chinese), Hong Kong Commercial Daily (English), http://www.cninfo.com.cn (In English and
Chinese), all information of the company is subject to the information published in the above selected media.
Investors are advised to pay attention to investment risks.
The company's designated information disclosure media are: In 2020, with the total share capital of 754,010,400
shares at the end of the year deducting 19,551,800 treasury shares repurchased as of date of record by Company,
that is, 734,458,600 shares, the Company would distribute cash dividend to all the shareholders at the rate of CNY
2.5 for every 10 shares (with tax inclusive) , 0 bonus shares ，and no reserve would be converted into share capital.
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Table of Contents
I.Important Notice, Table of contents and Definitions
II. Basic Information of the Company and Financial index
III. Outline of Company Business
IV. Management’s Discussion and Analysis
V. Important Events
VI. Change of share capital and shareholding of Principal Shareholders
VII. Situation of the Preferred Shares
VIII. Information about convertible corporate bonds
IX. Information about Directors, Supervisors and Senior Executives
X. Administrative structure
XI. Corporate Bond
XII. Financial Report
XIII. Documents available for inspection
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Definition
Terms to be defined Refers to Definition
Company, the Company Refers to Hangzhou Steam Turbine Co., Ltd.
The Group, Hangqi Group Refers to Hangzhou Steam Turbine Power Group Co., Ltd.
State-owned Assets Supervision and Administration Commission of
Hangzhou SASAC Refers to
Hangzhou Municipal People's Government
Hangzhou Capital Refers to Hangzhou State-owned Capital Investment and Operation Co., Ltd.
The report period, the current period, the
Refers to January 1 – December 31 2020
current year
Hangzhou Zhongneng Steam Turbine Power Co., Ltd. – the holding
Zhongneng Co. Refers to
subsidiary of the Company
Hangzhou Steam Turbine Casting Co., Ltd. – the holding subsidiary of
Casting Co. Refers to
the Company
Zhejiang Steam Turbine Packaged Technology Development Co., Ltd.
Packaged Tech. Co. Refers to
– the holding subsidiary of the Company
Hangzhou Steam Turbine Machinery Equipment Co., Ltd. - the
Machinery Co. Refers to
holding subsidiary of the Company
Hangzhou Steam Turbine Auxiliary Machinery Co., Ltd. - the holding
Auxiliary Machine Co. Refers to
subsidiary of the Company
Zhejiang Turbine Import & Export Co., Ltd. – the holding subsidiary
Turbine Co. Refers to
of the Company
Hangzhou Steam Turbine Heavy Industry Co., Ltd. - the holding
Heavy Industry Co. Refers to
subsidiary of the Company
The Board of Directors Refers to The Board of Directors of Hangzhou Steam Turbine Co., Ltd.
The Supervisory Committee Refers to The Supervisory Committee of Hangzhou Steam Turbine Co., Ltd.
The Shareholders’ Meeting Refers to The Board of Directors of Hangzhou Steam Turbine Co., Ltd.
RMB, RMB0’000, RMB000’000’000 Refers to RMB Yuan, RMB10 thousand Yuan, RMB100 million Yuan
MW Refers to Unit of power: 1000KW
PLM Refers to Product life circle management information system
MES Refers to Manufacturing execution system
ERP Refers to Enterprise Resources Planning
WMS Refers to Warehouse management system
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
II. Basic Information of the Company and Financial index
I. Basic Information
Stock ID Hangqilun B Stock Code 200771
Stock Exchange Listed in Shenzhen Stock Exchange
Company Name in Chinese 杭州汽轮机股份有限公司
Short form of Company Name
杭汽轮
in Chinese
Name in English HANGZHOU STEAM TURBINE CO.,LTD
Abbreviation in English HTC
Legal representative: Zheng Bin
Reg. Add. No. 357 Shiqiao Rd. Hangzhou
Post Code 310022
Office address No. 357 Shiqiao Rd. Hangzhou
Post Code: 310022
Web Address www.htc.cn
Email. lgw@htc.cn
II. Contacts
Secretary of the Board Representative of Stock Affairs
Name Li Guiwen Wang Caihua
Address No. 357 Shiqiao Rd. Hangzhou No. 357 Shiqiao Rd. Hangzhou
Tel. 0571-85780058 0571-85780438
Fax. 0571-85780433 0571-85780433
Email. lgw@htc.cn wangch@htc.cn
III. Place for information disclosure
Press media for information disclosure Securities Times, Shanghai Securities Daily, Hong Kong Commercial Daily
Web address for the annual report as assigned by
http://www.cninfo.com.cn
CSRC.
Place for inquiry of the annual report Securities and Law Office of Hangzhou Steam Turbine Co., Ltd.
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
IV. Change of Business Registration
Organization code 913300007042026204
The original scope of main businesses of the Company: The design and manufacturing
of steam turbine, gas turbine, other rotating and to-and-fro machinery and auxiliary
equipment, and spare parts and components, sales of self-manufactured products and
the providing of relevant after-sales service and import & export service.
In July 2008, the business scope was modified to: Design and manufacturing of steam
turbine, gas turbine, other rotating and to-and-fro machinery and auxiliary equipment,
and spare parts and components, sales of self-manufactured products and the providing
of relevant after-sales service; sales and import & export of power plant, industrial
driving, industrial turbine equipment and complete equipment. For those involve in
quota or licensing shall follow legal procedures.
Change of main business since listed In March 2009, the business scope was modified to: Design and manufacturing of
steam turbine, gas turbine, other rotating and to-and-fro machinery and auxiliary
equipment, and spare parts and components, sales of self-manufactured products and
the providing of relevant after-sales service; sales and import & export of power plant,
industrial driving, industrial turbine equipment and complete equipment.
In December 2016, the business scope was modified to: Design and manufacturing of
steam turbine, gas turbine, other rotating and to-and-fro machinery and auxiliary
equipment, and spare parts and components, sales of self-manufactured products and
the providing of relevant after-sales service; sales and import & export of power plant,
industrial driving, industrial turbine equipment ,complete equipment and Energy
conservation and environmental protection projects.
Hangzhou Turbine Power Group Co., Ltd. is the controlling shareholder of the
Company, and the actual controller of the Company is the State-owned Assets
Supervision and Administration Commission of Hangzhou Municipal People's
Government. During the reporting period, Hangzhou SASAC transferred 90% of the
Change of holding shareholder (if any)
shares of the Company held by itself to its wholly-owned company Hangzhou
State-owned Capital Investment and Operation Co., Ltd., thus Hangzhou Capital
became the indirect controlling shareholder of the company, and neither the direct
controlling shareholder nor the actual controller of the company changed.
V. Miscellaneous information
CPA hired by the Company
Name of the CPA Pan-China Certified Public Accountants (Special general partnership)
Address of the CPA B Unit, Huarun Building, No.1366, Qianjiang Road, Jianggan District Hangzhou
Name of CPA signed on the
Sheng Weiming, Ye Xianbin
auditors’ report
The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.
□ Applicable √Not applicable
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
The Financial advisor performing persist ant supervision duties engaged by the Company in the reporting period
□ Applicable √Not applicable
VI.Summary of Accounting data and Financial index
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √No
2020 2019 Changed over last year（％） 2018
Operating revenue（Yuan） 4,496,445,244.55 4,279,848,518.81 5.06% 4,642,807,589.69
Net profit attributable to the shareholders
459,345,443.38 345,138,064.00 33.09% 345,824,339.47
of the listed company（Yuan）
Net profit after deducting of
non-recurring gain/loss attributable to the 372,697,902.88 302,012,173.45 23.40% 280,075,101.48
shareholders of listed company（Yuan）
Cash flow generated by business
454,416,600.69 5.13% 644,433,167.20
operation, net（Yuan） 432,255,831.23
Basic earning per share(Yuan/Share) 0.62 0.46 34.78% 0.46
Diluted gains per share(Yuan/Share) 0.62 0.46 34.78% 0.46
Net asset earning ratio（%） 6.24% 5.48% 0.76% 5.82%
End of 2020 End of 2019 Changed over last year（％） End of 2018
11,569,169,903.8
Gross assets（Yuan） 15,392,653,924.41 12,600,115,579.96 22.16%
1
Net assets attributable to shareholders of
8,104,788,941.36 6,607,496,148.58 22.66% 6,007,540,929.16
the listed company（Yuan）
The lower one of net profit before and after deducting the non-recurring gains/losses in the last three fiscal years
is negative, and the audit report of last year shows that the ability to continue operating is uncertain
□Yes √No
The lower one of net profit before and after deducting the non-recurring gains/loses is negative
□Yes √No
VII.The differences between domestic and international accounting standards
1. Differences between the net profit and net asset in the financial reports prepared under IAS and Chinese
Accounting Standard
□ Applicable √Not applicable
No difference in the reporting period.
2. Differences between the net profit and net asset in the financial reports prepared under IAS and Chinese
Accounting Standard
□ Applicable √Not applicable
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
No difference in the reporting period.
VIII.Main Financial Index by Quarters
In RMB
First quarter Second quarter Third quarter Fourth quarter
Operating revenue 697,880,677.71 1,323,786,748.56 1,271,363,320.01 1,203,414,498.27
Net profit attributable to the
-15,519,633.02 246,427,770.74 132,265,657.57 96,171,648.09
shareholders of the listed company
Net profit after deducting of
non-recurring gain/loss attributable
-22,412,384.48 187,920,405.28 111,826,970.81 95,362,911.27
to the shareholders of listed
company
Net Cash flow generated by
150,122,015.81 176,842,676.22 -117,174,042.01 244,625,950.67
business operation
Any material difference between the financial indicators above or their summations and those which have been
disclosed in quarterly or semi-annual reports?
□ Yes √ No
IX. Items and amount of non-current gains and losses
√ Applicable □ Not applicable
In RMB
Items Amount (2020) Amount (2019) Amount (2018) Notes
Non-current asset disposal gain/loss(including the write-off
-20,964,286.32 -12,341,200.47 -40,478.16
part for which assets impairment provision is made)
Tax refund, deduction and exemption that is examined and
approved by authority exceeding or has no official 2,140,524.49
approval document.
Governmental Subsidy accounted as current gain/loss,
except for those subsidies at with amount or quantity fixed
38,013,637.22 44,701,311.40 23,300,479.35
by the national government and closely related to the
Company’s business operation.
Income from the exceeding part between investment cost
of the Company paid for obtaining subsidiaries, associates
1,149,217.06
and joint-ventures and recognizable net assets fair value
attributable to the Company when acquiring the investment
Debt restructuring profit or loss 3,350,920.00 -508,672.84 7,064,832.00
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Gains or losses arising from contingencies other than those
32,202,504.57 -32,202,504.57
related to normal operating business
In addition to normal business with the company effective
hedging related business, holders of tradable financial
assets, transactions and financial liabilities arising from
changes in fair value gains and losses, as well as the 53,211,692.31 74,013,529.88 48,433,535.22
disposal of trading of financial assets, trading financial
liabilities and available-for-sale financial assets gains
return on investment
Other non-operating income and expenditure beside for the
-2,606,122.78 6,335,775.38 -1,703,546.21
above items
Less: Influenced amount of income tax 12,239,646.17 17,931,245.32 11,452,856.21
Amount of influence of minority interests（After tax） 5,470,375.39 18,941,102.91 1,993,252.49
Total 86,647,540.50 43,125,890.55 65,749,237.99 --
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on
information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and
its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure
for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as
recurring gains and losses, it is necessary to explain the reason.
□ Applicable√ Not applicable
None of Non-recurring gain /loss items recorgnized as recurring gain /loss/items as defined by the information
disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period.
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
III. Business Profile
Ⅰ.Main Business the Company is Engaged in During the Report Period
As the leading provider of turbo machinery equipment and relevant service in China, our company is mainly
famous for designing and producing rotating turbo machinery like industrial steam turbines and gas turbines. Our
company, one of the major companies drafting the industrial standard in Chinese domestic industry of industrial
steam turbine, has developed into the biggest base to research, develop and produce industrial steam turbines in
China and ranks first among industrial steam turbine producers in terms of the market occupancy. Holding the
principle “our products should be based on clients’ demands” as our business mode and characteristic, our
company designs and produces in accordance with every client’s personal demands so as to meet personalized
needs in engineering projects to the utmost. To realize the fast research and development of our products, our
company has adopted the advanced modular design technique and, on the other hand, introduces information
technique to assist the collaborative production to achieve the resource saving and flexible production. In addition,
our company also provides our clients with relevant service such as engineering programs, general engineering
contracting, operation and maintenance of our products as well as remote control and so on.
Industrial steam turbines use the steam featuring high temperature and high pressure as their working medium so
as to convert the thermal energy into mechanical energy to drive various industrial equipments through the
rotating steam turbines. As for different objects driven by industrial steam turbines, the steam turbines could be
divided into industrial driving steam turbines and industrial power-generation steam turbines. Mainly driving
rotating machines like compressors, air blowers, pumps and squeezers, industrial driving steam turbines, as the
core power part in numerous large-scale industrial equipments, are always introduced into some industries like
oil refining, chemical engineering, chemical fertilizer, building materials, metallurgy, electric power, light
industry and environmental production. The industrial power-generation steam turbines, mainly utilized to drive
electric generators and provide thermal energy, are mainly adopted in private stations, regional projects of
combined heat and power generation, power generation by recycling waste heat in industrial production, urban
waster power plants and gas-steam combined cyclepower stations in various industrial sectors. The gas turbines
produced by our company are mainly used by metallurgical industry to recycle the waste heat from the blast
furnace exhaust to generate power.
In the gas turbine business, the Company has cooperated with Siemens on the advanced natural gas turbine
SGT-800 model-with features of high efficiency, high reliability and low emission, thus to enter the distributed
natural gas field. As the general whole-set maker of SGT-800 in China, the company has launched the gas turbine
business in respect of the project procurement and the integrated implementation. Hangzhou Steam Turbine has
the type selection ability for the distributed energy combined cycle project, has established a complete system of
supporting standard and material system, and it can complete the independent processing or matching work for
the equipment besides the gas turbine body. In the industrial fields including the cogeneration /combined cycle
power plant and the oil & gas project with distributed energy projects that adopt the small and medium gas
turbines, the Company not only can provide gas turbine equipment for customers, but also can provide customers
with complete sets of equipment for gas turbine power plant and the efficient integrated solutions. Especially, it
can provide customers with operational support services throughout the product life, and this service model is
conductive for the establishment of long-term business cooperation relationships between the company and its
customers.
As the major producer of industrial equipments in China during the report period, our company is mainly
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
benefited from the following factors in terms of the elements driving our business performance:
1. On the basis of market demands. The relevant market demands fluctuate differently due to various business
condition and investment cycles in different industrial fields. The company further made more specified positions
toward the market for the products, implemented the differentiated marketing strategy, and integrated the business
sectors and tapped into the potential During the reporting period, the company fully grasped the market
characteristics such as the continuation of the refining-chemical integration, the warming of coal chemical
industry, and the improvement of customer concentration in the market, actively planned the "online marketing"
work mode and piloted the new carrier of "online+offline" work according to the needs of different customers,
further consolidate the original market position and expand the market share in new fields. The overseas markets
overcame the impact of the epidemic and further expanded their market influence.
2. Innovation and further reform in difficult areas of product technology.
Our company continuously improves product technical performance and tackles hard issues in the scientific
researches of product structure, core parts, basic design, manufacturing technology, material technology, etc. In
addition, basing on clients’ demands, our company launches the study “The Demonstration and Application
Project for Packaging Technology of Steam Turbine” to push forward the intelligence of our products and the
development of the integration technology. Meantime, the company cooperated with universities, scientific
research institutes to build the technological exchange and cooperation platform.
3. Upgrading and transformation of industrial structure transformation. The company jointed with Siemens
to enter the distributed energy market and enhance the development and utilization of natural gas distributed
energy. In the industrial fields including the cogeneration /combined cycle power plant and the oil & gas project
with distributed energy projects that adopt the small and medium gas turbines, the Company not only can provide
gas turbine equipment for customers, but also can provide customers with complete sets of equipment for gas
turbine power plant and the efficient integrated solutions.
4. Brand and market position. The company’s products have a good reputation and extensive brand influence
in the domestic market, The company has maintained a leading market share in the domestic industrial drive. The
company's products have a high reputation and brand influence in the domestic market.
5.Cost controlling level. As domestic labor costs continue to rise and the price of industrial products continue
to
decline, the product profitability is facing a severe test. In recent years, the company continuously improves the
level of costs controlling by improving the organizational structure, optimizing business processes, enhancing the
supply chain controlling, strengthening risk management, raising the efficiency of all the staff and so on.
6.Emphasis on quality engineering and services: promote the key project management, meticulously plan
key projects, implement dynamic quality supervision; attach importance to products’ after-sales service market,
integrate existing resources to increase after-sales service initiative, extend product value chain, and promote the
company’s transformation from manufacturing to service.
II.Major Changes in Main Assets
1.Major Changes in Main Assets
Main assets Major changes
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Mainly caused by the volatility in share price of Hangzhou Bank with the Company’s
Equity assets
investment and participation
It is mainly due to the transfer of the completed part of the steam turbine heavy industry
Fixed assets
project under construction.
Intangible assets No major changes
It is mainly due to the fact that the new investment of steam turbine heavy industry
Construction in progress project is close to the amount of fixed assets transferred after completion, and the balance
has no significant change.
2. Main Conditions of Overseas Assets
□ Applicable √ Not applicable
III.Analysis On core Competitiveness
Firstly. A complete technical innovation system was established. The Company has under its possession of
national, provincial, and municipal grade technical centers, a doctorial workstation, and an academician
workstation. Close co-operations were carried out with institutions and universities from throughout the country.
As the main drafter of national standard on industrial steam turbine, the Company has the newest technical
trend under its close observation. The Company is now providing nearly 600 different models of steam turbines
to the customers and hold the newest technical system covering the product lines up to 150 MW.Cooperating
with SIEMENS in the field of gas turbine, our company has been capable of selecting the model of the
combined recycling project of distributed energy. In addition, our company has also been able to finish the
independent processing or supporting work which doesn’t need to depend on the gas turbine machine.
Secondly .The advantages of solutions. The modular design of industrial steam turbine and the production
pattern featuring parallelization production enable our company to give considerations to the cost, date of
delivery and clients’ demands in the process of production in accordance with clients’ personalized designs,
thereby making our company capable of advancing with the development trend of individual requirements. Our
company has always been devoting to the localization in terms of the gas turbine business so as to achieve the
localized one-stop service step by step including the sale, production, installation, debugging, operation,
training and after-sale service. Our company has always been striving to provide clients with the complete
equipment of gas turbine power station and the efficient total solutions.
Thirdly, the Company has established strategic co-operations with main customers in the country. Further
marketing approaches were carried on by involving itself in the customers’ value. A sound and steady image has
been set up in the domestic steam turbine market. In the global market, the Company has acquired multiple
important certifications and has established a primary global recognition.
Fourthly, the Company has its complete service providing system. The Company is not only capable to provide
onsite 24-hour service for the Company’s own products, but also accumulated rich experiences in technical
maintenance and reengineering of other manufacturers’ products.
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Fifthly, the Company has cultivated a significant advantage in human resources. Great importance has been
attached to construction of work teams with collection of high-end workforce in the areas of research &
development, At the same time, our company values the cooperation with universities. “Zhejiang Technical
Association for Gas Turbines in Equipment Manufacturing Industry” was officially founded jointly by our
company and Zhejiang University and other scientific research institutions to build a new platform for
integration of production and research in terms of gas turbine technology. The Company has cultivated a
significant advantage in human resources. Great importance has been attached to construction of work teams
with collection of high-end workforce in the areas of research & development, designing, technique, testing, and
quality control. An excellent workforce provides a sound foundation to lift quality and services.
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
IV. Management’s Discussion and Analysis
I. General
The company carried out various management work based on the economic work policy of "winning the
relocation, intensively cultivating the market, developing enterprises by culture and striving for first-class". The
annual business performance showed a trend of low and then high, with the completion of various business
indicators better than expected, highlights in the driving market, fruitful achievements in scientific and
technological progress, successful completion of relocation, accelerated informatization construction and initial
improvement of management. During the reporting period, the company realized operating income of 4,496. 4452
million yuan, with a year-on-year increase of 5.06%; The total profit was 620.933 million yuan, with a
year-on-year increase of 30.07%; Net profit attributable to shareholders of listed companies was 459.3454
million yuan, with a year-on-year increase of 33.09%. The company's business objectives were achieved smoothly.
The main work carried out during the reporting period and the operating results obtained are as follows:
(I) Grasp the opportunity, intensively cultivate the market and occupy the driving commanding heights
During the reporting period, the refining and chemical market in the domestic driving sector continued, the
coal chemical industry market tended to recover, the competition in the traditional thermoelectric field in the
industrial power generation sector intensified, the development of the feed water pump market was still limited,
the overseas market share was limited, and the overall new orders received by the company rose steadily.
The company continued to seize the high-quality orders of domestic large-scale refining-chemical
integration and ethylene plant projects by virtue of its competitive advantages, and signed contracts for
Shenghong Petrochemical's 16 million tons/year refining-chemical integration project, PetroChina Jieyang's 20
million tons refining and 1.4 million tons ethylene project, Zhenhai Refining and Chemical's 1.2 million tons
ethylene project, CNOOC Huizhou Refining and Chemical Phase 2.5 project, and Sinopec Hainan Refining and
Chemical's 1 million tons ethylene and supporting refining units.
With the help of the recovery trend of coal chemical market, the company successfully signed a contract for
the steam turbine for phase I project of 1.8 million tons of ethylene glycol of Shaanxi Coal Group, and
successfully obtained the coal chemical projects such as Yulin Energy Ethylene Glycol and Ningxia Baofeng
Energy Coal-to-Olefin Phase III.
Competition in the power generation market is becoming more and more fierce, and orders in the traditional
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
thermoelectric field are declining. Although the market of feed water pump and induced draft fan has achieved
better results than in previous years, the market development space in this field is limited.
The company has deepened cooperation with Siemens in an all-round way, covering SGT-800, SGT-700,
SGT-300, SGT-2000E and other models, effectively improving the sales, design and after-sales service
management capabilities of gas turbines, and further expanding the market influence. In the field of gas turbine
market, the company signed contracts for CGNPC Wuhan Hanergy Distributed Energy Project and Anhui
Shanneng Fanchang Economic Development Zone Cogeneration Project.
(II) Continue to innovate, keep improving, and make break-through in new technological fields
The company continued to increase investment in research and development, independently innovated and
developed new products, and tackled key technical problems. During the reporting period, 33 scientific research
projects were established in the company's headquarters, including 9 new products and 24 scientific research
projects. 29 scientific research projects have been completed and accepted. Where, the project "Key Technology
and Application of High Efficiency and High Reliability Variable Speed Industrial Steam Turbine for Driving"
won the first prize of China Machinery Industry Science and Technology Award. The project "Industrial Steam
Turbine for Core Plant of Ultra-large Ethylene Project with an Annual Output of 1.2-1.5 million tons" was
selected as the first equipment engineering key project in Zhejiang Province in 2020. "1.5 million tons/year
Industrial Steam Turbine for Ethylene Plant Drive" won the first international product (set) in the key field of
equipment manufacturing industry in Zhejiang Province in 2020. The company won the honorary title of "Single
Champion Model Enterprise in Manufacturing Industry (Fifth Batch)" by Ministry of Industry and Information
Technology and China Federation of Industrial Economics.
The company completed the construction of the overall technical framework of the 100,000-class industrial
steam turbine, and formed a complete product map of the 120,000-kilowatt industrial-driven steam turbine. The
unit efficiency was steadily improved, and the models were more abundant. The successful development of Dalian
Hengli 1.5 million tons steam turbine for ethylene plant indicates that the company's products and technology
have reached the world leading level. The delivery of the first subcritical unit shows that the company's technical
design capability, material standard system and process manufacturing capability have entered a new level and
have been widely recognized by the market.
The company's "Industrial Internet Application Service Platform Construction Project" has been put into
trial operation. The company completed the docking of supply chain system and WMS system of stereo library,
continuously promoted MES system, promoted digital factory research and hybrid cloud project, and built a more
favorable platform for the company's intelligent manufacturing.
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
The company and its holding subsidiaries have obtained 3 invention patents, 38 utility model patents and 5
software copyrights. Where, the company's "Last Blade of Low Pressure Group of Large Flow Air-cooled Steam
Turbine" won the Chinese Patent Excellence Award for the first time. The company and its holding subsidiaries,
Hangzhou Zhongneng Steam Turbine Power Co., Ltd., Hangzhou Guoneng Steam Turbine Engineering Co., Ltd.,
Zhejiang Turbine Complete Technology Development Co., Ltd., Zhejiang Huayuan Steam Turbine Machinery Co.,
Ltd. and Hangzhou Turbine Casting Co., Ltd., have all been appraised as "high-tech enterprises".
(III) Relocate in an all-round way, ensure supply and win the tough battle of production
The main production workshops of the company, such as assembly workshop and rotor workshop, have been
successfully completed and accepted, and the steam turbine manufacturing base has already met the production
conditions. In November 2020, the company's production workshop, personnel and equipment were all moved to
Hangzhou Turbine Manufacturing Base, and the company's relocation work was successfully completed.
Affected by objective factors such as epidemic situation and relocation, the company faces many difficulties
such as shrinking production capacity and hindering the progress of outsourced processing. In the face of
difficulties, the company coordinated the production workshops to organize the division of labor, and created
favorable conditions for reducing the output backlog and realizing goods delivery through the close cooperation
and continuous production and overtime work of each production workshop. In order to ensure production
capacity, the company constantly improved supply chain management, developed supplier cooperation units,
strengthened communication and cooperation with suppliers, and ensured that the production and processing of
important products of the company were completed on time.
The company continuously optimized the production and process management processes, and further
strengthened the company's complete process capacity building. The painting workshop is stationed in Jingzi
Workshop to perform the functions of parts cleaning and primer application, and further improve the professional
management of production process. A distribution center is set up to perform digital management of all parts, so as
to realize the continuous change of intelligent factory. Through the integration of resources and process
reengineering, the production efficiency has been greatly improved.
(IV) Led by culture, driven by strategy, focus on transformation by management
The company started the construction of corporate culture in an all-round way, produced "Hangzhou
Turbine's Passionate Youth" by organizing a series of activities of "Corporate Culture Tour", and held the Artisan
Quality Month with the theme of "Artisan Spirit", which continuously promoted the deep integration of soft power
of corporate culture and hard power of corporate management, and formed a good atmosphere of "everyone
respects culture and lives in culture", which enabled the broad masses of cadres and employees to deeply
16
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
understand the core values of enterprises and effectively enhanced the cohesion, combat effectiveness and soft
power of the company.
The company promoted the strategic planning in an orderly manner, looked forward to the future market and
industry pattern by analyzing the changes of internal and external environment and combining with its own
business situation, and formulated the "Fourteenth Five-Year Plan" strategic plan and preliminary strategic
decomposition plan for Hangzhou Turbine in the new era.
During the reporting period, focusing on the "Top Ten Management Key Tasks", the company continuously
improved its management level, paid attention to relocation and construction to ensure production capacity,
focused on innovation promoted by orders, refined culture and educated talents, and prevented risks and
controlled quality. It continuously strengthened and improved property rights management, further standardized
the equity incentive mechanism of holding subsidiaries, and effectively motivated the management and technical
backbone of subsidiaries; optimized organizational adjustment and continuously promoted process integration and
lean production management; strengthened the construction of talents, and introduced high-level talents and
skilled personnel evaluation mechanism. Through a series of management work, the management level is
continuously improved.
During the reporting period, the company won the title of "National Excellent Quality Management Team of
Machinery Industry"; and successfully passed the "Made in Zhejiang" certification audit; The company's
"Dynamic Profit Management Model of Order-based Customized Manufacturing Enterprises" project won the
second prize of national enterprise management modernization innovation achievement and the first prize of
Zhejiang and Hangzhou enterprise management modernization innovation achievement.
II. Main business analysis
1. General
Refer to relevant contents of “1.Summarization” in “Discussion and Analysis of Management”.
2. Revenue and cost
(1)Component of Business Income
In RMB
2020 2019 Changed over
Amount Proportion Amount Proportion last year（％）
Total operating revenue 4,496,445,244.55 100% 4,279,848,518.81 100% 5.06%
17
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
On Industries
Boiler and power machine
4,021,528,414.73 89.44% 3,880,130,430.40 90.66% 3.64%
manufacture
Nonferrous metal alloy
160,896,527.13 3.58% 139,922,604.14 3.27% 14.99%
manufacture
Other 314,020,302.69 6.98% 259,795,484.27 6.07% 20.87%
On Product
Industrial steam turbine 3,389,671,162.40 75.39% 3,392,255,777.03 79.26% -0.08%
Casting products 160,896,527.13 3.58% 139,922,604.14 3.27% 14.99%
Auxiliary machinery 310,472,958.92 6.90% 249,567,990.72 5.83% 24.40%
Part 321,384,293.41 7.15% 238,306,662.65 5.57% 34.86%
Other 314,020,302.69 6.98% 259,795,484.27 6.07% 20.87%
District
Domestic 4,403,678,444.24 97.94% 3,946,992,579.93 92.22% 11.57%
Overseas 92,766,800.31 2.06% 332,855,938.88 7.78% -72.13%
(2)Situation of Industry, Product and District Occupying the Company’s Business Income and Operating
Profit with Profit over 10%
√ Applicable □ Not applicable
In RMB
Increase/decreas
Increase/decrease
Increase/decrease e of gross profit
of business cost
Gross profit of revenue in the rate over the
Turnover Operation cost over the same
rate(%) same period of the same period of
period of previous
previous year(%) the previous
year (%)
year (%)
On Industries
Boiler and power
4,021,528,414.73 2,778,332,313.12 30.91% 3.64% 2.29% 0.91%
machine manufacture
On Products
Industrial steam turbine 3,389,671,162.40 2,356,880,248.88 30.47% -0.08% -0.75% 0.47%
District
Domestic 4,403,678,444.24 3,011,149,397.40 31.62% 11.57% 10.82% 0.46%
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main
business based on latest on year’s scope of period-end.
□ Applicable √ Not applicable
(3)Whether the Company’s Physical Sales Income Exceeded Service Income
18
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
√ Yes □ No
Change over same
Business categories Items Unit 2020 2019
period last year
Sales Set/package 384 347 10.66%
Steam turbine Output Set/package 388 352 10.23%
Inventory Set/package 189 185 2.16%
Sales Set/package 6 4 50.00%
Gas turbine,
Output Set/package 6 4 50.00%
compressor
Inventory Set/package 7 7 0.00%
Reasons for y-o-y relevant data with over 30% changes
√ Applicable □ Not applicable
The gas turbine and compressor products have a small output and a low proportion in the total products of
our Company. Therefore, the slight change in the absolute production and sales and stock in the period caused a
large fluctuation in its relative increase and decrease.
(4)Degree of Performance of the Significant Sales Contract Signed up to this Report Period
□Applicable √ Not applicable
(5)Component of business cost
Products category
In RMB
2020 2019
Proportion in the Proportion in the Increase/Decrease
Products category Items
Amount operating costs Amount operating costs (%)
(%) (%)
Industrial steam turbine 2,356,880,248.88 76.76% 2,374,615,950.24 80.16% -0.75%
Casting products 127,741,579.13 4.16% 122,727,364.05 4.14% 4.09%
Auxiliary machinery 234,011,932.20 7.62% 201,257,821.75 6.79% 16.27%
Part 187,440,132.04 6.10% 140,370,601.90 4.74% 33.53%
Other 164,265,347.58 5.35% 123,246,927.38 4.16% 33.28%
Subtotal 3,070,339,239.83 100.00% 2,962,218,665.32 100.00% 3.65%
(6)Whether Changes Occurred in Consolidation Scope in the Report Period
√ Yes □√No
Reduced scope of consolidation
Equity disposal Net assets on disposal Net profit from opening
Name Equity disposal point
method date to disposal date
Hangzhou Kaineng Forging Co., Ltd. Withdraw April 15,2020 3,223,519.61 -716.40
19
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
(7)Relevant Situation of Significant Changes or Adjustment of the Business, Product or Service in the
Company’s Report Period
□ Applicable √ Not applicable
(8)Situation of Main Customers and Main Supplier
Information of Main sales customers
Total sales amount to top 5 customers (Yuan) 1,263,345,047.69
Proportion of sales to top 5 customers in the annual sales(%) 28.10%
Proportion of the sales volume to the top five customers in the total
0.00%
sales to the related parties in the year
Information of the Company’s top 5 sales customers
No Name Amount（RMB） Proportion
1 Customer 1 707,090,016.79 15.73%
2 Customer 2 163,377,143.32 3.63%
3 Customer 3 155,147,545.89 3.45%
4 Customer 4 133,926,481.46 2.98%
5 Customer 5 103,803,860.23 2.31%
Total -- 1,263,345,047.69 28.10%
Other notes
□ Applicable √ Not applicable
Principal suppliers
Total purchase of top 5 Suppliers（Yuan） 509,579,732.34
Percentage of total purchase of top 5 suppliers In total annual purchase(%) 14.33%
Proportion of purchase amount from the top 5 suppliers in the total purchase
8.17%
amount from the related parties in the year
Information about the top 5 suppliers
No Name Amount（RMB） Proportion
1 Supplier 1 222,699,772.23 6.26%
2 Supplier 2 103,409,200.92 2.91%
3 Supplier 3 67,954,563.59 1.91%
4 Supplier 4 62,502,974.86 1.76%
5 Supplier 5 53,013,220.73 1.49%
Total -- 509,579,732.34 14.33%
Other notes
20
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
□ Applicable √ Not applicable
3.Expenses
In RMB
2020 2019 Increase/Decrease(%) Notes
Sale expenses 222,561,812.71 214,261,920.21 3.87% No major changes
Administration expenses 499,397,682.96 488,985,589.47 2.13% No major changes
It is mainly due to the increase of net
Financial expenses 19,762,204.13 -20,132,631.18 198.16%
exchange loss in the current period.
It is mainly due to the increase of R&D
R & D cost 207,848,047.96 172,171,661.60 20.72%
investment in this period.
4. Research and Development
√ Applicable □ Not applicable
During the reporting period, the company's R&D investment was mainly used for the development of new
products and the upgrading of product technology.
R & D investment situation
2020 2019 Increase/Decrease(%)
Number of Research and Development
866 910 -4.84%
persons (persons)
Proportion of Research and
25.87% 25.05% 0.82%
Development persons
Amount of Research and Development
207,848,047.96 172,171,661.60 20.72%
Investment (In RMB)
Proportion of Research and
Development Investment of Operation 4.62% 4.02% 0.60%
Revenue
Amount of Research and Development
0.00 0.00 0.00%
Investment Capitalization (In RMB)
Proportion of Capitalization Research
and Development Investment of 0.00% 0.00% 0.00%
Research and Development Investment
The Reason of the Prominent Change in Total Amount of Research and Development Input Occupying the
Business Income Year on Year
□ Applicable √ Not applicable
Explanation of the Reason for Substantial Changes in the Research and Development Input’s Capitalization Rate
and Its Reasonableness
21
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
□ Applicable √ Not applicable
5.Cash Flow
In RMB
Items 2020 2019 Increase/Decrease(%)
Subtotal of cash inflow received from operation 4,280,286,713.91 4,090,780,529.34 4.63%
activities
Subtotal of cash outflow received from operation 3,825,870,113.22 3,658,524,698.11 4.57%
activities
Net cash flow arising from operating activities 454,416,600.69 432,255,831.23 5.13%
Subtotal of cash inflow received from investing 3,880,181,356.14 3,596,560,785.34 7.89%
activities
Subtotal of cash outflow for investment activities 3,938,754,746.17 3,266,911,871.27 20.57%
Net cash flow arising from investment activities -58,573,390.03 329,648,914.07 -117.77%
Subtotal cash inflow received from financing 270,300,000.00 97,700,000.00 176.66%
activities
Subtotal cash outflow for financing activities 578,938,859.94 475,530,756.05 21.75%
Net cash flow arising from financing activities -308,638,859.94 -377,830,756.05 18.31%
Net increase in cash and cash equivalents 64,300,628.53 383,720,833.72 -83.24%
Notes to the year-on-year change of the relevant data
√ Applicable □Not applicable
Items 2020 2019 Proportion % Reason
Net cash flow arising from Mainly due to the increase in t
investment activities he net purchase of wealth man
-58,573,390.03 329,648,914.07 -117.77%
agement products during the c
urrent period.
Mainly due to the increase in n
Net cash flow arising for financing
-308,638,859.94 -377,830,756.05 18.31% et bank loans during the curren
activities
t period
Notes to the big difference between cash flow from operating activities and net profit in the reporting year
□ Applicable √ Not applicable
III.Analysis of Non-core Business
√ Applicable □ Not applicable
In RMB
22
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Proportion
Sustainable
Items Amount in total Explanation of cause
(yes or no)
profit
146,163,604.81 23.54% It is mainly due to the dividends of Hangzhou Bank and the
Investment income
investment income of wealth management products this year
Changes in fair It mainly due to the income from changes in fair value of financial
value gains and 2,824,771.16 0.45% assets that are measured at fair value and whose changes are included
losses in current profits and losses
Impairment of
-73,523,271.22 -11.84% Mainly due to the increase in net bank loans during the current period
assets
It is mainly due to that fact that the plaintiff of Henan Junhua
Non-operating
46,012,519.79 7.41% litigation case withdrew the lawsuit, and the original accrued
income estimated liabilities were reversed
Non-operating It is mainly due to the loss of disposal of non-current assets caused
37,203,173.86 5.99%
expenses by policy relocation
Mainly due to the recognition of other income in the relocation
Other income 104,733,657.43 16.87%
compensation
IV.Condition of Asset and Liabilities
1.Condition of Asset Causing Significant Change
The company will implement the new income standards or new lease standards for the first time from 2020 and
adjust and implement the related projects of the financial statements at the beginning of the year
Applicable
In RMB
End of 2020 End of 2019
Proportion Notes to the
Proportion Proportion
increase/decre significant
Amount in the total Amount in the total
ase change
assets(%) assets(%)
Monetary fund 1,829,481,187.49 11.89% 1,756,320,237.50 13.94% -2.05%
Accounts receivable 1,618,798,305.46 10.52% 1,480,037,847.91 11.75% -1.23%
Inventories 2,171,753,113.46 14.11% 2,051,290,269.07 16.28% -2.17%
Long-term equity investment 23,355,441.61 0.15% 22,129,585.83 0.18% -0.03%
Fixed assets 1,094,505,770.45 7.11% 724,702,558.18 5.75% 1.36%
Construction in process 804,921,709.95 5.23% 799,410,358.84 6.34% -1.11%
Short-term loans 216,722,803.41 1.41% 97,840,187.21 0.78% 0.63%
Long-term loans 21,623,520.00 0.14% 22,435,762.23 0.18% -0.04%
2.Asset and Liabilities Measured by Fair Value
√ Applicable □ Not applicable
23
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
In RMB
Impair
ment
Profit/loss on fair provid Oth
Cumulative fair
value changes in ed in Purchased in this Sold in this er
Items Opening balance value changes Closing balance
this reporting this reporting period reporting period cha
charged to equity nge
period Report
ing
period
Financial assets
1.Transactional financial
assets（Excluding
854,210,990.44 -359,181.10 -1,187,410.46 3,558,898,000.00 3,391,068,000.00 1,021,681,809.34
Derivative financial
assets）
4.Other Equity
2,490,376,886.96 1,566,001,186.56 3,665,424,033.52 4,056,378,073.52
Instrument Investment
5.Other non-current
142,244,014.16 17,068,445.19 9,831,828.55 140,936,377.90 18,376,081.45
financial assets
Total of the above 3,486,831,891.56 1,582,710,450.65 3,674,068,451.61 3,558,898,000.00 3,532,004,377.90 5,096,435,964.31
Financial Liabilities 0.00 0.00 0.00 0.00 0.00 0.00
Significant changes in the measurement attributes of the main assets in this Reporting Period
□ Yes √ No
3. Restricted asset rights as of the end of this Reporting Period
Items End of Book value Reason
Monetary fund 119,272,908.04 Utilized for issuing bank acceptance bill and L/G
Transactional financial assets 1,681,809.34 In a lock-up period
Financing receivable 47,724,281.92 Utilized for issuing bank acceptance bill
Dividend receivable 43,605,292.60 Utilized for guaranteeing the investment loan for China Development Funds
Other Equity Instrument
672,593,600.00 Utilized for guaranteeing the investment loan for China Development Funds
Investment
Utilized for pledging to obtain the bank loan and guaranteeing the
Fixed assets 514,038,703.77
investment loan for China Development Funds
Construction in process 265,737,787.54 Utilized for guaranteeing the investment loan for China Development Funds
Utilized for pledging to obtain the bank loan and guaranteeing the
Invisible assets 81,934,866.93
investment loan for China Development Funds
Total 1,746,589,250.14
24
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
V.Investment situation
1. General
√ Applicable □ Not applicable
Investment Amount in 2020(Yuan) Investment Amount in 2019(Yuan) Change rate
467,012,502.84 419,410,028.18 11.35%
2.Condition of Acquiring Significant Share Right Investment during the Report Period
□ Applicable√ Not applicable
3.Situation of the Significant Non-equity Investment Undergoing in the Report Period
√ Applicable □ Not applicable
In RMB
Accrue
Reasons
d
for not
Accrued Realize
Reachin
Investment Actual d
Industry Capit g the
Proje Investm Fixed amount in Investment Anticipat Income Disclos
involved in al Projectsche Planned Disclos
ct ent investme this Amount up to ed up to ure
ure date
investment Sour dule Schedule Index
name method nts or not reporting the End of income the End
projects ce and
period Reporting of
Anticipat
Period Reporti
ed
ng
Income
Period
New General
plant Self-buil equipment 455,701,379 1,278,742,57 Self
Yes 73.78% No
.74 6.37 fund
proje t manufactur
ct ing
455,701,379 1,278,742,57
Total -- -- -- -- -- 0.00 0.00 -- -- --
.74 6.37
4.Investment of Financial Asset
（1）Securities investment
√ Applicable □ Not applicable
In RMB
Mode of Book Changes Cumulat Purchas Sale Gain/los Book
Stock Initial Account Sauce of
Security Security accounti value in fair ive fair e amount s of the value
Abbrevi investm ing the
category code ng balance value of value amount in the reportin balance
ation: ent cost items shares
measure at the the this changes in the this g period at the
25
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
ment beginni period in this period end of
ng of equity period the
the reportin
reportin g period
g period
Other
Domesti equity
2,490,3 1,566,0 3,665,4 4,056,3
c and Hangzho 390,954 95,156, Instrum Self
600926 FVM 76,886. 01,186. 24,033. 78,073.
foreign u Bank ,040.00 322.10 ent funds
96 56 52 52
stocks investm
ent
Financia
Domesti
l assets Debt
c and LUTIA 2,869,2 2,040,9 -359,18 -1,187,4 -359,18 1,681,8
000912 FVM availabl instrume
foreign NHUA 19.80 90.44 1.10 10.46 1.10 09.34
e for nt
stocks
sale
2,492,4 1,565,6 3,664,2 4,058,0
393,823 94,797,
Total -- 17,877. 42,005. 36,623. 0.00 0.00 59,882. -- --
,259.80 141.00
40 46 06 86
Disclosure Date of
Announcement on
Securities Investment
Approved by the Board of
Directors
Disclosure Date of
Announcement on
Securities Investment
Approved by the
Shareholders Meeting(If
any)
（2）Investment in Derivatives
□ Applicable√ Not applicable
The Company had no investment in derivatives in the reporting period.
5.Application of the raised capital
□ Applicable√ Not applicable
None
VI.Significant Asset and Right Offering
1.Situation of Significant Asset Sale
26
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
□ Applicable√ Not applicable
None
2.Sales of major equity
□ Applicable√ Not applicable
Ⅶ.Analysis of the Main Share Holding Companies and Share Participating Companies
√ Applicable □ Not applicable
Situation of Main Subsidiaries and the Joint-stock Company with over 10% net profit influencing to the Company
In RMB
Company Sectors Registered Operating
Name Total assets Net assets Turnover Net Profit
type engaged in capital profit
Zhejiang
Steam
Turbine 136,762,254.4 37,443,628.4 33,258,647.0
Subsidiarie Trade of
Packaged 51,000,000.00 343,702,884.35 231,015,559.55
s packaged 2 0 1
Technology
Developme
nt Co., Ltd.
Hangzhou
Zhongneng
Steam Subsidiarie Manufacturin 1,179,007,140. 301,015,641.2 1,129,030,724. 62,916,621.4 57,185,783.6
92,500,000.00
Turbine s g 37 8 58 1 1
Power Co.,
Ltd.
Hangzhou
Steam 268,639,137.5 43,378,896.1 38,954,001.5
Subsidiarie
Turbine Casting 29,500,000.00 561,680,064.00 440,567,136.33
s 3 9 3
Casting Co.,
Ltd.
Hangzhou
Steam
Turbine 182,637,107.6 90,044,088.1 73,475,561.5
Subsidiarie Manufacturin
Machinery 30,000,000.00 305,830,053.70 306,725,335.41
s g 5 8 4
&
Equipment
Co., Ltd.
Hangzhou
Steam
Turbine Subsidiarie Manufacturin 315,768,137.3 90,473,964.8 73,412,199.7
80,000,000.00 852,720,131.09 641,491,513.58
Auxiliary s g 4 8 1
Machine
Co., Ltd.
Zhejiang
Turbine
Subsidiarie Commerce &
Import & 20,000,000.00 189,875,784.12 56,552,542.64 145,237,407.89 1,576,679.67 1,760,217.56
s trade
Export Co.,
Ltd.
Hangzhou
Steam
Turbine Subsidiarie Manufacturin 1,000,000,000. 951,962,799.0
989,232,619.58 7,957,401.89 2,398,399.04 1,767,843.26
Heavy s g 00 6
Industry
Co., Ltd.
27
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Subsidiaries obtained or disposed in the reporting period
□ Applicable √ Not applicable
VIII.Special purpose vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Development prospect
(I) Development and competition of the whole industry
During the "Thirteenth Five-Year Plan" period, the world political and economic structure changed
profoundly, the global economic growth slowed down in an all-round way, and the instability and uncertainty
increased significantly. In 2020, affected by the COVID-19 epidemic, the global economic growth rate showed
negative growth again, and China's GDP growth rate dropped to 2.3%, the lowest since the reform and opening up,
but China is still the only major economy in the world that achieved positive growth. Looking forward to the next
five years, with the continuation of the COVID-19, the intensification of trade conflicts, the financial turmoil and
the escalation of geopolitical tensions, the world economic situation will become more complex and changeable,
and the downward trend will not be significantly improved in a short time.
In recent years, the global energy pattern has undergone major adjustments, with obvious trend of clean and
low-carbon energy structure. The double replacement of oil and gas by coal and non-fossil energy by fossil energy
accelerated. Sinopec's 2020 China Energy and Chemical Industry Development Report shows that the main
objectives of China's energy development plan in the "Thirteenth Five-Year Plan" have been basically achieved,
the energy transformation is moving towards the speed adjustment and upgrade period, the clean energy
transformation is effectively promoted, the energy conservation and consumption reduction and emission
reduction are stepping to a higher level, the oil and gas storage and production increase are remarkable, the coal
overcapacity cut task is completed ahead of schedule, and the installed proportion of photovoltaic wind power
units continues to rise. Looking forward to the "Fourteenth Five-Year Plan", China will become one of the
practitioners to promote the achievement of global peak carbon dioxide emissions ahead of schedule. Under the
multiple constraints of serving economic growth, ensuring energy security, and realizing low-carbon development,
China's energy transformation will move forward steadily in pluralistic balance, domestic energy demand will
continue to grow, multi-energy complementarity will be focused on for energy supply, and the phenomenon of
separate supply of all kinds of energy with low complementary level will be improved.
As far as the main segments of the company's products are concerned, during the "Thirteenth Five-Year
28
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Plan" period, the company's steam turbine products ushered in a promising market in the petrochemical sector.
The launch of Dalian Hengli and Zhejiang Petrochemical projects started the spring in the petrochemical sector. It
is expected that such market will continue in the early Fourteenth Five-Year Plan, but its duration remains to be
further observed; The field of coal chemical industry is relatively depressed. However, in the later period of the
"Thirteenth Five-Year Plan", with the recovery of oil prices and the gradual improvement of technological level,
the coal chemical industry market has shown a certain recovery. It is expected that the market during the
"Fourteenth Five-Year Plan" period may further warm up; During the "Thirteenth Five-Year Plan" period, the
industrial power generation sector achieved good development, and the company's reactionary backpressure steam
turbine products were widely used in the field of cogeneration, which complemented the overall business
performance. However, with the change of national environmental protection policy, power generation policy and
the continuous joining of competitors, the competition in the industrial power generation sector is intensifying,
and it is expected that the fierce competition will continue in the next few years. After the relevant documents of
"Blue Sky Protection Campaign" were issued, 50,000-class gas turbines were transferred from the new energy
field to the cogeneration field, which had a significant impact on the development of the industry. From the
analysis of the situation in recent two years, the market has become active again.
After years of development and fierce competition, the steam turbine industry has accelerated its market
concentration. At present, the company's main competitors are world-class turbine manufacturers represented by
SIEMENS and MAN, and several domestic large-scale steam turbine manufacturers, each of which has its own
advantages in technology, price, service and performance. Only by accelerating the transformation and upgrading
of enterprises, intensifying technological innovation and independent research and development, improving the
level of product quality and cost control, promoting the industrialization of intelligent manufacturing and
manufacturing services, making high-end products and building brand advantages can the company continue to
develop and grow in the fierce market competition.
(II) Development strategy
During the "Fourteenth Five-Year Plan" period, the company will set up a vision of "becoming a world-class
industrial drive service provider", insist on high-quality development, firmly seize the opportunity of the national
"double-cycle" strategic transformation, and strive to stimulate innovation potential and build a new pattern of
steam turbine and gas turbine industry. Meanwhile, the company will take the construction of "big service
framework" and the promotion of "big customer management" as the starting point, and complete the
transformation to manufacturing service industry in an all-round way. In order to achieve the above goals, the
29
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
company will focus on nine aspects during the "Fourteenth Five-Year Plan" period:
1. Promote strategic management and enhance development momentum
Adhere to the development concept of "strategy as the key link" and define the programmatic role of
strategy in the scientific development and high-quality development of enterprises. Promote strategic management,
define the development direction, improve strategic strength, and enhance leading ability. Through the reform of
system and mechanism, stimulate the endogenous motivation of enterprises and enhance the development
momentum.
2. Strengthen organizational management and improve governance ability
Optimize organizational structure, strengthen assessment and evaluation, and further enhance organizational
strength. Build a digital, flat and efficient management platform, improve the integration, lean and
institutionalized level of organization and management, improve the corporate governance system and enhance
the corporate governance capacity.
3. Strengthen operation management and improve operation quality
Reduce operating costs and improve operating quality through measures such as digital construction,
intelligent manufacturing promotion, supply chain management optimization, lean production deepening, and
quality system construction improvement.
4. Deepen technological innovation and enhance value creation
Adhere to the policy of "high efficiency, intelligence, integration and light weight", and continue to promote
the technological research and development, iterative upgrading and innovation capacity building of engineering
application of products. Provide strong technical guarantee and support for realizing intelligent manufacturing,
accelerating business transformation, consolidating market position and opening up market areas.
5. Strengthen the management of materials and ensure the appreciation of assets
Actively promote the integration of financial business and improve the energy efficiency of financial
management. Promote comprehensive budget management, enhance the refinement of cost management, promote
the integration of industry and finance, and realize the preservation and appreciation of assets.
6. Strengthen risk management and control to ensure business safety
Actively respond to the increase of external risks, improve the construction of enterprise risk control system,
adhere to the combination of "prevention" and "control", and improve the awareness, ability and quality of
enterprise risk prevention and control. Focus on the establishment of response measures and tracking the
30
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
effectiveness of measures, effectively prevent systemic risks, and enhance the risk control ability of enterprises.
7. Implement the talent project and improve the employment mechanism
Advocate the idea of developing enterprises with talents, implement the talent strategy, advocate the
development of enterprises with talents, focus on promoting the implementation of talent projects, strengthen the
construction of talent teams, and create an integrated talent system of "career navigation, skill training, talent
evaluation, promotion incentive and value realization".
8. Accelerate information engineering and improve management energy efficiency
Deepen the informatization and intelligent construction of enterprises, and use digital means to improve the
informatization level, accuracy and efficiency of enterprise management, improve the quality of enterprise
management, and promote the improvement of enterprise management ability and efficiency.
9. Promote cultural construction and enhance brand operation
Strengthen cultural guidance and provide strong cultural guarantee for creating first-class enterprises.
Enhance the creation and promotion of enterprise brand with culture, and carry out brand planning and operation.
(III) Business plan
2021 is the first year of the company's "Fourteenth Five-Year Plan", the first year that Hangzhou Turbine
Manufacturing Base is fully put into operation, and the first year for the company to start high-quality
development. In the new year, the company will face many challenges in deepening reform, innovation driving,
expanding market share, efficient operation of manufacturing base and ensuring market supply. In 2021, the
company put forward the annual work policy of "digital empowerment, transformation and upgrading,
strengthening enterprises by talents and high quality development".
1. Digital empowerment
With the commissioning and capacity recovery of Hangzhou Turbine Manufacturing Base as an
opportunity, improve the operation of PLM, MES and other systems. Continue to promote the construction of
WMS system, Internet of Things and other information projects, and accelerate the construction of "Hangzhou
Turbine" intelligent manufacturing system.
Start ERP construction, optimize supply chain resource management, and promote the selection and
implementation of ERP system which is suitable for Hangzhou Turbine's manufacturing mode with the guidance
of lean production and total quality management.
Further improve the quality information platform and improve the coverage and depth of product quality
31
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
data control. Pay attention to the collection and management of unit life cycle service data, and realize the
continuous improvement of product quality driven by service data.
2. Transformation and upgrading
Build an integrated model of engineering, sales and service in an all-round way, and create a "big service"
format. Explore customer service demand, integrate service resources, extend service stock market, promote
service standardization and serialization construction, and accelerate manufacturing service transformation.
Accelerate the integration of steam turbine marketing resources and deepen the linkage between driving
plate and power generation plate. Actively develop overseas business, seek external resources to achieve its own
purposes, and steadily push forward the localization strategy. Strengthen the mutual promotion of steam turbine
plate and gas turbine plate, and find a new business model for gas turbine sales. Promote the key account
management system and deepen the concept of "customer engineering integration".
Continuously improve the workshop layout of the manufacturing base, optimize the processing technology,
explore the new mode of improving the storage efficiency with the intelligent three-dimensional library as the
center, and gradually improve the production capacity and efficiency. Comprehensively promote the
implementation of the overall plan of lean production, improve the standard of lean field management, establish
the evaluation standard of lean production, and build the lean system of Hangzhou Turbine. Build the
manufacturing base into a modern intelligent factory that meets the requirements of lean production.
Establish a procurement integration process, strengthen the training of strategic suppliers, and create a
supply chain with value convergence, benefit sharing and risk sharing.
3. Strengthening enterprises by talents
Implement the strategy of strengthening enterprises by talents, formulate medium and long-term plans for
the construction of talent teams, and speed up the construction of a multi-level, multi-channel and high-quality
human resources management system.
Analyze the talent development needs, investigate the talent management experience of benchmark
enterprises, sort out the company's talent selection system, and formulate and improve the relevant policies for
talent development in the new period and carry out implementation.
Improve the incentive mechanism of salary distribution, improve the secondary salary distribution
mechanism, and promote the optimization of salary system.
4. High quality development
32
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
According to the outline of the company's "Fourteenth Five-Year Plan", formulate detailed rules for the
implementation of strategic planning, organize relevant departments to break down strategic measures, formulate
implementation plans, form implementation manuals, study and formulate strategic implementation evaluation
plans and evaluation manuals, and effectively play a strategic guiding role.
Deepen technological innovation and strengthen the supporting role of technology in the whole business
process. Accelerate the research and development of high-end drive and large-scale devices such as supercritical
carbon dioxide turbine, 1.5-2 million tons/year ethylene plant, 120,000-160,000 Nm3/h air separation plant, etc.,
explore the technical research depth, and improve the cycle efficiency of steam turbine power generation.
Strengthen risk management and control, and identify, analyze and control risk points in various fields.
Continuously improve the business contract review mode, establish and improve the market significant profit risk
assessment mechanism, and strengthen the management of project profitability. Improve the investment
management and control system, standardize investment decision-making procedures and investment processes,
and improve the enterprise investment management system.
Carry out budget management and improve the ability and level of financial management through strategic
comprehensive budget. Strengthen cost control. On the basis of comprehensive budget, strengthen the control of
manufacturing cost, project cost, procurement cost and management cost, and improve the integration of finance
and business. Strengthen the control of accounts receivable and inventory, and improve the efficiency of capital
turnover.
Improve the performance appraisal system, optimize the scheme of economic responsibility system,
strengthen the function appraisal and supervision over the implementation of system documents, and ensure the
operation of the Company. Further improve the level of corporate governance and establish good investor
relations. Through scientific management and control, system construction, improve the standard operation ability
of holding subsidiaries.
(IV) Risks analysis
1.Market Risks
In view of distinct excess production capacity of domestic turbines, the market competition will be further
intensified, and the product distribution of the Company will be further impacted.Relying on technological
innovation, the company will actively highlight the core technology advantages, expand the marketing channels,
improve the product quality, enhance the end service capabilities, continuously increase the added-value of
products and vigorously tap into the potential demands to positively respond to the market and defuse the market
risks.
33
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
2. Contract execution risk
As the market volatility becomes more intensified, there are more frequent changes in the contract during the
execution of the contract for the company, and delays and suspensions of the project schedule happen from time to
time, which will have a large impact on the internal realization process of production of the company, and
meanwhile it also increases the cost of the company’s contract performance and the contract risk. The company
will further strengthen the connection between production and sales, improve the speed and level of the company's
response to the market, and well control the contract execution risk.
3. Accounts receivable risk
With the increasing risk in the business downturns and investment projects in some customers of the
downstream industry, the company's receivables recovery has more risk, and the average age of accounts tends to
increase, which will have a large impact on the company's operating results. The company will implement the
customer credit management, strengthen the contract signing and perform the risk control, increase the assessment
of accounts receivable, and reduce the adverse impact of overdue receivables.
4. Exchange rate risk
The expansion of the company's international procurement and international sales business will cause the
company's international balance of payments to be affected by exchange rate fluctuations, and there is a certain
risk of exchange loss. With the increase in the two-way volatility of the RMB exchange rate, the uncertainty of
foreign exchange gains and losses has been increased. The company will refer to the exchange rate volatility cycle
and adopt appropriate exchange rate risk management tools to minimize exchange loss.
5. The company's profitability decline risk
As domestic raw materials and labor costs continue to rise, while the prices of industrial products continue
to fall, the profitability of products is facing a severe test. The company will strive to improve internal
management, improve project cost management ability, reduce procurement costs and operation and management
costs, improve operational efficiency, and strive to resolve the risk of declining profitability.
6. Overseas market risk
During the "Fourteenth Five-Year Plan" period, the company will vigorously implement the "go global"
strategy, further expand overseas target markets, and increase the company's share and influence in the
international market. However, at present, the overseas target market is affected by geopolitical conflicts,
unpredictable changes of internal political and economic situation and trade barrier policies in the region, thus
there is great uncertainty in the implementation of overseas market strategies. The company will increase market
research efforts, actively demonstrate countermeasures, and explore the development path of business localization.
7. Risk of capacity recovery
Hangzhou Turbine Manufacturing Base has been fully put into use, but under the new environment, new
equipment and new production organization mode, it still takes some time for the running-in of production line
and the complete recovery of production capacity. The company will comprehensively integrate production
resources, reconstruct production organization structure, change production management mode, and take the
34
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
opportunity of putting Hangzhou Turbine Manufacturing Base into use and restoring production capacity to speed
up the in-depth implementation of lean production mode, optimize production organization mode, improve
production efficiency, and restore and upgrade production capacity as soon as possible on the premise of ensuring
product quality.
X. Particulars about researches, visits and interviews received in this reporting period
1.Particulars about researches, visits and interviews received in this reporting period
□ Applicable √ Not applicable
No reception of research, communication and interview occurred in the period
35
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
V. Important Events
I. Specification of profit distribution of common shares and capitalizing of common reserves
Formulation, implementation and adjustment of profit distribution policy of common shares especially cash
dividend policy during the reporting period
1. [Dividend sharing principle]: Keep profit distribution policy continuous and stable, pay enough attention
to the ROI of investors, and give reasonable consideration to our long-term profits, overall profits of all
shareholders and sustainable development;
2. [Prioritized cash dividend]: Dividend can be allotted either in cash, stock or in combination of cash and
stock, the precondition of which is the company is in profitable state, plentiful in cash flow, and sustaining
operation and long-range development are well guaranteed;
3. [Solicit suggestions and demands of independent director and medium and small shareholders]: The board
of directors will work out a specific dividend sharing plan by giving sufficient consideration to business operation,
development stage, earning performance, cash flow and current capital requirements and taking medium and small
shareholders’ views into account. Later, the plan is submitted to the shareholders’ general meeting for deliberation
after listening to opinions of independent directors. The general meeting is supposed to take advantage of varieties
of channels to contact and exchange ideas with shareholders, especially with medium and small shareholders, give
ear to their suggestions and demands and get well prepared for answering the problems they are concerned about
4. [Dividend sharing cycle]: Dividend is distributed among shareholders based on an annual cycle as a
general rule. We will publish the dividend sharing plan within four months after accounting year and put the plan
into practice within two months after deliberation of the shareholders meeting;
5. [Ration of dividend sharing]: The profits accumulated in cash in the last three years are not less than 30%
of annual average distributable profits in the same year;
6. [Decision-making procedure of dividend sharing]: In the light of Articles of Association, the dividend
sharing plan is proposed by the board of directors, and submitted to the shareholders meeting for consideration
after being deliberated and approved by the board of directors and commented by the independent directors;
7. [Adjustment process of dividend policies]: For the profit distribution policies that need to be adjusted
according to the business operation, investment planning and long-term development, the adjusted profit
distribution policies shall not violate the relevant provisions of CSRC (China Securities Regulatory Commission)
and the stock exchange. The proposals regarding the adjustment of profit distribution policies should seek advice
from the independent directors and board of supervisors, and they shall be deliberated by the board of directors
and then submitted to the general meetings. The proposals need to receive more than 2/3 of the voting rights held
by the shareholders attending the general meetings before implementation.
Special cash dividend policy description
Whether meets the requirements of the provisions of the articles of association or
Yes
shareholders' meeting resolutions:
Whether dividends standard and proportion are clear Yes
36
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Whether decision making and supervision mechanism for profit distribution are completed Yes
Whether independent directors perform their duties responsibly and play its due role: Yes
Whether the Minority shareholders have adequate opportunity to express their views and
Yes
aspirations and Their legitimate rights and interests have been fully protected
Whether the Cash dividend policy to adjust or change the conditions and procedures are
Yes
compliant and transparent
The profit distribution preplan or proposal and the preplan or proposal of conversion of the capital reserve into
share capital in the past three years(with the reporting period inclusive):
In 2020, with the total share capital of 754,010,400 shares at the end of the year deducting 19,551,800, the
Company would distribute cash dividend to all the shareholders at the rate of CNY 2.5 for every 10 shares (with
tax inclusive) , 0 bonus shares（including tax）and no reserve would be converted into share capital.
The basis is the shares of the Company's total share capital at the end of 2019 of 754,010,400 shares deducting
the repurchased treasury stock at the record date of equity distribution, the Company would distribute cash
dividend to all the shareholders at the rate of CNY 2.0 for every 10 shares (with tax inclusive) , 0 bonus shares
（including tax）and no reserve would be converted into share capital.
The dividend plan for year 2018 was basing on the total capital share of 754,010,400, RMB 2.00 and 0 bonus
share will be distributed to each 10 shares. No capitalization of common reserves will be carried out.
Dividend distribution of the latest three years
In RMB
Ratio of the
total cash
bonus (other
ways
Net profit Ratio in net included) in
attributable to profit Amount of Proportion of net profit
Amount for the over of the attributable to cash dividends cash dividends Amount for
attributable
cash bonus parent the parent from cash offer from cash offer cash bonus
Year to common
(tax company in the company in the to repurchase to repurchase (tax
stock
included) consolidated consolidated shares of the shares of the
included)
shareholders
financial financial funds funds
statements statements of listed
company
contained in
consolidation
statement
2020 183,614,650.00 459,345,443.38 39.97% 144,078,948.09 31.37% 327,693,598.09 71.34%
2019 148,760,495.00 345,138,064.00 43.10% 0.00 0.00% 148,760,495.00 43.10%
2018 150,802,080.00 345,824,339.47 43.61% 0.00 0.00% 150,802,080.00 43.61%
In the reporting period, both the Company’s profit and the parent company’s retained earnings were positive
however not cash dividend distribution proposal has been put forward.
37
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
□ Applicable √ Not applicable
II. Profit distribution for the report period.
√ Applicable □ Not applicable
Bonus shares for every 10--share(share) 0
Dividends for every 10-share(RMB0( Tax includend) 2.5
Increments per 10 shares(Share) 0
Share capital base for the dividend distribution preplan (shares) 734,458,600
Amount of cash dividend (CNY)(including tax) 183,614,650.00
Amount of cash dividend (CNY)(including tax) 144,078,948.09
Total cash dividends (including other means)(yuan) 327,693,598.09
distributable profits (yuan) 2,978,322,472.76
Proportion of the cash dividend in the total profit available for
100%
distribution (%)
Cash dividend distribution policy
Where the distribution of profits is carried out in the company's development stage that belongs to a mature stage and there is
significant capital expenditure arrangement, the proportion of cash dividends in this profit distribution shall be at least 40%.
Details of profit distribution or reserve capitalization plan
In 2020, with the total share capital of 754,010,400 shares at the end of the year deducting 19,551,800, the Company would
distribute cash dividend to all the shareholders at the rate of CNY 2.5 for every 10 shares (with tax inclusive) , 0 bonus shares
（including tax）and no reserve would be converted into share capital. the total profit distributed this time was RMB
183,614,650.00 (including tax). The profit distribution does not involve treasury shares repurchased by the Company.
III. Commitments to fulfill the situation
1.The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the
reporting period made by the company, shareholder, actual controller, acquirer, director, supervisor,
senior management personnel and other related parities.
□ Applicable √ Not applicable
None
2.The existence of the company's assets or projects earnings forecasts and earnings reporting period is still
in the forecast period, the company has assets or projects meet the original profit forecast made and the
reasons explained
□ Applicable √ Not applicable
IV.Particulars about the non-operating occupation of funds by the controlling shareholder
□ Applicable √ Not applicable
None
V. Explanation of the Supervisory Committee and Independent Directors (If applicable)on the Qualified
38
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Auditor’s Report Issued by the CPAs.
□ Applicable √ Not applicable
VI. Explanation change of the accounting policy, accounting estimate and measurement methods as
compared with the financial reporting of last year.
√ Applicable □ Not applicable
1. The company will, since January 1, 2020, implement the "Accounting Standards for Business Enterprises
No. 14-Revenue" revised by the Ministry of Finance (hereinafter referred to as the new revenue standards). In
accordance with relevant regulations for convergence of the old and new standards, the comparable period
information is not adjusted, and the cumulative impact from new standards on the first implementation date is
retrospectively adjusted to the amount of retained earnings and other related items in the financial statements at
the beginning of the reporting period.
The main impacts of implementing the new income standards on the financial statements of the company on
January 1, 2020 are as follows:
Balance sheet
Items Adjustment impact of new
December 31,2019 January 1,2020
income standards
Account receivable 2,025,081,342.74 -545,043,494.83 1,480,037,847.91
Contract assets 545,043,494.83 545,043,494.83
Received in advance 2,818,130,397.17 -2,818,130,397.17
Contract liabilities 2,496,129,669.77 2,496,129,669.77
Other current liabilities 322,000,727.40 322,000,727.40
2. Since January 1, 2020, the company has implemented the Interpretation of Accounting Standards for
Business Enterprises No.13 promulgated by the Ministry of Finance in 2019, and this accounting policy change is
handled by the future applicable law.
VII. Explanation retrospective restatement due to correction of significant accounting errors in the
reporting period
□ Applicable √ Not applicable
None
VIII. Explanation change of the consolidation scope as compared with the financial reporting of last year.
√Applicable □ Not applicable
Reduced scope of consolidation
Equity disposal Net assets on disposal Net profit from opening
Name Equity disposal point
method date to disposal date
Hangzhou Kaineng Forging Co.,
Withdraw April 15,2020 3,223,519.61 -716.40
Ltd.
39
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
IX. Engagement/Disengagement of CPAs
CPAs currently engaged
Pan-China Certified Public Accountants (Special common
Name of the domestic CPAs
partnership)
Remuneration for domestic accounting firm（In RMB 10,000） 116
Successive years of the domestic CPAs offering auditing services 22
Names of the certified public accountants from the domestic
Sheng Weiming, Ye Xianbin
CPAs
Successive years of the domestic CPAs offering auditing
4
services
Has the CPAs been changed in the current period
□ Yes √No
Engaging of CPA for internal auditing, financial consultants or sponsors
√ Applicable □ Not applicable
Pan-China Certified Public Accountants is engaged the auditor of internal control system for the current year.
With payment of RMB 260,000 for its service.
X.Situation of Facing Listing Suspension and Listing Termination after the Disclosure of the Yearly
Report
□ Applicable √ Not applicable
XI. Receivership and bankruptcy
□ Applicable √ Not applicable
No bankruptcy or capital reorganizing issues occurred in the report period.
XII. Major lawsuits and arbitrations
□ Applicable √ Not applicable
None
XIII. Punishment and improvement
□ Applicable √ Not applicable
None
XIV.Credit Condition of the Company and its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XV. Implementation Situation of Stock Incentive Plan of the Company, Employee Stock Ownership Plan or
Other Employee Incentive Measures
40
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
□ Applicable √ Not applicable
None
XVI. Material related transactions
1. Related transactions in connection with daily operation
√ Applicable □ Not applicable
Whethe
r over
Trading limit the
Principle Ratio Market
Amount of Index of
Subjects of of pricing Price in approved approve Way of price of Date of
Related Relationsh Type of trade informati
the related the related of simila payme similar disclosu
parties ip trade RMB10,00 on
transactions transactio trade r （RMB10,00 d nt trade re
0) disclosure
ns trades available
0) limited
or not
(Y/N)
Hangzhou
Hangfa
Not
Power Purchas Mark Bank October
Affiliate of Fair and
Generatin
the Group
e of Generators
just
et 18,240.22 17,589.03 Yes applicab 2020-62
g goods price transfer 30,2020
Equipmen le
t Co., Ltd.
Hangzhou
Steam
Not
Turbine freight, Mark Bank October
Affiliate of Fair and
Automobi
the Group service repairing just
et 6,822.66 7,746.40 N o applicab 2020-62
le Sales fee price transfer 30,2020
Service s le
Co., Ltd.
Hangzhou
Steam
Not
Turbine Affiliate of Sale SteamTurbi Fair and Mark Bank October
just
et 6,127.46 8,672.57 No applicab 2020-62
Engineer the Group goods ne price transfer 30,2020
le
ing Co.,
Ltd.
Total -- -- 31,190.34 -- 34,008.00
Details of any sales return of a large amount No
Give the actual situation in the report period
where a forecast had been made for the total
Not applicable
amounts of routine related-party transactions
by type to occur in the current period(if any)
Reason for any significant difference between the transaction price
No applicable
and the market refernce price (if applicable)
41
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
2. Related transactions in terms of acquisition or disposal of assets:
□ Applicable √ Not applicable
None
3. Related transactions in term of collective external investment
□ Applicable √ Not applicable
None
4. Debts and credits with related parties
□ Applicable √ Not applicable
None
5. Other material related transactions
√ Applicable □ Not applicable
(1) The Company applied for a line of credit of RMB 300 million to Shiqiao Sub-branch, Bank of Hangzhou
Co., Ltd. in this period and till December 31, 2020, the balance of loan under the line of credit was RMB
50,000,000.00.
Inquiry on the website for disclosing the provisional report concerning significant related transactions
Description of provisional announcement Date of disclosure Disclosure website
Announcement on Application for 300 million
www.cninfo.com.cn（Announcement
Yuan Credit Loan and Related Transactions October 30,2020
No.:2020-63）
from Hangzhou Bank
XVII. Material contracts and execution
1. Entrustment, contracting, and leasing issues
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship in the report period.
(2) Contracting
□ Applicable √ Not applicable
No contracting in the report period.
(3) Leasing
□ Applicable √ Not applicable
No Leasing in the report period.
2.Guarantees
√ Applicable □ Not applicable
42
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
（1）Guarantees
In RMB10,000
Outward guarantees offered by the Company and its subsidiaries (Excluding guarantee to the subsidiaries）
Actual date
Amount of
Amount of of occurring Actual
Guarantee guarantee and Type of Complet Related
the (signing amount of Term
provided to date of guarantee ed or not guarantee
guarantee date of guarantee
disclosure
agreements
Two years
from the
Hangzhou Steam December
October date of
Turbine Power 20,800 20,800 No Yes Yes
22,2016 28,2016 expiration of
Group Co., Ltd.
the principal
debt
Total amount of outward
Total amount of outward guarantee
guarantee actually
approved in the report period 0 0
incurred in the report
（A1）
period（A2）
Total balance of actual
Total of external guarantee
20,800 external guarantee at 15,500
approved at Period-end(A3)
Period-end(A4)
Guarantee of the Company for the controlling subsidiaries
Guarante
Relevant e
Date of Complete
disclosure for
Name of the Amount happening Actual implemen
date/No. of Guarantee associate
Company of (Date o mount of Guarantee term tation
the type d
guaranteed guarantee signing guarantee or
guaranteed parties
agreement) not
amount (Yes or
no)
August
Zhejiang Steam April 24,2020
17,2020 Two years from the
Turbine Packaged The joint
date of expiration
Technology 5,000 2,572.9 liability No No
of the principal
Development Co., guaranty
debt
Ltd.
Two years from the
Hangzhou Steam The joint
May date of expiration
Turbine Casting May 27,2020 2,000 1,870 liability No No
29,2020 of the principal
Co., Ltd. guaranty
debt
Total of actual guarantee
Total of guarantee for subsidiaries
7,000 for subsidiaries in the 4,442.9
approved in the period(B1)
period (B2)
43
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Total of actual guarantee
Total of guarantee for subsidiaries
7,000 for subsidiaries at 3,442.9
approved at period-end(B3)
period-end(B4)
Guarantee of the subsidiaries for the controlling subsidiaries
Guarante
Relevant e
Date of Complete
disclosure for
Name of the Amount happening Actual implemen
date/No. of Guarantee associate
Company of (Date o mount of Guarantee term tation
the type d
guaranteed guarantee signing guarantee or
guaranteed parties
agreement) not
amount (Yes or
no)
Three years from
Hangzhou Guoneng The joint
June June 20, the date of
Steam Turbine 10,000 6,192.24 liability No No
25,2019 2019 expiration of the
Engineering Co., Ltd. guaranty
principal debt
Two years from the
Hangzhou Guoneng The joint
July July 25, date of expiration
Steam Turbine 7,000 3,702.39 liability No No
25,2019 2019 of the principal
Engineering Co., Ltd. guaranty
debt
Total amount of guarantee
Total guarantee quota to the
to the subsidiaries actually
subsidiaries approved in the 0 9,894.63
incurred in the reporting
reporting period (C1)
period (C2)
Total balance of actual
Total guarantee quota to the
guarantee to the
subsidiaries approved at the end of 17,000 7,955.52
subsidiaries at the end of
the reporting period (C3)
the reporting period (C4)
Total of Company’s guarantee（namely total of the large three aforementioned）
Total of actual guarantee
Total of guarantee in the Period
7000 in the Period 14,337.53
（A1+B1+C1）
（A2+B2+C2）
Total of actual guarantee
Total of guarantee at Period-end
44,800 at Period-end 26,898.42
（A3+B3+C3）
A4+B4+C4）
The proportion of the total amount of actually guarantee in
3.32%
the net assets of the Company(that is A4+B4+C4)
Including
Amount of guarantee for shareholders, actual controller and
15,500
its associated parties（D）
44
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
The debts guarantee amount provided for the
Guaranteed parties whose assets-liability ratio exceed 7,955.52
70% directly or indirectly（E）
Proportion of total amount of guarantee in net assets of the
0
company exceed 50%（F）
Total guarantee Amount of the abovementioned guarantees
23,455.52
（D+E+F）
Explanations on possibly bearing joint and several liquidating
None
responsibilities for undue guarantees ( If any)
Explanations on external guarantee against regulated
None
procedures(If any)
Description of the guarantee with complex method
Hangzhou Heavy Machinery Co., Ltd, which is the company's subsidiary, had made an application of special
construction funds of 208 million to China Development Fund Co.,Ltd, and it has signed the four-party China
Development Fund Investment Contract with China Development Fund ,the company and Hangzhou Steam
Turbine Group Co.,Ltd. In order to ensure the performance of the "Investment contract" by Hangzhou steam
group, the company and the Heavy Machinery Co., Ltd provide guarantee for Hangzhou Steam Group in the
forms of pledge and mortgage. The contents is detailed in the Announcement on External Guarantee of Hangzhou
Steam Turbine Co., Ltd. announced on October 22, 2016 at the website designated by the Shenzhen Stock
Exchange (http // www.cninfo.com.cn). (Announcement No. 2016-75)
（2）Illegal providing of external guarantees
□ Applicable √Not applicable
No illegal providing of external guarantees in the report period.
3.Situation of Entrusting Others for Managing Spot Asset
(1)Situation of Entrusted Finance
√ Applicable □ Not applicable
Summary of entrusted finance during the reporting period
In RMB 10,000
Type Source Amount Unexpired balance Overdue amount
Bank financing product Self funds 132,727 102,000 0
Trust financing product Self funds 2,000 0 0
Total 134,727 102,000 0
Specific Circumstance of Trust Investment which is large in single amount, low in security, poor in liquidity or
unguaranteed in high risk
√ Applicable □ Not applicable
In RMB 10,000
45
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Actua
Actua l
Summ
l recov Whet
ary of
profit ery of her or Is there
Name Type Refere matter
Capital Way of or profit Provisi not a
of of Type Date ntial Prospec s and
Date Investme Confir loss s and on for due commis
Trustee Trustee of Amo Sou of Annual tive relate
of nt ming for losses impair proce sion
s (or s (or Produc unt rce Begin ized Yield d
Expiry Orientati Reward the durin ment ss has plan in
Entrust Entrust tion ning Yield (if any) query
on s report g the (if any) been the
ees) ees) Rate Index
ing report follo future
(if
perio ing wed
any)
d perio
d
Treasury
bonds,
corporat
e bonds,
Bank inter-ban
Idle Januar
Bank financi March k
6,00 own y Floatin
of Bank al 16,202 lending, 3.00% 27.62 27.62 27.62 Yes No
0 fund 20,202 g profit
produc 0 medium-
China s 0
ts term
notes,
financin
g bonds,
etc.
Treasury
bonds,
corporat
e bonds,
Bank inter-ban
Idle Augus
Bank financi k
7,00 own July t Floatin
of Bank al lending, 2.30% 19.41 19.41 19.41 Yes No
0 fund 8,2020 21,202 g profit
produc medium-
China s 0
ts term
notes,
financin
g bonds,
etc.
Treasury
Bank bonds,
Idle Nove Dece
Bank financi corporat
7,00 own mber mber Floatin
of Bank al e bonds, 3.25% 21.12 21.12 21.12 Yes No
0 fund 23,202 28,202 g profit
produc inter-ban
China s 0 0
ts k
lending,
46
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
medium-
term
notes,
financin
g bonds,
etc.
20,0
Total -- -- -- -- -- -- 68.15 68.15 -- -- -- --
00
Situation with the appearance of principals which cannot be recovered expectedly or other existing
situations which may lead to impairment
□ Applicable √ Not applicable
(2)Situation of Entrusted Loans
□ Applicable √ Not applicable
None
4.Major contracts for daily operations
□ Applicable √ Not applicable
5. Other significant contract
□ Applicable √ Not applicable
None
XVIII. Social responsibility
1. Execution of social responsibility of targeted poverty alleviation
(1) While the company is committed to long-term development and realization of shareholder value, it pays
attention to the natural environment and resources, and undertakes corresponding responsibilities to shareholders,
employees, customers, suppliers, communities and other relevant stakeholders to realize the harmony,
coordination and unity of sustainable development between the company and society.
(2) The company has formulated the "social responsibility management standard", which defines the
company's responsibilities and standard requirements in protecting shareholders and creditors, protects the
interests of employees, ensures safety in production, environmental protection, energy conservation and emission
reduction, and social welfare undertakings, and defines the importance of social responsibility.
(3) The company has further strengthened the protection of the rights and interests of small and medium-sized
investors, strengthened the management of investor relations, and established communication channels in all
aspects. For news affecting major changes in the company's stock price, the company has actively verified the
information content to clarify the facts, and issued announcements when necessary to announce the actual
47
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
situation of the company, so as to protect the legitimate rights and interests of small and medium-sized investors.
(4) The company treats suppliers and users in good faith and always maintains good commercial credit and
excellent contract performance level. The company has established a strategic cooperation relationship with
suppliers, set up a convenient information communication platform, and continuously improved the level of
cooperation between the two parties. The company provides customers with high-quality products and
professional services, as well as personalized business solutions adapted to different environments, which are well
received by customers.
(5) The company actively promotes the professional development of employees, continuously improves the
professional environment of employees, and protects the physical and mental health of employees. The company
has a number of highly skilled talents such as national technical experts and provincial and municipal technical
competition pacesetters, and has set up a number of skilled master studios in the production line to create a golden
blue collar team in modern manufacturing. The company has further raised the level of medical expenses
subsidies for employees, and provided health insurance and cancer prevention insurance for employees.
Throughout the year, the company has continuously carried out group cultural activities, expanded the venues for
cultural and sports activities for employees, supported employees to spontaneously establish various cultural
organizations, and created a dynamic enterprise atmosphere.
(6) The company attaches great importance to environmental protection and energy conservation and emission
reduction. The company has set up special assessment indicators to strictly regulate all kinds of environmental
behaviors in the business process. It strengthens the management of hazardous wastes and strictly controls the
transfer and storage of hazardous wastes. The company's safe disposal rate of hazardous wastes has reached 100%.
During the reporting period, the company's emission tests including waste water, waste gas, noise and other items
all met the national standards. The company has formulated energy consumption control indicators for various
departments, incorporated energy consumption indicators into the annual assessment system, vigorously carried
out energy-saving publicity, regularly organized energy-saving inspections, and implemented a number of
energy-saving renovation projects. The total comprehensive energy consumption for the whole year decreased
significantly year on year.
(7) The company continues to support and carry out public welfare undertakings. The company organized
employees to take part in voluntary blood donation activities, such as "Chunfeng Activity" donation and
organizing visits to the elderly in Chun'an, which showed that the company attached importance to and supported
social welfare undertakings while pursuing business development.
2.Implementation of the social responsibility of precise poverty relief
(1) Precision poverty alleviation planning
48
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
The company participates in the “Lianxiangjiecun” helping and supporting activities in Hangzhou, from
2017 to 2021 for 5 years, with an annual funding of RMB 150,000 to assist Zitong Township in Chun’an County.
(2) Annual Precision Poverty Alleviation Summary
In 2020, the Company funded RMB 150,000/year in the support and relief activity for Zitong Town, Chun'an
County again to implement targeted poverty alleviation in the method of cash relief.
（3）Precision poverty alleviation effect
Index Measurement unit Quantity / Status
I. General situation —— ——
Thereinto： 1.Capital In RMB10,000 15
II. Itemized input —— ——
8. Social poverty alleviation —— ——
8.2 Amount invested in targeted poverty
In RMB 10,000 15
alleviation work
（4）Subsequent targeted poverty alleviation program
The company has no follow-up plan either.
3.Environmental protection
Listed company and its subsidiary belongs to the key pollution enterprise listed by Department of Environmental
Protection
□ Yes √ No
（I）Environmental protection
The company has adopted cleaner production management in an all-round way and started cleaner
production audit, which not only reduces consumption and efficiency, but also reduces the pressure and cost of
end treatment. In terms of environmental greening, it has been built into a garden-like enterprise through
investment year by year. The company's environmental management system has been operating for many years,
and has strictly abided by the provisions of relevant national laws and regulations and the principle of continuous
improvement. The company formulates annual environmental protection targets and environmental management
plans every year. During the reporting period, there was no environmental pollution accident or over-emission
incident.
The company also continues to promote the awareness of social responsibility in the process of product
design and process design, and embodies the concept of green environmental protection in the design process. The
product design process fully considers the possibility of environmental pollution and the impact on occupational
health, meets the international environmental protection requirements, reduces noise, reduces emissions, and uses
49
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
harmless materials and processes. For example, by taking measures such as sound insulation enclosure, the
running noise of steam turbine can meet the standard. Set up thermal insulation layer to reduce its thermal
radiation to a safe level. In all kinds of nonmetallic materials used in steam turbines, components harmful to
human body are eliminated.
(II) Energy conservation and emission reduction
In recent years, the company has attached great importance to energy conservation and emission reduction
according to the overall arrangement and requirements of its superiors. It has strengthened its leadership and
carefully deployed various work measures to further promote energy conservation and emission reduction at
various levels to ensure solid results in energy conservation and emission reduction.
XIX. Explanation on other significant events
√ Applicable □ Not applicable
1. The company received dividends of 95,156,322.10 yuan from Hangzhou Bank in July 2020.The complete
report is available as Announcement No.2020-43 with Securities Times, Shanghai Securities Daily, Hong Kong
Commercial Daily and at www.cninfo.com.cn dated July 16,2020.
(2) On October 28, 2020, the Company held the Eighth Session of the Eighth Board of Directors, which
reviewed and approved the Proposal on the Company's Participation in Subscribing for Convertible Bonds of
Hangzhou Bank. The complete report is available as Announcement No.2020-59 with Securities Times, Shanghai
Securities Daily, Hong Kong Commercial Daily and at www.cninfo.com.cn dated October 30,2020.
(3) In November 2019, the Company reviewed and approved the Proposal on Repurchase of Company Shares,
which is intended to be used for employee stock ownership plan or equity incentive through repurchase of
company shares. The second extraordinary general meeting of shareholders held in December 2019 adopted
relevant issues on stock repurchase. As of November 30, 2020, the repurchase of shares by the company has
been completed. The complete report is available as Announcement No.2020-71 with Securities Times, Shanghai
Securities Daily, Hong Kong Commercial Daily and at www.cninfo.com.cn dated December 2,2020.
(4) The company signed the Compensation Agreement for Relocation of Non-residential Houses on
State-owned Land with Hangzhou Xiacheng Urban Construction Investment Development Group Co., Ltd., and
the total compensation amount will be RMB 1,299,324,850.00 when the company completes the relocation on
schedule. As of the reporting period, the company has received a total of RMB 849,111,164.31 in relocation
compensation. The complete report is available as Announcement No.2021-02 with Securities Times, Shanghai
Securities Daily, Hong Kong Commercial Daily and at www.cninfo.com.cn dated January 6,2021.
(5) On November 30, 2020, the State-owned Assets Supervision and Administration Commission of
Hangzhou Municipal People's Government transferred its 10% state-owned shares of Hangzhou Steam Turbine
Power Group Co., Ltd. to Zhejiang Financial Development Co., Ltd. free of charge. Hangzhou Turbine Group
has completed the industrial and commercial change registration procedures for equity transfer. The complete
50
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
report is available as Announcement No.2020-70 with Securities Times, Shanghai Securities Daily, Hong Kong
Commercial Daily and at www.cninfo.com.cn dated December 1,2020.
(6) In December 2020, the State-owned Assets Supervision and Administration Commission of Hangzhou
Municipal People's Government transferred 90% of the state-owned shares of Hangzhou Turbine Group to
Hangzhou State-owned Capital Investment and Operation Co., Ltd. free of charge, and Hangzhou Turbine Group
completed the industrial and commercial change registration procedures for the transfer of shares. The complete
report is available as Announcement No.2020-72 and 2021-03 with Securities Times, Shanghai Securities Daily,
Hong Kong Commercial Daily and at www.cninfo.com.cn dated January 13,2021.
XX. Material issues of the subsidiaries
□ Applicable √ Not applicable
51
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
VI. Change of share capital and shareholding of Principal Shareholders
1.Changes in share capital
1.Changes in share capital
In shares
Before the change Increase/decrease（+，-） After the Change
Amount Proporti Capitaliza
on Share tion of
Bonus Subtot Proportio
allotme common Other Quantity
shares al n
nt reserve
fund
I. Unlisted shares 479,824,800 63.64% 0 0 0 0 0 479,824,800 63.64%
1. Founder's stock 479,824,800 63.64% 0 0 0 0 0 479,824,800 63.64%
Including ： State-owned
479,824,800 63.64% 0 0 0 0 0 479,824,800 63.64%
shares
II.Non-restricted shares 274,185,600 36.36% 0 0 0 0 0 274,185,600 36.36%
2. Overseas listed foreign
274,185,600 36.36% 0 0 0 0 0 274,185,600 36.36%
shares
III. Total of capital shares 754,010,400 100.00% 0 0 0 0 0 754,010,400 100.00%
Causes of Change of shares
□ Applicable √ Not applicable
Approval of change of the shares
□ Applicable √ Not applicable
Ownership transfer of share changes
□ Applicable √ Not applicable
Progress on any share repurchase:
√ Applicable □ Not applicable
The company held the second 2019 extraordinary general meeting of shareholders on December 10, 2019,
and reviewed and passed the "Proposal on Repurchase of Company Shares". On February 18, 2020, the company
implemented share repurchase for the first time.
By November 30, 2020, the Company had completed repurchase, and actually repurchased 19,551,800 shares
of the Company, accounting for 2.59% of the Company's total share capital. The highest repurchase price was
HK$ 9.17 per share, the lowest repurchase price was HK$ 7.22 per share, and the total transaction amount was
HK$ 160,734,718.28.
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to
52
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
common shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose for the company or need to disclosed under requirement from security
regulators
□ Applicable √ Not applicable
2. Change of shares with limited sales condition
□ Applicable √ Not applicable
II. Securities issue and listing
1.Explanation of the Situation of the Security Issue(No Preferred Shares) in the Report Period
□ Applicable √ Not applicable
2.Change of asset and liability structure caused by change of total capital shares and structure
□ Applicable √ Not applicable
3.About the existing employees’ shares
□ Applicable √ Not applicable
III. Particulars about the shareholders and substantial controller
1. Amount of shareholders and their shareholding position
In shares
Total shareholders at the end The total number of pr
Total number of common Total preferred shareholders at
of the month from the date eferred shareholders v
shareholders at the end of 11883 11421 0 the end of the month from the date 0
of disclosing the annual oting rights restored at
the reporting period of disclosing the annual report
report period-end
Particulars about shares held above 5% by shareholders or top ten shareholders
Number or
share
Proporti pledged/fr
Number of Changes in Amount of Amount of
Shareholders Nature of on of ozen
shares held at reporting restricted un-restricted
shareholder shares State
period -end period shares held shares held
held（%） of Amo
shar unt
e
State-owned
Hangzhou Steam Turbine Power Group Co., Ltd. 63.64% 479,824,800 0 479,824,800 0
legal person
53
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
VANGUARD TOTAL INTERNATIONAL STOCK Foreign
1.96% 5,365,877 -188,559 0 5,365,877
INDEX FUND legal person
Domestic
Zhou Jie Natural 1.58% 4,341,100 2,400 0 4,341,100
person
State-owned
China Merchants Secutities(HK)Co., Ltd. 1.50% 4,117,303 281,026 0 4,117,303
legal person
VANGUARD EMERGING MARKETS STOCK Foreign
1.45% 3,962,204 -760,600 0 3,962,204
INDEX FUND legal person
ISHARES CORE MSCI EMERGING MARKETS Foreign
1.18% 3,231,301 -431,776 0 3,231,301
ETF legal person
GUOTAI JUNAN SECURITIES(HONGKONG) Foreign
0.98% 2,679,711 -2,267,961 0 2,679,711
LIMITED legal person
Foreign
NORGES BANK 0.92% 2,514,529 0 0 2,514,529
legal person
Domestic
Xia Zulin Natural 0.85% 2,320,000 19,000 0 2,320,000
person
Domestic
Gu Yang Natural 0.55% 1,504,552 76,100 0 1,504,552
person
Particulars about strategic investors or general corporations
Not applicable
becoming among the top 10 shareholders due to share placing
(1) Hangzhou Steam Turbine Power Group Co., Ltd. is the holder of
state-shares of the Company, all other shareholders’ are holders of domestic
listed foreign shares (B shares)
(2) There is no relationship between Hangzhou Steam Turbine Power Group
Explanation on associated relationship among the aforesaid Co., Ltd. and other shareholders;
shareholders (3) Hangzhou Steam Turbine Power Group Co., Ltd. is not an
“action-in-concert” party with any of other shareholders as described by the
“Administration Rules of Informational Disclosure about Change of
Shareholding Statues of PLCs”.
Above shareholders involved in entrusting/being entrusted and
Not applicable
giving up voting rights
Top 10 holders of shares without trading limited conditions
Amount of unconditional shares Category of shares
Name of the shareholder
held at end of period Category Amount
VANGUARD TOTAL INTERNATIONAL STOCK INDEX Foreign shares placed
5,365,877 5,365,877
FUND in domestic exchange
Foreign shares placed
Zhou Jie 4,341,100 4,341,100
in domestic exchange
Foreign shares placed
China Merchants Secutities(HK)Co., Ltd. 4,117,303 4,117,303
in domestic exchange
VANGUARD EMERGING MARKETS STOCK INDEX Foreign shares placed
3,962,204 3,962,204
FUND in domestic exchange
54
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Foreign shares placed
ISHARES CORE MSCI EMERGING MARKETS ETF 3,231,301 3,231,301
in domestic exchange
Foreign shares placed
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 2,679,711 2,679,711
in domestic exchange
Foreign shares placed
NORGES BANK 2,514,529 2,514,529
in domestic exchange
Foreign shares placed
Xia Zulin 2,320,000 2,320,000
in domestic exchange
Foreign shares placed
Gu Yang 1,504,552 1,504,552
in domestic exchange
Foreign shares placed
Wang Yihu 1,464,166 1,464,166
in domestic exchange
1）It is unknown to the Company if there is any relationship among the top 10
Explanation on associated relationship or consistent action
common share holders without restriction;
among the top 10 shareholders of non-restricted negotiable
(2) Hangzhou Steam Turbine Group Co., Ltd. is not an action-in-concert” party
shares and that between the top 10 shareholders of
with any of other shareholders as described by the “Administration Rules of
non-restricted negotiable shares and top 10 shareholders
Informational Disclosure about Change of Shareholding Statues of PLCs”.
Notes to the shareholders involved in financing securities (if
None
any)(See Notes 4)
Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a
buy-back agreement dealing in reporting period.
□ Yes √ No
2.Controlling shareholder
Nature of Controlling Shareholders: Local state holding
Type of Controlling Shareholders: Legal person
Name of the Legal Incorporated Organization
Registered capital
holding shareholder representative in code
Manufacturing and processing: textile machinery, Manufacturing
machines,paper-making machinery, pump, casting products, electrical tools,
gear box, thermal transmitter, digital controlling device, and spare parts of
the above (limited to the subsidiaries); Contracting of domestic and
Hangzhou Steam 9133010014307 overseas machinery engineering projects, export of above equipments and
Dec 14,
Turbine Power Zheng Bin
1992 1842L
Group Co., Ltd. materials, provide labor services for above overseas projects. Thermal
power plant project and equipment engineering; wholesale and retail:
products and spare parts manufactured by members of the group, and
technical research, consulting, and service of above products; Provide
materials, equipments, and spare parts to members of the Group, water and
55
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
power supply (other than installation and maintaining of power supply
equipment); Including the business scope of subsidiaries.
Shareholding status
of the holding
shareholder in other
None
PLCs in the country
and abroad during
the report period
Change of holding shareholder
□ Applicable √ Not applicable
No change of holding shareholder in the report period.
3．Information about the controlling shareholder of the Company
Actual controller nature：Local state owned Assets Management
Actual controller type：Legal person
Name of the substantial Legal Organization
Date of incorporation Principal business activities
controller representative code
State-owned Assets
Supervision and
113301007766 Not applicable
Administration Wang Xi
375272
Commission of Hangzhou
Municipal Government
The equity of the
controlling shareholder in
Hangzhou Jiebai (SH.600814) held 68.26% shares， Digital Source Technology Co., Ltd.（SZ.000909）held 45.33% shares
other domestic and
foreign listed companies and Hangyang Co., Ltd.(SZ.002430)held 54.45% shares.
held or partly held by it in
the report period
Change of the actual controller in the reporting period
□ Applicable √ Not applicable
None
Block Diagram of the ownership and control relations between the company and the actual controller
56
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
The actual controller controls the company by means of trust or managing the assets in other way
□ Applicable √ Not applicable
4.Other corporate shareholder holding over 10% of the Company’s shares
□ Applicable √ Not applicable
5.Situation of Share Limitation Reduction of Controlling Shareholders, Actual Controllers, Restructuring
Party and Other Commitment Subjects
□ Applicable √ Not applicable
VII. Situation of the Preferred Shares
□ Applicable √ Not applicable
No preference shares in the Company.
57
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
VIII Information about convertible corporate bonds
□ Applicable √ Not applicable
During the reporting period, the company did not have convertible corporate bonds.
58
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
IX. Information about Directors, Supervisors and Senior Executives
I. Change in shares held by directors, supervisors and senior executives
Amou
nt of Amount
shares of shares Other
Shares Shares
increas decrease change
held at held at
Office ed at d at the s
Name Positions Sex Age Starting date of tenure Expiry date of tenure the the
status the reportin increas
year-beg year-geg
reporti g e/decr
in(share) in(share)
ng period(s ease
period hare)
(share)
Zheng Bin Chairman In office Male 56 May 18,2016 December 9,2022 0 0 0 0 0
Yang
Vice Chairman In office Male 56 June 24,2013 December 9,2022 0 0 0 0 0
Yongming
Ye Zhong Director, GM In office Male 52 June 19,2004 December 9,2022 0 0 0 0 0
Wang
Director In office Male 48 June 30,2017 December 9,2022 0 0 0 0 0
Gang
Director, Deputy
Kong General
In office Male 50 June 24,2013 December 9,2022 0 0 0 0 0
Jianqiang Manager,Chief
engineer
Director , Deputy
Femal
Li Guiwen Ge secretary of the In office 50 January 9,2019 December 9,2022 0 0 0 0 0
e
board
Gu Independent
In office Male 64 May 18,2016 December 9,2022 0 0 0 0 0
Xinjian Director
ZhangXia Independent Femal
In office 48 December 4,2015 December 9,2022 0 0 0 0 0
oyan Director e
Chen Independent Femal
In office 56 May 18,2016 December 9,2022 0 0 0 0 0
Danhong Director e
Zhang Independent
In office Male 62 December 10,2019 December 9,2022 0 0 0 0 0
Hejie Director
Chairman of the
Li Shijie Supervisory In office Male 51 June 24,2013 December 9,2022 0 0 0 0 0
Committee
Wang
Supervisor In office Male 53 June 24,2013 December 9,2022 100,676 0 0 0 100,676
Xiaohui
Ying
Supervisor In office Male 55 December 10,2019 December 9,2022 43,403 0 0 0 43,403
Gonghua
59
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Employee
Lu Jianhua Supervisor In office Male 59 August 15,2004 December 9,2022 0 0 0 0 0
Employee
Fang Yin In office Male 59 February 16,2012 December 9,2022 0 0 0 0 0
Supervisor
Deputy General
Zhao
Manger, Chief In office Male 45 January 1,2018 December 9,2022 0 0 0 0 0
Jiamao
accounantant
Li Deputy General
In office Male 57 December 5,2014 December 9,2022 0 0 0 0 0
Jiansheng Manger
Wang Deputy General
In office Male 50 June 9,2017 December 9,2022 0 0 0 0 0
Zhengrong Manger
Total -- -- -- -- -- -- 144,079 0 0 0 144,079
II. Change in shares held by directors, supervisors and senior executives
√ Applicable □ Not applicable
Name Positions Types Date Reason
Deputy General
Li Guiwen Employment February 5,2021 Due to the development needs of the company
Manager
III.Posts holding
The professional background, working experience and main responsibilities of the current board members,
supervisors and senior managers in the company
（1）Director
Mr. Zheng Bin, born in November 1964, CCP member, university graduate, senior economics professional
certification. He served as vice chairman and Vice General Manager of Hangzhou Steam Turbine Power Group
Co., Ltd. He used to be chairman and General Manager of Hangzhou Dongfeng Shipyard Co., Ltd. He was
engaged the vice Chairman at the 4th term of Board on March 2009 ,Vice Chairman at the 5th term of Board on
June 2010, He was engaged the Director and General Manager of the Company on June 2013, He was engaged
the Chairman at the 6th term of Board on December 2014. He was elected as Chairman of the 7th term of board of
directors on May 18, 2016. Currently is the 8th chairman of the company.
Mr. Yang Yongming, born in November 1964, CCP member, university graduate, certified senior economist.
Currently he’s the vice general manager of Hangzhou Steam Turbine Power Group Co., Ltd. He used to be the
vice director and director of Sales Administration Departments of the Company; Since 2013, he served as vice
general manager, general manager, and vice chairman of Hangzhou Dongfeng Shipyard Ltd. Currently he’s the
vice general manager of Hangzhou Steam Turbine Power Group Co., Ltd . and the Vice Chairman of the 6th term
60
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
of Board of the Company. He was elected as Vice Chairman of the 7th term of board of directors on May 18, 2016.
Currently is the 8th vice chairman of the company.
Mr. Ye Zhong: born in April 1968, CCP member; bachelor degree; professor and senior engineer. Started working
in July 1990. he was the director of the 2nd term of Board, Chief Engineer; director of the 3rd term of Board, Vice
General Manager; Director of the 4th and 5th terms of Board, Vice General Manager, and Chief Engineer. He’s the
Standing Vice General Manager, director and Chief Engineer of the 6th term of Board of the Company, and
General Manager of the 4 Company since December 2014. He was elected as director and General Manager of the
7th term of board of directors on May 18, 2016. Currently is the 8th Director and General Manager of the
company.
Mr. Wang Gang, born in February 1972, member of the Communist Party of China, postgraduate degree, Zhejiang
University MBA, senior engineer. In 1993 the company entered the company, served as the company organization
personnel, a steam shop, security, securities laws and regulations, operation and management department and
other department heads. The current party secretary of the party committee, discipline appoint secretary, trade
union chairman. He was engaged the secretary of the board of the Company on June 10,2017. He was elected as
director of the 7th term of board of directors on June 30, 2017. Currently is the 8th Director of the company.
Mr. Kong Jianqiang, born in May 1970, CCP member, Master of Engineering, certified senior engineer. Started
working in July 1992. He used to be technician, head of workshop, vice director, and director of Steam Turbine
Institute of the company. He’s the director of the 6th term of Board since June 2013, and Engineer General of the
Company since December 2014. He was elected as director of the 7th term of board of directors on May 18, 2016.
Appointed as deputy general manager and Chief engineer of the company. Currently is the 8th Director , Deputy
General Manager and Chief engineer of the company.
Ms. Li Guiwen, born in September 1970, member of the Communist Party of China, postgraduate degree, senior
engineer. In 1992 the company entered the company, She served as Deputy director General office and Deputy
Minister of Economic Management of Hangzhou Steam turbine Power Group, Since August 2007, She Served as
Minister of Strategic Development of Hangzhou Steam turbine Power Group, Since November 2017,She served
as Secretary of the Board of Directors of Hangzhou Steam turbine Power Group. Since January 2019, She served
as director of the 7th term of board of directors of the Company. Currently is the 8th secretary and Deputy General
Manager of the board of the company.
Ms Zhang Xiaoyan, was born in March 1973. Since 1994, she successively worked in Zhejiang Securities Co., Ltd,
61
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Zhejiang Senhe Seed Co., Ltd, Shanghai AllBright Law Offices (Hangzhou), Beijing Gaopeng & Partners
Hangzhou Office, Beijing Kangda Law Firm (Hangzhou). She currently holds the post of the partner of Beijing
Kangda (Hangzhou) Law Firm. Since December 2015,She served as independent director of the 6th term of Board.
She was elected as Independent director of the 7th term of board of directors on May 18, 2016. Currently is the
8th Independent director of the company.
Ms Chen Danhong, born in October 1964, was graduated from Hangzhou Business College, majoring statistics.
She was former assistant in Shanghai Economic Management College, section chief in accounting section of
financial department from Zhejiang Gongshang University, General Manager in Planning and Finance Department
and HR Manager of New China Life Insurance Co., Ltd.Zhejiang Branch, Executive Vice President of Zhejiang
Zhongye Holdings Group Co., Ltd., CEO of Daodao Group Co., Ltd., and Deputy General Manager and Chief
Financial Officer of Zhejiang Arch of Triumph Macao Doulao Holding Group Co., Ltd. She was special
professional ethos supervisor in Zhejiang Provincial Office,SAT, CPPCC member in West Lake District, and
Special Auditor of Audit Bureau in West Lake District.She served as Independent director of Hangzhou Cable Co.,
Ltd., On May 18, 2016, she was elected as the seventh Board of Directors Independent Director of the company.
Currently is the 8th Independent director of the company.
Mr Gu Xinjian, born in July 1956, was doctor of engineering, as a professor in Modern Manufacturing
Technology Research Institute of Zhejiang University, and a doctoral supervisor. He was the Deputy Director in
Center for Innovation Management and Sustainable Competitiveness of Zhejiang University, and Director of
Patents And Standards Strategic Institute. He served as vice Chairman of the professional Committee of intelligent
Manufacturing of the Chiness Society of Artificial Intelligence and the Professional Committee of Group and
intelligent Integration technology of the Chinese society of Mechanical Engineering, Member of the National
Technical Committee for Automation Systems and Integration Standardization and Chairman of the Technical
Committee for Industrial Data Sub-Committee.From August, 1987 until now, he devoted himself to research and
education work in Mechanical Engineering Department of Zhejiang University, primarily engaged in researching
manufacturing informatization, enterprise modeling, networked manufacturing, advanced manufacturing systems
mode, and mechanical manufacturing systems engineering. On May 18, 2016, he was elected as the seventh Board
of Directors Independent Director of the company. Currently is the 8th Independent director of the company.
Mr. Zhang Hejie, born in January 1958, holds a master's degree in philosophy, a doctorate in management, a
visiting scholar at the University of Cambridge, and a professor and doctoral tutor at the School of Economics and
62
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Management of Zhejiang University of Technology. Since July 2002, he has been teaching at the School of
Economics and Trade and the School of Economics of Zhejiang University of Technology; he is the expert
advisory committee member of the Zhejiang Provincial People's Government on Taiwan Issue; the member of the
technical working group of the Pilot Province of Zhejiang of Green National Economic Accounting; and the
communication review expert of “Final results of the National Social Science Fund Project”, and he is the
Association Director and Deputy Secretary General of Zhejiang Recycling Resources Association, Director of
Financial Innovation and Sustainable Development Research Center of Zhejiang University of Technology,
Executive Director of Zhejiang Financial Engineering Association, and the Communication Review Expert of the
National Natural Science Foundation. Currently is the 8th Independent director of the company.
(II) The Supervisors
Mr. Li Shijie, born in July 1969, CCP member, university graduate, certified senior engineer. vice secretary of
CCP committee and Chairman of the trade union,head of supplying department of the Company, general manager
and chief secretary of CCP committee of Hangzhou Steam Turbine Auxiliary Machinery Co., Ltd. Currently he’s
the vice chief secretary of CCP committee and chief secretary of discipline committee of Hangzhou Steam
Turbine Power Group Co., Ltd. Currently he’s the Chairman of the 6th term of Supervisory Committee. He was
elected as Chairman of the 7th term of Supervisory Committee on May 18, 2016. Currently is the 8th Chairman of
supervisory Committee of the company.
Mr. Wang Xiaohui, born in December 1967, CCP member, university degree, certified senior accountant, certified
taxation accountant, certified internal auditor. External Chief Finance Officer of Hangzhou State-owned Property;
Chief Accountant and Director of Accounting Dept. of Hangzhou Dongfeng Shipyard Co., Ltd. Currently he’s the
vice director of Accounting Dept. of Hangzhou Steam Turbine Power Group Co., Ltd. Currently he’s the
supervisor of the 6th term of Supervisory Committee. She was elected as supervisor of the 7th term of
Supervisory Committee on May 18, 2016. Currently is the 8th Supervisor of the company.
Mr. Ying Gonghua, born in August 1965, member of the Communist Party of China, holding university degree, is
master of engineering and senior engineer. He is currently the deputy minister of the Company's manufacturing
department, secretary and director of the rotor workshop branch. In July 1988, he joined the Company and started
the career, successively served as the technician of the Company's blade workshop, the technical leader, the
secretary of the blade branch, and the director of the branch factory. In June 2014, he served as secretary and
director of the Company's second automobile branch; since September 2016, he has served as the Company’s
63
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Deputy Minister of Manufacturing, Secretary and Director of the Rotor Workshop Branch. Currently is the 8th
Supervisor of the company.
Mr. Lu Jianhua, born in March 1962, CCP member, university graduate. Once he was the clerk and office manager
of the Trade Union, elected vice chairman of the Trade Union and supervisor; He assumed employees’ supervisor
for the 3rd, 4th, 5th ,6th and 7th term of the Supervisory Committee. Currently is the 8th Supervisor of the
company.
Mr. Fang Yin, born in December 1962, CCP member, senior engineer, master degree. Graduated from Zhejiang
University of Industry in February 1982, and started working in technical area in Hangzhou Steam Turbine Co.,
Ltd. (former Hangzhou Steam Turbine Factory); Since September 1988, he has been working on R&D in the
Industrial Turbine Research Institute of the Company; Mr. Fang was elected Employee supervisor of the 6th term
and 7th term of Supervisory Committee. Currently is the 8th Supervisor of the company.
(III) Senior Executives
Profiles of General Manager Ye Zhong, Deputy General manager Kong Jianqiang and Deputy General Manager
Li Guiwen are available among the directors above.
Mr. Li Jiansheng,born January 1963, CCP member, master of engineering, certified senior engineer of
professor level.Mr. Li started working for the Company in February 1982. He has been in the positions of chief of
No.4 section, vice head of the Institution, and vice head of the Industrial Turbine Institute. He has been the
assistant of Deputy general manager and head of production unit of Hangzhou Steam Turbine Co., Ltd. Mr. Li was
engaged the Deputy general manager of the Company since December 2014.
Mr. Wang Zhengrong, born in October 1970, member of the Communist Party of China, university degree,
Bachelor of Engineering, Zhejiang University, senior engineer. In 1992 to enter the company work, served as
deputy director of the company sales, director, marketing party branch secretary. Since March 2010, he has been a
member of the Party Committee of the Company. He has been Assistant General Manager of the Company and
Director of Steam Turbine Marketing since June 2015. Mr. Wang was engaged the Deputy general manager of the
Company since June 2017.
Mr. Zhao Jiamao, born in March 1975, member of the Communist Party of China, university degree, certified
public accountant and senior accountant. He joined Hangzhou Steam Turbine Power Group Co., Ltd. Finance
Office in 1995 and was once the Vice Minister of Finance of Hangzhou Steam Turbine Power Group Co., Ltd.,
Chief Accountant, Deputy General Manager and General Manager of Hangzhou Steam Turbine Power
64
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Technology Co., Ltd. In December 2014, he was the Deputy Chief Accountant and Chief Financial Officer of the
Company. Since March 2016, he has been the General Manager Assistant, the Director of Asset Management
Department and the Finance Department and the Contract Department. Mr. Zhao was engaged the Deputy general
manager and Chief accounting of the Company since January 2018.
Jobs taken in shareholding parties
√ Applicable □ Not applicable
Take
remunerations
Names Name of the shareholder Job taken Job started Job ended from the
shareholding
party
Hangzhou Steam Turbine Power Chief secretary of CCP,
Zheng Bin September 28,2017 Yes
Group Co., Ltd.
Chairman
Yang Hangzhou Steam Turbine Power Commissioner of CCP,
May 1,2013 Yes
Yongming Group Co., Ltd. Deputy General Manger
Hangzhou Steam Turbine Power Commissioner of CCP ，
Ye Zhong Group Co., Ltd. May 1,2001 No
Director
Vice Secretary of CCP
Commission,Chairman of
Hangzhou Steam Turbine Power
Li Shijie Trade Union，Vice May 1,2013 Yes
Group Co., Ltd.
Chairman of Supervisory
Committee
Wang Hangzhou Steam Turbine Power Director of financial
September 22,2014 Yes
Group Co., Ltd. department
Xiaohui
Jobs taken in other parties
√ Applicable □ Not applicable
Take
Names Name of the parties Positions Job started Job ended remunerations
from the party
Yang Hangzhou Steam Turbine Auto Sales
Chairman June 29,2017 No
Yongming service Co., Ltd.
Yang
Guangdong Huaxing Bank Co., Ltd. Director September 28,2017 No
Yongming
Hangzhou Zhongneng Steam
Ye Zhong Chairman February 1,2010 No
Turbine Power Co., Ltd.
Hangzhou Steam Turbine
Ye Zhong Chairman December 23,2014 No
Engineering Co., Ltd.
65
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Hangzhou Steam Turbine Heavy Deputy General
Ye Zhong October 30,2017 No
Manger
Industry Co., Ltd.
Wang Hangzhou Zhongneng Steam
Supervisor June 21,2017 No
Gang Turbine Power Co., Ltd.
Wang Hangzhou Steam Turbine Casting
Director June 21,2017 No
Gang Co.,ltd.
China mechanical and Electrical
Kong
Institute -HSTG (Hangzhou) United Director December 8,2020 No
Jianqiang
Institutes Co., Ltd.
Kong Zhejiang Steam Turbine Packaged
Chairman June 21,2017 No
Jianqiang Technology Development Co., Ltd.
Zhejiang Packaged Technology
Li Guiwen Chairman April 1,2020 No
Development Co., Ltd.
Chen
Hangzhou Cable Co., ltd. Independent director April 19,2017 Yes
Danhong
Zhejiang University. Institute of Professor, Supervisor
Gu Xinjian December 1,1999 Yes
modern manufacturing engineering of a ph.D Student
Zhang Beijing Kangda（Hangzhou）Law
Partner May 1,2012 Yes
Xiaoyan Firm
Wang Hangzhou Xiangjiang Technology
Supervisor June 29,2017 No
Xiaohui Co.,Ltd.
Wang Hangzhou Steam Turbine
Director June 29,2017 No
Xiaohui Engineering Co., Ltd.
Li Hangzhou Steam Turbine Auxiliary
Director April 3,2014 No
Jianshang Machine Co., Ltd.
Li Hangzhou Steam Turbine Casting
Chairman April 1,2020 No
Jiansheng Co., Ltd.
Li Hangzhou Steam Turbine Heavy
Executive director June 21,2017 No
Jiansheng Industry Co., Ltd.
Wang Hangzhou Steam Turbine Machinery
Chairman June 21,2017 No
Zhengrong & Equipment Co., Ltd.
Wang Hangzhou Zhongneng Steam
Director July 1,2013 No
Zhengrong Turbine Power Co., Ltd.
Zhao Zhejiang Turbine Import & Export
Executive director June 2,2020 No
Jiamao Co., Ltd.
66
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Zhao Hangzhou Zhongneng Steam
Director March 12,2018 No
Jiamao Turbine Power Co., Ltd.
Punishments to the current and leaving board directors, supervisors and senior managers during the report period
by securities regulators in the recent three years
□ Applicable √ Not applicable
IV. Remuneration to directors, supervisors and senior executives in the reporting period
Decision-making procedures, basis for determination and actual payment of the remuneration to directors ,
supervisors and senior executives
The remuneration plan for directors and executives was examined at the meeting. The Remuneration and
Assessment Committee of the Board conducted assessment on the performances of the directors and executives,
Assessment principles and procedures determined in accordance with the executive compensation management
system of directors(revised in 2019), The plan is subject to examination of the meeting of the Board.
Allowances for independent directors and supervisors are subject to approval by the Board and the Shareholders’
Meeting thereafter. The proposal of allowances for the 8th term of independent directors and supervisors was
adopted at the 2nd Provisional Shareholders’ Meeting held on December 10, 2019, and the allowance for
independent directors is RMB150,000 (tax included) per year, while it is RMB36,000 for supervisors for the
period of three years (tax included). Non employee supervisors do not enjoy the allowance
Remuneration of directors, supervisors, and executives in the report period
In RMB10,000
Total of reward from Actual reward in
Statue of
Name Position Sex Age the total at end of report
duty
Company(Pre-tax) term
Zheng Bin Chairman Male 56 In Office Yes
Yang Yongming Vice Chairman Male 56 In Office Yes
Ye Zhong Director, GM Male 52 In Office 74.4 No
Wang Gang Director Male 48 In Office 79.6 No
Director, Deputy GM, Chief
Kong Jianqiang Male 50 In Office 79.6 No
engineer
Li Guiwen Director, secretary of the board Female 50 In Office 57.6 No
Gu Xinjian Independent Director Male 64 In Office 17.5 No
Chen Danhong Independent Director Female 56 In Office 17.5 No
Zhang Xiaoyan Independent Director Female 48 In Office 17.5 No
Zhang Hejie Independent Director Male 62 In Office 15.0 No
Chairman of the Supervisory
Li Shijie Male 51 In Office Yes
Committee
Wang Xiaohui Supervisor Male 53 In Office Yes
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Ying Gonghua Supervisor Male 55 In Office 58.3 No
Lu Jianhua Employee Supervisor Male 59 In Office 36.6 No
Fang Yin Employee Supervisor Male 59 In Office 39.3 No
Li Jiansheng Deputy GM Male 57 In Office 79.7 No
Wang Zhengrong Deputy GM, Male 50 In Office 79.6 No
Deputy General Manger, Chief
Zhao Jiamao Male 45 In Office 79.6 No
accountant
Total 731.8
Incentive equity to directors, supervisors or/and senior executives in the reporting period
□ Applicable √ Not applicable
V. Particulars about employees.
1.Number of staff, professional structure and educational background
Number of in-service staff of the parent company(person) 1,984
Number of in-service staff of the main subsidiaries(person) 1,364
The total number of the in-service staff(person) 3,348
The total number of staff receiving remuneration in the current
3,348
period(person)
Retired staff with charges paid by the parent company and main
0
subsidiaries (person)
Professional
Category Number of persons（person）
Production 1,694
Sales 295
Tech 921
Finance 70
Administration 368
Total 3,348
Education
Category Number of persons（person）
Master’s Degree 227
Bachelor 1,284
College diploma 699
High school and below 1,138
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Total 3,348
2.Particulars about the employees:
Under the premise of considering the annual benefit, with the level of competition, the ability to pay of
enterprises, price levels and other factors, in 2020 the company adequate remuneration be adjusted according to
the value of the unpaid position, according to the performance of the performance fee, adhere to labor distribution,
taking into account efficiency and equity, the maximum level of protection of the interests of employees, to
achieve a win-win business and employees. Company on a monthly basis, full and timely payment of wages,
overtime pay in accordance with national regulations, on a monthly basis.
3. Educational training for employees:
In 2020, the staff education and training work strived for realize the goal of “Talents invigorate enterprises”,
and set the work objectives of training and optimizing the “the three teams namely the management team, the
professional and technical personnel team and the high-skilled personnel team”, and upon combining with the
company’s strategic goals and the departmental performance targets and the employees’ development goals, it
well did the annual training work, formulated the “2020 Company Education and training Plan”, implemented
various training programs in an orderly manner as required, continuously improved the staff's business level and
comprehensive capabilities and made contributions to the company’s stable operation. In terms of the funding, the
company drew 2.5% of the total salary as the staff education fund, which effectively guaranteed the expenditure of
the training program. According to statistics, 105 training classes were held in 2020, the person-time of staff
received trainings reached 4651. For 2020, the company plans to carry out 106 training programs in aspects of
management, engineering technology, operation skills, quality, environment and safety education.
4. Outsourcing situation
□ Applicable √ Not applicable
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
IX. Administrative structure
I. General situation
(1) Standardized operation of corporate governance structure
In accordance with the "company law" provisions, The Company has its executive, decision making and
supervisory bodies operated strictly according to the Articles of Association, Shareholders’ Meeting Criteria,
Board Meeting Criteria, and Supervisory Committee Criteria. Meetings were held by legal procedures, Corporate
governance in accordance with the relevant provisions of the laws and regulations of China Securities Regulatory
Commission and the Shenzhen Stock Exchange.During the reporting period, the company organized 7 meetings of
the board of directors, 4 meetings of the board of supervisors, 2 meetings of shareholders,3 meetings of special
committees of the board of directors and annual reports. In strict accordance with the Articles of Association of
the Company and relevant laws and regulations, the Company deliberates and makes decisions on major business
matters. The Company insists on integrating the Party building work into the economic work. When making
administrative decisions, the opinions of the Party Committee meeting shall be heard in advance, and the powers
and responsibilities of the Party committee meeting, the general manager's office meeting, the board of directors,
the board of supervisors and the shareholders' meeting shall be clarified. During the reporting period, the company
reviewed the company's regular reports, internal control self-assessment reports, appointment of accounting firms,
foreign investment, external guarantees, related party transactions, bank credit loans, entrusted financial
management, impairment and write-off of assets, change of board of directors and board of supervisors and other
important business and governance activities according to regulations, performed the approval procedures on
important matters, supervised the company's business activities and ensured the company's compliant operation.
2. Effectiveness of organization
The Board of Directors is the executive body of the decisions made by the Shareholders’ Meeting. The Board is
also responsible to establish and improve the internal control system of the Company, and make it works
effectively. Chairman of the Board is the caller of the Board. Strategy, Investment, Remuneration, and Auditing
Committees were established within the Board, and were supporting the decision-making of the Board. The
Supervisory Committee is responsible to report to the Shareholders’ Meeting and supervise the legal performance
of duties of directors, managers, and executives. The management is responsible to the Board, and take charge of
daily operation of the Company. Functional departments were deployed according to the needs of business with
clear responsibilities.
3. Basis for material decisions
The Company has setup practical rules for all material aspects of management, including but not limited to,
external investment, trusteeship, related transactions, information disclosure, investors’ relationship, information
insider, executive shares, and management of controlled subsidiaries. These documents of rules were constantly
revised and improved to maintain effectiveness upon changing situation. In the report period, According to the
Company Law of the People's Republic of China, China Securities Regulatory Commission, Shenzhen Stock
Exchange and other relevant regulations, the Company revised the Articles of Association, Rules of Procedure of
Shareholders' Meeting, Rules of Procedure of Board of Directors, Rules of Procedure of Board of Supervisors,
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Measures for the Administration of Holding (Participating) Companies and Measures for the Administration of
Expatriate Directors and Supervisors.
4. Establishing of internal control system
The Company kept close observation on the whole business process identifying risk points according to Enterprise
Internal Control Standards, Internal Control Guidelines, Internal Assessment Guidelines, and Internal Control
Guidelines for PLCs issued by Shenzhen Stock Exchange. Effective mechanisms on risk control and internal
auditing were conducted. The Auditing Committee of the Board was responsible to supervise the internal control
practices.
5.Corporate Information Disclosure and Transparency
The company attaches great importance to the information disclosure and the investor relations
management, and it has designated Securities Times, Hong Kong Commercial Daily and
http://www.cninfo.com.cn as its statutory information disclosure media and website. With fair treatment to all
investors, the company in a timely manner discloses the information with truthfulness, accuracy and completeness,
which well ensures the transparency of the company and the legitimate rights and interests of all shareholders.
Does there exist any difference in compliance with the corporate governance , the PRC Company Law and the
relevant provisions of CSRC,
□ Yes √No
There exist no difference in compliance with the corporate governance , the PRC Company Law and the relevant
provisions of CSRC.
II. Independence and Completeness in business, personnel , assets, organization and finance
The Company kept independence and separated with holding shareholders on the aspects of business, human
resource, capital, organization, and accounting. And the Company established independent and complete business
operating systems.
1. On business operations
The Company’s majors of design, manufacture, sale business of industrial steam turbine was independent from the
holding company (Hangzhou Steam Turbine Power Group). The controlling shareholder in the subsidiary
engineering company to undertake the project in，Some of the holding subsidiaries of the Group are selling the
Company’s steam turbine products and spare parts, which are at market prices; The Company and the Group are
not sharing any office site.
2. On personnel management
The Company kept independence with the holding shareholders on the aspects of human resource and
remuneration management. Although the Company’s chairman of the Board and the vice chairman of the Board
were part-time by the parent company’s (Hang Steam Turbine Group) chairman of the Board and the vice
chairman of the Board; the Company’s management was employed and gotten salary exclusively in the Company
instead of any management duty in the holding-share share holders except the duty of chairman of the Board. The
Company’s accountant shad no part-time job in their parent company or related companies.
3. On capital operation
The property relationship between the Company and the holding-share shareholders was clear and explicit. The
capital and business injected by the holding-share shareholders was independent and complete. And at the same
time, the Company owned system of manufacturing and operation, sale, accessorial manufacturing and relevant
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
equipments which independent from holding shareholder.
4. On organization structure
The Company kept total independence from the controlling shareholder on the organization configuration. The
Company owned separate and independent manufacturing, supplying, and sales system, there was no horizontal
competition with the controlling shareholder, and the Company owned independent management and operation
systems. The Company signed related trading agreements with the subsidiaries of the share-holding company. The
Company’s intermediate managers are employed by the Company’s executives, and was evaluated under the
economic responsibility system.
5. On accounting management
The Company had independent accounting department, and established independent account re-calculation system
and accounting system; the Company also had the regulated and independent finance management on the
share-holding and subsidiaries; the Company had independent finance policies and bank account and its tax, there
was no joint account with controlling shareholder.
6. In legal aspect
The company has been approved by Zhejiang Provincial Department of Justice to carry out corporate lawyer
work, and perform legal affairs duties according to relevant regulations such as Opinions on Implementing the
Legal Adviser System and the Lawyers System of Public Lawyers Company and Measures for the Administration
of Legal Advisers in State-owned Enterprises. Along with Zhejiang Tianche Law Firm – the public legal
consultancy employed by the Company, the Department aims to regulate the legal affairs and day-to-day
administrations .
III. Competition situations of the industry
□ Applicable √ Not applicable
IV. Annual General Meeting and Extraordinary Shareholders’ Meetings in the Reporting Period
1.Annual General Meeting
Investor
Disclosure
Sessions Type participati Meeting Date Disclosure index
date
on ratio
Resolutions of the 1st Provisional Shareholders’
1st Provisional
Provisional Annual Meeting 2020 (Announcement No.
Shareholders’ November November
Shareholders’ 72.48% 2020-68) released by Securities Times, Shanghai
Meeting 2020 25,2020 26,2020
Securities Daily, Hong Kong Commercial Daily,
Meeting
and Http://www.cninfo.com.cn
Resolutions of the Shareholders’ Annual Meeting
2019 (Announcement No. 2020-38) released by
2019 Shareholders’ Shareholders’
72.59% June 5,2020 June 5,2020 Securities Times, Shanghai Securities Daily, Hong
general meeting Meeting Kong Commercial Daily, and
Http://www.cninfo.com.cn
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V. Responsibility performance of independent directors in report period
1. The attending of independent directors to board meetings and shareholders’ general meeting
The attending of independent directors
Number of
Failure to Number of
Board Number of
personally
meetings Number of meetings Number of attendance at
Independent Number of attend board
necessary to be spot attended by attendances by general
Directors absence meetings
attended in the attendances Communicatio representative
successively meetings of
reporting n
twice (Yes/No) shareholders
period
Zhang Xiaoyan 7 3 4 0 0 No 2
Gu Xinjian 7 2 5 0 0 No 2
Chen Danhong 7 3 4 0 0 No 2
Zhang Hejie 7 2 5 0 0 No 2
Notes to failure to personally attend Board Meetings Successively Twice
None
2. Objection for relevant events from independent directors
Independent directors come up with objection about Company’s relevant matters
□Yes √No
No objections arising from the independent directors on relevant events of the Company during the Period
3. Other notes to duty performance of independent directors
Has an independent director’s advice to the Company been accepted
√Yes □No
Explanation on acceptance of or failure to accept an independent director’s advice to the Company.
（1）By understanding the business situation in 2019, it is recommended that the company grasp the strategic
positioning of the market and actively explore the international market; It is suggested that the company should
control the contract risk and increase the accounts receivable collection through litigation and other means; It is
suggested that the company strengthen salary management and performance appraisal, and improve the working
enthusiasm of employees and managers.
(2) At the 1st communication meeting between the independent directors and the accounting firm, the
independent directors debriefed the accounting firm, and suggested the Company to attach importance to the
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
recovery of receivables and the inventory of units to grasp risks.
(3)At the 2nd communication meeting between the independent directors and the accounting firm,the
independent directors suggested the Company to confirm revenue recognition principle and keep the
precautionary principle as always, to respond risks for partial suspended projects, to keep the the construction
progress of important issues up with the market condition changes, and to actively disclose relevant information to
minority shareholders and maintain their interests
(4) It was recognized at the first meeting of the Eighth Compensation Committee that the Company's directors and
senior executives performed their duties diligently and made significant contribution to the Company's business
development during their tenure, hence greater compensation assessment incentive should be given and
compensation should be increased to create an effective incentive. Since the State-owned Assets Supervision and
Administration Commission has restrictions on compensation assessment on directors and senior executives of
state-owned enterprises, an adjustment shall be done to the compensation proposal for directors and senior
executives of the Company subject to corresponding reference standards.
The management accepted the above suggestions.
VI. Fulfilling of duties by the Special Committees under the Board of Directors
(I) The Auditing Committee
The Auditing Committee was performing its duties strictly according to the Working Criteria of Auditing
Committee and was mainly in charge of supervising, verification and communication of internal and external
auditing works. It was also performing the duties to satisfy the requirement of China Securities Regulatory
Commission as well as Shenzhen Stock Exchange. In the report period, the main works performed by the Auditing
Committee were:
1. To call the 1st meeting of the 8th term of Auditing Committee at which the annual auditing work was discussed
and suggestions were provided on problems in the auditing process.
2. The 2nd meeting of the 8th term of Auditing Committee was held to examine the Annual Report 2019, the
General Manager’s Report, Financial Report, Dividend Plan, Proposal of Routine Related Transactions, Providing
of Inventory Provision and Bad Debt Provision, Internal Control Manual, Internal Control Introspective Report,
Internal Control Annual Report and Plan. Statements and were provided on the auditing works of the CPA, and
opinions were issued about extending of the CPA’s service. Improvement suggestions were provided on internal
control. Opinions were provided on the Annual Report and Financial Report which were about to be submitted to
the Board.
(II) The Remuneration and Assessment Committee
The Remuneration and Assessment Committee was established to set up standard for assessing the performance
and deciding the remuneration of the directors and executives. Detailed plans were produced and submitted to the
Board. In the report period, The Committee conducted the following works in the report period:
1.The 1st meeting of the 8th term of Remuneration and Assessment Committee was held to examine the
assessment outcome of the directors and executives for year 2019, and produced the remuneration plan for the
examination of the Board.
(III) Nomination Committee of the Board of Directors
The board of directors of the company shall set up a nomination committee to make recommendations to the
board of directors on the size and composition of the board of directors, and to examine and make
recommendations on the candidates for directors and senior management. During the reporting period, he
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
company's directors and senior executives did not change.
VII. Fulfilling of duties of the Supervisory Committee
Is there any risk in the supervisory activities of the board of supervisors during the reporting period
□ Yes √No
No disagreement with supervisory issues by the Supervisory Committee during the report period.
VIII. Assessment and incentive Mechanism for Senior executives
The Company adopts the annual remuneration scheme for directors (excluding independent directors) and senior
executives (including Chairman of the Supervisory Committee) which is a combination of basic wages and
performance wages. According to the “Remuneration and Assessment Scheme for the 5th term of the 7th term of
Board and the 2nd shareholders’ provisional meeting 2019(2019 Revision), the Remuneration & Assessment
Committee is responsible to assess the performances of the directors and senior executives according to stipulated
procedures. Directors and senior executives are scored and assessed one after another and comes out with a plan
subject to approval of the Board and the Shareholders’ Meeting. Basic wages are distributed on monthly basis and
the overall remunerations are paid upon completion of the annual assessment.
In the report term, the Directors (exclude independent directors) and senior executives (including the Chairman of
Supervisory Committee) are scored and assessed one after another and comes out with a plan decided by the 2nd
meeting of Remuneration Committee, which was subject to approval of the Board. The Assessment and
Remuneration Scheme was produced through legal procedures and has been monitoring and motivating the
directors and senior executives. The Company hadn’t conducted any share incentive program to any directors or
senior executives as of the end of report period.
IX. Internal control situations
1. Major problems in internal control discovered in the report period
□Yes √ No
2. Self-evaluation report on internal control
Disclosure date of appraisal report on
April 17,2021
internal control
Disclosure index of appraisal report
Disclosed by http://www.cninfo.com.cn dated April 17, 2021
on internal control
Proportion of total unit assets covered
by appraisal in the total assets of the
100.00%
consolidated financial statements of
the company
Proportion of total unit incomes
covered by appraisal in the total
100.00%
business incomes of the consolidated
financial statements of the company
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Standards of Defects Evaluation
Type Financial Report Non-financial Report
Deficiency characterized as below will be treated (1) Punishment received by governments
as fatal defects: To correct the fatal errors already below provincial level ( including provincial
published in the financial report （except for the level) but no negative effects for our
retrospection and adjustments of previous years company’s periodic report disclosure will be
because of policies changing and other objective considered as a general deficiency; (2) or
factors changing);fatal errors already discovered punishments from national governments
by auditor, unidentified in the current financial above provincial level but no negative effects
Standard report; any fraud among top management; invalid for our company’s periodic report disclosure
monitoring to the financial report from audit will be considered as a significant deficiency;
committee and internal audit department. (3) external official disclosure has been
already carried out and brought certain
negative effects to our company’s periodic
report disclosure will be considered as a fatal
deficiency.
In accordance with the degree of importance of 1) Losses < consolidating 3% of pre-tax
deficiency that may cause financial report profit, will be asserted as general deficiencies;
errors, our company defined quantitative (2) 3% of combined pre-tax profit ≤ losses <
identification standard of financial report internal 5% of combined pre-tax profit, will be
deficiency control as per the average of the last asserted as significant deficiencies; (3) losses
three-year total profit. 1) errors reported indicator ≥5% of combined pre-tax profit, will be
Standards of Quantization < consolidating 3% of pre-tax profit, will be asserted as fatal deficiencies.
asserted as general deficiencies; (2) 3% of
combined pre-tax profit ≤ errors reported
indicator < 5% of combined pre-tax profit, will be
asserted as significant deficiencies; (3) errors
reported indicator ≥5% of combined pre-tax
profit, will be asserted as fatal deficiencies.
Number of major defects in financial
0
reporting（a）
Number of major defects in non
0
financial reporting (a)
Number of important defects in
0
financial reporting（a）
Number of important defects in non
0
financial reporting（a）
X. Internal Control audit report
√ Applicable □ Not applicable
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Review opinions in the internal control audit report
As far as our best understanding, Hangzhou Steam Turbine Co., Ltd. has been conducting effective internal control over its
financial reporting system in all material aspects we observed as of December 31, 2020, and has been following with the Enterprise
Internal Control Criteria.
Disclosure of internal audit report Disclosure
Disclosure date of audit report
April 17,2021
of internal control (full-text)
Index of audit report of
Disclosed by http://www.cninfo.com.cn dated April 17, 2021
internal control (full-text)
Internal audit report’s opinion Unqualified audit opinion
Non-financial reporting the
No
existence of significant deficiencies
Has the CPAs issued a qualified auditor’s report of internal control .
□ Yes √ No
Does the internal control audit report issued by the CPAs agree with the self-assessment report of the Board of
Directors
√ Yes □ No
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
XI. Corporation bonds
Whether or not the Company public offering corporation bonds in stock exchange, which undue or without
payment in full at maturity on the approval date for annual report disclosed
□ Yes √ No
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
XII.Financial Report
I. Auditors' Report
Type of auditing opinion Standard report without qualified opinion
Date of issue of the Auditors’ Report April 15, 2021
Pan-China Certified Public Accountants (Special common
Name of the CPA
partnership)
Ref. No. of the Auditors’ Report Tian Jian Shen No.:〔2021〕2378
Name of the certified accountants Sheng Weiming, Ye Xianbin
Auditors’ Report
To the entire shareholders of Hangzhou Steam Turbine Co., Ltd.
I. Opinion
We have audited the financial statements of Hangzhou Steam Turbine Co., Ltd..(hereinafter referred to as "the
Company"), which comprise the balance sheet as at December 31, 2020, and the income statement, the statement
of cash flows and the statement of changes in owners' equity for the year then ended and notes to the financial
statements.
In our opinion, the attached financial statements are prepared, in all material respects, in accordance with
Accounting Standards for Business Enterprises and present fairly the financial position of the Company as at
December 31, 2020 and its operating results and cash flows for the year then ended.
II. Basis for Our Opinion
We conducted our audit in accordance with the Auditing Standards for Certified Public Accountants in China. Our
responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the
Financial Statements section of our report. According to the Code of Ethics for Chinese CPA, we are independent
of the Company in accordance with the Code of Ethics for Chinese CPA and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
(1) Recognition of income
1.Description of the matter
For details of the relevant information disclosure, please refer to Note III (19), Note V (2) 1 and Note XIII (1)
in the financial statements.
The operating income of Hangzhou Steam Turbine Co., Ltd. mainly comes from the production and sales of
industrial steam turbines and other products. In 2020, the amount of operating income items shown in the
consolidated financial statements of Hangzhou Steam Turbine Co., Ltd. was RMB 4.496 billion, of which the
operating income of the industrial steam turbine business was RMB 3.39 billion, accounting for 75.39% of the
operating income.
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
The domestic sales income of Hangzhou Turbine Co., Ltd. is recognized and accepted by customers when
the company delivers the products to the delivery place agreed in the contract, and the sales income is recognized
when the company has declared the products according to the contract, obtained the bill of lading, collected the
payment or obtained the right to collect payment, and the related economic benefits are likely to flow into the
company.
As the operating income is one of the key performance indicators of Hangzhou Turbine Co., Ltd., there may
be inherent risk that the management of Hangzhou Turbine Co., Ltd. (hereinafter referred to as the management)
will achieve specific goals or expectations through improper revenue recognition. Therefore, we identified
revenue recognition as a key audit item.
2. Audit Countermeasures
For revenue recognition, the audit procedures we have implemented mainly include:
(1) Understand key internal controls related to revenue recognition, evaluate the design of these controls,
determine whether they are implemented, and test the operational effectiveness of relevant internal controls;
(2) Check the sales contract, understand the main contract terms or conditions, and evaluate whether the
revenue recognition method is appropriate;
(3) Implementing substantive analysis procedures for operating income and gross profit margin according to
products and customers to identify whether there are material or abnormal fluctuations, and to identify the causes
of such fluctuations;
(4) For domestic sales income, by sampling method check the supporting documents related to revenue
recognition, including sales contracts, sales invoices, shipment bills and receipts; for export income, by sampling
method check the supporting documents including sales contracts, export declarations, freight bills of lading and
sales invoices;
(5) In conjunction with the letter confirmation of accounts receivable, the sales amount of the current period
for major customers are letter confirmed by sampling method;
(6) Implement a cut-off test on the operating income recognized before and after the balance sheet date,
and evaluate whether the operating income is recognized within an appropriate period;
(7) Obtain the sales return record after the balance sheet date, and check whether there is any situation that
the income recognition conditions are not met on the balance sheet date;
(8) Check that the information related to the operating income whether has been properly presented and
disclosed in the financial statements.
(II) Impairment of accounts receivable
1. Description of the matter
For related information disclosure, please refer to Note III (9) and Note V (1) 4 of the financial statements.
As of December 31, 2020, the book balance of accounts receivable items shown in the consolidated financial
statements of Hangzhou Steam Turbine Co., Ltd. was RMB 2.611 billion, the bad debt provision was RMB 992
million, and the book value was RMB 1.619 billion.
According to the credit risk characteristics of each account receivable, the management measures its loss
reserves on the basis of individual accounts receivable or a combination of accounts receivable and according to
the expected credit loss amount equivalent to the whole duration. For accounts receivable that measure expected
credit losses on a single basis, the management comprehensively considers reasonable and reliable information
about past events, current status and future economic status forecasts, estimates the expected cash flow, and
determines the provision for bad debts to be accrued accordingly; For accounts receivable whose expected credit
losses are measured on the basis of combination, the management divides the combination based on aging, refers
to historical credit loss experience, and adjusts it according to forward-looking estimation, and compiles a
comparison table between the aging of accounts receivable and loss given default, thereby determining the bad
debt reserves to be accrued.
Due to the significant amount of accounts receivable and the impairment test of accounts receivable
involving significant management judgment, we determine the impairment of accounts receivable as a key audit
matter.
2. Audit Countermeasures
For the impairment of accounts receivable, the audit procedures we have implemented mainly include:
(1) Understand the key internal controls related to the impairment of accounts receivable, evaluate the design
of these controls, determine whether they have been implemented, and test the operational effectiveness of the
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
relevant internal controls;
(2) Review the subsequent actual write-off or reversal of accounts receivable with provision for bad debts in
previous years, and evaluate the accuracy of the management's past forecasts;
(3) Review the management's relevant considerations and the objective evidence for the impairment test of
the accounts receivable, and evaluate whether the management fully recognizes the accounts receivable that have
been impaired;
(4) For accounts receivable that are individually tested for impairment, obtain and examine the management's
forecast on the present value of future cash flows, evaluate the rationality of the key assumptions and the accuracy
of the data used in the forecast, and verify with the external evidence obtained;
(5) For the accounts receivable that are tested for impairment using the combination method, evaluate the
rationality of the management's combination dividing according to the credit risk characteristics; based on the
historical loss rate of a combination with similar credit risk characteristics and the relevant observable data
reflecting the current situation and so on to evaluate the rationality of the management's impairment test method
(including the proportion of the provision for bad debts of each combination); test the accuracy and completeness
of the data used by the management (including the accounts receivable combination with aging as the risk
characteristics, checking the accuracy of the ageing of accounts receivable by sampling method) and test whether
the calculation of the corresponding provision for bad debts is accurate;
(6) Checking the post-payments of accounts receivable and evaluating the reasonableness of the
management's provision for bad debts of accounts receivable;
(7) Check whether the information related to the impairment of accounts receivable has been properly
presented and disclosed in the financial statements.
(III) Net realizable value of inventories
1. Description of the matter
For details of relevant information disclosure, please refer to Note III (10) and Note V (1) 8 of the financial
statements.
As of December 31, 2020, the book balance of the inventory items shown in the consolidated financial
statements of Hangzhou Steam Turbine Co., Ltd. was RMB 2.508 billion, the provision for price falling was RMB
336 million, and the book value was RMB 2.172 billion.
On the balance sheet date, the inventories are measured at the lower of the cost and net realizable value, and
the provision for inventory falling price is made based on the difference that the cost of a single inventory
exceeding the net realizable value. On the basis of considering the purpose of holding the inventory, the
management determines the estimated selling price according to the contract price, the market price of the same or
similar products, the advance receipt, the estimated disposal income, etc., and determines the net realizable value
of the inventory by the estimated sales price subtracting the estimated occurrence cost will be happened at the
time of completion and subtracting the estimated sales expenses and related taxes and fees
Due to the significant amount of inventories and the determination of the net realizable value of inventories
involving significant management judgment, we determine the net realizable value of inventories as a key audit
item.
2. Audit Countermeasures
For the net realizable value of inventories, the audit procedures we have implemented mainly include:
(1) Understand the key internal controls related to the net realizable value of inventory, evaluate the design of
these controls, determine whether they have been implemented, and test the operational effectiveness of the
relevant internal controls;
(2) Review management's forecast of the net realizable value of inventory and the actual operating results in
previous years, and evaluate the accuracy of management's past forecasts;
(3) by sampling method review the management's forecast of the estimated selling price of the inventory, and
compare the estimated selling price with the post-event situation, the contracted selling price, the advance receipt,
and the valuation value;
(4) evaluate the management's reasonableness for the estimation on the costs, sales expenses and related
taxes and fees that will occur from the inventory to its completion sales;
(5) test the accuracy of the management's calculation on the net realizable value of inventory;
(6) In combination with the inventory monitoring, check whether the ending inventory has long storage age,
obsolete models, project suspension or termination situation, and evaluate whether the management has
reasonably estimated the net realizable value;
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
(7) Check whether the information related to the net realizable value of the inventory has been properly
presented and disclosed in the financial statements.
IV. Other information
The management of the Company is responsible for the other information. The other information comprises
information of the Company's annual report, but excludes the financial statements and our auditor's report.
Our opinion on the financial statements does not cover the other information and we do not and will not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor's report, we conclude that there is a material misstatement of this other information, we are required to
report that fact. We have nothing to report in this regard
V. Responsibilities of Management and Those Charged with Governance for the Financial Statements
The Company's management is responsible for preparing the financial statements in accordance with the
requirements of Accounting Standards for Business Enterprises to achieve a fair presentation, and for designing,
implementing and maintaining internal control that is necessary to ensure that the financial statements are free
from material misstatements, whether due to frauds or errors.
In preparing the financial statements, management of the Company is responsible for assessing the Company's
ability to continue as a going concern, disclosing matters related to going concern and using the going concern
basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
VI. Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the audit standards will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional
scepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, omissions,
misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management of the Company.
(4) Conclude on the appropriateness of using the going concern assumption by the management of the Company,
and conclude, based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures
in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may
cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures,
and whether the financial statements represent the underlying transactions and events in a manner that achieves
fair presentation.
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express an opinion on the financial statements and bear all liability for the
opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit matters, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
II. The Financial Statements
1. Consolidated Balance Sheet
Prepared by: Hangzhou Steam Turbine Co., Ltd
In RMB
Items December 31,2020 December 31,2019
Current asset：
Monetary fund 1,829,481,187.49 1,756,320,237.50
Settlement provision
Outgoing call loan
Transactional financial assets 1,021,681,809.34 854,210,990.44
Derivative financial assets
Notes receivable 118,107,076.67 46,484,259.65
Account receivable 1,618,798,305.46 2,025,081,342.74
Financing of receivables 774,663,468.76 680,279,893.94
Prepayments 577,604,707.85 388,562,447.80
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance contracts receivable
Other account receivable 64,392,157.13 45,520,789.89
Including：Interest receivable
Dividend receivable 43,605,292.60 27,827,292.60
Repurchasing of financial assets
Inventories 2,171,753,113.46 2,051,290,269.07
Contract assets 486,569,325.17
Assets held for sales
Non-current asset due within 1 year
Other current asset 48,964,817.02 71,592,063.09
Total of current assets 8,712,015,968.35 7,919,342,294.12
Non-current assets：
Non-current assets：
Loans and payment on other’s behalf disbursed
Creditor's right investment
Long-term receivable
Long term share equity investment 23,355,441.61 22,129,585.83
Other equity instruments investment 4,056,378,073.52 2,490,376,886.96
Other non-current financial assets 18,376,081.45 142,244,014.16
Property investment
Fixed assets 1,094,505,770.45 724,702,558.18
Construction in progress 804,921,709.95 799,410,358.84
Production physical assets
Oil & gas assets
Use right assets
Intangible assets 273,812,314.29 275,140,367.22
Development expenses
Goodwill
Long-germ expenses to be amortized
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Deferred income tax asset 409,288,564.79 226,769,514.65
Other non-current asset
Total of non-current assets 6,680,637,956.06 4,680,773,285.84
Total of assets 15,392,653,924.41 12,600,115,579.96
Current liabilities
Short-term loans 216,722,803.41 97,840,187.21
Loan from Central Bank
Borrowing funds
Transactional financial liabilities
Derivative financial liabilities
Notes payable 230,724,303.75 227,961,541.12
Account payable 1,207,797,820.78 1,030,408,716.74
Advance receipts 2,818,130,397.17
Contract liabilities 2,871,186,991.05
Selling of repurchased financial assets
Deposit taking and interbank deposit
Entrusted trading of securities
Entrusted selling of securities
Employees’ wage payable 116,400,157.12 96,205,949.57
Tax payable 281,909,641.60 34,521,756.98
Other account payable 75,212,591.46 82,148,405.19
Including：Interest payable -
Dividend payable -
Fees and commissions payable
Reinsurance fee payable
Liabilities held for sales
Non-current liability due within 1 year 1,001,088.89 200,319.30
Other current liability 374,106,541.36
Total of current liability 5,375,061,939.42 4,387,417,273.28
Non-current liabilities：
Reserve fund for insurance contracts
Long-term loan 21,623,520.00 22,435,762.23
Bond payable
Including：preferred stock
Sustainable debt
Lease liability
Long-term payable 405,872,616.77 730,460,508.59
Long-term remuneration payable to staff
Expected liabilities 32,202,504.57
Deferred income 489,416,290.74 51,713,417.61
Deferred income tax liability 550,540,278.99 316,910,472.07
Other non-current liabilities
Total non-current liabilities 1,467,452,706.50 1,153,722,665.07
Total of liability 6,842,514,645.92 5,541,139,938.35
Owners’ equity
Share capital 754,010,400.00 754,010,400.00
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Other equity instruments
Including：preferred stock
Sustainable debt
Capital reserves 153,617,619.65 152,973,219.65
Less：Shares in stock 144,078,948.09
Other comprehensive income 3,114,962,386.84 1,784,195,156.34
Special reserve 17,699,635.27 18,324,473.28
Surplus reserves 621,112,807.78 621,112,807.78
Common risk provision
Retained profit 3,587,465,039.91 3,276,880,091.53
Total of owner’s equity belong to the parent company 8,104,788,941.36 6,607,496,148.58
Minority shareholders’ equity 445,350,337.13 451,479,493.03
Total of owners’ equity 8,550,139,278.49 7,058,975,641.61
Total of liabilities and owners’ equity 15,392,653,924.41 12,600,115,579.96
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin Can
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
2.Parent Company Balance Sheet
In RMB
Items December 31,2020 December 31,2019
Current asset：
Monetary fund 1,068,802,728.63 1,017,072,165.81
Transactional financial assets 901,681,809.34 532,040,990.44
Derivative financial assets
Notes receivable 2,386,000.00 4,712,981.35
Account receivable 1,233,324,781.52 1,470,224,608.96
Financing of receivables 560,214,105.19 376,974,822.75
Prepayments 435,233,928.27 222,187,452.27
Other account receivable 52,338,992.66 31,067,688.80
Including：Interest receivable
Dividend receivable 43,605,292.60 27,827,292.60
Inventories 1,504,591,192.03 1,402,933,995.29
Contract assets 298,440,051.27
Assets held for sales
Non-current asset due within 1 year
Other current asset 30,332,464.25
Total of current assets 6,057,013,588.91 5,087,547,169.92
Non-current assets： -
Creditor's right investment
Other investment on bonds
Long-term receivable
Long term share equity investment 925,188,454.39 897,978,418.75
Other equity instruments investment 4,056,378,073.52 2,490,376,886.96
Other non-current financial assets 18,227,489.14 119,345,893.13
Property investment
Fixed assets 353,788,891.57 413,089,308.63
Construction in progress 495,409,362.19 246,387,266.69
Production physical assets -
Oil & gas assets -
Use right assets -
Intangible assets 163,116,618.58 161,688,374.81
Development expenses -
Goodwill -
Long-germ expenses to be amortized -
Deferred income tax asset 355,670,069.60 174,060,251.09
Other non-current asset
Total of non-current assets 6,367,778,958.99 4,502,926,400.06
Total of assets 12,424,792,547.90 9,590,473,569.98
Current liabilities
Short-term loans 150,136,986.30
Transactional financial liabilities -
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Derivative financial liabilities -
Notes payable 6,955,000.00 10,000,000.00
Account payable 820,258,129.08 623,426,940.99
Advance receipts 1,908,382,258.12
Contract Liabilities 2,077,614,427.93
Employees’ wage payable 67,025,966.88 49,620,330.21
Tax payable 240,368,823.36 3,776,368.66
Other account payable 56,602,697.52 54,954,443.47
Including：Interest payable
Dividend payable
Liabilities held for sales
Non-current liability due within 1 year
Other current liability 267,804,499.76
Total of current liability 3,686,766,530.83 2,650,160,341.45
Non-current liabilities： -
Long-term loan
Bond payable
Including：preferred stock
Sustainable debt
Lease liability
Long-term payable 247,309,261.46 545,357,990.20
Long-term remuneration payable to staff
Expected liabilities 32,202,504.57
Deferred income 489,002,470.74 50,316,362.61
Deferred income tax liability 550,540,278.99 316,910,472.07
Other non-current liabilities
Total non-current liabilities 1,286,852,011.19 944,787,329.45
Total of liability 4,973,618,542.02 3,594,947,670.90
Owners’ equity
Share capital 754,010,400.00 754,010,400.00
Other equity instruments
Including：preferred stock
Sustainable debt
Capital reserves 138,953,250.09 138,953,250.09
Less：Shares in stock 144,078,948.09
Other comprehensive income 3,115,610,428.47 1,784,509,419.91
Special reserve 6,000,000.00 6,000,000.00
Surplus reserves 602,356,402.65 602,356,402.65
Retained profit 2,978,322,472.76 2,709,696,426.43
Total of owners’ equity 7,451,174,005.88 5,995,525,899.08
Total of liabilities and owners’ equity 12,424,792,547.90 9,590,473,569.98
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin Can
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
3.Consolidated Income statement
In RMB
Items Year 2020 Year 2019
I. Income from the key business 4,496,445,244.55 4,279,848,518.81
Incl：Business income 4,496,445,244.55 4,279,848,518.81
Interest income
Insurance fee earned
Fee and commission received
II. Total business cost 4,055,001,301.62 3,850,705,396.26
Incl：Business cost 3,070,339,239.83 2,962,218,665.32
Interest expense
Fee and commission paid
Insurance discharge payment
Net claim amount paid
Net amount of withdrawal of insurance contract reserve
Insurance policy dividend paid
Reinsurance expenses
Business tax and surcharge 35,092,314.03 33,200,190.84
Sales expense 222,561,812.71 214,261,920.21
Administrative expense 499,397,682.96 488,985,589.47
R & D costs 207,848,047.96 172,171,661.60
Financial expenses 19,762,204.13 -20,132,631.18
Including：Interest expense 7,012,513.74 9,963,292.02
Interest income 21,990,927.98 29,571,034.30
Add: Other income 104,733,657.43 46,302,840.83
Investment gain（“-”for loss） 146,163,604.81 147,991,934.91
Incl: investment gains from affiliates -1,927,761.28 -1,500,653.46
Financial assets measured at amortized cost cease to be
recognized as income
Gains from currency exchange
Net exposure hedging income
Changing income of fair value 2,824,771.16 -8,064,846.00
Credit impairment loss -9,902,018.52 19,024,730.60
Impairment loss of assets -73,523,271.22 -116,698,877.20
Assets disposal income 383,003.71 420,395.37
III. Operational profit（“-”for loss） 612,123,690.30 518,119,301.06
Add ：Non-operational income 46,012,519.79 9,253,221.92
Less: Non-operating expense 37,203,173.86 49,991,749.22
IV. Total profit(“-”for loss) 620,933,036.23 477,380,773.76
Less：Income tax expenses 68,414,046.71 51,033,950.90
V. Net profit 552,518,989.52 426,346,822.86
(I) Classification by business continuity
1.Net continuing operating profit 552,518,989.52 426,346,822.86
2.Termination of operating net profit
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
(II) Classification by ownership
1.Net profit attributable to the owners of parent company 459,345,443.38 345,138,064.00
2.Minority shareholders’ equity 93,173,546.14 81,208,758.86
VI. Net after-tax of other comprehensive income 1,330,317,116.59 407,432,983.75
Net of profit of other comprehensive income attributable to owners 1,330,767,230.50 407,026,633.60
of the parent company.
（I）Other comprehensive income items that will not be reclassified
1,331,101,008.56 406,725,308.17
into gains/losses in the subsequent accounting period
1.Re-measurement of defined benefit plans of changes in net debt o
r net assets
2.Other comprehensive income under the equity method investee ca
n not be reclassified into profit or loss.
3. Changes in the fair value of investments in other equity
1,331,101,008.56 406,725,308.17
instruments
4. Changes in the fair value of the company’s credit risks
5.Other
（II）
Other comprehensive income that will be reclassified into profit or l -333,778.06 301,325.43
oss.
1.Other comprehensive income under the equity method investee ca
n be reclassified into profit or loss.
2. Changes in the fair value of investments in other debt obligations
3. Other comprehensive income arising from the reclassification of
financial assets
4.Allowance for credit impairments in investments in other debt
obligations
5. Reserve for cash flow hedges
6.Translation differences in currency financial statements -333,778.06 301,325.43
7.Other
Net of profit of other comprehensive income attributable to Minorit
-450,113.91 406,350.15
y shareholders’ equity
VII. Total comprehensive income 1,882,836,106.11 833,779,806.61
Total comprehensive income attributable to the owner of the parent
1,790,112,673.88 752,164,697.60
company
Total comprehensive income attributable minority shareholders 92,723,432.23 81,615,109.01
VIII. Earnings per share
（I）Basic earnings per share 0.62 0.46
(II)Diluted earnings per share 0.62 0.46
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin Can
90
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
4. Income statement of the Parent Company
In RMB
Items Year 2020 Year 2019
I. Income from the key business 2,491,319,230.10 2,659,697,559.19
Incl：Business cost 1,724,460,420.79 1,891,710,034.53
Business tax and surcharge 17,627,107.30 16,417,145.67
Sales expense 118,991,535.78 121,156,993.92
Administrative expense 351,881,555.42 331,960,700.29
R & D expense 103,349,185.28 99,326,577.14
Financial expenses 15,463,238.65 -20,507,882.13
Including：Interest expenses 2,150,321.19 3,309,211.53
Interest income 15,208,360.56 22,921,074.97
Add：Other income 95,626,075.56 31,480,053.46
Investment gain（“-”for loss） 246,508,123.09 155,827,347.36
Including: investment gains from affiliates 210,035.64 -153,902.87
Financial assets measured at amortized cost cease to be recognized
as income
Net exposure hedging income -
Changing income of fair value 3,048,442.30 -7,837,109.45
Credit impairment loss -18,781,277.30 26,106,673.93
Impairment loss of assets -54,773,473.53 -106,144,548.84
Assets disposal income 247,056.74 172,317.08
II. Operational profit（“-”for loss） 431,421,133.74 319,238,723.31
Add ：Non-operational income 40,238,894.78 4,085,322.76
Less：Non -operational expenses 26,784,001.84 48,728,272.77
III. Total profit(“-”for loss) 444,876,026.68 274,595,773.30
Less：Income tax expenses 27,489,485.35 16,124,234.44
IV. Net profit 417,386,541.33 258,471,538.86
1.Net continuing operating profit 417,386,541.33 258,471,538.86
2.Termination of operating net profit
V. Net after-tax of other comprehensive income 1,331,101,008.56 406,725,308.17
（I）Other comprehensive income items that will not be reclassified 1,331,101,008.56
406,725,308.17
into gains/losses in the subsequent accounting period
1.Re-measurement of defined benefit plans of changes in net debt o
r net assets
2.Other comprehensive income under the equity method investee ca
n not be reclassified into profit or loss.
3. Changes in the fair value of investments in other equity 1,331,101,008.56
406,725,308.17
instruments
4. Changes in the fair value of the company’s credit risks
5.Other
-
(II)Other comprehensive income that will be reclassified into profit
or loss
1.Other comprehensive income under the equity method investee ca
n be reclassified into profit or loss.
91
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
2. Changes in the fair value of investments in other debt obligations
3. Other comprehensive income arising from the reclassification of
financial assets
4.Allowance for credit impairments in investments in other debt
obligations
5. Reserve for cash flow hedges
6.Translation differences in currency financial statements
7.Other
VI. Total comprehensive income 1,748,487,549.89 665,196,847.03
VII. Earnings per share
（I）Basic earnings per share
(II)Diluted earnings per share
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin Can
92
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
5. Consolidated Cash flow statement
In RMB
Items Year 2020 Year 2019
I.Cash flows from operating activities
Cash received from sales of goods or rending of services 3,803,293,069.31 3,687,652,554.12
Net increase of customer deposits and capital kept for brother
company
Net increase of loans from central bank
Net increase of inter-bank loans from other financial bodies
Cash received against original insurance contract
Net cash received from reinsurance business
Net increase of client deposit and investment
Cash received from interest, commission charge and commission
Net increase of inter-bank fund received
Net increase of repurchasing business
Net cash received by agent in securities trading
Tax returned 26,208,702.20 25,358,503.32
Other cash received from business operation 450,784,942.40 377,769,471.90
Sub-total of cash inflow 4,280,286,713.91 4,090,780,529.34
Cash paid for purchasing of merchandise and services 2,304,337,423.38 2,195,978,372.49
Net increase of client trade and advance
Net increase of savings in central bank and brother company
Cash paid for original contract claim
Net increase in financial assets held for trading purposes
Net increase for Outgoing call loan
Cash paid for interest, processing fee and commission
Cash paid to staffs or paid for staffs 777,909,857.94 713,930,802.94
Taxes paid 242,769,265.25 301,599,197.14
Other cash paid for business activities 500,853,566.65 447,016,325.54
Sub-total of cash outflow from business activities 3,825,870,113.22 3,658,524,698.11
Net cash generated from /used in operating activities 454,416,600.69 432,255,831.23
II. Cash flow generated by investing
Cash received from investment retrieving 145,070,209.90 55,913,940.00
Cash received as investment gains 112,463,899.46 103,903,099.53
Net cash retrieved from disposal of fixed assets, intangible assets,
592,778.88 693,292.93
and other long-term assets
Net cash received from disposal of subsidiaries or other operational
units
Other investment-related cash received 3,622,054,467.90 3,436,050,452.88
Sub-total of cash inflow due to investment activities 3,880,181,356.14 3,596,560,785.34
Cash paid for construction of fixed assets, intangible assets and
377,681,894.37 385,989,871.27
other long-term assets
Cash paid as investment 1,360,000.00 64,120,000.00
Net increase of loan against pledge
Net cash received from subsidiaries and other operational units
Other cash paid for investment activities 3,559,712,851.80 2,816,802,000.00
93
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Sub-total of cash outflow due to investment activities 3,938,754,746.17 3,266,911,871.27
Net cash flow generated by investment -58,573,390.03 329,648,914.07
III.Cash flow generated by financing
Cash received as investment
Including: Cash received as investment from minor shareholders
Cash received as loans 270,300,000.00 97,700,000.00
Other financing –related cash received
Sub-total of cash inflow from financing activities 270,300,000.00 97,700,000.00
Cash to repay debts 151,500,000.00 239,800,000.00
Cash paid as dividend, profit, or interests 253,918,245.18 207,155,889.38
Including: Dividend and profit paid by subsidiaries to minor
98,216,380.00 46,358,790.00
shareholders
Other cash paid for financing activities 173,520,614.76 28,574,866.67
Sub-total of cash outflow due to financing activities 578,938,859.94 475,530,756.05
Net cash flow generated by financing -308,638,859.94 -377,830,756.05
IV. Influence of exchange rate alternation on cash and cash
-22,903,722.19 -353,155.53
equivalents
V.Net increase of cash and cash equivalents 64,300,628.53 383,720,833.72
Add: balance of cash and cash equivalents at the beginning of term 1,645,907,650.92 1,262,186,817.20
VI ..Balance of cash and cash equivalents at the end of term 1,710,208,279.45 1,645,907,650.92
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin Can
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
6. Cash Flow Statement of the Parent Company
In RMB
Items Year 2020 Year 2019
I.Cash flows from operating activities
Cash received from sales of goods or rending of services 1,923,339,387.85 1,897,497,851.97
Tax returned 2,569,038.00 4,180,929.38
Other cash received from business operation 125,812,064.56 69,753,973.73
Sub-total of cash inflow 2,051,720,490.41 1,971,432,755.08
Cash paid for purchasing of merchandise and services 1,041,504,256.96 1,010,258,016.39
Cash paid to staffs or paid for staffs 516,788,220.90 456,948,317.08
Taxes paid 90,229,706.75 164,428,247.71
Other cash paid for business activities 184,157,740.03 219,823,330.75
Sub-total of cash outflow from business activities 1,832,679,924.64 1,851,457,911.93
Net cash generated from /used in operating activities 219,040,565.77 119,974,843.15
II. Cash flow generated by investing
Cash received from investment retrieving 109,119,738.31
Cash received as investment gains 227,319,478.82 149,210,100.74
Net cash retrieved from disposal of fixed assets, intangible assets, 218,580.57
327,330.00
and other long-term assets
Net cash received from disposal of subsidiaries or other operational -
units
Other investment-related cash received 1,453,552,142.55 1,556,201,629.51
Sub-total of cash inflow due to investment activities 1,790,209,940.25 1,705,739,060.25
Cash paid for construction of fixed assets, intangible assets and 165,203,042.26
118,760,988.37
other long-term assets
Cash paid as investment 27,000,000.00 445,212,943.59
Net cash received from subsidiaries and other operational units -
Other cash paid for investment activities 1,595,000,000.00 882,000,000.00
Sub-total of cash outflow due to investment activities 1,787,203,042.26 1,445,973,931.96
Net cash flow generated by investment 3,006,897.99 259,765,128.29
III. Cash flow generated by financing
Cash received as investment -
Cash received as loans 150,000,000.00
Other financing –related ash received -
Sub-total of cash inflow from financing activities 150,000,000.00
Cash to repay debts 100,000,000.00
Cash paid as dividend, profit, or interests 150,773,829.89 154,323,302.21
Other cash paid for financing activities 144,078,948.09
Sub-total of cash outflow due to financing activities 294,852,777.98 254,323,302.21
Net cash flow generated by financing -144,852,777.98 -254,323,302.21
IV. Influence of exchange rate alternation on cash and cash -20,884,122.96
-261,792.58
equivalents
V.Net increase of cash and cash equivalents 56,310,562.82 125,154,876.65
Add: balance of cash and cash equivalents at the beginning of term 967,501,994.48 842,347,117.83
VI ..Balance of cash and cash equivalents at the end of term 1,023,812,557.30 967,501,994.48
95
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin Can
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
7. Consolidated Statement on Change in Owners’ Equity
Amount in this period
In RMB
Year 2020
Owner’s equity Attributable to the Parent Company
Other Equity
Common Minor
instrument Less: Other Total of
Items Share Capital Specialized Surplus risk Retained Othe shareholders
Preferr Shares in Comprehen Subtotal owners’ equity
Capital Othe reserves reserve reserves provisio profit r ’ equity
ed Sustaina stock sive Income
r n
stock ble debt
754,010, 152,973,2 1,784,195,1 621,112,807.7 3,276,880,091 6,607,496,14 451,479,493 7,058,975,641
I.Balance at the end of last year 18,324,473.28
400.00 19.65 56.34 8 .53 8.58 .03 .61
Add: Change of accounting policy
Correcting of previous errors
Merger of entities under common control
Other
754,010, 152,973,2 1,784,195,1 621,112,807.7 3,276,880,091 6,607,496,14 451,479,493 7,058,975,641
II.Balance at the beginning of current year 18,324,473.28
400.00 19.65 56.34 8 .53 8.58 .03 .61
644,400.0 144,078,9 1,330,767,2 310,584,948.3 1,497,292,79 -6,129,155.9 1,491,163,636
III.Changed in the current year -624,838.01
0 48.09 30.50 8 2.78 0 .88
1,330,767,2 459,345,443.3 1,790,112,67 92,723,432. 1,882,836,106
（1）Total comprehensive income
30.50 8 3.88 23 .11
（II）Investment or decreasing of capital
by owners
1．Ordinary Shares invested by sharehold
ers
2 ． Holders of other equity instruments in
vested capital
3．Amount of shares paid and accounted
as owners’ equity
4．Other
-148,760,495. -148,760,495. -98,216,380. -246,976,875.
（III）Profit allotment
00 00 00 00
97
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
1.Providing of surplus reserves
2.Providing of common risk provisions
3．Allotment to the owners (or -148,760,495. -148,760,495. -98,216,380. -246,976,875.
shareholders) 00 00 00 00
4．Other
(IV) Internal transferring of owners’
equity
1. Capitalizing of capital reserves (or to
capital shares)
2. Capitalizing of surplus reserves (or to
capital shares)
3．Making up losses by surplus reserves.
4.Change amount of defined benefit plans
that carry forward
Retained earnings
5．Other comprehensive income
carry-over retained earnings
6．Other
(V). Special reserves -624,838.01 -624,838.01 -636,208.13 -1,261,046.14
1. Provided this year 2,335,261.60 2,335,261.60 56,631.07 2,391,892.67
2．Used this term -2,960,099.61 -2,960,099.61 -692,839.20 -3,652,938.81
644,400.0 144,078,9 -143,434,548. -143,434,548.
（VI）Other
0 48.09 09 09
754,010, 153,617,6 144,078,9 3,114,962,3 621,112,807.7 3,587,465,039 8,104,788,94 445,350,337 8,550,139,278
IV. Balance at the end of this term 17,699,635.27
400.00 19.65 48.09 86.84 8 .91 1.36 .13 .49
Amount in last year
In RMB
Year 2019
Owner’s equity Attributable to the Parent Company
Items Minor Total of
Other Equity
Share instrument Capital Less: Other Specialized Surplus Common Retained Othe Subtotal shareholders owners’ equity
98
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Capital Preferr reserves Shares in Comprehens reserve reserves risk profit r ’ equity
Othe
ed Sustaina stock ive Income provision
r
stock ble debt
754,010, 151,684,4 1,377,168,5 621,112,807.7 3,082,544,1 6,007,540,9 416,989,449 6,424,530,378
I.Balance at the end of last year 21,020,671.47
400.00 19.65 22.74 8 07.52 29.16 .71 .87
Add: Change of accounting policy
Correcting of previous errors
Merger of entities under common control
Other
754,010, 151,684,4 1,377,168,5 621,112,807.7 3,082,544,1 6,007,540,9 416,989,449 6,424,530,378
II.Balance at the beginning of current year 21,020,671.47
400.00 19.65 22.74 8 07.52 29.16 .71 .87
1,288,800. 407,026,633 194,335,984 599,955,219 34,490,043. 634,445,262.7
III.Changed in the current year -2,696,198.19
00 .60 .01 .42 32 4
407,026,633 345,138,064 752,164,697 81,615,109. 833,779,806.6
（1）Total comprehensive income
.60 .00 .60 01 1
（II）Investment or decreasing of capital
by owners
1．Ordinary Shares invested by sharehold
ers
2 ． Holders of other equity instruments in
vested capital
3．Amount of shares paid and accounted
as owners’ equity
4．Other
-150,802,07 -150,802,07 -46,358,790. -197,160,869.
（III）Profit allotment
9.99 9.99 00 99
1.Providing of surplus reserves
2.Providing of common risk provisions
3．Allotment to the owners (or -150,802,07 -150,802,07 -46,358,790. -197,160,869.
shareholders) 9.99 9.99 00 99
4．Other
(IV) Internal transferring of owners’
99
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
equity
1. Capitalizing of capital reserves (or to
capital shares)
2. Capitalizing of surplus reserves (or to
capital shares)
3．Making up losses by surplus reserves.
4.Change amount of defined benefit plans
that carry forward
Retained earnings
5．Other comprehensive income
carry-over retained earnings
6．Other
-2,696,198.1
(V). Special reserves -2,696,198.19 -766,275.69 -3,462,473.88
9
1. Provided this year 364,361.91 364,361.91 15,317.91 379,679.82
-3,060,560.1
2．Used this term -3,060,560.10 -781,593.60 -3,842,153.70
0
1,288,800. 1,288,800.0
（VI）Other 1,288,800.00
00 0
754,010, 152,973,2 1,784,195,1 621,112,807.7 3,276,880,0 6,607,496,1 451,479,493 7,058,975,641
IV. Balance at the end of this term 18,324,473.28
400.00 19.65 56.34 8 91.53 48.58 .03 .61
8.Statement of change in owner’s Equity of the Parent Company
Amount in this period
In RMB
Year 2020
Other Equity instrument
Less: Other Ot
Items Capital Specialized Total of owners’
Share capital Preferre Sustain Shares in Comprehensive Surplus reserves Retained profit he
Other reserves reserve equity
d stock able stock Income r
debt
754,010,400.0 138,953,250.0
I.Balance at the end of last year 1,784,509,419.91 6,000,000.00 602,356,402.65 2,709,696,426.43 5,995,525,899.08
0 9
Add: Change of accounting policy
Correcting of previous errors
100
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Other
II.Balance at the beginning of current 754,010,400.0 138,953,250.0
1,784,509,419.91 6,000,000.00 602,356,402.65 2,709,696,426.43 5,995,525,899.08
year 0 9
144,078,94
III.Changed in the current year 1,331,101,008.56 268,626,046.33 1,455,648,106.80
8.09
（I）Total comprehensive income 1,331,101,008.56 417,386,541.33 1,748,487,549.89
(II) Investment or decreasing of capital
by owners
1 ． Ordinary Shares invested by shareh
olders
2．Holders of other equity instruments
invested capital
3.Amount of shares paid and accounted
as owners’ equity
4．Other
（III）Profit allotment -148,760,495.00 -148,760,495.00
1.Providing of surplus reserves
2．Allotment to the owners (or
-148,760,495.00 -148,760,495.00
shareholders)
3．Other
(IV) Internal transferring of owners’
equity
1. Capitalizing of capital reserves (or to
capital shares)
2. Capitalizing of surplus reserves (or to
capital shares)
3．Making up losses by surplus
reserves.
4.Change amount of defined benefit
101
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
plans that carry forward
Retained earnings
5．Other comprehensive income
carry-over retained earnings
6．Other
(V) Special reserves
1. Provided this year 1,937,754.15 1,937,754.15
2．Used this term -1,937,754.15 -1,937,754.15
144,078,94
（VI）Other -144,078,948.09
8.09
754,010,400.0 138,953,250.0 144,078,94
IV. Balance at the end of this term 3,115,610,428.47 6,000,000.00 602,356,402.65 2,978,322,472.76 7,451,174,005.88
0 9 8.09
Amount in last year
In RMB
Year 2019
Other Equity instrument Other Ot
Items Capital Less: Shares Specialized Total of owners’
Share Capital Comprehensive Surplus reserves Retained profit he
Preferre reserves in stock reserve equity
Sustaina Other
d stock Income r
ble debt
754,010,400.0 138,953,250 2,602,026,967.5
I.Balance at the end of last year 1,377,784,111.74 7,609,505.31 602,356,402.65 5,482,740,637.35
0 .09 6
Add: Change of accounting policy
Correcting of previous errors
Other
II.Balance at the beginning of current 754,010,400.0 138,953,250 2,602,026,967.5
1,377,784,111.74 7,609,505.31 602,356,402.65 5,482,740,637.35
year 0 .09 6
III.Changed in the current year 406,725,308.17 -1,609,505.31 107,669,458.87 512,785,261.73
（I）Total comprehensive income 406,725,308.17 258,471,538.86 665,196,847.03
(II) Investment or decreasing of capital
by owners
1．Ordinary Shares invested by shareho
102
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
lders
2 ． Holders of other equity instruments
invested capital
3.Amount of shares paid and accounted
as owners’ equity
4．Other
（III）Profit allotment -150,802,079.99 -150,802,079.99
1.Providing of surplus reserves
2．Allotment to the owners (or
-150,802,079.99 -150,802,079.99
shareholders)
3．Other
(IV) Internal transferring of owners’
equity
1. Capitalizing of capital reserves (or to
capital shares)
2. Capitalizing of surplus reserves (or to
capital shares)
3．Making up losses by surplus reserves.
4.Change amount of defined benefit
plans that carry forward
Retained earnings
(V) Special reserves -1,609,505.31 -1,609,505.31
1. Provided this year 256,841.75 256,841.75
2．Used this term -1,866,347.06 -1,866,347.06
（VI）Other
754,010,400.0 138,953,250 2,709,696,426.4
IV. Balance at the end of this term 1,784,509,419.91 6,000,000.00 602,356,402.65 5,995,525,899.08
0 .09 3
103
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
III．Basic Information of the Company
Hangzhou Steam Turbine Co., Ltd. (the Company) was incorporated as a joint stock limited company exclusively
promoted by Hangzhou Steam Turbine & Power Group Company Limited (“HSTG”) approved by the Securities
Regulatory Commission of the State Council with the Document SRC [1998] No. 8 by offering domestically
listed foreign currency ordinary shares (B Shares), with registration date: April 23, 1998, Headquartered in
Hangzhou, Zhejiang Province. The company now holds a unified social credit code for the 913300007042026204
business license, The Company’s registered capital is increased to RMB754.0104 million with total capital share
of 754.0104 million shares (face value RMB1.00). Among which state-owned legal person shares were 479.8248
million shares and 274.1856 million shares of current B shares. The shares were issued and listed for trading in
Shenzhen Stock Exchange on April 28, 1998. The design, manufacturing, Main Business Activities: R&D, Production and
Sales of Industrial Steam Turbine and other products. Main Products: Industrial Steam Turbine
These Financial Statements are released upon approval at the 10th meeting of the 8th term of Board held on April
15, 2021.
18 subsidiaries including Zhejiang Steam Turbine Packaged Technologies Co., Ltd., Hangzhou Zhongneng
Steam Turbine Power Co., Ltd., Hangzhou Steam Turbine Casting Co.,Ltd. Hangzhou Steam Turbine Auxiliary
Co., Ltd., Hangzhou Steam Turbine Machinery & Equipment Co., Ltd., Zhejiang Turbine Import & Export Co.,
Ltd., and Hangzhou Steam Turbine Heavy Industry Co., Ltd., were consolidated to the Financial Statements. For
details Note XII (8)5 of Financial statement notes
IV. Basis of compiling the financial statement
(1) Basis of compiling
The Company adopts perpetual operation as the basis of financial statements.
(II) Assessment on perpetuation
No issue or situation, in 12 months since the end of report period, composes major doubt on the
perpetuation assumption of the Company.
V. Principal Accounting Policies and Estimations
Principal Accounting Policies and Estimations
Important prompt: The Company utilized detailed accounting polices and estimations on providing of bad debt
provisions, fixed asset depreciation, intangible asset amortization, recognition of revenue, and so forth, according
to its business practices.
1. Statement of compliance to the Enterprise Accounting Standard
The finance report produced by the Company is accordance with the Enterprise Accounting Standard, and reflects
the Company’s financial state, business performance and cash flow frankly and completely.
2. Fiscal year
The Company uses the calendar year for its fiscal year. A fiscal year is from January 1 to December 31.
3. Operational period
The Company’s relatively shorter operational period, which is 12 months, and is used as division of liquidity of
assets and liabilities.
4. Standard currency for bookkeeping
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The Company uses Renminbi (RMB) as the standard currency for book keeping.
5. Accounting treatment of the entities under common control and different control
1. Treatment of entities under common control
Assets and liabilities acquired in merger of entities are measured at book values at the date of merger. The
difference between the net book value of asset and the offered price (or total of face value of shares issued) will be
adjusted into capital reserves; when the capital reserves is not enough to reduce, it will be adjusted into retained
profit.
2. Treatment of entities under different control
The difference of takeover cost over the fair value of recognizable net asset of the acquired entity is
recognized as goodwill at the day of takeover; in case the takeover cost is lower than the fair value of recognizable
net asset of the acquired entity, the measuring process over the recognizable asset, liabilities, contingent liabilities,
and takeover cost, shall be repeated, if comes out the same result, the difference shall be recorded into current
income
6. Method for preparing the consolidated financial statements
The parent company puts all of its subsidiaries under its control into the consolidated financial statements. The
consolidated financial statements are prepared according to the “Enterprise Accounting Standard No. 33 –
Consolidated Financial Statements”, basing on the accounts of the parent company and the subsidiaries, and after
adjusting the long-term investment equity in the subsidiary on equity basis.
7. Joint venture arrangements classification and Co-operation accounting treatment
None
8. Recognition of cash and cash equivalents
Cash equivalent refers to the investment held by the Company with short term, strong liquidity and lower risk of
value fluctuation that is easy to be converted into cash of known amount.
9. Foreign currency trade and translation of foreign currencies
1. Translation of foreign currency
Foreign currency trades are translated into RMB at the rate of the day when the trades are made. Those balances
of foreign currencies and monetary items in foreign currencies are accounted at the exchange rate of the balance
sheet date. Exchange differences, other than special loans satisfying the conditions of capitalization, are accounted
into current income account. Non-monetary items in foreign currencies and on historical cost are translated at the
rate of the trade day. Non-monetary items in foreign currencies and on fair value are translated at the rate of the
day when the fair value is recognized, where the differences are accounted as gain/loss from change of fair value.
2. Translation of foreign currency financial statements
Asset and liability items in the balance sheet are translated basing on the exchange rate of the balance sheet date;
Owners’ equities other than Retained Profit are translated at the exchange rate of the date when the trade
happened. Income and expense items in the income statement are translated at the similar rate of the date when the
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trade happened. Differences generated by the above translating of foreign currencies are demonstrated separately
under the owners’ equity in the balance sheet.
10.Financial instruments
(1) Classification of financial assets and financial liabilities
Financial assets are divided into the following three categories upon initial recognition: 1) Financial assets
measured in amortized cost; 2) Financial assets measured at fair value, whose changes are included in other
comprehensive income; 3) Financial assets measured at fair value, whose changes are included in current profits
and losses.
Financial liabilities are divided into the following four categories upon initial recognition: 1) Financial
liabilities measured at fair value, whose changes are included in current profits and losses; 2) Financial liabilities
resulting from the transfer of financial assets that do not meet the conditions for derecognition or continue to be
involved in the transferred financial assets; 3) Financial guarantee contracts that do not belong to the above 1) or
2), and loan commitments that do not belong to the above 1) and lend at a lower than market interest rate; 4)
Financial liabilities measured in amortized cost.
(2) Recognition basis, measurement methods and conditions for derecognition of financial assets and
financial liabilities
However, if the accounts receivable initially recognized by the company do not contain significant financing
components or the company does not consider the financing components in the contract for less than one year, the
initial measurement shall be made according to the transaction price. The initial measurement is made according
to the transaction price defined in Accounting Standards for Business Enterprises No.14-Income.
2) Subsequent measurement methods of financial assets
①Financial assets measured at amortized cost
The actual interest rate method is adopted for subsequent measurement according to amortized cost. Gains or
losses arising from financial assets measured in amortized cost that are not part of any hedging relationship are
included in current profits and losses when derecognition, reclassification, amortization according to the effective
interest rate method, or impairment recognition.
② Debt instruments investment measured at fair value, whose changes are included in other comprehensive
income
Fair value is adopted for subsequent measurement. Interest, impairment losses or gains and exchange gains
and losses calculated by the effective interest rate method are included in the current profits and losses, while
other gains or losses are included in other comprehensive income. Upon termination of recognition, the
accumulated gains or losses previously included in other comprehensive income shall be transferred out of other
comprehensive income and included in current profits and losses.
③ Equity instrument investments measured at fair value, whose changes are included in other
comprehensive income
Fair value is adopted for subsequent measurement. Dividends received (except those that belong to the part
of investment cost recovery) are included in current profits and losses, and other gains or losses are included in
other comprehensive income. Upon termination of recognition, the accumulated gains or losses previously
included in other comprehensive income shall be transferred out of other comprehensive income and included in
retained income.
④ Financial assets measured at fair value and changes included in current profits and losses
The fair value is adopted for subsequent measurement, and the resulting gains or losses (including interest
and dividend income) are included in the current profits and losses unless the financial asset is part of the hedging
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relationship.
3) Subsequent measurement methods of financial liabilities
① Financial liabilities measured at fair value, whose changes are included in current profits and losses
Such financial liabilities include transactional financial liabilities (including derivatives of financial liabilities)
and financial liabilities designated to be measured at fair value, whose changes are included in current profits and
losses. Such financial liabilities are subsequently measured at fair value. Changes in the fair value of financial
liabilities designated to be measured at fair value, whose changes are included in the profits and losses of the
current period due to changes in the company's own credit risk are included in other comprehensive income,
unless such treatment will cause or expand accounting mismatch in profits and losses. Other gains or losses
arising from such financial liabilities (including interest expenses and changes in fair value except for changes in
the company's own credit risk) are included in the current profits and losses unless the financial liabilities are part
of the hedging relationship. Upon termination of recognition, the accumulated gains or losses previously included
in other comprehensive income shall be transferred out of other comprehensive income and included in retained
income.
② Financial liabilities resulting from the transfer of financial assets that do not meet the conditions for
derecognition or continue to be involved in the transferred financial assets
B. Financial assets have been transferred, and the transfer meets the provisions of the Accounting Standards
for Business Enterprises No.23-Transfer of Financial Assets on the derecognition of financial assets.
② When the current obligation of a financial liability (or part thereof) has been discharged, the financial
liability (or part thereof) shall be derecognized accordingly.
(3) Recognition basis and measurement method of financial asset transfer
If the company has transferred almost all risks and rewards in the ownership of financial assets, it shall
terminate the recognition of the financial assets and separately recognize the rights and obligations arising from or
retained in the transfer as assets or liabilities; If almost all risks and rewards on the ownership of financial assets
are retained, the transferred financial assets shall continue to be recognized. If the company neither transfers nor
retains almost all risks and rewards in the ownership of the financial asset, the following situations shall be
handled respectively: 1) If the control over the financial asset is not retained, the recognition of the financial asset
shall be terminated, and the rights and obligations generated or retained in the transfer shall be separately
recognized as assets or liabilities; 2) If the control over the financial assets is retained, the relevant financial assets
shall be recognized according to the extent of continuing involvement in the transferred financial assets, and the
relevant liabilities shall be recognized accordingly.
If the overall transfer of financial assets meets the conditions for derecognition, the difference between the
following two amounts shall be included in the current profits and losses: 1) The book value of the transferred
financial assets on the derecognition date; 2) The sum of the consideration received for the transfer of financial
assets and the amount of the corresponding derecognized portion of the accumulated amount of changes in fair
value originally directly included in other comprehensive income (the financial assets involved in the transfer are
debt instrument investments measured at fair value, whose changes are included in other comprehensive income).
If a part of the financial asset is transferred and the transferred part meets the conditions for derecognition as a
whole, the book value of the financial asset before transfer shall be apportioned between the derecognition part
and the continuing recognition part according to their respective relative fair values on the transfer date, and the
difference between the following two amounts shall be included in the current profits and losses: 1) The book
value of the derecognition part; 2) The sum of the consideration of the derecognized portion and the amount of the
corresponding derecognized portion of the cumulative amount of changes in fair value originally directly included
in other comprehensive income (financial assets involved in transfer are debt instrument investments measured at
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fair value, whose changes are included in other comprehensive income).
(5) Impairment of financial instruments
1) Impairment measurement and accounting treatment of financial instruments
On the basis of expected credit losses, the company carries out impairment treatment on financial assets
measured at amortized cost, debt instrument investments measured at fair value whose changes are included in
other comprehensive income, lease receivables, loan commitments other than financial liabilities classified as
financial liabilities measured at fair value, whose changes are included in current profits and losses, financial
liabilities not measured at fair value, whose changes are included in current profits and losses, or financial
guarantee contracts that are not financial asset transfers which do not meet the conditions for derecognition or
which continue to be involved in financial liabilities formed by transferred financial assets, and recognize loss
provisions.
Expected credit loss refers to the weighted average of the credit losses of financial instruments weighted by
the risk of default. Credit loss refers to the difference between the cash flow of all contracts discounted according
to the original real interest rate and the expected cash flow of all contracts receivable according to the contract,
that is, the present value of all cash shortages. Among them, the Company discounts the financial assets purchased
or originated with credit impairment at the actual interest rate adjusted by credit.
For financial assets purchased or originated that have suffered credit impairment, the company will only
recognize the accumulated changes in expected credit losses during the entire duration since initial recognition as
loss reserves on the balance sheet date.
For accounts receivable that do not contain significant financing components or that the company does not
consider financing components in contracts of not more than one year, the company uses simplified measurement
methods to measure the loss reserve according to the expected credit loss amount equivalent to the entire duration.
For lease receivables and receivables containing significant financing components, the company uses
simplified measurement methods to measure the loss reserve according to the expected credit loss amount
equivalent to the entire duration.
For financial assets other than the above measurement methods, the company evaluates whether its credit risk
has increased significantly since the initial recognition on each balance sheet date. If the credit risk has increased
significantly since the initial recognition, the company shall measure the loss reserve according to the amount of
expected credit loss during the whole duration. If the credit risk has not increased significantly since the initial
recognition, the company shall measure the loss reserve according to the expected credit loss amount of the
financial instrument within the next 12 months.
The company uses the available reasonable and reliable information, including forward-looking information,
to determine whether the credit risk of financial instruments has increased significantly since the initial
recognition by comparing the risk of default on the balance sheet date with the risk of default on the initial
recognition date.
The company evaluates expected credit risks and measures expected credit losses on the basis of individual
financial instruments or combinations of financial instruments. When based on the combination of financial
instruments, the company divides financial instruments into different combinations based on common risk
characteristics.
For financial assets measured in amortized cost, the loss reserve shall be offset against the book value of the
financial assets listed in the balance sheet; For creditor's rights investments measured at fair value, whose changes
are included in other comprehensive income, the company recognizes its loss reserve in other comprehensive
income, which does not offset the book value of the financial asset.
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(2) Financial instruments for assessing expected credit risks and measuring expected credit losses by
combination
Items Basis for determining combination Methods of measuring expected credit loss
Other receivables-associated Taking related parties within the scope
transaction combinations within the of consolidated financial statements as
Refer to the historical credit loss experience,
scope of consolidated financial credit risk characteristics, other
combine the current situation with the forecast of
statements receivables are combined
future economic situation, and calculate the
Taking aging as the credit risk
expected credit loss through default risk exposure
characteristic, combine other
and the expected credit loss rate within the next 12
Other receivables-aging combination receivables except the related party
months or the whole duration.
receivables within the scope of the
consolidated financial statements
(3) Expected credit risks and measuring expected credit losses by combination
1) Methods of specific combination and measurement of expected credit loss
Items Basis for determining combination Methods of measuring expected credit loss
Bank acceptance bills receivable Refer to the historical credit loss experience,
combine the current situation and the forecast of
the future economic situation, compile a
comparison table between the aging of accounts
Commercial acceptance bills Bill type
receivable and the expected credit loss rate during
receivable
the whole duration, and calculate the expected
credit loss.
Refer to the historical credit loss experience,
combine the current situation and the forecast of
Accounts receivable-associated Taking related parties within the scope of
the future economic situation, compile a
transaction combinations within the consolidated financial statements as credit
comparison table between the aging of accounts
scope of consolidated financial risk characteristics, receivables are
receivable and the expected credit loss rate during
statements combined
the whole duration, and calculate the expected
credit loss.
Refer to the historical credit loss experience,
Taking aging as the credit risk combine the current situation and the forecast of
Accounts receivable-aging characteristic, combine receivables except the future economic situation, compile a
the related party receivables within the comparison table between the aging of accounts
combination scope of the consolidated financial receivable and the expected credit loss rate during
statements the whole duration, and calculate the expected
credit loss.
Contract assets——a Taking aging as Taking aging as the credit risk Refer to the historical credit loss experience,
the credit risk characteristic, combine characteristic, combine receivables except combine the current situation and the forecast of
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receivables except the related party the related party receivables within the the future economic situation, compile a
receivables within the scope of the scope of the consolidated financial comparison table between the aging of accounts
consolidated financial statements aging statements receivable and the expected credit loss rate during
combination the whole duration, and calculate the expected
credit loss.
2) Account receivable、Contract assets——Table of Aging of Aging Combination and Expected Credit Loss
Rate for the Whole Duration
Aging Receivable receivable/contract assets Expected credit loss rate (%)
Within 1 year (inclusive, the same below) 5.00
1-2 years 10.00
2-3 years 30.00
3-4 years 60.00
4-5 years 80.00
Over 5 years 100.00
(6) Setoff of Financial Assets and Liabilities
The financial assets and liabilities of the company are shown separately in the balance sheet which do not
offset each other. However, when the following conditions are met at the same time, the net amount after mutual
offset is shown on the balance sheet. 1. The company has the legal right to offset the recognized amount, and this
legal right is currently enforceable. 2. The company plans to settle the financial assets or liquidate the financial
liabilities at the same time for netting settlement.
If the transfer of financial assets does not meet the conditions for the termination of recognition, the company
shall not set off the transferred financial assets and related liabilities.
11.Notes receivable
For details, please refer to Section XII(5)-10 Financial instrument of this report.
12.Account receivable
For details, please refer to Section XII(5)-10 Financial instrument of this report.
13. Financing of receivables
For details, please refer to Section XII(5)-10 Financial instrument of this report.
14.Other account receivable
Methods for determining expected credit losses of other receivables and accounting treatment
For details, please refer to Section XII(5)-10 Financial instrument of this report.
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15.Inventories
(1) Inventory classification
Inventories include saleable finished goods or merchandise, product-in-process , consumption material and goods
in manufacturing procedure or working procedure.
(2) Pricing of inventory to be delivered
Delivered out materials are accounted by weighted average method, issued out finished products are accounted at
individual price.
(3) Recognition of realizable net value of inventory and providing of inventory impairment provision
At the balance sheet day, inventories are measured at the lower of costs and cashable net values, the individual
difference between the cashable net value and cost are provided as inventory impairment provision. For finished
product, merchandise, saleable material and other saleable merchandise inventory, their cashable net values are
recognized by their estimated sale price in normal operation deducting estimated sale expenses and related taxes;
for material inventory which need processing, it cashable net value are recognized by the estimated sale prices of
its finished products in normal operation deducting the estimated cost, sale expenses and related taxes due to the
end of processing; At the balance sheet day, for inventory item which part has contract price and part has no
contract price, the cashable net value is accounted separately, and recognize the inventory impairment provision
or returnable cash..
(4) Inventory system
Inventory system: perpetual inventory system
(5) Amortization of low-value consumables and packaging materials
1.Low price consumable
Basis of amortizing: one-off
2.Packaging materials
Basis of amortizing: one-off
16.Contract assets
According to the relationship between performance obligation and customer payment, the company lists
contract assets or contract liabilities in the balance sheet. The company will offset the contractual assets and
contractual liabilities under the same contract and list them in net amount.
The company lists the right to receive consideration from customers unconditionally (that is, only depending
on the passage of time) as receivables, and lists the right to receive consideration after transferring goods to
customers (which depends on factors other than the passage of time) as contract assets.
The Company's obligation to transfer goods to customers for received or receivable consideration from
customers is listed as a contractual liability.
17.Constract cost
None
18.Held-for-sale asset
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None
19.Creditor's rights investment
None
20.Other Creditor's rights investment
None
21.Long-term account receivable
None
22. Long-term equity investment
1. Recognition of common control and substantial influence
According to the contract, if the invested enterprise’s main finance and operation policy need to be agreed by the
other investing party, the investment is common control investment; if only have participating decision rights in
invested enterprise’s main finance and operation policy but have no own control or common control with other
investing part, the investment is investment with substantial influence.
2. Recognition of initial investment costs
(1) For the long-term equity investment formed by corporate merger under common control, if it is the long-term
equity investment obtained from the corporate merger by paying cash, transferring non-cash asset, bear liability
and issuing equity securities, the share of book value of owner's equity of the merged party on the merger date
shall be taken as the initial investment cost. The asset reserve is adjusted according to the difference between the
initial investment cost of long-term equity investment and the book value of paid combined consideration or
issued securities; if the capital is not enough for deduction, the remain earnings are adjusted.
Recognition of “one-off” trade when long-term equity investment is composed by merger of entities under
common control by multiple steps.
Transactions under an “one-off” trade are accounted as a common trade of ownership.
Transactions which are not “one-off” trades are recognized for their initial investment cost basing on the share of
book value of net asset in the consolidated financial statement of the entities acquired. Balance between the initial
investment cost and the book value of the long-term equity investment before merger and the premium paid for
the new shares after merger, is adjusted to capital reserves; when the capital reserve is not enough to offset,
retained profit shall be adjusted thereof.
(2) For the long-term equity investments formed by merger of enterprises under different control, the initial
investment cost is recognized by the fair value of combined consideration on purchasing day and related expenses.
Long-term equity investment formed by acquisition of entities under different control by trade in multiple stages
are accounted separately in the financial statements and consolidated financial statements.
1) In individual financial account, the sum of book value of original equity investment plus new investment cost is
recognized as the initial investment cost on cost basis.
2) Recognition of “one-off” trade in consolidated financial statements
Transactions under an “one-off” trade are accounted as a common trade of ownership. Transactions which are not
“one-off” trades are re-measured for their fair value at the day of acquisition. Balance between the fair value and
the book value of the long-term equity investment is adjusted to current investment gains; other gains from equity
on equity basis before the acquisition day are written over to current gains of at the day of acquisition, but not the
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gains from re-calculating of changes in net liability or asset by the invested entity.
(3) Formed by means other than entity merger:
Acquired by cash payment – initial investment cost is the actual amount of payment;
Acquired by issuing of equity certificates – initial investment cost is the fair value of equity certificate issued;
Acquired by debtor restructuring – initial cost recognized as according to the Enterprise Accounting Standard
No.12 – Debtor restructuring;
Acquired by trading of non-monetary asset - initial cost recognized as according to the Enterprise Accounting
Standard No.7 – Trade of non-monetary assets;
3. Subsequent measurement and recognition of gain/loss
Cost basis is adopted in accounting of long-term equity investment in entities under substantial control of the
Company; while equity basis is adopted in accounting of investment in affiliates and joint-ventures.
4. Treatment of disposal of subsidiaries by stages till losing of control power
(1) Individual account
The difference between the book value and the actual purchase price of the disposed equity is recorded into the
current profit and loss. With regard to the remaining equity, which still has a significant impact on the invested
entity or exercises joint control with other parties, it shall be converted to equity accounting; if the entity under
investment can no longer be controlled, jointly controlled or significantly affected, it shall be recognized as a
financial asset, Accounting shall be carried out in accordance with the relevant provisions of Accounting
Standards for Enterprises No. 22-recognition and Measurement of Financial Instruments.
(2) Basis of Consolidated Financial Statements
1) Losing of controlling power on a subsidiary through disposal of equity by multiple trades, and not recognized
as “one-off” trade:
Before losing of control power, the balance of disposal consideration and the share of net asset attributable to the
Company on continued basis since purchasing or merger, is adjusted to capital reserves (capital premium),
whereas if the capital premium is not enough to offset the amount, retained profit will be offset at corresponding
amount.
At losing of control power over a former subsidiary, the retained equity shares shall be re-calculated according to
the fair value at the day of losing power. Sum of the consideration obtained from disposal and fair value of the
retained equity shares, less the share of net asset attributable to the Company on continued basis since purchasing
or merger, is accounted into investment gains of the period when the control power is disposed, and goodwill shall
be offset meanwhile. Other gains related to the equities in formal subsidiary shall be written over to current
investment gains at the period when control power was disposed.
2) Losing of controlling power on a subsidiary through disposal of equity by multiple trades, and recognized as
“one-off” trade:
The multiple trades are treated as one trade that causes losing of control power on a subsidiary. However, the
balance between the consideration received from each trade and corresponding share of net asset is recognized as
other gains in the consolidated accounts, and transferred collectively to gain/loss account of the period in which
the control power was lost.
23. Investment property
The measurement mode of investment property
Not applicable
24. Fixed assets
1. Conditions for fixed asset recognition
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Fixed assets is defined as the tangible assets which are held for the purpose of producing goods, providing
services, lease or for operation & management, and have more than one year of service life. Fixed assets are
recognized at satisfying of great possibility of benefit inflow and costs are accountable.
2. Depreciation
Categories Basis of depreciation Depreciation age (year) Retain value rate Annual depreciation ratio
Straight average on
Houses & buildings 20-30 4 4.8-3.2
period
Straight average on
Equipment & machinery 8-15 4 12-6.4
period
Straight average on
Transportation equipment 4-8 4 24-12
period
Straight average on
Office equipment 5 4 19.2
period
（3）Recognition basis, valuation and depreciation method for financing leased fixed assets
25. Construction in process
1. Construction in process is recognized on the basis of characteristics: very possible economic benefit flow in,
cost can be measured reliably. Since the date when the construction in process reaches its useful status as expected,
the construction in process is measured by the happened cost Since the date when the construction in process
reaches its useful status as expected.
2. When the construction in process reaches its useful status as expected, it is transferred into fixed asset at actual
cost. If the construction in process has reached useful status but with completion of project settlement process, it is
transferred to fixed asset at the value estimated, and adjustment will happen after completion of project settlement
process but no adjustment on depreciation provided previously.
26. Loan expenses
1. Capitalizing of loan expenses
Loan expenses occurred in the Company, which can be categorized to purchasing or construction of assets
satisfying the conditions of capitalization, shall be capitalized and accounted into capital costs; while other loan
expenses are recognized as expenses and recorded into current income account.
2. Capitalization period of loan expenses
(1) Capitalization started as soon as all of these conditions are satisfied: 1) Capital expenditures have occurred; 2)
Loan expenses have occurred; 3) Necessary purchasing or construction processes have been started to make the
asset usable or sellable.
(2) If irregular interruption occurred in the purchasing or construction process of the assets satisfying the
capitalizing conditions, and suspended for over successive three months, capitalizing of loan expenses is
suspended; loan expenses occurred during the suspension period are recognized as current expenses until the
purchasing or construction process resumes.
(3) Capitalizing of loan expenses is terminated as soon as the asset satisfying the capitalizing conditions reaches
the state of usable or sellable as expected.
3. Rates and amounts of loan expense capitalization
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Special loans raised for purchasing or construction of assets satisfying the conditions of capitalization, interest to
be capitalized will be the actual interest expenses occurred in the current period of loan (including the discount,
premium, or amortizing decided on actual interest rate basis), less the interest income from the unused loans in
bank account or provisional investment gains; common loans used for purchasing or construction of assets
satisfying the conditions of capitalization, the interest to be capitalized will be the weighted average of balance
over special loans multiply capitalization rate of common loans.
27. Biological assets
None
28. Oil-gas assets
None
29. Assets of the right to use
None
30. Intangible assets
（1）Pricing Method, service life and impairment test
1. Intangible assets are land using rights, patents, and non-patent technologies, which are measured at cost basis.
2. For intangible assets with limited useful life, during the use life it is amortized according to the anticipating
implementation method of the economic benefit of the intangible asset systematically and reasonably. If can’t
recognize the anticipating implementation method, the straight basis is deployed.
Items Amortiing years
Land using right 50
Patent 5-20
Software 5
(2) Accounting policy for internal research and development expenditure
Expenditures of internal researching projects are accounted into current term gain and loss when happens. The
development period expenditures are recognized as intangible assets when fulfill following conditions: (1) The
intangible asset is completed and technically possible to be used or sold; (2) With intention to complete the
intangible asset for purpose of use or sale; (3) Evidence showing that there are markets or the products produced
with using of the intangible asset, or markets of the intangible asset itself, by which the intangible asset may
produce financial benefits. Intangible assets used inside the Company must be approved for their usable characters.
(4) Developing of the intangible assets are supported by sufficient technical, financial, and other resources, and
the intangible assets can be used or sold. (5) Expenditures occurred in developing of the intangible asset may be
reliably measured.
31. Impairment of partial long-term assets
For those long-term assets such as equity investment, fixed assets measured on cost basis, construction-in-process,
intangible assets with limited service life, their recoverable amount shall be evaluated as soon as there was
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evidence indicating impairment at the balance sheet day. For intangible assets such as goodwill from merger or
intangible assets with uncertain service lives, impairment test is performed each year whatever there is evidence of
impairment or not. Impairment test on goodwill is performed on combination of related assets.
When the result of prediction shows that the recoverable amount is lower than its book value, the balance shall be
provided impairment provision and accounted into current gain/loss.
32. Long-term amortizable expenses
None
33.Constract Liabilities
For details, please refer to Section XII, V 16 Contract Assets of this report.
34. Employees’ wage
1. Accounting of short-term wages
In the fiscal period when an employee is providing services, short-term wages actually occurred is recognized as
liability, and recorded into current gain/loss account or cost of related asset.
2.Accounting of stipulated beneficiary plan is on following steps:
1) On basis of expected accumulation of welfare, estimations on population variables and financial variables,
calculating of liabilities from stipulated beneficiary plan, and recognition of the period of related liabilities, are
performed on basis of non-bias and accordance actuary. Meanwhile, discount is performed on the liabilities from
stipulated beneficiary plan to recognize the current value and service cost of the liabilities from the stipulated
beneficiary plan.
2) When there is asset involved in the stipulated beneficiary asset, the deficit or premium from the balance of the
current value of liabilities of stipulated beneficiary plan over their fair values is recognized as its net liability or
net asset. When there is a premium with a stipulated beneficiary plan, the lower one between the premium and the
upper limit of the asset is recognized as the net asset of such stipulated beneficiary asset;
3) At end of period, employees’ wages from stipulated beneficiary plan are recognized by three parts including
service cost, net interest of net liability or net asset, and recalculated net asset or liability variation. The first two
are recorded into current gain/loss or related asset cost, the third is recorded to other gains, which will not be
written back to gain/loss in successive fiscal periods, but the amount can be transferred with the range of equity.
3. Accounting of dismissing welfare
Welfares for employees who are dismissed, the earlier one of the following is recognized as employee wage
liability, and recorded to current gain /loss:
(1) When the Company cannot, on its own call only, retrieve the dismissing welfare provided by dismissing of
service plan or suggestion;
(2) When the costs or expenses related to restructuring involved in the dismissing welfare are recognized by the
Company.
4. Accounting of other long-term employees’ welfares
As of long-term welfares provided to the employees, those which satisfy conditions of the stipulated saving plan
are treated according to related regulations of stipulated saving plan; those which other than the aforesaid, are
treated according to the stipulated beneficiary plan. In viewing of simplifying accounting treatment, employee
wage costs are recognized as service costs, the net amounts of interests of other long-term welfare net liability or
asset, along with recalculated variations of the both are recorded to the related gain/loss or cost of related asset.
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35. Lease liabilities
None
36. Expected liabilities
(1) When it is very much likely to cause economic interests which can be reliably calculated outflow from
the company to fulfill the obligation which is due to giving security outside, contentious matter, quality guarantee
of products, onerous contract and other contingency, the company will regard the obligation as anticipation
liabilities.
(2) The company will make an initial measurement of anticipation liabilities according to needed expense
of best estimation when fulfilling related obligations and check the book value of anticipation liabilities on the
balance sheet date.
37.Share-based Payment
None
38 . Other financial instruments such as preferred shares and perpetual capital securities
None
39.Revenues
Accounting policies used for revenue recognition and measurement
1. Recognizing of revenue
Since the starting date of the contract, the company shall evaluate the contract, identifies each individual
performance obligation contained in, and determines whether each individual performance obligation is
performed within a certain period of time or at a certain point of time.
The performance obligation is defined as fulfillment within a certain period of time if one of the following
conditions is met, otherwise, it is defined as fulfilled at a certain point in time: (1) The customer obtains and
consumes the economic benefits brought by the company's performance while the company performs the contract;
2) The customer can control the goods under manufacturing or services during the company's performance; (3)
The goods or services produced during the company's performance have irreplaceable uses, and the company has
the right to accumulate for the completed performances during the entire contract period.
For obligations performed within a certain period of time, the company recognizes revenue in accordance
with the performance progress in that period. If the performance progress cannot be reasonably determined, and
the cost incurred is expected to be compensated, the revenue shall be recognized according to the amount of the
cost incurred until the performance progress can be reasonably determined. For obligations performed at a certain
point in time, revenue shall be recognized at the point when the customer obtains control of the relevant goods or
services. When judging whether the customer has obtained control of the product, the company shall consider the
following points: (1) The company has the current right to receive payment for the product, that is, the customer
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has the current payment obligation for the product; (2) The company has transferred the legal ownership of the
product to the customer, that is, the customer has the legal ownership of the product; (3) The company has
transferred the physical product to the customer, that is, the customer has physically taken possession of the
product; (4) The company has transferred the main risks and rewards on the ownership of the product to the
customer, that is, the customer has obtained the main risks and rewards on the ownership of the product; (5) the
customer has accepted the product; (6) other signs that the customer has obtained control of the product.
2. Principle of income measurement
(1) The company shall measure revenue based on the transaction price allocated to each individual
performance obligation. The transaction price is the amount of consideration that the company expects to be
entitled to receive due to the transfer of goods or services to customers, while does not include payments received
on behalf of third parties and payments expected to be returned to customers.
(2) If there is variable consideration in the contract, the company shall determine its best estimate according to
the expected value or the most likely amount, but the transaction price including the variable consideration shall
not exceed the accumulated amount that, if relevant uncertainty is eliminated, will most likely have no significant
reversal.
(3) If there is any significant financing component in the contract, the company shall determine the
transaction price based on the amount payable in cash when the customer assumes control of the goods or services.
The difference between transaction price and contract consideration shall be amortized through effective interest
method during the contract period. (4) If the contract contains two or more performance obligations, the company
shall, on date of the contract, allocate the transaction price to each individual obligation item in accordance with
the relative proportion of the separate selling price of promised goods.
3. Specific methods of revenue recognition
The company's selling of steam turbines, gas turbine or spare parts shall belong to the performance of
obligation at a certain point in time.
Domestic sales revenue is recognized when the Company has delivered the product in accordance with the contrac
t and obtained the receipt confirmed by the purchaser, with received the payment or obtained the right to receive p
ayment and the relevant economic benefits are likely to flow in. Export sales revenue is recognized when the Com
pany has declared the product in accordance with the contract and obtained the export goods declaration form and
the bill of lading, with received the payment or obtained the right to receive payment and the relevant economic b
enefits are likely to flow in.
The adoption of different business models in similar businesses leads to differences in accounting policies for
revenue recognition
40. Government subsidy
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1. Government subsidies are recognized while they meet the following conditions at the same time: (1) the
Company can meet the conditions attached to the government subsidies; (2) the Company can receive government
subsidies. Where government subsidies are monetary assets, they shall be measured by the amount received or
receivable. Where government subsidies are non-monetary assets, they shall be measured by the fair value; if the
fair value cannot be reliably obtained, they shall be measured by the nominal amount.
2. Recognition basis and accounting of asset-related government subsidy
Government subsidies used for formation of long-term assets through purchase, construction or any other
method as stipulated by government documents fall into the category of asset-related government subsidies. If
government subsidies are not defined in the government documents, a judgment shall be made on the ground of
essential conditions for obtaining the subsidies, among which, ones with an essential condition of formation of
long-term assets through purchase, construction or any other method shall be asset-related government subsidies.
For government subsidies related to assets, the book value of the relevant assets is deducted or the deferred
income is recognized. Where such subsidies are recognized as deferred income, the relevant assets shall, within
the useful life of the relevant assets, be reasonably recognized, The method of the system shall be recorded into
profit and loss by stages. The government subsidy measured according to the nominal amount shall be directly
accounted for in the profits and losses of the current period. Where the relevant assets are sold, transferred,
scrapped or damaged before the end of their useful life, Transfer the undistributed balance of deferred income to
the current profit or loss of asset disposal.
3. Recognition basis and accounting of income-related government subsidy
A government subsidy other than an asset-related government subsidy is divided into profit-related government
subsidies. It is difficult to distinguish between asset-related and revenue-related government subsidies that include
both asset-related and revenue-related components. Overall classification as government subvention related to
income. Than asset-related subsidies are recognized as income-related government subsidies. Those, which are
used to cover costs or losses in subsequent periods, are recognized as deferred income and accounted to current
gain/loss to the periods of related expenses. Those, which are used to makeup expenses or losses already occurred,
are recorded to current gain/loss account.
4. Government subsidies related to routine business activities of the Company shall be included into other incomes
or offset relevant costs and expenses by nature of economic business. Government subsidies irrelevant to routine
activities of the Company shall be included into the non-operating receipt and disbursement.
5. Accounting treatment method for interest subsidies for policy-based preferential loans
(1) If the finance allocates interest subsidy funds to a lending banks that serves a loan to the Company at a
policy-based preferential rate, the actual debit amount received shall be seen as the entry value of loan and relevant
loan costs shall be worked out pursuant to the loan principal and the policy-based preferential rate.
(2) If the finance directly allocates interest subsidy funds to the Company, corresponding interest subsidies
shall offset relevant loan costs.
41. Deferred income tax assets/ deferred income tax liabilities
1. Deferred income tax liabilities or assets are recognized at proper rate in the term of retrieving the assets or
paying the liabilities according to difference (for not recognized assets and liabilities which tax basis can be
recognized, the difference is between the tax basis and the book value) between book value of the assets or
liabilities and the tax basis.
2. Deferred income tax assets are recognized limitedly by the income tax which very possibly deduct deductible
temporary difference. At balance sheet day, the not-yet recognized deferred income tax assets in previous fiscal
term are recognized if have evidence to prove there is enough income tax very possibly to deduct deductible
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
temporary difference.
3. At the balance sheet day, verification will be performed on the book value of differed income tax assets. If it is
not possible to obtain enough taxable income to neutralize the benefit of differed income tax assets, then the book
value of the differed income tax assets shall be reduced. Whenever obtaining of taxable income became possible,
the reduced amount shall be restored.
4. Current income tax and differed income tax are accounted into current gain/loss account as income tax
expenditures or gains, but exclude the following income taxes: (1) Merger of enterprises; (2) Transactions or
events recognized directly in owners’ equity.
42. Lease
(1)Accounting of operational lease
When the Company is the leasee, the amount is recorded to asset cost or recognized as gain/loss of current period
on straight basis to the periods of lease. Initial direct expenses are accounted into current gain/loss. Contingent
rentals are recorded to current gain/loss at actual occurrence.
When the Company is the leaser, the amount is recorded to current gain/loss at straight basis to the periods of
lease. Initial direct expenses are recorded to current gain/loss other than those with greater amount which are
capitalized and recorded to gain/loss of different periods. Contingent rentals are recorded to current gain/loss at
actual occurrence.
(2) Accounting Method for Financing Leases
43. Other significant accounting policies and estimates
Work safety costs
The Company withdraws and includes work safety costs into relevant product costs or current profits and loss and
the subject of "special reserve" as per Measures for Management of Enterprise Withdrawal and Use of Work Safety
Costs (Cai Qi [2012] No.16) jointly promulgated by Ministry of Finance and State Administration of Work Safety.
As work safety costs withdrawn are used, ones attributable to the cost disbursement shall directly offset special
reserve. To form fixed assets, the disbursement incurred for inclusion into the subject of "construction in progress"
shall be recognized as fixed assets when safety projects are completed and available for use as expected; meanwhile,
costs for forming fixed assets shall offset special reserve, cumulative depreciation in the corresponding amount shall
be recognized and depreciation shall no longer be withdrawn for the fixed assets in the following period.
44.Change of main accounting policies and estimations
(1)Change of main accounting policies
√ Applicable □ Not applicable
Contents and causes of changes in accounting policies Approval procedure Remarks
The company will, since January 1, 2020, implement the "Accounting Standards The fourth resolution of the eighth
for Business Enterprises No. 14-Revenue" revised by the Ministry of Finance meeting of board of directors
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
(hereinafter referred to as the new revenue standards). In accordance with relevant
regulations for convergence of the old and new standards, the comparable period
information is not adjusted, and the cumulative impact from new standards on the first
implementation date is retrospectively adjusted to the amount of retained earnings and
other related items in the financial statements at the beginning of the reporting period.
Since January 1, 2020, the company has implemented the Interpretation of Accounting
Standards for Business Enterprises No.13 promulgated by the Ministry of Finance in
2019, and this accounting policy change is handled by the future applicable law.
1. The company will, since January 1, 2020, implement the "Accounting Standards for Business Enterprises
No. 14-Revenue" revised by the Ministry of Finance (hereinafter referred to as the new revenue standards). In
accordance with relevant regulations for convergence of the old and new standards, the comparable period
information is not adjusted, and the cumulative impact from new standards on the first implementation date is
retrospectively adjusted to the amount of retained earnings and other related items in the financial statements at
the beginning of the reporting period.
The main impacts of implementing the new income standards on the financial statements of the company on
January 1, 2020 are as follows:
Items Balance sheet
December 31,2019 Adjustment impact of new January 1,2020
income standards
Account receivable 2,025,081,342.74 -545,043,494.83 1,480,037,847.91
Contract assets 545,043,494.83 545,043,494.83
Advance receipts 2,818,130,397.17 -2,818,130,397.17
Contract Liabilities 2,496,129,669.77 2,496,129,669.77
Other current Liabilities 322,000,727.40 322,000,727.40
2. Since January 1, 2020, the company has implemented the Interpretation of Accounting Standards for
Business Enterprises No.13 promulgated by the Ministry of Finance in 2019, and this accounting policy change is
handled by the future applicable law.
(2) Change of main accounting estimations
□ Applicable √ Not applicable
（3）Adjustments to the Financial Statements at the Beginning of the First Execution Year of any New
Standards Governing Financial Instruments, Revenue or Leases from year 2020
□ Applicable √ Not applicable
Whether need to adjust the balance sheet account at the beginning of the year
√ Yes □ No
Consolidated balance sheet
In RMB
Items December 31,2019 January 1,2020 Amount involved in the
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
adjustment
Current asset：
Monetary fund 1,756,320,237.50 1,756,320,237.50 -
Settlement provision -
Outgoing call loan -
Transactional financial assets 854,210,990.44 854,210,990.44 -
Derivative financial assets -
Notes receivable 46,484,259.65 46,484,259.65 -
Account receivable 2,025,081,342.74 1,480,037,847.91 -545,043,494.83
Financing of receivables 680,279,893.94 680,279,893.94 -
Prepayments 388,562,447.80 388,562,447.80 -
Insurance receivable -
Reinsurance receivable -
Provisions of Reinsurance -
contracts receivable
Other account receivable 45,520,789.89 45,520,789.89 -
Including：Interest receivable -
Dividend receivable 27,827,292.60 27,827,292.60 -
Repurchasing of financial -
assets
Inventories 2,051,290,269.07 2,051,290,269.07 -
Contract assets 545,043,494.83 545,043,494.83
Assets held for sales -
Non-current asset due within -
1 year
Other current asset 71,592,063.09 71,592,063.09 -
Total of current assets 7,919,342,294.12 7,919,342,294.12 -
Non-current assets
Loans and payment on -
other’s behalf disbursed
Creditor' rights investment -
Other creditor's rights -
investment
Long-term receivable -
Long term share equity 22,129,585.83 -
22,129,585.83
investment
Other equity instruments 2,490,376,886.96 2,490,376,886.96 -
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
investment
Other non-current financial 142,244,014.16 -
142,244,014.16
assets
Property investment -
Fixed assets 724,702,558.18 724,702,558.18 -
Construction in progress 799,410,358.84 799,410,358.84 -
Production physical assets -
Oil & gas assets -
Use right assets -
Intangible assets 275,140,367.22 275,140,367.22 -
Development expenses -
Goodwill -
Long-germ expenses to be -
amortized
Deferred income tax asset 226,769,514.65 226,769,514.65 -
Other non-current asset -
Total of non-current assets 4,680,773,285.84 4,680,773,285.84 -
Total of assets 12,600,115,579.96 12,600,115,579.96 -
Current liabilities
Short-term loans 97,840,187.21 97,840,187.21 -
Loan from Central Bank -
Borrowing funds -
Transactional financial -
liabilities
Derivative financial liabilities -
Notes payable 227,961,541.12 227,961,541.12 -
Account payable 1,030,408,716.74 1,030,408,716.74 -
Advance receipts 2,818,130,397.17 0.00 -2,818,130,397.17
Contract liabilities 2,496,129,669.77 2,496,129,669.77
Selling of repurchased -
financial assets
Deposit taking and interbank -
deposit
Entrusted trading of -
securities
Entrusted selling of securities -
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Employees’ wage payable 96,205,949.57 96,205,949.57 -
Tax payable 34,521,756.98 34,521,756.98 -
Other account payable 82,148,405.19 82,148,405.19 -
Including：Interest payable -
Dividend payable -
Fees and commissions -
payable
Reinsurance fee payable -
Liabilities held for sales -
Non-current liability due 200,319.30 -
200,319.30
within 1 year
Other current liability 322,000,727.40 322,000,727.40
Total of current liability 4,387,417,273.28 4,387,417,273.28 -
Non-current liabilities：
Reserve fund for insurance -
contracts
Long-term loan 22,435,762.23 22,435,762.23 -
Bond payable -
Including：preferred stock -
Sustainable debt -
Lease liability -
Long-term payable 730,460,508.59 730,460,508.59 -
Long-term remuneration -
payable to staff
Expected liabilities 32,202,504.57 32,202,504.57 -
Deferred income 51,713,417.61 51,713,417.61 -
Deferred income tax liability 316,910,472.07 316,910,472.07 -
Other non-current liabilities -
Total non-current liabilities 1,153,722,665.07 1,153,722,665.07 -
Total of liability 5,541,139,938.35 5,541,139,938.35 -
Owners’ equity -
Share capital 754,010,400.00 754,010,400.00 -
Other equity instruments -
Including：preferred stock -
Sustainable debt -
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Capital reserves 152,973,219.65 152,973,219.65 -
Less：Shares in stock -
Other comprehensive income 1,784,195,156.34 1,784,195,156.34 -
Special reserve 18,324,473.28 18,324,473.28 -
Surplus reserves 621,112,807.78 621,112,807.78 -
Common risk provision -
Retained profit 3,276,880,091.53 3,276,880,091.53 -
Total of owner’s equity 6,607,496,148.58 -
6,607,496,148.58
belong to the parent company
Minority shareholders’ equity 451,479,493.03 451,479,493.03 -
Total of owners’ equity 7,058,975,641.61 7,058,975,641.61 -
Total of liabilities and 12,600,115,579.96 -
12,600,115,579.96
owners’ equity
Parent Company Balance Sheet
In RMB
Amount involved in the
Items December 31,2019 January 1,2020
adjustment
Current asset：
Monetary fund 1,017,072,165.81 1,017,072,165.81
Transactional financial assets 532,040,990.44 532,040,990.44
Derivative financial assets
Notes receivable 4,712,981.35 4,712,981.35
Account receivable 1,470,224,608.96 1,080,500,893.98 -389,723,714.98
Financing of receivables 376,974,822.75 376,974,822.75
Prepayments 222,187,452.27 222,187,452.27
Other account receivable 31,067,688.80 31,067,688.80
Including：Interest receivable
Dividend receivable 27,827,292.60 27,827,292.60
Inventories 1,402,933,995.29 1,402,933,995.29
Contract assets 389,723,714.98 389,723,714.98
Assets held for sales
Non-current asset due within
1 year
Other current asset 30,332,464.25 30,332,464.25
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Total of current assets 5,087,547,169.92 5,087,547,169.92
Non-current assets：
Creditor's rights
investment
Other Creditor's rights
investment
Long-term receivable
Long term share equity
897,978,418.75 897,978,418.75
investment
Other equity instruments
2,490,376,886.96 2,490,376,886.96
investment
Other non-current financial
119,345,893.13 119,345,893.13
assets
Property investment
Fixed assets 413,089,308.63 413,089,308.63
Construction in progress 246,387,266.69 246,387,266.69
Production physical assets
Oil & gas assets
Use right assets
Intangible assets 161,688,374.81 161,688,374.81
Development expenses
Goodwill
Long-germ expenses to be
amortized
Deferred income tax asset 174,060,251.09 174,060,251.09
Other non-current asset
Total of non-current assets 4,502,926,400.06 4,502,926,400.06
Total of assets 9,590,473,569.98 9,590,473,569.98
Current liabilities
Short-term loans
Transactional financial
liabilities
Derivative financial liabilities
Notes payable 10,000,000.00 10,000,000.00
Account payable 623,426,940.99 623,426,940.99
Advance receipts 1,908,382,258.12 -1,908,382,258.12
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Contract Liabilities 1,690,479,456.21 1,690,479,456.21
Employees’ wage payable 49,620,330.21 49,620,330.21
Tax payable 3,776,368.66 3,776,368.66
Other account payable 54,954,443.47 54,954,443.47
Including：Interest payable
Dividend payable
Liabilities held for sales
Non-current liability due
within 1 year
Other current liability 217,902,801.91 217,902,801.91
Total of current liability 2,650,160,341.45 2,650,160,341.45
Non-current liabilities：
Long-term loan
Bond payable
Including：preferred stock
Sustainable debt
Lease liability
Long-term payable 545,357,990.20 545,357,990.20
Long-term remuneration
payable to staff
Expected liabilities 32,202,504.57 32,202,504.57
Deferred income 50,316,362.61 50,316,362.61
Deferred income tax liability 316,910,472.07 316,910,472.07
Other non-current liabilities
Total non-current liabilities 944,787,329.45 944,787,329.45
Total of liability 3,594,947,670.90 3,594,947,670.90
Owners’ equity
Share capital 754,010,400.00 754,010,400.00
Other equity instruments
Including：preferred stock
Sustainable debt
Capital reserves 138,953,250.09 138,953,250.09
Less：Shares in stock
Other comprehensive income 1,784,509,419.91 1,784,509,419.91
Special reserve 6,000,000.00 6,000,000.00
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Surplus reserves 602,356,402.65 602,356,402.65
Retained profit 2,709,696,426.43 2,709,696,426.43
Total of owners’ equity 5,995,525,899.08 5,995,525,899.08
Total of liabilities and
9,590,473,569.98 9,590,473,569.98
owners’ equity
（4）Retrospective Restatement of Previous Comparative Data due to the First Execution of any New
Standards Governing Financial Instruments or Leases from year 2020
□ Applicable √ Not applicable
45.Other
VI. Taxation
1. Main categories and rates of taxes
Category of taxes Tax base Tax rate
The output tax is calculated on the basis of
the income from sales of goods and taxable
services calculated according to the
VAT provisions of the tax law. After deducting 13%，6%
the input tax allowed to be deducted in the
current period, the difference is the VAT
payable
City maintenance and construction tax Turnover tax payable 5%，7%
Enterprise income tax Amount of income taxable 15%，20%，25%
For those on price basis, taxes are paid at
1.2% of the balance of original value of the
House tax property after deducting of 30%; for those 1.2%，12%
on rental basis, taxes are paid at 12% of the
rental.
Educational surcharge Turnover tax payable 3%
Local education additional Turnover tax payable 2%
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Name Income tax rate
The Company , Zhongneng Company, Packaged Tech. Company,Casting Company, 15%
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Zhejiang Huayuan Steam Turbine Machinery Co.,Ltd. and Hangzhou Guoneng Steam
Turbine Engineering Co.,Ltd.
Kunming Hangzhong Steam Turbine Power Technology Service C., Ltd., Guangxi
Hangzhong Steam Turbine Technology Service Co., Ltd., Tangshan Hangneng Steam
Turbine Power Service Co., Ltd.,Jilin Hangzhong Steam Turbine Technology Service
20%
Co., Ltd., Chengdu Hangzhongneng Technology Co., Ltd.,Urumqi Hangzhong Steam
Turbine Technology Service Co., Ltd. and Luoyang Hangqi Steam Turbine Technology
Service Co., Ltd.
Hangzhou Zhongneng Steam Turbine
Power (Indonesia) Co., Ltd. registered in
Hangzhou Zhongneng Steam Turbine Power (Indonesia) Co., Ltd. Indonesia overseas subsidiaries, the
applicable local relevant tax laws and
regulations.
Other Subsidiary（Domestic） 25%
2. Preferential tax
1. According to the document “Notice for Qualification of High-tech Enterprises” (GKHZD〔2020〕No.251) issued
by Department of Science and Technology High-tech Development Center, the Company along with Hangzhou
Zhongneng Steam Turbine Power Co., Ltd. ,Zhejiang Packaged Technologies Development Co., Ltd., Zhejiang
Huayuan Steam Turbine Machinery Co.,Ltd. and Hangzhou Guoneng Steam Turbine Engineering Co.,Ltd. –
subsidies of the Company, were qualified as high-tech enterprises for term of three years. As the result of the
re-examination on 2020 high-tech enterprises has not yet been determined, the corporate income tax is temporarily
reduced at a 15% tax rate.
2. According to the document “Notice for Qualification of High-tech Enterprises” (GKHZD〔2020〕No.32) issued
by Department of Science and Technology High-tech Development Center, the Company along with The Casting
Company – subsidies of the Company, were qualified as high-tech enterprises for term of three years. Therefore
they enjoy 15% of tax for 2020.
3. According to the Notice on Implementing the Policy of Inclusive Tax Relief for Small and Micro Enterprises
(CS [2019] No.13) of the Ministry of Finance and the State Administration of Taxation, the subsidiary companies
Kunming Hangzhonneng Steam Turbine Power Technology Service Co., Ltd., Guangxi Hangzhonneng Steam
Turbine Technology Service Co., Ltd., Tangshan Hangneng Steam Turbine Power Technology Service Co., Ltd.,
Jilin Hangzhongneng Steam Turbine Power Technology Service Co., Ltd., Urumqi Hangzhonneng Steam Turbine
Technology Service Co., Ltd. and Luoyang Hangqi Steam Turbine Technology Service Co., Ltd. shall adopt
preferential tax policies for small profit-making enterprises in 2020. For the part of annual taxable income not
exceeding 1 million yuan, it shall be included in the taxable income by 25%, and the enterprise income tax shall
be calculated and paid at 20%; For the part with an annual taxable income over 1 million yuan but less than 3
million yuan, it shall be included in the taxable income by 50%, and the enterprise income tax shall be calculated
and paid at 20%.
3.Other
VII. Notes to the Consolidated Financial Statements
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
1.Monetary funds
In RMB
Items End of term Beginning of term
Cash in stock 141,788.02 272,578.83
Bank deposit 1,710,528,295.66 1,680,635,443.37
Other monetary fund 118,811,103.81 75,412,215.30
Total 1,829,481,187.49 1,756,320,237.50
Incl: Total of accounts saved overseas 7,598,393.25 11,220,811.11
Other note
At the end of the period, bank deposits include RMB 28,000.00 of ETC deposit with restricted use and RMB
474,344.07 of funds frozen due to the expiration of certificates. Other monetary funds at the end of the period
include RMB 117,813,763.97 of bank acceptance bill deposit with restricted use, RMB 956,800.00 of guarantee
deposit, RMB 5,076.54 of balance of special account for repurchasing treasury shares with unrestricted use, and
RMB 35,463.30 of interest on unrestricted deposit which can be transferred at any time.
2. Transactional financial assets
In RMB
Items End of term Beginning of term
Financial assets measured at fair value through profit or
1,021,681,809.34 854,210,990.44
loss
Of which ：
Equity instrument investment 1,681,809.34 2,040,990.44
Financing product 1,020,000,000.00 852,170,000.00
Of which：
Total 1,021,681,809.34 854,210,990.44
3. Derivative financial assets
None
4. Notes receivable
(1) Notes receivable listed by category
130
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
In RMB
Items End of term Beginning of term
Bank acceptance bill 95,760,020.23 30,437,261.72
Trade acceptance bill 22,347,056.44 16,046,997.93
Total 118,107,076.67 46,484,259.65
In RMB
End of term Beginning of term
Book balance Bad debt provision Book balance Bad debt provision
Category
Proportion( Proportio Book value Proportion( Proporti Book value
Amount Amount Amount Amount
%) %)
n(%) on(%)
Including：
Accrual of bad debt
123,909, 5,802,30 47,328,838.
provision by 100.00% 4.68% 118,107,076.67 100.00% 844,578.84 1.78% 46,484,259.65
376.92 0.25 49
portfolio
Of which：
95,760,0 30,437,261.
Bank acceptance 77.28% 95,760,020.23 64.31% 30,437,261.72
20.23 72
Commercial 28,149,3 5,802,30 16,891,576.
22.72% 20.61% 22,347,056.44 35.69% 844,578.84 5.00% 16,046,997.93
56.69 0.25 77
acceptance
123,909, 5,802,30 47,328,838.
Total 100.00% 4.68% 118,107,076.67 100.00% 844,578.84 1.78% 46,484,259.65
376.92 0.25 49
Accrual of bad debt provision by single item：None
Accrual of bad debt provision by portfolio：5,802,300.25
In RMB
End of term
Name
Book balance Bad debt provision Proportion%
Commercial acceptance by
28,149,356.69 5,802,300.25 20.61%
portfolio term
Total 28,149,356.69 5,802,300.25 --
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision：
131
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
In RMB
Amount of change in the current period
Category Opening balance Reversed or Closing balance
Accrual Write-off Other
collected amount
Commercial
acceptance by 844,578.84 4,957,721.41 5,802,300.25
portfolio term
Total 844,578.84 4,957,721.41 5,802,300.25
Of which the significant actual write-off accounts receivable:
□ Applicable √ Not applicable
（3）Notes receivable pledged by the Company at the end of the period
None
（4）Notes receivable which had endorsed by the Company or had discounted and had not due on the balance
sheet date at the period-end
In RMB
Amount of recognition termination at the Amount of not terminated recognition at the
Items
period-end period-end
Bank acceptance bill 54,507,676.21
Commercial acceptance 2,898,670.97
Total 54,507,676.21 2,898,670.97
（5）Notes transferred to accounts receivable because drawer of the notes fails to executed the contract or
agreement
None
（6） The actual write-off accounts receivable
None
132
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
5. Accounts receivable
(1) Accounts receivable disclosed by category
In RMB
End of term Beginning of term
Book balance Bad debt provision Book balance Bad debt provision
Category Book
Proportio Proportio value Proportio Proportio Book value
Amount Amount Amount Amount
n% n% n% n%
Accrual of bad debt
2,817,01 2,817,01 3,047,721 3,047,721
provision by single 0.11% 100.00% 0.12% 100.00%
7.89 7.89 .94 .94
item
Including：
Accrual of bad debt 2,607,98 989,190, 1,618,798 2,466,951 986,913,5 1,480,037,84
99.89% 37.93% 99.88% 40.01%
provision by portfolio 8,316.42 010.96 ,305.46 ,409.92 62.01 7.91
Including：
2,610,80 992,007, 1,618,798 2,469,999 989,961,2 1,480,037,84
Total 100.00% 38.00% 100.00% 40.08%
5,334.31 028.85 ,305.46 ,131.86 83.95 7.91
[Note] The differences between the opening period and the end of the previous year (31 December 2019) are
detailed in section XII.（5）44 of the present report on changes in significant accounting policies and accounting
estimates
Accrual of bad debt provision by single item：2,817,017.89
In RMB
Closing balance
Name
Book balance Bad debt provision Proportion Reason
Not expected to be
Dabi Oleo 2,817,017.89 2,817,017.89 100.00%
recovered
Total 2,817,017.89 2,817,017.89 -- --
Accrual of bad debt provision by single item：
I n RMB
Closing balance
Name
Book balance Bad debt provision Proportion Reason
Accrual of bad debt provision by portfolio:989,190,010.97
In RMB
Closing balance
Name
Book balance Bad debt provision Proportion
Accrual of bad debt provision by portfolio 2,607,988,316.42 989,190,010.96 37.93%
Total 2,607,988,316.42 989,190,010.96 --
133
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Note：None
Accrual of bad debt provision by portfolio:989,190,010.97
In RMB
Closing balance
Name
Book balance Bad debt provision Proportion
Note：
Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of
other receivables if the provision for bad debts of bills receivable is accrued according to the general model of
expected credit loss:
□ Applicable √ Not applicable
Disclosure by aging
In RMB
Aging Closing balance
Within 1 year（Including 1 year） 893,410,798.71
1-2 years 460,017,694.82
2-3 years 384,133,501.48
Over 3 years 873,243,339.30
3-4 years 171,984,339.18
4-5 years 104,451,253.88
Over 5 years 596,807,746.24
Total 2,610,805,334.31
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision：
In RMB
Amount of change in the current period
Reversed or
Category Opening balance Closing balance
Accrual collected Write-off Other
amount
Accrual of bad debt
3,047,721.94 -230,704.05 2,817,017.89
provision by single item
Accrual of bad debt
986,913,562.01 5,321,016.77 1,371,732.73 3,708,760.05 707,540.50 989,190,010.96
provision by portfolio
Total 989,961,283.95 5,090,312.72 1,371,732.73 3,708,760.05 707,540.50 992,007,028.85
Of which the significant amount of the reversed or collected part during the reporting period
In RMB
134
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Name Amount Way
Changsha Seal Turbine Machinery Co.,
1,125,732.73 Bank deposit recovery
Ltd.
Maanshan Iron & Steel Co., Ltd. 246,000.00 Bank deposit recovery
Total 1,371,732.73 --
(3) The actual write-off accounts receivable
In RMB
Items Amount
Accrual of bad debt provision by portfolio 3,708,760.05
The significant actual write-off accounts receivable for the current period
In RMB
Nature of Arising from related
Amount writtenReason for written
Name account Verification procedures transactions (Y/N)
off off
receivable
Sichuan Coal Gasification The examined and adopted to
Uncollectible
Goods 1,425,000.00 No
Co., Ltd. General Manager Office
amount
Hangzhou Huada Technology The examined and adopted to
Uncollectible
Instrument Equipment Co., Goods 920,000.00 No
Ltd. amount General Manager Office
Fengfeng Mining Area Shuxin The examined and adopted to
Uncollectible
Goods 595,000.00 No
Material Co., Ltd. General Manager Office
amount
Xinjiang Xinlianxin Energy The examined and adopted to
Uncollectible
Goods 240,000.00 No
Chemical Co., Ltd. General Manager Office
amount
Longkou Jungle Thermal The examined and adopted to
Uncollectible
Goods 226,961.28 No
Power Co., Ltd. General Manager Office
amount
Chongqing General Industry The examined and adopted to
Uncollectible
Goods 225,000.00 No
(Group) Co., Ltd. General Manager Office
amount
The examined and adopted to
Uncollectible
Other Goods 76,798.77 No
amount General Manager Office
Total -- 3,708,760.05 -- -- --
135
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
（4）The ending balance of account receivables owed by the imputation of the top five parties
In RMB
Name Amount Proportion(%) Bad debt provision
Client 1 779,443,373.02 29.85% 276,283,713.98
Client 2 210,346,611.89 8.06% 146,320,638.53
Client 3 86,675,052.37 3.32% 8,744,374.52
Client 4 58,311,386.93 2.23% 3,401,913.22
Client 5 43,217,011.76 1.66% 43,217,011.76
Total 1,177,993,435.97 45.12%
（5）Account receivable which terminate the recognition owning to the transfer of the financial assets
(6)The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts
receivable
Other note
6. Financing of receivables
In RMB
Items End of term Beginning of term
Notes receivable 774,663,468.76 680,279,893.94
Total 774,663,468.76 680,279,893.94
Changes in the current period of receivables financing and fair value
□ Applicable √ Not applicable
Relevant information of the financing provision for bad debts will be disclosed with reference to the disclosure
method of other receivables if the provision for bad debts of bills receivable is accrued according to the general
model of expected credit loss:
□ Applicable √ Not applicable
Other note：
(1) Accounts receivable financing with combined provision for impairment
Items End of term
Book balance Bad debt provision Proportion
774,663,468.76
Bank acceptance bill
portfolio
774,663,468.76
Subtotal
136
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
（2）Notes receivable pledged by the Company at the end of the period
Items Pledged amount
Bank acceptance bill portfolio 47,724,281.92
Subtotal 47,724,281.92
（3）Notes receivable which had endorsed by the Company or had discounted and had not due on the balance
sheet date at the period-end
In RMB
Items Amount of recognition termination at the period-end
Bank acceptance bill 652,386,470.93
Subtotal 652,386,470.93
The acceptor of the bank acceptance bill is a commercial bank, because the commercial bank has high credit,
the possibility of the bank acceptance bill not being paid at maturity is low, so the company has endorsed or
discounted the bank acceptance bill to terminate the confirmation. However, if the bill is not paid at maturity, the
company shall remain jointly and severally liable to the holder under the provisions of the bill act.
7. Prepayments
（1）Age analysis
In RMB
End of term Beginning of term
Age
Book balance Proportion(%) Book balance Proportion(%)
Within 1 year 505,778,971.10 87.56% 350,460,871.05 90.19%
1-2 years 46,784,353.50 8.10% 29,444,937.03 7.58%
2-3 years 17,087,017.61 2.96% 3,055,563.05 0.79%
Over 3 years 7,954,365.64 1.38% 5,601,076.67 1.44%
Total 577,604,707.85 -- 388,562,447.80 --
Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time
Note
(2) Top 5 of the closing balance of the prepayment collected according to the prepayment target
137
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Name Amount Proportion(%)
SIEMENS (CHINA) LIMITED 159,128,880.00 27.55
Jiangsu Shuangliang Cooling System Co., Ltd. 61,903,944.74 10.72
Siemens Industrial Turbomachinery AB 59,312,713.70 10.27
Mitsubishi Hitachi Electric Gas Engine Service (Nanjing) Co.,
30,882,994.15 5.35
Ltd
Kailuowen thermal Power technology (Jiangsu) Co., Ltd. 19,364,627.00 3.35
Subtotal 330,593,159.59 57.24
Other note：
8. Other account receivable
In RMB
Nature Closing balance Opening balance
Dividend receivable 43,605,292.60 27,827,292.60
Other 20,786,864.53 17,693,497.29
Total 64,392,157.13 45,520,789.89
（1）Interest receivable
1）Classification of interest receivable
In RMB
Nature Closing balance Opening balance
2）Significant overdue interest
In RMB
Whether or not the
Unit Closing balance Time Reason impairment and the basis
for its determination
Other note：
3）Bad-debt provision
□ Applicable √ Not applicable
（2）Dividend receivable
（1）Dividend receivable
138
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
In RMB
Items End of term Beginning of term
Hangzhou Bank 43,605,292.60 27,827,292.60
Total 43,605,292.60 27,827,292.60
2) Significant dividend receivable aged over 1 year
In RMB
Whether occurred
Closing
Items Aging Reason impairment and its
balance
judgment basis
The balance of 1-2 years is 11,270,000.00
yuan，The balance of2-3 years is 9,657,292.60
Hangzhou Bank 27,827,292.60 Equity pledge No
yuan，The balance of over 3 years is
6,900,000.00 years
Total 27,827,292.60 -- -- --
3）Bad-debt provision
□ Applicable √ Not applicable
Other note：
（3） Other accounts receivable
1) Other accounts receivable classified by the nature of accounts
In RMB
Nature Closing book balance Opening book balance
Accrual of bad debt provision by single
term
Accrual of bad debt provision by portfolio: 35,240,866.98 32,955,532.35
Total 35,240,866.98 32,955,532.35
2）Bad-debt provision
In RMB
Stage 1 Stage 2 Stage 3
Expected credit losses for
Bad Debt Reserves Expected credit losses Expected credit loss over Total
the entire duration (credit
over the next 12 months life (no credit impairment)
impairment occurred)
Balance as at January 1, 2020 724,820.99 254,659.24 14,282,554.83 15,262,035.06
Balance as at January 1, 2020 —— —— —— ——
139
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
in current
——Transfer to stage II -180,915.22 180,915.22
——Transfer to stage III -132,780.59 132,780.59
Provision in the current period 305,556.89 59,036.57 -510,609.07 -146,015.61
Write - off in the current
662,017.00 662,017.00
period
Balance as at December 31,
849,462.66 361,830.44 13,242,709.35 14,454,002.45
2020
Loss provision changes in current period, change in book balance with significant amount
□Applicable √ Not applicable
Disclosure by aging
In RMB
Aging Closing balance
Within 1 year(Including 1 year） 16,989,253.14
1-2 years 3,618,304.36
2-3 years 1,327,805.88
Over 3 years 13,305,503.60
3-4 years 778,315.49
4-5 years 749,049.07
Over 5 years 11,778,139.04
Total 35,240,866.98
3) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision：
In RMB
Amount of change in the current period
Reversed or
Category Opening balance Closing balance
Accrual collected Write-off Other
amount
Accrual of bad debt
15,262,035.06 -146,015.61 662,017.00 14,454,002.45
provision by portfolio:
Total 15,262,035.06 -146,015.61 662,017.00 14,454,002.45
Where the current bad debts back or recover significant amounts：
In RMB
Name Amount Way
140
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
4) The actual write-off accounts receivable
In RMB
Items Amount
Other receivable account 662,017.00
The significant actual write-off other accounts receivable for the current period
In RMB
Nature of Arising from related
Amount Reason for written
Name account Verification procedures transactions (Y/N)
written off off
receivable
The examined and adopted
Provisional
Shanxi Electric Power Construction Uncollectible
payment 500,000.00 to General Manager No
First Company amount
receivable
Office
The examined and adopted
Provisional
Hangzhou Xihu Electric Power Uncollectible
payment 159,000.00 to General Manager No
Technology Co., Ltd. amount
receivable
Office
The examined and adopted
Provisional
Zhejiang Gongli Construction Co., Uncollectible
payment 3,017.00 to General Manager No
Ltd. amount
receivable
Office
Total -- 662,017.00 -- -- --
Other note：
5) Top 5 of the closing balance of the other accounts receivable collated according to the arrears party
In RMB
Proportion of the total Closing balance
Name Nature Closing balance Aging year end balance of the of bad debt
accounts receivable provision
Shanghai Customs Waigaoqiao Office Deposit 3,710,320.94 Over 5 years 10.53% 3,710,320.94
Suzhou Weicheng Tender Service Co., Within 1
Deposit 2,210,000.00 6.27% 110,500.00
Ltd. year
The Balance
of Within 1
Hangzhou Ganghua Gas Co., Ltd. Deposit 1,400,000.00 year 3.97% 570,000.00
is800,000.00
yuan，The
141
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Balance of
2-3
is100,000.00
yuan，The
Balance of
Over 5 year
is500,000.00
yuan
Temporary
Shandong Jinan Power Generation
payment 1,360,000.00 Over 5 year 3.86% 1,360,000.00
Equipment Plant Co., ltd.
receivable
Sinopec International Business Co., Within 1
Deposit 1,250,100.00 3.55% 62,505.00
Ltd.Wuhan Bidding Center year
Total -- 9,930,420.94 -- 28.18% 5,813,325.94
6) Accounts receivable involved with government subsidies
None
7) Other account receivable which terminate the recognition owning to the transfer of the financial assets
None
8) The amount of the assets and liabilities formed by the transfer and the continues involvement of other accounts
receivable
None
9. Inventories
Whether the company need to comply with the disclosure requirements of the real estate industry
No
（1）Category of Inventory
In RMB
Closing book balance Opening book balance
Items Provision for Provision for
inventory inventory
Book balance Book value Book balance Book value
impairment impairment
Raw
555,853,674.67 126,037,190.21 429,816,484.46 496,493,898.48 102,764,892.59 393,729,005.89
materials
Goods in
873,917,291.98 62,846,628.97 811,070,663.01 777,309,981.82 62,335,747.40 714,974,234.42
progress
142
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Stock goods 1,077,831,518.71 146,965,552.72 930,865,965.99 1,067,164,081.98 124,577,053.22 942,587,028.76
Total 2,507,602,485.36 335,849,371.90 2,171,753,113.46 2,340,967,962.28 289,677,693.21 2,051,290,269.07
(2) Falling price reserves of inventory
In RMB
Increased amount Decreased amount
Items Opening balance Reverse or Closing balance
Withdrawal Reverse or write-off Other
write-off
Raw materials 102,764,892.59 26,557,941.96 3,285,644.34 126,037,190.21
Goods in progress 62,335,747.40 510,881.57 62,846,628.97
Stock goods 124,577,053.22 31,340,311.31 8,951,811.81 146,965,552.72
Total 289,677,693.21 58,409,134.84 12,237,456.15 335,849,371.90
The specific basis for determining the net realizable value, and the reasons for reversing or reselling the inventory
depreciation reserve in the current period
Items Current write-off Reason for
Specific basis for determining net realizable value
provision for inventory
The net realizable value shall be recognized by the amount of the estimated
Raw materials Used for current production and
selling prices minus the estimated selling costs and relevant taxes and dues
use and sales realization
The net realizable value shall be recognized by the amount of the estimated
Goods in process selling prices minus the estimated selling costs and relevant taxes and dues,
and commodity wherein regarding suspended projects expected not be to be recovered or Current realized sales
stocks projects whose sales agreements are released, the net realizable value shall be
recognized by the expected recoverable compensation
(3) Notes of the closing balance of the inventory which includes capitalized borrowing expenses
(4) Completed unsettled assets formed from the construction contact at the period-end
10.Contact assets
In RMB
Year-end balance Year-beginning balance（Note)
Items
Bad debt Bad debt
Book balance Book value Book balance Book value
provision provision
Quality guarantee 545,823,724.87 59,254,399.70 486,569,325.17 589,183,758.15 44,140,263.32 545,043,494.83
Total 545,823,724.87 59,254,399.70 486,569,325.17 589,183,758.15 44,140,263.32 545,043,494.83
143
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
[Note] The differences between the opening period and the end of the previous year (31 December 2019) are
detailed in section XII.（5）44 of the present report on changes in significant accounting policies and accounting
estimates
Relevant information of the financing provision for bad debts will be disclosed with reference to the disclosure
method of other receivables if the provision for bad debts of bills receivable is accrued according to the general
model of expected credit loss:
□ Applicable √ Not applicable
Provision for impairment of contract assets in the current period
In RMB
Reversal/write-off in
Items Current accrual Change amount Reason
current period
Accrual by single item
Accrual by portfolio 15,114,136.38 Accrual by aging
Total 15,114,136.38 --
Other note：
11. Assets divided as held-to-sold
None
12. Non-current assets due within 1 year
None
13. Other current assets
In RMB
Items End of term Beginning of term
Input tax deductible 39,814,956.16 65,719,458.12
Prepaid income tax 6,437,194.30 1,771,366.76
Rent charge 1,897,814.76 4,101,238.21
Treasury bonds 814,851.80
Total 48,964,817.02 71,592,063.09
Other note：
14.Creditor's right investment：None
15.Other Creditor's right investment: None
144
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
16. Long-term accounts receivable : None
17. Long-term equity investment
In RMB
Increase /decrease Closing
balance
Cash bonus Withdrawa of
Opening Other Closing
Investees Decrease Changes in or profits l of impairm
balance Additional comprehe Other balance
other
investment nsive announced impairmen ent
investment equity
income provisio
to issue t provision
n
I. Joint venture
2. Affiliated Company
Zhejiang Zhongrun
10,883,4 -2,137,79
Gas turbine 1,360,000.00 1,793,617.06 11,899,308.84
88.70 6.92
technology Co., Ltd.
Zhejiang Ranchuang
11,246,0 210,035.6
Turbine Machinery 11,456,132.77
97.13 4
Co., Ltd.
22,129,5 -1,927,76
Subtotal 1,360,000.00 1,793,617.06 23,355,441.61
85.83 1.28
22,129,5 -1,927,76
Total 1,360,000.00 1,793,617.06 23,355,441.61
85.83 1.28
Other note
[Note] Where, RMB 1,149,217.06 is the income generated by the subsidiary turbine company's investment cost
due to its obtaining of the joint venture Zhejiang Zhongrun Gas Turbine Technology Co., Ltd., which is less than
the fair value of the identifiable net assets of the investee when obtaining the investment; For details of RMB
644,400.00, please refer to Note V (I) 34(2) of the financial statements
18. Other equity instruments investment
In RMB
Items End of term Beginning of term
Hangzhou Bank 4,056,378,073.52 2,490,376,886.96
Total 4,056,378,073.52 2,490,376,886.96
Itemized disclosure of the current non - trading equity instrument investment
In RMB
Name Recognized Accumula Accumulat Amount of other Reasons for being measured at fair value Reasons
145
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
dividend income ting profit ing profit comprehensive and whose changes are included in other for other
income transferred comprehensive income compreh
to retained ensive
earnings income
transferr
ed to
retained
earnings
The shares of Hangzhou Bank Co., Ltd.
held by the company cannot pass the
contract cash flow characteristic test, but
the company does not hold the equity
Hangzhou Bank 95,156,322.10
instrument for the purpose of trading, so it
is designated as a financial asset measured
at fair value and its changes are included
in other comprehensive income.
Other note：
19.Other non-current Financing assets
In RMB
Items End of term Beginning of term
Classified as financial assets measured by f
air value and whose changes are included i 18,376,081.45 142,244,014.16
n the current profit and loss
Total 18,376,081.45 142,244,014.16
Other note: The project is invested in equity instruments
20. Investment property
(1) Investment property adopted the cost measurement mode
□ Applicable √ Not applicable
(2) Investment property adopted fair value measurement mode
□ Applicable √ Not applicable
(3) Details of investment property failed to accomplish certification of property
None
146
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
21. Fixed assets
In RMB
Items End of term Beginning of term
Fixed assets 1,094,505,770.45 724,702,558.18
Total 1,094,505,770.45 724,702,558.18
(1) Details
In RMB
Machinery Transportation
Items Houses & buildings Office equipment Total
equipment equipment
I. Original price
1. Balance at
723,688,582.73 1,017,986,468.77 27,373,257.78 98,848,619.12 1,867,896,928.40
period-beginning
2.Increase in the current
443,508,427.66 9,061,869.40 2,107,569.73 8,335,437.46 463,013,304.25
period
(1) Purchase 2,705,195.45 2,107,569.73 2,266,387.36 7,079,152.54
（ 2 ）
Transferred from constructi 443,508,427.66 6,356,673.95 6,069,050.10 455,934,151.71
on in progress
(3)Increased of
Enterprise Combination
3.Decreased amount of the
3,855,956.51 222,362,432.72 2,922,985.93 54,530,380.43 283,671,755.59
period
（1）Dispose 3,855,956.51 222,362,432.72 2,922,985.93 54,530,380.43 283,671,755.59
4. Balance at period-end 1,163,341,053.88 804,685,905.45 26,557,841.58 52,653,676.15 2,047,238,477.06
II.Accumulated
amortization
1.Opening balance 223,930,021.17 811,201,684.42 20,847,765.51 81,033,928.62 1,137,013,399.72
2.Increased amount of the
21,500,201.85 39,081,808.17 2,460,117.72 4,532,699.20 67,574,826.94
period
(1) Withdrawal 21,500,201.85 39,081,808.17 2,460,117.72 4,532,699.20 67,574,826.94
3.Decrease in the reporting
154,238.25 204,127,376.20 2,755,083.61 49,663,315.01 256,700,013.07
period
（1）Disposal 154,238.25 204,127,376.20 2,755,083.61 49,663,315.01 256,700,013.07
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
4.Closing balance 245,275,984.77 646,156,116.39 20,552,799.62 35,903,312.81 947,888,213.59
III. Impairment provision
1.Opening balance 1,504,928.24 3,600,121.12 1,075,921.14 6,180,970.50
2.Increase in the reporting
period
（1）Withdrawal
3.Decrease the reporting
336,789.66 999,687.82 1,336,477.48
period
（1）Disposal 336,789.66 999,687.82 1,336,477.48
4. Closing balance 1,504,928.24 3,263,331.46 76,233.32 4,844,493.02
IV. Book value
1.Book value of the
916,560,140.87 155,266,457.60 6,005,041.96 16,674,130.02 1,094,505,770.45
period-end
2.Book value of the
498,253,633.32 203,184,663.23 6,525,492.27 16,738,769.36 724,702,558.18
period-begin
(2) List of temporarily idle fixed assets
None
(3) Fixed assets leased in from financing lease
None
(4) Fixed assets leased out from operation lease
None
(5) Details of fixed assets failed to accomplish certification of property
In RMB
Items Book value Reason
Steam turbine power Building 207,276,289.75 In process
Steam Turbine Heavy Industry Plant In process
121,116,995.05
-Complete sets of factory
Steam Turbine Heavy Industry Plant In process
98,098,561.00
-Jingzi Large Workshop
Steam Turbine Heavy Industry Plant 78,387,682.00 In process
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
-Rotor workshop
Steam Turbine Heavy Industry Plant In process
-Small and Medium Welding Heat 69,742,622.00
Treatment Workshop
Steam Turbine Heavy Industry Plant In process
42,169,981.00
-Complete Plant
Steam Turbine Heavy Industry Plant In process
36,934,651.00
-Distribution Centre
Steam Turbine Heavy Industry Plant In process
17,985,542.45
-Canteen and Staff Activity Centre
Steam Turbine Heavy Industry Plant -Joint In process
10,183,040.00
station
Subtotal 681,895,364.25
Other note
（6）Liquidation of fixed assets
22. Construction in progress
In RMB
Items End of term Beginning of term
Construction in progress 804,921,709.95 799,410,358.84
Total 804,921,709.95 799,410,358.84
(1) List of construction in progress
In RMB
End of term Beginning of term
Items Provision Provision
Book balance for Book value Book balance for Book value
impairment impairment
New Plant project 784,750,054.12 784,750,054.12 770,118,198.38 770,118,198.38
Software project 2,995,615.18 2,995,615.18 7,779,939.24 7,779,939.24
Other project 13,821,041.54 13,821,041.54 13,337,401.59 13,337,401.59
Prepayment for equipment or
3,354,999.11 3,354,999.11 8,174,819.63 8,174,819.63
projects
Total 804,921,709.95 804,921,709.95 799,410,358.84 799,410,358.84
149
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
(2)Changes of significant construction in progress
In RMB
Includin
g
Transferr g: Capitaliz
Capitaliz Source
Name of Opening ed to Other End Proportio Project capitaliz ation of
Budget Increase ation of of
project balance fixed decrease balance n% process ation of interest
interest funding
assets interest rate (%)
this
period
New Plant 173,328. 770,118, 455,701, 441,069, 784,750, 8,970,39 2,318,97
72.03% 70.00% 1.20% Other
76 198.38 379.74 524.00 054.12 7.34 0.94
project
Software 7,779,93 782,675. 5,567,00 2,995,61
797.00 Other
9.24 96 0.02 5.18
project
13,337,4 9,523,71 9,040,07 13,821,0
Other project Other
01.59 7.66 7.71 41.54
Prepayment
8,174,81 1,004,72 5,824,55 3,354,99
for equipment Other
9.63 9.48 0.00 9.11
or projects
174,125. 799,410, 467,012, 455,934, 5,567,00 804,921, 8,970,39 2,318,97
Total -- -- --
76 358.84 502.84 151.71 0.02 709.95 7.34 0.94
(3) List of the withdrawal of the impairment provision of the construction in progress
None
（4）Engineering material
None
23. Productive biological assets
(1) Productive biological assets measured at cost methods
□ Applicable √ Not applicable
(2) Productive biological assets measured at fair value
□ Applicable √ Not applicable
24. Oil and gas assets
□ Applicable √ Not applicable
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
25. Right to use assets
None
26. Intangible assets
(1) Information
In RMB
Non patent
Items Land using right Patent Software Total
technology
I. Original price
1. Balance at period-beginning 332,298,312.33 309,433.96 6,203,204.75 338,810,951.04
2.Increase in the current period 6,783,442.45 6,783,442.45
(1) Purchase 6,783,442.45 6,783,442.45
(2)Internal Development
(3)Increased of Enterprise
Combination
3.Decreased amount of the
period
（1）Disposal
4.Closing balance 332,298,312.33 309,433.96 12,986,647.20 345,594,393.49
II.Accumulated amortization
1.Opening balance 61,769,705.92 263,920.58 1,636,957.32 63,670,583.82
2.Increased amount of the
6,662,865.36 5,470.20 1,443,159.82 8,111,495.38
period
(1) Withdrawal 6,662,865.36 5,470.20 1,443,159.82 8,111,495.38
3.Decreased amount of the
period
（1）Disposal
151
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
4.Closing balance 68,432,571.28 269,390.78 3,080,117.14 71,782,079.20
III. Impairment provision
1.Opening balance
2.Increased amount of the
period
(1) Withdrawal
3.Decreased amount of the
period
（1）Disposal
4.Closing balance
IV. Book value
1.Closing book value 263,865,741.05 40,043.18 9,906,530.06 273,812,314.29
2.Opening book value 270,528,606.41 45,513.38 4,566,247.43 275,140,367.22
(2) Details of fixed assets failed to accomplish certification of land use right
None
27. R&D expenses
None
28. Goodwill
（1）Book value of goodwill：None
（2）Provision for impairment of goodwill：None
29. Long-term amortized expenses
None
30. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets had not been off-set
In RMB
152
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Balance in year-end Balance in year-begin
Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Provision for Asset Impairment 1,409,307,333.29 217,500,327.81 1,342,544,151.28 207,111,114.23
Internal trade profit not realized 53,583,539.53 8,037,530.93 49,610,648.35 8,942,918.26
Revenue from changes in fair
value generated by financial
34,946,102.23 5,241,915.33 37,770,873.39 5,665,631.00
assets classified at fair value
through profit or loss
Estimated liabilities 32,202,504.57 4,830,375.69
Temporary difference such as
708,010.50 106,201.59 1,463,169.81 219,475.47
amortizing of software expense
Relocation compensation [note] 1,187,246,121.02 178,402,589.13
Total 2,685,791,106.57 409,288,564.79 1,463,591,347.40 226,769,514.65
(2) Deferred income tax liabilities had not been off-set
In RMB
Balance in year-end Balance in year-begin
Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference liabilities difference liabilities
Changes in fair value of
investments in other equity 3,665,424,033.52 549,813,605.04 2,099,422,846.96 314,913,427.04
instruments
Revenue from changes in
fair value generated by financial
4,526,027.39 678,904.11
assets classified at fair value
through profit or loss
Accumulated depreciation 4,844,493.02 726,673.95 6,180,970.50 927,145.57
Deferred income 1,574,345.96 390,995.35
Total 3,670,268,526.54 550,540,278.99 2,111,704,190.81 316,910,472.07
（3）Deferred income tax assets and liabilities are presented as net amount after neutralization
In RMB
Items Deferred Income Tax Temporarily Deductable Deferred Income Tax Temporarily Deductable
153
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Assets or Liabilities at or Taxable Difference at Assets or Liabilities at or Taxable Difference at
the End of Report Period the End of Report Period the Beginning of Report the Beginning of Report
Period Period
Deferred income tax
409,288,564.79 226,769,514.65
assets
Deferred income tax
550,540,278.99 316,910,472.07
liabilities
(4)Details of income tax assets not recognized
In RMB
Items End of term Beginning of term
Deductible provisional differences 2,904,262.90 3,522,673.60
Deductible losses 11,420.89 3,363,565.02
Total 2,915,683.79 6,886,238.62
(5) The un-recognized deductible losses of deferred income tax assets will due in the following years:
In RMB
Year End of term Beginning of term Remark
2021 507,583.48
2022 11,420.89 2,762,296.57
2023 93,489.37
2024 195.60
Total 11,420.89 3,363,565.02 --
Other note：
31.Other Non-current assets：None
32. Short-term borrowings
(1) Category of short-term borrowings
In RMB
Items End of term Beginning of term
Mortgage Borrowings 38,846,473.78 60,085,066.67
Guarantee Borrowing 177,876,329.63 37,755,120.54
Total 216,722,803.41 97,840,187.21
Note：
154
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
(2) List of the short-term borrowings overdue but not return
None
33. Transactional financial liabilities
None
34. Derivative financial liability
None
35.Notes payable
In RMB
Items End of term Beginning of term
Bank acceptance bill 230,724,303.75 227,961,541.12
Total 230,724,303.75 227,961,541.12
The total amount of outstanding notes payable at the end of this period is RMB .
36. Accounts payable
(1) List of accounts payable
In RMB
Items End of term Beginning of term
Goods 1,050,592,796.72 949,134,466.43
Equipment and Engineering 128,847,988.84 53,476,522.58
Other 28,357,035.22 27,797,727.73
Total 1,207,797,820.78 1,030,408,716.74
(2) Notes of the accounts payable aging over one year
None
37. Advances received
(1) List of Advances received
In RMB
Items End of term Beginning of term
Goods 0.00
155
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Total 0.00
[Note] The differences between the opening period and the end of the previous year (31 December 2019) are
detailed in section XII.（5）44 of the present report on changes in significant accounting policies and accounting
estimates
(2) Notes of the accounts payable aging over one year
None
38.Contract liabilities
In RMB
Items End of term Beginning of term
Goods 2,871,186,991.05 2,496,129,669.77
Total 2,871,186,991.05 2,496,129,669.77
[Note] The differences between the opening period and the end of the previous year (31 December 2019) are
detailed in section XII.（5）44 of the present report on changes in significant accounting policies and accounting
estimates
39. Payroll payable
(1) List of Payroll payable
In RMB
Items Beginning of term Increased this period Decreased this period End of term
Short-term compensation 71,207,361.75 697,008,672.91 678,256,316.34 89,959,718.32
Post-employment benefits - 59,910,887.44 58,469,036.46
24,998,587.82 26,440,438.80
defined contribution plans
Dismissal welfare 42,150,675.30 42,150,675.30
Total 96,205,949.57 799,070,235.65 778,876,028.10 116,400,157.12
（2）Presentation of short-term compensation
In RMB
Items Opening balance Increase Decrease Closing balance
(1) Salary, bonus, allowance and 558,789,532.31 540,321,579.81
53,459,703.08 71,927,655.58
subsidy
(2) Employee benefits 32,836,934.65 32,836,934.65
(3) Social insurance expenses 7,315,733.29 40,584,736.57 40,482,283.05 7,418,186.81
Including: medical insurance 39,561,727.52 39,018,659.15
6,806,787.26 7,349,855.63
premium
Work-related injury insurance 106,621.82 760,728.71 799,019.35 68,331.18
156
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
premium
Maternity insurance premium 402,324.21 262,280.34 664,604.55
(4) Housing fund 104,323.96 53,026,725.00 53,039,240.00 91,808.96
(5) Labor union expenditures and
10,327,601.42 11,770,744.38 11,576,278.83 10,522,066.97
employee education expenses
Total 71,207,361.75 697,008,672.91 678,256,316.34 89,959,718.32
(3) List of drawing scheme
In RMB
Items Opening balance Increase Decrease Closing balance
1.Basic pension insurance 4,734,914.56 33,876,344.02 35,417,305.27 3,193,953.31
2. Unemployment insurance 171,523.17 1,203,048.42 1,260,501.83 114,069.76
3. Enterprise annual fee 20,092,150.09 24,831,495.00 21,791,229.36 23,132,415.73
Total 24,998,587.82 59,910,887.44 58,469,036.46 26,440,438.80
40. Taxes Payable
In RMB
Items End of term Beginning of term
VAT 55,676,116.89 7,102,002.57
208,118,129.72 16,168,061.29
Enterprise Income tax
Individual Income tax 2,438,046.35 1,471,876.19
City Construction tax 6,111,245.89 702,531.26
Property tax 1,427,604.15 5,020,068.01
Land use tax 3,407,434.59 3,152,220.40
Education subjoin 2,618,495.23 312,788.18
Locality Education subjoin 1,745,663.49 208,525.44
Other 366,905.29 383,683.64
Total 281,909,641.60 34,521,756.98
Other note：
41.Other account payable
In RMB
Items End of term Beginning of term
Other account payable 75,212,591.46 82,148,405.19
157
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Total 75,212,591.46 82,148,405.19
（1) Interest payable
None
(2) Dividends payable
None
（3）Other account payable：None
(1) Other accounts payable listed by nature of the account
In RMB
Items End of term Beginning of term
Deposit 17,621,478.00 13,661,447.55
Provisional account payable 55,896,456.04 66,817,647.74
Other 1,694,657.42 1,669,309.90
Total 75,212,591.46 82,148,405.19
② Significant other payables for over 1 year
None
42. Liabilities classified as holding for sale
None
43. Non-current liabilities due within 1 year
In RMB
Items End of term Beginning of term
Long-term Borrowing loans due within 1
1,001,088.89 200,319.30
year
Total 1,001,088.89 200,319.30
Other note：
44. Other current liabilities
In RMB
158
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Items End of term Beginning of term（Note)
Output tax to be transferred 370,383,121.84 322,000,727.40
Maintenance and renovation costs 3,723,419.52
Total 374,106,541.36 322,000,727.40
[Note] The differences between the opening period and the end of the previous year (31 December 2019) are
detailed in section XII.（5）44 of the present report on changes in significant accounting policies and accounting
estimates
45. Long-term borrowing
(1) Category of long-term loan
In RMB
Items End of term Beginning of term
Mortgage loan 21,623,520.00 12,519,956.60
Guarantee loan 9,915,805.63
Total 21,623,520.00 22,435,762.23
46. Bonds payable
None
47. Lease liability
None
48. Long-term payable
In RMB
Items End of term Beginning of term
Long term account payable 156,493,666.66 183,554,599.99
Special Payable 249,378,950.11 546,905,908.60
Total 405,872,616.77 730,460,508.59
(1) Long-term payable listed by nature of the account
In RMB
Items End of term Beginning of term
CDB investment fund 155,000,000.00 182,000,000.00
Income payable of CDB 1,163,666.66 1,224,599.99
159
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Drawing in administrative restructuring 330,000.00 330,000.00
Total 156,493,666.66 183,554,599.99
Other notes：
According to the relevant agreement of the National Development Fund Investment Contract (hereinafter
referred to as the Investment Contract) jointly signed by the Company, National Development Fund Co., Ltd.
(hereinafter referred to as the NDF), Hangzhou Steam Turbine Industry Co., Ltd. and Hangzhou Steam Turbine
Group, the NDF invested RMB 208,000,000.00 in Hangzhou Steam Turbine Industry Co., Ltd., the subsidiary,
The NDF obtains 1.2% of the proceeds through dividends or repurchasing premium each year for the above
investment; According to the investment contract, Hangzhou Turbine Group will buy back its stake in the turbine
heavy industry company by stages from 2019 to the national development fund. In addition, according to the share
transfer agreement in the buyback stage, Hangzhou Turbine Group will resell the shares to the company at the
same price after buyback. Hangzhou Turbine Group has bought back the investment of 26,000,000.00 yuan from
the national development fund and resold it to the company at the same price. Turbine Heavy Industry Company
received the above-mentioned investment from CDI Development Fund on December 27, 2016. According to the
relevant investment return agreement in the investment contract, the Company will report it as long-term payables
when preparing the consolidated financial statements.
As of December 31, 2020, Hangzhou Turbine Group has repurchased the investment of RMB 53,000,000.00
from the National Development Fund and resold it to the Company at the same price; The accumulative
recognized payable income of this investment is RMB 9,826,000.00, of which the recognized payable income in
this period is RMB 2,319,800.00.
(2) Special Payable
In RMB
Items Beginning of term Increased this period Decreased this period End of term Reason
Compensation for
545,401,106.60 230,986,467.90 529,444,631.26 246,942,943.24
relocation
Funding for Personnel
1,504,802.00 2,069,109.89 1,137,905.02 2,436,006.87
Training
Total 546,905,908.60 233,055,577.79 530,582,536.28 249,378,950.11 --
Other note：
The increase in compensation for relocation in this period is the fourth compensation for relocation received
by the company according to the overall relocation plan of Hangzhou Municipal Government; The decrease in the
current period is caused by the use of compensation for relocation, of which the corresponding part of the
relocation expenses of RMB 88,375,107.26 in the current period is transferred to other income; The corresponding
part of the fixed assets of RMB 441,069,524.00 used in this period was transferred to deferred revenue. See Note
XIII (II) of the financial statements for details.
160
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
49. Long term payroll payable
None
50. Estimated liabilities
In RMB
Items End of term Beginning of term Reason
Proceedings without judgment 32,202,504.57
Total 32,202,504.57 --
Other explanations, including relevant important assumptions and estimation explanations of important estimated
liabilities:
On September 5, 2018, due to disputes over engineering and product quality, Henan Junhua Development
Co., Ltd. sued the Company and Xi'an Shangu Power Co., Ltd. in Zhumadian Intermediate People's Court of
Henan Province, demanding compensation for its losses of RMB 44 million, equipment repair costs of RMB 2.2
million, and related legal fees and other expenses. On May 22, 2019, the Intermediate People's Court of
Zhumadian City in Henan Province ruled against the Company, involving a compensation amount of 32.225
million yuan. The Company refused to accept the judgment and appealed to the Henan Higher People's Court.
According to the civil ruling ((2019) YMZ No.918) made by the Henan Higher People's Court in January 2020, it
ruled that the first-instance judgment of Zhumadian Intermediate People's Court was revoked and the case was
remanded for retrial. On March 13, 2021, Henan Junhua Development Co., Ltd. applied to Zhumadian
Intermediate People's Court for withdrawal of the lawsuit, which was granted by the court. In this period, the
estimated liabilities accrued in the previous year were reversed by RMB 32,202,504.57, and the non-operating
income was increased by RMB 32,202,504.57 accordingly.
51. Deferred income
In RMB
Decreased this
Items Beginning of term Increased this period End of term Reason
period
Receive government
Government Subsidy 51,713,417.61 529,444,631.26 91,741,758.13 489,416,290.74
subsidies
Total 51,713,417.61 529,444,631.26 91,741,758.13 489,416,290.74 --
Details of government subsidies
Please refer to Note V (IV) 3 of the Financial Statements for details of the amount of government subsidies
included in the current profits and losses.
52. Other non-current liabilities
None
161
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
53. Stock capital
In RMB
Increase/decrease this time (+ , - )
Balance
Issuing of new Transferred Balance year-end
Year-beginning Bonus shares Other Subtotal
share from reserves
Total of capital
754,010,400.00 754,010,400.00
shares
54. Other equity instruments
None
55. Capital reserves
In RMB
Year-beginning balance Increase in the current Decrease in the current Year-end
Items
period period balance
Capital premium 92,942,694.56 92,942,694.56
Other capital reserves 60,030,525.09 644,400.00 60,674,925.09
Total 152,973,219.65 644,400.00 153,617,619.65
Other note
Turbine Company, a subsidiary of the subsidiary turbine company, increased its capital by 10 million yuan in
2018. The paid-in capital of Turbine Company reached 1.36 million yuan in the current period, resulting in an
increase of 644,400 yuan in the fair value share of the identifiable net assets of the investee compared with the
book value of the original investment. The turbine company made adjustment accordingly to increase its
long-term equity investment and capital reserve-other capital reserve by 644,400 yuan.
56. Treasury stock
In RMB
Year-beginning balance Increase in the current Decrease in the current Year-end balance
Items
period period
Treasury stock 144,078,948.09 144,078,948.09
Total 144,078,948.09 144,078,948.09
Other note：
According to the Proposal on Repurchase of Company Shares reviewed and approved at the Second
Extraordinary General Meeting of Shareholders held on December 10, 2019, the company repurchased at a price
162
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
not exceeding HK$ 9.5 per share (inclusive), with the total repurchase funds not less than HK$ 160 million
(inclusive) and not more than HK$ 320 million (inclusive). The specific repurchase amount shall be subject to the
funds actually used to repurchase shares at the expiration of repurchase period. The implementation period of
share repurchase is within 12 months from the date of adoption of the share repurchase plan.
The company implemented share repurchase for the first time on February 28, 2020. As of December 31,
2020, the company has completed share repurchase, and actually repurchased 19,551,800 shares, accounting for
2.59% of the company's total share capital. The highest repurchase price is HK$ 9.17 per share, the lowest
repurchase price is HK$ 7.22 per share. The total amount of funds used is HK$ 160,734,718.28, equivalent to
RMB 144,078,948.09, which is included in the current treasury stock.
57. Other comprehensive income
In RMB
Occurred current term
Less：
Less：Prior
Amount
period
transferred
included
into profit
in other After-tax
Amount and loss in Less： After-tax
Opening composite attribute to
Items incurred the current Income attribute to Closing balance
balance income minority
before period that tax the parent
transfer to shareholde
income tax recognied expenses company
retained r
into other
income in
comprehensi
the current
ve income in
period
prior period
1. Other comprehensive income
1,784,195,1 1,565,217, 234,900,1 1,330,767, -450,113.9
that cannot be reclassified in the 3,114,962,386.84
56.34 294.58 78.00 230.50 2
loss and gain in the future
Changes in fair value of
1,784,509,4 1,566,001, 234,900,1 1,331,101,
investments in other equity 3,115,610,428.47
19.91 186.56 78.00 008.56
instruments
Difference of translating of -783,891.9 -333,778.0 -450,113.9
-314,263.57 -648,041.63
foreign currency accounts 8 6 2
Total of other comprehensive 1,784,195,1 1,565,217, 234,900,1 1,330,767, -450,113.9
3,114,962,386.84
income 56.34 294.58 78.00 230.50 2
58.Special reserves
In RMB
Items Beginning of term Increased this period Decreased this period End of term
163
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Labor safety expenses 18,324,473.28 2,335,261.60 2,960,099.61 17,699,635.27
Total 18,324,473.28 2,335,261.60 2,960,099.61 17,699,635.27
Other note, including changes and reason of change:
1) The decrease in the current period is due to the safety production expenses extracted by the company for
the purchase of safety protection articles and equipment.
2) On December 5, 2016, Upon the application of the Company and the approval of Hangzhou Safety
Production Supervision and Administration Bureau (HSPSAB), the minimum reserved amount for the collection
and use of the safety production cost of the Company and its subsidiaries is RMB 20 million. If the safety
production costs that have been withdrawn in previous years have exceeded the minimum reserved amount, it will
no longer be reduced; if the safety production costs for the subsequent years are less than the above-mentioned
minimum reserved amount, withdraw in the current year to compensate up to the minimum reserved amount.
59. Surplus reserves
In RMB
Items Beginning of term Increased this period Decreased this period End of term
Statutory surplus
621,112,807.78 621,112,807.78
reserves
Total 621,112,807.78 621,112,807.78
Note：
60. Retained profit
In RMB
Items Amount of this period Amount of last period
After adjustments: Retained profits at the period
3,276,880,091.53 3,082,544,107.52
beginning
Add：Net profit belonging to the owner of the
459,345,443.38 345,138,064.00
parent company
Common stock dividend payable 148,760,495.00 150,802,079.99
Retained profit at the end of this term 3,587,465,039.91 3,276,880,091.53
As regards the details of adjusted the beginning undistributed profits
(1)As the retroactive adjustment on Enterprise Accounting Standards and its related new regulations, the affected
beginning undistributed profits are RMB 0.
(2) As the change of the accounting policy, the affected beginning undistributed profits are RMB 0.
164
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
(3) As the correction of significant accounting error, the affected beginning undistributed profits are RMB 0 .
(4) As the change of consolidation scope caused by the same control, the affected beginning undistributed profits
are RMB 0.
(5) Other adjustment of the total affected beginning undistributed profits are RMB 0 .
61. Business income and Business cost
In RMB
Amount of this period Amount of last period
Items
Income Cost Income Cost
Main Business 4,469,227,317.60 3,047,365,191.73 4,253,794,322.62 2,936,302,882.50
Other 27,217,926.95 22,974,048.10 26,054,196.19 25,915,782.82
Total 4,496,445,244.55 3,070,339,239.83 4,279,848,518.81 2,962,218,665.32
Whether the net profit before and after deducting non-recurring gains and losses is negative after audit
□ Yes √ No
Information related to performance obligations:
The Company’s sales link has entered into a legal and effective sales contract/order with the customer. The
contract/order clarifies the terms of the subject product, specification model, transaction quantity, unit price,
settlement method, delivery obligation, etc., and the performance obligation is clear, and it is the single
performance obligation at a single point in time. The transaction prices of the Company’s various product
contracts/orders are clear, and the Company will confirm revenue after fulfilling the relevant performance
obligations in accordance with the contract/order related agreements.
Information related to transaction value assigned to residual performance obligations:
At the end of the reporting period, the amount of revenue corresponding to the contract that have been signed but
not yet fulfilled obligation or not fulfilled obligation is 5,996,710,000.00RMB.
62.Taxes and surcharges
In RMB
Items Amount of this period Amount of last period
Urban maintenance and construction tax 16,238,204.65 13,203,646.68
Educational surtax 7,063,932.39 5,749,992.68
House tax 2,066,301.84 5,567,388.14
Land royalties 3,407,434.71 3,103,464.62
Stamp tax 1,548,618.16 1,682,230.44
Locality Education surcharge 4,709,288.72 3,833,328.28
vehicle and vessel tax 58,533.56 60,140.00
165
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Total 35,092,314.03 33,200,190.84
63. Sales expense
In RMB
Items Amount of this period Amount of last period
Employees’ remunerations 87,968,449.66 81,532,239.92
Transportation 59,268,631.13 58,615,791.76
Travel expenses 20,075,475.64 28,641,439.76
Business reception expenses 11,478,448.33 9,130,353.95
Consulting service fee 25,358,674.76 20,848,906.04
Conferences 2,020,017.09 1,887,976.28
Three charge 10,719,101.31 5,746,645.50
Advertising fee 616,212.81 1,726,599.73
Other 5,056,801.98 6,131,967.27
Total 222,561,812.71 214,261,920.21
64. Administrative expense
In RMB
Items Amount of this period Amount of last period
Employees’ remunerations 302,106,116.30 325,298,869.95
Business reception expenses 3,168,446.20 3,185,663.43
Asset depreciation and amortizing 25,848,369.26 28,358,046.24
Rental fee, House rental, property 18,535,124.06 40,347,951.69
management, water and power
Traveling fees 5,955,899.44 9,869,881.73
Material, low-value-consumable 3,629,882.95 4,666,623.23
Office expenses 8,464,607.46 8,405,808.39
Repair costs 9,969,105.84 5,229,479.63
Enterprise relocation costs [Note] 66,131,057.32 5,476,958.99
Other 55,589,074.13 58,146,306.19
Total 499,397,682.96 488,985,589.47
Other note：
Note：Relocation expenses mainly include personnel placement expenses, rental expenses, transportation expenses,
etc.
65. R&D Expense
166
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
In RMB
Items Amount of this period Amount of last period
Labor cost 117,081,757.49 95,452,784.47
Direct materials 74,703,271.30 54,972,136.64
Depreciation expenses 9,851,176.94 11,540,310.80
Test and inspection fee 1,746,147.14 6,317,781.89
Commissioned research & development 554,709.65 777,669.91
Other 3,910,985.44 3,110,977.89
Total 207,848,047.96 172,171,661.60
66. Financial expenses
In RMB
Items Amount of this period Amount of last period
Interest expense 7,012,513.74 9,963,292.02
Less: Incoming interests 21,990,927.98 29,571,034.30
Exchange gains/losses 32,371,020.32 -2,891,900.39
Commission 2,369,598.05 2,367,011.49
Total 19,762,204.13 -20,132,631.18
67. Other income
In RMB
Items Amount of this period Amount of last period
Government subsidies related to assets 3,366,650.87 3,714,727.94
Government subsidies related to income 100,778,043.67 40,986,583.46
Individual tax commission refunds 588,962.89 1,601,529.43
Total 104,733,657.43 46,302,840.83
68. Investment income
In RMB
Items Amount of this period Amount of last period
Long-term equity investment income by equity
-1,927,761.28 -1,500,653.46
method
Revenue from changes in fair value generated 716,981.13 2,763,749.82
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
by financial assets classified at fair value
through Other comprehensive income
Dividend income from other equity instrument
95,156,322.10 67,968,801.50
investments during the holding period
The disposal is classified as the investment
income of financial assets measured at fair
50,386,921.15 81,635,088.21
value and recorded in the profits and losses of
the current period
Investment income from the disposal of
-1,519,778.29 -2,875,051.16
receivables financing
Debt restructuring gains 3,350,920.00
Total 146,163,604.81 147,991,934.91
69.Net exposure hedging income
None
70. Gains on the changes in the fair value
In RMB
Source Amount of this period Amount of last period
Transactional Financial assets -359,181.10 -828,229.36
Other non-current financial assets 3,183,952.26 -7,236,616.64
Total 2,824,771.16 -8,064,846.00
Other note：
71. Credit impairment loss
In RMB
Source Amount of this period Amount of last period
Losses on bad debt -9,902,018.52 19,024,730.60
Total -9,902,018.52 19,024,730.60
Other note：
72. Losses from asset impairment
In RMB
Items Amount of this period Amount of last period
I. Losses on bad debt -58,409,134.84 -116,698,877.20
168
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
XII. Loss of impairment of contract assets -15,114,136.38
Total -73,523,271.22 -116,698,877.20
73. Asset disposal income
In RMB
Source Amount of this period Amount of last period
Profits of disposal of fixed assets 383,003.71 420,395.37
Total 383,003.71 420,395.37
74. Non-operating income
In RMB
Recorded in the amount of the
Items Amount of this period Amount of last period
non-recurring gains and losses
Debt restructuring gains 167,400.00
Loss of non-current assets:
94,219.18 9.62 94,219.18
obsolescence gain
Projected liabilities charged 32,202,504.57 32,202,504.57
Compensation income 11,866,833.45 3,374,198.02 11,866,833.45
No payment required 217,266.60 5,235,595.18 217,266.60
Equity gains 1,149,217.06 1,149,217.06
Other 482,478.93 476,019.10 482,478.93
Total 46,012,519.79 9,253,221.92 46,012,519.79
75. Non-operational expenditure
In RMB
Recorded in the amount of the
Items Amount of this period Amount of last period
non-recurring gains and losses
Debt restructuring loss 676,072.84
Donations 227,709.00 270,000.00 227,709.00
Non-current assets scrapping
21,441,509.21 12,761,605.46 21,441,509.21
loss
Estimated liabilities 32,202,504.57
Compensation expenses 15,457,340.92 3,984,748.73 15,457,340.92
Fine, late payment 4,580.61 90,388.08 4,580.61
169
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Other 72,034.12 6,429.54 72,034.12
Total 37,203,173.86 49,991,749.22 37,203,173.86
Other note：
The loss of non current assets damaged and scrapped due to relocation in the current period is 21357861.81 yuan.
76. Income tax expenses
(1) Details
In RMB
Items Amount of this period Amount of last period
Income tax of current term 252,203,467.93 62,875,287.21
Deferred income tax -183,789,421.22 -11,841,336.31
Total 68,414,046.71 51,033,950.90
(2) Adjustment process of accounting profit and income tax expenses
In RMB
Items Amount of this period
Total profit 620,933,036.23
Income tax expense at statutory / applicable tax rates 93,139,955.43
Effect of different tax rates applicable to subsidiaries 6,406,351.37
Adjustment for income tax in prior year 523,865.06
Income not subject to tax -15,614,448.32
Expenses not deductible for tax purposes 2,029,806.62
Impact of deductible losses on the use of previously unrecognized deferred
-1,245,315.32
income tax assets
The current period does not affect the deferred tax assets recognized
24,816.14
deductible temporary differences or deductible loss
Super deduction of R&D expenses -16,558,088.06
Impact of additional deductions for persons with disabilities -319,693.02
Changes in the balance of deferred income tax assets at the beginning of
26,796.81
the tax rate adjustment
Income tax expenses 68,414,046.71
170
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
77. Other Comprehensive income
See notes.
78. Notes Cash flow statement
(1) Other cash received from operating activities
In RMB
Items Amount of this period Amount of last period
Deposit interest 21,991,757.05 29,372,201.11
Government subsidies received 13,923,104.17 20,420,934.58
Recovery of operating bank deposits 408,828,449.05 313,730,733.94
Receipt of operating current account 4,942,740.84 13,652,789.41
Other 1,098,891.29 592,812.86
Total 450,784,942.40 377,769,471.90
（2） Other cash paid for Operating activities
In RMB
Items Amount of this period Amount of last period
Payment cash sales expenses 130,603,031.21 132,909,441.63
Payment cash Management expenses 113,381,018.73 123,097,888.63
Payment cash R & D cost 6,211,842.23 12,990,779.60
Payment cash financial expenses 2,247,828.34 2,369,651.49
Payment of operational bank deposits 224,080,912.16 172,784,920.53
Payment of business transactions 17,961,001.26 2,294,864.12
Other 6,367,932.72 568,779.54
Total 500,853,566.65 447,016,325.54
（3）Other investment-related cash received
In RMB
Items Amount of this period Amount of last period
Repurchasing of trusteeship 3,391,068,000.00 3,121,502,000.00
Receipt of levy and relocation
230,986,467.90 314,548,452.88
compensation
171
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Total 3,622,054,467.90 3,436,050,452.88
（4）Other cash paid for investment activities
In RMB
Items Amount of this period Amount of last period
Purchasing of financial products 3,559,712,851.80 2,816,802,000.00
Total 3,559,712,851.80 2,816,802,000.00
（5）Other cash paid for Financing activities
None
（6）Other cash paid relevant to financing activities
In RMB
Items Amount of this period Amount of last period
Payment of CDB investment interest 2,441,666.67 2,574,866.67
Return of CDB Fund investment 27,000,000.00 26,000,000.00
Repurchase stocks 144,078,948.09
Total 173,520,614.76 28,574,866.67
79. Supplement Information for cash flow statement
（1）Supplement Information for cash flow statement
In RMB
Amount of last
Supplementary Info. Amount of this period
period
-- --
I. Adjusting net profit to cash flow from operating activities
Net profit 552,518,989.52 426,346,822.86
Add: Impairment loss provision of assets 83,425,289.74 97,674,146.60
Depreciation of fixed assets, oil and gas assets and consumable biological assets 67,658,911.58 73,252,847.85
Depreciation of Use right assets
Amortization of intangible assets 8,111,495.38 7,563,568.15
Amortization of Long-term deferred expenses
Loss on disposal of fixed assets, intangible assets and other long-term deferred assets -383,003.71 -420,395.37
Fixed assets scrap loss 21,347,290.03 12,761,595.84
Loss on fair value changes -2,824,771.16 8,064,846.00
172
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Financial cost 39,384,363.13 7,000,200.95
Loss on investment -144,332,463.10 -150,866,986.07
Decrease of deferred income tax assets -182,519,050.14 -12,806,807.42
Increased of deferred income tax liabilities -1,270,371.08 965,471.11
Decrease of inventories -178,871,979.23 19,753,410.36
Decease of operating receivables -469,200,271.99 -260,102,076.35
Increased of operating Payable 662,633,217.86 206,531,660.60
Other -1,261,046.14 -3,462,473.88
Net cash flows arising from operating activities 454,416,600.69 432,255,831.23
II. Significant investment and financing activities that without cash flows: -- --
Conversion of debt into capital
Convertible corporate bonds maturing within one year
Financing of fixed assets leased
3．Movement of cash and cash equivalents： -- --
Ending balance of cash 1,710,208,279.45 1,645,907,650.92
Less: Beginning balance of cash equivalents 1,645,907,650.92 1,262,186,817.20
Add：End balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase of cash and cash equivalent 64,300,628.53 383,720,833.72
(2) Net Cash paid of obtaining the subsidiary
None
(3) Net Cash receive of disposal of the subsidiary
None
(4) Component of cash and cash equivalents
In RMB
Items End of term Beginning of term
1,710,208,279.45 1,645,907,650.92
I. Cash
141,788.02 272,578.83
Of which: Cash in stock
Bank savings could be used at any time 1,710,025,951.59 1,645,633,443.37
Other monetary capital could be used at any 40,539.84 1,628.72
173
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
time
III. Balance of cash and cash equivalents at
1,710,208,279.45 1,645,907,650.92
the period end
80. Note of statement of changes in the owner's equity
Explain "other" project name and adjustment amount of the adjustment of closing balance in previous year, etc.
None
81. Assets with limitation on ownership or using rights
In RMB
Items Closing book value Causation o limitation
Used as security for issuing of acceptance bill and bill of
Monetary capital 119,272,908.04
guarantees
Transactional Financial Assets 1,681,809.34 In a lock-up period
Financing receivable 47,724,281.92 Used as security for issuing of acceptance drafts and bill
Collateral for obtaining bank loans and investment funds
Dividend receivable 43,605,292.60
from CDB
Collateral for obtaining bank loans and investment funds
Other equity instrument investment 672,593,600.00
from CDB
Collateral for obtaining bank loans and investment funds
Fixed assets 514,038,703.77
from CDB
Collateral for obtaining bank loans and investment funds
Construction in process 265,737,787.54
from CDB
Collateral for obtaining bank loans and investment funds
Intangible assets 81,934,866.93
from CDB
Total 1,746,589,250.14 --
82. Monetary items in foreign currencies
(1) Foreign currency monetary items
In RMB
Translated to RMB at end
Items Balance at end of period Exchange rate
of period
Monetary capital -- -- 353,523,536.34
Incl：USD 50,373,884.74 6.5249 328,684,560.54
Euro 2,166,509.05 8.025 17,386,235.13
HKD 5.51 0.8416 4.64
174
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Rupiah 15,621,560,649.00 0.000464 7,248,404.14
Yen 3,231,259.00 0.063236 204,331.89
Account receivable -- -- 166,924,169.79
Incl：USD 24,360,662.92 6.5249 158,950,889.45
Euro 455,784.14 8.025 3,657,667.73
HKD
Rupiah 8,793,655,225.00 0.000464 4,080,256.03
SGD 47,726.12 4.9314 235,356.58
Other receivable 3,262,450.00
Incl：USD 500,000.00 6.5249 3,262,450.00
Contract assets 2,179,855.95
Incl：USD 310,530.00 6.5249 2,026,177.20
Euro 19,150.00 8.025 153,678.75
Account payable 14,653,406.04
Incl: Euro 818,588.86 8.025 6,569,175.60
Rupiah 7,919,052,274.00 0.000464 3,674,440.25
USD 536,779.96 6.5249 3,502,435.56
Swing franc 116,500.00 7.4006 862,169.90
Yen 714,541.30 0.063236 45,184.73
Long-term Loans -- --
Incl：USD
Euro
HKD
(2) Note to overseas operating entities, including important overseas operating entities, which should be disclosed
about its principal business place, function currency for bookkeeping and basis for the choice. In case of any
change in function currency, the cause should be disclosed.
□ Applicable √ Not applicable
83. Arbitrage
Arbitrage According to arbitrage category to disclose arbitrage item, relevant arbitrage tools and the arbitraged
risk qualitative and quantitative information:
84. Government subsidy
1) Government subsidies related to assets
175
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
In RMB
Amount included in current profit
Items Amount Project
and loss
（2）Government subsidy return
□ Applicable √ Not applicable
Other note：
(1) Detail
1) Asset-related government subsidies
Current
Beginning Current subsidy Current Ending amortization
Items
Deferred income increase amortization Deferred income Item
presentation
Financial subsidy for industrial Other
201,460.00 28,780.00 172,680.00
projects income
Subsidy for casting and forging Other
201,460.00 28,780.00 172,680.00
projects income
Financial subsidy for recycling Other
79,870.00 11,410.00 68,460.00
economy income
Financial subsidy for casting and Other
914,265.00 914,265.00
forging projects income
Land requisition and demolishing
Other
compensation-complete plant of 40,595,635.04 441,069,524.00 1,351,126.20 480,314,032.84
income
heavy industry
Land requisition and demolishing
Other
compensation-heavy industry 9,720,727.57 1,032,289.67 8,688,437.90
income
equipment
Subtotal 51,713,417.61 441,069,524.00 3,366,650.87 489,416,290.74
2) Income-related government subsidies used for compensation of relevant costs and expenses or losses incurred
in the Company
Items Amount Item presentation
Land requisition and demolishing compensation-removal 88,375,107.26
Other income
cost
The first (set of) bonus in key fields of equipment 2,611,500.00
Other income
manufacturing industry in Zhejiang Province
Social security refund 2,790,482.04 Other income
176
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Financial subsidy for green enterprise development 1,645,400.00 Other income
Basic electricity subsidy 964,248.00 Other income
Special award and supplement funds for enterprise structure 904,800.00
Other income
adjustment
Equipment contracting qualification certification award 800,000.00 Other income
Subsidies for operation in lieu of training 678,040.00 Other income
Performance reward for high-level talents 396,286.18 Other income
Science and technology innovation leading talent award for 271,657.00
Other income
ten thousand people plan
Patent incentive rewards 266,280.00 Other income
Outstanding contribution award of "average output on per 200,000.00
Other income
mu"
Foreign trade exhibition subsidy 190,900.00 Other income
Science and technology award 184,000.00 Other income
Energy "double control" target assessment award 155,515.00 Other income
Skill master studio award 100,000.00 Other income
Funding for personnel training 40,721.95 Other income
Other incidental government subsidies 203,106.24 Other income
Subtotal 100,778,043.67
(2) The current amount of government subsidies included into the current profits and loss is RMB 104,144,694.54.
85.Other ：None
VIII. Changes of merge scope
1. Business merger not under same control
None
2. Business combination under the same control
None
(1) Business Combination under the same control during the reporting period
None
177
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
（2）Combined cost
None
（3）The book value of the assets and liabilities of the merged party on the date of consolidation
None
3. Counter purchase
None
4. The disposal of subsidiary
Whether there is a single disposal of the investment to subsidiary and lost control
□ Yes √No
Whether there are multiple transactions step by step dispose the investment to subsidiary and lost control in
reporting period
□ Yes √ No
5. Other reasons for the changes in combination scope
Notes to reasons for the changes in combination scope (Newly established subsidiary and subsidiary of liquidation)
and relevant information:
Reduced scope of consolidation：
Equity disposal Net assets on disposal Net profit from opening
Name Equity disposal point
method date to disposal date
Hangzhou Kaineng Forging Co.,
Withdraw April 15,2020 3,223,519.61 -716.40
Ltd.
6.Other :None
IX. Equity in other entities
1. Equity in subsidiary
(1) The structure of the enterprise group
Main business Business Share
Name of the subsidiaries Reg. Add. Way of obtain
location property proportion %
178
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Direct Indirect
Zhejiang Steam Trubine Packaged Hangzhou Hangzhou
Technologies Development Co., Ltd. Commerce 70.86% Incorporation
Zhejiang Zhejiang
Hangzhou Zhongneng Steam Turbine Hangzhou Hangzhou
Manufacturing 60.83%
Power Co., Ltd. Incorporation
Zhejiang Zhejiang
Hangzhou Steam Turbine Casting Co., Hangzhou Hangzhou
Manufacturing 38.03% Incorporation
Ltd. Zhejiang Zhejiang
Hangzhou Steam Turbine Machinery Hangzhou Hangzhou
Manufacturing 52.00%
Equipment Co., Ltd. Zhejiang Zhejiang Incorporation
Hangzhou Steam Turbine Auxiliary
Hangzhou Hangzhou
Machinery Co., Ltd. (Auxiliary 87.53%
Zhejiang Zhejiang Manufacturing Incorporation
Machinery Co.)
Zhejiang Turbine Import & Export Co., Hangzhou Hangzhou
Commerce 100.00% Incorporation
Ltd. (Turbine Co.) Zhejiang Zhejiang
Hangzhou Steam Turbine Heavy Industry Hangzhou Hangzhou
100.00%
Co., Ltd. Zhejiang Zhejiang Manufacturing Incorporation
Basis for holding 50% or less than 50% of the voting power but still controlling the invested organizations
In December 2018, the subsidiary Casting Company introduced external strategic investors, leading to a
decrease in the shareholding ratio of the Company from 51% to 38.03%. Since the Company still held more than 1/3
of shares and took three seats in the board of five directors, it still had power of control over the Casting &
Forging Company.
2.Major non-fully-Owned subsidiaries
In RMB
Gains/loss of the period Dividend announced in Balance of equity of minor
Share portion of
Name of the subsidiaries attributable to minor the period to minor shareholders at end of
minor shareholders
shareholders shareholders period
Zhejiang Steam Turbine
Packaged Technologies 29.14% 9,693,232.67 11,891,160.00 39,859,341.46
Development Co., Ltd.
Hangzhou Zhongneng Steam
39.17% 24,422,315.02 45,132,000.00 126,589,857.34
turbine Power Co., Ltd.
179
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Hangzhou Steam Turbine
61.97% 24,139,794.75 12,393,220.00 154,999,503.92
Casting Co., Ltd.
Hangzhou Steam Turbine
Machinery Equipment Co., 48.00% 35,268,269.54 28,800,000.00 87,665,811.66
Ltd.
Hangzhou Steam Turbine
Auxiliary Machinery Co., 12.47% 9,154,501.30 36,235,822.75
Ltd.
3. Material financial information of major non-fully-owned subsidiaries
In RMB
End of term Beginning of term
Subsidiaries Non-curre Non-curre
Current Non-curre Total of Current Total of Current Non-curre Total of Current Total of
nt nt
Name assets nt assets assets liabilities liability assets nt assets assets liabilities liability
liabilities liabilities
Zhejiang
Steam
Turbine
335,835,5 7,867,345 343,702,8 206,940,6 206,940,6 325,685,1 8,209,255 333,894,4 189,590,8 189,590,8
Packaged
38.47 .88 84.35 29.93 29.93 55.57 .66 11.23 03.82 03.82
Technologies
Developmen
t Co., Ltd.
Hangzhou
Zhongneng
Steam 1,109,237 69,769,99 1,179,007 877,661,4 330,000.0 877,991,4 1,168,147 70,569,36 1,238,717 887,176,1 330,000.0 887,506,1
turbine ,142.17 8.20 ,140.37 99.09 0 99.09 ,686.49 0.17 ,046.66 26.37 0 26.37
Power Co.,
Ltd.
Hangzhou
Steam
413,618,4 148,061,5 561,680,0 271,003,5 22,037,34 293,040,9 387,332,4 158,618,2 545,950,6 271,808,8 23,832,81 295,641,6
Turbine
93.18 70.82 64.00 86.47 0.00 26.47 97.08 00.30 97.38 68.65 7.23 85.88
Casting Co.,
Ltd.
Hangzhou
278,552,0 27,278,02 305,830,0 121,123,2 2,069,688 123,192,9 275,472,8 30,235,34 305,708,2 134,998,7 1,547,918 136,546,6
Steam
28.79 4.91 53.70 57.40 .65 46.05 61.67 2.07 03.74 39.23 .40 57.63
Turbine
180
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Machinery
Equipment
Co., Ltd.
Hangzhou
Steam
Turbine 773,794,5 78,925,53 852,720,1 533,228,5 3,723,419 536,951,9 659,359,8 103,773,6 763,133,4 520,777,5 520,777,5
Auxiliary 91.67 9.42 31.09 74.23 .52 93.75 41.29 43.18 84.47 46.84 46.84
Machinery
Co., Ltd.
In RMB
Amount of current period Amount of previous period
Subsidiaries
Cash flow for Cash flow for
Total Misc Total Misc
Name Turnover Net profit business Turnover Net profit business
Gains Gains
activities activities
Zhejiang
Steam
Turbine
Packaged
231,015,559.55 33,258,647.01 33,258,647.01 56,544,644.69 230,935,067.64 65,397,490.27 65,397,490.27 38,327,225.88
Technologie
s
Developmen
t Co., Ltd.
Hangzhou
Zhongneng
Steam 1,129,030,724.
57,185,783.61 57,185,783.61 -12,791,541.07 965,327,582.35 45,365,006.05 45,365,006.05 138,646,142.44
turbine 58
Power Co.,
Ltd.
Hangzhou
Steam
Turbine 440,567,136.33 38,954,001.53 38,954,001.53 47,073,898.27 399,826,617.21 6,380,539.56 6,380,539.56 8,622,853.35
Casting Co.,
Ltd.
Hangzhou
306,725,335.41 73,475,561.54 73,475,561.54 59,196,312.51 260,189,124.48 60,159,163.03 60,159,163.03 85,666,692.51
Steam
181
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Turbine
Machinery
Equipment
Co., Ltd.
Hangzhou
Steam
Turbine
641,491,513.58 73,412,199.71 73,412,199.71 69,737,086.31 580,199,593.39 39,047,221.22 39,047,221.22 10,012,475.18
Auxiliary
Machinery
Co., Ltd.
(4) Significant restrictions of using enterprise group assets and pay off enterprise group debt
None
(5) Provide financial support or other support for structure entities incorporate into the scope of
consolidated financial statements
None
2. The transaction of the Company with its owner’s equity share changed but still controlling the subsidiary
(1) Significant joint venture arrangement or associated enterprise
None
（2）Affect of the transaction on the minority equity and owner's equity attributable to the parent company
None
3. Equity in joint venture arrangement or associated enterprise
(1) Significant joint venture arrangement or associated enterprise
None
(2) Main financial information of significant joint venture
None
(3) Main financial information of significant associated enterprise
None
(4) Summary financial information of insignificant joint venture or associated enterprise
In RMB
Year-end balance/ Amount of current Year-beginning balance/ Amount of
period previous period
182
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Joint venture： -- --
Total amount of the pro rata calculation of
-- --
the following items
Associated enterprise： -- --
Total book value of the investment 23,355,441.61 22,129,585.83
Total amount of the pro rata calculation of
-- --
the following--Net profit ms
-Nit profit -1,927,761.28 -1,500,653.46
--Total comprehensive income -1,927,761.28 -1,500,653.46
(5) Note to the significant restrictions of the ability of joint venture or associated enterprise transfer funds to the
Company
None
(6) The excess loss of joint venture or associated enterprise
None
(7) The unrecognized commitment related to joint venture investment
None
(8) Contingent liabilities related to joint venture or associated enterprise investment
None
4. Significant common operation
None
5. Equity of structure entity not including in the scope of consolidated financial statements
None
6.Other
X. Risks related to financial instruments
The objective of the Company’s risk management is to achieve a balance between the risk and gains. Constrain the
negative influence on business operation to the lowest limit, and maximum the interests of shareholders and other
equity holders. With regard to this target, the basic policies of the Company are; locate and analyse the risks, set
appropriate bottom line for risks, and manage and monitor on each risk and constrain them in a certain extent.
Risks attached to financial instruments are mainly credit risks, liquidity risks, and market risks.
The following risk managing policies have been examined and approved by the management:
(I) Credit risks
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Credit risks are introduced when one party of the financial instrument failed to exercise its liabilities and then
caused financial loss to another.
1. Credit risk management practice
(1) Evaluation method of credit risk
On each balance sheet date, the company evaluates whether the credit risk of relevant financial instruments
has increased significantly since the initial confirmation. When determining whether the credit risk has increased
significantly since the initial confirmation, the company considers to obtain reasonable and reliable information
without unnecessary extra costs or efforts, including qualitative and quantitative analysis based on historical data,
external credit risk rating and forward-looking information. Based on a single financial instrument or a
combination of financial instruments with similar credit risk characteristics, the company compares the risk of
default of financial instruments on the balance sheet date with the risk of default on the initial confirmation date to
determine the change of default risk of financial instruments during their expected duration.
When one or more of the following quantitative and qualitative criteria are triggered, the company believes
that the credit risk of financial instruments has increased significantly:
1) The quantitative standard is mainly that the probability of default for the remaining duration on the
balance sheet date rises by more than a certain proportion compared with the initial confirmation;
2) Qualitative criteria mainly include significant adverse changes in the debtor's operation or financial
situation, changes in existing or expected technology, market, economic or legal environment, and significant
adverse effects on the debtor's repayment ability of the company.
(2) Definition of default and credit impairment assets
When a financial instrument meets one or more of the following conditions, the company defines the
financial asset as having defaulted, and its criteria are consistent with the definition of having incurred credit
impairment:
1) The debtor has major financial difficulties;
2) The debtor violates the binding provisions on the debtor in the contract;
3) The debtor is likely to go bankrupt or undergo other financial restructuring;
4) The creditor gives concessions that the debtor will not make under any other circumstances due to
economic or contractual considerations related to the debtor's financial difficulties.
2. Measurement of expected credit loss
Key parameters of expected credit loss measurement include default probability, loss given default and
default risk exposure. The company considers the quantitative analysis and forward-looking information of
historical statistical data (such as counterparty rating, guarantee method, collateral type, repayment method, etc.)
to establish default probability, loss given default and default risk exposure models.
3. Please refer to Notes V (I)3, V (I)4，V (I)7 and V(I)9 of these financial statements for details of the
reconciliation statement of the opening balance and closing balance of the financial instrument loss reserve.
4. Credit risk exposure and credit risk concentration
The company's credit risk mainly comes from monetary funds and receivables. In order to control the
above-mentioned related risks, the company has taken the following measures respectively.
(1) Monetary fund
The company deposits bank deposits and other monetary funds in financial institutions with high credit rating,
so its credit risk is low.
(2) Account receivable
184
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
The Company performs credit assessment on the clients on periodic and constant basis. Results suggested by the
assessment are used by the Company to determine clients with higher ranks and to overlook the rest. This was
conducted to avoid risks brought by material bad debts.
As the Company only does business with recognized and reputable third parties, so no collateral is needed.
Credit risks are centralized managed in accordance with customers. As of December 31, the Company has a
characteristic of specific credit risk concentration. 45.12% (December 31, 2019: 36.59%) of the Company's
accounts receivable comes from the top five customers. The Company does not hold any collateral or other credit
enhancement for the balance of accounts receivable.
The maximum credit risk exposure the company is subject to is the book value of each financial asset in the
balance sheet.
(II) Liquidation risks
Liquidation risks are the possibilities of short in cash at fulfilling liabilities of payment or settlement for financial
assets. They may be caused by failing to cash financial assets at fair value instantly; debtors’ failing of paying
debts due; debts due before schedule; or failing of generating expected cash flow.
To handle these risks, the Company adopted multiple measures such as note clearance and bank loans.
Long-term and short-term financing approaches were used to maintain balance between constancy and flexibility.
The Company has obtained credit from multiple banks to satisfy the needs of business operation and capital
output.
Categorizing of financial liabilities on remained period to due
Items End of term
Book value Contract amount not within 1 year 1-3 years Over 3 years
discounted
216,722,803.41 220,397,679.44 220,397,679.44
Short-term loans
Notes payable 230,724,303.75 230,724,303.75 230,724,303.75
1,207,797,820.78
Account payable 1,207,797,820.78 1,207,797,820.78
Other payable 75,212,591.46 75,212,591.46 75,212,591.46
Non-current liabilities due to 1,001,088.89 1,029,672.22 1,029,672.22
1 year
Long-term loan 21,623,520.00 23,257,288.89 856,128.00 22,401,160.89
156,163,666.66 161,300,000.00 28,860,000.00 56,748,000.00 75,692,000.00
Long-term payable(Note)
Subtotal 79,149,160.89 75,692,000.00
1,909,245,794.95 1,919,719,356.54 1,764,878,195.65
(Continued)
Items Beginning of term
Book value Contract amount not within 1 year 1-3 years Over 3 years
discounted
185
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
97,840,187.21 99,448,165.24 99,448,165.24
Short-term loans
Notes payable 227,961,541.12 227,961,541.12 227,961,541.12
Account payable 1,030,408,716.74 1,030,408,716.74 1,030,408,716.74
Other payable 82,148,405.19 82,148,405.19 82,148,405.19
Non-current liabilities due to 200,319.30 205,283.05 205,283.05
1 year
Long-term loan 22,435,762.23 23,820,343.69 23,820,343.69
183,554,599.99 190,484,000.00 29,184,000.00 57,396,000.00 103,904,000.00
Long-term payable(Note)
1,644,549,531.78 1,654,476,455.03 1,469,356,111.34 81,216,343.69 103,904,000.00
Subtotal
Note: Exclusive of special accounts receivable
(III) Market risks
Market risks are those brought by change of fair value or expectable cash flow of financial instruments due to
change of market prices, mainly interest risks and exchange rate risks.
1. Interest risks
Interest risks are those brought by change of fair value or expectable cash flow of financial instruments due to
change of interest rates, mainly regards the loans at floating interest rates.
Fixed-rate interest-bearing financial instruments expose the Company to fair value interest rate risks, while
floating-rate interest-bearing financial instruments expose the Company to cash flow interest rate risks. The
Company determines the ratio of fixed interest rate to floating interest rate financial instruments according to the
market environment, and maintains an appropriate portfolio of financial instruments through regular review and
monitoring. The cash flow interest rate risk faced by the Company is mainly related to the bank borrowings with
floating interest rates.
As of December 31, 2020, the company's bank borrowings with floating interest rate were RMB
22,600,000.00 (December 31, 2019: RMB 19,000,000.00). Under the assumption that other variables remain
unchanged, assuming that the interest rate changes by 50 benchmark points, there will be no significant impact on
the company's total profits and shareholders' equity.
2. Foreign currency risks
Foreign currency risks (exchange rate risks) are those caused by change of fair value or expectable cash flow
of financial instruments due to fluctuation of exchange rates. These risks are mainly related to foreign currency
assets and liabilities. The Company operates in mainland China and mostly uses RMB as standard currency,
therefore no major risks regarding exchange rates. For details of foreign currency assets and liabilities, please go
to the descriptions in the notes to the consolidated financial statements.
Details of the company's foreign currency monetary assets and liabilities at the end of the period are
described in note V (IV) 2 to the Financial Statements.
186
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
XI. The disclosure of the fair value
1. Closing fair value of assets and liabilities calculated by fair value
In RMB
Closing fair value
Items Fair value measurement Fair value measurement Fair value measurement
Total
items at level 1 items at level 2 items at level 3
Consistent fair value
-- -- -- --
measurement
1. Transactional financial assets
and other non-current financial 1,681,809.34 1,038,376,081.45 1,040,057,890.79
assets
Financial assets classified
as fair value through profit or 1,681,809.34 1,038,376,081.45 1,040,057,890.79
loss
Financing product 1,020,000,000.00 1,020,000,000.00
Equity instrument investment 1,681,809.34 18,376,081.45 20,057,890.79
2. Financing receivable 774,663,468.76 774,663,468.76
3. Other equipment
814,851.80 814,851.80
instrument investment
4. Investment in other equity
4,056,378,073.52 4,056,378,073.52
instruments
Total liabilities of consistent fair
4,058,059,882.86 1,813,854,402.01 5,871,914,284.87
value measurement
II. Non-continuous fair value
-- -- -- --
measurement
2. Market price recognition basis for consistent and inconsistent fair value measurement items at level 1
The company adopts unadjusted quotations on active markets for the same assets that can be obtained on the
measurement date.
3. Continuous and non-continuous third-level fair value measurement items, using valuation techniques and q
ualitative and quantitative information on important parameters
1. For held short-term wealth management products with floating income and equity instrument investments,
the company adopted valuation techniques for fair value measurement, mainly using a discounted future cash flow
model.
2. Financing of receivables means that the measurement mode held by the company is bills receivable that ar
e measured at fair value and whose changes are included in other comprehensive income. Cost represents the best
187
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
estimate of fair value, so the cost is used to confirm its fair value .
4. Sensitiveness analysis on unobservable parameters and adjustment information between opening and closing
book value of consistent fair value measurement items at level 3
None
5. Explain the reason for conversion and the policy governing when the conversion happens if conversion happens
among consistent fair value measurement items at different levels
None
6. Changes in the valuation technique in the current period and the reason for change
None
7. Fair value of financial assets and liabilities not measured at fair value
None
8. Other
None
XII. Related party and related Transaction
1. Information related to parent company of the Company
Name of the parent Registered Registered Shareholding ratio in the Voting ratio in the
Business nature
company place capital Company (%) Company (%)
Hangzhou Steam Hangzhou 800 million
Manufacturing 63.64% 63.64%
Turbine Group China yuan
Hangzhou Municipal Government State-owned Asset Supervisory Committee is the ultimate controller of the
Company.
2.Subsidiaries of the enterprise
For details of subsidiaries please go to the statement of equities in other entities.
3. Situation of joint ventures and associated enterprises
For details of joint ventures and associated enterprises please go to the statement of equities in other entities.
4. Other related parties
Name of the related parties Relationship with the Company
188
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
The parent company of Hangzhou Steam Turbine
Hangzhou State-owned Capital Investment and Operation Co., Ltd.
Group
Hangzhou Steam turbine Automobile sales service Co., Ltd. Affiliate of the Group
Hangzhou Hangfa Power Generating Equipment Co., Ltd. Affiliate of the Group
Hangzhou Steam Turbine Engineering Co., Ltd. Affiliate of the Group
Hangzhou Steam Turbine Compressor Co., Ltd. Affiliate of the Group
China Electrical and Mechanical Institute-Hangzhou Turbine Group (Hangzhou)
Affiliate of the Group
United Research Institute Co., Ltd.
Hangzhou Steam Turbine Industry & Trade Co., Ltd. Affiliate of the Group
Hangzhou Xiangjiang Technology Co., Ltd. Affiliate of the Group
Hangzhou Steam Turbine Power Technology Co., Ltd. Affiliate of the Group
Hangzhou Nanhua Wooden Packaging Co., Ltd. Affiliate of the Group
Greenesol power systems PVT Ltd. Shareholding enterprise
Hangzhou Bank Shareholding enterprise
Hangzhou Oxygen Machine Group Co., Ltd Affiliates of Hangzhou Capital
Hangzhou Hangzhou Oxygen Turbine Machinery Co., Ltd Affiliates of Hangzhou Oxygen Company
Zhumadian Hangzhou Oxygen Gas Co. Ltd Affiliates of Hangzhou Oxygen Company
Hangzhou Hangzhou Oxygen Air Separation Spare Parts Co., Ltd Affiliates of Hangzhou Oxygen Company
Other note:
Hangzhou Nanhua Wooden Packaging Co., Ltd. had cancelled its industrial and commercial registration on Nove
mber 20, 2019.
5.Related transaction
(1) Sale of goods/rendering of labor services/labor service offering
Purchase of goods and service
In RMB
Over the
Content of related Amount of current Amount of previous trading Amount of last
Related parties
transaction limit or period
period period
not?
Hangzhou Hangfa Generating
Generators 182,402,202.41 175,890,266.00 是 170,649,513.49
Equipment Co., Ltd.
Hangzhou Steam turbine Transportation , repair ,
64,114,317.26 77,463,982.00 否 75,747,115.51
Automobile sales service Co., Ltd. etc.
Hangzhou Steam Turbine Industry Grind fee, Bagging 13,526,650.94 16,300,000.00 否 7,651,361.41
189
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
& Trade Co., Ltd.
Hangzhou Nanhua Wooden
Packaging 7,475,986.05
Packaging Co., Ltd.
Hangzhou Steam Turbine Raw material, Technical
2,815,912.51 860,000.00 是 10,560,435.79
Engineering Co., Ltd. service
China Electrical and Mechanical
Institute-Hangzhou Turbine Group Raw materials,
2,575,133.31 2,000,000.00 是 633,256.20
(Hangzhou) United Research Development ,design
Institute Co., Ltd.
Zhejiang Zhongrun Gas Turbine Part
779,192.90 是 3,321,336.56
Technology Co., Ltd.
Total 266,213,409.33 272,514,248.00 276,039,005.01
Related transactions regarding sales of goods or providing of services
In RMB
Subjects of the related
Related parties Current term Same period of last term
transactions
Hangzhou Steam Turbine Steam Turbine, Compressor,
61,274,628.99 38,100,415.44
Engineering Co., Ltd. Installation service
Hangzhou Hangfa Generating Cast parts
9,655,050.38 6,868,272.76
Equipment Co., Ltd.
Greenesol power systems PVT Ltd. Part 2,132,934.52 1,391,458.89
Training fees, labour
Hangzhou Steam Turbine Group 18,866.78 1,405.80
insurance costs
Zhejiang Ranchuang Turbine
Training fees 6,719.81
Company
Hangzhou Steam Turbine
Small amount materials 355.52 230.34
Automobile Sales Service Co., Ltd.
Total 73,088,556.00 46,361,783.23
(2) Related trusteeship/contract
None
(3) Information of related lease
- The company was lessee：
In RMB
190
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
The lease income Category of leased
Lessor Category of leased assets
confirmed in this year assets
HSTG Land use right 1,851,893.61 4,952,721.83
HSTG Engineering Equipment 1,823,008.85 2,685,394.16
HSTG House and Building 1,946,222.97 2,391,778.35
Hangzhou Steam Turbine Industry & Trade Co., Ltd. House &Building
2,671,383.95 2,065,029.36
Hangzhou Steam Turbine Industry & Trade Co., Ltd. Site leasing 1,462,358.49 348,623.85
House &Building
Hangzhou Xiangjiang Technology Co., Ltd. 95,457.93
Hangzhou Steam Turbine Automobile Sales Service
Car rental 21,238.94
Co., Ltd.
Total 9,871,564.74 12,443,547.55
The Company was lessee：
None
（4）Related-party guarantee
The Company was guarantor
In RMB
Execution
Guarantor Guarantee amount Start date End date
accomplished or not
HSTG 155,000,000.00 December 28,2016 December 22,2026 No
The Company was secured party
In RMB
Execution
Guarantor Guarantee amount Start date End date
accomplished or not
HSTG 50,000,000.00 November 23,2020 October 29,2021 No
HSTG 100,000,000.00 June 9,2020 June 7,2021 No
Hangzhou Steam Turbine
3,230,000.00 November 11,2020 May 11,2021 No
Power Technology Co., Ltd.
Hangzhou Steam Turbine
14,400,000.00 December 14,2020 June 14,2021 No
Power Technology Co., Ltd.
191
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Note
(1) The company and its subsidiaries as guarantors
As stated in Note 5 (I) 30(2)2 of the financial statement, Since 2019,In accordance with the National
Development Fund Investment Contract, jointly signed by the Company, NDF, Turbine Industry Company and
Hangzhou Steam Turbine Group, the investment of the NDF on Turbine Industry Company, RMB 208,000,000.00,
is repurchased by the Hangzhou Steam Turbine Group, and the NDF asks the Company and Hangzhou Steam
Turbine Group to provide guarantee for the fulfillment of Hangzhou Steam Turbine Group of the transferee equity
obligations. The Company and Steam Turbine Company pledge to the NDF with a total of 45.08 million shares of
Hangzhou Bank Co., Ltd. with book value of RMB672,593,600.00,Dividend Receivable of RMB43,605,292.60,
Steam Turbine heavy Industry Co., Ltd. mortgaged the book value of63,705,181.37 yuan of land use rights and
book value of 441,069,524.00 yuan of fixed assets and book value of 265,737,787.54 yuan of construction in
progress to the National Development Fund.
(5) Inter-bank lending of capital of related parties
None
（6）Related party asset transfer and debt restructuring
In RMB
Related party Content Current term Same period of last term
Hangzhou Steam Turbine Automobile
Purchase fixed assets 225,663.72 131,110.93
Sales Service Co., Ltd.
（7） Remunerations of key managements
In RMB
Items Current term Same period of last term
Remunerations of key managements 7,318,444.28 7,939,624.37
(8) Other related transactions
(1) Service and power supply
1）HSTG supplies water and power to the Company and some of the subsidiaries amounted to RMB 9,561,517.13
this period.
2）HSTG. provides property management services for its subsidiary which is Complete Technology
Corporation, of which the fee of this period incurred in the property management is RMB2,204,485.53.
3) Hangzhou Steam Turbine Automobile Sales & Service Co., Ltd. provided transportation to the Company’s
employees and RMB2,184,648.80 was paid this period.
4) Hangzhou Steam Turbine Automobile Sales & Service Co., Ltd. provides site management services for the
company. RMB1,906,415.10 is paid in this regard for the current period.
5) Hangzhou Steam Turbine Industry & Trade Co., Ltd. provides garbage clearance services for the company.
192
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
RMB 296,201.26 is paid in this regard for the current period.
6) Hangzhou Steam Turbine Industry & Trade Co., Ltd. provides site management services for the company.
RMB1,185,286.79 is paid in this regard for the current period.
(2) Using of trademark
The Company pays RMB1,698,113.21 to HSTG for using of the registered trademark.
(3) Expenses paid on behalf the Company
During the current period, HSTG advanced the payment of RMB 878,770.07 salaries for the company. Advanced
for paying the fees of 2,494.39 yuan for other payment.
(4) Bank credit and entrusted wealth-management
1) The Company applied for a line of credit of RMB 300 million to Shiqiao Sub-branch, Bank of Hangzhou Co.,
Ltd. and till December 31, 2020, the balance of loan under the line of credit was still RMB 50,000,000.000.
2) The Company entered into a financial management agent contract with Bank of Hangzhou Co., Ltd. in the
cumulative amount of financial management of RMB 1,345,000,000.00 and till December 31, 2020, the balance of
the financial management was RMB 890,000,000.00.
3)The company applied to Hangzhou Bank Co., Ltd. for bill discount in the current period, with an
accumulated discount amount of 83,776,663.90 yuan, and a discount interest of1,518,602.29 yuan.
6. Receivables and payables of related parties
（1）Receivables
In RMB
End of term Beginning of term
Name Related party Bad debt
Book balance Bad debt provision Book balance
provision
Hangzhou Steam Turbine
Notes receivable 3,000,000.00
Engineering Co., Ltd.
Hangzhou Hangfa Generating
3,000,000.00
Equipment Co., Ltd.
Subtotal 6,000,000.00
Account Hangzhou Steam Turbine
36,758,818.00 27,172,181.70 43,013,317.41 14,600,295.53
receivable Engineering Co., Ltd.
Hangzhou Hangfa Generating
13,250,394.22 779,529.08 17,554,187.37 1,502,203.97
Equipment Co., Ltd.
Greenesol power systems PVT Ltd. 13,806,255.54 13,806,255.54 14,761,176.40 14,761,176.40
Hangzhou Oxygen Co., Ltd 5,385,000.00 5,385,000.00
193
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Hangzhou Hangzhou Oxygen
9,550,500.00 9,485,400.00
Turbine Machinery Co., Lt
HSTG 158,500.00 158,500.00 158,936.29 158,521.81
Hangzhou Steam Turbine
59,000.00 59,000.00 59,000.00 47,200.00
Compressor Co., Ltd’
Zhumadian Hangzhou Oxygen Gas
14,800.00 740.00
Co. Ltd
Subtotal 78,983,267.76 56,846,606.32 75,546,617.47 31,069,397.71
Financing Hangzhou Hangfa Generating
6,000,000.00
receivable Equipment Co., Ltd.
Subtotal 6,000,000.00
Hangzhou Hangfa Generating
Prepayment 1,290,000.00 3,020,960.00
Equipment Co., Ltd.
Subtotal 1,290,000.00 3,020,960.00
Hangzhou Xiangjiang Technology
Other receivable 601,384.98 30,069.25
Co., Ltd.
Hangzhou Steam Turbine
69,694.56 3,484.73
Automobile Sales Service Co., Ltd.
HSTG 19,628.00 981.40 78,221.03 13,687.39
Hangzhou Steam Turbine Industry
27,841.00 1,392.05
& Trade Co., Ltd.
Subtotal 718,548.54 35,927.43 78,221.03 13,687.39
Hangzhou Steam Turbine
Contract assets 6,087,500.00 387,500.00 1,568,300.00 138,230.00
Engineering Co., Ltd.
Subtotal 6,087,500.00 387,500.00 1,568,300.00 138,230.00
（2）Payables
In RMB
Name Related party Amount at year Amount at year beginning
Hangzhou Hangfa Generating
Account payable 85,515,939.33 81,467,799.85
Equipment Co., Ltd.
Hangzhou Steam Turbine Automobile
22,854,634.24 16,258,569.66
Sales Service Co., Ltd.
Hangzhou Steam Turbine Industry &
1,105,678.64 4,249,563.88
Trade Co., Ltd.
Hangzhou Steam Turbine Engineering
1,277,000.00 2,955,000.00
Co., Ltd.
Greenesol power systems PVT Ltd. 1,878,235.27 2,008,144.93
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
HSTG 886,447.75
Zhejiang Zhongrun Gas turbine
243,311.12 555,637.12
technology Co., Ltd.
China Electrical and Mechanical
Institute-Hangzhou Turbine Group
242,457.32 120,209.00
(Hangzhou) United Research Institute
Co., Ltd.
Subtotal 113,117,255.92 108,501,372.19
Hangzhou Hangfa Generating
Notes payable 6,810,000.00
Equipment Co., Ltd.
Hangzhou Steam Turbine Industry &
400,000.00 300,000.00
Trade Co., Ltd.
Hangzhou Steam Turbine Automobile
660,000.00 195,000.00
Sales Service Co., Ltd.
Subtotal 1,060,000.00 7,305,000.00
Hangzhou Steam Turbine Compressor
Contract liabilities 12,760,000.00
Co., Ltd.
Hangzhou Steam Turbine Engineering
28,459,288.00 12,024,769.03
Co., Ltd.
Hangzhou Steam Turbine Power Group
16,378,000.00 3,618,000.00
Co., Ltd.
Hangzhou Oxygen Air Separation Spare
167,015.00
Parts Co., Ltd
Greenesol power systems PVT Ltd. 145,052.57
Subtotal 45,149,355.57 28,402,769.03
Hangzhou Steam Turbine Automobile
Other payable 100,000.00 100,000.00
Sales Service Co., Ltd
HSTG 59,033.62 47,114.51
Hangzhou Steam Turbine Industry &
27,840.40
Trade Co., Ltd.
Subtotal 186,874.02 147,114.51
7. Related party commitment
8.Other
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
XIII. Stock payment
None
XIV. Commitments
1.Significant commitments
Significant commitments at balance sheet date
1. External investment contracts engaged but not exercised or not fully exercised and related financial outflow
As stated in Note 5 (I) 29 (2)2 of the financial statement, As of December 31, 2020,Hangzhou Steam Turbine
Group has bought back the investment of 53 million yuan from the national development fund and resold it to the
company at the same price. According to the relevant agreements in the Investment Contract of the National
Development Fund and the Equity Transfer Agreement in the repurchase phase, the remaining 155 million yuan of
investment in the National Development Fund will need to be repurchased in phases within the next 6 years.
2. Outsourcing contracts engaged with large amounts and are under processing or preparation
As of December 31, 2020, Construction contracts and contracts which are performed or ready for being
performed by the Company and its subsidiaries for the sake of plant construction are valued about RMB 304.1252
million.
3.With regard to bank letters of credit opened by the Company and its subsidiaries, the outstanding balance till
December 31, 2020 is as follows:
Name Bank Currency Amount Way of guarantee
The Company ICBC Banshan Branch USD 77,219.00 Credit
The Company ICBC Banshan Branch Euro 14,967,650.00 Credit
The Company ICBC Banshan Branch Yen 49,192,000.00 Credit
The Company ICBC Banshan Branch Swing franc 116,500.00 Credit
The Company ICBC Banshan Branch Euro 484,895.00 Credit
The Company China Bank Hangzhou Branch USD 3,520,000.00 Credit
The Company China Bank Hangzhou Branch EURO 1,484,000.00 Credit
The Company China CITIC Bank Hangzhou USD 2,800,345.00 Credit
Branch
The Company China CITIC Bank Hangzhou EURO 1,011,000.00 Credit
Branch
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
4. With regard to bank letters of Guarantee opened by the Company and its subsidiaries, the outstanding balance till
December 31, 2020 is as follows:
Name Bank Currency Amount Way of guarantee
The Company ICBC Banshan Branch RMB 67,918,631.03 Credit
The Company ICBC Hangzhou Branch RMB 100,278,781.00 Credit
The Company Everbright Bank Hangzhou RMB 5,288,000.00 Credit
Qianjiang Branch
The Company Hangzhou Bank Shiqiao Branch RMB 900,000.00 Guarantee
The Company China Bank Hangzhou Branch USD 12,862,763.59 Credit
The Company China Bank Hangzhou Branch RMB 59,950,163.85 Credit
The Company China Bank Hangzhou Branch USD 888,000.00 Credit
The Company China Bank Hangzhou Branch RMB 33,105,790.50 Credit
Packaged Tech. Co. Hangzhou Bank Shiqiao Branch RMB 905,000.00 Guarantee
Packaged Tech. Co. ICBC Wulin Branch RMB 1,188,000.00 Credit
Guoneng Company ICBC Banshan Branch USD 3,658,693.70 Credit
Guoneng Company ICBC Banshan Branch EURO 218,050.00 Credit
Auxiliary Company ICBC Banshan Branch RMB 37,207,715.52 Credit
Machinery Co. ICBC Banshan Branch RMB 7,436,899.10 Credit
Turbine Co. China CITIC Bank Chengxi Branch RMB 18,567,666.47 Credit
Turbine Co. ICBC Banshan Branch RMB 6,350,000.00 Credit
Zhongneng Company China bank Qiantangjiang Branch RMB 67,798,736.60 Credit
(II). Contingency
(1) For details of guarantees provided for related parties, please refer to the notes for related parties and related
transactions in the note X (II)3 to this financial statement.
(2) Litigation matters
On December 19, 2019, subsidiary Zhongneng Company filed a lawsuit with the Shanshan County People's
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Court of Xinjiang Uygur Autonomous Region, requesting that Hesheng Electric Power (Shanshan) Co., Ltd. be
ordered to pay the purchase price of 11,810,000.00 yuan and pay compensation for overdue payment (311,162.00
yuan from the bank's benchmark loan interest rate for the same period to the actual date of payment and
159,642.00 yuan from the date of the lawsuit temporarily), totaling 12,121,162.00 yuan. It sued Hesheng Electric
Industry (Shanshan) Co., Ltd., demanding that it pay RMB 4,470,000.00 for goods and RMB 159,642.00 for
compensation for late payment (calculated according to the benchmark loan interest rate of the bank for the same
period to the actual payment date, and now temporarily calculated to the prosecution date), totaling RMB
4,629,642.00. On December 28, 2020, Shanshan County People's Court made a judgment and ordered Hesheng
(Shanshan) Energy Management Co., Ltd. to issue Zhongneng Company's payment and overdue payment
compensation totaling RMB 12,300,941.00, and bear the overdue payment compensation; It ordered Hesheng
Electric Industry (Shanshan) Co., Ltd. to pay the purchase price of RMB 4,470,000.00 and bear the compensation
for overdue payment. Both Hesheng (Shanshan) Energy Management Co., Ltd. and Hesheng Electric Power
(Shanshan) Co., Ltd. refused to accept the judgment and appealed to the Intermediate People's Court of Turpan
City, Xinjiang Uygur Autonomous Region. As of the submission date of the financial statements, the above cases
are still under trial.
(2) The Company have no significant contingency to disclose, also should be stated
None
5.Other
XV. Events after balance sheet date
(I) Important non-adjusting events
None
2.Profit distribution
None
3. Sales return
None
4. Notes of other significant events
(1) Important non-adjusting matters
1. Important Litigation matters
In 2013, the subsidiary turbine company and Sinosteel Equipment Co., Ltd (hereinafter referred to as
Sinosteel Equipment) signed the Supply Contract for M251S Gas Turbine Generator Unit, while the company also
signed a corresponding supply contract with the turbine company. Due to a dispute between Sinosteel Equipment
and its customer Anhui First Mining Dachang Metal Materials Co., Ltd., some of the supply contracts were
terminated, resulting in the above-mentioned supply contracts between Sinosteel Equipment and the Company
being unable to be performed. As the relevant procurement expenses of the company have already occurred, in
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
order to reduce the losses, the Company sued its subsidiary turbine company in April 2019,
Apply to terminate the above supply contract, and meanwhile list Sinosteel Equipment Company as the third party
in the lawsuit,demanding them to jointly compensate the company's losses of 208,110,331.00 yuan.
On June 30, 2020, the Hangzhou Intermediate People's Court ruled that Turbo Company shall pay 100 million yua
n compensation to the Company. Sinosteel Equipment Company refused to accept the judgment and filed an appe
al to the Zhejiang Higher People's Law. On December 24, 2020, Zhejiang Higher People's Court rejected the appe
al filed by Sinosteel Equipment Company. In March 2021, Turbo Company and Sinosteel Equipment Company re
ached a settlement on the compensation for the project. Sinosteel Equipment Company paid 109 million yuan in c
ompensation to Turbo Company, and Turbo Company paid 100 million yuan in compensation to the Company.
2.External investment
On November 25, 2020, the Company's first extraordinary general meeting of shareholders reviewed and
approved the "Proposal on the Company's Proposal to Participate in the Subscribing of Convertible Bonds of
Bank of Hangzhou". Proposal content: Bank of Hangzhou held a general meeting of shareholders on September
30, 2020, approved the "Proposal on Conditions for the Public Issuance of A-Share Convertible Corporate
Bonds"-which will issue convertible bonds not exceeding 15 billion yuan to support the future business
development of Bank of Hangzhou. This convertible bond issuance by Bank of Hangzhou grants the original
shareholders a preemptive right of allotment, and the Company has a preemptive right to subscribe. Currently,
Bank of Hangzhou has a total share capital of 5,930,200,432 shares. The Company holds 271,875,206 shares of
Bank of Hangzhou. Therefore, the Company intends to participate in the subscription of the convertible bonds
issued by Bank of Hangzhou at a shareholding ratio of 4.58%. According to the issuance scale of Bank of
Hangzhou and the Company's shareholding situation, the Company's capital required to subscribe for the Bank of
Hangzhou convertible bonds based on the allotment is estimated to be 687 million yuan. On March 29, 2021, the
Company subscribed for 6,875,720 bank of Hangzhou convertible bonds through the trading system, with a unit
price of 100 yuan per bond, and the subscription amount was 687,572,000.00 yuan. On April 2, 2021, the Bank of
Hangzhou disclosed the "Announcement on the Results of Public Offering of Convertible Corporate Bonds".
The Hangyin Convertible Bonds that the Bank of Hangzhou finally gave priority to the issuer’s original ordinary
shareholders (including ordinary shareholders with restricted sales-conditions) was 6,351,049,000 yuan,
accounting for approximately 42.34% of the total issuance. The Company's subscription amount has been fully
allotted, and the Company holds 6,875,720 Bank of Hangzhou convertible bonds.
Distribution of profits after balance sheet date
Based on the 2020 profit distribution plan reviewed and passed at the 10th
meeting of the 8th Board of Directors on April 15 , 2021, In 2020, with
the total share capital of 754,010,400 shares at the end of the
Profit or dividend proposed to be distributed year deducting treasury shares repurchased as of date of record
by Company, the Company would distribute cash dividend to all the
shareholders at the rate of CNY 2.5 for every 10 shares (with tax
inclusive) , The afore-said profit distribution plan still needs to be
reviewed and approved by the shareholders' general meeting.
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
XVI.Other significant events
1. The accounting errors correction in previous period
None
2. Debt restructuring
None
3. Replacement of assets
None
4. Pension plan
None
5. Discontinuing operation
None
6. Segment information
(1) Recognition basis and accounting policies of reportable segment
None
(2) The financial information of reportable segment
None
(3) There was no reportable segment, or the total amount of assets and liabilities of each part of reportable
segment, shall disclose the reason.
The Company is single in its business, which is mainly for production and sales of steam turbines, gas turbines
and auxiliary turbines. The company’s management regard these businesses as a whole to implement management
so as to evaluate the business performance, thus there will be no report divisions. According to the product
classifications of main business income and main business cost, the Company will make details for them as
follows:
Items Main Business Income Main Business Cost
3,389,671,162.40 2,356,880,248.88
Industrial Steam Turbine
160,896,527.13 127,741,579.13
Castings and Forging
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
310,472,958.92 234,011,932.20
Auxiliary Engines
321,384,293.41 187,440,132.04
Part
286,802,375.74 141,291,299.48
Other
4,469,227,317.60 3,047,365,191.73
Subtotal
7. Other important transactions and events have an impact on investors’ decision-making
None
8. Other
According to the planning of the Hangzhou Municipal Government, the property right bodies of 6 companies
including Hangzhou Steam Turbine Group and Hangzhou Steam Turbine Company within the plant area of
Hangzhou Steam Shiqiao Road factory area were included in the scope of the Expropriation and Relocation
Planning. According to the Hangzhou Municipal People's Government's Minutes (Hangfu Minutes [2016] No. 87)
on the relevant issues concerning the compensation for the relocation of the Steam Turbine Shiqiao road plant area
and the spirit of the minutes (Hangfu Minutes [2016] No. 47)of the special meeting of Hangzhou Municipal
people's Government on the relevant issues concerning speeding up the relocation of the Shiqiao Road Factory
area of Hangzhou Steam Turbine and the Construction of the Hangzhou Steam Turbine Heavy Industry Project,
Hangzhou Municipal Government, in accordance with the principle of "one factory, one policy", determines that
the compensation for the overall relocation of the plant area of Hangzhou Steam Turbine Shiqiao road plant is
RMB 1.815 billion, with the compensation contents include the compensation for physical assets such as
buildings, structures, housing renovations, equipment, and land within the area of relocation, as well as personnel
resettlement fees, compensation fees for shutdown loss and production stoppage loss and incentive fees, and the
compensation agreement shall be signed by the Xiacheng Urban Construction Investment Group-the land-making
main-body affiliated to Hangzhou Xiacheng District Municipal Government with each relocation unit.
On March 21, 2018, based on the evaluation opinion of Kunyuan Assets Appraisal Co., Ltd (No. 606-2017
Kunnyuan Appraisal Report, No. 609-2017 Kunnyuan Appraisal Report, No. 18-2018 Kunnyuan Appraisal
Report,), the company signed the “Relocation Compensation Agreement for Non-residential Buildings on
State-owned Land” with Xiacheng Urban Construction Investment Group, and determined that Xiacheng Urban
Construction Investment Group shall make full monetary relocation compensation for the Company and its
subsidiary the Machinery Company, with the total amount of compensation for various physical assets and
expenses is RMB 1,305,950,300.00 (Including the incentive fee of RMB 34,892,770.00), and this aforementioned
compensation shall be firstly collected by Hangzhou Steam Turbine Group.
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
The Company and its subsidiaries received relocation compensation of230,986,467.90 yuan in the current
period, and the total relocation compensation received is853,093,408.06 yuan, all of which are listed as special
payables. The Company and its subsidiaries incurred relocation expenses of 88,375,107.32 yuan in the current
period, and the total relocation expenses are 112,157,942.63 yuan. The subsidiary steam turbine heavy industry
company incurred an asset purchase and construction expenditure of441,069,524.00 yuan in the current period,
with an accumulated asset purchase and construction expenditure of 493,992,522.25 yuan. The corresponding
special payables carried forward for the current period-relocation compensation of 529,444,631.32 yuan, which is
transferred to deferred revenue. The balance of unused relocation compensation at the end of the period
is246,942,943.24 yuan.
As of December 31, 2020, the relocation plan of the Company and its subsidiaries has been basically complet
ed. According to the relevant provisions of Article 17 and Article 19 of the Announcement of the State Administrat
ion of Taxation (No. 40-2012), the 2020 is the year of the time the relocation shall be completed, and the Compan
y and its subsidiaries shall carry out relocation liquidation. For the enterprise income tax of 179,221,489.19 yuan f
or the relocation liquidation calculated by the tax agency engaged by the Company and its subsidiaries that shall b
e paid includes the tax corresponding to the relocation compensation that has not been received and has not been c
arried forward to other income and this tax amount shall be confirmed as a deferred income tax asset of 178,402,5
89.14 yuan.
XVII. Notes of main items in the financial statements of the Parent Company
1. Accounts receivable
(1) Accounts receivable classified by category
In RMB
End of term Beginning of term
Book balance Bad debt provision Book balance Bad debt provision
Category
Proportio Proportion Book value Proporti Proportion Book value
Amount Amount Amount Amount
n% % on % %
Including
Accrual of bad debt 2,028,54 795,217, 1,233,324,7 1,855,612, 775,111,3 1,080,500,8
100.00% 39.20% 100.00% 41.77%
provision by portfolio 2,002.24 220.72 81.52 269.40 75.42 93.98
Including：
2,028,54 795,217, 1,233,324,7 1,855,612, 775,111,3 1,080,500,8
Total 100.00% 39.20% 100.00% 41.77%
2,002.24 220.72 81.52 269.40 75.42 93.98
Accrual of bad debt provision by portfolio:795,217,220.72
In RMB
202
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
End of term
Name
Book balance Bad debt provision Proportion
Associated transaction portfolio within
the scope of consolidated financial 66,393,371.30
statement
Aging portfolio 1,962,148,630.94 795,217,220.72 40.53%
Total 2,028,542,002.24 795,217,220.72 --
Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of
other receivables if the provision for bad debts of bills receivable is accrued according to the general model of
expected credit loss:
□ Applicable √ Not applicable
Disclosure by aging
In RMB
Aging End of term
Within 1 year（Including 1 year） 627,847,677.43
1-2 years 353,039,526.72
2-3 years 315,064,179.29
Over 3 years 732,590,618.80
3-4 years 131,237,969.68
4-5 years 88,533,946.44
Over 5 years 512,818,702.68
Total 2,028,542,002.24
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision：
In RMB
Amount of change in the current period
Category Opening balance Reversed or Closing balance
Accrual Write-off Other
collected amount
Accrual of bad debt
provision by Single term
Accrual of bad debt
775,111,375.42 18,972,160.09 1,361,491.48 227,806.27 795,217,220.72
provision by portfolio
Total 775,111,375.42 18,972,160.09 1,361,491.48 227,806.27 795,217,220.72
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
(3) The actual write-off accounts receivable
None
（4）The ending balance of account receivables owed by the imputation of the top five parties
In RMB
Name Amount Proportion(%) Bad debt provision
Client 1 745,334,727.98 36.74% 258,434,848.38
Client 2 208,663,283.49 10.29% 146,080,605.53
Client 3 86,675,052.37 4.27% 8,454,551.44
Client 4 58,311,386.93 2.87% 3,401,913.22
Client 5 23,271,127.34 1.15% 6,981,338.20
Total 1,122,255,578.11 55.32%
（5）Account receivable which terminate the recognition owning to the transfer of the financial assets
None
(6)The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts
receivable
None
2. Other account receivable
In RMB
Nature End of term Beginning of term
Dividend receivable 43,605,292.60 27,827,292.60
Other 8,733,700.06 3,240,396.20
Total 52,338,992.66 31,067,688.80
（1）Interest receivable ：None
（2）Dividend receivable
（1）Dividend receivable
In RMB
Items End of term Beginning of term
Hangzhou Bank 43,605,292.60 27,827,292.60
Total 43,605,292.60 27,827,292.60
204
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
2) Significant dividend receivable aged over 1 year
In RMB
Whether occurred
Items Closing balance Aging Reason impairment and its
judgment basis
The Balance of 1-2 year
is11,270,000.00 yuan，The Balance of
Hangzhou Bank 27,827,292.60 2-3 years is 9,657,292.60 yuan，The Equity pledge No
Balance of Over 3 years is
6,900,000.00 yuan.
Total 27,827,292.60 -- -- --
3）Provision for bad debts
□ Applicable √ Not applicable
（3） Other accounts receivable
(1) Other accounts receivable classified by the nature of accounts
In RMB
Nature Closing book balance Opening book balance
Deposit 11,200,823.94 6,599,993.65
Provisional payment receivable 612,831.32 473,078.04
Other 1,703,075.58 1,079,186.43
Total 13,516,730.84 8,152,258.12
2）Bad-debt provision
In RMB
Stage 1 Stage 2 Stage 3
Expected credit Expected credit losses for
Bad Debt Reserves Expected credit loss over Total
losses over the next the entire duration (credit
life (no credit impairment)
12 months impairment occurred)
Balance as at January 1, 2020 122,993.39 29,895.89 4,758,972.64 4,911,861.92
Balance as at January 1, 2020
—— —— —— ——
in current
——Transfer to stage II -18,150.30 18,150.30
——Transfer to stage III -3,934.10 3,934.10
Provision in the current period 299,663.37 -7,811.50 -420,683.01 -128,831.14
205
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
Balance as at December 31,
404,506.46 36,300.59 4,342,223.73 4,783,030.78
2020
Loss provision changes in current period, change in book balance with significant amount
□ Applicable √ Not applicable
Disclosure by aging
In RMB
Aging Closing balance
Within 1 year(Including 1 year） 8,702,960.56
1-2 years 363,005.85
2-3 years 39,341.00
Over 3 years 4,411,423.43
3-4 years 123,425.99
4-5 years 158,158.00
Over 5 years 4,129,839.44
Total 13,516,730.84
3) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision：
In RMB
Amount of change in the current period
Opening
Category Reversed or Closing balance
balance Accrual Write-off Other
collected amount
Accrual of bad debt
provision by 4,911,861.92 -128,831.14 4,783,030.78
portfolio
Total 4,911,861.92 -128,831.14 4,783,030.78
4) The actual write-off accounts receivable
None
(5) Top 5 of the closing balance of Other accounts receivable
In RMB
Account Percentage in total Bad debt
Name of the company Book balance Age
property other receivable % provision
Shanghai Customs Waigaoqiao Office Deposit in 3,710,320.94 Over 5 years 27.45% 3,710,320.94
206
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
custom
Deposit in
Suzhou Weicheng Tender Service Co., Ltd. 1,610,000.00 Within 1 year 11.91% 80,500.00
custom
Sinopec International Business Co., Ltd. Deposit in
1,250,100.00 Within 1 year 9.25% 62,505.00
Wuhan Bidding Center custom
China Shenhua International Engineering Co., Deposit in
1,100,000.00 Within 1 year 8.14% 55,000.00
Ltd. custom
Deposit in
Nantong Jiaxing Thermal Power Co., Ltd. 700,000.00 Within 1 year 5.18% 35,000.00
custom
Total -- 8,370,420.94 -- 61.93% 3,943,325.94
（6）Account receivable involving government subsidies
None
（7）Other account receivable derecognized due to the transfer of financial assets
None
（8）Amount of transfer other account receivable and assets and liabilities formed by its continuous involvement.
None
3. Long-term share equity investment
In RMB
End of term Beginning of term
Items Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investments in
913,732,321.62 913,732,321.62 886,732,321.62 886,732,321.62
subsidiaries
Investments in associates
11,456,132.77 11,456,132.77 11,246,097.13 11,246,097.13
and joint ventures
Total 925,188,454.39 925,188,454.39 897,978,418.75 897,978,418.75
（1）Investments in subsidiaries
In RMB
Company Beginning of term Increase /decrease Closing balance Closing
207
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
invested in Withdrawn balance of
Decreased
Add investment impairment Other impairmen
investment
provision t provision
Turbine
20,000,000.00 20,000,000.00
Company
Hangzhou
743,812,943.59 27,000,000.00 770,812,943.59
Heavy Industry
Hangzhou
Auxiliary 46,286,513.41 46,286,513.41
Machine Co.
Zhejiang
Turbine 29,800,389.56 29,800,389.56
Packaged Co.
Zhongneng Co. 27,644,475.06 27,644,475.06
Machinery Co. 7,968,000.00 7,968,000.00
Casting Co. 11,220,000.00 11,220,000.00
Total 886,732,321.62 27,000,000.00 913,732,321.62
（2）Investments in associates and joint ventures
In RMB
Increase /decrease in reporting period
Closing
Adjustment of Other Declaratio
Opening Add Withdrawn Closing balance of
Name Decrease other equity n of cash Othe
balance investm impairmen balance impairment
comprehensiv change dividends r
ent investment t provision provision
e income s or profit
I. Joint ventures
II. Associated enterprises
Zhejiang
Ranchuan
g Turbine 11,246,097.13 210,035.64 11,456,132.77
Machinery
Co., Ltd.
Subtotal 11,246,097.13 210,035.64 11,456,132.77
Total 11,246,097.13 210,035.64 11,456,132.77
（3）Other note：Note
4. Business income and Business cost
208
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
In RMB
Items Amount of current period Amount of previous period
Income Cost Income Cost
Main business 2,480,402,944.88 1,718,757,777.75 2,633,113,307.34 1,875,706,074.15
Other 10,916,285.22 5,702,643.04 26,584,251.85 16,003,960.38
Total 2,491,319,230.10 1,724,460,420.79 2,659,697,559.19 1,891,710,034.53
Information related to performance obligations:
The Company’s sales link has entered into a legal and effective sales contract/order with the customer. The
contract/order clarifies the terms of the subject product, specification model, transaction quantity, unit price,
settlement method, delivery obligation, etc., and the performance obligation is clear, and it is the single
performance obligation at a single point in time. The transaction prices of the Company’s various product
contracts/orders are clear, and the Company will confirm revenue after fulfilling the relevant performance
obligations in accordance with the contract/order related agreements.
Information related to transaction value assigned to residual performance obligations:
At the end of the reporting period, the amount of revenue corresponding to the contract that have been signed but
not yet fulfilled obligation or not fulfilled obligation is RMB4,700,000,000.00 yuan.
5. Investment income
In RMB
Occurred current Occurred in previous
Items
term term
Long-term equity investment income by Cost method 128,543,620.00 61,041,210.00
Investment income from disposal of Long-term equity investment 210,035.64 -153,902.87
Revenue from changes in fair value generated by financial assets classified at fair value
1,320,462.15
through Other comprehensive income
Dividend income from other equity instrument investments during the holding period 95,156,322.10 67,968,801.50
The disposal is classified as the investment income of financial assets measured at fair
23,991,247.64 27,749,627.08
value and recorded in the profits and losses of the current period
Revenue from changes in fair value generated by financial assets classified at fair value
-1,518,602.29 -2,098,850.50
through Other comprehensive income
Debt restructuring gains 125,500.00
Total 246,508,123.09 155,827,347.36
6.Other ：None
XVIII. Supplement information
1. Particulars about current non-recurring gains and loss
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
√ Applicable □Not applicable
In RMB
Items Amount Notes
Gains/losses from the disposal of non-current asset -20,964,286.32
Governmental subsidy calculated into current gains and loess（while closely related
with the normal business of the Company, excluding the fixed-amount or 38,013,637.22
fixed-proportion governmental subsidy according to the unified national standard）
Income from the exceeding part between investment cost of the Company paid for
obtaining subsidiaries, associates and joint-ventures and recognizable net assets fair 1,149,217.06
value attributable to the Company when acquiring the investment
Gain/loss from debt reorganization 3,350,920.00
Gains or losses arising from contingencies other than those related to normal operating
32,202,504.57
business
In addition to normal business with the company effective hedging related business,
holders of tradable financial assets, transactions and financial liabilities arising from
changes in fair value gains and losses, as well as the disposal of trading of financial 53,211,692.31
assets, trading financial liabilities and available-for-sale financial assets gains return on
investment
Other non-business income and expenditures other than the above -2,606,122.78
Less: Influenced amount of income tax 12,239,646.17
Amount of influence of minority interests 5,470,375.39
Total 86,647,540.50 --
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on
information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and
its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure
for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as
recurring gains and losses, it is necessary to explain the reason.
□Applicable √Not applicable
2. Return on equity (ROE) and earnings per share (EPS)
Weighted average EPS（Yuan/share）
Profit as of reporting period
ROE (%) EPS-basic EPS-diluted
Net profit attributable to commonshareholders of the Company 6.24% 0.62 0.62
Net profit attributable to common shareholders of the Company
5.07% 0.50 0.50
after deduction of non-recurring profit and loss
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Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
3. Differences between accounting data under domestic and overseas accounting standards
(1) Differences of net profit and net assets disclosed in financial reports prepared under international and Chinese
accounting standards
□ Applicable √Not applicable
(2) Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese
accounting standards
□ Applicable √Not applicable
(3) Explain reasons for the differences between accounting data under domestic and overseas accounting
standards, for audit data adjusting differences had been foreign audited, should indicate the name of the foreign
institutions
4.Other
211
Hangzhou Steam Turbine Co.,Ltd. 2020 Annual Report
XIII.Documents for Reference
I. Annual Report 2020 with signature of the Chairman;
II. Original copy of the Auditors’ Report with the seals and signatures of the legal representative, CFO,
Accounting Manager of the Company, and the Pan-China CPA and signed by certified accountants.
III. All of the originals of the Company’s documents and public notices publicized by the presses designated by
China Securities Regulatory Commission in the report period;
IV.Original copy of Resolutions of the 10th Meeting of the 8th Term of Board with signatures of directors.
Hangzhou Steam Turbine Co., Ltd.
Chairman of the Board: Zheng Bin
April 17, 2021
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