Stock Code: 200771 Stock ID: Hangqilun B Announcement No. 2019-34
Hangzhou Steam Turbine Co., Ltd.
Announcement on the Capital Increase of Hangzhou Steam Turbine Heavy
Industry Co., Ltd.
The members of the Board and the Company acknowledge being responsible for the truthfulness, accuracy, and completeness of the announcement. Not any false record, misleading statement or significant omission carried in this announcement.
I. Overview of capital increase
1.Basic Information
The Company founded a wholly-owned subsidiary--Hangzhou Steam Turbine Heavy Industry Co., Ltd. (hereinafter referred to as Steam Turbine Heavy Industry) with a contribution of RMB 360 million on October 25, 2013. In December 2016, CDB Development Fund Co., Ltd. capital increased capital of RMB 208 million (including RMB 198.966865 million input in the registered capital) to Steam Turbine Heavy Industry. Upon the end of the capital increase, the registered capital of Steam Turbine Heavy Industry rose to RMB 558.966865 million.
To gratify the fund demand of Steam Turbine Heavy Industry for business development and boost project construction at Steam Turbine Heavy Industry, the Company is planned to increase capital of RMB 462.731965 million to Steam Turbine Heavy Industry (including RMB 441.033135 million input in the registered capital and RMB 21.69883 million input in the capital reserve). Upon the end of the capital increase, the registered capital of Steam Turbine Heavy Industry will rise to RMB 1 billion.
2. Board of Directors' deliberation
On April 16, 2019, the Company held the 32nd meeting of the 7th Board of Directors by means of telecommunication voting. With 10 votes in favor, 0 votes against and 0 abstentions, the “Proposal on Capital Increase for Steam Turbine Heavy Industry” was considered and passed. According to relevant provisions, submission of the preceding proposal to the General Shareholders' Meeting for deliberation is not needed.
3.The transaction neither constitutes a major asset restructuring according to Measures for the Administration of Major Asset Restructuring of Listed Companies. without the approval of relevant departments.
4. The transaction does not constitute a related transaction of the Company.
II. Basic information of the object of increase capital
(I) Basic condition of Steam turbine heavy Industry
1.Name :Hangzhou Steam Turbine Heavy Industry Co., Ltd.
2. Unified social creditcode：91330100079344841P
3. Enterpriseproperty：Limited liability company
4.Address: 3/ F Building 3 No.503 Xingguo Road Qianjiang Economic Development Zone
Hangzhou City
5. Establishment Date: October 25, 2013
6. Registered capital: RMB 558.966865 million
7.Legal representative : Li Jiansheng
8. Main business: Manufacturing: Industrial turbomachinery equipment; service: technology
development and after-sales service of steam turbines, gas turbines, compressors, rotating
machinery and auxiliary equipment; wholesale: steel, building materials. (Items subjecting to
approval according to law may be operated after gaining the approval by relevant departments).
9. Equitystructure：Hangzhou Steam Turbine Co.,Ltd, shareholding ratio of64.4%; CDB
Development Fund Co., Ltd. shareholding ratio of35.6%.
10. Relation with the Company: Steam Turbine Heavy Industry is a holding subsidiary covered in the Company's consolidated statements.
11. Recent financial information
In RMB
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|-|-|-|-|-|-|
|Periods|Gross assets|Gross Liabilities|Net profit|Operation revenue|Net profit|
|2017|593,199,894.85|9,329,647.16|583,870,247.69|0|1,944,162.19|
|2018|601,979,851.73|15,510,213.42|586,469,638.31|124,421,761.96|2,599,390.62|

 12. Defaulter: Steam Turbine Heavy Industry has a good credit standing and is not rated a defaulter.
(II) Amount of contribution and shareholding ratio of each shareholder of Steam Turbine Heavy Industry before and after the capital increase
1. Before capital increase
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|-|-|-|
|Name of shareholder|Contribution Amount( Ten thousands yuan）|Capital-contribution Ratio|
|Hangzhou Steam Turbine Co., Ltd.|36,000|64.40%|
|CDB Development Fund Co., Ltd.|19,896.6865|35.60%|
|Total|55,896.6865|100%|

 2. After capital increase
||||
|-|-|-|
|Name of shareholder|Contribution Amount( Ten thousands yuan）|Capital-contribution Ratio|
|Hangzhou Steam Turbine Co., Ltd.|80,103.3135|8 0 . 1 0 %|

||||
|-|-|-|
|CDB Development Fund Co., Ltd.|19,896.6865|19.90%|
|Total|100,000|100%|

 (III) Way of capital increase
1. Amount of capital increase
The Company is planned to increase capital of RMB 462.731965 million to Steam Turbine Heavy Industry by cash (including RMB 441.033135 million input in the registered capital and RMB 21.69883 million input in the capital reserve).
2. Determination of price of capital increase
The Company determines the price of the increased registered capital of Steam Turbine Heavy Industry subject to its net assets per share audited on December 31, 2018.
According to the 2018 audit report issued by Pan-China Certified Public Accountants to Steam Turbine Heavy Industry (Tian Jian Shen[2019] No.152), Steam Turbine Heavy Industry had net assets of RMB 586.469638 million by the end of 2018. including:
Net assets of Steam Turbine Heavy Industry pershare=net assets of Steam Turbine Heavy Industry by the end of 2018/total capital stock of Steam Turbine Heavy Industry by the end of2018=RMB 586.469638 million /RMB 558.966865 million=RMB 1.0492
=RMB 10,492
3.Source of funds: Own-funds
4. Way of contribution: Cash contribution
5. Upon the end of the capital increase, Steam Turbine Heavy Industry remains a subsidiary covered in the Company's consolidated statements.
6. Upon the end of the capital increase, the Company will not guarantee for or give any financial help to others.
III. Purpose of the transaction, existing risks and impact on the Company
1. The Company makes the capital increase with the purpose of meeting the demand of its holding subsidiary Steam Turbine Heavy Industry for funding construction, which conforms to the Company's strategy and total benefit.
2. Matters of the capital increase agree with relevant provisions in the Company's Articles of Association and Company's Foreign Strategic Investment and Cooperation Management System. The funds for the foreign investment are the Company's own funds which will not have any significant impact on its cash flow.
3. The capital increase does not constitute any major asset restructuring or any related
transaction. The capital increase will cause no alteration to the Company' range of consolidated
statements, have no bad impact on the Company's financial situation and business results and do
no harm to benefits of the Company or shareholders herein.
IV. Other
The Company will keep following the progress of the capital increase and perform the duty of information disclosure in accordance with relevant provisions. Please note the General investors investment risk.
This announcement is hereby made.
The Board of Directors of Hangzhou Steam Turbine Co., Ltd.
April 17, 2019