Stock Code: 200771 Stock ID: Hangqilun B Announcement No.: 2023-12
Hangzhou Steam Turbine Group Co., Ltd.
2022 Annual Report
（Stock Code: 200771）
March 2023
I. Important Notice , Table of Contents, and Definitions
The Board of Directors, The Supervisory Committee, the supervisors and the directors of the Company guarantee
that there are no significant omissions, fictitious or misleading statements carried in the Report and we will accept
individual and joint responsibilities for the truthfulness, accuracy and completeness of the Report.
Chairman Mr. Zheng Bin, Chief Financial Officer Zhao Jiamao, and the Chief of Accounting Department Mr.Jin
Can hereby declare: the Financial Statement in the report is guaranteed to be truthful and complete.
All of the directors attended the board meeting on which this report was examined.
This Report contains prospective descriptions, which doesn’t constitute substantial commitment to investors.
Investors are requested to be aware of the risks attached to their investment decisions.
For the risks existing in the Company's operation, please refer to the section "Prospects for the future development
of the Company" in Section III "Management Discussion & Analysis".
The company's designated information disclosure media are: Shanghai Securities News (Chinese), Securities
Times (Chinese), Hong Kong Commercial Daily (English), http://www.cninfo.com.cn (In English and Chinese),
all information of the company is subject to the information published in the above selected media. Investors are
advised to pay attention to investment risks.
The profit distribution proposal reviewed and approved by the boarding meeting was summarized as follows: In
2022, with the total share capital of 980,179,980 shares at the end of the year deducting 111,800 treasury shares
repurchased as of date of record by Company and 531,180 shares of share capital were cancelled due to the
retirement and resignation of equity incentive objects in December 2022, that is, 979,537,000 shares, the
Company would distribute cash dividend to all the shareholders at the rate of CNY 3.0 for every 10 shares (with
tax inclusive) , 2 bonus shares ，and no reserve would be converted into share capital.
Table of Contents
I.Important Notice, Table of contents and Definitions
II. Basic Information of the Company and Financial index
III. Management Discussion & Analysis
IV. Corporate Governance
V. Environmental & Social Responsibility
VI. Important Events
VII. Change of share capital and shareholding of Principal Shareholders
VIII. Situation of the Preferred Shares
IX. Corporate Bond
X. Financial Report
Documents available for inspection
1. Accounting statements carried with personal signatures and seals of legal representative, General Manager,
Chief Financial officer and Financial Principal.
2. Original of Auditors’ Report carried with the seal of Certified Public Accountants as well as personal signatures
of certified Public accountants.
3. The texts of all the Company's documents publicly disclosed on the newspapers and periodicals designated by
China Securities Regulatory Commission in the report period.
4. Original copy of Resolutions of the Meeting of Board.
Definition
Terms to be defined Refers to Definition
Company, the Company Refers to Hangzhou Steam Turbine Power Group Co., Ltd.
Holding shareholder, Steam Turbine
Refers to Hangzhou Steam Turbine Holdings Co., Ltd.
Holdings
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 1,2022-December 31,2022
current year
Zhongneng Co. Refers to Hangzhou Zhongneng Steam Turbine Power Co., Ltd.
Casting Co. Refers to Hangzhou Steam Turbine Casting Co., Ltd.
Packaged Tech. Co. Refers to Zhejiang Steam Turbine Packaged Technology Development Co., Ltd.
Machinery Co. Refers to Hangzhou Steam Turbine Machinery Equipment Co., Ltd.
Auxiliary Machine Co. Refers to Hangzhou Steam Turbine Auxiliary Machinery Co., Ltd.
Turbine Co. Refers to Zhejiang Turbine Import & Export Co., Ltd.
Zhongrun Company Refers to Zhejiang Zhongrun Gas Turbine technology Co., Ltd.
New Energy Company Refers to Hangzhou Steam Turbine New Energy Co., Ltd.
Hangfa Company Refers to Hangzhou Hangfa Power Generation Equipment Co., Ltd.
Sales Company Refers to Hangzhou Steam Turbine Sales Service Co., Ltd.
China mechanical and Electrical Institute -HSTG (Hangzhou) United
China mechanical and Electrical Institute Refers to
Institutes Co., Ltd.
Ranchuang Company Refers to Zhejiang Ranchuang Turbine Machinery Co., Ltd.
Guoneng Company Refers to Hangzhou Guoneng Steam Turbine Engineering Co., Ltd.
Huayuan Company Refers to Zhejiang Huayuan Steam Turbine Machinery Co., Ltd
Anhui Casting Company Refers to Anhui Hangqi Casting Technology Co., Ltd.
Industry and trade company Refers to Hangzhou Steam Turbine Industry and trade Co., Ltd
Indonesia Company Refers to Hangzhou Zhongneng Steam Turbine Power( Indonesia) Co., Ltd.
The Board of Directors Refers to The Board of Directors of Hangzhou Steam Turbine Group Co., Ltd.
The Supervisory Committee of Hangzhou Steam Turbine
The Supervisory Committee Refers to
Power Group Co., Ltd.
The Board of Directors of Hangzhou Steam Turbine Power Group Co.,
The Shareholders’ Meeting Refers to
Ltd.
RMB, RMB0’000, RMB000’000’000 Refers to RMB Yuan, RMB10 thousand Yuan, RMB100 million Yuan
MW Refers to Unit of power: 1000KW
PMIS Refers to Product life circle management information system
MES Refers to Manufacturing execution system
ERP Refers to Enterprise Resources Planning
ORC Refers to Organic Langken cycle
II. Basic Information of the Company and Financial index
I. Basic Information
Stock ID Hangqilun B Stock Code 200771
Modified stock ID (if any) No
Stock Exchange Listed Shenzhen Stock Exchange
Company Name in Chinese 杭州汽轮动力集团股份有限公司
Short form of Company
杭汽轮
Name in Chinese
Name in English HANGZHOU STEAM TURBINE POWER GROUP CO.,LTD.
Abbreviation in English HTC
Legal representative: Zheng Bin
Building 1, No.608, Kangxin Road, Economic & Technological Development Zone, Yuhang
Reg. Add. District, Hangzhou City, Zhejiang
Post Code 311106
In May 2021, The registered address of the company has been changed from No.357, Shiqiao
Road, Hangzhou city, Zhejiang Province to Building 1, No.608, Kangxin Road, Economic and
Technological Development Zone, Yuhang District, Hangzhou City, Zhejiang
Historical change of the
In June 2022, The registered address of the company has been changed from
company's registered address
Building 1, No.608, Kangxin Road, Economic and Technological Development Zone,
Hangzhou City, Zhejiang to Building 1, No.608, Kangxin Road, Linping District, Hangzhou
City, Zhejiang
Office address No.1188, Dongxin Road, Gongshu District, Hangzhou, Zhejiang
Post code of the office
310022
address
Internet Web Site www.htc.cn
E-mail lgw@htc.cn
II. Contact person and contact manner
Board secretary Securities affairs Representative
Name Li Guiwen Li Xiaoyang
No.1188, Dongxin Road, Gongshu No.1188, Dongxin Road, Gongshu
Address District, Hangzhou, Zhejiang District, Hangzhou, Zhejiang
Tel. 0571-85780058 0571-85780438
Fax. 0571-85780433 0571-85780433
Email. lgw@htc.cn lixiaoyang@htc.cn
III. Place for information disclosure
Press media for information disclosure www.szse.cn
Securities Times, Shanghai Securities Daily, Hong Kong
Web address for the annual report as assigned by CSRC. Commercial Daily and
www.info.com.cn
The place where the Annual report is prepared and placed Office of the Board of directors
IV. Changes in Registration
Organization code 913300007042026204
The original scope of main businesses of the Company: The
design and manufacturing of steam turbine, gas turbine, other
rotating and to-and-fro machinery and auxiliary equipment, and
spare parts and components, sales of self-manufactured
products and the providing of relevant after-sales service and
import & export service.
In July 2008, the business scope was modified to: Design and
manufacturing of steam turbine, gas turbine, other rotating and
to-and-fro machinery and auxiliary equipment, and spare parts
and components, sales of self-manufactured products and the
providing of relevant after-sales service; sales and import &
export of power plant, industrial driving, industrial turbine
Change of main business since listed equipment and complete equipment. For those involve in quota
or licensing shall follow legal procedures.
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. On December 2020, Hangzhou SASAC
Change of holding shareholder (if any) transferred 90% of the 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
Pan-China Certified Public Accountants (Special general
Name of the CPA
partnership)
B Unit, Huarun Building, No.1366, Qianjiang Road, Jianggan
Address of the CPA District Hangzhou
Name of CPA signed on the auditors’ report Sheng Weiming, Lin Qunhui
The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.
□ Applicable √Not applicable
The Financial advisor performing persist ant supervision duties engaged by the Company in the reporting period
□ Applicable √Not applicable
VI.Summary of Accounting data and Financial index
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□Yes √No
Changed over
2022 2021 2020
last year（％）
Operating revenue（Yuan） 5,518,841,939.82 5,788,288,588.91 -4.66% 4,762,315,089.10
Net profit attributable to the shareholders of the
522,396,807.32 649,992,474.56 -19.63% 476,268,110.63
listed company（Yuan）
Net profit after deducting of non-recurring
gain/loss attributable to the shareholders of listed 379,955,440.30 428,122,980.65 -11.25% 372,697,902.88
company（Yuan）
Cash flow generated by business operation, net
324,140,805.63 71,809,489.02 351.39% 628,885,775.12
（Yuan）
Basic earning per share(Yuan/Share) 0.54 0.68 -20.59% 0.49
Diluted gains per share(Yuan/Share) 0.54 0.68 -20.59% 0.49
Net asset earning ratio（%） 6.47% 8.01% -1.54% 6.43%
Changed over
End of 2022 End of 2021 End of 2020
last year（％
Gross assets（Yuan） 15,374,999,610.32 16,319,667,628.76 -5.79% 16,375,832,611.51
Net assets attributable to shareholders of the
8,328,481,114.19 7,927,485,773.65 5.06% 8,163,905,778.62
listed company（Yuan）
The lower of the company’s net profit before and after the deduction of non-recurring gains and losses in the last
three fiscal years is negative, and the auditor's report of the previous year shows that the Company’s going
concern ability is uncertain.
□ Yes √No
The lower of the net profit before and after the deduction of the non-recurring gains and losses is negative.
□ Yes √No
VII.The differences between domestic and international accounting standards
1. Differences between the net profit and net asset in the financial reports prepared under IAS and Chinese
Accounting Standard
□ Applicable √Not applicable
No difference in the reporting period.
2. Differences between the net profit and net asset in the financial reports prepared under IAS and Chinese
Accounting Standard
□ Applicable √Not applicable
No difference in the reporting period.
VIII.Main Financial Index by Quarters
In RMB
Second
First quarter Third quarter Fourth quarter
quarter
Operating revenue 1,788,987,236.29 1,286,993,097.29 1,204,092,736.67
1,238,768,869.57
Net profit attributable to the shareholders
184,043,460.08 164,296,849.93 79,920,825.31
of the listed company 94,135,672.00
Net profit after deducting of non-
recurring gain/loss attributable to the 138,956,828.84 131,810,741.42 62,952,498.88
46,235,371.16
shareholders of listed company
Net Cash flow generated by business
-124,850,206.32 289,728,029.61 -80,686,363.23
operation 239,949,345.57
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 (2022) Amount (2022) Amount (2020) Notes
Mainly due to the
investment income of -
Non-current asset disposal gain/loss(including 563,981.22 yuan
the write-off part for which assets impairment -792,933.90 -77,159,058.06 -20,964,286.32 generated by the disposal
of the equity of the
provision is made)
Indonesian company in
the current period
Tax refund, deduction and exemption that is
examined and approved by authority exceeding 356,463.33 0.00
or has no official approval document.
Governmental Subsidy accounted as current
gain/loss, except for those subsidies at with
amount or quantity fixed by the national 57,161,745.42 129,494,304.26 38,013,637.22 [Note]
government and closely related to the
Company’s business operation.
Capital appropriation fees charged to non-
financial enterprises included in the current 127,908.28
profit and loss
Income from the exceeding part between
investment cost of the Company paid for
obtaining subsidiaries, associates and joint-
1,149,217.06
ventures and recognizable net assets fair value
attributable to the Company when acquiring the
investment
Debt restructuring profit or loss 7,035,391.36 1,617,382.00 3,350,920.00
Net gain and loss of the subsidiary under the
common control and produced from enterprise
-29,001,203.15 27,026,646.93
consolidation from the beginning of the period
to the consolidation date
Gain and loss arising from contingent matters
irrelevant with the Company’s normal 32,202,504.57
operation business
Gain and loss from change of the fair value
arising from transactional monetary assets,
transactional financial liabilities as held as well Mainly due to the
as the investment income arising from disposal investment income of
of the transactional monetary assets, 36,974,039.31 75,295,281.43 53,211,692.31 36,295,722.69 yuan of
transactional financial liabilities and financial bank wealth management
assets available for sale excluding the effective products
hedging transaction in connection with the
Company’s normal business
Mainly due to the reverse
of a provision of 19.8
Reverse of the provision for impairment of million yuan for bad debts
accounts receivable undergoing impairment test 20,281,569.00 3,600,000.00 due to the collection of
individually long-term receivables with
single accrual in the
current period
Mainly due to then non-
Operating income and expenses other than the operating income -
54,844,106.11 123,214,403.44 -2,606,122.77
aforesaid items compensation of
56,511,643.28 yuan
Mainly due to the
immediately executed
share payment confirmed
Other non-operating income and expenditure by the casting company of
-1,732,271.11
beside for the above items -2,150,400 yuan and other
income - withholding
personal income tax fee
refund
Less: Influenced amount of income tax 17,931,285.99 13,388,887.75 12,239,646.17
Amount of influence of minority interests
13,526,901.46 -7,840,808.41 15,574,355.08
（After tax）
Total 142,441,367.02 221,869,493.91 103,570,207.75 --
Note: The main composition is as follows:
(1) The net government subsidy recognized as a result of the relocation compensation of the Shiqiao Road plant is
RMB21,141,733.79 (the government subsidy related to the relocation compensation is RMB37,292,533.79, and
lessening the relocation expenses of RMB16,150,800.00); (2) The government subsidy for the relocation
compensation confirmed by the old factory in Hangzhou is 8,663,283.72 yuan; (3) the funded and confirmed
government subsidy by Zhejiang Gas Turbomachinery Manufacturing Innovation Center is 5,542,854.92 yuan.
Details of other profit and loss items that meet the non-recurring profit and loss definition
□ Applicable√ Not applicable
For the Company’s non-recurring gain/loss items as defined in the Explanatory Announcement No.1 on
information disclosure for Companies Offering their Securities to the Public-Non-recurring Gains and Losses and
its non-recurring gain/loss items as illustrated in the Explanatory Announcement No.1 on information Disclosure
for Companies offering their securities to the public-non-recurring Gains and losses which have been defined as
recurring gains and losses, it is necessary to explain the reason.
□ Applicable√ Not applicable
None of Non-recurring gain /loss items recorgnized as recurring gain /loss/items as defined by the information
disclosure explanatory Announcement No.1- Non –recurring gain/loss in the report period.
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
III. Management Discussion & Analysis
I. Industry information of the Company during the reporting period
As an energy equipment manufacturing enterprise, the Company is greatly affected by the national
macroeconomy and the demand of downstream industries such as petrochemical industry and electric power.
In 2022, China's economy continued to develop under pressure, its total economic output reached a new
level, and the quality of development steadily improved. According to data released by the National Bureau of
Statistics on January 17, 2023, China's GDP for the whole year of 2022 was 121,020.7 billion yuan, with an
economic total of 121 trillion yuan, an increase of 3.0% over the previous year at constant prices, ranking
second in the world.
During the reporting period, the operation of China's petrochemical industry was generally stable and
orderly, the oil and gas production maintained steady growth, and the oil and gas exploitation and chemical
investment grew rapidly. According to the data of the National Bureau of Statistics, the petrochemical industry
achieved operating income of 16.56 trillion yuan in 2022, a YOY increase of 14.4%; the total import and export
volume was 1.05 trillion US dollars, a year-on-year increase of 21.7%; the total profit was 1.13 trillion yuan, a
YOY decrease of 2.8%. Although the total profit decreased by more than 30 billion yuan from the previous year,
it remained above one trillion yuan for the second consecutive year, accounting for 13.4% of the total profit of
all scaled industries in the country. Investment in oil and gas extraction, chemical raw materials and chemical
manufacturing increased by 15.5% and 18.8% over the previous year respectively. According to the "Economic
Operation of China's Petroleum and Chemical Industry in 2022" released by the China Petroleum and Chemical
Industry Federation, in recent years, with the completion and operation of a number of refining and chemical
integration units, China's total refining capacity has reached 920 million tons/year, of which the number of
refineries of 10 million tons and above has increased to 32. China's total ethylene production capacity has
reached 46.75 million tons / year, exceeding the total production capacity of 44.82 million tons / year of the
United States, and it has become the world's largest ethylene production capacity. At present, although the
petrochemical industry still has a certain shortage to ethylene, polyethylene and some high-performance new
materials and high-end specialty chemicals, the other major petrochemical products manifest a state of
overcapacity. The era of rapid growth of the petrochemical industry has passed, and the era of surplus has
arrived. However, with the introduction of the latest national industrial policies, the petrochemical industry will
also usher in new opportunities. In 2022, the National Development and Reform Commission, the Ministry of
Industry and Information Technology and other relevant ministries and commissions have successively
promulgated a number of industrial policies closely related to the petrochemical industry, such as the
Implementation Guide for Energy Conservation and Carbon Reduction Transformation and Upgrading in Key
Areas of High Energy Consuming Industries (2022 Edition), the Guiding Opinions on Promoting the High-
quality Development of the Petrochemical and Chemical Industry in the 14th Five-Year Plan, the
Implementation Plan for Carbon Peaking in the Industrial Sector, the Guidelines for the Development and
Construction of Chemical Parks, the Catalogue for the Guidance of Industrial Structure Adjustment, and Notice
on Further Improving the Work Related to the Total Energy Consumption Control of Energy Used by Raw
Materials Not Included in" and so on. These policies have more scientifically and accurately free up certain
space and potential for the high-quality development of the petrochemical industry, especially for new chemical
materials, high-end fine chemicals, medical chemicals, high-purity reagents, etc., which supports high-end
manufacturing and strategic emerging industries, frees up the development space and provides new
opportunities.
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
During the reporting period, the power industry faced the challenges of supply assurance and
transformation. It actively implemented the new requirements of the "dual carbon" goal, effectively responded
to the impact of extreme weather, and made every effort to ensure power supply for people's livelihood.
According to data released by the China Electricity Council, in 2022, the electricity consumption of the whole
society in the country was 8.64 trillion kilowatt hours, a year-on-year increase of 3.6%. By the end of 2022, the
total installed capacity of power generation in the country was 2.56 billion kilowatts, a YOY increase of 7.8%.
In 2022, the green and low-carbon transformation of the power industry has achieved remarkable results. First,
non-fossil energy power generation accounted for nearly 50% of the total installed capacity. In 2022, the
country's installed power generation capacity was 200 million kilowatts, of which 160 million kilowatts of non-
fossil energy power generation capacity was added, and the put-into-operation capacity of total newly installed
capacity of power generation and non-fossil energy power generation hit a record high. Secondly, the total non-
fossil energy power generation increased by 8.7% year-on-year, and the coal power generation accounted for
nearly 60% of the total power generation. In 2022, the total grid-connected wind power and solar power
generation increased by 16.3% and 30.8% year-on-year respectively. In addition, the power investment
increased by 13.3% YOY, and the non-fossil energy power generation investment accounted for 87.7% of
power supply investment. The coal power gradually changes from the main power to providing a supporting
and regulating power source with both emphasizes on capacity and power. In 2022, China have vigorously
promoted the "three reforms" of coal power energy conservation and carbon reduction transformation,
flexibility transformation and heat supply transformation. The scale of coal power that has been upgraded is
more than 220 million kilowatts, and the clean and low-carbon development of coal power has been
continuously promoted.
The year of 2022 is a key year for the construction and improvement of the "1+N" policy system for carbon
peaking and carbon neutrality. The state has successively issued special plans such as the "14th Five-Year Plan"
Modern Energy System Plan and the "14th Five-Year Plan" Renewable Energy Development Plan, the newly
introduced industrial policies have highlighted the bottom line of safety and new requirements for development,
the "dual carbon" policy is more systematic and coordinated, the priority of energy conservation and carbon
reduction has been further improved, and the supporting mechanism has been improved, providing a solid
impetus for the green and low-carbon transformation. The Company has actively adapted to the general trend of
national energy structure and industrial policy adjustment, accelerated the transformation and upgrading of
enterprises, increased the technological innovation and independent research and development, produced high-
end boutique products, established brand advantages, and continued to develop and grow in the fierce market
competition.
II.Main Business the Company is Engaged in During the Report Period
During the reporting period, the Company's main business and operating model did not undergo significant
changes.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
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
development of our products, our company has adopted the advanced modular design technique and, on the
other hand, introduces information technique to assist the collaborative production to achieve the resource
saving and flexible production. In addition, our company also provides our clients with relevant service such as
engineering programs, general engineering contracting, operation and maintenance of our products as well as
remote control and so on.
Industrial steam turbines use the steam featuring high temperature and high pressure as their working medium
so as to convert the thermal energy into mechanical energy to drive various industrial equipments through the
rotating steam turbines. As for different objects driven by industrial steam turbines, the steam turbines could be
divided into industrial driving steam turbines and industrial power-generation steam turbines. Mainly driving
rotating machines like compressors, air blowers, pumps and squeezers, industrial driving steam turbines, as the
core power part in numerous large-scale industrial equipments, are always introduced into some industries like
oil refining, chemical engineering, chemical fertilizer, building materials, metallurgy, electric power, light
industry and environmental production. The industrial power-generation steam turbines, mainly utilized to
drive electric generators and provide thermal energy, are mainly adopted in private stations, regional projects of
combined heat and power generation, power generation by recycling waste heat in industrial production, urban
waster power plants and gas-steam combined cycle power stations in various industrial sectors. The gas
turbines produced by our company are mainly used by metallurgical industry to recycle the waste heat from the
blast furnace exhaust to generate power.
In the gas turbine business, the company cooperated with Siemens Energy on SGT-800, an advanced natural gas
turbine with high efficiency, high reliability and low emission, to enter the field of natural gas distributed energy,
with its models gradually expanded to SGT-300, SGT-700 and SGT-2000E. As the general supplier of Siemens
gas turbine in China, the company has carried out gas turbine business from two aspects of project procurement
and integrated implementation, and has the ability of selecting combined cycle projects for distributed energy,
has established the complete system supporting standards and material systems, and can complete the
independent processing and supporting work of equipment other than the gas turbine itself. In the industrial
fields including the cogeneration /combined cycle power plant and the oil & gas project with distributed energy
projects that adopt the small and medium gas turbines, the Company not only can provide gas turbine
equipment for customers, but also can provide customers with complete sets of equipment for gas turbine power
plant and the efficient integrated solutions. Especially, it can provide customers with operational support
services throughout the product life, and this service model is conductive for the establishment of long-term
business cooperation relationships between the company and its customers.
As the major producer of industrial equipments in China, our company is mainly benefited from the
following factors in terms of the elements driving our business performance:
1. On the basis of market demands. The relevant market demands fluctuate differently due to various business
condition and investment cycles in different industrial fields. The company further made more specified positions
toward the market for the products, implemented the differentiated marketing strategy, and integrated the business
sectors and tapped into the potential, According to different customers' needs, it has further consolidated the
original market position and broadened the market share in new fields through precise matching and precise
policies.
2. Innovation and further reform in difficult areas of product technology ： Our company continuously
improves product technical performance and tackles hard issues in the scientific researches of product structure,
core parts, basic design, manufacturing technology, material technology, etc. In addition, basing on clients’
demands, To push forward the intelligence of our products and the development of the integration technology.
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Meantime, the company cooperated with universities, scientific research institutes to build the technological
exchange and cooperation platform.
3. Upgrading of industrial structure transformation ： The company jointed with Siemens to enter the
distributed energy market and enhance the development and utilization of natural gas distributed energy. In the
industrial fields including the cogeneration /combined cycle power plant and the oil & gas project with
distributed energy projects that adopt the small and medium gas turbines, the Company not only can provide gas
turbine equipment for customers, but also can provide customers with complete sets of equipment for gas
turbine power plant and the efficient integrated solutions. The Company established a new energy company to
deeply explore the cogeneration needs of customers in the petrochemical field, and gradually transformed to
engineering, systematization and financialization.
4. Brand and market position：The company’s products have a good reputation and extensive brand influence
in the domestic market, The company has maintained a leading market share in the domestic industrial drive.
The company's products have a high reputation and brand influence in the domestic market.
5.Cost controlling level：As domestic labor costs continue to rise and the price of industrial products continue
to decline, the product profitability is facing a severe test. In recent years, the company continuously improves
the level of costs controlling by improving the organizational structure, optimizing business processes, enhancing
the supply chain controlling, strengthening risk management, raising the efficiency of all the staff and so on.
6.Emphasis on quality engineering and services: promote the key project management, meticulously plan key
projects, implement dynamic quality supervision; attach importance to products’ after-sales service market,
integrate existing resources to increase after-sales service initiative, extend product value chain, and promote
the company’s transformation from manufacturing to service.
III. Analysis On core Competitiveness
Firstly. A complete technical innovation system was established. The Company has under its possession of
national, provincial, and municipal grade technical centers, a doctorial workstation, and an academician
workstation. Close co-operations were carried out with institutions and universities from throughout the country.
As the main drafter of national standard on industrial steam turbine, the Company has the newest technical trend
under its close observation. The Company is now providing nearly 600 different models of steam turbines to the
customers and hold the newest technical system covering the product lines up to 150 MW.Cooperating with
Siemens Energy in the field of gas turbine, our company has been capable of selecting the model of the
combined recycling project of distributed energy. In addition, our company has also been able to finish the
independent processing or supporting work which doesn’t need to depend on the gas turbine machine.
Secondly .The advantages of solutions. The modular design of industrial steam turbine and the production
pattern featuring parallelization production enable our company to give considerations to the cost, date of
delivery and clients’ demands in the process of production in accordance with clients’ personalized designs,
thereby making 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
14
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
marketing approaches were carried on by involving itself in the customers’ value. A sound and steady image has
been set up in the domestic steam turbine market. In the global market, the Company has acquired multiple
important certifications and has established a primary global recognition.
Fourthly, the Company has its complete service providing system. The Company is not only capable to provide
onsite 24-hour service for the Company’s own products, but also accumulated rich experiences in technical
maintenance and reengineering of other manufacturers’ products.
Fifthly, the Company has cultivated a significant advantage in human resources. Great importance has been
attached to construction of work teams with collection of high-end workforce in the areas of research &
development, At the same time, our company values the cooperation with universities. “Zhejiang Technical
Association for Gas Turbines in Equipment Manufacturing Industry” was officially founded jointly by our
company and Zhejiang University and other scientific research institutions to build a new platform for
integration of production and research in terms of gas turbine technology. The Company has cultivated a
significant advantage in human resources. Great importance has been attached to construction of work teams
with collection of high-end workforce in the areas of research & development, designing, technique, testing,
and quality control. An excellent workforce provides a sound foundation to lift quality and services.
IV.Main business analysis
(1)General
In 2022, the Company achieved an operating income of 5,518.8419 million yuan, a total profit of 707.93.1
6 million yuan, and a net profit of 522.2368 million yuan, of which the net profit attributable to shareholders of
the listed company was 379.9554million yuan. Compared with the same period of the previous year, the operati
ng income decreased by 4.66% YOY, the total profit decreased by 14.97% YOY, the net profit decreased by 19.
63% YOY, and the net profit attributable to shareholders of the listed company decreased by 11.25% YOY.
In the face of adverse factors such as the decline in market demand, through the decomposition of goals
layer by layer and the joint efforts of all employees, the Company has achieved a very challenging annual
business target. During the reporting period, the Company further consolidated the market, steadily promoted
business form transformation and resource integration, accelerated innovative development and digital
transformation, and strived to promote high-quality development.
1. Consolidating the market
During the reporting period, in the face of the decline in market demand caused by the economic
slowdown, the "dual carbon" policy inhibiting the launch of large-scale projects, and the shrinking market
intensifying the competition situation in the industry, the Company continued to promote the key customer
management system, implemented lean marketing, and strived to achieve breakthroughs. In the field of
industrial drive, the Company has explored and integrated six core areas, covering seven national refining and
chemical bases, further achieved strategic binding with large customers, and successively achieved ideal results
in the new projects of Zhenhai Refining, Hengli New Materials, Ningbo CICC, Ningxia Baofeng and other
15
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
enterprises, of which Ningxia Baofeng coal-based new material project is the first large-scale coal chemical
project in China after the dual carbon policy, which has obtained a good demonstration effect for the subsequent
development of the coal chemical market. BASF's Zhanjiang Refining and Chemical Integrated Steam Turbine
Island Project EPC project has realized the whole process of EPC services, which is another important attempt
by the Company to explore the content of engineering services, and it’s of historic significance. In the field of
industrial power generation, the Zhejiang Xinzhonggang subcritical reheat back pressure heating project was
successfully put into operation, and the Company's advantages of forwardness of back-pressure units and its
market demonstration effect continued to appear. The undertaking of Shanghai Kangheng Hanchuan waste-to-
energy project marked that the Company has made new breakthroughs in the field of ultra-high-speed, double-
cylinder and double-speed, shaft-discharge waste-to-energy generation, which has benchmark significance in
the waste-to-energy and biomass power generation markets. In overseas markets, the feed pump sector
continued its good momentum and maintained a high winning rate in biding. In addition, the Company actively
explored the overseas driving business in the Middle East market, deeply tapped the potential of the Eastern
European market, and actively participated in the competition of the new energy power generation market in
Southeast Asia.
2. Business form transformation
During the reporting period, the Company continued to promote the integration of resources related to the main
business of high-end manufacturing, and established a new energy company on the basis of the merger and
integration of the original group engineering company, The new energy company strives to build an engineering,
systematic and financial transformation platform, focuses on promoting the second phase of localization of
Siemens gas turbine SGT-800 and the localization of services, and completes the signing of the third bundle
contract with Siemens Energy; Negotiated the expansion of the cooperation model to the SGT-4000F class.thus
to build a platform for the Company to realize engineering, systematization and financial transformation. Taking
the construction of a 12MW distributed rooftop photovoltaic power station in the steam turbine manufacturing
base as a demonstration project, it actively promoted the new energy brand of Hangzhou Steam Turbine, deeply
explored the demand of customers in the petrochemical field for cogeneration of gas turbines and expanded the
Company's influence in subdivided industries. Plus, the Company has initially built a new energy gas turbine
service system based on strong technical support and effective quality management.
During the reporting period, the Company gradually promoted the cross-vergenceand integration of the
key customer management system and the large service framework. With the six pilot areas of the
corresponding key customer management system as the goal, it built a localized service team and formed a
localized service capability.It promoted the construction of the "dual framework" information system, initially
completed the collection of customer information and in-service unit information in the key customer
management pilot area, started the construction of the existing market customer demand system, and paved the
information channels for the realization of the key customer management system and large service framework.
Through organizational reshaping, the service function was extended to the front-end and to the back-end,
accelerating the construction of the "two-line team" and initially forming the service management capability of
16
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
the whole life cycle of the product. In the face of the characteristics of "large project, long cycle and many
crossovers" in the service business, the unit service responsibility contracting system was implemented, a new
performance appraisal model was created, and the awareness of active service, up-front service and
responsibility was strengthened, as well as the service efficiency and service value were improved.
3. Innovative development
During the reporting period, the Company took optimizing the efficiency of backpressure generator sets,
expanding the efficient utilization technology and application demonstration of low-quality energy, and promoting
the utilization of low-pressure and ultra-low-pressure waste heat steam as the research and development direction;
Relying on the development of key units to expand the subcritical market, it promoted the steam turbine assembly
2.0 into the stage of summary optimization and improvement. Focusing on product expansion, efficiency
improvement and process optimization, we carried out high-quality and multi-faceted scientific research to
improve product economy and stability added value. 33 scientific research projects were accepted and completed.
The performance indicators of the "Zhenhai Refining and Chemical 1.2 million tons/year ethylene three-unit
development" project units have reached the international advanced level, and the "research and development of
small and medium-sized blade robot polishing system" has laid the foundation for the Company's comprehensive
promotion of polishing intelligent automation
During the reporting period, the Company promoted the development of independent gas turbines in multi
parallel directions and in a coordinated manner, overcoming the requirements of high-precision measurement in
production and manufacturing and breaking through multiple technical problems in manufacturing and
assembly processes under the mode of research and development, testing, manufacturing and verification.
Meanwhile, the Company orderly promoted the construction of project of annual output of 10 sets of gas turbine
units per year.
During the reporting period, the Company effectively integrated R&D resources, coordinated internal
technical strength, and reshaped the Hangzhou Steam Turbine scientific and technological innovation system
with high standards. Furthermore, it actively planned the scientific and technological projects and achievement
declaration, strived for external resources by multi-channel, and the "Low-quality Energy Efficient Utilization
Technology and Application" won the second prize of China Machinery Industry Science and Technology
Award; the "Key Technology and Application of Ultra-high-speed Industrial Turbine for Multiworking Syngas
Compressor Drive" won the first prize of Zhejiang Machinery Industry Science and Technology Award.
4.Digital guide
17
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
During the reporting period, the Company continued to deepen data thinking, realized the digitalization of
traditional business, and enabled the data to be the most core resource and asset of the Company. It completed a
total of 249 functional developments and 9integration testing tasks of major business scenarios in ERP projects,
cooperated with the ERP system to complete the transformation of MES, the quality platform, PMIS, OA and
other systems, and it completed more than 90 interface developments, and the ERP system was officially put
into operation on January 6, 2023.
During the reporting period, the Company continued to promote the construction of digital factories in
manufacturing bases and realized the expansion and optimization of MES system functions. It promoted the
construction of financial informatization in depth, and realized the effective management of the whole life cycle
of reimbursement and the integrated control of industry finance and taxation.
5. Manage promotion
During the reporting period, the Company adhered to the combination of lean concept and specific projects, and
the senior executives assumed leadership in four big lean projects, created a total of 12.4 million yuan of direct
economic benefits throughout the year; It actively adopted the initiative to improve the market-oriented
operation ability, managed the classification of suppliers, optimized the supplier reward and punishment system,
established a new model of quantitative selection of excellent suppliers, and continued to promote the
improvement of supplier self-inspection capabilities; Combined with strategic development and market changes,
the Company continued to improve the effectiveness of system management, ensured the efficient operation of
the five major systems and the management system standards were implemented in place.
During the reporting period, the Company promoted the capital increase and share expansion of Zhongneng
Company and the equity repurchase and capital increase of Ranchuang Company, as well as supported the
corporate reform that was conducive to the development of subsidiaries; It continued to promote the
standardized operation of the listed company and effectively improved the Company's internal management
compliance; The first phase of the human resources improvement project had achieved initial results, and the
corporate culture was fully integrated with the work carriers such as party building publicity, lean production,
human resources, and groups.
18
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(2) Revenue and cost
1. Component of Business Income
In RMB
2022 2021
Increase /decrease
Amount Proportion Amount Proportion
Total operating revenue 5,518,841,939.82 100% 5,788,288,588.91 100% -4.66%
On Industry
Boiler and power machine
94.02% 91.74% -2.29%
manufacture 5,188,669,908.73 5,310,076,826.69
Other 5.98% 8.26% -30.96%
330,172,031.09 478,211,762.22
On product
Industrial steam turbine 82.79% 82.57% -4.40%
4,569,144,871.56 4,779,343,162.52
Part 8.92% 7.95% 6.92%
492,024,155.23 460,199,251.65
Hydroelectric generating set 2.31% 1.22% 80.76%
127,500,881.94 70,534,412.52
Engineering service 3.61% 274,143,219.58 4.74% -27.26%
199,414,862.30
Other 2.37% 204,068,542.64 3.52% -35.92%
130,757,168.79
On Area
Domestic 96.17% 95.75% -4.24%
5,307,263,153.68 5,542,046,290.01
Overseas 3.83% 4.25% -14.08%
211,578,786.14 246,242,298.90
Sub-sale model
Direct selling 100.00% 100.00% -4.66%
5,518,841,939.82 5,788,288,588.91
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/decr
Increase/decreas
Increase/decreas ease of gross
e of business
Gross e of revenue in profit rate
cost over the
Turnover Operation cost profit the same period over the same
same period of
rate(%) of the previous period of the
previous year
year(%) previous year
(%)
(%)
On Industry
Boiler and power
3,787,322,197.37 27.01% -2.29% 2.09% -3.13%
machine manufacture 5,188,669,908.73
On product
Industrial steam
3,376,818,026.29 26.10% -4.40% 0.23% -3.41%
turbine 4,569,144,871.56
On Area
Domestic 27.55% -4.24% -2.14% -1.55%
5,307,263,153.68 3,845,131,086.93
Sub-sale model
Direct selling 27.02% -4.66% -1.58% -2.29%
19
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
5,518,841,939.82 4,027,414,803.26
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main
business based on latest on year’s scope of period-end.
□ Applicable √ Not applicable
3.Whether the Company’s Physical Sales Income Exceeded Service Income
√ Yes □ No
Business Change over same
Items Unit 2022 2021
period last year
categories
Sales Set/package 430.00 425.00 1.18%
Steam turbine Output Set/package 387.00 420.00 -7.86%
Inventory Set/package 141.00 184.00 -23.37%
Sales Set/package 9.00 5.00 80.00%
Gas turbine,
Output Set/package 10.00 5.00 100.00%
compressor
Inventory Set/package 1.00 0.00
Sales Set/package 7.00 7.00 0.00%
Compressor Output Set/package 7.00 8.00 -12.50%
Inventory Set/package 8.00 8.00 0.00%
Sales Set/package 120.00 118.00 1.69%
Electric
generator Output Set/package 116.00 126.00 -7.94%
Inventory Set/package 69.00 73.00 -5.48%
Reasons for y-o-y relevant data with over 30% changes
√ Applicable □ Not applicable
During the reporting period, with the adjustment of national industrial policies, the demand for small and
medium-sized gas turbines in distributed natural gas power generation and enterprise self-owned power plants
increased, and the Company seized the market opportunity to achieve a substantial increase in gas turbine
production and sales.
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
2022 2021
Products Proportion in Proportion in Increase/Decrease
category Items (%)
Amount the operating Amount the operating
costs (%) costs (%)
Industrial steam
—— 3,376,818,026.29 83.85% 3,369,080,526.65 82.33% 0.23%
turbine
Part —— 315,664,695.86 7.84% 268,252,260.97 6.56% 17.67%
Hydroelectric
—— 94,839,475.22 2.35% 72,463,945.41 1.77% 30.88%
generating set
Engineering
—— 133,770,379.97 3.32% 200,313,316.50 4.90% -33.22%
service
Other —— 106,322,225.92 2.64% 181,845,443.16 4.44% -41.53%
Subtotal 100.00% 100.00% -1.58%
4,027,414,803.26 4,091,955,492.69
20
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
6.Whether Changes Occurred in Consolidation Scope in the Report Period
√ Yes □ No
Please refer to Section VI(7) of this report for details.Explanation on the changes in the scope of the
consolidated statement compared with the financial report of the previous year.
7.Relevant Situation of Significant Changes or Adjustment of the Business, Product or Service in the
Company’s Report Period
□ Applicable √ Not applicable
8.Situation of Main Customers and Main Supplier
Information of Main sales customers
Total sales amount to top 5 customers (Yuan) 1,603,991,262.93
Proportion of sales to top 5 customers in the annual sales(%) 29.06%
Proportion of the sales volume to the top five customers in the total sales to the related
0.00%
parties in the year
Information of the Company’s top 5 sales customers
No Name Amount（RMB） Proportion
1 Customer 1 1,069,947,015.19 19.39%
2 Customer 2 243,100,884.94 4.40%
3 Customer 3 129,557,522.10 2.35%
4 Customer 4 81,938,053.10 1.48%
5 Customer 5 79,447,787.60 1.44%
Total -- 1,603,991,262.93 29.06%
Other notes
□ Applicable √ Not applicable
Principal suppliers
Total purchase of top 5 Suppliers（Yuan） 491,040,274.23
Percentage of total purchase of top 5 suppliers In total annual
12.95%
purchase(%)
Proportion of purchase amount from the top 5 suppliers in the
0.00%
total purchase amount from the related parties in the year
Information about the top 5 suppliers
No Name Amount（RMB） Proportion
1 Supplier 1 137,882,750.27 3.64%
2 Supplier 2 130,822,216.11 3.45%
3 Supplier 3 89,644,383.57 2.36%
4 Supplier 4 67,917,304.81 1.79%
5 Supplier 5 64,773,619.47 1.71%
Total -- 491,040,274.23 12.95%
Other notes
□ Applicable √ Not applicable
21
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(3)Expenses
In RMB
Increase/Decr
2022 2021 Notes
ease(%)
Sale expenses 221,489,523.60 202,868,557.82 9.18% No major changes
Administration
590,938,269.71 660,284,323.30 -10.50% No major changes
expenses
Mainly due to the net exchange
gain in the current period, and
Financial expenses -29,296,397.92 9,748,924.22 -400.51%
there’s net exchange loss in the
previous period
R & D cost 284,239,883.04 350,216,635.11 -18.84% No major changes
(4) Research and Development
√ Applicable □ Not applicable
Expected impact on the
Name of main
Project purpose Project progress Goal to be achieved future development of the
R&D project
Company
Improve the technical
reserve of the Company's
Improve the steam intake
model, which can
Developed the EUNG80/63, the parameters, reduce heat
Subcritical increase power generation
The project is largest subcritical model at consumption, effectively
parameter and reduce energy
under present, and developed a supplement the
EUNG80/63 consumption, and it’s in
development as subcritical U80 cylinder and U80 Company's subcritical
steam turbine line with the energy
planned. inner cylinder module that meet series, and enhance the
development conservation and
the needs of large pumping flow. competitiveness of the
emission reduction
Company's products
policies advocated by the
state.
Relying on this project,
the influence of wet
The Company expanded
Development of steam on the efficiency of
the African market by
steam turbines steam turbine, static and
developing the Developed the saturated steam
for saturated moving sleeve erosion,
NK32/36/32 saturated The project is condensation turbines
steam life evaluation, etc. are
steam condensation under NK32/36/32 and the atmospheric
condensation studied, thus to provide
turbines and the development as pressure intake high back pressure
and high reference for the design
NHG32/20 atmospheric planned. exhaust steam turbine type
backpressure and development of units
pressure intake high back NHG32/20.
power with similar parameters
pressure exhaust steam
generation in the future and enhance
turbines.
the competitiveness of
products
To conquer the Meet the needs of the
development of the market, conform to the
At present, the
industrial steam turbine Newly developed H40 two-half market development
unit has
for high-power and high- inner cylinder inlet chamber, trend, broaden and
Development of completed the
speed reaction large-scale SSK50 standard low-pressure supplement the
the HNKS40/50 empty load test
syngas field, meet the level, and completed the Company's design
steam turbine for run in the plant,
market development development and manufacturing system, steadily enhance
large syngas and the design
trend, further improve the of industrial steam turbines for the Company's strength,
compressors verification is
Company's design high-power and high-speed and maintain a
completed at the
system, and strengthen reaction large-scale syngas fields. technological advantage
user's site.
the Company's in the competition of
competitiveness in the projects in this field.
22
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
syngas field.
Improve the Company's
Through CNAS certification, the
Passing CNAS laboratory level, have the
A site review Company's laboratory has the
accreditation, improves technical ability to carry
was conducted in ability to carry out testing services
the level of laboratory out testing services in
Laboratory December 2022, in accordance with international
competence, indicating accordance with
competence and it’s currently accreditation standards, and the
that the laboratory has the internationally
enhancement in the process of reports issued are recognized by
technical ability to carry recognized standards, and
and CNAS certification. international accreditation bodies,
out testing services in be able to better serve
certification With CNAS showing and ensuring the
accordance with international customers
certified in authenticity of the test process to
internationally recognized and obtain the
March 2023. customers and improving the trust
standards. recognition from
of customers.
international customers.
Company's research and development personnel situation
2022 2021 Increase /decrease
Number of Research and
Development persons 763 762 0.13%
(persons)
Proportion of Research and
19.15% 19.01% 0.14%
Development persons
Academic structure of R&D personnel
Bachelor 211 218 -3.21%
Master 439 426 3.05%
Other 113 118 -4.24%
Age composition of R&D personnel
Under 30 years old 114 88 29.55%
30-40 years old 335 401 -16.46%
Over 40 years old 314 273 15.02%
The Company's R & D investment situation
2022 2021 Increase /decrease
Amount of Research and
284,239,883.04 350,216,635.11 -18.84%
Development Investment (Yuan)
Proportion of Research and
Development Investment of Operation 5.15% 6.05% -0.90%
Revenue
Amount of Research and
Development Investment 0.00 0.00 0.00%
Capitalization (Yuan)
Proportion of Capitalization Research
and Development Investment of
0.00% 0.00% 0.00%
Research and Development
Investment
Reasons and influence of significant changes in R&D personnel composition of the Company
□ Applicable √Not applicable
The Reason of the Prominent Change in Total Amount of Research and Development Input Occupying the
Business Income Year on Year
□ Applicable √Not applicable
Reasons for the drastic change of capitalization rate of R&D investment and its rationality explanation
□ Applicable √Not applicable
（5）Cash Flow
In RMB
Items 2022 2021 Increase/Decrease(%)
Subtotal of cash inflow received 4,728,700,324.82 5,423,863,579.31 -12.82%
23
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
from operation activities
Subtotal of cash outflow received
4,404,559,519.19 5,352,054,090.29 -17.70%
from operation activities
Net cash flow arising from
324,140,805.63 71,809,489.02 351.39%
operating activities
Subtotal of cash inflow received
2,770,909,495.92 4,670,633,768.49 -40.67%
from investing activities
Subtotal of cash outflow for
2,358,498,758.85 4,863,666,686.48 -51.51%
investment activities
Net cash flow arising from
412,410,737.07 -193,032,917.99 313.65%
investment activities
Subtotal cash inflow received
476,295,500.00 540,815,995.86 -11.93%
from financing activities
Subtotal cash outflow for
904,433,543.52 799,379,929.92 13.14%
financing activities
Net cash flow arising from
-428,138,043.52 -258,563,934.06 -65.58%
financing activities
Net increase in cash and cash
337,489,433.69 -382,815,680.03 188.16%
equivalents
Notes to the year-on-year change of the relevant data
√Applicable □ Not applicable
In RMB
Items 2022 2021 Increase/Decrease(%) Reason
Net cash
generated from Mainly due to various taxes and fees paid decreased year-
324,140,805.63 71,809,489.02 351.39%
/used in operating on-year.
activities
Mainly due to the increase in the net amount of bank wea
Net cash flow
lth management cash in the current period, and the increa
generated by 412,410,737.07 -193,032,917.99 313.65%
se in cash paid for the acquisition of multiple companies
investment
under the same control in the previous period.
Mainly due to the cash received from bank loans decreas
Net cash flow
ed year-on-
generated by -428,138,043.52 -258,563,934.06 -65.58%
year, and the cash paid for distribution of dividends, profi
financing
ts or interest payments increased year-on-year.
Net increase of
cash and cash 337,489,433.69 -382,815,680.03 188.16% Based on the reasons for the above changes
equivalents
Reasons of major difference between the cash flow of operation activity in report period and net profit of the
Company
√Applicable □Not applicable
Mainly due to the payment of material purchases in the previous period in this period.
V.Analysis of Non-core Business
√ Applicable □Not applicable
In RMB
Sustain
Proportion in able
Amount Explanation of cause
total profit (yes or
no)
Mainly due to the recognition of relocation compensation
Other income 73,730,674.31 10.41%
and government subsidies.
Investment 135,599,082.88 19.15% Mainly due to recognition of the dividend distributed
24
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
income from Hangzhou Bank.
Non-operating mainly due to the income from project breach of agreeme
57,650,448.40 8.14%
nt signed with Shenyang Turbine Machinery Co., Ltd.
income
Non-operating
3,130,575.97 0.44% Mainly due to the compensation expenses.
expenses
VI.Condition of Asset and Liabilities
(1)Condition of Asset Causing Significant Change
In RMB
End of 2022 End of 2021
Proportion in Proportion in Proportion Notes to the
Amount the total Amount the total increase/decrease significant change
assets(%) assets(%)
Monetary fund 1,954,980,787.90 12.72% 1,622,883,247.79 9.94% 2.78%
Accounts
1,924,679,367.08 12.52% 1,997,950,120.70 12.24% 0.28%
receivable
Contract assets 587,719,735.46 3.82% 583,026,649.99 3.57% 0.25%
Inventories 2,322,461,286.52 15.11% 3,041,643,747.35 18.64% -3.53%
Investment
6,451,478.55 0.04% 6,903,986.07 0.04% 0.00%
real estate
Long-term
equity 0.00% 0.00% 0.00%
investment
Fixed assets 1,926,594,610.89 12.53% 1,658,423,191.83 10.16% 2.37%
Construction
286,290,854.97 1.86% 517,835,956.11 3.17% -1.31%
in process
Use right
28,105,943.29 0.18% 30,437,778.92 0.19% -0.01%
assets
Short-term
287,753,227.89 1.87% 250,065,920.45 1.53% 0.34%
borrowing
Contract
2,306,912,441.68 15.00% 3,052,515,293.06 18.70% -3.70%
liabilities
Long-term
159,903,673.86 1.04% 180,830,007.55 1.11% -0.07%
borrowing
Lease
16,334,023.10 0.11% 22,575,754.77 0.14% -0.03%
liabilities
Overseas assets account for a relatively high proportion.
□ Applicable √ Not applicable
(2)Asset and Liabilities Measured by Fair Value
√Applicable □ Not applicable
In RMB
25
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Gain/Loss on fair Impairment
Cumulative fair Purchased amount
value change in provisions in Sold amount in the Other
Items Opening amount value change in the reporting Closing amount
the reporting the reporting reporting period changes
recorded into equity period
period period
Financial assets
1.Transactional financial
assets（Excluding
960,645,259.82 -646,522.64 -870,482.62 2,077,002,406.26 2,430,000,000.00 607,001,143.44
Derivative financial
assets）
4.Other Equity Instrument
3,485,440,140.92 70,687,553.56 3,165,173,654.48 3,556,127,694.48
Investment
5.Other non-current -
financial assets 14,792,533.96 1,168,000.00 5,712,000.00 - 10,425,760.74 5,534,773.22
6.Financing of receivable 816,653,211.21 902,557.24 817,555,768.45
Subtotal of financial assets
5,277,531,145.91 71,209,030.92 3,158,591,171.86 - 2,077,002,406.26 2,440,425,760.74 902,557.24 4,986,219,379.59
Total
5,277,531,145.91 71,209,030.92 3,158,591,171.86 - 2,077,002,406.26 2,440,425,760.74 902,557.24 4,986,219,379.59
Financial Liability 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Did great change take place in measurement of the principal assets in the reporting period ?
□ Yes √ No
(3) Restricted asset rights as of the end of this Reporting Period
In RMB
Items End of Book value Reason
Monetary fund Utilized for issuing bank acceptance bill
149,952,386.14
and L/G
Notes receivable 11,130,774.54 Utilized for issuing bank acceptance bill
Financing receivable 143,516,310.23 Utilized for issuing bank acceptance bill
Fixed assets Utilized for pledging to obtain the bank
124,868,888.02
loan
Intangible assets Utilized for pledging to obtain the bank
17,207,776.09
loan
Total 446,676,135.02
26
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
VII. Investment situation
1. General
√ Applicable □ Not applicable
Investment Amount in 2022(Yuan) Investment Amount in 2022(Yuan) Change rate
163,556,713.08 551,836,405.08 -70.36%
2.Condition of Acquiring Significant Share Right Investment during the Report Period
□ Applicable√ Not applicable
27
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
3.Situation of the Significant Non-equity Investment Undergoing in the Report Period
√ Applicable □ Not applicable
In RMB
Accrued
Reasons for
Accrued Actual Realized
Industry Investment not Reaching
Fixed Investment Project Income up
Project Investment involved in amount in this Capital Anticipated the Planned Disclosure Disclosure
investments Amount up to the schedul to the End date Index
name method investment reporting Source income Schedule and
or not End of Reporting e of
projects period Anticipated
Period Reporting
Income
Period
General
New
Self
plant Self-built Yes equipment 5,106,474.88 1,468,796,468.94 96.05% N/A
fund
project
manufacturing
Annual
output
of 10 General
sets of Self
Self-built Yes equipment 81,700,278.09 81,700,278.09 16.34% N/A
gas fund
turbine manufacturing
unit
project
Total -- -- -- 86,806,752.97 1,550,496,747.03 -- -- -- -- --
4.Investment of Financial Asset
（1）Securities investment
√ Applicable □ Not applicable
In RMB
Mode of Book value Changes in Cumulative Purchase Sale Gain/loss Book value
Stock Initial
Security Security accounting balance at the fair value of fair value amount in amount of the balance at
Abbreviatio investment Accounting items
category code measuremen beginning of the the this changes in the this in the reporting the end of
n: cost
t reporting period period equity period this period the
28
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
period reporting
period
Domestic
and Hangzhou 390,954,040.0 3,485,440,140.9 70,687,553. 3,165,173,654 3,556,127,6
600926 FVM Other equity Instrument investment
foreign Bank 0 2 56 .48 94.48
stocks
Domestic
and LUTIANH 1,998,737.1
000912 2,869,219.80 FVM 2,645,259.82 -646,522.64 -870,482.62 Financial assets transaction
foreign UA 8
stocks
393,823,259.8 3,488,085,400.7 70,041,030. 3,164,303,171 3,558,126,4
Total -- 0.00 0.00 0.00 --
0 4 92 .86 31.66
29
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
（2）Investment in Derivatives
□ Applicable√ Not applicable
The Company had no investment in derivatives in the reporting period.
5.Application of the raised capital
□ Applicable√ Not applicable
None
VIII. Sales of major assets and equity
(1) Sales of major assets
□ Applicable √ Not applicable
The Company had no sales of major assets in the reporting period.
(2)Sales of major equity
□ Applicable √ Not applicable
IX. Analysis of the Main Share Holding Companies and Share Participating Companies
√ Applicable □ Not applicable
Situation of Main Subsidiaries and the Joint-stock Company with over 10% net profit influencing to the Company
In RMB
Compan Main Registered Operating
Type Total assets Net assets Turnover Net Profit
y name business capital profit
Auxiliar 749,260,497. 328,860,509 588,105,536. 54,458,589. 48,525,181
y Subsidiar Manufactur 80,000,000. 26 .89 05 64 .12
Machine ies ing 00
Co.
Package 298,406,581. 113,958,943 234,634,434. 21,192,515. 18,789,173
Subsidiar Commerce 51,000,000.
d Tech. 81 .66 19 71 .15
ies & trade 00
Co.
Machine Subsidiar Manufactur 30,000,000. 368,898,264. 232,313,354 306,871,315. 113,160,514 95,410,281
ry Co. ies ing 00 04 .03 89 .62 .94
Turbine Subsidiar Commerce 20,000,000. 124,783,654. 61,653,386. 81,316,737.7 267,165.41 -
Co. ies & trade 00 48 70 8 597,635.36
Zhongne 1,849,173,97 300,943,960 1,477,489,20
ng Subsidiar Manufactur 120,000,000 8.57 .98 8.21
Compan ies ing .00 74,709,654. 78,762,807
y 79 .47
Casting 649,993,684. 304,933,494 439,244,605. 313,776.95 84,265.32
Subsidiar Manufactur 29,500,000.
Compan 12 .36 73
ies ing 00
y
New 627,318,175. 190,991,153 248,130,833. 15,756,139. 10,390,117
Energy Subsidiar Constructio 500,000,000 46 .16 84 96 .84
Compan ies n business .00
y
Sales 123,092,838. 56,616,508. 158,482,208. 17,170,470. 12,948,418
Subsidiar Transportat 5,000,000.0
Compan 36 61 91 28 .37
ies ion industry 0
y
China 3,102,064.40 2,877,219.1 2,974,643.71 300,605.44 293,022.52
Mechani 0
cal Subsidiar Commerce 1,000,000.0
Institute ies & trade 0
Compan
y
Ranchua 36,613,212.9 25,794,965. 0.00 83,718.85 83,328.86
ng Subsidiar Commerce 25,000,000. 5 88
Compan ies & trade 00
y
Subsidiaries obtained or disposed in the reporting period
√ Applicable □Not applicable
30
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Means of acquisition and disposal of Impact on overall production,
Company name
subsidiaries during the reporting period operation and performance
Hangzhou Zhongneng SteamTurbine Power (Indonesia) Co.,
Agreement transfer No significant impact
Ltd.
Hangzhou SteamTurbine Power Group Equipment Packaged
M &A No significant impact
Engineering Co., Ltd.
Note
X. Structured subject situation controlled by the company
□ Applicable √ Not applicable
XI.Prospect for future development of the Company
(I) Development strategy and business plan for 2023
In 2023, in the face of the continuous impact of the "dual carbon" policy, the significant adjustment of the
energy pattern, and the increasingly fierce competition in the industry, the Company will aim the strategic goals of
the "14th Five-Year Plan", continue to promote the transformation of business form, create new competitive
advantages guided by customer needs, and take lean management and cultural construction as the starting point to
improve the basis management level.
1. Strategic Lead
The Company will scientifically formulate the strategic performance targets for 2023, and do well in
tracking management, performance measurement and quantitative analysis of monthly strategic performance
indicators. It shall start from the objective actual situation, comprehensively analyze the changes in the Company's
internal and external operating environment, benchmark the four "first-class", reference the 9 strategic measures,
soundly do well in the mid-term assessment and mid-term adjustment of the "14th Five-Year Plan" strategic plan,
map out the 2023-2025 three-year action plan, and comprehensively handle the relationship between strategy and
tactics.
By seizing the historical opportunity and taking the comprehensive reform of regional state-owned assets
and state-owned enterprises as an opportunity, it will promote the deepening reform of Hangzhou Steam Turbine.
All subsidiaries shall also grasp the relevant policies of SOE reform in a timely manner, fully grasp the historical
opportunity of the new round of SOE deepening reform, and find a reform path that conforms to the enterprise's
own development model.
2. Market development
Focus on the competition for strategic markets and the development of potential markets, maintain the
dominant position in the industrial-driven market, and integrate resources to stabilize the market share of
industrial power generation. It is necessary to adapt to market changes, concentrate advantageous resources to
improve the joint promotion ability of the sales end and the service side, open up the business connection between
31
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
the service side and the contract execution end, and pave the way for the whole life cycle management. Seize the
market opportunities of ethylene, medium and large coal chemical industry and water supply pumps, continue the
good momentum of winning new energy projects, expand the marketing of complete sets of projects, and strive to
achieve new breakthroughs in business.
Fully tap the market potential of conventional power engineering business transformation projects, focus on
expanding the general contracting projects in industries such as waste heat utilization in steel, building materials
and other industries, and the air compressor stations, and choose the opportunity to wedge in non-traditional
industries such as ORC waste heat utilization. Gradually expand multi-energy cogeneration and integrate smart
energy management in industrial parks, and create comprehensive smart energy system solutions with Hangzhou
steam turbine characteristics.
3. Transformation and upgrading
The group promotes the big service model, starts from the engineering and large service business, deeply
integrates the company's internal service resources, and concentrates on expanding the service market. It is
necessary to focus on the development of new energy technology and market trends, give play to the synergy of
investment, project general contracting and operation and maintenance, and expand and strengthen the
engineering service business. Cultivate a localized service team with good service awareness and strong service
awareness, and vigorously promote "long-term" services and customized services based on existing units and new
contract units. Plus, it will carry out the construction of investment and financing platforms, select projects in a
timely manner to implement investment and management work, and effectively play the functions of investment
platforms.
It will focus on the R&D and expansion of steam turbines for large-scale ethylene plants, the in-depth
research and promotion of subcritical units, and the development and layout of thermoelectric market products.
Effectively promote basic research and development work such as "standardization of large drive sections",
improvement of front supports of small and medium-sized units, development of medium-pressure torsion blades,
steam turbine assembly 2.0, steam turbine operation and maintenance model construction and performance
monitoring. Attach importance to the research on unit efficiency and reliability, focus on the application and
product development of torsion blade technology with a maximum exhaust area of 6.3 square meters, complete
the development of 110,000-class air separation units, and promote the research and development and application
demonstration of high-efficiency medium-pressure torsion blades.
4. Management efficiency enhancement
It will accelerate the digitalization of business procedures, business processes and integrated resources,
promote the second phase of ERP project in a timely manner, and accelerate the construction of digital factories in
manufacturing bases. Driven by data, through the implementation and interconnection of the system platform, it
will strengthen the process continuity and information sharing, thus to promote the Company's product innovation
32
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
digitalization, intelligent production and operation, smart user service, and ecological transformation and
upgrading of the industrial system.
On the basis of consolidating lean achievements, it will focus on the three dimensions of delivery time, cost
and quality, integrate lean work into sales, design, production, procurement, service and other links, and promote
the lean management of full value chain. With the improvement of supply chain collaboration ability as the
starting point, and the assessment mechanism as the means, we will continue to promote the flexible output
mechanism oriented by user needs. Furthermore, it will strengthen the execution of comprehensive budget by
various business departments and improve the Company's comprehensive budget management ability, promote
the second phase of the Company's human resources improvement project, and form the "2023-2028 Medium and
Long-term Human Resources Allocation Planning Report" according to the requirements of the Company's
strategic transformation. On the basis of summarizing the implementation results of corporate culture in 2019-
2022, it’ll promote the implementation of the three-year action plan for corporate culture construction from 2023
to 2025, and comprehensively enhance the soft power of corporate culture.
(II) Risk factors that may be faced
1. Market risk
In view of the overcapacity of the domestic steam turbine industry, the market competition has intensified.
The proposal of the national "carbon peaking and carbon neutrality" goal will have a far-reaching impact on the
high-emission industries represented by petrochemicals, steel, electric power, building materials, etc., and the
Company's product sales will be further impacted. The Company's steam turbine product structure may be
adjusted according to market demand, and there is a risk of fluctuation in the gross profit margin of the product.
The Company will rely on technological innovation, highlight the advantages of core technology, expand
marketing channels, innovate marketing work mode, improve product quality, enhance end service capabilities,
strive to improve product added value, actively tap potential demand, and actively respond to and eliminate
market risks.
2. Contract performance risks
With the increase in the number of assemble units and large units, the expansion of the proportion of short-
term delivery projects, and the multiple factors such as major agreement changes and the increase in the
procurement cycle of imported parts affecting the output of units, the problem of uneven production of the
Company will become more prominent, and the cost and risk of the Company's performance of the contract will
also be increased. The Company will continue to promote the flexible output mechanism oriented to user needs,
further strengthen the ability of production and marketing, improve the speed and level of enterprise response to
the market, and control the risk of contract execution.
3. Accounts receivable risk
33
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
With the decline operation of customers in some downstream industries and the increase in investment risks
of projects, there are persistent risks in the recovery of the Company's accounts receivable, and the average
account age tends to increase, which will have a great impact on the Company's business performance. The
Company will implement customer credit management, strengthen contract signing and performance risk control,
increase the assessment of accounts receivable, and reduce the adverse impact of overdue accounts receivable.
4. Exchange rate risk
The expansion of the Company's international procurement and international sales business makes the
Company's balance of payments affected by exchange rate fluctuations, and there is a certain risk of exchange loss.
With the increase of the two-way fluctuation range of the RMB exchange rate, the uncertainty of exchange gains
and losses has increased. The company will refer to the exchange rate fluctuation cycle and adopt appropriate
exchange rate risk management tools to minimize exchange losses.
5. Risk of decline in profitability
As domestic raw materials and labor costs continue to rise, while the prices of industrial products continue
to decline, the product profitability is facing a severe test. The Company will strive to improve internal
management, improve project cost management capabilities, reduce procurement costs and operation and
management costs, improve operational efficiency, and strive to eliminate the risk of declining profitability.
6. Overseas market risks
During the "14th Five-Year Plan" period, the Company will continue to implement the "going global"
strategy, further expand overseas target markets, and enhance the Company's share and influence in the
international market. However, at present, the overseas markets are affected by geopolitical conflicts, changes in
internal political and economic situations and trade barrier policies, and there is great uncertainty in the
implementation of overseas market strategies. The Company will increase market research efforts, actively
demonstrate the countermeasures, and explore the path of localized business development.
XII. Particulars about researches, visits and interviews received in this reporting period
1.Particulars about researches, visits and interviews received in this reporting period
□ Applicable √ Not applicable
No reception of research, communication and interview occurred in the period
34
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
IV. Corporate Governance
I. General situation
(1) Standardized operation of corporate governance structure
In accordance with the "company law" provisions, The Company has its executive, decision making and
supervisory bodies operated strictly according to the Articles of Association, Shareholders’ Meeting Criteria,
Board Meeting Criteria, and Supervisory Committee Criteria. Meetings were held by legal procedures, Corporate
governance in accordance with the relevant provisions of the laws and regulations of China Securities Regulatory
Commission and the Shenzhen Stock Exchange.During the reporting period, the company organized 10 meetings
of the board of directors, 6 meetings of the board of supervisors, 4 meetings of shareholders, 5 meetings of special
committees of the board of directors and 2 annual report communication Meetings. In strict accordance with the
Articles of Association of the Company and relevant laws and regulations, the Company deliberates and makes
decisions on major business matters. The Company insists on integrating the Party building work into the
economic work. When making administrative decisions, the opinions of the Party Committee meeting shall be
heard in advance, and the powers and responsibilities of the Party committee meeting, the general manager's
office meeting, the board of directors, the board of supervisors and the shareholders' meeting shall be clarified.
During the reporting period, the Company reviewed its periodic reports, internal control self-assessment reports,
appointment of accounting firms, foreign investment, guarantees, related party transactions, bank credit loans,
entrusted wealth management, asset impairment and write-off, absorption and merger of steam turbine heavy
industries, equity incentives, acquisition of equity of subsidiaries of the Group and other important business and
governance activities, went through the examination and approval procedures for important matters, supervised
the Company's business activities and ensured its compliance.
（2）Effectiveness of organization
The Board of Directors is the executive body of the decisions made by the Shareholders’ Meeting. The Board is
also responsible to establish and improve the internal control system of the Company, and make it works
effectively. Chairman of the Board is the caller of the Board. Strategy, Investment, Remuneration, and Auditing
Committees were established within the Board, and were supporting the decision-making of the Board. The
Supervisory Committee is responsible to report to the Shareholders’ Meeting and supervise the legal performance
of duties of directors, managers, and executives. The management is responsible to the Board, and take charge of
daily operation of the Company. Functional departments were deployed according to the needs of business with
clear responsibilities.
（3）Basis for material decisions
The Company has setup practical rules for all material aspects of management, including but not limited to,
external investment, trusteeship, related transactions, information disclosure, investors’ relationship, information
insider, executive shares, and management of controlled subsidiaries. These documents of rules were constantly
revised and improved to maintain effectiveness upon changing situation. In the report period,
According to the Company Law of the People's Republic of China, and other relevant regulations of China
Securities Regulatory Commission and Shenzhen Stock Exchange, and in combination with the actual situation of
the Company, it revised the Articles of Association and the Remuneration Management System for Directors and
Senior Managers.
（4）Establishing of internal control system
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
35
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
information disclosure media and website. With fair treatment to all investors, the company in a timely manner
discloses the information with truthfulness, accuracy and completeness, which well ensures the transparency of
the company and the legitimate rights and interests of all shareholders.
Does there exist any difference in compliance with the corporate governance , the PRC Company Law and the
relevant provisions of CSRC,
□ Yes √No
There exist no difference in compliance with the corporate governance , the PRC Company Law and the relevant
provisions of CSRC.
II. Independence and Completeness in business, personnel , assets, organization and finance
The Company kept independence and separated with holding shareholders on the aspects of business, human
resource, capital, organization, and accounting. And the Company established independent and complete business
operating systems.
1. On business operations
The Company’s majors of design, manufacture, sale business of industrial steam turbine was independent from the
holding company (Hangzhou Steam Turbine Power Group).（
2. On personnel management
The Company kept independence with the holding shareholders on the aspects of human resource and
remuneration management. the Company’s management was employed and gotten salary exclusively in the
Company instead of any management duty in the holding-share share holders except the duty of chairman of the
Board. The Company’s accountant shad no part-time job in their parent company or related companies.
3. On capital operation
The property relationship between the Company and the holding-share shareholders was clear and explicit. The
capital and business injected by the holding-share shareholders was independent and complete. And at the same
time, the Company owned system of manufacturing and operation, sale, accessorial manufacturing and relevant
equipments which independent from holding shareholder.
4. On organization structure
The Company kept total independence from the controlling shareholder on the organization configuration. The
Company owned separate and independent manufacturing, supplying, and sales system, there was no horizontal
competition with the controlling shareholder, and the Company owned independent management and operation
systems. The Company signed related trading agreements with the subsidiaries of the share-holding company. The
Company’s intermediate managers are employed by the Company’s executives, and was evaluated under the
economic responsibility system.
5. On accounting management
The Company had independent accounting department, and established independent account re-calculation system
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
Sessions Type Investor Meeting Disclosure Disclosure index
36
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
participation ratio Date date
1st Provisional Provisional
Shareholders’ Meeting 2022 January 7, January 8, Announcement
Shareholders’ 67.37%
2022 2022 No.:2022-02
Meeting
2nd Provisional Provisional February
Shareholders’ Meeting 2022 February 19, Announcement
Shareholders’ 68.46% 18,
2022 No.:2022-07
2022
Meeting
2021 Shareholders’ general Shareholders’ April 27, April 28, Announcement
68.46%
2022 2022 No.:2022-47
meeting Meeting
3rd Provisional Provisional
Shareholders’ Meeting 2022 July Announcement
Shareholders’ 68.56%
25,2022
July 26,2022
No.:2022-66
Meeting
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
37
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
V. Information about Directors, Supervisors and Senior Executives
(1)Basic situation
Number Number
of of Number of
Shares
shares shares shares held Reasons for
held at the Other
Office Expiry date of increase reduced at the end of increase or
Name Positions Sex Age Starting date of tenure year- changes(s
status tenure d in the in the the decrease of
begin(shar hares)
current current period(share shares
e) s)
period period(s
(shares) hares
Zheng
Board chairman In office Male 58 May 18,2016 December 9,2022 250,000 75,000 325,000 Dividend
Bin
Ye Dividend
Director, GM In office Male 54 June 19,2004 December 9,2022 250,000 75,000 325,000
Zhong
Yang
Yongmi Vice Chairman In office Male 58 June 24,2013 December 9,2022 200,000 60,000 260,000 Dividend
ng
Wang Dividend
Director, Deputy GM In office Male 50 June 30,2017 December 9,2022 200,000 60,000 260,000
Gang
Pan
Director In office Male 44 May 10,2021 December 9,2022 0 0 0
Xiaohui
Gu Dimissi
Independent Director Male 66 May 18,2016 July 25,2022 0 0 0
Xinjian on
Chen
Dimissi Femal
Danhon Independent Director 58 May 18,2016 July 25,2022 0 0 0
on e
g
Zhang
Independent Director In office Male 63 December 10,2019 December 9,2022 0 0 0
Hejie
Yao
Independent Director In office Male 57 July 25,2022 December 9,2022 0 0 0
Jianhua
Xu
Independent Director In office Male 60 July 25,2022 December 9,2022 0 0 0
Yongbin
Jin Femal
Independent Director In office 53 July 25,2022 December 9,2022 0 0 0
Yingchu e
38
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
n
Zhang Chairman of the Femal
In office 37 July 23,2021 December 9,2022 0 0 0
Weijie Supervisory Committee e
Zhu
Femal
Chenqia Supervisor In office 30 April 24,2022 December 9,2022 0 0 0
n e
Added to a
personal
Yan Femal
Employee Supervisor In office 41 December 7,2022 December 9,2022 2,000 700 2,700 investment
Ying e before the
supervisor
Lu Dimissi
Employee Supervisor Male 61 August 15,2004 April 27,2022 0 0 0
Jianhua on
Fang Dimissi
Employee Supervisor Male 61 February 16,2012 December 7,2022 0 0 0
Yin on
Kong
Deputy General
Jianqian In office Male 52 June 24,2013 December 9,2022 200,000 60,000 260,000 Dividend
g Manager,Chief engineer
Li Dividend
Dimissi
Jianshen Deputy General Manger Male 59 December 5,2014 May 11,2022 200,000 60,000 260,000
on
g
Wang
Zhengro Deputy General Manger In office Male 52 June 9,2017 December 9,2022 200,000 60,000 260,000 Dividend
ng
Zhao Deputy General Manger, Dividend
In office Male 47 January 1,2018 December 9,2022 200,000 60,000 260,000
Jiamao Chief accounantant
Li Deputy GM, secretary of Femal
In office 52 January 9,2019 December 9,2022 200,000 60,000 260,000 Dividend
Guiwen the board
e
Li Dividend
Deputy GM In office Male 40 May 11,2022 December 9,2022 100,000 30,000 130,000
Binghai
Total -- -- -- -- -- -- 2,002,000 600,700 0 0 2,602,700 --
39
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
During the reporting period, whether there is dismissal of directors and supervisors and decruitment of senior
managers
□Yes√No
Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
Name Positions Types Date Reason
Lu Jianhua Supervisor Dimission April 27,2022 Retire
Zhu Chenqian Supervisor Elected April 27,2022 supplement
Li Jiansheng Deputy GM Dimission May 11,2022 Retire
Li Binghai Deputy GM Appointed May 11,2022 Due to company work needs
Served as an independent
Chen Danhong Independent Director Dimission July 25,2022 director of the company for
6 consecutive years
Served as an independent
Gu Xinjian Independent Director Dimission July 25,2022 director of the company for
6 consecutive years
Xu Yongbin Director Elected July 25,2022 supplement
Yao Jianhua Director Elected July 25,2022 supplement
Jin Yingchun Director Elected July 25,2022 supplement
Fang Yin Employee Supervisor Dimission December 7,2022 Retire
Yan Ying Employee Supervisor Elected December 7,2022 supplement
(2) Posts holding
The professional background, working experience and main responsibilities of the current board members,
supervisors and senior managers in the company
（1）Director
Mr. Zheng Bin, born in November 1964, CCP member, university graduate, senior economics professional
certification. He served as vice chairman and Vice General Manager , Party Secretary and Chairman of Hangzhou
Steam Turbine Power Group Co., Ltd.. He was engaged the vice Chairman at the 4th term of Board on March
2009 ,Vice Chairman at the 5th term of Board on June 2010, He was engaged the Director and General Manager
of the Company on June 2013, He was engaged the Chairman at the 6th term of Board on December 2014. He
was elected as Chairman of the 7th term of board of directors on May 2016. Currently is the 8th chairman of the
company.
Mr. Ye Zhong: born in April 1968, CCP member; bachelor degree; professor and senior engineer. He served as
director of Hangzhou Steam Turbine Power Group Co., Ltd.Started working in July 1990. he was the director of
the 2nd term of Board, Chief Engineer; director of the 3rd term of Board, Vice General Manager; Director of the
4th and 5th terms of Board, Vice General Manager, and Chief Engineer. He’s the Standing Vice General Manager,
director and Chief Engineer of the 6th term of Board of the Company, and General Manager of the 4 Company
since December 2014. He was elected as director and General Manager of the 7th term of board of directors on
May 2016. Currently is the 8th Director and General Manager of the company.
Mr. Yang Yongming, born in November 1964, CCP member, university graduate, certified senior economist.
Currently he’s the vice general manager of Hangzhou Steam Turbine Power Group Co., Ltd. He used to be the
vice director and director of Sales Administration Departments of the Company; Since 2013, he served as vice
general manager, general manager, and vice chairman of Hangzhou Dongfeng Shipyard Ltd. Currently he’s the
vice general manager of Hangzhou Steam Turbine Power Group Co., Ltd . and the Vice Chairman of the 6th term
of Board of the Company. He was elected as Vice Chairman of the 7th term of board of directors on May 2016.
Currently is the 8th vice chairman of the company.
Mr. Wang Gang, born in February 1972, member of the Communist Party of China, postgraduate degree, Zhejiang
University MBA, senior engineer. In 1993 the company entered the company, served as the company organization
personnel, a steam shop, security, securities laws and regulations, operation and management department and
other department heads. The current party secretary of the party committee, discipline appoint secretary, trade
40
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
union chairman. He was engaged the secretary of the board and director of the Company on June 2017. He was
elected as director of the 7th term of board of directors on June 30, 2017. Currently is the 8th Director and Deputy
General Manager of the company.
Mr. Pan Xiaohui, born in November 1978, a member of the Communist Party of China, is a senior accountant
with a university degree. He served as vice chairman of Hangzhou Steam Turbine Holdings Co., Ltd. He joined
the Hangzhou Municipal Finance Bureau in 2003 and served successively as a section member, deputy division
chief of Comprehensive Office and division chief of account of Bureau of Financial Supervision and Inspection of
Hangzhou Municipal Finance Bureau. From February 2021, Currently is the 8th Director of the company.
Mr. Zhang Hejie, born in January 1958, holds a master's degree in philosophy, a doctorate in management, a
visiting scholar at the University of Cambridge, and a professor and doctoral tutor at the School of Economics and
Management of Zhejiang University of Technology. the Communication Review Expert of the National Natural
Science Foundation. Currently is the 8th Independent director of the company.
Mr. Xu Yongbin, born in December 1962, is a member of the Communist Party of China and doctor of
management, and he has obtained the qualification certificate of independent director. He has served as a lecturer
and associate professor of Hangzhou Business School, dean and professor of the School of Finance and
Accounting of Zhejiang Gongshang University, vice president of Zhejiang Accounting Society, and vice president
of Zhejiang Auditing Society. He is currently a second-level professor and doctoral supervisor of Zhejiang
Gongshang University. He’s selected as a young and middle-aged academic leader in Zhejiang Province, a talent
of Zhejiang Province New Century 151 Talent Project Talents, and a talent of Zhejiang Province "Five Batches"
Talents. Currently is the 8th Independent director of the company.
Mr. Yao Jianhua, born in December 1965, is a member of the Communist Party of China, with a doctorate degree
of Zhejiang University of Technology, and he is a Ph.D. Director of Engineering and professor of Zhejiang
University of Technology, he is a Special Expert of Zhejiang Province. He is currently the dean of the School of
Mechanical Engineering and the dean of the Laser Advanced Manufacturing Research Institute of Zhejiang
University of Technology, concurrently holds the director of Chinese Mechanical Engineering Society and vice-
chairman of Zhejiang Nontraditional Machining Branch Engineering Society, and Standing member of heat
treatment branch, standing member of extreme manufacturing branch committee, Director of China Optical
Engineering Society, Vice Chairman of Zhejiang Mechanical Engineering Society, Vice Chairman of Zhejiang
Shipbuilding Society, etc. He’s selected into the National Hundred Thousand Talents Project, the first batch of
outstanding talents in Zhejiang Province's Ten Thousand Talents Program, the first level of Zhejiang Province's
151 Talent Project, and won the "National Young and Middle-aged Experts with Outstanding Contributions",
"Zhou Zhihong Science and Technology Achievement Award", "Young and Middle-aged Experts with
Outstanding Contributions in Zhejiang Province", "Outstanding Teachers in Zhejiang Province Colleges",
"Excellent Communist Party Members in Zhejiang Province Colleges and Universities" and other honors, and he
is member of the 11th CPPCC Zhejiang Provincial Committee, enjoying the Special government allowances.
Currently is the 8th Independent director of the company.
Ms. Jin Yingchun, born in November 1969, is a member of the Communist Party of China, and she is senior
lawyer, master of civil and commercial law from Zhejiang University, intermediate economist, intermediate
merger and acquisition expert, tutor of master of law at Zhejiang University of Finance and Economics and
Zhejiang Gongshang University, and she has obtained the qualification certificate of independent director. She has
served as a full-time and part-time lawyer of Zhejiang Economic Law Firm, the founder and director of Zhejiang
Tianyi Law Firm, and she has severed as a special inspector of Zhejiang Provincial Political and Legal Committee;
currently, she is director of the Management Committee of Yingke Hangzhou Law Firm, vice chairman of
Hangzhou Lawyers Association, and Vice President of Zhejiang M&A Federation, perennial legal advisor of
Hangzhou Shangcheng District Committee. Won the honors of the outstanding female lawyer of the first session
in Zhijiang Province, the outstanding corporate lawyer of Zhejiang Lawyers Association, and the outstanding
lawyer Serving small and medium-sized enterprises in Zhejiang Province. Currently is the 8th Independent
director of the company.
(II) The Supervisors
Ms. Zhang Weijie, senior accountant. Served as the Project Manager of Pan-China Certified Public
Accountants; Full-time Supervisor and Chief Financial Officer of the State-owned Assets Supervision and
Administration Commission of Hangzhou Municipal People's Government; Head of Financial Special Group of
Hangzhou State-owned Capital Investment and Operation Co., Ltd. She is currently the Employee Director and
Director of Finance Management Dept of Hangzhou Capital, the Chairman of Hangzhou Steam Turbine Power
Group Co., Ltd, and the Chairman of the Eighth Board of Supervisors of the Company.
41
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Ms. Zhu Chenqian, born in May 1992, a member of the Communist Party of China, obtained a master's
degree in finance, is a certified public accountant, asset appraiser and intermediate accountant; She used to be the
auditor of PricewaterhouseCoopers Zhongtian Accounting Firm (LLP), the risk manager and product manager of
Bank of Beijing Co., Ltd Hangzhou Branch; She is currently the head of the asset management department of
Hangzhou State-owned Capital Investment and Operation Co., Ltd and the supervisor of the eighth board of
supervisors of the Company.
Ms. Yan Ying, born in November 1981, a member of the Communist Party of China, with a master's degree,
is a certified public accountant, a certified internal auditor and a senior economist. She graduated from Dongbei
University of Finance and Economics in January 2008 with majored in finance, and entered Hangzhou Turbine
Power Group Co., Ltd in March of the same year. She now works in the operation management department of
Hangzhou Turbine Power Group Co., Ltd, engaged in the Company's state-owned asset property rights
management in long-term; She is currently the employee supervisor of the eighth board of supervisors of the
Company.
(III) Senior Executives
Profiles of General Manager Ye Zhong, Deputy General manager Wang Gang are available among the directors
above.
Mr. Kong Jianqiang, born in May 1970, CCP member, Master of Engineering, certified senior engineer. Started
working in July 1992. He used to be technician, head of workshop, vice director, and director of Steam Turbine
Institute of the company. He’s the director of the 6th term of Board since June 2013, and Engineer General of the
Company since December 2014. He was elected as director of the 7th term of board of directors on May 18, 2016.
Appointed as deputy general manager and Chief engineer of the company. Currently is the 8th Director , Deputy
General Manager and Chief engineer of the company.
Mr. Wang Zhengrong, born in October 1970, member of the Communist Party of China, university degree,
Bachelor of Engineering, Zhejiang University, senior engineer. In 1992 to enter the company work, served as
deputy director of the company sales, director, marketing party branch secretary. Since March 2010, he has been a
member of the Party Committee of the Company. He has been Assistant General Manager of the Company and
Director of Steam Turbine Marketing since June 2015. Mr. Wang was engaged the Deputy general manager of the
Company since June 2017.
Mr. Zhao Jiamao, born in March 1975, member of the Communist Party of China, university degree, certified
public accountant and senior accountant. He joined Hangzhou Steam Turbine Power Group Co., Ltd. Finance
Office in 1995 and was once the Vice Minister of Finance of Hangzhou Steam Turbine Power Group Co., Ltd.,
Chief Accountant, Deputy General Manager and General Manager of Hangzhou Steam Turbine Power
Technology Co., Ltd. In December 2014, he was the Deputy Chief Accountant and Chief Financial Officer of the
Company. Since March 2016, he has been the General Manager Assistant, the Director of Asset Management
Department and the Finance Department and the Contract Department. Mr. Zhao was engaged the Deputy general
manager and Chief accounting of the Company since January 2018.
Ms. Li Guiwen, born in September 1970, member of the Communist Party of China, postgraduate degree, senior
engineer. In 1992 the company entered the company, She served as Deputy director General office and Deputy
Minister of Economic Management of Hangzhou Steam turbine Power Group, Since August 2007, She Served as
Minister of Strategic Development of Hangzhou Steam turbine Power Group, Since November 2017,She served
as Secretary of the Board of Directors of Hangzhou Steam turbine Power Group. Since January 2019, She served
as director of the 7th term of board of directors of the Company.On February 2019, She served as director of the
8th term board of director of the Company, Currently is the 8th secretary and Deputy General Manager of the
board of the company. She was engaged the Deputy GM and secretary board of directors.
Mr. Li Binghai, born in April 1982, is a member of the Communist Party of China, with a bachelor's degree and
majoring in mechanical engineering and automation and business administration from Jiangnan University, and he
has a master's degree in industrial engineering from Zhejiang University of Technology. From August 2005 to
March 2010, he worked in Hangzhou Machine Tool Group, and served as the assistant manager of the
manufacturing department and the deputy manager of the manufacturing department. He joined the Company in
March 2010 and has served as the chief of the Marketing Section of the Contract Management Office, the Deputy
Chief and the Chief of the Contract Management Office, and he is currently the director of the stator workshop of
the Company. Since May 2022, he is currently the Deputy GMof the Comapny.
Office taking in shareholder companies
√Applicable □Not applicable
42
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Does he /she
receive
Names of the Names of the Titles engaged in Sharing date of Expiry date of
remuneration or
persons in office shareholders the shareholders office term office term
allowance from the
shareholder
Hangzhou Steam Board chairman
Pan Xiaohui Turbine Holding and General August 5,2022 No
Co., Ltd. Manager
Offices taken in other organizations
√Applicable □Not applicable
Does he/she
Expiry receive
Name of the Titles engaged
Starting date of office date of remuneration or
persons in Name of other organizations in the other
term office allowance from
office organizations
term other
organization
Board
Ye Zhong New Energy Company November 30,2021 No
chairman
Yang Board
Sales Company December 23,2021 No
Yongming chairman
Yang Hangzhou Heat Group Lomited by
Director January 25,2022 No
Yongming Share Ltd.
Hangzhou Zhongneng Steam Turbine Board
Wang Gang June 15,2022 No
Power Co., Ltd. chairman
Hangzhou Steam Turbine Casting Co.,
Wang Gang Director July 13,2022 No
Ltd.
China mechanical and Electrical
Kong
Institute -HSTG (Hangzhou) United Director April 11,2022 No
Jianqiang
Institutes Co., Ltd.
Kong Hangzhou Steam Turbine Auxiliary Board
June 15,2022 No
Jianqiang Machine Co., Ltd. chairman
Wang Hangzhou Steam Turbine Mechanical Board
May 30,2022 No
Zhengrong Equipment Co., Ltd chairman
Wang Hangzhou Zhongneng Steam Turbine
Director June 15,2022 No
Zhengrong Power Co., Ltd.
Wang Hangzhou Steam Turbine New Energy
Director November 30,2021 No
Zhengrong Co., Ltd.
Zhao Zhejiang Turbine Import & Export Co., Executive
June 2,2020 No
Jiamao Ltd. director
Zhao Hangzhou Zhongneng Steam Turbine
Director June 15,2022 No
Jiamao Power Co., Ltd.
Zhao Hangzhou Steam Turbine New Energy
Supervisor November 30,2021 No
Jiamao Co., Ltd.
Zhejiang Packaged Technology Board
Li Guiwen May 13,2020 No
Development Co., Ltd. chairman
Zhejiang Ranchuang Turbine Board
Li Guiwen October 28,2022 No
Machinery Co., Ltd. chairman
Hangzhou Steam Turbine Casting Co., Board
Li Binghai July 13,2022 No
Ltd. chairman
Hangzhou Steam Turbine Auxiliary
Li Binghai Director June 15,2022 No
Machinery Co., Ltd.
Zhejiang Ranchuang Turbine
Li Binghai Director October 28,2022 No
Machinery 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
(3) Remuneration to directors, supervisors and senior executives
Decision-making procedures, basis for determination and actual payment of the remuneration to directors ,
supervisors and senior executives
43
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
The remuneration plan for directors and executives was examined at the meeting. The Remuneration and
Assessment Committee of the Board conducted assessment on the performances of the directors and executives,
Assessment principles and procedures determined in accordance with the executive compensation management
system of directors(revised in 2021), The plan is subject to examination of the meeting of the Board.
Allowances for independent directors and supervisors are subject to approval by the Board and the Shareholders’
Meeting thereafter. The proposal of allowances for the 8th term of independent directors and supervisors was
adopted at the 2nd Provisional Shareholders’ Meeting held on December 10, 2019, and the allowance for
independent directors is RMB150,000 (tax included) per year, while it is RMB36,000 for supervisors for the
period of three years (tax included). Non employee supervisors do not enjoy the allowance
Remuneration of directors, supervisors, and executives in the report period
In RMB10,000
Statue of Total of reward from the Actual reward in total
Name Position Sex Age
duty Company(Pre-tax) at end of report term
Zheng Bin Chairman Male 58 In Office 122.00 No
Ye Zhong Director, GM Male 54 In Office 130.51 No
Yang
Vice Chairman Male 58 In Office 99.02 No
Yongming
Wang Gang Director, Deputy GM Male 50 In Office 137.33 No
Pan Xiaohui Director Male 44 In Office 0.00 Yes
Gu Xinjian Independent Director Male 66 Dimission 10.00 No
Chen
Independent Director Female 58 Dimission 10.00 No
Danhong
Zhang Hejie Independent Director Male 63 In Office 15.00 No
Yao Jianhua Independent Director Male 57 In Office 0.00 No
Xu Yongbin Independent Director Male 60 In Office 6.25 No
Jin Yingchun Independent Director Female 53 In Office 6.25 No
Chairman of the
Zhang Weijie Female 37 In Office 0.00 Yes
Supervisory Committee
Zhu
Supervisor Female 30 In Office 0.00 Yes
Chenqian
Yan Ying Employee Supervisor Female 41 In Office 19.38 No
Lu Jianhua Employee Supervisor 男 61 Dimission 13.80 No
Fang Yin Employee Supervisor Male 61 Dimission 41.64 No
Kong Deputy GM, Chief
Male 52 In Office 135.60 No
Jianqiang engineer
Li Jiansheng Deputy GM Male 59 Dimission 153.28 No
Wang
Deputy GM, Male 52 In Office 144.02 No
Zhengrong
Deputy General Manger,
Zhao Jiamao Male 47 In Office 139.16 No
Chief accountant
Deputy GM, secretary of
Li Guiwen Female 52 In Office 146.30 No
the board
Li Binghai Deputy GM Male 40 In Office 59.55 No
Total -- -- -- -- 1,389.09 --
44
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
VI. Performance of directors' duties during the reporting period
(1) Information of the board meetings during the reporting period
Session Convening date Disclosure date Meeting resolution
The 21st meeting of the
January 25,2022 January 26,2022 （Announcement No.:2022-04）
8th term of Board
The 22nd meeting of the
March 22,2022 March 23,2022 （Announcement No.:2022-09）
8th term of Board
The 23rd meeting of the
March 29,2022 March 31,2022 （Announcement No.:2022-15）
8th term of Board
The 24th meeting of the
April 26,2022 April 27,2022 （Announcement No.:2022-41）
8th term of Board
The 25th meeting of the
May 11,2022 May 12,2022 （Announcement No.:2022-49）
8th term of Board
The 26th meeting of the
July 1,2022 July 2,2022 （Announcement No.:2022-53）
8th term of Board
The 27th meeting of the
July 25,2022 July 26,2022 （Announcement No.:2022-67）
8th term of Board
The 28th meeting of the
August 23,2022 August 25,2022 （Announcement No.:2022-72）
8th term of Board
The 29th meeting of the
October 27,2022 OCTOBER 28,2022 （Announcement No.:2022-80）
8th term of Board
The 30th meeting of the
December 21,2022 December 22,2022 （Announcement No.:2022-86）
8th term of Board
(2) Attendance of directors at the board meetings and the general meeting of shareholders
Attendance of directors at the board meetings and the general meeting of shareholders
Number of Number of
board Number of board Whether to
Number of
meetings board meetings Number of attend the General
board
Name of board board meetings of
attended meetings attended by meetings
meetings meeting in shareholders
director attended by
during the attended in means of absent from person twice attended
reporting person communica proxy
in a row
period tion
Zheng Bin 10 8 2 0 0 No 4
Ye Zhong 10 8 2 0 0 No 4
Yang
10 8 2 0 0 No 4
Yongming
Wang
10 8 2 0 0 No 4
Gang
Pan
10 7 3 0 0 No 4
Xiaohui
Gu Xinjian 6 5 1 0 0 No 3
Chen
6 5 1 0 0 No 3
Danhong
Zhang
10 7 3 0 0 No 4
Hejie
Xu Yongbin 4 2 2 0 0 No 1
Yao Jianhua 4 2 2 0 0 No 1
Jin Yingchun 4 2 2 0 0 No 1
Explanation of failure to attend the board meeting in person twice in a row
45
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(3) Directors' objections to related matters of the Company
Whether the director raises any objection to the relevant matters of the Company
□ Yes √ No
During the reporting period, the directors did not raise any objection to the relevant matters of the Company.
(4) Other descriptions of directors' performance of duties
Whether the directors' suggestions on the Company have been adopted
√Yes □ No
The director's statement on whether the relevant suggestions of the Company have been adopted or not
During the reporting period, in accordance with the provisions of The Company Law, The Securities Law, the
Articles of Association and other laws and regulations, the directors paid attention to the standardization of the
Company's operation, proceeded from the interests of the Company, and put forward reasonable suggestions based
on the long-term development of the enterprise in the process of deliberating on regular reports, capital increase to
new energy company, restricted stock repurchases, investment and construction of 10 sets of gas turbine units per
year, etc. The Company listened carefully to the suggestions of directors, organized relevant personnel to evaluate
and verify related matters, and fully utilized the leadership role of directors in scientific decision-making and
standardized management.
VII. Situation of special committees under the Board of Directors during the reporting period
Put forward Other
Number of Details of
Committee Member Convening important information
meetings Meeting content objections
name information date opinions and of duty
convened (if any)
suggestions performance
Chen Danhong Preliminary
Audit (Convenor), Gu January deliberations of
2 N/A N/A
Committee Xinjian, Zhang 25,2022 the Audit
Hejie, Ye Zhong Committee:
Report on the
implementation
of audit work,
communicate
annual report
audit and
internal control
audit matters.
The accounting
firm reported the
audit situation of
the "2021
Chen Danhong
Annual Audit
Audit (Convenor), Gu March 22,
2 Report", N/A N/A
Committee Xinjian, Zhang 2022
"Special
Hejie, Ye Zhong
Explanation on
the Occupation
of Non-
operating Funds
and Other
Related Funds",
"Internal Control
Audit Report"
and other audit
conditions;
Preliminary
deliberations of
46
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
the Audit
Committee:
：
1. 2021 Annual
Report
2. The Financial
Report 2021
3. Assets
Impairment
Provision and
Bad Debt
Provision
4. 2021 Write-off
of Assets Losse
5. 2021 Profit
Distribution
Plan
6. Proposal to
extend the
service of Pan-
China CPA as
auditor of the
Company
7. Proposal on
the use of idle
funds for short-
term and
medium-term
financial
management by
the company in
2022
8. Proposal on
Retrospective
Adjustment of
Financial Data
by Mergers of
Enterprises
Under Same
Control
9. Summary of
Internal Audit
Work in 2021
and Internal
Audit Plan in
2022
10.2021 Internal
Control Self-
Evaluation
Report
Zhang
Remuneration Preliminary
Hejie(Convenor) Gu
and March 22, deliberations of
Xinjian, Chen 1 N/A N/A
Assessment 2022 the Audit
Danhong, Pan
Committee Committee:
Xiaohui
Gu Xinjian, Chen The Proposal on
Nomination May
Danhong, Zhang 2 Nominating Li N/A N/A
committee 11,2022
Hejie, Zheng Bin Binghai as the
47
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Deputy General
Manager of the
Company
1. Proposal on
Nominating Jin
Yingchun as a
Candidate for
Independent
Director of the
Company
2. Proposal on
Nominating Yao
Gu Xinjian, Chen Jianhua as a
Nomination July
Danhong, Zhang 2 Candidate for N/A N/A
committee 1,2022
Hejie, Zheng Bin Independent
Director of the
Company
3. Proposal on
Nominating Xu
Yongbin as a
Candidate for
Independent
Director of the
Company
VIII.The working status of the board of supervisors
The board of supervisors finds out whether the company has risks during the monitoring activities during the repo
rting period
□ Yes √ No
The Supervisory Committee has no objection to the supervision matters during the reporting period.
IX. Particulars about employees.
(1)Number of staff, professional structure and educational background
Number of in-service staff of the parent company(person) 2,026
Number of in-service staff of the main subsidiaries(person) 1,959
The total number of the in-service staff(person) 3,985
The total number of staff receiving remuneration in the current
3,985
period(person)
Retired staff with charges paid by the parent company and main
7
subsidiaries (person)
Professional
Category Number of persons（person）
Production 2,250
Sales 340
Tech 883
Finance 85
Administration 427
Total 3,985
Education
Category Number of persons（person）
Master’s Degree 329
Bachelor 1,530
College diploma 809
48
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
High school and below 1,317
Total 3,985
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 2022 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 2022, 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 “2022 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, 137 training classes were held in 2022, the person-time of staff
received trainings reached 5046. For 2023, the company plans to carry out 120 training programs in aspects of
management, engineering technology, operation skills, quality, environment and safety education.
4. Outsourcing situation
□ Applicable √ Not applicable
X. Specification of profit distribution and capitalizing of common reserves
Formulation, implementation or adjustment of the profit distribution policy, especially the cash dividend policy
during the reporting period
√ Applicable □ Not applicable
(1) Company dividend policy principle: The Company's profit distribution policy maintains its continuity and
stability, with full attention to the reasonable return on investment for investors, and consideration of the long-
term interests of the Company, the overall interests of all shareholders and the sustainable development of the
Company;
(2) Cash dividend priority: The Company can distribute dividends by cash, stock or by combination of both. On
the premise that the Company is profitable and has sufficient cash flow to meet its sustainable operation and long-
term development, the Company will give priority to the profit distribution method of cash dividend;
(3) Listen to the opinions and demands of independent directors and minority shareholders: the Board of Directors
of the Company fully considers the development stage, profit scale, cash flow status and current capital demand of
the Company, and formulates a specific dividend plan based on the opinions of shareholders, especially minority
shareholders, which is submitted to the General Meeting of Shareholders of the Company for deliberation after the
independent directors express their independent opinions; When the General Meeting of Shareholders of the
Company deliberates the specific cash dividend plan, it shall actively communicate and exchange with
shareholders, especially minority shareholders, through various channels, fully listen to the opinions and demands
of minority shareholders, and timely address to their concerns;
(4) Dividend period: In principle, the Company implements profit distribution on an annual basis. The Company
announces the dividend plan within four months after each fiscal year, and implements the distribution plan within
two months after the General Meeting of Shareholders approves it;
(5) Dividend ratio: On the premise that the Company is profitable and the cash can meet its continuous operation
and long-term development, the accumulated profit distributed by the Company in cash in the last three years is
not less than 30% of the annual distributable profit realized in the last three years;
(6) Decision-making procedure of dividend plan: According to the Articles of Association, the dividend plan of the
Company is proposed by the Board of Directors, and submitted to the General Meeting of Shareholders of the
Company for deliberation after being reviewed and approved by the Board of Directors and expressed opinions on
by independent directors;
(7) Adjustment procedure of dividend policy: If the Company is required to adjust the profit distribution policy
49
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
according to the needs of production and operation, investment planning and long-term development, the adjusted
profit distribution policy shall not violate the relevant regulations of China Securities Regulatory Commission and
the stock exchange. Opinions of independent directors and the board of supervisors shall be solicited in advance
for the proposal for adjusting the profit distribution policy, which shall be submitted to the Company's General
Meeting of Shareholders after deliberation by the Company's Board of Directors, and be implemented only after
more than two-thirds of the voting rights held by shareholders present at the General Meeting of Shareholders.
Special description of cash dividend policy
Whether it meets the requirements of the Articles of Association or the resolution of the
Yes
general meeting of shareholders:
Whether the dividend standard and proportion are explicit and clear: Yes
Whether the relevant decision-making procedures and mechanisms are complete: Yes
Whether the independent directors have performed their duties and played their due role: Yes
Whether the minority shareholders have the opportunity to fully express their opinions and
Yes
demands, and whether their legitimate rights and interests have been fully protected:
Whether the cash dividend policy is adjusted or changed, and whether the conditions and
Yes
procedures are compliant and transparent:
During the reporting period, the Company made a profit and the profit available to shareholders of the parent
company was positive, but no cash dividend distribution plan was put forward.
□ Applicable √ Not applicable
Profit distribution and capitalization of capital reserve during the reporting period
√ Applicable □ Not applicable
Bonus shares for every ten shares(Shares) 2
Cash dividend for every ten shares (Yuan)(Tax-included) 3
A total number of shares as the distribution basis(shares) 979,537,000
Cash dividend amount (yuan, including tax 293,861,100.00
Other means (such as repurchase of shares) cash dividend
0.00
amount (yuan)
Total cash dividend (yuan, including tax) 293,861,100.00
Distributable profit (yuan) 3,385,297,545.74
Proportion of cash dividend in the distributable profit 60%
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 2022, with the total share capital of 980,179,980 shares at the end of the year deducting 111,800 treasury shares repurchased
as of date of record by Company and 531,180 shares of share capital were cancelled due to the retirement and resignation of
equity incentive objects in December 2022, that is, 979,537,000 shares, the Company would distribute cash dividend to all the
shareholders at the rate of CNY 3.0 for every 10 shares (with tax inclusive) , 2 bonus shares ，and no reserve would be converted
into share capital.
XI. Implementation Situation of Stock Incentive Plan of the Company, Employee Stock Ownership Plan or
Other Employee Incentive Measures
√ Applicable □ Not applicable
(1) Equity incentive
(I) On July 11, 2021, the 14th Meeting of the Eighth Board of Directors reviewed and approved the Proposal
on the Company's Restricted Stock Incentive Plan (Draft) in 2021 and its Summary, the Proposal on the
Company's Implementation Assessment Management Measures for the Restricted Stock Incentive Plan in 2021,
and the Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors to
Handle Matters Related to the Restricted Stock Incentive Plan in 2021, and the Ninth Meeting of the Eighth
Supervisors of the Company reviewed and approved the above related proposals.
Independent directors of the Company expressed their independent opinions on whether the equity incentive
plan is conducive to the sustainable development of the Company and whether there is any harm to the interests of
the Company and all shareholders.
(II) On August 12, 2021, the Company disclosed the Announcement on the Approval of Equity Incentive
Plan by Hangzhou SASAC. The Company received the Reply of Hangzhou Steam Turbine Co., Ltd. on
Implementing the Restricted Stock Incentive Plan in 2021 (HGZK [2021] No.45), and Hangzhou SASAC
50
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
agreed in principle that the Company should implement the restricted stock incentive plan in 2021.
(III)From July 12, 2021 to July 21, 2021, the company will post the "Announcement of the Company'
s 2021 Restricted Stock Incentive Objects" through the company's business premises, publicizing the name
s and positions of the incentive objects, and clarifying the circumstances under which they cannot become equity i
ncentive objects. , as well as the ways and means of feedback during the publicity period. As of the expiration of
the publicity period, the company has not received any objection from any organization or individual to the incenti
ve objects of this incentive plan.
(IV) On August 27, 2021, the Company held the Second provisional Shareholders' General Meeting in 2021,
which reviewed and approved the Proposal on the Company's Restricted Stock Incentive Plan in 2021 and its
Summary, the Proposal on the Company's Implementation Assessment Management Measures for the Restricted
Stock Incentive Plan in 2021, and the Proposal on Requesting the General Meeting of Shareholders to Authorize
the Board of Directors to Handle Matters Related to the Restricted Stock Incentive Plan in 2021.
Meanwhile, the Company disclosed the Self-inspection Report on Insider Information of Restricted Stock
Incentive Plan in 2021 and Stock Trading of Incentive Objects.
(V) On August 30, 2021, the Company convened the 16th Meeting of the Eighth Board of Directors and the
11th Meeting of the Eighth Board of Supervisors, and respectively reviewed and approved the Proposal on
Granting Restricted Stocks to Incentive Objects for the First Time. The Board of Directors of the Company
considered that the granting conditions of restricted stocks stipulated in this incentive plan had been fulfilled, and
agreed to grant 18.17 million restricted stocks to 457 incentive objects who meet the granting conditions on
September 1, 2021 for the first time, at a price of HK$ 6.825 per share. The Board of Supervisors of the Company
verified the list of incentive objectives again and issued a clear consent opinion. Independent directors of the
Company expressed their agreed independent opinions on this.
(VI) On October 22, 2021, the Company completed the registration of granting restricted shares for the first
time, with 455 people registered for the first time and 18,060,000 shares registered.
(VII) On December 16, 2021, the 20th Meeting of the 8th Board of Directors and the 13th Meeting of 8th
Board of Supervisors of the Company reviewed and approved the Proposal on Granting Reserved Restricted
Shares to Incentive Objects.. it is agreed that December 16, 2021 will be reserved for granting restricted shares,
and 1,380,000 restricted shares will be granted to 37 eligible incentive objects at a grant price of HK$ 6.825 per
share. Independent directors of the Company expressed independent opinions on relevant proposals of the Board
of Directors
（VIII) On January 14, 2022, the Company completed the registration of reserved grant of restricted shares,
with 37 registered shareholders reserved and 1,380,000 registered shares.
(IX)On December 21, 2022, the Company held the 30th meeting of the 8th session of the Board of Directors and
the 19th meeting of the 8th session of the Board of Supervisors, in which it deliberated and passed the "Proposal
on Repurchase and Cancellation of Some Restricted Shares" and "Proposal on Adjusting the Repurchase Quantity
and Repurchase Price of the 2021 Restricted Stock Incentive Plan". In view of the fact that 9 of the incentive
objects are no longer eligible for incentive objects due to retirement reasons, and 1 person is no longer eligible for
incentive object due to personal reasons, it’s agreed to repurchase and cancel a total of 531,180 shares of restricted
shares held by them that have been granted but have not yet been lifted. Meanwhile, as the Company had
completed the implementation of the 2021 profit distribution plan, in accordance with the provisions of the
Incentive Plan, the repurchase price of restricted shares has been adjusted from RMB 5.6764 per share (HKD
price is HKD 6.825 HKD per share) to RMB 4.06 per share. After the review and confirmation of the Shenzhen
branch of China Securities Depository and Clearing Co., Ltd, the afore-said repurchase cancellation has been
completed on March 2023.
51
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Evaluation mechanism and incentives of senior managers
√ Applicable □ Not applicable
In shares
Strike price Quantity Quantity
Number Quantity
Number Number and the Number of of
of newly umber of Quantity of
of stock of number of of stock restricted restricted
granted vested Market price of the Price of the restricted
options exercised the options shares shares
stock shares at the end of shares restricted shares
held at shares exercised held at held at newly
Name Position options during the reporting unlocked shares held at
the during shares the end the granted
during the period in the granted the end of
beginning the during the of the beginning during
the reporting (CNY/share) reporting (CNY/share) the
of the reporting reporting reporting of the the
reporting period period reporting
year period period period reporting reporting
period period
(CNY/share) period period
Zheng Bin Board Chairman 250,000 325,000
Ye Zhong Director, GM 250,000 325,000
Yang
Vice Board Chairman 200,000 260,000
Yongming
Wang
Director, Deputy GM 200,000 260,000
Gang
Deputy GM, secretary
Li Guiwen 200,000 260,000
of the board
Kong Deputy GM, Chief
200,000 260,000
Jianqiang Engineer
Li
Deputy GM 200,000 260,000
Jiansheng
Wang
Deputy GM 200,000 260,000
Zhengrong
Zhao Deputy, GM, Chief
200,000 260,000
Jiamao accountant
Deputy Secretary of
the Party Committee
Li Shijie 200,000 260,000
and Chairman of the
Trade union
Secretary of the
Cai
Commission for 200,000 260,000
Weijun
discipline inspection
Li Binghai Deputy GM 100,000 130,000
tOTAL -- -- -- 2,400,000 -- 3,120,000
Remark（If any）
The reason for the increase in the number of restricted shares held at the end of the period was due the 2021 equity distribution: based on the total
52
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
share capital of 754,010,400 shares at the end of 2021, excluding the repurchased 111,800 treasury shares as of the record date of the equity distribution, that
was the 753,898,600 shares was the basis, it distributed a cash dividend of 4.0 yuan per 10 shares (including tax) and 3 bonus shares (including tax) to all
shareholders.
Evaluation mechanism and incentive situation of senior managers
The Company conducts performance appraisal for senior managers according to the Management Measures for the Implementation of Restricted Stock Incentive
Plan in 2021, Detailed Rules for Performance Appraisal of Restricted Stock Incentive Objects of Hangzhou Steam Turbine Co., Ltd. (Trial) and the Remuneration
Management System for Directors and Senior Managers of the Company.
(2) Implementation of ESOP
□ Applicable √ Not applicable
(3) Other employee incentives
□ Applicable √Not applicable
53
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
XII. Construction and implementation of internal control system during the reporting period
(1) Construction and implementation of internal control
According to Basic Standards for Internal Control of Enterprises, Guidelines for Application of Internal
Control, Guidelines for Evaluation of Internal Control and Guidelines for Internal Control of Listed Companies
issued by Shenzhen Stock Exchange, the Company formulated the Internal Control Manual of the Company,
comprehensively combed the Company's business processes, identified key risk points, controlled the risk points
according to the Company's actual situation, and the internal audit organization of the Company regularly
evaluated the above control process and effect, and put forward rectification items and improvement suggestions.
The Audit Committee of the Company guided and supervised the internal control of the Company.
During the reporting period, according to the identification of major internal control defects in the
Company's financial report, there were no major internal control defects in the financial report on the base date of
the internal control evaluation report.
According to the identification of major defects in the internal control of the Company's non-financial reports, the
Company found no major defects in the internal control of non-financial reports on the base date of the internal
control evaluation report.
There were no factors influencing the evaluation conclusion of internal control effectiveness between the
base date of the internal control evaluation report and the date of issuance of the internal control evaluation report.
(2)Details of major internal control defects found during the reporting period
□ Yes √ No
XIII. Management and control of the Company's subsidiaries during the reporting period
Problems Subsequent
Integration Measures taken Solution
Company name Integration plan encountered in planned
progress for solution progress
integration solution
Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable
XIV.Internal control self-evaluation report or internal control audit report
(1)Self-evaluation report on internal control
Disclosure date of appraisal report on
March 29,2023
internal control
Disclosure index of appraisal report on
internal control Disclosed by http://www.cninfo.com.cn dated March 29, 2023
Proportion of total unit assets covered by
appraisal in the total assets of the
100.00%
consolidated financial statements of the
company
Proportion of total unit incomes covered
by appraisal in the total business incomes
100.00%
of the consolidated financial statements
of the company
Standards of Defects Evaluation
Type Financial Report Non-financial Report
Deficiency characterized as below will (1) Punishment received by governments
be treated as fatal defects: To correct the below provincial level ( including
fatal errors already published in the provincial level) but no negative effects
financial report （except for the for our company’s periodic report
retrospection and adjustments of disclosure will be considered as a general
previous years because of policies deficiency; (2) or punishments from
changing and other objective factors national governments above provincial
Standard level but no negative effects for our
changing);fatal errors already discovered
by auditor, unidentified in the current company’s periodic report disclosure will
financial report; any fraud among top be considered as a significant deficiency;
management; invalid monitoring to the (3) external official disclosure has been
financial report from audit committee already carried out and brought certain
and internal audit department. negative effects to our company’s
54
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
periodic report disclosure will be
considered as a fatal deficiency.
In accordance with the degree of 1) Losses < consolidating 3% of pre-tax
importance of deficiency that may cause profit, will be asserted as general
financial report errors, our company deficiencies; (2) 3% of combined pre-tax
defined quantitative identification profit ≤ losses < 5% of combined pre-tax
standard of financial report internal profit, will be asserted as significant
deficiency control as per the average of deficiencies; (3) losses ≥5% of combined
the last three-year total profit. 1) errors pre-tax profit, will be asserted as fatal
reported indicator < consolidating 3% of deficiencies.
Standards of Quantization pre-tax profit, will be asserted as general
deficiencies; (2) 3% of combined pre-tax
profit ≤ errors reported indicator < 5% of
combined pre-tax profit, will be asserted
as significant deficiencies; (3) errors
reported indicator ≥5% of combined pre-
tax profit, will be asserted as fatal
deficiencies.
Number of major defects in financial
0
reporting（a）
Number of major defects in non financial
0
reporting (a)
Number of important defects in financial
0
reporting（a）
Number of important defects in non
0
financial reporting（a）
(2) Internal Control audit report
√ Applicable □Not applicable
Review opinions in the internal control audit report
As far as our best understanding, Hangzhou Steam Turbine Co., Ltd. has been conducting effective internal control over its
financial reporting system in all material aspects we observed as of December 31, 2021, and has been following with the
Enterprise Internal Control Criteria.
Disclosure of internal audit report Disclosure
Disclosure date of audit report
March 29,2023
of internal control
Index of audit report of
Disclosed by http://www.cninfo.com.cn dated March 29, 2023
internal control (full-text)
Internal audit report’s opinion Unqualified audit opinion
Non-financial reporting the existence of significant deficiencies No
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
55
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
XV. Rectification of self-examination problems in special governance actions of listed companies
None
56
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
V. Environmental & Social Responsibility
I. Significant environmental issues
Whether the Company or any of its subsidiaries is identified as a key polluter by the environment authorities
√ Yes □ No
Administrative penalties for environmental problems during the reporting period
Impact on the
Company's
Name of company or Reasons for production and
Violation situation Penalty result rectification
subsidiary punishment operation of listed
measures
companies
Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable
Prevention and control of pollution facilities construction and operation
None
Administrative penalties for environmental problems during the reporting period
Applicable□ Not applicable
In 2022, based on technical energy saving, the Company further promoted the green and low-carbon production
and achieved the purpose of energy conservation and consumption reduction through the transformation and
implementation of a series of energy technology projects such as waste heat recovery and reuse of steam emitted
by the final assembly commission, accurate measurement of natural gas usage data in the rotor workshop, and full
use of the 12MWp distributed photovoltaic power generation project of the manufacturing base.
Reasons for not disclosing other environmental information
（I）Environmental protection
The company has adopted cleaner production management in an all-round way and started cleaner
production audit, which not only reduces consumption and efficiency, but also reduces the pressure and cost of
end treatment. The company's environmental management system has been operating for many years, and has
strictly abided by the provisions of relevant national laws and regulations and the principle of continuous
improvement. The company formulates annual environmental protection targets and environmental management
plans every year. During the reporting period, there was no environmental pollution accident or over-emission
incident.
The company also continues to promote the awareness of social responsibility in the process of product
design and process design, and embodies the concept of green environmental protection in the design process. The
product design process fully considers the possibility of environmental pollution and the impact on occupational
health, meets the international environmental protection requirements, reduces noise, reduces emissions, and uses
harmless materials and processes. For example, by taking measures such as sound insulation enclosure, the
running noise of steam turbine can meet the standard. Set up thermal insulation layer to reduce its thermal
radiation to a safe level. In all kinds of nonmetallic materials used in steam turbines, components harmful to
human body are eliminated.
(II) Energy conservation and emission reduction
In recent years, the company has attached great importance to energy conservation and emission reduction
according to the overall arrangement and requirements of its superiors. It has strengthened its leadership and
carefully deployed various work measures to further promote energy conservation and emission reduction at
various levels to ensure solid results in energy conservation and emission reduction.
II. Social responsibilities
With "driving industrial civilization and sustaining China's power" as its business mission, the company leads
the its reform and development with the development concept of "innovation, coordination, green, openness and
sharing". While standardized operation and operation according to law, it strives to shoulder due social
responsibilities and promote the harmonious development of the company, shareholders, investors, employees,
suppliers, customers, consumers and the whole society.
(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.
57
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(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
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 continued to support and carried out public welfare undertakings. During the reporting period,
it actively responded to the call of the Hangzhou Municipal Party Committee and the Municipal Government for
the "Spring Breeze Action", played a leading and exemplary role as a caring enterprise, and donated 500,000 yuan
to the "Spring Breeze Action".
III. Consolidate and expand the achievements of poverty alleviation and rural revitalization
The Company participated in the assistance activities of "Connecting Villages and Towns" in Hangzhou,
and from 2022 to 2025, it provided assistance activities to Zitong Town, Chun'an County with an annual fund of
RMB 150,000.
58
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
VI. Important Events
I. The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the
reporting period made by the company, shareholder, actual controller, acquirer, director, supervisor,
senior management personnel and other related parities.
Applicable □Not applicable
Time of
Period of
Commitmen Commitmen Commitmen making
Contents commitmen Fulfillment
t t maket t type commitmen
t
t
Hangzhou
Turbine Commitmen
Power t to the
Other
Group Co., transfer of
commitment
LTD., the target
s made to Normal
Hangzhou company's http://www.cninfo.com.cn(Announceme November
the minority performanc
Turbine accounts nt No.:2021-101 and 2021-102) 16,2021
shareholders e
Power receivable
of the
Technology recovery
company
Co., LTD., and other
and other matters
transferor
Note: Hangzhou Turbine Power Group Co., Ltd has been renamed as Hangzhou Steam Turbine Holdings Co., Ltd,
and Hangzhou Steam Turbine Power Technology Co., Ltd has been renamed as Hangzhou Guoyu Property
Management Co., Ltd.
II. Particulars about the non-operating occupation of funds by the controlling shareholder
□ Applicable √ Not applicable
III. Illegal provision of guarantees for external parties
□ Applicable √ Not applicable
No such cases in the reporting period.
IV. Explanation of the Board of Directors on the latest "Non-standard Audit Report"
□ Applicable √ Not applicable
V.Notes for “non-standard audit report” of CPAs firm during the Reporting Period by board of directors
and supervisory board
□ Applicable √ Not applicable
VI.Explain change of the accounting policy, accounting estimate and measurement methods as compared
with the financial reporting of last year.
□ Applicable √ Not applicable
No such cases in the reporting period.
VII.Explain change of the consolidation scope as compared with the financial reporting of last year.
√ Applicable □ Not applicable
(1) Disposal of subsidiaries
1. A single disposal of investment in a subsidiary namely loss of control
59
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Disposal price and disposal of
investment
Disposal The basis for
Subsidiary Way of
Price of disposal Equity Time point of determining the the difference in the
equity
name share ratio loss control time point of loss subsidiary's net asset share
disposal
（%） of control enjoyed by the corresponding
consolidated financial
statement
Industrial and
commercial
Indonesian Transfer of
6,120,000.00 70.00 2022.12.27 change 993,654.43[Note]
company Agreement
registration is
completed
（Continued）
Other comprehensive
The The carrying income related to the
The fair Method and key
proportion amount of former subsidiary’s
value of the Remeasure gains assumptions for
of equity the equity investments, and
determining the fair
Subsidiary remaining or losses from the amount by which
remaining remaining value of the
equity at the remaining equity changes in others’
name on the date equity on the remaining equity at
date of loss at fair value owned equity are
of loss of date of loss the date of loss of
transferred to
of control control
control of control investment gains or
losses
Indonesian
— — — — — -1,557,635.65[Note]
company
[Note] In November 2022, Zhongneng Company and PT.HANGZHOU TURBINE SERVICES signed the Equity
Transfer Agreement, in which transferred its 70% equity of the Indonesian company to PT.HANGZHOU
TURBINE SERVICES at a price of 6.12 million yuan. The equity transfer was obtained with a decree issued by
the Local Ministry of Justice and Human Rights in Indonesia on December 27, 2022. The net asset value of the
Indonesia Company as of December 31,2022 was 7,323,350.80 yuan, and the net assets of the Indonesian
company enjoyed by Zhongneng Company were 5,126,345.57 yuan according to the 70% shareholding ratio, and
the difference of 993,654.43 yuan to the disposal price of 6,120,000.00 yuan was recognized as investment
income; Meanwhile, other comprehensive income related to the equity investment of the Indonesian company-
changes in the translation difference in foreign currency financial statements was transferred to the profit or loss
of the current period when lost the control, and the investment income was recorded in the consolidated statement
of -1,557,635.65 yuan; the total investment income recognized was RMB 563,981.22.
(2) Changes in the scope of consolidation for other reasons
Lessened scope of consolidation
Net profit from the
Equity disposal Time of equity Net assets at the disposal beginning of the period
Company name to the date of disposal
method disposal date
Hangzhou Steam Turbine
Power Group Equipment
A/M 2022.12.26 10,076,214.15 1,001,509.06
Packaged Engineering
Co., Ltd[Note]
[Note] Due to the needs of business development, the new energy company and its former subsidiary,
Hangzhou Turbine Power Group Equipment Complete Engineering Co., Ltd, signed the "Merger Agreement" on
August 11, 2022, taking July 31, 2022 as the base date to absorb and merge Hangzhou Turbine Power Group
Equipment Complete Engineering Co., Ltd, and Hangzhou Turbine Power Group Equipment Complete
Engineering Co., Ltd cancelled its legal personality
VIII. Engagement/Disengagement of CPAs
CPAs currently engaged
Name of the domestic CPAs Pan-China Certified Public Accountants (Special common
60
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
partnership)
Remuneration for domestic accounting firm（In RMB
160
10,000）
Successive years of the domestic CPAs offering auditing
24
services
Names of the certified public accountants from the domestic
Sheng Weiming, Lin Qunhui
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 300,000 for its service.
IX.Situation of Facing Listing Suspension and Listing Termination after the Disclosure of the Yearly
Report
□Applicable √ Not applicable
X. Relevant Matters of Bankruptcy Reorganization
□Applicable √ Not applicable
No such cases in the reporting period.
XI. Matters of Important Lawsuit and Arbitration
□Applicable √ Not applicable
No such cases in the reporting period.
XII. Situation of Punishment and Rectification
□Applicable √ Not applicable
No such cases in the reporting period.
XIII. Credit Condition of the Company and its Controlling Shareholders and Actual Controllers
□Applicable √ Not applicable
XIV. Material related transactions
1. Related transactions in connection with daily operation
□Applicable √ Not applicable
No such cases in the reporting period.
2. Related-party transactions arising from asset acquisition or sale
□Applicable √ Not applicable
No such cases in the reporting period.
3. Related-party transitions with joint investments
□Applicable √ Not applicable
No such cases in the reporting period.
4. Credits and liabilities with related parties
√ Applicable □ Not applicable
61
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Whether there is any non-operating related creditor's rights and debts
√ Yes □ No
Creditor's rights receivable from related parties
Whether New Amount
there is any Opening amount in recovered in Current Ending
Related Related occupation balance current the current interest balance
Cause Interest rate
party association of non- (RMB period period (RMB (RMB
operating '0,000) (RMB (RMB '0,000) '0,000)
funds '0,000) '0,000)
Debt payable to related parties
New Repayment
Opening amount in amount in Current Ending
Related Related balance current current interest balance
Cause Interest rate
party association (RMB period period (RMB (RMB
'0,000) (RMB (RMB '0,000) '0,000)
'0,000) '0,000)
Steam
Holding Borrowing
Turbine 24,000 542.57 24,542.57 3.85% 542.57 0
shareholder funds
Holdings
Influence of related debt
Due to the needs of production and operation, Hangzhou Steam Turbine Engineering Co., Ltd. (now
on the Company's
renamed as New Energy Company) began to borrow funds from Hangzhou Steam Turbine Group in
operating results and
2016. The debt has no significant impact on the company's operating results and financial status.
financial status
5. Transactions with related finance company, especially one that is controlled by the Company
□Applicable √ Not applicable
No such cases in the reporting period.
6. Transactions between the financial company controlled by the Company and related parties
□ Applicable √Not applicable
There is no deposit, loan, credit or other financial business between the financial company controlled by the
Company and related parties.
7. Other significant related-party transactions
□Applicable√Not applicable
No such cases in the reporting period.
XV.Significant contracts and execution
1.Entrustments, contracting and leasing
（1）Entrustment
□Applicable √ Not applicable
No such cases in the reporting period.
（2）Contracting
□Applicable √ Not applicable
No such cases in the reporting period.
62
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
（3）Leasing
□Applicable √ Not applicable
No such cases in the reporting period.
2.Significant Guarantees
√ Applicable □ Not applicable
In RMB10,000
Outward guarantees offered by the Company and its subsidiaries (Excluding guarantee to the subsidiaries）
Relevan
t Guarant
Date of
disclosu Counte ee
happeni
Name of re Amount Guaran r- Complete for
ng Actual
date/No. of Guarant guarant Guarant implementat associat
the of Guarant
(Date of mount of
ee type
ty（If
ee term ion ed
Company signing guarantee any） ee（If
the ee or not parties
agreeme any）
guarante (Yes or
nt)
ed no)
amount
Guarantee of the company for its subsidiaries
Relevan
t Guarant
Date of
disclosu Counte ee
happeni
Name of re Amount Guaran r- Complete for
ng Actual
date/No. of Guarant guarant Guarant implementat associat
the of Guarant
(Date of mount of
ee type
ty（If
ee term ion ed
Company signing guarantee any） ee（If
the ee or not parties
agreeme any）
guarante (Yes or
nt)
ed no)
amount
Three
years
from
The
Hangzhou the date
Xhongnen joint
January August 20,543.9816, of
g New 30,000 liability No No
26,2022 14,2021 800 expirati
Energy guarant
Co., Ltd. on of
y
the
principa
l debt
Three
years
from
The
Hangzho the date
u Steam Novemb joint
October of
Turbine 5,000 er 3,000 liability No No
28,2022 expirati
Casting 15,2022 guarant
Co., Ltd. on of
y
the
principa
l debt
Hangzhou The Two
Steam Novemb
October joint years
Turbin er 16,800 16,800 No No
31,2021 liability from
Power 4,2021
Co., Ltd. guarant the date
63
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
y of
expirati
on of
the
principa
l debt
Total of guarantee for Total of actual guarantee
subsidiaries approved 35,000 for subsidiaries in the 40,343.98
in the period(B1) period (B2)
Total of guarantee for Total of actual guarantee
subsidiaries approved 51,800 for subsidiaries at 40,343.98
at period-end(B3) period-end(B4)
Guarantee of the subsidiaries for the controlling subsidiaries
Relevan
t Guarant
Date of
disclosu Counte ee
happeni
Name of re Amount Guaran r- Complete for
ng Actual
date/No. of Guarant guarant Guarant implementat associat
the of Guarant
(Date of mount of
ee type
ty（If
ee term ion ed
Company signing guarantee any） ee（If
the ee or not parties
agreeme any）
guarante (Yes or
nt)
ed no)
amount
Two
Hangzho years
u The from
Guoneng joint the date
Steam July July of
7,000 4,837.87 liability No No
Turbine 20,2021 20,2021 expirati
Engineeri guarant on of
ng Co., y the
Ltd. principa
l debt
Two
Hangzho years
u The from
Guoneng joint the date
Steam July July of
5,000 2,264.55 liability No No
Turbine 20,2021 20,2021 expirati
Engineeri guarant on of
ng Co., y the
Ltd. principa
l debt
Two
Hangzho years
u The from
Guoneng joint the date
Steam July July of
5,000 4,238.94 liability No No
Turbine 20,2021 20,2021 expirati
Engineeri guarant on of
ng Co., y the
Ltd. principa
l debt
Hangzhou The Two
Zhongneng years
October joint
Steam 8,000 5,441.7 from No No
14,2022 liability
Turbine the date
Power Co., guarant of
64
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Ltd. y expirati
on of
the
principa
l debt
Two
years
Hangzhou The from
Zhongneng joint the date
Novemb
Steam of
4,000 er 1200 liability No No
Turbine expirati
3,2022 guarant
Power Co., on of
Ltd. y the
principa
l debt
Total amount of
Total guarantee quota
guarantee to the
to the subsidiaries
12,000 subsidiaries actually 17,983.06
approved in the
incurred in the reporting
reporting period (C1)
period (C2)
Total guarantee quota
Total balance of actual
to the subsidiaries
guarantee to the
approved at the end of 29,000 17,983.06
subsidiaries at the end of
the reporting period
the reporting period (C4)
(C3)
Total of Company’s guarantee（namely total of the large three aforementioned）
Total of guarantee in Total of actual guarantee
the Period 47,000 in the Period 58,327.04
（A1+B1+C1） （A2+B2+C2）
Total of guarantee at Total of actual guarantee
Period-end 80,800 at Period-end 58,327.04
（A3+B3+C3） A4+B4+C4）
The proportion of the total amount of actually
guarantee in the net assets of the Company(that is 7.00%
A4+B4+C4)
Including
Amount of guarantee for shareholders, actual
0
controller and its associated parties（D）
The debts guarantee amount provided for the
Guaranteed parties whose assets-liability ratio exceed 23,441.70
70% directly or indirectly（E）
Proportion of total amount of guarantee in net assets
0
of the company exceed 50%（F）
Total guarantee Amount of the abovementioned
23,441.70
guarantees（D+E+F）
Explanations on possibly bearing joint and several
liquidating responsibilities for undue guarantees ( If 0
any)
Explanations on external guarantee against regulated
0
procedures(If any)
Description of the guarantee with complex method
3.Situation of Entrusting Others for Managing Spot Asset
(1)Situation of Entrusted Finance
65
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
√ Applicable □Not applicable
Overview of entrusted wealth-management during the reporting period
In RMB 10,000
Source of funds The Occurred
for entrusted Amount of Un-recovered of
Specific type Undue balance Amount overdue
financial Entrusted Wealth- overdue amount
management management
Bank financing
Self funds 103,000 60,500.24 0 0
product
Total 103,000 60,500.24 0 0
66
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
The detailed information of entrusted wealth-management with significant amount or low safety, poor liquidity or high risk with no promise of principal
Applicable □Not applicable
In RMB
Summ
Amount ary of
Whethe
of reserve Wheth the
Anticipat r
Trustee Referen Actual for er has items
Criteria ed Actual approve
instituti Trust Sourc Capital ce collected devaluatio entrust and
Product Amou Start Expiry for income gains/loss d by
on (or ee e of investmen annual gains/loss n of financ related
type nt date date fixing (if es in legal
name of type funds t purpose rate of es in withdrawi e plan query
reward applicabl period procedu
trustee) return period ng (if in the index
e) re
applicable future (if
(Y/N)
) applic
able)
Bank money
August Decemb
Hangzh financin Self market Floating
Bank 7,000 31,202 er 1.48% 31.94 31.93 31.93 Yes No
ou Bank g funds instrumen income
2 20,2022
product t
Total 7,000 -- -- -- -- -- -- 31.94 31.93 -- -- -- --
Entrusted financing appears to be unable to recover the principal or there may be other circumstances that may result in impairment
□ Applicable √ Not applicable
(2)Situation of Entrusted Loans
□ Applicable √ Not applicable
None
4. Other significant contract
□ Applicable √ Not applicable
None
67
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
XVI. Explanation on other significant events
√ Applicable □Not applicable
1. For increasing the capital to the new energy company, please refer to the announcement (Announcement
number: 2022-11) published by the Company on the Cninfo Information Network (http://www.cninfo.com.cn) on
March 23, 2022.
2. Changed the Company's address and amended the Company's articles of association.
please refer to the announcement (Announcement number: 2022-35) published by the Company on the Cninfo
Information Network (http://www.cninfo.com.cn) on March 31, 2022.
3. Changed the company name and the registered capital and amended the Articles of Association. please refer to
the announcement (Announcement number: 2022-61) published by the Company on the Cninfo Information
Network (http://www.cninfo.com.cn) on July 2, 2022.
4. Invested in the construction of a project with an annual output of 10 sets of gas turbine units. please refer to the
announcement (Announcement number: 2022-90) published by the Company on the Cninfo Information Network
(http://www.cninfo.com.cn) on December 22, 2022.
5. Increased capital to Ranchuang Company. please refer to the announcement (Announcement number: 2023-02)
published by the Company on the Cninfo Information Network (http://www.cninfo.com.cn) on January 17, 2022.
XVII. Significant event of subsidiary of the Company
√ Applicable □Not applicable
√ Applicable □Not applicable
1. Zhongneng Company increased capital and shares. please refer to the announcement (Announcement number:
2022-10) published by the Company on the Cninfo Information Network (http://www.cninfo.com.cn) on March
23, 2022.
2. Steam Turbine New Energy Company increased the capital of its wholly-owned subsidiary by way of Debt for
Equity Swap. please refer to the announcement (Announcement number: 2022-62) published by the Company on
the Cninfo Information Network (http://www.cninfo.com.cn) on July 2, 2022.
3. Ranchuang invested in Western Power. please refer to the announcement (Announcement number: 2023-02)
published by the Company on the Cninfo Information Network (http://www.cninfo.com.cn) on Jnuary 17, 2023.
68
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
VII. Change of share capital and shareholding of Principal Shareholders
1.Changes in share capital
1.Changes in share capital
In shares
Before the change Increase/decrease（+，-） After the Change
Amount Proportion Capitalization of
Share Bonus
common reserve Other Subtotal Quantity Proportion
allotment shares
fund
I. Unlisted
479,824,800 63.64% 0 143,947,440 0 0 143,947,440 623,772,240 63.64%
shares
1. Founder's
479,824,800 63.64% 0 143,947,440 0 0 143,947,440 623,772,240 63.64%
stock
Including：
State-owned 479,824,800 63.64% 0 143,947,440 0 0 143,947,440 623,772,240 63.64%
shares
II.Non-
restricted 274,185,600 36.36% 0 82,222,140 0 0 82,222,140 356,407,740 36.36%
shares
2. Overseas
listed
274,185,600 36.36% 0 82,222,140 0 0 82,222,140 356,407,740 36.36%
foreign
shares
III. Total of
capital 754,010,400 100.00% 0 226,169,580 0 0 226,169,580 980,179,980 100.00%
shares
Causes of Change of shares
√ Applicable □Not applicable
The Company's share changes during the reporting period were caused by the implementation of the 2021 profit
distribution plan. The Company's 2021 profit distribution plan was to distribute a cash dividend of 4.0 yuan (tax
included) and 3 bonus shares (tax included) for every 10 shares and no shared converted by reserveto all
shareholders based on the total share capital of 754,010,400 shares at the end of 2021 after excluding the
Company's repurchased 111,800 treasury shares on the equity distribution record date-that was 753,898,600
shares.
Approval of change of the shares
√ Applicable □Not applicable
The Company's 2021 profit distribution plan had been reviewed and approved at the 2021 annual general meeting
held on April 27, 2022.
Ownership transfer of share changes
√ Applicable □Not applicable
69
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
The Company completed the 2021 profit distribution on May 26, 2022. Before the dividend distribution, the
Company's total share capital was 754,010,400 shares. After the distribution, the total share capital was increased
to 980,179,980 shares.
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to
common shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose for the company or need to disclosed under requirement from security
regulators
□ Applicable √ Not applicable
2. Change of shares with limited sales condition
√ Applicable □Not applicable
In RMB
Number of
Number of Restricted
Initial Increased Reason for
Shareholder Unrestricted Shares in the
Restricted Restricted Restricted Date of Restriction Removal
Name Shares This End of the
Shares Shares Shares
Term Term
This Term
Equity
The limitations are lifted according to the
incentive
Zheng Bin 250,000 75,000 0 325,000 relevant provisions of the 2021 restricted
restricted
stock incentive plan
stocks
Equity
The limitations are lifted according to the
incentive
Ye Zhong 250,000 75,000 0 325,000 relevant provisions of the 2021 restricted
restricted
stock incentive plan
stocks
Equity
The limitations are lifted according to the
Yang incentive
200,000 60,000 0 260,000 relevant provisions of the 2021 restricted
Yongming restricted
stock incentive plan
stocks
Equity
The limitations are lifted according to the
incentive
Wang Gang 200,000 60,000 0 260,000 relevant provisions of the 2021 restricted
restricted
stock incentive plan
stocks
Equity
The limitations are lifted according to the
Kong incentive
200,000 60,000 0 260,000 relevant provisions of the 2021 restricted
Jianqiang restricted
stock incentive plan
stocks
Equity
The limitations are lifted according to the
Wang incentive
200,000 60,000 0 260,000 relevant provisions of the 2021 restricted
Zhengrong restricted
stock incentive plan
stocks
Equity
The limitations are lifted according to the
Zhao incentive
200,000 60,000 0 260,000 relevant provisions of the 2021 restricted
Jiamao restricted
stock incentive plan
stocks
Equity
The limitations are lifted according to the
incentive
Li Guiwen 200,000 60,000 0 260,000 relevant provisions of the 2021 restricted
restricted
stock incentive plan
stocks
Equity
The limitations are lifted according to the
incentive
Li Shijie 0 260,000 0 260,000 relevant provisions of the 2021 restricted
restricted
stock incentive plan
stocks
Equity The limitations are lifted according to the
Cai Weijun 200,000 60,000 0 260,000
incentive relevant provisions of the 2021 restricted
70
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
restricted stock incentive plan
stocks
Equity
The limitations are lifted according to the
incentive
Other 16,268,059 6,349,418 0 22,617,477 relevant provisions of the 2021 restricted
restricted
stock incentive plan
stocks
Total 18,168,059 7,179,418 0 25,347,477 -- --
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
The total num Total preference
shareholder ber of preferre shareholders with
Total number of s at the end d shareholders voting rights
common of the voting recovered at end
shareholders at the end 11,261 month from 11,171 rights restored 0 of last month 0
the date of at period-end before annual
of the reporting period
disclosing (if any)(Note report disclosed(if
the annual 8) any)(Note8)
report
Particulars about shares held above 5% by shareholders or top ten shareholders
Number of
share
Proporti
pledged/froz
on of Number of Changes in Amount of Amount of
Nature of en
Shareholders shares shares held at reporting restricted un-restricted
shareholder held Stat
period -end period shares held shares held
e of Am
（%）
shar ount
e
Hangzhou Steam Turbine State-owned
63.64% 623,772,240 143947440 623,772,240 0
Holdings Co., Ltd. legal person
China Merchants Foreign
0.71% 6,966,378 1375901 0 6,966,378
Secutities(HK)Co., Ltd. legal person
GUOTAI JUNAN
Foreign
SECURITIES（HONG 0.67% 6,547,507 -1129918 0 6,547,507
legal person
KONG） LIMITED
Domestic
Zhou Jie Natural 0.64% 6,302,300 1679600 0 6,302,300
person
VANGUARD TOTAL Foreign 0.56% 5,482,009 1047556 0 5,482,009
71
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
INTERNATIONAL STOCK legal person
INDEX FUND
ISHARES CORE MSCI Foreign
0.54% 5,301,262 1402999 0 5,301,262
EMERGING MARKETS ETF legal person
VANGUARD EMERGING
Foreign
MARKETS STOCK INDEX 0.52% 5,096,887 814805 0 5,096,887
legal person
FUND
Foreign
NORGES BANK 0.33% 3,268,888 754359 0 3,268,888
legal person
Domestic
Xia Zulin Natural 0.32% 3,170,000 850000 0 3,170,000
person
Domestic
Gu Yang Natural 0.21% 2,038,821 470497 0 2,038,821
person
Particulars about strategic investors or general
corporations becoming among the top 10 Not applicable
shareholders due to share placing
(1) Hangzhou Steam Turbine Power Group Co., Ltd. is the holder of state-shares of the
Company, all other shareholders’ are holders of domestic listed foreign shares (B shares)
(2) There is no relationship between Hangzhou Steam Turbine Power Group Co., Ltd. and
Explanation on associated relationship among other shareholders;
the aforesaid shareholders (3) Hangzhou Steam Turbine Power Group Co., Ltd. is not an “action-in-concert” party
with any of other shareholders as described by the “Administration Rules of Informational
Disclosure about Change of Shareholding Statues of PLCs”.
Above shareholders entrusting or entrusted with
Not applicable
voting rights, or waiving voting rights
Top 10 shareholders including the special
Not applicable
account for repurchase (if any) (see note 10)
Top 10 holders of shares without trading limited conditions
Amount of Category of shares
Name of the shareholder unconditional shares
held at end of period Category Amount
Foreign shares
China Merchants Secutities(HK)Co., Ltd. 6,966,378 placed in domestic 6,966,378
exchange
Foreign shares
GUOTAI JUNAN SECURITIES（HONG KONG） LIMITED 6,547,507 placed in domestic 6,547,507
exchange
Foreign shares
Zhou Jie 6,302,300 placed in domestic 6,302,300
exchange
Foreign shares
VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND 5,482,009 placed in domestic 5,482,009
exchange
Foreign shares
ISHARES CORE MSCI EMERGING MARKETS ETF 5,301,262 placed in domestic 5,301,262
exchange
Foreign shares
VANGUARD EMERGING MARKETS STOCK INDEX FUND 5,096,887 placed in domestic 5,096,887
exchange
Foreign shares
NORGES BANK 3,268,888 3,268,888
placed in domestic
72
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
exchange
Foreign shares
Xia Zulin 3,170,000 placed in domestic 3,170,000
exchange
Foreign shares
Gu Yang 2,038,821 placed in domestic 2,038,821
exchange
Foreign shares
Wang Yihu 2,001,956 placed in domestic 2,001,956
exchange
1）It is unknown to the Company if there is any relationship
among the top 10 common share holders without restriction;
Explanation on associated relationship or consistent action among the top
(2) Hangzhou Steam Turbine Group Co., Ltd. is not an action-in-
10 shareholders of non-restricted negotiable shares and that between the
concert” party with any of other shareholders as described by the
top 10 shareholders of non-restricted negotiable shares and top 10
“Administration Rules of Informational Disclosure about Change
shareholders
of Shareholding Statues of PLCs”.
Notes to the shareholders involved in financing securities (if any)(See
Not applicable
Notes 4)
Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-
back agreement dealing in reporting period.
□ Yes √ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company
have no buy –back agreement dealing in reporting period.
2.Controlling shareholder
Nature of Controlling Shareholders: Local state holding
Type: Legal person
Name of the
Legal Incorporated
holding Organization code Registered capital
representative in
shareholder
Manufacturing and processing: textile machinery,
Manufacturing machines,paper-making machinery,
pump, casting products, electrical tools, gear box,
thermal transmitter, digital controlling device, and spare
parts of the above (limited to the subsidiaries);
Hangzhou Contracting of domestic and overseas machinery
Steam Turbine December
Pan Xiaohui 91330100143071842L engineering projects, export of above equipments and
Holdings Co., 14,1992
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
73
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
parts to members of the Group, water and power supply
(other than installation and maintaining of power
supply equipment); Including the business scope of
subsidiaries.
Shareholding status of the holding
shareholder in other PLCs in the
None
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 Principal business
Legal representative Date of incorporation Organization code
controller activities
State-owned Assets
Supervision and
Administration
Wang Xi 113301007766375272 Not applicable
Commission of
Hangzhou Municipal
Government
The equity of the
controlling shareholder Hangzhou Jiebai (SH.600814) held 59.64% shares;
in other domestic and Digital Source Technology Co., Ltd.（SZ.000909）held 39.16% shares;
foreign listed
companies held or Hangyang Co., Ltd.(SZ.002430)held 48.96% shares.
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
74
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
The actual controller controls the company by means of trust or managing the assets in other way
□ Applicable √ Not applicable
4.The cumulative number of shares pledged by the controlling shareholder or the largest shareholder of the
company and its person acting in concert accounts for 80% of the number of shares held by the company
□Applicable √Not applicable
5.Particulars about other legal person shareholders with over 10% share held
□Applicable √Not applicable
6.Situation of Share Limitation Reduction of Controlling Shareholders, Actual Controllers, Restructuring Party
and Other Commitment Subjects
□Applicable √Not applicable
IV. Specific implementation of share repurchase during the reporting period
Progress in implementation of share repurchase
□ Applicable √Not applicable
Implementation progress of reducing repurchased shares by centralized bidding
□ Applicable √Not applicable
75
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
VIII. Situation of the Preferred Shares
□Applicable √Not applicable
The Company had no preferred shares in the reporting period.
76
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
IX. Corporate Bond
□ Applicable √ Not applicable
77
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
X.Financial Report
I. Auditors' Report
Type of auditing opinion Standard report without qualified opinion
Date of signature of audit report March 27, 2023
Pan-China Certified Public Accountants (Special common
Name of the CPA
partnership)
Reference number of audit Report Tianjianshen(2023)No.:1178
Name of the certified Public Accountants Sheng Weiming, Lin Qunhui
Auditors’ Report
To the entire shareholders of Hangzhou Steam Turbine Power Group 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, 2022, 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, 2022 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.
(I) Recognition of income
1.Description of the matter
For details of the relevant information disclosure, please refer to Note xI (39) and Note X ,VII (61) in the
financial statements.
The operating income of Hangzhou Steam Turbine Co., Ltd. mainly comes from the R&D, production and
sales of industrial steam turbines and other products. In 2022, the amount of operating income items shown in the
consolidated financial statements of Hangzhou Steam Turbine Co., Ltd. was RMB 5,518.8419 million, of which
the operating income of industrial steam turbine sales business was RMB 4,569.1449 million, accounting for
82.79% of the operating income.
As operating income is one of the key performance indicators of Hangzhou Steam Turbine Co., Ltd., there
may be inherent risks that the management of Hangzhou Steam Turbine Co., Ltd. (hereinafter referred to as
management) can achieve specific goals or expectations through improper income recognition. Therefore, we
78
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
have identified revenue recognition as a key audit matter.
2. Audit Countermeasures
For revenue recognition, the audit procedures we have implemented mainly include:
(1) Understand key internal controls related to revenue recognition, evaluate the design of these controls,
determine whether they are implemented, and test the operational effectiveness of relevant internal controls;
(2) Check the sales contract, understand the main contract terms or conditions, and evaluate whether the
revenue recognition method is appropriate;
(3) Implementing substantive analysis procedures for operating income and gross profit margin according to
products and customers to identify whether there are material or abnormal fluctuations, and to identify the causes
of such fluctuations;
(4) For domestic sales income, by sampling method check the supporting documents related to revenue
recognition, including sales contracts, sales invoices, shipment bills and receipts; for export income, by sampling
method check the supporting documents including sales contracts, export declarations, freight bills of lading and
sales invoices;
(5) In conjunction with the letter confirmation of accounts receivable, the sales amount of the current period
for major customers are letter confirmed by sampling method;
(6) Implement a cut-off test on the operating income recognized before and after the balance sheet date, and
evaluate whether the operating income is recognized within an appropriate period;
(7) Obtain the sales return record after the balance sheet date, and check whether there is any situation that
the income recognition conditions are not met on the balance sheet date;
(8) Check that the information related to the operating income whether has been properly presented and
disclosed in the financial statements.
(II) Impairment of accounts receivable
1. Description of the matter
For related information disclosure, please refer to Note X,V (10) and Note x (7) of the financial statements.
As of December 31, 2022, the book balance of accounts receivable items shown in the consolidated financial
statements of Hangzhou Steam Turbine Co., Ltd. was RMB 2,914.6332 million, the bad debt provision was RMB
989.9538 million, and the book value was RMB 1,924.6794 million.
According to the credit risk characteristics of each account receivable, the management measures its loss
reserves on the basis of individual accounts receivable or a combination of accounts receivable and according to
the expected credit loss amount equivalent to the whole duration. For accounts receivable that measure expected
credit losses on a single basis, the management comprehensively considers reasonable and reliable information
about past events, current status and future economic status forecasts, estimates the expected cash flow, and
determines the provision for bad debts to be accrued accordingly; For accounts receivable whose expected credit
losses are measured on the basis of combination, the management divides the combination based on aging, refers
to historical credit loss experience, and adjusts it according to forward-looking estimation, and compiles a
comparison table between the aging of accounts receivable and loss given default, thereby determining the bad
debt reserves to be accrued.
Due to the significant amount of accounts receivable and the impairment test of accounts receivable
involving significant management judgment, we determine the impairment of accounts receivable as a key audit
matter.
2. Audit Countermeasures
For the impairment of accounts receivable, the audit procedures we have implemented mainly include:
(1) Understand the key internal controls related to the impairment of accounts receivable, evaluate the design
of these controls, determine whether they have been implemented, and test the operational effectiveness of the
relevant internal controls;
(2) Review the subsequent actual write-off or reversal of accounts receivable with provision for bad debts in
previous years, and evaluate the accuracy of the management's past forecasts;
(3) Review the management's relevant considerations and the objective evidence for the impairment test of
the accounts receivable, and evaluate whether the management fully recognizes the accounts receivable that have
been impaired;
(4) For accounts receivable that are individually tested for impairment, obtain and examine the management's
forecast on the present value of future cash flows, evaluate the rationality of the key assumptions and the accuracy
of the data used in the forecast, and verify with the external evidence obtained;
(5) For the accounts receivable that are tested for impairment using the combination method, evaluate the
79
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
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 Notex,vI (15) and Note x,vii (9) 8 of the
financial statements.
As of December 31, 2022, the book balance of the inventory items shown in the consolidated financial
statements of Hangzhou Steam Turbine Co., Ltd. was RMB 2,616.8032 million, the provision for price falling was
RMB 294.3419 million, and the book value was RMB2,322.4613 million.
On the balance sheet date, the inventories are measured at the lower of the cost and net realizable value, and
the provision for inventory falling price is made based on the difference that the cost of a single inventory
exceeding the net realizable value. On the basis of considering the purpose of holding the inventory, the
management determines the estimated selling price according to the contract price, the market price of the same or
similar products, the advance receipt, the estimated disposal income, etc., and determines the net realizable value
of the inventory by the estimated sales price subtracting the estimated occurrence cost will be happened at the
time of completion and subtracting the estimated sales expenses and related taxes and fees
Due to the significant amount of inventories and the determination of the net realizable value of inventories
involving significant management judgment, we determine the net realizable value of inventories as a key audit
item.
2. Audit Countermeasures
For the net realizable value of inventories, the audit procedures we have implemented mainly include:
(1) Understand the key internal controls related to the net realizable value of inventory, evaluate the design of
these controls, determine whether they have been implemented, and test the operational effectiveness of the
relevant internal controls;
(2) Review management's forecast of the net realizable value of inventory and the actual operating results in
previous years, and evaluate the accuracy of management's past forecasts;
(3) by sampling method review the management's forecast of the estimated selling price of the inventory, and
compare the estimated selling price with the post-event situation, the contracted selling price, the advance receipt,
and the valuation value;
(4) evaluate the management's reasonableness for the estimation on the costs, sales expenses and related
taxes and fees that will occur from the inventory to its completion sales;
(5) test the accuracy of the management's calculation on the net realizable value of inventory;
(6) In combination with the inventory monitoring, check whether the ending inventory has long storage age,
obsolete models, project suspension or termination situation, and evaluate whether the management has
reasonably estimated the net realizable value;
(7) Check whether the information related to the net realizable value of the inventory has been properly
presented and disclosed in the financial statements.
IV. Other information
The management of the Company is responsible for the other information. The other information comprises
information of the Company's annual report, but excludes the financial statements and our auditor's report.
Our opinion on the financial statements does not cover the other information and we do not and will not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the
financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
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.
(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
81
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
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.
March 27, 2023
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
II. The Financial Statements
Statement in Financial Notes are carried in RMB
1. Consolidated Balance Sheet
Prepared by: Hangzhou Steam Turbine Power Group Co., Ltd
December 31,2022
In RMB
Items December 31,2022 January 1, 2022
Current asset：
Monetary fund 1,954,980,787.90 1,622,883,247.79
Settlement provision
Outgoing call loan
Transactional financial assets 607,001,143.44 960,645,259.82
Derivative financial assets
Notes receivable 95,612,927.26 215,046,941.09
Account receivable 1,924,679,367.08 1,997,950,120.70
Financing of receivables 817,555,768.45 816,653,211.21
Prepayments 401,523,615.49 443,770,434.91
Insurance receivable
Reinsurance receivable
Provisions of Reinsurance contracts receivable
Other account receivable 25,366,963.26 44,163,396.56
Including：Interest receivable
Dividend receivable
Repurchasing of financial assets
Inventories 2,322,461,286.52 3,041,643,747.35
Contract assets 587,719,735.46 583,026,649.99
Assets held for sales
Non-current asset due within 1 year
Other current asset 78,949,731.48 66,174,951.42
Total of current assets 8,815,851,326.34 9,791,957,960.84
Non-current assets：
Non-current assets：
Loans and payment on other’s behalf disbursed
Creditor's right investment
Long-term receivable 77,541,093.03 153,741,093.20
Long term share equity investment
Other equity instruments investment 3,556,127,694.48 3,485,440,140.92
Other non-current financial assets 5,534,773.22 14,792,533.96
Property investment 6,451,478.55 6,903,986.07
Fixed assets 1,926,594,610.89 1,658,423,191.83
Construction in progress 286,290,854.97 517,835,956.11
Production physical assets
Oil & gas assets
Use right assets 28,105,943.29 30,437,778.92
Intangible assets 274,844,788.47 277,469,707.24
Development expenses
Goodwill
Long-germ expenses to be amortized
Deferred income tax asset 352,734,092.61 382,665,279.67
Other non-current asset 44,922,954.47
Total of non-current assets 6,559,148,283.98 6,527,709,667.92
Total of assets 15,374,999,610.32 16,319,667,628.76
Current liabilities
Short-term loans 287,753,227.89 250,065,920.45
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Loan from Central Bank
Borrowing funds
Transactional financial liabilities
Derivative financial liabilities
Notes payable 411,886,347.73 309,404,319.27
Account payable 1,202,915,727.29 1,910,150,188.14
Advance receipts 230,204.48 812,701.37
Contract liabilities 2,306,912,441.68 3,052,515,293.06
Selling of repurchased financial assets
Deposit taking and interbank deposit
Entrusted trading of securities
Entrusted selling of securities
Employees’ wage payable 139,014,673.58 133,122,509.92
Tax payable 73,385,124.09 81,622,378.10
Other account payable 203,788,336.85 434,578,338.13
Including：Interest payable
Dividend payable 90,000.00
Fees and commissions payable
Reinsurance fee payable
Liabilities held for sales
Non-current liability due within 1 year 42,802,886.86 17,607,722.97
Other current liability 267,585,963.69 395,640,629.47
Total of current liability 4,936,274,934.14 6,585,520,000.88
Non-current liabilities：
Reserve fund for insurance contracts
Long-term loan 159,903,673.86 180,830,007.55
Bond payable
Including：preferred stock
Sustainable debt
Lease liability 16,334,023.10 22,575,754.77
Long-term payable 11,104,088.21 7,579,677.56
Long-term remuneration payable to staff
Expected liabilities
Deferred income 877,381,129.85 729,438,751.74
Deferred income tax liability 474,809,014.19 464,172,915.14
Other non-current liabilities
Total non-current liabilities 1,539,531,929.21 1,404,597,106.76
Total of liability 6,475,806,863.35 7,990,117,107.64
Owners’ equity
Share capital 980,179,980.00 754,010,400.00
Other equity instruments
Including：preferred stock
Sustainable debt
Capital reserves 394,935,862.00 282,946,030.50
Less：Shares in stock 136,466,388.09 144,078,948.09
Other comprehensive income 2,690,397,606.30 2,629,477,756.99
Special reserve 17,841,325.92 18,369,033.52
Surplus reserves 625,178,089.82 625,178,089.82
Common risk provision
Retained profit 3,756,414,638.24 3,761,583,410.91
Total of owner’s equity belong to the parent company 8,328,481,114.19 7,927,485,773.65
Minority shareholders’ equity 570,711,632.78 402,064,747.47
Total of owners’ equity 8,899,192,746.97 8,329,550,521.12
Total of liabilities and owners’ equity 15,374,999,610.32 16,319,667,628.76
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin Can
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
2.Parent Company Balance Sheet
I RMB
Items December 31,2022 January 1, 2022
Current asset：
Monetary fund 1,074,031,333.05 911,448,637.39
Transactional financial assets 381,998,737.18 870,645,259.82
Derivative financial assets
Notes receivable 34,407,856.32 6,961,501.77
Account receivable 1,438,060,860.05 1,580,364,876.72
Financing of receivables 456,488,422.29 521,567,126.16
Prepayments 316,162,169.59 362,130,094.32
Other account receivable 8,397,079.99 27,054,816.71
Including：Interest receivable
Dividend receivable 110,000.00
Inventories 1,258,239,826.08 1,972,162,485.26
Contract assets 358,622,953.48 336,771,206.36
Assets held for sales
Non-current asset due within 1 year
Other current asset 66,426,019.02 54,571,853.02
Total of current assets 5,392,835,257.05 6,643,677,857.53
Non-current assets：
Creditor's right investment
Other investment on bonds
Long-term receivable
Long term share equity investment 400,480,973.25 191,793,655.63
Other equity instruments investment 3,556,127,694.48 3,485,440,140.92
Other non-current financial assets 5,534,773.22 14,654,773.22
Property investment
Fixed assets 1,474,208,708.15 1,216,961,095.52
Construction in progress 283,786,818.95 510,746,977.12
Production physical assets
Oil & gas assets
Use right assets 2,717,667.45 5,718,846.89
Intangible assets 188,674,302.83 194,828,927.84
Development expenses
Goodwill
Long-germ expenses to be amortized
Deferred income tax asset 297,762,053.26 317,178,990.36
Other non-current asset 30,999,462.87
Total of non-current assets 6,240,292,454.46 5,937,323,407.50
Total of assets 11,633,127,711.51 12,581,001,265.03
Current liabilities
Short-term loans 200,169,863.01 150,136,986.30
Transactional financial liabilities
Derivative financial liabilities
Notes payable 5,900,000.00
Account payable 740,412,296.58 1,225,766,343.67
Advance receipts
Contract Liabilities 1,332,554,908.08 2,144,268,617.09
Employees’ wage payable 82,125,367.12 76,018,039.12
Tax payable 17,200,998.61 11,130,803.71
Other account payable 184,847,189.08 177,365,722.18
Including：Interest payable
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Dividend payable
Liabilities held for sales
Non-current liability due within 1 year 1,503,579.95 4,612,006.37
Other current liability 140,853,281.80 276,610,651.60
Total of current liability 2,705,567,484.23 4,065,909,170.04
Non-current liabilities：
Long-term loan
Bond payable
Including：preferred stock
Sustainable debt
Lease liability 1,575,000.00 2,799,027.12
Long-term payable 5,852,616.69 2,785,102.53
Long-term remuneration payable to staff
Expected liabilities
Deferred income 741,999,661.14 582,083,796.03
Deferred income tax liability 474,809,014.19 464,172,915.14
Other non-current liabilities
Total non-current liabilities 1,224,236,292.02 1,051,840,840.82
Total of liability 3,929,803,776.25 5,117,750,010.86
Owners’ equity
Share capital 980,179,980.00 754,010,400.00
Other equity instruments
Including：preferred stock
Sustainable debt
Capital reserves 175,558,788.66 121,457,098.65
Less：Shares in stock 136,466,388.09 144,078,948.09
Other comprehensive income 2,690,397,606.30 2,630,313,185.77
Special reserve 6,000,000.00 6,000,000.00
Surplus reserves 602,356,402.65 602,356,402.65
Retained profit 3,385,297,545.74 3,493,193,115.19
Total of owners’ equity 7,703,323,935.26 7,463,251,254.17
Total of liabilities and owners’ equity 11,633,127,711.51 12,581,001,265.03
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin
Can
3.Consolidated Income statement
In RMB
Items Year 2022 Year 2021
I. Income from the key business 5,788,288,588.91
5,518,841,939.82
Incl：Business income 5,788,288,588.91
5,518,841,939.82
Interest income
Insurance fee earned
Fee and commission received
II. Total business cost 5,360,902,963.39
5,133,169,840.46
Incl：Business cost 4,091,955,492.69
4,027,414,803.26
Interest expense
Fee and commission paid
Insurance discharge payment
Net claim amount paid
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Net amount of withdrawal of insurance contract reserve
Insurance policy dividend paid
Reinsurance expenses
Business tax and surcharge 45,829,030.25
38,383,758.77
Sales expense 221,489,523.60 202,868,557.82
Administrative expense 660,284,323.30
590,938,269.71
R & D costs 350,216,635.11
284,239,883.04
-
Financial expenses 9,748,924.22
29,296,397.92
Including：Interest expense 23,435,810.36
24,366,789.74
Interest income 18,328,752.35
18,946,425.24
Add: Other income 202,548,518.03
73,730,674.31
Investment gain（“-”for loss） 168,937,379.22
135,599,082.88
Incl: investment gains from affiliates
Financial assets measured at amortized cost cease to be recognized
as income
Gains from currency exchange
Net exposure hedging income
Changing income of fair value -141,525.84
313,477.36
Credit impairment loss 15,768,143.94
82,441,348.93
-
Impairment loss of assets -28,511,019.43
24,440,216.13
Assets disposal income 1,094,656.77
95,281.00
III. Operational profit（“-”for loss） 787,081,778.21
653,411,747.71
Add ：Non-operational income 134,352,975.28
57,650,448.40
Less: Non-operating expense 88,887,299.33
3,130,575.97
IV. Total profit(“-”for loss) 832,547,454.16
707,931,620.14
Less：Income tax expenses 105,299,694.37
82,692,261.45
V. Net profit 727,247,759.79
625,239,358.69
(I) Classification by business continuity
1.Net continuing operating profit 727,247,759.79
625,239,358.69
2.Termination of operating net profit
(II) Classification by ownership
1.Net profit attributable to the owners of parent company 649,992,474.56
522,396,807.32
2.Minority shareholders’ equity 77,255,285.23
102,842,551.37
VI. Net after-tax of other comprehensive income -485,737,329.38
59,821,266.74
-485,484,629.85
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Net of profit of other comprehensive income attributable to owners of t 59,972,370.69
he parent company.
（I）Other comprehensive income items that will not be reclassified
-485,297,242.70
into gains/losses in the subsequent accounting period 60,084,420.53
1.Re-
measurement of defined benefit plans of changes in net debt or net ass
ets
2.Other comprehensive income under the equity method investee can n
ot be reclassified into profit or loss.
3. Changes in the fair value of investments in other equity instruments 60,084,420.53 -485,297,242.70
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 -187,387.15
. 112,049.84
1.Other comprehensive income under the equity method investee can b
e reclassified into profit or loss.
2. Changes in the fair value of investments in other debt obligations
3. Other comprehensive income arising from the reclassification of
financial assets
4.Allowance for credit impairments in investments in other debt
obligations
5. Reserve for cash flow hedges
-
6.Translation differences in currency financial statements -187,387.15
112,049.84
7.Other
Net of profit of other comprehensive income attributable to Minority -
-252,699.53
shareholders’ equity 151,103.95
VII. Total comprehensive income 241,510,430.41
685,060,625.43
Total comprehensive income attributable to the owner of the parent
164,507,844.71
company 582,369,178.01
Total comprehensive income attributable minority shareholders 77,002,585.70
102,691,447.42
VIII. Earnings per share
（I）Basic earnings per share 0.54 0.68
(II)Diluted earnings per share 0.54 0.68
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin
Can
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
4. Income statement of the Parent Company
In RMB
Items Year 2022 Year 2021
I. Income from the key business 3,185,535,942.16 3,367,538,714.58
Incl：Business cost 2,463,100,672.79 2,420,764,986.89
Business tax and surcharge 21,955,800.03 20,873,235.49
Sales expense 94,333,279.35 93,124,353.76
Administrative expense 392,945,595.33 435,170,658.26
R & D expense 138,488,509.23 192,171,313.79
Financial expenses -31,955,926.80 -5,277,760.85
Including：Interest expenses 5,389,750.73 4,788,907.66
Interest income 11,578,539.98 11,520,301.18
Add：Other income 46,434,957.91 174,266,374.76
Investment gain（“-”for loss） 216,423,127.90 321,333,915.33
Including: investment gains from affiliates 272,641.24
Financial assets measured at amortized cost cease to be recognized as
income
Net exposure hedging income
Changing income of fair value 313,477.36 -2,609,265.44
Credit impairment loss 13,154,499.97
68,354,461.56
-
Impairment loss of assets -18,259,455.46
28,878,579.86
Assets disposal income 26,288.11
II. Operational profit（“-”for loss） 409,341,745.21 698,597,996.40
Add ：Non-operational income 47,625,261.60 120,301,778.59
Less：Non -operational expenses 1,929,713.30 87,148,771.55
III. Total profit(“-”for loss) 455,037,293.51 731,751,003.44
Less：Income tax expenses 35,367,282.97 61,521,858.42
IV. Net profit 419,670,010.54 670,229,145.02
1.Net continuing operating profit 419,670,010.54 670,229,145.02
2.Termination of operating net profit
V. Net after-tax of other comprehensive income 60,084,420.53 -485,297,242.70
（I）Other comprehensive income items that will not be reclassified
60,084,420.53 -485,297,242.70
into gains/losses in the subsequent accounting period
1.Re-
measurement of defined benefit plans of changes in net debt or net ass
ets
2.Other comprehensive income under the equity method investee can n
ot be reclassified into profit or loss.
3. Changes in the fair value of investments in other equity instruments 60,084,420.53 -485,297,242.70
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 can b
e reclassified into profit or loss.
2. Changes in the fair value of investments in other debt obligations
3. Other comprehensive income arising from the reclassification of
financial assets
4.Allowance for credit impairments in investments in other debt
obligations
5. Reserve for cash flow hedges
6.Translation differences in currency financial statements
7.Other
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
VI. Total comprehensive income 479,754,431.07 184,931,902.32
VII. Earnings per share
（I）Basic earnings per share
(II)Diluted earnings per share
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin
Can
5. Consolidated Cash flow statement
Items Year 2022 Year 2021
I.Cash flows from operating activities
Cash received from sales of goods or rending of services 4,396,331,648.09 4,911,745,732.94
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 81,231,460.36 19,124,473.13
Other cash received from business operation 251,137,216.37 492,993,373.24
Sub-total of cash inflow 4,728,700,324.82 5,423,863,579.31
Cash paid for purchasing of merchandise and services 2,662,046,241.61 3,264,017,654.61
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 1,027,230,600.33 995,048,140.94
Taxes paid 344,859,140.11 566,304,337.33
Other cash paid for business activities 370,423,537.14 526,683,957.41
Sub-total of cash outflow from business activities 4,404,559,519.19 5,352,054,090.29
Net cash generated from /used in operating activities 324,140,805.63 71,809,489.02
II. Cash flow generated by investing
Cash received from investment retrieving 10,752,958.20
Cash received as investment gains 131,449,638.53 220,665,203.47
Net cash retrieved from disposal of fixed assets, intangible assets, and
1,216,686.31 2,303,476.87
other long-term assets
Net cash received from disposal of subsidiaries or other operational
units
Other investment-related cash received 2,627,490,212.88 4,447,665,088.15
Sub-total of cash inflow due to investment activities 2,770,909,495.92 4,670,633,768.49
Cash paid for construction of fixed assets, intangible assets and other
272,801,578.46 181,655,743.62
long-term assets
Cash paid as investment
Net increase of loan against pledge
Net cash received from subsidiaries and other operational units 298,438,942.86
Other cash paid for investment activities 2,085,697,180.39 4,383,572,000.00
Sub-total of cash outflow due to investment activities 2,358,498,758.85 4,863,666,686.48
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Net cash flow generated by investment 412,410,737.07 -193,032,917.99
III.Cash flow generated by financing
Cash received as investment 169,795,500.00 320,000.00
Including: Cash received as investment from minor shareholders 169,795,500.00 320,000.00
Cash received as loans 306,300,000.00 422,800,000.00
Other financing –related cash received 200,000.00 117,695,995.86
Sub-total of cash inflow from financing activities 476,295,500.00 540,815,995.86
Cash to repay debts 267,900,000.00 258,500,000.00
Cash paid as dividend, profit, or interests 363,192,673.98 269,797,633.75
Including: Dividend and profit paid by subsidiaries to minor
44,416,370.00 76,080,370.00
shareholders
Other cash paid for financing activities 273,340,869.54 271,082,296.17
Sub-total of cash outflow due to financing activities 904,433,543.52 799,379,929.92
Net cash flow generated by financing -428,138,043.52 -258,563,934.06
IV. Influence of exchange rate alternation on cash and cash equivalents 29,075,934.51 -3,028,317.00
V.Net increase of cash and cash equivalents 337,489,433.69 -382,815,680.03
Add: balance of cash and cash equivalents at the beginning of term 1,467,538,968.07 1,850,354,648.10
VI ..Balance of cash and cash equivalents at the end of term 1,805,028,401.76 1,467,538,968.07
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin
Can
6. Cash Flow Statement of the Parent Company
In RMB
Items Year 2022 Year 2021
I.Cash flows from operating activities
Cash received from sales of goods or rending of services 1,980,841,503.83 2,515,049,261.36
Tax returned 52,872,382.00 3,177,679.96
Other cash received from business operation 66,396,405.12 85,083,996.83
Sub-total of cash inflow 2,100,110,290.95 2,603,310,938.15
Cash paid for purchasing of merchandise and services 1,314,401,634.33 1,620,710,170.84
Cash paid to staffs or paid for staffs 597,944,639.72 568,164,460.95
Taxes paid 159,798,491.41 394,260,109.04
Other cash paid for business activities 85,114,385.41 165,905,142.91
Sub-total of cash outflow from business activities 2,157,259,150.87 2,749,039,883.74
Net cash generated from /used in operating activities -57,148,859.92 -145,728,945.59
II. Cash flow generated by investing
Cash received from investment retrieving 10,288,000.00
Cash received as investment gains 217,826,572.17 367,693,490.76
Net cash retrieved from disposal of fixed assets, intangible assets, and
800,882.00 260,108.20
other long-term assets
Net cash received from disposal of subsidiaries or other operational
units
Other investment-related cash received 1,943,515,564.65 2,580,396,347.51
Sub-total of cash inflow due to investment activities 2,172,431,018.82 2,948,349,946.47
Cash paid for construction of fixed assets, intangible assets and other
208,876,108.57 116,494,283.25
long-term assets
Cash paid as investment 203,652,611.00 279,075,715.98
Net cash received from subsidiaries and other operational units 0.00
Other cash paid for investment activities 1,260,000,000.00 2,476,000,000.00
Sub-total of cash outflow due to investment activities 1,672,528,719.57 2,871,569,999.23
Net cash flow generated by investment 499,902,299.25 76,779,947.24
III. Cash flow generated by financing
Cash received as investment
Cash received as loans 200,000,000.00 150,000,000.00
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Other financing –related ash received 110,195,995.86
Sub-total of cash inflow from financing activities 200,000,000.00 260,195,995.86
Cash to repay debts 150,000,000.00 150,000,000.00
Cash paid as dividend, profit, or interests 306,578,624.17 188,403,557.65
Other cash paid for financing activities 7,456,797.00 1,103,760.00
Sub-total of cash outflow due to financing activities 464,035,421.17 339,507,317.65
Net cash flow generated by financing -264,035,421.17 -79,311,321.79
IV. Influence of exchange rate alternation on cash and cash equivalents 21,960,352.49 -2,217,274.76
V.Net increase of cash and cash equivalents 200,678,370.65 -150,477,594.90
Add: balance of cash and cash equivalents at the beginning of term 873,334,962.40 1,023,812,557.30
VI ..Balance of cash and cash equivalents at the end of term 1,074,013,333.05 873,334,962.40
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin
Can
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
7. Consolidated Statement on Change in Owners’ Equity
Amount in this period
In RMB
Year 2022
Owner’s equity Attributable to the Parent Company
Other Equity instrument Share Minor Total of
Items Capital Other Comm
Other shareholder owners’
Share Preferr Preferr Equity Specialize Surplus on risk Retained Oth
Comprehensi Subtotal s’ equity equity
Capital ed Sustaina ed instrument d reserve reserves provisi profit er
Sustainable ve Income
stock ble debt Other on
stock debt
I.Balance at the end of last year 754,010,40 282,946,03 144,078,94 2,629,477,75 18,369,03 625,178,08 3,761,583,41 7,927,485,77 402,064,74 8,329,550,52
0.00 0.50 8.09 6.99 3.52 9.82 0.91 3.65 7.47 1.12
Add: Change of accounting policy - -
Correcting of previous errors
- -
Merger of entities under common control
- -
Other
- -
II.Balance at the beginning of current year 754,010,40 282,946,03 144,078,94 2,629,477,75 18,369,03 625,178,08 3,761,583,41 7,927,485,77 402,064,74 8,329,550,52
- - - - -
0.00 0.50 8.09 6.99 3.52 9.82 0.91 3.65 7.47 1.12
- -
III.Changed in the current year 226,169,58 111,989,83 7,612,560.0 60,919,849.3 527,707.6 - 400,995,340. 168,646,88 569,642,225.
- - - - - -
0.00 1.50 0 1 0 5,168,772.67 54 5.31 85
（1）Total comprehensive income 59,972,370.6 522,396,807. 582,369,178. 102,691,44 685,060,625.
9 32 01 7.42 43
（II）Investment or decreasing of capital
54,919,487. 54,919,487.1 171,128,10 226,047,590.
by owners - - - - - - - - - - -
13 3 2.88 01
1．Ordinary Shares invested by sharehold
169,795,50 169,795,500.
ers -
0.00 00
2．Holders of other equity instruments in
vested capital - -
3．Amount of shares paid and accounted
54,919,487. 54,919,487.1 1,332,602.8 56,252,090.0
as owners’ equity 13 3 8 1
4．Other
- -
- - -
- -
（III）Profit allotment 7,612,560.0 301,395,999. 338,199,809.
- - - - - - - - - - 293,783,439. 44,416,370.
0 99 99
99 00
1.Providing of surplus reserves
- -
2.Providing of common risk provisions
- -
93
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
- - -
3．Allotment to the owners (or - -
7,612,560.0 301,395,999. 338,199,809.
shareholders) 293,783,439. 44,416,370.
0 99 99
99 00
4．Other
- -
-
(IV) Internal transferring of owners’
226,169,58 226,169,580.
equity - -
0.00 00
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 226,169,58 226,169,580.
- -
0.00 00
(V). Special reserves 443,211.6 -
- - - - - - - - - - 443,211.69 275,800.98
9 167,410.71
1. Provided this year 5,749,535.
5,749,535.20 999,586.73 6,749,121.93
20
-
-
2．Used this term 5,306,323. - -
1,166,997.4
51 5,306,323.51 6,473,320.95
4
-
-
（VI）Other 57,070,344. 970,919.2 57,046,903.7 -
947,478.62 60,588,884.
37 9 0 3,541,980.58
28
IV. Balance at the end of this term 980,179,98 394,935,86 136,466,38 2,690,397,60 17,841,32 625,178,08 3,756,414,63 8,328,481,11 570,711,63 8,899,192,74
- - - -
0.00 2.00 8.09 6.30 5.92 9.82 8.24 4.19 2.78 6.97
Amount in last year
In RMB
Year 2021
Owner’s equity Attributable to the Parent Company
Items Other Equity instrument Comm Minor Total of
Less: Other shareholder owners’
Share Preferr Capital Specialize Surplus on risk Retained Oth
Oth Shares in Comprehensi Subtotal s’ equity equity
Capital ed Sustaina reserves d reserve reserves provisi profit er
er stock ve Income
stock ble debt on
754,010,400 153,617,619 144,078,948 3,114,962,38 17,699,635 621,112,807 3,587,465,03 8,104,788,94 445,350,337 8,550,139,27
I.Balance at the end of last year
.00 .65 .09 6.84 .27 .78 9.91 1.36 .13 8.49
Add: Change of accounting policy
94
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Correcting of previous errors
-
226,288,847 4,065,282.0 59,116,837.2 81,115,077. 140,231,914.
Merger of entities under common control 869,345.59 172,106,637.
.27 4 6 25 51
64
Other
754,010,400 379,906,466 144,078,948 3,114,962,38 18,568,980 625,178,089 3,415,358,40 8,163,905,77 526,465,414 8,690,371,19
II.Balance at the beginning of current year
.00 .92 .09 6.84 .86 .82 2.27 8.62 .38 3.00
- - - - -
- 346,225,008.
III.Changed in the current year 96,960,436. 485,484,629. 236,420,004. 124,400,666 360,820,671.
199,947.34 64
42 85 97 .91 88
-
649,992,474. 164,507,844. 77,002,585. 241,510,430.
（1）Total comprehensive income 485,484,629.
56 71 70 41
85
（II）Investment or decreasing of capital 17,297,907. 17,297,907.4 17,617,907.4
by owners 320,000.00
40 0 0
1．Ordinary Shares invested by shareholder
s 320,000.00 320,000.00
2．Holders of other equity instruments inve
sted capital
3．Amount of shares paid and accounted as 17,297,907. 17,297,907.4 17,297,907.4
owners’ equity 40 0 0
4．Other
- - - -
（III）Profit allotment 185,864,649. 185,864,649. 73,830,370. 259,695,019.
99 99 00 99
1.Providing of surplus reserves
2.Providing of common risk provisions
- - - -
3．Allotment to the owners (or
shareholders) 185,864,649. 185,864,649. 73,830,370. 259,695,019.
99 99 00 99
4．Other
(IV) Internal transferring of owners’ equity
1. Capitalizing of capital reserves (or to
capital shares)
2. Capitalizing of surplus reserves (or to
capital shares)
3．Making up losses by surplus reserves.
4.Change amount of defined benefit plans
that carry forward
Retained earnings
5．Other comprehensive income carry-over
retained earnings
95
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
6．Other
-
(V). Special reserves -238,297.48 -793,099.20 -1,031,396.68
238,297.48
4,276,904.
1. Provided this year 4,276,904.10 696,449.70 4,973,353.80
10
- -
2．Used this term 4,515,201. -4,515,201.58 1,489,548.9 -6,004,750.48
58 0
- - - - -
（VI）Other 114,258,343 38,350.14 117,902,815. 232,122,809. 127,099,783 359,222,593.
.82 93 61 .41 02
754,010,400 282,946,030 144,078,948 2,629,477,75 18,369,033 625,178,089 3,761,583,41 7,927,485,77 402,064,747 8,329,550,52
IV. Balance at the end of this term
.00 .50 .09 6.99 .52 .82 0.91 3.65 .47 1.12
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin Can
8.Statement of change in owner’s Equity of the Parent Company
Amount in this period
In RMB
Year 2022
Other Equity instrument
Items Other
Capital Less: Shares Specialized Surplus Othe Total of
Share capital Preferre Othe Comprehensive Retained profit
Sustainabl reserves in stock reserve reserves r owners’ equity
Income
d stock r
e debt
754,010,400.0 121,457,098.6 144,078,948.0 2,630,313,185. 6,000,000.0 602,356,402.6 3,493,193,115.1 7,463,251,254.
I.Balance at the end of last year
0 5 9 77 0 5 9 17
Add: Change of accounting policy
Correcting of previous errors
Other
754,010,400.0 121,457,098.6 144,078,948.0 2,630,313,185. 6,000,000.0 602,356,402.6 3,493,193,115.1 7,463,251,254.
II.Balance at the beginning of current year
0 5 9 77 0 5 9 17
226,169,580.0 -
III.Changed in the current year 54,101,690.01 -7,612,560.00 60,084,420.53 240,072,681.09
0 107,895,569.45
（I）Total comprehensive income 60,084,420.53 419,670,010.54 479,754,431.07
(II) Investment or decreasing of capital by owners 54,101,690.01 54,101,690.01
1．Ordinary Shares invested by shareholders
96
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
2．Holders of other equity instruments invested ca
pital
3.Amount of shares paid and accounted as owners’
equity 54,101,690.01 54,101,690.01
4．Other
- -
（III）Profit allotment -7,612,560.00
301,395,999.99 293,783,439.99
1.Providing of surplus reserves
- -
2．Allotment to the owners (or shareholders) -7,612,560.00
301,395,999.99 293,783,439.99
3．Other
226,169,580.0 -
(IV) Internal transferring of owners’ equity
0 226,169,580.00
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
226,169,580.0 -
6．Other
0 226,169,580.00
(V) Special reserves
3,900,260.3
1. Provided this year 3,900,260.39
9
-
2．Used this term 3,900,260.3 -3,900,260.39
9
（VI）Other
980,179,980.0 175,558,788.6 136,466,388.0 2,690,397,606. 6,000,000.0 602,356,402.6 3,385,297,545. 7,703,323,935.
IV. Balance at the end of this term
0 6 9 30 0 5 74 26
Amount in last year
In RMB
Year 2021
Other Equity instrument Other
Items Capital Less: Shares Specialized Surplus Othe Total of
Share Capital Preferre Othe Comprehensive Retained profit
reserves in stock reserve reserves r owners’ equity
Income
d stock Sustainabl r
97
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
e debt
754,010,400.0 138,953,250.0 144,078,948.0 3,115,610,428.4 6,000,000.0 602,356,402.6 2,978,322,472. 7,451,174,005.
I.Balance at the end of last year
0 9 9 7 0 5 76 88
Add: Change of accounting policy
Correcting of previous errors
Other
754,010,400.0 138,953,250.0 144,078,948.0 3,115,610,428.4 6,000,000.0 602,356,402.6 2,978,322,472. 7,451,174,005.
II.Balance at the beginning of current year
0 9 9 7 0 5 76 88
- -
III.Changed in the current year 514,870,642.43 12,077,248.29
17,496,151.44 485,297,242.70
-
（I）Total comprehensive income 670,229,145.02 184,931,902.32
485,297,242.70
(II) Investment or decreasing of capital by owners 17,297,907.40 17,297,907.40
1．Ordinary Shares invested by shareholders
2．Holders of other equity instruments invested ca
pital
3.Amount of shares paid and accounted as owners’
equity 17,297,907.40 17,297,907.40
4．Other
- -
（III）Profit allotment
183,614,649.99 183,614,649.99
1.Providing of surplus reserves
- -
2．Allotment to the owners (or shareholders)
183,614,649.99 183,614,649.99
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
5．Other comprehensive income carry-over
retained earnings
6．Other
(V) Special reserves
2,847,667.7
1. Provided this year 2,847,667.75
5
-
2．Used this term -2,847,667.75
2,847,667.7
98
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
5
-
（VI）Other 28,256,147.40 -6,537,911.44
34,794,058.84
754,010,400.0 121,457,098.6 144,078,948.0 2,630,313,185. 6,000,000.0 602,356,402.6 3,493,193,115.1 7,463,251,254.
IV. Balance at the end of this term
0 5 9 77 0 5 9 17
Legal Representative: Zheng Bin Person in charge of accounting：Zhao Jiamao Accounting Dept Leader: Jin Can
99
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
III．Basic Information of the Company
Hangzhou Steam Turbine Power Group Co., Ltd. (Original name: Hangzhou Steam Turbine Co., Ltd. Hereinafter
referred to as "the Company") was incorporated as a joint stock limited company exclusively promoted by
Hangzhou Steam Turbine Holdings Co., Ltd(Original name: Hanghou Steam Turbine Power Group Co.,
Ltd.Hereinafter referred to as "Steam Turbine Holdings") 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 RMB 980,179.98 million with total capital share of 980,179.98 million shares (face value
RMB1.00). Among which state-owned legal person shares were 623.77224 million shares and 356.40774 million
shares of current B shares. The shares were issued and listed for trading in Shenzhen Stock Exchange on April 28,
1998.
The design, manufacturing, Main Business Activities: R&D, Production and Sales of Industrial Steam Turbine.
Main Products: Industrial Steam Turbine.
These Financial Statements are released upon approval at the 32nd meeting of the 8th term of Board held on
March 27, 2023.
As of December 31, 2022, the Company included the following 16 subsidiaries in the scope of the current
consolidated financial statements, as shown in Notes X(8) to this financial statement.
No Names of subsidiaries included in the consolidated financial statements of Abbreviation
the current period
1 Hangzhou Steam Turbine Auxiliary Co., Ltd. Auxiliary Company
2 Zhongneng Steam Turbine Power Co., Ltd. Guoneng Company
Zhejiang Steam Turbine Packaged Technologies Co., Ltd., Packaged Technologies
3
Co.
4 Hangzhou Steam Turbine Machinery & Equipment Co., Ltd Machinery Company
5 Zhyejiang Huayuan Steam Turbine Machinery Co., Ltd. Huayuan Company
6 Zhejiang Turbine Import & Export Co., Ltd. Turbine Company
7 Zhejiang Zhongrun Gas Turbine technology Co., Ltd. Zhongrun Company
8 Hangzhou Zhongneng Steam Turbine Power Co.,Ltd. Zhongneng Company
9 Hangzhou Hangfa Power Equipment Co., ltd. Hangfa Company
10 Hangzhou Steam Turbine Casing Co., ltd. Casing Company
11 Anhui Hangqi Casing Technology Co., Ltd. Anhui Casing Company
12 Hangzhou Steam Turbine New Energy Co., Ltd. New Energy Company
13 Hangzhou Steam Turbine Automobile Sales Service Co., Ltd. Sales Company
14 Hangzhou Steam Turbine Automobile Sales Service Co., Ltd. Sales Company
China mechanical and Electrical Institute -HSTG (Hangzhou) United China mechanical In
15 Institutes Co., Ltd Ranchuang Company
stitute Company
16 Zhejiang Ranchuang Turbine mechanical Co., Ltd. Ranchuang Company
IV. Basis of compiling the financial statement
(1) Basis of compiling
The Company adopts perpetual operation as the basis of financial statements.
(II) Assessment on perpetuation
No issue or situation, in 12 months since the end of report period, composes major doubt on the
100
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
perpetuation assumption of the Company.
V. Principal Accounting Policies and Estimations
Principal Accounting Policies and Estimations
Important prompt: The Company utilized detailed accounting polices and estimations on providing of bad debt
provisions, fixed asset depreciation, intangible asset amortization, recognition of revenue, and so forth, according
to its business practices.
1. Statement of compliance to the Enterprise Accounting Standard
The finance report produced by the Company is accordance with the Enterprise Accounting Standard, and reflects
the Company’s financial state, business performance and cash flow frankly and completely.
2. Fiscal year
The Company uses the calendar year for its fiscal year. A fiscal year is from January 1 to December 31.
3. Operational period
The Company’s relatively shorter operational period, which is 12 months, and is used as division of liquidity of
assets and liabilities.
4. Standard currency for bookkeeping
The Company uses Renminbi (RMB) as the standard currency for book keeping.
5. Accounting treatment of the entities under common control and different control
(1). Treatment of entities under common control
Assets and liabilities acquired in merger of entities are measured at book values at the date of merger. The
difference between the net book value of asset and the offered price (or total of face value of shares issued) will be
adjusted into capital reserves; when the capital reserves is not enough to reduce, it will be adjusted into retained
profit.
(2). Treatment of entities under different control
The difference of takeover cost over the fair value of recognizable net asset of the acquired entity is
recognized as goodwill at the day of takeover; in case the takeover cost is lower than the fair value of recognizable
net asset of the acquired entity, the measuring process over the recognizable asset, liabilities, contingent liabilities,
and takeover cost, shall be repeated, if comes out the same result, the difference shall be 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
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
101
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Asset and liability items in the balance sheet are translated basing on the exchange rate of the balance sheet date;
Owners’ equities other than Retained Profit are translated at the exchange rate of the date when the trade
happened. Income and expense items in the income statement are translated at the similar rate of the date when the
trade happened. Differences generated by the above translating of foreign currencies are demonstrated separately
under the owners’ equity in the balance sheet.
10.Financial instruments
(1) Classification of financial assets and financial liabilities
Financial assets are divided into the following three categories upon initial recognition: 1) Financial assets
measured in amortized cost; 2) Financial assets measured at fair value, whose changes are included in other
comprehensive income; 3) Financial assets measured at fair value, whose changes are included in current profits
and losses.
Financial liabilities are divided into the following four categories upon initial recognition: 1) Financial
liabilities measured at fair value, whose changes are included in current profits and losses; 2) Financial liabilities
resulting from the transfer of financial assets that do not meet the conditions for derecognition or continue to be
involved in the transferred financial assets; 3) Financial guarantee contracts that do not belong to the above 1) or
2), and loan commitments that do not belong to the above 1) and lend at a lower than market interest rate; 4)
Financial liabilities measured in amortized cost.
(2) Recognition basis, measurement methods and conditions for derecognition of financial assets and
financial liabilities
However, if the accounts receivable initially recognized by the company do not contain significant financing
components or the company does not consider the financing components in the contract for less than one year, the
initial measurement shall be made according to the transaction price. The initial measurement is made according
to the transaction price defined in Accounting Standards for Business Enterprises No.14-Income.
2) Subsequent measurement methods of financial assets
①Financial assets measured at amortized cost
The actual interest rate method is adopted for subsequent measurement according to amortized cost. Gains or
losses arising from financial assets measured in amortized cost that are not part of any hedging relationship are
included in current profits and losses when derecognition, reclassification, amortization according to the effective
interest rate method, or impairment recognition.
② Debt instruments investment measured at fair value, whose changes are included in other comprehensive
income
Fair value is adopted for subsequent measurement. Interest, impairment losses or gains and exchange gains
and losses calculated by the effective interest rate method are included in the current profits and losses, while
other gains or losses are included in other comprehensive income. Upon termination of recognition, the
accumulated gains or losses previously included in other comprehensive income shall be transferred out of other
comprehensive income and included in current profits and losses.
③ Equity instrument investments measured at fair value, whose changes are included in other
comprehensive income
Fair value is adopted for subsequent measurement. Dividends received (except those that belong to the part
of investment cost recovery) are included in current profits and losses, and other gains or losses are included in
other comprehensive income. Upon termination of recognition, the accumulated gains or losses previously
included in other comprehensive income shall be transferred out of other comprehensive income and included in
retained income.
④ Financial assets measured at fair value and changes included in current profits and losses
The fair value is adopted for subsequent measurement, and the resulting gains or losses (including interest
and dividend income) are included in the current profits and losses unless the financial asset is part of the hedging
relationship.
(3) Subsequent measurement methods of financial liabilities
① Financial liabilities measured at fair value, whose changes are included in current profits and losses
Such financial liabilities include transactional financial liabilities (including derivatives of financial liabilities)
and financial liabilities designated to be measured at fair value, whose changes are included in current profits and
losses. Such financial liabilities are subsequently measured at fair value. Changes in the fair value of financial
liabilities designated to be measured at fair value, whose changes are included in the profits and losses of the
current period due to changes in the company's own credit risk are included in other comprehensive income,
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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.
When the current obligation of a financial liability (or part thereof) has been discharged, the financial liability
(or part thereof) shall be derecognized accordingly.
(4) Recognition basis and measurement method of financial asset transfer
If the company has transferred almost all risks and rewards in the ownership of financial assets, it shall
terminate the recognition of the financial assets and separately recognize the rights and obligations arising from or
retained in the transfer as assets or liabilities; If almost all risks and rewards on the ownership of financial assets
are retained, the transferred financial assets shall continue to be recognized. If the company neither transfers nor
retains almost all risks and rewards in the ownership of the financial asset, the following situations shall be
handled respectively: 1) If the control over the financial asset is not retained, the recognition of the financial asset
shall be terminated, and the rights and obligations generated or retained in the transfer shall be separately
recognized as assets or liabilities; 2) If the control over the financial assets is retained, the relevant financial assets
shall be recognized according to the extent of continuing involvement in the transferred financial assets, and the
relevant liabilities shall be recognized accordingly.
If the overall transfer of financial assets meets the conditions for derecognition, the difference between the
following two amounts shall be included in the current profits and losses: 1) The book value of the transferred
financial assets on the derecognition date; 2) The sum of the consideration received for the transfer of financial
assets and the amount of the corresponding derecognized portion of the accumulated amount of changes in fair
value originally directly included in other comprehensive income (the financial assets involved in the transfer are
debt instrument investments measured at fair value, whose changes are included in other comprehensive income).
If a part of the financial asset is transferred and the transferred part meets the conditions for derecognition as a
whole, the book value of the financial asset before transfer shall be apportioned between the derecognition part
and the continuing recognition part according to their respective relative fair values on the transfer date, and the
difference between the following two amounts shall be included in the current profits and losses: 1) The book
value of the derecognition part; 2) The sum of the consideration of the derecognized portion and the amount of the
corresponding derecognized portion of the cumulative amount of changes in fair value originally directly included
in other comprehensive income (financial assets involved in transfer are debt instrument investments measured at
fair value, whose changes are included in other comprehensive income).
(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
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methods to measure the loss reserve according to the expected credit loss amount equivalent to the entire duration.
For lease receivables and receivables containing significant financing components, the company uses
simplified measurement methods to measure the loss reserve according to the expected credit loss amount
equivalent to the entire duration.
For financial assets other than the above measurement methods, the company evaluates whether its credit risk
has increased significantly since the initial recognition on each balance sheet date. If the credit risk has increased
significantly since the initial recognition, the company shall measure the loss reserve according to the amount of
expected credit loss during the whole duration. If the credit risk has not increased significantly since the initial
recognition, the company shall measure the loss reserve according to the expected credit loss amount of the
financial instrument within the next 12 months.
The company uses the available reasonable and reliable information, including forward-looking information,
to determine whether the credit risk of financial instruments has increased significantly since the initial
recognition by comparing the risk of default on the balance sheet date with the risk of default on the initial
recognition date.
The company evaluates expected credit risks and measures expected credit losses on the basis of individual
financial instruments or combinations of financial instruments. When based on the combination of financial
instruments, the company divides financial instruments into different combinations based on common risk
characteristics.
For financial assets measured in amortized cost, the loss reserve shall be offset against the book value of the
financial assets listed in the balance sheet; For creditor's rights investments measured at fair value, whose changes
are included in other comprehensive income, the company recognizes its loss reserve in other comprehensive
income, which does not offset the book value of the financial asset.
2) Financial instruments for assessing expected credit risks and measuring expected credit losses by combination
Items Basis for determining combination Methods of measuring expected credit loss
Other receivables-associated Taking related parties within the scope of
transaction combinations within the consolidated financial statements as credit Refer to the historical credit loss experience,
scope of consolidated financial risk characteristics, other receivables are combine the current situation with the forecast
statements combined of future economic situation, and calculate the
expected credit loss through default risk
Taking aging as the credit risk characteristic, exposure and the expected credit loss rate
combine other receivables except the related within the next 12 months or the whole
Other receivables-aging combination
party receivables within the scope of the duration.
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
Commercial acceptance bills Bill type between the aging of accounts receivable and the
receivable expected credit loss rate during the whole duration,
and calculate the expected credit loss.
Refer to the historical credit loss experience, combine
Taking related parties within the
Accounts receivable-associated the current situation and the forecast of the future
scope of consolidated financial
transaction combinations within the economic situation, compile a comparison table
statements as credit risk
scope of consolidated financial between the aging of accounts receivable and the
characteristics, receivables are
statements expected credit loss rate during the whole duration,
combined
and calculate the expected credit loss.
Refer to the historical credit loss experience, combine
Taking aging as the credit risk
the current situation and the forecast of the future
Accounts receivable-aging characteristic, combine receivables
economic situation, compile a comparison table
except the related party receivables
combination between the aging of accounts receivable and the
within the scope of the consolidated
expected credit loss rate during the whole duration,
financial statements
and calculate the expected credit loss.
Contract assets——associated Taking related parties within the Refer to the historical credit loss experience, combine
transaction combinations within the scope of consolidated financial the current situation and the forecast of the future
scope of consolidated financial statements as credit risk economic situation, compile a comparison table
statements characteristics, Costract assets are between the aging of accounts receivable and the
combined expected credit loss rate during the whole duration,
and calculate the expected credit loss.
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Contract assets——aging combination Taking aging as the credit risk Refer to the historical credit loss experience, combine
characteristic, combine receivables the current situation and the forecast of the future
except the related party contract economic situation, compile a comparison table
assets within the scope of the between the aging of accounts receivable and the
consolidated financial statements expected credit loss rate during the whole duration,
and calculate the expected credit loss.
Long-term receivable——aging Aging Refer to the historical credit loss experience, combine
combination the current situation and the forecast of the future
economic situation, compile a comparison table
between the aging of accounts receivable and the
expected credit loss rate during the whole duration,
and calculate the expected credit loss.
2) Account receivable、Contract assets——Table of Aging of Aging Combination and Expected Credit Loss
Rate for the Whole Duration
Aging Receivable receivable/contract assets Expected credit
loss rate (%)
5.00
Within 1 year (inclusive, the same below)
10.00
1-2 years
30.00
2-3 years
60.00
3-4 years
80.00
4-5 years
100.00
Over 5 years
(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 X(5)-10 Financial instrument of this report.
12.Account receivable
For details, please refer to Section X(5)-10 Financial instrument of this report.
13. Financing of receivables
For details, please refer to Section X(5)-10 Financial instrument of this report.
14.Other account receivable
Methods for determining expected credit losses of other receivables and accounting treatment
For details, please refer to Section X(5)-10 Financial instrument of this report.
15.Inventories
(1) Inventory classification
Inventories include saleable finished goods or merchandise, product-in-process , consumption material and goods
in manufacturing procedure or working procedure.
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(2) Pricing of inventory to be delivered
On company adopts the mobile weighted average method, other companies adopt the weighted average method at
the end of the month, and the individual valuation method
(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
18.Held-for-sale asset
19.Creditor's rights investment
20.Other Creditor's rights investment
21.Long-term account receivable
For details, please refer to Section X(5)-10 Financial instrument of this report.
22. Long-term equity investment
1. Recognition of common control and substantial influence
According to the contract, if the invested enterprise’s main finance and operation policy need to be agreed by the
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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
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
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retained equity shares, less the share of net asset attributable to the Company on continued basis since purchasing
or merger, is accounted into investment gains of the period when the control power is disposed, and goodwill shall
be offset meanwhile. Other gains related to the equities in formal subsidiary shall be written over to current
investment gains at the period when control power was disposed.
2) Losing of controlling power on a subsidiary through disposal of equity by multiple trades, and recognized as
“one-off” trade:
The multiple trades are treated as one trade that causes losing of control power on a subsidiary. However, the
balance between the consideration received from each trade and corresponding share of net asset is recognized as
other gains in the consolidated accounts, and transferred collectively to gain/loss account of the period in which
the control power was lost.
23. Investment property
The measurement mode of investment property
Measurement cost method
Depreciation or amortization method
(1) Investment real estate includes leased land use rights, land use rights held and ready to be transferred
after appreciation, and leased buildings.
(2) Investment real estate is initially measured according to cost, followed by measurement by cost model,
and depreciated or amortized in the same way as fixed assets and intangible assets.
24. Fixed assets
1. Conditions for fixed asset recognition
Fixed assets is defined as the tangible assets which are held for the purpose of producing goods, providing
services, lease or for operation & management, and have more than one year of service life. Fixed assets are
recognized at satisfying of great possibility of benefit inflow and costs are accountable.
2. Depreciation
Annual depreciation
Categories Basis of depreciation Depreciation age (year) Retain value rate
ratio
Straight average on
Houses & buildings 20-40 4-5 4.8-2.35
period
Equipment & Straight average on
5-15 4-5 19.2-6.27
machinery period
Transportation Straight average on
3-12 4-5 32-7.83
equipment period
Straight average on
Office equipment 3-10 4-5 32-9.4
period
3.Recognition basis, valuation and depreciation method for financing leased fixed assets
25. Construction in process
1. Construction in process is recognized on the basis of characteristics: very possible economic benefit flow in,
cost can be measured reliably. Since the date when the construction in process reaches its useful status as expected,
the construction in process is measured by the happened cost Since the date when the construction in process
reaches its useful status as expected.
2. When the construction in process reaches its useful status as expected, it is transferred into fixed asset at actual
cost. If the construction in process has reached useful status but with completion of project settlement process, it is
transferred to fixed asset at the value estimated, and adjustment will happen after completion of project settlement
process but no adjustment on depreciation provided previously.
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26. Loan expenses
1. Capitalizing of loan expenses
Loan expenses occurred in the Company, which can be categorized to purchasing or construction of assets
satisfying the conditions of capitalization, shall be capitalized and accounted into capital costs; while other loan
expenses are recognized as expenses and recorded into current income account.
2. Capitalization period of loan expenses
(1) Capitalization started as soon as all of these conditions are satisfied: 1) Capital expenditures have occurred; 2)
Loan expenses have occurred; 3) Necessary purchasing or construction processes have been started to make the
asset usable or sellable.
(2) If irregular interruption occurred in the purchasing or construction process of the assets satisfying the
capitalizing conditions, and suspended for over successive three months, capitalizing of loan expenses is
suspended; loan expenses occurred during the suspension period are recognized as current expenses until the
purchasing or construction process resumes.
(3) Capitalizing of loan expenses is terminated as soon as the asset satisfying the capitalizing conditions reaches
the state of usable or sellable as expected.
3. Rates and amounts of loan expense capitalization
Special loans raised for purchasing or construction of assets satisfying the conditions of capitalization, interest to
be capitalized will be the actual interest expenses occurred in the current period of loan (including the discount,
premium, or amortizing decided on actual interest rate basis), less the interest income from the unused loans in
bank account or provisional investment gains; common loans used for purchasing or construction of assets
satisfying the conditions of capitalization, the interest to be capitalized will be the weighted average of balance
over special loans multiply capitalization rate of common loans.
27. Biological assets
28. Oil-gas assets
29. Assets of the right to use
For details, please refer to Section X （5）42 Lease.
30. Intangible assets
（1）Pricing Method, service life and impairment test
1. Intangible assets are land using rights, patents, and non-patent technologies, which are measured at cost basis.
2. For intangible assets with limited useful life, during the use life it is amortized according to the anticipating
implementation method of the economic benefit of the intangible asset systematically and reasonably. If can’t
recognize the anticipating implementation method, the straight basis is deployed.
Items Amortiing years
50
Land using right
5-20
Patent
Non patent technology 10
Software 3-10
(2) Accounting policy for internal research and development expenditure
Expenditures of internal researching projects are accounted into current term gain and loss when happens. The
development period expenditures are recognized as intangible assets when fulfill following conditions: (1) The
intangible asset is completed and technically possible to be used or sold; (2) With intention to complete the
intangible asset for purpose of use or sale; (3) Evidence showing that there are markets or the products produced
with using of the intangible asset, or markets of the intangible asset itself, by which the intangible asset may
produce financial benefits. Intangible assets used inside the Company must be approved for their usable characters.
(4) Developing of the intangible assets are supported by sufficient technical, financial, and other resources, and
the intangible assets can be used or sold. (5) Expenditures occurred in developing of the intangible asset may be
reliably measured.
31. Impairment of partial long-term assets
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
For those long-term assets such as equity investment, fixed assets measured on cost basis, construction-in-process,
intangible assets with limited service life, their recoverable amount shall be evaluated as soon as there was
evidence indicating impairment at the balance sheet day. For intangible assets such as goodwill from merger or
intangible assets with uncertain service lives, impairment test is performed each year whatever there is evidence
of impairment or not. Impairment test on goodwill is performed on combination of related assets.
When the result of prediction shows that the recoverable amount is lower than its book value, the balance shall be
provided impairment provision and accounted into current gain/loss.
32. Long-term amortizable expenses
33.Constract Liabilities
For details, please refer to Section X, V 16 Contract Assets of this report.
34. Employees’ wage
1. Accounting of short-term wages
In the fiscal period when an employee is providing services, short-term wages actually occurred is recognized as
liability, and recorded into current gain/loss account or cost of related asset.
2.Accounting of stipulated beneficiary plan is on following steps:
1) On basis of expected accumulation of welfare, estimations on population variables and financial variables,
calculating of liabilities from stipulated beneficiary plan, and recognition of the period of related liabilities, are
performed on basis of non-bias and accordance actuary. Meanwhile, discount is performed on the liabilities from
stipulated beneficiary plan to recognize the current value and service cost of the liabilities from the stipulated
beneficiary plan.
2) When there is asset involved in the stipulated beneficiary asset, the deficit or premium from the balance of the
current value of liabilities of stipulated beneficiary plan over their fair values is recognized as its net liability or
net asset. When there is a premium with a stipulated beneficiary plan, the lower one between the premium and the
upper limit of the asset is recognized as the net asset of such stipulated beneficiary asset;
3) At end of period, employees’ wages from stipulated beneficiary plan are recognized by three parts including
service cost, net interest of net liability or net asset, and recalculated net asset or liability variation. The first two
are recorded into current gain/loss or related asset cost, the third is recorded to other gains, which will not be
written back to gain/loss in successive fiscal periods, but the amount can be transferred with the range of equity.
3. Accounting of dismissing welfare
Welfares for employees who are dismissed, the earlier one of the following is recognized as employee wage
liability, and recorded to current gain /loss:
(1) When the Company cannot, on its own call only, retrieve the dismissing welfare provided by dismissing of
service plan or suggestion;
(2) When the costs or expenses related to restructuring involved in the dismissing welfare are recognized by the
Company.
4. Accounting of other long-term employees’ welfares
As of long-term welfares provided to the employees, those which satisfy conditions of the stipulated saving plan
are treated according to related regulations of stipulated saving plan; those which other than the aforesaid, are
treated according to the stipulated beneficiary plan. In viewing of simplifying accounting treatment, employee
wage costs are recognized as service costs, the net amounts of interests of other long-term welfare net liability or
asset, along with recalculated variations of the both are recorded to the related gain/loss or cost of related asset.
35. Lease liabilities
For details, please refer to Section X （5）42 Lease.
36. Expected liabilities
(1) When it is very much likely to cause economic interests which can be reliably calculated outflow from
the company to fulfill the obligation which is due to giving security outside, contentious matter, quality guarantee
of products, onerous contract and other contingency, the company will regard the obligation as anticipation
liabilities.
(2) The company will make an initial measurement of anticipation liabilities according to needed expense
of best estimation when fulfilling related obligations and check the book value of anticipation liabilities on the
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balance sheet date.
37.Share-based Payment
(1) Types of share-based payment
Including equity-settled share-based payment and cash-settled share-based payment.
(2) Accounting treatment related to implementation, modification and termination of share-based payment
plan
1) Equity-settled share-based payment
Equity-settled share-based payment in exchange for employee services immediately after the grant, shall be
included in relevant costs or expenses according to the fair value of equity instruments on the grant date, and the
capital reserve shall be adjusted accordingly. For equity-settled share-based payment that can only be exchanged
for employee services if the service in the waiting period is completed or the specified performance conditions are
met, on each balance sheet date in the waiting period, based on the best estimation of the number of equity
instruments with the vesting right, the services obtained in the current period shall be included in relevant costs or
expenses according to the fair value of the equity instruments on the granting date, and the capital reserve shall be
adjusted accordingly.
Share-based payment for equity settlement of other parties' services, if the fair value of other parties'
services can be reliably measured, shall be measured according to the fair value of other parties' services on the
acquisition date; If the fair value of other parties' services cannot be measured reliably, but the fair value of equity
instruments can be measured reliably, it shall be measured according to the fair value of equity instruments on the
service acquisition date, and included in the related costs or expenses, and the owner's equity shall be increased
accordingly.
2) Cash-settled share-based payment
Cash-settled share-based payment in exchange for employee services immediately after the grant, shall be
included in relevant costs or expenses according to the fair value of liabilities borne by the Company on the grant
date, and liabilities shall be increased accordingly. For cash-settled share-based payment in exchange for
employee services only after the service in the waiting period is completed or the specified performance
conditions are met, on each balance sheet date in the waiting period, based on the best estimation of the situation
of the vesting right, the services obtained in the current period shall be included in the relevant costs or expenses
and corresponding liabilities according to the fair value of the liabilities assumed by the Company.
3) Modification and termination of the share-based payment plan
If the modification increases the fair value of the granted equity instruments, the Company shall
correspondingly recognize the increase of the obtained services according to the increase of the fair value of the
equity instruments; If the modification increases the number of equity instruments granted, the fair value of the
increased equity instruments will be recognized as the increase of services by the Company; If the Company
modifies the vesting conditions in a way that is beneficial to employees, the Company will consider the modified
vesting conditions when dealing with the vesting conditions.
If the modification reduces the fair value of the granted equity instruments, the Company will continue to
recognize the amount of services obtained based on the fair value of the equity instruments on the granting date,
without considering the reduction of the fair value of the equity instruments; If the modification reduces the
number of granted equity instruments, the Company will treat the reduced part as the cancellation of the granted
equity instruments; If the vesting conditions are modified in a way that is unfavorable to employees, the modified
vesting conditions will not be considered when dealing with the vesting conditions.
If the Company cancels the granted equity instruments or settles the granted equity instruments during the
waiting period (except those cancelled due to failure to meet the vesting right conditions), the cancellation or
settlement will be treated as accelerated vesting right, and the amount originally recognized during the remaining
waiting period will be immediately recognized.
38 . Other financial instruments such as preferred shares and perpetual capital securities
39.Revenues
Accounting policies used for revenue recognition and measurement
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
1. Recognizing of revenue
Since the starting date of the contract, the company shall evaluate the contract, identifies each individual
performance obligation contained in, and determines whether each individual performance obligation is
performed within a certain period of time or at a certain point of time.
The performance obligation is defined as fulfillment within a certain period of time if one of the following
conditions is met, otherwise, it is defined as fulfilled at a certain point in time: (1) The customer obtains and
consumes the economic benefits brought by the company's performance while the company performs the contract;
2) The customer can control the goods under manufacturing or services during the company's performance; (3)
The goods or services produced during the company's performance have irreplaceable uses, and the company has
the right to accumulate for the completed performances during the entire contract period.
For obligations performed within a certain period of time, the company recognizes revenue in accordance
with the performance progress in that period. If the performance progress cannot be reasonably determined, and
the cost incurred is expected to be compensated, the revenue shall be recognized according to the amount of the
cost incurred until the performance progress can be reasonably determined. For obligations performed at a certain
point in time, revenue shall be recognized at the point when the customer obtains control of the relevant goods or
services. When judging whether the customer has obtained control of the product, the company shall consider the
following points: (1) The company has the current right to receive payment for the product, that is, the customer
has the current payment obligation for the product; (2) The company has transferred the legal ownership of the
product to the customer, that is, the customer has the legal ownership of the product; (3) The company has
transferred the physical product to the customer, that is, the customer has physically taken possession of the
product; (4) The company has transferred the main risks and rewards on the ownership of the product to the
customer, that is, the customer has obtained the main risks and rewards on the ownership of the product; (5) the
customer has accepted the product; (6) other signs that the customer has obtained control of the product.
2. Principle of income measurement
(1) The company shall measure revenue based on the transaction price allocated to each individual
performance obligation. The transaction price is the amount of consideration that the company expects to be
entitled to receive due to the transfer of goods or services to customers, while does not include payments received
on behalf of third parties and payments expected to be returned to customers.
(2) If there is variable consideration in the contract, the company shall determine its best estimate according to
the expected value or the most likely amount, but the transaction price including the variable consideration shall
not exceed the accumulated amount that, if relevant uncertainty is eliminated, will most likely have no significant
reversal.
(3) If there is any significant financing component in the contract, the company shall determine the
transaction price based on the amount payable in cash when the customer assumes control of the goods or services.
The difference between transaction price and contract consideration shall be amortized through effective interest
method during the contract period.
(4) If the contract contains two or more performance obligations, the company shall, on date of the contract,
allocate the transaction price to each individual obligation item in accordance with the relative proportion of the
separate selling price of promised goods.
3. Specific methods of revenue recognition
1) Industrial steam turbine and other products sales business
The company's selling of steam turbines, 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 co
ntract and obtained the receipt confirmed by the purchaser, with received the payment or obtained the right to rece
ive payment and the relevant economic benefits are likely to flow in. Export sales revenue is recognized when the
Company has declared the product in accordance with the contract and obtained the export goods declaration form
and the bill of lading, with received the payment or obtained the right to receive payment and the relevant econo
mic benefits are likely to flow in.
2) Hydro-generator set sales business and engineering service business (including EPC and other general
contracting projects)
The Company's business of selling hydro-generator sets and providing engineering services are the
performance obligations performed within a certain period of time. The performance progress is determined
according to the proportion of the incurred cost to the estimated total cost, and the revenue is recognized
according to the performance progress. When the performance progress cannot be reasonably recognized, if the
cost already incurred by the Company is expected to be compensated, the revenue will be recognized according to
the cost amount already incurred until the performance progress can be reasonably recognized.
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The adoption of different business models in similar businesses leads to differences in accounting policies for
revenue recognition
40. Government subsidy
1. Government subsidies are recognized while they meet the following conditions at the same time: (1) the
Company can meet the conditions attached to the government subsidies; (2) the Company can receive government
subsidies. Where government subsidies are monetary assets, they shall be measured by the amount received or
receivable. Where government subsidies are non-monetary assets, they shall be measured by the fair value; if the
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
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
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(1)Accounting of operational lease
1) Company as the Lessee
On the start date of the lease term, the company will recognize the lease with a lease term of no more than 12
months and without the purchase option as a short-term lease; and recognize the lease with lower value when a
single leased asset is a brand-new asset as a low-value asset lease. If the company subleases or expects to sublet
the leased assets, the original lease shall not be deemed as low-value asset lease.
For all short-term leases and low-value asset leases, the company will calculate the lease payment amount
into the relevant asset cost or current profits and losses according to the straight-line method in each period of the
lease term.
In addition to the above-mentioned short-term leases and low-value asset leases with simplified processing,
the company recognizes the right to use assets and lease liabilities for leases on the start date of the lease term.
① Right-to-use assets
The right-to-use assets are initially measured according to the cost, which includes: i. The initial
measurement amount of lease liabilities; ii. If there is lease incentive for the lease payment issued on or before the
start date of the lease term, the amount related to the lease incentive enjoyed shall be deducted; ⅲ. Initial direct
expenses incurred by the lessee; iv. The estimated costs that the lessee will incur for dismantling and removing the
leased assets, restoring the leased assets' site or restoring the leased assets to the state agreed in the lease terms.
The company depreciates the right-to-use assets according to the straight-line method. If it can be reasonably
determined that the ownership of the leased asset is acquired at the expiration of the lease term, the company shall
accrue depreciation within the remaining service life of the leased asset. If it is impossible to reasonably determine
that the ownership of the leased asset can be acquired at the expiration of the lease term, the company shall accrue
depreciation within the shorter of the lease term and the remaining service life of the leased asset.
② Lease liabilities
On the lease start date, the company recognizes the present value of the unpaid lease payment as the lease
liability. When calculating the present value of the lease payment amount, the lease inclusive interest rate is used
as the discount rate. If the lease inclusive interest rate cannot be determined, the company's incremental loan
interest rate is used as the discount rate. The difference between the lease payment amount and its present value is
considered as unrecognized financing expense, and the interest expense is recognized according to the discount
rate for recognizing the present value of the lease payment amount in each period of the lease term, which is
included in the current profits and losses. The variable lease payments that are not included in the measurement of
lease liabilities are included in the current profits and losses when they actually occur.
After the start of the lease term, when the actual fixed payment amount changes, the estimated payable
amount of the guarantee residual value changes, the index or ratio used to determine the lease payment amount
changes, and the evaluation result or actual exercise situation of the purchase option, renewal option or
termination option changes, the company will re-measure the lease liability according to the present value of the
changed lease payment amount, and adjust the book value of the right-to-use assets accordingly. If the book value
of the right-to-use assets has been reduced to zero, but the lease liability still needs to be further reduced, the
remaining amount will be included in the current profits and losses.
2) Company as the Lessor
On the lease start date, the company classifies the lease with almost all risks and rewards related to the
ownership of leased assets transferred as financial lease, and all other leases as operating leases.
① Operating lease
During each period of the lease term, the company recognizes the lease receipts as lease income according to
the straight-line method, and the initial direct expenses incurred are capitalized and allocated on the same basis as
the lease income recognition, and are included in the current profits and losses by stages. The variable lease
payments related to operating leases that are not included in the lease receipts obtained by the company are
included in the current profits and losses when they actually occur.
② Financing lease
On the start date of the lease term, the company recognizes the receivable financing lease payments
according to the net lease investment (the sum of the unsecured residual value and the present value of the lease
receipts that have not been received at the start date of the lease term), and derecognizes the financing lease assets.
During each period of the lease term, the company calculates and recognizes the interest income according to the
interest rate included in the lease.
The variable lease payments obtained by the company that are not included in the measurement of net lease
investment are recorded into the current profits and losses when they actually occur.
3) After-sale leaseback
① Company as the Lessee
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
According to the Accounting Standards for Business Enterprises No.14-Income, the company evaluates and
determines whether the asset transfer in the after-sale leaseback transaction is a sale.
If the asset transfer in the after-sale leaseback transaction is a sale, the company shall measure the right-to-
use assets formed by the after-sale leaseback according to the part of the book value of the original assets related
to the right-to-use acquired by leaseback, and only recognize the related gains or losses for the rights transferred
to the lessor.
If the asset transfer in the after-sale leaseback transaction is not a sale, the company will continue to
recognize the transferred asset, and at the same time recognize a financial liability equal to the transfer income,
and conduct accounting treatment on the financial liability in accordance with Accounting Standards for Business
Enterprises No.22-Recognition and Measurement of Financial Instruments.
② Company as the Lessor
According to the Accounting Standards for Business Enterprises No.14-Income, the company evaluates and
determines whether the asset transfer in the after-sale leaseback transaction is a sale.
If the asset transfer in the after-sale leaseback transaction is a sale, the company shall conduct accounting
treatment on asset purchase according to other applicable accounting standards for enterprises, and conduct
accounting treatment on asset lease according to Accounting Standards for Enterprises No.21-Lease.
If the asset transfer in the after-sale leaseback transaction is not a sale, the company will not recognize the
transferred asset, but recognize a financial asset equal to the transfer income, and conduct accounting treatment on
the financial asset in accordance with Accounting Standards for Business Enterprises No.22-Recognition and
Measurement of Financial Instruments.
(2) Accounting Method for Financing Leases
43. Other significant accounting policies and estimates
(1)Work safety costs
The Company withdraws and includes work safety costs into relevant product costs or current profits and loss and
the subject of "special reserve" as per Measures for Management of Enterprise Withdrawal and Use of Work
Safety Costs (Cai Qi [2022] No.136) jointly promulgated by Ministry of Finance and State Administration of
Work Safety. As work safety costs withdrawn are used, ones attributable to the cost disbursement shall directly
offset special reserve. To form fixed assets, the disbursement incurred for inclusion into the subject of
"construction in progress" shall be recognized as fixed assets when safety projects are completed and available for
use as expected; meanwhile, costs for forming fixed assets shall offset special reserve, cumulative depreciation in
the corresponding amount shall be recognized and depreciation shall no longer be withdrawn for the fixed assets
in the following period.
（2）Accounting treatment methods related to repurchase of company shares
If the shares of the Company are acquired for reasons such as reducing the registered capital or rewarding
employees, they shall be treated as treasury shares according to the actual amount paid, and registered for future
reference. If the repurchased shares are cancelled, the difference between the total face value of the shares
calculated according to the face value of the cancelled shares and the number of cancelled shares and the amount
actually paid for the repurchase will be offset against the capital reserve; if the capital reserve is insufficient for
offset, the retained earnings will be offset; If rewarding of the repurchased shares to the employees of the
Company is equity-settled share-based payment, when the employees exercise their right to purchase the shares of
the Company and receive the price, the cost of the treasury stocks delivered to the employees and the accumulated
amount of capital reserves (other capital reserves) during the waiting period will be written off, and meanwhile,
the capital reserves (equity premium) will be adjusted according to such difference.
44.Change of main accounting policies and estimations
(1)Change of main accounting policies
√ Applicable □ Not applicable
Contents and causes of changes in accounting policies Approval procedure Remarks
Since January 1, 2022, the Company has implemented the provisions of the "No. 15
Interpretation of Accounting Standards for Business Enterprises" issued by the
Ministry of Finance "On the Accounting Treatment of Products or By-products
Produced by an Enterprise Before the Fixed Assets Are Reached the Predetermined
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Usable State or in the Process of R&D", and this change in accounting policy has no
impact on the Company's financial statements.
Since January 1, 2022, the Company has implemented the "No. 15 Interpretation of
Accounting Standards for Business Enterprises "on "Judgment on Loss-making
Contracts" issued by the Ministry of Finance, and this change in accounting policy has
no impact on the Company's financial statements.
Since November 30, 2022, the Company has implemented the provisions of the No. 16
Interpretation of Accounting Standards for Business Enterprises issued by the Ministry
of Finance on "Accounting for the Income Tax Treatment of Dividends Related to
Financial Instruments Classified by Issuers as Equity Instruments", and this change in
accounting policy has no impact on the Company's financial statements.
Since November 30, 2022, the Company has implemented the provisions of the No. 16
Interpretation of Accounting Standards for Business Enterprises issued by the Ministry
of Finance On the "Accounting Treatment of Enterprises Modifying Cash-settled
Share-Based Payments to Equity-Settled Share-Based Payments", and this change in
accounting policy has no impact on the Company's financial statements.
(2) Change of main accounting estimations
□ Applicable √ Not applicable
45.Other
VI. Taxation
1. Main categories and rates of taxes
Tax (expenses) Tax (expenses) base Tax (expenses) rate
The output tax is calculated on the basis of the income from sales of
goods and taxable services calculated according to the provisions of the
VAT 13%，9%，6%
tax law. After deducting the input tax allowed to be deducted in the
current period, the difference is the VAT payable
For those on price basis, taxes are paid at 1.2% of the balance of
House tax original value of the property after deducting of 30%; for those on 1.2%，12%
rental basis, taxes are paid at 12% of the rental.
City maintenance and
Turnover tax payable 7%，5%
construction tax
Educational surcharge Turnover tax payable 3%
Local education
Turnover tax payable 2%
additional
Enterprise income tax Amount of income taxable 15%，20%，25%
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Name Income tax rate
The Company , Guoneng Company, Packaged Tech. Company,Huayuan Company, ,Zhongneng
15%
Company ,Hangfa Company and Casting Company
Ranchuang Company, China mechanical and Electrical Institute -HSTG (Hangzhou) United
20%
Institutes Co., Ltd
Other Subsidiary（Domestic） 25%
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
2. Preferential tax
1). According to the document “Notice for Qualification of High-tech Enterprises” (GKHZD〔2020〕No.251)
issued by Department of Science and Technology High-tech Development Center, the Company along with
Guoneng Company , Packaged Tech Company, Huayuan Company, Zhongneng Company and Hangfa. – subsidies
of the Company, were qualified as high-tech enterprises for term of three years. As the result of the re-examination
on 2021 high-tech enterprises has not yet been determined, the corporate income tax is temporarily reduced at a
15% tax rate.
2).According to the "High-tech Enterprise Certificate" (Certificate number: GR202233002954, validity: three
years) issued by the Zhejiang Provincial Department of Science and Technology, the Zhejiang Provincial
Department of Finance and the Zhejiang Provincial Taxation Bureau of the State Administration of Taxation on
December 24, 2022, the subsidiary casting & forging company enjoys high-tech enterprise income tax incentives,
thus the enterprise income tax in 2022 shall be reduced to be 15%.
3.According to the Announcement on the Implementation of Preferential Income Tax Policies for Small and
Micro Enterprises and Individual Industrial and Commercial Households (No.12, 2021) issued by the Ministry of
Finance and the State Administration of Taxation, the preferential tax policies for small and low-profit enterprises
was applicable to subsidiary Ranchuang Turbine and China mechanical and Electrical Institute -HSTG (Hangzhou)
United Institutes Co., Ltd in 2021. If the annual taxable income does not exceed RMB 1 million, it would be
included in the taxable income at a reduced rate of 12.5%, and the enterprise income tax would be paid at the rate
of 20%.
3.Other
VII. Notes to the Consolidated Financial Statements
1.Monetary funds
In RMB
Items End of term Beginning of term
Cash in stock 107,551.80 65,904.06
Bank deposit 1,852,884,189.83 1,467,327,722.30
Other monetary fund 101,989,046.27 155,489,621.43
Total 1,954,980,787.90 1,622,883,247.79
Incl: Total of accounts saved overseas 7,989,643.89
Other note：
The bank deposit at the end of the period included RMB 47,973,000.00 of restricted pledge time deposit and RMB
19,000.00 of ETC deposit. Other currency funds at the end of the period included RMB 92,639,033.89 restricted-
use bank acceptance bill deposit, RMB 9,321,352.25 for deposit of letter of guarantee, the balance of the
unrestricted special account for treasury stock repurchase of RMB 5,701.86, the balance of the special account for
the purchase of convertible bonds of RMB 6.30 and the deposit interest of RMB 22,951.97 that 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
607,001,143.44 960,645,259.82
loss
Of which ：
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Of which ：Equity instrument investment 1,998,737.18 2,645,259.82
Financing product 605,002,406.26 958,000,000.00
Of which：
Total 607,001,143.44 960,645,259.82
Other note：
3. Derivative financial assets
4. Notes receivable
(1) Notes receivable listed by category
In RMB
Items End of term Beginning of term
Bank acceptance bill 42,622,891.99 179,088,740.17
Trade acceptance bill 52,990,035.27 35,958,200.92
Total 95,612,927.26 215,046,941.09
单位：元
End of term Beginning of term
Categor Book balance Bad debt provision Book balance Bad debt provision
y Book Book
Proportion( Proporti value Proportion( Proporti value
Amount Amount Amount Amount
%) %)
on(%) on(%)
Of
which：
Accrual
of bad
debt 106,144, 10,531,4 95,612,9 218,390, 3,343,29 215,046,
100.00% 9.92% 100.00% 1.53%
380.06 52.80 27.26 231.88 0.79 941.09
provisio
n by
portfolio
Of
which：
Bank
42,622,8 42,622,8 179,088, 179,088,
acceptan 40.16% 82.00%
91.99 91.99 740.17 740.17
ce
Commer
cial 63,521,4 10,531,4 52,990,0 39,301,4 3,343,29 35,958,2
59.84% 16.58% 18.00% 8.51%
88.07 52.80 35.27 91.71 0.79 00.92
acceptan
ce
106,144, 10,531,4 95,612,9 218,390, 3,343,29 215,046,
Total 100.00% 9.92% 100.00% 1.53%
380.06 52.80 27.26 231.88 0.79 941.09
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Accrual of bad debt provision by single item:
Amount in year-end
Name
Book Balance Bad debt provision Proportion(%) Reason
Accrual of bad debt provision by portfolio: 10,531,452.80
In RMB
Amount in year-end
Name
Book Balance Bad debt provision Proportion(%)
Bank acceptance 42,622,891.99
Commercial
63,521,488.07 10,531,452.80 16.58%
acceptance
Total 106,144,380.06 10,531,452.80
Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of
other receivables if the provision for bad debts of bills receivable is accrued according to the general model of
expected credit loss:
□ Applicable √ Not applicable
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision：
In RMB
Amount of change in the current period
Opening Reversed or
Category Write- Closing balance
balance Accrual collected Other
off
amount
Accrual of bad debt
3,343,290.79 7,188,162.01 10,531,452.80
provision by portfolio
Total 3,343,290.79 7,188,162.01 10,531,452.80
Of which the significant amount of the reversed or collected part during the reporting period
□ Applicable √ Not applicable
（3）Notes receivable pledged by the company at the end of the period
（4）Accounts receivable financing endorsed or discounted by the Company at the end of the period and not
expired yet on the date of balance sheet
In RMB
Amount derecognized at the end of the Amount not yet derecognized at the end of
Items
period the period
Bank acceptance 6,413,205.40
Commercial acceptance 11,130,774.54
Total 6,413,205.40 11,130,774.54
（5）Accounts receivable financing transferred to accounts receivable by the Company at the end of the period
due to failure of the drawer to perform
Other note：
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.
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
（6） The actual write-off accounts receivable
5. Accounts receivable
(1) Accounts receivable disclosed by category
In RMB
End of term Beginning of term
Category Book balance Bad debt provision Book balance Bad debt provision
Book Book
Proporti Proporti Proporti Proporti
Amount Amount value Amount Amount value
on % on % on % on %
Accrual of bad
74,459,0 74,459,0 77,191,5 77,191,5
debt provision 2.55% 100.00% 2.53% 100.00%
by single item 27.13 27.13 65.71 65.71
Including：
Accrual of bad
2,840,17 915,494, 1,924,67 2,979,74 981,796, 1,997,95
debt provision 97.45% 32.23% 97.47% 32.95%
by portfolio 4,129.98 762.90 9,367.08 6,652.43 531.73 0,120.70
Including：
2,914,63 989,953, 1,924,67 3,056,93 1,058,98 1,997,95
Total 100.00% 33.96% 100.00% 34.64%
3,157.11 790.03 9,367.08 8,218.14 8,097.44 0,120.70
Accrual of bad debt provision by single item：74,459,027.13
In RMB
Closing balance
Name Bad debt
Book balance Proportion Reason
provision
Xinjiang Altay Jinhao Iron Industry Co., Not expected to be
26,010,242.82 26,010,242.82 100.00%
Ltd recovered
Hangzhou New Concept Energy Saving Not expected to be
11,552,855.00 11,552,855.00 100.00%
Technology Co., Ltd recovered
Not expected to be
Dezhou Jinghua Group Zhenhua Co., Ltd. 10,980,000.00 10,980,000.00 100.00%
recovered
Qingdao Jieneng Steam Turbine Group Not expected to be
7,964,672.35 7,964,672.35 100.00%
Co., Ltd. recovered
Not expected to be
Qingdao Jieneng Material Trade Co., Ltd. 6,534,000.00 6,534,000.00 100.00%
recovered
Qingdao Jieneng Steam Turbine Co., Not expected to be
6,297,000.00 6,297,000.00 100.00%
Ltd.Hangzhou Company recovered
Sinosteel Tiancheng Environmental Not expected to be
2,459,550.00 2,459,550.00 100.00%
Protection Science & Technology Co., Ltd. recovered
Minhe Jinxing Hydropower Development Not expected to be
1,468,751.96 1,468,751.96 100.00%
Co., Ltd. recovered
Diebu Axia Hydropower Development Co., Not expected to be
1,132,000.00 1,132,000.00 100.00%
Ltd. recovered
Weifang Leinuote Power Equipment Co., Not expected to be
59,955.00 59,955.00 100.00%
Ltd. recovered
Total 74,459,027.13 74,459,027.13
Accrual of bad debt provision by portfolio: 915,494,762.90
Amount in year-end
Name
Book balance Bad debt provision Proportion
Within 1 year 1,088,113,527.42 54,405,676.37 5.00%
1-2 years 539,252,217.59 53,925,221.75 10.00%
2-3 years 409,886,653.36 122,965,996.01 30.00%
3-4 years 223,768,796.98 134,261,278.19 60.00%
4-5 years 146,081,720.26 116,865,376.21 80.00%
120
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Over 5 years 433,071,214.37 433,071,214.37 100.00%
Total 2,840,174,129.98 915,494,762.90
Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of
other receivables if the provision for bad debts of bills receivable is accrued according to the general model of
expected credit loss:
□ Applicable √ Not applicable
Disclosure by aging
In RMB
Aging Closing balance
Within 1 year（Including 1 year） 1,088,113,527.42
1-2 years 539,252,217.59
2-3 years 409,886,653.36
Over 3 years 877,380,758.74
3-4 years 223,768,796.98
4-5 years 146,081,720.26
Over 5 years 507,530,241.50
Total 2,914,633,157.11
(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 collected Write-off Other
amount
Accrual of bad debt
provision by single 77,191,565.71 462,838.60 3,195,377.18 74,459,027.13
item
Accrual of bad debt
981,796,531.73 -65,271,266.77 844,467.22 186,034.84 915,494,762.90
provision by portfolio
Total 1,058,988,097.44 -65,271,266.77 462,838.60 844,467.22 3,381,412.02 989,953,790.03
(3) The actual write-off accounts receivable
In RMB
Items Amount
Accrual of bad debt provision by portfolio 844,467.22
The significant actual write-off accounts receivable for the current period
In RMB
Arising from
Nature of account Amount written Reason for Verification
Name related transactions
receivable off written off procedures
(Y/N)
Uncollectible The examined and
Hanmen Daqian Thermal Power Co., Ltd. Goods 296,392.20 adopted to Board No
amount of directors
Uncollectible The examined and
Xinjiang Wensu Yongan Hydroelectricity
Goods 207,000.00 adopted to Board No
Development Co., Ltd.
amount od directors
Uncollectible The examined and
Hangzhou Steam Turbine Power Group
Goods 158,500.00 adopted to Board Yes
Co., Ltd.Southwest Branch
amount of directors
121
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Uncollectible The examined and
Other Goods 182,575.02 adopted to Board No
amount of directors
Total 844,467.22
Note：
（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 1 751,654,053.31 25.79% 199,008,158.71
Client 2 191,733,969.26 6.58% 113,264,290.47
Client 3 82,411,200.00 2.83% 4,120,560.00
Client 4 60,631,419.75 2.08% 13,161,015.39
Client 5 51,240,000.00 1.76% 2,562,000.00
Total 1,137,670,642.32 39.04%
（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
6. Financing of receivables
In RMB
Items End of term Beginning of term
Bank acceptance 817,555,768.45 816,653,211.21
Total 817,555,768.45 816,653,211.21
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) Notes receivable pledged by the Company at the end of the period
Items Pledged amount
Bank acceptance 143,516,310.23
Total 143,516,310.23
(2) Notes receivable which had endorsed by the Company or had discounted and had not due on the balance sheet
date at the period-end
In RMB
122
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Items Amount of recognition termination at the period-end
Bank acceptance 535,567,912.87
Total 535,567,912.87
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 367,741,841.11 91.59% 402,228,171.12 90.64%
1-2 years 13,954,754.79 3.48% 16,849,046.80 3.80%
2-3 years 2,556,543.70 0.63% 3,119,651.33 0.70%
Over 3 years 17,270,475.89 4.30% 21,573,565.66 4.86%
Total 401,523,615.49 443,770,434.91
Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time
(2) Top 5 of the closing balance of the prepayment collected according to the prepayment target
Name Amount
Proportion(%)
Siemens Energy AB 126,578,801.75 31.52
Siemens Energy Co., Ltd. 78,749,171.72 19.61
Mitsubishi Hitachi Electric Gas Engine Service (Nanjing) Co., Ltd 21,181,977.09 5.28
PROCARE PLUS LTD 16,122,035.57 4.02
Yixing Yuxiang Machinery Technology Co., Ltd. 11,232,000.00 2.80
Subtotal 253,863,986.13 63.23
Other
8. Other account receivable
In RMB
Items Closing balance Opening balance
Interest receivable
Dividend receivable
Other receivable 25,366,963.26 44,163,396.56
Total 25,366,963.26 44,163,396.56
（1）Interest receivable
1）Bad-debt provision
□ Applicable √ Not applicable
（2）Dividend receivable
1）Dividend receivable
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
2) Significant dividend receivable aged over 1 year
3）Bad-debt provision
□ 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
Accrual of bad debt provision by
25,366,963.26 44,163,396.56
portfolio:
Total 25,366,963.26 44,163,396.56
2）Bad-debt provision
In RMB
Stage 1 Stage 2 Stage 3
Expected credit losses
Expected credit losses Expected credit loss
Bad Debt Reserves for the entire duration Total
over the next 12 over life (no credit
(credit impairment
months impairment)
occurred)
Balance as at January 1, 2022 1,795,961.52 963,314.31 13,542,296.38 16,301,572.21
Balance as at January 1, 2022
in current
——Transfer to stage II -201,140.61 201,140.61
——Transfer to stage III -645,605.36 645,605.36
Provision in the current period -692,685.59 -116,568.34 -267,421.41 -1,076,675.34
Write - off in the current period 2,471,012.90 2,471,012.90
Other(Note) -1,230.43 -1,230.43
Balance as at December 31,
900,904.89 402,281.22 11,449,467.43 12,752,653.54
2022
[Note] Other changes are caused by the change of the merger scope and the bad debt provisions of the Indonesian
Company.
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） 18,018,097.76
1-2 years 4,022,812.16
2-3 years 6,456,053.57
Over 3 years 9,622,653.31
3-4 years 173,504.87
4-5 years 203,000.00
Over 5 years 9,246,148.44
Total 38,119,616.80
124
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
3) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision：
In RMB
Opening Amount of change in the current period
Category Closing balance
balance Reversed or
Accrual Write-off Other
collected amount
Accrual of bad debt - -
16,301,572.21 2,471,012.90 12,752,653.54
1,076,675.34 1,230.43
provision by portfolio:
- -
Total 16,301,572.21 2,471,012.90 12,752,653.54
1,076,675.34 1,230.43
4) The actual write-off accounts receivable
In RMB
Items Amount
Accrual of bad debt provision by portfolio: 2,471,012.90
The significant actual write-off other accounts receivable for the current period
In RMB
Nature of account Amount written Reason for Verification Arising from related
Name
receivable off written off procedures transactions (Y/N)
The examined
Wuhan Huazhong Automatic Receivable temporary Uncollectible and adopted to
2,331,000.00 No
Technology Development Co., Ltd payment amount Board of
directors
The examined
Uncollectible and adopted to
Other Deposit 140,012.90 No
amount Board of
directors
Total 2,471,012.90
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 year end Closing balance
Name Nature Closing balance Aging balance of the of bad debt
accounts provision
receivable
Equity transfer
PT.HANGZHOUTURBINE
payment 4,120,000.00 Within 1 year 10.81% 206,000.00
SERVICES
receivable
Shanghai Customs Waigaoqiao Office Deposit 3,710,320.94 Over 5 years 9.73% 3,710,320.94
Hangzhou Chisu Trade Co., Ltd. Deposit 2,848,700.00 2-3 years 7.47% 854,610.00
Hangzhou Chisu Trade Co., Ltd. Deposit 2,300,000.00 1-2 years 6.03% 230,000.00
Ningxia Baofeng Energy Group Co.,
Deposit 1,700,000.00 (Note) 4.46% 260,000.00
Ltd.
Total 14,679,020.94 38.50% 5,260,930.94
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
[Note] Within 1 year:1,000,000.00 yuan, 2-3 years:700,000.00 yuan.
6) Accounts receivable involved with government subsidies
7) Other account receivable which terminate the recognition owning to the transfer of the financial assets
8) The amount of the assets and liabilities formed by the transfer and the continues involvement of other accounts
receivable
Other note：
9. Inventories
Whether the company need to comply with the disclosure requirements of the real estate industry
No
（1）Category of Inventory
In RMB
Closing book balance Opening book balance
Provision for Provision for
Items inventory inventory
Book balance Book value Book balance Book value
impairment impairment
Raw
762,193,831.50 77,637,312.67 684,556,518.83 1,292,125,192.43 107,518,112.95 1,184,607,079.48
materials
Goods in
1,019,899,099.40 74,567,968.42 945,331,130.98 871,173,637.50 62,010,483.80 809,163,153.70
progress
Stock
834,710,221.13 142,136,584.42 692,573,636.71 1,189,125,044.23 141,251,530.06 1,047,873,514.17
goods
Total 2,616,803,152.03 294,341,865.51 2,322,461,286.52 3,352,423,874.16 310,780,126.81 3,041,643,747.35
(2) Falling price reserves of inventory
In RMB
Increased amount Decreased amount
Items Opening balance Reverse
Closing balance
Withdrawal or write- Reverse or write-off Other
off
Raw
107,518,112.95 5,503,175.08 35,383,975.36 77,637,312.67
materials
Goods in
62,010,483.80 12,622,976.89 65,492.27 74,567,968.42
progress
Stock
141,251,530.06 14,225,848.44 13,340,794.08 142,136,584.42
goods
Total 310,780,126.81 32,352,000.41 48,790,261.71 294,341,865.51
The specific basis for determining the net realizable value, and the reasons for reversing or reselling the inventory
depreciation reserve in the current period
Items Current write-off Reason for provision for
Specific basis for determining net realizable value
inventory
The net realizable value shall be recognized by the amount of the
Used for current production and use and
Raw materials estimated selling prices minus the estimated selling costs and relevant
sales realization
taxes and dues
The net realizable value determines the amount after deducting the Used for current production and use and
Goods in process
estimated sales cost and the relevant taxes realization
126
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
The net realizable value shall be recognized by the amount of the
estimated selling prices minus the estimated selling costs and relevant
taxes and dues, wherein regarding suspended projects expected not be to Used for current production and use and
Commodity stocks
be recovered or projects whose sales agreements are released, the net sales realization
realizable value shall be recognized by the expected recoverable
compensation
(3) Notes of the closing balance of the inventory which includes capitalized borrowing expenses
(4) Completed unsettled assets formed from the construction contact at the period-end
10.Contact assets
In RMB
Year-end balance Year-beginning balance
Items
Bad debt Bad debt
Book balance Book value Book balance Book value
provision provision
Quality guarantee 577,093,698.74 44,818,828.73 532,274,870.01 564,548,403.36 53,513,171.70 511,035,231.66
The construction
contract forms the 63,333,343.14 7,888,477.69 55,444,865.45 79,560,175.93 7,568,757.60 71,991,418.33
assets
Total 640,427,041.88 52,707,306.42 587,719,735.46 644,108,579.29 61,081,929.30 583,026,649.99
Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of
other receivables if the provision for bad debts of contract assets is accrued according to the general model of
expected credit loss:
□ Applicable √Not applicable
Provision for impairment of contract assets in the current period
In RMB
Reversal/write-off in
Items Current accrual Change amount Reason
current period
Accrual by single item 462,838.60
Accrual by portfolio -7,911,784.28 Accrual by aging
Total -7,911,784.28 462,838.60 ——
Other note：[Note] Other reduction in the provision for impairment in this period is caused by the transfer of
warranty guarantee into accounts receivable.
Contract assets with impairment provision in combination
Items End of term
Book balance Impairment provision Accrual proportion (%)
Aging portfolio 640,427,041.88 52,707,306.42 8.23
Subtotal 640,427,041.88 52,707,306.42 8.23
11. Assets divided as held-to-sold
12. Non-current assets due within 1 year
13. Other current assets
In RMB
Items End of term Beginning of term
Input tax deductible 51,338,998.29 34,506,442.84
127
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Prepaid income tax 26,920,714.32 30,524,440.80
Rent charge 690,018.87 1,144,067.78
Total 78,949,731.48 66,174,951.42
Other note
14.Creditor's right investment
15.Other creditor's rights investment
16. Long-term accounts receivable
(1) List of long-term accounts receivable
In RMB
Closing balance Opening balance
Provision for Provision for Discount rate
Items inventory inventory
Book balance Book value Book balance Book value interval
impairment impairment
106,022,203. 28,481,110.3 77,541,093.0 205,022,203. 51,281,110.1 153,741,093.
Project item
37 4 3 37 7 20
106,022,203. 28,481,110.3 77,541,093.0 205,022,203. 51,281,110.1 153,741,093.
Total
37 4 3 37 7 20
(2) Long-term accounts receivable which terminate the recognition owning to the transfer of the financial assets
(3) The amount of the assets and liabilities formed by the transfer and the continues involvement of long-term
accounts receivable
Other note
1)Changes in bad debt reserves
Closing balance
Type Book balance Bad debt provision
Book value
Amount Proportion % Amount Proportion %
Accrual by single item 41,600,000.00 39.24 24,960,000.00 60.00 16,640,000.00
Accrual by portfolio 64,422,203.37 60.76 3,521,110.34 5.47 60,901,093.03
Total 106,022,203.37 100.00 28,481,110.34 26.86 77,541,093.03
（Continued)
Beginning of term
Type Book balance Bad debt provision
Book value
Amount Proportion % Amount Proportion %
Accrual by single item 74,600,000.00 36.39 44,760,000.00 60.00 29,840,000.00
Accrual by portfolio 130,422,203.37 63.61 6,521,110.17 5.00 123,901,093.20
Total 205,022,203.37 100.00 51,281,110.17 25.01 153,741,093.20
2) Long-term receivables for individual bad debt provision at the end of the period
Name Book balance Bad debt provision Proportion % Reason
128
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Name Book balance Bad debt provision Proportion % Reason
Changzhi Yiyang Energy
41,600,000.00 24,960,000.00 60.00 Overdue
Technology Co.,Ltd.
Subtotal 41,600,000.00 24,960,000.00 60.00
3) Other receivables with overdue debt provision to for overdue debt provision
Closing balance
Age
Book balance Bad debt provision Proportion %
Not overdue 58,422,200.00 2,921,110.00 5.00
One year overdue 6,000,003.37 600,000.34 10.00
Subtotal 64,422,203.37 3,521,110.34 5.47
(4) The bad debt provision：
Increased amount Decreased amount
Opening Closing
Items write-
balance Withdraw recover Other Switch back Other balance
off
Accrual by single
44,760,000.00 19,800,000.00 24,960,000.00
item
-
Accrual by portfolio 6,521,110.17 3,521,110.34
2,999,999.83
-
Total 51,281,110.17 19,800,000.00 28,481,110.34
2,999,999.83
[Note] Mainly due to the recovery of 33.3 million yuan of long-term receivables in the current period
correspondingly resulted in reverse of 19.8 million yuan for provision to bad debts.
17. Long-term equity investment
18. Other equity instruments investment
In
RMB
Items End of term Beginning of term
Hangzhou Bank 3,556,127,694.48 3,485,440,140.92
Total 3,556,127,694.48 3,485,440,140.92
Itemized disclosure of the current non - trading equity instrument investment
In RMB
Reasons for
Amount of other other
Reasons for being
comprehensive comprehensive
Recognized measured at fair value
Accumulating Accumulating income
Name dividend
profit profit transferred to
and whose changes are income
income included in other transferred to
retained
comprehensive income retained
earnings
earnings
The shares of Hangzhou
Bank Co., Ltd. held by
the company cannot
Hangzhou pass the contract cash
95,156,322.10
Bank flow characteristic test,
but the company does
not hold the equity
instrument for the
129
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
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 fair value and whose changes are i
5,534,773.22 14,792,533.96
ncluded in the current profit and loss
Total 5,534,773.22 14,792,533.96
Other note
(2) Detail
Increase /decrease
Change
Opening in fair
Investees Additional Decrease in value Other comprehensive
balance
investment investment gains adjustment to revenue
and
losses
Actions Xinxing No.9 Private 9,120,000.00 9,120,000.00
Equity Fund
Greenesol power systems PVT Ltd. 5,534,773.22
Heilongjiang Multi-Power
Hydropower Development United 137,760.74 137,760.74
Company
Total 14,792,533.96 9,257,760.74
(Continued)
Increase /decrease Closing
Closing balance of
Investees Other equity
Other balance impairment
changes provision
Actions Xinxing No.9 Private
Equity Fund
Greenesol power systems PVT 5,534,773.22
Ltd.
Heilongjiang Multi-Power
Hydropower Development
United Company
Total 5,534,773.22
20. Investment real estate
(1) Investment real estate adopted the cost measurement mode
√Applicable □ Not applicable
In RMB
130
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Construction
Items House, Building Land use right Total
in process
I. Original price
1. Balance at period-beginning 10,169,000.55 10,169,000.55
2.Increase in the current period
(1) Purchase
（2）Inventory \ fixed assets \ project under
construction transfer
(3)Increased of Enterprise Combination
3.Decreased amount of the period
（1）Dispose
（2）Other out
4. Balance at period-end 10,169,000.55 10,169,000.55
II.Accumulated amortization
1.Opening balance 3,265,014.48 3,265,014.48
2.Increased amount of the period 452,507.52 452,507.52
(1) Withdrawal 452,507.52 452,507.52
3.Decreased amount of the period
（1）Dispose
（2）Other out
4. Balance at period-end 3,717,522.00 3,717,522.00
III. Impairment provision
1. Balance at period-beginning
2.Increased amount of the period
(1) Withdrawal
3.Decreased amount of the period
（1）Dispose
（2）Other out
4. Balance at period-end
IV. Book value
1.Book value at period -end 6,451,478.55 6,451,478.55
2.Book value at period-beginning 6,903,986.07 6,903,986.07
(2) Investment property adopted fair value measurement mode
□Applicable√ Not applicable
(3) Investment real estate without certificate of ownership
In RMB
Items Book balance Reason
Other note
131
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
The investment real estate at the end of the period includes the resettlement housing with a book value of RMB 6,
437,491.19 that cannot be reformed. The housing reform is due to the demolition and relocation of the dormitory a
rea of the subsidiary Hangfa Company in 2021. Other places participated in the housing reform and other reasons ,
and the property rights of the relevant houses belonged to the Company.
21. Fixed assets
In RMB
Items Year-end balance Year-beginning balance
Fixed assets 1,926,594,610.89 1,658,423,191.83
Total 1,926,594,610.89 1,658,423,191.83
(1) List of fixed assets
In RMB
Houses & Machinery Office
Items Transportations Total
buildings equipment equipment
I. Original price
1.Opening balance 1,272,821,651.03 1,185,284,037.75 35,630,594.79 142,381,639.80 2,636,117,923.37
2.Increased amount of the period 323,961,879.02 65,410,656.28 1,576,133.10 7,210,934.67 398,159,603.07
(1) Purchase 600,921.71 4,655,891.52 1,576,133.10 2,690,471.78 9,523,418.11
(2) Transferred from construction in progress 323,360,957.31 60,754,764.76 4,520,462.89 388,636,184.96
(3)Increased of Enterprise Combination
3.Decreased amount of the period 7,304,783.73 4,496,577.29 4,316,756.22 16,118,117.24
（1）Disposal 6,146,760.01 4,084,890.29 4,067,745.73 14,299,396.03
(2) Relocation transfer 1,158,023.72 411,687.00 249,010.49 1,818,721.21
4. Balance at period-end 1,596,783,530.05 1,243,389,910.30 32,710,150.60 145,275,818.25 3,018,159,409.20
II. Accumulated depreciation
1.Opening balance 166,994,903.91 735,011,582.39 26,282,937.95 37,140,970.93 965,430,395.18
2.Increased amount of the period 44,731,334.08 67,934,774.40 2,224,233.15 13,433,219.74 128,323,561.37
(1) Withdrawal 44,731,334.08 67,934,774.40 2,224,233.15 13,433,219.74 128,323,561.37
3.Decreased amount of the period 6,365,987.48 4,019,240.42 4,065,680.54 14,450,908.44
（1）Disposal 5,464,280.71 3,686,303.64 3,819,929.60 12,970,513.95
(2) Relocation transfer 901,706.77 332,936.78 245,750.94 1,480,394.49
4.Closing balance 211,726,237.99 796,580,369.31 24,487,930.68 46,508,510.13 1,079,303,048.11
III. Impairment provision
1.Opening balance 9,028,267.09 3,235,354.11 715.16 12,264,336.36
2.Increase in the reporting period
（1）Withdrawal
3.Decreased amount of the period 1,871.00 715.16 2,586.16
（1）Disposal 1,871.00 715.16 2,586.16
4. Closing balance 9,028,267.09 3,233,483.11 12,261,750.20
IV. Book value
1.Book value of the period-end 1,376,029,024.97 443,576,057.88 8,222,219.92 98,767,308.12 1,926,594,610.89
2.Book value of the period-begin 1,096,798,480.03 447,037,101.25 9,347,656.84 105,239,953.71 1,658,423,191.83
132
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(2) Fixed assets temporarily idled
⑶Fixed assets leased out through operating leases
（4）Details of fixed assets failed to accomplish certification of property
In RMB
Items Book value Reason
Steam Turbine Heavy Industry Plant -
43,117,019.15 In the process
Complete sets of factory
Other note
（5）Liquidation of fixed assets
22. Construction in progress
In RMB
Items End of term Beginning of term
Construction in progress 286,290,854.97 517,835,956.11
Total 286,290,854.97 517,835,956.11
(1) List of construction in progress
In RMB
End of term Beginning of term
Items Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
New Plant project 161,344,450.28 161,344,450.28 493,629,477.17 493,629,477.17
Annual output of 10
sets of gas turbine unit 81,700,278.09 81,700,278.09
project
Software project 13,362,743.79 13,362,743.79 11,327,261.17 11,327,261.17
Other project 27,285,325.58 27,285,325.58 9,356,085.45 9,356,085.45
Prepayment for
2,598,057.23 2,598,057.23 3,523,132.32 3,523,132.32
equipment or projects
Total 286,290,854.97 286,290,854.97 517,835,956.11 517,835,956.11
(2)Changes of significant construction in progress
In RMB
Includi
ng
Capital
g:
Capital iz
Budget Transf capital
Openi Other iz ation Source
erred End Project iz
（0'00 ng Increas decrea Propor ation of of
Name of project to balanc proces ation
0 balanc e se(Not tion % of interes fundin
fixed e s of
） e
assets
e) interes
interes
t g
t rate
t
(%)
this
period
133
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
493,62 337,39 161,34 Under
New Plant 173,32 5,106, 96.05 9,819,
9,477. 1,501. 4,450. constr 1.20% Other
project 8.76 474.88 % 482.47
17 77 28 uction
Annual output of
81,700 81,700 Under
10 sets of gas 50,000 16.34
,278.0 ,278.0 constr Other
turbine unit .00 %
9 9 uction
project
11,327 13,362
8,501, 6,465,
Software project ,261.1 ,743.7 Other
111.88 629.26
7 9
Photovoltaic
36,157 36,157
power 3,615. 100.00 Coom
,319.2 ,319.2 Other
generation 73 % pleted
3 3
project
30,235 12,306 27,285
9,356,
Other project ,463.9 ,223.8 ,325.5 Other
085.45
7 4 8
Prepayment for
3,523, 1,856, 2,781, 2,598,
equipment or Other
projects 132.32 065.03 140.12 057.23
517,83 163,55 388,63 286,29
226,94 6,465, 9,819,
Total 5,956. 6,713. 6,184. 0,854.
4.49 629.26 482.47
11 08 96 97
[Note] Other reductions in the current period are the software cost of intangible assets after the completion.
(3) List of the withdrawal of the impairment provision of the construction in progress
（4）Engineering material
23. Productive biological assets
(1) Productive biological assets measured at cost methods
□ Applicable √ Not applicable
(2) Productive biological assets measured at fair value
□ Applicable √ Not applicable
24. Oil and gas assets
□ Applicable √ Not applicable
25. Right to use assets
In RMB
Items House and Building Mechanical equipment Total
I. Original price
1. Balance at period-
38,107,952.73 38,107,952.73
beginning
2.Increase in the current
9,859,326.72 391,374.21 10,250,700.93
period
（1）Rent 9,859,326.72 391,374.21 10,250,700.93
3.Decreased amount of
1,190,879.29 1,190,879.29
the period
(1)Disposition 1,190,879.29 1,190,879.29
4. Balance at period-end 46,776,400.16 391,374.21 47,167,774.37
134
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
II. Accumulated depreciation
1.Opening balance 7,670,173.81 7,670,173.81
2.Increased amount of the
12,386,849.44 195,687.12 12,582,536.56
period
(1) Withdrawal 12,386,849.44 195,687.12 12,582,536.56
3.Decreased amount of the
1,190,879.29 1,190,879.29
period
（1）Disposal 1,190,879.29 1,190,879.29
4.Closing balance 18,866,143.96 195,687.12 19,061,831.08
III. Impairment provision
1.Opening balance
2.Increase in the reporting
period
（1）Withdrawal
3.Decreased amount of the
period
（1）Disposal
4. Closing balance
IV. Book value
1.Book value of the period-
27,910,256.20 195,687.09 28,105,943.29
end
2.Book value of the period-
30,437,778.92 30,437,778.92
begin
Other note：
26. Intangible assets
(1) Information
In RMB
Items Land using right Patent Non patent technology Software Total
I. Original price
1. Balance at period-beginning 324,343,159.25 344,087.43 8,000,000.00 17,789,263.58 350,476,510.26
2.Increase in the current period 8,836,626.55 8,836,626.55
(1) Purchase 8,836,626.55 8,836,626.55
(2)Internal Development
(3)Increased of Enterprise
Combination
3.Decreased amount of the
period
（1）Disposal
4.Closing balance 324,343,159.25 344,087.43 8,000,000.00 26,625,890.13 359,313,136.81
II.Accumulated amortization
1.Opening balance 60,801,350.97 276,219.94 5,266,666.91 6,662,565.20 73,006,803.02
2.Increased amount of the period 6,505,466.93 7,611.42 800,000.04 4,148,466.93 11,461,545.32
135
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(1) Withdrawal 6,505,466.93 7,611.42 800,000.04 4,148,466.93 11,461,545.32
3.Decreased amount of the
period
（1）Disposal
4.Closing balance 67,306,817.90 283,831.36 6,066,666.95 10,811,032.13 84,468,348.34
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 257,036,341.35 60,256.07 1,933,333.05 15,814,858.00 274,844,788.47
2.Opening book value 263,541,808.28 67,867.49 2,733,333.09 11,126,698.38 277,469,707.24
The proportion the intangible assets formed from the internal R&D through the Company amount the balance of
the intangible assets at the period-end.
(2) Details of fixed assets failed to accomplish certification of land use right
27. .Development expenses
28. Goodwill
(1) Original book value of goodwill
（2）Impairment of goodwill
29. Long term amortize expenses
30. Deferred income tax assets/deferred income tax liabilities
（1）Details of the un-recognized deferred income tax assets
In RMB
Balance in year-end Balance in year-begin
Items
Deductible Deferred income Deductible Deferred income
temporary difference tax assets temporary difference tax assets
Provision for Asset Impairment 1,245,922,022.12 197,517,063.24 1,356,205,463.61 215,697,910.21
Internal trade profit not realized 21,474,851.24 3,221,227.69 58,598,289.97 8,789,743.49
Revenue from changes in fair value
generated by financial assets classified 870,485.96 130,572.89 7,103,959.98 1,065,594.00
at fair value through profit or loss
Temporary difference such as 99,651.17 14,947.68
136
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
amortizing of software expense
Relocation compensation 1,005,531,878.82 151,865,228.79 1,041,307,329.87 157,097,084.29
Total 2,273,799,238.14 352,734,092.61 2,463,314,694.60 382,665,279.67
[Note] Includes the relocation compensation of the Company and the machinery compan
(2) Deferred income tax liabilities had not been off-set
In RMB
Balance in year-end Balance in year-begin
Items Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference liabilities difference liabilities
Changes in fair value
of investments in other 3,165,173,654.48 474,776,048.17 3,094,486,100.92 464,172,915.14
equity instruments
Accelerated 219,773.45 32,966.02
depreciation of fixed
assets
Total 3,165,393,427.93 474,809,014.19 3,094,486,100.92 464,172,915.14
（3）Deferred income tax assets and liabilities are presented as net amount after neutralization
In RMB
Temporarily
Deferred Income Tax Temporarily Deferred Income Tax
Deductable or Taxable
Assets or Liabilities at Deductable or Taxable Assets or Liabilities at
Items Difference at the
the End of Report Difference at the End the Beginning of
Beginning of Report
Period of Report Period Report Period
Period
Deferred income tax
352,734,092.61 382,665,279.67
assets
Deferred income tax
474,809,014.19 464,172,915.14
liabilities
(4)Details of income tax assets not recognized
In RMB
Items End of term Beginning of term
Deductible temporary difference
155,107,906.71 157,834,999.47
Deductible loss
123,070,154.92 166,619,930.21
Total 278,178,061.63 324,454,929.68
(5) The un-recognized deductible losses of deferred income tax assets will due in the following years:
In RMB
Year Balance in year-end Balance in year-begin Remark
2022 10,928,264.99
2023 10,388,277.67 14,149,816.48
2024 26,189,768.32 23,524,220.73
2025 5,397,758.37 2,773,270.33
2026 12,109,526.82 44,870,965.65
2027 2,554,125.34 1,036,145.13
2028 0.00 1,545,297.07
2029 4,137,298.09 6,802,845.68
2030 0.00 3,914,057.03
2031 46,982,771.08 57,075,047.12
2032 15,310,629.23
Total 123,070,154.92 166,619,930.21
137
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Other note
31 .Other non-current assets
In RMB
Balance in year-end Balance in year-begin
Items Book Provision Book value Book Provision Book value
balance for balance for
devaluation devaluation
31,572,954 31,572,954
Advance equipment payment
.47 .47
13,350,000 13,350,000
Advance land payable
.00 .00
44,922,954 44,922,954
Total
.47 .47
Other note
32. Short-term borrowings
（1）Categories of short-term loans
In RMB
Items
End of term Beginning of term
Mortgage Borrowings 50,059,115.83 74,897,015.73
Guarantee Borrowing 70,059,711.17 170,163,630.75
Credit borrowing 155,634,400.89 5,005,273.97
Domestic letter of credit discount loan 12,000,000.00
Total 287,753,227.89 250,065,920.45
Note：
(2) List of the short-term borrowings overdue but not return
33. Transactional financial liabilities
34. Derivative financial liability
35.Notes payable
In RMB
Items
End of term Beginning of term
Commercial acceptance bill 8,000,000.00 7,500,000.00
Bank acceptance bill 403,886,347.73 301,904,319.27
Total 411,886,347.73 309,404,319.27
The total amount of outstanding notes payable at the end of this period is RMB .
138
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
36. Accounts payable
(1) List of accounts payable
In RMB
Items
End of term Beginning of term
Goods 1,050,477,495.94 1,709,868,854.24
Equipment and Engineering 140,729,051.34 186,363,724.44
Other 11,709,180.01 13,917,609.46
Total 1,202,915,727.29 1,910,150,188.14
(2) Notes of the accounts payable aging over one year
37. Advances received
(1) List of Advances received
In RMB
Items
End of term Beginning of term
Rent 230,204.48 812,701.37
Total 230,204.48 812,701.37
(2) Notes of the accounts payable aging over one year
38.Contract liabilities
In RMB
Items
End of term Beginning of term
Goods 2,306,912,441.68 3,052,515,293.06
Total 2,306,912,441.68 3,052,515,293.06
39.Payable Employee wage
(1) List of Payroll payable
In RMB
Balance in year- Increase in this Payable in this Balance in year-
Items
begin period period(Note) end
I. Short-term compensation 99,276,656.74 911,420,247.64 910,642,301.53 100,054,602.85
II.Post-employment benefits -
33,845,853.18 121,962,082.03 116,847,864.48 38,960,070.73
defined contribution plans
III. Dismissal benefits 1,005,045.84 1,005,045.84
Total 133,122,509.92 1,034,387,375.51 1,028,495,211.85 139,014,673.58
[Note] The short-term salary of the Indonesian company is RMB 2,410.13,4..
（2）Short-term remuneration
In RMB
Balance in year- Increase in this Decrease in this Balance in year-
Items
begin period period end
(1) Salary, bonus, allowance and
82,689,765.59 712,280,561.79 707,392,082.09 87,578,245.29
subsidy
(2) Employee benefits 50,239,108.20 50,239,108.20
139
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(3) Social insurance expenses 8,702,497.23 61,362,582.76 62,509,036.82 7,556,043.17
Including: medical insurance
8,556,657.77 58,548,976.28 59,813,751.88 7,291,882.17
premium
Work-related injury insurance
145,839.46 2,813,606.48 2,695,284.94 264,161.00
premium
(4) Housing fund 458,552.96 74,911,731.37 74,912,020.37 458,263.96
(5) Labor union expenditures and
7,425,840.96 12,626,263.52 15,590,054.05 4,462,050.43
employee education expenses
Total 99,276,656.74 911,420,247.64 910,642,301.53 100,054,602.85
(3) List of drawing scheme
In RMB
Items Opening balance Increase Decrease Closing balance
1.Basic pension
7,365,213.63 85,969,623.37 86,119,647.96 7,215,189.04
insurance
2. Unemployment
263,041.82 3,061,757.66 3,074,731.52 250,067.96
insurance
3. Enterprise annual fee 26,217,597.73 32,930,701.00 27,653,485.00 31,494,813.73
Total 33,845,853.18 121,962,082.03 116,847,864.48 38,960,070.73
Other note
40. Taxes Payable
In RMB
Items End of term Beginning of term
VAT 26,831,710.72 40,924,370.15
19,296,080.94 17,886,118.76
Enterprise Income tax
Property tax 14,880,121.69 7,532,910.03
Individual Income tax 3,947,213.74 2,870,186.04
Land use tax 3,836,290.15 1,912,650.90
City Construction tax 2,081,991.58 5,687,507.47
Education subjoin 941,347.25 2,485,447.07
Locality Education subjoin 632,108.09 1,666,388.01
Other 938,259.93 656,799.67
Total 73,385,124.09 81,622,378.10
Other note：
41.Other account payable
In RMB
Items End of term Beginning of term
Dividend payable 90,000.00
Other account payable 203,698,336.85 434,578,338.13
Total 203,788,336.85 434,578,338.13
140
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
（1) Interest payable
(2) Dividends payable
In RMB
Items End of term Beginning of term
Research Institute of Mechanical
90,000.00
Science, Zhejiang Branch Co., Ltd
Total 90,000.00
Note: Including significant unpaid dividends payable over one year, the unpaid reason shall be disclosed:
(3) Other accounts payable
(1) Other accounts payable listed by nature of the account
In RMB
Items End of term Beginning of term
Restricted stock subscription funds(Note) 100,222,346.86 110,195,995.86
Provisional account payable 92,141,265.66 73,387,357.24
Deposit 8,650,506.77 7,710,407.05
Other 2,684,217.56 3,284,577.98
Related party demolition loan 240,000,000.00
Total 203,698,336.85 434,578,338.13
[Note] It is the accumulated restricted stock subscription payment paid by the equity incentive object during the
waiting period.
2）Significant other payables for over 1 year
42. Liabilities classified as holding for sale
43. Non-current liabilities due within 1 year
In RMB
Items End of term Beginning of term
Long-term loans due within 1 year 30,637,507.55 9,011,464.45
Rease liabilities due within 1 year 12,165,379.31 8,596,258.52
Total 42,802,886.86 17,607,722.97
Other note：
44. Other current liabilities
In RMB
Items End of term Beginning of term
Output tax to be transferred 266,480,963.69 394,535,629.47
Maintenance and renovation costs 1,105,000.00 1,105,000.00
Total 267,585,963.69 395,640,629.47
Other note
141
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
45. Long-term borrowing
(1) Category of long-term loan
In RMB
Items End of term Beginning of term
Mortgage loan 9,711,173.86 20,624,674.22
Guarantee loan 150,192,500.00 160,205,333.33
Total 159,903,673.86 180,830,007.55
Note：
Other notes，including interest rate range：
46. Bonds payable
(1) Bonds payable
(2) Changes on bonds payable (not including other financial instrument classified as preferred stock and perpetual
capital securities of financial liabilities)
(3) Note to conditions and time of share transfer of convertible bonds
(4) Note to other financial instrument classified as financial liabilities
47. Lease liability
In RMB
Items End of term Beginning of term
Unpaid lease payments 17,206,632.59 24,310,879.76
Less：Financing charges are not
872,609.49 1,735,124.99
recognized
Total 16,334,023.10 22,575,754.77
Other note
48. Long-term payable
In RMB
Items End of term Beginning of term
Long term account payable 330,000.00 330,000.00
Special Payable 10,774,088.21 7,249,677.56
Total 11,104,088.21 7,579,677.56
(1) Long-term payable listed by nature of the account
In RMB
Items End of term Beginning of term
Drawing in administrative
330,000.00 330,000.00
restructuring
Subtotal 330,000.00 330,000.00
(2) Special Payable
142
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
In RMB
Items Opening balance Increase Decrease End balance Reason
Compensation for
2,040,646.71 197,297,786.03 196,840,220.54 2,498,212.20
relocation
Funding for Personnel
3,185,102.53 3,930,000.00 880,154.84 6,234,947.69
Training
Simple dormitory area
demolition and 2,023,928.32 17,000.00 2,040,928.32
resettlement
Total 7,249,677.56 201,244,786.03 197,720,375.38 10,774,088.21
Other note：
1.The reduction of compensation for land requisition and relocation in the current period is caused by the carry-
over of compensation for land requisition and relocation, in which the corresponding part of the relocation cost of
RMB 16,150,800.00 in the current period is transferred to other income, and the corresponding part of the fixed
assets of RMB 180,689,420.54 in the new factory area put into use in the current period is transferred to deferred
revenue, as shown in Note X,XVI(8)2 to this Financial Statement.
2. Resettlement payment mainly refers to the compensation and resettlement transition fee saved during the
demolition and housing reform of the family dormitory area of the subsidiary, Hangfa Company.
49. Long term payroll payable
(1) List of long term payroll payable
(2) Changes of defined benefit plans
50. Estimated liabilities
51. Deferred income
In RMB
Increased this Decreased this
Items Beginning of term End of term Reason
period period
Receive
Government
729,438,751.74 199,510,020.54 51,567,642.43 877,381,129.85 government
Subsidy subsidies
Total 729,438,751.74 199,510,020.54 51,567,642.43 877,381,129.85 --
Items involved in government subsidies:：
In RMB
Amount of newly Amount accrued Related to the
Items Opening balance Other changes Closing balance
subsidy in non-business assets/income
Other note:
Note：Please refer to Note X (7) 84 of the Financial Statements for details of the amount of government
subsidies included in the current profits and losses.
52. Other non-current liabilities
53. Stock capital
In RMB
Balance Year- Increase/decrease this time (+ , - ) Balance year-
beginning Issuing of Transferred end
Bonus shares Other Subtotal
new share from reserves
Total of
754,010,400.00 226,169,580.00 226,169,580.00 980,179,980.00
capital
143
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
shares
Other note
According to the "2021 Annual Profit Distribution Plan" adopted by the resolution of the 2021 Annual General
Meeting of Shareholders, this equity distribution was based on the total share capital of 754,010,400 shares at the
end of 2021, excluding the repurchased 111,800 treasury shares by the Company as of the record date of the
equity distribution, that was, the 753,898,600 shares was the basis, it distributed a cash dividend of 4.0 yuan per
10 shares (including tax) and 3 bonus shares (including tax) to all shareholders . The receipt of the above-
mentioned new registered capital has been verified by Zhejiang Southern Accounting Firm Co., Ltd, and the
"Capital Verification Report" (No. 012 [2022] Nanfang Yanzi) has been issued, and the Company has completed
the industrial and commercial change registration procedures on September 5, 2022.
54. Other equity instruments
(1) Basic information of preferred stock, perpetual capital securities and other financial instruments outstanding
issued at period-end
(2) Change list of preferred stock, perpetual capital securities and other financial instruments outstanding issued at
period-end
55. Capital reserves
In RMB
Year-beginning Increase in the current Decrease in the current Year-end balance
Items
balance period period
Capital premium 204,650,998.01 57,888,141.49 262,539,139.50
Other capital reserves 78,295,032.49 54,101,690.01 132,396,722.50
Total 282,946,030.50 111,989,831.50 394,935,862.00
Other notes, including changes and reason of change:
(1) The current increase of share capital premium includes:
1) In the current period, the subsidiary Casting & Forging Company confirmed that due to the equity settlement
involving the share-based payment expenses for employees with immediate execution, the Company increased the
capital reserve - equity premium of 817,797.12 yuan according to the shareholding ratio.
2) Due to the purchase of equity of minority shareholders of the subsidiary Ranchuang Company, the difference
between the newly acquired long-term equity investment cost and the share of identifiable net assets of
continuously calculated from the merge date of the subsidiary enjoyed according to the proportion of newly added
shareholding was adjusted to increase capital reserve-equity premium of RMB 121,378.42
3) Due to dilution of share ratio (without loss of control) held by the Company resulted by the minority
shareholders of Zhongneng Company and Anhui Casting & Forging Company increased the capital, and the
Company included the difference between its share in the net book assets of the subsidiary before the capital
increase calculated according to the shareholding ratio before the capital increase and its share of the net book
assets of the subsidiary after the capital increase calculated according to the shareholding ratio after the capital
increase into the capital reserve- equity premium of 56,903,077.38 yuan.
(2) Other capital reserve increases in the current period include:
In the current period, the Company increased its capital reserve - other capital reserve of 54,101,690.01 yuan due
to the share-based payment expenses involving employees in the equity settlement, as detailed in Section 10 XIII
Explanation of Share Payment in this financial statement.
56. Treasury stock
In RMB
144
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Year-beginning balance Increase in the current Decrease in the current Year-end balance
Items
period period
Treasury stock 144,078,948.09 7,612,560.00 136,466,388.09
Total 144,078,948.09 7,612,560.00 136,466,388.09
Other notes, including changes and reason of change:
According to the resolution of the Company's 2021 Annual General Meeting, the Company distributed a cash
dividend of $4.00 (including tax) to all shareholders for every 10 shares, the number of expected lifted restricted
shares of the first grant was 19,031,400 shares, with the corresponding cash dividend of RMB 7,612,560.00, and
the corresponding reduction of other payables and treasury shares of RMB 7,612,560.00.
57. Other comprehensive income
In RMB
Occurred current term
Less：
Less：
Amount
Prior
transferred
period
into profit
included in
and loss in
Opening Amount other After-tax After-tax Other Closing
Items the current Less：
balance incurred composite attribute to attribute to (Note) balance
period that Income tax
before income the parent minority
income tax recognied expenses company shareholder
transfer to
into other
retained
comprehen
income in
sive
the current
income in
period
prior period
1. Other
comprehensive
income that cannot 2,630,313,1 70,687,553. 10,603,133. 60,084,420. 2,690,397,6
85.77 56 03 53 06.30
be reclassified in
the loss and gain in
the future
Changes in fair
value of
2,630,313,1 70,687,553. 10,603,133. 60,084,420. 2,690,397,6
investments in 85.77 56 03 53 06.30
other equity
instruments
2.Other
comprehensive -
income - - - 947,478.62
reclassifiable to 835,428.78 263,153.79 112,049.84 151,103.95
profit or loss in
subsequent periods
-
Difference of - - - 947,478.62
835,428.78 263,153.79 112,049.84 151,103.95
translating of
145
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
foreign currency
accounts
Total of other 59,972,370
2,629,477,7 70,424,399. 10,603,133. - 947,478.62 2,690,397,6
comprehensive 56.99 77 03 .69 151,103.95 06.30
income
Other notes, including the adjustment of the recognition of initial amount of effective part of the cash flow
Other changes in the current period are due to changes in the scope of consolidation and the corresponding
transfer of the difference in the translation of the foreign currency financial statements attributable to the
Company by RMB -947,478.62.
58. Special reserves
In RMB
Items Beginning of term Increased this period Decreased this period End of term
Labor safety expenses 18,369,033.52 5,749,535.20 6,277,242.80 17,841,325.92
Total 18,369,033.52 5,749,535.20 6,277,242.80 17,841,325.92
Other note, including changes and reason of change:
(1) The current decreases include:
1) The Company withdrew safety production expenses of 5,306,323.51 yuan for the purchase of safety protective
commodity and equipment.
2) The minority shareholders of the subsidiary Zhongneng Company increased capital result in dilution of the
proportion of equity owned by the Company (without losing control), and transferred out the special reserve of
970,919.29 yuan.
(2) Upon the application of the Company and the approval of Hangzhou Safety Production Supervision and
Administration Bureau (HSPSAB), the minimum reserved amount for the collection and use of the safety
production cost of the Company and its subsidiaries is RMB 20 million. If the safety production costs that have
been withdrawn in previous years have exceeded the minimum reserved amount, it will no longer be reduced; if
the safety production costs for the subsequent years are less than the above-mentioned minimum reserved amount,
withdraw in the current year to compensate up to the minimum reserved amount. After adding the work safety
expenses attributable to minority shareholders, the total of the Company's work safety expenses at the end of the
period is RMB27,841,261.86.
59. Surplus reserves
In RMB
Items Beginning of term Increased this period Decreased this period End of term
Statutory surplus
625,178,089.82 625,178,089.82
reserves
Total 625,178,089.82 625,178,089.82
Other note, including changes and reason of change
146
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
60. Retained profits
In RMB
Items Amount of this period Amount of last period
Adjust the undistributed profits before and at
3,761,583,410.91 3,415,358,402.27
the end of the period
Add：Net profit belonging to the owner of the
522,396,807.32 649,992,474.56
parent company
Common stock dividend payable 527,565,579.99 185,864,649.99
Other 117,902,815.93
Retained profits at the period end 3,756,414,638.24 3,761,583,410.91
Other note:
The profit distribution proposal reviewed and approved by the boarding meeting was summarized as follows: In
2021, with the total share capital of 754,010,400 shares at the end of the year deducting 111,800 treasury shares
repurchased as of date of record by Company, that is, 753,898,600 shares, the Company would distribute cash
dividend to all the shareholders at the rate of CNY 4.0 for every 10 shares（including tax）, 3 bonus shares
（including tax），A total stock dividend of RMB 226,169,580.00 and a cash dividend of RMB 301,559,439.99, of which a cash
dividend of RMB 163,440.00 was distributed to the expected unlockable restricted stock.
(1)As the retroactive adjustment on Enterprise Accounting Standards and its related new regulations, the affected
beginning undistributed profits are RMB 0.
(2) As the change of the accounting policy, the affected beginning undistributed profits are RMB 0.
(3) As the correction of significant accounting error, the affected beginning undistributed profits are RMB 0 .
(4) As the change of consolidation scope caused by the same control, the affected beginning undistributed profits
are RMB 0.
(5) Other adjustment of the total affected beginning undistributed profits are RMB 0 .
61. Business income and Business cost
In RMB
Amount of this period Amount of last period
Items
Income Cost Income Cost
Main Business 5,495,693,244.56 4,016,656,619.93 5,756,713,931.47 4,062,659,604.63
Other 23,148,695.26 10,758,183.33 31,574,657.44 29,295,888.06
Total 5,518,841,939.82 4,027,414,803.26 5,788,288,588.91 4,091,955,492.69
Whether the net profit before and after deducting non-recurring gains and losses is negative after audit
□ Yes √ No
In RMB
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:
147
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
The income corresponding to the performance obligations that have not been performed or have been performed
incompletely but the contract has been signed at the end of the reporting period is RMB 7,919,070,000.00.
Other note
62.Taxes and surcharges
In RMB
Items Amount of this period Amount of last period
Urban maintenance and construction tax 10,009,589.55 15,477,429.38
Educational surtax 4,366,464.42 6,755,116.33
Locality Education surcharge 2,910,976.25 4,506,158.80
House tax 14,957,149.91 11,919,435.52
Land royalties 2,400,686.40 4,610,225.78
Stamp tax 3,667,483.45 2,477,515.63
vehicle and vessel tax 60,286.64 69,072.31
Other 11,122.15 14,076.50
Total 38,383,758.77 45,829,030.25
Other note：
63. Sales expense
In RMB
Items Amount of this period Amount of last period
Employees’ remunerations 131,040,859.19 101,207,766.17
Consulting service fee 25,231,173.94 26,377,049.32
Travel expenses 24,781,070.36 26,421,118.72
Business reception expenses 17,726,723.65 16,944,060.09
Three charge 7,800,806.05 18,802,491.64
Warehousing 5,028,381.37 2,872,837.87
Conferences 1,758,083.86 1,732,483.74
Advertising fee 1,584,233.98 1,841,852.03
Other 6,538,191.20 6,668,898.24
Total 221,489,523.60 202,868,557.82
Other note
64. Administrative expense
In RMB
Items Amount of this period Amount of last period
Employees’ remunerations 394,509,449.15 435,806,921.20
Stock payable 56,252,090.01 17,297,907.40
Asset depreciation and amortizing 42,711,626.99 33,173,062.19
Rental fee, House rental, property
22,495,865.42 38,197,856.49
management, water and power
Office expenses 10,780,226.70 12,664,641.22
Material consumption and amortization
6,589,584.68 6,451,854.48
of low-value consumables
Agency fee 8,075,703.91 8,949,478.71
Repair costs 7,522,911.20 14,285,987.83
Travel expenses and overseas travel
5,647,664.14 6,827,063.68
expenses
Enterprise relocation costs [Note] 31,652,234.54
Other 36,353,147.51 54,977,315.56
Total 590,938,269.71 660,284,323.30
148
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Other note:
The relocation expenditure incurred in the current period was RMB 16,150,800.00 and it’s presented under
employee remuneration.
65. R&D Expense
In RMB
Items Amount of this period Amount of last period
Labor cost 162,914,571.31 170,270,207.41
Direct materials 98,709,801.80 145,030,641.50
Depreciation expenses 5,331,971.14 9,953,767.74
Test and inspection fee 4,583,898.71 2,322,130.32
Commissioned research & development 5,246,830.91 8,013,059.40
Other 7,452,809.17 14,626,828.74
Total 284,239,883.04 350,216,635.11
Other note
66. Financial expenses
In RMB
Items Amount of this period Amount of last period
Interest expense 24,366,789.74 23,435,810.36
Less: Incoming interests 18,946,425.24 18,328,752.35
Exchange gains/losses -38,338,007.69 1,903,566.98
Commission 3,621,245.27 2,738,299.23
Total -29,296,397.92 9,748,924.22
Other note：
67. Other income
In RMB
Items Amount of this period Amount of last period
Government subsidies related to assets 29,873,987.51 30,843,067.37
Government subsidies related to income 43,438,557.91 171,327,615.80
Individual tax commission refunds 418,128.89 377,834.86
[Note] For the government subsidies included in other income in this period, see Section X VII 84 of this report.
68. Investment income
In RMB
Items Amount of this period Amount of last period
Long-term equity investment income by equity method -563,981.22
Investment income of trading financial assets during the
-2,689,211.31 -3,273,132.15
holding period
Investment income obtained from the disposal of trading
36,295,722.69 81,906,736.97
financial assets
Dividend income from other equity instrument investments
364,839.26 21,765.89
during the holding period
149
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Dividend income derived from other equity instrument
95,156,322.10 95,156,322.10
investments during the holding period
Debt restructuring gains 7,035,391.36 1,617,382.00
Other -6,491,695.59
Total 135,599,082.88 168,937,379.22
Other note：
69.Net exposure hedging income
70. Gains on the changes in the fair value
In RMB
Source Amount of this period Amount of last period
Transactional Financial assets -646,522.64 963,450.48
Other non-current financial assets 960,000.00 -1,104,976.32
Total 313,477.36 -141,525.84
71. Credit impairment loss
In RMB
Items Amount of this period Amount of last period
Losses on bad debt 82,441,348.93 15,768,143.94
Total 82,441,348.93 15,768,143.94
72. Losses from asset impairment
In RMB
Items Amount of this period Amount of last period
II. Loss of inventory value and impairment of
-32,352,000.41 -26,504,227.85
contract performance costs
V. Impairment loss of fixed assets -9,028,267.09
XII. Loss of impairment of contract assets 7,911,784.28 7,021,475.51
Total -24,440,216.13 -28,511,019.43
Other note：
73. Asset disposal income
In RMB
Source Amount of this period Amount of last period
Profits of disposal of fixed assets 95,281.00 1,094,656.77
Total 95,281.00 1,094,656.77
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
Compensation income[Note] 56,511,643.28 131,153,708.15 56,511,643.28
No payment required 1,136,297.51 2,662,252.07 1,136,297.51
Loss of non-current assets:
102,213.90
obsolescence gain
150
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Other 2,507.61 434,801.16 2,507.61
Total 57,650,448.40 134,352,975.28 57,650,448.40
Government subsidies recorded into current profits and losses：
[Note] The compensation income for this period is mainly based on the "Long-
period Suspension Unit Cancellation Agreement" signed between the company and Shenyang Turbine Machine C
o., Ltd. The project was cleared and released, and after the communication between the two parties, it was confir
med that the breach of contract income of the project was RMB 39.5835 million.
In RMB
Whether the
impact of Amount of Amount of
Whether Assets-
Issuing subsidies on
Items Issuing body Nature special related/incom
Reason the current current previous
subsidies e -related
profit and
loss
period period
75. Non-operational expenses
In RMB
Recorded in the amount of the
Items Amount of this period Amount of last period
non-recurring gains and losses
Compensation expenses 1,955,731.38 9,386,784.95 1,955,731.38
Donations 765,000.00 310,000.00 765,000.00
Non-current assets scrapping
324,233.68 78,963,545.45 324,233.68
loss
Fine, late payment 45,155.29 203,901.79 45,155.29
Other 40,455.62 23,067.14 40,455.62
Total 3,130,575.97 88,887,299.33 3,130,575.97
76. Income tax expenses
(1) Details
In RMB
Items Amount of this period Amount of last period
Income tax of current term 52,728,108.37 67,189,032.96
Deferred income tax 29,964,153.08 38,110,661.41
Total 82,692,261.45 105,299,694.37
(2) Adjustment process of accounting profit and income tax expenses
In RMB
Items Amount of this period
Total profit 707,931,620.14
Income tax expense at parent company's applicable tax rate 106,189,743.02
Effect of different tax rates applicable to subsidiaries 6,913,411.96
Adjustment for income tax in prior year 1,682,143.93
Income not subject to tax -14,012,598.42
Effects of non-deductible costs, expenses and losses 4,523,132.62
151
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Impact of deductible losses on the use of previously unrecognized deferred income
-2,457,232.80
tax assets
The current period does not affect the deferred tax assets recognized deductible
2,187,123.38
temporary differences or deductible loss
Impact of additional deductions for R & D expenses -30,529,223.73
Impact of additional deduction for equipment and appliances of high-tech
-32,966.02
enterprises in the fourth quarter
Impact of additional deductions for the disabled -389,996.66
Impact of share payments 8,618,724.17
Income tax expenses 82,692,261.45
77. Other Comprehensive income
For details, please refer to Note X(VII)57
78. Notes Cash flow statement
(1) Other cash received from operating activities
In RMB
Items Amount of this period Amount of last period
Recovery of operating bank deposits 199,173,666.41 398,801,063.82
Government subsidies received 27,321,284.08 31,902,074.30
Deposit interest 18,946,425.24 18,237,333.89
Receipt of operating current account 3,936,945.05 5,033,170.11
Lease income 1,091,668.02 2,966,095.79
Compensation income 97,470.00 35,240,999.31
Other 569,757.57 812,636.02
Total 251,137,216.37 492,993,373.24
Note：
(2) Other cash paid related to operation
In RMB
Items Amount of this period Amount of last period
Payment of operational bank 180,292,694.53
223,049,919.64
deposits
Payment cash Management expenses 81,915,119.72 148,934,743.59
Payment cash sales expenses 86,924,480.00 102,134,607.20
Payment cash R & D cost 16,719,251.91 25,057,788.44
Payment cash financial expenses 3,621,245.27 2,738,299.23
Pay compensation 100,134.80 4,529,909.30
Other 850,610.91 536,968.94
Payment of business transactions 19,701,721.07
Total 370,423,537.14 526,683,957.41
（3）Other investment-related cash received
In RMB
Items Amount of this period Amount of last period
Repurchasing of trusteeship 2,430,000,000.00 3,758,818,000.00
Receipt of levy and relocation
197,297,786.03
compensation
Receive the interest on the funds
192,426.85
occupied by the non-related parties
152
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Reduction of Hangzhou bank convertible
687,572,000.00
bond
Get the cash received by the subsidiaries 1,275,088.15
Total 2,627,490,212.88 4,447,665,088.15
（4）Other cash paid for investment activities
In RMB
Items Amount of this period Amount of last period
Purchasing of financial products 2,077,000,000.00 3,696,000,000.00
Net cash paid by disposal subsidiaries
8,697,180.39
(negative)
Purchasing of convertible bonds 687,572,000.00
Total 2,085,697,180.39 4,383,572,000.00
（5）Other cash paid for Financing activities
In RMB
Items Amount of this period Amount of last period
Recovering the right to use the assets
200,000.00
deposit
Received of restricted stock warrants 110,195,995.86
Discounting payment of financing bill 7,500,000.00
Total 200,000.00 117,695,995.86
（6）Other cash paid relevant to financing activities
In RMB
Items Amount of this period Amount of last period
Return the related party's capital
245,425,672.29 40,373,179.58
occupation and interest
Pay the rent of the right to use the asset 15,314,937.25 7,337,642.50
Financing notes due and payment 7,500,000.00
buy minority stake 2,902,611.00 53,295,800.13
Repurchase stocks 2,197,649.00
Payment of CDB investment interest 155,000,000.00
Subsidiary cancels and returns minority
12,725,371.88
shareholders
Pay interest on CDB Fund investment 2,021,333.33
Payment of discounted interest on
328,968.75
financing bills
Total 273,340,869.54 271,082,296.17
79. Supplement Information for cash flow statement
（1）Supplement Information for cash flow statement
In RMB
Supplementary Info. Amount of this period Amount of last period
I. Adjusting net profit to cash flow from operating activities
Net profit 625,239,358.69 727,247,759.79
Add: Impairment loss provision of assets -58,001,132.80 12,742,875.49
Depreciation of fixed assets, oil and gas assets and consumable
128,776,068.89 104,261,255.33
biological assets
Depreciation of Use right assets 12,582,536.56 7,670,173.81
153
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Amortization of intangible assets 11,461,545.32 10,482,651.22
Amortization of Long-term deferred expenses 3,520.00
Loss on disposal of fixed assets, intangible assets and other long-
-95,281.00 -1,094,656.77
term deferred assets
Fixed assets scrap loss 326,033.68 78,861,331.55
Loss on fair value changes -313,477.36 141,525.84
Financial cost -14,033,357.95 25,227,104.80
Loss on investment -131,252,902.83 -170,593,129.37
Decrease of deferred income tax assets 29,931,187.06 38,837,335.36
Increased of deferred income tax liabilities 32,966.02 -726,673.95
Decrease of inventories 686,701,189.28 -764,962,478.57
Decease of operating receivables 409,317,867.69 -297,533,528.78
Increased of operating Payable -1,433,059,686.61 284,977,912.55
Other 56,527,890.99[Note] 16,266,510.72
Net cash flows arising from operating activities 324,140,805.63 71,809,489.02
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 1,805,028,401.76 1,467,538,968.07
Less: Beginning balance of cash equivalents 1,467,538,968.07 1,850,354,648.10
Add：End balance of cash equivalents
Less: Beginning balance of cash equivalents
Net increase of cash and cash equivalent 337,489,433.69 -382,815,680.03
[Note] Others include the net change in special reserves of RMB 275,800.98 and the confirmation of share-
based payment expenses of RMB 56,252,090.01 in the current period
(2) Net Cash paid of obtaining the subsidiary
(3) Net Cash receive of disposal of the subsidiary
In RMB
Amount
Current disposal of cash or cash equivalents received by
2,000,000.00
subsidiaries during the current period
Of which:
Of which:Indonesia Comapny 2,000,000.00
Less: Cash and cash equivalents held by the Company on days
10,697,180.39
of loss of control
Of which:
Of which:Indonesia Comapny 10,697,180.39
Of which:
Net cash received from the disposal of subsidiaries -8,697,180.39
154
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(4) Component of cash and cash equivalents
In RMB
Items Year-end balance Year-beginning balance
1,805,028,401.76 1,467,538,968.07
I.Cash
107,551.80 65,904.06
Of which: Cash in stock
Bank savings could be used at any time 1,804,892,189.83 1,467,310,722.30
Other monetary capital could be used at any time 28,660.13 162,341.71
III. Balance of cash and cash equivalents at the
1,805,028,401.76 1,467,538,968.07
period end
(1) Monetary funds that do not belong to cash and cash equivalent
Items Year-end balance Year-beginning balance
Bank acceptance bill margin 92,639,033.89 151,092,217.21
Guarantee deposit 9,321,352.25 4,235,062.51
Pledge time deposit 47,973,000.00
ETC business margin 19,000.00 17,000.00
Subtotal 149,952,386.14 155,344,279.72
(2) Endorsement transfer amount of commercial bills not involving cash receipts and payments
Items Current amount Amount of the same period last
year
Amount of commercial bill endorsed and transferred 1,304,085,972.09 1,539,746,319.56
In which: payment for goods 1,296,077,749.78 1,486,046,319.56
Payment for the purchase of long-term assets such as fixed 8,008,222.31 12,700,000.00
assets
Payment of loan 41,000,000.00
80. Note of statement of changes in the owner's equity
Explain "other" project name and adjustment amount of the adjustment of closing balance in previous year, etc.
81. Assets with limitation on ownership or using rights
In RMB
Items Closing book value Causation o limitation
Used as security for issuing of
Monetary capital 149,952,386.14
acceptance bill and bill of guarantees
Used as security for issuing of
Notes receivable 11,130,774.54
acceptance drafts and bill
Receivables financing 143,516,310.23
Used as security for issuing of
Fixed assets 124,868,888.02
acceptance drafts and bill
Used as security for issuing of
Intangible assets 17,207,776.09
acceptance bill and bill of guarantees
Total 446,676,135.02
82. Monetary items in foreign currencies
155
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(1) Foreign currency monetary items
In RMB
Translated to RMB at end of
Items Balance at end of period Exchange rate
period
Monetary capital 408,588,968.12
Incl：USD 58,245,732.47 6.9646 405,658,228.36
Euro 393,677.46 7.4229 2,922,228.42
HKD 6,383.13 0.89327 5,701.86
Yen 53,659.00 0.052358 2,809.48
Account receivable 183,412,441.10
Incl：USD 24,988,196.84 6.9646 174,032,795.71
Euro 1,230,284.14 7.4229 9,132,276.14
HKD
SGD 47,726.12 5.1831 247,369.25
Long-term loans
Incl：USD
Euro
HKD
Other receivable 3,482,300.00
Incl：USD 500,000.00 6.9646 3,482,300.00
Contract assets 4,302,231.28
Incl：USD 542,440.00 6.9646 3,777,877.62
Euro 70,640.00 7.4229 524,353.66
Euro 11,335,719.76
Incl：USD 625,951.96 6.9646 4,359,505.02
Euro 939,823.35 7.4229 6,976,214.74
(2) Note to overseas operating entities, including important overseas operating entities, which should be disclosed
about its principal business place, function currency for bookkeeping and basis for the choice. In case of any
change in function currency, the cause should be disclosed.
□ Applicable √ Not applicable
83. Arbitrage
Arbitrage According to arbitrage category to disclose arbitrage item, relevant arbitrage tools and the arbitraged
risk qualitative and quantitative information:
84. Government subsidy
1) Government subsidies related to assets
In RMB
Amount included in current profit
Items Amount Project
and loss
156
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
（2）Government subsidy return
□ Applicable √ Not applicable
Other note：
(1) Detail
1) Asset-related government subsidies
Current
Beginning Ending amortization
Items Current subsidy increase Current amortization
Deferred income Deferred income Item
presentation
Relocation and relocation 587,965,976.12
compensation (Shiqiao Road 180,689,420.54 21,141,733.79 747,513,662.87 Other income
factory area)
Relocation and relocation 126,889,398.13
compensation (Hangfa factory 8,663,283.72 118,226,114.41 Other income
area)
Financial subsidy for
143,900.00 28,780.00 115,120.00 Other income
industrial projects
Subsidy for casting and
143,900.00 28,780.00 115,120.00 Other income
forging projects
Financial subsidy for recycling
57,050.00 11,410.00 45,640.00 Other income
economy
Subtotal 715,200,224.25 180,689,420.54 29,873,987.51 866,015,657.28
2) Income-related Government grants used to compensate for related costs or losses incurred by the company
Items At the beginning of New subsidies for This period of End-of-term deferred Amortize the
the deferred this period amortization income items in this
income period
Supported by Zhejiang Gas
Turbine Machinery
14,238,527.49 68,000.00 5,487,675.12 8,818,852.37 Other income
Manufacturing Innovation
Center
Zhejiang Province science and
technology plan project 2,601,800.00 55,179.80 2,546,620.20 Other income
subsidies
Subtotal 14,238,527.49 2,669,800.00 5,542,854.92 11,365,472.57
3) Income-related government subsidies used for compensation of relevant costs and expenses or losses incurred
in the Company
Items Amount Item presentation
Relocation and relocation compensation (Shiqiao Road factory area) 16,150,800.00 Other income
Social security return 4,063,515.21 Other income
R & D investment subsidy funds 3,285,200.00 Other income
The first batch of financial support funds for district-level Kunpeng and quasi-
2,225,245.00 Other income
Kunpeng enterprises
One-time job training subsidy 1,691,000.00 Other income
Incentive funds for the first (set) product 1,500,000.00 Other income
Procurement incentive funds for backbone enterprises 1,422,000.00 Other income
Special funds for the development of military-civilian integration 1,370,000.00 Other income
Funding for Talent Cultivation 910,154.84 Other income
Subsidies for digital transformation research projects 609,300.00 Other income
Industry-university-research cooperation subsidy funds 500,000.00 Other income
Special financial funds for industrial and information technology development 500,000.00 Other income
District-level supporting funds for provincial-level industrial Internet platforms 500,000.00 Other income
157
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Special fund for new manufacturing plan 500,000.00 Other income
Factory IoT Project Grants 479,300.00 Other income
patent grant 442,580.46 Other income
"Manufacturing Quality Award" incentive funds 300,000.00 Other income
Brand building subsidy 200,000.00 Other income
Foreign trade development fund project subsidy 200,000.00 Other income
property tax refund 143,264.07 Other income
Qiantang District encourages employees from outside the province to stay in the
100,000.00 Other income
district during the New Year to stabilize jobs and promote production subsidies
Qiantang District Outstanding Contribution Enterprise Award 100,000.00 Other income
Incentive funds for stable production and growth 100,000.00 Other income
Subsidies for sea and air transportation for key foreign trade enterprises 100,000.00 Other income
Other 503,343.41 Other income
Subtotal 37,895,702.99
(2) The current amount of government subsidies included into the current profits and loss is RMB 73,312,545.42.
85.Other
VIII. Changes of merge scope
1. Business merger not under same control
(1) Business merger not under same control in reporting period
（2）Merger cost and goodwill
(3) The identifiable assets and liabilities of acquiree at purchase date
(4) The profit or loss from equity held by the date before acquisition in accordance with the fair value measured
again
(5) Note to merger could not be determined reasonable consideration or Identifiable assets, Fair value of liabilities
of the acquiree at acquisition date or closing period of the merge
(6) Other note:
2. Business combination under the same control
(1) Business combination under the same control during the reporting period
（2）Combination cost
（3）Book value of the assets and liabilities of the mergee at the merger date
158
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
3. Counter purchase
Basic information of trading, the basis of transactions constitute counter purchase, the retain assets , liabilities of
the listed companies whether constituted a business and its basis, the determination of the combination costs, the
amount and calculation of adjusted rights and interests in accordance with the equity transaction process.
4. The disposal of subsidiary
Whether there are multiple transactions step by step dispose the investment to subsidiary and lost control in
reporting period
Yes□ No
In RMB
The
differen
ce
between
the Amount
disposal Determi transferr
price Book Fair nation ed from
Perce
and the value value method other
ntage
share of of of and compreh
of Gain or
Determi the remai remai main ensive
point remai loss from
Equi Equity nation subsidia ning ning assumpti income
of ning remeasur
Subsi Equity ty dispos basis for ry's net equity equity ons of related
loss equity ement of
diary disposa disp al the point assets at on the at the fair to equity
of at the remainin
name l price osal metho of loss the date date value of investme
contr date g equity
ratio d of consolid of of remainin nt in
ol of loss at fair
control ated loss loss g equity atomic
of value
financial of of on the company
contro
stateme contr contr date of to
l
nt level ol ol loss of investme
correspo control nt profit
nding to and loss
the
disposal
investm
ent
Industria
l and
commer
Indon Agree Dece
cial -
esia 6,120,0 70.0 ment mber 993,654.
change 1,557,63
Coma 00.00 0% transfe 27, 43
registrati 5.65
pny r 2022
on is
complet
ed
Other note
In November 2022, Zhongneng Company and PT.HANGZHOU TURBINE SERVICES signed the Equity
Transfer Agreement, in which transferred its 70% equity of the Indonesian company to PT.HANGZHOU
TURBINE SERVICES at a price of 6.12 million yuan. The equity transfer was obtained with a decree issued by
the Local Ministry of Justice and Human Rights in Indonesia on December 27, 2022. The net asset value of the
Indonesia Company as of December 31,2022 was 7,323,350.80 yuan, and the net assets of the Indonesian
company enjoyed by Zhongneng Company were 5,126,345.57 yuan according to the 70% shareholding ratio, and
159
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
the difference of 993,654.43 yuan to the disposal price of 6,120,000.00 yuan was recognized as investment
income; Meanwhile, other comprehensive income related to the equity investment of the Indonesian company-
changes in the translation difference in foreign currency financial statements was transferred to the profit or loss
of the current period when lost the control, and the investment income was recorded in the consolidated statement
of -1,557,635.65 yuan; the total investment income recognized was RMB-563,981.22.
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：
Net profit from
Equity disposal
Name Equity disposal point Net assets on disposal date opening to disposal
method
date
Hangzhou Steam
Turbine Power Group
M&A 2022.12.26 10,076,214.15 1,001,509.06
Equipment Engineering
Co., Ltd
[Note] Due to the needs of business development, the New Energy Company signed a Merger Agreement with its
subsidiary Hangzhou Steam Turbine Power Group Equipment Engineering Co., Ltd ., which was absorbed and merged on
August 11, 2022 as the base date, and whose legal person status was cancelled.
6.Other
IX. Equity in other entities
1. Equity in subsidiary
(1) The structure of the enterprise group
Share proportion %
Name of the Main business Business
Reg. Add. Way of obtain
subsidiaries location property Direct Indir
ect
Auxiliary Hangzhou Hangzhou
Zhejiang Zhejiang Manufacturing 87.53% Incorporation
Machine Co.
Packaged Hangzhou Hangzhou
Technologies Zhejiang Zhejiang Commerce 75.86% Incorporation
Co.
Hangzhou Hangzhou
Machinery Co. Zhejiang Zhejiang Manufacturing 52.00% Incorporation
Hangzhou Hangzhou
Turbine Co. Zhejiang Zhejiang Commerce 100.00% Incorporation
Zhongneng Hangzhou Hangzhou
Manufacturing 46.89% Incorporation
Company
Zhejiang Zhejiang
Casing Manufacturing
Hangzhou Hangzhou 38.03% Incorporation
Company
160
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Zhejiang Zhejiang
New Energy Hangzhou Hangzhou Construction Business consolidation
100.00%
Company business under the same control
Zhejiang Zhejiang
Hangzhou Hangzhou Business consolidation
Sales Company Transportation 30.00%
under the same control
Zhejiang Zhejiang industry
China
Mechanical Hangzhou Hangzhou Business consolidation
Commerce 55.00%
Institute under the same control
Company Zhejiang Zhejiang
Ranchuang Hangzhou Hangzhou Business consolidation
Commerce 100.00%
Company under the same control
Zhejiang Zhejiang
Notes: holding proportion in subsidiary different from voting proportion:
Basis of holding half or less voting rights but still been controlled investee and holding more than half of the
voting rights not been controlled investee:
(1) In December 2022, the subsidiary Zhongneng Company introduced strategic investors and simultaneously
implemented employee shareholding, resulting in the Company's shareholding ratio falling from 60.83% to
46.89%. Since the shareholding ratio of the Company still exceeds 1/3, the three of the seven directors are
appointed by the Company, and two other directors have signed the "Concerted Action Person Agreement" with
the Company, thus the Company controls Zhongneng Company.
(2) In December 2018, the subsidiary Casting & Forging Company introduced external strategic investors,
resulting in the Company's shareholding ratio falling from 51% to 38.03%. Since the Company still holds more
than 1 / 3 equity and holds three of the five board seats, it has control over the casting company.
(3) On November 11, 2021, the Company acquired 30% of the equity of the sales company. According to the
articles of association of the sales company and the resolution of the shareholders' meeting, the board of directors
of the sales company has five board seats, and the five directors are appointed by the company, so the Company
has control over the sales company.
(2) Significant not wholly owned subsidiary
In RMB
Share portion of Gains/loss of the period Dividend announced in Balance of equity of
Name of the
minor attributable to minor the period to minor minor shareholders at
subsidiaries
shareholders shareholders shareholders end of period
Auxiliary Machine Co. 12.47% 6,051,090.09 4,988,000.00 39,619,762.30
Packaged Technologies
24.14% 4,536,645.86 7,388,370.00 27,515,386.95
Co.
Machinery Co. 48.00% 45,796,935.33 28,800,000.00 111,510,409.92
Zhongneng Company 53.11% 30,941,153.08 159,836,453.72
Casing Company 61.97% -1,135,708.59 187,852,632.33
Sales Company 70.00% 9,063,892.86 3,150,000.00 39,631,556.03
China Mechanical
45.00% 131,860.13 90,000.00 1,294,748.59
Institute Company
Holding proportion of minority shareholder in subsidiary different from voting proportion:
Other note:
161
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(3) The main financial information of significant not wholly owned subsidiary
In RMB
End of term Beginning of term
Subsid Curren Non- Total Curren Non- Total
Non- Total Non- Total
iaries Curren t current of Curren t current of
Name current of current of
t assets liabiliti liabiliti liabilit t assets liabiliti liabiliti liabilit
assets assets assets assets
es es y es es y
Auxili 662,28 86,972 749,26 417,63 420,39 733,02 78,861 811,89 491,55 491,55
ary 2,761,
8,146. ,351.1 0,497. 8,359. 9,987. 9,315. ,833.8 1,149. 5,820. 5,820.
Machi 627.48
ne Co. 11 5 26 89 37 32 8 20 43 43
Packag
ed 289,27 298,40 183,55 184,44 295,13 302,39 176,62 176,62
9,134, 892,83 7,257,
Techn 2,485. 6,581. 4,800. 7,638. 5,373. 2,408. 2,637. 2,637.
ologies 096.47 7.72 034.74
34 81 43 15 75 49 98 98
Co.
Machi 341,33 27,559 368,89 132,13 136,58 287,17 24,884 312,05 113,11 115,15
4,453, 2,040,
nery 8,629. ,634.5 8,264. 1,820. 4,910. 3,778. ,211.2 7,989. 4,270. 4,917.
Co. 089.98 646.71
47 7 04 03 01 22 6 48 68 39
Zhong
neng 1,592, 256,91 1,849, 1,277, 271,09 1,548, 1,543, 271,31 1,814, 1,464, 289,54 1,754,
Compa 257,46 6,512. 173,97 138,14 1,873. 230,01 408,28 1,148. 719,43 528,61 8,659. 077,27
ny 5.58 99 8.57 3.86 73 7.59 8.89 18 7.07 0.29 78 0.07
Casing 488,55 161,44 649,99 324,87 20,186 345,06 447,03 163,45 610,49 278,72 36,696 315,42
Compa 0,333. 3,351. 3,684. 3,817. ,372.2 0,189. 2,301. 8,336. 0,637. 4,887. ,712.5 1,599.
ny 02 10 12 53 3 76 14 65 79 30 5 85
Sales 83,930 39,162 123,09 59,249 66,476 83,054 39,677 122,73 68,682 74,564
7,226, 5,882,
Compa ,156.8 ,681.5 2,838. ,528.0 ,329.7 ,537.4 ,964.5 2,502. ,231.7 ,411.8
ny 801.73 180.09
4 2 36 2 5 9 6 05 2 1
China
Mecha
nical
3,101, 3,102, 224,84 224,84 2,789, 3,639. 2,793, 8,885. 8,885.
Institut 827.75
e 236.65 064.40 5.30 5.30 442.19 53 081.72 14 14
Compa
ny
Other note
loss and cash flow situation
Amount of current period
Subsidiaries Name Cash flow for business
Turnover Net profit Total Misc Gains
activities
Auxiliary Machine
588,105,536.05 48,525,181.12 48,525,181.12 57,131,179.98
Co.
Packaged
234,634,434.19 18,789,173.15 18,789,173.15 35,510,559.98
Technologies Co.
Machinery Co. 306,871,315.89 95,410,281.94 95,410,281.94 87,100,058.13
Zhongneng Company 1,477,489,208.21 78,762,807.47 78,499,653.68 -108,465,527.91
Casing Company 439,244,605.73 84,265.32 84,265.32 -3,154,973.95
Sales Company 158,482,208.91 12,948,418.37 12,948,418.37 17,232,333.27
China Mechanical
2,974,643.71 293,022.52 293,022.52 298,655.05
Institute Company
(Continued)
Subsidiaries Name Amount of previous period
162
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Cash flow for business
Turnover Net profit Total Misc Gains
activities
Auxiliary Machine
604,581,929.89 84,567,191.43 84,567,191.43 -24,601,989.64
Co.
Packaged
275,556,715.10 19,607,516.09 19,607,516.09 -9,009,596.18
Technologies Co.
Machinery Co. 305,270,504.99 74,265,964.44 74,265,964.44 56,947,908.11
Zhongneng
Company 1,374,266,364.91 5,949,744.78 5,509,658.10 138,098,467.82
Casing Company 502,362,854.32 28,136,543.47 28,136,543.47 11,414,695.55
Sales Company 227,668,616.83 10,861,889.02 10,861,889.02 30,147,532.45
China Mechanical
3,614,549.00 755,007.44 755,007.44 -57,796.60
Institute Company
(4) Significant restrictions of using enterprise group assets and pay off enterprise group debt
(5) Provide financial support or other support for structure entities incorporate into the scope of
consolidated financial statements
2. The transaction of the Company with its owner’s equity share changed but still controlling the subsidiary
(1) Note to owner’s equity share changed in subsidiary
Change time Shareholding ratio before Shareholding ratio after
Subsidiaries Name
change change
Ranchuang Company 2022.8.24 85.60% 100.00%
Zhongneng Company 2022.12.31 60.83% 46.89%
Anhui Casting Company 2022.12.31 67.00% 51.54%
(2) The transaction’s influence to equity of minority shareholders and attributable to the owner's equity of the
parent company
In RMB
Ranchuang Company Zhongneng Company Anhui Casting Company
Cost/disposal
2,902,611.00
consideration
--Cash 2,902,611.00
-- Fair value of the non-cash
assets
Total purchase
cost/disposal 2,902,611.00
consideration
Less: share of net assets
of subsidiaries calculated
according to the 3,023,989.42 55,956,542.77 56,544.55
proportion of equity
acquired/disposed of
Difference -121,378.42 -55,956,542.77 -56,544.55
Including: adjustment of
-121,378.42 -55,956,542.77 -21,503.89
capital reserve
Adjustment of Surplus
reserve
Adjustment of the minority -35,040.66
163
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
shareholders' equity
Other note
3. Equity in joint venture arrangement or associated enterprise
(1) Significant joint venture arrangement or associated enterprise
（2）Major joint ventures and associates
(3) Main financial information of significant associated enterprise
(4) Summary financial information of insignificant joint venture or associated enterprise
(5) Provide financial support or other support for structure entities incorporate into the scope of consolidated
financial statements
(6) The excess loss of joint venture or associated enterprise
(7) The unrecognized commitment related to joint venture investment
(8) Contingent liabilities related to joint venture or associated enterprise investment
4. Significant common operation
5. Equity of structure entity not including in the scope of consolidated financial statements
6.Other
X. Risks related to financial instruments
The objective of the Company’s risk management is to achieve a balance between the risk and gains. Constrain
the negative influence on business operation to the lowest limit, and maximum the interests of shareholders and
other equity holders. With regard to this target, the basic policies of the Company are; locate and analyse the risks,
set appropriate bottom line for risks, and manage and monitor on each risk and constrain them in a certain extent.
Risks attached to financial instruments are mainly credit risks, liquidity risks, and market risks.
The following risk managing policies have been examined and approved by the management:
(I) Credit risks
Credit risks are introduced when one party of the financial instrument failed to exercise its liabilities and then
caused financial loss to another.
1. Credit risk management practice
(1) Evaluation method of credit risk
On each balance sheet date, the company evaluates whether the credit risk of relevant financial instruments
has increased significantly since the initial confirmation. When determining whether the credit risk has increased
significantly since the initial confirmation, the company considers to obtain reasonable and reliable information
without unnecessary extra costs or efforts, including qualitative and quantitative analysis based on historical data,
external credit risk rating and forward-looking information. Based on a single financial instrument or a
combination of financial instruments with similar credit risk characteristics, the company compares the risk of
default of financial instruments on the balance sheet date with the risk of default on the initial confirmation date to
determine the change of default risk of financial instruments during their expected duration.
When one or more of the following quantitative and qualitative criteria are triggered, the company believes
that the credit risk of financial instruments has increased significantly:
1) The quantitative standard is mainly that the probability of default for the remaining duration on the
balance sheet date rises by more than a certain proportion compared with the initial confirmation;
2) Qualitative criteria mainly include significant adverse changes in the debtor's operation or financial
situation, changes in existing or expected technology, market, economic or legal environment, and significant
adverse effects on the debtor's repayment ability of the company.
164
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(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 X (7)4,5,8 ,10 and 16 of these financial statements for details of the reconciliation
statement of the opening balance and closing balance of the financial instrument loss reserve.
4. Credit risk exposure and credit risk concentration
The company's credit risk mainly comes from monetary funds and receivables. In order to control the above-
mentioned related risks, the company has taken the following measures respectively.
(1) Monetary fund
The company deposits bank deposits and other monetary funds in financial institutions with high credit rating, so
its credit risk is low.
(2) Account receivable
The Company performs credit assessment on the clients on periodic and constant basis. Results suggested by the
assessment are used by the Company to determine clients with higher ranks and to overlook the rest. This was
conducted to avoid risks brought by material bad debts.
As the Company only does business with recognized and reputable third parties, so no collateral is needed.
Credit risks are centralized managed in accordance with customers. As of December 31,2022, the Company has a
characteristic of specific credit risk concentration. 39.04% (December 31,2021: 46.36%) 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
Year-end balance
Items Book value Contract amount not within 1 year 1-3 years Over 3 years
discounted
Bank loans 478,294,409.30 501,882,838.03 331,194,021.29 119,282,104.41 51,406,712.33
Notes payable 411,886,347.73 411,886,347.73 411,886,347.73
Account payable 1,202,915,727.29 1,202,915,727.29 1,202,915,727.29
Other payable 203,788,336.85 203,788,336.85 203,788,336.85
Lease 28,499,402.41 30,325,807.64 13,119,175.05 14,501,193.61 2,705,438.98
liabilities[Note]
Subtotal 2,325,384,223.58 2,350,799,057.54 2,162,903,608.21 133,783,298.02 54,112,151.31
(Continued)
Items Year-beginning balance
165
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Book value Contract amount not within 1 year 1-3 years Over 3 years
discounted
Bank loans 439,907,392.45 470,301,376.99 271,803,491.55 93,584,460.78 104,913,424.66
Notes payable 309,404,319.27 309,404,319.27 309,404,319.27
Account payable 1,910,150,188.14 1,910,150,188.14 1,910,150,188.14
Other payable 434,578,338.13 434,578,338.13 434,578,338.13
Lease liabilities 31,172,013.29 34,120,327.22 9,809,447.46 17,078,896.12 7,231,983.64
Subtotal 3,125,212,251.28 3,158,554,549.75 2,935,745,784.55 110,663,356.90 112,145,408.30
Note: Exclusive of Long-term payable—Restructured withholding and special payables
(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, 2022, the company's bank borrowings with floating interest rate were RMB
160,000,000.00 (December 31, 2021: RMB189,600,000.00). Under the assumption that other variables remain
unchanged, assuming that the interest rate changes by 50 benchmark points, there will be no significant impact on
the company's total profits and shareholders' equity.
2. Foreign currency risks
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 X (VII)82 to the Financial Statements.
XI. The disclosure of the fair value
1. Closing fair value of assets and liabilities calculated by fair value
In RMB
Closing fair value
Fair value
Fair value Fair value
Items measurement
measurement measurement Total
items at level
items at level 1 items at level 3
2
I. Consistent fair value
-- -- -- --
measurement
一Consistent fair value
1,998,737.18 610,537,179.48 612,535,916.66
measurement
1. Transactional financial assets and 1,998,737.18 610,537,179.48 612,535,916.66
166
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
other non-current financial assets
Financial assets classified as fair
605,002,406.26 605,002,406.26
value through profit or loss
Financing product 1,998,737.18 5,534,773.22 7,533,510.40
Equity instrument investment 817,555,768.45 817,555,768.45
2. Financing receivable 3,556,127,694.48 3,556,127,694.48
3. Other equipment instrument
3,558,126,431.66 1,428,092,947.93 4,986,219,379.59
investment
Total liabilities of consistent fair
-- -- -- --
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 Second-
level fair value measurement items, using valuation techniques and qualitative and quantitative information on im
portant parameters
4. Continuous and non-continuous third-
level fair value measurement items, using valuation techniques and qualitative and quantitative information on im
portant 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
estimate of fair value, so the cost is used to confirm its fair value .
5. Sensitiveness analysis on unobservable parameters and adjustment information between opening and closing
book value of consistent fair value measurement items at level 3
6. Explain the reason for conversion and the policy governing when the conversion happens if conversion happens
among consistent fair value measurement items at different levels
7. Changes in the valuation technique in the current period and the reason for change
8. Fair value of financial assets and liabilities not measured at fair value
9.Other
XII. Related party and related Transaction
1. Information related to parent company of the Company
Shareholding ratio
Name of the parent Voting ratio in the
Registered place Business nature Registered capital in the Company
company Company (%)
(%)
Steam Turbine
Hangzhou China Manufacturing 800 million 63.64% 63.64%
Holdings
167
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Notes
Hangzhou Municipal Government State-owned Asset Supervisory Committee is the ultimate controller of the
Company.
Other note：
2.Subsidiaries of the enterprise
For details of the subsidiary, see note X,9 to the financial statements.
3. Information on the joint ventures and associated enterprises of the Company
The details of significant joint venture and associated enterprise of the Company
4.Other related parties of the Company
Name of other related parties Relationship with the Company
Hangzhou Capital The parent company of Hangzhou Steam Turbine Holdings
Hangzhou Steam Turbine Compressor Co., Ltd. A subsidiary enterprise of Hangzhou Steam Turbine Holdings
Hangzhou Xiangjiang Technology Co., Ltd. A subsidiary enterprise of Hangzhou Steam Turbine Holdings
Hangzhou Oxygen Group Co., Ltd Affiliated enterprise of Hangzhou Capital
Hangzhou Oxygen Turbine Machinery Co., Ltd Affiliated enterprise of Hangzhou Oxygen
Zhumadian Hangzhou Oxygen Gas Co. Ltd Affiliated enterprise of Hangzhou Oxygen
Hangzhou Oxyen Expander Machine Co., Ltd. Affiliated enterprise of Hangzhou Oxygen
Hangzhou Oxyen Cryogenic Container Co., Ltd Affiliated enterprise of Hangzhou Oxygen
Hangzhou Oxyen Tooling Pump Co., Ltd Affiliated enterprise of Hangzhou Oxygen
Hangzhou Oxygen Machine Research Institute Co.,
Affiliated enterprise of Hangzhou Oxygen
LTD
Hangzhou Guoyu International Trade Co., Ltd. Affiliated enterprise of Hangzhou Capital
Greenesolpower systems PVT Ltd. shareholding enterprise of the company
Hangzhou Relian Group Co.,Ltd. Yang Yongming is a director of the company
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 Amount of last
Related parties trading limit or
transaction period
not?
period previous period
Hangzhou Oxygen Turbine
Parts 1,785,840.69 3,500,000.00 No 3,948,672.19
Machinery Co., Ltd
Greenesol
Technical service 1,389,571.62 0.00 Yes
power systems PVT Ltd.
Hangzhou Oxyen Tooling
Regulating value 292,917.77 0.00 Yes
Pump Co., Ltd
Hangzhou Oxygen
Machine Research Institute Test 4528.30 Yes
Co., Ltd
Steam Turbine Holdings Warehousing 0.00 No 764,983.49
Subtotal 3,472,858.38 3,500,000.00 No 4,713,655.68
168
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
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 Oxygen Turbine Machinery Co.,
Turbine 21,824,796.49 1,327.43
Ltd
Greenesolpower systems PVT Ltd. Parts 2,974,801.65 1,588,105.14
Hangzhou Oxyen Expander Machine Co.,
Parts 104,424.77
Ltd.
Hangzhou Oxyen Cryogenic Container
Transport service 87,981.66
Co., Ltd
Steam Turbine Holdings Material repair 4,344.52 460,725.47
Hangzhou Oxygen Turbine Machinery Co.,
Steam Turbine 8,654,867.26
Ltd
Hangzhou Guoyu International Trade Co.,
Material sales 2,722,604.67
Ltd.
Zhumadian Hangzhou Oxygen Gas Co. Ltd Technical serivice 11,320.75
Subtotal 24,996,349.09 13,438,950.72
(2) Related trusteeship/contract
(3) Information of related lease
The Company was lessor:
In RMB
The lease income confirmed The lease income confirmed
Name of lessee Category of leased assets
in this year in last year
Steam Turbine Holdings House and Building 1,077,902.81
- The company was lessee：
In RMB
Variable lease
Rental charges for payments not
Interest expenses
short-term and included in lease Increased use right
Rent paid on lease liabilities
low-value assets liabilities assets
assumed
(if any) measurement (if
any)
Categor
y of
Lessor
leased Amoun Amoun Amoun Amoun Amoun Amoun Amoun Amoun Amoun Amoun
assets
t of t of t of t of t of t of t of t of t of t of
current previou current previou current previou current previou current previou
period s period period s period period s period period s period period s period
Hangzhou House
Xiangjiang and 1,145,4 668,205 225,264 130,795
Technology Buildin 95.20 .53 .58 .52
Co., Ltd. g
House
Steam
and 2,601,7
Turbine
Buildin 43.42
Holdings
g
（4）Related-party guarantee
169
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(5) Inter-bank lending of capital of related parties
In RMB
Related party
Year-beginning balance Increase in the Decrease in the Year-end balance Among them: the
interest payment
current period current period
Steam Turbine 240,000,000.00 5,425,672.29 245,425,672.29 0.00 5,425,672.29
Holdings
（6）Related party asset transfer and debt restructuring
（7） Remunerations of key managements
In RMB
Items Current term Same period of last term
Remunerations of key managements 13,050,763.17 9,701,792.35
(8) Other related transactions
(1) Service and power supply
The Company and its subsidiaries purchased hydropower services from Steam Turbine Holding and paid
RMB17,422.61 in the current period.
2) Purchase of fixed assets
In the current period, the Company purchased fixed assets such as machinery and equipment from Steam Turbine
Holdings of 285,902.66 yuan.
3) Software Usage Fees
In the current period, the Company and its subsidiaries paid the annual software usage fee of 179,891.32 yuan to
Steam Turbine Holdings.
4) Trademark royalties
In the current period, the Company uses the registered trademark owned by Steam Turbine Holdings in free of
charge.
5) Advance payment
In the current period, Steam Turbine Holdings advanced 35,392.80 yuan for the subsidiary for salary payment.
6) Miscellaneous
In the current period, the subsidiary sales company does not need to pay the Steam Turbine Holding in amount of
10,208.90 yuan for resale.
6. Receivables and payables of related parties
（1）Receivables
In RMB
End of term Beginning of term
Name Related party Bad debt Bad debt
Book balance Book balance
provision provision
Account
Greenesol power systems PVT Ltd. 14,774,392.59 14,738,519.62 13,490,558.24 13,490,558.24
receivable
Hangzhou Oxyen Turbine
7,847,500.00 7,847,500.00 9,225,000.00 9,225,000.00
Machinery Co., Ltd.
Hangzhou Steam Turbine 59,000.00 59,000.00 59,000.00 59,000.00
170
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Compressor Co., Ltd’
Hangzhou Oxyen Cryogenic
46,600.00 2,330.00
Container Co., Ltd
Hangzhou Oxygen Group Co., Ltd 2,460,000.00 2,460,000.00
Steam Turbine Holdings 835,349.87 486,348.07
Hangzhou Relian Group Co., Ltd. 8,937.60 8,937.60
Subtotal 22,727,492.59 22,647,349.62 26,078,845.71 25,729,843.91
Financing
Hangzhou Oxygen Group Co., Ltd 7,050,000.00
receivable
Hangzhou Oxyen Turbine
3,000,000.00
Machinery Co., Ltd.
Subtotal 7,050,000.00 3,000,000.00
Hangzhou Xiangjiang Technology
Other receivable 601,384.98 180,415.49 601,384.98 60,138.50
Co., Ltd.
Steam Turbine Holdings 462,761.45 34,304.70
Subtotal 601,384.98 180,415.49 1,064,146.43 94,443.20
Constract assets Hangzhou Oxygen Group Co., Ltd 2,823,000.00 141,150.00
Hangzhou Oxyen Turbine
489,000.00 48,900.00 489,000.00 24,450.00
Machinery Co., Ltd.
Subtotal 3,312,000.00 190,050.00 489,000.00 24,450.00
（2）Payables
In RMB
Name Related party Amount at year Amount at year beginning
Account payable Greenesol power systems PVT Ltd. 2,625,853.11 1,835,287.07
Hangzhou Oxyen Turbine Machinery Co.,
557,522.07 497,585.09
Ltd.
Hangzhou Oxyen Tooling Pump Co., Ltd 128,316.00
Steam Turbine Holdings 230,568.42
Subtotal 3,311,691.18 2,563,440.58
Constract
Steam Turbine Holdings 16,378,000.00 29,652,336.28
liabilities
Hangzhou Oxyen Group Co., Ltd. 4,000,000.00 7,404,000.00
Greenesol power systems PVT Ltd. 640,228.64 353,288.27
Hangzhou Oxyen Expander Machine Co.,
141,000.00 85,800.00
Ltd.
Hangzhou Steam Turbine Compressor
700.00
Co., Ltd’
Subtotal 21,159,228.64 37,496,124.55
Other payable Steam Turbine Holdings 15,211,830.51 240,448,987.71
Subtotal 15,211,830.51 240,448,987.71
[Note] The contract liabilities are the tax-inclusive balance.
7. Related party commitment
8.Other
XIII. Stock payment
1. The Stock payment overall situation
√ Applicable □ Not applicable
In RMB
（1）Detail
171
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Total amount of various equity instruments granted by the company during the
N/A
current period
Total amount of various equity instruments that the company exercises during
N/A
the period
Total amount of various equity instruments that have expired in the current
531,180 Shares
period
The scope of executive price of the company’s outstanding share options at the
[Note]
end of the period and the remaining term of the contract
[Note] The range of exercise price of other equity instruments issued by the Company at the end of the period and
the remaining term of the contract
Items Exercise price Remaining term of contract
The first restriction lifting period of restricted shares granted for the first time is from
the first trading day after 24 months from the date of registration of restricted shares
granted for the first time to the last trading day within 36 months from the date of
registration of some restricted shares granted for the first time; The second restriction
First grant of restricted HKD 6.825 per lifting period of restricted shares is from the first trading day after 36 months after the
stock in 2021 share registration of restricted shares granted for the first time to the last trading day within 48
months after the registration of some restricted shares granted accordingly; The third
restriction lifting period of the restricted shares is from the first trading day 48 months
after the registration of restricted shares granted for the first time to the last trading day
within 60 months after the registration of some restricted shares granted accordingly.
The first restriction lifting period of restricted sales is from the first trading day after 24
Partial grant of 2021
HKD 6.825 per months from the date when the registration the restricted shares is completed
restricted stock
share accordingly to the last trading day within 36 months from the date when the registration
reserved
of the restricted shares is completed accordingly;
（2）Restricted stock that has expired in the current period
According to the "Proposal on Repurchase and Cancellation of Some Restricted Shares" deliberated and passed by
the 30th meeting of the 8th Board of Directors and the 19th meeting of the 8th Board of Supervisors of the
Company, 9 of the incentive objects of the Company's 2021 restricted stock incentive plan are no longer eligible
for incentive objects due to retirement, and 1 person is no longer eligible for incentive object due to personal
reasons. The afore-mentioned retirees can still lift the restricted shares according to the agreed conditions
according to the specific number of years of service during their performance appraisal period, and the remaining
restricted shares that have not yet been lifted shall not be lifted, and the Company shall repurchase and cancel the
shares at the grant price plus the bank deposit interest for the same period, and the restricted shares that have been
granted but not yet lifted by the above-mentioned leaving personnel shall be repurchased and cancelled by the
Company at the grant price. The number of restricted shares cancelled in this repurchase is 531,180 shares, and
the repurchase amount payable by the Company in connection with the repurchase of restricted shares is
2,197,649.00. The afore-mentioned receipt of the repurchase and cancellation of restricted shares has been
verified by Zhejiang Southern Accounting Firm Co., Ltd, and the "Capital Verification Report" (No. 003 [2023]
Nanfang Zhen) has been issued. As of the approval date of this financial report, the above-
mentioned capital reduction has not yet completed the industrial and commercial change registration procedures.
2. Equity-settled share-based payment
√ Applicable □Not applicable
In RMB
Determination method of the fair value of equity instruments The closing price of the company's stock on grant date - grant
on the grant date price
Equity-settled share-based payment is included in the
71,399,597.41
accumulated amount of capital reserve
Total amount of fees confirmed by equity-settled share-based
54,101,690.01
payments in the current period
Other note
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
3. The Stock payment settled by cash
□ Applicable √ Not applicable
4. Modification and termination of the stock payment
5.Other
In order to improve the long-term incentive mechanism, the holding subsidiary Casting & Forging Company
implemented the equity incentives for its core employees. The share-based payment expense of RMB
2,150,400.00 is recognized for the current period.
(1) In May 2022, 15 core employees including Hao Mingshan and Xu Zhixian of Casting Company purchased the
equity transferred by Yu Junming, Yu Yifeng and Tong Ziqian shareholders of Casting & Forging Company by
increasing their capital ownership platform Hangzhou Steam Turbine Co-construction Enterprise Management
Consulting Partnership (Limited Partnership), thus the equity held indirectly in Casting Company was the share
payment of immediately executed shares, and the calculated share-based payment expenses increased the capital
reserve - capital premium of 897,600.00 yuan.
(2) In August 2022, Hao Mingshan and Chen Xinnv, core employees of Casting & Forging Company, acquired
the transfer of equity by Tong Ziqian, a shareholder of Casting & Forging Company, thus the equity of Casting &
Forging Company held by was the share payment of immediately executed shares, and the calculated share-based
payment fee increased the capital reserve - capital premium of 1,252,800.00 yuan.
XIV. Commitments
1.Significant commitments
Significant commitments at balance sheet date
（1）With regard to bank letters of credit opened by the Company and its subsidiaries, the outstanding balance
till December 31, 2022 is as follows:
Name Bank Currency Amount Way of guarantee
The Company ICBC Banshan Branch Euro 15,227,000.00 Credit
The Company ICBC Banshan Branch Swedish krona 67,500,000.00 Credit
The Company China CITIC Bank Hangzhou Credit
USD 2,067,300.00
Branch
The Company China CITIC Bank Hangzhou Swedish Credit
352,955,000.00
Branch krona
New Enegy China CITIC Bank Hangzhou Credit
Euro 303,000.00
Company Branch
Hangfa Zhongneng Company
Hangzhou Bank High -tech Branch RMB 12,000,000.00
Comapny Guarantee
（2）With regard to bank letters of Guarantee opened by the Company and its subsidiaries, the outstanding
balance till December 31, 2022 is as follows:
Name Bank Currency Amount Way of guarantee
The Company ICBC Banshan Branch RMB 285,310,859.06 Credit
The Company ICBC Hangzhou Branch RMB 8,851,931.00 Credit
The Company China CITIC Bank Hangzhou Branch RMB 32,013,742.28 Credit
The Company China CITIC Bank Hangzhou Branch USD 1,470,970.00 Credit
The Company China Bank Hangzhou Branch RMB 107,292,635.88 Credit
The Company China Bank Hangzhou Branch USD 7,877,200.00 Credit
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
China Merchants Bank Hangzhou Credit
The Company RMB 1,045,000.00
Branch
Machinery Co. ICBC Banshan Branch RMB 17,900,476.90 Credit
New Energy The Company
Hangzhou Bank High -tech Branch RMB 179,100,790.00
Company Guarantee
New Energy Credit
China CITIC Bank Hangzhou Branch RMB 7,323,900.81
Company
Turbine Co. China CITIC Bank Hangzhou Branch RMB 8,954,292.00 Credit
Auxiliary ICBC Banshan Branch Credit
RMB 23,689,717.50
Company
Guoneng ICBC Banshan Branch Credit
USD 2,222,700.00
Company
Guoneng ICBC Banshan Branch Credit
Euro 1,404,914.20
Company
Guoneng ICBC Banshan Branch Credit
RMB 1,526,300.00
Company
Guoneng Credit
China Bank Tangqi Branch RMB 3,067,285.00
Company
Hangfa Ningbo Bank Hangzhou Chengdong The Company
RMB 162,000.00
Company Branch Guarantee
Hangfa Ningbo Bank Hangzhou Chengdong
RMB 9,889,294.00 Credit
Company Branch
Hangfa Hangfa company Self-
ICBC Hangzhou Xiaoshan Branch RMB 215,696.00
Company owned land mortgage
Hangfa Ningbo Bank Hangzhou Chengdong 1,611,600.00 Zhongneng Company
RMB
Company Branch Guarantee
Hangfa 148,000.00 Zhongneng Company
Hangzhou Bank High -tech Branch USD
Company Guarantee
Zhongneng China Bank Hangzhou Qiantang New 63,684,886.70 Credit
RMB
Company area Branch
Zhongneng China Bank Hangzhou Qiantang New 1,881,240.00 Credit
USD
Company area Branch
(II). Contingency
(1) Significant contingency at balance sheet date
In October 019, Hesheng Electric (Shanshan) Co., Ltd (hereinafter referred to as Hesheng Company) filed a
lawsuit against Zhongneng Company in the Turpan Intermediate People's Court, requesting to cancel the "25MW
Backpressure Steam Turbine and Auxiliary Equipment Sales Contract" (contract number: SSDY-2016-019, the
total contract price is 5.75 million yuan) signed by the two parties, and Zhongneng Company to refund the paid
amount of 4.76 million yuan of goods payment and compensate 66.29 million yuan for various losses. In March
2021, the Turpan Intermediate People's Court issued the Civil Mediation Letter, according to which after
completing the maintenance of the rotor and accessories and reinstalling and debugging the steam turbine unit to
achieve 72+24-hour smooth operation, Hesheng Company shall pay the maintenance fee of 1.193 million yuan
and the final payment of the contract of 1.19 million yuan; and if the delivered steam turbine unit has quality
problems and cannot be started and used normally due to reasons attributable to Zhongneng Company, Zhongneng
Company needs to refund the received payment of 4.76 million. After the mediation letter came into effect,
Zhongneng completed the maintenance, installation and commissioning work according to the agreement, the
steam turbine unit was connected to the grid and operated with load, and Hesheng Company unilaterally stopped
the operation of the equipment on the grounds of defectselimination. On April 7, 2022, Hesheng filed a lawsuit in
the People's Court of Shanshan, Xinjiang Uygur Autonomous Region, arguing that the steam turbine unit
delivered by Zhongneng after completing the maintenance still can not be started and used normally, and regarded
as the purpose of the contract can not be achieved, and demanded to terminate the original contract and
Zhongneng Company refunds the paid amount of 4.76 million yuan and compensates various losses of 89.55
million yuan (including 3.55 million yuan for third-party procurement price difference, 85 million yuan for
production loss and 1 million yuan for labor loss). In May 2022, Zhongneng countersued Hesheng Company for
continued to perform the original contract, requiring it to pay maintenance fees of 1.193 million yuan and the final
payment of 1.19 million yuan of the contract. As of the date of approval of this financial report, the case has not
174
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
yet been tried.
(2) The Company have no significant contingency to disclose, also should be stated
There was no significant contingency in the Company.
3.Other
XV. Events after balance sheet date
1. Significant events had not adjusted
2. Profit distribution
3. Sales return
4. Notes of other significant events
(1) Profit distribution after the balance sheet date
According to the 2022 annual profit distribution plan reviewed and passed
at the 32nd Meeting of the eighth board of directorof the Company on
March 27,2022,In 2022, with the total share capital of 980,179,980 shares at
the end of the year deducting 111,800 treasury shares repurchased as of date
of record by Company and 531,180 shares of share capital were cancelled
Profit or dividend proposed to be distributed due to the retirement and resignation of equity incentive objects in
December 2022, that is, 979,537,000 shares, the Company would distribute
cash dividend to all the shareholders at the rate of CNY 3.0 for every 10
shares (with tax inclusive) , 2 bonus shares ，and no reserve would be
converted into share capital.
（2）Important and non-adjustment matters
(1) Capital increase of Ranchuang Company
According to the "Proposal on Capital Increase Namely Investment in Western Power in Zhejiang
Ranchuang Corporation" deliberated and passed by the 31st meeting of the Eighth Session of Board of Directors
of the Company, the Company shall invest in Pengzhou Western Blue Power Technology Co., Ltd (hereinafter
referred to as Western Power Company) through the transfer of equity and capital increase of Ranchuang
Company. According to the capital needs of the Ranchuang Company to invest in Western Power Company and
its continuous operation and development needs, the Company has increased its capital to the Ranchuang by 130
million yuan on January 13, 2023. On January 28, 2023, Ranchuang completed the registration procedures for
industrial and commercial changes.
(2) Acquisition of equity in Western Power
In January 2023, according to the first shareholders’ decision of Ranchuang in 2023, Ranchuang acquired 20%
of the equity of Western Power Company held by Chengdu Mengjiang Investment Group Co., Ltd at a price not
higher than the appraisal value of the corresponding equity assets on the record, and respectively acquired 15%
and 3% of the equity of Western Power Company held by Liaoning Paison Energy Technology Service Co., Ltd
and the natural person Liu Yuhuan at a price of 1.27 yuan per unit of registered capital, and subscribed to the
registered capital of 43 million yuan of the capital increase of Western Power for 1.27 yuan per unit of registered
capital. As of the date of approval of the financial report, the afore-said matters have not yet completed the
registration procedures for industrial and commercial changes,
Ranchuang Company has paid RMB 48.06 million for equity transfer and RMB 54.61 million for premium capital
increase.
(3) Relocation matters of Zhongneng Company
The "Proposal on the Investment and Construction of New Production Base of Zhongneng Company" was
deliberated and passed in the 27th meeting of the 8th session of Board of Directors of the Company, Zhongneng
175
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Company started the overall relocation of the enterprise, and planned to invest in the construction of a new
production base in the Qianjin intelligent manufacturing park of Dajiangdong Industrial Agglomeration Zone in
Qiantang New Area, Hangzhou. According to the needs of the development and construction of Eastern Bay New
City in Qiantang New District, Hangzhou, Zhongneng Company and Hangzhou Eastern Bay New City
Development and Construction Headquarter signed the "Non-residential Housing Relocation Compensation
Agreement" on February 13, 2023, including real estate and decoration and appurtenance compensation within the
scope of relocation, equipment relocation compensation fee, relocation fee and production and business shut-
down loss fee (including employee resettlement compensation fee, operating loss, etc.), signing incentive and
floor area ratio subsidy incentive, etc., with a total relocation compensation amount of RMB 202,227,000. The
relocation compensation fund will be compensated in installments according to the progress of land obtaining and
the actual relocation progress in the Qianjin intelligent manufacturing park by Zhongneng Company.
As of the date of approval of the financial statements, RMB 60,668,100.00 of relocation compensation has been re
ceived.
(4)Henan Junhua Development Co., Ltd litigation matters
In January 2022, Henan Junhua Development Co., Ltd (hereinafter referred to as Henan Junhua Company) sued
the Company in the People's Court of Yicheng DistrictZhumadian City, Henan Province, demanding that the
Company compensate for its losses of RMB 40 million and other expenses such as case acceptance fees and
property preservation fees. In March 2023, the People's Court of Yicheng District Zhumadian City, Henan
Province issued a Civil Judgment, confirming that the case was a contract dispute, dismissing the plaintiff Henan
Junhua Company's claim, and the case acceptance fee is borne by the plaintiff Henan Junhua Company. As of the
date of approval of this financial report, Henan Junhua Company has not appealed, and the first-instance judgment
has taken effect.
XVI. Other significant events
1. The accounting errors correction in previous period
（1）Retrospective restatement
（2）Prospective application
2. Debt restructuring
3. Replacement of assets
(1) Non-monetary assets exchange
(2) Other assets replacement
4. Pension plan
5. Discontinuing operation
6. Segment information
(1) Recognition basis and accounting policies of reportable segment
The Company's main business is to produce and sell industrial steam turbines, their auxiliaries, accessories
and other products. The Company regards such business as a whole to implement management and evaluate the
operating results. Therefore, the Company does not need to disclose segment information. The operating income
and operating costs of the Company by product/region are detailed in Note X VII (61) 1 of the Financial
Statements.
176
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(2) The financial information of reportable segment
(3) There was no reportable segment, or the total amount of assets and liabilities of each part of reportable
segment, shall disclose the reason.
（4）Other note
7. Other important transactions and events have an impact on investors’ decision-making
8. Other
(I) Lease
1. Company as lessee
(1) For information about the right-to-use assets, please refer to Note X VII 25 to this Financial Statement;
(2) The Company's accounting policies for short-term leases and low-value asset leases are detailed in Note X V
42 to this Financial Statement. The amounts of short-term lease expenses and low-value asset lease expenses
included in the current profits and losses are as follows:
Items Current term Same period of last term
Short-term lease expense 3,496,724.77 12,300,753.43
Low-value asset lease expense (except short-term lease) 2,277.88 4,866.90
Total 3,499,002.65 12,305,620.33
(3) Current profit and loss and cash flow related to leasing
Items Current term Same period of last term
Interest expense of lease liabilities 1,585,096.61 559,478.09
Total cash outflow related to leasing 15,314,937.25 7,337,642.50
(4) The maturity analysis of the lease liabilities and the corresponding liquidity risk management are detailed in
Note X 10 of this Financial Statement.
2. Company as lessor
(1) Operating lease
1) Lease income
Items Current term Same period of last term
Lease income 1,674,164.91 2,966,095.79
2) Operating lease assets
Items End amount End of last year
Real estate investment 6,451,478.55 6,903,986.07
Subtotal 6,451,478.55 6,903,986.07
3) According to the lease contract signed with the lessee, the undiscounted lease receipts that will be received in
the future for irrevocably lease
Remaining term End amount End of last year
Within 1 year 1,261,194.10 471,842.25
1-2 years 843,931.92 268,910.00
2-3 years 705,187.41 269,560.00
177
Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
3-4 years 151,722.56 240,792.87
4-5 years 48,677.27 88,893.33
Over 5 years 13,040.00
Total 3,010,713.26 1,353,038.45
(II) Other
According to the planning of the Hangzhou Municipal Government, the property right bodies of 6 companies
including Hangzhou Steam Turbine Holdings 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 1,321,860,410.00 (Including the incentive fee of RMB 35,275,640.00), and this aforementioned
compensation shall be firstly collected by Hangzhou Steam Turbine Holdings.
The Company and its subsidiaries received relocation compensation of RMB197,297,786.03 in the current period,
and received RMB74,060,327.54 in 2023 as of the date of approval of the financial report, with a cumulative
relocation compensation of RMB1,131,878,961.99; The Company and its subsidiaries incurred relocation
expenses of RMB16,150,800.00 in the current period, and accumulated the relocation expenses of
RMB259,997,391.15
The subsidiary steam turbine heavy industry company incurred an asset purchase and construction
expenditure of180,689,420.54 yuan in the current period, with an accumulated asset purchase and construction
expenditure of 795,323,031.10 yuan. The corresponding special payables carried forward for the current period-
relocation compensation of 196,840,220.54 yuan, which is transferred to deferred revenue. The balance of unused
relocation compensation at the end of the period is 2,498,212.20 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
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
End of term Beginning of term
Category Book balance Bad debt provision Book balance Bad debt provision
Book Book
Proporti Proporti Proporti Proporti
Amount Amount value Amount Amount value
on % on % on % on %
Including
Accrual of bad
2,132,02 693,967, 1,438,06 2,347,79 767,426, 1,580,36
debt provision 100.00% 32.55% 100.00% 32.69%
by portfolio 8,307.54 447.49 0,860.05 1,612.01 735.29 4,876.72
Including：
2,132,02 693,967, 1,438,25 2,347,79 767,426, 1,580,36
Total 100.00% 32.55% 100.00% 32.69%
8,307.54 447.49 2,956.87 1,612.01 735.29 4,876.72
Accrual of bad debt provision by portfolio:693,967,447.49
In RMB
Closing balance
Name
Book balance Bad debt provision Proportion
Associated transaction portfolio 97,772,097.67
Aging portfolio 2,034,256,209.87 693,967,447.49 34.11%
Total 2,132,028,307.54 693,967,447.49
Accrual of bad debt provision by portfolio: 693,967,447.49
In RMB
Closing balance
Name
Book balance Bad debt provision Proportion
Relevant information of the provision for bad debts will be disclosed with reference to the disclosure method of
other receivables if the provision for bad debts of bills receivable is accrued according to the general model of
expected credit loss:
□ Applicable √ Not applicable
Disclosure by aging
In RMB
Aging Book balance
Within 1 year（Including 1 year） 724,266,757.49
1-2 years 455,105,646.76
2-3 years 307,281,131.33
Over 3 years 645,374,771.96
3-4 years 185,462,760.12
4-5 years 111,413,542.91
Over 5 years 348,498,468.93
Total 2,132,028,307.54
(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 Closing
Category Opening balance
Accrual Reversed or collected amount Write-off balance
Other
Accrual of bad debt
provision by Single term
Accrual of bad debt
767,426,735.29 -73,004,395.60 454,892.20 693,967,447.49
provision by portfolio
Total 767,426,735.29 -73,004,395.60 454,892.20 693,967,447.49
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(3) The actual write-off accounts receivable
In RMB
Items Amount
Accrual of bad debt provision by portfolio 454,892.20
The significant actual write-off accounts receivable
In RMB
Arising from
Nature of
Amount written Reason for related
Name account Verification procedures
off written off transactions
receivable
(Y/N)
Haimen Daqian Thermal Power Uncollectible The examined and adopted to
Goods 296,392.20 No
Co., Ltd. Board of directors
amount
Hangzhou Steam Turbine Power Uncollectible The examined and adopted to
Goods 158,500.00 Yes
Group Southwest Branch Board of directors
amount
Total 454,892.20
（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 1 733,175,082.50 34.39% 193,382,266.95
Client 2 190,409,119.52 8.93% 112,469,392.80
Client 3 82,411,200.00 3.87% 4,120,560.00
Client 4 56,983,919.41 2.67% 12,796,890.19
Client 5 51,240,000.00 2.40% 2,562,000.00
Total 1,114,219,321.43 52.26%
（5）Account receivable which terminate the recognition owning to the transfer of the financial assets
Other note：
(6)The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts
receivable
2. Other account receivable
In RMB
Items Closing balance Opening balance
Interest receivable
Dividend receivable 110,000.00
Other receivable 8,287,079.99 27,054,816.71
Total 8,397,079.99 27,054,816.71
（1）Interest receivable
1）Classification of interest receivable
2）Significant overdue interest
3）Bad-debt provision
□ Applicable √ Not applicable
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
（2）Dividend receivable
1）Dividend receivable
In RMB
Items End of term Beginning of term
China mechanical and Electrical Institute 110,000.00
Total 110,000.00
2) Significant dividend receivable aged over 1 year
3）Bad-debt provision
□ Applicable √ Not applicable
Other note：
（3） Other accounts receivable
1) Other accounts receivable classified by the nature of accounts
In RMB
Nature Closing book balance Opening book balance
Deposit 11,450,773.84 30,465,219.01
Provisional payment receivable 598,767.58 832,087.45
Other 1,672,805.50 1,999,123.61
Total 13,722,346.92 33,296,430.07
2）Bad-debt provision
In RMB
Stage 1 Stage 2 Stage 3
Expected credit loss over Expected credit losses for
Bad Debt Reserves Expected credit losses Total
life (no credit the entire duration (credit
over the next 12 months
impairment) impairment occurred)
Balance as at January 1, 2022 1,271,720.39 213,125.64 4,756,767.33 6,241,613.36
Balance as at January 1, 2022 in
current
——Transfer to stage II -19,971.45 19,971.45
——Transfer to stage III -168,036.86 168,036.86
Provision in the current period -969,613.33 -25,117.33 188,384.23 -806,346.43
Balance as at December 31, 2022 282,135.61 39,942.90 5,113,188.42 5,435,266.93
Loss provision changes in current period, change in book balance with significant amount
□ Applicable √ Not applicable
Disclosure by aging
In RMB
Aging Book balance
Within 1 year(Including 1 year） 7,013,397.47
1-2 years 399,429.02
2-3 years 1,680,368.59
Over 3 years 4,629,151.84
3-4 years 185.00
4-5 years 100,000.00
Over 5 years 4,528,966.84
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Total 13,722,346.92
3) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision：
In RMB
Amount of change in the current period
Opening
Category Reversed or Closing balance
balance
Accrual collected Write-off Other
amount
Accrual of bad
debt provision 6,241,613.36 -806,346.43 5,435,266.93
by portfolio
Total 6,241,613.36 -806,346.43 5,435,266.93
(4) The actual write-off accounts receivable
(5) Top 5 of the closing balance of the other accounts receivable collected according to the arrears party
In RMB
Proportion of the
total year end Closing balance of
Name Nature Closing balance Aging
balance of the bad debt provision
accounts receivable
Shanghai Customs Waigaoqiao Over 5
Deposit 3,710,320.94 27.04% 3,710,320.94
Office years
Within 1
Shanghai Customs Deposit 906,722.90 6.61% 45,336.15
year
Hangzhou Ganghua Gas Co., Ltd. Deposit 900,000.00 (Note) 6.56% 320,000.00
Nantong Jiaxing Thermoelectric
Deposit 700,000.00 2-3 years 5.10% 210,000.00
Co., Ltd.
Within 1
Guoneng Company Other 675,477.72 4.92%
year
Total 6,892,521.56 50.23% 4,285,657.09
[Note]2-3 years:800,000.00 yuan,4-5 years:100,000.00 yuan.
(6) Accounts receivable involved with government subsidies
(7) Other account receivable which terminate the recognition owning to the transfer of the financial assets
(8) The amount of the assets and liabilities formed by the transfer and the continues involvement of other accounts
receivable
Other note:
3. Long-term equity investment
In RMB
Closing balance Opening balance
Items Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investments in
400,480,973.25 400,480,973.25 191,793,655.63 191,793,655.63
subsidiaries
Total 400,480,973.25 400,480,973.25 191,793,655.63 191,793,655.63
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
(1)Investments in subsidiaries
In RMB
Increase /decrease
Closing balance
Opening Withdrawn Closing
Investees Add Decreased of impairment
balance impairment Other balance
investment investment provision
provision
46,286,513.41 46,286,513.41
Auxiliary
Machine Co.
40,000,389.56 40,000,389.56
Packaged Co.
Machinery 7,968,000.00 7,968,000.00
Company
Turbine Company 20,208,700.14 584,992.83 20,793,692.97
Zhongneng 27,644,475.06 27,644,475.06
Company
Casting Company 11,220,000.00 11,220,000.00
New Energy 1,193,092.39 204,449,713.79 205,642,806.18
Company
Sales Company 13,721,544.50 13,721,544.50
China Mechanical 1,533,768.30 1,533,768.30
Institute Company
Ranchuang 22,017,172.27 3,652,611.00 25,669,783.27
Company
Total 191,793,655.63 208,687,317.62 400,480,973.25
（2）Investments in associates and joint ventures
（3）Other note
4. Business income and Business cost
In RMB
Items Amount of current period Amount of previous period
Income Cost Income Cost
Main business 3,165,445,499.40 2,453,557,174.72 3,346,432,079.14 2,393,749,908.61
Other 20,090,442.76 9,543,498.07 21,106,635.44 27,015,078.28
Total 3,185,535,942.16 2,463,100,672.79 3,367,538,714.58 2,420,764,986.89
Income related information：
Information related to performance obligations:
The Company’s sales link has entered into a legal and effective sales contract/order with the customer. The
contract/order clarifies the terms of the subject product, specification model, transaction quantity, unit price,
settlement method, delivery obligation, etc., and the performance obligation is clear, and it is the single
performance obligation at a single point in time. The transaction prices of the Company’s various product
contracts/orders are clear, and the Company will confirm revenue after fulfilling the relevant performance
obligations in accordance with the contract/order related agreements.
Information related to transaction value assigned to residual performance obligations:
The income corresponding to the performance obligations that have not been performed or have been performed
incompletely but the contract has been signed at the end of the reporting period is RMB 5,036,010,000.00.
Other note：
5. Investment income
In RMB
Items Occurred current term Occurred in previous term
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Long-term equity investment income by equity
95,156,322.10 95,156,322.10
method
Long-term equity investment income by Cost
90,883,630.00 153,319,630.00
method
Investment income obtained from the disposal of
31,896,620.07 75,612,246.06
trading financial assets
Investment income obtained from the disposal of
208,000.00
other non-current financial assets
Financing discount loss -1,721,444.27 -2,924,174.07
Dividend income from other equity instrument
272,641.24
investments during the holding period
Debt restructuring gains -102,750.00
Total 216,423,127.90 321,333,915.33
6.Other
XVIII. Supplement information
1. Particulars about current non-recurring gains and loss
√ Applicable □Not applicable
In RMB
Items Amount Notes
Mainly due to the investment income of -563,981.22
Non-current asset disposal gain/loss -792,933.90 yuan generated by the disposal of the equity of the
Indonesian company in the current period
(1) The net government subsidy recognized as a result
of the relocation compensation of the Shiqiao Road
plant is RMB21,141,733.79 (the government subsidy
Governmental Subsidy accounted as current related to the relocation compensation is
gain/loss, except for those subsidies at with RMB37,292,533.79, and lessening the relocation
amount or quantity fixed by the national 57,161,745.42 expenses of RMB16,150,800.00); (2) The government
government and closely related to the Company’s subsidy for the relocation compensation confirmed by
business operation. the old factory in Hangzhou is 8,663,283.72 yuan; (3)
the funded and confirmed government subsidy by
Zhejiang Gas Turbomachinery Manufacturing
Innovation Center is 5,542,854.92 yuan.
Capital occupation charges on non-financial
enterprises that are recorded into current gains 127,908.28
and losses
Gains/losses of debt restructure 7,035,391.36
Gain and loss from change of the fair value
arising from transactional monetary assets,
transactional financial liabilities as held as well
as the investment income arising from disposal Mainly due to the investment income of
of the transactional monetary assets, 36,974,039.31 36,295,722.69 yuan of bank wealth management
transactional financial liabilities and financial products
assets available for sale excluding the effective
hedging transaction in connection with the
Company’s normal business
Mainly due to the reverse of a provision of 19.8
Reverse of the provision for impairment of
million yuan for bad debts due to the collection of
accounts receivable undergoing impairment test 20,281,569.00
long-term receivables with single accrual in the
individually
current period
Income from custodian charge obtained from Mainly due to then non-operating income -
entrusted operation 54,844,106.11
compensation of 56,511,643.28 yuan
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Hangzhou Steam Turbine Group Co.,,Ltd. 2022 Annual Report
Mainly due to the immediately executed share
Operating income and expenses other than the payment confirmed by the casting company of -
-1,732,271.11
aforesaid items 2,150,400 yuan and other income - withholding
personal income tax fee refund
Less: Influenced amount of income tax 17,931,285.99
Amount of influence of minority interests（After
13,526,901.46
tax）
Total 142,441,367.02 --
Details of other profit and loss items that meet the non-recurring profit and loss definition
□ Applicable√ Not applicable
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in
the Explanatory Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the
Public-Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said
explanatory announcement as a recurrent gain/loss item.
□ Applicable √Not applicable
2. Return on net asset and earnings per share
Earnings per share
Weighted average
Profit of report period Basic earnings per Diluted earnings per
returns equity(%)
share(RMB/share） share(RMB/share)
Net profit attributable to the Common
6.47% 0.54 0.54
stock shareholders of Company.
Net profit attributable to the Common
stock shareholders of Company after 4.71% 0.39 0.39
deducting of non-recurring gain/loss.
3. Differences between accounting data under domestic and overseas accounting standards
（1）Simultaneously pursuant to both Chinese accounting standards and international accounting standards
disclosed in the financial reports of differences in net income and net assets.
□ Applicable□√ Not applicable
（2）Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese
accounting standards.
□ Applicable□√ Not applicable
(3)Explanation of the reasons for the differences in accounting data under domestic and foreign accounting standa
rds. If the data that has been audited by an overseas audit institution is adjusted for differences, the name of the ov
erseas institution should be indicated
4.Other
Hangzhou Steam Turbine Power Group Co., Ltd.
March 29,2023
185
