Stock Code: 200771 Stock ID: Hangqilun B Announcement No. 2016-25
Hangzhou Steam Turbine Co., Ltd.
Related Transactions Occurred in 2015 and Projected for
Year 2016
The members of the Board and the Company acknowledge being responsible for the truthfulness, accuracy, and
completeness of the announcement. Not any false record, misleading statement or significant omission carried in
this announcement.
I. Profiles of the routine related transactions
(I) Introduction of the related transaction
Routine related transactions of the Company are mainly purchasing of materials and fuel from
related parties; sales of products to related parties; and receiving or providing of services to the
related parties. For profiles of the related parties please go to part III of this report.
The routine related transactions to be made in year 2016 is project to RMB370.0865 million, and
that actually occurred in 2015 was RMB466.5588 million.
The 28th meeting of the 6th term of Board was held on March 17, 2016. The proposal about
routine related transactions occurred in 2015 and project for year 2016 was examined at the
meeting. Director Nie Zhonghai, Yan Jianhua, Yang Yongming, Ye Zhong, and Zheng Bin waived
from the voting. As the resolution, the proposal was passed with all 6 votes in favor, 0 objection
and 0 waive.
This proposal is subject to examination of the Shareholders’ Meeting 2015 and Hangzhou Steam
Turbine Power Group Co., Ltd. shall waive from voting of this proposal.
(II)The related transactions occurred in 2015 and project for year 2016
In RMB
Occurred last year
Type of Contract amount
related Related parties or projected Percentage in
transaction amount Amount occurred similar
business %
Hangzhou Nanhua Wooden Packaging Co., Ltd. 13,000,000.00 11,948,339.94 0.79%
Hangzhou Nanfang Tongda Gears Co., Ltd. 6,000,000.00 5,421,380.35 0.36%
Hangzhou Steam Turbine Industrial Co., Ltd. 1,400,000.00 1,286,863.61 0.09%
Purchasing
of material HSTG (Hangzhou) United Institutes Co., Ltd. - 200,000.00 0.01%
from related
Hangzhou Hangfa Power Generating Equipment
party 140,000,000.00 126,442,362.47 8.38%
Co., Ltd.
Greensol Co. 29,000,000.00 25,924,364.86 1.72%
Hangzhou Wandong Electronic Co., Ltd. 15,000.00 13,743.59 0.00%
HSTG Technology Association 20,000.00 16,923.08 0.00%
Hangzhou Steam Turbine Engineering Co., Ltd. 2,000,000.00 1,538,461.54 0.10%
Subtotal 191,635,000.00 172,792,439.44 11.45%
Purchasing of
fuel and power Hangzhou Steam Turbine Power Group Co., Ltd. 15,000,000.00 13,123,548.73 23.28%
from the
related parties
15,000,000.00 13,123,548.73 23.28%
Subtotal
Hangzhou Steam Turbine Compressor Co., Ltd. 650,000.00 582,272.22 0.02%
Hangzhou Steam Turbine Engineering Co., Ltd. 60,000,000.00 188,034,438.04 7.29%
Sales of Hangzhou Hangfa Power Generating Equipment
products or 12,000,000.00 11,111,122.55 0.43%
merchandises Co., Ltd.
of the
Company to Greensol Co. 2,000,000.00 1,885,925.23 0.07%
related parties
Hangzhou Steam Turbine Automobile Sales
500.00 408.87 0.00%
Service Co., Ltd.
Hangzhou Nanhua Wooden Packaging Co., Ltd. 1,000.00 854.70 0.00%
Subtotal 74,651,500.00 201,615,021.61 7.82%
Hangzhou Steam Turbine Power Group Co., Ltd. 100,000.00 94,339.62 0.44%
Labor
service to Hangzhou Hangfa Power Generating Equipment
300,000.00 243,589.74 1.13%
related Co., Ltd.
parties
Hangzhou Steam Turbine Compressor Co., Ltd. 200,000.00 38,461.54 0.18%
Subtotal 600,000.00 376,390.90 1.74%
Labour & Hangzhou Steam Turbine Automobile Sales
services 75,000,000.00 66,907,558.07 15.04%
accepted Service Co., Ltd.
from the Hangzhou Steam Turbine Power Group Co., Ltd. 12,000,000.00 10,577,166.60 2.38%
related
parties Hangzhou Steam Turbine Industrial Co., Ltd. 1,200,000.00 1,166,665.00 0.26%
Subtotal 88,200,000.00 78,651,389.67 17.68%
Products
and
merchandise
s sold by
related
Subtotal
parties as
agency
Sales of
products on
behalf of the
related parties Subtotal
Total 370,086,500.00 466,558,790.35
(III) Accumulation of related transactions from the beginning of year to the date of
disclosure
In RMB
No. Name of the parties Total of related transactions occurred
1 Hangzhou Steam Turbine Power Group Co., Ltd. 60,543.31
2 Hangzhou Hangfa Power Generating Equipment Co.,
20,668,763.74
Ltd.
3 Hangzhou Nanfang Tongda Gears Co., Ltd. 94,358.97
4 Hangzhou Nanhua Wooden Packaging Co., Ltd. 454,916.03
5 Hangzhou Steam Turbine Automobile Sales Service
430,137.13
Co., Ltd.
6 Hangzhou Steam Turbine Engineering Co., Ltd. 143,683.49
7 Hangzhou Steam Turbine Industrial Co. 4,257.00
8 Hangzhou Steam Turbine Compressor Co., Ltd. 76,923.08
Sum of above： 21,933,582.75
Note: tax is not included here above.
II. Introduction of related parties and relationship
(I) Hangzhou Steam Turbine Power Group Co., Ltd.
1. Profiles
(1) Date of incorporation: December 14, 1992
(2) Registered address: No. 357 Shiqiao Road Hangzhou City
(3) Office address: Block A, 68 Qingchun Road East, Hangzhou
(4) Enterprise property: sole state-owned corporation
(5) Legal representative: Mr. Nie Zhonghai
(6) Registered capital: RMB800 million
(7) Taxation registration No. 330191143071842
(8) Business scope: Manufacturing and processing: textile machinery, 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 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 Group, water and power supply (other than installation and maintaining of power
supply equipment); Including the business scope of subsidiaries.
(9) Actual holder: Hangzhou State-owned Asset Administration Committee
2. Recent financial information (on consolidated range)
In RMB
Periods Turnover Net profit Gross Assets Net asset
Year 2015 55,917,962,311.31 421,751,997.48 29,378,018,996.17 8,064,678,349.75
Year 2014 58,232,020,389.51 750,875,510.88 28,120,769,970.09 7,932,248,584.65
3. Relationship with the Company
Hangzhou Steam Turbine Power Group Co., Ltd. (“HSTG” or “the Group”) is holding
479,824,800 state-owned shares account for 63.64% of the capital shares of the Company, and is
the holding shareholder of the Company. It is complying with Article 10.1.3 (I) of Share Listing
Rules of Shenzhen Stock Exchange. HSTG is the related legal person of the Company. This is a
related transaction.
4. Description of related transactions and their necessity
The Company rents lands, office spaces, workshops, warehouses from HSTG; the water and
power supply were provided by HSTG; the trade mark was authorized by HSTG. For these have
been the basic conditions the Company needs for production and operation, these transactions will
exist constantly.
(II) Hangzhou Hangfa Generator Equipment Co., Ltd.
1. Profiles
(1) Incorporated on: March 22, 1993
(2) Registered address: Tonger Village, Linpu, Xiaoshan
(3) Office address: 128 Shixinzhong Road, Xiaosha
(4) Enterprise property: state-owned shareholding corporation
(5) Legal representative: Yan Jianhua
(6) Registered capital: RMB 80 million
(7) Taxation registration No. 330181142915193
(8) Business scope: hydropower station equipment, parts of steam turbine generators, electric
motor, power plant and mining equipment, automatic control parts, export of products and
technologies,
(9) The controlling shareholder: Hangzhou Steam Turbine Power Group Co., Ltd.
2. Recent financial information
In RMB
Periods Turnover Net profit Gross Assets Net asset
Year 2015 190,138,389.93 -7,966,023.73 484,318,791.46 103,544,831.49
Year 2014 232,010,314.56 1,054,776.15 402,705,958.09 111,511,420.14
3. Relationship with the Company
Hangzhou Hangfa Generator Equipment Co., Ltd. is a holding subsidiary of HSTG, in which
HSTG is holding 85% of share equity. For Hangfa is under the common control with the Company,
it is regarded as related legal person according to Article 10.1.3 (II) – “Entity or other
organizations directly or indirectly controlled by aforesaid legal entity other than the PLC and its
holding subsidiaries;” of the Share Listing Rules of Shenzhen Stock Exchange. Therefore it is
recognized as the related entity of the Company. This is a related transaction.
4. Description of related transactions and their necessity
The major related transactions with Hangzhou Hangfa Generator Equipment Co., Ltd. were
purchasing of steam turbine generators. It was to satisfy the demand of customers. Some
customers require the Company to provide generators along with the steam turbines. Hangfa has
been providing products to the Company since long before it was given to HSTG.
(III) Hangzhou Nanhua Wooden Packaging Co., Ltd.
1. Profiles
(1) Incorporation date: December 31, 2003
(2) Registered address: 62 Xingqiao Road North, Xingqiao, Yuhang, Hangzhou
(3) Office address: 62 Xingqiao Road North, Xingqiao, Yuhang, Hangzhou
(4) Enterprise property: state-participated limited company
(5) Legal representative: Jiang Yonggen
(6) Registered capital: RMB2 million
(7) Taxation registration No. 330125143326331
(8) Business scope: manufacturing, processing, and sales of wooden products (wooden packaging
material); sales of construction material, decoration material; all legal items not subject to
approval of authorities.
(9) The controlling shareholder: Hangzhou Steam Turbine Power Group Co., Ltd.
2. Recent financial information
In RMB
Periods Turnover Net profit Gross Assets Net asset
Year 2015 13,432,890.17 1,337,221.53 16,195,754.22 15,260,109.17
Year 2014 13,009,097.29 1,753,430.66 17,104,881.97 16,422,887.64
3. Relationship with the Company
Hangzhou Nanhua Wooden Package Co., Ltd. is a holding subsidiary of HSTG, in which HSTG is
holding 30% of share equity. For it is under the common control with the Company, it is regarded
as related legal person according to Article 10.1.3 (II) – “Entity or other organizations directly or
indirectly controlled by aforesaid legal entity other than the PLC and its holding subsidiaries;” of
the Share Listing Rules of Shenzhen Stock Exchange. Therefore it is recognized as the related
entity of the Company, and this is a related transaction.
4. Description of related transactions and their necessity
Related transactions with Hangzhou Nanhua Wooden Packaging Co., Ltd. were mainly purchasing
of wooden packaging material which were necessary for shipping of the products.
(IV) Hangzhou Nanfang Tongda Gears Co., Ltd.
1. Profiles
(1) Date of incorporation: January 25, 2005
(2) Registered address: 130 Stadium Road, Xiacheng District, Hangzhou
(3) Office address: 601, Block B, Lingjun World, 10 Chaowang Road
(4) Enterprise property: state-participated limited company
(5) Legal representative: Mr. Wang Zhenfeng
(6) Registered capital: RMB6 million
(7) Taxation registration No. 330103770809041
(8) Business scope: whole selling and retailing of gear boxes, gear speed reducer, steam turbine
and parts, steel, electro-mechanism equipment (exclude cars), common machinery, hardware &
electric materials.
(9) The controlling shareholder: Hangzhou Steam Turbine Power Group Co., Ltd.
2. Recent financial information
In RMB
Periods Turnover Net profit Gross Assets Net asset
Year 2015 36,426,025.63 4,194,733.50 52,859,340.06 28,844,792.27
Year 2014 64,726,158.79 4,611,531.15 62,661,251.91 29,650,058.77
3. Relationship with the Company
Hangzhou Nanfang Tongda Gears Co., Ltd. is a holding subsidiary of HSTG, in which HSTG is
holding 30% of share equity. For Hangfa is under the common control with the Company, it is
regarded as related legal person according to Article 10.1.3 (II) – “Entity or other organizations
directly or indirectly controlled by aforesaid legal entity other than the PLC and its holding
subsidiaries;” of the Share Listing Rules of Shenzhen Stock Exchange. Therefore it is recognized
as the related entity of the Company, and this is a related transaction.
4. Description of related transactions and their necessity
The Company is mainly purchasing gear boxes and jigger devices from Nanfang Tongda. These
are essential to the Company’s product. Some of the industrial steam turbines are required to
maintain certain speed by using of gear boxes.
(V) Hangzhou Steam Turbine Industrial Co., Ltd.
1. Profiles
(1) Date of incorporation: February 11, 2004
(2) Registered address: No. 357 Shiqiao Road Hangzhou City
(3) Office address: No. 357 Shiqiao Road Hangzhou City
(4) Enterprise property: state-participated limited company
(5) Legal representatives: Qiu Jinyong
(6) Registered capital: RMB2.5 million
(7) Taxation registration No. 330103757237210
(8) Business scope: manufacturing and processing of: steam turbine parts, electronic tool parts,
mining equipment parts; wholesaling and retailing of: home electric appliances, grocery, food,
agriculture products (other than those under national control), stationery; service: restaurant,
out-campus education and training programs, residential services. All legal items not subject to
approval of authorities.
(9) The controlling shareholder: Hangzhou Steam Turbine Power Group Co., Ltd.
2. Recent financial information
In RMB
Periods Turnover Net profit Gross Assets Net asset
Year 2015 11，924，461.36 2，443，572.06 16，311，489.59 9,187,825.64
Year 2014 14,147,311.51 4，938，787.45 15,662,091.28 9,244,253.58
3. Relationship with the Company
Hangzhou Steam Turbine Industrial Co., Ltd. is a holding subsidiary of HSTG, in which HSTG is
holding 10% of share equity. For it is under the common control with the Company, it is regarded
as related legal person according to Article 10.1.3 (II) – “Entity or other organizations directly or
indirectly controlled by aforesaid legal entity other than the PLC and its holding subsidiaries;” of
the Share Listing Rules of Shenzhen Stock Exchange. Therefore it is recognized as the related
entity of the Company, and this is a related transaction.
4. Description of related transactions and their necessity
Hangzhou Steam Turbine Industrial Co., Ltd. was reconstructed from infrastructure departments
of HSTG. The related transactions with it are mainly supporting services and medical services
which are necessary for the Company doesn’t have these departments.
(VI) Hangzhou Steam Turbine Automobile Sales & Service Co., Ltd.
1. Profiles
(1) Date of incorporation: September 2, 1998
(2) Registered address: No. 357 Shiqiao Road Hangzhou City
(3) Office address: No. 357 Shiqiao Road Hangzhou City
(4) Enterprise property: state-participated limited company
(5) Legal representative: Yao Binglin
(6) Registered capital: RMB5 million
(7) Taxation registration No. 330103710976614
(8) Business scope: wholesaling and retailing of: automobiles (except for sedan cars) and parts,
metal material, construction material, electronic machine and instruments. Service: cargo
transportation, automobile repairing (class B), all legal items not subject to approval of authorities.
(9) The controlling shareholder: Hangzhou Steam Turbine Power Group Co., Ltd.
2. Recent financial information
In RMB
Periods Turnover Net profit Gross Assets Net asset
Year 2015 86,465,685.45 8,190,699.49 49,362,377.24 33,676,580.36
Year 2014 78,043,407.08 8,445,351.94 42,424,592.91 27,985,880.87
3. Relationship with the Company
Hangzhou Steam Turbine Automobile Sales Co., Ltd. is a holding subsidiary of HSTG, in which
HSTG is holding 30% of share equity. For it is under the common control with the Company, it is
regarded as related legal person according to Article 10.1.3 (II) – “Entity or other organizations
directly or indirectly controlled by aforesaid legal entity other than the PLC and its holding
subsidiaries;” of the Share Listing Rules of Shenzhen Stock Exchange. Therefore it is recognized
as the related entity of the Company, and this is a related transaction.
4. Description of related transactions and their necessity
Related transactions with Hangzhou Steam Turbine Automobile Sales & Service Co., Ltd. are
mainly cargo transportation, international cargo agency, employee transportation, and vehicle
repairing services.
The Company does not have transportation division, therefore accepting of these services are
necessary.
(VII) Hangzhou Steam Turbine Engineering Co., Ltd.
1. Profiles
(1) Date of incorporation: September 30, 2011
(2) Registered address: 18 Street No. 22, Technical Development Zone, Hangzhou
(3) Office address: 15-17 Floor, A Building, No.68, Qingchun Road, Hangzhou.
(4) Enterprise property: state-controlled company limited
(5) Legal representative: Ye Zhong
(6) Registered capital: RMB200 million.
(7) Taxation registration No. 330100583208910
(8) Main business scope: general contracting of power supply projects; design and installation of:
electro-mechanical equipment, mid-small scale thermal powerplant, energy saving technical
reconstruction and services, technical consultancy; import and export of goods; whole selling of:
packaged equipment, metal material, electronic installations, wires, cables, instruments,
fire-resistance materials. (as stipulated by the authority)
(9) The controlling shareholder: Hangzhou Steam Turbine Power Group Co., Ltd.
2. Recent financial information
In RMB
Periods Turnover Net profit Gross Assets Net asset
Year 2015 67,209,420.35 -69,215,371.15 834,010,885.11 98,653,178.91
Year 2014 243,873,457.49 -1,935,645.34 704,693,205.68 168,402,054.33
3. Relationship with the Company
Hangzhou Steam Turbine Engineering Co., Ltd. is a holding subsidiary of HSTG, in which HSTG
is holding 72.25% of share equity. For it is under the common control with the Company, it is
regarded as related legal person according to Article 10.1.3 (II) – “Entity or other organizations
directly or indirectly controlled by aforesaid legal entity other than the PLC and its holding
subsidiaries;” of the Share Listing Rules of Shenzhen Stock Exchange. Therefore it is recognized
as the related entity of the Company, and this is a related transaction.
4. Description of related transactions and their necessity
To satisfy the needs of business operation of both parties, sales of steam turbines to Hangzhou
Steam Turbine Engineering Co., Ltd. is a support to the Company’s shares force.
(VIII) Hangzhou Hangqilun Compressor Co., Ltd.
1. Profiles:
(1) Date of incorporation: July 9, 2014
(2) Registered address: No. 357 Shiqiao Road Hangzhou City
(3) Office address: No. 357 Shiqiao Road Hangzhou City
(4) Type of enterprise: state-owned limited company
(5) Legal representative: Yan Jianhua
(6) Registered capital: RMB10 million
(7) Main business scope:
Licensed items: manufacturing of rotating machinery and equipment such as compressors (within
expiration period). General items: services such as design, development, technical consulting,
repairing, and reformation of compressors. Design of integrated compressor projects. Wholesale
and retail of parts and material related to compressors.
(8) The main shareholder: Hangzhou Steam Turbine Power Group Co., Ltd.
2. Recent financial information(Established in 2014)
In RMB
Periods Turnover Net profit Gross Assets Net asset
Year 2015 12,046,076.92 -5,556,009.47 34,265,133.57 985,869.51
Year 2014 0 -1,858,121.02 21,884,997.81 2,141,878.98
3. Relationship with the Company
HSTG is holding 63.64% of the Company’s share capital as the controlling shareholder. While it is
also holding 40% of the share capital of the Compressor Company. Therefore the Compressor
Company is under the common control with the Company, it is regarded as related legal person
according to Article 10.1.3 (II) – “Entity or other organizations directly or indirectly controlled by
aforesaid legal entity other than the PLC and its holding subsidiaries;” of the Share Listing Rules
of Shenzhen Stock Exchange. Therefore it is recognized as the related entity of the Company.
4. Description of related transactions and their necessity
The Company is mainly providing steam turbine products and processing and installation to the
Compressor Company.
Engaging of the contracts between the Company and the Compressor Company was for the
expanding of the Company’s market share. For compressors and steam turbines are at the same
stream of production, the co-operation will benefit the competition of the both parties.
（IV）Hangzhou Wandong Electronic Co., Ltd.
1. Profiles:
(1) Date of incorporation: January 18, 1998
(2) Registered address: Room 301, No. 385 Wener Road, Xihu District,Hangzhou City
(3) Office address: No. 10 Shixiang Road, Hangzhou City
(4) Type of enterprise: state-owned limited company
(5) Legal representative: Li Guiwen
(6) Registered capital: RMB32 million
(7) Taxation registration No.
(8) Main business scope: The development of electronic techniques, service, results transferring;
Production: Class II 6831 Medical X-Ray Tube; Wholesales, Retail: Class I Medical Apparatus
and Instruments, Self-produced Product; Include the business scope of subordinate branches;
Other all legal projects without being submitted as well as being examined and approved.
2. Recent financial information
In RMB
Periods Turnover Net profit Gross Assets Net asset
Year 2015 40,488,873.54 -4,782,742.39 64,480,766.46 52,444,182.35
Year 2014 39,459,101.68 864,823.23 67,853,866.80 57,598,454.26
3. Relationship with the Company
Hangzhou steam turbine group holds 63.64% of the shares of the company , and is the holding
shareholder of the Company. It is complying with Article 10.1.3 (I) of Share Listing Rules of
Shenzhen Stock Exchange. HSTG is the related legal person of the Company. This is a related
transaction.
Hangzhou steam turbine group holds 70% stake in Wandong electronics Company,For
Compressor Company is under the common control with the Company, it is regarded as related
legal person according to Article 10.1.3 (II) – “Entity or other organizations directly or indirectly
controlled by aforesaid legal entity other than the PLC and its holding subsidiaries;” of the Share
Listing Rules of Shenzhen Stock Exchange. Therefore it is recognized as the related entity of the
Company. This is a related transaction.
4. Description of related transactions and their necessity
Related transactions with Wangdong Electronic Co., Ltd. were mainly purchasing of Component
and parts material.
IV. Main contents of the related transactions
1. Pricing policies and basis of the transactions
The above related transactions were conducted under the principles of trustfulness, equality, and
voluntary. All pricing are with reference to market prices. In case bidding invitation is required as
market routine, the prices will be decided by open and legal procedures.
2. Entering of agreements
The Company has entered the general agreements with the above related parties, and detailed
contracts were engaged on each particular transaction.
3. Payment and clearance
According to the agreement provided by the contracts.
V. Purposes and influences of the related transactions on the
company
1. For the necessity of the related transactions please go to the profiles of parties above.
2. Impact of the related transactions on the Company
The Company sells products to some of the related parties to increase demand of the Company’s
products, as well as increase the efficiency of sales process including transportation, packaging.
This enables the Company to focusing on its main business. All prices are on fair prices without
impairing the Company’s interests.
3. Legality of the process of transactions
The pricing mechanisms of the related transactions are examined by the Board and subject to
approval of the shareholders’ meeting. Related directors and shareholders have waived from
voting of such proposals.
VI. Independent directors’ opinions
The above related transactions are complying with the Company Law, the Articles of Association,
and related laws and regulations. They were conducted through legal examining procedures and
satisfying the needs of normal business operation of the Company. Pricing was on fair basis and
no interests of the Company or the mid-small shareholders were impaired.
VII. Document Ready for Inquiring
1. Resolutions of the 28th meeting of the 6th term of Board;
2. Independent opinions of the independent directors on the routine related transactions.
The Board of Directors of
Hangzhou Steam Turbine Co., Ltd.
March 19, 2016
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