Hangzhou Steam Turbine Co., Ltd.
Annual Report 2015
Released on March 19, 2016
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 I. Important Remarks, Table of Contents, and Definitions
The Board of Directors, The Supervisory Committee, the supervisors and the directors of the Company guarantee that there are no significant omissions, fictitious or misleading statements carried in the Report and we will accept individual and joint responsibilities for the truthfulness, accuracy and completeness of the Report.
Chairman Mr. Zheng Bin, Chief Financial Officer Pu Yangshuo, and the Chief of Accounting Department Ms. Zhao Jiamao 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 Annual Report contains prospective descriptions, whichdoesn’t constitute substantial commitment to investors. Investors are requested to be aware of the risks attached to their investment decisions.
Profit distribution preplan, which was adopted at the board meeting, is: The Company will not distribute cash dividend or bonus shares, neither capitalizing of common reserves for the report period.
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 Table of Contents
I.Important Notice, Table of contents and Definitions
II. Basic Information of the Company and Financial index
III. Outline of Company Business
IV.Management’s Discussion and Analysis
V. Important Events
VI. Change of share capital and shareholding of Principal Shareholders
VII. Situation of the Preferred Shares
VIII. Information about Directors, Supervisors and Senior Executives
IX. Administrative structure
X. Financial Report
XI. Documents available for inspection
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 Glossary
||||
|-|-|-|
|Terms|Defined as|Description|
|Company, the Company|Defined as|Hangzhou Steam Turbine Co., Ltd.|
|The Group, Hangqi Group|Defined as|Hangzhou Steam Turbine Power Group Co., Ltd.|
|the report period, the current period, the current|||
||Defined as|January 1 – December 31 2015|
|year|||
|||Hangzhou Zhongneng Steam Turbine Power Co., Ltd. – the holding|
|Zhongneng Co.|Defined as||
|||subsidiary of the Company|
|||Hangzhou Steam Turbine Casting Co., Ltd. – the holding subsidiary|
|Casting Co.|Defined as||
|||of the Company|
|||Zhejiang Steam Turbine Packaged Technology Development Co.,|
|Packaged Tech. Co.|Defined as||
|||Ltd. – the holding subsidiary of the Company|
|||Hangzhou Steam Turbine Machinery Equipment Co., Ltd. - the|
|Machinery Co.|Defined as||
|||holding subsidiary of the Company|
|||Hangzhou Steam Turbine Auxiliary Machinery Co., Ltd. - the|
|Auxiliary Machine Co.|Defined as||
|||holding subsidiary of the Company|
|||Zhejiang Turbine Import & Export Co., Ltd. – the holding subsidiary|
|Turbine Co.|Defined as||
|||of the Company|
|||Hangzhou Steam Turbine Heavy Industry Co., Ltd. - the holding|
|Heavy Industry Co.|Defined as||
|||subsidiary of the Company|
|The Board of Directors|Defined as|The Board of Directors of Hangzhou Steam Turbine Co., Ltd.|
|The Supervisory Committee|Defined as|The Supervisory Committee of Hangzhou Steam Turbine Co., Ltd.|
|The Shareholders’ Meeting|Defined as|The Board of Directors of Hangzhou Steam Turbine Co., Ltd.|
|RMB, RMB0’000, RMB000’000’000|Defined as|RMB Yuan, RMB10 thousand Yuan, RMB100 million Yuan|
|MW|Defined as|Unit of power: 1000KW|
|PLM|Defined as|Product life circle management information system|
|BFPT|Defined as|Boiler Feeding Pump Turbine|
|PTA|Defined as|terephthalic acid, an organic chemical material|

Prompt of Risks
Risks in theCompany’s business operation are described in theDirectors’ Report in Chapter IV.
TheCompany’s official disclosure presses: Hong Kong Commercial Daily (English), Shanghai Securities Daily (Chinese), Securities Times (Chinese), and http://www.cninfo.com.cn (Chinese& English). Please refer to these medias for the official disclosure of the Company and be aware of investment risks.
II. Basic Information of the Company and Financial index
I. Basic Information
|||||
|-|-|-|-|
|Stock ID|Hangqilun B|Stock Code|200771|
|Stock Exchange Listed in|Shenzhen Stock Exchange|||
|Company Name in Chinese|杭州汽轮机股份有限公司|||
|Short form of Company Name||||
||杭汽轮|||
|in Chinese||||
|Name in English|HANGZHOU STEAM TURBINE CO.,LTD|||
|Abbreviation in English|HTC|||

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
|||
|-|-|
|Legal representative:|Zheng Bin|
|Reg. Add.|No. 357 Shiqiao Rd. Hangzhou|
|Post Code|310022|
|Office address|No. 357 Shiqiao Rd. Hangzhou|
|Post Code:|310022|
|Web Address|www.htc.cn|
|Email.|ychq@htc.cn|

II. Contacts
||||
|-|-|-|
||Secretary of the Board|Representative of Stock Affairs|
|Name|Yu Changquan|Wang Gang|
|Address|No. 357 Shiqiao Rd. Hangzhou|No. 357 Shiqiao Rd. Hangzhou|
|Tel.|0571-85780432|0571-85780198|
|Fax.|0571-85780433|0571-85780433|
|Email.|ychq@htc.cn|wg@htc.cn|

III. Place for information disclosure
|||
|-|-|
|Press media for information disclosure|Securities Times, Shanghai Securities Daily, Hong Kong Commercial Daily|
|Web address for the annual report as assigned by||
||http://www.cninfo.com.cn|
|CSRC.||
|Place for inquiry of the annual report|The Board of Directors’ Office of Hangzhou Steam Turbine Co., Ltd.|

 IV. Change of Business Registration
|||
|-|-|
|Organization code|704202620|
||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|
|Change of main business since listed|of self-manufactured products and the providing of relevant after-sales|
||service; sales and import & export of power plant, industrial driving,|
||industrial turbine equipment and complete equipment. For those involve in|
||quota or licensing shall follow legal procedures.|
||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|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
|||
|-|-|
||service; sales and import & export of power plant, industrial driving,|
||industrial turbine equipment and complete equipment.|
|Change of holding shareholder (if any)|No change in holding shareholder since listed|

V. Miscellaneous information
CPA hired by the Company
|||
|-|-|
|Name of the CPA|Pan-China Certified Public Accountants (Special general partnership)|
|Address of the CPA|4-10/F Xihu Business Building, 128 Xixi Road, Hangzhou, Zhejiang|
|Name of CPA signed on the||
||Jiang Xiaodong, Zhu Guogang|
|auditors’ report||

The sponsor performing persist ant supervision duties engaged by the Company in the reporting period.
Not applicable
The Financial advisor performing persist ant supervision duties engaged by the Company in the reporting period Not applicable
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 VI.Summary of Accounting data and Financial index
May the Company make retroactive adjustment or restatement of the accounting data of the previous years due to change of the accounting policy and correction of accounting errors.
□ Yes√ No
||||||
|-|-|-|-|-|
||2015|2014|Changed over last year（％）|2013|
|Operating Gross income（RMB）|2,600,072,151.63|3,722,331,920.13|-30.15%|5,064,643,686.67|
|Net profit attributable to the shareholders of the|-162,809,311.79|352,077,352.23|||
||||-146.24%|654,179,550.68|
|listed company（RMB）|||||
|Net profit after deducting of non-recurring gain/loss|||||
|attributable to the shareholders of listed company|-196,163,971.66|322,785,643.46|-160.77%|617,662,580.46|
|（RMB）|||||
|Cash flow generated by business operation, net|355,677,773.05|283,728,971.92|||
||||25.51%|369,664,531.93|
|（RMB）|||||
|Basic earning per share(RMB/Share)|-0.22|0.47|-146.81%|0.87|
|Diluted gains per share(RMB/Share)(RMB/Share)|-0.22|0.47|-146.81%|0.87|
|Net asset earning ratio（%）|-3.77%|8.12%|-11.89%|16.10%|
|||End of|||
||End of 2015||Changed over last year（％）|End of 2013|
|||2014|||
|Gross assets（RMB）|7,683,777,005.63|7,552,058,947.02|1.74%|7,645,648,806.43|
|Net assets attributable to shareholders of the listed|4,219,337,312.80|4,450,598,244.32|||
||||-5.20%|4,242,074,281.15|
|company（RMB）|||||

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 VII.The differences between domestic and international 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.
N/A
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards.
N/A
VIII.Main Financial Index by Quarters
In RMB
||||||
|-|-|-|-|-|
||First quarter|Second quarter|Third quarter|Fourth quarter|
|Operating income|492,164,586.38|562,831,739.86|493,672,866.88|1,051,402,958.51|
|Net profit attributable to the shareholders of the listed company|7,698,917.29|-17,981,250.61|-78,993,858.42|-73,533,120.05|
|Net profit after deducting of non-recurring gain/loss attributable to the|||||
||2,401,000.86|-24,565,041.21|-88,136,672.99|-85,863,258.32|
|shareholders of listed company|||||
|Net Cash flow generated by business operation|-49,305,018.54|151,126,591.83|173,788,256.73|80,493,666.92|

 Not exist between the above financial index or the index with its sum and the financial index of the quarterly report as well as semi-annual report index disclosed by the Company.
IX.Items and amount of non-current gains and losses
In RMB
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
||||||
|-|-|-|-|-|
|Items|Amount (2015)|Amount (2014)|Amount (2013)|Notes|
|Non-current asset disposal gain/loss(including the write-off part for which assets|-441,916.66||||
|||83,044.88|29,279,598.21||
|impairment provision is made)|||||
|Govemment subsidies recognized in current gain and loss(excluding those closely|15,752,977.27||||
|||12,268,275.22|16,517,582.75||
|related to the Company’s business and granted under the state’s policies)|||||
|Gains and losses from change of fair values of held-for-transaction financial assets|19,624,429.30||||
|and financial liabilities except for the effective hedge business related to normal|||||
|||20,631,255.58|16,533,520.13||
|business of the Company, and investment income from disposal of transactional|||||
|financial assets and liabilities and financial assets available for sale|||||
|Other non-operating income and expenditure beside for the above items|12,164,381.63|7,401,855.41|248,232.04||
|Less: Influenced amount of income tax|8,553,255.35|8,283,775.86|11,084,671.48||
|Amount of influence of minority interests（After tax）|5,191,956.32|2,808,946.46|14,977,291.43||
|Total|33,354,659.87|29,291,708.77|36,516,970.22|--|

 None of Non-recurring gain /loss items recognized 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 Co., Ltd. Annual Report 2015 III. Outline of Company Business
I. Main Business the Company is Engaged in During the Report Period
The company is the leading supplier of industrial turbomachinery equipment and its service in the domestic market, mainly engaging in the design, manufacturing of industrial steam turbine and gas turbine and so forth of rotating machines in industrial turbomachinery.
The Industrial steam turbine uses high temperature and high pressure steam as the working medium, and by means of operations of the steam turbine, the heat energy will converted into mechanical energy to drive various kinds of industrial equipments. According to the driving objects, the Industrial steam turbine can be divided into two categories: industrial steam turbine for driving and industrial steam turbine for power generation. The industrial steam turbine for driving is mainly used in driving the compressor, or blower, or pump, or pressing machine, or other rotating machinery, which applied to industries, such as oil refining, chemical, fertilizer, building materials, metallurgy, electric power, light industry and environmental protection, and the industrial steam turbine for driving is the key power equipment for various kinds of large-scale industrial equipments. The industrial steam turbine for power generation is mainly used for driving generator and to provide the heat energy, which applied to enterprises-owned power station, regional heat and power cogeneration project, power generation by heat recovery in industrial processes, urban garbage power plant and gas -steam combined cycle power plant set by each industrial sector. Currently, the gas turbine made by the company is mainly applied to utilizing the remaining heat of furnace tail gas for power generation in the metallurgical industry.
At present, the company is the largest base forR&D and manufacturing of industrial steam turbine in China, also the company is the major unit of standard-establishment of industrial steam turbine domestically, with domestic market share remained the largest in the industrial driving field. The characteristics of thecompany’s business model is production determined by sales prospect, and carries out design and manufacturing for each project of each customer to maximally satisfy the individual demand coming from thecustomer’s project. The company has adopted advanced technology of modularization design to realize fast product development and design, meanwhile utilizing information technology to associate manufacturing resources for achieving flexible production. Besides, the company can provide engineering solutions, general contracting of the project, product transportation and maintenance, remote monitoring and other relevant services for customers. Thecompany’s gas-turbine business adopted the model of independent sales and cooperative production by means of acquiring orders by engineering equipment bidding in the newly established or renovation projects in the domestic large-scaled metallurgical industry, in which the product design was provided by the technical cooperation party, and the main parts and components of the product were organized by domestically producing and purchasing, with some component purchased from abroad. The company provides the guarantee service for theproduct’s operation in the whole life-cycle and that is the service model for establishing long-term business relationship with customers.
As a large industrial equipment manufacturing enterprise, the main driving factors of the company's operating performance are concluded as the following aspects: (1) Market demand. This driving factor is highly correlated with the level of investment in fixed assets of the domestic industries, such as energy industry, chemical industry and metallurgy industry. When the economy grows rapidly, the demand for industrial equipment will be reflected
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 firstly. Due to the extent of prosperity and the investment cycle of different industries are different, the relevant market demands will be presented in different undulations. In recent years, along with the slowdown of the domestic economic and continuous economic structure adjustment and strict controlling of newly increased capacity, the market demand for industrial turbine increased weakly, but the demand for turbines applied to the energy-efficient and environmental-friendly field kept growing. (2) Technological innovation. The company continuously carried out the technological innovations on product structure, key component, fundamental materials and manufacturing technique, also the company jointed with some domestic professionalR&D institutions and universities and colleges for researching new technologies to keep thecompany’s leading position and its competitive advantage in the domestic high-end market. (3) Brand and market position. Thecompany’s products have a good reputation and extensive brand influence in the domestic market, but in the international market, comparing with the international well-known enterprises, the company is far behind. (4) 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.
II. Major Changes in Main Assets
1.Major Changes in Main Assets
|||
|-|-|
|Main assets|Major changes|
|Equity assets|No major changes|
|Fixed assets|No major changes|
|Intangible assets|No major changes|
|Construction in progress|No major changes|

2. Main Conditions of Overseas Assets
□ Applicable√Not applicable
III. Analysis On core Competitiveness
As the largest developing and manufacturing base of industrial steam turbine throughout the country, the Company has been in the territory with years of experiences, which provided obvious advantages from technical research to production, from marketing to customer services.
1. 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.
Secondly, the company production model of modular design, concurrent engineering, enabled the company to
balance the production cost, delivery date and customer demands.
Thirdly, the Company has established strategic co-operations with main customers in the country. Further
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 marketing approaches were carried on by involving itself in thecustomers’ 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 theCompany’s own products, but also accumulated rich experiences in technical maintenance and reengineering of othermanufacturers’ 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, designing, technique, testing, and quality control. An excellent workforce provides a sound foundation to lift quality and services.
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 IV.Management’s Discussion and Analysis
I. General
In year 2015, the economic situation of China and other countries was still grim. The global economic growth was lower than generally expected, but the growth of the developed countries was picking up, yet with slow rate. However, the growth of the emerging markets and the developing countries increasingly declined, thus the international trading declined in both price and volume due to a weak demand. The Chinese economy was in the process of intensive economic structure adjustment and the continuous economic declining for China is more likely, which exacerbated the differentiation of each industry, hence the industries categorized in resource and heavy industry were generally fell into difficulty. The steam turbine industry was also in a stagnant circumstance, of which the scale and profit were further declined. Upon the aforesaid situation, thecompany’s operation and production experienced an unprecedented impact. Although the company fulfilled all the contracts of the year with products finished in time, but due to the influence of the market environment and postponedclient’s project, the company had not achieved the anticipated sales goal of the year in the reporting period and the business performance fell sharply. For the report period, the Company has realized turnover of RMB2,600,072,151.63, a decrease of30.15%; total profit of RMB-148,188,507.04, a decrease of129.56%; net profit attributable to owners of the parent company of RMB-162,809,311.79, a decrease of146.24%.
2015 changes in major financial statistics
In RMB
||||||
|-|-|-|-|-|
|Items|||Change||
||||over same||
||This report term|Same period last year||Cause of change|
||||period last||
||||year||
|Operating income|2,600,072,151.63|3,722,331,920.13|-30.15%|Mainly due to the fatigued market of turbines,leading to sharp declining in sales revenue.|
|Operating cost|1,805,941,522.77|2,363,125,652.50|-23.58%|Mainly due to the declining of operating revenueand the corresponding declining of operating costs,as the intensifying competition, the gross profit ratedeclined and the operating costs declined in fewerpercentage compared with declined percentage ofthe operating revenue|
|Sales expense|156,702,806.61|158,590,899.44|-1.19%|Mainly due to maintaining the market andmaintaining the sales efforts.|
|Administrative expense|608,221,129.48|592,118,584.23|2.72%|Mainly due to the company’s R&D expensesincreased compared with the last period.|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
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|-|-|-|-|-|
|Asset impairment loss|245,130,878.11|121,146,387.69|102.34%|Mainly due to accounts receivable with long agingrapidly increased and the difficult collection|
|Cash flow generated bybusiness operation, net|355,677,773.05|283,728,971.92|25.36%|Mainly due to the reduced sales and thecorresponding sharp decline of tax payment|
|Net cash flow generated byinvestment|-96,009,947.10|-125,768,539.13|23.66%|Mainly due to the company’s investment onWuxi Xinchang Company and the netfinancial products to reduce in the sameperiod of last year|
|Net cash flow generated byfinancing|-139,775,665.55|-406,358,256.90|65.60%|Mainly due to the decrease of paying back the bankloans and the dividend compared with the lastperiod|

During the reporting period, while facing the complex economic environment, thecompany’s management proposed the working guiding principle of "Strict management, grasping the market, reducing the costs and controlling the risk”, and promoted the transformation and reform in terms of technology, market, operation and management with active business structure adjustment, internal resources integration, process optimization and restructuring and strict operation costs controlling for enhancing the risk prevention ability, and meanwhile carrying forward the new markets and new business layout for thecompany’s sustainable development.
（1）Marketing efforts
During the reporting period, according to the profound changes of the market demand, the company timely adjusted its market strategy and established four business sections that are steam turbine section, gas turbine section, nuclear power section and services section. Besides, the company integrated the resources of domestic market and foreign market, strongly promoted the combined sales of driving unit and power generator unit, elaborately cultivated the gas-turbine market, actively explored the nuclear power business and contrived to establish the service market.
Because of the excessive capacity in industries, such as petroleum industry, chemical industry, coal chemical industry and metallurgy industry, the market of industrial turbines for driving is continuously affected, in particular, the relevant projects are obviously reduced and the market competition is intensifying. However, by virtue of technological advantages in this field, the company obtained the 10 million tons refinery project and the 1.2 million tons ethylene project of CNOOC Huizhou. Benefited from the policy of Energy Conservation and Emission Reduction, the power generation market developed well with obvious growth. In the thermoelectric field, the company has successively carried out sales promotions in the central region and the southeast region, resulted in major breakthrough of regional markets. The set of Xiamen Xianglu Petrochemical PTA50MW is thecompany’s largest power generation set utilizing the remaining heat with low pressure, which has laid a solid foundation for the subsequently promotion of the same kind project. The company has made breakthroughs in the selection argument in the field of unitizing heat from incineration of waste chemical solids for power generation. In the traditional power market, the company cooperated with the power plants and the relevant design institutes for optimizing the system, attempting to directly incorporate the back pressure unit into the electricity system of
the plant, and that would bring prominent energy-efficiency. Besides, the company had make breakthroughs in the
induced draft fan and boiler for power stations, yet the types of 660MW and 1000MW turbine for full capacity of
feed-water pump are favored by the market, which would further increase the market share.
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 As to the new business, the company obtained orders for furnace-gas turbines applied to the metallurgical industry that situated in the deep adjustment, and via contractual energy management model, the company has cooperated with the engineering corporation for enhancing the product competiveness. To deal with the possible major changes of the energy structure in the future of the country, the company has actively carried out the market research and promotion workings for the new gas turbine of medium and high heat-value materials, such as gas, COG and coal gas, and the company has cooperated with a number of world famous enterprises on business exploration. In the nuclear power market, the company was contracted for Fuqing Nuclear Power Plant and No.5 and No.6 units of Hongyanhe Nuclear Power Plant and the nuclear power project in Pakistan, yet it was the first time for wading into abroad, but that presented the company has worthy market potential.
The company has firmly implemented the “going abroad” strategy to continuously explore the foreign market. The company has been closely following the national strategy of “One Belt One Road” and gained achievements in the markets, such as India market, Pakistan market and Brazil market. By long-term follow-up, the company obtained the sugar project in Vietnam, and the company had built benchmark projects for the local high-end customers. Besides, the company obtained orders from Iran and it had achieved the market breakthrough by sale of the eighty thousand grade air separation steam turbine. Moreover, the company had gained good business performance for feed-water pumps in the foreign market.
（2）Technological innovation to seize the initiative
During the reporting period, the company continued to increase the investment on research, and by grasping the trend of domestic and international market, the company effectively integrated the technological advantages and market resources to meet the needs of the increasingly updated products. The company had set 33 items on key subject research and developed 7 new products in the year. The first set of one hundred thousand grade air separation steam turbine for driving developed by the company successfully passed the acceptance, marking the company's design and manufacturing capacity of industrial steam turbine has entered into advanced ranks in the world. The axial-exhaust steam turbine has been successfully developed and designed by the company and it has been exported to the foreign market. For handling the upgraded demand of the thermal power market, the company materially developed a series of high-efficient thermal power generators and those had been used. The first backpressure steam turbine unit with maximum power of 90 thousand kilowatts has completed the commission test. The frequency test of K5.0 twisted blade has been completed and the shape of T9 blade that is a newly high-efficient blade has been determined. As to the product standard, the company actively promoted the establishment of EU standard material system for the steam turbine and the establishment of metal materials standard system for the gas turbine and presided over industry standard revisions on three items. There were many technical breakthroughs, including achievements, such as blade-in-vertical-tree type blade root groove, high precision double T-type groove processing, the technique of twisted blade with side steam entering Steilin brazing alloy sheet and 3D simulation of the rotor processing, which enhanced the product performance and the manufacturing quality. The path of the independentR&D of gas turbine was initially established and every basic research pertaining to it was carried out in order.
During the reporting period, thecompany’s “Project on LNK series of industrial steam turbine of efficiently utilizing low-quality remaining heat" was awarded the second class prize of science and technology of the machinery industry, and thecompany’s “The turbine for the induced draft fan of the boiler of 1000MW supercritical thermal power unit” was awarded the first prize of Zhejiang Machinery Industrial Science and Technology Award. Besides, the two products, the turbine for utilizing the left heat or pressure of the steam to generate power and the turbine of utilizing the surplus heat in the petrochemical industry, were not only the high energy-conservation equipments, but were identified as “Zhejiang High-quality Products”. Thecompany’s
project of "Development of the ethylene refrigeration compressor unit for 800 thousand tons / year ethylene
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 equipment" passed the appraisal conducted by the materials and equipment department of Sinopec. Moreover, thecompany’s project of Million Level of Full Capacity Water-cooling BFPT Item obtained the first set product of key field in equipment manufacturing industry of Zhejiang Province, as well as it has been named as one of the top-ten excellent performance products by the China Energy Economic Forum. During the year, the company applied for 10 invention patents and 18 new-utility-model patents, and the company was authorized with 9 invention patents and 16 new-utility-model patents.
（3）Build a strong foundation for improving management
During the reporting period, the company implemented system engineering of enhancement on management and established 25 management items for reducing the costs, raising the economic performance and controlling the risks, also the company enhanced its adaptability by eliminating the management bottlenecks in the fields pertaining to the market, technology, manufacturing, procurement, finance, and the operation. The company organized all its departments to carry out management innovation activities and there were 43 items of management innovation subjects carried out, which solved a number of difficult problems pertaining to the practical management and further optimized and improved thecompany’s management system. Regarding the frequent changes in contractual projects, the company established a new mechanism to bridge the production and sales. Also the company strengthened the dynamic monitoring for the implementation of the contract and strictly controlled the risk of contract execution. In order to further optimize the structure of the supply chain and the purchase mechanism and reasonably allocate the internal and external manufacturing resources, the company had carried out the special clean-up for the inventory and suspended units.
During the report period, facing with sustaining and deep influences resulted from new normal ofChina’s economy for industry structure, the Company actively organized special researches and assessments, mastering the development trend of the industry, to make plannings for the enterprise transformation in the “Thirteenth Five-Year Plan”. The Company will combine the requests ofChina’s industrial manufacturing 2025, insisting on innovation-driven and intensifying the fusion between industrialization and informatization, to promote manufacturing fron production to service. Aiming at the broad market ofChina’s future natural gas application, the Company confirmed the thorough implementation for gas turbine business during the“Thirteenth Five-Year Plan”to achieve jump on upgrade of theCompany’s product technology. According to theCompany’s resource and current capacity situation combining with the future strategic development goals ,the Company put forward 4 major businesses to carry out the strategic path of 5 major projects. During the report period, the heavy industry of stream turbine andR&D center, the main construction productions of the Company, have been under construction in succession, which have been going well as planned so far.
The Company continued to thoroughly implement excellent engineering, inviting professional consulting agencies to carry out streamlined production project demonstration. The Company obtained the certification of “Made in Zhejiang”in the manufacturing enterprise of the entire province, which had been approved by supervision and examination. The quality management mode with“Modular Design, Flexible Manufacturing and Nimble Service”obtained the nomination of the 2rd China Quality Award. The Company continuously accelerated the construction of informatization. System development and testing and of PLM has been completed,and launch has been realized, of which the data management system of product life cycle has been preliminarily formed. The Company achieved apparent effect in informatization for areas of business integration of corporate finance, performance management of production process. The Company laid emphasis on personnel training, which established a batch of studios for masters with provincial, municipal and corporate level skills, leading to team construction of high-skilled personnel. The Company strengthened safety production, which had been approved by the reexamination of the National Second-Level Safety Production Standardization
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 II. Main business analysis
1. General
Refer to relevant contents of “1.Summarization” in “Discussion and Analysis of Management”.
2. Revenue and cost
(1)Component of Business Income
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
||2015||||2014||Increase|
||Amount||Proportion||Amount|Proportion|/decrease|
|Total operating revenue|2,600,072,151.63||100%||3,722,331,920.13|100%|-30.15%|
|Industry||||||||
|Boiler and power machine||||||||
|||2,135,628,506.22||82.14%|3,107,064,498.45|83.47%|-31.27%|
|manufacture||||||||
|Casting||63,703,960.06||2.45%|55,565,601.22|1.49%|14.65%|
|Petrochemical and other||||||||
|||76,766,636.28||2.95%|161,854,342.42|4.35%|-52.57%|
|special machineries||||||||
|Other||323,973,049.07||12.46%|397,847,478.04|10.69%|-18.57%|
|On Products||||||||
|Industrial steam turbine||2,135,628,506.22||82.14%|3,107,064,498.45|83.47%|-31.27%|
|Casting products||63,703,960.06||2.45%|55,565,601.22|1.49%|14.65%|
|Auxiliary machinery||76,766,636.28||2.95%|161,854,342.42|4.35%|-52.57%|
|Other||323,973,049.07||12.46%|397,847,478.04|10.69%|-18.57%|
|District||||||||
|Domestic||2,341,939,139.05||90.07%|3,504,759,176.87|94.15%|-33.18%|
|Overseas||258,133,012.58||9.93%|217,572,743.26|5.85%|18.64%|

 (2)Situation of Industry, Product and District Occupying theCompany’s Business Income and Operating Profit with Profit over10%
In RMB
|||||||
|-|-|-|-|-|-|
||||||Increase/decreas|
||||Increase/decrease of|Increase/decrease of||
|||Gross|||e of gross profit|
||||revenue in the same|business cost over||
|Turnover|Operation cost|profit|||rate over the|
||||period of the|the same period of||
|||rate(%)|||same period of|
||||previous year(%)|previous year (%)||
||||||the previous|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
||||||||
|-|-|-|-|-|-|-|
|||||||year (%)|
|On Industries|||||||
|Boiler and|||||||
|power machine|2,135,628,506.22|1,553,330,173.32|27.27%|-30.15%|-23.58%|-8.03%|
|manufacture|||||||
|On Products|||||||
|Industrial steam|||||||
||2,135,628,506.22|1,553,330,173.32|27.27%|-30.15%|-23.58%|-8.03%|
|turbine|||||||
|District|||||||

Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on latest onyear’s scope of period-end.
□ Applicable√Not applicable
(3)Whether theCompany’s Physical Sales Income Exceeded Service Income
|||||||
|-|-|-|-|-|-|
||||||Change over|
|Business categories|Items|Unit|2015|2014|same period last|
||||||year|
||Sales|Set/package|275|418|-34.21%|
|Steam turbine|Output|Set/package|351|421|-16.63%|
||Inventory|Set/package|164|88|86.36%|
||Sales|Set/package|2|6|-66.67%|
|Gas turbine,||||||
||Output|Set/package|3|11|-72.73%|
|compressor||||||
||Inventory|Set/package|6|5|20.00%|

 Statement on change of amounts for over30% YoY.
Pause and cancellation in user projects and the delay units increased in of this year.With the addition of the generally tight market fund and theusers’ late payment, which resulted in the quantity of current sale units decreased and the quantity of inventory units increased.
(4)Major orders in hand.
Not applicable
(5)Component of business cost
Product category
In RMB
||||||||
|-|-|-|-|-|-|-|
|||2015||2014||Increase/Decrease (%)|
|Category|Items s||Proportion in the||Proportion in the||
|||Amount||Amount|||
||||operating costs||operating costs (%)||

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
|||||||
|-|-|-|-|-|-|
|||(%)||||
|Industrial steam||||||
||1,551,730,293.95|85.92%|2,008,104,121.31|84.98%|-22.73%|
|turbine||||||
|Casting|52,584,471.30|2.91%|44,056,440.35|1.86%|19.36%|
|Auxiliary machinery|59,872,907.95|3.32%|130,976,469.45|5.54%|-54.29%|
|Other|141,753,849.57|7.85%|179,988,621.39|7.62%|-21.24%|

 (6)Whether Changes Occurred in Consolidation Scope in the Report Period
New subsidiary company
||||||
|-|-|-|-|-|
|Name|Equity acquisitionmode|Equity acquisition time|Amount|Proportion|
|Zhejiang Zhongrun Turbine TechnologyCo., Ltd.|Estabishment|May 22, 2015|10,000,000.00|55.55%|

(7)Relevant Situation of Significant Changes or Adjustment of the Business, Product or Service in theCompany’s Report Period
Not applicable
(8)Situation of Main Customers and Main Supplier
Information of theCompany’s top 5 customers
|||
|-|-|
|Total sales amount to top 5 customers (RMB)|739,278,717.84|
|Proportion of sales to top 5 customers in the annual sales(%)|28.44%|

 Information of theCompany’s top 5 customers
|||||
|-|-|-|-|
|No|Name|Amount（RMB）|Proportion|
|1|Customer 1|313,248,543.59|12.05%|
|2|Customer 2|188,034,438.04|7.23%|
|3|Customer 3|101,332,595.75|3.90%|
|4|Customer 4|72,548,439.58|2.79%|
|5|Customer 5|64,114,700.88|2.47%|
|Total|--|739,278,717.84|28.44%|

 Other explanation :
Not applicable
Principal suppliers
|||
|-|-|
|Total purchase of top 5 Suppliers（RMB）|372,595,808.87|
|Percentage of total purchase of top 5 suppliers In||
||11.85%|
|total annual purchase(%)||

Information about the top 5 suppliers
|||||
|-|-|-|-|
|No|Name|Amount（RMB）|Proportion|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
|||||
|-|-|-|-|
|1|Supplier 1|126,685,952.21|4.03%|
|2|Supplier 2|66,923,711.92|2.13%|
|3|Supplier 3|59,578,878.10|1.89%|
|4|Supplier 4|60,423,231.79|1.92%|
|5|Supplier 5|58,984,034.85|1.88%|
|Total|--|372,595,808.87|11.85%|

 Other explanation :
Not applicable
3.Expenses
In RMB
||||||
|-|-|-|-|-|
||||Increase/De||
||2015|2014||Notes|
||||crease(%)||
|Sale expenses|156,702,806.61|158,590,899.44|-1.19%||
|Administration|608,221,129.48|592,118,584.23|||
||||2.72%||
|expenses|||||
||-7,563,749.45|15,255,789.99||Mainly due to the decease of exchange|
|Financial expenses|||-149.58%|gains and loan interest payment caused|
|||||by the accounting in foreign currency.|

 4. Research and Development
TheCompany’sR&D investment of 2015 was 179,040,000 RMB, occupying6.89% of business income, increased11.65% year on year. During this year, the Company reinforced the basic management of scientific research to strengthen the ability in research and tackling key problems, which made the first axial exhaust unit succeed in being exported and delivered. The first back pressure unit with 90,000 kw of maximum power had been through test run. 100,000 air separation units had been through full-load test, and which had also been sent back for overhauling. High-pressure reheat unit and ultrahigh-pressure reheat unit have been completed. With the support of PLM, the Company strengthened the intellectualized design and life cycle management of the product, to deeply promote the two-oriented integration and to simultaneously and orderly accelerate the gas turbine development strategy. The Company enhanced self strength, invested steadily, intensified self-innovation, actively met the market demands and promoted the product competitiveness tin order to keep footholds in the market. With the expectation that sustained depressed general environment and the fierce competition in the industry , the Company will continuously invest inR&D expenditure in the future.
R& D investment situation
||||
|-|-|-|
|||Increase/Decrease(%|
|2015|2014||
|||)|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
|||||
|-|-|-|-|
|Number of Research and Development||||
||1,182|1,191|-0.76%|
|persons (persons)||||
|Proportion of Research and Development||||
||29.71%|29.86%|-0.15%|
|persons||||
|Amount of Research and Development||||
||179,039,951.91|160,360,992.99|11.65%|
|Investment (In RMB)||||
|Proportion of Research and Development||||
||6.89%|4.31%|2.58%|
|Investment of Operation Revenue||||
|Amount of Research and Development||||
||0.00|0.00|0.00%|
|Investment Capitalization (In RMB)||||
|Proportion of Capitalization Research and||||
|Development Investment of Research and|0.00%|0.00%|0.00%|
|Development Investment||||

The Reason of the Prominent Change in Total Amount of Research and Development Input Occupying the Business Income Year on Year
Influenced by the overall economical situation, the current sales decreased substantially, but in order to improve the product competitiveness and keep the leading technology advantage, the Company still maintained the steadyR&D investment.
Explanation of the Reason for Substantial Changes in the Research and DevelopmentInput’s Capitalization Rate and Its Reasonableness
Not applicable
Situation of Patents in the Past 2 Years
|||||
|-|-|-|-|
||||Accumulate Acquisition up to the|
||Applied|Acquired||
||||Report Period|
|Patent for Invention|10|9|28|
|Utility Model|18|16|102|
|appearance design|0|0|0|
|Situation of Changes of the Core Technology Team or Key||||
||Basic stability, a slight increase|||
|Technician of this Year||||
|Whether Belonging to High-tech Enterprise identified by Ministry||||
||Yes|||
|of Science and Technology||||

5.Cash Flow
In RMB
|||||
|-|-|-|-|
|Items|2015|2014|Increase/Decrease(%)|
|Subtotal of cash inflow received from|2,673,056,979.69|3,121,978,891.24||
||||-14.38%|
|operation activities||||
|Subtotal of cash outflow received from|2,317,379,206.64|2,838,249,919.32|-18.35%|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
|||||
|-|-|-|-|
|operation activities||||
|Net cash flow arising from operating|355,677,773.05|283,728,971.92||
||||25.36%|
|activities||||
|Subtotal of cash inflow received from|1,794,926,065.94|1,858,871,320.48||
||||-3.44%|
|investing activities||||
|Subtotal of cash outflow for investment|1,890,936,013.04|1,984,639,859.61||
||||-4.72%|
|activities||||
|Net cash flow arising from investment|-96,009,947.10|-125,768,539.13||
||||-23.66%|
|activities||||
|Subtotal cash inflow received from|212,390,000.00|551,060,000.00||
||||-61.46%|
|financing activities||||
|Subtotal cash outflow for financing|352,165,665.55|957,418,256.90||
||||-63.22%|
|activities||||
|Net cash flow arising from financing|-139,775,665.55|-406,358,256.90||
||||-65.60%|
|activities||||
|Net increase in cash and cash equivalents|126,461,101.03|-248,165,082.97|-150.96%|

 Notes to the year-on-year change of the relevant data
||||||
|-|-|-|-|-|
|Net cash flow arising fromoperating activities|355,677,773.05|283,728,971.92|25.36%|Mainly due to the sharp decrease of the tax paymentcompared with the last period as the correspondingsales reduction in the current period.|
|Net cash flow arising frominvestment activities|-96,009,947.10|-125,768,539.13|23.66%|Mainly due to the company’s investment onWuxi Xinchang Company and the netfinancial products to reduce in the same periodof last year|
|Net cash flow arising fromfinancing activities|-139,775,665.55|-406,358,256.90|65.60%|Mainly due to the decrease of paying back the bankloans and the dividend compared with the last period|

 Notes to the big difference between cash flow from operating activities and net profit in the reporting year Large differences have existed between the net cash flow generated by theCompany’s current business activities and the net profit of this year,of which the reason was mainly caused by the confirmed huge losses in impairment of asset and decreases in receivables and prepayment at the current period, which increased
receivables and prepayment.
III. Analysis of Non-core Business
In RMB
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
||||||
|-|-|-|-|-|
|||Proportion in total||Sustainable (yes|
||Amount||Explanation of cause||
|||profit||or no)|
||||For the investment income of the holding period and||
|Investment income|48,366,797.30|-32.64%|financing product of the available-for-sale financial||
||||assets (mainly of Bank of Hangzhou)||
||||Mainly for the increase in receivables with long aging,||
||||which resulted in increase in bad-debt provision with||
||||corresponding withdrawal; Otherwise, falling price||
|Impairment of|||||
||245,130,878.11|165.42%|reserves resulted from the reason of the termination of||
|assets|||||
||||partial projects, where inventory cost was higher than||
||||net realizable value, which resulted in corresponding||
||||withdrawal.||
|Non-operating|||Mainly for the received government subsidy and||
||29,025,777.14|-19.59%|||
|income|||contract compensation||
|Non-operating|||Mainly for the water conservancy construction fund||
||5,206,380.51|3.51%|||
|expenses|||with withdrawal||

IV. Condition of Asset and Liabilities
1.Condition of Asset Causing Significant Change
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of 2015||End of 2014||||
||||||Proportion||
|||Proportion||Proportion|||
||||||increase/decr|Notes to the significant change|
||Amount|in the total|Amount|in the total|||
||||||ease||
|||assets(%)||assets(%)|||
|Monetary fund|751,596,796.24|9.78%|613,958,063.91|8.13%|1.65%||
|Accounts|2,096,090,157.61||2,388,919,641.98||||
|||27.28%||31.63%|-4.35%||
|receivable|||||||
|Inventories|1,826,869,838.60|23.78%|1,594,074,228.69|21.11%|2.67%||
|Fixed assets|642,155,636.34|8.36%|678,033,380.86|8.98%|-0.62%||
|Construction in|119,187,107.52||89,469,259.14||||
|||1.55%||1.18%|0.37%||
|process|||||||
|Short-term|85,350,000.00||198,600,000.00||||
|||1.11%||2.63%|-1.52%||
|loans|||||||
|Long-term loans|123,400,000.00|1.61%|18,500,000.00|0.24%|1.37%||

2.Asset and Liabilities Measured by Fair Value
Not applicable
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 V. Investment situation
1. General
||||
|-|-|-|
|Investment Amount in 2015(RMB)|Investment Amount in 2014(RMB)|Change rate|
|11,593,515.32|28,381,036.07|-59.15%|

2.Condition of Acquiring Significant Share Right Investment during the Report Period
Not applicable
3.Situation of the Significant Non-equity Investment Undergoing in the Report Period
Not applicable
4.Investment of Financial Asset
（1）Securities investment
N/A.
（2）Investment in Derivatives
N/A.
5.Application of the raised capital
N/A.
VI. Significant Asset and Right Offering
1.Situation of Significant Asset Sale
N/A.
2.Situation of Substantial Stake Sale
Not applicable
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 VII. Analysis of the Main Share Holding Companies and Share Participating Companies
Situation of Main Subsidiaries and the Joint-stock Company with over10% net profit influencing to the Company
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
||Company||||||||
|Company Name||Sectors engaged in|Registered capital|Total assets|Net assets|Turnover|Operating profit|Net Profit|
||type||||||||
||||Technological||||||
||||development of||||||
|Zhejiang Steam Turbine Packaged|Subsidiarie|Trade of packadged||282,936,750.34|92,664,612.85|216,220,744.25|12,261,779.97|10,511,797.60|
||||automatic control||||||
|Technology Development Co., Ltd.|s|equipment|||||||
||||and instrument||||||
||||control||||||
||||Designing and||||||
|Hangzhou Zhongneng Steam Turbine|Subsidiarie|||886,147,802.26|337,081,349.71|704,991,946.83|14,227,797.75|20,863,372.38|
|||Manufacturing|manufacturing of||||||
|Power Co., Ltd.|s||||||||
||||steam turbines||||||
|Hangzhou Steam Turbine Casting Co.,|Subsidiarie|||423,235,786.63|168,816,708.11|293,407,553.21|4,821,660.73|5,944,783.76|
|||Casting|Iron and steel casting||||||
|Ltd.|s||||||||
||||Producing and||||||
|Hangzhou Steam Turbine Machinery &|Subsidiarie|||206,715,259.03|147,438,663.20|190,469,672.28|58,576,424.64|47,834,255.49|
|||Manufacturing|processing of steam||||||
|Equipment Co., Ltd.|s||||||||
||||turbine parts||||||
||||Manufacturing of||||||
|Hangzhou Steam Turbine Auxiliary|Subsidiarie|||512,182,577.92|239,125,321.29|393,879,695.72|37,700,609.73|33,520,334.09|
|||Manufacturing|steam turbine||||||
|Machine Co., Ltd.|s||||||||
||||auxiliary machines||||||
|Zhejiang Turbine Import & Export Co.,|Subsidiarie|||335,728,476.00|67,014,588.22|123,134,568.86|2,848,232.09|926,872.96|
|||Commerce & trade|International trade||||||
|Ltd.|s||||||||
||||Designing and||||||
|Hangzhou Steam Turbine Heavy Industry|Subsidiarie|||374,617,490.11|371,933,706.28|0.00|5,949,094.22|4,438,387.04|
|||Manufacturing|manufacturing of||||||
|Co., Ltd.|s||||||||
||||steam turbines||||||

Particulars about acquiring and disposal of subsidiaries
||||
|-|-|-|
|Name|Mode|Influence|
|Zhejiang Zhongrun TurbineTechnology Co., Ltd.|New Estabishment|The future will increase the company's operating results|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 VIII. Special purpose vehicle controlled by the Company
Not applicable
IX. Development prospect
(I) Development and competition of the whole industry
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 During the Twelfth Five-Year Plans, the whole industry of turbine emerged high-low trend in scales and quantities. According to the statistic data of the industry association, the annual sales income and operating profit of the whole industry reached the peak in 2011 then went down year by year after experiencing the sustainable growth since 2003. In the past 2 years, the industry scale has been keeping low, of which profit decreased substantially, resulting in falling into loss situation. And as for the Company, this trend highlighted in 2014 and 2015.
Take outlook of the period during the“Thirteenth Five-Year Plans”, the development of major technical equipment industry which turbine belongs to is also facing with new opportunities and challenges. On one hand, theChina’s government will actively adapt and lead new normal in economy development, continuously insisting on the general keynote of making progress while maintaining stability, which is to make the economy operation remain in reasonable range. Moreover, “Made in China 2025”published by the State Council also pointed out that the of competition situation of the present global industry is undergoing significant adjustment, where if China needs to form new power in economic growth and build new advantages in international competition,China’s equipments andChina’s brands will be relied on in order to realize the transformations from Made in China to Created in China, fromChina’s Speed toChina’s Quality and fromChina’s Product toChina’s Brand. During this process, the enterprise with technology, brand and market advantage will lead the transformation and upgrade pace. On the other hand, with the Chinesegovernment’s deep implementation in the strategy of“One Belt And One Road”, which will connect the enormous demands for infrastructure and basic industry of developing countries and emerging economies in purpose of offering massive market opportunities to the“Strategy of Going out”of China equipment manufacturing industry.
The downstream industries related to theCompany’s product are mainly distributed in areas of energy resource, chemical industry and power generation. Due to the common excess capacity in the present domestic petrochemical industry, in recent years, the scale of petrochemical industry and increment speed of the profit have been slowed down, capital expenditure has been reduced, invested and newly-stared project have been postponed, which leads to gradual shrinkage in the domestic market scale. Coal-to-oil and coal gas, representatives of new chemical coal industry, are the significant moves of petroleum energy substitution strategy. However, having been influenced by the slump petroleum price and the tight environmental protection policy in the past 2 years, a large amount of projects are made to be paused one after another, which turned the flourishing significant drive market into a recessionary one. In the medium and long term, with the new balance achieved in oil supply, the oil price will recover back to a reasonable level, which will make a larger development space for domestic oil and gas industry and coal chemical industry. For the area of power generation, with the continuously optimizing demands of energy structure in the future, greater changes will take place in the industry situation. According to the “Action Plan of Energy Development Strategy(2014-2020)”, the
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 proportion of coal consumption rate will decrease blow62% in the whole nation by 2020, where new thermal power project will be strictly controlled. For the area of thermal power, thermoelectricity cogeneration project will still be supported by the policy, possessing a better market prospect. During the Thirteenth Five-Year Plans, the proportion of natural gas consumption will be substantially increased, which will be increased to more than10% proportion of primary energy consumption by 2020. As the important approach of efficient utilization, the distributed energy of natural gas will face uncommon market development opportunities. Speed up promotion of nuclear power construction. Under the condition of ensuring safety and by 2020, the nuclear power installed capacity will be up to 58,000,000 kw and the capacity under construction will be over 30,000,000 kw. With the promotion of oversea nuclear power project, the nuclear market is expected to get vigorous development. The prospect of the above industries are all being influenced by the increment speed of domestic economy and the recovery process of international economy, hence, larger uncertainties will exist.
At present, the competition has been so fierce in the turbine industry. Due to the excess industry production capacity and sluggish market demands, which resulted in a situation where failed enterprises accelerate transformation and upgrade, to rebuild the industry situation. For the mid-to-low equipment market, the homogenization competition is severe, which makes domestic manufacturers horribly fight for the price. While for high-end equipment market, well-known international enterprises with technology, brand and cost advantage frequently fight for keeping standing on the market. Among the current industrial turbine industries, no matter market occupation rate or technological reserve, the Company is keeping its leading position, but being influenced by the continued market depression, constant reducing price and cost tending to be increased, the product profit level is gradually declining. To break through the dilemma the industry is facing with, the Company must speed up the pace of strategy transformation.
(II) Development strategy
Facing with the present severe market situation and the opportunities and challenges during the “Thirteenth Five-Year Plans”, the core of theCompany’s future development strategy is to accelerate enterprise transformation, which will realize innovation in technology and business mode in the mass. For business mode innovation, extension will be carried out during realization process from enterprise value to client value, realizing the manufacturing transformation form production to service, where will upgrade the manufacturer from single product to completed equipment agent and system operator so as to form the ability for providing and implementing total solution. For technology mode innovation, the Company will further strengthen the innovation-driven and combine self-innovation with technology introduction, simultaneously developing industrial turbine, gas turbine, distributed energy and nuclear power and mastering the current market demands, to realize significant breakthrough both in technology and market in the area of gas turbine and nuclear power. On the basis of consolidating the market position of industrial turbine, gas turbine business acceleration, nuclear
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 power business strengthening, service expansion and engineering business will be formed into 4 leading businesses during the Thirteenth Five-Year Plans. Meanwhile, with the support of 5 guarantee projects, including excellent engineering, resource integration, process reengineering, management improvement and informatization, the Company will build new core competitiveness of the enterprise.
(III) Business plan
The global economic recovery of 2016 will still be arduous and tortuous. During the transformation process,China’s economy hammered at the structural reform of Demand Side, where the process of“No Capacity, No Inventory and No Lever”for the traditional industry will still be sustaining, and more competition will be aggravated in the industry. For the Company, pressures and opportunities coexist in 2016. According to the strategy planning of “Thirteenth Five-Year Plans”, the Company will take “Management Deepening, Innovation Driven, Market Development and Risk Control Strengthening ” as the managerial principles of this year, to open up the road to transformation. On the basis of the prediction of the contracts undertaken, increases in theCompany’s operation revenue will be realized, which is aiming for surplus generated from profit.
Major operational measurements for 2016
1.Strive for Development Space in Market Exploitation. In 2016, the Company will continuously strengthen and promote drive market, seeking for the opportunities in market segments; Continue to do well in the 2 businesses, including drive and power generation, to make joint promotion between domestic market and overseas market ; Actively exploit the market of power generation, to increase the market occupation of bigger thermal power product and to expand the market space of high-capacity cogeneration units; Carry on exploiting new market for nuclear power. Accelerate the strategic layout of gas turbine, extending the industry chain of customer service for gas turbine, improving the marketing ability and the localization rate of completed-set gas turbine, to actively expand the distributed energy market for natural gas. Expedite the implementation for the“Strategy of Going out”, expanding the oversea marketing channel, opening up emerging international market, exploring technology output and co-production to realize the path for service product to be localized.
2.Create Development Power with Technology Innovation. Aiming at the market demand changes, the Company improve the high-quality and efficient supplying ability. The Company will carry out demonstration of research and application for turbine containerization, to well develop power-series turbines and subcritical-parameter turbines as well as intellectualized design and manufacturing; Boost the gas turbine business, put the development strategy of gas turbine into practice and enlarge technical cooperation and independent research and development. Continue to implement excellent engineering, throughly promote the product quality. Speed up the informatization construction, launch the second-period project of PLM and improve the intelligent manufacturing.
3.Improve the Management to Strengthen the Development Base. The Company will throughly
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 implement the development strategy of “Thirteenth Five-Year Plans”to strengthen the analysis, implementatio, supervision and assessment for strategy as well as boosting the management reform which is oriented by the strategy. Make a further optimization for the structure and process of the organization, connecting with the demands of enterprise transformation. Continue to put excellent performance management into effect to promote streamlined production mode. Further strengthen the marketability to improve the flexibility level of manufacturing system. Control the operating cost and reduce the resource consumption. Systematically boost the risk control and intensify the risk control, attach importance to the risk control of receivables, inventory, commercial contract, exchange rate and the international market as well as strengthening the budget control system construction.
(IV) Financial arrangement
To achieve the business objectives of 2016, the Company will constantly enrich financing channels by formulating reasonable finance and capital plans, which utilizes self-raised funds, debt financing as well as other various available methods to meet the fund demands of self-operation development and project investment. (V) Risks
1. Market risks
With the decreasing demands for domestic heavy industry investment, the turbine market demands in dive area are under weakboost，More competition and decreasing of gross profit ratio are expectable, and will bring certain pressure to theCompany’s market share and competition. However the Company will do all its best in aspects of technical innovation, market exploring, quality lifting, service upgrading, and value adding, to neutralize the negative impact of the market.
2. Risks of contract fulfilling
With the aggravation of market fluctuations and during the process of contract execution, frequent changes in the contracts, delay and pause in project progress occurred occasionally, which brought huge impacts and influences to theCompany’s internal product implementation process. Meanwhile, market fluctuations also increased the cost and risk for fulfilling theCompany’s contracts. The Company will further strengthen the marketability and improve the speed and level of corporate response to the market to control the risk of contract execution.
（3）Account receivable risks
With declines in operation of partial downstream clients and increases in risk of investment project, risks increased continuously in theCompany’s receivables, of which the average aging tends to increase, which will bring huge impacts to theCompany’s business performance. The Company will implement customer credit management, strengthening the contract signing and controlling the fulfillment risk to intensify the examination for receivables and reduce the adverse effect of overdue account receivables.
（4）Exchange rate risks
Increasing expanding of international purchase and international marketing entails the internal payments to be influenced by exchange rate fluctuations. So, exchange loss will be suffered to some extent. As two-way volatility of the RMB exchange rate is changing sharply, profit or loss on exchange becomes more uncertain. We are attempting to refer to the fluctuation cycle of exchange rate and take appropriate risk-management tools to cut
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 down the loss maximally.
（5）Corporate earnings decline risks
To adapt to the adjustment and changes on the market structure, In 2016,we made considerable alteration on the product mix. Orders received from high-end markets like oil and gas are declined sharply, while low-profit products are substantially ascending, bringing about adverse impact on the overall gross margin. On the other hand, drastic market competition forces the sales price to keep falling. So it is natural that the return on sales is going down. Faced with this phenomenon, more efforts will be paid to upgrade internal management, lower operation cost and enhance operating efficiency, based on which, the risk of profitability downturn will be mitigated.
（6）Technology innovation risks
We will practice the spirit of “13th five-year strategy” to invest more on independent technology of researching gas turbine. Given poor domestic technology, long-range of technology development, enormous funding, uncertainty from development to application and greater risk of technology, we are planning to accelerateR&D building, intensify cooperation with research institutions at home and abroad, launch study of new technology in a scientific and scrupulous manner and reduce the risk of technical innovation.
（7）Overseas market risks
During implementation of “13th five-year strategy”, we are intending to devote major efforts to “going global” strategy to further open up oversea targeted markets where we will gain more international market shares and improve our influence. However, influenced by geopolitical conflict, volatile political and economic situation and trade barriers in the overseas markets, the strategy of expanding overseas market becomes more uncertain. In view of this, we will reinforce market investigation, validate solutions and figure out development way for the localized business.
X. Particulars about researches, visits and interviews received in this reporting period
1.Particulars about researches, visits and interviews received in this reporting period
|||||
|-|-|-|-|
|Reception time|Way of reception|Types of visitors|Basic index|
||||Securities Times, Shanghai Securities News , Hongkong|
|May 21,2015|Onsite investigation|Organization|Commercial Daily and http://www.cninfo.com.cn/；|
||||Announcement No.:2015-50|
||||Securities Times, Shanghai Securities News , Hongkong|
|August 7,2015|Onsite investigation|Individual|Commercial Daily and http://www.cninfo.com.cn/；|
||||Announcement No.:2015-73|
|Reception times||2||
|Reception agency amount||1||
|Reception personal number||1||
|Others||0||

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
|||
|-|-|
|Whether to disclose, reveal or disclose non-public material||
||No|
|information||

2.Statement of such activities as reception, research, communication, interview from the end of the reporting period to the disclosure date.
N/A
V. Important Events
I. Specification of profit distribution of common shares and capitalizing of common reserves
Formulation, implementation and adjustment of profit distribution policy of common shares especially cash dividend policy during the reporting period
1.[Dividend sharingprinciple]: Keep profit distribution policy continuous and stable, pay enough attention to the ROI of investors, and give reasonable consideration to our long-term profits, overall profits of all shareholders and sustainable development;
2.[Prioritized cashdividend]: Dividend can be allotted either in cash, stock or in combination of cash and stock, the precondition of which is the company is in profitable state, plentiful in cash flow, and sustaining operation and long-range development are well guaranteed;
3.[Solicit suggestions and demands of independent director and medium and smallshareholders]: The board of directors will work out a specific dividend sharing plan by giving sufficient consideration to business operation, development stage, earning performance, cash flow and current capital requirements and taking medium and smallshareholders’ views into account. Later, the plan is submitted to theshareholders’ general meeting for deliberation after listening to opinions of independent directors. The general meeting is supposed to take advantage of varieties of channels to contact and exchange ideas with shareholders, especially with medium and small shareholders, give ear to their suggestions and demands and get well prepared for answering the problems they are concerned about.
4.[Dividend sharingcycle]: Dividend is distributed among shareholders based on an annual cycle as a general rule. We will publish the dividend sharing plan within four months after accounting year and put the plan into practice within two months after deliberation of the shareholders meeting;
5.[Ration of dividendsharing]: The profits accumulated in cash in the last three years are not less than30% of annual average distributable profits in the same year;
6.【Decision-making procedure of dividendsharing】: In the light of Articles of Association, the dividend sharing plan is proposed by the board of directors, and submitted to the shareholders meeting for consideration
after being deliberated and approved by the board of directors and commented by the independent directors;
7.【Adjustment process of dividendpolicies】: For the profit distribution policies that need to be adjusted
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 according to the business operation, investment planning and long-term development, the adjusted profit distribution policies shall not violate the relevant provisions of CSRC (China Securities Regulatory Commission) and the stock exchange. The proposals regarding the adjustment of profit distribution policies should seek advice from the independent directors and board of supervisors, and they shall be deliberated by the board of directors and then submitted to the general meetings. The proposals need to receive more than 2/3 of the voting rights held by the shareholders attending the general meetings before implementation.
|||
|-|-|
|Special cash dividend policy description||
|Whether meets the requirements of the provisions of the articles of association or shareholders' meeting||
||Yes|
|resolutions:||
|Whether dividends standard and proportion are clear|Yes|
|Whether decision making and supervision mechanism for profit distribution are completed|Yes|
|Whether independent directors perform their duties responsibly and play its due role:|Yes|
|Whether the Minority shareholders have adequate opportunity to express their views and aspirations and Their||
||Yes|
|legitimate rights and interests have been fully protected||
|Whether the Cash dividend policy to adjust or change the conditions and procedures are compliant and||
||Yes|
|transparent||

The profit distribution preplan or proposal and the preplan or proposal of conversion of the capital reserve into share capital in the past three years(with the reporting period inclusive):
The dividend plan for year 2015 was basing on the total capital share of 754,010,400, RMB 0 and 0 bonus share(tax included) will be distributed to each 10 shares. No capitalization of common reserves will be carried out. Totally RMB0 will be distributed.
The dividend plan for year 2014 was basing on the total capital share of 754,010,400, RMB1.00 and 0 bonus share(tax included) were distributed to each 10 shares. No capitalization of common reserves will be carried out. Totally RMB75,401,040 was distributed.
The dividend plan for year 2013 was basing on the total capital share of 754,010,400, RMB2.00 and 0 bonus share(tax included) were distributed to each 10 shares. No capitalization of common reserves will be carried out. Totally RMB150,802,080 was distributed.
Dividend distribution of the latest three years
In RMB
|||||||
|-|-|-|-|-|-|
|||Net profit attributable to the|Ratio in net profit attributable|Amount of cash|Proportion of cash|
||Cash dividend|over of the parent company in|to the parent company in the|dividends from cash|dividends from cash|
|Year||||||
||(Including Tax)|the consolidated financial|consolidated financial|offer to repurchase|offer to repurchase|
|||statements|statements|shares of the funds|shares of the funds|
|2015|0.00|-162,809,311.79|0.00%|0.00|0.00%|
|2014|75,401,040.00|352,077,352.23|21.42%|0.00|0.00%|
|2013|150,802,080.00|654,179,550.68|23.05%|0.00|0.00%|

In the reporting period, both theCompany’s profit and the parentcompany’s retained earnings were positive
however not cash dividend distribution proposal has been put forward.
Not applicable
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 II. Profit distribution for the report period.
None of cash dividend, bonus shares, or capitalizing of common reserves will be carried out in this year.
III. Commitments to fulfill the situation
1.The fulfilled commitments in the reporting period and under-fulfillment commitments by the end of the reporting period made by the company, shareholder, actual controller, acquirer, director, supervisor, senior management personnel and other related parities.
N/A
2.The existence of the company's assets or projects earnings forecasts and earnings reporting period is still in the forecast period, the company has assets or projects meet the original profit forecast made and the reasons explained
Not applicable
IV.Particulars about the non-operating occupation of funds by the controlling shareholder
N/A
V.Explanation of the Supervisory Committee and Independent Directors (If applicable)on the QualifiedAuditor’s Report Issued by the CPAs.
Not applicable
VI. Explanation change of the accounting policy, accounting estimate and measurement methods as compared with the financial reporting of last year.
In order to be adapt to the changes of market circumstances, better to prevent and control AR risks, make AR credit of company more suitable to the proportion between its risk status and losses actually happened, we upheld scrupulous and objective principle, to modify the accounting estimation of provision for bad debts, reduce withdrawing proportion of AR within 3 years and raise withdrawing proportion of AR over 3 years, carried out impairment provision for withdrawal of AR in full amount over 5 years.
According to related regulations in Accounting Standards for Business Enterprises: Accounting Policy, Accounting Estimate Changes and Correction of Accounting Error, accounting estimate changes should be taken under accounting process with prospective application. It is not necessary to do any retroactive adjustment to the published financial reports.
VII. Explanation retrospective restatement due to correction of significant accounting errors in the reporting period
N/A
VIII． Explanation change of the consolidation scope as compared with the financial reporting of last year.
||||||
|-|-|-|-|-|
|Name|Equity acquisitionmode|Equity acquisition time|Amount|Proportion|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
||||||
|-|-|-|-|-|
|Zhejiang Zhongrun Turbine TechnologyCo., Ltd.|Estabishment|May 22, 2015|10,000,000.00|55.55%|

IX. Engagement/Disengagement of CPAs
CPAs currently engaged
|||
|-|-|
||Pan-China Certified Public Accountants (Special commonpartnership)|
|Domestic CPA||
|Reward for domestic CPA (RMB0’000)|106|
|Successive years the domestic CPA has been providing||
||17|
|service to the Company||
|Name of CPAs from the domestic CPA firm|Jiang Xiaodong, Zhu Guogang|

Was the CPA been changed in the report period
No
Engaging of CPA for internal auditing, financial consultants or sponsors
Pan-China Certified Public Accountants is engaged the auditor of internal control system for the current year. With payment of RMB260 thousand for its service.
X.Situation of Facing Listing Suspension and Listing Termination after the Disclosure of the Yearly Report
Not applicable
XI. Receivership and bankruptcy
No bankruptcy or capital reorganizing issues occurred in the report period.
XII. Major lawsuits and arbitrations
In the report period, the Company had no material lawsuits or arbitrations.
During the reporting period, due to the macro policy adjustment and slower development of downstream industries, some clients suffered from difficulties in their business operations and couldn't pay the contract payments within the stipulated time, which led to contract disputes among the corporation, clients and suppliers. The litigation-related amount during the period was 21.2183 million Yuan.
XIII. Punishment and improvement
No punishment or improving approach in the report period.
XIV.Credit Condition of the Company and its Controlling Shareholders and Actual Controllers
N/A
XV. Implementation Situation of Stock Incentive Plan of the Company, Employee Stock Ownership Plan
or Other Employee Incentive Measures
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 N/A
XVI. Material related transactions
1. Related transactions in connection with daily operation
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Whether|||||
|||||Principle||||||||||
|||||of||||Trading limit|over the|||||
||||Subjects of||||||||Market price||Index of|
|||||pricing||||||||||
|||Type of|the related||Price of|Amount of trade|Ratio in|approved|approved|Way of|of similar||informatio|
|Related parties|Relationship|||the||||||||Date of disclosure||
|||trade|transaction||trade|RMB0’000|similar trades|||payment|trade||n|
|||||related||||||||||
||||s|||||（RMB’0000）|limited or||available||disclosure|
|||||transacti||||||||||
|||||ons|||||not (Y/N)|||||
|Hangzhou Steam|||freight,|||||||Bank||||
|Turbine Automobile|Affiliate of the|Accept||Fair and|Market|5,898.4||6,400|No||6，000.00|March 19,2016|2016-25|
||||repairing|||||||||||
|Sales Service Co.,|Group|labor||just|price|||||transfer||||
||||fee|||||||||||
|Ltd.||||||||||||||
|Hangzhou Hangfa||||||||||Bank||||
||Affiliate of the|Purchase||Fair and|Market|12,668.59||12,000|No||13，000.00|March 19,2016|2016-25|
|Power Generating|||Generators|||||||||||
||Group|of goods||just|price|||||transfer||||
|Equipment Co., Ltd.||||||||||||||
|Hangzhou Steam||||||||||||||
|Turbine|Affiliate of the|Sale|SteamTurbi|||||||Bank||||
|||||Fair and|Market|18,803.44||30,000|No||18，000.00|March 19,2016|2016-25|
|Engineering Co.,|Group|goods|ne|just|price|||||transfer||||
|Ltd.||||||||||||||
|Total||||--|--|37,370.43|--|48,400|--|--|-|--|--|
|Details of any sales return of a large amount||||N/A||||||||||
|Give the actual situation in the report period where a forecast||||||||||||||
|had been made for the total amounts of routine related-party||||No more than expected||||||||||
|transactions by type to occur in the current period(if any)||||||||||||||
|Reason for any significant difference between the transaction||||||||||||||
|||||N/A||||||||||
|price and the market refernce price (if applicable)||||||||||||||

2. Related transactions in terms of acquisition or disposal of assets:
No related transaction regarding asset purchase or disposal up to the end of report period.
3. Related transactions in term of collective external investment
No related transaction of joint external investment in the report period.
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 4. Debts and credits with related parties
Debts receivable from related party
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||Whether has|||||Current|Balance at|
|||||Balance at||||||
||||non-business||Current newly added|Current recovery||interest|period-end|
|Related|Relationship|Causes||period-begin|||Interest rate|||
||||capital occupying||（RMB’0000）|（RMB’0000）||（RMB’0000|（RMB’00|
|||||（RMB’0000）||||||
||||or not|||||）|00）|
|Hangzhou Steam Turbine|Controlled|Disbursement|Yes|0|3,258.34|3,258.34||42.29|1.38|
|Casting Co., Ltd.|subsidiaries|||||||||
|Influence on business performance and financial||||||||||
|||N/A||||||||
|status of the Company from related liabilities||||||||||

5. Other material related transactions
No other material related transactions.
XVII. Material contracts and execution
1. Entrustment, contracting, and leasing issues
(1) Trusteeship
No trusteeship in the report period.
(2) Contracting
No contracting in the report period.
(3) Leasing
No Leasing in the report period.
2. Guarantees
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015（1）Guarantees
InRMB’0000
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Outward guarantees offered by the Company and its subsidiaries (Excluding guarantee to the subsidiaries）||||||||||||
|Guarantee of the subsidiaries for the controlling subsidiaries||||||||||||
|||Amount of|Actual date of occurring|||||||||
||Amount of guarantee and|||||||||Completed or|Related|
|Guarantee provided to||the|(signing date of|Actual amount of guarantee|||Type of guarantee|Term||||
||date of disclosure|||||||||not|guarantee|
|||guarantee|agreements|||||||||
|Hangzhou Guoneng Steam Turbine||||||||||||
||February 14,2015|10,000|February 11, 2015|10,000|||Joint liability guaranty|1 Year||Yes|No|
|Engineering Co., Ltd.||||||||||||
|Total guarantee quota to the subsidiaries approved in the reporting||||Total amount of guarantee to the subsidiaries actually||||||||
|||10,000||||||2,945||||
|period (C1)||||incurred in the reporting period (C2)||||||||
|Total guarantee quota to the subsidiaries approved at the end of the||||Total balance of actual guarantee to the subsidiaries at the||||||||
|||10,000||||||7,055||||
|reporting period (C3)||||end of the reporting period (C4)||||||||
|The Company’s total guarantee(i.e.total of the first three main items)||||||||||||
||||||Total amount of guarantee actually incurred in the reporting|||||||
|Total guarantee quota approved in the reporting period（A1+B1+C1）||10,000|||||||2,945|||
||||||period（A2+B2+C2）|||||||
|Total guarantee quota already approved at the end of the reporting|||||Total balance of the actual guarantee at the end of the reporting|||||||
|||10,000|||||||7,055|||
|period（A3+B3+C3）|||||period（A4+B4+C4）|||||||
|Including：||||||||||||
|Description of the possibility of bearing joint repayment liability due to undue guarantee (if any)||||||N/A||||||
|Description of external guarantee against the specified procedures (if any)||||||N/A||||||

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015（2）Illegal
providing of external guarantees
No illegal providing of external guarantees in the report period.
3.Situation of Entrusting Others for Managing Spot Asset
(1)Situation of Entrusted Finance
InRMB’0000
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Is a|||||||||||
||||Amount for||||Principal|||Actual|Gains/losses|
||related|||||Determine way||Impairment|Antiecipate|||
|Trustee||Kinds|trust|Start Date|Expiry||actually recover|||gains/losses in|actually recover in|
||transacti|||||for remuneration||provision(If any)|d income|||
||||financing||||in the period|||period|period|
||on or not|||||||||||
|||Trust||||||||||
|Hangzhou industrial and||||||||||||
||No|produ|9,500|||-|17,000||788.43|788.43|788.43|
|commercial trust Co., Ltd.||||||||||||
|||cts||||||||||
|||Finan||||||||||
|||cial||||||||||
|||instru||||||||||
|China Minsheng Bank|No||4,800|||-|6,800||23.43|23.43|23.43|
|||ments||||||||||
|||of||||||||||
|||banks||||||||||
|||Finan||||||||||
|||cial||||||||||
|||instru||||||||||
|Hangzhou Bank|No||23,000|||-|25,000||197.59|197.59|197.59|
|||ments||||||||||
|||of||||||||||
|||banks||||||||||
|||Finan||||||||||
|China Everbright Bank|No|cial|2,000|||-|2,000||7.39|7.39|7.39|
|||instru||||||||||

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
||||||||||
|-|-|-|-|-|-|-|-|-|
|||ments|||||||
|||of|||||||
|||banks|||||||
|||Finan|||||||
|||cial|||||||
|||instru|||||||
|China Citic Bank|No||32,505.6|-|27,505.6|218|218|218.00|
|||ments|||||||
|||of|||||||
|||banks|||||||
|||Trust|||||||
|Changan International Trust Co.,|||||||||
||No|produ|12,000|-|5,000|162.24|162.24|162.24|
|Ltd.|||||||||
|||cts|||||||
|||Trust|||||||
|Zhongrong International Trust Co.,|||||||||
||No|produ|13,000|-|3,000|88.77|88.77|88.77|
|Ltd.|||||||||
|||cts|||||||
|||Finan|||||||
|||cial|||||||
|||instru|||||||
|Ping’an Bank|No||23,900|-|22,900|150.7|150.7|150.70|
|||ments|||||||
|||of|||||||
|||banks|||||||
|||Finan|||||||
|||cial|||||||
|||instru|||||||
|Hangzhou Union Bank|No||12,800|-|12,800|122.49|122.49|122.49|
|||ments|||||||
|||of|||||||
|||banks|||||||
|Industrial & Commercial Bank of||Finan|||||||
||No||11,550|-|17,630|79.62|79.62|79.62|
|China||cial|||||||

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||instru|||||||||
|||ments|||||||||
|||of|||||||||
|||banks|||||||||
|||Trust|||||||||
|Shenzhen Sidao Technology|||||||||||
||No|produ|600|||-|300|3.06|3.06|3.06|
|Investment Co., Ltd.|||||||||||
|||cts|||||||||
|||Finan|||||||||
|||cial|||||||||
|||instru|||||||||
|Shanghai Bank|No||6,000|||-|4,000|42.88|42.88|42.88|
|||ments|||||||||
|||of|||||||||
|||banks|||||||||
|||Finan|||||||||
|||cial|||||||||
|||instru|||||||||
|Agricultural bank of China|No||4,545|||-|4,545|6.14|6.14|6.14|
|||ments|||||||||
|||of|||||||||
|||banks|||||||||
|||Finan|||||||||
|||cial|||||||||
|||instru|||||||||
|China of Bank|No||22,000|||-|20,000|42.56|42.56|42.56|
|||ments|||||||||
|||of|||||||||
|||banks|||||||||
|||Trust|||||||||
|Ping’an Trust Co., Ltd.|No|produ|1,000|||-|6,000|29.13|29.13|29.13|
|||cts|||||||||
|Total|||179,200.6|--|--|--|174,480.6|1,962.43|1,962.43|--|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
|||
|-|-|
|Capital resources|Self|
|Accumulated overdue uncollected principal and||
||0|
|interest||
|Lawsuit involved (if applicable)|N/A|
|Disclosure date for the notice of approval by the||
||March 26,2016|
|board(if any)||
|Disclosure date for the notice of approval by||
|shareholders’ General Meeting ( If any)||
|Whether there is the trust financing in the future|Exist|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 (2)Situation of Entrusted Loans
N/A
4. Other significant contract
N/A
XVIII.Explanation about other significant matters
（1）Matters regarding Company issues stock suspension
Because the controlling shareholder of the company Hangzhou Steam Turbine Power Group Co., Ltd. in Hangzhou according to the unified deployment of the SASAC, is planning Turbine Group mixed ownership reform issues. The Company has applied to Shenzhen stock Exchange to suspend trading of the stock as of May 29, 2015,During the suspension period, the company will fulfill the obligation of disclosing information according to the progress of the issue and relevant provisions. On March 4, 2016, Major issues of the company to disclose the progress and stock resumption announcement.(2016-11)
Disclosureindex：http://www.cninfo.com.cn
(2015-33),(2015-34),(2015-36),(2015-37),(2015-38),(2015-39),(2015-40),(2015-42),(2015-43),2015-44),(2015-45),(2015-46),(2015-47),(2015-62),(2015-63),(2015-64),(2015-65),(2015-66)（,2015-67）（,2015-68）（,2015-69）,（2015-75）,（2015-76）,（2015-81）,（2015-82）,（2015-85）,（2015-86）,（2015-88）and（2015-89）（2）Matters regarding the change of independent directors
Due to Mr. Lv Fan resigned independent directors, the Board considered the Company held by Zhang Xiaoyan as the company's sixth independent director, and submit the 2015 First Provisional General shareholders Meeting considered and approved obtained.The complete proposal is available as “Announcement of Resolutions of the First Provisional shareholders' general meeting of Hangzhou Steam Turbine Co., Ltd. in 2015” released by securities Times, Shanghai Securities Daily, as well as Http//www.cninfo.com.cn of Shenzhen Stock Exchange date December 4, 2015.( Announcement No.2015-84).
（3）Matters regarding the company's accounting policy change
Changes in accounting estimates between companies proposal for consideration.The complete proposal is available as “Announcement on Change of accounting estimations of Hangzhou Steam Turbine Co., Ltd.” released by securities Times, Shanghai Securities Daily, as well as Http//www.cninfo.com.cn of Shenzhen Stock Exchange date March 28, 2015.( Announcement No.2015-15).
XIX. Material issues of the subsidiaries
Not applicable
XX. Social responsibility
The company has disclosed the full report CSR, as detailed in the "Securities Times", "Shanghai Securities News", the Juchao of information network (http: /www.cninfo.com.cn/) published on the "Company 2013--2015 Social Responsibility Report "(announcement No: 2016-28)
The listed company subsidiaries is in the range of heavy pollution industry that regulated by state environment protection departments.
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
|||||||
|-|-|-|-|-|-|
|Enterprise’s social responsibility report||||||
||Doesitcontain|Does it contain||Report disclosure standards||
||||Does it contain|||
|Enterprise|information|information||||
||||information conceding||International|
|property|concerning|concerning the||Domestic standards||
||||corporate govemance||standards|
||environment|society||||
|||||The Shenzhen Stock||
|State-owned||||Exchange listing||
||Yes|Yes|Yes|||
|enterprise||||Corporation "social||
|||||responsibility guidelines"||

Notes to specific circumstances
|||
|-|-|
|1.Has the Company been certified for the Environment||
||Yes|
|management System Certification（ISO14001）||
|2.Amount of investment in the environmental protection in the||
||16.2|
|reporting year（RMB’0000）||
||All projects are in line with the state-level local relevant|
||emission standards and no excessive emissions were found by|
||the monitoring of Hangzhou Huaji Environment Detection|
|3.Performances of the emission reduction of “waste gas, waste||
||Technology Co., Ltd. Chemical substances were reduced such as|
|water and waste residue||
||COD and ammonia nitrogen in discharged waste-water, xylene in|
||emissions and sulfur dioxide and nitrogen oxides in the exhaust|
||gas boilers.|
|4.Investment for improving employees’ personal knowledge and||
|techniques so as to upgrade employees’ career development|202|
|ability（RMB’0000）||
|5.Social Charitable donations (fund, goods and materials and free||
||33|
|professional services)（RMB’0000）||

XXI. Company bond related information
Is there any company bond which was issued in public and got listed with the stock exchange both as not been honored From the date of approval of the annual report to the expiry of the bond.
No.
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 VI. Change of share capital and shareholding of Principal Shareholders
1.Changes in share capital
In shares
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the change||Increase/decrease（+，-）|||||After the Change||
||Amount|Proportion|||Capitalization of|||||
|||||Bonus||||||
||||Share allotment||common reserve|Other|Subtotal|Quantity|Proportion|
|||||shares||||||
||||||fund|||||
|I. Shares with trade restriction||||||||||
||479,919,891|63.65%|0|0|0|16,950|16,950|479,936,841|63.65%|
|conditions||||||||||
|1. State-owned shares|479,824,800|63.64%|0|0|0|0|0|479,824,800|63.64%|
|2. Other domestic shares|95,091|0.01%|0|0|0|16,950|16,950|112,041|0.01%|
|Domestic natural person shares|95,091|0.01%|0|0|0|16,950|16,950|112,041|0.01%|
|II. Shares without trading limited||||||||||
||274,090,509|36.35%|0|0|0|-16,950|-16,590|274,073,559|36.35%|
|conditions||||||||||
|1.CNY ordinary shares|0|0.00%|0|0|0|0|0|0|0.00%|
|2. Foreign invested shares listed||||||||||
||274,090,509|36.35%|0|0|0|-16,950|-16,950|274,073,559|36.35%|
|in Mainland China||||||||||
|III. Total of capital shares|754,010,400|100.00%|0|0|0|0|0|754,010,400|100.00%|

 Causes of Change of shares
Not applicable
Approval of change of the shares
Not applicable
Transfer in change of shares
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 Not applicable
Influence of the change of the shares upon such financial indicators as the basic EPS and diluted EPS, net asset value per share attributable to the common stockholders in the past year and the latest period
Not applicable
Other information the Company considers it necessary or required by the securities regulatory authority to be disclosed
Not applicable
2. Change of Restricted Shares
Not applicable
II. Share placing and listing
1. Stock issuing in the latest three years up to the end of report period
Not applicable
2. Statements on change of total capital share and share structure and change of theCompany’s asset and liability structure
Not applicable
3. Currentemployees’ shares
Not applicable
III. Particulars about the shareholders and substantial controller
1. Amount of shareholders and their shareholding position
in shares
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||Total shareholders at the end||||||||||||
|Total number of common||||||||||||||
|||||||The total number of preferred sh|||Total preferred shareholders at the|||||
|shareholders at the end of||of the month from the date||||||||||||
||15,540|||15,540||areholders voting rights restored||0|end of the month from the date of||||0|
|the||of disclosing the annual||||||||||||
|||||||at period-end|||disclosing the annual report|||||
|reporting period||||||||||||||
|||report||||||||||||
|Particulars about shares held above 5% by shareholders or top ten shareholders||||||||||||||
||||||Proportion|||||Amount of|Number or share|||
|Shareholders|||Nature of|||Number of shares|Changes in|Amount of restricted||||||
||||||of shares|||||un-restricted shares|pledged/frozen|||
||||shareholder|||held at period -end|reporting period|shares held||||||
||||||held（%）|||||held|State of share|Amount||
|Hangzhou Steam Turbine Power Group Co., Ltd.|||State-ownedlegal person||63.64%|479,824,800|0|479,824,800||0||||
|GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED|||Overseaslegal person||1.89%|14,284,477|11162299|0||14,284,477||||
|First Shanghai Securities Co., Ltd.|||Overseaslegal person||0.68%|5,095,921|5095921|0||5,095,921||||
|NORGES BANK|||Overseaslegal person||0.57%|4,303,675|-1845100|0||4,303,675||||
|CHINA INT'L CAPITAL CORP HONG KONG SECURITIES LTD|||Overseaslegal person||0.41%|3,066,768|3066768|0||3,066,768||||
|GIC PRIVATE LIMITED|||Overseaslegal person||0.35%|2,665,330|0|0||2,665,330||||
|VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND|||Overseaslegal person||0.30%|2,286,336|257500|0||2,286,336||||
|BOCHK INVESTMENT FUNDS-BOCHK CHINA GOLDEN DRAGONFUND|||Overseaslegal person||0.30%|2,273,227|1235227|0||2,273,227||||
|AUSTRALIANSUPER PTY LTD|||Overseaslegal person||0.28%|2,108,321|0|0||2,108,321||||
|Xia Zulin|||DomesticNaturalperson||0.28%|2,100,000|42000|0||2,100,000||||

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
||||||
|-|-|-|-|-|
|Particulars about strategic investors or general corporations becoming among the top 10|||||
||Not applicable||||
|shareholders due to share placing (if any) (See Note 3)|||||
||(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)||||
|Notes to relationship or “action in concert” among the top ten shareholders.|(2) There is no relationship between Hangzhou Steam Turbine Power Group Co., Ltd. and other shareholders;||||
||(3) Hangzhou Steam Turbine 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”.||||
|Top 10 holders of shares without trading limited conditions|||||
||||Category of shares||
|Name of the shareholder||Amount of unconditional shares held at end of period|||
||||Category of shares|Amount|
|GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED||14,284,477|Foreign shares placed||
|||||14,284,477|
||||in domestic exchange||
|First Shanghai Securities Co., Ltd.||5,095,921|Foreign shares placed||
|||||5,095,921|
||||in domestic exchange||
|NORGES BANK||4,303,675|Foreign shares placed||
|||||4,303,675|
||||in domestic exchange||
|CHINA INT'L CAPITAL CORP HONG KONG SECURITIES LTD||3,066,768|Foreign shares placed||
|||||3,066,768|
||||in domestic exchange||
|GIC PRIVATE LIMITED||2,665,330|Foreign shares placed||
|||||2,665,330|
||||in domestic exchange||
|VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND||2,286,336|Foreign shares placed||
|||||2,286,336|
||||in domestic exchange||
|BOCHK INVESTMENT FUNDS-BOCHK CHINA GOLDEN DRAGON FUND||2,273,227|Foreign shares placed||
|||||2,273,227|
||||in domestic exchange||
|AUSTRALIANSUPER PTY LTD||2,108,321|Foreign shares placed||
|||||2,108,321|
||||in domestic exchange||
|Xia Zulin||2,100,000|Foreign shares placed|2,100,000|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
|||||
|-|-|-|-|
|||in domestic exchange||
|Taifook Securities Company Limited-Account Client|1,753,655|Foreign shares placed||
||||1,753,655|
|||in domestic exchange||
|Explanation on associated relationship or consistent action among the top 10 shareholders of|1）It is unknown to the Company if there is any relationship among the top 10 common share holders without restriction;|||
|non-restricted negotiable shares and that between the top 10 shareholders of non-restricted|(2) Hangzhou Steam Turbine Group Co., Ltd. is not an action-in-concert” party with any of other shareholders as|||
|negotiable shares and top 10 shareholders|described by the “Administration Rules of Informational Disclosure about Change of Shareholding Statues of PLCs”.|||
|Notes to the shareholders involved in financing securities (if any)(See Notes 4)|Not applicable|||

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 of Controlling Shareholders: Legal person
||||||
|-|-|-|-|-|
|Name of the holding shareholder|Legal representative|Incorporated in|Organization code|Registered capital|
|||||Business scope: Manufacturing and processing: textile machinery,|
|||||Manufacturing machines,paper-making machinery, pump, casting products,|
|||||electrical tools, gear box, thermal transmitter, digital controlling device, and|
|||||spare parts of the above (limited to the subsidiaries);Contracting of domestic|
|||||and overseas machinery engineering projects, export of above equipments|
|Hangzhou Steam Turbine Power Group|||14307184-2||
||Nie Zhonghai|Dec 14, 1992|||
|Co., Ltd.||||and materials, provide labor services for above overseas projects.|
|||||Thermal power plant project and equipment engineering; wholesale|
|||||and retail: products and spare parts manufactured by members of the group,|
|||||and technical research, consulting, and service of above products;|
|||||Provide materials, equipments, and spare parts to members of the|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
||||
|-|-|-|
|||Group, water and power supply (other than installation and maintaining of|
|||power supply equipment); Including the business scope of subsidiaries.|
|Shareholding status of the holding|||
|shareholder in other PLCs in the country|None||
|and abroad during the report period|||

Change of holding shareholder
No change of holding shareholder in the report period.
3．Information about the controlling shareholder of the Company
Actual controllernature：Local state owned Assets Management
Actual controllertype：Legal person
||||||
|-|-|-|-|-|
|Name of the substantial|Legal||||
|||Date of incorporation|Organization code|Principal business activitie|
|controller|representative||||
|||||In the light of the municipal government authorization, perform the investor’s responsibilities, supervise the|
|||||municipal operational state-owned assets and strengthen the management of state-owned assets in|
|||||accordance with the laws and regulations of Corporate Law of the People's Republic of China ,|
|||||Enterprise State-Owned Assets Law of the People's Republic of China .|
|State-owned Assets|||||
|Supervision and||||(II) Execute the laws, regulations and policies of the management of state-owned assets; be entrusted|
|Administration||||with drafting local regulations regarding the management of state-owned assets, and enact relevant|
||Tu Xingeng||776637527||
|Commission of||||rules and regulations, supervise and examine the implementation; guide and supervise the|
|Hangzhou Municipal||||management of the state-owned assets at the district, county (city) level pursuant to the laws.|
|Government|||||
|||||(III) Make proposals regarding the municipal state-owned economic layout and strategic adjustment to|
|||||promote the strategic adjustment of the municipal state-owned economic structure and layout;|
|||||guide and propel the reform and restructuring of state-owned enterprises; instruct and promote the|
|||||construction of modern enterprise system in state-owned enterprises, consummate the corporate|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
||
|-|
|governance structure, and form a governance mechanism characterized by clear duty,|
|well-coordination and effective balances.|
|(IV) Pursuant to the provisions of the relevant documents of the municipal Party committee,|
|investigate, appoint and remove the supervised principles of enterprises according to the legal|
|procedures; establish a employment mechanism that is in line with the socialist market economic|
|system and the requirements of modern enterprise system, consummate the incentive and restraint|
|system for the operators; assess the business performance of the principles of the enterprises that|
|are supervised and implement the rewards and penalties system. Take charge of the management|
|and building work of the Party organization of the supervised enterprises.|
|(V) Dispatch directors, supervisors or CFO to the supervised enterprises on behalf of the municipal|
|government; and take charge of the daily management of directors, supervisors or CFO.|
|(VI) Take charge of organizing the supervised enterprises to turn over the state-owned capital gains;|
|participate in enacting management system and solutions for the state-owned capital operating|
|budget; take charge of the preparation and implementation of the state-owned operating budget of|
|the supervised enterprises. Take charge of the comprehensive budget management of the|
|supervised enterprises.|
|(VII) Establish and consummate the preservation and appreciation index system of the state-owned|
|assets, and develop the assessment criteria; take charge of the supervision and assessment of the|
|preservation and appreciation of the state-owned assets; enact and organize the implementation of|
|the income distribution policy of the supervised enterprises and state-owned enterprises. Take|
|charge of the fundamental management work, namely, the authentication of property rights,|
|registration of property rights, asset evaluation monitoring, property liquidation and verification,|
|asset statistics, comprehensive evaluation; safeguard rights and interests of the investors of|
|state-owned assets|
|(VIII) Take charge of directing and supervising the implementation of national and provincial and|
|municipal safety laws, regulations, rules and standards, etc.|
|(IX) Undertake other matters assigned by the municipal Party committee and government.|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
|||
|-|-|
|The equity of the||
|controlling shareholder||
|in other domestic and||
|foreign listed|N/A|
|companies held or||
|partly held by it in the||
|report period||

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 Change of the actual controller in the reporting period
N/A
Block Diagram of the ownership and control relations between the company and the actual controller
The actual controller controls the company by means of trust or managing the assets in other way
Not applicable
4.Other corporate shareholder holding over10% of theCompany’s shares
Not applicable
5.Situation of Share Limitation Reduction of Controlling Shareholders, Actual Controllers, Restructuring Party and Other Commitment Subjects Not applicable
VII. Situation of the Preferred Shares
No preference shares in the Company.
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 VIII. Information about Directors, Supervisors and Senior Executives
I. Change in shares held by directors, supervisors and senior executives
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||||Number of||||
|||||||||||Number of|
||||||||shares|Volume of shares|Volume of shares||
|||||||||||shares held at|
|||Office|||||acquired at|acquired during|sold during the||
|Name|Positions||Sex|Age|Starting date of tenure|Expiry date of tenure||||end of the|
|||status|||||end of the|the reporting|reporting||
|||||||||||reporting|
||||||||reporting|period (shares)|period(shares)||
|||||||||||period(shares)|
||||||||period(shares)||||
|||In|||||||||
|Zhen Bin|Chairman||Male|51|June 24,2013|June 24,2016|0|0|0|0|
|||office|||||||||
|Yan||In|||||||||
||Vice Chairman||Male|57|June 24,2013|June 24,2016|0|0|0|0|
|Jinhua||office|||||||||
|Yang||In|||||||||
||Vice Chairman||Male|51|June 24,2013|June 24,2016|0|0|0|0|
|Yongming||office|||||||||
|Nie||In|||||||||
||Director||Male|58|June 24,2013|June 24,2016|0|0|0|0|
|Zhonghai||office|||||||||
|||In|||||||||
|Ye Zhong|Director, GM||Male|47|June 24,2013|June 24,2016|0|0|0|0|
|||office|||||||||
|Liu||In|||||||||
||Director||Male|58|June 24,2013|June 24,2016|0|0|0|0|
|Guoqiang||office|||||||||
|Kong||In|||||||||
||Director, Engineer General||Male|45|June 24,2013|June 24,2016|0|0|0|0|
|Jianqiang||office|||||||||
|Xu||In|||||||||
||Independent Director||Male|53|June 24,2013|June 24,2016|0|0|0|0|
|Yongbin||office|||||||||
|Zhang|||||||||||
||Independent Director|In|Male|58|June 24,2013|June 24,2016|0|0|0|0|
|Hejie|||||||||||

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||office|||||||||
|Zhang||In|Femal||||||||
||Independent Director|||43|June 24,2013|June 24,2016|0|0|0|0|
|Xiaoyan||office|e||||||||
|Tan||In|||||||||
||Independent Director||Male|61|June 24,2013|June 24,2016|0|0|0|0|
|Jianrong||office|||||||||
|||In|||||||||
|Li Shijie|Chief Supervisor||Male|46|June 24,2013|June 24,2016|0|0|0|0|
|||office|||||||||
|Wang||In|||||||||
||Supervisor||Male|48|June 24,2013|June 24,2016|37,556|22,600|0|61,156|
|Xiaohui||office|||||||||
|Zhang||In|||||||||
||Supervisor||Male|58|June 24,2013|June 24,2016|0|0|0|0|
|Yougen||office|||||||||
|Lu||In|||||||||
||Employee Supervisor||Male|54|June 24,2013|June 24,2016|0|0|0|0|
|Jianhua||office|||||||||
|||In|||||||||
|Fang Yin|Employee Supervisor||Male|53|June 24,2013|June 24,2016|0|0|0|0|
|||office|||||||||
|Yu|||||||||||
|||In|||||||||
|Changqua|Vice GM, secretary of the||Male|58|June 24,2013|June 24,2016|0|0|0|0|
||board|office|||||||||
|n|||||||||||
|Zhang||In|||||||||
||Vice General Manager||Male|57|June 24,2013|June 24,2016|89,232|0|0|89,232|
|Shutan||office|||||||||
|Pu||In|Femal||||||||
||Vice General Manager, Chief|||40|June 24,2013|June 24,2016|0|0|0|0|
|Yangshuo|Accountant|office|e||||||||
|Li||In|||||||||
||Vice General Manager||Male|52|June 24,2013|June 24,2016|0|0|0|0|
|Jiansheng||office|||||||||
|||Dimissi|||||||||
|Lv Fan|Independent Director||Male|60|June 24,2013|June 24,2016|0|0|0|0|
|||on|||||||||
|Total|--|--|--|--|--|--|126,788|22,600|0|149,388|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 II. Change in shares held by directors, supervisors and senior executives
||||||
|-|-|-|-|-|
|Name|Positions|Types|Date|Reason|
|||||According to relevant regulations of the state-owned enterprise|
||Independent||||
|Lv Fan||Dimission|December 5,2015|leaders can not be part-time, Mr. Lv Fan submit resignation to the|
||Director||||
|||||Board of Directors, voluntary turnover.|

III.Posts holding
The professional background, working experience and main responsibilities of the current board members, supervisors and senior managers in the company
（1）Director
Mr. Zhen Bin, born in November 1964, CCP member, university graduate, senior economics professional certification. He used to be chairman of Hangzhou Dongfeng Shipyard Co., Ltd. and currently vice general manager and CCP commissioner of Hangzhou Steam Turbine Power Group Co., Ltd. He was elected director and vice chairman at the 7th meeting of the 4th term of Board, and was elected again the Vice Chairman of the 5th term of Board. He was engaged General Manager of the Company on June 3, 2013. He was engaged the vice Chairman and vice general manager of HSTG on November 27, 2014, and Chairman of the Company on December 5, 2014, and no longer take the position of general manager of the Company.
Mr. Nie Zhonghai: Born in October 1957, CCP member; university graduate; certified senior economist, chief secretary of CCP Committee of the Company. In August 2003, Mr. Nie assumed Secretary of the Party and Chairman of the Board of Huangzhou Steam Turbine Power Group Co., Ltd. He was elected as Director and Chairman of the 2nd, 3rd, 4th, 5th, and 6th term of Board of the Company. He still take the position of director of the Company after resigning from the position of Chairman of Board of the Company since December 2014. Mr. Yan Jianhua: born in September 1958, CCP member; college degree; Professorial Senior Engineer. When the Board of Directors changed on June 25, 2001, Mr. Yan was elected as Director of the 2nd term of Board and General Manager of the Company. Since then he has been the director of the 3rd, 4th, and 5th terms of the Board, and General Manager as well. He took the position of vice Chairman and General Manager of Hangzhou Steam Turbine Power Group Co., Ltd. since May 2013. Currentlyhe’s the Vice Chairman of the 6th term of Board of the Company.
Mr. Yang Yongming, born in November 1964, CCP member, university graduate, certified senior economist. Started working in July 1986. He used to be the vice director and director of Production Planning and Sales Administration Departments of the Company; vice general manager, general manager, and vice chairman of Hangzhou Dongfeng Shipyard Ltd. Currentlyhe’s the vice general manager of Hangzhou Steam Turbine Power Group Co., Ltd. and Vice Chairman of the 6th term of Board of the Company.
Mr. Ye Zhong: born in April 1968, CCP member; bachelor degree; professor and senior engineer. When the Board of Directors was altered on June 25, 2001, Mr. Ye was selected the Director of the second Board and Chief Engineer of the Company. Since then, 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 and director of the 6th term of Board of the Company, and General Manager of the Company since December 2014.
Mr. Liu Guoqiang, born in June 1957, CCP member, university graduate, senior economist. Currentlyhe’s the vice chief secretary of CCP committee, the Discipline Committee, and Chairman of Trade Union. He used to be vice general manager of the Company from 2005 to 2009. In February 2009, he was elected director of the 4th
term of Board, and successively director of the 5th term of Board. Currentlyhe’s the director of the 6th term of
Board of the Company.
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 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.
Mr. Zhang Hejie, born in January 1958. Master of Philosophy of Central CCP University, Doctor of Management of Zhejiang University, visiting scholar of Cambridge University. Working experiences: July 2002 up to now, teaching in Economics School of Zhejiang University; April 23, 2004, expert consultant on Taiwan affair invited by Taiwai Affair Office of Zhejiang Provincial Government. June 6, 2005, member of Green Economy Technical Group of the provincial government; January 15, 2008, senior editor of Journal of Cambridge Studies, later changed as member of Academic Committee; October 22, 2008, telecommunication verification expert of “National Social Science Foundation Projects” of Zhejiang Philosophy and Social Science Development Planning Office; September 11, 2009, commissioner and vice chief secretary of Zhejiang Resource Recycling Association; December 2009, head of International Finance and Risk Control Institution, Management School, Zhejiang Industry University. On April 25, 2010, he was entitled the standing commissioner of Zhejiang Finance Engineering Committee. In May 2011, Mr. Zhang was engaged as the communication evaluating expert of National Natural Science Fund. Currentlyhe’s the independent director of the 6th term of Board.
Mr. Lv Fan, born in February 1956, Master of international finance from Economic School of Hangzhou University. At presenthe’s the Chief Investment Officer of Zhejiang Zhelu Investment Co., Ltd. Once he was the intern researcher of Economic Division of Zhejiang Social Science Institution, assistant researcher of Global Economic Division of Zhejiang Social Science Institution, vice director of Zhejiang Asia-Pacific Institution, general manager and vice president of Investment Bank Dept. of Zhejiang Securities Co., Ltd., general manager of Zhejiang Huhangyong Expressway Ltd., vice general manager of Beijing Zhongke Investment Co., Ltd. chief finance officer of Zhejiang Huating Group; June 2006 to December 2007, executive director of Huahang Capital Co., Ltd.; January 2008 up to now, vice general manager and chief investment officer of Zhejiang Zhelu Investment Co., Ltd. Currentlyhe’s the independent director of the 6th term of Board. On December 2015, no longer served as an independent director of the Company. Ms Zhang Xiaoyan, was born in March 1973. Since 1994, she successively worked in Zhejiang Securities Co., Ltd, Zhejiang Senhe Seed Co., Ltd, Shanghai AllBright Law Offices (Hangzhou), Beijing Gaopeng& Partners Hangzhou Office, Beijing Kangda Law Firm (Hangzhou). She currently holds the post of the partner of Beijing Kangda (Hangzhou) Law FirmNot only being skilled at reformation, listing, floatation,m&a and refinancing for listed company, but also at venture capital, industrial fund, shares incentive, shares option including itscontract’s negotiation,signing and litigation,etc. Currentlyhe’s the independent director of the 6th term of Board.
Mr Xu Yongbin, born in December 1962, is a member of the Communist Party. He is a PhD in Management, professor of accountancy, PhD student supervisor and postdoctoral collaborative supervisor. He holds the post of the director of the academic (academic degree) commission of finance and accounting faculty of Zhejiang Gongshang University, and concurrent posts of the council member of Chinese Institute of Management Accountants (CIMA), council member of China Auditing Society, vice president of Zhejiang Accounting Association, executive council member of Zhejiang Auditing Society, executive council member of State-owned Assets Administration Commission. He has been engaged in accounting teaching and research work in the faculty of finance and accounting (department) of Zhejiang Gongshang University, and held various positions like the deputy director of accounting department, secretary of the party committee of the faculty of finance and accounting, dean, etc. since August 1984. He received bachelor's degree, master degree, doctoral degree in management (accounting) in Hangzhou College of Commerce, Zhejiang University, Zhejiang Gongshang University in 1984, 1995 and 2007, respectively. He was promoted to an accounting professor in 2000, and elected as the young and middle-aged academic leader of universities in Zhejiang in 2001, selected as the talent in the Zhejiang new century 151 talent project in 2002, and took charge of the doctoral degree candidate in accounting in 2008, and held the post of supervisor postdoctoral in accounting in 2010, and chosen as the "a group of five" talent in Zhejiang. Currentlyhe’s the independent director of the 6th term of Board.
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 Mr. Tan Jianrong, born in October 1954, master of engineering, doctor of science, professor, doctorial tutor, academician of China Academy of Engineering. Mr. Tan worked for Zhejiang Huzhou Machinery Factory from December 1970 to August 1985, mainly involved in technical designing and engineering management of machineries; worked for Zhejiang University since August 1987 up to present, mainly engaged in researching and education covering machinery designing and theory, digital designing and manufacturing. Currentlyhe’s the independent director of the Board.
(II) The Supervisors
Mr. Li Shijie, born in July 1969, CCP member, university graduate, certified senior engineer. head of supplying department of the Company, general manager and chief secretary of CCP committee of Hangzhou Steam Turbine Auxiliary Machinery Co., Ltd. Currentlyhe’s the vice chief secretary of CCP committee and chief secretary of discipline committee of Hangzhou Steam Turbine Power Group Co., Ltd. Currentlyhe’s the Chairman of the 6th term of Supervisory Committee.
Mr. Zhang Yougen, born in July 1957, CCP member, university graduate, senior political profession. Vice secretary of Discipline Committee of the Company, office manager of the Party Office, supervisor of the 1st, 2nd, 3rd, 4th, and 5th term of Supervisory Committee. Currentlyhe’s the supervisor of the 6th term of Supervisory Committee.
Mr. Wang Xiaohui, born in December 1967, CCP member, university degree, senior accountant, certified senior accountant. External Chief Finance Officer of Hangzhou State-owned Property; Chief Accountant and Director of Accounting Dept. of Hangzhou Dongfeng Shipyard Co., Ltd. Currentlyhe’s the vice director of Accounting Dept. of Hangzhou Steam Turbine Power Group Co., Ltd. Currentlyhe’s the supervisor of the 6th term of Supervisory Committee.
Mr. Lu Jianhua, born in March 1962, CCP member, university graduate. Once he was the clerk and office manager of the Trade Union, elected vice chairman of the Trade Union and supervisor; He assumedemployees’ supervisor for the 3rd, 4th, and 5th term of the Supervisory Committee. He was elected the supervisor of the 6th term of Supervisory Committee at theemployees’ congress on February 28, 2013.
Mr. Fang Yin, born in December 1962, CCP member, senior engineer, master degree. Graduated from Zhejiang University of Industry in February 1982, and started working in technical area in Hangzhou Steam Turbine Co., Ltd. (former Hangzhou Steam Turbine Factory); Since September 1988, he has been working onR&D in the Industrial Turbine Research Institute of the Company; Mr. Fang was elected supervisor of the 6th term of Supervisory Committee by theEmployees’ Congress on February 28, 2013.
(III) Senior Executives
Profiles of General Manager Ye Zhong and Engineer General Kong Jianqiang are available among the directors above.
Mr. Yu Changquan, born in July 1957, CCP member,Bachelor’s Degree, senior economics profession. Secretary of the Board. He was engaged the Deputy General Manager of the Company since January 2000, and extended on June 19th 2004. He was engaged the Secretary of the Board by the 6th meeting of the 3rd term of Board held on June 23rd 2005. He was engaged the Deputy General Manager on June 23, 2005, and was engaged the Secretary of Board again in June 2007. On February 16, 2009 Mr. Yu was engaged the vice general manager and secretary of the Board, and was extended to the 6th term of Board on June 2013.
Mr. Zhang Shutan, born in March 1959, CCP member,bachelor’s degree, certified senior engineer. Once he was the teacher of HSTG Education Center, salesman of export division, vice director of export division, director of export division and assistant to general manager. He was engaged vice general manager on February 16, 2009. Ms. Pu Yangshuo, born in November 1975,master’s degree, certified accountant, certified senior accountant. At presentshe’s the vice general accountant of HSTG. She once the auditor and senior project manager of Zhejiang Provincial Auditing Firm (Zhejiang Wanbang CPA); director and CFO of Astronautic Telecommunication Group Co., Ltd.; Traveling CFO sent by Hangzhou State-owned Asset Administration. She was elected the supervisor of the 4th and 5th term Supervisory Committee of the Company at theshareholders’ meeting held on May 20, 2009. She was engaged the Vice General Manager and Chief Accountant of the Company on June 2013.
Mr. Li Jiansheng, born January 1963, CCP member, master of engineering, certified senior engineer of professor
level.Mr. Li started working for the Company in February 1982. He has been in the positions of chief of No.4
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 section, vice head of the Institution, and vice head of the Industrial Turbine Institute. He has been the assistant of vice general manager and head of production unit of Hangzhou Steam Turbine Co., Ltd. Mr. Li was engaged the vice general manager of the Company since December 5, 2014.
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 Jobs taken in shareholding parties
|||||||
|-|-|-|-|-|-|
||||||Take remunerations from|
|Names|Name of the shareholder|Job taken|Job started|Job ended||
||||||the shareholding party|
||Hangzhou Steam Turbine Power Group|||||
|Nie Zhonghai||Chief secretary of CCP, Chairman, Legal Representative|Aug 1 2003||Yes|
||Co., Ltd.|||||
||Hangzhou Steam Turbine Power Group|||||
|Yan Jianhua||Commissioner of CCP, Vice Chairman, GM|May 01 2013||Yes|
||Co., Ltd.|||||
||Hangzhou Steam Turbine Power Group|||||
|Zhen Bin||Commissioner of CCP, Vice Chairman, Vice GM|Nov 27 2014||No|
||Co., Ltd.|||||
||Hangzhou Steam Turbine Power Group|||||
|Yang Yongming||Commissioner of CCP, Vice GM|Dec 1 2006||Yes|
||Co., Ltd.|||||
||Hangzhou Steam Turbine Power Group|||||
|Ye Zhong||CCP Commissioner, director|May 1 2001||No|
||Co., Ltd.|||||
|||Vice Secretary of CCP Commission, Secretary of Discipline||||
||Hangzhou Steam Turbine Power Group|||||
|Li Shijie||Committee, Vice Chairman of Supervisory Committee, Chairman of|May 01 2013||Yes|
||Co., Ltd.|||||
|||Trade Union||||
||Hangzhou Steam Turbine Power Group|||||
|Wang Xiaohu||Director of financial department|Sept 22, 2014||Yes|
||Co., Ltd.|||||

Jobs taken in other parties
|||||||
|-|-|-|-|-|-|
||||||Take remunerations from|
|Names|Name of the parties|Positions|Job started|Job ended||
||||||the party|
|Nie Zhonghai|Hangzhou Relian Group Co., Ltd.|Chairman, Legal representative|May 01 2013||No|
|Nie Zhonghai|Bank of Hangzhou Co., Ltd.|Director|Jul 1 2006||No|
|Nie Zhonghai|Guangdong Huaxing Bank Co., Ltd.|Director|Sept 1 2011||No|
||Hangzhou Steam Turbine Power Technologies|||||
|Yan Jianhua||Chairman, Legal representative|May 01 2013|||
||||||No|
||Co., Ltd.|||||
||Hangzhou Hangfa Power Generating Equipment|||||
|Yan Jianhua||Chairman, Legal representative|Nov 1 2013|||
||||||No|
||Co., Ltd.|||||
|Yan Jianhua|Hangzhou Steam Turbine Compressor Co., Ltd.|Chairman, GM, Legal representative|Jun 1 2014||No|
||Zhejiang Steam Turbine Packaged Technology|||||
|Zhen Bin||Chairman, Legal representative|Jul 1 2013||No|
||Development Co., Ltd.|||||
||Hangzhou Steam Turbine Machinery &|||||
|Zhen Bin||Chairman, Legal representative|Jul 1 2013|||
||||||No|
||Equipment Co., Ltd.|||||
|Yang Yongming|Hangzhou Relian Group Co., Ltd.|Director|May 01 2013|||
||||||No|
||Lianyungang Steam Turbine Xiangyi Property|||||
|Yang Yongming||Chairman, Legal representative|Nov 1 2013||No|
||Co., Ltd.|||||

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
||||||
|-|-|-|-|-|
||Hangzhou Zhongneng Steam Turbine Power||||
|Ye Zhong||Chairman, Legal representative|Feb 1 2010||
|||||No|
||Co., Ltd.||||
|Ye Zhong|Hangzhou Steam Turbine Engineering Co., Ltd.|Chairman, Legal representative|Dec 23, 2014||
|||||No|
|Liu|Hangzhou Steam Turbine Casting||||
|||Director|July 1,2013|No|
|Guoqiang|Co., ltd.||||
|Liu Guoqiang|Director of Hangzhou Kaineng Casting Co., Ltd.|Director|Jul 1 2013|No|
||Hangzhou Zhongneng Steam Turbine Power||||
|Liu Guoqiang||Chief Supervisor|Feb 1 2010|No|
||Co., Ltd.||||
|Liu Guoqiang|Zhejiang Turbine Import & Export Co., Ltd.|Chief Supervisor|Nov 1 2009|No|
||Zhejiang Packaged Technologies Development||||
|Kong Jianqiang||Director|Jul 1 2013|No|
||Co., Ltd.||||
||Zhejiang University of Industry, School of||||
|Zhang Hejie||Professor, doctorial tutor|Feb 1 2002|Yes|
||Economics and Management||||
||Zhejiang University of Industry and Commerce,||||
|Xu Yongbin||Dean, professor, doctorial tutor|Sept 1 2003|Yes|
||School of Accounting and Finance||||
|Xu Yongbin|Simei Media Co., Ltd.|Independent Director|Nov 1 2013|Yes|
||Zhejiang Feida Environment Protection||||
|Xu Yongbin||Independent Director|Apr 1 2012|Yes|
||Technologies Co., Ltd.||||
|Lv Fan|Zhejiang Zhelv Investment Co., Ltd.|Chairman, Legal representative|January 1, 2008|Yes|
|Tan Jianrong|Zhejiang University|Professor, doctorial tutor|Aug 1 1987|Yes|
|Tan Jianrong|Hangzhou Hangyang Holdings Co., Ltd.|Independent Director|Apr 1, 2010|Yes|
|Li Shijie|Hangzhou Relian Group Co., Ltd.|Supervisor|May 01 2013|No|
||Lianyungang Steam Turbine Xiangyi Property||||
|Li Shijie||Supervisor, Chief Supervisor|May 01 2013|No|
||Co., Ltd.||||
|Wang Xiaohu|Hangzhou Nanfangtongda Gears Co., Ltd.|Supervisor|April 1, 2009|No|
|Wang Xiaohu|Hangzhou Lianyungang Xiangxi Property Co.,|||No|
|||CFO|Sept 1 2009||
||Ltd.||||
|Wang Xiaohu|Hangzhou Dongfeng Shipyard Co., Ltd.|Supervisor|Sept 1 2009|No|
|Wang Xiaohu|Zhejiang Hangqilun Shipyard Industry Co., Ltd.|Supervisor|Jan 1 2015|No|
||Zhejiang Steam Turbine Packaged Technology||||
|Zhang Yougen||Supervisor|Mar 01 2011|No|
||Development Co., Ltd.||||
||Hangzhou Steam Turbine Auxiliary Machine||||
|Yu Changquan||Legal representative, chairman|Oct 1 2004|No|
||Co., Ltd.||||
||Hangzhou Guoneng Steam Turbine Engineering||||
|Yu Changquan||Legal representative, chairman|Dec 1 2006|No|
||Co., Ltd.||||
|Yu Changquan|Hangzhou Steam Turbine Casting Co., Ltd.|Director|Apr 3 2014|No|
|Yu Changquan|Hangzhou Kaite Cast Part Co., Ltd.|Director|Apr 3 2014|No|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
||||||
|-|-|-|-|-|
|Yu Changquan|Zhejiang Turbine Import & Export Co., Ltd.|Chairman, Legal representative|Jan 6 2015|No|
|Zhang Shutan|Greensol Power Equipment Co., Ltd. (India)|Director|Feb 1 2009|No|
|Zhang Shutan|Zhejiang Turbine Import & Export Co., Ltd.|Director|Nov 1 2009|No|
|Zhang Shutan|Zhejiang Runhong Fuel Engine Co., Ltd.|Director|Jun 18 2014|No|
|Pu Yangshuo|Greensol Power Equipment Co., Ltd. (India)|Director|Jul 1 2013|No|
||Zhejiang Packaged Technologies Development||||
|Pu Yangshuo||Supervisor|Jul 1 2013|No|
||Co., Ltd.||||
|Pu Yangshuo|Zhejiang Turbine Import & Export Co., Ltd.|Director|Jul 1 2013|No|
||Hangzhou Zhongneng Steam Turbine Power||||
|Pu Yangshuo||Director|Apr 3 2014|No|
||Co., Ltd.||||
|Li Jiansheng|Hangzhou Steam Turbine Casting Co., Ltd.|Director|July 15, 2014|No|
||Hangzhou Steam Turbine Auxiliary Machine||||
|Li Jiansheng||Director|Apr 3 2014|No|
||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 Not applicable
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 IV. Remuneration to directors, supervisors and senior executives in the reporting period
Decision-making procedures, basis for determination and actual payment of the remuneration to directors , supervisors and senior executives
1. Decision-making and basis of remunerations to directors, supervisors, and executives
The 6th meeting of the 6th Remuneration Committee was held on March 7, 2016. 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, and the remuneration plan was produced according to the Administration Rules of Remuneration and Assessment of Directors of the 6th Term of Board andExecutive（s2013-2015）. The plan is subject to examination of the 28th meeting of the 6th term of Board. Allowances for independent directors and supervisors are subject to approval by the Board and theShareholders’ Meeting thereafter. The proposal of allowances for the 6th term of independent directors and supervisors was adopted at the 1st ProvisionalShareholders’ Meeting held on December 12, 2013, and the allowance for independent directors is RMB150 thousand (tax included) per year, while it is RMB36 thousand for supervisors for the period of three years (tax included).
2. Basic wages are prepaid on monthly basis and the overall remunerations are paid upon completion of the annual assessment. Allowances for independent directors and supervisors are paid according to the scheme approved by theShareholders’ Meeting.
Remuneration of directors, supervisors, and executives in the report period
InRMB’0000
||||||||
|-|-|-|-|-|-|-|
||||||Total of reward from the|Actual reward in total at|
|Name|Position|Sex|Age|Statue of duty|||
||||||Company|end of report term|
|Zhen Bin|Chairman|Male|51|In Office|790,220.18|No|
|Yan|Vice Chairman|Male|57|In Office||Yes|
|Jianhua|||||||
|Yang|Vice Chairman|Male|51|In Office||Yes|
|Yongming|||||||
|Nie|Director|Male|58|In Office||Yes|
|Zhonghai|||||||
|Ye Zhong|Director, GM|Male|47|In Office|791,409.38|Yes|
|Liu|Director|Male|58|In Office|732,688.58|No|
|Guoqiang|||||||
|Kong|||||||
||Director, Engineer General|Male|45|In Office|726,461.78|No|
|Jianqiang|||||||
|Xu|||||||
||Independent Director|Male|53|In Office|150,000|No|
|Yongbin|||||||
|Zhang|||||||
||Independent Director|Male|58|In Office|150,000|No|
|Hejie|||||||
|Lv Fan|Independent Director|Male|60|In Office||Yes|
|Zhang||Fema|||||
||Independent Director||43|In Office|12,500|Yes|
|Xiaoyan||le|||||
|Tan|||||||
||Independent Director|Male|61|In Office|150,000|No|
|Jianrong|||||||
|Li Shijie|Chief Supervisor|Male|46|In Office||Yes|
|Wang|||||||
||Supervisor|Male|48|In Office||Yes|
|Xiaohu|||||||
|Zhang|Supervisor|Male|58|In Office|553,210.31|No|
|Yougen|||||||
|Lu Jianhua|Employee Supervisor|Male|54|In Office|327,947|No|
|Fang Yin|Employee Supervisor|Male|53|In Office|318,902.05|No|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015
||||||||
|-|-|-|-|-|-|-|
|Yu|||||||
||Vice GM, secretary of the||||||
|Changqu||Male|58|In Office|733,901.78|No|
||board||||||
|an|||||||
|Zhang|||||||
||Vice General Manager|Male|57|In Office|729,856.18|No|
|Shutan|||||||
|||Fema|||||
|Pu|Vice General Manager,||||||
||||40|In Office|726,135.38|No|
|Yangshuo|Chief Accountant|le|||||
|Li|Vice General Manager|Male|52|In Office|728,249.78|No|
|Jiansheng|||||||
|Total|--|--|--|--|7,621,482.4|--|

Incentive shares granted to directors, supervisors, and executives in the report period.
Not applicable
V. Employees of the Company
（1）Particulars about employees.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Total of employees: 3849||||||||||
|Classified on positions|||Classified on education|||Classified on professional certificates||||
|Categories|Numberofperson|Percentage intotal number|Categories|Number ofperson|Percentage intotal number|Technical andmanagement|Categories|Number ofperson|Percentage in totalnumber|
|Production|2264|58.82%|Doctorialdegree|8|0.21%||Senior|163|4.23%|
|Sales|308|8.00%|Master’sDegree|207|5.38%||Medium|461|11.98%|
|Tech|691|17.95%|Bachelor|1062|27.59%||Primary|429|11.15%|
|Finance|71|1.84%|Collegediploma|741|19.25%||Below primary|532|13.82%|
|Administration|515|13.38%|Belowcollegediploma|1831|47.57%|Workers|Senior technician|381|9.90%|
||||||||Technicians|410|10.65%|
||||||||Senior technicalworkers|435|11.30%|
||||||||Intermediatetechnical workers|237|6.16%|
||||||||Primarytechnician|98|2.55%|
||||||||Technicaloperators|703|18.26%|

 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 2015 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
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 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 2015, the employee educational training work closely linked to the annual work target, focused on the "internal department business training", aimed at training and optimizing "three groups of talents of business management personnel, and professional technicians, and high skilled personnel" in 2015, and developed 2015 Corporation Educational Training Program, and required the implementation of each project and spared no effort to fully improve the career capacities and integrated qualities of all the employees. In terms of funding, the corporation extracted2% from the payrolls as the staff education funds for effective protection of the expenses for the training program. Statistics show that 133 training courses were held and 3572 employees attended the training program in 2015. In 2016, we plan to carry out 185 training programs in the fields of business management, engineering, technology, skills, quality and safety.
4. Staff jobs, education, job title number and proportion refer to the following pie chart:
按照工种分
行政, 515,
13.38%
财务, 71,
1.84%
技术, 691,
17.95% 生产, 2264,
58.82%
销售, 308,
8.00%
按照学历分
博士, 8,
硕士, 207,
0.21%
5.38%
本科, 1062,
27.59%
大专以下,
1831,47.57%
大专, 741,
19.25%
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015按照职称分
技术操作工,
高级, 163,
703,18.26%
4.23%
中级, 461,
初级技工,
11.98%
98,2.55%
中级技工, 初级, 429,
237,6.16% 11.15%
高级技工,
初级以下,
435,11.30%
532,13.82%
高级技师,
技师, 410,
381,9.90%
10.65%
Payroll cost of the company
|||
|-|-|
||This period|
|The current (people) the total number of paid staff|3,849|
|The current overall compensation amount||
||44,370.31|
|(RMB’0000)||
|Overall compensation ratio of current operating||
||17.07%|
|revenues||
|All employees per capita salary|65.88|
|amount(RMB’0000)||
||11.53|

Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 IX. Administrative structure
I. General situation
(1) Standardized operation of corporate governance structure
In accordance with the "company law" provisions, The Company has its executive, decision making and supervisory bodies operated strictly according to the Articles of Association,Shareholders’ Meeting Criteria, Board Meeting Criteria, and Supervisory Committee Criteria. Meetings were held by legal procedures, Corporate governance in accordance with the relevant provisions of the laws and regulations of China Securities Regulatory Commission and the Shenzhen Stock Exchange.
2. Effectiveness of organization
The Board of Directors is the executive body of the decisions made by theShareholders’ 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 theShareholders’ 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. In the report period, According to the strategic planning objectives and business transformation needs, the marketing organization to optimize and adjust, so that the organization of the company to run more scientific, efficient and standardized.
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, The company revised the "measures for the administration of foreign financial assistance" and "measures for the administration of asset impairment and asset write offs".
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.
Thereisn’t any difference between the management practice and the regulations of the Company Law and 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
TheCompany’s majors of design, manufacture, sale business of industrial steam turbine was independent from the holding company (Hangzhou Steam Turbine Power Group). The controlling shareholder in the subsidiary engineering company to undertake the projectin，Some of the holding subsidiaries of the Group are selling the
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015Company’s steam turbine products and spare parts, which are at market prices; The Company and the Group are not sharing any office site.
2. On personnel management
The Company kept independence with the holding shareholders on the aspects of human resource and remuneration management. Although theCompany’s chairman of the Board and the vice chairman of the Board were part-time by the parentcompany’s (Hang Steam Turbine Group) chairman of the Board and the vice chairman of the Board; theCompany’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. TheCompany’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. TheCompany’s intermediate managers are employed by theCompany’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
Department of Securities and Law– the special legal department was founded in the report term, and performs duties according to Administration Rules for Legal Consultancy to 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
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 IV. Annual General Meeting and ExtraordinaryShareholders’ Meetings in the Reporting Period
1.Annual General Meeting
|||||||
|-|-|-|-|-|-|
|||Investor||||
|Sessions|Type|participation|Meeting Date|Disclosure date|Disclosure index|
|||ratio||||
||||||Resolutions of the Shareholders’ Annual|
||||||Meeting 2015 (Announcement No.|
|2014||||||
||Annual Shareholders’||||2015-30) released by Securities Times,|
|Shareholders’||67.08%|May 15,2015|May 16, 2015||
||General Meeting||||Shanghai Securities Daily, Hong Kong|
|general meeting||||||
||||||Commercial Daily, and|
||||||Http://www.cninfo.com.cn|
||||||Resolutions of the First provisional|
|The First||||||
||||||Shareholders’ Annual Meeting 2015|
|provisional|Provisional|||||
||||||(Announcement No. 2015-84) released by|
|shareholders’|shareholders’|67.08%|December 4, 2015|December 5, 2015||
||||||Securities Times, Shanghai Securities|
|General meeting|General meeting||||Daily, Hong Kong Commercial Daily, and|
|in 2015|||||Http://www.cninfo.com.cn.|

 2. Preferred stockholders restored voting rights to request to convene ProvisionalShareholders’ Meeting.
□Applicable√Not applicable
V. Duty performance of independent Directors
1. Attendance of Board Meetings and General Meetings
||||||||
|-|-|-|-|-|-|-|
|Independent Directors’ Attendance at Board Meetings|||||||
||Number of||||||
|||||||Failure to|
||Board||Number of||||
|||||||personally|
||meetings|Number of|meetings|Number of|||
|Independent|||||Number of|attend board|
||necessary to|spot|attended by|attendances by|||
|Directors|||||absence|meetings|
||be attended in|attendances|Communicatio|representative|||
|||||||successively|
||the reporting||n||||
|||||||twice (Yes/No)|
||period||||||
|Xu Yongbin|9|2|7|0|0|No|
|Lv Fan|8|2|6|0|0|No|
|Zhang Hejie|9|2|7|0|0|No|
|Tan Jianrong|9|1|8|0|0|No|
|Zhang Xiaoyan|1|0|1|0|0|No|
|Number of general meetings|||||||
|attended by independent directors||2|||||
|as non-voting delegates|||||||

2.Objection of independent directors on some relevant issues
Independent directors proposed no objection against the relevant matters in the reporting period.
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 3. Other notes to duty performance of independent directors
Suggestions of the independent directors:
1. Upon listening of the report made by the management, the independent directors suggested the Company to formulate new standards for the whole industry and adjust theCompany’s product structure. To refine market strategy and performance assessment, Do thirteen five planning.
2. At the 1st meeting of the independent directors and the CPAs, the independent directors suggested the CPAs to analyze theCompany’s industrial position from the point of auditing. A comparative analysis of the company's industry.
3. At the 2nd meeting, the independent directors suggested to pay attention to auditing and disclosure of the change of accounting policies; written confirmation shall be done on some of the receivable accounts; risk-control policies shall be made on some of the suspended projects. Proposed to strengthen the risk management and control of the contract.
The management accepted the above suggestions.
VI. Fulfilling of duties by the Special Committees under the Board of Directors
(I) The Auditing Committee
The Auditing Committee was performing its duties strictly according to the Working Criteria of Auditing Committee and was mainly in charge of supervising, verification and communication of internal and external auditing works. It was also performing the duties to satisfy the requirement of China Securities Regulatory Commission as well as Shenzhen Stock Exchange. In the report period, the Company adjusted the composition of the Auditing Committee and its members in the report period, and the main works performed by the Auditing Committee were:
1. To call the 3rd meeting of the 6th term of Auditing Committee at which the annual auditing work was discussed and suggestions were provided on problems in the auditing process.
2. The 4th meeting of the 6th term of Auditing Committee was held to examine the Annual Report 2014, the GeneralManager’s Report, Financial Report, Dividend Plan, Proposal of Routine Related Transactions, Providing of Inventory Provision and Bad Debt Provision, Internal Control Manual, Internal Control Introspective Report, Internal Control Annual Report and Plan. Statements and were provided on the auditing works of the CPA, and opinions were issued about extending of theCPA’s service. Improvement suggestions were provided on internal control. Opinions were provided on the Annual Report and Financial Report which were about to be submitted to the Board.
(II) The Strategy Committee
The Strategy Committee is established to provide opinions or suggestions for theCompany’s development and investment strategies.
(III) The Remuneration and Assessment Committee
The Remuneration and Assessment Committee was established to set up standard for assessing the performance and deciding the remuneration of the directors and executives. Detailed plans were produced and submitted to the Board. In the report period, the Board refined the composition of the Remuneration Committee according to the composition of the new term of Board. The Committee conducted the following works in the report period: The 3rd meeting of the 6th term of Remuneration and Assessment Committee was held to examine the assessment outcome of the directors and executives for year 2014, and produced the remuneration plan for the examination of the Board.
(IV) The Nomination Committee
The Nomination Committee was established to provide suggestions to the Board on the composition of the Board, and to examine the qualifications of candidates for directors and executives. In the report period, the Board
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 refined the composition of the Nomination Committee according to the composition of the new term of Board. The Committee conducted the following works in the report period:
The 3rd meeting of 6th term of nomination committee was called to examine the nominees of executives and suggested to the Board.
Hangzhou Steam Turbine Co., Ltd. Annual Report 2015 VII. Fulfilling of duties of the Supervisory Committee
||||||||
|-|-|-|-|-|-|-|
|||Supervisors at the|||Index of information disclosed at the|Date of disclosure of the|
|No. of meeting|Date of meeting||Titles of proposals|Resolutions|||
|||meeting|||official website|resolutions|
||||Work Report of Supervisory Committee 2014;||||
||||Annual Report 2014 and Summary;||||
||||Financial Report 2014;||(Announcement No. 2015-07) released||
|||Li Shijie, Wang|||||
|The 10th meeting of the||Xiaohui, Zhang|Dividend Plan 2014;|Proposals|by Securities Times, Shanghai|March 28,|
||March 26,2015||Introspective Report of Internal Control System||Securities Daily, Hong Kong||
|6th term of Committee||Yougen,Lu Jianhua and|2014;|adopted|Commercial Daily, and|2015|
|||Fang Yin|Report of Related Transactions in 2014 and||Http://www.cninfo.com.cn||
||||Projected for Year 2015; Proposal on changing||||
||||the company’s accounting estimates.||||
||||||(Announcement No. 2015-27) released||
|||Li Shijie, Wang|||||
|The 11th meeting of the||Xiaohui, Zhang||Proposals|by Securities Times, Shanghai|April 23,|
||April 22, 2015||The 1st Quarterly Report 2015, and summary||Securities Daily, Hong Kong||
|6th term of Committee||Yougen,Lu Jianhua and||adopted||2015|
||||||Commercial Daily, and||
|||Fang Yin|||Http://www.cninfo.com.cn||
||||||(Announcement No. 2015-49) released||
|||Li Shijie, Wang|||||
||||||by Securities Times, Shanghai||
|The 12th meeting of the||Xiaohui, Zhang||Proposals|||
||August 24,2015||Interim Report 2015 and Summary||Securities Daily, Hong Kong|August25,2015|
|6th term of Committee||Yougen,Lu Jianhua and||adopted|||
||||||Commercial Daily, and||
|||Fang Yin|||||
||||||Http://www.cninfo.com.cn||
||||||(Announcement No. 2015-71) released||
|||Li Shijie, Wang|||||
|The 13th meeting of the||Xiaohui, Zhang||Proposals|by Securities Times, Shanghai|October 28,|
||October 27,2015||The 3rd Quarterly Report 2015, and Summary||Securities Daily, Hong Kong||
|6th term of Committee||Yougen,Lu Jianhua and||adopted||2015|
||||||Commercial Daily, and||
|||Fang Yin|||Http://www.cninfo.com.cn||

Brief opinion of the Supervisory Committee on risks of the Company
1. SupervisoryCommittee’s opinions on the Annual Report 2014
On March 26, 2015, the Committee examined the Annual Report 2014 and the summary version. All of the members considered the Annual Report 2014 is frankly and completely reflecting the financial situation and business performance in the report term (January 1– December 31, 2014). They will assume joint and individual responsibilities for the accuracy, authentic, and completeness of the Report.
2. SupervisoryCommittee’s opinion on the Internal Control Introspection Report 2014
The Internal Control Introspection Report 2014 was reflecting the operation of the internal control system objectively, frankly, and completely.
3. SupervisoryCommittee’s opinions on the routine related transactions in 2014
The Committee verified the related transactions conducted in 2014 and deems: The related transactions was conducted strictly at the prices setout by the relative agreement approved by theShareholders’ Meeting, and complying with the related regulations and legal procedures. Pricing of the related transactions was on fair and reasonable basis without illegal operation, and no harming on the interests of the Company or the shareholder, especially the mid-small shareholders.
4.Board of Supervisors on the views of a change in accounting estimate
Board of Supervisors acknowledged that the company accounts receivable bad debts proportion of changes in accounting estimates, and the actual situation in line with the provisions of relevant laws and regulations, after the change of accounting estimate can be fair, appropriately reflect the company's financial position and operating results. Changes in accounting estimates the company procedures comply with laws, regulations and relevant regulations.
5. SupervisoryCommittee’s opinions on the 1st Quarterly Report 2015
The producing and examination procedures of the 1st quarterly report 2015 were legal and complying with the requirements of the CSRC. The Report is reflecting the financial position and business performance of the Company in the 1st quarter frankly and completely. There is no false record, misleading statement, or material omission in the report.
6. SupervisoryCommittee’s opinions on the Interim Report 2015
The producing and examination procedures of the 1st quarterly report 2014 were legal and complying with the requirements of the CSRC. The Report is reflecting the financial position and business performance of the Company in the 1st quarter frankly and completely. There is no false record, misleading statement, or material omission in the report.
7. SupervisoryCommittee’s opinions on the 3rd Quarterly Report 2014
The Committee inspected and discussed on the 3rd Quarterly Report 2014. All of the members regard the report was frankly and completely reflecting the financial situation and business performance. They will assume joint and individual responsibilities for the accuracy, authentic, and completeness of the Report.
VIII. Assessment and incentive Mechanism for Senior executives
The Company adopts the annual remuneration scheme for directors (excluding independent directors) and senior executives (including Chairman of the Supervisory Committee) which is a combination of basic wages and performance wages. According to the “Remuneration and Assessment Scheme for the 6th term of Directors and Senior Executives” adopted by the 2nd meeting of the 6th term of Board and the 1stshareholders’ provisional meeting 2013, the Remuneration& Assessment Committee is responsible to assess the performances of the directors and senior executives according to stipulated procedures. Directors and senior executives are scored and assessed one after another and comes out with a plan subject to approval of the Board and theShareholders’ Meeting. Basic wages are distributed on monthly basis and the overall remunerations are paid upon completion of the annual assessment.
In the report term, the Directors (exclude independent directors) and senior executives (including the Chairman of Supervisory Committee) are scored and assessed one after another and comes out with a plan decided by the 4th
meeting of the 6th term of Remuneration Committee, which was subject to approval of the Board.
The Assessment and Remuneration Scheme was produced through legal procedures and has been monitoring and motivating the directors and senior executives.
The Companyhadn’t conducted any share incentive program to any directors or senior executives as of the end of report period.
IX. Internal control situations
1. Specific situations on major defects of internal control discovered during report period
□ Yes√ No
2. Self-evaluation report on internal control
||||
|-|-|-|
|Disclosure date of appraisal report|||
||March 19,2016||
|on internal control|||
||Disclosed by http://www.cninfo.com.cn dated March 19, 2016 (Announcement||
|Disclosure index of appraisal report on|||
|internal control|2016-24 )||
|Proportion of total unit assets covered by|||
|appraisal in the total assets of the|100.00%||
|consolidated financial statements of the|||
|company|||
|Proportion of total unit incomes covered|||
|by appraisal in the total business incomes|100.00%||
|of the consolidated financial statements of|||
|the company|||
|Standards of Defects Evaluation|||
|Type|Financial Report|Non-financial Report|
||Deficiency characterized as below will be|(1) Punishment received by governments|
||treated as fatal defects: To correct the fatal|below provincial level ( including|
||errors already published in the financial|provincial level) but no negative effects|
||report （except for the retrospection and|for our company’s periodic report|
||adjustments of previous years because of|disclosure will be considered as a general|
||policies changing and other objective factors|deficiency; (2) or punishments from|
||changing);fatal errors already discovered by|national governments above provincial|
|Standard|auditor, unidentified in the current financial|level but no negative effects for our|
||report; any fraud among top management;|company’s periodic report disclosure|
||invalid monitoring to the financial report|will be considered as a significant|
||from audit committee and internal audit|deficiency; (3) external official|
||department.|disclosure has been already carried out|
|||and brought certain negative effects to|
|||our company’s periodic report disclosure|
|||will be considered as a fatal deficiency.|
||In accordance with the degree of importance|1) Losses < consolidating 3% of pre-tax|
||of deficiency that may cause financial|profit, will be asserted as general|
||report errors, our company defined|deficiencies; (2) 3% of combined pre-tax|
||quantitative identification standard of|profit ≤ losses < 5% of combined|
||financial report internal deficiency control as|pre-tax profit, will be asserted as|
|Standards of Quantization|per the average of the last three-year total|significant deficiencies; (3) losses ≥5%|
||profit. (1) errors reported indicator < 3% of|of combined pre-tax profit, will be|
||total profit, will be asserted as general|asserted as fatal deficiencies.|
||deficiencies; (2) 3% of total profit ≤ errors||
||reported indicator < 5% of total profit, will||
||be asserted as significant deficiencies; (3)||
||errors reported indicator ≥ 5% of total||

|||
|-|-|
||profit, will be asserted as fatal deficiencies.|
|Number of major defects in financial|0|
|reporting（a）||
|Number of major defects in non financial|2|
|reporting (a)||
|Number of important defects in financial|0|
|reporting（a）||
|Number of important defects in non|0|
|financial reporting（a）||

X. Internal Control audit report
|||
|-|-|
|Review opinions in the internal control audit report||
|As far as our best understanding, Hangzhou Steam Turbine Co., Ltd. has been conducting effective internal control over its||
|financial reporting system in all material aspects we observed as of December 31, 2015, and has been following with the Enterprise||
|Internal Control Criteria.||
|Disclosure of internal audit report|Disclosure|
|Disclosure date of audit report|March 19,2016|
|of internal control (full-text)||
|Index of audit report of|Disclosed by http://www.cninfo.com.cn dated March 19, 2016 (Announcement No. 2016-36 )|
|internal control (full-text)||
|Internal audit report’s opinion|Unqualified audit opinion|
|Non-financial reporting the||
||No|
|existence of significant deficiencies||

Has the CPAs issued a qualifiedauditor’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
X.
Financial Report
I.Auditors’ Report
|||
|-|-|
|Type of auditing opinion|Standard report without qualified opinion|
|Date of issue of the Auditors’ Report|March 17,2016|
||Pan-China Certified Public Accountants (Special|
|Name of the CPA||
||common partnership)|
|Ref. No. of the Auditors’ Report|TIANJIANSHEN〔2016〕No.978|
|Name of the certified accountants|Jiang Xiaodong, Zhu Guogang|

Auditors’ Report
To the entire shareholders of Hangzhou Steam Turbine Co., Ltd.
We have audited the Financial Statements of Hangzhou Steam Turbine Co., Ltd. (the Company) attached hereafter, including the Balance Sheet and Consolidated Balance Sheet ended December 31, 2015, Income Statement and Consolidated Income Statement, Cash Flow Statement and Consolidated Cash Flow Statement, Statement of Change in Share Equities and Consolidated Statement of Change in Share Equities of year 2015, as well as the notes to the Financial Statements.
I.Executives’ responsibilities on the Financial Statements
Preparing and appropriately presenting of the Financial Statements are the responsibilities of the management of The Company. This responsibilities are including: (1) Preparing the financial statements according to Enterprise Accounting Standards and make them reflecting a fair basis. (2) Design, implement and maintain the internal control system related to producing of the Financial Statements, to prevent the Financial Statements from major false presentation due to cheating or error.
II. Responsibilities of the CPA
Our responsibilities are to issue auditing opinions on the Financial Statements basing on the auditing workswe’ve done on them. We carried out the auditing works with compliance to Chinese CPA Auditing Standard, which requires us to plan and implement our works on the basis of professional ethic standards, and obtain reasonable guarantee that the Financial Statements are free of major false statements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider the internal control relevant to theentity’s preparation of financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting polices used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
III.Auditors’ Opinions
We believe that the Company has been following with the Enterprise Accounting Standard in preparing of the Financial Statements. The Financial Statements is reflecting, both of the Company and the consolidated, in all important aspects, the financial situation of Hangzhou Steam Turbine Co., Ltd. as of December 31, 2015 and the business performance and cash flow of year 2014 both of the Company and the consolidated.
Pan-China Certified Public Accountants (Special common partnership) CPA China : Jiang Xiaodong Hangzhou China CPA China : Zhu Guogang March 17, 2016
II. Financial statements
Currency unit for the statements in the notes to these financial statements:RMB
1. Consolidated balance sheet
Preparedby:：Hangzhou Steam Turbine Co., Ltd.
December 31,2016
In RMB
||||
|-|-|-|
|Items|At the end of term|Beginning of term|
|Current asset：|||
|Monetary fund|751,596,796.24|613,958,063.91|
|Settlement provision|||
|Outgoing call loan|||
|Financial assets measured at fair value with variations accounted into|||
|current income account|||
|Derivative financial assets|||
|Bill receivable|680,518,943.49|701,109,938.01|
|Account receivable|2,096,090,157.61|2,388,919,641.98|
|Prepayments|139,267,324.65|172,022,768.39|
|Insurance receivable|||
|Reinsurance receivable|||
|Provisions of Reinsurance contracts receivable|||
|Interest receivable|||
|Dividend receivable|||
|Other account receivable|25,574,057.29|25,382,223.32|
|Repurchasing of financial assets|||
|Inventories|1,826,869,838.60|1,594,074,228.69|
|Assets held for sales|||
|Non-current asset due in 1 year|||
|Other current asset|427,203,835.44|382,070,235.56|
|Total of current assets|5,947,120,953.32|5,877,537,099.86|
|Non-current assets：|||
|Loans and payment on other’s behalf disbursed|||
|Disposable financial asset|509,409,741.77|498,990,862.94|
|Expired investment in possess|||
|Long-term receivable|||
|Long term share equity investment|||
|Property investment|||
|Fixed assets|642,155,636.34|678,033,380.86|
|Construction in progress|119,187,107.52|89,469,259.14|
|Engineering material|||
|Fixed asset disposal|||
|Production physical assets|||
|Gas & petrol|||
|Intangible assets|304,949,207.18|304,100,619.77|

||||
|-|-|-|
|R & D petrol|||
|Goodwill|||
|Long-germ expenses to be amortized|2,029,471.80|1,041,796.52|
|Differed income tax asset|158,924,887.70|102,885,927.93|
|Other non-current asset|||
|Total of non-current assets|1,736,656,052.31|1,674,521,847.16|
|Total of assets|7,683,777,005.63|7,552,058,947.02|
|Current liabilities|||
|Short-term loans|85,350,000.00|198,600,000.00|
|Loan from Central Bank|||
|Deposit received and hold for others|||
|Call loan received|||
|Financial liabilities measured at fair value with variations accounted into|||
|current income account|||
|Derivative financial liabilities|||
|Bill payable|194,226,049.73|150,763,452.14|
|Account payable|810,420,381.45|763,085,718.92|
|Advance payment|1,736,820,949.19|1,374,736,209.67|
|Selling of repurchased financial assets|||
|Fees and commissions receivable|||
|Employees’ wage payable|70,257,474.46|65,672,706.09|
|Tax payable|36,008,109.09|126,091,260.73|
|Interest payable|||
|Dividend payable|||
|Other account payable|29,705,125.51|29,597,889.12|
|Reinsurance fee payable|||
|Insurance contract provision|||
|Entrusted trading of securities|||
|Entrusted selling of securities|||
|Liabilities held for sales|||
|Non-current liability due in 1 year|300,000.00||
|Other current liability|||
|Total of current liability|2,963,088,089.43|2,708,547,236.67|
|Non-current liabilities：|||
|Long-term loan|123,400,000.00|18,500,000.00|
|Bond payable|||
|Including：preferred stock|||
|Sustainable debt|||
|Long-term payable|330,000.00|330,000.00|
|Long-term payable employees’s remuneration|||
|Special payable|||
|Expected liabilities|||
|Deferred income|6,804,425.00|8,252,705.00|
|Deferred income tax liability|1,017,473.05|1,017,473.05|
|Other non-current liabilities|||
|Total non-current liabilities|131,551,898.05|28,100,178.05|
|Total of liability|3,094,639,987.48|2,736,647,414.72|

||||
|-|-|-|
|Owners’ equity|||
|Share capital|754,010,400.00|754,010,400.00|
|Other equity instrument|||
|Including：preferred stock|||
|Sustainable debt|||
|Capital reserves|139,590,345.09|139,590,345.09|
|Less：Shares in stock|||
|Other comprehensive income|-852,752.00|-640,401.72|
|Special reserves|31,764,920.51|24,603,149.96|
|Surplus reserves|621,112,807.78|621,112,807.78|
|Common risk provision|||
|Undistributed profit|2,673,711,591.42|2,911,921,943.21|
|Total of owner’s equity belong to the parent company|4,219,337,312.80|4,450,598,244.32|
|Minority shareholders’ equity|369,799,705.35|364,813,287.98|
|Total of owners’ equity|4,589,137,018.15|4,815,411,532.30|
|Total of liabilities and owners’ equity|7,683,777,005.63|7,552,058,947.02|

 Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 2.Parent Company Balance Sheet
In RMB
||||
|-|-|-|
|Items|At the end of term|Beginning of term|
|Current asset：|||
|Monetary fund|387,916,202.79|248,509,410.84|
|Financial assets measured at fair value|||
|with variations accounted into current|||
|income account|||
|Derivative financial assets|||
|Bill receivable|365,504,827.88|385,543,218.94|
|Account receivable|1,637,391,672.98|2,010,980,253.99|
|Prepayments|53,440,645.95|72,514,421.98|
|Interest receivable|||
|Dividend receivable|||
|Other account receivable|12,245,371.97|33,537,812.35|
|Inventories|1,454,420,457.64|1,159,102,793.67|
|Assets held for sales|||
|Non-current asset due in 1 year|||
|Other current asset|170,653,680.58|30,000,000.00|
|Total of current assets|4,081,572,859.79|3,940,187,911.77|
|Non-current assets：|||
|Disposable financial asset|465,604,378.26|454,010,862.94|
|Expired investment in possess|||
|Long-term receivable|||
|Long term share equity investment|502,919,378.03|502,919,378.03|
|Property investment|||

||||
|-|-|-|
|Fixed assets|334,677,256.20|354,282,465.72|
|Construction in progress|79,982,551.34|67,302,264.59|
|Engineering material|||
|Fixed asset disposal|||
|Production physical assets|||
|Gas & petrol|||
|Intangible assets|177,872,266.49|181,918,239.41|
|R & D petrol|||
|Goodwill|||
|Long-germ expenses to be amortized|761,660.66|1,015,547.54|
|Differed income tax asset|120,771,991.85|74,164,090.15|
|Other non-current asset|||
|Total of non-current assets|1,682,589,482.83|1,635,612,848.38|
|Total of assets|5,764,162,342.62|5,575,800,760.15|
|Current liabilities|||
|Short-term loans||100,000,000.00|
|Financial liabilities measured at fair|||
|value with variations accounted into|||
|current income account|||
|Derivative financial liabilities|||
|Bill payable|13,500,000.00||
|Account payable|436,004,535.90|448,755,575.94|
|Advance payment|1,428,724,224.76|977,630,617.45|
|Employees’ wage payable|51,373,858.57|44,164,067.67|
|Tax payable|3,538,126.39|88,238,458.17|
|Interest payable|||
|Dividend payable|||
|Other account payable|20,338,742.44|19,738,024.51|
|Classified as held for sale debt|||
|Non-current liability due in 1 year|||
|Other current liability|||
|Total of current liability|1,953,479,488.06|1,678,526,743.74|
|Non-current liabilities：|||
|Long-term loan|100,000,000.00||
|Bond payable|||
|Including：preferred stock|||
|Sustainable debt|||
|Long-term payable|||
|Long-term payable to employees|||
|Special payable|||
|Expected liabilities|||
|Deferred income|22,250.00|111,250.00|
|Deferred income tax liability|1,017,473.05|1,017,473.05|
|Other non-current liabilities|||

||||
|-|-|-|
|Total of Non-current liabilities|101,039,723.05|1,128,723.05|
|Total of liability|2,054,519,211.11|1,679,655,466.79|
|Owners’ equity|||
|Share capital|754,010,400.00|754,010,400.00|
|Other equity instrument|||
|Including：preferred stock|||
|Sustainable debt|||
|Capital reserves|138,953,250.09|138,953,250.09|
|Less：Shares in stock|||
|Other comprehensive income|||
|Special reserves|13,098,989.67|10,511,915.73|
|Surplus reserves|602,356,402.65|602,356,402.65|
|Undistributed profit|2,201,224,089.10|2,390,313,324.89|
|Total of owners’ equity|3,709,643,131.51|3,896,145,293.36|
|Total of liabilities and owners’ equity|5,764,162,342.62|5,575,800,760.15|

 Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 3.Consolidated Income statement
In RMB
||||
|-|-|-|
|Items|Report period|Same period of the previous year|
|I. Income from the key business|2,600,072,151.63|3,722,331,920.13|
|Incl：Business income|2,600,072,151.63|3,722,331,920.13|
|Interest income|||
|Insurance fee earned|||
|Fee and commission received|||
|II. Total business cost|2,820,446,852.60|3,280,418,813.78|
|Incl：Business cost|1,805,941,522.77|2,363,125,652.50|
|Interest expense|||
|Fee and commission paid|||
|Insurance discharge payment|||
|Net claim amount paid|||
|Insurance policy dividend paid|||
|Insurance policy dividend paid|||
|Reinsurance expenses|||
|Business tax and surcharge|12,014,265.08|30,181,499.93|
|Sales expense|156,702,806.61|158,590,899.44|
|Administrative expense|608,221,129.48|592,118,584.23|
|Financial expenses|-7,563,749.45|15,255,789.99|

||||
|-|-|-|
|Asset impairment loss|245,130,878.11|121,146,387.69|
|Add：Gains from change of fir value （“-”for loss）|||
|Investment gain（“-”for loss）|48,366,797.30|44,749,895.58|
|Incl: investment gains from affiliates|||
|Gains from currency exchange（“-”for loss）|||
|III. Operational profit（“-”for loss）|-172,007,903.67|486,663,001.93|
|Add ：Non-operational income|29,025,777.14|24,073,116.78|
|Including：Income from disposal of non-current assets|||
|Less：Non business expenses|5,206,380.51|9,404,298.16|
|Incl：Loss from disposal of non-current assets|497,599.66|427,820.27|
|IV.Total profit(“-”for loss)|-148,188,507.04|501,331,820.55|
|Less：Income tax expenses|-24,157,778.85|77,385,100.71|
|V. Net profit|-124,030,728.19|423,946,719.84|
|Net profit attributable to the owners of parent company|-162,809,311.79|352,077,352.23|
|Minority shareholders’ equity|38,778,583.60|71,869,367.61|
|VI. Other comprehensive income|-498,713.66|-183,791.92|
|Net of profit of other comprehensive income attributable to own|||
||-212,350.28|-78,257.87|
|ers of the parent company.|||
|（I）Other comprehensive income items that will not be|||
|reclassified into gains/losses in the subsequent accounting|||
|period|||
|1.Re-measurement of defined benefit plans of changes in net de|||
|bt or net assets|||
|2.Other comprehensive income under the equity method investe|||
|e can not be reclassified into profit or loss.|||
|（II）|||
||-212,350.28|-78,257.87|
|Other comprehensive income that will be reclassified into profit|||
|or loss.|||
|1.Other comprehensive income under the equity method investe|||
|e can be reclassified into profit or loss.|||
|2.Gains and losses from changes in fair value available for sale|||
|financial assets|||
|3.Held-to-maturity investments reclassified to gains and losses|||
|of available for sale financial assets|||
|4.The effective portion of cash flow hedges and losses|||
|5.Translation differences in currency financial statements|-212,350.28|-78,257.87|
|6.Other|||
||-286,363.38|-105,534.05|
|Net of profit of other comprehensive income attributable to Min|||
|ority shareholders’ equity|||
|VII. Total comprehensive income|-124,529,441.85|423,762,927.92|
|Total comprehensive income attributable to the owner of the|||
||-163,021,662.07|351,999,094.36|
|parent company|||
|Total comprehensive income attributable minority|||
||38,492,220.22|71,763,833.56|
|shareholders|||

||||
|-|-|-|
|VIII. Earnings per share|||
|（I）Basic earnings per share|-0.22|0.47|
|(II)Diluted earnings per share|-0.22|0.47|

 If there are entities merged under common control, their net profit realized before the merger were totaled toRMB***. While it wasRMB*** previous period.
Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 4. Income statement of the Parent Company
In RMB
||||
|-|-|-|
|||Same period of the previous|
|Items|Report period||
|||year|
|I. Income from the key business|1,555,496,371.53|2,584,209,968.34|
|Incl：Business cost|1,178,553,025.63|1,799,938,721.33|
|Business tax and surcharge|1,398,294.87|17,427,285.87|
|Sales expense|106,769,296.56|105,371,526.65|
|Administrative expense|381,197,193.85|356,505,227.23|
|Financial expenses|-2,524,709.34|14,178,027.98|
|Asset impairment loss|210,969,678.28|89,634,090.49|
|Add：Gains from change of fir value （“-”for loss）|||
|Investment gain（“-”for loss）|149,604,635.99|196,903,483.48|
|Incl: investment gains from affiliates|||
|II. Operational profit（“-”for loss）|-171,261,772.33|398,058,572.27|
|Add ：Non-operational income|12,361,410.34|9,768,097.16|
|Including：Income from disposal of non-current assets|10,283.00||
|Less：Non business expenses|1,955,547.08|4,565,898.06|
|Incl：Loss from disposal of non-current assets|41,138.39|10,307.63|
|III.Total profit(“-”for loss)|-160,855,909.07|403,260,771.37|
|Less：Income tax expenses|-47,167,713.28|30,379,474.06|
|IV. Net profit（“-”for net loss）|-113,688,195.79|372,881,297.31|
|V.Net of profit of other comprehensive income|||
|（I）Other comprehensive income items that will not be|||
|reclassified into gains/losses in the subsequent accounting period|||
|1.Re-measurement of defined benefit plans of changes in net debt|||
|or net assets|||
|2.Other comprehensive income under the equity method investee|||
|can not be reclassified into profit or loss.|||
|（ II ）|||
|Other comprehensive income that will be reclassified into profit or|||
|loss.|||
|1.Other comprehensive income under the equity method investee|||
|can be reclassified into profit or loss.|||
|2.Gains and losses from changes in fair value available for sale fin|||
|ancial assets|||

||||
|-|-|-|
|3.Held-to-maturity investments reclassified to gains and losses of|||
|available for sale financial assets|||
|4.The effective portion of cash flow hedges and losses|||
|5.Translation differences in currency financial statements|||
|6.Other|||
|VI. Total comprehensive income|-113,688,195.79|372,881,297.31|
|VII. Earnings per share：|||
|（I）Basic earnings per share|-0.15|0.49|
|(II)Diluted earnings per share|-0.15|0.49|

 Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao 5. Consolidated Cash flow statement
In RMB
||||
|-|-|-|
|Items|Report period|Same period of the previous year|
|I.Cash flows from operating activities|||
|Cash received from sales of goods or rending of services|2,631,164,968.80|3,095,800,715.65|
|Net increase of customer deposits and capital kept for|||
|brother company|||
|Net increase of loans from central bank|||
|Net increase of inter-bank loans from other financial|||
|bodies|||
|Cash received against original insurance contract|||
|Net cash received from reinsurance business|||
|Net increase of client deposit and investment|||
|Net increase of trade financial asset disposal|||
|Cash received as interest, processing fee and commission|||
|Net increase of inter-bank fund received|||
|Net increase of repurchasing business|||
|Tax returned|11,497,951.32|1,578,096.69|
|Other cash received from business operation|30,394,059.57|24,600,078.90|
|Sub-total of cash inflow|2,673,056,979.69|3,121,978,891.24|
|Cash paid for purchasing of merchandise and services|1,231,551,085.85|1,650,151,599.93|
|Net increase of client trade and advance|||
|Net increase of savings n central bank and brother|||
|company|||
|Cash paid for original contract claim|||
|Cash paid for interest, processing fee and commission|||
|Cash paid for policy dividend|||
|Cash paid to staffs or paid for staffs|667,800,831.48|669,696,270.69|
|Taxes paid|235,921,800.21|332,251,371.45|
|Other cash paid for business activities|182,105,489.10|186,150,677.25|

||||
|-|-|-|
|Sub-total of cash outflow from business activities|2,317,379,206.64|2,838,249,919.32|
|Cash flow generated by business operation, net|355,677,773.05|283,728,971.92|
|II.Cash flow generated by investing|||
|Cash received from investment retrieving|1,174,636.49||
|Cash received as investment gains|48,366,797.30|44,749,895.58|
|Net cash retrieved from disposal of fixed assets, intangible|||
||478,632.20|927,320.02|
|assets, and other long-term assets|||
|Net cash received from disposal of subsidiaries or other|||
|operational units|||
|Other investment-related cash received|1,744,905,999.95|1,813,194,104.88|
|Sub-total of cash inflow due to investment activities|1,794,926,065.94|1,858,871,320.48|
|Cash paid for construction of|||
|fixed assets, intangible assets|87,236,497.77|86,598,823.54|
|and other long-term assets|||
|Cash paid as investment|11,593,515.32|26,641,036.07|
|Net increase of loan against pledge|||
|Net cash received from subsidiaries and other operational|||
|units|||
|Other cash paid for investment activities|1,792,105,999.95|1,871,400,000.00|
|Sub-total of cash outflow due to investment activities|1,890,936,013.04|1,984,639,859.61|
|Net cash flow generated by investment|-96,009,947.10|-125,768,539.13|
|III.Cash flow generated by financing|||
|Cash received as investment|11,740,000.00|1,260,000.00|
|Incl: Cash received as investment from minor shareholders|11,740,000.00|1,260,000.00|
|Cash received as loans|200,650,000.00|249,800,000.00|
|Cash received from bond placing|||
|Other financing –related ash received||300,000,000.00|
|Sub-total of cash inflow from financing activities|212,390,000.00|551,060,000.00|
|Cash to repay debts|208,700,000.00|409,600,000.00|
|Cash paid as dividend, profit, or interests|143,465,665.55|247,818,256.90|
|Incl: Dividend and profit paid by subsidiaries to minor|||
||56,211,585.00|80,461,415.00|
|shareholders|||
|Other cash paid for financing activities||300,000,000.00|
|Sub-total of cash outflow due to financing activities|352,165,665.55|957,418,256.90|
|Net cash flow generated by financing|-139,775,665.55|-406,358,256.90|
|IV. Influence of exchange rate alternation on cash and cash|||
||6,568,940.63|232,741.14|
|equivalents|||
|V.Net increase of cash and cash equivalents|126,461,101.03|-248,165,082.97|
|Add: balance of cash and cash equivalents at the beginning|||
||562,763,561.50|810,928,644.47|
|of term|||
|VI ..Balance of cash and cash equivalents at the end of|||
||689,224,662.53|562,763,561.50|
|term|||

Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao
6. Cash Flow Statement of the Parent Company
In RMB
||||
|-|-|-|
|Items|Amount in this period|Amount in last period|
|I.Cash flows from operating activities|||
|Cash received from sales of goods or rending of services|1,635,853,743.22|1,900,714,754.53|
|Tax returned|9,328,982.41||
|Other cash received from business operation|3,889,695.82|8,818,961.35|
|Sub-total of cash inflow|1,649,072,421.45|1,909,533,715.88|
|Cash paid for purchasing of merchandise and services|703,949,384.41|1,013,159,494.53|
|Cash paid to staffs or paid for staffs|458,460,020.00|469,600,583.04|
|Taxes paid|97,136,615.44|163,533,253.01|
|Other cash paid for business activities|113,710,360.58|105,859,510.42|
|Sub-total of cash outflow from business activities|1,373,256,380.43|1,752,152,841.00|
|Cash flow generated by business operation, net|275,816,041.02|157,380,874.88|
|II.Cash flow generated by investing|||
|Cash received from investment retrieving|||
|Cash received as investment gains|149,604,635.99|196,903,483.48|
|Net cash retrieved from disposal of fixed assets, intangible assets, and|||
||296,808.00||
|other long-term assets|||
|Net cash received from disposal of subsidiaries or other operational|||
|units|||
|Other investment-related cash received|440,000,000.00|510,357,990.86|
|Sub-total of cash inflow due to investment activities|589,901,443.99|707,261,474.34|
|Cash paid for construction of|||
|fixed assets, intangible assets|58,565,139.10|45,567,613.80|
|and other long-term assets|||
|Cash paid as investment|11,593,515.32|7,261,036.07|
|Net cash received from subsidiaries and other operational units|||
|Other cash paid for investment activities|580,000,000.00|538,000,000.00|
|Sub-total of cash outflow due to investment activities|650,158,654.42|590,828,649.87|
|Net cash flow generated by investment|-60,257,210.43|116,432,824.47|
|III.Cash flow generated by financing|||
|Cash received as investment|||
|Cash received as loans|100,000,000.00|100,000,000.00|
|Cash received from bond placing|||
|Other financing –related ash received||300,000,000.00|
|Sub-total of cash inflow from financing activities|100,000,000.00|400,000,000.00|
|Cash to repay debts|100,000,000.00|260,000,000.00|
|Cash paid as dividend, profit, or interests|80,041,734.46|160,324,080.00|
|Other cash paid for financing activities||300,000,000.00|
|Sub-total of cash outflow due to financing activities|180,041,734.46|720,324,080.00|
|Net cash flow generated by financing|-80,041,734.46|-320,324,080.00|
|IV. Influence of exchange rate alternation on cash and cash equivalents|3,889,695.82|-273,191.65|
|V.Net increase of cash and cash equivalents|139,406,791.95|-46,783,572.30|
|Add: balance of cash and cash equivalents at the beginning of term|248,509,410.84|295,292,983.14|

||||
|-|-|-|
|VI ..Balance of cash and cash equivalents at the end of term|387,916,202.79|248,509,410.84|

 Legal Representative:Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao
7. Consolidated Statement on Change inOwners’ Equity
Amount in this period
In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Amount in this period|||||||||||||
||Owner’s equity Attributable to the Parent Company|||||||||||||
|||Other Equity||||||||||||
|Items||||||||||||Minor||
|||instrument||||Less:||||Comm|||Total of owners|
||Share Capital|prefer|||Capital|Share|OtherComprehensi|Specialized|Surplus|on risk|Attributable|shareholders’equity|equity|
|||red|Sustainable|Other|reserves|s instock|ve Income|reserve|reserves|provision|profit|||
|||stock||||||||||||
||||debt|||||||||||
|I.Balance at the end of last year|754,010,400.00||||139,590,345.09||-640,401.72|24,603,149.96|621,112,807.78||2,911,921,943.21|364,813,287.98|4,815,411,532.30|
|Add: Change of accounting policy||||||||||||||
|Correcting of previous errors||||||||||||||
|Merger of entities under common||||||||||||||
|control||||||||||||||
|Other||||||||||||||
|II.Balance at the beginning of current|754,010,400.00||||139,590,345.09||-640,401.72|24,603,149.96|621,112,807.78||2,911,921,943.21|364,813,287.98|4,815,411,532.30|
|year||||||||||||||
|III.Changed in the current year|||||||-212,350.28|7,161,770.55|||-238,210,351.79|4,986,417.37|-226,274,514.15|
|（1）Total comprehensive income|||||||-212,350.28||||-162,809,311.79|38,492,220.22|-124,529,441.85|
|（II）Investment or decreasing of capital||||||||||||19,740,000.00|19,740,000.00|
|by owners||||||||||||||
|1．Ordinary Shares invested by Shareho||||||||||||19,740,000.00|19,740,000.00|
|lders||||||||||||||
|2．Holders of other equity instruments i||||||||||||||
|nvested capital||||||||||||||
|3．Amount of shares paid and accounted||||||||||||||
|as owners’ equity||||||||||||||
|4．Other||||||||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|（III）Profit allotment||||||-75,401,040.00|-56,211,585.00|-131,612,625.00|
|1.Providing of surplus reserves|||||||||
|2.Providing of common risk provisions|||||||||
|3．Allotment to the owners (or||||||-75,401,040.00|-56,211,585.00|-131,612,625.00|
|shareholders)|||||||||
|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. Other|||||||||
|(V). Special reserves||||7,161,770.55|||2,965,782.15|10,127,552.70|
|1. Provided this year||||10,038,758.63|||3,591,976.18|13,630,734.81|
|2．Used this term||||2,876,988.08|||626,194.03|3,503,182.11|
|（VI）Other|||||||||
|IV. Balance at the end of this term|754,010,400.00|139,590,345.09|-852,752.00|31,764,920.51|621,112,807.78|2,673,711,591.42|369,799,705.35||

Amount in last year
In RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Amount in last year|||||||||||||
||Owner’s equity Attributable to the Parent Company|||||||||||||
|||Other Equity||||||||||||
|Items||||||||||||Minor||
|||instrument||||Less:||||Comm|||Total of owners’|
||Share Capital|prefer|Sustai||Capital|Share|OtherComprehensi|Specialized|Surplus|on risk|Attributable|shareholders’equity|equity|
||||||reserves|s in||reserve|reserves|provis|profit|||
|||red|nable|Other||stock|ve Income|||ion||||
|||stock||||||||||||
||||debt|||||||||||
||||||139,590,345.|||||||||
|I.Balance at the end of last year|754,010,400.00||||||-562,143.85|17,276,201.15|583,824,678.05||2,736,802,630.30|380,677,958.00|4,611,620,068.74|
||||||09|||||||||
|Add: Change of accounting policy|||||||||||11,132,170.41|-11,132,170.41||
|Correcting of previous errors||||||||||||||
|Merger of entities under common||||||||||||||
|control||||||||||||||
|Other||||||||||||||
||||||139,590,345.|||||||||
|II.Balance at the beginning of||||||||||||||
||754,010,400.00||||||-562,143.85|17,276,201.15|583,824,678.05||2,747,934,800.71|369,545,787.59|4,611,620,068.74|
|current year|||||09|||||||||
|III.Changed in the current year|||||||-78,257.87|7,326,948.81|37,288,129.73||163,987,142.50|-4,732,499.61|203,791,463.56|
|（1）Total comprehensive income|||||||-78,257.87||||352,077,352.23|71,763,833.56|423,762,927.92|
|（II）Investment or decreasing of||||||||||||1,260,000.00|1,260,000.00|
|capital by owners||||||||||||||
|1．Ordinary Shares invested by She||||||||||||1,260,000.00|1,260,000.00|
|reholders||||||||||||||
|2．Holders of other equity instrume||||||||||||||
|nts invested capital||||||||||||||
|3．Allotment to the owners (or||||||||||||||
|shareholders)||||||||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|4．Other|||||||||
|(IV) Internal transferring of owners’|||||37,288,129.73|-188,090,209.73|-80,461,415.00|-231,263,495.00|
|equity|||||||||
|1. Capitalizing of capital reserves|||||37,288,129.73|-37,288,129.73|||
|(or to capital shares)|||||||||
|2. Capitalizing of surplus reserves|||||||||
|(or to capital shares)|||||||||
|3．Making up losses by surplus||||||-150,802,080.00|-80,461,415.00|-231,263,495.00|
|reserves.|||||||||
|4. Other|||||||||
|(VI )Special reserves|||||||||
|1. Provided this year|||||||||
|2．Used this term|||||||||
|（VII）Other|||||||||
|IV. Balance at the end of this term|||||||||
|(V) Special reserves||||7,326,948.81|||2,705,081.83|10,032,030.64|
|1. Provided this year||||11,060,486.26|||3,721,068.19|14,781,554.45|
|2．Used this term||||3,733,537.45|||1,015,986.36|4,749,523.81|
|（VI）Other|||||||||
|||139,590,345.|||||||
|IV. Balance at the end of this term|754,010,400.00||-640,401.72|24,603,149.96|621,112,807.78|2,911,921,943.21|364,813,287.98|4,815,411,532.30|
|||09|||||||

Legal Representative:Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao
8.Statement of change inowner’s Equity of the Parent Company
Amount in this period
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Amount in this period|||||||||||
|||Other Equity instrument||||||||||
||||||||Other|||||
|Items||||||Less: Shares|Compre||Common risk||Total of owners’|
||Share Capital|preferred|||Capital reserves|||Surplus reserves||Attributable profit||
||||Sustainable|Other||in stock|hensive||provision||equity|
|||stock|debt||||Income|||||
|I.Balance at the end of last year|754,010,400.00||||138,953,250.09|||10,511,915.73|602,356,402.65|2,390,313,324.89|3,896,145,293.36|
|Add: Change of accounting policy||||||||||||
|Correcting of previous errors||||||||||||
|Other||||||||||||
|II.Balance at the beginning of current||||||||||||
||754,010,400.00||||138,953,250.09|||10,511,915.73|602,356,402.65|2,390,313,324.89|3,896,145,293.36|
|year||||||||||||
|III.Changed in the current year||||||||2,587,073.94||-189,089,235.79|-186,502,161.85|
|（I）Total comprehensive income||||||||||-113,688,195.79|-113,688,195.79|
|(II) Investment or decreasing of capital||||||||||||
|by owners||||||||||||
|1．Ordinary Shares invested by share||||||||||||
|holders||||||||||||
|2．Holders of other equity instrument||||||||||||
|s invested capital||||||||||||
|3.Amount of shares paid and||||||||||||
|accounted as owners’ equity||||||||||||
|4．Other||||||||||||
|（III）Profit allotment||||||||||-75,401,040.00|-75,401,040.00|
|1.Providing of surplus reserves||||||||||||
|2．Allotment to the owners (or||||||||||-75,401,040.00|-75,401,040.00|

||||||||
|-|-|-|-|-|-|-|
|shareholders)|||||||
|3．Other|||||||
|(IV)Internal transferring of owners’|||||||
|equity|||||||
|1. Capitalizing of capital reserves (or|||||||
|to capital shares)|||||||
|2. Capitalizing of surplus reserves (or|||||||
|to capital shares)|||||||
|3．Making up losses by surplus|||||||
|reserves.|||||||
|4. Other|||||||
|(V) Special reserves|||2,587,073.94|||2,587,073.94|
|1. Provided this year|||4,484,209.97|||4,484,209.97|
|2．Used this term|||1,897,136.03|||1,897,136.03|
|（VI）Other|||||||
|IV. Balance at the end of this term|754,010,400.00|138,953,250.09|13,098,989.67|602,356,402.65|2,201,224,089.10|3,709,643,131.51|

 Amount in last year
In RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Amount in last year|||||||||||
|||Other Equity instrument||||Less:|Other|||||
|Items|Share Capital|prefer|||Capital reserves|Shares in|Comprehen|Surplus|Common risk|Attributable|Total of owners’|
|||red|Sustaina|Other|||sive|reserves|provision|profit|equity|
|||||||stock|Income|||||
|||stock|ble debt|||||||||
|I.Balance at the end of last year|754,010,400.00||||138,953,250.09|||7,295,765.20|565,068,272.92|2,205,522,237.31|3,670,849,925.52|
|Add: Change of accounting policy||||||||||||
|Correcting of previous errors||||||||||||
|Other||||||||||||
|II.Balance at the beginning of current year|754,010,400.00||||138,953,250.09|||7,295,765.20|565,068,272.92|2,205,522,237.31|3,670,849,925.52|
|III.Changed in the current year||||||||3,216,150.53|37,288,129.73|184,791,087.58|225,295,367.84|
|（I）Total comprehensive income||||||||||372,881,297.31|372,881,297.31|
|(II) Investment or decreasing of capital by||||||||||||

||||||||
|-|-|-|-|-|-|-|
|owners|||||||
|1．Ordinary Shares invested by shareholders|||||||
|2．Holders of other equity instruments inv|||||||
|ested capital|||||||
|3.Amount of shares paid and accounted as|||||||
|owners’ equity|||||||
|4．Other|||||||
|（III）Profit allotment||||37,288,129.73|-188,090,209.73|-150,802,080.00|
|1.Providing of surplus reserves||||37,288,129.73|-37,288,129.73||
|2．Allotment to the owners (or|||||||
||||||-150,802,080.00|-150,802,080.00|
|shareholders)|||||||
|3．Other|||||||
|(IV)Internal transferring of owners’ equity|||||||
|1. Capitalizing of capital reserves (or to|||||||
|capital shares)|||||||
|2. Capitalizing of surplus reserves (or to|||||||
|capital shares)|||||||
|3．Making up losses by surplus reserves.|||||||
|4. Other|||||||
|(V) Special reserves|||3,216,150.53|||3,216,150.53|
|1. Provided this year|||5,330,910.95|||5,330,910.95|
|2．Used this term|||2,114,760.42|||2,114,760.42|
|（VI）Other|||||||
|IV. Balance at the end of this term|754,010,400.00|138,953,250.09|10,511,915.73|602,356,402.65|2,390,313,324.89|3,896,145,293.36|

 Legal Representative: Zheng Bin Person in charge ofaccounting：Pu Yangshuo Accounting Dept Leader: Zhao Jiamao
III. Company Profile
Hangzhou Steam Turbine Co., Ltd. (the Company) was incorporated as a joint stock limited company exclusively promoted by Hangzhou Steam Turbine& Power Group Company Limited (“HSTG”) approved by the Securities Regulatory Commission of the State Council with the Document SRC[1998] No. 8 by offering domestically listed foreign currency ordinary shares (B Shares), with registration date: April 23, 1998, Registered address: No.357 Shiqiao Road, Hangzhou City, Zhijiang.The number of Business License was changed to 330000400001023 on May 6, 2009. TheCompany’s registered capital is now increased to RMB754.0104 million with total capital share of 754.0104 million shares (face value RMB1.00). Among which state-owned legal person shares were 479.8248 million shares and 274.1856 million shares of current B shares. The shares were issued and listed for trading in Shenzhen Stock Exchange on April 28, 1998.
The scope of main businesses of the Company: The design, manufacturing, and service of steam turbine, gas turbine, other rotating and reciprocate machinery and auxiliary equipment, and spare parts and components. Wholesale, import& export, and service of packaged equipment in electric power supply, industrial driving, and industrial turbine.
These Financial Statements are released upon approval at the 28th meeting of the 6th term of Board held on March 17, 2016. 24 subsidiaries including Zhejiang Steam Turbine Packaged Technologies Co., Ltd., Hangzhou Zhongneng Steam Turbine Power Co., Ltd., Hangzhou Steam Turbine Casting Co., Hangzhou Steam Turbine Auxiliary Co., Ltd., Hangzhou Steam Turbine Machinery& Equipment Co., Ltd., Zhejiang Turbine Import& Export Co., Ltd., and Hangzhou Steam Turbine Industry Co., Ltd., were consolidated to the Financial Statements. For details of changing consolidation range and equity position please go to the Notes to the Financial Statements.
IV. Basis of compiling the finance report
(1) Basis of compiling
The Company adopts perpetual operation as the basis of financial statements.
(II) Assessment on perpetuation
No issue or situation, in 12 months since the end of report period, composes major doubt on the perpetuation assumption of the Company.
V. Principal Accounting Policies and Estimations
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 theCompany’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
TheCompany’s relatively shorter operational period, which is 12 months, and is used as division of liquidity of assets and liabilities.
4. Standard currency for bookkeeping
The Company uses Renminbi (RMB) as the standard currency for book keeping.
5. Accounting treatment of the entities under common control and different control
1. Treatment of entities under common control
Assets and liabilities acquired in merger of entities are measured at book values at the date of merger. The difference between the net book value of asset and the offered price (or total of face value of shares issued) will be adjusted into capital reserves; when the capital reserves is not enough to reduce, it will be adjusted into retained profit.
2. Treatment of entities under different control
The difference of takeover cost over the fair value of recognizable net asset of the acquired entity is recognized as goodwill at the day of takeover; in case the takeover cost is lower than the fair value of recognizable net asset of the acquired entity, the measuring process over the recognizable asset, liabilities, contingent liabilities, and takeover cost, shall be repeated, if comes out the same result, the difference shall be recorded into current income account.
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. 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.
8. Foreign currency trade and translation of foreign currencies
1. Translation of foreign currency
Foreign currency trades are translated into RMB at the rate of the day when the trades are made. Those balances of foreign currencies and monetary items in foreign currencies are accounted at the exchange rate of the balance sheet date. Exchange differences, other than special loans satisfying the conditions of capitalization, are accounted into current income account. Non-monetary items in foreign currencies and on historical cost are translated at the rate of the trade day. Non-monetary items in foreign currencies and on fair value are translated at the rate of the day when the fair value is recognized, where the differences are accounted as gain/loss from change of fair value. 2. Translation of foreign currency financial statements
Asset and liability items in the balance sheet are translated basing on the exchange rate of the balance sheet date;Owners’ equities other than Retained Profit are translated at the exchange rate of the date when the trade happened. Income and expense items in the income statement are translated at the similar rate of the date when the trade happened. Differences generated by the above translating of foreign currencies are demonstrated separately under theowners’ equity in the balance sheet.
9. Financial instruments
1. Type of finance asset and finance debt
Finance assets are divided initially into four types of financial asset appointed to be measured at fair value with their changes are accounted into current gain/loss accounts(including transactional finance asset and financial asset appointed to be measured at fair value with their changes are accounted into current gain/loss accounts), transactional financial assets, debt and account receivable, finance asset saleable.
Finance debts are divided initially into two types of financial debt appointed to be measured at fair value with their changes are accounted into current gain/loss accounts(including transactional finance debt and financial debt appointed to be measured at fair value with their changes are accounted into current gain/loss accounts), other finance debt.
2. Basis of recognition and accounting of finance asset and finance debt
When the Company is one part of the finance instrument contract, one finance asset or debt is recognized. When on recognizing initially finance asset or debt, it is measured by fair value, for the finance asset or debt which appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, the related transaction expenses are directly accounted into current gain and loss; for other finance asset and debt, the related transaction expenses accounted into the initial recognition account.
The Company future measures finance asset by fair value without deducting future possible transaction fee but with exception: (1) Due investment, debt and account receivable are measured by actual interest rate according to
the amortized costs. (2) Equity instrument investment which have no quote in active market and which fair valuecan’t be measured reliably, and its derived finance assets which are connected with the equity instrument and which are summarized through the equity instrument, are measured by cost.
The Company conduct successive measure of finance debt according to amortized cost by actual interest rate with exception as following: (1) finance debt which appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, is measured at fir value without deducting possible future transactional fee at settlement; (2) Equity instrument investment which have no quote in active market and which fair valuecan’t be measured reliably, and its derived finance assets which are connected with the equity instrument and which are closed off through the equity instrument, are measured by cost. (3) finance debt sponsorship contracts which are not appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, or debt agreements at rate lower than market rate and which are not appointed to be measured at fair value with their changes are accounted into current gain/loss accounts, are measured at the higher value between the optimal estimated value payable according to current obligations and the surplus value from which the initial recognition value deduct the accumulated amortized amount according to the actual interest rate.
Gain or loss from fluctuation of financial assets or liabilities are handled at the following ways, except for relating to hedge instrument.
(1) Gain or loss from fluctuation of fair value of financial assets or liabilities and accounted into current gain/loss account, are accounted into gain/loss of fluctuation of fair value. Interests or cash dividend received in the period of holding these assets are recognized as investment gains. When they are disposed, the difference between the amount actually received and initially booked value is recognized as investment gains, and adjust the gain/loss from fair value fluctuation.
(2) Fluctuation of fair value of sellable financial assets accounted into capital reserves; interests gained at actual interest rate are accounting into investment gains; the cash dividend received from sellable instrument investment, are accounted into investment gains when distributed; At disposal of these investment, the difference between actual amount received and book value are recognized as investment gains after deducting of accumulated change of fair value which are originally accounted into capital reserves.
As soon as the contract rights of acquiring the cash flow of particular financial asset have been terminated or almost all of the risks and rewards attached to the financial asset have been transferred, recognition of the financial asset is terminated; as soon as the current liabilities attached to the financial liability have been completely or partially relieved, recognition of the financial liability or part of is terminated.
3. Basis of recognition and accounting of financial asset transferring
The Company stop recognizing the finance asset which risks and remuneration of ownership are transferred to the receiver; and continue to recognize the transferred finance asset which risks and remuneration of ownership are kept, and recognize the value as one finance debt. For the finance assets which risks and remuneration of ownership are not transferred or kept, the Company recognize them as following: (1) stop recognizing the finance asset which are given up the control; (2) continue to recognize the finance asset and related finance debt according to the extend which involved into the transferred finance asset for the finance asset which are not given up control. The Company measured the surplus between the following two values for the transferred finance assets which fulfill the stop recognition requirements into current gain or loss: (1) Account value of the transferred finance asset; (2) Consideration plus the accumulated fair value changes which were accounted directed into ownership rights. For the transferred finance assets which partly fulfill the stop recognition requirements the Company amortized the stopped recognition part and the not-stopped recognition part of the account value of the whole transferred finance asset, and account the surplus between the following two values into current gain or loss: (1) Account value of the stopped recognition part; (2) consideration plus the corresponding stopped recognition part of the accumulated fair value changes which were accounted directed into ownership rights.
4. Basis of recognition and accounting of fair value for the main finance asset and finance debt
For the finance asset or debt which active market exists, the Company recognize the fair value according to the quote on the active market; for the finance asset or debt which active market not exists, the Company recognized the fair value using estimation technology (including reference of the latest market prices from freewill transactions by persons familiar with conditions, reference of the current fair value of other similar finance instrument in characteristics, discounted cash flow models and Option Pricing Model); for the initially acquired or initial finance asset or finance debt, the Company recognize the fair value basis on the market trading price.
4. Recognition of fair value of financial assets and liabilities
The Company utilizes evaluation technologies supported by sufficient data and information to recognize the fair values of financial assets and liabilities. Values inputted to the evaluation technology are divided into following levels and used in sequence:
(1) Level 1 input: unadjusted quotations obtained from an active market of the similar asset or liability at the date of measurement;
(2) Level 2 input: values of the asset or liability observable, directly or indirectly, other than level 1 input, including: quotation of similar asset or liability in an active market; quotation of similar asset or liability in an non-active market; other observable value other than quotations, i.e. observable interest or gain curves in normal intervals of quotations.
(3) Level 3 input: non-observable input value of the asset or liability, including interest rates which are not observable or not testified by observable market data, fluctuation of stock prices, future cash flow of disposal liabilities undertaken from merger of entities, or financial predictions upon data itself.
5. Impairment test and impairment reserves plan
(1) The Company conduct impairment test to the finance asset other than which appointed to be measured at fair value with their changes are accounted into current gain/loss accounts on balance sheet day. Impairment provision is provided as long as evidence showing that impairment has happened to the financial asset.
(2) The Company conduct independently impairment test for single finance asset with large value for single finance asset with little value the Company conduct the impairment test with those of the finance asset composition which have similar credit risk characteristics; for the non impairment assets which are tested independently, the Company conduct the impairment test with those of the finance asset composition which have similar credit risk characteristics.
(3) For the finance asset accounted by amortized cost which have subject impairment evidence at the end term, the impairment loss was recognized according to the difference between the account value and the anticipating future cash flow, for the finance asset which have little difference between its short term account receivable anticipating future cash flow and its current value, the Companydon’t discount the future cash flow when recognizing related impairment loss. When there is impairment loss for the Equity instrument investment which have no quote in active market and which fair valuecan’t be measured reliably and its derived finance assets which are connected with the equity instrument and which are calculated through the equity instrument, are measured by cost, the difference is recognized as impairment loss between the account value of the equity instrument investment and its derived finance asset and the current value discounted by the future cash flow according to the market profit rate of the similar finance asset. The Company recognize the impairment loss for the saleable finance asset which fair value have sharp decreasing and the anticipating decreasing trend is not temporary, and account it into impairment loss together with the accumulated fair vale loss which was accounted intoowner’s equity directly.
When impairment occurred with a sellable financial asset, the accumulated losses caused by decreasing of fair value which have originally been written intoowners’ equity shall be carried over to current gain/loss account. If practical evidence showing that the value of a particular financial asset has recovered in value after a impairment loss has been recognized and practically related to the issues occurred after recognition of the loss, the impairment loss recognized shall be restored and accounted into current gain/loss. Impairment loss of sellable equity investment instrument will be restored toowners’ equity when the fair value has increased afterward.
10. Receivable accounts
1. Recognition and providing of bad debt provision on individual receivable account with large amount
Basis of recognition or standard amount of
Accounts take over10% of the book balance of receivable accounts
individual account with large amount
Impairment test performed individually, bad debt provision will be provided at Basis of bad debt provision
the difference of expected cash flow lower than the book value.
2.Recognition and providing basis of bad debt reserves for group of receivable accounts with similar characteristics of credit risks
|||
|-|-|
|Name of the Group|Basis of bad debt provision|
|Group by age analysis|Age analysis method|

|||
|-|-|
|Combined range of association|Other method|

Bad debt provisions are provided on age analyze basis in the group
||||
|-|-|-|
||Rate of provision on receivable|Rate of provision on other receivable|
|Age|||
||account|account|
|Within 1 year)included)|5.00%|5.00%|
|1－2 years|10.00%|10.00%|
|2－3 years|30.00%|30.00%|
|3－4 years|60.00%|60.00%|
|4－5 years|80.00%|80.00%|
|Over 5 years|100.00%|100.00%|

 Bad debt provisions are provided on percentage basis in the group
□ Applicable√ Not applicable
Bad debt provisions are provided on other basis in the group
□ Applicable√ Not applicable
(3) Receivable accounts with minor amount but bad debt provisions are provided individually
|||
|-|-|
||When there is significant difference between the current value of future cash flow of|
|Basis of providing bad debt individually||
||the receivable account and the current value of future cash flow of the group|
||Impairment test performed individually, bad debt provision will be provided at the|
|Basis of bad debt provision||
||difference of expected cash flow lower than the book value.|

11.Inventories
(1) Inventory classification
Inventories include saleable finished goods or merchandise, product-in-process , consumption material and goods in manufacturing procedure or working procedure.
(2) Pricing of inventory to be delivered
Pricing basis:
Delivered out materials are accounted by weighted average method, issued out finished products are accounted at individual price.
(3) Recognition of realizable net value of inventory and providing of inventory impairment provision
At the balance sheet day, inventories are measured at the lower of costs and cashable net values, the individual difference between the cashable net value and cost are provided as inventory impairment provision. For finished product, merchandise, saleable material and other saleable merchandise inventory, their cashable net values are recognized by their estimated sale price in normal operation deducting estimated sale expenses and related taxes; for material inventory which need processing, it cashable net value are recognized by the estimated sale prices of its finished products in normal operation deducting the estimated cost, sale expenses and related taxes due to the end of processing; At the balance sheet day, for inventory item which part has contract price and part has no contract price, the cashable net value is accounted separately, and recognize the inventory impairment provision or returnable cash..
(4) Inventory system
Inventory system: perpetual inventory system
(5) Amortization of low-value consumables and packaging materials
1.Low price consumable
Basis of amortizing: one-off
2.Packaging materials
Basis of amortizing: one-off
12. Long-term equity investment
1. Recognition of common control and substantial influence
According to the contract, if the investedenterprise’s main finance and operation policy need to be agreed by the other investing party, the investment is common control investment; if only have participating decision rights in investedenterprise’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.12– 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
At disposal of equity shares, the balance between book value and actual consideration received is recorded to current gain/loss account.
When the retained share equity is composing major influence or joint control with other parties on the invested entity, accounting will be on equity basis;
When none of substantial control, joint control, or major influence on the entity, it will be recognized as sellable financial asset and accounted on fair value.
(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 continuous basis since purchasing or merger, is adjusted to capital reserves (capital premium), whereas if the capital premium is not enough to offset the amount, retained profit will be offset at corresponding amount.
At losing of control power over a former subsidiary, the retained equity shares shall be re-calculated according to the fair value at the day of losing power. Sum of the consideration obtained from disposal and fair value of the retained equity shares, less the share of net asset attributable to the Company on continuous 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.
13. 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 of fixed assets
||||||
|-|-|-|-|-|
|||Depreciation age||Annual depreciation|
|Categories|Basis of depreciation||Retain value rate||
|||(year)||ratio|
||Straight average on||||
|Houses & buildings||20-30|4%|4.8%-3.2%|
||period||||
||Straight average on||||
|Equipment & machinery||8-15|4%|12%-6.4%|
||period||||
|Transportation|Straight average on||||
|||4-8|4%|24%-12%|
|equipment|period||||
||Straight average on||||
|Office equipment||5|4%|19.2%|
||period||||

14. 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.
15. 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.
16. 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. Ifcan’t recognize the anticipating implementation method, the straight basis is deployed.
||
|-|
|Items|
|Land using right|
|Other|

(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.
17. Impairment of partial long-term assets
For those long-term assets such as equity investment, fixed assets measured on cost basis, construction-in-process, intangible assets with limited service life, their recoverable amount shall be evaluated as soon as there was evidence indicating impairment at the balance sheet day. For intangible assets such as goodwill from merger or intangible assets with uncertain service lives, impairment test is performed each year whatever there is evidence of impairment or not. Impairment test on goodwill is performed on combination of related assets.
When the result of prediction shows that the recoverable amount is lower than its book value, the balance shall be provided impairment provision and accounted into current gain/loss.
18. Long-term amortizable expenses
Long-term amortizable expenses which have been paid but with amortizing period over 1 year (not included). Long-term amortizable expenses are recorded at actual amount occurred, and straight amortized to stipulated periods. In case a long-term expense was not benefiting the succeeding periods, then the balance of the account shall be transferred over to current income account.
19.Employees’ wage
1.Employees’ wage composes of short-term wages, after-job welfare, dismiss welfare, and other long-term welfares.
2. 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.
3. Accounting of after-job welfare
After-job welfare composes of stipulated saving plan and stipulated beneficiary plan.
(1) In the fiscal period when an employee is providing service, the payable amount calculated by the stipulated
saving plan is recognized as liability and recorded into current gain/loss 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. 4. 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.
5. Accounting of other long-termemployees’ 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. 20. Expected liabilities
(1) When it is very much likely to cause economic interests which can be reliably calculated outflow from the company to fulfill the obligation which is due to giving security outside, contentious matter, quality guarantee of products, onerous contract and other contingency, the company will regard the obligation as anticipation liabilities.
(2) The company will make an initial measurement of anticipation liabilities according to needed expense of best estimation when fulfilling related obligations and check the book value of anticipation liabilities on the balance sheet date.
21.Revenue
1. Recognizing of revenue
(1) Sales of goods
Sales income is recognized when all of these conditions are satisfied: (1) Major risks and rewards attached to the goods have been transferred to the purchaser; (2) The Company holds neither successive management power which is normally attached to ownership, nor effective control, over the goods which have been sold out; (4) Amount of income may be reliably measured; (5) when the costs, occurred or will occur, may be measured reliably.
(2) Providing of services
At balance sheet day, those service trades (simultaneously satisfying the requirements of those: income can be measured reliably, related economic benefit will flow in very possibly, transaction procedure can be confirmed reliably, happened and happening cost can be measured reliably) which can be reliably estimated are recognized at the percentage of completion, and progress of completion of service is decided by the portion of costs occurred over the estimated total costs. At balance sheet day, those service trades which can not be reliably estimated, if the happened services cost will be compensated, the services income are recognized according to happened service cost and transited to service cost according to same amount; if the happened services cost will not be compensated, the happened services cost are accounted into currentterm’s gain or loss and the services income will not be recognized.
(3) Giving of asset using rights
Income from giving of assets is recognized when satisfying requirements: related economic benefit flows in very possibly, income can be measured reliably. Amount of interest income is calculated according to the time and actual interest rate of the monetary capital is used by other party. Income of using fee is calculated upon the charge period and calculation provided by the related contract or agreement.
(4) Construction contracts
1) When the result of the construction contract is able to be evaluated reliably at the balance sheet date, the income and cost of the contract are recognized on completion percentage basis. If the result of the construction contract is not able to be evaluated reliably, but the contract cost may be recovered, the income is recognized at the cost actually recovered, and the cost of the contract is recognized as contract expenses of the current period when it is occurred.
2) When all of the following conditions were satisfied, the result of a fix-amount contract is regarded as can be evaluated reliably: the total income of the contract may be measured reliably, there is great possibility that the financial benefit in relation with the contract will inflow, the actual contract costs may be identified and measured clearly and reliably, the construction progress and the cost to occur are able to be measured reliably. When all of the following conditions are satisfied, the result of a cost-plus-commission contract is regarded as can be evaluated reliably: there is great possibility that the financial benefit in relation with the contract will inflow, the actual costs may be identified and measured clearly and reliably.
3) Contract progress is recognized at the ratio of accumulative actual cost on the predicted complete cost. 4) In case the expected total cost is greater than the total income, the expected loss will be recognized as expense of the current period. If the construction is in process, the balance is accounted as inventory impairment provision; if the contract is not executed, the balance is accounted as expected liability.
2. Practical basis for recognition of revenue
Particular methods for recognition of revenue. The Company is mainly engaged in designing, manufacturing, sales, and service of steam turbines and gas turbines falling in the range of rotating and reciprocating machinery, and parts. Recognition of sales in the country shall satisfy: products had been delivered to the buyer and the amount had been fixed. Payment was received or documents received with great possibility of cash inflow. And the cost of the products is able to be measured appropriately. Recognition of sales outside the country shall satisfy: The goods had been filed by the custom and departed with bill of lading obtained. The amount had been fixed, and payment was received or documents received with great possibility of cash inflow. And the cost of the products is able to be measured appropriately.
22. Government subsidy
1. Recognition basis and accounting of asset-related government subsidy
Government subsidies to the Company for purchasing or acquiring by other means of long-term asset are asset-related government subsidies. They are recognized as deferred income and amortized straightly to their service lives and accounted in current gain/loss. Whereas government subsidy measured by nominal amount are recorded to current gain/loss account.
2. Recognition basis and accounting of income-related government subsidy
Government subsidies other 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.
23. 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 inowners’ equity.
24. Lease
Accounting of operational lease
When the Company is the leasee, the amount is recorded to asset cost or recognized as gain/loss of current period on straight basis to the periods of lease. Initial direct expenses are accounted into current gain/loss. Contingent rentals are recorded to current gain/loss at actual occurrence.
When the Company is the leaser, the amount is recorded to current gain/loss at straight basis to the periods of lease. Initial direct expenses are recorded to current gain/loss other than those with greater amount which are capitalized and recorded to gain/loss of different periods. Contingent rentals are recorded to current gain/loss at actual occurrence.
25.Other important accounting policies and accounting estimates
According to documentCQ〔2012〕No.16 issued by National Department of Finance and National Safety Inspection Bureau General, the Company was categorized as machinery production enterprise. Providing of workplace safety funds are to be provided on monthly basis according to the following schedule:2% provided on the turnover less than RMB10 million;1% on the amount over RMB10 million and less than RMB100 million;0.2% on the amount over RMB100 million and less than RMB1 billion;0.1% on the amount over RMB1 billion and less than RMB5 billion;0.05% on the amount over RMB5 billion.
The above safety expenses are drawn according to national regulations and accounted to costs of related products and recorded to “special reserves” at the same tine. At providing of safety expenses, expense-related costs are deducted from the special reserves. When a safety fund was drawn and composes part of a fixed asset, they are collected under construction-in-process, and recognized to fixed asset when the asset reaches usable status. Meanwhile, the special reserve is deducted by the costs which compose part of the fixed asset, and accumulative depreciation is recognized at the same amount. This fixed asset is not subject to depreciation in successive periods.
26. Change of main accounting policies and estimations
（1）Change of main accounting policies
|||||
|-|-|-|-|
|Content and Reason|Vetting process|Suitable Time|Remark|
|In order to adapt to the change of market||||
|environment, better prevent and control accounts||||
|receivable risks and make Company’s receivable accounts||||
|accord with relevant risks situation and the proportion of||||
||The above changes have been|||
|actual loss. The Company decided to change the||||
||examined and adopted at the 19th|March 26,2015||
|accounting evaluation of provision for bad debts set up on||||
||meeting of the 6th term of Board 2015.|||
|accounts receivable, reduce and raise the percentage it in 3||||
|years and over 3 years respectively and make devaluation||||
|provision for full accounts receivable in line with cautious||||
|and objective principle.||||

1) The use of an aged analysis of bad debts of accounts receivable for the changes in accounting estimates before and aftercomparison：
||||
|-|-|-|
|Aging|Proportion（%）|Proportion of change（%）|
|Within 1 year|5|5|
|1-2 years|20|10|
|2-3 years|40|30|
|3-4 years|60|60|
|4-5 years|60|80|

||||
|-|-|-|
|Over 5 years|60|100|

2) Report items and amounts affected
|||
|-|-|
|Report items subject to significant impact|Amount|
|Balance sheet ites (December 31, 2015)||
|Account receivable|46,087,385.33|
|Other receivable|-744,443.85|
|Undistributed profit|36,582,571.20|
|Profit statement items in 2015||
|Assets impairment loss|-45,342,941.48|
|Income tax expenses|8,760,370.28|

 VI. Taxation
1. Main categories and rates of taxes
||||
|-|-|-|
|Category of taxes|Tax base|Tax rate|
|VAT|Sales of goods or providing of taxable labor service|17%|
|Operational tax|Taxable turnover|5%|
|City maintenance and|||
||Turnover tax payable|7%|
|construction tax|||
|Enterprise income tax|Amount of income taxable|15%、25%|
||For those on price basis, taxes are paid at 1.2% of the balance of original value of||
|House tax|the property after deducting of 30%; for those on rental basis, taxes are paid at 12%|1.2%、12%|
||of the rental.||
|Educational surcharge|Taxable turnover|3%|
|Local education additional|Taxable turnover|2%|

Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
|||
|-|-|
|Name|Income tax rate|
|The company and the subsidiary of Hangzhou Zhongneng Steam Turbine Power Co., Ltd.,||
|Zhejiang Steam Turbine Packaged Technology Development Co., Ltd., Hangzhou Steam||
||15%|
|Turbine Casting Co., Ltd., Zhejiang Huayuan Steam Turbine Machinery Co.,Ltd. and Hangzhou||
|Guoneng Steam Turbine Engineering Co.,Ltd.||
|Other Subsidiary（Domestic）|25%|

(II) Preferential tax
1. According to the document “Notice for Qualification of High-tech Enterprises”(GKHZD〔2015〕No.29) issued by Department of Science and Technology High-tech Development Center, the Company along with Hangzhou Zhongneng Steam Turbine Power Co., Ltd. and Zhejiang Packaged Technologies Development Co., Ltd.– subsidies of the Company, were qualified as high-tech enterprises for term of three years. Therefore they enjoy15% of tax for 2014-2016.
2. According to the documentZKFGD〔2013〕No.294 titled “Notice for Recognition of 491 High-tech
Enterprises” issued jointly by Zhejiang Bureau of Science and Technology, Zhejiang Bureau of Finance, Zhejiang
National Tax Bureau, and Zhenjiang Local Tax Bureau, Hangzhou Steam Turbine Casting Co., Ltd. was
recognized as a High-Tech Enterprise, therefore enjoys15% of income tax rate from 2013 to 2015.
3. According to the document “Notice for Qualification of High-tech Enterprises”(GKHZD〔2015〕No.36) issued by Department of Science and Technology High-tech Development Center, Zhejiang Huayuan Steam Turbine Machinery Co., Ltd. and Hangzhou Guoneng Steam Turbine Engineering Co., Ltd.– subsidies of the Company, were renewed or their qualifications as high-tech enterprises. Therefore they enjoy15% of tax for 2014-2016. 3. Other
Hangzhou Zhongneng Steam Turbine Power (Indonesia) Co., Ltd. registered in Indonesia overseas subsidiaries, the applicable local relevant tax laws and regulations.
VII. Notes to the Consolidated Financial Statements
1. Monetary capital
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Cash in stock|391,106.17|307,654.85|
|Bank deposit|688,833,556.36|562,455,906.65|
|Other monetary fund|62,372,133.71|51,194,502.41|
|Total|751,596,796.24|613,958,063.91|
|Incl:Total of accounts saved overseas|9,182,145.32|9,198,137.90|

 Other statements
Other monetary fund composes of RMB59,872,133.71 of security for bank acceptance notes and
RMB2,500,000.00 of security for bank guarantee letter. Both under limitation of using.
2. Bills receivable
(1) Notes receivable listed by category
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Bank acceptance|637,528,943.49|689,241,938.01|
|Trade acceptance|42,990,000.00|11,868,000.00|
|Total|680,518,943.49|701,109,938.01|

 (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
||||
|-|-|-|
||Amount of recognition termination|Amount of not terminated|
|Items|||
||at the period-end|recognition at the preriod -end|
|Bank acceptance|400,375,131.86||
|Trade acceptance|||
|Total|400,375,131.86||

3. Accounts receivable
(1) Accounts receivable disclosed by category
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|||||||||||
|||Proportio||Proportio|Book value||Proportio||Proportio|Book value|
||Amount||Amount|||Amount||Amount|||
|||n||n|||n||n||
|Receivables with|||||||||||
|major individual|||||||||||
|amount and bad debt|||||||||||
|provision provided|||||||||||
|individually|||||||||||
||2,861,049,700.73|98.97%|Amount|Proportion|2,096,090,157.61|2,969,407,602.57|99.01%|580,487,960.59|19.55%|2,388,919,641.98|
|receivables with|||||||||||
|major individual|||||||||||
|amount and bad debt|||||||||||
|provision provided|||||||||||
|individually|||||||||||
|Accounts receivable|||||||||||
|portfolio subject to|||||||||||
||2,861,049,700.73|98.97%|764,959,543.12|26.74%|2,096,090,157.61|2,969,407,602.57|99.01%|580,487,960.59|19.55%|2,388,919,641.98|
|impairment by credit|||||||||||
|risk|||||||||||
|Account receivable|||||||||||
|of individual not|||||||||||
|significance subject|||||||||||
||29,819,607.69|1.03%|29,819,607.69|100.00%||29,819,607.69|0.99%|29,819,607.69|100.00%||
|to individually|||||||||||
|assessment for|||||||||||
|impairment|||||||||||
|Total|2,890,869,308.42|100.00%|794,779,150.81|27.49%|2,096,090,157.61|2,999,227,210.26|100.00%|610,307,568.28|20.35%|2,388,919,641.98|

 Receivable accounts with large amount individually and bad debt provisions were provided
Not applicable
Account receivable in the portfolio which are provided bad debt provision on age basis
In RMB
|||||
|-|-|-|-|
||End of term|||
|Age||||
||Book balance|Bad debt provision|Providing rate%|
|Subitem within 1 year||||
|Within 1 year|780,946,769.51|39,047,338.50|5.00%|
|Subtotal within 1 year|780,946,769.51|39,047,338.50|5.00%|
|1-2 years|852,535,246.15|85,253,524.61|10.00%|
|2-3 years|615,601,136.27|184,680,340.89|30.00%|
|Over 3 years||||
|3-4 years|310,992,707.13|186,595,624.29|60.00%|
|4-5 years|157,955,634.19|126,364,507.35|80.00%|
|Over 5 years|143,018,207.48|143,018,207.48|100.00%|
|Total|2,861,049,700.73|764,959,543.12||

（2）Accrual period, recovery or reversal of bad debts situation
190,166,947.80
The current amount of provision for bad debts is RMB ; recovery or payback for bad debts Amount is RMB0.00.
Where the current bad debts back or recover significant amounts:
(3) Receivable accounts actually written off in the report period
In RMB
|||
|-|-|
|Items|Amount|
|Difficult to recover|5,695,365.27|

 Of which the significant actual write-off accounts receivable:
In RMB
|||||||
|-|-|-|-|-|-|
||Nature of account|||Verification|Arising from related|
|Name||Amount written off|Reason for write-off|||
||receivables|||procedures|transactions (Y/N)|
|||||The examined and a||
|Zhejiang Jiahua||||||
|Energy Chemical|Goods|1,920,000.00|Difficult to recover|dopted to Board of|No|
|Co., Ltd.||||directors||
|||||The examined and a||
|Oriental Electrical||||||
|Group .Beijing|Goods|1,599,316.10|Difficult to recover|dopted to Board of|No|
|Company||||directors||
|||||The examined and a||
|China Petrochemical||||||
|Group Sichuan|Goods|290,000.00|Difficult to recover|dopted to Board of|No|
|Vigny Lun factory||||directors||
|||||The examined and a||
|Other|Goods|1,886,049.17|Difficult to recover|dopted to Board of|No|
|||||directors||
|Total|--|5,695,365.27||||

Explanation for write-off of account receivables:
The amount of the account receivable actually written off in this period was of RMB
5,695,365.27.
（4）The ending balance of other receivables owed by the imputation of the top five parties
|||||
|-|-|-|-|
|Name|Amount|Proportion(%)|Bad debt provision|
|Client 1|767,883,553.92|26.56|218,791,022.90|
|Client 2|338,964,890.80|11.73|128,687,041.80|
|Client 3|118,867,104.21|4.11|11,886,710.42|
|Client 4|49,710,305.99|1.72|3,657,185.10|

|||||
|-|-|-|-|
|Client 5|40,110,000.00|1.39|4,011,000.00|
|Subtotal|1,315,535,854.92|45.51|367,532,960.22|

4. Prepayments
（1）Age analysis
In RMB
||||||
|-|-|-|-|-|
||Balance in year-end||Balance in year-begin||
|Age|||||
||Amount|Proportion（%）|Amount|Proportion（%）|
|Within 1 year|107,708,874.45|77.34%|145,672,687.02|84.68%|
|1-2 years|25,792,370.60|18.52%|23,007,830.11|13.37%|
|2-3 years|2,763,347.80|1.98%|2,055,629.60|1.20%|
|Over 3 years|3,002,731.80|2.16%|1,286,621.66|0.75%|
|Total|139,267,324.65|--|172,022,768.39|--|

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 colleted according to the prepayment target
||||
|-|-|-|
|Name|Amount|Proportion(%)|
|GOTE BORG ELECTRICAL AND MECHANICALENGINEERING FAR EAST LIMITED|7,553,044.90|5.42|
|Hangzhuo Xuesong Electric Equipment Co., Ltd.|7,120,000.00|5.11|
|Shanghai Jiebiao Energy Technology Co., Ltd.|5,941,642.66|4.27|
|Beijing Jingcheng Zeyu Energy Protection EngineeringTechnology Co., Ltd.|5,370,000.00|3.86|
|Zhongguang International Engineering Co., Ltd.|4,918,271.09|3.53|
|Subtotal|30,902,958.65|22.19|

5. Other account receivable
1) Detailed categories
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||End of term|||||Beginning of term|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|||||||||||
|||Proportio||Proportio|||Providing||Proportio||
||||||Book value|||||Book value|
||Amount||Amount|||Amount||Amount|||
|||n %||n %|||rate %||n %||
|Other Receivables with major|||||||||||
|individual amount and bad debt|||||||||||
|provision provided individually|||||||||||
||3,710,320.94|10.97%|3,710,320.94|100.00%||3,710,320.94|10.92%|3,710,320.94|100.00%||
|receivables with major|||||||||||
|individual amount and bad debt|||||||||||
|provision provided individually|||||||||||
|Other Accounts receivable|||||||||||
|portfolio subject to impairment|30,117,186.12|89.03%|4,543,128.83|15.08%|25,574,057.29|30,275,426.55|89.08%|4,893,203.23|16.16%|25,382,223.32|
|by credit risk|||||||||||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Other Account receivable of|||||||||||
|individual not significance|||||||||||
|subject to individually|||||||||||
|assessment for impairment|||||||||||
|||100.00|||25,574,057.29|||||25,382,223.32|
|Total|33,827,507.06||8,253,449.77|24.40%||33,985,747.49|100.00%|8,603,524.17|25.32%||
|||%|||||||||

Other receivables with individually significant amount and provision for bad and doubtful debts individually provided at the end of the reporting period.
||||||
|-|-|-|-|-|
||End of term||||
|Other account receivable（Other Unit）|||||
||Other receivable account|Bad debt provision|Providing rate%|Reason|
|Shanghai Customs Waigaoqiao Office|3,710,320.94|3,710,320.94|100.00%|Difficult to recover|
|Total|3,710,320.94|3,710,320.94|--|--|

Other receivable accounts in the group on which bad debt provisions are provided on age basis
In RMB
|||||
|-|-|-|-|
||End of term|||
|Age||||
||Other receivable account|Bad debt provision|Providing rate %|
|Subitem within 1 year||||
|Within 1 year|16,866,162.42|843,308.14|5.00%|
|Subtotal within 1 year|16,866,162.42|843,308.14|5.00%|
|1-2 years|6,449,811.70|644,981.17|10.00%|
|2-3 years|4,655,921.60|1,396,776.48|30.00%|
|Over 3 years||||
|3-4 years|910,500.00|546,300.00|60.00%|
|4-5 years|615,136.80|492,109.44|80.00%|
|Over 5 years|4,329,974.54|4,329,974.54|100.00%|
|Total|33,827,507.06|8,253,449.77||

(2)The current amount of provision for bad debts is RMB -64,824.40; recovery or payback for bad debts Amount is RMB 0.00.
(3) The actual write-off other accounts receivable
In RMB
|||
|-|-|
|Items|Amount|
|Difficult to recover|285,250.00|

Of which the significant write-off other accounts receivable:
In RMB
|||||||
|-|-|-|-|-|-|
||||||Whether occurred|
|Name|Nature|Amount|Reason|Process|from the related|
||||||transactions|
|Luoyang Jinlong||||The examined and||
|Electric Power|Deposit|200,000.00|Difficult to recover|approved of board of|No|
|extension command||||directors||
|Total||200,000.00||||

(4) Other accounts receivable classified by the nature of accounts
In RMB
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Deposit|21,439,653.49|23,526,521.57|
|Provisional payment receivable|5,862,759.48|4,720,051.08|
|Petty cash|1,371,901.86|920,428.38|
|Other|5,153,192.23|4,818,746.46|
|Total|33,827,507.06|33,985,747.49|

(5) Top 5 of the closing balance of the other accounts receivable colleted according to the arrears party
In RMB
|||||||
|-|-|-|-|-|-|
|||||Proportion of the total||
||||||Closing balance of|
|Name|Nature|Closing balance|Aging|year end balance of the||
||||||bad debt provision|
|||||accounts receivable(%)||
|||3,710,320.94|Over 5 years|10.97%|3,710,320.94|
|Shanghai Customs Waigaoqiao Office|Deposit in custom|||||
|Investment from Indonesia Company||3,246,800.00|2-3 years|9.60%|974,040.00|
||Investment|||||
|receivable||||||
|Export drawback receivable|Export Rebates|2,581,750.03|Within 1 year|7.63%|129,087.50|
|Guoxin Bidding Group Co.,Ltd.|Bidding deposit|1,659,500.00|0-5 years|4.91%|120,100.00|

|||||||
|-|-|-|-|-|-|
|||1,455,150.0|0 0-4 years|4.30%|365,115.00|
|Guodian Trust Bidding Co., Ltd.|Bidding deposit|||||
|Total|--|12,653,520.9|7 --|37.41%|5,298,663.44|

6. Inventories
(1) Details
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of term|||Beginning of term|||
|Items|||||||
|||Impairment|||Impairment||
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||
|Raw|458,779,130.89||458,779,130.89|461,117,423.30||461,117,423.30|
|materials|||||||
|Product in|564,392,004.76||564,392,004.76|539,174,718.21||539,174,718.21|
|process|||||||
|Products in|856,686,717.61|52,988,014.66|803,698,702.95|593,940,331.76|158,244.58|593,782,087.18|
|stock|||||||
||1,879,857,853.26|52,988,014.66|1,826,869,838.60|1,594,232,473.27|158,244.58|1,594,074,228.69|
|Total|||||||

(2) Inventory depreciation provision
In RMB
||||||||
|-|-|-|-|-|-|-|
||Beginning of|Increased this period||Decreased this period|||
|Items||||||End of term|
||term|Provided|Others|Written back or off|Others||
|Product in||2,198,984.63||2,198,984.63|||
|process|||||||
|Products in|158,244.58|52,829,770.08||||52,988,014.66|
|stock|||||||
||158,244.58|55,028,754.71||2,198,984.63||52,988,014.66|
|Total|||||||

The rotary pin for inventories of the company for the period due to the disposal of suspension units, corresponding to marketing costs and inventory provision have occurred.
7. Other current asset
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Bank financing products [note]|426,000,000.00|378,800,000.00|
|Input tax deductible|1,089,566.15|2,385,481.70|

||||
|-|-|-|
|Prepaid income tax|113,279.98|884,753.86|
|Prepayment of other tax|989.31||
|Total|427,203,835.44|382,070,235.56|

[Note]: Financial products are financial products and trust financial products, are in non-guaranteed floating-income short-term (or short-term redeemable) financial products, and no active market price.
8. Sellable financial asset
(1) Details
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of term|||Beginning of term|||
|Items|||||||
|||Impairment|||Impairment||
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||
|Available-for-sale equity instruments|509,409,741.77||509,409,741.77|498,990,862.94||498,990,862.94|
||509,409,741.77||509,409,741.77|498,990,862.94||498,990,862.94|
|On cost basis|||||||
||509,409,741.77||509,409,741.77|498,990,862.94||498,990,862.94|
|Total|||||||

 (2) Sellable financial assets on cost basis
In RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Book balance|||Impairment provision||||Shareholding||
||Beginning of|Increased this period||Beginning of|Increased this|Decreas|End|proportion|Cash bonus of the|
|Company invested in|term|||term|period|ed this|of|||
|||||||period|term|among the|reporting period|
|||||||||investees||
|Bank of Hangzhou Co.,Ltd.|390,954,040.00||390,954,040.00|||||5.89%|27,742,368.00|
|Greenesol Co.(India)|5,534,773.22||5,534,773.22|||||37.00%||
|Hangzhou Changdi Equity Investment||||||||||
||27,522,049.72|11,593,515.32|39,115,565.04|||||2.97%||
|Partnership(Limited liability)||||||||||
|Hangzhou Steam Turbine Engineering Co.,||||||||||
||30,000,000.00||30,000,000.00|||||15.00%||
|Ltd.||||||||||
|Zhejiang Sanxin Automatic Engineering|600,000.00||600,000.00|||||6.00%||

||||||||
|-|-|-|-|-|-|-|
|Co., Ltd.|||||||
|Zhejiang Zhongkong Solar Energy|||||||
||15,000,000.00|||15,000,000.00|5.27%||
|Technology Co., Ltd.|||||||
|Zhejiang Tianhang Steam Turbine Auxiliary|||||||
||10,000,000.00|||10,000,000.00|33.33%|1,000,000.00|
|Machinery Co., Ltd.|||||||
||||1,174,636.|18,205,363.51|||
|Wuxi Xinchang Steel Tube Co., Ltd.|19,380,000.00||||18.00%||
||||49||||
||||1,174,636.|509,409,741.77|||
|Total|498,990,862.94|11,593,515.32|||--|28,742,368.00|
||||49||||

9. Fixed assets
（1）Details
In RMB
|||||||
|-|-|-|-|-|-|
|||||Office||
|Items|Houses & buildings|Machinery equipment|Transportation equipment||Total|
|||||equipment||
|I.Original value||||||
|1.Opening balance||||||
||426,487,329.57|931,262,735.06|33,152,494.69|96,116,812.56|1,487,019,371.88|
|2.Increased amount of the period||||||
||4,352,583.36|41,443,839.07|1,046,145.39|4,020,784.69|50,863,352.51|
|（1）Outsourcing||||||
|||3,222,341.23|866,427.74|905,975.98|4,994,744.95|
|（2）Inventory, Fixed assets and Construction project||||||
||4,352,583.36|38,221,497.84|179,717.65|3,114,808.71|45,868,607.56|
|into||||||
|（3）Enterprise consolidation||||||

|||||||
|-|-|-|-|-|-|
|3.Decreased amount of the period||2,800,783.43|4,412,665.00|587,651.54|7,801,099.97|
|（1）Disposal||||||
|||2,795,603.43|4,412,665.00|587,651.54|7,795,919.97|
|Other||5,180.00|||5,180.00|
|4.Closing balance|430,839,912.93|969,905,790.70|29,785,975.08|99,549,945.71|1,530,081,624.42|
|II.Accumulated depreciation||||||
|1.Opening balance||||||
||151,139,947.58|560,699,909.96|19,348,619.55|71,014,360.27|802,202,837.36|
|2.Increased amount of the period||||||
||12,389,372.17|62,046,111.40|2,340,792.98|9,052,764.56|85,829,041.11|
|（1）Withdrawal|12,389,372.17|62,046,111.40|2,340,792.98|9,052,764.56|85,829,041.11|
|3.Decreased amount of the period||2,279,459.72|2,784,692.57|1,824,891.76|6,889,044.05|
|（1）Disposal||||||
|||2,279,459.72|2,784,692.57|1,824,891.76|6,889,044.05|
|4.Closing balance|163,529,319.75|620,466,561.64|18,904,719.96|78,242,233.07|881,142,834.42|
|III. Impairment provision||||||
|1.Opening balance||||||
||1,504,928.24|4,074,858.43||1,203,366.99|6,783,153.66|
|2.Increased amount of the period||||||
|（1）Withdrawal||||||
|3.Decreased amount of the period||||||
|（1）Disposal||||||
|4.Closing balance||||||
||1,504,928.24|4,074,858.43||1,203,366.99|6,783,153.66|
|IV. Book value||||||

|||||||
|-|-|-|-|-|-|
|1.Closing book value|265,805,664.94|345,364,370.63|10,881,255.12|20,104,345.65|642,155,636.34|
|2.Opening book|273,842,453.75|366,487,966.67|13,803,875.14|23,899,085.30|678,033,380.86|

 10. Project under construction
（1）Project under construction
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of term|||Beginning of term|||
|Items||Impairment|||||
||Book balance||Book value|Book balance|Impairment provision|Book value|
|||provision|||||
|Construction in process of parent|||||||
||79,982,551.34||79,982,551.34|31,563,732.35||31,563,732.35|
|Company（127 projects）|||||||
|Completed project of parent Company|||||||
|||||35,738,532.24||35,738,532.24|
|（109 projects）|||||||
|Tangxi Workshop PhaseII, Gouneng|||||||
||19,540,353.62||19,540,353.62|13,036,376.35||13,036,376.35|
|Company|||||||
|Project of steam turbine heavy|||||||
||18,177,025.86||18,177,025.86|5,718,626.32||5,718,626.32|
|industry|||||||
|Minor purchasing of equipment by|||||||
|||||1,780,341.88||1,780,341.88|
|subsidiaries|||||||
|Prepayment for equipment or projects|1,487,176.70||1,487,176.70|1,631,650.00||1,631,650.00|
|Total|119,187,107.52||119,187,107.52|89,469,259.14||89,469,259.14|

(2) Changes of significant construction in progress
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||Capitalis|Including：|Capitalis||
|||||||||Progre||||Sourc|
|||Beginning of|Increased this|Transferred into|Other||Proportion(||ation of|Current|ation of||
|Project|Budget RMB x10000|||||End of term||ss of||||e of|
|||term|period|fixed assets|decreases||%)||interest|amount of|interest||
|||||||||work||||funds|
||||||||||accumul|capitalizati|ratio（%)||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||ated|on of||
|||||||||balance|interest||
||||||||Under||||
|Construction in process of||||||||||Othe|
||180,359,400.00|31,563,732.35|48,418,818.99||79,982,551.34|44.35%|Constr||||
|parent Company（127 projects）||||||||||r|
||||||||uction||||
|Completed project of parent|||||||Comp|||Othe|
||42,710,600.00|35,738,532.24|2,441,502.30|38,180,034.54||89.61%|||||
|Company（109 projects）|||||||leted|||r|
||||||||Under||||
|Tangxi Workshop PhaseII,||||||||||Othe|
||30,000,000.00|13,036,376.35|9,743,979.74|3,240,002.47|19,540,353.62|75.93%|Constr||||
|Gouneng Company||||||||||r|
||||||||uction||||
||||||||Under||||
|Project of steam turbine heavy||||||||||Othe|
||1,794,100,000.00|5,718,626.32|12,458,399.54||18,177,025.86|1.01%|Constr||||
|industry||||||||||r|
||||||||uction||||
|Minor purchasing of|||||||Comp|||Othe|
||3,331,551.41|1,780,341.88|1,551,209.53|3,331,551.41||100.00%|||||
|equipment by subsidiaries|||||||leted|||r|
||||||||Under||||
|Prepayment for equipment or||||||||||Othe|
||2,604,195.84|1,631,650.00|972,545.84|1,117,019.14|1,487,176.70||Constr||||
|projects||||||||||r|
||||||||uction||||
|Total|2,053,105,747.25|89,469,259.14|75,586,455.94|45,868,607.56|119,187,107.52|--|--|||--|

11. Intangible assets
（1）Details
In RMB
|||||||
|-|-|-|-|-|-|
|Items|Land using right|Patent|Non-patent right|Software|Total|
|I. Original price||||||
|1.Opening balance|332,298,312.33|200,000.00||260,000.00|332,758,312.33|
|2.Increased amount ofthe||||||
||||8,000,000.00|68,376.07|8,068,376.07|
|period||||||
|(1) Purchase||||||
|||||68,376.07|68,376.07|
|(2)Internal Development||||||
|(3)Increased of Enterprise||||||
|Combination||||||
|Capital invested by stockholder|||8,000,000.00||8,000,000.00|
|3.Decreased amount of the||||||
|period||||||
|（1）Disposal||||||
|4.Closing balance||||||
||332,298,312.33|200,000.00|8,000,000.00|328,376.07|340,826,688.40|
|II.Accumulated amortization||||||
|1.Opening balance|28,456,359.23|58,000.00||143,333.33|28,657,692.56|
|2.Increased amount of the||||||
||6,662,865.37|28,000.00|466,666.67|62,256.62|7,219,788.66|
|period||||||
|(1) Withdrawal||||||
||6,662,865.37|28,000.00|466,666.67|62,256.62|7,219,788.66|
|3.Decreased amount of the||||||
|period||||||
|（1）Disposal||||||
|4.Closing balance||||||
||35,119,224.60|86,000.00|466,666.67|205,589.95|35,877,481.22|
|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|297,179,087.73|114,000.00|7,533,333.33|122,786.12|304,949,207.18|
|2.Opening book value|303,841,953.10|142,000.00||116,666.67|304,100,619.77|

 The intangible assets by the end of the formation of the company's internal R& D accounted for0.00% of the proportion of the balance of intangible assets
12. Long-term amortize expenses
In RMB
|||||||
|-|-|-|-|-|-|
||||Amortized expenses|||
|Items|Balance in|Increase in this||Other loss|Balance in year-end|
||year-begin|period||||
|Redecoration|1,041,796.52|1,050,172.00|310,672.72||1,781,295.80|
|Afforestation fees||372,263.00|124,087.00||248,176.00|
|Total|1,041,796.52|1,422,435.00|434,759.72||2,029,471.80|

 13. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets had not been off-set
In RMB
||||||
|-|-|-|-|-|
||Balance in year-end||Balance in year-begin||
||Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
|Items|||||
||difference|assets|difference|assets|
|Provision for Asset|862,665,829.01||||
|||134,087,883.30|625,774,885.64|97,116,519.78|
|Impairment|||||
|Internal trade profit not|51,540,875.71|7,731,131.35|31,366,833.60|4,784,324.37|
|realized|||||
|Deductible loss|109,318,315.61|16,427,657.71|0.00|0.00|
|Temporary difference|||||
|such as amortizing of|4,521,435.59|678,215.34|6,567,225.16|985,083.78|
|software expense|||||
|Total|1,028,046,455.92|158,924,887.70|663,708,944.40|102,885,927.93|

 (2) Deferred income tax liabilities had not been off-set
In RMB
||||||
|-|-|-|-|-|
||Balance in year-end||Balance in year-begin||
||Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
|Items|||||
||difference|liabilities|difference|liabilities|
|Accumulated|6,783,153.66|1,017,473.05|6,783,153.66|1,017,473.05|
|depreciation:|||||

||||||
|-|-|-|-|-|
|Total|6,783,153.66|1,017,473.05|6,783,153.66|1,017,473.05|

（3）Details of the un-recognized deferred income tax assets
In RMB
||||
|-|-|-|
|Items|Balance in year-end|Balance in year-begin|
||137,939.89|77,605.05|
|Deductible provisional differences|||
||5,606,704.52|2,086,222.26|
|Recoverable losses|||
|Sub-total|5,744,644.41|2,163,827.31|

（4）Deductible losses of the un-recognized deferred income tax asset will expire in the following years
In RMB
|||||
|-|-|-|-|
|Year|Balance in year-end|Balance in year-begin|Remark|
|2017||873,013.84||
|2018|1,088,275.32|744,962.67||
|2019|903,272.74|468,245.75||
|2020|3,615,156.46|||
|Total|5,606,704.52|2,086,222.26|--|

14.Short-term loans
（1）Category of short-term loans
In RMB
||||
|-|-|-|
|Items|Balance in year-end|Balance in year-begin|
|Loan by pledge|10,000,000.00|10,000,000.00|
|Mortgage loan|75,350,000.00|88,600,000.00|
|Guarantee loan||100,000,000.00|
|Total|85,350,000.00|198,600,000.00|

 15. Notes payable
In RMB
||||
|-|-|-|
|Category|Balance in year-end|Balance in year-begin|
|Bank acceptance|194,226,049.73|150,763,452.14|
|Total|194,226,049.73|150,763,452.14|

 The amount payable at the end of this term is RMB 0.00.
16. Account payable
（1）List of Account payable
In RMB
||||
|-|-|-|
|Items|Balance in year-end|Balance in year-begin|

||||
|-|-|-|
|Goods|796,106,637.10|689,452,672.67|
|Payment for equipment and projects|14,313,744.35|73,633,046.25|
|Total|810,420,381.45|763,085,718.92|

 17. Advance from customers
(1) List of advance from customers
In RMB
||||
|-|-|-|
|Items|Balance in year-end|Balance in year-begin|
|Goods|1,736,820,949.19|1,374,736,209.67|
|Total|1,736,820,949.19|1,374,736,209.67|

 18. Payable Employee wage
（1）Payable Employee wage
In RMB
||||||
|-|-|-|-|-|
|Items|Year-beginning balance|Increase in the current|Decrease in the current||
|||||Year-end balance|
|||period|period||
|I. Short-term|||||
||43,878,015.68|593,701,438.73|590,935,963.73|46,643,490.68|
|compensation|||||
|II.Post-employment bene|||||
|fits - defined contribution|21,794,690.41|72,391,638.02|70,572,344.65|23,613,983.78|
|plans|||||
|Total|65,672,706.09|666,093,076.75|661,508,308.38|70,257,474.46|

（2）Short-term compensation
In RMB
||||||
|-|-|-|-|-|
|Items|Year-beginning|Increase in the|Decrease in the||
|||||Year-end balance|
||balance|current period|current period||
|1.Wages, bonuses, allowances|28,767,519.81|443,703,113.87|437,798,876.14|34,671,757.54|
|and subsidies|||||
|2.Employee welfare||45,687,602.76|45,687,602.76||
|3. Social insurance premiums|7,648,459.07|42,249,920.56|44,512,706.69|5,385,672.94|
|Inlduding ：Medical insurance|7,056,425.63|35,725,121.71|38,034,663.13|4,746,884.21|
|Work injury insurance|194,756.44|2,233,265.14|2,208,986.39|219,035.19|
|Maternity insurance|397,277.00|4,291,533.71|4,269,057.17|419,753.54|
|4.Public reserves for housing|220,900.96|50,275,861.00|50,385,867.00|110,894.96|
|5.Union funds and staff education|6,606,703.84|11,784,940.54|11,916,479.14|6,475,165.24|
|fee|||||
|7.Short-term profit sharing|634,432.00||634,432.00||

||||||
|-|-|-|-|-|
|scheme|||||
|Total|43,878,015.68|593,701,438.73|590,935,963.73|46,643,490.68|

 (3) Details of fixed provision scheme
In RMB
||||||
|-|-|-|-|-|
|Items|Balance in year-begin|Increase in this period|Payable in this period|Balance in year-end|
|1. Basic old-age|4,681,929.48|48,045,727.87|47,760,587.35|4,967,070.00|
|insurance premiums|||||
|2.Unemployment|664,347.08|5,439,117.17|5,571,348.34|532,115.91|
|insurance|||||
|3.Enterprise annuity|16,448,413.85|18,906,792.98|17,240,408.96|18,114,797.87|
|payment|||||
|Total|21,794,690.41|72,391,638.02|70,572,344.65|23,613,983.78|

 19. Tax Payable
In RMB
||||
|-|-|-|
|Items|Balance in year-end|Balance in year-begin|
|VAT|14,415,685.85|64,272,374.25|
|Business Tax|26,734.00|5,570.00|
|Enterprise Income tax|||
||13,503,170.56|48,371,910.29|
|Individual Income tax|2,576,708.03|2,395,496.64|
|City Construction tax|1,039,687.83|4,901,454.49|
|Property tax|39,647.76|1,944.00|
|Education subjoin|453,914.47|2,113,092.00|
|Locality Education subjoin|303,713.60|1,398,939.85|
|Stamp tax|19,236.84|43,704.27|
|Local water source foundation|2,382,364.75|2,584,778.06|
|Land use tax|1,245,105.20||
|Disabled security fund|2,140.20||
|Price adjustment foundation||1,996.88|
|Total|36,008,109.09|126,091,260.73|

 20. Other account payable
(1) Other accounts payable listed by nature of the account
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
||1,462,038.45|2,424,372.25|
|Deposit|||

||||
|-|-|-|
||22,729,311.10|26,127,465.27|
|Provisional account payable|||
||5,513,775.96|1,046,051.60|
|Others|||
|Total|29,705,125.51|29,597,889.12|

 21. Non-current liabilities due within 1 year
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Long-term loans due within 1 year|300,000.00||
|Total|300,000.00||

Other explanation：
22. Long-term loan
(1) Category of long-term loan
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Mortgage loan|23,400,000.00|18,500,000.00|
|Guaranteed loans|100,000,000.00||
|Total|123,400,000.00|18,500,000.00|

 23.Long term payroll payable
（1）List of long term payroll payable
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Drawing in administrative restructuring|330,000.00|330,000.00|

 23. Deferred income
(1) Details
In RMB
|||||||
|-|-|-|-|-|-|
|Items||Increased this|Decreased this|||
||Beginning of term|||End of term|Cause|
|||period|period|||
|Government subsidy|8,252,705.00||1,448,280.00|6,804,425.00|Government subsidy|
|Total|8,252,705.00||1,448,280.00|6,804,425.00|--|

(2) Details of government subsidies
In RMB
||||||||
|-|-|-|-|-|-|-|
|||New subsidy|Amount transferred||||
|||||Other||Asset-related or|
|Items|Beginning of term|in current|to non-operational||End of term||
|||||changes||income-related|
|||period|income||||
|Government subsidy for|5,901,165.00||997,380.00||4,903,785.00|Asset-related|
|casting project|||||||
|Subsidy for industrial|800,000.00||160,000.00||640,000.00|Asset-related|

||||||
|-|-|-|-|-|
|upgrading by provincial|||||
|government|||||
|Government subsidy for||||Asset-related|
|industrial entities from|||||
|Yuhang District|534,650.00|106,930.00|427,720.00||
|Government in the 2nd|||||
|half of 2009|||||
|Government finance for||||Asset-related|
|industrial project in the|345,360.00|28,780.00|316,580.00||
|2nd half of 2006|||||
|Finance for casting||||Asset-related|
||345,360.00|28,780.00|316,580.00||
|project|||||
|Government subsidy for||||Asset-related|
||136,920.00|11,410.00|125,510.00||
|recycling economy|||||
|10K ton casting line||||Asset-related|
||78,000.00|26,000.00|52,000.00||
|enlarging project|||||
|Government fund for||||Asset-related|
|advanced manufacturing|111,250.00|89,000.00|22,250.00||
|enterprise|||||
|Total|8,252,705.00|1,448,280.00|6,804,425.00|--|

 25. Stock capital
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Increase/decrease this time (+ , - )||||||
||Balance Year-beginning|||Transferred|||Balance year-end|
|||Issuing of||||||
||||Bonus shares|from|Other|Subtotal||
|||new share||||||
|||||reserves||||
|Total of capital|754,010,400.00||||||754,010,400.00|
|shares||||||||

26. Capital reserves
In RMB
||||||
|-|-|-|-|-|
|Items|Year-beginning balance|Increase in the|Decrease in the current|Year-end balance|
|||current period|period||
|Share premium|81,815,220.00|||81,815,220.00|
|Other capital reserves|57,775,125.09|||57,775,125.09|
|Total|139,590,345.09|||139,590,345.09|

27. Other comprehensive income
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Occurred current term||||||
||||Less: accounted|||||
|||Amount||Less:||||
|Items|Beginning of|occurred|as other gains|Income|Attributable tothe parent co.after tax|Attributable to|End of term|
||term||previously but|||minority||
|||before income||tax||||
||||transferred to|||shareholders||
|||tax of the||expense||||
||||gain/loss this|||after tax||
|||period||s||||
||||period|||||
|II.|||||-212,350.28|||
|Later reclassified into profit an||||||||
||-640,401.72|-498,713.66||||-286,363.38|-852,752.00|
|d loss of other comprehensive i||||||||
|ncome||||||||
|Difference of translating of|||||-212,350.28|||
||-640,401.72|-498,713.66||||-286,363.38|-852,752.00|
|foreign currency accounts||||||||
|Total of other comprehensive|-640,401.72||||-212,350.28|-286,363.38|-852,752.00|
|||-498,713.66||||||
|income||||||||

28. Surplus reserve
In RMB
||||||
|-|-|-|-|-|
|Items|Year-beginning balance|Increase in the current|Decrease in the current|Year-end balance|
|||period|period||
||24,603,149.96|10,038,758.63|2,876,988.08|31,764,920.51|
|Labor safety expenses|||||
||24,603,149.96|10,038,758.63|2,876,988.08|31,764,920.51|
|Total|||||

 Other notes, including changes and reason ofchange:：
(2) According to the “Notice for Provision of Labor Safety Fund”(.〔2012〕CQ No 16) issued by the Department of Finance and Safety Inspection Bureau General on February 14, 2012, the labor safety fund provided this period was RMB10,038,758.63, and RMB2,876,988.08was used.
29. Surplus reserves
In RMB
||||||
|-|-|-|-|-|
|Items|Beginning of term|Increased this period|Decreased this period|End of term|
|Statutory surplus|621,112,807.78|||621,112,807.78|
|reserves|||||
||621,112,807.78|||621,112,807.78|
|Total|||||

 Statement on surplus reserves. Please state the related resolutions of the Board on capitalizing of reserves, making up losses, anddividends：
30. Retained profits
In RMB
||||
|-|-|-|
|Items|Amount of this period|Amount of last period|
|Adjustment on retained profit at end of previous|2,911,921,943.21|2,736,802,630.30|

||||
|-|-|-|
|term|||
|Amount of retained profit at beginning of period|||
|||11,132,170.41|
|adjusted (+,-)|||
|Retained profit at beginning of term after|2,911,921,943.21||
|||2,747,934,800.71|
|adjustment|||
|Plus: Net profit attributable to owners of the|||
||-162,809,311.79|352,077,352.23|
|parent company|||
|Less: Statutory surplus reserves||37,288,129.73|
|Common share dividend payable|75,401,040.00|150,802,080.00|
|Retained profit at the end of term|2,673,711,591.42|2,911,921,943.21|

 As regards the details of adjusted the beginning undistributed profits
(1)As the retroactive adjustment on Enterprise Accounting Standards and its related new regulations, the affected beginning undistributed profits are RMB 0.00.
(2) As the change of the accounting policy, the affected beginning undistributed profits are RMB 0.00.
(3) As the correction of significant accounting error, the affected beginning undistributed profits are RMB 0.00 . (4) As the change of consolidation scope caused by the same control, the affected beginning undistributed profits are RMB 0.00.
(5) Other adjustment of the total affected beginning undistributed profits are RMB 0.00 .
31.Operation income and operation cost
In RMB
||||||
|-|-|-|-|-|
||Amount of this period||Amount of last period||
|Items|||||
||Income|Cost|Income|Cost|
|Main|||||
||2,590,940,234.32|1,801,566,917.72|3,712,245,023.30|2,356,223,787.76|
|operation|||||
|Other|||||
||9,131,917.31|4,374,605.05|10,086,896.83|6,901,864.74|
|operation|||||
|Total|2,600,072,151.63|1,805,941,522.77|3,722,331,920.13|2,363,125,652.50|

 32. Business tax and subjoin
In RMB
||||
|-|-|-|
|Items|Amount of this period|Amount of last period|
|usiness tax|168,455.47|395,605.17|
|rban construction tax|6,811,793.17|17,274,570.78|
|Education surcharge|3,020,314.16|7,506,915.80|
|Locality Education surcharge|2,013,702.28|5,004,408.18|
|Total|12,014,265.08|30,181,499.93|

33. Sales expense
In RMB
||||
|-|-|-|
|Items|Amount of this period|Amount of last period|
|Employees’ remunerations|55,578,994.47|59,145,939.95|
||46,831,719.53|36,715,265.29|
|Transportation|||
||21,738,647.26|23,629,326.46|
|Business trips|||
||6,581,264.62|7,147,501.90|
|Business reception expenses|||
||3,090,197.44|4,657,261.07|
|Conferences|||
||12,052,251.77|12,069,902.23|
|Consulting service fee|||
||513,268.74|808,458.03|
|Insurance for turbine unit|||
||3,092,751.43|7,713,784.14|
|Warranty expense|||
||1,262,003.93|887,305.80|
|Product exhibition|||
||887,755.72|476,111.80|
|Office expenses|||
||5,073,951.70|5,340,042.77|
|Others|||
||156,702,806.61|158,590,899.44|
|Total|||

 34. Administrative expense
In RMB
||||
|-|-|-|
|Items|Amount of this period|Amount of last period|
||310,949,457.62|315,672,788.11|
|Employees’remunerations|||
||179,039,951.91|160,360,992.99|
|R&D|||
||21,438,092.85|19,576,145.22|
|Asset depreciation and amortizing|||
||14,480,442.18|15,642,585.41|
|Business reception expenses|||
|House rental, property management, water|14,901,746.04|18,319,231.84|
|and power|||
||7,094,343.92|6,262,888.00|
|Traveling fees|||
||9,623,889.66|8,356,544.03|
|Tax|||
||4,181,569.01|4,192,567.96|
|Material, low-value-consumable|||
||4,877,897.81|3,790,444.45|
|Office expenses|||
||2,811,447.33|4,167,891.59|
|Maintaining|||
||38,822,291.15|35,776,504.63|
|Others|||
||608,221,129.48|592,118,584.23|
|Total|||

 35.Financial expenses
In RMB
||||
|-|-|-|
|Items|Amount of this period|Amount of last period|
||11,853,040.55|16,566,219.27|
|Interest expense|||
||7,263,343.36|8,389,049.84|
|Less: Incoming interests|||
||-14,356,533.14|5,179,576.54|
|Exchange gains/losses|||

||||
|-|-|-|
||2,203,086.50|1,899,044.02|
|Commission|||
||-7,563,749.45|15,255,789.99|
|Total|||

 36.
Asset impairment loss
In RMB
||||
|-|-|-|
|Items|Amount of this period|Amount of last period|
|Bad debt losses|190,102,123.40|121,146,387.69|
|Fixed assets impairment losses|55,028,754.71||
|Total|245,130,878.11|121,146,387.69|

 37. Investment income
In RMB
||||
|-|-|-|
|Items|Amount of this period|Amount of last period|
|Investment gains from holding of sellable|28,742,368.00|24,118,640.00|
|financial assets|||
|Gains from financing products|19,624,429.30|20,631,255.58|
|Total|48,366,797.30|44,749,895.58|

 38. Non-operational income
In RMB
|||||
|-|-|-|-|
||||Amount accounted into|
|Items|Current term|Same period of last term|non-recurring gain/loss of|
||||current term|
|Total of gains from disposal of|||55,683.00|
|non-current assets||||
|Incl. Gains from disposal of fixed|55,683.00|510,865.15|55,683.00|
|assets||||
||15,752,977.27|12,268,275.22|15,752,977.27|
|Government subsidy||||
||11,181,491.50|10,791,741.62|11,181,491.50|
|Compensation income||||
||1,462,564.00|404,380.80|1,462,564.00|
|Payment not to be paid||||
||573,061.37|97,853.99|573,061.37|
|Others||||
|Total|29,025,777.14|24,073,116.78|29,025,777.14|

 Government subsidy reckoned into current gains/losses
In RMB
|||||||
|-|-|-|-|-|-|
||Whether the||||Asset-related or|
||||||income-related|
||impact of|Whether||||
||||Amount of this|Amount of last||
|Subsidy items|subsidies on the|special||||
||||period|period||
||current profit|subsidies||||
||and loss|||||
|Transferred from deferred income|No|No|1,448,280.00||Asset-related|
|Coal chemical industry, iron and steel industry COGEN||||||
||No|No|5,060,000.00||Income related|
|50MW steam turbine series development level||||||
|Enterprise Funding by Hangzhou Economy &|No|No|1,330,900.00||Income related|

|||||||
|-|-|-|-|-|-|
|Technology Development Zone Finance office||||||
|Refunding of property tax|No|No|1,253,825.27||Income related|
|Award for Enterprise R&D Investment 2011|No|No|971,000.00||Income related|
|Land use tax return|No|No|868,205.00||Income related|
|Water fund return|No|No|786,093.91|||
|Science and technology overall plan fund robot project|No|No|635,000.00||Income related|
|Financial support fund|No|No|635,000.00||Income related|
|2015 FINANCIAL Subsidy|No|No|500,000.00||Income related|
|Hangzhou Industrial and fiscal 2015 financial||||||
||No|No|500,000.00||Income related|
|information development funding||||||
|2015 Quality and Technical Supervision grant funds|No|No|300,000.00||Income related|
|Yuhang District 2013 annual enterprise training the first||||||
||No|No|287,700.00||Income related|
|batch of financial support fund||||||
|Quality award financial incentives|No|No|200,000.00||Income related|
|2013 second batch of quality and technical supervision||||||
||No|No|120,000.00||Income related|
|grants||||||
|Stable employment social securitysubsidies|No|No|116,589.42||Income related|
|Hangzhou Xiacheng District financial subsidies granted||||||
||No|No|100,000.00||Income related|
|for safety production financial subsidies||||||
|Production safety standards of financial reward fund|No|No|100,000.00||Income related|
|2014 The first safety standardization standards||||||
||No|No|100,000.00||Income related|
|(re-evaluation) enterprise financial assistance||||||
|Other small amount subsidies|No|No|440,383.67||Income related|
|Deferred revenue transfer|No|No||1,448,280.00|Asset-related|
|Exemption of local water preservation found 2013|No|No||3,536,744.90|Income related|
|Subsidies to Major Innovative Projects from Hangzhou||||||
||No|No||1,122,000.00|Income related|
|Industrial Fund 2013||||||
|Award for Technical Innovative Enterprise 2013|No|No||1,115,000.00|Income related|
|Government subsidy for 1st production of special|No|No||1,000,000.00|Income related|
|equipment manufacturing of strategic new industry||||||
|Subsidy for industrializing of technologies, Hangzhou|No|No||800,000.00|Income related|
|Economy and Technology Development Zone||||||
|Subsidy for enterprise R&D 2012|No|No||630,000.00|Income related|
|Award for technical standard 2013|No|No||540,000.00|Income related|
|Subsidy for innovative industrial projects 2013 of|No|No||500,000.00|Income related|
|Hangzhou||||||
|Property tax exemption 2013|No|No||358,486.06|Income related|
|Subsidy for R&D from Hangzhou Economy &|No|No||206,400.00|Income related|
|Technology Development Zone 2012||||||
|Exemption of Land-using Tax 2013|No|No||117,059.68|Income related|
|Award for the Enterprise of Year 2013|No|No||110,000.00|Income related|
|Special fund for international trading 2013 from||||||
||No|No||100,000.00|Income related|
|Zhejiang Provincial Government||||||
|Award for Technical Projects|No|No||100,000.00|Income related|

|||||||
|-|-|-|-|-|-|
|Other small amount subsidies|No|No||584,304.58|Income related|
|Total|--|--|15,752,977.27|12,268,275.22|--|

 39. Non-operational expenditure
In RMB
|||||
|-|-|-|-|
|||Same period of last|Amount accounted into non-recurring|
|Items|Current term|||
|||term|gain/loss of current term|
|Total of loss from disposal of|497,599.66|427,820.27|497,599.66|
|non-current assets||||
||497,599.66|427,820.27|497,599.66|
|Incl. Loss from disposal of fixed assets||||
||370,000.00|610,000.00|370,000.00|
|Donations||||
||506,973.23|1,495,921.10|506,973.23|
|Penalty paid out||||
|Local water source foundation|3,656,045.61|5,084,356.89|138,304.32|
||37,457.69|317,968.45|37,457.69|
|Penalties||||
||138,304.32|1,468,231.45|172,239.32|
|Others||||
|Total|5,206,380.51|9,404,298.16|1,550,334.90|

 40. Income tax expenses
(1) Details
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
|Income tax of current term|31,881,180.92|89,793,577.50|
|Deferred income tax|-56,038,959.77|-12,408,476.79|
|Total|-24,157,778.85|77,385,100.71|

 (2) Adjustment process of accounting profit and income tax expenses
In RMB
|||
|-|-|
|Items|Current term|
|Total profit|-148,188,507.04|
|Income tax expenses calculated on legal / applicable tax rate|-22,228,276.06|
|Impact of different tax rates of subsidiaries|3,160,197.56|
|Impact of income tax adjustment in previous periods|1,235,288.54|
|Impact of non-taxable income|-4,411,355.20|
|Impact of un-deductible costs, expenses or losses|2,978,439.52|
|Change on open balance of deferred income tax asset by change of tax rate|-116,838.71|
|Impact of provisional differences by using unrecognized deferred income tax||
||895,204.27|
|asset of previous period||
|Impact of extra deduction of R&D expenses|-5,665,533.49|
|Impact of deductible temporary difference of un-recognized deferred income||
||-4,905.28|
|tax asset of current period||
|Income tax expenses|-24,157,778.85|

41. Other Comprehensive income
Please find the statement in the notes of consolidated balance sheet.
42. Notes Cash flow statement
(1) Other cash received from business operation
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Deposit interest|7,263,343.36|8,389,049.84|
|Government subsidies received|11,396,573.09|10,849,995.22|
|Deposit for bidding and other|9,164,486.54|3,669,590.00|
|Compensation income|204,038.50|1,594,307.63|
|Other|2,365,618.08|97,136.21|
|Total|30,394,059.57|24,600,078.90|

 2. Other cash paid for business activities
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Travel expenses|48,696,007.83|38,445,727.11|
|Transportation|27,665,861.80|28,646,346.08|
|Business trips|21,637,189.33|22,417,855.72|
|Maintaining|2,824,225.05|4,191,987.22|
|Property management and civil services|15,113,839.76|25,466,837.10|
|Deposit for bidding and others|1,086,259.96|7,277,860.47|
|Office expenses|5,767,669.91|6,754,541.50|
|Conferences|3,308,152.54|4,473,984.77|
|Consulting service fee|12,970,940.60|12,316,585.78|
|Transportation and vehicles|7,467,278.69|6,970,905.17|
|Other|35,568,063.63|29,188,046.33|
|Total|182,105,489.10|186,150,677.25|

 3. Other investment-related cash received
In RMB
||||
|-|-|-|
|Items|Occurred current term|Occurred in previous term|
|Repurchasing of trusteeship|1,744,905,999.95|1,810,600,000.00|
|Principal and interest of loans retrieved|||
|||2,594,104.88|
|from Hangzhou Hengsheng Thermal Power|||
|Equipment Co., Ltd.|||
||1,744,905,999.95|1,813,194,104.88|
|Total|||

 4. Other cash paid for investment activities
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
||1,792,105,999.95|1,871,400,000.00|
|Purchasing of financial products|||
||1,792,105,999.95|1,871,400,000.00|
|Total|||

5. Other financing-related cash received
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
|||300,000,000.00|
|Financing notes received from HSTG|||
|||300,000,000.00|
|Total|||

 6. Other cash paid for financing activities
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
|||300,000,000.00|
|Repayment of financing notes to HSTG|||
|||300,000,000.00|
|Total|||

 43. Supplementary data of cash flow statement
(1) Supplementary data of cash flow statement
In RMB
In RMB
||||
|-|-|-|
|||Amount of the Previous|
|Supplementary Info.|Amount of the Current Term||
|||Term|
|I. Adjusting net profit to cash flow from operating activities|||
||--|--|
|Net profit|-124,030,728.19|423,946,719.84|
|Add: Impairment loss provision of assets|||
||245,130,878.11|121,146,387.69|
|Depreciation of fixed assets, oil and gas assets and consumable|||
||85,829,041.11|82,042,922.86|
|biological assets|||
|Amortization of intangible assets|||
||7,219,788.66|6,742,865.49|
|Amortization of Long-term deferred expenses|||
||434,759.72|264,386.48|
|Loss on disposal of fixed assets, intangible assets and other|||
||435,942.14|-83,044.88|
|long-term deferred assets|||
|Loss on scrap of fixed assets|5,974.52||
|Financial cost|||
||5,284,099.92|16,322,020.76|
|Loss on investment|||
||-48,366,797.30|-44,749,895.58|
|Decrease of deferred income tax assets|||
||-56,038,959.77|-12,408,476.79|
|Decrease of inventories|-287,824,364.62|-71,411,960.25|
|Decease of operating receivables|||
||135,158,915.99|-98,723,280.79|
|Increased of operating Payable|||
||382,311,670.05|-149,391,703.55|
|Other|10,127,552.71|10,032,030.64|
|Net cash flows arising from operating activities|355,677,773.05|283,728,971.92|

||||
|-|-|-|
|II. Significant investment and financing activities that without cash|||
||--|--|
|flows:|||
|3．Movement of cash and cash equivalents：|--|--|
|Ending balance of cash|||
||689,224,662.53|562,763,561.50|
|Less: Beginning balance of cash equivalents|562,763,561.50|810,928,644.47|
|Net increase of cash and cash equivalents|126,461,101.03|-248,165,082.97|

（2）Composition of cash and cash equivalents
In RMB
||||
|-|-|-|
|Items|End of term|Beginning of term|
||689,224,662.53|562,763,561.50|
|1) Cash|||
||391,106.17|307,654.85|
|Incl: Cash in stock|||
|Bank savings could be used at any time|688,833,556.36|562,455,906.65|
|3) Balance of cash and cash equivalents at end of|689,224,662.53|562,763,561.50|
|term|||

(3) Monetary capital not categorized as cash or cash equivalents
||||
|-|-|-|
|Items|End of term|Beginning of term|
|Security deposit not attributable as cash or cash equivalent|62,372,133.71|51,194,502.41|
|Sub-total|62,372,133.71|51,194,502.41|

44.
Assets with limitation on ownership or using rights
In RMB
||||
|-|-|-|
|Items|Closing book value|Causation of limitation|
|||Used as security for issuing of acceptance|
|Monetary capital|62,372,133.71||
|||drafts and bill of guarantees|
|Fixed assets|126,746,585.06|Securities for loans|
|Intangible assets|20,781,028.64|Securities for loans|
|Total|209,899,747.41|--|

45.
Monetary items in foreign currencies
(1) Details
In RMB
|||||
|-|-|-|-|
|Items|Balance at end of period|Exchange rate|Translated to RMB at end of|
||||period|
|Monetary capital|--|--|119,133,836.90|
|Incl. USD|16,745,776.61|6.4936|108,740,375.00|
|EURO|1,167,219.44|7.0952|8,281,655.37|
|HKD|5.51|0.8378|4.62|

|||||
|-|-|-|-|
|JPY|3,531.00|0.0539|190.22|
|Indonesia Rubi|4,505,170,987.00|0.000469|2,110,878.30|
|SWF|114.56|6.4018|733.39|
|Account receivable|--|--|167,308,082.78|
|Incl：USD|24,131,152.87|6.4936|156,698,054.27|
|Euro|1,334,724.51|7.0952|9,470,137.34|
|Indonesia Rubi|1,965,545,080.00|0.000469|920,947.60|
|SGD|47,726.12|4.5875|218,943.57|
|Account payable|||9,835,665.12|
|Incl：USD|1,395,108.56|6.4936|9,059,276.95|
|Euro|4,150.86|7.0952|29,451.18|
|Indonesia Rubi|1,594,160,546.00|0.000469|746,936.99|
|Other receivable|||3,246,800.00|
|Incl：USD|500,000.00|6.4936|3,246,800.00|
|Other payable|||253,156.40|
|Indl：Indonesia Rubi|540,302,517.00|0.000469|253,156.40|

 (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.
Hangzhou Zhongneng Steam Turbine Power (Indonesia) Co., Ltd. has its business located in Indonesia Rupee is the pricing and booking currency of business operation.
VIII. Change in consolidation scope
1.Change in consolidation scope due to other cause
Description of consolidation scope changes and other causes (eg, the new subsidiary, the subsidiary liquidation, et c.) and related conditions:
||||||
|-|-|-|-|-|
||Way of||||
|Increased of Consolidation scope||Date of acquiring|Capital input|Proportion %|
||acquiring equity||||
|Zhejiang Zhongrun Fuel Engine|Newly||||
|||May 22, 2015|10,000,000|55.55%|
|Technology Co., Ltd.|incorporated||||

IX. Equities in Other Entities
(I) Equity in major subsidiaries
1. Composition of major subsidiaries
||||||||
|-|-|-|-|-|-|-|
|||Reg. Add.||Share proportion %||Way|
|||||Direct|Indirect||
|||||||of|
||Main business||Business||||
|Name of the subsidiaries|||||||
||location||property|||obtai|
|||||||n|
|Zhejiang Steam Trubine Packaged Technologies||||||Incorp|
||Hangzhou|Hangzhou||70.86%|||
|Development Co., Ltd.|||Manufacturing|||oratio|
||Zhejiang|Zhejiang|||||
|||||||n|
|||||60.83%||Incorp|
|Hangzhou Zhongneng Steam Turbine Power Co., Ltd.|Hangzhou|Hangzhou|Manufacturing||||

||||||||
|-|-|-|-|-|-|-|
|(Zhongneng Co.)|Zhejiang|Zhejiang||||oratio|
|||||||n|
|||||||Incorp|
||Hangzhou|Hangzhou||51.00%||oratio|
|Hangzhou Steam Turbine Casting Co., Ltd.|||Manufacturing||||
||Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
|Hangzhou Steam Turbine Machinery Equipment Co.,|Hangzhou|Hangzhou||52.00%||oratio|
||||Manufacturing||||
|Ltd.|Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
|Hangzhou Steam Turbine Auxiliary Machinery Co.,|Hangzhou|Hangzhou||87.53%||oratio|
||||Manufacturing||||
|Ltd. (Auxiliary Machinery Co.)|Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
|Zhejiang Turbine Import & Export Co., Ltd. (Turbine|Hangzhou|Hangzhou||100.00%||oratio|
||||Commerce||||
|Co.)|Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
|Hangzhou Steam Turbine Heavy Industry Co., Ltd.|Hangzhou|Hangzhou||100.00%||oratio|
||||Manufacturing||||
|(Steam Turbine Heavy Industry)|Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
|Zhejiang Huayuan Steam Turbine Machinery Co.,|Hangzhou|Hangzhou|||75.00%|oratio|
||||Manufacturing||||
|Ltd. (Huayuan Co.)|Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
|Hangzhou Guoneng Steam Turbine Engineering Co.,|Hangzhou|Hangzhou|||75.00%|oratio|
||||Manufacturing||||
|Ltd. (Guoneng Co.)|Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
|Xinjiang Taifeng Hangzhou Steam Turbine Packaged|||||||
||Xinjiang|Xinjiang|Manufacturing||51.00%|oratio|
|Technology Development Co., Ltd.|||||||
|||||||n|
|||||||Incorp|
|Hangzhou Bypass Mechanical & Electrical|Hangzhou|Hangzhou|||||
||||Manufacturing||70.00%|oratio|
|Equipment Co., Ltd.|Zhejiang|Zhejiang|||||
|||||||n|
|||||||Incorp|
|Shijiazhuang Hangneng Steam Turbine Technology|Shijiazhuang|Shijiazhuang|||||
||||Service||60.00%|oratio|
|Service Co., Ltd.|Hebei|Hebei|||||
|||||||n|
|||||||Incorp|
|Kunming Hangzhong Steam Turbine Technology|||||||
||Kunming Yunnan|Kunming Yunnan|Service||60.00%|oratio|
|Service Co., Ltd.|||||||
|||||||n|
|||||||Incorp|
|Wulumuqi Hangzhongneng Steam Turbine|Qulumuqi|Qulumuqi|||||
||||Service||60.00%|oratio|
|Technology Service Co., Ltd.|Xingjiang|Xingjiang|||||
|||||||n|

|||||||
|-|-|-|-|-|-|
||||||Incorp|
|Tangshan Hangneng Steam turbine Technology||||||
||Tangshan Hebei|Tangshan Hebei|Service|60.00%|oratio|
|Service Co., Ltd.||||||
||||||n|
||||||Incorp|
|Jilin Hangzhongneng Steam turbine Technology||||||
||Jilin|Jilin|Service|60.00%|oratio|
|Service Co., Ltd.||||||
||||||n|
||||||Incorp|
|Guangxi Hangzhongneng Steam turbine Technology||||||
||Nanning Guangxi|Nanning Guangxi|Service|60.00%|oratio|
|Service Co., Ltd.||||||
||||||n|
||||||Incorp|
|Chengdu Hangzhongneng Steam turbine Technology||||||
||Chengdu Sichuan|Chengdu Sichuan|Service|60.00%|oratio|
|Service Co., Ltd.||||||
||||||n|
||||||Incorp|
|Luoyang Hangzhongneng Steam turbine Technology||||||
||Luoyang Henan|Luoyang Henan|Service|60.00%|oratio|
|Service Co., Ltd.||||||
||||||n|
||||||Incorp|
||Hangzhou|Hangzhou||||
|Hangzhou Steam turbine Boiler Co., Ltd.|||Manufacturing|50.00%|oratio|
||Zhejiang|Zhejiang||||
||||||n|
||||||Incorp|
|Hangzhou Zhongneng Steam turbine (Indonesia) Co.,||||||
||Indonesia|Indonesia|Manufacturing|70.00%|oratio|
|Ltd.||||||
||||||n|
||||||Incorp|
||Hangzhou|Hangzhou||||
|Hangzhou Kaineng Casting Co., Ltd.|||Manufacturing|100.00%|oratio|
||Zhejiang|Zhejiang||||
||||||n|
||||||Incorp|
|Zhejiang Runhong Burming Machine Engineering|Hangzhou|Hangzhou||||
||||Manufacturing|58.00%|oratio|
|Co., Ltd.|Zhejiang|Zhejiang||||
||||||n|
||||||Incorp|
|Zhejiang Zhongrun Burning machine Technology||||||
||Huzhou Zhejiang|Huzhou Zhejiang|Manufacturing|55.55%|oratio|
|Co., Ltd.||||||
||||||n|

（2）Major non-fully-Owned subsidiaries
In RMB
||||||
|-|-|-|-|-|
||Share protion of|Gains/loss of the period|Dividend announced in|Balance of eqiuty of|
|Name of the subsidiaries|minor|attributable to minor|the period to minor|minor shareholders at|
||shareholders|shareholders|shareholders|end of period|
|Zhejiang Steam turbine Packaged|||||
||29.14%|2,701,452.58|4,459,185.00|33,022,226.42|
|Technology Development Co., Ltd.|||||
|Hangzhou Zhongneng Steam turbine|39.17%|8,947,688.57|11,751,600.00|145,574,590.73|

||||||
|-|-|-|-|-|
|Power Co., Ltd.|||||
|Hangzhou Steam Turbine Casting Co.,|||||
||49.00%|2,777,180.98|9,800,000.00|74,254,700.04|
|Ltd.|||||
|Hangzhou Steam Turbine Machinery|||||
||48.00%|22,960,442.64|21,600,000.00|70,770,558.32|
|Equipment Co., Ltd.|||||
|Hangzhou Steam Turbine Auxiliary|||||
||12.47%|2,589,696.45|7,980,800.00|26,789,819.41|
|Machinery Co., Ltd.|||||

Notes：
According to the articles of association of Huayuan Co., Hong Kong Ruiyun Enterprise Co., Ltd.– the overseas investor– will no longer enjoy the equity of the joint-venture as soon as the return reaches RMB10.50 million. As of December 31, 2012, Hong Kong Ruiyun Enterprise Co., Ltd. had received RMB10.50 million of dividend, therefore the minorityshareholder’s equity is neutralized to zero.
According to the articles of association of Guoneng Co., Hong Kong Ruiyun Enterprise Co., Ltd.– the overseas investor– will no longer enjoy the equity of the joint-venture as soon as the return reaches RMB20 million. As of December 31, 2011, Hong Kong Ruiyun Enterprise Co., Ltd. had received RMB20 million of dividend, therefore the minorityshareholder’s equity is neutralized to zero.
(3 Material financial information of major non-fully-owned subsidiaries
In RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||End of term||||||Beginning of term||||||
|Subsidiaries Name||Non-current||Current|Non-current|Total of||Non-current|||Non-current|Total of|
||Current assets||Total of assets||||Current assets||Total of assets|Current liabilities|||
|||assets||liabilities|liabilities|liability||assets|||liabilities|liability|
|Zhejiang Steam turbine|260,227,6|22,709,08|282,936,7|190,272,1||190,272,1|260,702,375|21,213,749.2|281,916,125.0|184,463,309.77||184,463,309|
|Packaged Technology|60.63|9.71|50.34|37.49||37.49|.80|2|2|||.77|
|Development Co., Ltd.|||||||||||||
|Hangzhou Zhongneng Steam|804,557,5|81,590,26|886,147,8|548,736,4|330,000.0|549,066,4|715,796,044|86,588,486.6|802,384,531.6|457,161,693.07|330,000.00|457,491,693|
|turbine Power Co., Ltd.|33.77|8.49|02.26|52.55|0|52.55|.99|4|3|||.07|
|Hangzhou Steam Turbine|223,797,1|199,438,5|423,235,7|224,664,6|29,754,45|254,419,0|250,190,126|210,563,075.|460,753,202.3|254,112,029.27|26,106,805.|280,218,834|
|Casting Co., Ltd.|90.85|95.78|86.63|23.52|5.00|78.52|.81|49|0||00|.27|
|Hangzhou Steam Turbine|185,381,9|21,333,27|206,715,2|59,276,59||59,276,59|181,245,473|21,844,781.0|203,090,254.3|60,247,247.30||60,247,247.|
|Machinery Equipment Co.,|83.06|5.97|59.03|5.83||5.83|.30|8|8|||30|
|Ltd.|||||||||||||
|Hangzhou Steam Turbine|400,114,9|112,067,6|512,182,5|272,629,5|427,720.0|273,057,2|384,009,574|107,153,266.|491,162,840.7|222,420,872.89|534,650.00|222,955,522|
|Auxiliary Machinery Co.,|48.24|29.68|77.92|36.63|0|56.63|.05|66|1|||.89|
|Ltd.|||||||||||||

In RMB元
||||||||||
|-|-|-|-|-|-|-|-|-|
||Amount of current period||||Amount of previous period||||
||||Total Misc Gains|Cash flow for business||||Cash flow for business|
|Subsidiaries Name|||||||||
||Turnover|Net profit|||Turnover|Net profit|Total Misc Gains||
|||||activities||||activities|
|Zhejiang Steam turbine Packaged|216,220,744.25|10,511,797.60|10,511,797.60|16,070,589.71|231,731,289.67|17,506,492.29|17,506,492.29|22,627,749.59|
|Technology Development Co., Ltd.|||||||||
|Hangzhou Zhongneng Steam turbine|704,991,946.83|20,863,372.38|19,240,043.27|39,621,832.18|736,948,605.10|80,926,879.92|80,383,492.40|-21,472,603.67|
|PowerCo., Ltd.|||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|Hangzhou Steam Turbine Casting Co.,|293,407,553.21|5,944,783.76|5,944,783.76|36,007,460.88|307,664,308.13|12,752,064.99|12,752,064.99|6,693,744.73|
|Ltd.|||||||||
|Hangzhou Steam Turbine Machinery|190,469,672.28|47,834,255.49|47,834,255.49|26,726,329.69|199,570,830.17|46,407,865.49|46,407,865.49|45,019,449.38|
|Equipment Co., Ltd.|||||||||
|Hangzhou Steam Turbine Auxiliary|393,879,695.72|33,520,334.09|33,520,334.09|78,733,368.09|435,259,106.45|42,147,863.61|42,147,863.61|91,523,832.52|
|Machinery Co., Ltd.|||||||||

X. Risks related to financial instruments
The objective of theCompany’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.
The credit risks of the Company are mainly composed by bank savings and receivable accounts. Following measurements are adopted to control these risks:
1. Bank deposit
The Company puts its bank savings in financial institutions with higher credit ranks, therefore with lower risks. 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.
(1) Keep constant awareness on risks and supervising receivable accounts.
(2) Keep tracking every detail of business and accounting practices. Trade payment records are maintained as important references to the ranking of client credit. Dynamic management is performed on the clients latest situation and policies are made relatively.
(3) Keep on with direct sales and ensure every contract is followed by corresponding personnel.
For the Company only trade with parties with good credit ranks, no security property is needed. As of December 31,2015, the credit risks feature collectiveness within the Company.
45.07%(48.95%,December 31, 2014) of the receivable accounts were attributable to top 5 clients. The Company holds no property as pledge or other credit ranking up.
Analyzing of receivable accounts neither due nor impaired, and those have due but not impaired:
|||||||
|-|-|-|-|-|-|
|Items|End of term|||||
||Not overdue and notimpaired|Overdue but not impaired|||Total|
|||Within 1 year|1-2 year|Over 2 years||
|Bill receivable|680,518,943.49||||680,518,943.49|
|Subtotal|680,518,943.49||||680,518,943.49|

 (Continue)
|||||||
|-|-|-|-|-|-|
|Items|Beinning of term|||||
||Not overdue and notimpaired|Overdue but not impaired|||Total|
|||Within 1 year|1-2 year|Over 2 years||
|Bill receivable|701,109,938.01||||701,109,938.01|
|Subtotal|701,109,938.01||||701,109,938.01|

 (II) Liquidation risks
Liquidation risks are the possibilities of short in cash at fulfilling liabilities of payment or settlement for financial assets. They may be caused by failing to cash financial assets at fair value instantly;debtors’ failing of paying
debts due; debts due before schedule; or failing of generating expected cash flow.
To handle these risks, the Company adopted multiple measures such as note clearance and bank loans.
Long-term and short-term financing approaches were used to maintain balance between constancy and flexibility. The Company has obtained credit from multiple banks to satisfy the needs of business operation and capital output.
Categorizing of financial liabilities on remained period to due
|||||||
|-|-|-|-|-|-|
|Items|End of term|||||
||Book value|Contract amount notdiscounted|within 1 year|1-3 years|Over 3 years|
|Financial liabilities||||||
|Short-term loans|85,350,000.00|89,602,537.84|89,602,537.84|||
|Notes payable|194,226,049.73|194,226,049.73|194,226,049.73|||
|Non-currentliabilities due to 1year|300,000.00|331,550.05|331,550.05|||
|Long-term loan|123,400,000.00|142,672,805.36||142,672,805.36||
|Account payable|810,420,381.45|810,420,381.45|810,420,381.45|||
|Other accountpayable|29,705,125.51|29,705,125.51|29,705,125.51|||
|Subtotal|1,243,401,556.69|1,266,958,449.94|1,124,285,644.58|142,672,805.36||

 (Continue)
|||||||
|-|-|-|-|-|-|
|Items|Beginning of term|||||
||Book value|Contract amount notdiscounted|within 1 year|1-3 years|Over 3years|
|Financial liabilities||||||
|Short-term loans|198,600,000.00|205,225,558.91|205,225,558.91|||
|Notes payable|150,763,452.14|150,763,452.14|150,763,452.14|||
|Long-term loans|18,500,000.00|21,917,202.85||21,917,202.85||
|Account payable|763,085,718.92|763,085,718.92|763,085,718.92|||
|Other accountpayable|29,597,889.12|29,597,889.12|29,597,889.12|||
|Sub-total|1,160,547,060.18|1,170,589,821.94|1,148,672,619.09|21,917,202.85||

 (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.
As of December 31, 2015, the Company had raised RMB83,850,000.00 (Dec 31 2014: RMB58,700,000.00) on floating interest rates. In case of other variables remain unchanged, if the interest rates change, reasonably and possibly, for50% of the benchmark, the total profit andshareholders’ equity will be free of major impact. 2. Foreign currency risks
XI. Related parties and related transactions
(I) Related parties
1. Parent company of the Company
|||||||
|-|-|-|-|-|-|
|Name of the parent||||Shareholding of the|Voting rights of the|
||Reg. Add.|Business property|Registered capital|||
|co.||||parent co.|parent co. %|
|Hangzhou Steam||||63.64%|63.64%|
||Hangzhou China|Manufacturing|800 mil|||
|Turbine Group||||||

Notes
(1) Place of registration, organizational form and address of headquarters.
Hangzhou Steam Turbine Power Group Co. Ltd., is a solely state-owned limited liability company approved by Hangzhou government. It was registered in Hangzhou administrative bureau for industry and commerce on May 7, 1998, with the License of The Business Corporation now numbered 330100000031779. Place of registration: Hangzhou. Legal representative: Zhonghai Nie. Registered capital of the company is 800 million Yuan, fully contributed by State-owned Assets Supervision and Administration Commission of Hangzhou government.
The predecessor of Hangzhou Steam Turbine Power Group Co. Ltd., is turbine factory, and it was built to be Hangzhou Steam Turbine Group Power Co. Ltd., on Dec. 14, 1992, officially replied and approved by files numbered[1992]68 by Hangzhou Commission for Structural Reforms, numbered[1992]883 by Hangzhou planning commission and numbered[1992]705 by Hangzhou economic committee. In June, 1995, Hangzhou Steam Turbine (Group) corporation reorganized to be Hangzhou Steam Turbine Group Co. Ltd., according to file No.[1995]61 published by Hangzhou government and fileNo.[1995]112 published by the government of Zhejiang province and state economic and trade commission, becoming solely state-owned corporation with registered capital 156.85 million authorized by Hangzhou government. In Jan. 2008, according to decisions of the second-session 32nd board meeting and the brief response note of the official document processing issued by the Hangzhou government State-owned Assets Supervision and Administration Commission “SASACJF[2008] No. 2 ”, and respond opinion and revised regulation of No.4 Hangzhou government State-owned Assets Supervision and Administration Commission, the registered capital of the Group increased by 343.15 million. In Feb. 2008, the Group completed industrial and commercial change procedure, with registered capital 500 million after change. In Sept. 2012, according to theGroup’s board decision and the brief response note of the official document processing issued by and revised regulation received from the Hangzhou government State-owned Assets Supervision and Administration Commission “SASACJF[2008] No. 33 ” , the Group increased by 300 million in registered capital. In Nov. 2012, the Group settled the industry and commercial change procedure, with registered capital of 800 million after change.
(2) Nature of business and main business scope
Hangzhou Steam Turbine Group is a group company, whose business covers manufacture, process and textile machine, paper manufacturing machine, pump, casting, electric tool, variable gear devices, heat exchanger, numerical control and digital display devices and spare part of above equipment. It undertakes overseas machinery industry and domestic international bidding projects and equipment, material export, appointing contract workers needed by above foreign projects. It also involves thermoelectric project contracting and whole set of equipment, wholesale and retail products, spare parts and technology development, consulting, service of products mentioned above produced by group member enterprises. It provides raw materials, equipment, spare parts needed by group
member enterprises for production and water, electricity and gas supply for subordinate companies.
Hangzhou Municipal Government State-owned Asset Supervisory Committee is the ultimate controller of the
Company.。
2.Subsidiaries
For details of subsidiaries please go to the statement of equities in other entities.
3. Other related parties
|||
|-|-|
|Name of the related parties|Relationship with the Company|
|Hangzhou Steam turbine Automobile sales service Co., Ltd.|Affiliate of the Group|
|Hangzhou Hangfa Power Generating Equipment Co., Ltd.|Affiliate of the Group|
|Hangzhou Nanfang Tongda Gears Co., Ltd.|Affiliate of the Group|
|Hangzhou Nanhua Wooden Packaging Co., Ltd.|Affiliate of the Group|
|Hangzhou Steam Turbine Industrial Co., Ltd.|Affiliate of the Group|
|Hangzhou Steam Turbine Power Technologies Co., Ltd.|Affiliate of the Group|
|HSTG Technology Association|Affiliate of the Group|
|Hangzhou Steam Turbine Engineering Co., Ltd.|Affiliate of the Group|
|HSTG Equipment Engineering Co., Ltd.|Affiliate of the Group|
|Hangzhou Relian Group Co., Ltd.|Affiliate of the Group|
|Zhejiang Hanglian Steel & Iron Co., Ltd.|Affiliate of the Group|
|Hangzhou Steam Turbine Electronic Valve Co., Ltd.|Affiliate of the Group|
|Hangzhou Steam Turbine Compressor Co., Ltd.|Affiliate of the Group|
|HSTG(Hangzhou) United Institutes Co., Ltd.|Affiliate of the Group|
|Hangzhou Wandong Electric Co., Ltd|Affiliate of the Group|
|Greenesol Co.(India)|Affiliates of the auxiliary Co|

Other explanation
4.Related transaction
(1) Sale of goods/rendering of labor services/labor service offering
Purchase of goods and service
In RMB
|||||||
|-|-|-|-|-|-|
|||||Over the||
|Related parties|Content|Reporting period|Trading limit approved|trading limit|Prior period|
|||||or not||
|Hangzhou Steam Turbine Automobile Sales|freight,|58,984,034.85|64,000,000.00|No|59,249,879.59|
|Service Co., Ltd.|repairing fee|||||
|Hangzhou Hangfa Power Generating Equipment|Generators|126,685,952.21|120,000,000.00|Yes|119,833,954.27|
|Co., Ltd.||||||
|Hangzhou Nanhua Wooden Packaging Co., Ltd.|Packaging|11,948,339.94|12,000,000.00|No|12,526,915.52|
||materials|||||
|Hangzhou Nanfang Tongda Gears Co., Ltd.|Gear boxes|5,421,380.35|16,000,000.00|No|16,252,887.19|
|Hangzhou Steam Turbine Industrial Co.|Raw materials,|||||
||Industrial|1,286,863.61|||945,078.92|
||cooperation|||||
|Hangzhou Steam Turbine Group|Equipment|331,131.48|||182,857.89|
||maintenance|||||
|HSTG Technology Association|Industrial|16,923.08|||3,760.68|
||cooperation|||||
|Greenesol Co. (India)|Generators|25,924,364.86|50,000,000.00|No|49,868,293.64|

||||||
|-|-|-|-|-|
|HSTG (Hangzhou) United Institutes Co., Ltd.|Technical|200,000.00||11,400.00|
||service||||
|Hangzhou Steam Turbine Engineering Co., Ltd.|Law material|1,538,461.54|||
|Hangzhou Steam Turbine Electronic Tube Co.,|Law material||||
|||770,000.03|||
|Ltd.|||||
||Industrialcooperation||||
|Hangzhou Wandong Electric Co., Ltd.||13,743.59|||
|Subtotal||233,121,195.54|No|258,875,027.70|

 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 Hangfa Power Generating|Cast parts, industrial|11,111,122.55|10,527,798.78|
|Equipment Co., Ltd.|co-operation|||
|Hangzhou Steam Turbine Engineering Co.,|Steam turbine|188,034,438.04|25,040,660.40|
|Ltd.||||
|Hangzhou Steam Turbine Group|Industrial cooperation|94,339.62|94,339.62|
|Hangzhou Steam Turbine Automobile Sales||||
||Small amount materials|408.87|982.30|
|Service Co., Ltd.||||
|Hangzhou Nanhua Wooden Packaging Co.,||||
||Small amount materials|854.70||
|Ltd.||||
|Greenesol Co.(India)|Steam turbine|1,885,925.23|2,198,986.74|
|Hangzhou Steam Turbine Compressor Co.,|Compressor, Industrial|||
|||620,733.76||
|Ltd.|cooperation|||
|Subtotal||201,747,822.77|37,862,767.84|

 2. Rental with related parties
The Company as leasee
In RMB
|||||
|-|-|-|-|
||Category of asset for|Rental recognized this period|Rental recognized|
|Name of the owner||||
||rent||previous period|
||Houses & plants|3,241,447.16|6,433,118.75|
|Hangzhou Steam Turbine Group||||
||Engineering|||
|Hangzhou Steam Turbine Group||1,760,683.76||
||Equipment|||
|Hangzhou Steam Turbine Group|Land using right|3,545,791.00|3,545,791.00|
|Hangzhou Steam Turbine Automobile Sales||5,464,123.22|5,242,213.66|
||Site leasing|||
|Service Co., Ltd.||||
|Subtotal||14,012,045.14|15,221,123.41|

 Notes
3. Guarantees among the related parties
The Company as the provider
In RMB
||||||
|-|-|-|-|-|
|||Guarantee|Guarantee||
|The beneficiary|Amount guaranteed|||Completed or not|
|||Start date|Expired on||

||||||
|-|-|-|-|-|
|Hangzhou Steam Turbine|||||
||100,000,000.00|December 18,2017|December 18,2019|No|
|Group|||||

4. Remunerations of key managements
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
|Remunerations of key managements|7,621,482.40|8,825,900.72|

 5. Other related transactions
(1) Service and power supply
HSTG supplies water and power to the Company and some of the subsidiaries amounted to RMB15,348,844.59 this period.
Hangzhou Steam Turbine Automobile Sales& Service Co., Ltd. provided transportation to theCompany’s employees and RMB2,475,553.85 was paid this period.
Hangzhou Steam Turbine Industry Co., Ltd. provided cleaning services to the Company and RMB1,166,665.00 was paid this period.
(2) Using of trademark
The Company pays RMB1,698,113.20 to HSTG for using of the registered trademark.
(3) Expenses paid on behalf the Company
Hangzhou Steam Turbine Automobile Sales& Service Co., Ltd. paid RMB9,797,655.09 of tarrif on behalf of Turbine Co. during the period.
5.Payables and receivables of the related party
（1）Receivable
In RMB
|||||||
|-|-|-|-|-|-|
|||End of term||Beginning of term||
|Projects|Related parties|Book balance|Bad debt provision|Book balance|Bad debt provision|
|Account|Hangzhou Steam Turbine Engineering|||||
|||49,710,305.99|3,657,185.10|8,351,855.99|1,693,436.30|
|payable|Co., Ltd.|||||
||Hangzhou Hangfa Power Generating|||||
|||16,174,291.35|972,428.47|10,824,277.96|541,213.90|
||Equipment Co., Ltd.|||||
||Hangzhou Nanhua Wooden Packaging|||||
|||310,060.00|186,036.00|1,017,560.00|447,753.00|
||Co., Ltd.|||||
||Hangzhou Steam Turbine Group|236,000.00|11,800.00|||
||Hangzhou Steam Turbine Group|258,500.00|163,500.00|258,500.00|115,100.00|
||Hangzhou Nanfang Tongda Gears Co.,|||||
|||16.48|0.82|1,149.30|57.47|
||Ltd.|||||
||Hangzhou Nanfang Tongda Gears Co.,|||||
|||||4,434.00|2,660.40|
||Ltd.|||||
||Greenesol Co. (India)|14,642,682.67|8,785,609.60|13,797,981.90|5,519,192.76|
|Subtotal||81,331,356.49|13,776,059.99|34,255,759.15|8,319,413.83|

|||||
|-|-|-|-|
||Hangzhou Steam Turbine Engineering|||
|Prepayment||2,270,000.00||
||Co., Ltd.|||
||Hangzhou Steam Turbine Electronic|||
|||26,834,825.00|22,009,425.00|
||Valve Co., Ltd.|||
||Hangzhou Steam Turbine Electronic||900,900.00|
||Valve Co., Ltd.|||
||Hangzhou Steam Turbine Group||107,715.92|
|Subtotal||29,104,825.00|23,018,040.92|

（2）Payables
In RMB
|||||
|-|-|-|-|
|Projects|Related parties|End of term|Beginning of term|
|Account||100,434,643.05|79,049,778.95|
||Hangzhou Hangfa Power Generating Equipment Co., Ltd.|||
|payable||||
||Greenesol Co. (India)|8,495,882.02|11,133,713.63|
||Hangzhou Steam Turbine Group|5,251,995.90|1,134,000.82|
||Hangzhou Steam Turbine Automobile Sales Service Co.,|||
|||2,737,416.93|1,458,189.74|
||Ltd.|||
||Hangzhou Nanhua Wooden Packaging Co., Ltd.|404,433.00|313,983.80|
||Hangzhou Steam Turbine Engineering Co., Ltd.|380,000.00||
||HSTG (Hangzhou) United Institutes Co., Ltd.|153,000.00||
||Hangzhou Nanfang Tongda Gears Co., Ltd.|112,273.00|982,000.00|
||Hangzhou Steam Turbine Industrial Co.|8,440.00|203,484.86|
|Subtotal||117,978,083.90|94,275,151.80|
|Advances||55,573,740.00|15,979,200.00|
||Hangzhou Steam Turbine Engineering Co., Ltd.|||
|received||||
|||14,235,000.00|14,190,000.00|
||Hangzhou Steam Turbine Compressor Co., Ltd.|||
|Subtotal||69,808,740.00|30,169,200.00|
|Other account||6,050,024.82|5,688,406.79|
||Hangzhou Steam Turbine Group|||
|payable||||
|Subtotal||6,050,024.82|5,688,406.79|

 6. Related party commitment
XII. Commitment and Contingency Issues
(I) Material commitment issues
Significant contingency at balance sheet date
1. External investment contracts engaged but not exercised or not fully exercised and related financial outflow The Company invested RMB10 million to be one of the partners of Hangzhou Changdi Share Investment Partnership (with limited liabilities) in 2011. This was the initial input of capital, and the Company committed to input supplementary capital when necessary according to the portion of interests, but not greater than RMB50 million accumulative in 8-11 years during the existing period of the firm. Extra RMB11.5935 million was inputted in , accumulated to RMB39.1155 million thereof.
2. Outsourcing contracts engaged with large amounts and are under processing or preparation
Capital commitment related to construction of workshops or purchasing of equipment by the Company or
subsidiaries is amounted to RMB25. 138 million.
XIII. Major contingencies on balance sheet date
1.Major non adjusting events
In RMB
|||||
|-|-|-|-|
|Items|Content|Influence|Reason|
||To improve the return on investment of|||
||company funds, the company intends to use|||
||its own funds of RMB 50 million to invest|||
||in Hangzhou Jushi investment partnership|||
|Major overseas|(limited partnership), the company as a|||
||limited partner, in order to limit the amount||Yet the actual contribution|
|investment||||
||of capital subscribed by foreign limited|||
||liability. The 26th session of the 6th matter|||
||by the company Board of Directors. As|||
||financial report, the company has not yet|||
||actual contribution to the partnership.|||

1. Profit distribution
|||
|-|-|
|Proposed profits or dividends|0|
|Authorized dividends|0|

 XIV. Other Material Issues
A.Segment information
1. Recognition of segments and accounting policies
Business segments are determined according to the administration structure, management requirement, and internal reporting mechanism. Segments are parts of theCompany’s business satisfying all of the following conditions:
(1) Generate revenue and expenses in daily operations;
(2) Operational results can be assessed by the management to decide the resources to be allocated;
(3) Financial position, business results, and cash flow of the part is accessible through analyzing.
2. Reasons of not being able to report about the segments
TheCompany’s business range is relatively narrow and mainly involved in producing and selling of steam turbines, gas turbines and auxiliary machinery and parts. It is regarded as an integral business by the management. Therefore segment report is not included in this report.
B.Other important impact on investor decision-making transactions and events
Controlling shareholder of the company, Hangzhou Steam Turbine Group, is planning mixed ownership reform. We are the biggest shareholding subsidiary corporation in manufacturing industry of subordinate company of the Hangzhou Steam Turbine Group . In this mixed ownership reform, it will be involved into reform range as the core business and property taking-in company of the Hangzhou Steam Turbine Group industry plate. If the ownership structure of Hangzhou Steam Turbine Group changes significantly, it will have a profound influence on the government structure and operational mechanism for thecompany’s future. But that matter is now being pushed on, and there is still pretty much uncertainty in mixed ownership reforms.
XV. Notes s of main items in financial reports of parent company
1.. Accounts receivable
(1) Accounts receivable disclosed by category
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Bad debt provision|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|||||||||||
|||Proportio||Proportio|Book value||Proportio||Proportio|Book value|
||Amount||Amount|||Amount||Amount|||
|||n||n|||n||n||
|Accounts receivable|||||||||||
|portfolio subject to|||||||||||
||2,236,823,799.21|98.68%|599,432,126.23|26.80%|1,637,391,672.98|2,455,949,951.86|98.80%|444,969,697.87|18.12%|2,010,980,253.99|
|impairment by credit|||||||||||
|risk|||||||||||
|Account receivable|||||||||||
|of individual not|||||||||||
|significance subject|||||||||||
||29,819,607.69|1.32%|29,819,607.69|100.00%||29,819,607.69|1.20%|29,819,607.69|100.00%||
|to individually|||||||||||
|assessment for|||||||||||
|impairment|||||||||||
|Total|2,266,643,406.90|100.00%|629,251,733.92|27.76%|1,637,391,672.98|2,485,769,559.55|100.00%|474,789,305.56|19.10%|2,010,980,253.99|

 Receivable accounts with large amount individually and bad debt provisions were provided
Not applicable
Account receivable in the portfolio which are provided bad debt provision on age basis
In RMB
|||||
|-|-|-|-|
||End of term|||
|Age||||
||Book balance|Bad debt provision|Providing rate%|
|Subitem within 1 year||||
|Within 1 year|488,212,821.42|24,410,641.07|5.00%|
|Subtotal within 1 year|488,212,821.42|24,410,641.07|5.00%|
|1-2 years|526,046,749.31|52,604,674.93|10.00%|
|2-3 years|517,304,017.26|155,191,205.18|30.00%|
|Over 3 years||||
|3-4 years|243,626,138.33|146,175,683.00|60.00%|
|4-5 years|118,292,313.95|94,633,851.16|80.00%|
|Over 5 years|126,416,070.89|126,416,070.89|100.00%|
|Total|2,019,898,111.16|599,432,126.23||

Receivable accounts combined within consolidating range for providing of bad debt provisions
|||||
|-|-|-|-|
|Name of the portfolio|End of term|||
||Book balance|Bad debt provision|Providing rate %|
|Combinations of related transactionsin consolidation range|216,925,688.0|5||
|Sub-total|216,925,688.0|5||

Remarks on deciding of combinations:
Receivable accounts and other receivable accounts within the consolidation range are tested for impairment individually. No bad debt provision is provided in case there is no impairment occurred.
（2）Accrual period, recovery or reversal of bad debts situation
The current amount of provision for bad debts is RMB159,201,949.70 ; recovery or payback for bad debts Amount is RMB0.00.
(3) Receivable accounts actually written off in the report period
In RMB
|||
|-|-|
|Items|Amount|
|Difficult to recover|4,739,521.34|

 Of which the significant actual write-off accounts receivable:
In RMB
|||||||
|-|-|-|-|-|-|
||Nature of|||||
||||Reason for||Arising from related|
|Name|account|Amount written off||Verification procedures||
||||write-off||transactions (Y/N)|
||receivables|||||
||||Difficult to|The examined and adopted to||
|Zhejiang Jiahua Energy Chemical Co., Ltd.|Goods|1,920,000.00|||No|
||||recover|Board of directors||
||||Difficult to|The examined and adopted to||
|Oriental Electrical Group .Beijing||||||
||Goods|1,599,316.10|||No|
|Company|||recover|Board of directors||

|||||||
|-|-|-|-|-|-|
||||Difficult to|The examined and adopted to||
|China Petrochemical Group Sichuan Vigny||||||
||Goods|290,000.00|||No|
|Lun factory|||recover|Board of directors||
||||Difficult to|The examined and adopted to||
|Other|Goods|930,205.24|||No|
||||recover|Board of directors||
|Total|--|4,739,521.34|--|--|--|

 Explanation for write-off of account receivables:
（4）The ending balance of other receivables owed by the imputation of the top five parties
|||||
|-|-|-|-|
|Name of the companies|Book balance|Portion in balance of receivableaccounts (%)|Bad debt provision|
|Client 1|710,533,035.92|31.35|199,807,870.90|
|Client 2|338,964,890.80|14.95|128,687,041.80|
|Xiuping Company|142,218,190.42|6.27||
|Complete company|68,455,845.24|3.02||
|Client 5|77,454,736.96|3.42|56,802,786.87|
|Subtotal l|1,337,626,699.34|59.01|385,297,699.57|

2. Other Accounts receivable
(1) Other Accounts receivable disclosed by category
In RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|Category|||||||||||
|||Proportio||Proportio|Book value||Proportio|||Book value|
||Amount||Amount|||Amount||Amount|Proportion||
|||n||n|||n||||
|Other Accounts receivable|||||||||||
|portfolio subject to|14,390,560.25|79.50%|2,145,188.28|14.91%|12,245,371.97|35,956,830.09|90.65%|2,419,017.74|6.73%|33,537,812.35|
|impairment by credit risk|||||||||||
|Other Account receivable|||||||||||
|of individual not|||||||||||
|significance subject to|3,710,320.94|20.50%|3,710,320.94|100.00%||3,710,320.94|9.35%|3,710,320.94|100.00%||
|individually assessment|||||||||||
|for impairment|||||||||||
|Total|18,100,881.19|100.00%|5,855,509.22|32.35%|12,245,371.97|39,667,151.03|100.00%|6,129,338.68|15.45%|33,537,812.35|

 Other receivables with individually significant amount and provision for bad and doubtful debts individually provided at the end of the reporting period. Not applicable
Other receivable accounts in the group on which bad debt provisions are provided on age basis
In RMB
|||||
|-|-|-|-|
||End of term|||
|Age||||
||Other receivable account|Bad debt provision|Proportion%|
|Subitem within 1 year||||
|Within 1 year|5,874,981.66|293,749.08|5.00%|
|Subtotal within 1 year|5,874,981.66|293,749.08|5.00%|
|1-2 years|3,432,681.62|343,268.16|10.00%|
|2-3 years|1,031,692.00|309,507.60|30.00%|
|Over 3 years||||
|3-4 years|700,000.00|420,000.00|60.00%|
|4-5 years|554,999.80|443,999.84|80.00%|
|Over 5 years|334,663.60|334,663.60|100.00%|
|Total|11,929,018.68|2,145,188.28|37.44%|

Other receivable accounts combined within consolidating range for providing of bad debt provisions
|||||
|-|-|-|-|
|Name|End of term|||
||Book balance|Bad debt provision|Providing rate %|
|Combinations of related transactionsin consolidation range|2,461,541.57|||
|Subtotal|2,461,541.57|||

Remarks on deciding of combinations:
Receivable accounts and other receivable accounts within the consolidation range are tested for impairment individually. No bad debt provision is provided in case there is no impairment occurred.
（2）Accrual period, recovery or reversal of bad debts situation
The current amount of provision for bad debts is RMB11,420.54 ; recovery or payback for bad debts Amount is RMB0.00.
(3) Receivable accounts actually written off in the report period
In RMB
|||
|-|-|
|Items|Amount|
|Difficult to recover|285,250.00|

 Of which the significant actual write-off accounts receivable:
In RMB
|||||||
|-|-|-|-|-|-|
||Nature of account|||Verificationprocedures|Arising from related|
|Name||Amount written off|Reason for write-off|||
||receivables||||transactions (Y/N)|
|Luoyang Jinlong||||The examined and||
|Electric Power|Deposit|200,000.00|Difficult to recover|adopted to Board of|No|
|Extension Command||||directors||

|||||||
|-|-|-|-|-|-|
|Total|--|200,000.00|--|--|--|

（4）Other account receivable classified by account nature
In RMB
||||
|-|-|-|
|Nature|Closing book value|Opening book value|
|Deposit|15,557,676.02|17,537,246.23|
|Pretty cash|66,000.00|237,970.00|
|Provisional payment receivable|2,461,541.57|21,438,383.99|
|Other|15,663.60|453,550.81|
|Total|18,100,881.19|39,667,151.03|

 (5) Top 5 of the closing balance of the accounts receivable collected according to the arrears party
In RMB
|||||||
|-|-|-|-|-|-|
||Account|||Percentage in total||
|Name of the company||Book balance|Age||Bad debt provision|
||property|||other receivable %||
|Shanghai Customs Waigaoqiao Office|Deposit|3,710,320.94|Over 5 years|20.50%|3,710,320.94|
||Advance in|||||
|Casting Company||2,124,732.77|With in 1 year|11.74%||
||cash|||||
|Guoxin Bidding Group Co., Ltd.|Deposit|1,659,500.00|0-5 years|9.17%|120,100.00|
|Guodian Trust Bidding Co., Ltd.|Deposit|1,455,150.00|0-4 years|8.04%|365,115.00|
|Jiangsu International Bidding Co., Ltd.|Deposit|800,000.00|Within 1 year|4.42%|40,000.00|
|Inner Mongolia Bidding Co., Ltd.|Deposit|550,000.00|1-2 years|3.04%|55,000.00|
|Total|--|9,749,703.71|--|53.86%|4,235,535.94|

 3. Long-term share equity investment
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of term|||Beginning of term|||
|||Impairm|||Impair||
|Items||ent|||ment||
||Book balance||Book value|Book balance||Book value|
|||provisio|||provisio||
|||n|||n||
|Investment on|||||||
||502,919,378.03||502,919,378.03|502,919,378.03||502,919,378.03|
|subsidiaries|||||||
|Total|502,919,378.03||502,919,378.03|502,919,378.03||502,919,378.03|

 (1) Investment on subsidiaries
In RMB
||||||||
|-|-|-|-|-|-|-|
||||Curre||||
||||||Provided||
|||Increase|nt|||Impairment|
||||||current term||
|Company invested in|Beginning of term|d this|term|End of term||provision|
||||||Impairment||
|||period|decre|||End of term|
||||||provision||
||||ase||||
|Zhejiang Xiuping Import and export trade|20,000,000.00|||20,000,000.00|||

||||
|-|-|-|
|Co., Ltd.|||
|Hangzhou Heavy Industry|360,000,000.00|360,000,000.00|
|Hangzhou Auxiliary Machine Co.|46,286,513.41|46,286,513.41|
|Zhejiang Turbine Packaged Co.|29,800,389.56|29,800,389.56|
|Zhongneng Co.|27,644,475.06|27,644,475.06|
|Machinery Co.|7,968,000.00|7,968,000.00|
|Casting Co.|11,220,000.00|11,220,000.00|
|Total|502,919,378.03|502,919,378.03|

4.Business income and Business cost
In RMB
||||||
|-|-|-|-|-|
||Amount of current period||Amount of previous period||
|Items|||||
||Income|Cost|Income|Cost|
|Main business|1,530,893,344.10|1,156,539,776.01|2,562,005,959.74|1,781,188,582.14|
|Other business|24,603,027.43|22,488,463.30|22,204,008.60|18,750,139.19|
|Total|1,555,496,371.53|1,179,028,239.31|2,584,209,968.34|1,799,938,721.33|

 5. Investment income
In RMB
||||
|-|-|-|
|Items|Current term|Same period of last term|
|Long-term equity investment gains on cost basis|118,708,415.00|170,983,585.00|
|Investment income received from holding of available-for|||
||27,742,368.00|23,118,640.00|
|–sale financial assets|||
|Gains from financing products|3,153,852.99|2,801,258.48|
|Total|149,604,635.99|196,903,483.48|

 XVI. Supplementary Information
(I) Non-recurring gain/loss
In RMB
||||
|-|-|-|
|Items|Amount|Remarks|
|Gains/losses from the disposal of non-current asset|-441,916.66||
|Governmental subsidy calculated into current gains and loess（while closely|||
|related with the normal business of the Company, excluding the|||
||15,752,977.27||
|fixed-amount or fixed-proportion governmental subsidy according to the|||
|unified national standard）|||
|Gains and losses from change of fair values of held-for-transaction financial|19,624,429.30||

||||
|-|-|-|
|assets and financial liabilities except for the effective hedge business related|||
|to normal business of the Company, and investment income from disposal|||
|of transactional financial assets and liabilities and financial assets available|||
|for sale|||
|Other non-operating income and expenditure beside for the above items|12,164,381.63||
|Less: Influenced amount of income tax|8,553,255.35||
|Amount of influence of minority interests|5,191,956.32||
|Total|33,354,659.87|--|

2.Net income on asset ratio and earning per share
|||||
|-|-|-|-|
||Weighted average|Earnings per share (yuan/share)||
|Profit of the report period|net income on|||
|||Basic earnings|Diluted earnings|
|||per share|per share|
||asset %|||
||-3.76%|-0.22|-0.22|
|Net profit attributable to common shareholders of the Company||||
|Net profit attributable to the common owners of the PLC after deducting of|-4.53%|-0.26|-0.26|
|non-recurring gains/losses||||

Documents for Reference
I. Annual Report 2015 with signature of the Chairman;
II. Original copy of theAuditors’ Report with the seals and signatures of the legal representative, CFO, Accounting Manager of the Company, and the Pan-China CPA and signed by certified accountants.
III. All of the originals of theCompany’s documents and public notices publicized by the presses designated by China Securities Regulatory Commission in the report period;
IV. Original copy of Resolutions of the 28th Meeting of the 6th Term of Board with signatures of directors. Hangzhou Steam Turbine Co., Ltd.
Chairman of the Board: Zheng Bin
March 19, 2016