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Stock Code: 200771 Stock ID: Hangqilun B Announcement No. 2016-38

Hangzhou Steam Turbine Co., Ltd.

Announcement on the Annual Write-offs Asset of year 2015

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.

The 6th term of Board held its 28th Meeting on March 17, 2016, The meeting examined the

Proposal of the Write-offs Asset of the Company, This proposal was adopted with 11 votes in

favor, 0 objection and 0 waive.The 2015 annual write-offs asset of the Company is RMB8.1796

million. According to ¡°Stock Listing Rules¡± of Shenzhen Stock Exchange and ¡°Regulation of

Assets Depreciation Reserves and Write-offs Asset¡±of the Company, no submission will be

required for this write-offs asset to be deliberated by the shareholder¡¯s meeting of the Company.

Now the specific situations are announced as follows:

I.Generalization of the Write-offs Asset Situation

1.The write-offs of receivables is RMB 5,695,365.27 , of which the write-offs of the Company¡¯s

home office is RMB 4,739,521.34; Hangzhou Zhongneng Steam Turbine Power Co., Ltd. , the

holding subsidiary of the Company, the write-offs of which was RMB563,008.93; Hangzhou

Turbine Machinery Co., Ltd., the holding subsidiary of the Company, the write-offs of which was

RMB33,935; Zhejiang Turbine Complete Set Technology Development Co., Ltd., the holding

subsidiary of the Company, the write-offs of which was RMB184,000 ; Hangzhou Turbine

Auxiliary Machinery Co., Ltd., the holding subsidiary of the Company, the write-offs of which

was RMB174,900 ;.

(2)Other write-offs of receivables was RMB285,250 .

(3)Write-offs in product was RMB2,198,984.64 , which mainly involved with the occurred cost

and expense of the 28 processing products in long-term pause or in terminating production.

II.Influence of the Write-offs Asset to the Company¡¯s Financial Condition

The Company¡¯s write-offs asset has been withdrawn in full amount for bad-debt provision and

inventory falling price reserves, where no influence will be exerted to the current profit and loss.

III.Deliberation Procedure of the Write-offs Asset

The write-offs asset has been examined and adopted by the 28th meeting of the 6th board of

directors of the Company. According to ¡°Stock Listing Rules¡±of Shenzhen Stock Exchange and

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¡°Regulation of Assets Depreciation Reserves and Write-offs Asset¡±of the Company, no

submission will be required for this write-offs asset to be deliberated by the shareholder¡¯s meeting

of the Company

IV. The reasonableness explanation of the provision for impairment of assets by the board of

directors

The Company¡¯s board of directors considers that this write-offs asset complied with Accounting

Standards for Business Enterprises and management system on the Company¡¯s write-offs asset,

which truly reflected the Company¡¯s financial condition, where the write-offs basis is sufficient

and which won¡¯t involve with the Company¡¯s relate party.Therefore,the Company¡¯s board of

directors agreed on this write-offs asset. The Company strictly complied with the relevant

regulations of ¡°Regulation of the Company¡¯s of the provision for impairment of assets and

Write-offs Asset¡±to fulfill the deliberation procedure.

V. Independent Opinions of the Independent Directors for the Company¡¯s of the provision

for impairment of assets

The company has carried out the Write-offs Asset of year 2015 by conforming to the

Accounting Standards for Enterprises and relevant regulations, which was in line with the

company¡¯s actual situation and the company law, the articles of association and relevant

regulation and laws, with standardized procedure for reviewing, and there was no situation that

would jeopardize the interests of the company and the minority shareholders. The Write-offs Asset

was agreed.

VI.Examination and Approval Opinions of the Board of Supervisor on the Company¡¯s of

provision for impairment of assets

The Company¡¯s board of directors considers that this write-offs asset complied with

Accounting Standards for Business Enterprises and management system on the Company¡¯s

write-offs asset, which truly reflected the Company¡¯s financial condition, where the write-offs

basis is sufficient and which won¡¯t involve with the Company¡¯s relate party.Therefore,the

Company¡¯s board of directors agreed on this write-offs asset.

VII. Documents for reference

1. Resolutions of the 28th meeting of the 6th Term of Board;

2. Resolutions of the 14th Meeting of the 6th Supervisory Committee

3. Independent Opinions of Independent Directors

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The Board of Directors of

Hangzhou Steam Turbine Co., Ltd.

March 19, 2016

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